# Indian Economy - News & Updates - Archive



## Neo

India's economic report card 



[URL="http://newsimg.bbc.co.uk/media/images/39688000/jpg/_39688103_kaushik_basu_byl_58.jpg"][/URL]
By Kaushik Basu 
Professor of economics, Cornell University 

[URL="http://newsimg.bbc.co.uk/shared/img/999999.gif"]

[/URL]


[URL="http://newsimg.bbc.co.uk/media/images/41811000/jpg/_41811986_kaushikwoodafp203.jpg"][/URL] India's per capita income is a tad higher than sub-Saharan Africa's 

*For non-economists the World Development Indicators (WDI), published annually by the World Bank, must seem like a cure for insomnia. It is long, is written on large-format paper, crammed with numbers and consists of very few words.* 

But, as an economist, I find the WDI to be a very valuable source book. 
The paucity of words means I need have no fear of being burdened with somebody's expert opinion (and can merely inflict mine on you). While impressionistic writings and generalisations have their role, and pure statistics has its own risks, the latter often helps us cut through popular hype to see economic reality as it is. 

The recently released WDI 2006 is a wonderful document for evaluating cross-country performance. This column's focus being what it is, let us begin with South Asia. 

*Sobering* 

Given the huge positive press that India has received in recent times, it is sobering to discover that India's per capita income is just a shade higher than that of sub-Saharan Africa, and about one-sixth that of Latin America. 
Equally surprising is that 35% of India's population lives on less than $1 a day, which is comparable to Bangladesh's 36% and much worse than Pakistan's 17% and Sri Lanka's 6%. 


[URL="http://newsimg.bbc.co.uk/shared/img/o.gif"]

[/URL]What then is the basis of optimism for India? 

It has everything to do with change. 

To check this out statistically I pulled out WDI 1998 from my shelf. This gives data for mainly 1996 and so is unaffected by the East Asian crisis which started in 1997. 
In 1996, India had a per capita income of $380, Pakistan $480, Bangladesh $260 and Sri Lanka $740. 

Compare these with the figures in the latest WDI (which pertain to 2004). 
India's per capita income has risen to $620 and has overtaken Pakistan's $600; and the relative gap with Sri Lanka, which now has a per capita income of $1010, has narrowed. Bangladesh which currently has a per capita income of $440 has grown reasonably well and so has lost out with India more marginally. 

*Exaggeration* 

How does India's growth compare with the world beyond South Asia? 


The recent cover story on the Indian economy in Time magazine repeats what is common wisdom, to wit, that over the last three years India has achieved "the second fastest [growth] rate in the world". 

The WDI allows us to check the veracity of this statistically. And this common wisdom turns out to be an exaggeration. 

If we take the national income growth rate over the period 2000-04, with an annual growth rate of 6.2% India was not second but the 17th fastest-growing nation in the world. 

If we take a longer period, 1990 to 2004, India moves up to being the fourth fastest-growing economy in the world, behind China, Vietnam and Mozambique. 

And if we take an even longer view - from 1980 to now, India does indeed come second, behind China and virtually tying with Vietnam. 
So what India has excelled in is sustained growth. It is this that has given rise to hope. And, combined with the vibrancy of democracy and the successes of higher education in India, this has led some commentators to argue that its future augurs even better than China's. 

*Inequality* 

One worrying feature that could cause political instability and jeopardise this bullish forecast - and much of South Asia shares this anxiety - is the problem of poverty and inequality. 
Much has been written about this but again some statistical fact checking sheds new light. 
Inequality in South Asia is large but not as large as in much of the rest of the world. 
[URL="http://newsimg.bbc.co.uk/media/images/41811000/jpg/_41811988_kaushikpakhomeless.jpg"]

[/URL] Even smaller inequality means much greater hardship for the poor in South Asia 

Let us consider the ratio of income earned by a country's richest 10% and the poorest 10%. The ratio for India is 7.3. That is, the richest 10% of the population is a little over seven times as rich as the poorest 10%. 
All South Asian nations have similar ratios. 
This is a lot of inequality but not as much as in China which has a ratio of 18.4 or the United States 15.7. 
The problem with South Asia is that, being poor, even this smaller inequality means much greater hardship for the poor and this is what is feeding various kinds of rebellious movements in the region. 
This will be one of the most formidable challenges confronting India over the next decade if it is to live up to its promise. 
The difficulty arises from the fact that the rising inequality is largely a concomitant of globalisation and, hence, for a single country to take action against this is to take the risk of a pathological backlash on the economy. 
To try to cap high-end income, as some have naively suggested, will cause the flight of skilled citizenry and capital to other nations and will exacerbate poverty. 
To wantonly subsidise the poor or to dole out largesse will cause fiscal bankruptcy, which will make the problem worse in the long run. 
The focus will have to be on creating private-sector jobs with the complementary use of a few well-directed subsidies. This is not a matter of sloganeering and populist pronouncements but will require a combination of scientifically designed policy interventions that reach out to the poor without damaging market incentives and the entrepreneurial spirit. 


http://news.bbc.co.uk/2/hi/south_asia/5116596.stm


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## Neo

Sig,

Do you have access to this WDI publication?
I have difficulty believing in some figures, they are inaccurate.
Poverty in India cannot be 35%!!  
Pak GDP/pc is higher than India and poverty line is around 23.9% as per latest economic survey.


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## A.Rahman

So when are they going for moon? any ideas?


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## sigatoka

Neo said:


> Sig,
> 
> Do you have access to this WDI publication?
> I have difficulty believing in some figures, they are inaccurate.
> Poverty in India cannot be 35%!!
> Pak GDP/pc is higher than India and poverty line is around 23.9% as per latest economic survey.


 
I havent downloaded it, but ive always had a pretty good idea where India stands in the world economy statistically. 

Do you think Poverty in India is more or less than 35%? 

Pak. GDP per capita is lower than India's im sorry to say Neo, however income inequility is higher in India than in Pak. This happened because after 1991 crisis in India, they instituted a lot of reforms while Pak. was doing nothing, its only since Mush. has come into power (with Aziz) that reforms have started here. Its only since 2000 that a lot of reforms have been implemented in Pak. 

Does the fact that India has slightly higher GDP per capita but more income equality better than Pak. situation? The answer is, it depends on the person. 

Lets go to the moment before you were born, assume you dont know who your parents will be, whether you will be intellignet or challenged and so forth. In india you will have an avg. income 4% more than Pak. yet around 30% chance you will be eating out of a rubbish dump. In Pak you have avg. 4% lower income, yet only 25% chance of eating out of rubbish dump. I would, and most people if they were truthful would choose the slighter lower avg. income yet reduce their chance of eating out of rubbish dump from 30% to 25%. 

This means that Pak. tradeoff between risk and income is more efficient than India's tradeoff. Why does this persist? Well, not really sure.

However, Pak. can and should catch and exceed India's per capita GDP while not increasing inequility. I believe it can be done because the recent reforms are notable for their depth and range, spreading across all industries while India is just plodding along, slow and steady with their reforms. Over the next 7 years Pak. should do very well, and slightly better than India (both will do well) unless something catastrophic happens.


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## sigatoka

A.Rahman said:


> So when are they going for moon? any ideas?


 
Probably fifteen years from now, I think China will get there within ten years. (Both unmanned of course)


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## Neo

Sig,

I have pretty good feedback on India economy and imho its much better than described in the article.
Poverty stands around 25% but its huge due the size of Indian population, i.e. 1.090.000.000!

I'm not sure if Indian GDP/pc is higher, Pakistan recorded $847 last year and figures are confirmed by WB.

India needs to rebase the CPI, I think the size of the GDP is underrated.


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## Averroes

Something I found whilst googling, it really makes you sad. These are not the people we want to go to war against, but we want to aid them.

- people below poverty line: about 260 million (acc. to AB Vajpayee feb 04)
- poor living in India: one quarter of the world's poor [BBC Aug 04]
- people living on less than 1 Euro per day (50-55 Rs in 2004): about 30 % of population
- number of people living in slums: 150 million [BBC 15 sep 2004]
- * people in Mumbai living in shanty towns, open spaces, or on pavements: 50% of 
Mumbai's population [BBC, Nov 2005]
- world's largest slum: located in Mumbai; Dharavi, 432 acres 
- * number of inhabited buildings declared as dangerous or dilapidated in Mumbai: 
19,000 [BBC; Sep 2005]
- * number of children in India who die before the age of 5: 63 out of 1000 according 
to UN report [BBC; Sep 2005]
- children under 3 years of age in Orissa severely malnourished: 21 % (Feb 04, acc to 
National Family Health Survey); or 3.8 % (acc. to data collected by the state)
- tribal children below the age of six who have died of malnourishment-related causes 
in 15 districts of Maharashtra: 9,000 (between Apr 2003 and May 2004)
- * number of street children in Delhi: 150,000 estimate [BBC; Sep 2005]

http://www.neoncarrot.co.uk/h_aboutindia/india_statistics_1.html#poverty


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## ab041937

AverrÃÂ¶es said:


> http://www.neoncarrot.co.uk/h_aboutindia/india_statistics_1.html#poverty



This one is a British Domain but yet, they have everything about India only.


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## Averroes

Please refer to facts. Your argument of it being british domain is simply puerile, do you have anything that contradicts those simple facts? India is an grossly exaggerated market with the worlds largest indigenous poverty stricken population, infested with caste racism.


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## ab041937

AverrÃÂ¶es said:


> Please refer to facts. Your argument of it being british domain is simply puerile, do you have anything that contradicts those simple facts? India is an grossly exaggerated market with the worlds largest indigenous poverty stricken population, infested with caste racism.



You are too quick to contemplate my thoughts. Did I type anything else except for a single line? My surprise was simply on the point that a british domain has hosted an India-specific website. Now2, whether India is a grossly exaggerated market? I guess multinationals who are queuing up in hordes know better than you and me. Probably, they didn't bother to google up & read your report. Better luck next time:biggrin: :biggrin:


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## Averroes

This forum is for serious discussions, Can you contribute or not?

The case has been put forward by laymedia that India is rising, yet at a deeper inspection thing's are surprisingly different.

Multinationals are the same ones who looted India during imperial days. They see a society filled with inequity, with hundreds of millions cheap labour opportunities.

If the facts provided here are false, please give us reliable sources quoting otherwise.


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## ab041937

OK, Let me contribute *seriously*

I do not refute your claims that India is poor. It is just as poor as any South Asian state. But, I would want to know where does your facts state that India is not rising?

#1) 260 mln below poverty line - Govt report in 2003 stated that 26% of the nations population is poor. Whereas in 1991, it was 36%. Every year, 1-1.5% population is moving out of Poverty line. So, it should now be somewhere between 20-22%. Even CIA website/IMF/WB agree upon these figures.

#2) 1 Qtr of World's poor in India - India also accounts for 18% of world population. 

#3) 30% of population living on less than a Euro a day - Care to know how far can Euro go in India. It has sufficient purchasing value to buy enough food to feed a stomach. Again read #1, this figure is decreasing everyday aswell. Moreover, a growing economy is always marred with chaos. If everyone tries to grab the slice of cake then you only have spoil in your hand. It takes some time before the tickle down effect takes place. No wonder if India has income disparity. China on the other hand has one of the highest income disparity level. We have given up our socialist ways of thinking. Its capitalism now. Capitalism is unequal sharing of wealth while socialism is equal sharing of misery. When time comes everyone will benefit.

#4) 63 out of 1000 children in India die before the age of 5 - I would be interested in figures in 1991 or 1981. Also, Comparative results from developing countries would be useful. If India has fared any lesser than I agree India is not rising.


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## Neo

Aids 'could hit' India's growth 







More than 5m people in India have HIV

*India's economy could suffer if the country fails to check the spread of HIV and Aids, a new report says.* 

Economic growth currently at 8% could fall by nearly 1% if the disease is not contained, it says. 

But the head of India's main anti-Aids agency said the government's prevention drive could help reverse this. 
More than five million Indians are infected with HIV and the UN says India now has more people with the virus than any other country in the world. 

"Economic growth could decline by 0.86 percentage points... and per capita gross domestic product by 0.55 percentage points," over a 14-year period beginning in 2002, the National Council of Applied Economic Research (NCAER), a government-funded body, said. 






*The growth of HIV infections can be reversed with the government pushing an aggressive campaign*






Sujata Rao
Director, Naco


It said the government needed to spend more on prevention programmes. 
"It is time to see policy action against Aids as a growth-enhancing policy endeavour, and, first and foremost, dedicate adequate resources for this purpose," the report says. 

*Increased poverty* 

The report identifies unskilled labourers in industries such as construction, chemicals, mining and quarrying as the most vulnerable to infection. 
It also concluded that Aids could lead to increased poverty in India. 
But Aids prevention organisations in India say that an aggressive campaign against the disease could head off the threat. 
"The government of India's scaled-up response in financing and energy will halt and reverse the trend the epidemic has shown over the next four or five years," said Ruben del Prado of UNAids. "We have already found that in high-risk states, the growth of HIV infections can be reversed with the government pushing an aggressive campaign against the spread of the disease," added Sujata Rao, director of India's National Aids Control Organisation. 

http://news.bbc.co.uk/2/hi/south_asia/5198402.stm


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## Jay_

Neo said:


> "The government of India's scaled-up response in financing and energy will halt and reverse the trend the epidemic has shown over the next four or five years," said Ruben del Prado of UNAids. *"We have already found that in high-risk states, the growth of HIV infections can be reversed with the government pushing an aggressive campaign against the spread of the disease," added Sujata Rao, director of India's National Aids Control Organisation. *


Looks much better now..


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## Neo

Turning a blind eye to the problem doesn't make it disappear...but I agree the way you put it, it looks way better.


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## Owais

*Economical zone to be established at LoC: Kalam* 

SRINAGAR: Indian President Abdul Kalam has announced a four-points Peace Plan for Occupied Jammu & Kashmir, which includes establishment of an economical zone near Line of Control (LoC). 

Addressing a state assembly meeting, Kalam said prevalence of peace was a vital element for the progress of Kashmir, while asking security forces to get citizens involved in order to stop militant activities in the valley.

Kalam's plan includes: establishment of an economical zone near LoC, social reconstruction for progress in sensitive areas, elimination of militancy, and security of citizens.


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## desimorty

More people die from road accidents then aids. And i just made the figures up so it might be true. Those people that got aids probabily aren't contributing to India. If India chooses to fight AIDS it has to start with handing out free condoms which it already does but unfortunatly there being used for other domestic purposes and the other thing they need to do is blow up ALL the RED LIGHT DISTRICTS! India needs to take a Commie apporach to this and just jail all the hookers, and madams for life in some mining facility(Mining facility is my idea!). And for gods sake LEGALIZE **** NOW! It reduces the need for hookers and even reduces murders and rapes...according to the Japanese. I trust the Japanese. Besides the only known form of population control in India is a free condom and a bollywood flick which actually works.


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## sigatoka

jatt said:


> 1. More people die from road accidents then aids. And i just made the figures up so it might be true.
> 
> 2. Those people that got aids probabily aren't contributing to India. If India chooses to fight AIDS it has to start with handing out free condoms which it already does but unfortunatly there being used for other domestic purposes and the other thing they need to do is blow up ALL the RED LIGHT DISTRICTS!
> 
> 3. India needs to take a Commie apporach to this and just jail all the hookers, and madams for life in some mining facility(Mining facility is my idea!).
> 
> 4. And for gods sake LEGALIZE **** NOW! It reduces the need for hookers and even reduces murders and rapes...according to the Japanese. I trust the Japanese.
> 
> 5. Besides the only known form of population control in India is a free condom and a bollywood flick which actually works.


 
1. Whats your point? 

2. Why dont we say the same thing about people with malaria, T.B. or even the old people? Why dont we blow them all up as well? 

3. That could drive prostitution further underground (forgiv the pun) and might be difficult to monitor hygene and standards. (to prevent spread of disease) 

4. Association does not prove causation. The wife asked husband how to make her breasts bigger. He said rub it with toilet paper. After few days, she said it wasnt working and y husband recommended it? Husband says it worked for her arse over the years. Husband mistook association for causation. 


5. It hasnt worked for a simple reason. Condoms will lower births if people WANT less children. A better way to lower population growth is to raise incomes (of women). This increases the opportunity cost of having children and thus over time lowers population growth. (p.s. this is not simple association, its been proven to causative by economists unlike your stupid **** example)


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## Jay_

jatt said:


> Those people that got aids probabily aren't contributing to India.


Unfortunately, a lot of people get aids due to the nature of their work, case and point truck drivers.



> If India chooses to fight AIDS it has to start with handing out free condoms which it already does but unfortunatly there being used for other domestic purposes and the other thing they need to do is blow up ALL the RED LIGHT DISTRICTS!


You cannot abolish adultery, it has been here from Adam and Eve.



> Besides the only known form of population control in India is a free condom and a bollywood flick which actually works.


Yes it does, also there is a stron need to educate the people. Only then any positive social change is possible.


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## desimorty

If road accidents don't hit growth then why should aids? If you get AIDS its you bloody damn fault! So we should close all the prostitution rings even if they move further underground because that way they have less room for prostitutes and less business! Prostitution goes hand in hand with slavery. So don't tell me it can get worse when its already at its worse.
Condoms do work. So does porngraphy. The Japanese have noticed reduced rape thanks to it and the internet for being an outlet for serial rapist.


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## Jay_

jatt said:


> If road accidents don't hit growth then why should aids? If you get AIDS its you bloody damn fault!


These are people who are contributing for the economy. Also the govt will be spending money on them for their treatment, lose in productivity etc etc. This is the same reason why govt wants to eradicate TB, Malaria etc.


> So we should close all the prostitution rings even if they move further underground because that way they have less room for prostitutes and less business!


Its not possible. Are you going to do door to door searches 24/7/365 days? Who is going to enforce it? Police already have their hands full with L&O.


> Prostitution goes hand in hand with slavery. So don't tell me it can get worse when its already at its worse.


It will get much worse.


> Condoms do work. So does porngraphy. The Japanese have noticed reduced rape thanks to it and the internet for being an outlet for serial rapist.


A hooker is as cheap as a DVD in India  **** cannot replace sex.


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## desimorty

> Its not possible. Are you going to do door to door searches 24/7/365 days? Who is going to enforce it? Police already have their hands full with L&O.


Whats the point of having law enforcement agencies if they don't enforce the LAW! What else is the police doing besides protecting Salman Khan and taking bribes?

Porngraphy may not stop all prostitution but it will slow bring it WILL reduce it. Plus perhaps tourists won't have to put up with so many old horny men.


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## Neo

India 'needs huge services boost' 


 




Firms want India to boost its spending on roads, ports and railways

*India needs to invest $331bn (ÃÂ£173bn) on infrastructure over the next five years if it wants to maintain its rapid economic growth, a study suggests.* 

Research for the Confederation of Indian Industry (CII) found India needed to spend 8% of its gross domestic product on new infrastructure. 

The CII said India was spending much less on services like roads and ports than China and other Asian countries. 

India's economy is currently growing an annual rate of just over 8% a year. 

But experts have warned that this growth will slow if the country cannot build enough new roads, ports, airports and power stations. 

The CII said that India was expected to spend about $47bn on infrastructure in the fiscal year to March 2007, a figure which needs to be doubled to $84bn a year by 2012. 
The industry body added that an investment strategy needed to be drawn up between the government, regional states and the private sector. 
 
http://news.bbc.co.uk/2/hi/business/5250752.stm


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## Neo

By Sanjoy Majumder 
BBC News, Delhi 











India needs to boost its spending on roads, ports and railways

*India is one of the World Bank's largest borrowers receiving some six per cent of loans, grants and credits in 2006, the donor agency has said. *

South Asia continues to be one of the major recipients of World Bank money accounting for $3.8bn this past year. 
Both India and Pakistan figure in the top ten largest borrowers. 
The latest figures come as a study warns that India must spend a lot more on building its infrastructure if it is to compete with other Asian economies. 

India is one of the world's fastest growing economies and in the past few years has made impressive strides in manufacturing as well as in the area of business services, including outsourcing. 
Despite this, the country is still a major recipient of international aid. 

Over the past year, it received $1.4bn from the World Bank's two close affiliates - the International Bank for Reconstruction and Development and the International Development Association making it one of its top ten borrowers. 
Pakistan's share was a little higher at nearly $1.5bn. 

*Infrastructure* 

Much of the money is being spent on building infrastructure as well as improving the quality of education and health, especially in rural areas. 

A report that has just been released by a top Indian industry body - the Confederation of Indian Industry (CII) - says that India needs to spend $331bn over the next five years on infrastructure such as roads, ports and power plants if it is to compete with other economic giants such as its Asian rival, China. 
"While China spent 10.6% of GDP, India's capital spend on infrastructure was below 4% in 2003," the report says. 
"The disparity was even more stark in absolute figure terms, with China spending $150bn on infrastructure against India's $21bn." The study recognises that India can no longer depend on the government for money and that the funds will have to be generated from other sources, including private industry and international donors.


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## ab041937

India to be the third largest economy in 2050

GDP(nominal) - $27,235 Bln
GDP per capita (nominal) - $17011

http://www2.goldmansachs.com/hkchina/insight/research/pdf/BRICs_3_12-1-05.pdf


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## Neo

Thanks for the link Ab! :smile:


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## ab041937

Indian economy grows by 10.1% in the first Quarter of 2006.
Industrial output at 9.6%

AUG. 11 6:54 A.M. ET India's industrial production expanded 9.6 percent in June from a year ago, taking the fiscal year's first quarter growth to 10.1 percent, the government said Friday, suggesting the momentum seen in the past year was continuing.

The growth came on the back of sustained domestic demand and a surge in exports, although many had feared rising oil prices and interest rates could slow the economy.

Among industries, manufacturing output grew 11.2 percent in June compared with 13.2 percent in the same month a year ago. Mining production expanded 4.3 percent in June from last year, while electricity generation was up 7.7 percent.

For the April-June period, the fiscal year's first quarter, manufacturing growth was estimated at 11.2 percent.

Analysts said the industrial sector will likely sustain this growth given the huge investments businesses have made in expanding production capacities in recent months.

As the new capacities are put to use, industrial growth could even accelerate in the coming months, said Mahesh Vyas at the Center for Monitoring Indian Economy, a leading private forecasting agency.

The data boosted sentiments in the stock market.

The benchmark index of the Bombay Stock Exchange, the Sensex, rose 43 percent, or 0.4 percent, to 11,192 points, after slipping in early trade because of a warning by the U.S. Embassy that terror groups were planning fresh attacks in New Delhi and Bombay.

The industrial production followed robust quarterly earning reports from Indian companies, which have helped the stock market recover from the plunge it suffered in May and June amid global concerns over interest rates and oil price.

The impressive growth in industrial output, coupled with prospects of a good agricultural harvest because timely rains, will likely help the broader economy maintain the momentum seen in recent years.

The Indian economy has averaged 8.1 percent annual growth over the past three years, making it one of the fastest growing in the world.


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## Neo

India unlikely to meet MDG targets: ADB


The Asian Development Bank on Wednesday said India, despite making significant improvement in access to primary education, will not meet the Millennium Development Goal (MDG) targets as in the case of other countries in the Asia Pacific region.

ADB in its annual statistical publication, Key Indicators 2006 said the MDG targets for universal primary enrollment and a two-thirds reduction in child mortality were unlikely to be met unless governments rapidly intensified efforts to improve basic education and access to primary health care for the poor.

The multilateral funding agency said India along with Bangladesh had made significant progress in improving access to primary schooling but concerns remained regarding the quality to basic education and inequalities in enrolment rates.

It also said India was in danger of falling short of the target to reduce the under-five child mortality rate to two-thirds of 1990 levels by 2015. ADB put Cambodia, Pakistan and several Central Asian republics in the same category as India, which were unlikely to meet the target.

Commenting on the findings, ADB economist and author of the report Ajay Tandon said policies aimed at reducing inequalities in health and education needed to be based in careful, evidence-based analysis of the constraints at the country level.

He said in many countries inequalities were exacerbated by public spending that supports better-off segments of society, such as tertiary education but does little to help the poor.

http://www.hindustantimes.com/news/181_1769701,0002.htm


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## Tiki Tam Tam

Neo,

All this statistics is a whole lot of bull.

If only it helped the common man around the world.


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## Neo

Salim said:


> Neo,
> 
> All this statistics is a whole lot of bull.
> 
> If only it helped the common man around the world.


 
Sir,

I posted it since its coming from a respectable source, the ADB.


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## ab041937

*EAC forecasts 7.9% growth
*
UNI

New Delhi, Aug 14: In an upbeat assessment of the economy, the Economic Advisory Council (EAC) of the Prime Minister, has forecast a 7.9 per cent growth for 2006-07, but said agriculture was a major area of concern.

The EAC, which is headed by Dr C Rangarajan, says the high growth in the economy in the current fiscal will emanate from 1.5 per cent growth of output in agriculture, 9.7 per cent in industry and 9.5 per cent in the services sector.

The sub-sectors driving growth in the recent years were manufacturing, construction, communication and financial and business services.

The forecast of a near 8.0 per cent rate of growth in 2006-07, follows three years (2003-2006) of 8.1 per cent growth. This will be the first time in history that the indian economy would be growing at 8 per cent for a continuous span of four years.

The EAC report has called for better infrastructure, which can be developed by more public and private investment in infrastructure, as a necessary condition for sustaining these high rates of growth.

The EAC has also drawn the governmentÃ¢â¬â¢s attention to the need for Ã¢â¬Åreasonable rates of interest,Ã¢â¬Â and for lower fiscal deficit, particularly revenue deficit.

The report says agriculture remains a major area of concern, partly because of its continued dependence on rainfall and partly because of stagnation of yields.

The EAC says there was need for a vigorous push for new technologies, particularly for rain-fed crops, their active dissemination through extension supported by inputs, credit and rural infrastructure.

Energy and other infrastructure pose the main constraint on acceleration of growth of manufacturing.

Despite rising oil prices, due to which inflation at home has gone up from 4.1 per cent last year to 5.5 per cent this year, the EAC believes global growth will be sustained and that there were no significant external constraints for the expansion of the Indian economy.


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## MYSTIC

Neo said:


> Sir,
> 
> I posted it since its coming from a respectable source, the ADB.



Neo,
You can expect some mega projects from the center in the next couple of months.India had been facing funding problems in the past but now since the economy is booming more and more money is spent on public welfare.Voluntary corporate funding (where corporates become school sponsers )has started taking place in many cities.The main problem we face is faculty.The quality and qauntity of teachers needs to be improved.Health care is still a problem.I think we are long way away before we can provide healthcare facility to a population of a billion but we're trying none the less.If we succeed in what we plan to do than we are looking at a bright future for 1/5 of mankind :smile: .

Here's a comprehensive report of GS prediction on BRIC economy.

http://www2.goldmansachs.com/insight/research/reports/99.pdf


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## Neo

Generally agree with you Mystic, progress in India has been impressive but there's always room for improvement!
Thanks for the link!


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## sigatoka

Salim said:


> Neo,
> 
> All this statistics is a whole lot of bull.
> 
> If only it helped the common man around the world.


 
I agree with Neo, ADB is a very respected source and a very fine institution. Seconldy it takes time for wealth to trickle down to the common man and also India is currently facing a massive bulge of young people entering the labour market which is why they economic growth figures are not feeding directly one for one into higher incomes. 

However, you have a strong point as well Salim. A rising tide may be too slow. The BJP govt. being kicked out was because they had forgotten the plight of the poor and were only concentrating on economic growth. However, I am bitterly dissappointed that the Congress Party has not undertaken the massive public works projects I surely thought they would undertake to provide roads, waterworks and electricity to the villages. Mr. Singh is undesicive, he neither willing to smash the unionism of the govt. owned corporations (such as airports and public sector) nor is he moving fast enought to remove restriction on foreign investment and nor is he undertaking public projects to the degree required. 

However Mr Salim, as a believer in democracy, have faith. A government that doesnt perform will be voted out. However, how long will it take, in the long run we are all dead?????


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## sigatoka

MYSTIC said:


> Neo,
> You can expect some mega projects from the center in the next couple of months.


 
A nations progress doesnt occur with only mega projects, it is the small improvements by ordinary people when allowed to operate in markets that lead to prosperity.


----------



## Owais

*'India benefits from fall in China's textile export to US'* 

Beijing: India is one of the major beneficiaries of US restrictions on Chinese textile exports during the first six months of the current year, the Communist giant's top planning body said while cautioning the industry to brace for even less growth in exports in the second half. 

China's textile export to the United States in the first six months amounted to USD 8.23 billion, the report said. 

The growth is 76 per cent lower from the same period of last year. It is the first time for China to see its textile export to the United States drop in recent years, it said. 

Due to import restrictions, growth of China's textile export to the European Union also witnessed a decline as the total amount valued at USD 9.5 billion , up 10.3 per cent from the same period of last year. 

The year-on-year growth is 46.2 per cent down. 

While China's export of textile products declined, China's bordering countries such as Vietnam, Pakistan, Cambodia and India saw a sharp rise of their textile exports to the United States, the report said. 

India's textile exports to the United States rose by over 18 per cent year on year, the NDRC noted. 

Changes in the trade environment have greatly affected China's textile export and such a trend is expanding, the report noted.


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## ab041937

*The Next Industrial Giant Is ... India?*
By KEITH BRADSHER, New York Times
Published: August 31, 2006

PUNE, India Ã¢â¬â India's economic advancement no longer rests on telephone call centers and computer programmers.

Among villages with thatch-roofed huts and dirt roads on the outskirts of this city in central India, John Deere and LG Electronics have recently built modern factories turning out tractors and color television sets for sale in India and for export to the United States.

In Hazira, in northwestern India, where some residents still rely on camels to carry traders' goods, the Essar Group is making steel to be used for ventilation shafts in Philadelphia, high-rise structural beams in Chicago and car engine mountings in Detroit.

For decades, India had followed a route to economic development strikingly different from that of countries like Japan, South Korea or China. While its Asian rivals placed their bets on manufacturing and exports, India focused on its domestic economy and grew more slowly with an emphasis on services.

But all that is starting to change.

India's annual growth in manufacturing output, at 9 percent and accelerating, is close to catching growth in services, at 10 percent. Exports of manufactured goods to the United States are now rising faster in percentage terms than China's, although from a much smaller base. More than two-thirds of foreign investment in the last year has gone into manufacturing in India, not services.

"Saying we are a back office and China is a factory is a backhanded compliment," said Kamal Nath, India's minister of commerce and industry. "It's not really correct."

Indeed, in interviews at 18 Indian factories and other businesses in 10 cities and villages scattered across the length and breadth of the nation, the picture that emerges is of a country that is being driven by advances in manufacturing to a much brisker pace of economic growth.

A prime reason India is now developing into the world's next big industrial power is that a number of global manufacturers are already looking ahead to a serious demographic squeeze facing China. Because of China's "one child" policy, family sizes have been shrinking there since the 1980's, so fewer young people will be available soon for factory labor.

India is not expected to pass China in total population until 2030. But India will have more young workers aged 20 to 24 by 2013; the International Labor Organization predicts that by 2020, India will have 116 million workers in this age bracket to China's 94 million.

India's young population will also make it a huge and growing market for years to come, while the engineering skills and English skills of its educated elite will make it competitive across a wide range of industries.

So even though India remains a difficult place to do business, several multinationals have been placing big bets on India this year in hopes of taking advantage of this shifting global dynamic.

General Motors and Motorola are preparing to build plants in western and southern India. Posco of South Korea and Mittal Steel of the Netherlands have each announced plans to erect giant steel mills in eastern India, where Reliance of India will soon construct one of the world's largest coal-fired power plants.

They are finding India's labor force well suited to their goals. When LG set out to fill 458 assembly line jobs at its factory here last year at a starting wage of $90 a month, it required that each applicant have at least 15 years of education usually high school plus a technical college.

Seeking a young work force, the company decided that no more than 1 percent of the workers could have had any prior work experience. Despite the limitation, 55,000 young people met its criteria for interviews.

"In the villages there is little income," said Siddu Matheapattu, 24, in between applying sealant to refrigerator frames. "Here I can earn more."

By contrast, cities in export-oriented Guangdong province in southeastern China raised monthly minimum wages this summer by 18 percent, to $70 to $100 a month, after factories reported that they had 1 million more jobs than workers to fill them. Factories elsewhere in China face fewer labor shortages, but they also are being forced to raise wages.

As India has deregulated its economy, output has gradually accelerated to a growth rate of 8 percent a year, feeding a national euphoria and a few hopes of someday even beating China's annual growth of more than 10 percent.

Plenty of obstacles remain, however, notably India's weak infrastructure. China invests $7 on roads, ports, electricity and other backbones of a modern economy for every dollar spent by India and it shows. Ports here are struggling to handle rising exports, blackouts are frequent and dirt roads are common even in Bangalore, the center of the country's sophisticated computer programming industry.

Pervasive corruption has slowed many efforts to fix these problems. India's labor laws, little changed since they were enacted just after independence in 1947, also continue to discourage companies from hiring workers, by making it very difficult to lay off employees even if a company's fortunes sour or the economy slows.

Still, a new optimism prevails in India, bordering at times on euphoria.

"The Chinese are very good at copying things, but Indians believe in quality work, we believe in meeting pollution norms," said S.S. Pathania, the assistant general manager of the Hero Honda motorcycle factory in Gurgaon, 30 miles south of New Delhi. "I think India will pass China very soon."

An Unexpected Boom In Manufacturing

Sprawling across more than a square mile next to a gray tidal estuary, the scale of Essar Group's complex in Hazira is already impressive. Essar has its own port to bring in iron ore, its own large, gas-fired power plant for electricity. At the steel mill, giant buckets pour 150 tons of molten metal at a time to form slabs two yards wide and up to 10 yards long.

But the complex is just starting to grow. Essar is quintupling steel production and pushing forward a sevenfold increase in power generation, most of it for sale to a national grid desperately short of electricity.

Growth on that scale, especially in industries like steel and power but also in areas like car parts and household appliances, is what India has long lacked. Industrial production accounts for only a fifth of India's economic output, compared to two-fifths of China's. But this ratio is starting to rise in India as manufacturing, led by exports, grows faster than agriculture and even some service industries.

Until recently, legislation effectively barred companies with more than 100 people from competing in many industries. The laws were intended to protect tiny businesses in villages, often employing women and minorities; high tariffs were placed on imports as well.

But the result was hundreds of thousands of businesses too small to be competitive; India lags behind even impoverished Bangladesh next door in exports of garments, a big creator of jobs for China. The Indian government has responded by narrowing the list of protected industries to 326 categories of goods from 20,000 and has lowered tariffs.

Comparing factories in India to their competitors in China, many of the Indian factories are smaller but some appear more efficient.

India's stronger financial system demands higher interest rates than China's state-owned banks, making it costlier to hold the small mountains of components awaiting assembly that are often seen in Chinese factories. The Confederation of Indian Industry, a national trade group, has also been very successful in pushing companies to adopt the latest Japanese lean manufacturing techniques.

The drawback is that the nation's manufacturing boom, built on higher-quality goods made under more modern conditions than in China, is not likely to create as many factory jobs as India needs.

The Essar steel mill, for example, has been replacing old, labor-intensive equipment with more modern gear. "We were having it all done manually, but because the customers demand very high quality, we have to do it automatically," yelled Rajesh Pandita, an Essar manager, over the roar of a house-sized machine that was stretching a minivan-sized coil of steel back and forth through large rollers until it was little thicker than plastic kitchen wrap.

The Whirlpool factory in Pune uses machines, not people, to fold the steel exteriors of refrigerators. It has some of the highest productivity per worker of any Whirlpool factory in the world, with just 208 line workers producing up to 33,000 refrigerators a month.

Meanwhile, labor laws discourage flexibility. They still ban companies from allowing manufacturing workers to put in more than 54 hours of overtime in a three-month period even if the workers want to earn extra money. Firing workers is very difficult.

"Companies think twice, 10 times before they hire new people," said Sunil Kant Munjal, the chairman of the Hero Group, one of the world's largest manufacturers of inexpensive motorcycles.

Hero in Gurgaon, on the southern outskirts of New Delhi, and its archrival, Lifan Group in Chongqing, a city in western China, produce comparable motorcycles but the similarity ends there. Hero markets heavily to its domestic market, protected from foreign competition by high import tariffs, while Lifan emphasizes exports.

With scant ventilation, Lifan's factories are filled with diesel exhaust as workers test engines and ride finished bikes at breakneck speed out the doors, zigzagging past co-workers. Hero's factory in Gurgaon, where Honda holds a minority stake, has far better safety standards and excellent ventilation.

The Lifan factory pays less than $100 a month. The heavily unionized Hero factory pays $150 a month plus bonuses of up to $370 a month; nearly half the workers earn the top bonus, Mr. Pathania said.

Lifan's labor force is quiescent would-be organizers of independent labor unions face long jail terms or worse in China. Hero's workers staged a successful nonviolent protest last year to call for more contract workers to be eligible for the bonuses as well.

Overcoming Many Obstacles To Infrastructure Growth

But the biggest question mark hanging over the rise of manufacturing in India lies in whether the country has enough roads, ports and electricity generating plants to move huge quantities of goods and power the factories that make them.

Captain Abhay Srivastava, an operations manager at India's busiest port, was on duty on a recent afternoon when a phone call suddenly came in from the docks below. An enormous container ship from Qatar needed to slide 35 feet backward along the privately managed dock at the Nhava Sheva port near Mumbai to allow another large vessel to squeeze into the dock in front of it.

Captain Srivastava grabbed his white hard hat and dashed for the elevator. As soon as he reached the water's edge, a dozen laborers in orange jumpsuits began straining to arrange a cat's cradle of heavy, five-inch-thick ropes that would allow the ship to use its powerful winches to pull itself out of the way.

"They are efficient people; they don't speak a lot," said Captain Srivastava, who has visited most of the world's major ports either as a ship captain or for port training exercises. "You go to some places and they just stand around."

The efficiency of the Nhava Sheva port it approaches West Coast ports in the United States in the number of containers moved per hour shows that India is capable of producing world-class facilities.

But big as it is, Nhava Sheva is too small to handle the crush of traffic. John Deere tractors already wait in a container at the dock for one to four days before being loaded on a ship.

"If this pace of growth continues, we will see more congestion at the port," said Raj Kalathur, the managing director and chief executive of Deere's operations in India.

Similar worries prevail in Chennai, formerly Madras. "Another four or five years, we'll be choked," said M. Rafeeque Ahmed, the chairman of the Farida Group, a 9,000-employee shoe manufacturer in Chennai that needs the port for exports.

Infrastructure improvements are particularly important because manufacturing companies are buying more and more components from far-flung suppliers. Making sure all those parts arrive on time requires a reliable transportation system.

"Manufacturing is no longer done all under one roof," said Victor Fung, the chairman of Li & Fung Group, a large Hong Kong-based company that buys goods from factories across Asia for sale to retailers and wholesalers in the United States and Europe.

Indian officials are talking about expansion. Planning is under way for new wharves at Nhava Sheva, but the years-long task of construction has not yet started.

China has faced capacity problems, too. A surge in steel production in early 2004 overwhelmed Chinese bulk cargo ports. Inflation quintupled in a year, to 5.3 percent, as bottlenecks at ports, highways, railroads and elsewhere in the economy drove up companies' costs.

The Chinese response was swift and decisive. The pace of port investment nearly tripled in six months. Work crews labored around the clock to erect more cranes and expand wharves.

The Chinese economy grew at a breathtaking pace of 11.3 percent in the second quarter of this year, but consumer prices were just 1 percent higher in July than a year earlier.

By contrast, India is struggling with 8 percent inflation this summer as bottlenecks have appeared after three years of 8 percent growth.

Belatedly, India's roads and ports are improving. Just four years ago, Sona Koyo Steering Systems, an auto parts manufacturer, incurred hefty financing costs to keep a month's inventory on hand in case deliveries were delayed. Now the company's factory in Gurgaon makes six deliveries a day to a nearby Maruti car assembly plant; the eight-mile drive takes an hour or more because of constant traffic jams, but the deliveries get through.

"I'm not going to deny infrastructure is bad," said Surinder Kapur, Sona's chairman and managing director. "But a lot of our vendors are around us, a lot of our customers are close to us."

India is also starting to address chronic power shortages. But it is still a serious problem in northern India, where Mr. Kapur's steering systems factory is located. He receives electricity from the national grid just seven or eight hours a day. So the factory has three enormous diesel generators, one bigger than a typical Manhattan living room, operating at four times what an industrial user in the United States usually pays.

Despite such obstacles, India's manufacturing sector appears poised for further growth. In a country where the national symbol has shifted from government bureaucrats at aging desks to call center operators in cubicles, the next icon looks like it will be the laptop-toting engineer on a factory floor.

"The old philosophy was, 'I should work in an office, come in at 10 and leave at 4,'" said Nitin Kulkarni, 35, an engineer at the Hazira steel mill. But in recent years, he added, "there has been a revolution."


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## ab041937

*India: Asia's emerging economic superpower--Part 1*
By Tatsuo Ikenaga
The Sekai Nippo


*15 years of economic liberalization*

CHENNAI, India -- 1991 marked a historic turning point for India. In January that year, the Gulf War broke out, and in December the Soviet Union collapsed. The Gulf War triggered sharp hikes in the price of crude oil, depleting IndiaÃ¢â¬â¢s foreign currency reserves. The demise of the Soviet Union, one of IndiaÃ¢â¬â¢s largest trade partners, left the country on the verge of economic collapse.

India launched an economic liberalization program with the twin pillars of market liberalization and deregulation, separating itself from the socialist policies that had troubled its economy. China was already well into an effort to put aside Communist-style economic management in favor or reform and openness. Since then, India has achieved steady economic growth, and the rate of growth is rising.

Today, 15 years since that turning point, dramatic changes can be seen in the capital New Delhi and in India's commercial center Mumbai (previously known as Bombay), its IT hub Hyderabad, and Chennai (previously known as Madras), the industrial center of southern India. This article is the first of a 12-part series reporting from each of these cities.

[This series was originally published in the Japanese newspaper Sekai Nippo, and was translated into English by World Peace Herald.]

I visited the Apollo Hospital in Chennai, the largest private hospital in India that boasts state-of-the-art facilities. Vice chief director Uma welcomed me into her office equipped with a diagnosis bed. She joined Apollo Hospital as a doctor and was subsequently asked to join the administrative team. Ã¢â¬ÅEven now, when I am asked to diagnose a patient, I see the patient here and refer them to a specialist,Ã¢â¬Â she says. This practice of an administrator working in the front line is rather unusual in IndiaÃ¢â¬â¢s class-conscious society.

Ã¢â¬ÅAcademically excellent Indians aim at becoming a medical doctor or a lawyer as the first choice," Dr. Rohit Barman of MumbaiÃ¢â¬â¢s Breach Candy Hospital explained.

"Indian students studying overseas tend to be concentrated in medical schools and law schools," Dr. Barman said.

"There are many Indian students in the United States who remain there and work as a medical doctor or a lawyer. In fact, about 20 percent of medical doctors who work at hospitals in the United States are Indians. The percentage reaches 40 percent in Great Britain.Ã¢â¬Â

Indian doctors are successful in highly competitive markets and master rigid academic courses. They naturally excel in the international arena. Many study and obtain their medical licenses in other countries before returning to practice in India.

The quality of medical care in India is high. Hospitals in rural areas have many problems, but urban hospitals are equipped with high-quality medical equipment and devices, and many doctors possess a high degree of professional qualification. Patients come to these hospitals not only from throughout India but also from around the world.
*
Passage to the central medical hub of the world*


Ã¢â¬ÅSome 1,400 international patients undergo medical treatments here every month,Ã¢â¬Â says vice chief director Uma of Apollo.

I met Rameshni Wadhwa, a 49-year old patient from Hungary, at Apollo Hospital. In Hungary, he runs a company specializing in exterior building decoration. His hospital room is equipped with a computer connected at all times to the Internet. There is a kitchen where he can prepare simple meals and tea for himself. There is a shower and a fully furnished living room as well. Absent is the smell of disinfectant that is typical of many hospitals.

His room is almost equivalent to a 5-star hotel. Meals include vegetarian and non-vegetarian menus for Indians, as well as for Americans and Europeans.

Ã¢â¬ÅYou can see refined care in services such as bed-making,Ã¢â¬Â says Wadhwa.

He credits Ã¢â¬Åthe high level of medical care and affordable price of Apollo HospitalÃ¢â¬Â as reasons for his decision to travel all the way from Hungary to India for his liver surgery. The cost of surgical operations is about one tenth of that in Europe and the United States.

Two years ago, a Japanese citizen underwent a successful operation in Chennai to cure near-sightedness. In Japan, the hospital has come to be known as Ã¢â¬Åeconomical and safe.Ã¢â¬Â That has created a tour boom in Japan to visit Chennai for medical care and sightseeing. Yoshimi Ishikawa, a prominent Japanese non-fiction writer published a magazine article about his experiences being treated in India to successfully cure a blood circulation disorder and rheumatism.

In Southeast Asia, competition in medical tourism has just started to attract foreign tourists. Singapore is the current front-runner, followed by Thailand and Malaysia. In South Asia, India is dominant in this field.

The promotion of medical tourism cannot be done by hospitals alone. The governmentÃ¢â¬â¢s support is indispensable.

IndiaÃ¢â¬â¢s public health ministry grades the quality of service in medical facilities throughout India and assigns scores. Through the Internet and other public relations efforts, the government is promoting hospitals capable of providing high-quality care to the overseas market.

The government offers a one-year medical service visa as an incentive to international patients who come to India for medical care. The Indian government and private sector are collaborating to promote Ã¢â¬Åinternationally competitiveÃ¢â¬Â doctors and make India the medical service center for the world.


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## ab041937

*India: Asia's emerging economic superpower--Part 2*
By Tatsuo Ikenaga

*India's expanding skyway*


I flew to Hyderabad, the IT hub of southern India, by Air Deccan, the pioneer in IndiaÃ¢â¬â¢s discount air-carrier market. Tickets are issued electronically, and Air DeccanÃ¢â¬â¢s bare-bones discount service provides no magazines, newspapers or food onboard -- not even a piece of candy.

Beverages are served in-flight, although for a fee. A can of Coke is 50 Indian rupees (about $1.00). This is about 2.5 times the market price. Some India states still prohibit alcohol, and beer or wine are not served.

With the expansion of a new middle-class, the tourism market is rapidly growing in India. Discount air travel especially, has witnessed a dramatic expansion. Deregulation of the airline industry opened the way for the emergence of many discount air carriers. Discount fares in turn stimulated an increase in the number of air travelers, which is growing by more than 20 percent a year.

The most notable is Jet Airways, IndiaÃ¢â¬â¢s leading airline. The company was founded in 1991 when IndiaÃ¢â¬â¢s economic reforms were initiated. It took off amid the countryÃ¢â¬â¢s drastic shift from a socialist to a free market system, and is the fruit of IndiaÃ¢â¬â¢s economic liberalization. It started operating domestic flights in 1993, and currently operates more than 280 flights on 48 routes. The number of passengers reaches more than 10 million per year. Its domestic share is 44 percent and surpasses Air India, the countryÃ¢â¬â¢s flag carrier.

The company introduced various measures to improve customer service, including the establishment of 24-hour help desks, and succeeded in gaining new customers and expanding its market. Jet AirwaysÃ¢â¬â¢ success stimulated the improvement and streamlining of national carriers such as Air India, which had become complacent within a market monopoly. Its role of contributing to an increase in the international competitiveness of IndiaÃ¢â¬â¢s airline industry as the whole is highly regarded.

*Discount air carriers mushrooming in India*


In the beginning of August, IndiGo Airlines started operation as IndiaÃ¢â¬â¢s eighth private airline. The airline connects New Delhi with Bangalore and Karnataka state, among others. The think tank, Center for Asia Pacific Aviation, forecasts an increase in IndiaÃ¢â¬â¢s air travelers from 23 million last year to more than 50 million a year by 2010.

There are challenges. One is that the airports in large metropolitan areas serving international traffic are already at full capacity. For these airports to increase slots, airport infrastructure renovation is necessary.

Discount air carriers are turning their attention to international routes as well. Jet Airways launched its Southeast Asia service last year, establishing Mumbai-Singapore and Chennai-Kuala Lumpur routes. The company wants to further expand its operations into Thailand and Japan. Air Sahara, the second-largest private carrier in India, is planning to launch Singapore and Malaysia routes.

South East Asia airlines has expanded its operations into China and is growing dramatically. It is now eager to expand its air routes to India, which are maintaining steady economic growth and experiencing increased air traffic demand.

In the forefront of the group looking at flights to India is Singapore. It is followed by Thailand and Malaysia, a pattern similar to the one in the medical service tourism boom.

Neighboring Sri Lanka is experiencing a rapidly growing air carrier market of its own, and is also putting efforts into India routes. Sri Lanka AirlinesÃ¢â¬â¢ route connecting Colombo with Goa is the tenth Indian city in its route map.

Ã¢â¬ÅThe Colombo-Chennai route is bringing in a lot of money, but passengers flying from Colombo to other Indian cities are also rapidly increasing.Ã¢â¬Â Kimio Kanasugi, deputy director of Sri Lanka Airlines Tokyo office, said.

"The volume is expected to increase by 50 percent this year compared to last year,Ã¢â¬Â he said.


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## Neo

Thursday, September 14, 2006javascript:; http://www.dailytimes.com.pk/print.asp?page=2006\09\14\story_14-9-2006_pg5_12
*IndiaÃ¢â¬â¢s slow pace of economic reforms worries US investors*

_By Iftikhar Gilani_

NEW DELHI: The United States on Wednesday said the slow pace of IndiaÃ¢â¬â¢s economic reforms was worrying investors. 

US Ambassador David C. Mulford told the third Indo-US Economic Summit here that there was a Ã¢â¬ÅpauseÃ¢â¬Â in IndiaÃ¢â¬â¢s economic reform process and cautioned there could be Ã¢â¬Åserious economic costs to any loss of momentum on the reform front.Ã¢â¬Â

He further said Prime Minister Dr Manmohan Singh had expressed the hope for even higher than eight per cent growth per annum, but he has also indicated that higher growth requires continued reforms. Ã¢â¬ÅUS firms have many unresolved legacy issues involving prior investments in India,Ã¢â¬Â the US ambassador said, pointing out that the World Bank still ranked India 134 out of 175 countries for the difficulties of establishing or operating a business.

Ã¢â¬ÅSlow growth of FDI, on the other hand, bricks and mortar investments, reflected the continued investor concerns about governance issues and IndiaÃ¢â¬â¢s reform process,Ã¢â¬Â said Mr Mulford. He told an audience, which included captains of the Indian industry and commerce, that there is still a substantial body of capital waiting to be invested in India, Ã¢â¬Åif the right conditions materialize.Ã¢â¬Â 

He said privatizations have stopped and political reality suggests that reforms of other key sectors and policies of central interest to investors will take longer than envisioned. However, Defence Minister Pranab Mukherjee, who was the chief guest, contested Mr MulfordÃ¢â¬â¢s view, saying: Ã¢â¬ÅThe reforms were no stop-and-go, but a continuous process.Ã¢â¬Â

Apparently referring to the difference of opinion between the ruling UPA and the Left Front, which is supporting the government from outside, he said: Ã¢â¬ÅThere could be minor hitches in the process of reforms, but as you know only too well, democracy is about checks and balances.Ã¢â¬Â

Elaborating, the minister said: Ã¢â¬ÅDecisions can be taken only after debate and due consideration. Hasty decision-making can have its own negative repercussions.Ã¢â¬Â 

Mr Mukherjee said the government is working to address issues relating to the economic reforms process.


http://www.dailytimes.com.pk/default.asp?page=2006\09\14\story_14-9-2006_pg5_12


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## Neo

*Moving into 3rd generation mobile technology*



*By Anand Kumar*
INDIA will finally, by next year, be moving into the 3G (third generation mobile technology) era, with the Telecommunications Regulatory Authority of India (TRAI), last week giving its recommendations to the government.

The TRAI, in its controversial recommendations, has suggested the auctioning of 3G spectrum to telecommunications companies, saying that the government could easily pick up a cool Rs14 billion as base price. The telecommunications industry regulator recommended a maximum base price of Rs800 million for allocation of 3G spectrum in the two profitable Ã¢â¬ËAÃ¢â¬â¢ circles, of Mumbai and Delhi.

The suggested base price for circle Ã¢â¬ËBÃ¢â¬â¢ Ã¢â¬â cities like Chennai and Kolkata Ã¢â¬â is Rs400 million, and for category Ã¢â¬ËCÃ¢â¬â¢ circle, it is Rs150 million. Telecommunications operators will have to bid for additional spectrum that will be auctioned by the government. The base price alone will fetch the government about Rs14 billion.

There is an acute shortage of operating frequencies, as the defence services account for a significant chunk of the space. The government is thus in a position to auction off this scarce commodity to the highest bidders, as has happened in many countries, including in the US and Europe.

But India has had a bad experience with Ã¢â¬Ëauctioning,Ã¢â¬â¢ both of telecommunications and FM radio licences. When the telecommunications sector was opened up, private companies bid fancy prices, hoping to capture a major part of the market. But in the process consumers suffered, as talk time charges remained high Ã¢â¬â in the beginning it cost almost Rs20 for a minuteÃ¢â¬â¢s conversation. Today, the average price is down to around Rs1 a minute, and mobile phone usage has flared.

Similarly, many players rushed in when FM radio licences were auctioned; later the industry negotiated a way out of a looming crisis, successfully pleading with the government for a revenue-share scheme. Likewise, in telecommunications, auctions have assumed a negative connotation.

One section of the telecommunications industry Ã¢â¬â the Cellular Operators Association of India (COAI), which represents the interests of GSM operators Ã¢â¬â has criticised the TRAI for once again reverting to the auction route.

According to T.V. Ramchandran, director-general, COAI, the high reserve price and the auction route would be harmful to the industry, and the average citizen would be deprived of access to 3G technology.

By imposing a high fee initially, the government would discourage 3G usage; instead, it should ensure that the technology becomes cheap and popular, which would result in higher revenue, both for operators and the government. The COAI also feels that the TRAI recommendations favour the CDMA mobile operators.

The association is also worried that the TRAI would ultimately promote 3G as a standalone service, requiring operators to go in for a separate service licence. It feels that the entire question had been resolved earlier, when it was agreed that 3G would be viewed as an extension of existing 2G services. The Unified Access Services Licence also allows them to offer 3G services, the telecom operators argue.

The Department of Telecommunications (DoT) has to now take a call on the TRAI recommendations. According to government sources, operators may have to pay a separate spectrum charge for operating 3G services, unlike in the past (for 2G and 2.5G services). This is because for 3G services, they will need a completely different band of spectrum

According to the TRAI, the government would have to allocate spectrum in the 450 MHz, 800 MHz and 2.1 GHz for 3G services. In each circle, operators will bid for blocks, and the highest bidder gets the frequency with the widest reach.

The present availability would ensure nearly half a dozen service providers in each circle, even after the auctioning of the spectrum. The TRAI has also recommended the setting up of a national frequency management board to handle the contentious aspect of allocating spectrum.

THE government expects 3G services to roll out by the second half of 2007. According to Dayanidhi Maran, the federal communications and information technology minister, 3G services would provide users access to broadband connectivity on their mobile phones, besides a wide range of other services, including tele-medicine and e-education.

3G services would also ensure wider coverage in rural areas, the minister feels. India has lagged behind other Asian countries, notably Japan and South Korea, in the roll-out of 3G services. Any further delay in the allocation of spectrum for 3G services would have hurt the countryÃ¢â¬â¢s competitiveness.

India has emerged as the fastest growing cellular market in the world; in August, nearly six million new mobile phone subscribers were signed in, and for the first time new users in India exceeded those of China.

India currently has 165 million telephone subscribers (including over a 100 million cell phone users). According to Maran, there will be 250 million phone users in India by 2007, and 500 million by 2010. India has a tele-density of just 14.8; this is expected to go to 22 by next year, and 30 by 2010.

Though mobile phones are hugely popular in the cities, there is poor coverage in the rural areas. The government plans to rollout 2G services to cover all villages with a population of over 5,000, and by next year, it would cover all villages with a population of over 1,000.

The dramatic changes in the telecommunications sector have forced the government to dump its plans for a comprehensive telecom policy. The DoT has decided to tackle issues as they come up, by initiating policies. Thus, there is a policy on spectrum allocation, and there could be others on internet protocol television, etc.

WHILE the mobile phone industry has zoomed ahead in India, the country has a dismal track record in broadband connectivity. The government had set a target of nine million broadband subscribers by the end of 2007, but the figure is languishing at around 1.7 million.

Even though India features among the worldÃ¢â¬â¢s top-five mobile telephony market, it is insignificant in the broadband area, where other Asian countries, including South Korea, Hong Kong, Singapore and Japan have overtaken it.

The government has been pushing state-owned Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) to roll-out their broadband connections. However, both the companies have failed to meet targets, though they have succeeded in hammering down the prices.

Determined not to be left behind in the broadband race, the federal government last fortnight decided to establish 100,000 common services centres (CSCs) covering 600,000 villages in the country. The objective is to bridge Ã¢â¬Ëthe digital divideÃ¢â¬â¢ and provide a wide range of government services on an Ã¢â¬Ëanytime, anywhereÃ¢â¬â¢ basis.

The CSCs will be broadband-enabled (256 kbps connectivity) and offer government-to-citizen and business-to-customer services to the vast rural markets. They will offer high-quality and cost-effective video, voice and data content and services to consumers.

The project is expected to cost about Rs60 billion, and the federal and state governments will contribute about a fourth of it. The rest is to come from the private sector. The centres are also likely to generate about 100,000 direct jobs, and about a quarter million indirect ones.

Private sector companies, including international ones, are also planning to set up similar centres. Microsoft Corporation and Hughes Corporation, for instance, announced last week that they would set up 5,000, broadband-enabled kiosks in 200 small towns and rural areas across the country.

The kiosks would be run by franchisees, who would be provided adequate training by the software giant. It would enable people in rural areas to use technology for e-commerce, education and even for e-governance. The project is part of MicrosoftÃ¢â¬â¢s Ã¢â¬ËProject Saksham.Ã¢â¬â¢


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## Neo

*India needs $320bn to boost creaking infrastructure*

NEW DELHI, Oct 7: IndiaÃ¢â¬â¢s Prime Minister Manmohan Singh said the country needs to spend $320 billion by 2012 to improve its creaking infrastructure, accelerate economic growth and tackle poverty.

Ã¢â¬ÅOur growth potential will be realised only if we can ensure that our infrastructure does not become a severe handicap,Ã¢â¬Â Singh told a conference on infrastructure in New Delhi.

Ã¢â¬ÅThe quality and capacity of our infrastructure is certainly a matter of concern to one and all,Ã¢â¬Â the prime minister said.

Singh added substantial private sector investment would be needed to deal with IndiaÃ¢â¬â¢s infrastructure Ã¢â¬ÅdeficitÃ¢â¬Â.

He said road, rail, air and water transport, electric power, telecommunications, water supply and irrigation needed investment of about $320 billion between 2007-12.

Singh singled out the country's power sector as one of the biggest economic trouble spots and asked IndiaÃ¢â¬â¢s states to take immediate steps to make the sector financially viable.

He said high transmission and distribution losses accounted for almost 40 per cent of the electricity produced.

Ã¢â¬ÅNo civilised society, nor a functional commercial entity, can sustain losses on such a scale,Ã¢â¬Â he said.

He said a growth rate of 10 per cent could be achieved with sustained efforts to improve the reliability of power supplies, boost agriculture and manufacturing growth.

IndiaÃ¢â¬â¢s economy grew by 8.4 per cent in the financial year to March 2006 and expanded by a better-than-expected 8.9 per cent in the first quarter of the current year.

Singh stressed the need for a faster and more inclusive growth process.

Ã¢â¬ÅIf we have to make a decisive impact on poverty and provide productive employment for our young population, we must further accelerate the pace of growth to nine to 10 per cent.Ã¢â¬Â

Economists say that country needs faster growth to significantly improve living standards in India where some 290 million out of the population of 1.1 billion live in poverty, according to the World Bank

http://www.dawn.com/2006/10/08/ebr7.htm


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## Neo

*India's mystifying rise *

There were many smiling Indian faces last week. Our economy again beat forecasts and grew 8.9% in the April-June quarter. India's economic rise bewilders Indians. No one quite understands why this noisy and chaotic democracy of a billion people has become one of the world's fastest growing economies. 

This is the fourth year we are looking at around 8% growth, and this follows 22 years of very respectable 6% annual growth. 

With 25 years of high growth per capita income gains have been huge: from $1,178 in 1980 to $3,051 in 2005 (in ppp). What puzzles everyone is that India is not following any of the proven paths to success. 

Compared to the classic Asian strategy exporting labour-intensive, low-priced manufactured goods to the West India's economy is driven more by consumption than investment, domestic markets more than exports, services more than industry, and high-tech more than low-skilled manufacturing. 

With consumption accounting for two thirds of GDP, ours is a people friendly model; hence, inequality has grown much less. Our Gini index is 33, compared to 41 for the United States, 45 for China, and 59 for Brazil. (In a perfectly equal society Gini is zero.) 

Our domestic orientation has meant that our economy is far more insulated from global downturns, and is less volatile. More importantly, 30-40% of our GDP growth is due to rising productivity rather than mere increases in capital and labour. 

Ironically, while high end, capital intensive manufacturing is succeeding, we have failed to create a broad-based industrial revolution based on low end, labour intensive manufacturing. Hence, we are not creating enough jobs. This is a real worry how will we move our vast army of people from the rural to urban areas?


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## Goodperson

Link dude?


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## Goodperson

*Tatas are out to conquer the world*
http://ia.rediff.com/money/2006/oct/06forbes.htm?q=bp&file=.htm

Chris Noon, Forbes | October 06, 2006

Think of India, steel and consolidation and only one name springs to mind--that of metal maharajah Lakshmi Mittal.

Yet the Rajasthan-born, Kolkata-educated industrialist is missing from this plot. Tata Steel, part of the sprawling Tata conglomerate whose interests include cars, telecommunications, software consulting, hotels and consumer goods, said Thursday it was considering a bid for Anglo-Dutch rival Corus, illustrating the pressure the steel industry feels to consolidate. 

Tata stressed that a bid for Corus, which was formed in 1999 through the merger of British Steel and Hoogovens, was only one of the options it was considering and there was no certainty an approach would be forthcoming. Even so, investors loved it. The announcement sent shares at Corus up 12.52 per cent, to 458.5 pence ($8.61), in London.

When Tata's chairman, 68-year-old Ratan Tata, a Cornell-educated architect, succeeded his uncle J.R.D. Tata at the helm of the conglomerate 15 years ago, he set out to unite, refocus and modernise the company's 100 or so largely independent businesses. Aided by cash from its Tata Consultancy Services--the conglomerate's software unit--and the growth of India's economy, he has rebuilt the company's shareholdings in Tata Steel and increased its revenue sixfold.

Tata said a year ago that he was now looking at opportunities to invest in steel companies in developed countries, "but we are making sure that we have secure access to raw materials because I really believe that owners of iron ore are going to rule the industry. They will be the OPEC of the steel industry." 

Back in June this year, it seemed as though Mittal and two billionaire Russians would swallow up the steel industry. One was Kremlin-endorsed Muscovite Alexei Mordashov and the other was his baby-faced compatriot, Roman Abramovich, a London-dwelling soccer fan with a big, byzantine asset portfolio. First Luxembourg-based steelmaker Arcelor announced a deal to buy Mordashov's Severstal as it tried to fend off a hostile takeover bid from rival Mittal Steel. Then Abramovich was said to be in talks to buy Corus.

Neither came to fruition. On June 25, Mittal Steel decided to merge with Arcelor, with the new company to be called Arcelor Mittal. The merger has been successfully approved by shareholders and directors of Arcelor, making the company the largest steelmaker in the world. Abramovich never made a move for Corus.

Corus, which is much larger than its potential suitor and employs more than 40,000 people, declined comment Thursday.


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## Neo

Goodperson said:


> Link dude?



Times of India, yesterday's edition.
I'll try to get the link.


----------



## Neo

*Indian firms facing talent crunch* 

By Karishma Vaswani 
Business correspondent, BBC News, Mumbai 

India's brightest of the bright are in hot demand at global companies 

Friday afternoons at the Indian Institute of Technology (IIT) in Mumbai are a time to relax for Ankit Jain, a final-year engineering student. 

In between his rigorous exam schedule, Ankit takes some time off from competing with his friends in the classroom to compete with them on the basketball courts. 

IIT is one of the hardest schools in India to get into. Every year, 200,000 of India's brightest students try and get into this school. Only 2% of them make it. 

Ankit and his friends at the elite institute are considered some of the brightest brains in India. And they have found that they are in hot demand from Indian and foreign businesses. 

"There are a lot of recruitment fairs on campus. IBM, Accenture, Google, UBS, Infosys, TCS - all the big companies, Indian and Western are here," Ankit said as he took a break from his basketball game. 

"And the salaries they're offering us are amazing. American firms are offering us up to $100,000 (ÃÂ£53,000) a year - and Indian firms are competing to hire us - with higher wages, housing incentives, car loans, the works." 

Rush for talent 

Ankit is one of 3 million university students that graduate from schools in India every year. Gone are the times when the only jobs in store for them were careers in the Indian civil service. 

Prospects for the Indian professionals are on the rise, thanks to the boom in India's economy. The last set of growth figures showed that India's economy grew by almost 8% in the first quarter of this year - beating expectations. 

Thousands of thousands of employees... are being hired in a really short space of time, and there just aren't enough skilled graduates in India to fill these jobs 

R. Sankar,
Mercer Human Resource Consulting 

This has led to a rush for talent. ICICI Bank, one of India's biggest private lenders, is planning to hire 40,000 people over the next few years. 

Reliance, India's biggest conglomerate, has announced its gargantuan retail plans - it will be setting up a chain of supermarkets Wal-Mart-style across India - and is poaching the best and the brightest employees from other firms. 

But the frenetic pace of expansion in Indian businesses is leading to a very real problem: there are not enough bright Indian school-leavers to fill the vacant spots in India's corporate payrolls. 

'Not enough graduates' 

According to Mercer Human Resource Consulting's country head in India, R Sankar, India is facing an imminent talent shortage. 

"Just look at the technology sector," he says. "Look at the numbers they're trying to achieve. Thousands of thousands of employees - Tata Consultancy Services has over 70,000 employees - are being hired in a really short space of time. 

"And there just aren't enough skilled graduates in India to fill these jobs." 


Keeping India's workers interested is key, Mr Deosthalee says. 

India's software trade body, Nasscom, says that there could be a shortfall of half a million professionals in the IT sector by 2010. 

And it is not just the technology sector that is experiencing a talent crunch. Keeping good staff is a challenge for many other Indian companies too. 

The country's top construction and engineering firm, Larsen & Toubro, has seen a 10% drop in employees, losing workers to the fast growing technology and retail sectors. 

Those industries are tempting workers with salaries that are a third higher than they were used to. But L&T's Chief Financial Officer, YM Deosthalee, said his firm had found a solution. 

"We provide our employees with challenging, dynamic work - work that will keep them interested in what they do," he said. 

"It's one of the ways for us to retain competent staff - but it is a challenging environment. Besides the financial ones, 0pportunities to be trained and to travel, though, and work on big projects is what we offer in terms of incentives." 

'Curious' 

And it is these opportunities that are drawing foreign workers to India's shores. They are being recruited to help offset the challenges of India's talent crunch. 



India's booming economy is attracting a lot of foreign interest 


Denis Mercier came to Mumbai a year ago to work for the country's biggest software firm, Tata Consultancy Services. He is one of thousands of TCS's foreign employees, many of whom are from Eastern Europe, Brazil, Germany and the UK. 


"Every day when I would read the front page of my newspaper in France, I would read about the Indian economy," 24-year-old Denis said, as he lunched with a mixed crowd of foreign and Indian TCS workers in their canteen. 

"I was curious - what is happening in this culturally vibrant, fast-growing country? I wanted to find out for myself. And now, to have Indian experience on your resume looks really good too." 

Importing skilled workers may be one way for the Indian economy to solve its talent crunch, but it cannot be the solution for long. 

The irony is that there are millions of Indians who remain unemployed, working in the informal economy, on odd jobs in construction and building. 

The big question is whether India can solve its growing labour crisis by finding a way to get them trained and into the formal labour market, alongside Ankit and his friends. 

http://news.bbc.co.uk/2/hi/business/5409252.stm


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## Neo

*India industrial output slows *

NEW DELHI: IndiaÃ¢â¬â¢s industrial production slowed in August from a breakneck annual rate in the previous month as monsoon flooding hurt output, but analysts said consumer demand was still hot enough to warrant an interest rate rise. 

Industrial production in August rose 9.7 per cent from a year earlier, below expectations for a 9.9 per cent increase and slowing from JulyÃ¢â¬â¢s annual pace of 12.7 per cent, government data showed on Thursday. 

But the slowdown appeared to be a blip and not indicative of a trend, analysts said. Ã¢â¬ÅThe strength in the manufacturing index was the key factor in the robust industrial output readings,Ã¢â¬Â said Indranil Pan, chief economist at Kotak Mahindra Bank. 

Ã¢â¬ÅThe number reinforces the strength of the industrial sector and leaves room for a rate increase, though not necessarily at the October policy review.Ã¢â¬Â

The Indian rupee edged up to 45.5950/6050 per dollar from 45.60/61 before the data and the yield on 10-year federal bonds inched up briefly to 7.64 per cent from 7.63 per cent. 

The Reserve Bank of India, the central bank, will review monetary policy on Oct 31. It has raised the benchmark short-term interest rate three times during 2006, most recently in July when a 25-basis-point rise took the reverse repo rate to 6.0 percent. 

A rise in incomes on the back of strong economic growth ensured people had more money to spend on items like cars and televisions, which boosted August manufacturing output by 11.1 per cent from a year earlier. In July, it rose 13.3 per cent from a year earlier. 

Manufacturing is more than 75 per cent of industrial output. Output of consumer goods, which range from cosmetics to cars, rose in August 14.6 per cent from a year earlier, while production of capital goods, a key barometer of industrial activity, rose 14.7 per cent from a year earlier.

http://www.thenews.com.pk/daily_detail.asp?id=28035


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## Neo

*FDI from China to come under scanner*

MK VENU & G GANAPATHY SUBRAMANIAM

TIMES NEWS NETWORK:FRIDAY, OCTOBER 13, 2006 

NEW DELHI: For the first time, the government is proposing to put China on the list of countries categorised as a security risk from the standpoint of foreign direct investment (FDI). This means FDI from China will not get automatic clearance even if it goes into an innocuous segment like consumer goods (FMCG). Till now, only Pakistan and Bangladesh were not being given the benefit of the policy of automatic approval of foreign investment proposals. 



> All FDI from China, Hong Kong and Macau will be screened thoroughly from the security angle. This means FDI from China will not get automatic clearance
> 
> Investments from North Korea, Taiwan and Afghanistan are also being included in the sensitive list.
> 
> Till now, only Pakistan and Bangladesh were not being given the benefit of the policy of automatic approval of foreign investment proposals.
> 
> The scope of the security filter is being increased to cover FDI in drugs & pharmaceuticals, data processing, metallurgy, IT hardware, data processing, hydrocarbon exploration, pipelines and refineries.



Now a new framework is being put in place to ensure that all FDI from China, Hong Kong and Macau is screened thoroughly from the security angle, according to government sources. Investments from North Korea, Taiwan and Afghanistan are also being included in the sensitive list. The external affairs ministry, however, has said such a move could affect IndiaÃ¢â¬â¢s relations with some of these countries if it is not based on sound principles applied universally. The MEA has argued nations cannot be singled out in this manner. 

Besides expanding the list of nations seen as security-risk, the government is also proposing several sectors as sensitive in the context of inviting FDI. The scope of the security filter is being increased to cover FDI in drugs & pharmaceuticals, data processing, metallurgy, IT hardware, data processing, hydrocarbon exploration, pipelines and refineries. 

Till now scrutiny from the security angle was applied primarily to ports, aviation, telecom and internet services, which are considered to be sensitive areas. Apart from directors, other senior executives of foreign companies working in these sectors are likely to be brought under security screening, as per minuted discussions held by the National Security Council and forwarded by the PMO to the relevant ministries. 

The National Security Council (NSC) has suggested that foreign investment from identified sources should be subjected to special security screening at the time of approval and also during the entire period of operation of the unit. Sectoral regulators should seek the opinion of intelligence and security agencies before deciding on such investments, the NSC secretariat has suggested in the note. This note has been circulated to all economic ministries, apart from the home ministry and the defence ministry. 

The Council has suggested the finance ministry could be the nodal authority for implementing and monitoring the security screening. The Foreign Investment Promotion Board (FIPB) functions under the finance ministry and most of the sensitive clearances go through the Board. The automatic approval applicable to certain sectors are handled by the Reserve Bank which works in co-ordination with the finance ministry on FDI issues. 

The NSC has said that entities seeking approval for FDI should also submit a declaration that they would not indulge in any activity that undermines national security. Following the controversy over the security implications of higher FDI in telecom and ports, the Council is already working on a legal framework to enable formal screening of FDI from the security angle. As of now, there are no uniform norms for FDI in sensitive sectors and most decisions of the government are being taken on a case-to-case basis. The proposed security norms for the telecom sector, following hike in direct FDI limit to 74%, are also pending. 

From the RBIÃ¢â¬â¢s point of view, the Foreign Exchange Management Act (FEMA) prohibits FDI from Pakistan and Bangladesh. If the NSCÃ¢â¬â¢s suggestions are accepted, the list is likely to be enlarged to include China and some other countries like Afghanistan and North Korea if specified parameters are not met. Companies like Hutch, China Harbour Engineering Corporation and Huawei have already faced roadblocks in their investment plans due to the governmentÃ¢â¬â¢s concerns about Chinese companies. Currently even Reliance Industries is seeking government clearance to enable Chinese participation in their pipeline project.


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## Neo

*India is an expensive, but attractive destination*

SANTOSH NAIR

TIMES NEWS NETWORK:MONDAY, OCTOBER 16, 2006 

MUMBAI: Despite expensive valuations, India appears more attractive compared with other emerging markets. This is because India is seen as a defensive market amid global growth downturn, says Brad Durham, managing director, Emerging Portfolio Fund Research. In an interview with The Economic Times, Durham said there are potential new sources of flows to India from non-dedicated funds, which had reduced their exposure to the market in recent years. Excerpts from the interview. 

*Do you expect emerging markets to feel the heat of downturn in the commodities at some stage, especially with many hedge funds having exposure to both commodities and equities? *

I think some markets will feel the heat of declining commodity prices, such as those that are major commodity exporters (Russia and Brazil being the most prominent ones). Other markets , like many Asian markets that are net importers of commodities, are helped by lower commodity prices. The oil price drop is good for India since the country imports about 70% of its oil needs and fiscal deficit has forced the central bank to raise rates to stifle inflation. Lower oil prices may take some pressure off inflation. 

*How do you rate India&#8217;s prospects vis-&#224;vis other emerging markets? *

I think India rates better now against other emerging markets. That&#8217;s because India is seen as a defensive market amid a global growth downturn. Because so much of its growth is internally driven and due to domestic sources of demand, India is less vulnerable to downturn in global growth than other more export-intensive markets like Korea and Taiwan. India has a low correlation with US growth. 

On the downside, I am troubled that economic restructuring appears to have lost momentum , unlike in some other emerging markets . Sell off of state-owned companies could bring much-needed revenue into the government , which could step up infrastructure spending and ensure sustained growth and corporate profits over the longer term. These special economic zones seem as they give incentives to investment that may just shift activity into a taxfree environment and may be hurtful to public finances. Investors would prefer to see broadbased restructuring and incentives to invest throughout the economy rather than in small pockets. And labour reform, allowing for more hiring and firing to meet changing market needs will be needed for sustainable corporate earnings over the longer term. 

*India appears to be expensive compared with other emerging markets, but still foreign investors are ploughing money into Indian equities. How come? *

It still is among the most expensive, but is more attractive after the May-June sell off, which has pushed it back in the vicinity of 16.5x forward P/E. And expectations of earnings growth of 20% going forward should provide some scope for further market gains. While India is among the most expensive emerging markets , along with Chile and Czech Republic, but unlike these two markets, India&#8217;s EPS in &#8217;06 is among the highest (30%) after Turkey and Taiwan . And the earnings are driven by strong domestic factors &#8212; consumption, demographics, infrastructure spending, etc. Hence, the higher valuation is pricing in a secular growth story, with the latest quarterly GDP growth figures confirming the strength. 

I also think that there are potential new sources of flows to India from non-dedicated funds. Global Emerging Market funds, for example , have a 4.9% weighting to India, which is well underweight the MSCI EM index weighting of 6.5%. It is the lowest weighting since May &#8217;02. On cap weighted basis, though, lowest weight since 1998. Some fund firms with low India weighting include Templeton, with 1.9%, Schroders 0.8%, and so if these funds start to view India as more attractive then there could be plenty of new flows find their way into the market. 

*A lot of money has been flowing into the Chinese stock market of late, though most fund managers say that corporate governance has always been a problem area in that market. Your comments.* 

Investors like China because of the current growth and future growth potential. They have to hold their noses at the poor corporate governance and a potential harder than expected landing after so much poor quality growth and over investment. But like in many EMs, such as Russia, as the capital markets developed and when company management discovered that their interests were aligned with those of shareholders , the quality of corporate governance improved dramatically. I suspect the same will happen with China, but it will take time. 

*Which are the emerging markets, other than India, you are bullish on? *

I like China because of its defensive nature, Thailand because of the new-found political certainty and low valuations, Indonesia because of declining inflationary concerns and monetary easing (rate cuts)and Turkey because of year to date underperformance and strong corporate earnings and growth rates. 

http://economictimes.indiatimes.com/articleshow/msid-2172922,curpg-1.cms


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## Neo

*India aims 10pc GDP growth in 2007-2011*

NEW DELHI, Oct 18: India, the worldÃ¢â¬â¢s second-fastest growing major economy after China, set an ambitious target on Wednesday of attaining 10 per cent annual GDP growth within next five years.

The announcement by Prime Minister Manmohan Singh, a former World Bank official, came less than a month after India beat most forecasts reporting 8.9 per cent growth in the first quarter to June (March-April).

Ã¢â¬ÅThe 11th plan (2007-2011) is going to be historic in many ways,Ã¢â¬Â Singh told a meeting of the national policy-making Planning Commission.

Ã¢â¬ÅThis is the first time since the planning process began that we will be aiming for a growth rate of 10 per cent in the final years of the plan,Ã¢â¬Â he said.

IndiaÃ¢â¬â¢s economic plans hark back to the era when the country followed communist-style five-year programmes.

The country registered growth of 8.4 per cent for the financial year to March 2006.

Economists have said that India must achieve double-digit growth to be able to significantly improve living standards in the country of 1.1 billion people where at least a quarter of the population live below the poverty line.

Singh said the ambitious target was achievable on the back of buoyant foreign capital inflow, moderate inflation, brimming foreign exchange reserves and a comfortable current account deficit, pegged at 3.1 per cent of the Gross Domestic Product.


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## Neo

*Indian exports surge 37pc*

NEW DELHI, Oct 24: IndiaÃ¢â¬â¢s exports in the first six months of the current fiscal year rose 37 per cent to $59.32 billion as against $43.22 billion in the corresponding period last year, the government said on Tuesday.

Trade deficit, however, widened 49 per cent to $24.6 billion in April-September mainly due to oil import costs, according to figures released by the government.Exports grew at more than 40 per cent for the second successive month in September to $10.3 billion as compared to $7.29 billion in the corresponding month in 2005, the governmentÃ¢â¬â¢s Central Statistical Institute said in the released data.

Imports in September also increased by 49 per cent to $15.63 billion from $10.48 billion in the same month last year, it said.

The government, however, appeared upbeat over IndiaÃ¢â¬â¢s improved trade performance.

Ã¢â¬ÅThe sustained double-digit growth shows India's exports were on a high growth trajectory and the enhanced export target of $125 billion for 2006-2007 would definitely be met,Ã¢â¬Â Commerce Minister Kamal Nath said in a statement.

Nath's commerce ministry earlier this year had forecast a 20 per cent rise in exports for fiscal year ending March 2007 to $120 billion on the back of higher earnings from services such as outsourcing and manufacturing.

For the year ended March 2006 annual exports jumped 25 per cent to cross the $100 billion mark.

http://www.dawn.com/2006/10/25/ebr7.htm


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## Neo

*India infrastructure may need $80bn *

CHICAGO: India needs to attract as much as $80 billion in private investment in infrastructure projects over the next five years to achieve its spending targets, a senior government official said on Friday. 

Montek Singh Ahluwalia, a key economic adviser to Prime Minister Manmohan Singh, said at a luncheon here that IndiaÃ¢â¬â¢s infrastructure needs the extra foreign investment.

Earlier this month, Indian Finance Minister Palaniappan Chidambaram said the country needs to raise $50 billion annually from domestic markets to improve its rickety infrastructure for such projects as power plants, ports, roads and airports. 

Ahluwalia said India also needs to establish an economy that attracts more foreign investors. Ã¢â¬ÅIt is possible to create a political policy environment which would bring in private investors who see the possibility of a good return with a reasonable regulatory framework,Ã¢â¬Â Ahluwalia, deputy chairman of IndiaÃ¢â¬â¢s Planning Commission, told members of the Chicago Council on Global Affairs. 

Ã¢â¬ÅIf you look at the liquidity sloshing around the world market and you look at India as the next biggest economy after China,Ã¢â¬Â he added, Ã¢â¬Åit should not be difficult to ensure that this much money can flow into India.Ã¢â¬Â

India, seen as one of the hot markets along with China because of growth rates far above those of more mature economies like the United States, wants to raise the ratio of investment in infrastructure as a per cent of its gross domestic product to 8 per cent by 2011 or 2012 from 4.7 per cent now, Ahluwalia said. 

At IndiaÃ¢â¬â¢s current economic growth rate, it would need to invest about $210 billion, but more would be need to reach a target for a higher rate of investment, he said. 

Ã¢â¬ÅTo raise it the way we want to raise it, that would have to go up to about $310 billion,Ã¢â¬Â Ahluwalia said. Ã¢â¬ÅWhile the baseline figure includes dominantly public investment, the extra will have to come dominantly from private investment,Ã¢â¬Â Ahluwalia said. Ã¢â¬ÅWeÃ¢â¬â¢d like to get three-fourths of that from private investment in infrastructure, which is about $75 billion to $80 billion.Ã¢â¬Â

Ahluwalia later told reporters the private sector target would be through a combination of equity and debt. 

If India can attract such private investment levels, it will be easier to achieve its target of average economic growth in the 2007 to 2012 period of 9 per cent, he said. 

Earlier this month, IndiaÃ¢â¬â¢s Planning Commission approved a five-year plan that projects GDP growth to accelerate from around 8 per cent in fiscal 2006-2007 to 10 per cent by 2011-2012. It also set a target for keeping inflation below 4 per cent.

Ahluwalia also said he hopes the next pay commission, scheduled to propose salary increases for hundreds of thousands of IndiaÃ¢â¬â¢s federal employees when it submits its report in less than two years, does not burden the country with too much added debt. 

A similar pay panel in 1997 raised salaries for federal employees by nearly 40 per cent. That sparked demands from states and other state-run company workers for wage increases, and widened the combined state and central deficit to nearly 10 per cent of GDP for several years. 

Ã¢â¬ÅIf the economy is growing at 9 per cent and the pay commission award is reasonable ... I think weÃ¢â¬â¢ll be able to handle it,Ã¢â¬Â Ahluwalia said.

http://www.thenews.com.pk/daily_detail.asp?id=29747


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## Neo

*Surging imports widen trade deficit*

By Anand Kumar

INDIAÃ¢â¬â¢s trade deficit is widening rapidly, as the countryÃ¢â¬â¢s hunger for imported fuel Ã¢â¬â to sustain high economic growth Ã¢â¬â has pushed up its import bill. During the first half of the current fiscal (April-September), the trade deficit ballooned to $24.6 billion, from $20.3 billion in the first-half of 2005-06.

IndiaÃ¢â¬â¢s oil imports zoomed to $28.66 billion, up by a massive 36.8 per cent, during the first half of the fiscal. In September alone, oil imports crossed the $5 billion mark, as against $4 billion in the same month in 2005. Non-oil imports have grown at a more modest 11 per cent.

IndiaÃ¢â¬â¢s imports during the first half of the current financial year amounted to $83.92 billion, up a huge 32 per cent over the corresponding first half of the previous fiscal. In September, imports shot up to $15.63 billion (as against $10.48 billion in September 2005).

But with oil prices tumbling Ã¢â¬â it was down to a little over $57 a barrel last week, before gaining a bit Ã¢â¬â IndiaÃ¢â¬â¢s import of crude is expected to be lower in the second half of the fiscal. But traditionally, the second half of the financial year is the busy season, when demand for oil, electricity, food grains, consumer goods, capital goods and industrial products soar.

Imports have been growing as the economy continues to expand remarkably. Gross domestic product grew by 8.9 per cent in the first quarter of the current fiscal, on the back of a 9.1 per cent increase in the previous quarter.

IndiaÃ¢â¬â¢s current account deficit is also growing. It shot up to $6.09 billion in the first quarter of 2006-07 (April-June), as against a surplus of $1.81 billion in the previous quarter, and a deficit of $3.6 billion in the corresponding quarter of the previous fiscal.

Exports too have been rising, but not as fast as imports. IndiaÃ¢â¬â¢s merchandise exports shot up by 37 per cent in the April-September period, adding up to $59.3 billion. Commerce Minister Kamal Nath is confident that the country would attain the targeted $125 billion in exports by the end of the fiscal.

Last year, exports crossed the $100 billion mark for the first time. Exports are likely to touch $165 billion in 2010, when IndiaÃ¢â¬â¢s share in global merchandise trade is expected to touch the one per cent mark. At present, it is just 0.8 per cent.

Optimistic projections have it that IndiaÃ¢â¬â¢s external merchandise trade (both imports and exports) will add up to $500 billion over the next three years Ã¢â¬â representing $300 billion in exports, and $200 billion in exports. The country expects another $100 billion in service exports (mainly IT and IT enabled services, besides other Ã¢â¬Ëinvisibles,Ã¢â¬â¢ including revenues from foreign tourists).



* * * * * 


FOREIGN funds have also been injecting huge funds into the country; in August and September, they pumped in $3 billion into the markets, boosting the Indian rupee, and also equities.

In fact, IndiaÃ¢â¬â¢s buoyant capital markets continue to attract international players, many of who plan to set up asset management companies over the next few months. The Indian mutual fund industry has done extremely well, with assets under management having shot up to $65 billion at the end of August, a huge 60 per cent annual increase.

There are 30 asset management companies in India at present, both domestic and international ones. But the number is expected to cross 45 over the next few months, as several European and Far East Asian funds plan to start fund houses in the country.

Last month, UK-based Dawnay, Day International (DDI) got an in-principle approval from the countryÃ¢â¬â¢s capital market regulator, the Securities and Exchange Board of India, to float a mutual fund here. DDI plans to launch mutual fund schemes by early 2007, and hopes to raise about a billion dollars by 2010.

Credit Suisse group of Zurich is also setting up a mutual fund in India. Other European financial giants that have been lured by the booming Indian capital markets include Rabobank and Aegon of the Netherlands, and AXA of France. Four Japanese financial majors Ã¢â¬â Sumitomo, Nikko, Shinsei, and Nippon Life Ã¢â¬â have also shown interest in setting up asset management companies.

South Korean firms, which have been active in the stock markets, also plan to set up mutual funds. Mirae, a South Korean finance major Ã¢â¬â which has invested about $800 million in the Indian stock markets, and plans to raise another $200 million from its investors Ã¢â¬â has plans for a mutual fund in India.

Besides setting up asset management companies, international funds are also bullish about the stock markets, and continue to pour money into it. EM Capital Management LLC, a US-based firm, plans to invest about $400 million in Indian equities.

Kuvera Capital, a UK-based hedge fund - which has a presence at the Dubai International Finance Centre - also plans to launch operations in India. Another Gulf-based fund manager, Forsyth Partners (originally from the UK), aims to enhance its exposure to the Indian markets to about $250 million in two years.

The Forsyth India Opportunities Fund is the only fund-of-funds available internationally using domestic Indian funds; it manages $120 million through 16 India equity funds. Forsyth, which offers a range of fund-of-funds investment options and manages over $3.5 billion in assets, recently shifted its global headquarters from London to Dubai.


* * * * *


THE fire at the prestigious Jamnagar refinery of Reliance Industries Ltd (RIL) last week is feared to result in a loss of Rs19 billion in turnover and set back profits by Rs1.25 billion. Of course, the loss could be notional, because Reliance has a comprehensive insurance policy, covering even loss of profit.

The RIL refinery in the state of Gujarat is the third largest oil refinery in the world, processing 660,000 barrels of crude a day. The refinery, operating at 95 per cent capacity, had refined over 15 million tonnes of crude in the first half of the current fiscal (April-September).

The Jamanagar refinery accounts for 25 per cent of the total liquefied petroleum gas (LPG) production in India, and the fire has given rise to fears of a shortage of the commodity. But the Indian government has directed public sector oil marketing companies to begin importing LPG to ensure domestic supplies.

The Reliance group (controlled by the elder Ambani sibling, Mukesh) is investing Rs270 billion in expanding the Jamnagar refinery complex. This would then make it the single largest refinery complex in the world.

IndiaÃ¢â¬â¢s energy requirements are galloping, with the economy growing at over eight per cent annually, and with plans to raise this to 10 per cent over the next few years. India at present imports over 70 per cent of its crude oil and natural gas requirements.

The average price of the Indian basket of international crude peaked at $66.8 per cent barrel in the first quarter of the current fiscal, up from $49.3 in the corresponding quarter of the previous fiscal. But with international oil prices having dipped by about $20 a barrel over the past few weeks, the average price for the remaining quarters is expected to be much less.

Last week, a high-powered advisory panel urged the government to formulate policies to ensure energy security for the nation. India plans to set up a buffer stock of crude to reduce price volatility.

The energy advisory committee has urged government officials to use options contracts and futures market, to reduce risks and volatility, and also to build up sufficient foreign exchange to guard against price spurts.

Indian energy giants like ONGC have been investing in oil and gas blocks abroad Ã¢â¬â especially in Russia, Africa and Latin America Ã¢â¬â to ensure that the country is cushioned from the effects of a sharp increase in oil prices.

http://www.dawn.com/2006/10/30/ebr11.htm


----------



## Neo

*India central bank warns of overheating economy *

MUMBAI: IndiaÃ¢â¬â¢s central bank warned Tuesday of overheating in one of the worldÃ¢â¬â¢s fastest growing economies as it juggled interest rates in a mid-term policy review aimed at keeping prices in check.

The Reserve Bank of India raised the cost for banks to borrow by a quarter percentage point to 7.25 percent and kept its reverse repurchase rate, the rate paid for deposits from commercial banks, at a four-year high of 6.0 percent.

The central bank did refrain from lifting its long-term rate, or bank rate, from 6.0 percent and kept the cash reserve ratio, the percentage of funds banks have to keep as cash, at 5.0 percent.

The central bank said global oil prices, down more than 10 dollars from record levels above 70 dollars earlier this year, and a booming economy posed a threat to price stability.

The economy, which grew 8.4 percent in the fiscal year ended March and 8.9 percent in the quarter ended June, showed Ã¢â¬Åsigns of overheatingÃ¢â¬Â, it said.

Ã¢â¬ÅWhile global inflation conditions have not worsened, concerns relating to price pressures and uncertainties surrounding international crude prices persist,Ã¢â¬Â Reserve Bank Governor Y.V. Reddy said in a statement.

The central bank meanwhile raised its growth forecast to 8.0 percent for the year to March 2007, from an earlier forecast of 7.5-8.0 percent, and said inflation would be contained at 5.0-5.5 percent.

Reddy said industrial output, led by manufacturing, has performed better than expectations.

Inflation, as measured by wholesale prices, rose to a four-month peak of 5.26 percent last week at the same time in a sign of a booming economy, the benchmark Mumbai stock exchange Sensex hit a record high close Monday of 13,024.26.

The Sensex opened firm Tuesday but fell 0.48 percent or 62.36 points in choppy trade to 12,961.90.

The rupee gained against the dollar to 44.98 from 45.00 Monday.

Ã¢â¬ÅThe rupee is likely to strengthen further largely due to strong fund flows into Indian equities,Ã¢â¬Â said Sharad Pawar, an analyst with treasury advisory firm ForexServe.

The Sensex has gained more than 47 percent in the past five months, from a low of 8,799.01 on June 14 as foreign funds pumped in 6.42 billion dollars so far this year.

Industry lobby group, the Federation of Indian Chambers of Commerce and Industry (FICCI), gave a thumbs down to the latest policy statement.

Ã¢â¬ÅThe rate hike will raise the cost of capital for industry. It is bound to pinch small and medium enterprises,Ã¢â¬Â said Saroj Kumar Poddar, president of Federation of Indian Chambers of Commerce and Industry.

Analysts said the Reserve Bank has adopted a Ã¢â¬ÅhawkishÃ¢â¬Â stance towards monetary policy.

Ã¢â¬ÅWe expect a tightening of liquidity and banks to raise rates to rationalise between lending and deposit rates,Ã¢â¬Â said Sanjit Singh, a vice president of research with brokerage ICICI Securities.

Ã¢â¬ÅRates in India are higher than most countries but the inflationary trend is strong and real economic growth high. The policy stand is hawkish,Ã¢â¬Â Singh said.

Bank credit to industry this year has expanded by more than 30 percent and property prices have risen sharply, sparking fears of a bubble.

Though the central bank faces political pressure to keep rates low to dent poverty in the country of 1.1 billion people with almost 300 million earning less than a dollar a day.

Ã¢â¬ÅThere will be an apparent difference between what I think and what the RBI (Reserve Bank of India) thinks,Ã¢â¬Â Finance Minister P. Chidambaram said earlier this month.

http://www.thenews.com.pk/daily_detail.asp?id=30091


----------



## Neo

Thursday, November 09, 2006 

*India sees textile investment at $7.4 billion*

NEW DELHI: India expects investment in its textile sector of 330 billion rupees ($7.4 billion) during the current fiscal year, compared to 219 billion rupees the year before, a textile ministry statement said on Wednesday. 

About 250 billion rupees of that would be channeled through the government-funded textile modernisation fund, Textile Minister Shankersinh Vaghela told reporters. The main feature of the Technology Upgradation Fund Scheme (TUFS) is a 5 percent reimbursement of interest to financial institutions which lend under the scheme. It also offers capital- linked credit subsidies to the textile industry. 

The government had earlier said it expected to double its fund disbursement under TUFS to 300 billion rupees in 2006/07 from 150 billion rupees in 2005/06. 

IndiaÃ¢â¬â¢s textile and clothing industry contributes about 14 percent to industrial production, and about 17 percent to the countryÃ¢â¬â¢s total exports. It directly employs over 35 million people and another 50 million work in allied activities. 

IndiaÃ¢â¬â¢s textile export target for the current fiscal year is $19.7 billion of which $4.6 billion was recorded in the April-June quarter compared to $17 billion last year. The European Union is the largest market accounting for 35 percent of textile exports, followed by the US at 27 percent, the statement said. 

IndiaÃ¢â¬â¢s National Textile Policy 2000 has set a target of $50 billion of annual textile exports by 2010. By when, the statement added, the sector aimed to attract investment totalling 1.4 trillion rupees.

http://www.dailytimes.com.pk/default.asp?page=2006\11\09\story_9-11-2006_pg5_20


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## MIG_ACE

Great work guys! Some really good info on both positive and negative aspects of Indian economy.


----------



## MIG_ACE

*Sensex gains 145 pts as industry zooms ahead*

MUMBAI: Exactly six months after its mid-May high, investor wealth scaled a new peak on Friday. Boosted by robust industrial production numbers for September that beat expectations, and steady infusion of funds by foreign institutional investors, investors' wealth, measured by BSE's market capitalisation, reached Rs 34.5 lakh crore. The previous high, Rs 34.35 lakh crore, was scaled on May 11, just before the market went into a month-long correction.

The BSE sensex also closed at a new peak on Friday. With banking and consumer goods stocks leading the rally, the index touched a new intra-day peak at 13,304 and ended at 13,283, up 145 points, or 1.1%.

After a slow start to the day's trading, buying picked up after the industrial production numbers were released. Index of industrial production for September showed a growth of 11.4% year-on-year, backed by strong manufacturing and electricity output, official data showed.

FII investment data showed a steady inflow with $114 million (about Rs 530 crore) coming in on Thursday and the provisional figure for Friday showed a net inflow of Rs 122 crore. Mutual funds, however, showed a net outflow of Rs 71 crore for Friday.

Among frontline stocks, ICICI Bank ended 4.1% higher at Rs 832 while Bhel ended 3% higher at Rs 2,456 and HDFC Bank ended 2.7% higher at Rs 1,044. Despite this, the number of laggards and winners were nearly equal. Compared to 1,270 stocks that ended with gains, 1,219 ended in the red. Turnover, at Rs 4,568 crore, was higher than month's average of Rs 4,286 crore.


----------



## MIG_ACE

*Industrial output clocks 11% growth in first half*

NEW DELHI: Indian industry is on a roll, growing 10.9% during the first half thanks to manufacturing maintaining its 12% growth tempo. But electricity, a laggard earlier, is trying to catch up fast.

Though the sector grew 11.4% in September 2006, compared with a dip in production last year, growth during the first half was 6.6%. It may still be early to say that it has recovered since economists said that the high growth was also because of the low base last year. Mining, however, continues to lag behind.

The success story in manufacturing is probably the effect of growing demand at home and abroad. Local demand &#8212; with consumers spending heavily on buying cars, phones and TVs &#8212; is pepping up the sector. But the role of capital goods and intermediates, which add to further production, is equally being felt. With little signs of growth tapering off, economists are predicting pressure on interest rates. Higher demand would create more capacity and a rush by companies to borrow loans to finance expansion. But government is unwilling to allow overall rates to climb up just yet.

Banks, which have a tight liquidity position, may find it tough to meet the credit demand and could be forced to raise interest rates, at least on housing and personal loans and handle the other sectors later. "An interest rate hike appears imminent," said a senior executive with a public sector bank. Besides, bankers pointed out, a rate hike was also required to curb inflationa.

But North Block thinks that companies, which are posting healthy profits and accumulating reserves, would prefer to dip into the corpus to finance expansion.


----------



## MIG_ACE

*Samsung plans $100 million facility in Chennai*

CHENNAI: Samsung India Electronics on Friday signed an MoU with the TN government for locating its second Indian plant in Chennai at an investment of $100 million.

Addressing a press conference, R Zutshi, deputy managing director, Samsung India said that the plant will come up in an 80 acre plot in Sriperumbudur, which will make colour monitors, refrigerators, air conditioners, washing machines, printers and other technology products. "Phase I of the project which runs between 2006 and 2009 will suck $70 million and make 1.50 million colour televisions, 1 million computer monitors and other products. Phase II starts from 2010-11, wherein the production capacities would be enhanced," Zutshi added.

The entire park of 80 acres is divided into two parts viz, 50 acres as domestic tariff area (DTA), wherein products made here will be for India, while 30 acres will be an SEZ which will service exports. Besides, 40 acres are being set aside exclusively for Samsung's vendors.

The unit will be a global hub for Samsung wherein products are planned to be shipped to Middle East, Saarc and African markets. Samsung hopes to employ 2,500 people in the production lines at Sriperumbudur.

The construction is slated to begin in January 2007 and commercial production is pegged for August 2007.

Dayanidhi Maran, IT and communications minister said with the entry of Samsung, a new ecosystem is getting created. "Already, with Nokia, Flextronics and Motorola, the telecom eco-system is in place, and with this, Tamil Nadu has a new eco-system, which will be a driver for other investments to come in," he added.

Saktikanta Das, industries secretary, TN government said that it was an important project for the state as this was the first time many new products like monitors and refrigerators would be made in the state. Samsung already has its plant in Noida.


----------



## Neo

MIG_ACE said:


> Great work guys! Some really good info on both positive and negative aspects of Indian economy.



Thank you Mig_Ace!  

The articles posted in this thread are critical rather than negative.
I've tried to srtike a balance here between the positive and negative aspects of the economy to enable the readers to get a balanced picture of what being done in India.

One sided negative posting wouldn't be fare for a model economy liek India and won't help our readers to gain knowledge.

Imho our main rivellary should be on economic grounds instead of military.
Weapons keep the enemy away but economic dominance powers a nation.

To know and beat your arch rival you need its factual knowledge, thats what's we're trying to provide here.


----------



## Goodperson

*India's Mahindra Scorpio SUV launch in US*

*Scorpio set to burn rubber on US highways*

MUMBAI: Utility vehicle major Mahindra & Mahindra (M&M) is driving into the US &#8212; the world's largest market for sports utility vehicles. Scorpio will be the first Indian SUV to ply on American roads. Last week, M&M announced a joint venture with Renault to build a plant in India with a capacity of 500,000 cars a year.

Pawan Goenka, president, automotive sector, M&M, said, "The US market is the largest market for SUVs with almost 50% of sales. With our experience in Europe and South Africa, we now believe we have the confidence to take on global competition in the US." Over 7 million SUVs and pick-ups are sold in the US every year.

"Entering the US market will not only add value to our brand, but it also gives us proximity to high-end technology, " Goenka added. M&M would be exporting its Scorpio SUV and the Scorpio pick-up to the US. While he declined to disclose the specifics of the models for the US market saying details would be announced in April 2007, it is expected that the company would launch its diesel-electric hybrid version of the Scorpio, along with the petrol versions.

M&M has signed an agreement with Global Vehicles USA, based in Alpharetta, Georgia, to sell the Scorpio in the US. "Global Vehicles already has 130 dealers across the US and we expect to have about 200 dealers by the time the vehicle is launched," Goenka said.

An industry expert said, "M&M will be facing its toughest competition for SUVs, since this is the battleground for all automobile makers." However, Goenka says that the company conducted a study for its vehicles in the US. "We have taken the vehicle to US and we saw that there is a market for the product we have to offer, at a certain price point." M&M would be directly competing with Hyundai, some Chinese companies and possibly even Tata Motors.

Goenka said the Scorpio is currently being upgraded to suit the stringent requirements of the US market. 

http://timesofindia.indiatimes.com/..._rubber_on_US_highways/articleshow/498199.cms


----------



## Contrarian

it would take time to find links and post quotes, so i'l just name them...

1.Boeing plans to make India its hub for its overall maintainance and servicing facilities in Asia.

2.Lockheed said the offset of the MRCA should it bag the order would be to create the assembly unit in India to cater all of Asia.

3.Boeing has invested many million dollars in Nagpur for its facilities.


----------



## vnomad

malaymishra123 said:


> 2.Lockheed said the offset of the MRCA should it bag the order would be to create the assembly unit in India to cater all of Asia.


Pakistan is a LM customer. India will be paid to refurbish Pakistani F-16s.


----------



## Contrarian

> *FY'07 to turn out best year of growth: FM
> 
> *NEW DELHI: With economy logging the highest growth of 9.1 per cent during the first half of this fiscal, Finance Minister P Chidambaram on Thursday sounded confident that FY'07 would be one of the best years in terms of growth.
> 
> He, however, tempered the optimism saying supply side-driven inflation was the only worrying factor.
> 
> "We are happy that the economy grew by 9.2 per cent in the second quarter. The fact that economy recorded the highest growth of 9.1 per cent in the first half of any fiscal since economic reforms began in 1991-92 makes us doubly happy.
> 
> "I hope that the current year turns out to be one of the best years of economic growth," Chidambaram told reporters after the release of GDP data on Thursday.
> 
> Calling inflation the only concern, he expressed the hope that it would be brought under control with supply side management.
> 
> On less agricultural growth in the second quarter as against the first quarter, he said agriculture in the second quarter is always a lean period. Farm sector grew by 1.7 per cent in Q2 against 3.4 per cent in Q1.
> 
> When asked whether high growth will put pressure on interest rates, he said liquidity is comfortable in the economy.
> 
> Revealing the latest tax figures, Chidambaram said that the fiscal deficit stood at Rs 87,100 crore during the first seven months of this fiscal as compared to Rs 92,068 crore in the corresponding period last fiscal.
> 
> Revenue deficit was Rs 67,299 crore compared to Rs 70,284 crore during the same period last year. Fiscal deficit during the seven month period constitutes 58.6 per cent of what was estimated in the budget for the entire fiscal.
> 
> Revenue deficit on the other hand was 79.4 per cent of budget estimates.
> 
> Chidambaram said that the Finance Ministry would be allowed space to experiment with tax administration. He said technology-based tax administration is beneficial for both tax payers and tax administration.
> 
> He said that electronic filing of returns by corporates so far this fiscal, have been higher than what they filed in the same period last year.


http://timesofindia.indiatimes.com/...growth_FM/articleshow/msid-652080,curpg-2.cms


----------



## Contrarian

* GDP grows 9.2% in Q2, surpasses forecast*



> NEW DELHI: India's economy grew by 9.2 per cent in the second quarter ended September 2006, beating forecasts as manufacturing and services showed strong growth, official data released on Thursday showed.
> 
> However, growth in the farm sector, which accounts for about a fifth of the economy, declined to 1.7 per cent during
> the second quarter this fiscal compared to 4.0 per cent in the same period of 2005-06.
> 
> Manufacturing, which contributes 17 per cent in the GDP, registered a growth of 11.9 per cent in July-September 2006 as against 8.1 per cent in the corresponding period of 2005-06.
> 
> NEW DELHI: India's economy grew by 9.2 per cent in the second quarter ended September 2006, beating forecasts as manufacturing and services showed strong growth, official data released on Thursday showed.
> 
> However, growth in the farm sector, which accounts for about a fifth of the economy, declined to 1.7 per cent during
> the second quarter this fiscal compared to 4.0 per cent in the same period of 2005-06.
> 
> Manufacturing, which contributes 17 per cent in the GDP, registered a growth of 11.9 per cent in July-September 2006 as against 8.1 per cent in the corresponding period of 2005-06.


http://timesofindia.indiatimes.com/..._Q2_surpasses_forecast/articleshow/651496.cms


----------



## Contrarian

* Outsourced hiring set to be a $1b business*


> BANGALORE: Outsourced hiring, or hiring through third party recruiters, will be an over $1 billion industry this year. And it's growing extremely rapidly.
> 
> Such hiring is only a decade old in India. It grew slowly initially, but in 2005-06, the business saw exponential growth, posting a turnover of Rs 3,922.32 crore, against Rs 630.98 crore in the year before. The industry this year is seen to be growing at about 40%. So by the fiscal-end, it would go well past $1 billion, according to a study by the Executive Recruiters' Association (ERA).
> 
> Although there is no clear break-up of which sector would contribute to what extent, it is estimated that IT will claim the largest chunk at 30%, followed by telecom/infrastructure, retail/realty and manufacturing/utilities spaces each at 15%, ITES at 10% and others at 15%.
> 
> No data is easily available to determine the size of the industry. The ERA has culled out information on manpower recruitment in consultation with 93 different service tax collection points across the country, the major commissionerates being Mumbai, Delhi, Kolkata, Chennai, Ahmedabad, Bangalore, Pune and Hyderabad. Since recruitment firms pay service tax, the annual figures are arrived at on the basis of the tax paid.
> 
> "The service tax commissionerates figure for fiscal 2005-06 was Rs 3,334 crore. For more accuracy we worked out a minimum 15% set off on account of service taxes paid separately for hiring related services like candidate reference checks and market research," said BR Muralidharan, ED, ERA. The study looked at performance of the recruitment industry for last nine years.
> 
> BS Murthy, CEO, Human Capital, said the figures reflect not just the extent of economic growth and the industry's yearly turnover.
> 
> "It's about change in mindsets about outsourcing of hiring, it's about how people moved and improved in careers, it's about how a new market has grown and matured, it's about how the industry perfected the art of maintaining a repository of over 100 different sets of skills against traditional vanilla talent," he said.
> 
> Anjan Dutta, CEO, Careergraph, said entire demography of hiring and talent has changed over the last decade. "The last five years have witnessed a flurry of de-skilling, re-skilling and skill upgradation exercises, large number of high-end, speciality jobs have happened, new industry verticals emerged, hiring numbers have moved from dozens to thousands and more, salaries have multiplied," he said.


http://timesofindia.indiatimes.com/...et_to_be_a_1b_business/articleshow/644264.cms


----------



## Contrarian

* IL&FS plans to mop up $3b for power projects*



> NEW DELHI: Infrastructure development company, IL&FS on Wednesday joined hands with Abu Dhabi National Energy Corp PJSC (TAQA) for developing power projects in India through a special purpose vehicle (SPV), which will raise $3 billion.
> 
> IL&FS chairman Ravi Parthsarthy said the SPV fund would be used to develop power projects that will generate 6,400 MW of electricity. TAQA will initially pump in $1 billion into the SPV, while other equity partners would bring in the remaining amount.
> 
> "IL&FS will identify projects and TAQA will bring in the funds," he said, adding the tie-up is being forged as part of the 12.5% stake of Abu Dhabi Investment Authority in IL&FS. TAQA is a subsidiary of Abu Dhabi Investment Authority with 51% stake.
> 
> IL&FS is involved in developing power generation projects with an aggregate capacity of around 6,400 MW in the country. The first project that has been identified for the investment by newly formed SPV is a 750 MW gas-based power project in Tripura in partnership with ONGC. "While the SPV will pick up 26% stake in the company, ONGC will bring in around 50% equity and rest would soon be arranged from other investors like Life Insurance Corporation," he said. Banks like SBI were ready to chip in with debt, Parthsarthy said.
> 
> IL&FS is also involved in developing a 1,200 MW hydropower project in Sikkim. "After achieving financial closure of the Tripura power project, the company will focus on the 1,200 MW hydropower project that will also be funded by the SPV," he added.


----------



## Contrarian

*Volkswagen drives in with Rs 2400 cr plant*



> NEW DELHI: After over a decade of negotiations with several local partners and three aborted attempts, Germany's Volkswagen AG on Wednesday announced its entry into India with a Rs 2,400 crore project to build cars in Pune. The first car to produced from this new facility will be a derivative of its existing hatchback Polo, which will be positioned in the Rs 4-5 lakh premium hatchback market in India to take on rivals like Suzuki Swift and Hyundai Getz.
> 
> This would be followed by a mid-sized sedan Jetta that will be positioned against Honda City. Sources said the firm is also exploring the feasibility of locally producing its compact SUV Tiguan in India. "The Polo will, however, be the mainstream model targeted at the volume market in India. It will available in both notchback and hatchback version. This is new Polo is still on the design boards and India will be among the first markets to get this vehicle," a source said.
> 
> The new facility will be operational in 2009 and will have the capacity to produce 110,000 units a year. In the interim, VW has decided to hitch a ride with group firm Skoda by assembling its premium segment model Passat at SkodaÃ¢â¬â¢s Aurangabad facility.
> 
> VW's board member Dieter Potsch said the Passat would be assembled from completely knocked down (CKD) kits from mid-2007 and would be Volkswagen's maiden made-in-India car. "We didn't want to lose time. The European markets have already saturated and it's emerging markets like India and Russia that will drive growth in the automobile industry now. So, we have decided to enter India using Skoda's assembly unit and alongside establish our own manufacturing plant," Potsch said.
> 
> The Passat would be priced under Rs 30 lakh in India and compete with the likes of Toyota Camry, said VW's board member and Skoda Auto chairman Detlef Wittig. Besides, VW will also introduce a host of vehicles through the direct import route, which will include the SUV Touareg and Phaeton.
> 
> The company will set up an independent sales company in India in 2007 which will manage the distribution for all Audi and VW brands.
> 
> Volkswagen Group Sales India Pvt Ltd will be registered in Mumbai and will be responsible for sale of locally-produced models and imported vehicles, Wittig said. VW plans to achieve a localisation level of over 50% initially with its cars, which could be scaled up to 70-80% with increased sourcing from local vendors.


----------



## Contrarian

*Unitech arm set to raise $700 million*



> NEW DELHI: Unitech Corporate Park (UCP), an associate company of Unitech Ltd, will raise around $700 million to acquire majority stake in six commercial real estate projects being developed by Unitech Ltd. These projects include Ã¢â¬â four information technology (IT) special economic zone (SEZs), an IT Park in the National Capital Region, and one IT SEZ in Kolkata.
> 
> The newly formed investment company would also seek listing of its shares on Alternate Investment Market (AIM) of the London Stock Exchange (LSE). UCP, an independent company registered in Isle of Mann, will be the first Indian company to raise funds through an AIM listing and placement to institutional investors abroad.
> 
> The company plans to appoint Unitech's subsidiary Nectrus to offer investment advisory services for identification, structuring and execution of potential investment strategy. According to LSE website, Unitech will provide management services for six projects that would seek investment from new firms.
> 
> UCP would also have the right to co-invest with Unitech in future IT SEZ and IT Park development work. Though Unitech's management was unavailable for comment, it is learnt that the new company would also help it acquire fresh land bank in the country.
> 
> UCP's board will comprise five non-executive directors chaired by Atul Kapur, former managing director of Goldman Sachs International's principal strategies group in Europe and will also have Savills group CEO Aubrey Adams.
> 
> "The company will primarily focus on the key growth markets of the IT and ITES industries which offers some of the most attractive real estate prospects in India," Kapur said in a statement. The investment manager would provide access to a range of real estate experience, understanding of tenant requirements and a well established network of contacts, which would benefit in executing its investment strategy.


----------



## Contrarian

*Nissan to launch Teana in March*



> BANGALORE: Japanese automobile major, Nissan, will sink its teeth deeper into the Indian market in 2007. The Carlos Ghosn-led company will launch its first sedan on Indian roads in March. Called the Nissan Teana, the gasoline motor car will be priced at around Rs 21-22 lakh.
> 
> The car will be pitted against Toyota Camry and Honda Accord in the Indian market. Nissan currently sells in India its sports utility vehicle (SUV) X-Trail.
> 
> Automobile market sources told TOI that the car will be billed as the vehicle that could make Nissan a household name in India.
> 
> Nissan was originally scheduled to launch the sedan under the name of Cefiro, as it is known in some of the markets around the world. The launch was slated for January 2007. Later the company felt it was better to roll-out the car under the Teana brandname, the way it is known In Japan.
> 
> Nissan Teana is a mid-sized front wheel drive introduced in 2003. It is exported as Nissan Maxima and Nissan Cefiro to certain markets. It shares the platform with the North American Nissan Maxima and Nissan Altima. The Teana coming to India will be powered by a 2.3-litre engine, market sources said. Nissan set up an office in India last April, and since then it has sold over 200 units of X-Trail, its SUV, and its variant, the Elegance. Then it launched a version of the X-Trail called X-Special.


----------



## Contrarian

*Accenture R&D lab in Bangalore*



> BANGALORE: Nearly 10 years after it opened its last R&D lab, the $15-billion global consulting and technology major Accenture has chosen Bangalore for its fourth such facility. The lab will provide more muscle by innovating on better ways to deliver on projects, both for its Indian and worldwide clients.
> 
> This fourth lab joins sites in the US (Palo Alto, Chicago, Illinois) as well as France (Sophia Antipolis). It will have access to nearly 2,000 of the latest software development projects across Accenture and plans to employ nearly 100 researchers and developers. The lab will undertake R&D in systems integration and software engineering, which will in turn provide quality control and timely delivery of projects.
> 
> "It is very important to have R&D personnel working closely with practising personnel at the field level. Bangalore was the obvious choice as it is already home to one of our largest base of delivery agents," said Donald J Rippert, chief technology officer (CTO) of Accenture.
> 
> The firm has close to 25,000 people at delivery centres across India. Lin Chase, director, Accenture Technology Labs, India, said some of the company's employees in the US are interested in moving to this facility, given that the work done here will be very challenging.
> 
> All innovations at this facility would be piloted with delivery teams located in Bangalore facility. Proven innovations would then be rolled out to Accenture delivery centres.


http://timesofindia.indiatimes.com/...re_RD_lab_in_Bangalore/articleshow/643444.cms


----------



## Contrarian

*Healthcare to be major recruiter*


> MUMBAI: It's a welcome forecast for professionals in the healthcare, tourism, retail and construction industries. Job opportunities in these sectors are expected to see an exponential rise. This is a significant shift in employment patterns. Till now IT was the ticket to success. While IT will continue to grow, it will be these four other sectors which will see a rapid expansion till 2010.
> 
> Interestingly, healthcare jobs are expected to more than double in numbers compared to IT. This growth will be fuelled by an expected rise in government expenditure on healthcare, greater private participation, opportunities like manufacturing outsourcing, clinical trials and drug discovery in the pharma industry.
> 
> Says Rituparna Chakravarty, V-P, Teamlease, a temporary staffing solutions company, "The next decade will belong to healthcare professionals because there is a huge potential in terms of domestic demand and possibilities of supply globally. India has inherent skill sets to grow functions like doctors, nurses and other healthcare professionals."
> 
> A recent CII Study of Employment Potential, undertaken for the planning commission, revealed that the healthcare industry could see an additional 6.1 million jobs created by 2010. Similarly, construction could employ 9.9 million more people, while retail and tourism could employ 9 million and 19.6 million people respectively. In comparison, IT industry is expected to add 2.2 million jobs. Kewal Handa, MD, Pfizer, says, "This is because the growth in IT is more mature."
> 
> Retail is expected to boom given the number of malls being developed and the increased levels disposable income. It is estimated that 85 tier II and tier III cities will see a boom in retail over the next few years. Says Sudhakar Patnaik, president & principal associate, Resources Centre, a Delhi-based HR firm, "The trend of people moving to retail and realty is gaining momentum considering the growth of organised retailing and infrastructure activity in the country." Workers in ITeS industry are beginning to shift to retail.
> 
> Tourism will also be a big opportunity, the number of airline firms being floated and resultant additions in hospitality industry and support functions. Says Urrshila Kerkar, CEO, Cox & Kings India, "The challenge will be related to the shortage of skilled manpower and the need of the hour will be to ensure people are able to multi-task across various functions."


----------



## Contrarian

*Honda picks Rajasthan for setting up second car plant*


> NEW DELHI: Japan's Honda Motor Company seems all set to take on the might of small car giants Suzuki and Hyundai in India. Honda has zeroed down on Rajasthan as the probable site for its second car-making facility that will house the production lines for a range of hatchback models, including the popular Jazz.
> 
> Sources close to the development told ToI that Honda has shortlisted Rajasthan as the site for the new plant and an agreement with the state government is expected to be inked early next fiscal. This will make Honda the first car maker to set up a plant in Rajasthan.
> 
> "The firm had been in discussions with a host of states in India, including Maharashtra, Tamil Nadu, Andhra Pradesh and UP. But Rajasthan has emerged as the winner in this race," a source said.
> 
> Honda Siel Cars India president M Takedagawa, however, refused to comment saying discussions are still underway a final decision will be taken shortly. "The firm is still studying various options," he said.
> 
> However, sources pointed out that Jazz has been shortlisted as a probable candidate for Indian car bazaar. "The Jazz will be positioned as a premium small car in India. In addition, work is underway to develop an all-new compact car that will targeted at the mainstream segment. The new plant will house the production facilities for both the small cars," a source said.
> 
> Honda's existing plant in Uttar Pradesh has the capacity to produce 50,000 units, which will be expanded to 100,000 units by the end of 2007. "The 100,000 unit capacity will be taken up for producing Honda's City, Civic and Accord. For new car introduction, we will have to look at a second plant, and we are studying the options now," Takedagawa said at the sidelines of unveiling its all-new sports utility vehicle CR-V.
> 
> The firm is yet to finalise the investment plans for this new venture, but its global CEO Takeo Fukui had earlier
> this year stated that Honda intends to pump in Rs 3,000 crore in India over the next five years to expand its footprint in the car, two-wheeler and power genset markets. Setting up a new plant alone, industry insiders said, would involve an investment of close to Rs 1,000 crore.
> 
> Takedagawa also unveiled the new CR-V, a premium SUV, which will be costlier by at least Rs 2.5 lakh than the existing CR-V. The vehicle is priced at Rs 17.70 lakh (manual transmission) and Rs 18.40 lakh (automatic transmission).


----------



## Contrarian

*Godrej group charts succession plan*


> MUMBAI: The Godrej family, which is worth over $4 billion, is in the process of kicking off a succession plan for family members who are in supervisory positions in group companies.
> 
> Godrej group chairman Adi Godrej said, "Each business in our group has a non-family professional CEO, COO, covered by the succession planning exercise. The family members in the business are in supervisory positions (chairman). Currently, we do not have a formal succession planning exercise for them, but we expect to introduce such a procedure."
> 
> The Godrej family is one of the oldest business families in Mumbai, running the 109-year old empire which has now extended into the fourth generation. Some of the new generation of Godrejs have etched out their career paths within group firms. Some are still in budding stages of finding their own, while others are aspiring to do the same.
> 
> The Rs 7,500 crore Godrej group is a diversified conglomerate with business interests in consumer products, durables, chemicals, agri products, retailing, real estate, locks, office furniture and foods.
> 
> Of the Godrej empire, the wholly-owned Godrej & Boyce is a holding company, and in the two publicly listed companies Ã¢â¬â Godrej Industries and Godrej Consumer Products Ã¢â¬â promoters hold 88.4% and 68.2%, respectively.
> 
> The non-family members working in the various group firms are governed by an exhaustive succession planning exercise, which has been internally trademarked 'Total Talent Management Process'. Under this process, there is an emergency succession and a planned succession.
> 
> It is early to determine whether the plan for family members would be developed along similar lines. But the thinking seems to be in the direction of bringing about transparency among family members who are in the business and those who aspire to join the group in the future. Considering that the succession planning can at times become a sticky issue in family-run businesses, the move by the Godrej group is aimed at ensuring there is sufficient clarity on this matter.
> 
> Adi Godrej's (64) three children Ã¢â¬â Tanya Dubash (38), Nisa Godrej (28) and Pirojsha (26), have already made a start. The eldest of the next generation of Godrejs, Tanya, is director on the board of Godrej Industries. Nisa is also part of the Godrej group, while Pirojsha has completed his management training with Godrej Properties.
> 
> Nadir Godrej (55), the younger brother of Adi Godrej, who is managing director of Godrej Industries, has three children Ã¢â¬â Burgis (14), Sohrab (12) and Hormusji (10). They are still young to decide on joining the group.
> 
> Cousin Jamshyd Godrej (57), CMD, Godrej & Boyce, has two children Ã¢â¬â Raika (26) and Navroze (24). Navroze was recently ushered into Godrej & Boyce.
> 
> The Godrejs also have a family council which meets periodically to discuss ownership matters to keep members of the family business abreast of the developments. All families in the Godrej clan follow a structure of equal ownership.


----------



## Contrarian

*Heidelberg expands biz in India*



> MUMBAI: German cement major, Heidelberg Cement, is strengthening its position in India. After buying a controlling stake in Mysore Cement in July, it has now acquired two grinding units in Kerala for Rs 40 crore.
> 
> Heidelberg officials in India were not available for comment. An industry analyst said, "Although these grinding units are small in size, it will help Heidelberg consolidate its position in one of the most stable markets in the south. It is more a strategic fit for Heidelberg's plans for India which include both organic as well as inorganic growth." Cement prices in Kerala are usually higher by around Rs 5-7 per bag, compared with prices in other southern states, he added.
> 
> Indian cement industry is in the midst of a consolidation, with construction and infrastructure demand fuelling the demand. "With the region witnessing one of the highest growth rates in the world after China, global majors like Holcim, Heidelberg and Lafarge have set up shop here to tap the potential demand,' an industry expert said. "The domestic cement sector has witnessed an average growth of around 8-10% in the last couple of years and the trend is likely to continue for the next 2-3 years," he added.


----------



## Contrarian

*IT buyouts to grow bigger in size*


> NEW DELHI: As the Indian IT majors grow bigger, their average acquisition size in the international market will become larger. Azim Premji Ã¢â¬â CMD of the India's third largest IT company Wipro Ã¢â¬â said the size of average foreign companies that are being acquired by Indian companies would go up from around $50 million to around $100 million.
> 
> Premji, confident of the bright future prospect of Indian IT companies, said, "Indian companies are growing faster than their counterparts in foreign countries. And because of this faster growth, domestic giants TCS, Infosys and Wipro may soon join the league of the top 10 most valued firms globally in terms of market capitalisation in the next two-three years."
> 
> Speaking at the India Economic Summit organised by CII and World Economic forum, India's third richest person Azim Premji said , "Currently, Infosys, TCS and Wipro come in the top 16-17 companies globally in terms of market capitalisation." At present,Infosys and Wipro have a market cap of $29 billion and $22 billion respectively based on their ADR prices.
> 
> He said the driving force for acquisitions would be to buy new technologies. Though, chairman of NIIT Rajendra Pawar speaking at the seminar said, in learning space the acquisition of brand in foreign firms would also be important.
> 
> Premji said Indian firms are better placed as compared to their foreign counterpart because of availability of man power. He said while the attrition ratio in developed countries is over 17%, in India it is below 15%. He said India produces around four lakh engineers every year. IT companies employs around 30% of that. But this does not fulfill the requirements.
> 
> Premji said Wipro is now hiring non-engineering professionals and give them training to fit in the company's requirements. Premji said, to address the shortages of professionals, IT firms would have to go for hiring non-engineers professionals.


----------



## Neo

Thanks for the update man!
Imho Indian all over growth this year could easily exceed 9%, you've recorded very strong growth in Q1 and Q2.
What do you think?

Neo


----------



## Contrarian

I agree. If the Q3 and Q4 show as good results, our growth would be 9% avg.
This could be because of the govt's effort to pump money and develop the country's infrastructure on a war footing

You really should read up on the airports that are comming up all over India!!, the delhi one is gonan become one of the bets woldwide, all international companies have bid, there have been proper calculations, same for mumbai, channai and kolkota! Not to mention all the tier 2 cities are also getting new airports, completely new!!all at par with the best in the world today, all with capaciy to handle the next 20 years load easily!
refer here: http://www.pakistaniforces.com/forums/showthread.php?t=2783

And also the roads, any1 who has visited Delhi recently should see, more than 50 flyovers were there already 2 years back, as many more planned!, delhi metro and stuff. Its going good!

Though there is one serious dissapointing peice of news, the agricutural growth has slowed down.I am very concerned on this issue. The neglect of the agricultural sector during the NDA govt played no small part in their getting kicked from power last time. 

And when UPA came to power, their motto everyday in the newspapers was that they are gonna transform the agriculture sector, put land reforms in place, etc. I am yet to see that happen satisfactorily. Though it always happens that Q2's agroicultural output is always less. I rather expect that this is the key to unlocking >10% growth of the economy EASILY if this sector performs half as well as the rest.

And unless this sector is tackled effectively, there are going to be serious problems indeed.


----------



## Contrarian

*Indians to get 15% salary hike in 2007*


> NEW DELHI: Despite the shortage of human resources leading to a large attrition rate in India, the salary hikes in the country have stabilised in the range of 11.9% and 15% in 2006.
> 
> Hewitt Associates Ã¢â¬â a global human resources services company Ã¢â¬â in a survey reveals that the salary hikes in 2007 will remain same in Asia including India. Though moderate, salary hikes will be maximum in India among the Asian countries.
> 
> In 2007, according to the 7th annual Asia-Pacific Salary Increase Survey by Hewitt Associate, it would be in the range of 12.3% and 15%. Survey says, "Though the employers are reporting pay hikes, these hikes are modest when compared with the previous years. This trend looks set to continue in 2007."
> 
> China will continue to be at number three position in the average salary hike, ranging between 7.1% and 8.5% in 2007 as against 7.5% and 8.4% in 2006. Other countries in the region have also shown a marginal increase in the salary.
> 
> Head of HewittÃ¢â¬â¢s Talent and Organisation Consulting Analytics practice in Asia, Nischae Suri says, "While organisations are increasing their spendings on compensation to counter retention challenges in Asia, many companies are reassessing HR strategies and business goals."
> 
> The sample size of the survey was 1400 companies. Hewitt study indicated that variable pay continues to be an important mean of attracting and retaining talent, as 78% of the responding organisations used them as a tool to retain talent.
> 
> Individual performance award is the most popular variable pay plan as 56.2% of organisations say they prefer it more.
> 
> The study says individual performance awards have the highest impact on business results, followed by business incentive plans and team awards.
> 
> It adds that companies hiked variable payout in 2006 to 14.9%, up from 14.5% in 2005. Target variable payout was highest for top management at 21.8% and is expected to rise to 22.3% in 2007.
> 
> Study highlights that the prime challenge faced by organisations in implementing variable pay plans is poor communication to employees.


----------



## Contrarian

*Thomas Cook to buy TCI for Rs 175 crore*

MUMBAI: Travel services company Thomas Cook (India) is close to buying the 40-year-old Travel Corporation (India) for about Rs 175 crore. TCI, which has a significant presence abroad, will give Thomas Cook access to business from the increasing number of travellers visiting India for both business and pleasure as the country integrates closer with the world.

Udayan Bose, chairman of Thomas Cook (India) could not be reached for comments as he was travelling. TCI has been on Thomas Cook's radar for quite some time. Ashwini Kumar, who headed the company until recently, had made a pitch for TCI in the nineties. However, the two companies could not agree on a price and one of the three families that own TCI was hesitant to sell its ownership.

TCI is equally owned by the Katgara, Parikh and Kotak families. It is managed by the Katgara family with MD Jehangir Katgara in the saddle. TCI's web site says it has a team of over 1,000 people working in 25 offices in India and 11 offices in US, Canada, the UK, Europe, China, Korea, Japan and Australia catering to 2,000 agents and tour operators.

Thomas Cook (India), which was taken over by Dubai Financial early this year, employs over 1,300 staff in 71 offices. It had a turnover of Rs 142 crore in 2004-05. The company, which is a major forex dealer, has also purchased LKP Forex to consolidate its leadership position in the business.

An analyst with a domestic brokerage firm said,"For Thomas Cook a significant portion of its revenues comes from the forex business. The company has been increasing its thrust on the travel business. The acquisition of TCI is in line with that strategy. TCI is a strong brand name in the inbound travel segment."

Brand building and expanding its network abroad are the current priorities for Thomas Cook (India). While Dubai Financial has taken over Thomas Cook's businesses in Thailand, Egypt, Lebanon and West Asia, besides India, Sri Lanka and Mauritius, it does not have much presence in the regions that TCI has offices in.

The company also needs to build new brands as it can use the Thomas Cook name only for a few more years. It recently launched 100% Holidays, a brand under which it sells packages to travellers from India. Acquiring brands such as TCI and LKP Forex is part of of its preparation to phase out Thomas Cook.


----------



## Contrarian

*Wal-Mart shows way for retail biggies*


> NEW DELHI: The Bharti-Wal-mart agreement is expected to energise other global retail majors to firm up their India plans, with many companies also deciding to advance their entry into the country.
> 
> Retail majors such as French giant Carrefour, Hongkong-based AS Watson and UK-based Tesco have been eyeing the retail opportunity in India for sometime now.
> 
> These companies are expected to spring into action and formulate their strategies now, with the world's biggest retailer Wal-mart finding a way to set shop in the country. Eyeing the $300 billion retail opportunity, domestic majors like Reliance, Tatas and Aditya Birla group have either entered the retail segment or have announced plans to do the same.
> 
> "The Wal-Mart deal is likely to be viewed as a positive move by foreign retailers, which will reinforce their interest in India. Certain large European retailers have been evaluating the Indian market for the last few years and have deferred entry plans due to regulatory constraint," NV Sivakumar, ED, PricewaterhouseCoopers said. "Entry of Wal-Mart through the available route could result in more structured deals within regulatory framework of government policy," he added.
> 
> The Bharti Wal-mart deal would also serve a sort of endorsement for many to make a decision on India. "The confidence expressed by Wal-mart in entering the Indian market may lead the others, who are sitting on the fences, to actually advance plans of entering the country", Technopak India chairman Arvind Singhal said, adding "they would make up their minds, this way or that way, but a decision would be made".
> 
> Retail biggies like Home Depot of the US, Ikea of Scandinavia and Carrefour will advance their plans of setting shop only as and when markets mature, experts further pointed out.
> 
> Ranjan Biswas, partner, Ernst & Young, says "Wal-Mart is one of the global leaders in organised retail. The fact that they have decided to enter India with Bharti as a joint venture partner shows that India is clearly an attractive destination for global retailers to consider. Additionally, the new venture also shows that India has companies which can be potential partners for big international retailers".
> 
> European, Japanese and American retailers, like Ahold, Carrefour, Tesco, Makro, Metro, Aeon and Wal-mart have made their presence felt in several Asian countries.


----------



## Contrarian

*Funds keep pouring in for realty
*
NEW DELHI: FDI in real estate is pouring in. After Unitech's decision to raise $700 million to invest in realty, on Thursday, US-based Redhawk Investment Group announced an investment of $1.2 billion to develop a 500-acre township in the country.

In recent times, a number of real estate funds have been formed across the world to invest in India. ICICI Securities' Ravi Sardana said if one has a project, raising funds is not a problem.

In realty, funds are chasing projects. The CEO of Redhawk Investment Bipin Agarwal said the group would develop a township in one of the three cities Ã¢â¬â Bangalore, Hyderabad and Greater Noida. The group is negotiating with authorities to buy land.

Agarwal said the township will have 6 mini campuses and one main campus. Each mini campus will have an office complex to accommodate around 2000 people. To provide housing needs of these employees, the campus will have residential accommodations. Besides this, each campus will also have shops, hospitals and other recreational facilities like swimming pool, gym and playgrounds.

The concept is to make home to office a 20-minutes walk. In the main campus there would be office and residential complexes for around 8,000 people. Agarwal, who was co-founder and director of US-based Tanning Technology Corp, said the facilities would be leased out to US-based financial services companies, which want to shift back office operation to India to tap its workforce.

The facilities would also be used by the financial services firms to support IT operations in US. Agarwal said it would raise $ 200 million initially to start work. The rest would be raised later as the work progesses.


----------



## Contrarian

*US fund, LN Mittal to buy stake in Indiabulls*

MUMBAI: Karrick, an investment firm owned by steel baron LN Mittal and FIM Holding B, an arm of US-based investment advisor Farallon Capital, have bought 13.3% equity of Indiabulls Infrastructure Development (IIDL) for Rs 447 crore.

While Karrick has picked up 3.3% equity for Rs 112 crore, Farallon has paid Rs 335 crore or Rs 447 per share for a 10% ownership in the company which hopes to build roads, ports and special economic zones as India tries to remove infrastructure constraints to sustain a booming economy.

Farallon is one of the biggest shareholders in the group's flagship Indiabulls Financial Services (IFSL), which has one of the fastest growing share broking businesses in the country.

For Mittal, this is the third investment in the Indiabulls group. He made his first investment in Indiabulls six years ago when he picked up a 7.5% stake at Rs 6 per share. His second investment in the group was an 8.4% stake in Indiabulls Credit Services, an unlisted consumer-loans subsidiary of IFSL.

Sameer Gehlaut, chairman, IFSL said, the formation of IIDL completes the suite of real estate services that the group would be able to offer. Indiabulls Real Estate (IREL), an IFSL arm which is in the process of being demerged, develops and manages offices and residential properties and some hospitality-related businesses.

The demerger of IREL is expected to be completed within a month. Shareholders will get one share of IREL for every share of IFSL they hold. IFSL shares ended 4.35% higher at Rs 572 on the BSE. However, the announcement came after the close of the market.


----------



## Contrarian

*Hero to enter car-making, retail*

NEW DELHI: The conservative yet diversified Hero Group is turning a new leaf. As part of plans to expand its portfolio, the cycles-to-infotech Hero group is now preparing a new growth blueprint which includes forays into manufacturing cars and auto parts besides entering the high-growth organised retail market.

Strategies for these diversifications are being finetuned and most of these ventures would be in place over the next 2-3 years, Pawan Munjal, managing director of the $2-billion Hero group's flagship company Hero Honda, told TOI.

"We have been known to be a conservative group, but now we are becoming more aggressive in the market. The Hero group is now looking at new opportunities across various industries," Munjal said.

A foray into manufacturing passenger cars is among the new strategies that's on the active burner, he said adding: "We are looking around. As soon as we get a good partner and a good product line, we will foray into this segment."

This would mark a second coming for the Hero group in the car market. More than half a decade ago, it had joined hands with BMW to enter the car market. However, the project was shelved after a detailed feasibility study.

The Munjal family's proposed car venture, industry watchers said, is expected to look at targeting the entry-level segments in India to take on Maruti, Hyundai and Tata.

Like its counterparts in the Indian automobile industry, the Hero group is also entering the automobile components market. And acquisitions would be among the preferred routes for expanding its footprint in this market.

"Till now, we were producing components mostly for our internal consumption. But now, we have decided to look externally and build our presence in the component sector, both through the organic and the inorganic routes," he said.

The other big diversification will be a foray into the organised retail market Ã¢â¬â a segment that has caught the fancy of business houses like Reliance and Bharti. "This (retail) is one sector that we feel offers huge opportunities for growth. We are studying the various options," Munjal said.

"I can't give any details now. All I can say now is that these ventures will be in place much before 2010," he said.


----------



## Contrarian

*Once again, domestic air fares rise*

NEW DELHI: A steady decline in fuel prices in the global market notwithstanding, India's airline companies have decided to go ahead with a flat Rs 150 hike in domestic air fares from Friday in a desperate attempt to wash some of the red ink off their balance sheets.

And the pretext for hike: The growing congestion in the skies, which is leading to high fuel burn and an increase in operating costs.

India's domestic airlines Ã¢â¬â led by Jet Airways, Indian Airlines, Kingfisher and Air Sahara Ã¢â¬â have decided to impose a fresh congestion surcharge of Rs 150 on all air tickets with effect from Friday. The decision was taken at a meeting of the recently-formed airline industry body, Federation of Indian Airlines (FIA).

This would be the fifth time that airline are hiking domestic fares this fiscal. Prior to this, the airlines had effected hikes on fuel surcharges and even tinkered the basic fares to shore up their margins. The industry stated that every airline is losing around Rs 20-30 crore every quarter on account of the growing traffic congestion, which forces aircraft to hover over a city before finding a landing slot.

"Fuel prices may have softened, but the fuel bill has not dropped because of the high fuel burn due to growing congestion. This fresh surcharge is being imposed to reduce the impact of growing operating costs due to this high fuel burn," an airline official said.


----------



## Contrarian

*For '06-'07, growth seen at 8.5%*

NEW DELHI: As Indian economy shines, most economists are betting on 8-8.5% growth during 2006-07, while RBI has forecast around 8% growth.

A beaming FM P Chidambaram refused to enter into the prediction game. "There are no limits to my expectations. Just savour the moment," he said. He acknowledged that there were some concerns on inflation and described the situation as "worrisome".

According to latest data, WPI-based inflation grew 5.29% during the week ended November 11. RBI expects inflation to range between 5% and 5.5%, but Chidambaram said the desire was to move below 5%. "A growing economy must learn to tolerate some inflation. The tolerance level is around 4%," he added.

In recent months, rise in price of essential commodities like wheat, pulses, fruits, vegetables, eggs and milk have been a cause of concern for the government and it is under pressure to take more steps to keep inflation under check. The continued growth momentum is expected to raise inflationary expectations in the economy, as was evident from the drop in bond prices soon after GDP data was released.

There have also been growing concerns from the central bank which only last month said it was necessary to watch the economy for signs of overheating. But the FM said it was premature to say the economy was overheating. Since January, RBI has raised short-term lending rate by 100 basis points and the short-term borrowing rate by 75 basis points, in a bid to curb inflation.

Prices apart, a slowdown of sorts in agriculture could prove to be another sticky point for the government, especially when it has already been accused of ignoring farmers and doing little to boost productivity.

The sector, which accounts for nearly 20% of GDP, grew 1.7% in Q2 as against 4% in last year. While FM said government would analyse the reasons for slowdown, economists blamed the rains. "Average rainfall was normal, but distribution was skewed geographically and in timeliness, which seems to," said Crisil's DK Joshi.


----------



## Contrarian

*Sebi turns tech-savvy to track market*

MUMBAI: From Friday, keeping tab on the bulls and the bears on Dalal Street will become hi-tech. Market regulator Securities and Exchange Board of India (Sebi) is launching an integrated online system for market surveillance that would capture data from a host of sources on real-time basis to look for any irregularities.

Christened Integrated Market Surveillance System (IMSS), the system is capable of capturing market transaction data and reference data from sources as varied as stock exchanges, depositories, clearing bodies and newswires, R Ravichandran, CGM, Sebi said.
In a presentation to the media at Sebi House, the regulator's new headquarters, Ravichandran said although IMSS will be launched on Friday, it would take a few months to standardise the surveillance system.

One of the important functions of IMSS is the generation of surveillance alerts, on real time basis as well as when the markets are closed. About 39 different parameters have been set into the system which could generate these alerts, which in turn will be looked at by Sebi's surveillance department manually for further action.

Among different types of market irregularities, the system is capable of generating alerts if there is any creation of an artificial market in a stock, insider trading, synchronised trading, front running, high concentration of shares available for trade and price manipulation.


----------



## Contrarian

malaymishra123 said:


> *Once again, domestic air fares rise*
> 
> NEW DELHI: A steady decline in fuel prices in the global market notwithstanding, India's airline companies have decided to go ahead with a flat Rs 150 hike in domestic air fares from Friday in a desperate attempt to wash some of the red ink off their balance sheets.
> 
> And the pretext for hike: The growing congestion in the skies, which is leading to high fuel burn and an increase in operating costs.
> 
> India's domestic airlines &#8212; led by Jet Airways, Indian Airlines, Kingfisher and Air Sahara &#8212; have decided to impose a fresh congestion surcharge of Rs 150 on all air tickets with effect from Friday. The decision was taken at a meeting of the recently-formed airline industry body, Federation of Indian Airlines (FIA).
> 
> This would be the fifth time that airline are hiking domestic fares this fiscal. Prior to this, the airlines had effected hikes on fuel surcharges and even tinkered the basic fares to shore up their margins. The industry stated that every airline is losing around Rs 20-30 crore every quarter on account of the growing traffic congestion, which forces aircraft to hover over a city before finding a landing slot.
> 
> "Fuel prices may have softened, but the fuel bill has not dropped because of the high fuel burn due to growing congestion. This fresh surcharge is being imposed to reduce the impact of growing operating costs due to this high fuel burn," an airline official said.



hehe, im proud of the airports being developed. This is one of the reasons, there SIMPLY WAS NOT ENOUGH PLACE TO PARK THE AIRCRAFTS! and the new airports, awsome! Most of them bigger than heathrow, many of them greenfield projects!. And one of the added spin off benifits is that in many of the tier 2 cities, HAL shared its airport with the city for flights. So HAL always had trouble testing its own things. Now every tier 2 city is going to get a new airport, HAL gets all its airports decongested!, so they are able to test more. A major boost to the aviation R&D in India. Benifits the IAF immensely! 

Not to mentio Mumbai is getting 2 airports!! The current one is begin upgraded to a BIG size, and getting a world class infrastructure keeping in mind the growth in size for atleast 20 years. And another one, which is proposed to be of the same capacity!

BTW any1 who is a frequent air traveller in India, knows hwo bad the situation is! Oh one of the bets parts is that all the airports have been bidded for by International consortium's, by a transparent tender. Some of the airports have already passed ownership from the govt. to the private consortium. Delhi airport for eg, the new owner is GMR group. *It is planning to invest USD 1Billion in the process! * of this 1 airport alone. Frapport organisation, which runs the frankfurt airport is going to handle the daily runnings of the airport along with the frankfurt airport. The GoI is no longer in charge of it! And the rest of the consortium is of other similar players!


----------



## Contrarian

*Nokia mobile TV tech for Doordarshan*

AMSTERDAM: The Finland-based Nokia on Thursday announced that it had tied up with Doordarshan in India for a pilot project to roll out mobile TV technology in India. The mobile TV pilot will see the use of Nokia's open standards based Digital Video Broadcast-Handheld (DVB-H) solution.

The Nokia mobile solution is expected to be delivered to Doordarshan through SHAF Broadcast Private Ltd early next year.

During the pilot period, Doordarshan will test the reception quality of the broadcast coverage and explore various options of supporting different service schemes such as advertising and interactive services. The pilot is expected to help Doordarshan understand consumer needs.

Mobile TV broadcasting helps users to watch their favourite TV programmes on their mobile devices.

Digital TV broadcast signals from the air are optimised for mobile devices in much the same way as television at home.

Addressing Indian media here, Ilkka Raiskinen, Senior Vice-President, Multimedia, Nokia, said Vietnam was the first country in Asia where Nokia had rolled out its Mobile TV technology. Nokia had operationalised this technology in Italy and Finland as well. Trials were on in the U.K. and Spain, he said.

Mr. Raiskinen said the Mobile TV application required a DVB-H enabled device. At present, Nokia had N92, a high-end device for mobile TV application.

The company was now implementing mobile TV application only on 3G enabled devices.

He, however, pointed out that mobile TV application did not require a 3G device and that it could work on 2G devices as well. The cost was not a key issue in rolling out the mobile TV infrastructure. It required a few base stations.

The DVB-H solution was an efficient one and did not need more capacity as more consumers were added, he said.

He said similar pilots, carried out elsewhere in the globe, found that, on an average, the mobile TV was used for 20 minutes by any user on the mobile in a day to check on sports, news and soaps. To a question, he said it took 12 months for Nokia to roll out the mobile TV technology in Finland since the commencement of the pilot.

It was possible to deliver a totally new kind of content via the mobile TV.

For Doordarshan, adoption of DVB-H standard was a logical extension of its DVB-T services. DVB-H over IP (Internet protocol) based on open standards is expected to provide mobile phone users discerning broadcast experience.
http://www.hindu.com/2006/12/01/stories/2006120104011800.htm


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## Contrarian

* Airtel ties up with Google*

NEW DELHI: Bharti Airtel on Thursday entered into a strategic partnership with Internet search major Google to offer search services to its mobile customers.

Google will incorporate mobile advertisement products on the Airtel Live mobile WAP portal.

This will enable advertisers to reach their target users with their products and services.

The company, however, refused to give the number of Airtel mobile users who actually surf Internet for search services.

"Under the agreement, Airtel will provide `Google search' through its portal to its mobile subscribers,'' Bharti Airtel President Manoj Kohli said, but declined to divulge details of the revenue sharing agreement between the two companies.

"In India, the mobile growth has surpassed the growth of PCs. With this unique partnership, Internet will be converged into a handheld device enabling anytime, anywhere access to information and entertainment for Airtel customers,'' Mr. Kohli said.

Google Vice President, Asia Pacific and Latin America Operations, Sukhinder Singh Cassidy, said: "India is one of the fastest growing mobile markets in the world. This agreement with Bharti Airtel will help in bringing Google services to the mobile users in the country.''

PTI 

http://www.hindu.com/2006/12/01/stories/2006120100801900.htm


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## Contrarian

* Nilekani Forbes Asia Businessman of 2006*

BEIJING: Infosys CEO Nandan Nilekani has been named `Businessman of the Year' for 2006 by Forbes Asia for his `nimble' stewardship in keeping the company ahead of peers in the global outsourcing phenomenon.

The 51-year old co-founder of the Bangalore-based company was picked for his track record in keeping Infosys nimble and ahead of its peers in the global outsourcing phenomenon, Forbes Asia said in a statement.

He has been Chief Executive since 2002 but took sole charge in August when Infosys founder Narayana Murthy retired. Under his tenure, Infosys has achieved sustained profitability Ã¢â¬â after-tax profit grew by 30 per cent in each of the last three years.

The most recent quarter ended September 2006, was the best on record. Revenue reached $746 million, up 13 per cent from the previous quarter and 42 per cent higher than the same period a year ago. Net income was $199 million for the quarter, a 14 per cent increase over the previous three months and a 44 per cent gain over the same period a year ago, the statement said.

At that pace, Infosys will make more money this year than Central Japan Railway, Fujifilms Holdings and Sharp, all considerably bigger. His record to-date makes Mr. Nilekani Forbes Asia's choice for Businessman of the Year, the statement said.

PTI 
http://www.hindu.com/2006/12/01/stories/2006120100791900.htm


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## Contrarian

* Millennium Infotech to invest $ 100m*

HYDERABAD: Millennium Infotech, the Indian-arm of US-based Millenium Infotech Inc., has decided to invest $ 100 million to ramp up its Indian operations in the coming two years. The company that recently launched its operations offering data centre management and replication solutions has decided to make its Indian subsidiary a global delivery hub for its customers. It has plans to build one of the largest and secured data centre infrastructure with latest data housing technology for ensuring business continuity with zero downtime and scale up its head count to 2,000. 

http://www.hindu.com/2006/12/01/stories/2006120100771901.htm


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## Contrarian

* IL&FS to assist creation of textile parks*


> CHENNAI: The Indian textile industry, in partnership with the Union Government and Infrastructure Leasing and Financial Services (IL&FS), is creating another success story in creation of world-class infrastructure through dedicated textile parks. IL&FS, besides being involved in identification of potential projects, their structuring, designing and execution, has also developed innovative financing instruments to fund the common infrastructure in the parks. IL&FS has tied up the debt portion of the project cost for all the parks, a release says.


----------



## Neo

malaymishra123 said:


> I agree. If the Q3 and Q4 show as good results, our growth would be 9% avg.
> This could be because of the govt's effort to pump money and develop the country's infrastructure on a war footing
> 
> You really should read up on the airports that are comming up all over India!!, the delhi one is gonan become one of the bets woldwide, all international companies have bid, there have been proper calculations, same for mumbai, channai and kolkota! Not to mention all the tier 2 cities are also getting new airports, completely new!!all at par with the best in the world today, all with capaciy to handle the next 20 years load easily!
> refer here: http://www.pakistaniforces.com/forums/showthread.php?t=2783
> 
> And also the roads, any1 who has visited Delhi recently should see, more than 50 flyovers were there already 2 years back, as many more planned!, delhi metro and stuff. Its going good!



Good post Malay!

Imho Bangaluru has the best airport in the country at this moment and soon it will become an international hub connecting Australia with Europe and North America.
Did you know that Bill Gates Microsoft specially asked US DoT to gain landingrights for North West Airlines between Seattle and Bangaluru via Amsterdam?
Unfortunately the service after three flights already due logistical and security concerns.
Northwest's alliance partner KLM came with thrice a week service between Amsterdam and Hyderabad instead linking it to 20 major cities in the US.



> Though there is one serious dissapointing peice of news, the agricutural growth has slowed down.I am very concerned on this issue. The neglect of the agricultural sector during the NDA govt played no small part in their getting kicked from power last time.
> 
> And when UPA came to power, their motto everyday in the newspapers was that they are gonna transform the agriculture sector, put land reforms in place, etc. I am yet to see that happen satisfactorily. Though it always happens that Q2's agroicultural output is always less. I rather expect that this is the key to unlocking >10% growth of the economy EASILY if this sector performs half as well as the rest.
> 
> And unless this sector is tackled effectively, there are going to be serious problems indeed.



Yes, this is a very disappointing development, one that should ring bells in New Delhi.
Despite heavy growth in manufacturing sectgor, India basically relies on agro-economy. Over 65% of the total population is concentrated in rural area's, including over 60% of the laborforce. This is one part of the huge population which will not gain the status of middle class income in a long time to come unless revolutionary steps are taken.

Misery among the poor of the rural area's is heartbreaking, there's killing among poor indebted farmers, people sell their children to save them from starvation!!

Earlier this year Delhi announed a reflief package for the poorest, a disappointing amount of $800 million, i.e. 0.01% of the GDP. 
The help is to reach farmers as soft loans and thru bank accounts only to avoid mismanagement and corruption. 
Unfortunately 90% of the farmers don't even have a bank account and rely on traditional private loans from landlords, money brokers and family which often results in losing their land as unpaid depth.

Tell me why Delhi is reluctant to do more for the green sector?


----------



## Neo

Friday, December 01, 2006 

*Indian sugar industry fears crisis*

MUMBAI: With a bumper crop on the horizon, India faces a precipitous fall in sugar prices if the government does not move to lift an export ban on the sweetener. 

The sugar industry over the past two months has been clamouring for the government to end the ban imposed in July after domestic prices rose. 

India is expected to produce a record 22.7 million tonnes of sugar in the current sugar season, up from about 19 million tonnes in the last season, industry officials forecast. 

The country annually consumes about 18 million tonnes of sugar. Sugar mills wanted to export as global prices spiked in September but the government officials spoiled the party, refusing to budge because of high prices at home. 

Industry officials and analysts say now supplies at home are mounting. G.S. Rao, director at Simbhaoli Sugars, said even if the ban was lifted now, most of the sugar would likely stay home because of the drop on world markets. 

He said international prices had come down to $340 per tonne from $475 per tonne in July, giving little benefit to exporters. 

Meanwhile, domestic prices have fallen to about 1,650 rupees ($37.04) per 100 kg from 1,700 to 1,800 rupees a month ago and the chances of a further dip were likely. 

Ã¢â¬ÅI wonÃ¢â¬â¢t be surprised if prices come down by another 50 to 70 rupees, said C.S, Nopany, president of the Indian Sugar Mills Association. Ã¢â¬ÅThe bottom is something which nobody knows now.Ã¢â¬Â 

The low prices have been hitting the sugar mills, particularly cooperatives, said Si Kannan, analyst with Sharekhan Commodities. 

Ã¢â¬ÅWe expect sugar prices to remain flat. Internationally, sugar also has come down from its peak and Indian exporters may not get a higher realisation,Ã¢â¬Â Kannan said. 

Ã¢â¬ÅWe are not positive on that count.Ã¢â¬Â IndiaÃ¢â¬â¢s cabinet is scheduled to meet on Thursday, where the issue of the sugar export ban is likely to be discussed, industry officials said. 

India banned sugar exports in July to help check inflation as prices soared. The government said the ban would last until the end of the financial year in March. 

Ã¢â¬ÅAn announcement the ban is being lifted may arrest the fall. If this does not happen, then it could go down to 1,450 rupees in a weekÃ¢â¬â¢s time,Ã¢â¬Â said Prakash Naiknavare, managing director of Maharashtra State Co-Operative Sugar Factories Federation. 

He said the price could create a crisis in sugar-producing regions. 

Ã¢â¬ÅThere might be a lot of problems regarding payment to farmers this year. They should have removed the ban at least two months ago,Ã¢â¬Â said Nopany. 

He said sugar demand internationally was not as strong as it was three months ago. Ã¢â¬ÅWe have lost a very valuable opportunity and I hope that we donÃ¢â¬â¢t squander away everything.Ã¢â¬Â Naiknavare said the only silver lining was a remote possibility of international prices rising again. reuters

http://www.dailytimes.com.pk/default.asp?page=2006\12\01\story_1-12-2006_pg5_20


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## Neo

Friday, December 01, 2006 

*India may allow private sector into N-power generation*

By Iftikhar Gilani

NEW DELHI: The Indian government is considering amendments to the Atomic Energy Act to allow the private sector to get involved in nuclear power generation, the Lok Sabha was told on Wednesday. 

In a written reply to Jyotiraditya Scindia from Congress, State Minister for Prime MinisterÃ¢â¬â¢s Office Prithviraj Chavan said that adequate security measures were in place to protect all nuclear power plants, adding that same measures would apply to new power plants. 

In reply to a question by Dr M Jagannath, Chavan said the Uranium Corporation of India (UCIL) had proposed uranium mines and a processing plant in Nalgonda district in Andhra Pradesh. He said that the Lambapur-Peddagattu stretch had been identified for the mines, while the processing plant would be set up at Seripally. Production of 1,250 tonnes of ore a day is expected from these mines, but this production will start only after all statutory clearances are obtained. The plant and tailing ponds require 400 acres, of which only 40 acres are under cultivation, the minister said. 

Chavan denied any plans to shift the Apsara reactor from Trombay. He said the nuclear deal with the United States envisaged only shifting of the core of the Apsara reactor, adding that a new core would replace the existing one. He said that all research reactors at Trombay and fast breeder reactors at Kalpakkam were operational and working normally. 

The Rajasthan Atomic Power Station (RAPS) Unit 1 has been shut since October 2004 for detailed assessment of its health and a techno-economic evaluation for its refurbishment, Chavan said in reply to a question from Dushyant Singh. He said that Rajasthan had been compensated by allocation from the Narora atomic power station in Uttar Pradesh. He said the state had also been given its share from RAPS units 2 to 4. He said the state would get further supplies from RAPS 5 and 6, which are expected to complete by 2007-08.

http://www.dailytimes.com.pk/default.asp?page=2006\12\01\story_1-12-2006_pg7_37


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## Contrarian

*HCL Technologies designs car that can read sign boards*

BANGALORE: How about driving an intelligent car that reads sign boards, milestones or billboards for you, while you concentrate on driving?

It isn't all. It's dashboard will display what's there on either sides of the road, instead of you slowing down or stopping to capture what's out there.

It's not a concept car or a dream machine. A team in HCL Technologies has developed an innovative road tracking system which comprises two little cameras on either side of the car and a box, that contains a video encoder/decoder, an audio processor and a digital display panel, that can be mounted on the dashboard. The entire device runs on a chip designed by Texas Instruments.

GH Rao vice-president (automotive engineering services & solutions) HCL told The Times of India that the company has already made the technology available to several automotive OEMs and leading car makers like Audi, BMW, Ford, Mercedes and Toyota soon will have cars fitted with road tracking system, which is different from the existing GPS navigation tools.

The road tracking system was recently tried in Chandhigarh, on a pilot basis, by a couple of Indian automotive companies. "Indian roads need a bit more traffic discipline for such systems to work better. But it's a matter of time and better roads anyway happening," said Rao. "But again, India has a mindset problem and we attach such technologies to luxury and not to safety," he added. The road tracking system will also warn the driver of humps and potholes within a 40-metre range.

HCL Technologies has also developed a blind-spot detection system that will display a panoramic, stitched-together view of the objects found in blind-spots on the dashboard. It would also give the driver a heptic warning through steering or seat vibration.


----------



## Contrarian

*Cancellation is labour lost for tickets booked
*
MUMBAI: If you ever decide to book an air ticket online using a credit card, ensure that your travel plan remains unchanged. A 60-year-old Delhi travel agent learnt this the hard way.

He was denied refund of an air ticket, which he tried to cancel just three minutes after booking it. To be fair, the airline had clearly mentioned a non-refund clause on its website.

"My client suddenly faced financial problems. I called up and mailed the airline offices immediately, and also went to meet the management personally," the travel agent said. He has been trying to get a refund for four months now.

On the stringent policy, a spokesperson of the airline said: "Once you book, you can't get out of it. If his client is not paying, that is not our problem."

Elsewhere, in Mumbai, a 37-year-old mediaperson said he booked and then cancelled a ticket online, a month ago. While it too had a non-refund clause, he was entitled to refund of taxes and fuel surcharge. He is still waiting. "Online refund would take two to three weeks," said a spokesperson of the airline.

Technically, at least 24 to 48 hours are required to process an online refund transaction, where it gets credited to the card account. Nutan Lugani of the National Consumer Helpline, a project of the ministry of consumer affairs, said in reality, it takes longer.

A 35-year-old Delhi executive, who cancelled her Delhi-Patna air ticket two weeks ago, is yet to get her refund.

In December 2005, recalls consumer activist Jehangir Gai, a 56-year-old Mumbai businessman challenged a non-refund clause of an international airline by filing a petition in the high court. It immediately paid up the amount and the consumer withdrew the case. "The airline should at least refund the Airport Authority of India's tax component as the airport services are not availed of," Gai said.

But before moving court, said T K Datta, a member of the National Consumer Helpline, a consumer must first approach the civil aviation department.

Not all tickets though come with a non-refund clause. While most airlines return online bookings on the internet itself, some like Jet Airways do not. Passengers cannot cancel, refund or change travel dates on the internet; they must approach Jet Airways' ticket offices.

Some like low-cost carrier SpiceJet do not refund the money at allÃ¢â¬âthe airline makes a credit shell of the booking amount, minus Rs 600, which the passenger can use for any SpiceJet flight in the next one year.



LOL, i bet next time he READS the rules carefully


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## Contrarian

*RBI proposes NBFCs to maintain a CAR of 10%*

MUMBAI: The Reserve Bank of India on Friday proposed fresh guidelines to regulate non-banking financial companies (NBFC), including the minimum capital adequacy ratio they should maintain and commercial banks' exposure in them.

The second set of draft guidelines has proposed that all systemically important (with asset size of Rs 100 crore and more) non-deposit taking NBFCs should maintain a minimum capital adequacy ratio (CAR) of 10%.

New guidelines have broadbased the exposure of banks to all NBFCs by linking it to the bank's capital funds as against net worth in first draft.

Subsequently, the exposure of a bank in a single NBFC has been increased to 10% of capital funds, and to all NBFCs up to 40% of their capital funds. These limits may be exceeded by 5% (single NBFC) and 10% (all NBFCs) of capital funds, respectively if the additional exposure is on account of funds on-lent by NBFCs for infrastructure, RBI executive director Anand Sinha said.

In view of the importance of the issue, the revised draft has been again put in the public domain for feedback till December 7, he said. The RBI has identified a total of 148 systemically important NBFCs with a total asset base of Rs 1,72,000 crore.

The NBFCs promoted by parent/group of a foreign bank having presence in India, or which is a subsidiary of the foreign bank's parent/group or where the parent/group is having management control, would be treated as part of that foreign bank's operations in India. They have been brought under the ambit of consolidated prudential regulations.

NBFCs which are subsidiaries of banks or where banks have a management control, will also be allowed to offer discretionary portfolio management schemes (PMS) to their clients on a case-to-case basis. Due to certain reasons, such NBFCs were hitherto not allowed to offer PMS services.

Also, banks in India, including foreign ones, shall not hold more than 10% of the paid up equity capital of a deposit taking NBFC.

The second draft also states that NBFCs set up under the automatic route will be permitted to undertake only those 19 activities which are permitted under this route.


----------



## Contrarian

*DoT tightens subscriber checking norms*

NEW DELHI: DoT has taken a tough stance on subscriber verification systems adopted by mobile companies. Telecom operators will now have to pay a penalty and de-activate any pre-paid mobile connection if the subscriber information is found to be incomplete or inaccurate.

As per the norms issued on November 22, if after March 31, 2007, any subscriber number is found to be without proper verification, a minimum penalty of Rs 1,000 per violation would be levied on the licensee, a DoT notification said.

It has also been decided that pre-activated SIM cards will not be sold in the market.

The new norms follow on the heels of a September 27 DOT meeting where it was decided that the guidelines for 100% verification of subscribers will be scrupulously adhered to for the purpose of supplementing existing information. The move follows security concerns arising over reports of fake addresses and bulk connections in a single person's name.

The new norms are being enforced as the licence condition of cellular and unified mobile operators only says that the licensee must ensure "adequate verification" of each and every customer before enrolling him/her as a subscriber.

From now on, any person authorised to sell SIM cards will have to record in the application form that he has seen the subscriber and verified his documents with the original. The operator is also obliged to apprise the seller about his responsibilities and liabilities in the matter.

Pre-paid SIM cards, which comprise 80% of mobile connections, will be activated only after the customer acquisition form has been properly filled and copies of documentary proof submitted by the customer. The authorised seller, who is directly accountable to operators, would have to verify that the documentary procedures are completed before activating the SIM card.

Sources said if any discrepancy was found at any stage, the connection would have to be de-activated immediately, but in any case not later than 72 hours.

The licensee would have to ensure that information about the subscriber is entered into the licensee's database correctly based on the information in Customer Acquisition Forms (CAF) and supporting documents.

For this purpose, the licensee would have to nominate officials responsible for entry of subscriber information in the database and cross-checking information from it.


----------



## Contrarian

Neo said:


> Good post Malay!
> 
> Imho Bangaluru has the best airport in the country at this moment and soon it will become an international hub connecting Australia with Europe and North America.
> Did you know that Bill Gates Microsoft specially asked US DoT to gain landingrights for North West Airlines between Seattle and Bangaluru via Amsterdam?
> Unfortunately the service after three flights already due logistical and security concerns.
> Northwest's alliance partner KLM came with thrice a week service between Amsterdam and Hyderabad instead linking it to 20 major cities in the US.



Yeah, and the old Bangalore airport actually belongs to HAL for its researches, and HAL had been complaining for a LOONG time that it could not fly its own planes for research in its own airport because of the civilian traffic!! LOL

Now Bangalore gets an entirely new airports. And its a greenfield project!! one of the biggest airports in the world.





> Yes, this is a very disappointing development, one that should ring bells in New Delhi.
> Despite heavy growth in manufacturing sectgor, India basically relies on agro-economy. Over 65% of the total population is concentrated in rural area's, including over 60% of the laborforce. This is one part of the huge population which will not gain the status of middle class income in a long time to come unless revolutionary steps are taken.
> 
> Misery among the poor of the rural area's is heartbreaking, there's killing among poor indebted farmers, people sell their children to save them from starvation!!
> 
> Earlier this year Delhi announed a reflief package for the poorest, a disappointing amount of $800 million, i.e. 0.01% of the GDP.
> The help is to reach farmers as soft loans and thru bank accounts only to avoid mismanagement and corruption.
> Unfortunately 90% of the farmers don't even have a bank account and rely on traditional private loans from landlords, money brokers and family which often results in losing their land as unpaid depth.
> 
> Tell me why Delhi is reluctant to do more for the green sector?




Yes, they are reforming the banking sector to cater to the lending problem, but the main prolem lies in the fact that enough stress is not laid on this, the reform is not fast enough. This happens with all the governments, they come to power and soon tehy forget the basic problem, they get involved in the glitzy infrastuctures, IT services, this and that, the agro problem is relegated to the back burner. I rather hope that with half the term left for MMS, he would really focus on these things so to brag in the next elections. Again, i am dissapointed.

There is not enogh investment in the rural areas, and that is compounding hte problems severely. It is causing migration from rural to urban areas, putting more stress on the cities services and also causing a labour deficit in the village farms and fields.

The problem is not being reluctant, i think its pretyt conveniently forgotten or neglected. There is nothing that can be done but wait and watch for this sector. Things are being done, i dont deny that, but at a very slow pace.


----------



## Contrarian

*Indian marketing gurus in US focus on new media*

With cell phone companies embracing the idea of a "Television in the Pocket" and media firms like CBS investing in a branded channel on YouTube.com, marketing gurus from South Asia put the phenomenon under scanner in New York on December 4.

Leading lights of the new media are gathering in New York for a panel on "New Media Revolution: How Media and Mobile is Changing the Game of Advertising" under the auspices of SAMMA (South Asians in Media and Marketing), a national trade association for South Asian and Indian Executives in US marketing and media companies.

Panelists include Manish Jha (SVP, ESPN Mobile), Nick Pahade (President, Denou Group), Deepak Srinivasan (Vice President of Product Management, 24/7 Real Media) and Nihal Mehta (CEO, Ipsh! Mobile Marketing).

"South Asians are now extending their dominance in software technology to the consumer marketing arena," says SAMMA co-founder Bhavesh Patel, Director, Digital Media, NBA (National Basketball Association).

"SAMMA is proud to be bringing attention to this growing trend of South Asians in marketing and helping network this rapidly growing community of leading media and marketing executives."

Among other leading South Asian executives in US marketing and media companies are:
* Bina Brianca, Executive Director, Global Consumer Marketing, Clinique
* Nusrat Durrani, SVP and General Manager for MTV World
* Indra Nooyi, President and CEO, Pepsico
* Ivan Menezes, President, Global North America, Diageo (marketers of Smirnoff & Guinness)
* Vivek Shah, President, Digital Publishing, Fortune/Money Group
* Rishad Tobacowalla, Chief Innovations Officer, Publicis and Founder,
Denuo

SAMMA aims to promote and connect the growing numbers of South Asian professionals working in the media and marketing industries - across industries that include CPG, advertising, new media, entertainment, fashion/retail.

Founded in 2006, SAMMA with a membership of 550 provides a platform for linking South Asians in media and marketing to one another and providing networking, professional development, and business development opportunities to them.


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## Contrarian

*Deora receives first shipment of Sakhalin oil*

The first shipment of crude oil from the Sakhalin oil field in Russia was received on Saturday by Minister of Petroleum and Natural Gas Murli Deora at the New Mangalore Port Trust complex in Mangalore.

The consignment of 92,055 metric tonnes (672,000 barrels) of Sokol crude was ferried on board the Russian ship MK Viktortitov - the oil tanker of Primorsk Shipping Company on a charter of OVL (ONGC Videsh Ltd). The tanker set sail from Dekastri port in Russia on November 14.

OVL has 20 per cent stake in Sakhalin-1, acquired from two subsidiaries of Russian government oil firm Rosnett - SMNG-S and Rosneft-S.


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## Contrarian

*Reliance restarts fire-hit unit at Jamnagar refinery*

Reliance Industries Ltd (RIL) on Friday said the hydrotreater plant at its refinery in Jamnagar, partially damaged in the October 25 fire, has been refurbished and it has started functioning.

"The VGO Hydrotreater No 2 plant started functioning normally from Friday morning," RIL said in a statement in Mumbai.

While the fire at the plant was brought under control within an hour, the damaged portion was refurbished in 35 days, it said.

The company said that the refinery has been working without any loss of production after the incident.


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## Contrarian

*Key indices set new peaks, Nifty at 4000; Sensex at 13,857
*
Key indices on Friday charged ahead, with the National Stock Exchange index Nifty reaching an all-time intra-day high of over 4,000 points and the Bombay Stock Exchange Sensex at 13,857.

The BSE Sensex ended higher by 148.47 points at 13,844.78 on frantic buying by funds led by shares of capital goods, auto and banking segments.

In similar fashion, NSE index Nifty closed higher by 43.10 points at 3,997.60, after touching a record intra-day high of 4,001.30 just before the closing bell.

The major support to the bourses came in from heavyweight stocks such as Reliance Industries, Infosys, Tata Motors, Hero Honda, Maruti Udyog, Motors, Bajaj Auto, State Bank of India and ICICI Bank.


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## Contrarian

*Govt to consider policy changes to attract more FDI: Montek*

The government will consider policy changes while finalising the 11th Five-Year Plan to attract more foreign direct investment and remittances, Planning Commission Deputy Chairman Montek Singh Ahluwalia said on Friday.

"In the course of the finalisation of the 11th Plan, if we find some areas to further improve remittances and attract more FDI, we will look into it," he said after releasing the Regional Poverty Profile 2005 prepared by SAARC Secretariat.

In the report, the SAARC Secretariat has estimated the receipts of remittances in 2004 at around 22 billion dollars against a mere 4.4 billion dollar FDI flow into the country.

Ahluwalia said there was no doubt the country was doing well on remittances as also FDI.

"Our position on the external account is good," he said.

Asked about the current FDI policies, Ahluwalia said: "The policies at the moment are good enough. But we would want the policies to help increase the revenues." Remittance has been an important source of foreign exchange supporting growth and has contributed positively to income, consumption and savings.

Nearly 25 million NRIs (Non Resident Indians) sent close to 22 billion dollars back home in 2004. This, together with FDI, provided an impetus to the economy and raised the GDP growth level to well above 8 per cent.

According to estimates, India has the largest share of remittances from a total of about 100 billion dollars. China and Mexico are close behind. In the SAARC region, India, Pakistan and Bangladesh were among the top recipients of remittances in 2004.


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## Contrarian

*US business seeks GSP renewal for India*

A US chamber-led coalition of nearly 180 companies and associations has urged Congress to approve a tax and trade package including renewal of a programme offering trade benefits to India.

The coalition representing a broad spectrum of the US business community made the plea to approve six "critical programmes that would expand US trade and economic competitiveness and promote a number of US foreign policy objectives" in a letter on Friday to House and Senate leaders.

Specifically, it urged the lame-duck session of Congress to renew the Generalised System of Preferences (GSP) programme describing it as "an effective trade tool bolstering domestic manufacturing, expanding consumer choice, and promoting economic growth in developing countries."

Allowing GSP to expire could lead to months of significant trade disruption. Not only will GSP beneficiary countries suffer losses of important export orders, but American companies who rely on lower-cost preference programme inputs-which often include raw materials, components and parts used in US manufacturing-will see their costs escalate and their competitiveness decline, it said.

"Moreover, small and medium-sized businesses will suffer the most, since they lack financial resources to pay the import duties that will re-emerge if Congress does not act," said the letter to Republican House speaker J Dennis Hastert, Senate majority leader Bill Frist and House and Senate Democratic minority leaders, Nancy Pelosi and Harry Reid.

The US Trade Representative (USTR) is currently looking at a proposal to limit, suspend or withdraw trade preferences to India and a dozen other countries as part of a major GSP review ordered after the collapse of world trade talks.


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## Contrarian

*The SMS way to lend or borrow*

SMS or short messaging service may soon be the ideal way to lend or borrow if a New Delhi-based software expert succeeds in perfecting the system for American markets.

The near-ubiquitous power of SMS could be used to undertake solutions like delivering news headlines to subscribers and other specialist needs, said Sirtaj Singh Kang, chief of Sapphire Mobile Systems.

"We expect to get rolling by early February in the US," Kang, an NRI who returned to India five years ago, said.

Kang's company is "aimed at a young urban market" and student-oriented cities in the United States. It is for people who are tech and mobile-savvy, but don't necessarily have a lot of disposable money.

The 31-year-old said: "Our management team is in the US , but our development work is going on in Delhi. (Getting the solution over to) India is not on the cards yet. Our management team doesn't have experience with an Indian market. But we're looking for skills to launch in India too."

"The market here (in India) is huge. In villages, you don't get ATMs (automated teller machines). But mobile coverage is there."

On a visit to Bangalore, Kang was talking to software experts on "writing an SMS service with free software".

"Unlike other countries, SMS in India is pretty much affordable. It costs a little more than a 30 second phone call," Kang said.

There was "certain mistrust" in using a mobile phone for commercial transactions. "Both in terms of security of the network, or worse, when your phone gets lost or stolen."

"But we are pretty confident that we've handled most of these issues in a sensible way. We've made it more secure than a credit card transaction," he added.

Costs per transaction would depend on the deal offered by the banks. "But we want it to be small enough for people to want it, and for it to actually become a cash and cheque-replacement," he said.

Kang, who lived in Australia and is now based in New Delhi's New Friends Colony, was a hacker working on the K Desktop Environment project to provide a contemporary desktop environment for Unix workstations.


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## Contrarian

*TATA group forays into hypermarket*

The TATA group is in an advanced stage of discussion with British retail giant Tesco for a debut in the 'hypermarket' sector in India. A hypermarket is a huge retail facility, a superstore, which carries an enormous range of products under one roof.

The Tata-Tesco talks are for a strategic alliance, which will eventually be converted into a joint venture as and when the government allows foreign direct investment (FDI) in the retail sector, sources in the industry said.

This would be the third venture of the Tata Group into the retail segment. Trent Limited, headed by Noel Tata, is one of the oldest retail companies of the country, which runs an apparel retail chain under the brand name 'Westside'. Last October, Infiniti Retail, a 100 per cent subsidiary of Tata Sons, entered into a technical alliance with Australian retail chain Woolworths to start IndiaÃ¢â¬â¢s first large-format specialist retail chain for consumer electronics and durables under the brand name Croma.

The sources said the Tata-Tesco partnership would be along the lines of the Infiniti-Woolworths alliance. Since the government has not allowed FDI in the retail segment, in the first stage it will be a technical alliance, which will eventually turn into a 74:26 joint venture where the Tatas will have the larger stake, the sources said.

The broad agreement is almost finalised and a formal announcement will be made shortly, the sources said. The alliance will focus on the hypermarket segment in all major cities in the initial stage. Although the financial details are not available, sources said since the hypermarkets would be started in all major cities the initial investment would be more than a billion dollars.

However, a Tata Group spokesman, while reverting a detailed questionnaire from HT, said the news of the proposed Tata-Tesco alliance was incorrect. He said he would not comment on market speculations.

Prior to the talks with the Tata Group, Tesco was in discussion with the Bharti Group, which eventually failed, as Tesco was not interested in making the required investment. Bharti has entered into a strategic alliance with the US retail giant Wal-Mart.


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## Contrarian

*Ranbaxy breaks big into South Africa with $70 m acquisition
*
The country's largest pharmaceutical company, Ranbaxy Laboratories, is well into an acquisition spree overseas, and has added another big buy to its bag with the purchase of South Africa's fifth largest generic drug maker, Be-Tabs Pharmaceuticals (Pty) Ltd, for $70 million. That tops seven companies across the globe that the Delhi-based company has already bought for a total of more than $450 to 470 million since January this year.

Ranbaxy's biggest buyout yet has been that of Romania-based Terapia, which was sealed for $324 million.

"Ranbaxy is continuously looking for inorganic growth in the overseas markets,Ã¢â¬Â Malvinder Singh, Ranbaxy's chief executive officer, told Hindustan Times on Friday. The purchase strengthen's Ranbaxy's hold over South Africa, where Be-Tabs is the nation's largest pencillin maker.

The acquisition of Be-Tabs is subject to requisite approvals from South AfricaÃ¢â¬â¢s Competition Council Authority and is expected to be completed in the first quarter of 2007.

BE Tabs, with current sales of around $30 million, is among the most established companies in South Africa. Ã¢â¬ÅBe-Tabs is a significant acquisition in a market that is large and growing with high entry barriers," Singh said.

Be Tabs has a strong over-the-counter (OTC) drug portfolio with significant brand recognition that can be leveraged by Ranbaxy with wholesalers, pharmacists and consumers.

The transaction will be funded by from foreign currency convertible bonds (FCCBs) and is valued at 2.2 times of sales and 7.7 times of EBITDA (earnings before interest, taxation, depreciation and amortisation) multiples.

Ã¢â¬ÅThe acquisition of Be-TabsÃ¢â¬â¢ results in considerable synergies and further strengthens RanbaxyÃ¢â¬â¢s foothold in South Africa. It reinforces our position by expanding our portfolio in a key market that is exhibiting strong growth potential. The move will help us to provide effective disease management solutions in support of the governmentÃ¢â¬â¢s objective to make healthcare affordable to a wider cross-section of the population,Ã¢â¬Â said Singh.

South Africa is the largest pharma market in Africa, valued at close to $2 billion, with a high potential for generic product growth.

Dr Rashid Bhikha, Chairman Be-Tabs, said: "RanbaxyÃ¢â¬â¢s stature as a global generic pharma player brings further credibility to Be-Tabs' 30-year-old rich heritage in South Africa and will take it to its next phase of growth."

Email Gaurav Choudhury:gaurav.choudhury@hindustantimes.com


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## Contrarian

*Private players lure TRAI talent with better pay*

It may not be so easy in cricket, but in the frenetic world of telecommunications, where talent is as much in demand as handsets and talk-plans are, the industry regulator is finding himself like a soccer referee whose linesmen leave to join the teams on the ground.

The chairman of the Telecom Regulatory Authority of India (TRAI) is taking the exit of some prized senior executives in his stride, but others in the body say poaching by private companies and discontent among senior staff members over pay and perquisites are threatening to eat into the regulator's talent pool.

Companies like Bharti Airtel, Reliance Communications and Hutchison Essar Ltd are looking for hot talent to keep customers from churning out, and they also need some talent with regulatory knowledge. And what better place to poach them than government-funded or appointed bodies where knowledge levels run high, but pay-scales are not competitive enough? Private players pay three to six times the compensation that staff who work with the regulator earn for work involving comparable skills and experience, industry officials say.

"While it is true that things can be improved, we cannot and should not compare the salary aspects with the private sector. People join government services for various reasons. The critical criterion is to have a feeling of public service," Nirpendra Mishra, TRAI's chairman, told the Hindustan Times. "One or two people joining the private sector from TRAI will not reduce our talent pool," he said.

After feasting on public sector telecom giants Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd, private sector hawks are preying on the regulator that had painstakingly built a team which has gained respect and recognition among peers across the world. It does not help that TRAI is also losing out some senior staff to global deputation assignments in organisations such as the World Bank. TRAI has been seeking powers similar to the Securities and Exchange Board of India (SEBI) to maintain its financial independence. It had sought a 0.05 per cent share of the revenues that telecom and TV operators generate each year to help pay its officers and staff better. The government has not moved on it for years.

Over the last few months, four senior TRAI officials have moved on or are in the process. S.N Gupta, principal advisor, fixed networks, is said to be on his way to helping UK's BT Plc in a senior position to oversee technical aspects. Praveen Sharma, joint advisor, mobile networks, joined Reliance Communications Ltd, and has since moved to Tata-run VSNL. Sunil Gupta, deputy advisor, financial analysis, is likely to join Reliance soon, say TRAI sources. D.K Gupta, joint advisor, legal, is also likely to join a private telecom operator, they said. Neither of them could be reached for comment. S.N Gupta confirmed to the Hindustan Times that he had resigned but it was not clear what he would do next.

"I cannot join any telecom operator in India but I would be an independent consultant to overseas multinational telecom companies, but it will take some months," he said.

TRAI officials said their pay-packets are small, with no housing leases from the employer. They even have to vacate government accommodation if they join the regulator. Besides, perquisites like transport allowances were withdrawn after October 2003, when TRAI's employees were declared to be of the same status as their central government counterparts.


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## Contrarian

*TRAI favours regulation in domestic bandwidth market*

After regulating the international bandwidth prices, telecom regulator TRAI is understood to be in favour of tariff regulation in the domestic bandwidth market to remove bottlenecks for effective competition in the segment.

Bandwidth is the medium of carriage of data and voice services across countries in the world (IPLC) or across the country (Domestic Leased Circuit).

It is appropriate to continue with the tariff regulation in the DLC market until such time the competition becomes adequate and effective. The long-term goal of the Authority is to establish effective competition in the sector such that regulation of tariff may not be required, a TRAI official said.

There are evidences of lack of competition in the 'local lead' (last mile access) within city circuit segment.

The non-availability of local leads, which has been represented by various stakeholders/service providers, appears to be the main bottleneck for promotion of competition in DLC market, the official said.


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## Contrarian

*Indian IT firm launches product in UK
*
Zensar Technologies, an Indian IT and BPO major with an office in Slough, Berkshire, has launched its Global Delivery Platform (GDP) to support businesses looking to design, develop, implement and maintain business applications.

The GDP was a unique way of designing and implementing business processes, which will radically change existing consultancy methods, accumulate knowledge in-house and reduce time-to-market for new application implementation.

The statement said that GDP will be rolled out to academic institutions, software entrepreneurs and major clients worldwide in stages. As part of British GDP academic initiative, Zensar has teamed up with the School of Entrepreneurship and Business (SEB) at the University of Essex, where a Centre of Excellence, with 20 seats to start with, is being set up to utilise the GDP.

A stream of students will learn to use the system as part of their studies and will take the knowledge with them out into the business world. As part of the programme with SEB, Zensar will be sponsoring PhD research studentship on technology-based entrepreneurship over a period of three years at the SEB, University of Essex.

Jay Mitra, Head of SEB at the University of Essex, said, "This unique transnational initiative combining technology and entrepreneurship is at the heart of new ways of thinking around constellations of excellence building relationships and working together for sustainable economic growth through learning and doing. We hope this new venture will be a beacon for innovative forms of learning in both industry and academia."

"Today's long-winded application development takes up to a year to deliver a solution and involves major expense and time commitment on the part of the customer and massive consultancy fees to go along with it," said Ganesh Natarajan, Deputy Chairman and Managing Director of Zensar.

"We chose the UK for the initial launch because we see major demand and potential here, in this fiercely competitive market," he said.

Zensar recently opened its new European headquarters in Slough. It employs over 3,400 people globally with nearly 200 people based in Britain and Europe. The release said that it had a 'robust customer base', and had formed strong partnerships with Fujitsu, Sun Microsystems and Oracle. Its customers include Marks & Spencer, National Grid, Cisco Systems, and Electronic Arts.

The major elements of GDP are: identifying and laying down the business process, designing the platform agnostic solution, manufacturing the application, and testing and enabling the users to manage the entire solution-building process in a collaborative manner.

It has been designed to enable people collaborating on the solution to be based anywhere in the world, and bringing together the best skills wherever they may be, a company press release said.

"GDP puts the power and control back into the hands of the customer and enables them to introduce their solutions to the market much more quickly, while also retaining the expert knowledge of their business within their company. This is a major leap forward in business process automation.

The statement added that Zensar's GDP was the realisation of a wider concept called Global-On-Demand (GOD), which enabled collaboration of a company's business and technology team seamlessly in a secure, monitored environment to achieve distributed design, project management using a common set of tools, techniques and process to define and deliver world-class solution from wherever they are in the world.

"One of the problems of the business world has always been the need to 'hand over' the development process to highly technical people - usually external consultants - who go away and develop a solution," explained Dilip Ittyera, Chief Architect and Evangelist of the Zensar GDP initiative.

"What we are talking about here is a truly disruptive development process. It is a paradigm shift from conventional outsourcing practices to collaborative global sourcing using the best-in-class capabilities," he said.


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## Contrarian

*Jet gets security clearance, can fly to US*

et Airways may finally get to fly to the US. The US Department of Transportation is understood to have given a security clearance to Jet Airways, paving the way for the Indian carrier to launch flights to the US. Jet Airways, however, refused to comment on the matter and maintained it was yet to receive any official communication from Washington.

In February 2005, the Indian government had granted approval to the Naresh Goyal-promoted carrier to fly three times a week to New York via Brussles. But allegations by a US namesake that the airline had links with terrorist masterminds like Dawood Ibrahim and outfits such as Al-Qaeda had put the brakes on the Indian carrier's American plans.

"The Department of Transportation has given the economic authority to Jet Airways. This means that the airline has been cleared to fly to the US after it works out the operational details like flight timings, schedules, slots and other issues," the PTI quoted a US Embassy spokesperson as saying. The spokesperson added that this was the "first tangible benefit" coming out of the 'Open Sky' agreement between Delhi and Washington.

The security clearance follows a green signal from the US State Department, which probed the US-based company's complaint.

On Monday, Civil Aviation Minister Praful Patel had said that procedures had to be followed.

"Issues are being resolved between the governments," he said.

Jet Airways is expecting the delivery of Boeing 777-300s in April next year. The airline has signed an agreement with Boeing for acquiring 10 777-300s and with Airbus Industrie for an equal number of A330-200s.

Recently, Jet Airways sought the Civil Aviation Ministry's clearance to fly to New York and San Francisco from the summer of 2007. It also asked for permission to fly to Toronto, via Hong Kong and via Dusseldorf, from next year, and to China.

Other destinations it plans to fly to in the near future are South Africa, Kenya, Mauritius, Rome, Zurich, Munich and Frankfurt.

(With PTI inputs)


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## Contrarian

*India, US sign pact to boost aviation ties*

The Federal Aviation Authority (FAA) of the United States and the ministry of civil aviation signed a memorandum of agreement (MoA) on Monday paving the way for technical assistance from US on a host of aviation related matters. But officials said the pact did not cover security aspects, and mainly concerned logistics and administration.

The cabinet had approved the signing of this agreement in May this year. "The agreement provides for assistance by the FAA to the civil aviation sector in India in developing and modernising the civil aviation infrastructure in the managerial, operational and technical areas," said a civil aviation ministry statement.

Besides technical and managerial expertise, the FAA will provide training for Indian civil aviation personnel. It will also provide assistance in inspection and calibration of civil aviation equipment and air navigation facility in India.

FAA administrator Marlon Blakey said that the MoA is "not really a security agreement. It is a bilateral aviation safety agreement".

The MoA is an umbrella agreement and would have many subordinate agreements as and when signed with different agencies such as the Directorate General of Civil Aviation (DGCA), the Airports Authority of India (AAI) and Hindustan Aeronautics Limited (HAL).

"The agreement is in the nature of a framework agreement, which would create enabling provisions for seeking specific assistance from the FAA. All assistance under this agreement will be on the basis of reimbursement of costs," the statement said.

Civil aviation minister Praful Patel said that India would receive guidance and expertise of the FAA which would be helpful to manage the volume of aviation traffic in the coming years.


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## Contrarian

*India-Pak trade can cross $6 billion: Report*

Trade between India and Pakistan can increase to a phenomenal level of 6.6 billion dollars if barriers are removed and the neighbouring country implements the South Asia Free Trade Area (SAFTA) agreement, an ICRIER report has said.

India's exports increased by 157 per cent to 428.1 million dollars and imports by 143 per cent to 82.1 million dollars in the first quarter of 2006-07 as against the corresponding period last year, according to official figures.

"Trade between the two nations is very small as compared to trade between India and its other large partners in South Asia," Indian Council for Research on International Economic Relations said in a report on 'India-Pakistan trade'.

On the other hand, informal trade through a third country is estimated to be in the range of two billion dollars, the report said.

"With several regions integrating further through the Free Trade Agreements (FTAs), it is imperative for the South Asian countries to enhance the pace of their liberalisation," it added.

In a larger context, South Asia is the least integrated region compared to other regions, namely East Asia, Europe and Central Asia, Latin America, Middle East, North Africa and Sub-Sahara Africa.

Regional liberalisation within Asia indicates that SAFTA would ultimately lead to integration with a larger community within the continent through BIMSTEC and ASEAN, the paper said. However, success of SAFTA in turn would depend on trade relations between India and Pakistan.


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## Contrarian

*Birla to enter domestic retail sector*

Close on the heels of the Bharti Group and Reliance, who have announced big plans to set up their retail ventures, Aditya Birla group, one of the top three industrial houses in the country, is also concretising its plans to enter the domestic retail sector.

After months of deliberation, the metals powerhouse has started hiring people for its retail business.

The groupÃ¢â¬â¢s retail venture would be in hypermarkets or large discount stores, sources said. These are different from departmental stores. ShopperÃ¢â¬â¢s Stop follows the departmental store model, while Big Bazaar is the closest approximation to hypermarkets in the country today.

The company has roped in Suman Sinha, the son of former finance minister Jaswant Sinha, to head its retail venture.

People to be hired include sourcing and merchandising professionals, quality control people, experts in supply chain, store design and business development.

The company, which currently employs over 82,000 people, expects to ramp up its employee base significantly through the exercise, sources said.

Incidentally, the retail space in the country is set for a churn with Sunil Mittal-controlled Bharti and Mukesh AmbaniÃ¢â¬â¢s Reliance getting into the race to capture the burgeoning pockets of the Indian middle class.

The reason for the interest by big houses is essentially the highly fragmented nature of the Indian retail segment. Only 3 per cent of Indian retail, which is estimated to be $300 billion, is organised, the rest being small and medium retailers. Large players include Kishore BiyaniÃ¢â¬â¢s Pantaloon and Tata Group-owned Trent, which owns Westside.

Tatas have recently inked a venture with Woolworths of Australia, and are planning to launch a chain of consumer durable stores to be called Croma.

Bharti would be setting up a joint venture with Wal-Mart, the worldÃ¢â¬â¢s largest retailer, and the number two company on the Fortune 500 list of companies. The entry of Wal-Mart is expected widely to be a seal of approval for the Indian retail industry.

That the Aditya Birla Group is planning to take retail to be a major part of its operations in the country is evident in the scale of hiring. This would include cash and carry and back-end operations, contrary to BhartiÃ¢â¬â¢s model, where only the backend will be handled by Wal-Mart, with Bharti owning the stores and the front end.

There has been widespread debate over the entry of multinational corporations in the retail segment, the latest being the Left parties threatening agitations on Monday in a note to the United Progressive Alliance.


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## Contrarian

Oil cartel robbing India's GDP: Chidambaram

Finance Minister Palaniappan Chidambaram has accused the oil producing countries' cartel for robbing India of one per cent GDP growth by resorting to speculation and unjustifiably increasing crude prices. The price has crossed $70 (Rs 3150) per barrel a few months back.

Participating in a plenary panel discussion at the annual India Economic Summit, organised by the World Economic Forum (WEF) and the CII, which opened on Sunday, Chidambaram called upon developed countries like European Union bloc and the United States to take a stand against the 'exploitation unleashed by oil-producing countries'. 

Citing the 8-9 per cent annual increase in crude consumption, Chidambaram proposed a price band for crude between $40-50 per barrel.

Chidambaram said that both oil producing and oil consuming countries should mutually determine the price band.

He pointed out that the Russian budget had been prepared with the assumption that oil prices would be $45 per barrel. "When the prices topped $70 per barrel, they (Russians) made a killing," said Chidambaram.

Chidambaram noted that in India the government has to divert a large chunk of its development revenues to foot the bloated oil import bill.

He said the government issued oil bonds which was "unfair on future generations". Oil bonds would ensure staggered payment to oil companies that are importing crude. Over 70 per cent of India's crude requirements are met through imports.

He disagreed with Infosys CEO Nandan Nilkeni and CII President R Seshasayee that the volatility in crude prices was 'purely due to the demand - supply gap'. The Finance Minister attributed the rise in crude prices from $55 to 78 to 'pure speculation'.

"Better sense should prevail on the oil producing countries," he said. They should stop this speculation and increase in crude prices thereby hurting the development agenda of developing countries like India.

He cautioned that if such speculation continued, the millennium development goals - mitigation of poverty -- set by United Nations could not be met by developing countries.

While UAE-based Chairman of Emaar Properties Mohamed A Alabbar skirted the crude pricing issue, US-based Chairman of CH2M HILL Companies Ralph R Peterson conceded, "There is an exploitation going on".

Even on issues like emission of green house gases, Chidambaram took a hard line against the developed countries. He was unwilling to accept the argument that poorer countries contributed to larger green house gas emission. "If energy consumption is lower then the green house gases emission would also be lower," Chidambaram said.

He asked developed countries to provide resources and clean coal technologies to countries like India and financial support to African countries. "We do not need money. They (EU and US) should provide access to resources and technologies," Chidambaram said.

Chidambaram also set aside the argument that China and India were primarily responsible for green house gas emission.

Earlier, making his initial presentation on "India in a World at Risk", Chidambaram identified water as the biggest challenge. Comprehensive policy framework coupled with desalination, water recycling, conservation and right pricing was recommended by the panelists.

Finance Minister also stated that economic growth should be made inclusive so that anti-globalisation sentiments do not result in protectionism. Chidambaram said that in democratic polity, young generation was driving greater liberalisation.


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## Adux

Neo said:


> Good post Malay!
> 
> Imho Bangaluru has the best airport in the country at this moment and soon it will become an international hub connecting Australia with Europe and North America.
> Did you know that Bill Gates Microsoft specially asked US DoT to gain landingrights for North West Airlines between Seattle and Bangaluru via Amsterdam?
> Unfortunately the service after three flights already due logistical and security concerns.
> Northwest's alliance partner KLM came with thrice a week service between Amsterdam and Hyderabad instead linking it to 20 major cities in the US.
> 
> 
> 
> Yes, this is a very disappointing development, one that should ring bells in New Delhi.
> Despite heavy growth in manufacturing sectgor, India basically relies on agro-economy. Over 65% of the total population is concentrated in rural area's, including over 60% of the laborforce. This is one part of the huge population which will not gain the status of middle class income in a long time to come unless revolutionary steps are taken.
> 
> Misery among the poor of the rural area's is heartbreaking, there's killing among poor indebted farmers, people sell their children to save them from starvation!!
> 
> Earlier this year Delhi announed a reflief package for the poorest, a disappointing amount of $800 million, i.e. 0.01% of the GDP.
> The help is to reach farmers as soft loans and thru bank accounts only to avoid mismanagement and corruption.
> Unfortunately 90% of the farmers don't even have a bank account and rely on traditional private loans from landlords, money brokers and family which often results in losing their land as unpaid depth.
> 
> Tell me why Delhi is reluctant to do more for the green sector?



Neo bangalore has one of the worst airports in the country, but they are [plannin to improve it, and also along with that a new one is being built.

Adu


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## Neo

I'm talking about the new one Aduz, saw a 3D interactive CGI demo of the terminal, quite impressive.

I'll post the link here if I can find it.

Malay, I'll reply you later.

Neo


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## Neo

*India reports highest salary hikes in Asia *

NEW DELHI: Salaries in India rose faster than any other major country in Asia this year, even as companies across the region remain under pressure to retain talent and spend more to compensate employees, a global resource company has said.

An annual survey by Hewitt Associates revealed that salaries in India rose an average 13.8 per cent in 2006, with midlevel technical employees and supervisors getting the biggest hikes, the company said in a statement on Thursday.

The momentum will likely continue through next year, it said. The survey covered workers 169 companies in India.

In all of Asia, the company collected information from 1,357 companies. It wasnÃ¢â¬â¢t clear if survey also considered wages paid to manual workers in many countries.

The Philippines came second with average salary increase of 8.2 per cent, while in China, salaries rose 8 per cent, slower than last yearÃ¢â¬â¢s 8.3 per cent.

The survey measured actual and projected salary increases, and compensation practices for five specific job categories _ executives, managers, midlevel staff, clerks and manual workers.

Thailand and Malaysia saw salary hikes of 6.5 per cent and 6.2 per cent respectively, higher than last year. In Singapore, employees were paid 4.6 per cent more in 2006, up from 3.9 per cent a year ago.

Australia, South Korea and Hong Kong reported modest raises.

Ã¢â¬ÅOrganisations are being driven to increase their spend on compensation as a result of the ongoing attraction and retention challenges we are facing in Asia,Ã¢â¬Â Nishchae Suri, head of HewittÃ¢â¬â¢s Talent and Organisation Consulting Analytics practice in Asia.

Ã¢â¬ÅMany companies are reassessing their personnel strategies and broader business goals to ensure they are getting the most out of their talent and increasing productivity,Ã¢â¬Â Suri said.

With the pressure to retain key talent growing, an increasing number of organisations are ensuring their pay is competitive by closely monitoring market movements.

The survey included the following markets: Australia, China, Hong Kong, India, Japan, South Korea, Macau, Malaysia, the Philippines, Singapore, Taiwan, and Thailand.

http://www.thenews.com.pk/daily_detail.asp?id=34003


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## MIG_ACE

Neo said:


> I'm talking about the new one Aduz, saw a 3D interactive CGI demo of the terminal, quite impressive.
> 
> I'll post the link here if I can find it.
> 
> Malay, I'll reply you later.
> 
> Neo


All current airports in the country are pathetic compared to western ones. But they are upgrading many airports currently and building new ones too.Mumbai will have two airports in the future.


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## Neo

Tuesday, 5 December 2006 

*India's Sensex hits record high * 

India's main stock index, the Sensex, has touched a record high on the back of a growing economy. 
Bombay's benchmark Sensex index jumped to 14,028.47 points when trading began on Tuesday, topping a previous peak set in November. 

India's economy has beaten expectations by growing at an annualised rate of 9.2% during July to September. 

The Sensex's recovery marks a change in fortunes for the exchange, which plunged in value earlier this year. 

In later trading, however, the Sensex dropped below the 14,000 mark again, closing 63.32 points, or 0.5%, higher at 13,937.65. 

Market analyst Rahul Rege said the rising stock index was the result of strong economic fundamentals and more players investing their money in the market. 

"Lot of money has flowed in from foreign investors in the last three months..the investor base has widened tremendously, economic growth numbers are positive and corporates have registered good results," he said. 

This year, foreign institutional investors pumped nearly $9bn into India. 

Asia's fourth-largest economy has grown at an average of 8% in the last three years. But critics say the benefits have not reached the poor fast enough. 

http://news.bbc.co.uk/2/hi/business/6208740.stm


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## Bull

MIG_ACE said:


> All current airports in the country are pathetic compared to western ones. But they are upgrading many airports currently and building new ones too.Mumbai will have two airports in the future.



They are not upgrading it, they are thinking about upgrading it,nothing has started yet.

Well Mumbai is a masterpiece,please everybody to visit it before we built a new one.Its worth it..


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## sajan

Bull said:


> They are not upgrading it, they are thinking about upgrading it,nothing has started yet.
> 
> Well Mumbai is a masterpiece,please everybody to visit it before we built a new one.Its worth it..



Well have u visited the new international airport at kochin. Its really a wonderful and beautiful airport in India at present. Its having world class facilities, its the first private(NRI's) and biggest airport in India and the biggest duty free shop in India. Just vist it..!


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## Neo

sajan said:


> Well have u visited the new international airport at kochin. Its really a wonderful and beautiful airport in India at present. Its having world class facilities, its the first private(NRI's) and biggest airport in India and the biggest duty free shop in India. Just vist it..!



Welcome aboard Sajan.
Please introduce yourself in the intro section so we can give you a proper welcome to :pff: 

Enjoy!


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## Neo

Thursday, 7 December 2006 

*Airbus to tap into Indian market * 

Airbus predicts the Indian market will soar in coming years 
Airbus is to take advantage of India's rapidly expanding aviation market by investing heavily over the next decade. 
Its plans involve setting up a training school for pilots and an engineering centre, both of which will be based in India's hi-tech centre, Bangalore. 

The news came as Airbus forecast that India would see passenger numbers surge by 7.7% to 2025 - the biggest expansion worldwide, outstripping China. 

Airbus predicted India would need 1,100 planes worth $105bn by 2025. 

The majority of these - 935 - will be for passengers, while the remaining 165 will be for cargo. 

*'Strong demand' *

Reports put the Airbus investment figure at $1bn (ÃÂ£508m; 752m euros) over 10 years, including $300m for the pilot centre and $250m for an engineering centre. 

"Strong demand in India is being unleashed by air transport deregulation, the emergence of a number of new operators, lower fares and a large untapped demand for air travel," Airbus chief operating officer John Leahy told the AFP news agency. 

The 7.7% growth in Indian passenger numbers predicted by Airbus is well above the world average of 4.8% and just above China's 7.2% forecast growth. 

More than half of the planes in India are currently run by Airbus, the firm said. 

The firm's plans in India come after news that it has won a multi-billion dollar deal in China for 150 of its A320 plans, including some to be assembled in China. 

Airbus has been developing its A380 aircraft as a rival to Boeing's 747 jumbo plane. 

But the programme has been fraught with difficulties and delays have caused some major airlines to cancel or renegotiate orders. 

http://news.bbc.co.uk/2/hi/business/6216688.stm


----------



## Contrarian

*PM seeks states' support for higher growth*

NEW DELHI: Prime Minister Manmohan Singh on Saturday sought states support for 'difficult' policy changes for attaining ambitious albeit feasible nine per cent growth during the 11th plan, saying agriculture sector was in crisis and there were 'major constraints' on the infrastructure front.

"There are major constraints we have to overcome, many of which require difficult policy changes by the Central and state government," Singh said inaugurating the 52nd meeting of the National Development Council for approval of the Draft Approach Paper to the Eleventh Plan.

Lauding the performance of the economy during the 10th plan, where growth in the last four years, would be over 8 per cent taking India firmly among front ranks of fast growing developing countries, Singh said, "the world has a very favourable assessment of our prospects and this is reflected in the fact that FDI flows are buoyant."

Admitting that inflation had presented a problem, he said, "We are determined to control it within the 5 per cent level", and added that "the Plan must give top priority to redressing the weaknesses in the agriculture sector. We cannot expect inclusive growth if we do not revitalise agriculture."

"Agriculture as a whole is in crisis", Singh said pointing out that growth in the agriculture sector, on which half of the rural population is dependent, has been less than 2 per cent per annum since the middle of the 1990s.

Detailing the road map for the average annual nine per cent growth during 2007-12, Singh said, private sector investment would have to be stepped up for infrastructure sector, which the approach paper has identified as a "major constraint" on achieving the double digit growth.

Stating that roads, railways, ports and airports and the power sector all needed massive expansion and quality improvement, the Prime Minister said, "investment requirement of such expansion are massive and cannot be met from the public sector alone".

He pointed out that public private participation "cannot be a solution if the power sector is financially unviable", and added that the public investment would be used to develop infrastructure in areas where the private sector is reluctant to enter.

"Much of the investment needed for rapid growth will come from the private sector and this calls for maintenance of a sound macro economic framework, an investor friendly environment and a strong and innovative financial sector capable of responding to the needs of new entrepreneurs."


----------



## Contrarian

*GSM subscriber base scales 100-mn mark*

NEW DELHI: The total GSM subscriber base in India has crossed the 100 million mark with the addition of 5 million new subscribers in November 2006.

The performance in November surpasses the 4.7 million new subscribers added in October. According to COAI, this places India in the super-elite club of countries boasting of over 100 million GSM subscribers well ahead of expectations.

In terms of the global GSM subscriber base this now places India third after China and Russia. China had 401.7 million GSM subscribers in November 06, Russia 152.2 million and India 100.7 million.

TV Ramachandran, director general, COAI said, GSM has been the primary engine of growth in telecom in India and will continue to be the major contributor to the growth in tele-density in the coming years as well.

He added that the sharp spurt in overall mobile growth was due to forward looking policies of the ministry and enabling regulation.

Among all circles, Category C circles witnessed the highest rate of growth at 6.9%, followed by Category B circles at 6.1%.

Within the Category C circles, the highest growth was recorded by Bihar at 8.5% followed by Assam at 8.4%. Within the Category B circles, Haryana and Madhya Pradesh recorded the highest growth at 9.6% and 6.9% respectively.

Category A circles also witnessed a healthy growth of 5.4% in Nov. 06. AP recorded the highest growth of 6.6% followed by Gujarat at 6.2%.

Metro subscribers also grew by 2.6% over the previous month. Mumbai recorded the highest growth at (4.1%) followed by Delhi (2.9%).


----------



## Contrarian

*Prices of essential drugs may come down*

NEW DELHI: With the industry not responding to "voluntary" margin cuts on medicines, the government is once again considering to impose price control on essential drugs.

If the proposal put forward by the National Pharmaceutical Pricing Authority (NPPA) goes through, prices of 354 drugs may come down by around 10-12%.

At present, 74 drugs are under price control. NPPA, which monitors and fixes drug prices, has suggested that prices of 354 drugs covered under the National List of Essential Medicines (NLEM) should be rolled back to the price prevailing six months ago, and cut by a further 10%.

The prices are then proposed to be frozen for a year, and can be increased only with the NPPA approval, sources said.

NLEM includes 354 popular medicines and covers 27 therapeutic segments including drugs such as Paracetamol, Penicillin, Amoxicillin, Ampicillin, Diazepam, Ibuprofen, Quinine, Omeprazol, Decolofen, Calcium and Folic Acid.

NPPA also wants to tighten control over the industry. It has suggested that the industry be allowed a price increase of 7% in a year, and 15% in a three-year period.

At present, prices of control-free (non-scheduled) drugs are allowed to rise by 20% during a 12-month period, and 60% in three years.

NPPA has also said that prices of drugs, which are present in combinations with NLEM medicines, should be allowed to rise by 4% a year and 10% in three years.

In September, the industry had agreed to a proposal to cap margins on 'generic generic' medicines Ã¢â¬â which are off patent drugs sold without brand names Ã¢â¬â and would have resulted in a 70% reduction in prices.

But companies did a volte face and sections of the industry did not implement it, despite government reminders.

The new proposal would have an impact of reducing prices by 10-12% of drugs under the NLEM that includes over 7,000 packs covering all segments.

The pharma industry has suggested it was comfortable with a 5% reduction on drugs under NLEM.


----------



## Contrarian

*ICICI Bank may buy Sangli Bank*

NEW DELHI/MUMBAI: India's largest private sector bank, ICICI Bank Ltd on Friday said it will consider the acquisition of Sangli Bank Ltd as part of efforts to enhance its rural branch network.

In a communique to BSE, ICICI Bank said the bank in its board meeting on Saturday will consider the amalgamation of Sangli Bank Ltd with itself.

This is the second bid by ICICI Bank this year after its failed attempt to acquire Satara-based United Western Bank, which was later merged with IDBI Bank a few months ago.

ICICI Bank, which has recently got Reserve Bank of India's approval to open new branches, expects to further bolster its branch network, especially in rural areas through this amalgamation.

"ICICI Bank is expected to pay close to Rs 1 crore per rural branch and close to Rs 50 lakh for branches in remote areas. The acquirer will pay Rs 300 crore for Sangli's branch network, human resource and retail liabilities," a source said.

Sangli Bank has been under the Reserve Bank's scanner ever since its capital adequacy nose dived to 1.64% in 2005-06, well below the apex bank's stipulated 9%, sources said.

"RBI had instructed the bank to neither accept large deposits nor lend large amounts. They were also not given permission to open new branches. It's possible that RBI would have asked ICICI Bank to bail out the ailing bank ," said a banker.

ICICI Bank presently has 640 branches, while Sangli Bank has about 186 branches in seven states. ICICI's current asset size in first half of this fiscal stands at Rs 2,82,300 crore.

On the other hand, Sangli Bank earned a net loss of around Rs 32 crore in 2004-05. The bank has not submitted its 2005-06 account so far.

As on March 31, 2005, it had a net worth of Rs 85 crore. The amalgamation, if it goes through, will be in line with the bank's management philosophy of tapping the huge Indian rural market which it feels will be the growth driver for the Indian banking industry.

Industry analysts expect the merger to help the banking major meet its priority sector lending commitments.


----------



## Contrarian

*Trade war: China trounces India 4-1*

BEIJING: China has trounced India 4-1 in trade in the first 10 months of this year. It has notched up a trade surplus of $3 billion against India as compared to a trade deficit of $946 million that it suffered in the same period in 2005.

Chinese exports to India shot up 61% to reach $11.58 billion in that period. Indian exports notched a minor rise of 4.49% totalling $ 8.5 billion, according to the latest statistics released by the Chinese Customs for the January-October period.

Chinese exports have grown by close to $4 billion in October as compared to $71.97 billion till October, 2005. Beijing's impressive performance gives a lie to the repeated Chinese complaints about India blocking the entry of Chinese goods.

The latest stats show that the Chinese industry has managed to penetrate new and non-traditional areas and make a massive dent in terms of sales.

It turns out that Indian trade and industry has been far more receptive to Chinese goods rather than energetically taking up the task of selling Indian goods to China.

This despite the number of visits by Indian trade bodies to China, ostensibly to promote Indian goods. Sources here say the Indian delegates are more interested in sourcing cheap Chinese products.

A highlight of the bilateral trade is that the two countries have managed to meet the $20 billion target set for 2008 by October this year.

Bilateral trade reached $20.09 billion in October, indicating a 31% rise from $15.34 billion achieved in January-October last year.


----------



## Contrarian

*Growth leads to CRR hike*

NEW DELHI: RBI's decision was based on recent trends in growth rates, which refused to slow down despite the central bank's earlier measures, and inflationary expectations.

A senior banker said that RBI also took the decision based on recent data which put economic growth in the second quarter at 9.2%.

At the same time, credit offtake till November has grown by around 30% on top of an increase of 31.1% a year ago. But, the deposits have not shown similar growth, this has led to tightening of liquidity in the money market.

A banker said, the increase in CRR would further worsen the situation and interest rates are likely to go up by 0.5% across the board.

In a statement, the central bank said the decision to increase the CRR was taken to contain inflationary expectations in the current environment and consolidating gains achieved so far.

The central bank said the objective is to continue to maintain conditions of stability that contribute to sustaining the momentum of growth on an enduring basis. RBI was also worried at rise in the inflation.

As on November 25, 2006 , whole sale price index has gone up t to 5.3% as against 4.5%. But even more worrisome was the rise in the consumer price index which has gone up to over 7% as against around 4% during the same period last year.

The Reserve Bank in the statement also pointed that in its Industrial Outlook, a majority of respondents from private sector expect higher increase in prices.

The banker said that this also forced the bank to take prompt measure to contain inflation even at the cost of affecting economic growth.

The increase in the cash reserve ratio will be effected in two phases by 25 basis points on December 23, 2006 and January 6, 2007.


----------



## Contrarian

*Govt asks Parliament for additional Rs 22k crore*

NEW DELHI: The government on Friday sought parliamentary sanction for additional spending of Rs 21,823.92 crore, which will result in a net cash outgo of Rs 11,444.76 crore.

A significant part of the additional fund requirement is to go towards paying higher subsidies for cooking gas, kerosene and fertiliser.

The government already has parliamentary sanction to issue oil bonds worth Rs 14,000 crore to oil companies to sell cooking gas and kerosene below the prevailing international price.

Now, nod has been sought to issue additional bonds worth Rs 5,000 crore. With the latest proposal, the extent of oil bonds that would be issued to the oil marketing companies would go up to Rs 19,000 crore against the cabinet's approval for Rs 28,000 crore this year.

So far, only one trance of oil bonds worth Rs 7,000 crore have been issued to oil marketing companies Ã¢â¬â IndianOil, Hindustan Petroleum and Bharat Petroleum.

The finance ministry has also sought permission to provide additional Rs 3,700 crore subsidy to fertiliser companies importing or selling urea and nitrogenous fertiliser.

Another Rs 3,856 crore is proposed to be spent on writing off loans to states. The second batch of supplementary demand for grants tabled in Parliament on Friday has said that gross additional expenditure was estimated at Rs 10,378.64 crore.


----------



## Contrarian

*Vedanta project under fresh scrutiny*

NEW DELHI: The Rs 4,000 crore bauxite and alumina refinery project of Vedanta Aluminium, a unit of London-listed Vedanta Resources, will now face scrutiny by the central empowered committee (CEC) and forest advisory committee (FAC) under the environment law.

This was ordered by the Supreme Court on Friday after the Forest Bench comprising Chief Justice Y K Sabharwal and Justices Arijit Pasayat and R V Raveendran took into account the strong opposition to the project by CEC on the ground that it will harm the ecology of the forest area in southern Orissa.

The court accepted Solicitor General G E Vahanvati's suggestion on behalf of the Centre that CEC could give its objections to the technical committee report clearing the project and the same would be placed for consideration of the FAC, which is likely to be constituted by December 15.

The technical committee had given its clearance after the Wildlife Institute of India (WII) in its impact assessment report had cleared the project to be located at Lanjigarh.

In its report to ministry of environment and forests, WII had green signalled the project but with advisories ranging from taking care of the elephant habitat to managing the natural springs and tribal life.

However, CEC, which was opposed to it right from the very beginning, maintained that the project would be harmful for the environment.


----------



## Contrarian

*Tighter Sebi scrutiny for firms facing enquiry*

MUMBAI: Market regulator Sebi on Friday said it would hold back its final observations on the offer documents for 45 or 90 days in case an enquiry, prosecution or a regulatory action is pending against a company seeking to raise funds from the capital markets.

The firms tapping capital markets can do so only after they get Sebi's final observation on offer document.

Though Sebi maintained that no person is presumed guilty unless proved so, it was in the interest of the investors to impose restraints on companies, which are facing investigation, adjudication or prosecution.

In case the entity is issued a show cause notice, Sebi would keep its final observations on the company's offer document in abeyance for 90 days.

After 90 days, the watchdog will go ahead with final observations on offer document in case the action-taking authority does not pass any interim or final order in the matter, a Sebi statement stated.

Observations on the draft offer document would be suspended for 45 days if the appropriate authority has found probable cause for enquiry or prosecution on the entity aspiring to tap capital markets.

If the respective authority, after ascertaining the cause for enquiry, issues a show cause notice to the entity, Sebi would extend its final observations after a period of 90 days.

"It is in the interest of the investors and the market that some reasonable restrictions be imposed when any form of investigation, enquiry, adjudication or prosecution has been initiated against the entities," Sebi said.


----------



## Contrarian

*Oracle ups bid for India's I-flex, shares soar*

MUMBAI/SAN FRANCISCO: Oracle boosted its offer for Indian banking software provider i-flex Solutions to $1.3 billion, driving up i-flex shares 17% to a record high.

Oracle, the world's biggest maker of database software, said it wanted to take its stake in i-flex to 90% and raised the price it is willing to pay to Rs 2,100 per share, up 42% from Rs 1,475 previously.

The revised offer, which Oracle said was final, represented a 20% premium to i-flex's closing price on Thursday. It values i-flex at 49 times forecast earnings, versus a sector average of Indian application software makers of 24.

"It's difficult to say what business logic they see," said Amish Choksi, V-P of institutional equities at Edelweiss Securities in Mumbai.

"I think they have not got the kind of response they expected, which is pushing them to raise the offer price." i-flex shares traded up 16.5% at Rs 2,036 in a Mumbai market, down 0.6%. They had earlier hit a record of Rs 2,055, up 17.4%.

"The offer price is quite good to tempt any domestic shareholder," said SP Tulsian, an independent consultant. "At least now Oracle should get a positive response. Shareholders should not have any reservations when so many other good stocks are there."

Oracle already owns 55% of i-flex and in September offered to pay up to $531 million to increase its stake to 75%.

"There will not be another open offer and Oracle will not undertake a delisting for the next five years unless i-flex shares are selling at a significantly lower price than they are today," Oracle CEO Larry Ellison said.


----------



## Contrarian

*MUL to invest Rs 9,000 cr for upgradation*

CHENNAI: Maruti Udyog (MUL) is drawing an ambitious investment plan to upgrade its capacities. The capex programme will require Rs 9,000 crore by 2010.

Jagdish Khattar, MD, MUL said, "We will invest in increasing new plant capacity, transmission and diesel plants and upgrade Gurgaon plant."

The diesel and transmission plant will consume Rs 2,500 crore, wherein the engine capacity will be increased from the present one lakh units a year to three lakh units.

The new plant in Manesar will make three lakh cars a year from the present capacity of one lakh cars. The budget for this will be Rs 2,500 crore.

The Gurgaon plant, will get a face lift, which will see Rs 4,000 crore investments. By 2010, when all these are completed, MUL will have a capacity to make a million cars a year. The company can now make six lakh cars a year.

According to auto analysts, the Indian passenger car is expected to touch two million cars a year by then. When MUL launched its new car Zen Estilo in New Delhi, there was one VIP visitor who was not noticed Ã¢â¬â CEO of Suzuki Pakistan.

"In fact, we have now been asked to assist SuzukiÃ¢â¬â¢s operation in Pakistan, Indonesia and a few Latin American markets. We have started knowledge sharing sessions with our counterparts in these countries," Khattar said.

"We are planning to double the service capacity. We have asked our production team to chalk out work-shop strategies to increase throughput at dealer workshops," he added.


----------



## Contrarian

*LSE plans to set up research centre in India
*
NEW DELHI: The London School of Economics has an India connection which is not known to many. In 1912, industrialist Sir Ratan Tata donated a huge sum of money to the LSE to fund research on the causes of poverty and ways to alleviate it.

This led to the formation of department of social sciences at LSE, which is its second-largest department today. Now, 94 years later, LSE is looking to renew its India connection this time with a research centre dedicated to the region.

The centre Ã¢â¬â India Observatory Ã¢â¬â will focus on India-specific research themes concerning economics, governance, policy and finance.

Says Sarah Worthington, deputy director, LSE, "An increasing number of researchers at LSE are working on issues related to India. Now that we have a critical mass, it made sense to have all research under one umbrella."

The centre was unveiled at LSE Asia Forum in Delhi, but it will become operational only in January 2007. India Observatory, which will operate under LSEÃ¢â¬â¢s Asia Research Centre, is being jointly funded by the RBI, SBI and LSE.

They all pitching in with $1 million each, spread over a 10-year period. The funding stands at $3 million. LSE is also exploring more funding options in the UK.

The idea came up when LSE director Howard Davies wanted to establish a chair in honour of IG Patel, former LSE director and a former RBI governor.

During the initial discussions for the IG Patel Chair, RBI governor YV Reddy came up with a suggestion for a centre for India studies, instead of just a chair.

The IG Patel Chair will now be for the director of the India Observatory. Nicholas Stern, a distinguished development economist and former chief economist of the World Bank, will be the first director of the India Observatory.

There is another reason why LSE wants to establish India Observatory. "Institutionally, we want to engage more with a region from where we have a significant proportion of our student and faculty community," says Ruth Kattumuri, head, LSE-India.

There has been a spurt in the growth of Indian and Pakistani students over the last three years, and together they account for the fourth-largest student community at LSE.

India Observatory will also facilitate partnerships with Indian institutions for joint research. Currently, they are working out one such partnership with Tata Institute for Social Sciences.

The centre will help Indian scholars to go to LSE for research for short periods of time. "We want to improve not just the quality of research, but also its dissemination. So the centre will run seminars both in India and the UK to debate issues relevant to the country," says Worthington.

Several business schools have turned the spotlight on India. Be it London Business School, Harvard Business School or Yale and Ross School of Business.


----------



## Contrarian

*India gets first chip made at home*

NEW DELHI: Communications & IT minister, Dayanidhi Maran on Friday unveiled the first 'Made in India' chip launched by STMicroelectronics NV, Europe's largest chipmaker, signalling the development as a move towards the country becoming a strong hub for electronics and semiconductor manufacturing firms.

Speaking to reporters in New Delhi at the event, the company, which has had a base in India since 1992, said it would invest up to $30 million in India and add 1,300 employees to almost double its work force to 3,000 over the next three years.

Thierry Tingaud, STMicroelectronics' corporate vice president for emerging markets, said investments would be mainly in constructions of design and development centres.

However, although the chip will be sold across the world, the company ruled out setting up a chip manufacturing facility in India in the next five years time.

"It is not on the agenda to start a new plant... Of course, we look at the possibilities (for manufacturing) in every country, but for the next five years there is no plan to have a plant in India," the company's COO, Alain Duthell said.

The Geneva-based company has three design and development centres in Noida Ã¢â¬â the company's largest design facility outside Europe Ã¢â¬â that design integrated circuits and develop software solutions for the company.

As per Maran, the Indian semiconductor industry is poised to increase to $15 billion by 2015.


----------



## Contrarian

*Indian IT firms go up on value ladder*

Indian IT firms, once purely providers of call centre services and payroll processing, are moving up the value ladder faster than anyone had expected.

Many Indian IT companies are offering product design, software design, chip engineering and the kind of corporate asset-deploying advice which was once the sole domain of Western firms like McKinsey and Booz Allen Hamilton, according to Forbes magazine.

"A lot of consulting deals won by the Indians in the last few years have really shocked the industry," said Stephanie Moore, Forrester research analyst.

More and more multinationals are relying on Indian IT firms for fundamental missions. US-based financial services major Citigroup Inc faced a major problem of complications in data processing as a result of its global expansion as it had 59 different versions of banking software across 100 countries.

Hence, it hired an Indian consultant to streamline the processes to a single version. It is estimated that the project, which has so far been implemented in 70 countries, will save the company at least $110 million a year.

Similarly, Northeast Utilities, a US-based company, consolidated three customer information systems into one and six call centres into two, a move expected to save the company $10 million in annual operations and management costs. Indians played a role here too.

American IT giants like IBM and many others who bid for such projects have lost out to Indian IT firms such as I-flex Solutions, Mphasis BFL Group, Infosys Technologies and SlashSupport, says Forbes.

Top five Indian players in consulting like Tata Consultancy Services (TCS), Infosys, Wipro, Satyam and HCL Technologies have averaged 30 percent revenue growth in this fiscal while the largest US players have averaged on meager four percent, according to Datamonitor senior analyst Patrick O'Brien.

The Indian firms view consulting work as a means to maintain their competitive edge in the face of wage inflation in India and the rise of Chinese data processing firms. The labour arbitrage is also not what it used to be.

Wages for project managers in India have increased to 23 percent per year from 2000 to 2004 while salaries for programmers have increased at a rate of 13 percent, according to the McKinsey Global Institute.

In a bid to restrict the spread of Indian IT firms, foreign players are increasingly shifting their operations to India or buying up rival companies.


----------



## Contrarian

*ADB to loan $1 bn to India for rural poor*

The Asian Development Bank is to loan India $1 billion, the largest ever advance by the bank to a developing country, to help alleviate rural poverty, the Financial Times reported on Saturday.

The development bank is expected to announce the loan on Monday amid concern that failure to broaden the base of India's blistering growth could lead to social conflict, capital flight, falling investment and an economic slowdown.

The package will be aimed at weaning the rural poor away from moneylenders by expanding access to formal finance, the newspaper said, marking a shift in emphasis towards the social sector for the ADB's Indian loans.

Until the end of 2005, nearly 90 per cent of the ADB's loans to India had been invested in infrastructure.

The funds, to be disbursed over three years and to be managed by the Finance Ministry, will boost lending by cooperative banks in five states; Andhra Pradesh, Madhya Pradesh, Maharashtra, Rajasthan and either Gujarat or Orissa.

Economists believe limited access to credit is a big factor behind slowing growth in the farm sector, which provides a livelihood for two-thirds of India's 1.1 billion population.

Reducing rural poverty has been the main policy platform of the Congress-led coalition, which returned to power in 2004 amid discontent at widening inequalities, falling rural incomes and a deepening debt crisis in the countries' 700,000 villages.


----------



## Contrarian

*All about the new look of the 'Indian office'*

Efficiency is infectious. First it was the software and IT-enabled service companies that chose to change the look and feel of the 'Indian office' by outsourcing their non-core activities. Now healthcare, real estate, airports, malls and retail stores have all jumped on the same bandwagon.

When you walk up and down the corporate corridors of Microsoft, Intel or Coca-Cola offices in Bangalore or Gurgaon, the interior and the environment are much the same as those of their offices in the United States or Europe. That is the miracle of a somewhat nascent culture of facility management in India.

With the increasing presence of multinationals and the rise of the big Indian corporates, companies are looking at not just productivity of employees but also efficient house-keeping, security, horticulture within the office premises, office automation and so on. "But the scope of facility management goes way beyond just these peripheral services. While security and house-keeping form just 10 per cent of the industry, there is a large chunk of business that entails consulting services. This includes estate management where we have to advise the clients on re-location to areas with lesser rentals or on account of ceiling," says Captain Ravee, CEO of Fireball India, one of the leaders in the business.

The niche market for facility management is estimated at about Rs 300 crore. There are international players like CB Richard Ellis, Haden, Knight Frank, Jones Lang LaSalle, Colliers, and home grow ones like Integrated Property Management Services Ltd, a Mahindra venture.

"Domestic players in the market today are moving away from piece meal contracts and looking at strategic alliances. By ensuring a conducive work environment, facility managers will play a vital role in the efficiency of any company," said Nimish Malhotra, vice president, Vipul Facility Management at a seminar on facility management organised by the CII (Northern Region) on Friday.

But the space is fraught with challenges. "Most of the international brands are present only in name as they are working through franchisee models, sub-contracting work to smaller players in India. They neither play a part in training not scaling up of the Indian sub-contractors. Thus the space is still striving to meet international standards of service," adds Ravee.


----------



## Neo

*Indians in Gulf to remit $20bn*  

DUBAI, Dec 8: Some six million Indian expatriates in the six oil-rich Gulf Arab states will send home this year around $20 billion in remittances, a United Arab Emirates official said in remarks published on Friday.

Economy Minister Sheikha Lubna al-Qassemi was speaking at a meeting of Arab and Indian businessmen in Dubai attended by India's minister of commerce and industry, Kamal Nath, the daily Emirates on Friday reported.

It quoted Nath as saying Indians' remittances from the UAE alone would reach $6 billion this year, and that India could easily get an additional $2 billion in investment from Gulf Cooperation Council (GCC) states.

India needs as much as $150 billion in foreign direct investment in the next seven to eight years, while the UAE and other Gulf states are looking at lucrative places to invest in, Qassemi told the gathering.

India, which gets most of its oil from the Gulf, is negotiating a free trade agreement with GCC members Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE.

GCC Secretary General Abdul Rahman al-Attiyah said in March that a free trade pact would boost the volume of trade between the two sides from an estimated $12.8 billion in 2005 to $15 billion in coming years. 

http://www.dawn.com/2006/12/09/ebr10.htm


----------



## Neo

*India sees FTA with Gulf Arab nations by end Ã¢â¬â¢07 *

DUBAI: India expects to sign a free trade deal with Gulf Arab nations by the end of 2007, Indian Minister of Commerce and Industry Kamal Nath said in published remarks on Friday. 

He said India, which is negotiating a free-trade agreement (FTA) with the six-member Gulf Cooperation Council (GCC), was keen on attracting Arab investment especially from the rich, oil-producing region flush with funds from high oil prices. 

Ã¢â¬ÅI think we should try and have it (FTA) by the end of 2007. ThatÃ¢â¬â¢s what we are targeting,Ã¢â¬Â Gulf News quoted Nath as saying. He added that a meeting between India and the GCC would be held in March or April to discuss details of the planned agreement. 

While the GCC Saudi Arabia, United Arab Emirates, Kuwait, Bahrain, Qatar and Oman is IndiaÃ¢â¬â¢s third-largest trading partner, the members are not large investors in the country. 

Nath said India needs to spend $400 billion in the next five years on building infrastructure to keep pace with a fast-growing economy. 

Ã¢â¬ÅThere is very little investment in IndiaÃ¢â¬â¢s urban infrastructure even to sustain our levels of growth now,Ã¢â¬Â he said. Ã¢â¬ÅI think we should easily be able to secure $2 billion additional investment in the next three years from the GCC,Ã¢â¬Â he said, adding that Dubai real estate developer Emaar Properties has so far invested $600 million in its Indian projects.

http://www.thenews.com.pk/daily_detail.asp?id=34854


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## Neo

Sunday, December 10, 2006 

*ADB to loan $1 billion to India for rural poor: report*

SINGAPORE: The Asian Development Bank is to loan India $1 billion, the largest ever advance by the bank to a developing country, to help alleviate rural poverty, the Financial Times newspaper reported on Saturday. 

The development bank is expected to announce the loan on Monday amid concern that failure to broaden the base of IndiaÃ¢â¬â¢s blistering growth could lead to social conflict, capital flight, falling investment and an economic slowdown. 

The package will be aimed at weaning the rural poor away from moneylenders by expanding access to formal finance, the newspaper said, marking a shift in emphasis towards the social sector for the ADBÃ¢â¬â¢s Indian loans. 

Until the end of 2005, nearly 90 percent of the ADBÃ¢â¬â¢s loans to India had been invested in infrastructure. 

The funds, to be disbursed over three years and to be managed by the finance ministry, will boost lending by cooperative banks in five states; Andhra Pradesh, Madhya Pradesh, Maharashtra, Rajasthan and either Gujarat or Orissa. 

Economists believe limited access to credit is a big factor behind slowing growth in the farm sector, which provides a livelihood for two-thirds of IndiaÃ¢â¬â¢s 1.1 billion population. 

Reducing rural poverty has been the main policy platform of the Congress-led coalition, which returned to power in 2004 amid discontent at widening inequalities, falling rural incomes and a deepening debt crisis in the countriesÃ¢â¬â¢ 700,000 villages.


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## Contrarian

*Reliance brokerage suspended by Sebi
*
MUMBAI: Market regulator Sebi on Monday suspended Anil Dhirubhai Ambani group's brokerage firm, Reliance Shares and Stock Broking Pvt (RSSB), for four months due to violations of fair business practices on as many as 13 counts. Sebi said in an order passed on Monday that RSSB's registration would be suspended for four months with effect from January 1, 2007.

According to the order, RSSB has committed "some serious violations like artificial pricing of trades, omission in mentioning relevant entries in contract notes, conversion of own trades to client trades, omission in mentioning of client ID for execution of trades, consolidation of client orders and unfair trade practices in violation of laws."

"Artificial pricing of trades, for example, has destroyed the sanctity of contract notes, prime evidence of transactions in the secondary market, it said. Besides, omission of most relevant entries in the contract notes defies the purpose of stock exchange trading wherein price of the scrip is determined by market forces," the order said.

"This kind of unfair trade practices cannot be in normal course viewed with any leniency where a stock broker took over the role of a stock exchange in determining the price of a scrip," it added.

Reacting to the order, a RSSB spokesperson said the action relates to alleged procedural defects in the period 1999-2000, when RSSB was part of the combined Reliance group. "RSSB will be filing an appeal before the Securities Appellate Tribunal, challenging the order, and seeking a stay thereof. RSSB now has an insignificant volume of business transactions, and there are no plans to expand the same," the RSSB spokesperson said. He added that this order will not impact Reliance Capital's business since the latter is a separate company under seperate licence.

Sebi said the penalty was reduced from nine months previously, as some violations were technical in nature while some of them have been rectified.

The regulator had ordered an inquiry into the books of accounts, documents and other records of the brokerage firm for transactions conducted on the BSE between April 3, 1999 and November 26, 2000.


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## Contrarian

*Ansal strikes 2500 acre deal for UP township*

MUMBAI: Ansal Properties & Infrastructure, the flagship company of the Sushil Ansal group, has struck a unique deal with the Uttar Pradesh government. The deal gives the company 2,500 acres of land near Delhi to develop into a township.

It's said that the Ansals also have the rights to collect taxes, just like a municipality, although this could not be confirmed. Ordinarily, housing developers levy a monthly charge for maintenance, security and for the upkeep of swimming pools in the case the complex has them. Collection of taxes like a municipality by a developer is unheard of.

The deal, likely to be announced in a day or two, has been cemented with the state government, which issued a letter of intent to Ansal Properties. The company will be purchasing the land, most likely near Dadri, for about Rs 1,000 crore. According to sources, the phased development plan of the township spans 4-7 years and may have some kind of reservation for low-cost housing.

The deal is being termed by industry observers as a bonanza for APIL which is seen to rake in a profit of Rs 10,000 crore by developing the township over next few years. It is expecting the township to generate revenue of Rs 22,000 crore.

When contacted company officials remained tight-lipped about the issue, but did not deny the deal. Only last month, Ansal properties got the licence from the UP government to build a high-tech city in Lucknow. Spread over 2,000 acres, the city will be developed as a elite township with all kinds of facilities like golf club and villas.


----------



## Contrarian

*Sensex sheds 400 pts, bank stocks trigger fall*

MUMBAI/NEW DELHI: The bulls ran for cover on Monday as the bears went on a rampage in the equity markets. The 30-share sensitive index of Bombay Stock Exchange fell 400 points Ã¢â¬â the ninth steepest ever Ã¢â¬â to close at 13,399.43 points.

But the downturn hasn't dampened the mood on Dalal Street. In fact, marketmen welcomed it and called it a long overdue correction.

RBI's decision on Friday evening to raise the cash reserve ratio (CRR) by half a percentage point to 5.5% Ã¢â¬â which will suck out Rs 13,500 crore liquidity and is expected to push up interest rates Ã¢â¬â saw a steep fall in the banking stocks when the markets opened on Monday. The mood soon engulfed the entire market. By around 1 PM, the market fell by 538 points to touch lowest intra-day level of 13, 261 points, but later recovered. In the process, investors lost Rs 1.08 lakh crore wealth in one day.

Banks led the fall and the BSE index for banking stocks fell 6.43% as against the sensex which went down 2.9%. Shares of SBI, India's largest commercial bank fell 8.18%, while ICICI Bank lost 6.54%.

FM P Chidambaram, however, allayed fears and said the market would recover soon. He said the rise in the CRR would not affect the profitability of banks and that their share prices would recover soon.

Investors and fund managers echoed the sentiment. Standard Chartered Mutual Fund's CEO Naval Bir Kumar welcomed the fall and termed it as a correction. CEO of Tata Mutual Fund Ved Prakash Chaturvedi felt that it was the beginning of a long due correction, which would give new investors an opportunity to enter the markets. The sensex has gone up by over 50% since June 14, 2006, when it had touched 8,929 points. Such a steep rise in the sensex, made some of the stocks look a little overpriced. As the fundamentals remained intact, Chaturvedi said, a dip in prices would give good opportunities to buy.

Ashish Kapur, CEO, Investshoppe said the correction would not be very deep as there is enough liquidity in the system. Mutual funds have raised large sums of money from the public in November and December. These funds are still to be invested. Besides, many foreign funds are waiting for the correction to happen so that they enter the market. He added a correction of 5% to 10% is expected.

Kapur said unlike in May 2006, there is not much pressure on margins this time as the fall is not very steep. Besides, he said, not many retail investors are involved in future trading this time. "Institutional and big players can withstand the fall," Kapur added.

A margin pressure is created when a fall in the markets creates liabilities for investors. According to the available data, FIIs have taken around 30% of the gross position in the futures and options segment of the market.

But, a senior broker said, as FIIs are not active in the market for some time, the fall may continue for a little longer. In December, normally senior FII executives opt for Christmas break but the trends for the last four years don't reflect inaction by the foreign funds as they have stayed net investors every December, staring 2002.

However, this December, FIIs have so far been net sellers to the tune of Rs 1,671 crore, which a senior broker said was not a very good sign.


----------



## Contrarian

*With futures loaded, fall in markets seen*

NEW DELHI: With investors having invested heavily in the futures & optins segment of the market, a further fall in the stock markets in the coming days is not ruled out by brokers and fund managers.

With equity markets taking a U-turn on Monday, investors are expected to sell in the F&O segment to contain losses. At the same time, the fall in this segment will prompt investors to put in margin money for which they might liquidate their position in the cash segment.

"The viscious circle will put pressure on the market as a whole," said Investshoppe CEO Ashish Kapur. According to estimates, the open position in the F&O segment is around Rs 50,000 crore. The trend was evident even on Monday, when investors rushed to the cash segment as the NSE Nifty fell so that they could square up their positions in the F&O segment.

While this increased the selling pressure in the F&O segment, there were very few buyers. So, prices of future contracts dipped. Futures based on Nifty index, which would mature in December 28, 2006, fell to close at 3,839 points, while Nifty 50 closed at 3,849 points in cash market. This indicated that the market expected Nifty to fall further Ã¢â¬â albeit marginally.

The NSE index for banking stocks fell to 5,181 points, while in the cash segment the index closed at 5,244 points. That means, the fall in banking stocks is likely to continue for a few more days. Besides, the difference in the F&O segment and the cash market for bank shares Ã¢â¬â which was nearly 1% Ã¢â¬â was more than the overall market.

But, the situation is not as grim as it was in May 2006. Investshoppe's Kapur said in May 2006, the open position was very large. Besides, small retail investors too had taken large position. This time, these investors are not so active in the F&O segment.

As a result, analysts said, the selling pressure due to F&O segment could soon be a thing of the past.


----------



## Contrarian

*L&T bags Rs 5400 crore deal for IGI upgrade*

NEW DELHI: Delhi on Monday moved closer to becoming home to a world class airport. Engineering major Larsen & Toubro (L&T) has been awarded the Rs 5,400 crore contract to build the new passenger terminal Ã¢â¬â replete with 130 check-in counters, 50 emigration and 48 immigration counters, besides a multi-storey car park to accomodate 4,300 cars under the modernisation exercise for Delhi's IGI airport. L&T will also construct a new 4.43-km runway Ã¢â¬â one of the longest in Asia Ã¢â¬â under this contract.

IGI's owner Ã¢â¬â Delhi International Airport Ltd (DIAL) Ã¢â¬â has also given L&T the mandate to carry out associated work for the airport, which is scheduled to be commissioned before the Commonwealth Games in 2010.

The new terminal (Terminal 3) would come up near the existing international terminal and will be equipped to handle 37 million passengers per annum. Spread over 4.4 million square feet, it would have 74 aerobridges and 30 remote parking stands for aircrafts. Besides, 56 passenger travelators will make commuting within the terminal easy. The contract also includes installation of elevators and escalators, baggage handling systems, IT, security, Electrical & Mechanical systems.

The new runway would be operational in 2008, and would be equipped with a hi-tech system enabling landing even with a runway visibility of only 50 meters. This runway will be able to handle Airbus A380 superjumbo.

The contract also involves construction of connecting taxiways, satellite fire lighting facilities, cargo terminals, aircraft maintenance facilities, utility services and other primary infrastructure support facilities. In addition, L&T will also build a six-lane road connecting the terminal and national highway NH-8, a multi-storey car park to accommodate 4,300 cars and a forecourt for the new terminal.


----------



## Contrarian

*Jet Air charts expansion abroad*

NEW DELHI: Naresh Goyal's Jet Airways has penned an ambitious flight plan for 2007, which includes spreading its wings into three North American destinations besides entering Bangkok, China and Africa. "By August next year, we will be flying to New York from Mumbai via Brussles and in October we expect to start our flight to San Francisco from Mumbai via a point in China, which could be Shanghai," Jet Airways CEO Wolfgang Prock-Schauer said.

"By 2007 or early 2008, we expect to operate to Toronto from Delhi," Prock-Schauer said while announcing the airline's non-stop flights to Bangkok from Delhi and Kolkata starting January 23.

Besides, the carrier is planning to fly to the African continent, mainly to South Africa and Kenya in the later part of 2007. Prock-Schauer said Jet Airways was looking at flying to the Gulf region, which is currently not open to private carriers.

"As per government policy, we are not allowed to fly to Gulf now. But by 2008, this sector is expected to be opened up and we are looking at flying there," he said adding that all the major destinations in the region were on its radar.

In line with the expansion plans, Prock-Schauer said Jet would almost double its number of pilots. "Currently, we have about 750 pilots. By 2007, we are looking at increasing it to 1,200 and by the end of 2008-09 we expect to have a total of 1,400 pilots," he said. The new Bangkok flights would operate 14 flights a week, seven each in the Delhi-Bangkok and Kolkata-Bangkok sector. It announced an inaugural return fare of Rs 6,500 (plus Rs 4265 taxes) on Kolkata-Bangkok sector for two months. On Delhi-Bangkok sector fares start at Rs 13,500 for economy class.


----------



## Contrarian

*Times Group, Mid-Day sign strategic pact*

NEW DELHI: Mid-Day Multimedia, publishers of Mid-Day in Mumbai and Bangalore, and the Bennett, Coleman Group, publishers of The Times of India and The Economic Times, have signed a business cooperation agreement to jointly approach various markets in the country to mutual benefit.

This alliance will benefit both organisations through cooperation in printing, circulation and advertising sales.

In order to support Mid-Day's plans for growth in print and FM radio in metro markets across the country, its promoters are enhancing their investment in the company, and the Bennett Coleman Group is undertaking to subscribe to a preferential allotment of Mid-Day shares, subject to shareholder and regulatory clearances.

The promoters of Mid-Day are proposing an incremental investment of Rs 22.56 crore, and the Bennett Coleman Group, an investment of Rs 21.11 crore at a share price of Rs 60 each.

After both rounds of investment, the promoters of Mid-Day will hold a 51% stake in the company, while Bennett Coleman will have a 6.67% shareholding.

"The Times of India, with its leadership position in the morning broadsheet market, and Mid-Day with a successful formula for the middle-of-the day, are, in fact, complementary plays," Bennett, Coleman and Co Ltd executive director Ravi Dhariwal and Mid-Day Multimedia managing director Tariq Ansari said in a joint statement in Mumbai on Monday.

"With this alliance, we will endeavour to garner a larger market share of both readers and advertising in major metros of the country," the joint statement added.


----------



## Contrarian

Tracmail to change handsAdd to Clippings
Reeba Zachariah
[ 12 Dec, 2006 0032hrs ISTTIMES NEWS NETWORK ]
RSS Feeds| SMS NEWS to 8888 for latest updates

MUMBAI: Tracmail, a pioneer in the Indian BPO business, is all set to change hands. California-based buyout firm, HandsOn Ventures, is close to acquiring TWS Holdings, the largest shareholder in Tracmail, a source familiar with the development told TOI. The valuation of the deal could not be ascertained.

TWS Holdings, with facilities in India and Canada and a capacity of over 1,500 seats was formed in October 2003 after the merger of Tracmail, Webhelp and Spherenomics. Tracmail was originally founded by Adi Cooper, a former TCS hand in 1999 when the BPO business was just about beginning to take root in the country. Among the first investors in the company was the View Group which picked up a 50% stake in the company for $7-8 million. Subsequent to this, Cooper sold another 20% to eTec Ventures for an undisclosed sum.

Later, differences cropped up between Cooper and the investors on a fresh line of funding to the tune of $5 million. To make matters worse, Webhelp, one of Tracmail's key partners in the business was close to bankruptcy. If Webhelp closed down, Tracmail's future looked bleak.

That's when, Cooper suggested Webhelp merge with Tracmail to create a stronger entity. The View Group got Spherenomics, a North American BPO and a three-way merger happened. Then, the View sold a part of its stake to Stream, a US BPO that got into a JV with Tracmail to create Stream Tracmail. HandsOn Ventures' move is similar to strategy adopted by Oak Hill Capital Partners and General Atlantic Partners buying majority interest in GECIS (now known as Genpact) about a year ago.


----------



## Contrarian

*Art of Living to help BPOs*

KOLKATA: The programme which business process outsourcing (BPO) majors based outside Kolkata has been relying on to retain staff is finally set to make an entry here.

The Art of Living Foundation's 'wellness programme' targeted specifically at call centres and BPO outfits employees, which has already become highly popular in the NCR, is likely to be rolled out in Kolkata early next year.

"Young people working in BPOs have to put up with a lot of stress and we believe that this would benefit them immensely," its coordinator (Kolkata) Bharati Ganguly said, while explaining the rationale for launching a programme for the ITeS community. "We will soon finalise the modalities for introducing our courses at as many companies as possible," she added.

Although the attrition level in the city is still far less than in Bangalore, Hyderabad or Gurgaon, call centre employees here also complain about experiencing the same levels of stress as their counterparts elsewhere. Irregular working hours, particularly the graveyard shifts, and a concept of low career prospects in BPOs have often been identified as causes responsible for bringing on stress.

The core of its teaching mechanism revolves around a technique known as 'Sudarshan Kriya'. Proponents point out that this form of meditation flushes out negative emotions and makes a person feel good.

"Apart from the general wellness programme, we are also planning to starting HIV/AIDS awareness for the BPO set," Ganguly said. The Foundation would collaborate with the West Bengal AIDS Prevention Society for this purpose, she added.


----------



## Contrarian

*BoI buys 76% in Indonesia's Bank Swadesi*

MUMBAI: Bank of India will acquire 76% stake in Indonesia-based Bank Swadesi for close to $25 million (Rs 112.5 crore.) The deal follows State Bank of India's acquisition of controlling interest (76%) in PT Bank IndoMonex.

Bank Swadesi is a small retail bank listed on the Jakarta Stock Exchange. The bank has eight offices including four branches in Jakarta and Surabaya. It also has a forex licence and a strong retail presence in Indonesia.

Bank of India (BoI) will acquire management control in the bank. It has received the Reserve Bank of India's and government of India approval to acquire the listed Indonesian Bank.

BoI has now applied to the stock exchanges in both countries and is awaiting approvals from regulators in Indonesia.

"We have signed an agreement with the bank's largest shareholder to acquire controlling 76% stake in Bank Swadesi. We will make an open offer for acquisition in the next two days," said Bank of India chairman and managing director M Balachandran. "This will enable the bank to strengthen its footprint in the country and leverage the trade flows between the countries," he added.

"Many Indian manufacturing companies are planning to set up operations in Indonesia. Our presence in the country will help us work with these corporates better," Balachandran added.


----------



## Contrarian

*Deutsche Bank to infuse fresh capital in India*

MUMBAI: Deutsche Bank will infuse Rs 1,125 crore into its Indian operations. This will boost its capital funds to Rs 2,411 crore, and is largely to support investment banking business in the country.

A remittance of Rs 500 crore has been effected and the balance of approximately Rs 625 crore will be brought in the near future. ''We are a very strong investment bank. We want to do large ticket size financing for Indian corporates,'' said Gunit Chadha, managing director and CEO of Deutsche Bank.


----------



## Contrarian

*India may pay 50% more for Iran LNG*

NEW DELHI: India is willing to pay 50% higher price than the one agreed in June last year, to buy five million tonnes of Liquefied Natural Gas (LNG) from Iran.

GAIL (India), Indian Oil Corporation and Bharat Petroleum, which had in June 2005 signed a deal with National Iranian Gas Export Company to buy five million tonnes of LNG at $3.125 per mBtu cap price, are now willing to pay $4.775 per mBtu.

"Iranians have been insisting that the June deal is off unless price is revised. Though we have a water-tight legal case against them for not honouring a deal, we do not want to rock the boat now," an official said.

As per last year's formula, Iran was to charge India 6.5% of the Brent crude oil price at the time of loading of each consignment plus a fixed price of $1.2 per mBtu. Price was to be capped at $3.215 per mBtu at $31 a barrel Brent price. For initial two years, a 10% discount was allowed leading to a price of $2.9 per mBtu from 2009 to 2011.

"We are willing to raise the $31 cap to $55," the official said adding Tehran had sought a higher ceiling of $65 per barrel. At $65, the free-on-board price would come to $5.425 per mBtu.

To this $0.30 per million Btu would be added for transporting the gas in its liquefied form in specialised tankers from Phase 12 of the gigantic South Pars as field.

Of the five million tonnes per annum, LNG to be imported from Iran, GAIL will be responsible for marketing 40%, IOC 35% and BPCL the remaining 25%.

The official said the fixed price component ($1.2 per mBtu) would have an escalation of 2% every year after the second year of the contract delivery.

New Delhi wants Iran to maintain C2 (ethane) content in the LNG at 5%.


----------



## Contrarian

*Reliance Life plans Rs 900 cr biotech foray*

NEW DELHI: Mukesh Ambani is poised to add 'life' to his retail operations, with his biotechnology venture Reliance Life Sciences gearing up to pump Rs 900 crore into four facilities for producing home-grown clinical and generic products such as plasma proteins that are imported for crucial treatments.

Industry sources said the company plans to spend the money in the next 6-12 months for setting up the facilities. It will have at least one unit in north India, probably in Haryana, Punjab or Himachal Pradesh. The other three units will be located in Maharashtra and Gujarat, where the firm is looking for sites.

Sources said products developed and produced by Reliance are expected to be at least 40% cheaper than the imported life-saving stuff.

The company also plans to spare capacity in these facilities for contract-manufacturing of biotech products for other companies.

Reliance has a pilot-scale research and production facility near Mumbai conforming to WHO-GMP and FDA standards of the US. The move to foray into full-scale manufacturing seems to have been triggered by two factors.

The first: a successful use of a plasma protein, Factor VIII, developed by the company to make a knee-replacement surgery possible on a haemophiliac patient in a Delhi hospital last month.

This anti-haemophiliac protein is imported at present. Besides high costs, patients suffer from uncertainty of supply and short expiry periods. Surgeries like knee-replacement are near-impossible on haemophiliacs as their blood does not clot easily. Many patients are left with no choice but to live in pain as they cannot afford the imported biotech products.

The second trigger is the launch of Reliance retail operations. The company's retail chains and malls are expected to have medicine counters. A Reliance biotech foray, thus, has a readymade staging theatre in the retail chain.


----------



## Contrarian

*China may rival India in gems & jewellery industry*

MUMBAI: The news is sure to add to the gloom in the Indian gems and jewellery industry hit by a downturn. While global jewellery sales are expected to grow 4.6% year-on-year to touch $230 billion in 2015, India's share of the diamond processing industry in value terms is predicted to drop 8% to 57% by 2015.

China, on the other hand, will emerge as a strong player with 21.3% of the diamond processing share. The good news is that cutting and polishing centres would be primary beneficiaries of the fall in rough prices and value addition will increase from 29.3% in 2005 to 34.1% in 2015.

These are a part of a KPMG report released by Gems and Jewellery Export Promotion Council (GJEPC).

According to the report, by 2015, around 9% of the world's diamonds, in volume terms, will be processed locally by mining countries, with Angola, Namibia, and Botswana emerging as profitable cutting, polishing and distribution centres in Africa. Equally, India and China together will emerge as a market equivalent to US by 2015.

The US is currently the world's largest market for jewellery and accounted for an estimated 31% of world jewellery sales in 2005. However, India and China are the emerging centres of jewellery consumption and have steadily increased their share of the pie to 8.3% and 8.9% respectively. The report predicts that both India and China will be the new centres for fabrication of studded jewellery as the US's share will decline.


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## Contrarian

*India, Japan set to boost air link*

NEW DELHI: India and Japan have agreed to quadruple the number of flights between the two nations from the current level of 11 a week to 42, starting next year. A formal announcement of this enhanced air connectivity will be made when PM Manmohan Singh visits Japan mid-December.

Government sources said both the nations have also agreed to designate multiple carriers to operate flights between India and Japan, a move that would allow private airlines like Jet Airways and Air Sahara access to the land of the rising sun.

"This marks a revision of their bilateral aviation pact for the first time in 13 years," a source said. "Under this liberalised agreement, carriers from both nations can add more flights and even connect to more destinations within the two countries. Direct connections to Buddhist destinations like Bodh Gaya have also been proposed under the revised agreement."

The revised agreement would be presented to Japan's prime minister Shinzo Abe during the meeting with Manmohan Singh. Sources said this is a step towards boosting business ties between the two Asian powers.

"Besides increasing connectivity between the two countries, the move will help in increasing competition and bring down international air fares on this route. Our experience with other international destinations have shown that air fares have dropped once the routes were opened up to more players. A similar nearly 15-20% drop in air fares can be expected by this liberalised arrangement with Japan," a source said.

Prior to this, India had eased air links with US, Britain and China


----------



## Contrarian

*Airlines Bluecasting?*

NEW DELHI: Airlines the world over have not taken to providing too many newer customer services based on the technologies that have become mainstream.

Forget technologies, most are yet to start even providing good choice of palatable food onboard and comfortable leg space in the cattle class, or ask you to switch off all your electronic devices once onboard which may well be classified a carry-over habit from the past century.

Barring a few, most global airlines have for instance have not yet made good use of technologies for communicating with, and engaging, the customer. There is little chance that the scenario will change anytime overnight with bankruptcies and low-cost aviation looming large on the horizon. But there will always be players who will try out something new and interesting.

A case in point is KLM Royal Dutch Airlines launching a trial at Schiphol airport Amsterdam which can best be classified as Bluecasting.

Simply put, it involves the airline communicating with its passengers who are carrying Bluetooth phones. It works on the presumption that they keep Bluetooth switched on at all times without being scared of being Bluejacked.

KLM's BlueCasting system perhaps signifies the dawning of realisation among airlines that they should connect with customers via innovative channels of communication, and provide services like these which technology can easily provide today.

The airline has started sending messages to travellers who use Bluetooth phones. If they are within the range of the Bluetooth transmitter anywhere at the Schiphol airport, they automatically receive messages from KLM, but only if they have activated their Bluetooth.

For instance, passengers receive an animated image encouraging them to make use of internet check-in facility to avoid long queues at the check-in counter.

KLM's trial has been developed in collaboration with the Amsterdam-based Lost Boys company. A typical message from the airline at Amsterdam airport includes the text: "Check in online, avoid queues."

A slight downside of the present pilot project is that passengers will receive the message only once. If they have momentarily been outside the transmitter's range, they will not receive the message a second time.

KLM's BlueCasting trial will run until February 4 next year. According to the airline, it will then assess whether passengers appreciate being approached in this manner and if more functionalities can be added to Bluecasting to enhance the customer service.

With the number of annual international air travellers slated to grow up from the present 806 million to an astounding 1.5 billion by 2020 as per the International Civil Aviation Organisation (ICAO) projections, it can be anybody's guess if passengers would rather give up a little bit of privacy than wait endlessly in silly queues.

It is time for technology to come to the rescue and minimise the painful experience of air travel to a more pleasant one for all.


----------



## Contrarian

*Chinese cars eye India
*
NEW DELHI: The Dragon's getting ready to sashay down the Indian asphalt ramp all over again. Three of China's leading automobile companies Ã¢â¬â SAIC (or, Shanghai Automotive Industry Corp), Chery Automobile and Foton (shortened for Beiqi Foton Motor Co) Ã¢â¬â are gearing up for a drive on the Indian roads.

Auto industry sources say officials of two of these three firms had recently visited India as part of an initial groundwork study to ascertain the market potential and explore opportunities for a local tie-up.

These companies are exploring the feasibility of establishing a presence in India Ã¢â¬â among the fastest growing automobile markets in the world.

While two of the Chinese companies Ã¢â¬â Chery and SAIC Ã¢â¬â are likely to target the burgeoning passenger car market in India with compact and mid-sized cars, sources said Foton intends to enter the commercial vehicle and SUV markets.

Chery Ã¢â¬â which is being wooed by DaimlerChrysler to source sub-compact fuel-efficient cars for US to fend off Japanese rivals Ã¢â¬â may look at introducing its compact cars, including the Daewoo Matiz lookalike QQ in India.

Chinese firms are emerging as a threat to the Japanese car makers the world over. If the ventures take-off, this would be the first big attempt in nearly five years by the Chinese auto industry to enter India after the misadventures by a dozen-odd two-wheeler firms from China.

"Representatives from two Chinese auto firms Ã¢â¬â Chery and Foton Ã¢â¬â visited India recently and held discussions with local players and the industry body, Society of Indian Automobile Manufacturers. India is among the fastest growing auto markets in the world today and is a high interest market for these Chinese firms, which are looking at expanding their overseas presence," a source said.

Though discussions have been initiated, sources said a full-fledged Chinese auto venture is still over a year away. "These were preliminary meetings to check the ground realities and understand local laws," a source said.

This, incidentally, comes at a time when Chinese investors are facing an uphill task in India with the government keeping several investment proposals at bay citing security concerns.


----------



## Contrarian

*Chinese business in India worth $2 billion
*
NEW DELHI: When it comes to Chinese business interests in India, is it a case of Ã¢â¬ËLeft doth protest too muchÃ¢â¬â¢? Industry and government figures indicate Chinese firms have established a substantive presence in key Indian infrastructure sectors worth nearly $2 billion and climbing rapidly.

Chinese companies, almost all state-owned, have marked out a distinctive space for themselves across India. Even in north-eastern states like Manipur, which is still deemed sensitive, Chinese firms are bidding for, and winning contracts. ItÃ¢â¬â¢s something the Manmohan Singh government plans to showcase during the forthcoming visit of Chinese president Hu Jintao.

However, there are deep reservations about allowing foreign companies in some strategic sectors, and port
development is one of them, particularly because they would be uncomfortably close to naval and other strategic facilities, said sources in the government who are assigned to track trade ties with China.

These sources, who insisted on anonymity, said there is very good reason for India rejecting the bid of China Harbour Engineering Company for the Vizhinjam port near Thiruvananthapuram. The Chinese company in question is also developing PakistanÃ¢â¬â¢s Gwadar port. Even an optimist strategist would have second thoughts about this, they said.

The sources gave examples of Chinese firms being involved in a host of other projects. The China Petroleum Pipeline Co, a subsidiary of CNPC, is building a 1,000-km-long gas pipeline from Kakinada to Bharuch for Reliance Gas Pipelines, a Mukesh Ambani company. Chinese telecom major ZTE Corp has tied up with government telecom companies BSNL and MTNL as well as Tatas and Reliance Infocomm in IndiaÃ¢â¬â¢s fast-growing telecom sector.


----------



## Neo

*ExpatriatesÃ¢â¬â¢ money gives boost to Indian economy*

By Anand Kumar

CONFRONTED by economic crises in the past, the Indian government had to appeal to its citizens living abroad to rush to its rescue by repatriating funds back home. This happened in 1991, when India faced a major economic calamity with foreign exchange reserves down to one billion dollars Ã¢â¬â barely enough to meet three weeksÃ¢â¬â¢ of imports.

India was on the verge of defaulting on its external loans and had to pledge its gold with international banks. The government asked the public sector State Bank of India (SBI), the countryÃ¢â¬â¢s largest commercial bank, to float the India Development Bonds, which fetched about $1.6 billion.

The crisis also triggered off the economic reforms programme, which 15 years later has ensured sustained high economic growth.

The government leaders also sought help of the NRIs when the next crisis hit the economy, following IndiaÃ¢â¬â¢s nuclear explosion in May 1998. Overseas Indians, attracted more by the lucrative returns rather than patriotism, pumped in $4.18 billion that year Ã¢â¬â in SBIÃ¢â¬â¢s Resurgent India Bonds Ã¢â¬â helping the country tide over the crisis.

Two years later, the NRIs again ploughed in $5.3 billion, subscribing to the Millennium India deposit bonds floated by the SBI. These days, IndiaÃ¢â¬â¢s foreign exchange reserves position is extremely healthy Ã¢â¬â it adds up to $170 billion.

The NRI bank deposits make up about $32 billion of these reserves, but India does not go out of its way to lure overseas Indian deposits, as interest rates have fallen significantly. In fact, the government also allows the NRIs to take away money from India.

Recently, the Reserve Bank of India (RBI), the countryÃ¢â¬â¢s central bank, allowed the NRIs to repatriate up to one million dollars a year from the sale of properties. Earlier, there was a 10-year lock-in period during which the funds were to be kept within the country.

The move to allow the NRIs to repatriate proceeds from the sale of properties is expected to result in increased inflow of the NRI funds into real estate sector. The 10-year lock-in period had discouraged the NRIs from investing in the sector as there was a fear that their investments would be diluted over a 10-year period because of the depreciation of rupee.

With exit routes opened up, the NRI investments into lucrative property sector are expected to surge. Of the 20 million NRIs living in over a 100 countries across the globe, a majority is unlikely to ever return to India. It is only the five million-odd Indians living in the Gulf who have plans to return home.

The Gulf-based NRIs invest in properties in India that are meant for their own use. But most Indians in North America, Europe and the Asia-Pacific region have no plans to resettle in their country. Still, many of them want to invest in a property that could be rented out, or sold after a few years for a hefty profit.

The NRI remittances into the country continue to be high. Last week, the RBI disclosed that the NRIs remitted $24.6 billion into India, half of which was parked in bank deposits or invested in the stock markets or properties.

According to a recent World Bank report, India, Mexico and China are the largest recipients of remittances from their citizens living abroad. This year, global remittance flows are expected to reach $268 billion, more than double the level of $132 billion in 2000. Developing countries would account for $200 billion of these remittances.

But the authorities in India have been monitoring inflow of the NRI funds, fearing that part of it might be laundered funds, or used for speculative purposes in the capital markets. The RBI is learnt to have discovered that a significant portion of the NRI and portfolio investments into the country emanate from tax havens.

The RBI is also monitoring the flow of funds through foreign direct investment (FDI) route, suspecting that some of it might be the NRI money which ultimately ends up in capital markets. The RBI has been seeking a ban on the use of participatory notes (PNs). Many foreign institutional investors (FIIs) Ã¢â¬â there are nearly a thousand of them registered with the Securities and Exchange Board of India (SEBI), the capital markets regulator Ã¢â¬â operate on behalf of clients whose identity remains unknown on the basis of the PNs.

Both the RBI and the SEBI have been asked by the federal government to keep a watch on money coming from tax havens, to prevent money laundering. Intelligence agencies have warned the government in the past that underworld and ill-gotten money that is sent abroad, is laundered and brought in legally through tax havens and the PN route.

The black money that is laundered in this manner then flows into the capital markets, fuelling speculation. Such Ã¢â¬Ëhot moneyÃ¢â¬â¢ can be pulled out anytime Ã¢â¬â as happened last week when indices tumbled on the exchanges Ã¢â¬â hurting genuine investors.

Many FIIs operate out of Mauritius with which India has a double taxation avoidance treaty, to avoid payment of capital gains tax. Mauritius does not impose such a tax, so companies registered there and doing business in India also do not have pay to the tax.

About 85 per cent of foreign fund inflows last year were through the PN route. Authorities have suspected that a significant portion of it could be illegal wealth that was originally taken out of India. The RBI figures for 2004-05 reveal that Mauritius based entities accounted for $820 million of the total foreign direct investments of $2.32 billion. Mauritius has agreed to tighten up the tax residence rules for foreigners.

The 20 million-odd NRIs living around the world are believed to have a total annual income of $250 billion. About 200,000 NRIs living in the US are millionaires, and in Britain, there are several NRI billionaires and millionaires.

And like many expatriates from Asia, they save substantial amounts. Conservative estimates place the global NRI savings at $75 billion a year.

Indian banks, both private and public sector ones, have been eyeing these funds, hoping to get a large chunk of it. The NRI remittance business is one of the most competitive, and even international banks account for a major slice of the flow of funds.

But with interest rates in India having dipped, the NRIs are losing interest in traditional products like fixed deposits and savings accounts. About 15 years ago, banks were offering lucrative returns to the NRIs. In the case of a non-repatriable deposit, it was over 25 per cent per annum, while hard currency deposits fetched nearly 15 per cent.

Banks that are active in the NRI funds are now going all out to woo them with other products, including mutual funds, insurance policies, and capital market products. These three segments of the Indian financial services sector are doing extremely well, with brisk, double-digit growth rates.

Mutual fund assets in India have soared by 60 per cent over the past 12 months. The Association of Mutual Funds in India says assets under management now add up to $76.5 billion. There are 30 mutual funds in India, but 15 other asset management companies have sought approval to float funds.

Similarly, the life insurance industry has seen an amazing 162 per cent growth in premium income. Not surprising then that several other international players, besides a dozen Indian banks, are eager to enter the buoyant sector.

There was just one life insurance company Ã¢â¬â the government-owned Life Insurance Corporation (LIC) Ã¢â¬â before the industry was opened up in 2000. Today, there are 16 (including the big daddy of them all, the LIC), yet India remains one of the most under-insured countries in the world.

The overseas Indians today dabble in the stock markets, invest in mutual funds, and even buy insurance policies. Bank deposits may have lost their charm, thanks to lower interest rates, but the booming financial services sector in India continues to offer them ample opportunities to make a killing.

http://www.dawn.com/2006/12/18/ebr8.htm


----------



## Neo

*Indian economy grows 9.1pc in half year *  

NEW DELHI: IndiaÃ¢â¬â¢s economy grew 9.1 per cent in the first half of the financial year to September led by strong manufacturing growth, the government said on Tuesday. 

Ã¢â¬ÅAn important and favourable development in recent times is the growing sign of an industrial resurgence, particularly in manufacturing,Ã¢â¬Â junior finance minister SS Palanimanickam told parliament while presenting a mid-year economic review. Industry recorded growth of 10.9 per cent during April to September, while services grew at 10.7 per cent. 

The telecommunications sector saw an annual average growth of 27.1 per cent from 2000 to 2005, according to the review figures. Last month, official data showed that the economy grew a higher-than-expected 9.2 per cent in the second quarter to September, prompting the central bank to tighten monetary policy in December. 

Prime Minister Manmohan Singh has set a target of nine per cent annual growth. Lifting annual growth to nine per cent from eight per cent over the next five years was Ã¢â¬Åambitious but feasibleÃ¢â¬Â, Singh said on December 9.

http://www.thenews.com.pk/daily_detail.asp?id=36185


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## Neo

Thursday, December 21, 2006 

*US asks India to adopt bold economic reforms*

* Lavin calls for opening of IndiaÃ¢â¬â¢s retail sector to foreign retailers

WASHINGTON: The United States asked India on Tuesday to adopt sweeping reforms, including lifting ownership caps and reducing high tariff rates, to draw foreign investments and fuel rapid growth in the worldÃ¢â¬â¢s second most populous nation.

The call came as the two countries braced for a new era of investment and trade ties capped on Monday by US President George W BushÃ¢â¬â¢s signing into law of a landmark bill for Washington to transfer nuclear fuel and technology to India. 

Although India in recent years has embraced reforms which have helped fuel the countryÃ¢â¬â¢s current rapid economic growth, Ã¢â¬Åsignificant challengesÃ¢â¬Â exist, US Under Secretary of Commerce Franklin Lavin said, suggesting key reforms. He called for the opening of IndiaÃ¢â¬â¢s retail sector to foreign multi-brand retailers, saying it would allow Indian consumers access to the Ã¢â¬Åbest products at the lowest pricesÃ¢â¬Â and improve supply chain efficiencies in the country. 

Ã¢â¬ÅDespite recent news stories about cracks in the dam on retail access, the fact is that barriers remain,Ã¢â¬Â he said, apparently referring to American retailer Wal-MartÃ¢â¬â¢s penetration of the Indian retail market through a local partnership.

Lavin, in charge of the US Commerce DepartmentÃ¢â¬â¢s international trade portfolio, also suggested that India eliminate foreign equity caps in the financial services, banking and insurance sectors. Ã¢â¬ÅRight now, investment caps are very low,Ã¢â¬Â he said, citing particularly the 26 percent equity limit in the insurance sector which prohibited foreign firms from participating in the lucrative pensions sector. 

Lavin, who just returned after leading the largest US trade mission to India, said that India should realise that long term funding provided by insurance companies could help pay for much-needed infrastructure development. He also urged India to bring down its Ã¢â¬ÅhighÃ¢â¬Â tariffs and formulate laws that protected patents and copyrights, and sought joint ventures for open access to foreign broadcasting and cable TV. 

As India entered its fourth year of booming economic growth, Lavin asked whether the government would continue with long-term reforms. Ã¢â¬ÅIt will be very easy for anybody in leadership position looking at eight, nine, 10 percent growth numbers to say, Ã¢â¬ËweÃ¢â¬â¢ve broken the code, we have done it, its not a bad bit of work,Ã¢â¬Â he said.

Ã¢â¬ÅWill these reforms continue or will India pull back? I think itÃ¢â¬â¢s somewhat an open question what the long term prospects for reforms are. ItÃ¢â¬â¢s a question that can be answered by the Indian people and government.Ã¢â¬Â 

Comparing with business-friendly Singapore, Lavin said India had immense potential to draw investments if it pursued reforms.

Overall, as of 2005, India received 45 billion dollars in foreign direct investment with eight billion dollars from the US compared with SingaporeÃ¢â¬â¢s 186 billion dollars in foreign direct investment with 48 billion dollars from the US, he said.

Lavin then compared IndiaÃ¢â¬â¢s average tariff on industrial goods of 12.5 percent to four percent of the US, saying Ã¢â¬ÅIndiaÃ¢â¬â¢s tariffs are still highÃ¢â¬Â. 

Some 258 American executives from 200 companies participated in the one-week trade mission to six Indian cities. They included 14 US civilian nuclear companies eyeing 100 billion dollars worth of opportunities that could arise from the bilateral civilian nuclear deal.

http://www.dailytimes.com.pk/default.asp?page=2006\12\21\story_21-12-2006_pg7_20


----------



## Neo

*IndiaÃ¢â¬â¢s economy to boom in Ã¢â¬â¢07 with slow demand*

MUMBAI, Dec 23: India's economy will continue to boom in 2007 but analysts say demand will slow as its central bank hikes interest rates to curtail consumer spending and higher prices.

India's one-billion-plus population are buying more cars, phones, homes and goods than ever before and its companies have expanded quickly to meet demand domestically and to tap overseas business through acquisitions.

But the pace of domestic demand has surprised the government and the central bank, which have moved quickly to quell a rise in the general level of prices caused in part by higher food and raw material costs.

Ã¢â¬ÅWe think that economic growth will slow next fiscal year to 7.8 per cent from an expected 8.2 per cent this year,Ã¢â¬Â said economist Shuchita Mehta at JP Morgan in Mumbai.

Ã¢â¬ÅThe economy will still show healthy growth, but the Reserve Bank and government cannot allow prices to rise too quickly and will act aggressively to halt inflation.Ã¢â¬Â A recent forecast by brokerage Merrill Lynch in India said wholesale price inflation, the most widely watched measure, will cross six per cent in January from around 5.16pc currently, mainly as goods and food prices rise.

Ã¢â¬ÅThis is due to inflationary pressures arising from higher prices of manufactured goods in a rapidly expanding economy as well as supply-side constraints on primary articles such as wheat,Ã¢â¬Â Merrill Lynch said.

In November, the government cut gasoline and diesel prices and eased import rules for wheat to slow inflation.

But Finance Minister P. Chidambaram said this week that it was too soon to say whether inflationary expectations have come down and that more action may be needed.

As a result, Merrill Lynch and JP Morgan expect the Reserve Bank to hike its reverse repo rate by a quarter percentage point to 6.25 per cent in its next policy review in January.

In early December the central bank, in a surprise move, hiked the amount of cash banks must set aside as reserve by half a percentage point to 5.50 per cent to reduce the amount of money available for new loans.

Since the start of 2006, the central bank has raised its repo rate, the rate at which it lends to banks, by one percentage point to six percent. The reverse repo rate, or the rate at which it lends to commercial banks, has been raised by 75 basis points to 7.25 percent.

The Indian economy grew 9.1 percent in the first half of the current fiscal year ended September and the central bank warned in October that there were signs of overheating and that basic food prices were rising too quickly.

Ã¢â¬ÅIndia may also be impacted by a slowdown in US growth rates though some of this will be offset if the government follows through with plans to spend more on infrastructure, health and education,Ã¢â¬Â said economist Bidasha Ganguly with BRICS Securities.

Merrill Lynch estimated that Indian companies and the government will spend 109 billion dollars on new infrastructure projects in the three years ending March 2009, which will offset any global economic slowdown or any shortfall in farm output.

Ã¢â¬ÅThe emphasis on infrastructure is helping to reduce India's dependence on agriculture, which still accounts for a fifth of gross domestic product,Ã¢â¬ÂMerrill Lynch said.

But JP Morgan's Mehta said that the government may need to spend more than budgeted because social indicators in India -- health, education and employment -- remain a major concern with nearly 300 million people living on less than a dollar a day.

http://www.dawn.com/2006/12/24/ebr18.htm


----------



## Owais

* India to hunt oil at Brahmaputra riverbed *

MUMBAI: Oil India Limited (OIL) will launch a major exploration project for oil hunt on the Brahmaputra riverbed early next year. 

As part of its hunt for new oilfields after a gradual fall in output, the government owned oil major was preparing to conduct a seismic survey in the Brahmaputra. The oil giant has engaged a Kazakh firm to carry out seismic survey of a 175-kilometer long patch of the Brahmaputra riverbed.

The two companies have inked a memorandum of understanding for 22 million dollar survey. 

The move being opposed by environmentalists, and local organisations on the ground that it would have an adverse impact on the ecology and pose a threat to Gangetic dolphins.


----------



## Contrarian

*Sensex rises 237 pts on upbeat IT stocks

*MUMBAI: Riding the bullish sentiment in software stocks ahead of their quarterly results, the sensex rallied 237 points (1.8%) to end at 13,708. But a major part of the rally came in the later part of the session, amidst low volumes, brokers and dealers pointed out.

This also gives rise to the belief among market players that it was mostly speculators who, in the absence of institutional players during the current holiday season, pulled the index up. This, in effect, could also mean that the rally might not sustain for long.

Even provisional trading figures by foreign institutional investors (FIIs) showed a Rs 210 crore net outflow from
Indian bourses for Tuesday. ''It's also possible that some fund managers bought just to prop up their year-end NAVs,'' said the head of a local brokerage.

For the remaining days of the week, market players expect a volatile market, combined with low volumes because most of the foreign fund managers are not participating in the market in the current holiday season.

Among the sensex gainers, Wipro ended over 4% higher at Rs 597 while TCS ended 3.4% higher at Rs 1,190. As a result, BSE's IT Index ended 2.8% higher. Among the non-IT scrips, Tata Motors, ITC, ONGC, SBI and NTPC ended at least 2% higher to support the day's rally. The day's session also added about Rs 57,000 crore to investors' wealth with BSE's market capitalisation now at Rs 35.5 lakh crore.

There were 1,652 gainers compared to 954 losers. However, the day's turnover, at Rs 3,073 crore, was way off the
current month's average daily turnover of Rs 4,332 crore.

The rally in software counters also lifted stocks from other sectors. While the banking and FMCG indices both ended 1.8% higher, the midcap index ended nearly 1% higher and smallcap index finished 1.25% up on the day.

In forex market, rupee rose to its six-week high against the dollar although there were talks of RBI intervention to stop the appreciation of the local currency. During the day, faced with some unexpected crunch of rupee funds, banks sold dollar for rupee. As a result, the greenback slid to settle at 44.44, weaker by 12 paise from Friday's close at 44.56.


----------



## Contrarian

*Airbus in talks with HAL for JV

*NEW DELHI: The rush to float new aircraft repair facilities in India is getting thicker. European aircraft maker Airbus Industrie is in talks with state-owned Hindustan Aeronautics Ltd (HAL) to set up a maintenance, repair and overhaul (MRO) facility for aircraft airframes.

And, Airports Authority of India (AAI) has also initiated talks with Indian Airlines for setting up a similar facility in a JV at the existing Hyderabad airport.

"With the number of aircraft flying in the country rising, MROs for both engines and airframes are turning out to be a big business opportunities here. It's a $800 million and growing market, and companies are now rushing in to cash in on this potential demand," a source said.

Sources said Airbus is exploring avenues for an alliance with HAL as part of its couter-trade initiatives for winning the $2.2-billion Indian Airlines aircraft order. Airbus had also been in talks with Indian for a similar venture, and is now also looking at HAL as part of plans to have a more comprehensive alliance in the market. A final decision on the alliance partner will be made early next year.

"The decision to initiate talks with HAL doesn't mean that we have decided to tie-up with them. We have also held discussions with Indian. We hope to put everything together by early next year so as to make a formal announcement," Airbus India president Kiran Rao said.

Sources said even this venture is expected to based in south India with Bangalore being the most likely candidate as the current airport would offer huge tracts of land once commercial flights are shifted to the new airport next yearend.

Prior to this, the Ruias-promoted Essar group had also proposed to set up an aircraft MRO to tap the growing need for
aircraft maintenance and service.

The company has already shortlisted Thiruvananthapuram as the site for the facility, and proposes to establish it along with AAI. With this facility, Essar intends to also tap the demand from nearby markets like Gulf.


----------



## Contrarian

*As demand for hotel room soars in India, prices skyrocket*

MUMBAI: With its ultrachic restaurant and sweeping views of a 16th-century tomb, the Oberoi in New Delhi is a hotel of choice for the deal makers pouring into India.

But unless you planned your trip months ago, there is little chance of finding a vacancy. The 279 rooms and suites are fully booked almost every night until April at prices that start at $345 a night, breakfast not included.

Demand for hotel rooms is soaring in India as its economy blossoms. Foreigners are flooding in to cut deals, attend conferences or just discover the caves of Ajanta and the sands of Rajasthan. The rise of low-fare airlines is also bringing domestic air travel within reach of more Indians, who, until recently, had little chance of ever boarding a jet.

Yet for all those travelers, India offers 1,10,000 hotel rooms. China has 10 times as many, and the United States 40 times as many.

The New York metropolitan region alone has about as many rooms as all of India. The shortage is pushing peak season rates for basic rooms into stratosphere, by Indian standards, and attracting some of the world's best-known names in hotels Accor, Hilton, Wyndham, Pan Pacific to invest in India.

There's enormous potential here, said Dennis Oldfield, the general manager for the Indian branch of Accor, a French group with 4,100 hotels worldwide. Accor has plans for up to 200 hotels in India within a decade. Microsoft is using its own Live Meeting videoconferencing technology to cut down on business trips, said Ravi Venkatesan, chairman of Microsoft India.

In Bangalore, rooms are so costly that traveling sales people and other professionals often commute by air from as far as Mumbai, 620 miles away. "They are making you fly to Bangalore every day in the morning and fly back every night because its cheaper than paying the hotel bill," said Saurabh Gupta, an analyst in the Indian office of HVS International, a hospitality industry consulting firm.

Infosys has built its own 500-room hotel next to its headquarters in Bangalore. By June, it expects to have 15,000 company-owned rooms across India nearly an eighth as many rooms as the entire country has, and more than any Indian hotel chain.

Putting an employee up for a night at its Bangalore campus hotel costs Infosys $15, and the guest gets three-star treatment that would normally cost $150, by the company's estimate. It's much more efficient in India to do it yourself, said TV Mohandas Pai, HR director at Infosys.

And even though the Chinese earn twice as much as Indians on average, India has the more expensive rooms, according to Travel Business Analyst, an industry newsletter. Comparing rooms of similar quality, suitable for business travelers, a room in Delhi cost $187 on average this year, versus $122 in Beijing; a room in Mumbai was $178, versus $150 in Shanghai.

Some executives blame government for sticking to decades-old laws that limit the amount of land for sale and drive up prices. Because of the Indian real estate boom, land is so expensive that the Taj group of hotels, a chain with 7,000 rooms, has found that the reserve price at land auctions makes building a hotel not financially viable, said Ajoy Misra, the group's sales and marketing chief.

Amitabh Kant, a senior official in the tourism ministry, said $6.5 billion was being invested in hotel-building, and 1,40,000 new hotel rooms were expected by 2010. More conservative assessments put the figure at 70,000. Hilton has won approvals for 75 new hotels in India by 2010, Kant said. Ramada Hotels recently announced a partnership with Royal Orchid to build four and five-star properties nationwide.


----------



## Contrarian

*Nath upbeat about FDI inflow

*NEW DELHI: While the fate of his latest stab at prising open the retail sector for FDI is not known, commerce minster Kamal Nath is quite upbeat about the growing FDI volumes. FDI inflows during October stood at $1.7 billion compared with $0.4 billion in October 2005, marking a 312% rise.

Indeed, FDI inflows have shown consistent growth in the April-Ocotber period of the current fiscal, equity inflows reaching $6.1 billion against $2.6 billion last fiscal. This marks a 134% growth against 60% growth recorded last fiscal.

The ministry is confident that FDI inflows by way of equity during the current fiscal will cross $11 billion, or double the $5.5 billion last year. Once the re-invested earnings of foreign firms already present here are also taken into account, which is a global practice, total FDI inflows in the current fiscal could reach as high as $14 billion against $7.7 billion last year.


----------



## Contrarian

*Software testing becomes domain specific

*BANGALORE: What began as another way to improve bottomlines has now become a key differenciator for Indian IT firms. Software testing has come of age even as several firms have begun to offer this as their main line of business. Gone are the days when this service offering came bundled along with others. Analysts have already placed their bets on this offering.

If ThinkSoft specialises in testing for banking sector, Sasken and Wirpo rule the roost in telecom. Infact, Wipro was one of the first to go all out and offer this service nearly five years ago. On the other hand, a company like RelQ was founded only to do testing. Today, it is not about giving testing work to a Tier I vendor, instead, domain specialisation within testing is the buzzword.

Going by the increasing amount of work that is coming India's way, it is estimated that the country needs 16,000-18,000 testers. High volumes of work that comes to Bangalore is the reason why some believe that this city alone needs another 8,000-10,000 testers now.

"Today, there are clients who do not prefer to give testing and coding work to same vendor. Testing is about domain specialisation," says Avinash Vashistha, CEO, Tholons, an investment and global services advisory firm.

For the second quarter, testing contributed 6.8% of Infy's revenues, while it already contributes 10% to Wipro's global revenues and is growing at 60-70% year-on-year. With over 5,000 people, Wipro prides itself in being able to test practically anything that is remotely connected to telecom.

"Whether it is the point-of-sale terminals for the retail sector or new software that gets released often in the cell phone industry, we are at a point where we can choose our own framework to apply our testing capability to any vertical," added Suresh Vaswani, president, Wipro Infotech.

iGate Global Solutions recently opened a Centre of Excellence for independent verification and validation within their Whitefield campus in Bangalore. The fact here is that this company chose to talk about testing only after it realised that this service offering had grown in stature within a short time span. This announcement came when the testing facility at iGate was over 300-strong. This company is all set to add nearly $10 million to the topline during this fiscal.

''It is purely for our large enterprise customers and product clients. The cost of fixing problems in software after launch is very high. Therefore customers now prefer end-to-end testing rather than specifics,'' adds Mohan Sekhar, chief delivery officer at iGate.


----------



## Contrarian

*It's revival time for Indian cement firms*

BANGALORE: After a gap of almost 10 years, Indian cement companies are in acapacity expansion mode. Close to 54 million tonnes of additional capacity is on cards, which translates into an investment of around Rs 21,600 crore.

With rapid rise in real estate activities and more offtake for infrastrcuture projects, cement companies are back to drawing board to chart strategies to hike capacities. Reports show, 37 million tonnes (mt) of clinker capacity is likely to be added in 2007-2010. In terms of cement it will be 54 mt.

Indian companies are now ordering cement equipment after a gap of almost 10 years. Cement capacities all over the world have been built largely by four equipment suppliers Ã¢â¬â three German and one Chinese. It is learnt that orders from Indian companies are last in the global queue. "We note that at end CY-05, order book of equipment suppliers (globally) was 86 million tonnes with approximately 2.7 years as lead time. Hence, barring a few large cement players, we highlight risks of late commissioning particularly for smaller companies," a Deutsche Bank report said.

This indicates that smaller companies may not be able to cash in on the boom, which is expected to sweep the Indian cement industry over the next two-three years.

"Almost all companies have announced expansion plans. Some of the smaller ones have also been bitten by the cement flavour. It remains to be seen how much of the announced capacity hikes will actually hit the market," officials at India Cements Ltd, (ICL) said. In fact, ICL is taking its capacity from the present 9 mt to 11 mt. "For last two years, we did not expand capacities due to financial constraints, but now we are going all out," an official pointed out.

According to information, close to 5.1 mt will be added by second half of FY-07, while 11.46 mt will be added in FY-08. Around 28.90 mt is likely to be added in FY-09 and 2.87 mt in FY-10. Majority of the new capacities are lined up for North India which is likely to add 25.50 mt. South will increase by 15.73 mt, while East will ads 9.51 mt and West one mt.

"One issue which could make expansion tough is availability of coal. Today, power plants are finding it difficult to get coal, I can't understand how cement companies would get coal linkages. The option of importing is there, but that would mean a cost overrun," industry sources said. Grasim is lining up 12.24 mt capacity, equally split between Kothputali (Rajastan), Aditya (Rajastan) and East India. J P Associates is seen adding 4.55 mt in North India, while Madras Cements will add 1.72 mt each in Jayanthipuram and Alathiyur. Ultratech plans 4.08 mt addition by FY-09.


----------



## Neo

*Bharti to invest $7bn in deal with Wal-Mart *

NEW DELHI: IndiaÃ¢â¬â¢s Bharti Enterprises, which tied up with Wal-Mart to start a nationwide chain of retail stores, said it will invest about $7.0 billion in the project by 2010, a report said. 

The group, which owns the countryÃ¢â¬â¢s top private phone firm, said it will set up 200 large stores and hundreds of smaller ones to cater to the increasingly affluent Indian middle class, estimated to be made up of 300 million people. Ã¢â¬ÅDepending on what we do in real estate and logistics, we will invest around seven billion dollars by 2010,Ã¢â¬Â Sunil Mittal, chairman of the group, told the Business Standard newspaper. Mittal told the newspaper that the groupÃ¢â¬â¢s realty company will identify property for the venture, from which he expected to earn one to two billion dollars in the same period. 

Last month the group tied up with Wal-Mart, the worldÃ¢â¬â¢s largest retailer, to open stores that would be owned by Bharti and run under a Wal-Mart franchise. India does not allow foreign investment in retail except for single-brand stores such as Nokia or Nike. 

Other foreign groups such as Wal-Mart have to sign franchise deals with local companies to enter the Indian market. The newspaper report said that the front-end stores would bear the Bharti name, but talks were on to include the Wal-Mart brand as well. Organised retailing makes up only three to five per cent of IndiaÃ¢â¬â¢s retail business, with the rest dominated by nearly 15 million traditional mom-and-pop stores.

Earlier this year, IndiaÃ¢â¬â¢s biggest private firm Reliance started opening a chain of supermarkets as part of a multi-billion-dollar retail rollout. 

The company said it aims to have 4,000 stores by 2011, with an annual sales target of $25 billion. Other major Indian business houses such as the Tata group and the Aditya Birla Group are also moving into the sector, which has annual turnover of about $300 billion. That figure is expected to double by 2015.

http://www.thenews.com.pk/daily_detail.asp?id=37072


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## Neo

* IndiaÃ¢â¬â¢s cotton output seen at record 25m bales *

NEW DELHI: IndiaÃ¢â¬â¢s cotton output is likely to notch a record 25 million bales in the crop year to September 2007, with growing use of genetically modified cotton, industry officials said on Thursday.

Last season, the output was 24.4 million bales, which was also a record crop.

Industry officials said though the area under cotton cultivation was virtually the same in the last two years at 8.9 million hectares, farmers were able to reap bumper harvests with the use of the new variety of cotton.

Out of 8.9 million hectares, about 30 per cent of the area was under bacillus thuringiensis or Bt Cotton, they said.

Ã¢â¬ÅWe are not only looking forward to yet another bountiful crop this year, we also expect to replicate last yearÃ¢â¬â¢s export performance,Ã¢â¬Â Chandrima Chatterjee of the Confederation of Indian Textiles Industry, told Reuters.

India traditionally exports cotton to China and Africa. 

The countryÃ¢â¬â¢s share in global cotton output is 16 per cent despite having 25 per cent of the worldÃ¢â¬â¢s total area under cotton cultivation, trade officials say.

In the last crop year ended September 2006, exports achieved a record 4.7 million bales.

Ã¢â¬ÅWe believe production will keep rising over the next couple of years as demand is robust and the use of genetically modified cotton has caught up,Ã¢â¬Â said a senior official of the Cotton Advisory Board, a government association which assists growers and processors.

The official said farmers were buying more and more of genetically modified cotton seeds due to a rise in yields.

Ã¢â¬ÅIt is generally believed that 15 per cent of the cultivated area is under BT Cotton, we believe it is actually as high as 30 per cent as a lot of use is unaccounted for,Ã¢â¬Â the official said.

Western states of Gujarat and Maharashtra and southern state of Andhra Pradesh account for the bulk of IndiaÃ¢â¬â¢s cotton output.

Chatterjee said domestic cotton consumption in the last crop year was 21.7 million bales and was likely to rise 4-5 per cent this year on higher demand from textile mills.

Textiles Minister Shankar Sinh Vaghela early this month said the countryÃ¢â¬â¢s textiles exports were expected to touch $21-22 billion in the financial year ending March 2007, compared to $17 billion in the previous year.

http://www.thenews.com.pk/daily_detail.asp?id=37186


----------



## Contrarian

*Govt mulls another international airport*

GANDHINAGAR: The chief ministers office (CMO) is considering having a new privately built and operated international airport, on the lines of Singapore's Changi airport, preferably between Ahmedabad and Dholera.

The project is likely to be a greenfield and may cost around Rs 8,000 crore on 4,000 hectares of land. A senior official said the government has been considering having an international airport within 150 kilometres of Ahmedabad.

Mehmedabad, on Ahmedabad's eastern periphery, and Dholera and Sanand on the west were being considered for the project.

Chief minister Narendra Modi's adviser SK Shelat told ToI, "Of the various proposals being considered, the one near Dholera has an obvious advantage, considering its proximity to the proposed private port nearby."

Sources said the airport could be built on a build-operate-transfer (BOT) basis.

Significantly, though there was some talk about having an international airport between Dholera and Ahmedabad early this year, it could not find favour with the Airport Authority of India (AAI).

The AAI decided, instead, in July 2006 to develop and expand the present airport in Ahmedabad by building a new terminal at the cost of Rs 291 crore, for which Gujarat government agreed to buy 67 acre of land for it. The state even decided to drop its decision to formally approach AAI for a new proposal.

However, the state officials have now come around to the view that the possibility of expanding at the present site is very limited.

The reason is that the area is too congested, with huge slums and small industrial establishments dotting the area around the present airport at Chharanagar and Naroda in Ahmedabad.

"It is next to impossible to free this area for developing a new airport with all the modern facilities required in five to seven years from now," a senior bureaucrat said.

The Gujarat Maritime Board (GMB) is in favour of having an international airport between Ahmedabad and Dholera. GMB CEO HK Dash said, "An airport at new site will boost our proposal to have a new private port at Dholera in Gulf of Khambhat."

The Gujarat Industrial Development Board is soon likely to be asked to prepare a pre-feasibility study for the new proposal to have a privately-driven airport between Ahmedabad and Dholera.


----------



## Contrarian

*ONGC set for a mega gas find*

NEW DELHI: There's a new-found swagger in the gait of executives working for ONGC.

After years of poor oilhunting record, the company sees its fortunes turning and feels confident of making the "grandmother of all" discoveries which will allow it to supply half the country's gas needs from a single find by 2011-12.

Along with its existing gas fields, this will make ONGC the country's single biggest gas producer.

Executives say by present indications, the company will be able to supply 50 mcmd (million cubic meters per day) of gas, more than half of 90 mcmd present consumption, from the "big one" Ã¢â¬â identified as UD-1 in block KG/DWN/98/2 acquired from Cairn energy 150 km off the Andhra coast.

Diagonally up and further to the right from this strike, the company made another discovery 33 km from the Orissa coast and found oil in Assam, both of which were first reported by TOI.

"This is nothing. If the indications that we are getting are anything to go by, we are on to something terrific. It will beat every other find so far," one executive said. The reference is to two more blocks that cover the gap between the gas strikes off the Andhra and Orissa coasts.

Geological data show the same kind of gas-bearing formations stretching throughout area. There are bigger possibilities in the present find itself.

Gas is trapped in channels between layers of sand and stone which form a maze one above the other. The big strike has been made at a depth of 5,243 metres below the seabed with an 28-metre-thick gas layer.


----------



## Contrarian

*Rel Comm to invest $1.5b over 3 years*

MUMBAI: Reliance Communications would spend about Rs 7,000 crore ($1.5 billion) over the next three years to build an advanced submarine cable system that will connect 60 countries.

The new optical fibre cable system, christened FLAG NGN (Next Generation Network), would be built over the existing FLAG cable system that the company operates at present, Anil Ambani, chairman, Reliance Communications (RelComm) said.

Once complete, the undersea cable network would be the largest one in the world and RelComm will continue to be one of the three largest submarine cable companies in the world.

Post-completion, RelComm's network, through its partners across the globe, would reach about 5 billion people.

Speaking to the media, Ambani said that the laying of the new cable network based on the new technology is to meet future demand from its partners and customers.

Industry analysts said that the move on the part of RelComm was to keep itself ready for the 3G of mobile services scenario in the Indian telecom space.

Once 3G is in place, people would be able to do a lot more with their handsets and could require more data, voice and video.

In such a situation of increased demand with extra spectrum, RelComm's network with extra capacity could prove to be a triumph card.

This investment of $1.5 billion would go in laying another 50,000 kilometers of network which by December 2009 will take FLAG's global network to about 1.15 lakh kilometers and RelComm group's to 2.30 lakh kilometers.


----------



## Contrarian

_*Trade deficit rises to $17.9 billion in Q2*_

MUMBAI: Rising oil imports continue to take a toll on the country's trade deficit. India's trade deficit rose to $17.9 billion in the second quarter of 2006-07 as compared with $13.2 billion in the corresponding quarter in the last fiscal, according to the Reserve Bank's balance of payments data.

Despite an invisible surplus of $11 billion, the current account deficit also rose to $6.9 billion ($3.6 billion) due to the large trade deficit. Oil imports rose 36.9% in April-September 2006, while non-oil imports recorded a more moderate 11.5% growth. During the same period the average crude oil price recorded a year-on-year increase of 25%, while volumes grew 11%. The average price of the Indian basket of crude rose to $67.2 per barrel from $53.7 in the corresponding period last year.

"The rise in trade and current account deficit was anticipated due to a moderation in exports and the high crude prices. However, the oil prices have moderated and this would be reflected in the future numbers, which could lower the deficit in the second half," said Abheek Barua, chief economist, ABN Amro Bank India.

Invisibles receipts continued to record robust growth of 32.8%, driven by growth in business and professional services and remittances. Invisibles payments also witnessed a steady expansion, reflecting continuing pace of outbound tourist traffic from India, rising payments towards transportation and strong domestic demand for business related services and higher investment income payments.

Net capital flows, external commercial borrowings, foreign direct investment, NRI deposits and short-term trade credit showed firm growth, adding to the country's external debt position. The external debt of the country has risen by $4.3 billion to $136.5 billion at the end of September 2006 from $132.2 billion at the end of June 2006.

Despite a booming market, portfolio investment Ã¢â¬â largely FIIs Ã¢â¬â for the period slipped to $1.6 billion from $5.4 billion. NRI deposits rose by $912 million to $36.6 billion, accounting for 26.85% of the total debt at the end of September 2006, followed by multilateral debt at 24.6% and commercial borrowing at 23.8%.

The strong demand for ECBs, foreign investment and banking capital (banks borrowing overseas through hybrid instruments) during April-September 2006 lead to an accretion of $8.6 billion to foreign reserves. Valuation gain, reflecting the appreciation of major currencies against the dollar, accounted for a rise of $5.1 billion in total reserves during the first half as against a valuation loss of $5 billion during the corresponding period in the previous year.

Other capital gains of $3 billion also helped boost the country's forex which touched a record $176.22 billion.


----------



## Contrarian

*Aurobindo's arm acquires Dutch firm*

HYDERABAD: Agile Pharma, the Netherlands-based wholly-owned subsidiary of Aurobindo Pharma Ltd, has acquired Pharmacin International, another Netherland-based generic pharmaceutical company. The acquisition has been done through a share purchase agreement with Pharmacin's shareholders Ã¢â¬â Jerim and Jonghound International.

However, Aurobindo has not disclosed the valuation of the acquisition and the price at which the shares have been bought. This is Aurobindo's second acquisition in Europe.

During the beginning of the current calendar year, Aurobindo acquired Milpharm Ltd, a UK based company."The product portfolio of Aurobindo, manufacturing and R&D capabilities are expected to help strengthen and grow the relationships of Pharmacin. Aurobindo would stand to benefit as this acquisition would provide an opportunity to expand into European markets with a dependable infrastructure and proven relationships," a company statement said.


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## Contrarian

*Infotech poised for a bigger boom*

BANGALORE: An expat in Bangalore was a silent witness to a conversation on the crumbling infrastructure in the city. When asked what makes him still visit the city, the reply was simple. "All great cities of the world have gone through this phase. Eventually, infrastructure will be world-class. No government in can ignore this and the benefit it brings to the economy."

The Indian IT juggernaut seems to have no stopping. As another year rolls by, it is this optimism among people that continues to grow the sector.

Expansion of existing operations, larger deals coming to Indian IT vendors, increased VC investment (over $3 billion in the first six months of the year), acquisitions abroad, focus on product development and emergence of semiconductor industry were some of the key highlights in 2006.

"This year was a turning point for the IT industry. India has been accepted much widely as a brand and clients worldwide seem to have included India in their decision for multi-sourcing of contracts. This would provide a huge momentum on contracts that are going to be negotiated in the year to come," says Deepak Khosla, senior VP, Patni Computers.

"Fundamental acceptance of India as a product engineering hub was the biggest change during 2006. After proving that we can do highend engineering in 2005, Indian firms began to get access to the world and this time, it was driven by availability of capital. MNCs would increase the quantum of work done in India during 2007," said Samir Bordas, president (product engineering) Aztecsoft.


----------



## Contrarian

*Sensex gains 47%, funds pour in*

MUMBAI: On Friday, the last trading day of 2006, the sensex ended 59 points lower at 13,787, but that doesn't take away the huge positives that came through during the year, probably the best in the 132 years of BSE.

A 47% gain in BSE Sensex, nearly $8 billion worth of foreign fund inflows and over Rs 13,000 crore from domestic funds, and Rs 11.2 lakh crore addition to investors wealth: This is the market for you in the year that is about to end. 2006 witnessed a sustained bullish trend that lasted throughout, except for a one-and-a-half month period during May and June when sensex corrected nearly 35% from all-time high of 12,672.

Prior to this crash, the sensex had, at regular intervals, raced past 10K, 11K and 12K levels. And after the crash and subsequent recovery, when the index embarked on record-breaking spree all over again, it went past 13K and 14K peaks, boosted by foreign and domestic fund buying, along with speculative excesses. In the end, the sensex also bettered the 42% gains of 2005.

It was a record year for cement shares with a number of doubling in price. Along with industry leaders ACC and Grasim Industries, prices of smaller players like India Cements also went through the roof. With infrastructure sectors leading the charge in a galloping economy, it was a year to remember for investors who had put their bets on cement stocks.

Along with cement and infrastructure stocks, real estate stocks too showed huge gains, although part of the gains could be attributed to the lack of collective knowledge about the valuation of these stocks.

It was also a memorable year for investors in telecom stocks with Bharti Airtel appreciating about 81% and Reliance Comm, which was listed in March, giving a 62% return. The record gains of 2006 has also made market veterans cautious. "One of the dangers for 2007 is that 2006 could be looked back as the benchmark year," said Arun Kejriwal, director, KRIS, an investment and advisory services company.

In such a situation, if the sensex grows by another 45% next year, it should be at 20K level by December 2007. This will require frontline companies to grow at the same rate, that's 45%, which is improbable.

Long-term players are not looking at repeating 2006 performance in 2007. "We expect gains of about 15-20% for best run companies. Any P/E expansion is unliekly," said Naresh Kothari, executive V-P, Edelweiss Capital.

The choice between investments in frontline stocks, and small and mid-cap stocks could be a dillemma for investors in 2007, market players said. Most of the frontline stocks look fully valued at the current level, so any fresh investment in these stocks might not give good returns. On the other hand, there is not enough liquidity in second rung stocks and they are highly risky bets. Recently,"a lot of investors were shattered when they went overboard in these counters and those memories are fresh," said Kejriwal. In case investors do decide to take bets in small- and mid-cap counters, it would also lead to higher volatility.

Could there be hidden minefields in 2007 as well? With each passing day, as the Indian market is getting more aligned to the global markets, negative developments elsewhere in the world could lead to a fall in India, said Kotahri. Rising interest rates, along with rising inflation in a stabe global crude oil price regime could also spell trouble for the India Inc, market players said.

Market analysts are looking at a strong Q3 and a good Q4 from corporates, but they expect the quarters beginning July 2007 and October 2007 to be tough ones for even the best of Indian companies.


----------



## Contrarian

*Verizon may join Hutch race*

MUMBAI: In a race that's being driven as much by rumour as by reality, the latest piece of speculation Ã¢â¬â put out by a wire agency out of New York Ã¢â¬â is that US telecom giant Verizon is also interested in Hutch Essar.

Said an agency report,"Verizon Communications, which has a market capitalisation of $108 billion, is the latest name being churned out by rumour mills for the prized Indian firm. While a spokesperson for the US firm said it was the company's policy not to comment on 'this kind of speculation', industry sources said the move could be strategically important for Verizon as the US market was near saturation level and India offers great growth opportunities."

There were also speculations about Vodafone hiking its valuation of Hutch Essar to an adjective-defying $20 billion, which would price Hutchison Whampoa's 67% at roughly $14billion Ã¢â¬â the price below which it had said it would not wish to sell its shares.
But it's also the kind of price that analysts are now warning bidders against, saying that it's way over the top and difficult to service. There's fear that at such prices, the classic winner's curse will kick in and that to lose the bidding war might actually be a blessing in disguise. But sources dismissed both reports as imaginative thinking.

Amid these alleged multi-billion dollar bids, there are stories that talks between the Ruias and Hutchison bosses in Hong Kong have not being going too well. Hutch, according to some people close to the situation, is not overly keen on selling its stake to its 33% Indian partner with whom it's not had the best of relations.

The ever-growing number of potential suitors, including two confirmed parties, Reliance Comm and Vodafone, has already pushed the valuation of Hutch Essar to unrealistic levels, according to industry analysts.

Other possible bidders doing the rounds include Malaysia's Maxis, Egypt's Orascom and private equity funds. Hutchison Whampoa has confirmed it has been approached by several potential buyers and the company's finance director Frank Sixt recently said it would not entertain offers below $14 billion.

This price has taken the company's valuation to nearly $21 billion and represents a huge premium since June last year when HTIL raised its stake in Hutch Essar by 5.11% for $450 million while valuing the company at less than $9 billion.


----------



## Contrarian

*Trai to seek more power*

NEW DELHI: Trai has decided to make 2007 the year of the consumer. As its plan to make life easier for telecom users is not an easy one, Trai will approach DoT to seek more powers to take on mercenary and uncaring operators.

"We will be circulating a draft regulatory mechanism in a few days to ensure quality of service (QoS) for consumers, but we lack the power to impose penalties on erring operators. We will approach DoT to give us these powers," says Trai chairman, Nripendra Misra.

It is well known that the Trai Act 1997 gives very little teeth to the regulator on QoS issues. The consumer has borne the brunt of this for nearly a decade.

All that is about to change. Alongside a serious self empowerment initiative, Trai has devised a creative mechanism to push service providers to bring consumer protection to the forefront.

For once, Trai has placed information related to consumer rights in the public domain. Key among these are that operators must inform users within a week of service activation, complete details of tariff plan and changes. Allow consumers to move from one plan to another without a migration fee.

Similarly, even if talk time value is exhausted, prepaid customers will get all services independent of talk time value such as incoming calls and messages during the validity period.

Fixed line and broadband customers with faults pending over three days will get rental rebate.

One of the most treacherous experiences for consumers has been mobile metering and billing. A special regulation notifying code of practice to bring transparency and minimise the incidence of billing complaints is being enforced.

For once, consumers will be able to make sense of their bill.Good news for global roamers too. They can opt for a particular ring back tone indicating to caller through the ringback tone of their roaming status to avoid unwanted calls.

Finally, a process to enforce the regulation Ã¢â¬â nodal officers will be appointed by operators to deal with complaints and all complaints to be given a unique docket number transparent to the consumer for follow up.

At last, human interface to replace the endless runaround of press 1 for this option or 2 for that, 3 for something else and hanging up unsuccesful and helpless at the end.


----------



## Contrarian

*IT results to be 1st trigger for sensex

*MUMBAI: As Dalal Street awaits its first trading session of 2007 on Tuesday, brokers and dealers said expectations of a robust results season would start from the word go.

As has been the trend for the last few years, technology shares would be off the block first, with Infosys having scheduled its third quarter results for January 11.

While most brokers and analysts are sure that technology companies would meet Street expectations, huge advance tax payment figures for the October-December quarter has also raised hopes for sterling performance from a host of frontline companies from other sectors, like cement, oil & petroleum and banking.

"Results expectations would drive the market this week. Apart from proprietary trades by brokers and institutions, there are possibilities that they would also buy on expectations of substantial FII fund allocation later in the month," an institutional dealer said.

Behind the expectations of robust quarterly numbers, there are market intermediaries who are keeping a close watch on rising inflation and the interest rate scenario, despite a relatively stable crude oil prices.

While these so-called investment negatives could be ignored while the going is good, in case the market turns southward, these same reasons could weigh down the index further.


----------



## Contrarian

*Tougher times for tax evaders*

NEW DELHI: The tax department seems unwilling to let go of the opportunity to raise collections in a booming economy and is expected to further tighten the noose on evaders over the next three months.

With surveys having unearthed over Rs 1,000 crore hidden income, the Central Board of Direct Taxes (CBDT) is expected to use the measure to extract concealed income even as it appears set to close the financial year with collections of around Rs 2,20,000 crore instead of the budget target of Rs 2,10,000 crore.

"With our officers being mobile, we have managed to generate around Rs 1,000 crore through surveys between June and December as against Rs 211 crore during the last financial year," CBDT spokesperson A K Sinha told a press conference.

Refusing to disclose details, he said one survey alone had revealed an additional income of Rs 25 crore. While the exercise had revealed large amounts of income, only a third would be taxed, which will mean that the exchequer will be able to realise an additional Rs 300 crore.

While on an all-India basis, over 200 surveys have been conducted Ã¢â¬â including one on the premises of a company promoted by Shah Rukh Khan Ã¢â¬â eight surveys in Delhi's Chandni Chowk alone resulted in businessmen revealing income of Rs 1-2 crore instead of the Rs 5-6 lakh that they had reported.

And with more information on high value transactions like investment in mutual funds, purchase and sale of immovable property and large spending through credit cards, the department intends to track more people who have been splurging but not paying taxes.

Retailers and those hawking expensive pens or LCD monitors may face surveys to ensure that they pay their dues to the taxman on the cash transactions that they have entered into.

The move is also expected to throw up names of those who have purchased high-end items, who could also be put under the scanner.

Unlike a search, which is often referred to as a raid, tax officials launch surveys, based on information received, which are less invasive and the operations are confined to the business premises.

Taxmen scan through books to ascertain whether things are in order. During the searches conducted so far, it has often come to light that stocks had been under reported and were not reflected in the books.

With the department's field formation busy completing the assessment of returns by December 31 deadline, number of surveys last month were fewer, Sinha said.

But as the officials scurry to meet the targets set for them for the fiscal, more surveys appear a near certainty.


----------



## Contrarian

*Govt weighing options for Indian-AI merger*

NEW DELHI: The government is considering several routes like enacting a law or getting a court order or simply issuing an ordinance for merging the two state-owned carriers, Indian and Air-India, official sources said on Tuesday.

The fastest way to merge the two would be the ordinance route as was done in 1953 when the Air Corporation Act was repealed to create the two public sector airlines, the sources said.

However, a legislation could also be brought in during the Budget Session of Parliament after the Union Cabinet gives its final nod to the proposal of the Group of Ministers (GoM) headed by External Affairs Minister Pranab Mukherjee, they said.

The Committee of Secretaries (CoS), which was asked by the GoM to finalise various options and work out the nuances of the merger process, has already favoured the merger and offered several choices as to how to go about it, they said.

The GoM, headed by External Affairs Minister Pranab Mukherjee, is yet to consider the CoS recommendations and proposals.

Sources said that there could be some delay in the process but not an inordinate one as the statutory time-frame has to be met.

The two airlines, they said, would have to give notice to their creditors and lenders about the process going forward.


----------



## Contrarian

*DoP charts Rs 6K cr tech plan

*NEW DELHI: Year 2007 seems to be the year of reinventing, at least for the Department of Posts (DoP), which has lately realised that unless it upgrades its technology, it will be unable to compete.

With the 11th Five Year Plan set to take on, the world's largest postal network plans to spend about 50% or over Rs 6,000 crore of its proposed expenditure Ã¢â¬â to enhance itself technologically Ã¢â¬â in the next five years, starting 2007. This translates into an annual spending of Rs 1,200 crore, which will start from April.

"India Post strongly needs to strengthen technologically and that too at the grass-root level if it wants to do away with the deficit of Rs 1,100 crore in the next five year," says IMG Khan, secretary, Department of Posts.

And to give wings to its vision, India Post is banking on big vendors like TCS, Wipro, Infosys and Microsoft to outsource Enterprise Resource Planning systems (ERPs) that will integrate about 8,000 computerised post offices all across the country.

Though the department continues to outsource services from National Informatics Centre, it will shortly announce tenders for ERP solutions. And if all goes well, India Posts expect to finalise our IT partner by June-July this year and take off after the contract is assigned.

"With India Post already struggling to turn into a profit making entity, we will focus at reasonably low-cost wireless-based connectivity for our 1,55,566 post offices spread across India," Khan said. The department also plans to pump in over Rs 200 crore for HR management.


----------



## Contrarian

*Working world is getting better for Indian women*

MUMBAI: It's life as usual for Catherine Gilbert, a Chennai-based Senior Software Engineer with IBM India. She wakes up, finishes her morning chores and gets to work. But there's a difference here.

Gilbert works from home. When she was two months into pregnancy, Gilbert opted for IBM's work-life flexibility option. And, her responsibilities are no less compared to her other colleagues.

"I still work under the same deadlines," she says. Gilbert works with a team spread across various cities and several of her teammates work from home. "You can work when you feel like and relax in between. In fact, I am planning to continue working this way for at least a year after I have my baby."

This is part of a series of programmes IBM has undertaken in India to help women in the workplace, as part of its larger initiative to encourage diversity.

The idea is simple: Lots of women employees tend to opt out of the workforce due to child bearing and family reasons.

"There is a severe war for talent," says Anita Guha, diversity lead, IBM. "We don't want to close our minds to any segment."

For IBM it doesn't stop with flexi-timing and sabbaticals. It has embarked on a project to help women who have dropped out for various reasons back into organisation.

It is also investing in vendors developing childcare centres and creches in key cities. The idea is simple: Once the projects are off the ground, children of IBM employees will get a preference.

The percentage of women in IBM's 43,000-strong India workforce has climbed up to 26%. Contrast this with the figures revealed by a recent CII survey: In large companies, the ratio of women is barely 4% of total workforce, whereas in medium-scale companies, it stands at 18%.

It is not just IBM alone. Several other organisations are going all-out to attract and retain women employees.

For instance, whenever headhunters conduct an executive search for Bharti Airtel, they are told to include at least 25% of women candidates in the shortlist.

Vijaya Sampath, corporate director, adds, "But we make sure that all appointments are made on merit and there are no quotas for women."

IBM gives placement agencies a higher fee if they bring in women candidates. Bharti, which has about 17-18% of women in its workforce, has recently launched a major diversity initiative.

It ensures that there are enough women senior managers on the panel during pre-placement talks on campuses.


----------



## Contrarian

*Sensex up 155 points

*MUMBAI: The sensex shot up by 155 points on the first trading day of the New Year following a widespread rally led by auto stocks and heavy fund buying after firm Asian advices.

Trading began on a promising note as FIIs, who were away for holidays, resumed activity with a bang and made hefty purchases following a steep rally in Asian markets, dealers said.

The index opened strong at 13,827.77 as against its previous close of 13,786.91. After hitting a high of 13,980.54, it ended at 13,942.24, a gain of 155.33 points, or 1.13%.

Bull operators and retail investors became active and made good purchases in heavyweights, which boosted the market sentiment, brokers said.

Nifty shot up 41 points, or 1.03%, to end at 4,007.40 points. Auto shares led by Bajaj Auto made handsome gains after the announcement of encouraging December 2006 sales figures of many companies.

The BSE-Auto index zoomed 177.54 points, or 3.22%, to finish at 5,518.5.


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## Contrarian

*MNCs to dominate tech hiring wave in India

*BANGALORE: The multinational companies will dominate tech hiring wave in India, during the next three calendars, giving their domestic counterparts a backseat.

MNCs alone are expected to hire 1,50,000 people in the country during calendar 2007 against around 60,000 recruitments they have cumulatively accounted for in the previous calendar.

The MNC hiring will more than double year-on-year in the next three years till 2009. That means, domestic tech firms, that have been going great guns with large-volume hiring during calendar 2004,'05 and '06, will put hiring on a backburner, say industry observers.

Accenture, Bearing Point, CapGemini, EDS, IBM, JP Morgan and Merrill Lynch, are the leading MNCs that are going to drive the hiring storm in India till end 2009.

Again, a whole host of MNCs like Cisco, Oracle, Dell, SAP, Deloitte, Perot Systems, Microsoft, VeriSign, British Telecom and Logica CMG and dozens of MNC outsourcing firms like Fidelity, Convergys, America Online, Barclays, Reuters, Ocwen Financials, Viteos and HSBC are expected to scale up their people front significantly in India.

A lot of high-value hiring is expected by over 50 different product development and design MNCs. In addition to all these, a large number of MNCs are waiting in the wings to enter India.

"So together, starting now, a lot of action is expected among MNCs in the coming few years" says BS Murthy, CEO, HumanCapital, a career consulting firm.

MNCs have excellent vertical domain competencies and great ability to win big and long-term deals, a constrast to desi big firms, that are still willing to negotiate $2 million or $5 million deals or busy scouting for peacemeal deals. In the coming years, the principal hiring will be by large and established players, who are capable of bagging big deals, say industry observers.

Irrespective of the diminishing cost arbitrage factor, India is increasingly becoming attractive for MNCs firms. In fact, share holders have been insisting MNCs to have presence in "critical geography" like India as they see a lot of value in the country in terms of availability of people who can work in multiple skills, technologies, domains and platforms," observes Anjan Dutta, CEO, CareerGraph, another recruitment firm in the city.

Also, all these years, campuses, by and large, have remained as an exclusive terrain for domestic firms. "This trend will reverse during this calendar as large number of MNCs will be hiring from campuses giving domestic players a dry run.

Who can resist job offers with a 30% or more premium salaries?," asks Mamtha Jain, a HR consultant.

Does this mean Indian firms will stay away from hiring?. "Tier ones like TCS, Wipro, Infosys, Satyam, HCL, Cognizant will hire to support and continue their 30% to 50% year-on-year growth. But again, the MNC hiring numbers will double in absolute terms. Small and medium firms will take the brunt, without being able to attract or retain talent," says Kris Lakshmikanth, CMD, HeadHunters.


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## Contrarian

*Infrastructure on upswing*

NEW DELHI: The boom in industrial activity is continuing and the lower IIP growth in October seems to have been a temporary blip.

At least the index of six infrastructure industries, which has a 26.7% weight on IIP, points to a revival in November.

Data shows that the six core sectors grew 9.5% during November 2006, compared with 5.7% during the corresponding period last year, pushing up the growth rate to 7.8% during April-November 2006, as against 5.2% in the year ago period.

What's more, the boom, though led by energy, seems to be all round.

The steepest growth was witnessed in petroleum refinery production which registered a growth of 16.4% in November 2006, compared with 1.5% in the year ago period. During the first eight months of the fiscal, petroleum, diesel, kerosene and other refined petro goods production went up 13.5%, as against a dip of 0.6% during April-November 2005.

Crude petroleum production rose 5.5% during April-November 2006, while it had dropped by 5.7% in the corresponding period in 2005.

The trend numbers indicate that Indian refiners depended more on imported oil to meet their higher demand.

Electricity generation went up 8.8% in November 2006, while it grew 7.3% during April-November 2006-07, compared to a rise of 4.9% during same period in 2005. But a poor show by coal could have hindered higher growth in power production.

Coal production rose 4.9% in November 2006, as against 6.9% in the same period a year ago. During April-November 2006 the sector recorded a 4.8% growth, compared with 6.1% during the corresponding period in 2005.

While economy is booming, coal and electricity have been the laggards and government and economists have blamed the two sectors for pulling down growth.

But what points to a boom in housing and construction, albeit at a lower pace, is the higher production of cement and finished steel.


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## Contrarian

*India, China to discuss FTA again*

NEW DELHI: India and China are going to give a fresh try to a bilateral trade agreement later this week, with officials from the two sides meeting in New Delhi, armed with a second opinion.

A joint study group (JSG), which analyses the feasibility of a trade pact, had earlier recommended a free trade agreement (FTA), but India had to put the idea on the backburner due to concerns of the domestic industry.

With Beijing keen on going ahead with an FTA, which will result in India and China lowering customs duty on products, the neighbours have assigned the job to independent agencies to look at the possibility of a pact.

The JSG had also recommended a second opinion by a joint taskforce, which will meet this week.

A report by National Council of Applied Economic Research (NCAER), mandated by the Indian government to analyse the impact of a pact, has found areas of comparative advantage for products from both India and China.

While both have advantages when it comes to textiles, silk and iron and steel, China seems to have an upper hand in the manufacturing sector.

This is precisely the fear that the Indian industry has and had last time round managed to convince the government that a trade pact for trade in goods will result in a flood of cheap imports.

Besides, a section in the government also thinks that a trade agreement with China may not be beneficial to Indian companies.

The no-sayers point to the fact that Beijing is still not treated as a market economy since it provides subsidised inputs and capital Ã¢â¬â thanks largely to the absence on any prudential standards.

Besides, with an artificially pegged currency and subsidies, many of which are hidden, the industry is of the opinion that Chinese exports have an unfair advantage.

While NCAER has used bilateral trade data to work out the areas of comparative advantage, the report is seen by the industry as largely a mathematical exercise which does not factor in the concerns on subsidies and an artificially pegged currency.

While officials may be talking of a regional trade pact, a treaty may still be some time away with the Indian political establishment expected to weigh the concerns of the domestic lobby before taking a final decision.

Negotiations for an agreement will only start once the JSG and the taskforce's recommendations have been cleared at the highest level.


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## Contrarian

*Birla makes his first retail takeover*

MUMBAI: Retail is on a roll, and that's rocking news for the consumer. All the biggies of Indian business are flocking for a share of your shopping cart.

The Tatas have been there for a while with Westside, Mukesh Ambani's gearing up for a huge splash with Reliance Retail, Sunil Mittal's tied up with Wal-Mart to bring the $315-bn American gorilla to India.

And now, Kumar Mangalam Birla, who along with the Ambanis and Tatas sits at the high table of India Inc, has served notice of his intentions by acquiring the 172-store Trinethra from the private equity firm of Indian Value Fund for an undisclosed amount.


This marks Birla's first foray into the retail space (outside of clothes brands such as Allen Solly, Van Heusen and Louis Phillipe, which are in a sense a by-product of his group's interest in textiles via Grasim and Madura Garments).

Speaking to TOI on Tuesday, Birla said, "The acquisition signals our long-term commitment to be in the retail sector.
We hope to bring a new consumer experience."

Asked what made him zero in on Trinethra, which has a strong presence in the four southern states, the AV Birla Group chairman, who's been camping in Bangalore for the past few days said, "It has strong brand value, very good locations and has been growing rapidly. We've been talking to them for about a month and a half."

Birla has acquired 90% in Trinethra through Aditya Birla Retail, the unlisted retail arm of the group; the remaining, token 10% will stay with India Value. The Rs 40,000 crore group's interest in entering retail has been known for a while.

Under the corporate umbrella of Hyderabad-headquartered Trinethra Super Retail Ltd, there are two main brands, Trinethra and Fabmall, selling personal care, home products, food and grocery in the convenience format.

Birla said the management of Trinethra, headed by CEO Pranab Barua and MD George Thomas, would remain unchanged. The chain would maintain its southern focus, at least for the time being.

Bangalore-based grocery chain Fabmall India, which was acquired by Trinethra two years back, is a wholly-owned subsidiary.

The consolidated turnover of Trinethra Super Retail is said to be around Rs 250 crore, and, at current valuations, Birlas are estimated to have acquired the stake at around Rs 340 crore.

Fabmall, an online retailer start-up which commenced operations in 1999 during the dotcom boom, was acquired in 2004. Idea to set up Trinethra was first conceived by K Anjaneyulu and his wife, who took the supermarket firm from a fledgling stage in 1986 to what it is today. They have since have exited the firm.

India Value Fund is managed by private equity fund GW Capital which is sponsored by former GE Capital CEO Gary Wendt, HDFC, IDBI, and Ambit Corporate Finance.

It was set up with the intention to pick up stakes and manage mid-sized companies in the biotechnology, telecom, pharma and retail space.

GW Capital's interest in Trinethra was purely from an investment perspective. GW Capital had an exit option after five years.

In 2001, ICICI Ventures had picked up a minor stake in Trinethra through an investment of Rs 8 crore. The firm exited at Rs 18 crore by selling the stake o India Value Fund.

Trinethra became a public limited company in 1998. It had plans to expand into markets like Delhi, Mumbai, Pune, Bhubaneshwar and Bhopal.

As for Aditya Birla Retail, its strategy is to get into multi-format retailing, with both small and large stores. The group is chalking out an organic growth path even as it explores options to grow inorganically.

Asked if the group was eyeing any other acquisitions in the retail space, Birla said, "There's nothing on the radar at the moment."

To meet its goals, it is in the process of setting up a team under CEO Sumant Sinha, and is said to be attracting talent from across sectors like FMCG and retail.


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## Contrarian

*Sensex breaches all-time high, closes @ 14,015*

The Sensex closed at an all-time high of 14,014.92 after a choppy session on Wednesday, as buying interest resumed for index pivotals at lower level. The market witnessed a sharp rally in the first two trading session of calendar year 2007.

At closing, Sensex was up 72.68 points or 0.52% at 14,014.92. The BSE Sensex struck an all-time high of 14035.67 in mid afternoon trade surpassing its previous all-time high of 14,035.30, which it had struck on December 6, 2006. The Nifty, meanwhile, closed at 4,024.05, up 16.65 points.

The market staged a smart recovery in the second half of the day's trading session, after slipping to an intra-day low of 13,897.42 in mid-morning trade.

The market-breadth was strong, as buying continued for small-cap and mid-cap stocks. For 1,695 shares advancing on BSE, 933 declined. Just 64 shares were unchanged.

The BSE clocked a turnover of Rs 4,286 crore as compared to Rs 3381 crore on Tuesday (January 2).
Among the 30-Sensex pack, 21 advanced while the rest declined. In NSE, there were 619 advances and 379 declines.

Among the sectoral indices, consumer durable stocks climbed 1.61%, IT stocks advanced 1.52%, pharma stocks rose 1.42% while FMCG stocks declined 0.71% and oil and gas stocks fell 0.02%.

The major market movers on Sensex were Ranbaxy which gained 3.75% to Rs 413.35; Bajaj Auto rose 3.66% to Rs 2,839; Cipla rose 2.56% to Rs 258; TCS jumped up 2.28% to Rs 1,277.05 and Infosys rose 1.87% to 2,315. Dabur, Ranbaxy, Bajaj Auto, Cipla and TCS were the major gainers in the NSE.

The major BSE losers were HLL which declined 2.01% to Rs 212.10; ACC fell 1.73% to Rs 1,073.50; Tata Steel was down 1.61% to Rs 470.70; Hero Honda fell 1.29% to Rs 774 and ITC fell 1.02% to Rs 175.05.

Sebi has advised the stock exchanges to freeze the payout in Nissan Copper Ltd scrip and transfer it to the trade-to-trade segment, according to reports. The advice followed 'unusual price movements and turnover' in Nissan Copper shares following its stock market debut on Friday. Shares in copper pipe and tubes maker Nissan Copper, which listed at a 9.7% premium at Rs 42.80, touched a high of Rs 154.55 before closing at Rs 115.20 on Tuesday.

Foreign funds, a key player in powering the market to record highs, invested nearly $8 billion in Indian equities in 2006, compared to a net $10.7 billion in 2005.

Most of the Asian markets were trading with gains on Wednesday (January 3, 2007). Hong Kong was up 0.51% and Singapore was up 1.74% whereas Seoul Composite slipped 1.81%. US markets were closed on Tuesday (2 January).

Oil prices eased on Wednesday in Asian trade. New York's main contract, light sweet crude for delivery in February, slipped 18 cents to $60.87 a barrel.


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## Contrarian

*Simple solution: Need more moolah*

Except the rare ode to Aryabhatt and Ayurveda, there used to be little to write home about when it came to Indian science. After years of being condemned to the boondocks though, things don't look as bleak anymore.

After a few hiccups in the early part of this decade, research has finally started trickling out of Indian labs, particularly in biotechnology, life sciences and computing.

Take Reliance Life Sciences. A cursory look at the patents it has filed for indicates significant work on the stem cell lines it owns. The outcome of this work could eventually translate into breakthroughs for diseases like Alzheimer's.

With ethical issues in the First World constricting stem cells research there, India has emerged as a serious player in the field.

Then there are pha-rma companies like Dr Reddy's In spite of setbacks, the company is pushing ahead with trials on new drugs. One of them, the company says, can keep hypertension, cholesterol and diabetes under check.

Whether it makes the cut finally or not remains to be seen. But the point is, they are pushing the boundaries.

And it isn't the big boys alone that are pushing. There are smaller ones like the little-known IITIAM Systems in Bangalore. Many of the ubiquitous MP3 players are powered by software created at IITIAM Systems.

Add to all of this the kind of work being produced by the India labs of dozens of companies like Microsoft, Intel, Yahoo, Google, Amazon and IBM.

Many of the patents filed by these multinationals are based on work done in this country. A good part of Intel's latest chip Intel Core 2 Duo was designed out of Bangalore. The new versions of Yahoo's instant messenger were coded in India. 

Not so surprisingly, the best of Indian science today is coming out of private enterprise. Arrogance. What else explains a lie that continues to do the rounds as an email, especially before the Independence Day.

It claims, 12% of all scientists in the US are Indian, 34% (or some such obscene number) of technical personnel at NASA are of Indian origin, 32% of Microsoft's engineers are from here, and so on.

The message was so pretty, it even found its way into parliamentary debate on India's capabilities. Business leaders quoted these figures while addressing seminars.

The truth is, about 5% of NASA's employees are of Asian descent (Indians being a subset of this group). A senior official at Microsoft grins rather

condescendingly when you ask him the truth. As for Indian doctors tending to all of America, well, all we can say is that the Indian inferiority complex that spreads these myths needs urgent cure. 
For a dose of reality, consider this. According to Thomson Scientific which tracks scientific papers from across the world, between 1999 and 2003, 86,440 papers had at least one author address in India.

The highest percentage of these papers appeared in journals classified in the field of agricultural sciences. Also, the relative impact of published research from India registered below the world average.

Take this arrogance away and what you are left with is apathy. This year's budget for science and technology research is $4.5 billion. Optimists say it is a 16% increase over the last year. Realists call it peanuts.


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## Contrarian

*When service = pure satisfaction*

Gone are the days when you had to depend on government agencies for services, be it telephony, transportation, power or healthcare.

Delhi-based Bharti Tele-Services is already India's largest mobile telephony company replacing state-owned behemoth Bharat Sanchar Nigam.

In 2006, Jet Airways became India's biggest domestic air transport company, beating IA. And Mumbai-based Thyrocare administers more thyroid tests than all Indian hospitals put together.

In the 70s and 80s, large infrastructure projects were solely reserved for state-owned companies. Now, private entrepreneurs can build cities, airports and ports.

Reliance Industries' chairman Mukesh Ambani and partners have planned two industrial cities on the outskirts of Delhi and Mumbai. And Delhi-based Ansal Housing is building a 10,000-acre township in Uttar Pradesh.

There are twin positive effects from the increasing private participation in services. On account of better efficiencies brought in by private players, cost of services has come down dramatically.

Indian telephony costs are among the lowest in the world and flying in India is cheap despite very high fuel prices. Low prices have spurred a dramatic expansion of various markets and this is expanding the economy.

Taxes from the services sector have given the government a big new source of income to fund its large outlays for education and healthcare.

The growth of the Indian private sector services companies comes at a time when the government is slowly liberalising foreign ownership. Many of India's manufacturing companies came up at a time when foreign ownership was a big no-no which allowed local conglomerates to build and control their empires.


A decade after foreign companies were allowed to own telecom services, foreign capital has picked up large states in banking, insurance and telecom services. A combination of government policy and a growing need for funds brought in efficient foreign capital into the service sector. 

Foreign shareholders already own 79% of HDFC, India's largest housing finance company and 45% of ICICI Bank, the country's largest private sector bank. International telecom companies have big stakes in local telecom firms.

As is usual in most economies, it is the service sector growth that will drive the Indian economy. Indian mobile telephony is expected to triple in size in the next few years while the insurance business is in the take-off stage as is the retail sector.

The government is set to liberalise each of these sectors under pressure from the WTO. If Indians don't invest more money in these sectors, they will eventually end up owning less of their economy.

As in manufactured goods, quality is vital in services. Despite offering just the same telephony or banking services, multinational companies attract a premium over Indian counterparts.

It is not just scale that Indian companies should vie for but for total customer satisfaction if they want to remain in business for long.


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## Contrarian

*Time to net big bucks, again*

The story of entrepreneurship, as any middle-class Indian understands it today, can be distilled down to one name. Rajesh Jain.
After latching on to the internet in 1994 and setting up India's first portal, he managed to sell IndiaWorld, the country's first general interest portal, for $415 million to Ramalinga Raju's Satyam in 1999.

The euphoria that Jain generated saw people chuck lucrative jobs to set up something, anything. Believe it or not, one of the ideas floated then even included a website dedicated to dogs.

Much water has passed under the bridge since then. The boom that Jain inspired went bust and took a few thousand entrepreneurs down. The buzz that used to permeate the business incubators at the premier IITs gave way to silence.

Venture capitalists (VC) used to doling out money hand over fist to anybody with a remotely smart idea clamped up. But one thing stayed middle class India's romance with entrepreneurship.

And that romance blossomed in 2006. The numbers are witness. In the first nine months of 2006, VCs made 53 early stage investments worth $355 million. This is twice what was invested in the last two years put together.

If you were to include funds looking to invest at every stage, then the first six months alone totted up a staggering $1.8 billion. Meanwhile, India's share of the Asian total moved up to 11.4% of the $15.75 billion available through the region in the first half of 2006. Suddenly, entrepreneurship is back That it is all right to fail is a lesson that hasn't been driven down hard enough. Take the case of this undergraduate student at IIT Mumbai a few years ago. He worked on his start-up by night at the campus incubator.

He once told this writer, "I wonder if anybody would give his daughter's hand in marriage to a start-up junkie." Back then, though, his hands got singed in the bust.

Unable to take the ignominy, he went West, got himself a job in a telecom company, married, now lives a quiet middle-class existence, and earned respect back home. The fear of failure still haunts the middle class.

Many entrepreneurs, who woo funds, work under the pressure that one mistake will be a stigma they may have to carry for years. As a consequence, technology entrepreneurs don't think outrageously enough.

Most business models are still offering services which assume cheap labour will be the lever around which the Indian future rests.

Even if VCs are back funding early stage companies big time, most look chiefly at IT entrepreneurs. Non-IT folks still don't stand much of a chance when it comes to fund-raising sweepstakes. Men like Captain C Y Gopinath of Air Deccan are all too rare


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## Contrarian

*Sweet success in nuts & bolts*

Statistics. They can't be all wrong. Look at it any which way, Indian manufacturing has managed to put up a stellar performance. Profit growth has beaten sales growth, putting more money in the hands of companies to spend.

Many of them have repaid expensive debts and owe less than ever before. In short, the manufacturing sector is in good health.

Much of the spurt in sales was propelled by exports to western markets, which also shows that the quality of Indian manufacture has increased dramatically.

Indian companies exported more drugs and agro products that passed muster with the tough US Food and Drug Authorities than ever before.

Pune-based Bharat Forge makes a quarter of all the front axles that go into heavy trucks globally while yet another company from Pune, Suzlon, is slowly emerging as the global powerhouse in windmill manufacture and implementation.

The heartening point is that Indian exports came from skill intensive manufacturing sectors as against the seemingly volume-driven unremarkable Chinese exports.

Last year, spurred by the new wealth, Indian companies shopped for expensive assets overseas. Till October this year, Indian companies shopped for a whopping $15.72 billion, three times more than what they bought in the previous year.

Bankers now appear more confident of backing Indian companies. Suzlon took just 10 days to arrange finances for its $565-million acquisition of Swedish company, Hansen Transmissions.

Big names in investment banking are helping Tata Steel in its $8-billion bid for Corus, an Anglo-Dutch steel-maker five times its size. There is enough to gloat about.Originality. Take a short trip on the road and Indian manufacturing will stand a bit exposed.

Tata and Ashok Leyland trucks are not just plain noisy and wobbly but after all these years the two companies have not managed to design workable tail lights that will tell you which way the monsters are about to turn.

Despite employing top class IIT engineers and smart-brained chemists, Indian companies have very few patents compared to their counterparts in the West.

They just took the argument for not re-inventing the wheel a bit too far as a legitimate excuse for copying or improvising existing products. 

Tata Motors and Bajaj Auto have no doubt done well designing a cheaper local alternative to imported cars and motorcycles but their best resources are employed in finding new ways of doing old things rather than inventing.

Indian manufacturing's contribution to technology and processing is not growing. In 2006, profits from incremental sales did not come from smart technologies but from cheaper finance and lower administrative costs.

Exporting companies were only too happy to play with the labour arbitrage. In contrast, multinationals like Siemens, ABB and Novartis make far more margins on the products they sell, thanks to the proprietary technology.

A few companies, like Delhi-based compact disc maker Moser Baer, and the Tatas, whose bold one-lakh-rupee car is coming soon, are trying hard but there is still a long way to go.


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## Contrarian

*Babus, bribes & red tape*

*The good*

Here's something to reinforce faith in our babudom: Transpar-ency International has complimented India for improving its ranking from 88 to 70. Government has become more transparent: Thanks to increasing use of e-governance to announce tenders for public procurement and the introduction of the Right to Information Act.

These have made it more difficult Ã¢â¬â albeit not impossible Ã¢â¬â for officials to mask biased decision-making.

Also, there have been attempts at reform: Starting from Ricketts' report on civil establishments and salaries in 1866 to Veerappa Moily's 2005 report, Unlocking human capital: Entitlement and Governance, there has been no dearth of blueprints.

*The bad*

Despite the Centre and states spending Rs 3,000 crore a year on initiatives to make administration faster and transparent, 75% respondents in a Transparency India survey said corruption has increased in the last year; 62% said corruption is not hearsay but a fact of our lives.

India's 2 million babus Ã¢â¬â out of a workforce of 19 million government employees Ã¢â¬â often obstruct, rather than serve public good.

Common people pay an estimated Rs 21,000 crore a year in petty bribes for 11 most-used services like the police, judiciary, land, municipal and health.

In fact, a UNDP report says if corruption came down to Scandinavian levels, growth would jump 1.5% and FDI by 12%.

The police is seen as most corrupt, followed by the judiciary. In 2005, chargesheet rate for homicide was 85%, but 40% cases were pending investigation.

In the same year, conviction rate for murders was 35%. Overall, conviction rate in IPC cases has declined from 64.8% in 1961 to 42.4% in 2005. As many as 144 police custodial deaths (out of 359 in the past three years) were reported in 2005, but few cops have even been charged.

Our food subsidy schemes are a perfect illustration of bureaucratic bungling: Rs 150 million is spent on PDS, which targets have-nots, including a slum population of 42,578,150 in 640 cities. But not all of the subsidy goes where it is intended: 31% of foodgrain and 36% of sugar leak into the black market.

There are 4,000 municipalities. Most don't have computerised land records, services are poor and corruption is rampant.

Though labelled an IT powerhouse, India lags way behind countries like the US and UK which are now introducing metadata, or data about data, to help index online searches.

A cover-up culture, strengthened by constitutional protection, shields government servants. A CVC list of officials against whom action has been sought numbers barely 30, and most of them are low-ranking officials.

*TOI view*

Political patronage has reduced some sections of the bureaucracy to mere tools of politicians. India's poor have a vote, but are not fully empowered.

For 30% of India's population that lives on less than $1 a day, and roughly double which earns less than $2 daily, governance is a mirage.

For most, a tout is a better option than a long queue at government offices. Despite strong court interventions in landmark cases and media scrutiny, governance is at best patchy: better in urban areas, while rural India has to suffer its tyrannical local officials. Also, little is being done to cut red tape, inefficiency and corruption


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## Contrarian

*India-born doc is BBC chief*

LONDON: In a rare distinction, Dr Chitra Bharucha, an Indian-born haematologist, on Monday took charge as the acting chairperson of the British Broadcasting Corporation, becoming the first woman and first Asian to head the giant organisation.

Incidentally, the BBC Trust, of which Bharucha is the acting chairperson, took over the responsibility of running the organisation from BBC Board of Governors. The post of the chairman fell vacant following the resignation of Michael Grade after he decided to join rival ITV.

Born in Madurai, Bharucha has lived in Britain since 1972. A haematologist by profession, she has served as deputy director, Northern Ireland Blood Transfusion Service, and consultant clinical haematologist, Belfast City Hospital.

She shifted from a career in medicine to media in 1996 when she joined the BBC Broadcasting Council for Northern Ireland, a position she stayed in till 2003.

She had also served as the Northern Ireland member of the Independent Television Commission from 2001 to 2003. In 2004, Bharucha was appointed to the Advertising Standards Authority (Broadcast) Council, where she currently chairs the advisory committee on animal feeding stuffs for the Food Standards Agency.


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## Contrarian

*It's a busy season for BPOs*

BANGALORE: When the clock strikes 12 to ring in the New Year, Anoop Sridhar, a BPO executive in Bangalore, could well be selling a laptop to some customer in the US or the UK.

This holiday season, the Indian BPO workforce has got busy making calls rather than answering queries. Thanks to the huge appetite for gifts and discounted deals during year-end holidays like Thanksgiving, Halloween, Christmas and New Year, BPOs in India are seeing a huge uptake in telesales and telemarketing.

Nearly 70% of the workforce is engrossed in selling products and services to these customers.

It is this holiday season when most companies peak sales. Doing this job for them are the Indian BPOs.

A number of BPO agents have been engaged in selling laptops, financial instruments, insurance products, credit cards, air tickets, hotel rooms, holiday packages, or internet services to clients in the US, the UK and Europe.

November and December are packed months as far as outbound sales are concerned for Indian BPOs.

These are the months when people in US and Europe make purchases, says Ravi Kiran, a BPO executive. While agents at Barclays, Reuters, Ocwen Financials and Viteos are busy selling travel or medical insurance products, companies like Dell and HP are making the most when it comes to pushing their products.

"We do have a few teams that are looking into technical support. But close to 80% of the calls are outbound and this indicates the kind of sales witnessed during Christmas and New Year," said a Dell employee.

Although buying decisions are made much earlier, actual sales start around October and continue till the New Year.

According to sources at HSBC, sale of insurance products is most common as people travel a lot during the holiday season.


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## Contrarian

*Delhi is world's BPO capital*

NEW DELHI: Indian cities led by DelhiÃ¢â¬â¢s national capital region have the top seven slots in a global ranking of competitiveness of cities as outsourcing destinations. Close on the heels of Delhi are Bangalore, Hyderabad and Mumbai, according to a study released by US-based consulting firm neoIT.

The other three Indian cities at the top of the list are Pune, Chennai and Kolkata. Ho Chi Minh City (Vietnam), Manila (Phillipines) and Shanghai (China) are the three non-Indian cities which figure among the top 10 offshoring destinations.

Beyond that piece of good news, there is a word of caution. According to the study, in the next three to four years, several cities in eastern Europe and China could become major rivals to Indian ones as outsourcing destinations. In fact, the study projects that Warsaw (Poland) would be right at the top of the list by then, along with two Indian cities, Kolkata and Hyderabad.

Delhi, Mumbai and Bangalore could have fallen well behind by that time, with Mumbai and Bangalore likely to be not even in the top 15, while Delhi too could drop out of the top 10.
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## Neo

*India sees record 9 per cent growth* :thumbsup:

NEW DELHI: IndiaÃ¢â¬â¢s economy will likely grow close to a record 9 per cent this fiscal year, but rising inflation was a cause for concern, the countryÃ¢â¬â¢s finance minister said on Tuesday.

Finance Minister P Chidambaram said he was also worried that some industries were persistently underperforming despite the buoyancy of the broader economy. 

IndiaÃ¢â¬â¢s economy expanded 9.1 per cent in the first half of the current fiscal year that ends in March 2007, and Chidambaram said he expected full-year growth to be close to 9 per cent. That would be a record and bring IndiaÃ¢â¬â¢s economic expansion -averaging at more than 8 per cent over the past three years ÃÂ± close to the Chinese. 

Ã¢â¬ÅWe look back with considerable satisfaction in what has been achieved in the past year ... (but) the only dark cloud as the year came to a close was rising inflation,Ã¢â¬Â Chidambaram told business leaders at the annual meeting of the Federation of Indian chambers of Commerce and Industry. 

IndiaÃ¢â¬â¢s headline inflation rate climbed to 5.5 per cent in the week ended December 23, despite falling fuel and raw material prices in recent weeks. 

Chidambaram said the latest upturn in inflation was mostly driven by a rise in prices of some manufactured products. Ã¢â¬ÅEven a 4 per cent inflation is unacceptable,Ã¢â¬Â Chidambaram said, warning rising inflation could push up interest rates and slowe conomic growth in coming years. IndiaÃ¢â¬â¢s central bank has already increased some key rates and commercial banks have increased their lending and deposit rates by 50 to 100 basis points in recent months. 

Chidambaram said he was also concerned over the uneven spread of the growth process in the manufacturing sector. While overall manufacturing output registered about 10pc year-on-year growth in the first two quarters of the current fiscal years, several industries showed contraction, he said. 

These industries included food processing, paper, leather, chemicals and basic metals. He asked business leaders to look into why production was slackening these sectors. Some of these industries are labor-intensive and a contraction could fuel unemployment.

http://www.thenews.com.pk/daily_detail.asp?id=38280


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## Neo

*IndiaÃ¢â¬â¢s current account gap may widen to $13bn *

NEW DELHI: IndiaÃ¢â¬â¢s current account deficit is expected to widen to $13.4 billion in fiscal year 2006/07 from $9.2 billion in 2005/06, the prime ministerÃ¢â¬â¢s economic advisory panel said on Thursday.

The panel sees the current account deficit at 1.5 per cent of gross domestic product (GDP) in the year to March-end 2007, higher than 1.2 per cent in 2005/06, the prime ministerÃ¢â¬â¢s office said in a statement.

Last month, government data showed the deficit deepening to $6.93 billion in the July-September quarter from a revised $4.76 billion in the previous quarter as higher oil prices hit the trade balance.

The deficit was $11.7 billion during April-Sept.

The panel expects IndiaÃ¢â¬â¢s exports to reach $128.4 billion and imports to stand at $194.3 billion during 2006/07.

Ã¢â¬ÅWith the increase in exports and imports, the ratio of total trade to GDP, signifying the extent of global integration of our economy, will be 35.9 per cent this year, up from 32.8 per cent last year,Ã¢â¬Â it said.

Ã¢â¬ÅIf we also include software exports, the ratio this year will go up to 39 per cent.Ã¢â¬Â

The panel said that for the first time in several years, net foreign direct investment flows are projected to be larger than portfolio capital flows.

Ã¢â¬ÅNet FDI this year will be around $9 billion, up from $4.7 billion last year.Ã¢â¬Â

The panel said the balance of payment surplus would be $22.6 billion in 2006/07, up from $15.1 billion last year. Of this, $8.6 billion has already been absorbed in the first half year.

Ã¢â¬ÅIt is estimated that another $6-7 billion would have come in Oct-Dec, leaving a like amount to be absorbed in this last quarter,Ã¢â¬Â the panel said. Ã¢â¬ÅThe stance of monetary policy has to take this into account.Ã¢â¬Â The central bank will next review monetary policy on Jan. 31.

http://www.thenews.com.pk/daily_detail.asp?id=38545


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## Contrarian

*Essar to invest Rs 10,500 cr in Hazira SEZ

*AHMEDABAD: Essar group said it will invest Rs 10,500 crore in a Special Economic Zone at Hazira and augment the steel manufacturing capacity to nine million tonnes, besides expanding the Vadinar refinery. "Our investments in the SEZ at Hazira will be over Rs 10,500 crore," Essar group chairman Shashi Ruia said.

He said the group has been approached by major automobile groups like Nissan and component manufacturers like Manineto to set up facilities in its Hazira SEZ.

Ruia also said international petrochemical giants had evinced interest for setting up base in its SEZ at Jamnagar.

He said the group would build a similar SEZ in Vadinar and also expand and diversify the petroleum refinery. "We will also create infrastructure for petrochemical and chemical complexes and downstream and ancillary industries," he said. The group last year commissioned a 10.5 million tonne refinery at Vadinar. Ruia said the refining capacity will go up to 14 million tonnes soon and further scaled up to 32 million tonnes in a few years.

Talking about the port in Hazira, the Essar chairman said, "We will expand the cargo handling capacity at our port to 35 million tonnes to cater to the increased requirements of industry, which will come up in our SEZ."

The Nikkei newspaper had recently reported the Japanese auto maker Nissan planned to build a 200,000-unit-a-year factory in India with an initial investment of $420 million to $500 million.

The plant would begin operations in 2009 and gradually step up capacity to 400,000 units annually, the paper had said. Around a third would be sold in India, and the rest exported to Europe and other regions, the paper had said.

Nissan had shortlisted two or three port cities in the west and south and would make a decision this month, the Nikkei had said.

Nissan, which has a very small presence in India, has an agreement with Suzuki Motors to supply Nissan with a new small car, mostly for export to Europe, starting in 2008.


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## Contrarian

*IOC plans to invest Rs 2,000 cr in JV

*PANIPAT: Indian Oil Corporation said it plans to invest about Rs 2,000 crore in a joint venture with Reliance Industries for retailing natural gas to households and automobiles.

"We are in talks for a 50:50 JV for city gas distribution project along the pipeline Reliance Industries is building from its KG basin field," IOC Chairman Sarthak Behuria said.

RIL is building pipleines from Kakinada in Andhra Pradesh to Chennai in South, Ahemdabad in West and Haldia in East.

The proposed JV will supply piped gas to households and industries and CNG to automobiles in cities falling along the route of these pipelines. Behuria said per city investment would be around Rs 200 crore and initially 10 cities have been identified.


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## Contrarian

*Exports of petro goods have touched $10b: Deora

*PANIPAT: India's petroleum products exports jumped to $10 billion in the first six months of the current fiscal and are expected to top $20 billion for the full fiscal, government said.

"Petroleum sector emerged as the number one exporter, surpassing the traditional gems and jewellery exports," petroleum minister Murli Deora said at a function here organised to dedicate IOC's Panipat refinery's expanded capacity. Oil products' exports in April-September period last year were $8.3 billion.

The capacity expansion of Panipat Refinery, from 6 to 12 million tonnes per annum meets the petroleum needs of the states of Haryana, Punjab, Jammu & Kashmir, Himachal Pradesh, Uttaranchal, Rajasthan, UP, Chandigarh and Delhi, Deora said.

This capacity expansion required an investment of Rs 4,300 crore, he added.

The year 2006 witnessed an addition of 16.5 million tonnes refining capacity in the country, raising the combined capacity of the 19 refineries to 149 million tonnes per annum.

Deora said 2006 saw a spurt in oil discoveries in India with a total of 31 discoveries involving companies like ONGC, OIL, RIL and Cairns Energy

Indian companies also achieved significant breakthroughs in acquiring oil & gas blocks in several countries like Vietnam, Cuba, Nigeria, Brazil, Gabon, Libya, Yemen, Myanmar, Iran and Syria.


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## Contrarian

*Co results to push rally*

MUMBAI: With Infosys revising its fourth quarter guidance after announcing a result that met the street's expectations, brokers feel other frontline corporates would also meet analysts' expectations.

Other than these, expectations of a tax cut in the budget and any cut in the interest rates in the US would also keep the rally going, Manish Kanchan, CEO, Ambit Capital, said. ''I am expecting healthy foreign fund flows based on these factors," Kanchan said. Provisional data released by the bourses showed that FIIs had net bought stocks worth nearly Rs 400 crore on Friday, compared to net outflow of about Rs 2,100 crore between January 2 and January 11.

Another factor that is giving increased confidence to market players is that Friday's rally was accompanied by good volumes. Compared to the current month's average daily turnover of about Rs 4,300 crore, the day's turnover was a little over Rs 4,600 crore.

After a long time, the combined turnover of the cash and derivatives segments on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) went past the Rs 50,000 crore mark on Friday, to over Rs 51,000 crore, marketmen pointed out.


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## Contrarian

*Sectoral growth looks promising*

NEW DELHI: As industry in November posted a robust growth, the growth was all- round. Continued high rate of growth by basic goods, intermediates and capital goods, which are used for production, also augurs well for industrial production.

The government can also breathe easy with 13 of the 17 sectors showing double-digit growth rates and output for three others Ã¢â¬â jute and non-cotton vegetable fibre, wood and wood products and rubber and plastics Ã¢â¬â rising between 8.4% and 9.7%. Only metal products saw a dip in production. Of the 13 sectors posting double-digit growth, basic metals and alloys (25.4%), rubber, plastic, petroleum and coal products (23.2%) and transport equipment (21.8%) were at the top of the heap.

But it is the data for April-November 2006 that is cause for concern since some sectors are not performing as well as the others, and most of the laggards are employment-intensive industries. Food products (1.9%), jute and non-cotton vegetable fibre (1%), furniture and fixtures (2.4%) and leather and leather goods (-3.7%) are the poor performers, while nine of the 17 sectors reported double-digit growth. Basic goods output saw a 11.6% jump in production during November 2006, as against 4.7% during the correponding period last year, while capital goods index rose 25.3% during the period.

Similarly, intermediate goods, or inputs and components used in manufacturing, saw a 16.7% higher output, compared with a 0.6% dip in production in November 2005.

Even during the first eight months the three sectors have fared well. While basic goods production increased 9.3%, capital goods output was up 16.1% and intermediates 10.9%. ''Indian economy is indeed doing well, and the growth in industrial production reflects that," said Mahesh Vyas, ED of Centre for Monitoring Indian Economy (CMIE), an independent economic think-tank.

Vyas said the comparison should be tempered by the fact of lesser working days in October due to the festival season. Demand has egged on companies to produce at close to maximum capacity as the great Indian middle-class splurges on cars, consumer durables, travel and communication. Companies are expected to spend about $200 billion over the next 5 years to expand capacities.

''The capital expenditure lined up is more than I have ever seen in the past," Vyas pointed out.


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## Contrarian

*Inflation at 5.58% will bother govt*

NEW DELHI: Inflation seems to be the only worry for the government in an economy that is otherwise booming.

Data released on Friday estimated inflation, measured by wholesale price index, at 5.58% during the week-ended December 30, as against 5.48% in the previous week. The increase was on account of higher prices of primary articles, furnace oil and naphtha. This is the first time in the current financial year that provisional numbers breached the upper-end of the 5-5.5% inflation projected for the fiscal. If trends in the previous weeks are anything to go by, inflation could actually be higher during the period when the numbers are revised after eight weeks.

Unlike previous weeks, when it was sugar, wheat and dal which were driving up prices, during the week-ended December 30, cereal prices remained unchanged, while pulses, barring arhar, saw a dip in wholesale rates. Similarly, vegetable prices fell 1.3%, but fruits, egg, meat and fish were costlier.

While a part of the overall rise may be due to a low base last year, the prognosis is not too good. Saumitra Chaudhuri, a member of the Prime Minister's Economic Advisory Council, said inflation could touch 6% over the next few weeks.

A part of the increase is due to heavy demand, which may be prompting companies to raise prices, as is seen in the automobile and white goods sectors. High growth usually comes with high inflation, said D K Joshi, principal economist with rating agency Crisil. This is something that FM P Chidambaram too pointed out earlier this week though the latest data did not point to any change in manufactured goods prices.

On Friday, FM reporters in Panipat that inflation was within "expectations" but the government would take necessary measures to check price rise. He said inflation had been triggered by supply side constraints. "But things have eased now. Sugar prices have stabilised."


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## Contrarian

*'Sunil Mittal Asia's Businessman of Year'*

NEW YORK: India's Sunil Mittal has been adjudged Asia's Businessman of the Year by US magazine Fortune for steering his telecom business in the world's fastest growing wireless market. In a lead article in its latest issue, Fortune said after establishing Bharti Airtel as India's number one mobile service provider, Mittal is now forging his "most audacious" foreign partnership yet.

"In November, he announced that Bharti will team with Wal-Mart to transform India's under-developed retail market," the report said. The magazine said it was an easy choice to declare Mittal as Asia's top leader for his business acumen and some crucial agreements he has signed in recently.

Fortune said that on his new foray in retail sector, Mittal has disclosed he would open hundreds of stores over the next five years in various formats and predicted an investment of more than $1 billion.

Bharti and Wal-Mart, the world's largest retailer, will form a JV to take on back-end activities in which overseas investments is permitted, including wholesale, logistics, supply chain management and distribution.

The telecom venture is expected to announce a revenue of $4 billion by the end of this financial year, up from $509 million in 2003, it said, adding, Bharti Airtel has emerged as India's fourth most-valuable firm and Mittal one of India's richest men.

Ascribing much of his success to his refusal to tie up with other Indian firms, Mittal said: "It is very hard for two Indians to partner well".

Fortune said Mittal's $750 million outsourcing contract to IBM included farming out the bulk of Bharti's ITservices, including billing, management of customer accounts and even operation of its intra-net. Fortune quoted Mittal: "I got calls from around the world saying, You've gone nuts, this is the lifeline of your business, it's something you can't afford to lose."

This allows Bharti to do what it does best Ã¢â¬â marketing, devising new services for its customers and searching for new business opportunities, says the report. What's truly innovative about Bharti's approach is that it reverses the stereotype about outsourcing Ã¢â¬â that it's something Indian firms do for big US and European multinationals, the magazine said.

Mittal struck profitable alliances with manufacturers from Japan, Taiwan and Germany. More recently he launched a JV with France's AXA to sell life insurance products in India. He tied up with the Rothschild family to export fresh fruit and vegetables grown in India to supermarkets in Europe, the magazine added.


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## Contrarian

*Bankers welcome SLR cut move

*MUMBAI: The government's intentions to reduce the statutory liquidity ratio (SLR) for banks from the current 25% has been welcomed by bankers. However, they believe the government passing an ordinance will not work unless RBI sees merit in slashing the SLR. They are unanimous the RBI reducing the SLR immediately after a CRR hike in December will send a strange signal to the markets. The RBI had raised the CRR to mop up excess liquidity in the banking system.

According to the Banking Regulation Act, every bank is required to maintain at the close of business every day, a minimum proportion of their deposits as liquid assets in the form of cash, gold and approved securities. The ratio of liquid assets to deposits is known as SLR.

''The market is expecting a 2% cut in the SLR, but the issue is whether the RBI will cut it in the short term as it will offset its recent move of hiking the CRR. Even if the ordinance is cleared, the RBI will be in no hurry to slash the SLR," said Abheek Barua, chief economist, ABN Amro Bank.

At present, SLR levels of most banks are well below the stipulated 25%. As a result, they are buying long tenure government paper, a boon for the government as it enables it to raise funds to meet its fiscal deficit. The RBI will not be in any hurry to cut the SLR requirement for banks unless there is clarity on the government borrowing programme in 2007-08. The borrowing programme will be out only after the budget. That is why the market is of the view that the SLR cut will only happen in the long run.

''If the RBI cut SLR levels, it will be a great relief to banks. The SLR requirement in the booming credit market is eating into the lendable resources of banks. With credit growth outstripping the growth in deposits, banks have been grappling to mobilise resources to meet credit need," said chairman of a PSU bank.


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## Contrarian

*Investors rushing to Gujarat

*AHMEDABAD: When Reliance group chairman Mukesh Ambani got up to announce investments worth a whopping Rs 67,550 crore in Gujarat as the who's who of India Inc looked on, Vibrant Gujarat's stock soared to dizzying heights on Friday morning.

Announcements of big ticket deals were made in rapid succession at the Vibrant Gujarat Global Investors' Summit 2007 by top India Inc honchos, right from Tata group's Ratan Tata to ICICI Bank's KV Kamath, Essar group's Shashi Ruia, A V Birla group's Kumar Mangalam Birla, Adani group's Gautam Adani and Torrent group's Sudhir Mehta

By end of the day one of two-day meet, the state had inked a mind-boggling 104 MoUs worth Rs 2,51,967 crore across sectors like oil and gas, power, chemicals and petrochemicals, ports and SEZs.

Leading the race were the centre pieces of Gujarat's future development Ã¢â¬â SEZs with investments worth Rs 1,42,685 crore (26 MoUs) followed by power sector with Rs 55,139 crore (11 MoUs), oil and gas with Rs 19,488 crore (19 MoUs), chemicals and petrochemicals with Rs 14,416 crore (26 MoUs), ports with Rs 10,474 crore (10 MoUs), urban development with Rs 6985 crore, railway projects at Rs 400 crore and others at Rs 2380 crore.

Evidently, it was Gujarati pride on its best display when Ambani thundered: "Reliance is a Gujarati company. It is an Indian company and it is a global company. That is how it was conceived by my father Shri Dhirubhai Ambani."

"The vision of Vibrant Gujarat reflects Reliance's dream of its own future. Reliance remains committed to Gujarat to make this a reality," Ambani added.

Birla said his group would invest around Rs 2100 crore in various manufacturing facilities for cement and textiles in the state.


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## Contrarian

*Jindal to invest Rs 25,000 crore*

RANCHI: Emboldened by the recent acquisition of Bihar Sponge and Alloy Ltd (BASL) plant near Patratu in Hazaribag district, Jindal Steel and Power Ltd (JSPL) has now decided to scale up the capacity of its proposed steel plant in Jharkhand from five million tonne to six million tonne.

The company, which earlier intended to set up the said plant in Singhbhum, has now decided to use the infrastructure of BASL plant for setting up the new steel plant, JSPL executive vice-chairman and MD Navin Jindal announced on Friday. JSPL had earlier signed a MoU during the erstwhile NDA government for setting up a plant in the state.

Company MD was here to sign an MoU with the state government for setting up two power plants with a total production capacity of 2500 MW.

The company intends to invest a whooping Rs 25,000 crore for setting up the steel plant and power generation plants. Jindal said acquisition of BASL has been a huge advantage to the company as it can use the same infrastructure for the proposed steel plant, besides the 600 acres of land the company can make use of. He, however, pointed out the company would need an additional 2,500 acre of land for the six million tonne capacity steel plant.

Referring to the contentious issue of land acquisition for the proposed plant, Jindal said instead of looking at the problem from a negative point of view he believed that the problem can be sorted out amicably. Ã¢â¬ÅGood compensation package and a comprehensive rehabilitation policy are the two main tools for overcoming the problem,Ã¢â¬Â he said.

About the talks doing the rounds in government circles with regard to giving shares to landowners in the new industries, the JSPL MD said he was not averse to the idea. Ã¢â¬ÅBut the matter should be decided by the landowners themselves and they should not be forced to invest the compensation amount in purchasing equities in a company,Ã¢â¬Â he said.

Earlier, in the day, Ispat Industries Ltd signed an MoU with the government for setting up a steel plant of 2.8 million tonne capacity in the state. Industry secretary KK Khandelwal signed the MoU on behalf of the government.

IIL is owned by Vinod Mittal. Mittal said the comapny would start the groundwork in a yearÃ¢â¬â¢s time.


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## Contrarian

*Cos. to pay Rs 1K cr penalty to tax dept*

MUMBAI: The transfer pricing directorate of the tax department has asked assessing officers in Mumbai to add Rs 1,000 crore in tax demands of 150 companies.

The directorate investigates cases of transfer pricing (TP) violations and sends reports to the regular assessment wing of the department. The assessing officer then raises a tax demand on the assesee. The department is expected to collect Rs 1,500 crore in taxes and penalties.

In one such case, an automobile maker had claimed damage of vehicles owing to floods. The departmentÃ¢â¬â¢s investigators refuted the claim and added another Rs 8 crore to the firmÃ¢â¬â¢s tax liability.

Till December 31, 2006, TP violations of about Rs 1,000 crore have been found and have been added to the assessments of corporates including pharma companies, banks and financial institutions, courier companies and automobile majors and one media company. About 90% of these additions are in the case of MNCs.

Sources in Aaykar Bhavan said there is also a quantum jump in the detections of alleged TP violations. In Mumbai, last year the violations found were to the tune of about Rs 500 crore. This fiscal the figure has doubled. The major violations are by way of either inflation of purchase price from the foreign arm or suppression of sale price (to the foreign arm), and discrimination in payments of royalty and technical fees.

TP violation happens when companies, by way of controlled pricing between sister concerns or related arms, transfer profits out of India. Violations can be done by Indian companies or MNCs or foreign companies having a permanent establishment (PE) in India, or a branch of a foreign company having taxable status in India.

Since profit is transferred outside India allegedly unfairly, and tax is lost, these practices are considered violations. The Indian companies which have allegedly been probed are mostly diamond firms, sources said.

Big names like General Motors, Fiat, Glaxo, American Bank, Citibank, and Skoda figure in the list of alleged violators. Car major Maruti Udyog, which was investigated in Delhi, is under the scanner for having allegedly transferred profits out to its Japanese parent, Suzuki, which is making losses. MUL pays less taxes in India, and Suzuki Japan will have not have to pay taxes in Japan.

In fact, these transfer pricing violations are also investigated by the enforcement directorate and customs. But it is not known how much data the tax department has shared with these agencies.


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## Contrarian

*Animation industry faces manpower crunch*

HYDERABAD: If you are good at art, communication and story-telling, itÃ¢â¬â¢s time you tried your hand at animation. The industry, which is now attracting the attention of global entertainment sector, is reeling through a severe manpower crunch. And, the HR shortage is only going to increase by the day.

According to a report on animation and gaming industry in India, prepared by the National Association of Software and Services Companies (Nasscom), skilled manpower demand-supply gap is huge and the current training infrastructure is inadequate to help narrow the gap. While the animation industry is expected to provide opportunities for 18,545 professionals in 2007, the supply side shows the availability of just 2,244 professionals. By 2010, the industry will grow to a level of providing jobs for 28,877 professionals.

But, there would be just 3,701 trained animation experts in the country. Ã¢â¬ÅThe manpower in the animation industry is expected to grow at a cumulative verage growth rate of 14% through 2010. As the studios expand their facilities, they will put pressure on manpower supply. Studios will need to invest in training programmes to develop a production-ready talent,Ã¢â¬Â the report said.

Training institutes already have a combined intake of more than 14,000 studens. At this stage, they need to invest in faculty, equipment and processes rather than any additional expansion, Nasscom felt. The lack of awareness about the industry and proper infrastructure and trainers for the development of fine arts are seen as two key reasons for the industry not being able to find right talent.

The animation industry is excepted to be a $869-million market by 2010 as against the global market of around $59 billion. Similarly, Indian gaming industry will be a $424-million sector by the same time frame, with global market being valued at around $21 billion.

Exports are estimated to have accounted for 70% of the revenue in the segemnt with the entertainment contributing to about 68% of the animation done in the country.

Ã¢â¬ÅThe Indian animation and gaming industry has taken off in a big way in the last two to three years. The credit to this can not only be attributed to the growing recognition of the Indian ITÃ¢â¬â¢s industryÃ¢â¬â¢s expertise and creative skills, but also to the growing maturity of animation studios, increase in co-production ventures and development of IP and the attractive domestic market,Ã¢â¬Â Kiran Karnik, president Nasscom said.

Ã¢â¬ÅBut we need to focus on factors like external investment and specialised training and government support in terms of broadcasting policy regulations in India, on the lines of what it is in countries lkie France, Singapore, China, Canada and Phillipines,Ã¢â¬Â he added.


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## Contrarian

*Doubles refinery capacity
*
PANIPAT: The Indian Oil Corporation (IOC) on Friday announced the doubling of its Panipat refinery capacity to 12 million tonnes at a cost of Rs 4,300 crore.

With this, the refinery capacity of IOC group companies goes upto 60.2 million tonnes per annum, the largest share among refining companies in India, IOC Chairman Sarthak Behuria said. The project executed at a cost of Rs 4,300 crore, comprises of Crude and Vacuum Discalation units, Hydro Cracking Unit.


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## Contrarian

*Sensex closes at a record 14,057*

MUMBAI: On Friday, for a change, positive vibes from the government, and not from the Infosyses and the Reliances of the corporate world, did the trick for the investors on Dalal Street. With the government announcing some important changes to rules governing the banks in India and allowing sugar exports again, the BSE sensex surged 426 points to close at 14,057, its highest close ever.

The day's rally also made investors richer by about Rs 1.10 lakh crore with BSE's market capitalisation now at Rs 37.41 lakh crore.

During Friday's trading, the government also announced that the growth rate of industrial output for November 2006, at over 14.4%, was the highest in over a decade. This gave investors reason to buy more and take the sensex to a new level. Buying momentum was so strong, market players said, that the news of the inflation rate shooting past the 5.5% mark, went almost unnoticed, without affecting market's buoyant sentiment.

On Thursday evening the Union cabinet had given the go-ahead for the government to issue an Ordinance to amend the Banking Regulation Act that allowed RBI to deviate from the minimum 25% ceiling for statutory liquidity ratio (SLR). This in effect could lead to availability of more cash to the banks to lend to corporates and earn higher income than under the present regime. As a result, banking stocks rallied from the start of Friday's session. ICICI Bank ended 8.5% higher at Rs 970, SBI closed with a 6.4% gain at Rs 1,223 and HDFC Bank too finished 6.4% up at Rs 1,063.
BSE's Bankex, the banking index, ended nearly 7% higher.

Brokers and dealers said that after the industrial production figures came during market hours, a lot of funds jumped into the ring to buy. "They reacted very positively to the IIP numbers. There was some short covering early in the session as well," said head of institutional dealing at a local brokerage.

Going forward, market players feel the corporate results for the October-December quarter would be the most definitive factor for the sustenance of the current rally.


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## Contrarian

*Industrial growth highest since 1996*

NEW DELHI: Indian industry is rocking, clocking a growth of 14.4% during November 2006 Ã¢â¬â the highest since February 1996 Ã¢â¬â backed by a strong performance by the manufacturing sector as demonstrated by booming car and white goods sales.

While the latest numbers look more impressive because of the contrast with the rather low 6% achieved during November 2005, economists feel that they may mark the beginning of a long period of high growth spread. Ã¢â¬ËÃ¢â¬ËIndustry will continue to grow by 9% for some more time," said Saumitra Chaudhuri, a member of the Prime Minister's Economic Advisory Council.

Ã¢â¬ËÃ¢â¬ËAll the indicators are quite strong. Investment is increasing and so are intentions to invest, foreign direct investment inflows are very strong and there is only a minor dip in the brisk pace of credit growth. So, the buoyancy will continue and there is a long-term story building. We may see some ups and downs, but in the short-term a cyclical downturn looks difficult," added D K Joshi, principal economist at rating agency Crisil.

A high growth in the industrial sector also augurs well for the gross domestic product (GDP) numbers that are due to be released at the end of the month. With the economy having grown 9.1% during the first half of 2006-07, chances of closing the year with an over 9% rise in GDP appear real. Ã¢â¬ËÃ¢â¬ËServices are also doing well. Though agriculture seems to be the only joker in the pack, there are no indications that it will do poorly," said Joshi.

The strong industrial performance during November 2006 helped push up growth during April-November to 10.6%, compared with 8.3% during the corresponding period in 2005, according to index of industrial production data released on Friday.

The steep rise in November also compares favourably with the 14.9% industrial growth reported by China during the same period.

While manufacturing stole the limelight, logging 15.7% growth in November, the two other constituents of IIP Ã¢â¬â mining and electricity Ã¢â¬â too put up impressive shows, rising 7% and 8.7% respectively.


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## Contrarian

*Bye-Bye Tata*

Bengal gained nothing during all the years that the Birlas manufactured a car there. In exactly the same way, Bengal has nothing to gain by locally manufacturing a Tata car. For the wealth of Bengal to rise, the wealth of every ordinary Bengali must rise: every ordinary Bengali should own a car.

For that, imported used cars, not local manufacture, are the way. Used cars, buses and trucks imported from the West, from Singapore and from Japan will lead to the quick death of all outmoded means of transport like autorickshaws, Ambassador taxis and Tata buses and trucks.

Revenue from low import duty and taxes on petrol and diesel can fund an all-Bengal public highway system. With the highway system connecting the hinterland, and with universal automobile ownership, the price of land in rural areas will rise and more and more of this land will be colonised for urban uses.

The government should acquire land only for truly 'public purposes', such as roads and railways, and, while enforcing private property rights, should allow businessmen to themselves directly bid for and purchase land from rural folk. The lefties have got it all very wrong.


----------



## Contrarian

*India draws the line on Asean FTA*

NEW DELHI: Lobbing the ball in Asean's court, New Delhi has asked members of the trading bloc to clearly state the extent of market access that each of them will provide to Indian goods under the proposed comprehensive economic cooperation agreement (CECA). At the same time, India is unwilling to reduce tariff any more, saying its domestic industry will be hit by further duty cuts.

"We have significantly pruned the negative list from 1,414 at the start of the negotiations to 490 now, which is subject to Asean members providing us adequate market access. We don't think we can offer anything further without affecting our domestic players," a senior commerce ministry official said ahead of talks in Cebu, Philippines.

While India has been revising its negative lists, Asean only submitted its sensitive products list in November and has been accusing India of not opening up its markets adequately for a trade deal.

India and Asean have been negotiating a CECA for over three years, which was first stuck over the rules of origin to restrict third country imports, and the two have failed to reach a consensus on tariff reduction during talks which started in January 2004.

India's tough posture also emanates from a recent commitment by commerce minister Kamal Nath to Congress president Sonia Gandhi. Nath, who is in Cebu leading the Indian delegation for another round of talks, has told his party chief that the government will ensure that the interests of Indian farmers are not compromised at any cost.

Sonia had earlier written to the PM Manmohan Singh expressing concern over CECA's impact on the local industry and farmers. While the issue appeared to have been resolved, she again forwarded a letter to the government, which she had received from Kerala rubber marketing federation, about concerns on import of the commodity.

Officials, however, termed the correspondence as a routine exchange. Sources said that the Cebu talks, which will be followed by the India-Asean Summit to be attended by Singh, was unlikely to result in any consensus as the details will be discussed later.


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## Contrarian

*Chinese alliances can boost chip making*

BANGALORE: Pradeep Gupta, who heads Synopsis India, recently got a first-hand experience of China's rise in chip manufacturing when he met this "small and unheard" of company in Shanghai. He was astounded when he heard that this company supplies largest number of MP3 chips in the world.

China is today the undisputed king in chip manufacturing. And with India showing great promise on the research and design element of chips, experts feel that the time is ripe for our companies to take a closer look at Chinese manufacturers. Tie-ups between Indian design companies and Chinese chip manufacturers is expected to boost our own efforts in chip manufacturing and help design companies derive greater value.

According to Vinod Dham, founder, NewPath Ventures and NEA-IndoUS Ventures, the recent migration of the size of a wafer (on which chips sit) from 200 millimetre to 300mm and the resulting reduction in the size of the die (on which a chip is fabricated) from 90 nanometre to 65nm and below will result in dramatic increases in chip count.

"China's lead through leveraging decades of wafer fabrication expertise and its willingness to spend billions of dollars for building cheap products for its local market has boosted its chip production capacity by 40% annually, much faster than the world average of 10%. Overall, this capacity increase, coupled with the slowing down of technology migration will result in excess capacity at 65nm to 90nm nodes. India's chip design industry will need to form closer relationships with these mega foundries in Asia," says Dham, widely recognised as the father of the Intel Pentium processor.

IP protection is a concern in China. But experts believe China will soon do something to fix that problem. "This gives us another good reason why we must look at more tie-ups in the area of fabrication and manufacturing," says P V G Menon, an entrepreneur in the semiconductor space.


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## Contrarian

*RIL eyes $10-billion GE Plastics*

MUMBAI: Mukesh Ambani group flagship Reliance Industries, the country's largest private company, is eyeing global conglomerate GE's Plastics unit, estimated to be valued at about $10 billion.

RIL is considering a takeover of GE Plastics, which is expected to be soon put on the block and has generated interest among various private equity buyout firms, sources close to the development said.

While an RIL spokesperson declined to comment, sources said: "It makes business sense as GE Plastics could give the Indian major a global marketing network."

The company has been looking for opportunities to expand its presence in petrochemicals and plastics businesses across the world, as part of which it had unsuccessfully pursued acquisition of UK energy giant BP Plc's petrochemicals business Innovene last year, sources said. However, GE Plastics could be a strategic business opportunity for RIL, they added.

In the past, RIL had acquired German speciality polyester manufacturer Trevira for 80 million euro (Rs 430 crore) a couple of years ago. GE is still to announce whether it is planning to sell its plastics business unit, but reports in the Wall Street Journal and The New York Times said the US industrial conglomerate is planning to sell the business, whose value is estimated to be close to $10 billion.

A spokesperson for GE Plastics was not immediately available for comment. According to media reports in the US, a few private equity funds have already expressed their interest in the GE unit. These include Apollo Management, Blackstone Group and Kohlberg Kravis Roberts & Company (KKR). Besides RIL and PE firms, names of Dow Chemical and Dupont are also doing the rounds as potential suitors, the reports suggest. Citigroup had named Dow Chemical and BASF as the potential buyers in a research note.


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## Contrarian

*Course Correction*

RSS Feeds| SMS NEWS to 8888 for latest updates

Indian politicians, especially in office, rarely say sorry. It is not that they don't make mistakes or realise them, but because they feel that as representatives of the state they are beyond the pale of apology.

West Bengal chief minister Buddhadeb Bhattacharjee's admission that he was wrong on the Nandigram issue is a welcome departure from the norm and deserves praise.

The violence at Nandigram leading to the killing of six people is a blot on the West Bengal government and has exposed the contradictions within the Left Front and CPM towards SEZs. The violence has been largely blamed on the unilateral decision of the state government to acquire land for an SEZ despite local opposition.

At the grass roots, it appears that the party was willing to use its cadre to implement the government agenda at all costs. Bhattacharjee, already facing flak from Left Front constituents like CPI and RSP for pushing a pro-industry agenda, could now be accused by colleagues of embarrassing his party and the government.

However, at the cost of risking his authority within the government and party, Bhattacharjee has chosen the democratic alternative of suspending the project until a negotiated settlement with the local population can be reached.


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## Contrarian

*It's homecoming for consultancy's poster boy*

MUMBAI: His is the original face of consulting in India. Long before firms like McKinsey and Boston Consulting became a force in India Inc, Sid Khanna was playing guide, philosopher and friend to the titans of business, advising them on how to run their companies.

After spending over a decade with Arthur Andersen in London, Khanna had moved back to India, around the turn of 1990, as managing partner. To use his words, management consulting was a "cottage industry" at the time.

A little over a decade later, he returned to London as global managing partner of what was by then Accenture. The designation was almost incidental. Within the world's largest consulting firm, Khanna's mission was to evangelise India as an outsourcing hub. "In 2001, I had to fight to get a capital budget for 100 seats in India," he recalls with a smile. Five-odd years later, Accenture's India head count is in the region of 33,000!

Sid Khanna has now joined the ranks of those returning home because this is where he believes the real action is. After long years of advising businessmen and CEOs on ways to run their companies better Ã¢â¬â through the 1990s, a number of business groups restructured on his advice Ã¢â¬â he has decided to switch over to the other side and actually do the running.

"I'm putting together a bunch of really smart people who can be chief executives. Many of them, I've worked with in the past. What we will do is take a stake in middle-size companies which have the potential to scale up, even globally, but lack the management confidence to do so. We will place a CEO and back him up with advice from a heavyweight team. We'll exit in about 5-6 years. Some of the companies we're looking at are doing fantastic work; but they need to move to the next level. We're also looking at mothballed assets than can be turned around."

There are two companies in which Khanna is said to have already taken an interest, but he's not talking.


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## Contrarian

*NYSE, Goldman Sachs and two others buy 20 per cent of NSE*

MUMBAI, JANUARY 10: The world largest stock exchange NYSE and three other foreign investors have bought a 20 per cent stake in the National Stock Exchange, India biggest bourse, in a deal valued at around $460 million (Rs 2,070 crore).

NYSE will invest $115 million for 5 per cent Ã¢â¬â the maximum holding allowed per investor Ã¢â¬â of NSE, while Goldman Sachs, General Atlantic and Softbank Asian Infrastructure Fund will each acquire 5 per cent stakes.

Ã¢â¬ÅThis alliance marks a significant milestone for NSE in developing a place for itself in the emerging global scenario,Ã¢â¬Â NSE chief executive Ravi Narain told reporters. With more Indian firms looking to list overseas, it was natural that foreign exchanges were keen on a presence in India, he said.

NYSE would buy the stake from a consortium of sellers including ICICI Bank, IFCI, IL&FS, Punjab National Bank and General Insurance Corp of India. Ã¢â¬ÅOur investment complements our global growth strategy,Ã¢â¬Â NYSE chief executive John Thain said.

The Reserve Bank of India has capped total foreign investment in stock exchanges at 49 per cent, including direct investment of 26 per cent and investments by portfolio investors of 23 per cent. The investment limit for a single investor was set at 5 per cent by SEBI.

Daily turnover on the National Stock Exchange averaged Rs 7,230 crore over the past six months, more than twice the value traded on the Bombay Stock Exchange.

BSE is also holding talks with bourses like Nasdaq and London Stock Exchange for stake sale.

http://www.indianexpress.com/story/20625.html


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## Neo

*Indian industrial output rebounds *


Industrial production in India grew at its fastest annual rate in more than a decade in November, spurred by capital and consumer goods, figures show. 
India's industrial production, including output from factories and mines, rose 14.4% year-on-year, the Commerce and Industry Minister said. 

November's rise came as the government revised October's annual growth figure downwards to 4.4% from 6.2%. 

Analysts say November's figures make an interest rate rise more likely. 

*Rebound *

Harish Menon, an economist with ING Vysya Bank said the figures were better than expected and "make the chances of a rate hike increase definitely". 

Capital goods - which include machines, equipment and factories - saw a 25.3% year-on-year rise in November. 

"Clearly the manufacturing sector's strength has rebounded after the aberration of October," said Shubhada Rao, chief economist of Yes Bank. 

Manufacturing production, which accounts for some 75% of industrial output, was just under 16% higher in November compared with a year earlier. 

Industrial production represents about a quarter of India's economic growth. 

http://news.bbc.co.uk/2/hi/business/6254881.stm


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## Neo

*ADB to lend India $2.45bn in 2007 *

NEW DELHI: The Asian Development Bank will keep lending India more than $2 billion (euro1.55 billion) a year to help finance the infrastructure projects that India needs to sustain its economic growth, the bankÃ¢â¬â¢s country director said on Tuesday. 

The bank, which has headquarters in Manila, Philippines, approved loans worth $2.2 billion (euro1.7 billion) to India in 2006, of which over $700 million (euro541 million) was actually handed out for various development-based projects, said director Tadashi Kondo. 

In 2007 the bank hopes to approve loans worth $ 2.45 billion (euro1.89 billion) and take actual spending on projects to $1 billion (euro770 million), Kondo told reporters in New Delhi. 

Ã¢â¬ÅThe disbursement figures really reflect what is happening on the ground,Ã¢â¬Â Kondo added. The ADBÃ¢â¬â¢s funds for India are focused largely on supporting the Indian governmentÃ¢â¬â¢s efforts to develop basic infrastructure. Nearly 75 per cent of its lending goes to transport, urban development and energy projects. 

Ã¢â¬ÅWe really respond to the needs of the government as long as it fits our priorities as well. Right now infrastructure is a priority with the government,Ã¢â¬Â said Narhari Rao, ADBÃ¢â¬â¢s principal economist in India. India has struggled to develop its infrastructure and the lack threatens to hamper the countryÃ¢â¬â¢s booming economy, currently growing at more than 8 per cent a year. 

Major cities frequently face power and water shortages and most roads are in a poor state. 

The Confederation of Indian Industry, a leading business group, said in a study last year that India needs to invest $330 billion (euro250 billion) in infrastructure over the next five years. But India currently spends only about $36 billion (euro27 billion) a year on infrastructure development. The development agency said it aims to give India $2.85 billion (euro2.2 billion) in loans by 2009.

The ADB has also asked the Indian government for permission to raise $1 billion through bonds to provide rupee loans for government spending on infrastructure projects. Ã¢â¬ÅWe expect the permission to be granted early this year,Ã¢â¬Â Rao said.

http://www.thenews.com.pk/daily_detail.asp?id=39109


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## Neo

*India's IT edge eroded by terror and crime*
By Sudha Ramachandran 

BANGALORE - Are India and its software hub, Bangalore, in danger of losing their competitive edge because of the rising costs of operating here? 

India's large pool of technically skilled, English-speaking manpower and low operating costs have made the country an attractive location for multinational companies, especially in the information-technology and IT-enabled-services sectors. 

But this might be changing, warn analysts. With the IT sector increasingly figuring on the agenda of terrorists and a range of other threats to employees and data safety emerging, there is a growing concern that the cost of stepping up security could erode India's cost advantage. 

Unease over the issue, which has been rising over the past couple of years, has spiked in recent months as evidence of possible terror threats to Bangalore has emerged. 

Two weeks ago, a suspected Kashmiri militant was arrested in a Bangalore suburb. According to police, he was carrying arms and ammunition, a satellite phone, SIM (subscriber identity module) cards and a map of the city with markings indicating the locations of the airport and the offices of IT majors Wipro Technologies Ltd and Infosys Technologies. 

This is not the first time that Bangalore and its IT sector have appeared on the terrorist radar. Intelligence agencies have been warning of possible attacks on IT companies since 2004. Interrogation of arrested terrorists had revealed that Bangalore was a target. In December 2005, an armed attack on the Indian Institute of Science, a premier scientific-research institution, confirmed that the city was indeed vulnerable to terrorism. Investigations and search operations that followed the attack indicated the existence of sleeper cells and a terror network in several towns in Karnataka state. 

Then last July, a software engineer - reportedly a former employee at Oracle India in Mysore, a town 145 kilometers from Bangalore and an emerging software hub - was taken into custody for alleged involvement in the serial bomb blasts on suburban trains in Mumbai. In October, two men with suspected links to the Pakistan-backed al-Badr were arrested in Mysore. 

Indian authorities have been saying that the IT sector is vulnerable to attacks as such terrorist outfits as the Lashkar-e-Toiba are keen to undermine India's growing economic might and international profile. Indian IT giants such as Wipro and Infosys have been identified as likely targets. No multinational company has yet been identified as a likely terrorist target. 

However, multinational companies seem to be no less vulnerable. The US State Department issued alerts in 2005 and 2006 warning its citizens of possible attacks on US interests in Delhi, Mumbai, Kolkata and Hyderabad. 

Indian intelligence agencies have been warning that in the context of growing ties between India and the United States, the possibility of jihadis attacking US interests in India is growing. "The US Embassy and consulates in India are fortresses. It would be far easier to strike a multinational company. Such an attack would accomplish multiple objectives - hit the Americans, the Indian economy and India's ties with the US," an Intelligence Bureau official told Asia Times Online in October. 

Besides the threat of terror, data theft is another problem that IT and business process outsourcing (BPO) companies are having to counter. In 2005, present and former employees of Mphasis, an Indian back-office service provider, were found to be defrauding Citibank customers in New York of more than US$350,000. Last June, Nadeem Kashmiri, an employee of HSBC who was alleged to be part of the Lashkar-e-Toiba network, was arrested in Bangalore for alleged Internet fraud. 

And then in November, corporate India found itself staring at another problem after the kidnapping of the three-year-old son of Naresh Gupta, chief executive officer of Adobe India. The child's abduction took place just outside his home in Noida's Sector 15, a well-off and "secure" neighborhood. 

Tens of thousands of children and adults are abducted for ransom every year in India, many of them in the states of Bihar and Uttar Pradesh, where kidnapping is a flourishing industry. Most of these kidnappings go unreported and unnoticed. 

This was not the case with three-year-old Anant Gupta. His kidnapping caught the attention of the media and corporate India. 

Noida, which is in Uttar Pradesh, skirts India's capital, New Delhi. It is among the country's most affluent districts, being home to some of the largest software and BPO companies. And it has attracted criminals from Uttar Pradesh's badlands in droves. Last year there were 15 shootings in Noida. While the crime situation in Bangalore is nowhere near as bad as it is in Noida, the crime rate here is rising, with IT and BPO employees increasingly being targeted by criminal elements. 

Intelligence sources say the threat of terrorism is scaring multinational companies. But security and risk-management consultants are more cautious in their assessment. 

"While the threat is indeed not something that IT or any other industry sector can afford to ignore," the threat is not "scaring them to the point of quitting India", B S Nagaraj, manager of public policy and risk management at Hill & Associates (India) Private Ltd, told Asia Times Online. He said that although there have been major terrorist attacks in Mumbai and Delhi in the past, "to our knowledge, there are no instances of any multinational company quitting India only because of the threat of terrorism". 

He said that "typically, multinational companies operating out of emerging markets like India have lower risk tolerance than their home-grown counterparts. But if the threat is specific [as in the case of Infosys], both Indian and foreign companies operating in India would have reason to worry." 

While terror threats of a general nature might not be scaring companies, the cost of beefing up security is an issue of concern. 
IT and BPO companies are stepping up arrangements to secure themselves. Even the smallest companies have moved beyond relying merely on guards to acquiring electronic surveillance and access-control systems. And companies, especially those operating in such areas as Noida, are said also to be showing some interest in securing kidnap and ransom (K&R) insurance cover for their senior management executives. 

Some are calling for monitoring of employees. A senior official at Private Eye (Pvt) Ltd, an agency in Bangalore that provides personnel and equipment to multinational companies such as Hewlett-Packard, Philips and Delphi, said upgrading physical security and controlling access to facilities alone is not enough, as the threat to security could be from within. "Companies screen employees before hiring them. But it has to be an ongoing process," he said. 
Obviously, all this will cost more money. 

According to Stratfor, "Security costs to companies involve not only cash outlays for physical security upgrades and technology, but also manifest in terms of contingency planning and salaries for in-country security staff. Demand for qualified and well-connected security managers in India has increased dramatically over the past two years. This trend is driven not only by perceptions of growing risks, but also by cannibalization within the corporate sector, with companies poaching security managers from one another. (The poaching trend also has indirect implications for cost structures, as it leads to escalating salary offers and expectations. Of course, that's a good thing for security managers, but bad for the bottom line.) 

"Corporate bean-counters will be watching these costs carefully and will factor them into risk/benefit analyses. The tolerance for risk varies from company to company, of course; but should the terror threat necessitate increased security for employees and facilities, or should the kidnapping threat require protective details, armored cars and expensive K&R insurance policies for executives, or should the theft of intellectual property and the personal data of customers require expensive efforts to vet and monitor personnel and IT security safeguards, the cost-efficiency ratio that has favored India for so long eventually could begin to tip in the other direction." 

Hill & Associates is less worried, however. "Multinational companies have so far not really invested heavily in securing their assets and personnel specifically against the threat from terrorism. Even if they do, the costs of operating out of India would surely outweigh the benefits," observed Nagaraj. 

It is only BPO companies that are handling low-end tasks that need to be worried in the near future, as it is low cost that keeps them in business. This is not the case with high-end outsourcing, which is what many Indian BPOs are doing. 

While cost is an important driver of high-end outsourcing, what really matters "is the capability, rigor, resources, rapid turnaround times and the ability of the outsourced partner to adapt to client's requirements and processes and deliver to specifications", Hemendra Aran, chief executive officer of Aranca, an end-to-end provider of custom investment, business and economic research, has argued. 

And software professionals in Bangalore are even less worried. They insist that India's advantage is not just about getting work done cheap; it is about high-tech skills that few other countries can match. 

Mounting security threats notwithstanding, Indian companies and multinationals are not reaching for the panic button yet. 

Sudha Ramachandran is an independent journalist/researcher based in Bangalore. 

http://www.atimes.com/atimes/South_Asia/IA18Df02.html


----------



## Contrarian

*Bill to raise FDI in insurance in next session*

NEW DELHI: The government on Thursday said it will bring a legislation next month to increase Foreign Direct Investment (FDI) in insurance sector to 49 per cent from 26 per cent at present.

"Finance Minister P Chidambaram indicated that a bill will be introduced in Parliament next month to increase FDI limit in insurance to 49 per cent from 26 per cent," UK Chancellor of Exchequer Gordon Brown said.

Speaking to reporters after Brown along with Chidambaram launched the India-UK Economic and Financial Dialogue, the visiting minister said it was conveyed to him that companies with unique structure like Lloyds of London would be allowed to offer reinsurance services in India.

During the meeting, the opening up of the banking sector also came up and India sought greater freedom to its banks to operate in UK.

"We hope UK will give more licences to Indian banks," Chidambaram said, adding that Standard Chartered Bank of UK was the largest foreign bank in India. "I am sure they will continue to grow organically in India," he said.

The Finance Minister's emphasis on organic growth points to the fact that the freedom for foreign banks to acquire banks in India is unlikely to come soon.

At the launch of financial dialogue, both sides also discussed ways to stem the flow of finances to terrorists.

The need to cut financing to terror groups was a part of a comprehensive discussion on security.

India will be attending the meeting of Financial Action Task Force (an inter-governmental body to check misuse of global financial system by extremist groups), Chidambaram said.

UK also offered to work with India for securing transport networks ahead of the Commonwealth Games in Delhi 2010 and Olympics in London in 2012.

The visiting delegation was also assured that level playing field would be offered to UK-based Vodafone, which is bidding for India's fourth largest cellular service provider Hutch-Essar.

The dialogue that was launched in pursuance of the India-UK Joint Declaration signed by Prime Ministers of both countries, also discussed the urgent need to conclude the Doha Round of negotiations at the WTO.

The issue of climate change and energy security also came up.

At the meeting, the idea of extending the Public Private Partnership model from big infrastructure projects to social sector, especially health and education, was also discussed, Chidambaram said.

Later in the day, Brown is scheduled to meet Prime Minister Manmohan Singh.

He said in his other meetings during the day the issue of opening of retail sector further would also figure.

On the widespread criticism of the new immigration laws in UK, Brown said the new points system in the new regulations would benefit both Indian and UK economies.


----------



## Contrarian

*Govt assures Brown of equality in Vodafone bid
*
NEW DELHI: British Finance Minister Gordon Brown on Thursday said that he had been assured by the Indian government that all companies would be treated equally when takeover bids are being considered.

Asked about whether Vodafone's bid for Hutch Essar had featured in his talks with Finance Minister P Chidambaram, Brown said: "All areas of financial services were part of the dialogue. We have been assured there is a level-playing field."


----------



## Contrarian

*Biocon Q3 net up 45% at Rs 47 cr*

MUMBAI: Homegrown integrated biotechnology firm Biocon on Thursday posted 44.89 per cent increase in net profit at Rs 47.51 crore, as compared to Rs 32.79 crore in the year-ago period.

Total income of the Bangalore-based company rose to Rs 216.35 crore for the latest quarter, up 24.06 per cent as against Rs 174.39 crore for the same posted last year, the company informed the Bombay Stock Exchange.


----------



## Contrarian

*Oil PSUs for tie-ups with Saudi Aramco*

NEW DELHI: India on Wednesday renewed its offer to Saudi Aramco for partnering three refineries being built by state-owned oil companies and sought return opportunities for them to invest in the kingdom's oil sector, even as Prime Minister Manmohan Singh urged Riyadh to help stabilise global crude prices.

Singh made the appeal during a discussion with Saudi oil minister Ali Al-Naimi, saying high crude prices had hurt economies like India that depended on imports and the oil exporting cartel Opec should do more to rein in volatility. Pointing out that it was markets that determined prices, the Saudi minister also supported the PM's view against volatility.

This was also the refrain during his meeting earlier in the day with counterpart Murli Deora when he observed, "We do not want to see volatility in the market (but) the prices are determined by the market." India imports 73% of its crude requirement and saw its oil import bill swell 45% to Rs 134,909 crore ($29.322 billion) in April-October period from Rs 93,006 crore ($21.165 billion) in the same period last year as prices touched a record $76/barrel.

During his meeting, Deora made the offer to Saudi Aramco, headed by Al-Naimi, to come in as partner in Bharat Petroleum's Bina refinery in Madhya Pradesh, Hindustan Petroleum's Bhatinda unit in Punjab and IndianOil Corporation's Paradip plant in Orissa. The Bina refinery has envisaged an annual capacity of 6 million tonnes, while Paradip and Bhatinda have 9 million tonnes.

Deora also articulated state-owned firms' desire to invest in refineries and oilfield development projects in Saudi Arabia. Al-Naimi, however, pointed out that he may be heading Saudi Armaco but did not "influence" investments or projects. "We are looking for opportunities of mutual cooperation where Saudi Arabian companies invest in India and Indian firms in Saudi Arabia," Al-Naimi said after his meeting with Deora.

In 2004, Hindustan Petroleum had evinced interest in participating in Saudi Aramco's 400,000 barrels a day export-oriented refinery in Yanbu but Saudi Arabia turned down the offer. Saudi Arabia made no formal proposal or mentioned no projects for participation by Indian firms this time.


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## Contrarian

*Govt goes green on power plans*

NEW DELHI: The power ministry on Wednesday clearly pressed the Code Green button, with power secretary R Shahi saying the share of hydel and nuclear projects will have to be raised in the energy basket to minimise environmental impact of electricity generation.

Shahi's statement came at a meet on energy management organised by Indian Electrical & Electronics Manufacturers' Association and Economic Times and is significant in view of the ministry's efforts at raising the country's generation capacity from 1,30,000 mw at present to 8,00,000 mw.

Such a massive generation capcity based on coal or other fossil fuel-burning units will also create big problems of controlling emission and air pollution.

Shahi said dependence on fossil fuels should be reduced. But even as the share of coal-fired power stations goes down, it will continue to be the dominant fuel for generating. "It is time to renew focus on hydro policy. India has maintained that all hydro power is renewable. Issues raised against large dams like submergence of land and rehabilitation need to be addressed effectively." Other renewable sources like wind, solar and biomass also need to be tapped.

Stretching the debate further, Shahi said efficiency of consumption also needs to be improved as a unit of electricity saved is a unit generated. "India has a low per capita consumption of power, 615 kWh, besides that India uses electricity inefficiently. As much as 20% of power could be saved by efficient usage and by the use of efficient gadgets," he said.

"As India and China increase their power generation capacity, their carbon dioxide will be higher than that of the developed countries, not in terms of per capita emission but in total volume. There is great deal of pressure to deal with increased emission issues. We must safeguard environment but the single most important concern for Indian government is to ensure availability of electricity. India needs to increase its electricity production and consumption," Shahi said.


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## Contrarian

*City of joy sees steepest rise in business outlook*

KOLKATA: This one will gladden Buddha's heart. According to the latest study conducted by a recruitment consulting firm, Kolkata has witnessed the sharpest increase in business sentiment, ahead of Delhi, Mumbai and Bangalore, for the period January-March 2007. As well as the nationwide average.

As per the TeamLease Services report, Kolkata has seen a growth of 13% in "business outlook" over the last quarter, more than twice that recorded by Mumbai and Delhi. And something which is miles ahead of Bangalore.

While Mumbai grew 5% and Delhi 6%, Bangalore witnessed a marginal fall of 1% on the business outlook parameter, in the questionnaire-based survey undertaken for the exercise. The growth average nationwide was 6%. TeamLease had contacted human resource heads of numerous companies for arriving at a conclusion of what businessmen were thinking.

According to TeamLease, Kolkata's impressive show has been made possible by the manufacturing sector. Followed by the financial services arena. The biggest employment opportunities also exist in these two segments as far as the city is concerned, despite the hype surrounding an IT job at Salt Lake's Sector V.

Considering that JSW Steel recently signed a Rs 35,000-crore deal for a steel plant here, the bullish sentiment expressed by manufacturing firms, though, was only to be expected. Tata Motors' decision to establish its small car plant in Bengal is another stellar proof of how big business groups now believe that money can be made in manufacturing in Buddha-land.

On a broader scale, however, TeamLease points out that Kolkata still has some way to go to emerge as an employees' paradise. Bangalore remains the favourite destination for jobseekers, followed by Mumbai and Delhi. The 'city of joy' comes much lower down on the list. However, the good news here also is that Kolkata is not seeing any drop in job creation unlike the case some years ago.


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## Contrarian

*Africa opens door for oil cos*

NEW DELHI: Petroleum minister Murli Deora used energy diplomacy with Nigeria and Sudan to push open windows of opportunity for state-owned IndianOil, Oil India and Oil and Natural Gas Corporation (ONGC).

During meetings with his Nigerian counterpart Edmund Daukoru and Sudan's junior oil minister AJ Teny, Deora put on table a shopping list for oilfields, gas-shipping terminals, refineries and oilhunt contracts but in deference to bilateral nature of talks, skirted the big question over future crude prices that could impact fuel bills.

No wonder, he sought compensation in Daukoru's assurance of positive consideration for IOC and OIL's wishlist. IOC's list included raising term crude contract by a million tonne to three million tonne, acquiring Port Harcourt refinery or setting up a new unit in Edo province in return for an oilfield and equity in upcoming LNG projects. OIL wants exploration acreages.

Daukoru welcomed IOC and OIL bids in divestment of three existing refineries and 55 acreages, respectively. But he had a word of caution. "Our production of sweet crude is not infinite, so Indian companies should get involved with refining." Nigeria is targetting a capacity to refine 70% of its oil production with four new refineries.


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## Contrarian

*WTO talks may restart soon: Lamy*

BANGALORE: The Doha Development Agenda negotiations may soon resume with the global political climate emitting positive vibes, according to World Trade Organisation (WTO) chief Pascal Lamy.

Addressing a session on "Mulitalateral Trade Vs RTAs: Which way to go", Lamy said, "We are at a defining moment in the Doha round of talks. The window of opportunity in front of us will close sometime this year. I am confident that India will make a constructive contribution to the last laps."

He said, India will play a critical role in restarting talks, currently stalled. If India was to be flexible on tariff on industrial goods, other players can be prevailed upon to make similar adjustments on agriculture, he said.

But commerce minister Kamal Nath said, "We can be flexible about tariffs. But I don't want to make any offers without seeing what the others bring to the table. I don't want to negotiate only with myself."

"We expect the Doha round to create a strict rule based system. Attempts should be made not to perpetuate the structural flaws especially in agriculture and industrial products. Our prime concern should be to increase trade flows. And given the changing global economic architecture, the completion of the Doha round is crucial."

Nath also said that he has enlisted the help of Gordon Brown, British Chancellor of the Exchequer, in persuading the US to move forward.


----------



## Contrarian

*Wipro net rises 41% on off shoring deals*

_Wipro met investor expectations with a 45% increase in revenues and a 41% growth in net profit in the quarter ended December 31, 2006._

BANGALORE: Wipro, the country's third largest software company, met investor expections with a 45% increase in revenues and a 41% growth in net profit in the quarter ended December 31, 2006, compared to the corresponding quarter of the previous year.

The company registered a profit of Rs 765 crore on revenues of Rs 3,979 crore, of which global revenues from IT services and products accounted for Rs 2,876 crore, a 35% increase on the corresponding quarter of the previous year.

Suresh Senapaty, CFO of Wipro, said the pressure on profitability arising out of wage increase and rupee appreciation was offset by operational improvements and improved profitability in the BPO business and Wipro's acquisitions portfolio.

The company's India, Middle East and Asia Pacific operations did particularly well, recording a 56% growth in PBIT (profit before interest and tax) in the quarter, while revenues from these regions grew at 76%, against about 50% last year.

Wipro chairman Azim Premji said a considerable amount of growth during the quarter was driven by verticals like energy, utility, technology services and enterprise application services, while domains like financial services and retail brought in 50% of the growth. During the quarter, the company brought down its overall attrition rate from 18% to 16%.

On future outlook, Premji said, "For the quarter ending March 2007, we expect revenue from global IT services and products to be around $685 million. The picture is positive as the demand for services is growing. However, the margins may be in the narrow range of 24 to 25%."

The company acquired 37 new clients Ã¢â¬â including 13 tech clients and 24 other multi-domain firms Ã¢â¬â during the quarter, taking the global client base to over 600. It had a net addition of 3,489 techies and 1,508 BPO employees, taking the total strength of the workforce to 66,176.

Wipro said the consumer care and lighting business grew (YoY) at 36% against the industry average of 10 to 12% while its hydraulic components business continued to grow at 30 to 40% CAGR. During Q3, Wipro effected salary hikes for offshore employees which had 1.8%bearing on its margins.


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## Contrarian

*Sebi allows exchange traded fund for gold*

MUMBAI: Four-and-a-half years ago two Indian financial wizards took an idea of a new product to the market regulator the Securities and Exchange Board of India (Sebi). It was a financial innovation which proposed to give gold-crazy Indians the option to hold the yellow metal in electronic form (called gold ETF), rather than in the traditional forms Ã¢â¬âornament, coins or biscuits.

That was 2002. The idea was a break-through one for the financial world. What the product gold ETF or exchange traded fund Ã¢â¬â proposed to do was in one shot turn a very popular physical asset into a financial asset. In the process it also promised to take care of most of the security risks associated with holding it in physical form.

Australia, also known for it vast mineral reserves, was the first to accept the idea of investing in a precious metal in electronic form. And in 2003 world's first gold ETF was launched in Australia.

Soon enough the kangaroos were followed by the Wall Street bulls and then those across the Atlantic, in the City in London. At last count, on the New York Stock Exchange alone, gold ETFs were worth over $8 billion and is one of the most popular ETF products now.

Back in India, after weighing the pros and cons, going through several presentations and committee meetings, on Wednesday Sebi finally gave its green signal to two Indian fund houses Ã¢â¬â Benchmark MF and UTI MF Ã¢â¬â to launch gold ETF. The Indian duo who had ideated the product, Sanjiv Shah and Rajan Mehta, are a happy lot now. These are also the two men who run Benchmark MF.

However, there isn't much time for the two to enjoy the good news. They are already on the job to be the first in the market with their brain-child, literally. "Yes. We have received the Sebi nod. We are working to launch the product in about one to one-and-a-half months," said Shah, ED, Benchmark MF.

UTIMF, the country's largest fund house with an enviable retail reach, is also gearing up to launch its version of gold ETF soon. "Among Indians gold commands a huge psychological advantage even as an investment option. With our reach and supporting logistics, we believe we could be the first in the market," said Jaideep Bhattacharya, chief marketing officer of UTI mutual fund.

Interestingly, the Indians' weakness for gold, punched with the convenience of not holding it in physical form, is what market players feel could turn Gold traded funds as a great success story for the fund industry.

For record, India is the largest consumer of gold in the world which imported an estimated 800 tonnes of this yellow metal in 2006. And ranked behind crude oil, in value terms, this precious metal is the second biggest import item for the country.


----------



## Contrarian

*Morgan Stanley invests Rs 675cr in Mumbai firm
*
MUMBAI: In the single largest FDI in the country's booming real estate sector, Morgan Stanley has invested $152 million (Rs 675 crore) in a city-based firm, Oberoi Construction. The world's largest private equity realty fund, which manages $100 billion (one-seventh of India's GDP), will in return get a 10% stake in the three-decade-old unlisted company which has a land bank of 15 million sq/ft, most of it in western suburbs of the city. The deal has valued Oberoi at Rs 6,750 crore.

According to Vikas Oberoi, the promoter, the city-based company which sells 1,000 apartments a year, is developing residential and commercial properties, including a deluxe five star hotel in the suburbs. The global fund had earlier made Rs 1,500 crore in the country, highest being the Rs 300 crore in Mantri Developers in the south.

Anand B Madduri, an ED at Morgan Stanley, said the three drivers that attracted the fund were the property developer's execution of projects, entrepreneurial vision of promoter and delivering housing and commercial establishments to a community.

Oberoi said the money can be leveraged to raise around Rs 2,500 crore of debt for speedy execution of projects that will give him a cash flow of $1b in 3-4 years.

India's property market has attracted several PE funds and foreign investors who see a tremendous opportunity as demand for homes and commercial space rises fast. The scramble for buying assets was evident recently when three prominent real estate companiesÃ¢â¬âHirandani Constructions, Rahejas and Unitech raised close to $2.3 bilion from the London market.

Last year, US's Farallon Investments along with LN Mittal had invested close to Rs 1,429 crore in four real estate companies of IndianBulls, a financial services firm which diversified into property development. Ten Indian real estate companies have raised money by selling shares to the public, which eagerly lapped up the issues.

Industry sources say around 150 foreign PE have lined up nearly $10 billion to invest in real estate in the next two years as government relaxes norms to ramp up the country's inadequate infrastructure. Indian and multinational institutions such as J P Morgan, Falcon, 3i, Blackstone, Carlyle, Kotak Real Estate, IL&FS, ICICI and HDFC are some of them who are waiting to storm the sector.

ICICI Realty fund is learnt to be raising $1 billion and Kotak Mahindra $500 million.


----------



## Contrarian

*'India driving global business confidence'
*
NEW DELHI: Dynamism in emerging markets, mainly India, has driven the global business confidence to a five-year-high, a survey by Economist Intelligence Unit (EIU) says.

EIU's fifth annual CEO Briefing Survey, found that nine out of 10 top global executives rated business prospects during the next three years as "good" or "very good".

The main drivers behind the optimism among global business executives were the bustling emerging markets especially Ã¢â¬â India and China.

In the survey, majority of the 1,006 executives from around the world are planning to invest more in developing countries than in developed economies.

One of the key finding of the survey shows that India is more upbeat than China. Respondents from India are abuzz with optimism for the years ahead, with 98% of them seeing "good" or "very good" business prospects. Meanwhile, the survey pointed out that in comparison to India, China-based executives were notably less enthusiastic.

Eight out of the 10 respondents in China say that the outlook is promising, but just 3% agree that it is "very good", though both countries are highly positive about the prospects for business in 2007, the survey said.

The survey highlights the importance of emerging markets to companies as primary revenue and sourcing opportunities.

A majority of respondents intend to invest more time and money in emerging markets over the next three years than in the developed economies.

The survey, which polls more than 1,000 executives every year is sponsored by UK Trade and Investment, a government body which promotes exports and inward investment. "Emerging markets are clearly top of the agenda but they are not risk-free environments and business culture is frequently very different," UK Trade and Investment chief executive Andrew Cahn said.

"It is more important than ever that corporate leaders have access to high quality, impartial advice on which to base their management decisions," he said. Interestingly, nearly a third of the executives (28%) chose the latter option, up from 20% in 2006 and just 9% in 2005.

Reasons behind the growing optimism are majorly the expanding global economy by some 5.4% in 2006 and is expected to continue to grow robustly over the next five years. However, the rosy picture is marred by economic risks that continue to concern the business leaders. Interest rates have been on a rise in the past two years in US and Europe, while a sharp slowdown in the US housing market is leading to fears of a decline in consumer spending.


----------



## Contrarian

*Maruti steps on gas for final showdown*

This is Jagdish KhattarÃ¢â¬â¢s final fight. Before the 64-year old MD of Maruti Suzuki takes a bow this December, he wants to ensure that the largest passenger car maker in India maintains its lead. A decade ago, three out of every four cars sold was a Maruti. Entry of new players in the midnineties and more sophisticated models have eaten into its market share which is now 55%. With the top 15 automobile manufacturers in the world either expanding their presence in the country or in the process of setting up shop, the gap is narrowing. And Khattar is ready to shift into the top gear.

"This is the third phase for Maruti. The first phase for Maruti, between 1983 to 1993, was of dominance, while the second one saw global players enter the market making it competitive. Now that the industry has matured and more are players entering, we see new challenges in this third phase. We aim to make a million units by 2010 and we are gearing up for that," he says.

A second car plant, entry into the fast-growing diesel segment, new models, a revamp of the existing line-up and the stage is set for Maruti to take on the competition.

Beginning with the launch of new Zen Estilo last month, the entire range of Maruti models is set for an overhaul. It has also announced that it will be entering newer segments which include models above Baleno, its top-of-the-line model. The new Baleno and Grand Vitara are expected by mid-2007, while the next generation Alto and Esteem are not far behind. "We are working on a brand new car in Alto segment to be introduced in 2008-09. While the car is primarily for export to Europe, it will also hit Indian roads in due course," he says.

The company had stopped servicing the European market since September 2005, as bulging domestic demand had diverted exports from Europe. Besides, stringent emission norms in Europe would mean the Alto, which leads MarutiÃ¢â¬â¢s exports, would have to undergo major changes.

Maruti has increased its exports to non-European countries by more than three times. Three years ago, exports to non-European regions were around 12,000 units. They went up to about 22,000 last year, and this year it will export about 38,000-40,000 cars.

"Once the new model comes and we resume our exports to Europe, we are looking at total exports of over 1,60,000 units," Khattar says.

The second plant at Manesar, starting with a capacity of one lakh units, is already in the process of being expanded to three lakh units per annum to meet the one million target by 2010, says Khattar.

However, the knockout punch is MarutiÃ¢â¬â¢s entry into the diesel market. Maruti has fitted the 1.3 litre multijet under the hood of the Swift aiming squarely at Tata MotorsÃ¢â¬â¢ nine year domination in the diesel segment.

"Many people ask us, why we were so late to enter into the diesel segment? We interpreted things wrongly," he admits. In 1998, government announced that administered price mechanism for petroleum would be abolished. If this was implemented, the gap between diesel and petrol prices would have been cut and therefore the market for diesel cars would not have grown sharply. "Even today, our reading is that diesel is popular due to price differences rather than because of performance."

"And therefore, in 1999, we decided against investing in a diesel car, because by the time we would have got a diesel in 2002, we expected the demand in diesel to slow down. Maruti took the bait and paid for it. For neither was controlled pricing mechanism abolished, nor did the demand for diesel stem. In fact, Tata Motors made most of demand for the sticky fuel and today sells over 90% of the diesel cars sold in India. In 2002 we made a noise at Suzuki that we need a diesel engine and the plant was announced by 2004," he says.

Although late, debut of the 1.3 litre multijet manufactured through a licence from Fiat is bound to shake up the diesel sector in India. The diesel engine developed by Fiat is one of the most refined in the world and combined with MarutiÃ¢â¬â¢s brand value and aggressive pricing, it will make it tougher for rivals who are planning to enter the segment, an industry expert says.


----------



## Contrarian

*Govt puts new SEZs on hold*

NEW DELHI: Stung by fast spreading protests, government has finally blinked on controversy-scarred special economic zones, putting on hold clearances for all proposals from developers. The retreat came in the form of an announcement on Wednesday for sudden postponement of the meeting of the board of approvals, the single-window clearing agency for SEZs, following a missive from the Prime MinisterÃ¢â¬â¢s Office.

The meeting, scheduled for Thursday, has been postponed indefinitely though commerce department sources said BoA may resume work after the empowered group of ministers (EGoM) on SEZs headed by Pranab Mukherjee meets on January 22.

Sources said even those SEZ projects where clearances have been given but work is yet to commence will be under scrutiny. The move is expected to severely affect the plans of a large number of corporate houses including Mukesh Ambaniled Reliance Industries LtdÃ¢â¬â¢s proposal for Maha Mumbai SEZ and TataÃ¢â¬â¢s zone in Gopalpur.

Commerce & industry minister Kamal Nath said the decision was taken as the government wanted to avoid any controversy. "States which have approached us with proposals have to tell us how the land will be acquired and what kind of land is going to be used for building SEZs. The issue will be discussed by the EGoM, which will decide on land acquisition," he said. The EGoM will also deliberate on the area that should be earmarked for non-processing activities like setting up hotels, hospitals and residential units Ã¢â¬â another reason for which the SEZs have come under fire.

The green light for the SEZs put on hold is likely to delayed because a section in government wants the zones to be kept in abeyance till a new rehabilitation policy focussing on use of agricultural land and better compensation for displaced has been put in place.


----------



## Contrarian

*Yemen invites ONGC to build refineries*

NEW DELHI: Yemen has invited Oil and Natural Gas Corp (ONGC) to build a 100,000 barrels per day refinery on its Arabian sea coast but the Indian state-run firm has conditioned participation in the 1-billion dollar project on being allotted an oilfield in return.

"We have plans to build 100,000 barrels per day refineries at Hardamout and southeastern region of Al-Mukalla. We have invited ONGC to participate in one of them," Yemen Oil Minister Khalid Mahfoudh Bahah told reporters.

The projects will typically involve an investment of one-billion dollar each and can be wholly-owned by foreign companies. "They will have the freedom to sell products in local market as well as export."

The projects discussions with prospective investors will be concluded by 2008 and construction will take another 3 years.

"ONGC has said they will think of participation in the refinery projects when they are given an oil block in Yemen," the minister said.

Yemen, he said, was not considering allocating an oil block to ONGC on nomination basis.

"We want to do away with such a dispensation. We want to put all on an equal footing. They will be invited to participate in the fourth round of offering of exploration blocks in second half of 2007," he said.

Five to ten offshore exploration blocks will be available for competitive international bidding. This will be Yemen's maiden tender for offshore exploration block.

Bahah said Yemen also plans to set up a petrochemical complex based on gas reserves in the Gulf nation.


----------



## Neo

*Indian GDP forecast revised up to 8.4 per cent *

NEW DELHI: Indian think tank NCAER on Wednesday revised up its 2006/07 economic growth forecast for a third time to 8.4 per cent on the back of booming industry and services sectors.

The National Council for Applied Economic Research (NCAER), which raised its forecast for gross domestic product growth from 8.1 per cent, also expected inflation to be at the bottom of the central bankÃ¢â¬â¢s target range at the end of the fiscal year in March.

Ã¢â¬ÅThe overall macroeconomic indicators for the current year point to maintainance of a growth momentum that delivered GDP growth of over 8 per cent in the last two years,Ã¢â¬Â NCAER said in a report.

The economy grew by 8.4 per cent in 2005/06. It grew an annual 9.1 per cent in the first six months of 2006/07, and policy makers have said growth could be close to 9 per cent for the full year.

Although monsoon rains were better in 2006/07 than the previous year, NCAER expected farm output growth to moderate to 2.7 per cent from 3.9 per cent in 2005/06.

Industrial output was seen growing by 9.1 per cent this fiscal year, up from 8.7 per cent in 2005/06, while the services sector was expected to grow by 10.2 per cent, marginally higher than a year before.

Ã¢â¬ÅThere is some relief from the exceptionally high levels of crude oil prices that prevailed for the last one year, buoyancy in tax revenues has kept budgetary deficits in check, and there is a record growth rate in exports and foreign capital inflow, particularly FDI,Ã¢â¬Â NCAER said.

The think tank said inflation would be 5.0 per cent by the end of March, the bottom of the central bankÃ¢â¬â¢s forecast of 5.0-5.5 per cent. Annual wholesale price inflation was running at around 5.6 per cent at the end of 2006.

The NCAER expected the federal fiscal deficit to fall to 3.6 per cent of GDP from 4.1 per cent in 2005/06. The government is aiming for a deficit equal to 3.8 per cent of GDP.

But the current account deficit was forecast to rise to 1.9 per cent of GDP in 2006/07 from 1.3 per cent in 2005/06.

Ã¢â¬ÅThe improved growth performance will make it easier to carry the two macro-economic deficits in the current year to more manageable levels.Ã¢â¬Â

http://www.thenews.com.pk/daily_detail.asp?id=39273


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## Contrarian

*Pharma firms bet on healthy bacteria*

NEW DELHI: Generally consumers associate harmful or bad with the word bacteria. But a relatively new area, probiotics, which is basically bacteria with a beneficial health effect, is increasingly becoming popular in therapy.

With more therapeutic applications emerging everyday, major companies such as Danone are planning a foray in the sector.

Bacterial species lactobacillus sporogenes, lactobacillus acidophillus, lactobacillus plantarum, Bifidobacterium; yeast species saccharomyces boulardii and saccharomyces cerevisiae are probiotics used for therapeutic purposes.

Probiotics, which are normally associated with fermented dairy products, are used as dietary supplements in US. Refrigerated, fermented milks containing probiotic bacteria labeled as dietary supplements are currently being marketed in US.

Domestic companies that are marketing probiotic products for therapy in India are Zydus Cadila, Tablets India, Microbax and Unichem India (tie up with Japanese firm Uni-Sankyo).

Tablets (India) has entered into agreements with TOA Pharmaceutical Co, Japan and with European major, Hansen of Denmark, while Cadila Pharmaceuticals markets probiotics (ampicilin and lactobacillus; lactic acid bacillus).

In India, probiotics are being used mainly for gastroenterology. For instance, lactobacillus sporogenes formulations are used for various indications like diarrhea (neonatal, infant, adult), constipation, lactose intolerance, dyspepsia and colitis.

In fact, beyond its well-established usefulness in promoting digestive health, its most impressive research finding is in the area of containing cholesterol levels, industry experts say.

"Probiotic R&D is poised to make great advances during the next five years", says Utkarsh Palnitkar, national health sciences industry leader, Ernst & Young.

"The challenge in probiotics in India is that it falls under preventive care which is yet to be accepted as a line of therapy here," he added.

Probiotics are being used for treating urogenital infections, diarrhea, inflammatory bowel diseases, allergy, hypertension, AIDS and leukemia and for overall growth.


----------



## Contrarian

*HPCL, Total may tie up*

NEW DELHI: Hindustan Petroleum is in talks with Total for partnering its upcoming refinery at Vizag in Andhra Pradesh and may offer a majority stake of 51% to the French oil major.

This will be the second strategic tieup that the company is eyeing after trying to rope in steel tycoon Lakshmi Niwas Mittal and Oil India Ltd for its Bhatinda refinery.

"We are in talks with Total for a possible partnership in the 9 million tonne expansion at Vizag refinery," HPCL chairman MB Lal said on the sidelines of 'Petrotech 2007', India's biennial hydrocarbons showcase.

HPCL is ramping up Vizag refinery capcity from 7.5 million tonnes a year and is building another export-oriented 9 million tonne unit next to it.

Lal will meet Total CEO Thierry Desmarest for talks on the planned stake sale. HPCL, he said, was also in talks with several firms for its $3 billion Bhatinda refinery in Punjab.

HPCL will pump up to Rs 16,000 crore by 2011-12 into its petroproduct export plans by setting up a greenfield refinery some 30 km from its existing unit at Vizag.

The company has asked the state government to allot 2,500 acres in the special economic zone being set up by the YSR Reddy government.

It is augmenting refining capacities at its Mumbai and Vizag refineries for higher volumes and Euro-II/III fuels. In Mumbai, it is investing Rs 1,152 crore to expand capacity.


----------



## Contrarian

*'Agriculture has maximum sensitivity'*

NEW DELHI: For a foreigner visiting India, Pascal Lamy knows the country very well and his knowledge on problems facing agriculture could even embarrass some locals.

After all, he is no stranger to India having visited it nearly a dozen times in the last 10 years, first as European trade commissioner and now as the head of WTO.

But with Doha talks having been in suspension mode for over six months, the WTO director general is trying to gauge afresh the "red line and the bottomlines" that India has on some issues on negotiating table especially agriculture.

"It (convergence of views) will have to be everywhere since single undertaking remains. But agriculture has taken precedence over others.

If the main reason for the round is rebalancing the rules in favour of developing nations, then agriculture is the first candidate in this round. It has maximum sensitivity," Lamy told TOI.

He has been doing the same with others having met US Trade Representative Susan Schwab last week and African trade ministers just before he landed in India to find the margins of maneouver to get the talks moving again.

While the world may be thinking that the 150 WTO members have not made much headway, Lamy says the initiative has been taken at the political level.

"US president, Angela Merkel and Tony Blair have refreshed sense of commitment after the shock of last July. There was a sense of leniency earlier and a sense that talks will resume but July showed them failure was possible and they started looking at the cost of failure. For them Doha Round is not problem number one, but probably number three or four from being number 20 on the list earlier," he says.

Though optimistic, he is not quite confident that a consensus is anywhere in sight. He is unwilling to set a date for a WTO ministerial meeting due this year as per rules.

"The Doha ministerial declaration says there will be a ministerial at the end of negotiations. But that needs substance and we are not there yet. It needs political traction... There is more commitment but the numbers are not there."

While all the members know what each one wants from the other, a broad agreement is still elusive. What makes the task more difficult is that no one is willing to move first.

"USTR won't come and make an offer and say tell me what your new price is. There is a fear that others will pocket the offer and it will not be reciprocated," he says.

He believes a solution lies in discrete diplomacy, which is happening in Geneva, where ambassadors are exchanging notes and testing waters before ministers meet.

But the WTO DG isn't quite sure if this will result in a move towards a "landing zone". "The water is boiling but it's not yet reached boiling point.

I can take the responsibility of convening ministers in a visible way if I am convinced we have reached boiling point," he says but is unwilling to gauge the temperature of water at this point. Nor is he willing to hazard a guess on when talks will culminate into an agreement.

What about the mini-ministerial in Davos next week? It may be a useful interaction but Lamy does not expect any breakthroughs. So, will he take the initiative?

"I am talking to them and I am digging into technicalities. Option A is bottom up negotiating process which I help but which I don't drive," he says. And without any provocation, Lamy says, he is unwilling to put a compromise draft on the table to see to it that the round is not a failure.


----------



## Contrarian

*RIL Q3 net soars to Rs 2,799 cr*

MUMBAI: Mukesh Ambani group's flagship company Reliance Industries on Thursday posted a net profit of Rs 2,799 crore in the October-December quarter, up from Rs 1,776 crore in the year-ago period.

The total income (net of excise) was Rs 26,514 crore for the third quarter ended December 31, while the same was at Rs 18,348 crore for the corresponding quarter a year ago, Reliance Industries informed the Bombay Stock Exchange.

The figures for the corresponding periods of the previous year are not comparable in view of the planned shutdown of the refinery during October and November 2005, the company said.

The company said refining margins for the December quarter were $11.7 a barrel.

Shares in Reliance, rose 1.27 per cent to 1,367 rupees in a firm Mumbai market. They rose 8.5 per cent in the December quarter, lagging a 10.7 per cent rise in the benchmark BSE index.


----------



## Contrarian

*Bharti Airtel to invest over $2 bn next fiscal*

NEW DELHI: Bharti Airtel, India's largest private cellular operator, on Thursday announced an investment of over two billion dollar (Rs 9,000 crore) in 2007-08 to expand network, but wanted state-run BSNL to share infrastructure.

"Of the total capex for the next financial year, maximum will go for the rural areas," Akhil Gupta, Joint Managing Director, Bharti Airtel, said on the sidelines of a conference organised by Confederation of Indian Industry and Ericsson.

Gupta, however, raised the issue of infrastructure sharing with Bharat Sanchar Nigam Ltd, saying this would lead to faster roll out of networks there.

"I appeal to the government to force BSNL to share its infrastructure with private operators," he said.

BSNL has so far opposed such an arrangement, saying huge investments have gone in creating rural infrastructure and private players should not be allowed to take undue advantage.

Gupta also said the company was waiting for rules to be framed for introduction of next generation (3G) mobile services to start operations both in rural and urban areas.

The company has chalked out its rural strategy and would concentrate on rural areas, which have huge growth potential, in the years to come, he said.

Bharti, which has 30 per cent market share in GSM-based industry with 32 million subscribers, would also bring the broadband in rural areas, Gupta said.

He claimed that as on September 2006, Bharti had presence in 155,000 smaller towns as part of its strategy to cover rural India and another 20,000 towns to be added soon.

Bharti would bring the broadband, especially with wireless technology, in rural areas when the policy to start 3G services was announced, he said.

Rural areas have so far been given mainly voice and message services. Wireless broadband had great potential for rural India, he said, adding this would also help the rural community to remain connected.

Besides, broadband would also help increase business activity for the farming community, he said.


----------



## Contrarian

*Ericsson to pump in $100 mn annually in India*

NEW DELHI: Swedish telecom equipment major Ericsson on Thursday announced an investment of $100 million every year in India with an option to enhance it depending upon the growth in the telecom sector.

Ã¢â¬ÅWe will be investing $100 million annually for the next five years. The figure could go up depending upon the growth in the sector," Mats Granryd, Managing Director, Ericsson India, said, while briefing reporters in the Capital.

Ericsson's Global CEO, Carl-Henric Svanberg, who is here to attend CII-CEOs forum, said: Ã¢â¬ÅIndian telecom market has grown more than double in last five years and we have a lot of activity here.Ã¢â¬Â

Asked about BSNL's mega 45-million line GSM tender, in which Ericsson emerged the lowest bidder, getting into a legal row after US telecom giant Motorola challenged the process in the Delhi High Court, Carl-Henric said: Ã¢â¬ÅThe faster the solution, the better it is. Delay is not positive for BSNL.Ã¢â¬Â

The company was working with various operators on the next generation (3G) mobile services and the trial runs were on. However Carl-Henric did not name the operators, citing the company's policy not to declare the names.


----------



## Contrarian

*Sensex@all-time high, crosses 14,300 mark*

Sensex and Nifty struck a new all-time high in afternoon trade with Sensex crossing 14,300. Oil pack led the rally, tracking recovery in US crude futures. Oil futures rebounded to end more than a dollar higher, off a 20-month low on Wednesday.

At 1:40 pm, the Sensex was up 176.03 points or 1.25 per cent, at 14,307.37 and the Nifty was up 59.15 points or 1.45 per cent at 4,135.60.

Positive third quarter results also aided the intra-day rally. Several stocks in the mid-cap segment were also in bullish form, lifting the segment indice to record high. Market was buoyant tracking green Asian markets, bullish overnight closing of Indian ADRs and data showing resumption of FII-buying.

Ranbaxy Laboratories Ltd Q3 results met market expectations. The company posted consolidated profit after tax & minority interests of Rs 183.30 crore for the quarter ended December 31, 2006 as compared to Rs 68.60 crore for the quarter ended December 31, 2005. Total income (net of excise) increased from Rs 1450.30 crore for the quarter ended December 31, 2005 to Rs 1779.30 crore for the quarter ended December 31, 2006.

Among the 30-Sensex pack, 28 advanced while the rest declined. In NSE, there were 738 advances and 262 declines.
Among the sectoral indices, almost all were trading in the positive territory. Oil and gas stocks surged 2.39%, PSU stocks jumped 2.05%, capital good stocks advanced 1.25% and telecom stocks rose 1.09% while consumer durable stocks declined 0.49%.

The major market movers on Sensex were ONGC which gained 4.19% to Rs 932; L&T rose 2.37% to Rs 1,590; Bharti Airtel rose 2.24% to Rs 681.65 ; HDFC jumped up 2.14% to Rs 1,581 and Reliance rose 1.83% to 1,374.50. Dabur, ONGC, Jet Airways, HCL Tech and VSNL were the major gainers in the NSE.

There were just two major losers in the BSE pack. Tata Motors which declined 0.58% to Rs 959 and Hindalco which fell 0.12% to Rs 168. Engineering & construction major L&T rose 2.3% to Rs 1,588.25. The stock today hit an all-time high.

Cellular service providers were in demand expecting strong Q3 results. Bharti Airtel rose 2.5% to Rs 683.50. The stock today struck an all-time high of Rs 683.70. Reliance Communications rose 1% to Rs 446.80.

Exide Industries Ltd climbed 1.7% to Rs 43.65 after posting unaudited net profit after tax of Rs 34.85 crore for the quarter ended December 31, 2006 as compared to Rs 21.54 crore for the quarter ended December 31, 2005. Total income increased from Rs 339.26 crore to Rs 459.58 crore in the same period.

Chambal Fertilisers & Chemicals Ltd fell 2.5% to Rs 38.40 on posting unaudited net profit of Rs 70.13 crore for the quarter ended December 31, 2006 as compared to Rs 77.89 crore for the quarter ended December 31, 2005. Total income deceased from Rs 1056.89 crore to Rs 798.14 crore in the same period.

NDTV rose 0.8% to Rs 314.75 after reporting 92% surge in net profit for the quarter ended December 2006, to Rs 4.82 crore, compared to a net profit of Rs 2.51 crore for the quarter ended December 2005. Total income increased to Rs 79.38 crore from Rs 68.90 crore in the same period.

Cement pivotals inched ahead on expectations of strong Q3 numbers. ACC rose 1% Rs 1,105.40 and Gujarat Ambuja Cements gained 1% to Rs 145.50. UltraTech Cement rose 0.5% to Rs 1170, ahead of its Q3 results today.
The Nikkei average finished up 0.48% or 82.45 points at 17,343.80, after earlier hitting its highest since April at 17,408.62. The Topix index rose 0.38% to 1,713.24.

The Dow Jones industrial average slipped 5.44 points or 0.04%, to end at 12,577.15. The Standard & Poor's 500 Index dipped 1.28 points or 0.09%, to close at 1,430.62. The Nasdaq Composite Index fell 18.36 points or 0.74%, to finish at 2,479.42.

Nymex crude was up 26 cents, at $52.50 a barrel, on Thursday. It had rebounded on Wednesday from a 20-month low.


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## Contrarian

*Satyam Q3 dips 30% at Rs 343 cr*

MUMBAI: Software major Satyam Computer Services on Friday posted a 30.37 per cent decline in profit after tax at Rs 343.30 crore for the quarter ended December 31, as compared to Rs 493.08 crore for the same quarter last year.

Total income increased 5.67 per cent to Rs 1,604.60 crore during October-December 2006-07 from Rs 1,518.49 crore for the corresponding quarter a year ago, Satyam informed the Bombay Stock Exchange.

The Group posted a profit after tax and share of loss in associate company and minority interest at Rs 337.23 crore for the third quarter this fiscal, as compared to Rs 429.54 crore for the same quarter previous year.

Total income of the Group increased to Rs 1,671.29 crore for the quarter ended December 31, from Rs 1514.69 crore for the corresponding quarter in the year ago period.

The shares of the company were trading under pressure at Rs 492.50, down 4.41 per cent on the BSE.


----------



## Contrarian

*Sensex up 82 points, touches 14,300 points*

MUMBAI: The benchmark BSE Sensex shot up by 82 points in early trade on Friday and touched the 14,300 points level due to sustained buying by funds on the back of good third quarter results of Reliance Industries Ltd.

The BSE-30 share index, which had gained 86.41 points on Thursday, was up by another 82.36 points at 14,300.11 in the first five minutes of trading.

Similarly, the Nifty index on the wide-based National Stock Exchange rose by 28.10 points at 4,137.15.

Stock brokers said Reliance Industries stocks continued to remain centre of brisk activity after company posted strong earnings for the third quarter.

Shares of RIL, which reported a 58 per cent jump in net profit to Rs 2,799 crore in the quarter ended December 31, zoomed to record high of Rs 1,428 on aggressive buying.

Other index-related stocks stocks too were in positive zone with sizeable gains.


----------



## Contrarian

*Rupee seen lower as dollar up against yen*

MUMBAI: The rupee may ease on Friday as the dollar climbed to near a four-year high against the yen, and on expectations for dollar demand from oil refiners.

The Japanese yen slid against the US unit after the Bank of Japan decided to leave interest rates unchanged at the end of its two-day policy meeting on Thursday.

Traders expect oil refiners to buy dollars to stock up crude as US oil traded above $50 per barrel. Oil is India's biggest import.

The partially convertible rupee ended weaker at 44.335/345 per dollar on Thursday, off an early high of 44.14 and compared with 44.18/20 in the previous session.


----------



## Contrarian

*Subex buys Canadian firm for $164 million*

BANGALORE: In what is said to be the *single largest global acquisition by an Indian software company*, telecom software firm Subex Azure, has announced acquisition of Canadian telecom solutions provider Syndesis for $164.5 million (Rs 728 crore) in an all cash deal.

The transaction is expected to be completed by March-end, Subex CMD Subash Menon said. Subex believes the acquisition strengthens the company's leadership in the telecom OSS (operations, support, software) space.

"The acquisition of Syndesis Ã¢â¬â a recognised player in the fulfilment and assurance solution segment Ã¢â¬â will enable Subex Azure to extend its product portfolio and provide solutions that empower operational dexterity," Menon said. Post the deal, Subex Azure will have 32 of the top 50 telcos in the world as its key clients, company officials said.

The fulfilment and assurance segment (service activation software that will enable telcos to get their new value added services activated) is worth $2 billion globally, while the fraud management market, where Subex operates, is currently about $500 million. Hence, this acquisition is expected to broaden Subex's product portfolio.


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## Contrarian

*Modi bros talk settlement*

NEW DELHI: The warring Modi brothers seem to be working towards narrowing down their differences.

B K Modi and V K Modi have smoked the peace pipe, at least on Modi Rubber Ltd, a bone of contention for many years, where differences have meant that operations have remained suspended for nearly five years, culminating into a reference to the Board of Industrial & Financial Reconstruction setting the stage for a revival of the company.

B K Modi, sources said, has agreed to let his younger brother V K acquire the 44% stake held by banks and financial institutions at Rs 91 per share in a deal estimated to be worth Rs 101 crore.

Sources said V K will have a 64% stake in Modi Rubber, through his holdings in the company through other entities. The FIs had invited bids from both the brothers on the basis of an "upfront all-cash basis".

B K Modi, who is now into film-making, had offerred to buy the stake at Rs 70 per share. V K Modi, on the other hand, offered a price of Rs 91 per share but sought permission to make the payment in one month.

ICICI Securities, the merchant banker acting on behalf of FIs, accepted V K Modi's bid, and permitted him to deposit 20% upfront and the rest by August 18.

But B K Modi opposed the decision and later decided to revise his offer to Rs 95 per share, provided he was also given time to pay up.

With FIs not agreeing to the proposal, B K Modi challenged the move in BIFT and later in AAIFR, which did not intervene. The brothers reached an amicable solution after weeks of negotiations.


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## Contrarian

*Ballarpur to toe Lalit Thapar's global vision*

NEW DELHI: When Lalit Mohan Thapar decided to don the mantle of chairman emeritus of Ballarpur Industries Ltd (BILT) on June 30, 2006, he wanted to be around to advise the chairman and the companys board whenever needed.

But now, the group which he steered for over 40 years, will have to live without his vision, acumen and entrepreneurial skills.

This came at a time when the flagship company of the group, Ballarpur Industries has decided to transform from being the country's largest paper manufacturer to become a significant global paper.

LMT decided to step down as chairman after he passed 75 year, which he thought was a significant milestone to take this important decision.

This fundamental change (of becoming a global player) in the DNA of BILT requires new strategic leadership at the highest level, he had said.

Gautam Thapar, his nephew who had been involved with running the company, he felt had the energy and drive to ensure the successful execution of the global vision of BILT.

LMT, as he was fondly called by his friends and employees, had a difficult 2006 and was not regularly at work, specially after his illness. He had handed over the day-to- day responsibilities of his empire, including the flagship Ballarpur Industries to Gautam Thapar, the vice-chairman and MD of the company.

LMTs father late Karam Chand Thapar was the founder of the Thapar empire. The group was among the top corporate houses in the country till the late 1990s.

During the late 90s, the slowdown in the economy and the paper industry impacted Ballarpur and the company went through a rough patch.

Slowly, Bilt bounced back, partly because of LMT virtually forced the Indonesia paper giant Sinar Mas to fold up and sell out to Thapars.

After a bitter corporate battle, Sinar Mas threw up its hands, and sold its Indian operations to Bilt. Many say, it was because of LMT's influence in the corridors of power.

LMT was a well-networked industrialist, and also had influence beyond the national boundaries. This was evident, when Polaris boss Arun Jain was put behind bars in Indonesia and the situation seemed to be getting out of control, it was LMT who helped him to get out.

With the liberalisation wave hitting the country, Ballarpur diversified into a host of unrelated businesses like leather, light weight concrete blocks and reinforced slabs, prawn culture, compressed straw board, nylon, newspaper publication etc.

But the group failed to make success of most of these businesses, lost financially and then decided to hive off some of these businesses. The major among them was edible oil and glass.

Then came the family settlement in 2000, following which the entire empire was divided among LMTs brothers - IM Thapar, BM Thapar, MM Thapar, who have since given greater responsibility to their children to run the various companies in the group.

According to the original family asset and management division, Bilt and AP Rayon went to LM Thapar; JCT, JCT Electronics and Greaves to MM Thapar; Bilt Chemicals, Bharat Starch and Crompton Greaves was vested with BM Thapar; and KCT Coal Sales, Water Base and India City Properties to IM Thapar.

After the split in the group, it decided to focus on paper, and several initiatives such as a new product-mix and re-organisation of marketing and distribution, were taken in tune with the emerging trends in the industry, locally and globally.

Recently, under LMTs guidance, the company decided to focus on retail market with a new portfolio of branded products Ã¢â¬âwell-manufactured stationery and tissues.


----------



## Contrarian

*Identification No. to invest in MFs may be scrapped*

NEW DELHI: Taking up the cause of investors, the finance ministry is asking Sebi to withdraw the newly-launched MINs Ã¢â¬â the identification number for investment in mutual funds.

It is instead proposing that the permanent account number (PAN) card issued by the tax department should be used so that individuals who already have a score of cards to deal with are spared of the burden of one more identification number.

North Block, sources said, is of the opinion that PAN should be amended in a way that it provides the details of the city where the investor resides and also gives the bank branch through which he transacts business.

The ministry has also suggested a safety net for those who have multiple accounts in one branch so that confusion can be avoided.

Investors have been complaining of hardship since MINs became mandatory for fresh investment of Rs 50,000 or more in mutual funds from January 1.

When the scheme became mandatory only around 2,000had MINs, while there are a large number of investors who have taken fancy to mutual funds in the recent past.

A part of the problem is due to delay in issuing the guidelines, which were released barely a week before the deadline.

The problems being faced by investors has already been discussed with the market regulator and the Association of Mutual Funds of India, which was the driver for the change to comply with the Know-Your-Customer (KYC) norms.

But AMFI is learnt to have resisted any changes to the present scheme, prompting the finance ministry to dash off a letter to Sebi.

AMFI is now trying to increase the number of players including some banks and ICICI Brokerage to authorize them to issue MINs.

The issue is expected to be clearer in the next few weeks though a retreat by AMFI will be difficult given the fact that a number of investors have queued up over the last fortnight to get the new numbers, sources said.


----------



## Contrarian

*Sharp rise in banks' foreign liabilities
*
MUMBAI: Foreign liabilities of Indian banks rose sharply between April and June 2006 as NRIs deposited large sums to take advantage of buoyant interest rates in the country and companies borrowed abroad to buy capital goods for capacity expansions.

RBI has released data which shows that banks' international liabilities at the end of June 2006 stood at Rs 59,636 crore, or nearly 23%, above the previous year's level.

Liabilities rose by Rs 14,153 crore, or 4.6%, during the first quarter of fiscal 2007 compared to the previous quarter.

Egged on by a surging equity market, NRIs and portfolio investors bought more Indian shares and deposited large funds in banks.

NRE rupee deposits (33%), foreign currency borrowings (22%) and FCNR(B) deposits (20%) accounted for three-fourths of total liabilities.

Much of the NRE and FCNR(B) deposits have come from US, UK and United Arab Emirates as migrant Indian workers and professionals sent money home.

"NRE rupee deposits are highly interest rate-sensitive. Indian banks have been offering attractive rates on such deposits. Banks, on an average, offer over 6% return on an annual basis. Additionally, interest on NRE and FCNR is free from Indian taxes, whether an NRI operates the account directly from his host country or from India. This has also enabled banks to mobilise funds through these products," said an official at a private sector bank.

The economy has grown at an average rate of over 8% in the past three years and demand for loans has increased at more than 30% every year, sending banks scrambling for money.

High returns from MFs and other avenues have driven away a large number of domestic depositors, forcing them to offer better interest rates to mobilise money.

Strong imports have also stoked demand for foreign currency, much of which comes from expatriates and foreign investors.

RBI data showed that nearly 69% of borrowers took loans in four countries Ã¢â¬â US (37.1%), UK (13.3%), Singapore (12.1%) and Germany (6.1%).

They borrowed in rupees (47.9%), followed by dollars (41.4%) and pound (5.8%).

"Dollar-denominated debt would be a cause of concern if we expect any depreciation of rupee against dollar. At present the market is of view that easing oil prices would help strengthen rupee against greenback. However, one is not aware of any major shocks in the future," said Abheek Barua, chief economist, ABN Amro Bank.


----------



## Contrarian

*Left to fight insurance cap rise*

NEW DELHI: The need to counter the ever-growing perception that government is not moving forward on big-ticket reforms may be a major motivation for the fresh effort at getting some progress on easing the FDI cap in Insurance sector.

Left's resistance has been the chief stumbling block for a government eager to expand the field by letting in big global names in the insurance sector.

Karat's reaction showed that Left remains unrelenting. Indeed, a senior Left leader appeared to mock Chidambaram's assurance to Brown.

"From time to time, the finance minister keeps making this promise," he said. "We will oppose it tooth and nail."

During the meeting, opening of the banking sector also came up and India sought greater freedom for its banks to operate in UK.

"We hope UK will give more licences to Indian banks," Chidambaram said. He pointed out that Standard Chartered Bank of UK was the largest foreign bank in India. "I am sure they will continue to grow organically in India," he said.

At the launch of the financial dialogue, both sides discussed ways to stem flow of finances to terrorists. The need to cut funds to terror groups was part of comprehensive discussions on security.

Chidambaram also assured Brown that Vodafone, a leading British telecom player which is bidding for India's fourth largest cellular service provider Hutch-Essar, would not be discriminated against.


----------



## Contrarian

*Govt aims to cut Internet tariffs*

NEW DELHI: After beating down tariffs in the voice market, telecom & IT minister Dayanidhi Maran is set to replicate the trend in Internet services.

To do this, Maran intends to work with MTNL, BSNL and STPI to launch server hosting centres in India.

"We want traffic generated in India to terminate in India rather than be routed through a server located overseas. The costs will go down and data flow will be faster," he said.

Speaking at The India Digital Summit 2007, the minister said his vision for a digital India was to see an India connected with a network of communication technologies spanning optic fibre and wireless, interacting in all 22 languages using language to language machine translation and cross lingual information access facilities.

Maran pointed out that despite India being one of the top six nations to use the Internet, with high double digit annual growth, the top 10 hosts of wesites indicte that the top three websites are all .com websites with servers based in European countries.

"With a projected 0.62% growth rate of the website hosting market, I set a target to see. in websites with servers basedin India take the position in the top 10 webhosting sites.

To mark 2007 as the Year of Broadband, the government is setting a target o broadband coverage for all secondary and higher secondary schools, public health care centres and grampanchayats.


----------



## Contrarian

Discussion:

I think its wrong for Indian companies to buy out foreign companies or invest on foreign shores just yet. I think they should invest heavily in their own country, thereby increasing the countries infrastructure and making the atmosphere more and more condusive for investment. I think it kind of gives the wrong signals to other foreign investors as well as the fact that money goes out of the country.

This should be happening, but not now. I think now is not the time for this, probably after 5-10 years, this should happen. The companies should invest abroad after this period.


----------



## Contrarian

*ETA Ascon to invest $600 mn in India*

CHENNAI: Dubai-based ETA Ascon business conglomerate views India as a land of multiple opportunities and has chalked out big plans for pumping in huge investment in infrastructure, manufacturing and service secctors.

Syed M Salahuddin, managing director, ETA Ascon group of companies told ET in Chennai, " We are definitely looking at India as a big opportunity to grow our businesses. We have envisaged a capital investment of $ 500 to 600 Million in the next two years of which our equity investment will be $ 100 to 150 Million".

Founded in 1973, ETA group employs over 40,000 people and has revenues of over $ 3 Billion. It has operations mainly in UAE and India with interests in areas like construction, manufacturing, trading, shipping, retail, leisure, facilities management, automobiles, insurance and IT

He said the group has identified certain areas for investment. These building port facilities including private ports, special economic zones, independepent power plants based on coal and industrial goods like lifts and elevators.

It is also interested in building container terminals and handling cargo containers. Now, containers are transported by public sector Container corporation of India. ETA is among the 14 new players approved by the Government for moving containers from inland container depots. It will operate the service from Mumbai to Delhi with its own ICDs.

Mr Salahuddin said it proposes to build IPPs mainly on the East coast by entering into power purchase agreement with power trading corporation. In view of the construction boom, there is a huge market for lifts and elevators and the group represented Mitsubishi for marketing them in India.

He said the group has built a culture of growing in a organic way without taking the M & A route. It also plans to enter the property market in a big way by constructing houses in Bangalore and Chennai and major tier II cities like Coimbatore, Chandigarh and Nagpur.

In financial services, the group is looking at setting up call centres and BPOs in India for servicing clients in Middle East and the US. Recently, it floated a JV with Sundaram Business services of Sundaram Finance group for tapping the BPO markets in UAE and other countries.

The MD also expected Star Health and allied insurance ( IndiaÃ¢â¬â¢s first stand alone health insurance company) to do well in the next two years with growing awareness for medical insurance. Asked about its foray into the banking sector, he said, " We are definitely watching that opportunity also".

Mr Salahuddin, who recently received pravasi Bharathiya Samman ( best achiever non resident indian) award from President of India , Dr A P J Abdul Kalam said there is a wealth of capital available in Gulf countries generated out of big margin on crude products.

About 30% of Gulf companies have long connection with India. They are keen on teaming up with NRI entrepreneurs and managers for investment in India. If their proposals with ETA group is considered, total capital investment in India will exceed $ One Billion, he pointed out.

In order to quickly attract their investment, Indian Government has to conduct road shows and create an awareness in the Gulf Region. Being a democracy, India has its owns problems. But, if it has to grow fast like China, it has to overcome infrastructure constraints.

Mr Salahuddin said , " India is endowed with natural resources like mining materials and water as well as vast human resources. Besides the skilled labour, over the years, it has developed a large managerial and entrepreneurial class. It also has a big market. So, naturally, India has to grow. No one can stop its growth".

" Our knowledge power is our unique strength. We are definitely better than others. No other country has chosen a scientist ( Dr Kalam) as its President", he noted.
http://economictimes.indiatimes.com/ETA_Ascon_to_invest_600_mn_in_India/articleshow/1226642.cms


----------



## Neo

*Indian inflation hits highest in two years *

NEW DELHI: IndiaÃ¢â¬â¢s inflation jumped half a percentage point to top six per cent, its highest level in two years, as prices of food soared, data showed, stoking expectations of an interest rate rise.

Inflation measured by the wholesale price index Ã¢â¬â the most closely watched price monitor Ã¢â¬â hit 6.12 per cent for the week ended January 6 from 5.58 per cent the previous week and 3.86 per cent for the same week a year earlier.

The rate was the highest since late 2004.

Prices of such staples as fruits, vegetables, maize and wheat all climbed as did costs of aviation turbine fuel and other energy sources, according to the official data released on Friday.

The rate was far above the 5.5 per cent ceiling set by IndiaÃ¢â¬â¢s Reserve Bank of India, leading to speculation that the central bank would tighten monetary policy at its next meeting on January 31.

Ã¢â¬ÅI think you will see some kind of change in the repo rate or the bank rate,Ã¢â¬Â said TK Bhaumik, chief economist at IndiaÃ¢â¬â¢s largest private company Reliance Industries in Mumbai.

Finance Minister P Chidambaram said the inflation rate was Ã¢â¬Åa matter of concernÃ¢â¬Â and that his ministry was in touch with Reserve Bank of India and the Ministry of Agriculture.

Ã¢â¬ÅInflation is a highly sensitive issue for the government,Ã¢â¬Â Bhaumik said.

The government has said infrastructure bottlenecks in AsiaÃ¢â¬â¢s fourth-largest economy are fuelling inflation but it is keen to avoid stifling growth.

The economy grew by 9.1 per cent in the first half of the financial year.

At the same time, the ruling Congress government Ã¢â¬â mindful that rising costs can be political dynamite among IndiaÃ¢â¬â¢s poor masses which helped propel it to power in 2004 Ã¢â¬â has said Ã¢â¬Åprice stability is one of the highest priorities.Ã¢â¬Â

The central bank has been using a variety of monetary tools to try to tame inflation.

In December the Reserve Bank boosted the amount of money that banks must keep with the central bank, sucking out liquidity in a bid to fight inflation and stop the economy from overheating.

It raised the cash reserve ratio by 50 basis points to 5.5 per cent in a bid to drain Rs135 billion, or three billion dollars, from the banking system, citing rapid economic growth, 30 per cent credit growth, rising inflation and Ã¢â¬Åstrains on domestic capacity utilisationÃ¢â¬Â.

It had also in stages hiked its reverse repurchase rate by 125 basis points to a four-year high of six per cent and raised its short-term lending rate by 150 basis points to 7.25 per cent with the most recent 25-point rise in October.

However, earlier this week global investment services MoodyÃ¢â¬â¢s said it did not expect any tightening moves by the central that would provoke a Ã¢â¬Åhard landingÃ¢â¬Â for the Indian economy.

http://www.thenews.com.pk/daily_detail.asp?id=39506


----------



## Contrarian

*Govt mulls options to use forex for core sector*

NEW DELHI: The use of foreign exchange reserves for financing infrastructure projects seems to be on top of the government's agenda for the Budget, with the finance ministry exploring four options to step up investment in core sectors like roads, ports, airports and power.

While it has reopened the suggestion to set up a special purpose vehicle (SPV) which will draw on the $177 billion reserves, the government, sources said, was contemplating a currency swap arrangement with a multilateral financing agency like the Asian Development Bank.

While ADB is borrowing through bonds in India, the government could pass on some of the reserves and the Manila-headquartered body could reinvest it in the country through sectoral assistance, sources indicated.

The third option was to invest the forex reserve in instruments that generated high returns and the earnings on the corpus could be ploughed back into the rickety infrastructure sector.

Another alternative was to allow import of machinery and equipment used by developers at zero or 5% customs duty. But this option, officials said, appeared remote since companies are permitted to import these equipment on payment of nominal or zero tariff.

While going back to the proposal to set up an SPV, like India Infrastructure Finance Company, to use forex reserves, sources said the option to set up the company overseas, which will invest in infrastructure projects, was also being explored.

Officials, however, said that a final decision on one of the instruments will be taken after an expert committee under HDFC chairman Deepak Parekh submitted its report.

Besides, it was not necessary that the government will use foreign exchange reserves to finance core sector projects, which Planning Commission estimates suggested required $320 billion over the next five years.

It is quite possible that like last time, government will junk the idea if RBI did not see merit in it or had reservations against the use of forex reserves.

While the proposal, first mooted by Plan panel deputy chairman Montek Singh Ahluwalia, appeared to be on the backburner, finance minister P Chidambaram decided to go back to it recently.

He had asked officials to prepare a note and consequently announced the setting up of the expert committee under Parekh, which is expected to submit its report shortly.
http://timesofindia.indiatimes.com/...forex_for_core_sector/articleshow/1322744.cms


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## Contrarian

*FM to meet bankers on money-laundering*

NEW DELHI: Ahead of the Budget, finance minister P Chidambaram has convened a meeting of all bank chiefs to discuss, among other things, money-laundering issues arising out of a glut of information received from banks and financial institutions in the last year.

The meeting, scheduled for February 5, will discuss filing of cash transaction report (CTR) and suspicious transaction report (STR), which is likely to form the basis for amendments to the Prevention of Money Laundering Act (PMLA).

Besides, some of the banking sector's proposals for the Budget are likely to be taken up for discussion and may find a mention when Chidambaram presents the Finance Bill in Parliament on February 28.

The meeting, which comes after the RBI's credit policy later this month, will also dwell upon interest rate movements and the steps initiated by the central bank to check overheating in the economy.

This apart, the agenda includes routine items like a review of small-scale and agriculture lending, relief for debt-prone districts, performance of PSU banks during the third quarter-ended December 2006 and filing of banking cash transaction tax returns.

As part of the Know Your Customer (KYC) guidelines issued by RBI, banks and other FIs are required to report all major cash transactions to the Financial Intelligence Unit every month and if they come across any suspicious transaction, it has to be immediately brought to the notice of the agency within a week, failing which they are liable for penal action.

The government had asked all financial institutions to monitor transactions of high-risk individuals and their alleged fronts on a day-to-day basis.

As part of a global clamour against PEPs Ã¢â¬â Politically Exposed Persons Ã¢â¬â special attempts were made in last year to educate bankers on the need to keep a close watch on such high-risk individuals.

This had also become important since pressure was mounting on India from the US and other countries to join the Financial Action Task Force (FATF), established by the G-7 countries in 1989, to combat money laundering and terrorist financing globally.

PEPs are people who fulfil prominent public functions like heads of state, ministers and deputy ministers, members of Parliament and legislative assemblies, government officials, head of customs, judges, magistrates and state prosecutors, military leadership, important party functionaries like opposition leaders, senior bureaucrats and top industrialists.

While the government's FIU arm is already functioning, the PML Act, which was set up on the lines of a similar act used by FATF member countries, is yet to take off with the Enforcement Directorate.


----------



## Contrarian

*Minority loans against RBI policy*

MUMBAI: Vote bank politics continues to bend economic reason. The recent central government proposal asking banks to reserve a share of loan disbursement for members of minority communities is in conflict with RBI policy.

The code of banks' commitment to customers drawn up in July 2006, announced by the Banking Codes and Standard Board of India (BCSBI) of RBI states that,"We will not discriminate on the basis of age, race, gender, marital status, religion or disability." Banks can be punished if the norms are violated.

Bankers and RBI are not happy with the centre's intentions."One has to see the spirit behind the entire initiative. However, this is not the way to achieve it as this could lead to heartburns. Implementation is also going to be a tedious task as none of the bank captures this data. The best way to reach to the sections of populations which have no access to banking service is through financial inclusion," says an official at a state-owned bank.

And, others agreed. Mahpara Ali, CGM at SBI's Bangalore circle, says,"Financial inclusion is the best way to get a larger section of population within the banking fold. This is the only way to make an individual self reliant."

Banks have launched campaigns to reach out to masses untouched by the system. A large number of people, including those from minority communities, do not have access to banking services because they do not fulfil tough customer verification criteria or are unable to produce documents required by banks.

The RBI also found that financial exclusion could be a reason for higher crime rates and social strife in many regions.

It has now told banks to let customers open no-frills accounts with nil or very little balance. The regulator has also eased know-your-customer norms to help such customers.

Ali said the bank had achieved 100% financial inclusion in Gulbarga district of Karnataka."Within six months we have opened close to four lakh no-frills accounts with zero-balance.

26 banks and 56 NGOs helped complete the task. We are now in the process of issuing general credit cards with a limit of Rs 25,000 to individuals," she said.

Banks are also working with microfinance institutions (MFIs) and self-help group (SHGs) to reach out to the masses.

According, to the latest RBI data, a number of SHGs linked with banks stood at 22,38,565 and total bank loan extended was Rs 11,397.55 crore during 2005-06.

A private sector bank CEO says,"There is already a mechanism of disbursal to minority community members. Banks extend loans to borrowers referred to them by the respective state development commissioners for minorities. These loans also carry an element of government subsidy."

Commercial banks must lend 40% of loans to farmers and small businessmen, who constitute, along with a few other categories, the priority sector.

Indirect farm credit and home loans below Rs 10 lakh are also included in the category. CMD of a PSU bank said:"Any lending decision should be driven by credit worthiness of an individual. The government directing the flow of credit to a particular sector is understandable. But the moment you try to get into social sectors it tends to get partial."


----------



## Contrarian

*India asks Mauritius to review tax treaty*

MUMBAI: India's tax treaty with Mauritius is under review. The Union government is negotiating with the government of Mauritius for inserting a few 'limiting benefit' clauses in the tax treaty to stop its misuse.

A group, led by the head of international taxation cell in the Central Board of Direct Taxes (CBDT), has already made a few visits to Mauritius."By the month-end, things may be clear," a member of the group holding negotiations said.

The Union government is worried about the revenue losses incurred due to the India-Mauritius Double Taxation Avoidance Treaty.

Over the years, Mauritius has been used by foreign investors to route their investments into India. Mauritius does not tax capital gains, while the corporate tax liability is 3-4%.

About 40% of the $45-50 billion FDI that came into India from 1991 to 2006 has been routed through Mauritius. A similar percentage of FII inflows also are from Mauritius.

Tax authorities are more worried about the incidence of 'round tripping' and 'treaty shopping' by investors. In round tripping, Indians bring their (black) money back into the country via Mauritian shell companies.

In treaty shopping, foreign investors invest in a country from another place which has a favourable tax treaty. The department had estimated a revenue loss of over Rs 5,000 crore caused by treaty shopping.

This has prompted finance minister P Chidambaram to shoot a letter last month to his Mauritian counterpart urging him to revisit the treaty.

"The department has even suggested to give an aid of Rs 500-600 crore to the government of Mauritius in lieu of removing or limiting clauses causing revenue loss," said an I-T official.

However, this proposal has not found favour with the Mauritian government which is not in favour of amending the treaty.

With nearly 70% Mauritians of Indian origin, the country heavily depends on the revenues generated by the GFCs, a majority of whom only invest in India.

Tax experts like Dinesh Kanabar, partner of Mumbai-based consultancy firm Ambit RSM, say India has the option of putting a limitation clause in the tax treaty to cap misuse, just like what China did recently with Mauritius.

A limitation of benefit clause will check treaty shopping as it will ensure treaty benefits to those residences who qualify certain criteria.

This clause, say experts, will come very handy in limiting the capital gains benefits enjoyed by FIIs coming via Mauritius.

In India, short term (one year) capital gains tax is 10% while there is no tax for long term investments.

"Alternatively, India has the option like US to put an anti-abuse clause in its I-T Act which will deny any treaty benefit if any abuse or misuse of the treaty is found," says Kanabar.

But as all experts believe, classifying abuse or misuse of a treaty and even making 'treating shopping' illegal will be a very difficult task for the Indian government especially after judgments like the Azadi Bachao Andalon where Supreme Court justified treaty shopping.

Experts say India faces pressure to renegotiate the treaty with Mauritius, also because of the commitment given to Singapore while revisiting treaty with them.

This commitment was given primarily to put Singapore on a level-playing field with the Mauritius.


----------



## Contrarian

*Liberty bullish on JV with Prozone*

MUMBAI: Liberty International, a UK-based company with total property assets of over ÃÂ£7.5 billion is upbeat about its plans for India.

Liberty has entered into a joint venture-Prozone Liberty with Provogue subsidiary called Prozone and says it is here for the long haul.

Said David Fischel, chief executive officer, Liberty International, "We are looking to build a successful long term business with Prozone which is a much broader and more exciting opportunity than simply investing in individual projects."

Liberty, which owns some of the largest shopping centres in the UK including nine of the UK's top 25 shopping centres said that it does not invest in a new market in a rush.

"For a start, it takes time to identify the right local partner. This is important because along with bringing a lot of its international experience into the business, it understands the importance of local knowledge in making the entire business model a success," said Fischel.

"The long-term commitment is also important as one needs to view a longer term horizon and recognise that a lot of new destinations will be built over the next few years that will perhaps be more suitable and cost effective than the locations hitherto available in India. The idea is to provide retailers, both in India and new entrants from abroad,
world class infrastructure at a price that is affordable," said Fischel.

Managing a shopping centre is a complex business and each centre varies depending on its location and consumer profile. Liberty says that it is this expertise which is built over the years that will ensure its success.

Said Fischel, "We have learnt over the years what the retailers and consumers want to see in a location and we've derived an efficient way to deliver them that product. Key variable therefore is the rental income stream and there are a host of factors which can influence that."


----------



## Contrarian

*Tata Motors starts initial work for car plant at Singur*

KOLKATA: Initial phases of construction work for the Tata Motors' ambitious Rs 1,000 crore small car project began with a bhoomi puja at Singur in Hoogly district, the West Bengal government said on Sunday.

The Tata communication came a day after the West Bengal government extended prohibitory orders banning the assembly of four or more people in Singur till Jan 28 midnight following reports that more protests could be organised over the takeover of fertile farmland for the small car project.

Even as Singur remained tense with a Tata official heckled by protestors recently, a statement from the company said that it had begun construction work on Sunday, but without detailing the exact nature of the first step.

Reports from Singur said that with over 500 policemen present, a ' bhumi puja', a Hindu ritual prior to starting any project, was performed at the site, but not over the plot whose owners claim they have not given up their land yet.

"The Tata Motors plant operation is expected to create employment in excess of 10,000 direct and indirect jobs," the release said.

The civil construction for the plant is being initiated by Tata Motors, it said.

Singur, about 40 km from here in Hooghly district, has been chosen by Tata for its small car project over 997 acres of land.

This has triggered a violent face-off between the government and farmers led by civil society groups and parties like Trinamool Congress. 

Tata Motors said through its contractors and its sub-contractors will deploy appropriate and necessary people from Singur area for various unskilled jobs and skilled assignments like masons and fitters.

It said it was initiating various steps to train people of the Singur villages, who had earlier registered with WBIDC, to improve their employability.

It has already selected a batch of individuals for an extensive six-month training. Another 179 residents of Singur, selected by WBIDC, are being trained by the Ramakrishna Shilpa Mandir (Belur).

The company is in the process of organising more extensive training for them based on a selection process. Arrangements will also be made to impart relevant training to other individuals, in WBIDC list, appropriate to their educational background and skills and based on a selection process.

Tata Motors is also organising groups of women from Singur families to supply food for construction workers. This is part of the company's plan to infuse income-generation for Singur families, by enabling them to produce various items required during the construction phase and when the plants are operational.
http://timesofindia.indiatimes.com/...t_Singur/articleshow/msid-1358412,curpg-1.cms


----------



## Contrarian

*'Corporates confident about Indian economy'*

NEW DELHI: Buoyed by impressive performance in the past six months, India Inc is upbeat about robust show of overall economy as well as by individual companies this fiscal and planned more investments in the second half, reveals a CII survey.

Majority of those surveyed forecast the economy to grow at 8.5-9 per cent this fiscal, with quite a number of them pointing out that the growth over nine per cent would not be a distant possibility.

CII's business confidence index (CII-BCI) showed an increase of 2.5 points at 71.8 for the period October-March 2006-07 over the previous period of April-September 2006-07.

The CII-BCI, constructed as a weighted average of the Current Situation Index (CSI) and the Expectations Index (EI), was higher among the non-manufacturing firms engaged in provision of services as compared to manufacturing firms.

The CSI that compares current business conditions with the previous six months has witnessed a significant increase of 3.4 points for the period April-March 2006-07.

The respondents have also expressed confidence that the sector in which they operate and their individual company growth performance would be better as compared to the previous six months.

The EI that reflects the perceptions of Indian industry with regard to performance of their company, sector and the Indian economy for the next six months is up by two points for the period October-March 2006-07.

The non-manufacturing firms came out to be appreciably more bullish about growth prospects compared to the manufacturing firms.

The survey reveals that GDP growth for the year 2006-07 is expected to be in range of 8.5-9 per cent with majority 32 per cent respondents feeling this way.

A growth exceeding 9 per cent is also not a distant possibility according to 22 per cent respondents.

The survey revealed that 85 per cent of the respondents plan to increase investments during October-March 2006-07. Capacity utilisation across the board has increased and 58 per cent of the respondents have expressed confidence that capacity utilisation for October-March 2006-07 will be in the range of 75-100 per cent.

The value of production is also expected to increase in the next six months said 82 per cent of the respondents. In fact, for 79 per cent of the respondents production increased in the first half of 2006-07. Further increase in production is likely because of expected increase in new orders.

The second half of 2006-07 is expected to be better in terms of increase in new orders as 80 per cent of the respondents expected new orders to increase in the next six months, while about 78 per cent of the respondents revealed that new orders had increased in the first half of 2006-07.

Out of the total respondents, 56 per cent expected employment to increase during October-March 2006-07, while 50 per cent of them said that employment had increased during the period April-September 2006-07.

The survey revealed 73 per cent of the respondents expressed confidence in exports expansion for the period October-March 2006-07. During April-March period of 2006, about 67 per cent of the respondents revealed that exports had increased.


----------



## Contrarian

*Public offers to flood market*

NEW DELHI: The public offer market is on a roll in the last three years. If the present boom in the stock market continues, companies are all set to mop up a staggering Rs 45,000 crore from public offers in 2007.

According to Prime Database, offer documents are already filed with the market regulator Sebi, to raise Rs 28,376 crore from the primary market. This is higher than Rs 24,432 crore raised in 2006. And many companies are waiting to enter the market to take the figure at Rs 45,000 crore in 2007, said Prime Database.

However, when large companies are competing against each other to enter the market, first-generation promoters are finding it tough to raise money for greenfield projects. Prime Database said there were hardly any small issues, not only because the market would not support them, but also because investment bankers are not willing to willing to take small assignments. There was no issue of less than Rs 10 crore in 2006, while in 2005 there was only two such issues.

In 2007 so far, 93 companies have filed offer documents to raise Rs 28,376 crore at an average of Rs 305 crore per issue. Out of 93 issues that are planned in 2007, 66 are of Rs 100 crore or below. Compared to this, in 2006, 92 companies raised Rs 24,432 crore at an average size of Rs 266 crore. In 2005, 72 issues hit the market to raise Rs 22,754 crore.

And 2004 was the most successful year considering the capital raising activities, when Rs 30,511 crore was raised by 34 public issues, giving an average of Rs 897 crore per issue. This was mainly because of the mega public issues launched by public sector units like ONGC and GAIL. In 2004, out of Rs 30,511 crore that was raised, Rs 20,218 crore was raised by PSUs.

In 2007, a number of public sector banks, real estate and infrastructure companies would raise money from the capital market. According to Prime Database, major banks that would hit the market include Indian Bank, Bank of India, Canara Bank, Central Bank of India, Corporation Bank, SBI and some of its subsidiaries, UCO Bank, United Bank of India and Vijaya Bank. SBI would raise around Rs 12,000 crore through its follow on public issue. Several private sector banks are also likely to join the bandwagon to raise funds.

A number of real estate companies have already filed offer documents with Sebi. Some of them are DLF, Omaxe, Akruti, Purvankara Projects, The other who would be doning soon are Ansal Properties, Ansal Buildwell, Emaar Properties, G Corp, Taneja Developers and JMD.

Among the infrastructure companies, some of the major companies that are entering the market are Gammon Infrastructure, Jas Toll Road and IVRCL. In the health sector, major IPOs are expected from Fortis Healthcare, Max Healthcare, Serum Institute and Unimark Remedies. Major issues from telecom will come from Idea, Essel Shyam and Spice Telecom.

However, the fate of the primary market, said Prime Database MD Prithvi Haldea, is linked with that of the secondary market. He said the secondary market needs to remain scam-free.


----------



## Contrarian

*Pension funds to go in stocks*

NEW DELHI: The Centre has finally decided to bite the bullet on one big-ticket reforms measure. Buoyed by the support from a majority of state governments, it has decided to release up to 5% of the proceeds of the new pension scheme to be deployed in stockmarkets, defying protests from the Left. The change will be notified soon.

An angry Left fielded West Bengal finance minister Asim Dasgupta to attack the decision.

While the decision itself is significant, the manner in which it was taken brings out the new-found urgency to get started on the reforms front after a long pause forced by Left. The decision came after a meeting of chief ministers with Prime Minister Manmohan Singh on Monday, at which most states, except those ruled by the Left and including those controlled by the common ideological foe, BJP, supported the migration to a contributory pension system. Quite clearly, it was the support from non-Left ruled states which emboldened the Centre, which had so far shied away from a head-on collision with the Left, to go ahead with the plan.

At the meeting, the PM strongly justified the change. He said the new investment pattern would fetch a better return for NPS funds than the 8% interest offered by government at present.

Coming just after finance minister P ChidambaramÃ¢â¬â¢s assurance to the British chancellor of the exchequer to raise the FDI cap in insurance to 49%, the decision to deploy a part, if tiny, of the pension kitty reinforces the belief that the current year may see government stepping on the reforms pedal.

So far, 19 states have joined NPS, leaving only the three Left-governed states and some north-eastern states out of it. Chidambaram said the north-eastern states too have indicated their interest in joining the scheme once the investment architecture is made available to them.

Though isolated, the Left justified its stand to stay away. Dasgupta questioned the twin premises of pension reforms Ã¢â¬â rising pension bill and the pressure it puts on government spending.


----------



## Contrarian

*Companies rush to grab road projects*

NEW DELHI: Will competition in the highway sector ultimately translate into lower user charges? As 2007 begins, private companies are jostling for road projects with renewed gusto. The National Highways Authority of India (NHAI) has been deluged by a staggering 143 pre-qualification (PQ) proposals for just 8 BOT (Toll) projects under NHDP Phase V.

As many as 49 firms (in various combinations) have submitted proposals to expand 1,405 km of identified highway stretches to six lanes. The total value of these projects is approximately Rs 9,133 crore and the entire bidding process is expected to close by the end of March. The Chennai-Tada stretch has attracted maximum attention with 25 proposals, followed by Gurgaon-Jaipur with 21 bids (see Table).

"The robust interest in NHDP V projects is very encouraging," says chairman, NHAI, Pradeep Kumar.

But this is just the start. Between Jan-March 2007, 996 km of projects in NHDP Phase 1 and 111 worth Rs 6,474 crore will be awarded, with bids being invited for 1,225 km worth Rs 7,766 crore in Phase V. Additionally, another 5,506 km of projects worth Rs 35,792 crore in Phases 11, 111 and V will be awarded in 2007-8, generating bids for 9,132 km worth Rs 59,165 crore for 2007-8.

"The ability of the highway sector to generate competition among so many technically competent bidders is a good sign, likely to ensure both better quality roads and reduced user charges," says Umesh Gupta, assistant V-P, Gammon India Ltd. Gammon is a key player in road sector.

Toll rates are fixed at 40 paise/km for passenger vehicles with tolled stretches fetching the government staggering amounts from the private sector by way of negative capital grants. However, NHAI officials rule out any reduction in toll rates on grounds that toll rates are already among the lowest globally.


----------



## Contrarian

*Bengal eyes Rs 12000 cr investment in current fiscal*

KOLKATA: Investment figures for West Bengal have never looked this good in past.

In the first two quarters of 2006-07 Ã¢â¬â between April and September Ã¢â¬â the state has had an investment of Rs 6,000 crore already, raising expectations that it could reach a whopping Rs 12,000 crore this financial year. And that's unprecedented, say officials of the state commerce and industries department, considering that the investment in West Bengal has been on an average of Rs 2,000 crore per year for the last 15 years (considering that the total investment in state from 1990-91 to 2004-05 has been Rs 28,500 crore).

"The reason behind this however, might not be a huge increase in industrial investment after all," say officials. Rather, it all changed when Buddhadeb Bhattacharjee's government took a policy decision to modify the system of calculating investment for the state.

Earlier, investment figures for the state would only include investment in manufacturing industry. "But this was not giving the actual amount of investment, because the state gets a huge amount of investment in infrastructure," said an official. This is when the government took a decision and asked Webcon to compile the investment figures.


----------



## Contrarian

*BSE broker members to sell 51% of their stake*

MUMBAI: Broker-members of the Bombay Stock Exchange have agreed to go for an offer-for-sale to dilute about 51% of their stake in the bourse, in another four months. In MondayÃ¢â¬â¢s general body meeting, attended by about 400 BSE brokers, majority of them agreed to offer a little over 5,000 of their 10,000 shares to institutional investors. Post placement, the BSE will go in for an initial public offer to list its shares on the bourses.

Under the government's de-mutualisation scheme that was approved by BSE, by May 17 broker-members of the exchange are required to dilute at least 51% stake in the exchange. Earlier, it was widely believed that BSE would issue new shares to a clutch of investors to meet the government's guidelines.

"Kotak Mahindra, the present financial advisor to the BSE, will handle the institutional placement process which has to be completed by May 17. About 99% of those who attended MondayÃ¢â¬â¢s AGM agreed to this decision," Mohan Kumar Vijan, chairman, BSE Brokers Forum, said. "Thereafter, between June and September, the BSE will dilute about 10% of its shares through an IPO," Vijan said. Post-IPO, brokers will hold 45% in the exchange.

At present, there are about 700 broker-members with the BSE, each holding 10,000 shares of the bourse in its Rs 70 lakh equity capital. Each broker will surrender at least 5,000 shares for institutional placement. "Members are allowed to surrender their full holding, that is all the 10,000 shares," Vijan said.

As per the governmentÃ¢â¬â¢s FDI policy relating to stock exchanges in India, foreign investors are allowed to hold up to 26% stake. Since the placement will lead to a dilution of 51% stake in the BSE, there has to be substantial participation by domestic institutions as well.


----------



## Contrarian

*Dr Reddy's surpasses $1b mark in revenue*

HYDERABAD: The NYSE-listed Dr ReddyÃ¢â¬â¢s Laboratories has joined the $1-billion revenue club. The company has posted $1.1 billion revenue for the nine months ended December 2006. While the revenue for the period stood at Rs 4,950 crore, it registered Rs 600 crore net profit.

For the quarter ended December 2006, the company's revenues stood at Rs 1,543.4 crore, which is about 160% growth over Rs 592.6 crore revenues in the corresponding period of the previous year. The gross profit for the quarter stood at Rs 674.4 crore, which is an improvement by 124% over corresponding periodÃ¢â¬â¢s Rs 301.6 crore. However, as a percentage of revenues, gross profit component has slipped from 51% to 44%.

The bottomline of the company has improved by about 199%. While the net profit in the Q3 of 2005-06 was at Rs 62.8 crore, it has improved to Rs 187.9 crore in the third quarter of current year.

"The 180-day exclusivity on ondansetron in the US market is very promising. This is one significant opportunities it has gained after fluoxetine in 2001. With in one week after launch of the product, we have captured about 55% of the market," the COO K Satish Reddy said.
--------------------------

Cheers another Indian company crosses the $1B mark!


----------



## Contrarian

*Essar ties up with French firm Arkema*

NEW DELHI: The Ruias-promoted Essar group has tied up with French chemicals company Arkema for a joint venture in India as part of its plans to add value to refinery operations by using product streams Ã¢â¬â other than motor or kitchen fuels Ã¢â¬â to manufacture acrylics.

The MoU has been signed by Essar Chemicals, the Chennai-based group arm that manufactures rubber-based adhesives. The MoU envisages setting up a unit to manufacture and market acrylic acid and esters, used by a wide variety of industries.

The plant is expected to come on stream in 2010. The plant will be set up at Vadinar where Essar Oil started its refinery last year. The chemicals plant will use propylene from the refinery to produce acrylics.

"This unit will be the first acrylic acid plant to be built in India and will serve the fast growing acrylics market in this part of the world. Its location will be ideal to supply both the Indian and the Asian markets," an Essar release quoted Henri Dugert, group president of Arkemas acrylics business unit, as saying.

The release quoted Essar group director Anshuman Ruia as saying his company was "firmly on the path of expanding value chain in all group businesses and entry into this (acrylics) business will further enhance potential of Essar Oils refinery... joining hands with Arkema will provide strategic leverage in Indian chemicals market to both companies."


----------



## Contrarian

*AOL names Indian CEO as global ops head*

NEW DELHI: America Online Limited (AOL) on Monday announced that Maneesh Dhir, who was so far heading its Indian operations, will lead the company's international operations as executive vice-president, reporting directly to AOL President and COO Ron Grant.

In this role, Dhir will oversee the growth of AOL's international portals and review new overseas business opportunities in Europe, Asia and the Americas. He will relocate to AOL's office in London from Bangalore in India where he is currently based.

Dhir has had a long stint at AOL. He has been until now senior vice-president and country manager of AOL's Indian entity where he has led all of the company's operations, including technology development, back-office operations, and even call centre operations.

Prior to that, he served as vice-president and general manager of Netscape in Mountain View, CA. Earlier in his career, he was also on the management team of a start-up that was later bought by Netscape, and has also served in various technology and business roles at technology major Sun Microsystems.

AOL has also announced that Dana Dunne will serve as head of AOL Europe, reporting to Dhir. Dunne has worked in several European countries for most of the past 15 years, most recently as president of Belgacom, a $10 billion telecommunications company in Belgium.

He was also president of US West International, and was one of the leaders of McKinsey & Company's telecom practice, working from London, Brussels and Madrid.

Ã¢â¬ÅAOL is in a terrific position to grow internationally, and with Maneesh and Dana, we have a leadership team that can expand our global presence as an advertising-supported web company," Ron Grant, AOL President and COO, said in a statement.

"I am extremely excited to take up this new responsibility. The experience of setting up and developing businesses in India will no doubt help me as AOL enters new and challenging markets globally" said Dhir.


----------



## Contrarian

*Nimbus gets $125m*

MUMBAI: There's no stopping private equity funds in India. Last week, the country saw its single largest foreign direct investment into real estate when Morgan Stanley invested Rs 675 crore in Oberoi Construction, a Mumbai-based real estate company.

On Sunday evening, private equity investors Ã¢â¬â the US-based 3i, Oman Investment Fund (OIF) and Cisco, a multinational technology company Ã¢â¬â together invested $125 million (Rs 552 crore) in unlisted Nimbus Communications for a 28.5% stake in the company.

Nimbus has interests in media, entertainment and sports. It also holds the International Cricket Council's (ICC) broadcast rights until end-2007.

All the three investors will subscribe to convertible bonds, which will later be converted into equity shares before Nimbus' public offer in 1-3 years.

Harish Thawani, Nimbus' executive chairman, said the money will be utilised to expand the company's international sports business and diversify into football and golf.

A part of the funds will also be utilised to finance Indian language films, international film production and distribution, developing digital content for wireless and IPTV platforms and to expand the company's broadcasting operations.

While Nimbus earns 70% of revenues from cricketÃ¢â¬â-it holds BCCI rights for domestic and international matches played by India between 2006-2010 Ã¢â¬â Thawani said football and golf are the fastest growing sports business in the world and Nimbus wants to tap these.

Industry sources said the company is close to acquiring long term management rights with the European PGA Tour to bring golf into Asia. On the football front, Nimbus may bag one or two European league matches.

For 3i, one of the largest US private equity funds, which manages close to $10 billion globally, this is the second investment in Nimbus.

In 2005, the fund had invested $45 billion for a 33% stake in the company. In the current tranche, it has put in $30 million for 6.5%__a function of the fact that Nimbus' valuation has shot up over the last 18 months.

OIF, promoted by Sultan of Oman, has invested $75 millon for an 18% stake while Cisco got 4% for $20 million. London-based boutique Euromax Capital Partners and Enam were advisors to the transaction.

Nimbus' current revenues stand at $310 million, up from $70 million when 3i first picked a stake in it. Over the last five years, the company has received close to $200 million (Rs 900 crore) in foreign investments.

PE investors eye returns in the region of 20-25% Ã¢â¬â a number Nimbus has delivered on. Cisco's strategy is complimentary to its own line of business.

It has hooked on to Nimbus' digital content model to promote innovative uses of internet and networking technology.


----------



## Contrarian

*Wipro gears up for mega global deals*

BANGALORE: Tech major Wipro seems to have enhanced significantly its delivery capabilities through its series of acquisitions, building multiple domain expertise and readying a bouquet of service offerings.

The company says it is now ready to venture into deep waters to contest for mega deals, in the range of $250 to $500 million, with top global players like IBM, Accenture and EDS.

Suresh Vasvani, president, Wipro Infotech, told The Times of India, "All the investments we have done so far towards enhancing our service lines have started yielding results. This has given us immense strategic edge. As a result, we currently have a pipeline of several $100 million deals and many mega deals of international size. We started experiencing this trend in the domestic market a couple of quarters ago by winning work orders from HDFC and Dena Bank worth $80 mn and $70 mn respectively. Most of these mega deals are going to be in the areas of offshoring, infrastructure management and business process outsourcing."

Wipro's integrated services approach seems to have worked well for it. It has brought all its services __ consulting, infrastructure management, software applications, systems integration, data centre, BPO services and PC business Ã¢â¬â under a single package. "Customers are looking at companies that can provide integrated services. Total outsourcing proposition strategy has been effective in the last six quarters,"he said.

Wipro has strengthened its consulting business that has 250 vertical-specific consultants who evaluate clients' businesses, and suggest strategies for profitability and cost reduction.


----------



## Neo

Tuesday, January 23, 2007 

*Can India sustain its rapid economic growth?* 

MUMBAI: More than a decade of reform has shifted IndiaÃ¢â¬â¢s long-term economic growth rate to a higher level. 

With that, analysts agree. Where they disagree, is in deciding what that higher rate is. Over the last three years, growth has averaged about 8 percent and the government is shooting for an average of 9 percent over the next five years. 

ThatÃ¢â¬â¢s a big jump from trend growth of about 6 percent in the two prior decades and would move the economyÃ¢â¬â¢s momentum closer to neighbouring China, which is sustaining growth of about 10 percent. 

While the central bank is not sure if 9 percent growth is so rapid the economy will overheat, analysts are convinced trend growth has shifted to a higher gear, leaving debate to dwell on what growth rate is sustainable. Goldman Sachs analyst Tushar Poddar reckons trend growth is now 8 percent, driven by productivity gains. 

Other analysts say it is closer to 6.5 percent, as a lack of infrastructure and skilled workers will eventually limit the economyÃ¢â¬â¢s ability to expand. 

Ã¢â¬ÅIn our view, overheating concerns are overdone,Ã¢â¬Â Poddar said. Ã¢â¬ÅDemand pressures are well-contained and high credit growth is due to financial deepening.Ã¢â¬Â 

Since 1991, India has gradually opened its economy to more competition and encouraged freer international trade. 

Signs of its rapid growth are visible on IndiaÃ¢â¬â¢s streets from new cars to new houses. Airport lounges teem with a new middle class and mobile phones are ubiquitous in cities. In the April-September half of the 2006/2007 fiscal year, annual economic growth was running at 9.1 percent, backed by 30 percent annual growth in credit. NovemberÃ¢â¬â¢s industrial output grew at its fastest annual pace in more than a decade, suggesting the economy maintained its brisk growth rate in the latest quarter. 

N Vaghul, chairman of ICICI Bank, IndiaÃ¢â¬â¢s second-largest bank, said changes in manufacturing have helped economic growth pick up the pace. 

In particular, Indian companies do not find funding expansion to meet increased demand a big problem because they are far less leveraged now than a decade back, he said. Ã¢â¬ÅThere is a fundamental shift due to lessons learnt by corporates (in the mid-1990s) because they paid a very high price for over leveraging,Ã¢â¬Â he said at a recent graduation ceremony. 

Manufacturers, particularly in auto components, textiles and pharmaceuticals, have gained considerable expertise in the past decade, analysts said. Policy makers say the economy has shown resilience in the face of consistently high global oil prices, an optimism reflected in stock prices, which hit a fresh record high last week. 

The central bankÃ¢â¬â¢s deputy governor, Rakesh Mohan, said the growth trend of the past few years indicated the economy had entered a new phase of stronger expansion. Ã¢â¬ÅMost importantly, the current growth process is not a flash in the pan and is exhibiting signs of sustainability along with financial stability, notwithstanding the pressures from unforeseen external shocks,Ã¢â¬Â Mohan said. 

Capacity constraints: Not everyone is so bullish. Inflation is running at above 6 percent, higher than the central bank would like, so some analysts believe the authority could tug harder on the monetary policy reins when it reviews policy on Jan 31. 

Vice president of MoodyÃ¢â¬â¢s Investors Service, Kristin Lindow, and HSBCÃ¢â¬â¢s Robert Prior-Wandesforde say IndiaÃ¢â¬â¢s sustainable growth rate is more like 6.5 percent. Prior-Wandesforde cited a lack of skilled labour and record-high capacity utilisation in the economy as the main limiting factors. 

Ã¢â¬ÅIndia cannot continue at 9 percent-plus growth momentum as capacity bottlenecks may prove a constraining factor,Ã¢â¬Â Lindow said. To maintain its current rate of expansion, the economy needs to overcome several problems, said Julian Jessop, chief international economist at London-based research consultancy Capital Economics Ltd. Apart from upgrading infrastructure and improving public finances, it should relax labour market laws and restrictions on foreign investment to boost manufacturing still further, he said. Industry accounts for about a quarter of IndiaÃ¢â¬â¢s GDP. 

Indian Prime Minister Manmohan Singh has acknowledged that poor roads, rail, ports and insufficient power supply were holding the economy back. 

India has said it needs $1.5 trillion in investment in the next 5 years to improve infrastructure and raise manufacturing and farm output. But ICICIÃ¢â¬â¢s Vaghul said he was now less worried about problems such as weak infrastructure and more concerned about a shortage of skilled labour, which was sending wages spiralling. Ã¢â¬ÅShortage of human resources has created a serious situation in the country and we are not recognising it,Ã¢â¬Â he said. 

Ã¢â¬ÅThe major threat for growth is going to come from shortage of human resources.Ã¢â¬Â Prior-Wandesforde said the economy would continue to grow above trend of 6.5 percent for now as there were no triggers for an immediate, sharp slowdown. Ã¢â¬ÅThe longer this goes on, however, the bigger will be the ultimate downturn,Ã¢â¬Â he said.

http://www.dailytimes.com.pk/default.asp?page=2007\01\23\story_23-1-2007_pg5_27


----------



## Neo

Tuesday, January 23, 2007 

*CBOT eyeing IndiaÃ¢â¬â¢s growing commodities trade*

NEW DELHI: The US-based Chicago Board of Trade (CBOT) plans to enter IndiaÃ¢â¬â¢s booming commodity derivatives market as it believes the country will soon ease rules governing trading and foreign investment, a board official said on Monday. 

Ã¢â¬ÅEasing of rules is just a matter of time. The current rules in India may be a little more stringent, but as governments see the benefits of futures industry, they will tend to open up,Ã¢â¬Â Richard A. Jelinek, a board director, told Reuters. 

IndiaÃ¢â¬â¢s commodity market regulator currently does not allow banks and financial institutions, either domestic or foreign, to trade in commodity markets. But a bill to permit foreign players to take part in commodity futures and buy stakes in Indian exchanges should come before IndiaÃ¢â¬â¢s parliament in the session beginning next month. 

Jelinek said IndiaÃ¢â¬â¢s booming economy would attract more investment if access to the commodities market was opened up. 

Ã¢â¬ÅFree and open access is a very important aspect of the futures industry. We are interested in Indian markets and we have very good relations with Indian exchanges,Ã¢â¬Â Jelinek said. India only allowed trading in commodity futures in 2002. Three exchanges Ã¢â¬â the National Commodity and Derivatives Exchange, Multi Commodity Exchange, and the National Multi Commodity Exchange Ã¢â¬â were set up in 2003. 

According to the Forward Markets Commission, the commodity market regulator, commodities worth 27.4 trillion rupees ($619.8 billion) were traded between April and December 2006 against 14.08 trillion rupees ($318.5 billion) the year before. 

Ã¢â¬ÅIndia continues to grow in terms of agricultural markets and precious metal markets and it is good business practice for the Board of Trade to reach out to our customers in India,Ã¢â¬Â Jelinek said. 

The Chicago board, awaiting U.S. government approval to merge with the Chicago Mercantile Exchange, also plans to launch a slew of contracts to capitalise on investorsÃ¢â¬â¢ growing appetite. Contracts in South American soy products, Black Sea wheat, and distillers dried grains, a feedstock substitute which is a byproduct of ethanol production, were being considered. The exchange would increasingly focus on the energy sector, especially biofuel, Jelinek said.

http://www.dailytimes.com.pk/default.asp?page=2007\01\23\story_23-1-2007_pg5_35


----------



## Contrarian

*SBI Q3 net dips 4.5% to Rs 1,065 crore*

MUMBAI: State Bank of India, India's largest lender, missed market forecasts with a 4.5% fall in quarterly earnings, knocking its shares down, hit by a sharp rise in provisions for bad loans.

SBI more than doubled its provisions for contingencies and bad loans in the December quarter, but banks, seen as a proxy for growth in an economy expanding at more than 8% a year, are set for strong earnings in the March quarter.

"It's because of extraordinary items last year," said Kush Joshi, analyst at Indsec Securities. "Stripping one-off items, it is a net profit of more than Rs 1,100 crore, versus a loss of about Rs 620 crore."

The government-run bank earned a net profit of Rs 1,065 crore ($241 million) for the fiscal third quarter ended December 31, down from Rs 1,115 crore ayear earlier when it had some tax payments refunded to it and made currency gains.

A Reuters poll had forecast net profit of Rs 1,187 crore.

Demand for loans from firms to expand capacity and individuals to buy homes and cars is expanding at about 30% a year, even after the central bank raised lending rates by 100 basis points in 2006.

The central bank is expected to raise rates again at a review on January 31 to rein in inflation, which is running at two-year highs, but this is seen as unlikely to severely dent loan growth.

SBI shares were down 4.1% at Rs 1,174.40, after falling as much as 4.5%, in a Mumbai market.


----------



## Contrarian

*Deora for diesel excise cut to stem inflation*

NEW DELHI: Oil minister Murli Deora on Tuesday put forth to FM P Chidambaram a duty recast package in his Budget wishlist, which, if included in the final document, will save consumers of petroproducts a big pinch in case international oil prices head north in future.

Deora suggested a gradual removal of excise duty on diesel as a "measure to check runaway inflation", starting with a Re 1 reduction. The other suggestions revolve around the idea of scrapping/reducing levy on crude or setting them at flat rates rather than a mix of specific and ad-valorem duties. Among the options are scrapping import duty on crude or halving it to 2.5% from 5% at present. On petrol and diesel, the preference is to cut customs to 2.5% from 7.5% now.

As a second option, duty could be lowered to 5%. On jet fuel too, the duty is suggested to be halved to 5% from 10%, or at least reduced to 7.5%. Similar cuts have been suggested for other industrial petroproducts, while kerosene and cooking gas do not attract any customs.

The real play of the strategy, however, is in the suggestions for an excise tweak. Deora wants excise on petrol at a flat rate of Rs 15.92 a litre instead of a mix of 8.16% plus Rs 13.26 per litre. As a second option, it wants a flat rate of Rs 15.44/litre. On diesel, the suggestion is for a flat rate of Rs 6.08/litre instead of a mix of 8.16% plus Rs 3.32/litre. The second option is to set the rate at a flat Rs 5.56/litre. Similar structures have been suggested for other industrial petroproducts.

If the duty revamp proposal is taken as a whole, the current retail prices will not change. But if international crude rises to, say, alarming levels of $70 a barrel in future, the impact on consumers will be miniscule.

Oil ministry calculations show at current crude prices, the government will gain Rs 10,872 crore if the first option is accepted. If the choice is on second option, the gain will be Rs 5,780 crore. The second option is based on the assumption that excise on petrol and diesel will be raised to offset the gain for companies from customs reduction
http://timesofindia.indiatimes.com/...cut_to_stem_inflation/articleshow/1411386.cms


----------



## Contrarian

*Global calls via Net at 95 paise/min*

NEW DELHI: World Phone Internet Services Pvt Ltd, a category 'A' internet service provider (ISP) is introducing international calls at a new low of just 95 paise a minute.

Consumers can call over 30 countries at this rate, including US, Canada, France, Germany, Hong Kong, Italy, Singapore and Switzerland. In comparison, leading ISP's offer international calls at over Rs 2/minute.

According to Aditya Ahluwalia, chairman, World Phone, "We aim to make superior quality international voice calls affordable for every Indian consumer and assist the government in curbing the rapid proliferation of illegal internet telephony service providers". Currently, World Phone negotiates over 10 million international call minutes through its internet telephony network every month.

World Phone's pre-paid internet telephony cards are available in denominations of Rs 100, Rs 250, Rs 500, Rs 1,000 with a 100-day validity. They can be purchased by logging on to World Phone's website www.worldphone.in or through the company's network.
http://timesofindia.indiatimes.com/...ia_Net_at_95_paisemin/articleshow/1411358.cms


----------



## Contrarian

*Your roaming bill set to go down 10%*

NEW DELHI: Here is some news to warm your heart. The Trai is set to announce a substantial cut in roaming tariffs on Wednesday, with consumers likely to see their roaming bills reduced by about 10%. According to sources, the Trai is still working on the fineprint of tomorrow's directive, which has been bitterly opposed by cellular operators.

Trai wants to do away with the Rs 50 rental and 15% surcharge in addition to a pruning of airtime charges which are currently much higher than local mobile call charges.

Trai sources confirm only two things: that rental charges will go, and that the Authority is excercising forbearance on SMS charges.

However, the final maths on the surcharge and roaming call charges is still being worked out at the time this report was being filed. Following Wednesday's announcement, the new rates are likely to become effective from 1st April or perhaps even earlier.

Trai's move to reduce roaming tariffs for consumers by aligning them closer to costs has mobile operators fuming. But the good news is that unlike previous occasions, this time, they may be unable to take legal recourse.

Cellular operators admit they are not in a position to appeal against Trai's tariff order in Telecom Dispute Settlement and Appellate Tribunal (TDSAT) as TDSAT is unlikely to rule against a pro-consumer order. Especially as the basis of such an Order is cost data submitted by the operators themselves.

Telecom service providers case is further weakened by the fact that the Order is also consistent with Trai's interconnection regulation, which seeks cost-based, non-discriminatory interconnection between operators.

CDMA operators are even less likely to have a reason for appeal since their consumers roam only on their networks, unlike GSM subscribers who may sometimes roam on rival operators networks.

However, operators argue that Trai's intervention is unjustified as only a niche segment that can afford to pay a premium uses roaming. Trai, on the other hand, considers 1.5 crore consumers large enough to justify a reduction in roaming tariffs.
http://timesofindia.indiatimes.com/...ill_set_to_go_down_10/articleshow/1411355.cms


----------



## Contrarian

*Public offers may attract service tax*

MUMBAI: The finance ministry is set to reap the benefits of the boom in the primary stock market. As companies queue up with their maiden and follow-on offerings, the ministry is preparing to bring listing of stocks on equity and commodity markets under the service tax net.

Sources told TOI that the proposal mooted by the Directorate General of Central Excise Intelligence (DGCEI) is likely to find its way in the forthcoming union budget for 2007-08, scheduled for February 28. In case the proposal becomes a law, fees for all listings will attract a service tax at the rate of 12.5%.

"Unlike registration fees charged by the Registrar of Companies, the listing fee paid to the stock exchanges is not a statutory payment. Listing of securities can be construed as a service rendered by the stock exchanges and, hence, taxed," said Sachin Menon, partner and head of indirect taxes, RSM & Co.

Already some components in the initial public offerings (IPO) process like the underwriters' fee and the advertising & printing services have come under the service tax net. However, other expenses like lawyers' fee and even the nominal fee paid to the market regulator Ã¢â¬â Securities and Exchange Board of India__for clearing the IPO are still out of service tax net.

Currently, fees for listing on the exchanges are directly proportional to a company's equity capital. For example, the fee for initial listing on the BSE is Rs 20,000 and thereafter, annual listing fee of Rs 10,000 is charged for companies with a paid-up capital of upto Rs 5 crore.

During financial year 2005-06, Bombay Stock Exchange (BSE) had collected about Rs 16.3 crore as listing fee while for the National Stock Exchange (NSE) the corresponding figure was Rs 8.44 crore. In addition, the bourses had also collected book building fees. While NSE collected Rs 9.72 crore for facilitating book building process during public offers and de-listings, BSE had collected about Rs 6.14 crore. Fees for the two bourses, under all these heads, add up to Rs 40.7 crore.

These fees are expected show a much higher figure at the end of the current financial year. For one, during the current financial year about 50 public offers have been completed, and over 30 are expected to hit the market before the end of the year. This compares favourably with about 70 issues during financial year 2005-06. These listings will also push up the book building fees for the current year substantially.

In addition, companies with large equity base have to fork out higher listing fees. Reliance Petroleum and Cairn India are two such companies each with a large equity base and were listed in financial year 2006-07. Real estate major DLF is another company which has a huge equity base and is waiting to complete its IPO process to get listed on the Bombay Stock Exchange and the National Stock Exchange in a few months. These listings are also expected to lead to higher listing and book building fees for the two exchanges.

In calendar year 2007 alone, public offers worth Rs 45,000 crore are set to hit the market if the current market boom, according to a recent study. Offer documents to raise Rs 28,376 crore have been filed with Sebi. Companies raised Rs 24,432 crore through public offers in 2006.

Even some more aspects of the IPO business can be brought under the tax net, experts suggest. For instance, when an IPO is over-subscribed, the companies park the excess funds with a bank which pays a 6-7% interest as a 'fee' to the company. "This interest or fee paid by the bank may also be brought under the service tax net," sources said.
http://timesofindia.indiatimes.com/...y_attract_service_tax/articleshow/1411304.cms


----------



## Contrarian

*Champagne Indage set to buy Australian wine firm*

MUMBAI: After Vijay Mallya's UB group acquired French wine-maker Bouvet-Ladubay for nearly $18 million, home-grown wine-maker Champagne Indage is following suit. India's leading wine-producer is acquiring Australian wine company Tandou Wines for an undisclosed amount, a source told TOI.

Tandou is the seventh largest wine producer in Australia with a capacity of three million cases per annum and sell Broken Earth and Wontanella brands. Champagne Indage, the acquirer, has a winery in Narayangaon, near Nashik with a capacity of one million cases per year. Post acquisition, Champagne Indage's capacity will go up by 400%.

In Monday's lacklustre market, Champagne Indage stock closed marginal 0.5% higher at Rs 658 on the Bombay Stock Exchange. Volume in the counter was also thin.

Of late wine has become popular in India, especially among the upper class. And one of the main objectives for the UB group to acquire the wine division of the French company was to make use of this changing trend to its advantage by offering Bouvet to the Indian wine consumers. The other objective was to get access to wine-making technology of the highest order.
http://timesofindia.indiatimes.com/..._Australian_wine_firm/articleshow/1411280.cms


----------



## Contrarian

*Three players in race for Hutch*

MUMBAI: Hutchison Telecom International has said that the race to acquire its 67% equity stake in Mumbai cellular phone operator Hutchison Essar has narrowed down to three bidders Ã¢â¬â Vodafone, Reliance Communications and Hindujas.

Hutchison conveyed the field details to the Hindujas, who wanted to know if the whole company was on sale or only Hutchison's 67%.

The Hindujas also sought clarity on the term sheet with the Ruias and the status of the current management led by Asim Ghosh after the sale takes place, sources familiar with the development said.

The Hong Kong firm has indicated to one of the bidders, who had put in a non-binding bid last week, that they concerned only about their 67% that is on the block and the Ruias can either bid or utilise the 'tag-along clause' to sell their stake.

Tag-along, a common clause included in joint venture pacts, means the Ruias can go along with Hutchison and sell their stake to the buyer at the same price. Hutchison, which has said that it would sell its stake to the highest bidder, is understood to have requested the Hindujas to retain the management if they win the deal.

UK telecom giant Vodafone and the London-based Hinduja group had put in non-binding bids last week. An industry source said that Anil Ambani's Reliance Communications has also made a pitch, but a source at the company denied it.
The Essar group too says that it is in the race.

"Why should we do a due diligence if we are not interested in putting a bid," a company official said. A group spokesperson said: "We had done a due diligence."

Meanwhile, Hutchison Telecom International Ltd (HTIL) has convened a board meeting on January 29. The agenda of the meet could not be ascertained. A source said the management might brief the board about the latest on the tender.
There is speculation in banking circles that Vodafone has bid $16.5 billion and the Hindujas $17 billion for the 67% ownership in Hutch-Essar. The Hindujas have shown their commitment by submitting bankers' comfort letters to the Hutchison team.

Industry sources familiar with the development said Hindujas will begin their due diligence on February 5 along with their private equity and financial investors. One of the names being talked about is a private equity fund from West Asia.

Sources said the automobile-to-media group is not averse to joining hands with rivals Ã¢â¬â Vodafone, the Ruias or Reliance Communication Ã¢â¬â to run the company. When contatced, a Hinduja spokesperson declined to comment.
http://timesofindia.indiatimes.com/...ers_in_race_for_Hutch/articleshow/1410981.cms


----------



## Contrarian

*Currency gains lift Tata Motors Q3 profit*

MUMBAI: Tata Motors Ltd., on Tuesday said its quarterly net profit rose a larger-than-expected 12 per cent, helped by currency gains.

The New York-listed company, which increased its market share in commercial vehicles to near 65 per cent from 60 percent a year earlier, improved operating margins to 13.7 per cent from 12.3 per cent a year ago, a company official said.

"Despite an increase in raw material cost, we've had a good quarter at the operating level with a significant improvement in market share for commercial vehicles," finance director Praveen Kadle told reporters.

"Our cost reduction drive continues," he said.

Tata Motors said its net profit rose to 5.13 billion rupees ($116 million) in the fiscal third quarter to December from 4.6 billion reported a year ago.

Net sales surged 37 per cent to 69.57 billion rupees from 50.75 billion a year earlier.

Tata Motors had currency gains of 1.32 billion rupees in the quarter compared with a loss of 432.7 million rupees a year earlier.

The company, which is also India's third-biggest car maker after Maruti Udyog Ltd. and South Korea's Hyundai Motor Co., said its raw material costs rose 36 per cent.

Tata Motors, valued at $8.2 billion, sold 141,623 vehicles during the December quarter, up 27 per cent from a year ago.

It is investing 120 billion rupees over four years to expand capacity and has started construction of a plant in West Bengal state to make a long-planned cheap small car.

Tata Motors formed a joint venture with Italy's Fiat last July in which it has said it would invest more than $877 million to make cars and engines from 2008, and may also make trucks.

The joint venture would make more than 100,000 cars and 200,000 engines and transmissions from the beginning of 2008.

The two firms are also discussing industrial and commercial cooperation in Latin America. Fiat has said it would make Tata Motors' new 1-tonne pick-up truck in Argentina for Latin America and overseas from the second half of fiscal 2008.

In December, Tata Motors took a 70 per cent stake in a joint venture with Thailand's Thonburi to make pick-up trucks.

While improving infrastructure in India has increased demand for trucks and buses, analysts have criticised Tata Motors' product mix, which favours lower-margin light trucks. Firming interest rates and inflationary pressure may also dampen demand.

Ahead of the result, shares in Tata Motors fell 1.5 percent to 950.05 rupees in a Mumbai market that fell 1.2 per cent.

The stock had risen 4 per cent during the December quarter, beating a 2.8 per cent gain for the sector index but trailing a 10.7 per cent rise on the benchmark BSE.
http://timesofindia.indiatimes.com/...Tata_Motors_Q3_profit/articleshow/1409120.cms


----------



## Contrarian

*Jet starts daily flights to Bangkok*

NEW DELHI: Jet Airways, one of India's largest private airlines, on Tuesday launched two new international flights linking Delhi and Kolkata to Bangkok.

"Bangkok is the 50th destination on our network and our third destination within the ASEAN region," Wolfgang Prock-Schauer, chief executive officer, Jet Airways, said after the arrival of a Jet flight in Bangkok from Delhi on Tuesday.

"The strengthening of economic ties between the two nations will see a marked increase in both business and tourist traffic and hence this is our effort to provide travellers with convenient connections," he added.

"The 14 daily direct flights between India and Thailand will be operated with the new generation Boeing 737-800 aircraft with winglets," an official spokesperson of Jet Airways said here.

As part of its inaugural offer, Jet Airways has introduced a special return economy class inaugural airfare starting at Rs.6,500 on the Kolkata-Bangkok-Kolkata sector, while economy fares start at Rs.13,500 on the Delhi-Bangkok-Delhi sector. The fares are exclusive of taxes.

The return airfare for club premiere for the Delhi-Bangkok sector ranges from Rs.28,500 to Rs.38,000 while on the Kolkata-Bangkok sector it is between Rs.18,500 and Rs.26,000.

Jet Airways has also announced a companion free offer for club premiere passengers on the Delhi-Bangkok-Delhi sector until March 31, 2007. The 'club premiere' tickets must be purchased by Feb 15 for travel until March 31, 2007, an official spokesperson for the airlines said.

Jet Airways operates over 330 daily flights to 50 places covering various destinations in India. It also operates flights to outside India, including London, Singapore, Kuala Lumpur, Colombo, Bangkok and Kathmandu.

The airline plans to extend its international operations to North America, Europe, Africa and Asia in the coming years with the induction of wide-body aircraft into its fleet in 2007.
http://timesofindia.indiatimes.com/...ly_flights_to_Bangkok/articleshow/1408069.cms


----------



## Contrarian

*Bear clutch: Sensex closes 168 pts down at 14,041*

The market continued its sourthward journey on Tuesday as the bears strengthened their clutch over the bourses. The breadth was very negative with more than 700 stocks trading down and only 200 stocks in the positive. All 50 stocks on the Nifty were in the red.

The opening was well below break-even and each successive trading hour saw the indices make further inroads into the red. Mixed results announced by India Inc. seemed to have taken its toll on the indices.

The overall market breadth was negative with losers outnumbering gainers by a ratio of 9 to 1 on the Sensex. While ACC, Gujarat Ambuja both down 7 per cent and Dr.Reddy's 5 per cent led the pack of losers on the Sensex on Tuesday, Bharti Airtel up 2 per cent and Hindalco was up marginally.


Selling continued unabated across index heavyweights causing the indices to close well below Monday's levels. While selling was seen across-the-board, select stocks in the telecom, power and energy sectors garnered investor interest. As regards global markets, while Asian indices closed a mixed bag, the European indices are also witnessing a mixed trend currently.

The BSE Sensex closed at 14,041 down 168 points. Nifty closed at 4,066 down 37 points.

Telecom stocks closed mixed on MOnday. While Bharti Airtel stock was up 2 per cent on the back of impressive performance in Q3. MTNL was also another stock that traded marginally up. Reliance Communication was down 1 per cent.

Pharma stocks closed in the red on Tuesday and the key losers were Glenmark down 6 per cent and Dr.Reddy's down 5 per cent. The latter closed weak despite strong results.

Almost all cement stocks were down on the back of government announcement on excise duty cuts. This announcement would impact the cement companies in so far as it will make the imports cheap. However, all media stocks closed a mixed bag. While Zee Entertainment up 5 per cent, Wire & Wireless 3 per cent and TV18 2 per cent. NDTV was down 4 per cent and Balaji Telefilms also closed weak down 3 per cent.


----------



## Contrarian

*Bharti net surges 123% on subscriber growth*

NEW DELHI: The country's leading private cellular operator Bharti Airtel on Tuesday surpassed market expectations by reporting a 123% growth in quarterly net profit. Net profit was Rs 1,215 crore for the quarter ending December 31 2006. Total revenues were at Rs 4,913 crore, up 62% over the corresponding period last year.

Airtel added 50.19 lakh customers in the third quarter, with a total customer base of 3.37 crore till December 31, 2006, a 92% increase over the same quarter last year. The company's market share has also gone up with its subscriber base 21.8% higher than before.

Its average revenue per user (Arpu) fell to Rs 427 in December from Rs 438 in September, but minutes of usage surged to 467 from 451. Chairman Sunil Mittal said demand for telecom services continued to be strong, helped by a buoyant economy. "In particular, the wireless segment has seen record additions and we believe this trend is likely to continue," he said.

According to Akhil Gupta, joint MD & CFO, growth was unlikely to slow down as market growth of 7 million new subscribers a month is sustainable. "Our preliminary estimate for capex is $2.5 billion for the next fiscal," he added.

With a view to enhancing operational efficiencies, Bharti Airtel's board of directors approved the transfer of the towers for mobile communications and related passive infrastructure into a wholly-owned subsidiary Ã¢â¬â Bharti Infratel Ltd.

It also approved the acquisition of a submarine network cable system from Network i2i through the purchase of all assets or equity for $110 million, subject to obtaining requisite approvals. Network i2i is jointly owned by Singtel and a Bharti group company.

Bharti intends to launch DTH services to address the fast-growing home entertainment segment through its wholly owned subsidiary Ã¢â¬â Bharti Telemedia Ltd. Singapore Telecommunications Ltd owns 30.8% in Bharti, while Britain's Vodafone holds a 10% stake. Directors of Vodafone did not attend the Bharti Board meet on Tuesday, in view of its interest in acquiring rival Hutch-Essar.
http://timesofindia.indiatimes.com/..._on_subscriber_growth/articleshow/1411321.cms


----------



## Contrarian

*IT exports to touch $31b in '06-07, says Nasscom*

MUMBAI: The software and services exports sector is all set to scale new heights with revenues exceeding $31 billion in the current fiscal said Nasscom. According to its yearly Strategic Review report, India is on track to double that figure by 2010.

In the last decade the Indian information technology industry has grown its revenues ten-fold, from $4.8 billion 1997-98 to $47.8 billion in 2006-07, the report noted.

This pegs the estimated contribution of the industry to GDP to about 5.4%, which has grown from 1.2%since 1998. The similar trend continues in the domestic market too said the report, this year the revenue is pegged at USD 15.9 billon which is a growth of a good 21% from last year.

"The last decade is testament to the growing impact that the Indian IT industry is having on the global and local economies," said Nasscom chairman, B. Ramalinga Raju.

The top sectors still remain BFSI, Telecom and Hi-Tech, which continue to bring in about 60% revenue of the pie. But other verticals such manufacturing, retail, transportation, healthcare and utilities are also growing rapidly, said the report. The sector would employ 1.6 million people March-end.
http://timesofindia.indiatimes.com/...D31b_in_06-07_Nasscom/articleshow/1411296.cms


----------



## Bull

India could overtake Britain and have the world's fifth largest economy within a decade as the country's growth accelerates, a new report says. 

If trends continue, India's economy may then surpass the US and be second only to China's by mid-century, the report by investment bank Goldman Sachs says. 

The report says India's programme of reforms has brought increased competition and efficiency. 

But there will be a heavy cost as India demands more and more energy. 

Everywhere you turn in India's cities are signs of economic boom. 

New cars choking the streets, middle-class housing and shopping malls swallowing up farmland, airports chock-a-block with travellers. 

But this is probably only the start of a transformation that will reshape the global economy. 

Within a decade India can overtake Italy, France and the UK to become the world's fifth largest economy if it keeps up it's current pace of expansion, according to analysts at Goldman Sachs. 

India has shifted into a higher gear, they believe, because a decade of reforms have opened the country to greater competition, and spurred industries to become more efficient. 

By 2050 India's economy could be larger even than America's, only China's will be bigger, the bank predicts. 

The result will be huge demand from this new giant. 

Within 15 years Indians should, on average, be four times richer than today, buying five times as many cars, and the country will burn three times as much crude oil to power its growth, putting yet more strain on the world's resources. 

But India could also be held back. 

The country's poor infrastructure is already struggling to keep up with growth, power cuts are common as there isn't enough electricity to meet current demand, ports are overflowing, many roads pot-holed and crumbling. 

And a shortage of skilled workers may undermine the future expansion of India's much-vaunted IT industry. 

However, other nations are increasingly waking up to the potentially vast market India holds. Last month the largest-ever American trade delegation to India spent two weeks searching out opportunities. 

They were followed by a British group 150-strong led by the finance minister, Gordon Brown. 

And the Russian President, Vladimir Putin, is to visit this week where he is pressing for major contracts providing nuclear power and defence equipment. 


http://news.bbc.co.uk/2/hi/south_asia/6294409.stm


----------



## Neo

Jan 25 2007 
*Russia, India to set up titanium joint venture*

DELHI. Jan 25 (Interfax) - Russia's Vneshtorgbank and Tekhnosim- Holding and India's Saraf Agencies Private Ltd have signed a trilateral cooperation agreement as part of a visit to India by Russian President Vladimir Putin on Thursday. 

"The aim of this agreement is to establish strategic partnership and develop long-term, effective and mutually profitable cooperation in connection with the development of a mechanism for projects being implemented on Indian territory within the framework of setting up a Russian-Indian joint venture," Vneshtorgbank said in a press release. 

http://www.interfax.ru/e/B/0/28.html?menu=1&id_issue=11665771


----------



## Contrarian

*UBS buys StanC Mutual Fund*

MUMBAI: It's final. After months of speculation that had thrown up a slew of possible suitors, Swiss banking giant UBS will buy Standard Chartered Mutual Fund. The European bank, best known for its expertise in managing private wealth in true Swiss banking tradition of extreme secrecy, will pay around Rs 600 crore to buy out the fund house, industry sources said.

The deal, which was finalised in London recently, is somewhat different from the recent acquisition deals in the Indian mutual fund industry. Over the last few years, most of the acquisitions were buyouts of only the assets of the fund house and not the whole mutual fund. But in the UBS-StanC MF case, the Swiss bank is buying out the entire equity in the fund house.

UBS will pay about Rs 530 crore to the promoters of the fund house, while it would also assume a liability of Rs 60 crore, at present in the books of StanC MF, sources said. Aviva, another European financial giant, was also in the race for StanC MF but had backed out, refusing to assume the liability of the fund house.

As of January end, StanC MF's assets under management were about Rs 12,628 crore. So at the current valuation of about Rs 600 crore, the price works out to about 5% of AUM. Going by industry standards, the price was a little on the higher side, industry players said.

Usually, equity fund AUMs fetch a higher price, about 2.5-3% of the AUM while debt funds are priced at about 1.5% of the AUM. Liquid and money market funds are priced lower than 1% of the AUM.

Since its inception in 2000, StanC MF was a pure-play debt fund house. It was only in 2005, that the fund house launched its first equity fund, Classic Equity Fund. Since then it has added about four pure equity schemes and an equity arbitrage fund.

For UBS, the entry into the fast growing Indian fund industry is a huge step forward. For a long time the Swiss banking giant has been trying to enter the country's banking industry but is yet to get a license from the RBI.


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## Contrarian

*Higher tax burden on shipping cos*

MUMBAI: Even as the Indian shipping industry fights tooth and nail to shake off the burden of 12 different taxes, another liability just knocked at its door.

The income tax department is asking companies in the business to shell out 22.5% as TDS (tax deducted at source) on income earned by giving ships out on rent. In shipping parlance, it is called 'charter hire'.

If the department has its way, the Rs 11,000 crore industry will end up with a tax burden that runs into a few hundred crores.

Clearly, people who run the business aren't happy. "This twist will destroy the industry,"said an industry source.

From the tax department's perspective, they have simply put ships on par with 'plant and machinery' given out on rent. Hence, they argue, income earned ought to be taxed at source at 20%. Add cess and surcharges to it and the number shoots up to 22.5%.

The tax department has already turned the heat on companies like Varun Shipping, Mercator Lines and UltraTech. Unlike other kinds of tax payments, the onus of collecting TDS is on the user of the service.

So, UltraTech has already started deducting taxes on the charter hire it pays two companiesÃ¢â¬âK C Maritime and Bulktainer Shipping.

Sources told TOI that notices have also been issued to oil majors like ONGC and Cairn Energy which hire ships or different offshore vessels for their exploration works.

"The highly capital intensive (shipping) industry's net profit is not even 20% of their total income,"said an official.

"The shipping industry has reached a stage where more than looking at the business opportunities, we look at the tax incidence for each and every little transaction. If all the government departments behave in the similar way, shipping in India will not be viable any longer,"said the head of a shipping company.


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## Contrarian

*Iron ore row may hit CSN's Corus bid*

MUMBAI: Even as the battle for Anglo-Dutch steel maker Corus reaches a crescendo, reservations are being expressed about the Brazilian Companhia Siderurgica Nacional's (CSN) ability to supply iron-ore, a key component of the deal.

This is being viewed as a shot in the arm for Tata Steel, the other bidder in the ring for Corus.

Earlier on Thursday, Financial Times, a British newspaper reported that Brazilian mining group Companhia Vale do Rio Doce (CVRD) has challenged CSN's ability to supply iron ore to Corus, which may potentially harm CSN's bid for the Anglo-Dutch steelmaker.

Jose Martins, director for ferrous operations of CVRD, told the newspaper that the company would question CSN's ability to ship iron ore under the terms of a 2001 contract signed between the firms.

"If CSN buys Corus, we will look closely at how the deal is done to see if our right (to the ore) remains in force,"Martins was quoted. CSN has, however, dismissed mining group CVRD's claim.

In a statement to the press, CSN said, "There is no basis for this story. There is no change to our position or our commitment to acquire Corus. Should CSN acquire Corus, it will exercise its rights to supply iron ore from its Casa de Pedra mine to all its operations, including those in Europe."

Banking and financial experts in India viewed this development as an advantage for Tata Steel as the two companies head for a face-off next Tuesday.

"Tata Steel already has an upper hand as its bid has been approved by the EU. Although CSN has dismissed any doubts about its ability to supply iron ore, should its bid go through, CVRD's challenge certainly does not help its cause,"an industry official had said.

Meanwhile, Corus shares fell 1.4 percent to 544.5 pence in early morning trades on the LSE.


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## Contrarian

*ONGC, Rosneft ink JV*

NEW DELHI: Flagship explorer ONGC on Thursday announced signing an MoU for forming a joint venture with Russia's Rosneft, a deal first reported by TOI on Wednesday.

The joint venture is mandated to bid for exploration acreages and develop refining, marketing and petrochem projects in Russia and India as well as third countries.

The MoU envisages setting up of two study groups for identifying opportunities in exploration and other areas of the oil industry.

It provides scope for bringing on board other Indian firms for specific projects decided by the joint venture.

The deal is a progression of the partnership the two companies have in Sakhalin-I, where each of them hold 20% equity in the ExxonMobil-led consortium operating the Far East field.

But it is also similar to one Rosneft has with China's CNPC and will bring the Indian company directly in competition with Beijing's efforts to get a piece of the Russian hydrocarbons treasure.

ONGC has been eyeing the Sakhalin-III acreage as well as the Trebs and Titov fields in the Timon Pechora region. These are lucrative acreages and will see intense competition with other suitors.


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## Contrarian

NEW DELHI: The Income Tax department has detected tax evasion of over Rs.1,700 crore and has seized undisclosed assets worth about Rs.228 crore in searches carried out during the current fiscal up to November, 2006.

The searches were conducted across the country, including at Mumbai, Delhi, Kolkata, Chennai, Ahmedabad, Visakhapatnam, Hyderabad and Guwahati, covering various segments of trade, commerce and industry including manufacturers, real estate developers, service providers, civil contractors, performing artists, educational institutions, etc.


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## Contrarian

*Trai slashes roaming charges by up to 56%*

NEW DELHI: Your mobile roaming bill will come down by up to 56% but you could well end up paying more for your local calls Ã¢â¬â if GSM operators manage to unitedly retaliate against the new measure.

The telecom regulatory body, Trai, announced a new roaming tariff regime on Wednesday and said this will take effect from February 15. But faced with a hit of Rs 800-900 crore in revenues from a niche customer segment, GSM operators say they may have to increase local call charges.

"The decline in roaming tariffs necessitates an increase in local call tariffs as roaming tariffs were so far allowing operators to offer affordable services to consumers. This will adversely affect low-end, marginal consumers," said T V Ramachandran, director general, COAI, an industry association that represents GSM mobile operators. TOI was the first to report TraiÃ¢â¬â¢s intent to slash roaming charges.

Experts feel this retaliation exposes the industryÃ¢â¬â¢s inability to successfully appeal against TraiÃ¢â¬â¢s tariff order in the Telecom Dispute Settlement and Appellate Tribunal as TDSAT is unlikely to rule against a pro-consumer order.


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## Contrarian

*'Non-regulation on local calls to remain'*

NEW DELHI: Trai is on a firm wicket especially since the basis of its order of bringing down roaming tariffs is cost data submitted by the operators themselves.

At present, Trai does not regulate local costs as these are anyway low due to intense competition.

When contacted, chairman, Trai, N Misra, said he was unaware of COAI's intent and would examine the issue. ''But we will continue to exercise forbearance on local calls,'' he added.

However, COAI's hand appears weak. Its ability to raise local call charges is constrained by the public sector BSNL on one hand and CDMA operators on the other. BSNL already offers roaming tariffs in the range prescribed by Trai and may not play ball on raising local call charges. CDMA sources confirm they will not raise their local call rates.

''The four GSM operators in every circle appear alone. They can't consider collusive action to raise local call charges, as any such move will invite regulatory intervention,'' says an industry expert.

The new tariffs are applicable for all mobile customers, prepaid and postpaid, across all types of tariff plans offered by both GSM and CDMA mobile operators.

Consumers will no longer be charged a rental or a surcharge in any form for roaming. Incoming SMS while roaming is free while outgoing SMS continues to be charged.

Trai has placed a per minute cap on charges for roaming calls, irrespective of the terminating networks and tariff plans. This translates to a 22%-56% reduction in roaming tariffs compared with the current market rates, over and above consumer savings on rental charges.

Trai has said it will closely monitor market developments on roaming and if perceptible competition evolves in the market, will revisit the issue and even consider forbearing roaming tariffs.

The telecom regulator had initiated a consultation process in November 2006 to revisit ceiling tariffs for national roaming services specified in 2002. The authority took this step as it felt while competition in mobile services was satisfactory, the same was not found to be true for the roaming segment of mobile services.

Significant developments in the telecom industry in the last five years have brought down costs for provision of service.

New and evolving technologies lowered equipment costs, while the segment also benefited from various regulatory and policy measures like reduction in access deficit charges, carriage charges, annual licence fees payable by operators on the AGR and others. Costs per subscriber were further impacted by explosive growth in minutes of usage, and subscribers which increased 50% in 2006 alone. However, roaming tariffs failed to benefit from any of this.


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## Contrarian

*Firstsource public offer in Rs 54-64 band*

MUMBAI: Firstsource Solutions, formerly ICICI Onesource, is all set to be the first pure-play Indian BPO company to list in the country. On Wednesday, the company announced its initial public offer in the price band of Rs 54 to Rs 64, which will open on January 29 and close on February 2.

Over the last one year, two Indian BPOs Ã¢â¬â WNS Global Services and EXL Service Ã¢â¬âalso got listed but both had given the Indian bourses the pass and instead tapped the US market.

Firstsource is offering about 6.93 crore shares, of which 6 crore are new shares being issued by the company while the balance 93 lakh shares are offer for sale by SIF, one of the shareholders of the BPO company. At Rs 64 per share, it would raise about Rs 444 crore of which SIF, an ICICI group company, will get nearly Rs 60 crore.

Firstsource proposes to use the IPO proceeds for acquisitions, setting up new facilities, repaying loans and for general corporate purposes.

For the nine-month period ended December 2006, Firstsource's total revenues were Rs 562.1 crore.


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## Contrarian

*Wipro forms JV with Saudi firm*

BANGALORE: Wipro Infotech has formed a joint venture with Dar Al Riyadh Group to cater to the $2.3 billion Saudi Arabian IT market.

The new entity will be called Wipro Arabia Ltd. While Wipro will hold two-thirds stake in the JV the rest will be with Dar Al.

Suresh Vaswani, president, Wipro Infotech, said: "The JV will offer a range of IT solutions including application implementation, development and management, package implementation services and system integration to firms in SaudiArabia." This is the first overseas JV for Wipro in the Asia Pacific market.

Dar will bring 72 people and Wipro 220 staffers to Wipro Arabia's fold. The Saudi Arabia has contributed about $20 million in revenues to Wipro Infotech's total revenue of about $160 million for the first nine months of 2006-07, while the entire Middle East region brought in close to $25 million.


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## Contrarian

*MS, Infy to research on building software*

BANGALORE: Microsoft Research (MSR) is a unit that seeks to make computing easier and affordable. Infosys Technologies excels in building and providing large-scale software solutions. On Tuesday, the two companies announced a collaboration to figure out newer ways to build software and make it work more effectively.

Microsoft and Infosys have come up with a set of problems that call for intensive research. "If we are successful, we will change the way software is written," P Anandan, MD, Microsoft Research Lab India, told TOI.

Adds Subramanyam Goparaju, VP and head of Software Engineering Technology (SET) Labs at Infosys, "When the scale of a project reaches a certain size, people often spend time in building the software. And then they spend an equal amount of time to make it work. If we can define a new standard that is more effective and less time consuming, that will benefit the industry at large."

Microsoft comes to the table with state-of-the-art tools that could help in coming up with more effective ways to build software. Infosys brings with it the advantage of scale. The sheer size and volume of software services that the latter delivers to its worldwide clients could help this tie up in looking at what works best.

"The common challenge for both companies will be to look at how technology can make software more reliable and in turn reduce the complexity involved in its development phase," explains Rick Rashid, senior VP, Microsoft Research, who is also credited with being the first employee to be asked by the board of directors at Microsoft Corp to start MSR, way back in 1991.

MSR has 50 researchers in Bangalore and gets a strong supply of interns every year. It has produced over 55 research papers. SET Labs at Infy is over 100-strong. The two together could change the way software engineers work.


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## Contrarian

*Inflation falls to 5.9% from 6.12%*

NEW DELHI: Inflation declined to 5.95% during the week ended January 13 from a two-year high of 6.12% in the previous week, on the back of decline in food products' prices. Though, it has fallen slightly with respect to previous week, it is still higher than the RBI's projection of containing inflation in the range of 5-5.5% in 2006-07. Inflation figure a year ago was 4.9%.

The fall in the inflation is primarily because of sudden jump in the whole sale price index in the corresponding week last year. Experts feel, headline inflation will continue to hover in 6-6.5 % range.

The government, at the same time, has been announcing measures to bring down the prices of essential commodities. On Thursday, it has brought down duty on maize to nil from 15% on the import of up to 6 lakh tonne and 50% on more than that. Finance minister P Chidambaram on Thursday said, Ã¢â¬ËÃ¢â¬ËWe would have anyway done it on February 28 (the union budget presentation day) ...... having regard to inflation we advanced it.''

Prior to the import duty cut on maize, government had slashed import duty on several items like capital goods, cement, steel, aluminium and copper on Monday. It also cut the import duty on edible oil by up to 12.5 percentage points on Wednesday. Government had earlier exempted custome duty on wheat and pulses.

However, the decline in the inflation in the week ending January 13 is not due to the custome duty cut effected early this week.

In the week ending January 13, cereals, pulses, fruits, vegetables became cheaper. Urad, whose trading has been suspended in futures market, declined.

However, the decision to ban futures trading came on January 23, while the inflation data pertained to January 13. Food articles prices declined both in primary articles category and the manufactured category.


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## Contrarian

*3G policy by March: Maran*

NEW DELHI: India, one of the world's fastest-growing mobile phone markets, said on Wednesday it plans to announce its next generation Ã¢â¬â 3G Ã¢â¬â policy by March that telecom players expect will ease congestion.

"The policy will be ready by March 2007," communications minister Dayanidhi Maran said on the sidelines of a conference in the Indian capital.

Major telecommunications providers have been carrying out trials of mobile services using the 3G or third generation spectrum in order to test equipment.

Indian telecoms firms are keen to be given frequencies in the 3G spectrum to ease congestion resulting from a boom in mobile phone sales.

A government-appointed panel has been reviewing such issues as pricing and allocations. India has 189.9 million
telephone subscribers, of which 149.5 million were mobile customers, according to official figures that were released in December 2006.

The country gained 6.48 million new mobile subscribers last month, making it one of the world's fastest growing mobile markets.

The government forecasts that by 2010 India will have more than 500 million mobile subscribers. "India's mobile subscriber base is increasing phenomenally every year Ã¢â¬â one customer is added every second," Maran said recently.

Media reports have said that regulatory authorities favour an auction of spectrum for the launch of 3G mobile services and that only five existing mobile operators should be given the frequency.


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## Contrarian

Big reduction in India's working poverty: ILO

NEW DELHI: This is one endorsement that votaries of economic reforms may cherish. International Labour Organisation, in a report, has said that working poverty has been "dramatically reduced" in India, indicating that more people have managed to pull themselves out of the net of absolute poverty.

Coming from a body mandated to protect workers' interests, the finding in ILO's latest report on Ã¢â¬ËGlobal Employment Trends' may help reformers better battle the propaganda that the dismantling of quota permit raj has increased poverty. And that reforms do not benefit those at the bottom of the social and economic pyramid.

The endorsement is not unconditional and comes with a pointer to the challenge facing India and other countries in South Asia. The report points out that 87.2% of the working population in South Asia is having to subsist at an abysmally low income of $2 a day.

The report also shows that GDP in the region has been dipping, clearly pointing out that the smart rate clocked by India has not been able to mask the poor progress in the region as a whole. Joblessness also remains a worry. In fact, the report shows that the dip in GDP from 7.9% to 7.2% since last year was manily because of growing unemployment.

Ratio of employment to population dropped from 58.4% in 1996 to 56.5% in 2006. In India in particular, it points out that working poverty rate has reduced even though minimum wage at $2 a day is one of the lowest. Yet, even this low wage is an improvement on the past and the report indicates that more people now manage to sustain themselves.

The report also points out that South Asian countries "have tended to be less integrated in global markets. They still strongly depend on agriculture and therefore on weather conditions and demand for farm products".

The agricultural sector still accounts for over half of total employment, but is quite a change from the stock Indian political claim that "80% of the country lives in villages". This is more than in any other region, except sub-Saharan Africa. "Moreover, many of the new jobs created outside agriculture in South Asia are in the informal sector and are not necessarily of better quality than those in agriculture," the report asserts.

The region's employment is not growing as fast as the working age population. The fact that over the past decade, employment-to-population ratio has been dipping shows that employment creation has been insufficient to absorb the growing labour force.

According to the report, low literacy rate, particularly of adult population in South Asia, is a cause of unemployment. "More education and training would help to expand employment opportunities, increase labour productivity and allow people to work themselves out of poverty. This in turn would contribute to sustainable economic growth," it asserted.


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## Contrarian

Sorry guys, India is closed today! No economic news!


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## Neo

malaymishra123 said:


> Sorry guys, India is closed today! No economic news!


Grrrrrrrrrrr...:wall:


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## Contrarian

Back in Business LOL!
*
India invites foreign investment in mining 
*
DAVOS: Minister of State for Commerce and Industry Ashwini Kumar has invited global mining companies to invest in his country, while pointing out that a liberal policy had been formulated to facilitate the flow of overseas capital in the sector.

Addressing the chief executives of some of the largest mining companies of the world at the annual meeting of the World Economic Forum (WEF) here, Kumar said a long-term iron ore exploration and export policy was also being framed to draw investments.

The participants at the meeting included top officials of Alcoa of the US, Alcan of Canada, Arcelor-Mittal Steel Company and Anglo-American of Britain, Severstal of Russia, Africa Rainbow Minerals of South Africa and the De Beers Group.

Kumar also underlined the importance of formulating a comprehensive strategy for the mining industry that will factor in environmental concerns and imperatives of resettlement of displaced persons.

"Democratic governments need to be responsive to the sensitivities of the people attached to land, which was also a symbol of their identity," he said.

Kumar also had a meeting David Cameron, leader of Britain's Conservative Party, and discussed with him ways to further reinforce the ties between the two countries.

Cameron was keen to further extend educational opportunities for Indian students in Britain, apart from strengthening the role of business associations in promoting trade and investment between the two countries.

Cameron was also invited to visit New Delhi in July, which was accepted in principle, officials said.
http://timesofindia.indiatimes.com/..._investment_in_mining/articleshow/1480203.cms


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## Contrarian

*"Bharti 'quite open' about Hutch deal"*

DAVOS: Vodafone's chief executive Arun Sarin has said that Bharti Airtel is "quite open" to the fact that the British telecom major is fighting it out in Airtel's rival firm Hutch-Essar.

Vodafone has 9.9 percent stake in Bharti group's telecommunication venture and will need a nod from the company before acquiring a stake in rival Hutch-Essar.

The two companies have a non-compete clause in the agreement and Vodafone has to seek Bharti's permission before buying a stake in a rival company.

Vodafone's Indian-born chief executive, who has already had been authorized by the company board to take steps as he deems fit on the Hutch-Essar takeover bid, said he has not spoken yet on offloading stake in Bharti group's telecom venture.

"We will talk about that when the issue arises. For the moment, Sunil's told us he is quite open," Sarin told IANS on the margins of the World Economic Forum (WEF) meetings here.

"Our due diligence process is currently underway. Once we get the report, which could be any time next week, we'll be submitting a formal proposal. It will be sometime early next month," he added.

"Yes, the entry of so many players has pushed up valuations. But we're serious," said the alumnus of the Indian Institute of Technology (IIT), Kharagpur.

Sarin also said Hutch-Essar was an exciting prospect for Vodafone even if it means an aggressive bid to get a foothold in one of the fastest growing economies in the world, especially in the telecom market space.

Vodaphone has aspirations of running a telecom business in India and having some management say. But that is not available in the Bharti group. So we have no problems if they look elsewhere," Mittal had earlier told IANS who was Friday named for the Padma Bhushan award and is among the four co-chairs at the WEF's ongoing annual meeting.

He, however, said there were no official talks as yet. The board of Bharti, in fact, also appreciated the fact that Vodafone officials chose to abstain from participating at their board meeting in view of their plans for in a rival firm.

Anil Ambani's Reliance Communications (RCOM), the Hinduja group and Russia's Altimo are among those interested in acquiring the 67 percent stake that the Hong Kong-based Hutchison Whampoa has in Hutch-Essar.

Prakash P. Hinduja, who met with this IANS correspondent on the sidelines of the WEF meeting, said his group was keen on Hutch-Essar. "We are serious. That's why we entered the fray," Hinduja said, adding the due diligence process had started.

Incidentally, the Hindujas had exited Hutch-Essar last June by selling their 5.11 percent-stake for $450 million.

However, all eyes are now on the board meet of Hutchison Telecom International Ltd (HTIL) that is scheduled to take place on Jan 29 in Hong-Kong.


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## Contrarian

*EPFO may stick to 8.5% interest rate*

NEW DELHI: At a time when interest rates are rising in the money market, Employees Provident Fund Organisation (EPFO) is in a dilemma to cut the interest rate by half a percentage point to 8% for 2006-07 as against 8.5% it offered in 2005-06 to its subscribers.

The central board of trustee of EPFO is meeting on Saturday to decide on the interest rates for the current fiscal.

A highly placed source in the government said the finance ministry might suggest some way out so that the organisation could maintain the return at 8.5% for 2006-07.

Trade union members affiliated with the Left parties will oppose any move to cut the interest rate as it would affect the interest of the workers.

In fact, on a December 7 2006 meeting the board could not arrive at any decision because of the opposition from the Left parties.

In 2006-07, the fund is likely to earn around Rs 7000 crore on its investments. But, if it announces a return of 8.5% of the corpus, there would be a shortfall of around Rs 450 crore. But, at 8% the fund would be left with a small surplus of around Rs 10 crore.

Most of the EPF is invested in government securities and special deposits schemes (SDS) where the interest rate is low at 8%.

The source said that the facility of SDS for fresh investment is already discontinued but it still has large sums which were deposited earlier.

If the government revises the rates on SDS as the market interest rates have gone up, the board can pay the same interest rate as it paid last year.

However, at the same time, a section in the government argues against giving any support to the fund as most of such support would be cornered by the richer employees.

EPFO has around 4 crore subscribers. Though majority Ã¢â¬â around 80% of them Ã¢â¬â are small employees having total deposits of less than Rs 20,000 the major portion Ã¢â¬â up to over 80% Ã¢â¬â of the total corpus of around Rs 88,000 crore comes from the large employees, who are contributing voluntarily to the fund and having deposits of over Rs 1 lakh.

They argue that any support from the government would be distributed evenly on the corpus and would mainly benefit the large contributors.

But an official said a cut in the rate would be an unpopular move which the government would desist to take in a year when many states are going for elections.

The board of trustee on Saturday would also firm up plan to invest a part of its corpus in the equity as the government has already allowed it.

However, trade union representatives are opposing the move as it is risky and might affect the retirement benefit to the employees.

Government argues that in long run stock market is giving better returns than investments in debt.


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## Contrarian

RIL to start retail rollout in NCR from Monday

NEW DELHI: Reliance industries of Mukesh Ambani group will start rolling out its retail outlets in the national capital region from Monday.

The group, which is planning to invest Rs 25,000 crore in the sector will start with nine locations in Ghaziabad, Noida, Faridabad and Gurgaon and within six months will ramp it up to 600 outlets in the region including Delhi.

The group has already started its retail food business in Chennai, Jaipur and Hyderabad. It is planning to set up retail chain in all the tier I and II cities in the country.

Retail sector in India is abuzz with the activities as foreign giants like Walmart and Carrefour are entering the market.

Walmart has already joined hands with Bharati group to enter the retail business in the country.

The Reliance Industries has recently bought land at 18 locations in Delhi for Rs 1,500 crore. It is learnt that the company is waiting for the New Delhi master plan to be notified as it would allow it to open similar stores at 30 locations in Delhi.

A senior realty consultant who is working with the company in buying land in the region, said the company has already bought space but at present it can't open the outlets as it is not allowed under the existing market plan.

In a recent DDA auctions, the company was bullish and bid aggressively to buy plots in areas like Dwarka, Vikas Puri and Vasant Kunj, where it cornered a number of plots to run its retail outlets.

In Dwarka, it offered a price of Rs 8.50 lakh per square meter to buy a plot of the size of 850 sq feet for Rs 75 crore.

The company has already bought over one million sq feet commercial space in the region. It is learnt that the company is planning to buy around 6 million sq feet space in the next six months.

A real estate consultant said the company is open to buy any property in Delhi with a permitted area of construction of over 2,500 sq feet.

It is also buying space at shopping malls for the purpose. Sources said it will also open outlets at Shipra Mall in Indirapuram in Ghaziabad.

To start with, the company will sell vegetables and other eatables from these stores. But soon it will diversify into consumer durables, IT hardware and apparel.

The company is planning to sell goods for both middle class and upper middle class people.

Since the company will source materials from primary sources, it would save commissions paid at various levels.

Therefore, it would be able to sell its product at highly competitive prices. For vegetables and eatables, it has started two distribution centers at Kaundali and Arti Nagar, which would act as group's private mandi where they would buy agricultural items directly from farmers.

For apparel and consumer durables, the company is contracting the manufacturing companies directly so that it could save on the dealers' commission.
-----------------------------

So finally it starts!


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## Contrarian

*Consultancies sue Ranbaxy for charges*

MUMBAI: Ranbaxy Laboratories, India's largest pharmaceutical company, has been sued for not paying up consultancy charges for a deal that led to a successful business in the Japanese market.

Mumbai-based firm India Advisory Partners (IAP), a boutique consultancy firm and Hideaki Furuse, a Japanaese consultant, have filed a complaint in the Mumbai high court accusing the pharma major of dishonouring its obligations.

The complaint claims that both IAP and Furuse were instrumental in introducing Ranbaxy to their current partners in the Japanese market Nippon Chemiphar Co and Nihon Pharmaceutical Industry Co.

As per the engagement letter signed in May 2002, Ranbaxy was to pay IAP a certain percentage of any equity investment and sales of any Ranbaxy products through a Japanese partner.

Though Ranbaxy paid a fee after it picked up a 10% initially in Nihon Pharmaceutical, it discontinued further payments despite several requests.

A Ranbaxy spokesperson said that they had still not heard of the complaint and could not comment on the issue.

IAPs Kai Taraporevala says without their consultancy help given between January and April 2002, Ranbaxy could have never known about these small companies in Japan.

In September 2002, Ranbaxy signed business alliance agreement and stock purchase and shareholders agreement with Nippon Chemiphar and Nihon Pharmaceutical. The deal was for an initial 10% stake in Nihon Pharmaceutical with an option to increase upwards over time.

In due course, Ranbaxy increased the stake to 50% and introduced several drugs of its drugs through the joint venture.

Taraporevala claims that Ranbaxy owes IAP and Furuse nearly Rs 2 crore in consultancy charges and they have been refusing to pay it despite several requests. An ex-employee who quit the company a year ago admitted to differences with IAP.

He said that the problem was left unattended as several executives responsible for the agreement with IAP to start the Japanese business notably senior Asia Pacific and legal head shave since left the company.


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## Contrarian

*Tatas plan 1000 MW power plant in Chhattisgarh*

MUMBAI: Tata Power company will set up a 1000 MW coal fired mega power plant in Chhattisgarh with an estimated investment of Rs 5,000 crore.

Tata Power has signed an MoU with the government of Chhattisgarh to this effect, the company informed the Bombay Stock Exchange.

"This agreement signifies Tata Power's commitment towards the state of Chhattisgarh for bridging the power requirements of the state and the country,"Tata Power managing director Prasad Menon said. "With this MoU, Tata Power has taken another step towards its growth plans and increasing its national footprint," he added.

The Rs 5,000 crore power project will require around 1200-1300 acres of land. On the basis of preliminary feasibility study, a suitable site in the Raigarh district of Chhattisgarh has been identified.

Tata Power is now in the process of carrying out a detailed feasibility study for the project.


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## Contrarian

*Jindal Stainless to invest Rs 5,000 cr in Orissa plant*

NEW DELHI: Stainless steel manufacturer Jindal Stainless Ltd (JSL) will invest an additional Rs 5,000 crore in its Orissa plant to double its production capacity to 1.5 million tonnes annually.

The company is also looking at the possibility of tapping the market through an initial public issue to part fund the expansion plans.

"We are planning to make fresh investments of around Rs 5,000 crore in our Jajpur plant in Orissa, which would double our overall production capacity,"JSL chief executive officer and managing director VS Jain said.

"The project would be funded mainly through internal accruals but in case need arises we would also tap the market,"Jain added further.

The expansion plan, expected to be completed in 36 months, would take Jindal Stainless Ltd's overall production capacity to 1.5 million tonnes per annum from the present 0.7 million tonne.

The company presently operates through its three plants in Hisar, Visakhapatnam and Jajpur. JSL expects Hisar plant's capacity to touch 0.6 million tonne this year while the Jajpur plant is presently operating at around 0.1 million tonne per annum.

JSL has already invested Rs 2,300 crore in setting up a greenfield facility in Jajpur. The first phase of investment, scheduled to be completed this year, was made to install basic input requirements including a ferro-chrome unit and a captive power plant at the facility.

"The investment would be made in addition to the Rs 2,300 crore invested in the first phase. We plan to have an installed capacity of around 0.8 million tonnes in Jajpur by the end of Phase II,"Jain said.

The company was looking at having an overall capacity of 1.6 million tonnes at Jajpur and would start a third phase of expansion at the plant to achieve 1.6 million tonnes target after completion of the second phase, Jain added.

"The third phase of expansion at the Jajpur unit depends entirely on the market demand. We are looking at doubling the plant's capacity to 1.6 million tonnes per annum in the third phase,"he added further.

JSL had, in 2004, acquired Maspion Steel in Indonesia to strengthen its presence in the international market.


----------



## Contrarian

*UBS buys StanC Mutual Fund*

MUMBAI: It's final. After months of speculation that had thrown up a slew of possible suitors, Swiss banking giant UBS will buy Standard Chartered Mutual Fund. The European bank, best known for its expertise in managing private wealth in true Swiss banking tradition of extreme secrecy, will pay around Rs 600 crore to buy out the fund house, industry sources said.

The deal, which was finalised in London recently, is somewhat different from the recent acquisition deals in the Indian mutual fund industry. Over the last few years, most of the acquisitions were buyouts of only the assets of the fund house and not the whole mutual fund. But in the UBS-StanC MF case, the Swiss bank is buying out the entire equity in the fund house.

UBS will pay about Rs 530 crore to the promoters of the fund house, while it would also assume a liability of Rs 60 crore, at present in the books of StanC MF, sources said. Aviva, another European financial giant, was also in the race for StanC MF but had backed out, refusing to assume the liability of the fund house.

As of January end, StanC MF's assets under management were about Rs 12,628 crore. So at the current valuation of about Rs 600 crore, the price works out to about 5% of AUM. Going by industry standards, the price was a little on the higher side, industry players said.

Usually, equity fund AUMs fetch a higher price, about 2.5-3% of the AUM while debt funds are priced at about 1.5% of the AUM. Liquid and money market funds are priced lower than 1% of the AUM.

Since its inception in 2000, StanC MF was a pure-play debt fund house. It was only in 2005, that the fund house launched its first equity fund, Classic Equity Fund. Since then it has added about four pure equity schemes and an equity arbitrage fund.

For UBS, the entry into the fast growing Indian fund industry is a huge step forward. For a long time the Swiss banking giant has been trying to enter the country's banking industry but is yet to get a license from the RBI.


----------



## Contrarian

*Essar delists its oil and steel arms*

MUMBAI: The Ruia-controlled Essar group, on Thursday announced its decision to delist two of its companies Ã¢â¬â Essar Steel and Essar Oil. Another group company Essar Shipping is also in the process of being delisted.

The minimum floor prices for the delistings have not been disclosed.

The move is aimed at consolidating the group's holdings into Prime Holdings, a closely held Mauritius-based investment arm.

According to sources, the group has drawn up mega plans to list Prime Holdings overseas to generate funds for expanding its business globally. TOI had first reported that the Essar group was delisting in its edition dated September 7, 2006.

Essar Steel Holdings and Essar Energy Holdings, the parent companies and largest shareholders of Essar Steel and Essar Oil, have proposed to buy out the public shareholders in the two companies.

The two companies are listed on the Bombay and the National stock exchanges.

At present the promoter' stake in Essar Steel is 87% and while the corresponding figure in Essar Oil is 88%.

"The delisting of equity shares will offer more flexibility in operations and management of the com pany, greater efficiencies and provide an exit opportunity for shareholders," the group said.

Essar Steel and Essar Oil will seek their board approvals for delisting on January 29 and January 30 respectively.

Shares of both the companies rose more than 10% on the bourses. On the Bombay Stock Exchange, while Essar Oil ended at Rs 63.20, while the 52 -week high for the stock was Rs 80, reached last May.

Essar Steel, on the other hand, closed at Rs 50.15, with the 52-week high at Rs 58.85.


----------



## Contrarian

*Radico mulls tie-up with Future for liquor retail*

MUMBAI: The dynamics of liquor distribution is changing. With some state governments allowing alcohol products to be sold through organised retail, liquor companies are charting new business strategies.

Seizing the first mover advantage in modern trade, Radico Khaitan, the second largest spirits company, is in talks with the Future Group (owners of Big Bazaar hypermarkets) for a 50:50 joint venture for liquor retailing.

When contacted, Kishore Biyani, managing director of Pantaloon Retail India, said, "We are looking at various opportunities in the retailing space."Abhishek Khaitan, managing director of Radico Khaitan, declined to comment.

While the scope of the agreement could not be ascertained, sources said, Radico's whisky brands like 8 pm and Whytehall, Magic Moments vodka and Old Admiral rum will bag shelf space at Pantaloon's Big Bazaar and Food Bazaar outlets.

But a caveat exists Ã¢â¬â putting hard spirits on retail shelves requires regulatory approvals which are still pending.

Currently, only Karnataka allows wine and beer on retail shelves. Delhi allows beer and Maharashtra only wine. West Bengal and Andhra Pradesh are expected to follow suit.

Meanwhile, the Tata group's Star India Bazaar may look at making wine and beer available at its soon-to-be opened store in Bangalore.

A Trent executive said that the company is yet to start negotiations with any spirits firm.

Even as the companies try to strike alliances for shelf space in retail malls, some are trying to strike out on their own.

Diageo, for instance, the world's largest spirits company, is planning to open stores that will stocks its brands exclusively.

Asif Adil, managing director of Diageo India said, "Our stores will be branded after flagship Johnnie Walker and will sell the entire range of our products."The first Johnnie Walker store will be opened in suburban Mumbai shortly.

Diageo will explore leveraging its relationship with the world's largest retailer Wal-Mart in India as well.


----------



## Contrarian

*Higher tax burden on shipping cos*

MUMBAI: Even as the Indian shipping industry fights tooth and nail to shake off the burden of 12 different taxes, another liability just knocked at its door.

The income tax department is asking companies in the business to shell out 22.5% as TDS (tax deducted at source) on income earned by giving ships out on rent. In shipping parlance, it is called 'charter hire'.

If the department has its way, the Rs 11,000 crore industry will end up with a tax burden that runs into a few hundred crores.

Clearly, people who run the business aren't happy. "This twist will destroy the industry,"said an industry source.

From the tax department's perspective, they have simply put ships on par with 'plant and machinery' given out on rent. Hence, they argue, income earned ought to be taxed at source at 20%. Add cess and surcharges to it and the number shoots up to 22.5%.

The tax department has already turned the heat on companies like Varun Shipping, Mercator Lines and UltraTech. Unlike other kinds of tax payments, the onus of collecting TDS is on the user of the service.

So, UltraTech has already started deducting taxes on the charter hire it pays two companiesÃ¢â¬âK C Maritime and Bulktainer Shipping.

Sources told TOI that notices have also been issued to oil majors like ONGC and Cairn Energy which hire ships or different offshore vessels for their exploration works.

"The highly capital intensive (shipping) industry's net profit is not even 20% of their total income,"said an official.

"The shipping industry has reached a stage where more than looking at the business opportunities, we look at the tax incidence for each and every little transaction. If all the government departments behave in the similar way, shipping in India will not be viable any longer,"said the head of a shipping company.


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## Contrarian

*'Treated in India' catching on in West*

BANGALORE: A liver transplant in the United States costs around $450,000. In India it costs $40,000. If any explanation was required to describe why the Indian medical tourism industry is flourishing, this fact will nail it.

Today Indian medical tourism market is worth $700 million and the projection is that by the year 2010 it will swell to $1 billion.

The key is it is not just the south or west Asian population that is coming here for treatment Ã¢â¬â the UK/US crowd have also realised the value of coming to India. According to estimates, out of 1.5 lakh international patients who visited India, three-fourths came from US and UK.

There are two factors contributing to this. First, the international community is confident of the quality of Indian healthcare practitioners. It is said that one out of six doctors in the US is an Indian. Second, there are huge cost benefits.

Low-cost cardiac surgery in India costs $4,000-9,000 and in the US as high as $30,000-50,000. An orthopaedic surgery costs as low as $4,500 here with a corresponding surgery in US costing $18,000.

Besides, the cost of comprehensive health check-up for a US patient in India is around $80, which in the US costs $600.

The reasons for indulging in health tours also vary from country to country. Medical tourists from the US are seeking treatment at 1/4th or even 1/8th of the cost at home. From Canada, it is often people who are frustrated by long waiting periods.

The typical UK patient is one who is not able to wait for treatment by the National Health Service and in some cases cannot afford to see a physician in private practice.

And then there are patients coming from countries like Bangladesh, Kenya and Vietnam where it is difficult to get quality treatment.

Says Wockhardt Hospitals CEO Vishal Bali, "What started as a low-cost, low-value medical care destination is today turning into a superspeciality zone.

There is a "Treated in India"brand going around."International patients are coming to India for cardiac surgery, spine correction, hip replacement and other such high value treatments. "The market is growing by 30% a year,"says Bali.

"Another reason why people fly into India for treatment is our holistic approach,"says Apollo Hospitals CEO V P Kamath. "We weave in things like yoga, aromatherapy and ayurveda into our treatment. It's a unique basket."

The majority of the clinical population here speak English and Indian surgeons have world class skills and surgical exposure too.

Another aspect that is helping Indian medical tourism is the fact that there are 50 million uninsured US citizens.

"High insurance premiums have kept a lot of people away from taking health insurance policies in the US,"says Kamath.

The health insurance sector in India, however, does not even cover 10% of the population. "But it will eventually grow.

Already the Indian health insurance market is worth Rs 5,000 crore," says Bali. The growth in health cover would be crucial for the betterment of the domestic MT market.


----------



## Neo

*Only 3 per cent Indians understand economic reforms *

NEW DELHI: India may be registering blistering rates of growth but only three per cent of its people understand the economic reforms being implemented and most think they have benefitted only the rich, said a survey published Friday.

Ã¢â¬ÅSeventy-two per cent of Indians were unaware of the economic changes that the country has been going through since 1991Ã¢â¬Â when India launched market reforms, said the survey published in the Hindustan Times.

Sixty-two per cent also felt the changes in economic policy benefitted only the rich, said the poll by the New Delhi-based Centre for the Study of Developing Societies for the Hindustan Times and news channel CNN-IBN.

The survey questioned 7,681 people across 19 states of India.

It found that only 28 per cent of Indians had heard of economic reforms while Ã¢â¬Åmost did not have even a rough idea of the broad directions of the policy changes.Ã¢â¬Â

Despite this lack of awareness of the reforms, 56 per cent said IndiaÃ¢â¬â¢s economy had improved in the past decade while 46 per cent said their familyÃ¢â¬â¢s economic situation had improved since 1991.

India liberalised its economy in 1991 when Manmohan Singh, who is now IndiaÃ¢â¬â¢s prime minister, served as the countryÃ¢â¬â¢s finance minister.

Sixteen years of reforms have seen revolutionary changes in Indian industry, with government figures showing 9.1 per cent economic growth in the first six months of 2006 led by strong manufacturing growth.

http://www.thenews.com.pk/daily_detail.asp?id=40534


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## Neo

*Demand sparks India's power play *

By Karishma Vaswani 
Business correspondent, BBC News, Mumbai 

Russia has agreed to build four nuclear reactors in Southern India as the country tries to feed a voracious demand for power and energy that is outstripping current supplies. 

It is estimated that in 15 years time India will need three times as much energy as its using today. 

The lights are on here for just a few hours a day - that's despite the fact that this village is only a two hour drive from Mumbai, India's financial and entertainment capital - where the lights are on all of the time. 

For 13-year-old Trupti Yashwant Rao and her brother, studying by the light of a kerosene lantern is a daily reality. 

Her father, a principal at a local school, has taught her this way since she can remember. 

The reason for the blackouts is that the state of Maharashtra, where her village lies, is in the midst of a power shortage brought about by the rapacious demand for energy as India's economy expands rapidly. 



> We have power cuts here already for at least 8 hours a day
> 
> Chandrakant Yashwant Rao
> 
> 'Real burden'



Now, there are reports that Maharashtra could see more power cuts - up to 14 hours a day. Villagers in Sangam are horrified. 

"We have power cuts here already for at least 8 hours a day, and it is really difficult," Chandrakant Yashwant Rao, Trupti's father, says as he adjusts the kerosene lamp on his desk. 

"No farming work can get done because there's not enough power for irrigation of the land. 

"The children here all study by lantern light, making it hard on them too. It's a real burden for us." 

Stumbling about in the darkness outside of Chandrakant's home - you are struck by the deep blackness of the night. 

There is not a light to be seen for miles around; just small, tiny dots of fire and lanterns in the distance. 

It is hard to believe that this is barely off the main highway that takes you back to Mumbai 

Regular power cuts make life difficult 

But this is a problem that is not isolated to Sangam Village. 

A few hundred miles away, in the Maharashtran village of Palshi in the Amravati district, it is reported that farmers have threatened to commit suicide unless they get uninterrupted supplies of power. 

They also say it is impossible for them to do any farming without the power to fuel their irrigation. 


Struggle 



> Additional capacity is needed to keep pace with existing consumers of electricity - as well as future consumers
> 
> Martin Daniell
> Platts



"As with many developing Asian economies, India has the same growth problems when it comes to power," says Martin Daniell of energy analysts Platts. 

"Most areas in the country don't have enough electricity - not enough constant supplies of electricity. 

"The problem lies in the fact that now these areas are also seeing economic growth. 

"Additional capacity is needed to keep pace with existing consumers of electricity - as well as future consumers." 

India's power crunch is proving to be problematic not just for its population, but also for its economic growth. 

Power plants across the country are struggling to keep up with the pace of demand. 

At Reliance Energy outside of Mumbai, power production is already at a peak. 

The coal-powered plant supplies the majority of the electricity for Mumbai's homes and factories. 

We're at peak production point - and it will be very difficult to produce more electricity here if the demand keeps growing 

PK Majumdar
Reliance Energy 

"Coal is responsible for the creation of two thirds of India's electricity," says plant manager PK Majumdar. "The rest comes from hydroelectricity." 

"India has one of the lowest costs of production of electricity in the world - because of large and accessible coal reserves," he adds. 

Alternative needed 

Unfortunately those coal supplies are running out and demand is rising quickly. 

Mumbai alone has seen an annual rise in demand for electricity of between 5% and 10% in the past few years, according to Reliance Energy. 

"As the demand for electricity grew, we grew our capacity along with it," says Mr. Majumdar. 

"But now we're at peak production point - and it will be very difficult to produce more electricity here if the demand keeps growing. 

"We would need an alternative source of power - more power in some other form." 

This then is India's challenge: finding an alternative source of energy - and fast. 

According to recent reports, India's economy will become the second largest in the world by 2050. 

But in order to keep its economic engine growing, it needs to fuel its factories, its machines, its homes and schools with some form of power. 

Locating another source of energy is crucial for India's economic development. 

Otherwise India's power crunch could turn the lights out on the country's growth. 

http://news.bbc.co.uk/2/hi/business/6302927.stm


----------



## Contrarian

Neo said:


> *Only 3 per cent Indians understand economic reforms *
> 
> NEW DELHI: India may be registering blistering rates of growth but only three per cent of its people understand the economic reforms being implemented and most think they have benefitted only the rich, said a survey published Friday.
> 
> Ã¢â¬ÅSeventy-two per cent of Indians were unaware of the economic changes that the country has been going through since 1991Ã¢â¬Â when India launched market reforms, said the survey published in the Hindustan Times.
> 
> Sixty-two per cent also felt the changes in economic policy benefitted only the rich, said the poll by the New Delhi-based Centre for the Study of Developing Societies for the Hindustan Times and news channel CNN-IBN.
> 
> The survey questioned 7,681 people across 19 states of India.
> 
> It found that only 28 per cent of Indians had heard of economic reforms while Ã¢â¬Åmost did not have even a rough idea of the broad directions of the policy changes.Ã¢â¬Â
> 
> Despite this lack of awareness of the reforms, 56 per cent said IndiaÃ¢â¬â¢s economy had improved in the past decade while 46 per cent said their familyÃ¢â¬â¢s economic situation had improved since 1991.
> 
> India liberalised its economy in 1991 when Manmohan Singh, who is now IndiaÃ¢â¬â¢s prime minister, served as the countryÃ¢â¬â¢s finance minister.
> 
> Sixteen years of reforms have seen revolutionary changes in Indian industry, with government figures showing 9.1 per cent economic growth in the first six months of 2006 led by strong manufacturing growth.
> 
> http://www.thenews.com.pk/daily_detail.asp?id=40534



I saw this poll result on TV, it was the State of the Nation poll, and a debate followed by experts. Pretty good! 
They said that Indians only now realise that reforms are good, even now a majority think that it should be the govts responsibility to provide services to them, not private companies. And that there is such a shameful lack of knowledge about reforms in India. One of the major reasons is that reforms have always been a very political issue, any govt which publicly went with reforms was criticised, lost national standings, lost votes, other parties said that the govt was not 'anti-poor'. A term which can literally cause a govt to fall down from its majority!! It was a bullet, so most govts deliberately kept reforms quiet, going slowly.

This really points out the bad side of democracy, where political parties play vote bank politics at the cost of the nation


----------



## Contrarian

Neo said:


> *Demand sparks India's power play *
> 
> HEHE...Chk this out. I saw it a couple of days back but couldnt post it.
> 
> http://timesofindia.indiatimes.com/...e_your_cell_with_dung/articleshow/1410529.cms
> 
> *Now, charge your cell with dung!*
> 
> AHMEDABAD: What do you do if you are left without electricity for long stretches of time? You make your own electricity. Simple. Niruttam Kumar Singh and Harvansh Yadav, a student-teacher duo from Gangagarh village in Bulandshaher, Uttar Pradesh, have made a cow dung battery that lights up electric bulbs, charges mobile phones and brings alive radios!
> 
> "In Gangagarh,we barely get five hours of electricity daily, making it difficult for students to study at night," says Yadav,who is in Ahmedabad to showcase his innovation at a workshop on 'Green Grassroots Innovation, Incubation and Enterprises' organised by the Society for Research and initiatives for Sustainable Technologies and Institutions (SRISTI) at IIM-Ahmedabad.
> 
> Three years ago, Yadav and Niruttam, a class 7, student came together to resolve the issue. "We knew cow dung produced biogas and decided to experiment with it to produce electricity.
> 
> We collected cow dung in a plastic container and put two discharged batteries in it. As we charged cow dung with a salt water solution, the positive and negative charges produced were collected in the batteries and interconnected in series to produce a current," Niruttan said.
> 
> The duo charged mobile phones with their innovation. "Each unit produces 1.5 volts of current," says Niruttam, adding, "The cow dung needs to be replaced once in 45 days. If one wants more efficiency, one can put sulphuric acid."
> 
> The two proudly say that their innovation has changed life in Bulandshaher. "Around 250 households in Gangagarh and neighbouring Kamonah, Jinamai, Risoolgarh and other villages use our battery to light bulbs and listen to radio. We teach them how to make such batteries free."
> 
> Niruttam is now planning to improve the design. "We want to use something that doesn't give a foul smell Ã¢â¬â cow urine perhaps." Meanwhile, this innovation is all set to charge mobile phones at Gujarat University. "We are planning to put a mobile phone charging unit in the campus for students," says professor Anil Gupta of SRISTI.


----------



## Neo

malaymishra123 said:


> I And that there is such a shameful lack of knowledge about reforms in India.


I was quite surprised myself to learn that, India is often advocated as a democratic and iopen society.



> One of the major reasons is that reforms have always been a very political issue, any govt which publicly went with reforms was criticised, lost national standings, lost votes, other parties said that the govt was not 'anti-poor'. A term which can literally cause a govt to fall down from its majority!! It was a bullet, so most govts deliberately kept reforms quiet, going slowly.


How can you keep reforms quiet, there's no such thing unless you're deaf and blind.
Please elaborate.



> This really points out the bad side of democracy, where political parties play vote bank politics at the cost of the nation


There's no such thing as a perfect democracy either.


----------



## Adux

Neo

India is plagued with socailist menatlity to the extreme ends over here, Government has Hotels etc etc, governments job is to run the country and important insitutitions needed for that...

Our people like everything free, Reform is equal to transperancy, Loss of Babudom, Plus the mInister making a lot of money with the companies...etc etc


----------



## Contrarian

Neo said:


> I was quite surprised myself to learn that, India is often advocated as a democratic and iopen society.


It is mate, it is democractic and open. You dont get it, its just that the reforms took place, but they were not publicised that much and other things were done to dwarf these proceses. The govt cannot stop any thing from being published, its just they did things that dwarfed such economic news in the media. They HAD to do it, or reforms would not have taken place at all. It was necessary since India went near bankruptcy in 1990.



> How can you keep reforms quiet, there's no such thing unless you're deaf and blind.
> Please elaborate.



Like this, when govt goes for any reform, then it would first say allow FDI in any secor only 25%, so when people say that this would lead to foreign companies taking over India, they would say that its only minority stake and the rest is with govt. Then after some years, they'd increase it to 49% as is the case with many sectors now, and they'd cut a deal with the copmany buying the shares that they would not fire the emplyees for atleast this much time, so the govt claims that the people will not be fired, etc, etc.

With every half way reform done, they would announce big projects taken by the govt that basically grabs the main attention, like either announcing subsidy on something or going for a big ticket project: 
eg: Golden Quadrilateral Project started by the Vajpayee govt. He got money for this by announcing to the public that Rs 1 would be charged on petrol, and people should do this for the nation. Every citizen worth his salt commended him for taking effort to upgrade the nation's infrastructure.

The Golden Quadrilateral was the project to connect the 4 main centres of India, industrial and population wise. New Delhi, Bombay, Chennai,Calcutta. It was a HUGE project!

Now the second phase of the Project has started, making more lanes in the Golden Quadrilateral.



> There's no such thing as a perfect democracy either.


Yes, but votebank politics are a HUGE thing in India.Much more so than in developed countries.


----------



## Neo

Thnaks for explaining.


----------



## Neo

*IndiaÃ¢â¬â¢s trade deficit at $5.68bn *

NEW DELHI: IndiaÃ¢â¬â¢s trade deficit widened to $5.68 billion in December from $2.69 billion a year earlier as the pace of export growth slackened in AsiaÃ¢â¬â¢s fourth-largest economy.

The deficit stood at $6.20 billion in November, $6.21 billion in October and $5.33 billion in September. The government said on Saturday the trade gap widened to $41.72 billion in the first nine months of the fiscal year that began in April, from $31.76 billion in the same period last year.

Exports in December rose 7.75 per cent from a year earlier to $9.90 billion, while imports rose an annual 31.12 per cent to $15.58 billion, the provisional data showed. Analysts said the trade deficit was not yet a concern but slowing down of export growth needed to be looked at carefully.

Ã¢â¬ÅThe trade deficit is not a concern but exports are lower than expectations. One needs to look at it closely to find out the reasons,Ã¢â¬Â said Saumitra Chaudhuri, economic adviser, domestic ratings agency ICRA. 

Exports in the April-December period were $89.49 billion, compared with $73.36 billion in the year-ago period. The governmentÃ¢â¬â¢s full-year export target is $126 billion, a rise of 22.3 per cent over the previous year.

Imports in the first nine months of 2006/07 were $131.21 billion an increase of 24.8 per cent from $105.11 billion in the same year ago period. Non-oil imports, a key gauge of industrial activity, were up 31.81 per cent in December to $10.76 billion while April-December period they rose 18.67 per cent to $87.40 billion.

Oil imports in December rose 29.58 per cent from a year earlier to $4.82 billion. In the April-December period, they grew an annual 39.23 per cent to $43.82 billion. India imports about 70 per cent of its oil needs.

http://www.thenews.com.pk/daily_detail.asp?id=40670


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## Neo

January 28, 2007 

*India opens telecom door to Vodafone*

DAVOS, Jan 27: India hopes Vodafone will be able to establish itself there quickly, giving the global telecoms groupÃ¢â¬â¢s plan to take over local player Hutchison Essar a welcome boost.

Ã¢â¬ÅWe do hope that Vodafone will be able to establish its footprint in India sooner rather than later,Ã¢â¬Â Junior Minister for Industries Ashwani Kumar said after meeting Vodafone Chief Executive Arun Sarin on the fringes of the World Economic Forum.

The two discussed Vodafone's plans to tap into IndiaÃ¢â¬â¢s expanding telecoms market, although Sarin was not available to comment on the progress of the proposed bid for Hutchison Essar.

Ã¢â¬ÅMy sense in meeting Sarin was that things are progressing well for Vodafone,Ã¢â¬Â Kumar told Reuters in an interview after the meeting, adding that details of commercial negotiations were nothing to do with the Indian government.

Britain's Vodafone is being challenged by IndiaÃ¢â¬â¢s Reliance Communications, the Hinduja group and Hutchison's minority partner in the venture, Indian group Essar, in the race for Hutchison Essar.

Valuation estimates for Hutchison Essar, where a 67 per cent controlling stake owned by Hong Kong conglomerate Hutchison Whampoa is on offer, have climbed to as much as $20 billion from around $13.5 billion as the list of suitors expands.

Asked whether Sarin had sought reassurances over the bid process from the Indian government, Kumar said:Ã¢â¬ÂI don't think he specifically asked for any reassurances. The Indian government telcom policy is clear-cut and it is well laid out.Ã¢â¬Â Winning control of Hutchison Essar would give Vodafone a strong asset and 22 million customers in a fast growing market.

IndiaÃ¢â¬â¢s main mobile operators now share nearly 150 million customers, but with IndiaÃ¢â¬â¢s population over 1.1 billion, it translates to less than two out of 100 people owning a mobile.

For Vodafone, which faces slowing growth in its key Western European markets, a strong presence in India could provide it with a vital growth engine.

Vodafone owns a 10 per cent stake in India's top mobile company Bharti Airtel, but does not stand a chance of getting control as Bharti's main shareholders don't want to sell.

http://www.dawn.com/2007/01/28/ebr19.htm


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## Contrarian

*UK Indians see Tata Corus buy-out as 'India poised'*

LONDON: Indians - on the UK rich list and never notionally near it - have hailed Tata's purchase of Corus as a defining sign the mother country is finally poised to leap on to the world stage.

The jubilant reaction was led on Wednesday by Aditya Mittal, the Indian-passport-holding chief financial officer of Arcelor Mittal, the world's largest steelmaker and also it's most global.

Mittal told TOI, "Congratulations to Tata Steel. This is an important milestone for India's globalisation and is a strong signal that Indian companies are ready to compete on a global arena. Tata has a strong track record and I am confident they will make a success of integrating Corus and establishing a global business. For the industry more broadly this is a very positive development and Arcelor Mittal has long been a champion in the benefits of consolidation for the industry as we believe it will help create a more sustainable industry".

Mittal's endorsement was echoed by Britain's curry king, Ghulam Noon, who left Mumbai for London to build a multi-million-pound Indian food empire. In exuberant tones, Noon said "Oh this is fantastic. Congratulations to Tata. India is really shining now".

On a parallel but distinct note of congratulation, Lord Swaraj Paul, whose Caparo Steel was once the fancied globe-trotting player with a vision, told this paper, "this is a marvellous thing but it would be an overstatement to say that this is a symbol of India arriving on the world stage".

Paul, who combines his commercial interests with thoughtful comment on wider politics, business and society, said, "India should learn lessons from this....here was an Indian company bidding for a British one and everyone (here) has welcomed it. It is important to open ourselves up to the world. It makes a country stronger."

Noon added, in a prescient indication that Tata's overall control of the UK's former steel champion may one day come under scrutiny, "Fittingly, it is Tata that has done this. It is a great company. A great Indian company. People admire its ethics and governance".

The curry king said, along with a multitude of ordinary Indians who insisted that even though they were not captains of industry, "we still feel proud", that Tata's buyout would "encourage small, large and medium-sized Indian companies to look abroad".

He said Tata's win at the auction told the world that "Indian companies are now mature enough to stride the world".

But a reflective Paul added that it was time for India to see things clearly rather than blow them out of proportion. "Such takeovers happen in London everyday. It may be unique for India. The point is that these are two strong companies and this makes for a global combination in a global market".
http://timesofindia.indiatimes.com/...y-out_as_India_poised/articleshow/1547866.cms


----------



## Contrarian

*Tata Steel shares plunge 10.47% on bourses*

MUMBAI: Shares of Tata Steel on Wednesday plunged over 10 per cent on the bourses on concerns in the market that the 11.3 billion dollar Corus deal could stretch its valuations.

Tata Steel shares plunged by Rs 55.35 or over 10 per cent to close at Rs 463.95 at the BSE.

The scrip witnessed heavy trading on Wednesday with a total of 2.58 crore shares of Tata Steel changing hands on both the bourses.

On the National Stock Exchange, Tata Steel shares plunged by Rs 54.35 or 10.47 per cent to end at Rs 464.90. The scrip had touched a low of Rs 461.10 during the day.

Tata Steel shares affected the BSE Metal index, which plunged nearly 5 per cent to close at 9,283.17.

Besides Tata Steel, the major losers on the metal index included -- Hindustan Zinc down Rs 53.30 or seven per cent to end at Rs 707.20, PSU major SAIL losing Rs 4.90 or 4.33 per cent at Rs 108.15.

The only two scrips in the index, which managed to remain in the green were -- JSW Steel surging Rs 14 or 3.35 per cent to end at Rs 458.70 and Jindal Steel.

Tata Steel will acquire Anglo-Dutch steelmaker Corus Group for 11.3 billion dollar. Tata Steel has offered Corus' shareholders 608 pence per share in cash, topping a final bid of 603 pence from Brazilian Companhia Siderurgica Nacional (CSN).


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## Contrarian

*Home, other loan rates to go up*

MUMBAI: Buying a house, car, shares or shopping through credit cards may become expensive with the Reserve Bank of India hiking a key short term rate by 25 basis points for taming inflation.

In a policy review that may trigger across-the-board increase in interest rates, the RBI on Wednesday hiked the repo rate, through which it injects liquidity in the banking system, to 7.50 per cent from 7.25 per cent.

Concerned over excessive credit growth, the central bank targeted real estate, personal loans, credit card advances and exposure in share markets through higher provisioning norms.

While the home finance was kept out of these 'heated areas' which would attract even higher interest rates, analysts feel that buying a house would still become expensive along with the overall hardening of interest rates.

In his statement on the third quarterly review of monetary policy, RBI Governor Y V Reddy said the objective was to keep the inflation rate between 5 and 5.5 per cent this fiscal. In the backdrop of the buoyant economy, the RBI revised the GDP growth projections to 8.5-9 per cent for 2006-07.

The apex bank kept all other key rates unchanged. The bank rate and the reverse repo rate (the liquidity sucking mechanism) were kept at six per cent each, while the cash reserve ratio was maintained at 5.5 per cent. The last tranche of the CRR hike was effected in December and January to curb money supply and inflation.

It kept the statutory liquidity ratio unchanged at 25 per cent, despite a recent Ordinance allowing RBI to reduce it.

"We are trying to rebalance by attacking inflation without affecting the growth momentum," Reddy said in his customary press conference.


----------



## Contrarian

*GDP growth rate revised to 9% for 2005-06*

NEW DELHI: Indian economy, growing at a pace next only to China, expanded at a faster rate of 9.0 per cent during 2005-06 largely on the back of a higher output in farm sector than previously estimated.

The government on Wednesday revised upward its growth estimates for the last financial year to 9.0 per cent as against 8.4 per cent earlier, boosting hopes of the economy touching an overall 8.0 per cent in the 10th five-year plan.

The country's gross domestic product (GDP) had grown by 3.8 per cent in 2002-03, 8.5 per cent in 2003-04 and 7.5 per cent in 2004-05. The economy grew at 9.1 per cent in the first half of the current financial year.

With the revision, the GDP at constant prices stood at Rs 26,04,532 crore in 2005-06 from Rs 23,89,660 crore in 2004-05.

"It (the revised figures) augurs well for 2006-07. Although, I must caution we will have to see what will be its impact on growth figures this year as the base figures have been revised," Finance Minister P Chidambaram said after the Central Statistical Organisation released the figures.

The revision was primarily on account of higher growth in agriculture sector, which rose six per cent during 2005-06 as against the previous estimates of 3.9 per cent. Manufacturing growth was a shade better at 9.1 per cent as against the previous figure of 9 per cent.

Growth rates in construction has also been revised upward to 14.2 per cent. Similarly, insurance, financing, real estate and business services grew at a higher 10.9 per cent and transport and communication at 13.9 per cent in 2005-06.


----------



## Contrarian

*Bankers welcome RBI move; BPLR hikes possible*

MUMBAI: Bankers on Wednesday said the RBI Quarterly Monetary Review would trigger another round of interest rate hike even as they welcomed the measures to rein in inflation and push up growth.

The apex bank, in its third quarter review of its Annual Monetary Policy, hiked the repo rate by 0.25 per cent and increased provisioning in four segments.

"The RBI measures are well-balanced and not as worrisome as expected. Clearly, the need to curb inflation and ensure price stability were on top of the RBI's agenda," said Rana Kapoor, Yes Bank's Managing Director and CEO.

"A message has been sent that the RBI intends to tackle inflation decisively," V Vaidyanathan, Executive Director, ICICI Bank said.

Liquidity too could come under pressure, but enough would be available for deployment into productive sectors such as agriculture, SME segment, industry and infrastructure, they averred.

"The slight tightening visible presently is only to prevent credit flowing into unproductive sectors and speculative activities," said M B N Rao, Chairman and Managing Director, Canara Bank.

Following the repo rate hike, cost of funds will get higher for banks. "The RBI has conveyed its message in a direct manner," said P K Gupta, Chairman, United Bank of India.

Following an increase in provisioning norms, especially the commercial real estate, bankers said that loans would get costlier.

The increase in provisioning was expected, said K N Prithviraj, Chairman and Managing Director of Oriental Bank of Commerce, adding "it is a prudent move looking at the risks involved."

Mohan Shenoy, Treasurer, Kotak Mahindra Bank, however, described the increase from 1 to 2 per cent as "very steep" and that it would "discourage banks from lending in those particular sectors."

Bankers were unanimous that credit spreads for bank borrowings will go up, making deposit mobilisation crucial.

Banks are expected to take a re-look at their benchmark prime lending rates (BPLR) following the increase in provisioning in certain sensitive sectors and the 25 bps hike in the repo rate.

While Yes Bank will be hiking its BPLR by 50 bps effective from Thursday, ICICI Bank's Vaidyanathan said that several banks could follow suit. "ICICI Bank will study the impact of the policy before taking a call on its BPLR," he said.

Prithviraj, Gupta and Rao, all public sector bankers, however, said that raising of BPLRs would be an individual call of banks and that they felt no need to hike their rates immediately.


----------



## Contrarian

*Kamal Nath hails Tata-Corus deal
*
NEW DELHI: Union Commerce and Industry Minister Kamal Nath on Wednesday hailed the Tata's acquisition of Corus as a sign of India's economic strength.

Ã¢â¬ÅThe Tata's win reflects India's economic and fundamental strength,Ã¢â¬Â Nath said.

Earlier, Nath had said that the corporate deals should always be determined by business forces taking into account the best corporate practices and governments should not have much role in these business deals.

Nath has been vocally supportive of cross-border mergers and acquisitions, including Arcelor-Mittal and Vodafone.


----------



## Contrarian

*Corus is a moment of fulfillment for India: Ratan Tata*

MUMBAI: Exuberant after a thriller deal to acquire Anglo-Dutch steel giant Corus for 11.3 billion dollars, Tata Group chief Ratan Tata on Wednesday dubbed the victory as Ã¢â¬Åa moment of fulfillment for India.Ã¢â¬Â

Ã¢â¬ÅThis will prove to be a visionary move...,Ã¢â¬Â Tata told reporters within hours of Tata Steel making a winning bid of 608 pence a share for Corus to trump Brazilian CSN that would elevate the group company to the world's fifth largest steel entity.

At the same time, he took a dig at critics, saying: Ã¢â¬ÅWhen we launched the bid for Corus, many thought it was an audacious move, because an Indian company taking over an European company much larger in size has not happened before.Ã¢â¬Â

Tata Steel would become a global scale player with footprint in Europe to become Ã¢â¬Åthe fifth largest steelmaker in the world,Ã¢â¬Â while announcing that the present management would be retained and Corus would be integrated with Tata Steel.

This has demonstrated that India Inc can step outside of India in the international market as a global player, he said.

Ã¢â¬ÅI have always believed that if you want to become a global company, you have to dismiss your notion of being a single nationality," Tata said.

On Tata Steel share prices taking a hit on Wednesday, Ratan Tata said the market was Ã¢â¬Åtaking both a short-term and a harsh view. We often damn a company when it makes loss in a year...hopefully in future it (market) will look back and say it (acquisition) was a right move.Ã¢â¬Â

Tata Steel Managing Director B Muthuraman termed the acquisition as part of the company's strategic planning, saying it planned for greenfield capacity where raw materials were available, while looking for acquisitions where there was market like it did in taking over NatSteel and Millennium in Singapore and Thailand, respectively.

He agreed that nine times the EBIDTA margin quoted by Tata for Corus was a bit higher by industry standards, but the company would benefit from significant synergies although it would take three years to fructify.

The company was looking at a synergy of 300-350 million dollars a year, he added.


----------



## Contrarian

*We couldn't buy Tata, they bought us: Corus*

LONDON: Tata Steel's hard-fought, early Wednesday morning 6.2-billion-pound acquisition of Corus, the seven-year-old Anglo-Dutch company formerly known as the mighty British Steel, has created the world's fifth largest steelmaker, the second most global steel company and dramatically put India on the corporate world's takeover map.

It is the largest overseas acquisition by an Indian company ever. Decision-makers and opinion-makers in Western capitals said Tata's victory over its aggressive Brazilian rival CSN in the eight-hour auction for Corus was a sign of the times.

Both bidders for Corus belonged to countries classified as "emerging economies". Tata's final offer for Corus was 608 pence per share. CSN did not bid higher than 603 p.

The auction and Tata's victory was also a first, officials of the UK Takeover Panel told TOI because Tuesday night's format of a marathon nine rounds of continuous bidding was the first time a company has been auctioned in less than half a day.

On Wednesday, the admittedly sleep-deprived but exuberant Corus chairman Jim Leng told this paper his company's new owner represented the future.

"We couldn't buy Tata; Tata bought us...this is a global industry. We (Corus) couldn't lock ourselves in Europe, Tata couldn't lock itself in India. Tata wanted to go West, we wanted to go East. Tata has shown great foresight because it wants to be a global player", Leng said.

He said the deal was likely to be inked and the new merged entity a force in the global marketplace by mid-March.

TOI has learnt that the nine rounds of bidding, which Leng described as "going very smoothly...we were just observers... both parties behaved in an exemplary fashion", tailed off when CSN was unwilling to top its final offer of 603 pence per share.

The auction format laid out by the Takeover Panel allowed each company eight "fixed price" bids in eight rounds. The ninth and final round, however, allowed both bidders to offer a "formula price", ie a maximum reserve price. According to sources, CSN was unable to top Tata's 608p-per-share offer.

Unlike Indian ministers, European politicians refrained from public comment but said, sotto voce, that Tata's acquisition of a European steel champion underlined the soaring buying power of companies from India, one of the world's fastest growing economies.

Even as NRIs, including budding steel tycoon Aditya Mittal, Britain's prominent ennobled Indian businessmen Swaraj Paul and Ghulam Noon hailed Tata's triumph as a sign of "India really shining", steel experts in European capitals said the Tata buy-out finally underlined the significance of an 'India Poised' to fashion a new world order.

Patrick Flockhart of the influential trade journal 'Steel Business Briefing', said it was time to appreciate the irony that both the world's most global steel companies are owned by Indians, with Tata Corus following the consolidation and acquisition trail controversially blazed by Lakshmi Mittal when he merged with Arcelor last year.

Prophesying further acquisitions by a Tata joined to Corus, Flockhart added, "The steel industry is (still) very fragmented and I actually think this new company (Tata Corus) will actually go forward and make further acquisitions itself and there will be other consolidation elsewhere in the sector."

But steel experts said the Tata-Corus deal may, in some ways, be more significant by far than Mittal's Arcelor takeover because Tata is firmly Indian, based in India and "using Indian money" to pay for its goal of setting a global footprint.

Mittal's son Aditya told this paper the morning after Tata triumphed over CSN with a five-pence higher bid of 608 p per Corus share, "Congratulations to Tata Steel. This is an important milestone for India's globalisation and is a strong signal that Indian companies are ready to compete on a global arena. "

In an indication of the views of his father, who was out of London on Wednesday and unavailable for comment, Aditya added that "For the industry more broadly this is a very positive development and Arcelor Mittal has long been a champion in the benefits of consolidation for the industry as we believe it will help create a more sustainable industry".

R Seshasayee, president of the Confederation of Indian industry (CII) said Tata's triumph "is a statement of Indian industry's coming of age and takes our mergers and acquisition levels to a different paradigm. This is a testimony of the confidence and competence of Indian industry."

But London and European markets expressed deep surprise at Tata's final offer for Corus, which represents at least 30 per cent more than it had offered in October and allegedly "grossly overvalues" the company. Several steel experts told this paper (On Wednesday) "was it pride (that led Tata to pay this price) or something else?"

But Corus's Leng joined with Caparo Steel founder Lord Swaraj Paul to insist that Tata had done what it saw fit and paid the right price at the right time for the right goal.

Rationalised Leng, "When you buy a steel company, you buy an asset of 40 years or longer...Tata is resolved to build on growth, expectations and the next 10 or 20 years".

Added Paul, "What overpayment? It was only five pence more than your competitor (CSN) was prepared to pay. This is a global combination in a global market and I am delighted India is playing a role".

Meanwhile, in an indication Tata may have a rough ride in its newest, most ambitious, foray abroad, Britain's steelworkers' union Community, reacted to news of the buy-out with the grouchy assurance that it would oppose restructuring and job cuts tooth and nail.

Corus has nearly 30,000 workers in England and Wales and Leng, who significantly failed to rule out job cuts under Tata ownership, admitted "change always brings challenges...no company can give assurances there will be no cutbacks".

Even so, the mid-week shocker of a deal did not stop the City, London's financial district, from giving Corus shares their head on news that it had won the bitter three-month battle for the steelmaker. Even as Britain's benchmark share index fell into the red on Wednesday, with commodities losing ground on weaker oil and metal prices, Corus added as much as seven per cent to its hare value.

Martin Slaney, head of spread-betting at GFT Global Markets said the Tata deal "is obviously a dream result for Corus shareholders. There is no reason why this offer should not be accepted. This auction process, organized by the Takeover Panel in a rare attempt to bring the bid battle to an end, seems to have played right into Corus shareholders' hands."

Tata's takeover of Corus rockets the company to the top of the pile of key global players. Last year, it was ranked just 56th in the list of world steelmakers.


----------



## Contrarian

*Tata-Corus exemplifies aggressive Indian biz: PC*

NEW DELHI: Terming the Tata Group's successful bid for acquiring Anglo-Dutch steel company Corus as an example of aggressive Indian businesses, Finance Minister P Chidambaram on Wednesday said the government would be ready to help the industrial house to complete the deal.

Ã¢â¬ÅGovernment will be ready to help Tatas if they have any request to complete the transaction,Ã¢â¬Â the Finance Minister said, while briefing reporters in the Capital.

Ã¢â¬ÅAlthough Tatas have not made any requests so far, the government will consider providing every help, or help it in getting clearances, say from RBI or Sebi,Ã¢â¬Â he said.

Expressing happiness on Tatas clinching the deal, he said: Ã¢â¬ÅIt is a good example of aggressive, forward looking Indian businesses. We could have never expected such bids a few years ago.Ã¢â¬Â

Today, India Inc has the confidence to bid for businesses abroad, to raise funds for the purpose and manage the business.

Meanwhile, union steel minister Ram Vilas Paswan welcomed the acquisition of the Anglo-Dutch steelmaker Corus.

Ã¢â¬ÅThis acquisition is welcome news and it exhibits the growing importance of Indian steelmakers abroad. We hope they continue to consolidate the industry,Ã¢â¬Â Paswan said.


----------



## Contrarian

*S&P raises India's sovereign rating*

MUMBAI: International rating agency Standard and Poor's (S&P) on Tuesday finally acknowledged what everybody else across the world already seems to know. India is worth investing in.

S&P, which took 15 years to raise the country's sovereign rating from speculative to investment grade, said: "The upgrade reflects the country's strong economic prospects, external balance sheet, and its deep capital market, which supports a weak, but improving, fiscal position."

Moody's, another globally-known rating agency, raised India to investment grade in 2004; Fitch followed suit in August last year. S&P had downgraded India from investment grade in May 1991 when the country's foreign currency reserves had eroded to such an extent that it had just about enough to meet import bills for two weeks and was staring at a balance of payments crisis. The rating agency explained that it had considered India below investment grade until now because of the poor state of its public finances.

However, the combined fiscal deficit of the state and central governments at about 7.5% of GDP was still a tad too high for comfort, S&P added. Even now, total debt is equal to 85% of annual output and 35% of revenues are used to pay interest on loans.

The economic reforms flagged off in 1991 did address some of these issues but progress tapered off from the mid-nineties. It was only after 2000 that governments have managed to rein in profligacy and bring some order to borrowing and spending.

"Fiscal vulnerabilities are now being addressed structurally," Ping Chew, S&P's managing director of corporate and government ratings for Asia, said. "We are a little more sure that these (fiscal consolidation) trends are more entrenched, both from a policy and economic growth angle. It is only in the last few years that India's finances have been fixed," Chew said.

The Indian economy has grown at an average rate of over 8% in the past three years, fuelled by demand for goods and services from an increasingly affluent middle class and booming industry. S&P expects the $854 billion (latest IMF estimates) economy to become the third fastest growing in Asia Pacific this year. It is currently the fourth-largest behind Japan, China and Korea.

Global investment banker Goldman Sachs had last week raised its own forecast of India's growth. It now expects the country to grow at over 8% until at least 2020 and become the second largest economy, ahead of the US and behind China by 2050.

The upgrade in sovereign rating will boost India's chances to attract much needed investments into highways, ports, education and healthcare. The country has been a lucrative destination for portfolio investors who have poured in over $8 billion into Indian shares and bonds this financial year. The S&P re-rating will likely remove doubts in the minds of those investors who take credit rating as the last word.

For the record, S&P itself has been a keen investor in the fast-growing rating and advisory business in India for several years now. The agency, however, warns that the ratings on India remain constrained by the country's weak fiscal profile, especially its high government debt burden and deficit, which is still one of the worst among all rated sovereigns.

"Further rating improvements will depend on sustained prudent fiscal policy that leads to a decline in government debt and interest burden, and further reforms that lift the growth prospects and income levels," Chew said.


----------



## Contrarian

*Singapore shores closer for ICICI, SBI*

MUMBAI: Standard and Poor's upgrading India's rating to investment grade should give the country's trade pact with Singapore, and consequently, Indian banks' overseas expansion plans, a shot in the arm.

Plans of India's largest commercial bank State Bank of India (SBI) and private sector leader ICICI Bank, which were thwarted in their Singapore foray because the city-state has strict rating norms, will now get a boost. Applications of these banks for a QFB (qualified full banks) status were held up because the Monetary Authority of Singapore (MAS) requires the country rating from which the bank is applying to be investment grade. A QFB licence permits banks to access the retail market in Singapore. So far, India's 'speculative' rating was considered to be a major disqualification from these banks getting QFB status in Singapore.

SBI deputy managing director and group executive international banking S K Hariharan said that this was one of the criteria holding back SBI's upgrade to QFB. However, he refused to comment if this rating action would enable them to get the status. "This will definitely enable us bring down our cost of borrowing," added Hariharan.

A source said SBI was planning to sell bonds worth $1.5 billion in the international market in February.

SBI, managing director Tarashankar Bhattacharya said, "The rating action will give a fillip to both corporates' as well as banks' overseas borrowing programmes. Prior to the upgrade also we have seen corporates and banks accessing the overseas market in abundance. The investment grade status will now enable smaller banks and infrastructure companies to tap the overseas market."

Some analysts, however, shrugged off the news. "This is a peripheral event. The market had already factored in this upgrade and the borrowing rates have been reflecting this market perception. This will benefit the small and medium enterprises looking to tap the overseas market. The rating action will benefit corporates looking at raising debt in unconventional currencies like Malaysian Ringgit among others. It would also enable those foreign institutions whose investment decisions depend on sovereign ratings, in particular, pension funds in the US," said Abheek Barua, chief economist, ABN Amro Bank.


----------



## Contrarian

*Govt can cash in on improved rating*

NEW DELHI: Standard & Poor's rating upgrade for India Ã¢â¬â which puts it in the league of investment grade economies Ã¢â¬â is already raising hopes of a government float overseas.

While officials say, the rating upgrade, though belated, is unlikely to make the government issue bonds in foreign markets, bankers are of the opinion that it makes sense for the Centre to tap overseas investors now.

With investment grade rating, the government can hope not just to raise funds at cheaper coupons, but also see much more interest than what it would have received when the rating was lower.

"There are many funds which stipulate a minimum investment grade rating for investment. If India decides to tap overseas investors to meet a part of its borrowing requirements, it will get better interest than what it has ever received," said the treasury head at a state-owned bank.

"In fact, the yield on the Indian paper in the Singapore market has already went down by three to six basis points," said Rajiv Ahuja of Citi group. He said that upgradation of India in the investment grade would make many conservative institutional investors like pension funds Ã¢â¬â who were not investing in India's debt instrument because of its poor sovereign ratings Ã¢â¬â will now be able to invest.

Though Moody's and Fitch had already upgraded India to the investment grade, but many market players were waiting for the Standard and Poor's also to upgrade to invest in the Indian debt instruments.

The upgrade is also expected to result in the better run public sector companies, especially the Navratnas, rising a one-notch, which can encash the new found confidence to raise funds cheaper. Along with the change in sovereign ratings, S&P also upgraded Exim Bank, Power Finance Corporation and IRFC and brought it line with the sovereign rating.

A senior banker said that many banks are planning to raise long term debt from the international market. The S&P's decision would help banks to raise funds at the competitive rate. A source said that after the S&P's upgradation, the interest rate would fall by at least a quarter of a percentage point on the long term paper. "The market was already expecting this to happen post budget. But, this is a pleasant surprise for the Indian companies planning to raise funds abroad."

In the equity market also, a senior official of a foreign bank said, this would infuse confidence among the investors. "Till a country is not included in the investment grade by all the rating agencies, fund managers do not take risk to invest there because if the fund grows, it is good for him and the investor, but if something goes wrong, he is held liable," he said. "After this, it would lead to further increase the foreign fund flow in the Indian equity market," he added.

For the moment, however, S&P's decision is unlikely to have much impact on government's borrowings since bulk of the resources are generated in the domestic markets with banks subscribing to government securities.

While the S&P statement is bound to cheer up international investors Ã¢â¬â both institutional players (FIIs) as well as those investing directly (FDI) Ã¢â¬â the $3.2 billion ceiling on FII exposure to government securities would mean that the impact would be limited.

If the government decides to tap international markets, it will ease the pressure on liquidity in domestic markets, a good news to those fearing further hardening of interest rates.


----------



## Contrarian

*Indian dollar dreams may come true*

MUMBAI: Sure, Standard & Poor's decision to upgrade India to 'investment grade' must have reinforced the country's middle class' faith in the India Poised story. However, as the celebration comes to an end, many would be asking what does it means to an Indian citizen. What are the benefits one can expect from the new rating?

"On the citizens of this country, there will not be any direct impact," says AK Sridhar, chief investment officer, UTI mutual fund. "However, they will benefit indirectly from the changing perception about India. There will be more foreign investment coming into the country. Companies will be able to borrow funds overseas at finer rates."

Sanjiv Shah, executive director, Benchmark mutual fund, agrees. "This will alter companies' capability to borrow from abroad dramatically. It will have an impact on your portfolio."

That means, you will have more happy news coming from the stock market. More foreign inflows into the market would drive stock prices further up. "The new rating could lead to more foreign capital inflows into the stock market. It is crucial for countries and funds, which strictly go by the investment rating. It may bring in money from pension funds abroad," says a stock market analyst.

You could also indirectly benefit from the companies', especially the medium-sized ones', ability to raise money cheaper from the overseas market. "The rating would also help the not-so-well-known companies raise money cheaper. It would have an impact on their profit margins and investors would benefit from it," says the analyst.

Globe-trotters also have a reason to rejoice. The upgrade may boost the rupee's value against foreign currencies. That means, you can buy more with the Indian currency while you are travelling abroad. "More foreign inflows could lead to appreciation of the currency. A strong rupee is a mixed bag for investors, as it could hit companies which earn most of their revenues from abroad," says a fund manager.

Will it have any impact on the interest rates in the country? Most market players don't believe so. "The Reserve Bank is likely to consider the local scene before changing its monetary stance. Considering the present inflationary pressure in the economy, the RBI is likely to raise its policy rates further," says a money market dealer.


----------



## Janbaz

*Indian software, services exports may hit $75bn *

NEW DELHI: IndiaÃ¢â¬â¢s software and services exports could climb to $75 billion by 2010 if they keep growing at over 30 per cent annually, the industryÃ¢â¬â¢s top body said on Thursday.

The National Association of Software and Services Companies, or Nasscom, said it was sticking to its official forecast of achieving $60 billion in exports by 2010.

But Ã¢â¬Åif we continue to grow at these levels, that number can be much higherÃ¢â¬Â and would reach the top end of the groupÃ¢â¬â¢s forecast band of $60 billion to $75 billion by 2010, NASSCOM chairman Ramalinga Raju told reporters.

Last week, the group estimated software and service exports would grow by 32.6 per cent to over $31 billion for the fiscal ear ending in March 2007.

It said there was Ã¢â¬Åmore headroom for growth through large unaddressed areas and the possible unbundling of IT-BPO (business process outsourcing) mega-deals.Ã¢â¬Â

The latest exports assessment came as the group unveiled a report by global consultancy McKinsey which said Ã¢â¬Åoperational excellenceÃ¢â¬Â was crucial to India achieving its potential in the software and services offshoring.

The report entitled, Ã¢â¬ÅOperational Excellence: The Next Frontier in Offshoring,Ã¢â¬Â found that 80 per cent of customers are satisfied with the performance of their offshore units.

But the report said that improvements were needed to ensure continued high-level export growth and to cut costs.

Ã¢â¬ÅCustomers are highly satisfied with remote centres and as a result are ramping up operations in India (but) it is also clear that their expectations are rising,Ã¢â¬Â said Raju, releasing the report.

The industry needs to focus on improving performance and consistency across six areas including Ã¢â¬Åsolution design and training.Ã¢â¬Â

India holds over 50 per cent of the global market in offshore services but to stay ahead of the curve we have to keep raising the (performance) bar,Ã¢â¬Â said Nasscom president Kiran Karnik.

India has become the worldÃ¢â¬â¢s back office, as Western firms set up call centres, number-crunching and software development outlets.

Companies routinely cut costs by shifting their work to India to tap its pool of English-speaking, computer-savvy graduates at lower salaries than counterparts abroad.

The Indian information technology industry has grown its overall revenues 10-fold in the past decade to 47.8 billion in 2006-07 from just $4.8 billion 1997-98, NASSCOM has said.

The News.
http://thenews.jang.com.pk/daily_detail.asp?id=41188.


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## Janbaz

*India, Japan talk free trade *

NEW DELHI: India and Japan have launched a first round of discussions to lay down the groundwork for a comprehensive free trade deal within two years, Tokyo&#8217;s embassy said Thursday.

Three days of talks were to end on Friday and pave the way for lower tariffs and increased trade between the two countries that have drawn closer politically in recent years.

&#8220;There will be discussions on the framework of the negotiations, including the scope and modalities of the negotiations,&#8221; said a statement from the Japanese embassy.

&#8220;The participants will also exchange opinions on major areas for negotiations, such as trade in goods, trade in services and investment.&#8221;

Japanese deputy minister for foreign affairs Masaharu Kono and Indian commerce secretary Gopal Krishna Pillai were leading the talks, the statement said.

The negotiations follow an agreement in Tokyo in December between Indian Prime Minister Manmohan Singh and his Japanese counterpart Shinzo Abe to conclude free-trade talks within two years.

Abe has attached a top priority to forging closer ties with fellow democracy India to compensate for frequent tensions with China.

In a gesture of goodwill, Japan last June lifted a ban on the import of mangoes from India, a long-standing demand.

But bilateral trade between Japan and India hovers at only six billion dollars, tiny compared with the more than $170bn of trade between Japan and China.

The News.
http://thenews.jang.com.pk/daily_detail.asp?id=41191.


----------



## Neo

*Indian retail to exceed $22 bn by 2010: Assocham*
Friday, February 02, 2007 

Size of organised retail in India will exceed $22 billion by 2010 from the current level of $4 billion, says an industry report.

Requirement of space for the retail is also going to touch a whopping 220 million sq ft, according to the Associated Chambers of Commerce and Industry of India (Assocham).

Currently, within the organised retail sector about 40 million sq ft of space is generating a revenue of almost $4 billion.

The total size of retail in India is $16 billion of which 25 percent is in organised sector, the report said.

According to Assocham, smaller towns will experience a retail boom of 50-60 percent where over 1,000 malls are expected to come up due to availability of land and increase in purchasing capability of people.

However, growth level in metros will remain less than 30 percent, where 600 malls are in the pipeline, mainly due to scarcity of space.

'India's vast middle-class and its almost untapped retail industry are key attractions for global retail giants wanting to enter newer markets and India provides for the ideal locations,' said Assocham president Venugopal N. Dhoot.

According to the report, some of the key areas in which retail boom will prevail are food items, consumer goods, grocery, sportswear, outerwear, tailored clothing, eyewear, watches, footwear and accessories.

http://www.indiaenews.com/india/20070202/37930.htm


----------



## Contrarian

*NHPC, Bhel ink Rs 402-cr pact for Himachal project*

NEW DELHI: State-owned National Hydroelectric Power Corporation has roped in heavy engineering and equipment manufacturer Bhel for completing electrical and mechanical work of the 520 mw third stage of the Parbati hydel project in Kullu district of Himachal Pradesh.

The two firms have signed an agreement to this affect and the deal is worth Rs 402 crore. The package includes designing, manufacturing, transportation to site, handling erection, testing and commissioning of turbines, generators and other related and support equipment. The agreement was signed by NHPC executive director M K Raina, and his Bhel counterpart S C Vig.

The Parbati project is being executed by NHPC as a Central sector project at a cost of Rs. 2,304.56 crore and a debt-equity ratio of 70:30. The equity is being given by the Centre in the form of budgetary support and the balance amount is being arranged by NHPC from the market, financial institutions and internal resources.


----------



## Contrarian

*REL joins Tata Power in hunt for Indonesian coal*

NEW DELHI: Anil Ambani's Reliance Energy Ltd (REL) and Tata Power are going to slug it out to acquire a 30% stake in Bumi Resources, Indonesia's largest coal producer and exporter.

Anil Ambani's Reliance Energy Ltd (REL) and Tata Power are going to slug it out to acquire a 30% stake in Bumi Resources, Indonesia's largest coal producer and exporter.

And, they have to face competition from international players, including Mitsubishi Corporation, South Korean power company Kepco and a Glencore subsidiary.

Sources said the five players have been shortlisted for the final round of bidding where the reserve price has been fixed at close to $1 billion. REL decided to join the fray to fire its coal-powered electricity generation units.

At present, Reliance Energy Ltd imports around 1 million tonnes of coal for its 500 MW power plant at Dahanu in Maharashtra.

Besides, it needs the fuel for its 4,000 MW Shahpur project, which is a multi-fuel unit. But given problems with gas supply, it is looking at starting with a 2,000 mw coal plant.

In addition, like Tata Power, REL too aspires to get into the business of setting up 4,000 MW ultra-mega power plants and has lined up thermal projects in Uttar Pradesh and Orissa.

Sources said REL was looking at tying up supplies of 20 million tonnes of coal to meet its ambitions. "There are a lot of synergies and Reliance is very much in the race and is undertaking due diligence,"said a source.

Tata Power, which won the 4,000 mw Mundra project, is exploring the possibility of buying coal mines overseas. The company would need to import around 12 million tonnes of coal annually starting 2012 for the project.

Acquiring coal mines would help the companies in assured fuel supplies. Moreover, Indonesian coal has lower ash content and higher calorific value than Indian coal, resulting in higher power generation with less fuel.


----------



## Contrarian

*BCCL buys stake in SatNav Tech*

HYDERABAD: Bennett, Coleman & Co Ltd (BCCL) has acquired a stake in city-based SatNav Technologies, an IT products company that pioneered products in the areas of navigation, telematics and business infrastructure management.

SatNav aims to be India's largest and most successful IT products company, a space that it believes has great potential and has not been fully tapped by other players.

The Hyderabad-headquartered company was founded in 2000 under the Satyam Entrepreneur Incubation Programme focusing on both services and products.

In 2004, SatNav Technologies took over the products developed by Satyam Navigation and today is an independent venture run by ex-Satyamites.

Amit Prasad, founder MD & CEO, SatNav Technologies said: "While we are already having majority market share in all product areas, we will now focus on enhancing the volume of sales with better brand recognition."


----------



## Contrarian

*Dabur set to move out of non-core business*

NEW DELHI: Dabur Pharma has announced the sale of its non-oncology formulation business to Alembic for Rs 159 crore.

The annualised revenue of the division is Rs 80 crore. The move is in line with Dabur Pharma's strategy to focus on its core oncology business and exit other non-core businesses, says a company statement.

The non-oncology formulation business is mainly into high growth life style segments like cardiovascular, diabetic and gastrointestinal, gynaecology, with brands including Cycloset for the treatment of menorrhagia, Revas and Atecard for cardio-vascular disorders, Glisen for diabetes and Ulgel antacid.

The transaction is likely to be completed in about two months time. The business had net sales of Rs 62 crore for nine months ended December 31, 2006 and is expected to post sales of Rs 80 crore for the full year.

Over and above the consideration, the transaction will involve an additional networking capital of Rs 5-8 crore.

"While the non-oncology formulations have been a growing business for us, this divestiture would allow us to increase our focus and investment in building a world class global oncology business which we believe offers greater long-term value for Dabur Pharma's shareholders", said Anand Burman, chairman, Dabur Pharma.

Chirayu Amin, CMD Alembic Ltd said, "Alembic is augmenting its presence in the international as well as domestic pharma space. This strategic acquisition is to enhance our domestic market share by entering prospective therapy segments. Alembic will aggressively pursue its strategic goals through organic and inorganic initiatives in the near future."

"This acquisition will be funded through a combination of internal accruals and debt. Option of dilution of small equity is also not ruled out. We will be leveraging the company's strong financial position for fuelling further growth" said RK Baheti, director and president, finance.


----------



## Contrarian

*Kribhco sole applicant for container licence*

NEW DELHI: Railway minister Lalu Yadav may have less to crow about in this February's Railway Budget, with just one fresh application for a container licence trickling in on Wednesday, the last date for receipt of licence fees. This year, the Railways expected to rope in at least 14 new licencees.

According to sources, Kribhco is the sole applicant and has paid a licence fee of Rs 50 crore. No other firms applied, despite an extension of deadline from 5 pm to 11 pm.

When contacted, officer on Special Duty, Sudhir Kumar said the number of applications were still being counted. Kribhco's entry in the sector comes as much as a surpise as Reliance Industries Ltd (RIL) and shipping lines NYK and Mitsui's decision not to participate, admit Railway sources.

It is learnt that NMDC and Gammon India Ltd had also shown interest in securing a licence.

Last January, when rail-based container services were opened to private players, the Railways expected a flood of 25 applications but attracted just 14, earning Rs 540 crore in licence fees.

Sources say invitations to participate were sent to 300 firms, with roughly 70 of these, including RIL, GE Infrastructure Ltd, Shipping Corporation of India, Blue Dart Express Ltd, Gati Ltd and Zim Integrated Shipping Services Ltd, attending a meeting at Rail Bhavan,.

Experts point to two main reasons for the poor turnout. Capacity constraint remains a huge bottleneck. For example, Delhi-Mumbai, the most lucrative route, does an average of 8 freight trains/day, going up to a peak of 10 trains/day.

This can be stretched to an additional 5 trains/day, to be shared by 14 operators. Clearly, more players are neither welcome nor viable.

There is also a shortage of railway sidings for cargo loading and unloading and the building of this infrastructure by operators appears fraught with complexities.

The Railways reserving the right to restrict transportation of any commodity, (especially lucrative ones) at any time or charge substantially higher haulage rates from container operators is another disincentive.


----------



## Contrarian

*Big deal: It's business as usual at Tata hub*

MUMBAI: One would have expected some kind of hangover after all the celebrations at Bombay House on Wednesday. But inside the Edwardian building, headquarters to what is now India's largest business house, it was back to business as usual.

Ratan Tata and his team reported to work like they would on any other day, buzzing around the building with a lot of routine things to be attended to.

Given the kind of man hours and toil this deal has taken, one wouldn't have been surprised if Tata and the core team members had taken a day off.

But in true Tata tradition, everybody, including the big boys Noshir Soonawala and Ishaat Hussain, among others, were at work to pick up from where they had left off before the deadline for the deal drew closer.

As is usually the wont, there has been no talk of any party or distribution of sweets to mark the victory.

To an outsider, unaware of Wednesday's developments, Bombay House looked its usual self-calm, efficient and sober.

Although, Tata admitted the team had been very emotional at the Taj Presidential Suite once the Takeover Panel announced the winner, since the press conference on Wednesday he has gone back to his reserved self.

There was a flood of steady visitors, well-wishers, bouquets, phone calls, emails and text messages to congratulate the Tata team on their conquest.

Ratan Tata and Soonawala were in a closed door meeting for the better half of the day, while Hussain attended the Bombay Stock Exchange board meeting. Arun Gandhi, the deal maker, is expected to be back in office on Thursday.

Insiders say the next step in the deal will be getting all the legalities, paperwork and details ironed out.

The daunting task in front of Tata is to get approval from Corus' shareholders as well as get a go ahead from the London court.

Analysts say Tata will face challenges in integrating both businesses specially since there will be considerable differences due to the nationality, work culture and style of operation.

For the moment though, there has been no direct communication from the chairman's office regarding the acquisition. But Tata employees, right down to the security personnel manning the gates, seem to have a spring in their steps.


----------



## Contrarian

*Indian bankers rue lost chance*

MUMBAI: As the dust begins to settle on the Tata-Corus deal, Indian bankers are asking themselves whether they have lost an opportunity to structure the mega deal.

European investment banks-Deutsche Bank, Rothschild, ABN Amro Bank and Credit Suisse Group-were the lead bankers to the Tata Group in its effort to acquire the $12 billion Corus steel plant.

The country's largest public sector bank State Bank of India and private sector major ICICI Bank managed to play a small role in the loan syndication process.

"This was largely to protect the reputation of Indian banks,"a source said.Domestic banks are at a clear disadvantage when it comes to funding large-ticket acquisitions.

"Indian banks are equally capable. However, foreign banks have a good understanding of the global industry. And access to the global capital pool gives us an advantage,"said Gunit Chadha, chief executive officer and managing director, Deutsche Bank India.

The disadvantage, say bankers, is largely on account of the comparatively smaller balance sheet size, lack of experience, and limited global presence.

However, these banks are actively funding small acquisitions, which could increase from $1 billion to $1.5 billion.

Tata Steel, vice-president finance, Koushik Chatterjee, who is organising finance for his company's Corus acquisition, said foreign banks were preferred to the Indian counterparts because of their global presence, particularly in key markets like the US and Europe.

According to him, foreign banks understand investors' requirements and have the expertise to raise funds at competitive rates.

"Indian banks have to become global to compete with foreign banks."Chatterjee is in the midst of tying up around $10 billion to finance the acquisition.

But there are some other issues to consider as well. "In the current deal, the Tata Group was predominantly looking for foreign currency funding and the debt was raised at a very fine rate, which was not attractive to us,"said Tarashankar Bhattacharya, managing director of State Bank of India.

Typically, most Indian banks by regulation do not overexpose themselves to one particular group. The size of the Tata-Corus deal at $13 billion (Rs 54,000 crore) is considered too big for any Indian bank to fund.

The balance sheet size of SBI-India's largest bank-is $156 billion. Yet, it is not even among the top 100 banks in the world. It ranks 70th among banks in Asia.

O P Bhatt, chairman, State Bank of India in his earlier interaction with the media had said, "Indian banks have to acquire balance sheet size in order to enable them to finance huge overseas deals worth billions of dollars."

Despite being the largest bank in the country, SBI was involved in only 10% of deals in the international market, he added.


----------



## Contrarian

*Takeover sets new benchmark for cos
*
MUMBAI: Even though investors gave a thumbs down to the price Tata Steel agreed to pay for acquiring Corus, there's good news.

The $12 billion that the Tatas will fork out is more likely to set a new benchmark for valuing steel companies, especially Indian companies.

Even since Mittal Steel acquired Arcelor, valuations of steel companies have risen by about 40%. But that was before the Tata-Corus deal.

Mittal valued Arcelor 5.8 times the latter's gross earnings (EBITDA: Earnings before interest, taxes, depreciation and amortisation), whereas Tatas have valued Corus at about 9 times its EBIDTA.

Steel sector analysts said currently Indian steel companies are valued at about 4-5 times their respective gross earnings, while European companies enjoy around 6-7 times the same figure.

Now with the Tata deal that involves Indian and European steel makers, these valuations are set to change. The fact that most Indian companies are integrated steel players will serve to augment these numbers.

For example, according to a sector analyst, at present Steel Authority of India (SAIL) has a market capitalisation of about Rs 46,000 crore and cash flows of about Rs 10,000 crore.

With nearly zero-debt and expected gross earnings a little over Rs 10,000 crore this financial year, its enterprise value comes to about Rs 36,000 crore.

This represents a multiple of a little over 3.5 times its gross earnings. In the changed scenario of upgraded benchmark valuation, companies like SAIL could see their market capitalisation soar.

Much the same can be said of other Indian steel companies like Essar Steel and Jindal Stainless, analysts pointed out.

Fuelling this valuation frenzy, they say, is the current trend of consolidation across the highly fragment steel business in the world.

The top five players control only 20% of global steel production. This creates some disadvantages for steel companies.
One, the lack of economies of scale. And two, the absence of bargaining power.

To stay in the game and iron out these deficiencies out of their system, steel companies will necessarily have to look at adding additional capacities.

This was the logic that LN Mittal deployed while mounting a bid for Arcelor.

The argument is true for Indian steel companies too. Either they will gobble other entities, or they will have to be gobbled up. In either which case, it is the investor in those companies that stand to gain.


----------



## Contrarian

*Will drop in steel prices spoil party?*

MUMBAI: Consider the facts. In the last eighteen months, global prices of steel have come off their top.

On the other hand, valuation of steel assets have been increasing rapidly after a wave of global consolidation in the last decade by players like Mittal Steel and Arcelor.

Tata Steel paid a substantial premium over the last big deal in the steel sector to acquire Anglo-Dutch company Corus.

Now, what will happen if global prices of steel were to weaken?

For over a year now, analysts have been saying that the steel price cycle has held out for far too long and prices of the commodity will soften after China slow downs its consumption, post-2008 Olympics.

In mid-2005, when the Chinese government decided to clampdown on steel imports to cool off the volatile market, steel prices tumbled and affected even Tata Steel's profitability.

Now, a recent report by Mumbai-based broking firm First Global has recommended investors to "sell"Tata Steel shares, branding it a long-term underperformer. The report argues that should steel prices fall $50-75 by next year, Corus will end up making a loss.

Tata Steel officials, for their part, say that they have factored several scenarios into the price they have finally paid for Corus. Say Koushik Chatterjee, vice president (finance) of Tata Steel: "We have taken into account possible steel price changes, geographical and product mix possibilities and funding alternatives while bidding for the deal. We are optimistic we can extract benefits from the acquisition in different scenarios."

The First Global report says that in cyclical industries, whether it is shipping or steel, the time to buy assets in when the cycle is at a low, when assets are unloved, distressed.

In the last decade, that was how L N Mittal built his steel empire. Also, the type of businesses to be leveraged to the hilt, are the ones with steady and predictable, if unexciting cash flows.

The report points out that in the Tata-Corus deal, both these basic tenets have been turned in their head. "The deal combines high business risk with high financial risk."

Says First Global's Devina Mehra: "If you look at Tata Steel's ten year earnings data, it is all over the place. Even five years ago, it was struggling to make a decent return on equity. When their earnings are linked so much to steel prices, we feel that they have over stretched themselves."

As recently as 2002, when steel prices had hit a global low, Tata Steel's profit margin had fallen below 5%.

When Mittal Steel was picking up global assets, Tata Steel did not even want to invest in a large expansion plan fearing a drop in earnings.

Tata Steel plans to fund its Corus acquisition by raising debt through a newly-formed, wholly-owned subsidiary.


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## Contrarian

*Been there, done that*

MUMBAI: In the mid-eighties, after beating the Japanese small-truck invasion in its backyard with its home-made 407 model, Tata Motors made a proposal to General Motors.

The pitch was around supplying trucks to the American auto giant. After listening to the proposal, the chief designer at GM told Arun Maira, then an executive with Tata Motors, who went on to head Boston Consulting Group's practice in India, "Young man, if a prize has to be given for audacity, it has to be given to you."

That was pretty much what everyone thought of Tata Steel's bid for Anglo-Dutch steelmaker Corus. When it purchased the company at 34% over the $8 billion it initially offered, eyebrows were raised. But the men behind the deal were oblivious to such reaction.

"In school, if you have been doing your homework well for a whole year, would you not feel confident at the exams? We had done our homework for about two years before we went into this deal,"Koushik Chatterjee, the group's finance wizard, who was handpicked by Ratan Tata, told TOI.

The thorough homework gave the group the guts to mount a bid and the bankers the comfort to open up their purses. Yes Bank CEO Rana Kapoor, who, as a banker with Rabo Bank, had helped Tata Tea raise funds for Tetley in the group's first derring-do, says the situation was similar then.

"When Tata Tea bought Tetley in 2000 it paid 300 million pounds more than what it offered in its first attempt in 1995. The Tata Tea stock crashed. I see a lot of parallels here,"Kapoor said.

In a way, the Tetley deal was even more daring than the Corus deal because it was done at a time when bankers were not comfortable with lending huge money to Indian companies. Also, the structure was a fairly complicated one.

The leveraging in the Corus buy is only 2:1 compared to 3.5:1 in the Tetley deal, which at that time was the largest acquisition in India.

Chatterjee declined to elaborate much on what gave the group the gumption to make such a large bid for Corus. But analysts point out, seven years ago, Tata Sons wasn't as cash rich as it is right now.

And the group's software jewel TCS wasn't as big as it is now. Things are different now and both of these entities can be leveraged to raise funds. That must have certainly imparted a sense of confidence to Tata Steel.

"TCS is a money-spinning machine. The Tatas ability to monetise stock is immense,"Kapoor said, remembering the high level of apprehension that prevailed in 2000. But Chatterjee added that Tata Steel has always been a conservative company. "Prudence is a very important part of finance at Tata Steel,"he said.


----------



## Contrarian

*Fidelity seeks regulatory clearances*

MUMBAI: Global asset management giant Fidelity is willing to give Indian investors the chance to diversify their portfolio with a sprinkling of foreign mutual funds, but absence of a clear regulatory guideline is an impediment.

"Fidelity's Indian mutual fund arm has already applied to the market regulator for launching a feeder fund,"Richard Wastcoat, MD, Fidelity Investments International said.

At present Indian mutual fund industry is allowed to invest upto $3 billion abroad, with each fund house having individual limits within this overall limit.

There's another rule, by RBI, the country's central banker, that allows an individual to invest upto $50,000 per annum in shares, properties and other assets in markets outside India.

Fidelity is awaiting for a clear regulatory framework that would allow Indians to invest this $50,000 in MF schemes that have been floated abroad.

At present, Fidelity's presence is spread across markets that account for about 95% of the world's combined market capitalisation, officials said.

"For the Indian market, Fidelity's current business plan is to continue to launch more products and also to educate investors,"Wastcoat said.

Fidelity's top official said it was heartening to see that there was a growing trend towards equity ownership in the country.


----------



## Contrarian

*Rupee touches one-year high in early trade*

MUMBAI: Buoyed by a strong rally on equity markets coupled with Dollar's weakness overseas, the Rupee on Friday touched one-year high of 44.10/11 a dollar during early trade.

In lacklustre activity at the interbank foreign exchange (Forex) market, the Indian currency resumed strong at 44.11/13 per dollar from Wednesday's close of 44.19/20 per dollar and later moved up to 44.10/11 a dollar in late morning deals.

The Rupee drew support from the weakness in Dollar against the Euro and the Yen on Thursday, forex dealers said.

A sharp rally in the benchmark Sensex, which jumped by 142 points to a new peak of 14,409.59 during morning trading also extended strength to the Indian unit.

Activity was however, at a low ebb during early trade in the absence of any dollar buying or selling, a forex dealer commented.


----------



## Contrarian

*Sensex, Nifty zoom, close at all-time high*

Sensex and Nifty closed at an all-time high, tracking intense buying across index pivotals. Firm global markets on back of US Federal Reserve's decision to keep interest rates steady, also boosted the bourses.

Capital goods, consumer durables, IT and pharma stocks led the rally. Banking sector was most volatile during the intra-day trade.

A lot of shares struck all-time highs buoyed by strong results.

The 30-shares BSE Sensex finished 136.59 points or 0.96 per cent higher, at 14,403.77, an all-time closing high. It had opened at 14,293.11, and had gone on to attain an all-time high of 14, 462.77.

The S&P CNX Nifty rose 46.30 points or 1.12 per cent at 4183.50, an all-time closing high. It had surged to an all-time high, 4,198.70, in intra-day trading.

The market-breadth was strong, as buying for small-cap and mid-cap stocks heightened. For 1,396 shares advanced, 1274 declined. A total of 52 remained unchanged.

Analysts expect the action to stay in this space, outperforming large-cap peers on account of robust results.

The total turnover on BSE amounted to a healthy Rs 5433 crore, as compared to Rs 4012 crore on Thursday.

The wholesale price index rose 6.11 per cent in the 12 months to January 20, 2007, higher than the previous week's annual rise of 5.95 per cent due to a rise in prices of manufactured products and foods, data showed on Friday.

Among the 30-Sensex pack, 27 advanced while the rest declined.

Among the sectoral indices, capital good stocks surged 2.46 per cent, telecom stocks jumped 2.04 per cent, consumer durable stocks climbed 1.90 per cent and pharma stocks advanced 0.92 per cent while PSU stocks fell 0.82 per cent and oil and gas stocks were down 0.20 per cent.

The major market movers on Sensex were Bharti Airtel which gained 5.16 per cent to Rs 769.40; L&T rose 4.58 per cent to Rs 1,674.05; HDFC rose 4.04 per cent to Rs 1,740; Satyam jumped up 3.87 per cent to Rs 492.50 and Reliance Communications rose 3.63 per cent to 491.

VSNL, Bharti Airtel, L&T, Zee Entertainment and Suzlon Energy were the major gainers in the NSE.


----------



## Contrarian

*India is now an Asian financial hub*

MUMBAI: A few months ago, a senior British investment banker, came in search of Indian businesses that companies back home could buy.

As part of the British trade delegation, he was introduced to a few prospective companies by a senior executive from management firm Boston Consultancy Group.

After some polite conversation, the Indian executives took the banker aside only to be asked if they could buy the British company instead.

Says Enam Financial Vallabh Bhansali: "India might in the global financial market is rising by the day. Big ticket deals by Indian companies abroad is only a part of the process in India's growing importance."

Already, India's fast growth is attracting a disproportionate share of the emerging markets fund flows. India received nearly half the investments that flowed into top eight emerging markets tracked by Morgan Stanley, an increase of 80% over the previous year.

In the first half of 2006 alone, India witnessed M&A deals collectively valued at $25.6 billion.

Grant Thorton, a research firm, found that India was the fourth hottest destination for deals in the IT space in the Asian region.

These numbers, however, hide a larger story - India's growing importance as a regional financial hub.

For lack of banking reforms and currency convertibility, India is still not considered a global financial destination.
Despite having a robust capital market in the Asian region, next only in size to Hong Kong, does not help.

It still lags far behind Hong Kong and Singapore in the region which attract global capital to pass through its financial markets more easily.

Large financial firms find it attractive and easier to base their regional headquarters in Singapore.

Veterans like DSP Merill Lynch Hemendra Kothari already see the first signs of a change. They feel that India's importance is slowly growing in the financial markets and there are changes in store in the near future.

Kothari argues that as more and more big ticket deals are executed by Indian companies abroad, it will become imperative for the global financial firms to set up their own offices in the country. Last year, seeing the opportunity, Goldman Sachs split up with its long time partner Kotak, to go on its own.

Merrill Lynch paid an hefty premium to buyout most of Kothari's stake in the ir joint venture company. Says Kothari: "There is a big growth coming for financial services business in India. Deal sizes will get bigger and bigger and so will profitability of the players."

To grab the opportunity, India has already a few advantages. It's banking system is better regulated and transparent than China. In the run upto convertibility, the rupee is far less controlled than the Chinese yuan.

With the Indian industry straining to establish a global footprint, mega acquisition deals oversas by local companies will only hasten India's position as a financial hub.


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## Neo

*India to invest in Myanmar port *

NEW DELHI: New Delhi will invest $130 million to develop MyanmarÃ¢â¬â¢s Sittwe port that will give IndiaÃ¢â¬â¢s landlocked northeast access to a new trade route to South East Asia, an Indian official said on Friday.

Ã¢â¬ÅWe signed an initial agreement recently and we will begin the project as soon as the (Indian) cabinet gives approval,Ã¢â¬Â said the senior official who declined to be named.

Ã¢â¬ÅThe proposal will be put up to the cabinet this month. Once cleared it will take about three to four years for the project to be completed,Ã¢â¬Â he said.

The port project would mark the latest cooperation venture between New Delhi and military-ruled Mynammar.

India has been keen to develop closer links with Myanmar, formerly known as Burma, because of its huge reserves of gas and proximity to South East Asia.

The port will allow cargo vessels from IndiaÃ¢â¬â¢s landlocked northeastern Mizoram state to navigate the Kaladan River to Sittwe, which sits on the edge of the Bay of Bengal. 

Ã¢â¬ÅThe project involves the development of roads, waterways and the Sittwe port,Ã¢â¬Â the official said.

Ã¢â¬ÅThe aim is to obtain an alternate transit route for products from IndiaÃ¢â¬â¢s northeast to South East Asian markets, as Bangladesh has not yet allowed India transit facilities.Ã¢â¬Â

New Delhi has repeatedly asked Bangladesh for an overland route but many rounds of talks between the two neighbours have yielded no results. Energy-starved India is seeking new sources of fuel to propel its booming economy.

http://www.thenews.com.pk/daily_detail.asp?id=41305


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## Neo

Last Updated: Saturday, 3 February 2007

*India aims to end poverty by 2040 * 

The poorest in India often lack the most basic facilities 
India's finance minister has said poverty is fast declining in the country and could be wiped out by 2040. 
In a BBC interview, Palaniappan Chidambaram attributed this to the fast pace of India's economic growth. 

"People will have homes, work, food, clothing, access to education and medical care," Mr Chidambaram said. 

But he also said that some 25% of all Indians - or more than 250 million people - were still living in "abject poverty", earning less than $1 a day. 

Mr Palaniappan told the BBC World Service Newshour programme that poverty "will continue to decline" in India. 

Affluence is more apparent in the country these days 

"The faster we grow and the more inclusive that growth is, the decline in poverty will be rapid. 

"I'm confident we can wipe out poverty by 2040." 

Mr Palaniappan admitted that the rapid economic growth in India in recent years could have widened the gap between the richest and the poorest in the country. 

But he said that "at the same time those at the bottom of the pyramid have seen improvement in their lives". 

The minister also said more should be done to combat relatively low life expectancy rates and high mortality rates. 

India has become a world economic power, with growth over the past three years averaging 8% - a rate approaching that of its booming neighbour, China. 

Based on purchasing power parity, it is now the world's fourth largest economy. 

However, income per head in India today is just $720 (ÃÂ£365) a year. 

India's low costs and huge, English-speaking, workforce have made it popular with multinationals for work including manufacturing and call centres. 

http://news.bbc.co.uk/2/hi/south_asia/6326629.stm


----------



## Neo

February 06, 2007 
*Indian airlines suffer $400m loss*

MUMBAI, Feb 5: IndiaÃ¢â¬â¢s airlines lost $400 million in the nine months ended December 2006 as high fuel and aircraft purchase costs hit carriers, and more trouble is ahead, aviation executives said on Monday.

At least half a dozen carriers, including budget airlines, have taken flight in the past three years in IndiaÃ¢â¬â¢s skies, dominated by two state-run companies less than a decade earlier.

But profits have been hard to come by for most, and many could fold, leading private airline Jet Airways told a two-day South Asia aviation finance conference in Mumbai.

Ã¢â¬ÅThe industry is seeing temporary over capacity but will have to charge more to cover costs,Ã¢â¬Â said Wolfgang Prock-Shauer, chief executive officer with Jet Airways.

Ã¢â¬ÅThe weaker airlines will exit the industry,Ã¢â¬Â he said.

Executives and analysts at the conference forecast sharp growth for IndiaÃ¢â¬â¢s aviation sector but stressed that financial and infrastructure problems would hamper growth.

Indian air passenger traffic is tipped to grow to 50 or 60 million by 2010, from around 25 million now, as a booming economy boosts wages in the country of more than one billion people.

With the industry set to grow further, most private airlines have committed millions of dollars to buy aircraft from US-based Boeing and European-based Airbus Industrie, a trend which is expected to continue.

Boeing expects IndiaÃ¢â¬â¢s requirements over the next two decades at 856 planes to be worth $72 billion, according to an executive with the company in India.

Airbus has forecast India will order 1,100 planes over the next two decades.

Analysts said demand for seats in the new planes would keep pace.

Ã¢â¬ÅLooking at current GDP growth forecasts, air traffic growth is likely to be well above 20 per cent each year,Ã¢â¬Â said Praveen Vetrivel, analyst with research firm International Bureau of Aviation.

Among the carriers, Jet Airways has a 30 per cent market share, followed by state-owned Indian with 21 per cent, 19 per cent for budget carrier Air Deccan and nine per cent each for Kingfisher and Air Sahara.

Low-cost carriers like SpiceJet, GoAir, IndiGo, Jagson and Paramount fight for the remaining 14 per cent share.But the airports and services for passengers have lagged behind this growth, forcing airlines to fly an additional 10 minutes due to air traffic congestion at Mumbai, Delhi and Bangalore, resulting in higher fuel consumption.

Ã¢â¬ÅThis factor alone accounts for a loss of $80 million annually,Ã¢â¬Â Prock-Shauer said.

Still, leading aviation companies are flocking to India, with more than 500 expected to hold displays at a five-day Aero India show starting on Wednesday in the southern hi-tech hub of Bangalore.Ã¢â¬â

http://www.dawn.com/2007/02/06/ebr17.htm


----------



## Neo

Tuesday, February 06, 2007 

*India&#8217;s 06/07 GDP growth seen at 8.6&#37; *:thumbsup:

NEW DELHI: India&#8217;s economy is expected to grow 8.6 percent in the financial year ending in March, at the lower end of central bank&#8217;s forecast, a Reuters poll of analysts shows.

The government will issue its first official growth estimate for 2006/07 on Wednesday, one week after it revised growth for 2005/06 up to 9.0 percent from 8.4 percent.

&#8220;Growth is very strong. On top of 9 percent, we are getting another year of more than 8 percent growth showing demand is still strong. I expect the trend to continue,&#8221; said Riyaz Khan, economist with think-tank Centre for Monitoring Indian Economy. Growth in Asia&#8217;s fourth-largest economy has averaged 8.3 percent over the past three fiscal years.

Last week, the Reserve Bank of India said it expected growth of 8.5 to 9.0 percent in 2006/07, while Finance Minister Palaniappan Chidambaram has said growth could be close to 9 percent.

India&#8217;s economic momentum has strained infrastructure and led to a squeeze on capacity that has added to inflation pressures. The central bank raised its key lending rate last week to 7.50 percent, a four-year high, following four rate rises in 2006.

Most analysts expect manufacturing to grow more than 9 percent in 2006/07, while services are seen growing close to 10 percent.

Farming, which accounts for a fifth of GDP but employs about 60 percent of the population, remains the laggard and is expected to grow around 3.0 percent.

Prime Minister Manmohan Singh has said farm output must grow by close to 4 percent on a sustained basis to ensure GDP increases by 7.0-8.0 percent annually over the next few years. 

Singh&#8217;s government has pledged massive investment in farm infrastructure to improve irrigation and lessen the impact of poor monsoon rains on agriculture. The annual GDP forecast is due on Wednesday.

http://www.dailytimes.com.pk/default.asp?page=2007\02\06\story_6-2-2007_pg5_21


----------



## Neo

*India raises full-year growth forecast to 9.2pc *

NEW DELHI (updated on: February 07, 2007, 18:16 PST): India sharply raised its full-year growth forecast to 9.2 percent on Wednesday, from an estimate of above eight percent at the start of the year, on a surge in demand for services and manufactured goods.

The government's latest advance estimate for the year ending March 2007, the fastest rate in nearly two decades, comes after the central bank last month raised its full-year forecast to 8.5-9.0 percent, from above eight percent.

"The growth is driven by a combination of the investment demand and consumption demand," said Saumitra Choudhuri, chief economist with ICRA, a credit rating agency.

"So there is capacity creation which makes the growth robust. Growth may drop marginally (in the future) but not to the levels of six or seven percent seen earlier," he said.

Following the data, the chief economic adviser to the finance ministry said there was concern about the pace of growth and its impact on prices.

"It is not overheating yet, but it can overheat if the economy is not managed well and we will take steps to avoid such a situation," said Ashok Lahiri.

India's economy grew 9.1 percent in the first half of the current fiscal year to September and the country is second only to China, at 10.7 percent in 2006, in growth rates among major world economies.

The 30-share Mumbai stock exchange Sensex rose 164.94 points or 1.14 percent to a record close of 14,643.13 Wednesday following the news, beating the previous high of 14,515.9 set only Monday.

The Sensex also hit a new intraday high of 14,663.26 Wednesday.

India's Central Statistical Office makes regular revisions to leading economic indicators and forecasts such as inflation, growth and trade as changes in the fast-growing economy lead to updated data.

However, the changes lag private forecasts by economists from banks and thinktanks, many of which upgraded economic growth estimates last year.

Last week, the Central Statistical Office revised its estimate for the year to March 2006 from 8.4 percent to a much faster 9.0 percent, with the figures changing sharply as the true strength of the economy was measured.

Indian Prime Minister Manmohan Singh has set a 10 percent growth target but in December admitted that an ailing rural economy and inadequate public services hurt efforts towards achieving that goal.

Rising inflation, too, has been a source of worry for the government.

Last week, Singh said combating inflation -- which inched close to a two-year-high of 6.11 percent mid-January -- was a priority for his government.

India's central bank has said it is comfortable with annual inflation between 5.0 and 5.5 percent, and has been using a variety of tools such as interest rate hikes and higher bank cash reserves to fight rising prices since it began a tightening cycle in late 2004.

The government has cut customs duties on cooking oil, cement and other products in a bid to lower prices for such basics, but analysts expect such efforts will take time to work.

Rising prices of food, textiles, metal and paper spurred the headline inflation figure back above the six percent mark as of January 20, caused by what the central bank said earlier was an overheating economy.

"High inflation is always associated with high rates of growth. So we have to be very vigilant and try to minimise inflation," said Choudhuri of ICRA.

India's Congress-led government is mindful that rising costs can be political dynamite, particularly for an administration that came to power in May 2004 on a platform of helping improve standards for India's poor masses.

http://www.brecorder.com/


----------



## Neo

*Suzuki to spend $1bn in India *

MANESAR, India: Japanese compact car maker Suzuki Motor Corp will invest a further 200 billion yen ($1.66 billion) in its Indian venture as it expands capacity at car and engine plants, its chairman said on Tuesday. 

Already, 100 billion yen has been invested in the plants run by Maruti Udyog Ltd and another 200 billion yen will be spent by 2010, taking total capacity to 1 million cars a year from 630,000 now, Osamu Suzuki said. 

Maruti, which is majority-owned by Suzuki, on Tuesday opened its fourth car plant in Haryana state, near New Delhi which will have an initial annual capacity of 100,000 units. 

That will be expanded to 300,000 units by 2010. Ã¢â¬ÅSuzuki made a commitment to India at a time when it was not fashionable to invest in India,Ã¢â¬Â Maruti Udyog Managing Director Jagdish Khattar told reporters. 

Ã¢â¬ÅThis new plant marks the most important milestone in our partnership.Ã¢â¬Â Maruti had earlier said total investment in new plants and new cars would top Rs90 billion ($2.04 billion) by 2010. 

Maruti will make its popular Swift hatchback at the new plant, which can roll out a car every 50 seconds. A new export model, scheduled to be launched in 2008/09, will also be made at the plant, located in a 600-acre campus that will also house vendors and a research and development facility. 

A diesel engine and transmission plant, which was also inaugurated on Tuesday at the same location, will start with an output of 100,000 units and reach 300,000 over the same period. Ã¢â¬ÅWe have entered the diesel segment with a very competitively-priced product,Ã¢â¬Â Khattar said. Ã¢â¬ÅWe think it will help us a great deal.Ã¢â¬Â

Maruti, which has nearly half of IndiaÃ¢â¬â¢s market of mostly small cars, is offering two variants of the Swift with a 1.3-litre Fiat multijet engine.

http://www.thenews.com.pk/daily_detail.asp?id=41792


----------



## Neo

Wednesday, February 07, 2007 

*India to face decline in farm output*

By Iftikhar Gilani

NEW DELHI: India is poised for another year of declining food production that will further push up prices of cereals and edible oils for the second consecutive year as the government has admitted a drop in their production in the second advanced official estimates for 2006-07 released here on Tuesday.

The total cereal production is estimated to be 194.65 million tonnes, nearly half a million tonnes less than the final estimates for 2005-06. It may actually go down much further as the estimates of wheat production included in the calculations do not take into account the hot spell that made the agriculture secretary sound alarm bells of low outputs.

The official estimates still show wheat production going up from 69.35 million tonnes in 2005-06 to 72.5 million tonnes in 2006-07. The government has, in fact, tried to paint a rosy picture of the total foodgrain production going up as compared with last year, by adding up figures for lentils in which India is always surplus. The estimate of 209.17 million tonnes, however, is still just 580,000 tonnes more than the final estimates of 2005-06. Much worse is the edible oil scenario as the oilseed production is estimated to fall by 4.38 million tonnes -- from 27.98 million tonnes in 2005-06 to 23.6 million tonnes this fiscal, mainly because of the sharp decline of 3.5 million tonnes in groundnut. Rice production is also down from 91.79 million tonnes last year to 90.13 million tonnes while the coarse cereals also recorded a drop from 34.06 million tonnes to 32.02 million tonnes during the period. The story is other way round when it comes to cash crops as the official estimates show a big jump in sugarcane production from 281.172 million tonnes in 2004-06 to 315.528 million tonnes while cotton production is also estimated to go up from 18.5 to 20.964 million bales this year. Jute production is also up from 10.84 to 11.39 million bales. 

Critics say the government cannot take comfort by adding up lentils, whose production is estimated to go up from 13.39 million tonnes to 14.52 million tonnes, to show a slight increase in total foodgrain production as they point out that prices of lentils had skyrocketed last year despite high production and, moreover, the reality will bite further if the government's wheat estimates go awry because of the hot spell.

http://www.dailytimes.com.pk/default.asp?page=2007\02\07\story_7-2-2007_pg5_12


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## Neo

Friday, 9 February 2007

*First-time flyers trouble India * 

Flying is a new experience for many Indians 
Inexperienced flyers are causing a few headaches for India's budget airlines, with one carrier reporting a passenger trying to open a door mid-flight. 
India's rapid economic growth has made air travel an option for many more people, as a host of new airlines have taken to the skies in recent years. 

But the burgeoning demand for flying has brought its own problems. 

A report by one airline revealed that passengers trying to have a chat with a pilot forced an emergency landing. 

*Frustrated passengers *

India is one of the world's fastest-growing aviation markets, but the surge in demand has led to chaotic scenes on flights, with some people struggling to overcome their nerves and adapt to flying etiquette. 

According to a report seen by the BBC, a series of recent incidents have highlighted the "growing menace of unruly passengers in India". 



> Lack of food and nicotine, long delays due to congestion, fog or whatever can frustrate people
> 
> Ajay Jasra, Spicejet



On one occasion, a passenger tried to open a door shortly before take-off while a flight circling around Delhi was forced to make an emergency landing after a group of passengers approached the cockpit to complain. 

The BBC's Damian Grammaticas said one airport manager quoted in the report said troublemakers were often first-time fliers, but bureaucrats, politicians and other professionals had also proved unruly. 

The report recommends that people should be taught the do's and don'ts of air travel and that airlines should be able to breathalyse passengers before boarding if they seem drunk. 

Ajay Jasra, from budget carrier Spicejet, told the BBC that there were many reasons why passengers became disturbed. 

"Inadequate airport infrastructure, lack of food and nicotine, long delays due to congestion, fog or whatever can frustrate people," he said. 

http://news.bbc.co.uk/2/hi/business/6346295.stm


----------



## Neo

Friday, February 09, 2007 

*India discovers uranium deposits in Andhra Pradesh*

By Iftikhar Gilani

NEW DELHI: India has identified the uranium deposits in Andhra Pradesh, which can meet the fuel requirements of India's nuclear power programme and mining for the uranium ore will start by the end of this year.

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister, on Thursday cleared the mining project to be started in Tummalapalle by sanctioning Rs 13.70 crores for land acquisition through the State Government.

Officials said the state government would acquire the requisite land for the Tummalapalle Mining and Milling Project and hand it over to the Uranium Corporation of India Limited (UCIL) for starting exploration and mining. UCIL is a fully government-owned undertaking functioning under the Department of Atomic Energy.

The project is estimated to provide direct employment to 934 persons in various categories and would include the project-affected displaced persons, the official announcement added.

"The approval of the project will meet the uranium fuel requirement of the nuclear-power programme," Finance Minsiter P Chidambaram told reporters.

http://www.dailytimes.com.pk/default.asp?page=2007\02\09\story_9-2-2007_pg5_10


----------



## Janbaz

*Indian inflation hits two-year high *

NEW DELHI: India&#8217;s inflation hit a more than two-year high of 6.58 per cent on Friday, sparking warnings from the government&#8217;s communist allies that high prices were creating &#8220;misery&#8221; for millions of poor. 

The wholesale price index, India&#8217;s most closely watched cost-of-living monitor, showed inflation climbed by nearly half a percentage point to 6.58 per cent for the week ended January 27 from 6.11 per cent the previous week. 

The rate was the highest since December 11, 2004 and up sharply from the same period a year ago when it stood at 4.04 per cent. 

&#8220;The rate at which inflation is increasing will spell disaster for the economy in the coming days and bring more misery to the people,&#8221; Communist Party of India General Secretary A B Bardhan said. 

Bardhan called on the government to institute a public food grain distribution system to help those hit by spiralling prices. 

Around 25 per cent of India&#8217;s one billion people live on less than one dollar a day. The inflation increase, driven by rising costs of vegetables, pulses and other basic goods, came a day after India hiked its year growth forecast to a torrid 9.2 per cent, from an earlier eight per cent-plus estimate, amid a surge in demand for services and manufactured items. 

The Congress-led government, propped up in parliament by the communists, has already expressed fears that India&#8217;s economy is &#8220;overheating.&#8221;

Rising prices have assumed urgency for the government which faces elections in three northern states this month and polls in April in Uttar Pradesh, India&#8217;s most populous state and considered politically pivotal. 

The government mindful that rising prices can be political dynamite among India&#8217;s poor masses who helped propel it to power in 2004 insists price stability is one of its top priorities. 

Politicians grimly recall when the Hindu nationalist Bharatiya Janata Party lost power in state elections in Delhi in 1998 mainly due to spiralling prices of onions that are a staple feature of Indian diets. 

Inflation now is significantly above the 5.0-5.5 per cent tolerance limit set by the Reserve Bank of India and the new rise stoked expectations of more monetary tightening. 

Last month the bank, which has been using a variety of tools to fight inflation since it began a tightening cycle in late 2004, raised its key short-term borrowing rate by a quarter percentage point to 7.5 per cent. 

In December, it boosted the amount of money that banks must keep with the central bank, raising the cash reserve ratio (CRR) by 50 basis points to 5.5 per cent in a bid to take cash out of the banking system and slow 30 per cent annual credit growth that is helping fuel economic expansion. 

Analysts believed that the rate hiking cycle was over for the time being after an aggressive series of increases and that the central bank would turn to the cash reserve ratio to try to tame inflation. 

&#8220;The Reserve Bank is probably done with hiking interest rates but not with monetary tightening,&#8221; said Rajeev Malik, economist at JP Morgan in Singapore. 

Malik said he expected the bank to hike the cash reserve ratio again by around 50 basis points, possibly before its next policy meeting April 24. 

&#8220;I would expect them to turn to the cash reserve ratio and the government is also toying with letting the rupee get a little bit stronger to make imports a little cheaper,&#8221; said T K Bhaumik, chief economist at India&#8217;s biggest private company Reliance Industries. 

&#8220;There is a lot of concern, the government is very much seized by the problem,&#8221; said Bhaumik. The government has cut customs duties on cooking oil, cement and other goods in a bid to lower prices of basic necessities. 

&#8220;These and more such cuts in the budget should help headline inflation to come down from April,&#8221; Malik said. The budget is due at the end of February.

The News.
http://thenews.jang.com.pk/daily_detail.asp?id=42183


----------



## Janbaz

* India sets $80bn export target for IT sector *

MUMBAI: India&#8217;s rapidly growing information technology sector should aim at a nearly fourfold increase in annual exports of software and back-office outsourcing services by 2010, the country&#8217;s prime minister said on Friday. 

&#8220;We need to work hard to retain our edge and even harder to increase our share of the world market,&#8221; Prime Minister Manmohan Singh told nearly 1,000 participants of an international software conference. The three-day conference, organised by the National Association of Software and Services Companies or NASSCOM, India&#8217;s main software services trade group, ended on Friday. 

India exported $23.4 billion (euro19.53 billion) of such services in the 2005-2006 fiscal year that ended March, a 32 per cent jump on the previous 12-month period, according to NASSCOM figures. Singh said NASSCOM&#8217;s export target of $60 billion (euro46.19 billion) per year by 2010 was not high enough. &#8220;We must be more ambitious, considering the way our economy and exports are rising. This target should be met by 2008 and by 2010, we should be looking at a target of $80 billion (euro61.58 billion),&#8221; Singh said. 

Singh also asked the information technology sector to strive to help India&#8217;s large rural population. &#8220;We need to ensure that our large rural population gets the benefit of the information technology explosion ... It can focus on solutions which can benefit the farmer, the artisan, the weaver and the home worker,&#8221; he said. 

The News.
http://thenews.jang.com.pk/daily_detail.asp?id=42188
This was an obligation to the nation, he said. Nearly 70 per cent of India&#8217;s more than 1 billion people live in rural areas, mostly depending on agriculture for survival.


----------



## Neo

Saturday, February 10, 2007 

*Dabur India looking at Pakistan*

LAHORE: In line with its global expansion plan, Dabur India is looking at starting its local manufacturing facility in Pakistan.

The industry sources said the company is expecting that its facility would be operational by the end of next fiscal. It may be noted that the company has made its foray in Pakistan through its subsidiary Asia Consumer Care (Pakistan). Dabur already has manufacturing facilities in Nepal and Bangladesh. The company is also planning to expand its existing product portfolio by adding more products in the skin-care and home-care segment and is also planning the acquisition route in order to expand the business.

http://www.dailytimes.com.pk/default.asp?page=2007\02\10\story_10-2-2007_pg5_9


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## Neo

Saturday, February 10, 2007 

*US com chief to talk WTO, retail in India*

WASHINGTON: US Comm-erce Secretary Carlos Gutierrez will urge India to do more to help break a deadlock in world trade talks on a visit to the rising Asian economic power next week, he said on Thursday. 

Gutierrez, who is leaving on Sunday for a trip to India, told Reuters he will also study IndiaÃ¢â¬â¢s plans to liberalize its retail sector while encouraging New Delhi to play a bigger role in helping wrap up the Doha round of world trade talks. 

The key to a deal lies in getting deeper US cuts in farm subsidies, which developing countries say give farmers there an unfair market advantage, and in securing similar reforms from the EU, Japan and other big importers on farm tariffs. 

http://www.dailytimes.com.pk/default.asp?page=2007\02\10\story_10-2-2007_pg5_15


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## Neo

Saturday, February 10, 2007 

*Indian inflation at 2-yr high adds to rate rise case*

NEW DELHI: IndiaÃ¢â¬â¢s annual inflation rate rose to a two-year high in late January, adding to expectations that last weekÃ¢â¬â¢s interest rate rise would be followed by further measures to calm price rises ahead of state elections this month. 

The rise in wholesale price index to 6.58 percent for the year to Jan 27 was the biggest since Dec. 11, 2004, topping a forecast of 6.48 percent in Reuters poll, FridayÃ¢â¬â¢s data showed. 

Ã¢â¬ÅIt is above everybodyÃ¢â¬â¢s expectation. It is beyond the tolerance level of the Reserve Bank of India and the finance ministry,Ã¢â¬Â said Rupa Rege Nitsure, economist with the Bank of Baroda. 

Ã¢â¬ÅThe money markets and government securities market will have to be prepared for a more stringent monetary environment.Ã¢â¬Â 

The yield on 10-year government bonds edged up to 7.84 percent from 7.83 percent ahead of the data, while the rupee weakened slightly to 44.10 per dollar. 

The data sent wheat, soy and sugar futures lower on heavy selling as fears mounted that the government would come out with strong measures to curb inflationary pressures. 

The spike in inflation comes ahead of elections in three states later this month and one in Uttar Pradesh, perhaps IndiaÃ¢â¬â¢s most electorally important state, in April. 

Fearing a backlash in the elections, the Congress Party, which heads the ruling national coalition, has been fighting an uphill battle to control prices in recent weeks. 

It cut import duties on cement, capital goods, steel, aluminium, copper and other industrial raw materials, as well as palm and sunflower oils in January. 

Ã¢â¬ÅBasically, the effect of customs duty cuts has not come into play. It will take some weeks. Inflation may start coming down after that,Ã¢â¬Â said Saumitra Chaudhuri, economic adviser at rating agency ICRA. 

The central bank has said getting inflation down to its target range of 5.0-5.5 percent at the end of the financial year in March 31 is a policy priority. 

Last week, the central bank raised it short-term lending rate by 25 basis points to 7.50 percent. It left its borrowing rate unchanged at the quarterly policy review. 

While analysts expect another rate rise at or before the next policy review on Apr. 24, some felt the central bank would be in no rush to tighten policy just yet. 

Ã¢â¬ÅItÃ¢â¬â¢s too early to say what the RBI might do in the near future. They have raised repo rate just nine days ago. It will take some time for the impact to be felt,Ã¢â¬Â said Arun Kaul, general manager of treasury at Punjab National Bank in New Delhi. 

The wholesale price index is more closely watched than the consumer price index, which is published monthly, because it has covers a higher number of products and is published weekly. 

Average growth of 8.3 percent in the past three years has left ports, roads and power generation overstretched. The government estimates the Indian economy will grow 9.2 percent in 2006/07, its fastest pace in nearly two decades. 

http://www.dailytimes.com.pk/default.asp?page=2007\02\10\story_10-2-2007_pg5_29


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## Neo

Saturday, February 10, 2007 

*ItalyÃ¢â¬â¢s Prodi to lead major trade delegation to India*

ROME: Italian Prime Minister Romano Prodi announced on Friday a Ã¢â¬Åbig new foreign policy initiativeÃ¢â¬Â aimed at boosting trade links with India, where he will lead a delegation of hundreds of business leaders next week.

Ã¢â¬ÅWe are launching a big new foreign policy initiative to allow Italy to regain its placeÃ¢â¬Â among IndiaÃ¢â¬â¢s major trading partners, Prodi told a news conference.

Ã¢â¬ÅIt is the opening of a new chapter in our relations with Asia, with a country that will be more and more important and, with China, will be the gateway of Asia,Ã¢â¬Â Prodi said.

About 45O representatives from 350 small or medium-sized businesses, as well as employersÃ¢â¬â¢ association chief Luca Cordero di Montezemolo who is also chairman of automakers Fiat and Ferrari and several major bankers will accompany Prodi to India from Saturday to next Friday. They will make stops in New Delhi, Kolkata, Mumbai and Bangalore.

For Italian employers, Ã¢â¬ÅIndia has great priority not only because of the extraordinary dynamism of the economy of this country but also because of the long history of Indian entrepreneurs and consumers using Italian brands and technologies,Ã¢â¬Â Prodi said. The first Italian companies expanded into India in the 1970s, he noted.

Italian government figures show huge growth in bilateral trade in recent years, with Italian imports spiking by 83.5 percent between 2000 and 2006, while exports surged by 115.5 percent. Nevertheless, Italy is ranked only 28th as a supplier to India, and 34th as a client.

Prodi will wrap up the visit with a meeting in New Delhi with his Indian counterpart Manmohan Singh when the two are expected to touch on the thorny subject of reforming the UN Security Council.

Ã¢â¬ÅOne of the few problems between Italy and India is the big difference (on the issue) which has never been hidden and which does not prevent us from having good relations,Ã¢â¬Â Prodi said.

India is among countries seeking permanent membership on the Council under the reform, while Italy supports a proposal to add non-permanent members that would be elected for two-year terms, with the possibility of immediate re-election.

http://www.dailytimes.com.pk/default.asp?page=2007\02\10\story_10-2-2007_pg5_34


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## Neo

Saturday, February 10, 2007 

*Ã¢â¬ËIndia pushes for a stronger rupeeÃ¢â¬â¢*

MUMBAI: The Indian government is pushing for a stronger rupee to curb inflation that is hovering near its highest level in two years, the Economic Times newspaper reported on Friday, citing unnamed finance ministry officials. 

The rupee, which hit a one-year high of 44.03 against the dollar in early trade, has risen 6.8 percent from a three-year low in July last year. 

It would have gained more but for intervention by the central bank, which is worried about the impact of a stronger rupee on IndiaÃ¢â¬â¢s exports, traders said. 

The finance ministry has indicated to the Reserve Bank of India governor it was comfortable with a stronger rupee, the newspaper said. 

Data showed the Reserve Bank of India bought about $5 billion in November and December to stem the rupeeÃ¢â¬â¢s rise, and traders believe it has played an active role again this year.

http://www.dailytimes.com.pk/default.asp?page=2007\02\10\story_10-2-2007_pg5_35


----------



## Neo

*Initial bids for Hutchison Essar at $16-20bn *

MUMBAI: Initials bids for Hutchison Essar have valued IndiaÃ¢â¬â¢s fourth-biggest mobile operator between $16 and $20 billion, local newspaper said on Saturday, but a source said it could be a month before a final decision was made. 

Ã¢â¬ÅThe entire process could take a month,Ã¢â¬Â the source close to a bidder said. IndiaÃ¢â¬â¢s Essar group, which holds a third of the company, has put in a bid while reiterating it had right of first refusal in any buyout, a source told Reuters on Friday. 

The local media said bids had also been submitted by the midnight deadline on Friday by BritainÃ¢â¬â¢s Vodafone Group Plc, IndiaÃ¢â¬â¢s Reliance Communications Ltd and the Hinduja group. 

Media reports have suggested Hutchison Telecommunications International Ltd, which owns 67 per cent in the mobile firm, will consider the bids in a board meeting on Sunday. 

Ã¢â¬ÅHTIL will reveal the highest price offered to each of the remaining bidders separately,Ã¢â¬Â the Hindustan Times paper said, citing one of the bidders. Ã¢â¬ÅEach will be asked if they want to revise their bid.Ã¢â¬Â

Bids valuing the company at $18-$20 billion had been submitted by e-mail, the paper said. The Economic Times paper said bids valued the company at $16-$17 billion, and that Altimo the telecoms arm of Russian conglomerate Alfa had also made an offer. 

The Hutchison Telecom board will discuss the bids on Sunday and then place them before shareholders for approval on Feb 15, the paper said. 

Hong KongÃ¢â¬â¢s South China Morning Post said Hutchison Telecom hopes to identify a preferred bidder by the Lunar New Year Feb 17. 

Ratings agency Fitch said on Friday the Ã¢â¬Åstrategic valueÃ¢â¬Â of Hutchison Essar which has 16 per cent of IndiaÃ¢â¬â¢s fast-growing mobile market Ã¢â¬Åwould be most significantÃ¢â¬Â to Vodafone and Reliance Communications.

http://www.thenews.com.pk/daily_detail.asp?id=42328


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## Neo

*Doubt cast on potential gold rush in IndiaÃ¢â¬â¢s retail sector *

NEW DELHI: The leader of IndiaÃ¢â¬â¢s ruling Congress party has sounded an alarm over fears that big foreign firms looking to enter the countryÃ¢â¬â¢s retail sector could force millions of mom-and-pop stores to shut.

Sonia Gandhi has called on the government to Ã¢â¬Åconsider having the relevant issues properly examined before further decisionsÃ¢â¬Â are taken on giving international retailers more access to IndiaÃ¢â¬â¢s lucrative retail sector.

Her call this week came amid reports that Michael T Duke, the vice chairman Wal-Mart the worldÃ¢â¬â¢s largest retailer was due in India on February 22 to partner formally with Bharti Enterprises to start a nationwide store chain.

The Congress leader said in a letter to Prime Minister Manmohan Singh that she had Ã¢â¬Åreceived suggestions from many quarters about the desirability to first study the possible impact of transnational supermarkets on the livelihood security of those engaged in small-scale operations.Ã¢â¬Â

IndiaÃ¢â¬â¢s 15 million dusty, chaotic and cramped corner shops fear competition from the giant retailers.

They worry that big, air-conditioned stores with swish, shrink-wrapped produce will drive them out of business, despite assurances from industry figures that the market is large enough to accommodate virtually all players.

Small retailers are already alarmed that IndiaÃ¢â¬â¢s biggest private company, Reliance, plans to Ã¢â¬ÅrevolutioniseÃ¢â¬Â the way Indians shop by opening thousands of western-style supermarkets across the country.

The government still bans foreign retail chains from selling directly to consumers. But they are using a backdoor to enter the market by starting wholesale and sourcing firms, which supply a local retail partner.

Retailers like Wal-Mart, FranceÃ¢â¬â¢s Carrefour, GermanyÃ¢â¬â¢s Metro and BritainÃ¢â¬â¢s Tesco have been making a beeline for IndiaÃ¢â¬â¢s $300-billion retail industry in what commentators have dubbed the Ã¢â¬Ågreat Indian retail gold rushÃ¢â¬Â.

Organised retail sales from chain stores still makes up around just three per cent of the Indian sector.

Congress said party leaders were seeking ways for small shopkeepers to be protected from an expected further loosening of the governmentÃ¢â¬â¢s foreign direct investment (FDI) policy for the retail sector.

Ã¢â¬ÅWeÃ¢â¬â¢re not for a ban but Congress wants safeguards in place before implementation of the FDI (retail) policy,Ã¢â¬Â Congress spokesman Abhishek Manu Singhvi told reporters this week.

The prime ministerÃ¢â¬â¢s office has asked Ã¢â¬Åfor details on FDI policy in retail and we have sent our comments,Ã¢â¬Â Commerce Minister Kamal Nath said this week, 

without giving further details.

Last September, Gandhi urged similar caution on Special Economic Zones (SEZs) aimed at boosting foreign investment when she questioned whether agricultural land should be diverted to non-agricultural uses.

The government has now put on hold its ambitious plans to set up SEZs nationwide until such issues as compensation for displaced farmers have been settled amid violent protests in the eastern state of West Bengal.

Arvind Sing Hal, the head of Indian retail consultancy Technopak, said despite the controversy he was still Ã¢â¬Åvery, very optimistic that the retail sector will soon get opened up.Ã¢â¬Â

However, an economist with a foreign credit rating agency, who did not wish to be named, said he expected the government would proceed cautiously with economic reforms.

http://www.thenews.com.pk/daily_detail.asp?id=42326


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## Neo

*Hindalco to buy Novelis for $6bn *

MUMBAI: IndiaÃ¢â¬â¢s largest aluminium producer, Hindalco Industries, announced on Sunday it was buying the US-based firm Novelis for six billion dollars in the latest big-bucks foreign takeover by an Indian firm. 

The all-cash deal follows Tata SteelÃ¢â¬â¢s 7.0-billion-pound buyout last month of Anglo-Dutch producer Corus, the largest-ever foreign acquisition by an Indian company. That deal showcased the increasing financial firepower of Indian firms being driven by nine per cent growth rates. 

Ã¢â¬ÅThis is IndiaÃ¢â¬â¢s largest acquisition of a North American company and will catapult us into a Fortune 500 companies list,Ã¢â¬Â said Kumar Mangalam Birla, chairman of Aditya Birla conglomerate, which owns Hindalco. 

He said the transaction was expected to be finalised in the second quarter and included $2.4 billion of debt. It requires the support of two-thirds of Novelis shareholders and approval under Canadian law. The firm is offering $44.93 a share, a premium of almost 17 per cent over NovelisÃ¢â¬â¢ stock close of 38.5 on Friday. 

Novelis is a leader in aluminium products across Europe and Asia, with a presence across 11 countries and employing 12,500 people. Its customers include US auto giant General Motors and soft-drinks mammoth Coca-Cola. Birla said the groupÃ¢â¬â¢s sales were expected to nearly double to $20 billion from the current $11.8 billion. 

Ã¢â¬ÅWe plan to retain all Novelis employees and see strong synergies across products, with an edge in research,Ã¢â¬Â Birla told reporters. Ã¢â¬ÅThough Novelis will be a wholly owned subsidiary, we have no plans to merge it into Hindalco.Ã¢â¬Â The deal will create a global integrated aluminium producer providing low-cost raw materials and production capabilities, Birla said. Post-acquisition, the Birla group will have 50 per cent of its turnover coming from overseas. Hindalco closed at Rs173.25 last Friday at the Mumbai stock exchange, having gained nearly three per cent in the past month on media reports of a possible buyout of Novelis, an Atlanta-based company spun-off from CanadaÃ¢â¬â¢s Alcan. 

Ã¢â¬ÅA key positive from the deal is that NovelisÃ¢â¬â¢ products are insulated against economic cycles. There will be stable cash flows going ahead,Ã¢â¬Â a senior company official said. Hindalco company officials also said product synergies and geographical reach were huge. Ã¢â¬ÅNovelis has a global market share of 19 per cent for aluminium rolled products. 

HindalcoÃ¢â¬â¢s global share will improve in the high-growth Indian market for rolled products,Ã¢â¬Â said Debu Bhattacharya, managing director of Hindalco. Ed Blechschmidt, acting chief executive officer of Novelis, said in a statement on the companyÃ¢â¬â¢s website that the deal represented Ã¢â¬Åoutstanding valueÃ¢â¬Â. Ã¢â¬ÅThe board has agreed that the transaction with Hindalco delivers outstanding value to Novelis shareholders,Ã¢â¬Â the statement said. 

Ã¢â¬ÅThe combination of NovelisÃ¢â¬â¢ world class products with HindalcoÃ¢â¬â¢s downstream assets in a rapidly growing Asian market is an exciting prospect,Ã¢â¬Â it added. Novelis reported a loss of $102 million in its third quarter earnings in November last year. In 2005, the company reported net sales of $8.4 billion, according to the companyÃ¢â¬â¢s website. 

http://www.thenews.com.pk/daily_detail.asp?id=42528


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## Neo

Tuesday, February 13, 2007 

*Ã¢â¬ËToyota to build new plant in India by 2010Ã¢â¬â¢*

TOKYO: Toyota Motor Corp plans to build a new plant by 2010 in southern Indian concentrating on inexpensive, smaller model cars, the Nikkei business daily reported on Monday. 

The new plant, which would be built close to the companyÃ¢â¬â¢s first plant in the country near Bangalore, would aim at producing 100,000 cars a year, roughly doubling the firmÃ¢â¬â¢s output capacity in India. It would cost roughly 40 to 50 billion yen ($328 to $410 million) to build, the report said. 

Asked about the article, a Toyota spokesman said the company did not have any such concrete plans at present but stopped short of saying the report was incorrect. IndiaÃ¢â¬â¢s passenger vehicle market is forecast to expand rapidly, and other major Japanese car makers such as Suzuki Motor Corp and Honda Motor Co have a sizeable presence. 

Suzuki said last week it will invest a further 200 billion yen in its Indian venture to expand capacity at car and engine plants. Toyota, JapanÃ¢â¬â¢s top auto maker, last week posted a near-20 percent rise in quarterly profit on brisk sales in North America and Europe, and kept its forecasts for an eighth straight year of record earnings intact. 

http://www.dailytimes.com.pk/default.asp?page=2007\02\13\story_13-2-2007_pg5_19


----------



## Neo

*India asked to open consumer sector to foreign investors *

NEW DELHI: US Trade Secretary Carlos Gutierrez told India on Tuesday to open its booming consumer sector to foreign investors and Ã¢â¬Åfight back the temptationÃ¢â¬Â to build economic walls. 

Gutierrez met top Indian officials at the start of his first-ever trip here and was scheduled to meet Prime Minister Manmohan Singn for talks on Wednesday. Ã¢â¬ÅMore needs to be done to open IndiaÃ¢â¬â¢s markets there are some sectors such as retail, banking, financial services and telecommunications where obstacles remain,Ã¢â¬Â Gutierrez told Indian business leaders. 

Ã¢â¬ÅNeedless bureaucratic hurdles, protectionist policies or caps on foreign ownership, hamstring businesses that wish to contribute to this burgeoning market and bring goods, services and increases options to Indian consumers,Ã¢â¬Â he added. 

India must Ã¢â¬Åfight back the temptation to put on the brakes and put up walls continued economic success will only result from transparency and openness not protectionism and isolationism,Ã¢â¬Â he said. 

GutierrezÃ¢â¬â¢s call came a week after the chief of IndiaÃ¢â¬â¢s ruling Congress party voiced fears that the entry of global firms into the countryÃ¢â¬â¢s retail sector could down the shutters on millions of mom-and-pop stores. 

The government is also under pressure from its communist allies which prop it up in parliament to go slow on reforms, arguing that IndiaÃ¢â¬â¢s uncounted millions living below a poverty line will get swamped in an open economy. 

The United States is IndiaÃ¢â¬â¢s largest trading partner and two-way trade totalled $29 billion to the end of November, according to the latest figures available. 

In December, GutierrezÃ¢â¬â¢s, deputy, Franklin Lavin, led the biggest-ever US trade team to India, signalling WashingtonÃ¢â¬â¢s desire to find a toehold in the surging economy fuelled by a 300-million-strong affluent middle class. 

The US commerce secretary said one of the primary aims of his trip to India was also to seek New DelhiÃ¢â¬â¢s backing in making the moribund Doha Round of World Trade Organisation talks a success.

http://www.thenews.com.pk/daily_detail.asp?id=42652


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## Neo

February 14, 2007 
*IndiaÃ¢â¬â¢s move to fight surging inflation*

NEW DELHI, Feb 13: India's central bank tightened monetary policy on Tuesday for a second time in two weeks to fight accelerating inflation, hiking the amount of cash commercial banks must keep on deposit.

The Reserve Bank of India said it was raising the cash reserve ratio to 6pc from 5.5pc to take money out of the banking system and try to slow rapid credit growth that is helping fuel inflation.

Ã¢â¬ÅIn view of the paramount need to contain inflation expectations and in the light of current liquidity conditions, it has been decided to increase the cash reserve ratio,Ã¢â¬Â the bank said in a statement on its web site.

The move, which the bank said, would suck 140bn rupees, or $3.17bn, from the banking system, had been forecast by economists after inflation hit a more than two-year high of 6.58 per cent last Friday.

Inflation now is riding significantly above the 5-5.5 per cent tolerance limit set by the Reserve Bank, based in India's financial capital, Mumbai.

Ã¢â¬ÅThis is a very sharp move, they are directly siphoning money out of the system ... this is a move to control the demand side,Ã¢â¬Â said D.K. Joshi, principle economist at Indian credit rating agency Crisil in New Delhi.

The government last week estimated growth at 9.2pc for the financial year to March 31, 2007, after the economy expanded by nine per cent a year earlier.

Monetary policy authorities are trying to allow Asia's fourth-largest economy to move onto a higher growth path without letting inflation get out of control.

http://www.dawn.com/2007/02/14/ebr14.htm


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## Neo

*India's license raj is alive and well*
CHIDANAND RAJGHATTA
14 Feb, 2007 

WASHINGTON: So you think India's infamous license-permit Raj has ended? Not according to the World Bank. A new report released on Tuesday by the Bank and its private sector arm IFC ranks India near the bottom of the world in several business metrics. 

Although the report puts some gloss on marginal improvements arising from reforms and offers comfort saying India and Pakistan are South Asia's top reformers, the harsh truth is India fares dismally in the world business practices, notwithstanding all the international attention it is getting. 

Overall, India ranks 134th in ease of doing business, 88th in starting a business, 112th in (ease of) employing workers, 110th in registering property, 65th in getting credit, 33rd in protecting investors, 139th in trading across borders, 133rd in closing businesses. 

India's most miserable numbers are in dealing with licenses (155th), paying taxes (158th), and most crucially, enforcing contracts (173rd). 

Even in South Asia, India ranks near the bottom in ease of doing business (6th) and starting a business (8th), dealing with licenses (7th), paying taxes (8th), enforcing contracts (6th). 

Yet a World Bank release on the subject kicked off by saying ''doing business became easier in India and Pakistan in 2005-2006'' thanks to reforms which reduced the time, cost, and hassle for businesses to comply with legal and administrative requirements. 

Worldwide, the South Asia region ranked last in the pace of global reforms. The South Asian rankings: the Maldives (53) and Pakistan (74), followed by Bangladesh (88), Sri Lanka (89), Nepal (100), India (134), Bhutan (138), and Afghanistan (162). 

Singapore, New Zealand, United States, Canada and Hong Kong occupied the top five positions. 

Within India, the report finds that Hyderabad has the most business-friendly regulations. Mumbai (11th) and Kolkata (12th) are at the bottom. 

But some good practices exist, the study reveals. If the country could adopt, for example, Jaipur's regulations on starting a business, Bhubaneswar's rules on contract enforcement and taxes, and Chennai's trade practices; it could move its current global ranking from 134th to 79th. 

The report finds that entrepreneurs in South Asia face large regulatory obstacles to doing business. For example, it takes 18 months of salary, on average in the region, to dismiss a redundant worker. Taxes are still high: a standard company in India pays 81% of commercial profits in taxes. Resolving commercial disputes through the courts is more time-consuming in South Asia than in any other region. On average it takes almost three years (969 days). 

Despite some improvements in 2005-2006, the report says the pace of reform was slower in South Asia than in any other region, with only India and Pakistan starting to improve their business environment. 

"Countries are competing for investment, enterprises, and the jobs that come with them. Some improvements are underway in the region, but the pace of reform must increase if South Asia wants to keep up with the rest of the world," said Simon Bell, World Bank Manager for Financial and Private Sector Development in South Asia. 

http://timesofindia.indiatimes.com/...d_well/RssArticleShow/articleshow/1606978.cms


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## Neo

Thursday, February 15, 2007 

*India plans more restrictions on FDI*

By Iftikhar Gilani

NEW DELHI: India plans to put further restrictions on foreign direct investment (FDI) through the amended Foreign Exchange Maintenance Act (FEMA) and a new National Security Exception Act (NSEA), which are to be presented in parliament soon.

Existing laws already prohibit FDI from Pakistan and Bangladesh, and more countries are expected to face restrictions under the new laws. National Security Advisor MK Narayanan recently told an international gathering that security agencies had analysed the threat of terrorist groups manipulating stock exchanges to raise funds for their operations. He said that fictitious companies had been found operating in the Mumbai and Chennai stock exchanges. 

Apart from the two new laws, the government is also issuing secret guidelines for the monitoring of specified areas, countries and companies to halt suspect investments.

It is also proposed that an entity bringing or receiving FDI should make a declaration to regulators vowing not to indulge in any activity which adversely affects IndiaÃ¢â¬â¢s national security. A national security exception clause could be made compulsory for all contracts, tenders and agreements entered into by the centre, state governments or local bodies.

Sources here said that senior bureaucrats who held a series of meetings chaired by Cabinet Secretary B K Chaturvedi remained divided on enacting a special NESA, as proposed by the National Security Council, but most supported the inclusion of national security exception clauses in agreements concerning FDI.

The NSC wants the government to have the power to suspend or prohibit any foreign acquisition, merger or takeover of an Indian company that is considered prejudicial to the national interest. 

Through presently there is a law allowing the government to reject FDI from specific countries, investments from China, South Korea and tax havens like Cyprus and Mauritius are often frowned upon and hampered. In the meetings, there was no consensus on drawing up a list of countries of concern, as some felt the restrictions should be sector and location-specific rather than country-specific.

The guidelines that are being framed by the NSC secretariat also make it mandatory for sectoral regulators to seek the opinion of intelligence and security agencies and make it compulsory for existing foreign entities to take prior approval before starting any new activity in sensitive sectors or locations on receipt of foreign participation from countries of concern.

Narayanan also told the international gathering that banking secrecy needed to be lifted in terrorist-related cases. He said terrorist groups were involved in legitimate businesses like restaurants, real estate agencies and shipping and used part of their proceeds for terrorist activities.

http://www.dailytimes.com.pk/default.asp?page=2007\02\15\story_15-2-2007_pg7_36


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## Contrarian

Will some one please post the damn article on Vodafone's take over of Hutch!!
Its the biggest godamn take-over iN India. Vodafone paid 19.3 Billion USD for Hutch!! beating 5 other companies!!. Hutch is the second biggest cell fone company in India i think. Its ******** huge deal. Vodafone has finally entered India. Prices of cell fone rates will prolly go down even more. Its a huge thing, wil some get a few of the hundreds of articles on every major newspaper and post it in a new thread!!!!!!!!!!!!!!!!


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## Neo

I did cover that news Malay and someone even opened a thread about it.


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## Contrarian

damn! That was a fast reply Neo!!
But where did you post about it? I couldnt find a new thread about it?


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## Neo

I moved it to trash can, didn't like the way the topic was approached.  

http://www.pakistaniforcesforum.com/showpost.php?p=49153&postcount=1


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## Contrarian

Neither did I. And the article had wrong info as well, its 19.3 Bil USD, its written wrong in the article. Perhaps you could find a good article Neo.


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## Neo

I will and will open a new thread about new India oversea JV's in this section soon.

Neo


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## Neo

*'India set to enter lower-mid income ranks' *

Siddharth Zarabi / New Delhi February 8, 2007 

With the economy growing at over 9 per cent for two years in a row, India is certain to break into the league of middle-income countries soon. 

The finance ministryÃ¢â¬â¢s chief economic advisor Ashok Lahiri said at present economic growth rates, India would break into the list of lower middle-income countries in the next 3-4 years. 

However, according to World Bank estimates, it might happen next year, three years ahead of the earlier projection of 2011. 

Ã¢â¬ÅIndia will probably move into the lower middle-income country classification of per capita income by 2008,Ã¢â¬Â Dipak Dasgupta, lead economist for World Bank in India, said. 

According to the advance estimates of national income for 2006-07, IndiaÃ¢â¬â¢s per capita income at market prices stands at Rs 27,614 or $626. 

The World Bank classifies its 184-member economies according to their 2005 gross per capita national income into four groups: Low income countries with per capita income of $875 or less, lower middle-income countries with per capita income between $876 and $3,465, upper income countries between $3,466 and $10,725 and high income countries with per capita income of $10,726 or more. 

The World Bank classifications will remain in effect till July this year. 

The difference between DasguptaÃ¢â¬â¢s projection and LahiriÃ¢â¬â¢s view lies in the way the World Bank calculates per capita income. While the figure of $626 is based on constant 1999-2000 prices, the bank uses current year data plus that of two preceding years and adjusts it for inflation and 20 other items. 

Accordingly, the per capita income of the country stood at $720 for calendar year 2005.


----------



## Neo

*India Passes Korea for Asia's Third-Largest Economy *

After showing economic growth of 8.9 percent, its highest rate in 18 years, India is expected to overtake South Korea to become Asia's third largest economy, after China and Japan. 
The International Monetary Fund announced Thursday that India's growth rate from April 2006 to March 2007 would hit 8.9 percent. Its GDP will reach US$840 billion, surpassing KoreaÃÂ¡ÃÂ¯s estimated GDP of $826.9 billion for 2006. Until last year, India was at 12th place in world rankings, one step lower than Korea. 

Rapidly developing Russia expects its GDP to jump from $763.3 billion in 2005 to $975 billion in 2006 thanks to booming oil prices. The IMF expects Russia to beat Korea as well. 

With GDP of $780 billion, Korea has been one of the top ten economies, ranking along with Brazil, India and Mexico with GDPs of $795 billion, $770 billion and $760 billion, respectively. With Russia and India recording such strong growth, Korea is expected to drop out of the top 12. 

Meanwhile, India's Central Statistics Office announced that its GDP for the 2006 financial year will be $854 billion, a 9.2 percent increase from the previous year. The prediction is slightly higher than the IMF's forecast. India's rapid growth comes from service industries like software programming and rising production in the manufacturing sector after a few years of stagnation. Manufacturing production grew by 11.3 percent from growth of 9.1 percent last year. 

Meanwhile, there are concerns that India's economy is overheating and that inflation is on the rise. The Economist business magazine said in its latest issue that while the country neglects essential factors for long-term growth such as public reform and infrastructure, price rates are rising 6 percent a year, double the inflation rate in China. High-flying India, the article warned, may be at risk of a hard landing. 

http://english.chosun.com/w21data/html/news/200702/200702090008.html


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## Neo

*India's economy 'nears $1 trillion'*
By Andrew Walker
Economics correspondent, BBC News

If we needed a reminder of India's growing global economic presence, we had it last week in the steel industry when India's Tata won a stock market auction for the European company Corus.

The result of putting the two together will be the fifth-biggest steel producer in the world.

And it is an Indian-born entrepreneur, Lakshmi Mittal, who is the driving force behind the biggest of all in the industry, Arcelor Mittal.

That story is merely a recent news event that highlights India's rise. It is a much wider phenomenon.

Gerard Walsh, Regional Director for Asia at the Economist Intelligence Unit in London, says India is already close to being a $1 trillion economy.

And if you measure it using purchasing-power parities - an alternative to exchange rates which accounts for different price levels between countries - India is already the third-largest economy in the world, behind only the US and China.

Growing impact

Most economists expect India's recent relatively rapid growth - an annual average of about 7% over the last four years - to continue.

That alone would ensure the country would make a growing mark. But it has been a relatively closed economy, with barriers to foreign trade and investment.

Those barriers have been eased, but many remain. The government appears inclined to continue the liberalisation process - and that would make India's international integration proceed even more quickly.

The World Bank has done a recent study, called Dancing with Giants, looking at the implications of the rise of India and China.

Alan Winters, one of the authors, says that for the most part, India's rise is good news for the rest of us.

India's economic growth generates more of the goods it produces and others buy - and that will tend to push prices down.

Competition

But there may be some adverse consequences. Demand for raw materials from growing Indian industry will create upward pressure on those prices.

That's also true for oil, although Mr Winters emphasises that India is a small part of what will determine the global energy prices.

In addition, the increased competition as India produces more goods and services might hurt other countries in South Asia, especially in the textiles and clothing business.

That is an industry where low costs are one of the keys to success.

The same is true of another sector where India is already a big presence on the world stage - medicines.

India's biggest is Ranbaxy, a name we will probably hear more of in the future.

The company's chief executive, Malvinder Mohan Singh, says that 80% of revenue comes from international markets and just 20% from India.

It divides half and half between developed- and developing-country markets.

More sophisticated

Ranbaxy is a company that makes so-called generic medicines, cheap copies of drugs developed by others. But Mr Singh says they have ambitions to develop their own patented therapies.

It would be a move into an area that requires more high-level expertise, and that is a characteristic of other areas of India business life - notably computer software.

The low-cost, high-volume manufacturing will continue - at Ranbaxy and in other Indian industries - but a more sophisticated side is emerging.

Nonetheless, there is much in India that remains pretty basic. Poverty is deep and widespread. It is a matter of controversy whether India's economic growth has helped or not.

Some, including Indu Prakash Singh of Actionaid in Delhi, say the rich and middle classes have benefited, but the poor have not.

He says there have been many cases of poor people being displaced from urban areas in the name of development to areas where they have no housing and no livelihood.

The World Bank's Mr Winters agrees that the wealthy and middle-class clearly have gained.

But he also says the data suggests that the distribution of income hasn't changed much, so the poor are benefiting from India's economic growth. He says there is no reason why they should not continue to do so.

http://news.bbc.co.uk/2/hi/business/6334305.stm


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## Neo

*Unleashed Indiahas more building to do*
The Economist
February 05, 2007 

The Indian tiger is on the prowl. Tata Steel, which dates to the days of British rule, leaped into the league of top producers when it bought Britain's Corus, which includes the steelmaking remnants of imperial Britain.
Younger Indian companies such as Infosys and Wipro are storming international markets. And the world's business people and investors are lined up to lavish money on India's engineers and scientists.

After years cast as China's underperforming neighbor, the huntress is in hot pursuit. In the past year, India's economy has grown an impressive 9.2 percent, close behind China's 10.4 percent.

India has attracted the attention of Minnesota Gov. Tim Pawlenty, who last week said he'll lead a trade mission to India in October. Pawlenty visited China in 2005. 

At some point this year, India's growth rate could even outpace China's; and if you measure things by purchasing power parity, India should soon overtake Japan and become the third-biggest economy, behind only the United States and China.

No wonder more Indian businesspeople, policymakers and economists are basking in the belief that their country is burning bright, at last free of its bureaucratic cage.

Prime Minister Manmohan Singh's latest five-year plan assumes that India can sustain average annual growth of 9 percent. Fast growth is essential to pull millions of Indians out of poverty. But a cold shower is needed because of the many alarming signs of overheating. Across India, prices are rising fast, factories are at full capacity, loans are piling up.

When you mention overheating, analysts point at China. Yet India displays far more symptoms of the disease. Inflation has risen to 6 to 7 percent, compared with 2.8 percent in China; a record 99 percent of Indian firms report that they are operating above optimal capacity; and credit is expanding at an annual rate of 30 percent, twice as fast as in China.

Unlike China, India has a widening current-account deficit -- a classic sign of overheating, as domestic output fails to keep pace with demand. And if you are looking for a stock market bubble, Indian share prices have risen more than four-fold over the past four years, far more than in China. If something is not done, a hard landing will be inevitable.

The Reserve Bank of India has been too timid in cooling domestic demand: Although one interest rate was raised last week by a quarter point, the overall rise in rates over the past 2ÃÂ½ years has not even kept up with consumer-price inflation. But the government's attention should be on supply and dismantling the barriers that keep its speed limit below China's.

So far, India's reform has focused on setting its inventive private sector free from its fearsome bureaucracy. This has unleashed entrepreneurial talent, but more change is needed. Now is the time to tackle the public sector. Infrastructure, such as roads and power, and public services, such as education and drinking water, are woefully inadequate.

Even as the economy has been booming, many public services have worsened. Indians own mobile phones, but line up for hours for drinking water.

India's top computer scientists are feted around the world, yet most children in rural areas lack basic education. About half of all Indian women are illiterate, compared with a ratio of around one in seven in China.

If these things can be tackled, India can indeed match China's growth. 

http://www.startribune.com/535/story/982850.html


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## Neo

*Hindalco to Buy Novelis for $6 Billion*

By Debarati Roy

Feb. 11 (Bloomberg) -- Hindalco Industries Ltd., India's biggest aluminum producer, plans to buy Novelis Inc. of Atlanta for as much as $6 billion to gain sheet mills that supply can makers and car companies.

Hindalco, controlled by billionaire Kumar Mangalam Birla, will make an announcement about the purchase at 5 p.m. today in Mumbai, company spokeswoman Pragnya Ram said in a telephone interview, without giving more details.

Spurred by an economy growing at more than 9 percent a year, Indian companies are seeking acquisitions in mature overseas markets to sell higher-margin goods and add capacities and products. Hindalco's purchase, which will follow Tata Steel Ltd.'s $12 billion takeover last month of U.K. steelmaker Corus Group Plc, will fetch the Aditya Birla Group company customers such as General Motors Corp. and Coca-Cola Co.

"The trend for Indian companies now is to look westwards, acquire companies and establish themselves as multinational companies,'' said J. Venkatesan, who oversees $1.5 billion of Indian assets at Sundaram BNP Paribas Asset Management Co. in Chennai. 2Investors will want more details on the acquisition and want to know what kind of benefits will accrue to Hindalco in the long run.''

Shares of Atlanta-based Novelis have doubled since Jan. 25 on speculation the unprofitable company may receive a takeover offer after several weeks of talks with potential acquirers. The shares fell 2.5 percent to C$45.07 a share on Feb. 9 on the Toronto Stock Exchange.

Hindalco Industries shares, almost unchanged this year, fell 1.75 rupees, or 1 percent, to 173.25 at close of trade on the Bombay Stock Exchange on Feb. 9.

Wider Access

Hindalco, which exports 16 percent of its total sales volume of aluminum, is one of the world's lowest-cost producers of aluminum. Hindalco will gains access to markets across the globe as Novelis operates in 11 countries and is the second- largest producer in North America, according to its Web site.

2This is a very good move from Hindalco,'' said Arvind Desai, head of research at Mumbai-based Niche Brokerage Pvt. "Hindalco will be able to ship primary aluminum from India and make value-added products.''

Novelis, which was spun off from Alcan Inc., controls 19 percent of the world's flat-rolled aluminum products, according to its Web site and also supplies to companies including Ford Motor Co., Eastman Kodak Co. and Thyssenkrupp Ag.

Debt, Loans

With a market value of C$3.34 billion ($2.8 billion) at the close of trade on Feb. 9, Novelis had about $3.2 billion in debt and loans outstanding, according to data on the Bloomberg. On Nov. 14 Novelis reported a loss of $102 million, or $1.38 a share, in the third quarter. A year earlier, net income was $10 million, or 14 cents a share.

In 2005, the company reported net sales of $8.4 billion, according to its Web site.

Hindalco plans to triple production of the metal to 1.5 million metric tons by 2012 to become one of the world's five largest aluminum producers. The Mumbai-based company, which also has interests in telecommunications, cement, metals, textiles and financial services, is currently the world's 13th-largest maker of aluminum.

Higher Rating

Acquisitions for Indian companies are also becoming easier with the nation's rating upgrade. Standard & Poor's on Jan. 30 raised India's rating to investment grade as growth in Asia's fourth-largest economy is likely to expand at a record pace of 9.2 percent in the year to March 31. Credit Suisse in December forecast India's economy will grow 10 percent this year from 9.5 percent in 2006, overtaking China as the world's fastest-growing major economy.

Suzlon Energy Ltd., India's biggest builder of wind turbines, on Feb. 9 offered 1.02 billion euros ($1.3 billion) for German rival Repower Systems AG, countering an offer from French nuclear-reactor maker Areva SA.

Alcan, the world's largest aluminum producer after Alcoa Inc., spun off Novelis to satisfy antitrust concerns after acquiring France's Pechiney SA for about $4 billion in February 2004. In January 2005, Novelis agreed to sell about $1.4 billion in bonds as part of a $2.9 billion refinancing needed to repay loans from Alcan.


----------



## Neo

*ABB India posts record earnings growth *

BANGALORE: Global engineering giant ABB said on Friday India has overtaken China as its fastest-growing market after the South Asian nation generated record profit, sales and orders last year. 

Net profit in 2006 jumped 56 per cent from the previous year to Rs3.4 billion ($77.19 million) and sales were up 44 per cent to Rs43.4 billion, ABB India Managing Director Ravi Uppal told a news conference in Bangalore. The company won Rs56.2 billion of orders, up 50 per cent on the year, for its power and automation equipment as an economy expanding by nine per cent a year prompted India to invest more in deficient infrastructure such as electricity utilities and irrigation facilities. Ã¢â¬ÅThese growth rates are higher than ChinaÃ¢â¬â¢s,Ã¢â¬Â said Dinesh Paliwal, the New York-based president for global markets and technology at ABB. Ã¢â¬ÅChina has been growing several years for ABB at 25 to 35 per cent; India has now become our fastest-growing market.Ã¢â¬Â 

ABB, which added 500 new customers last year including consumer products companies Procter and Gamble and Hindustan Lever and automaker Hero Honda, expects the market to expand faster as the Indian government and industry step up investment. The company expects Indian investments of $200 billion in the power sector, $130 billion in steel and $13 billion in aluminium by the year 2012, Uppal said. Ã¢â¬ÅThe urgent need for quality power, delivered efficiently and economically, across urban and rural India is now among the nationÃ¢â¬â¢s key priorities,Ã¢â¬Â he said. 

Ã¢â¬ÅAt the same time, Indian industry is increasingly adopting automation technologies as it scales up.Ã¢â¬Â That will drive demand for ABBÃ¢â¬â¢s products and services although interest rates are rising and banks are tightening credit, which may force some companies to put planned investments on hold. 

Ã¢â¬ÅThe demand propensity in the market is so high that most projects will go through,Ã¢â¬Â said Uppal. Ã¢â¬ÅI donÃ¢â¬â¢t foresee a slowdown.Ã¢â¬Â 

ABB India increased its 2006 dividend to Rs10 a share from eight rupees the previous year. It announced a 1:5 stock split implying that each share with a face value of Rs10 will be split into five of two rupees. The market value of its shares will also change accordingly. Ã¢â¬ÅThis will increase liquidity in the market and make the stock more affordable to small investors,Ã¢â¬Â said ABB India Chief Financial Officer K Rajagopal. 

http://www.thenews.com.pk/daily_detail.asp?id=43173


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## Neo

February 17, 2007 
*Indian mobile firms plan to invest in Pakistan*

By Nizamuddin Siddiqui

BARCELONA, Feb 16: At least two companies headed by Indians who took part in the 3GSM World Congress-2007, which ended here on Thursday, want to invest in Pakistan's growing cellphone sector.

Senior officials of the two companies told Dawn that their representatives would be visiting Pakistan soon to look for opportunities as well as for partners.

In their view, the sector, with more than 46 million cellphone users, will grow at a rapid pace because there's still a lot of untapped potential in the country.

Hungama Mobile Ã¢â¬â which specialises in mobile entertainment and which made waves at the mega event as much by launching unique products as by inviting Lara Datta and Sania Mirza Ã¢â¬â plans to send Ali Hussein, their assistant general manager, to Pakistan.

The other Indian-led company Ã¢â¬â PocketSurfer, which is based in Canada Ã¢â¬â will have its chief executive officer, Suneet Singh Tuli, come over to Pakistan.

Mr Tuli thinks that the hand-held device his company has developed will find popularity among Pakistanis who love to browse the internet but who cannot afford computers. His internet browser could be marketed at a low price provided the cellphone operators Ã¢â¬â in Pakistan's case the Pakistan Telecommunication Company and Pakistan Telecommunication Authority Ã¢â¬â pick up some of the bills involved.

"We think that hand-held browsers can strike it big in developing countries, like Pakistan," he remarked.

"You see, in Pakistan and India not many people can afford to buy computers. But they can own pocket browsers as they can cellphones."

Mr Tuli was of the opinion that his PocketSurfer, which was launched at the 3GSM Congress, could become particularly popular among students. The full potential of the market could not be gauged properly until the hand-held browser was introduced into it, he claimed.

Ã¢â¬ÅWe need to provide the right tools to our people. And only afterwards can we judge whether something will catch on or not."

He informed this reporter that he had sent a proposal over the launch of his device to the state government of Bengal in India a few months ago. "We plan to do the same with the Pakistani government."

Ali Hussein of the Hungama Mobile said his company had a lot of experience in the Indian market. "We have worked hard there. The market was a poor one a few years ago vis-a-vis copyright laws etc.

"We have not only marketed products in that messy market but also have managed to help clean it up. We may do the same in your country, but we need to find the right partners there."

http://www.dawn.com/2007/02/17/ebr7.htm


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## Neo

Friday, 16 February 2007

*The pitfalls of the 'economy game'* 

By Kaushik Basu 
Professor of economics, Cornell University 



> 'India is on a materialistic high'


This is the time of the year in India when interest in the economy peaks. With the annual union budget presentation coming up at the end of February, one can feel the tempo in the Delhi air. 

This financial year, 2006-07, is expected to close with a GDP growth rate of 8.5%, which will make it three consecutive years of over 8% growth. 

Also, Foreign Direct Investment (FDI) into India has risen sharply this year. 

The prime minister's Economic Advisory Council has estimated a figure of $9bn, and, more recently, the commerce ministry suggested that it will be above $12bn. 

*Handsomely endowed *

Whatever the final estimate, it is beyond doubt that it will be a sharp rise over last year's FDI of $4.7bn. 

This will also be the year that FDI will exceed money that comes into India as portfolio investment. 

Inevitably, there is mention in the press about how India has not only broken away from the relatively slow Hindu rate of growth but may actually be entering into a Confucian growth path. 

The comparison is especially interesting to me since in December I came into India directly from China. 

I had gone to Xiamen University, located where China abuts into Taiwan - in fact one can see some Taiwanese islands from the beach next to the University. 

The Chinese boom is now so obvious that it needs no statistical reiteration. 

Xiamen airport, which is small by Chinese standards, is a top-class international airport, much bigger than Delhi or Mumbai and more handsomely endowed with shops and traveller facilities than any Indian air terminal. 

The city of Xiamen seemed on an entrepreneurial high. 

[/quote]'The Chinese boom is so obvious' [/quote]

The periodic chimes from the Nanputuo Buddhist temple situated on a slope next to my hotel sounded serene and beautiful because they were so anomalous with the new materialism. 

Coming into India a traveller cannot but notice the gap - the poverty is visibly greater and the infrastructure palpably worse. 

Yet it is evident that India also is on a materialistic high. 

It is an irony of our times that if you want to get away from extreme materialism you may have to think of going to Europe or America. 

Banks are like bustling bazaars with people seeking advice on where to invest their money and entrepreneurs seeking loans. 

Car show rooms are spilling over, with new models and customers vying for the attention of overworked agents. 

Much of this visual impression is statistically confirmed. 

*Employment generation* 

India's industrial output growth rate reached 14% per annum by the end of last year - the highest since 1996. 

Given that most of India's boom thus far has been in the area of services, this stirring of the industrial and manufacturing sector is reason for hope. 

Since the country is starting out on a low base in manufacturing, the growth potential is large. And this sector also brings with it the potential for greater employment generation. 

Also, India's fiscal situation is better than it has been in decades. 



> Millions have been bypassed by the economic boom



It looks as if for the first time India could get into a sustained annual growth rate of nine to 11%, which would indeed be comparable to China. 

It is important at this point to realise that the "economy game" is not like cricket or war. 

Your opponent's loss does not mean your victory. 

Typically, when another nation does badly, it is bad news for you too - the global economy is not a zero sum game. 

Hence, India doing well should be good news for China, and vice versa. 



> The government needs to be active in redistributing the spoils of high growth to those who are bypassed by the market



Amid the good news I must sound a note of caution. Indian inequality, especially regional inequality, is on the rise. 

There are vast tracts and millions of people who are completely bypassed by the boom. 

It would be foolish of our government to ignore this, since it can destabilise the nation politically and stall the economic resurgence. 

The government needs to be active in redistributing the spoils of high growth to those who are bypassed by the market. 

There is also a huge amount of work to be done in cutting down bureaucratic inefficiency and controlling corruption - India is among the worst in the world in these respects. 

But even with all these caveats, there is no denying that the Budget of 2007-08 is coming at a propitious time, and the Indian economy could well be at the start of the best 20 or 25 years in its history. 

http://news.bbc.co.uk/2/hi/south_asia/6365851.stm


----------



## Neo

*India begins $1.9 billion Delhi airport revamp *

NEW DELHI: India started work on Saturday on a project that will enable New Delhi airport to handle 37 million passengers a year by 2010, more than double its current capacity, aviation officials said. 

The 85-billion rupee ($1.94 billion) revamp will see a third terminal building constructed in the next three years and a new runway by 2008 to ease congestion at the airport. The new runway Ã¢â¬â the airportÃ¢â¬â¢s third landing strip Ã¢â¬â would be one of AsiaÃ¢â¬â¢s longest at 4,430 metres (14,530 feet) and would allow Airbus A-380 super jumbos to land, Delhi International Airport Pvt Ltd (DIAL) said. Work will be completed before the Commonwealth Games open in New Delhi in Oct 2010. The DIAL is a consortium in charge of developing, maintaining and operating New DelhiÃ¢â¬â¢s Indira Gandhi international airport. 

Ã¢â¬ÅWith the completion of this airport, Delhi will boast of a world class airport which would not only cater to growing aviation traffic, but also serve as a benchmark for other airports,Ã¢â¬Â DIAL managing director Srinivas Bommidala said in a statement. IndiaÃ¢â¬â¢s booming economy and reforms have led to around half a dozen private airlines starting operations in the past three years, putting tremendous pressure on airports in big cities like New Delhi and Mumbai. 

Passengers often have to spend over an hour in the air as planes hover overhead airports, waiting to land, and complain of poor infrastructure and facilities. Ã¢â¬ÅWe will see that infrastructure does not remain a bottleneck to IndiaÃ¢â¬â¢s economic growth,Ã¢â¬Â Sonia Gandhi, head of IndiaÃ¢â¬â¢s ruling Congress Party, said after unveiling the plaque that marked the start of construction of the new terminal building. 

Analysts say creaky infrastructure may impede a rise in IndiaÃ¢â¬â¢s economic growth rates to double digits in coming years. The economy is set to grow at 9.2 per cent in the year ending March 2007. Passenger traffic is set to grow at 20 per cent annually for the next 10 years and domestic airlines would need at least 400 new planes by 2012 to the meet such growth. DIAL, a joint venture of IndiaÃ¢â¬â¢s GMR Infrastructure Ltd, German airport operator Fraport and the state-run Airports Authority of India, won the rights in February 2006 to develop New Delhi airport.

http://www.thenews.com.pk/daily_detail.asp?id=43320


----------



## Neo

*Tata to restart talks on $3bn investment *

DHAKA: IndiaÃ¢â¬â¢s Tata Group is moving to restart talks with BangladeshÃ¢â¬â¢s caretaker government on a three-billion-dollar investment plan to build a slew of industrial projects, an official said on Saturday. 

The group suspended its proposal to construct a power plant, steel mill and fertiliser factory as well as to develop coal mining last July after the previous government halted talks until after national elections. 

The polls, originally set for January, have since been postponed amid charges of vote-rigging and widespread political unrest. No new date has been set. Ã¢â¬ÅI met the foreign ministry advisor early this week and discussed how we could take the proposals forward,Ã¢â¬Â TataÃ¢â¬â¢s Bangladesh representative Syed Manzer Hossain told AFP. 

Ã¢â¬ÅOur proposals remain the same and weÃ¢â¬â¢re waiting for a response from the government to take it forward and restart negotiations,Ã¢â¬Â added the official, who also met with the advisor in charge of the energy ministry earlier this month. 

The Tata plan would be the biggest single foreign investment in the impoverished South Asian nation. Bangladesh has been under emergency rule since early January after the outgoing Bangladesh Nationalist Party government and the opposition Awami League failed to reach agreement on staging credible polls. 

The new military-backed caretaker government has said it will take up all necessary projects to promote long-term economic growth.

http://www.thenews.com.pk/daily_detail.asp?id=43321


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## Contrarian

I hope the Delhi Airport GMR revamps is truely one of the best.


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## Neo

Aren't you building a complete new airport in Delhi aswell?


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## Contrarian

Nope. This one is being expanded and completely revamped. Its going to be a HUGE airport. 
Mumbai is getting two airports. The existing one is being revamped, just like Delhi's though its run by a different company. And they are getting another airport in Navi Mumbai, that is gonna be one of the best too.

Hyderabad has just one airport that actually belongs to HAL. The amount of traffic on that airport is SO much that HAL cannot carry out its R&D for its aircrafts. Its cripling their development schedules. So another airport is being built in Hyderabad. This will be a greenfield airport. Again, its planned size is f*cking huge. They want to make it into an airport that caters to the entire demand in the South.

Bangalore, i think a new airport is being build, though i am not sure. The company running it might be revamping it completely and expanding it.

Actually most of the airports in India will be either getting revamped and expaded or getting new ones. And most second tier cities too will get new airports. Infact there are plans to allow privately owned airports in the country. Currently the govt owns the airports, but their management and all rights belong to private companies, this has too just happened recently.


----------



## Janbaz

*Bharti to spend $2.5bn on retail network *

NEW DELHI: India&#8217;s Bharti group aims to spend up to $2.5 billion by 2015 building hypermarkets and supermarkets as rivals vie for a slice of a fast-growing retail market. 

Bharti will also meet executives of Wal-Mart Stores Inc, the world&#8217;s biggest retailer, this week to finalise a wholesaling joint venture in Asia&#8217;s fourth-biggest economy. 

&#8220;We are in discussions ... they are coming this week, and the team will be led by Mike Duke (Wal-Mart vice chairman and head of international operations),&#8221; Rajan Mittal, joint managing director of Bharti Enterprises, told a news conference. 

Bharti Retail Pvt Ltd, wholly-owned by billionaire Sunil Mittal&#8217;s Bharti Enterprises, will build hypermarkets, supermarkets and other stores to sell mainly locally sourced groceries, electronics, clothing and furniture, Mittal said. The first stores will open in Indian cities with a population of 1 million in the first quarter of 2008, and Bharti expects revenues of Rs200 billion ($4.54 billion) by 2015. Mittal said Bharti was looking at about 10 million sq ft of retail space and will hire 60,000 staff. 

Bharti, a conglomerate that combines telecoms, commercial farming, insurance and software businesses, controls India&#8217;s top mobile phone operator, Bharti Airtel Ltd Local traders and politicians have opposed opening up India&#8217;s retail sector, which is estimated at $300 billion and could more than double by 2015, according to Technopak Advisors. 

India allows single-brand foreign retailers to take up to 51 per cent in a joint venture with a local firm, but bans multiple-brand retailers from investing in front-end retail. 

Earlier this month, one of India&#8217;s most powerful politicians wrote to the prime minister expressing his concerns about &#8220;the Wal-Mart effect&#8221; on domestic retailers, and the need to study the impact of transnational supermarkets on the &#8220;livelihood security&#8221; of small store owners. Organised retail makes up only about 3 per cent of India&#8217;s retail industry, but is forecast to rise to 15-18 per cent by 2011-12, attracting global interest from large retailers such as Britain&#8217;s Tesco Plc and France&#8217;s Carrefour Shoprite Holdings, Marks & Spencer Plc and Germany&#8217;s Metro AG have wholesale cash-and-carry and franchise operations in India. 

Bharti and Wal-Mart will also have to contend with retail operations of local rivals including Reliance Industries Ltd, ITC Ltd, Pantaloon Retail Ltd, the Tata group and the Aditya Birla group. &#8220;We are totally in line ... in sync with the government thought,&#8221; Mittal said. &#8220;We want to co-exist with smaller convenience stores,&#8221; he said, referring to the thousands of non-organised retailers that control much of the retail sector. &#8220;We are even looking at franchising these stores.&#8221; Shares in Bharti Airtel, valued at $34 billion, rose as much as 2.4 per cent to a new high of Rs810.90 in a firmer Mumbai market on Monday. 

The News.
http://thenews.jang.com.pk/daily_detail.asp?id=43578


----------



## Janbaz

*Mobile phones to fuel Internet growth *

BANGALORE, India: Google vice president and chief Internet evangelist Vinton G Cerf predicted on Tuesday that mobile phones, not personal computers, will fuel growth of the worldwide web as countries like India snap up millions of handsets monthly.

From 50 million in 1997, the number of people who have logged onto the Internet has exploded to nearly 1.1 billion, Cerf, who is considered one of the founding fathers of the Internet, said.

Yet, the Internet only reaches a sixth of the world&#8217;s population, Cerf toldreporters during a visit to this southern city, known as India&#8217;s Silicon Valley, where Google has a research and development facility.

&#8220;You will get those other 5.5 billion people only when affordability increases and the cost of communication goes down,&#8221; said Cerf, 63, who joined Google in 2005. &#8220;The mobile phone has become an important factor in the Internet revolution.&#8221;

The silver-bearded scientist, dressed in a three-piece suit for a presentation on the Internet, is hearing-impared and had to read the lips of reporters who asked him questions.

Worldwide there are 2.5 billion mobile-phone users, whose numbers are growing rapidly in developing countries led by China and India, the world&#8217;s most populous countries, Cerf said in his presentation.

India, a country of 1.1 billion people, alone is adding seven million mobile-phone users a month, a powerful enough lure for British telecom giant Vodafone to pay 11.1 billion dollars for a controlling stake in local mobile firm Hutch-Essar this month.

Handset manufacturers and mobile-phone companies are offering an array of Internet-enabled features and services including payment and navigation systems while dropping charges under the pressure of growing competition that will bring many of the new subscribers to the Internet, Cerf said.

&#8220;There are an enormous number of applications available on mobiles,&#8221; said Cerf, who&#8217;s responsible for identifying new technologies and applications on the Internet for Google.

Google has rapidly expanded its research and service offices in the country at the cities of Hyderabad, Delhi and Mumbai besides Bangalore, but Cerf said he has been visiting India since the early 1990s to understand its tech scene.

The company wants to tap the talent of Indian engineers to innovate technologies and widen its range of services, said Cerf.

India is estimated to have 40 million people online, a meagre 3.5 per cent of its vast population, he said, adding Google will focus on local languages, culture, content and delivery of new business models to widen the reach of the Internet.

Cerf was the co-designer with Robert Kahn of the basic architecture of the Internet.

In 2005, they both received the highest civilian honour bestowed in the United States, the Presidential Medal of Freedom, which recognised that their work on the software code used to transmit data across the Internet has put them &#8220;at the forefront of a digital revolution that has transformed global commerce, communication and entertainment.&#8221;

The Internet has brought access to the world&#8217;s information to users, introduced new business models, education services, ushered in a new advertising medium and enabled consumers to become producers, Cerf said.

It also has brought spam mail, computer viruses and worms, misinformation, fraud and social abuse, he conceded in his presentation. &#8220;This is a mirror to the population that uses it,&#8221; the scientist said.

The News.
http://thenews.jang.com.pk/daily_detail.asp?id=43737


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## Janbaz

*Mittal seeks surety for $9b Indian plant *

NEW DELHI: The Indian unit of Arcelor Mittal is ready to invest $9 billion to set up a steel plant in India&#8217;s Jharkhand state if supplies of iron ore can be guaranteed, a top company official said on Tuesday. 

Sanjeev Sengupta, director at the India office of the world&#8217;s leading steelmaker, told Reuters the firm was looking for an assured ore supply of 600 million tonnes over the next 30 years. 

&#8220;We are keen, they are keen and we have to reach a position where we get the iron ore,&#8221; Sengupta said after meeting the chief minister of Jharkhand in New Delhi. 

Earlier in the day, he had said the company was ready to agree the investment if it got &#8220;reasonable assurances&#8221; concerning access to ore mines. 

A state government official told Reuters that a follow up meeting was likely in about two weeks. 

Mittal signed an initial agreement with Jharkhand&#8217;s state administration in 2005 and has since been working out the details, including the supply of raw materials. 

The Mittal proposal would be developed in two phases, each with a capacity of six million tonnes. The first phase would be completed within four years, while the second would be up and running within a further four-and-a-half years. 

The company may also build a 2,500 MW power plant to provide electricity to the steel unit. 

In December, another Indian state, eastern Orissa, cleared a separate proposal by the firm to invest in a 400 billion rupee ($9.06 billion) project in the mineral-rich Keonjhar region. 

Steelmakers and mining firms have been drawn to India by its relatively cheap labour and the world&#8217;s third-largest combined deposits of coal and iron ore. 

Mittal was the second foreign steel maker to make a move on India&#8217;s ore reserves with steel demand likely to boom in step with India&#8217;s fast-growing economy, which is expected to expand by over 9 percent in the year to March-end. reuters

Daily Times.
http://www.dailytimes.com.pk/default.asp?page=2007\02\21\story_21-2-2007_pg5_23


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## Neo

February 21, 2007 
*Mittal to invest $720m in refinery*

NEW DELHI, Feb 20: Steel magnate Lakshmi Mittal will invest $720 million for a 49 per cent stake in a refinery to be run by India's state-run Hindustan Petroleum (HPCL), the government said on Tuesday.

Ã¢â¬ÅMittal Investment and HPCL will hold 49 per cent stake each in the refinery,Ã¢â¬Â Oil Minister Murli Deora was quoted as saying by the Press Trust of India.

The remaining two per cent of the proposed 180,000-barrel-per-day refinery in north India will be offered to financial institutions, Deora said.

Last year, Britain's oil giant British Petroleum abandoned efforts to build a refinery with HPCL in Punjab state after signing a letter of intent in 2005.

Media reports said that BP later deemed the deal unattractive.

The HPCL board had on Monday cleared the joint venture for the refinery, which is likely to be commissioned by the end of 2010.

Mittal will use the family's investment arm, which is part of the same group as the world's largest steelmaker Mittal Arcelor, as the company represented in the deal, Deora said.

Mittal Investments already has a partnership with the state-run Oil and Natural Gas Corporation for oil exploration.

HPCL is the second-biggest oil refining and marketing company in India with a turnover of $14.7 billion.

It has coastal refineries near the financial hub of Mumbai and in the southeast port city of Vishakhapatnam.

http://www.dawn.com/2007/02/21/ebr14.htm


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## Neo

Thursday, 22 February 2007
*India state airlines set to merge * 

The merger is the latest shake-up in the Indian aviation sector 
India's two main state-owned airlines are set to merge in an effort to compete more effectively with private carriers, officials say. 
The interests of the workers of Air India and Indian "would be taken care of" after the merger, said Federal Aviation Minister Praful Patel. 

Officials said the deal would make the new entity more competitive, yielding annual savings of 5bn rupees ($113m). 

Privately-owned rivals have taken market share from the duo. 

Mr Patel said the merger of the two airlines would be completed "within two to three months". 

"We wish to see a big, strong national carrier. This is our intention," he said. 

The Indian government hopes that the combined firm will become one of the world's top 30 airlines. 

*Merger concerns *

The two airlines have a combined fleet of 122 planes and over 34,000 employees, including 1,315 pilots, according to one report. 

Both the airlines have a 20% share of their respective markets in India and abroad and jointly carry over 12 million passengers. 

Analysts say the merger will create one of the top airlines in the world in terms of the number of planes, but different corporate cultures and a diverse fleet may make things difficult. 

Set up in 1932, Air India is the country's flagship airline, serving more than 40 destinations worldwide. 

Air India has suffered as the country has opened up its skies 

Indian, which began operations in 1953 as Indian Airlines, is focused on the domestic market and has a turnover or around $ 1.4 billion, according to the company. 

Air travel has been growing rapidly in India as income levels rise and long-established players such as Air India and Indian have been challenged by more recent entrants. 

Four budget airlines and at least two privately owned carriers have posed a stiff competition to the two state run airlines, with their profits under pressure. 

http://news.bbc.co.uk/2/hi/south_asia/6384881.stm


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## Neo

*India's expansion continues, but for how long?*
Posted February 14, 2007

NEW YORK -- The empirical evidence of India's enormous economic expansion in recent years--in particular the sharp run-up in stocks there--has proven an irresistible draw to some mutual fund investors. But those chasing the siren song should be aware that, as with any developing economy, there could be bruising stumbles.

"If you have a car speeding along and it hits a speed bump, the aftershock is going to be that much greater the faster the car goes. India is going to hit some speed bumps as it goes," said Andrew T. Foster, director of research at Matthews International Capital Management LLC, a San Francisco fund manager specializing in Asian investing.

The rise in stocks has stirred concerns that valuations have risen beyond where they should be and that the country's central bank will continue to raise interest rates at it tries to tamp down inflation.

On Tuesday, the country's central bank, the Reserve Bank of India, increased the proportion of deposits that commercial banks must hold in cash in order to help slow the economy.

"The Indian growth story is continuing to be reaffirmed," said Dhruva Raj Chatterji, a research analyst in Mumbai for fund-tracker Lipper Inc. While growth continues, other forces are building that could throw some cold water on the frenetic pace there.

"It has been a sustained bull run for the past three years because of which India is one of the most expensive markets in the world. Valuations are kind of the higher side," Chatterji said.

He questioned whether the market has overestimated how much Indian companies will continue to earn. Earnings growth has in recent years hovered near the breakneck pace of more than 20 percent.

Chatterji said the amount of money foreigners invested in the country slowed in January.

"Interest rates are on the rise in India. People are thinking about whether foreign fund flow will continue with the same vigor as it has in the past," he said.

Subodh Kumar, chief investment strategist for CIBC World Markets, contends investors should consider interest rates before investing in India.

Inflation hit 6.6 percent in late January--a two-year high. On Jan. 31, the Reserve Bank of India raised the repurchase rate, which is the rate at which it lends to commercial banks, by a quarter-point, to 7.5 percent.

"I think that the markets here in India realized kind of late that the central bank is looking at inflation and is still prepared to raise interest rates," Kumar said.

"A lot of the speculative activity that was in the Indian market is coming out of the market," Kumar said.

Still, funds for U.S. investors continue to show growth. The Matthews India Fund, for example, with assets of about $718 million, has shown a year-to-date return of 2.14 percent.

Chatterji is concerned stocks in India, and therefore the mutual funds that invest there, could face difficulty later in the year because the number of initial public offerings has increased sharply in the new year. The enthusiasm of investors looking to snag their share of the Indian market risks depleting how much money will be left for investment later, he said.

However, Chatterji is optimistic that even if a sizable correction occurs, stocks would prove resilient.

"Whenever there has been a correction in India there has been tremendous buying support," he said. 

http://www.chicagotribune.com/busin...037feb14,0,520811.story?coll=chi-business-hed


----------



## Neo

*India Logistics Industry: $125 Billion Goldmine *

London, 21 February 2007 - IndiaÃ¢â¬â¢s third-party logistics (3PL) market is all set to experience a period of explosive organic growth, going by independent market analyst DatamonitorÃ¢â¬â¢s (DTM.L) latest research. The report, Ã¢â¬ÅIndia Logistics Outlook 2007,Ã¢â¬Â predicts high double-digit growth rates for both outsourced and contract logistics in India. With IndiaÃ¢â¬â¢s gross domestic profit (GDP) growing at over 9% per year and the manufacturing sector enjoying double digit growth rates, the Indian logistics industry is at an inflection point, and is expected to reach a market size of over $125 billion in year 2010.

Ã¢â¬ÅStrong growth enablers exist in India today in the form of over $300 billion worth of infrastructure investments, phased introduction of value-added-tax (VAT), and development of organized retail and agri-processing industriesÃ¢â¬Â, say Praveen Ojha, Logistics analyst with Datamonitor and author of the study. Ã¢â¬ÅIn addition, strong foreign direct investment inflows (FDI) in automotive, capital goods, electronics, retail, and telecom will lead to increased market opportunities for providers of 3PL in India.Ã¢â¬Â

However, as a result of the under-developed trade and logistics infrastructure, the logistics cost of the Indian economy is over 13% of GDP, compared to less than 10% of GDP in almost the entire Western Europe and North America. Ã¢â¬ÅAs leading manufacturers realign their global portfolios of manufacturing locations, India will have to work on such systemic inefficiencies, in order to attract and retain long-term real investments.Ã¢â¬Â

Consumer markets to lead growth in outsourced logistics
3PL/outsourced logistics is the outsourcing of a companyÃ¢â¬â¢s logistics operations to a specialised firm which provides multiple tactical logistics services for use by customers as opposed to the respective company having a business unit in-house to oversee its supply chain and transportation of goods.

With increased geographical distribution of incomes in India, the consumer markets are extending beyond the five metros of Mumbai, Delhi, Bangalore, Chennai and Hyderabad. However rather than being pre-emptive, the companies are only following with new distribution outlets. As such the increased competition across industry verticals is forcing firms to focus on product distribution, and logistics outsourcing is gaining further momentum with this.

According to Datamonitor, outsourced logistics, at just above one-quarter of the entire $90 billion Indian logistics market, is slated to grow at a compound annual growth rate (CAGR) of over 16% from 2007-10. 

The fragmented industry structure: Opportunity for 3PL integrators
The Indian logistics industry is characterized by dominance of a disorganized market. Transporters with fleets smaller than five trucks account for over two-thirds of the total trucks owned and operated in India and make up 80% of revenues. The freight forwarding segment is also represented by thousands of small customs brokers and clearing & forwarding agents, who cater to local cargo requirements. 

In order to reduce logistics costs and focus on core competencies, Indian companies across verticals are now increasingly seeking and using the services of third-party logistics service providers (3PLs). 

Realizing the potential in the contract logistics market, 3PL service providers are expanding their basket of services as companies are now looking for more than just transportation of their products and raw materials. Trucking and courier companies are now leveraging their network to provide express distribution and warehousing. Similarly, freight forwarders are moving towards owning assets in the form of Container Freight Stations (CFS), Inland Container Depots (ICD) and container trains. 

Furthermore, 3PLs are also increasing investments to become end-to-end integrated players. As per the investment plans of the leading 3PLs in India, the logistics industryÃ¢â¬â¢s capital expenditure is progressively increasing to almost match its revenue growth, a strong indicator of both 3PLs desiring to become integrated service providers and the industry enjoying investment-driven growth. 

Infrastructure congestion: the key challenge
According to Datamonitor, the logistics industry in India is currently hampered due to poor infrastructure such as roads (over 70 % of freight transportation in India is via roads), communication, ports and complex regulatory structures. 

The National Highways (NH) form only 2% of the entire road network in India, but handle over 40% of the national road freight traffic, putting enormous pressure on the highway infrastructure. Also, on an average a commercial vehicle in India runs at a speed of 20 miles per hour (mph) compared to over 60 mph in the mature logistics markets of Western Europe and the USA. 

In addition, the twelve major ports of India handle volumes higher than their full capacity, resulting in pre-berthing delays and longer ship turn-around time compared to even the East Asian counterparts like China and South Korea.

Phased introduction of VAT Ã¢â¬â A supply chain boon
The amount of time spent in complying with inter state tax requirements and at transport check points affects the cost and competitiveness of both 3PL providers as well as their customers. VAT, which is expected to replace a plethora of state and central government taxes, is likely to enhance the efficiency of the logistics industry in India. Given the current thrust on infrastructure investments in India, the implementation of VAT is likely to boost the efficiency for these stakeholders by lowering transit times and the associated paper work.

Praveen Ojha concludes:
Ã¢â¬ÅWith the collective economic interaction of growing per capita disposable incomes, fast growing manufacturing and organized retailing sectors, increasing external merchandise trade, infrastructure investments by the government and 3PL capex plans, both IndiaÃ¢â¬â¢s logistics industry and the 3PL sector of this market are set to witness explosive growth in the next five years.Ã¢â¬Â 

http://www.pandct.com/media/shownews.asp?ID=13332


----------



## Janbaz

*Argos in Indian franchise venture *

The Argos retail name is to be taken to India through a franchise deal with two of the country's leading store chains. 
Argos will license its brand and product catalogue for use in retail outlets in India, with the first due to open in Mumbai later this year. 

Argos, which is part of the Home Retail Group, said the deal would give it a "foothold" in a fast-expanding market. 

Several other British retailers including Mothercare have used the franchise model to enter India. 

Growing market 

Existing regulations prevent most foreign retailers from opening their own stores in India and franchising is seen as a cost-effective way for firms to build a presence there. 

Argos is teaming up with Indian firms Shopper's Stop and Hypercity Retail India to launch the Hypercity Argos retail concept. 

As well as providing its own catalogue, Argos will offer IT support and advice on developing sales through the internet. 

Home Retail Group said it was excited by the opportunities in India but emphasised that its main focus remained on developing the Argos and Homebase businesses in Europe. 

"The heads of terms with Shoppers Stop and Hypercity, both pioneers in the Indian retail market, gives Argos an initial foothold in what is a rapidly expanding market," said Terry Duddy, Home Retail Group's chief executive. 

Shopper's Stop operates 22 department stores in 11 Indian cities while Hypercity Retail opened its first food and general merchandise store last year. 

Many of the UK's top retailers are casting an eye over India, as its rapid economic growth and rising income levels boost consumer spending levels. 

Tesco ended talks about a joint venture with Indian firm Bharti Enterprises late last year, while Mothercare has teamed up with Shoppers Stop to open 11 franchise outlets. 

BBC News.
http://news.bbc.co.uk/2/hi/business/6389971.stm


----------



## Janbaz

*Indian eyes Scottish whisky giant *

An Indian businessman could be the owner of one of the UK's most famous whisky firms within two weeks, according to press reports. 
Vijay Mallya has been linked with Glasgow-based Whyte & Mackay since last year but is set to clinch a deal. 

Mr Mallya's UB Group is reportedly scrutinising the firm's books ahead of a &#163;550m takeover. 

Whyte & Mackay's brands include the Jura and Dalmore single malt whiskies, Vladivar Vodka and Glayva liqueur. 

Mr Mallya also owns the Kingfisher beer labels, an airline and a fashion label. 

Dominates 

Whyte & Mackay said in October 2006 that it had received an unsolicited offer from UB Group. 

Now newspaper reports say a deal is believed to have been agreed and that "the formalities would be completed within a fortnight". 

P.A. Murali, chief financial officer of UB Spirits confirmed that the process of looking at Whyte & Mackay's books, known as due diligence, is underway. 

But he said it would be "speculative" to comment on when an agreement would be signed. 

A statement from Whyte & Mackay's chairman and chief executive said "We remain the owners of Whyte & Mackay and are still considering all of our options. The value of the business increases all the time." 

UB Group dominates the Indian spirits market, which is the world's largest for whisky. 

But Scotch whisky has only a 1&#37; foothold in the Indian market, because of the tariffs imposed by national and state governments there. 

BBC News.
http://news.bbc.co.uk/2/hi/business/6381339.stm


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## Neo

*India sets out to become microchip manufacturing hub *

BANGALORE: India is to offer microchip makers incentives including tax breaks and subsidies to set up factories, a policy the industry welcomed on Friday to lure global giants and turn the country into a chip manufacturing hub. 

Ã¢â¬ÅThe policy will go a long way in making India an attractive destination for global semiconductor and hi-tech companies,Ã¢â¬Â said Poornima Shenoy, president of the Bangalore-based India Semiconductor Association. 

The blueprint, unveiled in New Delhi on Thursday by Information Technology and Communications Minister Dayanidhi Maran who estimated it will attract up to nine billion dollars of investment, will spur rapid growth of IndiaÃ¢â¬â¢s entire electronics industry, said Shenoy. 

She estimated IndiaÃ¢â¬â¢s electronics market will expand to $363 billion by 2015, from $28 billion last year. Demand for chips that go into products ranging from mobile phones, liquid crystal displays and smart cards to personal computers and automobiles will reach $36 billion by 2015, a compelling case for chip manufacturers to set up factories in the country to tap the local market, Shenoy said. 

Ã¢â¬ÅThere are at least two major multinationals looking to invest in India as well as local manufacturers,Ã¢â¬Â she said. 

Ã¢â¬ÅWe see investment not just in chip manufacturing but also in the entire electronics eco-system.Ã¢â¬Â The policy is aimed at turning the country from a designer of chips into a manufacturing base in competition with the likes of China, Singapore, and Taiwan that have long promoted the industry. Ã¢â¬ÅThis will pave the way for high-end capital intensive IT manufacturing,Ã¢â¬Â said Vinnie Mehta, executive director of the Manufacturers Association of Information Technology, in a statement. 

The policy will enable the Ã¢â¬Åindustry to graduate from the current assembly-oriented operations to deep and competitive manufacturing capabilities.Ã¢â¬Â Globally, the microchip industry is worth an annual $240 billion, according to the India Semiconductor Association. India has 11 non-commercial chip fabrication units, focussed on defence and aerospace. 

India is already a software powerhouse, with exports set to climb 32 per cent in the year ending March to $32 billion. But the countryÃ¢â¬â¢s hi-tech manufacturing hasnÃ¢â¬â¢t kept pace. Microchips Ã¢â¬Åform the heart of hardware and soul of software in any electronic system,Ã¢â¬Â said Rajendra Kumar Khare, an electrical and electronics engineer who heads technology start-up firm Indus edge. Ã¢â¬ÅCultivation of a robust and scalable semiconductor industry is the key to making the great electron revolution happen,Ã¢â¬Â he added. Besides chipmakers, manufacturers of such products as liquid crystal and plasma display panels, storage devices, solar cells and photo voltaics will be eligible for the incentives, valid for the first 10 years of operations. 

As part of the policy to push microchip manufacturing, the government also promised interest-free loans for subsidising capital expenditure incurred in setting up chip manufacturing units. 

The incentives will be valid for the first 10 years of operations. The incentives may prove to be a magnet for giants such as Intel, AMD, Infineon, IBM and Toshiba, according to the Economic Times. 

Intel has already invested $1.7 billion in India, where it is engaged mainly in research and development and has no manufacturing base.

http://www.thenews.com.pk/daily_detail.asp?id=44184


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## Contrarian

That is good news. The government is VERY VERY keen to have semiconductor/chip fab(rication) plants here in India. They are in the process of setting up a fab city.

AMD has a tie up with another company run by an NRI and they have announced to make a chip fab plant in India. I hope this succeeds. Semiconductor fab plants may well easily turn out to be another IT style success story helping the economy IMMENSELY, as its labour intensive as well compared to IT services.


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## Contrarian

*Nath braves PMO's caution on retailAdd to Clippings*

NEW DELHI: The policy spat in the government over allowing large players in the retailing arena has escalated, with the commerce and industry ministry digging in its heels over the move even in the face of a fresh caution sign hoisted by PMO.

"There is no review of cash-and-carry (wholesale) business," commerce minister Kamal Nath said after meeting Wal-Mart Stores Inc vice-chairman Mike Duke and its Indian partner, Bharti Group chairman Sunil Mittal.

Nath was responding to a flurry of queries after a fortuitous leak of a PMO letter to the department of industrial policy and promotion (DIPP), reiterating concerns about the repercussions of the entry into retail of transnational supermarkets and large Indian corporate houses on small-scale retailers, vendors, farmers, consumers and on prices.

The letter stressed that the February 7 response from the industry department had failed to address the issues raised by Congress chief Sonia Gandhi.

Importantly, concerns about the proposed Wal-Mart-Bharti tie-up have been widely seen as the trigger for the sudden resistance to a policy measure which has been in place for years. Sonia, in her letter in early January, had expressly mentioned Wal-MartÃ¢â¬â¢s plans for India.
http://timesofindia.indiatimes.com/...MOs_caution_on_retail/articleshow/1670324.cms


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## Contrarian

*Nissan, Renault, M&M to make cars in Chennai *

CHENNAI: In a significant development, Nissan, Renault and Mahindra & Mahindra have zeroed in on Chennai for setting up a four lakh cars a year plant near Chennai.

The three companies and the state of Tamil Nadu will make an announcement on the project on Monday.

According to sources, the plant will have a total capacity to make eight lakh cars a years in two phases.

The first phase will see half of that capacity and cars are expected to roll out by end 2008. The quantum of investment and the models that are planned were not immediately available, while it is believed that the no-frills Renault Logan will be the first of the cars to be rolled out.

The factory is likely to build derivatives of Renault's no-frills Logan car. A decision on other products, including those under the Nissan badge, will be made later, the sources said.

A Reuters report said, &#8220;The three automakers will jointly own the facility in Chennai, with initial output capacity of four lakh units.....M&M will own 50&#37; while the other partners will hold 25% each.&#8221; It is also learnt that it would be fully integrated plant which will house all facets of car making, including transmission and power trains.

Nissan is a latecomer to India, where passenger car sales are projected to double to two million units by 2010. The automaker sells only the imported X-Trail SUV in Asia's fourth-biggest economy.

Besides this plant, Nissan already has a MoU with Maruti wherein the latter will build 50,000 cars under Nissan badge primarily for the European market.


----------



## Contrarian

* 41&#37; of urban Indians borrow from friends*

MUMBAI: If you thought urban Indians borrowed money for various needs primarily from financial institutions, think again.

According to a survey conducted by Max New York Life Insurance and the National Council for Applied Economic Research (NCAER), more urban households borrow money from friends and relatives compared to their rural counterparts.

The survey findings, with a sample size of 63,000 households in India, state that 41% urban Indians borrow from friends and relatives to meet social expenses while 45% borrow to pay for medical treatment.

This is a far cry from the assumption that financial services have deep penetration in urban cities. In fact, in recent times most banks and insurance companies have turned their attention to tier II and tier III centres in a bid to build business there.

In comparison, only 38% rural households depend on friends and relatives as a source of funds for meeting expenses for social functions. The trend of borrowing from unorganised moneylenders, however, is far higher in rural India (20.7%) against 7.4% of urban households, the survey revealed.

The survey also highlights that there are high levels of awareness about insurance72.9% of rural India is aware of insurance as a means of investment compared to 90.2% of urban Indian households.

However, despite this level of awareness, only 38.11% of urban Indian households have some kind of insurance protection while 18.59% of rural households have bought insurance.

There is also a huge difference in the average household incomes per annum between the people who buy insurance and those who dont. In urban households, while the average household income per annum of people who have insurance is Rs 1,33,832, this falls to Rs 72,424 in households that dont own any insurance. The same trend is seen in rural households as well.


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## Contrarian

*PMO wants commerce ministry to speed up impact assessment*

NEW DELHI: Commerce minister Kamal Nath stressed that FDI is only allowed in single brand retailing and there was no proposal to extend this to stores dealing in more than one brand. But there was no doubting the insistence to carry the process forward.

The minister appeared to make light of PMO's suggestion to commission a study "by a reputed research institution" on the possible impact.

"There are concerns and many have written to us. It (study) is an ongoing exercise... We have a huge expansion taking place in retail sector. So the study is going on," he said.

Further, Nath stood by his ministry's earlier stand that it was not possible for his department to study the impact of the Bharti-Wal-Mart tie-up since they had not submitted an application to set up shop.

In response to Sonia's letter, the industry department had informed the PMO on February 7 that Bharti's proposal - which involves setting up a 50:50 joint venture with Wal-Mart providing infrastructure and technology for the Indian company's retail venture - did not need prior government approval.

The new-found concern over FDI in retail and SEZs are emblematic of the worry that seems to be fast gripping the government that it is not being seen as having lived up to its "Congress ka haath, aam aadmi ke saath" plank.

Protests against the twin measures have got fused with indignation over the failure to stem farmer suicides, as well as discontent over rising prices, triggering fears in Congress that they may have to deal with a combustible cocktail of angst.

Nath, however, took care to dispel the perception that he was out of sync with the fresh priorities of the governemnt. Saying that interests of small retailers was paramount, Nath said the government did not intend to review the FDI norms for wholesale cash-and-carry business. "Small retailers must be protected," he said.

Congress contested the suggestion that the party leadership was stapling all the blame on one ministry when there was a consensus on allowing limited FDI in retail. "To exhort somebody to get things done does not necessarily mean fault finding," said party spokesperson Abhishek Manu Singhvi.

PMO's letter to the industry department, however, made it clear that PM Manmohan Singh was not satisfied with the response from Nath's ministry.

"After perusal of the comments sent by DIPP, the PM has observed that the president, AICC, had raised a specific issue in her letter, referring to the need for a careful study of the likely impact of the entry into retail trade of transnational supermarkets on the livelihood security of small-scale retailers," the letter said.

"The ToRs (terms of reference) should lead to results which could be a guide to policy-making in this sector. The timeframe for completion of the study should be reasonable so that it can feed into policy making in the near future," the letter said.


----------



## Contrarian

*FM may slash import duty on edible oils, metals*

NEW DELHI: The government appears set to slash import duty on base metals, soya oil and palm oil in the budget in a bid to tame inflation, which dipped marginally to 6.63% during the week-ended February 10.

With pulses, wheat and onions raising political uproar, the government is also likely to extend the ban on wheat and pulses export till March 2008, besides allowing zero duty import of the commodities as part of the strategy to augment domestic supply and check further price rise.

Sources said the move to extend the ban on export of pulses and allowing zero duty import of wheat was discussed by the cabinet committee on prices, while a reduction in the import duty on soya oil by 10% and that on crude and refined palm oil by 5% each has been endorsed by a committee of secretaries (CoS) earlier this month.

The government is also likely to import 2 lakh tonnes of pulses to augment supplies. Between April and December 2006, India, which is a net importer of pulses, has already imported 16.6 lakh tonnes of pulses estimated to be worth Rs 2,600 crore, 19% higher than the 14.05 lakh tonnes imported during the corresponding period last year.

The CoS has also recommended canalising the export of maize for six months, besides initiating more steps to check the export of onions since there is large demand from Pakistan, Sri Lanka and Bangaldesh. According to government's estimates, onion exports are expected to rise nearly 50% to 11.5 lakh tonnes and steps like more stringent norms for a government clearance to export consignments are in the offing.

But it is not just household consumption items which has got the government worried. The CoS has also asked the petroleum ministry to look into the steep increase in prices of naphtha, furnace oil and aviation fuel, which the government fears is resulting in higher cost for the manufacturing sector.

In recent weeks, manufactured goods prices has emerged as the major driver of inflation as companies are unable to absorb any more increase in input costs and have passed it on to consumers.

The steps, which are expected in the budget, are in addition to the host of duty cuts which have been announced in last few weeks.

But what has got government worried is the limited impact that the measures have had on inflation. At 6.63%, inflation was only marginally lower than last week's 6.73%, but was much higher than the 3.81% registered during the corresponding period last year.

The steps on pulses and wheat are the result of the government's estimates that the domestic crop may not be sufficient to meet local demand and the only way out was to free imports to keep prices under control.


----------



## Contrarian

*Service tax net to cover lawyers, nursing homes*

MUMBAI: The finance ministry is likely to cast the service tax net wider to capture lawyers, nursing homes and amusement parks when he presents the budget on February 28.

FM P Chidambaram is also likely to redefine certain services to plug loopholes through which some service providers such as bus fleet owners were escaping without paying tax, sources told TOI.

They said the minister is likely to add more number of services to the list of taxable ones than he did last year. In his previous budget, Chidambaram had added 15 new services and also withdrawn exemption to six more. Now altogether 98 services are taxed at the rate of 12.2&#37;.

The Finance Bill is likely to propose amendments to expand the scope of some services such as tour operators, minor port services and certain banking and financial services.

Currently, for example, the definition of a tour operator service is borrowed from that of a tourist vehicle under the Motor Vehicles Act, 1888, which calls a tourist vehicle a 'contract carriage'.

That has brought most tour operators under the tax net, but allowed bus owners who run only their fleet of vehicles for touring to avoid paying it.

The service tax department wants this loophole to be plugged by inserting an explanation to include all 'contract carriage' permit holders under the tour operator definition in the Finance Act.

However, such a change could also compel state-owned transport corporations to pay the tax. State transport corporations may then be forced to take the unpopular decision of raising fares.

At minor ports where ships cannot dock, cargo is unloaded to barges to transfer them to the terminal. The barge operators do not pay tax on the revenue from transporting goods from ships to the terminal arguing that it is movement by sea and should be considered freight.

"As water transportation is not covered under service tax, this leg of service automatically is taken out of the ambit," said Vikram Nankani, partner with Mumbai-based Economic Laws Practice.

The tax department now wants the government to include all minor port services to be taxed.

The scope of services that are called "transfer of information and data processing" may also be widened.

This is in addition to some amendments to be made on service tax on depository participants, consideration earned by the contractors appointed for toll collection, liability of money changers and underwriting services.

Service tax has become one of the major money spinners for the government. In 2006-07, service tax collections are expected to touch Rs 40,000 crore against the targeted Rs 34,500 crore.

In 2005-06, the centre had collected over Rs 21,000 crore against its target of Rs 17,500 crore.


----------



## Contrarian

*Trans fat on food labels may become mandatory*

MUMBAI: India has woken up to the heart-risk of trans fat, found in fast food products such as burgers, dairy products, cakes, biscuits, cookies, chips and namkeens made with hydrogenated oil. Trans fat is an unhealthy fat that forms when liquid oils are converted into solid fats, using hydrogen.

According to a source in the ministry of health and family welfare, from August, manufacturers will have to compulsorily mention the the presence, if any, and level of trans fat and saturated fat (also, unhealthy for the heart) on product labels. The US made such a listing mandatory from January 2006.

Currently, food products sold in India have to mention only ingredients and preservatives used on labels, says Amitabh Chandra, commissioner at Maharashtra Food and Drug Administration.

Other than lack of awareness about trans fat content in products, consumers face an additional handicap-absence of information on the subject on government websites.

Says Pritee Shah of Ahmedabad's Consumer Education & Research Centre (CERC), "In the US, everything (information) is available on the FDA website. Here, there is nothing. There should be credible information from the government's side."

The USFDA site, for instance, advises that though restaurants do not have to provide the fat content in prepared food, customers can ask about the kind of oil used in cooking.

The biggest source of trans fat in India, says a source at Hyderabad's National Institute of Nutrition (NIN), is vanaspati, which is a hydrogenated fat.

But so far, the institute's studies on vanaspati have been conducted only on animals. NIN is a part of the Indian Council of Medical Research and recognised by the World Health Organisation as a centre for advanced training in nutrition.

On the ministry of health's instructions, the institute will soon conduct a regionwise study on trans fat content in vanaspati, throughout the country. "The issue is being discussed with the ministry,"says the source.

In a move that highlights the issue's seriousness, CERC has also independently started testing for trans fat content in processed food. "The study will take a minimum of three-four months,"says Shah.

The NIN source says trans fat content in vanaspati manufactured by reputed companies is being controlled below the acceptable 10&#37; of its total fatty acids content.

In local products, though, the content varies from 15% to as high as 40%. This happens is because, "for preparing vanaspati, manufacturers use cheap and unconventional oils found in bulk such as cottonseed oil and sometimes rice bran."

This is where fixing a maximum limit for trans fat content gains its relevance, as, at present, there are no regulations on the subject.

A source, though, says it may be a couple of years before the limits are actually fixed.


----------



## Contrarian

*Bharti, Wal-Mart finalise retail JV*

NEW DELHI: Despite the controversy on retail, Bharti Enterprises announced that its proposed joint venture with Wal-Mart was on track and well within the country's regulatory framework.

"The JV on retail has been finalised and legal agreements are being worked out... We expect to sign an agreement in the coming weeks," Bharti Enterprises chairman Sunil Bharti Mittal said after meeting planning commission deputy chairman Montek Singh Ahluwalia, along with visiting Wal-Mart vice chairman Mike Duke.

Significantly, minister of commerce and industry Kamal Nath said after meeting Duke on Friday that there was no plan to allow foreign direct investment in multi-brand retailing.

He added there would no review of existing FDI policy regarding wholesale cash-and-carry sectors.

The development comes close on the heels of UPA chairperson Sonia Gandhi writing to the PM expressing concern about "the Wal-Mart effect" on domestic retailers, and the need to study the impact of transnational supermarkets on the "livelihood security" of small-store owners.

Foreign direct investment (FDI) in multi-brand retail is not allowed as per government policy, but 100&#37; overseas investment is allowed in cash-and-carry (wholesale) business.

Mittal added Bharti's JV agreement with Wal-Mart would be for cash-and-carry and back-end linkages and asserted that it was within policy guidelines.

"Wal-Mart is going to apply for a joint venture, only in the area where policy exists," he said. Bharti, which recently announced an investment of $2.5 billion in the front-end of retail operations, announced that it would partner the small store-owners through a franchise route.

He said: "Bharti Retail will not get a preferential treatment from the JV, as it will supply to the kirana stores".

Moreover, after meeting Wal-mart executives, Union agriculture minister, Sharad Pawar said the expertise of Wal-Mart in the area of supply chain will definitely be useful for Bharti to set up their own network.

Pawar said, on the face of it, it looked like that under the contract with Bharti, farmers would be able to sell their produce at a better remunerative price.

Replying to a query, Pawar made it clear that differences among political parties were limited to permitting FDI in the retail sector and not in outsourcing of agricultural produce.


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## Contrarian

*Black Friday at Dalal Street*

NEW DELHI: Ahead of the budget next week, for the fifth straight day in running, the markets slid without support from any major quarter. It was a free fall in most counters on the back of sustained selling pressure.

Sensex nosedived below 13,600 and Nifty slipped to 3950 mark in intra-day trade. All the BSE sector indices closed in the red. Cement, pharma and banking stocks were the worst hit.

Most market analysts attributed this fall to pre-budget jitters, inflation concerns, stretched valuations, rising interest rates and profit booking across the bourses and equities. UPA Government&#8217;s assurance that more steps would be taken to tackle inflation and price rise had no positive impact on the markets.

President&#8217;s address to both houses of parliament has hinted at Finance Minister P.Chidambaram announcing these measures in the union budget later next week.

Sensex finally closed 388.78 points below at 13,632.53. It had opened firm, at 14,071.27 but began its southward journey immediately thereafter. The benchmark index kept on touching one low after another, 13, 568.08 being the last one.

The S&P CNX Nifty lost 101.05 points to 3,938.95. The total turnover on BSE amounted to Rs 4039 crore.

The market-breadth, which reflects the overall health of the broader market, was very weak. There were 5.4 losers for every gainer on BSE. A host of stocks from the small-cap and mid-cap space were being heavily sold. Against 2,207 shares declining on BSE, just 411 advanced. Only 36 scrips remained unchanged.

Among the 30-Sensex pack, only 1 advanced while the rest declined. In NSE, there were 102 advances and 944 declines.

Among the sectoral indices, banking stocks plunged 3.42 per cent, FMCG stocks plunged 3.35 per cent, telecom stocks fell 3.22 per cent and pharma stocks were down 2.65 per cent.

The major market movers on NSE were Gail which gained 1.80 per cent to Rs 277; Tata Steel rose 0.95 per cent to Rs 459, Suzlon Energy advanced 0.75 per cent to Rs 1,048, Reliance rose 0.53 per cent to Rs 1,419.50 and GSK Pharma rose 0.53 per cent to Rs 1,165.


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## Contrarian

*Inflation declines to 6.63 per cent*

NEW DELHI: Tight monetary and fiscal measures taken by the Government put some brake on rising prices as inflation declined to 6.63 per cent during the week ended February 10 from 6.73 a week earlier, though it was still much higher than the RBI's projection for this fiscal.

Lower prices of food products, including vegetables, egg, mutton, poultry chicken, condiments, spices, fish-inland, sooji, gur, atta , sugar and some manufactured products led the fall in inflation, which still was the second highest this fiscal.

Wholesale prices-based inflation stood at 3.81 per cent a year ago.

The Government drew flak from various quarters as inflation continued to rise over the past many weeks despite tight monetary polices and concessionary fiscal measures.

The Government, in fact, has decided to set up a special monitoring cell to keep a daily watch on price situation and provide support to states. Prime Minister Manmohan Singh had on Wednesday asked states to approach the cell for removing bottlenecks in the availability of essential commodities.

This comes in the wake of Congress Working Committee expressing displeasure over the rising prices.

Many of the measures taken like hiking Cash Reserve Ratio by the Reserve Bank and cut in petroleum prices would be reflected in inflation data to be released in the weeks to come, analysts said.

Also, pressure on commodities like wheat, pulses would ease with the arrival of fresh crop, Finance Minister P Chidambaram had said on Thursday.


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## Contrarian

*Piped gas could be reality soon in Karnataka*


BANGALORE: Bangalore and a number of towns in Karnataka may soon get piped gas supplied directly to their homes if Mukesh Ambani were to have his way. The state government has just given the green signal to Reliance Industries for investments worth Rs 14,000 crore in Karnataka.

Of this, Rs 12,000 crore is for the gas project by Reliance Industries (RIL) and another, worth Rs 2,000 crore, is for the retail by the Reliance Retail Ltd, the retail arm of RIL. Industries minister Katta Subramanya Naidu made the announcement after a meeting of the high-level clearance committee, chaired by CM H D Kumaraswamy, on Friday.

The committee has cleared 30 projects, worth a total investment of Rs 28,202.05 crore. The new projects are expected to generate employment for 1.43 lakh people in the state. Naidu said RIL's investment will be for transportation and distribution of natural gas that will cover Bangalore and 60 towns and cities across 27 districts in the state.

The project proposes to explore the concept of straight-to-home supply or piped supply of natural gas. This project alone is expected to generate close to 46,000 jobs. This is also likely to bring down the cost of cooking gas considerably.

Reliance Retail will establish an integrated agricultural retail business chain consisting of three food processing and distribution centres, 51 retail outlets or hypermarkets and 75 rural business hubs in the state. This venture is worth Rs 2,000 crore and is expected to create employment opportunities for 30,000 people.

Other manufacturing sector projects will see fresh investments to the tune of Rs 7,678.45 crore with jobs for close to 6,750 people. Naidu said,"We are seeing a new trend in the manufacturing sector. It is slowly improving in terms of development and is now attracting more investments."

Investments of Rs 1,379.5 crore in Special Economic Zones were also approved. An electronics hardware SEZ has been approved near Mysore with an investment of Rs 445 crore. The minister also said since Feb 2006, the government has approved investment proposals worth Rs 1,07,548 crore.
-----------------------------------

I did not know that Karnatake did not have piped gas. The service is available in Delhi.


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## Contrarian

*Strategies to propel growth*

HUBLI: The City Development Strategy draft report, commissioned by HDMC, has recommended setting up of a Greater Hubli Dharwad Development Authority to draw up an integrated plan for the twin cities and surrounding towns as one urban metropolitan sprawl in the coming decades.

A consortium of Administrative Staff College of India and Ernst & Young has prepared the report to address the longterm infrastructure and service delivery gaps in Hubli-Dharwad to make the second largest city in the state well-governed, livable, competitive and urban poorfriendly.

Washington-based Cities Alliance, a World Bank affiliate, has funded the preparation of the report. The exercise has also the support of City Managers Association of Karnataka. It will form the basis for the City Development Plan required to get central assistance under Jawaharlal Nehru National Urban Renewal Mission.

The report will be placed for discussion before the polling booth-level citizen committees formed by HDMC from next month to prioritise strategies suggested in it to arrive at a common development vision at the ward level upwards for the entire corporation area for the next 5 to 20 years.

It noted that the existing railway line from Dharwad to Hubli and further towards Kundgol, and also the planned Hubli-Ankola new line up to Kalghatgi, will aid the emergence of the suburban taluk towns Kundgol and Kalghatgi as integral part of the Greater Hubli Dharwad Urban Area.

Similarly, a large number of major district roads as well as village roads on the outskirts of Hubli-Dharwad have, in the recent past, witnessed considerable improvement under Central Road Fund and NABARD grants to PWD and Pradhan Mantri Gram Sadak Yojna grants to zilla panchayats.

Both these factors are most likely to spur the urban sprawl along these roads and rail route towns. The report suggested that HDMC should insist on early completion of the first phase of the Hubli-Ankola line up to Kalghatgi for the railways to become a viable mode of urban transport within the proposed metro area.

The report also recommended designating district and village roads in the metro area as urban roads and creation of a unified transport authority to ensure institutional coordination among the railway, PWD, panchayat and roadways authorities for development of link roads and bus service facilities to and from the existing railway stations up to the emerging towns.


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## Contrarian

*India, Pak agree to share gas, differ on costs*

ISLAMABAD: India and Pakistan moved a step closer to build the $7 billion Iran-Pakistan-India gas pipeline as they reached an understanding to share natural gas to be imported from Iran, but they failed to arrive at a consensus on transportation costs and transit fee.

Addressing a joint press conference after the end of the two-day official-level talks, Pakistan's petroleum secretary Ahmad Waqar said the two nations have agreed to receive 60 million standard cubic meters of gas per day (mmscmd) and share 30 mmscmd each in the first phase.

The remaining volumes would be shared in the next phase of the project. The understanding was reached at a bilateral meeting attended by petroleum officials of India and Pakistan while Iran attended it as an observer.

He said Pakistan has also agreed in-principle to the formulation of transportation costs involved in bringing the gas from Iran-Pakistan border to Pakistan-India border.

"We agreed with India (on the formulation). However, final tariff will be based on actual technical and financial inputs to be worked out by officials in coming weeks," he said.

"The two sides differed on transport costs and transit fee that India would have to pay Pakistan for using its territory, Indian petroleum secretary," MS Srinivasan said.

The transport tariff proposed by Pakistan was 2 to 2.5 times higher than what was applicable to similar distances and volumes.

"These were based on certain assumptions and the actual tariffs would be determined by actual inputs and reality on ground," he said.

Differences also remained on the transit fee as both the countries proposed different formulations. Pakistan proposed 57 cents per million British thermal unit, whereas India said it cannot be more than 15 cents per mBtu.

Waqar said both sides have agreed to complete necessary documentation to meet the target of finalising an agreement on the IPI gas pipeline project by June this year.

"We have agreed to complete documentation and will be able to sign the final document by June 2007," Waqar said.

Srinivasan said as per Pakistan's calculations the transit fee worked out to be $220 million (around 10&#37; of delivery of gas), but India believed it should be around $70 million.

"India proposed that transit fee is to be determined on the basis of commodity price, not on delivered price as it amounted to double accounting," he said.

Pakistan has agreed to consider India's proposal and reply by March 15. Srinivasan said the twin issues of transportation costs and transit fee will have a considerable bearing on the overall delivery of gas.

The two sides have not finalised the route of the 1,030 km long pipeline. For security reasons, Pakistan has proposed three routes and suggested a coastal route which increased the length of the pipeline within Pakistan by 260 km.


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## Contrarian

*Wal-Mart may adopt new plan in India*


NEW DELHI: Away from the political backlash against its entry into India, the world's largest retailer has been keeping domestic rivals guessing about the format it would adopt in this country, where grocery shopping is an industry by itself.

Wal-Mart, better known for its large stores like hypermarkets and supermarkets spread over thousands of square feet, may go in for the neighbourhood store format keeping in mind the Indian consumer's preference for this model.

"We expect Wal-Mart and Bharti to explore the neighbourhood market concept because groceries are one of the largest retail categories with the least organised retail competition in India," a former Wal-Mart adviser and US-based global retail investment firm Growth Ventures Group's Chairman and CEO Love Goel said.

Though foreign multi-brand retailers are barred from setting shop in India, Wal-Mart has tied up with Bharti Enterprises to gain a toe-hold in the country.

While the Left parties fear that entry of multinational retail players would slowly kill the estimated 13 million mom and pop stores, Congress President Sonia Gandhi too has joined the chorus of opposition against FDI in retail.

Even though fully opening up retail sector to foreign players still remains an issue, domestic petrol and petrochemical major Reliance Industries has entered the field and already boasts of over 40 neighbourhood vegetable and grocery stores across five cities.

Wal-Mart, which has a revenue of 320 billion dollars, is the largest retailer of groceries in the US. So, it could be anybody's guess what format it would choose for India. Wal-Mart has often adapted itself to the local needs, like in Brazil where there is a greater emphasis on neighbourhood stores inside cities, Goel said.

The company has already become the third largest retailer in Brazil by following the right format concept, Goel added.

However, the going might not be as easy for the company in India, where a number of retailers like Big Baazar and Vishal Megamart are expanding their presence with large-format neighbourhood stores and domestic conglomerate Reliance Group, which has also purchased land in the vicinity of residential areas in various cities for its retail stores.

Wal-Mart and Bharti are likely to use one of Wal-Mart's proven store models that range in size from 40,000 square feet for neighbourhood stores to 20,000 square feet for its super-center stores, Goel said.

The US giant might also try out membership schemes to gain the customers' loyalty in wake of intensifying competition in the retail market sector, the experts believe. "With more than nine groups from Birla and Tata and Ambani investing over one billion dollars in next few years in retail, it will be important for retailers to create loyalty with customers rather than drive profit margins down by competing on price," Goel said.

Membership clubs like Sam's Club (being operated by Wal-Mart in US) are a great way for retailers to offer lower prices while creating loyalty among its customers as well, he added.

According to experts, the relationship with Bharti could prove to be an asset if Wal-Mart decided to combine their retail concept with a direct-to-consumer approach by selling through catalogs, internet, mobile phones and television. "In that case, not only most orders are placed on phone, but the after-sales customer service is also handled through phone," Goel said, adding it could pave the way for the most optimal, capital-efficient and fastest method for organised retail to grow in India.

According to the experts, while neighbourhood stores appear to be the best format for Wal-Mart in India, it could also try out away-from-city locations. Wal-Mart's approach of buying cheap land in rural or urban locations could be successful in India as proven by a number of big malls, which have sprouted up on the outskirts of big cities like Delhi and Mumbai.

"With the explosion in the number of automobiles and vehicles, transportation is not necessarily a limiting factor," Goel said.


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## Contrarian

* IA takes on low-cost carriers in fare war*

KOLKATA: Indian Airlines is revving up for a dogfight in the skies. With all-time low fares in its arsenal, the national carrier is ready to fire salvos at not just legacy carriers, like Jet Airways and Air Sahara, but low-cost airlines like Air Deccan and SpiceJet as well.

"We have slashed fares on several routes out of Kolkata. The new fares, applicable till September-end, are aimed at winning back passengers lost to competition," IA chief manager (marketing & sales) Nirbhik Rai Narang said.

The airline's new basic fares range from Rs 175 to Rs 625 on all flights to the north-east, except Dibrugarh.

The basic fare to Dibrugarh is Rs 1,525. An additional tax and fuel surcharge component of Rs 975 is applicable on all tickets.

The number of discounted fare seats may range from 15 to 50, depending on the flight's load factor. The full fare on these sectors range from Rs 4,330 to Rs 7,540.

Fares have also been slashed on metro sectors. The lowest fare (tax & surcharge included) to Delhi is Rs 2,990. It will cost a passenger Rs 3,990 to travel to Mumbai, Rs 3,330 to Chennai and Rs 4,000 to Bangalore.

The new fares are part of the airline's dynamic pricing mechanism aimed at optimising passenger load.

With a major capacity augmentation lined up (43-50 new aircraft are to be inducted in the fleet over the next three years), the Indian Airlines top brass have adopted a two-pronged strategy to fill up the seats &#8212; expand services in domestic and international sectors and take on competition aggressively to grab market share in existing sectors.

"The move is aimed at increasing load factor from 70&#37; to 90%," Narang said. That will automatically lead to a market share hike.

At present, IA's market share in the east is 24% &#8212; next only to Jet Airways at 27%. It offers nearly 1,900 seats out of Kolkata every week.

The basic return fare to Bangkok too, has been slashed. The lowest return fare ranges between Rs 4,500 to Rs 6,000. The tax and fuel surcharge applicable on this sector is Rs 4,000.

The airline has also introduced new super-saver packs for both corporates and individual travellers. The flexible corporate package can now be used by multiple employees of the company.

Meanwhile, LCC IndiGo has announced a promotional offer on 1 lakh tickets at Rs 100, Rs 500 and Rs 1,000 for sale from February 26 to February 28. Taxes and surcharge are extra.


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## Contrarian

*Rail projects worth Rs 15,000 cr in Bihar: Lalu*

PATNA: Railway Minister Lalu Prasad on Wednesday said his ministry has gifted projects worth Rs 15,000 crore for Bihar for setting up wheel, coach and locomotive factories in Chapra, construction of rail overbridges over river Ganga connecting Digha with Sonepur and river Kosi in Saharsa and broad gauge conversion of rail lines.

"We have gifted the state with projects worth Rs 15,000 crore," he said while flagging off the new Patna-Ahmedabad Azimabad Express train at the Rajendra Nagar terminal here. Six new trains were introduced in Bihar during the past three days, Prasad said adding he had fulfilled the promise he made for the state in last budget.

Work continued on laying 600 km rail lines in different areas in the state, while survey was on to expand the railway network in another stretch of 1,350 km in the state, he said. Prasad said rail locomotive factory in Saran, besides the wheel factory in Chapra, as promised by him for his parliamentary constituency, were being set up with an estimated expenditure of around Rs 3,000 crore.

He said his ministry had given special attention for expansion of rail network in the state. RJD Minister in the UPA government Kanti Singh, party MP Vijay Krishna and Ramkripal Yadav attended the function.


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## Contrarian

*India emerging as online tutoring hub*

CHENNAI: India is fast emerging as the global online tutoring hub by delivering top-notch teaching services at down-to-earth rates.

With a large number of dedicated post-graduates well-versed in English language, India has the greatest potential to grow in the online tutoring industry, say industry insiders.

Indian teachers provide tutoring services at a fraction of the amount charged by their counterparts in the United States, United Kingdom and other European countries.

"When it costs $ 40-100 per hour in the US, Indian teachers charge three to four times less," says V Rameshwar, Chief Quality Officer of Chennai-based Tutors World Wide (I) Pvt. Ltd.

Going a step further, Bangalore-based Tutorvista provides unlimited tutoring for a month for $ 100, says its Chairman and Founder, K Ganesh.

Within a short span of two years, ever since supplementary education through internet attained an industry status in India, the growth rate is 100-150 per cent, says Rameshwar.

The company, which was started in 2004, now has 400 teachers on its pay-roll and around 5,000 students across the globe.

According to Ganesh, 18 months back, Tutorvista started with one teacher and one student and now has 500 teachers and over 2,000 students.

India now earns around $ 15 million per year from online tutoring -- 10 per cent of the total market share. "This is expected to swell to $ 2.4 billion within three years", says Ganesh.

Tutorvista has students in 12 countries, including Australia, Turkey, Denmark, Singapore, the Middle East and Canada. But majority of the students are from the US and the UK.

Thirteen-year old Kathreen of Westchester County, New York, says, "My Indian tutor is very patient and kind. She takes time to explain things to me and I have improved in classes".

"With online tutoring, we can do sessions at our convenience. We save a lot of time, instead of having to drive up and down", Kathreen, who has been receiving tuitions from Tutorvista for English since October last year, said.


Among the other developing countries which have ventured into the "eBay of education", such as Pakistan, Sri Lanka and Malaysia, India has an edge, says Ganesh.

India has a large number of post-graduates with sufficient computer know-how compared to these countries, he says.

"When we gave a recruitment advertisement, we received applications from 6,000 post-graduates, many of them being PhD and M.Phil holders", says Ganesh.

Through online tutoring, globalisation, whose merits were hitherto enjoyed only by the technologically qualified, has reached the homes of people educated in all subjects.

It gives opportunities to science and arts degree holders to earn from home. For seven hours work a day, Tutorvista pays them Rs 12,000-14,000 monthly. Moreover, there are no commuting hassles and the timings also are flexible, he says.

According to Rameshwar, TWWI recruits freshers and trains them for the job.

But Tutorvista has retired professors, teachers and qualified housewives on their pay-roll.

These companies also have representatives in many of the client countries, especially in the US and the UK, through whom the necessities of the market are ascertained.

By online tutoring, Indian outsourcing companies have even ventured into the B2C (Business to Consumer) model, says Ganesh.

They deal directly with the parents and the students. There is no other brand or company intermediating in the B2B (Business to Business) model, he points out.

Tutoring through letters and couriers had been a mode of supplementary education in sparsely populated countries like Australia for long.

But, with the advent of voice technology on the internet, "real-time voice-based online education" has become accessible to everyone across the globe, adds Ganesh.


----------



## Contrarian

Novartis case raises fresh controversy

NEW DELHI: A court case filed by Swiss drug major Novartis challenging the government and its patent laws, has snowballed into a fresh controversy. Concerned that enough was not being done by the government to protect public health safeguards, the domestic generic industry has urged it to act in earnest to defend its laws.

Novartis had challenged the validity of Section 3(d) of Patent Act, 1970 in Chennai High Court, which is intended to prevent evergreening of existing drugs, after its patent plea for a new use for its cancer drug, Gleevec was rejected by the Indian patents office in January last year.

The section states that patents would not be given for new forms, uses or minor modifications of existing drugs unless they differ significantly with regard to efficacy.

Initially the company filed a petition challenging the domestic law on the ground that it is not TRIPS (trade-related aspects of intellectual property rights) compliant. Subsequently, it also said that Section 3(d) violates Article 14 of the Constitution, which promotes equality before the law and prohibits arbitrary statute.

Simply put, Novartis is seeking a declaration from the court that Section 3(d) is not TRIPs compliant and also that certain terms in the section are vague and can lead to arbitrary decisions from the patent office, and, therefore violates Article 14 of the Constitution.


Department of Industrial Policy and Promotion (DIPP) being the nodal ministry is the main defendant, while the generic industry is represented by Indian Pharmaceutical Alliance (IPA) is contesting the case against the foreign major.

DIPP had recommended that the solicitor general represent the government's case at the hearings in Chennai, since it was an issue of constitutionality of the Indian patent law. But he was not present in the hearings as he had not got the appropriate clearance from the law ministry.

While public health groups including Indian Network for People Living with HIV/AIDS have written to PM to intervene as it may adversely impact their access to treatment in India, some organisations have approached DIPP and law ministry. Those like CPM too have asked the government to defend the Patents Act in the court against Novartis.

Also, the 'laxity' on the part of government in not giving appropriate clearances and filing counter affidavits, have raised concerns within the domestic industry. IPA, in a communication to DIPP, listed its concerns which stem from the fact that the department did not attend the hearings on January 29-30, and February 15-16.

It has also said the government should have challenged the maintainability of the writ petition by a foreign private company, since the WTO agreement has established a system to deal with matters relating to non-compliance by member states. The matter could be contested in a WTO dispute panel, but not in a local court of law.


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## Contrarian

*AI, GE sign pact for green engines*

NEW DELHI: After hearing of green drives for long, you can now talk of green flight as well with Air India planning to induct eco-friendly engines in its newly ordered aircraft. The airline has signed an MoU in this regard with General Electric (GE) on Tuesday.

As per the MoU, GE will deliver aircraft engines from its ecomagination portfolio including GE90-115B engines for the Boeing 777-300ERs and the GEnx engines for the Boeing 787-800 aircraft ordered by Air India some time ago. The deal will cost Air India $2.2 billion.

Expecting the engines to be 15&#37; more fuel efficient than the ones currently used in AI fleet, V Thulasidas, CMD, AI said: "Considering the life span of 15 years, a GEnx engine will save up to 500 million tonnes of fuel fetching over $150 million for an airline."

Air India's green flight will not be restricted to engines as the airline plans to rope in GE in areas including the in flight content creation, co-branding and above all turning its Mumbai Air India building green.

According to sources, the airline plans to induct an ecomagination logo on its to be inducted aircrafts along with showcasing of environment-friendly videos and magazines to passengers on board.

With the first newly-ordered Boeing expected to be delivered by May after a delay of two months, the airline plans to launch a direct non-stop flight from Mumbai to New York to be shortly followed by a similar arrangement between New Delhi and New York.

For Thulasidas, Air India's latest move is part of the airline's corporate social responsibility initiative but in a sense it will help the airline save on the fuel cost in the long run.

The flag carrier had ordered 23 Boeing 777, including eight Boeing 777-200 long range and 15 Boeing 777-300 extended range aircraft, apart from 27 Boeing 787 aircraft.

Thulasidas said: "This year has been exceptionally difficult due to the high aviation turbine fuel costs. Last year, AI had posted a profit of Rs 15-16 crore." On reports of withdrawal of tax exemption on aircraft lease rentals, he said: "Retaining tax sops for lease rentals of aircraft is important for us and others."


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## Contrarian

*Essar buys BPO firm in Bermuda*

MUMBAI: Essar Global, the flagship company of the Essar group, on Tuesday announced 100&#37; acquisition of Bermuda-based business process outsourcing firm, Global Vantedge for $23 million or roughly Rs 100 crore.

The acquisition, fourth in the last 12 months made by Aegis BPO the wholly owned subsidiary of Essar Global will bring $25 million accretion to the turnover and $5 million to net profit of Aegis whose current revenues exceed $180 million.

Aegis which is also the fifth largest BPO company in India is likely to climb up the ladder by the current acquisition. In the last one year Aegis has acquired Customer First and Orion in India and Technion in the US.

Aparup Sengupta, CEO of the BPO business of Essar Global in India told TOI that the group is still looking out for more acquisitions. "We are in active dialogue with few companies (for acquisition)," he said.

Basically, Essar is looking for BPO companies with $20-30 million revenue with employee strength of 1,000-2,000 people. "However, there are companies on our radar which are 3-4 times bigger than our target size," Sengupta said.

Commenting on the acquisition, he said Global Vantedge's buy will complete the entire suite of 'customer life cycle management' services (which include customer acquisition, retaining them and also following up with an ex-customer) provided by the BPOs.

Global Vantedge, which will be renamed as Aegis Collect, is the leader in the collections and accounts receivable management services segment.

Several customer of Essar's BPO business like the American Expresss platinum and gold card unit will benefit from the acquisition as it will now also be extended the collection and accounts services of Global Vantedge.

Global was owned by Chrys Capital and the company's management team which will continue to manage the BPO. It has over 1,400 employees with facilities in Gurgaon in India and San Jose, Costa Rica. It operates in the banking, telecom and automobile verticals.


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## Contrarian

*Sebi imposes Rs 1 cr fine on DLF arm*

MUMBAI: Market regulator Securities and Exchange Board of India (Sebi) on Tuesday imposed a fine of Rs 1 crore on DLF Commercial Developers (DLFCD), a subsidiary of real-estate major DLF Universal. The company has been penalised for dealing in Bhoruka Financial Services scrip at the de-recognised Magadh Stock Exchange in Patna.

In its order against the DLF entity, Sebi said Magadh SE's application for renewal of recognition as a stock exchange was at a proposal stage when (between August 1 and August 12, 2005) the DLF group company carried out the said transaction.

The bourse was granted recognition on December 11, 2005, the order mentioned. The Sebi order said that the promoters of Bhoruka Financial held nearly 2 lakh shares in the company, constituting 98.73&#37; of its equity. They sold the entire stake to DLFCD for about Rs 90 crore, at Rs 4,490 per share.

On the Magadh SE, the transactions had taken place under the 'permitted to trade' category based on an application by its member-broker Rajat Share & Stock Brokers, while Bhoruka Financial was listed on the Bangalore Stock Exchange.

Apart from DLF Commercial Developers, Sebi also imposed a combined fine of Rs 1 crore on 11 others on a similar charge. These entities included promoters, directors of Bhoruka Financial, and their related entities.

Interestingly DLF Universal, which is in the process of listing its shares on BSE and NSE through an IPO, has mentioned in its draft prospectus that it could face a fine up to Rs 1 crore for its dealings related to Bhoruka's shares.

"There is pending litigation under securities laws against Bhoruka Financial Services, one of our subsidiaries... be liable to a penalty which may extend up to Rs 10 million," the company said in its IPO draft prospectus.


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## Contrarian

*Banks continue to flout norms*

MUMBAI: Commercial banks continue to violate the Reserve Bank of India (RBI) norm on acknowledgement of cheques. Several instances of some banks charging customers Rs 10 for acknowledging cheques presented over the counter have been reported from Tier II and Tier III centres.

Following repeated complaints from the public, the RBI, in December 2006, had directed banks not to compel customers to drop cheques in drop boxes.

"While the cheque drop box facility may also be made available to customers, the facility for acknowledgement of cheques at the regular collection counters should not be denied to them.

No branch should refuse to give an acknowledgement on cheques being tendered by customers at their counters," the RBI's guideline on cheque drop boxes and the facility for acknowledgement of cheques states.

The banking regulator had also asked banks to display on the cheque drop box itself that customers can also tender the cheques at the counter and obtain acknowledgement on the pay-in slips. However, this has not yet been implemented by all bank branches.
"Complaints on wrong debit of account, loss of cheque, not honouring of cheques despite sufficient balance are some of the common complaints that continue to come to the Indian Banks Association (IBA) and also the Banking Ombudsman," said a senior RBI official.

The RBI, in February 2006, had formed the Banking Codes and Standards Board of India (BCSBI) with an aim to evaluate, oversee and enforce observance of the code by banks.

Accordingly, a code of banks' commitment to customers was drafted, which promised minimum customer service standards in the case of loss of cheques, wrong debits and a compensation policy as well.


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## Contrarian

*EET regime will encourage savings*

MUMBAI: Sources added that the broad contours of exempt-exempt-tax (EET) were put into place a few months ago by former chairperson of the Central Board of Direct Taxes (CBDT) M H Kherawala. She had also headed the expert committee on EET last year.

"It's easy to administer EET on voluntary investment schemes like PPF," said Dinesh Kanabar, partner, RSM & Co, and a member of the expert committee on EET.

He said that if this regime comes in, it will encourage long-term savings because people will defer their tax-liability to the time they retire. At retirement, the tax payable will be lower because the income of an individual is expected to be lower.

Tax experts like Nikhil Bhatia of KPMG also feel that bringing instruments like provident funds and pension schemes (which cover more individuals) under the EET regime will take away the pressure from the government to give assured returns and, in turn, force people to save for the future.

EET which is followed globally by several countries like US, UK and Singapore has also been a part of our tax system. Not very long ago, the National Savings Schemes were subject to a similar system of tax deduction.


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## Contrarian

*'Software investment gives 100&#37; return*

RSS Feeds| SMS NEWS to 8888 for latest updates

NEW DELHI: Services like catering, transport, housekeeping, security and technology have received a huge boost from the IT-ITeS sector, thereby providing strong indirect income and employment opportunities for less educated and skilled workers.

The software and related services sectors also demonstrate a strong multiplier effect on the Indian economy with every rupee input resulting in a 100% return, says a joint study by by rating agency Crisil and Nasscom.

The study has analysed the expenditure on operating expenses, capital expenditure and consumption spending by professionals. For every job created in the sector, four are created in the rest of the economy, it said, especially in the areas of housing, transport, hospitality and entertainment.


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## Contrarian

*Excess capacity to hit commercial realty*

BANGALORE: Many of those gleaming glass and concrete structures coming up all around you may remain just that glass and concrete structures. Without occupants. At least for a long time.

A survey being done by global property consultancy DTZ Debenham Tie Leung a preview of which was provided to TOI finds that across major cities in India, massive overcapacity is building up in commercial real estate.

And the conclusion drawn is this: the capital and rental values of commercial property will start going down in 6 to 12 months.

In Bangalore, over 16 million sq ft of grade A commercial space is expected to be available for leasing in 2007, but the total demand is not expected to be much more than the 11.5 million sq ft the city saw in 2006.

In Chennai, the difference between the estimated demand and supply is literally a chasm the supply is expected to be about 18 mn sq ft, and the demand probably not even half of that, considering it was just a little over five million sq ft in 2006.

In the National Capital Region, supply this year is estimated at over 15 mn sq ft, against the 8.5 mn sq ft of absorption it saw last year. The demand in 2006 constituted a sharp jump over the 2.36 mn sq ft in 2005, but this year, demand is not expected to rise more than 30&#37;, leaving a yawning gap between demand and supply. 

"We think demand will see a maximum increase of 30% in most locations, and could be much less in markets like Bangalore," says DTZ Indiamanaging director Ankur Srivastava. He says locations like Pune, Hyderabad and Kolkata too are set to see significant oversupply, and hence price corrections.

"The central business districts in most locations are still undersupplied, but we believe Indian markets generally are reaching the peak of the real estate cycle.

Factors like rising interest rates and the government constraining channels of property funding like through NRE (non-resident external) accounts will only hasten the trend," Srivastava adds.

Experts like Prakash Gurbaxani, who recently quit as CEO of TSI Ventures and set up a venture funded real-estate company called QVC Realty, agree there's overcapacity emerging. But he saysthe excess capacity is primarily in spaces designed for IT/BPO.

"There are other areas like retail, hospitality, and spaces that cater to the domestic market like telecom and legal services, where there is still a supply constraint. You can also find niches where demand can be created," he says.

"Generally, whoever gives the best value and best experience will gain. The days of being able to sell whatever you build appears over."


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## Contrarian

*Apollo eyes UK hospital chain Capio*

CHENNAI: Hospital major Apollo Hospitals Enterprise Ltd is readying itself for a major UK acquisition. According to international media reports, Apollo has already evinced an interest for the British unit of Swedish healthcare company Capio, which owns a string of 21 hospitals and nine treatment centres in the UK.

The Sunday Telegraph has reported (without quoting any official) that private equity groups, Apax and Nordic Capital, (who together own Capio), were considering the sale of Capio's British unit in response to anti trust concerns.

The report also said that Apollo was looking at other hospitals including The Priory Group (owner of Britain's famous rehabilitation centre for pop stars and fashion models).

When contacted by TOI, PC Reddy, chairman of Apollo Hospitals said that his company was looking at international acquisitions including hospitals in the UK. "Apollo is ready to go global. We are already present in Nigeria, Kuwait and Bahamas.

As regards Capio, nothing has been finalised. To my knowledge, I don't think the sellers have called for bids. If and when they call for we will consider participating in it, provided the valuations are right."

He also said that the hospital chain would need decent financial muscle for international acquisitions. "Typically we (Apollo) can team up with private equity players who will fund the acquisition and we will manage the hospitals with our expertise.

Most of the big private equity investors are in constant touch with us and we are exploring various options. Since all these haven't reached a finite stage, I cannot comment," Reddy added.

It is learnt that the shopping could cost anything between $1 to $1.2 billion. "Market rumours suggest that Capio could cost around $1.2 billion. At those rates, I don't think it is worthwhile. In anycase, they have to sell out in one years time as per statutory requirements, we will wait and watch," he said.

According to Capio's website, Capio is the largest independent sector provider to the NHS in England, in May 2004 Capio was selected for the largest public sector care contract ever awarded by the NHS.

Under the contract 95,000 NHS patients will be treated between 2005 and 2010 in 10 specialist centres. Five have been newly built, two have been built in NHS facilities and three in existing Capio hospitals.

Apollo's international trip was short-circuited in Sri Lanka where it lost control of a super speciality hospital it jointly set up the local government there in 2002 when a local businessman mopped up the shares and elbowed Apollo out.

The stock price of Apollo closed at Rs 476.15 on the Bombay Stock Exchange on Tuesday, up by 0.82&#37; from the previous close.


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## Contrarian

*Corporate tax may go down by 3&#37; in budget*


NEW DELHI: Companies are expected to breathe a bit easy as statutory tax rates on them are likely to be reduced by 3% in the Budget either through abolition of 10% surcharge or reduction of corporate tax from the current level of 30%.

Either corporate tax rate is likely to be reduced to 27% or surcharge abolished to give 3% relief to companies, sources said.

The statutory rate of taxes on companies stands at about 33.66% with corporate tax of 30% and surcharge of 10% along with education cess of 2%. Corporates are demanding around 5% cut in taxes, but it is not likely to be accepted entirely, sources said adding the cut may be limited to 3% only.

Companies in India are given a host of tax exemptions. These include tax holiday for software technology parks, EoUs, infrastructure service providers and units set up in backward areas. Because of all these exemptions, effective rate of taxation on corporates works out to be much lower.

The government collected close to 50% more corporate tax at Rs 97,315 crore during the first 10 months of this fiscal against Rs 65,094 crore during April-January of the previous fiscal

Companies are pressing for a further cut in the tax rate to make them comparable with those in some Asean countries. Among these countries, Singapore and Malaysia have tax rates of 20 and 28% respectively.

Thailand has a corporate tax rate of 30% and Philippines 35%, whichis also likely to be lowered to 30% by 2009. Philippines and Thailand, where rates are closer to India &#8212; also offer tax offs for industrial projects. Effective rates there could be lower for some companies.

Most countries across the globe have been reducing corporate tax rates to attract investments. A survey by KPMG in 2006, covering 86 countries, showed that the average corporate tax rate over the last 14 years was cut from 38.1% to 27.1%.

In the Budget 2005-06, FM P Chidambaram had cut corporate tax rate to 30% from earlier 35%, but increased surcharge to 10% from 2.5%.

This reduced the statutory tax rate, including education cess, on corporates to 33.66% from 36.59%.In the Budget 2006-07, he retained this tax structure but raised the Minimum Alternate Taxation to 10% from 7.5% in the previous fiscal.


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## Contrarian

*LN Mittal, HPCL to bid for Nigerian refinery*

NEW DELHI: When Lakshmi Niwas Mittal scripts a business plan, he takes the world as his stage. Currently penning his progress into oil kingdom, the steel king has set his sights on acquiring a 51% stake in the Port Harcourt refinery in Nigeria, where his joint venture with flagship explorer Oil and Natural Gas Corporation ONGC-Mittal Energy Ltd (OMEL) has two offshore exploration acreages.

Mittal is riding on his new-found bond with HPCL which is emerging as the preferred partner for getting into refining and gas business globally.

Mittal is becoming an equal partner in HPCL's Rs 16,000 crore Bhatinda refinery and will bring in $728 million for a 49% stake in the SPV for building the plant and laying a 1,100-km pipeline for wheeling crude from Mundra port.

"This will be the first 49% FDI in Indian refining industry and marks world investor confidence in the sector," petroleum secretary M S Srinivasan said on Tuesday.

Mittal is targetting his Nigerian refinery plan through a separate JV with HPCL. The emerging picture points to Mittal building up a portfolio across key oil industry segments. He has a vehicle for exploration in OMEL.

Separately, Mittal Investments has acquired Russian LUKOIL's 50% stake in an independent explorer with oilfields in Kazakhstan. Last week, OMEL joined the fray for Oman Oil's stake in Caspian Pipeline Consortium, a key western exit route for Kazakh oil.

A tie-up with HPCL brings refinery expertise and could open doors for Mittal's oil trading plans. This has been a sore point for Mittal as his second joint venture with ONGC, ONGC-Mittal Energy Services Ltd, has failed to take off due to lack of support from the state-owned partner.

"As a partner, Mittal could easily get into sourcing crude for the unit. That could be a possibility... why not if it is beneficial for the refinery... we are open to opportunitis when they arise. As of now, this (trading) is not on the agenda," HPCL's M B Lal told TOI.

If the partnership extends beyond Bhatinda to Vizag, it could also mean Mittal's entry in petrochemicals. Sanjay Dutta


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## Contrarian

*Network congestion on the rise, says Trai*

NEW DELHI: Frustrated about calls not going through? You are not the only one. It seems congestion in the networks is increasing rapidly, according to the telecom regulator Trai's analysis.

Sadly, Trai's powers on interconnection have become a matter of legal dispute, so there is very little that it can do, except put out reports and analysis.

Trai has been monitoring the level of congestion at points of interconnection (POIs) between various service providers on a monthly basis.

This parameter signifies the ease by which a customer of one network is able to communicate with a customer of another network. It also reflects the effectiveness of interconnection between two networks.

The benchmark notified by Trai in its Quality of Service (QoS) Regulation suggests that out of 200 calls between two operators, only one call should face the congestion problem.


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## Contrarian

*Customs duty must for police*

NEW DELHI: The finance ministry seems in an unrelenting mood when it comes to doing away with tax exemptions.

Ahead of the budget, it has issued an office memorandum making it clear that Central Police Organisations, like Border Security Force, Indo Tibetan Border Police and Central Reserve Police Force, and state police organisations have to cough up customs duty on import of all equipment, including those required for anti-subversion, anti-terrorism and intelligence work.

Only under exceptional circumstances, where the import of equipment for security considerations could not be planned earlier will the government provide an exemption from payment of customs duty, the note said. The same principle will hold true for other government departments, municipal bodies, public sector companies and autonomous bodies.

Equipment and material required for relief and rehabilitation work for flood, earthquakes or epidemics can be the only exception. But even here the unforeseen and exceptional circumstances "will be considered on merit".

"The aforesaid provision in the guidelines makes it abundantly clear that payment of customs duty cannot be viewed as a dispensable expenditure, and there should be no need to seek ad-hoc exemption from payment of customs duty on goods meant for normal functional requirements of the central police organisations, state police organisations and para-military forces," the revenue department circular said.

While advising them to plan their spending, the customs department has suggested that import duty should be built into the budgetary provisions.

The move is being seen as an offensive by the finance ministry and could be used by it for arguing against tax exemptions. While higher budgetary provisions would mean that the government spending rises by a small amount, the revenue department will be able to show higher collections.


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## Contrarian

*Pune ordnance factory bags top national award*

PUNE: Dehu Road Ordnance Factory(DROF) bagged the 'Best performing factory' for the year 2005-06 amongst 39 ordnance factories in India.

Defence minister A.K. Antony presented the award to R.M. Gupta, general manager, DROF.

Rao Indrajit Singh, minister of state for defence production, K.P. Singh, secretary defence production and Sudipta Ghosh, director-general, ordnance factories and chairman, ordnance factory board were present on the occasion.

There was 29 per cent increase in the value of production compared to previous year. It has made considerable improvement in savings of materials, reduction in cost of labour and consumption of power.


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## Contrarian

*2,000 additional flights in March*

NEW DELHI: Air traffic is all set to boom this summer, with south and west India poised for a 27&#37; growth in flights. The country would get an additional 2,000 flights from March 26 onwards.

The number of weekly departures in south India will rise from the current figure of 2,938 to 3,734. West India would also witness a similar 27% increase with weekly departures rising from 2,534 flights to 3,219.

The northern region, with its fewer airports, would see a 14% rise as the number of weekly flights would rise from 2,132 to 2,433. North-East and the East is expected to have a 19% growth with the figure climbing to 1,129 from the current 1,034.

These figures were reeled out at the parliamentary consultative committee of civil aviation ministry meeting in Cochin that concluded on Saturday. The members raised a demand for faster development of infrastructure to meet the growing traffic.

Committee chairman and aviation minister Praful Patel said the ministry had suggested 100% FDI in sea plane so as to build connectivity and tourism along the long coastline of India and to provide connectivity and tourism opportunities to Islands.

Patel also said Air India Express would start its operation from Hyderabad in the later part of 2007 providing connectivity to the Gulf region.

"Air traffic during 2005-06 had undergone a massive increase over 2004-05: aircraft movements had gone up by 17%, passengers up by 24% and cargo up by 10%.

Across the airports of southern Indian itself, aircraft movements had gone up by 30%, passengers up by 33% and cargo up by 10%," said a statement issued by the ministry.


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## Contrarian

*WB report is biased says town planning chief*

MUMBAI: Rubbishing the World Bank (WB) recent report calling Mumbai a difficult place to do business, metropolitan commissioner, T Chandrasekhar of Mumbai Metropolitan Regional Development Authority (MMRDA) said the report was biased because the Maharashtra government did not comply with the World Bank's conditions for some of the projects.

"The report has been prepared by people who know nothing about the city. And it's biased because in the last few years, we have not been dealing with them (WB). We are not going to WB for any assistance. They want us to tow their line," retorted Chandrasekhar, believing WB had given high ratings to people (cities) who were more tuned to the Bank's thinking, perhaps.

In March last year, the World Bank had temporarily suspended the $150-million funding to the road and resettlement component of the Mumbai Urban Transport Project (MUTP). The process of payment had stopped as the Maharashtra Government did not obey the Bank on issues relating to the resettlement of the project-affected people.

Advantage Mumbai

The realtors agree with Chandrashekhar. "I disagree with the report in Toto," replied Anand Gupta, chairman, Builders Association of India, Mumbai centre.

Well known builder Niranjan Hiranandani, MD, Hiranandani Group reminded that the Tatas, Birlas and the Ambanis lived in Mumbai and so businesses will always be drawn to the city. And, with the city attracting businesses in such large volumes, one could never call it a 'bad' or difficult city to do business, said Hiranandani.

Hiranandani added, as he had not seen the report, he would not like to comment on it, specifically. He admitted that in recent times, other cities had shown a trend of a fast progress.

Poor infrastructure is a disadvantage, admits Hiranandani. "The chief minister of Maharashtra himself recognised this and steps are being taken to improve the infrastructure. The state of Maharashtra (or the city) is not a bad place to conduct or establish business. Still, if the report means that Mumbai may be a difficult place to start business then it's a signal for Maharashtra to grow faster with infrastructure, and they will do it," is his upbeat reply.

Anand Gupta tells off the report, as, by its own admission, it tracks only certain indicators or criteria (mostly to do with rules and regulations) but it does not measure actual implementation and reinforcement. "Moreover, it's not enough to say that we lack in infrastructure; the quality of infrastructure also matters."

According to Gupta, it may be true that in Mumbai it takes more days to register a new business but he says that the city is far more professional in its approach and people are responsible in terms of delivering the goods. The level of integrity in doing business is high here than in any other city. "I have dealt with government authorities all over India but I find it easier to transact with government departments in Mumbai than anywhere else in India. The crime rate in Mumbai is far lower and the law and order situation much better than any Patna (some call it the kidnapping capital of India) and Bhubaneswar," says Gupta.

Speaking in the city's defense Gupta adds, "Infrastructure in the city is not to the level of comfort but from the utility point of view, it's far ahead of any other city in India and even the world."

Chandrasekhar wonders aloud, "If Hyderabad was such a great city to do business than it would have been the financial capital of India instead of Mumbai. And the city's infrastructure was undergoing transformation," says the man who transformed Nagpur city and Thane and bringing them at par with high grade cities of India. 

"When I compare Mumbai, I do not compare it with smaller cities in India. I compare it with developed countries and cities like Singapore, Shanghai. Yes when compared to those cities, it is lagging behind." says Chandrashekhar.

"How many people go to start a business in Patna? You have to see the volume of people starting a business. When you draw comparisons, draw it among equals," points out Chandrashekhar.

Disadvantages in Mumbai

All agree that at present, the disadvantage Mumbai has is the high cost of starting a business. Land prices, rents etc are high. In other states with less investment, an entrepreneur can start off with much ease.

"Yes, Mumbai has its disadvantages for a newcomer. Land is scarce hence it is costly. Labour cost is high and so is the standard of living. Getting an office space is an expensive affair here. But if you see places like Hong Kong (island city), it too is faced with a similar predicament. Starting business there is not a cakewalk," utters Chandrasekhar.

Mumbai is the business and financial capital of India

All the major financial institutions, banks and stock exchange are in Mumbai. This month, a top financial newspaper reported that Mumbai was to become the destination for Asia's first all-business class commercial air service and plans are afoot to introduce a daily business class service between Tokyo and Mumbai.

According to Press Information Bureau of Government of India, 2006 has been a year of record foreign direct investment (FDI) inflows with Delhi, Mumbai and Chennai regions leading in attracting FDI.

The World Bank report

World Bank released last week it's report on business friendliness, titled "Doing Business in South Asia." It ranked Mumbai 11th (ahead of Kolkata). Hyderabad, according to the report, was the easiest place to do business and small cities like Patna, Bhubaneswar, Jaipur, and Lucknow were far better than Mumbai.

Doing business became easier in India and Pakistan in 2005-2006, according to a new regional report released by the World Bank and its private sector arm, IFC. The report covers eight countries in the World Bank's South Asia region and examines 12 major cities in India, six in Pakistan, and four in Bangladesh. It ranked Mumbai 11th, only ahead of Kolkata.

The highlights of the report:

Within India, Hyderabad has the most business-friendly regulations. Mumbai is in 11th place, ahead of Kolkata.

Karachi is at the top in Pakistan, while Dhaka ranks best in Bangladesh.

Entrepreneurs in South Asia face large regulatory obstacles in doing business.

A standard company in India pays 81&#37; of commercial profits in taxes

In Pakistan, it takes 560 hours per year to comply with all tax regulations.

The report explained why it was not uncommon for large business centers like Mumbai to score towards the lower end on the "ease of doing business" (the aggregate of the 10 Doing Business indicators).

The indicators or criteria set by the report were: Doing Business, getting licences, paying taxes, starting business, registering property, closing business, employing workers, enforcing contracts, protecting workers, getting credit.

Specific city-wise statistics on the amount of investments and business started is not easily available. But experts feel that the WB report cannot be definite, as it depends on the 'criteria' chosen by the bank to rank the cities.


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## Contrarian

*Luxury customised, at a price of course*

With a 65 per cent increase in the number of luxury travellers coming to the city, hotels are making sure that they meet international standards. If that means flowers from the Netherlands, wines from France and personalised services... so be it!

Gone are the days when Delhi was known as a backpackers' hub where only the budget traveller will stop to spend a few days before heading to Varanasi or Rajasthan. The well-heeled ones chose to embark at Mumbai where the hotels were "up to scratch".

And then the situation changed: The capital, in the last three years, saw a 65 per cent increase in the high-end tourists who are staying in the city. And to retain this flow, the hotels are making sure that they offer what these tourists are used to &#8211; the best of the best!

So, from Japanese ShiHatsu massage to Corona beer specially flown from Mexico to Indonesian and Ayurvedic spa treatment to a BMW 749 Li to ferry you from the hotel to any destination of your choice, the city hotels are ensuring that tourists get the same treatment here as they will in Paris or New York.

Industry insiders feel that with the Commonwealth Games approaching and Delhi hosting celebrities like Sean Connery and Angelina Jolie, nothing less than the international standards will do. Says Avnish Sood of Eros Group, "Nowadays, customised services are being offered to meet the demands of the high-end customers.

Regular services, even if they meet the five-star standards, don't have that personal touch. These are the people who want you to remember those little details when they are visiting."

And not only the foreign tourists, even Indian travellers want such standards. Says Vipul Gupta, director, The Metropolitan Hotel Nikko, "The number of the luxury travellers has tremendously increased over the years.

Corporate trips financed by companies, a buoyant economy and the desire to live life king size have come in like never before even for Indian travellers."


Considering these guests are ready to splurge, they want you to remember which cheese they prefer and whether they want a French or an American newspaper with their morning coffee.

"Earlier staying at a five-star hotel was enough. Now, customisation to suit each and every traveller's specific need is the buzzword," says Harshita Singh, manager, Corporate Communications, The Claridges.

To ensure that nothing is missed, the hotels refer to the last visit of the traveller to get the details. So then, if a four-fixtured bathroom with Italian tiling and a Jacuzzi is not enough to impress the guests, the hotel offers Ayurvedic toiletries with essential oil base.

Hotels also ensure that only female staff attends to female guests. Then, there are those little details ensuring that a person gets his/her favourite flowers in their room or that the room is absolutely sound-proof so that a person's sleep is not disturbed by any ambient noise.

Meanwhile, personal, round-the-clock butlers, chauffeur-driven Mercedes, a BMW fleet, and business lounges have become a part of every hotel's services.

All this luxury comes at an impressive price as well. The luxury suites can set you back by Rs 65,000 to Rs 85,000 on an average for a night.

At some of the hotels, the rates can go as high as Rs 1.5 lakh. Gupta quips, "With almost 85 per cent of our clientele comprising international guests, the costs are very reasonable and what's more, the guests love to splurge."


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## Contrarian

*PM launches backward fund scheme in Assam*

MANDIYA (ASSAM): Prime Minister Manmohan Singh on Monday launched the Rs 3750 crore country-wide Backward Region Grant Fund as part of Government's major initiatives to bridge regional disparities in development.

Launching the scheme here, Singh said, "250 districts are being taken up in the country under the BRGF with Rs 3750 crore provided to the fund for the year and each district given additional Rs 15 cr annually exclusively for developing its infrastructure."

"Today we are making a major beginning here, moving away from Central and state-level planning to districts and villages. The BRGF is a major initiative of the UPA government in ensuring that regional disparities in development are bridged and backward regions such as Barpeta in Assam catch up with the rest of the country", the Prime Minister said.

"Sixty years back, the Mahatma led us to freedom with the very simple weapon of ahimsa. Indeed, his approach was effective because it was based on a leap of faith - a belief that each individual, however humble his standing, craved for self-respect and freedom".

It is the same spirit that must guide us now", Singh pointed out. "We need to take that leap of faith once more and believe that all of us together can change the country. With the BRGF we have done precisely that by entrusting the prime responsibility of local development to those vitally affected by it, the people themselves", he said.

"In Assam we are taking up 11 districts -- Barpeta, Bongaigaon, Cachar, Goalpara, Hailakandi, Morigaon, Dhemaji, Karbi Anglong, Kokrajhar, North Cachar Hills, and North Lakhimpur", he added.


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## Contrarian

*Know your candidate before you vote*

DEHRADUN: Amid the hustle-bustle of electioneering in Uttarakhand, election watch groups are coming forward to tell the electorate about antecedents of all candidates -- good, bad and the ugly.

"Our aim is to make these voters aware of the true face of candidates," said Pawan Rana, a social activist associated with a watchdog group.

These activists have categorised candidates and parties in different groups on the basis of their background and other records.

According to an election watch report prepared by the Association for Democratic Reforms (ADR) and Experiments in Rural Advancements (ERA), nearly 149 of the total 806 candidates fighting in the Feb. 21 state assembly elections are post-graduates.

Of these, Congress (23) has fielded the maximum number of post-graduate candidates while BJP has fielded 19. These figures are now being circulated among the electorate through local media.

While BSP and Samajwadi Party have fielded maximum number of under-matriculate candidates (8), there are nine candidates who are completely illiterate, the report said.

The list of crorepatis in the state is also sizeable with as many as 40 candidates having assets worth more than Rs one crore. Congress leads the pack, having 21 per cent of such candidates followed by BSP with 8.57 per cent, NCP 7.69 per cent and BJP 5.71 per cent.

The main opposition BJP leads the group of candidates having criminal background.

Of the 59 candidates having pending criminal cases against them, 11 belong to BJP followed by Samajwadi Party with 7 and Congress with 6. These candidates face charges, including murder, rape and extortion.

In all, 560 candidates (nearly 70 per cent) did not furnish their Permanent Account Number (PAN) details.

Avdhash Kaushal, chairperson of RLEK, a social organisation which has also prepared a list of the most corrupt politicians and bureaucrats in the state, said that the Election Commission must take stringent steps to ban the entry of dons and mafia gangsters in the election arena.

Anil Joshi, who heads HESCO, a social organisation working in the state, warned the voters not to choose those candidates who are either corrupt or indulge in similar malpractices.


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## Contrarian

*Mittal eyes Oman Oil assets*

NEW DELHI: Lakshmi Mittal is stepping on the gas with his oil business in Kazakhstan. After acquiring Russain LUKOIL's 50&#37; stake in an independent explorer in December for $980 million, the NRI steel tycoon is now keen on buying Oman Oil's assets in Central Asia's fastest-growing economy.

Mittal had bought into LUKOIL-owned Caspian Investments Resources through his Luxembourg-based group holding arm, Mittal Investments Sarl.

For acquiring Oman Oil assets, he is using ONGC-Mittal Energy Ltd (OMEL), one of his two joint ventures with India's flagship explorer Oil and Natural Gas Corporation.

While this venture is meant for acquiring oilfields across the globe, the other joint venture, ONGC-Mittal Energy Services Ltd (OMESL), aims at transporting and trading in oil and gas.

ONGC-Mittal has submitted a non-binding bid for acquiring Oman Oil's 7% stake in Caspian Pipeline Consortium (CPC) and equity held in undersea exploration acreages in the hydrocarbons-rich Caspian shelf.

The 990-mile CPC pipeline links reserves in western Kazakhstan to the Black Sea. It connects Tengiz and Arman fields in Kazakhstan with the Russian Black Sea port of Novorossiisk. There are also plans to use it for shipping crude from Karchaganak and Alibekmola fields.

The pipeline was completed in 2004 at an estimated investment of $2.6 billion with a capacity of carrying 565,000 barrels a day.

The capacity is to be expanded to 1.34 million barrels daily by 2015 at another investment of $4.2 billion. The other partners in the consortium are: Kazakhstan government (19%), Russian government (24%), ChevronTexaco (15%), LukArco (12.5%), Rosneft-Shell combine (7.5%), ExxonMobil (7.5%), ENI of Italy (2%), BG (2%), Kazakh Pipelines (1.75%), and Oryx of US (1.75%).

Though it is early days, success in Mittal's latest effort will mark his entry in the transportation service segment of the oil business.

This area has remained a dark spot in his oil foray as his services venture with ONGC has been languishing due to support from the Indian state-owned company.

Partnership in a key Central Asian oil transport route can be leveraged later for shipping and trading.

For Mittal, there is another advantage. His stake in Caspian Investments Resources already gives him some capacity in the CPC pipeline.

Caspian Investment is a partner in Kazakhoil-Aktobe which has transportation right to inject about 50,000 tonnes per month of oil from Alibekmola fields into the CPC pipeline at Atyrau pumping station for onward shipment.

Caspian Investments, formerly known as Nelson Resources, has stakes in the highly lucrative Alibekmola, Kozhasai, Zhambai, North Buzachi, Karakuduk and Arman fields and a stake in the CPC pipeline will ensure for Mittal a captive passage for oil from these fields.

ONGC-Mittal has bagged two blocks in Nigeria offshore, the latest hotspot for the world's explorers. It is also likely to get some of Mittal Investment Sarl's equity in Caspian Investments Resources once Mittal completes share-transfer formalities with LUKOIL.

The Kazakhstan government has also suggested that the 50% equity in the Satpayev field it is offering to India without auction be divided equally between ONGC-Mittal and ONGC Videsh, Oil and Natural Gas Corporation's overseas investment arm.


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## Contrarian

*Tatas join realty rush with 4,500-cr fund*

MUMBAI: Better late than never. Even as most of the big industrial houses have set up their realty funds to invest in India's hottest business - real estate, India's oldest and largest industrial house, the Tata group has now suddenly woken up to the opportunity. It has decided to throw in its hat in the ring with a staggering corpus of Rs 4500 crore.

Modelled on the lines of Kishore Biyani promoted Future group's Kshitij, which invests in real estate, Tata Realty & Infrastructure - a newly created company - will invest in infrastructure and real estate projects, a source familiar with the plan told TOI.

Bombay House, the group's headquarter is drawing out a blueprint for its new business. Unlike in the past, where the group was not too hot on the realty sector, the changed scenario is now ensuring that the group is betting big on this sector.

The Ambani brothers - Mukesh and Anil - also have interest in private equity funds. Recently, Morgan Stanley Real Estate fund invested approximately $152 million (Rs 675 crore) for a 10.75&#37; stake in Oberoi Constructions, making it the largest deal in the brick and mortar space.

Tata Sons director RK Krishna Kumar is driving the initiative. Kumar has brought on board Dinesh Chandiok, the former CEO of Ansal Properties to head Tata Realty.

Apart from the Tatas, foreign investors too would be sponsors of the fund. There would be different fund schemes for different projects in phases, the source added.

International Consultancy firm KPMG has been involved in strategising the Tata's real estate business. Tata Realty would look at investing in housing complexes, special economic zones, construction of bridges, ports and airports.

It is not the first time Tatas are dabbling in real estate. Set up in 1984, THDC has put up several residential projects in Mumbai, Pune, Goa and Bangalore including the high-profile Petit Towers in Mumbai's upscale Kemp's Corner.

In the early 2000s, Tatas were looking to exit from the company and had held discussions with Shapoorji Pallonji group.

Things did not fructify and now, THDC has been given a fresh lease of life. It has set the target to achieve a turnover
of Rs 2,010 crore by 2010. It is currently developing housing and commercial projects in East, South and North India.

Like other developers, THDC would also join hands with other investors to achieve financial closure of these projects. The group is sitting on land assets worth crores of rupees in different parts of the country.


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## Contrarian

Indian-American 'solves' Einstein's twin paradox

HOUSTON: An Indian American professor of electrical and computer engineering at Louisiana State University has claimed to have solved Einstein's twin paradox.

First suggested by Albert Einstein more than 100 years ago, the paradox deals with the effects of time in the context of travel at near the speed of light.

Einstein originally used the example of two clocks, one motionless, one in transit. The paradox has been described using the analogy of twins: if one twin is placed on a spacecraft travelling near the speed of light while the other twin remains earthbound, the unmoved twin would have aged dramatically compared with his interstellar sibling.

"I solved the paradox by incorporating a new principle within the relativity framework that defines motion not in relation to individual objects, such as the two twins with respect to each other, but in relation to distant stars," said the scientist Subhask Kak.

His indings were published online in the International Journal of Theoretical Physics. He completed his PhD at the IIT, Delhi in 1970.

---------------------
Not strictly related to economics, but cool news nonetheless.


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## Contrarian

*State's salary bill is Rs 7,800 cr*

PATNA: The total number of government servants in Bihar in 2006-07 is 4.35 lakh. Their total salary bill is Rs 7,800 crore, more than one-third of Bihar's revenue expenditure.

Similarly, the expenditure on pension accounts for 13 per cent of total revenue receipts. The expenditure on salary and pension together accounts for nearly half of the revenue receipts.

Bihar's budget for 2006-07 was a milestone from the perspective of both development and welfare. First, there is a surplus of Rs 4,636 crore, in place of a deficit of Rs 909 crore in 2005-06, in the consolidated fund.

Tax revenue had been projected to increase by 8 per cent and fetch additional revenue of Rs 2,697 crore over the previous year.

These are some of the points contained in the first-ever economic survey of Bihar, prepared on the pattern of the Union government, to be presented during the ensuing budget session some time in the last week of February.

The economic survey in its voluminous report said: "For the state specific needs, the Twelfth Finance Commission (TFC) has granted a sum of Rs 400 crore to Bihar."

This grant is meant for seven heads, including urban development (Rs 180 crore), technical education (Rs 50 crore), establishment of administrative training institute (Rs 50 crore) and a few other activities.

This sum, according to the survey report, is not adequate to meet all the needs of a disadvantaged state like Bihar.

Bihar had a population of 83.0 million in 2001, which now stands at 90.2 million. Of its total population, 89.6 per cent live in rural areas making it the least urban state among all the major states in India.

Total flood-prone area in the state accounts for 73.06 per cent of its total geographical area and 17.2 per cent of the total flood-prone area in the country. Flood situation is more severe in the northern plains of Bihar.

A long-term solution to this problem can be achieved by constructing dams in upper catchment areas of the Kosi, the Gandak, the Bagmati and the Mahananda rivers, the survey report said.

Tubewells account for 63 per cent of total created irrigation capacity in the state. A very high dependence for irrigation on tubewells and operation of diesel turbwells due to lack of power infrastructure in the rural areas leads to a high cost and inefficient irrigation, it said.

On industry, it said that the overall industrial sector in the state is predominated by the unregistered units, which account for more than half of its rotal income. Bihar also suffers from the problem of a sizeable number of units falling sick.

As on December 2006, there were 259 large and medium units in the state, of which, 35 units were declared sick and 17 were to be closed, it said. Road has been accorded a high priority under the present government.


----------



## Contrarian

*Centre must give special package: CM*

PATNA: CM Nitish Kumar has said the Centre should take initiatives in the forthcoming Union Budget to show that it is working to fulfil its promise of giving a special package to Bihar.

"So far, the promise has remained just that, a promise. The Centre should make some announcement in Budget to show that it is keen to fulfil the promise of giving Bihar a special package," Nitish told newsmen here on Sunday.

He said spiralling prices of essential commodities and the various problems faced by the people are due to faulty policies of the UPA government. "The minor cut in petrol and diesel prices," he said, "will not bring much respite to the people," he said.

The CM said he expected that the Centre to formulate a Budget in which interest of every sections of the country will be taken care of.

Earlier, after laying foundation and inaugurating 504 schemes at the cost of Rs 197 crore at Barh, Nitish said the government will take a decision on making Barh a district after the completion of the delimitation work.

"To look after the problems of 'taal' areas a high-powered committee has already been constituted which is studying the situation and will submit its report," he said.

Nitish, who represented the Barh Lok Sabha seat five times, also distributed 710 acres of land among 1101 landless families belonging to Dalit and extremely backward castes.

He also offered prayer at the Surya Mandir at Pandarak. He claimed a positive change in the state during past 15 months has changed peoples' perception about Bihar outside the state.

"The traders had started fleeing from here. Now they are getting attracted towards Bihar. The World Bank, Asian Development Bank and JBIC of Japan are taking interest in the state and have assured their help.

In all, investment proposals worth Rs 27,000 crore by private sector have been approved, the CM said.


----------



## Contrarian

_*State budget all set to be presented today*_

HYDERABAD: The state cabinet will meet on Monday morning to endorse the budget proposals which would be presented to the state Assembly later during the day.

Chief minister Y S Rajasekhara Reddy will explain details of the budget targets and achievements in the current year.
According to official sources, the chief minister will explain how the government's "commitment and sincere efforts,"had resulted in growth in the state gross domestic produce (GDP).

The emphasis put on agriculture has resulted in improving the share of agriculture in GDP to 25.79 per cent and despite natural calamities like floods and drought, the state has achieved a record production of 169 lakh tons of foodgrains and 69 lakh acres of new ayacut has been added as a result of Jalayagnam programme, the source pointed out.

The chief minister will also highlight the higher allocations for welfare sectors in the 2007-08 budget. Reddy will reel out statistics about how the government had spent about Rs 700 crore more than the previous government on power sector in the last three years.

The TDP during 1999-2004 had spent Rs 3265.71 crore while the present government has spent Rs 3922.72 crore. Chief minister Rajasekhara Reddy is likely to explain about how the government had spent more than the previous government in other sectors such as rural development.

The chief minister would also apprise the state cabinet about his proposal to lay emphasis on better implementation of Indiramma programme, 25 paise interest on loan to self help groups, scholarships, distribution of pensions and other welfare activities during the district collectors' conference whish is scheduled to be held on February 24 and 25.


----------



## Contrarian

I have no more energy left to post more news, this above barrage was only 5 or days worth of news, and too not all, as i am in a tearing hurry


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## Neo

And I'm done after reading four pages...


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## Neo

February 25, 2007 
*India should not let rupee float freely*

AGRA (India), Feb 24: India should not allow its rupee currency to float freely and must retain some controls to avert any major crisis due to capital flight, a member of the panel on currency reform appointed by the central bank said on Saturday.

The panel, which submitted its report in September, has ecommended a three-phase, five-year plan to allow fuller rupee convertibility and greater movement of capital in and out of the local currency by the end of the 2010/11 fiscal year.

Subsequently, the central bank allowed resident Indians to remit up to $50,000 in a single financial year, double the earlier limit, and permitted foreign exchange earners to retain 100 per cent of their earnings in foreign exchange accounts on the panel's recommendation.

Both these measures were opposed by A.V. Rajwade, who says such steps will be detrimental and favours a more gradual reform process.

I don't see any great merit in a freely floating currency for an economy like India...We are a capital hungry economy, he told Reuters in an interview on the sidelines of a fixed income conference in the northern Indian city.

Right now, no money is going out because returns in India are very high, but when the situation changes, that is when capital flight will take place. That is when it is going to be most dangerous The rupee has been convertible on the current account since 1994, meaning it can be changed freely into foreign currency for specific purposes like trade-related expenses.But it cannot be converted freely for activities such as acquiring overseas assets.

Rajwade said India was not ready for a full float as the majority of its exports were commodities which are sensitive to prices making exchange rate competitiveness key to growth.

Also, export units were not equipped to manage losses in case of massive swings in exchange rate.

With the Indian economy growing at an average of over 8 per cent a year in the past three years and becoming increasingly integrated with the global economy, policymakers and analysts have been clamouring for a freer float.

But high growth has resulted in a spurt in domestic inflation. Wholesale price inflation rate for the 12 months to Feb. 10 was 6.63 per cent, lower than the previous week's 6.73 per cent, the highest in more than two years.

Rajwade cautioned the government and the central bank against using the rupee to control inflation.

Some analysts have said the government and central bank could allow the rupee to appreciate to make imports cheaper and calm inflation.

The Indian rupee has risen more than 6 per cent against the US dollar since hitting a three-year low of 47.04 in July. A six-currency JP Morgan index shows that the currency is overvalued by 9 per cent.

They have been keeping rupee plus minus 5 percent of the neutral level in inflation adjusted terms. Lately, it had gone to almost 10 percent. I think that was also a step probably taken to curb inflation, said Rajwade.

But I think that has dangerous implications. As it is our current account deficit would be about $16 billion plus this year.

http://www.dawn.com/2007/02/25/ebr21.htm


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## Neo

Sunday, February 25, 2007 

*IndiaÃ¢â¬â¢s booming economy brings toxic hi-tech waste*

NEW DELHI: IndiaÃ¢â¬â¢s booming economy is producing mountains of toxic electronic waste like discarded computers and televisions, but there are no laws to regulate its disposal, a local environment group said on Friday. 

Toxics Link said while the Asian giantÃ¢â¬â¢s economy has been growing at eight percent annually over the last three years, it has also resulted in the generation of 150,000 tonnes of electronic waste each year. 

An eight-month study by the group found that IndiaÃ¢â¬â¢s bustling financial hub of Mumbai was the biggest source of electronic or e-waste, generating 19,000 tonnes every year. 

Ã¢â¬ÅBeing the hub of IndiaÃ¢â¬â¢s commercial activities, the banks and financial institutions in Mumbai generate huge amounts of e-waste,Ã¢â¬Â Ravi Agarwal, director of Toxics Link, told a news conference. 

Ã¢â¬ÅBut like the rest of India, there are no laws for its safe handling and this will lead to serious health and environmental impacts.Ã¢â¬Â 

Agarwal said the government had to regulate the management of e-waste by setting up a central authority to collect all discarded electronic goods and put in place laws to deal with disposal and recycling. 

IndiaÃ¢â¬â¢s economic liberalisation that began in the early 1990s has seen hundreds of banks, financial institutions, electronics industries, information technology firms and call centres setting up operations across the country. 

The booming economy has also led to a growing middle class estimated around 300 million which has more disposable income and an insatiable appetite for electronic products. 

Ã¢â¬ÅWhen electronics like televisions, PCs and refrigerators are discarded, it is the informal sector made up of tens of thousands of people who collect it and then break it down and recycle parts of it which can be sold,Ã¢â¬Â said Agarwal. 

Ã¢â¬ÅThey extract toxic-heavy metals such as lead, mercury, cadmium and chromium which are sold for other uses.Ã¢â¬Â 

These metals harm the development of the brain, kidneys and some are carcinogens which enter the food chain through the air, water and soil. 

http://www.dailytimes.com.pk/default.asp?page=2007\02\25\story_25-2-2007_pg5_30


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## Neo

Sunday, February 25, 2007 

*Arcelor Mittal to invest $2.2b in Senegal mine*

BRUSSELS: Arcelor Mittal, the worldÃ¢â¬â¢s largest steelmaker, said on Friday it would invest $2.2 billion to develop iron ore mining in Senegal, pursuing a strategy of increasing the share of metal supply it directly owns. 

Ã¢â¬ÅOnce completed, the Faleme project will prove to be an important and competitive source of iron ore supplies for our European plants,Ã¢â¬Â Arcelor Mittal majority owner and Chief Executive Lakshmi Mittal said in a statement. 

However, South AfricaÃ¢â¬â¢s Kumba Iron Ore may undermine a potential deal, with the threat of legal action over its claim for a participation in the Faleme project. 

AfricaÃ¢â¬â¢s biggest iron ore producer exercised an option to acquire a controlling stake in the project some time ago. Senegal put this interest in dispute in 2005. 

Kumba, majority owned by Anglo American Plc, asked for urgent clarification from the government on Friday. 

Senegal confirmed later it had awarded the Faleme project contract to Arcelor. Ã¢â¬ÅWeÃ¢â¬â¢d renounced the contract with Kumba some time ago. Yes, weÃ¢â¬â¢ve signed with Mittal for $2.2 billion,Ã¢â¬Â Energy and Mines Minister Madicke Niang told Reuters. 

Arcelor said its project comprised building a new port near Dakar and the development of about 750 kilometres of rail infrastructure to link the mine with the port. 

The investment would be a major boost for SenegalÃ¢â¬â¢s infrastructure and for the government of economic liberal President Abdoulaye Wade. It comes two days before a presidential election in the former French colony. 

Since winning the last elections in 2000, Wade has tried to promote industrial development in an effort to create jobs and transform a largely farming and fishing economy. Arcelor Mittal said it aimed to achieve annual production capacity of between 15 million and 25 million tonnes and that total estimated reserves were about 750 million tonnes. Production is expected to begin in 2011. 

Ã¢â¬ÅThis goes in the right direction, they are continuing the vertical integration of their iron core needs,Ã¢â¬Â said an analyst who declined to be named. 

The steelmakerÃ¢â¬â¢s shares were up 0.7 percent at 39.45 euros, roughly in line with the Dow Jones Stoxx European basic resources index, which was up 1.2 percent. 

Arcelor Mittal said on Wednesday its 2006 core earnings reached $15.3 billion, in line with its guidance, and indicated it was looking at more acquisitions in India and China as well as investments in new plants around the world.

http://www.dailytimes.com.pk/default.asp?page=2007\02\25\story_25-2-2007_pg5_31


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## Neo

Sunday, February 25, 2007 

*United States to expand Indian access to high-tech goods*

WASHINGTON: The United States and India agreed on Friday to begin adjusting their policies to enable greater trade in high technology, part of efforts to cement their fast-growing economic and political relations. 

The US-India High Technology Cooperation Group produced plans to ease US export controls for selected Indian buyers, while tightening IndiaÃ¢â¬â¢s regime governing exports of industrial items with military applications, US Assistant Secretary of Commerce Christopher Padilla told reporters. 

The United States is committed to Ã¢â¬Åclear up the Cold War cobwebsÃ¢â¬Â of US curbs on dual-use technology that imposed restrictions on pro-Soviet India, he said after the two-day meeting of government officials and business executives. 

Washington has identified Indian technology companies that will be eligible for the US Ã¢â¬ÅTrusted Customer ProgramÃ¢â¬Â of streamlined or waived licensing requirements for buyers with good records of compliance with nonproliferation treaties. 

India would be included in a program, proposed last year and under US governmental inter-agency review that will also cover China and other states, Padilla said. 

To facilitate trade in chemicals, military supplies and other technology, Washington presented lists to New Delhi of products for which it wants India to bring its policies in line with international anti-proliferation standards. 

Experts from the two countries would meet in several months and conduct a Ã¢â¬Åproduct-by-product comparison of the Indian control lists with the four major multilateral control regimes,Ã¢â¬Â Padilla said. 

IndiaÃ¢â¬â¢s policies on exports of nuclear technology and missiles were getting close to those of the Nuclear Suppliers Group and the Missile Technology Control Regime, he said. 

India was also moving closer to harmony with the controls of the Australia Group, which aims to prevent chemical and biological materials from being sold to countries or others that would use them in weapons, said Padilla. 

New Delhi still needed to close large gaps in its policies with those of the Wassenaar Arrangement, which governs dual-use items and conventional weapons, he added. 

The United States and India dramatically advanced their relations in 2005 when visiting Indian Prime Minister Manmohan Singh and President George W Bush signed a host of agreements, including a deal that, when finalized, would allow US sales of civilian nuclear equipment and fuel to India. 

http://www.dailytimes.com.pk/default.asp?page=2007\02\25\story_25-2-2007_pg5_32


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## Neo

*Forex reserves rise $4 bn in a week*

FEBRUARY 23, 2007

MUMBAI: India's foreign exchange reserves rose by nearly $4 billion in a week to hit a record high in mid-February, which analysts saw as evidence of suspected central bank intervention in the currency market to cap the rupee. 
Foreign exchange reserves rose to $188.912 billion on Feb 16, from $185.078 billion a week earlier, the Reserve Bank of India (RBI) said on Friday. 

Reserves had risen by $5 billion in the week to Feb 9, and have now risen by $11.7 billion since Dec. 29. 

The rupee has risen 6.4 percent from a three-year trough of 47.04 per dollar last July, powered by foreign funds flowing into the booming Indian economy, but has lost some momentum this month and has been unable to breach 44 per dollar. 

Traders said the central bank has been intervening since November, and appears to have stepped up its efforts in February, capping the rupee at a 16-month high of 44.03 on Feb 9. 

On Friday, the rupee ended at 44.2050. A JP Morgan index estimates that the currency is overvalued by 9 per cent. 

"I expect capital inflows to continue as growth in India is stronger than rest of the world. Liquidity management will become a priority for the Reserve Bank," said Shuchita Mehta, chief India economist at Standard Chartered Bank. 

The central bank bought $5 billion in intervention in November and December, official data showed. Intervention figures for January and February have not been released. 

Before November, the central bank's previous intervention was in May, when it bought $504 million. It bought a net $8.14 billion in the financial year to March 2006, down from $20.85 billion in 2004/05. 

http://economictimes.indiatimes.com...s_rise_4_bn_in_a_week/articleshow/1669845.cms


----------



## Neo

*India's engineering export likely to touch $ 50 bn by 2020*

New Delhi, Feb 23

India's contribution to the growing global market of engineering services may touch 50 billion dollar by 2020, double the current export size. 

"Of the one trillion dollar world market of engineering services, India's export is likely to be doubled by 2020 at around 50 billion dollar," Nasscom President Kiran Karnik said today while speaking at the PTC World 2007 conference. 

He also welcomed the Semiconductor policy announced by the Government yesterday saying it would enable India to attract foreign nvestments at least to the tune of 10 billion dollar to start with. 

"An average investment of 2-3 billion dollar goes into setting up of a semiconductor plant and with the semiconductor policy in place, India could attract good capital investment. 

I don't know how many plants would be set up here but I am hopeful and even if we get a few, we can see an investment of at least 10 billion dollars coming this way," Karnik said. 

India offers a huge market and now with an easy access, it has become an investment destination, he added. 

However, India was facing a crunch of skilled manpower, which needed to be addressed immediately in order to become globally competitive and to tap the existing potential. 

"Unfortunately of the 450,000 engineers that our country churns out every year, only 30 per cent have the skill sets to meet the requirement of the industry. We have already begun to feel the shortage and our endeavour is to make good this crunch through various training programmes and other initiatives," Karnik said.

http://www.indianmuslims.info/news/...ing_export_likely_to_touch_50_bn_by_2020.html


----------



## Neo

*'India to become a trillion dollar economy by '08' *  

Saturday, February 24, 2007 

AGRA, FEBRUARY 24: RBI Deputy Governor Rakesh Mohan said on Saturday he expected sustained growth in excess of 9.0 per cent for the Indian economy. 
India, Asia's fourth largest economy, is expected to grow by 9.2 per cent in the fiscal year ending March 2007. 

That would mark the country's fastest growth rate in almost two decades, underlining its increasing clout in the world economy as manufacturing and service firms power ahead. 

India should become a trillion dollar economy by March 2008, Mohan told a fixed income conference in Agra. 

"We should be a trillion dollar economy by next year, I mean 2007/08," Mohan said. 

World Bank data show that at the end of 2005 only nine economies had a GDP of more than $1 trillion, with Brazil, South Korea and India the next closest with GDPs of almost $800 billion. 

The government wants to raise sustainable growth to 9 percent and beyond in order to spread wealth to India's 260 million poor and generate revenue to bring down its large fiscal deficit. 

Mohan said the combined deficit of the Central and state governments at 6 per cent was still high by global standards. 

India's economic growth has averaged 8.3 per cent over the past three fiscal years. The government has also revised up growth for fiscal 2005/06 to 9.0 per cent from 8.4. 

But the red-hot pace is straining infrastructure and leading to a squeeze on capacity, which is fuelling inflation, now at a two-year high above 6.5 per cent. 

Mohan said India was moving towards more liberal financial market regulations but said the government securities market needed more liquidity. 

http://www.financialexpress.com/latest_full_story.php?content_id=155913


----------



## Owais

*UAE will invest $33b in Indian food industry *

DUBAI: United Arab Emirates (UAE) will invest $33 billion in the Indian food processing industry, as the two countries would soon be signing a Memorandum of Understanding (MoU) in this regard. 

Indian Food Minister, Subodh Kant Sahai and the UAE Minister for finance and Industry, Dr. Muhammad Khalfan Bin Qaharbash in a meeting held here decided this.

Subodh Kant told that the agro-based industry has the potential of Rs1000 billion investments. He said that the infrastructure for the UAE agro-based industry would be built under the agreement, while the Indian government would be giving tax relief on these investments.

Experts told that 90 percent of the food and beverage products of GCC countries were imported and its value would swell up to $20 billion by 2015. India last year exported food and beverages worth $9 billion, while the grains worth $500 billion annually go wasted due to the non-availability of processing, storage and value addition facilities, experts further said. 

http://geo.tv/geonews/details.asp?id=2577&param=3


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## Janbaz

*India fuel demand leaps higher in Jan*

NEW DELHI: India&#8217;s fuel demand jumped 7.3 per cent in January from a year ago, led by naphtha and diesel, extending a period of rapid demand growth in Asia&#8217;s third-largest consumer, official data showed on Monday.

Sale of refined oil products, a proxy for oil demand, rose to 10.46 million tonnes, the data showed. The growth came a month after India&#8217;s first reduction in domestic fuel prices and just ahead of its second, pushed through two weeks ago to combat inflation at a two-year high.

Pump prices of petrol have fallen by 4.5 per cent and diesel by 3.2 per cent. Diesel sales, which account for nearly a third of consumption, rose 8.2 per cent in January from a year earlier to 3.71 million tonnes (900,000 barrels per day).

But oil demand was also fuelled by growing industrial use of feedstock naphtha, as fertiliser firms and some power plants struggled to get enough cheaper natural gas. Domestic naphtha sales surged 28 per cent, their third double-digit rise in a row.

&#8220;Higher consumption by petrochemical plants and the restarting of the Dabhol power plant have added to naphtha growth,&#8221; said a government source. India has been importing naphtha to run the Dabhol project in the western state of Maharashtra, which was fired up in October after demand for its power picked up.

Despite the increase in consumption, however, the data showed an unexpected trebling in naphtha exports to 1.3 million tonnes for January, although this was partly offset by imports, which rose by nearly 154 per cent to 476,900 tonnes. &#8220;Higher naphtha imports resulted in more domestic surplus available for exports,&#8221; said the oil ministry official, who did not wish to be identified. &#8220;(Gas) scarcity appears to have extended into January, since one of the main source of LNG imports, Qatar&#8217;s RasGas 2 plant, declared force majeure ... and deferred two cargo loadings contracted by India&#8217;s Petronet,&#8221; said an International Energy Agency report.

Motor fuel sales also rose due to a court ruling banning the overloading of trucks, forcing more vehicles on to the roads. &#8220;High GDP growth especially in manufacturing sector is also reflected in the petroleum product sales,&#8221; the official said.

Oil product exports in January rose 173 per cent to 6.1 million tonnes, driven by naphtha and jet fuel. Fitch in its outlook for the Indian oil and gas sector for 2007 has said, &#8220;with the increase in refining capacity in 2006, domestic overcapacity will country, leading to higher exports.&#8221;

India forecast an increase in oil product exports to 93 million tonnes in 2012 from 21.5 million tonnes in 2005/06. Oil product imports rose by 21.7 per cent to 1.2 million tonnes, mainly due to diesel and naphtha imports. Reliance Industries Ltd, Indian Petrochemical Corp Ltd and Haldia Petrochemicals Ltd have imported over 1.2 million tonnes of naphtha this year. Crude oil imports during January rose 0.7 per cent to 9.08 million tonnes. India imports nearly 70 per cent of its total crude oil requirement in a year.

The News.
http://thenews.jang.com.pk/daily_detail.asp?id=44610


----------



## Neo

*Indian Railways to post $4.4bn budget surplus *

NEW DELHI: Indian Railways, on the verge of bankruptcy six years ago, will post a surplus of $4.4 billion this fiscal year and spend the money on its accident-prone network, the rail minister said on Monday. 

Railways Minister Lalu Prasad Yadav shouted amid uproar in the parliament as he presented next yearÃ¢â¬â¢s budget for the state-owned service. IndiaÃ¢â¬â¢s fiscal year starts April 1. Ã¢â¬ÅUnder the previous administration the railways was bankrupt but now we have turned it around,Ã¢â¬Â Yadav said in a swipe at a rival politician who was railways minister in the previous government. Yadav promised lower fares, more comforts such as cushioned-seats instead of wooden benches. 

He also said the network would add a slew of new carriages and services at stations to boost revenues further next year. Ã¢â¬ÅSecond class carriages Ã¢â¬â with wooden seats and sleeping berths will be replaced by comfortable cushioned seats,Ã¢â¬Â Yadav said. 

The railway, started by IndiaÃ¢â¬â¢s former British colonial rulers, has around 1.6 million employees, making it the worldÃ¢â¬â¢s biggest civilian employer and runs thousands of trains daily. But the 150-year-old railway which transports more than 15 million people daily in the country of 1.1 billion people has been notorious for its antiquated equipment, financial losses, delays and red tape. 

Kerosene was used to create a huge firebomb aboard the Ã¢â¬ÅFriendship ExpressÃ¢â¬Â as it headed north from Panipat to Lahore, police said. Yadav, a former chief minister of IndiaÃ¢â¬â¢s lawless state of Bihar until corruption allegations led him to step aside in favor of his wife, has won kudos from management experts for turning around the railways since taking his post in May 2004. 

The turnaround was deemed even more remarkable because experts warned in 2000 that the railway faced bankruptcy with a surplus of just Rs3.5 billion and was mired in a Ã¢â¬Återminal debt trap.Ã¢â¬Â Rail is still the main form of long-distance travel, but experts forecast an explosion in the number of people travelling by air. 

http://www.thenews.com.pk/daily_detail.asp?id=44611


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## Neo

*Nissan joins Indian automobile venture *

CHENNAI, India: Japanese automaker Nissan joined on Monday a venture by French partner Renault to build a $902 million plant in India, seeking to compete with rivals Toyota and Honda for a slice of a booming car market. 

Nissan and Renault will together hold 50 per cent of the venture, with local partner Mahindra and Mahindra taking the rest, the three companies said in a statement. The southern city of Chennai, known as IndiaÃ¢â¬â¢s Detroit, was chosen as the location for the factory, which will have the capacity to turn out 400,000 cars a year seven years after the start of production in 2009. 

Nissan and Renault are latecomers to the Indian car market, which is forecast to expand 10 per cent a year to reach two million units in 2010 as an economy expanding nine per cent a year boosts the buying power of consumers and stokes demand for personal transport. 

The Indian car market expanded by 68 per cent between 1998 and 2003 to reach 1.04 million vehicles in 2004, according to Renault. Ã¢â¬ÅIndia is a key market for RenaultÃ¢â¬â¢s international growth ambitions,Ã¢â¬Â Patrick Pelata, RenaultÃ¢â¬â¢s executive vice president, said in the joint statement. 

Honda is already selling City and Civic models in the country and ToyotaÃ¢â¬â¢s local range includes the Innova and Corolla. Another Japanese rival SuzukiÃ¢â¬â¢s local venture is IndiaÃ¢â¬â¢s biggest carmaker. 

Nissan joined the alliance to Ã¢â¬Ågain a rapid entry advantage for local manufacturing in India,Ã¢â¬Â Carlos Tavares, the firmÃ¢â¬â¢s executive vice president said in the statement. Ã¢â¬ÅNissan was able to evaluate several different options for our first manufacturing base in India but the advantages of working with our Alliance partner and their local Indian partner was compelling,Ã¢â¬Â he said. 

Nissan already has manufacturing sites in Japan, United States, United Kingdom, Spain, Mexico, China, South Africa, Thailand and Egypt. The 400-hectare (925-acre) Chennai factory will provide auto production capacity for each partner, enable the rollout of both cars and sports utility vehicles and include a power train facility for Renault and Nissan. 

A range of automobiles tailored to the Indian market will be rolled out under the alliance, which will enable Mahindra to move into passenger cars from utility vehicles. Ã¢â¬ÅThis is a red letter day in the globalisation of the Indian automotive space,Ã¢â¬Â Mahindra group chairman Keshub Mahindra said. Ã¢â¬ÅThe expansion of our strategic partnership with Renault to include Nissan is designed to bring world-class platforms to the evolved car buyer.Ã¢â¬Â 

http://www.thenews.com.pk/daily_detail.asp?id=44612


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## Neo

Tuesday, February 27, 2007 

*AXA targets India and China in Asia push*

HONG KONG: AXA Asia Pacific Holdings Ltd, the regional unit of No 2 European insurer AXA, plans to expand its footprint in fast-growing China and India and has its eyes open for acquisitions, a top executive said. 

AXAÃ¢â¬â¢s Chinese joint venture, AXA Minmetals Assurance Co, has won approval to open an office in Foshan and satellite offices in Panya and Huadu, in the southern province of Guangdong. It already has outlets in Shanghai, Beijing and Guangzhou. 

The firm is also planning to expand its network in India, where it has a joint venture with conglomerate Bharti Enterprises and plans to grow to 20 cities from six by the end of the year. 

Ã¢â¬ÅWe are very ambitious to get to be a leading player,Ã¢â¬Â said Mark Pearson, regional chief executive of life insurance, said in an interview, acknowledging that AXA is a Ã¢â¬Åsecond wave entrant in IndiaÃ¢â¬Â. 

Its joint venture with Bharti, which has businesses ranging from telecoms to insurance and commercial farming, began operating last August. British rival Prudential began operations with joint venture partner ICICI Bank, IndiaÃ¢â¬â¢s No. 2 lender, in December 2000. 

Pearson expects AXAÃ¢â¬â¢s Indian business to grow quickly as it has a national license and the potential is vast in a company with a fast-growing middle class and low penetration rates for insurance policies. 

India and China will be key drivers as Sydney-listed AXA Asia Pacific, which excludes Japan, aims to more than double the value of new business to A$312 million ($248 million) by the end of 2008 from A$142 million at end-2004, he said. 

Ã¢â¬ÅThatÃ¢â¬â¢s going to come primarily from sales,Ã¢â¬Â he said. Ã¢â¬ÅWeÃ¢â¬â¢ve grown from 6,000 agents to more than 11,000 (regionally) in the past year and with the opening of India we should continue to see very strong growth.Ã¢â¬Â AXA Asia Pacific last week posted a 24 percent increase in 2006 operating earnings to A$454.5 million. 

Its parent company plans to spend about 10 percent of its profits on the insurerÃ¢â¬â¢s Asia expansion plans, Pearson said. AXA group net profit was US$6.7 billion last year. AXA Asia Pacific agreed to buy the Hong Kong life insurance business of Winterthur in December and it acquired MLC Hong Kong from National Australia Bank a year ago. Ã¢â¬ÅWe remain opportunistic on acquisitions,Ã¢â¬Â Pearson said. Ã¢â¬ÅWe have markets we look at and Hong Kong would be one.Ã¢â¬Â 

He declined to go into further detail but also noted that Taiwan and South Korea, where AXA Asia Pacific does not have operations, look increasingly attractive, although he said the company is not set to announce any new moves in those markets. Ã¢â¬ÅThose are two obvious gaps on where AXA is in Asia,Ã¢â¬Â he said, noting AXA exited Taiwan five years ago but that Ã¢â¬Åthings have liberalised extensively over the last couple of years.

http://www.dailytimes.com.pk/default.asp?page=2007\02\27\story_27-2-2007_pg5_22


----------



## Neo

Tuesday, 27, February, 2007 

*India-UAE Economic Ties Brisk as Trade Balloons*
K.T. Abdurabb, Arab News 

DUBAI, 27 February 2007 Ã¢â¬â The relations between India and the UAE were poised to strengthen even further as India has emerged as DubaiÃ¢â¬â¢s largest export destination ahead of Pakistan, Iran and Kuwait, Indian consul general Venu Rajamony said yesterday.

Ã¢â¬ÅThe trade between the UAE and India has diversified and rapid economic growth of the Indian economy has made it an attractive destination for investments from UAE. Indian companies have become more robust and confident with the rapid economic growth and are entering Dubai and northern Emirates in larger numbers. Dubai is increasingly an important trans-shipment point and logistic hub for the Indian goodsÃ¢â¬Â he said, while addressing a press conference in Dubai. 

According to Dubai Customs statistics, the total trade between Dubai and India over a period of 5 years, from 2002 to 2006 has increased from $2.5 billion to $10.9 billion reflecting an increase of 336 percent. Over 80 percent of the trade between India and UAE are routed through Dubai. For the year 2006, the total non-oil trade between India and Dubai was $10.9 billion. Export from India to Dubai in the year 2006 was $6.4 billion. Import into India from Dubai was $4.5 billion.

According to the figures released by the Dubai Government Department of Tourism & Commerce Marketing (DTCM), India has emerged as DubaiÃ¢â¬â¢s largest export destination ahead of Pakistan, Iran and Kuwait. However, China leads as the top exporter to Dubai followed by India. On the re-export front, India was second after Iran as destination of re-exports from Dubai. 

In 2006, major import from India to Dubai was diamond valued at $1.3 billion. In fact, top five commodities comprised of diamond, jewelries, platinum, gold and scrap of precious metals. In 2006, of the total exports of $4.5 billion from Dubai to India, $1.2 billion comprised of gold. The top five commodities exported from Dubai to India were ferrous waste & scrap, aluminum waste & scrap, copper waste & scrap and paper waste & scrap. 

http://www.arabnews.com/?page=6&sec...m=2&y=2007&pix=business.jpg&category=Business


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## Janbaz

*India&#8217;s economy slows on lower farm growth *

MUMBAI: A drop in farm output will lead to a dip in economic growth in India for the fiscal third quarter as compared to a record-setting pace set in the first half of the year, analysts say. India, which on Wednesday will report its growth figures for the quarter to December, clocked growth of 9.1 per cent in the first half of the year, the fastest among major world economies after China. 

But analysts surveyed said they expect the third quarter will show a slight slowdown. &#8220;We project quarterly growth at 8.7 per cent,&#8221; said Rajeev Malik, a Singapore-based Asia economist with JP Morgan Chase Bank. A shortfall in the autumn harvest will affect the rate of growth, which has been driven by manufacturing and services in the 850-billion-dollar economy, said Shuchita Mehta, South Asia economist with Standard Chartered in Mumbai. 

&#8220;Production trends of the kharif (autumn) crop last year will impact GDP data,&#8221; said Mehta, who predicts third quarter growth of around 8.5 per cent. She said however she was confident that a full-year government growth forecast revised up in February to 9.2 per cent from around 8.5 per cent would be realised. 

&#8220;Growth will stay above the trend. We expect the central bank&#8217;s moves to curb inflation and credit growth to take effect by April,&#8221; Mehta said. Earlier this month, India&#8217;s central bank raised its cash reserve ratio to 6.0 per cent from 5.5 per cent to take money out of the banking system in a bid to slow rapid credit growth that is helping fuel inflation. 

The move was sparked by the rising inflation rate, which reached 6.73 per cent this month &#8212; its highest level in more than two years and well above the 5.0 to 5.5 per cent the central bank has forecast for the year ended March.

The News.
http://thenews.jang.com.pk/daily_detail.asp?id=44739


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## Janbaz

*Indian growth rate projected at 9.2&#37; in &#8216;06-07*

By Iftikhar Gilani

NEW DELHI: While projecting an upsurge in investments with an economic growth rate of record 9.2 percent by the end of year 2006-07, the Economic Survey presented in the Indian parliament here on Tuesday has admitted slow progress on the social sector front.

Presenting the survey for 2006-07 an annual ritual before the Union Budget, Finance Minister P. Chidambaram called for a &#8220;calibrated fight&#8221; to contain inflation without compromising the growth.

The survey also stressed reviewing the multiplicity of poverty-alleviation schemes, subsidy shift to benefit only the truly needy and called for efforts to ease pressure on prices.

It expressed concern over the government&#8217;s subsidy bill on food, fertilisers and petroleum overshooting the budgeted provision of Rs 44,792 crores by Rs 52,00 crores during 2006-07 despite the subsidies dropping in percentage term proportionate to GDP (gross domestic product) from 1.7 percent in 2002-03 to 1.2 percent last year and 1.1 percent of GDP in 2006-07.

Stating that inflation in recent times has been triggered by the rapid rise in prices of primary articles all over the world, the survey promises that the government would have appropriate policies to maintain and manage high growth without inflation as it is already making efforts to ease pressure on prices. It does not rule out &#8220;moderate inflation&#8221; to sustain high growth.

No early respite: The survey, however, dashes off all hopes of early containment of the price rise as it says: &#8220;In the current year, pressure on inflation may persist because of a mismatch in supply and demand in some primary articles and firm international prices.&#8221;

Instead of sharing the blame for the skyrocketing prices, the government has chosen to list a series of factors that have exerted pressure on demand side pushing up prices like &#8220;higher demand as a result of an accelerated growth in GDP, higher growth in reserve money because of a faster increase in foreign assets, credit growth and other related factors.&#8221; The survey goes on to list a series of steps the government took during the year to contain the prices.

On social sector front, the Centre has increased its budget from Rs 18,240 crores in 1995-96 to Rs 87,607 crores in 2006-07 and yet, the survey says, the availability of so large resources alone will not guarantee faster development as a lot depends on the state governments under whose domain come implementation of the programmes. The remedies it prescribes for faster growth on this front are: Time-bound achievements of physical targets, accountability and transparency.

Priorities: Painting a rosy picture of the economy destined to provide enough money for every mission and project taken up for the people's welfare, the survey says: "Overall macroeconomic fundamentals are robust, particularly with tangible progress towards fiscal consolidation and a strong balance of payment positions."

It stressed that the economy has decidedly "taken off" and moved from a phase of moderate growth to a new phase of high growth. For a sustained high-growth trajectory of the growth, the survey recommends two issues and three priorities. The issues are: sustainability of high growth with moderate inflation, and inclusive nature of high growth.

The priorities that the survey sets for the government are: Rising to challenge of maintaining high growth; bolstering the twin pillars of growth -- fiscal prudence and high investment; and improving effectiveness of government intervention in critical areas such as education, health and support to the needy.

Industrial growth: The survey lauds the unabated growth of industrial sector to reach 10.6 percent in the first nine months of the current financial year and says the growth would have been even higher but for the disappointing performance of two sub-sectors: mining and quarrying, and electricity, gas and water supply. The core industries - electricity, coal, steel, crude oil, petroleum refinery and cement - too recorded 8.3 percent growth between April and December 2006 as against 5.5 percent during the same period in the previous year.

The survey pegs agricultural growth at 2.7 percent with the total foodgrains production in 2006-07 slated to go up to 209.2 million tonnes, over half a million tonnes more than the previous year. According to it, the stocks of foodgrain in the country stood at 18.8 million tonnes as on January 1, 2006 which was lower than 21.7 million tonnes on January 1, 2005. The buffer stock norm is 20 million tonnes.

The survey commends the decentralised procurement scheme launched by the government last year under which the designated state governments procure, store and also issue foodgrains to the PDS and the difference between their economic cost and the central issue price is passed on by the Centre as subsidy.

The survey says the new system helps in covering more farmers, improves efficiency of PDS and provides varieties of foodgrains more suited to local taste while also reducing the transportation costs that the Food Corporation of India was bearing. A record procurement of 10.9 million tonnes of rice was made under the new scheme.

The survey also refers to the rehabilitation package provided to the distressed farmers in the 31 suicide-prone districts of Maharashtra, Andhra Pradesh, Kerala and Karnataka and seeks to dispel apprehensions about SEZs through sequencing to sustain popular support for reforms and reconcile the conflicting interests of various reforms constituencies. The survey goes on to list six kinds of apprehensions about SEZs but avoids any quickfix remedies and instead says appropriate polices and safeguards should be able to take care of these without sabotaging establishment of SEZs.

Unemployment: The economic survey also hails the reversal of the declining employment growth from 2.1 percent in 10 years ending 1993-94 to 1.6 percent in five yeas ending 1999-2000 and 2.5 percent in five years ending 2004-05. Nevertheless, it stressed the need for faster employment growth to not only absorb the addition to the labour process with the ongoing demographic changes but also to reduce the unemployment rate.

It lays stress on the organised private sector stepping in to provide employment at a time when the government is going in for rightsizing of the public sector whose primary objective is to deliver essential services and not provide direct employment. The worrisome factor for it is a marginal decline in employment in the organised sector between 1994 and 2004, the annual growth decelerating from 1.2 percent during 1983-94 to a negative percentage of 0.38 per annum during 1994-2004.

Other economic activities coming under the Economic Survey's scanner with appreciation are: Trade, hotels, transport and communication services grow at double digit rates for the fourth consecutive year; saving rate expected to increase with higher growth of economy; steady progress on infrastructure front; satisfactory fiscal consolidation with the revenue deficit not only reduced but budgeted to be eliminated in 2006-07, two years ahead of target; Foreign Direct Investments (FDIs) rise by 98.4 percent in the first half of 2006-07; foreign exchange reserves touch new high of US $ 180 billion; and exports maintain buoyancy.


Daily Times.
http://www.dailytimes.com.pk/default.asp?page=2007\02\28\story_28-2-2007_pg5_27


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## Neo

Wednesday, 28 February 2007 

*India budget focuses on farming* 

India says it needs to be self-sufficient in food terms.

India's government has unveiled its annual budget, saying agriculture "must top the agenda of policy-makers". 
The finance minister said unless India could be self-sufficient in food, this could upset "macro-economic growth stability and growth prospects". 

The governing Congress party also said high growth would be critical as a way to fight widespread poverty. 

However, the government said that economic growth, at 8.6% in the third quarter, had also pushed inflation up. 

*Inflation *

Analysts greeted the government's 6.81 trillion rupee (ÃÂ£78bn; $153bn) budget positively. 

"The good part is that the budget is not anti-inflationary," said Rashesh Shah, chief executive of Edelweiss Capital. 

However, Finance Minister Palaniappan Chidambaram said the government still had concerns over inflation. 

While India had already taken "a number of measures on the fiscal, monetary and supply sides to maintain price stability", it would take more measures if needed. 



> Broadly, it is a growth-oriented budget, with focus on agriculture and education
> 
> A. Balasubramaniam, Birla Sun Life Asset Management



There had been fears that anti-inflation measures could limit growth in Asia's fourth-largest economy. 

Figures for February revealed that wholesale price inflation had reached nearly 7%, following higher food and consumer goods prices. 

*Equity and growth *

In a bid to boost India's agriculture - which grew by 2.3% on average in the last three years, against a target of 4% - the government said that it would offer cheaper credit to more farmers. 

Some two thirds of Indians make a living from agriculture. 

Mr Chidambaram said five million farmers would be "brought into the banking system" in the present fiscal year and the rural job guarantee scheme would be expanded. 

According to analysts, a lack of adequate, affordable credit has prompted a wave of suicides amongst farmers across rural India. 

Mr Chidambaram said: "Revenues were buoyant for the third year in succession. I have put the revenues to good use to promote inclusive growth, equity and social justice." 

*'Business momentum' *

A Balasubramaniam, chief investment officer at Birla Sun Life Asset Management in Mumbai, said: "From the corporate angle, reduction in excise duties in relevant sectors are positive." 



> We must remember the finance minister has not derailed business momentum
> 
> Stockbroker Sushil Choksey



But the increase in excise duty on cement was "a punishment for the sector", he said. The budget also included higher taxes for telecoms firms. 

India's main stock market fell 4% after the budget was unveiled amid concerns about plans for higher taxes on dividends and the removal of tax exemptions from technology firms. 

Stockbroker Sushil Choksey said: "The fall is a knee-jerk reaction of Indian markets, but we must remember the finance minister has not derailed business momentum." 

"This is a short-term view taken by investors and I expect this fall to taper off in a day or two." 

*Overheat *

Mr Balasubramaniam said the budget was broadly "growth-oriented", with focus on agriculture and education. 

Finance Minister Mr Chidambaram said spending on education would be increased by 34.2% in the coming fiscal year, while health and family welfare spending would rise by 21.9%. 

Other aspects of the budget included increasing defence spending by some 7.8% to March 2008, as India strives to update its military capabilities. 

Mr Chidambaram said the defence budget had risen to 960 billion rupees ($21.8 billion) from 890 billion a year before. 

Other figures released on Wednesday showed the manufacturing sector at a rate of 10.7% in the quarter, although farming expanded by a lower-than-expected 1.5% because of crop shortages. 

Analysts have raised concerns that India's economy could overheat, with growth running at about 9%. 

http://news.bbc.co.uk/2/hi/business/6403139.stm


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## Neo

Wednesday, 28 February 2007 

*India's 'left-of-centre' budget * 

By Paranjoy Guha Thakurta 
India economic analyst 

The government says it wants to help the under-privileged. 

India's Finance Minister Palaniappan Chidambaram - who has a reputation for favouring market-friendly economic policies - presented a distinctly left-of-centre federal budget on Wednesday. 

It was in keeping with the ideological inclinations of the ruling United Progressive Alliance (UPA) government that is crucially dependent on support from its communist allies. 

At a time when the economy of the world's second most populous nation is growing at about 9% a year for the second year in succession, Mr Chidambaram's budget upped government expenditure on agriculture, rural development, irrigation, education, health-care and road construction. 

This was as he raised taxes on the corporate sector, helping bring stock market indices downwards. 

*High prices *

While India's Gross Domestic Product (GDP) has grown by an average of 8% every year over the past four years - the first time in the country's 60-year history - the economy has also shown signs of overheating in recent months. 

A third of Indians live below the poverty line 

Wholesale prices went up by nearly 7%, and consumer price inflation is at a rate that is roughly two percentage points higher. 

Until August, inflation in India was driven by high prices of petroleum products. 

Over the past three months, however, the higher rate of inflation is largely due to a sharp jump in food prices, in particular the prices of wheat, vegetables, fruit and milk. 

That has resulted in the government being attacked not only by the right-wing Hindu nationalist Bharatiya Janata Party opposition, but also by its supporters on the left. 

High food prices quickly translate into popular discontentment. 

*'Anti-inflationary' *

On Tuesday the Congress party - which leads the UPA coalition - lost local elections in two northern Indian states, Punjab and Uttaranchal, where it had been in power. 

Since food comprises so a large a share of the total income of the poor, Finance Minister Chidambaram and Prime Minister Manmohan Singh have been sharply criticised, sometimes even by colleagues in the Congress party, for their inability to control prices. 

Indians face a wider services tax net 

Reacting to Mr Chidambaram's budget, Mr Singh described it as "anti-inflationary", voicing hopes that proposed reductions in customs and excise duties would reduce higher prices. 

Close to one-third of the Indian population, or about 300 million people, live below the internationally-accepted poverty line of $1 a day. 

Two-thirds earn daily incomes of $2 or less a day. One out of three Indians cannot read and write their own names and half the children who join primary school drop out. 

Mr Chidambaram has instituted new scholarship schemes to provide an incentive to secondary school students to remain in school. 

He has also increased expenditure on midday meal schemes for school-going children. 

More importantly, the finance minister has increased an across-the-board education tax from 2% to 3% to fund basic education and secondary and higher education. 

The extra money will help fund a plan to increase seats in educational institutions to admit students from "socially and educationally backward classes". 

*'Niggardly growth' *

This is part of the government's affirmative action policies, aimed at assisting the under-privileged castes in India's highly hierarchical society. 

The manufacturing and services sectors have grown by nearly 10% a year over the past three years. 

That is in contrast to the agriculture sector - which accounts for less than one-fifth of India's GDP but still provides a livelihood to 60% of the country's population. The agricultural sector has grown by a niggardly 2% a year. 

Mr Chidambaram is trying to control inflation 

The government has sought to deflect criticism that its policies were helping only the industrial and services sectors by targeting many budget proposals towards farmers. 

More crop loans will be provided, production of seeds will be stepped up, and a system for better water supply is planned as part of a wider irrigation programme. 

*'Impressive increase' *

The coverage of an ambitious rural employment guarantee scheme - described as the world's largest legally mandated social security programme - has been expanded from roughly one-third of the country's geographical area to more than half. 

Mr Chidambaram has earmarked higher outlays for welfare programmes, while reducing budgetary deficits because tax revenues have been unusually buoyant. 

Apart from excise collections - which have not grown fast - collections of customs duties, personal income taxes and taxes on corporate incomes have all increased impressively. 

The services tax net has been widened to include rent from commercial properties and asset management services. 

India's exports have been growing at a fast pace of 20% a year and the country's foreign trade is growing twice as fast as its GDP. 

Against this backdrop, Mr Chidambaram has brought down peak customs tariffs on non-agricultural imports from 12.5% to 10%, bringing these rates closer to the tariff levels prevailing in East Asian countries. 

http://news.bbc.co.uk/2/hi/south_asia/6403085.stm


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## Adux

In the Short term; Its a average budget
But in the Longterm it will have an impact. The corporates arent happy cuz they didnt get any new sops. Farmer Suicides, Education, Defence and Inflation is finally been looked up on in my stupid *** country


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## Contrarian

Its a WONDERFUL budget dude. Its high time we paid the due to the social and agricultural sectors of the nation. This budget will go a long way in that. India needed this.


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## Neo

Agree with Malay, the green sector's been overlooked for way too long and its time to make it up for the losses.

India basically is an agro-economy laboring alomost 60% of the workforce but it generates only one third of the GDP.

Your potentials are high and you have good amount of fertile soil and water, with good management you could become one of worlds largest food exporters.

Let this budget be the beginning of another Indian success stories...:toast:


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## Contrarian

I hope so, the corporates though mature, i feel still need some cushioning by the government. So the government cannot go completely overboard on social projects. A balance has to be maintained for the next 10 years more. Then more and more emphasis can be laid on the social sectors.


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## Neo

What you need is a good government sponsored farm credit management for small enterprises. 

High death rate among small famers is to be blamed to the traditional creditors who charge way too much and even a relatively small credit as low as $200. The farmer often loses his land, his house or evem his cattle, becomes desperate.

Your government announced $850 million farm credit package for 2007 last year. The problem is that the credit will only be provided to registered farmers whith a bank account.
Majority of the farmers doesn't do business with banks and go local and traditional money brokers and lenders.

This has to change.


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## Neo

Thursday, March 01, 2007 

*Poor question Ã¢â¬ËShining IndiaÃ¢â¬â¢ as budget eyes growth*

By Alistair Scrutton and Surojit Gupta 

The rural sector accounts for two-thirds of IndiaÃ¢â¬â¢s billion-plus population but is growing at less than one third of the pace of the overall economy

WEDGED in between a posh hotel, a modern highway and a booming technology corridor, this village of open sewers and sporadic power is at the front-end of a controversy about who benefits from economic growth in India. 

Ã¢â¬ÅItÃ¢â¬â¢s good our country progresses,Ã¢â¬Â said Raj Singh, a 41-year-old cook, as he walked through dirt streets in the lower caste district of Kalwari, about 55 km from New Delhi. 

Ã¢â¬ÅBut that development should happen in my village. Here the poor are getting poorer. We are forgotten. Nobody comes here.Ã¢â¬Â 

IndiaÃ¢â¬â¢s Congress-led government presents its annual budget on Wednesday, promising more of the breakneck growth that has seen gleaming high-rises spring up in booming cities across India where millions are employed in services like call centres. 

But behind the headlines of Ã¢â¬ÅShining IndiaÃ¢â¬Â are worries that growth is failing to trickle down to the poor and the communist-backed government is concerned that a by-product of the boom - a rising inflation rate - is making many people poorer. 

Ã¢â¬ÅItÃ¢â¬â¢s rather like if the US government focused its growth strategy on making New York brokers wealthier,Ã¢â¬Â said D.K. Joshi, principal economist at domestic credit rating agency CRISIL. 

Ã¢â¬ÅThere are millions in call centres that benefit from growth. But IndiaÃ¢â¬â¢s population is massive and a huge chunk of the population is not benefiting,Ã¢â¬Â said Joshi. 

The rural sector, for example, accounts for two-thirds of IndiaÃ¢â¬â¢s billion-plus population but is growing at less than one third of the pace of the overall economy. 

A tale of two regions: Outside Kalwari, men sat by a main road. Some picked up rubbish scraps. They supplemented their meagres incomes, they said, by occasionally being picked up in a lorry to attend political rallies in Delhi. 

Kalwari is a bus ride away from Gurgaon, a town of call centres, new suburbs and one of the largest McDonaldÃ¢â¬â¢s in India. But few farmers thought they, or their children, would ever find work there. 

Ã¢â¬ÅWe are uneducated, unskilled people. Who will take us?Ã¢â¬Â said Balvan Yadav, a 32-year-old farmer. 

On the opening of the budget session, President A.P.J Abdul Kalam told parliament the centre-left government was committed to Ã¢â¬Åinclusive developmentÃ¢â¬Â. 

It has introduced measures to help IndiaÃ¢â¬â¢s 260 million poor, from programmes that guarantee jobs for rural poor to food subsidies. But many of the funds do not reach their target through poor implementation or corruption. 

Raj SinghÃ¢â¬â¢s hut has no electricity nor running water. Children play near stinking gutters. The caste divisions of a village so close to the capital also underscores how obstacles to modernisation in India are hard to overcome. 

Singh has two children. One, a girl, was married off at 15. His other child, a boy, goes to school, Ã¢â¬Åif the teachers turn upÃ¢â¬Â and otherwise works to supplement SinghÃ¢â¬â¢s 2,000 rupees ($44) a month income by helping out in the fields. 

India has higher levels of malnourished children than Sub-Saharan Africa, according to a recent survey backed by the UN ChildrenÃ¢â¬â¢s Fund (UNICEF), and some key health indicators have hardly budged despite the boom. 

The city-rural divide has widened in India and was reflected in a 2004 election when millions of rural poor voted against the free market reforms of the ruling Bharatiya Janata Party. 

This year, reforms from the Congress-led coalition like special economic zones to encourage industrial development have been suspended due to a backlash from farmers. 

And on Tuesday, the Congress party was ousted from power in the states of Punjab and Uttarakhand in elections reflecting voter anger over inflation and economic reforms. Ã¢â¬ÅThe question now is not growth, but the nature of the growth. Who will benefit?,Ã¢â¬Â said Joshi. 

http://www.dailytimes.com.pk/default.asp?page=2007\03\01\story_1-3-2007_pg4_22


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## Neo

*India May Seek to Spend on Ports, Cut Tariffs to Slow Inflation*

By Cherian Thomas

Feb. 27 (Bloomberg) -- India's government may spend as much as 60 percent more on ports, power plants and roads in its next budget, allowing companies to cut costs and help damp the fastest inflation in two years.

Finance Minister Palaniappan Chidambaram will also probably cut import tariffs to make products cheaper in the budget for the year starting April 1 in New Delhi tomorrow. Chidambaram presented his first budget in 1996, when India's economy was half its current $854 billion size.

Prime Minister Manmohan Singh, facing political pressure over rising prices that are eroding the spending power of India's poor, last week asked state chief ministers for their help to curb inflation. Improved infrastructure may encourage more companies to follow in the footsteps of Nissan Motor Co. and Renault SA, which are investing in factories in the world's second-fastest growing major economy.

"If the government gets it right on inflation, the country can look forward to sustained high growth,'' said Robert Prior- Wandesforde, an economist at HSBC Holdings Plc in Singapore. "Removing infrastructure bottlenecks should improve the productive potential of the economy, so that it can sustain demand growth without running into inflationary difficulties.''

India's benchmark inflation rate climbed to 6.73 percent this month as record economic growth boosts demand for farm and factory products. Gains in consumer prices paid by farmers are at an eight-year high of 8.94 percent, while price increases for urban dwellers are the most in six years.

Cars, Houses

The fastest loan growth since 1971 and higher salaries are enabling Indians to buy products from cars to houses, stretching the capacity of Steel Authority of India Ltd. and other companies. The central bank, which has raised its key overnight lending rate five times in the past year, has warned areas such as housing are showing signs of overheating. Chidambaram may also prune tax exemptions on home loans to slow mortgages.

India, Asia's fourth-biggest economy, may grow 9.3 percent in the quarter ended Dec. 31 from 9.2 percent in the previous quarter, according to a Bloomberg News survey. The government expects a record 9.2 percent expansion in the year to March 31, the fastest pace after China among the world's major economies.

"Inflation control is on top of the agenda of the government,'' said Venugopal Dhoot, president of India's Associated Chambers of Commerce and Industry, or Assocham. "The government will cut customs duty further to check inflation and to meet its commitment to cut the tariff to Asean levels.''

Consumer affordability has increased demand for food products such as wheat, sugar and cooking oil. India, the world's second-biggest wheat grower, last year became an importer of the grain for the first time in seven years. It also banned export of wheat and pulses to augment supplies.

Import Duties

Chidambaram on Jan. 22 unexpectedly cut import duties on a range of products from steel to sulphur to palm oil, a month ahead of the scheduled announcement in the budget, to rein in prices. Five out of six traders and importers surveyed by Bloomberg News on Feb. 22 expects India, the world's second- biggest buyer of vegetable oil, to further cut duty on palm oil.

Since 2001, the government has more than halved the maximum customs rate for manufactured goods to 12.5 percent, to align the levy with the Association of Southeast Asian Nations such as Singapore where the tariff ranges between zero and five percent. Assocham's Dhoot expects India's peak customs rate to be cut to 10 percent.

Prime Minister Singh's Congress party faces seven state elections this year, the most important being in April in the northern province of Uttar Pradesh, which sends a seventh of all lawmakers to parliament. The election outcome in Uttar Pradesh will set the tone for the next general elections in two years.

Power Plants

India's infrastructure deficiency adds to the cost of companies operating in India.

Honda, Japan's No. 3 carmaker, has its own power plant because government supplies account for only a quarter of its needs. Ford Motor Co., which has a factory in southern India, requires its engine supplier in central India to fit delivery trucks with global positioning system devices so it can locate vehicles stuck in traffic and adjust production schedules.

India produces about 8 percent less electricity than it needs, cutting gross domestic product by a 10th, the finance ministry estimates. Highways, which move almost 80 percent of the goods transported in India, account for only about 2 percent of the country's roads. It takes an average 85 hours to unload and reload a ship at India's major ports, 10 times longer than in Hong Kong or Singapore, according to government figures.

"The government has enough money this year to meet its budget deficit target and allocate more for infrastructure,'' said Saumitra Chaudhuri, chief economist at rating company ICRA Ltd. "Tax revenue has been buoyant because of rapid growth.''

Budget Deficit

Chidambaram had planned to narrow the budget deficit to 3.8 percent of gross domestic product in the year ending March 31, from 4.1 percent of GDP in the previous year, after providing eight percent of the 5.63 trillion rupee budget on food and fertilizer subsidies, 13 percent on defense, 21 percent on interest payments and another 29 percent to states' exchequer.

The government may not have to increase bond sales next year as increases in tax revenue will cover expenses such as on roads and defense. Chidambaram may announce bond sales of 1.52 trillion rupees ($34.4 billion) in the year starting April 1, the same level as last year, according to the median estimate of seven traders surveyed by Bloomberg News on Feb. 23.

Tax collections have risen 38 percent in the nine months ended Dec. 31 compared with a target of 15 percent. India, which spends a seventh of China's $150 billion investment in public works each year, wants to team up with non-state and foreign companies to invest as much as $65 billion in infrastructure each year until 2012.

Credit Rating

Improving government finances prompted Standard & Poor's last month to raise India's debt rating to investment grade for the first time in 14 years. Moody's Investors Service raised its rating to investment grade in January 2004.

S&P said another rating upgrade would depend on further reductions in the budget deficit. India is bound by a law to cut the budget deficit by 0.3 percent of GDP each year, and to eliminate its revenue deficit by 2009, borrowing only to fund investments thereafter.

JPMorgan Chase & Co. economist Rajeev Malik expects Chidambaram to maintain existing corporate and personal income tax rates and get rid of the 10 percent corporate surcharge. Domestic companies pay a 30 percent tax rate, and an additional levy of 10 percent on it to fund the government's education and other programs. Foreign companies in India pay a tax of 40 percent and a 2.5 percent surcharge on it.

"A critical feature of future fiscal reforms will be the pace at which the government eliminates tax exemptions -- in the form of subsidies and concessions,'' said Malik.

Tax exemptions to companies and individuals in the year ended March 31, 2005, cost the government 1.58 trillion rupees, equivalent to 52 percent of the total tax revenue collected that year, Malik said.

http://www.bloomberg.com/apps/news?pid=20601080&sid=aSHzKrTpGl1Y&refer=asia


----------



## Neo

*Indian minister urges government to spend on agriculture and education*
By Anand Giridharadas and Amelia Gentleman
Published: February 28, 2007

MUMBAI: Buoyed by a strong economy, the finance minister of India on Wednesday called for billions of dollars in investment in agriculture and education as a way to more evenly spread the benefits of growth.

In an annual budget address, Finance Minister Palaniappan Chidambaram proposed billions of dollars in spending to enrich the ailing rural economy and to open access to quality education, a dearth of which has hindered the thriving outsourcing industry in India.

Answering calls for greater investment by Indian outsourcers and multinationals like Microsoft that have vast operations here, Chidambaram proposed to raise central government spending on education by 34 percent, to $7.3 billion, including a doubling of outlays on secondary education. He proposed increasing health care spending by 22 percent, to $3.4 billion, and to inject an extra $1.3 billion into Bharat Nirman, an effort to build rural infrastructure like roads and telephone lines.

"Education and health care are the prime imperatives as far as this budget is concerned," the prime minister, Manmohan Singh, said after the speech.

By focusing on the grinding poverty in India, the budget proposal suggested that the government, led by the Congress Party, was already turning its eye toward the 2009 general election, said Kuldip Nayar, a veteran political commentator in Delhi. That emphasis appeared to come at the expense of some of the business-friendly measures for which industry had hoped.

A widely expected corporate tax cut was not part of the package, which included new taxes on dividend payments, office rentals and the profit of information technology firms.

Infosys, the Indian software giant, immediately said that its margins would fall by 1.5 percent under the proposal.

"The finance minister is making a simple statement: 'I'm happy companies are making money, but give me more of that,'" Uday Kotak, the vice chairman and managing director of Kotak Mahindra Bank, one of the largest Indian financial houses, said during a televised discussion by business leaders.

The Sensex, the benchmark index of the Bombay Stock Exchange, which had fallen about 300 points before the speech as part of the worldwide stock- market tumble, plunged an additional 240 points, closing at 12,938.09, down 4 percent from the start of trading.

Some investors and economists interpreted the emphasis on poverty as a signal that economic liberalization was sliding further down the priority list.

Ifzal Ali, the chief economist of the Asian Development Bank in Manila and a vocal champion of anti-poverty efforts, was nevertheless gloomy about what he said was the lack of measures to sustain high growth rates.

"A disappointing feature of the budget speech is the omission of reforms for labor markets, privatization, financial sector, foreign direct investment caps, etc., which are critically needed to improve the business and investment climate," Ali said in an e-mail message after the speech. "Have reforms gone into a deep slumber?"

Chidambaram used the speech to propose a multifront attack on inflation, which has crept above 6 percent. Declaring inflation to be a grave threat to the average Indian, the government has recently lifted short-term interest rates, tightened the money supply and curbed duties on essential commodities.

The finance minister announced a handful of additional tax cuts Wednesday intended to further dampen inflation, including the reduction of peak import tariffs on nonagricultural goods to 10 percent from 12.5 percent. The government also announced a ban on new futures contracts for wheat and rice on commodities exchanges, fearing that speculative investing is helping to inflate prices.

But a thrust of the Chidambaram speech was on the need to curb inflation by addressing the bane of the Indian economy: 115 million farming families, dispersed among more than 600,000 villages, whom growth has left behind. They are unable to increase their yields at the pace at which urban consumption is growing, causing prices to rise.

The farm sector, which employs two- thirds of the country but accounts for just one-fifth of the economy, has grown at slightly more than 2 percent a year for the past several years.

That is a far cry from the 9.2 percent growth projected for the broader economy in the fiscal year ending March 31.

"Everything else can wait, but not agriculture," Chidambaram said, quoting the first Indian prime minister, Jawaharlal Nehru.

Chidambaram proposed to increase bank credit to induct five million more farmers into the formal banking system, and away from the murky world of moneylenders.

He proposed to extend death and disability insurance to eight million families of landless villagers.

Chidambaram was at pains to emphasize the government commitment to its vision of "inclusive growth," especially given election defeats Tuesday in two northern states Ã¢â¬â defeats which the prime minister conceded were linked to anger about high prices.

Chidambaram devoted the first 40 minutes of his 90-minute speech to outlining how his government proposed to expand opportunity.

He introduced plans for more and better training in vocational and technical institutes, along with plans to build 500,000 more classrooms and employ another 200,000 teachers.

A proposed scholarship program would pay for 100,000 students to continue their education beyond the age of 11, to curb the high rate of dropouts.

But criticism emerged instantly from business groups which said that the budget focused too heavily on the poor Ã¢â¬â and from left-of-center economists who said it was not pro-poor enough.

Jayati Ghosh, an economist at Jawaharlal Nehru University in Delhi, said too little money would go to health care, the reversal of food price increases and new employment plans.

"This was a historic opportunity," she said. "Tax revenues are up, the economy is buoyant. There was a real chance to allocate money to these critical areas. That opportunity wasn't taken."

http://www.iht.com/articles/2007/02/28/business/india.php


----------



## Neo

*'Help us to build rural India'*

Thursday, March 01, 2007

NEW DELHI, MARCH 1: Finance Minister P Chidambaram asked industry leaders to join hands with the government in putting agriculture and rural economy on a high growth path, which is also the main focus of Budget 2007-08.

"Just imagine what can happen to industry and services if agriculture grows at 4 per cent. It is in your interest that agriculture must grow at 4 per cent," Chidambaram said at a post-budget interaction with the industry.

If the purchasing power of rural India is at par with urban India, it would lead to a manifold increase in demand for goods and services, he said, adding the government would facilitate growth in agriculture through budgetary support for farm credit, fertiliser, irrigation and certified seeds.

He lamented that wheat production had been stagnant at around 69-72 MT, rice 90-94 MT and pulses 11-14 MT over the past few years, even as rise in population and per capita income had changed consumption patterns in the country.

Pointing out to the contrast between a prosperous and poor India, he said: "We can't delude ourselves that we will live a particular style of life, while they continue to languish in poverty".

He said the industry and services should welcome the focus given to agriculture and rural economy, which would create additional demand for their goods like refrigerators, two-wheelers and TV sets.

The government is also focusing on sectors like small cars, textile, leather and footwear, gems, jewellery and pharmaceuticals to make the industry competitive in these areas globally.

http://www.financialexpress.com/latest_full_story.php?content_id=156430


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## Janbaz

*India&#8217;s two state airlines to merge *

NEW DELHI: India&#8217;s two state-owned airlines will merge within four months in a bid to create a world-class airline that can compete globally, the government announced on Friday.

&#8220;One company with one name, one brand, one logo, one code and a single (set of) financial is expected to be in place within the coming 16 weeks,&#8221; Aviation Minister Praful Patel told parliament.

However, the technical and procedural formalities for merging international flag carrier Air India and domestic airline Indian Airlines will take about two years, he said.

&#8220;It is our objective to create a world-class airline,&#8221; he said, promising that the transition to a merged airline would not lead to job cuts.

&#8220;It is estimated that this decision would result in net benefit of six billion rupees ($136 million) at the end of the third year of the merger,&#8221; he added.

The announcement came after the cabinet earlier this week cleared the merger plans which analysts see as a way for the two airlines to take on new competition in the burgeoning deregulated aviation market.

Air India operates on international routes, while Indian Airlines flies mostly to domestic destinations and some neighbouring countries.

The new airline, which will have 111 planes on order, would be comparable to any other major airline &#8220;at least in this region,&#8221; Patel said.

It will have an existing fleet of about 112 aircraft, Patel said, adding it would &#8220;set fresh benchmarks for efficiency and reliability, thus benefiting the civil aviation sector in the country, especially the travelling public.&#8221;

The government&#8217;s aim was to create a &#8220;strong national carrier&#8221; that can counter competition from rivals.

Seven new carriers have sprung up in the past four years in India&#8217;s liberalised skies, once dominated by the state-run airlines, and another five have applied to take off.

Airline promoters have been lured by an increasingly affluent middle class in the country of over one billion people.

The two state carriers were sheltered until the early 1990s by a protected market. But after deregulation the airlines carriers have been under pressure from international and new domestic carriers.

The newer airlines boast modern fleets and have started flights to smaller Indian cities, as well as to overseas destinations like London and Southeast Asian cities, to grab market share.

Air India last year ordered 68 Boeing planes to update its ageing fleet. Indian Airlines, the second largest domestic airline after Jet Airways, is purchasing 43 aircraft from Airbus.

The planes are to be delivered over the next three to five years.

Indian media reports have said the government plans an initial public offering of shares in the new merged entity.

The merger is just one of the expected moves toward consolidation in the crowded Indian aviation sector 

The News.
http://thenews.jang.com.pk/daily_detail.asp?id=45243


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## Janbaz

*BG India consortium finds more oil *

NEW DELHI: BG India and consortium partners, Oil and Natural Gas Corp and Reliance Industries Ltd, have found more oil in a field off Gujarat, a newspaper reported on Saturday. 

The Economic Times newspaper said the consortium, operating the Panna/Mukta and Tapti fields off the coast of western Gujarat state, had found more oil in the block, which is already producing 45,000 barrels a day. 

BG India is the local arm of Britain&#8217;s BG &#8220;Prospects looked very encouraging, but we cannot disclose any other detail before the same is approved by the DHG (Director General of Hydrocarbons),&#8221; the paper quoted an unnamed BG executive as saying. 

BG India officials declined comment when contacted by Reuters. But the paper quoted Director General of Hydrocarbons V K Sibal as saying: &#8220;There is some discovery in a satellite field for which appraisal would be undertaken.&#8221; The paper said industry sources estimated the discovery at about 30 million barrels. 

The News.
http://thenews.jang.com.pk/daily_detail.asp?id=45370


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## Contrarian

*Budget googly likely to stump developers*

MUMBAI: A small clarification to the definition of a 'developer' of infrastructure projects, industrial parks and SEZ made in the 2007-08 budget threatens to pull the rug from under the feet of infrastructure companies taking sub-contracting work.

The explanation which redefines a 'developer'from April 1, 2000, says that infrastructure companies taking on sub-contracting work will not be entitled to the ten-year tax benefit under section 80-IA of the Income-Tax Act.

"The legislative intent behind insertion of the explanation appears to deny the tax benefit to a sub-contractor who is entering into an agreement with the main developer of the project," said Pinakin D Desai, a Mumbai-based Chartered Accountant.

The change is likely to impact firms like IVRCL, Nagarjuna Constructions, Patel Engineering, L&T and HCC, which undertake sub-contracted work.

Companies that have not made adequate provisions in past years will take a bigger hit because the change is with retrospective effect from 1999-2000, which means they will have to cough up tax for the past six-seven years.

Under section 80-IA of the I-T Act, a developer who is engaged in development of infrastructure facilities, gets tax relief.

The benefit was introduced to encourage construction of infrastructure such as highways, ports and rail transport systems.

"The purpose of the benefit has been for encouraging private sector participation by way of investment in development of infrastructure sector and not for persons who merely execute civil construction work or any other works contract," says the budget.

Tax experts point out that this explanation to the definition of the 'developer'would have been prompted by several decisions before the tax tribunals, including a recent one on Patel Engineering wherein the company was granted tax benefit even though it was a sub-contractor.

Basically, the Income Tax Appellate Tribunal took the view that the company should be given the benefits as it contributed to the infrastructure project right from the conception stage to the final execution. The finance ministry thought that it was a loophole that needed to be plugged.


----------



## Contrarian

*PC hints more steps to curb inflation*

NEW DELHI: Finance Minister P Chidambaram expects interest rates to moderate once the current inflation level declines and made it clear on Saturday that the government was ready to take further fiscal, monetary and supply side steps to curb inflation.

"Interest rate is a function of the monetary policy adopted by the RBI. When there is tightening of the monetary policy interest rates will also go up," he said in an interview.

In the last one year the Cash Reserve Ratio (CRR) and Repo rate have been revised four times in order to tighten the monetary policy, Chidambaram said. "Once inflation moderates and the RBI adopts a more accommodative policy, the interest rates will also decline. Interest rate is directly linked to inflation."

Asked if inflation was a matter of concern, he said "it is. If inflation is a matter of concern, high interest rates is also a matter of concern. If inflation moderates, high interest rates will also moderate." he added.

Asked what steps were being taken to carry out an assault on the price situation, the minister said the government has taken a number of steps on fiscal, monetary and supply side to manage it. "We will always be ready to take further fiscal, monetary and supply side steps as and when they become necessary," he said.

When suggested that the finance minister has to bear the brunt of attack politically and otherwise when prices rise, Chidambaram said prices are declining and some more prices will decline once the supply-side management is done.

However, in the long run, he said, various measures undertaken for the agriculture sector would result in ensuring higher production of wheat, rice and other cereals that will lead to improved price situation.


----------



## Contrarian

*Germany okays Suzlon's bid*

MUMBAI: The German Federal Financial Supervisory Authority (BaFin) has approved Indian wind energy major Suzlon's bid to acquire Hamburg-based REpower Systems AG lock stock and barrel for Euro 1.02 billion at Euro 126 a share.

The all-cash offer is made through Suzlon's overseas company christened Suzlon Windenergie GmbH, incorporated in Germany. Last month Pune-based Suzlon, promoted by Tulsi Tanti, along with Martifer, which owns 25.4&#37; stake in RE Power, has made an offer to acquire the offshore turbine maker. Suzlon will own 75% and remainder by Martifer.

REpower shareholders can now offer their shares to Suzlon Windenergie till April 20, the last day for the offer which will also become the last day for the Areva Group to revise their offer for REpower. Areva had on February 5 offered to acquire REpower. Even as analysts are expecting Areva to make a counter bid, Tanti exhudes confidence of clinching the deal with a 20% higher offer than Areva.

Suzlon, one of the pioneers of wind power in India, had been quietly acquiring various verticals of its business overseas to tap the growing wind energy market. Last year the company acquired Hansen Technologies, which makes turbines, in Europe.

In developed markets, countries have taken a conscious decision to reduce the dependence on fossil fuels to generate energy to lessen the carbon dioxide emissions.
-------------------------
W00t, go India


----------



## Contrarian

* Essar eyes 20&#37; stake in Libyan field*

NEW DELHI: The Ruias-controlled Essar group is eyeing a 20% stake in an oil- and gas-bearing field in Libya. If the deal goes through, it will be the third overseas oilfield equity for the company, which is running a 10.5 million tonne greenfield refinery at Vadinar in Gujarat.

"We are talking to Phoenix Libya, a subsidiary of Phoenix AG, for a minimum of 20% stake with rights to increase it to 50%," Essar exploration head S R Agrawal said on Friday.

Essar has stakes in three oil and gas exploration blocks in Madagascar and two in Myanmar and is scouting for opportunities in 12 countries in the Middle-East, Central Asia, South-East Asia and Africa. The company plans to bid for oil and gas blocks in Iran, Papua New Guinea and Libya to expand its overseas portfolio.

Agrawal said the deal for taking stake in proven oil and gas blocks of NC 100 and NC 101 in Libya is likely to be completed by the year-end. Essar plans to produce 150,000 barrels of oil a day from its domestic and overseas fields in the next three years. "We are looking for a presence in Middle East, Central Asia, Africa and the Philippines," he said.

Iran, Agrawal said, has put 17 blocks for bidding and Essar would submit a bid for at least a couple of them by the due date in June. Essar is also aiming to become a major player in the international drilling business. Its subsidiary Essar Oilfields Services Ltd already owns one semi-submersible and eight land rigs.


----------



## Contrarian

*Jindal to set up $2.1b steel plant in Bolivia*

NEW DELHI: After LN Mittal and Tatas, it's now turn of Jindals to get agreesive in the global steel sector. Jindal Steel and Power Ltd (JSPL), a part of Rs 20,000 crore Jindal Organisation, managed by Navin Jindal, will invest $2.1 billion to set up a 1.7 million tonne integrated steel plant in Bolivia, to produce long products, a 6 million tonne direct reduced iron plant to make sponge iron and a pellet plant.

Towards this end, JSPL has acquired 50&#37; of the 40 billion tonne medium grade iron ores reserve at EL Mutun, world's largest, after inking a deal with Bolivian government. In June 2006, JSPL emerged as winner to exploit the El Mutun reserve. In the last 8 months, JSPL was engaged in negotiation on other clauses, like availability of natural gas at concessional rate.

Finance director of JSPL Sushil Maroo said the entire investment will take place in eight years. He said once the definitive contact is signed and ratified by the Bolivian parliament, the work will start. He added that there would not be any problem in arranging fund. The share price of the company on Friday, however, fell by Rs 8 to Rs 2,343. But, the fall could be also because general bearish sentiment in the market as sensex fell by over 2% (273 points) on Friday.

Bolivian president Evo Morales and Jindal's chief executive Vikrant Gujaral made an announcement to this effect in Bolivia on Friday. Both parties signed preliminary agreements on the tax rate and natural gas prices for the iron and steel project on Friday. They will sign a definitive contract to implement the project within 45 days.

El Mutun has the world's biggest iron-ore reserves of 40 billion tonnes of medium-grade quality.


----------



## Contrarian

*India, Nepal set to tap energy ventures*

KATHMANDU: Faced with growing demand for energy, neighbours India and Nepal are rushing to tap power ventures with a clutch of energy meets starting on Monday.

The Indian Ministry of External Affairs and federal energy ministry here are hosting a one-day meet in New Delhi Monday to discuss cooperation in the energy sector with the seven members of the South Asian Association for Regional Cooperation (SAARC).

The meet will focus on promoting energy resources renewal, extension of gas pipelines, simplifying energy standards and promoting hydro-power ventures.

On Wednesday, SAARC energy and water resources ministers will meet in the Indian capital for another round of discussions.

Also during the week, the Confederation of Indian Industry (CII) as well as US aid wing USAID will host an energy meet in New Delhi. From Tuesday, Kathmandu too is hosting a two-day seminar on investment in the hydropower sector.

Organised by Nepal National Committee of International Association on Electricity Generation, Transmission and Distribution (Afro-Asian region) and Nepal Electricity Authority, the meet is sponsored by India's Jindal Power Ltd, that is bidding for several hydropower projects in Nepal.

Fourteen Indian companies are in the fray for nascent hydropower projects in Nepal.

On March 24, after the SAARC car rally has flagged off from Cox Bazar in Bangladesh and entered Nepal, the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) is organising a mini meet in Kathmandu on energy efficiency and clean development mechanism.

Currently Nepal, one of the richest countries in the world in terms of hydropower potential, is passing through an acute power crunch with the imposition of a seven-hour daily power cut in the capital.


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## Contrarian

*Pak delegation to visit J&K to discuss trade*

JAMMU: A business delegation from Pakistan-administered Kashmir will visit Jammu and Kashmir March 16 to discuss the possibilities of mutual trade - a sign of the increasing people-to-people contact between the divided parts of Kashmir.

The 26-member delegation of Azad Jammu and Kashmir Chamber of Commerce and Industry, led by its president Zulfiqar Abbasi, will be on a three-day visit here. The group were invited by the Jammu Chamber of Commerce and Industry (JCCI).

Ram Sahai, chairman of JCCI, said their trip would be a "big event in the ongoing process of people-to-people contact between the two countries and especially the people of Jammu and Kashmir".

Sahai said: "The delegation will discuss the prospects of mutual trade, transactions and communication between the two parts of the state to boost the economy."

This will pave the way for the start of trade between the two sides - a move that the governments of India and Pakistan have already agreed to. Two routes across the Line of Control (LoC) have been identified - the Srinagar-Muzzaffarabad road and the Poonch-Rawlakote road.

Pakistan Foreign Minister Khurshid Mehmood Kasuri had discussed the possibility of opening these routes for trade during his recent visit to India.

Chief Minister Ghulam Nabi Azad said he would extend all support to boost trade between the two sides.

"Ties between the two countries are improving. The visit of the delegation from Pakistan administered Kashmir would be a major milestone in our quest for mutual trade and building stakes in our economy."


----------



## Contrarian

*Big quest: Indian oil majors aim for Norway*

NEW DELHI: In the quest for energy security and to be relevant in the great hydrocarbons game, Indian exploration majors could be headed for Norway next. Oil ministry mandarins confirmed that Indian exploration majors have been asked to examine opportunities in the Scandinavian country.

Norwegian offshore exploration involving North Sea, Norwegian Sea and Barents Sea was the scene of heightened interest in the bidding round of pre-defined areas in 2006. Now the 2007 edition is up for grabs and the Government of India's diplomatic and petroleum ministry officials are sensing an opportunity.

"Our government wants to give the industry access to new prospective acreage," says Norwegian Minister for Petroleum and Energy Odd Roger Enoksen.

In the last round, 48 exploration licences were given for 85 offshore blocks. Out of that, 33 companies that were awarded, as many as eight were new to the country. The 2007 version announced last week includes 13 new blocks and the deadline for the same is Sep 28, 2007.

It is pertinent to mention that no Indian company has ever explored oil or gas in Norwegian offshore areas, but with both public and private sector now scouring the world for assets, there is great interest now.

The top brass of two state-run oil majors, ONGC Videsh - the overseas exploration arm of Oil and Natural Gas Corp - and Oil India Ltd have been asked to study and participate in Norway's awards in pre-defined areas (APA).

Late last month, the Norwegian cabinet cleared the APA 2006. There is large potential in proving new, smaller resources close to existing infrastructure in the mature areas of the North Sea, the Norwegian Sea and the Barents Sea, industry experts said.

The Norwegian government wants to develop Barents Sea as a petroleum province and prioritise an expansion in this Sea, they added.

It is believed that value creation is a central issue in the Norwegian oil and gas policy. Private sector Indian companies have evinced interest in bidding for these assets. This is a good example of the Indian government's calibrated plan to indulge in economic diplomacy to counter the overpowering presence of Chinese oil majors around the world.

The great oil hunt has seen China's economic and military diplomacy best the Indians time and again in Africa and Central Asia. India and China have been jousting over oil and gas assets all across the globe, with India more often than not finishing second best.

India has invested billions of dollars in acquiring oil and gas assets in diverse geographies like Russia (Sakhalin) to Sudan and Libya to Vietnam and even far away Ecuador, Venezuela and Cuba.

But ONGC Videsh, India's oil acquiring arm has been wrong-footed by Chinese majors like CNOOC and Sinopec. In Angola, for instance, China provided not just financial aid, but clinched the deal with a gargantuan military package even as OVL waited for cabinet approval.

Almost parallel, the petroleum ministry in conjunction with the Indian Trade Promotion Organisation has asked Indian exploration majors to participate in the India Show that begins in Sao Paulo, Brazil's commercial capital, on March 6 to showcase the capabilities of their companies in the petroleum sector.


----------



## Contrarian

*Govt's new plan to mint money*

NEW DELHI: High metal prices may end up generating a few extra bucks for the government mints.

With the value of metals exceeding the currency value in most coins, the government has decided to allow the mints to melt some of the coins &#8212; particularly the Rs 2 coins &#8212; and allow them to launch coins with cheaper metals.

So, the copper-nickel coins &#8212; made from an alloy of copper and nickel &#8212; will soon make way for ferro steel coins. And, the melted metals will be sold in phases, which officials said, will generate profits for the mints that were corporatised last year since the metal was bought years ago when international commodity prices were much lower than what they are at present.

With the value of the metal exceeding the value of the currency, a parallel market of sorts is in place where coins which are collected from the market are melted by illegal operators and the metal is sold. Officials said the initiative will not only put an end to such practices but also result in the entry of new metals, which was an important element of the currency management strategy.

For the mints, it isn't extra bucks from just the coins that are in circulation at present. Recently, the government allowed the mint in Kolkata to melt old silver coins (with denominations of four annas, eight annas and Re one) and sell the metal.

Officials said the sale deal has already been clinched and the last few consignments are on their way out, though they did not disclose how much additional revenue the mints managed to generate.

Profits from metals apart, the move also means that the mints would be able to use their idle capacity since the government has not been purchasing coins of late. "Over the last few years, there has been sufficient availability of coins so we bought coins only to keep the mints going," an official said.

But during the current financial year, the government will purchase coins worth Rs 100 crore, for which the finance minister made a provision in the revised estimates for 2006-07, and will follow it up with purchases worth another Rs 250 crore during 2007-08.


----------



## Contrarian

*India to pip US in cell subscribers*

NEW DELHI: Here's something to blow away India's Budget blues. After crossing the 200 million telephone subscriber mark, the telecom industry is hurtling towards another major milestone. The country is now set to pip Russia to boast of the third largest number of mobile subscribers in the world in March 2007.

And, toppling America's No 2 position is just another 20 months away.

Analysis by ToI reveals that at its current pace of growth, India is poised to have the second largest mobile subscriber base before the close of 2008, displacing US, which will cross the 250 million mark before December.

According to the present ranking, China (450 million) has the largest number of mobile subscribers, followed by US (235 million), Russia (154 million) and India (148 million). This is set to change.

This is the result of the progressive policies followed by the UPA government. "We hope to reach 250 million subscribers by year-end and 500 million by 2010," says telecom minister Dayanidhi Maran.

Propelled by aggressive growth rates, India is poised to cross the 160 million cellular mobile mark (CDMA and GSM) to surpass Russia this month. Till January 2007, Russia had a lead of about 6 million subscribers over India.

In March, China, which added an average of 5.5 million phones per month in the last six months, will cross 460 million mobiles, retaining its leadership. US, which added 1.9 million subscribers/month will touch 239 million subscribers, while Russia, which added 2.5 million subscribers/month will reach 159 million.

While India's absolute growth is mouthwatering, its mobile teledensity or mobile phones per 100 presents a somewhat different picture. By 2006-07, China will have 35&#37; mobile teledensity, US will touch 79%, Russia 112% (more than one mobile phone per person) and India 15% (one of every 7 Indians will own a mobile phone).

For investors, a low teledensity represents an opportunity for growth. Indias mobile telephony is expected to reach 500 million mark by 2010. The country has been blazing the telecom trail since 2004, will add more phones every month from 2008 than it did in the first 45 years since Independence &#8212; a statistic that stands tall in otherwise beleagured infrastructure reforms agenda.
-------------
Cheers man!


----------



## Contrarian

*Inflation eases to 6.05&#37; as fuels become cheaper*

NEW DELHI: Inflation eased to 6.05% during the week ended February 17, influenced by cheaper auto fuels, essential food products and some manufactured goods.

Though wholesale prices-based inflation moderated quite a bit during the week, it was still way above the 5.5% level desired by the Reserve Bank for this fiscal.

Inflation had stood at 6.63% for the previous week and just 4.13% in the year-ago period under review.

The first official data, released after presentation of the Budget in Parliament, comes as a respite to the government, whose annual financial bill focused mainly on containing the price line. However, impact of steps announced in the Budget to tame inflation can be known only in the coming weeks.

Inflation fell mainly due to cut in prices of petrol by Rs two a litre and diesel by Re one per litre on February 15. Its direct effect was evident as the category of fuel, power, light and lubricants has 14.23% weight in overall inflation index.

Among food products, vegetable, fruits, pulses, sugar, khandsari, 'gur', edible oils, egg, meat and fish declined.

Mineral oil among fuel items also fell, as did some manufactured items like zinc.

RBI had also announced measures to tighten money supply by increasing short term lending rate, repo and increasing
the requirement for banks to keep cash with it.


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## Contrarian

*US business mounts jumbo mission to India*

WASHINGTON: A jumbo-sized 38-company US business mission, including nuclear power firms, high technology contractors and equipment suppliers will visit India from March 5-9 to prepare a roadmap for "future engagement".

Led by the US-India Business Council (USIBC), comprising top 230 US companies with investment interests in India joined by a dozen top Indian global companies, the four-city visit marks the first anniversary of president George Bush's path-breaking trip to India.

USIBC "is pleased to accompany America's finest companies to India, where we can demonstrate our desire to participate in the India growth story across every sector. We are here to take stock of the progress made thus far and chalk the roadmap for our future engagement," Ron Somers, president of USIBC, said.

The mission will attend a US-India Economic Summit organised by CII in New Delhi Mar 6 to take stock of the progress achieved in the US-India Strategic Partnership over the last year and meet government leaders and captains of Indian Industry.

The nuclear power companies and high technology contractors will then peel off from the USIBC Executive Mission and head to Mumbai to meet with the Nuclear Power Corporation of India and the Indian private sector to discuss collaborations and opportunities in India's nuclear power industry.

Investing across all sectors of the Indian economy, the mission will also travel to Kolkata to meet West Bengal government and UPA coalition leadership Mar 7. This visit will mark USIBC's first foray into West Bengal in ten years. CII will organise a conference in Kolkata, highlighting the "View from the East: Opportunities and Promise."

The mission will travel to Chennai to meet Tamil Nadu government leaders and captains of south Indian industry to learn more about opportunities in India's infrastructure and manufacturing sector.

The USIBC mission will be co-led by General Dan Christman, and AMEX's Tom Schick, member of the USIBC's Executive Committee.

Companies that will be represented on the mission include Best Buy, Parsons Brinkerhoff, The Wire Group, Amex, AIG, Cargill, Max New York Life, Dow Chemicals, Exceed International, Lighthouse Funds, Emergent Biosolutions, The Chatterjee Group, eFunds, General Electric, Westinghouse, Edlow Corporation, US Enrichment Corporation, Bechtel, Cognizant, ITT and PSEG.

Formed in 1975, USIBC hosts Indian government officials and business leaders visiting US and conducts Executive Missions to India to discuss economic issues important to industry, and provides briefings to US government officials in support of the growing Indo-US strategic partnership.


----------



## Contrarian

*India sees highest salary rise in Asia-Pacific*

BANGALORE: Indian enterprises have increased salaries by an average of 14&#37; in 2006, the highest increase in the Asia Pacific region.

During the same period, companies in other key geographies like China and the Philippines increased salaries only by 8%, while in Korea it was 7%, says a Pan Asia survey on "Compensation Trends" conducted by Omam Consultants, a management consulting and staffing outfit. The salaries for management staff in India was up by an average of 16%, again much higher than that in other countries of the region.

Presenting the findings of the survey at a seminar on "Retention &#8212; Biggest Business Challenge", organised by Bangalore Chamber of Industry & Commerce (BCIC) here on Friday, Omam Consultants director Rajeeva Kumar said during the period, the banking sector accounted for the highest increase in variable pay at 24%, up from 13% in the previous year, followed by IT sector 18% (13%), manufacturing 16% (10%), FMCG 18% (14%).

"Variable pay factor was introduced in 1999-2000. In 2001, the average ratio between fixed and variable was 87:13, in 2006 it changed to 86:14. It seems to have sort of stabilised now," Kumar said.


----------



## Neo

*BG India consortium finds more oil *

NEW DELHI: BG India and consortium partners, Oil and Natural Gas Corp and Reliance Industries Ltd, have found more oil in a field off Gujarat, a newspaper reported on Saturday. 

The Economic Times newspaper said the consortium, operating the Panna/Mukta and Tapti fields off the coast of western Gujarat state, had found more oil in the block, which is already producing 45,000 barrels a day. 

BG India is the local arm of BritainÃ¢â¬â¢s BG Ã¢â¬ÅProspects looked very encouraging, but we cannot disclose any other detail before the same is approved by the DHG (Director General of Hydrocarbons),Ã¢â¬Â the paper quoted an unnamed BG executive as saying. 

BG India officials declined comment when contacted by Reuters. But the paper quoted Director General of Hydrocarbons V K Sibal as saying: Ã¢â¬ÅThere is some discovery in a satellite field for which appraisal would be undertaken.Ã¢â¬Â The paper said industry sources estimated the discovery at about 30 million barrels. 

http://www.thenews.com.pk/daily_detail.asp?id=45370


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## Neo

March 05, 2007 
*Economic reforms under cloud*

By Anand Kumar

GIVEN the fact that Indian Finance Minister P. Chidambaram was under intense pressure from various quarters Ã¢â¬â pro-reformers, status quoists, anti-liberalisers, industrialists and business groups, the Left parties, the Right supporters, etc Ã¢â¬â he did a rather excellent balancing act in his budget proposals, submitted to the Parliament last week.

Unfortunately for Chidambaram, budget-day was preceded by a rather harrowing experience for the Congress, which heads the United Progressive Alliance (UPA) government at the centre. The Congress lost elections in two north Indian states Ã¢â¬â Punjab and Uttarakhand (earlier known as Uttaranchal) Ã¢â¬â and many in the party and outside rushed to lay the blame on Chidambaram and his finance ministry.

It was argued that the party lost state elections because of inflation, triggered by the continuing emphasis on economic reforms, and the lack of public spending on projects meant for the welfare of the Ã¢â¬Ëaam aadmiÃ¢â¬â¢ (common man), a new clichÃÂ© that has been mauled ad nauseam by the Congress.

With elections to IndiaÃ¢â¬â¢s most important state Ã¢â¬â Uttar Pradesh Ã¢â¬â scheduled for next month, there was no possibility of Chidambaram pursuing further economic reforms. The UPA, it must be remembered, crucially depends on the support of the Left parties for survival; the government headed by Prime Minister Manmohan Singh Ã¢â¬â the other key reformer in the present dispensation Ã¢â¬â has very limited room for manoeuvring, as the Leftists are opposed to any further deepening of the reforms.-

And the old socialist warriors in the Congress, who have been opposed to the Singh-Chidambaram duo for many years, have suddenly become active, stonewalling several attempts by reformers in the government.

The finance minister is keen that Parliament, in the ongoing budget session, passes two important bills Ã¢â¬â the Insurance Laws (Amendment) Bill, raising foreign direct investment (FDI) in the sector to 49 per cent from 26; and the Pension Fund Regulatory and Development Authority bill, throwing open the sector to private and international (with a 26 per cent ceiling) players, and allowing funds to invest up to 50 per cent of their corpus in the stock markets.

It is doubtful whether Parliament would give its approval to these two crucial pieces of legislation in the ongoing session. But what is certain is that the anti-reformers in the Congress have stalled other important measures to liberalise the economy, including opening up the retail sector to FDI, encouraging the setting up of special economic zones (SEZs), allowing international universities to set up campuses in India, and rolling back steps such as allowing futures trading in some commodities.



*****


THE finance minister unveiled his budget with a regressive move to ban (hopefully, temporarily) futures trading in wheat and rice. An expert committee will study the impact of futures trading on essential commodities and give its report within two months, to enable the government to take a decision on the contentious issue.

Ironically, just a day earlier, the annual Economic Survey, presented to Parliament, had found nothing wrong with futures trading, and even Agriculture Minister Sharad Pawar had extended his full backing to it. Many farmers had also lent their support to futures trading, though middlemen and other intermediaries, who were worried about the steep fall in margins in spot trading, were not in favour of it.

The chairman of the Forward Markets Commission, S. Sundareshan, was also opposed to any moves to ban futures trading in commodities. But politically, it has become a hot potato, with many Congressmen of a vintage era, and strong votaries of a dirigiste regime, not yet reconciled to modern realities and the functioning of a market economy.

Futures trading in agricultural commodities is a relatively new concept in India that has proved to be extremely popular. The National Commodities and Derivatives Exchange Ã¢â¬â in which American finance major Goldman Sachs acquired a stake recently Ã¢â¬â accounts for 95 per cent of all wheat futures traded in India.

India, which is the second-largest producer of wheat and rice, began importing wheat last year to meet a shortfall in production. Electronic futures trading in commodities has brought about a great deal of transparency, and prevented the distortions of the earlier system. But the powerful lobby of traders and other intermediaries, who have lost significantly, have been opposed to this new platform.

In the past, hoarders have made a killing at times of commodity shortages and when prices soared. But with an institutionalised futures market Ã¢â¬â even the limited one in India, where international funds are not allowed to trade Ã¢â¬â the traditional traders have taken a beating.


*****


WITH a global rise in commodity prices, inflation has been a worrying factor in India. The Reserve Bank of India (RBI), the countryÃ¢â¬â¢s central bank, has been monitoring the price situation, and tweaking interest rates to curb inflation.

However, the Economic Survey that was presented last week was rather critical of the RBIÃ¢â¬â¢s monetary policy to contain inflation, which was leading to a hardening of interest rates. The survey said a balance needs to be struck between curbing inflation and maintaining a high pace of growth.

Inflation touched a two-year high of 6.73 per cent last month, while gross domestic product (GDP) growth slowed down to 8.6 per cent in the third quarter (ending December 31, 2006), as against 8.9 per cent and 9.2 per cent in the first and second quarters respectively of the current fiscal.

The agriculture sector continues to slow down the economy, and according to the latest figures released last week, expanded by a mere 1.5 per cent Ã¢â¬â as against 10.7 per cent by the manufacturing sector and 11.6 per cent by the financial services sector.

According to many Congressmen, one of the main factors leading to the partyÃ¢â¬â¢s defeat in Punjab and Uttarakhand was inflation. But Chidambaram has been defensive about the sensitive subject. He points out that there was a time Ã¢â¬â in the heydays of socialism in the 1970s Ã¢â¬â when the country was reconciled to inflation of 10 and 12 per cent; it had even touched the 22 per cent figure on a couple of occasions.

Growth, however, was at a sedate 3.5 per cent (Hindu rate of growth, as a prominent economist had once dubbed it). According to Chidambaram, these days (when growth has topped eight per cent for the last four years) the Ã¢â¬Ëtolerance levelÃ¢â¬â¢ for inflation is around five per cent.

But the recent high of 6.73 per cent is nothing exceptional. Just about three years ago, inflation hovered around the six to eight per cent mark. Even during the late 1990s, there were occasions when inflation peaked at eight per cent.

Chidambaram ensured that deficit targets were on track this year. The revenue deficit has been projected to decline to 1.5 per cent of GDP in financial year 2007-08, as against two per cent in the current fiscal (which ends on March 31).

The fiscal deficit is expected to come down to 3.3 per cent of GDP, from 3.7 per cent this year. The primary deficit (which excludes interest payments) is expected to show a positive of 0.2 per cent of GDP in the new financial year.

The worrying aspect in the budget proposals were the hefty increases in spending on some of the UPAÃ¢â¬â¢s pet projects. Total outlay on social sectors has been raised from Rs600 billion to over Rs800 billion. There is massive leakage in the implementation of many of these projects, and the actual beneficiaries fail to get the benefits meant for them.

http://www.dawn.com/2007/03/05/ebr10.htm


----------



## Janbaz

*HSBC enters IndiaÃ¢â¬â¢s insurance market *

BANGALORE: British banking giant HSBC Holdings on Monday tied up with Bangalore-based Canara Bank and another Indian lender to set up a life insurance business, entering a market fuelled by rising incomes and the absence of a social security system.

State-owned Canara will hold a 51 per cent stake in the venture, initially capitalised at two billion rupees ($45 million), with HSBC taking 26 per cent and New Delhi-based Oriental Bank of Commerce the rest, CanaraÃ¢â¬â¢s general manager S Jayararam told AFP.

HSBCÃ¢â¬â¢s insurance arm agreed to pay a premium of Rs1.25 billion for its stake, raising the net worth of the proposed insurer to Rs3.25 billion, under an agreement signed on Monday, Jayaraman said.

The announcement came as HSBC, the worldÃ¢â¬â¢s third-biggest bank, announced a 35.5-per cent surge in bad debts that dented net profit in 2006, which rose just 4.7 per cent to $15.789 billion year-on-year.

HSBC joins firms such as New York Life, Prudential and Allianz in setting up an insurance venture in India, where the market has doubled to more than $20 billion in annual premiums since opened to foreign investment in 2000.

Ã¢â¬ÅThe insurance penetration rate is still extremely low and thereÃ¢â¬â¢s a lot of scope for further expansion,Ã¢â¬Â said Jayaraman, adding the partners had yet to decide on details of the joint venture.

The venture would have the advantage of marketing to the tens of millions of existing customers the three partners already have in the country. India opened up the market to expand coverage and make more funds available for investment in infrastructure such as power plants and roads.

But only 2.5 per cent of the population has insurance coverage, said the Canara official. Ã¢â¬ÅThe market is untapped outside of the metros and smaller cities,Ã¢â¬Â said Sushmul Maheshwari, chief executive of RNCOS, a market research firm.

Ã¢â¬ÅThe awareness about insurance remains very low and outside of the cities people are not serious about getting insured,Ã¢â¬Â he said. Ã¢â¬ÅThat offers a huge opportunity for insurance companies.Ã¢â¬Â

The lack of a social security system, growing life spans in an economy expanding nine per cent a year, and a per capita income that has doubled in the past decade are spurring more urban Indians to buy life cover.

Insurers are also marketing insurance-linked annuities and pension plans that offer market-linked returns, attracting a growing number of consumers who are buying such products to finance a longer life in retirement.

Ã¢â¬ÅIf you go to a typical middle-class man and try to sell him insurance, he will likely say Ã¢â¬ËI am never going to die,Ã¢â¬â¢Ã¢â¬Â said Maheshwari. Ã¢â¬ÅHe may be interested if you sell it to him as a pension plan.Ã¢â¬Â

Insurance accounts for just 1.8 per cent of IndiaÃ¢â¬â¢s economic output, compared with 5.2 per cent in the United States and eight per cent in South Korea, according to the Associated Chambers of Commerce, an industry lobby group.

The group predicted in January that IndiaÃ¢â¬â¢s life- and non-life insurance market is set to reach a combined $60 billion in four years as demand swells in towns and villages. The so-called semi-urban and rural territories will make up for $35 billion and large cities generate $25 billion, it said.

HSBCÃ¢â¬â¢s 26 per cent stake is the maximum allowed by the regulator for a foreign insurance partner, with resistance from communist allies holding back government plans to raise the limit to 49 per cent. 

The News.
http://thenews.jang.com.pk/daily_detail.asp?id=45649


----------



## Janbaz

*S&P expects India&#8217;s growth to moderate *

MUMBAI: Standard and Poor&#8217;s Ratings Services said on Monday it expected the pace of India&#8217;s economic growth and inflation to moderate in the fiscal year beginning in April.

&#8220;Our projection for the year 2007-08 is 7.90 to 8.40 per cent &#8212; a slight slowdown from the current year&#8217;s performance due to the impact of interest rate increases and liquidity constraints,&#8221; Subir Gokarn, chief economist of S&P&#8217;s Indian subsidiary CRISIL, said in a conference call with journalists.

The government expects gross domestic product to grow 9.2 per cent in 2006-07, the fastest pace in 18 years, driven by expansion of manufacturing and services sectors. &#8220;Accompanying this, we would see a decline in the inflation rate from the current 6.0 per cent to 5.0-5.5 range,&#8221; Gokarn said.

India&#8217;s annual inflation declined to 6.05 per cent in the 12 months to Feb 17, from 6.63 per cent a week earlier. The government cut retail fuel prices last month, and has also lowered duties on a host of items to try to rein in inflation.

The Reserve Bank of India has raised the cash reserve ratio (CRR) &#8212; the percentage of cash banks need to keep with it on deposit &#8212; twice since early December to absorb excess funds in the banking system and help check inflation.

It has also raised its short-term lending rate four times in the fiscal year which ends this month. S&P did not anticipate any problems from India&#8217;s external accounts in 2007-08, Gokarn said.

&#8220;Capital inflows would take care of the current account deficit,&#8221; he said. In January, S&P raised India&#8217;s sovereign credit rating to investment grade, citing strong economic prospects and external balance sheet, deep capital market and an improving fiscal situation. The rating was raised to the lowest rung of investment grade at &#8220;BBB-/A-3&#8221; from a speculative grade &#8220;BB+/B.&#8221; 

The News.
http://thenews.jang.com.pk/daily_detail.asp?id=45650


----------



## Neo

Thursday, March 08, 2007 

*IndiaÃ¢â¬â¢s 2007/08 growth seen slowing to 8.5%: ICRA*

NEW DELHI: IndiaÃ¢â¬â¢s economic growth could slow to 8.5 percent in the fiscal year beginning in April, from an estimated 9.2 percent expansion this year, as tighter monetary policy starts to bite, rating agency ICRA said on Wednesday. 

Industrial production is expected to expand 9.8 percent in 2007/08, compared with 10 percent in the current year, while farm output growth could slow to 2 percent assuming normal rains from 2.7 percent, the Indian agency said in a report. 

Ã¢â¬ÅThe normal pace of monetary tightening through increase in policy interest rates coupled with raising cash reserve requirement should have an impact on demand that is homes, automobiles and other durable consumer goods,Ã¢â¬Â ICRA said. 

Ã¢â¬ÅThat should result in cooling down the pace of economic activity by denying monetary accommodation, aside from making it more expensive.Ã¢â¬Â IndiaÃ¢â¬â¢s central bank has raised its key short-term lending rate six times since early 2004 by a total of 1.5 percentage points. It has also increased the level of deposits that banks must keep with the central bank twice since December to fight inflation. 

Still, bank loans have continued to rise at about 30 percent a year and annual inflation is running at 6.05 percent, above the central bankÃ¢â¬â¢s estimate of 5-5.5 percent by end-March. Ã¢â¬ÅDuring 2007/08, monetary policy will continue to be biased towards tightness,Ã¢â¬Â ICRA said. 

Prospects of intensified conflict in the Persian Gulf has the potential of sending oil prices up and affect IndiaÃ¢â¬â¢s headline inflation in the coming fiscal year, it added. 

http://www.dailytimes.com.pk/default.asp?page=2007\03\08\story_8-3-2007_pg5_16


----------



## Neo

Thursday, March 08, 2007 

*India eyes bumper wheat output* :thumbsup:

NEW DELHI: India, forced to import wheat after a gap of six years in 2006 following a poor crop, expects a bumper output of around 74 million tonnes this year due to good weather conditions, government officials said on Wednesday. 

The forecast is at least one million tonnes more than previous estimates and sharply up from the 2006 output of 69.4 million tonnes. 

Wheat prices in India have shot up on a supply squeeze. Last week, the government banned futures trade on wheat and rice, after politicians blamed speculation for fuelling prices and adding to inflationary pressures. 

Ã¢â¬ÅProduction may reach 73.5 million tonnes on extremely good weather conditions,Ã¢â¬Â Farm Minister Sharad Pawar said on the sidelines of a food summit. 

He said there was major expansion in area under wheat in Punjab, Haryana, Uttar Pradesh, Gujarat and Madhya Pradesh. 

Ã¢â¬ÅUnlike last year when we had three to four weeks of bad weather in February conditions have been favourable this time.Ã¢â¬Â 

At a separate function, Food Secretary T Nanda Kumar said output was likely to be much higher than earlier estimates. 

Alok Sinha, managing director of Food Corp. of India, told Reuters the state-run grains agency expected good purchases from farmers, based on a wheat crop estimate of 74 million tonnes. 

Sinha said the agency expected to procure about 13 million tonnes of wheat from farmers this year to augment government stocks and meet demand for welfare schemes. 

India was forced to contract for imports of 5.5 million tonnes of wheat at high costs after procurement in 2006 fell sharply to 9.2 million tonnes against a target of 16 million. 

Ã¢â¬ÅAs of April 1, we are expecting stocks of 4.5 million tonnes, against 2.0 million tonnes last April, Sinha said. Procurement starts in April and lasts for more than a month. Ã¢â¬ÅOur target is 12 million tonnes stocks for FCI, but we are likely to cross 17 million tonnes by May,Ã¢â¬Â he said. 

Bulk purchases from farmers at higher prices by private players were blamed for low government procurement in 2006. 

Pawar denied media reports the government has asked private players not to procure wheat from the main growing regions this year. 

Ã¢â¬ÅIn a democracy no one can be prevented,Ã¢â¬Â he said. Ã¢â¬ÅThere is no possibility of preventing private players from procuring wheat.Ã¢â¬Â 

Kumar said actual imports may be about 40,000-50,000 tonnes less than the contracted 5.5 million tonnes. Most of the wheat from Australia and other destinations have already arrived at Indian ports. 

Ã¢â¬ÅThere is a clause in the import contracts that it could be a little less or more,Ã¢â¬Â Kumar said. 

He said the government would look at removing regulations, like imposition of stock limits on wheat, if it was able to manage things comfortably this year. Both Pawar and Kumar dismissed media reports the government was planning to deregulate the sugar sector and do away with a requirement for mills to sell part of the sugar output to the government as levy. 

Ã¢â¬ÅThere is no such proposal. We have not given a thought to it, there is no such move,Ã¢â¬Â Pawar said.

http://www.dailytimes.com.pk/default.asp?page=2007\03\08\story_8-3-2007_pg5_21


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## Incredible India

*India leads Asia billionaire club *

India has the most billionaires in Asia with a total wealth of $191bn between them, according to the Forbes magazine annual list of richest people. 
With 36 billionaires, India has overtaken Japan's 24 billionaires, after two decades of Japan topping the Asian rich list. 

Steel magnate Lakshmi Mittal leads the Indian billionaire club, with a net worth of $32bn. 

Globally, there are a record 946 billionaires, up from 793 last year. 

"It was a sizzling year in Asia. Both India and China saw huge gains, " Forbes associate editor Luisa Kroll was reported as saying by the AFP news agency. 

China and Hong Kong together have a total of 41 billionaires, according to the list. 

Lakshmi Mittal, 56, is the fifth richest person in the world, according to the magazine. 

The other Indians in the list include Mukesh and Anil Ambani of Reliance, Wipro chief Azim Premji, Bharti Group chairman Sunil Mittal and Aditya Birla Group chairman Kumar Mangalam Birla. India has recorded impressive economic growth in the past few years, though critics say the poor have been largely left out of the process. 

Microsoft founder Bill Gates holds the top spot for the 13th year in a row in the world list of billionaires with a net worth of $56bn.

http://news.bbc.co.uk/2/hi/south_asia/6433367.stm


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## Neo

Sunday, March 11, 2007 

*India wants to curb prices without hurting growth*

NEW DELHI: India wants to moderate inflation without hurting robust economic growth and the government supports central bank measures to curb price pressures, Finance Minister Palaniappan Chidambaram said. 

IndiaÃ¢â¬â¢s economy, AsiaÃ¢â¬â¢s third-largest, is expected to expand 9.2 percent in the current fiscal year that ends on March 31 the fastest rise among major economies after China. But the growth, which has averaged 8.3 percent in the last three fiscal years, has accelerated annual inflation to above 6 percent causing unease to large sections of IndiaÃ¢â¬â¢s huge population. 

Ã¢â¬ÅItÃ¢â¬â¢s important to moderate inflation,Ã¢â¬Â Chidambaram told reporters on Friday, after his traditional meeting with the directors of the Reserve Bank of India (RBI) following the annual budget on Feb. 28. Ã¢â¬ÅThe government fully supports the monetary measures taken by the RBI and will continue to stand by and support the RBI when it takes more monetary measures as and when considered necessary,Ã¢â¬Â he said. 

The central bank, which has raised its key short-term lending rate six times since early 2004 by a total of 1.5 percentage point to 7.5 percent, reviews policy on April 24. It has also raised the level of deposits that banks must keep with the RBI by one percentage point since December, and resumed sales of market stabilisation bonds to drain surplus cash. 

Data on Friday showed the wholesale price index rose 6.10 percent in the 12 months to Feb. 24, little changed from the previous weekÃ¢â¬â¢s annual increase of 6.05 percent, but above the central bankÃ¢â¬â¢s estimate of 5-5.5 percent by end-March. 

Chidambaram said the central bankÃ¢â¬â¢s board was in agreement with the stance of the budget, which had cut import duties of most non-farm goods to take tariffs closer to Asian nations and to douse spiraling prices. Rising prices of food items such as wheat and pulses were cited as a factor for the Congress partyÃ¢â¬â¢s defeat in two state polls recently. Congress heads the communist-backed federal coalition. 

The government has taken a string of measures in the past few weeks to curb inflation, including a cut in fuel prices and lowering import duties on big-ticket items such as cement and steel.

http://www.dailytimes.com.pk/default.asp?page=2007\03\11\story_11-3-2007_pg5_24


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## Goodperson

Mukesh eyes Rs 1 lakh cr war chest for global buyout

MUMBAI: Mukesh Ambani appears to be getting ready to make the mother of all acquisitions. He's building a war chest to finance a global scale takeover that will dwarf the $12 billion Tata-Corus deal. Indications are that it could be in the neighbourhood of $22 billion (that's Rs 1 lakh crore), going up to $30 billion. That's as serious as serious can get. 

His sights are set on turbo-charging Reliance Industries Ltd into the global super-league. In the last fortnight, RIL has had two board meetings that effectively arm him Ã¢â¬â through what to the financially naive might appear as a complex set of moves Ã¢â¬â with the money and muscle to gun for a mega-ticket buyout. Insiders say that never in the history of Reliance have there been two board meeting in such close succession. What's more, the board meetings were on dates that don't add up to 9, the Ambanis' lucky number Ã¢â¬â such is the speed and urgency with which Mukesh is moving, say people who know him well. 

As reported by TOI last week, one of the likely targets could be the $54bn US petrochemical giant Dow Chemical. There has been speculation on Wall Street that some of the world's biggest private equity funds Ã¢â¬â like Blackstone, KKR and Carlyle Ã¢â¬â may team up to bid for the US-headquartered giant. Mukesh senses an opportunity to partner these funds for a slice of the action. 

Dow isn't the only one in Mukesh's crosshairs; there are other global petrochem giants he looking at. He knows that such a buy would give RIL easier access to global markets and offer him cutting-edge technology for speciality chemicals. (Dow earns nearly 35% of revenues from speciality chemicals and is the leader in plastics.) Another opportunity would be to export raw material from his home base and make value-added products overseas leveraging low cost for higher margins. With import duty on petrochemical products being slashed to Asean levels of 8%, RIL could even import valued-added products back to India.

http://timesofindia.indiatimes.com/Mukesh_eyes_Rs_1_lakh_cr_global_takeover/articleshow/1749931.cms


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## Janbaz

*India&#8217;s IOC eyes Maurel & Prom&#8217;s Congo assets *

NEW DELHI: State-run energy firms Indian Oil Corp (IOC) and Oil India are jointly eyeing French firm Maurel & Prom&#8217;s Congo assets as they seek to expand their foreign operations, an IOC source said on Monday.

Last month, Maurel & Prom announced the sale of some of its Congo assets to Italy&#8217;s Eni, but its partner in the assets, Britain&#8217;s Burren Energy, said it would look to use pre-emptive rights to block the $1.4 billion deal.

Maurel & Prom subsequently said the deal was final despite Burren&#8217;s claims. An IOC official, who would not be named, said the two Indian firms&#8217; bid would be slightly higher than Eni&#8217;s but that no formal offer had yet been made.

&#8220;The talks are at a preliminary stage. Burren has pre-emption rights and we are going through them,&#8221; the official said. Indian media reports said on Monday IOC and Oil India were expected to make a $1.5 billion bid for the assets.

The deal includes the French firm&#8217;s entire 48.6 per cent stake in the M&#8217;Boundi field, its 66 per cent stake in Kouakouala A, 50 per cent holdings in the production licences of Kouakouala B, C and D, and the majority of an exploration licence for Kouilou. Burren has a 31.5 per cent stake in the licence for the M&#8217;Boundi field and the right to take over the deal by matching Eni&#8217;s price. 

The News.
http://thenews.jang.com.pk/daily_detail.asp?id=46596


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## Incredible India

DELHI METRO RAIL
[YOUTUBE]



[YOUTUBE]



[YOUTUBE]


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## Neo

March 14, 2007 
*Indian PM urges major cuts in farm subsidies*

NEW DELHI, March 13: IndiaÃ¢â¬â¢s prime minister called on developed countries on Tuesday to make bigger farm subsidy cuts to ensure the success of the Doha round of world trade talks.

New Delhi was committed to an Ã¢â¬Åearly positive conclusionÃ¢â¬Â of the deadlocked talks and believed a multilateral trading system was in the nationÃ¢â¬â¢s Ã¢â¬Åstrategic interests,Ã¢â¬Â Prime Minister Manmohan Singh said in the Indian capital.

But Ã¢â¬Åto break the impasse, developed countries must make meaningful offers to reduce the huge trade-distorting subsidies provided to their agriculture,Ã¢â¬Â Singh told a conference organised by the Economist magazine.

The Doha round of the World Trade Organisation talks, launched in 2001 in the Qatari capital, ground to a halt last July, but trade ministers at the World Economic Forum in Davos earlier this year agreed negotiations should resume.

The European Union and US have been unable to agree on the size of cuts in agriculture subsidies and tariffs protecting their farm sectors and are pushing developing states to open their markets to industrial goods and services.

India, along with Brazil, have emerged as leaders in the developing worldÃ¢â¬â¢s challenge to the wealthy nations to curtail generous farm subsidies as they seeks to keep their own agriculture supports.

A breakthrough in the talks must come before the expiration of US President George W. BushÃ¢â¬â¢s Trade Promotion Authority (TPA) on July 1, WTO officials say.

If the breakthrough can be achieved, a conclusion to the Doha talks -- which have been called a once-in-a-generation chance to help bring millions out of poverty -- could be reached in about eight months, they say.

Singh said it Ã¢â¬Åmust be recognised that for us, agriculture is not just a business but a way of life and a major source of livelihood.Ã¢â¬Â

Ã¢â¬ÂMarkets are good for those who are part of a market system, but have no meaning for those who do not have the skills or resources to participate in it,Ã¢â¬Â he said.

India says it needs to protect the livelihoods of its 650 million farmers, many of whom are desperately poor.

All countries should work towards an outcome of the WTO talks that Ã¢â¬Ådoes not destabilise or cause distress to this large section of people,Ã¢â¬Â Singh said.

IndiaÃ¢â¬â¢s own efforts to build free trade agreements with many countries Ã¢â¬Åshould be viewed as building blocks of a larger agenda of trade liberalisation,Ã¢â¬Â he said.

Ã¢â¬ÅRegional and free trade agreements help us speed up trade liberalisation and move closer to meeting our multilateral commitments,Ã¢â¬Â he said.

As IndiaÃ¢â¬â¢s economy has opened up to the world, the country appeared to be on a growth path which Ã¢â¬Åif sustained for a decade or so, will enable us to eradicate the ancient scourges of mass

poverty,Ã¢â¬Â he added.

For the first time in the country's history, the economy recorded over eight per cent growth in gross domestic product for three straight years, he said.

http://www.dawn.com/2007/03/14/ebr4.htm


----------



## Neo

*Pathaks may sell out of ÃÂ£200 mn curry empire*

Vijay Dutt

London, March 14, 2007

It is big news in the ÃÂ£500 billion Indian curry industry in the UK. The Pathaks, Kirit and wife Meena, are reportedly selling their thriving empire of Indian readymade food and spices marketed under brand name Pathak's and distributed in 75 countries.

Their curry business, with a turnover of over ÃÂ£70 million, is being estimated to be worth ÃÂ£200 million. The likely sale of their empire, or part of it, was first hinted at in the Times. But the family has refused to comment.

It took the market by surprise. Kirit's father, the late Lachman Pathak who had sued PV Narasimha Rao for alleging that he and Chandraswami had defrauded him, started with making snacks in a small kitchen. But then he nurtured it so astutely that the brand Patak's became a world-known brand. The present thinking is that Patak's could grow fast and reach a turnover of ÃÂ£500 million. 

Both Meena Pathak and Kirit were awarded OBEs for their services to the food industry. More adventurous of the two, Meena Pathak had revealed that she used to take several top chefs around the world to India every year to taste different spices and regional cuisines. She is credited with adding a new high-tech plant to the string of Patak's factories.

Industry insiders say that either the husband and wife duo want to emerge as global players, which may not be possible on their own, or because of a long-running legal dispute with Kirit?s sisters who have demanded shares. Last October, Kirit settled the lawsuit by his two sisters out of court.

Interestingly, the company celebrates its 50th anniversary this year. Allegedly NM Rothschild, big investment bank, has been engaged "to carry out a review of strategic options for the firm in an effort to capitalise on an expected boom in demand for Indian ready meals and cooking ingredients".

The review by Rothschild will reportedly dwell on either one of Patak?s partners acquiring a stake in the business or a sale in which the family be part of the business. Apart from Chicken Tikka Masala Curry (CTNM in Britain), which is considered a national dish, Indian food is the fourth most popular cuisine.

The other major Indian food manufacturer Sir Gulam K Noon, with a turnover of over ÃÂ£80 million, said he was not surprised at the news of the Pathaks trying to sell.

http://www.hindustantimes.in/news/181_1950932,0002.htm


----------



## Neo

*Power plan to increase capacity in 11th Plan*

BS Srinivasalu Reddy

Mumbai, February 21, 2007

The CentreÃ¢â¬â¢s Ã¢â¬ËPower for AllÃ¢â¬â¢ plan resulting in huge capacity additions in the power sector in the Eleventh Plan is set to result in investments of Rs 80,000 crore in transmission sector alone in the next six years.

This is set to benefit power transmission equipment companies in the form of continued growth in their performance.

In a report on the power transmission sector, leading credit rating agency Crisil said, Ã¢â¬ÅWe expect investments of around Rs 80,000 crore in the transmission sector over the next six years. The Power Grid Corporation (PGCIL) is expected to invest around Rs 40,000 crore for the national grid and central sector projects, while the rest would come from private players.Ã¢â¬Â

This opens a huge window of opportunity for players in the transmission equipment sector, like KEC International, Kalpataru Transmission and Jyoti Structures. These companies have been reporting improved performance over the last three years, owing to the impetus provided to transmission capacity addition.

Ã¢â¬ÅAlthough the prices of raw materials like steel, aluminium and zinc have moved northwards, these companies were able to maintain their margins owing to their ability to pass on the cost escalation to end-users,Ã¢â¬Â Crisil said in a report.

The government has planned huge capacity additions in the Eleventh Plan to tide over the power deficit in the country by 2012. The huge investments in generation capacity addition would require concomitant capacity additions in transmission for efficient evacuation of power. The low reserve capacity in transmission network and the expected introduction of open access are some additional reasons for transmission capacity addition. 

India is facing 9.3 per cent of shortage in power supply during April-January 2006-07, and the same shoots up to 13.9 per cent of demand during peak hours.

The Mission-2012 of the Ministry of Power is targeting sufficient power to support IndiaÃ¢â¬â¢s growth rate above 8 per cent level, and the ultimate goal of power for all.

http://www.hindustantimes.in/news/181_1934610,00020018.htm


----------



## Neo

* Chennai moves into the big leagues *
By Raja M 

MUMBAI - Red-coated specters haunting old Fort St George by the Bay of Bengal in Chennai, formerly Madras, would be happy. The 350-year-old stronghold, now the seat of local government, was the first British Empire fortress in India. 

The imperialists have been long kicked out, but Chennai is regaining its stronghold status with a slew of major deals. Last month the government of Tamil Nadu state, of which Chennai is capital, announced a memorandum of understanding with South Asia's largest vehicle-manufacturing consortium. 

The consortium of Mahindra and Mahindra (India), Renault (France) and Nissan (Japan), the first of its kind in South Asia, will set up an integrated automobile-making unit with an initial investment of about US$897.2 million to roll out utility vehicles and cars. To be located at Oragadam near Chennai, the unit will be the biggest vehicle-manufacturing center at a single location in the country. 

Such deals could be more commonplace in Chennai, a southern Indian metropolis that seems a halfway living station between the hyper-energy and relentless ambition driving Mumbai and the deep cultural anchor of Kolkata. According to India's official pre-budget Economic Survey, Tamil Nadu and Pondicherry (a former French colony) together accounted for $1.63 billion (6.5%) of foreign investments, a figure that could double shortly. If India is the world's sleeping giant awakening, Chennai could be India's sleeping foot stirring, increasingly getting attention from local and global investors. 

"Chennai's growth has been phenomenal in recent years," local businessman Vivish George told Asia Times Online. "The city has expanded by about 85 kilometers. The challenge is a shortage of workforce as the city's economy is booming and there are more jobs at hand. A restriction on business growth is getting vacancies filled." 

Sure enough, other big projects are taking life. Vehicle maker Mahindra is also planning a Mahindra Research Valley in the Mahindra World City near Chennai. The project is expected to add a whopping $4 billion a year to Tamil Nadu's gross domestic product (GDP). Additional investment from vendors and supporting service providers is expected to amass about $2.2 billion. 

The Tamil Nadu government is also building an "IT corridor" on the outskirts of Chennai, another Indian Silicon Valley in the making. This forest of information-technology companies is expected to create 300,000 additional jobs. The local Highways Department is speeding up work on an IT highway to connect the IT corridor with the rest of the city. The IT corridor and related infrastructure are expected to be ready this August. 

Such developments have changed and raised the city's profile, besides sending real-estate prices through the roof. Still, rentals are very low compared with other leading Asian cities. A two-story bungalow with a garden can be rented in suburban Tiruvanmayur for $270 a month. 

A visitor to Chennai after 10 years, as was the case of this correspondent, can be astonished at how much the city has changed: flyovers, glitzy shopping malls, cleaner roads and greater expectations. From being a region whose inhabitants have often been the butt of jokes elsewhere in the country (southern Indians are usually lumped together as "Madrasis", particularly because of the accent in which they speak Hindi, as well as eating and dress habits) the city now wears a quiet confidence, wielding not just serious economic muscle but political power. 

The state's ruling Dravida Munnetra Kalagam (DMK) is a key partner in the ruling coalition in the central government. India's successful young information and communications minister, Dayanidhi Maran, is the grandson of the state chief minister, Muthuvel Karunanidhi. 

Karunanidhi, 82, a poet and former movie scriptwriter, is now in his fifth term as chief minister, for the past two decades gleefully throwing out the incumbent government and alternating with his arch-rival Jayalalitha Jayaram, a former top movie heroine in the 1970s and leader of the All India Anna DMK. 

Jayalalitha, South Asia's version of Imelda Marcos, took over the party mantle after a brief power struggle following the death of her co-star, the party founder, former chief minister and movie idol M G Ramachandran or MGR. The dashing MGR, who initiated a state-sponsored nutritious-noon-meal scheme for schoolchildren, a program now widely adopted across India, was one of the first actor-politicians in the world to assume a major office and never lost an election until his death in 1987. Following in his footsteps, leading Tamil movie stars invariably join a political party or start their own, giving the state's politics a peculiar circus-like atmosphere unmatched anywhere else in the world. 

Karunanidhi, besides indulging in many populist schemes including giving free color TVs to poverty-stricken families, has in his current spell as chief minister been energetically making the state investor-friendly to IT majors, so much so that questions now fly whether Bangalore, India's original Silicon Valley and the dictionary word for outsourcing (Bangalored), is losing ground to Chennai. Leading IT companies such as Tata Consultancy Services, Infosys, HCL Technologies and other global IT giants such as Ford Information Technology, Verizon, iSoft etc are upgrading their Chennai presence or starting major new ventures. 

TCS, India's leading company, will open its largest development center in Chennai and will hire 8,000 software workers over the next 18 months. Mumbai, with about 6,000 TCS workers, gets relegated to second place. 

"Foreign direct investment in Chennai is very satisfactory," R Subramanium, secretary general of the Madras Chamber of Commerce, told ATol. "Per capita income in Tamil Nadu has tripled in recent years and savings comprise one-third of income. So the potential for much more growth is there." 

Vivek Harinarain, the state IT secretary, told the media that he is "very bullish" on Tamil Nadu's IT prospects, with the state opening up another 4 million square feet (371,600 square meters) of space for IT and software companies. 

An IT industry analyst pointed out that these IT companies do not have a mere presence in Chennai, but their operations there are the largest or the second-largest in India or in the world. 

http://www.atimes.com/atimes/South_Asia/IC08Df04.html


----------



## Janbaz

*Vodafone signs Essar control pact *

Mobile phone provider Vodafone has reached an agreement with Essar over how to run the Indian wireless company. 
Last month, Vodafone agreed to buy a 67% stake in Essar for $11.1bn (ÃÂ£5.7bn) but it was not clear how the deal would be structured and the firm controlled. 

The new company will be called Vodafone Essar. Operational control will be in the hands of the UK phone firm, while Essar will have seats on the board. 

Essar also has the right to sell all or part of its 33% stake to Vodafone. 

*'Amicable partnership' *

In earlier talks, Essar had called for the firm to be jointly managed and hinted it might look to increase its stake in the firm, a plan that had raised concerns about the viability of Vodafone's investment. 

"It's good the two companies have reached an amicable partnership agreement," said Robert Grindle, an analyst at Dresdner Kleinwort. 

"The market can now move on to anticipate operational success rather than ownership debates." 

Thursday's deal allows Vodafone's purchase to go ahead, and still meet Indian regulations that a foreign firm cannot own more than 74% of a domestic telecommunications company. 

Should regulations change in the future, then Essar has the right in three year's time to sell all of its stake to Vodafone for $5bn, or part of its stake at an independently valued price. 

"In due course, the business will market its products and services under the Vodafone brand," the company said in a statement. 

*'Key role' *

Under the terms of the agreement, Essar's vice-chairman Ravi Ruia will be chairman of the newly formed company's board. 

Vodafone chief executive Arun Sarin, who has earmarked $2bn for investment in India, will be a vice-chairman. 

"Essar has played a key role in transforming this business into a leading Indian mobile operator," Mr Sarin said in a statement. 

"We look forward to leveraging this experience and working with our partner as the company enters its next phase of growth in the attractive Indian telecommunications market," he added.


BBC News.
http://news.bbc.co.uk/2/hi/business/6453677.stm


----------



## Neo

March 19, 2007 
*Farmers oppose setting up of industrial enclaves*

By Anand Kumar

INDIAÃ¢â¬â¢S ambitious special economic zones (SEZs) policy, which promised to generate hundreds of thousands of new jobs in exclusive industrial and service enclaves around the country Ã¢â¬â besides attracting billions of dollars in foreign and domestic investments Ã¢â¬â will finally be laid to rest.

Last weekÃ¢â¬â¢s violence in West Bengal, in which 14 people were killed in police firing in Nandigram, threatens to bring a premature end to the governmentÃ¢â¬â¢s SEZ policy. Sadly, the losers include thousands of poor farmers Ã¢â¬â the value of whose marginal land holdings have crashed in recent weeks following the uncertainties facing the SEZ sector Ã¢â¬â and tens of thousands of jobless youth who will have to remain satisfied with low-paying, exploitative jobs in the unorganised sector.

Well-heeled investors, including both Indian and international, will find dozens of attractive alternatives, in countries in South East Asia (Vietnam, Cambodia, Indonesia), Central and Eastern Europe, Latin America and even in Africa.

But in India, none of the two major parties who can be expected to rule the country Ã¢â¬â through alliances with smaller partners - alternatively over the next few years can be expected to revive the contentious SEZ policy. The Congress, a party that has reluctantly adopted economic reforms, is shell-shocked in the aftermath of the Nandigram killings, and can be expected to give a quiet burial to the concept of SEZs.

The BJP, an opportunistic party Ã¢â¬â which has been pushing for SEZs in states ruled by it, including Gujarat and Rajasthan Ã¢â¬â has smelt blood and can be expected to exploit the Nandigram incident in the crucial elections to the Uttar Pradesh assembly, due to be held next month.

But this is not the first time that sound economic policy is being hijacked by political considerations, nor is it going to be the last time. The BJPÃ¢â¬â¢s chief minister in the western state of Gujarat, Narendra Modi, tom-toms the billions of dollars in investments that the state government has attracted from international investors, but in the UP election campaign, the party would focus on the Ã¢â¬Ëanti-labour, anti-farmerÃ¢â¬â¢ policies of the Congress in the eastern state of West Bengal.

WHAT happened in Nandigram in West Bengal last week Ã¢â¬â when the police opened fire on a mob armed with bombs and other weapons, and was far from peaceful Ã¢â¬â was unfortunate. The police in India, including in states ruled by the Marxists, tend to be brutal, and when faced by a violent mob respond in the only manner they know Ã¢â¬â retaliating, even firing from point-blank range.

There have been countless commissions that have condemned the police for firing on demonstrators, but despite clear-cut rules and warnings from the government, many police officers have failed to control their men, who open fire when faced with unruly mobs. (Incidentally, a senior intelligence official had been lynched in Nandigram last month, and the police had been prevented from entering the village).

West BengalÃ¢â¬â¢s pragmatic Marxist chief minister Buddhadeb Bhattacharjee, who has been trying to revive the moribund industrial sector in the state Ã¢â¬â following the disastrous policies pursued by his predecessors, which have driven away entrepreneurs Ã¢â¬â is now facing a dilemma, thanks to the trigger-happy men in his police force.

Though the Communist Party of India (Marxist) (CPM) dominates the West Bengal government, its allies Ã¢â¬â including the Communist Party of India (CPI) and the All India Forward Block (AIFB) Ã¢â¬â have been critical of BhattacharjeeÃ¢â¬â¢s overtures to industrialists and international investors.

A.B. Bardhan, an old-time CPI leader and an orthodox communist, flayed the West Bengal government for the firing in Nandigram. According to him, there can be no industrial development based Ã¢â¬Åon the corpses of peasants.Ã¢â¬Â The AIFB, which along with the CPI is opposed to BhattacharjeeÃ¢â¬â¢s laying of the red carpet for prominent businessmen, dubbed the action as Ã¢â¬Åanti-people.Ã¢â¬Â

While supporters of the Marxist regime in West Bengal have been extremely critical of the government, its opponents Ã¢â¬â including the Congress, the Trinamool Congress and the BJP Ã¢â¬â have lambasted the Bhattacharjee government, purely out of guile and even envy. The BJPÃ¢â¬â¢s Modi in Gujarat, or the Congress chief minister of Maharashtra, Vilasrao Deshmukh, are doing exactly what Bhattacharjee is doing Ã¢â¬â acquiring land from farmers (worse, they pay far less than what West Bengal offers farmers) and developing special economic zones, to attract global investments.

West Bengal has for decades faced a major crisis on the industrial and economic fronts, and Bhattacharjee has embarked on an ambitious programme, attracting investors from around the globe and within India to the state, urging them to set up industries. And investors, from IndiaÃ¢â¬â¢s leading business group, the Tatas, to international majors, have responded to his pleas.

Ratan Tata, the chairman of the eponymous group, decided to set up his small-car project (which would sell automobiles for less than Rs100,000) in Singur in West Bengal. The Salim group of Indonesia has been another major investor in West Bengal, and was keen on setting up a chemical hub in Nandigram.

Mamata Bannerjee, the Trinamool Congress chief Ã¢â¬â whose party was trounced in assembly elections in the state last year Ã¢â¬â launched a high-profile hunger strike against the Singur project of the Tatas a few months ago, roping in Ã¢â¬Ëprofessional, celebrity protestorsÃ¢â¬â¢ (who automatically attract television networks) and projected herself as a defender of farmers.

But despite the high-decibel protests, a majority of landowners in Singur sold their farmland to the Tatas, attracted by the hefty price that was offered. According to Bhattacharjee, 960 acres of a total of 997 acres have already been handed over by the farmers to the Tatas.

According to the West Bengal chief minister, landowners were being paid unheard of compensation of Rs900,000 an acre of single-crop land, and Rs1.2 million for multi-crop land. In most other SEZs that are coming up in India, farmers have been paid a fraction of the sum.

Bhattacharjee is now willing to relocate the chemical hub from Nandigram if the people there do not want new industries to come up. But in India, it is easy to mislead a few vocal local leaders and organise demonstrations against major projects Ã¢â¬â some from the underworld have also infiltrated such agitations, demanding extortion from promoters Ã¢â¬â and then project it internationally as a cause celebre, with the aid of ever-willing Ã¢â¬ËcelebritiesÃ¢â¬â¢ out to grab a few minutes of fame on television.

BUT chief ministers like Bhattacharjee, M. Karunanidhi of the DMK in the southern state of Tamil Nadu, and even Y.S. Rajasekhara Reddy of the Congress in Andhra Pradesh, have been urging Prime Minister Manmohan Singh to remove the freeze on approving SEZs, imposed a few weeks earlier.

Many international majors have unveiled plans to invest millions of dollars in SEZs across India, and in some cases, the machinery and equipment has already started arriving. But following Mamata BannerjeeÃ¢â¬â¢s high-decibel opposition to the Singur SEZ of the Tatas, the weak, United Progressive Alliance (UPA) government in Delhi decided to freeze all new approvals for such zones.

The government had received applications for hundreds of SEZs from entrepreneurs Ã¢â¬â some of who included real estate developers, tired of getting clearances for acquiring land for developing townships from local authorities Ã¢â¬â but the old guard in the Congress warned the high command against aggressively pursuing the SEZ policy.

Though the federal government approved 235 SEZs, it has notified a mere 63. While the unwieldy coalition government in Delhi is unable to decide on the issue, international investors have been putting pressure on state governments. Tamil Nadu, for instance, is worried that investors like Nike Ã¢â¬â which planned to invest $300 million in the state Ã¢â¬â and US-based Velankani Communications (with plans for $600 million in investments) Ã¢â¬â would back out and head for other destinations in South East Asia.

The SEZs being planned by Nike and Velankani would alone have generated over 40,000 jobs in the state. Overall, the UPA government was hoping that 1.5 million new jobs would be churned out and investments worth nearly $15 billion be ploughed into the country by 2009, following the setting up of SEZs.

The next general elections are due to be held in 2009, and the Congress could have focussed on the success of the SEZs policy while seeking yet another term. But the party, which is facing an inner conflict between reformers and the old socialist warhorses, has been unable to reconcile the differences and is likely to dump a policy that would have resulted in jobs for the Ã¢â¬Ëaam aadmiÃ¢â¬â¢ (common man).

http://www.dawn.com/2007/03/19/ebr10.htm


----------



## Neo

*India to Ã¢â¬ËrefineÃ¢â¬â¢ economic zone policy *

NEW DELHI: India promised on Monday to Ã¢â¬ÅrefineÃ¢â¬Â its controversial policy to set up special economic zones, a week after 14 people trying to stop the compulsory purchase of their land were killed by police.

Ã¢â¬ÅThe SEZ policy will be refined in consultation with the state government, the farmers who own the land and industrialists,Ã¢â¬Â federal Home Minister Shivraj Patil was quoted as saying by the Press Trust of India.

Protesters in Nandigram a village 120 kilometres (75 miles) south of Kolkata in eastern India were killed on Wednesday when police opened fire in the bloodiest demonstration yet against state government plans to buy land to set up the zones.

The shooting deaths led to a one-day general strike in the communist-ruled state of West Bengal where Nandigram, the proposed site for a chemical industry hub backed by IndonesiaÃ¢â¬â¢s Salim group, is located.

Patil told reporters that the federal government has an Ã¢â¬Åopen mindÃ¢â¬Â on the policy of setting up SEZs. The comments suggest the policy will undergo more consultations but will not be reversed in the light of the protests.

The zones are meant to be privately run enclaves with world-class infrastructure and tax breaks to attract foreign investment. The West Bengal government last week ordered police to break a blockade by villagers at Nandigram which had been a no-go area for authorities since 11 people died in protests there against SEZs in January. The unrest in January led the federal government to suspend plans for scores of SEZs. 

http://www.thenews.com.pk/daily_detail.asp?id=47549


----------



## Janbaz

*South Asia aims to jump-start energy grid idea* 

NEW DELHI: Power-hungry South Asian nations may advance hopes to build a common energy grid this week, edging closer to overcoming the political obstacles that have left some with a power deficit and others with abundance.

Nepal and Bhutan have substantial untapped hydroelectricity potential, while Bangladesh has large gas reserves that could be used domestically or exported to India, Pakistan and Sri Lanka if only the infrastructure existed to carry it.

While the economic benefits appear clear, competing political interests and at times open hostility have stymied the effort. &#8220;Somehow politics keep getting in the way of economics as far as cross-border projects are concerned,&#8221; said Amrit Pandurangi, executive director at PricewaterHouse Coopers.

&#8220;Bangladesh at one point of time was willing to supply gas to India but now the situation has changed. It keeps changing its mind with the change in government,&#8221; he said. India accounts for nearly four-fifths of the electricity generated in South Asia, yet grapples with the problem of peak shortages at 14.2 per cent between April 2006 and February 2007.

It already has some connections with neighbouring Nepal and Bhutan, and is studying the feasibility of linking with Sri Lanka and Bangladesh, issues that energy officials from South Asia are likely to discuss at their meeting in New Delhi later this week.

&#8220;The idea is a positive step. We have a bilateral building block with Sri Lanka, we have with Bhutan we are exploring the possibility of doing that with other neighbouring countries,&#8221; said India&#8217;s Power Secretary Anil Razdan.

India&#8217;s rapid economic growth and the rising energy needs of its 1.1 billion people are boosting fuel demand, and with 70 per cent of its oil needs imported, rising energy costs have fuelled inflation to its fastest rate in two years. But crippling shortages also threaten to constrain the expansion, adding urgency to the race for new power capacity.

Merill Lynch senior director Joseph Jacobelli said the benefits of a united power system which could allow open trade, keep a lid on costs by utilising the cheapest form of generation and encourage efficiency would remain out of reach until the supply deficit could be eliminated.

India&#8217;s National Electricity Policy wants all billion-plus people to have access to power by 2012 and to raise the per capita availability of power by nearly 50 per cent, a goal that requires another 100,000 megawatts (MW) of capacity by 2012.

The capacity addition of more than 76,000 MW comprising 75 per cent thermal power, 21 per cent hydropower and the remainder nuclear has been provisionally proposed. Of this, just over 44,000 MW is under construction.

The bulk of the power in Bhutan generated from the hydroelectric projects at Tala (1020 MW), Chukka (336 MW) and Kurichhu (60 MW), which have been implemented with technical and financial assistance of India, is exported to India.

&#8220;Generally speaking it is very important for energy security and energy efficiency to transfer energy from a resources-rich area to areas with a high intensity of energy demand,&#8221; said Jacobelli. &#8220;Within a single country distance is the main challenge. Cross-border, the challenge has been political,&#8221; he said. 

The News.
http://thenews.jang.com.pk/daily_detail.asp?id=47548


----------



## Neo

Wednesday, March 21, 2007 

*India may open markets to some S. Asian countries*

By Iftikhar Gilani

NEW DELHI: India may announce opening of its markets fully for selected South Asian countries at the forthcoming SAARC summit scheduled here early next month.

A package is being worked out by the Prime Minister's Office in consultation with ministries of external affairs and commerce.

The offer, however, would be open only to the least developed countries (LDC) in the region namely Bhutan, Bangladesh, Maldives and Nepal.

Sources said the package would include advancing India's commitment to reduce duties under SAFTA. India is also working out a similar package for least developed countries under the WTO to widen its reach and horizons of trade. Since the European Union and the US would be present as observers at the meeting, sources here believe that such a gesture would also bring pressure on Pakistan. Islamabad has not yet opened up its market for India violating SAFTA, which came into effect last year. Under the SAFTA, the three non-LDC members Ã¢â¬âÃ¢â¬â India, Pakistan and Sri Lanka Ã¢â¬â are slated to bring down their tariffs to 20 per cent in the first two years that end 2007.

In the final five years, that will end 2012, the 20 per cent tariff will be gradually reduced and brought down to zero, the four least developed countries, are allowed an additional three year period to being down their tariffs to zero. "India could advance this date unilaterally," sources said.

It may also reduce its negative and sensitive lists of items. Asked if such a gesture may not affect India's economic interests, officials here stated that package comprised a small percentage of country's seven billion dollar trade with SAARC. Officials believe that unlike other members, Pakistan allows confessional imports from India of only 1,075 items. Only recently Pakistan had added 302 items in the list of commodities to be imported from India.

http://www.dailytimes.com.pk/default.asp?page=2007\03\21\story_21-3-2007_pg5_4


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## Neo

Friday, March 23, 2007 

*India acute poverty down to 22 percent from 26*  

NEW DELHI: The number of people living in acute poverty in India has fallen to nearly 22 percent from 26 percent in a five-year period, an economic policy-making body said.

The survey by IndiaÃ¢â¬â¢s Planning Commission showed that the number of people in acute poverty in 2004-05 totalled 238.5 million out of the countryÃ¢â¬â¢s population of 1.1 billion. The poverty estimate for 2004-05 was 21.8 percent of the population and was compiled by monitoring spending on five key Ã¢â¬Ånon-foodÃ¢â¬Â items - clothing, footwear, durable goods, education and institutional medical expenses.

The figures were Ã¢â¬ÅroughlyÃ¢â¬Â comparable with an estimate of 26.1 percent in 1999-2000, said the planning commission in a statement on its web site on Thursday. In 1993-94, the number of people living in deep poverty was 36 percent, said the commission.

India, considered AsiaÃ¢â¬â¢s fourth largest economy, grew by an average nearly eight percent during the five-year period under study and is expected to grow by at least nine percent for the current financial year to March 31.

http://www.dailytimes.com.pk/default.asp?page=2007\03\23\story_23-3-2007_pg4_15


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## Neo

*India inflation near two-year high at 6.4pc *

NEW DELHI: IndiaÃ¢â¬â¢s inflation rate remained unchanged near two-year highs of almost 6.5 percent, according to data on Friday, keeping the government under pressure to stem rising prices.

The wholesale price index, IndiaÃ¢â¬â¢s most closely watched cost-of-living monitor, showed inflation was 6.46 percent for the week ending March 10, the same level as the previous week and slightly below analystsÃ¢â¬â¢ forecasts.

But the rate, which was just 3.80 per cent a year ago, was still sharply above the ceiling of 5.5 percent set by the Reserve Bank of India (RBI), the central bank.

Inflation hit a more than two-year high of 6.73 percent in early February.

Subduing inflation has become an urgent priority for the ruling Congress government after increasing prices were cited by analysts as a key factor in its defeat in two state elections last month.

In April, Congress faces a crucial election in politically pivotal Uttar Pradesh, IndiaÃ¢â¬â¢s most populous state that is seen as a dress rehearsal for parliamentary polls that are at most two years away.

Investment bank Goldman Sachs forecast in a research note earlier this week inflation would remain above six percent in the near term due to a low year-earlier base effect but should fall below that level next month.

The latest figures came after the deputy chairman of the Planning Commission, a top economic policymaking body, warned that any Ã¢â¬Åextraordinary stepsÃ¢â¬Â to contain inflation may prove Ã¢â¬Åcounter-productiveÃ¢â¬Â and harm growth.

http://thenews.com.pk/daily_detail.asp?id=48089


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## Neo

*Manmohan says economic zones to stay *

NEW DELHI: Indian Prime Minister Manmohan Singh said on Friday that his government would not reverse plans to create Ã¢â¬ËSpecial Economic ZonesÃ¢â¬â¢ for industrialisation despite deadly rioting by furious villagers.

Ã¢â¬ÅSEZ as an instrument of economic policy has come to stay,Ã¢â¬Â the Press Trust of India quoted him as saying.

The special economic zones (SEZ), modeled on a similar Chinese programme, allow companies to set up large tax-free enclaves in order to spur industrialisation and the development of infrastructure.

But the controversial programme, launched in 2005, has met with massive protest from those living on land being earmarked for such zones.

Ã¢â¬ÅIn the process of implementation, we have been exposed to certain problems which cannot be dismissed,Ã¢â¬Â Singh acknowledged.

Fourteen people were killed 10 days ago when police in eastern India fired on villagers fighting against the forced sale of their land for a proposed petrochemicals project by an Indonesian group.

The bloody demonstration was followed by a statewide strike in which dozens were injured, and saw renewed protests in neighbouring states that are attempting to set up the zones.

Ã¢â¬ÅThere have been inadequacies in compensation and in ensuring that the interests of all stakeholders who suffer in this process are taken into account,Ã¢â¬Â the prime minister was quoted as saying.

Singh said that the government was looking at the issue of proper compensation for those displaced, which might lead to delays in the setting up of the zones.

There are 14 SEZs in India and proposals for hundreds more.

Ã¢â¬ÅThese are decisions which are irreversible,Ã¢â¬Â said the prime minister. Ã¢â¬ÅTherefore, it is very important that before we move, if there are any gaps in the performance, gaps in the design and gaps in the implementation, we should halt a little bit even though it takes time.Ã¢â¬Â

The cost of delay would be much less than the social cost India could incur if the policy was Ã¢â¬Åbulldozed, regardless of human, social and economic concerns,Ã¢â¬Â he said.

Analysts have said IndiaÃ¢â¬â¢s Maoist rebels, active in many of the states that have seen protest over the zones, could reap political mileage from the anger of those displaced by the policy.

This monthÃ¢â¬â¢s violence over the SEZs has renewed debate over whether farmland should be used for industry in India, where some two-thirds of the billion-plus population live off agriculture.

http://thenews.com.pk/daily_detail.asp?id=48088


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## Neo

*India raises FDI ceiling in telecom to 74 per cent*
(PTI)

24 March 2007 

NEW DELHI Ã¢â¬â In a move that could bolster investment in the fast growing telecom sector the government decided to raise Foreign Direct Investment up to 74 per cent, up from prevailing ceiling of 49 per cent.

Along with raising the FDI limit, the union cabinet also approved revised conditions for such direct investment, Information and Broadcasting Minister PR Dasmunsi told reporters after a meeting of the cabinet, chaired by Prime Minister Manmohan Singh.

The cabinet clearance followed after the Department of Telecom and security agencies reached a consensus on allowing remote access with certain safeguards. The changes in Press Note 5 of 2005, which would increase the FDI limit in the sector, were delayed due to stiff opposition from home ministry. However, following consultations with the industry and persuasion by Communications Minister Dayanidhi Maran, the cabinet agreed to revise the conditions for enhancement of FDI ceiling, DoT sources said. 

http://www.khaleejtimes.com/Display...h/business_March647.xml&section=business&col=


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## Neo

*ITES exports to exceed $100 billion by 2012*
(IANS)

24 March 2007 

NEW DELHI Ã¢â¬â Software and IT-enabled services (ITES) exports from India will surpass $100 billion by 2012, Communications and IT Minister Dayanidhi Maran said yesterday.

Addressing an international information, communication and technology (ICT) summit of the Commonwealth countries here, Maran said: "The software and ITES exports from India are expected to cross $100 billion by the year 2012."

President APJ Abdul Kalam, who inaugurated the event, said: "The telecom revolution in India has opened multiple windows of opportunities and the benefits of this revolution are in the process of percolating to the vast majority of our villages."

The president told the attending ICT ministers, dignitaries and high commissioners from around the Commonwealth that the benefits of the growth of the ICT industry can be brought through the implementation of a bandwidth, which is "a demolisher of imbalances".

http://www.khaleejtimes.com/Display...h/business_March643.xml&section=business&col=


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## Neo

Saturday, March 24, 2007 

*Ã¢â¬ËIndian sugar output to cross 25m tonnesÃ¢â¬â¢*

NEW DELHI: India is set to produce more than 25 million tonnes of sugar in the current season ending in September, up 30 percent from the previous year and higher than earlier estimates, industry officials said on Friday. 

The worldÃ¢â¬â¢s second-largest producer after Brazil had reaped a poor harvest of 19.3 million tonnes in the previous season, after floods and bad weather in some growing regions hit the sugarcane crop. 

Ã¢â¬ÅSugar production should cross 25 million tonnes, considering the pace of crushing in Maharashtra and Uttar Pradesh,Ã¢â¬Â Vinay Kumar, managing director of the National Federation of Cooperative Sugar Factories, told Reuters. This is higher than earlier estimates of around 24 million tonnes forecast by government and industry officials. 

Kumar said the western state of Maharashtra had revised its output estimates upwards by one million tonne to eight million tonnes, while northern Uttar Pradesh had raised to 7.5 million tonnes from earlier forecast of seven million tonnes. Tamil Nadu, Karnataka, Bihar and Andhra Pradesh are among the other major sugar producing states. 

Ã¢â¬ÅOutput will be definitely 25 million tonnes plus,Ã¢â¬Â said Yatin Wadhwana, a leading sugar trader. Ã¢â¬ÅYou get to know the yield and recovery once the cane is cut.Ã¢â¬Â 

India annually consumes about 19 million tonnes of sugar. 

The higher output could put more pressure on prices, which have fallen by 500 rupees to 1,300 rupees ($29.7) per 100 kg over the last six months, traders said. 

The fall in output last year had pushed domestic prices up 20 percent, and the government slapped a ban on exports in August. 

India lifted the ban in January but a drop in global prices to $300 a tonne from $400 about six months before made exports unprofitable. Kumar said crushing of sugarcane this year at the factories was expected to continue till the end of May. Crushing normally tapers off after April. Ã¢â¬ÅWe have already crossed or about to cross last yearÃ¢â¬â¢s output,Ã¢â¬Â he said, adding that crushing in most mills was good. Industry officials said the government has so far issued permits for exports of 800,000 tonnes of sugar, out of which about 300,000 tonnes have been sold mainly to Bangladesh, Sri Lanka and Yemen. 

http://www.dailytimes.com.pk/default.asp?page=2007\03\24\story_24-3-2007_pg5_15


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## Neo

*India to Overtake U.S. in Cotton Production*
2007-03-25 12:43:43

During the next decade, worldwide demand for cotton is projected to grow by about 20 million bales or 16 percent, according to a new analysis by Texas Tech UniversityÃ¢â¬â¢s Cotton Economics Research Institute.

The experts forecast that in terms of production, China will remain on top while the United States falls to number three as India rises to the second spot on the heels of recent technological breakthroughs in seed and production practices. Not only will more cotton be grown in the Far East, almost all on it will be processed there.

Ã¢â¬ÅMill use is projected to continue to concentrate in Asia,Ã¢â¬Â said Samarendu Mohanty, an agricultural economist and associate director of the institute.

By 2016, the nations that lead the world in cotton mill use are projected to be China at 45 percent; India with 16 percent; and Pakistan at 11 percent. Cotton mill use is where the raw cotton fiber is transformed into finished yarns and fabrics.

In addition, Mohanty said, mill use is increasing in several Southeastern Asian countries where there is virtually no cotton production. Meanwhile, mill use in the United States is declining, which makes these overseas export markets all the more important for U.S. producers, he said.

The Texas Tech World Fiber Model baseline projections, which were officially released this month, are based on assumptions of normal weather patterns and current trade policies, along with stable economic fundamentals such as population and income growth, and prices for crops that would compete with cotton.

Looking ahead, the Texas Tech researchers forecast that China will remain the worldÃ¢â¬â¢s largest cotton producer with a quarter of the market in 2016. There will be a minor shift as India moves to second place with 19 percent, and the United States slips to third at 17 percent. Currently, the United States has 19 percent share of the world cotton production.

Among the factors for the United States fall off is stagnation in acreage planted in cotton. Ã¢â¬ÅWeÃ¢â¬â¢ll see some very slight growth in the Southwest, but in terms of the Delta, Southeast and western areas of Arizona and California there will be acreage declines,Ã¢â¬Â said Mark Welch, a research scientist with the Cotton Economics Research Institute.

The Cotton Economics Research Institute provides cotton economic analysis for policy makers and other interested in agricultural economy. The group conducts economic research on all aspects of cotton production, marketing, trade and processing.

Texas, the nationÃ¢â¬â¢s leading producer of the fluffy fiber, harvested about 6 million bales in 2006. Nationally, 21.7 million bales were harvested. Cotton is grown across the nationÃ¢â¬â¢s Southern tier from Virginia and the Carolinas to California.

http://www.ccnmag.com/news.php?id=4954


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## Neo

*Hinduja, Dubai World plan $1.3bln investment*

26 March 2007 

NEW DELHI - Indian business group Hinduja announced on Monday investment plans of $1.3 billion in India and Dubai, on projects from real estate and commercial vehicles to healthcare services.


Hinduja and Dubai World, a holding company that manages projects for the Dubai government, will form a joint venture that will invest in medicare services and related infrastructure mainly in India.

Ã¢â¬ËIn the first phase, the firm will invest $1 billion primarily in India and also elsewhere,Ã¢â¬â¢ Hinduja India Chairman Ashok Hinduja told reporters after signing the venture.

Hinduja group will own 51 percent in the venture, and the remaining 49 percent will be held by Limitless LLC, a unit of Dubai World.

Hinduja group will also invest 12 billion rupees ($276 million) to build resort and commercial projects, he said.

It aims to develop 2 million square feet (185,800 sq metres) resort and commercial property in a waterfront project of Al Nakheel, which is part of the state-run Dubai World.

The group also intends to set up a manufacturing unit for truck maker Ashok Leyland Ltd. ASOK.BO in Dubai, Hinduja said but did not elaborate.

http://www.khaleejtimes.com/Display...h/business_March715.xml&section=business&col=


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## Neo

*India may become Vodafone's largest market in one year*
26 March 2007 

NEW DELHI Ã¢â¬â British telecom giant Vodafone's multi-billion dollar bet on India through its acquisition of Hutch-Essar may soon bear fruit with analysts predicting that the country could emerge its largest market within one year.


On the back of continuing surge in the number of mobile users, India is likely to soon surpass Germany and the US as Vodafone's biggest market in terms of subscribers, although the company might fail short of its target of becoming number one mobile player in the country. 

According to Macquarie Research, Vodafone's subscriber base in India is expected to rise to about 38 million by the end of 2007, from Hutch-Essar's current base of 25.3 million. 

Vodafone had reached a deal last month to acquire controlling stake in Hutch-Essar, which it plans to rename as Vodafone Essar, for about $11.1 billion in cash, while it has also announced an investment of $2 billion in the next couple of years.

Currently, India is the third largest market after Germany (30.6 million) and the US (26.2 million subscribers) for Vodafone, the world's second largest mobile operator in terms of subscribers and largest in terms of revenue. 

Vodafone's India-born CEO Arun Sarin said during his recent visit here he aims to make the company India's largest mobile operator with a market share of 25 per cent by 2010. 

However, Macquarie Research said in a report on Indian telecom sector that Vodafone's aim to gain 25 per cent market share by 2012 was "a bit unrealistic without help from M&A" activities. 

Hutch-Essar's current wireless market share in the country is 15.9 per cent, which could increase to over 16.5 per cent with the integration of Essar's BPL Mumbai circle operations, Macquarie said.

The British telecom major's growth in India operations would depend on expanding its market share, cost reduction through measures like infrastructure sharing and expansion of distribution and network coverage among other factors. 

http://www.khaleejtimes.com/Display...h/business_March699.xml&section=business&col=


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## Neo

*Mobile Penetration: Higher in Pakistan when compared to India*

India is one of the fastest growing mobile markets in the world. The market adds lakhs of new users every month. This has prompted UK based Vodafone to enter the Indian market by acquiring a majority stake in Hutch.

However, this is still not enough to challenge the Pakistani market where the mobile penetration is higher when compared to India.

Market reports claim that Pakistan has much higher mobile penetration of about 30 per cent. In comparison, mobile penetration is just around 14.3 per cent.

This is however expected to get much better. Macquarie ResearchÃ¢â¬â¢s latest report on India claims that wireless penetration in the country is likely to rise to 36.7 per cent in the next three years.

One of the primary reasons behind low mobile penetration in India is of course the huge population we have around here. India is the second most populous country with more than 1 billion people. Pakistan in comparison has just around 155 million people.

http://sifybroadband.techwhack.com/675/mobile-penetration/


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## Neo

*BlackBerry 8800 now available in India*

Research in Motion has finally launched their much awaited BlackBerry 8800 device in the Indian market. This is the thinnest product from the company yet at just 14mm. 

It comes loaded with a full QWERTY keyboard; multimedia features; a microSD expandable memory; and trackball navigation system. 

Blackberry 8800 is also the first product from the company to include GPS features. RIM claims that the Blackberry 8800 would deliver best-in-class performance with smoothly integrated support for voice and data applications, including phone, email, text messaging, Web browser, organizer, multimedia, and more.

Norm Lo, Vice President of Asia Pacific at RIM added: Ã¢â¬ÅThe BlackBerry 8800 is a feature-rich and finely tuned smart phone that is both functionally and visually inspiring. It is an excellent choice for mobile professionals in India, who want to stay connected and achieve more in their business and personal lives.Ã¢â¬Â

The device is expected to be made available by both Hutch and Airtel and is expected to be priced at around Rs 31,990.

http://sifybroadband.techwhack.com/668/blackberry-8800/


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## Neo

*Airtel to invest eight billion dollars by 2010 on telecom in India*

Vodafone and Idea have said in separate statements that they are planning to invest as much as USD 2 billion in the Indian market in the next two years. 

Market leader Airtel has responded to these claims by saying that they themselves are planning to put in eight billion dollars by 2010 in the Indian market.

The company is aiming to have a 25 per cent market share. Bharti Group Chairman Sunil Mittal said in a statement: Ã¢â¬ÅBy 2010, estimates are that India will have a subscriber base of 400-500 million. Bharti strives to retain up to 125 million or 25 per cent of the market.Ã¢â¬Â

This kind of investment would be necessary for the company to stay competitive in the sector which now has a presence of British mobile giant Vodafone.

http://sifybroadband.techwhack.com/654/airtel-to-invest/


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## Neo

*India, China auto marts carry high risks: S&P*
26 Mar, 2007 

MUMBAI: Global credit rating agency Standard and Poor's (S&P) has warned that the foreign auto makers may "hit some bumps on road to big profits" in India and China as the two countries carried high credit risks. 

"On the road to big profits in China and India, global automakers may hit some bumps," a S&P rating services report said. 

Global automakers like Volkswagen, BMW Group and DaimlerChrysler have lined up impressive investment plans for India in recent times whereas Suzuki, Hyundai, Toyota, General Motors already have substantial presence here. 

Automakers' hopes are particularly high in China due to significant investments already made in the world's fastest-growing major economy. 

"Despite promising high returns, the burgeoning auto markets of China and India carry high credit risks for foreign automakers, because of intense competition to maintain a foothold in these markets," the report said. 

However, the risks are evenly balanced by the prospect of reaping rich rewards going by the projected purchasing power in India and China which is expected to grow between 7 to 10% over the next five years. 

"It will take longer for the automakers to reap rewards from the Indian auto market as they are still in the initial stages of the investment cycle," the agency's report observed. Volkswagen is setting up a manufacturing facility at Chakan near Pune, DaimlerChrysler has also acquired 100 acres nearby at Chakan to set up a assembly line by end of 2008. 

BMW Group is set to roll out its first cars from the Indian plant set up in the Mahindra City near Chennai beginning March 29. 

Volkswagen and General Motors have largest presence in China and hence that could be a factor in their profitability, the report's author said. Competition has severely dented Volkswagen's China market share, which has fallen from 60% in the mid 1990s to just 18% in 2006. 

Despite its established production base, investments in China remain high for the Group between 2007 and 2009. It will invest 1.9 billion euros in China which will come from internal funds of the auto major Volkswagen's local joint ventures. 

In India and China, with populations of more than a billion each, fewer than 20 in 1,000 driving-age inhabitants owned a car in 2006. 

This compares with 900 car owners per 1,000 inhabitants in the US, world's largest auto market. With the purchasing power forecast to grow at more than 7% per year in India and by more than 10% in China over the next five years, cars sales are expected to grow enormously, the report predicted. 

http://timesofindia.indiatimes.com/...s_carry_high_risks_SP/articleshow/1807191.cms


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## Neo

Mar 27, 2007 

*India bucks global outsourcing trend*
By Siddharth Srivastava 

NEW DELHI - While worldwide information-technology (IT) firms witnessed an overall fall in new outsourcing contracts in 2006, Indian companies, such as Infosys, Tata Consultancy Services (TCS) and Wipro, saw their market share increase by more than 14 times in the past four years, according to a new study. 

Meanwhile, boosted by huge investments across various sectors, India's domestic IT market is expected to grow at 21.5% this year to Rs758.91 billion (US$17.5 billion), making it the fastest-growing segment in the Asia-Pacific region. 

"A major wave of IT investments has started to take place across 
banks, financial-services institutions, telecom, manufacturing, government, resources, education and other industries,'' market research and analysis firm International Data Corp (IDC) said in its report "India Domestic IT Market Top 10 Predictions for 2007". 

"This is probably why India is the fastest-growing country by IT spending in 2006 at 22.4% and is forecast to remain so in 2007 at 21.5% when it reaches Rs758.9 billion,'' it said. 

Another study by outsourcing advisory firm TPI says there are difficult times ahead for the global IT majors, as they face intense competition from new market players. "Indian firms are emerging as an attractive and credible alternative to the traditional players and over the next few years they are expected to compete directly with the 'Big Six' for larger-value contracts,'' said Duncan Aitchison, TPI's managing director. 

In contrast to the massive gains registered by Indian service providers, the market share of the "Big Six" global outsourcing majors - Accenture, IBM, HP, ACS, CSC and EDS - declined to 46% last year, from 71% in 2002. 

The market share of India-based providers rose to 7% last year, from less than 0.5% in 2002. Indian service providers such as Wipro, Tata and Infosys are reaping the benefits of the trend toward single-process and specialist deals, the TPI study says. 

Looking at industrywide contracts with a value of more $50 million, the Indian players grew their share from 8% in 2005 to 11% in 2006, while the share of the Big Six, which are known for their strong hold over IT contracts, dropped from 44% to 37%. 

Indian firms have been particularly successful in the applications development and maintenance segment, where they expanded their market share to 36% in 2006 from 8% in 2003. India-based IT service providers are aiming for a $60 billion export target by 2010.

According to IDC, this year Indian enterprises will graduate to the second level of "dynamic IT infrastructure", where IT infrastructure will be able to change in response to changing business scenarios. The key technology components that will come to the fore will be virtualization, service-oriented architecture and application integration. 

This year will mark the beginning of an aggressive effort by all major vendors to broaden and deepen their coverage of the small and medium-sized business sector. Vendors will experiment with new models such as on-premise hosted applications, hardware on lease, and software as a service. 

"We are looking at five to 10 deals worth $50 million to $100 million each, across various verticals. We think customers feel a lot more comfortable with such deal sizes," TCS head S Ramadorai said recently. "Large corporations do not want to sign the $1 billion to $2 billion or $10 billion outsourcing deals for sure because they are also worried about the aspect of value delivery on a sustained basis. The key point emerging from the current trends in the industry is that $50 million to $100 million deals are the sweet spot." 

Observers in India, however, say the tax regime for software companies could impact on profits in the near future. The tax-free status of software firms in India comes to an end in 2009. The National Association of Software and Service Companies (Nasscom), the industry's lobby body, has asked the government to extend the exemptions for another 10 years. 

Software firms hope that once the Software Technology Parks of India (STPI) incentives come to an end, they may be able to shift to special-economic-zone status and benefit from similar tax breaks. 

However, the left wing, a key coalition partner of the government, is opposed to this move. "What is the point in the economy doing very well, but the government not getting a share of the revenue [that] it can use for the other [poorer] sections?" a senior left-wing party leader recently asked. 

Nasscom has said the STPI incentives are a key factor in the growth of the industry, which is likely to see export revenue rise nearly 30% to $29 billion or more in the fiscal year, which ends on March 31. 

Until now software service units set up in STPIs have not paid taxes on exports, but have paid taxes on domestic business. However, from the next fiscal year, income from exports will come under a minimum alternative tax, which was last month extended to the sector in the federal budget for 2007-08. This rate is still much lower than domestic corporate tax. 

Manpower continues to be a major area of concern. A severe manpower crunch combined with high growth has resulted in unprecedented rises in salaries in India. This is the fourth straight year that salaries in India are projected to rise faster than in any other major Asian country. 

According to the annual study of human-resources consulting firm Hewitt Associates, India will continue to be the highest salary-growth region in the Asia-Pacific region, with an all-time high average pay hike of 14.5% in 2007 against 14.4% in 2006, 14.1% in 2005 and 13.7% in 2004. 

Middle managers and professional and technical employees will get the biggest hikes at 15.1% and 15.8%, respectively. Even manual workers will get an average hike of 12.2% against 11.9% in 2006. 

The Hewitt study follows an ECA International survey indicating that India will this year witness its highest-ever salary hikes. 

ECA International, the world's biggest organization for human-resource professionals, said: "Indian workers are set to receive the highest raise, with firms forecasting annual salary hikes of 12% resulting in a real wage increase of 7%, once inflation has been taken into consideration." 

Recently, N R Narayana Murthy, chief adviser to software giant Infosys, said India should quickly put in place a modern, world-class human-resources policy to avoid serious growth-related problems. 

"There is a serious manpower shortage," said Murthy. "So unless we have put in place a dynamic, forward-looking, modern and world-class human-resources policy, I think we will regret it." 

However, Murthy said he is against a tax holiday for IT companies. "I think we have to pay taxes. After all, what's the difference between a company that serves Indian consumers and a company that serves outside? There is no difference." 

Siddharth Srivastava is a New Delhi-based journalist. 

http://www.atimes.com/atimes/South_Asia/IC27Df01.html


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## Neo

*India grapples with energy issues*
By Siddharth Srivastava 

NEW DELHI - India's hopes of tapping into Myanmar's gas resources might have hit a dead end, with Yangon pitching for China instead. India's problems with Myanmar follow US moves to strangle the US$7.4 billion Iran-Pakistan-India pipeline. 

Reports of the meeting between Indian officials and Myanmar suggest that Yangon has refused to export gas to India or other contenders such as South Korea and instead would prefer a pipeline to China to export gas found offshore. 

Myanmar has reportedly told an Indian delegation that it wants to sell gas from offshore Block A-1 and potential discoveries in Block A-3 to China. The Shwe natural-gas field was discovered by Daewoo on the Western Arakan coast of the Bay of Bengal. 

While there is still confusion over how matters stand, with Daewoo, the South Korean company that operates the gas fields, denying the claims, nobody doubts that India's position is weak. 

Meanwhile, Washington has told India it is opposed to the gas pipeline from Iran, US Energy Secretary Samuel Bodman, who has visited New Delhi, has said. 

"During my trip, I have made it clear at the highest levels of the Indian government that the United States opposes the development of the Iranian pipeline to India," press reports quoted Bodman as saying. "We believe that Iran is seeking to develop nuclear weapons, and anything that will support that endeavor is something that we oppose." 

A prominent US legislator, Congressman Tom Lantos, who is head of the House of Representatives' Committee on International Relations, has introduced a bill that, if passed, will ensure that India and Pakistan are not able to proceed with their gas pipeline connecting to Iran. 

The legislation, the Iran Counter-Proliferation Act of 2007, seeks to target companies investing in Iran's energy sector by ensuring that deals with Iran worth more than $20 million will bring the investors under US sanctions. 

According to reports, the US government has been quietly warning foreign energy companies, including Europe's Shell and Repsol and Malaysia's SKS, as well as the governments of China, India, Pakistan and Malaysia, that penalties are possible if they pursue energy deals with Iran. 

As for Myanmar oil and gas, Indian intelligence agencies recently cautioned New Delhi about the possible shut-out of Indian interests by Russian and Chinese oil firms. The agencies argued that the decision by oil-business-savvy Russia and China to veto a US-led move in the United Nations Security Council to address the Myanmar junta's human-rights violations was a critical juncture in the evolving relationship with Russian and Chinese companies now well established in the country. 

The agencies highlighted the recent award of three deepwater offshore blocks - AD-1, AD-6 and AD-8 - along Myanmar's western Rakhine coast and adjacent to India's territory - as a possible quid pro quo by the ruling State Peace and Development Council to China's China National Petroleum Corp. 

Russia has also stolen a march over the Indian contingent, with the Republic of Kalmykia (RoK) of the Russian Federation recently acquiring its first oil-and-gas exploration and production asset in Myanmar - the B-2 onshore block. 

India's ONGC Videsh Ltd and Gas Authority of India (GAIL) have a 30% stake in A-1 and A-3 blocks, while South Korea's Daewoo is the operator with a 60% stake. South Korea's KoGas has the remaining 10% interest. 

According to a report by news agency Press Trust of India, "China has told Myanmar that it will lay about 900 kilometers of pipeline in Myanmar to transport the gas from the offshore area to the Myanmar-China border. The distance from the gas field to the India-Myanmar border is 290km, making it the most economical export option, but Myanmar's military leadership prefers to go with China.'' 

Perhaps sensing India's situation, Silver Wave Energy Corp of Singapore - a privately owned company headed by the well-entrenched Minn Minn Oung, which has helped India's state-run gas utility, GAIL, access three offshore blocks in Myanmar - seems to have given its relationship with GAIL a low priority by signing a tripartite agreement with the RoK and the Myanmar Oil and Gas Enterprise for oil and gas exploration. 

Recently, more gas was discovered off Myanmar's coast, further enhancing the Southeast Asian nation's position as one of the richest countries in the region for hydrocarbons. The latest find was made by Thailand's PTTEP, the exploration arm of the Thai state-controlled oil-and-gas company PTT, in the Gulf of Martaban. 

According to recent reports, Dhaka is now reportedly keen to renew discussions with the Indian government on the three-nation gas pipeline involving India, Myanmar and Bangladesh, which has failed to take off because of Dhaka's linking the pipeline and trade issues with India. 

In this context, India has sought the inclusion of transnational oil and gas pipelines in the World Trade Organization's trade-facilitation measures, which aim to cut red tape and other obstacles to the flow of goods across borders. 

"Countries like Bangladesh have shown a lack of commitment in entering into a treaty for providing a transit route [for] Indian goods, including the Myanmar-India gas pipeline, through their land, forcing India to consider other circuitous and uneconomical options,'' says an Indian government submission. 

It now seems too little, too late. The solace for India is that in the recent past, massive gas reserves have been found in the rich Krishna-Godavari basin and elsewhere that should meet some of the rising demand for energy sources. India is also exploring the option of nuclear power after a historic deal with the US. 

Looking to meet its growing energy requirements from every source, India recently mooted the concept of a "South Asian Energy Ring'', which would comprise transnational energy lines in electricity, gas and oil that would facilitate trade in energy in South Asia. 

Speaking at the South Asia Energy Dialogue in New Delhi, under the aegis of the South Asian Association for Regional Cooperation (SAARC), Indian Power Minister Sushilkumar Shinde said this country already has grid interconnection with Nepal and Bhutan and feasibility studies are under way in Sri Lanka and Bangladesh. 

The SAARC, for which energy is a very high priority for cooperation, comprises Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. 

Key SAARC nation Pakistan has welcomed the energy-ring concept. Amanullah Khan Jadoon, minister for petroleum and natural resources, said Pakistan is a strong advocate of energy cooperation in South Asia. Speaking at the meeting of SAARC energy ministers, Jadoon said high economic growth demands high energy inputs. 

India needs to act fast. More than half of its power plants are either shut or running at half their capacity because of a coal shortage. Most of India's power plants are coal-based. 

According to government estimates, India's dependence on crude-oil import will rise by 86.3% by 2011-12 from 78.3% at present (2006-07). 

New Delhi has estimated a loss of 400 million units of power from 43 gas-based plants, due to an acute shortage of gas, which could be addressed once pipelines are in place from the Krishna-Godavari basin, the site of several recent gas finds. India's power industry suffers an average shortage of 8% and a peak shortage of 13%. 

India, Asia's third-biggest oil market, is promoting exploration to reduce dependence on imports as prices rise to record levels and output from aging fields drops. 

India's current gas supply of 85 million cubic meters a day, including imported liquefied natural gas, falls short of the potential demand of 170 million cubic meters, according to estimates by the Oil Ministry. Gas consumption may rise to 400 million cubic meters a day by 2025 if the economy grows at the projected rate of 7-8% a year. 

http://www.atimes.com/atimes/South_Asia/IC24Df01.html


----------



## Neo

*Indian FDI: It's a two-way flow now*
Siddharth Srivastava 

For long foreign direct investment (FDI) has been considered a major engine for growth in India. But for the first time, more investment is beginning to flow out of the country than into it. 

With India Inc lining up several acquisitions overseas, investment abroad by Indian companies is likely to be more than FDI inflows in the country, India's Associated Chambers of Commerce and Industry (Assocham) has said. 

While this speaks a great deal about the emergence of Indian multinational companies, the government has still to get it right in providing the correct infrastructure and legal framework to those who want to invest in India. 

The massive exercise of setting up special economic zones (SEZs) has hit a roadblock after the virulent protests by farmers opposing land acquisition in Nandigram in the state of West Bengal. Fortunately, New Delhi is keen not to buckle while ensuring a good deal for those who are going to be dispossessed. 

The bulk of the outward FDI flow, estimated at US$15 billion (compared with inflows pegged at about $12 billion), will be driven by India's booming manufacturing sector, says the "Study on FDI Outflow and Role of Manufacturing in the Mergers and Acquisitions Front, 2007". 

Leading financial consultancy Thomson Financial has said that 2006 was a mega-merger year for India: 1,164 deals valued at a total of $35.6 billion as against 1,011 deals worth $21.6 billion in 2005. 

After the Tata-Corus and Vodafone-Hutch mega-deals, conservative estimates by Indian analysts have pegged mergers and acquisitions (M&As), including outbound and inbound deals involving Indian firms, to reach $100 billion in 2007. 

Another recent study by the Institute of International Finance, a Washington-based global association of financial institutions, has predicted that the desire of India Inc to operate in foreign lands will lead to a threefold rise in direct investment flows out of the nation in 2007. 

The figure might appear meager weighed against the frequent investment announcements of hundreds of millions of dollars abroad by Indian majors, because of big foreign financing components or debts. 

This year, India has already seen mergers worth more than $40 billion that include Tata Steel's acquisition of Anglo-Dutch steelmaker Corus ($12.2 billion), Hindalco's buyout of Novelis ($6 billion), and Suzlon's bid for Germany's REpower ($1.3 billion, a figure likely to go up because of a higher rival bid), besides Vodafone's acquisition of a majority in Hutchison Essar Ltd ($18.8 billion). 

Others could include Reliance Industries' interest in the plastic division of General Electric, a deal that could top $5 billion. Comparable figures are being quoted for Ranbaxy and a private-equity firm's interest in German pharmaceuticals major Merck. 

"Riding on strong balance sheets, good credit ratings and confidence shown by the global business community, Indian manufacturing is leading India Inc's global quest," said Venugopal Dhoot, president of Assocham. 

The main factors driving the M&As among Indian companies are surplus funds, globally competitive business practices and a favorable regulatory environment, besides higher margins, revenue, volumes and growth prospects, says the Assocham report. 

Preferred investment destinations are Europe, the United States and Africa, in the last case taking advantage of that continent's cost-competitiveness. Sectors such as pharmaceuticals and automobiles will give a major push to the FDI outflow, though information technology will continue to dominate the scene, said the report. 

According to Assocham, the Indian conglomerates that see the brightest prospects include the Tata group, Bharat Forge, Ranbaxy, ONGC, Infosys and Wipro. "The sectors attracting investments include metal, pharmaceuticals, industrial goods, automotive components, beverages, cosmetics and energy in manufacturing, and mobile communications, software and financial services in services," the report said. 

Highlighting specific examples, the study said: "The Apollo Group of Hospitals may strike [across] the border. Nicholas Piramal India Ltd plans to invest $50 million over a three-year period in its plants in the UK and India." 

Incoming FDI and SEZs
Despite the government of West Bengal backing out from a proposed SEZ at Nandigram, it is not the end of the road for India's plans. There are many state governments in the country that are pushing for the setting up of SEZs where land acquisition is not an issue as the farmers are happy about the compensation packages. 

Significantly, the leftist West Bengal government has also not said it is totally backtracking on the setting up of SEZs and has proposed that the industrial hub planned for Nandigram will be moved elsewhere in the state. 

Although the killing of 14 people by police at Nandigram has severely vitiated the exercise of land acquisition, given the intense competition among state governments to attract industrial investment, the West Bengal government knows that industry has plenty of other options in other states. 

Among the greatest supporters of special zones include the chief ministers of Tamil Nadu, Gujarat, Andhra Pradesh, Karnataka and Haryana. They have written to New Delhi conveying concerns of the firms that have lined up big investments in their states. 

The chief ministers have asked to be allowed to go ahead with notifying SEZs that have gotten final approval. In many cases, the chief ministers have said land that has been with the state industrial development corporations for many years has been given to the developers. In others, landowners have been adequately compensated. 

As many as 172 approved proposals are awaiting notification. Among the 166 SEZ proposals that have gotten in-principle approval, 100 have already tied up land. The federal government has also made it apparent that it is not going to reverse the policy, though it will make it more palatable to the farmers. 

Post-Nandigram, it is imperative that the federal government devise a comprehensive set of umbrella rules to ensure the course of action in case of disagreements. The package has to make sure that farmers and sharecroppers are made part of the development process. At present, New Delhi has put the entire exercise on hold until a proper rehabilitation package is drawn up. 

Home Minister Shivraj Patil has promised that the SEZ policy will be refined in consultation with the state governments, the farmers who own the land, and industrialists. He clearly indicated that the SEZs will be implemented. 

Commerce and Industry Minister Kamal Nath has said that the federal government is fully committed to the zones with complete backing of Prime Minister Manmohan Singh. 

Nandigram and political concerns "have not put me off, and the government is absolutely committed", Nath said, adding that he is confident that the Empowered Group of Ministers headed by External Affairs Minister Pranab Mukherjee will go ahead with clearing the SEZ cases where there is no land dispute. "Of course there is a fear now where land acquisition is concerned ... But where there is no land in dispute, why should we be worried?" 

Nath said he is worried that if clearance for such SEZs is not forthcoming, several foreign investors might opt out of India and take their investment elsewhere. 

"Of course I am worried. There is investment competitiveness from Thailand, from the Philippines, from Indonesia. Investment has to be attracted. It can't be demanded. [If there are delays] they will feel unstable. At the end of the day they are here because they look at India as a credible country." 

http://www.atimes.com/atimes/South_Asia/IC23Df01.html


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## Janbaz

*India, UAE companies sign major real estate deals *

NEW DELHI: Indian and United Arab Emirates firms signed major real estate deals on Monday worth more than $20 billion during a visit by the ruler of Dubai, including plans to build two massive townships in India.

IndiaÃ¢â¬â¢s largest real estate developer DLF said it inked a $20 billion deal with UAEÃ¢â¬â¢s Al Nakheel to build two townships in India, with an initial investment of five billion dollars each in the next three years.

Ã¢â¬ÅWe have signed a 50:50 joint venture with Al Nakheel to develop integrated townships,Ã¢â¬Â said a DLF executive, who asked not be named. The townships would be full-sized cities near the capital New Delhi and in western Maharashtra state, another company official said.

The executive, speaking on the sidelines of meetings with Indian business leaders by Sheikh Mohammed bin Rashed al-Maktoum, said the townships would cover 40,000 acres (16,200 hectares) of land, of which 70 per cent has already been bought. Construction will begin by the end of 2007, the official said.

The firm said a press conference planned on Monday to announce details of the deal had been cancelled but confirmed the agreement was signed. Ã¢â¬ÅWe had plans to announce the details in the presence of UAE officials but they had a change of plans,Ã¢â¬Â the executive said, indicating that the UAE officials had been called for meetings with the Indian foreign ministry.

Officials did not say how the company would buy large areas of land for the projects in the wake of bloody protests across India over the acquisition of land by the government for developing industry.

Among the proposals facing uncertainty over land acquisitions is Korean steel giant POSCO, which plans to invest $12 billion in a steel plant in eastern India in what will be the countryÃ¢â¬â¢s largest foreign direct investment.

In other agreements sealed on Monday, IndiaÃ¢â¬â¢s Hinduja Group, majority-owned by the London-based Hinduja brothers, said it signed a Rs12-billion ($275-million-) deal with Nakheel to develop resort and commercial property in Dubai.

The Hindujas also signed a joint venture with real estate group Limitless an arm of Dubai World, also the holding company for Nakheel to develop real estate for medical facilities with an initial investment of one billion dollars.

Ã¢â¬ÅHalf a dozen lands have already been acquired for this project,Ã¢â¬Â group chairman Ashok P Hinduja told AFP. The Hindujas will also set up a manufacturing unit for its commercial vehicle manufacturing firm, Ashok Leyland in Dubai.

Shares of Hinduja rose Rs8.75 or 1.45 per cent to 613.60 Monday while the benchmark Mumbai stock exchange Sensex fell 161.61 points or 1.22 per cent to 13,124.32.

The agreements were part of a string of business deals signed by companies from the two countries during the UAE leaderÃ¢â¬â¢s visit at the head of a large business delegation. IndiaÃ¢â¬â¢s third-largest software exporter Wipro signed a preliminary agreement with the UAE delegation to Ã¢â¬Åwork togetherÃ¢â¬Â to tap opportunities in the Middle East, said Chief Financial Officer Suresh Senapaty.

Ã¢â¬ÅItÃ¢â¬â¢s a statement of intent to address the Middle East market of entities that come under the sultan,Ã¢â¬Â Senapaty said in the southern technology hub of Bangalore. Ã¢â¬ÅThe details are to be discussed.Ã¢â¬Â

In January, DLF said it had filed a new and downsized initial share sale offer with the India stockmarket regulator almost six months after investors balked at its plan to raise three billion dollars for its ambitious expansion programme. 

The News.
http://thenews.jang.com.pk/daily_detail.asp?id=48517


----------



## Janbaz

*Hyundai India aims to double car sales overseas* 

BANGALORE, India: Hyundai Motor&#8217;s Indian unit plans to more than double overseas sales of cars by 2008 to cement its place as the country&#8217;s biggest automobile exporter, the company said Monday.

The South Korean automaker, which exported 113,000 made-in-India Accent and Santro cars last year, expects to ship 300,000 units by the end of 2008, it said after sending the first consignment of its Getz model to Europe.

Hyundai Motor India began exports in 1999 when it sold 20 Santro cars in neighbouring Nepal. Since then it has become India second biggest car maker behind the local venture of Japan&#8217;s Suzuki and the largest exporter.

Hyundai&#8217;s Indian-built automobiles are now exported to 67 countries spread over Europe, Latin America, the Middle East and Africa. &#8220;Given Hyundai Motor Company&#8217;s global strategy to make India an export hub for small cars, we are shipping the first consignment for export of the new Getz to Europe,&#8221; said H S Lheem, managing director of the unit, in a statement received here. &#8220;For the Indian operations, this is a major milestone.&#8221;

The company plans to ship 40,000 Getz cars overseas in the next year, boosting the number to 100,000 units by 2008. Since it was introduced in 2002, the Getz has sold more than 500,000 in Europe, accounting for close to 70 per cent of its total sales worldwide.

Hyundai Motor India is a wholly owned subsidiary of Hyundai Motor, marketing 16 variants of passenger cars in this country of 1.1 billion people. The company logged total sales of 299,513 vehicles in 2006, up 18.5 per cent.

In the domestic market it clocked growth of 19.1 per cent, with 186,174 units, while overseas sales grew 17.4 per cent to 113,339 units. India&#8217;s car market is forecast to expand 10 per cent a year to reach two million units by 2010 as an economy expanding nine per cent a year boosts the buying power of consumers in the world&#8217;s second-most populous nation.

International automakers drove into India after it opened up the potentially vast market to overseas investment as part of sweeping reforms launched in 1991 which overturned four decades of semi-socialist policies.

For decades after independence in 1947 India&#8217;s roads were dominated by two ancient models the boxy Premier Padmini and the full-sized Ambassador, still a mainstay among taxi drivers in many cities. 

The News.
http://thenews.jang.com.pk/daily_detail.asp?id=48518


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## Neo

*Foreign investment in India up by 151pc in Ã¢â¬â¢06*

27 March 2007 

NEW DELHI Ã¢â¬â Betting on India's growth story, foreign firms increased their investments in the country by 151 per cent during April-December 2006, according to official data released yesterday.

"FDI (foreign direct investment) inflows during the period April-December had been $9,272 million against $3,697 million in the corresponding period last year, representing a record increase of 151 per cent," said the Department of Industrial Policy and Promotion (DIPP) of the commerce and industry ministry.

According to the DIPP's annual report, the amount invested by foreign players shows their confidence in India. The rise is also due to measures such as increasing the FDI limit to 100 per cent in many sectors, increase in equity caps, removal of restrictive conditions and procedural simplification.

"India's forex (foreign exchange) reserves stood at $193.12 billion on Feb 23, 2007 up from $151.62 billion at the end of March 2006," said the statement. 

http://www.khaleejtimes.com/Display...h/business_March727.xml&section=business&col=


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## Neo

*FDI inflow pegged at $15 billion*  
27 Mar, 2007 

NEW DELHI: Global interest in India has prompted the government to scale up its projections on foreign direct investment (FDI) inflows for the current fiscal by 25% to $15 billion. 

If the government's revised projections, announced by commerce and industry minister Kamal Nath on Monday, are met, it would mean that FDI inflows would have nearly doubled from last year's $7.72 billion. The ministry was earlier estimating FDI inflows of $12 billion during 2006-07. 

While India received inflows of $38.90 billion between August 1991, when the economy was liberalised, and March 2006, estimated FDI flows during 2006-07 Ã¢â¬â the highest ever Ã¢â¬â would be 38.5% of the investment received in the previous 14 years. 

In terms of direct investment, the current financial year has been a landmark of sorts with FDI inflows for the first time overtaking FII flows, which economists said pointed to higher confidence in India as companies were willing to invest long-term. But even at $15 billion, inflows into India are less than one-fourth of what China ($63 billion) attracted in 2006. 

While Indian officials view China's FDI statistics with a degree of suspicion, they are excited about the inflows into India since a bulk of it was coming into manufacturing where government is trying to step up investment to create jobs. 

"Investment in industrial sector is good for a country like India where majority of the population is dependent on agriculture. FDI is adding to the booming investment proposals from Indian players. A large number of the proposals are from first-time investors so there will be more inflows in future," an official said. Between April and December, FDI inflows were $9.27 billion, 151% higher than same period last year. 

http://timesofindia.indiatimes.com/..._pegged_at_15_billion/articleshow/1812886.cms


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## Neo

*India's growth may slow down: Report*
27 Mar, 2007 

TOKYO: The Indian economic growth should slow down to 8.0 per cent this year before picking up to 8.3 per cent in 2008 despite higher inflation and a weaker agricultural sector, said the Asian Development Bank on Tuesday. 

While IndiaÃ¢â¬â¢s growth momentum was robust in 2006, it also led to Ã¢â¬Åhigh capital inflows and currency appreciation pressures,Ã¢â¬Â the ADB said in its annual Outlook report. Ã¢â¬ÅManufacturing and construction growth have stimulated a voracious appetite for credit, which in turn complicates attempts to control money supply,Ã¢â¬Â said the report. 

The ADB added that Ã¢â¬Åagricultural stagnationÃ¢â¬Â was a key structural challenge as rising food prices contribute largely to inflation. Stagnation in turn raises pressure to transfer land out of agriculture for industrial use, causing worker displacement and serious social unrest. The construction sector, which plays a major role in the Indian economy, has been through a boom which drove gross domestic investment to 33.8 per cent of gross domestic product (GDP) in 2005, an upward trend that seems to be continuing. 

This investment binge has been met by growth in bank lending, which is now causing problems in reining in money supply, the ADB said. While the federal government has tried to combat inflation with a raft of measures including a cut in tariffs on imported goods, including food, the results have been limited. 

Ã¢â¬ÅFaced with demand-led inflation, the Reserve Bank of India needs to dampen expenditure,Ã¢â¬Â said the ADB. Ã¢â¬ÅHowever, in doing so, it will be important not to reduce the credit available for expanding manufacturing capacity more than is necessary to contain inflation ... These capacity expansions are vital for enhancing growth potential in the medium- to long-term,Ã¢â¬Â concluded the report. 

http://timesofindia.indiatimes.com/..._may_slow_down_Report/articleshow/1815746.cms


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## Janbaz

*Renault, GM join battle for India&#8217;s car market* 

MUMBAI: Half a century ago, Renault and Mahindra & Mahindra Ltd failed to get off the ground a venture to make a cheap car for the local Indian market priced at a princely $158.

Nowadays, that might buy you a set of new tyres, but the two are back in partnership vying with global automakers to grab a slice of an Indian car market that is forecast to nearly double to 2 million units by 2010, if not sooner.

The new $10,000 Logan sedan, slated by Renault and Mahindra for launch early next month, will go up against similar small models offered by Ford Motor Co, Tata Motors and Suzuki Motor Corp&#8217;s Maruti Udyog.

Small cars make up more than two-thirds of the Indian market, but spreading wealth among the 1 billion-plus population has also triggered growth in bigger models from manufacturers such as Maruti, Tata, Hyundai Motor Co Ltd, Ford, Honda Motor Co Ltd and Toyota Motor Corp. 

General Motors Corp, still the world&#8217;s biggest volume carmaker, is also getting in on the act, with the imminent launch of its Chevrolet Spark. GM, which swung to a small profit in the fourth quarter, aims to shift 220,000 vehicles in India by mid-2008, up from just 65,000 last year, as it adds India&#8217;s fast-growth market to a global autos battlefield between US, Asian and European rivals.

That would give GM around 10 per cent market share in India where small cars up to 4 metres long and with a 1.2-litre petrol engine or 1.5-litre diesel engine get preferential tax treatment. &#8220;GM clearly needs to make the Spark a success because this will be their big volume brand,&#8221; said Pradeep Saxena, a senior vice president at research firm TNS Automotive.

&#8220;For GM, India may not be as crucial to its overall restructuring, but it has huge potential. In how many markets do you see 20 per cent annual growth?&#8221;The Spark will have a sticker price of around $8,000, analysts estimate, and will slug it out in dealers&#8217; yards with Maruti and Tata&#8217;s Indica.

Renault is one of several big European car makers drawn to India&#8217;s low-cost manufacturing base as well as its dynamic domestic market.Announcing the venture with Mahindra, Renault&#8217;s executive vice president Patrick Pelata said India would be &#8220;a key part of our mission for profitability&#8221;.

&#8220;One of the reasons we&#8217;re here is that costs are low,&#8221; he said.Luxury car maker BMW will soon start production in India, while Volkswagen will begin making sub-compact models from 2009. Its premium Audi unit is also starting production, while Italy&#8217;s Fiat, partnering Tata, will rejig its Palio and launch the Grande Punto and Linea sedans.

&#8220;On its own Renault could have struggled to get its brand known, but with the Mahindra co-branding, it&#8217;s taken care of,&#8221; said Ashutosh Goel, an analyst at Edelweiss Securities.

Renault and Mahindra, which previously partnered Ford in India, had planned to make 50,000 Logans at a Mahindra plant, but then Nissan Motor Co Ltd.Renault&#8217;s global partner, said it would join the venture to spend $905 million in a project to make 400,000 cars in seven years&#8217; time.

Nissan, which has so far only imported X-Trail sports utility vehicles into India, is keen to get into the compact segment.&#8220;The Logan&#8217;s success really depends on the pricing because at that level, the consumer is very price-sensitive,&#8221; said Chandraprakash Padiyar, who manages $23 million in UTI Auto Fund.

Intended for emerging markets, such as China, India and Russia, the Logan concept has quickly become a hit even in mature European markets, inspiring other automakers such as Volkswagen, Fiat and Toyota.

The News.
http://thenews.jang.com.pk/daily_detail.asp?id=48646


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## Janbaz

Man Indian automotive sector has been getting hotter and hotter! Renault and GM now, before that Hyundai in the mix of economic chit chat. A definate sign of expanding economy when the auto sector expands and moves on and on!


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## Contrarian

*'Chinese market more complex than India'*
[ 28 Mar, 2007 1015hrs ISTIANS ]
RSS Feeds| SMS NEWS to 8888 for latest updates

NEW DELHI: With a growing middle class and increasing propensity to spend on goods and services, India offers a more conducive market than China, says Danielle Duran, international trade coordinator for New Mexico state in the United States.

"China looks like a complex economy to tackle and they are very large. India is much more logical with booming new businesses and a growing middle class," Duran said.

Duran is heading a delegation of small and medium enterprises (SMEs) from the US to push bilateral trade and investment under the aegis of the US-India Political Action Committee (USINPAC), a political advocacy group for the Indian American community.

According to Duran, whose delegation comprises five members representing areas like aviation and technology, SMEs in India are growing like never before with a more aggressive outlook and competitive edge than other emerging economies in Asia.

"The SME scene here is very exciting. People are good at business and realistic about the marketplace," she said, adding that her delegation will explore investment opportunities in India.

"We are also looking at faculty exchange options as we are also promoting New Mexico as a preferred destination for higher studies," Duran said.

These measures, according to her, will help in creating a longer relationship with India.

During her visit, Duran met senior government officials in the directorate general of civil aviation, department of biotechnology and as representatives of some big IT companies such as Tata Consultancy, Wipro and HCL.

The delegation will also visit cities like Mumbai, Bangalore and Chennai to explore the possibilities of promoting SME trade in diverse fields.

"We are also speaking with the Film Producers Guild of India for choosing New Mexico for shooting films there," said Duran, who has previously worked in Japan, Israel, Germany and Britain.

According to her, four-five SMEs in optics and water-related technologies from New Mexico will visit India soon to study the Indian market. Some companies are also eyeing at investing in India's special economic zones, she added.


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## Contrarian

*CMC likely to merge with TCS*


MUMBAI: The Tata group's stated ambition of making a global powerhouse out of Tata Consultancy Services (TCS) is set to get another shot in the arm. CMC, the IT company that the Tatas got control of when the government kicked off a divestment drive six years ago, is ready to be merged with TCS.

This move is in line with the group's policy of merging smaller group companies in the same line of business with the flagship.

Over the last couple of years, group companies like Airlines Financial Services, Airlines Software Development Consultancy India, Phoenix Global Services and Tata Infotech were merged into TCS. CMC, industry sources say, is next. Subsequent to this, sources add, the group will have to consider merging Tata Elxsi into TCS.

On Dalal Street, market players reckon that when the merger happens, the swap ratio will be 1.5 shares of TCS (at a face value of Re 1) for every one share of CMC (with a face value of Rs 10). This, analysts point out, is the reason why in spite of a carnage on the stock markets in recent times, CMC is up nearly 19%.

On Monday, CMC was trading at Rs 1,273. As against this, when the market started sliding on February 7, the stock was available at Rs 1,073. During the same period, TCS lost 3.5% and is now at Rs 1,261.

When contacted, S Mahalingam, CFO, TCS, said there are no plans on the table to merge CMC and TCS.

"We are very happy with the current shareholding pattern and operational synergies between the two companies," he added.

On the operational front, TCS and CMC have been working at achieving synergies. CMC has strong expertise in
infrastructure management services and good presence in the domestic market, especially in the e-governance segment.

Over the years, CMC has been reducing its dependence on the hardware maintenance business, which, once upon a time, it used to dominate.

Although the two companies exist as separate legal entities, there is a lot of integration in areas like finance, human resources, sales and marketing, services, R&D and products, sources said.
CMC became part of the Tata group in 2001 when the government divested 51% of its holding in the company in favour of TCS.

The residual government stake in the company was sold through a public offer in early 2004. At present, TCS holds about 51.1% stake in CMC.

On a comparative basis, for the year ended March 2006, TCS had earnmed a net profit of Rs 2,717 crore compared to CMC's Rs 44 crore. Last fiscal, while TCS had a turnover of Rs Rs 11,283 crore, that of CMC was Rs 858 crore.

In an unrelated development, the Tatas on Tuesday sold its 50% stake in Sitel India, a voice-based business process outsourcing company, to its US-based joint-venture partner Sitel Corporation for $22 million. TCS was holding 40% and Tata International had a 10% stake in Sitel India, which currently has about 4,000 employees, with offices in Mumbai, Hyderabad, Chennai and Gurgaon.


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## Contrarian

*Below secondary level bags maximum jobs*
[ 28 Mar, 2007 0058hrs ISTTIMES NEWS NETWORK ]
RSS Feeds| SMS NEWS to 8888 for latest updates

NEW DELHI: Higher employment rate in the economy is not just benefiting the MBAs and those with fancy professional degrees but also those with less than secondary school qualifications.

In fact, those who have studied till middle school seem to be the biggest gainers from the growth in employment, cornering nearly 42% of the 70 million jobs that came up between 1999-2000 and 2004. This translates into over 29 million new jobs during the five-year period.

Next in line are those who have completed primary school, bagging over a quarter or 18 million new jobs that were up for grabs.

While their educational qualifications would have made them eligible only for blue collar jobs in factories, these two segments also fared well in the services sector. Given the high skill levels required for IT, telecom and financial services, those without secondary degrees got nearly 70% of the new jobs in the manufacturing sector, compared with 45.6% in service sector companies.

The analysis by the Asian Development Bank, based on the numbers in the latest National Sample Survey Organisation report on employment, show that those with post-secondary qualifications have bagged 17.4% of the new jobs.

While the NSSO report revealed that employment growth rate picked up from 1% between 1993-94 and 1999-2000 to 2.8% during 1999-2000 to 2004, it was industrial sector which saw the steepest increase (5.8%), followed by services (3.9%) and agriculture (1.5%). The NSSO report also pointed out that there was a 4.3% rise in the number of self-employed, while the number of those employed in regular jobs rose 3.6%. The real good news was a 0.1% decrease in the population doing casual labour.

The ADB study revealed that 74% of the new jobs that came up in the manufacturing sector between 1999-2000 and 2004 were in textile and garments units, or factories manufacturing non-metallic mineral, wood products.


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## Contrarian

*ADB slams India's SEZ policy for tax concessions*
[ 28 Mar, 2007 0057hrs ISTTIMES NEWS NETWORK ]
RSS Feeds| SMS NEWS to 8888 for latest updates

NEW DELHI: First it was IMF, now it's Asian Development Bank that has criticised the government's policy on special economic zones.

While a bulk of ADB's criticism in the Asian Development Outlook 2007 is centered around the slew of tax concessions that have been offered, it has said that the landless, which are the biggest opponents of the over 700-odd zones that are planned, could be the worst hit since they may not receive adequate compensation and would not have the resources to be self-employed.

The multilateral funding agency has questioned the need for providing fiscal sops saying that with companies already eager to invest, providing enclaves that meet these needs might be enough to stimulate investment.

Besides, the cost to the exchequer in the form of loss of potential revenue, estimated at over Rs 100,000 crore by the finance ministry, come at a time when the government is struggling to find resources to finance infrastructure projects in India. The report said that tax exemptions always run the risk of creating loopholes for tax evasion.

"Subsidies can undermine both investment and existing firms located outside the SEZs," it said since companies in located outside the SEZs not only have to deal with poor infrastructure but higher tax rates as well.

So far, government has cleared 237 zones, while another 160-odd are awaiting final clearance and companies have submitted proposals to set up another 300-plus SEZs. But all pending proposals are on hold following concerns of displacement of farmers.

The report has pointed out that the tension over displacement could be dealt with if compensation package was adequate and affected people can be retrained to qualify for jobs in the zones. It suggested that government needs to invest in infrastructure.


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## Contrarian

*IOC plans to buy Turkish petrochem co*


NEW DELHI: Flagship refiner-marketer IndianOil Corporation is putting in the pipeline India's presence in a crucial energy corridor between Central and North Asia and the consumption centres in the West. The state-owned entity has submitted an expression of interest for acquiring the Turkish government-run chemicals maker Petkim Petrokimya and back it up with a $6 billion refinery on the Mediterranean coast.

"The Turkish government is disinvesting 53-54% in Petkim. We have put in an EoI (expression of interest). Bids will close on June 15. I would like to believe IndianOil will bid jointly with the Calik group with whom we have a strategic partnership," said B M Bansal, the man incharge of finding new businesses for IndianOil.

A majority stake in Petkim could be worth half a billion dollars, though Bansal declined to put any figure. "We have to do due diligence and take a call." He believes acquiring Petkim will open the gates for other businesses in Turkey. "Petkim is the only petrochem maker in Turkey, which depends on imports for meeting three-quarters of its needs. The proposed refinery will feed raw material to Petkim. Once the synergy is there, we can look at retailing."

Bansal said the plan is to build a refinery with an annual capacity of 15 million tonnes at Ceyhan on the Mediterranean Sea. He expects the plant to be ready by 2012. IndianOil will hold 51% in the refinery and is looking at a partner which has access to oilfields in the Central Asian region or Russia to feed the refinery. Here too, Bansal expects Calik to be a partner "but we will retain majority as we want to control operations".

Petkim and the refinery appears to be a growth strategy flowing out of IndianOil's 12.5% stake in the Trans-Anatolian Pipeline Company (TAPCO) which is laying an oil pipeline from Turkey's Black Sea port of Samsun to Ceyhan. TAPCO is now equally owned by Turkey's Calik Enerji and Italy's Eni which has an oilfield in Kazakhstan and is a partner in the Blue Stream pipeline project. The 550-km Samsun-Ceyhan pipeline will carry 1.5 million barrels of oil a day, or 70 million tonnes a year, when completed by 2009-10.

Ceyhan is emerging as a strategic oil export hub. It is seen as an upcoming energy supermarket with an annual capacity of 160 million tonnes. Three million barrels of oil is estimated to pass through the Turkish Straits by 2013. This will rise to four million barrels together with product export.

The Samsun pipeline provides a way to transport Russian and Kazakh oil to the Black Sea and on to the Mediterranean safely and economically. The project will ease environmental and safety pressures from increasing tanker traffic in the Bosporus and the Dardanelles.

The pipeline, however, has drawn frowns from Russia which is looking at a Burgaz-Dedeagac alternative. But Calik-ENI maintain that though Russian firms are welcome as partners, they will go ahead with the project even without them.


----------



## Contrarian

*India to drive Cisco's next-generation growth*
Mini Joseph Tejaswi
[ 28 Mar, 2007 0048hrs ISTTIMES NEWS NETWORK ]
RSS Feeds| SMS NEWS to 8888 for latest updates

BANGALORE: The next level global growth of $30 billion networking major Cisco Systems will be based out of India.

Cisco started its networking with India a decade ago. Being one of the top 10 revenue contributors &#8212; among 110 geographies &#8212; of Cisco's global operations, it is the globalisation centre for all Cisco functions.

Currently, the company is busy preparing ground to spearhead an exponential growth from India. "It's clear that the next wave of our growth is going to be controlled by India. India is so crucial for us, that we are moving 20% of our global leadership here by 2010. Growing at a CAGR of 30%, we also have a target to double our revenue in India by that time," said Jangoo Dalal, president & country manager (India, SAARC), Cisco.

Cisco is gearing up to play a vital role in shaping the future of world-wide phenomenon, the internet. "The next big waves of change for internet are video-on-demand, IPTV and downloads. The volume of data on the net is going to grow from mega, giga, to hexabyte in the next three to five years. This will change the fundamentals of technology and networking, which in turn will revolunalise the internet. We are all set to play a crucial role in this shift."

According to Dalal, most of the internet applications and content, in the future, will be individual-driven rather than enterprise-centric. "Shared movies, pixs, art forms, videos, files, music, other content, blog sites all will soon be huge and happening. Virtually, the content on internet is going to be controlled by individuals, professionals, students, housewives and children."

Cisco will design and develop technology and solutions to support such explosive growth of the internet. "We are investing heavily in R&D to make the network more intelligent. We are focusing on high-definition tele-technology that virtually cuts distances between enterprises, geographies and people." Already everything that moves on the internet somewhere touches a Cisco box. Cisco has increased its focus on R&D in India. Globally, it spends 10% to 15% of its annual turnover on R&D.

Small and medium businesses will be crucial for Cisco's India business. The company is currently in the process of training its eight channel partners and 1,500 resellers across the country in order to expand its non-metro presence. "It's tough for us to grow market share in a country where we already have over 80% of it. So, our focus is to grow the market. We see a great traction in rural India. The target is to grow our non-metro market share from current 15% to 25% in the next couple of years."

Cisco will focus on multiple business domains including banking, finance, insurance, government, SMB, telecom, manufacturing, retail and services. "We are creating an organised real estate vertical as we see great opportunities emerging from special economic zones. We are putting a team together, talking to customers and thought leaders," added Dalal.


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## Contrarian

*Nippon Steel, Tata in talks for joint production*
[ 27 Mar, 2007 2349hrs ISTPTI ]
RSS Feeds| SMS NEWS to 8888 for latest updates

NEW DELHI: Fresh with its takeover of Anglo-Dutch giant Corus, Tata Steel has now started talks with world's second-largest steelmaker Nippon of Japan for jointly producing the alloy for automakers and other companies.

"We are in talks with Nippon Steel for joint production of steel to meet rising demand from automotive sector," a Tata Steel spokesperson said. The two firms are in the process of finalising the details of the venture, he added. Nippon also confirmed the discussions in a statement, but gave no details about the venture.

Japanese media reports said the companies are likely to spend about $423 million (about Rs 2,000 crore) to make thin-sheet steel mainly used in automotive bodies at a jointly built plant using Nippon's technology.

The plant would be able to produce about one million metric tons of steel a year, Nikkei English News said. The proposed facility would meet the demand from automakers, including Japanese companies like Suzuki Motor, Toyota and Honda, in India where many of these firms have set up manufacturing units to tap the growing middle class.

Tata-Nippon cooperation follows Tatas' $12 billion acquisition of Corus Group, catapulting the combined entity to the fifth spot in global steel ranking with a total production capacity of 24 million tonnes annually.

In a statement, Nippon Steel said it was considering carrying out studies while monitoring (steel) demand and other situations in the sub-continent.

The Nikkei reported Nippon and Tata are expected to begin a feasibility study soon to decide on a new plant's location, size and construction start date. They are likely to spend around $423 million to kick off supplies of steel sheets to Japanese and other automakers in India by 2010, the paper said.

The company's move signifies the importance of India as a growing steel market and that Japanese steelmakers were keen to gain access to its fast-growing market, using their technological prowess to roll out high-grade steel products.

A media report said Nippon Steel president Akio Mimura and Tata Steel MD B Muthuraman met recently to discuss various issues. Nippon has a sheet steel joint venture with Baoshan Iron & Steel Company in neighbouring China and in Brazil, it has partnered with Usiminas.


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## Contrarian

*Parryware Roca plans Rs 750 crore investment*
[ 27 Mar, 2007 2345hrs ISTAGENCIES ]
RSS Feeds| SMS NEWS to 8888 for latest updates

NEW DELHI: Parryware Roca, a JV of Murugappa Group and global leader in sanitary ware Roca, on Tuesday said it plans to invest about 130 million euros (Rs 750 crore) in two years for acquisitions and expansion in India.

"Every year we will invest about 12-15 million euros for both marketing activities and scaling up manufacturing," Parryware Roca chairman A Vellayan said. He said considering the history of the parent companies of the joint venture, acquisitions in the Indian market was very much on the agenda.

"For the next two years, our acquisition budget for the Indian market is about 100 million euros. We are on the look out for brands here," Domingo Colomo Prados, Roca Corp Empresarial senior MD of executive board, said. The JV is looking out for both regional and national brands, which can add value to its portfolio.

Parryware Roca launched its first range of products in the premium segment of the bathroom and sanitary ware solutions priced at Rs 1.5 lakh onwards. The company is eyeing 10% market share of the Rs 100 crore organised top-end segment in the next two years. Vellayan said the 50:50 JV expects to have 20 showroom for the Roca products in India this year, which will be scaled up to 30 next year.

"In the next one year we expect to start manufacturing Roca products in India from our facilities in Alwar and Perundurai," he said.


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## Neo

*Indian bank plans branches in Pakistan *

NEW DELHI (March 28 2007): India's second largest public sector lender, Punjab National Bank, said it plans to open branches in Pakistan. "We already have got approval from our board for opening branches in Pakistan and applied to Reserve Bank for regulatory approvals."

Punjab National Bank CMD S C Gupta told reporters after inaugurating an ATM center at Birla Mandir here, says Press Trust of India. Once RBI gives regulatory approvals, the bank would approach Pakistani authorities for the approvals, he said. When asked about the cities where PNB intends to have presence, Gupta said the bank is interested in opening a branch in Karachi and another in Lahore.

Karachi is preferred for business reasons while Lahore for historical reason, he said, adding but so far nothing concrete has happened on this front. Opening up of branches in the neighbouring country would promote goodwill and cement our relationship, he said.

The city-based bank had 23 branches in Pakistan before partition. On dilution of government stake, Gupta said the Board has approved dilution of government's stake in the bank by 6.8 percent to 51 percent. Presently, the government holding in the bank stands at 57.8 percent, he said, adding as and when there would be need for capital the bank would decide about it.

The Capital Adequacy Ratio of the bank as on December 2006 stood at 12.9 percent and there is no immediate need to raise further capital at this point of time, he said. The bank is yet to decide about the means through which government's stake would be reduced, as it can either go in for follow on offer or the QIP route, he added.

http://www.brecorder.com/index.php?id=543925&currPageNo=2&query=&search=&term=&supDate=


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## Contrarian

*FIPB to take a call on Vodafone today*
[ 29 Mar, 2007 0105hrs ISTTIMES NEWS NETWORK ]
RSS Feeds| SMS NEWS to 8888 for latest updates

NEW DELHI: A day before the crucial FIPB meeting, which is slated to take up Vodafone's proposal to buy Hutchison Telecom International Ltd's (HTIL) stake in Hutch Essar, the British company's brass made their rounds of ministries to impress upon the government that the shareholding pattern did not breach the mandated 74% FDI cap.

Vodafone's director for external affairs Matthew Kirk met telecom secretary D S Mathur and some of the other members of the FIPB, which is an inter-ministerial panel headed by finance secretary A K Jha. An agency report said that Kirk's meeting with Mathur centred around licensing issues.

Kirk along with representatives from Hutch Essar will make presentations before the FIPB on Thursday evening to provide the panel with the point of view of companies on why the holding structure is as per government stipulations.

RBI, which had been consulted by FIPB, has raised apprehensions about the shareholding pattern and following its report, the inter-ministerial panel last week decided to give the companies a chance to present their case before taking a decision on Vodafone's application which was submitted on February 20.

The controversy revolves around the 15% stake held by Hutch Essar CEO Asim Ghosh, Max India's Analjit Singh and IDFC through a special purpose vehicle. Besides, the Ruias of Essar, who hold a 33% stake in the Indian joint venture, have 22% shareholding through foreign arms.

The remaining 52% stake is held by HTIL, which is being acquired by Vodafone, that has put an enterprise value of $18.1 billion on Hutch Essar. With the 15% shares held through the SPV, Vodafone will acquire 67% economic interest in the Indian company.

HTIL shares fell 4.4% to a five-month low of HK$14.76 on the Hong Kong Stock Exchange on concerns that the deal may be delayed.


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## Contrarian

*Infineon to set up $4b chip plant with HSMC*


NEW DELHI: The world's fourth largest chipmaker Infineon Technologies AG has tied up with Hindustan Semiconductor Manufacturing Corporation (HSMC), promoted by a group of non-resident Indians, to set up chip making facilities plant at an investment of over $4 billion.

While the German company will not have any equity interest in the project, with its role limited to providing technology, the promoters are yet to tie up funds. Even the location is yet to be worked out.

The facility will ship chips to be used in mobile phones, SIM cards, automotive products, smart cards, set top boxes and cable TV products in the Indian market.

The fabrication unit, which will come complete with a chip design centre, foundry, testing facility and equipment suppliers, is expected to start production in around two years time.

"The first fab will require an investment of $1 billion and will produce chips on 8 inch wafers. The second one will be far more advanced... 12 inch wafer requiring an investment of $3.2-3.5 billion," HSMC and Infineon said.

Wednesday's announcement was the first since the policy to promote investment in semiconductor facilities was announced recently.

For units in special economic zones (SEZs), the government will give incentives equal to 20% of the capital expenditure during the first 10 years of the project. The incentive will be equal to 25% of capital expenditure for units in other areas.

Even before the policy, SemIndia, another NRI-promoted company, tied up with AMD to set up a fabrication facility in Andhra Pradesh. A host of others, including Intel, have in the past evinced interest in setting up chipmaking or testing units in India but no one else has come forward.

Unlike in the past SEZs being the most recent example everyone is not going to get the benefits with the government deciding to restrict the sops to only three players. And who the three players would be is to be decided by a panel that will scrutinise the proposals.

Rush to set up units comes from projected jump in demand from $3 billion in 2006 to $36 billion by 2015 riding a boom in electronic goods. While India is turning into a hub for chip design centres no manufacturing takes place at present.
http://timesofindia.indiatimes.com/..._chip_plant_with_HSMC/articleshow/1825487.cms


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## Neo

*India outpaces Pakistan in boosting cotton yield *

By Mansoor Ahmad

LAHORE: India, using hi-tech cotton research, has increased its cotton production by more than 200 kg per hectare since 1991 while Pakistan during this period could be able to raise cotton production by 54 kg per hectare.

Cotton is the only crop where Pakistan enjoys huge productivity advantage over India. The International Cotton Advisory Committee, in its data, reveals that in 1991 average per hectare yield of cotton in India was 267 kg compared to 615 kg in Pakistan. In 2006, per hectare production of India shot up to 470 kg while Pakistan boosted the yield to 679 kg. This shows that India is rapidly narrowing the production gap with Pakistan.

Presentations made by various cotton research institutes of Pakistan to the spinners and farmers reveal that the main thrust of these institutes is still on developing normal pest-resistant varieties that after a few sowings become vulnerable to pest attack, which can destroy a sizable chunk of the crop.

The data provided by Pakistani scientists reveals that after India Pakistan has the lowest per hectare yield of cotton. Pakistan obtains 679 kg of cotton lint per hectare compared to 1,864 kg in Australia, 1,571 kg in Syria, 1,312 kg in Mexico and 1,289 kg in Turkey.

Cotton crop in Pakistan is cultivated by using normal seeds and biotech cotton has not yet been introduced in the country. India has an area of 3.8 million hectares cultivated with BT cotton.

Indian farmers, according to Dr Yusuf Zafar of PAEC Faisalabad, have additionally benefited to the tune of $463 million by growing biotech cotton as its yield has increased by 46 per cent in the last five years. He said that Pakistan was still in the process of awarding regulatory approval for sowing BT cotton.

However, most of the cotton-growing countries have shifted 30 to 40 per cent of the crop to BT cotton.

The condition of soil in Pakistan is far from satisfactory as it has an adverse impact on all crops including cotton. Director Cotton Research Institute Multan Muhammad Arshad said most of the soil in the country was affected by saline. Shortage of irrigation water leads to more sowing on saline soils while 70 per cent of underground water is marginally fit for irrigation purpose. To tackle the situation, he called for immediate corrective steps to improve the quality of soil.

Cotton scientists and researchers have given a detailed analysis of the current cotton crop situation and its future prospects, saying the local industry would need 20 million bales of cotton by 2020.

There are 10 cotton research institutes and sub-stations operating in Punjab. Except for one or two, most are still conducting research to develop normal seed varieties for cotton.

Comparing cotton yields of different provinces, it becomes evident that cotton yield in Punjab is lower than that of Sindh. In 2006-07, Sindh increased its yield to 895 kg per hectare while Punjab could obtain 689 kg.

As far as research is concerned, the activity to develop normal disease-resistant cotton varieties seems to be very slow as since the year 2000 only three new seed varieties have been released by researchers for cultivation.

In 2006-07, cotton has been sown over 2.951 million acres against the target of 3.25 million acres. Total production is estimated at 12.41 million bales against earlier projection of over 13 million bales.

Despite current gloomy situation, the researchers expect Punjab will produce 16 million bales of cotton by 2014 and its yield will increase from 22 maunds per acre to 33 maunds.

Pakistan made rapid gains in cotton production from 1947 to 1991 during which output increased four times from 160 kg per hectare to 615 kg. After that, the increase in production has been painfully slow.

http://www.thenews.com.pk/daily_detail.asp?id=48781


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## Neo

*Satyam Computer wins contract from Applied Materials *

NEW DELHI: IndiaÃ¢â¬â¢s Satyam Computer Services said on Wednesday it has won a $200 million outsourcing contract from US semiconductor equipment maker Applied Materials Inc. 

Under the five-year contract, Satyam will provide services to develop software and maintain the information technology infrastructure of Santa Clara, California-based Applied Materials, the Indian company said in a statement.

Hyderabad-based Satyam Computer Services is IndiaÃ¢â¬â¢s fourth-largest software company.

A dedicated development center has been set up in Bangalore, IndiaÃ¢â¬â¢s technology hub, to execute the contract with Applied Materials, the statement said 

The statement quoted Ron Kifer, chief information officer of Applied Materials, as saying that the deal is expected to ÃÂ¬provide us with a very cost-effective solution for managing IT and business infrastructure processes and activities, as well as measurable service level and quality enhancements.ÃÂ®

US and European companies are increasingly shrinking or closing down their information technology departments to get these jobs done at a lower cost in countries like India a trend that is expected to drive the next boom in outsourcing. Earlier, companies outsourced mostly call center services and back-office work like accounting and billing.

http://www.thenews.com.pk/daily_detail.asp?id=48798


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## Contrarian

BT cotton has a WHOLE LOT of problems associated with it. There is problem wrt it in India.


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## Neo

Please elaborate.  
Thanks!


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## Neo

Thursday, 29 March 2007 

*BMW unveils India assembly plant *  
By Jorn Madslien 
Business reporter, BBC News, Chennai, India 

BMW has invested 20m euros in India.

German carmaker BMW has unveiled its first assembly plant in Chennai, India's fourth largest city. 

Local assembly of the 3-series and 5-series should help BMW avoid a 60% import duty and other taxes that make cars shipped from abroad prohibitively expensive. 

Even so, BMW expects to remain a niche high-end player in a market dominated by small cars produced by local companies such as Maruti, Tata and Mahindra & Mahindra. 

"When it comes to firm orders with down-payments, we have a couple of hundred," said Peter Kronschnabel, president of BMW India. 

Mercedes, BMW's main rival in India and the absolute leader in the luxury segment, has been assembling cars in India since 1993 and currently sells about 2,000 cars per year. 

*Massive potential *



> If we have the customers, we can produce 10,000 cars at this plant, no problem
> 
> Frank-Peter Arndt, BMW



The luxury segment is puny in India, accounting for no more than 0.03% of the market. 

Nevertheless, high-end carmakers see it as crucial to build a presence here due to the market's anticipated growth. 

In 2000, only five in every 1,000 Indians owned a car; by 2010, the number is expected to have risen to 11 per 1,000. By 2010 there could be 13 million cars on India's already crowded roads, up from just 5 million in 2000. 

"We want to benefit from this growth potential, but we also want to make an active contribution to this growth," said Norbert Reithofer, chairman of BMW's board of management. 

"Our plant here in Chennai is a clear commitment to India as a business location," said Mr Reithofer. 

"Chennai has a developed infrastructure and it benefits from having parts suppliers nearby," added Frank-Peter Arndt, BMW board member in charge of production. 

*Cautious start *

Most of the parts will be shipped in.

Initially, BMW has invested 20m euros in its Chennai plant and BMW India's headquarters in Gurgaon outside Delhi, creating 600 jobs directly and a further 600 indirectly through its service and dealer network. 

Almost all the parts will be shipped in, including the engine and body, although seats for the 3-series and door panels for the 5-series will be produced locally. 

It aims to assemble 1,700 cars per year at the plant in the medium term, though this could rise if demand grows, said Mr Arndt. 

"If we have the customers, we can produce 10,000 cars at this plant, no problem," he said. 

http://news.bbc.co.uk/2/hi/business/6505987.stm


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## Neo

Sunday, April 01, 2007 

*IndiaÃ¢â¬â¢s Tata Power Company in $1.3 billion Bumi coal deal*

MUMBAI/JAKARTA: IndiaÃ¢â¬â¢s Tata Power Co on Saturday came closer to securing long-term fuel supplies to produce cheap power by signing a $1.3 billion deal to buy stakes in Indonesian PT Bumi Resources TbkÃ¢â¬â¢s two coal mines. 

Tata Power and Bumi Resources said the Indian firm had agreed to buy 30 percent stakes in BumiÃ¢â¬â¢s PT Kaltim Prima Coal and PT Arutmin Indonesia, two of IndonesiaÃ¢â¬â¢s largest coal mines, and a related trading company. 

Ã¢â¬ÅThese particular assets were truly world-class ... not just for the coal mines themselves, but because of the infrastructure they have for shipping,Ã¢â¬Â Prasad Menon, Tata PowerÃ¢â¬â¢s managing director told Reuters. 

Ã¢â¬ÅCoal is still by far the cheapest option and India has to depend on coal, both Indian and imported,Ã¢â¬Â he said. 

The two coal mines produced 53.5 million tonnes of coal per year in 2006. 

Tata Power said it will also buy 10 million tonnes of coal from Kaltim Prima Coal for two proposed power projects with a capacity to generate a total of 7,000 megawatts (MW). The plants will be built on the west coast of India over next five years. 

Ã¢â¬ÅWe know that coal production at these mines can and will be jacked up considerably in the near future to anything by 20-25 million tonnes, frankly thatÃ¢â¬â¢s what attracted us as such assets are very, very difficult to come by,Ã¢â¬Â Menon said. 

Tata Power part of IndiaÃ¢â¬â¢s salt-to-software Tata Group generates 2,300 MW and has been eyeing coal reserves in Australia, Indonesia and South Africa to tie up supplies for its proposed 15,000-MW capacity expansion plan. 

Tata Power needs about 21 million tonnes of imported coal, 50 percent of which will be addressed through this deal, S Ramakrishnan, the companyÃ¢â¬â¢s executive director for finance, said. Coal dominates Indian energy needs with a nearly 41 percent share. 

Indian firms from steel to energy are looking overseas to tap new markets and buy brands, production and technology, spurred by strong earnings in an economy growing at 9 percent a year, easy credit and fewer regulatory hurdles. In January, Tata PowerÃ¢â¬â¢s associate firm Tata Steel paid a record-breaking $12 billion to acquire Anglo-Dutch producer Corus Group. 

Chequered record: Last year Bumi failed to sell stakes in the two mines to a local investment bank Renaissance Capital for $3.2 billion after heavy rain affected performance of one of the mines up for sale. But Ramakrishnan said: Ã¢â¬ÅOur due diligence has not revealed any such concerns.Ã¢â¬Â Tata Power has three months to complete the transaction. 

Tata Power, which owns hydro-electric stations, prefers coal over natural gas as it helps to produce cheaper electricity. Ramakrishnan said the deal would be funded through a combination of debt and internal accruals. 

Analysts surveyed by Reuters Estimates expect Tata PowerÃ¢â¬â¢s net profit for the full year to March 31, 2007 to drop nearly 6 percent to 5.76 billion rupees from a year ago. 

Ramakrishnan declined to comment on the forecast but said the deal would not be a drain on the companyÃ¢â¬â¢s balance sheet. Ã¢â¬ÅIt minimizes our risk as far as coal procurement for the big projects goes,Ã¢â¬Â he said. 

http://www.dailytimes.com.pk/default.asp?page=2007\04\01\story_1-4-2007_pg5_26


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## Janbaz

*Delay for Vodafone's India deal*

Indian regulators have delayed their decision on whether to clear Vodafone's $11.1bn (ÃÂ£5.7bn) deal to take a controlling stake in Hutchison Essar. 
They have asked for more time to ensure the move will not put too much of Hutchison into foreign hands, contravening Indian investment rules. 

However, Vodafone said it was confident it would satisfy the requirements and could complete the deal. 

Chief executive Arun Sarin said that approval was only weeks away. 

Vodafone is buying a 67% stake in the firm. 

India's Foreign Investment Promotion Board was examining if the shareholding structure broke regulations allowing foreign ownership of up to 74% in a domestic telecoms firm. 

BBC News.
http://news.bbc.co.uk/2/hi/business/6509699.stm


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## Janbaz

*What next for Indian interest rates?* 

Indian stocks ended over 600 points down, nearly 5%, on Monday following fears that Asia's fourth largest economy may begin to slow down. 

This comes after the country's central bank, the Reserve Bank of India, raised key interest rates in an effort to lower inflation which is at a two-year high. 

Monday's stock market fall was one of the sharpest in recent months. 


Investors are nervous about the future earnings of Indian corporates in an environment where rising interest rates means the money supply will be tight and credit will be more expensive. 

The biggest losers were bank stocks as investors felt that interest rate increases would impact credit growth and the banks' profitability. 

Automobile, housing and property company stocks also fell. 

While the central bank's decision to raise interest rates is aimed at reining in the 6.5% inflation rate and prevent the economy, which grew at a scorching 9.2 % last year, from overheating, analysts fear that the move could eventually result in the economy slowing down. 

*Government calm* 

According to Sushil Choksey , a Mumbai-based stock broker, the unexpected rate hike nearly a month before a scheduled review was due on 24 April, has come as a "negative surprise to the markets which are likely to decline further before finding stability at lower levels". 

What is further worrying market analysts is that nobody seems to be sure whether interest rates have topped out for the moment or the central bank might announce another increase after a few weeks if inflation is not showing signs of coming under control. 

While stock market analysts may be nervous, the government is not too perturbed. 

After being a supporter of benign interest rates for the last couple of years, Finance Minister P Chidambaram, is now supporting the central bank's interest rates decision. 

Until now he had strongly advocated a lower interest rate to help accelerate economic growth which would, so the argument goes, have a trickle down effect and reduce poverty. 


*Election factor *

Some analysts believe that the governing Congress party and the finance minister are under pressure after the victory of opposition parties in two northern Indian states last month. 

Inflation and rising prices of essential goods had become a major poll issue in the current round of state elections. The finance minister is now keen to tame inflation at the earliest opportunity to ward off criticism that his monetary policies are responsible for the Congress party's election losses. 

The party is facing state elections again this month in Uttar Pradesh - the country's most populous and politically significant state. 

But some analysts see a silver lining in the interest rates going up at this juncture. 

A senior economist with ABN Amro bank, Gaurav Kapur, told the BBC that the central bank's move will "lead to a segregation between real and speculative demand for funds". 

This would prevent the economy from overheating and bring back a semblance of realism in the Indian markets. 

Many analysts think that, from a medium to long-term perspective, what would be more healthy for the Indian economy is a growth rate slightly lower than the current nine per cent - perhaps even down to 7.5-8% - with inflation down to about 5%, rather than the present 6.5 % inflation rate with an economy which is showing signs of overheating. 

BBC News.
http://news.bbc.co.uk/2/hi/south_asia/6518869.stm


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## Janbaz

*India&#8217;s trade deficit at $4.66bn* 

NEW DELHI: India&#8217;s trade deficit fell to $4.66 billion in February from $5.78 billion a month earlier, data showed on Monday, as lower global oil prices led to a drop in import costs. Robust growth in Asia&#8217;s fourth-largest economy had seen the deficit grow over the past few months. It stood at $5.68 billion in December 2006 and $6.20 billion in November. &#8220;The deficit has come down in February probably because of lower oil prices. The deficit would be below $60 billion for the entire year,&#8221; said Saumitra Chaudhuri, economist with domestic ratings agency ICRA. India imports more than 70 per cent of the oil it needs, and robust industrial growth has raised demand for fuel.

The deficit stood at $2.49 billion in February 2006. Global oil prices fell to around $58 a barrel in February on expectations of warmer weather in the United States. The trade deficit stood at $55.86 billion during the first 11 months of the fiscal year to March 2007, compared with $37.62 billion during the same period last year.

Exports rose 7.87 per cent in February from a year earlier to $9.7 billion, while imports were up 25.11 per cent to $14.36 billion compared with the same year-ago period. Oil imports accounted for $4.06 billion.

During April-February, exports grew by 19 per cent to $109.13 billion, while imports were up by 28 per cent at $164.99 billion. India is aiming for export growth of 22.3 per cent to $126 billion for the full year. 

The News.
http://thenews.jang.com.pk/daily_detail.asp?id=49402


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## Neo

*Tata Steel completes acquisition of Corus *

NEW DELHI: IndiaÃ¢â¬â¢s Tata Steel has completed its $11.3 billion (euro 8.5 billion) acquisition of European steel maker Corus Group PLC, a takeover that makes the Indian company the worldÃ¢â¬â¢s fifth-largest steel producer.

The company has retained the top management of Corus, who will work with Tata officials to integrate operations of the two companies, Tata Steel said in a statement late on Monday.

Tata Steel was the winner of a January auction for Corus that was overseen by BritainÃ¢â¬â¢s takeover regulator. The Indian companyÃ¢â¬â¢s 608 pence ($11.74; euro8.96) per share bid edged out a final bid of 603 pence ($11.64; euro8.89) per share from Brazilian steelmaker Companhia Siderurgica Nacional, or CSN. 

It was biggest ever acquisition by an Indian company. Last month, Corus shareholders voted overwhelmingly in favour of the deal.

Tata Steel is part of the Tata Group, a sprawling conglomerate with interests spanning almost everything from salt to software.

The Tata-Corus combine will have the capacity to produce 27 million tons of steel in 2007 and employ 84,000 employees across 45 countries, the statement said.

"Together we are a well balanced company, strategically well placed to compete at the leading edge of a rapidly changing global steel industry," the statement quoted Group Chairman Ratan Tata as saying.

http://www.thenews.com.pk/daily_detail.asp?id=49514


----------



## Neo

April 05, 2007 
*Indian rupee near 8-year high against $*

NEW DELHI, April 4: The Indian rupee surged to a near eight-year high against the dollar on Wednesday as commercial banks sold the US currency to generate cash to meet new higher deposit requirements.

The Indian currency broke through the 43-rupee mark to end the day at 42.90 rupees against the dollar, firming from 43.10 rupees the previous day.

Earlier it hit an intraday peak of 42.84 rupees to the dollar, its highest level since June 1999.

The latest rise follows a move by India's central bank to tighten monetary policy again last Friday in a bid to combat inflation in Asia's fourth largest economy which is growing by around nine per cent.

The Reserve Bank of India (RBI), which has been in a tightening policy mode since late 2004, lifted its main short-term lending rate by 25 basis points to 7.75 per cent.

http://www.dawn.com/2007/04/05/ebr8.htm


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## Neo

Thursday, 5 April 2007

*India to see new economic zones * 

India's government has lifted a freeze on the acquisition of land to set up Special Economic Zones (SEZ). 
A temporary ban was imposed in January after widespread protests by farmers who sad they were not being properly compensated for lost farmland. 

Commerce Minister Kamal Nath, announcing the new plan, said land would no longer be acquired by state governments, but by developers. 

The idea of tax-free zones stems from China, as a way to promote trade. 

There will now be a limit of 5,000 hectares for each zone. 

The initiative has inspired huge interest among would-be developers but has also prompted resistance from rural communities. 

Recent government moves to clear land for a petrochemical centre in West Bengal led to conflicts killing 14. Other regions also saw protests. 

Farming in India is the mainstay of some two thirds of the population. 

On the other hand, increasing trade is deemed a way to encourage industrialisation and increase India's economic base. 

Venugopal Dhoot, president of the Associated Chambers of Commerce and Industry, said allowing more such economic areas "would accelerate economic activities for increased production and exports". 

The government said permission would be given for 83 SEZs. A further 162 such areas which already have preliminary permission would be looked into. 

Another potential 140 new zones would also be examined. 

Following the recent protests in the West Bengal's village of Nandigram and elsewhere, Commerce Minister Kamal Nath said no state could oblige farmers to sell their land. 

http://news.bbc.co.uk/2/hi/business/6531189.stm


----------



## Neo

*India mills to muscle into white sugar market *

NEW DELHI/LONDON: Indian sugar mills, bolstered by transport subsidies, will seize market share from Thai and Brazilian exporters in global refined sugar trade.

Indian refined (white) sugar sales will do best in regional markets, including Pakistan and Bangladesh, because soaring freight costs will make it harder for producers located further away to compete, analysts and dealers said on Thursday.

India removed a ban on sugar exports in January after forecasts of a big crop in the 2006/07 season. Indian authorities have since announced plans to subsidise exports, and analysts estimate the subsidies might be worth $30-35 per tonne.

But exporters face tough times as sugar prices have fallen in the face of a big global supply surplus.

Ã¢â¬ÅThere is no big market for Indian sugar now. There will be a bloodbath all around here,Ã¢â¬Â said GSC Rao, executive director of Simbhaoli Sugar.

An analyst with a Western trade house said India would win market share in areas such as south Asian and east Africa against sugars from Brazil and Thailand. Brazil might fare better in Mediterranean countries, while Thailand, AsiaÃ¢â¬â¢s biggest exporter, will compete strongly against India for sales to the key Indonesian market.

Thailand should also enjoy a freight advantage over Brazilin the Iraqi market, a destination for high-quality sugar.

Ã¢â¬ÅThe battle has already been decided by the freight rate,Ã¢â¬Â the trade house analyst said.

However, a senior Indian sugar industry official, who did not want to be identified, said: Ã¢â¬ÅThere definitely will be a problem with Brazil. Even with the freight advantage, their sugar will be cheaper than ours to neighbouring countries.Ã¢â¬Â

Ocean freight rates for dry commodities have surged on Chinese demand for raw materials and massive congestion at Australian ports.

At the end of March, Indian authorities announced plans to create a two million tonne sugar buffer, and also to give transport and freight incentives to mills to help sugar exports with the country heading for a bumper output.

According to the industry, India is set to produce more than25 million tonnes of sugar in the current 2006/07 season that ends in September, up 30 per cent from the previous year and higher than earlier estimates.

The government decision is believed to be awaiting clearance from the election commission due to elections in sugar-growing states like Uttar Pradesh.

Some analysts expressed doubts that the world market would have the capacity to absorb up to three million tonnes of Indian sugar exports projected by Indian industry officials for 2006/07.

http://www.thenews.com.pk/daily_detail.asp?id=49776


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## Neo

* IndiaÃ¢â¬â¢s oilmeal exports up *

NEW DELHI: IndiaÃ¢â¬â¢s annual oilmeal exports rose 17 per cent in the year to March 31, 2007, to 5.16 million tonnes, trade officials said on Thursday. The Solvent ExtractorsÃ¢â¬â¢ Association of India said soymeal exports during the period increased to 3.6 million tonnes from 3.4 million tonnes in 2005/06. Rapeseed meal exports during the period nearly doubled to 970,725 tonnes from 533,275 tonnes. The trade body said exports of oilmeal were a record in both quantity and value terms, generating revenues of Rs43 billion ($1 billion). The biggest buyer of IndiaÃ¢â¬â¢s oilmeal was Vietnam, which increased imports 41 per cent to 1.25 million over the year before, followed by South Korea at 1.15 million tonnes and Indonesia at 727,225 tonnes.

http://www.thenews.com.pk/daily_detail.asp?id=49792


----------



## Neo

* India inflation eases *

NEW DELHI: IndiaÃ¢â¬â¢s inflation rate eased slightly to 6.39 per cent, according to official data on Thursday, but remained far above the central bankÃ¢â¬â¢s tolerance level. The rate fell to 6.39 per cent for the week ended March 24 on the back of a fall in some food prices from 6.46 per cent where it had been stuck for the previous three weeks, figures showed. The rate stood at 4.06 per cent a year earlier. The central bank has been tightening monetary policy steadily since late 2004 to try to tame inflation in AsiaÃ¢â¬â¢s fourth-largest economy which has been growing by around nine per cent. The central bank said in its policy announcement that it was Ã¢â¬Åcritical to take demonstrable and determined action on an immediate basis.Ã¢â¬Â

http://www.thenews.com.pk/daily_detail.asp?id=49793


----------



## Neo

*India attracts universities from the US*

Somini Sengupta writes how India is fast becoming the hot bed for American universities

IT was an unusual university entrance interview. Late one recent evening here in steamy southern India, Vijay Muddana sat in a mercilessly air-conditioned room, leaning forward in his chair and talking to the wall. There, projected on a screen via videoconferencing equipment, were administrators from Carnegie Mellon University in Pittsburgh, where an early morning snowstorm had caused a power failure, delaying the interviews by an hour. The Indians found it funny that even in Pittsburgh, there were power failures.

Mr Muddana, 21, was among a dozen ambitious young Indians hoping to get a graduate degree in information technology offered jointly by Carnegie Mellon and a small private college here.

The exchange was one of the many ways in which American universities, eager to expand to markets abroad, are training their sights on India. Some 40 per cent of the population is under 18, and a scarcity of higher education opportunities is frequently cited as a potential hurdle to economic progress.

The American universities are just testing the waters, because the law here is still vague on how foreign educational institutions can operate. But that may soon change.

The Bush administrationÃ¢â¬â¢s envoy for public diplomacy, Karen P. Hughes, is visiting India with a half-dozen American university presidents to promote Brand America in Indian education. The United States wants an easing of rules under a draft law on foreign investment in Indian education, which is to be introduced in Parliament in April.

If the law is approved, foreign institutions would be exempt from strict rules that currently apply to all government-accredited universities in India on fees, staff salaries and curriculums. The government has already proposed setting up an expert committee to review the standards and reputation of foreign universities that want to establish independent campuses here.

The growing American interest in Indian education reflects a confluence of trends. It comes as American universities are trying to expand their global reach in general, and discovering IndiaÃ¢â¬â¢s economic rise in particular. It also reflects the need for India to close its gaping demand for higher education.

Among Indians ages 18 to 24, only seven per cent enter a university, according to the National Knowledge Commission, which advises the prime ministerÃ¢â¬â¢s office on higher education. To roughly double that percentage Ã¢â¬â effectively bringing it up to par with the rest of Asia Ã¢â¬â the commission recommends the creation of 1,500 colleges and universities over the next several years. IndiaÃ¢â¬â¢s public universities are often woefully underfinanced and strike-prone.

Indians are already voting with their feet: the commission estimates that 160,000 Indians are studying abroad, spending an estimated $4 billion a year. Indians and Chinese make up the largest number of foreign students in the United States.

Madeleine Green, vice president for international initiatives at the American Council on Education, calls India Ã¢â¬Åthe next frontierÃ¢â¬Â for American institutions, many of which have already set up base in China.

Ã¢â¬ÅThe pull factor is the interest of India and the opportunity that India now presents,Ã¢â¬Â she said. Ã¢â¬ÅThe push is from American institutions saying, Ã¢â¬ËThereÃ¢â¬â¢s a world out there and we need to discover it. ItÃ¢â¬â¢ll make our grads more competitive.Ã¢â¬â¢ ItÃ¢â¬â¢s part of their push to internationalise.Ã¢â¬Â

At the moment, however, instead of setting up satellite campuses as was done in China, Singapore or Qatar, most American institutions are opting to join hands with existing Indian institutions.

Columbia Business School, for instance, started a student exchange programme earlier this year with the Indian Institute of Management at Ahmedabad. The institutions teamed up to write case materials devised to teach American students about doing business in India.

Ã¢â¬ÅFor us itÃ¢â¬â¢s market access; for them itÃ¢â¬â¢s access to a bigger business school,Ã¢â¬Â said R. Glenn Hubbard, dean of Columbia Business School.

Columbia is the latest of several foreign business schools to tie up with the Ahmedabad campus, reflecting what its director, Bakul Dholakia, sees as a growing appetite to train future executives about India. Ã¢â¬ÅCompanies out there need managers now who have a unique Asian perspective,Ã¢â¬Â he said.

The Americanisation of Indian education is following a variety of approaches. Champlain College, based in Burlington, Vt, runs a satellite campus in Mumbai that offers degrees in one of three career-oriented subjects that college administrators have found to be attractive to Indians: business, hospitality industry management and software engineering. A 2005 study commissioned by the government found at least 131 foreign educational institutions operating in India at the time, a vast majority offering vocational courses. However, ChamplainÃ¢â¬â¢s degrees are not recognised by the Indian government, something that is still typical here. One government official who looks after private education estimated that at least 100,000 students graduated from entirely unaccredited private institutions. The study found that students did not consider unaccredited college degrees to be a hindrance to getting jobs in the private sector.

California State University, Long Beach, has agreed to help start American-style, four-year degree programmes at state-run Lucknow University in northern India. Its vice chancellor, R.P. Singh, said the California institution would help draft the curriculum and train faculty.

Cornell University, whose president is among the American university officials visiting India in recent months, is seeking to expand research collaborations, particularly in agriculture and public health.

Rice University envisions faculty and student exchanges, particularly in technology. Ã¢â¬ÅWhatÃ¢â¬â¢s in it for us is opportunities for our students, opportunities for our faculty in terms of research collaboration,Ã¢â¬Â said David Leebron, the university president, who was in India in February. Ã¢â¬ÅAt this stage we think we are best served by developing partnerships with Indian institutions.Ã¢â¬Â

For its part, Carnegie Mellon offers its degree in partnership with a small private institution here, the Shri Shiv Shankar Nadar College of Engineering. Most of the course work is done at relatively inexpensive rates here in India, followed by six months in Pittsburgh, at the end of which students graduate with a Carnegie Mellon degree.

The arrangement circumvents most of the usual Indian government restrictions. The curriculum is devised in partnership with Carnegie Mellon, and students are chosen jointly by faculty from both schools.

There are no affirmative action requirements for student admissions, as there are in accredited colleges. Fees are not regulated by the state. It is expensive by Indian standards, though nearly all of the students are subsidized by scholarships financed by Shiv Nadar, the collegeÃ¢â¬â¢s founder and chief executive of HCL Technologies, one of IndiaÃ¢â¬â¢s leading technology companies.

The applicants on the recent evening in Chennai were eager to please the gatekeepers from Pittsburgh. They addressed them politely with a series of Ã¢â¬Åyes, sirs.Ã¢â¬Â Asked what they could contribute to Carnegie Mellon, some of them became flummoxed. One young man said he wanted to develop software designed for the Ã¢â¬Åglobal citizen,Ã¢â¬Â by which he meant a way to transfer money across continents using a mobile phone.

Mr Muddana, who had a bachelorÃ¢â¬â¢s degree in information technology and had spent the past eight months as a software developer for an Indian firm, said he saw the programme as a cost-effective ticket to an American degree and a chance to work for a few years in the United States.

His father, he said, failed to grasp his ambitions. Why would he quit a secure, well-paying job to go back to school, his father wanted to know. Mr Muddana said his father taught at a government school in a rural district in neighbouring Andhra Pradesh State. He earns today roughly what his son makes fresh out of college. Mr Muddana said his father was bewildered by his dreams and by how much it would cost to get a masterÃ¢â¬â¢s degree.

Ã¢â¬ÅHeÃ¢â¬â¢s presently thinking only of the investment,Ã¢â¬Â Mr Muddana said, Ã¢â¬Ånot the

outcome.Ã¢â¬Â Ã¢â¬â Dawn/The New York Times

http://www.dawn.com/weekly/education/education3.htm


----------



## Contrarian

Neo said:


> April 05, 2007
> *Indian rupee near 8-year high against $*
> 
> NEW DELHI, April 4: The Indian rupee surged to a near eight-year high against the dollar on Wednesday as commercial banks sold the US currency to generate cash to meet new higher deposit requirements.
> 
> The Indian currency broke through the 43-rupee mark to end the day at 42.90 rupees against the dollar, firming from 43.10 rupees the previous day.
> 
> Earlier it hit an intraday peak of 42.84 rupees to the dollar, its highest level since June 1999.
> 
> The latest rise follows a move by India's central bank to tighten monetary policy again last Friday in a bid to combat inflation in Asia's fourth largest economy which is growing by around nine per cent.
> 
> The Reserve Bank of India (RBI), which has been in a tightening policy mode since late 2004, lifted its main short-term lending rate by 25 basis points to 7.75 per cent.
> 
> http://www.dawn.com/2007/04/05/ebr8.htm



Wow! Big and good news!
Helps in domestic market, is bad for exporters.


----------



## Neo

*India top offshoring destination: Report*
6 Apr, 2007 

MUMBAI: An unbeatable mix of low costs, deep technical and language skills, mature vendors and supportive government policies have taken India to the top among global destinations for offshoring services. And this is despite all the concern about overheating, wage inflation and service levels, a recent survey by AT Kearney said. 

In overall ranking, dominated by the developing countries from Asia, India is followed by China, Malaysia, Thailand and Brazil, the survey, christened Global Services Location Index 2007 said. 

To arrive at final ranking, AT Kearney surveyed over 50 countries for different aspects related to offshoring, like people skills, financial attractiveness and business environment. India maintains a wide, albeit slightly shrinking, lead over China, confirming what industry surveys and visiting executives have found, the survey said. 

While compensation costs in India have risen because of the recent high economic growth, "these cost escalations have been matched by corresponding increases in skill supply and quality indicators," the global consultancy major said. 

India's success is also prompting developing countries to replicate its model. While in Asia, two of its neighbours, Pakistan and Sri Lanka, have begun to recognise the potential of the export services sector, a host of Latin American countries too are taking the same route, the survey pointed out. 

Sri Lanka and Pakistan, which entered AT Kearney's latest index for the first time, offer many of the same advantages as India, with similar labour costs, widespread use of English, strong education systems and increasingly open and well-regulated business environments. 

However, both countries have only recently woken up to the enormous opportunity of the offshore services sector and therefore lack India's breadth and depth of experience. These two countries are also disadvantaged by their relatively smaller population-base and obvious concerns over internal security, the survey said. 

Although India ranks high overall, because of its skilled and technically superior pool of manpower, it suffers on the two other parameters - financial attractiveness and business environment rankings. 

In terms of people skills India ranks second, behind US (tier II cities) but ahead of China and Germany. As per business environment rankings, India is placed at 34th, while Singapore comes top, followed by Germany and UK. The survey said when it comes to cost effectiveness, Vietnam, with one of the lowest telecom costs in world, comes on top. 

http://timesofindia.indiatimes.com/...destination_Report/rssarticleshow/1862738.cms


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## Neo

Friday, April 06, 2007 

*Krishnapatnam port to invest $1.6b by 2011*

SINGAPORE: Krishnapatnam Port Co, a family-owned start-up on IndiaÃ¢â¬â¢s east coast, will invest $1.6 billion in a new container and bulk port to profit from the growing trade between AsiaÃ¢â¬â¢s economic giants China and India. 

The port, close to the sea trade lanes linking Asia to the Persian Gulf and Europe, is due to open for container ships in June 2008 and will be completed by 2011. 

It will have an initial annual capacity of 1 million twenty-foot containers, Mahesh Goel, the head of Krishnapatnam Port CompanyÃ¢â¬â¢s container business, told Reuters in an interview. 

Singapore, the worldÃ¢â¬â¢s busiest port, moved nearly 24 million boxes at its terminals last year, while IndiaÃ¢â¬â¢s biggest port, Mumbai, handles around 2 million twenty-foot containers a year. 

Ã¢â¬ÅWe are also looking into opening two more ports on IndiaÃ¢â¬â¢s east coast and one on the west coast,Ã¢â¬Â he said but declined to give details because the projects are still at an early stage. 

Krishnapatnam Port Co is owned by Hyderabad-based businessman CV Rao and his sons. The family also owns the Navayuga Group, a holding company with interests in marine construction and information technology.

http://www.dailytimes.com.pk/default.asp?page=2007\04\06\story_6-4-2007_pg5_20


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## Neo

*India's successful high-tech world needs more workers *

By Tim Sullivan, Associated Press

MYSORE, India Ã¢â¬â At the heart of the sprawling corporate campus, in a hilltop building overlooking the immaculately shorn lawns, the sports fields and the hypermodern theater complex, young engineers crowd into a classroom.
They are India's best and brightest, with stellar grades that launched them into a high-tech industry growing at more than 25% annually.

And their topic of the day? Basic telephone skills.

"Hello?" one young man says nervously, holding his hand to his ear like a phone. "Hello? I'd like to leave a message for Number 17. Can I do that?"

Nearly two decades into India's phenomenal growth as an international center for high technology, the industry has a problem: It's running out of workers.

FIND MORE STORIES IN: India | Tata Consultancy Services | NASSCOM 
There may be a lot of potential Ã¢â¬â Indian schools churn out 400,000 new engineers, the core of the high-tech industry, every year Ã¢â¬â but as few as 100,000 are actually ready to join the job world, experts say.

Instead, graduates are leaving universities that are mired in theory classes, and sometimes so poorly funded they don't have computer labs. Even students from the best colleges can be dulled by cram schools and left without the most basic communication skills, according to industry leaders.

So the country's voracious high-tech companies, desperate for ever-increasing numbers of staffers to fill their ranks, have to go hunting.

"The problem is not a shortage of people," said Mohandas Pai, human resources chief for Infosys Technologies, the software giant that built and runs the Mysore campus for its new employees. "It's a shortage of trained people."

From the outside, this nation of 1.03 billion, with its immense English-speaking population, may appear to have a bottomless supply of cheap workers with enough education to claim more outsourced Western jobs.

But things look far different in India, where technology companies are spending hundreds of millions of dollars in a frantic attempt to ensure their profit-making machine keeps producing.

"This is really the Achilles heel of the industry," said James Friedman, an analyst with Susquehanna Financial Group, an investment firm based in Bala Cynwyd, Pa., who has studied the issue.

"When we first started covering the industry, in 2000, there were maybe 50,000 jobs and 500,000 applicants," he said. Now there are perhaps 180,000 annual openings, but only between 100,000 and 200,000 qualified candidates.

For now, industry is keeping up, but only barely. A powerful trade group, the National Association of Software Services Companies, or NASSCOM, estimates a potential shortfall of 500,000 technology professionals by 2010.

On the most basic level, it's a problem of success. The high-tech industry is expanding so fast that the population can't keep up with the demand for high-end workers.

Tata Consultancy Services, for instance, India's largest software company, hires around 3,000 people a month. The consulting firm Accenture plans to hire 8,000 in the next six months and IBM says it will bring on more than 50,000 additional people in India by 2010.

A shortage means something feared here: higher wages.

Much of India's success rests on the fact that its legions of software programmers work for far less than those in the West Ã¢â¬â often for one-fourth the salary. If industry can't find enough workers to keep wages low, the companies that look to India for things like software development will turn to competitors, from Poland to the Philippines, and the entire industry could stumble.

The responses range from private "finishing schools" polishing the computer skills of new graduates to multimillion-dollar partnerships spanning business, government and higher education. The biggest companies have built elaborate training centers. The Mysore campus, for instance, was little more than scrub-filled fields when Infosys, India's second-largest software firm, based in the nearby technology hub of Bangalore, began building here in earnest three years ago.

In America, the campus would be nothing unusual. But in India Ã¢â¬â with its electricity outages, poverty and mountains of garbage Ã¢â¬â the walled-in corporate fantasyland, watched over by armed guards, is anything but normal.

It has 120 faculty members, more than 80 buildings, 2,350 hostel rooms and a 500,000-square-foot education complex. There's a movie complex built inside a geodesic dome. An army of workers sweeps the already-spotless streets and trims the already-perfect lawns.

Month by month, it's getting bigger. Today, some 4,500 students at a time attend the 16-week course for new employees. By September, there will be space for 13,000.

Infosys spent $350 million on the campus, and will spend $140 million this year on training, said Pai, the human resources chief.

"This is the enormous cost we have to pay to ensure we have enough people," he said.

They're not the only ones.

IBM's technical skills programs reached well over 100,000 Indians last year, from children to university professors. At Tata Consultancy Services, measures range from a talent search as far afield as Uruguay to having executives teach university classes Ã¢â¬â all designed simply to make people employable.

Most industry leaders believe these investments will pay off, and India will remain competitive. But most are also guarded in their optimism.

"We should be able to get through this year, but if we don't get things like finishing schools into place we'll see an actual shortage," said Kiran Karnik, the NASSCOM chairman.

Much of the problem is rooted in a deeply flawed school system.

As India's economy blossomed over 15 years, spawning a middle class desperate to push their children further up the economic ladder, the higher education system grew dramatically. The number of engineering colleges, for instance, has nearly tripled.

But the problems have simply grown worse.

India has technical institutes that seldom have electricity, and colleges with no computers. There are universities where professors seldom show up. Textbooks can be decades old.

Even at the best schools Ã¢â¬â and the government-run Indian Institutes of Technology are among the world's most competitive, with top-level professors and elaborate facilities Ã¢â¬â there are problems.

The brutal competition to get into these universities means ambitious students can spend a year or more in private cram schools, giving up everything to study full-time for the entrance exams.

Instruction is by rote learning, and only test scores count.

"Everything else is forgotten: the capacity to think, to write, to be logical, to get along with people," Pai said. The result is smart, well-educated people who can have trouble with such professional basics as working on a team or good phone manners.

"The focus," he said, "is cram, cram, cram, cram."

Things are different at the Infosys campus.

"The premier concern in college was to get maximum marks," said Sanjay Joshi, a 22-year-old engineer midway through Infosys' training course. "Here, the focus is totally on learning."

Much of that learning is technical, mostly focusing on programming. But "soft skills" classes, as they're called, also include such things as e-mail etiquette and problem-solving.

Then there are off-hours. The average age on campus is 22 and for some of them it's their first time away from home. There's a soccer field, a cricket field, a swimming pool with a juice bar, a bowling alley and a gym. There are racks of bicycles to ride.

You could drown in politeness. "Ride Carefully" a sign warns bicyclists at a gentle curve in the road; "Enjoy your visit," a passing student tells a visitor.

Everywhere, there are well-groomed, well-mannered young people.

On a recent morning, students filed into a large classroom for a programming course.

By 8:45 a.m. Ã¢â¬â 15 minutes before class began Ã¢â¬â the room was nearly full. Row after row of students sat quietly, waiting for the teacher.

http://www.usatoday.com/tech/techinvestor/industry/2007-04-06-india-workers_N.htm?csp=34


----------



## Neo

*India Forex Reserves $199.179B; Up $1.433B In Wk To March 30 *
Fri, Apr 6 2007
http://www.djnewswires.com/eu 

India Forex Reserves $199.179B; Up $1.433B In Wk To March 30 

MUMBAI (Dow Jones)--India's foreign exchange reserves rose $1.433 billion in the week ended March 30, central bank data showed Friday. 

The Reserve Bank of India's weekly statistical supplement showed reserves rose due to a $1.532 billion increase in the bank's foreign currency assets, but gold reserves fell $99 million during the week. 

Reserves have risen $47.557 billion during the past 12 months and, at $199.179 billion, now well exceed the country's gross external debt, which totaled $142.7 billion at the end of December 2006. 

The government is now considering using part of the foreign exchange reserves to fund long-term infrastructure projects. 

India will need investment of $320 billion during the next five years to improve the quality of the country's infrastructure to match global standards, according to government estimates. 

The RBI doesn't provide a reason for the changes in foreign currency assets, but said the assets expressed in dollar terms capture fluctuations in the value of non-U.S. currencies - such as the euro, sterling and yen - held in reserves. 

The following figures are in millions of dollars: 


March 30 Change 
2007 Over Week Over Year 

Foreign Currency $191,924 +$1,532 +$46,816 
Gold $6,784 -$99 +$1,029 
SDRs $2 -- -$1 
Reserve With IMF $469 -- -$287 
TOTAL $199,179 +$1,433 +$47,557 

-By New Delhi Bureau; Dow Jones Newswires; 91 981-060-2808; djin.in@dowjones.com 

(END) Dow Jones Newswires

April 06, 2007 08:10 ET (12:10 GMT)


----------



## Neo

*Nissan Plans $3,000 Car For India*
Ruth David, 04.06.07

Nissan CEO Carlos Ghosn has big plans for the Indian market, where he plans to launch a small car with a rock-bottom sticker price under $3,000. 

Ã¢â¬ÅIf you want to be serious in India, you should not cross the $3,000 figure,Ã¢â¬Â Ghosn, who is also the CEO of Renault (other-otc: RNSD - news - people ), told reporters at Nashik in west India. 

Nissan will be in a race to the bottom of the price charts with Indian automobile maker Tata Motors (nyse: TTM - news - people ). Next year, it intends to bring a car to market that will sell for 100,000 rupees ($2,300), making it by far IndiaÃ¢â¬â¢s -- and the world's -- cheapest car. (See: " The Next People's Car")

It hopes to entice the countryÃ¢â¬â¢s 45 million drivers of scooters and motorcycles to step up to a larger vehicle. 

Small cars account for three-quarters of automobile sales in India, which is AsiaÃ¢â¬â¢s fourth-largest automobile market. 

The cheapest car in India at present is the Maruti 800, which sells for about $4,500. Maruti, which has about 50% of the Indian car market, is controlled by Japan's Suzuki Motor.

Ghosn, whose Renault and Nissan (nasdaq: NSANY - news - people ) partner with Mahindra and Mahindra here, said it is difficult to succeed at low-cost manufacturing without an India base. Ã¢â¬ÅThere is something unique about the frugality in engineering and management here that we would like to learn from.Ã¢â¬Â 

Ghosn was in India this week to launch a plant that will produce RenaultÃ¢â¬â¢s economy Logan car, which it developed for Eastern Europe and other developing regions. 

Last month, Ghosn announced he was giving up oversight of NissanÃ¢â¬â¢s North AmericaÃ¢â¬â¢s operations to focus on getting the companyÃ¢â¬â¢s finances back on track (See: Ã¢â¬Å One Less Job For NissanÃ¢â¬â¢s GhosnÃ¢â¬Â). Nissan had announced in February that it wouldnÃ¢â¬â¢t meet its targets for this fiscal. 

Ã¢â¬ÅThe Logan production has commenced a month ahead of schedule and at 15% lower than projected costs,Ã¢â¬Â he said. 

Mahindra RenaultÃ¢â¬â¢s Nashik facility has a capacity of 50,000 vehicles a year. Logan is difficult to make in high-cost European markets, so India is the best choice, Ghosn said. The base model of the gasoline-powered version of Logan will cost $9,700 here, and the diesel version will retail for $12,400, Mahindra Renault said in a statement.

Logan, one of RenaultÃ¢â¬â¢s most profitable cars, is now made mainly in Romania. 

Foreign carmakers including General Motors (nyse: GM - news - people ), Volkswagen, Hyundai and Toyota (nyse: TM - news - people ) are making a concerted push into India, which is seeing fast economic growth but still has a tiny number of drivers compared to developed countries. 

Mahindra Renault and Nissan are investing $900 million to build a production plant in the south Indian city of Chennai. The plant, which will be ready in the second half of 2009, will have the capacity to manufacture about 400,000 vehicles, including the Logan.

http://www.forbes.com/business/2007...ts-equity-cx_rd_0406markets1.html?partner=rss


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## Neo

*Make India a developed nation by 2020 *

New Delhi, April 5 Make India a developed nation by 2020, President A.P.J. Abdul Kalam said Thursday, while paying rich tributes to former deputy prime minister Babu Jagjivan Ram.

'Let us now resolve to transform India into a developed nation before 2020 as our nation's second vision after independence,' said Kalam, delivering the Babu Jagjivan Ram centenary lecture at the Vigyan Bhavan here.

'By this singular resolve, we will be paying the greatest homage to Babu Jagjivan Ram, who is an example of development politics and who saw in political power an opportunity to transform people's life and promote their welfare by bold and well thought out plans.'

Prime Minister Manmohan Singh and others also spoke highly of Jagjivan Ram, affectionately called Babuji, marking the beginning of his birth centenary celebrations.

'By tackling issues on labour and employment front, Babu Jagjivan Ram added to industrial peace and productivity of the nation and its new enterprises created by other visionaries like Jamsetji Tata,' said Kalam.

A freedom fighter and social reformer from the backward classes of Bihar, Jagjivan Ram served as a minister with various portfolios for more than 40 years and had an uninterrupted representation in parliament.

Former diplomat L.M. Singhvi said the government should consider conferring the Bharat Ratna posthumously to Jagjivan Ram to commemorate his contributions to the nation.

'His life and work fulfils in an exceptional and incomparable measure the criterion of distinguished and outstanding public service for the Bharat Ratna. To confer the honour on him would be to recognise the Gandhian dimension of the national discourse for Dalit welfare,' Singhvi observed.

As far back as in 1935, Jagjivan Ram was instrumental in establishing the All India Depressed Classes League, an organization dedicated to attaining equality for Dalits.

In the early 1940s, he was imprisoned twice for his active participation in the Satyagraha and Quit India movements.

As the youngest minister in Jawaharlal Nehru's provisional government in 1946, he was part of the prestigious high profile Indian delegation that attended the international conference on labour in Geneva.

In Indira Gandhi's government, he worked as minister for labour, employment, rehabilitation and food and agriculture. 

http://www.earthtimes.org/articles/show/48140.html


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## Neo

*India: Borrowing from China's Playbook*

Despite vastly different styles of government, Delhi is looking to Beijing for ideas on keeping up and balancing the wealth 

A four-hour road trip from Delhi to Agra, the home of the Taj Mahal, offers a crash course in economic disparity. It's not that India's capital is a beacon of conspicuous wealth, it's just that the rural population has clearly been sidelined from the country's economic growth. 

India's recent expansion has been impressive. Since 2002, GDP has risen 7.5% per year or more. In 2005 and 2006, it hit 9% and 9.2% respectively. At the beginning of this year, economists spoke of India and China's growth being neck-and-neck, while investment bank Credit Suisse went as far as to do say India would overtake China for the first time, posting 10% and 9.9% growth respectively. 

Four months later, this scenario looks unlikely, as China continues to power ahead. But India seems more than capable of staying in the race. It is pursuing the infrastructure development and foreign investment that have formed the bedrock of Beijing's economic plan while at the same time expanding into areas that have underperformed in the past, particularly agriculture. 

"The growth momentum has picked up substantially," said Dr Amitendu Palit of the India Council for Research on International Economic Relations (ICRIER), a policy think tank. 

"In the last four years growth has been more than 8% and, in the last two years, over 9%. Three years ago we had not expected we would grow at 9%. What would be the rate of growth five years from now? It might even be 12%." 

*Stuck in a rut* 

Since India launched economic reforms in 1991, growth has been disproportionately urban and this has created myriad stumbling blocks. Many of these are encountered&#8212;quite literally&#8212;on the road to Agra, where potholes are ubiquitous, crashes common and traffic routinely brought to a standstill. Crossing the border between Haryana and Uttar Pradesh states, dozens of trucks sit idle waiting for permission to move. 

Throughout the country, crowds, delays and ramshackle infrastructure are the norm. In many places outside of a handful of cities, reliable power is little more than an elusive dream. 

This poor infrastructure, said Palit, is a bottleneck that could slow down growth and has created demand-led inflationary pressures, particularly in food, as there is no consistency to product delivery. 

Meanwhile, below the tip of the population iceberg occupied by India's famed army of accountants and computer programmers, a third of people can't read or write. For many of the country's lower class&#8212;and lower cast&#8212;young, school is a luxury they can ill afford. 

"In 1997, the dream was to tell the world that we are ready to join the world," India's finance minister, Shri Chidambaram, told reporters after releasing the yearly budget on February 28. "In 2007, the dream is to tell the people of India that they are part of the growth process. 

"There is no dearth of funds. There is no dearth of schemes. The only thing now is to achieve the expected outcomes." 

The annual budget is the most significant economic statement the government makes every year. It is the culmination of a high-intensity process that includes television shows, newspaper supplements, countless interviews, photo ops, speeches and press conferences. Industry groups lobby to get concessions and preferential treatment, associations push their agendas and critics tear the document apart looking for flaws. 

India's budget process is very public and very loud&#8212;it is able to bring down governments. 

The economic policies Chidambaram put forward this year offered little new in terms of perks or protections for industry. Instead, he focused on two main themes that reach out to the core of India's population that has been left behind: agriculture and education. 

The following day, Chidambaram challenged business leaders to stand on their own with decreasing government protection. Promising a reduction in import tariffs, a move that will further open the domestic economy to foreign competition, he said industry is now strong enough to flourish in the global market. 

"I don't fully agree with that," said T. S. Vishwanath, head of international trade policy with the Confederation of Indian Industry (CII), who had been hoping his members would receive more government backing. 

This view was echoed by CII president R. Seshasayee as he noted that "with the economy moving at a good clip, we would have expected more of a boost". 

Other comments from India's business elite were quick and cutting. Lobbyists denounced a new tax on cement, saying that it would lead to the industry's collapse. Representatives from the auto and manufacturing industries complained that little had been done to help them. 

Chidambaram has the numbers on his side, though. Last year, manufacturing was India's main growth driver as the sector expanded by 11.3%. Services also performed well, rising by 11.2%. Agriculture, on the other hand, grew 2.3%&#8212;well below its 4% target. 

This weakness in the agricultural sector, exacerbated by low infrastructure investment, was what made economists revise their January growth predictions. 

India spends a mere 4-5% of GDP on infrastructure. Increasing this to 8% could send economic growth into 12% territory, according to ICRIER's Palit. 

"Without infrastructure it will be very difficult to support industrial development," he said. 

*Emerging elite *

The lack of infrastructure has not stopped the rise of an urban middle class in India, most of whom are getting rich on the back of a small segment of ballooning manufacturing and service industries. 

According to a JPMorgan study, 68% of India's urban households live on less than US$3,000 per year and this number could fall to 42% by 2015. Meanwhile, the segment earning US$3,000-5,000 will grow from 20% to 30% and the US$5,000-10,000 bracket will expand from 9% to 21%. 

This is the consumer base targeted by foreign companies keen to take advantage of Chidambaram's lower import tariffs. 

The challenge in building up a business focused on this expanding group of potential customers is creating India-centric products coupled with marketing strategies targeted at a very diverse population splintered along ethnic and regional lines. This is something Indian industry learned to do a long time ago but foreign multinationals are figuring it out as they go. 

Haier, the uniquely successful Chinese household appliance maker, has tried to live by this philosophy. Since it first entered the market in 2004, the company has grown many times over. Sales multiplied up to eight times in 2005 and jumped 25% in 2006, all fueled by some idiosyncratic buying patterns. 

"When a person has money the first think he buys is a television," explained Pranay Dhabhai, COO of Haier Appliances (India). The second thing he buys is a moped or a scooter&#8212;he wants to graduate from the bicycle. Then it is housing, then a refrigerator. Washing machines and dishwashers come way, way down." 

Haier's Delhi offices occupy three floors of a stand-alone building in a business park on the city outskirts. The company has, to date, not manufactured directly in India but subcontracted to local firms, although an as-yet unannounced refrigerator production base is planned. 

Its fastest-growing category is air conditioners, with sales growing at 25% per year; other products grow at 7-8%. 

*Aiming Haier *

India is a relatively small market for Haier compared to China, the US or Europe, but the company sees massive potential. For Dhabhai, the country today is very much where China was circa 1995. 

"We look at India as one of our key markets," he said. 

This appetite for consumer durables is likely to be driven higher by easier access to financing. More credit facilities make it easier for low income families to buy more expensive products by spending a few hundred rupees a month instead of several thousand in one shot. 

At the same time, it makes more sense to buy a refrigerator when there is a constant and reliable electricity supply, so slowly improving infrastructure will also help drive Haier's sales. 

There are enormous challenges, though. While the feeling is generally one of barely guarded optimism, India's economic imbalances must be addressed. 

Much as China has employed an incentive-led approach to drive investment into its western regions, the agriculture provisions in India's latest budget signal the start of large-scale efforts to spread the growth out into the countryside. 

*The China solution* 

This is just one way in which Delhi is looking to emulate China's growth, albeit with Indian characteristics, given the differences that arise from very different social and political systems. 

"China was led by investment, India was led by consumption. But I think in India, slowly, slowly, investment is increasing. And in China too, consumption is increasing," said Basanta Pradhan, a professor of economics at the Institute for Economic Growth in Delhi. 

When it comes to implementing change, the differences between the two are driven largely by political realities. 

Chinese leaders face internal pressures as they balance the often conflicting agendas of local, provincial and central government, but they wield great influence and their decisions are rarely held answerable to public scrutiny and never to the electoral process. 

Decisions in India, meanwhile, have to be made through compromise. Politicians are open to criticism from a vocal press and subject to the whims of an unpredictable electorate at the polls. 

There are constant power struggles, not only between the states and the federal government but also between the myriad political parties. 

The budget process highlighted these difficulties as Chidambaram went out on a limb to spread the wealth but lost political capital with industry lobbyists and the politicians who champion their cause. 

The finance minister may find himself under further pressure as he pushes forward with further reforms, namely to create more urban centers where now there are none, boost agriculture, create more manufacturing bases and allow more foreign investment. 

In short, they must do all the things China started doing in 1979. 

"We are a large country by population so it's very important that the kind of growth you have creates new employment opportunities," said Palit. 

"You have to think about mass production and manufacturing&#8212;something similar to what China has done." 

http://www.businessweek.com/globalbiz/content/apr2007/gb20070405_017517.htm


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## Matador

*Yes ,in fact does pakistan and china should put their economics first ,in that 

case country can have enough money to update their army instantly. *


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## Matador

Now china economic scale it's half of Japan and one of fifth of 

American's ,maybe china has became a leaders of world economic of top 5 ,I 

don't konw the place of Indian in world economic competion .


----------



## Contrarian

*Hotel chains firm up investment plans*

MUMBAI: Starwood Hotels & Resorts, one of the world's leading hotel and leisure companies, for the first time is loosening its purse strings to invest in India. This signifies a major shift in the hotel chains' strategy.

For the last 36 years, it has operated in the country by franchising its brands, Sheraton and Le-Meridien, for a fee.

Unlike sectors like retail and real estate, where foreign direct investment is restricted, in hotels 100% FDI has been allowed since 2001.

Despite this, the business has barely attracted $500 million in investments. Certainly, not much home to write about.

For the first time though, things seem to be changing. Says Thomas J Monahan, senior V-P at Starwood Hotels, "We are looking to invest in properties and talking to owners of our existing properties. We may also partner with others to bring our other brands into the country. It is unlikely we will own 100% in any single property, 20-25% is more like it."

Starwood has nine properties under the Sheraton brand name and eight under Le Meridien operating in the country. It will soon unveil its mid-market brand Aloft.

Monahan, however, refused to divulge the sum allocated for the investment purpose. Starwood is not the only one intending to pump in money. There are others too.

Intercontinental Hotels Group (IHG), the world's largest hotel group by number of rooms, is not averse to investing in building rooms.

Says Markus Mueller, area director, IHG, "We are primarily a hotel management company and do not actively invest in assets. However, there are exceptions and we do support key flagship properties."

IHG, which has Crowne Plaza, Holiday Inn and Candlewood Suites as brands under its umbrella, picked up a stake in the 59-room Intercontinental Hotel, situated at Marine Drive in Mumbai after being in the country for close to four decades and lending its brand names to 14 hotels.

Explaining the shift, an executive from hotel consultancy firm Mahajan & Aibara said, "Foreign hotel chains are willing to put in money so that the property owner/developer doesn't become a part of another hotel chain. This is because with India emerging as a key destination for almost all the hotel chains, they do not want to miss out on good opportunities in terms of location and positioning."

According to Rajeev Talwar, group executive director of DLF, which has a JV with Hilton Hotels: "When a foreign hotel chain invests, they are more committed to deliver results."

DLF Hilton's first hotel is expected to open doors in December. Hilton holds a 24% stake and has made an investment of $143 million in the JV company. The JV plans to develop and own 75 hotels and serviced apartments over the next seven years.

"Given demand and supply mismatch of rooms, tariffs and margins are high. That explains interest shown by hotel chains to invest,"said Ambar Maheshwari of DTZ, a global property advisory firm.

http://timesofindia.indiatimes.com/...m_up_investment_plans/articleshow/1867964.cms


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## Contrarian

*Ministry sends Mumbai Airport plan to Cabinet*

NEW DELHI: Miffed at the lack of progress on clearing slums around the Chhatrapti Shivaji International Airport which is adding to the delay in expansion plans for the place, the aviation ministry has sent the plan for the Navi Mumbai airport to the Cabinet.

Since the International Civil Aviation Organisation has already approved the plan, the Cabinet's nod &#8212; expected this month &#8212; would pave the way for the much required second airport for Mumbai.

Top aviation ministry officials expressed 'severe' displeasure at the Maharashtra government's failure to act fast on this front.

While aviation minister Praful Patel is from the NCP, that shares power with the Congress in the state government, he is also learnt to be very unhappy with the pace of work.

"The private developer, GVK, has said it's difficult to build another runway at CST Airport in the available space that's a must to meet growing traffic. By not clearing encroachments, we are also not helping the cause. Mumbai airport is stuck from both sides. The state government promises action but is not supportive enough,"said the source.

GVK would have the first right of refusal for building the Navi Mumbai airport. "If their bid is within 10 % range of the highest bidder, then as per agreement they would get a chance to match that figure. But if they refuse to do so or the highest bidder is ahead of their bid amount, then the latter would build the new airport. AAI is not going to bid for it and it will go the private way,"said the top source.

Meanwhile, there's some development on other airports also. The Tamil Nadu government has offered 700 to 800 acres of additional land near the Chennai airport so that a second runway could come up there.

The aviation ministry is trying to get the nod to get Port Blair declared an international airport. And work on the Kolkata airport is going to begin in next three months, said the senior official.


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## Contrarian

*IOC eyes petrochem exports to Pakistan*

NEW DELHI: Flagship refiner IndianOil is in sight of opening a passage to Pakistan with its petrochemicals and base oils used for making lubricants but chances of Indian motor fuels flowing into that country still remain distant, oil ministry sources said.

At his meeting with oil minister Murli Deora on the sidelines of the 14th Saarc summit, Pakistan prime minister Shaukat Aziz sought a detailed note on IndianOil's proposal to supply petrochem, particularly PTA (an ingredient for making plastics), and lubricant-making oils from the company's Panipat refinery.

Since Pakistan freely allows import of these items, Aziz is reported to have said he saw "no problem"in sourcing them from India.

IndianOil chairman Sarthak Behuria impressed upon the Aziz Pakistan's advantage in sourcing these items from Panipat.

Pakistan now imports PTA at the Karachi port and has to haul it across great distances to upcountry consumption centres.

Importing from Panipat will save on freight as the refinery is close to Pakistan's consumption centres, particularly Lahore, and is well connected by road and rail.

IndianOil had last year exported a shipment of base oils to Pakistan from its Haldia refinery. "As a business strategy, our aim is to export lubes base and PTA &#8212; once the cracker unit gets going &#8212; from Panipat. IndianOil can supply these through rail or road transport which will be more economical for Pakistan than importing at the Karachi port,"said B M Bansal, the man incharge of seeking new business for IndianOil.

Some infrastructure for transferring the items from containers to storage tanks etc have to be created on the Pakistan side. IndianOil is seeking Islamabad's help in getting that, the ministry sources said.


----------



## Contrarian

*'Services exports may touch $311b by 2012'*

NEW DELHI: Driven by growth in sectors like software, business and management consultancy, exports of services in India may surpass exports of goods by 2012, says a survey released by Ficci.

"With the current rate of growth expected to continue in the nedium-term, India's exports of services will be close to $311 billion by 2012 overtaking the expected level of merchandise exports of $305 billion in that year," says Habil Khorakiwala, president, Ficci.

On calendar year basis, India currently exports more than $56 billion of services as compared to the merchandise exports of over $100 billion.

However, services exports are growing at 28% annually for the last five-six years and goods exports have increased by 22% for the same period.

The chamber analysis shows that if the current trend continues, the share of services in country's total exports would rise to about 50.4% by 2012 from the present level of 37.1%.

In first three quarters of the just concluded fiscal year exports of software services, business services, travel and transportation services have witnessed strong growth from 20-98%.

In terms of share in worldwide services exports, India is going to almost triple its share from the current 2.3% to 6% by 2012 and it will cross China's exports of services, which is currently $74 billion by 2009.

Only 10% of global IT/ITeS market has been so far realised by India and remaining $300 billion should be tapped.

India needs to press for more liberal market access within the multilateral, bilateral and regional trade agreements with Asean, Japan, Korea and EU, it said.


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## Contrarian

Webby, can i please request that the size of the text option be added to the quick reply menu? It makes things far easier when posting.


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## Contrarian

*India to overtake United States by 2050: Report
*
MUMBAI: Productivity growth will help India sustain over 8% growth until 2020 and become the second largest economy in the world, ahead of the US, by 2050, Goldman Sachs has said, scaling up estimates of the country's prospects in its October 2003 research paper widely known as the BRICs report.

The original report had projected that India's GDP would outstrip Japan's by 2032 and that in 30 years, it would be the world's third largest economy after China and the US. The new report goes one step further by moving India up from No. 3 and No. 2 in the global sweepstakes of tomorrow.

Goldman Sachs' research arm said in a global research paper released on Monday that India's growth acceleration since 2003 represented a structural increase rather than simply a cyclical upturn. It said productivity growth drove nearly half of overall growth and expected it to continue for some years.

"We project India's potential or sustainable growth rate at about 8% until 2020. The implication is that India's contribution to world growth will be even greater (and faster) than implied in our previous BRICs research," Goldman Sachs Global Research said.

The vote of increased confidence from the world's largest investment bank, whose previous chairman Henry Paulson is now treasury secretary in the Bush administration, comes when India is easing into its new seat in the global political arena as a nuclear power and consolidating its economic might as the world's services backbone.

The paper said a turnaround in manufacturing productivity was central to the ratcheting up of productivity growth. The private sector was the principal driver of this turnaround, as it improved efficiency in the face of increased competition due to the cumulative effects of a decade of reforms.

"The underlying reasons are: increased openness to trade, investment in information and communication technology, and greater financial deepening. These factors still have some distance to run," it said.

http://timesofindia.indiatimes.com/articleshow/1411052.cms


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## Contrarian

*India, China can script HP's success' *

BRISBANE: India, which is yet to make a mark among countries considered 'matured markets', was the focus of all discussions at the Hewlett-Packard Software Universe meet at Brisbane where top honchos of the company got together to formulate future strategies to retain its numero uno position in the world.

For the first time after HP acquired software giant Mercury, top executives of the two companies came together with their associates and partners in a week-long networking event that unfolded the IT giant's software portfolio, promising to change the way business is done.

Speaking on the combined software strength of HP and Mercury, Thomas E Hogan Ã¢â¬â the senior vice-president responsible for all software functions of the group with a focus on linking business and IT Ã¢â¬â said India and China were the two countries that could script the company's future success in this segment.

Spread across 90 sessions, the conference and training programme gave insights into successful strategies for improving business through IT governance combined with the Mercury's application delivery system.

"Today, success depends on how well you manage time, cost and risk to business outcomes," said HP Software India head T Srinivasan.

"The IT solutions provided by HP Software enable executives to take the right decisions, cut the right costs, manage the right changes to give the best business outcomes," he added.

Srinivasan plays a major role in realising software goals of the company as head of its India operation, given the fact that Mercury has made deep inroads in the Indian market in the last couple of years with its business technology optimisation enterprise being widely used by a cross-section of industries.

Leading stock exchanges of India like BSE, NSE and NCDEX use Mercury tools for testing purposes. Recently, a leading automobile company employed Mercury tools to bring down its test cycle time and effort by more than 50%. The company is looking to move to a two-four week release cycle from a three-month release cycle earlier, an HP partner working on the project said.

Several banks and insurance companies in India are already users of Mercury tools and provide HP Software a ready market to consolidate on its strength. The company boasts of reducing hardware utilisation by 20%-30% by using its software testing tools.

The story is gaining momentum in other hot sectors like telecom with one of the leading telecom providers making significant investments in Mercury Tools to help them scale to four times their current business volumes.
(The correspondent was in Brisbane at the invitation of HP Software)


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## Neo

*India can achieve 9pc growth, says Montek*
(IANS)

8 April 2007 

HYDERABAD Ã¢â¬â Echoing Prime Minister Manmohan Singh, a top Indian economist reiterated here yesterday that the country could achieve sustained nine per cent economic growth, even as he cautioned that the benefits of this should be inclusive and filter down to all sections of the population.

Delivering the convocation address at the Indian School of Business (ISB) here, Planning Commission Deputy Chairman Montek Singh Ahluwalia said that the "biggest challenge" before economists would be their ability to cope with the change that high economic growth would bring about.

IBS, which is associated with the Kellogg School of Management, the Wharton School, and the London Business School, is a research oriented independent management institution that grooms future leaders for India and the world. A little over 400 students, a majority of them with five to six years of managerial experience, received their post-graduate diplomas at the convocation.

Noting that when the reforms process began in the early 1990s many doubted whether this would translate into economic growth, Ahluwalia said this issue had now been addressed but a different kind of "criticism" had arisen.

"We know the recipe. But will it be inclusive enough and reach every part of the country in equal measure? Thus, our focus is on faster and more inclusive growth," Ahluwalia said while referring to a subject that is dear to the prime minister's heart.

The inclusiveness apart, it had also to be ensured that economic growth impacted on the agriculture sector to ensure that it grew at four per cent against the present two per cent.

"We have to think of measures to improve productivity and income per head in the rural sector," Ahluwalia said, even as he added that "too many" people in India were engaged in agriculture and that this was the major cause of the rural-urban income divide. 

http://www.khaleejtimes.com/Display...l/business_April159.xml&section=business&col=


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## Neo

*India eyes oil, gas in Uzbekistan, Azerbaijan *

NEW DELHI: Indian state-run firms will scout for oil and gas assets in Uzbekistan and Azerbaijan during a week-long visit by junior commerce minister Jairam Ramesh from Tuesday, the government said.

ONGC Videsh Ltd, the overseas investment arm of Oil and Natural Gas Corp, has identified some prospects in Azerbaijan, it said in a statement on Monday. Gas transportation firm GAIL (India) Ltd has identified four natural gas exploration and production blocks in Uzbekistan, it said. Uzbekistan is one of the top natural gas producing countries in the world.

ONGC Videsh, whose Managing Director R S Butola is accompanying the minister, is also interested in investing gas fields in Uzbekistan, the government said. Azerbaijan has re-emerged as a major oil supplier with the commissioning of Baku-Tbilisi-Ceyhan pipeline, the worldÃ¢â¬â¢s second longest oil pipeline connecting rich Caspian Sea oil reserves with the Mediterranean Sea.

In Tashkent, the commerce minister along with senior GAIL officials will hold talks with the Uzbek government on petrochemicals, liquefied petroleum gas and city gas distribution projects identified by GAIL. Other companies that will accompany the minister are State Trading Corp, National Mineral Development Corp and MMTC Ltd. 

Ã¢â¬ÅSTC is also exploring a $10 million investment in Uzbekistan for cotton-seed processing,Ã¢â¬Â the government said in the statement. RITES, a unit of state-owned Indian Railways, has made proposals for modernising and expanding UzbekistanÃ¢â¬â¢s railway network, it added. 

http://www.thenews.com.pk/daily_detail.asp?id=50437


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## Neo

April 10, 2007 
*USTR identifies trade barriers in Indian market*

By Sabihuddin Ghausi

KARACHI, April 9: Even a highly competitive and organised industry in the US, the worldÃ¢â¬â¢s biggest economy, has complained of facing insurmountable barriers in the Indian market giving a convenient excuse to Pakistan, which, in an official report, wonders the plight of the Ã¢â¬Åmuch smaller economies of South Asia.Ã¢â¬Â

Ã¢â¬ÅIndiaÃ¢â¬â¢s tariff remains high, especially in the agricultural sector,Ã¢â¬Â observes an annual report for the year 2006 of the United States Trade Representative (USTR) entitled Ã¢â¬ÅSignificant Trade BarriersÃ¢â¬Â.

The report reveals Ã¢â¬ÅThe US producers encounter tariff and non-tariff barriers that impede their exports, despite the government of IndiaÃ¢â¬â¢s economic reform programme in 1991.Ã¢â¬Â It goes on to complain about the US textile industriesÃ¢â¬â¢ concerns on Ã¢â¬Ånon transparentÃ¢â¬Â application of tariff and taxes.

The US exporters consider reduction on relatively much higher tariffs on agricultural products, processed foods, beverages and nutritional supplements Ã¢â¬ÅnegligibleÃ¢â¬Â. The US exporters blame Indian authorities of practising a non-transparent taxation and tariff system as information on taxes and tariffs are given in different documents and there is no single document for this purpose.

An official document of PakistanÃ¢â¬â¢s commerce ministry has extensively quoted these observations of the USTR report to argue that there were innumerable tariff and non-tariff barriers, which obstruct flow of Pakistani goods import in Indian market and discourage Pakistani exporters.

No wonder then, India remains the single biggest beneficiary in trade with Pakistan and five other Saarc partners all along in last more than 20 years that now inhibits further expansion of trade.

In the year 2005-06 India posted gains of more than $500 million in trade with Pakistan and there are strong prospects that this trade balance in Indian favour will expand further in the current fiscal year.

Many businessmen in Dhaka and Karachi mention perpetual trade balance in IndiaÃ¢â¬â¢s favour as the single biggest effective factor that is impeding growth of business in South Asia.

On Monday Pakistan cement industry reported encountering a problem at the Indian port when the first consignment reached there from Karachi. Details are not available but the manufacturers and exporters have despatched a team of senior executives to India to sort out the issue.

Local business sources say that according to Indian trade practices prospective exporters of certain selected products that include cement, gelatine, condensed milk, electrical appliances, mineral water, steel products, leather products, X-Ray equipments, dry cell batteries, thermometers, helmets and gas cylinders are required to obtain licences from the Bureau of Indian Standard.

In this process the exporters have to incur application charges and also have to pay for the inspection visits from India. Furthermore, licences are required to be renewed every year.

Ã¢â¬ÅThis adds to the business cost, and hurts competitiveness in Indian market,Ã¢â¬Â observed a local exporter to Indian market. In many cases, the Indian banks do not accept letters of credit issued by Pakistani banks in favour of general exporters,Ã¢â¬Â he complained and hence in most of the cases payments between Pakistani exporters and Indian importers are settled through Asian Clearing Union, which adds to the transaction cost. The Pakistan government perceives this as a non-tariff barrier and has mentioned it as such in its official report.

But what hurts the Pakistani business most is the Indian trade practices and rules on textile imports. The Indian trade bodies have recognised the advantage enjoyed by Pakistan in certain textile products. Indian officials have effectively converted these advantages into disadvantages for the Pakistani exporters by setting in place certain rules and practices.

For example textile consignments to India are tested for AZO dyes in local laboratories despite the fact that Pakistan has banned AZO dyes and there is no question at all of using these dyes by the local exporters. These tests in Indian laboratories take a minimum of seven days to three months and the cost incurred is almost 10 per cent of the consignment value.

Besides this, there are very many and multifarious rules and regulations that are applied on different consignments differently and put the exporters to difficulties and add to their cost of doing business with India.

Yet another complaint of Pakistan exporters is the different set of rules and practices by the Indian states for flow and consumption of imported goods that in many ways obstruct the exports from Pakistan.

The measures adopted by many Indian states to restrict use, consumption and sale of many agricultural goods and industrial products also discourage importers to seek supplies from Pakistan.

Similarly, the lengthy and cumbersome laboratory testing for a wide range of food products are also found to be discouraging Indian importers to place orders in Pakistan. There are restrictive measures on import of woollen textiles, pharmaceutical products, automotive vehicles, motorcycles, rough marble blocks, jute bags and a variety of consumer items, which exporters in Pakistan feel they have the capacity and potential but are unable to do because of the non-tariff barriers in India.

In the year 2005-06 PakistanÃ¢â¬â¢s exports to India totalled $29,331 million. The single biggest exportable item to India was a petroleum refinery product worth $96 million. Total exports amounted to hardly $43 million while fruits and vegetables fetched $27 million.

Indian response to PakistanÃ¢â¬â¢s objections on its non-tariff barriers is that these are not Pakistan specific and apply on global imports. Pakistan trades with India on a positive list of about 2,000 items, while India is insisting on a negative list so that it gets opportunity to export to Pakistan in wide area.

http://www.dawn.com/2007/04/10/ebr4.htm


----------



## Janbaz

*Indian Realty Fund to invest $100m* 

MUMBAI: India&#8217;s IL&FS Realty Fund said on Tuesday it would invest $100 million in a start-up property developer QVC Realty Ltd that would build hotels, homes and townships.

IL&FS Realty, the real estate fund of private equity firm IL&FS Investment Managers Ltd, will own 100 per cent of QVC. As the projects come up, founders of QVC will get equity stakes for an undisclosed amount, a top official said.

&#8220;We have committed $100 million and the management will take a stake on delivery,&#8221; Shahzaad Dalal, vice chairman & managing director of IL&FS Investment Managers, told reporters.

QVC will develop 100 acre township in Gurgaon, near New Delhi, and is tying up 100 acres in the technology hub of Bangalore for a similar project, Prakash Gurbaxani who founded the firm in January said.

The combined market value of the two projects could be Rs30 billion ($699 million), said Gurbaxani, a former executive at the Indian joint venture of Tishman Speyer and ICICI Venture.

The News.
http://thenews.jang.com.pk/daily_detail.asp?id=50496


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## Contrarian

Well...agriculture is one area where India shouldnt open up. This is the MAIN issue thats stopping the WTO! The developing countries would not back down. India, China, Brazil, South Africa are VERY VERY firm in this issue.


----------



## Neo

Thursday, 12 April 2007

*Jet Airways strikes Sahara deal * 

Jet Airways is the largest private airline in India 
India's largest private airline, Jet Airways, says it has agreed to buy out its smaller rival Air Sahara for 14.5 billion rupees ($340m). 
Jet Airways has already paid Sahara $116m. It will make a further payment of $83m before 20 April and the rest will be paid in annual instalments. 

The deal gives the airline a combined domestic market share of about 32%. 

Jet's attempt to buy Air Sahara last year collapsed but the company says the new deal has been reached amicably. 

Both airlines also fly to international destinations. 
*
'Amicable' *

"This deal is definitely going to be good for the shareholders," Jet Airways founder and chairman Naresh Goyal said at a press conference in Mumbai (Bombay), India's financial capital. 

Jet Airways was founded by former travel agent Naresh Goyal 

A lawyer for Jet Airways, Harish Salve, told journalists: "The important thing is that there was a dispute and it has been settled amicably by both sides." 

Mr Salve said the agreement was confidential and that he could not reveal much except that Jet had bought all Air Sahara shares. 

In 2006, Jet Airways announced it would pay $500m to buy Air Sahara. But the deal fell apart after Jet Airways failed to get the necessary regulatory approval. 

The airline at the time said it would not go through with the acquisition in the interests of its shareholders. 

Air Sahara argued the agreement should be honoured and demanded compensation from Jet Airways. 

An arbitration panel was set up to hear the case, and it recommended the two parties come to some sort of an agreement among themselves. 

Jet Airways, founded by London-based former travel agent Naresh Goyal, controls about 24.5% of the Indian domestic aviation market. 

Air Sahara, owned by reclusive businessman Subroto Roy, controls about 7%. 

http://news.bbc.co.uk/2/hi/south_asia/6547941.stm


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## Neo

Thursday, 12 April 2007

*US sees no trade 'breakthrough' *

Can different sides bridge the gap and reach an agreement? 
The US has warned that it expects no "breakthrough" as four-day trade talks with global leaders begin in New Delhi. 
US Trade Representative Susan Schwab said it would be a "stock-taking meeting", as India, the US, the European Union and Brazil congregated. 

It is the first meeting since talks collapsed in July, after disagreement over farm subsidies and tariffs. 

Brazil said differences were "narrowing" while the US underlined a "sense of urgency" at the event. 

The need to reach a settlement on trade has been heightened ahead of a looming US deadline. 

By June the power for the US President to give fast-track approval for trade deals will expire. 

After that date getting any settlement through Congress is likely to prove more difficult. 

*Multilateral system *

The World Trade Organization's Doha round of talks - named after the Qatari capital where talks started in 2001 - collapsed last year as developed and developing countries came to loggerheads with both sides saying the other was not doing enough. 

"No one is making formal offers in this context but what [we] are doing is exploring conditional offers," said Ms Schwab. 

The host country meanwhile offered a slightly more upbeat note, but like the US declined to offer any details. 

"I am confident that all countries want to move forward, strengthening the multilateral trading system," said Indian Commerce Minister Kamal Nath. 

Developed nations have been accused of maintaining overly high subsidies, to the detriment of poorer nations, while developed countries say developing countries have not sufficiently lifted barriers on imports. 

The meeting on Thursday marked the first formal day of talks after informal and bilateral negotiations started a day earlier. 

Before the talks, EU Trade Commissioner Peter Mandelson said: "If we fail, Doha's prospects for the year will be lost". 

The original aim of the talks had been to increase world trade and in the process help beat poverty. 

http://news.bbc.co.uk/2/hi/business/6547947.stm


----------



## Neo

*Indian forex reserves top $200 billion *

MUMBAI: Indiaâs foreign exchange reserves topped $200 billion for the first time in early April, data showed on Friday, which analysts said reflected capital flows into the economy and central bank intervention to cap the rupee. 

Foreign exchange reserves rose to $200.320 billion on April 6 from $199.179 billion a week earlier, the Reserve Bank of India (RBI) said. In Asia, India has the fifth-largest holdings of foreign exchange reserves behind China, Japan, Taiwan and South Korea. 

Reserves have risen by $33.2 billion since Oct 27 last year, which analysts saw it as evidence of suspected intervention by the central bank to curb the currencyâs appreciation. The central bank bought $19.7 billion in the foreign exchange market in the four months to the end of February, data showed earlier this week. 

Before November, the central bankâs previous intervention was in May, when it bought $504 million. Intervention figures for March have not been released. The rupee has risen more than 10.5 per cent from a three-year trough of 47.04 per dollar last July and on Friday it ended at an eight-year high of 42.51/52 per dollar. 

The intervention has created a headache for the central bank as it tries to curtail money supply and credit growth to curb inflationary pressures. When the central bank sells rupees to buy dollars, it adds to the supply of rupees in the banking system. Annual growth in money supply has remained stubbornly above 20 per cent, higher than the central bank would like. 

The central bank has stepped up policy efforts to rein in money supply and credit growth by raising interest rates and increasing the proportion of cash that banks should hold with it.

http://www.thenews.com.pk/daily_detail.asp?id=51068


----------



## Neo

*India exports 400,000T of sugar in Oct-Mar *

MUMBAI: India exported 400,000 tonnes of sugar in the six months to the end of March and was likely to export 1 million tonnes in the crop year that ends in September, the head of the Indian Sugar Mills Association said on Friday. 

India, the worldâs second-biggest sugar producer, banned exports last July to curb prices. When it lifted the ban in January, world prices had fallen. 

âThe ban was lifted very late and we lost an opportunity to export when prices were higher,â Shantilal Jain, director-general of the association, told reporters at a commodities forum. He said Indiaâs sugar output was expected to be 26 million tonnes in the year to September 2007, up from 19.3 million tonnes in the previous crop year, and he expected output to increase by another million tonnes in year to September 2008. Higher output this year would result in an opening stock of 10 million tonnes on October 1, 2007 against 4 million tonnes a year earlier, he said. Jain said a proposed transport subsidy for sugar mills was extremely necessary, saying exports were unlikely to reach 1 million tonnes this year without it. 

The government incentives have not yet been approved. They have been referred to the election commission for approval because of elections in Uttar Pradesh, a major sugar producing northern state. âWe look forward to the subsidy eagerly and it will boost exports next year,â he said.

http://www.thenews.com.pk/daily_detail.asp?id=51069


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## Neo

Saturday, April 14, 2007 

*Japanese cos in India rise 50% in a year: report*

NEW DELHI: The number of Japanese companies operating in India has increased by nearly 50 percent in a year, drawn by an improved investment climate, according to a report on Friday. 

âThe number (of Japanese companies) that stood at 320 last January (2006) crossed 470 in February this year,â Japanese Ambassador to India Y Enoki was quoted as saying by the Press Trust of India. 

Japanese companies were flocking to Indian shores because of an increasingly attractive investment climate in the country where economic growth is running at around nine percent, the ambassador said. India has been liberalising its economy, drawing a growing number of foreign investors from around the world. 

http://www.dailytimes.com.pk/default.asp?page=2007\04\14\story_14-4-2007_pg5_29


----------



## Contrarian

*Essar Power to invest Rs 15,000 crore*


MUMBAI: Essar Power, belonging to the oil-to-telecom Ruia group, has lined up investments worth Rs 15,000 crore for setting up three coal-based power plants that will generate 3,600 megawatt (MW) in the states of Jharkhand, Gujarat and Madhya Pradesh. The three power plants of 1,200 MW each are likely to cost Rs 5,000 crore per plant.

The company, which currently generates 1,250 MW, is planning to set up a 1,200 MW power generation station close to a coal mine in Jharkhand.

Recently, the company was allotted a captive coal mine at Chakla, Jharkhand with potential reserves of 120 million tonnes. It will take an year to complete the financial closure, Arun K Srivastava, MD Essar Power told TOI.

A 1,200 MW plant would annually consume 6 million tonnes coal as fuel. According to Srivastava, the cost of power in Jharkhand would come to around Rs 2.10 per unit. As per the regulations, a portion of the power will be supplied to the state while the rest will be sold to outside buyers.

The Jharkhand power plant is likely to start generation by 2011. Essar Power has also signed a power purchase agreement with the Gujarat Urja Vikas Nigam (GUVNL) to supply 1,000 MW power at Rs 2.40 per unit for 25 years. To generate this power, the company is setting up a 1,200 MW plant.

After fulfiling its obligation to GUVNL, the company will sell the excess power to other buyers. The Gujarat plant is likely to achieve financial closure in nine months.

The third project is next to the coal mine at Mahan in Madhya Pradesh. This too will be a 1,200 MW project costing nearly Rs 5,000 crore. The coal for the project will come from the joint venture formed between Essar Power and Hindalco for the coal mine having 180 million tonnes of reserves.
http://timesofindia.indiatimes.com/...invest_Rs_15000_crore/articleshow/1907510.cms


----------



## Contrarian

*Developing nations to put up united stand at WTO*

NEW DELHI: The key WTO players may have put up a show of bonhomie on Thursday evening but there is little that they have done to improve trust.

With US still in a mood to garner as many goodies as it can without offering any concessions in return, the developing countries have little faith in the world's largest trading partner taking forward the process and that too with the interest of the poor countries in mind.

While the four key players US, EU, Brazil and India are expected to try to discuss the possibility of tariff and subsidy cuts on May 17 and 18 in Paris, India and China are unwilling to take any chances.

Over the next two days, the two Asian powers are going to issue a joint statement reminding the US and EU about the Doha Round mandate to uplift the interests of the poor.

Commerce minister Kamal Nath is scheduled to fly to Beijing over the weekend to hold parleys with his Chinese counterpart and ensure that the developing country bloc remained united. Consultations with the other developing country members are expected over the next few weeks.

Given the united posture adopted by the developing countries in thwarting the rich countries attempts to have their way, US Trade Representative Susan Schwab did recognise the role that India and Brazil are playing.

"India is in a profoundly important position in these negotiations one of a handful of nations that can make or break the Doha round.

Moreover, the nature of India's engagement will determine that of many other developing countries in G20 and G33," she said. Before Nath goes to Brazil, he is holding bilateral consultations with US, Japan and Australia to narroe down differences.

But there is a renewed urgency to conclude talks by December, something that Brazilian external relations minister Celso Amorim made clear.

Before the ministers meet in Paris in mid-May, officials from the four countries will start a conditional offer process to try and reach some sort of consensus. But they remained sceptical of how much the US would move.
http://timesofindia.indiatimes.com/...p_united_stand_at_WTO/articleshow/1907508.cms

-------------------------------
I think the Doha round for WTO is akin to the Uruguay round of GATT...The last step.


----------



## Contrarian

* AT&T starts business in India*

Staff Reporter

NEW DELHI: AT&T Global Network Services India, a joint venture between AT&T Inc. and Mahindra Telecommunications Investment Private Ltd., has announced the launch of its commercial business in India.

"India is a high-priority market for just about every global MNC, and the increasingly competitive telecom landscape will be a major factor in helping to attract further MNC investment and expansion into India. AT&T is strongly positioned in India to directly meet their telecommunication needs,'' AT&T Asia Pacific Vice-President V. S. Gopi Gopinath said in a statement. AT&T will be investing $750 million in 2007 to support its global customers.

Investment plans

This would help AT&T provide its global customers with consistent services worldwide and help drive their business growth, he added. In his message, Communications and IT Minister Dayanidhi Maran said AT&T's offerings would definitely increase the competitiveness of IT enterprises and IT users who need world class, state-of-the art global connectivity. "For its part, the Central Government, through its policies, will ensure that India continues to be an investor friendly destination for global telecommunications companies," the Minister added. 

http://www.hindu.com/2007/04/15/stories/2007041502091300.htm


----------



## Contrarian

*Work on $50 b industrial corridor to begin in January*

NEW DELHI: Work on the Delhi-Mumbai industrial corridor, to be patterned on the lines of the Tokyo-Osaka industrial belt, will begin in January next year after the finalisation of the detailed project report, Commerce and Industry Minister, Kamal Nath, said after interacting with Japanese Trade Minister, Akira Amari, at a Confederation of Indian Industry (CII) function here on Saturday.

To be established with Japanese help, the Delhi-Mumbai Industrial Corridor (DMIC) project would need about $50 billion (about Rs. 2,15,000 crore) and come up along the proposed Delhi-Mumbai dedicated rail freight corridor, added Mr. Kamal Nath. Japan agreed to partner the project during Prime Minister Manmohan Singh's visit to Tokyo in December last year.

The industrial corridor would have a mega power plant, three ports and six airports apart from connectivity with the existing ports, Secretary in the Department of Industrial Policy and Promotion, Ajay Dua, said while making a presentation on the project. The DMIC project would be funded through private-public partnership (PPP) and foreign investment. Apart from giving a grant, Japan would invest in the project.

The 1,483 km corridor will span six States &#8212; Delhi, Haryana, Uttar Pradesh, Rajasthan, Gujarat and Maharashtra &#8212; which would be made stakeholders. The project will be implemented by DMIC Development Corporation, which will float Special Purpose Vehicles to implement the projects.

Mr. Kamal Nath hailed Japan's role as the largest contributor of ODA (Overseas Development Assistance) to India and stressed that the DMIC project would significantly enhance bilateral trade and economic ties.

The Japanese Trade Minister said DMIC would accelerate Japanese investment in India, develop India's infrastructure sector, including industrial parks, roads, ports and rail connectivity along the routes and facilitate exports from the regions covered by the corridor. He said a high-level business delegation would visit India in July to look for opportunities.

http://www.hindu.com/2007/04/15/stor...1502101300.htm


----------



## Contrarian

* Lufthansa Technik to cash in on India's air traffic potential*

Vinay Kumar

_"Looking forward to strengthening relationships with Indian carriers and will expand support programmes"

# For Maintenance, Repair, Overhaul of jet engines, to provide crucial components to airlines
# To invest $20 million at the upcoming Rajiv Gandhi International Airport at Shamshabad, near Hyderabad_

NEW DELHI: Hoping to cash in on India's emergence as one of the largest growth markets for air traffic, Lufthansa Technik, part of the Lufthansa Aviation group, plans to position itself as an experienced provider for support services of jet engines and crucial components to airlines in India.

Lufthansa Technik has decided to invest $20 million in the first Maintenance, Repair and Overhaul (MRO) facility for aircraft at the upcoming Rajiv Gandhi International Airport at Shamshabad on the outskirts of Hyderabad.

It signed an agreement with the GMR Hyderabad International Airport Limited (GMR HIAL) last week to set up the new facility that is likely to be ready by 2008-end.

"Today, about 150 to 250 million people in India are seen as potential buyers of flight tickets. In this connection, India is only at the very start of a sustainable development. As the world's leading MRO provider, we are looking forward to strengthening existing relationships with the Indian carriers and will expand our support programmes, including a regional component pool,'' said August Wilhelm Henningsen, Chairman of the Executive Board at Lufthansa Technik, while on a visit to Hyderabad to finalise the agreement with GMR HIAL.

"We see this venture with GMR as the foundation for a long-lasting partnership, and the basis for a state-of-the-art technical cooperation for the benefit of our existing and future airline partners in India,'' Mr. Henningsen said.

The MRO facility would be a crucial step to establish a full-service world-class airport to match Hyderabad's status as the economic powerhouse of the region as well as its geographic location that made it a strategic hub for domestic and international air traffic, said T. Srinagesh, Chief Operating Officer of GMR HIAL.

The facility will provide base maintenance services for A-320 and Boeing 737 family aircraft.

Lufthansa Technik secured many contracts last year for providing total component support and MRO services with Air Deccan, the low-cost airline, Kingfisher Airlines and Jet Airways.

Recognising the need for an experienced MRO partner for further growth of airlines in India where more than 400 new aircraft are on order at present, Lufthansa Technik has set up its Indian subsidiary &#8212; One Stop Airline MRO to supply technical components for the Airbus A-320 fleet of up to 60 aircraft at the Bangalore hub. State-owned carriers &#8212; Air India and Indian Airlines &#8212; also depend upon Lufthansa Technik for various component repairs as well as structural parts such as nacelles and thrust reversers.
http://www.hindu.com/2007/04/16/stories/2007041601761300.htm


----------



## Contrarian

*TCS net profit up 44 per cent*

MUMBAI: Tata Consultancy Services on Monday said fourth quarter net profit soared nearly 44 percent from a year earlier as firms abroad outsourced more office and software work to India.

Tata Consultancy Services, or TCS, said net profit for the three months to March rose to 11.95 billion rupees (272 million dollars) from 8.32 billion rupees in the year-earlier period, according to a notice on the Mumbai Stock Exchange website.

Income in the fourth quarter rose 40 per cent to 52.67 billion rupees.

For the full year, TCS net profit gained 42 per cent to 42.13 billion rupees on income of 189.1 billion rupees, up 41 per cent from the year earlier.

Tata Consultancy shares rose 17.45 rupees or 1.38 per cent to 1,280.1 on Monday while the benchmark Mumbai stock exchange Sensex index ended up 311.50 points or 2.33 percent to 13,695.58.

TCS said it added 218 new clients in the past year, including 43 in the last quarter.

"Our emerging hi-growth services are giving us a superior revenue quality and diversified customer base across markets," said S Ramadorai, chief executive and managing director of TCS.

"We are confident of continuing sustained, profitable growth," he added.

TCS won 12 deals of over 50 million dollars in the year, officials said.

The company disclosed that it plans to set up a new development centre in Morocco, while boosting finance operations in Brazil, Mexico and China.

TCS is part of India's diversified Tata group and employs more than 83,500 people from 60 different nationalities. The Mumbai-based firm earns nearly half of its revenues from banking and financial services in an industry that relies on India's cheap but skilled English-speaking workforce.

The rest of its revenues come from manufacturers and telecommunications customers.

TCS listed on Indian exchanges in August 2004 after raising 1.2 billion dollars. 
http://timesofindia.indiatimes.com/TCS_net_profit_up_44_per_cent/articleshow/1915758.cms


----------



## Contrarian

*Jet to acquire 20 aircraft sfor international flights*


MUMBAI: Jet Airways, which recently took over beleaguered Air Sahara, on Monday announced its expansion plans acquiring 20 wide-bodied aircraft for USD 2.1 billion.

Jet Chairman Naresh Goyal said the aircraft delivery will begin this month. It will comprise 10 state-of-the-art Boeing 777-300 (Extended Range) and 10 A330-200 Airbus aircraft.

Starting with the wide-bodied aircraft, Jet Airways has redesigned everything offering new products in the first, premier and economy classes.

It also holds options of further adding aircrafts of each type and have recently signed to purchase 10 Boeing 787 Dreamliner with delivery commencing in 2011, which will cost the company USD 1.6 billion, Goyal said.

In all, Jet Airways will invest USD 3.7 billion in new aircraft for its aggressive growth strategy, he added.

All facilities offered will be premium and hence a premium will have to be paid by the passengers but the prices will be competitive, a senior Jet Airways official said.

Giving details of the configuration of its Boeing 777-300 ER aircraft, Goyal said Jet Airways has created the first airline suite in the sky offering its customers the ultimate privacy and luxury.

Each of the eight first class suite providing over 26 square feet of usable space features dual sliding doors that gives complete privacy for the passengers, he said.

These suites will have the world's longest first class bed of 83 inches, massive 23 inch flat screen monitors and carefully designed storage areas, including a personal hanging wardrobe and under ottoman stowage.

The suite is also designed to allow dining for two, multiple lighting option, a variable lumbar support and an eight-point massage system.

While Boeing 777-300 ER will be configured in three classes -- first class, premier and economy, the A330 will be configured in two classes of 30 premier and 190 economy seats.

Jet Airways will launch daily services to New York via Brussels in early August the Boeing 777. It also plans daily services to San Fransisco via Shanghai with B777 fleet in the winter of 2007.

The A330 will be deployed on daily Delhi-London services and flights from India to Singapore, Kuala Lumpur, Johannesburg and Toronto via Brussels.


----------



## Contrarian

*Rupee touches another high against US dollar*

MUMBAI: The rupee remained strong against the US currency and hit *another high of 42.32/33 per dollar* in late morning deals despite intervention by the Reserve Bank of India's (RBI) to check rupee appreciation.

In active trade at Interbank Foreign Exchange (forex) market, the local currency resumed steady at 42.51/52 a dollar but later surged strongly during late morning trading to Rs 42.32/33 a dollar, the level not seen since November 1998.

The Cash Reserve Ratio (CRR) hike started kicking in from April 14, the first leg of the latest CRR hike drained another Rs 7,750 crore from the banking system compelling banks to press heavy dollar liquidation, a forex dealer said.

Liquidity in the banking system is likely to tighten in the current week following a government bond auctions last week and the current week's auction by the central bank under the market stabilisation scheme (MSS).

Dealers, however, felt that the Reserve Bank of India's (RBI) intervention in order to check rupee appreciation could step up in the week as the inflation pressure has come down considerably.


----------



## Contrarian

*BSNL may go ahead with GSM expansion plan*

NEW DELHI: BSNL will now be able to place orders for its over Rs 20,000 crore mobile telephony expansion plan as Motorola, which had challenged its disqualification in the tendering process in the Delhi High Court, has withdrawn the case.

On October 9, Motorola filed a petition in Delhi High Court challenging its disqualification in the 45 million lines tender. Due to the court case, BSNL was unable to place any order during the pendency of the petition.

Motorola in a statement said "in view of the tremendous growth taking place in the telecom sector in the country and BSNL's petition of capacity constraints to have its share in this expansion, Motorola has decided to withdraw the case filed in the Delhi High Court".

The US-based company, however, clarified that withdrawal of petition didn't reflect any change in their original position saying "withdrawal of case by Motorola in no way reflects any change in the company's original position that its bid was in compliance with the tender condition".

The Delhi High Court on Monday dismissed Motorola's application as withdrawn. The award, to add 45 million lines in its GSM network, which had gone to Ericsson and Nokia will now be implemented with the withdrawal of this petition.

Ericsson, which was the lowest bidder, would get 60 per cent of the 45 million lines, while the second lowest bidder, Nokia, would get the remaining share of the north east and west zone.

Motorola had earlier challenged the award of the contract to Ericsson saying it was the lowest bidder and BSNL had wrongfully disqualified it on the technical evaluation ground.


----------



## Contrarian

*Essar acquires Canadian Algoma Steel*

NEW DELHI: Ruias owned Essar Steel on Monday announced that they have agreed to acquire Canadian Algoma Steel for an aggregate value of 1.8 billion Canadian dollars to be paid in cash.

Commenting on the deal Shashi Ruia, chairman Essar Global Ltd, an arm for Essar Groups' international operations, said *"we believe Algoma is an excellent addition to our existing steel business and also offers growth potential. This acquisition fits in with our global steel vision of having world class low cost assets with a global footprint."*

Benjamin Duster, Chairman of Algoma's Board of Directors said, "The Board of Directors unanimously supports the Essar proposal as it reflects a significant premium to the historical share price of Algoma."

Algoma Steel is an integrated steel producer based in Sault Ste. Marie, Ontario with steel shipments of 2.4 million tonnes in 2006.

It has a revenue of 1.9 billion Canadian dollars which are primarily derived from the manufacture and sale of rolled steel products, including hot and cold rolled steel and plate.

The offer price of 56 Canadian dollar per share represents a premium of 48 per cent to Algoma's stock price for the 20-day period ending on February 14, 2007 when Algoma confirmed that it was in discussions regarding a potential transaction, a joint statement by the two companies said.

The arrangement must be approved by Algoma's shareholders by the affirmative vote of at least 66 per cent (2/3rd) of the votes cast, in person or by proxy, at a shareholders meeting, and is subject to customary closing conditions including necessary regulatory approvals.

The support agreement provides for payments to Essar in the event that the acquisition is not completed under certain circumstances.


----------



## Contrarian

*BoB extends operations overseas*

AHMEDABAD: In its bid to become a global face of Indian banking, Bank of Baroda plans to expand its international operations.

It is opening 10 new overseas branches in the next three months at Johannesburg, UK, Ghana, Bahrain, Australia, Qatar, Tanzania, Botswana and Port of Spain.

It will establish subsidiary firms in Ghana, Port of Spain and Botswana to undertake banking operations there, while it will have full-fledged branches or representative offices in Australia, Qatar and Johannesburg.

Anil Khandelwal, chairman BoB, said it has applied for opening a branch in Shanghai and its first branch at Ghonzau in China."


----------



## Contrarian

*ITC to invest Rs 15,000 cr in hotel, agri businesses*


NEW DELHI: ITC Ltd, the country's biggest cigarette maker, plans to invest about Rs 15,000 crore in the next 5-7 years in other areas such as hotels, agri-business and FMCG as it seeks to transform its image to a diversified corporate conglomerate.

"The company is giving impetus on segments such as FMCG, agro business, paper and packaging, hotels and the infotech business, for which it has earmarked an investment of Rs 15,000 crore in the next five-seven years," sources said.

As part of ramping up non-tobacco divisions, ITC plans to rev up its social farm forestry projects in states like Andhra Pradesh and Karnataka, which will involve 12 lakh farmers by 2012-14, up from current three lakh.

With almost 60-70% of its raw materials coming from its social forestry projects, ITC has already embarked on a capacity enhancement programme for paper production.

Its Bhadrachalam paper manufacturing plant would produce 4 lakh tonnes annually by April 2008 from the current 3 lakh tonnes and the total Elemental Chlorine Free (ECF) pulp production would increase to 2.2 lakh tonnes annually by the last quarter of 2007, from 1 lakh tonnes.

Sources said ITC is focusing on taking modern retail to rural India and plans to enhance its reach through e-choupals (direct marketing channel for farmers) and Choupal Sagars (rural retail stores).

At present, ITC has about 6,500 e-choupals covering 40,000 villages and 40 Choupal Sagars. Sources said the company's investments would be mainly funded through internal accruals.

Investments on the different non-tobacco divisions, which account for 51% of its total revenues, would be on a need-base basis.


----------



## Contrarian

*UAE firms eye Indian real estate pie*

NEW DELHI: With its booming economy, the Indian market is surely attracting a lot of attention, especially from the United Arab Emirates (UAE).

At a major realty fair in the capital, eight UAE-based property developers showcased their properties and also checked investment options.

Organised by Dubai-based Al Fajer Information and Services, the Asian Real Estate Show (ARES 2007) was held in India for the first time and witnessed a big participation, especially from the UAE.

Some of the renowned real estate companies of the UAE which participated in the fair are Al Fajer Properties, Damac, Star Giga, Sherwood and Best Homes that are investing in hotels, malls, healthcare, housing and IT parks all over the country with the key centres being Mumbai, Delhi, Chennai and Hyderabad.

The three-day fair, which concluded Sunday, had participation also from the US, Malaysia, Singapore, Spain, besides India, among others and attracted nearly 10,000 visitors.

"Nearly 55 percent of the UAE population is Indian. So obviously companies will come to the place to which most of the population of their country belongs. Moreover, with India's booming economy, not only the UAE but the whole world is eyeing the Indian pie!" said Iqbal Siddiqui, exhibition manager from Al Fajer Information and Services.

Siddiqui said the historical connections between the two countries are also one of the reasons why companies from the UAE are, quite naturally, opting to invest here.

"Earlier it was very difficult to do business here but now with the foreign direct investment (FDI) regulations getting relaxed and the potential of the market to grow at 100 percent in the next three to four years, more and more companies are eager to come to India," he added.

Al Fajer Properties, with 12 stalls, was the biggest exhibitor from the UAE.

"India is the most attractive and growing economy with a strong link and history of cross-border trade as witnessed in the recent high delegation visit led by the Prime Minister of UAE and Dubai ruler, Sheikh Mohammad bin Rashid Al Makhtoum," said Shaharam Abdullah, CEO of Al Fajer Properties.

"Hence, we are looking for investment opportunities and further strengthening our existing relations with our partners in the subcontinent," Sharam said.

While companies are looking at investment options in India, there has been an enthusiastic response from Indian consumers wishing to buy properties in the UAE as well.

"34 percent properties sold in the UAE are bought by Indians," said Siddiqui.


----------



## Bushroda

*Penguin Celebrates 20 Years in India *
April 16, 2007
By Kimberly Maul 

At the London Book Fair this week, Penguin Group will celebrate the 20th anniversary of Penguin India. The publisher held a party during LBF at Portes des Indes restaurant in London for the event. 

"Penguin India is a resounding commercial and cultural success," said John Makinson, Penguin Group president, in a statement. "In just 20 years, our colleagues in Delhi have built a publishing company that not only dominates the Indian market, but also stands in comparison with the finest publishing houses in the world. This is truly a birthday to celebrate."

Penguin India holds approximately 23 percent of the market share in the subcontinent, which is more than two times the publisher's closest competition, Penguin said. The publishing list includes authors such as Vikram Seth, Arundhati Roy, Vikram Chandra, Kiran Desai and more. 

"The publishing market in India is buoyant and seeing growth like never before," said Thomas Abraham, CEO and president of Penguin India. "Penguin India is at the forefront of this surge in every respect. Penguin's rapid growth has mirrored the astonishing rise of the Indian economy, and we expect no let upâfrom Penguin or from Indiaâin the years ahead."


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## Bushroda

*India's High-Octane Car Market*

*Business is growing fast and continues to draw investment, but making big bucks in a country smitten with small cars won't be easy *
by Nandini Lakshman 

India has been the scene of some of the most frenetic deal-making, big expansion announcements, and new car launches in the global auto industry. Consider that in the last 18 months alone General Motors (GM), Fiat (FIA), Honda (HMC), Nissan (NSANY), and Hyundai have announced Indian investments valued at roughly $1.5 billion. Ask any auto executive, and he or she will tell you that outside of China, India is the most intriguing emerging market opportunity out there. 

Recent visits by industry bigwigs such as Fiat Chairman Luca Cordero di Montezemolo, Renault-Nissan alliance Chief Executive Carlos Ghosn, and GM boss G. Richard Wagoner, Jr., who arrived in New Delhi on Apr. 16 to help launch the company's Chevrolet Spark) locally underscore the new focus on India's high-speed car market. 

In early April, Ghosn was in India to inaugurate a plant in Nashik jointly run by Renault and Indian carmaker Mahindra & Mahindra (MAHDY) that will produce an economy car called the Logan. The base model will cost $9,700, but Ghosn also hopes to launch an ultra-cheap model in Indiaâthat will retail for about $3,000âlater in the decade. 

*Production to Double*

"In a way, the Indian car industry has arrived," says Jagdish Khattar, managing director of Maruti Udyog (MUDGF), the Indian subsidiary of Japan's Suzuki Motor. What once was a smallish auto market is starting to attract the kind of serious new investment that could help it emerge as a sizable one. Khattar notes that Maruti, Tata Motors (TTM), and Hyundai are starting to achieve serious manufacturing scale with each automaker now producing 200,000-plus units a year. 

Right now, India's entire industryâlocal producers and transplantsâcollectively manufacture about 1.4 million vehicles a year. That's expected to double by 2008, and if it does, India will surpass Britain and Canada in total car production. However, it still will be light years behind China, which is on track to hit 10 million or so in 2007. 

And India's growth dynamics look robust. It is home to a young population, and has rising income levels, an underserved rural market, and an economy galloping along at 9%-plus growth rates. 

*The Ultra-Cheap Challenge*

And while India may be the fabled "back-office of the world", Prime Minister Manmohan Singh's government has big aspirations to boost the country's manufacturing sector. Duties on small cars fell from 24% to 16% in 2006, though taxes remain somewhat high compared to China. The government hopes to see India auto sales jump from last year's $34 billion to $145 billion in 2016. If they do, the domestic auto industry could represent about 10% of India's gross domestic product. 

Still, the fastest growing car segment in India is ultra-cheap small cars, which requires cost-efficient manufacturing and careful cost management to maintain decent profit markets. Looking at the expansion plans of Toyota (TM), Honda, Volkswagen (VLKAY), and even BMW, plenty judge themselves up to the challenge. 

One critical factor to future growth will be whether some small car projects can really go mass market in India. Tata has audacious plans for a four-door, 33 horsepower engine that will go for $2,500 when launched in 2008. If it takes off, India's car sales could easily surpass 6 million units later in the decade. "A big unknown is what a product at the low end could do to the market size," says Ramesh Mangaleswaran, a partner who leads the auto practice at consulting firm McKinsey. 

*Talent Pool*

Gathering small-car making expertise in India is key for automakers both to tap a thriving market for economy carsâand also to export that know-how to other markets. By 2012, the market for vehicles priced under $10,000 is likely to reach 18 million cars, or a fifth of world auto sales, according to Roland Berger Strategy Consultants. That's up from 12 million today (see BusinessWeek.com, 4/23/07, "The Race To Build Really Cheap Cars"). 

India also boasts a cheap, but high-quality labor force with considerable engineering and manufacturing skillsâand the country is starting to build up a big auto components and engineering and design outsourcing sector that is attractive for international players. The India auto parts business is expected to more than triple in annual revenues from $12 billion to $40 billion by 2014. 

Meanwhile, global auto supply players such as Delphi (DPHIQ), Magna International (MGA), and Visteon (VC) are expanding in India, too, to help big-car manufacturers build cheap small cars and also export them to other markets. "In these times, customers are realizing that it's better to share products for different countries," says Prasen Agali, Magna's executive director for India. 

*Projections Too Rosy?*

India's outsourcing sector, led by Tata Consulting Services, Infosys Technologies (INFY), and Wipro (WIT) is also benefiting from additional work from Detroit automakers for engineering services. That's not surprising given that you can hire qualified Indian engineers to design a car chassis for as little as $25 an hour. (Aerospace engineering outsourcing is another growing market for India outsourcing firms.) That one reason Renault plans to set up an engineering center in India. 

What could go wrong? Short-term, there are some worries that India's economy could overheat and then contractâa scenario that would probably lower some of the rosy projections ahead for auto demand and production. Yet few doubt that India will remain a critical emerging market in the years ahead. Just keep your eye on the money rolling in.


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## Bushroda

*GDP growth forecast at 8.5% for 2007-08: CII*
2007-04-16 12:50:24 Source : Moneycontrol.com

The GDP growth projection for 2007-08 has been pegged at 8.5%, said a CII Press Release issued here today. 

The elements in the economy, which have started surfacing towards the latter part of the fiscal 2006-07 are likely to play a moderating role on the growth prospects of the economy, said the Press Release. 

CII believes that factors such as global moderation of growth, inflation, falling demand as a consequence to spiraling interest rates, appreciating rupee and significant supply shortages in the global and Indian economy may restrict the GDP growth in the current year to 8.5%. 

Agriculture is expected to improve its growth performance from 2.7% to 3%, mainly owing to low base of last year and deliberate attempts to increase production of primary articles in response to high prices. However, this sector would continue to be the area to watch out for as this has the potential to become a binding constraint to long term growth prospects for the Indian economy, said CII. 

The strongest factor contributing to growth moderation is going to be the result of repeated monetary interventions being made by the RBI to reign in inflation. These across the board rate hikes yield results with a lag and therefore, CII feels that the effects would be felt well into the new fiscal. The current inflation is the result of mainly supply side shortages and therefore, a modestly tight monetary environment is what should be in place, feels CII. However, there are already signals of demand slowdowns in sectors like automotive, retail banking, etc, as a result of the rate squeeze and therefore, the growth forecasts have accounted for this trend. 

With significant demand compression being resorted to, the growth of Industry and Services are likely to suffer slowdowns to 9.3% and 9.9% in the current year compared with the corresponding values of 10% and 11.2% last year.

Part of the growth moderation would also be owing to the strengthening rupee which is likely to slowdown exports, which had been a driver for the last few years, said the CII release.


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## Neo

April 16, 2007 
*Competition prompting airline mergers*

By Anand Kumar

FINANCIAL year 2007-08 â which began on April 1 â has taken off on a significant note for the Indian aviation sector, with the acquisition by the countryâs leading private airline, Jet Airways, of its smaller rival, Air Sahara. The two state-owned airlines, Air India and Indian, are also set to merge their operations over the coming weeks.

The consolidation in the Indian aviation sector â which grew at over 50 per cent last year â will see the emergence of two powerful new airlines that will dominate the market, the Air India led public airline (which besides Indian, includes Air India Express, a low-cost international carrier, and Alliance Air, which flies to smaller cities), and the Jet Airways-Air Sahara combine.

The two major airlines are expected to control 90 per cent of the domestic full-service market, 70 per cent of total capacity, and about 50 per cent of the total aviation market in India. The move will act like a brake on the growth of low-cost carriers (LCCs), which have been steadily expanding their market share in recent months.

Air Deccan, the countryâs first low-cost carrier, has in a span of four years emerged as the second largest carrier, accounting for a nearly 20 per cent market share. Jet Airways is the largest domestic carrier (with a 25-plus per cent share), while Indian (formerly Indian Airlines) has been pushed to the third position, with less than 20 per cent share. Air Sahara has a mere seven per cent share of the domestic market.

Jet Airways last week agreed to pay over $330 million to acquire Air Sahara. Last year, it had promised to pay $500 million for Air Sahara â part of the Lucknow-based Sahara group â but backed off a few months later when it realised that it had over-valued the smaller airline. Jetâs chairman Naresh Goyal cited delays in government approvals for backing out of the deal.

However, Subroto Roy, the chairman of the $10 billion-plus Sahara group, dragged Jet Airways to court, and got a direction asking both sides to go in for arbitration. A three-judge panel (including a British judge and two Indian Supreme Court judges) then helped the two airlines to hammer out an acceptable solution.

Both the airline bosses are well-connected. Roy is extremely close to Uttar Pradesh Chief Minister Mulayam Singh Yadav, and consequently not in the good books of the Congress. His airline has also not been doing too well off late, and the group was looking for an injection of cash.

Roy is likely to use the funds, raised by the sale of his airline, in diversifying into the real estate sector. His group has ambitious plans to develop over 200 âcitiesâ across the country. The group is also active in finance and media, and runs a slew of television channels. It also produces Bollywood films.

THE new Jet-Sahara combine would have a fleet of nearly 90 aircraft. Though both began in 1993 as domestic carriers, the opening up of international routes to private airlines â only those with a minimum of five years domestic flying experience are allowed to operate international routes â has ensured their expansion into overseas markets.

Jet Airways flies to nearly half a dozen international destinations, including the UK, South East Asia and South Asia. It plans to launch operations to the US in July, operating flights to New York. Air Sahara, which was the other private airline that had got permission to fly to Europe and the US, however, discontinued its services last year.

According to industry observers, Jet might retain Air Sahara as a separate low-cost carrier, flying mainly domestic routes.

Though the Indian government had allowed domestic carriers to open on international routes, it had not opened up the lucrative Gulf sector. But the next few months will see the government allow private airlines to also operate on this route. While only two Indian airlines â Air India Express and Indian â operate flights to the Gulf, there are nearly a dozen international airlines operating on the busy India-Gulf route.

International airports, including the new one at Stansted in London, and Frankfurt, are believed to have approached some of the private Indian operators, urging them to launch services. The international sector is booming, as millions of Indians travel abroad on work and leisure, and millions of NRIs and foreign visitors come to India.

A new aviation industry lobby, the Federation of Indian Airlines (FIA), is pushing the government to allow all private carriers â including LCCs â to operate on lucrative international routes. Liquor baron Vijay Mallya, who owns Kingfisher Airlines, is keen to start international operations, but is bound by the current regulations.

Mallya, who is also a Member of Parliament, has been lobbying with the government to allow newer airlines like his to launch international services. He has, however, said that if the government refused to allow him to do so, he would start an airline in the US and operate services to India. He has already registered a company in the US for this purpose.

Last year, Mallya had also shown interest in acquiring Air Sahara, but had found the $500 million price tag to be too expensive. Critics of last yearâs deal had ridiculed Jet for over-valuing Air Sahara; last weekâs signing of the deal confirms their view, and many in the industry feel that Air Sahara is worth less than $350 million.



*****


THOUGH Indiaâs civil aviation sector is booming, most carriers continue to be in the red. According to the Center for Asia Pacific Aviation (CAPA), the Indian aviation sector is likely to pile up losses of around $500 million for fiscal 2006-07.

Airlines like Jet, which had come out with Initial Public Offerings (IPOs), have seen their stock market valuations drop sharply in recent months. Jetâs shares are trading at a nearly 60 per cent discount to its issue price. While Jet suffered hefty losses in the first three quarters of last year, it has turned a small net profit in the last quarter.

Domestic carriers are engaged in cut-throat competition, offering seats at ridiculously low prices. LCCs like Air Deccan and SpiceJet have been constantly eating into the market share of the major carriers. According to CAPA, LCCs are likely to control nearly 70 per cent of the domestic market in just about three years.

Airlines are taking hits on several other fronts. While air fares are declining rapidly, costs are soaring. Fuel costs have escalated sharply over the last two years, and employee costs are also expanding. India is facing an acute shortage of pilots, and airlines have had to poach pilots from their rivals, offering huge salaries.

Even Indian Air Force (IAF) is facing a squeeze, as many pilots are eyeing lucrative deals in civil aviation. Last week, Indiaâs air force chief Fali Homi Major said the government would release 15 to 20 air force pilots on a regular basis, allowing them to join Air India. The countryâs international carrier is negotiating a deal with the IAF, as it is worried over the crunch in fliers. Air India, which is acquiring a record 68 aircraft from Boeing â for almost $12 billion â plans to launch non-stop flights from India to the US shortly.

The airline has nearly 700 pilots, but is still short of nearly 120. Other airlines also keep poaching on its pilots. India needs about 500 commercial pilots every year, though the training schools are able to produce just around 200. Most airlines now also have foreign pilots in the cockpit.

http://www.dawn.com/2007/04/16/ebr10.htm


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## Bushroda

*Greenpeace to India: Change lightbulbs *
Posted : Mon, 16 Apr 2007 17:16:01GMT 
Author : Energy News Editor 


NEW DELHI, April 16 Greenpeace has asked India to replace incandescent bulbs with compact fluorescent lamps, a way it says India can reduce up to 5 percent of carbon emissions.

The environmental group says India can save 12,000 megawatts of power annually by making the switch.

"The reason we are asking for the bulb to be banned is that climate change is happening and the incandescent bulb is five times less energy efficient than the CFL bulb," said K. Srinivas, energy campaigner for Greenpeace India. The comments were reported by the private NDTV.

The call follows similar moves in Australia, which recently announced a ban on incandescent bulbs. The European Union has also said it will move toward a total ban on such bubs by the end of the decade.

Although India is not bound by the restrictions of the Kyoto Protocol on global warming, it has been cited by countries such as the United States as a reason why Kyoto is ineffective. India counters, however, that its per capita energy consumption is among the lowest in the world.

In 2005 India consumed 520 kilograms of oil equivalent energy per person. The global average is 1,731 kgoe and Europe's average is 4,282 kgoe. The U.S. figure is close to 8,000 kgoe.

Still, as India's economy continues to expand, its energy consumption will rise, too, as will its carbon emissions.


Copyright 2007 by UPI


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## Neo

*Ericsson, Nokia to get $5bn India BSNL contract *

NEW DELHI: Telecom majors Ericsson and Nokia are set to grab a $5 billion contract from Indiaâs Bharat Sanchar Nigam Ltd (BSNL) after Motorola decided to withdraw a legal challenge, a BSNL official said on Monday. 

Bids for the 45.5 million GSM lines contract were ordered by a court to be put on hold after Motorola, which did not figure among the winners, challenged the BSNL in October. âAs things stand now, Ericsson gets 60 per cent and Nokia the rest based on the bids,â an official at state-owned BSNL, who did not wish to be identified, told Reuters. 

âWe will take about 10 days to tie up the loose ends and place the equipment order to the companies.â The official did not give bid details, but a source had told Reuters in October the firmâs bid was at $107 per line, valuing Ericssonâs share of the tender at $2.92 billion. India is the worldâs fastest growing mobile services market, boosted by call tariffs of as low as 2 US cents a minute. It has a total of nearly 121.4 million GSM users after adding 6.1 million new users in March. 

Motorola said on Monday it was withdrawing its case against the award and looked forward to its continued partnership with BSNL, Indiaâs third-largest cellular operator. The US firm said the withdrawal did not reflect any change from its stand on the tender award. 

âIn view of the tremendous telecom growth taking place in the country and BSNLâs petition of capacity constraints to have its share in this expansion, Motorola has decided to withdraw the case filed in the Delhi High Court,â the firm said. 

Over the past one year BSNL, also Indiaâs top telecoms firm by sales, has been facing a critical shortage of GSM equipment that has resulted in it ceding market share to larger rivals Bharti Airtel Ltd and Reliance Communications Ltd. BSNLâs networks are present in 21 of the 23 circles or zones making up the domestic telecoms sector. 

Its smaller state-run sibling, Mahanagar Telephone Nigam Ltd, is in the remaining two â Mumbai and Delhi. Reliance and Bharti have a nationwide presence. The BSNL official said nearly half the new equipment was earmarked for rural areas, where nearly two-thirds of Indiaâs 1.1 billion people live and where networks need improvement. 

Indiaâs cellular services remain largely city-centric more than a decade after their launch but carriers are now furiously expanding into vast swathes of rural India. The five equipment vendors that had submitted technical bids were Nokia, Ericsson, Siemens , Motorola and ZTE Corp. Three of those were shortlisted for financial bids, with Motorola and ZTE not meeting criteria. 

http://www.thenews.com.pk/daily_detail.asp?id=51577


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## Neo

Tuesday, April 17, 2007 

*Indian rupee at near 9-year high, past 42 a dollar *

MUMBAI: The Indian rupee jumped to a near nine-year high on Monday, strengthening past 42 per dollar on big capital inflows and absence of central bank intervention. 

The rupeeâs rise was also aided by higher overnight cash rates which forced banks to sell dollars for rupees to meet funding requirements. The partially convertible rupee ended at 41.85/86, up 1.6 percent from the previous close of 42.51/52. 

It has gained more than 12 percent from a three-year low of 47.04 in July, including a 5.6 percent gain in 2007 making it Asiaâs best performing currency. 

V Rajagopal, head of FX trading at Kotak Mahindra Bank, said strong inflows were putting upward pressure on the rupee. âThe rupee may take a breather around 41.70 as the market positions for the next move,â he said. 

Domestic deposits by overseas Indians increased by $4 billion in 2006/07 while foreign borrowings by companies rose $14 billion, JPMorgan said in a note on Friday. 

Foreigners have bought more than $1.5 billion worth of shares so far in 2007, compared with nearly $8 billion in 2006. 

Indiaâs foreign exchange reserves rose above $200 billion for the first time in early April, which analysts said reflected capital flows and central bank intervention. Analysts believe the rupeeâs rally has been partly fuelled by the central bankâs near-absence in recent weeks from the currency market, to help fight inflation pressures caused partly by high money supply. 

Cash in circulation is running at nearly 21 percent fueling inflation, which has stayed above above central bank projections of 5.0-5.5 percent. 

http://www.dailytimes.com.pk/default.asp?page=2007\04\17\story_17-4-2007_pg5_21


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## Neo

A strong Rupee isn't in economies favour, it will hurt trade and make exports relative more expensive.


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## Bushroda

Neo said:


> A strong Rupee isn't in economies favour, it will hurt trade and make exports relative more expensive.



Reserve Bank of India hasn't got too much of choice at the moment. Their primary concern is to ease increasing demand to curb inflation. Although, RBI has stated that they can stretch the dollar upto 39 rupee range without affecting exports.


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## Bushroda

*Mumbai tops must-see list*
*TODAY's Peter Greenberg reports from the city formerly known as Bombay*
By Peter Greenberg
TODAY Travel Editor
Updated: 4:24 p.m. ET April 12, 2007

Hereâs the bad news: The drive from the airport into Mumbai, India can sometimes take three hours. And, once there, the traffic get worse. 

Now the good news: You still need to go there, and the sooner the better. The country is experiencing near double-digit economic growth. And expansion and construction sites are virtually everywhere. It has an amazing train system. 

More and more airlines are flying there. More hotels and resorts are being built. Beach areas are being developed. 

Welcome to India, on the top of my list of must-experience, affordable and accessible destinations. 

Ever hear of Jet Airways? Kingfisher? Both are relatively new airlines offering great affordable service to and within India. 

How about hotel rooms for $75 a night on the beach? And then thereâs connectivity. India is now a wired nation â and a wireless one. Each month, more than seven million new cellphone numbers are issued. Thatâs right, seven million. 

Of course, thereâs the infrastructure â the sheer size of the country can be daunting, especially the condition of the roads. But no problem â smart travelers pack light and take the train. And for longer journeys, the plane. 

And the plane offers some surprises. Recently I took a flight on Jet Airways (it has more than 300 flights daily to 44 destinations in India and Europe) between Delhi and Mumbai, a flight lasting barely more than 90 minutes. It was a 737, densely packed with passengers. And then, the meal service: linen tablecloths and a three-course meal on china. In coach! 

That was my introduction to Mumbai, formerly Bombay. 

Mumbai has a fascinating history. The Portuguese gave it away in the 17th century. The British inherited it and leased it out for just 10 pounds a year to a private firm, the East India Company. And that company transformed Bombay into the trading headquarters for the west coast of the country. 

And itâs been that way ever since. 

Service in India is intoxicating. You will be spoiled to the point of not being happy anywhere else in the world. There is no language problem. If you want it, it will be provided â from great shopping to every kind of food (at the Taj Mahal Palace hotel in Mumbai, my recommendation is Wasabi, a world class sushi restaurant). 

In a three-day trip, I hit the Chor and Zaveri bazaars (no reason NOT to do your Christmas shopping early). The Chor (âthieves marketâ is a wild circus of shops, mosques, temples, narrow streets and very cool stuff: antiques, clocks, brass lamps, and furniture. (Tip: Donât go on Fridays. Most of the bazaar is closed). Looking for bling? Zaveria bazaar is loaded with gold, silver and jewelry workshops. 

Perhaps the most surprising development in Indian tourism is that the country has quietly (and now proactively) become one of a number of countries (including Argentina and Thailand) actively promoting itself as a dedicated destination for medical tourism. Surgery ranging from hip replacements and heart surgery to kidney transplants offered in state of the art hospitals, with a pre- or post-operative vacation thrown in â for one third to one fourth the cost of the operation back in the United States. 

And the numbers keep growing. As well as the tourists. And where are the travelers coming from? The number of American visitors is slowly growing. But the real tourism push is regional. Consider this: Two years ago, the number of weekly flights between China and India was eight. Today, there are more than 58! 

Remember, thatâs just regional tourism. Now, imagine what those flight connections will be like 18 months from now. 

And a modified government open-skies policy is making more and more flights from the U.S. âand routes â possible. In the U.S. Continental, American and Delta each fly nonstops to India. And more flights are being planned. 

Bottom line: If you can live with the traffic â and yes, it is a challenge â India is worth a visit now. Again, take trains and planes and see a country that is at a delicate, threshold moment of travel and tourismâ where service and attitude have not yet been destroyed by further development.


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## Contrarian

Neo said:


> A strong Rupee isn't in economies favour, it will hurt trade and make exports relative more expensive.



But it makes imports cheaper as well. Its a tightwalk.


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## Contrarian

*Devanahalli SEZ on fast-track*
R Jayaprakash
[ 17 Apr, 2007 0121hrs ISTTIMES NEWS NETWORK ]
RSS Feeds| SMS NEWS to 8888 for latest updates

BANGALORE: The aviation SEZ at Devanahalli, a dedicated zone for aircraft component manufacturing firms, appears set for take-off.

Udyog Mitra &#8212; the government's single-window committee to screen and clear industrial projects to be housed in this SEZ &#8212; recently cleared projects worth Rs 6,000 crore.

The government is also aggressively promoting the Aero SEZ to pre-empt investors from going to the Malaysia, Indonesia, Philippines and Hyderabad whose international airport will become functional before the one in Bangalore.


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## Contrarian

*Sahara to be rebranded as Jet Lite*

MUMBAI: Finally, Jet Airways broke its silence. At a packed press conference addressed by the airlines top brass, the company said that the aircraft that will join its fleet on account of acquiring Air Sahara will be redeployed as a low cost carrier.

To be called Jet Lite, it will be "somewhere between a full service airline and a low cost one,"said Naresh Goyal, chairman, Jet Airways.

Towards end of this year, Goyal added, Jet will launch an international cargo airline and a maintence, repair and overhaul (MRO) facility.

So what really is an airline that's somewhere between low cost and a full service carrier? For starters, it means you don't pay for the food on board.

"In any case, that costs just Rs 40-50 per meal,"said Goyal. Costs, he explained, will instead be driven down by leveraging synergies that will come into play when both Jet and Sahara come together. For instance, training facilities for crew will now be shared between both airlines and prices with suppliers will be renegotiated.

"It is a new segment that we will be catering to,"he said. "The market is growing and our yield per passenger will be higher than that of the so-called low cost airlines," he continued.

Goyal, however, declined to talk on what kind of prices the consumer can expect out of the airline. "We will come with the right product at the right price for the market,"was all he said.

An official at the airline explained that tickets on Jet Lite will definitely be cheaper than that on Jet. He pointed out, that with the induction of new aircraft into the Jet fleet that have been fitted with a lot of next generation creature comforts, the airline may possibly be able to charge a premium on the routes these machines fly.

Jet is taking delivery of 20 wide-bodied aircraft between April and October 2007, besides 10 Boeing 787 Dreamliner aircraft between July 2011 and December 2012. It also plans to negotiate better prices for the 10 Boeing 737-800 aircraft that Sahara ordered last year, Goyal said.

Goyal hinted that the airline may not hesitate to get out of sectors where the pay offs aren't as good. "The two airlines will aim for an annual growth of 15% even though the domestic market is growing faster. We want to grow at a steady rate and are more interested in profitability and managing margins than market share,"he said.

The company also plans to raise up to $400 million over the next couple of months to fund its internatinal expansion plans. Officials at Jet said the amount could be even higher if market conditions were suitable.

The airline is also evaluating various options to fund the working capital requirements it will need to to overhaul Sahara. "We were already talking to bankers before the acquisition was finalised,"said Vic Dungca, a member of Jet's board.


----------



## Contrarian

*As rupee gains, Indian tourists rejoice*


MUMBAI: Ravi Kapoor (name changed) and his wife had booked on Monday a six nights and seven days trip to China at the rate of $749 per person. Had the Kapoors booked their annual vacation in March, the trip would have cost them a little more.

Thanks to the weakening of the dollar against the rupee (it touched a nine year high at Rs 41.85 on Monday), they would have had to shell out only Rs 31,346 per person as against Rs 33,158 in March when the rupee was at Rs 44.27. Add to it, they could buy more foreign exchange and have more cash at their disposal.

With the peak season (April to July) on, a globally distressed dollar is turning out to be good news for Indian travellers in terms of cheaper holidays abroad.

"For individuals and corporate travellers opting for tour packages (listed in dollar pricing) would result in cost savings," said the spokesperson of Thomas Cook (India), whose business is skewed in favour of corporate travellers.

Unlike individual travellers who plan in advance, corporate travellers are impulsive. According to Arup Sen, ED of Cox&Kings,"Holidays could get cheaper by 3-4% and that too for people traveling to US."

The preferred currency for Indian travellers is either the US dollar or the euro keeping in mind the destination they intend to travel to. The falling of dollar against the Indian rupee would mean travellers could buy more foreign exchange. Bear in mind though that RBI rules do not permit buying forex more than 60 days in advance of the date you intend to travel.

Last year, Indians spend $7.5 billion abroad. They splurged largely on confectionery, perfumes and fashion accessories. Says Rajeev Nangia, associate director of TRAC Representations, a company that represents seven international tourism boards like Spain, Sri Lanka, Seychelle, Jamaica and Korea, "The Indian traveller can expect offshore activities to be less expensive while for the travel trade, it could lead to renegotiation of their contracts with their respective overseas partners."

Market expects 5 million Indian tourists to travel during the peak season for overseas holidays - generating an estimated business of Rs 3,250 crore.

If this trend continues, cost of packages of many countries could be slashed, Nangia added. Says Frederick Divecha, senior V-P, SOTC, "Appreciating rupee has benefited Indian travellers."


----------



## Contrarian

*Ringing loud: Telecom user base swells to 189.9m*

NEW DELHI: If global telecom majors are battling tooth and nail for a share of the Indian telecom business, it is with good reason.

The latest numbers from telecom regulator Trai show that for the quarter ended December 2006, a little over 20 million people got themselves cellular phones.

What it means is this: Close to 190 million Indians now have acess to either a landline or a cellular phone. More importantly, over 6.5 million people are buying new phones every month. It's the kind of explosive growth no other nation in the world has seen for a long, long time.

While the subscriber base still has to catch up with China's XXXX million, one thing is clear â the elephant has learnt to run.

The data also shows that the average revenue per user (ARPU) per month for the hugely popular GSM services has declined to Rs 337 from Rs 316 in the previous quarter. As far as CDMA services are concerned, ARPUs were a little lower than what GSM operators could manage.

They earned only Rs 196 per subscriber as against the Rs 215 that they did in the previous quarter.

For Indian telecom operators, this means, they have among the lowest ARPUs anywhere in the world. But most of them aren't too worried yet.

The argument is that as the base of users grow, average ARPUs are bound to decline â at least for a while. In any case, they point out, the volumes of people more than make up for the low amo unts that each of them spend.

Surprisingly though, the number of people getting on the internet in India isn't much to write home about. For the period under consideration, it grew barely 6% and Trai estimates there are only 85.47 lakh subscribers yet.

These subscribers generate an ARPU of Rs 205 for service providers by spending, on average, 190 minutes online. As for broadband services, Indians account for just a little over 20.19 lakh.

The dichotomy in growth is explained by analysts as a function of price. Cellphones are cheap. PCs aren't. They haven't reached the kind of price point yet that will attract a few million people each month, they argue. And what would that price point be? Sub-Rs 10,000 say industry observors.

Computer manufacturers though think selling machines at that kind of price isn't worth their while.

For telecom operators that is good news. Because eventually, most of them hope, people will get on the internet using their cell phones. In turn, that is expected to drive their ARPUs up.

Rural Wireline subscriber base has reduced from 12.56 million in quarter ending September 2006 to 12.48 million in December quarter by registering a negative growth of 0.64%.

The number of Village Public Telephones (VPT) in the country has increased to 5.59 lakhs from 5.52 lakhs recorded a growth of 1.26%. The tele-density in the quarter has reached 17.16 compared to 15.41 at the previous quarter.


----------



## Contrarian

*Videocon to tie up with French co for biotech SEZ*


KOLKATA: Videocon group will form a joint venture with a leading French company to foray into biotech secor. It has already announced plans to set up a biotech special economic zone (SEZ) near Siliguri in West Bengal.

Venugopal Dhoot, chairman of Videocon group, told TOI that the top level officials of the French outfit will call on chief minister Buddhadeb Bhattacharjee on April 28 to elaborate the project.

"We shall form a 50:50 JV with the French outfit. But at this point of time I cannot disclose the name," he said.

Videocon chairman informed that it will invest over Rs 150 crore in the biotech venture, which has already got SEZ status.

The consumer electronics major and the French outfit will bring in Rs 75 crore each into the project. Videocon has already diversified into hydrocarbon sector and now it is hoping to make it big in the biotech arena.

Dhoot pointed out that the French outfit is convinced on the potential of North Bengal in biotech sector.

"The hilly region offers number of unexplored herbs which we can use for biotechnology. We shall have a strong research facility at Siliguri," he added. According to Videocon chief, the project will generate employment for close to 1,000 people.

Dhoot is hoping that the project will kick off by June 2007. "We need close to 100 acres for the project and the land acquisition will not be a problem. I hope that by May we shall buy the required land," he added.

Besides, the biotech SEZ, Videocon has also proposed to set up an IT SEZ in North Bengal and two SEZs in south Bengal.


----------



## Neo

*GM to buy more auto parts from India * 

NEW DELHI: General Motors Corp is looking to buy more auto parts from India for its global operations and also wants a bigger share of the Indian car market, Chief Executive Rick Wagoner said on Tuesday.

GM, the worldâs largest auto maker, aims to have 10 per cent of the Indian market by 2010 and expects sourcing to rise by as much as five-fold over the next two years.

âWe are not only focusing on leveraging our supply base to suit our local needs, we are also looking to source more parts out of India to supply our global operations,â Wagoner said at a business conference in the Indian capital.

Wagoner, who launched the mini Chevrolet Spark, said he expected India would be the worldâs second-fastest growing auto market over the next decade.

âHalf of the population is under 25 years, so thereâs a lot of potential buyers for everything,â Wagoner said.

Annual passenger vehicle sales in India are forecast to nearly double to 2 million units by 2010, on the back of rising incomes and new launches from the worldâs top car makers.

GM, which makes the Corsa, the Chevrolet Optra and Aveo sedans and the Tavera multi-utility vehicle in Gujarat state in a plant with a capacity of 85,000 units, is building a second plant in Talegaon in western Maharashtra state with an initial capacity of 140,000 units.

It has said it may build an engine and transmission plant as well, and that India could become an export hub for mini cars.

âWith India growing its domestic industry, it is going to increase the possibility of India exporting more,â Wagoner said.

But he cautioned there were risks to focusing on exports from low-cost manufacturing centres like India and China.

âI donât rule out that products may be shipped to other centres, but there are exchange rate risks, and you can get different types of trade issues,â he said.

GM is a late entrant to the small car segment in India, which makes up more than two-thirds of annual car sales.

Its Spark, priced at Rs309,000 to Rs389,000 ($7,375-$9,284), will compete with models from Suzuki Motor Corp.âs Maruti Udyog Ltd, Hyundai Motor Co. and Tata Motors Ltd. 

GM will make 2,000 to 3,000 Sparks a month initially, until the Talegaon plant becomes operational in 2008.

âThis product is in the mainstream, where most units are sold in India,â said Wagoner, who met the Indian prime minister and is scheduled to visit GMâs engineering centre in Bangalore. âIt gives us a chance to go after a much bigger volume base.â

GM said earlier this month it would begin producing a mini car âvery soonâ for Europe and Asia. At the New York Auto Show, GM unveiled three concept mini cars, designed in South Korea and assembled in the United States and India.

GMâs other Asian rivals Honda Motor Co and Toyota Motor Corp are also aiming for a significant share of the Indian market, while Volkswagen will begin making up to 110,000 vehicles a year from 2009.

Franceâs Renault, which rolled out its no-frills Logan sedan earlier this month with joint venture partner Mahindra & Mahindra Ltd, has said it may work with its Indian partner on other low-cost options.

http://www.thenews.com.pk/daily_detail.asp?id=51707


----------



## Neo

*Turn down your A/C, power firm tells Mumbai *

MUMBAI: Businesses in Indiaâs financial capital, Mumbai, are being asked to keep down air conditioning use, change light bulbs and put computers on sleep mode in a drive to conserve energy and prevent severe power shortages.

Power supplier Tata Power Co Ltd said the city, which aspires to be a global financial hub and normally enjoys uninterrupted electricity, faced potential power cuts as demand peaks in April and May the hottest months in the Mumbai calendar.

Demand for power has risen with shopping malls, cinemas and new luxury apartments springing up across the city, reflecting an economic boom that encourages spending on everything from refrigerators to plasma televisions.

In a letter sent to businesses this week, Tata Power Co urged office workers not to use electricity at peak times, switch the air conditioning on an hour after starting work and flip off televisions and mobile phone chargers at the plug.

The company called on office workers to replace incandescent bulbs with compact fluorescent lamps to save electricity.

âSevere power shortage together with Mumbaiâs unprecedented lifestyle boom has pushed the cityâs electricity demand beyond availability,â managing director Prasad Menon wrote.

Efforts were on to plug the power deficit, âyet this summer the city is faced with the spectre of power cuts,â he said.

Mumbai, home to many of Indiaâs leading bankers and industrialists, normally has power all year round because of a decades-old network designed to keep going even when supplies are disrupted elsewhere in the region. Tata Power says it has procured 300-350 megawatts more power from other states to meet the shortage during the summer months.

http://www.thenews.com.pk/daily_detail.asp?id=51706


----------



## Contrarian

WTF, Mumbai gets uninterrupted power? 

Here i am in Delhi with friggin power cuts ranging from 2-4 hours everyday in my earlier locality. I dunno how much they cut power now, cuz where i live now in delhi, there is no power outage.


----------



## Neo

April 19, 2007 

*India enjoys record level of takeovers*

LONDON, April 18: The value of Indian-backed foreign takeovers hit a record in 2006 due to Tata Steel's purchase of Anglo-Dutch steelmaker Corus, according to data published on Wednesday that highlighted the financial firepower of corporate India.

Market researcher Dealogic revealed that Indian companies spent a record $23.126 billion (17.025 billion euros) in foreign acquisitions last year.

That marked an increase of 417 percent compared with $4.469 billion in 2005.

Around 57 per cent of the total value of Indian takeovers in 2006 were in the steel and metals sector, according to Dealogic.

Tata Steel snapped up Anglo-Dutch steelmaker Corus last year for $13.7 billion in what remains the biggest-ever foreign takeover by a company in the Asian emerging power.âAFP

http://www.dawn.com/2007/04/19/ebr10.htm


----------



## Neo

malaymishra123 said:


> WTF, Mumbai gets uninterrupted power?
> 
> Here i am in Delhi with friggin power cuts ranging from 2-4 hours everyday in my earlier locality. I dunno how much they cut power now, cuz where i live now in delhi, there is no power outage.



You're still better off compared to karachi or Lahore.  
Only city in Pakistan with uninterrupted supply is Islamabad, population approx. 525.000.


----------



## Contrarian

Wait till i show you this article. The Mofos, the private companies(mofos in this case) actually SELL electricity to other states from Delhi, saying that the demand in Delhi is low during that period, SO they have to sell it, when there are powercuts. This is an exclusive from Times Of India. chk it out...




> *
> Power punch to discoms*
> Saurabh Sinha
> [ 19 Apr, 2007 0206hrs ISTTIMES NEWS NETWORK ]
> RSS Feeds| SMS NEWS to 8888 for latest updates
> 
> 
> NEW DELHI: The citizens of Delhi have called the bluff of those who run the city&#8217;s power sector. In an extensive exclusive poll by TOI, they have exposed that the argument being peddled by private distribution companies and the city power regulator, DERC, to sell 600 MW of Delhi&#8217;s power to other states is badly flawed.
> 
> At a time when the city is reeling under power cuts, power is being sold to Uttar Pradesh and Maharashtra on the ground that Delhi experiences a &#8216;lean period&#8217; in demand between midnight and 6 am and then again from 9 am to noon. Hence, only &#8216;surplus&#8217; power is being sold and big bucks are being earned for the Delhi consumer.
> 
> But this &#8216;lean period&#8217; argument seems to be specious. A citywide survey done for The Times of India by top market researcher.
> 
> TNS has thrown up startling results: an overwhelming majority of Delhiites is experiencing power cuts &#8212; ranging from one to three hours &#8212; during these so-called lean periods. The situation seems to be particularly acute in east and west Delhi, but south Delhi too is not much better off.
> 
> The survey, covering 200 respondents spread across north, south, east, west and central Delhi, showed that 60% had faced power cuts in the wee hours of the morning and two-thirds said they had experienced power cuts between 9 am and noon. If there was, indeed, surplus power at these times, there shouldn&#8217;t have been power cuts.
> 
> Delhiites aren&#8217;t just lamenting the sorry state of affairs. They also seem to be quite clear on what the way out of this mess is. Almost nine out of 10 respondents &#8212; 89% to be precise &#8212; said consumers should have a choice when it comes to deciding who they buy their power from. Having reaped the benefits of competition in sectors like telecom, they are now demanding that there be some competition between power suppliers too.
> 
> Coming back to power cuts, roughly two-thirds said the power outages lasted about an hour or more, which is a fairly clear indicator that most of these cuts were due to load-shedding rather than breakdowns or faults.


----------



## Contrarian

Neo said:


> April 19, 2007
> 
> *India enjoys record level of takeovers*
> 
> LONDON, April 18: The value of Indian-backed foreign takeovers hit a record in 2006 due to Tata Steel's purchase of Anglo-Dutch steelmaker Corus, according to data published on Wednesday that highlighted the financial firepower of corporate India.
> 
> Market researcher Dealogic revealed that Indian companies spent a record $23.126 billion (17.025 billion euros) in foreign acquisitions last year.
> 
> That marked an increase of 417 percent compared with $4.469 billion in 2005.
> 
> Around 57 per cent of the total value of Indian takeovers in 2006 were in the steel and metals sector, according to Dealogic.
> 
> Tata Steel snapped up Anglo-Dutch steelmaker Corus last year for $13.7 billion in what remains the biggest-ever foreign takeover by a company in the Asian emerging power.âAFP
> 
> http://www.dawn.com/2007/04/19/ebr10.htm




Neo, please see the next few articles as well


----------



## Contrarian

*Emaar, MGF buy Singapore company*

MUMBAI: Dubai-based real estate major Emaar Properties and India's MGF group on Wednesday acquired majority stake in Singapore-based RSH Ltd in a deal valued at Sg $227 million (about Rs 630 crore).

The acquisition was done by Golden Ace Pte Ltd, a joint venture of the two companies. It got 61.3% shares at the close of the conditional cash offer, taking its total control in RSH to 87.3%. This includes 42.5% of undertakings it had secured at the beginning of the offer.

MGF group director Siddharth Gupta said "Asia and Middle-East-North African region today is witnessing a retail revolution and this move marks our entry into niche segment of fashion and lifestyle, wherein we aim to address the needs of evolved and discerning customer."

"We will be reviewing RSH's current operations, strategies and future plans, which will take into account the combined strengths of RSH, Emaar Properties and MGF Retail," he said.

http://timesofindia.indiatimes.com/...buy_Singapore_company/articleshow/1922739.cms


----------



## Contrarian

*Essar Global buys Minnesota Steel*


MUMBAI: *In just under a week, the Ruias who control the Essar group have run up a shopping bill of $4 billion buying up two steel companies in North America.*

*Barely 48 hours after they entered into an agreement with Canadian steelmaker Algoma Steel, the Ruias have made yet another acquisition in the US.* On Wednesday, Essar Global, the investment arm of the group, executed an agreement to acquire Minnesota Steel LLC, a US-based company for $100 million.

Minnesota currently has operations in iron ore mining and has made plans to invest $1.65 billion to setup an integrated steel making facility - a first of its kind in the US. Essar will pay close to $100 million in a phased manner as it stands today.

The $1.65 billion that will be needed to build the steel making unit with an annual capacity of 2.5 million tonnes, will be deployed over two years. A vital aspect of this acquisition is that Minnesota controls iron ore reserves in excess of 1.4 billion tonnes.

Apart from the obvious advantage that Essar will gain from this acquisition of building a presence in the North American market, the fact that Minnesota owns iron ore resources is an advantage for the group. An industry expert said, "Essar will not only have an assured supply of raw matrial for the Minnesota Steel unit, but will also feed the Algoma Steel plant, which is at a distance of 200 km from the mines."

Essar Global Chairman, Shashi Ruia said his company was looking forward to expanding operations into North America. "Our investment in Minnesota Steel gives us a cornerstone in the North American market. From this we will further expand our global steel business," he said. Essar has also lined up investments in Iran, Trinidad and Tobago and Vietnam in the steel business.

Essar's buyout of two relatively small companies in North America signals the desire of Indian steel companies to grow in size. Earlier, Tata Steel made paid $12.9 billion to acquire UK-based Corus, which came after steel majors like Mittal Steel consolidated their businesses a few years ago.


----------



## Contrarian

*IA flies high with higher market share*

NEW DELHI: For the first time in five years, Indian Airlines has managed to go ahead of its nearest rival &#8212; Jet Airways &#8212; in terms of revenue passenger kilometre (RPK) per day share. The March figures show that IA has a 21.9% RPK share, which is slightly ahead of Jet's share at 21.7%. In addition, the airline's official statement says it enjoyed the highest seat factor in March at 71.8%, which is higher than the industry average of 69.5%.

While IA is ahead in RPK share, the passenger market share figure shows that Jet is still the leader at 22.9%. But IA claims to be closing in on this front too as the gap is now exactly a percentage point at 21.9%. This is way below the gap they had in January when Jet enjoyed a 25% share while IA was at 17%.

Moreover, IA has witnessed a 20% growth from last March, while some other big airlines have suffered a negative trend.

IA CMD V Trivedi said: "Inspite of our concessional fares that even match those offered by low cost carriers, we have been doing two things &#8212; maintaining ourselves as a trustworthy full service airline. Our aggressive marketing and passenger-friendly offers like giving executive class tickets at slightly more than full fare economy fare will only get better now."

But the RPK market share of its main competition could soon become a major challenge for IA. Once Jet and Sahara start flying as one airline, the shares would add up and give IA a reason to worry.


----------



## Contrarian

*Re appreciation: Centre plans rescue operations*


NEW DELHI: After industry fears of the rupee affecting their exports, the government too acknowledged the impact of the appreciating currency on the competitiveness of Made-in-India goods and services in global markets.

"The appreciation of rupee by 9% is hurting our exporters. They have brought it to our notice. The government will hold a meeting with them to see a way around the situation," commerce minister Kamal Nath said a day ahead of the annual supplement of Foreign Trade Policy.

The rupee has appreciated by over 9% between August 2006-April 2007, raising fears that Indian service providers, including technology firms, and merchandise exporters may lose orders to competitors from other countries. The rupee closed at 42.05 a dollar on Wednesday, up 5.2% in 2007. On Tuesday, it hit 41.62, its strongest since May 1998. The rupee has risen about 5% this year and about 12% since hitting a three-year low last July.

While Nath will deliberate on policy intervention with export promotion bodies next week, how much impact his interventions would have is unclear since the RBI has refused to step in the forex markets as part of its strategy to make imports more attractive and combat inflation.

But Nath believes that with the US dollar becoming cheaper, there could be serious repercussions on imports and also affect the overall balance of payments situation. Already imports have been growing at 35% while exports have registered a growth of 22%. Over the last three months, exports have grown at single digit rates compared to nearly 30% at the start of 2006-07.

The UN Economic and Social Commission For Asia and Pacific (Escap), in its 2007 survey released, said the US dollar was expected to weaken further this year against currencies of east Asia and south-east Asia despite efforts to keep the local currencies down.

On Wednesday, the rupee eased slipping further away from a nine-year high, as oil refiners stepped up dollar purchases and traders pared positions on concerns that the Indian unit's recent rally was running out of steam. The prospect of RBI's intervention also weighed on sentiment, traders said. But traders expect a breather of sorts for the time being, which could spell good news for Nath and exporters.


----------



## Contrarian

*Tatas put Nelito on the block*

MUMBAI: There's a little known company in the Tata stable called Nelito Systems. It develops software products and solutions for the banking industry. Sources have it that Nelito is being put on the block and various options are being looked at.

The Tata group holds a majority 50% stake in the company through Nelco. Nelco's claim to fame is that group chairman Ratan Tata cut his teeth as a manager there in the early seventies. Another 48% in Nelito is held by Sunnynook (AG) and the remaining 2% is held by employees.

The reason why Tata group is reviewing Nelito Systems is because it is not seen as fitting strategically with Nelco's current lines of businesses. These include system integration and product management for industrial controls, defence electronics and VSAT (very small aperture terminals) networks. The logical thing to do, say sources, is exit from the company and unlock whatever value exists in it.

Nelco was earlier looking at transferring its stake to TCS, the group's flagship software services company. The arrangement was part of the plan to bring all the group IT companies under the TCS umbrella.


----------



## Contrarian

*Jindals take BPOs rural
*


BANGALORE: In a unique initiative, the $4-billion Jindal Group, with support from the Karnataka government, is working to take BPOs rural.

After a year of testing a rural BPO model near Bellary, the Jindal Group is now planning to set up Dattahallis (data villages) across north Karnataka. This is the first instance in the state where the benefits of a business process outsourcing will penetrate a rural, agrarian economy.

Jindal's plan is eventually to set up rural BPOs in the vicinity of all its steel, aluminium and energy plants in
India. The Group has 12 steel plants.

The Bellary Dattahalli, the brainchild of Sangita Jindal, chairperson of JSW Foundation, will be expanded from 100 to
1,000 seats over the next year.

The facility, near the steel plant, is an all-women business process outsourcing unit that does basic data entry work. Most of the work done is outsourced by Chennai-based Lason India.

The tasks include filling up medical prescriptions/insurance details in a set format and entering details filled by customers in lucky coupons across various stores.
-----------------------

Reeeally good news.


----------



## Contrarian

*Kolkata airport revamp gets green signal*

NEW DELHI: The much awaited project to modernise Kolkata Airport is finally set to take off. The committee on infrastructure, headed by PM Manmohan Singh, on Wednesday approved the Rs 1,542-crore proposal which will be implemented by the Airports Authority of India (AAI). Aviation minister Praful Patel said the city would get new domestic and international terminals, and the latest communication and navigation systems in next three years.

"The proposal is now being sent to the Centre's Public Investment Board for clearance. Work should begin in two to three months as the first phase of development that will see construction of new terminals has to be over by 2009-10," Patel said. This announcements has put to rest speculation over who &#8212; a private player or a subsidiary of AAI &#8212; would modernise Kolkata airport.

Of the total project cost, Rs 1,300 crore would be spent on building new terminals. Currently, the domestic and international terminals at NSCB have an annual capacity of four million and a million passengers, respectively. After the bigger terminals are ready, this capacity would shoot to 20 million &#8212; 15 million domestic and rest international. An amount of Rs 200 crore would be used for runway expansion, cargo terminal and providing latest communication and navigation services.

Unlike Kolkata, Chennai's wait for a modern airport still continues. The aviation ministry has asked the Tamil Nadu government to clarify its offer of providing more land near the existing airport by May-end. "The offer for land lacks clarity as there's some confusion over the linking area between the existing airport and the land offered. Once this is clarified, we will consult with the state government as to what route the airport development should take,'' Patel said.

The state had earlier spoken in favour of adopting the Delhi, Mumbai model for modernising the airport. But the AAI issued global design bids for the place.

In another move, the ministry has appointed consultants to study the city side development of 35 non-metro airports using the public private partnership route. While these airports would be developed by AAI, the government wants to bid out the city side development at some airports to private developers.


----------



## Contrarian

*AT&T to provide ISP services by end of 2007*


NEW DELHI: AT&T Global Network Services India &#8212; a joint venture between At&T and Mahindra Telecommunications Investment &#8212; said it will start offering internet-based services to companies by year-end.

The communication solutions provider, which already has five multi-protocol label switching (MPLS) nodes in India, on Wednesday announced that it will set up two new nodes by the end of this year. The company will also double the capacity at its existing nodes in Bangalore and Mumbai.

"AT&T will invest more than $700 million in 2007 to accelerate the delivery of global IP services and solutions to businesses and MNCs in the key markets worldwide," said AT&T (India) CEO and MD Sanjiv Bhagat.

"AT&T (India) posted 40% growth in revenue last year and we see similar growth rate to continue in the next two years," said VS Gopi Gopinath AT&T Asia Pacific V-P. "Our focus is on large multinationals. We are best at servicing them and hold the highest market share in this particular segment," he added.

AT&T &#8212; the first foreign telecom firm to secure ILD, NLD and ISP licences under the government's revised policy on FDI which allows up to 74% foreign ownership &#8212; is also in talks for its internet services. The firm at present provides its services to about 300 business customers in India.


----------



## Contrarian

*HCL Tech inks pact with Riyadh-based firm*

PTI[ THURSDAY, APRIL 19, 2007 10:20:37 PM]

NEW DELHI: IT services provider HCL Technologies today said it has entered into an agreement with Riyadh-based Advanced Electronics company to implement IT projects in Saudi Arabia.

Under the agreement, both the companies would jointly work to implement and execute Integrated IT Solutions and Services for business transformation covering the end-to-end of the IT spectrum including systems integration, IT infrastructure Management and BPO among others, a company statement said here.

HCL also inaugurated its IT Management Centre (IMC) in Riyadh, which would bring company's remote IT management delivery model to the Middle East. 
http://economictimes.indiatimes.com...iyadh-based_firm/articleshowcnews/1925679.cms


----------



## Bushroda

*India's GDP to grow nine percent in 2007: UN body*
Posted April 18th, 2007 by Tarique

New Delhi, April 18 (IANS) India's GDP will continue to grow at nine percent, according to a report of the United Nations Economic and Social Commission (UNECOSOC) released here Wednesday, even as the government is aiming at a 10 percent expansion.

Commerce and Industry Minister Kamal Nath along with the UN Under-Secretary General Kim Hak-Su released the report - Economic and Social Survey of Asia and the Pacific 2007. 

"India is expected to grow around nine percent in 2007, under-pinned by a strong performance by the industrial and services sectors," the report said. 

The Indian economy consistently maintained its growth momentum in 2005 and 2006, even though sectors such as agriculture continued to slow down, it said. 

"Inflation, which continued to grow at over six percent and was led by sugar, petroleum products, chemicals and cement, has been contained to a large extent by the government's anti-inflationary measures," Kim told a press conference here. 

The report also lauded India's efforts to bring down fiscal deficit to 3.7 percent of the GDP in 2006 compared to 4.1 percent in 2005. 

"India has also been rated as the 18th largest exporter of services in the world, with its share in the world exports rising from 0.6 percent in 1990 to 1.8 percent in 2004," Kim said. 

However, the report emphasised on the need to improve rural infrastructure such as roads, electricity, irrigation and telecommunications. 

On the issue of gender discrimination and how it adversely affects the economy of the South Asia, Kim said: "The Asia-Pacific region has made good progress in reducing gender discrimination in recent years, but appalling disparities remain." 

He said the region losses $42-47 billion per year because of lack of job opportunities for women and another $16-30 billion is lost every year because of gender gaps in education.


----------



## Bushroda

*Foreign direct investment in India triples to US$16 billion in fiscal year*
The Associated PressPublished: April 19, 2007

NEW DELHI: Foreign direct investment into India nearly tripled to US$16 billion last fiscal year as more overseas investors flocked to the country, a government minister said Thursday.

Indian Commerce and Industry Minister Kamal Nath said foreign direct investment totaled about US$16 billion (â¬11.8 billion) in the fiscal year ended March 31 compared with US$5.5 billion a year earlier.

The numbers do not include the billions of dollars that have been coming into the stock and bond markets.

The minister attributed the surge to India's economic boom and increasing liberalization of rules relating to foreign investment in recent years.

India began switching from a socialist-style economy in the early 1990s, but foreign companies had been wary about investing here because of a limited domestic market and persisting bureaucratic hurdles.

Foreign direct investment flows now account for 6.8 percent of total investment in the country compared with just 0.5 percent three years ago, Nath said.


----------



## Bushroda

*India sets ambitious export target despite appreciating currency*
The Associated PressPublished: April 19, 2007

NEW DELHI: India's government set an ambitious US$160 billion target for merchandise exports in the current fiscal year through March 2008, but traders remained concerned that the rupee's sharp appreciation could hurt exports.

Commerce and Industry Minister Kamal Nath said the target, which assumes a 28 percent growth compared to last fiscal year, was based on the performance over the past three years, during which India's exports nearly doubled to US$125 billion (â¬92 billion).

Nath said the government expects exports to grow at the same pace this year and the year after as well. India's fiscal year runs from April through March.

"In 2008-09, our exports will cross US$200 billion (â¬147 billion)," Nath said.

Trade groups, however, said it would be difficult to sustain the momentum if the Indian currency continues to strengthen, denting the competitiveness of Indian exports.

The rupee has appreciated nearly 10 percent against the U.S. dollar over the past year and reached a nine-year high of 41.90 per dollar earlier this week.

"We would like to see the rupee depreciate to 43 per dollar and stay stable at that level," said G.K Gupta, president of the Federation of Indian Exporters Organization.

Nath said the government factored in the impact of an appreciating rupee while setting the US$160 billion (â¬118 billion) export target for the current year.

"If it's wasn't for the rupee, I would have set a higher target," he said.

In the annual trade policy, the minister added 16 countries, including 10 central Asian economies that were formerly with the Soviet Union, to what is a called the "Focus Market" program that now covers 57 countries. Under the program, exporters can claim duty concessions totaling 2.5 percent of the value of exports to these countries.

The policy also expanded another plan, which gives exporters similar benefits for focusing on certain products. In addition, it proposed to encourage export of high-tech products with fiscal incentives.

These measures, Nath said, will help achieve the export target, which is critical to keep the broader economy on a high growth track.

"Exports are no longer a means to generating foreign exchange. Now exports are drivers of (economic) growth and a source of employment," Nath said, unveiling the 2007-08 trade policy.

Until the early 1990s, India had a socialist economy with high barriers to trade. Exports formed a very small share of national income and were seen mostly as a source of foreign exchange required to meet such imports that were necessary for industrialization at home.

Over the past decade, however, exports have grown quickly as the country switched to a more open, market-oriented economy. A third of India's gross domestic product now comes from exports.

Although, exports did well, rising 25 percent last year, latest data showed imports grew faster, leaving the country with a wider trade deficit at about US$57 billion (â¬42 billion).

Imports in the fiscal year ended March totaled US$181.37 billion (â¬133 billion), compared with US$124.63 billion (â¬91.79 billion) in exports.

The numbers do not include export and import of services such software and call center operations.


----------



## Bushroda

*Indiaâs steel output set to triple by 2015* 
Web posted at: 4/19/2007 9:45:7
Source ::: Agencies

NEW DELHI â¢ India said yesterday it has raised its forecast for steel production, which it expects will expand threefold by 2015 as companies raise output to take advantage of surging domestic and overseas demand. 

"The government had estimated a production capacity of 65 million tonnes by 2010-2011 but now these estimates have been revised to 80 million tonnes," Steel Secretary R S Pandey said. 

"Given a conducive mineral policy framework, this country should be producing 120 million tonnes by 2015-2016 and 180 million tonnes by 2019-2020," Pandey told the Press Trust of India. 

India is currently the world's seventh-largest producer with a capacity of 44 million tonnes while China is at the top with a capacity of 418 million tonnes. 

India occupied the number eight slot in 2005 and ninth a year before, Pandey said and added: "We are witnessing an era of resurgence in the steel sector". 

Indian steel producers are adding capacity to feed demand led by auto makers and construction companies in an economy expanding at an annual pace of nine percent. 

South Korean steel-making giant Posco has signed an agreement to set up a $12bn plant in the eastern Indian state of Orissa which will produce 12 million tonnes by 2020. 

The world's largest steelmaker, Arcelor Mittal, in December signed an agreement with Orissa to build an $8.7bn production plant in the ore-rich state. 

Indian companies are also expanding overseas to increase their size and reach. 

India's Essar group on Monday said it had signed an agreement to buy Canadian steelmaker Algoma for $1.58bn and earlier this year Tata Steel acquired Anglo-Dutch firm Corus for $13.7bn. 

"Tables have turned and Indian companies are on buying spree abroad and they are acquiring companies of much bigger size than theirs," said Pandey, the senior-most bureaucrat in India's steel ministry. 

"We are growing much faster at about 1.5 times what we had anticipated," he said but rejected fears of a glut in the domestic market. 

"All investors have done their homework.. demand is really going to shoot up in India," he added. 

Meanwhile, shares of Tata Steel fell as much as 6.1 per cent in early trade and finally closed at Rs.511.35, down 3.27 per cent. 

The steel major had after market hours on Tuesday announced that it would raise $4.1bn to help fund its acquisition of Corus, of which 12 per cent would come through debt and the rest would be raised from new equity. 

Tata Steel, in the midst of raising funds for its $12.9bn takeover of Corus, said it would raise Rs36.55bn in a rights share issue and Rs43.5bn on a rights basis in an offering of convertible preference shares. 

"The Tata stock reacted as investors were taken by surprise. They had expected an equity dilution in the range of 40-50 per cent and not nearly 90 per cent. Their guess was a 50:50 debt-equity ratio," said analyst Vishwas Diggikar.


----------



## Bushroda

*India emerges as a force in manufacturing exports* 
New Delhi, April 19, IRNA 
India-UN-ESCAP

Apart from the remarkable performance in Information Technology (IT) services, India is rapidly emerging as a force in manufacturing exports, with capital-intensive products featuring prominently", said UN-ESCAP'S survey report. 

Addressing UN-ESCAP's annual Economic and Social Survey of Asia and the Pacific 2007 at a global media here Wednesday, India's Minister of Commerce and Industry, Kamal Nath, said he was pleased to note that this year's survey drew particular attention to the ascendancy of India of economic powerhouse. 

UN-ESCAP's analysis indicates that India's contribution to global growth has nearly doubled in the last two decades. As a result, India is now the world's fourth largest economy in terms of purchasing power parity. 

"Furthermore, the enormous trade potential between India and China is highlighted as one of the key phenomena in coming years. 

There has already been a four-fold increase in trade since 2002, and the still comparatively low absolute value promises dramatic room for future increase", he observed. 

Kim Hak-Su, the UN Under Secretary-General and Executive Secretary of UN-ESCAP, made a presentation of the Survey and Ms. Shalini Dewan, Director, United Nations Information Centre, also spoke on this occasion.


----------



## Contrarian

*Indian company bids for European major*
[12 Apr, 2007 l 1218 hrs ISTlIANS]



LONDON: After Tata Steel acquired Corus, the next Indian company to bid for a global major is Ahmedabad-based Suzlon Energy, which has entered a multi-million-euro bidding war to take over German wind turbine maker REpower.

Suzlon Energy is India's biggest builder of wind farms, and is run by billionaire businessman Tusli Tanti. As increasing global energy needs prompt a shift to alternative sources of energy, the company is well placed to drive the global market.

Suzlon Energy made a bid that was well over the one made by French rival Areva, which had started with a euro 105-a-share offer. Suzlon Energy offered euro 126-a-share, which promoted Areva to revise its offer to euro 140-a-share.

Suzlon Energy on Tuesday responded by upping its offer to euro 150-a-share, worth euro 1.2 billion (820 million pounds). The bidding war needs to be seen in the context of the Global Wind Energy Council declaring that the global market grew by 32 percent last year.

Energy industry sources say that growing interest in the international auction is mainly due to the rapid growth in the demand for wind power at a time when there is pressure on various countries to meet carbon emission targets.

Suzlon chairman Tanti said: "Our offer price of euro 150 per REpower share is very attractive for all shareholders. The decision to increase the offer was taken after careful analysis and review of potential synergies that Suzlon can contribute to REpower given our fully integrated business and control over component level technology and its integration with turbine technology."

"We are happy that the management of REpower has supported our industrial plan and strategy. We have already commenced a working relationship in several aspects of the business and are confident of achieving a steady reduction in raw material costs for REpower. We clearly see REpower emerging stronger and Suzlon will be one of the key catalysts in its future development."

Andre Horbach, Group CEO of Suzlon based in the global headquarters in Amsterdam, said: "REpower remains a highly strategic asset from a geographical as well as onshore and offshore product mix point of view."

"The market has never been a concern for the entire industry and this will likely continue for the foreseeable future. Most of the industry faces challenges of a reliable and cost-efficient supply chain and that is where the synergies with our vertically integrated supply chain are compelling."

He added: "De-bottlenecking will lead to higher volumes for REpower at marginal costs, resulting in better operating margins. Together, we can strive for a top three position in all key wind markets."

"Our existing credit facilities and internal accruals are sufficient to fund our obligations under the offer. We have the support of our partner Martifer with whom we have a deferred purchase agreement."

Suzlon made its latest offer after snapping up 7.7 percent of REpower at up to euro 150 a share. It is bidding in partnership with Martifer, part of Portuguese builder Mota-Engil, which owns a quarter of Repower.

http://timesofindia.indiatimes.com/...ds_for_European_major/articleshow/1896715.cms


----------



## Contrarian

*Citigroup to move more jobs to India*
[11 Apr, 2007 l 1843 hrs ISTlPTI]



NEW YORK: World's largest financial services firm Citigroup Inc on Wednesday said it will eliminate 17,000 jobs or nearly five per cent of its global workforce, even as it plans to move 9,500 positions to India and other low-cost locations.

With an aim to cutting its annual expenses by 4.6 billion dollars in the next three years, the US-based banking giant on Wednesday said that its restructuring plans also include shutting down some offices and relocating employees.

While announcing these large-scale job cuts, Citigroup said that its total headcount would continue to grow in 2007, but the rate of growth, excluding acquisitions, new branches and other investments, would slow significantly.

The company could move a large chunk of its jobs - which could be in the range of 5,00-8,000 - to India, especially for equity research, investment banking and back-office transaction-related activities, sources close to the development said.

The total number of jobs to be eliminated equal more than half of the total number of positions Citigroup added to its workforce in 2006.

More than 9,500 jobs will be moved to lower-cost locations, both domestically and internationally, the company said.

"Ultimately these changes will streamline Citi and make us leaner, more efficient, and better able to take advantage of high revenue opportunities," Citigroup Chairman and CEO Charles Prince said in a statement.

Industry observers said that the job cuts were more aimed at achieving an optimal level of performance, rather than plain cost savings as the company was also aggressively going ahead with acquisition plans.


----------



## Neo

April 20, 2007 
*India targets big rise in exports*

NEW DELHI, April 19: India aims to boost exports by nearly 30 per cent to $160 billion in this financial year despite a surging currency, the government said on Thursday.

India had met its export target of $125 billion for the year to March 31 and set a goal of $160 billion for this fiscal year, commerce minister Kamal Nath said.

The government was aiming for $200 billion in exports for the following year, he said.

The upbeat outlook came despite the Indian rupee's rise of more than five per cent against the dollar since the start of the year on the back of strong foreign investment in India and broad-based pressure on the US currency.

The increase in the rupee's value against the dollar has upset exporters, especially India's flagship outsourcing industry, which makes most of its sales to the United States.

âWe have factored in the appreciation of rupee which keeps on fluctuating. We have already requested (the central) Reserve Bank of India to provide concessional loans to exporters,â Nath told a news conference.The rupee reached its highest level in nine years against the dollar this week. It ended Thursday at 42.10 to the greenback.

The minister said the country received foreign direct investment inflows of $16 billion in 2006-07 compared with $5.5 billion in the previous year.

If re-invested earnings were included, FDI inflows would touch $19 billion, he said.

http://www.dawn.com/2007/04/20/ebr19.htm


----------



## Neo

Friday, April 20, 2007 

*FDI into India nearly tripled to $16 billion last fiscal year*  

NEW DELHI: Foreign direct investment into India nearly tripled last fiscal year as more overseas investors flocked to the country, Indiaâs commerce minister, Kamal Nath, said Thursday.

Nath said that foreign direct investment rose in the fiscal year ended March 31 to about $16 billion from just $5.5 billion a year earlier. The numbers do not include the billions of dollars that have been coming into the stock and bond markets.

Nath attributed the surge to Indiaâs economic boom and increasing liberalization of rules relating to foreign investment in recent years. India began switching from a socialist-style economy in the early 1990s, but foreign companies had been wary about investing here because of a limited domestic market and bureaucratic hurdles.

That perception seems to be changing. Last year, several top global companies, including IBM, General Motors, Nokia and Suzuki, announced major investments in the country. Foreign direct investment flows now account for 6.8 percent of total investment, compared with just 0.5 percent three years ago, Nath said.

Indiaâs central bank will let Temasek Holdings and Government of Singapore Investment raise their stakes in ICICI Bank to 10 percent each, the Mint daily said, Reuters reported from Mumbai. Temasek holds 7.41 percent equity in ICICI Bank, Indiaâs largest private bank, and GIC holds 2.29 percent, the newspaper said Thursday, citing government officials.

http://www.dailytimes.com.pk/default.asp?page=2007\04\20\story_20-4-2007_pg5_17


----------



## Contrarian

* Exim Policy scheme announced to promote high-tech exports*

NEW DELHI: The Government on Thursday announced a host of incentives to boost exports from several sectors including a new scheme covering high-technology products, as part of the annual supplement to the Foreign Trade Policy. The measures would help maintain the 25 per cent compounded growth rate in exports witnessed in the past three years, Union Commerce and Industry Minister Kamal Nath said. With exports accounting for one-third of the country's gross domestic product, he said the intention behind the fine-tuning of the trade policy this year was to encourage new areas such as high tech exports and build on healthy growth rates in farm produce. Some popular schemes have been enlarged to accommodate more product lines.

Processed foods

In order to incentivise agro-exports and ensure more inclusive growth, the Vishesh Krishi and Gramin Udyog Yojna is being expanded to include more farm commodities, food preparations, forest produce and furniture.

Under a new scheme, exporters of agro processed food would receive duty credit scrips equal to 10 per cent of the exported value which could be used for importing post-harvest infrastructure such as cold storages and pack houses. The Minister expects the scheme to shift subsistence farmers to producing marketable surpluses by crop diversification.

Another target for ensuring inclusive growth is the handloom, handicrafts, cottage and tiny industries segments. The new initiatives will provide for tools, machinery and equipment for handicrafts, exemption from duty on effluent treatment plants for handloom and handicraft units and extension of the export obligation period for cottage and tiny industrial sector under the export promotion capital goods scheme from eight to 12 years.

The allocation for the focus product scheme is being increased by more than 50 per cent to Rs. 1,000 crore and seven more product lines have been added. The additions are mica, barley, oats, soyabean, cigar/cheroots, bovine fats and copra.

The focus market scheme too has been enlarged to include 16 more nations including 10 Commonwealth of Independent States (CIS) countries. Mr. Kamal Nath said as the popular Duty Entitlement Passbook scheme would end in March next year, all stakeholders have been asked to submit their views on a more WTO compliant alternative by the end of next month.

Duty-free samples

The Minister also announced a new scheme giving duty credit of 10 per cent on incremental export growth for exports of high tech items. The Commerce Ministry is in dialogue with the Ministry of Science and Technology to draw up a list of items, subject to a maximum of Rs. 15 crore per firm.

Amidst applause from exporters, the Commerce Minister increased the duty on import of duty free samples to Rs. 75,000, made exporters eligible for reimbursement of cost of duty on fuel and special additional duty and scrapped the "present restrictive requirement'' of block-wise fulfilment of export obligations to reduce transaction costs. Those 100 per cent export oriented units, which do not avail themselves of direct tax benefit, are allowed to benefit from the Focus Market/Focus Product and Vishesh Krish and Gram Yajana schemes to encourage employment generation.

Developers and co-developers of SEZs will be entitled to all duty exemption and remission schemes.
http://www.hindu.com/2007/04/20/stories/2007042001551500.htm


----------



## Contrarian

* JPMorgan India opens first fund*

MUMBAI: JPMorgan Asset Management India Pvt. Ltd. on Thursday launched its first fund &#8212; JPMorgan India Equity Fund &#8212; an open-ended diversified equity scheme. The scheme would remain open for subscription till May 18.


----------



## Contrarian

Schenker expands India operations

BANGALORE : Schenker India, part of the global logistics major, has projected a turnover equal to euro 130 million from its operations here this year. Christian Nebel, Managing Director for India operations, told reporters after opening the Bangalore office on Wednesday that Schenker and Bax Global have teamed up recently to offer a wider network across India. Germany based Deatsche Bahn, the parent company of Schenker, last year took over Bax Global, a unit of the U.S.-based security group, Brinks Company, in a 100 per cent buy-out.


----------



## Contrarian

Alcan to open office in Mumbai

PARIS : The Alcan International Network (AIN) announced on Wednesday that it would open a new commercial office in Mumbai to support Alcan's growing opportunities in India. The office will be named Alcan India Pvt. Ltd. The office will be staffed by a commercial team with a high level of product expertise in metals (aluminum, steel, ferro alloys), minerals and chemicals. Through the employment of Indian nationals, the office will provide intelligence in local marketing approaches for Alcan and external partners, says a release.


----------



## Neo

*Indian inflation up *

NEW DELHI: Indian inflation crossed six per cent again according to data released on Friday, putting fresh pressure on the central bank to further tighten its monetary policy.

Inflation in Asiaâs fourth-largest economy reached 6.09 per cent in the first week of the current fiscal year beginning April 1 against 5.74 per cent the previous week, the finance ministry said.

The central bank, which has warned of signs of overheating with the economy growing at around nine per cent, has introduced a slew of monetary tightening measures in recent months and will meet next on April 24 to consider further steps.

Last December, inflation broke above the central bankâs target range of 5.0-5.5 per cent.

âWe think the Reserve Bank of India will again take measures to tighten liquidity but it is difficult to predict which instruments they are going to touch,â said D K Joshi, chief economist at Crisil, Indiaâs top credit ratings agency.

âIt may be another rate hike or some sort of tightening on external commercial borrowing,â he said.

Subduing inflation has also become a top priority for the ruling national Congress government which is fighting elections in Indiaâs most populous state Uttar Pradesh.

âTo contain inflation remains a very high priority and my expectation is it will hover around 5.7 per cent next week,â Finance Minister P Chidambaram told reporters in New Delhi.

He also said the timely onset of the monsoon as predicted in farm-dependent India would help bring down prices of cereals.

The surge in the cost of living was cited by analysts as a key factor in defeat of the party in two state elections in February as well as municipal polls in the Indian capital earlier this month.

http://www.thenews.com.pk/daily_detail.asp?id=52192


----------



## Contrarian

Neo, could you give me some stats. Whats the size of the first four economies of asia?


----------



## Neo

1- Japan, 2- China, 3- India and 4- South Korea
Lemme check the figs from IMF and WB.


----------



## Neo

Saturday, April 21, 2007 

*India losing 12,000 MWs to light bulbs*

NEW DELHI: International energy experts have concluded that old incandescent bulbs are the major source of energy inefficiency and global warming in developing countries. According to estimates India loses almost 12000 MWs of electricity to inefficient light bulbs. 

They believe that electricity consumption in India could be reduced to just 6,000 MWs down from 18,000 MWâs if Indian households switch over to Compact Fluorescent Lights (CFLs). An independent campaigning organisation Greenpeace on Wednesday launched a campaign calling for a phase out of bulbs by 2010 and asked for enactment of law to promote energy efficiency of lighting.

Bulbs consume a large amount of electricity thereby shooting up electricity bills. That also leads to more energy wastage, more coal burnt, greater carbon dioxide emissions and most of all more global warming. In comparison compressed fluorescent lamps (CFL) bulbs use about a quarter of the energy that an incandescent bulb does. 

A 12 watt CFL produces same amount of energy as a 60 watt incandescent bulb, invented by Thomas Edison almost 125 years ago. âChanging of a bulb can reduce Indiaâs carbon dioxide emissions and contribute to climate change by four per cent which is as much as the entire Co2 emission of a country likes Denmark and Pakistan,â said K Srinivas, climate and energy expert. Environmentalists lament that while CFLs make a perfect economic sense, the market was not responding equally. There will not need of power cuts in cities like Delhi and Mumbai if households shift to CFLs or some other energy efficient lighting modes. Former World Bank Chief Economist Nicholas Stern has reported that cost of climate change for India could be as high as 9-13 percent loss in GDP by 2100. India is fifth largest CO2 emitter in the world. 

http://www.dailytimes.com.pk/default.asp?page=2007\04\21\story_21-4-2007_pg4_22


----------



## Neo

malaymishra123 said:


> Neo, could you give me some stats. Whats the size of the first four economies of asia?





Neo said:


> 1- Japan, 2- China, 3- India and 4- South Korea
> Lemme check the figs from IMF and WB.



Malay,

Use this URL to collect data: http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/0,,pagePK:180619~theSitePK:136917,00.html#j


----------



## Contrarian

I mean if India has the third biggest economy in Asia, then why was it written 4th largest in Asia in the article. That is what i wish to confirm, whether our economy is bigger than Korea or not.


----------



## Neo

Russia takes third place after Japan and China. She is widely considered as part of Europe despite 75% of its territory lies in Asia.


----------



## Contrarian

Yep confirmed. India is the third largest economy in Asia. Wonder how this never caught my attention!


----------



## Contrarian

But technically isnt Russia counted in Europe? Or is it counted in Asia?

And we have bigger economy than Russia too.


----------



## Neo

Both! Ural Mountain range South East of Moscow seperates Europe from Asia.


----------



## Neo

malaymishra123 said:


> And we have bigger economy than Russia too.



No, not yet.
You'll surpass Russia somewhere around 2015


----------



## Contrarian

Ah well...2015...that does seem to be a very promising benchmark doesnt it!!
The second best day would be when we surpass Japan


----------



## Neo

*Ircon to take part in multi-billion-dollar railway project *

KUALA LUMPUR: State-owned Indian construction company Ircon will help Malaysia revive a multibillion-dollar rail project that had been shelved in 2003 due to its high cost, Malaysiaâs transport minister said on Saturday, according to a report.

Ircon, which was previously involved in the project, will participate in the construction of a double-track line between the towns of Seremban and Gemas in southern Malaysia, Transport Minister Chan Kong Choy was quoted as saying by the national news agency Bernama.

Chan did not elaborate on details of the financial cost or length of the rail track. Officials at Chanâs office were not available to comment on the report.

The Seremban-Gemas stretch forms part of what had been conceived as Malaysiaâs largest-ever infrastructure project, comprising a 320-kilometer (200-mile) electrified line between the towns of Ipoh and Padang Besar in northern Malaysia and a 310-kilometer (190-mile) line between Seremban and Johor Bahru in southern Malaysia.

The entire project previously estimated to cost 14.45 billion ringgit ($3.8 billion; euro2.9 billion) was put aside in late 2003 after Prime Minister Abdullah Ahmad Badawi took over from former leader Mahathir Mohamad, who had approved it.

The Malaysian government announced last month it was reviving the project, and that the northern link would be implemented by local private construction companies MMC and Gamuda.

Deputy Prime Minister Najib Razak said recently that Malaysia had sent a letter of intent to India to participate in the southern line, and India was expected to appoint a qualified company.

On Saturday, Chan said the whole project is expected to be completed within five years, but declined to reveal the latest estimate for its cost, because negotiations with MMC, Gamuda and Ircon had not been completed.

http://www.thenews.com.pk/daily_detail.asp?id=52353


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## Neo

malaymishra123 said:


> The second best day would be when we surpass Japan



That won't happen in a very long time bro. But in some other fields you will:



> Sunday, April 22, 2007
> 
> *India set to overtake Japan by 2010-2015*
> 
> NEW DELHI: India looks all set to overtake Japan as Asiaâs largest satellite direct-to-home market by next year, says a top Malaysian research house.
> 
> The researchers-Aseambankers also noted that India was also targeted to be Asiaâs leading cable market by 2010 and the most lucrative pay-TV market by 2015.
> 
> Aseambankers in its report was also optimistic about Malaysian Pay-TV operator Astro All Asia Networks plcâs prospects in India. It said based on the profile of joint venture partner Sun Direct, Astro should be looking at a target market of 250 million viewers.
> 
> âHowever, prospects are promising given that the southern Indian states are relatively more prosperous based on the average per capita income, which is 10 percent higher than the national average,â Aseambank claimed in its recent report quoted by the local media in Kuala Lumpur.
> 
> The research unit cautioned Astro about challenges in the Indian market in the form of competition, piracy and red tape.
> 
> It warned that like Indonesia, piracy was rampant in the Indian pay-TV market quoting a survey by the Cable and Satellite Broadcasting Association of Asia estimating piracy losses in India at around $685 million in 2006, the highest in Asia Pacific region.
> 
> âThe fragmented nature of cable TV and intense competition among players has dragged the industryâs average revenue per user to as low as Rs 150 a month,â the media reports said.
> 
> http://www.dailytimes.com.pk/default.asp?page=2007\04\22\story_22-4-2007_pg5_13


----------



## Neo

*Jet pays Air Sahara $90m to begin consolidation*

21 April 2007 

NEW DELHI â Keeping with the deadline set by arbitrators, Naresh Goyal-promoted Jet Airways yesterday paid Rs4 billion ($90 million) to the Sahara India group to officially mark the acquisition of ailing rival Air Sahara.

"The first of the five instalments for the acquisition of Air Sahara have been paid," an Air Sahara official said. The remaining amount would be paid in four equal annual instalments of Rs5.5 billion starting March next year, he added.

A senior Jet Airways official also confirmed that the money had been paid to the Lucknow-based Sahara India group but declined to divulge the actual amount.

Jet had last year already paid Rs5 billion that was lying in a disputed escrow account, bringing the valuation of Subroto Roy-controlled Air Sahara to Rs14.5 billion ($330 million), Air Sahara officials said. 

The development immediately gives Jet Airways access to Air Sahara's fleet of 27 aircraft and a market share of close to 35 per cent for the combined entity in the Indian skies, experts said.

http://www.khaleejtimes.com/Display...l/business_April511.xml&section=business&col=


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## Neo

April 23, 2007 
*Road map for making Delhi a financial centre*

By Anand Kumar

MUMBAI may be Indiaâs financial and commercial capital, but planners and government officials here and in Delhi dream constantly of the city emerging as an international financial centre (IFC).

Earlier this month, an official, high-powered expert committee, virtually threw cold water on these fantasies, and also prepared a road map for the government to follow, if it wants its dreams to materialise.

Percy Mistry, a former World Bank economist â who had advised Prime Minister Manmohan Singh even in the early 1990s, when he was the finance minister and had initiated the reforms process â has not minced words in his critique of financial sector reforms in the country.

Government leaders â both at the centre and in the state government here â have been talking of Mumbai emerging as an IFC and one of the most significant finance hubs between London and Singapore. The committee was given the task of identifying the problem areas that need to be tackled to ensure Mumbaiâs emergence as an IFC, in league with London, New York and Singapore

The committee pointed out that India accessed âinternational financial servicesâ amounting to $13 billion 2005, and the figure is likely to jump to between $50 billion and $70 billion in just about eight years. If India does not carry out major financial sector reforms, it would end up losing all these revenues to other IFCs, notably Dubai and Singapore.

Percy Mistry, who also has his own private investment advisory firm in the UK, believes that India would lose nearly $20 billion every year if it delays opening up the financial sector. Exports of financial services from India can easily overtake IT, communications and telecommunications (ICT) sector exports by 2025, if the right steps are taken now, he says.

Citing an example, Mistry notes that Indian takeover tycoons â including Ratan Tata, who recently acquired Corus of the UK for $13.65 billion, and Kumar Mangalam Birla, who is acquiring Americaâs Novelis for $6 billion â are forced to raise funds abroad because of the lack of depth of Indiaâs financial markets.

The committee has called for key changes in financial sector governance and public debt management. It wants the government to speed up the process of full capital account convertibility of the rupee within the next two years, the governmentâs exit from ownership of financial firms, reduction of its equity stake in public sector banks, the setting up of a robust derivatives market. a currency spot market, opening up Indian capital markets to hedge funds and alternative investment vehicles.

With general elections just two years away, and the Congress facing an uphill task in the ongoing elections to the Uttar Pradesh assembly elections, it is unlikely that the high-powered expert committee report would be acted upon in the near future.

The United Progressive Alliance (UPA) government has already started slowing down the reforms process, and with elections round the corner â and pressure building on the Manmohan Singh government from leftists within the Congress and from outside supporters â the report is likely to be moth-balled.

Finance Minister P. Chidambaram, who has been eager to raise Mumbaiâs international profile, is expected to visit the city this week to push the state government to pursue reforms. One of the biggest stumbling blocks is the presence of an antiquated law in the stateâs statute books â the Urban Land Ceiling Act (ULCA).

Most Indian states have dumped this archaic law, introduced in 1976 when there was an Emergency in the country. The ULCA, a regressive piece of legislation, resulted in acute shortage of land and housing in Indian cities, and also led to rampant corruption.

The federal government has directed the Maharashtra government to scrap the law to avail of benefits under its Jawaharlal Nehru National Urban Renewal Mission (JNNURM). Though the state government is keen on getting funding from the JNNURM, there is intense political pressure on it from vested interests not to scrap the legislation.

The ULCA is valid only in major cities like Mumbai, where there is a huge premium of scarce land. The ULCA encourages rent-seeking politicians and bureaucrats to block proposals for major projects; while professional developers refuse to cut corners and bribe politicians and bureaucrats, crooked ones manage to get official clearances for their projects.

The IFC committee report has emphasised the need for reforms in Mumbai, and has also called for dramatic improvements in the city infrastructure. But bitter political wrangling is jeopardising many major projects in the city, and the government lacks the political will to bring about changes.

Maharashtra is currently facing an acute power crisis, with a daily shortage of over 6,800 MW. Most rural areas get power for around four hours daily, and cities face power-cuts ranging from eight hours to 16 hours. Mumbai, which has been self-sufficient all these years, is likely to face cuts from this year, as politicians from other cities have been demanding load-shedding in the city.

The state government, which has a debt burden in excess of a trillion rupees, is in no position to put up new power plants, or even buy power from other states. Chidambaram will indeed find it difficult to extract any more promises for reforms from the state chief minister, whose government will also have to face the electorate in about two years.

THE other major stumbling block for reforms in the financial sector is the opposition from government institutions, including the Reserve Bank of India, the countryâs central bank, other financial sector regulators, and the state-owned banks and insurance companies, and trade unions.

There is multiplicity of regulators in the financial services sector. The RBI is the banking regulator, the Securities and Exchange Board of India (Sebi) is the capital markets regulator, the Insurance Regulatory and Development Authority (IRDA) looks after the insurance business, and the Forward Market Commission handles commodities.

But many of the roles overlap. The RBI is not able to regulate the co-operative banking sector, as there are other state-level regulators.

The committee is critical about the absence of âBCD (bonds, currency and derivatives market) nexusâ in India. The bond market in India is shallow, and dominated by the government and its inefficient institutions. The government is the largest issuer of bonds, and also the largest investor.

The expert committee notes that there can no successful IFC in the absence of a BCD nexus. While the bond market is dominated by the public sector, there is a glaring lack of currency and derivatives markets as well.

To activate the BCD markets and to encourage private sector participation would require a lot of legislative changes. The UPA government is finding it extremely difficult to even carry out basic financial sector reforms, including opening up the pensions fund business, or letting international firms hike their stake in insurance companies.

Key financial sector reforms have been stonewalled by the left parties, and the UPA government has now virtually given up on getting the legislation passed. Both the Congress and the Bharatiya Janata Party (BJP) are agreed on the importance of these crucial reforms, but in Parliament the two sides have refused to join hands and take on the leftists and getting the bills passed.

The BCD reforms would have to wait for a new government after 2009. But the committee has warned the government that any delays in ushering in these changes would benefit other potential IFCs, including Dubai, which are aggressively pushing ahead with reforms.

Unfortunately for Mumbai, a two-year delay could mean its being left behind, as even Indian industrialists acquiring companies abroad, would not have the patience to wait so long. The world is moving at a rapid pace, but Indiaâs politicians and bureaucrats appear to be marking time in a different era.

http://www.dawn.com/2007/04/23/ebr11.htm


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## Bushroda

*Mumbai makeover plan will cost Rs 332,000 cr*
Yogesh Naik
[27 Mar, 2007 l 0325 hrs ISTlTIMES NEWS NETWORK]

MUMBAI: The state government recently commissioned a plan that would transform the Mumbai Metropolitan Region into a world-class metropolis, comparable with the best in the developed nations, having a vibrant economy. The model, developed by the All-India Institute of Local Self-Governments and the Canada-based Lea International Limited, is ready and will soon be handed over to the state government. 

The plan looks at the entire Mumbai Metropolitan Region, including the area under the jurisdiction of the Brihanmumbai Municipal Corporation and all the satellite regions like Thane, Navi Mumbai, the Mira-Bhayandar belt, the Vasai-Virar belt and the Kalyan-Dombivli and Ambarnath townships. 

The development model looks at drawbacks the region has in terms of infrastructure, power supply, water supply, drainage and real estate and it also suggests the changes that should be made in the rule-book and on the ground to make the city a better place. 

Officials say the Mumbai Metropolitan Region Development Authority (MMRDA) will play a prominent role in transforming the plan into reality as it is concerned about the MMR. The MMRDA will be a supervisory authority for implementing the plan, they explain. 

The TOI had a sneak peek of the plan. It talks about an outlay of Rs 322,000 crore


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## Bushroda

*India economy is now $1 Trillion*
Thu Apr 26, 2007 4:47 PM IST

MUMBAI (Reuters) - India's gross domestic product has topped $1 trillion, thanks to a strengthening rupee, making it the 12th country to achieve the milestone, Credit Suisse said on Thursday.

"Indian GDP at the current price level is 41 trillion rupees. With the rupee appreciating to below 41 against the U.S. dollar, yesterday was the first day for the economy to be a trillion dollar economy," the Swiss investment firm said in a note.

The rupee, which is trading around 40.76 to a dollar, has appreciated about 8.4 percent this year and is up 15.4 percent from a three-year low of 47.04 in July last year.

Stock markets in eight out of 10 countries had risen in the one year after their economies first crossed $1 trillion, Credit Suisse said.

However, India's $944 billion stock market should probably drop because of slower earnings growth for sectors such as autos, banks and cement, before picking up as inflows pick up into fast growing economy.

"Given our outlook... it is likely to go down again in the near future before it sustainably stands above this mark," it said, referring to $1 trillion.

The benchmark BSE stock index was trading up 0.4 percent at 14,278.64 points at 1:05 p.m. (0735 GMT).

It has risen about 15 percent from its early April low on good quarterly results and a central bank decision this week to leave interest rates unchanged at its policy review.


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## Neo

Thursday, April 26, 2007 

*India to have 500 million phones by 2010*

NEW DELHI: India expects to have half a billion phone connections in place by the end of the decade, a minister said Wednesday, as the country tries to better connect its sprawling rural population. The country, home to more than a billion and one of the worldâs fastest growing telecom markets, hopes to expand its number of connections to 250 million by the end of 2007, a jump of more than 30 per cent, Telecom Minister Dayanidhi Maran told reporters. While telecom penetration is increasing in urban areas, vast swathes of Indiaâs rural hinterland remain untapped, Maran said. Out of the targeted 500 million phones by 2010, the minister said he wanted one-fifth to be in rural areas, and called for a huge infrastructure programme to meet the target. To make this possible, 18,000 new communications towers would be built under an infrastructure-sharing programme to support rural telecom connections. Telephone penetration is currently around 25 per 100 people in urban areas, but as low as 1.6 per 100 in rural areas.

http://www.dailytimes.com.pk/default.asp?page=2007\04\26\story_26-4-2007_pg4_22


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## Neo

Bushroda said:


> *India economy is now $1 Trillion*
> Thu Apr 26, 2007 4:47 PM IST
> 
> MUMBAI (Reuters) - India's gross domestic product has topped $1 trillion, thanks to a strengthening rupee, making it the 12th country to achieve the milestone, Credit Suisse said on Thursday.
> 
> "Indian GDP at the current price level is 41 trillion rupees. With the rupee appreciating to below 41 against the U.S. dollar, yesterday was the first day for the economy to be a trillion dollar economy," the Swiss investment firm said in a note.
> 
> The rupee, which is trading around 40.76 to a dollar, has appreciated about 8.4 percent this year and is up 15.4 percent from a three-year low of 47.04 in July last year.
> 
> Stock markets in eight out of 10 countries had risen in the one year after their economies first crossed $1 trillion, Credit Suisse said.
> 
> However, India's $944 billion stock market should probably drop because of slower earnings growth for sectors such as autos, banks and cement, before picking up as inflows pick up into fast growing economy.
> 
> "Given our outlook... it is likely to go down again in the near future before it sustainably stands above this mark," it said, referring to $1 trillion.
> 
> The benchmark BSE stock index was trading up 0.4 percent at 14,278.64 points at 1:05 p.m. (0735 GMT).
> 
> It has risen about 15 percent from its early April low on good quarterly results and a central bank decision this week to leave interest rates unchanged at its policy review.



Real term GDP is still below that ambitious mark, fluctuations in currency only add temporary value to the mass.
By the end of next fiscal year you'll have surpassed the $1 trillion mark.


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## Bushroda

Neo said:


> Real term GDP is still below that ambitious mark, fluctuations in currency only add temporary value to the mass.
> By the end of next fiscal year you'll have surpassed the $1 trillion mark.



You are right!!! the mark is achieved simply by tightening the rupee value. Stable value for dollar is somewhere near 43 rupees. But, RBI at the moment cannot dare to relax the rupee. This is a tight rope walk for RBI. If they keep rupee under check & don't let it float freely it would most certainly affect the exports. OTOH, Almost all the factories are working to their full capacity & any surge in demand would lead to inflation getting out of hand. It would take near about 12-18 months for the situation to stabalize. But anyway, its a huge milestone for Indian economy which was $212 billion in 91. It'll only go above from here.


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## Bushroda

*Welcome To The Trillion Dollar Club*
Ruth David, 04.26.07, 10:59 PM ET

MUMBAI - India joined the elite trillion-dollar economy club this week, but with the economy in danger of overheating, some analysts believe it may not remain a member for long, at least in the short run.

A report from Credit Suisse pointed out that the development was largely the result of the rapid appreciation of the rupee, which strengthened to below 41 against the dollar Wednesday. The Bombay Stock Exchange, with a capitalization of $944 billion, is also inching toward the magic $1 trillion mark.

Given the stresses on the economy, Credit Suisse cautioned that India was unlikely to sustain the new level. âWe would claim, given our outlook, that whatever the capitalization is today, it is likely to go down again in the near future before it sustainably stands above this mark,â it said.

Indiaâs economy is showing classic signs of overheating, Moodyâs Investors Services said in a report Thursday, and inflation levels are higher than acceptable.

Indiaâs economy expanded 9.2% in the fiscal year that ended in April, with huge inflows of foreign money into the markets and companies. But the rapid growth has boosted inflation above 6%. The government has sought to bring it down to a level of 5% to 5.5%.

Moodyâs said the government needs to embark on structural reforms to boost productive capacity.

âSuch trends are neither transitory nor coincidental, nor are they independent from one another. Rather, they are the result of a structural shortfall in the absorptive capacity of Indiaâs economy,â said Kristin Lindow, vice president at New York-based Moodyâs.

India has been criticized in the past for pushing back further privatization and liberalization of key sectors because of opposition from leftist parties in the ruling coalition.

Moodyâs said it was cautiously optimistic about the governmentâs ability to undertake reforms, and hence continued to maintain its âstable rating outlookâ on India.

In its annual credit policy review this week, the central bank took a breather from tightening credit rates to curb inflation. Instead, it introduced steps to ease upward pressure on the rupee thatâs hurting exporters. (See: â India Takes Breather From Inflation Fightâ)

However, Credit Suisse hazarded that the trend toward India was likely to overpower the official efforts to curtail fund inflows.

âWith the likely media and politiciansâ focus about these landmarks, there may just be some more flows toward India even if thatâs not what the policymakers desire in the near term,â it said.

The other countries in the trillion-dollar club are the U.S., U.K., Japan, Germany, China, France, Italy, Spain, Canada, Brazil and Russia.

âThe U.K. is the only economy to stop being a trillion-dollar economy for a while after attaining the status the first time,â the report said.

Credit Suisse said that for 10 economies that crossed the $1 trillion mark in GDP, stock markets rose the year afterward in eight.


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## Neo

Bushroda said:


> You are right!!! the mark is achieved simply by tightening the rupee value. Stable value for dollar is somewhere near 43 rupees. But, RBI at the moment cannot dare to relax the rupee. This is a tight rope walk for RBI. If they keep rupee under check & don't let it float freely it would most certainly affect the exports. OTOH, Almost all the factories are working to their full capacity & any surge in demand would lead to inflation getting out of hand. It would take near about 12-18 months for the situation to stabalize. But anyway, its a huge milestone for Indian economy which was $212 billion in 91. It'll only go above from here.



Good post Happy Feet!

But Imho Indian GDP in 1991 was way above $212 billion. It was somewhere near $400.
Would you please reveal your source?
Thanks!


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## Neo

You might want to read it Happy Feet.

*India's Economic Reforms 1991-2001 *
By Vijay Joshi, Ian Malcolm David Little

http://books.google.com/books?hl=nl...uAIyF&sig=9lYQJBHtWetlPCZ8CLRF86vGGq4#PPP1,M1

*Reintegrating India With the World Economy *
By Thirukodikaval Nilakanta Srinivasan

http://books.google.com/books?hl=nl...ts=tjZTlv3J7c&sig=-gYcotua1D_kEg0BXc_wBvoKbHU


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## Neo

Friday, April 27, 2007 

*Responsible industrialisation*
By Sandeep Banerjee

Since companies are motivated by little else besides making profit, tax breaks could be an effective way of promoting corporate social responsibility as well as spreading the good cheer of industrialisation

Last week, while announcing the annual supplement to the Foreign Trade Policy, Indiaâs commerce minister, Kamal Nath, declared that Indian exporters would be exempt from paying service tax. This declaration will undoubtedly make Indian goods and services a little more competitive in the global arena. It would also help push the countryâs exports a notch closer to the governmentâs articulated target â 1.5 percent of global merchandise trade by 2009. But the significance of the announcement lay elsewhere; it once again underlined the governmentâs reliance on tax incentives to promote economic activity in the country.

Tax breaks have been around in India for quite a while. Nowadays, however, politicians and policymakers of all hues are debating the pros and cons of tax incentives given to industry. This, ever since Special Economic Zones (SEZs) became operational in the country. And thereâs good reason for such debate: the SEZ Act of 2005 conceives of these industrial enclaves as specifically delineated duty-free zones, deemed to be foreign territories for trade operations as well as duties and tariffs. 

So, these enclaves get a slew of direct tax breaks that are staggered over a fifteen-year period. SEZ units pay no tax on export profits for the first five years; fifty percent of their export profits are eligible for tax exemption for another five years and there are no taxes for a further five years on fifty percent of their reinvested profits. There are benefits on the indirect tax front too â SEZ units can procure, duty-free, all their requirements of capital goods, raw materials, consumables, spares, packing materials and office equipment from domestic sources. Of course, these exemptions are applicable only if the manufactured product is exported; all relevant duties â customs and excise â are levied if the product is sold in the domestic tariff area.

The direct tax breaks granted to the SEZs are now being criticised by various non-governmental organisations (NGOs). They say the central government is indulging in doublespeak â invoking the mantra of fiscal prudence to prune the food subsidy bill while simultaneously doling out tax incentives to industry. They also contend that while the government is ready to lose tax revenue for the SEZs, it is not serious about addressing the questions of displacement and loss of livelihood that are almost always necessary corollaries to industrialisation.

In political circles, similar concerns are being raised by Indiaâs Left parties whose support is crucial for the Congress-led United Progressive Alliance (UPA) to hold on to power in New Delhi. In its many missives to the commerce ministry, the Left has repeatedly asked for a paring â if not a complete scrapping â of direct tax incentives given to units in the SEZs. They also object to the government extending tax benefits to developers who build the physical infrastructure in these enclaves. Their contention: instead of foregoing revenue, the government should collect the taxes and spend them on social-sector schemes for rural India. 

Interestingly, in their quest for an equitable taxation order in India, the Left has the most unlikely of allies â the countryâs finance ministry. 

Indiaâs finance minister, P Chidambaram â a man who loves to wear his reformist credentials on his sleeve â, and the Left rarely see eye to eye. But the SEZ issue is perhaps that exception which proves the rule. Almost echoing the Leftâs stand against tax rebates to SEZs, the finance ministry has repeatedly voiced its concern about loss of tax revenue. In fact, the ministry projects revenue loss of Rs1.76 billion in direct and indirect taxes between 2005 and 2010. The Left has often cited these figures to Commerce Minister Kamal Nath and his ministry officials to bolster their argument.

But the commerce ministry has its own counter-logic. It contends that the finance ministryâs revenue loss figures are notional; the exchequer would eventually earn far more from direct and indirect taxes owing to increased economic activity than the estimated tax loss. As regards concession to developers, the commerce ministry argues such incentives already exist for the infrastructure sector. They also maintain that without sops, no developer would come forward to invest amounts in the range of Rs20 billion to set up SEZs.

Despite the Leftâs opposition and the finance ministryâs tentativeness, the commerce ministryâs line has prevailed in the cabinet. The government sees SEZs as a fast-track to industrialisation. They are crucial to Indiaâs strategy of export-led development that seeks to accelerate economic growth and generate jobs. Within this context, tax incentives are central to the success of SEZs in the country. 

But thereâs more to tax concessions than meets the eye. They can be extremely effective instruments for promoting equity if used judiciously and with ingenuity. As India industrialises further, the government of the day will be required to tap into this aspect of tax sops to evenly spread the dividends of economic reforms. 

Currently, India has opted to industrialise in clusters. These clusters are, more often than not, located near large urban agglomerations. While industries situated near urban clusters have certain locational advantages, the government must also encourage corporates to set up factories and SEZs in less developed areas. Since companies are motivated by little else besides making profit, tax breaks could be an effective way of promoting corporate social responsibility as well as spreading the good cheer of industrialisation. This would ensure that no part of the country falls completely out of the development map in the days ahead.

The writer is a journalist with CNN-IBN based in New Delhi. The views expressed are his own. All cited data from Ministry of Commerce and Industry, Govt of India. The first part of this article appeared April 20, 2007. The concluding article will appear next Friday

http://www.dailytimes.com.pk/default.asp?page=2007\04\27\story_27-4-2007_pg3_5


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## Neo

*Pakistan MFN status for India soon*

FRIDAY, APRIL 27, 2007 

NEW DELHI: Pakistan is likely to grant most-favoured nation (MFN) status to India and an official announcement to this effect is likely to be made shortly. This was stated by Islamabad Chamber of Commerce & Industry president Muhammad Nasir Khan on Thursday. 

This is significant as Pakistan has always linked the issue of extending MFN status to India to the resolution of the Kashmir issue. Extension of MFN status means establishment of normal trade relations between two countries leading to free flow of goods. 

At present, Pakistan allows import of goods from India based on a positive list of about 1,000-odd items and restricts trade in all others. If it agrees to extend MFN status to India, it would start trading with India on the basis of a negative list which means that import of all Indian items would be allowed except the handful of items included in the negative list. 

Pakistanâs refusal to extend MFN to India has been a sticking point in the recently concluded SAFTA negotiations, with India approaching the SAARC Secretariat to sort out the issue. Addressing mediapersons at a conference organised by industry body Assocham Mr Khan said, âThe issue of MFN status to India has been sorted out at the highest political level in Pakistan, and this would be conveyed to the government of India soon.â 

Stressing on the need to open Wagah border to promote trade between India and Pakistan, Mr Khan said that Pakistan has wheat surplus to the extent of 40%. With the opening of Wagah border, increased demand for wheat in India could be met through cheaper imports from Pakistan which in turn would help contain inflation. Similar action needs to be taken on cement price in India which has increased substantially. 

He said agricultural exports from Pakistan are likely to get affected as India and Pakistan have different seasons. Therefore, the two countries should sit across the table to make arrangement for exports and imports of agricultural products whenever required, at competitive prices. The Pakistan delegation led by Mr Khan will discuss all these issues with various ministries. He is also scheduled to meet the Prime Minister in New Delhi on Friday. 

http://economictimes.indiatimes.com...status_for_India_soon/articleshow/1962531.cms


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## Adux

Neo said:


> *Pakistan MFN status for India soon*



Good Going Pakistan, About time you returned the favour


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## james02

Looks to me after reading the reviews that the Indian economy is really set to be rising. There might be few hiccups occasionally but that wont be a big hurdle in its progress I think. One can assume that clearly by analysing the stock market trends over the last decade. The way it has got a head start is something unseen in other places I suppose.


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## Neo

*India taxes up from estimates *

NEW DELHI: Indiaâs indirect tax collections including customs and excise during the financial year ended March were Rs2.40 trillion ($5.90 billion), two per cent higher than earlier estimates, the finance ministry said on Saturday. The government had earlier estimated indirect tax revenues at Rs2.36 trillion.

A finance ministry statement said direct tax collections including income tax stood at Rs2.29 trillion during the period, marginally up from earlier estimates. âFor the first time in recent years, the actual collections have exceeded budgeted and revised estimates,â Finance Minister Palaniappan Chidambaram told reporters. He said the higher figures were achieved mainly through better tax compliance, administration and higher GDP growth. Indiaâs GDP grew by an estimated 9.2 per cent in the financial year 2007.

http://www.thenews.com.pk/daily_detail.asp?id=53435


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## Neo

Saturday, April 28, 2007 

*Asian telecom firms plan to build $500m Asia-US cable*

PUTRAJAYA, Malaysia: Asian phone companies unveiled plans on Friday to build a $500 million undersea cable between Southeast Asia and the United States to speed up Internet connections in the region. 

Existing telecoms cables connecting Asia and North America are nearing full capacity while some of the oldest will need to be retired soon, Malaysiaâs communications minister said in announcing the project, to be led by Telekom Malaysia 

The 20,000-kilometre (12,400-mile), fibre-optic cable system would also take a different route from many existing cables to avoid quake-prone areas and a repeat of the disruption to Asian Web access caused by a tremor off Taiwan four months ago. 

âThe low-risk route was designed to avoid the volatile and hazardous Pacific ring,â Communications Minister Lim Keng Yaik said, referring to the ring of sub-sea volcanoes and quake zones around the Pacific Ocean. 

Telekom Malaysia said cable construction would begin immediately and that, when completed, it would directly link seven Asian countries Malaysia, Singapore, Thailand, Brunei, Vietnam, the Philippines and Hong Kong with the United States. 

The cable network would begin carrying commercial traffic by December 2008. 

âThe undersea cable will provide a timely increase in both the capacity and diversity of Internet links between Asia and the US, bearing in mind the disruption caused by the recent Taiwan earthquake late last year,â Telekom Chief Executive Abdul Wahid Omar said in a statement. 

âWhen it begins operations, Internet users can look forward to faster and more reliable international connectivity.â 

The cable consortium comprises 17 firms, mostly from Asia. 

They include AT&T Inc, Indiaâs Bharti Airtel, British Telecom Global Network Services, Thailandâs CAT Telecom, Indonesiaâs Indosat, Philippines Long Distance Telephone Co, Singaporeâs StarHub, Australiaâs Telstra , Telecom New Zealand and the Vietnam Post & Telecommunications Group. 

The consortium had awarded the cable construction contract to Alcatel Submarine Network, a unit of Franceâs Alcatel-Lucent, and to Japanâs NEC Corp. reuters

http://www.dailytimes.com.pk/default.asp?page=2007\04\28\story_28-4-2007_pg5_27


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## Neo

*Auto czars make a beeline for India*

By Anand Kumar

THE last few weeks have seen top honchos of the worldâs leading automobile manufacturers make a beeline for India, either to inaugurate new plants, or to expand their existing production capacities in the country.

The high-profile auto czars who visited India included G. Richard Wagoner Jr, chief executive of General Motors, Carlos Ghosn, the chief executive of Renault-Nissan, Luca Cordero di Montezemolo, the Fiat chairman, and Norbert Reithofer, chairman, BMW AG.

Most of the global auto majors have also unveiled ambitious investments in India in recent months. According to auto industry analysts, these investments â announced by GM, Fiat, Volkswagen, Honda, Nissan and Hyundai â add up to over $1.5 billion in Greenfield projects. Brownfield projects add up to several hundred million more dollars, as all the leading players, including Toyota, Suzuki, Tata Motors, and Honda, plan to expand their facilities. Mitsubishi and Nissan also plan to invest in new facilities in the country.

And why are all the auto majors setting up manufacturing plants in India? The global auto industry is undergoing a major transformation. According to Wagoner, Asia is emerging as the prime driver for automobiles; in about 10 years, the continent would account for 70 per cent of global auto sales.

China and India will not only be the two biggest markets in Asia, but also major production hubs. Automobile giants from the US and Japan hope to export large volumes of cars from India over the coming years.

Santosh Mohan Dev, Indiaâs heavy industries minister, estimates that total auto sales in the country will jump from under $35 billion at present to over $145 billion in under a decade. India is also emerging as a leading auto component producing nation â the sector is likely to balloon from around $12 billion at present to about $40 billion in seven years.

Wagoner said GMâs off-take of auto components from India alone will add up to about $1 billion within five years. All the leading international auto parts manufacturers are also eyeing India as a significant source for supplies and are making arrangements with local partners here.

The relatively low wages in India â a fraction of the costs in Detroit or even in the southern parts of the United States â the burgeoning demand for automobiles, and the steady decline in the western markets are forcing American, European, Japanese and Korean auto firms to set up production facilities in India.

The Indian government is also encouraging international manufacturers to set up plants in the country. Tax laws have been reformed, and the excise duty on small cars today is down to 16 per cent. Car sales are accelerating at about 15 per cent annually, and are expected to grow at a brisk clip for the next five years.

The entry of the sub-one-lakh car by Tata Motors in the next two years will boost demand for small cars even further. The auto sector is expected to account for 10 per cent of the countryâs gross domestic product (GDP) in about 10 years.

Cities like Pune, Delhi, Chennai and Nashik are emerging as major automobile production centres, with a comprehensive network of auto component makers and suppliers as well. Indian universities are also churning out huge numbers of engineers every year, needed to run these workshops.

GM, which is putting up a new plant near Pune in Maharashtra, is doubling its production to nearly a quarter million cars a year in India. Three other manufacturers, including Japanâs Suzuki (which controls Maruti), Koreaâs Hyundai, and Indiaâs Tata Motors also produce nearly a quarter million cars each year.

By next year India will be producing almost three million automobiles every year, as against 10 million by China. At the turn of the century, India was producing 632,000 passenger cars a year and China about 600,000. The last seven years have, however, seen Chinaâs automotive sector expand phenomenally.

The head honchos of global auto giants are now visiting India to see if a similar story will unfold here over the next few years. Ghosn of Renault âNissan inaugurated a new factory recently together with Anand Mahindra of Mahindra & Mahindra at Nashik, where its Logan will roll out. The car costs almost $10,000, but Ghosn was hopeful that the European firm will be able to launch smaller cars costing a third of that price.

Automakers are hoping to lure the millions of two-wheeler riders in India, which could transform the auto business. An average motor-cycle costs about Rs50,000, but if Tata Motors succeeds in producing a car costing Rs100,000, it would dent the two-wheeler business, and millions of Indians would upgrade into the four-wheeler segment.

GM, which has traditionally been selling mid-size cars in India, has also launched its small car, the Chevy Spark, in India, with a price tag of around $7,500. The Spark is expected to take on small cars made by Maruti and Hyundai.

BMWâs Reithofer inaugurated the German luxury carmakerâs plant near Chennai in the southern state of Tamil Nadu. Unlike the other auto majors, BMW will be producing less than 2,000 cars a year; its vehicles, priced between Rs2.5 million and Rs4.5 million, are aimed at the upper-end of the market.

According to Reithofer, demand for luxury cars in India is expected to double in the near future, and BMW was positioning itself to take advantage of the growing demand.

INTERNATIONAL automobile manufacturers are also looking at India as a potential export hub for their vehicles, especially small cars. Suzuki-controlled Maruti is already exporting over 50,000 cars a years, and plans to raise this to 400,000 shortly.

The company is putting up a new factory near Delhi, to produce its sub-compact, the Swift. With several such ambitious expansion and export plans, the auto industry is worried as to whether Indian ports would be able to handle the increased demand.

Many of the auto giants are now scouring around for dedicated car terminals, which could handle huge volumes involving hundreds of thousands of cars. At present, Mumbai and Chennai ports are equipped to handle auto exports, but both the ageing ports are inefficient and would be unable to meet the future requirements.

Automobile manufacturers are now toying with the idea of setting up dedicated port facilities in other areas to ensure smooth movement of their vehicles destined for international markets. Maruti is likely to join hands with Nissan to set up such a facility in Gujarat, to handle nearly half a million cars a year.

Automobile factories located in the Delhi-Haryana region are keen on setting up terminals along the Gujarat coast, as it is the closest for them. Gujarat also has a few major private ports, established recently, and with better infrastructure than Indiaâs major ports such as Mumbai and Chennai.

The government of India is also planning a dedicated freight corridor between Delhi and Mumbai, which would help speed up movement of vehicles to the Gujarat ports. Manufacturers like Ford and Hyundai have their plants near Chennai, and are looking at options for dedicated export terminals.

Domestic giants like Tata Motors and Mahindra & Mahindra are also aggressively looking at the overseas markets, especially in Asia, the Middle East, Africa, Latin America and Europe. Both have been successfully exporting their products to these markets in recent years.

Tata Motors recently launched its mini-truck, the Ace, in Nepal. The company has sold nearly 100,000 mini-trucks in India and Sri Lanka.

http://www.dawn.com/2007/04/30/ebr10.htm


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## Neo

April 30, 2007 
*Softening of Indian trade barriers*

By Parvaiz Ishfaq Rana

India has been denying that she is using non-tariff barriers (NTBs) to curb imports from Pakistan. But a small quantity of 5000 tons cement exported from Pakistan was briefly detained at Nhava Shava port near Mumbai, by the Indian authorities apparently for want of a `quality and standard certificationâ from the Indian Bureau of Standards (IBS).

The threat by Pakistani exporters to divert the cargo to Dubai port finally persuaded the Indians to send IBS officials to the port for piecemeal clearance of the cargo..

Presently, India is facing acute shortage of wheat and cement while Pakistan is well placed to meet the shortfall in both of these commodities. If India does not use NTBs to discourage imports of these two commodities from Pakistan it could help narrow the persistent and widening trade gap in her favour. Last year, the two-way trade stood at $1.3 billion but exports from Pakistan accounted for only for twenty per cent of the overall volume.

Indiaâs current needs are estimated at around three million tons of wheat. And the Indian government has recently removed duties to facilitate imports to meet domestic demand. On the other

hand, Pakistan is expecting a bumper wheat crop of around 23- 24 million tons and after meeting domestic consumption of around 20 million tons, it would be left with a huge exportable surplus of over four million tons . It has also sizeable carry-over stocks from last season.

Similarly, there is a surplus cement production of around six million tons out of the total production of around 30 million tons per annum. Presently 19 cement units are operating and by June this year, another three million tons of cement capacity is expected to be added. Around 22 million tons of cement is consumed in the local market while around two million tons are being annually exported to Afghanistan.

The question however is: have the policy makers made any plan to take full advantage of huge surpluses in these bulk commodities to earn much needed foreign exchange to reduce the yawning trade deficit:? And has the Trade Development Authority of Pakistan (TDAP) been assigned with the task of facilitating exports of these two commodities?

Exporters and manufacturers of these two commodities are tapping foreign as well as Indian markets but without any governmental support and guidance. Some exporters have also shipped around 5000 tons of wheat to India on trial basis. Though the shipment has not yet reached Indian ports, exporters suspect that it may be rejected on some flimsy grounds including higher contents of foreign matter (edible and non-edible). Pakistani wheat normally has one to 1.5 per cent contents of foreign elements but is free from Kernel Bunt disease which is globally considered to be an Indian infection.

. The Indian intiial move to detain Pakistani cement is against Article-8 of South Asia Free Trade Agreement (Safta) under which the contracting Saarc members are bound to provide trade facilitation for mutual trade. A pertinent clause of this article is: âharmonisation of standards, reciprocal recognition of tests and accreditation of testing laboratories of contracting states and certification of products.â

In case, stipulated measures under Safta are not adopted by the Saarc states, there are other options available and which are also in vogue worldwide to facilitate trade between both countries. For ensuring quality and standards, pre-shipment inspection companies are operating and they could also be used by India for imports from Pakistan.

A US study has also given critical appraisal over Indian technical barriers to trade (mandatory standards) and stated that India has enforced mandatory certification for 109 products, down from over 150 products some time back. The mandatory quality certification covers a wide range of products e.g. various food items, food colours, cements etc. Imports of these items are allowed only after Bureau of Indian Standards (BIS) certification and permission to use the BIS mark.

The study further discloses that for certification of these 109 items detailed requirements have been issued under seven different Acts. It is a general complaint that the Indian government publishes Tariff, Additional Tax Rates and Notifications but there is no single official publication that covers all information on tariffs, fees and tax rates as well as the legislations under which formalities are to be completed.

All these are given in different Acts and all Acts have detailed Rules. Most of the requirements emanate from these Rules. This makes the whole system very cumbersome, time-consuming and even confusing. . Hence, there is a total lack of transparency. The standards specified are in many cases stricter than the international standards.

During a recent visit of a 10-member delegation from PHD Chamber of Commerce and Industry (oldest chamber of India) ,its President Mr Bhatia disclosed that there is also a demand of around three million tons of wheat in India. In a meeting with FPCCI the Indian delegation was informed about huge trade imbalance between the two countries and the NTBs issue also came under discussion. An executive member of Saarc Chamber of Commerce, Amjad Rafi told the delegation that time has come that India should remove NTBs and let Pakistani cement and wheat find its way in Indian market to improve bilateral trade imbalance..

But Indian diplomats always respond to Pakistanâs criticism of NTB by raising the issue of Pakistan not giving India Most Favoured Nation (MFN) status despite the worsening adverse trade imbalance against Pakistan. During a recent conference of Saarc chamber on Safta held in Bhurban, the Indian diplomat raised the issue of MFN status and was critical of Pakistan for not implementing SAFTA in letter and spirit.

But Pakistan gives the same treatment to Indian goods as to imports from any other country. All Indian goods at the entry points are treated at par with other imports originating from around the globe. And items in the positive list of 1078 items are allowed to be imported from India without any hurdles or technical barriers.

As a matter of fact, Indian goods not allowed for import reach Pakistani markets through third countries and according to private estimates, the volume of this informal trade is to the tune of $2 billion. During first three months (Jan to March), the official trade volume between both the countries reached $500 million mark and if the momentum is maintained for rest of the year, it would mean that the total trade could touch $2 billion by the end of 2007. But how long can Pakistan sustain widening imbalances in trade with its big neighbour protecting its huge market with non- tariff barriers?

http://www.dawn.com/2007/04/30/ebr16.htm


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## Neo

Monday, April 30, 2007 

*Indian economic bubble about to burst?*

By Penny MacRae

Inflation has become a hot-button political issue for the ruling national Congress party as prices soar for everything from onions to lentils, squeezing the poor, and has been blamed for its defeat in two state elections this year

ITS gross domestic product has topped the trillion-dollar mark and corporate profits are at record highs, but concerns are surfacing that the Indian economic party is in trouble.

Last week, global ratings agency Moodyâs warned that India was showing classic signs of an overheating economy - when output is unable to keep pace with demand.

Moodyâs said overheating symptoms included âhigher than acceptableâ inflation coupled with strong growth, an increasing trade deficit, a credit boom and a rapid currency appreciation. âThe pursuit of macroeconomic stability by Indiaâs monetary authorities is at a critical phase and is important ... for ensuring the long-term sustainability of public finances,â said Moodyâs vice-president Kristin Lindow.

Leading Indian financial magazine Business Today posed the question on everyoneâs minds bluntly on the cover of its latest issue. âAre the good times over?â the magazine asked after the economyâs breakneck ride during which it has expanded by an average of more than 8.5 percent annually for the past four years.

The central bank has been moving aggressively to contain prices, imposing a slew of rate cuts and other monetary tightening measures. But inflation has remained stubbornly above six percent for most of the year and is more than a full percentage point over the bankâs target of five percent.

Inflation has become a hot-button political issue for the ruling national Congress party as prices soar for everything from onions to lentils, squeezing the poor, and has been blamed for its defeat in two state elections this year. The central bank now has made âprice stabilityâ its main goal, switching from its previous policy of seeking growth while tolerating moderate inflation.

Indiaâs economy still is expanding by nearly nine percent, creating capacity problems as industries struggle to keep pace with the demand of an increasingly affluent middle class.

Most factories are operating at full tilt and it could take up to 18 months to bring new capacity on stream, according to the central bank.

Dilapidated ports, roads and airports have exacerbated the situation, making it harder to transport goods. The Indian rupee, meanwhile, which last week touched a nine-year high to break below 41 per dollar, is in âuncharted waters,â said economist Rajiv Malik of JP Morgan in Singapore.

The rupee has appreciated 13.5 percent against the US dollar since mid-2006 as investors have poured billions of dollars into shares and other investments. Much of the rupee surge has come in the last two months. The central bank has adopted a hands-off approach to help check prices by avoiding selling rupees for dollars and pumping liquidity into the local banking system that fuels inflation.

The rupee rise has hit exporters which sell most of their goods to the United States. âThe significant rupee exchange rate needs to be corrected if exports - especially those of small and medium size enterprises - are to remain competitive,â said Malik. Looking ahead, the big worry says Goldman Sachs is that âinflation does not respond to monetary tightening due to supply side constraints while growth slows due to continued rate hikes, raising the spectre of stagflation.â

Stagflation is the term economists use to describe sluggish economic growth coupled with high inflation. A period of stagflation would dash Indian policy-makersâ hopes of achieving double-digit growth levels needed to lift millions out of poverty. Economists now expect growth for this financial year to March 31, 2008 to be slower than last yearâs 9.2 percent.

Goldman Sachs, for instance, forecasts growth of eight percent with risks âskewed to the downside due to the aggressive tightening.â Earnings of automakers, banks and other sectors are all expected to be hit by the monetary tightening in the months ahead. The auto industry has reported car sales at a 13-month low as consumers delay purchases due to higher loan costs.

TK Bhaumik, economist for Indiaâs biggest private company Reliance Industries, said authorities should be cautious of over-zealous tightening. âWhen we had a long period of economic recession beginning in 1996-97, the trigger was the preoccupation with inflation,â he noted. afp

http://www.dailytimes.com.pk/default.asp?page=2007\04\30\story_30-4-2007_pg4_24


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## Neo

* Indiaâs âbreadbasketâ aims to be new IT hotspot *

CHANDIGARH, India: Fed up with traffic snarls and scarred roads, a software engineer in Indiaâs flagship IT hub of Bangalore took to the streets in protest last year doodling on his laptop while trotting along on a bullock-cart.

While Bangalore continues to host the bulk of Indiaâs IT business and is home to more than 1,500 top firms, poor roads and traffic woes are now pushing IT firms to look beyond Bangalore to newer cities like Chandigarh, hundreds of miles north.

Chandigarh is joint capital of the Punjab and Haryana states better known as Indiaâs âbreadbasketsâ. The city is now taking tentative steps to become a new corporate destination. âThe IT industry is excited about Chandigarhâs potential as an emerging IT destination,â said Kiran Karnik, president of the National Association of Software and Service Companies (NASSCOM), Indiaâs top trade body for the IT industry.

âAlready, many IT companies have begun operations there or have plans of doing so, making it one of the new âhot spotsâ for the IT industry,â he told Reuters by email. Infosys, Indiaâs second-largest software company, was among the first to move here and began full operations from its complex spread over 30 acres (12 hectares) in the Rajiv Gandhi Chandigarh Technology Park (RGCTP).

The office currently employs about 1,500 people and plans for more than 5,000 staff to work in the glass-walled building. At least 13 other companies operate from the 123 acres of the park, including Wipro Ltd, Bharti Airtel, Tech Mahindra, and eSys.

âWhen fully functional in the next few years, the park is expected to have 25,000 IT professionals,â said Chandigarhâs IT director Manjit Brar. âIt will be the IT hub of north India.â Current investment in the park, located on the outskirts of the city, is Rs7 billion ($165 million) and in two years it is expected to touch Rs30 billion ($711 million), Brar said.

The city hopes to benefit from a booming market that India dominates. Indiaâs software sector expects exports to rise 33 per cent to $31.3 billion in the fiscal year which ended on March 31, according to NASSCOM. In comparison, the Philippines earned $3.6 billion from outsourcing revenues in 2006.

Over 2001/06, Indiaâs share in global sourcing is estimated to have grown to 65 per cent for IT services and 45 per cent for back-office services like call centres.

While there is excitement about Chandigarh emerging as the new IT stop, there is concern it could go the Bangalore way if it is unable to sustain rapid growth which IT brings to a region.

âThere is no doubt that a lot of people are trying hard to sell Chandigarh as the next Silicon Valley in India,â said Simran Aujla, an IT professional. âBut I am not too sure if a city planned for 500,000 people will be able to sustain the rapid growth. Unless infrastructure keeps pace with growth, Chandigarh may become another Bangalore.â

To begin with Chandigarh is a federally-administered territory with restricted geographical boundaries. Millions of square feet of office space outside city limits are required for it to be a full-fledged IT destination something dependent on permission from the federal government.

But despite obstacles, many lives have already been changed. Before the IT park, local graduates had few options to get well-paid jobs near home. They would either go to IT centres like Gurgaon and Greater Noida on the outskirts of New Delhi, or travel hundreds of miles down south to Bangalore.

âI was very tense in my college days because being the only daughter, I knew my parents would never let me go to Bangalore,â said Amrita Singh, who works for a multinational company.

âI was afraid my degree in engineering would just go waste but today I have no dearth of job offers with so many big IT firms flocking to Chandigarh,â she added.

Real estate agents, too, are excited at rising property Prices. âThe IT park has pushed up real estate prices like never before,â said Amarjit Singh. âA small piece of land quoted for around Rs2.5 million ($59,270) a few years ago is today unavailable for 10 million Indian rupees ($237,100).â 

http://www.thenews.com.pk/daily_detail.asp?id=53706


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## Neo

*BD to discuss Myanmar gas link to India *

DHAKA: Bangladesh said on Monday it was ready to negotiate an Indian proposal to bring natural gas from Myanmar by laying a pipeline through Bangladesh territory.

âWe are ready to negotiate the proposal to obtain best possible benefit from the project,â Iftekhar Ahmed Chowdhury, adviser to the army-backed interim government and head of the foreign affairs ministry, told reporters.

He was speaking after returning from a bilateral visit to Myanmar. Under the project, India will build a 290-km (181-mile) pipeline through Bangladesh to connect offshore gas fields in Myanmar to Indian states, officials said.

The proposed pipeline will enter Bangladesh through its eastern Brahmanbaria border from the Indian territory of Tripura and cross into West Bengal through northern Rajshahi border. Bangladesh and India agreed in principle in 2005 on a three-nation gas pipeline project, allowing India to bring natural gas from Myanmar and Bangladesh to increase trade with landlocked Bhutan and Nepal using Indian territory.

In the same year Bangladesh, India and Myanmar agreed to finalise soon details of the gas pipeline project, which would cost more than $1 billion. But work on the project has been delayed due to differences between Dhaka and New Delhi over the trade and corridor issues. If the plan is implemented, about $350 million will be invested in Bangladesh and it will get nearly $100 million as a carrier fee per year, energy officials said. Bangladesh will also get another $100 million as a one-off âright of wayâ charge and $25 million each year for sharing in its management, the officials said. 

http://www.thenews.com.pk/daily_detail.asp?id=53707


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## Neo

*âIndia must industrialise to create jobsâ *

NEW DELHI, India: India must step up industrialisation to cut dependence on the farm sector, Prime Minister Manmohan Singh said on Tuesday, in a rebuff to critics who oppose such development.

âThere are severe limitations to expanding employment opportunities in agriculture on a large scale,â Singh told a college campus audience. âA developing country like ours cannot afford to view industrialisation as a negative phenomenon,â Singh said.

His comments came amid increasingly violent demonstrations for greater economic and social rights with leftist rebels carrying out deadly attacks and villagers opposing setting up of industries in many parts of the country.

Reliable unemployment data is not regularly available, and does not include millions of under-employed people but economists say joblessness is a major problem. Agriculture which contributes less than 25 per cent to total GDP employs nearly 60 per cent of Indiaâs 1.1 billion population. Nearly 30 per cent of people are employed in the services sector.

âWe have to find ways and means to accelerate the process of industrialisation and to ensure this process is sufficiently labour intensive,â Singh said. Singh also expressed concern over the uneven pace of industrialisation in the country, where the economy is growing at more than eight per cent.

âI am also puzzled by the persisting regional imbalance in industrial development and urbanisation in India,â he said. âThere are areas of concern, like displacement of people, like environmental damage, like alienation of the working class. These concerns must be dealt with.â

The Asian Development Bank warned last month that unemployment rates could hit growth rates in Asia by several percentage points. The bank estimated at least half a billion people out of a workforce of 1.7 billion in the region were unemployed or under-employed. 

http://www.thenews.com.pk/daily_detail.asp?id=53821


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## Neo

May 02, 2007 
*Indian trade deficit*

NEW DELHI, May 1: Indiaâs trade deficit widened to nearly $57 billion in the year ended March as a surge in the cost of imports led by oil offset a record year for exports, government data showed on Tuesday.

Exports rose 23.9pc to a record $124.6bn, in line with a target of $125bn for the year, while imports jumped 29.3pc to $181.4bn led by oil, the government said.

The countryâs crude oil imports jumped 30.3 per cent to $57.3 billion in the year ended March, the government said.

India, which imports almost two thirds of its petroleum needs, had a trade deficit last year of $39bn.Last month, trade minister Kamal Nath forecast exports by India would grow to $160bn in the year started April 1 and would reach $200bn by 2009.

http://www.dawn.com/2007/05/02/ebr8.htm


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## Neo

Thursday, May 03, 2007 

*Indiaâs Suzlon clinches biggest ever wind turbine contract*

NEW DELHI: Indiaâs Suzlon Energy has clinched its single biggest contract to supply wind turbine capacity to a US wind power developer, the company said Wednesday. 

Suzlon Wind Energy Corp, a unit of Denmark-based Suzlon Energy A/S (SEAS), has signed a contract for 400 megawatts (MW) of wind turbine capacity with PPM Energy of Portland, Oregon, a statement said. 

âThis agreement is Suzlonâs single largest contract for wind turbine capacityâ so far, said Suzlon, ranked as the worldâs fifth leading wind turbine manufacturer with more than six percent of global market share. Suzlon gave no financial details of the deal. PPM is one of the largest wind power developers in North America and part of the Iberdrola group, the world leader in wind power with more than 6,500 MW of combined wind power capacity. 

http://www.dailytimes.com.pk/default.asp?page=2007\05\03\story_3-5-2007_pg5_28


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## Neo

*India, China border trade pass reopens month ahead of schedule *

GUWAHATI, India: Asian giants India and China have reopened trade via a famed alpine Silk Road route a month earlier than scheduled in response to demands from businesses on both sides, a local official said on Thursday.

âTrading was earlier scheduled to begin June 1 and last till September 30,â said Saman Prasad Subba, director of industry and commerce in the tiny state of Sikkim, wedged between India and Tibet.

âBut the two countries agreed to demands by traders to allow business from May 1 to November 30,â Subba told AFP by telephone.

âA total of 29 Chinese traders came to the Indian side with items while 13 people from India crossed over to China in the first two days of trading.â 

India and China first started trade across the 15,000-feet (4,545-metre) Nathu La Pass, 52 kilometres (32 miles) east of Sikkimâs capital Gangtok, last July as part of efforts to mend ties dogged by a bitter border war in 1962.

Indian officials say the move marked Beijingâs recognition of Indiaâs sovereignty over previously disputed Sikkim state.

Tibetâs commerce department says bilateral trade last year through Nathu La totalled about 190,000 dollars.

While about 900 Chinese traders crossed into India through the border marked by a rusty barbed wire to the bazaar of Sherathang, 400 Indians headed to the Renqinggang interim market in Tibet.

Businessmen from both sides of the border were now seeking a broadening of the list of items traded through the Nathu-La pass.

At present India imports 15 items from China including silk, yak pelts and horses, and exports 29 goods that include textiles, tea, rice, vegetables and herbs.

âThe present list of import-export should be widened. The list of goods notified for transaction is a list prepared long ago and has to be upgraded,â said S K Sarda, president of the Sikkim Chamber of Commerce. âWe understand the governments of the two countries were actively considering revising the tradable items list to make business at the border more robust and vibrant,â he said.

The Sikkim government will also urge New Delhi to sign a pact with Beijing to allow tourists to use the border pass.

âAt present, only traders are allowed to cross over and if tourism is opened it would be economically beneficial for both countries,â Subba added.

http://www.thenews.com.pk/daily_detail.asp?id=54143


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## Neo

*IOC plans exports to Pakistan *

NEW DELHI: State-run Indian Oil Corp (IOC) is looking to export some petrochemical products to Pakistan, Indiaâs junior oil minister said on Thursday. Sales of purified terephthalic (PTA), used in the production of polyester, were being pursued, he said. âThe proposal involves transport of PTA by road and by railing containers across Wagah border,â Dinsha Patel told lawmakers. The Wagah crossing is a major border transit point near the Indian city of Amritsar and Pakistanâs Lahore. In March 2006, Islamabad allowed Pakistan State Oil to import 10,000 tonnes of Group II lube oil base stock from IOC on a one time basis. 

http://www.thenews.com.pk/daily_detail.asp?id=54149


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## Neo

Saturday, May 05, 2007 

*India joins ranks of regular wheat importers*

NEW DELHI: Faced with a dwindling grain bin, India is tapping the costly import market for the second year in a row in what could be a pattern: the country is emerging as a regular purchaser of the grain. 

The government, seemingly unable to make deals to buy wheat from farmers in the middle of the peak marketing season, on Monday floated a tender to import 1 million tonnes of wheat. 

Hours earlier, the countryâs state-run grains agency, the Food Corp of India, opened a tender to import wheat through a call option. 

The aim was to hedge against possible expensive grain imports by asking firms to agree to prices in advance in return for a non-refundable premium. 

But the move was greeted coolly by the market because of rigid import conditions. Two global bidders offered paltry quantities at high prices, ranging between $298 and $329 per tonne for deliveries later in the year. 

âIt looks like wheat imports will be a regular feature now as it will be difficult for the government to buy enough grain from farmers, who have become smart,â said Atul Chaturvedi, president of Adani Exports Ltd. 

The country currently has 12 million tonnes of wheat stocks, including wheat purchases from farmers and stocks carried over from imports made in 2006. 

Analysts say because of low procurement India will need to import at least 3 million tonnes of wheat this year to augment stocks which are used for welfare schemes. 

India has one wheat crop a year, mostly in the northern states, and output has been stagnating around 70 million tonnes. 

But consumption has been growing with people in the southern regions eating more wheat, rapid growth in population and a rise in incomes. 

Kishore Narne, vice-president of Mumbai-based AnandRathi Securities Ltd., said a average crop size of 72-73 million tonnes would make supplies tight. 

With global and domestic wheat prices firm, farmers this year are not selling their grain, hoping to sell at a much higher price after the harvests is completed in May. 

Government agencies have only purchased about 8 million tonnes of wheat from farmers against a target of 15 million, and with wheat only trickling into the market, doubts have arisen if buying will touch even 11 million tonnes. 

India, the worldâs second-largest wheat producer, was forced to import 5.5 million tonnes in 2006 after procurement totalled 9.5 million tonnes against a target of 16 million. 

Private firms such as Cargill offered farmers more than the government-fixed price. 

âThe grain is arriving piecemeal, making procurement difficult,â said Chaturvedi. 

The farm ministry has forecast the wheat crop will rise to of 73.7 million tonnes this year from 69.4 million last year. 

âI do see India importing around 2-4 million tonnes of wheat in the next two to three years because consumption has been going up as the economy expands,â said D.P. Singh, president of the All India Grain Exporters Association. 

Most of last yearâs imports were contracted at an average price of $205 per tonne while wheat is now being quoted at $220-240 per tonne on the global market. 

But wheat cost would be much higher this year with freight costs alone going up by $25 a tonne over the last year to $70 and lack of offers from Australia and Europe leading to tightness in supplies. 

http://www.dailytimes.com.pk/default.asp?page=2007\05\05\story_5-5-2007_pg5_27


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## Neo

*India Incâs overseas investment jumps 180%* 

SATURDAY, MAY 05, 2007 

NEW DELHI: India Inc increased its overseas investments by a whopping 180% in 2006-07 compared to the corresponding period in the previous fiscal. While the domestic companies invested close to $8 billion overseas in the previous fiscal, total investments abroad stood at a meagre $3 billion in 2005-06. 

Bulk of the money invested abroad was routed to the UK, the Netherlands, Mauritius, Cyprus and Russia â which have been identified as the five top investment destinations in the last fiscal. The minister of state in the finance ministry, Pawan Kumar Bansal, said in reply to a question in Parliament that direct investment in foreign countries by Indian companies increased from â$2.8 billion in 2004-05 to $2.85 billion in 2005-06, and to $7.95 billion in 2006-07â. 

âLiberalising and streamlining of procedures towards overseas direct investment during recent yearsâ was identified as the main reason for increased investments by the minister. Recently, in its annual monetary policy, RBI raised the overseas investment limit for Indian companies to 300% of their net worth from the previously-applicable ceiling of 200%. In addition, the companies can place 35% of their net worth against 25% earlier in portfolio investment in listed overseas companies. 

âIndian companies are increasingly looking out and overseas investments will be on the rise, both in greenfield ventures and acquisitions. The proposed hike in the cap for overseas direct investment from 200% to 300% of net worth will further boost overseas expansion by Indian corporates,â PwC principal consultant Radhika Jain said. Analysts pointed out that since Indian companies have been on an acquisition spree, such numbers are not startling. The total value of M&As have grown at a CAGR of 28% between 2002 and 2006, a Grant Thornton report said. 

, one of the worldâs largest accounting organisations, said. According to the report, the total number of M&A deals increased from 343 in 2005 to 480 in 2006. Also, it has been stated that from 1995 to August 2006, the largest proportion of outbound acquisitions (Indian companies acquiring companies overseas) has been in North America, which accounted for 32% of total outbound deal. Europe accounted for 29% of the total deals. 

http://economictimes.indiatimes.com..._investment_jumps_180/articleshow/2005873.cms


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## Neo

*'IT/ITeS market to touch $100b by 2011'*  
Sujata Dutta Sachdeva
5 May, 2007 

NEW DELHI: There is nothing new about the prediction that the Indian IT/ITeS industry is poised for bigger growth in future. 

Whatâs striking is the IDCâs latest forecast that says IT and ITeS industry in India will grow at 18 per cent for the next five years and will earn Rs 458,228 crore revenue. 

Kapil Dev Singh, country manager, IDC India, says: âIT/ITeS market is expected to touch $100 billion by 2011. Since, the base has become significant over the last few years, the next five years will require industry as well as government to identify new uses of IT, new user segments and new relevance in a common manâs life.â 

Whatâs triggering the IT/ITES market is a buoyant economy and more disposable incomes, say experts. Consumers are now spending more on ICT products and services which include not just PCs, but smart handheld devices, digital cameras, MP3 players, gaming devices as well. 

So how can this momentum be carried forward? âThe focus should now be on domestic market,â says Singh. 

The domestic market has been growing rapidly in the last three-four years. In the next five years, the IT/ITeS market is expected to grow at 19.7 per cent. IT alone will grow at 16.4 per cent, while ITeS is expected to register a 40.4 per cent growth. 

âBut a lot still remains to be tapped. The IT penetration in homes, and small and medium business segment and beyond top 50 towns certainly can be improved,â feels Dev. 

Agrees John Gantz, chief research officer, IDC USA. ââThe future lies not in the exports market, for that path is well-established. Upgrading the domestic market should be priority. When a product is developed, the company should concentrate first on selling it domestically and then look out,ââ Gantz says. 

âThe key issues for Indian IT exports market will lie less in worldwide market growth and more in the internal dynamics around IT outsourcing, Indian labour supply, and competition from other regions,ââ he says. 

Singh feels the recipe for developing IT market should include creating the right ecosystem. âItâs important to create suitable products which are made in and made for India. A strong local hardware manufacturing industry will play a crucial role in achieving this,ââ he says. 

http://timesofindia.indiatimes.com/...to_touch_100b_by_2011/articleshow/2005961.cms


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## Neo

*Indians seek addresses abroad *
By Siddharth Srivastava 

NEW DELHI - India's comfortable foreign-exchange reserve has resulted in further easing of norms for property investments abroad. Cash-rich Indians have been looking to buy dwellings in preferred locations that range from Malaysia, Singapore and Thailand to London, Dubai and New York. 

In an effort to provide macroeconomic stability and another step toward full capital-account convertibility, the Reserve Bank of India (RBI) has eased the limits for individual property investments abroad. 

The new policy allows individuals to invest or spend up to US$100,000 in a financial year, up from $50,000. This means that a husband and wife can purchase a joint property worth $200,000. Other family members can be added. 

Property prices in popular destinations such as Singapore, Malaysia, Thailand and Dubai currently quote cheaper than in Mumbai or Delhi while providing much better infrastructure facilities and living conditions. Prices in some suburbs of London now quote similar to Mumbai. 

The process of transferring funds is quite easy now as most Indian banks have foreign branches and an account can be easily opened. 

There are some issues related to double taxation. Though India has signed treaties with about 140 countries, the Tax Department is not considered very efficient because of delays in refunds and assessment. But the interest in owning international property only grows. 

In the past two years since the RBI began easing overseas investment rules, more than 500 Indians have registered for the "Malaysia, My Second Home" venture that is being sponsored by the Malaysian government. 

"What we are looking at is a concept where real estate helps boost the tourism industry. Given the large disposable incomes of people in India and the growing urge of a holiday destination, we are confident that the response from India will be tremendous," a Malaysian tourism spokesperson said. 

Overseas-based investors are now estimated to account for a quarter of new property purchases in Singapore, which is fast joining the league of most expensive property areas such as London, Tokyo and Hong Kong. Investors include Indonesians, Malaysian, Britons, Indians, Australians, Americans and Chinese.

Knight Frank, one of Britain's biggest real-estate agents, released a report recently called "Brics & Mortar: International Project Marketing 2007". The report said rich Indians are keen on places in central London such as Grosvenor Square, Kensington Palace Gardens and Park Lane. The report added that mid-price properties, between 400,000 and 700,000 pounds ($800,000 to $1.4 million), are most popular. 

The RBI's aim is apparent. It wants to offload the excess US dollars in its coffers as well as mop up domestic currency to rein in inflation and prevent further appreciation of the rupee against the dollar that would end up hurting exporters. 

The RBI is looking to create a demand for the dollar as India's forex reserves crossed $200 billion for the first time on April 6. One can gauge the progress, as 17 years back India's forex reserves were barely $1 billion. The reserves at the end of December 2003 totaled $100 billion. 

However, the burgeoning reserves have resulted in money supply growing more than 20% in the past year, a level not very palatable to the central bank, given the attendant inflation that has hovered around the 6% mark. 

The rupee has been moving in the 41-42 band against the dollar, the highest in about a decade. 

Apart from seeking capital appreciation, one important reason for international property interest is that more and more Indians are now traveling abroad and being exposed to the best. Close to 8.5 million Indians traveled to foreign shores last year, either on business or for leisure, spending big on their foreign excursions. 

According to a survey by market research firm ACNielsen for the Tax Free World Association, Indians on average spent $903 each overseas in 2006 and collectively a huge $7.5 billion. Every year, Indian travelers are spending 28% more than in the previous year. 

The world's biggest travel spenders are the Japanese, who continue to be way ahead with an average spending of $3,000 each. The Chinese currently dole out $100 more per person than the Indians. 

Indeed, many of these cash-laden Indians are being looked on as major investors abroad. Job opportunities and salaries in India continue to be very lucrative, and it does not look as if foreign exchange is going to be a problem in the near future, despite India's heavy dependence on crude-oil imports. 

A recent report released by International Data Corp, a global research and market intelligence firm for information technology (IT), telecom and consumer technology has said that the export-led Indian IT industry will cross the $100 billion mark in revenues within the next four years with a growth rate of 18%. 

Driven by growth in sectors such as software, business and management consultancy, exports of services in India may surpass exports of goods by 2012, a recent survey by the Federation of Indian Chambers of Commerce and Industry said. 

"India's exports of services will be close to $311 billion by 2012, overtaking the expected level of merchandise exports of $305 billion in that year," said the federation. 

International remittances to India are the highest in the world, worth $25 billion a year and growing at 25% annually. It is one of the fastest-growing markets in the world, with the Persian Gulf region one of the major contributors. 

Salaries, meanwhile, only continue to rise in the face of high growth and a manpower crunch. 

According to the annual study of human-resources consulting firm Hewitt Associates, India will clock the highest salary growth region in the Asia-Pacific region for the fourth consecutive year, with an all-time-high average pay hike of 14.5% in 2007. 

Middle managers and professional and technical employees will get the biggest hikes at 15.1% and 15.8%, respectively. In this context, the RBI is only looking to ease forex controls. 

Other recent measures in forex management by the RBI include higher prepayment limits on external commercial borrowings up to $400 million without prior RBI approval and enhancing Indian companies' limit for portfolio investment abroad in listed overseas companies to 35% of their net worth. Mutual funds too can now invest up to $4 billion overseas. 

All these steps are aimed at balancing dollar inflow with outflow to keep the rupee stable without RBI's direct intervention. 

"These measures are in line with the liberalization of outward investment policies and provide a level playing field to Indian firms relative to their foreign competitors. Additionally, the measures will help achieve a balance between capital inflows and outflows," said K V Kamath, chief executive officer of ICICI Bank. 

India's domestic property market, meanwhile, continues to boom because of high demand and capital appreciation prospects. Reformed real-estate investment laws for non-resident Indians and foreign investors have provided the fillip to catapult the Indian real-estate market toward US$50 billion by 2010. 

Siddharth Srivastava is a New Delhi-based journalist. 
http://www.atimes.com/atimes/South_Asia/IE04Df01.html


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## Bushroda

*Feeling Like a Trillion Dollars*

By Pramit Pal Chaudhuri
Special to washingtonpost.com's Think Tank Town
Friday, May 4, 2007

Last week India became the 12th country in the world to have an economy worth a trillion dollars. It was a purely symbolic accomplishment. However, the manner in which India reached this figure neatly caught both the opportunity and the obstacles of its present economy. 

India's economy touched the trillion dollar mark on April 25 according to a calculation by Credit Suisse, thanks to a sudden surge in the value of the rupee against the dollar. The economy was already within hailing distance of the 10-digit figure following two successive years of over nine percent growth, but the rupee's rise pushed it past the mark. 

If the growth figures are the sunny side of the economy, the rise of the rupee is the darkening edge. The Indian currency rose suddenly as an indirect consequence of New Delhi's attempts to beat down inflation. 

The consumer price index touched eight percent in March, a politically unpalatable figure in a country with as many poor as India. The Reserve Bank of India, the country's central bank, recently responded by hiking interest rates in an effort to temper consumption. It also allowed the rupee to appreciate, as a JP Morgan analysis concluded, in large part to avoid intervening to keep the currency down, as that would increase the money supply and, therefore, add to the inflation rate. 

The rupee has now risen over 13 per cent against the dollar since last summer. Since the beginning of March this year it has been the fastest appreciating Asian currency. This may be helping ease rising consumer prices at home, but it is coming at a cost. One of the most immediate costs is a slump in exports as Indian goods are priced out of the international market. 

It has the look of a near-textbook example of an economy trading growth against inflation.

The Indian economy has reached an impasse. There is now general consensus that if it attempts to grow beyond 8.5 per cent a year, it runs a high risk of contracting inflationary flu. This forces government to force-feed medication to curb economic growth. 

"Feeling like a trillion dollars" isn't what it used to be.

But being a trillion-dollar economy does mean that a country has the resources to try and upgrade its economic motors. 

India has already initiated the policies needed to rebuild the bottleneck most evident to any visitor to the country: its crumbling infrastructure. 

New Delhi has put together risk-sharing financial packages to give the private sector a helping hand in setting up the new ports, roads and power plants India desperately needs. A Standard and Poor's analyst has described the package for roads as "among the most advanced in the world." 

The Indian government says it has already lined up $350 billion for infrastructure investment for the next five years. Private investors are prepared to jump in with more, once they see the new policies withstand the test of implementation.

Significantly, though domestic consumption remains the primary driver of India's economic growth, investment is only a nose behind. Investment rose to nearly 34% of gross domestic product last year -- a sign that the country is building the capacity for higher rates of non-inflationary growth.

India hopes to get the sort of sustained infrastructure boom that Japan saw in the 1960s and China saw in the 1980s. This would pull the economy into a higher sustainable growth rate, from the present 8.5 per cent to the government's own goal of 10 percent per year. Jonathan Anderson, chief Asian economist for UBS, has argued that the Indian story of the next five years will be similar to how the ugly duckling of 1990 China became the economic highflier of today.

This transformation will take time, sound follow-through on policies, and some luck. The Indian economy could be stuck in the region of one-trillion dollars for a year or two. 

After that, it could leave the number behind faster than anyone would have believed possible for a raucous, billion-person democracy. 

Besides its own government policies, India will be helped by a revelation from India's 1991 economic liberalization policy: the coming-of-age of its private sector. Corporate India has been partially powered by the domestic stock market, whose $940 billion market capitalization last week indicated it is about to sail past its own trillion dollar milestone in the very near future. 

Credit Suisse's report said that eight of the previous 10 economies to pass a trillion dollars saw their stock markets rally for a full year afterwards. While the figure doesn't change the fundamentals of an economy, the bank said, it does seem to boost investor confidence. 

Keeping in the spirit of things, *an Indian government expert committee on making Mumbai an international financial center calculated last week that the roughly 20 million-strong Indian diaspora had amassed a wealth of, you guessed it?one trillion dollars. *


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## Neo

Happy Feet, where have you been man?
Good to have you back!


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## Neo

Sunday, May 06, 2007 

*India setting up body to achieve one-India economy*

By Iftikhar Gilani

NEW DELHI: Weary of its own provincial governmentâs refusal to pull down intra-state tariff barriers, India is setting up of a committee of top officials to push forward the concept of one-India economy.

Investors and farmer unions here are saying that when India was vying for a free flow of trade with the neighbouring countries, its own states were spurning every effort to allow free trade and commerce across their borders.

TKA Nair, Principal Secretary to Prime Minister Dr Manmohan Singh, told a meeting of chief secretaries here that a committee of state secretaries could be set up to realise the concept of one-India economy.

He said the concept could be started by merging economies of north-Indian states initially especially in the areas of power, e-governance, taxation and drinking water.

âTo evolve a consensus, the committee should meet periodically and review the progress,â he told a meeting of chief secretaries of north-Indian states organised by the PHD Chamber of Commerce and Industry (PHDCCI).

The meeting, which was attended by chief secretaries and senior functionaries from 10 states besides over 200 delegates, unanimously endorsed the concept of a common Indian market.

Senior state officials also decided to âwireâ the region through e-governance. It was agreed to introduce a digital workflow administrative system to cut down the paper work besides automation of treasury and sub-treasury operations, digitalisation of VAT and other taxes information system and automation of PWD management.

The meeting also focused on the need for closer co-operation to harness natural resources for power generation and distribution of reforms. âAn integrated approach to match the power requirement was also suggested and approved by the state governments,â said a press release issued by the PHDCCI.

A policy paper prepared by the PHDCCI had stated that the state governments were the main hindrances in the free flow of goods and are thus fragmenting the common national or regional market.

Despite appeals by Prime Minister Dr Manmohan Singh at the last National Development Council (NDC) meeting for removal of barriers, the states have preferred to keep barriers to raise their incomes.

According to the UN Food and Agriculture Organisation (FAO) report, the cost of importing from the US to select ports in India comes cheaper at Rs 1,365 per tonne than the road transport of grains from Punjab to Andhra Pradesh, which comes at a whooping cost of Rs 2610 per tonne

http://www.dailytimes.com.pk/default.asp?page=2007\05\06\story_6-5-2007_pg5_2


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## Neo

Sunday, May 06, 2007 

*India rejects WTOâs call for flexiblity on agri imports*

* Says subsidies by developed countries a serious challenge to successful completion of talks

LONDON: India dug in its heels on Friday over agricultural issues in troubled World Trade Organisation (WTO) talks and rejected a call to be more flexible on imports. 

Commerce and Industry Minister Kamal Nath said proposals put forward by the chairman of WTO farm negotiations, New Zealandâs ambassador Crawford Falconer, were unbalanced and disappointing. 

In suggestions for breaking a deadlock in farm talks, a key part of the WTOâs Doha round aimed at reducing trade barriers across the board, Falconer said developing countries would have to soften demands to shield up to 20 percent of their agricultural market from competition. 

âI must express disappointment,â Nath told a news conference. âThe (Falconer) paper suffers from serious imbalances. They are not paying enough attention to the livelihoods of farmers in developing countries,â he said. 

Nath said that Falconer had not been demanding enough on the need for rich WTO members, notably the United States and the European Union, to slash farm subsidies which India and others say distort world markets. 

âSubsidies by developed countries cause a serious challenge to the successful completion of these talks,â he said. 

Leading WTO states, among them India, say they want a final deal in the 5-year-old Doha round, which aims to reduce poverty and boost growth, by the end of this year. This means a blueprint must be agreed by August. âI wish the round closed, but you must realise that the content is as important as the completion,â Nath said when asked about the urgency of achieving a breakthrough. 

Senior officials from the G4 Brazil, the European Union, India and the United States had three days of talks in London this week before a ministerial meeting in Brussels on May 17-18. 

The Brussels meeting will be followed by three more before mid-June by when the G4, which represents a range of trading interests, hopes to have an understanding that will make it easier for the full WTO membership to agree a deal. While some progress was made in London, deep differences remain, according to officials who attended the talks. 

âThe United States is wary about talking numbers on subsidies,â said one diplomatic source. 

Some diplomats say Washington has indicated that it could lower the ceiling on trade-distorting farm subsidies to $17-19 billion a year, from the $22-23 billion it is formally offering. Even that is way above what it actually spends and therefore offers developing countries no inducement to open their markets further to either farm or manufactured goods, another important area of the Doha round, some diplomats say. 

âWe believe that whatever impression of movement there is in the round is in the wrong direction,â said one senior diplomat from a developing country. 

http://www.dailytimes.com.pk/default.asp?page=2007\05\06\story_6-5-2007_pg5_23


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## Bushroda

Neo said:


> Happy Feet, where have you been man?
> Good to have you back!



Thanks Neo, Just been keeping slightly busy. Great to be back here now. Howz you doing?


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## Neo

Busy here and there, mostly in the economy section, my favorite subject.


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## Neo

May 07, 2007 
*Modernising Indian highways*

By Anand Kumar

MAY is the month when millions of middle-class and affluent Indians go on holidays â to hill stations, beaches, historic cities, or to their ânative townsâ (as most migrants to cities refer to their home towns).

In the past, the railways used to be the sole mode of travelling long distances to these places. But the dramatic transformation in the Indian aviation sector â brought about by private airlines, especially low-cost, no-frills carriers â has triggered off a rush by millions of Indians who now fly to their holiday destinations.

But an equally significant transformation is occurring on the roads. The auto revolution in India â which now has virtually every major car manufacturer from the US, Europe, Japan and Korea operate plants in the country â has seen thousands of holiday-makers take to the wheels.

Fortunately, the ambitious road expansion projects launched by the central and state governments have also brought about a remarkable transformation on the ground: while in the past it used to be a tortuous experience to drive on Indian highways, today it can be a pleasurable one.

National Highway 4 (NH-4), which links Mumbai to Bangalore and Chennai, is one of the busiest highways in India. Thousands of trucks, buses, cars, two-wheelers, tractors and other types of vehicles can be found on this 1,200-km-long stretch that links important Indian western and southern cities including Mumbai, Pune, Bangalore and Chennai.

Driving along this highway was a horrendous experience and could take a motorist over a day to reach Bangalore, about 800 km from Mumbai. But how things have changed. The ambitious Golden Quadrilateral project providing for four-lane of national highways linking the four major metros â Delhi, Mumbai, Chennai and Kolkata â has transformed the NH-4.

Driving from Mumbai to Bangalore now takes under 16 hours, and a growing number of motorists are taking out their cars to drive long distance on such national highways in India. On NH-4, for instance, one comes across cars from as far as Delhi and Haryana, and of course from Gujarat, Maharashtra, Goa, Karnataka, Andhra Pradesh and Tamil Nadu.

Vehicles that used to crawl at 20 to 30 km an hour, now zoom at over 120 to 140 kmph. Unfortunately, many of the motorists are not used to driving at such high speeds, and accidents are growing on Indian highways. Many of them do not bother to check tyre pressure, or follow the norms; lane indiscipline is rampant, a majority of motorists switch on the full headlights at night, and over-worked truck and bus-drivers falling asleep on the steering wheel, is also common.

Worse, many of the rural folk blatantly violate all traffic norms. Along NH-4, for instance, it is not uncommon to find farmers in their tractors â over-loaded with sugarcane or other produce â driving in the opposite direction in the fast lanes. Two-wheeler riders and cyclists routinely drive in the opposite direction, as the authorities have not provided for service lanes.

And in the absence of pedestrian crossings â subways or over-bridges â many tend to stray across the high-speed highways, resulting in gory accidents. Many also walk across the highway with their flock of sheep, goats or buffaloes, adding to the miserable track-record of road accidents in India.

The modernisation of Indian roads infrastructure has had more than its share of controversies. The Golden Quadrilateral project was launched by the previous BJP-dominated National Democratic Alliance government, and towards the end of its regime, the government put up huge posters of then prime minister Atal Behari Vajpayee along major highways, proclaiming it as his personal contribution to the development of India (the infamous âIndia Shiningâ campaign).

When the Congress-led United Progressive Alliance government came to power in 2004, its first reaction was to rubbish the highway development project as an elitist one, meant for the benefit of the rich; the project was neglected resulting in cost over-runs and delays.

Fortunately, good sense prevailed, as the biggest beneficiaries of the highway upgrade and modernisation project were the rural poor, who found easy and cheap access to the markets for their produce.

The UPA government then not only revived the NDA government projects, but also stepped up investments in the North-South, East-West corridors, and a new one to build expressways linking major cities, and also upgrading four-lane highways to six-lanes.

About $60 billion are to be invested in the roads infrastructure during the current Five Year Plan period (2007-2011). Indiaâs road network of 3.3 million-km (the second largest in the world) carries 70 per cent of its freight and 85 per cent of passenger traffic. While the affluent are only now using the national highways as a means of transport, for millions of poor people â who do not have access to railway stations or airports â national and state highways have been the only means of travelling across the country.

The National Highways Development Project (NHDP) comprises two major components â the 5,846-km Golden Quadrilateral, and the 7,300-km North-South, East-West corridors. Both are likely to be completed in about two years.

The biggest problems related to land acquisition, but the government succeeded in tackling most of these issues. It has also managed to resolve contentious issues relating to funding the projects. A model concession agreement (MCA) is now in force, and most of the road infrastructure projects are now being taken up as public-private partnerships (PPPs).

Initially, there were fears that motorists â and also the powerful truckersâ lobby â would oppose moves to levy toll on road users. But there has been a surprising degree of acceptance by virtually all road users. On the Mumbai-Bangalore stretch of the NH-4, for instance, motorists have to pay up to Rs500 by way of toll fees; truckers and bus operators have to pay much more.

But despite the steep cost, there has been universal acceptance of the concept of usersâ paying charges for new facilities. Consequently, the government now estimates that up to 80 per cent of the $60 billion investments in new road projects would be made by the private sector.

The limited resources that the government has could be better utilised to build village and other rural sector roads, for which there is little private sector enthusiasm. Interestingly, while initially the government had to provide grants to attract private road builders, increasingly the concept of ânegative grantsâ is taking root. Private builders pay the government money for acquiring contracts to expand existing highways, or building new ones, as they get lucrative toll contracts on the roads.

The success of the expressways project (the Mumbai-Pune expressway has been an outstanding success) is also encouraging several state governments to build new ones linking important cities. Expressways, unlike national highways, are access-controlled, and pedestrians, two-wheeler riders, auto-rickshaws, tractors and off-road vehicles, and more importantly, buffaloes, sheep, and other animals are not allowed on these high-speed roads.

The fact, however, remains that woeful lack of patrolling on the national highways will nullify all these achievements. Traffic police along most national highways operate like dacoits, extorting funds from trucks and unlicensed bus operators. Truckers are allowed to overload their vehicles (often well past their prime), violating a Supreme Court order imposing restrictions on the carrying capacities of vehicles.

The police also ignore vehicles that violate pollution norms. Most of the highway stretches have abysmal medical facilities to treat accident victims. Those causing ghastly accidents get away with light prison terms â the sentences are in most cases awarded several years after the accidents occurred. Nearly 100,000 people are killed in road accidents in India every year.

Driving licenses are issued to all and sundry, including those who cannot read basic traffic signs. In many cases, money plays a major role in the award of licenses, rather than driving skills. The central government has recently initiated moves to tighten the rules and restrict the issue of licenses to the unlettered. But instilling traffic discipline and safe driving standards will prove to be a far more difficult task than building roads and highways in India.

http://www.dawn.com/2007/05/07/ebr10.htm


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## Neo

Sunday, 6 May 2007

*Airbus woos India with superjumbo *

Airbus hopes to generate more Indian interest in the A380 
An Airbus A380 superjumbo has landed in New Delhi, marking the first time the giant jet has flown to India. 
The debut trip is designed to test the ability of Indian airports in dealing with the A380 and raise the profile of the jet's only Indian customer so far. 

Indian airline Kingfisher has ordered five double-decker A380s as part of a wider $3bn (Â£1.5bn) Airbus deal. 

Production delays with the troubled A380 project has led to heavy profit losses at the European plane-maker. 

In February, Airbus said it planned to cut 10,000 jobs across Europe as part of a major restructuring drive. 

*New carriers *

Kingfisher, which is owned by the Indian company which makes Kingfisher beer, expects to take delivery of the first of its five A380 jets in 2011. 

The airline has drawn up plans to start international flights, and hopes to use the A380 on key routes to the US. 

India's domestic airline industry has been booming, with new carriers such as Kingfisher benefiting from heavy growth in demand as the country's economy expands. 

The Airbus A380 is due to fly a select group of passengers around New Delhi before heading on to India's financial capital, Mumbai. 

http://news.bbc.co.uk/2/hi/business/6630333.stm


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## Bushroda

*Turbocharged India on way to overtaking the US economy*
By Mark Kleinman, Asia Business Editor
Last Updated: 1:31am BST 08/05/2007


Supper time in the plush New Delhi residence of the British High Commissioner, Sir Michael Arthur, last Monday evening, saw something unusual on the menu: Weetabix. Executives from the food company drank tea with Indian health experts to mark the launch of Britain's most famous breakfast cereal into India's 40 biggest cities.

The event underlined in its relatively modest way the same point as that made by Vodafone's recent Â£5.5bn takeover of Hutchison Essar - India is booming.

"We are aiming at a 10pc market share in 2009," said Andy Harris, international commercial manager at Weetabix. "There is a new middle class of 140 million people, so there is big growth potential."

The excitement is not limited to foreign food manufacturers. From property and consumer goods to the burgeoning outsourcing and Bollywood film industries, India is experiencing a surge that Goldman Sachs, the investment bank, has predicted will see it overtake the US as the world's second-largest economy by 2042.

GDP growth lags only that of India's Asian neighbour, China, among major economies and it has a middle class that each year is growing at a rate equivalent to the population of Holland. Only last week, McKinsey, the management consultancy, published a report suggesting that India will become the world's fifth-biggest consumer market in less than 20 years.

"Barring exogenous shocks, we are fairly certain that the economy will grow by at least 8pc [this year]," the Indian finance minister, P Chidambaram, told a conference in Hong Kong a few weeks ago.

On the face of it, the outlook is almost blindingly bright, for foreign and domestic investors alike. Indian companies are expanding on to the global stage as never before. Tata Steel's takeover of the Anglo-Dutch steelmaker, Corus, for Â£6.7bn was the largest foreign takeover by an Indian enterprise, backed by the country's highest-ever corporate loan. Since then, other notable cross-border transactions have followed, including the $6bn (Â£3bn) acquisition of Novelis, a Canadian aluminium firm, by Hindalco, a major Indian player in the sector.

According to Dealogic, the financial data provider, cross-border transactions involving Indian companies have already reached $33.5bn this year, more than the total for 2006, which was itself a record. "India is on turbo-charge," said Lord Bilimoria, founder and chief executive of Cobra Beer, which saw consumption in India rocket 600pc during a six-month period last year.

Meanwhile, corporate earnings are up, the Bombay exchange's benchmark Sensex index has soared to record levels and the country's core industrial base is expanding into areas once outside India's natural domain. These include large-scale car manufacturing, through joint ventures with the likes of Fiat and General Motors.

"It is our intention to make India a manufacturing hub," said Mr Chidambaram. "We are already a top-three country in a dozen manufacturing sectors, such as petrol refining, steel, automotive parts, leather and textiles."

For British investors in India, manufacturing has taken second place to financial services, where Aviva, Prudential and Standard Chartered have all placed big bets on the country's growth prospects. Consumer goods companies, such as Scottish & Newcastle and Unilever, have also been trying to tap the emerging middle classes.

"The outward-looking face of India has been the biggest change [since the country's liberalisation], as opposed to the old insular, protected attitude," said Lord Bilimoria, who also serves as UK chairman of the Indo-British Partnership Network, established in 1993 to strengthen business links between the two countries.

Bilateral trade between Britain and India doubled between 1995 and 2005 - the latest year for which full figures are available - to Â£7.9bn, but while the overall value of trade is increasing, Britain's share of the Indian market is in decline. In 1991, when the process of liberalising the Indian economy began, Britain's market share of Indian imports was about 14pc but by 2005, that had reduced to a little more than 2.5pc.

Many British companies "already have an Indianised presence" as a result of historical colonial links, said Andrew Cahn, chief executive of UK Trade & Investment.

As Britain's share of India's foreign trade shrinks, competitors from Europe, Asia and North and the Americas are rushing in. "It is going to be a very fruitful place for foreigners to do business," said Mr Cahn. "Key factors are the pace of liberalisation and the confidence with which India embraces globalisation. It is said that the IT outsourcing industry grew so rapidly partly because the government did not realise it was happening."

The government's stance on foreign direct investment laws has often appeared ambivalent, with ownership laws establishing barriers to foreign takeovers and joint ventures in sectors such as insurance and retail. But with so much outbound M&A activity, most people expect the government to relax those barriers in the medium term - and overseas retail giants such as Wal-Mart, Tesco and Kingfisher are keen to pounce.

"One advantage India has is that it is not wholly reliant on

re-exporting, unlike China. Much of the investment going into the country is for domestic supply as well as other markets," said Mr Cahn. "The demographics, with a very young and increasingly educated population, are right for sustained growth."

But there is another side to the story. The soaring growth rates and influx of foreign capital cannot conceal the fact that India barely functions at all. As any visitor to one of the country's major business centres, such as Bangalore, Delhi or Mumbai, will testify, the infrastructure is creaking.

The government estimates that at least $350bn is required to upgrade the roads, airports and utilities networks that India requires if it is to thrive, but even that figure is dismissed as conservative by some.

There are other issues for the government to grapple with, including a relentless battle with inflation and the endemic poverty which means that 300 million Indians are still forced to survive on less than a dollar a day. A looming skills shortage is also causing headaches, with Nasscom, an IT industry body, predicting a shortfall of half a million Indian professionals in the IT sector by 2010.

So far, the Indian juggernaut is rolling on regardless, and overseas private-equity money from the likes of 3i and Blackstone should provide some much-needed assistance to bridge the gaping infrastructure deficit. Without it, India will need more than Weetabix to fuel its journey towards becoming a genuine economic superpower.


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## Bushroda

*Expats head back to sizzling economy*

*India has grabbed centre stage from China as the hottest venue for foreign assignments in industries such as telecommunications, software and health care*

Joann Lublin (Wall Street Journal)


Ambitious global managers are looking for passage to Indiaâwith good reason.

Major US, European and Indian companies are rapidly expanding their ranks of expatriates in the worldâs second-most populous nation, hoping to profit from its sizzling economy. India has grabbed centre stage from China as the hottest venue for foreign assignments in industries such as telecommunications, software, health care, retailing, airlines and hotels, executive recruiters report.

âIf you are doing well, you come to Indiaâ and gain valuable experience, says Rajeev Vasudeva, a recruiter at search firm Egon Zehnder International in New Delhi. âWe are looking for expatriate talent.â

He figures there are about 1,000 expat senior managers in India, roughly seven times the number two years ago. By 2009, that will more than double, predicts Deepak Gupta, India managing director for recruiters Korn/Ferry International in New Delhi.

Cisco Systems, the San Jose, California, networking concern, says that all but one of the eight top officials at its globalization centre in India are expatriates who transferred there this year. Accenture has nearly 100 expatriates in India, up from fewer than 12 in 2004. The consulting and outsourcing giant expects overall Indian staffing levels will surpass its US head count by late August.

Lots of career routes can carry people thereâbut they have to prove themselves elsewhere first. Many US citizens of Indian origin, nicknamed âboomerang professionals,â find themselves wooed back because they earned their stripes at a western business.

âThere are tremendous opportunities for someone like me,â observes Sandeep Arora, Accentureâs senior technology executive in India. Born and raised in India, he attended graduate school in the US and became a citizen. He joined the firm in 1994.

Arora says fellow partners chose him to enlarge its small Indian operation almost a decade later because he understood the culture of his employer and homeland. He commuted between Seattle and Bangalore for 18 months until his 2006 relocation. He says he âis having so much funâ that he would have moved without an expatriate compensation package. His perquisites include a driver, housing allowance and tuition subsidy for his teenage daughters.
Itâs a similar story at Goldman Sachs Group. Eight of 10 expatriates in its year-old Mumbai office are Indian returnees. They formerly worked for the Wall Street investment bank outside India.

Individuals lacking Indian backgrounds sometimes arrive in India via successful prior Asian stints. L. Brooks Entwistle, the American-born head of India operations for Goldman Sachs, says he landed key Indian high-tech clients during his second Hong Kong assignment with the firm. To flourish as a foreigner in India, he cautions, âyou really have to be psyched for this; itâs a love-hate place.â

Transferable skills, a pioneering spirit and frequent Indian business trips while employed elsewhere in Asia for 13 years helped Gary Bennett win the CEO spot in July 2005 at Max New York Life, a New Delhi joint venture between an Indian and US insurer. The Australian executive previously ran the Hong Kong operations for New York Life, but hadnât lived in India before. Bennett urges those aspiring to work in India, but who donât have Asian experience to volunteer for short assignments there, to make sure âyou will fit inâ. 

Max New York Life has brought over numerous actuarial, information-technology and product-development staffers from abroad for six weeks to two years. However, certain temporary transferees decide India âis not my cup of teaâ, Bennett reports.

Extensive personal travel in India may also impress a western multinational. âYou can put on your resume, âIâve spent a month there and like the placeâ,â suggests Joyce Thorne, an American expatriate in Mumbai. She is world-wide director of training for Integreon, a global outsourcing concern based in Los Angeles. In June 2004, she recruited a veteran US paralegal to become an India account manager for Integreonâs major law firm clients. Though the new expatriate had never worked abroad, âhe spent two months living in a small Indian village getting to know the culture and daily lifeâ, Thorne explains. âThis was important to me because people from the West who successfully live and work in India must be highly adaptable.â

Other paths could help you attract attention from big Indian businesses willing to hire non-native employees. The most critical step: Increase their awareness about your specialized expertise thatâs in short supply there. Give speeches at important industry conferences, especially those held in India. Introduce yourself to search firms with Indian offices. Sign up for local chamber of commerce delegations visiting companies in India.

But it makes little sense for would-be expatriates without Indian ties to join the American arm of a global-minded Indian enterprise. Anyone hired in the US by such concerns usually lacks the skills they need back in India, notes Vasudeva, the recruiter.


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## Bushroda

*Indian rupee to soar more* 
--------------------------------------------------------------------------------
Published on: Tuesday, 8th May, 2007


The Indian rupee, which hit a near decade-high against the dollar earlier this year, is expected to extend its rise and pressure export firms that bill in dollars, investment bank Credit Suisse has said.

In an advance not foreseen by either economists or companies, the rupee had risen by 8.5 per cent against the greenback in the year to date, making it the fourth-biggest currency gainer of 2007, the bank said in a research note to clients. âThe rupee appreciation is sharp and here to stay,â it said. âThe impact is material for many and can no longer be ignored as cyclical.â

The report said it could appreciate âby a further one to two per cent in following monthsâ. Software and service exporters such as Tata Consultancy, Infosys and Wipro â Indiaâs three biggest information-technology companies â face profit pressure because most of their earnings are denominated in dollars, the bank said.

Drugmakers like Dr Reddyâs, Cipla and Lupin could also have profits dented because of weak pricing power on exported products. Hotels and transportation companies too have adverse exposure, the bank said. Net foreign-exchange earnings make up 51 per cent of sales at Tata Consultancy, 56 per cent at Infosys and 35 per cent at Wipro.

Commodities, media, construction engineering may be among the beneficiaries of a stronger rupee, the report said. âIn a way, the rupee appreciation has significantly reduced the defensive appeal of the information technology and drug industries,â it said. The rupee ended last week just above the 41 to the dollar level.

The currencyâs rise briefly propelled India to a trillion dollar economy in April when it breached the 41 level, its advance helped by inflows from investors eager to pump money into an economy expanding by nine per cent a year.


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## Bushroda

*Riding India's wireless typhoon* 
By Roman Zakaluzny, Ottawa Business Journal Staff
Tue, May 8, 2007 9:00 AM EST


India's economy, in particular its high tech wireless market, is growing in leaps and bounds. 

Just ask Raj Narula, a Canadian who does consulting work for local firms that want to break into the South Asian market. 

"I'm standing in Bangalore right now, at a busy intersection," the co-founder of TaraSpan, an Ottawa company that helps Canadian firms break into the Indian market, told the OBJ. "It's chock-a-block traffic. That's an Indian phrase that means it's so busy that the cars, the bicycles, the scooters â everything â is filling up the entire street. That's an occurrence in every city in India." 

It could also be a metaphor for the Indian wireless market. To Mr. Narula and the companies for which he arranges meetings and partners, every one of those people outside his window equals potential growth. 

"There is major growth happening in terms of jobs being created every month," he said. "It's not unusual to find companies with 30 per cent growth year after year." 

With a population approaching 1.1 billion, India boasts four cities with more than 20 million people, and at least three dozen metropolitan areas the size of Ottawa. 

And a steadily improving quality of life in India translates into more and more Indians looking to get equipped with the technological conveniences most North Americans already have. In fact, they're set to race ahead of the west. 

Take mobile phones: India sees six million new cell phone subscribers a month. That's an incredible growth rate that dwarfs Canada's, especially since a March report from the SeaBoard Group showed wireless penetration rates in Canada are second last in the OECD, a full 20 percentage points behind the United States. Even though Canadians consider their country to be one of the most wired when it comes to technology and Internet usage, India and other developing countries are already well ahead in cell phone usage. 

It's no wonder some Ottawa firms are starting their international forays in India, hoping for a cut of the action in the hot, English-speaking wireless market. And they're not simply going there to find a cheap source of qualified labour for call centres and programming. 

"The economy is moving at a massive scale," said Mr. Narula. "The software industry in India is (worth) $50 billion in annual revenue. It'll get this up to about $100 billion in the next three years. It's going to be doubled. 

"The movement, if you look at wireless, has been from 15 million subscribers four or five years ago to about 175 million subscribers, with six million-plus adds a month." 

TenXc Wireless first ventured to the Indian subcontinent a year ago. CEO Joe Hickey said after a year of studying the market and meeting with business people, the firm is ready to begin a trial for its Bi-Sector Array, which allows India's wireless companies to multiply the efficiency of the small amount of bandwidth available to them in the very tight market. 

"India has some of the least available spectrum available," Mr. Hickey told the OBJ. "A lot is held by the government. We basically allow them to double the efficiency of their spectrum." 

While North America continues to be TenXc's main market, India is quickly becoming a close contender for second place. The company just recently sent over a few staffers from the 40 it has in Ottawa for the year-long trial and, if successful, will be looking to hire local staff there. 

"You might think Europe would be a destination, but we picked India because we knew it was the fastest growing market in the world," Mr. Hickey said. While TenXc does do some outsourcing in Pakistan, he said, India, with its growing market and limited available spectrum, provides the "perfect storm" of opportunity for his company to sell products there as well. 

However, India is also experiencing many serious growing pains â salaries for some skilled IT professionals are approaching Canadian levels, and shortages of workers are resulting in turnover rates of as much as 500 staff a week at some of the largest firms. 

It's enough for even Mr. Narula to call the growth "scary" at times. 

"The number of cars has doubled ever few years," he said. "Fifty new retail malls (are) to be built just in and around Delhi and Mumbai. 

"There was a major acquisition of three acres of land in New Delhi recently. Guess how much it cost? $20 million Canadian dollars." 

One outsourcing company Mr. Narula visited with some of his Canadian clients, for instance, is hiring 60 to 70 people a day, he said. "They're losing about 20 or 30 people a day ... The hiring rates are extremely high." 

Salaries are rising at a rate of 15 per cent annually, he added. 

For a Canadian company looking to break into this market, an "intimate" knowledge of the major players is critical, said Mr. Hickey. 

"You've got to know who owns who, and for ways to work around that," he said. With takeovers by foreign multinationals of Indian companies and, increasingly, Indian companies of foreign companies, ownership can change quickly. 

"In India, a lot of the wireless firms are owned by Indian conglomerate companies," he explained. "The best example in Canada: Rogers. Ted owns most of it." 

Many Indian wireless companies are starting to go public, he said, with demand so huge, one recent IPO was oversubscribed by a factor of 70. 

What about India's notorious reputation for bureaucratic red tape? 

"What you'll find is all of our clients are working in the private sector," Mr. Narula said. "The fact of the matter is, unlike China where the entrepreneurs have hooks into the government departments, the entrepreneurial community is not like that (here). It's an independent society. In India, there was $20 billion in acquisitions overseas by Indian companies in the first four months of this year alone."


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## Bushroda

*Charting India's savings story*
By Andy Mukherjee Bloomberg NewsPublished: May 7, 2007


The consulting firm of McKinsey last week challenged a widely accepted notion of how India is going to finance a high rate of economic growth over the next couple of decades.

The conventional wisdom is for India to replicate the East Asian model of capital accumulation.

The annual household-savings rate is expected to rise from its current level of about 22 percent of gross domestic product, thanks to a "demographic dividend," or a growing preponderance of younger-age workers with fewer children to support.

McKinsey has a dramatically different opinion.

"With reduced pressure to save for children and elders, and retirement a distant prospect, India's youthful households will tend to save less," Jonathan Ablett and other analysts at the New York-based consulting firm noted in their study.

That's not the consensus view.

Between 2005 and 2025, the working-age population in India will swell by 273 million, according to the United Nations. The country's total population will rise by 313 million.

"When the demographic bulge raises the share of working-age adults in the population, the overall propensity to save rises sharply," Sanjeev Sanyal, a Deutsche Bank economist in Singapore, said in a 2005 study.

Like Japan in the 1950s and China in the 1980s, India was entering a demographic "sweet spot," Sanyal said.

According to the McKinsey report, Indian families are already saving too much to support small businesses directly.

Compare India with South Korea. In 2005, both had an almost identical national-savings-to-GDP ratio of about 33 percent. Yet, in Korea's case, households accounted for just a fifth of the overall rate, compared with 69 percent in India.

Household thrift in India is even more pronounced than in China, where the bulk of the country's 50 percent savings rate comes from companies and the government.

As organized business expands in India, more people will give up their self-funded, low-productivity occupations and move into the formal workforce.

The modern economy has recourse to bank loans and capital markets.

"Greater access to capital from the financial system will reduce the amount of personal capital that entrepreneurs are obliged to tie up in their small businesses," the McKinsey report notes. "Households will not need to save so much."

Granted, the focus of the McKinsey study is on how much Indian consumers will spend, and not what they will put away.

The consulting firm predicts that the Indian consumer market will surpass Germany's by 2025 to emerge as the fifth-largest in the world, after the United States, Japan, China and Britain.

India ranks 12th at present.

As for predicting savings behavior, McKinsey researchers do agree that the task is a complex one.

"Even if the savings story plays out differently from that of our base case - for example, if investment expands to a higher level than that which we have forecast - the impact on consumption is likely to be minimal," the McKinsey analysts say.

Does it matter if Indians set aside more money or less?

The Reserve Bank of India's deputy governor, Rakesh Mohan, says that it is plausible that gross domestic savings in the year ending March 31, 2008, will rise to as much as 35 percent of GDP.

That is almost 10 percentage points higher than in 2003.

Add a small amount of capital absorbed through a current-account deficit, estimated to be less than 2 percent of GDP, and India has enough resources for economic growth of 8 percent or 9 percent. With more productive use of capital, even 10 percent is feasible.

The trouble with this happy picture is that when the economic cycle turns, both the growth in corporate profits and the government's fiscal improvements may disappear, cutting off resources for economic expansion.

So does India really need savings to rise much further? No, it only needs the ratio of savings-to-GDP to become more stable.

And that will require the demographic dividend to kick in.

The additional resources that have sustained the resurgence in economic growth in the past four years have largely come outside of the household sector - from company earnings and budgetary gains.

In the financial year that ended in March 2003, household savings were about 23 percent of GDP. The economy that year grew less than 4 percent. Three years later, the GDP growth rate was as high as 9 percent and yet the ratio of household savings to GDP was practically unchanged.

It is perhaps too early to look for a demographic dividend, which works by drawing a large number of people out of subsistence agriculture and into factory jobs. This has yet to happen in India. When it does, savings are bound to increase.

Another impetus may come from higher demand for pension cover, which 9 out of 10 Indian workers do not have at present; this is going to change as the retirement-savings industry modernizes and expands and as more workers join the formal economy, where they have to make mandatory provident-fund contributions.

McKinsey's prediction of a decline in India's household-savings rate is perhaps too simplistic.


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## Bushroda

*India-made cars coming to NWI*
Tuesday, May 8, 2007 9:15 AM CDT 

BY ANDREA HOLECEK 
holecek@nwitimes.com 
219.933.3316

HOBART | Team Imports will begin importing Mahindra all-diesel pickups and sport utility vehicles from India for sale at its Team Mahindra dealership as the vehicles make their first appearance in the U.S. market.

Mike Rudolph, one of Team Imports' owners, said the Mahindra's "out of the box" vehicles with their four-wheel drive automatic turbo diesel engines, good fuel economy and reasonable pricing have prompted him to become one of the company's 200 U.S. franchisees, the only one in Northwest Indiana.

"I like their thinking," Rudolph said Monday. "They offer a different vehicle. They're attacking the market from a different niche."

Manufactured by auto division of Mahindra & Mahindra LTD in Mumbai, India, the Mahindra pickups will begin appearing in the U.S. market in late 2008, with the company's Scorpio-model SUV's following in early 2009, Rudolph said.

The Indian conglomerate began its first venture into the auto market producing the "Willy," a Jeep-like vehicle, in 1954. It currently sells its SUVs in Europe, Australia and South Africa, according to its Web site. Mahindra is the fourth-largest tractor producer in the U.S., with manufacturing plants in Calhoun, Ga., and Red Bluff, Calif.

The company's entrance into the Indiana and U.S. market will be aided by the market's growing Indian population -- already are familiar with the company and its vehicles -- and their good value, Rudolph said.

"When most consumers can find a good value at a good price they'll get over it (foreign production) quickly," he said. "Their quality is good. By the J.D. Powers ranking, they (Mahindra) are in the top four or five among the out of 20-plus brands sold there."

The basic Mahindra SUV will have a $23,100 price tag, compared to a U.S.-made vehicle with a similar powertain and features that's priced $10,000 higher, Rudolph said. Mahindra vehicles all carry a four-year, 60,000 mile bumper-to-bumper warranty.

The Team Mahindra dealership at 4000 E. Lincoln Hwy., Hobart, will have mechanics trained to repair and maintain the imported vehicles. It's investing in the special tools for certain procedures, but Rudolph said any good diesel mechanic will be able to handle most normal maintenance.

The dealership also will carry a stock of replacement parts, with others available through its network of dealerships and a main parts warehouse in Alpharetta, Ga. Mahindra's U.S. importer, Global Vehicles USA Inc., is also located in Alpharetta. The company expects to sell 50,000 vehicles during its U.S. debut year.

"Mahindra knows they have one chance to get right in the U.S. market, so they're making sure everything's right quality-wise," Rudolph said. "They're very technologically-oriented and on top of the science."


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## Bushroda

*Canada needs its A Game in dealing with India*
*A strong pan-Canadian effort must be made by business and government to be a player in this increasingly important market*
DONALD STEWART 
May 7, 2007


If I had to summarize the business relationship between Canada and India today, it would be: great potential, modest progress.

This is worrisome.

After all, India is on course to become one of the world's most important economic players. The steps Canada takes now to improve its economic ties with India will have a long-term impact on our future economic growth and the prosperity of all Canadians.

I say this from the perspective of head of a Canadian company whose roots in India run very deep. 

Sun Life began operating there in 1892, left upon the nationalization of the insurance industry in 1956, returned to India in 1999 as a provider of mutual funds and, two years later, re-entered the newly deregulated life insurance market.

India is one of our most important international markets. Our joint venture there with the Aditya Birla Group has a sales force of more than 45,000 advisers serving 95 Indian cities, and we have grown to be one of the top five privately owned life insurers in the country.

India is one of the most important international markets, a country of extraordinary potential, with a huge population. This includes a well-educated and confident middle class approaching 300 million individuals, and GDP growth of more than 8 per cent annually in recent years.

However, Indian demographics and growth are only one side of the equation. There are a number of factors here in Canada that support trade and investment between our great countries.

Canada has a robust economy and educated work force, and is a proven conduit into the overall North American market. We share bonds of family and culture - Indian immigration to Canada is healthy and growing. There are also important similarities in many of our institutions, legal systems, and the language of business.

However, we must act now to fully realize the potential and succeed against tremendous competition from other countries that have intensified their focus on India.

In this fast-paced world of expanding free-trade zones and proliferation of bilateral trade deals, competition among countries is as fierce as competition among businesses. Make no mistake: It is their flag versus our Maple Leaf. Canada needs to promote a stronger national brand in India.

The race is on. Canada must compete - and compete to win. It's time to show the world, and India especially, that we mean business. Here are a few suggestions: First, we need to engage Indian decision makers deliberately, continuously and strategically.

The most effective place to start is government to government. The highest-level engagement is critical because India has many suitors in this economic courtship. Building a relationship at the top sets the right tone of commitment and partnership.

The government of Ontario and the federal International Trade Ministry have completed their own trade missions to India recently. We have been active participants in these initiatives, and they have our firm support. But if Canada is to continue punching above its weight on the global stage, there must be a higher level of strategic purpose and execution.

We need to move beyond disparate, in-and-out visits. We need a more co-ordinated and deeper, pan-Canadian approach to leverage these opportunities. Canada should intensify the number of diplomatic, trade and cultural initiatives across federal and provincial governments. Let us pursue one clear, common strategy, with each mission, initiative and exchange building off the previous one.

Second, we must focus on Canada's core competencies, sectors where we can win against the best the world has to offer to India. For example, we have world-class financial services expertise in this country. We should promote this expertise in India and seek greater investment liberalization in this sector. Other high-value-added industries, such as technology, also come to mind. In global negotiations, our government must be prepared to actively support its international champions.

Third, Canada should pursue a bilateral trade agreement with India to improve access to all key economic sectors, and to build our trade with India over the next decade. Remember this: As India becomes a dominant world player, Canada needs India more than India needs Canada.

It is of course also critical that we engage on a business-to-business level with successful companies mentoring those trying to establish themselves in India. We also need to better leverage organizations like the Canada-India Business Council to ensure Canada's commercial contribution and long-term goals are best represented in India.

In business, as in life, relationships require ongoing effort and investment. Sun Life is investing considerable efforts in India and this has proven to be a tremendous choice for us. We believe that it would be the right choice for Canada as well.

Mr. Stewart is the chief executive officer of Sun Life Financial Inc.

REQUIRED READING

"The early explorers sought a way to India in search of silks and spices. In 2007, a new mission of exploration is under way as businesses from around the world come to India for opportunities. India is not just being rediscovered - it already has been found by our competitors."

Canada and India: Boosting Economic Ties and Cutting Barriers, Strategies for Closer Economic Relations, The Canadian Chamber of Commerce, March, 2007, http://www.chamber.ca

"As serious attempts are made to tackle its weaknesses and build on its strengths, India is broadening its economic reforms and establishing itself as a high-growth emerging market. Canada should be moving more quickly to deepen the bilateral economic relationship."

Wendy Dobson, The Indian Elephant Sheds its Past: The Implications for Canada. C.D. Howe Institute, No. 235 (Spring 2006), http://www.cdhowe.org

"India is emerging from the shadow of China as a land of bountiful promise for foreign firms - if they can overcome the cultural hurdles."

Sun Life's insurance policy: The great Indian middle class, by Sinclair Stewart, The Globe and Mail, Oct. 1, 2005, http://www.ReportonBusiness.com/agenda

By the Numbers

1,095,300,000

India's population in 2006.

8.5 per cent

Real GDP growth in India's services sector over the past five years. It was 10 per cent in 2005-06

53 per cent

Proportion of India's GDP that the services sector accounts for.

$1.67-billion

Total value of Canadian exports to India in 2006.

50 per cent

Growth in Canadian exports to India, between 2005 and 2006.

Sources: United Nations, Department of Foreign Affairs and International Trade, Statistics Canada


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## Bushroda

*India's top envoy bullish on Canada*
*'Yippee' was 59-year-old's reaction upon learning he'd been posted to Ottawa*

May 07, 2007 04:30 AM 
Prithi Yelaja 
Staff Reporter

India's new high commissioner to Canada had a wide grin on his face for most of his first visit to Toronto since assuming the job. 

The bullish view of India that R.L. Narayan heard on his round of meetings with Canadian business leaders and this country's finance minister last week might have had something to do with his upbeat demeanour.

As the world's 12th largest economy, projected to be fourth largest by 2025, "India is increasingly being seen as the market of boundless opportunities and tremendous potential," Jim Flaherty said at a dinner organized by the Canada-India Business Council.

However, "while the world is turning its attention to India, (Canada has) only scratched the surface," and risks being left behind, he added.

"Our market share of India's exports and imports are a fraction of countries such as the United States or the European Union or Australia. They are outrunning us in this highly competitive global economy and the need to set the pace is important from a Canadian point of view."

His comments were echoed by Donald Stewart, CEO of Sun Life Financial, who described the business relationship in four words: "great potential, modest progress."

"This is worrisome," said Stewart. "In this fast-paced world ... competition among countries is as fierce as competition among businesses. 

"Make no mistake: It is their flag versus our maple leaf." 

Stewart suggested Canada needs to be aggressive in promoting its brand in India. His company has already formed a partnership with Aditya Birla Group to form Birla Sun Life, now one of the top five private life insurers in India, with a sales force of 40,000 in 95 cities.

"As India becomes a dominant world player, Canada needs India more than India needs Canada," said Stewart.

There is progress: Two-way trade was $3.6 billion last year, up 25 per cent from the previous year. Canada is pushing ahead to remove barriers and forge links with India, including a foreign investment protection and promotion agreement, with a view to a free trade deal in future, Flaherty said.

"So Canada's new government is determined we ensure we do what we can to further our relationship with India. Our government, along with the private sector, is focusing on India like never before. It's good for families and businesses in both countries."

Narayan, seated next to Flaherty at the dinner, beamed.

"This is music to any high commissioner's ears," he said, reflecting on the event. "I was especially pleased to hear the declaration by the minister that India is a priority. This kind of political muscle will mean the relationship between our countries will move ahead very fast."

Ottawa is Narayan's 10th posting in 35 years as a diplomat. His previous posts have included Washington, Moscow, Warsaw, Doha and Kuala Lumpur.

The refreshingly down-to-earth 59-year-old recalled his reaction upon learning he'd be posted to Canada: "I said `Yippee.' 

"Canada is what I had asked for. It's a big country, an important country and there is great potential to grow the relationship with India. We have huge stakes in Canada and getting bigger," he said, pointing to recent acquisitions in Canada by Indian companies, including the Aditya Birla Group's takeover of Minacs Worldwide last year and the recent bid for Algoma Steel by Essar Global, India's largest exporter of flat steel.

"(India) will have a lot to do with Canada in the future," he said. As its economy grows at nearly 10 per cent a year and adds 18 million people a year, "there will be huge demands for energy, infrastructure and technology â and Canada is an expert in these areas."

Post-secondary education is another field where Canada could market its services in India, said Narayan. About 120,000 Indian students go abroad each year, most to the United States, Britain or Australia, who have made concerted efforts to woo them.

While Canada views India as a "priority nation" for trade, the reverse is not yet true, Narayan admits. However, next month's visit of Kamal Nath, India's minister of commerce and industry to Canada, signals a change, he adds.

"In India we tend to compare Canada with the U.S., which is not always fair when you look at the size of the population. There is certainly interest in Canada and I'm sure it will translate into results." 

After serving two terms in Moscow, Canadian winters will be a piece of cake, Narayan said with a chuckle.

While in Toronto, he met with leaders of the GTA's Indo-Canadian community, whom he called "a huge asset" to both countries.

"Firstly, they're Canadians. Many of them have been here for decades so they know this country well. At the same time, they've kept in touch with India so they understand the business ethos there. 

"You could call them ambassadors," says Narayan, laughing. "Since I'm a high commissioner, I don't mind."


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## Bushroda

*That $2500 Car You Wished For, On The Way*
Claudia Strasbaugh

Can a cheap car be sexy? Maybe... I have a love affair with my car, I had one with the last set of wheels. Sure I resist paying for a really good ride but never have buyer's remorse. So if I can dodge being part of global warming and not have to pay off a costly machine, whatta deal. Maybe I'll take a cruise and watch the ozone hole close up.

India thinks they can help via Tata Motors (TTM) who's sending us a $2500 ride. Today the least expensive car I could find is a Chevy, their Aveo goes home with you for just under $11,000. 

Sexy or not, think about it a minute, a car for a fraction of the price of that flat screen. Most of us can slap it on the ole' Discover card and pay it off before the holiday shopping season.

Tata isn't new to the car biz, they're been turning out trucks, buses, ambulances, even some cement mixers since the company was founded 52 years ago. They also act as a secondary market, cranking out parts for Ford, GM, Benz, Toyota, and Jags.

India manufacturers are often privy to employee training the way the company trains techs in order to in-source jobs from the rest of the planet. Quality of individual work is considered better than that in China. Second in population after China, many think India with a billion citizens will overtake China's population to become the world-wide #1 economy. Indian Central Statistical Office estimates GDP growth rate at 9%.

Today selling at $19 with a P/E of 15 and a dividend yield of 1.5% Tata trades on the New York Stock Exchange under the symbol TTM. Market capitalization is $7.3 billion, favorable contrast with Toyota's equivalent P/E or higher P/E of 23 at Honda.

Tata Motors were up 19% in the month of February in a year to year comparison, commercial sales up 22% (David Riedel of Riedel Research Group). Granted, sales only rose 11% in March but quarterly revenue still was 60% on the positive side, earnings up 30%. Which U.S. or European car manufacturer would not have danced in the street for half that, half that over the past several years.

The sales have been influenced by two things - the government and the economy. The Indian government has imposed strict emissions standards to protect the environment forcing people to buy fuel efficient trucks and cars.

What has been a boom Indian economy and now may become one for us is the fact India wants it's young employees to be able to afford a reliable car. Today that's only 7 out of 1000 among the unwashed masses so Tata has huge potential there and may become the hit of the planet.

Truck owners aren't left out. Tata got orders for $5100 priced trucks under the model name "Ace" they introduced back in 2005. They've sold 100,000 Ace trucks in less then two years so says Forbes. To serve demand Tata is also building factory facilities to meet truck demands.

What will a Tata cost you today. Nothing, can't be had. It is anticipated when one is available cost will be more than $5000 thankyou Federal Government Customs Duties. There may be some minor car modifications required to meet all our specifications. Still, demand is the name of the game. If we insist, we can and will get it, sooner rather then later, too.


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## Neo

*Indian Punjab to set up business centre at Wagah *

AMRITSAR (May 08 2007): The Indian Punjab state government will establish a 100 acre state-of-the-art modern business centre, conforming to global standards, at Wagah border to facilitate trade with Pakistan.

This was stated by Chief Minister Parkash Singh Badal while addressing industrialists at the Guru Nanak auditorium here during a function organised by the industry and commerce department to disburse capital subsidy worth Rs 160 million to 221 industrial units.

He further said that the business centre as well as Wagah would have four-lane super-highway connectivity within two years. "Three development boards would be set up to boost industrialisation and economic activity in the state, " said Badal.

http://www.brecorder.com/index.php?id=561195&currPageNo=1&query=&search=&term=&supDate=


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## Neo

*India to target 210m kg tea exports *

KOLKATA: Indiaâs tea industry will target exports of 210 million kg in 2007, slightly higher than last yearâs exports with demand emerging from new markets, a top tea board official said on Monday.

India is likely to export more tea to countries like Egypt, Pakistan and Iraq this year, said Vasudeb Banerjee, Chairman of the state-run Tea Board of India. âA growing demand from emerging markets will help us achieve our goals. We are targeting exports of at least 210 million kg this year,â he said.

The bulk of Indiaâs 203.8 million kg exports in 2006 went to Iraq, Russia and the United Arab Emirates. âWe expect tea exports to Egypt to touch 6 to 10 million kg this year compared to 2.7 million kg last year,â Banerjee said at a news conference.

A delegation of tea board officials and Indian tea producers visited Egypt and Pakistan in April to promote export of tea, the official said. âPakistan is emerging as a significant market for Indian tea and we expect to export up to 20 million kg this year,â Banerjee said.

Last year, India had exported over 15 million kg of tea to Pakistan. Better road transport facilities, lower duties and freight charges were likely to spur the increase in exports, officials said. Tea board officials and Indian tea producers said on Monday that production also was likely to be higher than last year. âWe will be ahead this year,â Banerjee said. India produced 955 million kg of tea in 2006. 

http://www.thenews.com.pk/daily_detail.asp?id=54759


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## Neo

*Airbus to invest $1bn in India *

NEW DELHI: Airbus Industrie on Monday confirmed plans to invest one billion dollars in India in the next decade as its superjumbo Airbus A380 arrived to raise the profile of its only customer in the country.

The aircraft flew a maiden trip to New Delhi Sunday to mark the second anniversary of private domestic carrier Kingfisher Airlines, the only Indian airline and among 16 airlines globally to have ordered the plane from the European manufacturer.

Airbus will invest âone billion dollars in the next 10 yearsâ in India for training, maintenance and a design centre, John Leahy, chief operating officer for customers at European-based Airbus Industrie, told reporters in New Delhi.

In February Airbus said in the southern city of Bangalore that it would invest one billion dollars in the country during the next decade, but Leahyâs confirmation comes as the airline pursues massive cost-cutting linked to low demand and production delays of the giant passenger jet.

Kingfisher Airlines, ordered five A380s in 2005 among 15 planes in a deal worth about three billion dollars. It expects the first delivery of the aircraft in 2011 as it draws up plans for an international debut, using the A380 which has been much delayed in production on high-density routes such as to the United States. Air travel in India has soared in the past five years as almost a dozen new airlines have been launched to serve demand in the fast-expanding economy. 

http://www.thenews.com.pk/daily_detail.asp?id=54775


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## Bushroda

*India plans to borrow $15 billion for railroad overhaul*
By Cherian Thomas Bloomberg NewsPublished: May 8, 2007


KYOTO: Indian Railways, Asia's oldest network, plans to borrow $15 billion from commercial banks over the next five years to build new tracks, add passenger cars and modernize stations, the company's chairman, J. P. Batra said recently.

The funding is part of the state-run network's plan to spend as much as $56 billion by 2012 to meet rising demand for transportation in the world's second-fastest growing major economy after China.

Goldman Sachs estimates that India's $854 billion economy will grow at an average of 8 percent each year until 2020. That expansion will raise annual goods movement by 51 percent to 1.1 billion tons and passenger traffic by 31 percent to 8.4 billion people a year by 2012, Batra said.

"We realize that such high growth would be difficult to sustain without adequate capacity augmentation," Batra, the top bureaucrat in the Ministry of Railways, said in an interview in Kyoto on Sunday. "A number of major Japanese and European banks are keen to lend money to us."

Batra said that the Indian Ministry of Finance is in talks with its Japanese counterpart to arrange $4 billion of loans to finance a dedicated freight corridor in India. He did not name the banks with which Railways is negotiating for loans.

Indian Railways is building two freight tracks along the country's busiest routes. The first will connect India's financial capital, Mumbai, in the west, to New Delhi in the north. The second track will run between Ludhiana in the north and Calcutta in the east. The first phase of the project involves 2,700 kilometers, or 1,700 miles, of track at a cost of about $6.5 billion, Batra said.

The plan to refurbish the railroad is part of Prime Minister Manmohan Singh's plan to invest $320 billion by 2012 on improving the country's roads, ports and other infrastructure, all of which are strained. Singh wants better utilities to encourage investment in factories, generate jobs and accelerate economic growth to eradicate poverty in the world's second-most populous country.

The railroad, which has 1.4 million people on its payroll, plans to spend $7.7 billion in the current financial year, ending on March 31, to increase capacity.

Batra said that the railroad would rely on its surplus cash to make the investments. It earned a surplus of $4.5 billion in the year that ended March 31, and expects a surplus of $5 billion this year, he said.

"The major focus in the next five years will be on rolling stock such as the locomotives and passenger cars," Batra said. The plan is to almost double the annual capacity to produce passenger cars and locomotives to 4,500 and 700 respectively.

Indian Railways currently runs 11,000 trains a day, moving about 15 million people, or almost the combined population of New Zealand, Hong Kong and Singapore.

Still, the fastest train in India clocks a maximum speed of 140 kilometers an hour, half the pace of the fastest train in Japan.

East Japan Railway, Japan's largest rail operator, is testing a new shinkansen, or bullet train, called the Fastech 360, which has a top speed of 360 kilometers an hour. No date has been set for its introduction and no decision has been made about whether to run the train at top speed if it is introduced.

"We are starting feasibility studies to introduce high-speed trains in India, covering a distance of 2,800 kilometers," Batra said. "This will involve a major participation from private companies."

India was the first in Asia to get a passenger railroad when British rulers opened a 34-kilometer track from Mumbai to Thane on April 16, 1853. The network now covers 63,000 kilometers.

Rail lines make up 2.3 percent of the country's economy, which grew 9.2 percent in the year that ended on March 31, the fastest pace in almost two decades. Growth has averaged 8.6 percent in the past four years, the quickest expansion since the country's independence in 1947.

India also needs to spend money to upgrade the network as the key railroad tracks connecting the nation's biggest cities are "saturated in most sections," according to a May 2002 report by the railroads.

As many as 2,500 people have died in rail accidents between 1960 and 2004, and as many as 6,830 trains have derailed in that period, according to the railroads.


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## Neo

*LG Electronics India unit to invest $125m *

BANGALORE: The Indian unit of South Koreaâs LG Electronics plans to invest at least $125 million over the next five years to boost its presence in consumer electronics and home appliances, a top company official said on Tuesday.

The firm, the top branded consumer electronics company in India, plans to increase its local market share to 35 per cent by 2010 from between 28 and 29 per cent now, Moon Shin, managing director of the India unit, told reporters.

âWe are going to invest to promote our brand. We are working very hard to come out with new products,â Shin said after launching a new range of audio and video products including MP3/MP4 and disc players for the local market.

He said the investment would be made to expand capacity and to launch new products such as air conditioners in the next couple of years.

âHuge potential is there. The economic growth is very healthy and sound. Current business we have to increase and new business we have to find,â said Shin.

LG Electronics India, which increased sales by 10 per cent last year to Rs82.5 billion ($2 billion), was on track to achieve a sales target of 95 billion in 2007, said Shin, who took over as the India unitâs chief in January.

Home appliances made up 43 per cent of 2006 sales, consumer electronics made up 39 per cent and mobile phones 5 per cent.

LGâs India unit expects earnings from exports of products such as televisions, refrigerators and optical storage devices to rise to $240 million in 2007 from $170 million last year.

It exports to the Middle East, Africa, Bangladesh, Sri Lanka, Nepal and some European countries.

Shin said LG Electronics India would raise its contribution to the parentâs annual revenue to 10 per cent by 2010 from about 6 per cent now.

The Indian unit is aiming for turnover of Rs4.5 billion ($110 million) in digital audio-video products in 2007.

âThis translates into a 70 per cent value growth in the segment for LG, even though the industry itself is growing at a rate lower than 10 percent,â Shin said in a statement.

The company also said it would spend Rs50 million in the current quarter for marketing the audio-video products.

Amitabh Tiwari, business head for consumer electronics, said LG Electronics planned to raise market share in the audio segment to 20 per cent in the year ending December 2007 from 14.3 per cent at present, and to 30 per cent in video, up from 25 per cent.

LG Electronics and Samsung Electronics Co Ltd dominate the Indian home electronics market. Haier, Videocon and Sony Corp also compete.

http://www.thenews.com.pk/daily_detail.asp?id=54944


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## Bushroda

*Sky's the limit for India flight boom*
By Damian Grammaticas
BBC News, Delhi

*India is now the fastest growing aviation market in the world.*

A rapidly expanding economy, incredibly cheap fares and bullish new airlines are all driving the growth.

Hundreds of new aircraft are being ordered and airports like Delhi are planning to handle up to 100 million passengers a year, more than any airport in the world does today.

On the tarmac at Delhi's International Airport you can see the change happening.

The air is filled with the roar of jet engines as new airliners land, disgorge their passengers, then head off on their next trip.

Fuel trucks and baggage trolleys trundle purposefully to and fro. A dark haze hangs in the sky turning the setting sun into a soft, red disc.

In the terminals check-in counters are swamped by passengers.

At the ticket offices people clamour for seats, trying to snap up some of the cheapest fares in the world.

*Potential*

According to the Centre for Asia Pacific Aviation (Capa), passenger numbers are growing faster in India than anywhere else.

In the six months to September last year the number of people carried by airlines in India leapt 45% compared with 2005.

"India is accelerating quickly after years of inertia. The potential is huge," a recent report by Capa says. "Managed correctly, India stands poised as one of the most exciting aviation markets in the world."

Posing on the tarmac this week, surrounded by photographers and news cameramen was one of the new airline tycoons with big ambitions.

Vijay Mallya was standing in front of an Airbus A380 superjumbo.

He has ordered five for his company Kingfisher Airlines, with an option to buy five more. Kingfisher is less than two years old, and not even making a profit yet.

"With the five airplanes we've ordered we intend to launch daily services between Delhi and New York and Bombay and New York," Mr Mallya says.

"I've publicly stated that by 2010 we aim to be India's largest airline. We're on track to achieve that."

Just four years ago, before India liberalised aviation, there were only three main domestic airlines. Today there are around a dozen, among them aggressive budget carriers fighting for passengers.

None are making money yet, but 500 new aircraft are on order, and 2,000 new pilots will have to be hired.

The country's economic boom is what lies behind the growth. People have money to spend. And tickets on many routes start at less than $1 each.

Kapil Kaul, Capa's chief executive for India and the Middle East, believes that for the next 20 years India will be the world's fastest growing aviation market.

"This is all a combination of the economy doing very well and people having money to spend on travel which is what is creating this unbelievable kind of euphoria about aviation in India," he says. "And on the other side the fares are ridiculously low."

*Environmental concerns*

Today Delhi airport sees up to 20 million passengers a year. The busiest airport in the world is Atlanta with 84 million.

But India's capital has begun a massive expansion programme, planning for 100 million passengers by 2030.

Few of those flying today, though, know what all this will mean in terms of pollution and carbon emissions.

"I'm not thinking about all that right now," said Anita Gupta as she arrived to catch her flight to Mumbai.

"How it impacts the environment is difficult to grasp," added Anjali, as she queued at the security gate.

Danesh, a businessman, was the only person we found who was concerned.

"All these additional planes being added to the system, and the fuel being emitted, causing more warming is very hazardous," he said, "but I am still flying because I have to for my job."

For now, India's priority is a massive programme of building: half a dozen new international airport terminals, new runways, new infrastructure.

Worrying about the environmental cost will come later.


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## Bushroda

*Industrial growth at 10-year high*

*Some experts call it an aberration, others say it is set to continue, even if the pace may slow down marginally*

Paromita Shastri
New Delhi

Indiaâs industrial production, according to data released by the government on Friday, grew 11.3% in 2006-07, a 10-year high, on the back of an unexpected 12.9% acceleration in March, as the highest interest rates in five years failed to curb consumer spending. Economists were expecting the index of industrial production (IIP) to rise 10.4% in March. 

The surge in industrial growth has triggered fears among some experts that the central bank, the Reserve Bank of India (RBI), may be prompted to again raise interest rates to further curb credit growth. However, another set of data released by the government on Friday said that wholesale inflation had fallen to 5.66% for the last week of April, a four-month low that reduces chances of RBI increasing interest rates. 

âThe spurt in IIP augurs well for (the fight against) inflation. Incremental capacity is likely to kick in across industries in the coming months and should add to the salutory impact on prices,â said ICICI Bank chief executive officer and managing director K.V. Kamath. 

Experts said that industrial production would slow down in 2007-08 because some of the credit-tightening measures undertaken by the central bank would take time to kick in. âThere is a lag between rising interest rates and its impact on industrial production,â said Sujan Hajra, chief economist at Anand Rathi Securities Ltd, a Mumbai brokerage. 

Data released by the ministry of statistics and programme implementation show that the manufacturing sector, which has the highest weight, 79.36%, in the IIP, grew by 14% in March, pushing annual growth in the sector to 12.3%, the highest since 1995-96. 

The high industrial growth improves chances of the government meeting its targeted growth of 9.2% in gross domestic product, or the national income, in 2006-07. 

Experts had been busy revising their growth estimates down to 8.5% or less. 

Data for the the fourth quarter will be announced on 31 May. 

Some industry analysts such as JP Morgan Chase Bankâs Rajeev Malik, stunned by the unexpected rise in IIP, are already calling it an aberration. However, the performance of the use-based groups of industries shows that the growth has been primarily investment-driven.
A 17.7% growth in capital goods, or machinery and equipment, in 2006-07, on top of a 15.8% growth in 2005-06, suggests that industrial expansion is set to continue, even if the pace may slow down marginally later. 

âGrowth is getting more tilted in favour of investment. It is now an important driver of the economy. 

Also, this sector is yet to feel the impact of tight monetary policy,â said Dharmakirti Joshi, principal economist at credit rating firm Crisil. Finance minister P. Chidambaram has already indicated that investment growth may have already crossed 35% in 2006-07. 

Barring September-October 2006, growth in the capital goods sector growth has been in double digits, said Devendra Pant, director, Fitch Ratings, another credit rating firm. âAnother indicator for sustained industrial growth is the turnaround in growth of basic and intermediate goods, where growth went up from 6.7% and 2.5% in 2005-06 to 10.2% and 11.7% (in 2006-07). This implies that industrial activity continues briskly,â he added.

A closer look at the data reveals distinct signs of a slowdown in credit and inflation-sensitive sectors such as consumer goods. 

Production of durables, essentially consumer appliances and consumer electronic products has steadily grown slower from 6.8% in January to 1.6% in February and 2% in&#8195;March, bringing down annual growth to 9% compared with 15.3% in 2005-06. 

âData does show that the interest rates hike is impacting some sectors, particularly durables, where the growth has dramatically slipped to 2.7% in March from 21% (last March). This is supported by the evidence of a slowdown in automobiles,â said Crisilâs Joshi. 

According to Morgan Stanley economist Chetan Ahya, sales of trucks slowed to 9.4% in April from 13% in March, while sales of both passenger cars and bikes remained weak. 

The strong dip in durables was partly offset by an 18.5% growth in March in consumer non-durables, such as cosmetics and clothing. 

The data comes in the backdrop of fears that the Indian economy is overheating. Last month, Moodyâs Investors Service said Indiaâs $854 billion economy (Rs35 lakh crore) was showing âclassic signs of overheatingâ including higher than acceptable inflation and rapid rupee appreciation driven mainly by strong capital flows. 

Delhi School of Economics professor N.R. Bhanumurthy said he expects âa general moderationâ to 9% average industrial output growth in the current year. âThe past global slowdown is transmitting into the economy with a lag and global cycles will affect domestic output and exports,â he added.

RBI on 24 April forecast economic growth to slow to 8.5% in 2007-08. 

Chinaâs economy is expected to expand 10% this year, according to the International Monetary Fund. 

Crisil expects the Indian economy to grow by between 8.4% and 9.1% in 2007-08, while Fitchâs Pant said that he expects growth to slow down in even the services sector to 9% because of the rising rupee.


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## Bushroda

*Guangdong eyes hot Indian economy*

Guangdong Province has its sights set on the Indian market in an attempt to boost trade with the booming South Asian nation in coming months. 

Guangdong, China's biggest foreign trader, should make greater efforts to tap the potential of the Indian market and increase imports from the region, according to an official from Guangdong provincial bureau of foreign frade and economic cooperation. 

"Guangdong has planned to buy even more raw materials, minerals, agricultural products and other hard-to-find commodities from India in the remaining months of the year to support its fast growing economy," the Guangzhou-based Yangcheng Evening News quoted the official as saying. 

He urged the province's business representatives to seize opportunities to expand their trade links with India. 

Guangdong's foreign trade volume with India reached $1.31 billion in the first quarter of the year, up 77.1 per cent year-on-year, and it's expected to grow, according to statistics from Guangdong Customs. 

Guangdong, which lacks natural resources and energy for its economic development, is hungry for imported raw materials, minerals and natural resources from India. 

The Indian economy also provides a vast market for Guangdong's high quality products. 

Many international companies have established production facilities in the province, turning Guangdong into a "factory of the world." 

The province's exports to India rose to $790 million in the first quarter of the year, while imports from India hit $520 million in the first quarter of the year, year-on-year increases of 77.5 per cent and 76.6 per cent respectively. 

The province's machinery and electronic products have enjoyed hot sales in the Indian market since the beginning of the year. 

Guangdong's machinery and electronic product exports to India reached $630 million in the first quarter of 2007, up year-on-year 86.5 per cent and representing 79.8 per cent of the province's total exports to the country. 

The province also sold $18 million worth of textiles to India in the first quarter, up 68 percent from last year. 

Source: China Daily


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## Bushroda

*Hot on the heels of Hollywood*
By Josephine Moulds
Last Updated: 3:03am BST 12/05/2007

On a rain sodden industrial estate in a deeply unfashionable part of London, the powerhouse of Bollywood cinema nestles among air-conditioning wholesalers, ironmongers, and printing suppliers.

Eros International, recently named the BDO Stoy Hayward Business of the year at the Eastern Eye Asian business awards, is by no means a flashy media company.

But these very modest surroundings may soon have to be swapped for something much grander if the company's chairman and chief executive Kishore Lulla realises even some of his ambitious plans.

Mr Lulla talks like a man confident he is sat on a gold mine, and rightly so. Eros is the market leader in an Indian entertainment industry that PWC estimates is growing at 18pc a year and will be worth Â£12bn by 2011.

Bollywood - named after the centre of India's film industry, Bombay (now Mumbai) - produces some 1,000 films a year, or twice the number made in Hollywood.

And while quality has in the past played second fiddle to quantity, that too is changing.

"One of the factors is going global," says Mr Lulla. "Consumer taste is evolving. So countries like Indonesia, Malayasia Thailand, Russia and Germany, have started consuming Indian movies. And this is like fresh air for them when they see a totally different kind of movie with a lot of family values, music, Indian culture. The second is the Indian economy. There are 300 million people in the middle class [in India] at the moment, 300 million people have a lot of disposable income they are spending in multiplexes, so you are seeing a lot of tickets sold.

"There are only 13,000 screens in India at the moment. This will go up to 50,000 screens in the next five to 10 years. Once that happens you would see a film grossing maybe $50m-$100m (Â£25m-Â£50m). And once that happens you will see a lot of money going back into production.

"It's like different cultures competing for the same audiences in the future," says Mr Lulla. "Because if you look at the quality of Bollywood movie, we can produce those movies at maybe 10pc, or 20pc of the cost that Hollywood can do.

"If Hollywood is spending $100m a movie, we make the same kind of movie for $10m-$20m so just imagine if we have $50m dollar budget in India, what world class product we can make. There is obviously a lot of talent in India. Hollywood is looking back to India to commission a lot of the post-production work and shooting work."

Mr Lulla's father founded Eros in 1977, with enough success to give his children a comfortable, middle-class upbringing.

"Dad used to export movies," says Mr Lulla. "I was in college and I used to go and visit Dad to see different buyers across the world. So then in the 80s we decided that instead of selling our movies, Bollywood will go global soon.

"We thought about globalisation at that time. It took another 25 years to globalise Bollywood, but fine it happened, never too late.

"And then we started setting up offices in the different parts of the world and now we operate in 50 different countries."

Eros operates a studio model, commissioning films and co-producing them to minimise the risk of backing a flop, which it then distributes in India and across the world. Its mission is to consolidate the domestic market industry although not via acquisition.

"The market is fragmented and there are not many companies to buy," says Mr Lulla. "They are mostly a one-man, two-man band, how Hollywood was in 1930s.

"In the past 30 years the management team, and especially my family, has worked with most of the makers and most of the directors. They know us very well, they think Eros is part of them." So it is not surprising that the company is in talks with three of the five major Hollywood studios, who are scrambling to tap this lucrative market.

But Mr Lulla is unlikely to cede control of this very family-orientated business any time soon. Brother Sunil is president of Indian operations, while a cousin heads the international business. Founder and honorary life president, Arjan Lulla, still goes into the office every day.

A cultural chasm opens with Mr Lulla's earnest response to my question as to whether his father is always welcome.

"I love it," he says. "I don't want my father to stop work at all. Even if I get stuck sometimes in any decision making I always call my father and take his valuable advice."

Otherwise he models the business on the big five Hollywood studios.

"I've seen what the different studios have done in the last 70 years. I will never do the Warner/AOL merger. So I'm trying to borrow the best of all the models and implement it in Eros.

"Hence Eros has the production, without [all] the risk or production, and the distribution, and the new media, and the music, and the publishing.

"We've got Eros animation which is like a Disney arm. Once you have that in place you can have Eros merchandising.

"So I keep on studying the Hollywood model."

Now may be the time to start planning that office move


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## Bushroda

*Arnold Schwarzenegger to visit Hyderabad in November *
Malaysia Sun
Thursday 10th May, 2007 
(IANS)

California Governor Arnold Schwarzenegger, hero of many Hollywood action films, will visit Hyderabad in November with a high-level business delegation to discuss mutual cooperation and investment opportunities in Andhra Pradesh.

This was decided at a meeting Chief Minister Y.S. Rajasekhara Reddy had with Schwarzenegger in Sacramento, California, Thursday.

According to a statement from the chief minister's office here, he had detailed discussions with Schwarzenegger on boosting trade ties between Andhra Pradesh and California in various sectors.

The meeting took place at the invitation of Schwarzenegger. On learning about Reddy's stay in California as part of his four-day visit to the US, he had invited him.

The California governor agreed to Reddy's request to explore all possibilities for investments in major sectors like IT, biotechnology, pharmaceuticals, food processing, BPO (business process outsourcing), micro-irrigation and water conservation.

Schwarzenegger had a word of praise for Reddy. 'You seem to be very popular among the people of not only your state, but the country. You are a blend of a farmer but a modern administrator and astute politician. That is what is wanted in an agrarian economy, particularly in a developing democratic country like India. You are doing very well on the farm, water and irrigation front,' he said.

Reddy told Schwarzenegger that he was very popular in India. 'Even in my state of Andhra Pradesh, you as an actor has many fans,' said the chief minister.

The California governor said he has great admiration for India, a great liberal democratic country. 'My wife, in fact, likes the spirituality of India', Schwarzenegger said, adding that he would love to visit India and its people.

Schwarzenegger said he was happy that many Indians do stay and work in his state. The chief minister pointed out that that every fourth Indian in California is from Andhra Pradesh.

Reddy explained to him the rapid strides made by Andhra Pradesh in IT, biotechnology, pharmaceuticals and food processing and briefed him about massive irrigation schemes and infrastructure projects including the upcoming Rs.24.78 billion (nearly $610 million) international airport at Hyderabad.


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## Bushroda

*India's Production Growth Unexpectedly Accelerates *
By Cherian Thomas

May 11 (Bloomberg) -- India's industrial production growth unexpectedly accelerated in March, as the highest interest rates in five years failed to curb consumer spending. 

Output at factories, utilities and mines gained 12.9 percent from a year ago after a revised 10.8 percent increase in February, the Central Statistical Organisation said in a statement in New Delhi. Economists expected a 10.4 percent rise. 

Faster-than-expected production growth suggests it may take longer for the Reserve Bank of India's interest-rate increases to damp the enthusiasm of consumers, who last year received the highest wage rises in Asia. Unlike China and other emerging economies, India's growth is driven by its 300 million middle class people, equal to the population of the U.S. 

``There is a lag between rising interest rates and its impact on industrial production,'' said Sujan Hajra, chief economist at Anand Rathi Securities Pvt. Ltd. in Mumbai. ``Production growth this year will be slower than last year.'' 

India's benchmark Sensitive index increased 0.2 percent to 13,796.16 at 3:30 p.m close in Mumbai. The yield on the 10-year government bond rose 5 basis points to 8.17 percent. 

Moody's Investors Service last month said India's $854 billion economy was showing ``classic signs of overheating'' including higher-than-acceptable inflation and rapid rupee appreciation driven mainly by strong capital flows. 

*Slower Growth* 

India's central bank April 24 forecast economic growth to slow to 8.5 percent in the year ending March 31, from 9.2 percent in the previous year. China's economy is expected to expand 10 percent this year, according to the International Monetary Fund. 

In March, manufacturing gained 14.1 percent from 11.9 percent in the previous month, while electricity output almost doubled to 7.9 percent. Consumer goods output jumped to 14.2 percent, according to today's report. 

India's middle class, people earning from $4,545 to $23,000 a year, has tripled to 300 million in the past 20 years as the government opened its economy to foreign investors such as Ford Motor Co. and Dell Inc. and created jobs, according to the National Council for Applied Economic Research. 

``The impact on industrial growth will be really visible from April onwards,'' said D. H. Pai Panandiker, president, at RPG Foundation, an economic policy group in New Delhi. ``Demand is gradually slowing.'' 

Merrill Lynch & Co. and Franklin Resources Inc. are increasing purchases of Indian government debt, predicting the central bank will end the cycle of nine interest-rate increases since Oct. 2004. 

*Confidence Wanes *

DSP Merrill Lynch Fund Managers Ltd., a unit of New York- based Merrill, last fortnight raised 2.8 billion rupees ($68 million) for its first Indian bond fund since 2002. Franklin Templeton India, part of the San Mateo, California-based money manager, doubled holdings of benchmark debt in one of its funds in March. The increase in demand for the securities may bolster prices for Indian bonds, which have slumped since 2004. 

The central bank may also refrain from raising interest rates as business confidence in India fell this quarter for the first time in six months as Maruti Udyog Ltd. and other companies said sales may slow on higher borrowing costs, said Shashanka Bhide, chief economist at the National Council of Applied Economic Research in New Delhi. 

The business confidence index developed the NCAER, based on responses from 590 companies, declined to 151.3 in the current quarter ending June 30 from 157.3 in the previous quarter, the research group said May 4. 

*Cash Rebates* 

Maruti Udyog Ltd., India's biggest carmaker, is offering cash rebates to attract buyers who are deterred from purchasing because of higher borrowing costs. Car sales will likely grow about 15 percent this fiscal year compared with 22 percent in the previous year, according to Ashutosh Goel, a Mumbai-based analyst for Edelweiss Capital Ltd. 

Bajaj Auto Ltd., India's second-biggest motorcycle maker, reported a 10 percent fall in sales in April from a year earlier as demand for motorcycles waned. 

Commercial banks have increased their lending rates by between 200 basis points and 250 basis points since December. State Bank of India, India's biggest commercial bank, said on April 7 it will charge its best borrowers 12.75 percent, the highest since April 1999. 

Governor Yaga Venugopal Reddy left the central bank's key overnight lending rate unchanged on April 24 to support growth as he forecast inflation to slow to 5 percent this year. 

``There have been signs that the economic momentum have already slowed mildly,'' said Sebastien Barbe, Hong Kong-based senior economist at Calyon, the investment banking unit of France's Credit Agricole SA. ``The central bank will likely give time for the monetary policy tightening to produce its full effect on inflation.'' 

Reddy, who raised the benchmark rate six times in the past 16 months to a five-year high, may be relying on the lagged impact of past rate increases to rein in price gains in Asia's fourth-largest economy, assisted by a strengthening currency and cuts in import taxes. 

India's benchmark wholesale price inflation slowed to a four-month low of 5.66 percent in the week ended April 28 as higher rates damped demand for manufactured goods and lower import taxes reduced prices of wheat and pulses, the government said today.


----------



## Neo

*Indiaâs industrial output grows robustly * 

NEW DELHI: Indiaâs industrial production grew faster than expected in March from a year earlier due to strong factory output, but analysts said slowing inflation may allow the central bank to hold interest rates steady for a while.

Industrial output in March rose an annual 12.9 per cent, data showed on Friday, above forecasts for a 10.4 percent rise, and analysts said that the economy looked set to meet a government estimate of 9.2 per cent growth for the fiscal year 2006/07.

Data also showed inflation, as measured by wholesale prices, fell to its lowest in 2007. The wholesale price index rose 5.66 per cent in the 12 months to April 28, easing towards the central bankâs fiscal year-end target of close to 5 per cent.

âEven though the industrial output for March is strong, with inflation coming off it will give more flexibility to the central bank to keep interest rates on hold,â said Rajeev Malik, economist at JP Morgan in Singapore.

The central bank has raised its main lending rate five times in less than a year to curb inflation and rein in high credit growth. The rate stands at 7.75 percent and the market has broadly been expecting another increase in the next few months.

Manufacturing production, which represents more than 75 per cent of industrial output, rose 14.1 per cent in March from a year earlier, compared with 12.3 per cent growth in February.

Industrial output in Asiaâs fourth-largest economy has been growing strongly on the back of robust consumer demand and exports. In February it grew an annual 10.8 per cent.

Interest rate increases are starting to stem consumer spending, but companiesâ order books continue to build and capital goods spending remains solid.

India releases gross domestic product data for the March quarter and the fiscal year to March 31 at the end of the month.

http://www.thenews.com.pk/daily_detail.asp?id=55440


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## Bushroda

*Kingfisher Airlines: Soaring ambition *
P R Sanjai / Mumbai May 13, 2007 

Conventional wisdom can question some of the things that Vijay Mallya, whose liquor company UB controls Kingfisher Airlines, does. For instance, why is a two-year old domestic carrier, still three years away from international operations if it played by the book, buying A380, the world largest civilian aircraft? 

So far, the double-decker aircraft, which can seat 853 in an all-economy configuration, has found buyers only among large international carriers like Singapore Airlines, and none among the busy US carriers. 

Mallya does not bother to explain. âI do not want to keep my aeroplanes on the ground. Wait and you will see a unique product in the international sky,â said Mallya, waving a Kingfisher beer bottle on board the aircraftâs high-decibel flight from New Delhi to Mumbai, whose ambience resembled a Page 3 party. The trouble is that even the most conventional thinker cannot dismiss what Mallya says as hyperbole. He has earned the right to be taken seriously. 

Launched 24 months ago, Kingfisher packed a surprise right at the beginning. Everyone thought it would join the crowd of low-cost carriers. But once out of its shell, the airline offered full service and no price concessions. Its swank new aircraft and a very efficient front office added to the appeal.Starting with a minuscule 0.07 per cent share of the market, Kingfisher soared to 7.7 per cent after 12 months and 10.6 per cent in April this year. At the same points in time, the market share of Jet Airways, the market leader and Mallyaâs rival of choice, was 41.3 per cent, 33.2 per cent and 22.9 per cent. 

Of course, it cannot be established that Jetâs loss is Kingfisherâs gain. Says a Jet executive: âThe market has grown as more airlines have entered the scene. By dropping fares, Air Deccan (the pioneer in domestic low-far flying) has eaten into the market shares of all airlines. We have not lost any passenger to Kingfisher.â 

From here on, Kingfisherâs flies into the most critical phase of its fledgling existence as it gears up to go beyond Indiaâs borders. It has been waiting for a licence to fly to the US from the government, which says that a domestic carrier must fly for five years before being eligible to start international flights. To circumvent the clause, Mallya has set up a subsidiary in the US, Kingfisher International. However, it has yet to obtain all clearances. 

Hopes arose last week when civil aviation minister Praful Patel said his ministry would grant permission to domestic airlines to fly international on a case-by-case basis. 

One interpretation of it is that the five-year clause gets junked. Kingfisher plans to deploy A380s on non-stop India-US flights. Estimates say that will reduce the cost by 30 per cent.Adds Kingfisher executive vice-president Hitesh Patel, âWe are very much on track with our Plan A â starting service from India to the US under the Indian flag.â 

Things will not be easy in the dog-eat-dog world of international flying. âMallya will have to secure various approvals, source engineering talent and pilots, and invest heavily in overseas stations,â say industry analysts. 

Jet Airways has just revamped its international operations and set up a hub in Brussels for flying in Europe. Mallya though remains undaunted. âKingfisher will be the biggest airline in India by 2010 not only in terms of market share, as others claim. In all the aspects, it will be the biggest. Wait and you will see,â he said, dismissing all related questions. Hyperbole? Like the man says, we will wait and see.


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## Bushroda

*DaimlerChrysler building plant in Western India*

NEW DELHI -- (AP) -- German automaker DaimlerChrysler began construction of a plant in western India Thursday so the company could meet growing demand for luxury cars in one of the world's fastest growing economies.

The plant near Pune, an automobile manufacturing hub, will be DaimlerChrysler's first fully owned production facility in the country.

Currently, the makers of Mercedes-Benz cars operate a manufacturing plant on lease from Indian automaker Tata Motors.

DaimlerChrysler is investing $67.5 million in the new plant that will have a capacity to produce 5,000 vehicles annually, the company said. It will initially employ 350 people.

Construction began after Vilas Rao Desmukh, the elected head of Maharashtra state, where the plant is located, inaugurated the project, according to the statement.

The first car from the new plant is expected to roll out in early 2009.

''As a company, we have enjoyed steady and profitable growth in India and we are looking forward to continue our success story here in our own premises,'' said Wilfried Aulbur, chief executive at the company's Indian subsidiary.

Rising middle-class incomes and the launch of new models have driven automobile sales in India, which are expected to nearly double to 2 million units by 2010.

Although small compact cars dominate Indian roads, high-end luxury cars are increasingly finding buyers among the newly rich in Asia's fourth-largest economy.

DaimlerChrysler in India sold 2,121 units of the Mercedes-Benz S-Class, E-Class and C-Class sedans in 2006, an increase of 11 percent from a year ago.

Rival car maker BMW plans to roll out at least 1,700 cars a year from its first assembly plant in southern India, which was inaugurated in March.


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## Bushroda

*âSecond Tierâ City to Rise Fast Under Indiaâs Urban Plan*
By ANAND GIRIDHARADAS
Published: May 13, 2007

NAGPUR, India â A year ago, this relatively small, forgettable city in the heart of India did not have an air-conditioned cinema. In the sweltering heat of summer, the rich would fly one hour to Mumbai, Indiaâs financial hub, to see a movie and stock up on Leviâs jeans, Dominoâs Pizza and other big-city treats that they could not find at home. 

But if the government has its way, Nagpur will become a destination city itself. In an experiment that is highly unusual for this most unplanned of countries, the government is doling out money to Nagpur and other âsecond tierâ cities to help them modernize â fast. 

The plan is to provide the kind of modern conveniences, and infrastructure, that will attract more international investors to India. In doing so, the government is following the lead of China, where the government has invested in infrastructure such as roads and airports, taking a build-it-and-they-will-come approach that has drawn foreign corporations helping to fuel the countryâs boom. 

Indiaâs government is also hoping its plan will stop disasters in the making in its largest, teeming cities as more people move there in search of jobs and a more urban lifestyle. 

âOne hundred million people are moving to cities in the next 10 years, and itâs important that these 100 million are absorbed into second-tier cities instead of showing up in Delhi or Mumbai,â Montek Singh Ahluwalia, the Indian governmentâs chief economic planner, said by telephone.

Already, Nagpur, with an estimated population of about 2.5 million, is a changed city. So far, the government has allocated $280 million for projects and has paid for everything from lush parks to new roads. And investors â drawn by the hope of a boom â have built several malls and a multiplex cinema, complete with air-conditioning. 

A renovated airport will become the cargo hub of India, with a terminal that will be 100 times larger than the existing one and will handle at least 100 jets at a time instead of the current five. 

The government is planning an ecofriendly mass-transit system to absorb an expected surge in road traffic, years before many residents even own a car.

The government is also building a special economic zone with ready-to-use water, electricity and fiber optic cable, in the hope of attracting 100,000 technology jobs to a city long dominated by coal mining. It is providing tax breaks for companies who set up businesses there.

Since its independence from Britain in 1947, the city-building philosophy of India has been, to put it gently, laissez-faire. Except for the recently developed technology hubs of Bangalore and Hyderabad, India has not added cosmopolitan, globally connected metropolises to its old ones: Calcutta, Delhi, Madras and Mumbai. 

And those cities have shown the strain as more people have poured in from the countryside in recent years. 

In Mumbai, a majority of the more than 15 million residents live in slums, and a river of sewage passes through the middle of the city. Delhi is chronically short of clean drinking water and electricity. 

So far, the government has pledged to spend $29 billion over seven years to upgrade 62 cities besides Nagpur. Grants are given only to cities that can show good fiscal controls and enact business-friendly policies like scaling back rent control. 

No one knows if India has the stamina to make Nagpur a truly international hub, and then transform scores of other cities. But many experts say that the plan to remake smaller cities could be a key to Indiaâs continued economic growth. 

âMuch of Indiaâs future will undeniably be made in the second-tier cities,â said Ashutosh Varshney, a specialist on Indian political economy at the University of Michigan in Ann Arbor. The existing metropolises âwill reach saturation points before long, or have already reached such points.â

The second-tier cities could address the needs of local and foreign corporations that have complained about soaring land prices and increasing wages in the countryâs most modern cities. 

Experts say the government plan could also provide a boost to home-grown businesses. More international airports, for instance, could help raise incomes for the countryâs hundreds of millions of farmers by making it easier for their produce to reach export markets. 

Nagpur has a head start on most of the other cities expected to receive government money. Because the government selected it as the air cargo hub for the country, skeptical investors have more hope that this obscure city will eventually rank with the busiest air centers in the world.

Today, the Nagpur airport is an airstrip. Visitors deplane and walk across the tarmac to enter the terminal. It takes 30 seconds to traverse the entire terminal from arrival gate to taxi stand.

The blueprints foreshadow radical change. Nagpur got its first international flight just 18 months ago, but it is already planning a second runway long enough for jets like the Airbus A380 superjumbo. A new terminal, already being built, is designed to accommodate 14 million passengers a year.

Next to the airport is a vast special economic zone, an enclave of relative economic freedom designed to attract investors. Boeing is already setting up a maintenance hub there and in an adjoining technology park. Indian companies that do outsourcing work for American and European companies like Satyam Computer Services and HCL Technologies are buying land.

Some worry that all the change â which has already caused real estate prices to soar in the city â is fueling a bubble economy that could burst. Alok Tiwari, the executive editor of The Hitawada, the local newspaper, said a boom cannot last unless more jobs are created, increasing buying power. 

âWeâve got to create opportunity, not just take land and build a mall there,â he said.


Yet others say such development will eventually take on a life of its own, driving the economy by raising peopleâs expectations and willingness to work hard to afford the new luxuries appearing before their eyes. 

Vishwas Chaknalwar, a developer, put it this way. âOnce you wear Pyramid clothes,â he said, referring to the new Pyramid mall here, âyou cannot wear anything else.â


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## Bushroda

*India's 'madness' is worthy of attention*
2007/5/12
By William Pesek

A quiet revolution is unfolding in India and it could say much about the future of Asia's fast-growing economies. 

In New Delhi, Finance Minister Palaniappan Chidambaram is standing by as the rupee rises. It has gained almost 10 percent versus the U.S. dollar over the last 12 months, and 18 percent against the yen. To say that hasn't gone over well with India's business establishment would be a gross understatement. 

Take Munish Saigal, director of foreign exchange at Ranbaxy Laboratories Ltd., India's largest drugmaker. He says the rupee's advance to a nine-year high against the dollar is "madness" and won't last. 

"The rupee is massively overvalued and there needs to be some sanity to find out what the appropriate level is," Saigal told Bloomberg reporter Sam Nagarajan last month. Also last month, Ganesh K. Gupta, president of the Federation of Indian Export Organisations in Mumbai, said the rupee's appreciation "is a disaster for the export community." 

Chidambaram seems to think otherwise, and India's 1.1 billion people will be better off in the long run for it. Ditto for the rest of Asia, if it were to follow India's lead. 

Earlier in the year, Indian officials seemed to try their hand at halting the rupee's ascent. In January and February, traders buzzed about government efforts to sell the currency. 

The finance minister no longer seems to be fighting the tide. Indian officials may realize that pumping up economic growth with a weak currency is counterproductive. It takes pressure off politicians to modernize economies and reduces the urgency for entrepreneurship in the private sector. It increases the risk of importing inflation amid high commodity prices. 

Weak-currency policies give investors fewer incentives to move capital your way. Also, amassing hundreds of billions of dollars of U.S. Treasuries is an unproductive use of savings. That money could be put to better use building roads and power systems and paying for education and health care at home. 

One of the best reminders of the futility of obsessing over currencies came from Paul O'Neill in December 2002, when he was U.S. President George W. Bush's Treasury secretary. O'Neill, a former Alcoa Inc. chairman, said good chief executives "don't live and die on exchange rates." In other words, companies bellyaching about currencies are just looking for state help. 

It's not easy for executives in a developing nation to compete globally with U.S., European and Japanese peers. Yet relying less on a weak currency could raise India's corporate game to new heights. A key reason China lacks India's entrepreneurial spirit is that China's companies are, thanks to a weak yuan, focused on exporting goods cheaply -- not innovating and creating new ones. 

Is India's currency tolerance spreading in Asia -- especially to North Asia? Well, certainly not to China or Japan, both of which work hard to keep their currencies weak. Yet there are glimmers of hope in South Korea. 

Korean Finance Minister Kwon Okyu seems to be engaged in his own experiment of sorts with a stronger currency. The won isn't appreciating much versus the U.S. dollar. It has gained just 0.9 percent over the past 12 months. Against the Japanese yen, though, the won has risen almost 9 percent. 

Kwon's tolerance for a stronger won has great significance to economists such as Nouriel Roubini, chairman of New York-based Roubini Global Economics LLC. 

"Korea is an important example of a nation trying to get off the Bretton Woods II system," Roubini said May 4 at the Asian Development Bank's annual meeting in Kyoto. 

In Kyoto, Roubini told me more about his concerns that Asia is setting the stage for another financial crisis, more of its own making than the last one. 

"When you look back at this period years from now, we will say Asia learned the wrong lessons from 1997 and created another currency crisis," Roubini said. 

The reference here is to the Bretton Woods II system that has emerged since 1997. After the Bretton Woods regime of pegging currencies to gold collapsed in 1971, many nations just pegged to the U.S. dollar. By the late 1990s, much of Asia couldn't maintain that arrangement and currencies plunged. 

What followed was recognition of the wisdom of flexible exchange rates. As the 2000s began, though, governments under pressure to boost growth opted to help exporters with weak currencies. And many will argue the ends have justified the means. Asia excluding Japan will grow 7.6 percent in 2007, and 7.7 percent next year, the Asian Development Bank said. 

Today's growth may come at a cost in the long run. "This new model is leading to excessive monetary and credit growth, asset bubbles in stock markets, housing markets and other financial markets that will eventually lead to a build-up of financial vulnerabilities," Roubini said. "That could trigger a financial crisis different from that of 1997, but that could be potentially as severe," he said. 

That's why Korea's flirting with a stronger won may be an important harbinger of sobriety in North Asia. The real test will be whether the country allows the won to surge versus the dollar. 

In the age of globalization, a strong currency is ultimately a sign of confidence in an economy's prospects. Let's hope India stays the course, and others in Asia follow its lead. That would be anything but madness.


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## Neo

*India may buy 4-5 million tonnes wheat to build stocks *

NEW DELHI (May 13 2007): India might import four to five million tonnes of wheat this year to build stocks to meet any sudden spurt in demand, Farm Minister Sharad Pawar said on Saturday. The country is looking to import wheat for the second year running with government purchases of domestic grain likely to fall short of its target figure.

The State Trading Corp has already tendered to import one million tonnes of wheat. The bidding deadline for the tender closes on May 21. "We may import four to five million tonnes of wheat this year to build stocks for emergencies," Pawar told reporters on the sidelines of a meeting on farm research.

"We have enough for this year but we want to build stocks." Pawar added as on April 1 government had stocks of 4.5 million tonnes of wheat and state agencies have since that date purchased 9.2 million tonnes of wheat from farmers.

The government needs 12 million tonnes of wheat annually for the public distribution system and welfare schemes for the poor. The Food Corp of India buys wheat from farmers on behalf of the government. It hopes to buy 12-13 million tonnes by June 1. It had hoped to buy 15 million tonnes.

Lower purchases of the grain in 2006 forced India to go in for expensive imports totalling 5.5 million tonnes. Pawar said it was difficult to say how much wheat would be procured this year. "We are having discussions with state governments on low procurement."

India has one wheat crop a year, mostly in its northern states, and output has been stagnating around 70 million tonnes annually while consumption has been growing. The farm ministry has forecast the wheat crop will rise to 73.3 million tonnes this year from 69.4 million in 2006.

http://www.brecorder.com/index.php?id=563022&currPageNo=2&query=&search=&term=&supDate=


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## Neo

*SBI reports 75pc rise in quarterly income *

MUMBAI: Indiaâs largest lender State Bank of India on Saturday reported a 75 per cent rise in its quarterly income, beating expectations as strong loan growth and lower taxes boosted earnings.

SBI said it would venture into more profitable businesses like private equity, wealth and pension funds management in its efforts to catch up with smaller, but nimbler private sector rivals such as ICICI Bank, HDFC Bank.

âThe corporate strategy and new business group has been created to focus on emerging opportunities,â SBI said in a statement.

Its Chairman OP Bhatt told reporters in Kolkata, âwe are in advanced stages to enter areas like general insurance and an infrastructure fund. We will raise about a $1 billion by June.â

The state-run bank said net profit for the January-March quarter was Rs14.93 billion ($362 million), up from Rs8.53 billion reported a year earlier.

A Reuters poll of analysts had forecast a 22 per cent rise in net profit to Rs10.44 billion.

Full-year profit rose a modest 3.1 per cent to Rs45.41 billion due to additional provisions for taxes and loan losses, the statement said, adding loan loss provisions for the year rose nearly 10 times to Rs14.3 billion.

For the January-March quarter, the bank had improved its operational performance with net interest income jumping 22 per cent on year to Rs43.2 billion. 

Earnings were also helped by a 2 per cent fall in taxes at Rs10.63 billion.

SBIâs pre-tax profit for the quarter rose 21 per cent to Rs39.68 billion.

Interest income of banks have been growing as companies have expanded and individuals bought homes and cars in an economy estimated to have grown 9.2 per cent in 2006-07.

The boom has however stoked inflation during the year, making the central bank tighten liquidity which led to a jump in deposit and lending rates, hurting banksâ profit margins.

The faster rise in deposit rates was reflected in the bankâs interest expenses, which surged 46 per cent during the quarter to Rs72.21 billion.

SBIâs Bhatt expects no let up in pressure on profit margins.

âThis year we are expecting more pressure on net interest margins,â said Bhatt. âI donât see any easing of pressure.â

Shares in SBI slid 20 per cent in the March quarter, faring worse than the 7.7 per cent drop in the banking sector index.

http://www.thenews.com.pk/daily_detail.asp?id=55602


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## Bushroda

*An Indian summer for investors?*
Post Online, UK

With a booming economy and a vast untapped market of middle-class clients needing insurance cover, many UK-based insurers are looking to bask in the sunshine industry of India's insurance sector. Rachel Gordon reports 

There is plenty about India that appeals to the British. Food, of course, is one and Shilpa Shetty quickly won a big fan base after appearing on - and winning - Celebrity Big Brother 2007. The Indian insurance sector, and the investment opportunities it presents, is also hot stuff right now.

*It seems there are constant references to the phenomenal success story that is the Indian economy, which is growing at some 9% a year. It is predicted the country will move from being a third world to first world country in a single generation.* In contrast to the UK, where the population is ageing and insurance take-up is high, 60% of India's population is under 30 and the insurance market is practically untapped.

Various figures exist, but it is reported that 80% of the population do not have life cover, while the Indian non-life market is predicted to grow by 39% in the period 2005-2010.

Take-up is rising across the board to include both life and general insurance, but with such strong fundamentals, it is clear India has the potential to be a hugely attractive emerging market.

Until the year 2000, there was no scope for outsiders to participate in Indian insurance, with two main state-owned insurance companies - the Life Insurance Corporation of India and the General Insurance Corporation of India - covering the life and general insurance sectors. All that changed with the Insurance Regulatory and Development Authority Act 1999. This allowed the entry of foreign companies into the market, provided they held no more than a 26% investment and partnered with an Indian company. At the same time, an overall regulator was established - the Insurance Regulatory Development Authority.

Once the market opened up - albeit in a limited way - a wave of worldwide insurers and affiliated businesses headed east. Foreign companies currently account for 27% of the Indian market, including Allianz, Aviva and AIG.

Neeraj Tuli, who spent 15 years with insurance lawyers Kennedys, says he has no regrets about leaving London for India. He is now senior partner with Tuli and Co, which has offices in New Delhi and Mumbai. The firm is associated with Kennedys and like its UK counterpart specialises in insurance-related matters. He describes the insurance sector and indeed the economy as "buzzing".

For potential and existing investors, the key question is when the government will allow foreign companies to up their stakes in Indian insurance ventures from the current 26% to 49%. Mr Tuli explains that this will happen - but no one knows exactly when. It was initially mooted that this would take place from January 2007, but is now on the back burner. "It was announced in the finance minister's speech in the 2004 budget and had a great deal of support. However, there is a lot of other stuff going on and I think we will have to wait until after the next general election in 2009," he explains.

He points out support to raise current cap was not universal: "State-owned insurers have around 1.8 million employees, are massive and often inefficient organisations. They would not want to lose further market share and so have lobbied against the move, but I feel it is unstoppable."

Kavita Pandey, a consultant with the broker Aon, who manages their India desk from London, says pressure is growing: "Recently, the US Ambassador to India, David Mulford, urged the finance minister to raise the cap not just up to 49% but allow the foreign investors the controlling stake."

*Positive impact*

Indeed, Mr Tuli says the evidence of the positive impact of overseas insurers is clear to see: "Previously you had a market where there were only agents rather than brokers. We now have at least 20 firms that are overseas brokers. It was feared that many joint ventures would not work out between local companies and overseas insurers, but they generally have. The amount of business going on, combined with the huge middle class, its assets and demand for pensions and insurance makes India hugely attractive."

From practically no choice, Indians can now benefit from a wide choice of providers, advisers and distribution channels. Mr Tuli adds that a further benefit is in the pipeline: "The market is all price-driven because of the tariff system. This meant all products were basically the same. From next year, wordings will be set free, and so there will be far more variation and, in particular, brokers will be able to show their worth."

Ms Pandey says this move will mean a bigger role for brokers, but will also mean that longer-term margins will be thinner. Although, she adds: "We will see increased competition for product innovation, which is the ideal opportunity for the UK underwriters to offer tailor-made products and solutions in niche industries like energy, power, construction, banking, and the financial services industry. Product lines, which are still underdeveloped but have gained increasing importance, are health insurance, weather insurance and natural disaster coverage."

She says: "The total market penetration is still just over 3%, leaving huge untapped potential." Meanwhile, competition is bringing benefits all round and she adds: "State-owned companies have been adapting themselves to competition by streamlining their operations, placing better control on operating expenses, investing in IT and launching new products - particularly packages."

In 2003, Aon became the first broker to open in India, but another broker thriving in there is Howden. Chief executive officer Praveen Vashista joined just three years ago. His early career had been with the nationalised GIC, which he joined in 1983.

It is often said now that there is vast pool of highly qualified labour for the insurance sector and then it was no different - some 400,000 people applied for around 150 places. After subsequently working for Zurich, Mr Vashista decided to join Howden: "As in the UK, we specialise in liability insurance, but we have a much wider base and we are also looking at launching a personal-lines operation. In three years and from a standing start, we now have six offices."

He explains Howden is currently recruiting and has been able to attract a number of new staff with MBAs: "Insurance is seen as a sunshine industry. A lot may prefer the idea of investment banking and consultancy, but we can offer a lot of opportunities and demand for insurance is expected to surge."

Meanwhile, Andy Bragoli, Howden's managing director in the UK, says India is his firm's fastest-growing business: "Deregulation is the catalyst and as soon as it is permitted we would look to go up to 49% ownership. If you are in early, it gives you the advantage of grabbing market share."

*Getting in on the act*

Howden was already placing business on behalf of UK-based Indian companies using the London market, now that it is based locally it continues to use this, as well as insurers in Singapore. "It makes sense for British companies. Corporate governance is good on the whole and legislation has parallels with UK law. There are high standards of education and the enormous middle class creates a ready workforce. Most offices are in parks with excellent facilities, for example with gyms and restaurants. It makes for a good working environment and English is the language of business there," he says.

Loss adjusters are not prepared to be left out either. Anuj Puri has worked in Birmingham and is a founder of Puri Crawford in India, which has three offices. He says insurers can take a slightly tougher stance to paying claims than in the UK. "Things move a bit slower. You need to make sure you have the right documentation, which may be less detailed than in the UK, and prove what has happened," he explains. "Generally though, standards are high - it just takes a bit more time. And regulation is good - if anything, the market is too tightly controlled and many businesses would like to be more entrepreneurial - things are changing though and a different mindset is emerging. You only have to see the amount of business being done here to realise how well insurers are doing: it's a very decent market."

Everyone with an interest in the insurance sector in India mentions the youth and ambition of the workforce and their training is due to be increasingly handled by the Chartered Insurance Institute. There is already the Insurance Institute of India, which provides a range of training and professional qualifications, but the CII believes it can offer complementary study from soft skills to associateship.

Steve Jenkins, business development director for the CII, comments: "This is a new market for us, we opened our first office in the country, in Mumbai, in March. The catalyst was the growth of the offshoring market and we were asked to deliver professional development services largely to those working in call centres." The CII's clients include Aviva and it has also appointed a head of business development for the country in Sainesh Dar.

Mr Jenkins explains many Indians view training as critical: "There is an enormous hunger for self-development. If they join a call centre in a junior role, they will want to know how long it will take to become team leader. They want good technical ability and if they are told a particular course of study will take say 12 months, they will say their aim is to do it in six. Designations matter and they want to prove themselves to their families."

Companies that want a stake in the Indian insurance market need to take careful advice, however. They need to choose the firm they partner carefully - many have opted to work with those in the same sector, but this is not compulsory.

Among those advising on partnerships is Grant Thornton, which can assist with matchmaking. Ipe Jacob, senior partner in financial markets, says: "Distribution is developing fast whether it is brokers, the internet or bank assurance. Customers were not being particularly well served by a nationalised industry - it was overstaffed and unprofitable. British insurers who want to invest are making an error if they sit back and wait and see. The opportunities are there now and the minority stake will grow to 49% and, given time, it will go beyond this."

*After the gold rush*

His colleague Anuj Chande, head of Grant Thornton's Indian Group, comments: "The US, Japan and Germany have probably invested more in India, but those who are in at the start of the gold rush will gain most."

Lloyd's is also planning to increase its presence in India. Although the Chinese non-life market is four times as large as the Indian market, Lloyd's writes almost two-and-a-half times more business in India than in China. It has now set up a liaison office in India, which will be used as a base for improved access to the Indian insurance market, marketing and to educate potential clients about Lloyd's.

It is doing this in collaboration with KPMG in India and Mr Chande comments: "This is a good move as Lloyd's is a tremendous brand but has a high cost base, so it makes sense to focus on marketing locally and placing business from the UK."

There is unanimous agreement that India presents huge scope. Yet no matter how strong the fundamentals, there are no guarantees. There are signs that some call centres are struggling to retain staff and some insurers have pulled out of offshoring to return jobs to the UK. Some who visit say they are disturbed by the starkness of poverty - those in desperate need are on the pavements seconds away from the opulence of luxury hotels and prestige offices - and indeed by the centuries-old but iniquitous caste system.

Yet, business realism prevails and Ms Pandey concludes: "With more than 1.1 billion people, India is the second-largest single market and has the fourth-largest economy in the world. Its growth in the last decade has been incredibly rapid, most notably in computing and related high-tech areas. Yet poverty, malnutrition and environmental issues remain widespread, with more than 70% of the population still living in rural areas. India is a country not only of massive contrasts, but also of massive opportunity."


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## Bushroda

*India Wakes Up to E-waste as Economy Booms*
13/05/2007

NEW DELHI (AFP) - Environmentalists, alarmed by surging demand for consumer gadgets in India, are pushing manufacturers to tackle mounting piles of hazardous electronic waste.

India's 300-million strong middle class is grabbing gadgets as global competition pushes down costs of electronics which a decade ago were beyond the reach of many households.

"We're raising the red flag," said Vinuta Gopal, spokeswoman of the Indian chapter of environmental group Greenpeace International.

"India is producing semi-conductors, manufacturing components and the computer sector is seeing a meteoric rise," she said.

"Most of these products are made with hazardous chemicals... if the industry doesn't take responsibility and the government doesn't fulfil its leadership role... then e-waste will blow up on our faces," she said.

India, which annually spews 146,000 tonnes of e-waste, has no specific legislation but recently widened an eight-year-old anti-pollution law to handle the problem.

"E-waste is regulated under these rules," junior environment minister N.M. Meena told parliament earlier this month but added that an exercise had also begun to monitor electronic garbage.

"The Central Pollution Control Board has undertaken a study for preparation of a 'guideline-document' for the sound recycling of e-waste," he said.

But environmentalists called for stronger measures.

"Mere guidelines are not enough to tackle e-waste and what we need are clear-cut policies and rules on re-cycling, waste management infrastructure and investment," said Rajiv Agarwal, director of the Toxics Link environmental forum.

"The government is shying away from taking firm action because it does not want a framework of regulations for the IT industry," Agarwal told AFP.

Global consultancy firm Frost and Sullivan estimates India's electronics industry will grow by 30 percent annually to 2.5 billion dollars in 2010.

"The industry in India is buzzing with activity," said Sathyamurthy Sabarinath, a technology analyst at Frost and Sullivan.

The growth is propelled by burgeoning demand for telecom equipment as well as an astronomical demand for computers in India where 25 million people join the middle class every year.

The computer industry is worth seven billion dollars with 90 percent of the production meant for the domestic market, according to official estimates.

Frost and Sullivan warned the industry would need to work out methods to handle e-waste.

India's Manufacturers' Association for Information Technology (MAIT) said it was launching a project involving India, the European Union and Switzerland to "help, adapt and facilitate waste processing units" that would take up to five years to complete.

However, the states of Maharashtra and Karnataka, hub of India's IT industry, have already set up independent processing units to recycle hazardous wastes, said MAIT president Winnie Mehta. 

"In Europe it was a consumer-driven movement but the challenge here is that guidelines are required to ensure that what goes inside is not hazardous as well as rules to determine the end of lifespans of products," Mehta said. 

India's largest cities -- Bangalore, Chennai, Kolkata and Delhi -- alone generate 29,000 tonnes of e-waste annually, a chunk of which finds its way to smaller towns where it is cannibalised for anything of value, pollution control officials said. 

"This secondary market feeds a hazardous recycling industry which is unregulated and impossible to tackle at this stage," said a senior official at the Central Pollution Control Board, the national pollution watchdog.


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## Bushroda

*Indian Sun could set tone for future of newspapers*

*With both News Corp and Associated eyeing the vibrant sub-continent, James Robinson looks at eastern promise lightening the gloom at home *

Sunday May 13, 2007
The Observer 


Indians who already watch Rupert Murdoch's Star TV could soon be consuming the Sun. The News Corp chairman has plans to launch his iconic tabloid in the world's second-most populous country. His joint venture with the aptly entitled Indian media group Sun TV shows he still knows how to launch papers as well as buy them.
Murdoch is not the first Western newspaper owner to spot India's potential. That plaudit goes to Independent proprietor Sir Tony O'Reilly, who has a long-established joint venture with JPL, publisher of Hindi paper Dainik Jagran

And earlier this year, Daily Mail owner Associated Newspapers announced an alliance with another newspaper combine, Delhi-based India Today group.
Like other Western companies who want to enter one of the world's largest emerging markets, English papers are attracted by a vibrant economy that is expanding at close to 10 per cent a year.

In that sense, newspaper groups are no different from other companies whose plans to tap into markets abroad have been given greater urgency by the realisation that their home market may be reaching maturity - or be, in the faintly sinister parlance of the City, 'ex-growth'. But some special factors make India particularly attractive for publishers.

English remains an important means of communication in a country where 24 different languages are each spoken by at least a million people each. There are already dozens of English-language titles, including the Times of India, the county's most respected paper. With a circulation of around 1.5 million, it is one of the largest 'quality' papers in the English-speaking world.

Just as importantly, a more educated population and rapidly improving literacy levels mean the market is growing rapidly. Magazine groups Conde Nast and Dennis Publishing, owner of Maxim, have also established footholds in India. Conde Nast's UK managing director is said to harbour huge hopes for the Indian Vogue and has spent a lot of time in the country over the past 12 months.

The World Association of Newspapers says the number of papers sold daily in India rose by 33 per cent between 2001 and 2005, while in China circulation jumped by 28 per cent between 2000 and 2004.

Deccan, India's second-biggest newspaper publisher by market value, said this month that according to financial news service Bloomberg, advertising rates in India will rise by 30 per cent in May. Earnings in the last three months of 2006 rose by 52 per cent. Profits at both New Delhi-based HT Media, the biggest publisher, and Kanpur-based Jagran, the largest producer of regional-language newspapers, more than doubled.

The seemingly inexorable decline of the newspaper in Europe and, more dramatically, in North America sometimes makes the industry sound doomed, regardless of its heavy online presence.

Overall, however, global newspaper sales are on the increase, a fact which is all too often ignored by gloomy commentators in the West, who need only look eastwards when optimism is in short supply at home.

A well-established middle class with massive disposable income makes India particularly fertile ground for a newspaper like the Daily Mail, which is adept at identifying readers' interests. Although its plans are a closely guarded secret, all the indications are that the mid-market tabloid will closely mirror the look, feel and content of its British parent, even if it does not go by the same name.

Associated has sent Terry Shuttleworth, a long-serving former Daily Mail night editor, to the country to work on the project, described as a mid-market English-language tabloid.

He will be joined by Eric Bailey, who was deputy editor at the Mail on Sunday. Shuttleworth took early retirement a few years ago after honing his skills on the production side at the company's flagship title. He came out of retirement to work part time for his former employer in Dublin last year, working three days a week as consultant editor on the Irish Daily Mail before its launch.

'Now Associated have given him two or three months in India at ever higher rates,' a former colleague jokes.

Less is known about Murdoch's plans for the Indian Sun. It may encounter more competition: the mid-market concept is less embedded in India, but the 'red-top' tabloid has been much copied.

Despite India's appeal, establishing a foothold in the country may have remained little more than an aspiration until recently, when the government decided to relax strict laws on foreign ownership of media assets. Overseas firms can now own 26 per cent of an Indian media company, and will be hoping those rules are eased still further. O'Reilly has proved particularly skilful at schmoozing politicians in Australia and South Africa, taking minority positions in home-grown groups and slowly exerting greater control.

He has a head start on Murdoch, but few would bet against the owner of the British Sun creating an Indian equivalent that could one day eclipse its progenitor.


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## Bushroda

*60,000 Indian IT professionals in US return home: Reports* 

New York, May 14: India's fast growing economy and leaping information technology sector is attracting home more and more Indian from the Silicon Valley and The Indus Entrepreneur Group (TIE) estimates that around 60,000 may have returned in recent years, a media report said today. 

No region of the United States has been more affected by this trend than Silicon Valley. TIE had reported in 2003 that between 15,000 and 20,000 Indians have returned and charter member of the organization Vish Mishra told San Jose Mercury News that the trend had continued and about 40,000 more had gone back in the last four years. 

Mishra, who is a senior venture partner with Clearstone Ventures, said the flow of investment capital to India also has expanded, much of IT from Silicon Valley VC firms. 

Clearstone Venture partners now has an office in Mumbai, as do many other firms that either are based in or originated in Silicon Valley. 

During the 12-month period that ended in August 2006, Mishra told the paper, VC firms invested 2 billion dollars in early and late-stage companies. The report quotes a study released earlier this year by Anna-lee Saxenian of the University of California-Berkeley and by Duke University, as saying Indians founded 15 per cent of all Silicon Valley start-ups. 

The study also found that 53 per cent of the science and engineering workforce in the valley is foreign-born, and that one-quarter of immigrant-founded engineering and scientific companies set up in the United States during the past decade were by Indians. 

These companies rang up 52 billion dollars in sales and created 450,000 jobs. No wonder, notes the paper, some business and policy leaders are sounding alarm bells about American competitiveness in general and Silicon Valley's future as a technology leader in particular. 

The Mercury News says there isn't a single major information-technology company in the United States that hasn't set up operations in India. 

It companies are attracted by low-cost, highly skilled workforce; 3.5 million white-collar us jobs, along with 151 billion dollars in wages, are expected to be outsourced by 2015, with India the top outsourcing destination, the paper says quoting a report by Forrester Research. 

But these companies also see a market of potentially EPIC proportions, the paper says. Half of India's 1.2 billion people are younger than 25. That's 600 million people coming into their peak consuming years in an economy fueled primarily by exploding retail growth. 

As Amar Babu of Intel India, where 15 per cent of the workforce is made up of Indians who returned from the United States, explained, "Intel views India as a critical research and development site. At the same time, India is a consumption market for it. A lot of future growth will come from these emerging markets".


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## Bushroda

*Oil drives core growth to 8.6%*
TIMES NEWS NETWORK
[ SATURDAY, MAY 12, 2007 02:46:58 AM] 

NEW DELHI: A turnaround in crude oil output and higher production by refineries pushed the growth of six infrastructure industries to 8.6% in 2006-07 against 6.2% in the previous fiscal. The six core infrastructure industries, comprising crude petroleum, petroleum refinery products, coal, electricity, cement and finished steel, have a combined weight of 26.7% in the index of industrial production (IIP). 

According to provisional figures released on Friday, crude production, which had declined 5.3% in 2005-06, increased by 5.6% in FY07. Similarly, the output of refineries grew 12.6% in FY07 compared to 2.4% in 2005-06. While crude production has a weight of 4.17% in IIP, petroleum refinery products have a weight of 2%. 

In March â07, the core sector grew 10%, against 7.1% in March â06. The acceleration in growth during the last month of 2006-07 was due to better performance by the steel sector, where production increased 15%. Besides, electricity grew at 8% and refinery throughput at 13.4%. 

Growth in cement production, however, fell in March 2007 to 5.5% from 17% in the same period last year.During 2006-07, growth in cement production slowed to 9.1% from 12.4% in FY06. Though coal production was up 10% in March, the overall increase in the entire financial year was 5.9% against 6.6% in 2005-06. 

Electricity sector grew 7.3% in 2006-07, against 5.1% in 2005-06. Import of power from Bhutan also contributed to the growth. Steel production grew at a marginally slower rate of 10.9% in FY07 against 11.2% in 2005-06.


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## Bushroda

*India our next global power*
ANTHONY KEANE
May 14, 2007 02:15am

*BRACE yourself China. Your neighbour India is positioning itself to become a major centre of global investment.*

Adelaide financial planner Phil Eley has just returned from a study trip to India and says the country is becoming "the world's rent-a-brain supermarket", with 25 per cent of global research and development design money being spent there. 

"It is emerging as a major economic power," said Mr Eley, managing director of Plan 4 Financial Services. 

"Unlike all other western economies, they have got 1.3 billion people with 65 per cent aged under 35 and 50 per cent aged under 25. It's a democracy and is English speaking. 

"They're ramping up their education and you have this growing mass of consumers who are all becoming their next middle and upper class. 

"Housing ownership is low and the government provides a tax deduction for interest and principal." 

Mr Eley travelled with financial planners, analysts and fund managers on the first of four trips he plans to take to the so-called BRIC countries - Brazil, Russia, India and China. 

Mountains of investment funds are flowing into these emerging nations, which are experiencing strong but volatile growth. 

"I wanted to get a better understanding about the markets where that money's going into, and also be better equipped to evaluate offers if they come up," Mr Eley said. 

Some of the statistics he discovered are startling: 

BY 2050 India is forecast to have a 15 per cent share of the world economy. 

MOBILE phone customers in India are growing by six million each month, assisted by 1c telephone calls. 

INDIAN companies are emerging as the largest steel and aluminium producers in the world. 

BIG opportunities lie in the country's listed real estate sector, which currently has a market capitalisation below $12 million. 

India's growth is illustrated by its reduced need for foreign aid. "From 1947 to 1991 India was the largest receiver of aid. Today it is a net provider of aid," Mr Eley said. 

"India has had an average growth rate of 6 per cent for the last 26 years with only one negative period and under seven governments - so it is a robust economy."


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## Bushroda

*India fast emerging as a major power: IT expert * 
The Peninsula - 14/05/2007 
(MENAFN - The Peninsula) DOHA

The claims that India is fast emerging as a major power in the Asian continent are not exaggerated; they are based on realistic economic indicators, according to Dr Vijay P Bhatkar, a renowned IT expert from the country. 

Bhatkar is best known as the architect of the Param series of Supercomputers and for his contributions to bringing information and communication technology (ICT) to the masses through his Education to Home (ETH) initiative. 

He was in Doha at the invitation of Samanvayam, an Indian socio-cultural organisation. Yesterday he delivered a lecture at a reception organised in his honour by the Institute of Engineers (India) Qatar Chapter, at the Birla Public School. 

Talking to The Peninsula on the sidelines of the function, Bhatkar said, "India will continue its growth despite the myriad problems it has been facing. Poverty, illiteracy, corruption and poor infrastructural facilities- such issues will remain but the one trillion dollar economy of the country is going to scale further heights in the coming years." 

"Even I was surprised by the way the IT industry has been growing in the country," he added. 

Asked how ICT had helped improve the lives of the common people in the country, Bhatkar said, "That is what I am trying to do through the ETH initiative- bringing education to millions of homes in the country." 

The IT and telecommunication sector have so far generated 2.5 million jobs in India and this is expected to grow in the coming years, he said. 

The ETH initiative includes reducing the cost of computers, producing multi-language computer programmes and spreading education and literacy using ICT, said Bhatkar. 

Electronic governance and fighting corruption and red-tapism are some other areas where ICT can prove specially beneficial to a large country like India. 

"India is the only country in the world which was able to conduct elections using electronic means. This gives me hope about the future," Bhatkar said. 

He said "brain drain" is no more an issue in India and it has been replaced by "brain gain" as thousands of Indian professionals are coming back to the country lured by the brightening job prospects. Youngsters are now going out of the country mainly for higher education.


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## Bushroda

*GM makes its big push into car-hungry India*
May 13, 2007
BY JEWEL GOPWANI
FREE PRESS BUSINESS WRITER

MUMBAI, India -- A tiny car has never meant so much to General Motors Corp.

Hitting dealerships in India this month is the Chevrolet Spark, a car that's smaller than the Chevy Aveo and important enough to draw GM Chief Executive Officer Rick Wagoner to the other side of the world for its launch last month.

The Spark is the reason GM expects to nearly double its sales in India this year.

It's the company's biggest stride in a race to win over drivers in the world's second-fastest growing economy, where new jobs and low interest rates have created generations of new car buyers.

GM and seven other automakers plan to invest nearly $4 billion in India. The investments would double the number of cars produced in the country to nearly 3 million in the next decade.

The country's passenger vehicle sales grew 27% to 1.4 million vehicles last year. Those sales are expected to grow to 2 million by 2010 and to 3 million by 2015.

India's car market is critical to GM as it continues to lose money in North America and duels with Toyota Motor Corp. to be the world's largest automaker.

With the Spark, GM meets the competition on size and price. The sticker price on a Spark starts at 309,000 rupees, or about $7,500. GM expects to sell as many as 2,500 a month and drive its market share from less than 2% last year to 10% by 2010.

"GM has made growth in India a priority," Wagoner said.

*GM's investment*

This month, GM makes its biggest effort to make up for lost time in India.

After 10 years of selling sedans and sport-utility vehicles there, it wasn't until last year that GM offered a vehicle that even approaches the size of what most Indian car buyers prefer.

GM started in March 2006 with the Chevy Aveo sedan, which is small by American standards but considered midsize in India. In December it launched the hatchback version. This month, GM delivers the Spark to its dealers.

"They're at least getting their product strategy right," said Mohit Arora, director of J.D. Power Asia Pacific.

GM expected to launch the Spark two years ago using an old Daewoo plant near Delhi after buying the bankrupt South Korean automaker's assets in 2002. But GM hit roadblocks on negotiations involving labor, customs and tax issues.

"It was not an intentional delay," said Rajeev Chaba, managing director of GM India. "We moved very fast once we were clear that we would not get the old plant."

GM's next move is to build a $300-million plant to make 140,000 vehicles a year by the end of 2008, bringing its capacity to 225,000 vehicles a year. GM plans to add 24 dealers for a total of 115 in India and 28 more service centers, for 122 in the country.

The Spark puts GM ahead of Volkswagen AG, Toyota and Honda Motor Co., all of which plan small cars for India. The model also heats up GM's rivalry with Ford Motor Co. in India. Last year, Ford doubled its sales to 42,060 vehicles in India. GM plans to do the same this year as it expects to increase sales from 35,823 last year to 66,000.

Now GM is gaining on India's market leaders, which have their own plans for growth.

Maruti Suzuki, controlled by Suzuki Motor Corp., has half of India's car market and three of the country's top five vehicles. Now building 800,000 cars a year, Maruti Suzuki is ramping up to build 1 million a year in two years.

Tata Motors, the country's third-largest automaker, is preparing to launch what promises to be the country's cheapest car. The $2,400 vehicle is targeted at scooter riders who want to move up to four wheels.

That's a solid strategy, said Ashvin Chotai, the London-based director of Asian automotive research at Global Insight.

A quarter of new car buyers, accounting for 300,000 car purchases, are upgrading from scooters, J.D. Power said. Last year, Indians bought 7.8 million two-wheelers, more than five times the number of cars sold.

"There's a huge potential there," Chotai said.

*What customers want*

When Jagjeet Singh Makkad decided to buy a new car, the 44-year-old husband and father of two picked a Hyundai Santro, a tiny four-seater that is easy to park.

But what put the Santro over the top for Makkad, who calls himself a sardarji -- a Sikh man who wears a turban -- was the car's raised roof, which is at least three inches taller than most of India's minicars.

Pointing to his maroon turban, Makkad said: "For a sardarji, it's very good height-wise."

When Makkad was looking for a small, yet tall, vehicle four years ago, GM didn't offer anything close.

But with the Spark, the automaker can tap into the buying power of India's growing middle class, which accounts for about 50 million people, or 5% of India's population, and is expected to grow to 583 million or 41% of the population by 2025, McKinsey & Co. reports.

*Brand and reputation*

GM is still an unknown to India's younger generations.

The company suffers, on a smaller scale, from brand recognition challenges similar to those it has in the United States. In India it offers Opel and Chevy vehicles.

"You go worldwide, Honda is Honda," said Mayank Merchant, executive director of the National Garage GM dealership in central Mumbai. "Sometimes people get confused. What is GM? What is Opel? What is Chevrolet?"

It doesn't help that rival Toyota, which is hardly even a player in the Indian market, enjoys a sterling reputation: Its plain-vanilla Camry is considered on par with the Mercedes-Benz E-class.

But GM is focusing its attention in India on Chevy, a once all-American brand that has gone global, scoring huge gains in China, Eastern Europe and other developing markets.

"Our challenge right now is that Chevy becomes the most aspiring brand," Chaba said. "We are moving in the right direction."

GM's global presence has helped it make inroads with older buyers.

Manorama Limdi chose a Chevy as her anniversary gift in December because her husband, Kakubhai, has high regard for the brand.

"My husband has used Chevrolet cars way back in the 1960s when he was in the U.S.A.," said Limdi, 68, whose husband practiced medicine on Staten Island, N.Y., almost 50 years ago. "It's a renowned make."


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## Bushroda

*Hollywood looking to India for post-production work* 

London, May 12: Impressed with the low-budget and good production quality Bollywood films, Hollywood is eyeing India to outsource its post-production and shooting work. 

"There is obviously a lot of talent in India...Hollywood is looking back to India to commission a lot of the post- production work and shooting work," Kishore Ltive of Eros International said. 

"If you look at the quality of Bollywood movies, we can produce those movies at maybe 10 or 20% of the cost that Hollywood can do. 

"If Hollywood is spending 100 million dollaRs a movie, we make the same kind of movie for 10 to 20 million dollaRs budget in India," Lulla, who recently won the BDO Stoy Hayward Business of the Year award at the Eastern Eye Asian Business Awards function, told the `The Daily Telegraph.` 

He said that Hindi films were expanding their global reach due to the evolving taste of audience. 

"Consumer taste is evolving. So, countries like Indonesia, Malaysia, Thailand, Russia and Germany have started consuming Indian movies. 

"This is like fresh air for them when they see a totally different kind of movie with a lot of family values, music and Indian culture," Lulla noted. 

He said the booming Indian economy further contributed to the film industry`s growth. 

"There are 300 million people in the middle class in India at the moment and they have OME which they are spending in multiplexes," he said. 

Lulla said that with an increase in the number of theateRs in India, more money would be earned from a movie which would be channelled for production. 

"There are only 13,000 screens in India at the moment. This will go up to 50,000 in the next five to ten yeaRs. Once that happens you would see a film grossing may be 50 million to 100 million dollaRs. And once that happens, you will see a lot of money going back into production, Lulla said.


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## Bushroda

*No slowdown yet: Inflation holds the key*
TIMES NEWS NETWORK[ MONDAY, MAY 14, 2007 12:37:47 AM] 

The March â07 numbers for industrial growth, at 13%, indicate that there has been no general slowdown in industrial growth because of monetary tightening. That said, the effect of higher interest rates are felt with a lag and the last round of rate hikes were in late March. 

Industrial data for the first quarter of the current fiscal, 2007-08, may thus provide a better indicator of the impact of higher interest rates. An examination of the disaggregated data for March indicates that the economy may be shifting to a more investment-led growth cycle. 

While consumer goods grew 14%, consumer durables rose by just 2.7%. It was primarily FMCG items (consumer non-durables) which propelled the sector forward by 18.5%. The slowdown in consumer durables chimes with anecdotal evidence that the rate of growth of credit disbursement for the retail sector (financing for housing, cars, education, and consumer durables) is slowing down. 

Data on credit growth for December â06, the latest available, show a slowdown in year to year growth rates compared to June and October. The exceptions are industry and agriculture, an outcome very much in keeping with the RBI and the governmentâs policy objectives. 

Basic and intermediate capital goods continue to grow strongly, according to the March industry data. There is some evidence that credit card defaults are rising. Industry sources say that as many as 13% of accounts may be in trouble (more than 30 days overdue) compared to 7% a year ago. Interest rates for personal loans to the sub-prime category have spiked sharply, in some cases to more than 20%. 

There is no indication yet that capital spending by Indian companies is slowing. This is partly because India Inc has had access to external markets by way of ECB and FCCBs and also because of confidence that the size of the Indian market will grow exponentially. 

In the near term, another bit of data released on Friday showed that inflation had dropped to 5.66%. Most analysts feel that WPI could drift close to 5% by June because of the high base effect. The behaviour of inflation would, in turn, determine whether the RBIâs monetary tightening is over.


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## Bushroda

*India retail frenzy fuels supply chains*
By Joseph Tharakan 
Mumbai 

With the boom in India's retail sector, foreign behemoths are moving in while domestic players are ramping up their operations. The investment frenzy is being led by foreign giants such as Wal Mart, which recently took its first step into the sub-continent through a joint venture with Bharti. Meanwhile, France's Carrefour and the UK's Tesco, along with other global players, are waiting in the wings waiting for an opportunity.

Domestic industrial giants are not far behind. Reliance Industries has on its drawing board a US$6 billion plan to create 100 million sq ft of retail space; the Aditya Birla Group is planning to invest $3.6 billion in its foray into the retail market; and industrial giant Tatas has also drawn up plans to enter the retail race. 

Existing domestic retail players are pouring more money into their expansion projects. The Future group, previous called Pantaloon and owner of the Big Bazaar retail chain (below), is planning to create a retail space of 30 million sq ft by 2009-10 while Shoppers' Stop will add another six million sq ft of retail space to its existing operations.

Logistics plays a major role in the operations of retail chains and these players are also entering the arena in a big away. Many foreign players have already opened shop in India, while others are keenly tracking developments. Some retailers have their own logistics subsidiaries, but most of them use third-party service providers (3PLs). 

"The Indian logistics sector is at the beginning of a strong growth path. Besides retail, there are also other growth drivers such as manufacturing, FMCG (fast moving consumer goods) and auto components,'' according to a research analyst at Mumbai-based Edelweiss.

Over the past few months, a dozen international players in the logistics and warehousing businesses have initiated studies towards establishing their presence in India, said industry officials. For instance, foreign companies such as Aiko, Expeditors and Bax Global as well as parent Schenker are already in the process of setting up warehousing and distribution networks in India while Prologis and PWC Logistics are considering expanding operations.

"We estimate the Indian logistics market is worth around $45 billion and by 2015 we expect it to reach almost $122 billlion at a compounded annual growth rate (CAGR) of over 11 percent, which is higher than the rate of growth of the Indian economy," said John Allan, chief executive officer of DHL Exel Supply Chain & Global Forwarding. 

In the next decade, there will be a substantial growth in the manufacturing segment, which will trickle down as an opportunity for logistics companies, he added. 

"There are two reasons why we see as a major opportunity here,'' said Allan. "First, India serves as a good base for manufacturing for exports such as automobile components and pharmaceuticals. Second, the size of the domestic market is itself getting larger." 

International majors such as DHL, UPS and FedEx are competing strongly for the small and medium enterprises (SMEs) sector. Almost 70 percent of DHL's customers are SMEs while UPS claims that almost 75 percent of its customers are SMEs

Many reckon that India's logistics spending, at 13 percent of GDP, is among the highest in the world due to a multi-layered tax system, infrastructure bottlenecks and other inefficiencies. "Compared to the developed markets, logistics costs here tend to be higher or almost twice as high in underdeveloped markets," said Allan. 

But that does not perturb domestic players. Edelweiss estimates leading domestic logistics players, such as Concor, Gateway Distriparks (GDL), Allcargo, Sical Logistics, Transport Corporation of India (TCI) and Gati, will spend around $809 million over the next three years on expansion. These companies together had invested about $119 million in the last fiscal year.

Both Concor and Sical have announced plans to set up cold chains while GDL and Sical have forayed into container train operations and TCI and Gati are investing heavily in warehousing. Other trucking and courier companies are also leveraging their networks to offer express and supply chain distribution solutions, apart from offering 3PL expertise.

Currently the services on offer range from transportation to warehousing and inventory management, but industry officials said in the near future, the companies will have to expand their products basket to include new value-added services, such as packaging, labelling and reverse logistics.


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## Bushroda

*Screwvala's search for a new twist brings Bollywood to the Square Mile*
*Mumbai media mogul is changing the world's view of the Indian film industry *

Randeep Ramesh in Mumbai
Monday May 14, 2007
The Guardian 


In the film business, name recognition is everything. Luckily for Ronnie Screwvala nobody is going to forget his.

"It is a great ice breaker that always gets the meeting off to a bright start," the Mumbai media mogul grins before explaining that his surname probably meant his forefathers, from the Parsi minority, were involved in carpentry. "I don't think it would be the other interpretation."

In the past two years Screwvala has become the most sought after movie producer in Indian cinema with his UTV studio remoulding Bollywood in Hollywood's image.

He co-produced, with Rupert Murdoch's Fox studios, the summer hit the Namesake, set in Calcutta and Boston. Last month saw his biggest coup when UTV announced it was teaming up with Fox to produce the next film by M Night Shyamalan, the director behind Signs and the Sixth Sense, for Â£29m.

With a dozen films ready to realise next year, Screwvala has big plans to expand. The Mumbai-listed group aims to raise Â£30m-40m by listing all its motion picture production activities on London's Aim market next month.

Screwvala says UTV is an Indian business with an "unique international story" that wants to be benchmarked against western firms. He also needs "international currency" for deals.

"Our next stage of growth could come from mergers and acquisitions and for that we need an international currency to be looked at seriously when we went out for a deal. Are we looking at western companies to buy? Yes."

A former cable salesman, Screwvala has quietly built up a media empire in India on a triple-pronged strategy as a broadcaster, film-maker and new media company. Last year revenues were Â£25m. Screwvala says they will be five times as large by 2009.

UTV, which began life as a production company, made its name by creating a teenagers' channel, Humgama, in India from scratch and selling it to Disney for Â£15m last year. Disney also paid Â£7.5m for a 15% stake in UTV. "We wanted a long-term strategic partnership with Disney."

Bollywood is Screwvala's first love. The country churns out 1,000 movies a year but is only a Â£1bn business. Hollywood by contrast produces half the number of films but makes nine times more money.

To make money UTV opted to professionalise an industry still largely in the hands of movie dynasties. It draws up budgets, sticks to shooting timetables, lays out a marketing strategy and makes distribution plans.

Gone too are the three hours of song and dance interspersed with tearful family reconciliations. Screwvala is producing shorter films with tauter scripts. The movies are more realistic and a little less escapist.

*Oscar nomination*

The first big success was Rang de Basanti, a film about disaffected youth that was nominated for an Oscar. His latest movie Metro, which premiered in London last week, features three lovelorn couples and most notably sees Shilpa Shetty as a bored housewife tempted by infidelity.

Next week he travels to the Cannes festival with another film, Goal, about an amateur football team in west London.

"It is a universal story about the underdog winning against the big boys. We are breaking the mould in terms of genre and storytelling. Indian movies are traditionally known for high entertainment and long duration. But young people in Indian cities are very discerning these days and they will not spend three hours watching a movie."

All that is happening in the country, says Screwvala, is that much like the western world urban India is becoming time-poor and cash-rich. "It is the same in Hollywood. If King Kong did not work as well as it should have it was because it was a three-hour movie."

When Screwvala talks about Hollywood these days people listen. Scripts for a UTV movie about an British stuntwomen working in Burma at the end of the the second world war lie with Keira Knightley and Uma Thurman.

He also backed the latest film by the US comedian Chris Rock, a rom-com called I Think I Love My Wife. Requiring only Â£6m to make, it was a "compelling budget for a movie with someone like Chris Rock. And it has made back the money."

That appears to be just the beginning. UTV's film division will make two Will Smith movies - one is animated and the other is a more trademark action flick.

The US actor first came to India last year to promote an entertainment channel for Sony but ended up chatting with Screwvala. The result was a Â£15m co-production deal with Sony and Smith's Overbrook Entertainment.

The cartoon film has generated a buzz in the industry because it potentially marries Hollywood scriptwriters with Smith's appeal and low-cost Indian animation. Analysts point out that Hoodwinked, a low-cost cartoon feature made in Spain for only Â£6m, grossed Â£50m in 2005.

"Animation is something we are good at," says Screwvala. "A Shrek may cost $100m to make [in Hollywood], but if you get it right the outlay may be just $30m or $25m."

Video games are also a key part of Screwvala's plans. Last year he spent Â£16m buying controlling interests in the mobile phone game designer Indiagames and the UK-based console gaming company Ignition. What caught Screwvala's eye in the British company was a "high-end" game called War Devil that he thought could also become a movie a la Lara Croft.

Although in conversation the 50-year-old is languid and smooth, it is clear he is a man in a hurry. From July he begins to roll out eight new television channels, focusing on horror, world cinema and entertainment and hoping to attract to the country's most elusive and populous demographic: 16-35-year-olds.

"[India] is a growing market and an opportunity. Sometimes the tail wags the dog but really the content creates the demand."


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## Neo

May 14, 2007 
*Booming trade, air traffic between India and the USA*  

By Anand Kumar

WHEN the Airbus A380, dubbed the âgreen giant,â flew into Delhi â and later Mumbai â last week, it attracted thousands of curious onlookers in both the cities, most of who were struck by its sheer size. The A380, the worldâs biggest aircraft, arrived nearly 40 years after the Jumbo jet â the venerable Boeing 747 â landed in India.

While the arrival of the Airbus brought work at both the airports to a standstill (with passengers, airport employees and airline staff rushing to catch a glimpse of it) the new aircraft also excited the aviation industry in the country. The A380 comes at a time when traffic between India and the USA is booming, and airlines are planning to launch both non-stop and one-stop services between the two countries.

The India-US sector is today one of the most lucrative and also the busiest. About 1.5 million passengers travel on this sector every year, and the market is growing by a healthy 10 per cent. Of course, other routes, including India-UK and India-Gulf are also equally buoyant, but the one to the US is among the most profitable.

However, things are likely to shape up dramatically over the next few weeks on this route. While several airlines â including the nationâs flag carrier, Air India â are planning to launch non-stop flights between the two countries, the sector is also being opened up for private Indian airlines.

Jet Airways, the countryâs leading domestic carrier, plans to launch one-stop services to New York via Brussels from July. The airline is acquiring Boeing B777 aircraft for its first flights across the Atlantic. The airline also plans flights to San Francisco via Shanghai later in the year.

Another private carrier, Kingfisher Airlines, is impatiently waiting to get government approval for the launch of its international operations. Vijay Mallya, the liquor baron, who launched the airline about two years ago, says if the government does not speed up the clearance, he will start services from America to India, using his US subsidiary Kingfisher International.

When the Indian government threw open international routes to private airlines, it stipulated a clause insisting that a domestic carrier should have flown for five years before applying for international flying rights. Only Jet Airways and Air Sahara â which is being acquired by Jet â qualify for international routes at present.

Mallya, who is also a member of the upper house of the Indian Parliament, is not willing to wait for another three years, by which time Jet Airways would have established its mark in the sector.

The visit of the A380 to India was sponsored by Mallya to mark his airlineâs second anniversary. Kingfisher Airlines is also the only Indian airline to have ordered the giant aircraft. It has placed an order for five aircraft, and has an option for five more.

But Airbus officials are hopeful of selling the giant aircraft to many more airlines in the country, including domestic and low-cost carriers. The European aircraft maker hopes to sell over 50 A380s â including a few freighters â over the next 20 years in India. Each A380 costs about $300 million.

According to John Leahy, chief operating officer (customers), Airbus, the company expects 20 orders from India over the next one year for the new aircraft. It has so far received orders for over 150 aircraft from different international airlines, and the first deliveries are likely to be made later this year to Singapore Airlines, followed later by Emirates and Qantas.

Kingfisher will be getting the deliveries only in 2011, in time for the launch of its non-stop flights to the US â Mumbai-New York and Bangalore-San Francisco. Airbus officials last week pooh-poohed speculation that most Indian airports were unable to handle the huge aircraft, which can seat 850 passengers in an all-economy configuration, and over 500 in a three-class configuration. Passengers in the upper classes can relax in lounges and bars in the upper deck of the aircraft.

Officials from the aircraft-maker were confident that even low-cost carriers in India would show interest in it, as the plane can carry up to 850 passengers, and can even operate on short-haul routes. Domestic airlines could be interested in deploying the super-jumbo on busy routes like Mumbai-Delhi, Mumbai-Kolkata, Delhi-Chennai/Bangalore, or Delhi-Bangalore.

Leahy notes that the A380 can land and take-off from 70 airports around the world. Kiran Rao, executive vice-president, points out that all major Indian airports are capable of handling the aircraft. But thereâs likely to be a bitter dog-fight over the Indian skies between the two major international plane-makers, Airbus and its American rival, Boeing, which is pushing for its Boeing 777 and 787.

Rao adds that the global aviation industry is growing by about 20 per cent annually â in India, the figures are much higher, around 50 per cent â and there is a growing need for an aircraft the size of an A380. Besides, airlines operating flights between India and the US, other European and Gulf carriers could also press the A380 for services to India, say Airbus executives.

Both the Europe (especially the UK) and Gulf are high-volume routes with thousands of passengers travelling daily between cities like Mumbai/Delhi and London, Frankfurt and Dubai. The A380 is being positioned to serve such sectors as well.

Carriers from America are already operating non-stop flights between the two countries. Continental and American Airlines operate non-stop flights between New Delhi and New York and Chicago respectively, while Delta flies non-stop between Mumbai and New York.

State-owned Air India, which is in the process of merging with Indian (formerly Indian Airlines), the government-owned domestic giant, is also launching non-stop services to the USA (New York and Chicago) from June. The airline currently operates about 24 weekly flights to the US, which will expand dramatically in the coming weeks, as it starts getting delivery of new Boeing aircraft.

Continental, the worldâs fifth largest airline, is also launching non-stop flights between Mumbai and New Jersey.The airline announced that it was advancing the launch date by a month to October 2, following positive market response to the proposed flights. âWe have been delighted with the response to our original announcement from customers in both India and the US, and we are confident the service will be a great success,â remarks Jim Summerford, the airlineâs vice-president for Europe, the Middle East and India.

The India-US aviation sector took off in a big way following the signing of an Open Skies agreement between the two countries in 2005. According to Indiaâs External Affairs Minister Pranab Mukherjee, the open skies treaty is set to have effect in areas much beyond the aviation sector. âIt is not just impacting on figures of aircraft procurements, but is also reflected in tourism figures.â

There has also been a sharp upsurge in Indo-US trade ties. The US is today Indiaâs leading foreign investor and its largest trade partner. India is the fastest growing export market for the US and bilateral trade has grown by over five times over the last 16 years â from a mere $5.6 billion in 1990 to $31.92 billion in 2006.

The balance of trade is in Indiaâs favour, with exports to the US growing by 16 per cent last year to $22 billion. American exports to India soared by 26 per cent to $10 billion. Foreign direct investments from the US amounts to over $5.5 billion, accounting for 13 per cent of total FDI since 1991.

Not surprising then that air traffic between the two countries has also been growing sharply in recent months. Airlines from both countries â and the two major aircraft makers â are now positioning themselves to cater to this growing market.

http://www.dawn.com/2007/05/14/ebr9.htm


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## Bushroda

*UK 'chikus' head for India to build new life*
15 May, 2007 l 0224 hrs ISTl
RASHMEE ROSHAN LALL/TIMES NEWS NETWORK

LONDON: First, there were the âcoconutsââbrown on the outside and white on the insideâthat almost-mocking metaphor of choice for second-generation Indians in the West. Now, there are the âchikusââbrown on the outside, a lighter brown withinâdeterminedly reversing the immigration flow to make their homes, and hopefully their fortunes, in the India their parents left half-a-century ago. 

Pravin Mistry and his young wife Neelima are 'chikus', the transition generation of Western-raised Indians heading 'home'. Born and bred in Britain, the Mistrys are proud possessors of brand new blue-and-gold 'Overseas Citizen of India' (OCI) passports that herald their dual nationality. The two young Britons are waiting with feverish impatience to find the right jobs to embark on their passage to India. 

But they are not alone. Their friends, similarly British-born-and-bred Vandana and Dipak Poria, are already 'home', comfortably settled in Pune, complete with a good school for their son and their own Knowledge Process Outsourcing (KPO) company. 

The foursome typifies the chiku brigade, a growing army of Western-raised Indians on the march to the motherland two years after dual nationality aka OCI became a reality. 

Says Pravin, who has put in 23 years in the field of plastic-manufacturing plants across the world, "The new West is the East. Why will we pass up the chance to go and live and work in India? It's not just that India is booming, but when I go there it's like I've found a missing piece of the jigsaw."


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## Bushroda

*Kalam for national policy to create global talent pool*
------------------------------------------------------------------------------------------------------

New Delhi, May 15 (IANS) Highlighting the demand-supply gap of skilled manpower in the country, President A.P.J. Abdul Kalam Monday underlined the need for a national policy to create a global human development cadre.

"...A National Policy for creating a Global Human Development Cadre for India can be evolved through a national team drawing experts from multiple ministries, including education system, and various professional associations and societies," Kalam said at a summit on education organised by the industry lobby Confederation of Indian Industry (CII).

"Evolution of such a policy in a time bound manner will generate quality, knowledge and skills needed by all sectors of Indian economy and globally employable human resources. The aim of the education system should be to create employment generators rather than employment seekers apart from building research capability," he said.

The president said there was a large gap in the availability of employable skills. For example, as per the NASSCOM and McKinsey Report 2005, it is estimated that the "IT, ITES and BPO sector alone will need 9 million direct jobs and 6 million indirect jobs in construction, retail and transportation by 2010, whereas we do not have such a capacity in the country to generate this number which will be acceptable to the three sectors of economy".

Spelling out the methods to bridge the gap, he said the educational system should highlight the importance of entrepreneurship and prepare the students to get oriented towards setting up of enterprises which will "provide them creativity, freedom and ability to generate wealth".

"The banking system should provide venture capital right from every village level to the prospective entrepreneurs for undertaking new enterprises. We need a large number of venture capital institutions that can take risk and promote entrepreneurs," he added.

The president also asked industry leaders and academicians to "study the role of education in improving the competitiveness index rating of India within ten ranks from 43".


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## Bushroda

*Japan's Olympus Opens First India Store*
Posted 14 May 2007 @ 09:20 am 

Japan's Olympus Imaging Corp. opened its first retail store in India Monday, offering a wide range of digital cameras in a market dominated by rivals Nikon Corp. and Canon Inc.

Until now, Olympus sold its products in India through franchise, as the government eased rules only in 2005 to allow foreign companies open single-brand retail stores in the country.

The first store opened in New Delhi, and five to six more stores in other cities will open in the next couple months, according to an Olympus statement.

The company plans to eventually build a countrywide network of stores and service centers with an investment of 500 million rupees (US$12 million, euro9 million) over the next two to three years, the statement said.

"'The power of the Indian economy is something that is now palpable,"' said Yoshitomo Nagashima, the Olympus' General Manager for Asia and the Middle East, in the statement.

Camera sales in India more than doubled to 700,000 last year and are expected to reach 1.6 million by 2010, the statement said. Digital cameras account for about 42 percent of total sales.

Olympus said it is aiming to achieve 30 percent to 40 percent growth in its India sales over the next two to three years.

Besides opening its own retail stores, the company also plans to expand its dealer network in the country.

The Indian market has been traditionally dominated by Nikon, but sales of Canon and Sony cameras have soared in recent years.


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## Bushroda

*India-China bilateral trade set to touch $40 bn*
ANIL K JOSEPH

PTI[ TUESDAY, MAY 15, 2007 08:30:37 PM] 

BEIJING: Senior trade representatives of India and China today forecast that the bilateral trade volume will surge from the current $25 billion to $40 billion by 2009, a full year ahead of the target set by the two governments. During the first quarter (Jan-Mar) of this year, bilateral trade has touched USD 8.2 billion, soaring by 58 per cent, Vice President of the China Council for the Promotion of International Trade (CCPIT), Wang Jinzhen said. 

"The business communities in China and India are determined to raise bilateral trade up to USD 40 billion by the year 2010. But if we increase our bilateral trade at this speed (58 per cent), I think we can reach USD 40 billion by 2009, an year earlier than targeted," Wang said at a India-China Business Luncheon Meeting organised by ASSOCHAM, CCPIT and the Indian Embassy here. 

Concurring with Wang's forecast, Member of Parliament and Managing Director of Videocon Industries Ltd., Rajkumar Dhoot said that as per an ASSOCHAM forecast, India-China bilateral trade could be more than double to USD 43 billion in the coming three years. During Chinese President Hu Jintao's state visit to India last November, both the countries set a bilateral trade target of USD 40 billion by 2010. 

Dhoot, heading an ASSOCHAM delegation to China, noted that the growth in Chinese exports to India was among the fastest for the world's third largest trading power. However, he noted that Chinese investment in India was very low, only accounting for .30 per cent of all foreign direct investment approved by the country. This must improve, Dhoot said, adding the business communities of the two countries should look into the business opportunities more seriously. 

At the same time, he noted that Chinese companies have taken up project engineering worth over a billion US dollars. He also pointed out that there was huge scope for Chinese companies to invest in India's growing infrastructure sector where USD 320 billion is going to be invested in the coming years. 

Giving a brief introduction of the booming Indian economy, Dhoot told the Chinese investors that India had a 200-million-strong middle class and that the economy was heading for sustained growth, offering immense opportunity for foreign investors. Wang, who has visited India 15 times so far, noted that both India and China are developing countries with big population with both economies developing very fast. 

"This provides us with very good opportunity to further develop the relations between the two nations," he said. "However, we have to understand that this is just the beginning and we have to improve understanding between each other. Understanding is the most important factor for us to do business. Without understanding it is impossible for the business people to come together," he emphasised. 

He also called for the improvement in the 'business environment' of the two countries so as to facilitate easier access to the markets and do business. Sanjay Verma, Commercial Councillor in Indian Embassy, said the most positive aspect of India-China relations is the progress the two sides have made on the economic and commercial front.


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## Bushroda

*Spanish firm prefers India to China for joint venture*
Posted May 15th, 2007 by Indian-Muslim

By Fakir Balaji, 

Bangalore, May 15 (IANS) A leading Spanish manufacturer of printed circuit boards (PCB) has opted to set up its first overseas joint venture in India with an eye on the growing domestic demand and huge export potential.

Though China and Taiwan are way ahead of India in manufacturing PCBs and other electronic products, the Euro 18-million Circuitos Impresos Profesionalses, S.A. (CIPSA) has decided to locate the 50:50 joint venture - CIPSA-RIC in Bangalore with two Indian entrepreneurs - Anil Gupta and Alok Garg - and invest more to expand the production capacity.

"We have found India a strategic location for our first overseas venture outside Spain. Though manufacturing costs are cheaper by 10-12 percent in China, we have opted to come here (Bangalore) in view of the opportunities India offers in terms of skills, resources, market and huge export potential," CIPSA director general Evarist Michavila told IANS here.

With an upfront investment of $10 million (Rs.450 million), the JV has started manufacturing single, double and multi-layer PCBs and membrane switches for the domestic as well as export markets.

Having reached full capacity utilisation in the first year of operations last fiscal (2006-07) and posting a turnover of $10 million, the venture partners have doubled the JV's authorized capital to $20 million (Rs.900 million) in this fiscal (2007-08) for expanding the production capacity and meet the growing demand from the parent firm (CIPSA), European and Indian OEMs.

CIPSA accounts for 70 percent of the JV's exports, while the balance 30 percent goes to OEMs such as Zollner, Technomeca and BHTC in Germany. Of the total production, 65 percent is exported and the remaining (35 percent) is shipped to leading Indian OEMs/vendors such as L&T and Procot.

"To meet the increasing demand for our products in Europe and the sub-continent, we are investing more (Rs.400 million) to expand the manufacturing capacity with a third facility near the existing two plants at Doddaballapur on the outskirts of Bangalore by March 2008," Michavilla said.

Giving an industry perspective, Gupta and Garg said that though the global market for PCBs and membrane switches was attractive despite competition from China and Taiwan, the domestic demand was no less. They attributed this to the robust economy fuelling consumption of electronic products, consumer durables and high-tech products, including handsets and personal computers.

According to the Indian Printed Circuit Board Association (IPCA), of the $550-million worth of PCB/switches sold in the country in 2006, the share of Indian PCB firms was only $110 million, while products worth $440 million were imported from China, Taiwan and the South East Asian region.

The Taiwan Printed Circuit Board Association (TPCA) has estimated the PCB market size worldwide to be $45 billion in 2008 as against $33 billion in 2004.

"Our game plan is to join the volume-driven game and compete with our Chinese or Taiwanese counterparts on price points to capture a fair share of the global market and meet the growing requirements of Indian OEMs, who are still import-depended heavily," Michavila affirmed.

For this fiscal (FY 2008), the Indo-Spanish JV has projected 100 percent growth in turnover to post about $20 million and grow by 50-70 percent year-on-year (YoY) over the next three years to cross $100 million revenue target by fiscal 2011-12.


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## Bushroda

*Indiaâs Plastics Industry to Rival China According to Principia Partners' In-Depth Assessment*

EXTON, Pa.--(BUSINESS WIRE)--For plastics producers worldwide, India represents a range of highly promising new opportunities for growth. The fragmented plastics industry in this country is beginning to consolidate, governmental regulations and trade barriers are coming down due to India's recent admission to the WTO, and some large North American plastics manufacturers have already begun doing business there. 

Principia Partners announces a comprehensive market study, PLASTICS IN INDIA: AN EMERGING GROWTH ECONOMY. The study is designed to help global plastics producers and processors better understand and assess their prospects for participation in this rapidly emerging economy. 

With a population over one billion, 40% under age 15, opportunities for plastics producers in India include near-term rapid growth in the nation's internal consumption of plastic products. The Indian middle class is 300 million and rising, and the annual GDP growth rate is 8%. 

In addition, the national goal of becoming a manufacturing hub similar to China may present opportunities for plastics producers in all parts of the value chain. Growth in the plastics industry in India is expected to average double-digit rates within five years. 

Jim Morton, a Senior Partner at Principia explains âFor perspective, per capita plastic consumption in North America is about 200 pounds; in China, 50 pounds. Plastic consumption in India is less than 15 pounds per capita, but will reach over 40 pounds by 2015. Widely accepted projections foresee explosive growth in the general consumption of plastics for applications ranging from disposable products to automotive parts to super-durables such as building products." 

While the plastics industry structure in India is characterized by many low volume processors and manufacturers, consolidation has already begun, which is often a precursor of industry growth characterized by both greater volumes and higher margins, based on economies of scale. In addition to growth in products for local consumption, many expect India to become a manufacturing hub rivaling China for production capacity and for feeding export markets with finished goods. This study will explore issues that affect the speed of economic development and corresponding opportunities for foreign investment. 

Principiaâs study will serve as an important baseline analysis for forecasting and business planning purposes by existing and new industry participants. Using 2006 as the baseline, the study will analyze the drivers and trends within the region and provide forecasts covering the next five year by each major plastic, enduse market, and plastic process. The study will cover all key polymers, and will be exceptionally useful for determining if, where and when to make a strategic business move in India. The study will distinguish between products for local consumption and those for export. 

Principia Partners relies on extensive first-hand field research for its industry studies. Information for this study will be gathered through more than 500 interviews across the entire plastics industry value chain. Interviews will be conducted within the country with major suppliers of each plastic type in the study scope, as well as key processors and OEMs.


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## Bushroda

*Manufacturing sector posts 14 per cent growth*
15 May, 2007 l 1814 hrs ISTlIANS

NEW DELHI: India's manufacturing sector registered the highest growth in over a decade at 14.1 per cent in March 2007, up from 10.1 per cent in the same month of the previous year, the commerce and industry ministry said Tuesday. 

The growth rate of the sector has doubled since 2002-03 from six per cent to 12.3 per cent in 2006-07. 

"This augurs well for the 11th Plan (2007-2012), which envisages a growth of 12 per cent for the manufacturing sector," Commerce and Industry Minister Kamal Nath said in a statement. 

Industries that performed well during the period are wood and wood products, furniture and fixtures, metal products and parts, food products, basic metal and alloy industries and cotton textiles. 

As compared to 8.2 per cent in the previous year, industrial growth during 2006-07 went up by 11.3 per cent, which is the highest growth of the industrial sector since 1995-96, the statement said. 

In 2006-07, foreign direct investment (FDI) in India rose to $16 billion compared to $5.5 billion in 2005-06, a major chunk of which came from the US, Britain, Mauritius, the Netherlands and Singapore, which have contributed 83 per cent of the total FDI inflows. 

Services, electrical equipments (including computer software and electronics), construction activities, telecommunications and real estate are some of the sectors that attracted maximum FDI. 

The construction and real estate sectors have together received $1.45 billion during 2006-07 which is about 12 per cent compared to 3.4 per cent of the total FDI inflows received during the year 2005-06, the statement said.


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## Bushroda

*McAfee Upgrading India Center*

McAfee is upgrading its engineering center in India into a complete business subsidiary and will target, among other things, the large market for security risk management. 


âIt wonât just be an engineering and development center anymore, but will go beyond that â into renewal and business development,â Roger J. King, the companyâs executive VP for worldwide sales, said in Bangalore.

One of the prime areas McAfee will explore in India in the near future is security risk management, which includes compliance management, said King. It will specifically address the growing needs of CIOs and CFOs for business reporting and analysis, he added.

Outlining McAfeeâs growth plans in India, King said McAfee had ramped up its headcount in India to 800 â a 20 percent increase over last yearâs figure. In 2006, McAfee committed an investment of over Rs. 360 crore for the India center over a four-year period.

Currently, 20 percent of the companyâs Asia-Pacific business comes from India, said King. Corporate business accounts for 70 percent of its Indian revenues, said Karthik Shahani, McAfeeâs regional director in India.

Shahani said security practices in India are on par with the best of the world. The technical nature of the Indian buyer is very strong, he asserted.

âUsers in the BPO/ITES space are at the leading edge of security in the country, as are banking and financial companies that have to compete with foreign banking establishments,â he explained.

âHowever, IT users do have their task cut out in the realm of security compliance, policies and investments,â Shahani said, averring with the spirit of a CIO-PricewaterhouseCoopers information security survey last year. The survey found that âIndia lags far behind the rest of the world in instituting even the most basic information security practices and tools.â This trend is unique to PSUs, among other old economy users in India, said Shahani.

The BPO/ITES segment accounts for a significant portion of McAfeeâs revenues in India. These and other small and medium enterprise users will constitute a bulk of the market in coming years, said Shahani.


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## alamgir

India's biggest economic trouble - unstable escalating oil price - India seeks Saudi help but eventually Indian economy will collapse for oil 
Media Release 
Jan. 17, 2007 





India produces littlle if any oil but it is consuming oil like America thinking FDI and outsourcing income will support it for ever. India seeks Saudi help for stabilising global oil prices. All these will fail and India will collapse in economic meltdown.

India today asked Saudi Arabia, the world's largest oil exporter, to rein in volatility in the international oil market and help stabilise oil prices at levels sustainable by developing economies. 

Prime Minister Manmohan Singh told the visiting Saudi Oil Minister Ali al-Naimi that high oil prices had hurt import dependent economies like India and the oil producers'' cartel OPEC should do much more to rein in volatility, official sources said. 

www,indiadaily.com


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## alamgir

MARCH 19, 2007 

the trouble with india


When foreigners say Bangalore is India's version of Silicon Valley, the high-tech office park called Electronics City is what they're often thinking of. But however much Californians might hate traffic-clogged Route 101, the main drag though the Valley, it has nothing on Hosur Road. This potholed, four-lane stretch of gritty pavementâthe primary access to Electronics Cityâis pure chaos. Cars, trucks, buses, motorcycles, taxis, rickshaws, cows, donkeys, and dogs jostle for every inch of the roadway as horns blare and brakes squeal. Drivers run red lights and jam their vehicles into any available space, paying no mind to pedestrians clustered desperately on median strips like shipwrecked sailors. 


Slide Show >>Pass through the six-foot-high concrete walls into Electronics City, though, and the loudest sounds you hear are the chirping of birds and the whirr of electric carts that whisk visitors from one steel-and-glass building to the next. Young men and women stroll the manicured pathways that wend their way through the leafy 80-acre spread or coast quietly on bicycles along the smooth asphalt roads.

With virtually no mass transit in Bangalore, Indian technology firm Infosys Technologies Ltd. spends $5 million a year on buses, minivans, and taxis to transport its 18,000 employees to and from Electronics City. And traffic jams mean workers can spend upwards of four hours commuting each day. "India has underinvested in infrastructure for 60 years, and we're behind what we need by 10 to 12 years," says T.V. Mohandas Pai, director of human resources for Infosys.

India's high-tech services industry has set the country's economic flywheel spinning. Growth is running at 9%-plus this year. The likes of Wal-Mart (WMT ), Vodafone (VOD ), and Citigroup (C ) are placing multibillion-dollar bets on the country, lured by its 300 million-strong middle class. In spite of a recent drop, the Bombay stock exchange's benchmark Sensex index is still up more than 40% since June. Real estate has shot through the roof, with some prices doubling in the past year.

But this economic boom is being built on the shakiest of foundations. Highways, modern bridges, world-class airports, reliable power, and clean water are in desperately short supply. And what's already there is literally crumbling under the weight of progress. In December, a bridge in eastern India collapsed, killing 34 passengers in a train rumbling underneath. Economic losses from congestion and poor roads alone are as high as $6 billion a year, says Gajendra Haldea, an adviser to the federal Planning Commission.

For all its importance, the tech services sector employs just 1.6 million people, and it doesn't rely on good roads and bridges to get its work done. India needs manufacturing to boom if it is to boost exports and create jobs for the 10 million young people who enter the workforce each year. Suddenly, good infrastructure matters a lot more. Yet industry is hobbled by overcrowded highways where speeds average just 20 miles per hour. Some ports rely on armies of laborers to unload cargo from trucks and lug it onto ships. Across the state of Maharashtra, major cities lose power one day a week to relieve pressure on the grid. In Pune, a city of 4.5 million, it's lights out every Thursdayâforcing factories to maintain expensive backup generators. Government officials were shocked last year when Intel Corp. (INTC ) chose Vietnam over India as the site for a new chip assembly plant. Although Intel declined to comment, industry insiders say the reason was largely the lack of reliable power and water in India.

Add up this litany of woes and you understand why India's exports total less than 1% of global trade, compared with 7% for China. Says Infosys Chairman N.R. Narayana Murthy: "If our infrastructure gets delayed, our economic development, job creation, and foreign investment get delayed. Our economic agenda gets delayedâif not derailed."

The infrastructure deficit is so critical that it could prevent India from achieving the prosperity that finally seems to be within its grasp. Without reliable power and water and a modern transportation network, the chasm between India's moneyed elite and its 800 million poor will continue to widen, potentially destabilizing the country. Jagdish N. Bhagwati, a professor at Columbia University, figures gross domestic product growth would run two percentage points higher if the country had decent roads, railways, and power. "We're bursting at the seams," says Kamal Nath, India's Commerce & Industry Minister. Without better infrastructure, "we can't continue with the growth rates we have had."

The problems are even contributing to overheating in the economy. Inflation spiked in the first week of February to a two-year high of 6.7%, due in part to bottlenecks caused by the country's lousy transport network. Up to 40% of farm produce is lost because it rots in the fields or spoils en route to consumers, which contributes to rising prices for staples such as lentils and onions.

India today is about where China was a decade ago. Back then, China's economy was shifting into overdrive, but its roads and power grid weren't up to the task. So Beijing launched a massive upgrade initiative, building more than 25,000 miles of expressways that now crisscross the country and are as good as the best roads in the U.S. or Europe. India, by contrast, has just 3,700 miles of such highways. It's no wonder that when foreign companies weigh putting new plants in China vs. India to produce global exports, China more often wins out.

China's lead in infrastructure is likely to grow, too. Beijing plows about 9% of its GDP into public works, compared with New Delhi's 4%. And because of its authoritarian government, China gets faster results. "If you have to build a road in China, just a handful of people need to make a decision," says Daniel Vasella, chief executive of pharmaceutical giant Novartis (NVS ). "If you want to build a road in India, it'll take 10 years of discussion before you get a decision."

Blame it partly on India's revolving-door democracy. Political parties typically hold power for just one five-year term before disgruntled voters, swayed by populist promises from the opposition, kick them out of office. In elections last year in the state of Tamil Nadu, for instance, a new government was voted in after it pledged to give free color TVs to poor families. "In a sanely organized society you can get a lot done. Not here," says Jayaprakash Narayan, head of Lok Satta, or People Power, a national reform party.

Then there's "leakage"âIndia's euphemism for rampant corruption. Nearly all sectors of officialdom are riddled with graft, from neighborhood cops to district bureaucrats to state ministers. Indian truckers pay about $5 billion a year in bribes, according to the watchdog group Transparency International. Corruption delays infrastructure projects and raises costs for those that move ahead.

Fortunately, after decades of underinvestment and political inertia, India's political leadership has awakened to the magnitude of the infrastructure crisis. A handful of major projects have been completed; others are moving forward. Work on the Golden Quadrilateralâa $12 billion initiative spanning more than 3,000 miles of four- and six-lane expressways connecting Mumbai, Delhi, Kolkata, and Chennaiâis due to be completed this year. The first phase of a new subway in New Delhi finished in late 2005 on budget and ahead of schedule. And new airports are under construction in Bangalore and Hyderabad, with more planned elsewhere. "We have to improve the quality of our infrastructure," Prime Minister Manmohan Singh told a gathering of tech industry leaders in Mumbai on Feb. 9. "It's a priority of our government."

Singh, in fact, is promising a Marshall Plan-scale effort. The government estimates public and private organizations will chip in $330 billion to $500 billion over the next five years for highways, power generation, ports, and airports. In addition, leading conglomerates have pledged to overhaul the retailing sector. That will require infrastructure upgrades along the entire food distribution chain, from farm fields to store shelves.

Envisioning a brand-new India is the easy part; paying for it is another matter. By necessity, since the country's public debt stands at 82% of GDP, the 11th-worst ranking in the world, much of the money for these new projects will have to come from private sources. Yet India captured only $8 billion in foreign direct investment last year, compared with China's $63 billion. "Having grandiose plans isn't enough," says Yale University economics professor T.N. Srinivasan.

Just about every foreign company operating in India has a horror story of the hardships of doing business there. Nokia Corp. (NOK ) saw thousands of its cellular phones ruined last October when a shipment from its factory in Chennai was soaked by rain because there was no room to warehouse the crates of handsets at the local airport. Japan's Maruti Suzuki says trucking its cars 900 miles from its factory in Gurgaon to the port in Mumbai can take up to 10 days. That's partly due to delays at the three state borders along the way, where drivers are stalled as officials check their papers. But it's also because big rigs are barred from India's congested cities during the day, when they might bring dense traffic to a standstill. Once at the port, the Japanese company's autos can wait weeks for the next outbound ship because there's not enough dock space for cargo carriers to load and unload.

India's summer monsoons wreak havoc, too. Even relatively light rains can choke sewers, flood streets, and paralyze a city, while downpours are devastating. Two years ago, Florida-based contract manufacturer Jabil Circuit Inc. saw shipments of computers and networking gear from its plant near Mumbai delayed for five days after an epic storm. "In our business, five days is a really long time," says William D. Muir Jr., who oversees Jabil's Asian operations.

Companies often have no choice but to make the best of a bad situation. Cisco Systems Inc. (CSCO ), the American networking equipment giant, has had a research and development office in India since 1999 and already has 2,000 engineers in the country. To supply the country's fast-growing telecommunications industry, Cisco decided last year to try its hand at making some parts locally. In December it contracted with another company to build Internet phones in the southeastern city of Chennai. Although Cisco says the quality of the workmanship is up to snuff, it has to fly parts in because the ports are so slowâand getting them to the factory right when they're needed is proving nettlesome. "We believe in manufacturing in India, but we don't believe in logistics in Indiaâyet," says Wim Elfrink, Cisco's chief globalization officer. Elfrink adds that unless the Chennai operation demonstrates it can run as efficiently as Cisco setups elsewhere, it won't go into full production as planned this summer.

Even the world's largest maker of infrastructure equipment is constrained by India's feeble underpinnings. General Electric Co. (GE ) last year sold $1.2 billion worth of gear such as power generators and locomotives in India, more than double what it billed in 2005. To meet that surging demand, it is scrambling to find a location where it can manufacture locomotives in partnership with India Railways. But when GE dispatched three employees to survey a potential site the railway favored in the northern state of Bihar, the trio returned discouraged. It took five hours to drive the 50 miles from the airport to the site, and when they got there they found...nothing. "No roads, no power, no schools, no water, no hospitals, no housing," says Pratyush Kumar, president of GE Infrastructure in India. "We'd have to create everything from scratch," including many miles of railroad tracks to get the locomotives out to the main lines.

But there is a silver lining for GE and other international giants: India's infrastructure deficit could yield huge opportunities. American executives who traveled to India last November on the largest U.S. trade mission ever were tantalized by the possibilities. Jennifer Thompson, director of international planning at Oshkosh Truck Corp. (OSK ), viewed construction projects where swarms of workers carried wet concrete in buckets to be poured. That told her there's great potential in India for selling Oshkosh's mixer trucks. "There are infrastructure challenges, but we see a lot of opportunities to help them meet those challenges," she says.

That explains why so many multinationals are flocking to India. Take hotel construction: In a country with only 25,000 tourist-class hotel rooms (compared with more than 140,000 in Las Vegas alone), companies including Hilton (HLT ), Wyndham (WYN ), and Ramada have plans for 75,000 rooms on their drawing boards. Or consider telecom. Because of deregulation and ferocious demand, India boasts the fastest growth in cell-phone service anywhere, with companies adding some 6 million new customers a month. No wonder Britain's Vodafone Group PLC (VOD ) just ponied up $11 billion for a controlling interest in Hutchison Essar, India's No. 4 mobile carrier. U.S. private equity outfits also want in on the action. On Feb. 15, Blackstone Group and Citigroup announced they are teaming up with the Indian government and the Infrastructure Development Finance Corp. to set up a $5 billion fund for infrastructure investments in India.

But while the laws of supply and demand would argue that India's infrastructure gap can be filled, that logic ignores the corrosive effect of the country's politics. To gain the favor of voters, Indian politicians have long subsidized electricity and water for farmers, a policy that has discouraged private investment in those areas. That's what wrecked the now-infamous Dabhol Power plant. In the late 1990s, Enron, GE, and Bechtel spent a total of $2.8 billion building a huge complex near Mumbai capable of producing more than 2,000 megawatts of electricity. But a government power authority set prices so low that it was uneconomical for Dabhol to operate, and the whole deal fell apart. (The plant, taken over by an Indian organization, now runs only fitfully.) A 2001 law was supposed to create a framework to support private investment in power generation. But according to American construction company executives, it's not working well. "Everybody knows what needs to be done, but they have great difficulty doing it," says one of the Americans. "If the party in opposition offers subsidized power, the party in power has to give subsidized power to get reelected."

Politicians who refuse to play the game pay a steep price. N. Chandrababu Naidu, the former chief minister of the state of Andhra Pradesh, transformed the state capital of Hyderabad from a backwater into a high-tech destination by building new roads, widening others, and aggressively carving out land for factories and office parks. Google (GOOG ), IBM (IBM ), Microsoft (MSFT ), and Motorola (MOT ) have all built R&D facilities there.

His reward? Voters tossed him out of office two years ago. During his decade in power, Naidu didn't do enough for rural areas, and his challenger promised to channel state funds into irrigation projects and electricity subsidies. "Naidu thought economics were more important than politics. He was wrong," says V.S. Rao, director of the Birla Institute of Technology & Science in Hyderabad. Naidu, 56, is plotting a comeback in elections two years hence. This time, he's preaching a new gospel. "You can't just target growth," says a chastened Naidu. "You have to create policies that make the wealth trickle down to the common man."

But even when politicians say they're beefing up infrastructure, it rarely helps the poorest Indians. Agriculture is stagnant in part because of a lack of the most rudimentary of roads to get to and from fields. N. Tarupthurai, for instance, scratches out a living from a five-acre plot in Jinnuru, a village in northeastern Andhra Pradesh. But his fields are more than a mile from the nearest paved road, so each day the 40-year-old Tarupthurai must carry his tools, seeds, fertilizer, and crops down a dirt path on his back or on his bicycle. "I have asked for a road, and the government says it's under consideration," says the mustachioed, curly-haired farmer. Then he shrugs.

One reason little practical help makes it from the seats of power to India's impoverished villages is that so much money gets siphoned off along the way. With corrupt officials skimming at every step, many public works projects either go over budget or are never completed. "You figure that 25% of the cost goes to corruption," says Verghese Jacob, head of the Byrraju Foundation, which promotes rural development. "And then they do such a bad job that the road falls apart in one year and has to be patched over again," Jacob says as he jostles along in a car on a potholed byway outside Hyderabad.

None of the solutions to India's infrastructure challenges are simple, but business leaders, some enlightened government officials, and even ordinary citizens are chipping in to make things better. The most potent weapon India's reformers have against corruption is transparency. Last October a new right-to-information law went into effect requiring both central and state governments to divulge information about contracts, hiring, and expenditures to any citizen who requests it. The country is also putting to work its vaunted technology prowess to police the government. Officials in 200 districts are using software from Tata Consultancy Services Ltd. to help monitor a government program that offers every rural household a guarantee of 100 days of work per year. Most of this labor goes into public works. To minimize "leakage," the TCS software tracks every expenditureâand makes all of the information available real-time on a Web site accessible to anyone.

Sometimes frustrated Indians take matters into their own hands. Tired of spending four-plus hours a day in traffic, Aruna Newton last fall helped organize something of a women's crusade to speed up infrastructure improvements. Nearly 15,000 volunteers now monitor key road projects and meet with state officials to press for action. They even enlisted the state chief minister's mother, who helped get his attention. "It's about the collective power of the people," says Newton, a 40-year-old vice-president for Infosys. "I just wish building a road was as easy as writing a software program."

Increasingly, companies trying to expand in India have the government as a willing partner rather than a roadblock. The state of Andhra Pradesh rolled out the red carpet last year for MAS Holdings Ltd. of Sri Lanka, South Asia's largest garment manufacturer. It promised subsidized electricity, new access roads, and even a deepwater port if the company would place a huge industrial park on the southern coast. Now MAS Holdings plans to build a cluster of factories that will eventually employ 30,000 production workers. And it chose India over China. "The government support was absolutely vital," says John Chiramel, India director for MAS Holdings. "If we can work together, there's no stopping growth in this country."

A key to getting massive projects off the drawing boards is forming public-private partnerships where the government and companies share costs, risks, and rewards. In 2005, India passed a groundbreaking law permitting officials to tap such partnerships for infrastructure initiatives. Developers ante up most of the money, collect tolls or other usage fees, and eventually hand the facilities back to the government.

The first project to take advantage of the new law is the $430 million international airport scheduled to open next year in Bangalore. The facility is designed to handle 11.5 million passengers per yearânearly double the capacity of the overburdened existing airport. It will be owned by a private company, which will turn it over to the Karnataka state government after 60 years. Global engineering and equipment giant Siemens (SI ) is helping to build the facility, and Switzerland's Unique Ltd. will manage it. These companies are also equity investors. The state had to contribute just 18% of the cost. Without such an arrangement, Karnataka wouldn't be getting a new airport.

A lot of India's hopes rest on the airport deal's success. If it proves the viability of public-private partnerships, more such ventures could come pouring in. A visit to the site instills confidence. Project manager Sivaramakrishnan S. Iyer is a crusty veteran of mammoth infrastructure ventures throughout South Asia and the Mideast. Wearing a scuffed hardhat, with a two-day growth of white stubble on his face, he surveys the site from a 2.5-mile-long bed of crushed granite that will be the runway. Work goes on seven days a week, 18 hours a day. Iyer is intent on wrapping up on schedule in April, 2008. "We have the will to do it, and it will be done," he says.

Will the airport open on time? That's not within Iyer's control. Two government authorities are responsible for building the road that leads to the airport, and they're locked in a dispute over how to do it. Work hasn't started.

And so it goes in India. Unless the nation shakes off its legacy of bureaucracy, politics, and corruption, its ability to build adequate infrastructure will remain in doubt. So will its economic destiny.
www.businessweek.com


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## Neo

May 15, 2007 
*RBI buys $2.3bn in March*

MUMBAI, May 14: India's central bank bought $2.3 billion in intervention in March, sharply lower than its record dollar purchases in February, the Reserve Bank of India's (RBI) monthly bulletin showed on Monday.

The rupee began a sharp rally around mid-March that took it to seven-year highs that month. It has since risen to a nine-year high of 40.53 per dollar last week, and on Monday it was trading around 41 per dollar, up about 8 percent this year.

The March intervention took the RBI's dollar purchases to $22 billion since the start of November 2006. It bought a record $11.9 billion in February alone to check the rupee's rise.

The rupee's gains have been powered by robust capital inflows, some of which the central bank had tried to absorb.

Foreign funds have bought nearly $3 billion of local equities this year, after pouring in nearly $8 billion in 2006.

However, when it sells the rupee to stem currency gains, it adds rupees to domestic money supply. That meant it was adding to money supply and stoking price pressures at the same time it was tightening policy to rein in credit growth and inflation.

Firm inflation data prompted the central bank to intervene less aggressively in March, analysts say.

The central bank is widely believed to have sold rupees less aggressively in April and May too, though traders remain wary of building large currency postions on fears of provoking intervention.

India's foreign exchange reserves were $204 billion on May 3, rising $26.8 billion in 2007, of which $9.4 billion had come since early March. Traders said a large part of this year's increase was due to the RBI's dollar purchases.

Before November last year, the RBI had not intervened since May 2006. In the fiscal year that ended on March 31, the central bought a total of $26.8 billion in intervention. â Reuters

http://www.dawn.com/2007/05/15/ebr22.htm


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## Bushroda

*Deyaar and Ansal API sign MOU for joint development in India*

*Deyaar, the region's fastest growing real estate company, has announced its foray into the Indian property market in joint venture with Indian property major, Ansal API.*

Both partners signed a Memorandum of Understanding (MoU) last week for an exclusive tie-up to develop a mega mixed-use township comprising residential, commercial, institutional and industrial properties in India. The partnership with the Indian property major envisages Deyaar bringing its international expertise to complement Ansal's established expertise in real estate development and rich knowledge of the local market and regulations. 

Expressing his delight at entering a market as matured and fast-growing as India, H.E. Dr. Mohammed Khalfan Bin Kharbash, Chairman of Deyaar and UAE Minister of State of Finance and Industry, said that the move was reflective of the expanding economic friendship being forged between India and the UAE. 'The recent visit to India by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and the Ruler of Dubai, has set the pace for a new era in the relations between the two countries. This could not have come at a more opportune moment for Deyaar, which is currently looking for new and promising markets. I am sure the move will open a new and exciting chapter in the short, yet successful history of Deyaar,' he concluded. 

Ansal Properties and Infrastructure Limited (APIL), promoted by the Delhi based Ansal-API Group, is one of the largest players in the Indian real estate market. With a track record of 40 years in the business and current market capitalization of over USD 1 billion, the Ansal group has real estate expertise that spans township development, office and residential projects, retail malls and IT parks. With a land bank of over 5,000 acres in northern India, Ansal Group is one of the largest land bank owners in India. 

Elaborating on the decision, Zack Shahin, Chief Executive Officer, Deyaar, has stated that this partnership is the beginning of a series of projects across India. 'We are indeed happy to work with a seasoned and reputed real estate developer of the stature of Ansal API, which brings into this relationship its impeccable expertise spanning four decades. In turn, we will be able to take to India our unique experience and state of the art expertise in property development in the UAE, which is now the centre of a globally discussed real estate boom,' he explained. 

Entering India is a decisive step in Deyaar's international expansion plans. The move assumes special significance in the backdrop of the phenomenal growth that Indian economy has achieved over the last few years, touching a whopping 9.2% in the financial year 2006-07. 

Commenting on the joint venture, Pranav Ansal, Director - Ansal API, said 'We are delighted to have a successful partner like Deyaar which brings its world class expertise of design capabilities , construction technology and financial & management resources in building residential and commercial space to India. Deyaar's projects in UAE and elsewhere are not only impressive, but also reflective of a wise approach to architecture, building dynamics and the idea of space. We welcome Deyaar to India, through what we strongly believe will be a landmark partnership and act as catalyst to growth and development in India.' 

Coming close on the heels of India turning a trillion dollar economy and the latest McKinsey Global Institute study predicting that the current rate of growth will inflate incomes in the country by almost three times over the next two decades, Deyaar's decision to enter India reflects a close assessment of the Indian economy and the property market. The Indian real estate industry has reportedly witnessed a growth rate of over 30% in 2006, and has an existing demand-supply gap of over 24 million units, prompting key players from across the globe to invest in the country.


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## Bushroda

*Indiaâs new Entrepreneurs*

*Agra is a befitting illustration of how second-rung cities are enjoying the benefit of Indiaâs 8%-plus growth of the last four years*

By Pragya Singh

Nearly five centuries ago, Agra was the commercial nerve centre of a flourishing Mughal empire. Thanks to the monuments that were built by the kings and emperors, including the Taj Mahal, this Uttar Pradesh city was just little more than a tourist stopover.

But, almost unnoticed, Agra has come to illustrate another economic revolution. It has, despite its dilapidated state and creaking civic infrastructure, become a hub of new opportunities in the service sector. Such has been the impact of these opportunities that, by the end of 2004 until when data is available, more than six of 10 people here, are now self-employed, up from just five years earlier.

Agra is only symptomatic of a new breed of second-rung Indian cities, beyond the metros of Delhi, Mumbai, Chennai, Bangalore and Kolkata, that have begun to savour benefits of Indiaâs 8%-plus economic growth of the last four years. 

A comprehensive government survey, conducted every five years, puts Agra right behind Varanasi as the city with the most self-employed, followed by Bhopal, Indore and Patna. A few years back, Agra was not in this picture with Varanasi, Patna, Pune, Lucknow and Kolkata among the top five cities in terms of self-employed males.

As a result, apart from the 40% of population that depends largely on agriculture, and some who still rely on the traditional leather and footwear business and iron foundries, most people in Agra now work in new professions as âself-employedâ persons.

According to the National Sample Survey Organization, in 1999-2000, 431 of every 1,000 employed males were self-employed in the city. This has climbed to 603 per 1,000 in 2004-05. Nationally, the number of self-employed persons has also grown, but from 368 to 395 per 1,000, nowhere close to the trend in Agra and a host of similar cities. 

*New whizz-kids*

Chalk it up to people such as 21-year-old Yatendra Singh. When he graduated from the local university in 2005, he never imagined that in little under three years he would be co-owner of two Internet cafÃ©s. âThe Internet had started taking off in Agra. I would have survived otherwise, but maybe not run an independent business,â he says.

The Internet boom came a little later to Agra than Delhi or Mumbai, but is now within armâs distance of Singhâs small basement set-up on the Bodhla-Sawan road, as you enter Agra from Sikandra. It marks the spot where Mughal emperor Akbar lies buried. The area around has been developed afresh to meet demand for housing. âAt least eight cyber cafÃ©s, big or small, have sprung up since 2004 in this area,â Singh points out. So have dyers and dry cleaners, public telephone call providers, real-estate brokers, and courier-delivery shops, all cheek-by-jowl around busy old streets, crammed with scooters and cycle rickshaws.

Part of the reason why Agra has moved to self-employment seems to be its improved connectivity with neighbouring states and Delhi. A new expressway to link it with Noida, near Delhi, is in the works, while the city government is firming its pitch for a metro rail system. It also has the distinction of being one of the only five cities in a very large state, other than Varanasi, Meerut, Lucknow and Kanpur. All these attributes seem to make Agra the ideal hub for services, despite its low industrial activity. Singhâs older brother Krapal, for instance, is now juggling time between Agra and Noida, a five-hour drive away, setting up their familyâs second 15-seat cyber cafÃ© in Electronics City.

*Growing needs*

Meanwhile, the UP government projects the population of Agra city will grow 3.84% every year, to touch 2.04 million in 10 years and 2.7 million by 2031.

This, for the state administration, can only mean that the cyber cafÃ©s, couriers, call booths, hotels, education centres and real-estate dealers will keep snowballing.

âWe are growing very fast and the city is changing. The only way to accommodate these changes is to find new ways of employment, by bringing in investment and modernizing the city,â says Ashok Kumar, commissioner, Agra. 

As commissioner, Kumar is the top administrator of Agra, responsible for its planned development and monitoring government schemes. âA sizable chunk of self-employment now comes from professions that either did not exist a decade back or were minuscule,â he says.
The rise in self-employment is evident across the country, though analysts differ in what that means. Arvind Virmani, principal economic adviser with the Planning Commission, the top planning agency for the country, says the move towards self-employment suggests one part of the eventual transition of labour from unskilled jobs in agriculture to skilled jobs in manufacturing.

Self-employment is the usual route for labour as it moves up the value chain from agriculture to industry, Virmani wrote in a 2006 working paper on employment and equitable growth for the Commission. âWhether the final shift to higher-skill jobs in manufacturing actually happens in India depends on other factors â such as skill development and labour laws being more rational, to encourage employment by industry,â he says.

But Arjun Sengupta, a member of Parliament and former member-secretary, Planning Commission, sees in the trend towards self-employment the declining fortunes in farms made worse by laggard industrial activity. 

âThis needs attentionâwe must encourage industrial activity and boost agriculture productivity to stimulate higher-paying jobs which have decent conditions,â he says.
Opportunities galore

Analysts say that the rise in self-employment shows a shift in the way the Indian economy now functions. âThe rise in self-employment goes to show that people are finding work outside traditional sectors,â said Duncan Campbell, director, policy integration department with the International Labour Organization.

New opportunities have meant that many have been able to affect a career shift that they would not have foreseen. 

Take Rajendar Yadav, at 25, heâs already a veteran of the cityâs traditional industry: footwear. In 2002-03, when footwear-related exports from the city touched $350 million (Rs1,435 crore), Yadav decided to leave his decent-paying job as production in-charge at Superhouse, a footwear exporter.

By 2005, he had settled into a new role as freelance âindentingâ agent for shoe and accessory makers within Agra and in Delhi, Noida and Chennai. A newly minted entrepreneur, he now purchases machinery that makes leather footwear and deals in sundry items such as decorative beads, for five regular clients.

âWhat is the point if I have to keep working for others while every business sector booms in the city?â Yadav said at his office, a sparsely furnished room on the roof of his two-storey house in Awas Vikas, a new colony being developed by the Agra Development Authority since 1999. Most of his work seems to be conducted over his mobile phone.

Yadav is representative of the shifting employment pattern that is unveiling across cities in India. The Survey data reflects this trend in 29 Class I cities, with population of more than one million, including Howrah in the east to Kalyan-Dombivili in the west and Hyderabad in the south to Ludhiana in the north.

The cyber-cafÃ© owner and the indenting agent for leather components constitute the top end of the self-employed: they are also employers. The single-largest share of self-employed in the country, however, are what are called home-based workers, who work for themselves, or produce for a contractor/sub-contractor, who is himself part of a long value chain. There are, according to survey figures for 1999-2000, some 29 million families dependent on such industrial outwork. While many of them are women, Agra today has the second-largest proportion of self-employed males in India, after Varanasi, where 757 of 1,000 employed males were self-employed in 2004-05. 

*Turning point*

For Agra, the turning point came when a slew of industries had to be shut down on fears that pollution from these units was damaging the marble exterior of the Taj Mahal. Following a Supreme Court order over a decade ago, the foundry and leather businesses here went through a series of ups and downs. 

While some 750 foundries could move to Foundry Nagar after a shift to compressed natural gas, a less polluting fuel, to survive; others engaged in leather tanning, for instance, quite simply shut down.

Former workers of these industries are among those who have moved over time to self-employment. Agraâs foundries are perhaps the best example of this shift. Started 400 years ago by Mughal emperor Akbar to supply weapons and other metalwork to his kingdom, Agraâs foundries became the biggest arms suppliers to the nearby princely states as well.

When closures came, a stunning five lakh workers ended up without jobs, some for the rest of their lives. Parts of the city are still dotted with foundries with their shutters down or locked up. 

âFor those five lakh workers, self-employment is a necessity than a sign of growth in the local economy,â said Raj Babbar, the member of Parliament from Agra. âWe must ensure that traditional skills such as zari embroidery, carpet weaving and marble inlay do not die out. 

These are the only way to create new growth. Otherwise, I fear, this city will decline without its big industries or crafts.â

However, trades such as zari embroidery and carpet weaving rely heavily upon homeworkersâwho essentially produce at home to work orders provided by contractors. 

âMost such work is carried out at very low piece rates (not daily wages), and comes with no social protection whatsoever,â says Santosh Mehrotra, a senior consultant with the Planning Commission and author of a recently published book, Asian Informal Workers. He says it is also important to make the distinction between self-employed workers and self-employed employers very clear, since fortunes tend to vary between the two kinds. 

âIn urban areas, the self-employed employers are less likely to be poor and also likely to be less poor or live below the poverty line,â says Mehrotra. âThis is because they are usually involved in activities where production is directly for sale, such as in crafts or manufacturing.â

Agra has some 10,500 small industries, which employ more than 50,000 workers. Some 7,200 units are in the tiny industry segment and employ more people. âThere has been a burst in self-employment after the polluting industries were shut down because of services and trading jobs,â said Sanjay Gupta, who headed the Confederation of Indian Industry in western UP till 2006. 

*New roles*

Sonu Sharma, who was a general handyman with the Agra Development Authority, now runs a public call office (PCO) booth in New Market, a crowded business district of Agra, from a tiny shop he owns next to a busy temple.

âMy income has gone up to Rs3,000-4,000 a month now. I used to make half this amount earlier,â said Sharma, whose PCO shop has two phones. Billing machine included, Sharma paid Rs5,000 to start the venture. 

âWe started running PCOs in western UP in December 2005 and already have 30,000 PCOs there. Agra is the biggest and fastest-growing market in UP, along with Meerut and we have more than 3,000 there,â says a Bharti Airtel Ltd official. Meanwhile, stiff competition between phone companies is replicating what happened in Delhi or Mumbai with a variety of mobile products and services jostling for customers.

Pankaj Timori has been selling mobile phones since 2005 from his tiny corner shop in the local Heeng Ki Mandi. The area, claim locals, is Asiaâs biggest market for raw material for footwear, if just 50% transactions conducted off-the-books are considered. 

Timori has hit upon a unique way to beat his family businessâ biggest woe: selling paints. Their original family trade required a lot more space to display and store the wares. âThere wasnât enough room in our small shop and no room to expand. Considering that, selling phones is proving more profitable,â he said.

It isnât just stores or retail offerings. Agra has also begun to breed services entrepreneurs such as Kapil Jain, an engineer by training, who set up his event management and wedding-planning business in 2002. His bread-and-butter work comes from non-resident Indians (NRIs) or foreigners who want to marry in the city of the Taj Mahal.

âAgra is not ready for wedding planners or event managers yet, but foreigners do want to marry here because the Taj Mahal provides them an ultimate setting,â Jain said. 
He generally gets two-four NRI weddings a season, but with a tour and travel and event management businesses thrown in, he more than takes care of the bills.

Jainâs small office, from the roof of which the Taj Mahal can be spotted at a distance, is as modern as any in Delhi. He has 10 employees including two women. Some 789 of every 1,000 employed women in Agra, up from 462 in 1999-2000, are self-employed, more than anywhere else in the country, except for Varanasi and Jaipur. Overall, in Class I cities, the proportion of women who depend on self-employment has gone up from 352 per 1,000 employed in 1999-2000 to 382 in 2004-05.

Women such as Pragya Mittal, a 25-year-old post-graduate in History from Agra College who decided to become a tourist guide, one of the 130 guides approved by the government to operate in the city. While Pragya still dreams of joining the Indian Administrative Services, she isnât keen to go to the usual fall-back option, teaching.

âThis is an independent and well-paying profession and I would rather stick with it than study more or work elsewhere,â she says. For good reason. More than 20,000 people visit the Taj every month giving a steady flow of business to the guides though there are hundreds of other local residents who also try to piggyback as unapproved guides.

There is a downside to the lack of big industry and large scale job creation ventures as well. Agra is dotted with a large number of tuition centres. Sanjay Rawat, who runs an academy to coach some 100 youngsters on how to make it through a range of competitive entrance tests.

âI canât be sure, but at least 80% of the students who make it through a test will not return to Agra,â says Rawat. âThere is a premium on education in Agra because the opportunities are largely outside.â


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## Bushroda

*Iraq to push for Indian refineries during visit by minister*
Published: Tuesday, 15 May, 2007, 08:50 AM Doha Time 

NEW DELHI: Iraq will press Indian firms to set up refineries there during a four-day visit to India by Oil Minister Hussain al-Shahristani later this month, an Iraqi official said yesterday.

âWe will invite India to establish refineries in Iraq ... the capacity of our refineries is very limited,â said Muayad Hussain, Iraqâs charge dâaffaires in India.

Shahristani is due in India from May 24-27.

Iraq has a refining capacity of 603,000 bpd. It produces 477,000 bpd of refined products and consumption stands at 514,000 bpd, according to the Opec website.

During a visit to the Saudi capital Riyadh earlier this month, Indian Oil Minister Murli Deora met Shahristani. The participation of Indian state explorer Oil and Natural Gas Corp and other firms in Iraqâs oil sector was raised.

The Iraqi minister invited Indian Oil Corp and Engineers India Ltd to consider entering the downstream sector.

Hussain said in New Delhi that the exploration of the Tuba oil field in southern Iraq could also feature in talks between the two countries.

ONGC, Indiaâs Reliance Industries Ltd and Algeriaâs Sonatrach tried in 2000 to secure Tuba.
Iraq is expected to enact an oil law by May-end that would allow its various regions to negotiate oilfield contracts with foreign investors.

Baghdad desperately needs foreign investment to revive its shattered economy, which relies heavily on oil export revenues. The country straddles the worldâs third largest oil reserves.
The law, which parliament could pass by the end of this month, has been threatened by Kurds in the north who say they are not getting their fair share.

Decades of war, sanctions, under-investment and now widespread violence and sabotage have left it critically short of fuel. It has to import nearly half of all its gasoline.

Iraq has eight refineries, none of which were damaged during the US-led invasion in 2003. Oil officials say that Iraqâs refineries are operating at only 50%-75% of capacity, forcing Baghdad to import most of its fuel. â Reuters


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## Bushroda

*A leader in medical tourism, almost*

Anjali Doshi and BR Srikanth
October 18, 2006

After living with pain for nearly 15 years, Russell Cole, 62, travelled from California to Mumbai last November to have three joints operated â knees and right hip â at the L H Hiranandani Hospital. Cole, who suffered from severe arthritis, paid Rs 6 lakh for the surgeries that would have cost him over Rs 25 lakh in the States.

Three weeks later, he was back on his feet and on the way home. âI would definitely recommend India to my friends who have been putting off orthopaedic surgeries for years because they canât afford it,â Cole said.

George Marshal, a retired policeman, underwent an angiography in the UK. But when he was put on an eight-month waiting list for surgery, Marshal decided to get his operation done at Wockhardt Hospital, Bangalore. The operation was conducted last year and he is doing well.

In 2005, an estimated 1,75,000 patients travelled to India for medical care. Thailand and Singapore are other popular medical tourism haunts.

âThat number is growing by 30-35 per cent every year,â says Vishal Bali, CEO, Wockhardt Group of Hospitals. Wockhardt gets roughly 900 overseas patients every year at its Mumbai and Bangalore facilities.

Mumbai, Delhi, Bangalore and Chennai, in that order, are the major hubs for standard surgical procedures, comprising about 70 per cent of the total medical tourism revenue. South India, Kerala in particular, gets top billing among those looking for alternative therapies, such as Ayurveda, that make up the rest of the revenue pie.

From an excruciatingly long wait for diagnostic and surgical procedures in some countries to skyrocketing medical costs elsewhere, the reasons why India is attracting overseas patients in the thousands are many.

Americans come here because of mounting medical costs and high insurance premiums back home. In 2005, 46.6 million Americans had no medical insurance and 120 million were without dental insurance, according to the Census Bureau.

Patients from Southeast Asia, Sri Lanka, Pakistan and Bangladesh are other countries that favour India due to cost-effective treatment in state-of-the-art hospitals.

The demand-supply gap is the reason many Canadians and British seek medicare in India. The UKâs National Health Service and Health Canada provide medical care at highly subsidised rates but it often takes upto six months just to get an MRI scan.

It also helps that the costs here are one-fifth, sometimes even one-tenth, of the expenses incurred in the US and UK. A heart surgery that costs about Rs 14,00,000 in the US will take about Rs 2,50,000 in India. The most sought-after procedures are cardiac, orthopaedic, spinal, cosmetic and dental surgeries.

Many Indian hospitals like the Asian Heart Institute, Mumbai, have applied for the Joint Commission International (JCI) accreditation â a gold standard in global healthcare standards. Only five hospitals, including Wockhardt in Mumbai and Apollo in Delhi, have JCI accreditation.

According to a 2004 CII report, India has the potential to attract a million tourists every year that would contribute roughly Rs 23,000 crore to the Indian economy.

But while India strives to emulate the success of Thailand and Singapore, there are a number of drawbacks to consider: overall hygiene levels in India, poor infrastructure at airports and a bureaucratic approach to issuing visas.

As till the time these issues are addressed, we remain a few steps away from being the leader in medical tourism.


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## Bushroda

*India's Solar Power*
*GREENING INDIA'S FUTURE ENERGY DEMAND*



Editor's Note: Using sunlight to create electrical and thermal energy remains the most promising source of clean renewable energy, and projections as to how quickly solar power takes off could be grossly understated. As the author points out, the costs for photovoltaic electricity, for example, have dropped by an order of magnitude in the last 30 years. 

The challenge however lies in just how much energy solar power would have to displace if it were to become the dominant source of energy in the world. In 2006, according to the International Energy Agency, 80.3% of the world's energy came from oil (34.3%), coal (25.1%) and gas (20.9%). Fully 90.9% of the world's energy came from combustion, because alongside these fossil fuels in 4th place are "combustible renewables," mostly wood. With nuclear power and hydro-electric power providing 6.5% and 2.2% of the world's energy, respectively, you have accounted for 99.5% of the world's energy! 

So where does solar fit into this equation? Most of this last half-percent of one percent of the world's energy, .41%, is provided from geothermal sources. The energy we love so much, wind and solar, currently only provide .064% and .039% of the world's power requirements. Put another way, for solar energy achieve its potential and replace all other sources of energy in the world, this .039% would have to increase 2,500 times. 

Moreover, since nations such as India and China have only begun to industrialize, and since the industrialized nations only comprise approximately 20% of the world's population yet consume over 50% of the world's energy production, it is unlikely that global energy production will not have to increase. It is these sobering realities that should inform any reading of the potential of solar power. - Ed "Redwood" Ring 

India's Solar Power - Greening India's Future Energy Demand 
by Avilash Roul, May 15, 2007



The world's largest solar steam cooking system 
at Tirupathi in Andhra Pradesh


Human civilization has been witnessing a gradual shift towards cleaner fuels-from wood to coal, from coal to oil, from oil to natural gas; renewables are the present demand... 

With the fluctuating high cost of petroleum, minimizing dependence on importing conventional energy resources, stewardship to protect the Planet and providing affordable energy to all, countries including India have stepped up their energy path for harnessing indigenous renewable resources. To tap the infinite energy and transform as well as transmit it to each household, the Indian government has accelerated promotion of the use of universally available  Solar Energy. 

India due to its geo-physical location receives solar energy equivalent to nearly 5,000 trillion kWh/year, which is far more than the total energy consumption of the country today. But India produces a very negligible amount of solar energy - a mere 0.2 percent compared to other energy resources. Power generation from solar thermal energy is still in the experimental stages in India. Up till now, India's energy base has been more on conventional energy like coal and oil. However, India has now attained 7th place worldwide in Solar Photovoltaic (PV) Cell production and 9th place in Solar Thermal Systems. Grid-interactive renewable power installed capacity as on 31.10.2006 aggregated 9,013 MW corresponding to around 7 percent of the total power installed capacity which equates to over 2 percent of total electricity. 

Worldwide photovoltaic installations increased by 1,460 MW in 2005, up from 1,086 MW installed during the previous year. That was a 67 percent increase over the 750 MW produced in 2003. In 2002 the world solar market increased 40 percent. Solar Energy demand has grown at about 25 percent per annum over the past 15 years. In 1985, worldwide annual solar installation demand was only 21 MW. According to the IEA's factsheet, "Renewables in Global Energy Supply," the solar energy sector has grown by 32 per annum since 1971. Worldwide, grid-connected solar PV continued to be the fastest growing power generation technology, with a 55 percent increase in cumulative installed capacity to 3.1 GW, up from 2.0 GW in 2004, as per "Renewable Global Status Update Report 2006" (www.ren21.net). Similarly, India witnessed an acceleration of solar hot water installations in 2005. Global production of solar PV increased from 1,150 MW in 2004 to over 1,700 MW in 2005. Japan was the leader in cell production (830 MW), followed by Europe (470 MW), China (200 MW), and the US (150 MW). 


In the sun during the day, providing lighting at night,
a photovoltaic/battery lantern illuminates the home


India: Status of Solar Energy: 

The solar PV program was begun in the mid 70's in India. While the world has progressed substantially in production of basic silicon mono-crystalline photovoltaic cells, India has fallen short to achieve the worldwide momentum. In early 2000, nine Indian companies were manufacturing solar cells. During 1997-98 it was estimated that about 8.2 MW capacity solar cells were produced in the country. The total installed manufacturing capacity was estimated to be 19 MW per year. The major players in Solar PV are Bharat Heavy Electricals Ltd. (BHEL) (http://www.bhel.com/bhel/home.php); Central Electrtonics Ltd., and Rajasthan Electricals & Instruments Ltd., as well as by several companies in the private sector. The latest, 100 million dollars investment from Tata BP Solar in India is the pointer towards the booming solar market in India. Of late, the market is growing for SPV applications based products with the active encouragement of the government. 

The Ministry of New and Renewable Energy (www.mnes.nic.in), earlier known as the Ministry of Non-conventional Energy Sources - have initiated innovative schemes to accelerate utilisation and exploitation of the solar energy. Number of incentives like subsidy, soft loan, 80 percent accelerated depreciation, confessional duty on import of raw materials and certain products, excise duty exemption on certain devices/systems etc. are being provided for the production and use of solar energy systems. The Indian Renewable Energy Development Agency (IREDA) - http://mnes.nic.in/annualreport/2004_2005_English/ch12_pg1.htm - a Public Limited Company established in 1987- provides revolving fund to financing and leasing companies offering affordable credit for the purchase of PV systems. As a result, the Renewable Energy Sector is increasingly assuming a greater role in providing grid power to the Nation as its total capacities reached about 9,013 MW. This apart, the Electricity Act 2003, National Electricity Policy 2005 and National Tariff Policy 2006 provide a common framework for the regulation of renewable power in all States/UTs through quotas, preferential tariffs, and guidelines for pricing 'non-firm' power. 

However, in the Draft New and Renewable Energy Policy Statement 2005, which is yet be approved, the federal government is very cautious about the status of renewable energy in the future. It says, "despite the fact that the biomass-solar- hydrogen economy is some decades away, it should not make industry and the scientific & technical community of the country unduly complacent into believing that necessary steps for expected changes can wait." 

Present Scenario of Solar Power: 

The MNES has been implementing installation of solar PV water pumping systems for irrigation and drinking water applications through subsidy since 1993-94. Typically, a 1,800 Wp PV array capacity solar PV water pumping system, which cost about Rs. 3.65 lakh, is being used for irrigation purposes. The Ministry is providing a subsidy of Rs.30 per watt of PV array capacity used, subject to a maximum of Rs. 50,000 per system. The majority of the pumps fitted with a 200 watt to 3,000 watt motor are powered with 1,800 Wp PV array which can deliver about 140,000 liters of water/day from a total head of 10 meters. By 30th September, 2006, a total of 7,068 solar PV water pumping systems have been installed. 

A total of 32 grid interactive solar PV power plants have been installed in the country with financial assistance from the Federal Government. These plants, with aggregate capacity of 2.1 MW, are estimated to generate about 2.52 million units of electricity in a year. In 1995, an aggregate area of 4 lakh square meters of solar collectors were installed in the country for thermal applications such as water heating, drying cooking etc. The thermal energy generated from these devices was assessed at over 250 million kwh per year. In addition, solar PV systems with an aggregate capacity of 12 MW were installed for applications such as lighting, water pumping, communications, etc. These systems are capable of generating 18 million kwh of electricity per year. In 2003 alone, India added 2.5 MW of solar PVs. For rural electrification as well as employment and income generation, about 16,530 solar photovoltaic lighting systems were installed during 2004-05. Over 150,000 square meters of collector area has been installed in the country for solar water heating in domestic, industrial and commercial sectors making the cumulative installed collector area over one million square meters. State-wise details of cumulative achievements under various non-conventional energy programmes, as on 31.03.2006 are shown in the table below: 

MINISTRY OF NON-CONVENTIONAL ENERGY
FUNDED PHOTOVOLTAIC OUTPUT BY STATE


Government-funded solar energy in India only accounted for
approximately 6.4 megawatt-years of power as of 2005



Similarly, India's Integrated Rural Energy Program using renewable energy had served 300 districts and 2,200 villages by early 2006. More than 250 remote villages in seven states were electrified under the program during 2005, with additional projects under implementation in over 800 villages and 700 hamlets in 13 states and federal territories (see table below). Rural applications of solar PV had increased to 340,000 home lighting systems, 540,000 solar lanterns, and 600,000 solar cookers in use. 

INDIA'S INTEGRATED RURAL ENERGY PROGRAM
REMOTE VILLAGES SELECTED FOR SOLAR ELECTRIFICATION


By 2006 over 2,400 off-grid villages in India had
received solar thermal and photovoltaic systems



Future Plans: 

An Expert Committee constituted by the Planning Commission has prepared an Integrated Energy Policy that aims at achieving integrated development and deployment of different energy supply sources, including new & renewable energy. The grid-interactive renewable power installed capacity is expected to reach 10,000 MW as on corresponding to a share of over 2 per cent in the electricity-mix, by 31.3.2007. Further capacity addition of 14,000 MW is envisaged during the 11th Plan (2007-12) leading to a then share of around 5 per cent in the electricity-mix but mostly through hydro-power. A 10 million square meter solar collector area capable of conserving electricity equivalent to that generated from a 500 MW power plant is expected to be set up by 2022. India has recently proposed to augment cooking, lighting, and motive power with renewable in 600,000 villages by 2032, starting with 10,000 remote off-grid villages by 2012. 

External Support: 

A four-year $7.6 million effort was launched in April 2003 to help accelerate the market for financing solar home systems in southern India. The project is a partnership between UNEP Energy Branch, UNEP Risoe Centre (URC), (http://uneprisoe.org/) two of India's major banking groups - Canara Bank and Syndicate Bank, and their sponsored Grameen Banks. As per the existing policy, Foreign Direct Investment up to 100 percent is permitted in non-conventional energy sector through the automatic route. The FDI received in non-conventional energy sector from January 2003 to September 2006 is estimated at around Rs.35 crore. The Multilateral Development Banks like World Bank and Asian Development Bank are also helping India to achieve its potential on renewable resources. But, the funding from MDBs on solar energy enhancement is negligible compare to other clean energy support in India. 


A 200 litre per day solar water heating system 
installed in Karnataka by IREDA


Challenges and Constraints: 

Solar energy is facing three fundamental challenges of cost, its manufacturing procedure as well as its waste products that have any impact on the environment and the land acquisition for erecting solar PVs. 

The hunt for better, cheaper solar cells is due in India. Solar PV now cost one tenth of what they did in early 1980s. Despite the fact that the price of solar photovoltaic technology has been coming down over the years it still remains economically unviable for power generation purposes. During 1999, the cost of solar cells being manufactured in the country was estimated to be in the range of Rs. 1.35 to 1.50 lakhs per kW. The average cost of solar PV modules was around Rs. 2 lakhs per kW. At present the initial cost of both types of solar energy systems is higher compared to the cost of conventional energy systems and also the other non-conventional energy systems. However, the estimated unit cost of generation of electricity from solar photovoltaic and solar thermal route is in the range of Rs. 12 -20 per kWh and Rs. 10 - 15 per kWh respectively in India. With present level of technology, solar electricity produced through the photovoltaic conversion route is 4-5 times costlier than the electricity obtained from conventional fossil fuels. 

There are number of R & D projects are going on solar PV Program in India. The Solar Energy Centre (http://mnes.nic.in/solarenergy1.htm) has been established by Government of India as a part of MNES to undertake activities related to design, development, testing, standardization, consultancy, training and information dissemination in the field of Solar Energy. Recently, development of polycrystalline silicon thin film solar cells and small area solar cells concluded at the Indian Association for Cultivation of Science at Jadavpur University. The National Physical Laboratory, New Delhi is working on development of materials and process to make dye sensitized nano-crystalline TiO2 thin films. The Centre for Materials for Electronics, Pune has been working on development of phosphorous paste for diffusion of impurities in solar cells. Under a joint R&D project of MNES and Department of Science & Technology (DST), the Indian Association for Cultivation of Science (IACS), Kolkata continued to work on optimization of process for fabrication of large area double junction amorphous silicon modules. 

However, considering the fact that solar energy systems do not require any fuel, the running costs are lower. Therefore, the cost of some of the solar energy systems such as solar water heaters, solar cookers and solar lanterns can be lower than that of conventional energy products when calculated over the life of the systems. The other advantages of solar energy systems are modular nature, long-life, reliability, no recurring requirement of fuel, low maintenance and so on. 

In the very near future, breakthroughs in nanotechnologies promise significant increase in solar cell efficiencies from current 15% values to over 50% levels. These would in turn reduce the cost of solar energy production. However, capital costs have substantially declined over the past two decades, with solar PV costs declining by a factor of two. PV is projected to continue its current rapid cost reductions for the next decades to compete with fossil fuel. However, the realisation of cost reductions is naturally closely linked to market development, government policies, and support for research and development. 

Environmental Costs: 

In India, of late there has been a debate regarding whether hydro-power and solar power are green or renewable? Since solar power systems generate no air pollution during operation, the primary environmental, health, and safety issues involve how they are manufactured, installed, and ultimately disposed of. Also, an important question is how much fossil energy input is required for solar systems compared to the fossil energy consumed by comparable conventional energy systems. Another concern area is installing solar cells on the land area. The large amount of land required for utility-scale solar power plants - approximately one square kilometer for every 20-60 megawatts (MW) generated - poses an additional problem in India. Instead, solar energy in particular requires unique, massive applications in the agricultural sector, where farmers need electricity exclusively in the daytime. This could be the primary demand driver for solar energy in India. 

Conclusion: 

Even though energy from renewable energy sources is growing rapidly, with markets such as solar cells, wind and biodiesel experiencing annual double digit growth, the overall share is only expected to increase marginally over the coming decades as the demand for energy also grows rapidly, particularly in many developing countries. In India, the scientific focus is deliberately moving towards transforming coal into clean energy as well as harnessing hydropower. The recent surge in nuclear energy is also diverting focus from the solar energy enhancement. In all probability, the Indian government will support off-grid solar energy production through a decentralized manner. In spite of this, India needs to focus research on solar energy and cheaper photovoltaics to provide affordable energy to all. 

Additional State Info on Solar Energy: 

Andhra Pradesh 

The Solar Electric Light Fund (SELF) (http://www.self.org/) founded the Solar Electric Light Company (SELCO) Photovoltaic Electrification Pvt. Ltd. The SELCO was established in 1995 to market, install, and service Solar Home Systems (SHS) in south India. The SELCO has achieved international recognition as the first company to concentrate on marketing and servicing SHS in the rural Indian market. The Company uses TATA-BP solar modules and deep-cycle batteries purchased on the Indian market, while manufacturing its own lights and charge controllers. Currently, its primary products are 22 and 35 watt SHS, and it will be introducing a 50 Wp system to customers shortly. 

The Ministry had sanctioned a project to Non-conventional Energy Development Corporation of Andhra Pradesh Ltd., Hyderabad for installation of 50 solar dryers to individual users in rural areas with a view to promote the technology and show its potential in income generation and leading to development of entrepreneurship. The dryers were developed by Society for Energy, Environment and Development (SEED), Hyderabad. 

West Bengal 

Since 1995, with the help of the US Department of Energy (www.eren.doe.gov/international.html) and the National Renewable Energy Laboratory (http://www.nrel.gov/), the Ramakrishna Mission, a non-governmental organization in West Bengal (http://www.sriramakrishna.org/) has installed more than 500 PV domestic lighting system and has established 'Aditya' - a solar shop in the mission campus in Narendrapur, which sells PV systems up to nearly 10 in each day. The systems are manufactured in India and the US. The technical staff of the Mission has expected to establish six more Aditya solar shops and more than 2000 additional domestic lighting system and seven-community systems in the West Bengal. Through 2005, 73 Aditya Solar Shops were established in India. 

About the Author: Avilash Roul has been writing, advocating, researching, and creating knowledge on Environment and Development in various English Daily media since 2000. He has worked with Down To Earth (fortnightly magazine published in New Delhi, India) for the last three years. He has also contributed a Sunday column in New India Express on the environment and development. Right now Mr. Roul is working as an Assistant Coordinator for the Bank Information Center (www.bicusa.org), an independent, non-profit, non-governmental organization that advocates for the protection of rights, participation, transparency, and public accountability in the governance and operations of the World Bank, regional development banks, and the International Monetary Fund.


----------



## Neo

* Indiaâs MCX eyes $750bn turnover *

ISTANBUL: Indiaâs MCX commodity exchange expects turnover of at least $750 billion this fiscal year and will launch an exchange in Mauritius as part of an international expansion, a senior official said on Tuesday. Reforms, such as allowing new kinds of forward contracts or algorithmic trading in India, are pending approval and Lamon Rutten, joint managing director of MCX, said a go-ahead for just two measures would take volumes to $1 trillion this year.

In the last fiscal year running to the end of March, turnover at Multi-Commodity Exchange (MCX), which was launched in 2003, totalled $480 billion, he said.

âIf any two of the government measures come through weâll hit $1 trillion this year,â he told Reuters on the sidelines of a conference in Istanbul.

Rutten said the aim was for MCX to become one of the top five futures exchanges in the world within five years, from its current ranking at 10th, which already makes it bigger than the New York Board of Trade (NYBOT). MCX, which together with its parent company holds a 49 per cent stake in Dubai Gold and Commodities Exchange (DGCX), also plans to launch a multi-asset exchange in Mauritius this year, targeting offshore players.

âWe expect it will exist by the end of the year,â he said, adding it already had a licence. âIt would be an offshore financial centre.â

They were still deciding which products would be traded. âWe will have gold, the traditional big commodities, but the unique aspect will be the innovative products,â Rutten said, adding the Mauritius exchange would be large, overtaking Dubai in two to three years.

Another project will be announced later, he said, adding that MCX was looking at Asia. Rutten declined to give details.

He also declined to comment on any involvement in a new commodities exchange in Egypt, which Cairo is planning for next year. 

Rutten said DGCX has postponed by three months a plan to launch a steel future contract, putting the team that had been preparing it to work instead on a rupee future, which has seen large demand and will be the first in the world.

http://www.thenews.com.pk/daily_detail.asp?id=56069


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## Neo

*Whisky giant sold to billionaire *



Mr Mallya's United Breweries Group confirmed the purchase.

An Indian billionaire has bought the Scottish whisky distiller Whyte & Mackay in a Â£595m ($1.2bn) deal. 

The spirits giant United Breweries, which is headed by Vijay Mallya, announced the all-cash acquisition to the Bombay Stock Exchange. 

In a statement, the firms said the deal would help expand the market for Whyte & Mackay's brands in emerging economies such as India. 

It will also help UB Group add Scotch whisky to its portfolio of products. 

United Spirits, part of the UB Group of companies, said it planned to introduce Whyte & Mackay's brands to the Indian market immediately. 

Mr Mallya, who has been dubbed India's Sir Richard Branson after he took his Kingfisher beer brand into airlines, will become chairman and chief executive of the firm. 

Speaking at a conference in Glasgow on Wednesday, he said: "Until today, the only missing link in our portfolio has been Scotch and, due to the shortage and rapidly increasing prices of Scotch whisky, we needed a reliable supply source. 



> In Whyte & MacKay we not only have a strong place in the Scotch whisky business but of course a great heritage of brands
> 
> Vijay Mallya
> New Whyte & MacKay owner



"In Whyte & MacKay we not only have a strong place in the Scotch whisky business, grain and more distillation, but of course a great heritage of brands." 

The tycoon also made assurances that jobs at the company were safe with expansion more likely than any cuts. 

He also said he had an emotional attachment to the firm, with its Jura whisky being his late father's favourite single malt. 

Vivian Immerman and his brother-in-law, Robert Tchenguiz, had taken full control of Glasgow-based Whyte & Mackay two years ago. 

Mr Immerman had been part of a group of investors who paid Â£208m for the company in 2001. 

He said he was selling the company because it would be "very difficult" for him to take it to the next level. 

Mr Immerman told BBC Scotland: "Vijay will bring the international distribution, especially in the emerging markets where Scotch has exponential growth which has not been seen over the last several decades, and that is vital for this business." 

He said all the existing staff would be transferring over to the new owner and dismissed suggestions that any of the company's brands could be distilled in India. 

"Scotch whisky can only be made in Scotland," he stressed. 

Whyte & Mackay's self-branded whisky holds about 3% of the UK whisky market. 

The company, which employs more than 500 staff on sites around Scotland, also owns the Dalmore and Jura brands as well as Vladivar vodka and Glayva liqueur. 

UB Group dominates the Indian spirits market, which is the world's largest for whisky. 

But Scotch whisky only makes up about 1% of the Indian market, as a result of tariffs imposed by the country's national and state governments. 

Mr Mallya has been criticised by the spirits industry for trying to sell cheap Indian whisky in Europe. 

The Scotch Whisky Association (SWA) has in the past argued that UB's Indian-made product was not whisky as it was distilled with molasses rather than malt. 

But following the deal, an SWA spokesman said: "This announcement again shows that Scotch whisky has a global appeal and that international confidence in the Scotch whisky industry's future prospects is strong." 

http://news.bbc.co.uk/2/hi/uk_news/scotland/6659779.stm


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## Bushroda

*BSE Sensex inches close to $1 trn* 
Rajesh Abraham / Mumbai May 17, 2007 

New listings and rise in prices of large-cap stocks fuelling rally. 

The market capitalisation of India is inching towards $1 trillion after the total value of all listed stocks touched an all-time high of Rs 39,78,172 crore or about $970.28 billion (at Rs 41 a dollar) on Wednesday. The economy touched the $1 trillion mark just recently. 

The journey towards the $1-trillion mark is nothing less than spectacular, considering that the market cap was just about $150 billion in 2004. To put in context, the total bank deposits in 2004 was $500 billion and has crawled to about $650-700 billion in the same period. 

The new listings and the rise in prices of large-cap companies over the last three to four months aided the upward journey of the bourses. 

Market cap of major countries 
As on May 15, 2007
$ billion per cent 
World 56187.31 100.00 
AMERICAS 
United States 18817.67 33.49 
Canada 1652.29 2.94 
Brazil 1295.18 2.31 
Mexico 390.76 0.70 
Chile 199.85 0.36 
EUROPE/AFRICA 
Britain 3997.76 7.12 
France 2851.26 5.07 
Germany 2011.79 3.58 
Switzerland 1300.61 2.31 
Italy 1183.15 2.11 
ASIA/PACIFIC 
Japan 4875.72 8.68 
China 2181.10 3.88 
Hong Kong 1895.45 3.37 
Australia 1118.24 1.99 
India* 975.52 1.74 
South Korea 919.35 1.64 
*as on May 16, 2007
Source: Bloomberg 


A total of 33 new scrips, including Idea Cellular (Rs 30,372 crore), Power Finance Corp (Rs 15,602 crore), Indian Bank (Rs 5,406.51 crore), Firstsource Solutions (Rs 3,913.32 crore), MindTree Consulting (Rs 2,973.38 crore), Fortis Healthcare (Rs 2217.97 crore), Global Broadcast News (Rs 1,855.46 crore), Redington India (Rs 1,378.69 crore) and ICRA (Rs 926.05 crore) added as much as Rs 70,710 crore to the market cap. One of the prominent gainers in the m-cap journey is Reliance Capital, whose m-cap crossed the $ 5 billion-mark on Wednesday. 

Also the Delhi-based Unitech has become the countryâs first real estate company to cross the $10 billion mark in market capitalisation. Its market capitalisation increased by Rs 3,981.68 crore on Wednesday to close at Rs 43,446.24 crore ($ 10.64 billion). 

The Sensex, which closed at 14,127.31 on Wednesday, is just 525 points away from the peak of 14,652 posted on February 8 this year. The previous highest m-cap was Rs 39,25,746 crore on February 7, when the Sensex touched 14,643. 

âWe are sure to reach $1 trillion mark sooner than later. If you look at the current rally, only about 10-15 stocks have participated. A combination of new listings and the rise in share prices of the 10-15 large caps have helped us to hit the new milestone,â said Ajay Bagga, chief executive officer of Lotus India Mutual Fund. 

The stream of mega share offerings in the pipeline, including Rs 13,000 crore by the Delhi-based property developer DLF, another Rs 10,000-plus crore follow-on issue by ICICI Bank, Rs 7,000-plus crore issue by State Bank of India, apart from share offerings from the SBI subsidiaries and other banks could take the m-cap closer to $1 trillion. 

âBy including the capitalisation of Indian entities listed on Londonâs Alternative Investment Market, the global firms acquired by the listed Indian companies in the last two months and others that are often considered a part of the Indian universe, we reach a total of $992 billion,â said Nilesh Jasani, research analyst of Credit Suisse, in the recently published report on the $1 trillion Indian economy. 

Indian companies led by the Tatas, Hindalco and now the UB Group have made overseas acquisitions worth $26 billion in the last 10-12 months. 

Eight of the 10 economies saw their stock markets rise in the one-year period after they first crossed the $1 trillion GDP mark. The UK is the only economy that fell below the trillion-dollar mark for a while after attaining the status for the first time, according to the Credit Suisse report.


----------



## Bushroda

*India beats China at innovation, ranked 58*
*Japan, Switzerland and US on top, filing most number of patents; India second-best place to innovate*
Jacob P. Koshy

New Delhi: India, the second fastest growing major economy in the world after China, has been ranked No. 58 in a study of a countryâs innovation prowessâessentially the number of patents per million population filed by the countryâby the Economist Intelligence Unit, the research arm of The Economist. 

China comes in at No. 59 in a study where Japan, Switzerland and the US come in at the top three positions. 

India fared marginally better on a study of innovation enablers (or the ability of a country to facilitate innovation), coming in at No. 50. This index is based on innovation inputs or variables, such as the amount spent on R&D, and innovation environment or issues such as the macroeconomic environment. 

While India scores poorly on the data front, it makes up on the perception side: a parallel global study of 485 senior managers by the same firm found India the second-best place to innovate, right after the US.

Sujit Bhattacharya, researcher at the governmentâs National Institute of Science, Technology and Development Studies, said the number of patents by itself was not an accurate measure of a countryâs innovation ability. âThough patents are one of the strongest indicators of a countryâs innovation performance, factors such as realising commercial gain out of your patent, and extracting the maximum possible benefit out of every patent is crucial,â he added. 

The EIU study is based on data collected between 2002 and 2006. A forecast by the agency for 2007-2011 expects China to improve its rank by five positions, while India is expected to move up by two. 

According to the Organization for Economic Cooperation and Development, China spent $136 billion on research and development in 2006, a 20% increase over the previous year. This was more than Japanâs spend of $130 billion, but still well below that of the US at $330 billion. India spent around $6 billion on R&Dlast year. 

The report said the commercial infrastructure in China is modernizing rapidly. Multinational companies are opening research centres in China, lured by the fact that local scientists are paid only about 20% as much as Western scientists. The countryâs problems, according to the report, include the rampant theft of intellectual property, academic fraud, weak financial markets, and political meddling in science and research.


----------



## Bushroda

*Energy needs $150 bn to fuel economy: KPMG* 
ECONOMY BUREAU 
Posted online: Thursday, May 17, 2007 at 0000 hours IST 

MUMBAI, MAY 16 : Indiaâs power and upstream energy sectors such as coal, oil and gas need investments to the tune of $120-150 billion over the next five years, according to a KPMG report. By world standards, Indiaâs current level of energy consumption is very low. For the year 2004- 05, the total annual energy consumption for India is estimated at 572 mtoe (million tons oil equivalent) and the per capita consumption at 531 kgoe (kilograms oil equivalent). 

However with a targeted GDP growth rate of over 8% and an estimated energy elasticity of 0.80, the energy requirements of the country are expected to grow at over 6.4% annually over the medium to long term. This implies a four-fold increase in Indiaâs energy requirement over the next 25 years, which is a significant challenge for the country. 

The report titled âIndia Energy Outlook 2007â, underlines the recent efforts by the government of India in recognizing the need for private participation and ensuring that policies to promote investments are being implemented. Private participation in coal mining for captive use, in oil & gas exploration and in the power sector is already seeing significant progress. It is also expected that private participation in nuclear energy would be allowed as and when the Indo-US Nuclear deal goes through. 

Commenting on the study, Arvind Mahajan, Executive Director, Advisory and Head Energy, Infrastructure and Government, KPMG said, âThe general theme of private participation and competition has advanced in the past one year with some concrete examples on the ground to substantiate it. Looking ahead, the Atomic Energy Act is expected to be modified shortly allowing private participation and anticipating this many large Indian and international players have started talks for possible tie-ups.â 

Need of the hour 
â¢ Indiaâs energy requirement will rise four-fold over the next 25 years, which is a significant challenge for the country 
â¢ Energy transport infrastructure and power transmission networks require significant investments urgently

Along with private participation, there is a move to bring in market mechanisms in the energy sector under an independent regulatory oversight. A gradual approach is important till the supply side position improves and more players enter the sector so that markets can work effectively. The Government is seen as making efforts to broaden the supply base both internally and externally. It is intended to diversify the fuel basket by increasing shares of natural gas, hydro and even nuclear energy. 

At the same time, both the government and private sector companies are looking to acquire equity in energy assets abroad as seen in recent examples in the oil & gas and coal sectors. 

The report also states that energy transport infrastructure such as ports, railways, pipelines and power transmission networks need significant investments. 

Tariff reform in the energy sector and distribution reform in the power sector are two important steps that need to be successfully carried out. Tariff reform to phase out subsidies or to target them effectively and distribution reforms to bring efficiency in the power sector are vital. Steps have been taken in this direction with mixed results.


----------



## Bushroda

*Expect a minimum 8.5% growth in â07-08: Rangarajan*
*The Prime Ministerâs economic adviser also said inflation rate has to be brought closer to 5%*
Reuters

New Delhi: The Indian economy should grow by at least 8.5% in the fiscal year ending March 2008, but annual inflation must be brought closer to 5%, the Prime Ministerâs economic adviser said on Wednesday.

âThe Reserve Bankâs estimate of 8.5% growth for 2007-08 appears alright,â C. Rangarajan, chairman of Prime Minister Manmohan Singhâs economic advisory council, told Reuters in an interview.

âWhile the global growth rate is expected to slowdown a little bit, nevertheless the overall global environment will be favourable for growth,â he said. âTherefore, one could think of a minimum growth of 8.5% for 2007-08.â

India has grown at an average 8.6% over the past four years, including the estimated growth for 2006-07. But policymakers are aiming for double-digit expansion to cut mass poverty and increase the countryâs global economic clout.

Rangarajan, a former central bank governor, said the inflation rate, which hit a two-year high in January, was showing signs of coming down.

âBut in the current year, or 2007-08, we should really bring it closer to 5% and if possible a little below 5%.â

He said steps taken by the central bank should moderate money supply, and over the medium term an inflation rate of around 4% was desirable.

Rangarajan said good monsoon rains and healthy government procurement of wheat and rice from farmers to build food stocks would help reduce inflationary pressure.

âIf the procurement becomes better than last year and if the monsoon also behaves normally, then there is every possibility of the inflation rate coming down,â he said.


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## Bushroda

*On the trail of Indiaâs 396 m invisible workers*
Chitrangada Choudhury
Email Author
Mumbai, May 16, 2007
04:36 IST(17/5/2007)

Wages below minimum. On call 24/7. No compensation for work injuries. No social security. This world of few laws rules the lives of 396 million Indians in the so-called unorganized sector, according to a new report. 

The sector contributes 93 per cent of Indiaâs workforce, higher than in any other world economy, according to the âConditions of Work and Promotions of Livelihood in the Unorganised Sector Reportâ, released by the National Commission for Enterprises in the Unorganised Sector for public feedback but not yet submitted to the government.

About 44 per cent of unorganized urban workers â mostly migrants who stream in from remote villages where agriculture no longer supports their growing numbers â work in Indiaâs booming construction industry. Yet no one has computed their contribution to the national economy. And that contribution has been growing steadily, says the 450-page report that pulls together studies from across states and analysis data from the National Sample Survey Organization.

The Commission was set up by the UPA government in September 2004 to recommend policy measures that would, in the words of Prime Minister Manmohan Singh, âgive a new deal to the working peopleâ. A draft bill it put out has been pending with the government since May 2006. The report recommends a national fund to finance welfare programmes for unorganised workers and a national board to improve opportunities for them and upgrade their skills.

Illiteracy is the most striking feature among workers in this sector. Rural casual workers have it worse: the men have an average of 1.7 years of education, the women just 7 months; 47 per cent of them are illiterate. âLittle or no education prevents entry into the coveted organized sector,â says Commission member Ravi Srivastava.

The average landholding of the rural worker is sub-marginal at a little over an acre.

The sectorâs weak bargaining power coupled with uninterested authorities, the report says, ensures that plentiful welfare regulation does not work. âThe interpretation of laws by courts sometimes tends to exacerbate the livelihood crisis faced by the poor as their compliance costs are well beyond what workers can afford and governments do not step in either to lower these costs or compensate the workers,â the report says.

*Small-town dreams sour*

Bharat More was one such worker. In November 2000, the subsistence farmer from Thane made his first annual journey to a saltpan in Raigad, south of Mumbai. He was barely 18. At the end of the six-month work season, the saltpan owner turned away all 75 seasonal workers without paying them. The wages amount to more than Rs 10 lakh and have not yet been paid. A local NGO filed a case in the Bombay High Court, which in 2004 ordered the state to survey working conditions in saltpans and pay the workers. The case is still in court, and the court order, when it does get implemented, can no longer make a difference to More. He died last July.

Stagnant agriculture and falling groundwater levels in tribal villages in Thane drive their men, sometimes entire families, to cities in an annual search for work. They are typically headed for building construction sites, saltpans, brick kilns and sand dredges in the satellite towns around Mumbai or across the border in Gujarat. 

Dilip Rao of Dahanu in Thane, who makes the annual trip to construction sites in Vasai, returns home at the start of the monsoon to cultivate millet for his familyâs livelihood. Despite working soon after dropping out of secondary school a decade ago, Rao has no savings. He lost his elder daughter to malnutrition two years ago. 

âTo bind labourers to work,â says Brian Lobo of the Dahanu-based Kashtakari Sangathana, âemployers give them a few hundred rupees as advance and some expenses and defer wages to the end of the season. But in several instances, workers are cheated of this tooâ.

Lobo's NGO has filed close to 100 cases of wage violations with government departments over the past two years, but since formal work contracts are never drawn up, it is difficult to pin down employers or brokers.


----------



## Bushroda

*Playboys' playboy with a taste for Scotch whisky*
COLIN DONALD

WHAT would Mr Whyte and Mr Mackay have thought? When in 1844 the Glasgow merchants formed their docklands whisky blending business, the idea of it passing into the hands of a bejewelled Indian multi-millionaire for Â£595 million would have occasioned the stiffest of nips. 

Even in the globalised world of a century and a half later Dr Vijay Mallya's entrance into the conservative universe of Scotch is a seismic event.

Not because the industry is unused to foreign-owned production of our national spirit - Whyte & Mackay was sold on by a South African after all, and other owners are French, Thai and Trinidadian - but because the Scotch industry has never seen anyone with ambitions on the scale of Vijay Mallya. 

For the definitively flamboyant, and controversial businessman-politician, listed by Forbes Magazine as the world's 746th richest man, Scotland's fourth-biggest Scotch producer is a crucial stepping stone in the construction of a dominant global drinks giant. 

Already the fastest-growing and third-biggest spirits group in the world, Mallya's United Spirits is well placed to hitch a ride on the explosion in "aspirational" consumption in the future mega-markets of India and China. India, which imports only 500,000 cases of Scotch a year, is estimated to have the thirst to absorb 3 million of them. Vijay Mallya intends that a major proportion are Whyte & Mackay brands. 

As the owner of India's first multinational, with interests in engineering, fertilisers, media, pharmaceuticals and civil aviation, Mallya's fortunes - and his $1bn (Â£505m) personal fortune - are already intimately bound up with those of the emerging economic superpower. Rather too intimately, say his critics. 

Mallya's Bollywood-style backstory has been a staple of breathless Indian press reports for two and a half decades, ever since the businessman, who helped establish the UBL conglomerate was elected chairman at the age of 28 on the sudden death of his father. 

Since then a shrewd series of consolidations and leveraged buyouts, and divestments, and stock exchange listings, fortuitously timed to coincide with the liberalisation of India's sclerotic socialist economy have helped make Mallya a virtual embodiment of Indian entrpreneurialism. 

Dubbing himself "The King of Good Times", Mallya is the playboy's playboy, whose assets include a 300ft yacht Indian Empress, 26 houses around the world including Keillour Castle near Crieff, a collection of Picassos and Renoirs and a fleet of Ferraris. 

The high jinks of his publicity stunts are regaled almost with pride in the Indian press, for example his decision to rub his rivals's noses in his acquisition of the super-jumbo Airbus A380, by taking journalists on a jaunt in a plane staffed by scantily-clad hostesses. 

Commentators also gasped at onboard service of Kingfisher Beer - strictly prohibited on Indian domestic flights, a law that Mallya is using his influence to change, along with the one about domestic airlines being barred from international routes for five years after their foundation. 

For that matter, Kingfisher Airlines itself is in contravention of India's strict laws on the advertising of alcohol, being a flying proxy advertisement for the beer it is named after. 

But for all his showmanship, charm and ingenious opportunism, and popular defiance of cultural conventions, Mallya is no dilettante. He works a punishing seven-day working week, and keeps strict tabs on the fine detail of all of his businesses. 

He personally vets every applicant for his service staff, while logistical details of every Kingfisher flight must be texted to his mobile wherever he is in the world. 

His determined self-association with youth, dangerous sports and glamour may court comparisons with Sir Richard Branson, one major difference is that Branson is not also an elected member of parliament. 

Since 2000, Mallya has represented his home state of Karnataka in the upper house of the Indian parliament., and thus plays a direct role in setting government policy guidelines for his own businesses. He has made unabashed parliamentary interventions on drinks regulation. 

And while Branson undoubtedly has powerful friends, he might find it harder to command a single industry, as Mallya has done. 

The emergence of India as a global superpower has set the clock on the anomalies that have infuriated industry bodies like the Scotch Whisky Association, which gave yesterday's acquisition a tersely formal welcome. 

The SWA has long worked to reverse India's combination of heavy federal and state duties on imported spirits - sometimes as high as 550 per cent - that have kept legitimate Scotch imports to India down to a trickle. 

Now EU trade bosses have instigated disciplinary proceedings against New Delhi, attempting to use WTO rules where patient persuasion has failed. 

The body has also crossed swords with Mallya over United Spirits' co-opting of spurious Scottish associations such as naming Indian brands "Bagpipers" and "McDowells". 

Now that Mallya's acquisition of Whyte & Mackay has brought him into the Scotch fold, courtesy should silence any further mutters from the Scottish industry that Mallya has not been entirely distant from Indian government policy on Scotch imports. 

He is after all a Congress Party supporter, known to be close to the Indian finance minister, the otherwise impeccably pro-free-trade Palaniappan Chidambaram who included whisky in the category of "agricultural products" subject to high tariffs designed to counter-balance European farm subsidy advantages. 

For his part, Mallya has contended that the Indian constitution forbids New Delhi from interfering in state tariff levels, but the argument is scoffed at by the SWA, which contends that India has been given every chance to comply with the rules of global trade. 

The WTO will rule on the matter probably around next April, and New Delhi must comply or face expulsion. By this time, as well as having a seat on the board of the SWA itself, Mallya is likely to have set up the bases for Whyte & Mackay's brands to head an tidal invasion of premium-priced, but now more affordable, Scotch into the grateful hands of the Indian middle classes. 

Dr Vijay Mallya, the embodiment of the global business muscle and the world-beating aspirations of the new India would be forgiven for raising a toast to the perfection of his own sense of timing.

*Diamond smiles from man with fortune and entourage to match*

JUST as his reputation for high living goes before him, so did his entourage. Even an hour ahead of Vijay Mallya's arrival at the Glasgow Hilton's Grand Ballroom, there were several of his PAs and an army of metropolitan PRs buzzing round the hall making final checks. 

Some of the board were already there and took to exchanging business cards and small-talk with a few early-bird reporters, conversation focusing on the man himself and his Scottish connections - he has a castle here. 

But as the big moment approached, the number of Mr Mallya's coterie increased exponentially: appearing, disappearing, BlackBerries glued to ears, all dressed in a uniform of dark suit, white shirt and colourful tie. There were 25 or more, all looking very official, efficient and excited. With the appointed hour of 9:30am for the announcement past, the sense of anticipation grew. 

When he finally appeared, it was virtually without introduction but nobody in the room was in any doubt that this was the man they had come to see. 

Eschewing the standard businessman's dress-code, Mr Mallya, like his western counterpart Richard Branson, cut an unorthodox figure: long, steel-grey hair swept back, dressed in a black suit with a black shirt and wearing a pair of wrap-around, frame-less spectacles. 

The overall effect would have been one of understatement, were it not that in place of a tie there appeared to be a diamond stud the size of a 10p piece, partnered with twinkling cufflinks, lapel badge, rings bearing large stones and a colossal watch fastened to his wrist with a huge turquoise strap. As one observer later put it: "I was dazzled." 

Then it was down to the humdrum business of business: figures, statistics, expressions of hope and childhood memories of whisky. Mr Mallya was as happy and relaxed as a man who had just got his hands on a multi-million- pound business could be. 

But it was perhaps his parting words that betrayed something of the Indian tycoon's real feelings about his latest acquisition. Asked if there was any emotional element in his buying of the company, he paused before replying: "You can be emotional about two million quid, rather than 200 million quid."


----------



## Bushroda

*NITESH ESTATES TO DEVELOP INDIAâS FIRST THE RITZ â CARLTON HOTEL*
*The Ritz-Carlton Hotel Company, L.L.C. Announces First India Hotel; Partners with Nitesh Estates to set-up a 250-room, five star property in Bangalore.*

[ClickPress, Wed May 16 2007] The Ritz-Carlton Hotel Company, L.L.C., the leader in global luxury hospitality, has announced plans for its first location in India. The Ritz-Carlton, Bangalore, a 250-room, five-star property, will open in the nationâs third-largest city by early 2010. Developed by Nitesh Estates, The Ritz-Carlton, Bangalore, will be set up in the central business district of the city. 

Nitesh Estates has partnered with Ritz Carlton to facilitate the international hospitality majorâs entry into India. This project also marks Nitesh Estatesâ foray into the hospitality segment, one of the fastest growing and a lucrative segment for the real estate and construction industry. 

âIndia represents the next great international expansion opportunity for The Ritz-Carlton Hotel Company,â said Simon F. Cooper, president and chief operating officer. âWe are especially pleased that our initial presence will be in Bangalore, a city whose thriving economy has made it the Silicon Valley of the nation. âNitesh Estates, the Bangalore-based developer, has committed to building a world-class hotel in the heart of the cityâs central business district,â he added. 

Nitesh Shetty, managing director, Nitesh Estates said, âWe are delighted that The Ritz-Carlton Hotel Company will be entering the Indian market in association with us. We hope to continue this partnership in other cities, as well.â 

The Ritz-Carlton, Bangalore will offer several restaurants, extensive meeting and events space, a luxurious spa and outdoor swimming pool, and an entire floor dedicated to high- end retail store boutiques. In addition to spacious rooms and suites, the hotel will include The Ritz-Carlton Club, a private floor accessible only by elevator key and offering light fare and dedicated concierge service throughout the day. Wimberly Allison Tong & Goo will be the architect and Hotel Interior Design Peter Silling will be the interior designer for the hotel.


----------



## Bushroda

*From Huddersfield to India*
*Applied Language are celebrating the opening of their office in India with an Indian Extravaganza in Huddersfield*

[UKPRwire, Wed May 16 2007] Applied Language Solutions, a leading translation and interpreting company, are bringing a touch of spice to Huddersfield with the Indian extravaganza event theyâre holding to celebrate the opening of their office in India. The event, which will be attended by local businesses, customers and local dignitaries, will take place on 24th May at their UK headquarters in Huddersfield. 

To honour the traditions of their new Indian team members and welcome them into the company, Gavin Wheeldon, CEO, will perform a speech to the Indian team in their native language, who will be joining the festivities through a live web link-up. 

Traditional Indian musicians will be playing time-honoured Indian music to create the authentic atmosphere, whilst guests sample genuine home-made Indian cooking provided by Curry Cuisine, a traditional Indian catering company. Attendees will also enjoy entertainment by a Bollywood dance performance given by Indian dancers from Salmaâs Bollywood Academy. 

Gavin enthused: âThis is the perfect time for us to expand into Asia, and the ideal way for us to show our respect for our new team memberâs culture. This is a fantastic event to bring the two diverse cultures together and bring a sense of unity to our international business.â 

âThe Indian extravaganza will be an excellent night to welcome those based in India to the company, and to allow our customers, staff and dignitaries in the UK to experience the wonderful traditions of India.â 

Applied Language Solutions is opening an office in Chennai, India as part of their ongoing strategy to globally expand the company and further develop its operations in Asia. 

The Indian office will provide crucial support to the Applied Languageâs global sales and operations and the company is looking to recruit a large number of staff. Various employment opportunities are immediately available, and Applied Language plans to invest a further Â£10 million on expansion in the Asian market over the next five years. 

Gavin said: âIn todayâs business world, more and more companies are realising that communicating in their customerâs language is pivotal to their success in the global trading arena.â 

âIndia was chosen as a place to open an office as it is beginning to emerge as a dominant player in the global market. India is also renowned for having a highly skilled workforce, which is another great benefit of opening an office there. â 

âHaving a presence in Asia will give us a huge advantage. The fastâgrowing Asian economy offers fantastic business opportunities for Applied Language and will give us almost 24 hour global coverage, meaning our customers will have access to our services at any time of the day.â 

Applied Language Solutions are a rapidly growing language solutions company that deliver a high quality personal and corporate language service with optimal quality, price and delivery. 

Applied Language translates all kinds of documents from simple letters to large technical documents, including whole websites and printed catalogues, for specialist Medical, Legal, Financial and Marketing organisations. The company is committed to using only professional in-country translators and interpreters, of whom they have over 6,000 on their books. These translators work in over 150 languages including all the major European, Asian, African, Middle Eastern and American languages. 

Applied Language Solutions now have seven offices world wide: Huddersfield, California, Paris, Barcelona, Sofia, Guatemala City and India, and are proud to work with prestigious customers such as Nike, United Nations and Yahoo!. The company was honoured to be the winner of HSBC Start-Up Star Awards 2006.


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## Bushroda

*Elephant wiser investor than Dragon*
PRITI PATNAIK & SUBHASH NARAYAN
TIMES NEWS NETWORK[ THURSDAY, MAY 17, 2007 02:26:10 AM] 

NEW DELHI: Big savings come in small boxes, in a tabulation of countries and savings. At least that is true of Asia, whichhas traditionally been home to good savers. However, in spite of high savings, the investment rates in some countries have exceeded the savings rates, resulting in current account deficits. 

For India, over the next five years, thesavings rate is expected to be 34%, with a growth rate of 9% sustained by an investment rate of 36.1%. These are projectionsof the working group on savings in the11th Five-Year Plan under the Planning Commission. Already, the savings rate in India for 2005-06 has nearly touched 34%, according to the Reserve Bank of India. 

China has much higher rates of savings and investment compared to India. However, in China, the investments are financing the manufacturing sector. âThe investment ratein India is lower, but it is financing the services sector. The Indian economy is better leveraging the investment as opposed to China,âCrisil principal economist DK Joshi said. 

The current account balance for Asian countries â the difference between imports and exports of goods and services, which is also a measure of the gap between investment and domestic savings â has shown a marked shift from persistent deficits to large current account surpluses. 

The sharp increase in the current account deficit of the US, which is more than 6% of its GDP, has been contributed by current account surpluses of countries such as Japan and China. 

âThe large movements of the current account positions in the region have mainly reflected reductions in its investment GDP ratio. The change in the regionâs savings has had only a small effect,â the report said. 

According to the report, âglobal oil demand and persistence of demand and supply imbalances over the medium term may worsen the current account deficit for Indiaâ. Analysts say current account deficit will only help RBI in curbing inflation given that India already has comfortable forex reserves that can finance 13-14 months of imports. 

It is expected that the regionâs current account surplus will decline since the share of non-construction investment-to-GDPin east Asia is low compared to its historical level. Though critical infrastructure projects seem set to proceed in some countries, the construction investment ratio is unlikely to return to early 1990s level, the report says. 

The investment in each country shows that cyclical fluctuations can be traced back to construction investment in the region. The report says the level of construction investment in the region has been fairly volatile. 

Mr Joshi said a decline in construction investment in India will not have an impact on the growth rates because significant investment is finding way into sectors such as oil and gas, power and roads, which will drive the economy.


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## Bushroda

*Now, Brazil is hot destination for India Inc*
2007-05-16 21:08:25 Source : Moneycontrol.com

Brazil is not just about exotic beaches and the mountains. Over the last year alone, Indian investments in Brazil exceeded a billion dollars. Brazil has turned into a preferred destination for industries ranging from pharmaceuticals to auto manufacturing, reports CNBC-TV18.

Arun Kumar, Deputy Chairman, Strides Arcolab, said, âIt is a combination of strong pipeline, domestic knowledge and favourable investment climate.â

This is the second manufacturing plant put up by Strides here. The Brazilian government offers several tax incentives and encourages foreign entities to buy land and establish their businesses here.

India and Brazil have set a bilateral trade target of USD 10 billion by 2010. And the Indian government officials feel it is easily achievable with many projects in the pipeline.

The Indian Ambassador to Brazil Hardeep S Puri said, âThere is a lot coming, Tatas and Marcopolo have a JV going. India is interested in the Brazilian Embraer aircraft. There is a lot to do in agriculture, ethanol, infrastructure and minerals.â

But some Brazilians say a few sectors are taxed too high. Reginald A Barnes, New York City Center, said, âThe only thing that the government will do well is to give us a bit more for the taxes we pay. We pay an average of 39% in tax annually.â

But with the economy still growing at just about 4-5% and consumption picking up, Indian companies have their eyes firmly set on Brazil.


----------



## Bushroda

*Dell to open fourth call centre in India: CEO*
Reuters
New Delhi, January 30, 2006

Dell Inc, the world's largest computer maker, will set up its fourth customer contact centre in India, Chief Executive Kevin Rollins said in a statement on Monday.

The company also plans to double the size of its India-based product development team during the next two years, the statement said.

The company plans to raise its headcount in India to 15,000 workers, and may set up a unit to manufacture computers in the country, a source close to the plans said on Monday.

The source, who declined to be named, said Dell would soon announce the setting up of its fourth call centre in Asia's third-largest economy. At the moment Dell employs about 10,000 workers in India.


----------



## Bushroda

*'India may become a leading foodgrain exporter'*
PTI[ WEDNESDAY, MAY 16, 2007 06:10:17 PM] 

NEW DELHI: India can emerge as a leading foodgrain exporter in global market if only farmers in other parts of the country could match the yield levels of Ludhiana district of Punjab. 

With 4.61 tonnes per hectare, which is double the national average of around two tonnes per hectare, Ludhiana has topped the districts in foodgrain output per hectare. 

While chairing the meeting of Planning Commission on Monday, Prime Minister Manmohan Singh said agricultural yields can be increased by 40-100 per cent in the next 3-4 years by focusing on yield gap reduction and expanding the area of cultivation. 

Commenting on the high productivity in Ludhiana, Joint Director, Department of Agriculture Punjab, Gurdial Singh said, "The soil quality, irrigated facilities backed by research and extension efforts of Punjab Agricultural University in the district have played a crucial role in making Ludhiana as country's top district in foodgrain yields." 

In fact, Ludhiana tops the list with 4.61 tonnes foodgrain output per hectare closely followed by Fatehgarh Sahib district (in Punjab) that produced 4.32 tonnes a hectare in 2005-06. 

A Planning Commission committee headed by C H Hanumantha Rao, which recently submitted its report, has recommended that public investment in agriculture should be increased to 4 per cent of GDP from the present level of less than two per cent to raise productivity.


----------



## Bushroda

*Global funds to invest $14 bn via Indian funds*
2007-05-16 20:19:17 Source : Moneycontrol.com

Foreign real estate funds have found a new way to play the Indian real estate game. Up to USD 14 billion has been raised globally for the Indian property market over the past two years, of which, only 20-25% has actually been invested, reports CNBC-TV18.

Newer global funds are now preferring to hand over their investments to local funds to manage and place their billions, rather than investing directly into projects. 

Multi-billion dollar funds like Mitsubushi, Shinco, Rockstone and Al-Futtaim are set to enter India through domestic property funds of ICICI Ventures, Kotak and HDFC.

Arvind Khanna, COO, Beekman Helix India Consulting, said, âWe have been approached by a few people and it is very possible that 14-15 such funds are there. At last count 80-100 funds had raised money for the Indian real estate market; so it will not surprise me if a lot of them just raised money with no capability on the ground. But they cannot find the right projects and now, when the market is going down a little, they are having a tough time because of the high returns they have promised their investors.â

Domestic realty funds will charge a management fee of between 2-4% and the foreign fund will also pay 20% of the profit received on every investment as a carry or operating fee. While the international fund has the right of co-investment in every property, this gives the domestic fund more money to play with, while allowing the global fund to independently invest more in an identified project if the developer needs more finance. 

With the property market in a correction mode, global funds wanting to invest in India seem to have found the way out. Clearly, the government's intention to curb foreign funding of real estate seems to be having little impact, as global money remains bullish on India.


----------



## Bushroda

*Fresh Find: Indian mango crop makes its way to Pittsburgh tomorrow*
Thursday, May 17, 2007

By Shamim Ashraf, Pittsburgh Post-Gazette
--------------------------------------------------------------------------------

The long wait for supple-fleshed and intense-flavored Indian mangoes is going to be over as the "king of Indian mangoes" Alphonso and saffron-skinned "Kesar" mangoes are expected to hit Pittsburgh markets for the first time tomorrow.

"We're struggling to manage the crowd. Besides coming to our shop in person, people are calling the whole day to know when the mangoes are coming," said Nikunj Patel, manager of the Monroeville store of Patel Brothers, an Indian chain, who seemed to be enjoying the thought of lucrative sales in the coming days.

Pittsburghers are going to have a taste of these most-sought-after mangoes from India, the world's largest mango producer, three weeks after the Indian mangoes made their way into the United States.

Indian exporters have had to wait since 1989, when they first sought permission to be able to ship mangoes here. The U.S. Department of Agriculture had concerns about pests.

In January 2006, the department allowed importation of fruits treated with low doses of irradiation for killing or sterilizing insects, but it took more than a year to complete the agreements, rule-making and inspections. Final approvals were issued on April 26.

"Working on their DNA, gamma radiation sterilizes mango seed weevil and fruit flies so those cannot reproduce. It, however, is not absorbed by the fruits, which remain safe for human consumption," said Dr. Bhaskar Savani, a dentist who spent the past three years lobbying U.S. officials to allow export. His family grows mangoes in Gujarat, India.

His Savani Farms of Chalfont, Bucks County, brought in 90 boxes of Alphonso and 60 boxes of Kesar mangoes on April 27 in the first legal shipment to John F. Kennedy Airport in New York. The U.S.-India Business Council on May 1 hosted a mango celebration in Washington, D.C..

Primarily, importers are bringing in only Alphonso, a bright yellow mango with a pink blush to its skin and multiple aromatic overtones, and Kesar, a sweet-tasting golden-colored mango with green overtones.

Mr. Savani said they are also pondering importing other varieties such as Baganpalli, Dashheri, Langra and Chausa if there is demand.

Since the mangoes have to travel half the world, they will be much more costly than those imported from Central and South America.

"While we sell a box of Hayden or Kent varieties at $7.99, a box of a dozen Alphonso or Kesar is going to cost $35 to $40," Mr. Patel said, adding that a popular variety from Haiti, known as Haiti mango, does not cost more than $11.99 a box. A box usually contains 12 fruits.

The importers are shipping mangoes by air to cut delivery time to a day. But Dr. Bhaskar said they plan to experiment with shipping by sea, which will take as long as three weeks, but reduce the price.

Those who know how the mangoes taste are not worried about the price, said staff at Patel Brothers in Monroeville.

"People are turning up for advance booking but we have to refuse them as it is against our policy," said Mr. Patel, who said most customers are Indian and Pakistani.

Chicago-based Raja Foods is also importing Indian Alphonso and Kesar mangoes and working as a distributor for Savani's mangoes.

"We so far have two commercial shipments and are now distributing the mangoes to Patel Brothers and other Indian grocers mainly in New York and New Jersey," said Parixit Patel, manager of Raja Foods.

Nikunj Patel of Patel Brothers in Monroeville, who twice drove back from New York stores "empty- handed," said customers' "starving" demand cannot be met. "They just don't care what the price is, because they know the difference."

Some grocers in Pittsburgh, however, think the price -- $3 or more a piece -- will be an issue.

"I am not sure whether it will be a good business. It's not a city like Washington, D.C.. or New York; people may not want to pay so much here," said Niten Sharma of India Mart, a grocer on Greentree Road.

He said some other local grocers also are yet to decide.

According to the U.S.-India Business Council, India harvests 12 million metric tons each year but accounts for less than 1 percent of the global mango trade. Dozens of different types are grown commercially, everywhere from Australia to Israel to Venezuela.

America's taste for mangoes is growing -- with U.S. demand 99 percent dependent on imports, mostly from Mexico and South America -- at 250,000 metric tons annually, valued at $156 million. By contrast, in 2005-06, India exported 58,000 metric tons of mangoes to neighbors in Asia and to Europe.

The agreement allowing export of mangoes to the United States was a side note to the nuclear treaty signed last year by President Bush and Indian Prime Minister Manmohan Singh and is emblematic of a push to deepen two-way trade from $30 billion to $60 billion over the next two years.


----------



## Bushroda

*India needs infrastructure spend of 8pct/GDP - official*
May 16, 2007

NEW DELHI (Reuters) - India must raise the share of investment in infrastructure to 8 percent of gross domestic product by 2011/12 from less than 5 percent now to sustain high growth, a senior government official said on Wednesday.

India's Planning Commission has set a target of an average annual growth rate of 9 percent from 2007 to 2012, for which the country requires $1 trillion investment across various sectors.

Infrastructure alone is estimated to need $320 billion in this period.

"Investment in infrastructure is less than 5 percent of GDP. This should rise to 8 percent by 2011/12," said Montek Singh Ahluwalia, the deputy chairman of the planning panel that provides key economic guidance to the government.

"If we are seriously planning a 10 percent GDP growth, we need much more investment," Ahluwalia told a construction conference.

India's GDP is estimated to have expanded 9.2 percent during fiscal year to March 2007, taking it close to $1 trillion.

Analysts and research agencies expect growth to moderate to about 8.0-8.5 percent in 2007/08 due to the impact of monetary tightening in the early part of 2007.

"High interest costs will have an impact at the end of the day," Ajit Gulabchand, chairman of Hindustan Construction Co. Ltd., told reporters at the conference.

"There is also a talent shortage in engineering and construction industry," Gulabchand said.

Economists say one of the key obstacles to sustained high growth for India is the number of bottlenecks in its infrastructure. Ports are overcrowded, airports are overcrowded and most of the country faces regular power shortages.

The engagement of private players in infrastructure projects would reduce the burden of government, K.V. Rangaswami, a senior official of engineering and construction firm Larsen & Toubro Ltd., said on the sidelines of the conference.

But the government had to make available land and other facilities for infrastructure projects, he said.

In addition, high prices of commodities like cement would also impact construction activities, he said.


----------



## Bushroda

*India challenges booming Chinese drives market*

While the Chinese drives market may be expanding at an annual rate of up to 40%, it faces a growing challenge from India, says a new study.

Last year, the Chinese AC and DC drives market was worth $463m, but it faces potential challenges, says the market analyst IMS Research. For example, a devaluation of the Yuan could slow the booming export market, while a crippled banking system, large amounts of public debt, and escalating property prices, are likely to slow public spending on large infrastructure projects.

At the same time, India is posing a increasing challenge, especially as the Indian Government has recently lifted the cap on foreign ownership of local firms to 75%, and has committed more funding to infrastructure projects. IMS forecasts that the Indian drives market will have an annual growth rate of 13.3% over the coming four years.

The growth of the Chinese drives market has been driven largely by the influx of investment by foreign drives-makers. Five of the 11 largest drives suppliers in the Asia-Pacific market are now from Europe or North America.


----------



## Bushroda

*India plans to join ranks of chipmakers* 

SEOUL: Having carved a niche in global software development and services outsourcing, Indiaâs search for the next big thing in high-tech could see it take on the rest of Asia in the crowded chip manufacturing market. 

Semiconductor firms such as Intel Corp, Advanced Micro Devices Inc and Freescale Semiconductor Inc. have already tapped India for chip design, but not manufacturing. 

New government incentives to boost chip making, coupled with Indiaâs low labour costs and surging demand for electronic goods from a fast-growing middle class, could change that. 

âIndia would be the only country in the world with robust models in chip design, chip manufacturing and electronics manufacturing,â said Poornima Shenoy, president of lobby group India Semiconductor Association. 

In March, Hindustan Semiconductor Manufacturing Corp, which is backed by a group of Indian investors based in Silicon Valley, announced plans to build two chip-making plants in India for up to $4.5 billion using technology from Germanyâs Infineon Technologies AG 

âOur focus is clearly the Indian market, although we plan to export out of the country as well. 

The growth in mobile phones and computers has enabled the demand for chips,â said Deven Verma, chairman of Hindustan Semiconductor Manufacturing. 

Mobile phone subscribers in India rose 68 percent in March from a year earlier to 166 million. Still, only about 15 percent of Indiaâs 1.1 billion people own a mobile phone, compared with around 35 percent in China. 

âThe global demand for chips will always go through a cycle of oversupply and shortages, but the potential in India is going to be huge in the years to come. Whether we make it or not, India will continue to buy chips,â Verma said. 

Consumption surge: India spent about $2.8 billion on semiconductors in 2005, and demand is estimated to exceed $36 billion by 2015, according to a study by the India Semiconductor Association and research and consultancy firm Frost & Sullivan. 

Furthermore, the study says electronic equipment consumption should surge to $363 billion by 2015, more than 10 times spending of $28.2 billion in 2005. 

âIt is just an enabler that was badly required for the semiconductor industry to take off in India,â Alok Ohrie, managing director of AMD India, said of the government push. âIt will help establish semiconductor manufacturing in India.â 

AMD is a technology partner to the local SemIndia consortium, which has said it planned to set up a chip-making facility in India with an investment of $3 billion over the next five years. But some investment may have already passed India by. 

Intel, the worldâs largest chip maker, said last November it was waiting for India to form its semiconductor policy before deciding on plans to begin manufacturing. In March, Intel said its first semiconductor plant in Asia would be built in China. 

Texas Instruments Inc, the worldâs biggest maker of mobile chips, said earlier this month it will build a $1 billion plant in the Philippines a move that signals the entry of semiconductor companies into new low-cost countries. 

South Koreaâs Hynix Semiconductor Inc. will consider emerging markets like India to set up a manufacturing facility in the future as part of its global expansion strategy, its senior vice-president O.C. Kwon told the Reuters Global Technology, Media and Telecoms Summit. 

Tough competition: One difficulty the industry faces is that India does not spring to mind as a manufacturing destination in a very competitive sector with established Asian rivals, because of inadequate infrastructure and archaic labour laws. 

âIt is easy for any company to imagine manufacturing in Taiwan or China or even Japan today,â said Ajay Marathe, chief operating officer of SemIndia. 

âIndia as a manufacturing hub of the future, however, needs some wisdom. This wisdom has to do with the understanding of the exploding Indian market and exponentially growing middle class with sizeable disposable income,â he said. 

Analysts say interest in India would be fuelled by a growing appetite for electronic goods such as computers, mobile phones, and digital televisions that currently use imported chips. 

At the moment such chips may very well have been designed in India, because, while it lags in chip manufacturing, it has made big strides further up the value chain. 

Indiaâs semiconductor design industry had revenues of $3.3 billion in 2005 and employed about 75,000 people. That is expected to increase to $43 billion in revenue and over 780,000 employees in 2015, the India Semiconductor Association said. 

In February, Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the worldâs top contract chip maker, opened an office in Bangalore to support its customers with design activities in India. STMicroelectronicsâ Indian chief told Reuters in February that headcount in its Indian chip design centre would be raised to 3,000, from 1,700 now, in the next three years. 

âIf India can do the chip design work, it can take care of the manufacturing part as well, especially when labour costs in India are still 10-12 percent lower than China,â said Y S Sashidhar, vice-president at Frost & Sullivan. reuters


----------



## Neo

Thursday, May 17, 2007 

*India plans to join ranks of chipmakers *

SEOUL: Having carved a niche in global software development and services outsourcing, Indiaâs search for the next big thing in high-tech could see it take on the rest of Asia in the crowded chip manufacturing market. 

Semiconductor firms such as Intel Corp, Advanced Micro Devices Inc and Freescale Semiconductor Inc. have already tapped India for chip design, but not manufacturing. 

New government incentives to boost chip making, coupled with Indiaâs low labour costs and surging demand for electronic goods from a fast-growing middle class, could change that. 

âIndia would be the only country in the world with robust models in chip design, chip manufacturing and electronics manufacturing,â said Poornima Shenoy, president of lobby group India Semiconductor Association. 

In March, Hindustan Semiconductor Manufacturing Corp, which is backed by a group of Indian investors based in Silicon Valley, announced plans to build two chip-making plants in India for up to $4.5 billion using technology from Germanyâs Infineon Technologies AG 

âOur focus is clearly the Indian market, although we plan to export out of the country as well. 

The growth in mobile phones and computers has enabled the demand for chips,â said Deven Verma, chairman of Hindustan Semiconductor Manufacturing. 

Mobile phone subscribers in India rose 68 percent in March from a year earlier to 166 million. Still, only about 15 percent of Indiaâs 1.1 billion people own a mobile phone, compared with around 35 percent in China. 

âThe global demand for chips will always go through a cycle of oversupply and shortages, but the potential in India is going to be huge in the years to come. Whether we make it or not, India will continue to buy chips,â Verma said. 

Consumption surge: India spent about $2.8 billion on semiconductors in 2005, and demand is estimated to exceed $36 billion by 2015, according to a study by the India Semiconductor Association and research and consultancy firm Frost & Sullivan. 

Furthermore, the study says electronic equipment consumption should surge to $363 billion by 2015, more than 10 times spending of $28.2 billion in 2005. 

âIt is just an enabler that was badly required for the semiconductor industry to take off in India,â Alok Ohrie, managing director of AMD India, said of the government push. âIt will help establish semiconductor manufacturing in India.â 

AMD is a technology partner to the local SemIndia consortium, which has said it planned to set up a chip-making facility in India with an investment of $3 billion over the next five years. But some investment may have already passed India by. 

Intel, the worldâs largest chip maker, said last November it was waiting for India to form its semiconductor policy before deciding on plans to begin manufacturing. In March, Intel said its first semiconductor plant in Asia would be built in China. 

Texas Instruments Inc, the worldâs biggest maker of mobile chips, said earlier this month it will build a $1 billion plant in the Philippines a move that signals the entry of semiconductor companies into new low-cost countries. 

South Koreaâs Hynix Semiconductor Inc. will consider emerging markets like India to set up a manufacturing facility in the future as part of its global expansion strategy, its senior vice-president O.C. Kwon told the Reuters Global Technology, Media and Telecoms Summit. 

Tough competition: One difficulty the industry faces is that India does not spring to mind as a manufacturing destination in a very competitive sector with established Asian rivals, because of inadequate infrastructure and archaic labour laws. 

âIt is easy for any company to imagine manufacturing in Taiwan or China or even Japan today,â said Ajay Marathe, chief operating officer of SemIndia. 

âIndia as a manufacturing hub of the future, however, needs some wisdom. This wisdom has to do with the understanding of the exploding Indian market and exponentially growing middle class with sizeable disposable income,â he said. 

Analysts say interest in India would be fuelled by a growing appetite for electronic goods such as computers, mobile phones, and digital televisions that currently use imported chips. 

At the moment such chips may very well have been designed in India, because, while it lags in chip manufacturing, it has made big strides further up the value chain. 

Indiaâs semiconductor design industry had revenues of $3.3 billion in 2005 and employed about 75,000 people. That is expected to increase to $43 billion in revenue and over 780,000 employees in 2015, the India Semiconductor Association said. 

In February, Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the worldâs top contract chip maker, opened an office in Bangalore to support its customers with design activities in India. STMicroelectronicsâ Indian chief told Reuters in February that headcount in its Indian chip design centre would be raised to 3,000, from 1,700 now, in the next three years. 

âIf India can do the chip design work, it can take care of the manufacturing part as well, especially when labour costs in India are still 10-12 percent lower than China,â said Y S Sashidhar, vice-president at Frost & Sullivan. reuters

http://www.dailytimes.com.pk/default.asp?page=2007\05\17\story_17-5-2007_pg5_9


----------



## Bushroda

Neo said:


> Thursday, May 17, 2007
> 
> *India plans to join ranks of chipmakers *
> 
> SEOUL: Having carved a niche in global software development and services outsourcing, Indiaâs search for the next big thing in high-tech could see it take on the rest of Asia in the crowded chip manufacturing market.
> 
> http://www.dailytimes.com.pk/default.asp?page=2007\05\17\story_17-5-2007_pg5_9



Redundant post Neo, guess I beat you in reporting


----------



## Bushroda

*Investing in China and India better than BRIC* 
Thursday, 17 May 2007 17:24 

*China and India are a better bet for people investing overseas than the other half of the BRIC emerging markets sector - Russia and Brazil. *

And that means investors would be better off concentrating their money there, rather than in a more traditional BRIC fund. 

That is according to Jersey-based investment house Ashburton, which highlights the demand driven nature of the Asian countries as giving them the edge. 

Chinese and Indian equities have performed well in the first half of 2007, with firms returning robust earnings and strong growth forecasts. Currency appreciation and liquidity flows from foreign and domestic money in search of performance have also supported this growth. 

"The main reason for the appeal is the Chinese and Indian economies are driven by a combination of positive demographics and consumption growth, and offer an attractive long-term investment opportunity that is both substantially different and complementary to that offered by resource based economies," said Craig Farley, one of Ashburtonâs Asia Pacific specialists. 

"Given the recent commodity bull market, a lot of private investors will have built up sizeable weightings to the resource sector through both specialist holdings and global equity portfolios. 

"Targeting 'China and India' allows them exposure to one of the driving forces behind the global economy at the moment without further increasing their direct exposure to commodities, as would be the case through a BRIC fund." 

However, he believes there could be a correction on the horizon in China with government measures to cool the Indian economy also possible. 

But when put in context of longer-term trends this does not overly concern. 

"Chindiaâs demographic profile is becoming younger, more literate and more urban, leading to greater productivity, rising incomes and increasing demand for goods and services," Mr Farley explained.


----------



## Bushroda

India emerging as a global doctor

[YOUTUBE]




Another video

[YOUTUBE]


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## Bushroda

AFX News Limited
*Sun Microsystems eyes Indian retail, healthcare sectors for growth*
Forbes 05.18.07, 5:26 AM ET

BANGALORE (Thomson Financial) - US technology giant Sun Microsystems Inc will focus on India's booming retail, healthcare and financial services industries to tap the world's second-fastest growing economy, co-founder and chairman Scott McNealy said.

India is already the 'fastest growing non-US geography' in terms of revenue for the Santa Clara-based maker of computer servers, McNealy told reporters in Bangalore, known as India's Silicon Valley.

'It won't stop growing as long as you keep cranking out engineers,' said McNealy, whose company's Java technology is used by 3.5 million Indian software developers.

The next phase of growth in India for the company will be powered by industries such as retail -- which he said will head for a shakeout as large supermarket chains expand -- as well as healthcare and financial services, the government sector and Internet companies.

'We'll move as fast as the market here will allow us,' said McNealy, who co-founded Sun in 1982.

In India, Sun's Java technology is used by sofware developers on more types of mobile devices, smart cards, cash machine-cards, personal computers and servers than any other software.

A study by two professors at the Indian Institute of Management-Ahmedabad found that Java-related services and products account for 2.1 pct of gross domestic product in India, whose economy is growing nine percent a year, the fastest after China.


----------



## Bushroda

*The boom region*
*India is in the race to catch up with international players in the tourism arena, says Bernd Kubisch*

India's tourism, aided not least by the country's sustained economic upsurge, continues to signal double-digit growth rates. In 2006, the Golden Triangle with the Taj Mahal, the beaches of Goa, the backwaters of Kerala, the temples of Mahabalipuram and the subcontinent's other attractions lured more visitors than ever before. 

What is making fewer headlines, although many other countries are feeling the benefit, is that the Indians are themselves travelling increasingly and spending more and more abroad. Many may be surprised to learn that already in 2005 roughly the same number of Indians visited Germany as Germans did the sub-continent - a good 1,30,000 people.

After hefty growth rates last year, the signs for inbound and outbound tourism point to continued growth in 2007. According to Bernhard Steinrucke, director general of the Indo-German Chamber of Commerce, India's international economic importance and importance for tourism continues to increase substantially. "The country is one of the world's most interesting boom regions," he said.

*Flourishing tourism with 4.4 mn guests*

India's economy is growing year-on-year at between eight to ten per cent, and foreign investments are rising. In 2006, foreign trade with Germany reached 10 billion Euro for the first time, according to the Chamber of Commerce in Mumbai.

Steinrucke lists India's advantages: a well educated middle class and many ambitious young people, particularly in the high-tech sector. These are now represented throughout the world in high positions. "Without the Indians" says the economics expert, "Silicon Valley would have to close down."

When the economy is booming, tourism also grows, says Ashok Kumar Mishra, secretary at the ministry of tourism in India. But he believes that the country's advertising campaigns, too, are playing their part, as are many public and private initiatives. According to a forecast by the World Travel & Tourism Council (WTTC), over the next 10 years Indian will be among the fastest growing countries in the world, with an annual growth rate of 8.6 per cent. "Our current growth rates in tourism exceed this," says Mishra. Tourism, in the ministry's view, has also benefited particularly from the liberalisation of aviation and easing of regulations on foreign investment. In 2006, 4.4 million guests from around the world visited the subcontinent, an increase of 13 per cent, according to the World Tourism Organisation (UNWTO). Giriraj Singh Kushwaha, Europe director of Indiatourism in Frankfurt, reported that the number of guests arriving from Germany last year climbed from 1,30,000 to an estimated 1,40,000, and he is optimistic that this upward trend will continue in 2007.

*Successful rivals are waiting *

Whatever the jubilation at this growth, one of the reasons why tourism is booming now is the country's failure in the past to advertise its attractions abroad. For a long time the tourism industry was like Sleeping Beauty, waiting to awaken from a long sleep. The focus was on developing the agricultural sector and industry. Holidaymakers who visited Maharashtra, Kerala, Tamil Nadu and Orissa 20 years ago, for example could scarcely believe how few foreign guests they encountered in this fascinating country.

India's tourism figures have not yet put it among the leaders in Asia. The competition is not lying dormant and a number of rivals are already enjoying great success. India is currently recording only about a third of the number of foreign visitors that Thailand receives and has fewer visitors than South Korea (Republic of Korea). Differentials in value added and income between India and the Republic of China or Japan continue to be very large. According to UNWTO, the People's Republic of China leads the field in Asia with just under 50 million arrivals in 2006.

*International recognition for Incredible India*

According to the World Tourism Barometer published by UNWTO in Madrid in February, the Incredible India campaign has contributed to the steady rise in the country's profile and has had a positive effect on stimulating demand. It lists improved tourism products, the expansion of aviation and the many new low-cost carriers as other reasons for success. According to UNWTO, spending by tourists in India rose from US$ 6,170 billion in 2004 to US$ 7,478 billion in 2005. There was a 19 per cent increase up to September 2006.

*Expansion of hotel and airport capacity*

High growth rates alone are not everything. India's tourism minister, Ambika Soni, is anxious to avoid frantic growth to ensure that the infrastructure including the transport system and hotels can keep pace with demand. Kerala is a case in point. The efforts of the regional tourism authority to showcase the state on the Arabian Sea around the world as a must-see destination continue to be successful. 

But initially the number of guests grew faster than the number of hotel rooms. In some places there were not enough rooms to cope with demand. Two years ago the regional press reported that marketing successes could create problematic situations. Currently the number of midrange and luxury class hotel rooms in Kerala is increasing by 15 per cent a year, according to Jose Dominic, president of the Kerala Travel Mart (KTM) Society. Anyone landing at Thiruvanathapuram International Airport a few months ago could see that the airport was operating at full capacity. Today, expansion of hotels and roads is progressing with airport privatisation speeded up.

*Training for taxi drivers, travel guides*

According to the motto of its campaign, which in Sanskrit reads 'Atithi Devo Bhava' - guest is god, the tourism ministry in New Delhi wants workers in the sector to treat customers better than kings. Over 26,000 taxi drivers, travel guides and restaurant managers are being specially trained in hospitality, with the first phase of the training being staged in cities such as New Delhi, Mumbai, Jaipur and Goa. Over six per cent of India's workforce now works in the tourism industry. The government is also supporting the creation of jobs in rural tourism through local crafts, traditional folklore and culture. It is hoped that by 2010 a total of 25 million new jobs will have been created in tourism, according to a report by the eTurboNews media service in New Delhi.

*Indians are coming* 

With a population of over 1.1 billion people and GDP growth of over eight per cent per year, India, as Nancy Cockerell, The Travel Business Partnership's editorial director told a PATA workshop in Hong Kong in September 2006, offers enormous potential for future growth of outbound travel. By as early as 2008 it is likely that Indians will be spending more than four billion US dollars on foreign travel. The country's middle class is an estimated 300 million. And, said Cockerell, these people are beginning to demand higher quality when they travel. Steinrucke says, "For Germany, too, the country is becoming an increasingly important source market". According to figures from DZT, the German National Tourist Board, some 1,31,000 Indians made business trips to or visited friends and family in Germany in 2005, making Germany the second most important market in Europe after Great Britain (272,000 arrivals). DZT figures indicate that they stayed an average of 11 nights and spent 121 Euros per day.

*Growth of air travel *

The Indian air travel market is defined by growing competition and more low-cost carriers as well as mergers of airlines. At the same time international airlines are considerably expanding their routes. The national carriers, Air India and Indian, which are to merge, offer lower prices, for example, to Great Britain and Thailand. In each case it is the customer who benefits. 

Airports, airlines and fleets have been considerably enlarged and modernised, Robert J Aaronson, director general of Airports Council International (ACI), said. The fleet of airlines, he reported, currently numbers 270 aircraft; 480 are to be delivered and brought into service within the next seven years. Aaronson also quoted an example of this breakneck growth: in August 2004 there were 34 non-stop services between India and Great Britain each week. Two years later, in August 2006, the figure had risen to 121.

Air traffic between Germany and India is also experiencing tremendous growth. The number of Lufthansa flights almost tripled between 2000 and 2007. Spokesman Boris Ogurksy says, "We now have 45 non-stop flights from Frankfurt and Munich to India a week, more flights between Europe and India than any other carrier." The German airline now flies to six destinations: Mumbai, Delhi, Hyderabad, Bangalore, Chennai and Kolkata. 

"Lufthansa has plans for further expansion in India", says Ogursky. "The market has a lot of potential. Since 2004 Lufthansa and Air India have offered customers 402 flights a week under a codeshare arrangement." Lufthansa, he reports, regard the merger of Air India and Indian positively since it will strengthen their position in the Indian market. Sri Lankan Airlines, too, is looking to increase its services to its neighbour in the course of the year to over 100 flights a week, according to Nicky Samarasinghe, its director for Germany and Italy. The airline currently serves 10 destinations in India. It hopes that new destinations in the schedule such as Goa will encourage travellers from Germany to fly to India via Colombo.

*The wealthy and pensioners are coming *

The first hippies arrived in India's smallest state on the Arabian Sea in the sixties, the first German package tourists in the eighties. Since then countless Bollywood stars have been building luxury villas in Goa. Today Condor planes are also full of pensioners who spend a few winter months there to take advantage of the agreeable climate and favourable prices. "Since Condor is the only airline in Europe to offer non-stop flights to Goa, the demand from international guests too is very high," says spokeswoman, Nina Dumbert. The company flies there twice a week. "Tourism has become the most important branch of our economy," says Goa's deputy tourism director, Pamela Maria Mascarenhas.

Further north in the state of Maharashtra with its metropolis Mumbai and the centre of the Bollywood film industry, things are more businesslike and brisk. Bhushan Gagrani, managing director of Maharashtra Tourism Development Corporation, is seeking to ensure that visitors to the big city and business guests get to know the attractions of the surrounding area. "Today there is better co-operation between state bodies and the private sector. We are working well together. In some places there is a shortage of new hotels," says the director, who wants to further open up the 720-kilometre coastline and 400 or so historic forts to tourism.

*Luxury hotels in demand* 

Luxury tours are much in demand today, including round trips in the north and in the Himalayas with night stops in palace hotels, as well as exclusive trips by boat through the backwaters of Kerala, complete with cook and butler. In the Golden Triangle comprising the cities of New Delhi, Jaipur and Agra, demand has led to a shortage of good quality rooms.

German operators are also reporting that prices are rising. As of now, India has some 1,00,000 tourist class hotel rooms. To cover growing demand and to have a share of lucrative business, international hotel chains and brands such as Accor, Ibis, Regent, Radisson, Marriott and Shangri-La are planning new and additional investments. Homegrown companies too, like Oberoi and Taj Hotels, are expanding. "Competition is revitalising business and doing India good. We are very pleased with how well we are doing," says Gev Patel, director of sales at Taj Hotels Resorts & Palaces. The company, which is part of the Tata Group, has 73 hotels, 56 of them in India, and wants to expand further.

*Something for everyone*

India's strength is that there is something to suit every taste and every pocket. Even the ayurveda movement has long since embraced exclusivity. At Kalari Kovilakom in Kerala, for example, a maximum of 18 guests seeking purity and harmony for nature, body and soul are looked after by some 50 staff members. 

In the former maharajah's palace traditional ayurvedic healing therapies are offered as they have been for centuries. Dr Jouhar Kanhirala, a doctor at the centre, reports that German tourists in particular are interested in authentic treatments both there and in India in general. One day at Kalari Kovilakom can cost up to US$ 400.

Ginger Hotels, part of the Taj Group, is a new chain established for businesspeople and cost-conscious travellers which offers rooms from as little US$ 25. In Periyar Park in Kerala, home to tigers and elephants, many families offer home-stays, benefiting from a tax exemption if they rent out fewer than six rooms. "This brings us all extra income," says Sujatha Murali who offers five rooms in her Mickey's Cottage at prices starting at US$ 10.

*Quicker visas*

If it were not for the fact that most of India's source markets are subject to a visa requirement, tourism growth rates might look quite different. "The average tourist spends around US$ 2,000 in India," says R Parthiban, director of Swagatham Tours & Travel. Tourists canceling their trip because of visa problems, he says, mean financial losses for travel agents, incoming operators and the Indian economy. Tourism minister, Ambika Soni, wants to ensure that tourists do not have to wait longer than 36-48 hours for their visa. She also told Kerala Travel Mart (KTM) 2006 that multiple visas would be issued to promote travel to India.

*German operators are positive* 

TUI reinstated India in its winter programme two years ago. "Currently bookings are still lagging behind our expectations, but we can certainly see potential in this multi-faceted country," reports spokesperson, Alexa Huner. Air tours product manager, Jordis Scherer, reports that luxury hotels in the north as well as the new wellness hotels and luxury safari lodges are particularly popular.

Meanwhile, Gebeco claims an upward trend in bookings for India trips and expects this to continue in 2007. Less well-known regions are to be added to the programme to tempt returning guests. One of the areas India is focusing on is religious and health tourism. "There is still a lot of potential for trips to famous sacred places in our country, as well as stays including affordable treatments and operations in international standard clinics," says Dr Singh Sikand, tourism advisor and lecturer in religious tourism at the Universities of Frankfurt am Main and Mainz.


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## Bushroda

*India: Land of promise*

Going by the way the world is looking at India and tracking down it's every move across sectors and industries, one can easily conclude that 'India' is the latest 'catch-word' or should we say 'cash-word' for growth. The Indian aviation sector is no exception and top of the line on the radar of the global aviation business. 

According to aviation experts, India would require 1,000 aircrafts in the next 12 to 13 years, while passenger traffic would go up six times, from 32 million to 180 million, with investment opportunities in airports and infrastructure estimated to rise to around US$ 120 billion. Speaking about India's aviation potential, Praful Patel, minister for civil aviation, Government of India, said, "Aviation acts as a catalyst in integrating the world. The last few years have seen new impetus in aviation as it facilitates economic growth, equitable development and generates employment. India has seen a 25 per cent annual compounded growth in three years with a 50 per cent growth in the domestic sector and 20 per cent in the international sector. India has a total of approximately 300 aircrafts now and the number of air travellers come to about 0.8 per cent of the population. By the time even 10 per cent of the population begins to fly, we will need about 5,000 aircrafts." He further added that India for the next 10 years would enjoy a compounded growth of about 25 per cent in the aviation sector, which will be sustained for the next 10 to 15 years. He attributed the reason for this growth to the liberalisation of the regime and the proactive bi-laterals which have minimised restrictions in the free flow of passengers. 

According to civil aviation ministry estimates, Indian airports are likely to handle 400 million passengers per annum by 2020. The projections for Mumbai are similarly huge. Mumbai is expected to handle 91 million passengers by 2030-31, from the current 20 million. According to government sources, the proposed Navi Mumbai International Airport would cost around Rs 4,235 crore and will be run on a public-private partnership basis through an SPV. While the Airport Authority of India and Maharashtra's City and Industrial Development Corporation will jointly hold 26 per cent in the SPV, a private partner is expected to retain the balance 74 per cent. 

*The US interest *

Taking this cue and to further promote greater collaboration between the US and Indian aviation sectors, US Trade and Development Agency (USTDA), in partnership with the US Federal Aviation Administration (FAA), lead by Marion C Blakey, administrator, FAA and the ministry of civil aviation (MOCA), Government of India, sponsored the first ever US - India Aviation Partnership Summit, in New Delhi from 23rd to 25th April, 2007. The three-day event, sought to encourage high-level dialogue between US and Indian government officials and private sector representatives on the development of India's aviation sector and the growing relationship between the two nation's industries and governments. Addressing the conference, US Federal Aviation Authority (FAA) chief Marion C Blakey said there was great potential for a bilateral aviation safety agreement (BASA) and emphasised that though the formal negotiations and signing may take several years, the process of building mutual confidence in our respective certification processes and technical expertise is something that can and should start today.

Apart from the government and trade officials, the summit was attended by leading American aviation firms. The US India Business Council (USIBC) chairman's circle members, Federal Express, Boeing, General Electric, Northrop Grumman, United Technologies, Pratt & Whitney, Lockheed Martin, Honeywell, Continental Airlines were represented by their respective senior executives. "The civil aviation industry in India is a dynamic multi-billion dollar opportunity for 'American Companies', said Ron Somers, president, US-India Business Council, "and this boom is creating new jobs and spurring the development of enhanced infrastructure in India."

"USTDA is focusing significant attention on India's aviation sector because we are interested in exploring ways to help our aviation systems grow together in mutually beneficial ways," said USTDA deputy director Leocadia I Zak. "Working in partnership with each other, we can achieve results that will shape the future and strengthen our respective systems." The extraordinary growth of India's economy has placed increased demands on the nation's aviation infrastructure to accommodate rising passenger and cargo volumes. As a result, India is facing enormous infrastructure development challenges as it strives to further enhance air service quality, airport efficiency, flight security, and air-space management.

Recognising the potential for further cooperation between the United States and India in the aviation sector, USTDA initiated a Memorandum of Understanding (MOU) with the ministry of civil aviation, (MOCA), Government of India at the summit to establish the US - India Aviation Cooperation Program (ACP). The MOU was initiated by Zak and MOCA joint secretary R K Singh, on behalf of the US and Indian governments, respectively, in a ceremony following the opening plenary.

The ACP consists of a public-private partnership between USTDA, the FAA and many US aviation companies that will serve as a mechanism through which Indian aviation sector officials can work with US civil aviation representatives to highlight specific areas for bilateral technical cooperation. Initially, the ACP is expected to focus on activities that support air traffic/air space management enhancements and the challenge of rapidly increasing aviation traffic in India. Specific plans for upgrading the aviation sector are outlined in India's Policy on Airport Infrastructure, in which MOCA states that the establishment of a technologically advanced and systematically reliable air traffic control system is a key priority. Other objectives include expanding airport facilities, installing airport security and monitoring systems, establishing an information technology network to synchronise airport operations, and enforcing airworthiness certification and regulatory systems. To promote a discussion between representatives of the US and Indian aviation sectors regarding industry growth opportunities and challenges, the summit included sessions on air traffic management and airspace utilisation, and the promotion of commercial collaboration in the development of new airborne systems.

The US - India Aviation Partnership Summit took place in cooperation with the Airports Authority of India (AAI), the Directorate General of Civil Aviation (DGCA), the US Departments of State and Commerce, the US Commercial Service, and the Confederation of Indian Industries (CII). 

*Reality check: Getting the house in order*

Though the aviation sector of India is flying high, fortunately India's leaders and decision makers have their feet firmly on the ground. The civil aviation minister agreed that though on one side the opportunities are big in this sunrise sector, where the principles of an open economy will be followed, the other side is the bitter reality of poor infrastructure which is an issue of concern. But he also added that the government is working hard towards getting the systems in place and hence a partnership summit of such nature will only help improve the situation. "We can learn from other countries and apply their systems, practices and expertise in such a way that can enhance and strengthen the Indian aviation scenario and upgrade it to a world class standard," he said.

The modernisation of the Mumbai and New Delhi airports on the public-private partnership model is a positive sign and set towards India's progressive aviation approach. The minister further added that the policies will surely evolve as per requirements in order to bring about positive changes and increase connectivity in a meaningful way. Added Patel, "The government plans on relaxing the FDI norms and there are plans that it may enhance the 49 per cent FDI limit in areas such as helicopter services, sea-planes and non-scheduled operations."

*Growth and safety: Siamese twins*

The first session on the summit emphasised on the role and importance of balancing aviation safety and growth. They both go hand in hand and cannot be separated from each other. Both evolve and mature in order to meet international standards. Moderated by Robert Francis II, former vice chairman US National Transport Safety Board, the session had eminent speakers, like Nick Sabatini, associate administrator for aviation safety, FAA, Kanu Gohain, director general, DGCA, Vivek Lall, managing director, Boeing India, Dr Agam N Sinha, senior vice president and general manager, The Mitre Corporation and Saroj K Datta, executive director, Jet Airways (India). Said Datta, "Aviation and economic growth are closely related and the cascading impact is much more pronounced in the airline industry. With expected sustained long term growth of the Indian economy, air travel market in India will continue to grow to realise its full potential. But for growth to be real one has to work on the following: Permission for private carriers to fly to international destinations, increase of Foreign Direct Investment (FDI) limit to 49 per cent (investment by foreign airlines is not permitted), initiation of measures to improve aviation infrastructure, quick implementation of modernisation of airports in Mumbai and New Delhi, development of greenfield airports, modernisation of 35 other airports and permission to hedge fuel prices for uplift at international destinations. 

Nick Sabatini mentioned that the four pillars of a safety management system are, 1) Policy 2)Safety risk management and design assessment, 3) Safety assurance and performance assessment and 4) Safety promotion. Vivek Lall, felt that to bring in the balance, cooperation between industry (manufacturers, airlines, IATA) and the government is vital. He also felt that recently, the industry's accident rate has improved considerably and the global nature of the aviation industry makes it impossible to put borders around safety issues. 

*Modernising strategies for airports (domestic and international)*

This session highlighted the strategies and work flow methods of few airports both in the US and India. Presentations were made on the Mumbai, New Delhi and Cochin international airports about the systems and structures and how these airports operate. 

Rudy Vercelli, COO, Mumbai International Airport said that the Mumbai airport is surely a challenge in itself and all we are trying to do now is maneouver around the infrastructure. Being the largest international airport in India and with 30 per cent of the total traffic, it needs to improve on infrastructure, passenger traffic handling and maintaining service standards.To cope with the increasing air traffic, the government has finally agreed on establishing a second airport at Navi Mumbai. 

Similary the Delhi airport is also on its way to a major revamp and will accommodate another terminal to cater to the increasing passenger loads. This new model is going to be tried out for recovery of charges from different sources like shopping malls and other such businesses which will account to non air collections, said Pradeep Paniker, head strategy planning group, Delhi International Airport.

Cochin International Airport (CIAL) is another feather in the cap when it comes to airports in India. The airport is the first greenfield airport in India. It is a sponsored project built on the public-private-partnership model and has over 10,000 shareholders from different countries. "The airport has been built at the lowest budget ever and because of this we are now planning to specialise in low budget airport building," said S Bharath, managing director, CIAL. "We are also being approached by many different countries for the same," he revealed.

He informed that they were also developing a new model for recovering revenue through non-aviation services like development of IT parks, entertainment parks, golf courses, hotels and townships.

D Kirk Shaffer, talked about the FAA Airport Technology Research and Development, which touched upon the following: 1) Airport planning and design, 2) New large aircraft, 3) Advanced airport pavement designs, 4) Runway surface operations, 5) Airport wildlife hazards abatement 6) Aircraft rescue and fire fighting and 7) Visual guidance and runway incursion reduction. 

*Air traffic management: Systems, opportunities and challenges*

This was probably one of the most talked about topics of the summit, especially keeping in view the Indian aviation scenario where air traffic management is the need of the hour and something that needs to be addressed with immediate effect. 

The first presentation of the day made by Jeff Williams, manager, RNAV/RNP group, Federal Aviation Administration Air Traffic Organisation, discussed the growing challenges due to increasing air traffic generating demands on air space. As a result this increases the costs of fuel and compelling infrastructure expansion, improvement and maintenance. He identified these as the three major challenges for the future ahead and introduced the performance based navigation (PBN) as a cost effective way at producing measurable improvements in flight safety, system capacity, operational efficiency and new or improved airspace access. 

For achieving the effectiveness of the PBN it is necessary for air traffic regulator agencies and stakeholders to work together in order to successfully implement Evolution of Area Navigation (RNAV) and Required Navigation Programme (RNP) capabilities in a country's airspace, he concluded.

Judy Marks, president, Lockheed Martin Transportation and Security Solution also emphasised on strengthening of ties between different agencies in order to cope up with the rapid growth in an attempt to make air travel safe and efficient. Making a next generation commitment she said that the interoperability and global harmonisation and integrated environment are the key focus areas. She also explained about the shared goals of safe separation, easy reliable travel and a secure environment. 

Focusing on future initiatives Marks said that the critical expansion and improvement of infrastructure and also decongesting the choke points like the secondary airports and the terminal domains is vital. Modernisation plans of strategic alliances, inter alliances, satellite based system and interoperability using oceanic procedures, automatic surveillance and communications data links will help change the scenario. According to Charles Keegan, director, Future Air Navigation Systems, Raytheon, the infrastructure is undervalued. The challenge being that the implementation of infrastructure is not due to lack of planning or standards but due to financing. He opted for public private partnership as the most viable model of growth. "Its minimised impact on customers and sponsors, operational relationship with the private party and the long term sustainability all make it a preferred solution. Financing is most necessary for ATC modernisation which is necessary for the future," he reiterated.

Giving details of the Indian plans for overcoming traffic management problems, program director - satellite navigation, Indian Space Research Organisation, Dr S V Kibe said modern Indian airspace would soon be operating with the Indian satellite navigation program - GAGAN. The ISNP-GAGAN to be launched in the year 2009 would be managed jointly by ISRO and AAI. This regional satellite navigation system will placed in the L-5 band to facilitate navigation. This SBAS (satellite based augmentation system) will serve all the airports within the area and also support other augmentation techniques like the ground-based and the aircraft-based techniques. It is one of the most concrete efforts of upper airspace management that will link aircrafts to each other without using the ground ATC.

The air traffic management, AAI, general manager, V Somusundaram discussed the challenges faced by air traffic service providers and on how to meet their demands. "Effective airspace management can help bring coordination in civil and military use of airspace. An automatic air traffic management will help optimum usage of airspace with optimum capacity, prove cost effective, provide flexibility in operation and encourage cooperative decision making," he concluded.

Technology is available to enhance capacity, efficiency, safety and security. Exploitation of the strengths of airborne and ground-based systems and the integration of both is the key. Global collaboration would accelerate system modernisation and a comprehensive and committed plan will encourage investment to achieve airport and ATC efficiency and capacity. According to Christopher Benich, director of Aerospace Regulatory Affairs, the key drivers for growth are: capacity enhancing mobility and economic and industry growth; efficiency decreasing environmental impacts; safety ensuring continuous improvement and growth without degradation and security neutralising threats . "There are different objectives for airport surface and airport terminal area operations and both can be achieved by using technology which will enable solutions across all domains, optimise functional allocation and increase global harmonisation. All these well defined technology based plans will reduce investment risk," he said.

Also addressing the need of traffic flow management and metering, David Rhodes., director, Advanced Air Traffic Solutions, Civil Group, Computer Sciences Corporation said that an effective system will help keep traffic moving securely and efficiently powered by automated strategies overcoming severe weather and congestion. "Efficiency can only be achieved by balancing customer needs with responsibilities and development of technology minimising ill effects on environment", he stated.

The two enabling technologies for traffic flow management (TFM) and for metering, Traffic Management Advisor (TMA) helps smooth air traffic flow by collaborative decision making and decision support and execution tool to help optimise flow into capacity constrained areas using time based metering, spacing and sequencing respectively.

The two technologies help in maximising throughput, minimising delay, efficient use of capacity and fuel, enhancing safety, reducing pollution, making reliable schedules and predicting block times.

*Aviation project development*

Looking at aviation project development through maximising non aeronautical revenue development at airports saw a strong interest from the audiences. Michael A Hodges, MAI, president, Airport Business Solutions presented the importance of these revenues as they reduce costs to airlines. The opportunities helping make such revenues could be the public private partnerships, non essential property development and internal service providers. Golf courses, driving ranges, commercial and retail developments, industrial parks, hotels and automobile dealerships are examples of such properties that help create revenue and reduce airline costs. Also providing financing options was Jessica Farmer, senior project officer, Export-Import Bank of the US who gave details on structured finance and project-based finance. 

*Mallya magic: Saying it as it is* 

In his keynote address, Vijay Mallya, CEO, Kingfisher Airlines stated that the increasing purchasing power, exposure, aspirations and willingness to spend is making the Indian consumer upgrade to better things in life. He said that the 350 million strong middle class anticipated to increase to 400 million in the next three years is posing a difficult challenge for the policy makers and infrastructure developers.

The policies of the government will have to under go a revamp to cater to this boom. He highlighted the fact that government policies with regards to permitting domestic carriers to fly international is completely lopsided. "Today if an airline can fly Mumbai-Chennai, why can't it fly Mumbai-Colombo, keeping all other conditions the same," he questioned.

*Airline management and operations in India*

On the concluding day, there was a meeting of leading names from the Indian airline business, namely V Thulasidas, chairman and managing director, Air-India, (who also moderated the session on airline management and operations), Captain Gopinath, chairman and managing director, Air Deccan, Bruce Ashby, CEO, Indigo Airlines and R K Singh, joint secretary, ministry of civil aviation amongst others. 

Speaking on the Air India and Indian merger, Thulasidas stated that the merger is a very sensible act as there is no point operating separately when both the companies are ultimately owned by one owner. "The merger will also make us stronger to face competition better. The merger will result in a large combined fleet of about 115 - 120 aircrafts. In the coming three years 64 aircrafts will be inducted making us the largest airline in Asia ensuring wider network and higher service quality," he further added. He also mentioned that he has put into force a committee to study the need to order for more aircrafts as he feels there will definitely be a demand for more in the future. Talks are also on for joining one of the global alliances resulting in seamless transfer to any place in the world. This merger is the most effective way to tap a market with 40 per cent growth figures. The launch of the new airline will happen in due course, he announced.

The challenges of capacity vs demand, full service vs low cost, sustainable needs and government intervention were some of the topics that were discussed by Singh, joint director, ministry of civil aviation. The legacy airlines have enough capacity while the new airlines are inducting fresh capacity. The trunk routes will get choked if more capacity is added, therefore new or regional routes should be used to divert traffic but in the long run even those will suffer from inadequate infrastructure, he opined.

He raised a very important question of how are low cost airlines called low cost when they pay the same cost for leasing of aircraft, airport charges, navigation charges and so on. This unfair plan has resulted in consolidation or mergers which seem necessary for survival. This trend is here to stay with more mergers stabilising the yields, introduction of new pair cities and regional airlines playing a big role.

Shifting the importance to engine manufacturing, Pratt and Whitney, senior vice president and general manager James Keenan said that in this growing market the development of MRO environment is important as it is a major driver of airline cost. Reducing green house emissions is one of the moral responsibilities and the challenges that would come in India's way in achieving this will be the regulatory burdens and bad infrastructure.

The transition period is now, said Bruce Ashby, CEO, Indigo Airlines. Considering the huge demand for air travel, the need for better infrastructure has gained momentum. The initiator of the low cost airline trend, Captain Gopinath said that as the new India is emerging new things are happening. Right now the country is on the rebound, it is a place of all possibilities. With markets opening and allowing deeper penetration it is the right time to connect the smallest of the cities with the major metros. Huge need for multiple airports in cities and speedy actions facilitated by the government will help take control over the market, he added. Speaking on the next generation air transportation system, Nick Sabatini, associate administrator for aviation safety, FAA said that moving to satellite and internet based systems will not only be safe but also be dependable. It will help achieve efficiency, safety, security and flexibility in operation.

*US - INDIA AVIATION COOPERATION PROGRAMME* 

The US-India Aviation Cooperation Program (ACP), a public-private partnership between the US Trade Development Agency (USTDA), the US Federal Aviation Administration (FAA) and US aviation companies, has been established to provide a forum for unified communication between the Government of India and US public and private sector entities in India. The ACP is designed to work directly with the Indian Government to identify and support India's civil aviation sector modernisation priorities. 

The ACP's specific objectives are to: (i) promote enhanced safety, operational efficiency and system capacity in the Indian aviation sector; (ii) facilitate and coordinate aviation industry training and technical ties between the US and India; and (iii) strengthen overall US-India aviation cooperation. USTDA is providing funding for training and technical assistance programs and the FAA and US aviation companies are providing in-kind support. 

The ACP will serve as a mechanism through which Indian aviation sector officials can work with US civil aviation representatives to highlight specific areas for technical cooperation. The ACP consists of both the US Government and private sector representatives, and its secretariat will function as the focal point for responding to Indian areas of interest by identifying appropriate training programs and other cooperative activities. The secretariat will be responsible for managing and organising the identified training and technical cooperation activities. Initially, the ACP intends to focus on activities that support air traffic/air space management enhancements and the challenge of rapidly increasing aviation traffic in India. The ACP will coordinate identified government and industry priorities in these areas, develop corresponding activities, and recommend activities that US Government agencies, such as USTDA and the FAA, and US private industry can support. Specific technical cooperation programs will depend on the priorities Indian and US officials identify, and may include training opportunities in India and the US, on-the-job training, and personnel exchange programs. 


*Aviation training*

Moving to the most basic and essential contributors to safe, secure and reliable aviation, the session on the need for aviation training practices saw speakers from major aviation training institutes like the Indira Gandhi Rashtriya Udaan Academy, Delta Connection Academy and India Airlines academy.

With the aviation industry growing rapidly it needs more and more qualified pilots. India needs about 4500-500 pilots in the next five years, said air vice marshal Malahan, director, Indira Gandhi Rashtriya Udaan Academy. In order to meet this demand even more flying clubs and aviation training schools would be needed.

Also learning how to handle risk is one of the key areas of expertise for the pilots. Risk management is training in all aspects of aviation including air traffic control, maintenance and operations. It is about managing the safety resources to minimise the risk said Robert Francis, safety consultant, the Washington group.

The central training establishment of the India Airlines Academy has successfully trained many pilots, said Ron Nagar of Indian Airlines. The international major, Delta Airlines also informed about its Delta Connection Academy for aviation training. Captain Gary Beck, president Delta Connection Academy informed that the institute which is a subsidiary of Delta Airlines now has a fleet of over 100 aircraft, 200 flight instructors, 1.7 million hours of fatality free flights and has issued 4000 pilot licenses per annum. 

The conference ended with a few general issues of aviation security that emphasised on creating a layered approach to security covering passenger security, bus parking, roadway security, behaviour pattern recognition, inspections, baggage screening, aircraft security and ramp security measures. The topic of air cargo development and infrastructure challenges was also touched upon at the summit.


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## vips

Bushroda said:


> India emerging as a global doctor
> 
> [YOUTUBE]
> 
> 
> 
> 
> Another video
> 
> [YOUTUBE]
> 
> 
> 
> 
> Hey Dear, just reupload the videos as I want to view them


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## Bushroda

vips said:


> Hey Dear, just reupload the videos as I want to view them



There you go buddy.. Here's the links

video #1






video #2




_______________________________________

BTW, what is the problem with viewing?


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## Bushroda

*Indian shares lure foreign funds, take Re to highest close in 9 years*
*The rupee gained 1.2% this week to 40.7375 against the dollar on the evening of 18 May in Mumbai*

Sam Nagarajan/Bloomberg

New Delhi: The rupee advanced in the week to a nine-year high on speculation that overseas investors were drawn to the nationâs stocks, as the economy grows at the second-fastest pace in the world after China.

The currency rounded off a 10th five-day advance in 11 weeks, as funds abroad may add to last monthâs $1.5 billion (Rs6,150 crore) Indian share purchases. The rupee was also supported as the central bank drained the currency from the market to help curb lending and keep inflation under control, said foreign exchange trader L.V. Prasad at IndusInd Bank Ltd in Mumbai.

âIâd be short on dollars because of the persistent flows that weâre seeing,â Prasad said. âThe inflows and tight liquidity suggest a stronger rupee,â he added. A short position seeks to benefit from a currencyâs decline.

The rupee gained 1.2% this week to 40.7375 against the dollar on the evening of 18 May in Mumbai, the strongest close since 22 May 1998. It strengthened to as much as 40.545 on 7 May, the highest intra-day price since May 1998.

It also gained after China widened the band in which the yuan trades to 0.5% from 0.3%, and told lenders to set aside more cash to curb lending, spurring speculation that Indiaâs central bank will follow suit in allowing further gains in the local currency.

The rupee, the best performer in Asia among the 15 most-actively traded currencies, surged 8.7% this year. 

The Reserve Bank of Indiaâs (RBI) policy of mopping up funds from the banking system has led to speculation that policy makers are more concerned about inflation than strength in the currency. 

This week, RBI sold Rs6,000 crore of bonds to remove excess cash.


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## Bushroda

*Now, made in India electronic items to enter US, Europe*
SUTANUKA GHOSAL & WRITANKAR MUKHERJEE
TIMES NEWS NETWORK[ SATURDAY, MAY 19, 2007 01:24:03 AM] 

KOLKATA: Indiaâs manufacturing saga is donning new shades in the consumer electronics space. Global biggies like LG, Haier, Electrolux and Whirlpool are finalising plans to sell Made in India labels in mature markets like Europe and US. At present, sourcing from India is largely limited to Saarc, Middle East and African nations. 

The MNCs have already done their groundwork to develop India as one their prime global production hub, either by expanding capacity or through third-party arrangements. The export product basket from India is also being expanded in segments which have a developed domestic vendor base. 

Global firms doubtless wish take advantage of Indiaâs low-cost production capabilities. âThe firms are looking at India as an alternative global production hub to China due to similar economies of scale. Several mid-sized firms are exploring similar option. This will ultimately pay off for Indiaâs economy,â felt Suresh Khanna, secretary of CETMA, the apex industry body. 

LG already sources optical disc drives and refrigerators from India for Europe. The company intends to invest additional Rs 33 crore this year to develop its Pune facility as an export hub. LG India is eyeing an export growth of 19% in 2007, which will contribute some Rs 950 crore to its turnover. 

LG Electronics India managing director Moon B Shin told ET that exports to Europe will be driven through high-end home appliances. âWe want to make India a leading export centre and hence will look at regular investment in R&D, quality and manufacturing to ensure that we make truly world class products,â he said. 

Korean major LGâs global rival, Samsung too is developing a new unit in Chennai which will export all categories of home appliances by 2009. âSamsung will invest $100-million in the Chennai facility between 2007-11 to develop it as an export hub. We are pushing up exports to Eastern Europe, Russia and SAARC,â said Ravinder Zutshi, deputy managing director, Samsung India. 

On the other hand, Chinese major Haier wants to kick-off its India sourcing by December. While the company will initially source from a third-party production arrangement, it has plans to build a greenfield âexport-orientedâ facility in India. It is currently identifying the location for this unit.


----------



## Bushroda

*Barclays to double India workforce to meet demand for loans*

*With plans to offer personal and small business loans and credit cards and with the demand for loans going up Barclays needs to more than double its employees in India*

By Sumit Sharma/Bloomberg

Barclays Plc., the British bank that agreed to buy ABN Amro Holding NV., plans to more than double its employees in India to 700 by the end of this year as a record economic expansion spurs demand for loans.

Britainâs third-biggest bank, with 276 staff in India, plans to offer personal and small business loans and credit cards, Samir Bhatia, managing director for India, said in Mumbai.

âIndia has a high-potential and fast-growing retail financial services sector with retail banking set to grow at a compound rate of at least 30% a year,â said Bhatia.

Global and domestic banks are seeking a share of Indiaâs expanding retail market in an economy thatâs grown an average 8.6% in the past four years, helping boost salaries in the worldâs fastest growing major economy after China.

Average salaries in India are projected to rise 15% in 2007, according to human resource firm Hewitt Associates Inc. India had the highest average salary increase in the Asia- Pacific region in 2006, gaining 13.8% compared with 14.1% in 2005, Hewitt said.

âConsumer loans account for just about 5% of the GDP in India, compared to as high as 100% in some developed countries,â said Bhatia. âSo, India still has a lot of potential.â
The London-based bank has three branches in India at Mumbai, Kanchipuram, near Chennai and Nelamangala, near Bangalore, and has applied for more, Bhatia said, declining to give details.

The bank, which in March said it was more than doubling investment in its Indian unit to $370 million from $150 million, also operates Barclays Capital, its investment banking unit in India.


----------



## Bushroda

*Two giants to enjoy double digits*
Bangkok Post

China and India, the two emerging giants of Asia, are set to continue their robust growth with both countries likely to see double-digit expansion this year, economists say. 

"We have raised our 2007 growth forecast from 9.8% to 10.2%, making 2007 the fifth straight year of double-digit growth," said Mingchun Sun, the China economist for Lehman Brothers. 

He cautioned, however, that the country needed to gather pace with its policy of promoting consumption and not rely only on exports and investments. 

"Unwelcome: the gigantic and rapidly increasing trade surplus is making growth even more dependent on exports," Mr Sun wrote in a report to clients. 

China, which has at times been blamed for having an overheating economy, said that its GDP growth rebounded strongly to 11.1% year-on-year during the first quarter from 10.4% in the fourth quarter of 2006. The growth was mainly driven by a 101% increase in the trade surplus, a 23.7% gain in fixed-asset investment and 14.9% growth in retail sales. 

Mr Sun said that although such growth would be the envy of most other countries, to him the data suggested that government policies to rebalance the economy have had mixed results at best. The Beijing government had promised a comprehensive set of policies and reforms to rebalance the economy, but has so far implemented only a few, with tweaks here and there. 

"That these policies have failed to achieve their goals raises the risk that, if the government continues carrying out the promised reforms at its current slow pace, the unbalanced growth could be prolonged, making the longer-term outlook riskier," he says. 

In regard to the Indian economy, Rob Subbaraman, chief economist for Asia for Lehman, said the country's fundamentals were strong enough to support 9-10% annual gross domestic product growth in the medium term. 

He said India's growth was being spurred largely due to structural changes, but it was also posing new policy challenges as India has been undergoing a remarkable transition: average annual GDP growth has surged from 5.7% in the 1990s to 8.8% over the past four years. 

"This does not look like a flash in the pan." 

India's low-cost economy is reaping the rewards of market liberalisation; Indian companies - initially in services, but now also in manufacturing - are seizing the opportunities presented by new technologies and a more open economy. A middle class is fast emerging. 

"We judge that this growth spurt has more to do with structural factors than cyclical ones," Mr Subbaraman said. 

Gross domestic investment as a share of GDP jumped from 28.0% in 2003-04 to 33.8% in 2005-06 and looks set to climb further, he added. 

Despite the recent decision by the Reserve Bank of India to raise its benchmark repurchase rate to 7.75% to curb inflationary pressure, hopes are that the authorities will take the middle path in managing the economy. 

But Mr Subbaraman says overheating cannot be ruled out. 

"But far more important, in our view, is the scope for India's economy to sustain 9-10% growth in the medium term," he wrote. 

"Given that India's GDP per capita is just $700 [a year], nearly three-fifths of its workforce is still in the countryside and half its population is under 25 years old, there is still much growth potential to be unlocked. The key is more supply-side reforms without politics getting in the way."


----------



## Neo

*In the new India, the old problem with electricity*
By Somini Sengupta Published: May 17, 2007

GURGAON, India: This suburb south of New Delhi is where the fruits of India's economic advance are on full display: sprawling malls, gleaming skyscrapers housing India's acclaimed software sector, condominiums with names as fanciful as Nirvana Country.

But this posh address of the new India is also a portrait of Indian ambitions bumping up against Indian realities.

Look up at the top of these towers and on any given day, you are likely to find three, four, six smokestacks poking out from each rooftop, blowing gray-black plumes into the clouds. If the smokestacks are on, it means the power is off and that the building - whether bright new mall, condominium or office - is probably being powered by diesel-fed generators.

This being India, a country of more than one billion people, the scale is staggering.

In just one case, Tata Consultancy Services, a technology company, maintains five giant generators, along with a nearly 20,000-liter, or 5,300-gallon, tank of diesel underground, as if it were a gasoline station.

The reserve fuel can power the lights, computers and air conditioners for up to 15 days to keep Tata's six-story building humming during the hot, dry summer months, when temperatures routinely soar above 104 degrees Fahrenheit (40 degrees Celsius) and power cuts can average eight hours a day.

The Gurgaon skyline is studded with hundreds of buildings like this. In Gurgaon alone, the state power authority estimates that the gap between demand and supply hovers around 20 percent, and that is probably a conservative estimate.

For all those who suffer from crippling power cuts in cities like this, there are others who have no electricity connection at all. According to the Planning Commission of India, 600 million people - roughly half the population - are off the electricity grid. For this reason, it is impossible to estimate accurately the total national shortfall.

The electricity crisis has become all the more acute for the roaring pace of India's economic growth and the new material aspirations it has generated.

Rachna Tandon, a prosperous housewife, is a good example. She moved here to a quiet street of row houses 14 years ago, settling in what was one of the first residential sites built by DLF Universal, Gurgaon's and India's largest builder.

Back then, electricity was in short supply, but she was fully confident things would improve. The advertisements at the time described Gurgaon as the best address south of Delhi. It was pitched as a millennium city.

Today Tandon says she prefers to think of it as a medieval city. The day before, the power went out for roughly 11 hours. Her inverter, which is basically a series of rechargeable batteries - a household necessity here - collapsed after four hours.

For respite, some of her neighbors drove around in their air-conditioned cars. Her own children lingered outside and finally, when they nodded off to sleep, they lay on the living room floor, the coolest spot in the house.

Each appliance in her well-stocked home - an air conditioner in each room, a flat-screen television, a microwave and an electric stove - speaks to the gap between India's dreams and its realities.

The power cuts had thawed the chicken sausage in her freezer and she would have to throw it away in case it had spoiled. She did not dare use her electric oven, for fear that the power would go out in the middle of baking.

With no television, her 10-year-old son has been so bored that he took out his old cricket bat and ended up putting a ball through the kitchen window. Her daughter, 13, has had to study by flashlight. This summer, Tandon said, the family will have to choose between buying a generator and going on vacation. "We're living in the dark ages," she said.

For all her suffering, a reminder of the other India came earlier in the week, when her mother called from her hometown in rural north India and said she had had electricity for just one hour during the day.

In part because of these limitations, Indians are, for now, relatively conservative consumers of energy: about 600 units per capita per year, or one-fifth that of a typical American. But that will certainly increase as Indian desires reach those of the wealthy Western countries.

A recent report by McKinsey Global Institute frothily predicted a fourfold increase in consumer spending by 2025, vaulting India, as it said, "into the premier league among the world's consumer markets." McKinsey forecast that India would surpass Germany as the fifth-largest market in the world.

Driven by the needs of plenty, India has stepped up power generation in recent years at the pace of about 6 percent a year. It is a pittance compared to what neighboring China adds on each year and in any case insufficient to keep up with India's galloping demand.

The government has promised electricity connections for all - which means access to the grid, not round-the-clock power - by 2009. That is a target that does not seem plausible at current rates of power generation.

The development of power plants, meanwhile, is constrained by a lack of access to land, fuel and water, all of which a power plant needs in large quantities. The power grid remains weak.

In Gurgaon, for instance, transformers routinely blow out because of heavy loads. Voltage fluctuations damage electrical appliances of all sorts.

What the state cannot provide efficiently, many take for themselves. The World Bank estimates that at least $4 billion in electricity is unaccounted for each year - that is to say, stolen. Transparency International estimated in 2005 that Indians paid $480 million in bribes to put in new connections or correct bills.

The country's energy needs are one of the government's main arguments for a nuclear deal with the United States, which would allow India to buy reactors and fuel from the world market.

But even if the deal goes through, it would lift nuclear power, now at 3 percent, to no more than 9 percent of India's energy supply, said Leena Srivastava, executive director of the Energy and Resources Institute, a nongovernmental research group.

Similarly, in the coming years, alternative sources of energy, like wind, are expected to double, but to no more than about 8 percent of supply.

Coal will continue to dominate power generation and already more than a third of India's coal plants do not meet national emissions standards.

For Indian business, coping with chronic power shortages is a part of the cost of business.

At Tata, company managers took pains to say that power shortages do not hinder their ability to meet deadlines for their clients.

"The work as such does not suffer," said Gurinder Virk, assistant general manager. "We have sufficient stocks of diesel at all times." Behind the building, three generators purred as a sweltering evening descended. A 2004 World Bank survey found that 60 percent of companies in India have such facilities.

Still, construction here surges ahead. With few exceptions, there are little to no efforts to reduce power consumption, beyond the use of low-energy light bulbs. Gurgaon is dotted with buildings that are effectively curtains of glass, soaking up the searing summer heat.

"It's good for New York, not Gurgaon," was the verdict of Niranjan Khatri, a general manager with ITC, an Indian conglomerate whose office tower here is one of the few to comply with green building codes.

Across the highway, the nearly completed Ambi Mall promises one kilometer of shopping on each floor. Next to it, a billboard for the Mall of India promises an even bigger shopping center, one that will put India on the "global retail map."

Never mind that Gurgaon does not have a sewage treatment plant of its own or that the already existent Metropolitan Mall burns an average of 6,000 liters of diesel a day to run its generators during power cuts.

Farther south, in Nirvana Country, there are only generators. The 800-unit complex of row houses and apartment blocks, still under construction, is not even connected to the public electricity grid. It swallows 6,000 gallons of diesel each week to meet its needs - and that with only a fifth of its units occupied.

It was unclear how the power needs will be met once it reached full occupancy, said M.K. Pant, a retired army colonel who is now Nirvana's estate manager. "There's nothing in the files," he said. "There's nothing in the thinking also."

No matter. Newspaper advertisements for Nirvana Country promise "air conditioning in all rooms."

http://www.iht.com/articles/2007/05/17/news/india.php


----------



## Neo

*Now, made in India electronic items to enter US, Europe*
SUTANUKA GHOSAL & WRITANKAR MUKHERJEE

SATURDAY, MAY 19, 2007

KOLKATA: Indiaâs manufacturing saga is donning new shades in the consumer electronics space. Global biggies like LG, Haier, Electrolux and Whirlpool are finalising plans to sell Made in India labels in mature markets like Europe and US. At present, sourcing from India is largely limited to Saarc, Middle East and African nations. 

The MNCs have already done their groundwork to develop India as one their prime global production hub, either by expanding capacity or through third-party arrangements. The export product basket from India is also being expanded in segments which have a developed domestic vendor base. 

Global firms doubtless wish take advantage of Indiaâs low-cost production capabilities. âThe firms are looking at India as an alternative global production hub to China due to similar economies of scale. Several mid-sized firms are exploring similar option. This will ultimately pay off for Indiaâs economy,â felt Suresh Khanna, secretary of CETMA, the apex industry body. 

LG already sources optical disc drives and refrigerators from India for Europe. The company intends to invest additional Rs 33 crore this year to develop its Pune facility as an export hub. LG India is eyeing an export growth of 19% in 2007, which will contribute some Rs 950 crore to its turnover. 

LG Electronics India managing director Moon B Shin told ET that exports to Europe will be driven through high-end home appliances. âWe want to make India a leading export centre and hence will look at regular investment in R&D, quality and manufacturing to ensure that we make truly world class products,â he said. 

Korean major LGâs global rival, Samsung too is developing a new unit in Chennai which will export all categories of home appliances by 2009. âSamsung will invest $100-million in the Chennai facility between 2007-11 to develop it as an export hub. We are pushing up exports to Eastern Europe, Russia and SAARC,â said Ravinder Zutshi, deputy managing director, Samsung India. 

On the other hand, Chinese major Haier wants to kick-off its India sourcing by December. While the company will initially source from a third-party production arrangement, it has plans to build a greenfield âexport-orientedâ facility in India. It is currently identifying the location for this unit. 

http://economictimes.indiatimes.com...Europe/RssArticleShow/articleshow/2060782.cms


----------



## Bushroda

*The World's Next Big Spenders*
*How India's rising and unique middle class will reshape global consumer markets.*

By Diana Farrell and Eric Beinhocker
Newsweek International
Updated: 4:38 p.m. ET May 19, 2007

May 28, 2007 issue - Throughout India's history, the vast majority of its people have lived in desperate poverty. As recently as 1985, more than 90 percent of Indians lived on less than a dollar a day. Yet India is poised to undergo a remarkable transformation. New research from the McKinsey Global Institute (MGI) shows that within a generation, the country will become a nation of upwardly mobile middle-class households, consuming goods ranging from high-end cars to designer clothing. In two decades the country will surpass Germany as the world's fifth largest consumer market.

The headlines of India's growth story are well known &#8212;after the country began reforming in the early 1990s, economic growth jumped to about 7 percent. It slowed in the late '90s but since 2002 has proceeded at a blistering pace, surpassed only by China among the world's large economies. Less well known is how this growth is reshaping the lifestyle of Indian families. MGI's research portrays a dramatic transformation that will touch Indians up and down the income pyramid, from the poorest rural farmer to the wealthiest IT entrepreneur. Companies that fail to understand the unique desires and tastes of the new Indian consumer will miss out on a half-billion-strong market that along with China ranks as one of the most important growth opportunities of the next two decades.

*One of our most striking findings is how dramatically recent growth has reduced the numbers of the poorest Indians, a group we call the deprived. They earn less than 90,000 Indian rupees a year ($1,969 per household, or about a dollar per person per day), and include subsistence farmers and unskilled laborers who often struggle to find work. They can be found across India, from its isolated villages to its sprawling urban slums. Many depend on government-subsidized food to get enough calories each day. Since 1985, the ranks of the deprived have fallen from 93 percent to 54 percent of the population, as 103 million people moved out of desperate poverty and many millions more were born into less grim circumstances. When we factor in population growth, there are 431 million fewer deprived Indians today than there would have been had the poverty rate remained stuck at its earlier level, making India's economic reforms the most effective antipoverty program in its history. If growth continues at its recent pace, we expect a further 291 million people to move out of poverty over the next two decades. Most of these former poor will move into the class we call the aspirers, households earning between 90,000 and 200,000 rupees ($1,969-$4,376) per year. Aspirers are typically small shopkeepers, farmers with their own modest landholdings or semiskilled industrial and service workers. Their lives are not easy, but aspirers generally have enough food and might own items such as a small television, a propane stove and an electric rod for heating water. They spend about half of their income on basic necessities, and many of their other purchases are bought secondhand or in what Indians call the "informal economy." Over the next 20 years this group will shrink from 41 percent of the population to 36 percent, as many of them move up into the middle class.* 

The next two groups&#8212;seekers, earning between 200,000 and 500,000 rupees ($4,376- $10,941), and strivers, with incomes of between 500,000 and 1 million rupees ($10,941-$21,882)&#8212;will become India's huge new middle class. While their incomes would place them below the poverty line in the United States, things are much cheaper in India. When the local cost of living is taken into account, the income of the seekers and strivers looks more like $23,000 to $118,000, which is middle class by most developed-country standards. Seekers range from young college graduates to mid-level government officials, traders and business people. They enjoy a lifestyle that most of the world would recognize as middle class and typically own a television, a refrigerator, a mobile phone and perhaps even a scooter or a car. Although their budgets are stretched, they scrimp and save for their children's education and their own retirement.

Strivers, the upper end of the middle class, tend to be senior government officials, managers of large businesses, professionals and rich farmers. Successful and upwardly mobile, they are highly brand-conscious, buying the latest foreign-made cars and electronic gadgets. They are likely to have air conditioning, and can indulge in an annual vacation, usually somewhere in India.

The middle class currently numbers some 50 million people, but by 2025 will have expanded dramatically to 583 million people&#8212;some 41 percent of the population. These households will see their incomes balloon to 51.5 trillion rupees ($1.1 billion)&#8212;11 times the level of today and 58 percent of total Indian income.

The other major spending force in India's new consumer market will be our last segment&#8212;the global Indians, earning more than 1 million rupees ($21,882, or $118,000, taking into account the cost of living). These are senior corporate executives, large business owners, high-end professionals, politicians and big agricultural-land owners. Today there are just 1.2 million global Indian households accounting for some 2 trillion rupees in spending power. But a new breed of ferociously upwardly mobile Indians is emerging&#8212;young graduates of India's top colleges who can command large salaries from Indian and foreign multinationals. Their tastes are indistinguishable from those of prosperous young Westerners&#8212;many own high-end luxury cars and wear designer clothes, employ maids and full-time cooks, and regularly vacation abroad. By 2025, there will be 9.5 million Indians in this class and their spending power will hit 14.1 trillion rupees&#8212;20 percent of total Indian consumption.

As the seismic wave of income growth rolls across Indian society, the character of consumption will change dramatically over the next 20 years. A huge shift is underway from spending on necessities such as food and clothing to choice-based spending on categories such as household appliances and restaurants. Households that can afford discretionary consumption will grow from 8 million today to 94 million by 2025.

Long-established spending attitudes are already changing rapidly. Branded clothes are becoming de rigueur for the wealthiest Indians&#8212;Christian Dior, Louis Vuitton and Tommy Hilfiger already have a presence in the country. Gucci, Armani and Versace are on their way. For generations, Indians did their daily shopping at fresh-food markets and regarded packaged foods as "stale." However, just like their Western counterparts, a new generation of busy urban Indians is starting to appreciate the convenience and choice offered by packaged foods. Likewise, many Indians have traditionally viewed gold jewelry as a safer way to save than banks, but young Indians today are likely to see jewelry as a fashion statement, not a savings plan. They are also increasingly comfortable using credit cards &#8212;the share of Indians who carry plastic has quadrupled since 2001.

Of course, many of India's new consumers still have relatively modest means. Despite rapidly rising incomes, average spending will still lag behind countries such as Indonesia. Like China's, India's market will be based more on volume than on per capita spending. While luxury-goods makers may be able to sell to India's global consumers with little modification to their products, those selling to India's new middle class will need to be innovative to square the difference between the rising aspirations of consumers and their still-modest pocketbooks.

One such company is Tata Motors, India's leading auto manufacturer, which has announced its intention to introduce the world's first "one lakh" car. One lakh refers to the price, 100,000 rupees, or just $2,100. This will probably be the cheapest car in the world. Historically, a new car was out of reach of the vast majority of Indian households. But as incomes rise, car prices fall and financing becomes available to more people, a huge pool of pent-up demand will be released. In a tie-up with the State Bank of India, car manufacturer Maruti (majority-owned by Suzuki) is now offering customers the chance to buy one of its cars with lower monthly payments than if they were buying a motorbike. Over the next 20 years, we expect to see spending on cars growing by 12 percent per year. While more Indians will enjoy the freedom of their own transport, it's not hard to imagine the impact on the nation's environment and increasingly clogged roads. Affordability continues to be the hallmark of successful new consumer-product launches. In the household-products sector, an example of keen pricing is the $66 washing machine built by Videocon, the Indian consumer-electronics company. The Videocon washer was successful not just because it was cheap, but because its design was attuned to the needs of Indian families&#8212;for example, it will automatically finish a wash after one of India's frequent power outages&#8212;and it dropped costly standard features such as a drying cycle, which is unnecessary in India's hot climate.

Smart companies recognize that old consumer habits die hard. For generations, rural Indian families have either made their own clothes from bolts of cloth or had the local tailor make their garments relatively cheaply. Many remain suspicious of ready-to-wear clothes. Arvind Mills, India's leading denim manufacturer, overcame these misgivings by offering a "ready to stitch" jeans kit to local village tailors. It also distributed sewing-machine attachments for stitching the heavy denim and trained the tailors to use the kits. Within two months, more than a million of these Ruf 'n Tuf kits were sold.

India's shift to a consumer society will only accelerate as more people become "connected" via mobile phones, the Internet and TVs, and as advertising becomes a more prominent part of people's lives. Before India embarked on its program of economic reforms, the country had only 0.8 fixed telephones per 100 people, and virtually no mobile phones. While fixed-line penetration has almost tripled to 2.2 per 100 people, the real growth story has been in mobile, which has exploded and is expected to reach 211 million subscribers by the year-end. India's mobile market is currently growing even faster than China's, and we expect overall communications spending to continue to grow at a very rapid 13.4 percent per year over the next two decades. Other fast-growing categories will include transport, education and health care. It is testament to the determination of Indians to work for a more prosperous future that the highest priorities will be these "economically enabling" areas of spending that boost productivity and economic growth. Indeed, Indians will spend more of their disposable income on these categories than consumers in just about any other country. But the boost in private health-care spending, which we expect to double from 7 percent of all consumer spending today to 13 percent in 2025 (second only to the United States in percentage terms), also shows the weak underbelly of the nation's growth story. Despite the immense progress that India has made, the public sector&#8212;in particular, health, education and infrastructure such as roads and power&#8212;is in a desperate condition. Thus many Indians will spend their rising incomes to opt out of public services and go private unless those services improve.

While India's rising wealth will provide more resources to tackle these issues, its fast-growing population will stress its public services even further. India's success to date has been built on its human capital&#8212;a hardworking and increasingly educated population. If the country's growth is to continue, the reforms that have revolutionized its private sector will need to reach its notorious government bureaucracy as well. If this does occur, the dynamism of India's people will do the rest.

Farrell is director of the McKinsey Global Institute, McKinsey & Co.'s economic research arm, where Beinhocker is a senior fellow.

Categories​ Compound Annual Growth Rate​ 
Food, beverages, and tobacco​ 4.5%​Transportation​ 8.3%​Housing and utilities​ 6.1%​Personal products and services​ 9.2%​Health care​ 10.8%​Apparel​ 6.5%​Education and recreation​ 11%​Household products​ 6.9%​Communication​ 13.4%​ 


Â© 2007 Newsweek, Inc.


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## Bushroda

*Gujarat gets an A for economy* 
ABHISHEK KAPOOR 
Posted online: Saturday, May 19, 2007 at 1251 hours IST 
Updated: Saturday, May 19, 2007 at 1359 hours IST 

GANDHINAGAR, MAY 19: Gujaratâs economic growth post-liberalisation, and specifically in the last five years, has come in for handsome praise in the draft Gujarat Development Report, prepared by the Gujarat Institute of Development Research (GIDR) at the behest of the Planning Commission of India. 

For a change, and much to the amusement of bureaucrats here, it is the Reserve Bank of India (RBI) and some Union policies that get brickbats for stalling Gujaratâs spectacular growth. 

Though the praise is more for Gujaratâs historical lead and not essentially for the incumbent dispensation, officials are happy that the Stateâs strengths are taken note of. 

As such, the result is a long drawn critique of the State government and its performance, bureaucrats are happy that they are getting bouquets, for a change. 

The report calls the State a âstar performerâ and a âmanufacturing specialistâ with investments in ports, roads, telecom and other infrastructure attracting unequivocal praise. Export-led growth of the country in the last five years allowed labour intensive Gujarat manufacturing clusters (diamonds, textiles, garments, cement, ceramics, tiles, plastics, auto ancillaries, drugs and pharmaceuticals) to ride the wave. 

The report complains that Gujarat has realised average growth rates of only 14 per cent in manufacturing despite a potential for crossing the 20 per cent mark, this, because of conservative monetary and exchange rate policies of the Central government and the RBI. Calling it policy-induced underperformance, the report says that even tradable policies may have discriminated against manufacturing, Gujaratâs intrinsic strength. 

Comparing the State with other states, the report finds Gujarat doing exceedingly well on most economic measures. The comparisons are made against Tamil Nadu, Karnataka, Maharashtra and Andhra Pradesh. It gives an example of how growing from a much lower level of Rs 11,500 against Rs 13,500 of Maharashtra in 1993, the per capita income of Gujarat crossed that of its neighbour in 2003 and stood at Rs 19,500, a jump of over 70 per cent in a decade growing fastest among its peers. 

âGujarat is in a class by itself. Among its peer states, Gujarat has the highest rate of growth of GDP, manufacturing, and per capita SDP. The openness to immigration of labour, and the natural advantage of much land with little alternative use, local entrepreneurship, state support, and local politics that is not against capital are significant factors,â says the chapter on Economic performance of Gujarat in recent times. 

In the making for the last two years, the draft report is now with the bureaucrats for a final perusal and comments before finalisation. The work was carried out under the overall guidance of Planning Commission Member (west) B N Yugandhar, who was recently in news for quitting the body.


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## Bushroda

*India puts forward concept of 'merchant airports' in private hands*

Posted May 18th, 2007 by Indian-MuslimEconomy New Delhi, May 18 (IANS) The civil aviation ministry Friday put forward a new concept of "merchant airports" in the country with the infrastructure managed by private enterprises and government agencies handling safety and security issues.

"The entrepreneur is expected to set up and operate an airport on the basis of its commercial viability, subject to the safety and security oversight of the government," an official note said, after an official meeting in this regard.

"Such a proposal will dispense with the requirement for investment of government resources and therefore a more liberal, license-based approval procedure can be considered," the note added. 

The government wants to unveil a new policy on airport infrastructure.

Civil Aviation Secretary Ashok Chawla chaired Friday's meeting that was attended by representatives of leading chambers, infrastructure funding agencies, banks, airport operators and state-run aviation companies.

Experts noted at the meeting that there are no international practices in this regard for benchmarks, but given the rapid growth of civil aviation in India and the need for infrastructure, airports needed to work on commercial lines.

International air traffic has been growing at around 15 percent per annum, while the domestic passenger traffic has sometimes surpassed even 40 percent. "This growth has placed tremendous burden on the existing airport infrastructure."

India is also expected to add some 400 new aircraft over the next seven-eight years worth some $80 billion, which would necessitate an investment of about $30 billion in airport infrastructure, the note said.

"Since it would be very difficult to generate such resources in public sector or even under public-private-partnership, the government felt the need to explore the option of merchant airports."

In recent months, the airports in Delhi and Mumbai are being restructured in the joint venture route and two new airports are being constructed in Bangalore and Hyderabad, which are likely to become operational within one year.


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## Bushroda

*Newspapers Do Booming Business In India*
By HENRY CHU Los Angeles Times
Published: May 20, 2007

NEW DELHI - Extra! Extra! Researchers have discovered a place where the newspaper, a threatened species in parts of the world, is thriving.

It's India, home to 1.1 billion people. Not only is the press in robust health, but it's growing at an astonishing rate.

From 2005 to 2006, nearly 2,100 newspapers debuted in India, joining 60,000 circulating. Here in the capital, a megalopolis with 15 million residents, two new dailies have hit the streets in the past four months, angling for their share of a market divided among more than a dozen competitors.

Why the rush to join an industry that seems headed for extinction in the United States and other developed nations?

India is a country with an expanding middle class and a booming economy, which have fueled an explosion in consumer spending and advertising.

The illiteracy rate - though stubbornly high at an estimated 35 percent - gradually is coming down. In New Delhi and Mumbai, about 80 percent of residents age 7 and older can read and write.

Meanwhile, Internet penetration remains marginal, despite India's reputation as an information-technology powerhouse. Only a sliver of the population, mostly well-heeled urbanites, can afford home computers and high-speed Internet access.

"You cannot really compare the Indian market with the market in the West," said Subir Ghosh, editor of Newswatch India, a Web site that tracks the media. "The bulk of the market is actually virgin territory, even now."

Helping newspaper circulation are newsstand prices that rarely exceed 3 rupees a copy, the equivalent of about 7 cents. A vicious price war several years ago suppressed prices. But thanks in part to the surge in advertising, only four newspapers out of more than 60,000 ceased publication between 2005 and 2006, according to the official Registrar for Newspapers in India.

Whether the Indian newspaper industry will reach a saturation point remains to be seen.

With widespread Internet access not expected here for a decade, the traditional media are likely to continue ruling the roost.


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## Bushroda

*Raising a glass to India*
WILLIAM LYONS

VIJAY Mallya looked pensive as he took a drag on his cheroot and peered through the rain at the Whyte & Mackay building towering above central Glasgow. "I guess it is mine now," he said with just the trace of a smile. 

Minutes earlier, the man dubbed India's Richard Branson had given the western media the lowdown on his long-awaited Â£595m acquisition of Whyte & Mackay from the South African entrepreneur Vivian Imerman. 

Now, standing at the entrance to Glasgow's Hilton hotel, he faced the tougher task of selling the deal to the public back home in India, where he hopes his freshly acquired brands will become trailblazers in what is potentially the biggest whisky market in the world. 

"India is potentially a very large consumer of Scotch. I don't believe the Chinese market offers the same balance as India, where you can sell whisky at all levels." 

If India, with 200 million regular consumers of locally produced whisky, is the future for Scotch whisky, Mallya looks like the man to get it there. He owns the country's biggest drinks group, United Spirits, and is an influential member of the country's federal parliament. 

Until now, the biggest obstacle to the Indian market for Scotch has been the prohibitively high tariffs, up to 550%, imposed by states to protect farmers who supply molasses for local whisky, much of which is made by Mallya's company. 

The World Trade Organisation is expected to rule these taxes out of order by April next year, a move which would put whisky within reach of the Indian middle classes for the first time. 

Now that Mallya owns a Scotch producer, it is in his interests to hasten that process, according to John Wakely, an independent drinks analyst: "Most industry players believe that if Mallya is going to make this work he has to put his weight behind getting the Indian Scotch market to open up. 

"To be blunt, there needs to be quite a hurry on this, because unfortunately the flip side of the Scotch whisky industry is that if there is a sustained boom over a number of years in prices and volume they start cranking up production." 

One senior figure in the Scotch whisky industry said: "I suspect Mallya knows that the WTO will be successful and he is doing this to get a foothold in the market. Diageo and Pernod Ricard have been building up their own distribution networks in India for years. If the tariffs were lifted tomorrow their brands would be in a very strong position to dominate the market." 

Whisky will still be more expensive than local spirits because of its production and transport costs. But Mallya last week raised the possibility that he could save some money by exporting bulk Scotch to India and bottling it locally. 

What seems certain is that when Mallya acts, he will do so on a grand scale. Last week's takeover was announced in a typically flamboyant style for 51-year-old Mallya, who owns Kingfisher beer, the airline of the same name and a spirits business which is ranked the third biggest in the world by volume. 

Dressed in black suit and black shirt, set off with a large diamond stud at his collar and a mane of greying hair, he looked more like a film producer or impresario. 

Mallya's officials and Imerman's team mingled while smartly dressed public relations girls milled about with clipboards. At the back of the room sat Scottish & Newcastle chairman Sir Brian Stewart, whose company has a stake in Mallya's United Breweries. 

But there was no flashiness or theatre as Mallya took his seat next to Imerman and set out the case for the deal. Due diligence, he said, showed the Whyte & Mackay brands and whisky stocks together were worth between Â£520m and Â£590m, giving him the Invergordon grain plant, four malt whisky distilleries and a virtually new bottling plant at Grangemouth for very little. 

That suggests Imerman, the arch wheeler-dealer, did not get the best price for the business. But speaking on the sidelines at last week's press conference, the South African pointed out that he had done pretty well out of it. The former Del Monte boss first got involved as an investor through a management buyout of the former Jim Beam Scotch whisky business in 2001. He took control of that company in a Â£175m deal when lead investor WestLB bailed out, changed its name from the meaningless Kyndal to Whyte & Mackay and set about cutting costs and sharpening brands. 

His two-thirds stake in the business gave him a personal profit of Â£250m. The price was boosted by the fact that Scotch whisky stocks have fallen and prices have risen in recent years - but Imerman claims luck had nothing to do with it. 

"I bought all the excess stock in the market for Â£40m and everybody told me I was mad. But I saw a mismatch between the price of a case of Scotch and the price of stock," he says. 

"I was the first to realise this. We raised our prices and we took the pain, and now prices are twice as high as they were. I think the industry is in a very healthy state now that commoditisation has ended and people realise the authenticity and value of the Scotch brand." 

But as the company recovered, it became clear that it would be difficult to take it to the next level: "The Vivian factor in terms of what I could do with the business had all but been exhausted. The company needed an acquisition or an owner that was able to bring distribution capacity." 

Just as Imerman was coming to that conclusion, he received a call from Mallya, who was looking to plug a gap in the growing international drinks portfolio held by United Spirits. 

When rumours of a deal surfaced last summer, the price was expected to be around Â£460m. But Mallya says: "It became difficult. We were making progress, but we were not making progress. It took so long because the Scotch whisky industry was changing significantly. Now it has returned to sensible levels of viability and prosperity." 

Having paid what would have been considered an excessive price until this year, Mallya is unlikely to start discounting. "The stock is very valuable and it has to be judiciously used," he says. "We will use it to maximise its value, and the best way to do that is to put it into luxury brands." 

But some in the industry ask whether Mallya has bought true luxury brands. He has high hopes for a Whyte & Mackay 13-year-old blended whisky, and the Dalmore and Isle of Jura malts. 

Mallya describes Dalmore as "the flagship", while Imerman last week talked up Whyte & Mackay as "the most-loved whisky in the country". However authentic these brands might be, they lack the international kudos of Pernod Ricard's Chivas or Diageo's Johnnie Walker, while W&M's eponymous blend typically sells for less than the market leaders Bell's, owned by Diageo, and Edrington's Famous Grouse. 

Aside from the whiskies, Mallya has acquired Vladivar vodka, a mid-priced product with a low global profile. Mallya says he will look at ways to "rejuvenate" the Vladivar brand, although it might be easier to invent a new premium spirit without the "Vodka from Varrington" slogan which dates from the 1980s and seems to have stuck with many consumers. 

But not everyone is sceptical. Whisky analyst Alan Gray, of Sutherlands, who publishes the annual Scotch Whisky Review, said the flagship W&M was good enough to justify the deal: "Mallya has the opportunity to really grow Whyte & Mackay in India. It's an absolutely wonderful brand for India, it is not wildly expensive, it's a wonderful product, and through his distribution channels he can do a very good job. In India the market is still in its early stages, so the main thrust will be on blends."

*Life and times of a tycoon*

Born: 1955; son of Vittal Mallya, part of the first generation of successful businessmen after India's independence 

Business interests: Chairman of United Breweries; Kingfisher Airlines, Aventis Pharma and Bayer CropScience India. 

Owns: South African game lodges, tropical islands, a Boeing 727 and a Gulfstream jet which he pilots, 260 classic cars and a yacht. 

Politics: Member of the Indian Parliament and leader of a political party 

Hobbies: Horseracing, motorsport. 

Lives: 26 homes including Keillour Castle in Perthshire, an apartment in Trump Plaza, New York, Monte Carlo and in every major city in India. 

Aims: *To bring Formula 1 to New Delhi in 2009 *

He says: "I wanted to be a doctor like my grandfather. My father put his foot down and said 'No, he's going into business.' Did I choose? No, but I came to enjoy it."

This article: http://business.scotsman.com/agriculture.cfm?id=781392007


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## Bushroda

*Indian Government Seeks to Tame Chaotic Roads* 
Voice of America
By Anjana Pasricha 
New Delhi
20 May 2007

The Indian government has proposed a stiff increase in penalties for traffic offenses. As Anjana Pasricha reports from New Delhi, reckless driving and chaotic conditions on the country's roads are blamed for tens of thousands of accidents.

Morning rush hour in Delhi is not a scene for the faint hearted. Millions of cars, buses, motorcycles, and three-wheel scooters jostle for space on the city's roads. Drivers jump signals, change lanes recklessly, overtake from the wrong side, and fail to notice pedestrians trying to weave their way through the madness.

Delhi's traffic is considered to be more chaotic than in other cities, but bad driving is the norm on most roads in the country. The result: India tops the world in road fatalities with 100,000 people dying in road accidents every year. Tens of thousands of others suffer grievous injuries.

In a bid to curb reckless driving, the Indian government has introduced a bill in parliament proposing stiffer fines for traffic offenses. For example, speeding could attract a penalty of $10 to $25, and rash or drunken driving a fine of up to $50, along with a prison sentence.

Traffic experts feel the fines might have a sobering effect on drivers, who think little of paying the existing $2 penalty for offenses such as jumping signals.

Rohit Baluja, head of the Institute of Road Traffic Education, says the problem is huge.

"There are 146 million traffic violations committed by motorized road users every single day," said Baluja. "It is a culture of degeneration that people are doing whatever they want, you cannot anticipate a person, how will he behave."

The Delhi government has already increased penalties in the capital, but not to the extent proposed by the new bill.

But traffic experts say stiffer fines alone will not bring order on Indian roads. They also want authorities to improve road engineering to reduce the risk of accidents.

Baluja gives just a few examples. He says traffic signals are sometimes not clearly visible, and there are inadequate provisions for pedestrian crossings.

"We have problems with signals, with road markings, signages, design failures, that is a large contributory factor," added Baluja. "Signals you cannot see, behind bushes, they are not properly placed, if there are no stop lines, how would you know that you have crossed a stop line? "

Harman Sidhu, a resident of the northern city of Chandigarh, has been campaigning to improve road safety since he was paralyzed in an accident 10 years ago.

He says higher fines must be accompanied by better training and testing of drivers, and stricter procedures for issuing licenses.

"The government is actually focusing on enforcement, but the education part which is an important aspect is still not being covered," said Sidhu. "People have to pay more for offenses, but they don't really know under what condition are they making an offense. Most of the drivers get their licenses through some illegal channels or through some middlemen, there is no standardized testing."

All agree that India needs to step up efforts to improve road safety as it adds new cars at a dizzying pace, and builds new expressways that could turn into death traps if traffic behavior does not improve.


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## Neo

Tuesday, May 22, 2007 

*India may have to buy more wheat*

NEW DELHI: An Indian tender for the import of one million tonnes of wheat is unlikely to generate much market interest due to tight supplies, and purchases could be trimmed by high prices, trade sources told Reuters on Monday. 

Most traders contacted said the State Trading Corp. would probably buy much less than the tendered one million tonnes, with prices likely to range between $280 to $300 per tonne, nearly 25-30 percent higher than last year. 

But he said the government would soon have to issue a second tender, with purchases from farmers expected to fall short of what was needed for a second year in a row. âIndia will have to import, as the procurement from local farmers is quite low. They may have to import 3 to 5 million tonnes,â the trader said. 

An official involved in import negotiations said the tender would not be extended, and said it was too early to talk about the kind of response expected. 

Others said it would make more sense to buy wheat overseas in a few months time, when supplies have improved. âIndia will not get bids for one million tonnes import as wheat from Europe will be ready only in June-July,â said a trader with a Netherlands-based commodities firm. 

Few suppliers: Traders added that since Ukraine only lifted an export quota on wheat last week, it was doubtful it would be in a position to sell anytime soon, and differences with the United States over quality controls remained. 

âThere will be no US participation. Nothing has really changed in terms and conditions of this tender from previous ones on fumigation and sampling, which could open up their participation,â said another official with an international commodities trading firm. 

Despite India scouring world markets from more than 5.5 million tonnes of wheat last year, the US did not supply any of the grain due to fumigation, inspection, and sampling problems. reuters

http://www.dailytimes.com.pk/default.asp?page=2007\05\22\story_22-5-2007_pg5_18


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## Bushroda

*India sees 8.5 pct growth in 07/08, to watch prices*
May 22, 2007
By Surojit Gupta

NEW DELHI (Reuters) - Prime Minister Manmohan Singh said on Tuesday the economy would grow by over 8.5 percent in the fiscal year ending March 2008, and the government would keep a close watch on prices.

Releasing a report to mark three years of his Congress party-led government, Singh said credible steps had been taken to tame inflation.

"We have taken credible steps to control inflation and will continue to be vigilant on this front so that the poor and vulnerable sections of society do not suffer unduly," he said.

Singh's premiership has seen annual growth rates of between 8 and 9 percent, but analysts say his government has failed to provide the investment in infrastructure and education needed to build a solid base for future expansion.

Already some sectors of the economy are showing some signs of overheating, and rising inflation has been ringing alarm bells.

Ambitious programmes to help poor farmers and create millions of jobs in the countryside have raised hopes, but many of these have foundered on poor implementation. Rural areas remain mired in poverty.

"In a democracy, people's aspirations become the goals that the governments have to measure up to. Measured against the rising aspirations of a billion plus people -- which is a sixth of humanity -- any government would fall short," Singh said.

Singh's communist-backed government swept to power in May 2004 partly because the poor in Asia's third-largest economy voted the previous government out of office after feeling left out of a city-based boom.

Measures taken by the government to tame inflation were beginning to show results, the report said, and the ruling coalition is confident of keeping inflation under control in future.

India's annual inflation rate fell below 5.5 percent in early May after running at more than 6 percent for much of the year, data showed last week.

The Reserve Bank of India, the central bank, aims to keep it close to 5 percent this fiscal year, and bring it down to 4.0-4.5 percent over the medium term.

Inflation hit 6.7 percent in early 2007, its highest in more than two years.

The central bank has raised its key lending rate five times in less than a year to contain price pressures. Although it left rates unchanged at a review last month, it said it would act swiftly if conditions warrant.

Singh said his government faced many challenges and he promised to announce a major initiative to boost public investment in the farm sector within 10 days.

"There is much we have done in these three years but much more that we need to do to win the war against poverty, ignorance and disease, and the fight against extremism, communalism and terrorism," Singh said.


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## Bushroda

*Should Indians drive cars?*
Justin Rowlatt 22 May 07, 05:11 PM 

*Now that my year of living ethically has come to an end I am free to explore the question that has haunted me throughout the last year. *

The question was raised wherever I went and whatever I did and it went to the very heart of the Ethical Man project. 

What people wanted to know was whether my ethical efforts really counted for anything when India and China are building new coal-fired power stations every single week.

Thatâs why a few weeks ago Sara, the Ethical Man producer, and I boarded a plane to Mumbai. Iâm hoping that our decision to fly wonât incur the torrent of criticism that followed my trip to Jamaica last year. The question is whether our report is worth the carbon cost. 

What we set out to explore was what Indians made of the whole idea of âethical livingâ. We wanted to see if we could create an Indian Ethical Man. 

Within days of arriving in India I got a pretty good indication of Indian attitudes. I opened the Times of India over breakfast to find that the Indian parliament had scheduled May the 8th for its first ever debate on Indiaâs role in global warming. 

That seemed a clear sign that Indian politicians are recognising that there is a problem but any optimism this might have inspired was quelled by a restatement by the countryâs environment minister of the Indian governmentâs official position - global warming is not the responsibility of developing countries like India.

Yet India is a world-class polluter. It has already overtaken Japan to become the fourth biggest producer of greenhouse gases on earth. In 2000 India was responsible for 1.89 billion tonnes of CO2 (5.6 per cent of the world total) â just a few million tonnes behind the Russian Federation - 1.91 billion tonnes (5.7%).

(For more on these figures see the World Resources Instituteâs Climate Analysis Indicators Tool CAIT)

Of course India isnât yet the carbon catastrophe that is the Chinese or American economy. In 2000 China produced a whopping 4.96 billion tonnes of CO2 (14.7 per cent of the world total). But even Chinaâs carbon count was dwarfed by the 6.87 billion tonnes of CO2 America spewed out. Thatâs a fifth (20.3%) of the world total.

Nevertheless Indian emissions show every sign of continuing their rapid growth. India has over a billion people and its population is booming. By 2050 it is expected to have overtaken China to become the most populous nation on earth with 1.6 billion people to Chinaâs 1.4 billion (see Population Reference Bureau).

By comparison to India, Britainâs emissions â 0.66 billion tonnes (1.95% world total) - seem relatively modest. 

Indeed, you only need to do some simple maths to see why the growth of the Indian economy could have such a consequence for global warming. Even relatively small increases in the incomes of Indians could lead to huge increases in carbon emissions.

For example, imagine every Indian bought a car or took a return short haul flight or even just used a tumble dryer 90 times a year. That would be enough to increase their carbon footprint by a tonne of CO2 and would add (obviously) a billion tonnes to the national total â almost twice Britainâs current total emissions.

So does that mean that India should curb its populationâs carbon consumption? 

The Indian Governmentâs policy of blaming global warming on the West is based on the fact that, over the years, India has emitted significantly less greenhouse gasses than the leading developed countries.

Between 1950 and 2000 India emitted 17.58 billion tonnes of greenhouse gasses. That makes it the 13th biggest polluter over the period with 1.58% of all world emissions. Britain has emitted almost twice that â 29.73 billion tonnes putting it in 8th place with 2.67% of global emissions. 

Once again America dominates the table. Between 1950 and 2000 it emitted a staggering 186.70 billion tonnes of carbon â 10 times the emissions of India â 16.77 per cent of world emissions.

But take a look at the emissions per person and you can see why even the Indian branch of Greenpeace argues that the primary responsibility for tackling global warming lies with the West. 

Between 1950 and 2000 each American produced 642.0 tonnes of CO2 emissions. Each Briton toted up 499.1 tonnes. Over the same period the average Indian was responsible for just 16.5 tonnes. That is one of the lowest figures for any country on earth - 164th out of 185 countries - and is less than the average American is responsible for in a single year.

That is why â after a week in India â I found it easy to understand the Indian Governmentâs position. It is also why I found it hard to begrudge Indians â in particular the two families we filmed with - some of the luxuries like cars and holidays abroad we in the West have been enjoying for years.

We are told the world needs to reduce carbon emissions worldwide if we are to avoid catastrophic global warming. If India is going to increase its emissions that means someone somewhere will need to make some carbon cuts. 

The question is who.


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## Bushroda

*Indiaâs talent resources better than global peers * 
TANEESHA KULSHRESTHA 
Posted online: Wednesday, May 23, 2007 at 0000 hours IST 

NEW DELHI, MAY 22: Those shouting doom for the Indian economy because of the impending talent crunch can take heart from this one. In 2007. Only 9% of Indian employers found it difficult to fill positions because of lack of suitable talent as against 41% of employers worldwide. 

Whatâs more, as opposed to the global trend, the crunch seems to be easing off in India as just last year 13% of Indian employers reported difficulty in hiring. Remarkably, the 2007 figures are also the least of all country statistics reported by the global recruitment firm Manpower that conducted the study in late January 2007. 

The survey covered 37,000 employers across 27 countries, including 4,858 employers in India. Other countries where the talent shortage is not so severe are Ireland (17%), Netherlands (17%) and China (19%). Those looking for a job can also head out to countries like Costa Rica (93% reporting shortages), Mexico (82%), New Zealand (62%), Australia (61%) and Japan (61%) and Singapore (57%) that have stark demand-supply gaps when it comes to human resources. All the above countries reported an increase in difficulty in hiring over 2006. (Costa Rican figures for 2006 are not available). Clearly, the talent crunch situation in these countries is much worse in comparison to India. 

Within India, the top ten jobs that employees find difficult to fillâin order of rankingâare engineers, IT staff, technicians, sales representatives, teachers, marketing staff, management/executives, skilled manual trades, accounting and finance staff and receptionists and front office staff. 

The Indian situation is similar to the rest of the world when it comes to specific skill pool scarcity. âAcross North America and Asia, the top three talent shortages are identical-sales representatives rank number one, followed by engineers and technicians,â said Jeffrey A Joerres, chairman & CEO of Manpower Inc. 

The Manpower survey also notes that while demograhic immobility can cause talent shortages within countries, in Indiaâs case the problem seems to be easing with much of the recruitment being done outside of Bangalore and Mumbai, cities that were hubs of recruitment earlier. 

âThe talent crunch is strongest in engineering jobs as compared to last year when sales representatives topped the list of jobs lacking suitable talent availability,â said Manpower Indiaâs executive chairman Soumen Basu.


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## Bushroda

*Leighton taps into Indian boom with joint venture*
May 22, 2007

A SUBSIDIARY of construction and mining group Leighton Holdings has signed a $US2.5 billion ($3 billion) joint venture with a major Indian developer.

As part of the deal, design and construction work will be carried out by Leighton Asia (Southern) with developer Emaar MGF Land Pvt over five years. The project is a 50:50 joint venture and will be known as Leighton Construction India Pvt.

Leighton signed the deal in Delhi yesterday, with the executive vice chairman of Emaar, Shravan Gupta, and Leighton Asia managing director David Savage undertaking the formalities.

"Both the Indian economy and property market are booming," Mr Savage said. "By forming a partnership with India's leading developer we will be able to benefit from this boom."

Emaar has projects planned across India in residential, hospitality, commercial and retail. It is also involved in IT, education and health care.

Mr Savage said the large pipeline of projects would consolidate the company's long-term future in India.

The announcement comes as Emaar plans the development of a series of residential and retail projects. Some of the community developments would include hospitals and schools. Offices and IT parks are among other projects.

Since establishing operations in Mumbai two years ago Leighton Asia (Southern) has secured 10 projects worth almost $US600 million, including contracts for Nokia, Motorola and Reliance.

Leighton shares rose $1.42 to finish at $43.05 yesterday.

Agencies


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## Bushroda

*GEs outgoing India head upbeat about reform*
Wednesday, May 23, 2007 10:24 AM

BANGALORE (AFP) - General Electric's outgoing India CEO Scott Bayman says he is confident politics won't alter the course of economic reform that has changed the face of a country he made his home for 14 years. 

Bayman, 60, whose retirement was announced on Tuesday, took the helm of the US giant in India two years after a bankrupt government reversed decades of socialist-style economic policies that shut the doors on foreign investors and fettered private enterprise. 

He has watched a variety of coalition governments riven by factional rivalries come and go and witnessed the transformation of the nation of 1.1 billion people into an emerging economic powerhouse. 

"I have been here through six governments and five prime ministers," New Delhi-based Bayman said in a phone interview with AFP on Tuesday. "Certainly I can say today that liberalisation is not dependent on any one political party." 

During Bayman's Indian tenure, overseeing businesses ranging from jet engine sales to consumer loans and water to power plants, the pace of economic reforms has varied as the nation passed through an era of coalition governments. 

Resistance from leftist allies has forced Prime Minister Manmohan Singh's Congress party-led government, in power for three years, to put on hold moves to fully open up the retail industry to foreign companies. 

It has frozen asset sales and stalled banking and insurance industry reforms. 

But the spirit of reform is here to stay regardless of politics, said Bayman, who swears by the potential of an economy that has expanded at a yearly pace of 8.5 percent for the past three years the most after China. 

"I think this country has a terrific future," the GE executive said. "For an emerging economy, the country risk is very attractive you got a very strong regulatory environment, the rule of the law, a strong domestic market. 

"India isn't very dependent on exports so it can sustain an external downturn better than most. And manufacturing is proving to be a powerful force, as much as IT-enabled services." 

For Stamford, Connecticut-based General Electric, India has become the fastest growing market in the world, after once being an often frustrating place to do business. 

"We were initially disappointed by the lack of growth and market size," said Bayman. 

"Some others left but we said we are going to stick it out," he added. "Today it's looking much more like what we thought it would be." 

A 300 million-strong middle class that prospered as the economy grew and incomes rose has been at the forefront of the economic change. 

Indians are travelling more by plane, opting for better-quality healthcare and taking loans. 

"We have got growth pretty much across the board," Bayman said. "Infrastructure first, jet engines, oil and gas, energy, healthcare, financial services... we are not dependent on any one particular business." 

From one billion dollars of sales in 2005, GE India expects to log close to three billion dollars in revenue this year, a figure that it expects to swell to eight billion dollars by 2010, Bayman said. 

Bayman will hand over to Tejpreet Singh Chopra, a 10-year GE veteran and the first Indian to be given the conglomerate's top job in the country.


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## Bushroda

*City of London offers a helping hand* 
Express News Service 

Mumbai, May 22: Look who is ready to help Mumbai. The City of London, considered to be the worldâs leading international business district along with New York, has offered to support the cityâs mega plan to become an international financial centre. 

Lord Mayor of the City of London John Stuttard, who represents UK-based financial services, said: âIndiaâs high-powered expert committee on developing Mumbai as a world-class financial centre described the City of London as its ânatural reference pointâ and we are keen to partner with the Indian government as it works to develop its national economy.â 

Stuttard, accompanied by a 40-strong senior business delegation, will be in city this week to explore how the City of London can work with the Government of India to help in making Mumbaiâs dream a reality. 

âThere is of course tough competition from other regional financial centres: Singapore, Dubai, Hong Kong. To compete with these, business in Mumbai needs to be given the right platform for growth,â he told Newsline. 

Echoing what the Percy Mistry Committee report saysâit has been released for public debateâStuttard made it clear that more action is needed. âA good location is not sufficient, regulation has to be business friendly, taxation competitive and market infrastructure needs to be in place.â 

âThe City knows ambition and vision can succeed, but also that it takes hard work and determination and innovation. Itâs an exciting time for Mumbai and the UK is looking forward to continuing dialogue on how it may help with the challenges that lie ahead,â Stuttard said. 

The UK is already on India Incâs radar for expansion with companies making several big-ticket acquisitionsâTata takeover of Corus and UB acquisition of Whyte and Mackayâin the recent past. 

âThe first thing I would say is that the Indian Governmentâs continuing economic reform programme is welcome, indeed vital, to enable the country to secure a permanent place as one of the worldâs most prosperous nations,â he said. 

âSecondly, the City is here to share our experience of what public private partnerships (PPP) can offer in terms of funding both social and trade infrastructure. These can help drive economic growth.â 

In general terms, partnerships are key to Indiaâs future development in a global economy. âSo my final advice would be to work with the UK companies seeking to foster closer links with India and break down protectionist barriers which hold back trade and investment,â Stuttard said.


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## Bushroda

*Supermarkets devour Indian traders* 
By Sanjoy Majumder 
BBC News, Delhi 

For generations, Indians have shopped for food and groceries at open markets and from roadside vendors. 

But this is now beginning to change as a number of large Indian companies are setting up western-style supermarket chains to cater to the country's growing middle class. 

The American chain Wal-Mart is poised to enter India next year and the UK-based Tesco is hoping to follow - all hoping to corner a part of a retail market valued at $330bn a year and growing all the time. 

But as Indians change the way they shop, it's also beginning to affect the lives of millions of people who work in the large, unorganised retail market. 

The vast majority of them are poor villagers who migrate to the city in search of work and end up selling fresh produce in a neighbourhood market or from a pushcart on the street. 

*Noisy and colourful *

As dawn breaks out, most Indians head out to their local market. 

Noisy and colourful, the markets are typically set up in the open air, with only the simplest of protection against the elements. 

Most of the sellers squat on the ground, on burlap mats, surrounded by an astonishing variety of seasonal fresh fruits and vegetables. 

Spencer's Vice President Samar Shekhawat 

Succulent watermelons compete for space with apples and oranges while in another corner green leafy spinach and fresh mint is piled up high. 

Bag in hand, the seasoned shopper moves from store to store as the sellers call out to them. 

They stop to examine and haggle before they strike a bargain. 

At the end, they walk away with a day or week's supply of fresh produce for the family at unbeatable prices. 

This is the Indian retail industry - unorganised, seemingly chaotic but generating sound business. 

But now, there are signs of a change. 

*Competitive prices *

Across Indian cities and towns, brand new supermarkets are rapidly cornering a slice of the business. 

In the capital, Delhi, India's giant Reliance group have set up a chain of Reliance Fresh stores, selling fresh produce at competitive prices. 

But for a sign of the future, I head to the upmarket suburb of Gurgaon and the newly opened Spencer's hyper mart. 

It's aimed at suburban shoppers - most of the people wandering through the shiny aisles are professionals - doctors and lawyers, IT workers and bankers. 

*Indian shopper Mrs Chibber *

On offer is several thousand square feet of air conditioned space with just about everything under one roof - fruits and vegetables, meat and fish and freshly baked bread. 

There are also electronic goods, clothes, fast-food counters and a bookstore. 

Samar Shekhawat, vice-president of Spencer's, says this is one of eight hyper marts spread across the country. 

"We would like to provide consumers a 360 degree solution - the husband can browse through the bookstores, while his wife shops and their children grab a snack at the cafe. 

"It is our belief that people have moved from asking for value for money to paying money for value," he adds. 

With a wide-range of produce and products, chains like Spencer's can offer competitive prices and it's an experience that's clearly going down well. 

Mrs Chibber is a lawyer and has a family of four. She's shopped in traditional, local markets all her life but now she's made a lifestyle change. 

"In my local market, I had to spend a lot of time going to several different shops in the hot sun. And you still may not get what you want," she says. 

"But here you have a wide variety of goods, everything is available and it's comfortable. You are not exhausted by the time you go home," she says, as she wheels her trolley towards the check-out line. 

*Most vulnerable *

Even as middle-class Indians are beginning to enjoy the fruits of a retail revolution, it's beginning to threaten many others who survive on the trade. 

Indu Prakash Singh works for Action Aid and believes that it is creating a major problem. 

"Millions work in the unorganised retail sector. They are also the most vulnerable because they work long hours for relatively low margins. They are being directly affected. 

"We have already seen that in places where these supermarkets are coming up, local vendors are losing 40% of their business. What we are seeing is a big divide being created, between the super elite and the poor." 

You don't have to travel far to cross the divide. Less than a few kilometres from affluent south Delhi is the sprawling neighbourhood of Sangam Vihar. 

It's congested, with houses built so close to each other that they block out natural light. 

Dirt-tracks pass for roads where children play amid ***** - from the open-drains on either side and the garbage strewn around with flies buzzing. 

This is where many of the vegetable sellers who cater to south Delhi live. 

Mukesh, a vegetable seller, is slowly wheeling his cart back home. 

His day began at four in the morning, when he set out for the wholesale market an hour away by foot. From there, it's another hour to the market where he plies his trade and then another couple of hours back home. 

But the past week has been nothing short of disastrous for him. 

*Booming economy *

A brand new Reliance Fresh store opened down the street and he's lost half his business. 

"I'm struggling to sell most of my vegetables. Whatever is left over is simply sold at half-price or thrown away. I cannot store them," he says. 

He has four children and his wife is worried about the future. 

"It's expensive living in Delhi. If we have no money, there's not enough to eat and pay our bills. I really don't know what we'll do," she says. 

I ask Mukesh if he can find any other work - maybe even at the supermarket. 

He laughs. 

"There are educated people in this city who are unemployed. How can an illiterate man like me expect to find work? 

"No, I don't think there's much else to do. If I can't make it here, we just have to go back to our village." 

There are 40 million people like Mukesh employed in India's unorganised retail industry. 

Like him, they depend on daily earnings to support their families. And as India transforms under its booming economy, they're beginning to wonder if there's a place for them in the new India.


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## Bushroda

*Railways to clear tracks for development* 
RAJAT GUHA
TIMES NEWS NETWORK[ WEDNESDAY, MAY 23, 2007 01:42:07 AM] 

NEW DELHI: The countryâs biggest land owner, the Indian Railways, will soon be able to freely use vast tracks of its unutilised land to build malls, agri business hubs, a dedicated 2,700 km freight corridor and a bullet train project each in four corners of the country. 

The government plans to amend the Railways Act, 1989, empowering the railway ministry to utilise excess land without hindrance, in the same manner the National Highway Authority of India acquires land for highway projects. The Railways are currently unable to tap nearly 43,000 hectares of land alongits tracks for commercial purposes dueto legal interference by the state governments. 

The move will pave way for the construction of the Rs 30,000-crore freight corridor which despite having been cleared by the Union cabinet is held up due to objections raised by respective state governments. The amendment, which have been proposed in a cabinet note, would take away the powers of the states, a source in Rail Bhawan said. 

The amendment among others would help the Railways to evict illegal occupants of its land. In Delhi alone, about 40 hectares of land is being illegally occupied for more than three decades. Despite repeated efforts by the Railways, the state authorities have not been able to remove them. 

The Railways have circulated the note to seek the comments of other ministries after which it will put up the amendment for Cabinetâs approval.The Railways are pushing for the amendments as delays in implementation of the freight corridor and the agri-hubs would not only result in huge losses for the government but also delay the creation of much needed infrastructure to sustain a booming economy. The cabinet has already cleared a East corridor linking Kolkata with Ludhiana and a west corridor connecting Mumbai with New Delhi. The corridors pass through around a dozen states and was slated to be completed in five years. Companies such as GE, Alstom, Siemens, Bombardier are hoping to cash in on the freight corridor to expand their business. 

*In addition, the Railways are planning to utilise part of the land to build commercial projects like agri business hubs and organised retail. It has been in talks with companies like Reliance Retail, Future group (Pantaloon), Tatas and AV Birla group for setting up agri business hubs on its land. It would also require land from states to construct four high-speed bullet train corridors in all four corners of the country.*


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## Bushroda

*Appeal To The Indian Left From A Progressive Pakistani: Evolve Alternative Paradigm of Economic Growth*
by M.B. Naqvi
Saturday 19 May 2007



> The following is what the author wanted to present at a meeting in Karachi when the leaders of the two Indian CPs&#8212;the CPI and CPM&#8212;visited Pakistan in the recent past. &#8212;Editor



I intend to ask a few questions to you. But first the perspective in which I am talking.

The international order as it has developed since the 1990s has been profoundly disturbing. I am sure you will share my overall assessment of a unipolar world in which one nation possesses far too much military strength and has consciously decided to make the fullest use of that military strength for its political as well as economic interests. In the name of leadership it has dominated the world. It seeks unquestioning privilege of intervening wherever it wants to and reserves the right to pre-emptive military action. Its conduct is not always truthful. I believe you share my belief that this international order is not acceptable. There is far too much of imperialism in it.

Insofar as imperialism is concerned, it has gone beyond the export of capital as Lenin in 1919 had defined. It focuses today on a certain economy containing a given quantum of resources and the potential for development. The name of the game now is to develop an economy for the greater profit of the developer.

But the name of the game in politics for the US is to get control over the sources of strategic raw materials, especially oil. The American thrust in Asia stands on a tripod. The first leg is the Middle East that the US regards as its backyard insofar as Asia is concerned. The second leg is its strategic alliances with Japan and Taiwan. The third leg is the US-India alliance with Pakistan somewhere precariously attached. One does not mention in it the smaller Far Eastern countries and Australia that I regard as more or less a part of the American power system in Asia (the first leg).

An additional theatre is the policy toward the former Soviet Union and China. Insofar as the Soviet Union is concerned, it began by befriending it and in the name of promoting human rights and democracy it is ensuring the dilution of the old Russian influence in the Central Asian Republics as well as encouraging minority states within the Russian Federation to assert against Russian authority. How that is to be assessed is the question. Does it or does it not sum up a policy of encouragement of fissiparous tendencies in the Russian power system so that it comes down?

More questions concern China. The rise of Chinese power and its economic growth has caused worries to the US. But until the end of the Clinton era in American politics the policy was to encourage China&#8217;s growth and try and assimilate it in the American-led comity of nations. There were, of course, voices from what is described as the security community. They regarded China as a potential rival. But those voices remained in a minority. The government was committed to a policy of assimilating China in the American-led international system. But the start of the Bush era changed that. The Americans have not entirely given up the policy of engagement. The growth of Sino-American trade is a staggering phenomenon that rivals the American-Japanese trade. China appears to be earning $ 163 billion per year surplus in trade with the US. But the Americans dare not blackball Chinese exports. Supplies of consumer goods and simpler technological goods is so vital a component of American consumption that its discontinuation or even diminution would hurt America more because it is sustaining a standard of living that cannot be paid for by American exports alone. America has of necessity to run huge deficits with China, Japan, Germany and, of course, oil producers around the globe. It is easy for it. All it has to do is to print dollar bills. The US is today world&#8217;s greatest debtor. But instead of being vulnerable to foreign pressure, it holds its creditors in thrall. The creditors dare not withdraw the bulk of their deposits from the American financial system for fear of the dollar&#8217;s crash. All their credits will become worthless. It is the Americans who hold the whip hand despite being the Big Debtor.

The American modus operandi in the economic field is, of course, to earn as much as it can. It has revived the cruder form of capitalism everywhere. The policy originated in what is remembered as the Washington Consensus that gradually became the credo of the governments of Margaret Thatcher in Britain and Ronald Reagan in America. It came to be known as the deregulation, privatisation and liberalisation paradigm. Free trade has become the chief slogan. The intention is to create a global market in which there are few or no tariffs. The whole globe should comprise one economy. This economic theory is supposed to benefit all manner of countries at all stages of development. Let&#8217;s look at what has so far occurred?

&#8212; 

THE former colonies comprising the so-called Third World are increasingly at the receiving end. A growing number of economies have gone belly up, especially in Africa. In the normal course of events in all capitalist economies, there are some winners and some losers. Only the losers are many more than the gainers. That is the normal feature of capitalism as you know better than what I do. At the international level, it is the same. Scores of countries have become basket cases with heavy indebtedness. The IMF and World Bank have a hard time rescheduling and writing off some of their debts without hurting the financial system of the West. The process is going to accelerate as globalisation increases.

Globalisation&#8217;s working inside each developed economy is the same. It produces losers&#8212;who lose jobs and whose standards of living tend to become lower&#8212;while the gainers, of course, become richer still. The process can be watched not far from the place we are sitting today. I mean the spectacular economic growth of India in recent years has intensified poverty, whatever its quantum or extent. I find it is a controversial matter among economists. The Indian Government insists that it is no more than 24 per cent and it is decreasing. The independent economists, especially those on the Left, find it actually growing or at the very least stagnant. But those above the poverty line as defined are also not necessarily rich. The cream is appropriated by some 250 to 350 million Indians. The rest try to make the two ends meet by my non-scientific estimate. It is the same in Pakistan. Its governments did mimic its Indian counterpart about the prospects of growing at eight per cent and above. And poverty was to get reduced through the trickle-down process. Although the recent earthquake in the northern parts seems to have created doubts whether really high growth rates can be maintained in the sectors of economy that are prone to grow faster.

This is a field about which I need not go further. But I would ask a question: those who do not like the present paradigm of economic growth known as &#8216;reforms&#8217; or the globalisation scheme carry a moral responsibility. They have to offer an alternative paradigm. It is not enough to condemn globalisation as iniquitous and as something that will not help the poor. It helps mainly the rich. There is no doubt that it will go on doing these things. The point is: how do we counter it? I am aware that the American masses surprised the world by the strength of their protest in Seattle some years ago. Then the Europeans picked up the theme and their protests against G-8 and even OECD have only grown. Today the leading capitalist countries meet in international conferences amidst the tightest possible security. They dare not operate freely even in the developed West that stands to gain more than the people in Asia. The popular protests against Americans and the other leaders of the West, who are propagators of the globalisation programme, are now a familiar feature, as Hong Kong the other day has shown. There is something missing that is terribly important. What is missing is an alternative vision&#8212;a vision of what can replace it.

Needless to say that even the Left today cannot go back to Stalinist planning and theover-centralised and bureaucratic economic management. A certain amount of market mechanism for allocation of resources and various other purposes, including pricing of goods and services, will be needed. Private capital as such has to be given a defined scope for doing its business. The allocation of resources by bureaucrats is not now an option. But will it now be free market forces that will determine everything from choosing what to produce and selling it at whatever prices they wish? That is what the Americans advocate. The point is: what does the Left advocate?

&#8212; 

FRIENDS, I wish to address mainly our guests from India. Naturally the question arises: what can Pakistanis learn from the Indian political life? I suggest that the Left in India has to evolve a coherent economic policy or paradigm that should guide Indian economic development in days to come. That would provide the means for mass mobilisation to preserve India&#8217;s independence in decision-making and to give its affairs direction that will enable the people of India to make economic progress primarily for the benefit of the common man. But immediately following it is the consideration that all freedoms guaranteed by the Indian Constitution, that distinguish it from semi-dictatorships in the Third World, should be preserved. In other words, the economic paradigm must preserve all political liberties while raising the standard of living of the common Indians&#8212;who are today being left out of the economic miracle that is supposed to be underway. It does look to me that the Indian mainstream parties have not adequately learnt the lesson from the election of May 2004. The downfall of the NDA Government represented the disenchantment of the common people, particularly in the villages, with the economic policies which Dr Manmohan Singh originally initiated. Dr Manmohan Singh is not expected to move far out of the four walls of that policy which happens to be what the World Bank, IMF and American Treasury believes to be the panacea for all the world&#8217;s ills. The aim of most of our Indian guests today can only be to overcome poverty of the bottom 50 per cent of the population and to raise their cultural level&#8212;the real purpose of economic development. It requires thoroughgoing research in economics in the quest for a set of economic policies that would directly attack the poverty of the broad masses and which raises their political and cultural awareness amidst all necessary freedoms. I would underline the need for this research. India particularly is endowed with a wonderful human resource base; there are excellent economists on the Left as well as the Right. I would suggest that the parties of the Indian Left should pool their human and financial resources to create a Planning Commission with a view to arriving at a proper economic development plan for India.

Immediately following that I would suggest that India should actually become a leader of South Asia. There are historical similarities in all the South Asian countries, particularly with India in each member of the SAARC today. These are all neighbours of India primarily and most of the ethnicities in India have overshot the political boundary to share with particular neighbours. For instance, the language, culture and sensitivities of West Bengal are, to a large extent, shared with Bangladesh. Similarly there are many commonalities of ethnicity between the Indians and the Nepalese. Much the same can be said about Pakistan and India. And so on with Sri Lanka. Only Afghanistan, a new member, is not contiguous to India. But via Pakistan there are historical and some ethnic commonalities among India, Pakistan and Afghanistan. All these countries need economic development as well as democracy. The need for freedom is as strong in Pakistan as in India or in Bangladesh or in Nepal or Sri Lanka or other places. The Planning Commission that the Indian Left parties may establish should aim at creating a viable regional economic entity in the shape of a reinvented SAARC by putting a social and economic content in the idea behind SAARC: regional integration of a given kind.

The purpose of planning in all the six countries has necessarily to be the same as in India. That Planning Commission can have a political wing too. It should consider political strategy primarily for the Indian Left and extend it to relations with various members of the SAARC. Politics in all the countries have to be not merely informed with the spirit of the economic policies but also be based on those economic policies. In other words, the main thrust of the politics of the pro-people parties should be basically similar economic programmes.

One would suggest that a set of common slogans or policies has to be found that will fire the imagination of the masses. My humble suggestion would be that it is now time for the Indian Left to go well beyond the limited Employment Guarantee Scheme that is hopefully being implemented by the UPA Government today. It should call for a bold departure here: the aim should clearly be Social Security for all; jobs for all have to be created and in the case of not being able to provide jobs to all unemployed, or largely unemployed, the state should be provided with some compensatory allowances. The size of the allowance can be as low as indicated in the Indian scheme today or better. But any country that is embarking on a plan to make Social Security the sheet-anchor of its economic policies will have to reorient its politics in the same way. The present rush of the Indian establishment to make India a tremendously strong military power is actually unnecessary and a wastage of scarce resources. India needs to make Social Security the sheet-anchor of its policies. That will ensure its social and political integrity much better than a much stronger Indian Army. Human security ought to be taken seriously, at least by the Left. If economic programmes are made that way, the Left can perhaps move out of its provinces of West Bengal, Tripura and Kerala. It is time for the Left to properly lead India directly on its own behalf.

Incidentally while suggesting a broad shift from the present course of making India a great military power, this can only succeed if the Left presents and makes it acceptable to most Indians a new policy vis-Ã -vis Pakistan, the arch rival that has nuclear weapons. Pakistan needs to do exactly the same. Should there be a strong Leftist push against militarisation of the economy and society in India, it will rub off on Pakistan. The much smaller Left here, that does not like militarisation, can take a harder line if they are strongly supported by a more pacific Pakistan policy by India. Similarly India should have pacific policies toward other neighbours based on equality and fair-play. But it is not a very simple matter. India has come of age as a capitalist economy. Imperialism is just a step ahead of capitalism&#8217;s success anywhere. The more a capitalist economy succeeds, the more it moves into other parts of the globe, tries to corner markets exercising control over the resources of other countries. Indians are entering that stage. Indian multinationals are beginning to find their feet&#8212;elsewhere too. This is now the time to make a great dash for pacific and true development-oriented policies. That would help Left-learning liberal elements in other countries of the region to do the same. South Asia should be aimed at becoming an island of prosperity and social progress in the globalised village.

&#8212; 

THERE is a short-term policy conundrum for the Left in India. I do not think it is a major or fundamental question but it remains a question for today: how far can the Left go in supporting the UPA Government in Delhi, when the Delhi Government is hell-bent on becoming the core ally of the US and pursuing a military policy that virtually pre-empts social progress of the kind implied here? It is obvious that either the UPA Government has to restrain its love for America and globalisation or the Left will have to draw a line somewhere. One sometimes fondly thinks that there would be a split in the Congress now. It has become necessary. Those who go with Dr Manmohan Singh&#8217;s preferred course would be those who are ideologically or otherwise closer to the BJP than to the Nehruvian Congress. The other Congress, possibly run by Sonia Gandhi, would remain loyal to an independent foreign policy and an economic policy which is at least quasi-socialist. If this were to happen, the Left can then have a stronger working arrangement with that Congress. But I do not see today an Indira Gandhi who would intentionally split the Congress and isolate the true succesors of the Syndicate of the 1960s.

There is another minor question of there being half a dozen Communist Parties and a few nominally Socialist ones. The origins of most divisions date back to the 1920s and 1930s. That age has gone. The issues that divided the various Leftist-inclined parties are no more. In India one is told the activists of various Leftist factions or parties are freely cooperating over local matters. It is only the leaderships that differ. Even they do not differ much over significant matters of economic or foreign policies. They only differ among themselves for personal or at most for partisan reasons. The controversial issues today are globalisation, foreign policy in this new age and the security questions about Asia. On these questions there are deepening differences now emerging in India whereas in the last almost six decades there has been a consensus over foreign policy. Economic policy should now divide the Indians. The issues of today should be purposefully focused on and new programmes have to be evolved. For that purpose the old differences between the Leftist groups and parties are meaningless. They refer to the controversies of the past, especially over who would interpret Marxism better for the comrades. The challenge today is a new programme to be evolved by all the Leftist groups and parties together. That would produce political unity as well.

_The author is a renowned veteran Pakistani journalist based in Karachi_


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## Bushroda

*China, India 'a huge opportunity' for UK financial services sector - ITEM* 
Published : Mon, 21 May 2007 00:18 

LONDON (Thomson Financial) - China and other emerging markets represent a 'huge opportunity' for the UK financial services sector, but the government must invest to maintain the UK's comparative advantage in the sector, a leading economic consultancy has said.

According to the Ernst & Young ITEM Club special report on the financial and business services sector (FBS), the UK's comparative advantages in the sector -- which span from its open economy and regulations to its initiative-taking work culture -- allow it to sell these services very competitively across the board, including in emerging markets such as India and China.

'There are huge opportunities for UK services in India and particularly in China as those markets become more open and their customers become wealthier,' said Peter Spencer, chief economic adviser to the ITEM Club.

The UK's long-established reputation is another key to its success in the area, Spencer said.

'We have a reputation for high quality in financial and business services. We have the same type of 'Made in Britain' label in this area as we used to have in manufacturing,' he said.

Furthermore, the UK's lead in the area has been self-reinforcing, as talent from elsewhere has been attracted to the UK, creating a 'dynamic comparative advantage', Spencer said.

The ITEM report predicts the UK financial and business services sector will continue to grow at 4 pct or more annually over the rest of the decade, after rising by 3 pct a year on average since 1997 -- in stark contrast to the fortunes of the manufacturing sector, which has barely grown in that time.

More than half of the new jobs created in the past 10 years have been in financial and business services, and the sector now employs nearly 30 pct of the workforce as against 14 pct in 1980, it notes.

'It is the key to the UK's future prosperity,' Spencer said.

However, the sector's continued success is not guaranteed. ITEM warns that the UK government must invest in skills and infrastructure to support the sector, as well as ensuring that regulations do not drive business away from London.

The most obvious risk to the sector comes from competition from emerging markets, which have cheaper labour costs. Some UK jobs in the sector are bound to be off-shored to cheaper labour markets, Spencer acknowledges.

'We will certainly lose business,' he said. 'A lot of legal work, for example, will be carried out in India.

'But the more sophisticated, value-added work will take place in London and it will take places like Hong Kong and Mumbai an awfully long time to catch up.'


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## Bushroda

*Indiaâs slice of global trade gets thicker* 
ECONOMY BUREAU 
Posted online: Wednesday, May 23, 2007 at 0000 hours IST 

NEW DELHI, MAY 22: Indiaâs share in total world trade, including trade in merchandise and services sectors, has gone up from 1.1% in 2004 (the initial year of the Foreign Trade Policy from 2004-09), to 1.5% in 2006, according to statistics released by the WTO. 

âBased on the current rate of growth of merchandise and services trade, it is expected that Indiaâs share in world trade covering merchandise plus services sector may double from the level of 2004 to cross 2% in 2009,â commerce and industry minister Kamal Nath said. 

As far as only merchandise trade is concerned, Indiaâs share in global merchandise trade may increase from 1.2% in 2006 to 1.5% in 2009, Nath projected. Indiaâs share in merchandise trade has increased from 0.9% in 2004 to 1.2% in 2006. 

Meanwhile, trade in the services sector has recorded an even higher growth, resulting in an increase in the share in world services trade from 2% in 2004 to 2.7% in 2006. 

In the Foreign Trade Policy in August 2004, a medium term horizon for export growth was envisaged and the share of Indiaâs merchandise trade in world trade was targeted to double in 2009. 

According to the World Trade Statistics of the WTO in 2006, Indiaâs total merchandise trade (export and import) was valued at $294 billion in 2006 and trade in the services sector inclusive of export and import was $143 billion. 

Thus, Indiaâs global economic engagement in 2006, covering both merchandise and services trade, was worth $437 billion, up by a record 72% from a level of $253 billion in 2004. According to WTO, the world economy and trade grew vigorously in 2006, the 8% expansion in merchandise trade being the second highest since 2000. 

The report said the least developed countriesâ trade grew 30%, fuelled by higher prices for petroleum and other primary commodities. Developing countriesâ share of world merchandise exports reached an all-time record of 36%.


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## Bushroda

*Kashmir's thriving economy*
*Despite being labeled a conflict zone for 17 years, Kashmir shows surprising economic potential.*

Four years ago, when Jehangir Raina, a UK-based Indian businessman, decided to start an information-technology company in Indian Kashmir instead of in hot spots like Bangalore and Gurgaon, business analysts frowned at the risky plan. But Jehangir Raina saw in this conflict zone what only a few others did: business potential.

"Initially, our clients were reluctant to do business with a company not based in a metro, but in a conflict zone in the Himalayas," the Indian businessman told ISN Security Watch. "Once they saw potential in us, their reluctance disappeared."

Over the years, I-Locus, Raina's market-research IT company, has managed to woo more than 200 international clients, including Microsoft and Wipro.

Raina has come to believe that more than the threat itself, the perception of threat dissuades the outside world from looking at Kashmir as an investment option. His business success story seems awe-inspiring in a region that has been a crucible of terror and fear for 17 long years. Nearly 40,000 people have died since the insurgency began in Kashmir in the early 1990s.

However, Kashmir 's economy, growing at nearly 5 percent - although sluggishly compared to India 's national average growth of 9.2 percent - defies the myth that conflict must stymie economic potential.

Surprisingly, Kashmir negates all perceptions of a troubled region. Unlike most conflict zones, there are no bombed out houses here, no empty shops, and few people living in abject poverty. What is conspicuous, in fact, is a booming real estate market and a populace that has formidable spending power under the circumstances.

That was enough reason for HDFC, a private bank, to open a branch in Srinagar, the state's summer capital, two years ago. Like I-Locus, many prudent financial analysts in the country blanched at HDFC's ambitious move. No private financial institution was then willing to risk investing in a conflict zone often roiled by bomb attacks.

"Many businessmen are scared of coming to this dangerous place," Adil Nisar, a senior manager at HDFC, told ISN Security Watch during an interview at his plush office in central Srinagar. "We dared."

That daring is today earning the bank rich dividends. After a short period it has accumulated over 8,000 accounts and has fetched business worth nearly INR 2,500 million (approximately US$61 million).

This year, the bank plans to start five more branches in the state, two of which will be in Baramullah and Pulwama, both districts often in the news for militant activities. The move, although potentially dangerous, demonstrates instinctive business acumen. HDFC hopes to cash in on a rich orchard-owning clientele that has long felt the void of a full-service bank.

Extreme poverty is rare in Kashmir. According to government statistics, in the rural and urban areas, only 3.97 percent and 1.98 percent of Kashmiris, respectively live below the poverty line. In the rest of India, those figures are 27.09 percent and 23.02 percent.

Thanks to land reforms in the early 1950s by Sheikh Abdullah, Kashmir 's first prime minister, a majority of Kashmiris are land owners, something that has contributed to the personal wealth of a large population here.

Ironically, the conflict, too, has enriched Kashmir in some ways. Over the last 17 years, the state has built a large conflict-economy with the central Indian government in New Delhi granting it special treatment. Since 1990, when the insurgency exacerbated security problems, 100 percent of Kashmir's budget has been financed by New Delhi, of which only 20 percent is repayable. Generally, the central government funds only 20 percent of the cost of federal state development, requiring the states to raise the rest.

Also, even though tourism, Kashmir's main revenue earner, declined during the years of militancy, the huge expansion of the Indian armed forces in the region since the insurgency began made up for some of the losses, say local businessmen. Over 600,000 Indian military personnel, all potential buyers for local products, are currently based in Kashmir.

*Shifting fortunes*

But now that the violence is ebbing, Kashmir's fortunes may shift, Daniel Markey, senior South Asia Fellow at the Council on Foreign Relations in Washington, says in an email.

"Now, we may be seeing the beginnings of a post conflict economy in Kashmir," he says. "Reducing violence means that the cash of the conflict economy can now safely be invested in the state to build lasting businesses."

Kashmir's political class seems eager to slough off its image of a conflict-zone. Setting an ambitious target of 8 percent growth in the next few years, Tariq Hameed Karra, Kashmir's finance and planning minister, says the region's economy is at a "take-off stage."

The government, in a bid to lure investors, has for the last few years been offering industries setting up operations in Kashmir 100 percent excise tax exemption for 10 years from the date of commencement of commercial production. In its annual budget this year, India 's finance minister announced that this tax holiday would continue for five more years, until 2012.

Initiatives in IT are new in a state where almost 90 percent of the population has long eked out a living on agriculture, handicrafts and tourism.

Buoyed by the tax incentives offered by the government, BQE Software Inc. set up office in Kashmir six years ago. Since then, its manpower has gone up from six to 40. A software company based in Torrance, California, and owned by Shafat Qazi, a Kashmiri-American, BQE sources a major part of its software development to its Kashmir office.

Kashmir offered Qazi some advantages. One, the work force came considerably cheaper, nearly at half the rate compared to other Indian cities. Two, setting up business infrastructure was cheap and relatively free of red tape.

In a region that virtually shuts down after the sun sets due to security concerns, observes office manager Ikhlaq Bhat, his staff's office hours have transcended the work culture generally prevalent in this troubled region.

"Now the staff works late hours," Bhat tells ISN Security Watch. "Work continues even if there's a hartal  in the city, or even if a bomb goes off."

A drive down a smooth macadamized road 10 kilometers from Srinagar leads you to Rangreth, a mammoth, high security industrial estate that houses some 189 small and big business and industrial units, including fruit processing, electronics, power generation and IT. Set up in the mid-1990s by the Kashmir government, this was intended to woo businesses.

Amid the whirring of generators in the estate, it is hard not to notice a few units that remain desolate. A few industries, because of security concerns, packed up and left Kashmir for good in the 1990s.

In the last couple of years, some as enterprising as I-Locus and BQE, have begun exploring opportunities here again. Even if there is a terror attack close by, work continues unabated in this cocooned estate. The government is doing its best to spruce up infrastructure to lure businesses. In the vicinity of the estate, the Software Technology Park of India (STPI) has come up which provides broadband connectivity.

However, over the years, the scale of businesses has remained very small compared to the rest of India. In a country bursting with the excitement of an economic boom, as India Inc. has taken a strident leap, Kashmir Inc. is still far behind, local businessmen rue. At US$419, the per capita income of the region is only two-thirds of the national average of US$632.

Unemployment in Kashmir - regarded to be a reason that lures the youth towards militancy - stands at 4.21 percent, according to the National Sample Survey Organization (NSSO), against a national rate of 3.09 percent. Kashmir, according to government statistics, today has 183,000 unemployed youth in the highly educated category.

*Obstacles to development*

Analysts say that Article 370, a piece of legislation that guarantees autonomous status to Kashmir, is also a big obstacle towards the economic development of the State. Article 370 prevents non-Kashmiris from purchasing land or any immovable property in the state, thus dissuading investors from showing interest.

According to government statistics, the militants declared hartals disrupting work for 1,356 days between 1990 and 2003, forcing many private businesses to remain shut on many of those days.

Nissar Ahmad Baba was forced to dissolve his business of electrical spare parts in 1991 after perpetual hartals compelled him to shut shop for more than 100 days of the year.

With a government loan, however, in 1997, he started Alba Power, a small-scale industrial unit manufacturing transformers in Rangreth. In the in the last two years, Alba Power has emerged as a leading manufacturer of transformers across northern India.

But manufacturers like Alba Power are forced to keep the scale of their operations small to minimize risks and have a small, yet assured profit. Despite the potential, heavy- and large-scale industries in the valley have not been set up due to a dearth of investments.

With nearly 600,000 Indian security forces in a state home to some 8.5 million people, Kashmir has the highest soldier-to-civilian ratio in the world. And concerns over the security situation are still keeping investors at bay.

"We need more private investors in Kashmir," says Abid Shah, a supervisor at Alba Power. "This is a state with talented human capital. It still needs to unlock its full potential."


----------



## Bushroda

*Half doneâs well begun*

The United Progressive Alliance assumed office three years ago with the hubris of an India Shining etched on its mind. A countryside that thought otherwise shooed out those who coined that unfortunate phrase. This message has informed the Congress-led allianceâs attitude to economic reforms. That and the bountiful dividends of an earlier era of economic course-correction appear to have tempered the zeal of Indiaâs original reformers. The economy has grown at above 8 per cent since 2004-05; Indians are investing a third of their income and the GDP and stock market capitalisation is nudging $ 1 trillion. Wide swathes of the economy are going about their business under a rough and ready form of competition and the country is about to hit the demographic sweetspot. Why fix it if it ainât broke? 

Yet the countryside is still saying, âshow me the moneyâ. Agriculture, growing at around 2 per cent, is causing rural distress â from headline-grabbing farmersâ suicides to tribals fighting pitched battles for a better price for their land. The governmentâs flagship social sector programmes on rural employment, education and health are small steps towards moving millions of people out of farms and into factories and offices. Industry and services are facing a skills shortage that threatens to drive wages up and obliterate Indiaâs labour cost advantage. Add to this a creaky infrastructure and the India story could lose some of its sheen. The infrastructure story is decidedly grim: the government has pared its targets for electricity generation; work on highways is not appreciably faster than it was during the previous regime.

Having set its sights lower this time, the government can claim credit for its incremental reforms. The governmentâs books are in better shape and the investment landscape has improved. No mean achievements for the UPA, but the omissions are equally glaring: full rupee convertibility; financial sector reforms; labour market inflexibilities and privatisation in a limbo. From a government that has left political hot potatoes well alone till now, it is too much to expect any movement in the one year to go before the election machinery cranks up.


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## Bushroda

*Strengthen India-Japan ties*
By GEETHANJALI NATARAJ
Special to The Japan Times

Japan and India are two of the largest democracies in Asia, sharing a commitment to the rule of law and respect for human rights. Japan and India have continued to develop friendly relations founded on a long history of exchanges.

With a view to further enhance their friendly cooperative relations, both countries agreed to the Japan-India Global Partnership in August 2000 on the occasion of Prime Minister Yoshiro Mori's visit to India. Furthermore, the two countries issued a joint statement called the "Japan-India Partnership in a New Asian Era" on the occasion of Prime Minister Junichiro Koizumi's visit to India in 2005.

It is expected that Prime Minister Shinzo Abe will carry forward the agenda that his predecessors have laid. Nevertheless, the current state of economic relations between the two countries shows their potential has not been fully harnessed when compared to the role they are expected to play.

The total amount of trade between Japan and India has been rising since 2002, reaching approximately $ 5 billion in 2004. Bilateral trade figures have continued to remain positive and Japan is among India's top five trading partners. Total trade between India and Japan was close to $ 6 billion in 2005-06.

India's service exports of software to Japan have grown dramatically in recent years, marking a 65 percent increase in 2005 alone. At the same time, there have been no change in traditional major exports of commodities such as gems, marine products and iron ore. Manufactured goods such as automobile components still constitute a large proportion of India's imports from Japan.

In this backdrop, the challenge is to diversify the trade structure. A robust economy always generates robust interest. India has now become a point of discussion in all forums across the world. Going by the number of Japanese delegation visits to India in the recent past, India now figures as a significant spot on the Japanese investment radar. Little wonder then that Japan has now been identified as the third-largest foreign direct investment (FDI) contributor to India from 1991 to July 2006. Japan's cumulative FDI inflow in to India for this period has been $ 2.153 billion, which accounts for approximately 6 percent of total FDI inflows for the period.

As engagement between the two countries increases, the year 2007 has been declared the Indo-Japan friendship Year. The year has begun on a promising note with Japanese companies investing around $ 299.8 million in India over the past two months. Japanese FDI into India during 2005-07 has been to the tune of $ 1.8 billion. Not only Japanese FDI, equity investment from Japan into India is also on the rise, touching almost $ 4.9 billion. Thus there are high expectations for the future.

As the birthplace of Buddhism, India is home to Buddhist ruins with which Japanese people are familiar, as well as many famous world heritage sites. For this reason, India's tourism development is a sector in which the potential for Japan-India cooperation is high. Japan, through official development assistance, is providing cooperation in the conservation of ruins and the development of tourism at various sites. It is expected that this assistance will serve to promote tourism cooperation between Japan and India and lead to the revival of the tourism industry in both countries.

Signs of closer Japan-India economic relations are everywhere. This is for the simple reason that, in the new Asian era, Japan and India need each other. This brings to the fore the role of China, a major economic player in the region. India favors a triangular relationship with China and Japan, but apparently it is hard to convince China of this viewpoint.

India understands that China-Japan relations are far more crucial to Japan than Japan-India relations. This is obvious as China has replaced the United States as Japan's largest trading partner. This has been corroborated by Prime Minister Shinzo Abe's visit to China after first coming to power â before his visit to the U.S. Japanese experts justify this on the grounds of China's geographical proximity to Japan and the fact that Abe's visit to China was more symbolic amid growing public sentiments to make an effort to normalize relations between the two countries.

India's interest in Japan is also attributable to its "look East policy," which includes Australia. China may construe this as an indirect U.S. nudge to Japan to strengthen ties with India. Undoubtedly, India aspires to a deeper partnership between the U.S., Japan, India and Australia, but this in no way undermines relations with other countries in the region.

In the changing international environment, China, Japan and India cannot afford to mistrust each other. It is imperative that we coexist peacefully and engage in strong economic ties to increase the prosperity of the region as a whole and project a united force to the Western powers, and simultaneously strengthen bilateral ties with each other.

To deepen economic relations between Japan and India, it is important to bolster comprehensive cooperative relations in a wide range of sectors besides trade and investment, such as information technology, science and engineering technology, energy, environmental protection, and people-to-people exchanges.

It cannot be overemphasized that stronger Indo-Japan ties could serve to counterbalance China's growing power in the region; hence, a big "konnichi-wa" to India-Japan economic cooperation.

_Geethanjali Nataraj is visiting researcher at Asian Development Bank Institute, Tokyo._


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## Bushroda

*Gulf Finance seeks to raise $395 mn for India project*
*The Energy City cluster concept provides a complete business infrastructure to both local and foreign oil and gas producers*

Dubai: Bahrain-based Gulf Finance House (GFH), the promoter of the Energy City project in India, has started wooing investors for the project with the launch of its $395 million (Rs1,394 crore) private placement to raise the equity required to fund the development. The investment is expected to yield a total return of at least 75% over three years. The equity issue is being underwritten by Kuwait Investment Co (KIC).

Energy City India is the second Energy City in a series of energy-focused business clusters planned across West Asia and Asia. Energy City India will occupy a prime site of 600 acres at New Mumbai in Maharashtra. 

The project will be located within a few kilometres from New Mumbaiâs upcoming international airport, which upon completion will be both the largest and busiest in Asia. The project site is also located along the Mumbai-Pune expressway, being developed by the government as a key business corridor.

The Energy City cluster concept provides a complete business infrastructure to both local and foreign oil and gas producers, as well as downstream refiners and producers, and businesses involved in shipping, energy trading and support services.

Esam Janahi, chief executive officer and board member of GFH, said in a statement that the Energy City India private placement offers regional investors with an opportunity to participate in the tremendous prospects being offered by the Indian economy, which is growing at a rate of over 9.2% per annum. 

The private placement initiative, which is currently under way, is only open to institutional investors, and has a minimum subscription level of $250,000, with subsequent investments in multiples of $50,000.


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## Bushroda

*China, India ahead of S'pore in race for pharmaceutical investments: PwC*
By Christie Loh, TODAY | Posted: 21 May 2007 1051 hrs 

SINGAPORE: Even as the Government injects large doses of resources to grow the life sciences industry, Singapore is apparently not the top choice for the majority of drug firms looking for places to pump their money into. 

According to a survey by PricewaterhouseCoopers (PwC), âChina and India head the list of target countries for expansion, with Singapore and South Korea next in the sights of multinational corporations (MNCs)â. 

This assertion, not backed up by statistics, is based on interviews with 185 executives from MNCs and Asia-started pharmaceutical companies between January and March. 

The telephone interviews found that âa-third of MNCs already in the region have plans to immediately expand within the next year, either through their own âgreenfieldâ sites or acquisitionsâ, PwC said in its report released yesterday. 

Asiaâs domestic drug companies are also looking beyond the walls at home, with 65 per cent of them saying it is important to increase global market share. âThe race is very much on between countries to lure international pharmaceutical players to set up base in their respective territories by offering grants, incentives and infrastructure support,â said PwC. 

For the regionâs two emerging giants, price has been the key proposition. âChina and India have emerged as major suppliers of several bulk drugs, producing these at lower prices compared to the formulation producers worldwide,â the report said. 

India houses 85 United States-government approved plants for active product ingredients and formulation â the biggest such number outside America. 

In China, major pharmaceutical MNCs are drawn to the nationâs âhighly skilled, low-cost workforce and the enormous potential Chinese marketâ. 

Said PwC: âBy the middle of the century, drug sales in China are forecast to outstrip those in every other region.â 

Singapore is not without its pluses. âIts growth as a base for pharmaceutical activities is boosted by the countryâs intellectual property right protection record and pro-active Government policy, which aims to develop the biomedical science cluster as one of the key pillars of the economy,â PwC Singaporeâs pharmaceutical and healthcare leader Abhijit Ghosh said. 

These qualities could stand Singapore in good stead as the worldâs drug industry evolves. âSo far much of the focus has been on outsourcing drug manufacturing but increasingly, companies are turning their attention to R&D(research and development) and clinical trials,â said PwC. - TODAY/fa


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## Neo

*Viacom, Indiaâs TV-18 to set up entertainment firm *

MUMBAI: Global media conglomerate Viacom and Indiaâs media TV-18 group announced on Tuesday plans to set up an entertainment company that will be involved in television, film and digital media. The announcement of the 50-50 joint venture, to be known as Viacom-18, comes amid a boom in Indiaâs television entertainment sector with dozens of new channels expected to launch by the end of 2007. âIndia is one of Viacomâs priority markets for expansion,â Viacom chief executive Philippe Dauman told reporters. US-based Viacom owns Hollywood studios Paramount and DreamWorks and the Nickleodeon channel.

http://www.thenews.com.pk/daily_detail.asp?id=57149


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## Neo

*India must deepen reforms to sustain growth: WTO *

GENEVA: India must carry out further reforms in agriculture, and open up the countryâs maritime transport and energy sector to competition if it is to sustain its âimpressiveâ economic growth, the World Trade Organisation said on Wednesday.

Continued structural reform would also help create productive employment for new entrants to the labour force, helping India reap a âdemographic dividend,â with one third of its population currently aged below 18, a WTO report said.

The WTO said in its Trade Policy Review on the South Asian country that Indiaâs economy is expected to grow over nine percent in 2006/07, building on âimpressiveâ growth averaging over seven percent between 2001/02 and the present day.

Growth has largely been driven by unilateral trade and structural reforms, with the services sector playing a prominent role. Manufacturing has also performed well, despite some infrastructure constraints.

By contrast, âagriculture growth continues to be slow and erratic.causing considerable distress, especially among small and marginal farmers,â the WTO warned.

The agriculture sector employs around 60 per cent of the working population but is be-devilled by low productivity, at only around one sixth of its level in the rest of the economy, according to the review.

Meanwhile, public investment in agricultural infrastructure and research has been inadequate due to excessive spending on direct and indirect subsidies to farmers, the WTO noted.

Infrastructure remains a âmajor bottleneckâ across all of Indiaâs economy, the trade policy review said. Whilst competition has been increased in telecoms and some transport sectors, maritime transport and port services continue to suffer from inefficencies.

This constitutes âa major impediment to trade,â the WTO said. The energy sector also needs reform, as there are frequent shortages of supply, and little progress seems to have been made in tackling the losses of state electricity boards, it said.

Indiaâs tax-to-GDP ratio is relatively low and âseemingly insufficient to meet its developmental needs,â the review noted.

This is compounded by a âdisappointingâ level of foreign direct investment (FDI) at around just one percent of GDP, with high real rates of interest acting as a deterrent.

The government has set up special economic zones (SEZs) to boost exports, especially in the electronics sector, but the WTO was doubtful as to their effectiveness in boosting both employment and investment.

âAs many of the industries attracted appear to be capital intensive, it is not clear that this is the most effective way to create employment opportunities, especially for the less-skilled labour force,â it said.

http://www.thenews.com.pk/daily_detail.asp?id=57315


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## Neo

Thursday, May 24, 2007 

*Indiaâs Bharti says mobile user base tops 40m*

MUMBAI: Indiaâs top mobile services firm, Bharti Airtel Ltd., said on Wednesday its cellular user base crossed 40 million, making it the 10th company in the world to achieve the milestone in a single country. 

India is the worldâs fastest-growing mobile market, adding more than six million new users every month lured by call rates as low as US 1 cent a minute. The country had 166.05 million wireless subscribers at the end of March. Analysts and industry experts expect the mobile user base to triple in the next five years as only 15 percent of Indiaâs 1.1 billion population own a mobile phone, compared with 36 percent in China. 

Bharti, managed by billionaire Sunil Mittal, had 38.9 million mobile subscribers at the end of April, according to data provided by Cellular Operatorsâ Association of India, an industry body representing GSM carriers. One of the earliest entrants to the sector after it was opened for private players, Bharti took 11 years to reach 20 million subscribers in 2006 but just another 13 months to double the figure, the company said. reuters

http://www.dailytimes.com.pk/default.asp?page=2007\05\24\story_24-5-2007_pg5_15


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## Neo

Thursday, May 24, 2007 

*Kobe Steel to start low-cost production in India*

TOKYO: Japanâs Kobe Steel Ltd. plans to launch Indian production of steel by 2009 using its technology to keep raw material costs down to a third of current levels, a report said Wednesday.

Kobe Steel is in talks with Indiaâs Chowgule Group to build a steel mill in the southwestern state of Goa, the Nikkei business daily reported, without identifying sources.

The mill will be able to produce 500,000 tons a year with the Japanese firmâs investment coming to 20 billion yen (165 million dollars), it said.

The two companies are expected to reach a final agreement over the next few months and begin construction by year-end, it said.

In addition to India, Kobe Steel is in talks with a US electric furnace steel maker to begin construction of a mill in the state of Minnesota by the end of this year, while considering production also in Australia, it said.

As the steel industry restructures worldwide, Japanese steel makers are also racing to go global.

Nippon Steel, the worldâs second largest steel maker after the recently formed Arcelor-Mittal behemoth, is in talks with Tata Steel, one of Indiaâs top conglomerates, to produce steel sheet for Japanese automakers operating in India as early as 2010, reports said earlier.

http://www.dailytimes.com.pk/default.asp?page=2007\05\24\story_24-5-2007_pg5_25


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## Neo

Thursday, May 24, 2007 

*India to raise roads spending, says PM*

NEW DELHI: India on Wednesday pledged to dramatically step up its spending on roads in rural areas, where the government wants to boost sluggish farm growth and raise hundreds of millions of people from abject poverty. 

Prime Minister Manmohan Singh told a conference that 480 billion rupees ($11.8 billion) would now be spent on a four-year project ending in 2009 to connect 66,000 villages. âRural road connectivity is a critical component of our overall strategy for rural development. It promotes access to economic and social services and facilitates the growth processes on our rural economy,â Singh said. 

The prime minister told government officials that corruption was holding back development. âA major reason for poor quality roads is corruption and the lack of quality assurance. Corruption in road construction projects has spread like cancer to every corner of our vast country,â he said. In the fiscal year that ended in March the finance ministry pledged to spend 52 billion rupees on the rural road network.

http://www.dailytimes.com.pk/default.asp?page=2007\05\24\story_24-5-2007_pg4_17


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## Neo

Thursday, May 24, 2007 

*US, Indian experts make little progress on N-deal*

WASHINGTON: US and Indian technical experts made little progress when they met in London this week in another attempt to work through persistent serious differences over a nuclear cooperation agreement, a US official said on Tuesday. 

The official, who declined to be identified, told Reuters he had not received a full report on the talks but âthere was not a lot of progressâ when negotiators met on Monday. The much-heralded agreement would give India access to US nuclear fuel and reactors for the first time in 30 years, even though New Delhi tested nuclear weapons and never signed the Nuclear Non-Proliferation Treaty. 

On May 1, the two countries claimed extensive progress during two days of talks in Washington aimed at salvaging their landmark deal, and Undersecretary of State Nicholas Burns, the chief US negotiator, said he would âvisit India in the second half of May to reach closure.â But last week Burns postponed his trip, and the decision was made to send technical experts to London to continue working on the issues. The deal is the touchstone of new US-India relationship that Washington envisions as a pillar of 21st century international security, but its history has been rocky. Obstacles have included a US Congress mandate that Washington halt nuclear cooperation if India tests a nuclear weapon as it did in 1998. 

Other disputed points have been US refusal to give India prior approval to allow reprocessing of spent fuel with US components and to assure permanent fuel supplies. 

http://www.dailytimes.com.pk/default.asp?page=2007\05\24\story_24-5-2007_pg4_16


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## Bushroda

*India can achieve 10 pc GDP in 4 yrs: Montek*
PTI[ THURSDAY, MAY 24, 2007 09:43:28 PM] 

NEW DELHI: India can achieve 10 per cent GDP growth in the next four years, but to achieve the same it will have to propel growth of the agriculture sector to at least 4 per cent, the Planning Commission said on Thursday. 

"If we have a list of things to do, then we should be able to achieve a growth of 10 per cent, if not in the next two years then within the next four years," Planning Commission Deputy Chairman Montek Singh Ahluwalia said at the CII National Conference on inclusive growth. 

He said half-a-dozen developing nations have transformed into highly growing economies and the Commission believed that India was close to achieving 10 per cent growth. 

Arguing that key issue to be addressed in promoting the growth of the economy was to infuse fresh lease of life in the farm sector. In terms of inclusiveness the country should achieve 4 per cent growth in agriculture to propel the overall growth. 

Another issue was to ensure much better growth in the manufacturing sector, which had the potential to generate employment, Ahluwalia said and pointed out that growth in the organised sector was crucial to facilitate growth of the economy. 

The Deputy Chairman also cited that the infrastructure growth was also imperative to enable the small scale enterprises to flourish in the country to generate employment in the rural areas. 

"Inclusiveness doesn't only mean that poverty was going down, it should be inclusive and we will have to ensure employment in the rural areas also," he opined. 

There was much need to address the problems in the sector, failing which the desired environment cannot be created to promote inclusiveness, Ahluwalia pointed out.


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## Bushroda

*India's prime minister challenges business leaders to improve the lives of poor*
By Sam Dolnick
ASSOCIATED PRESS

5:20 a.m. May 24, 2007

NEW DELHI â Prime Minister Manmohan Singh challenged business leaders Thursday to ensure the poor benefit from India's economic boom, and to shun the West's âwasteful lifestylesâ of greed and conspicuous consumption. 

âSuch vulgarity insults the poverty of the less privileged,â Singh said at the annual conference of the Confederation of Indian Industry, a leading business group. 

He promised to continue fostering a business-friendly environment, but said businesses that have benefited from the boom must do more to improve conditions for ordinary people. Nearly 40 percent of the 1.1 billion people in India live on less than $1 a day. 
âWe cannot afford the wasteful lifestyles of the Western world,â Singh said. âIt is socially wasteful and it plants seeds of resentment in the minds of the have-nots.â 

Economic growth has surged since India changed from a closed, heavily regulated socialist economy. Its gross domestic product â the total value of goods and services products in the country â has grown by more than 8 percent annually in the past four years, fueled by an outsourcing and technology boom. 

A new class of incredibly wealthy Indians can now afford luxurious foreign vacations, high-end fashions and imported cars, and spend huge amounts on weddings. 

Singh â who as India's finance minister in the early 1990s was widely credited with setting off its economic transformation â decried âostentatious expenditures,â and said rising unchecked inequality could lead to social, environmental and economic problems if left unchecked. 

He urged executives to resist giving themselves and their colleagues large salaries, and accused âcartels of groups of companiesâ of conspiring to keep commodity prices high. 

âEven profit maximization should be within the bounds of decency,â he said. 

âThis is not an imported Western management notion,â he said. âIt is part of our cultural heritage,â referring to Mohandas Gandhi's belief that the wealthy are obliged to provide for the poor.


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## Bushroda

*OECD retains 9 percent growth forecast for India*
From correspondents in Paris, France, 08:02 PM IST

India and China would continue to witness 'buoyant economic activity', the Organisation for Economic Cooperation and Development (OECD) said Thursday, while predicting soft landing in the US and strong recovery in Europe.

'Recent rapid economic growth is expected to continue and be close to 9 percent, despite a poor performance from the agricultural sector,' the organisation said of India in its latest Economic Outlook, which is released twice each year.

The organisation, which has the membership of 30 rich nations, said investments in India have been particularly buoyant during this expansion, contributing to a substantial increase in the economy's potential growth rate.

'Monetary and fiscal policies have both become tighter which will lead to slower growth in the non-agricultural sector,' the report warned, but added that normal harvest should limit the extent of the slowdown in the whole economy.

The report said inflation, which is the main cause for worry for the government, would remain stable at 5 percent, current account would reach 2 percent of gross domestic product (GDP) and the combined fiscal deficit of the centre and states should be around 6 percent of GDP by 2008, which is in line with targets.

'With a wide-ranging programme of structural reform, it would be possible to increase potential growth above its current pace of 8-8.5 percent,' it said, adding further fiscal consolidation was needed to ensure higher savings.

Twice a year, the OECD Economic Outlook analyses the major trends and examines the economic policies required to foster high and sustainable growth in member countries and some selected non-members such as China and India.


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## Bushroda

*World is focussing on India's future: GE chief*
*"India has become the cynosure of global economy and the world is increasingly focussing on its future, says Scott Bayman, president and chief executive of GE India, a wholly owned subsidiary of the US-based conglomerate General Electric."*

India has become the cynosure of global economy and the world is increasingly focussing on its future, says Scott Bayman, president and chief executive of GE India, a wholly owned subsidiary of the US-based conglomerate General Electric.

'It is India's time and India's future is coming into focus,' Bayman said at a conference, 'Inclusive Growth: Challenges for Corporate India', organised by the Confederation of Indian Industry (CII) in the capital Thursday. 

He said India has advantage over China in terms of efficient use of capital, presence of a well-regulated financial system and a well-entrenched private sector and the presence of world-class executives.

He added that sectors such as telecom and civil aviation have significantly contributed to India's growth story. 

The telecom revolution in India has been one of the most important aspects of India's economic growth, leading to the addition of 18 million fixed-line subscribers and 17 million mobile connections during 2000-2005.

Quoting a Grant Thorton study, Bayman said Indian industry has been witness to 72 international takeovers amounting to $24 billion.

He also noted that an effective public-private partnership approach would enable the revamp of the Indian airports that will further accelerate the growth of its civil aviation industry.


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## Bushroda

*INDIA: A NEW PLAYER IN CENTRAL ASIA? *
By John C.k. Daly 
Thursday, May 24, 2007 


As Washington's relations with Kyrgyzstan go from bad to worse, especially since the December 6, 2006, shooting of Kyrgyz national Alexander Ivanov at the U.S. air base at Manas, a new player is emerging in Central Asiaâs âGreat Gameâ -- India (Radio Azattyk, May 24).

While the United States has faced criticism from its hosts in Kyrgyzstan and closed its base in Uzbekistan, India could be an attractive partner for Central Asian states. One advantage that the Indian military has over its U.S. counterparts is the fact that about 70% of its equipment is of Soviet or Russian origin, which allows it commonality with what the five Central Asian âstansâ deploy.

India has recently refurbished the airbase at Ayni (also known as Farkhor), six miles northeast of Dushanbe, Tajikistanâs capital. The new airbase will be operated under a trilateral joint agreement with Russia and Tajikistan. The airbase, which had been shuttered since 1985, was instrumental in the Soviet campaign in Afghanistan. The base is a first for India -- its first foreign base and its first in Central Asia. The facility will doubtless be closely monitored by both Pakistan and China.

India initially plans only to base a squadron of MiG-17 V1 helicopters at Ayni. Unlike Russia, which currently bases fighters there, for the moment New Delhi has no intention of basing fixed-wing aircraft there.

Indian improvements to the base cost more than $10 million and include building hangars as well as repairing and extending the runway.

Negotiations for Indian use of the base were finalized in April 2002 when Indian Defense Minister George Fernandes signed a bilateral agreement during a visit to Dushanbe. He initially brought up the possibility of basing two squadrons of frontline MiG-29s aircraft at Ayni, but in subsequent discussions the Indian force was downgraded to a single helicopter squadron.

The deal triggered high-level diplomatic protests by Islamabad, which maintained that the agreement was part of New Delhiâs attempt to âencircleâ Pakistan.

India's interest in acquiring the base was heightened by Pakistan's decision to close its airspace to India in 2001-2002, a period of crisis. In the 1990s, during the Afghan civil war, both Tajikistan and India opposed the Pakistan-backed Taliban regime, throwing their diplomatic weight behind the Northern Alliance. Besides diplomatic support India also quietly helped to maintain the Northern Allianceâs miniscule fleet of helicopters.

The Indian presence has significant strategic implications, as Pakistan is only about 20 miles away. Afghanistan's Wakkan Corridor separates Tajikistan from Pakistanâs volatile Northwest Frontier Province.

India's gradual integration into Central Asian military structures began in 2006, when New Delhi, along with Mongolia and Pakistan, acquired observer status in the Shanghai Cooperation Organization. The SCO currently comprises China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan. SCO Secretary-General Bolat Nurgaliev recently said, âAgainst the backdrop of what has been happening in Afghanistan, Iraq, and the Middle East, the stable development of SCO member states and India, their multilateral cooperation can become an important factor in the process of building a just and equal world orderâ (Udayavani, May 23). Ironically, two years ago, following Uzbekistanâs bloody suppression of the Andijan uprising, the SCO issued a statement calling on the U.S.-led anti-terrorist coalition to set a deadline for ending its use of Central Asian bases and air space in member states. Such permission had been granted in the aftermath of 9/11.

The deployment is yet another sign of the strength of Russian-Indian relations. India remains Russia's largest export market for armaments, receiving approximately 40% of its arms imports from Moscow. The new Indian presence in Tajikistan is dwarfed by the Russian armed forces currently stationed there, which total nearly 11,000 troops.

India's Central Asian ambitions are not confined to Tajikistan; in Afghanistan many large reconstruction contracts are being awarded to Indian companies, including a major roadway to Iranâs Chahbahar port, a development that runs counter to Pakistani interests. Another major Indian transport project in Afghanistan is the construction of the 135-mile Zaranj-Delaram road in southwestern Afghanistan, which will allow New Delhi to gain better access to the energy wealth of Central Asia (Times of India, April 25).

It is unclear how other regional players, particularly Pakistan and China, will view the new Indian military initiative. India's airbase will both allow it to assist stability efforts in Afghanistan as well as provide a potential base for combating Islamic fundamentalism, both goals shared by Washington.

At this point, India's entrance into Central Asia is more symbolic than significant; however, given the rising strength economy, Delhi's interest in Central Asia can only deepen with time.


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## Neo

Friday, May 25, 2007 

*India to raise 1m âskilledâ workers*

By Iftikhar Gilani

NEW DELHI: Indian Cabinet on Thursday cleared a Rs 550-crore centrally-sponsored âskill development initiativeâ scheme to raise the workforce of one-million âcertifiedâ skilled workers in five years to meet the demand from the economic boom.

About 200 modules for employable skills as per industry and labour market demands would be identified and course curriculum developed and those undergoing these courses would be certified under the scheme. The minimum age limit to take part in the scheme is 15 years while there is no upper age ceiling. Anyone who has passed fifth standard can join the courses. The essence of the scheme is in the certification that will be nationally recognised by both the government agencies and industry and trade organisations, officials said, pointing out that those undergoing courses will be certified by independent assessing agencies that are not involved in training to ensure impartiality.

http://www.dailytimes.com.pk/default.asp?page=2007\05\25\story_25-5-2007_pg4_19


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## Bushroda

*India's GDP growth in FY08 seen at 9.2 pct - CII*
Fri May 25, 2007 6:01 PM IST 

NEW DELHI (Reuters) - The Indian economy will grow by 9.2 percent in the fiscal year ending March 2008 boosted by industry and services sectors and a rebound in farm output, the Confederation of Indian Industry (CII) said on Friday.

The forecast of the industry body is significantly higher than that of the government and the central bank.

On Tuesday, Prime Minister Manmohan Singh said the economy would grow by more than 8.5 percent for the year to March 2008 while the central bank pegged it at around 8.5 percent.

"Despite some of the difficulties in current year in terms of interest rate, input price rise, inflation...we are expecting Indian economy to stay firm at 9.2 percent growth mark," Sunil Bharti Mittal, the newly-appointed president of CII, told reporters during a press conference.

*He said industry is expected to grow 9.4 percent during 2007/08 while the services sector would expand by 11.2 percent and farm output will grow 3 percent.*

Industrial growth could go up to 12 percent with more reforms in the coming years, he said. Industry grew 11.3 percent during 2006/07.

Mittal, who is also the group chief executive officer of Bharti Enterprises and founder of Bharti Airtel, said the government needs to de-regulate key sectors like energy, mining and food products to fuel growth.

"We are convinced 1.5 to 2 percent upliftment of GDP sits in these areas."

India is aiming at an average annual 9 percent growth during the period 2007/08 to 2011/12.


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## Bushroda

*Buoyant outlook for Indian hotel sector*

*Knight Frank Research has recently released its India Hotel Review of the hotel sector in the country. Express Hospitality presents this review in three parts.*

The phenomenal growth of the service sector has had a direct impact on the real estate sector. According to Knight Frank estimates, close to 100 mn sq ft of office space will be developed in the country over the next two years, 80 per cent of which will be taken up by the IT/ITES sector. Besides this, approximately 120 mn sq ft of mall space will come up in the market by 2008. Another segment which is benefiting from the growth of the service sector is the hotel industry. Liberalisation of the Indian economy coupled with the growth in domestic business and a buoyant economic outlook has led to an enhancement in business travel in India.

According to Government of India estimates, the foreign arrivals in India increased by 11 per cent between 2004 and 2005 and by 15 per cent between 2005 and 2006. More than 50 per cent of this number are foreign business travellers. Besides this, approximately 300 million domestic travellers traverse the country each year and this number is expected to witness a growth of 10-15 per cent over the next few years. Also, the efforts made by the ministry of tourism & culture in the last few years have had a salutary effect on India's tourism industry. As per a survey undertaken by an international travel magazine in 2006, India has been ranked as the 4th most favoured country for holidays, above South Africa and Switzerland. Coupled with this, availability of low cost medical facilities and the introduction of low cost airlines are all expected to generate increased demand for hotel rooms across many cities in India.

*National Capital Region (NCR)*

NCR, including the national capital New Delhi and the satellite towns of Faridabad, Gurgaon, Noida and Ghaziabad, is a prime economic zone of India. A great historical past, gateway to the northern India hill stations, excellent national and international connectivity makes the region one of the most favoured destination for trade, commerce, politics and tourism.

Rapidly improving infrastructure, widespread economic activities, availability of skilled manpower and decentralisation policy of urban development has triggered offer further growth of the NCR. Widening of national highways and expressways, launch of the Delhi Metro Project and growth of the IT/ITES sector have also contributed to the boom in the real estate sector which had led to increased business trips to the capital.

The growth of the industrial and service sector in NCR had led to a surge in demand for star category hotels and this has had a positive impact on the hospitality business. Besides being a major transitional point for international and domestic tourists, the region also witnesses an inflow of both business and leisure travellers. This is unlike other metros, which predominantly host business travellers. Foreign business travellers form around 70 per cent of the corporate clientele of the hotels in NCR.

*Current scenario*

Over the last few years, tourism in NCR has grown to include heritage tourism, adventure tourism, medical tourism and eco-tourism. Various segments, including the domestic as well as international corporate travellers, bureaucrats, sportsmen as well as transitional tourists are the main clientele for the hospitality sector. New Delhi, as the nation's capital, regularly hosts various political meets and also contributes to the demand for hotel rooms in the region. Healthy industrial growth and better infrastructure, conducive for trade events, have surged the business traffic, which has accelerated the demand for business hotels.

The current room inventory in all the categories in NCR is around 9,982 of which the premium category hotels constitute around 85 per cent or 8,532 rooms. The list includes names like ITC Maurya Sheraton, Shangri-La, Trident and Taj Mahal Palace in the five-star deluxe category, Oberoi, Uppal Orchid and Imperial Heritage in the five-star category, while the four-star category includes Hotel Janpath and Hotel Kanishka. 

Between 2003 and 2005, the average occupancy rate in the NCR hotels grew from 70 per cent to 78 per cent. At present, the occupancy rate is about 83 per cent. Average Room Rate (ARR) in the region has gradually increased from Rs. 4,200 in 2003 to Rs 5,200 in 2004. However, ARR is expected to grow manifold and touch Rs 10,000 by end-2007. Room rents contribute almost 60 per cent of the total revenue generated in the hotels while the Meetings, Incentives, Exhibitions and Conferences (MICE) segment accounts for approximately 15 per cent of the total revenue. The share of Food & Beverage (F&B) sector is limited due to competition from local restaurants and food chains.

NCR is expected to see many new hotels, service apartments and mixed-use developments over the next 3-4 years. Close to 25 new hotels are coming up in Gurgaon alone. Tie-ups with international players like Hillwood with Hyatt, Emaar with Accor and DLF with Hilton is expected to give a push to the hotel industry in NCR.

With the upcoming Commonwealth Games to be held in New Delhi in 2010, NCR is expected to witness the inflow of around 0.8 million international tourists and nearly 3.6 million domestic tourists. To accommodate these visitors approximately 30,000 rooms will be required in 2010. Around 6-8 hotels have been additionally planned for athletes in the Games Village, in the vicinity of the Commonwealth Games site in East Delhi.

Due to the availability of larger land parcels and proximity to expressways and ring roads, new hotels are coming up in the peripheral locations of the city. Majority of the new supply is coming up in the business hubs of Gurgaon and Noida. In the next couple of years, Noida will have additional 24 hotel projects. Once the upcoming Medicity at Gurgaon is operational, the location will become a global health-care destination and this will further give a boost to the demand for hotel rooms. Knight Frank Research indicates that over the next few years, the supply of hotel rooms in NCR will cross 17,500. Out of this, around 5,100 rooms are currently under construction and the rest in planning stages at various locations around the region.

To meet the long-stay demand from the corporate segment, service apartments have mushroomed in the NCR at a frenzied pace. According to Knight Frank Research, approximately 1,000 service apartments will be available in the region by 2008. Among the local developers, Enkay was the first developer to initiate this concept in New Delhi. Major hotels groups like Marriott, Oberoi, Oakwood, Westin, Leela, Claridges and Crowne Plaza are also planning service apartments in NCR. Besides these, many smaller and unbranded service apartments are also coming up in Gurgaon and Noida. These also clock a year-round occupancy and an average stay of 2.5 to 3 weeks, reflecting the high demand for such developments.

Due to high land cost and with a view to mitigate risk, the concept of hotels in malls is also flourishing Budget hotels in malls which offer shopping experience with entertainment facilities under one roof are eliciting attention from various hospitality players. An upcoming five-star hotel in East End Mall in Ghaziabad is one such example.

*Outlook*

Entry of international brands and players, international events and multi-national companies setting up and expanding operations has driven the growth of hospitality business in NCR. Soaring land prices and substantial initial investment are not longer the deterrents for this sector. Due to encouraging government policies like entitlement to duty-free imports floated by the government, the segment has availed considerable capital in the market. Recent transactions while auctioning the hotel plots, at prices which are three-fold of the reserved prices, show growing interest of investors in the region.

A five-year tax holiday announced in the recent budget by the finance ministry for two, three and four-star hotels and convention centres specifically catering to the Commonwealth Games in Delhi, Gurgaon, Ghaziabad and Faridabad is expected to initiate more hotel groups to venture into this real estate segment.

With the advent of international players, the NCR market is expected to grow towards global standards. Public private sector initiatives, undertaken in joint venture with developers like Unitech and Parsvanath, in order to promote entertainment and tourism industry along with infrastructure development in a diversified quantum has set the region to witness growth in the hospitality sector in the forthcoming years.

*Jaipur *

Jaipur, the capital of the state of Rajasthan, is a growing business centre of North India. The city offers an array of attractions ranging from historical monuments and palaces, parks and gardens, gems and jewellery business to emerging IT/ITES destinations. The city's age-old charm along with growing modernisation makes it an interesting package for a traveller.

Together with the north Indian cities of Delhi and Agra, Jaipur is the third city of the `Golden Triangle'. It has been one of the key tourist destinations of India and has the unique flavour of traditional hospitality of the regal empire. Excellent connectivity to New Delhi through rail, road and air has cemented Jaipur's position as a leading tourist location of the country.

In the last 2-3 years, Jaipur has undergone substantial changes which have altered the real estate landscape of the city. Low operational costs, availability of labour at economical rates, low attrition rates due to lack of regional competition have induced many IT/ITES companies to explore the city. As a result, the residential, office and retail sector real estate have seen unprecedented growth. Large-scale projects like the Mahindra and Mahindra SEZ, Vatika City, Pearl City, Omaxe City and many other corporate parks and malls are being developed around the city.

*Current scenario*

Major demand drivers for the hospitality sector in Jaipur are heritage tourism and cultural tourism. Festivals like Dusshehra, Pushkar Mela and Diwali take place in October and November and these months comprise the peak season for tourist arrivals. Around 67 per cent of the total tourists coming to the city are international travellers whereas domestic travellers constitute 33 per cent. The government has taken positive steps to promote tourism and to bridge the gap between demand and supply for tourist amenities including accommodation and leisure activities.

Penetration of the IT industry in Jaipur has given fillip to business tourism as well. A demand for business hotels with facilities such as convention halls equipped with presentation equipments, board rooms and lounges has been observed in the city. Jaipur has also been a favourite destination for marriages and theme parties and this also contributes to substantial room demand during the period September to March.

The total inventory of the hotel segment in Jaipur in all the categories is about 2,655 rooms. Of this, approximately 1,144 are in the five and five-star deluxe category, 352 in the four-star category and around 367 rooms in the heritage category. Some of the major hotels include Hotel Rambagh Palace (Bhawani Singh Road), Le Meridien (Delhi Road), Rajputana Palace Sheraton (near the railway station) and Country Inns & Suites (MI Road) in the five-star and five-star deluxe category, Hotel Gold Palace & Resorts (Delhi Road) and Fortune's Bella Casa (Ashram Marg, Tonk Road) in the four-star category and Raj Mahal Palace (Sardar Patel Marg), Raj Palace (Amer Road) in the heritage category.

The occupancy levels that were around 61 per cent in 2004, increased to 63 per cent in 2005 and to about 65 per cent in 2006. Significantly, Hotel Jai Mahal Palace enjoyed the highest occupancy rate of 72 per cent in December 2006.

It is expected that the occupancy rates for hotels in Jaipur will continue to move upwards as the clientele from the corporate sector is expected to increase.

ARR values have increased by 27 per cent during 2005 to around Rs 6,500 from Rs 5, 100 reported in 2004. Hotel Raj Vilas recorded the highest ARR of Rs 15,332 for the year 2006 while overall the premium category hotels in Jaipur achieved an ARR of around Rs 7,200 in the same year. The demand supply imbalance observed during the peak season has enabled hotels in Jaipur to charge higher tariffs across market segments. With a nominal 3-4 per cent p.a. increase in supply, ARR is expected to grow at a rate of 25-30 per cent in the next 2-3 years.

As per industry estimates, 56 per cent of total hotel revenue is generated by room rents whereas F&B contributes 26 per cent and convention and banquet halls each contribute approximately 8 per cent. Due to the presence of organised tour and travel operators, the international airport and introduction of new tourist attraction concepts like Elephant Safari (Haathi Gaon), the city is bound to witness growth from budget to premium-end clientele in hotel segment.

Strengthening of Jaipur as major tourist destination and a potential destination for business travellers has induced foreign players like Amanda, Satinwoods, Banana Tree, Hampton Inns, Hilton and Mandarin Oriental to consider the city for setting up new hotel projects. Hyatt has Jaipur on its priority list for establishing its resort as well.

Other players like Mahindra Group is developing a five-star hotel while InterGlobe, in a joint venture with Accor, is setting up a 500-room budget hotel in Jaipur, which will be operational by 2008. The construction for another budget hotel by The Lemon Tree has already started at World Trade Park on Jawaharlal Nehru Marg in Jaipur. An International Convention Centre is proposed in the city and is to come up within the next 18 months. A distinct market of hotel-cum-mall segment is also emerging in the city. Fortune Group's Bella Cassa, with an inventory of 57 rooms has been developed on the same concept.

*Outlook*

Out of the Rs 200 billion investment envisaged in Rajasthan, Jaipur is expected to receive a major share which will be invested for improving social infrastructure and amenities within the city. Better connectivity to the city on account of low-cost airlines has led to increased consideration of the city as a venue for conventions and marriages. It will further augment the share of room revenue in the total revenue generation pie and also create new demand for rooms.

The New Hotel Policy 2006 gives special provisions for development of hotels in Jaipur. The policy includes reservation of land parcels for hotel projects within the city, availability of hotels plots at a dropped reserved price (almost 50 per cent of commercial reserved price), 100 per cent exemption on entertainment tax and 100 per cent exemption from land conversion charges. All these provisions are expected to increase the supply of hotels in the city. Delhi Road due to the development of industrial parks, Ajmer Road on account of development of integrated townships and SEZs and Tonk Road owing to new commercial developments, will be emerging destinations for new hotel projects.

Jaipur, with its historical charm, will continue to attract international tourists and reap profits on the growing hospitality business. With the city emerging as a major centre for gems, jewellery and textiles, increased business for the hospitality segment will be coming in from this commercial segment. However, a supply of approximately 1,080 rooms over the next few years may create a situation of over-supply in the Jaipur hospitality market.

*Kolkata*

Kolkata, the capital of West Bengal is the second largest city of India and an erstwhile trading and commercial capital of the country. Various industrial set-ups including engineering products, leather, steel, automobiles and pharmaceutical companies together with banking and insurance companies have had a significant impact on the economic growth of the city. Kolkata is also the commercial capital of the north-eastern region with most companies having their regional offices in the city.

The emergence of Kolkata as a popular new economy destination due to its advantages of comparatively low manpower and real estate costs coupled with the existing industrial set-up have had major impact on the real estate sector of the city. Geographically, too, the city has grown outward in all the directions with major development along the eastern, southern as well as western locations. The growth of the IT/ITES sector in the city is also triggering a growth phase in retail, hotels and residential properties. Kolkata, which earlier had only a few hotel brands, has seen a change of face with the emergence of the new age companies in the city.

Connectivity from Kolkata to other Indian and international destinations by air is improving with the addition of new airlines. As the only metropolitan city for the entire eastern belt of the country, Kolkata has an extensive network of road and rail transportation facilities.

*Current scenario*

In recent times, the city's booming IT sector has led to the rise in demand for hotel rooms. There has been a substantial increase in the demand for good quality short-stay accommodation from Indian as well as foreign executives, as business in the city has improved after a lull of almost two decades. Almost 60-70 per cent of guests in the premium category are business travellers, with the airline crew contributing another 8-10 per cent to the total demand. The travellers to the city are mostly domestic but recently the share of international travellers has gone up and most of the premium category hotels have an average of 40 per cent foreigners as their clientele.

Currently, there are around 25-26 hotels in various categories operating in Kolkata. The current inventory in the premium category is around 1, 476 rooms, which is around 85 per cent of the total rooms in Kolkata. Most of the hotels like Taj Bengal, Oberoi Grand, Hotel Hindusthan International as well as The Kenilworth Hotel are located in the CBD and hold the advantage of location and accessibility. Other hotels like Hyatt Regency Kolkata and ITC Sonar Bangla Sheraton Hotel and Towers in the eastern part of the city, cater to the upcoming new business sectors along the Salt Lake and Rajarhat stretch.

The occupancy levels in the city hotels have increased at an average annual growth rate of 15-18 per cent since the last few years. The current average annual occupancy level of the city hovers around 80 per cent and is expected to remain at the same level for the next two years. Low ARR figures in 2001-03 were steadily recovered in the last few years due to emergence of the IT/ITES sector, the change in the ARR of a city being the indicator of the quantum of business activity. The premium category hotels currently have an ARR of Rs 4,100 - 5,000 with five-star deluxe hotels touching around Rs 12,000 in the recent past.

Kolkata is becoming a preferred location for conferences and seminars due to the relatively easy availability of space at a lower cost as compared to other metros. Banqueting facilities in hotels witnessed a booking level of almost 80 per cent in 2006 with larger demand from the corporate companies as compared to private functions. Facilities like spas have a good demand in Kolkata as five-star deluxe hotels like the Hyatt Regency, ITC Sonar Bangla as well as Oberoi Grand have exquisite spa facilities, most of them catering to in-house guests as well as local residents.

Tourism takes a backseat in the room demand for hotels, as this segment in Kolkata is fairly seasonal. A minimal 20 per cent of the demand can be attributed to foreign as well as domestic tourists in Kolkata. While rooms in the premium category contribute to almost 62 per cent of the net revenue, the MICE segment contribute almost 15 per cent of the net revenue generated in hotels in Kolkata.

The horizontal expansion of the city limits in the eastern and north-eastern part of Kolkata, including Rajarhat and Salt Lake, has seen many global IT companies setting up operations here. The proximity to the airport, availability of large land parcels and upcoming industrial set-ups has fuelled the demand for hotels to be located in this region. According to industry experts, Kolkata will witness a new supply of around 2,000 - 2,200 rooms of which approximately 80 per cent will come up in this region.

At least 12 new hotels and serviced apartments will be entering the Kolkata market over the next few years. While few hotels like The Fort Radisson have expansion plans within their current facility, hotels chains like Intercontinental Group, Marriott Hotels and Resorts, Hilton Group, Peerless Group, Sarovar Hotels, as well as DLF in joint venture with Dubai-based Emaar Group are setting up five-star and five-star deluxe properties in the city. On the other hand, hotels, like Grand Great Eastern Hotel as well as MBD Airport Hotel are currently under renovation and are expected to add to the upcoming supply of rooms.

*Outlook*

The service apartment segment in Kolkata has still not been explored, but as the market matures, the demand for medium to long-term stay options would increase. The continual demand from the IT/ITES segment together with the manufacturing and processing industry will further strengthen the demand for this segment in Kolkata. Few hotel groups like Intercontinental Group too have plans to set up service apartments in Rajarhat. The concept of mall hotels, combining a star category hotel within a mall and multiplex, was initiated with a 130-room star hotel at City Centre Mall, at Rajarhat.

Kolkata is currently undergoing an economic resurgence with the West Bengal government providing aggressive incentive packed steps to attract investments. The government has identified IT as priority sector to be developed into a growth engine for the future. With its improving infrastructure, low cost of operations and a proactive state government, Kolkata is well positioned to benefit from this growth in ITES services. The promotion of large-scale IT and non-IT industries in West Bengal will further enhance the demand for hotel rooms. Also large townships in various parts of the city planned by the government, in joint venture with developers, have hotels within their projects.


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## Bushroda

*Indian Government Draws Up Social Security*
Voice of America

The Indian government has announced an ambitious plan to provide social security coverage to millions of poor workers for the first time. As Anjana Pasricha reports from New Delhi, the plan is part of the government's efforts to fight widespread poverty.

Nearly 400 million daily wage workers at construction sites, farms and small businesses in India have no access to old age or health benefits.

The government has proposed to change that with new legislation to be introduced in parliament in July.

Parliamentary Affairs Minister Priya Ranjan Das Munshi says workers who contribute about two cents a day will be eligible for benefits such as health insurance and disability protection under the plan.

The federal government says those earning less than $160 a year will not have to pay for the program.

The government has called its plan a "revolutionary step."

The social security proposal was announced as the government faced criticism for doing too little for poor people despite a rapidly growing economy. 

Independent political analyst and columnist Prem Shankar Jha in New Delhi says social insecurity is at the root of growing disillusionment with the government.

"What you require was â¦ social insurance, old age pensions, health insurance," said Jha. "There is an abundance of data [to show] that poor families in this country, whenever a member falls ill, they go into debt â¦ the average level of debt in the poorest ten per cent of the population on health alone is more than one years earning."

Currently, less than 10 percent of India's workforce has access to social security benefits.

The Labor Ministry says it has already committed $250 million for the new plan. But critics say it could cost billions of dollars, and say it is not clear how the government will fund the ambitious project. 

Last year, the government launched another effort to tackle rural poverty by promising 100 days of work each year for one member from each of India's 60 million rural households. But so far that project covers less than half the country.

India's Congress Party-led government increased its focus on programs to benefit the poor after the party lost ground in a series of local elections. The government came to power three years ago promising to do more for the common man. - VOA News


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## Bushroda

*South Africa: India Seeks to Open Opportunities for SA Companies*
BuaNews (Tshwane)
25 May 2007

Shaun Benton
Cape Town

A high ranking Indian official says his government is looking at a mutually rewarding, "sincere partnership" with South Africa and identified business opportunities for South African companies on the sub-continent.

Secretary of State for External Affairs, Anand Sharma on Thursday told Indian and South African businesspeople in Cape Town, of India's large agricultural economy and the lack of expertise there for processing food into products such as fruit juice.

This was just one example of an industry where South Africa is a world leader, he said.

Mr Sharma explained that while India probably produced more fruit and vegetables than any other country, only 3 percent of this produce was exported and as much as 40 percent of it was lost, post-harvest.

Other areas where the country of 1.1 billion people was experiencing great demand was in the hospitality sector, which faced a shortage of hotel rooms - an area in which South African firms could supply the demand.

Mr Sharma, a seasoned anti-apartheid activist during his younger days in India and who is married to a South African, has been in the country for a few days with a tightly-packed schedule that included talks with President Thabo Mbeki and several Cabinet ministers.

In Cape Town, he was speaking to a conference staged by the Confederation of Indian Industry, whose members, such as the Tata group, have been making inroads into the South African market across various sectors.

This includes the area of Information and Communications Technology (ICT), where India has developed a solid international reputation as a leading and competitively-priced force, especially in software and ICT infrastructure.

President Mbeki has on more than one occasion pointed to India as a key source of assistance to South Africa in the area of ICT, and large groups of South Africans are already being trained in India in a number of fields including ICT.

ICT trade is moving in both directions.

South African Deputy Minister of Communications Radhakrishna Padayachie cited inroads being made into the Indian market by South African firm Sahara Computers, while South African food retailer Shoprite is another firm with a foothold on the Indian sub-continent.

Already, trade between South Africa and India - which began opening up its economy to foreign investors in the 1980s and has boomed partially as a result of this liberalisation - is increasing at a rate of 30 percent a year, Mr Sharma said.

Speaking to BuaNews Thursday, Mr Sharma said trade levels between the two countries were touching US$5.6 billion with the balance of trade favouring South Africa by around US$1 billion.

This was excluding imports of gold from South Africa, which are high considering that India is a major manufacturer - and exporter - of gold jewellery.

The countries are also partners in the trilateral IBSA forum, where they are joined by Brazil.

India is assisting South Africa in human resource development, capacity building and skills training, Mr Sharma said earlier, adding that both countries were looking for this cooperation to increase in a solid and trusted partnership.

"There is a political understanding [between the two countries] at the highest level," Mr Sharma told the group of business leaders working in South Africa, adding that the ground was prepared for more extensive business links and that these opportunities should be seized.

Both countries must "move fast", he said, to catch up to the levels of economic development such as that of their former colonial power, Britain.

Ruchira Kamboj, the Indian Consul-General in Cape Town, told the gathering of business leaders that a recent report by international investment analysts Goldman Sachs suggested that the economies of the world's developing countries could jointly be greater than those of the leading G8 industrialised powers in four decades.

Mr Sharma said the two governments wanted to see bilateral trade trebling by 2010, or at least reaching US$10 billion, as called for by Indian Prime Minister Manmohan Singh when he visited South Africa last October, and by Deputy President Phumzile Mlambo-Ngcuka when she visited India prior to Mr Singh's visit.

Rajiv Kumar Bhatia, the Indian High Commissioner, said that between six and eight business promotional events were being organised by the Indian High Commission between March and November this year.


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## Bushroda

*India and China in the forefront of airport duty free growth*
Michael Verikios - Friday, May 25, 2007
Friday, May 25, 2007 

After a busy and productive week, TFWA Asia Pacific 2007, the 12th annual exhibition and conference for the duty free and travel retail industry in Asia, closed its works at the Singapore Suntec Centre. Industry executives, including colleagues involved in the broader airport revenue generating businesses, gathered on Monday 14th May for the 4th Gate One commercial revenues conference in Singapore. 

A total of 24 eminent speakers and two professional moderators assembled in panels to contribute their expertise on subjects ranging from airport development and the emergence of airport cities to strategic partnerships and the topical issue of aviation security. Over 200 delegates participated in the conference which at times became very animated.

On the morning of Tuesday 15th at the TFWA Asia Pacific Conference, TFWA President Erik Juul-Mortensen summarised the state of the global industry and highlighted India and China as the principal sources of growth. 

In the first session, âThe Indian Retail Revolution and its effects on Asia Pacificâ, the 450 delegates were impressed to learn of the rapidly maturing trillion-dollar Indian economy, of the massive development in air transport infrastructure in India and the related growth in the duty free and travel retail market. He was followed by retailers, suppliers, operators, analysts and marketing professionals who engaged in discussion involving the audience on how best the industry could capitalise on this immense potential.

In the second session, aviation security and the current situation regarding liquids, aerosols and gels (LAGs) were analysed by Frank OâConnell, President of ETRC, leading the ETRC campaign to implement a global policy which will both safeguard passenger security and enable them to continue enjoying duty free and travel retail shopping. Representatives from a liquor and a perfume brand and the Australian DFA and APTRA joined the Singapore representative of the TSA to discuss the ongoing situation and proposals which might alleviate the situation. The industry was strongly urged to support the campaign to find workable solutions to the issue.

During the week three topical workshops were held to focus attention on issues of particular interest to sectors of the industry: e-tailing, consumer purchasing behaviour and onboard sales.

TFWA Asia Pacific Exhibition assembled 199 international brand companies for the benefit of buyers, agents and distributors to the duty free and travel retail outlets in airports, border stores, ships, airlines and downtown stores. A total of 1,977 visitors attended the show, +1% increase on last year, of which 34% were key buyers and airport authorities (+1%) and 47% were agents (+12%). The balance was made up of press, guests and other trade visitors.


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## Bushroda

*Etihad eyes more Indian destinations*
BY A STAFF REPORTER
25 May 2007 

ABU DHABI âEtihad Airways is set to expand further in the Indian market if it gets government approval, according to a senior official from the Abu Dhabi-based airline.

"Bangalore, Chennai and Hyderabad are all in the airline's sights as the carrier prepares to launch flights on May 30 to Thiruvananthapuram and June 2 to Kochi, " said Geert Boven, Etihad's executive vice- president, sales and services. Etihad held talks with the Indian authorities over new air rights in March, which resulted in the new Kerala routes and will enable Etihad to offer a total of 21 flights per week from Abu Dhabi to India. Following the conclusion of the talks the airline has been working towards adding more Indian destinations to its expanding flight network which target the major cities in Andhra Pradesh, Karnataka and Tamil Nadu. Boven said: "With a population of one billion people and the world's second fastest growing economy, demand for Etihad's flights to India is huge. There are also more than one million Indian citizens living in the UAE who are eager to enjoy greater air links. I do hope that the two countries governments can reach agreement for even more non-stop flights to help satisfy consumer demand."

The UAE is India's most dominant trading partner in the entire West Asia North Africa (WANA) region, and represents 70 per cent of India's export to GCC (Gulf Cooperative Council) countries. Currently there are 3,300 Indian companies operating in the UAE. Bilateral trade between the two countries also continues to grow year-on-year and now stands at more than Dh48 billion.

Boven added:"Air travel between India and the UAE will continue to grow as both countries enhance their positions as major global destinations for business and leisure travellers. As this demand increases Etihad will look to boost its services and become the leading airline in this exciting and crucial sector." The new three flights-per-week service to Thiruvananthapuram and four flights-per-week service to Kochi will join Etihad's established flights to Mumbai and New Delhi, with flights to the Indian capital going daily from May 31.

Etihad is already experiencing high demand on the Thiruvananthapuram and Kochi routes, with aircraft seat sales averaging 80 per cent . The new flights will offer 3,360 seats per week between the UAE and Kerala which will increase to 6,720 when the two Kerala routes become daily from October 2007.


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## Bushroda

*Stop showing off wealth, tycoons are told*
Jeremy Page in Delhi 
The Times 
May 26, 2007

Manmohan Singh, the Indian Prime Minister, has stunned business leaders by telling them to pay themselves less, limit their profits, eschew lavish weddings and shun âwastefulâ Western lifestyles. 

Mr Singh warned an audience including some of Indiaâs richest tycoons that they could face severe social unrest if they did not curb their spending and do more to bridge the countryâs yawning income gap. 

âIn a country with extreme poverty, industry needs to be moderate in the emolument levels its adopts,â he told the opening of the annual conference of the Confederation of Indian Industry on Thursday. 

âRising income and wealth inequalities, if not matched by a corresponding rise of incomes across the nation, can lead to social unrest.â 

Mr Singh, who unleashed Indiaâs current economic boom when he introduced market reforms as Finance Minister in 1991, has long been calling for more inclusive economic growth. But this time he went farther than ever in dressing down Indiaâs business elite, striking a distinctly Gandhian â if not overtly socialist â tone. âThe electronic media carries the lifestyles of the rich and famous into every village and slum. Media often highlights the vulgar display of their wealth,â he said. 

âAn area of great concern is the level of ostentatious expenditure on weddings and other family events. Such vulgarity insults the poverty of the less privileged, it is socially wasteful and it plants the seeds of resentment in the minds of the have-nots.â 

Among the tycoons in the audience was Sunil Bharti Mittal, who is rated by Forbes magazine as the sixth-richest Indian in the world with a fortune of $9.5 billion (Â£4.8 billion). Also there was Jamshed Godrej, whose socialite wife threw an extravagant wedding party for Liz Hurley and Arun Nayar in Bombay in March. 

Mr Singhâs speech highlights the ruling Congress Partyâs mounting concern that it will lose the next election in 2009 if it does not extend the benefits of Indiaâs economic boom to the bottom half of Indian society. The economy has been growing at an average of 8 per cent annually since 2003 and now has a middle class of about 50 million people and an estimated 83,000 dollar millionaires. But up to 40 per cent of its 1.1 billion people live on less than a dollar a day and have seen little evidence of growth apart from rising food prices. 

Mr Singhâs appeal also reflects Congressâs growing reliance on its left-wing coalition partners, especially the Communist Party of India, after poor performances in state elections this year. 

But political analysts say Mr Singh is treading a fine line between appeasing his socialist-minded allies and alienating the people who are driving Indiaâs economic growth. Many economists say he should focus more on creating opportunities for the poor to generate wealth, rather than discouraging the rich from getting richer. 

âHis speech is at variance with his policies as Finance Minister and in his first years as Prime Minister,â said Pran Chopra, of the Centre for Policy Research. âThis could worry the audience if it was followed by specific actions, but I do not think that will happen. This is just some sort of verbal comfort to those he thinks are becoming restless.â 

Mr Singh used his speech to propose a ten-point charter for the corporate sector, calling for workersâ benefits, affirmative action on caste and environmentally friendly technology. 

Yesterday his Government also announced an ambitious plan to provide pensions and healthcare for the first time to Indiaâs estimated 370 million casual workers. The legislation, subject to parliamentary approval, aims to extend benefits to industries such as agriculture, construction, weaving and fishing. 

An embarrassment of riches? 

There are 36 Indian dollar billionaires 

Their combined wealth = $191bn 

$32bn is Lakshmi Mittalâs fortune. Indiaâs richest citizen, who currently lives in Britain 

Foreign direct investment to India last year totalled $15.7bn 

There are 63 special economic zones planned to attract $13.5bn of foreign investment by 2009 

*Sources: Forbes, Indian Government, Thomson Financial, Times archives*


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## Bushroda

*Store operators in India lure investors*
By Saikat Chatterjee Bloomberg NewsPublished: May 25, 2007

NEW DELHI: The biggest Indian retailers are adding stores to lure shoppers whose incomes are rising in one of the fastest growing major economies. They are also luring investors.

Shares in retailers, which lagged behind the broader market in 2006, are rallying. Trent, which is owned by the Tata Group and runs fashion and cosmetics stores, has climbed 15 percent from an eight-month low in March. Shoppers' Stop, which sells clothing, accessories and home decor items, had its biggest monthly gain in April since September.

Companies are opening outlets in smaller cities to snatch market share from the 12 million neighborhood stores that still dominate the Indian retail sector. At the same time, incomes are rising and the economy is entering its fourth year of growth exceeding 8 percent.

"Retail companies seem to be a good sector to be in in the next year," said Soumendra Nath Lahiri, a manager at DSP Merrill Lynch Investment Management in Mumbai. "The organized retail segment can grow at between 30 percent and 35 percent in the next three to four years."

Pantaloon Retail India, the biggest Indian retailer, plans to spend $1 billion to open about 4,000 new stores by 2010. Reliance Industries, the largest Indian company, has opened 135 convenience stores and supermarkets in the year that ended March 31.

For the moment, competition from global retailers like Wal-Mart Stores and Carrefour is absent. The government limits overseas investment in the retail industry to single-brand merchants, preventing global chains from buying stakes in local companies or setting up their own stores.

The government has commissioned a study of the effect of big retailers on neighborhood shops.

Six in 10 of the biggest Indian retailers by market value failed to keep pace with the Sensex benchmark in 2006. The 10 stocks on average gained 35 percent, while the Sensex overall jumped 47 percent, its fifth consecutive increase. Retail stocks are still more expensive than their peers elsewhere in the region.

Higher expenses, resulting from new store openings, cut into profit margins, said Amnish Aggarwal, an analyst with Motilal Oswal Securities in Mumbai. The pressure on margins will ease as companies grow in size and the revenue from new stores as a percentage of total sales decreases, he said.

Pantaloon posted its slowest profit gain in at least five years in the year that ended June 30, 2006. In the past month, HSBC and Citigroup have raised their ratings on the stock on expectation that its performance would improve.

"Last year, Indian retailers didn't report good numbers," said Lahiri of DSP Merrill Lynch. "But with the rapid scaling up, I would expect them to post better earnings this year."

Share performances of many are already improving to reflect that expectation. Rajesh Exports, a retailer of gold jewelry, has gained 85 percent in the past year; Titan Industries, the biggest watch and jewelry retailer, is up 64 percent; and Shoppers' Stop is up 23 percent.

The rally means that stocks of retailers no longer are as cheap as they were. Pantaloon shares are valued at 103 times earnings for the past year, while Shoppers' Stop sells for 86 times earnings. Shares in the Bloomberg Asia-Pacific Retail Index are valued, on average, at 34 times earnings. Companies in the Sensex sell for 24.8 times earnings.

Meantime, retailers' costs are rising because their rents in cities including New Delhi, Mumbai and Bangalore have almost doubled on average in the past year. The budget for the year to March 31 has imposed a 12.4 percent tax on commercial rents and that may pare profits. Retail companies spend about 6 percent to 9 percent of their sales on rent, according to Morgan Stanley.

"There will be pressure on margins because of the rise in rents, employee costs and logistics expenses," said Dipak Acharya at BOB Asset Management in Mumbai.

David Pezarkar of SBI Funds Management in Mumbai said, "You have to look at these stocks on a three- to four-year time horizon."


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## Bushroda

*Maharaja gets new clothes, and also video on demand *

*Post-merger with Indian, Air India readies for competition with all-new interiors for 6 aircraft at Rs 50 cr each, luxurious flatbeds for 1st class, in-flight entertainment for economy too * 
Lekha Agarwal


Mumbai, May 25: At Rs 300 crore, this is an expensive makeover, but fit for the Maharaja. 

At the Air India engineering base at Mumbaiâs Chhatrapati Shivaji International Airport, a Boeing 747-400 is getting the final touches after an exhaustive facelift, underway since February 1: The cabin is upgraded with all new economy seats, cushions and upholstery; the state-of-the-art i4000 Thales In-Flight Entertainment system is installed on every seatback including those in economy class, with audio and video on-demand, gaming and other interactive entertainment. There are microwave ovens for the business and first class galleys, brand new red carpets everywhereâeven the staircase leading to the upper deck has been replaced. 

As Air India readies to take on the world after its merger with Indian, all six Boeing 747-400s it ownsâall its other aircraft are on leaseâwill soon be given the de luxe appearance. 

âThe prototype aircraft will be ready to take to fly on Wednesday,â said V Thulasidas, Chairman and Managing Director, Air India, after inspecting the progress on the refurbishment underway at the airlineâs hangar. âWhile Air India reconfigures VVIP aircraft as per the need, this is the first time we are undertaking such a major in-house overhaul of our passenger aircraft,â he added. 

âCosts would have been 60 per cent higher had we outsourced the refurbishment work,â said K M Unni, Director (Engineering) who is overseeing the project. The first and business class seats, upholstered a couple years ago, are also being tweaked to accommodate the new in-flight entertainment system. âAll passengers will now have personal screens. In all, there is 415 gigabytes of content âthatâs nearly 200 movies in languages like English, French, Japanese, plus some regional ones,â Unni added. Nearly 50 per cent of the cost was on the IFE, âas there was extensive wiring required as well as expensive individual monitorsâ. 

Also ready: new overhead bins and aircraft side panels, a new overhead ceiling for the cargohold, fresh coat of paint for the side trims, cockpit trims and door trims and new galleys and toilets supplied by Jamco, a Japanese cabin interior equipment provider. 

While Heath Tecna was selected for the interior scheme and components like ceiling panel, trims and overhead bins, Texas-headquartered Weber Aircraft LP is providing the seats. 

Meanwhile, Air France is coordinating with all the vendors âfor overall control of the project and facilitating the Supplemental Type Certificate required for Federal Aviation Administration approval,â Unni added. 

The first post-makeover Boeing 747 is the one christened âAgraâ, the fifth aircraft purchased by the national carrier and inducted into service in October 1996. It should be operational by June 6, after required approvals from the Directorate General of Civil Aviation are received and is likely to be serviced on the Mumbai-London-Chicago route. 

With two months for each aircraftâs makeover, all six- âKonarkâ (VT-ESM), âTanjoreâ (VT-ESN), âKhajurahoâ (VT-ESO), âAjantaâ (VT-ESP), âAgra (VT-EVA)â, âVelha Goaâ (VT-EVB)âwill be ready by mid-2007. âThis was the prototype aircraft, and there were some teething problems, which will not delay the following five aircraftâ according to Unni. 

These six planes are the only ones from the current fleet that will be retained and be joined by the 68 new aircraft Air India has ordered with US aircraft manufacturer Boeing at a cost of $ 11.6 billion.


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## Bushroda

*India's Inflation For W.e May 12 Drops To 5.27% From 5.44% A Week Ago*

Friday, May 25, 2007 7:50:26 AM - Friday, the 25th May, the Central Statistical Office, GOI, while releasing its customary inflation data said that the annual rate of inflation based on wholesale prices for the week ended 12/05/2007 provisionally fell to 5.27% from 5.44% a week ago. The annual rate of inflation stood at 4.63% as on 13/05/2006 i.e. a year ago. India's inflation has been steadily coming down of late from the peak 6,77% in early 2007, in line with the government's intentions and pronouncements. The RBI's pro -active gestures to rein in inflation are showing visible results of late and moving toward the targeted number of 5% in the mid term of this fiscal and 4 to 4.5% in the long term.

The communiquÃ© added that the official Wholesale Price Index for 'All Commodities' for the week ended 12/05/07 provisionally rose by 0.1% to 211.7 from 211.4% for the previous week. The main index for Primary articles, which has a weightage of 22.02%, rose by 0.5% from the previous week due to higher prices of naphtha and aviation turbine fuel. However, the prices of bitumen declined. Among the Primary articles, the sub index for 'Food Articles' group rose by 0.7% due to higher prices of eggs, fruits & vegetables, milk and jowar. However, the prices of maize declined. The sub index for 'Non-Food Articles' group among Primary articles rose marginally to 203.4 from 203.3 for the previous week due to higher prices of raw wool and sunflower. However, the prices of raw jute declined. The index for the major group of Fuel, Power, Light & Lubricants, with an overall weightage of 14.23% was unchanged at its previous week's level of 321.8. The index of Manufactured Products, which has a major weightage of 63.75% in the computation, rose by 0.1% from the previous week.

Among the various sub groups that make up the manufactured products group, the index for 'Food Products' group declined by 0.6%, the index for 'Textiles' group declined by 0.1% and the index for 'Paper & Paper Products' group declined by 0.1%.On the other hand, the index for 'Rubber & Plastic Products' group rose by 0.6%and the index for 'Chemicals & Chemical Products' group rose by 0.1%. The index for 'Basic Metals Alloys & Metal Products' group rose by 0.9% and the index for 'Machinery & Machine Tools' group rose by 0.2%.

Changes in provisional figures

The CSO added that, the final wholesale price index for 'All Commodities' stood at 209.6 for the week ended 17/03/2007 as compared to the provisionally announced figures of 209.4 and annual rate of inflation based on final index, calculated on point to point basis, stood at 6.56% as compared to the provisional 6.46%.


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## Neo

Saturday, May 26, 2007 

*Vietnam, Indiaâs Tata to sign $3.5b steel deal *

HANOI: State-run Vietnam Steel Corp is to sign an agreement on May 29 with Indiaâs Tata Steel Ltd for a steel complex, a VSC executive said on Friday. 

The government said the total investment would be $3.5 billion. 

VSC Chairman Mai Van Tinh said in an invitation sent to Reuters that the Vietnamese firm would sign a memorandum of understanding with Tata on Tuesday in Hanoi, following government approval granted on May 18. 

The steel complex, to be built in the central province of Ha Tinh, 340 km south of Hanoi, would refine iron ore from Thach Khe mine to produce 4.5m tonnes of steel products per year, the government has said. 

It was not clear how much of investment each side would contribute to build the complex but the major steel project, along with those planned by South Koreaâs POSCO, could help Vietnam reduce its reliance on steel imports. 

A robust demand of the construction sector has prompted January-to-Mayâs imports of steel and billets to jump 39.5 percent from a year earlier to 3 million tonnes. The import value would also soar 64.7 percent to $1.7 billion, the office said in its monthly report.

http://www.dailytimes.com.pk/default.asp?page=2007\05\26\story_26-5-2007_pg5_22


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## Neo

Saturday, May 26, 2007 

*Social security for 370m workers: India unveils ambitious welfare plan*

NEW DELHI: India has unveiled an ambitious plan to provide healthcare and pension benefits for the first time to an estimated 370 million workers outside the existing welfare safety net, officials said Friday.

âIt is revolutionary scheme, a key programme ... aimed at taking care of the most vulnerable sections of the unorganised sector workers,â cabinet spokesman and Information Minister Priya Ranjan Dasmushi told reporters. Workers in Indiaâs formal sector already pay contributions for pensions and health insurance, but they make up a mere seven percent of the countryâs workforce.

The new legislation, approved by the cabinet late Thursday and subject to parliamentary approval, aims at extending those benefits to about 370 million people who work in the so-called unorganised sector - in areas such as agriculture, construction, weaving and fishing. âThere is also a section of people who are self-employed. They, too, are not covered by any social security programmes,â a labour ministry official said.

The proposed scheme involves workers being given personal âsmart cardsâ and having to pay the equivalent of one rupee a day at local registration centres, officials said. The government said the âUnorganised Sector Workerâs Social Security Bill,â a pledge of Prime Minister Manmohan Singh after his election in 2004 on a pro-poor ticket, will be presented to parliament in July.

The cabinet spokesman gave no details on how much the scheme would cost the country, but said the financial burden would be shared between the state and federal governments with the latter shouldering the bulk of costs.

The labour ministry official said Indiaâs federal budget already included a commitment to spend an initial sum of 10 billion rupees ($245 million) for a life insurance scheme for workers in the unorganised sector. âThis is an initial pledge. As the scheme takes shape after parliament gives approval, more money will be allocated for different programmes in a phased manner,â the official said.

http://www.dailytimes.com.pk/default.asp?page=2007\05\26\story_26-5-2007_pg4_15


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## Bushroda

*Trend watch: Mumbai- an International Financial centre *

Mumbai, a cluster of seven fishermen islands in 15th century, grabbed the attention of various rulers in history because of its strategic location and port advantage, lucarative for economic and subsequently empire expansion. In 16th and 17th century East India Company spread its arms over the important trading port, which pulled various businessmen and industrialists towards itself. Gradually, the island acquired a prominent status in the nation`s economy supported by its erstwhile basic amenities and public services. In recent period, large number of prime financial regulators and financial firms, who preferred to settle here were at a concensus to offer Mumbai the status of the `Financial Capital `of the India.

Thus, though type has changed over time, the harbor hasn`t lost its charm and continues to be a cynosure among economic agents. Government`s aspirations for the city have reached a new height wherein the city is getting all geared to step on to a new pedestal of making Mumbai an `International Financial Hub`.

In March 2006, Prime Minister, Dr Manmohan Singh talked of making Mumbai a regional financial centre. After a year, the High Powered Experts Committee (HPEC) set by the government submitted its report on creating an International Financial Centre (IFC)in Mumbai parallel to Tokyo, London, Singapore Dubai etc. 

The committee is looking forward to connecting the Indian financial system with the world`s financial markets through the IFS within five years from now. Going forward, by 2020, it is veraciously yearning to adorn Mumbai to compete with Global Financial Centre (GFCs), beyond Indian needs; after which HPEC dreams the Mumbai competing with other GFCs and acquiring increasing global marekt share.

International Financial Centre, considerably different from current KPO/BPO business units, provides highly valued and innovative financial services wherein the capital is highly mobile internationally. These centres specialize in providing services like raising funds for corporates, asset management and global portfolio diversification along with personal wealth management and global/regional corporate treasury management operations. Global transfer pricing, global tax management and cross-border tax liability optimization, and Financing for Global/Regional Public-Private Partnerships also come under its domain. 

With greater mobility of capital flows and increasing integration of the economies, the demand for these high valued services is expected to aggrandize in the coming years. Besides, India itselft is anticipating to become the biggest consumer of the same, on back of its booming economic growth and two-way cross border financial flows. 

If the Indian economy gets engineered for 9-10% growth on sustainable basis, the estimates reflect that IFS purchases by Indian households and corporate will rise to USD 70 billion by 2015 and USD 120 billion by 2025. 

Hence the most viable option is to develop such a centre in India itself which will prevent large outflow of money going to to Global Financial Centre (GFC) in the form of fees. 

On top of that India enjoys competitive advantages in creating IFC at Mumbai mainly powered by skilled human capital and strategic location among other IFCs.
Extensive use of English, financial professionals with generation of experience in entrepreneurship, speculation, risk taking and accounting accompanied with strong skills in information technology and quantitative thinking are strengths of Indian professionals. 

Further, Mumbai location is apt to interact with all of Asia and Europe through the trading day. India`s democracy and rule of laws also eliminates political uncertainty, and provides legislative, judicial and regulatory frameworks for market players. Mumbai`s most dynamic and technologically capable securities trading platforms (NSE and BSE), provides ground for the region to takeoff as an IFC. 

These formidable advantages, no doubt point out the genuine opportunity for India to create an IFC, however, overall assessment of macro economic condition, financial regime governance and regulation and urban infrastructure that exists in Mumbai are likely to constrain the ambitious objective of the government. 

A cross country assessment signalize India`s weakness on front of legal and regulatory freamwork governing its financial system. It has been observed that most services provided by IFCs are either banned or severely proscribed in India. Similarly, credibility of an IFC is a function of on government`s efforts to attain the commitments on macro economic stability. It also improves the optimum use of country`s available resources. Deficiencies in urban infrastructure and lack of world class infrastructure in the city are likely to limit the growth of the city as an IFC by decentralizing human talents and financial firms from the city in future. 

High Powered Expert committee (HPEC) constituted by experts in financial field, hence put a road map and recommends several policy changes for making Mumbai an international financial hub instead of regional one. 

On Macro economic environment: Emphasizing strong co-relation between stable macroeconomic environment and sound financial system, the committee has focused on size on fiscal deficits and debts which had highly influenced the policy decision since independence and thus, having greater impact in framing current financial system. Political and economic pressure of financing fiscal deficit has affected evolution of the Indian financial system, and might continue if the correct steps are not taken at this point of time. Hence following recommendations take shape: 

A reduction in the gross consolidated fiscal deficit to 4-5% of GDP. IFCs with fiscally incontinent domestic economies bring threats of endogenous or exogenous shocks, and reduce confidence of market participants. Hence the committee has recommended that governments at all levels (central, state and local) need to exert greater political will over the next five years and beyond to reduce their respective fiscal deficits.

Progressive reduction of the total public debt to GDP ratio from the current level of 80%of GDP to significantly less. To attain this, along with targeting the fiscal deficit, sale of public assets at all levels of government is estimated to contribute extensively.

Elimination of transaction taxes and imposition of Goods and Services Tax (GST) to financial services industry to form an competitive IFC. 

In attempt to reduce over dependency on domestic financial market to finance public debt, INR denominated instruments issued by Indian government should be available to anyone across the maturity spectrum. 

Shift the burden of future infrastructure investment from the public to the private sector through Public- Private Partnership (PPPs) to provide public goods and services on an appropriately structured basis that avoids the risk of privatising profits while socialising costs. 

On monetary policy fronts: The committee having the view that monetary authority should not assign tasks where multiple conflicts-of-interests can emerge, as the for solution of such problems leads to sub-optimal decisions on adjusting the base rate such as inflation. 

The committee recommends monetary authority to exclusively focus on the single task of managing price stability consistent with supporting a high growth rate.

To speed up on recommendations of Tarapore-2 committee on CAC, which also studies exchange rate management and suggests for gradual evolutiono of the INR into becoming a global reserve currency by 2025 

Capital account convertibility (CAC): Capital account needs to be liberalised more rapidly by the end of calendar 2008 at the latest. 

On Financial regime, Governance and Regulation :
HPEC stressed on immediate requirement of openness and outward-orientated of the 
Indian financial system to enhance its technology, efficiency, productivity,competitiveness and quality. It is essential to make the entire financial system more efficient so that it can offer world-class financial services to the domestic market and intermediate financial resources more efficiently for use in the real economy as well. It urges policy-makers revisit carefully the nature of the financial regime governance so as to make it more competitive, less fragmented, and more innovative.

The committee accentuated on reform of legal system as a part of financial regime governance. It has suggested to create International Financial Services Appellate Tribunal (IFSAT), which offers a comprehensive appeals procedure against all actions of all financial regulators, where judges have specialised financial domain
knowledge. 

It urges the easy entry of global legal firms, accounting firms tax advisory information technology business consulting and education firms that operates or supports IFS industry in Mumbai.

Artificial barriers between different segments of financial market that is banking insurance, capital markets, asset management activities and derivatives markets should be dismantled. It has urged to rearranged a regulatory architecture with an aim of meeting market needs instead of arranging market to meet the demands of regulatory convenience. 

Government should prepare for an exit strategy through reduction in its ownership of financial firms to trigger more healthy competition which would result into more efficient units. HPEC recommends to go slow to avoid serious conflicts among shareholders by reducing the state`s present shareholding in all types of financial firms to below 49% by end- 2008, below 26% by end-2010, and towards a full exit by 2015. 

Government of India should conduct a periodic (3-5 yearly) Regulatory Impact Assessment of the financial regulatory regime with an aim of to evaluate, using enhanced cost-benefit methodology, how efficient and cost-effective extant regulation (policy, practice, application, and institutional arrangements) is in meeting the main regulatory objectives, and to understand what modifications are needed to improve it. 

A migration from rules-based regulation to principles based regulation, will evolve rapidly toward unified regulation. A single regulator for all financial services is expected to avoid problems of co-ordination or of matters falling between regulatory cracks when regulation is more fragmented. In the same direction, the present legislation is asked to be revamped and redrafted into a new Financial Services Modernization Act. 

A key task in reforming regulatory architecture is to place all regulatory and supervisory functions connected with all organized financial trading (currencies, bonds, equities, corporate bonds, commodity derivatives; whether exchange-traded or OTC) into SEBI. 

India should immediately open up to Direct Market Access (DMA) on Indian exchanges to match the situation with foreign exchanges in other IFCs that provide a hospitable environment for algorithmic trading. 

The committee has stressed on developing the bond-currency derivatives (BCD) nexus which is underdeveloped in the Indian financial system. An established INR yield curve which is liquid and well-traded along maturities ranging from the very short (7-days) to the very long (30 or 50 years) and arbitrage free also recognized as prerequisite for a domestic bond market as a part of an IFC. 

To issue and trade bonds in other foreign currencies and removal of quantitative restrictions on FIIs and other global investors to invest in INR denominated bonds. HPEC has urged to implement R,H. Committee`s recommendations on domestic debt markets. Moreover on BCD nexus, the committee has asked for currency trading exchange in Mumbai, with minimum transaction size of INR 10 million. 

Urban infrastructure- The group expects world class infrastructure in its all possible sub-segments like commercial and residential; physical and telecommunication etc for Mumbai based IFC to be competitive globally. For the same, suggests that the impressive and laudable combined efforts being made by central, state and civic authorities, complimented by the active support of the private corporate sector should be enhanced and supported by multilateral financing institutions and PPP arrangements
in every sub-sector of infrastructure. The authorities should invite the open participation of foreign construction and development firms alongside their Indian counterparts to ensure that Mumbai`s infrastructure deficit is covered in the next 10 years. Moreover, the reform-oriented committee opined to have a City Manager and an administrative apparatus for Mumbai. 

The implementation of these recommendations; as correctly pointed by the committee, requires a repetition of history ; dismantling autarkic license-permit raj; this time in the finance industry. However, it can be noted that the committee`s report which has presented significant diagnostic weakness and a list of policy recommendations after a detail analysis of present scenario and requirements for Mumbai to emerge as an IFC, are jubilantly coincide with prerequisite of creating a sound and competitive financial system, necessary for a growing economy like India.


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## Neo

Sunday, May 27, 2007 

*Indian sugar industry heads for more trouble *

NEW DELHI: Indiaâs sugar industry, plagued by problems of plenty, is in for more trouble with forecasts of a bumper crop for the second year in a row. 

Sugar output in the year starting October could exceed 28 million tonnes, one million tonnes more than the projected record production this year. 

The industryâs woes started last October when the new season began with an inventory of four million tonnes of sugar. Trade officials say stocks at the end of the season would amount to 10 million tonnes, compounding the industryâs problems. 

âNow, what are you going to do with all the stocks, are you going to sink it in the sea?â asked Shanti Lal Jain, director general of the Indian Sugar Mills Association. 

Last week, the International Sugar Organization put the global supply surplus at above nine million tonnes this season, compared with its previous forecast of 7.2 million made in February. 

Bumper supplies led by Brazil have pushed sugar futures to a 16-month lowh of $310 per tonne in mid-April. The benchmark August contract is around $335 per tonne. 

Indiaâs prospects are being hemmed in by the glut, which some industry analysts believe could persist into the season starting October 2008. 

âSomething needs to be done, and done urgently. This problem is going to become more and more gigantic,â Jain said. 

The government last month said sugar mills in coastal areas would get a subsidy of 1,350 rupees a tonne, while those in the north of the country would receive 1,450 rupees per tonne to help prop up exports. 

But the incentive was meant only for white sugar. 

Analysts said the move has not helped much as buyers in the region, including Bangladesh, Pakistan and Middle East nations, have recently set up their own refineries, blunting demand for Indian white sugar. 

Export squeeze: âIf the situation has to change, the only way is for India to become a regular exporter, and that too of raw sugar,â Jain said. 

âIn raw sugar, India has a distinct advantage in freight costs over Brazil and Thailand in exports to the region. But what it needs is a policy mechanism to boost its exports.â 

The strengthening rupee hovering close to a nine-year high for a month, has also blown a hole in exports with margins falling by 10-20 percent. 

âThere has been a slowdown in exports because even domestic prices are better than exports now,â said Ajit Chougule, secretary of Maharashtra State Coop Sugar Factories Federation Ltd. 

Local prices have fallen to about 12,000 rupees ($295.8) per tonne, from about 18,000 rupees a year ago. 

âThe government has done the damage and they should know how to control it,â said M Manickam, managing director of Sakthi Sugar, referring to a ban on exports in July last year which industry officials say is the root cause of the problem. 

Since then, the government has tried hard to help sugar cane farmers get paid by mills on time and reduce stocks through export incentives. 

Industry officials said the government was also thinking of doubling the buffer stock to 4 million tonnes from two million tonnes, which they said might help prices stabilise briefly. But trade officials say help was too little and too late. 

Profits of many sugar companies have nosedived in the January-March quarter, with domestic prices falling below production costs and no sign of a recovery for months. 

âNext year will be even worse,â said GSC Rao, executive director of Simbhaoli Sugar 

âSugar companies are likely to register heavy losses unless the government and state government do something to improve the situation,â he added. 

Analysts said the cycle of low prices was expected to continue for more than a year. 

âThere is no hope of recovery in prices until the next season. It will be more or less flat at these levels, may be four to five percent here or there,â said Shardul Sharma, an analyst at Sharekhan.

http://www.dailytimes.com.pk/default.asp?page=2007\05\27\story_27-5-2007_pg5_24


----------



## Neo

*Indiaâs economy to overtake Japan by 2025: BoJ chief *

TOKYO: Indiaâs economy will overtake the Japanese economy by 2025 to rank third in the world after the United States and China in terms of purchasing power parity, Japanâs central bank chief predicted Monday.

Bank of Japan governor Toshihiko Fukui also urged India to loosen restrictions on capital flows and develop domestic bond markets so as to further integrate itself into the global economy.âEveryone recognises the large and varied influence India is having on the world,â he said told a symposium in Tokyo.

âIf we extend the current (growth) rate, Indiaâs purchasing power parity will exceed that of Japan by around 2025 and will rank third after the United States and China,â he added. Fukui also pressed India to minimise environmental damage and take steps to boost energy efficiency to help curb high energy prices.

India is expected to report on Thursday that its economy expanded at a record 9.2 per cent in the past financial year despite a series of monetary tightening measures by the central bank to cool inflation, analysts say.

http://www.thenews.com.pk/daily_detail.asp?id=58033


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## Neo

*Indian PM seeks farm sector boost *

About 7% of government spending goes on food subsidies.

Prime Minister Manmohan Singh has said India must boost its agriculture for the sake of its economy - and hundreds of millions of poor farmers. 
Mr Singh told senior officials that urgent changes in the farm sector were essential in order to curb inflation and to sustain high economic growth. 

The prolonged slowdown in agriculture had to be reversed so farmers could share the benefits of growth, he said. 

Poor, rural populations have been feeling left out of India's boom. 

The BBC's Damian Grammaticus in Delhi say's Mr Singh's government has done badly in recent state elections, which many blame on the fact that the poorest Indians living outside main cities believe they have yet to share in the country's economic success. 

*'Rural distress' *

India's farm sector grew by 2.3% on average over the past three years, against a target of 4%. 



> Reversing the prolonged slowdown in this sector is essential for our goal of inclusive growth.
> 
> Prime Minister Manmohan Singh



"The rates of growth of agriculture in the last decade have been poor and are a major cause of rural distress," Mr Singh said. 

Policy changes were urgently needed if the country's economic growth were to benefit not just those who live in cities but hundreds of millions of poor farmers too, he said. 

"Reversing the prolonged slowdown in this sector is essential for our goal of inclusive growth, for ensuring that growth benefits all sections of society and all regions of the country." 

Mr Singh said India had to increase production of rice, wheat, pulses and edible oils. 

The government planned schemes which would boost output of such basic food items within three years, he said. 

The government had had to import a number of food items to ensure adequate availability, he added. 

*Suicides *

Experts say that India needs to double its farm output to achieve near double digit economic growth in the next few years. 

While the country's economy has been registering 8% plus growth, the farm sector, on which the majority of its 1.1bn people live, has seen declining production and profits. 

Thousands of farmers have taken their lives in India's south and west after they failed to repay high-interest farm loans. 

Our correspondent says that if Mr Singh's targets are to be met, India will have to invest heavily in better water management, more seeds, fertilisers and pesticides - as well as in giving farmers access to cheap credit. 

Mr Singh said the federal government would make available more than $6bn over the next four years to boost farm output. 

http://news.bbc.co.uk/2/hi/south_asia/6699737.stm


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## Bushroda

*Booming Chennai: India's Shenzhen* 
By Chris Devonshire-Ellis 
2007-5-30 
--------------------------------------------------------------------------------

The free trade zones that China so cleverly used to kick start the entire reconstruction of the country have now arrived in India.

With low tax rates and high investment into their local infrastructure, they remain a proven way in which a large country can suddenly offer world class facilities - for the world's multinationals - without breaking the bank in doing so, and without disenfranchising much of the rural population.

Indeed, Shenzhen, one of China's first Special Economic Zones, was restricted for many years to non-Shenzhen residents - with a de facto border control where even foreign passports had to be shown in order to get in.

India hasn't gone quite that far - it never had the hukou system that China has. 

Yet here (in India) too, land use and the dispossession of this by local governments from the farmers has its problems. All developing countries have their human issues, it appears.

The comparisons don't just stop there though. Mumbai has all the brash, somewhat quixotic atmosphere that Shanghai does, neither city owing their existence to entirely indigenous developments.

Yet it's back to modern days where one really sees the comparisons.

Chennai, on the southeast coast of India, just north of Sri Lanka, is an ancient port city, previously known as Madras.

Yet its gleaming steel and concrete buildings, its huge gantry cranes, and the hustle and bustle of its booming port seem similar to Shenzhen, on China's south coast.

The free trade zones in both cities seem to echo each other.

Nokia placed a US$2 billion facility in Chennai, and Microsoft in Shenzhen.

IT pours through Chennai's ports from Bangalore and Hyderabad. The same happens in Shenzhen as Guangdong Province gears up for IT, with microchips and processors manufactured in Dongguan and Guangzhou, in Guangdong Province.

For every Chinese city there seems to be an Indian counterpart - globalization and the development of consumerism across Asia dictating that for demand, even China's massive trade surpluses are actually not yet enough to meet the need.

And the free trade zones - the modern equivalent of trading posts on the silk road - are pointing the way in both countries.


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## Bushroda

*Foreign interns canât have enough of the Indian summer*

*They say it gives them a balanced and realistic view of the role India and its firms will play in the hi-tech world*
Jeetha DâSilva

Mumbai: Harry Robertson, a computer science student, had a good idea of how he wanted to spend the summer after completing his engineering degree from Ecole Polytechnique, a French university. Harry was keen to use this time to improve his programming skills and get some real research experience in information technology before he goes to Stanford University for his Masterâs. The best place to get that kind of experience, according to him, was in India. 

Harry is one of a growing breed of students from top schools around the world who have signed up to intern at businesses across India this summer. They are everywhere: Infosys Technologies Ltd, Tata Consultancy Services Ltd (TCS), Tata Sons, Helion Ventures Partners, Christian Medical College (CMC), Vellore, and many more firms in services and manufacturing sectors.

Currently, an intern with Infosys, Harry came to India because he prefers âto embrace than ignore a country which produces half a million engineering graduates per year and is reshaping the global IT landscapeâ. He has been working at Infosysâ R&D unit, SETLabs, in Bangalore. âI was greatly impressed with how much greenfield research is done here, and Iâve been immersed in a pretty innovative project,â he says.

TCS receives many applications for internships from students of leading schools across the world. âThe booming Indian economy, global exposure at TCS and excellent learning opportunity are some of the key reasons behind the growing number of foreign students seeking internship at TCS,â says K. Kesavasamy, head, Global Academic Interface Programme at TCS. 

The company has interns from La Rochelle Business School (France), Bocconi University (Italy), University College, Dublin (UK), Nanyang University (Singapore) and University of Washington (US), among others. The number of interns at TCS has doubled in the last couple of years, according to Kesavasamy. 

Venture capital firms, auto companies, even health-care institutions are attracting students from overseas for short internship stints.

According to Satish Pradhan, executive vice-president, Group HR at Tata Sons, internships provide students a good platform to assess growth opportunities in growth markets. âThis exposure helps them decide if they could pursue opportunities in these emerging markets or whether they should stick to businesses closer home,â he says.

Tata Sons started accepting interns from B-schools such as Harvard Business School and Wharton School at the University of Pennsylvania a few years ago. Today, the company has about 50 interns from across the world in its corporate centre alone. âThis is in addition to those that individual Tata companies take on by themselves,â says Pradhan.

Helion Ventures Partners, an India-focused venture fund, has been receiving internship applications from students at Ivy League B-schools even though the firm is less than a year old. According to Kanwaljit Singh, managing directorâinvestment advisor, Helion, âStudents want to get some hands-on experience in the venture capital space in India. They see a lot of value in this experience,â he says. Helion will have two students from top B-schools interning with it over the next few months.

Even the health-care space is witnessing the same trend. Medical students, especially from Europe and Russia, have been flocking to CMC, Vellore. âWith more foreign patients coming to India, the country is being seen as among the best in the world in terms of medical skills,â says Dr George M. Chandy, director at CMC Vellore. 

According to Ameet Nivsarkar, vice-president, Nasscom, the interest in working in India, particularly in the IT sector, has been growing. 

Sanjay Purohit, associate vice-president and head, corporate planning at Infosys, agrees. âAs one of the few fast-growing trillion dollar economies, the buoyancy in Indian economy is attracting the best to experience globalization first-hand,â he says. 

Infosysâ campus at Bangalore plays host to almost 125 summer interns from institutions across the world. Last year, the company received 12,000 applications, a huge increase from the 300 applications it received when it started taking interns from overseas schools in 1999. Currently, Infosys recruits interns from 83 schools worldwide; most of the schools are in North America, the companyâs biggest market. 

Itâs not just students that gain from the experience; companies that host them also benefit. âThe internship programme helps showcase the organization as an employer of choice among the global student fraternity,â says Kesavasamy of TCS.

Mid-way through his internship at Infosys, Harry says his stint in Bangalore is giving him a balanced and realistic view of the role India and its companies will play in the future in the hi-tech world. âEven if I work in the West for a US or European firm later, my path will certainly cross with Indiaâs again, and this experience will be useful,â he adds.


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## Bushroda

*India Economy Probably Expanded at Fastest Pace in Three Years *
By Cherian Thomas

May 30 (Bloomberg) -- India's economy probably expanded last quarter at the fastest pace in more than three years as sales at Honda Motor Co., Hutchison Essar Ltd. and other companies surged on rising consumer demand. 

*South Asia's largest economy grew 9.5 percent in the three months to March 31 from a year earlier, up from 8.6 percent in the previous quarter, according to the median forecast of 12 analysts in a Bloomberg News survey.* The Central Statistical Organisation report is due tomorrow at noon in New Delhi. 

Factories in India are increasing output at the quickest clip in a decade as workers take advantage of the biggest pay increases in Asia to order and purchase new homes, cars and mobile phones. Growth may start to slow after the central bank raised interest rates to a five-year high to curb inflation. 

``The economy is powered by strong gains in industry and services,'' said Rajeev Malik, an economist at JPMorgan Chase & Co. in Singapore. ``Economic activity will moderate because of aggressive monetary tightening, and slower exports owing to a sharp appreciation of the currency.'' 

India's $854 billion economy has expanded at an average quarterly pace of 8.8 percent in the past two years, compared with 5.7 percent in the 1990s, on record credit growth. That's stoked demand for manufactured products and farm goods and pushed inflation to a two-year high in January. 

Interest Rates 

The Reserve Bank of India raised its key rate seven times in the past 1 1/2 years to tame loan growth. In response, State Bank of India, the nation's biggest commercial bank, now charges its best borrowers 12.75 percent, the highest since April 1999. That's discouraging borrowers and has helped ease inflation to an eight-month low of 5.27 percent in the second week of May. 

The yield on the benchmark 10-year government bonds declined 8 basis points this month as nine of 11 economists surveyed by Bloomberg last month said the central bank's overnight policy rate may be ``close'' to a peak or have already reached that level. 

``The way interest rates have risen has been a cause of worry,'' said Anil Dua, vice president, marketing and sales at Hero Honda Motors Ltd., India's biggest motorcycle maker, which posted a 27 percent decline in profit last quarter. ``The long term outlook for sales is good as disposable incomes are rising and infrastructure in the country is improving.'' 

Industrial production, which accounts for a quarter of the economy, may also slow because of weak exports after the rupee rose to a nine-year high. The central bank has slowed dollar purchases on concern that rupee funds injected from intervention will stoke inflation. 

Industrial Production 

Exports, which account for two-fifths of India's industrial output, rose 8.8 percent in March, a third of the pace of the past year. The rupee has gained 8.5 percent against the U.S. dollar since Jan. 1. 

The Organization for Economic Cooperation and Development last week forecast India's growth will slow to 8.5 percent in 2007 from 9 percent in the previous year as rising interest rates puts the brake on consumer spending. Still, the pace is lower than only China among the world's largest economies. OECD estimates China to expand 10.4 percent this year. 

Indian wages may rise an average 14.5 percent in 2007, the largest salary increase among Asian countries for a second year in a row, Hewitt Associates Inc. said in March. 

Services such as telecommunications, banking and hotels, which make up 55 percent of India's economy and are its fastest growing segment, will continue to support growth, said Robert Prior-Wandesforde, economist at HSBC Holdings Plc in Singapore. 

Mobile Phones 

India is the world's fastest-growing wireless market as only 16 percent of the nation's 1.1 billion people own mobile phones. Half the population has no access to finance from a bank or a money lender, while only seven of 1,000 people own a car in India compared to 500 of 1,000 in Western Europe. 

Hutchison Essar, the company that Vodafone completed purchase last month for $10.7 billion, and other Indian mobile- phone operators jointly added 4.13 million users in April, the Cellular Operators Association of India said May 11. 

ICICI Bank, India's most valuable financial services company, this month sought approval to sell 175 billion rupees ($4.3 billion) of shares to local and overseas investors, the nation's biggest offering, to meet growing credit demand. It's loans to companies and consumers increased by a third in the year to March 31. 

Honda Siel Cars India Ltd., a unit of Japan's second- biggest carmaker, plans to start making its first small car model in India in 2009 with an investment of 30 billion rupees to enter a segment that comprises three-quarters of all cars sold in the South Asian country. Honda's sales in India have increased 33 percent since January. 

`Bright' Outlook 

India's Sensitive index, which has gained 33 percent in the past year, is 1 percentage point shy of a record. India yesterday became the third emerging market after China and Russia to have a stock market in excess of $1 trillion in value. 

``India's longer-term outlook is bright,'' said Keith Gyles, international economist at Capital Economics Ltd. in London. ``There is plenty of scope for catch-up growth as workers shift out of the relatively slow-growing agriculture sector into the more productive service and manufacturing sectors.'' 

India's agriculture, which accounts for a fifth of the economy and provides livelihood to more than three-fifths of the country's population, probably grew 2.7 percent in the year ended March 31, the government estimated in February, the slowest pace in two years. 

Prime Minister Manmohan Singh's government plans to attract $320 billion in roads, power, ports and other infrastructure by 2012 to attract global manufacturers, create jobs and accelerate growth to as much as 10 percent in the next five years. 

http://imageshack.us


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## Bushroda

*Rs.250 bn package for agriculture revamp*

Prime Minister Manmohan Singh Tuesday announced a Rs.250 billion package for agriculture that aims to boost the growth rate of the sector and put Indian economy on the path to a 10 percent growth.

Prime Minister Manmohan Singh Tuesday announced a Rs.250 billion package for agriculture that aims to boost the growth rate of the sector and put Indian economy on the path to a 10 percent growth.

In his closing remarks at the 53rd meeting of the National Development Council (NDC) attended by chief ministers, Manmhan Singh said the agriculture plan for states should be comprehensive with both immediate and medium-term objectives of four to five years.

He said the Planning Commission and the ministry of agriculture will finalise the details of this scheme in two months and hoped the states would make full use of this opportunity.

This package came as a follow-up to the resolution adopted by the NDC, which said: 'Agricultural development strategies must be reoriented to meet the needs of the farmers.'

The prime minister said the central government will be initiating steps to launch a Food Security Mission in the coming months to reduce dependence on import of basic food items that will help the country increase the production of wheat, lentils and edible oils.

The proposed scheme aims at producing an additional 8 million tonnes of wheat, 10 million tonnes of rice and 2 million tonnes of pulses over the next four years, using 2006-07 as the base year.

With most chief ministers stressing on irrigation and the need for more funding, Manmohan Singh said the Planning Commission will certainly look into this and finalise an approach for utilizing the irrigation potential effectively and efficiently.

Expressing grave concern over the tardy growth of the farm sector, he also called for overcoming the 'technology fatigue'.

'One feature that stands out is the lack of any breakthroughs in agricultural production technology in recent years. There is a technology fatigue which we need to address,' he said in his opening remarks at the meet.

Unless the farm sector grows at desired levels, the 10 percent economic growth targeted for the 11th plan (2007-08 to 2012-13) would remain elusive, he said.

The prime minister said steps should also be taken to make farming a viable proposition, adding that the same cannot be achieved unless there is a shift away from small and marginal farming.

The prime minister said the state governments also needed to specifically focus on reducing what he called was a yield-gap in farm output since there still existed the potential to increase productivity by 40-100 percent.

'Bridging these gaps requires localised and state-specific strategies based on local agro-climatic conditions and constraints,' he said, adding this issue was all the more important since the scope for expanding crop area was limited.

The prime minister said the mantra for his government was inclusive growth and to ensure that growth benefits all sections of society and helps in reducing rural distress and poverty.

The meeting of NDC was specifically called to address issues concerning the farm and allied sectors. It comes after a similar meeting of the Planning Commission he chaired earlier this month.

The meeting also focused on the need for special efforts to complete all projects taken up under the Accelerated Irrigation Benefits Programmes without time and cost overrun and prioritise irrigation projects.


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## Bushroda

*Come, gentle Bollywood fans, and fall on Sloughâs town centre*

Jeremy Page in Delhi 
To the citizens of Slough it is simply a mundane shopping centre, but to visitors from India Queensmere could soon become a place of pilgrimage. For it is one of the more unlikely locations to feature on a new map showing where Bollywood movies were filmed. 

The map â which marks obscure locations such as a Surrey football ground, Stansted airport and a pub in Harefield â is to be distributed next week in the latest effort to attract more Indian tourists to Britain. 

âIf you must, you can even reenact elaborate song and dance scenes from your favourite films right on the spot where they were shot,â reads the blurb alongside the map, available on visitbritain.co.in. It is being produced to coincide with the International Indian Film Academy Awards ceremony, the Bollywood Oscars, which starts in Yorkshire on June 7. 

About 3,000 copies of the map will be handed to film stars, directors, producers and fans at the four-day ceremony, which is being held in Britain because of the importance of the British market for Bollywood. VisitBritain will also distribute more than 50,000 copies in India. 

VisitBritain first produced a Bollywood map of Britain in 2001, but it contained only a handful of sites, such as the Blackpool seafront, which featured in the 1994 film Bhaji on the Beach. The new map includes sites from 30 films, including Molesey Football Clubâs ground in Surrey, where parts of the 2002 hit Bend it Like Beckham were filmed, and Sloughâs Queensmere centre, where some of the 2001 Bollywood film Yaadein was set. 

The map is part of a new drive by VisitBritain to attract more Indian tourists, especially to areas beyond the traditional tourist hubs of London and Edinburgh. It illustrates the enormous influence of the Indian film industry, which produces an average 800 movies each year and has developed a taste for foreign settings since Indiaâs economy began opening to the world in 1991. 

It also reflects the growing spending power of the new Indian middle class, which the McKinsey consultancy predicts will turn the country into the worldâs fifth-biggest consumer market by 2025. 

VisitBritainâs own research shows that the number of Indian visitors to Britain hit 400,000 last year, an increase of about 16 per cent over the previous year, and that they spent more money per head than their Japanese counterparts in London last year. 

Mr Bawa said that he expected the number of Indian visitors to continue growing at current rates for the next two to three years, fuelled principally by the growth of the middle class and by cheaper and easier air travel. 

*Location, location, location*

â The Kingâs Arms pub in Harefield, West London, as well as the Queensmere shopping centre, Slough, and Thorpe Park theme park are used in Yaadein 

â Bicester Village shopping centre in Oxfordshire provided the backdrop for Kabhi Khushi Kabhie Gham in 2001 

â Molesey Football Club in Surrey and the Contessa lingerie shop in Twickenham, West London, appeared in Bend it Like Beckham 

â More impressive, but a bit more remote, is Dolbadarn Castle in Wales, which featured in the 2004 film Kyun! Ho Gaya Na


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## Bushroda

May 28, 2007 2:05:00 PM MST 
*Indian prime minister sets 2012 as deadline to end power shortage in the country (India-Power-Economy)*

NEW DELHI (AP) _ India must build hundreds of new power plants over the next five years to end the massive electricity shortages that threaten the countryâs rapid economic growth, Prime Minister Manmohan Singh said Monday.

Indiaâs economy has expanded more than 8.5 per cent annually over the past four years, but a widening gap between the demand and supply of electricity threatens to derail that growth.

During peak hours, demand outstrips supply by as much as 25 per cent in some parts of the country, causing frequent outages and forcing shutdowns at factories and businesses.

By 2012, India will need to generate at least 200,000 megawatts of power to eliminate any shortage, Singh said. Currently, the country has a total capacity of 130,000 megawatts.

Singh promised to reward states that accelerate work on new power generation facilities by waiving some federal loans.

âElectricity is vital for sustained economic growth,ââ Singh told a conference of elected leaders. âIf we expect our economy to keep growing at 9-10 per cent annually, we need a commensurate growth in power supply.ââ

Singh called the targets ambitious, but said the goals could be reached.

The power sector in the country is mostly run by Indiaâs state governments, which have been slow in adding new capacities due to a lack of funds. Although the sector was opened to private capital more than a decade ago, few companies have invested in building new plants because of regulatory bottlenecks.

Apart from adding new plants, the state governments have to take measures to prevent high losses during transmission and distribution, which also include theft of electricity.

âNo meaningful development of the power sector would be feasible with these levels of losses,ââ Singh said. âWe need to come heavily down on it as it is seriously affecting the financial viability of the (power) sector.ââ

Most of Indiaâs electricity is currently generated by coal-fired power plants, but the country also has some hydroelectric and nuclear generating capacity.

Singh did not say how authorities plan to deal with the environmental impact of the additional power plants.

INDEX: BUSINESS ECONOMY UTILITIES INTERNATIONAL CP Command News is one of many services from The Canadian Press, Canadaâs No. 1 Source for News.


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## Bushroda

*The Father Of Indian Outsourcing*
Ruth David, FORBES 
05.29.07, 12:00 PM ET

Mumbai, India - In the days leading up to India's '90s outsourcing boom, one of its pioneers remembers starting presentations to prospective American clients by telling them, "You probably think I travel to the office on a bullock cart."

At a time when India is firmly established on the global map, that line seems outdated, slightly offensive even. But Raman Roy, CEO of outsourcing firm Quatrro, says he often had to pinpoint India on a world map to global clients, who'd heard little of its business potential before the outsourcing industry changed the country's global standing. 

The numbers tell the story. The software and services sector employs 1.6 million people, is hungrily looking for more to join the ranks, saw growth rates of above 30% for the last five years and exported products worth about $24 billion last year, a fifth of India's total exports. 

Roy, who set up outsourcing centers in India for both American Express (nyse: AXP - news - people ) and General Electric (nyse: GE - news - people ) in the late 1990s, says the robust growth of software and services firms has brought about tremendous changes since. "People now know about India; the industry has gained acceptability," says 49-year-old Roy, who also founded the outsourcing firm Spectramind Services that was acquired by Wipro (nyse: WIT - news - people ) in 2002.

In a conversation with Forbes.com, Roy, who's often called the "father of the Indian BPO [business process outsourcing industry]" talks about the growth of his business baby, the biggest challenge to software services firms and how an industry has changed the way Indians live. 

Forbes.com: You've been in this industry since its inception. What's changed? 

Roy: There's an acceptance of India globally now. In the late '90s my favorite line at the beginning of a presentation was, "You probably think I come to the office on a bullock cart." People now know about India. There was a time when I sold it by pointing out the country on a world map, showing prospective clients pictures of popular historical monuments. 

In the U.S., we were considered dangerous when software and services was a 300,000-strong industry because people saw what a potential threat we could be. Some of those fears have materialized in terms of the growth of Indian firms. But with our companies rapidly expanding abroad, now there's also a realization that outsourcing doesn't hurt the economy. 

Indian businesses are far more self-confident today, so there's the ability to experiment and move up the value chain. And they're willing to make large investments globally.

What's different on the domestic front? 

When I was setting up the first call center for American Express and went to the government to take bandwidth for operating it, policymakers thought I was into espionage because no one had ever asked for that much bandwidth earlier. 

When it came to call centers, we used dedicated lines we bought from service providers. And to route calls from abroad to India, we needed to put international links into public service phone numbers. That was illegal in India. Convincing the government that changing regulations like that one would not hurt its revenues took a lot of running around. 

For the same call center, I went to meet bureaucrats after they sat on our application for months. A government official said he could approve a call center, but could not approve a center to handle "incoming and outgoing calls." So we had to print definitions of a call center from the Internet and take them to him to show him that's what a call center did. 

There were laws that forbade employing women in jobs after 10 p.m. In each state that we planned on setting up call centers in, we had to persuade its government to change that law.

After the initial hiccups, the government seems to have left your sector alone, and the backlash abroad is a tale of the past. What are the industry's challenges now? 

The biggest challenge is the lack of talented manpower. High attrition rates [an average of 12 % to 15%] are the first signs of what will become a big issue. The top five companies spend a combined $1 billion per annum just on new hire training. Unless we upgrade our educational and training systems, we wonât be able to meet the opportunities the industry is creating. 

The lack of proper infrastructure is also a problem that we're facing across industries.

The U.S. still accounts for an overwhelming portion of the revenues of India's top outsourcers. How much is that likely to change in the next couple of years? 

The U.S. accounts for 75% to 80% of revenues, but if you look at global statistics, about 56% of outsourcing comes from that country. So it is the largest market. Though Indian firms are now seeing plenty of opportunities in Europe as they shift toward services of a higher order. 

The first phase was just arbitrage and substitution. But increasingly countries like China are turning to Indian outsourcers because they can't find people domestically. The impact beyond the U.S. is growing as firms move to meet different outsourcing needs--in industries like health care, law and education. Growth depends on our ability to scale up effectively. 

Indian software firms are not really known for innovation. Has it suffered because of the focus on services? Is there a move to change that now? 

We're still evolving, but as Indian firms move up the services ladder innovation is becoming a requirement. Few companies have a nascent culture of innovation. Is the industry realizing that? Yes. Has it become a trend? No yet, but we're in the early stages of it. 

You've started outsourcing units from scratch four times already, and all of them have been successes. What did you do right? 

We listened to customers, and that's easy to talk about, but tough to do. We kept changing our models based on exactly what our customers wanted. In the early stages, getting the government to give us a hearing and change laws so we could operate was a big challenge, but now the shoe is on the other foot. If we raise issues, policymakers listen. 

We also focused on our employees. In the initial period of call centers, mothers, grandmothers, uncles, aunts would come to meet me looking for assurances that it was OK for their daughters to leave the house at night to come to work. They were worried about what the neighbors would think. I met all these people and talked their concerns through. Today, there are too many young women working to worry about neighbors any longer.

There was no spending power among the college graduates earlier [software firms hire about 70% of their employees straight out of college]. Now when you walk into malls these are the people spending all the money. Tech industry employees don't utilize their money for conspicuous consumption, BPO employees do. I'm not siding with either side, but we've made a fundamental change in spending habits, consumption, the way these people live. 

On the global front, where is India's competition coming from? 

A few years ago, countries like China, Philippines and Mexico were among the few on the outsourcing radar. Today, there are over a dozen attractive destinations--from Sri Lanka to Malaysia to a host of Eastern European nations. But I don't think there's a big threat, because the outsourcing pie is large and only growing. 

Right now, more than half of what is outsourced comes to India. When outsourcing is spoken about, India is spoken about in the same breath. The big challenge is for us to continue to evolve as customers' needs change. We need to now focus on innovation. But the future's looking bright. It's an exciting time to be an Indian in India.


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## Bushroda

*FDI expected to touch $30 billion in 2007-08: Kamal Nath* 
29 May 2007 

Mumbai: Foreign direct investment (FDI) into the country is expected to touch $30 billion in the fiscal year ending March 2008, commerce minister Kamal Nath said. 

"While FDI equity flows were $5.5 billion in 2005-06, it increased almost three times to $15.7 billion in 2006-07. We have set a target of $30 billion in 2007-08," he told a business conference, adding, "The liberal FDI policy pursued by us is aimed at garnering greater foreign investment." 

The minister said the Indian economy grew 9.2 per cent in the last fiscal ended March 31, 2007 in line with the government's forecast. 

"During 2006-07, the GDP growth was 9.2 per cent, with industry registering a growth of 11.3 per cent," he said. 

"To achieve a growth rate of 9 per cent per annum over the next five years starting 2007-08, we need an investment rate of 35.1 per cent of GDP," he said.


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## Bushroda

*Indian travel websites take off*
By Raja M 

MUMBAI - India's travel websites are energetically powering the country's varied and growing online business, with a market leader, MakeMyTrip.com, being voted by global innovation tracker Red Herring as one of Asia's fastest-growing technology startups. 

Like many others in this burgeoning travel-marketing tribe cashing in on India's tourism and Internet boom, MakeMyTrip.com offers corporate business travel, air tickets, hotel bookings, car rentals and bargain-basement vacation packages. 

Dhruv Shringi, co-founder of another industry leader, Yatra.com, estimates that online travel business in India currently generates about 8% of the total market. "We expect the market to grow to over US$2 billion by 2008 and continue to grow at over 20% until 2010," Shringi told Asia Times Online. 

Tourism is one of the Indian economy's top earners, with prospects looking brighter all the time. The latest Conde Nast Readers' Travel Awards, a survey by the London-based global travel journal Conde Nast, ranked India as the fourth-most-favored country for vacations, above Switzerland and South Africa. India has the world's fastest-growing tourist economy, with the industry growing at an explosive 13% annually over the past four years. 

According to the Tourism Ministry, foreign arrivals in India increased by 15% between 2005 and 2006, with more than 50% being foreign business travelers. The domestic-traveler segment is also expected to grow by about 15% this decade. 

Alongside the tourism boom, India's Internet population is rapidly growing. The Internet and Mobile Association of India announced that one out of every 10 urban Indians now has access to the Internet, with the user base having doubled since 2004. India clocked 50 million Internet users this March. 

Inevitably, the two rapid-growth sectors of the economy are strongly connected. According to global market analyst Euromonitor International, India will be Asia's fastest-growing market for online travel by 2010. Other top markets include Hong Kong, mainland China, Malaysia, Vietnam and Indonesia. 

Euromonitor believes that India's ballooning urban population and Internet growth over the next five years will make the country a lucrative market for online travel retailers. 

Euromonitor forecasts double-digit growth in urban Indian households between 2006 and 2010, giving India "a great potential for online businesses and, as a result, great potential for online travel retail". 

A sign of these good times is the success of market leader MakeMyTrip.com, which was established in 2000 primarily to serve non-resident Indians heading home from the United States. The site has a 4% share of the non-resident Indian travel market, which is estimated to be worth $1 billion, a 40% share of the online travel market, and reports a turnover of $130 million. 

MakeMyTrip claims a whopping 200% growth from the last fiscal year, and reports having clocked 1 million clients so far in 2007. It expects to double transactions this fiscal year and aims to achieve a turnover of $245 million in the near future. 

"I think the Indian websites are more comprehensive and offer more advanced options compared to some of their Asian counterparts," said Dhruv Shringi of Yatra.com. He added that ticket sales of domestic flights garner the most business. Yatra.com offers travel information across 5,000 Indian cities and small rural areas, and its investors include one of India's top media companies, TV 18. 

Another online travel retailer, TripMela.com, announced a partnership with TravelLab, a top European search portal, for a travel metasearch tool focusing on the Indian travel market. This will offer access to online air ticketing and travel bookings through travel agencies. TripMela.com describes itself as "India's online publisher of airfare specials, hotel deals, and great travel packages specially tailored for Indian travelers". 

With about a dozen big players and the number increasing, the online travel customer gets unprecedented bargains. TravelGuru.com sells "sunny getaways" for prices starting at Rs350 ($8.60), a cruise aboard a luxury houseboat in Kerala starting at $1, and hill-station vacations at $6. 

The team behind Travel Guru reflects the operational needs of online travel websites. Chief executive officer Ashwin Damera, a Harvard management graduate, worked earlier with Citibank; co-founder Ganesh Rengaswamy worked with software giant Infosys; and others in the team include a hotelier, travel-agency operators and consultants. 

Non-resident Indians are also getting their slice of the pie, with sites such as TripYogi.com, which was founded by two Indian entrepreneurs in California and offers a simple, uncluttered homepage focusing on airlines and hotel deals. 

Such telecommunications-oriented travel marketing could be enhanced by mobile-phone services now offering travel-ticketing options. 

Vinton G Cerf, a founding father of the Internet and currently vice president of Google, has said the rapidly growing mobile-phone user base in developing countries such as India and China, and not personal computers, will power the growth of the World Wide Web.


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## Bushroda

*DGCX to launch world's first Indian Rupee futures contract on June 7*

*The Dubai Gold and Commodities Exchange (DGCX) today announced that it will launch its Indian Rupee FX contract on Thursday, June 7th*

This will be the first time in the world that an Indian rupee currency contract will be traded on an organized exchange. 

'The DGCX Indian Rupee contract will for the first time in history enable individuals and companies to have the opportunity to hedge and trade their Indian Rupee risk on transparent and equal basis that an exchange provides', said Colin Griffith, DGCX Chairman. 'To date, the only market available to hedge Rupee risk is the non-deliverable forward ('NDF') inter-bank market but that is not accessible to everyone. However the recent strengthening of the Rupee (it has risen over 15% against the dollar in under a year) has necessitated the need for an efficient and easily accessible to all, risk management tool which is exactly what this DGCX contract will provide. As the Indian economy continues to grow at record pace; so will the need for this contract' added Mr. Griffith. 

'The Indian Rupee contract demonstrates again that DGCX is at the forefront of innovation both in the region and globally', Mr. Griffith continued. 'DGCX was the first derivatives exchange to go live in the Middle East and this addition to our list of contracts has attracted interest from major financial institutions and corporates across the world who are looking to hedge their Rupee risk'. 

Each DGCX Indian Rupee contract represents two million Rupees. Prices will be quoted in US Cents per 100 Indian Rupees, with a minimum price fluctuation of 0.000001 US Dollars per Rupee ($2 per contract). At any point in time DGCX will list the current and next two calendar months, plus the next three calendar quarterly months. 

DGCX will hold a mock trading session for all its members before the launch on the 2nd June. 

DGCX currently lists Gold, Silver, Fuel Oil and three currency pairs; Euro/US Dollar, GB Pound Sterling/US Dollar and Japanese Yen/US Dollar and recently announced the launch of its Steel contract in June.


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## Bushroda

*India's Market cap crosses trillion-dollar mark*

*The Sensex is valued at 23 times reported earnings, the highest in Asia after China and Japan*
By Pooja Thakur/Bloomberg

Mumbai: India became the third emerging stock market after China and Russia to surpass $1 trillion (Rs40 trillion) in value, helped by the fastest economic growth in 60 years, a strengthening currency and overseas investment.

The rupee, Asiaâs best performer this year, advanced to a nine-year high on Tuesday, 28 May 2007, helping push the marketâs value to $1 trillion. It closed on Wednesday at Rs 40.87. 

The countryâs economic growth, averaging 8.6% in the past four years, helped spur earnings growth of as much as 35% for the year ended 31 March, according to Ratnesh Kumar, Citigroup Inc.âs Mumbai-based research head. Overseas funds are also supporting the stock market after buying a net $3.76 billion of equities this year, capital market regulator the Securities and Exchange Board of India (Sebi) said 28 May.

âProfit growth at Indian companies has been phenomenal,â said Ashish Goyal, who helps manage about $20 billion in Asian stocks at Prudential Asset Management (HK) Ltd. âYou canât ignore a market that delivers such fantastic earnings.â

The Sensex has jumped 34% in the past year and the rupee has strengthened 12%.
The Sensex is valued at 23 times reported earnings, the highest in Asia after China and Japan. Thatâs more than the benchmarkâs five-year average of about 17 times profit.
A combined $10 billion of new share sales planned by ICICI Bank Ltd, Tata Steel Ltd and DLF Ltd will help boost the countryâs stock market value further.

ICICI Bank, Indiaâs largest lender by market value, is raising $5 billion in the countryâs biggest share sale. Tata Steel chairman Ratan Tata is selling stock to help fund his $12 billion purchase of London-based Corus Group Plc., creating the worldâs sixth-largest steel maker. DLF, a New Delhi-based property developer, plans to sell at least $2.1 billion of shares. 

The offers are dwarfed by Commercial Bank of China Ltdâs $22 billion stock sale, the worldâs largest initial public offering, and OAO Rosneftâs $10.6 billion sale in Russia. Chinaâs market value has doubled in the past year to $2.47 trillion. Russiaâs market value dipped below $1 trillion in May to $949 billion on 29 May.

Reliance Industries Ltd, Indiaâs largest stock, is ranked 137th globally, compared with seventh and 12th for the biggest companies in China and Russia.

*Long way to go* 

âEven as we reach $1 trillion, the size of our companies is still small in comparison to global peers,â said Rajiv Anand, who manages $3.5 billion in assets at Standard Chartered Mutual Fund in Mumbai. âWe have a long way to go to achieve scale.â

Rising earnings are leading some Indian companies to expand overseas. Sun Pharmaceutical Industries Ltd, which is headed by billionaire Dilip Shanghvi, on 21 May agreed to spend $454 million in cash to buy an unprofitable Israeli rival and repay its creditors. Shares of Sun, Indiaâs biggest drug maker, have soared six-fold in the past four years.

Record profit at billionaire Kumar Mangalam Birlaâs Hindalco Industries Ltd, Indiaâs biggest aluminium producer, helped the company pay more than $3.4 billion to acquire Novelis Inc. of Atlanta. Birla was ranked 86th on Forbesâ list of the worldâs richest people in 2006, after his wealth almost doubled in a year.

Founders of companies included in the Bombay Stock Exchangeâs BSE 200 Index own about 73% of the benchmarkâs combined market value, according to data on the exchangeâs website. Overseas investors own about 21% and local mutual funds 3.7%, according to the exchange.

Bharti Airtel Ltd, the best-performing stock in the Sensex in the past five years, has jumped 30 times in value. Indiaâs largest mobile-phone company posted a 12th straight quarter of record profit as it added new customers in the worldâs fastest-growing wireless market.

Reliance climbed tenfold in the past five years even as the company was split last year to settle a dispute between the Ambani brothers.

Finance minister P. Chidambaram said in March the nationâs gross domestic product is likely to surpass $1 trillion next year, making it the third Asian economy to do so.

âReaching $1 trillion is a sentiment booster,â said Chakri Lokapriya, who manages $425 million of stocks in India, Brazil, Russia and China at BNP Paribas Asset Management UK Ltd. âIt validates the India story of robust growth.â


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## Bushroda

*Stage Set For Biggest Indian IPO*
Ruth David, FORBES NY
05.30.07, 3:50 AM ET

MUMBAI - Real estate developer DLF on Tuesday kicked off the sales effort for an initial public offering to raise $2.4 billion, the largest yet in India, but one that comes at a time when investors are treading cautiously in the property sector amid fears of a bubble and tighter regulations. 

New Delhi-based DLF is selling 175 million shares at a price band of 500 rupees ($12.33) to 550 rupees ($13.56) per share. The issue opens for subscription on June 11. The company plans to invest a third of the proceeds from its IPO in buying new land. 

The floatation is expected to amount to 10.27% of its post-issue capital.

DLF, which is controlled by billionaire Kushal Pal Singh, has over 220 million square feet of existing developments and 574 million square feet of planned projects across the country. 

âWe aim to build up land reserves at competitive prices at strategic locations in the country, to gain from them during the upside in the economy,â DLF Vice Chairman Rajiv Singh told reporters here. He expects real estate prices to remain steady, despite fears of a bubble.

Management said it expects to earn margins of about 50% on its projects. 

Real estate prices in the cities have skyrocketed in the last two years as home owners and business developers have grabbed choice swathes of land to build swanky new offices, malls and residential buildings. But in the last few months, a rapid rise in interest rates has dampened demand for new homes, raising hopes that prices will fall in the near term. 

DLF first announced plans for an IPO last summer, but its plans were shelved after objections from minority shareholders resulted in regulatory objections. 

DLF plans to diversify into insurance by year-end and has tied up with U.S.-based Prudential. It will also go into developing infrastructure and special economic zones, which use government financial incentives to attract local and foreign investors. 

The company hopes to find buyers for the share issue abroad, including in Dubai, the U.S., U.K. and Singapore. Indiaâs Kotak Mahindra, Lehman Brothers (nyse: LEH - news - people ) and Merrill Lynch (nyse: MER - news - people ) are among the banks reaching out to investors for the issue.


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## Bushroda

*Indian stocks pass $1 trillion mark*
Harry Wilson
30 May 2007 

India has become the third of the so-called "Bric" countries to have a total stock market capitalisation in excess of $1 trillion (â¬743bn), after soaring valuations and an increase in the rupee to dollar exchange rate took it beyond the milestone for the first time.

The Bric countries, which comprise Brazil, Russia, India and China, were first named in a Goldman Sachs economics paper which deemd the four countries as the most likely to become the world's dominant economies by 2050.

India's achievement follows that of China and Russia, which both have total listed market values of over $1 trillion. Russia breached the mark last December, while China passed the milestone several years ago.

Brazil is now the only Bric nation not to have a combined stock market value of more than $1 trillion.

The growth in size of Indiaâs market comes as Indian financial group ICICI prepares to sell shares worth $5bn in the largest equity offering in the countryâs history and property group DLF plans the largest initial public offering.

However, Indian equity issues volumes are slower than last year, with less than $3bn raised so far this year compared to $6bn for the same period last year, according to Bloomberg data.


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## Bushroda

*A first class move by Jet Airways*
May 2007 

Jet Airways is this month adding a First Class cabin on the Mumbai-London route, as well as introducing new Business and Economy Class seating. It coincides with the delivery of the first of 20 new wide-bodied aircraft, part of an ambitious US$3.7 billion expansion programme aimed at establishing the privately owned Indian carrier as a âtop fiveâ global airline.

There will be eight of the new First Class suites on each Boeing 777 to be delivered, providing more than 26ft2 of space and featuring dual sliding doors to create a feeling of privacy. The seat within will extend to 83 inches, making it, the airline claims, the world's longest fully flat bed.

Each suite will include a 23-inch monitor, a personal wardrobe and office facilities. Says Naresh Goyal, Jetâs chairman: âThe seats are at the cutting-edge of airline design technology and promise to surpass the very best of the British and international competition for comfort, luxury and style. We have spent more than two years designing the product and are confident in saying that the flying experience on Jet Airways will be the very best in the air.â

The new cabins will feature on the airlineâs 27 weekly flights between London Heathrow and cities in India (Mumbai, Delhi, Amritsar and Ahmedabad) over the next two years as nine more 777s and 10 Airbus A330-200s are delivered.

âWe have seen impressive growth in the UK marketplace in the last two years and believe that with our new aircraft, highly competitive products, unrivalled levels of customer service and attractive pricing, we will become the number one airline of choice for visitors to India.â

In addition to the wide-bodied aircraft order, the airline holds options to buy more of each type and has recently agreed to purchase 10 Boeing 787 Dreamliners, with deliveries from 2011.


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## Bushroda

*'Chindia' rising: Not your same old, golly-gee Asian superpowers*
MARCUS GEE 
May 30, 2007

If you want to know how the rise of Asia's new economic superpowers is changing the world, take a look at a new book called _*Chindia: How China and India are Revolutionizing Global Business*_. It's a collection of articles by journalists at BusinessWeek, nicely stitched together by the magazine's former Asia correspondent Peter Engardio.

It's easy to be too golly-gee about Asia's spectacular rise, but when you read some of the facts in this book you can't help but keep exclaiming "golly," "gee" quite a bit. For instance did you know that:

Some experts estimate that there are more information technology engineers in the Indian IT Mecca of Bangalore (about 150,000) than in Silicon Valley (120,000)

China is already the world's biggest cellphone market, with more than 350 million subscribers, and that is expected to hit 600 million by 2009.

That same year, the number of Chinese with broadband Internet access should surpass the number in the U.S.

China and India produce half a million new engineers and scientists a year, compared with 70,000 in the U.S.

In 2008, the value of goods exported by China is expected to pass $1-trillion (U.S.) a year.

We have never witnessed anything quite like what is happening in India and China. As this book notes, the world has seen other countries take off in breathtaking fashion: Japan in the 1950s and 1960s, South Korea, Hong Kong and the other Tiger economies of the Far East in the 1960s and 1970s. But none had the demographic heft - the pure numbers of people - to change so much for so many industries around the world. 

You have to look back to the emergence of a young, vibrant U.S. in the 19th-century to find a parallel to the rise of "Chindia" today. But as BusinessWeek points out, even that remarkable rise can't really compare with the phenomenon of China and India. "Never has the world seen the simultaneous, sustained takeoffs of two nations that together account for one-third of the planet's population."

For the past 20 years, India's economy has been growing at an average of 6 per cent a year, China's an amazing 9.5 per cent (11.1 per cent in the most recent quarter). If things continue at that rate, China could overtake the U.S. as the world's biggest economy in 40 years and India could surpass Germany as the world's No. 3 economy in 30 years. By mid-century, India and China combined could account for half of global output.

Of course, things could easily go off the tracks. Chindia's authors are careful to point out the risks and liabilities that both countries have. China has a brittle, undemocratic political system and rising levels of open, often violent, unrest. Its growth has been fuelled partly by massive government investment, some of it wasteful and poorly directed. Its banking system is inefficient, with bad-loan levels of up to 20 per cent. Its stock exchanges often seem more like casinos than modern capital markets.

India, for its part, suffers from crumbling airports, highways and ports, an enormous, stifling bureaucracy and horrendous (though improving) levels of poverty and illiteracy, to say nothing of religious tensions and the enduring shame of the caste system.

Despite their dazzling growth rates, India and China started from such a low base that, put together, they still produce just 6 per cent of world output. On the other hand, their growth is blinding. During the Industrial Revolution, Britain and the U.S. doubled real per capita incomes in 50 years. China is doing it every nine.

Whatever challenges they face, the dynamism and optimism of these two giants seems unquenchable. "What makes the two giants especially powerful is that they complement each other's strengths," Chindia's authors remark. China is a manufacturing powerhouse, India specializes in software, design, services and precision industry.

That makes for a world-beating combination. But it doesn't mean the rest of us lose out. The Economist magazine predicted last year that, largely because of exploding growth in places like India and China, "the first decade of the 21st century could see the fastest growth in average world income in the whole of history."

Golly. Gee.

mgee@globeandmail.com


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## Bushroda

http://imageshack.us


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## Bushroda

*India's notorious slum up for sale*
Paul Peachey 
Wed, 30 May 2007

One of Asia's most notorious slums went up for sale on Wednesday in a $2.3-billion project to raze thousands of ramshackle homes and create one of the world's hottest building sites. 

The ****** and cramped 535-acre Dharavi slum stands on prime building land in Mumbai, parts of which have some of the world's most expensive real estate, and has long been an embarrassment to promoting India's economic capital as a global financial centre.

Newspaper advertisements were published in 20 countries Wednesday offering "the opportunity of the millennium" for five major developers to take part in the long-delayed and controversial project in one of Asia's largest slums.

Some 57 000 families â about 300 000 people â will be moved into free but tiny one-bedroom homes in the area and swathes of land will be cleared for business and high-rise flats bounding some of the city's wealthiest parts.

"Throughout the world slum dwellers are regarded as pests," said architect Mukesh Mehta, who has championed the project for a decade.

"With this, the government of Maharashtra (the state that includes Mumbai) regards them as important human resources and assets.

"You can expect a very beautiful suburb that hopefully other people from around the world will want to emulate."

The project has been fiercely condemned by the slum-dwellers, who have created a vibrant self-sufficient economy of potteries, tanneries and other industry among the warren of narrow lanes.

At one side of the slum, women stuff mattresses and vans ferry goods to market while potters work on open roofs creating clay figures for sale.

Environmental groups say such industries at Dharavi provide an object lesson in recycling.

But city planners say the tanneries and workshops pollute Mumbai's already ****** waterways and the project includes environmentally-friendly workshops.

Still, small businessmen are furious at the "imposed" scheme and say some will be squeezed from areas covering several thousand square metres of floor space into flats of just 21 square metres.

Only those registered on voter rolls in 1995 will be eligible for free homes.

Groups representing slum dwellers claim that about 300 000 people will be left with nowhere to go â driving them into new slums.

They also point to the woeful record of the authorities in previous schemes to re-house slum dwellers in the city.

"All the concessions have been for the developers and builders, none at all for the people," said A. Jockin, president of Slum Dwellers International.

"They are not concerned with people development. Now the struggle will start. People will be on the streets."

New schools, colleges, health clinics, a sports complex and a golf driving range are all slated to be part of the redevelopment due for completion within seven years, according to Mehta.

For every square foot provided for rehabilitation, builders will be entitled to 1.33 square feet for sale making it a lucrative opportunity in the peninsula city where space is scarce.

"It's been mind-boggling. Everyone and their cousin want to participate in this scheme," Mehta said.

Dharavi's notoriety as one of Asia's largest slums has made it an unlikely destination for Bollywood movie makers, Britain's Prince Charles, foreign politicians and slum tourists seeking out the problems of modern India.

Dharavi has also symbolised the political failure to adequately house a population swollen by migrants trying to make a living in India's most prosperous city.

More than half of Mumbai's nearly 18 million population, by official count, live in slums, according to Mehta.

The slum, once a marsh and rubbish tip, has stood in its current form for about 60 years with the third generation of families running businesses from workshops and yards.

Compared with many of the city's flimsy wood and tarpaulin slums built alongside roads and the airport, its long-term status has seen many permanent concrete structures built and amenities installed.

But critics say pollution, waste and disease are major hazards in the unsanitary conditions while the "informal" system operating the slum is controlled by gangs.

Asia accounts for some 60 percent of the total global slum population of 924 million in 2001, according to a UN report in 2003.

It reported that in South Asia the rapid growth of urban populations outstripped the ability of cities to cope.


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## Bushroda

*Indian summer heats up the Yorks economy*

http://imageshack.us

LEARNING CUSTOMS: Yorkshire Forward's chairman Terry Hodgkinson welcomed Bollywood to the region in 2006 

As an event it will be over in just four days. But businesses across Yorkshire hope that the International Indian Film Academy Awards will not only provide a short-term financial boost but leave a long-lasting economic legacy for the region. Business Editor Nigel Scott reports
IT was an aircraft hangar like no other â and it was the place where Yorkshire's dream of an Indian summer became reality. 

The setting was Dubai and the giant space had been transformed into an arena for the 2006 International Indian Film Academy Awards. 

It was there, in the midst of a glittering Bollywood spectacular, that the big secret was revealed â in 2007 the event would be brought to God's Own County. 

Since the first IIFA awards ceremony was held in the Millennium Dome, London in 2000, the awards have been hosted in Dubai, Singapore, Johannesburg, the Genting Highlands in Malaysia and Amsterdam. 

Those who had fought Yorkshire's corner for 2007 are celebrating the region's success in the firm belief that, beyond all the glitz and glamour, this year's event will bring a lasting economic legacy for the region. 

The IIFA Weekend may last for just four days but the region's powerbrokers believe that the business benefits could well help to shape Yorkshire's economic prosperity for generations to come. 

Nobody has been a more fervent supporter of the event than Wakefield businessman, Terry Hodgkinson. 

The chairman of Leeds-based regional development agency Yorkshire Forward nailed his colours firmly to the mast when he, and the agency of which he is the figurehead, pledged Â£2.5m of funding in partnership with Yorkshire Tourist Board to make the Bollywood dream come true. 

He says the 12 months since Yorkshire was given the green light to host the event has "flown by," but he is adamant that the region is about to witness "something spectacular."

Mr Hodgkinson told the YEP: "I know that there are still those in the region who question why Yorkshire Forward became so involved in bringing an awards event to the region. 

*Stronger*

"But by looking at the event as more than just a glittering red carpet affair, I believe it is easy to understand our motivation and the benefits the awards will bring to our region." 

Of the 270,000 businesses currently operating in the Yorkshire and Humber region, only 5,000 are involved in international trade. 

Yorkshire Forward's view is that if the region wants to achieve its goal of being a truly global player, it needs to improve significantly on that statistic â and that forging stronger links with a country that is the second-fastest growing economy on the planet is a "no-brainer."

As Mr Hodgkinson explains: "Bringing the IIFA weekend to Yorkshire and Humber will not only attract thousands of Indian film lovers from across the globe, who will stay in our hotels, eat in our restaurants and visit our attractions â it will also showcase our region to millions more who watch the awards worldwide." 

From the business perspective, the Global Business Forum on Thursday June 7 will be a highlight of the four day event â bringing the leaders of some of the biggest businesses in India to the region to find out more about the investment potential of Yorkshire. 

Hundreds of high-powered business leaders from around the globe are expected to converge on Leeds on the first day of the Bollywood 'Oscars' for an event expected to produce deals worth billions of pounds. 

Organisers say hot topics and likely ventures to come out of the Global Business Forum include direct flights between Yorkshire and India and potential investment from an Indian hotelier to set up a five-star hotel in or near Leeds, besides new Yorkshire base for an Indian film production company. 

The event, at the Royal Armouries, Leeds, will be led by the Federation of Indian Chambers of Commerce and Industry (FICCI) and will see two Indian ministers touch down in Leeds along with 300 guests from across the UK, Europe, the Middle East and South Africa and around 100 more from India. 

Yorkshire businesses will be able to find out more about the opportunities for trading with India. 

Regional chambers of commerce are already planning trade missions to India to pick up on new prospects and business leads and, by bringing some of India's leading film directors to the region, it is hoped that Yorkshire will become the set for future Bollywood blockbusters. 

A highlight of the forum will be guest speaker Sir Martin Sorrell, chairman of the world's largest advertising agency WPP. 

Other key speakers include Lord Karan Bilimoria, chairman of the Indo British Partnership Network and chief executive of Cobra Beer, and Indian Government Union Minister, Mr Praful Patel. 

Kamalesh Sharma, the High Commissioner of India, and Sir Michael Anthony Arthur, the British High Commissioner to India, will also be present. 

The awards are put together each year by event management company Wizcraft. 

Its boss, Mr Sabbas Joseph, said of the business potential of the event: "We believe by bringing the business community to Yorkshire it will generate a large quantity of investment into the region which we believe will be of tremendous value."

Tourism-related businesses are expected to be a major beneficiary â hence the key role played by the Yorkshire Tourist board as a major driver of the region's Bollywood bid. 

*Pioneering*

Its no-nonsense chairman, Yorkshire businesswoman Judith Donovan, is in no doubt that a lasting economic legacy can be secured. 

"It's a four-day event, giving a four weeks buzz and a four-year business legacy," is her take. 

It has been estimated that Â£10m will be added to the region's economy from tourism alone over the four days â and Ms Donovan believes that figure will increase to Â£20m per year over two years. 

About 28,000 people are expected to travel to the region from India, Europe, the US and South-East Asia over the four days. 

Mr Sabbas Joseph believes Yorkshire â with its multi-cultural communities â has all the right ingredients for hosting the event. 

He said: "We could have given the bid to anyone. But when we looked at the Yorkshire bid, we saw passion, commitment and a sense of direction and cultural thinking." 

Leeds Metropolitan University has launched a pioneering new partnership with IIFA, which it believes will strengthen educational, business, arts and sporting links with India and offer Leeds Met scholarships to winners of global competitions. 

Two academic chairs, the IIFA Chair for Global Cinema and an India Chair celebrating 60 years of Indian independence will be established, and it is intended that the partnership will also provide numerous opportunities for students to get involved with Indian Cinema, raising the profile of Leeds Met's Northern Film School. 

A formal partnership agreement was signed by international film star and global ambassador for the IIFA, Amitabh Bachchan, and the director of student-centred change management at Leeds Met, Joy Kumar. 

Leeds Met students and staff are playing an active role in the planning and delivery of the IIFA Weekend in Yorkshire, including the charity cricket match at Headingley Carnegie Stadium where a host of Indian stars will compete in front of an anticipated crowd of 18,000. 

Professor Simon Lee, Vice-Chancellor of Leeds Met, said: "We have many students from India and we would like our whole university to become better students of India. 

"We will give what we can to this special partnership and we know we have much to learn. From the inspirational heritage of the struggle for Indian independence through to the grace and artistry of the contemporary Indian film industry, this partnership will take us all beyond boundaries."

Hundreds of high-powered business leaders from around the globe are expected to converge on Leeds on the first day of the Bollywood 'Oscars' for an event expected to produce deals worth billions of pounds.

Organisers say hot topics and likely ventures to come out of the Global Business Forum include direct flights between Yorkshire and India and potential investment from an Indian hotelier to set up a five-star hotel in or near Leeds, besides new Yorkshire base for an Indian film production company.

The event, at the Royal Armouries, Leeds, will be led by the Federation of Indian Chambers of Commerce and Industry (FICCI) and will see two Indian ministers touch down in Leeds along with 300 guests from across the UK, Europe, the Middle East and South Africa and around 100 more from India.

Yorkshire businesses will be able to find out more about the opportunities for trading with India.

Regional chambers of commerce are already planning trade missions to India to pick up on new prospects and business leads and, by bringing some of India's leading film directors to the region, it is hoped that Yorkshire will become the set for future Bollywood blockbusters.

A highlight of the forum will be guest speaker Sir Martin Sorrell, chairman of the world's largest advertising agency WPP.

Other key speakers include Lord Karan Bilimoria, chairman of the Indo British Partnership Network and chief executive of Cobra Beer, and Indian Government Union Minister, Mr Praful Patel.

Kamalesh Sharma, the High Commissioner of India, and Sir Michael Anthony Arthur, the British High Commissioner to India, will also be present.

The awards are put together each year by event management company Wizcraft.

Its boss, Mr Sabbas Joseph, said of the business potential of the event: "We believe by bringing the business community to Yorkshire it will generate a large quantity of investment into the region which we believe will be of tremendous value."

Tourism-related businesses are expected to be a major beneficiary â hence the key role played by the Yorkshire Tourist board as a major driver of the region's Bollywood bid.

Pioneering

Its no-nonsense chairman, Yorkshire businesswoman Judith Donovan, is in no doubt that a lasting economic legacy can be secured.

"It's a four-day event, giving a four weeks buzz and a four-year business legacy," is her take.

It has been estimated that Â£10m will be added to the region's economy from tourism alone over the four days â and Ms Donovan believes that figure will increase to Â£20m per year over two years.

About 28,000 people are expected to travel to the region from India, Europe, the US and South-East Asia over the four days.

Mr Sabbas Joseph believes Yorkshire â with its multi-cultural communities â has all the right ingredients for hosting the event.

He said: "We could have given the bid to anyone.

But when we looked at the Yorkshire bid, we saw passion, commitment and a sense of direction and cultural thinking."

Leeds Metropolitan University has launched a pioneering new partnership with IIFA, which it believes will strengthen educational, business, arts and sporting links with India and offer Leeds Met scholarships to winners of global competitions.

Two academic chairs, the IIFA Chair for Global Cinema and an India Chair celebrating 60 years of Indian independence will be established, and it is intended that the partnership will also provide numerous opportunities for students to get involved with Indian Cinema, raising the profile of Leeds Met's Northern Film School.

A formal partnership agreement was signed by international film star and global ambassador for the IIFA, Amitabh Bachchan, and the director of student-centred change management at Leeds Met, Joy Kumar.

Leeds Met students and staff are playing an active role in the planning and delivery of the IIFA Weekend in Yorkshire, including the charity cricket match at Headingley Carnegie Stadium where a host of Indian stars will compete in front of an anticipated crowd of 18,000.

Professor Simon Lee, Vice-Chancellor of Leeds Met, said: "We have many students from India and we would like our whole university to become better students of India.

"We will give what we can to this special partnership and we know we have much to learn. From the inspirational heritage of the struggle for Indian independence through to the grace and artistry of the contemporary Indian film industry, this partnership will take us all beyond boundaries."


----------



## Bushroda

*Squeezing China and India into the G8 tent* 
Hamish Mcrae 


THERE is, in case you have not yet noticed, another G8 summit coming up in Germany. You will notice, if only because substantial protests are being planned, that "Smash G8" placards have been written, that wire barricades are being erected and that police are primed.
Let's hope that the protesters heed Angela Merkel's call to avoid violence, but put it this way: the swanky Baltic resort of Heiligendamm, with its sumptuous hotels and naturist beach, would not be a great place for a quiet getaway next week.

The razzmatazz, as so often, obscures the substance which is that the world economy is experiencing a global boom, and more than this, a boom that is more widely dispersed than any previous one in human history.

It is a boom that is rewriting the world's economic power book.

As a result, the G8 the United States, Japan, Germany, Britain, France, Italy, Canada and Russia no longer represent the world's most buoyant economies.

Power is shifting towards the Asian giants of China and India, both of which are growing far faster than any G8 member, even Russia; and to the energy exporters of the Middle East; and to some extent to Latin America. Yes, we that is "we" the West are still important in the sense that we have the position of incumbency. But we become a little less important with every passing year.

When these economic summits were started by president Valery Giscard d'Estaing at the chateau of Rambouillet near Paris in November 1975, the six countries that took part (Canada and Russia joined later) could think of themselves as making the world's key economic decisions. 

They declared that they were "determined to overcome high unemployment, continuing inflation and serious energy problems", and you could at least acknowledge that it was within their authority to have a stab at these.

Now they make similar declarations, though with the balance swung away from unemployment and towards poverty in Africa and concerns about the environment.

But the outcomes are not really within their control, even if they could agree on the policies, which they can't. 

What the "non-G8" world thinks and does is ultimately going to be more important.

That first economic summit was 32 years ago. Barring some global catastrophe that does not bear thinking about, in another 32 years' time, in 2039, China will be on the brink of passing the US to become the world's largest economy. India will be indubitably the world's third largest. 

So if one is considering the policies that might best contain global warming in, say, 2050, the decisions by China and India over the next 30 years will be the key ones determining the outcome.

So why aren't they in the G8 tent?

In one sense they are, in that they attend these meetings as observers, as do a number of other key countries including Brazil, South Africa, and Mexico. But they have made it clear that they are just that they are not participating. 

Thus India's Environment Minister, Pradipto Ghosh, said last week that India would reject proposals put forward at the G8 to limit greenhouse gas emissions. "Legally mandated measures for reducing greenhouse gas emissions are likely to have significant adverse impacts on gross domestic product growth of developing countries, including India," he said. "This in turn will have serious implications for our poverty alleviation programs ... this is not the path we wish to pursue." 

As for China, it is already the world's third-largest trading nation and its President, Hu Jintao, will be in Heiligendamm. But the Chinese have made it clear that they have not been asked to become a full member of the summit club and have pointedly said that since they have not been asked, they cannot give any answer as to whether they would like to join or not.

Indeed you could make a strong case that it is not in China's self-interest to become too close to the G8. It would have not much to gain and a certain amount to lose. It can, after all, play its global role on its own.

Take investment in Africa, one of the G8's priorities. I saw a statistic last week that China's fund for investment in infrastructure in sub-Saharan Africa was nearly three times the size of the one agreed by the G8.

China needs the US and the European markets to sell its goods. It also needs international investment. But these can be secured by bilateral agreement.

For example, if the price of market access to the US is allowing its currency to appreciate against the dollar as Congress demands, then it will gradually do so. The yuan is still officially pegged to the dollar but minor adjustments to its bands have allowed it to rise by 7 per cent over the past two years.

China is also profoundly concerned about both the short-term impact of pollution on public health, as well as the long-term implications of climate change on its economy. 

It has a number of pioneering projects aimed at slowing the growth of carbon emissions. But it is not going to be told what to do by Merkel.

There are a string of issues on the agenda at Heiligendamm but at their head is the one of the environment. 

At some stage the world will need to negotiate a new Kyoto agreement on carbon emissions and clearly countries such as China, India and Brazil will need to be party to this.

The present agreement, which is deeply unsatisfactory since it only covers the developed world, formally ends in 2012. It is in everyone's medium-term self-interest that is should be replaced with something more universal.

It is in the interest of the new industrial giants because they are likely to suffer most from climate change. It is in the interest of the present developed world because it will be hard to sustain ever-tougher environmental measures if the effect of these is massively outweighed by increased emissions from the new developed world.

So the geo-political bedrock for a deal is there. The market, too, will help a bit. Higher energy prices support conservation and a switch to cleaner technologies. But the lead has to come as much from the East as the West.

The headlines next week are going to be about the fissure between the positions of the US and the European Union. Already the angry exchanges about the wording of the final communique are being leaked. Of course getting the US onside matters and it may be that we have to wait another 18months for a new administration before much will move. We should however beware: a change in administration may change the rhetoric but not the actual policy.

But rows between the US and Europe have a curiously antique feel to them. This is still the world of Rambouillet, when China was still four years from the start of its market reforms, India some 17 years from its economic take-off, and the USSR had another 15 years to live.

We need to have all the elephants in the big tent and we need to pay attention to their views, their culture and their values.

- The Independent


----------



## Bushroda

*India`s new power action plan*
By Kushal Jeena May 30, 2007, 21:05 GMT 

NEW DELHI, India (UPI) -- India is preparing a new action plan to eliminate the country`s power shortage by 2012 and to create additional power generation capacity.

Prime Minister Manmohan Singh unveiled Tuesday the plan to revitalize the ailing power sector at a daylong conference of the chief ministers of the India`s 34 states.

The plan calls for the states to launch a campaign to end power theft, a major reason for the power shortage. Special courts are planned to deal with the issue.

The plan also calls for the setting up of a professionally managed national power project management board to look into all issues relating to this sector. The board, which is to be headed by Power Secretary Anil Razdan, has been assigned the task of keeping track of all small, medium and large power projects commissioned during the 11th plan period. The board, a nodal body for the power sector, would also assist federal and state utilities in ensuring that project implementation targets are met for each project.

The conference recommended that the government set up a subcommittee to work out the financial aspects of adding to India`s power capacity generation.

'The Electricity Act provides for the constitution of special courts for speedy disposal of cases of power theft,' Singh said. 'These courts should be made working as early as possible.

'The center would at the same time provide financial help for upgrading transmission and distribution system.'

Singh said as losses come down to agreed-upon levels, the government would reward the states that perform.

'For this purpose, the accelerated power development and reforms program is being revised and contours of this revised scheme would be announced in next two months,' Singh said.

In its 11th five-year plan that began in April and runs until 2012, India said it planned to add more than three times the power capacity added in the 10th plan.

'These ambitions are laudable. What we require is to have an effective project implementation and monitoring structure in place,' Power Minister Sushil Kumar Shinde said at the conference.

India`s total capacity stands at 130,000 megawatts, but for its economy to grow at its current pace at least 200,000 MW will be needed by 2012.

The conference also adopted a resolution aimed at setting up a standing group of state power ministers that would meet once every three months to review the sector`s activities. 

The ministers asked the federal government to grant the states leeway on the schedule for reforms in the power sector without having to adhere to the deadline set by the Electricity Act of 2003. They argued that clubbing well-performing state electricity boards with poorly performing ones and directing them to usher in certain reforms was not a positive approach.

In 1991, the year it opened up its economy for foreign investment, India announced reforms in its government-controlled power sector to encourage competition and seek private participation in each sub-element of the sector.

Notwithstanding these initiatives, most state electricity boards continued to make large financial losses because of an unsustainable level of aggregate technical and commercial losses. The dues that the state electricity boards had to pay to the state-run power companies crossed $3.5 billion.

These dues still are major hurdles to the reform process and the government has been unable to resolve the issue, as the state electricity boards cite their poor financial health as the main reason they can`t pay dues.

The government settled on one condition: State-owned power companies would now supply power to the state electricity boards on an immediate-payment basis and the dues recovery would be made in parts.

'The power shortage continues to remain a persistent problem. The inability to expand generating capacity, strengthen transmission networks and improve distribution systems reflects the financial sickness of the SEBs,' said R.V. Shahi, a power expert and former power secretary.

He said state electricity boards have neither the resources to invest nor the credibility to attract the private sector. The large aggregated transmission and commercial losses are partly an outcome of neglect in transmission and distribution over the years.

Experts in the Indian power sector see privatization of distribution as an alternative solution to reducing aggregated transmission and commercial losses. But India`s experience with privatizing the power distribution systems in Orissa and Delhi states raised many questions.

Now, the government has decided to privatize the power distribution system in a transparent manner based on authentic baseline data and through a genuine round of competitive bidding, where it is politically feasible.

On the recommendations of the conference, the Power Ministry said it would revise the accelerated power development and reforms program to encourage the participation of the domestic and global power sectors and to achieve the target of eliminating the power shortages in next five years.


----------



## Neo

*Market capitalisation crosses $1 trillion mark *

MUMBAI: A sharply rising rupee to a near decade high against the dollar and record share prices has resulted in Indiaâs stock market joining an elite club with a capitalisation of more than one trillion dollars. India joined a list of fourteen countries with trillion dollar stock markets as companies report steady double digit earnings and manufacturing and services fuel growth that likely reached a record 9.2 per cent in the year to March. According to the most recent data from the Mumbai stock exchange, total market capitalisation of Indian stocks hit 40,811bn rupees (1.005 trillion dollars, 748.8 billion euro) on Tuesday. The benchmark 30-share Sensex index was trading at 14,477.99 on Wednesday, not far from its intraday record of 14,723.88 set on February 9.

http://www.thenews.com.pk/daily_detail.asp?id=58397


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## Neo

*Indiaâs economy grows at record 9.4 percent *

NEW DELHI: India's economy grew faster-than-expected at a record 9.4 percent pace in the year to March, beating a government forecast of 9.2 percent Thursday and raising hopes of more foreign investment. 

The record-breaking performance was driven by upward revisions to manufacturing and services output in previous quarters and a jump in overseas investment, the central statistical organisation said. 

In the previous fiscal year, India's economy grew 9.0 percent. 

Analysts had forecast that strong industrial growth and a boom in services such as outsourcing would lift growth to as high as 9.4 percent despite a series of interest rate hikes in the fiscal fourth quarter to tame inflation. 

The government said the economy grew 9.1 percent in the three months to March and that the previous three quarters of the fiscal year had been revised upwards as new data became available. 

http://www.thenews.com.pk/updates.asp?id=23458


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## Neo

Thursday, May 31, 2007 

*India scraps 1 million tonnes wheat tender*

NEW DELHI: India has decided not to buy wheat against its one million tonne import tender, as prices quoted by trading firms were high, a government official said on Wednesday. 

âWe are not going to buy because of high prices,â the official, who did not want to be named, told Reuters. Indiaâs State Trading Corp, which floated the tender, had received seven bids from international trading firms at between $265.50 and $296 per tonne â about a fifth more than what India paid last year. 

The state-run firm negotiated with international trading firms Glencore and Toepfer to bring down the lowest price offered to $263 per tonne for 300,000 tonnes of wheat, traders and one official said. The proposal has been shot down by the food ministry, the government official said. 

On Tuesday, the official said India aimed to buy 11 million tonnes wheat from domestic farmers this year against 9.2 million tonnes purchased last year. India needs 12 million tonnes wheat annually to run its public distribution system for the poor. 

The country grows only one wheat crop in a year, mainly in northern states of Punjab, Haryana, and Uttar Pradesh and central state of Madhya Pradesh. 

India is likely to produce 73.7 million tonnes wheat in 2007, against 69.48 million tonnes last year. Sowing is done in the winter months of November and December, and harvest begins in late March and early April. 

http://www.dailytimes.com.pk/default.asp?page=2007\05\31\story_31-5-2007_pg5_17


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## Bushroda

*India growth second fastest in 60 years*
By Jo Johnson in New Delhi 
Published: May 31 2007 10:23 | Last updated: May 31 2007 11:28

India enjoyed its second-fastest year of growth since independence last financial year, according to government statistics released this afternoon showing the economy expanded by 9.4 per cent in the 12 months to March 2007. 

The full year figures were revised up from the governmentâs âadvance estimateâ of 9.2 per cent, issued in February, largely on account of sizeable upward adjustments to growth rates in the first half of the year. 

Growth in the first quarter of last year was revised up by nearly an entire percentage point to 9.6 per cent, from 8.8 per cent, and then accelerated further in the second quarter, covering July-September, to 10.2 per cent, from 9.2 per cent.

Growth in the last quarter of the financial year (January-March 2007) came in lower than expected at 9.1 per cent, but nonetheless was more rapid than that seen in the previous quarter, suggesting tighter monetary policy had yet to have much impact.

India has only grown faster than this in one year since the series began in 1950/1, according to Robert Prior-Wandesforde, an economist at HSBC. In 1998/99, growth surged to 10.5 per cent before falling back in the early years of this decade.

The central bank has raised its main lending rate five times in the past year and increased banksâ cash reserve requirements three times since December, to slow down loan growth and help rein in prices.

Even though inflation is now coming down, most economists believe that the economy is continuing to grow well above its long-term sustainable rate and that further tightening of monetary policy and of banking reserve ratios lies ahead. 

âWe would be surprised if todayâs release was not met fairly promptly by a further 50bp rise in the Cash Reserve Ratio, which currently stands at 6.5 per cent,â noted Mr Wandesforde, adding that such a move could be the last for a few months.

Copyright The Financial Times Limited 2007


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## Bushroda

*GE banks on Indian economy's growth*
By Heather Timmons Published: June 1, 2007
INTERNATIONAL HERALD TRIBUNE

NEW DELHI: Pressure to slim General Electric's corporate portfolio at home has not stopped Jeffrey Immelt's aggressive plans for expanding in emerging markets.

On Thursday, Immelt, GE's chairman and chief executive, told executives here that India has "never offered us more potential than it does today."

GE plans to participate in the country's "massive focus" on energy, he said, and will create a fund for infrastructure that could reach $1 billion.

"This is the era of the developing world and of emerging markets," Immelt said.

As the U.S. economy cools, GE and other large multinational companies are shifting their focus to faster-growth parts of the world.

Immelt's latest trip to India comes as the country's economy hit a high. Figures released on Thursday showed that India's gross domestic product grew by 9.4 percent in the year ended in March.

Indian officials say they expect growth to continue above 9 percent this year.

"If we can grow at the same pace as the Indian economy, we can be a great company," Immelt said.

Last year, GE executives said that they planned to make India a major market and that revenue from India would more than quadruple, to $8 billion by 2010. Assets in India will also reach $8 billion by 2010, the company said.

Immelt said Thursday that those goals were in sight: Revenue in India in 2007 should be $3 billion, out of $175 billion at GE, and by 2008 should reach $4 billion. GE should "blow right through" the target of $8 billion in Indian assets by 2010, he said.

This year, GE will earn more revenue outside of the United States than in it. GE said in April that first-quarter profit rose 2 percent, in part because of a focus on selling goods and consumer services in Asia and the Middle East. Revenue in developing markets was up 14 percent in the quarter.

Some analysts, notably Jeffrey Sprague of Citigroup, have suggested that GE spin off units, including NBC Universal and GE Money, to streamline the company and improve its stock performance.

Immelt did not address asset sales on Thursday. Instead, he said GE would continue to focus on several "macro themes," including emerging markets.

A worldwide demand for infrastructure is "a stunning long-term trend," Immelt said, and could require $4 trillion in overall global investment over the next eight years. Other macro themes include environmental technologies and opportunities created by changing demographics, like the rapidly growing need for health care.

The visit by Immelt comes as U.S. and Indian officials are in the last stages of negotiating a deal to share civilian nuclear technology. The plan has been stalled several times, although an agreement could be struck this weekend when Nicholas Burns, a U.S. under secretary of state, comes to New Delhi for fresh talks.

Nuclear plant manufacturers, including GE and Westinghouse, are expected to be the chief beneficiaries of any deal, and GE has been lobbying both governments to agree to the plan.

Immelt said he intended "ultimately to be a participant in the nuclear industry here."

GE's presence in India dates back more than a century, and Immelt's predecessor, Jack Welch, is largely credited with promoting India as an outsourcing center. GE Money is one of India's largest credit card lenders through a partnership with the State Bank of India.


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## Bushroda

*India economy closes gap on China*
POSTED: 5:33 a.m. EDT, May 31, 2007 
CNN.com

NEW DELHI, India (Reuters) -- India's economy expanded 9.1 percent in the January-March quarter, the government said Thursday, lifted by robust growth in manfacturing and trade.

That brought growth for the full fiscal year through March to 9.4 percent, the strongest in 18 years.

The government had earlier predicted gross domestic product, or GDP, to grow 9.2 percent in the fiscal year ended March, but the estimates released Monday were higher because of a faster-than-expected expansion in the manufacturing sector, which grew 12.3 percent from a year ago.

Growth in services also accelerated to 11 percent in 2006-07 from 9.8 percent a year earlier, while agriculture remained a drag on the broader economy, growing just 2.7 percent compared with 6 percent a year ago.

The latest GDP estimates bring India close to the torrid growth pace of the Chinese economy that grew 10.7 percent in 2006.


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## SMC

^^ How's that exactly closing gap? If you're talking about growth pace, then yes, but in terms of overall economy, the gap increases actually.


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## Bushroda

Ahsan_R said:


> ^^ How's that exactly closing gap? If you're talking about growth pace, then yes, but in terms of overall economy, the gap increases actually.



Closing the gap in GDP growth rate.. While few years back there was a clear 3-3.5% difference. It has now been reduced to 1%. India's GDP growth rate is at 9.5% & China is at 10.5%

The last para sums it all



> The latest GDP estimates bring India close to the torrid growth pace of the Chinese economy that grew 10.7 percent in 2006.


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## Bushroda

More reporting on India's record Growth Story



> *India Growth Hottest in 18 Years*
> Ruth David, 06.01.07, 1:45 PM ET
> FORBES
> 
> Indiaâs economy clocked a growth rate of 9.4% for fiscal year 2007, its highest in 18 years and one powered by increased productivity in manufacturing.
> 
> Gross domestic product growth for the January-March quarter was at 9.1%, with the manufacturing sector recording a growth of 12.3% from a corresponding period last year. The services sector grew 10.6% over fiscal 2005-06. But agriculture and related fields, which account for the livelihoods of about 60% of the population, saw low numbers, clocking a growth of 2.7%.
> 
> âThe Indian economy has shifted to a higher growth trajectory,â Finance Minister P. Chidamnaram told reporters in New Delhi. âHigh growth generates its own momentum. With high growth comes high savings and high investment which, in turn, reinforce growth itselfâ¦The time has come to shed lingering doubts about the sustainability of high growth.â
> 
> Chidambaram also mentioned inflation, which was at a high of 6.7% in January but has now been reduced to 5.06% on sustained monetary tightening by the central bank. âHigh growth leads to high demand which puts pressure on prices until supplies catch up,â he said.
> 
> Figures from the governmentâs Central Statistical Organization also showed that per-capita income grew by 8.4% in the last fiscal year. Savings and investments as a proportion of the GDP grew by 1.4% each from last yearâs levels of 32.4% and 33.8% respectively.
> 
> This yearâs GDP growth numbers come on the heels of 9% growth rates last year and 7.5% the year before that. When asked whether such growth rates were sustainable in the coming years, Chidambaram said: âWe have capacity to grow at the same high rate of growth, but whether objective conditions will be able to deliver a growth rate higher than 9.4%, I canât say. The aim is to keep the growth rate at a level higher than 9%.â
> 
> The business lobby Confederation of Indian Industry called the growth unprecedented, but pointed out that GDP growth numbers for the corresponding quarter in fiscal 2005-06 were at 10%. âWe hope this (growth rates of 9.1% this quarter) is not indicative of any slowdown resulting out of actions taken to curb inflation during this period,â CII said in a statement.
> 
> âCIIâs own projection for GDP growth in the fiscal year 08 is 9.2% with services growth pegged at 11.2%, industry at 9.4% and agriculture at 3.0%,â the release said.





> *India yr to March GDP grows faster-than-expected 9.4 pct *
> ABCmoney.co.uk
> Published : Thu, 31 May 2007 09:12
> 
> NEW DELHI (XFN-ASIA) - India's economy expanded by a faster-than-expected 9.4 pct in the year ended March 2007, beating the government's forecast of 9.2 pct, the Central Statistical Organization (CSO) said.
> 
> This compares with the previous fiscal year's economic growth of 9.0 pct.
> 
> The CSO said the increase was driven by upward revisions to manufacturing and services output in previous quarters and a jump in overseas investment.
> 
> Analysts had forecast that strong industrial growth and a boom in services such as outsourcing would lift growth to as as high as 9.4 pct despite a series of interest rate hikes in the fourth quarter to tame inflation.
> 
> In the quarter to March, the economy grew 9.1 pct.
> 
> India's central bank has forecast 8.5 pct growth this year while India's finance minister has said he thinks the economy could expand 9 pct.
> 
> The Reserve Bank of India has already raised short-term lending rates twice in 2007 to 7.75 pct -- the highest level in more than four years to bring inflation down from levels well above 6 pct for wholesale prices.
> 
> Inflation has since dipped to 5.27 pct, according to the latest weekly wholesale price index.
> 
> But price rises are still above the government target of 4.0 to 4.5 pct this calendar year, prompting speculation that the central bank's tightening stance since 2004 may continue, according to analysts.
> 
> afp/net





> *India posts 20-year high GDP at 9.4 per cent in 2006-07*
> Monsters and Critics, UK
> May 31, 2007, 10:11 GMT
> 
> New Delhi - Meeting surging consumer demand, India's economy, one of the fastest growing in the world, grew by 9.4 per cent in 2006-07, recording its highest growth in the last 20 years, according to a government report issued Thursday.
> 
> India's GDP grew by 9.4 per cent in 2006-07 against 9 per cent in the previous year, said the report by the Central Statistical Organisation (CSO) of the Ministry of Statistics and Programme Implementation.
> 
> In the first half of the year the economy clocked 9.1 per cent growth as against 10 per cent in same period in the last fiscal year, but dipped in the third quarter to a lower-than-expected 8.6 per cent, hit by weak farm growth due to poor monsoon rains in 2006.
> 
> However, strong industrial growth and a boom in services such as outsourced work for companies abroad have led analysts to predict a strong rebound in the fourth quarter of 2007-08 for a full-year gain of as high as 9.4 per cent.
> 
> This growth, analysts say, will ride on the middle class in India, which earns from 4,545 dollars to 23,000 dollars a year, and has tripled to 300 million in the past 20 years, according to the National Council for Applied Economic Research.
> 
> Foreign capital investment is also pushing the economy forward, with companies planning to tap the domestic capital market to raise over 12 billion dollars, which will lift the cumulative market capitalisation at Indian bourses by over 100 billion dollars, said the CSO report.
> 
> But there has been concern that a series of recent tight monetary measures by the country's central Reserve Bank of India (RBI), which raised short-term lending rates twice in 2007 to 7.75 per cent - the highest in more than four years - would act as a brake.
> 
> The central bank's moves were aimed at slowing demand for goods such as cement, steel and basic food items that have soared even as consumers spend on cars, houses, telephones and other goods and services.
> 
> Appropriating these domestic spending and financial trends, J P Morgan has pegged GDP growth of 8 per cent for 2007-08.
> 
> The RBI's monetary maneuvers seem to have worked as inflation has slipped to 5.27 per cent, according to the latest weekly wholesale price index, compared to more than six percent last month, and India's Finance Minister P Chidambaram has pledged to cut it further.
> 
> Despite corrective monetary measures, the industrial growth has already been reported up 11.3 per cent for the year, up from 8.2 per cent a year ago, indicating that the economy remains on track despite the rate hikes.
> 
> But one of the fallouts of a tight monetary policy has been a stronger rupee, which recorded a near decade high of 40.1 rupees against the dollar in April, making Indian services and goods more expensive - affecting exports and the trade balance.





> *Indiaâs economy growing at record speed*
> AsiaNews.it
> 
> *Annual growth rate averages 9.4 per cent to March, highest since 1989. Government now has to tackle inflation. Middle class is estimated at 300 million.*
> 
> http://imageshack.us
> New Delhi (AsiaNews/Agencies) â Indiaâs economy expanded at an annual rate of 9.4 per cent to March, the biggest gain since 1989, the Central Statistical Organisation reported yesterday. Like the economy, the countryâs middle class has also grown and now is almost the size of the population of the United States.
> 
> In the first quarter of this year, the economy grew 9.1 per cent, higher than the average quarterly pace of 8.8 per cent of the past two years and, among the worldâs leading economies, second only to Chinaâs growth rate.
> 
> This has stoked demand for manufactured and farm goods and pushed inflation to a two-year high in January, which is affecting disproportionately food prices and the poorer segments of the population.
> 
> The Reserve Bank of India raised its key rate seven times in the past 18 months to its highest level in five years to tame price gains and loan growth. This helped ease inflation to an eight-month low of 5.27 per cent in the second week of last month.
> 
> For experts this should help prepare the economy for a soft landing. But it still âshould expand at about 8 per cent or more,â said Navneet Munot, a fund manager at Birla Sun Life Asset Management, a leading asset management company.
> 
> One consequence has been that car sales in the past two months have grown at a slower pace. Almost 75 per cent of cars sold in India are financed by commercial banks. And yet manufacturing gained 12.4 per cent in the last quarter of 2006.
> 
> The Indian rupee has gained 8 per cent against the US dollar since January 1, slowing down the pace of growth of exports, which rose 8.8 per cent in March, a third of what it was over the past year.
> 
> But everyone agrees that disposable middle class incomes and consumption levels are rising.
> 
> A study by the McKinsey Global Institute paints in fact a rosy picture for India. Its new report released in May predicts that India's much-touted middle class has finally taken wings and will soon embark on a consumption spree that could reshape global consumer markets.
> 
> Indiaâs income level should triple over the next 20 years, lifting 291 million Indians out of poverty to create a 583-million-strong middle-class population by 2025.
> 
> Adjusted for inflation, the average per capita annual income of a typical middle-class Indian family was about $800 in the early 1990s. A family that could afford a balanced diet each day, send the children to school and, say, buy a small refrigerator was considered middle-class in India. Now that is likely to change.
> 
> The largest Indian spending category at present remains food, beverages and tobacco (FB&T), followed by transportation and housing.





> *India becomes trillion dollar economy*
> FreshPlaza, Netherlands
> 
> Propelled by growth in services and manufacturing sectors, coupled with an appreciating rupee, India's economy has swelled to a trillion dollar - making it only the 12th nation to reach this milestone.
> 
> According to government data released today, the country's economy at market prices stood at Rs 41,25,724 crore at the end of fiscal 2006-07 -- which equals nearly 1,010 billion dollars at the current foreign exchange rate of the rupee.
> The rupee was trading at 40.72 to a dollar today, up from yesterday's close of 40.86/87.
> 
> However, the rupee's level at the end of last fiscal was near 43 against the greenback, which puts the GDP in dollar terms at 957 billion dollars. While at factor cost the economy expanded by 9.4 per cent to Rs 37,43,472 crore, at market prices the growth translated to over 15 per cent.
> 
> The economy's trillion dollar milestone comes just three days after the Indian stocks' combined value crossed this level. The market capitalisation as of March end was 805.2 billion dollars.
> 
> India becoming a trillion dollar economy also augurs well for the country's stock market, as a Credit Suisse report said that stock markets in eight out of ten countries had risen in the one year after their economies first crossed this mark.
> 
> Companies have lined up plans to tap the capital market to raise over Rs 50,000 crore (around 12 billion dollar), which would lift the cumulative market capitalisation at Indian bourses by over 100 billion dollars.
> 
> Only the US, Japan, Germany, China, UK, France, Italy, Spain, Canada, Brazil and Russia have breached the trillion- dollar GDP level in the past, according to Credit Suisse.






> *India's economy explodes*
> FIN24, SouthAfrica
> 31/05/2007 20:57
> 
> New Delhi - India's economy expanded by a faster-than- expected 9.4% in the year ended March, official data showed on Thursday, beating a government forecast of 9.2%.
> 
> The country's central statistical organisation said the gains were led by services. In the previous fiscal year, India's economy grew 9.0%.
> 
> Analysts had forecast that strong industrial growth and a boom in services such as outsourcing would lift growth to as as high as 9.4% despite a series of interest rate hikes in the fourth quarter to tame inflation.





> *India economy can grow 10% - ADB*
> FIN24, SouthAfrica
> 10/03/2006 19:38
> 
> New Delhi - India's economy could achieve growth of 10% if the government keeps up reforms and improves the nation's rickety infrastructure, the Asian Development Bank (ADB) said on Friday.
> Asia's third-largest economy is growing now at around 8%.
> 
> "8% growth is sustainable in the coming five years or more," ADB president Haruhiko Kuroda said, according to the Press Trust of India.
> 
> "If infrastructure is improved and economic reforms are continued, the rate of growth can be accelerated to 9-10%," he told reporters in the Indian capital.
> 
> The bank president was in India to hold talks with officials and discuss preparations for the ADB's annual meeting in May to be held in the Indian southern high-tech city of Hyderabad.
> 
> The Philippines-based multilateral institution said it planned to step up lending to India because of its high growth prospects and increasing funding needs.
> 
> Kuroda said the bank's assistance to India would total around $2.25bn in 2006, which would rise to $2.45bn next year and increase to $2.65bn in 2008.
> 
> In September, the ADB had announced it was ready to raise its lending to India to more than $6.5bn over the next three years.
> 
> The Indian government has said it is aiming for 10% growth in the next few years.
> 
> But experts say that the country's potholed roads, congested ports and frequent power outages are major hurdles to achieving double-digit growth.
> 
> Double-digit growth is seen as vital to boost the fortunes of the around 300 million people in India who live below the poverty line.





> *India grows faster-than-expected 9.4%*
> CHANNELNEWSASIA, Singapore
> Posted: 31 May 2007 1451 hrs
> 
> NEW DELHI: India's economy expanded by a faster-than-expected 9.4 percent in the year ended March, official data showed on Thursday, beating a government forecast of 9.2 percent.
> 
> The country's central statistical organisation said the gains were led by services. In the previous fiscal year, India's economy grew 9.0 percent.
> 
> Analysts had forecast that strong industrial growth and a boom in services such as outsourcing would lift growth to as high as 9.4 percent despite a series of interest rate hikes in the fourth quarter to tame inflation.
> 
> The government said that the economy rose 9.1 percent in the fourth quarter and that the previous three quarters had been revised upwards as new data became available.
> 
> The benchmark 30-share Sensex index was up 131.61 points, or 0.91 percent to 14,452.91 in noon trade after the data was announced, not far from its intraday record of 14,723.88 set on February 9.
> 
> The rupee, which has gained almost nine percent against the dollar this year was quoted at 40.73 to the dollar, slightly weaker than Wednesday's close.
> 
> The record growth in India is well behind Asian economic rival China which saw its economy expand by 10.7 percent in 2006.
> 
> But central banks' in both billion-plus population nations have warned of overheating in the economies and taken steps to tame demand.
> 
> In India, analysts have predicted a dip in growth this year linked to tight monetary policy and government directives to banks to be cautious on loans, especially for housing and construction to dim demand for commodities such as cement and steel.
> 
> "JP Morgan forecasts GDP (gross domestic product) growth of eight percent for 2007-08," said Rajeev Malik, a Singapore-based Asia economist with JP Morgan Chase Bank.
> 
> India's central bank has forecast 8.5 percent growth this year while India's finance minister has said he thinks the economy could expand nine percent.
> 
> The Reserve Bank of India has already raised short-term lending rates twice in 2007 to 7.75 percent â the highest in more than four years to bring inflation down from levels well above six percent for wholesale prices.
> 
> Inflation has dipped to 5.27 percent, according to the latest weekly wholesale price index.
> 
> But price rises are still above government aims of 4.0 to 4.5 percent this calendar year, prompting speculation that the central bank's tightening stance since 2004 may continue, according to analysts.
> 
> - AFP/so





> *Economy growing at fastest rate in 18 years*
> Toronto Star, Canada
> Jun 01, 2007 04:30 AM
> 
> India's economic growth accelerated in the latest quarter as manufacturers such as Hero Honda Motors Ltd. lifted production to meet surging consumer demand.
> 
> South Asia's largest economy expanded 9.1 per cent in the three months to March 31 from a year earlier, up from a revised 8.7 per cent in the previous quarter, the Central Statistical Organization said in New Delhi. Economists expected a 9.5 per cent gain.
> 
> Companies are increasing output in India at the quickest pace in a decade to meet soaring demand from a growing middle class. However, economists think growth may start to slow after the central bank raised interest rates to a five-year high to curb inflation.


----------



## Bushroda

*Robust Indian economy brightens prospect for transportation*
2007-05-31 15:52:18 Source : Moneycontrol.com

Indiaâs increasing role in the global economy and supply chains is opening vast avenues of growth for the Indian transportation market in all modes. Despite smaller volumes of transport in India, on comparison with developed nations, prospects for future growth are high.

New analysis from Frost & Sullivan (www.transportation.frost.com), Strategic Analysis of Indian Transportation Market, reveals that the total transportation market in India reached $344.7 million in 2006 and it is estimated to reach $699.1 million in 2013.

âStrong economic growth in India backed by rising imports and exports is an important driving factor for the growth of cargo transportation,â says Frost & Sullivan Research Analyst Aarthi Nandakumar. âThe increase in containerized cargo is also expected to drive the demand for cargo transportation services in India.â

Indiaâs current share of 8.0 percent in containerized sea cargo is expected to increase to 20.0 percent over the next five years and the Government aims at nearly 100 million tones of containerized cargo by 2011-2012.

This growth is largely attributed to the proliferation of manufacturing centers in India, which is fast emerging as a manufacturing hub, next only to China. The production of automobiles and their components are also likely to drive the container cargo market.

Despite the rising containerization trend driving the transportation market, the poor infrastructure in India is a cause of concern for all modes of transportation as it directly affects cost efficiency and productivity, thus hindering the growth of the overall transportation market.

While air transportation suffers from poorly developed airports and inadequate ground handling equipment and access to cargo terminals, the ports lack the ability to accommodate 1,000 twenty-foot equivalent unit (TEU) container vessels. Meanwhile only 50.0 percent of the roads are paved, making access to rural areas difficult, resulting in longer delivery times and costs and the railways being controlled by a single government body, has an outdated infrastructure.

The joint efforts of the Government and service providers can tackle the issues of infrastructure. Governmental initiatives to promote private participation and attract foreign investment can go a long way in overcoming this challenge. Service providers can employ the advancements in information technology to provide better service and achieve customer satisfaction.

âBy channeling more funds into infrastructural projects such as the golden quadrilateral, dedicated rail freight corridors, and privatization of airports, the Indian transportation market can take off on an exceptional growth phase,â opines Nandakumar. 

As globalization and the emergence of global supply chains define a greater role for India in the world economy, there is distinctly more movement of goods. This calls for an exemplary transport system to achieve high levels of efficiency and service. With improvements in infrastructure that would promote future trade, India can consolidate its position in global trade.


----------



## Bushroda

*Chidambaram confident of sustaining over 9% growth rate*
2007-06-01 09:08:36 Source : Moneycontrol.com 
New Delhi May 31 

The Union Finance Minister, Mr P. Chidambaram, on Thursday said that it was time to shed lingering doubts about the sustainability and scepticism about the high growth in the Indian economy and its shift to a higher growth trajectory. 

Addressing a press conference here after the official GDP figures were released, Mr Chidambaram, said, "I would argue the high growth we have witnessed in the three years of the UPA Government needs to be sustained with utmost care â because that is the way forward to eradicate poverty, generate quality jobs and improve human development indicators." 

He added that economy was capable of sustaining over 9 per cent growth during 2007-08 too. 

Citing examples on how East Asia and China had demonstrated that high growth was possible over long periods, Mr Chidambaram said, "China was growing at double digit rate for the last four years. It is in the larger interest of India that we maintain a high growth rate for 10-15 years. Beyond that, another generation will address the issue," he said. 

The Finance Minister brushed aside apprehensions of a possible slowdown. He, however, cautioned that the high growth could put pressure on prices, especially essential commodities, in case supply fails to match demand. 

'I have always maintained that however unpalatable it may be, high growth leads to high demand. And high demand does put pressure on prices. Unless supply catches up with demand, there will be some pressure on prices,' he said. 

*Concern over rupee* 

Mr Chidambaram admitted that rupee appreciating to a nine-year high was affecting certain sectors such as textile exports, though the market largely determined it. 'I have taken note of the concern about one or two sectors being affected by strengthening of the rupee. Those concerns will be addressed. The RBI is monitoring the movement of rupee. I suppose it is taking or will take whatever steps have to be taken,' he said. 

*Softening rates *

Speaking about the possibility of softening of interest rates, Mr Chidambaram said, 'Softening of interest rates, especially in the housing sector, would depend on the inflation. The wholesale price index-based inflation has been moving downward in the last three weeks but then three weeks is too short a period to reach a definite conclusion. So, we will watch the situation carefully.' 

Admitting that there was excessive flow of around $25 billion of foreign exchange through the external commercial borrowing (ECB) route, he said it could pose a challenge as far as managing money supply was concerned. 'The figure shows the ability of the Indian industry to attract capital at competitive rate which is good. But unfortunately, the other side is that it increases money supply and then puts pressure on managing the money supply,' he added. 

'I think RBI and the government have been fairly successful in balancing the need for capital and to maintain price stability,' he said. 

The Finance Minister, however, declined to give any specific answer when asked whether high growth could lead to overheating of economy as well.


----------



## Bushroda

*Overheating or just getting warmed up?*
UMESH PANDEY
BANGKOK POST, Thailand

Despite recent warnings by ratings agencies that India's robust economy could be overheating, the Indian government remains optimistic and expects its surging growth to continue. 

"People can say whatever [they want], but from our side we do not see this momentum slowing for the years ahead," Kamal Nath, Minister of Commerce and Industry for Republic of India, said in an interview with the Bangkok Post. 

"The 9% plus growth that we see in India will continue for the next five to 10 years as India's fundamentals are very strong and they can sustain that kind of growth," he said. Even in the worst-case scenario of a global downturn, he added, India would continue to show growth as most of the country's economy is domestic-oriented. 

India's economy grew 9.2% last year and passed the $1-trillion mark earlier this year, prompting Moody's Investors Service to issue a warning that the country's economy was showing signs of overheating. The ratings agency said it saw signs that output was unable to keep pace with demand. 

Kristin Lindow, a vice-president with Moody's Investors Service, wrote that the pursuit of macroeconomic stability by India's monetary authorities had reached a critical phase. Managing this effectively is important not only from a business, policy and political perspective, but also for ensuring the long-term sustainability of public finances. 

Mr Nath begs to differ, claiming the country's fundamentals are sound. Industrial output grew 12% last year, and policies that promote sound investments have all been put in place. 

All this, he said, has helped attract investments into the country. Foreign direct investment last year stood at $19 billion, an increase of 700% over the past three years. The country's foreign exchange reserves stood at $200 billion, a much improved position from 1991, when a balance of payments crisis triggered a host of economic reforms. 

Today the country boasts the highest concentration of billionaires in Asia. Forbes magazine recently said India was home to 23 billionaires with a combined net worth of more than $99 billion, surpassing Japan's 27 worth $67 billion. 

India accounts for nearly a sixth of the world's population with just over one billion people. The country adds 25 million members to its middle class each year, nearly half of Thailand's total population. 

Mr Nath said those figures give him confidence that India's economic growth is not merely a blip on the radar screen. 

"We see the momentum continue and there are no signs of any bubble for the time being," he added. 

With such growth, Mr Nath said his country was already on the path to remarkable achievements. From the 700% growth in FDI over a three-year span, Mr Nath said India had doubled its share of world trade to account for 1% of global trade during the same period. 

"Our overall global engagement with the world is at around $450 billion, or just about 1% of global trade," he said. "We have doubled this over the past three years. Our target is to reach $1.5 trillion over the next few years." 

"The target is for 2% of the global trade over the next five to six years, but the first target is to achieve 1.5% in the next three years." 

India, which touts itself as the world's largest democratic country, at times has been blamed for lagging behind other emerging giants such as China due to its massive bureaucracy. But Mr Nath said democracy would pay off for investors in the long run. 

"A lot of people talk about India being a democracy and that's why it has not moved forward," he said. "But that is what makes India a far more credible country. It is the credibility of India that's very important: the judiciary, the strength of the various independent institutions and others." 

He added that although bureaucracy might mean that the entire process is slightly slow, it ensures that everything is done in a transparent and orderly manner. 

"Today our stock market's regulatory framework is as good as any in the world, and these are things that are necessary for sustainable growth in any country. All this is very positive for the long run." 

Mr Nath said people who feared democracy meant new governments and policy U-turns should note that in the past 16 years India had seen six governments and five prime ministers, but "only one direction of change and that is to move upwards and towards liberalisation". 

"Of course, this [economic reform policy] will continue this way as there is a political consensus that open-market policies are beneficial for the country," he said. 

Since India has such a large economy, it needs to ensure that the benefits of economic reform reach all segments of society, he added. 

"The challenge is to have an inclusive growth, and the government is now focusing on this. We want all to benefit, the poor and the rich. This is very important as you cannot have sectoral growth," he said.


----------



## Bushroda

*India manufacturing continues robust growth; PMI at 53.4* 
Author: NTC Economics 

The seasonally adjusted ABN AMRO India Purchasing Managersâ Index (PMI) â a comprehensive and early indicator of trends in the Indian manufacturing sector â eased slightly from 53.8 to 53.4 in May, but still signaled an improvement of manufacturing operating conditions.

Output levels in the Indian manufacturing economy continued to rise robustly in May, although the rate of output growth eased since the previous month. Firms indicated that they had expanded production at their plants in response to rising sales.

Volumes of total incoming new business increased at a strong rate, with the domestic market remaining the principal source of sales. Higher volumes of new orders contributed to a second consecutive monthly increase in levels of unfinished work in the Indian manufacturing economy. Panelists added to their workforces in the latest survey period, albeit at a weak rate.

Firms in the Indian manufacturing sector stepped up their input buying in May, in response to higher production requirements. Pre-production inventories also rose, partly as a result of higher quantities of purchases. Stocks of finished goods, however, declined for a third successive month. 

Despite increased purchasing activity, panel members reported no change in average lead-times in the latest survey period.

Indian manufacturers retained only limited pricing power in May, with average charges rising only marginally. There were some reports of panel members increasing their output prices in response to favorable market conditions.

Average costs rose at a solid rate in May, although input price inflation eased to its slowest in the 26-month survey history.


----------



## Bushroda

*LEADER ARTICLE: Bharat Unplugged*
1 Jun, 2007 l 0041 hrs ISTlARUN FIRODIA

India's economy has grown rapidly over the past few years, thanks to reforms, globalisation, demographic dividend and consumerism. 

The economy is expected to keep up this momentum. However, dark clouds of inflation still loom over the horizon. Ruling political parties are worried that price rise may turn the voters against them. 

Their knee-jerk response has been to increase interest rates, reduce demand and slow down the economy. This is their approach to power shortages, traffic congestion and manpower shortfalls. 

A slowdown will have a serious effect on Bharat's economy, which is already in deep freeze. Farmers, neck deep in debt, may turn into violent Naxalites instead of committing harmless suicides. 

Hence, we have no choice but to keep the growth story going, while ensuring that inflation is kept in check. The common man spends 50 per cent of his income on food. 

Therefore, food prices would have to top our long-term approach to combating inflation. These prices have risen as a result of rising population and falling productivity. 

Despite rising food prices, farmers starve while middlemen thrive. This is hardly surprising in a situation where the Agriculture Produce Marketing Committee (APMC) Act prohibits farmers from selling their produce directly to consumers. 

Or, where the Cotton Monopoly Procurement Scheme of the Maharashtra government forces farmers to sell their produce to the government at unremunerative prices. 

Many states prohibit 'export' of foodgrains to neighbouring states. Such laws must be scrapped. We should encourage direct marketing by farmers to consumers. 

This will also act as a check on organised retail and deter the sector from overcharging consumers. It is ironic that most states charge value-added tax on food articles. 

That too must be stopped. The government spends an annual sum of Rs 30,000 crore to run a corruption-ridden, ineffective public distribution system, when it should be switching over to food stamps, to be issued to the poor under food-for-work programmes. 

Clothes stamps could also be issued against work, enabling the poor to buy a dhoti or sari at a discount. Such a scheme should cost about Rs 4,500 crore, which is a mere 0.1 per cent of India's GDP. These steps will insulate the common man from inflation. 

The long-term solution lies in increasing supply. To this end, improved seeds, comprehensive crop insurance and support prices for all crops are important. 

Watershed development should become a priority. Food banks and roads have to be constructed. India should experiment with contract farming, after putting in safeguards. The cost of housing for the common man needs to be brought under control. 

This can be achieved by increasing the supply of affordable housing, by creating new townships and offering fiscal incentives to specialised housing finance companies which offer finance for small dwellings. 

The Reserve Bank has jacked up interest rates with a view to containing 'demand-pull' inflation. However, high interest rates may fuel 'cost-push' inflation. 

The government, which is the biggest borrower, should reduce its borrowing by curtailing avoidable government expenditure. That would moderate interest rates. 

There is scope for banks to become more efficient. Their spread â the difference between their lending and borrowing rates â is very high, at 5-6 per cent as against 2-3 per cent in the West. 

To address the crisis in infrastructure, we should tap the parallel economy. Infrastructure companies should be allowed to float bonds, with no questions asked to subscribers on source of funds invested. 

The move will create infrastructure and convert the parallel economy into regular economy, in the process reducing the velocity of circulation of money and inflation. 

India needs to build power projects quickly to deal with shortages. However, the potential of hydel plants or wind energy farms should be fully exploited, before going in for plants based on fossil fuels. 

By doing so, India can insulate itself from inflation induced by oil shocks. Promotion of biofuels and solar energy would work wonders for rural India. 

These sectors should be exempt from all taxes and duties. Over the years, the US dollar has been depreciating against major currencies. 

Apart from the loss involved in the transaction, this policy contributes to inflation through higher money supply. In a welcome move, RBI has discontinued this practice. 

A stronger rupee will make imported goods available at a lower cost and dampen inflation. As for those who argue that a stronger rupee would reduce export competitiveness, so would inflation. 

Better a strong rupee and weak inflation than vice versa. Job losses due to reduced exports can be taken care of. Crores of people can be absorbed in food processing and biofuel sectors. 

These should be exempt from taxes, duties and regulations. Once alternative sources of livelihood become available, farmers' resistance to orga-nised retail, or that of vegetable vendors to supermarkets, will vanish. 

The present growth model is defective; 'malls in place of mills' does not imply progress. Creation of mega cities would merely devour resources and create mega slums. 

India gets 95 per cent of total investment and Bharat a mere 5 per cent, although 65 per cent of the population lives in the latter. This cannot go on. We need a new growth model based on sustainable development. 

If Bharat progresses, so would India, which would get an ever-increasing market. Bharat's progress will consume less resources and prevent massive migration to cities. Work should migrate to rural areas.


----------



## Bushroda

*India trade policy review lauds growth but calls for further reforms *
Genetic News(BioValley Portal)

*India's robust economic growth since 2001 is largely attributable to unilateral trade and structural reforms, especially in services, according to a new WTO Secretariat report on the country's trade policies.* 

The economic expansion has been associated with reduced poverty and infant mortality. However, for this performance to be sustained, the report said that deeper reforms will be necessary, particularly to address infrastructure bottlenecks in transport and power as well as to improve productivity in agriculture.

During discussions of the report at the WTO Trade Policy Review for India on 23 and 25 May, Members noted India's impressive economic growth between 2001 and 2007, averaging over 7 percent. Chair Ambassador Vesa Himanen (Finland) said that the meeting gave them an improved understanding of India's trade policies, as well as the challenges it faces. Members also commended India's active role in the multilateral trading system and encouraged it to continue to show leadership in bringing the Doha Round to a successful conclusion.

According to the report, continued structural reforms combined with additional investment in physical and human capital would generate productive employment for the millions of new entrants to India's labour market. Such spending would have to be backed by sound public finances and a monetary policy that keeps inflationary pressures under control, it adds. India's fiscal deficit, though declining, remained significant and expenditure on infrastructure and human capital was constrained by subsidy spending and a relatively low level of taxation relative to GDP. Loss-making state-owned enterprises remain a considerable budgetary burden, and the report said that their privatisation would have to continue. Labour market rigidities were described as another constraint on further growth.

At the meeting, Indian Commerce Secretary G. K. Pillai emphasised that the openness of India's economy was demonstrated not just by its lower tariffs, but also by the fact that import growth and volumes exceeded those for exports during the last four years. He pointed to developed countries' continuing barriers to imports from poor countries, and called upon the industrialised world to demonstrate the political will necessary to allow the Doha Round to partially right the trade imbalance between the developing and the developed world.

*Services: engine of Indian growth*

The report noted that services were the main engine of economic growth with an annual average growth rate of 9.8 percent. Competitive sectors such as telecommunications demonstrated clear benefits such as a reduction in consumer prices.

Several transport-related bottlenecks to trade and growth persisted, the Secretariat found. Although road infrastructure had improved, and the airline sector had seen increased choice and lower prices through competition, inefficient maritime transport and port services continued to constitute a major impediment to trade.

Energy supply constraints also acted as a brake on economic activity, with little progress in tackling financial losses of state electricity boards as well as losses in transmission and distribution.

*Tariffs decreasing but complex*

Tariffs remain India's main trade instrument, and account for around 16 percent of the central government's revenues. Recent years have seen a substantial reduction in overall applied tariffs, with the average falling from 32.3 percent in 2001-02 to 15.8 percent in 2006-07 (17.1 percent if all tariffs are expressed in ad valorem terms). The 12.1 percent average applied tariff for industrial goods (14.1 percent including ad valorem equivalents) was significantly lower than the average applied farm tariff rate of 40.8 percent.

With some exceptions, the applied tariffs are significantly higher than India's bound ceiling rates at the WTO, which fell to an average of 48.6 percent in 2006-07. The bound rate for agricultural products averages 117.2 percent, with the highest rates on commodities including beverages and spirits, oil seeds, fats and oils and their products, grains, coffee, tea, cocoa, and sugar. Tariff rate quotas exist for products including milk powder, maize, and some edible oils. This compares to a 34.7 percent average bound tariff for non-agricultural products.

In spite of the downward trend in applied duties, the report describes India's tariff structure as 'complex', with unpredictability resulting from schemes to offest import duties on inputs for export products as well as tariff changes announced throughout the year. It also pointed to relatively high tariffs on textiles and automobiles.

At the review meeting, India stated that farm tariffs were fixed with farmers' livelihoods in mind, and that applied rates would decrease as reforms progress.

*Some RTAs, tariff preferences*

The report noted that India had signed a number of free trade agreements (FTAs), mainly with other developing countries. Since the previous review in 2002, New Delhi had signed an FTA with Singapore, an 'early harvest' tariff-cutting accord with Thailand and an agreement with Afghanistan granting tariff preferences. India and the EU are expected to initiate FTA negotiations soon.

India also offered tariff preferences under regional trade agreements, most significantly to Sri Lanka and least-developed country (LDC) members of the South Asian Free Trade Agreement (SAFTA). However, these tariff concessions were lower in sensitive sectors such as agriculture, and in textiles and clothing, although Sri Lanka benefited from greater market access.

During discussions of the report, some Members encouraged India to adopt an ambitious preferential trade regime, offering LDCs better access to its market. During the meeting India stated that it plans to phase in a duty- and quota- free market access scheme for LDCs in 2007.

*Anti-dumping: India still a major user*

The report states that India continued to be a major user of anti-dumping (AD) measures despite a fall in the number of investigations as well as additional duties actually imposed. The majority of AD initiations involved chemicals, plastics and rubber products, base metals and textiles and clothing and were aimed at China, the EU, Taiwan and Korea.

*Many trade measures environmentally motivated*

The report pointed to a range of environmental standards and regulations that guide trade and investment measures. These include pre-shipment inspection certificates stating that textiles do not contain prohibited hazardous dyes, various sector-specific standards for pollution, and eco-labels. The Indian government also places comprehensive labeling requirements on all genetically-modified foods, including proof of origin and clearance for sale in the exporting country. India applies mandatory licensing on environmental grounds for industries such as hazardous chemicals.

A new environmental impact assessment process started in 2006 seeks to make it faster and more transparent.

During the review, sources say that Members commended India for taking steps to streamline sanitary procedures and align its national standards with international norms, although they expressed concerns about trade barriers arising from sanitary and phytosanitary measures.

*Effectiveness of SEZs questioned*

A number of duty-remission and other schemes exist to facilitate exports in India, including special economic zones (SEZs) offering tax holidays, basic infrastructure, simplified customs and other administrative procedures, and relaxed labour and environmental requirements.

These SEZs cost New Delhi 21 billion rupees in foregone tax revenue during 2006-07, leading the report to question whether they were effective at generating investment and employment, since a large share of approved companies seemed to be in the information technology sector. SEZs have no minimum export requirements, although they are required to be net earners of foreign exchange. The report notes an observation by the Reserve Bank of India that the revenue losses may be justified only if the SEZs ensure forward and backward linkages with the domestic economy.

Despite eased rules on foreign investment, the report said that FDI, at 1 percent of GDP, was far below its potential, indicating that policy and infrastructural constraints needed to be addressed.

India said the critic of SEZs was 'premature', since employment in them was projected to rise from 31,000 to 100,000 by the end of the year and 4 million by 2010, adding jobs in sectors such as textiles, gems and leather. It also noted that if reinvested earnings are included in calculations, inward FDI was USD 19 billion in 2006-07, or 2.3 percent of GDP, compared to barely 0.5 percent three years ago.

*Most central government subsidies for food*

The Secretariat notes that although India had undertaken some important tax reforms, less progress had been made to the various types of direct and indirect assistance to different sectors.

Direct subsidies alone accounting for 4.2 percent of India's GDP. Subsidies to areas such as education, health care, and research and development constitute about 42 percent of the total. Several central government subsidies are for food, while other key programmes support the purchase of petroleum and fertilisers. Additional expenditures went towards maintaining price controls for 25 major crops, fertilizers and 74 bulk drugs.

The report noted that food security was a major concern, and served to justify government intervention in agriculture including through high import tariffs. Agriculture continued to employ 60 percent of the population even though its contribution to GDP had declined from 23 percent in 2001 to 18 percent in 2005-06, implying labour productivity about one-sixth that in the rest of the economy.

The India Trade Policy Review (WT/TPR/S/182) is available at http://www.wto.org/.

Â© 2001 ICTSD


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## Bushroda

*Indians learn to rock to the beat of the economic boom*

*A growing economy has put high-priced live entertainment within the reach of the countryâs middle class*

Bangalore: A generation of Indians now earning more than their parents ever did are ready to rock to the likes of Aerosmith, underlining the countryâs increasing emergence as a magnet for top names.

Indiaâs economic growth has ended a period of austerity when entertainment not long ago meant a trip to the cinema for most.

Aerosmith, the latest 1970s band to arrive here, performs in the high-tech hub of Bangalore on Saturday as part of a world tour. More than 25,000 fans are expected to pack the Palace Grounds to hear them belt out their classic hits.

Recent months have seen the Rolling Stones, Iron Maiden, Scorpions and Shakira all perform to sell-out crowds. Tickets priced up to Rs1,800, or 10 times the price of a multiplex movie show, are not putting people off, said Venkat Vardhan, head of DNA Networks, organizers of the Aerosmith concert.

âWe have sold 8,000 tickets to fans who will be flying to Bangalore from other parts of India,â he said. 

âNot a single hotel room in the city will be going empty at the weekend. Fans know a live experience canât be replicated. Indians have become very aspirational,â Vardhan added.

A booming economy, which grew at a record pace of 9.4% in the year ended 31 March, and rising salaries have put high-priced live entertainment within reach of Indiaâs 300- million-strong middle class. For international artists, India is no longer a backwater they would rather avoid and they earn as much money from performing here as anywhere else, said Vardhan.

Indiaâs media and entertainment industry revenues are forecast to more than double to $22.7 billion (Rs93,070 crore) a year by 2011 as rising incomes drive demand for recreation. 

Consumer spending in the 1.1 billion population is set to quadruple by 2025 to more than $1.5 trillionâovertaking Germanyâas people earn more and save less, the McKinsey Global Institute said in a May report.

That prosperity is reflected in sell-out crowds at live concerts. Vivek Mahan, 35, a former Internet company executive, will fly from Dhanbad, Jharkhand, to watch Aerosmith. 

âIt will be the memory of a lifetime,â said Mahan, who now works in the construction business. âSuch bands connect people who are in their 30s and 40s to their youth years. The expense wonât matter to them,â he added.

The Aerosmith concert and others also underline the emergence of Bangalore, already at the economic forefront, as an entertainment and music hub, too. 

Vardhan of DNA Networks said the increasing popularity of expensive live entertainment is a âlifestyle extensionâ in Bangalore, where conspicuous consumption is becoming the norm.

Middle-class Indians are splurging on everything from designer clothes to luxury cars and overseas vacations, finally reaping the benefits of an economy that began liberalizing in the 1990s after decades of insularity.


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## Bushroda

*India's April Exports Rise 23 Percent*
FORBES 06.01.07, 10:34 AM ET

India's merchandise exports rose 23.1 percent in April from a year ago, despite a sharp appreciation in the Indian currency, the commerce ministry said Friday.

Exports totaled US$10.6 billion (euro7.9 billion) in April compared with US$8.6 billion (euro6.4 billion) in the same month a year earlier, according to provisional data released by the ministry.

The provisional numbers often undergo significant revisions, however.

The numbers were surprising as analysts had expected exports growth to slow because of the rising rupee, which dents price competitiveness of Indian products in the world market.

The rupee has appreciated more than 10 percent against the U.S. dollar over the past two months and touched a nine-year high of 40.51 per dollar earlier this week.

The rupee's appreciation, which make imports expensive, also failed to discourage Indians from buying more foreign goods.

Imports grew 41 percent to US$17.6 billion (euro13.1 billion) in April despite a softening of global oil prices and a moderate 11.4 percent growth in oil imports.

As a result, the country's trade gap widened sharply to US$7.1 billion (euro5.3 billion) in April, up 79 percent from US$3.9 billion in the same month a year ago.

The figures do not include export of services, including outsourcing jobs done by India's information technology companies.

India's fiscal year runs April to March.

Exports grew 25 percent to US$125 billion last fiscal year. For the current year ending March 2008, the government has set a target of US$160 billion, which would require exports to grow 28 percent from a year ago.


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## Bushroda

*Fears for 1500 jobs as finance work goes to India*
WILLIAM TINNING May 31 2007 
The Herald

The long-term future of more than 1500 financial sector jobs in Scotland was at risk last night after a major employer announced plans to transfer staff to another company as part of a deal which will see work outsourced to India.

Politicians and a union leader expressed disquiet after Resolution, which last year acquired several insurers with the Abbey group, announced that up to 500 jobs will be lost under a deal which involves transferring 2000 workers to the Capita group.

Capita has come in for criticism in the past for its roles in various government contracts, including the Student Loans Company, the Criminal Records Bureau checking service, and the London Congestion Charging Scheme, which were all beset by technical issues.

It is the market leader in life and pensions outsourcing, with a growing number of its staff in India.

advertisementResolution, one of the biggest employers in Glasgow's growing financial sector, yesterday said 1550 of its 1800 staff at the former Britoil offices in St Vincent Street, along with 450 in Birmingham, would transfer to Capita under Tupe regulations on August 1. The remaining 250 posts are specialist roles which are not affected.

Resolution Asset Management, which employs 350 in the city's Bothwell Street, is not involved.

Capita already has several operations in Glasgow including the BBC information call centre, the Capita Hartshead occupational pension processing centre, and a property design service, which employ a total of about 600.

Resolution, which bought Scottish Mutual Assurance, Scottish Provident and Abbey National Life from Abbey last year, said a number of jobs would be moved to India over the next three years under the deal with Capita.

A statement said staff turnover and redeployment would mean that potential redundancies will be fewer than 500. It said it would not be appropriate to switch customer facing roles, voice contact or customer data but a number of other customer service and IT roles will be moved in the next three years. Over the same period, Capita intends to concentrate Resolution's operations in Glasgow.

Resolution's group chief executive Mike Biggs said: "We are working very closely with Capita to ensure that any redundancy impact on our staff is minimised."

It was unclear last night how many of the 1550 jobs at Resolution's St Vincent Street headquarters would be under threat.

Daryl Williams, of the trade union Unite, said he was "deeply disappointed" by Resolution's decision to outsource a significant number of jobs to India.

He added: "We welcome that serious attempts will be made to redeploy staff and we see no need for compulsory redundancies. The union has recently signed a recognition agreement with Capita which includes an agreement on offshoring which should help the process of avoiding compulsory redundancies."

Pauline McNeill, Labour MSP for Glasgow Kelvin, which covers Glasgow city centre, said:"It is not by itself going to dent the Glasgow economy but I think there is a real need for Scottish Enterprise to be vigilant about job losses."

Sandra White, SNP list MSP for Glasgow, said: "I have great concerns about jobs being transferred to Capita because it does not have the best of reputations."

Bill Aitken, Tory list MSP for Glasgow, said: "This is bad news. I have today written to the managing director of Capita asking that everything be done to minimise job losses."

Glasgow Chamber of Commerce chief executive Dr Lesley Sawers said Glasgow had become "a world player" in the financial services sector in recent years. She added: "The evidence is that this success will continue. We wait with interest to see what the outcome of Resolution's move will be."


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## Neo

*Mallyaâs airline stake purchase to spur consolidation* 

BANGALORE: Billionaire Vijay Mallyaâs purchase of a stake in Indiaâs largest discount airline is set to drive the consolidation of a crowded aviation industry beset by soaring costs and competition.

The flamboyant 51-year-old baron bought 26 per cent of Air Deccan Thursday for 5.5 billion rupees (135 million dollars) in a deal that will lead to a strategic alliance between his Kingfisher Airlines and the budget carrier.

The agreement, which enables both airlines to trim costs and share resources, triggered an open offer by Mallyaâs Bangalore-based UB Group to Air Deccan shareholders for a further 20 per cent stake in the airline.

That leaves open the possibility of an outright acquisition of the four-year-old airline by the two-billion-dollar UB Group. 

âThere will be more strategic alliances and cooperation agreements to reduce costs and share resources,â said Kapil Kaul, who heads the India office of the Centre for Asia Pacific Aviation, in a telephone interview on Friday.

âThat will help rationalise capacity and make airlines more viable,â Kaul added.

On Friday, shares of of Deccan Aviation fell 1.05 rupees or 0.72 per cent to 145.15 

The benchmark 30-share Sensex index closed up 26.29 points or 0.18 per cent to 14,570.75.

Itâs the latest move in the consolidation of an industry whose balance sheets are awash in red ink after a combined loss estimated by the Centre for Asia Pacific at 500 million dollars for the year ended March.

Indiaâs largest carrier, Jet Airways, acquired rival Air Sahara in April for $340 million, and state-run Air India and Indian Airlines are being merged by the government to create a stronger airline.

From just three in 2003, the number of airlines in India has jumped to 10 as entrepreneurs like Gopinath and Mallya joined the fray to profit from a travel boom expected to more than double market size to 60 million passengers by 2010.

Jet Airways, Indian Airlines and Air Sahara have been joined by Deccan, Kingfisher, SpiceJet, Paramount Airways, Go Air, IndiGo and Indus Airways, with more such as Easy Air, Trans India and Air Dravida seeking approval to take to the skies.

Competition has caused the cost of air travel to fall as airlines cut fares to lure passengers. That has fuelled market growth while squeezing profitability.

Their problems have been aggravated by deficient airport infrastructure and shortage of qualified staff including pilots that forced up salary bills.

Air Deccan lost 2.13 billion rupees in the quarter ended March and desperately needed an infusion of cash to stay in the skies and fund ambitious expansion plans.

Gopinath, who had rejected Mallyaâs initial overtures with scorn, said the alliance with Kingfisher would enable cost savings through better inventory management and sharing of flights and ground-handling staff.

Together, the two airlines would have 71 aircraft dominated by the Airbus, cover 70 destinations and command a market share of 33 per cent, overtaking the Jet Airways-Air Sahara Combineâs 31.5 per cent.

âWith commonality of fleet, we foresee sharing of infrastructure, resources and best practices,â Gopinath told reporters Thursday.

âThis would definitely lead to decreased costs, maximising shareholder value, increased efficiencies and improved profitability.â

Indiaâs aviation industry is set to consolidate through closures and mergers to around two-to-three full service carriers, three-to-four large national low-cost carriers with more than 70 aircraft each and three-to-four small regional operators, according to the Centre for Asia Pacific Aviation.

http://www.thenews.com.pk/daily_detail.asp?id=58719


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## Bushroda

*India's main index poised to break record* 
By Geetha Bhaskaran, Special to Gulf News
Gulf News 

Mumbai: Indian shares could surge to a record this week but there will be resistance and they may fall back because retail investors need the cash to bid for large stock sales coming up in the next few weeks. 

There was some evidence of this last week when the benchmark Sensex came almost within sight of an all-time high, but back-tracked as investors dumped shares to book profits in a market that had climbed nearly a fifth since early April. 

"The DLF public issue is on the radar of many retail investors," said equity strategist V. Venugopal. 

"There should be an outflow of funds from the stock market to pay for the offering." 

Developer DLF, which built parts of the outsourcing and shopping hub of Gurgaon just outside New Delhi, is selling 175 million shares in a price band of Rs500-Rs550 a share. The sale opens June 11-14. 

Media reports said last week that large institutions, both foreign and Indian, have lined up to subscribe to the initial public offering that aims to raise up to $2.4 billion in the country's largest IPO. 

*Robust growth*

The sale will be followed by a follow-on offering by ICICI Bank to raise up to $5 billion and a secondary sale by HDFC Bank for $1 billion.

"The offerings in the pipeline will soak up a lot of cash," trader Hemant Shah said. "This should keep the market on tenterhooks."

"We should see a record-breaking start this week after Wall Street's rally on Friday," Shah said. "But it will be difficult to hold on."

Foreign portfolio inflows into share issues and the stock market are expected at $4-$5 billion in June, or more than double the investment between January and May this year, he said. 

Demand for Indian shares is set to rise on the back of robust growth in Asia's third-largest economy. Government data released last week showed the economy expanded 9.4 per cent in 2006-07 - the fastest pace of growth in 18 years, and only behind China among the world's major economies.

This is unlikely to trigger another monetary tightening by the Reserve Bank of India (RBI), because economic growth is expected to slow down in 2007-08 to 8.5 per cent. 

The central bank had raised interest rates five times between June 2006 and March this year to rein in prices and cool the economy. 

The economic growth this year will still be respectable and among the fastest growing. India's middle class, earning between $4,545 and $23,000 a year, has trebled to 300 million in two decades, the New Delhi-based National Council for Applied Economic Research says. 

"How many countries are there in the world that can boast of 8 per cent growth," asked Shah. "Foreign funds are eager to partake of the action."

The RBI will be soothed as annual inflation eased to a 10-month low of 5.06 per cent in the week ended May 12, and it will increasingly use market stabilisation bonds to suck out excess funds caused by its intervention in the foreign exchange market to keep a lid on the rupee's relentless rise. 

*Strong rupee*

The rupee ended last week at 40.52/53 per dollar, up more than nine per cent in 2007, after scaling on Monday 40.28 - its strongest in nine years.

This has boosted imports, which are growing at nearly double the pace of exports. 

The trade deficit in April jumped to $7.06 billion, the government said on Friday, up from $3.9 billion a year earlier. 

Imports leapt nearly 41 per cent to $17.64 billion in the first month of the current fiscal year from April a year earlier, while exports grew 23 per cent to $10.6 billion. 

Tata Consultancy Services, which gets over 60 per cent of its revenue from the United States, said last week it had increased hedging to $1.5 billion to protect against currency swings. 

While the firmer rupee is squeezing margins of export-focused companies, high interest rates have put the brakes on sales of cars, trucks and motorcycles. 

Maruti, which accounts for more than half of all cars sold in India, said its sales in May grew just 11.2 per cent to 59,400 vehicles. It was the slowest growth in 10 months. 

Rival Tata Motors, which also makes buses and trucks, fared poorly posting a four per cent decline in sales to 42,558 units. 

However, this could change with incomes on the rise. Already people have begun to buy cars on full cash payment, without availing loans and saving on interest costs.


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## Bushroda

*Watch Indiaâs transformation*
By Dr. Sid Gautam
Fayetteville, FayObserver.com

In April, I attended an international conference of Entrepreneurs in San Jose, Calif. More than 4,000 entrepreneurs came to attend this conference called âThe New Face of Entrepreneurship.â One noticeable feature was the overwhelming attendance from Asian countries.

*Go East*

During the 19th and 20th centuries, the main slogan was âGo West, Young Man.â Now, in the 21st century, the trend is toward the East. More and more established businesses are flocking to China, India and many other Asian countries. So far this year, a number of state governors have led delegations to India. The delegation from Virginia, our neighboring state to the north, recently returned after completing a successful visit. More than 100 Virginia business and government leaders, including several Indian-American entrepreneurs, went to India. According to newspaper reports, Gov. Tim Kaine was elated over the success of the delegation in generating jobs and investment in Virginia. Similarly, governors from Minnesota, California and Utah are lining up gubernatorial visits to India. 

The Center for Entrepreneurship at Methodist University is teaming up with the U.S. India Business Alliance in Washington, D.C., and the Carolina Chapter of a famous international entrepreneurial organization called The Indus Entrepreneurs (known as TiE) to organize a business delegation to India in late September 2007.

The goal of this trip is to expose participants to the growth and vibrancy in the Indian economic landscape, and to provide valuable insights regarding the corresponding cross-border opportunities being created for American companies, entrepreneurs and investors. It will feature:

Unique opportunities to get a first-hand look at leading companies. 

Interactive discussions with political and industry leaders responsible for these transformations. 

Exciting activities in four cities â including Delhi and Mumbai, plus some combination of any two cities of the following cities â Ahmedabad, Bangalore, Chennai, Hyderabad. 

A memorable excursion to the Taj Mahal in Agra. 

*Tap India market*

It is a well-known fact that Fortune 500 companies have already established prominent operations in India. Many companies, like IBM, employ more research and development people in India than anywhere else. Other technical companies, as well as pharmaceuticals, financial, real estate, leading manufacturing, telecommunications, auto and media companies, have significantly expanded their operations in India.

The Wall Street Journal recently reported that Viacom Inc. is forming a joint-venture entertainment company in India with local player TV18 Group, in an effort to boost its presence in one of the worldâs fastest-growing media markets. âIndia is one of our priority markets for expansion, and we see long-term growth opportunities across virtually every area of our business,â said Viacomâs chief executive and president, Phillippe Dauman, in Mumbai.

With over 120 million TVs at home and growing faster every day, Indiaâs pay TV market is over $4.2 billion and growing. No wonder media companies from all over the world are exploring opportunities. Last year, for example, Walt Disney Co. acquired childrenâs cable-TV channel Hungama and nearly 15 percent equity stake in Indian media conglomerate UTV Software Communications.

*Indian business in U.S.*

We all see India-born doctors serving in our hospitals. Some rural hospitals have as many as 30 percent to 35 percent of the total numbers of doctors from India. Similarly, India-born engineers, teachers and other professionals and a great number of businessmen are running successful operations in India. However, in the last decade, more and more established businesses from India are coming to the United States, either buying existing businesses or starting new businesses.

Most of the billionaires in India have serious interest in establishing business in the United States. Last year, Forbes magazine found that âthe collective wealth of Indiaâs 40 richest business people, as ranked in our third annual survey, shot up to $170 billion from $106 billion last year.â Top 10 billionaires listed by Forbes accounted for $112 million and have successful operations in the United States.

Tulsi Tanti, founder of Suzlon Energy, runs an $8 billion company heralded as the worldâs most valuable wind company. This company has an order backlog of over $1.5 billion, mainly from customers in the United States, Europe and China.

Wepro, a prominent outsourcing company with a market cap of $25 billion, employs 61,000 people in the United States. Lately, Indian companies are hiring U.S. college graduates and taking them to India to orient with Indian business processes and return to the United States to run their operation. Most of the successful Indian companies are already listed on the American stock exchanges. But many more companies are looking forward to coming to the United States.

The booming stock market and robust real estate developments have created a spectacular increase in the rank of Indian millionaires. According to newspaper reports based on the Asia-Pacific wealth report, âthe number of individuals with financial assets in excess of $1 million grew from 73,000 in 2004 to 83,000 in 2005 â a growth of 19.3 percent.â This is a remarkable growth in one year, and the booming Indian economy will keep on growing the ranks of these millionaires.

The middle class of India is growing by leaps and bounds, and it creates tremendous opportunity for American businesses. It is no surprise that each year more than 600 new malls are opened in India, and each mall has more foreign chain stores than Indian stores. All leading fashion designer stores are a big hit with the youth of India. Similarly, in the field of cars, cosmetics, electronics, telecom, more and more foreign companies are entering Indian markets.

It is our sincere hope that more American businessmen and entrepreneurs can join our delegation and take a firsthand look at the vast opportunity for expanding their operation in India. (For more information, contact the center at 630-7642.) For many more businesses, which are having hard times finding highly trained professionals in any advanced field, it will be an excellent opportunity to connect in the âFlat Worldâ and procure the talent at a reasonable price. Everyone should come out and experience this exploration of new India.

Indian civilization is ancient, but modern India is vibrantly moving toward a new India â an open economy based on market system. Economic growth and the overall success of India will have a profound impact on the global economy, and India will significantly contribute to the creation of a world full of economic, social and political advancements for the teeming millions all across the globe.

_Dr. Sid Gautam is founder and director of the Center for Entrepreneurship at Methodist University._


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## Bushroda

*Emaar to invest billions in India*
Gulf Daily News, Bahrain 

MUMBAI: A joint venture of Dubai's Emaar Properties and India's MGF Developments plans to invest in India more than $12 billion over the next four to five years.

Of the total sum, $3bn-4bn would come in as foreign direct investment, the Indian daily Financial Express said quoting Shravan Gupta, executive vice-chairman and managing director at Emaar-MGF Land Pvt Ltd.

The paper said Emaar-MGF planned to invest in residential, hospitality, commercial and retail properties as well as make investments in education, healthcare, information technology parks and special economic zones across the country.

"Both JV partners would create synergies to bring real estate to global standards," the paper quoted Gupta as saying.

On Wednesday the Indian government said that it aimed to attract $30bn in foreign direct investment in the 2007/08 financial year and expected the property sector to draw more than $3bn reached last year.

India's property prices doubled in the last two years as the economy, growing at more than 9pc a year, boosted demand for shopping malls, houses and offices.


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## Bushroda

*In a New India, an Old Industry Buoys Peasants*
New York Times

http://imageshack.us
A husband and his wife make bricks using mud and wooden molds in Morbi, India. Many Indians can no longer sustain themselves by farming

MORBI, India â Meet the men and women building the new India.

Chakubhai Khabhu, old and lean, smoking a thin, hand-rolled cigarette, stands on top of a pile of bricks his children have made with their hands. His daughter, Vanita, 20, tosses bricks to her brothers, two by two, in a seamless human chain. One of his sonsâ wives takes a break to breastfeed her 2-year-old near a pile of black clay. 

For every thousand bricks, they earn a bit less than $5.50. The family, with five adult laborers, pockets on average a little more than $2 a day.

This is the life behind the great Indian construction boom, propelled by an economy still growing at 9 percent a year. 

The lure of steady work is drawing more and more migrants like the Khabhus, who come to brickyards like this one around the country because they can no longer sustain themselves by farming. 

The success of the brick business, in other words, is as much a portrait of a growing industry as it is a testament to the dismal state of the Indian peasantry.

Construction and its ancillary trades, most of them involving unorganized and unregulated jobs, employ 30 million people, according to the Planning Commission of India. That compares with roughly two million in, say, the software business. 

With construction expanding, so, too, apparently is the demand for bricks. Chandu Bhalsod, president of an association of brick makers in Morbi, said his production had doubled in the last year alone, and would probably double again next year. The demand has grown so fast, Mr. Bhalsod said, that he is now facing a labor shortage. He said he planned to scout for workers this year in a hungry forest belt hundreds of miles away.

Much of that work is done by migrant labor families like the Khabhus, who trek from their home villages near and far to brickyards for eight months of the year, except during the monsoon season, when rains halt production.

The Khabhus said they gave up when seawater from the nearby Gulf of Kutch crept in and killed their fields. Since Vanita was a child, the family has roamed the country in search of work â in construction and road-building, and finally, here to this brickyard.

The Khabhusâ home, in a village about 30 miles west of here called Manomara, is locked up for the season. A thorny bundle of dead brush blocks their front door. It is a billboard announcing that they will be back only when the rains come and the brickyards close. Nearly half of the homes in Manomaraâs low-caste Dalit quarter are locked. 

Of all the backbreaking work available to the poorest Indian peasant, making bricks offers some of the best earnings. It pays better than making salt, or working in the roof-tile factories. It can allow families to build a proper house, pay for a wedding or buy a goat or a television.

But the work is hazardous, especially at kilns like this one. Smoke spills out everywhere. Within minutes it chokes a novice hovering nearby. It is so laden with heavy soot that it blackens nearby mango blossoms, to say nothing of the lungs of the people like the Khabhus, who live and breathe bricks. Home is a small room made of bricks, on the edge of the kiln. They sleep on cots outside.

On most days, they work 14 hours, breaking for meals and sleep during the hottest part of the afternoon, when temperatures climb to more than 110 degrees Fahrenheit, and that is not counting the heat that rises from the kilns day and night. 

At night, when the air is cool, work goes on under the glow of thin, white tube lights. Music screeches from cheap home stereos to keep the workers awake. They mix clay and water by hand, mold the bricks by hand, stack them high between layers of coal, and when they are cooked, after a couple of weeks, load them onto trucks that ferry them to construction sites.

Brick-making work not much different from this has dominated construction in India since antiquity. Today it dominates the countryside. It is impossible to drive through any stretch of rural highway here without seeing â and smelling â brick kilns burning. 

There are no reliable estimates on the number of brick makers in India. But the Energy and Resources Institute, a research organization in New Delhi, estimated that there were 100,000 brick kilns nationwide in 2000. That number has most certainly grown, considering what Ernst & Young estimates to be a 30 percent expansion in Indian real estate.

Children join adults to make a brick kiln in Morbi, India. Most such kilns burn coal and spew choking smoke. 

Brick making in India is also responsible for heavy amounts of pollution. The chimneyless kilns like the ones here are the least energy-efficient, consuming 200 tons of coal for every million bricks they produce. Small pilot projects are under way to develop bricks that require no baking, or that can be made with simple technologies to reduce emissions. But for now the ancient, inefficient kilns persist and proliferate.

Because it is piecework â workers are paid by the number of bricks they make â brick making attracts entire families. An extra pair of hands always helps, even if they belong to a child. At the brickyard in which the Khabhus work, the childrenâs specialty is a task best suited for small, nimble hands. It is called âfinishingâ and it involves squatting by the raw bricks and dusting off extra lumps of clay with a straightedge. 

Attempts have been made to wean children away from work. The American India Foundation, whose donors include many Indians in the United States, finances schools in brickyards, as well as dormitories to encourage parents to allow their children to stay behind. 

At this brickyard, school is a patch of ground in the shade of a tree, with a chalkboard and children sitting in two neat rows. Classes are held for three hours each morning. The children are back at work later. 

Vanita Khabhu had once imagined a life beyond these kilns. She attended a three-week beautician training program. She learned how to wax arms and thread eyebrows, but that was hardly enough to enable her to find a job, and besides, her family needed her hands at the kilns. 

She left school after the second grade and cannot read or write. 

Her future, she knows, will be decided by the man she marries. If he and his family work in the kilns, she will join them. âFor our people, this is the kind of work we do,â she said.


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## Bushroda

*By global standards, India more equal than others*
3 Jun, 2007 l 0034 hrs ISTlSubodh Varma/TIMES NEWS NETWORK

For a long time, we've heard about how India is a land of contrasts; how extreme wealth exists cheek-by-jowl with shocking poverty. We see these contrasts every day. And yet, benchmarked to global standards, India is actually one of the more economically equal societies. 

Don't believe us? Let's take the income earned by the country's wealthiest 10% as a ratio to that earned by the poorest 10%. By this yardstick, the world's most equal economy would be Azerbaijan, where the wealthiest 10% of the population earns 3.3 times the income of the poorest 10%. Japan (4.5 times) and the Czech Republic (5.2) are the next two most equal societies. 

In India, the ratio is 7.3 times, according to the Human Development Report, 2006. That doesn't exactly put India among the world's most equal societies, but it's a lot better than Bolivia's ratio of 168, or even Brazil's 58. 

As a matter of fact, the world is full of economic peaks and valleys. According to a study by the UN-backed World Institute of Development Economics Research (WIDER), Helsinki, the richest 1% own 40% of global assets, while the richest 10% account for 85% of total assets. In contrast, the bottom half of the world population owns barely 1% of global wealth. The study covers all countries and all major components of household wealth, including financial assets, land, buildings and other tangible property. 

Unsurprisingly, most of the wealth is concentrated in Western Europe, North America and high-income Asia-Pacific countries, which between them own 90% of the world's wealth. There is wide variation in wealth per person from $1,81,000 in Japan and $1,44,000 in the US to $1,100 in India, and $1,400 in Indonesia. The concentration of wealth within countries too varies significantly. The richest 10% owns around 40% wealth in China and 70% in the US. 

Another measure of inequality is the Gini coefficient - zero for complete equality and 100% for complete inequality. For income inequality, Gini values range from 35-45% in most countries. In contrast, Gini values for wealth inequality are between 65-75%, and sometimes exceed 80%. Two high wealth economies, Japan and the US, show very different patterns of wealth inequality, with Japan having a wealth Gini of 55% and the US of around 80%. 

Wealth inequality for the world as a whole is higher still. The WIDER study estimates that global wealth Gini is 89%. This means that in a group of 10, one person takes 99% of the pie and the other nine share the remaining 1%. 

A country's representation in the super-rich club depends on three factors: size of population, average wealth, and wealth inequality. The US and Japan are wealthy because they have large populations and high average wealth. China fails to feature strongly because average wealth is modest and evenly spread by international standards. 

In India, the Gini measure of income inequality is 32.5. According to the 61st round survey of the National Sample Survey Organisation, over 70% of the population has a monthly per capita expenditure below the national average of Rs 555. This indicates the low levels of income prevalent in the country even when aggregate economic growth is speeding along at about 8%. 

The larger body of expert opinion is veering around to introducing inclusiveness and equality concerns in macro-economic planning. Otherwise, it is feared that high rates of growth would become unsustainable and politically unviable. However, one lesson is clear: in the present trajectory, prosperity means unequal distribution of wealth and incomes.


----------



## Bushroda

*India: retail institutes to create 2.2 m jobs*
FreshPlaza, Netherlands
June 1, 2007

Manpower crunch in the retail sector has led to a massive jump in training institutes for the retail sector from just 6, two years ago, to 50 today. More importantly, some of the most prominent names in the business of education have jumped in with their own courses. According to industry estimates, retail alone will throw up 2.2 million jobs by 2011. Nearly 80% of these would be front-end jobs.

Presently there are around 50 institutes offering post-graduate courses in the country, including colleges like the Narsee Munjee Institute of Management, SP Jain Institute of Management and Research, Birla Institute of technology and recently NIFT as well as the National Institute of Design who have initiated PG courses in retail.

According to Gibson Vedamani, CEO, Retailers Association of India (Rai), at least 50 more institutes are expected to come up in another 2 years with specific retail programmes.

Rai itself has initiated PG as well as certificate courses in retail with over 12 institutes and 24 associates across the country in association with the Maharashtra government, Indira Gandhi National Open University and management schools like Mudra Institute of Communications.

National Retail Federation of US, a counterpart of the Rai, too offers retail courses With organised retail set to grow exponentially, new as well as established players are facing talent crunch given the mismatch between the available supply and growing demand, pressurised by entry of giants like Reliance, AV Birla, Bharti and Wadias who are spiralling retail salaries. Established retailers like RPG and The future group have started their retail institutes, given the rates of attrition in the industry.

Most certificate programmes are for front-end jobs requiring interaction with customers, support services, shop assistants for which there is no formal training imparted until now.

However, many of these courses not only impart these training but are also expected to help non-English speaking population which constitutes a large portion of the semi-skilled unemployed population of the country.


----------



## Bushroda

*India's GDP growth gets a new engine*

*The importance of domestic consumption in the Indian economy has been slowly diminishing, with the slack being taken over by capital expenditure*

Domestic consumption demand has always been the mainstay of the Indian economy. In recent years, however, its importance has been slowly diminishing, with the slack being taken over by capital expenditure. Private final consumption expenditure (PFCE, the main measure of domestic demand in the economy), which formed 60.3% of the gross domestic product (GDP) at market prices in 2004-05, now accounts for only 57.2%. The slack has been taken up by gross fixed capital formation (GFCF, the money spent on adding to the nationâs stock of capital, such as new factories, new machinery, new buildings). GFCF accounted for 27.9% of GDP at market prices in FY07, up from 25.3% in 2004-05. 

In fact, of the growth in GDP during FY07, GFCF contributed Rs1,10,812 crore, more than the Rs1,03,672 crore contributed by PFCE. In FY07, capital expenditure replaced private consumption expenditure as the driver of GDP growth. Thatâs not surprising, considering that India Inc. has started increasing capacity and that the government has stepped up its investments in infrastructure. 

The slowdown in PFCE growth is an indicator that higher interest rates are having an impact, a conclusion buttressed by the clear signs of a slowdown in retail credit and in sectors such as two-wheelers. PFCE growth was 6.2% in FY07, below FY06âs rate of 6.7%. The March quarter shows a further deceleration to 5.9%, compared with the year-ago period.

The slowdown is even clearer if we compare the year-on-year growth in the two halves of FY07. While PFCE growth was 6.4% in the first half, it fell to 5.9% in the second. In contrast, growth in capital expenditure was 14.7% in the second half of FY07. As Rob Subbaraman, senior vice-president and chief economist (Asia), Lehman Brothers, puts it, âGoing forward, the sharp rise in capital goods imports and surging FDI (foreign direct investment) inflows indicate that investment is likely to remain the key growth driver.â 

The key question for the markets is whether the 9.1% GDP growth rate in the March quarter will lead to more tightening by the Reserve Bank of India (RBI). 

As the data shows, consumption growth has started to slow. Recent RBI numbers show that bank lending too is slowing. Additional capacity coming on stream will ease the pressure on prices. But while higher interest rates may have started to have an effect, the central bank may prefer to err on the side of caution. 

RBI may also be forced to tighten if it buys dollars to prevent further appreciation of the rupee and has to mop up the resulting liquidity.

But the stock market showed no signs it was worried, with the interest-rate sensitive indices such as the BSE Bankex and BSE Auto both gaining 1.3% on Thursday. 
The yield on the benchmark 10-year bond barely moved.

*Apollo Hospitals*

The stocks of Apollo Hospitals and Fortis Healthcare moved briefly in opposite directions as news broke of Dr Trehanâs move to Apollo, with several doctors likely to follow him. Apart from that, however, the Fortis stock has slowly been drifting down ever since its listing and Trehanâs exit is merely the latest blow. The market for doctors is highly competitive and attracting and retaining them is one of the key challenges. 

But even the Apollo Hospitals stock has been a severe underperformer and it hasnât moved at all since end-February. That seems strange, given that Apollo is in a sector with high entry barriers, is a play on the middle classâ increasing ability to pay for high-class medical services and seems to have got its act right. The problem seems to be twofold. One, it has an aggressive expansion plan that will increase interest and depreciation costs. More importantly, however, the trouble is that at a consensus EPS (earnings per share) of around 16.5 for FY08, the stock at around Rs500 continues to look expensive.


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## Bushroda

*Go to India: get better in a jiffy*
Jeremy Page: Delhi Notebook 
The Times, 28 May 2007

Typhoid, Dr Gupta declared, with something of a flourish. As the sweat poured off my brow, I stared up from the hospital bed with relief and, to be honest, a hint of pride. Of all the lurgies heâd been testing for over the last three days, typhoid was by far the most glamorous. 

âHow Victorian!â commented one friend. I imagined myself lying under a mosquito net in a canvas tent, military uniform unbuttoned at the chest, Bible clasped to my heart. Fortunately â if less romantically â I found myself clutching an Indian Hello! magazine in an immaculate, air-conditioned private room at the Apollo Hospital in Delhi. 

Many Westerners still wince at the thought of Indian medical care. But the Apollo is not just one of Indiaâs best private hospitals: it is a leading centre for medical tourism, attracting patients from all around the world, not least Britain. 

Itâs easy to see why. For a start, most of the consultants are ex-NHS â you can tell where they worked from their English accents. The facilities make most British hospitals look Dickensian. And the prices are mind-bogglingly low. Excluding the room, my ten daysâ intensive treatment, including X-rays, ultrasound, intravenous antibiotics and round-the-clock nursing cost Â£200. 

But medical tourists beware: with Indian prices come Indian quirks. First, there are the crowds â not of patients, but their relatives. The entrance feels more like a railway station than a hospital. When I was admitted, I couldnât understand why the nurses looked at me with such pity, muttering âall aloneâ under their breath. Then I peeked into some other rooms and saw entire extended families camped out. 

Another quirk is the social hierarchy within the hospital, where caste and class become intertwined with formal rank. The consultants are at the top â English-speaking, Western-trained and with the easy charm of the upper castes and classes. âDonât worry,â Dr Gupta would say. âWeâll have you shipshape and right as rain in a jiffy.â Next come the junior doctors â higher caste but middle-class, locally trained and unjustifiably arrogant, lording it over nurses and patients alike. âSo, howâs your sickness?â one asked vaguely. âGot a fever?â âI donât know,â I said. âPerhaps you should read my chart?â 

The nurses, near the bottom of the pile, were dedicated and hard-working. But being mostly from poor, lower caste families, which have limited access to education, they had only a few words of English and rudimentary training. 

I lost count of how often they missed veins giving injections. They would also rinse water glasses in unfiltered tap water â the likely source of the typhoid. 

I cannot complain, though. Within two weeks, Iâd recovered. And had I been in London, an army of medical students would have poked and prodded me around the Hospital for Tropical Diseases. 

Glamorous typhoid is not. But if you must get it, the Apolloâs probably the best place in the world to be.


----------



## Bushroda

*Study: India to invest $120b in infrastructure by 2010*
MENAFN - 28/05/2007

(MENAFN) A study published by the Associated Chambers of Commerce and Industry of India (ASSOCHAM) estimated the country's expenditure on infrastructure development to reach $120 billion within the next three years, Khaleej Times reported.

According to the study, India's infrastructure needs massive investments in several sectors such as roads and water and electricity utilities. The country has been hosting foreign investments in the past few years, but the infrastructure still needs more investments from local resources.

The ASSOCHAM study, released by its President, pointed out that the massive investment in the construction industry will be driven by the growing requirements of sectors such as transportation, power, urban infrastructure, housing and irrigation to ensure that the industry grows at the projected level. 

It said that the growth of this sector will triple the requirement of workers from the present 30 million to 90 million, and also propel the need for contractors and subcontractors.


----------



## Bushroda

*Brazil's Lula in India to push business ties*
WashingtonPost
By Y.P. Rajesh, Sunday, June 3, 2007; 4:22 AM

NEW DELHI (Reuters) - Brazilian President Luiz Inacio Lula da Silva arrived in India on Sunday, hoping to boost business and add more substance to the growing ties between two of the world's biggest developing nations.

The three-day state visit is the latest in a series of high-level exchanges between the distant countries, which have forged a common stand in recent years on global trade and strategic issues.

The two have been key partners within the G20 group of developing countries pushing rich nations for freer global farm trade and are also seeking a permanent seat in the UN Security Council along with Germany and Japan.

"The meaning of my visit to India is to reiterate our readiness to forge a strategic alliance between our countries," Lula wrote in an article published in India's Hindu newspaper on Sunday.

"The size of our respective populations, the economic vigor and the technological advances of both of our countries manifestly indicate how hard we still have to work in order to achieve our potential of cooperation and friendship," he said.

Trade and business are expected to be on top of the agenda when Indian Prime Minister Manmohan Singh holds talks with Lula, who arrived with a delegation of about 100 businessmen.

Lula is also due to address a conference of business leaders in the Indian capital on Monday.

Although bilateral trade has grown steadily it is seen to be nowhere near its true potential, with Brazil unhappy about New Delhi's hesitation to further open its markets to farm imports despite slowing Indian agricultural output.

While total trade touched $2.4 billion in 2006, Brazilian exports to India fell 15 percent to $937 million, and Lula's team is expected to push New Delhi for easing investment and trading norms.

The two countries aim to quadruple trade to $10 billion by 2010.

LARGER GLOBAL ROLE

Increasing the use of bio-fuels, an area in which Brazil is a world leader, would be a key area to push cooperation for India, whose energy needs are surging with its scorching economic growth, an Indian foreign ministry official said.

New Delhi would also seek Brazil's support at the Nuclear Suppliers Group, an organization that governs global nuclear trade, which it needs to buy nuclear fuel and reactors after the conclusion of a civilian nuclear cooperation agreement with the United States, he said.

In addition, the two sides would prepare to forge a common stance on issues such as climate change and global trade talks ahead of this week's G8 meeting in Germany, which both Lula and Singh are attending.

Analysts were optimistic Lula's India visit would help build stronger bonds between the two emerging market giants.

"I think both India and Brazil are beginning to recognize that distance should not matter and there should be greater trade between the two countries," said Rajiv Kumar, director of the Indian Council for Research in International Economic Relations.

"It is also the coming together of intermediate or medium-sized countries for a greater role in global governance and international financial architecture," he said.


----------



## Neo

Bushroda said:


> *Study: India to invest $120b in infrastructure by 2010*
> MENAFN - 28/05/2007
> 
> (MENAFN) A study published by the Associated Chambers of Commerce and Industry of India (ASSOCHAM) estimated the country's expenditure on infrastructure development to reach $120 billion within the next three years, Khaleej Times reported.
> 
> According to the study, India's infrastructure needs massive investments in several sectors such as roads and water and electricity utilities. The country has been hosting foreign investments in the past few years, but the infrastructure still needs more investments from local resources.
> 
> The ASSOCHAM study, released by its President, pointed out that the massive investment in the construction industry will be driven by the growing requirements of sectors such as transportation, power, urban infrastructure, housing and irrigation to ensure that the industry grows at the projected level.
> 
> It said that the growth of this sector will triple the requirement of workers from the present 30 million to 90 million, and also propel the need for contractors and subcontractors.



$120 billion in three years is huge investment, I assume the funds will be raised from private sector.
Whats your development budget btw?


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## Bushroda

Neo said:


> $120 billion in three years is huge investment, I assume the funds will be raised from private sector.
> Whats your development budget btw?



120 billion would be government expenditure. GoI has allocated $37billion for infrastructure spending in the current financial year. I couldn't find a link but here is a news article that can help explaining

https://defence.pk/forums/showpost.php?p=70287&postcount=788

Apart from this $120 bln government is expecting private investment between $180 - $200 billion. This is the reason why Infrastructure sector has been deregulated the most. Any foreign company willing to invest can go on its own w/o any partnership with an Indian company. That has irked some of the corporate honchos.


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## Neo

Thanks Happy Feet, do you also have the total figs of development budget, if $37 billion is allocated to infrastructure only the total budget must be somewhere near $100 billion.

To sustain high growth India will have to invest highly in infrastructure, she's already suffering from the negligence in this sector from previous governements. The rural sector will receive a boost from the betterment of roads and accessability thruout the region.


----------



## Bushroda

Neo said:


> Thanks Happy Feet, do you also have the total figs of development budget, if $37 billion is allocated to infrastructure only the total budget must be somewhere near $100 billion.:



I am sorry Neo, I am trying to find the link but it is still eluding me. Unfortunately, I don't even know any rough figure to tell you. I'll post here once I find the link.



Neo said:


> To sustain high growth India will have to invest highly in infrastructure, she's already suffering from the negligence in this sector from previous governements. The rural sector will receive a boost from the betterment of roads and accessability thruout the region.



In the next decade, India needs an investment of around $1.5 trillion dollars in various fields to keep up the existing growth rate, develop a sound industrial infrastructure & migration of farm workers into Industrial & manufacturing sector. A huge task indeed.


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## Neo

Okay, thanks happy Feet. I'll check with some sources in India.
Meanwhile I found this, its too big to post but must read it.:http://www.adb.org/Documents/books/ADO/2006/ind.asp


__________________________________________________________
Another report:



> *Budget 2007: Rural infrastructure gets 31% hike *
> The thrust on agriculture and India&#8217;s rural areas continues in India&#8217;s Union Budget 2007-2008, in keeping with the government&#8217;s plan to marry growth with equity and social justice
> 
> A 31% hike in allocation towards the Bharat Nirman programme for upgrading rural infrastructure, from Rs 18,696 crore to Rs 24,603 crore, and a proposed Rs 225,000 crore for farm credit are some of the main outlays for rural India in Budget 2007-08.
> 
> Presented by Finance Minister P Chidambaram to Parliament on February 28, the budget proposes that an additional irrigation potential of 2,400,000 hectares be created, including 900,000 hectares under the Accelerated Irrigation Benefit Programme (AIBP).
> 
> The outlay for the AIBP is to be increased from Rs 7,121 crore to Rs 11,000 crore including a grant component to state governments of Rs 3,580 crore, up from Rs 2,350 crore over the previous budget. In the current financial year, 35 projects will be completed under the AIBP.
> 
> In the year ending December 2006, 53,370,000 new farmers were brought into the institutionalised credit system. The target for 2007-08 is set at Rs 225,000 crore with an addition of 50,000,000 new farmers accessing credit.
> 
> The National Agricultural Insurance Scheme (NAIS) will be continued for the 2007-08 kharif and rabi season, with a budgetary provision of Rs 500 crore. A weather-based crop insurance scheme will be started by the Agricultural Insurance Corporation on a pilot basis as an alternative to the NAIS, with an allocation of Rs 100 crore for 2007-08.
> 
> Rs 1,800 crore has been allocated for a water recharging scheme that will offer a 100% subsidy to small farmers and 50% to other farmers to encourage them to recharge water by diverting rainwater into &#8216;dug wells&#8217;. The scheme will be finalised by the Ministry of Water Resources and will be transferred to NABARD, to be distributed through lead banks in the districts to the beneficiaries.
> 
> In March 2005, a pilot project was launched to restore and rejuvenate waterbodies in 13 states. The World Bank signed a loan agreement with Tamil Nadu for Rs 2,182 crore to restore 5,763 waterbodies with a command area of 400,000 hectares. An agreement with Andhra Pradesh is expected to be concluded in March 2007 to cover 3,000 water bodies with a command area of 250,000 hectares.
> 
> A special plan is being implemented over a period of three years in 31 suicide-prone districts in four states, involving a total amount of Rs 16,979 crore. Of this, around Rs 12,400 crore will be spent on water-related schemes. The plan includes a scheme for the induction of high-yielding milch animals and related activities in order to enhance livelihood options.
> 
> Other budgetary allocations and schemes for the farm sector are:
> 
> The 2% interest subvention scheme for short-term crop loans will continue with a provision of Rs 1,677 crore.
> 
> A Special Purpose Tea Fund to rejuvenate tea production. Financial mechanisms for replantation and rejuvenation will also be implemented for coffee, rubber, spice, cashew and coconut plantations.
> 
> To address the problem of poor availability and quality of certified seeds, the Integrated Oilseeds, Oilpalm, Pulses and Maize Development Programme will be expanded with sharper focus on scaling up the production of breeder, foundation and certified seeds. Government will fund the expansion of the Indian Institute of Pulses Research, Kanpur, and offer other producers a capital grant or concessional financing to double production of certified seeds within a period of three years.
> 
> Rs 100 crore allocated for the National Rainfed Area Authority set up under last year&#8217;s budget.
> 
> The Agriculture Technology Management Agency (ATMA), now in place in 262 districts, will be extended to another 300 districts. Provision for ATMA will be increased from Rs 50 crore to Rs 230 crore.
> 
> The amount of fertiliser subsidy has been increased from Rs 17,253 crore to Rs 22,452 crore. Based on a study, yet to be conducted, a pilot programme will be implemented in at least one district in each state to deliver subsidies directly to farmers.
> 
> The budget has also allotted Rs 12,000 to the National Rural Employment Guarantee Scheme. However, since it is a demand-driven scheme, the budget will be supplemented as required. One of the government&#8217;s most ambitious programmes is expected to be extended to 330 of India&#8217;s poorest districts in the financial year 2007-2008.
> 
> Additionally, an amount of Rs 2,800 crore has been provided for the Sampoorna Gramin Rozgar Yojana in districts not covered by the NREGS. Allocation for the Swaranjayanti Gram Swarozgar Yojana, promoting self -employment among the rural poor, has been increased from Rs 1,200 crore to Rs 1,800 crore.
> 
> To augment its resources for refinancing rural credit cooperatives, the National Bank for Agriculture and Rural Development (NABARD) will issue government-guaranteed rural bonds to the extent of Rs 5,000 crore with suitable tax exemptions.
> 
> The corpus of the Rural Infrastructure Development Fund, which sanctions and disburses funds to state governments, is to be raised to Rs 12,000 crore from Rs 10,000 crore in the previous budget. A separate window for rural roads will continue, with a corpus of Rs 4,000 crore.
> 
> Source: PTI, March 1, 2007
> www.unionbudget.nic.in, February 28, 2007
> The Hindu, February 28, 2007
> 
> 
> * Budget 2007: Rs 85 crore for child protection scheme*
> The Ministry of Women and Child Development will launch an Integrated Child Protection Scheme to address the issue of child protection and build a protective environment for children through government-civil society partnerships
> 
> 
> With the safety of children becoming an issue of national concern, in the aftermath of the Nithari killings, India&#8217;s Union Budget 2007-2008 has earmarked Rs 85.5 crore for implementation of an Integrated Child Protection Scheme (ICPS).
> 
> Funds for child developmenton the whole have been increased to Rs 5,053.33 crore from last year&#8217;s Rs 4,255.51 crore, Finance Minister P Chidambaram announced as he presented the budget to Parliament on February 28.
> 
> The ICPS is being launched by the Ministry of Women and Child Development to address the issue of child protection and build a protective environment for children through government-civil society partnerships.
> 
> In addition to the budgetary provision of Rs 85.5 crore, an amount of Rs 9.50 crore will be made available for implementation of the scheme in the northeastern states.
> 
> Allocation for the Integrated Child Development Services (ICDS) has been increased to Rs 4,761 crore from last year&#8217;s Rs 4,087 crore. The government plans to expand the ICDS to cover all habitations during the Eleventh Five-Year Plan.
> 
> A conditional cash transfer scheme for girl-children, with insurance cover, is also being introduced during the current financial year as a central pilot project. Budgetary provision of Rs 13.50 crore has been made available for this scheme that aims to tackle the problem of discrimination against the girl-child.
> 
> The cash transfer will be provided to the family of the girl-child, preferably the mother, only after the claimant fulfils certain conditions such as providing the child&#8217;s birth registration certificate, immunisation records, enrolling the child in school, and agreeing not to marry her off until she is 18 years old.
> 
> Source: www.hindu.com, February 28, 2007
> 
> 
> * Budget 2007: Focus on education, health*
> Services like schooling, housing and nutrition have the largest claim (Rs 83,950.69 crore) on total plan allocation in India&#8217;s latest budget. Together with energy and transport, the social sector accounts for nearly 75% of the total allocation of Rs 319,992 crore
> 
> 
> A 35% increase on education spending and a 22% hike in allocations for public health and family welfare are highlights of India&#8217;s Union Budget 2007-2008. Presented by the country&#8217;s Finance Minister P Chidambaram to Parliament on February 28, Budget 2007-08 also has new schemes for disadvantaged sections of the population like the physically challenged, the elderly and landless rural families.
> 
> Maintaining high priority for eight flagship programmes of the UPA government -- including the National Rural Employment Guarantee Scheme, Bharat Nirman, and the National Rural Health Mission -- the finance minister&#8217;s fourth budget pegs gross budgetary support for the coming fiscal at Rs 205,100 crore, of which the central plan will be Rs 154,939 crore.
> 
> Allocation to the education sector has been increased by 34.2%, to Rs 32,352 crore. An amount of Rs 23,142 crore has been allocated for school education programmes, as against Rs 17,133 crore in 2006-07.
> 
> The Sarva Shiksha Abhiyan (Universal Education Programme) gets Rs 10,671 crore and the mid-day meal scheme will be extended to upper primary classes in 3,427 educationally-backward blocks.
> 
> Two lakh more teachers are to be employed and 5 lakh more classrooms constructed in primary schools, the finance minister said.
> 
> The secondary education allowance will be doubled from Rs 1,837 crore to Rs 3,794 crore.
> 
> Chidambaram also proposed the implementation of national means-cum-merit scholarships with an allocation of Rs 6,000 to every child who completes Classes 9 to 12, to lessen school dropout rates.
> 
> Enhanced allocations for SC/ST scholarships from Rs 440 crore to Rs 611 crore and a scholarship programme for students from minority communities were also announced. The allocation for the latter is Rs 72 crore at the higher secondary school level, and Rs 48 crore for graduate and postgraduate students.
> 
> Besides education, allocations for health and family welfare have been hiked substantially by 21.9% to Rs 15,291 crore. The hike in allocations to these sectors is almost identical to those in the previous two budgets.
> 
> Prime Minister Dr Manmohan Singh reiterated that the prime focus of Union Budget 2007-08 was education and healthcare, in keeping with his government&#8217;s commitment to increase spending on the country&#8217;s social infrastructure. &#8220;Education and healthcare are the primary imperatives as far as this budget is concerned.&#8221; Dr Singh added that there was a need to improve the skill level of India&#8217;s population, and therefore special emphasis was being laid on secondary education.
> 
> The prime minister said the budgetary emphasis was also on improving access to social services and providing a social safety net. Therefore, 70 lakh households are to be covered under a social welfare scheme with the Life Insurance Corporation (LIC) and with support from state governments. Of this, 50% of the premium, at Rs 200 per household, will be given by the Centre. LIC will maintain a Rs 1,000 crore fund for the purpose.
> 
> In a scheme for economically weak sections of the population, the ceiling of loans under the differential rate of interest scheme would be raised from Rs 6,500 to Rs 15,000, and for housing loans from Rs 5,000 to Rs 20,000. Insurance companies will launch a senior citizens scheme in 2007-08.
> 
> Chidambaram also announced that the government would create 1 lakh jobs for the physically challenged.
> 
> The budgetary allocation for scheduled castes and scheduled tribes (SC/STs) is to be increased to Rs 3,271 crore in the coming financial year. And, finally, Rs 63 crore has been earmarked for share capital for the National Minorities Development Finance Corporation following the Sachar Committee recommendations.
> 
> The budget continues to focus on agriculture for the fourth consecutive year, with substantial increases in funds for farm credit, subsidies and extension of irrigation coverage. The rural infrastructure improvement programme, Bharat Nirman, has been given Rs 24,603 crore, an increase of 31.6% over the current year.
> 
> These, together with Rs 12,000 crore for expansion of the National Rural Employment Guarantee Scheme to 330 districts, from the current 200, are other key features of Budget 2007-08.
> 
> Source: Reuters, February 28, 2007
> PTI, February 28, 2007
> www.expressindia.com, February 28, 2007
> www.business-standard.com, February 28, 2007
> 
> http://www.infochangeindia.org/GovernanceItop.jsp?section_idv=20#4820


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## Bushroda

Thanx Neo,

The ADB report speaks of the budget hike for Bharat Nirman Yojana(India development plan). This is different from National Developement Budget (or I am not sure)


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## goldenword

thanks. Very comprehensive coverage


----------



## Bushroda

*Go east, GE: Investing in India*
Posted Jun 4th 2007 11:00AM
by Michael Rainey

General Electric (NYSE: GE) has big plans in India. Speaking in New Delhi, GE CEO Jeffrey Immelt announced that the company plans to invest heavily in India, particularly in infrastructure. According to The New York Times, Immelt declared that "this is the era of the developing world and of emerging markets," and that GE can achieve higher growth by focusing on India and other high-growth economies. 

Immelt was quoted, "If we can grow at the same pace as the Indian economy, we can be a great company." India's economy grew at a rate of 9.4% in the year ending March 2007, and is expected to grow at roughly the same rate this year. Given that the U.S. economy is barely growing at all right now, this strategy certainly makes sense.

Global demand for new infrastructure is staggering. Immelt claimed that over the next eight years, the global economy will require some $4 trillion in investment. GE plans to make India a central part of its global infrastructure strategy. In 2007, GE expects to generate $3 billion in revenue from India (out of $175 billion overall); by 2010, it expects $8 billion in revenue, based on $8 billion in Indian assets. Major projects include nuclear and conventional power plants, jet engines for Air India, health care facilities and real estate.

An article in Sunday's Times suggests that GE is a good international markets play. According to Michael Metz, the chief investment strategist of Oppenheimer & Company, "If you buy General Electric . . . you almost don't need a foreign stock fund." And if you are looking for a way to invest in the rapidly growing Indian economy, GE stock may be a good move.


----------



## Bushroda

> Together with energy and transport, the social sector accounts for nearly 75% of the total allocation of Rs 319,992 crore



You are right Neo, 

Rs. 3199.92 is nearly 80 billion dollars. This is from Central government. Apart from this amount respective State governments have their own development budget.


----------



## Bushroda

*Immigration Bill Point System: More Indian Engineers, Fewer Hispanic Families*
Posted by Jonathan Stein on 06/05/07 at 8:24 AM

The new immigration bill currently being hammered out by Congress has a point system to determine which potential immigrants get visas. The system awards points, which increase an applicant's chances of being let into the country, for being English proficient, having a college or graduate degree, and having a job in science, technology, or health. The plan drastically rewrites immigration policy in the United States, and if left in its current form, will fundamentally change the makeup of the country.

The first consequence of the point system is that the primary criteria for being offered a visa changes from family to profession, awarding points not for being related to a current resident of the U.S. but for having a highly skilled job. Individuals trying to bring their adult children, siblings, or parents to America will have a much harder time (spouses and minor children will still be allowed in without being subject to the point system), while engineers and scientists trying to be the first from their family to come to the States will have a much easier time. Dems are saying this breaks up families and contains an inherent class bias. Says Senator Robert Menendez, a Democrat from New Jersey, "The point system would have prevented my own parents, a carpenter and a seamstress, from coming to this country." (Note: If anti-immigration forces currently claim immigrants steal low-wage jobs from Americans, how long under the new plan until they start crying about the plight of the replaced American doctor of physicist?)

The second ramification is the corruption of the free market. Previously, companies decided what sort of employees they needed, found them from abroad or in American universities, and sponsored them for work visas, creating a perfect match between skills and available work. But the point system makes this sorting and decision-making the responsibility of the federal government. Naturally, big business hates the idea. Democrat Zoe Lofgren represents Silicon Valley, where, she says, no one is in favor. "The government is saying, in effect, 'We have a five-year plan for the economy, and we will decide with this point system what mix of skills is needed,'" she told the New York Times. "That is not the way a market-based capitalist economy works best."

The third problem is that the bill locks in the criteria for the point system for 14 years. The economy may not need engineers, mathematicians, and doctors in 14 years -- it might need unskilled labor or skilled labor of an entirely different kind.

Another effect -- and this one is neither good nor bad, I think -- is the changing racial demographics of the United States. *The point system will reward characteristics already found in immigrants from Asia -- in the last 15 years, over 75 percent of immigrants from India, and over 50 percent of those from China, have had some form of college degree.* And the English proficiency of immigrants from across Asia is usually high. 

*Indians in particular will do quite well under the point system*, and immigrants from South America, Central America, and Mexico will do quite poorly. *Currently over 40 percent of Indian immigrants are in science, technology, engineering, or health. That compares to less than five percent of Mexican immigrants. Over 40 percent of Indian immigrants come with a master's degree or higher. That compares with less than five percent of Mexican immigrants. Almost 70 percent of Indian immigrants come speaking English fluently or "very well." That compares to 20 percent of Mexican immigrants.*

So in addition to looking at the immigration plan's plethora of other problems, senators need to take a long hard look at the point system. It has some problems, but more than that, it will have a tremendous impact on the composition of our country -- is that something they want to engineer? -- and deserves the utmost care.


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## Bushroda

*Indian cities draw investors in*
Assetz.co.uk
5th June 2007

The Indian property market is going from strength to strength according to the latest reports. Some investors have recently begun ploughing money into the country as they take advantage of cheap property prices and favourable exchange rates. The Indian tourist ministry has also been heavily promoting the many different holiday options that the country offers.

In a campaign that last year cost Â£8 million, the ministry of tourism has been advising overseas holidaymakers to come and experience 'Incredible India'. A spokesman said the government "is putting greater emphasis on development of infrastructure at important tourist destinations and to promote and publicise various tourism products of India within the country and abroad".

It seems that the campaigning has paid dividends, as tourist numbers have increased by around 45 per cent in the past two years. India is a huge landmass and conditions vary widely in different parts of the country. It is possible to take a ski trip to the north or a beach holiday in the south. There are jungles galore inland, allowing for safaris and wildlife-themed holidays, with visits to the habitat of the native Bengal tiger particularly popular.

The cities are also experiencing strong property price growth and demand is expected to continue at high levels for at least the next 12 months, according to the chairman of the National Housing Bank (NHB). The NHB is a regulatory body for housing finance companies in India.

According to statistics collected by the body, property prices in some of the bigger cities - like Mumbai, Delhi and Bangalore - have risen by between 30 and 40 per cent in the past year. The NHB attributes this to lack of land and housing stock supply (as much as 3.1 million units under, by government estimates), coupled with a strong economy that has seen wages rise and some sections of the populace become increasingly affluent. "Demand for housing will remain strong," a spokesman said.

With this in mind, construction companies have gone into overdrive. Real estate is being built all over the Indian peninsula, including a huge development - described as a "mega housing project" by its developers - at Mohali. British investors that buy in India can be assured of getting a lot of property for their money and the present climate suggests a bright future for Indian investment.


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## Bushroda

*SWISS to introduce services to Delhi and Shanghai *
5 June 2007 

SWISS is to add its first new long-haul destinations to its network, with the introduction of scheduled services to the key cities of Delhi (India) and Shanghai (China). 

The new routes can be operated thanks to the addition of five further aircraft to the SWISS long-haul fleet, enabling the carrier to both increase frequencies on existing routes and introduce service from Switzerland to new destinations. The addition of Delhi and Shanghai should both boost the Swiss economy and enhance Switzerlandâs vacation appeal.

SWISS is growing, at a steady and sustainable pace. Since last November, Switzerlandâs national airline has added five Airbus A320-family aircraft to its European fleet and has introduced two further Airbus A330s and (from July 20) an additional A340 on its intercontinental network. Two more Airbus A340 aircraft will also be added to the SWISS long-haul fleet by spring 2008.

As a result of this fleet expansion, SWISS will introduce service to Delhi (India) in its 2007/08 winter timetable, and will add Shanghai (China) to its network in the 2008 summer schedules. âIn extending our network to Delhi and Shanghai, we are both strengthening the Swiss economy and promoting Switzerland as a tourist destination,â says SWISS CEO Christoph Franz. Delhi will be served with Airbus A330 aircraft from November 25, 2007, while the service to Shanghai, which will begin on March 30, 2008, will be provided using Airbus A340 equipment.

*India: a key growth market*

Delhi will be SWISSâs second destination (after Mumbai) in the emerging Indian market. âItâs the rapid growth in this market, the strong business ties between the two countries and the high demand for air services from non-government and non-profit organisations, too, that have prompted us to add Delhi to our network as our second Indian destination,â says Harry Hohmeister, Chief Network & Distribution Officer at SWISS. The new route also offers sizeable potential for tourist traffic, from both the Swiss and the Indian source markets.

Swiss exports to India have more than doubled over the past three years, increasing 36% in 2006 alone. Imports of Indian products and services to Switzerland are also rising rapidly, and recorded 11% year-on-year growth last year. 

*First direct service between Zurich and Shanghai*

With China now Switzerlandâs second-most-important trading partner in Asia, the demand for business travel between Zurich and Shanghai has considerably increased. Calls have also been growing in the tourism sector for a direct Zurich-Shanghai connection. 
Apart from flights to and from Hong Kong, no direct services currently exist between Switzerland and China. With Air China and Shanghai Airlines due to join Star Alliance next year, SWISS should also soon be able to collaborate with two well-established local airline partners to offer its customers attractive onward connections from Shanghai to other Chinese destinations.

Beijing is also set to appear in the SWISS timetable next spring, under a codeshare operation with Lufthansa via Munich. âOur new services should ensure that Switzerland enjoys attractive air connections with what is currently the worldâs fastest-growing market,â CEO Christoph Franz continues.

Swiss exports to China have increased by more than 35% over the last three years. Imports of Chinese products and services to Switzerland are also seeing substantial growth, and rose 16% last year.

*Schedules coordinated with Lufthansa for more customer choice*

SWISS and Lufthansa will also be coordinating the schedules of their services to Delhi and Shanghai to offer valuable convenience benefits to all their customers. As a result, travellers will be able to fly from Zurich to Delhi or Shanghai either directly on SWISS or via Frankfurt or Munich with Lufthansa. The harmonised timetables will offer customers a choice of three different departure times, and a flexibility that will be particularly appreciated by business travellers. The collaboration is further confirmation of Lufthansaâs multi-hub strategy centred on Zurich, Munich and Frankfurt airports.

*SWISS generates jobs*

Having successfully completed its corporate restructuring, SWISS has given itself the scope to invest in its fleet, its network and its product. The present fleet expansion is also creating new jobs â around 600 of them among the companyâs flying personnel alone, or an increase of some 10% on present workforce numbers.

SWISSâs expansion is generating new jobs in related fields, too, such as technical services, catering and ground handling. âEvery long-haul aircraft we add to our fleet creates about as many jobs as will be found in a small or medium-sized enterprise in Switzerland,â Christoph Franz points out. âSo here, too, our fleet expansion is generating added value for the Swiss economy.â


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## Bushroda

*Indian Rupee Strengthens Versus Greenback*
RTT News

Monday, June 04, 2007 10:59:34 AM - The Indian rupee showed strength against its U.S. counterpart on Monday, reversing weakness that occurred in overnight trading. The currency remained in a range near its high, still supported by last week's strong GDP data. News over the weekend that the U.S. and India were unable to reach a nuclear deal did not seem to have a significant impact on trading.

The Indian rupee gained ground versus the dollar Monday morning in New York. With these gains, the rupee remained hovering near a multi-year high set recently versus the greenback. At 10:45 am ET, the Indian currency fetched a mark of 40.20 against its American counterpart. This is compared to a level of 40.545 just after 7 am. Monday's advance brought the rupee back to levels it experienced on Friday. 

India announced last week that its economy grew 9.4% for the 2006-07 fiscal year, compared to a 9% growth the previous year. This number was India's highest in 18 years, boosted by expansion in manufacturing, as well as exports and services. 

Over the weekend, India and the United States could not reach agreement on a proposed nuclear deal after three days of negotiations in Delhi. The deal would have seen the U.S. share fuel and information with India. One of India's concerns with the deal is a clause that would let the United States end its cooperation if India tested a nuclear weapon. Prime Minister Manmohan Singh is expected to discuss the deal with President Bush when they meet at the G-8 summit in Germany this week. The two men had agreed to the deal in July 2005. 

*Dollar Drops Against Major Counterparts*

Monday, June 04, 2007 10:46:46 AM - The U.S. dollar dropped against its major counterparts on Monday morning in New York. The morning saw the greenback drop to a three-week low against the sterling. Trading took place amid the mid-morning release of data that showed U.S. factory orders increased by 0.3% in April.

The dollar fell against the euro in Monday morning trading in New York, reaching its lowest level in almost a week. The dollar moved off a daily high of 1.3432 that it touched around 9:30 am Eastern Time. The greenback then began to slip against the euro after the release of data showing Euro Zone PPI rose above expectations during April. By 9:30 am Eastern Time, the greenback was down to 1.3498, its lowest level against the euro since last Tuesday. The dollar began to rally a little after 10 a.m. ET. 

The greenback also dropped against the yen on Monday morning in New York. The pair saw relatively little movement during the early morning, trading around 122. However, traders soon mulled data showing that Japanese capital spending grew more than expected in the first quarter. This took the dollar lower. By 9:15 am Eastern Time, the greenback was at 121.54, its lowest level against the yen since last Thursday. The greenback rallied over the next half-hour before leveling off. 

The dollar slipped to a three-week low in trading with the pound on Monday morning in New York. The slide began around 5 am Eastern Time and continued into the mid-morning. By 9:30 am Eastern Time, the dollar traded as low at 1.9908 before stabilizing near that mark. Monday's action came as traders looked ahead to the British retail sales monitor and Thursday's Bank of England rate decision.


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## Bushroda

*Sustaining rapid growth* 
Business Standard / New Delhi June 05, 2007 

Our analysis of the performance of a large sample of 1,700 Indian companies, representing about 75 per cent of the market capitalisation of the Bombay Stock Exchange, reinforces the very positive macro-economic news from 2006-07. Incomes (sales revenue and other) grew by over 27 per cent for the sample as a whole, the highest rate of growth in the five-year period 2002-07 and significantly higher than the previous yearâs growth rate of about 20 per cent. Operating profits (EBDITA) grew by almost 40 per cent, compared with 11 per cent in the previous year. This was despite material and manpower costs increasing by over 27 per cent. And net profits grew by 47 per cent, compared with a measly 14 per cent growth in the previous year and second only to the 53 per cent achieved in 2003-04. The one dark spot on this very impressive performance is the relative decline during the fourth quarter of the year, but that was not enough to offset the achievements of the previous three quarters. 

There are some fundamental issues arising from this performance, which relate to sustainability over the longer term. One set of issues pertains to the sources of this growth. Clearly, productivity is a significant contributor, reflected in the wide gap between income growth and profit growth; but it is not the only driver. The corporate sector has been making huge investments in capacity over the past four years, a process that is reflecting in major macro-economic indicators, such as the capital goods segment in the Index of Industrial Production (where the capital goods sub-set has been outpacing others) and the Gross Fixed Capital Formation numbers in the National Accounts (growth now comes more from investment than consumption). Such investment upswings are typically thought to last about three years, but nothing seems to be typical in the Indian economy today. Assuming this capacity expansion goes on for some more time, many companies will very likely find themselves in a situation in which their capacity exceeds their ability to sell domestically. At that point, they will either have to look more aggressively for markets abroad, or, failing this, curb investment plans until demand catches up with capacity. The high profit levels of the 1,700 companies (9.1 per cent of sales, on average) would suggest that they have the cushion to get into export markets despite the rise of the rupee. If they fail to do that, then declining investment can precipitate a fairly sustained slowdown in growth, as India saw between 1997 and 2003. The essential point is that higher penetration of global markets is critical to sustaining the kind of performance seen in recent years. 

Another issue that arises is the way in which the stock market values the large mass of companies in this sample. A simple analysis of ratios suggests that the price-earnings ratio of this sample is higher than that of the 30 companies comprising the Sensex. Since all 30 are part of the sample, this means that the ratio for the non-Sensex companies is higher than for the sample as a whole. Evidently, a lot of companies in the lower ranges of market capitalisation are being valued rather aggressively by investors. The large number of new fund offers for mid-caps, small-caps and now even micro-caps is testimony to this. It is quite conceivable, though, that any significant correction in prices will hit smaller companies hardest, particularly those which have not been able to hedge their bets by diversifying outside the country. In short, while it is entirely appropriate to celebrate last yearâs successes, it is also time to tread cautiously and focus on companies that are doing what is necessary to sustain their performance.


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## Bushroda

*India's ISEC sells sugar to Dubai* 
REUTERS[ TUESDAY, JUNE 05, 2007 06:30:14 PM] 

LONDON: The Indian Sugar Exim Corporation Ltd (ISEC) has sold more than 200,000 tonnes of bulk Indian raw sugar to Dubai's Al Khaleej Sugar, the biggest producer of refined sugar in the Middle East, the refinery's general manager said on Tuesday. 

"It will start this year and spill over into next year," Jamal al-Ghurair told the media, declining comment on the price. "The numbers (tonnage) are going up day by day," he added. 

It was the Dubai refinery's first bulk purchase of Indian raw sugar, he said. Al-Ghurair said the refinery had made the purchase because of the freight advantage of Indian sugar over Brazilian sugar to the Dubai refinery. 

He said he expected to make further purchases of Indian raw sugar because of the availability of Indian supplies and the freight advantage over Brazil, the refinery's traditional origin for raw sugar. "India is a natural sugar supplier to Dubai whenever they have sugar," Ghurair said. 

He said the Indian raw sugar would be delivered basis 8,000 tonnes per day load. He declined to comment on the relative costs of freight from India and Brazil to Dubai, saying the numbers were constantly in flux.


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## Neo

Bushroda said:


> You are right Neo,
> 
> Rs. 3199.92 is nearly 80 billion dollars. This is from Central government. Apart from this amount respective State governments have their own development budget.



I figured that out happy Feet, thanks for uour confirmation.


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## Bushroda

*Chief Says G.E. Aims to Match the Growth Pace Set by India* 
By HEATHER TIMMONS, New York Times
Published: June 1, 2007

NEW DELHI, May 31 &#8212; Pressure to slim General Electric&#8217;s corporate portfolio at home has not stopped Jeffrey R. Immelt&#8217;s aggressive plans for expanding in emerging markets.

On Thursday, Mr. Immelt, G.E.&#8217;s chairman and chief executive, told executives here that India had &#8220;never offered us more potential than it does today.&#8221; 

G.E. plans to participate in the country&#8217;s &#8220;massive focus&#8221; on energy, he said, and will create a fund for infrastructure that could reach $1 billion. 

&#8220;This is the era of the developing world and of emerging markets,&#8221; Mr. Immelt said. As the United States economy cools, G.E. and other large multinational companies are shifting their focus to faster-growth parts of the world. 

Mr. Immelt&#8217;s latest trip to India comes as the country&#8217;s economy hit a new high. Figures released on Thursday showed that India&#8217;s gross domestic product grew by 9.4 percent in the year ended in March. Indian officials say they expect growth to continue above 9 percent this year.

&#8220;If we can grow at the same pace as the Indian economy, we can be a great company,&#8221; Mr. Immelt said. 

Last year, G.E. executives said that they planned to make India a major market and that revenue from India would more than quadruple, to $8 billion by 2010. Assets in India will also reach $8 billion by 2010, the company said. 

Mr. Immelt said Thursday that those goals were in sight: revenue in India in 2007 should be $3 billion, out of $175 billion at G.E., and by 2008 should reach $4 billion. G.E. should &#8220;blow right through&#8221; the target of $8 billion in Indian assets by 2010, he said. 

This year, G.E. will earn more revenue outside of the United States than in it. The company said in April that first-quarter profit rose 2 percent, in part because of a focus on selling goods and consumer services in Asia and the Middle East. Revenue in developing markets was up 14 percent in the quarter. 

Some analysts, notably Jeffrey Sprague of Citigroup, have suggested that G.E. spin off units, including NBC Universal and GE Money, to streamline the company and improve its stock performance.

Mr. Immelt did not address asset sales Thursday. Instead, he said the company would continue to focus on several &#8220;macro themes,&#8221; including emerging markets. 

A worldwide demand for infrastructure is &#8220;a stunning long-term trend,&#8221; Mr. Immelt said, and could require $4 trillion in overall global investment over the next eight years. Other macro themes include environmental technologies and opportunities created by changing demographics, like the rapidly growing need for health care. 

The visit by Mr. Immelt comes as United States and Indian officials are in the last stages of negotiating a deal to share civilian nuclear technology. The plan has been stalled several times, though an agreement could be struck this weekend when R. Nicholas Burns, an under secretary of state, comes to New Delhi for fresh talks.

Nuclear plant manufacturers, including G.E. and Westinghouse, are expected to be the chief beneficiaries of any deal, and G.E. has been lobbying both governments to agree to the plan. 

&#8220;India wants to do this, and the United States wants to do it,&#8221; said Scott R. Bayman, president and chief executive of GE India, after Mr. Immelt&#8217;s speech. &#8220;It makes so much sense. We&#8217;ll get it resolved,&#8221; he said. 

Mr. Immelt said he intended &#8220;ultimately to be a participant in the nuclear industry here.&#8221; 

G.E.&#8217;s presence in India dates back more than a century, and the company&#8217;s former chief executive John F. Welch Jr. is largely credited with promoting India as an outsourcing center. GE Money is one of India&#8217;s largest credit card lenders through a partnership with the State Bank of India, and the company counts India&#8217;s largest companies among its customers. 

Over the last 12 months, G.E. signed deals to finance a power plant for a cement company and supply Air India with environmentally friendly engines. It also said it planned to invest $2 billion in Indian real estate and about $250 million in infrastructure and health care projects in India. 

Despite the activity, India&#8217;s effect on G.E.&#8217;s revenue stream is still minimal. India provided less than 2 percent of G.E.&#8217;s overall revenue last year, at $1.9 billion. Even so, that represented a jump of 90 percent over 2005. 

G.E. expects to add 4,000 more employees in India over the next two years, bringing its total work force in the country to 17,000.


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## Bushroda

*Monsoon ceases to hold sway over India economy* 
Gulf News 

New Delhi: The early arrival of India's annual monsoon promises good crops and incomes for millions of farmers, but econ-omists say the rains no longer hold such a sway over Asia's third-largest economy as they did in the past.

The June-September rains are often defined as India's economic lifeline. The progress of the monsoon is keenly watched, for it used to hold the key to everything from crop output to inflation, consumer spending and economic growth.

But things are changing.

For years, India was largely a closed economy with agriculture and rural consumption the main drivers of supply and demand. A few decades ago, a bad monsoon could push the economy into recession. 

Agriculture is still a large part of the economy and with two-thirds of India's population of more than one billion living off farming-related activities, rural incomes are a major source of demand for everything from soap to compact cars.

Yet farming's contribution to economic growth is dwindling.

The agriculture sector's share of the trillion dollar economy has fallen steadily to about 22 per cent from 38 per cent in 1980 - a trend that appears to be accelerating.

"The broader impact of a poor monsoon on growth is definitely coming off," said Rajeev Malik, Singapore-based economist with JP Morgan Chase.

"In case of a severe drought it will take a toll, but not as bad as it used to be as in the past," he said.

India's performance in the 2006-07 financial year is a case in point.

The economy grew by a hefty 9.4 per cent, propelled by double-digit expansion in manufacturing and services, even as the farm sector grew by a paltry 2.7 per cent.

For the current financial year ending in March 2008 the central bank predicts growth of 8.5 per cent.

*Shrinking sector*

As India embraced free market reforms in 1991, the farm sector was eclipsed by services and manufacturing as production controls and tariff barriers were removed to open the economy to global supply and demand.

With vital industries such as software and pharmaceuticals powering India's growth now, investors don't have to worry as much as before whether a bad monsoon will hit village demand for motorcycles, shampoo or refrigerators.

"There is increasing de-linking happening between industry and the farm sector," said Shubhada Rao, chief economist with Yes Bank.

Rao said companies have started moving their manufacturing away from overcrowded cities, creating new opportunities for the rural population.

The contrast between manufacturing and farm performance was particularly telling in 2004 when farm output stagnated because of erratic monsoon rains but manufacturing expanded almost nine per cent.

It was possible because many villagers who saw their farm incomes hit by bad weather found work on a massive government highway scheme, which allowed them to maintain normal levels of earnings and spending. But for all its diminishing impact, the rural economy is still on investors' and economists' radar screens as poor rains can hit farmers' profits and hurt other sectors, analysts say.

With the majority of Indians still living in the countryside ups and downs in rural incomes still have a sizeable impact on consumption and growth, they say.

In fact, saturated urban markets mean that makers of consumer goods such as Hindustan Lever increasingly rely on rural demand to boost their sales.

"The influence of the farm sector on the economy has come down but rural demand still holds the key to overall growth and that is unlikely to change," said N.R. Bhanumurthy, economist in the Institute of Economic Growth.


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## Neo

Tuesday, 5 June 2007

*India economic zones get go-ahead * 

By Sunil Raman 
BBC News, Delhi 

India hopes the new zones will boost trade and exports 
The Indian government has given final approval for 24 Special Economic Zones (SEZs) to be created in the country. 

Big companies, including Reliance Industries and Wipro, are among those to have their plans given the go-ahead. 

The Commerce Ministry decision comes after a two-month freeze on approving SEZs, which have attracted protests from threatened farmers and landowners. 

Inspired by similar zones established in China, the tax-free enclaves are seen as a way to promote trade. 

Proposals for another nine SEZs were approved pending scrutiny by state government departments, while a further 13 applications were deferred. 

*Investment hopes* 

Among those projects given clearance are Reliance Industries' proposed 440 hectare site in northern state of Haryana near New Delhi, and another in Rewas in the western state of Maharashtra. 

The Rewas scheme, located in the Delhi-Mumbai corridor, will have about 200 high-speed freight trains linking trade zones with industrial complexes and ports. 

Industrial conglomerate Tata has had an SEZ approved for the eastern state of Orissa, while IT firm Wipro's proposal in the southern state of Andhra Pradesh has also been given the green light. 

Overall, Manmohan Singh's government has given approval for 111 SEZs in the past two years. 



> There is no clear policy yet on how companies should go about acquiring land
> 
> M K Vevu
> National editor, Economic Times



India believes that the zones will help provide employment and secure large amounts of foreign investment. 

The initiative has inspired huge interest among would-be developers but has also prompted resistance from rural communities in India, where farming is the mainstay of some two-thirds of the population. 

Recent government moves to clear land for a petrochemical centre in West Bengal led to conflicts killing 14. Other regions also saw protests. 

This, and other protests by farmers has led the Indian government to bring in a law that would ensure financial compensation and jobs to people who would be displaced by these zones. 

The 'Rehabilitation Policy' was to be introduced in Parliament earlier this year but differences between various ministries has delayed it. 

*'Commitment signalled' *

Prime Minister Singh has also faced opposition from the finance ministry and central bank over tax incentives to be provided to industries in these enclaves. 

The government "has still not resolved pending issues," says the national editor of The Economic Times, M K Venu. 

He added that by clearing 24 proposals, the government had "signalled its commitment" to SEZs but pointed out that it had not cleared any of the controversial schemes, which require acquisition of vast tracts of land. 

"There is no clear policy yet on how companies should go about acquiring land. That is a political issue and will take some time to sort out," Mr Venu pointed out. 

http://news.bbc.co.uk/2/hi/business/6723827.stm


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## Bushroda

*Coming Soon to India: Middle-Class Money*
*Fast-track India likely will be home to the world's fifth-biggest consumer market by 2025, a trend that should lift nearly 300 million Indians out of poverty*
By Brian Bremner

http://imageshack.us

Years of high-speed growth in the 8% range is transforming and enlarging India's middle class. By 2025, India is expected to emerge as the world's fifth-biggest consumer market as incomes and living standards continue to improve, according to a study by the McKinsey Global Institute. Nearly 300 million Indians are expected to escape poverty and India's middle class will leapfrog by a factor of 10-from 50 million today to roughly 583 million 18 years from now. 

Average annual household disposable income is projected to rise from $2,784 to $7,804 during the same period. If it does, this would be fantastic news for India's 1 billion-plus population that has experienced high poverty rates during most of the postwar era, not to mention local and foreign companies that will profit from the rise of India's supersized middle class. Here's a look at the big spending areas likely to be most affected.


_____________________________________________________________________________

*High Octane*

http://imageshack.us
Lured by this emerging market's vast potential, General Motors, Fiat, Honda, and other foreign carmakers have announced Indian investments valued at roughly $1.5 billion.

Right now, India's entire industry-local producers and transplants-collectively manufacture about 1.4 million vehicles a year. That's expected to double by 2008, and if it does, India will surpass Britain and Canada in total car production. The government hopes to see India auto sales jump from last year's $34 billion to $145 billion in 2016. In that case, the domestic auto industry could represent about 10% of India's gross domestic product. 

______________________________________________________________________________

*White Hot *

http://imageshack.us

India's searing mobile-phone market has the world's biggest handset makersâNokia, Motorola, Samsung, LG, and Sony Ericssonâscrambling to get a piece of the action. With good reason: The country's mobile subscriber base is now approaching 150 million and is expected to reach 450 million by 2010. Every year, 17 million to 18 million new users enter the market.

______________________________________________________________________________

*Entry Level*

Motorola launched its Motofone F3 in 2006 after researching the needs of thrifty rural Indians. The slim 9mm phone sells for as low as $32, making it one of the cheapest on the market. It has large fonts, a screen readable even in bright daylight, and a six-icon-based menu guided by voice prompts in regional languages. Another plus: The handset boasts a long battery lifeâ500 minutes of talk time and 300 hours of standby time.

______________________________________________________________________________

*Cool Threads*

http://imageshack.us

The Indian fashion industry has grown from humble beginnings at the start of the decade into a sizable business that is getting international attention. Young designers are mixing Indian fashion traditions with contemporary looks for men and women. Some, including Anamika Khanna, Rohit Bal, and Tarun Tahiliani, have picked up international accolades for their work. Indian designer wear generates only $40 million or so in sales, but is expected to grow briskly in the decade ahead.

______________________________________________________________________________

*Buying Power* 

http://imageshack.us

By 2015, Indiaâs consumer market will be as big as Italyâs, and will grow into the fifth biggest worldwide 10 years after that. Indiaâs expanding middle class has prompted big Indian conglomerates such as Tata, Reliance, and Bharti to expand into retail. Foreign brands such as Nike, Samsung, and Sony have tied up with local players, and Wal-Mart is entering the fray via an alliance with Bharti

_______________________________________________________________________________

*Quality Care*

http://imageshack.us
 
Foreigners in search of high-quality, affordable medical care love India, and the country is well known for global companies like Ranbaxy that make generic drugs. Yet as Indiaâs middle class grows, its health-care sector will have to expand much more to keep pace. 

_______________________________________________________________________________

*Passing Marks? *

http://imageshack.us

India needs a dramatic upgrade of its system of state universities and private colleges. True, the various Indian Institute of Technology campuses are world-class and have long turned the country's smartest kids into stars. But that is an exception, and competition for those slots is ferocious. A study last year by McKinsey concluded that only 25% of India-trained engineers and 15% of the system's finance and accounting professionals had the skills to work for a multinational company. Thatâs a problem if India is going to really leverage the talents of the world's largest pool of young people. Some 60% of India's 1 billion-plus population is below the age of 25. 


_______________________________________________________________________________

*Drink Break *

Spending on food and beverages represents about 56% of average household consumption, and foreign chains such as Starbucks view India as a critical emerging market in the decades ahead. 

_______________________________________________________________________________

*Bollywood Dreams*

Indiaâs Hindi-language film industry is the worldâs biggest in terms of volume and ticket sales, and Bollywood talent is starting to have appeal in foreign markets. Indians particularly love their musicals, and that has touched off a Bollywood ringtone craze that is also driving growth in the mobile-handset market. 

_______________________________________________________________________________

*Better Lives*

http://imageshack.us

*If Indiaâs high-speed economic growth rates stay on track, as is widely expected, nearly 300 million Indians are expected to escape poverty. While urban India is likely to experience the biggest income gains, rural Indiaâs average income growth per household is projected by McKinsey to accelerate from its 2.8% average over the last two decades to 3.6% over the next two.*


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## Bushroda

*G8 courts China, India*
The Standard, Hong Kong
Wednesday, June 06, 2007

China and India once waited for crumbs from the table of the world's wealthiest nations but at the G8 summit in Germany this week the two rapidly growing economies will be dining as near equals.
When Chancellor Angela Merkel welcomes the heads of the Group of Eight nations to the northern German resort of Heiligendamm today, they will be joined by the leaders of Brazil, China, India, Mexico and South Africa.

The G8 leaders will especially want to hear what President Hu Jintao and Indian Prime Minister Manmohan Singh have to say on the vexed issues of climate change and world trade.

Lalit Mansingh, a former Indian ambassador to the United States, said the Group of Eight "are being forced to recognize the new emerging powers.

"A lot of international economic reports - by Goldman Sachs and others - say the Chinese economy definitely and the Indian economy possibly will overtake that of the United States quite soon.

"So the invites to India, China, Brazil, etc, are a recognition of that global clout. It is also a recognition of the fact that the West will have to share power with new emerging centers."

The so-called G8 plus five process formally began at the 2005 summit in Gleneagles, Scotland, when British Prime Minister Tony Blair invited the heads of the five emerging economies to participate in the talks.

With a combined population of 2.4 billion people, China and India are huge, export-hungry markets for the world's biggest exporters such as Germany.

And as their burgeoning economies consume ever more coal and natural resources, any future global agreement on limiting global warming would be fatally flawed without their participation.

China's stunning economic growth has been achieved at a terrible cost to its environment.

Monday it unveiled its long-awaited national strategy for addressing climate change but insisted its economic development must come first.

Crucially, Beijing also insisted it would not commit to any caps on greenhouse gas emissions.

Merkel on the other hand has vowed to use the summit to urge her G8 counterparts to sign up to mandatory limits on emissions.

China's position is clear - the developed world must help it to cut pollution.

"The consequences of restricting the development of developing nations will be much more serious than the consequences of global warming," Ma Kai, China's top economic planner, told journalists Monday.

In a briefing on the G8 summit last week, Beijing however dismissed the suggestion that, mindful of its growing economic muscle, it will block initiatives at the summit.

"I don't think China will be a Mr No at the G8. We want to be a Mr Cooperation or Mr Partnership," an official said.

"As far as China is concerned, we are a developing country and will be for a fairly long time to come.

"But we hope in the future our cooperation with the G8 can be institutionalized and regular."

The other members of the "plus five" group have other agendas to pursue. For Brazilian President Luiz Inacio Lula da Silva a face-to-face meeting is promised in Heiligendamm with French President Nicolas Sarkozy.

South African President Thabo Mbeki prepared for his summit trip with talks last week in Pretoria with Blair. The wealthiest nations, Blair said, must make good on the promises they made at Gleneagles to massively increase aid to Africa.

Indian analyst Uday Bhaskar said the fact the G8 was making space at the negotiating table for the newcomers is a formal recognition that the current G8 lineup - Britain, Canada, France, Germany, Italy, Japan, Russia and the United States - fails to reflect the direction in which the world is moving.

"The emerging hexagon of relevant powers of this century are the US, the EU and Japan at level one and Russia, China and India on level two," said Bhaskar. "The invitation [to the emerging economies] is a formal acknowledgement of that."

AGENCE FRANCE-PRESSE


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## Bushroda

*Singapore Airlines to operate 50 flights to India per week*

Singapore Airlines will from June 24 operate eight times a week to Chennai, taking its services to India to 50 a week. 

"Our eighth service to Chennai (in a weeek), the launch city of our India operations, is a befitting way to commemorate our 50th flight to India," said CW Foo, general manager (India) of Singapore Airlines.

The new service will help boost its capacity by almost 14 per cent to the Tamil Nadu capital, the airline said. 

Singapore Airlines will operate a Boeing-777-200 aircraft with a two-class configuration of 30 Business class and 293 Economy class seats for this service, offering more onward options to several cities in the carrier's global network. 

Singapore Airlines has also introduced e-ticket services and an Internet check-in facility for Indian customers. 

The airline, which started operations to Chennai in 1970, operates flights to eight destinations in India.


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## Bushroda

*India: retail, farm sector must link up*

The booming, organised retail sector should have a link with the agriculture sector which would result in mutual development and generate maximum employment, said Governor T N Chaturvedi on Thursday.

Speaking after releasing âThe South India Retail and Realty Report: 2015 and beyondâ during the valedictory of - The Shop - South Indiaâs first retail event, Mr Chaturvedi said the organised retail should also think in terms of social responsibility and not just business profitability.

*Business model*

He stressed the need for evolving a business model that has a role for the smaller retail units in the unorganised sector.

Modern retail cannot remain cut off from the common man.
The survival of the small time village grocer and the neighbourhood thelawala in every by-lane of the country is just as important to Indiaâs economy as the sales figures of large business houses and modern shopping centres, felt the Governor.

*Upgrade, satisfy*

With earning youngsters having less of liabilities and high disposable incomes, they seek best of the products and services and the retail market have to upgrade and satisfy this consumer base, the Governor pointed out.

Mr Chaturvedi said as the organised retail in the South has crossed 4.9 per cent of the retail marker as against the national percentage of 4.6, the retail invariably deserves a special attention of policy makers in the South.
Earlier in the day, a âCEO Meetâ discussed the success stories of South based retailers.

One of the key issues addressed at the session involved the process of going national from being a strong regional player and other issues.


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## Bushroda

*Itâs Grrrrr8 (honest)*
From The Times
June 6, 2007

*As the G8 summit begins in Germany, Hugo Rifkind explains everything you need to know â and lots of stuff you didnât*

*A is for Angela Merkel*

Merkel, the German Chancellor, will be hosting her first G8 summit, in Heiligendamm, Germany. A Christian Democrat, and formerly known as competent, if rather drab, she reinvented herself to become Germanyâs first female Chancellor in 2005 by getting some highlights done and playing Angieby the Rolling Stones at her political rallies. Although she only narrowly beat Gerhard Schroeder, the incumbent, in that election, her popularity has subsequently grown. The G8 will be her biggest moment so far on the international stage, and her motto for the summit is âWachstum und Verantworting!â. This may sound like an expensive brand of stereo, but translates as âGrowth and Sustainability!â 

*B is for Bush* George W. Bush. That one. What with climate change almost guaranteed to be a major theme of the G8 summit, the US President last week infuriated the Germans and pretty much everybody else (except for loyal Tony Blair) with a surprise announcement of his own rather vague climate change proposals. Her thunder now somewhat stolen, Merkel is still hoping for a more concrete commitment from G8 members, which would ideally see them cutting their greenhouse gas emissions by 50 per cent by 2050. 

*C is for Countries* The members of the G8 are the UK, the US, Germany, France, Japan, Russia, Canada and Italy. People tend to forget about the last two in pub quizzes. 

*D is for Development* Expect much talk about the Millennium Development Goals: eight development targets agreed upon at the Millennium Summit in New York, in September 2000, to be achieved by 2015. Although more of a UN initiative than a G8 one (all 189 UN states signed the Mil- 

*E is for Education* Universal Primary Education is one of the MDGs (Millennium Development Goals). In much of Africa in particular, only half or fewer of all children complete primary school. On the plus side, as of 2004, 20 million more African children are attending school. To meet the goal, another 47 million must be enrolled by 2010. 

*F is for Formality* Technically, there isnât any. Donât be fooled by the suits, ties, armies of wonks and bottomless legions of aides and hangers-on. Unlike the UN or most other multinational bodies, the G8 is theoretically supposed to be an utterly informal meeting of national leaders. 

*G is for Gleneagles* The Gleneagles G8 summit of 2005 is the recent summit that most remember, thanks largely to Bob Geldofâs simultaneous Live8 concert. Various commitments were made to write off Third World Debt and boost aid. Two years, on (reckons Debt Aid Trade Africa, at data.org ) the UK and Japan are broadly on track with their commitments, and the US and Canada have increased aid, but by less than they promised. Germany and France have not increased theirs, and Italyâs has actually been cut. Nobody seems quite sure about Russia. 

*H is for Heiligendamm* Heiligendamm is the small Baltic beach resort where the G8 summit will be taking place. It was founded in 1793 by Friedrich Franz I, the Grand Duke of Mecklenburg-Schwerin, after a recommendation from his doctor, and is famed for its beautiful white classicist buildings. 

Within Germany, this white town by the sea is often known as Die WeiÃe Stadt am Meer. This means The White Town by the Sea. A literal folk, the Germans. 

*I is for India and China* Most estimates currently give China the fourth largest GDP in the world. India hovers at around number 10, but is the worldâs most populous democracy. It is thus a little strange, many feel (especially if they live in India or China) that neither has a place in the G8. Particularly as, in terms of GDP, the World Bank places Canada at number nine (below poor, neglected Spain) and Russia (shaky in the democracy stakes) way down at 14. 

So. This is where it all gets a bit confusing. For some meetings, the G8 includes India, China, Mexico, Brazil and South Africa, and is known as the G8+5. 

For others it sits without Russia, and is known as the G7. Similarly, there is also a G11, a G33, a J8 and a D8, there used to be a P8, and there are two entirely separate G20s. Try not to worry about this. 

*J is for Japan* Still the second largest national economy in the world, by quite a long way. 

*K is for Kosovo* A potential diplomatic flashpoint. In brief, Russia doesnât want Kosovo to become an independent state, and almost everybody else (bar the angry, angry Serbs) does. 

*L is for Leadership* The presidency of the G8 rotates between the member countries. In 2008 the summit will be in Japan , and in 2009 Italy. The UK has its next turn in 2013. 

*M is for Mortality* and also for Mothers Reducing child mortality and improving maternal health are two of the Millennium Development Goals. As of 2004 (reports the World Bank) large swaths of Africa and considerable chunks of Asia have a mortality rate among underfives of approaching one in ten. In parts of Africa, one mother dies for every 100 children born. 

*N is for Nukes* Iran and North Korea are the obvious problems on the summit table, but there is also the growing row between Russia and the US over proposed American missile defences in Poland and the Czech Republic. 

*O is for Origins* Surprisingly murky. The ball probably started rolling in 1974, when the US invited officials from the UK, West Germany and Japan to discuss the global economy. 

The following year, perhaps not entirely by coincidence, the neglected French seized the initiative, and invited the leaders of Italy, West Germany, Japan, the UK and the US to a summit. 

This began as the G6, expanded to become the G7 when Canada joined in 1976, and became the G8, with Russia added, in 1998. 

*P is for Poverty* Another Millennium Development Goal. 

By 2015, the aim is to have eradicated extreme poverty and hunger throughout the world. 

There isnât much chance of this. If current trends continue, the World Bank reckons, by then one in ten people will still be living on less than $1 a day. 

*Q is for Quantity* Between them, the members of the G8 represent an estimated 65 per cent of the worldâs economy. In global population terms, however, they represent a fraction of that. Particularly notably, there is not a single G8 member from the extremely populous southern hemisphere. 

*R is for Russia* Ah, Russia. According to one US foreign policy expert (Simon Serfaty, of the Centre for Strategic and International Studies), Vladimir Putin is âthe elephant in the roomâ. Russia has rumbling disagreements with the US over security, the EU over energy and the UK over shadowy events which may or may not have happened over tea in a London hotel. In a TV interview last week, George Bush was even moved to describe Putin as âmy friendâ. Things must be bad. 

*S is for Security* Currently, Heiligendamm is surrounded by 12 km (7 miles) of protective fencing, and a 2km terrestrial exclusion zone, with another exclusion zone out to sea. The site has been sealed against nonaccredited individuals since last Wednesday, roads and rail lines have been blocked off, barriers have been built out to the sea, and 16,000 police are on duty. Itâs like the beginning of a Die Hard movie. 

*T is for Transparency* As far as Germany is concerned, top of the G8 agenda, even above climate change, is the very unsexy issue of transparency in hedge funds. 

In essence (and quickly, before you doze off) German authorities are worried that the hedge fund industry is so huge, murky and opaque that it could destabilise the world economy. 

Angela Merkel is keen to force hedge funds to be more transparent, but has backed down slightly in the face of resistance from the UK, the US and Japan, who feel that things are just fine. Can you guess where most hedge funds are based? Indeed. The UK, the US and Japan. 

*U is for the Great Unwashed* By some estimates, there are as many as 100,000 protestors converging on Rostock, the nearest accessible city to Heiligendamm. 

They are environmentalists, squatters, anti-globalisationists, anticapitalists, antiwar activists and antimany other things. Many are currently living in huge temporary tent cities dotted around Heiligendamm, and some may even have brought soap. 

*V is for Vaccination* Combating HIV, Aids and malaria is yet another Millennium Development Goal, and was the subject of several pledges at Gleneagles. Tuberculosis is also a growing problem. Within Africa (says data.org) the provision of antiretrovirals to combat HIV has increased dramatically, although over 70 per cent of those who need them still arenât getting them. Meanwhile, 18 million nets and 23 million malaria treatments have been distributed. Polio prevention has been a particular success, with Niger and Egypt removed from the list of polio-endemic countries in 2006. Nonetheless, in cash terms, most G8 members are failing to meet their commitments. 

*W is for Women* Likewise, the Millennium Development Goals pledged to âpromote gender equality and empower womenâ. In terms of progress, this is a tricky one to measure. 

The World Bank monitors equality in education and equality in employment, and hopes to see equality throughout the former by 2015. Angela Merkel herself is the only female G8 leader, and the third in history, after our own Baroness Thatcher, and Canadaâs Prime Minister of five months in 1993, Kim Campbell. 

*X is for Xenophobia* When Russia headed the G8 in 2006, domestic xenophobia was a major issue. And thank God, because xylophones werenât, at all. 

*Y is for Young People* Not all of the young people gathering in Germany are wearing black jeans and hoodies with pictures of cannabis plants on them. Some are members of the J8, a junior G8 programme designed to âgive young people from around the world the chance to voice their opinions on global issues and raise their awareness of their role as global citizensâ. There ainât no party like a J8 party. Possibly. 

*Z is for Zimbabwe* Although Merkel has promised they will be discussed, the continuing problems in Robert Mugabeâs Zimbabwe are not likely to be a major issue at the G8 summit. Nonetheless, it does begin with a âZâ.


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## Bushroda

*Mission Mumbai: Rs12k crore set aside for city makeover*
Sandeep Ashar 
Wednesday, June 06, 2007 08:44 IST

_Disaster preparedness, malls are on BMC&#8217;s radar_

MUMBAI: Cleanliness and beautification drives, the upgrade of civic infrastructure, disaster preparedness, environment-friendly initiatives, and social welfare programmes will power Mumbai&#8217;s transformation&#8217;s mission in 2007. Presenting the Rs12,866 crore budget for the city on Tuesday, municipal commissioner Dr Jairaj Phatak said it was a &#8220;realistic budget that took the city&#8217;s priorities into account.&#8221; The Centre has added a few hundred crore rupees to the corpus. 

Mumbai residents may find it heartening that although the BMC has provided an additional Rs3,258 crore this year, there will be no tax rise. The civic infrastructure will be granted a sizeable chunk (43 per cent) of the outlay. Another Rs2,353.63 crore will be deployed to buttress social infrastructure such as hospitals and schools. 

The budget&#8217;s prime focus is on development initiatives such as the Mumbai Sewer Disposal Project-II, and BRIMSTOWAD that seeks to improve city&#8217;s storm water drains. But new and ambitious proposals, including the establishment of municipal malls at 10 locations and the commissioning of earthquake- and tsunami-risk assessment studies involving international experts, constitute some of the highlights of the budget. 

The BMC wants to replicate the success of private malls and has set aside Rs15 crore for its foray into the area. &#8220;The idea is to provide facilities such as like vegetable markets, fruit markets, provision stores, and departmental stores under one umbrella,&#8221; said Manu Kumar Srivastava, the additional municipal commissioner. Municipal hawkers will be accommodated in the malls.

While a major anchor like an Apna Bazaar store will be included in the plan to increase footfalls. Acknowledging that development endeavours will not succeed without the empowerment of the urban poor, the BMC has apportioned Rs1,608 crore to elevate the lot of the city's underprivileged. Refurbishing of the infrastructure in age-old gaothans, adivasi padas and koliwadas will be undertaken this year. 

Wholesale reforms were also proposed in the neglected education sector, including the provision of Re1 per day allowance to girl students for attending schools from this year. Other proposals include: financial assistance to bright girl students, initiation of 84 model English medium public schools, and the offer of incentives like free uniforms, school books, shoes, water bottles, and flavoured milk for 3.80 lakh students of municipal schools. 

In fact, the current education budget of Rs1,098.55 crore is Rs318 crore more than last year's provision. Other sectors that received substantial allocations include water supply and sewerage works (33 per cent), and roads and traffic operations (17 per cent).


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## Bushroda

This is probably the greatest piece of news for Mumbai  
____________________________________________
*Privately owned and operated local train in Mumbai soon*
7 Jun, 2007 l 0032 hrs ISTlDevraj Dasgupta/TIMES NEWS NETWORK

MUMBAI: The privatisation train is gathering momentum, quite literally. After years of talking about it, the ministry of railways has finally given Western Railway the green signal to invite private players to own and operate an air-conditioned local train in Mumbai. 

Over the years, more and more cities have been privatising their municipal services &#8212; from the sweeping of streets and garbage collection, to healthcare, water, power and even fire stations. But inviting the private sector to run a service that forms the very spine of life in a metro like Mumbai has a deeper significance. 

The train, to be run in partnership with coompanies which will own, maintain and operate it, will be introduced on a pilot basis on the 32-km Churchgate-Borivli section. The Railway Board has cleared the proposal. If things work to plan, the AC shuttle could be a reality by early next year, say sources. 

When the idea of an AC train was proposed from within the railways a few years ago, it was laughed off as unviable. 

The railways even turned down a similar proposal from the Maharashtra government citing the unmanageable 'super dense crush crowd' in the suburban section. Now, the railways has strategically decided to go the public-private participation (PPP) route. "If the railways does it on its own, there will be issues of crowd control, offering subsidised tickets and high capital expenditure on maintenance," said a senior ministry official. A private player, though, will have the option to price tickets at market rates, appoint additional staff to check ticketless travel and bear maintenance expenses by entering into a long-term contract with the railways.


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## Contrarian

Why has Neo's participation in this thread diminished since a while? 

Neo...i thought you lived for this stuff man. Why arent you posting?


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## Bushroda

*India Property 2007 is back by popular demand in Dubai & London*

*The Confederation of Real Estate Developers Association of India (CREDAI) and Maharashtra Chamber of Housing Industry (MCHI) have announced the dates of India Property 2007. Organized by the official body of the Indian Real Estate Industry, CREDAI and MCHI, this exhibition will be held at Dubai, Renaissance Dubai Hotel from June 14 â 16, 2007 and London, Olympia Conference Centre from July 20 â 22, 2007.*

[ClickPress, Wed Jun 06 2007] The Confederation of Real Estate Developers Association of India (CREDAI) and Maharashtra Chamber of Housing Industry (MCHI) have announced the dates of India Property 2007. Organized by the official body of the Indian Real Estate Industry, CREDAI and MCHI, this exhibition will be held at Dubai, Renaissance Dubai Hotel from June 14 â 16, 2007 and London, Olympia Conference Centre from July 20 â 22, 2007. 

This exhibition will be the 8th Property Show to be held in Dubai since 2002, and the 4th one in London since 2004, aims at attracting foreign investments from NRIs and other investors and users to explore the vast opportunities available, be it residential housing or commercial buildings or plots and bungalow, from the booming Indian real estate industry. 

Said Mr. Rajni S. Ajmera, President, CREDAI, âWith the boom in the economy, Indian Real Estate has emerged as a Global destination for worldâs top construction companies, architectural firms and allied industries seeing the huge growth potential that it offers. In line with the growing interest in Indian reality, these property shows facilitate an interaction between NRIs, reality investors and developers, all under one roof, wherein they get to know firsthand the types of properties available, loan options and other formalities required, in finally procuring their property back home.â 

Sharing his views on India Property 2007, Mr. Nainesh Shah, Chairman, International Exhibitions, MCHI, said, âIndians settled abroad are one of the most influential and prosperous communities in the global economic development and we are glad to provide them an opportunity of being part of INCREDIBLE INDIA â making of a success story, by investing in Indian Real Estate, which is today, the growth driver of the Indian economy.â 

According to Mr. J.S. Augustine, Co-Chairman, International Exhibitions, MCHI said, âThe interest levels amongst NRIs have increased many fold in the last 7 years. NRIs have benefited immensely through our exhibitions and have bought peace of mind by making the right choice. We are proud that we have played a key role in facilitating such a process for the NRI community at large and we strive for bettering this year on year.â 

Today, with the real estate in India booming and the governmentâs open door policy for inviting foreign direct investments into the country, there has been a spurt of Indian property fairs held abroad targeting NRIs there, to invest in properties back home. In this scenario, it becomes important to differentiate between Industry organized property exhibitions like the ones held by CREDAI-MCHI and the other property exhibitions held by fly by night operators, event companies, dot.com companies, organizers of trade shows, consumer shows, lifestyle shows etc. 

Industry organized property fairs offer NRIs a wide range of properties, from leading and established developers who have a more organized feedback mechanism and maintain a high standard in quality of construction and delivery. This is due to their responsibility as well as interest in the overall growth of the housing sector. Finally, an NRI gets 100% assurance on his investments and peace of mind whilst buying a property back home, at an official property exhibition.


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## Bushroda

malaymishra123 said:


> Why has Neo's participation in this thread diminished since a while?
> 
> Neo...i thought you lived for this stuff man. Why arent you posting?



His participation has only just dimished whereas your participation has actually gone to zero. C'mon man, post some stuff. I sometimes feel like I've hi-jacked this thread.


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## Neo

I've posted here but Happy Feet is keeping us updated now.


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## Bushroda

*Indian real estate to get $6 bn in FDI* 
VARUN SONI 
Posted online: Wednesday, June 06, 2007 at 0335 hours IST 

NEW DELHI, JUNE 5: Realty equity deals worth $30 billion (Rs 1.32 lakh crore) are in the pipeline for the current year across all Asian markets. One-fifth of these investments ($6 billion) will find their way into the Indian real estate market alone. This, however, is still lower than what Japan and China (expected to garner $9-10 and $6-7 billion, respectively), are expected to get. 

*According to a report by property consultants Jones Lang LaSalle on rising FDI in real estate, an estimated $10 billion foreign investment is expected to enter the Indian real estate sector in the next 12-18 months. *

For the most part of the 1990s, FDI inflow into the Indian real estate sector was at $2-3 billion a year. In 2004 -2005, it was recorded at $5.6 billion, and reached its peak in 2005 -2006 at $7.2 billion. 

More than a dozen overseas private equity firms such as Goldman Sachs, Morgan Stanley, JP Morgan and Blackstone Group are looking at investment opportunities in the Indian real estate market. 

Morgan Stanley recently closed a deal worth about $150 million with Oberoi Constructions in Mumbai. Meanwhile, the Nakheel Group in Dubai entered into a $10 billion deal with DLF for residential projects in Tier I and II cities. 

According to Abhishek Kiran Gupta, senior manager, research, JLL, there are many reasons why foreign investors are flocking to India. âAmong others, investors are attracted to the strong commercial property yields across metros, the high capital and rental value appreciation and the availability of quality supply in the country.Also, there has been an increase in confidence in Indiaâs growth story among investors, with the fast-growing economy set to become the second-largest economy ahead of the US by 2050,â he says. 

In fact, the growth of the real estate sector is expected to continue with strong IT/ITES, banking, financial services and insurance (BFSI) and corporate demand driving the office sector. The growth rate for the retail market is expected to be around 35%, with organised retailing currently at a mere 3%. 

In spite of entry barriers and low land bank availability, about 94% of capital investment in real estate is being deployed in Tier I cities of Delhi, Mumbai and Bangalore. âThis can be attributed to multiple reasons such as comparatively lower risk associated with these cities and developed Tier I real estate markets in terms of developers and occupiers. We expect total investments across Tier I cities to increase as a result of the growing demand in these locations in the next two to three years,â says Gupta.


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## Bushroda

*Malaysian Tourism Industry Skyrocketing with Contribution from India*
Press Zoom, Global News Service

*Malaysian tourism industry is proving to be an economy driver for the country. It is receiving tourists from all over the world, particularly India as disposable income of its citizens is rising stupendously.* 

(PressZoom) - According to a recent report âOpportunities in Malaysian Tourism Industry ( 2007-2009 )â by RNCOS, it has been observed that Malaysia tourism industry is growing by leaps and bounds in terms of both inbound and domestic tourism. As per estimates, the total tourist arrivals in the country will grow at a CAGR of over 6% from 2007 to 2011.

India accounts for a large section of the tourist arrivals in Malaysia. During January to July 2006, global tourist influx in Malaysia shot up by around 5.5% ( over 10 Million tourists ) while the share of Indian tourists alone jacked up by over 19% ( over 0.15 Million ). Due to this whopping number of tourist arrivals, India became the ninth largest market for Malaysian tourism industry.

The Malaysian Tourism Board has revealed the figures of Indian tourists visited Malaysia last year. According to these figures, 279,000 Indians went to Malaysia in 2006 and 400,000 are expected to visit this year. A survey of departing visitors showed that Malaysiaâs advancement, beauty, repute of being a shopping destination, easy accessibility and safety alongwith multitude of tourist attractions, including theme parks, golf courses, and eco-tourism offers value for money.

Arif Mohammed Noor, Tourism Director, Malaysia, reported that tourism industry is the second largest contributor to the economy of Malaysia. âGiven the large disposable income of people in India and the growing urge of a holiday destination, we are confident that the response from India will be tremendousâ, said Mr Noor, as reported by ASIA TIMES on May 4, 2007.

As per the RNCOS report âOpportunities in Malaysian Tourism Industry ( 2007-2009 )â, tourism is one of the most thriving industries in several countries around the world and Malaysia is no exception. Malaysian tourism industry generates a significant share of foreign exchange for the country ( it is second only to manufacturing sector ). Because of the immense benefits the industry is giving to the country, the Malaysian government is also committing its resources on its development. Since the past 12 years, the industry has been promoting its tourism industry both at local and international level through specifically engineered promotional campaigns.

The market research report provides a detailed analysis of tourist arrival ( both Intra and Extra ASEAN ), inbound and outbound tourism, expenditure statistics, medical tourism landscape, transportation, accommodation situation in the country, etc.


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## Bushroda

*GCC investment in india 'poised to grow'*
Gulf Daily News

KUWAIT: The Kuwait Investment Company (KIC) is forecasting a substantial increase in GCC investment in India over the next three years. 

A majority of this investment will be focused on the real-estate sector in the country, which is poised to grow by over 700 per cent in the next 10 years, says KIC.

"According to reliable research, the transactions in the Indian real-estate market are expected to grow from the $14 billion to $102 billion in the next 10 years, said KIC asset management division assistant general manager Raed Al Saleh.

" This growth is being driven by favorable demographics, growing purchasing power of the over 200 million strong Indian middle-class, increased levels of professionalism in the real estate sector and the favorable Foreign Direct Investment (FDI) related reforms initiated by the government to attract global investors." 

"During the last couple of years, several large institutional investors have been making high value investments in India and we expect to see a steady rise in such investments." 

Energy City India (ECI), a project by Bahrain-based Gulf Finance House, is the second Energy City in a series of energy focused business clusters planned across the Middle East and Asia.

It will occupy a prime site of 600 acres in Navi Mumbai (New Mumbai), the master-planned, satellite city to Mumbai, the financial and business hub of India. 

The project will be located within a few kilometres of Navi Mumbai's upcoming new international airport, which upon completion will be both the largest and busiest in Asia.

The project site is also located along the Mumbai-Pune expressway, which is being developed by the Government as a key business corridor.

"The Energy City model has proven to be immensely successful, with its flagship project Energy City Qatar, being almost completely sold out," said Mr Al Saleh. 

"Having been associated with GFH on the Energy City Qatar project, we are glad to be extending our partnership to Energy City India and the $395 million Energy City India equity raising now offers regional investors with an excellent opportunity to benefit from the high growth figures of the Indian economy."

The private placement initiative, which is currently under way, is open to both institutional investors and individuals and has a minimum subscription level of $250,000, with subsequent investments in multiples of $50,000. 

The Energy City cluster concept provides a complete business infrastructure to both local and foreign oil and gas producers, as well as downstream refiners and producers and businesses involved in shipping, energy trading and support services. 

The first of these business clusters, Energy City Qatar, was announced in March last year and is being developed in the Lusail area of Doha in Qatar.

GFH raised over $500m from regional investors to fund the development of the Qatar project's infrastructure.

The project has achieved its initial targets and is now progressing towards the construction of site infrastructure ahead of construction of the buildings.


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## Bushroda

*eThekwini signs MoU with India's business-leaders*
BuaNews, South Africa

The eThekwini Municpality has signed a Memorandum of Understanding with the Confederation of Indian Industry (CII), sealing their commitment to work together to promote the interests of the manufacturing industry.

"The CII is a powerful voice representing some of the biggest conglomerates in the world. This memorandum of understanding will solidify the relationship that we share with Indian Industry," said Deputy Mayor, Logie Naidoo at the signing late last month.

Mr Naidoo is also Chairperson of the city's Economic Development Committee.

The focus is on attracting foreign direct investment that would grow economy of both our countries, and empower and integrate Small, Medium and Micro Enterprises (SMMEs) in the manufacturing industry.

Shipra Tripathi, Director Head Africa, CII at the signing of the Memorandum of Understanding said: "The signing of this Memorandum of Understanding is going to strengthen the economic tiers between eThekwini and the Confederation of Indian Industry.

"This relationship will help a lot of SMME's and emerging businesses and ensure that Indians learning and knowledge of business is translated into a plan of action for South Africa and eThekwini Municipality."

The intention is to position eThekwini on the manufacturing map of the world and to develop manufacturing advisory centers where manufactures could go to for assistance and advice.

Both parties undertook to:

 strive towards the development of direct contacts and partnerships between business communities and will assist in the identification of potential partners through the organisation of business seminars

 jointly develop Manufacturing Advisory Centres and organize training programmes and workshops on a continued basis to promote mentorship, capacity building and skills transfer and 

 enhance the productivity and efficiency of small business in the Municipality by conducting training and carrying out Consultancy. 

The aim is to achieve Manufacturing Excellence and overall business development in the Municipality.

Funds have been earmarked by eThekwini for the development of the Manufacturing Advisory Centres and a Centre for Manufacturing Excellence. 

The CII would serve as an advisory for the effective use of the Fund and will also identify and promote special schemes of relevance to the manufacturing sector in the Municipality.

The CII works to create and sustain an environment conducive to the growth of industry in India, partnering industry and government through advisory and consultative processes. 

Founded over 111 years ago, it is India's premier business association, with a direct membership of over 6300 organisations from the private as well as the public sectors, including small to medium enterprise.

It has indirect membership of over 90 000 companies from around 336 national and regional sectoral associations. - _BuaNews_


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## Bushroda

*Vedanta mounts $1.6bn power call*
By Tom Stevenson
The Telegraph, UK
Last Updated: 1:02am BST 06/06/2007

Copper and zinc miner Vedanta Resources is raising $1.65bn (Â£829m) through a share issue in the United States and Japan by its main subsidiary Sterlite Industries. The proceeds of the offer will be used to fund a move into power generation and to buy back a minority shareholding in its zinc business from the Indian government.

A company spokesman said the company was raising the funds through Sterlite because it is the Mumbai-quoted subsidiary which holds an option to buy out the Hindustan Zinc minority.

Vedanta had indicated that it would raise new funds last August when it said it was planning a strategic move into India's fast-growth power generation market. Since 1990, India's power generation capacity has increased by 130pc as the country attempts to expand its creaking infrastructure to keep pace with its blistering economic growth.

Last week, government figures showed that the Indian economy expanded by 9.4pc in the year to March. India has been plagued by power shortages and the situation is expected to get worse, with consumption forecast to rise by 233pc over the next 25 years.

The 125m shares in the Sterlite offer represent 18pc of its shares in issue and will dilute Vedanta's stake from 76pc to 63pc.

Vedanta's shares rose 5p to Â£15.55 yesterday - capitalising the group at Â£4.47bn- more than five times the 270p low they reached after a disastrous flotation in 2003. Questions about the company's corporate governance and the power wielded by 53pc shareholder and chairman Anil Agarwal saw the shares slide from a flotation price of 390p.

Soaring metal prices and strong results have seen them recover sharply.

Revenues rose by 76pc in the year to March to Â£6.5bn on the back of buoyant demand from China and India.


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## Contrarian

Bushroda said:


> His participation has only just dimished whereas your participation has actually gone to zero. C'mon man, post some stuff. I sometimes feel like I've hi-jacked this thread.



Your doing such an excellent job mate that i feel there is no need for me to post 

Plus, i have exams, etc, so i'v been lo on the forum for a while now. Will resume the cocaine induced posting pattern soon, when the exams are over.

Anyways, Neo's postings are equally important. It represents the views in the Pakistani media. So therefore, Neo should post a lot as well.


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## Bushroda

*Kingfisher to Order More Airbus A380s*
Bloomberg

June 6 (Bloomberg) -- Kingfisher Airlines Ltd., the only Indian customer for the Airbus SAS A380, plans to order five more of the superjumbos this month, becoming the latest carrier to increase orders for the delayed aircraft, two people with direct knowledge of the matter said. 

The carrier also intends to order five A340-600s and five A350s at this month's Paris Air Show, said the people, who declined to be identified because the order has yet to be announced. The entire contract is valued at about $3.6 billion based on list prices. 

The orders are a boost for Airbus, whose project to create the world's biggest passenger jet has fallen two years behind schedule and caused three consecutive losses at parent European Aeronautic, Defence & Space Co. Kingfisher, a two-year-old carrier founded by billionaire Vijay Mallya, will use the 555- seat A380s to challenge Air India on routes to New York. 

``The bet on this aircraft is that it will bring down fares on routes between key cities,'' said Anish Desai, an analyst at ABN Amro Asia Equities Ltd. in Mumbai. ``That would help spur demand.'' 

Airbus will announce orders at the show for ``every type'' of plane it makes, Chief Executive Officer Louis Gallois said yesterday. Nandini Verma, a spokeswoman for UB Group, which owns Kingfisher, declined to comment. 

*A380 Orders *

Kingfisher ordered five A380s and took options for five more in June 2005. The carrier plans to operate daily flights from New Delhi and Mumbai to New York with the planes. It expects to get its first one in 2011, Mallya said in May. 

``Kingfisher has to buy new planes to add more routes and increase its market share,'' said Amitabh Chakraborty, a Mumbai- based analyst at Religare Securities Ltd. ``There is a tremendous amount of latent demand in India that needs to be serviced by the carriers.'' 

The airline would be the fourth A380 customer to place additional orders for the plane. Emirates Airline, the largest A380 customer, ordered four more in May, raising its backlog to 47. Singapore Airlines Ltd., set to be the first A380 operator, and Qantas Airways Ltd. both raised their orders last year. 

Airbus has firm orders for a total of 160 A380s from 14 customers, Chief Commercial Officer John Leahy said May 8. 

A380 deliveries have been delayed because of problems related to the installation of the superjumbos' 300 miles (480 kilometers) of wiring. EADS will spend 2.5 billion euros ($3.38 billion) fixing the plane. Shares of EADS fell 0.3 percent in Paris to 22.83 euros. The shares have fallen 12.5 percent so far this year. 

*Challenging Boeing *

Winning an A350 order from Kingfisher would also boost Airbus's bid to challenge Boeing Co.'s 787 Dreamliner. The Toulouse-based planemaker has 13 firm A350 orders compared with 567 for the Dreamliner. The Boeing model will begin commercial service in 2008, five years before the A350. 

Qatar Airways pledged to order 80 A350s last month. It expects to sign the final deal, valued at $16 billion at list prices, at the Paris air show, which starts June 18. Singapore Airlines has also said it will order 20 A350s, though it hasn't signed a firm order. Airlines usually receive discounts for large orders. 

Kingfisher, which began flights in May 2005, now operates 30 planes. It aims to win customers from Jet Airways (India) Ltd., the nation's biggest domestic carrier, and state-run Indian Airlines Ltd. with new aircraft and in-flight entertainment systems. 

Kingfisher's parent, UB Group,, also agreed to buy a 26 percent stake in Deccan Aviation Ltd., India's biggest low-fare airline, on May 31, because of rising demand in the world's second-most populous country. India's air travel market may grow sixfold to 180 million passengers by 2020, the government said in April. 

*Indian Growth* 

Seven airlines, including four low-fare carriers, have started flights in India in the past four years and five more have sought approval to tap rising demand for travel in the world's second-fastest growing major economy. 

``It's really just the beginning of the Indian aviation sector,'' said Peter Harbison, managing director of the Centre for Asia-Pacific Aviation, in a phone interview from Sydney. ``Despite everything that has happened in the last two to three years, we have only just started to scratch the surface.'' 

*Indian carriers have ordered more than 450 planes costing $30 billion from Airbus and Boeing in the past four years to tap rising demand for air travel. Airlines in the country may buy another 1,110 planes valued at $105 billion by 2025, Airbus said Dec. 7.*


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## Bushroda

Neo said:


> I've posted here but Happy Feet is keeping us updated now.





malaymishra123 said:


> Your doing such an excellent job mate that i feel there is no need for me to post



Thanks Guys, Its just that I feel more comfortable in posting news than actually discussing a topic which needs an analyzed reply & serious input of thoughts though I do participate in discussions on occasions when I have time in my hand.



malaymishra123 said:


> Plus, i have exams, etc, so i'v been lo on the forum for a while now. Will resume the cocaine induced posting pattern soon, when the exams are over.



I wish you all the very best for your exams & hope that you do great. BTW, what are you studying?


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## Contrarian

Computer Engineering


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## Bushroda

*First-ever futures trade in Indian rupee launches today on Dubai bourse*
Matthew Brown (Bloomberg)
LiveMint.com, Wall Street Journal

*The market is outside the jurisdiction of the Reserve Bank of India, which places curbs on trading in the rupee*

Dubai: The Dubai Gold & Commodities Exchange (DGCX) will on Thursday begin offering the worldâs first exchange-traded futures contracts in Indian rupee, helping companies and investors hedge against risks.

The contracts, linked to the future value of the rupee and settled in euros, will trade in Dubai, the United Arab Emirates, David Rutledge, a director at DGCX, told reporters in Dubai on Wednesday.

The market is outside the jurisdiction of Indiaâs central bank, which places curbs on trading in the rupee, he said.

âWe think there is a real commercial need for this product,â Rutledge said. âAnyone involved in international trade with a rupee currency riskâ might be interested, he said. A futures contract is an obligation to buy or sell a commodity at a set price for delivery by a specific date.

Trading on a futures market is a more transparent alternative to the so-called non-deliverable forwards (NDF), which are derivatives contracts arranged by banks.

Trading in such rupee-based contracts averaged about $500 million (Rs2,050 crore) a day in the second quarter of 2006, according to the Bank for International Settlements in Basel, Switzerland.

The rupee climbed 8.8% this year on increased capital flows as Asiaâs fourth-biggest economy expanded at the fastest pace in almost two decades.

Derivatives are financial instruments derived from stocks, bonds, loans, currencies and commodities, or linked to specific events like changes in the weather or interest rates. 

Forwards are agreements to buy assets at a later specified date. An NDF is typically settled in dollars and involves no physical exchange of other currencies.

The DGCX contract, to be traded on Dubaiâs two-year-old commodities exchange, will compliment the NDF market, Rutledge said. Dubai is Indiaâs third biggest trading partner.

âThe advantage of an exchange-traded contract is that it is accessible at a low cost, and is transparent,â Rutledge said.

Banks offering NDFs âcan hedge some riskâ through the DGCX contract, he said. âIt will be easier for them to offer NDFs.â

DGCX is a joint venture between the Dubai Multi Commodities Centre, Financial Technologies India Ltd and Multi-Commodity Exchange of India Ltd, according to the DGCX website.

Its first product was a gold contract, which began trading in November 2005, and has since been followed by silver, currencies, including the pound, euro and yen, and fuel oil. DGCXâs steel futures contract will debut on 27 June.


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## Bushroda

*Brazil, India Aim To Boost Trade Fourfold By 2010*
Ruth David, 06.06.07, 12:50 AM ET
FORBER, NY

Itâs all about the money, honey. On a three-day visit to India, Brazilian President Luiz Inacio Lula da Silva and key officials here set a target of quadrupling bilateral trade by 2010 to $10 billion a year. 

With the economies of both countries growing at a brisk pace, such goal-setting was to be expected on this visit, for which Lula was accompanied by a team of 100 officials. Media reports emanating from Brazil called the India trip the âmost important visitâ of the year for the Brazilian leader given their increasingly coordinated stands on global trade and environmental issues. This is his second visit to India in three years. 

India-Brazil trade amounted to $2.4 billion in 2006. â[The $10 billion target] is perfectly feasible if we work to achieve the full potential of our two economies,â Lula told reporters in New Delhi. He also wants more Indian businesses, which are aggressively expanding abroad, to set up bases in Brazil. Officials said he met the heads of Indian firms keen on doing business in his country. 

Bilateral trade and other ties have strengthened recently, helped by import tariff cuts on both sides. But commerce between the two last year still accounted for less than 1% of each countryâs global trade. 

Brazilian officials have expressed unhappiness in the past about Indiaâs reluctance to open its market to farm imports, despite slow agricultural growth rates within the country. 

Indian Commerce Minister Kamal Nath said Brazil is attracting Indian investment interest in biotechnology, technology and pharmaceuticals, with companies like Tata Consultancy Services, Ranbaxy and Dr. Reddyâs Laboratories making a push into the Brazilian market. 

One of the highlights of the trip was the launch of a CEO forum to boost business between the two countries, with 15 top corporate honchos from each country. Tata Group Chairman Ratan Tata will head the Indian side while Petrobras CEO JosÃ© Sergio Gabrielli will lead the Brazilian contingent.

India and Brazil have also shown a united front on trade issues at the WTO. Both countries are pushing for permanent membership at the U.N. Security Council. Lula stressed how crucial the nations are in the new world economic order. âBig countries have to sit and bargain with us ... we do not need lessons, we can teach them,â he was quoted as saying.

Ahead of the Group of Eight leading powersâ meeting in Germany this week, the Brazilian and Indian leaders said they were united in their approach on the key issue of climate change. Developing nations argue that rich countriesâ production patterns are the key contributors to global warming, and asking developing economies to cut emissions will hamper growth.

Lula held talks with Prime Minister Manmohan Singh on strengthening ties in civilian nuclear energy and defense and reviving deadlocked talks on the Doha round of negotiations at the WTO, according to a joint statement from the Brazilian and Indian governments.

India wants Brazilâs support at the Nuclear Suppliers Group that regulates trade in nuclear fuels. The global group has to clear New Delhiâs proposed nuclear pact with Washington. 

Both sides signed seven agreements in fields ranging from renewable energy to space cooperation. The key business deal announced during the visit was an agreement between Indiaâs state-run Oil and Natural Gas Corp. and Petroleo Brasileiro (nyse: PBR - news - people ), or Petrobras, to swap interests in oil exploration blocks. This will mark Petrobasâ entry into the Indian market.


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## Bushroda

*Alstom seeks role in rail network upgrade* 

NEW DELHI, JUN 6: French rail transport equipment firm Alstom on Wednesday sought participation in the modernisation and expansion plans of the Indian railways as a JV partner. 
âWe are committed to India and would like to participate in the modernisation and expansion plans of the Indian railways,â Alstom transport President Philippe Mellier said ahead of his meeting with railways minister Lalu Prasad. 

Mellier, who had also high speed trains on his agendra, said Alstom had carried out and executed big rail infrastructure projects across the world. âWe have developed solutions and have the experience and capabilities to manage such projects and minimal costs,â he said. 

On the public-private partnership (PPP) funding method, he said, âwe are open to it and possess enought experince to handle such projects.â 

âPTI


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## Bushroda

malaymishra123 said:


> Computer Engineering



Thats Great. You belong to the same discipline as I do.


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## Bushroda

*Govt to sow more FDI in agri sector*
AMITI SEN
TIMES NEWS NETWORK[ THURSDAY, JUNE 07, 2007 01:02:24 AM] 

NEW DELHI: The Centre is planning to further ease FDI norms for agro-processing and agri-infrastructure. It is considering steps like providing access to foreign funds through external commercial borrowings (ECBs), facilitating diversification and new projects by exempting the sector from the stringent Press Note 1 rules and expanding the list of farm activities where FDI is allowed directly. 

These moves, besides boosting foreign investment in the farm sector, are also expected to give a leg up to the supply-side management in retail. At present, 100% FDI in agriculture is limited to activities like floriculture, horticulture, seed development, animal husbandry, pisciculture, aquaculture and cultivation of vegetables and mushrooms, under controlled conditions. 

An official source told ET that the Centre was keen on taking steps to increase the investment flow in agro-processing and agri-infrastructure as India held a lot of unrealised potential in the sector. 

âInter-ministerial discussions are on to finalise a package to further boost investments in the sector. While all ministries and departments are unanimous on the need to increase investments, the finer points are being worked out,â the official said. 

The rationale behind the governmentâs ECB move is to increase fund flow into the sector. This would allow investors to take advantage of the lower interest rates in international markets. âThere are just 1,500 refrigerated trucks in the country while we require 15 lakh such trucks. There is a need to put in a lot of money in the sector, especially in agri-infrastructure,â the official said. 

Incidentally, an estimated 30% of total fruits and vegetables production in India goes waste due to lack of storage and transportation facilities. And only less than 5% is processed. 

Also, for wooing existing foreign investors into investing in more areas, the government may scrap Press Note 1 in agriculture in line with the IT sector and venture capital rules. Press Note 1 requires the foreign investor to take the Indian partnerâs permission before setting up a company in the same line of business. 

Similarly, the list of activities, which was opened up for foreign investment under controlled conditions last year, might also be expanded. âWe have not yet decided on what might be added. The decision will be taken soon,â the official said. The review of FDI guidelines is expected to be announced in the month-end or early next month.


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## Bushroda

*Bharat Petroleum Expects Profit to Triple by 2010*
AGENCIES[ WEDNESDAY, JUNE 06, 2007 05:20:20 PM] 

NEW DELHI: Bharat Petroleum Corp., India's third-biggest state-run refiner, expects net income to surge more than threefold by 2010 as a new refinery is completed and sales rise to a record. 

The refiner is ``on track'' to meet its target of increasing profit at twice the pace of fuel sales by the year ending March 2010, Chairman Ashok Sinha said in an interview at the refiner's Mumbai headquarters yesterday. That indicates a profit of 62 billion rupees ($1.5 billion), based on Bloomberg's calculations from 18.05 billion rupees reported last month. 

Bharat Petroleum will boost output to meet energy shortages in the world's second-fastest growing major economy. India's fuel imports rose 30 percent to 17 million metric tons in the year ended March 31 and a shortage of natural gas has shut about 5,000 megawatts of gas-fired power generation capacity. 

"I don't have to go looking for a market. I'm just meeting customer demand,'' Sinha said. "We're on track to meet the target'' for profit growth. 

Earnings will be boosted by a 25 percent increase in refining capacity and a fivefold jump in natural gas sales, he said. 

'Outperform' 

Credit Suisse's research analysts Sanjay Mookim and Prashant Gokhale today initiated coverage of Bharat Petroleum by rating the share ``outperform'' and recommended that clients buy the stock. A note to clients set a 436-rupee price target for Bharat Petroleum over 12 months. 

Bharat Petroleum's shares fell 7.95 rupees, or 2.3 percent, to 342 rupees on the Bombay Stock Exchange at 1:04 p.m. local time today. The stock has gained 1.8 percent this year, lagging behind a 5 percent rise in the Sensitive Index. 

The company's expansion plan began in 2005 when Bharat Petroleum set a target of increasing profit fourfold and doubling fuel sales by 2010, Sinha said. 

"We need to grow because the economy is growing and so is energy demand,'' Sinha said. "We want Bharat Petroleum to get into new businesses and grow. In every sphere of the energy business there is demand, there are growth prospects.'' 

India's economic growth will boost the nation's energy demand by at least 6 percent annually in the next five years, helping the company justify its biggest-ever expansion plan, Sinha said. India's economy expanded at 9.4 percent last year, the fastest pace in almost 20 years, and more than the government's initial estimate of 9.2 percent. 

*Fuel Output* 

Bharat Petroleum plans to cut at least 10 billion rupees of costs a year by improving ``supply-side management,'' he said, without elaborating. 

The company expects to start oil and gas production by 2010. Sinha said. Bharat Petroleum owns stakes in 15 oil and gas areas. ``We hope to make a strike,'' he said. ``That will help in boosting our revenue.'' 

The refiner plans to boost fuel sales by about 10 percent this year, a similar increase compared with last year's growth. It will expand fuel retail outlets by 500 from 7,800 to meet demand. India's fuel sales may grow by about 7 million tons every year for the next five years, said Sinha. 

The nation's fuel sales rose to 111.7 million metric tons in the year ended March 31 from 106.7 million tons a year ago, led by the highest growth in sales of diesel in 10 years and gasoline in four years, according to data released by the oil ministry on April 13. Sales of diesel, which make up 40 percent of the total, rose 7 percent to 42.9 million tons. 

The company will spend 30 billion rupees this year. The funds will help Bharat Petroleum upgrade existing plants in Mumbai, and Kochi in the south and build a new refinery in central India. 

The company's total outstanding debt as of March 31 was 85 billion rupees and may increase by about 20 billion rupees this year, partly boosted by borrowings required to fund the projects. As of March 31, the company's debt was equal to its equity, Sinha said.


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## Bushroda

*India tops global consumer index*
Daily Times, Pakistan

HONG KONG: Consumers in India are the most upbeat in the world while consumer confidence in Hong Kong is at an all-time high, bucking a dip in global sentiment from six months ago, a survey by The Nielsen Company showed on Wednesday. Scandinavians were also bullish, while Japanese, South Koreans and Hungarians were among the most pessimistic consumers, according to the survey, which gauges consumersâ outlook for the next 12 months. 

Forty percent of consumers globally considered the next 12 months a good time to buy things, but in India, Hong Kong and Scandinavia that figure rose to more than 60 percent. Consumer sentiment in the United States, the worldâs biggest economy, dipped two points from a previous survey taken in November to 106. However, that was still better than most countries and on a par with China, whose score was unchanged. 

The Nielsen Companyâs Global Consumer Confidence Index scored an average reading of 97 points, down slightly from 99 in the November survey. Readings are based on a series of questions to consumers, with a maximum possible score of 200 points. 

The survey, conducted in the last two weeks of April, polled more than 26,000 Internet users in 47 markets worldwide. 

India came first with 135, followed by Norway on 132 and Denmark on 127, although all three scores were down 1-2 points from six months ago. 

Hong Kong ranked fifth with Vietnam on 118, just behind New Zealand on 120, but Hong Kongâs score surged 7 points from six months ago to a record high and marked the biggest jump in confidence of all 47 markets. Swedenâs score rose 6 points to 107. 

Hong Kong consumers have been buoyed by rising wages, a strong stock market and a drop in unemployment to an 8-year low of 4.3 percent. 

Neighbours South Korea in contrast came bottom of the ranking, scoring just 50 and down six points from the previous survey. Confidence in Japan also dropped, by 3 points to 68, despite signs of an improving economy. 

Taiwanâs reading fell five points to 75. 

Hungary and Portugal were close to bottom with scores of 66 and 51, respectively. Hungaryâs reading fell 9 points from six months ago while Portugalâs slumped by 14 points. 

Thailand suffered the biggest drop in consumer confidence, by 15 points from six months ago to 92. reuters


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## Bushroda

*South Asia and the Asian resurgence*
ASIAN TRIBUNE, Thu, 2007-06-07 02:18 
By Eduardo Faleiro

The Asian resurgence is one of the most significant developments of our time. The rise of Asia began with the extraordinary economic progress of Japan in the 1950s and 60s; was followed by the remarkable advance of the Asian Tigers (Hongkong, Taiwan, South Korea and Singapore) and other countries of South East Asia; and now, the impressive growth of China and India. 

The Twenty First century will reportedly be the Asian century just as the Twentieth was the American century and the Nineteenth the European century. *By 2050, China is expected to be the largest economy in the world and India the second largest.* By that time Asia might hold seven of the ten leading national economies. The Asian Development Bank projects Asia as a region that will achieve an average growth rate of 7% this year compared to the global economic growth forecast of 3.3%.

Samuel Huntington in his seminal work âThe Clash of Civilizations and the remaking of the World Orderâ perceives the ascendancy of Asia in contrast to the decline of the West and attributes the latter to low economic growth, stagnating population, declining savings rates, huge Government deficits and in many Western countries including the United States, social aspects such as low work ethics, family decay, drugs and crime. At present however, the West is overwhelmingly dominant. Western economies are still growing and the West is still the leader in the field of science and technology. 

Neither the rise of Asia nor the decline of the West are irreversible. President George Bush in his State of the Union Address last year remarked âin a dynamic world economy we are seeing new competitors like China and Indiaâ¦ America should not fear our economic future because we intend to shape itâ 

In the Huntington thesis, Western strategy to maintain and strengthen its global supremacy is focused on Euro-American unity, it exploits differences among non Western nations and attempts to develop common interests with what it calls âswing civilizationsâ which are âmajor actors in world affairs likely to have ambivalent and fluctuating relations with the West and its challengersâ such as Japan, Russia and India. Western supremacy is sought to be safeguarded through a three pronged strategy: (i) a globalised economy which the West dominates; (ii) non-proliferation of nuclear weapons and W.M.Ds which should be exclusively controlled by Western powers; and (iii) protection of the cultural and ethnic integrity of the Euro-American societies by drastically restricting the number of immigrants and refugees from non European countries.

Western strategy to sustain it pre-eminent position also involves defining its interests as the interests of the âworld communityâ, an euphemism which is meant to give global legitimacy to actions reflecting the interests of the United States and other Western Powers. Hence, democracy is promoted but not if it brings Islamic fundamentalists to power; non proliferation is preached to Iran and North Korea but not to Israel; human rights are an issue with China but not with Saudi Arabia.

South Asia witnesses increasing economic progress with India leading. The challenge faced by this region is to sustain a high rate of growth whilst making economic development more inclusive to achieve a faster reduction in poverty, illiteracy and deprivation. Regional cooperation is a pivotal element for prosperity in South Asia.

The South Asian Association for Regional Cooperation (SAARC) was created in 1985 to promote economic development and social progress in South Asia through regional cooperation. A Summit meeting of SAARC was held in New Delhi last month. The most significant outcome was the signing of the South Asia Free Trade Agreement (SAFTA). Effective implementation of SAFTA is likely to accomplish the full economic and strategic potential of South Asia. *The establishment of the South Asian University is another concrete achievement of the Summit. The main campus of the University will be located in India whilst the Faculties will be spread through all the member countries.*

At the Summit, Prime Minister Manmohan Singh announced duty free access into India of goods from the least developed countries (LDCS) of SAARC- Bangladesh, Bhutan, Nepal, Maldives and Afghanistan. He also announced a liberalized visa regime for students, teachers, journalists and persons from the region seeking medical treatment in India. 

India holds the chairmanship of SAARC until the Summit next year. Regional cooperation need not be hindered by bilateral controversies and contentions. The Government of India should now endeavour to turn SAARC into an effective instrument of regional synergy and cooperation within the year.


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## Bushroda

*Online Travel, Managed Travel Boom in India*
The Transnational, NY
by Corrie Dosh 

06 June 2007 Miami - India is rapidly becoming a power market for online travel management as new suppliers push distribution and transactions directly online. Vendors and agencies tasked with transitioning legacy systems into Web-based platforms are losing ground to more nimble market entrants, according to one Internet commerce consultant, who also said traditional travel management companies are opting out of competition for the domestic market.

Market penetration of online travel booking in India is expected to reach 10 percent by the end of 2008, according to a PhoCusWright report released in September 2006. Multinational and local travel management companies of all kinds are looking to capitalize on the growing market. The corporate air market in India is expected to grow by 14 percent annually, from $2.17 billion in 2006 to $3.2 billion by 2009, according to a Carlson Wagonlit Travel forecast (citing International Air Transport Association data) presented last month at an Association of Corporate Travel Executives conference.

Backed by millions in venture capital, so-called online travel agencies are at the forefront of the boom, said PhoCusWright senior analyst Ram Badrinathan. In 2005 and 2006, at least eight OTA start-ups or subsidiaries launched services in India. Their share of the travel market is expected to more than triple--from 7 percent in 2006 to 25 percent by 2008, according to PhoCusWright. Traditional travel agencies are expected to lose ground, with their share of the market dropping from 32 percent in 2006 to just 10 percent in 2008. 

"The traditional agencies were focused on the outbound market and domestic, but now they have completely given over the domestic market to the online travel agencies," Badrinathan said. 

The expectation of a rapid transition toward online booking technology is fueling the growth of OTAs. Social and economic forces are enabling suppliers to leapfrog development of their distribution channels directly into an online environment, Badrinathan said.

In 2006, the Indian government liberalized the air industry and a crop of new-entrant carriers appeared, Badrinathan added. These new carriers looked directly to online distribution and fulfillment. Many of the new carriers operate solely on Web-based platforms, he noted.

"Simultaneously, the online travel agencies also entered the market," Badrinathan said. "There was this whole boom that happened in the past one or two years that we're still in the process of. There's been a quantum leap in how Indians book travel." 

However, there are still a few obstacles to overcome before buyers can fully book travel online in India, said Guga Saravanan, head of account management in India for Carlson Wagonlit Travel, during the ACTE conference. Electronic ticketing is not yet a norm. By the end of 2008, all airlines servicing the market are expected to offer e-ticketing, he said.

Internet connections are still more expensive than phone connections and the economy is still very much cash-based, but a rapidly growing middle-class consumer market is expected to push use of credit cards.

Badrinathan said another obstacle holding back online travel booking is the low cost of labor. The rise of online travel booking in the West was partly caused by corporations demanding automated tools to replace tasks previously accomplished by administrative assistants. With assistants paid an average of $150 to $200 a month in India, the cost savings through an online booking tool are not quite as impressive.

However, many companies in India face staff attrition rates of 30 percent a year due to low wages, Saravanan said, and agencies face high turnover in their staffs, as well. In that sense, the movement toward online booking tools may help agencies offer more consistent service, rather than spending time training new call center staffers.

Service expectations are extremely high in India, Saravanan added. While a TMC is expected to handle visa applications, medical insurance, foreign exchange and other high-touch services, there is still a heavy focus on transaction costs. 

OTAs may not be known for high-touch customer service, but the convenient nature of online transactions appeals to Indian consumers, Badrinathan said.

"You have to look at what service means in India. The very fact that you can book online and not get stuck in a traffic jam is service," he noted. "So actually, the online travel agencies can offer good service compared to the traditional agencies."


----------



## Bushroda

*University of Minnesota to create India Center*
*The center, approved by Pawlenty, would culture economic and research connections.*
By Marni Ginther

Though existing programs at the University have been promoting connections to India, a new center will soon tie those efforts together. 

Last Wednesday, Republican Gov. Tim Pawlenty signed the omnibus higher education bill that includes a $150,000 appropriation for the University to create an India Center. 

Like the University's China Center, the new center would promote exchanges and collaboration with the economically growing country in areas ranging from education to business. 

How the new center will meet those objectives, where it will be housed and who decides are still unknown. The bill says the Board of Regents "may establish an advisory council to facilitate the mission and objectives of the India Center," but no such council has been appointed. 

"How the University will move ahead with this center is still under discussion," Senior Vice President of the 

Academic Health Center Frank Cerra wrote in an e-mail. "The legislative session has just ended and we need to assess the best location and process for the center to succeed." 

The one-time appropriation must be matched by an equal amount of nonstate money, according to the bill's text. 

"Where and how we get the matching money is unknown," said Meredith McQuaid, interim director for the University Office of International Studies. 

"I anticipate that wherever (the center) is housed, the first few months will be spent sort of mining opinions around here," she said. "What would people like to see? Where do we already have strengths in India? And then where do we go from there?" 

McQuaid said she is scheduled to meet with State Rep. Erik Paulsen, R-Eden Prairie, on July 3. By then, she hopes to have a better idea of where the matching money will come from. 

Paulsen originally introduced the legislation as a separate bill in February. 

"I came up with the idea last summer, when dealing with legislation on Chinese Mandarin language programs," Paulsen said. "I thought India should have a similar opportunity, in terms of its size and role in the global economy. It only makes sense for the 'U.' " 

Three main goals are outlined in the bill. One is to foster an understanding of the history, culture and values of India. The second is to promote economic, governmental and academic pursuits involving India. The third is to facilitate collaborative exchanges and partnerships in research, education and business. 

A lot of programs at the University are already doing this. The School of Public Health and the Medical School have had ongoing relationships with schools and health organizations in India for years, said William Toscano, professor of environmental health sciences in the School of Public Health. 

The new center will be a great way to bring all those efforts together, said computer science professor Shashi Shekhar. He points to the success of the University's China Center. 

"If you look at global trends, I think there are similar opportunities for Minnesota in building relationships with India," Shekhar said. "So it's probably time to have some entity come together centrally and coordinate (the University's existing efforts)."


----------



## Bushroda

*Where India offers long-term benefits*
ASSETZ NEWS, UK

Property in India is popular. With its booming economy, increasing tourism and ever-improving infrastructure, there is no lack of interest from investors. For this reason, the Confederation of Real Estate Developers Association of India and Maharashtra Chamber of Housing Industry have announced the dates of India Property 2007, a show held in Dubai and London to promote investment in the country. 

The first question many will ask is where in India should people invest? No doubt the question will be asked in London when the show comes to Earls Court in late July. But to Investors Provident much depends on the markets the investors, particularly buy-to-let investors, are seeking to tap into.

Investment Provident spokesman Hetal Shah explains that, for example, Goa, a popular holiday destination and home for ex-pats, has "probably [been] done and done, especially the more popular tourist areas in the north of Goa."

He adds: "If you're looking at [Goa] as a holiday home, you can't really miss out, in the long-run. But if you're looking at it from an investment point of view, then there are a lot of other areas."

The long-run is a theme Mr Shah emphasises, explaining that first of all, an investor has to undertake the "tedious" process of circumnavigating India's property laws. Foreigners cannot own property themselves, so investors need to set up a company in India first, with any property bought registered under the company name.

However, he adds, once this is done the long-term prospects are good. The "other areas" he refers to are not the already popular, saturated and increasingly expensive holiday resorts, but the fast growing cities where new industries and high technology are bringing about rapid change: "Areas like, for example, Bangalore, Hyderabad, where you've got.the IT sectors, you can't go wrong with those. And definitely the metros: you've got Mumbai, Delhi."

He explains that these locations were costly, but adds: "You can't go wrong because it's like investing in London; you'll just never go wrong in the long-run."

Another clue to where to invest has emerged today, with the BBC reporting that the Indian government has agreed for 24 Special Economic Zones to be set up around the country. The scheme essentially copies what China has done; creating areas of tax-free investment where big companies will be encouraged to move in. These, therefore, should be the areas where the next wave of technology and industry come into the country. 

These zones will not come into force just yet. MK Venu, national editor of the Economic Times, told the BBC that large areas of building land need to be acquired for the projects, which in turn means overcoming resistance from rural communities wedded to an agricultural lifestyle. But when this does happen, investors may do well to look to these areas for the big opportunities. 

Thus the message is clear: India is a place for the patient and those looking for long-term returns rather than a quick buck. But of course if the country continues to see such rapid economic growth then a long-term investment means long-term success.


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## Bushroda

*Hydrogen vehicles in India likely by 2020* 
M Rajendran, Hindustan Times
New Delhi, June 04, 2007

The National Hydrogen Energy Board (NHEB) will draw up a plan for the introduction of hydrogen fueled vehicles in the country and also suggest steps to develop hydrogen energy infrastructure in the country, said Vilas Muttemwar, Minister of State for New and Renewable Energy. He was speaking at a conclave on National Hydrogen Energy Road Map: Opportunities for Public Private Partnership on Monday.

A National Hydrogen Road Map is being prepared by the Steering Group of the NHEB, headed by Ratan Tata, Chairman of the Tata Group. âUnder this initiative about 1 million vehicles plying on Indian roads will use hydrogen as fuel. About 75 per cent of them are likely to be two and three wheelers, â said Muttemwar. 

Power plants with a generating capacity of 1000 megawatt (MW) of hydrogen power would be set up by 2020, he added. 

Said Ratan Tata, who also attended the conclave: âHydrogen fuel will become an alternative to fossil fuel on which we can build the national economy.â He however cautions: âHydrogen based energy may remain elusive for some time because there are major challenges in generating, storing and delivering it. But I am confident that even if we do not, our future generations will definitely have clear fuel.â

In his inaugural address, Montek Singh Ahluwalia, Deputy Chairman, Planning Commission said clean fuels like hydrogen would help to reduce carbon emission. âWe should develop more such technologies and put more effort into such research,â he said. 

Muttemwar said the target of meeting at least 10 per cent of the country's power needs from renewable power by 2012 was eminently achievable. 

India has one of the largest programmes for developing renewable energy technologies in the world. The total power generating capacity in the country as of March 2007 was about 1,33,000 MW. Renewable power generating capacity is about 10,252 MW, or 7.75 per cent of this. 

Renewable power technologies include Wind Power (7092 MW) Small Hydro Power (1976 MW), Bio Energy (1187 MW) and 155 MW of grid distributed renewable power.


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## Bushroda

*âIntelligentâ traffic control for Mumbai not far away* 
_*Spanish firm gets contract for system that will cut waiting time at signals by half; 50 south Mumbai junctions identified*_ 
Swapnil Rawal 

Mumbai, June 6: A Spanish IT firmâTelvent GIT S.Aâbased in Madridâworking in collaboration with CMS Computers Ltdâ has been chosen by the Brihanmumbai Municipal Corporation (BMC) to design, construct and commission a traffic infrastructure management system for Mumbai. The project financed by the World Bank is estimated to cost around Rs 49 crore. 

Expected to reduce travel time, cut down pollution levels and fuel consumption, the project involves 

Telvent implementing its RealTime intelligent urban traffic management technological solutionâITACAâat 

253 busy road junctions now controlled by traffic signals. 

According to R Ramana, senior transport planner, Mumbai Metropolitan Region Development Authority (MMRDA), the implementation of the Area Traffic Control (ATC) system is under the Mumbai Urban Transport Project (MUTP). âThe technology will be initially (Phase-I) implemented on 50 short-listed junctions in South Mumbai and later installed at other junctions,â he said. 

Among the junctions identified are: Wilson College, Band Stand, Kemps Corner, Dahanukar (North) at its junction with Peddar Road, Mahalaxmi Temple, Haji Ali, Opera House, Churchgate junction, Air India junction, Mantralaya junction, Regal junction. 

Once in operation, ATC is expected to cut down waiting time at traffic signals by almost half. 

âWe are very pleased that the city of Mumbai has chosen our leading edge technology to provide a solution to its traffic mobility and fluidity problems,â Manuel Sanchez Ortega, Telventâs Chairman and CEO told Spanish wire services. âWe expect that the new traffic management system will help the city offer a better service for its citizens and reduce gas emissions. It is also an important project for Telvent as it is our first transportation segment contract in India.â 

According to Telvent, the technology to be used in the system will constantly acquire data on road status, including number of vehicles arriving at intersections by each access point. The acquired data will be used to constantly adjust traffic lights at each intersection in accordance with real-time demand and in coordination with neighbouring intersections. The idea is to achieve optimal coordination between intersections and reduce road traffic congestion.


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## Contrarian

Bushroda said:


> Thats Great. You belong to the same discipline as I do.


Thats awsome!
Are u studying or are u emplyoyed?
And where did you do your CS Engg. from?


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## Neo

Thursday, June 07, 2007 

*Indiaâs IT industry despairs over surging rupee*

BANGALORE: Indiaâs IT industry expressed serious concern Wednesday over the impact of the rupeeâs surge on export-dependent software exporters, already struggling with high costs.

Any hope for the industry lies in the US economy performing better than expected and the US tweaking interest rates to prop up the dollar, said Kiran Karnik, president of the National Association of Software and Service Companies, or NASSCOM.

âWe have had an eight or nine percent increase in the rupee in just the last three-to-four months,â Karnik, whose organisation represents the IT industry, told reporters in Bangalore.

âThis is something about which the entire industry is greatly concerned about.â

The US accounts for two-thirds of Indian software sales, and any rise in the rupee trims profit margins of companies such as Tata Consultancy and Infosys Technologies that are at the vanguard of the 48 billion dollar industry.

NASSCOM has estimated Indiaâs software exports at 31 billion dollars in the year ended March.

Net foreign-exchange earnings make up 51 percent of sales at Tata Consultancy, 56 percent at Infosys and 35 percent at Wipro.

IT companies, while billing in dollars, are not import-intensive, unlike jewellery makers who buy raw material such as gems and uncut diamonds from abroad to polish and fashion into ornaments.

âAll our expenditure is in rupees so we take a huge hit,â said Karnik.

Indiaâs IT companies are already reeling under wages that are rising an average 15 percent a year in the face of a shortage of skilled engineers, while competition is increasing from emerging rivals in countries such as China.

Wages typically account for half the costs of IT companies, but there are warnings that more rises will blunt Indiaâs competitive edge.

âWe have been so far able to manage them,â Karnik said. âBut if wage costs increase and on top of that there is dollar depreciation, we are going to have a problem.â

The advance of the rupee to decade highs, making the currency one of the biggest gainers this year and propelling India to a trillion dollar economy, has not been foreeseen by either economists or exporters who bill in dollars.

The rise has been fuelled by inflows from investors eager to pump money into an economy that expanded a record 9.4 in the last financial year.

Foreign direct investment nearly tripled in the year to March to 16 billion dollars from 5.5 billion a year earlier.

âThe rupee appreciation is sharp and here to stay,â investment bank Credit Suisse said in a report. âThe impact is material for many and can no longer be ignored as cyclical.â

The report said it could appreciate âby a further one to two percent in the following months.â

The Reserve Bank of India (RBI) has eased off from selling rupees as it seeks to wrestle down inflation.

Letting the rupee rise has made imports less expensive, cushioning the impact of strong fuel prices for India, which relies heavily on imported oil priced in dollars.

The rupee has also risen too high, too fast and âthere is bound to be a correction,â Karnik said. 

http://www.dailytimes.com.pk/default.asp?page=2007\06\07\story_7-6-2007_pg5_26


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## Neo

*China, India talk on regional trade pact*
7 Jun, 2007 

BEIJING: China and India are confident that their joint feasibility research on a regional trade agreement will be completed on schedule, according to China's commerce ministry. 

During discussions earlier this week, both sides "fully" exchanged views and reached a consensus on goods and services trade, investment, facilitation of trade and investment and economic cooperation, said a ministry statement, without elaborating. 

Both sides agreed to meet again in August in New Delhi and wrap up the joint research by October as the leaders of both countries required, it said. 

Chinese Vice-Minister of Commerce Yi Xiaozhun said that if China and India could agree on a trade arrangement, the vast east and south Asian markets would receive a significant boost while Asian economic integration would be facilitated. 

The first four months have seen foreign trade between the two surging by 56.8 per cent over the same period last year, the highest of all the major trade partners of China, to $11.4 billion. 

Chinese Premier Wen Jiabao and Indian Prime Minister Manmohan Singh initiated the joint feasibility research in April 2005. New Delhi and Beijing have each held such consultations twice. 

Pakistan, another rapidly developing South Asian country whose economy is enjoying an annual growth of between six and eight per cent, arrived at a free trade agreement with China on in November 2006. 

http://timesofindia.indiatimes.com/...egional_trade_pact/rssarticleshow/2106164.cms


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## Bushroda

malaymishra123 said:


> Thats awsome!
> Are u studying or are u emplyoyed?
> And where did you do your CS Engg. from?



Thanx,

I did my Engg from Harcourt Butler Technical Institute(HBTI), Kanpur. Did my MS in Advanced Network Technologies from University of Minnesota, Minneapolis and am currently employed with Agilent Technologies.


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## Bushroda

*A better tomorrow for all * 
*Banking outreach programmes will prove financially remunerative* 
VP SHETTY 
Posted online: Friday, June 08, 2007 at 0000 hours IST

India recently joined a select club of a dozen countries that can boast of trillion-dollar economies. Our GDP is estimated to have expanded by 9.4% in 2006-07, and that too, on the back of 9% growth the previous year.

All these numbers coupled with the stock market buzz about the âIndia growth storyâ (market capitalisation is now just shy of the magical $1 trillion mark) could tempt us to jump to the conclusion that the Indian economy has hit the âsweet spotâ and is poised for âtake-off towards self-sustained growthâ. However, one should not be deluded by numbers. The moot question is whether this growth is equitable and all-encompassing, or has ended up creating âislands of prosperityâ in a country of one billion plus. Further, can the 9% plus economic growth be sustained in the years ahead if the fruits of liberalisation, privatisation and globalisation are not realised by people residing in Indiaâs vast hinterland? 

The answer is actually a truism: Economic growth in India has to be inclusive in order to make it sustainable. 

An inclusive agenda has other beneficial spin-offs as well. Enhanced purchasing power in the hands of those at the bottom of the pyramid will help stoke demand for goods and services, which, in turn, will yield robust turnover numbers in the constituent sectors, thus boosting the economy as a whole. This is the âbottoms-upâ approach to generating demand in the economy. Further, if domestic demand is robust, then it could insulate the economy from any possible slowdown in exports. 

Thus, sustained growth momentum, and with it the prosperity of India Inc, is dependent on wealth creation at the grassroots level. The banking system must play a signal role in empowering the underprivileged. Recognising this, and in the light of the fact that current banking practices preclude vast numbers of rural Indians from accessing banking services, the RBI has, in the mid-term review of its Annual Policy 2005-06, exhorted banks to make available âbasic bankingââa âno-frillsâ bank account with nil or low minimum balance requirementsâavailable to the hitherto excluded sections of the population. Though the number of transactions in such accounts, by their very nature, would be low, no-frills banking will go a long way in bringing formal banking to the intended beneficiaries. 

Banks have responded by opening âno-frillsâ accounts in the target areas with simplified procedures (all those opening such accounts will not have identity and proof-of-residence documents). All that is required to open this account is an introduction from an existing account holder who meets all the know-your-customer norms of the bank and has a satisfactory transaction record. 

Extending banking services to the underprivileged can also be viewed as a portfolio diversification strategy involving a massive and stable customer base 

Further, âno-frillsâ account holders in rural and semi-urban areas can withdraw cash against the sanctioned limit under the general purpose credit card scheme. Under this, there is no linkage to any end-use purpose specifications of funds, nor collateral security. Women are given preferential treatment. The idea is to help rural households escape the clutches of local moneylenders who charge usurious interest rates, often as high as 50%. Banks have been given a sop to promote the credit card with 50% of the outstanding amount being treated as indirect finance to agriculture, a priority target. 

However, there is a need to adopt a holistic approach to financial inclusion by customising banksâ products and services at affordable prices to meet the entire range of financial needs of the underprivileged. This would involve banking outreach programmes that go beyond the no-frills provision to include credit facilities and other financial services like insurance. Apart from a flexible approach in terms of working hours, documentation, mode of interaction and transactions, banks would do well to utilise local knowledge for effective loan monitoring and risk mitigation. Extending banking servicesâno frills account, general purpose credit cards, micro-mortgages, agriculture loans, micro-insurance and remittancesâto the underprivileged can be viewed as a portfolio diversification strategy on a massive and stable customer base. 

The technology deployed for the purpose is highly secure, amenable to audit and in consonance with widely accepted open standards to allow interoperability among the differing systems adopted by different banks. 

Linkages with self-help groups (SHGs) are also important. In sum, an inclusive banking agenda goes beyond the ambit of mere corporate social responsibility and makes for an attractive business proposition if appositely designed and implemented. The underprivileged are conscientious in repaying their dues, and gaining their custom makes eminent business sense. 

â_VP Shetty is chairman & managing director of IDBI, which has been awarded for its performance on strength & soundness by FE_


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## Bushroda

*Goldilocks tests the vindaloo*
Jun 7th 2007
From The Economist print edition

http://imageshack.us
*India's monetary policy is still too loose*

AMERICA was the original âGoldilocks economyâ (neither too hot nor too cold), but the fair maiden has now moved to India. The bears there prefer curry to porridge, but once again Goldilocks is reported to judge the economy âjust rightâ, with strong growth and falling inflation. Indeed, concerns earlier this year about overheating are fading. Wholesale-price inflation has dropped from 6.7% to 5.1%, even as India's GDP jumped by 9.4% in the fiscal year ending in Marchâits second-fastest growth on record. Palaniappan Chidambaram, the elated finance minister, says it is time to shed any scepticism about the sustainability of India's strong growth. The Economist remains unconvinced.

India has much to cheer about. The economic reforms of the 1990s and stronger investment have lifted its sustainable rate of growth. But demand has also been inflated by an unduly lax monetary policy. The government thinks its target of 9% average annual growth in the next five years can be achieved without pushing inflation up. But India displays more symptoms of overheating than China does: inflation is much higher, bank lending is growing almost twice as fast, and Indian share prices have risen by twice as much in dollar terms as China's since the end of 2002. The government, initially slow to react to higher prices, has cracked down this year with a series of administrative and fiscal measures, notably banning wheat exports and lowering fuel taxes; and the Reserve Bank of India (RBI) has tightened monetary policy.


Many local economists think there has now been enough tightening. Yet the idea that Indian inflation is tamed seems to be based on five common myths. The first is that the run-up in inflation could largely be attributed to higher food prices caused by âsupply shocksâ in the agriculture industry; so monetary policy does not need to be tightened. In fact, manufactured goods have accounted for much more of the rise in inflation over the past year. The main reason for higher prices is that aggregate demand is growing faster than supply.

A second misconception is that the government's various schemes this year, like the wheat-export ban, have done a better job in reducing inflation than monetary policy would do. But such measures merely suppress the symptoms; they do not tackle the underlying problem. Inflation can be genuinely reduced only by a period of slower growth. And although the various schemes have helped to reduce wholesale-price inflation, the measure that the government likes to focus on, consumer-price inflation, the choice of all other central banks, is still running at almost 8% (taking a crude average of the rates for industrial, non-manual and agricultural workers). 

A third myth is that the increase in fixed capital spending from 23% of GDP in 2001 to 29.5% last year will immediately lift the economy's speed limit. In the long term investment will indeed add to productive capacity, but in the short term higher capital spending boosts demand and adds to overheating.

The fourth fairy tale is based on the idea that the interest-rate rises over the past year must eventually have more of an effectâand thus slow the economy in the coming months. Interest-rate hikes certainly take time to work. The snag is that in India rates have risen by less than the increase in consumer-price inflation, and monetary conditions are still too loose. India has by far the lowest real interest rates among the world's big economies. The RBI, constrained by politicians, has been too timid in cooling domestic demand. Its attempts, until recently, to hold down the rupee through heavy foreign-exchange intervention forced it to run an overly lax monetary policy. The good news is that the RBI is now allowing the rupee to rise (see article), which should make it easier to fight inflationâif the government allows it to do that. 

Lastly some critics of the central bank say that proper monetary tightening would kill the expansion. In fact, expansion is far more likely to end prematurely if inflation gets out of control and imbalances widen, raising the risk of a hard landing. Controlling inflation is the best way to sustain growth.

The bear necessities
In the longer run India's ability to grow faster depends on it unblocking its infamous infrastructure bottlenecks, notably its lousy roads, ports and power. The increase in electricity capacity over the past five years was only 57% of its targeted level, so power cuts have worsened. Skills shortages will be eased only by improving education and reforming India's rigid labour laws. This will all take time. Meanwhile, India will have to accept slower growth to keep inflation in check.


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## Bushroda

*Global airline groups woo Indian carriers*
Amitabha Roychowdhury (PTI)
LiveMint.com, Wall Street Journal

*Air India has already declared its intention of joining the Star Alliance*

Two global airline alliances, SkyTeam and OneWorld, are bullish on India and have started holding preliminary discussions with Indian carriers to attract them into their respective teams.

âThe need and potential of having an Indian airline in the alliance has grown. We have held exploratory discussions with Air India, Jet Airways and Kingfisher about joining the alliance. Sooner than later, we will have an Indian airline joining the SkyTeam,â its chairman, Leo van Wijk, said.

Both van Wijk and his competitor, OneWorld managing partner John McCulloch, said India was a huge market and a âmajor target for us.â The SkyTeam chief said his alliance âhas made it a priority to finalize discussions with Indian carriers and select a partner.â

However, McCulloch said the Indian aviation industry, where consolidation has already begun with the Jet-Sahara, Air India-Indian and Kingfisher-Air Deccan deals, would take âthree to four years to stabilize. So any decision will have to be taken after that.â

India, China and Brazil were âthe next growth markets and the global airline alliances will see more participation from these nations,â he added.

The state-owned Air India has, however, already declared its intention of joining the third group, Star Alliance. 

Replying to questions, McCulloch also said India was set to become a âmajor aviation hub in the next two to five yearsâ and give tough competition to other hubs like the Gulf region and Southeast Asia.

âAll the activity that is taking place in the aviation sectorâfrom purchase of aircraft, development of airports or the strong growth of the economy and the resultant increase in demand for air trafficâwill ensure that India becomes a major aviation hub. Indiaâs geographical position also goes to its advantage,â he said on the sidelines of the 63rd Annual General Meeting of the International Air Transport Association here. The OneWorld chief also pointed out the âhuge local and regional marketâ coming up in the Indian subcontinent and said âwe have to consider that.â

While the SkyTeam has 10 airlines as members, including Aeroflot, Air France, Alitalia, Continental Airlines, KLM and Northwest Airlines, OneWorld has British Airways, American Airlines, Cathay Pacific, Japan Airlines, Qantas and Royal Jordanian as members. 

Star Alliance is the largest with global carriers such as United Airlines, Lufthansa and Singapore Airlines.


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## Bushroda

*Indian biotech sector crosses $2 billion in FY 2007*
Posted June 7th, 2007 by Tarique

Bangalore : India's emerging biotechnology sector crossed the $2 billion mark in fiscal 2007, registering 30 percent growth over the previous fiscal (FY 2006) at $1.45 billion.

The bio-pharma segment led the growth, accounting for $1.4 billion, or 65 percent of the total revenue, with 20 percent year-on-year (YoY) growth, Karnataka vision group for biotechnology chairperson Kiran Mazumdar-Shaw said Thursday at the inaugural session of the three-day Bangalore Bio 2007 here.

Similarly, bio-services and bio-agritech accounted for about $500 million, contributing Rs.10 billion ($250 million) and Rs.11 billion respectively. Bio-industrial and bio-informatics generated Rs.4 billion and Rs.1.3 billion respectively. 

Total exports were Rs.10 billion.

"With healthy and consistent growth rate, the emergent biotech sector is on track to achieve the $5-billion target set for 2010. The agri-biotech segment witnessed 50 percent YoY growth, the highest globally with the largest acreage of nine million.

"The sector also witnessed 37 percent increase in investment of Rs.22.7 billion in the last fiscal, as against Rs.16.5 billion in FY 2006. As the biotech capital of India, Bangalore attracted the lion's share of investments - Rs.10 billion," Shaw said.

Delivering the inaugural address, Shaw said that of the 340 biotech firms in the country, 183 were in Karnataka, with 137 in Bangalore alone.

Of the 12 new firms registered in FY 2007, nine are in Karnataka and six in Bangalore.

To address the widening demand-supply gap in human capital, the Karnataka government is partnering Deakin University in Australia to start postgraduate and doctoral programmes for high-end scholars and biotech scientists, Shaw told about 800 delegates participating in the conference-cum-trade show here. 

According to a study by the industry body ABLE (association of biotechnology-led entrepreneurs) and BioSpectrum, India's cost and skill base supports affordable drug development. The scientific headcount has doubled to about 16,000 from the previous fiscal.

"India is an emerging preferred hub for contract research organisations and contract manufacturing organizations. The transnational partnership models of global firms are suitable to Indian firms.

"Discovery research is leading to new molecules in place of generics. Pre-clinical development and presence of large animal facilities is set to attract investments in bio-pharma and bio-agritech segments. The challenges before the sector are about securing private and public funding despite risk aversion among the VCs (venture capital funds). 

"Though the sector is becoming popular with trained and skilled human resource, the gap in drug discovery and clinical development is seeing a reverse brain drain, with hordes of Indian scientists coming back," Shaw, also chairperson of Biocon India Ltd, pointed out.

She, however, told union Finance Minister P. Chidmabaram, who inaugurated the trade event, about the need to improve the regulatory infrastructure, bio-manufacturing standards, clinical development capabilities and research and development collaborations with US/EU firms as well as acceptance of Indian clinical data by the USFDA and EMEA of Europe.

Karnataka Chief Minister H.D. Kumaraswamy, Australian state of Victoria Governor David de Kretser, British High Commissioner Michael Arthur and heads of 15 overseas delegations also attended in the inaugural event.


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## Bushroda

*The Whisky Rebellion*
Thursday, Jun. 07, 2007 
By HUGH PORTER / GLASGOW
THE TIME

For Vijay Mallya, taking over foreign companies is routine stuff. By building and buying everything from airlines to agrochemicals, he has created a $2 billion conglomerate. But he could be forgiven for taking a little added satisfaction in the recent $1.18 billion acquisition of scotch-whisky producer Whyte & Mackay by his UB Group, based in Bangalore, India. United Breweries has come full circle since the days of empire, when the firm was founded by Scotsman Thomas Leishman in 1915. It wasn't until India gained independence from Britain in 1947 that the first Indian director was appointed--Vittal Mallya, Vijay's father. Vijay Mallya has spread UB's global reach, and taking over production of some of Scotland's most treasured whiskies could be his most audacious move yet.

UB's liquor arm United Spirits, the biggest whisky maker in India, and the Scotch Whisky Association (SWA) have been doing a brisk trade in bitter remarks, each charging the other with unfairly blocking its exports. Hardly the spirit, given that "scotch whisky is enjoying its best growth prospects for a generation," according to Alberto Gavazzi, global brands director for Diageo, the producer of Johnnie Walker and J&B.

Scotch exports had a record year in 2006, with almost $5 billion worth shipped--a quarter of all food and drink exports from Britain. Asia's new rich are a big market--Chinese consumers imported $115 million worth of whisky last year, up from $3 million in 2000--but it is India that's driving distillers to stack the barrels high in warehouses from Islay to the Highlands. India is the biggest consumer of whisky in the world, putting away 70 million cases last year. With an 80 million-- strong middle class and an economy growing more than 9% a year, it's a market loaded with potential.

The problem for scotch producers is, it's still only potential: 99% of the whisky sold in India is made locally. Imports of scotch have grown from 5.5 million bottles in 2000 to nearly 20 million last year, but it is still a tiny sliver, less than 1% of the overall whisky market. Scotch sales are stifled by punishing taxes and duties on imported spirits and wines--totaling anywhere from 200% to 550%. Gavin Hewitt, chief executive of the SWA, describes the charges as "discriminatory" and "pure protectionism."

Vijay Rekhi, president of United Spirits, counters that the Europeans have put up an "invisible barrier" to trade by refusing to even call the stuff made in India by the name whisky. Most Indian whiskies are made from sugarcane molasses, but if they aren't made from grain and matured for a minimum of three years, they can't be labeled whisky in the E.U. "You can call them Indian spirit, you can call them rum," says Rick Connor, director of public affairs for Chivas Bros. "We do object to calling them whisky." That definition, Rekhi says, blocks UB from selling its leading Indian brands, like Bagpiper and McDowell's No. 1, in Europe.

And so the battle lines were drawn at the Glasgow's Radisson SAS hotel in April when Rekhi was invited to Scotland to address the World Whiskies Conference. Delegates chatted over tea, coffee or 12-year-old Aberfeldy, discussing only one thing: India. Rekhi opened his speech by demanding that the E.U. redefine whisky to accommodate molasses-derived brands. "There should be no definitional barriers based on geography or substrates," he says. "Whisky cannot ring-fence itself." Yes it can--and should--according to rebuttals from the scotch side. "Rules are there to protect consumers," said Mike Keiller, CEO of Morrison Bowmore. "I would have grave difficulty for something called Indian whisky made that way to sit alongside my Bowmore."

As head of the third biggest spirits producer in the world, Mallya, a flamboyant, bejeweled billionaire, is in a position to be the arbiter of peace in the whisky wars--or to mix it up further. Last year Mallya was so incensed by the SWA's whisky edicts that he called a press conference to vent. "This imposition of British imperialism is unacceptable," he said. Maybe he'll tell the SWA so himself at its next board meeting. Now that he owns 9% of scotch production, he is eligible to join the group. "I'm sure the rest of the industry would welcome him to the table," says Hewitt. "But it's not a free ride."

But Mallya's billion-dollar investment will get him more than a seat in the clubhouse. "It really gives him a good portfolio," says Alan Gray, author of the Scotch Whisky Industry Review for Edinburgh analysts Sutherlands. "It has brands like Whyte & Mackay. And the Isle of Jura and the Dalmore single malts are the icing on the cake." The acquisition also provides UB with a ready supply of scotch to blend into Indian whisky and to export to India and China. UB plans to double production at the Invergordon distillery within a year, creating the biggest whisky plant in the world.

Mallya isn't the only one expanding. William Grant & Sons, owner of Glenfiddich single malt, plans to build a new distillery, as does Bruichladdich on the island of Islay. In February, Diageo announced plans for a $200 million distillery and other facilities in Scotland, and the firm may double its investment if demand in emerging markets pans out.

That will depend on the resolution of the import-tariff dispute with the Indian government. In July an E.U. panel found the additional duty on imported wines and spirits a "blatant violation" of World Trade Organization (WTO) rules, and with the U.S. also complaining, the WTO has launched its own investigation. A ruling may be more than a year away, but things may move more quickly now that Mallya too is an importer. The self-styled "King of Good Times" is a Member of Parliament as well.

"We have been progressively reducing our import duties," says Shipra Biswas, a spokeswoman for India's Ministry of Commerce and Industry. "At the same time, there's the issue of reciprocal access to the E.U. for our whisky." Biswas insists the issues are unrelated, as has Rekhi, though he suggested to the delegates at the whisky conference that "it should be a win-win situation. You want to dismantle tariffs? Let's dismantle intellectual barriers."

When change does come, sales of imported whiskies are sure to boom. In the lobby of the five-star Grand Hotel in New Delhi on a recent Sunday night, businessmen J.P. Goenka and N.R. Pillai enjoy 12-year-old Glenfiddich at $8.50 a shot. "Those who can afford it drink it. But for most people, it's still too expensive," says Pillai. "It's a sort of a status symbol," says Goenka, each finger encased in a nuggety ring. "India has a massive middle class ready for this sort of thing, but it's still perhaps just a bit beyond them." The two men take another sip.

_with reporting by Simon Robinson / New Delhi_


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## Contrarian

Bushroda said:


> Thanx,
> 
> I did my Engg from Harcourt Butler Technical Institute(HBTI), Kanpur. Did my MS in Advanced Network Technologies from University of Minnesota, Minneapolis and am currently employed with Agilent Technologies.



Cool, where is Agilient Tech. located? India or US?

Im gonna go to US after a couple of years for my MBA. Dont plan on having a career in programming. Its either IIM, ISB, in India, or straight to US.


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## Neo

Friday, June 08, 2007 

*âIndia could use forex reserves in foreign projectsâ*

MUMBAI: India, seeking ways like China to use its foreign exchange reserves, could invest some in other countriesâ infrastructure projects to supplement its own needs, a government-appointed panel said in a report seen by Reuters on Thursday. 

India also needs $475 billion, more than previously estimated, over the next five years to develop its infrastructure if it is to grow at nine percent in the medium term, the report from the Committee on Infrastructure Financing said. 

The report, which was dated May 2007 but has not been publicly released, said a previous funding estimate of $320 billion, based on 2005/06 prices at an exchange rate of 45.30 rupees per dollar, needed to be raised to $384 billion, or $475 billion at current prices. 

India, Asiaâs third-largest economy, is looking for ways to fund development of roads, ports and power, and has been debating how to use its rising foreign exchange reserves, now more than $200 billion, for a couple of years. 

China is setting up an agency to diversify part of its $1.2 trillion reserves and in May it unveiled a plan to take a $3 billion stake in US private equity firm Blackstone. 

The Indian panel report said a firm could be set up in a foreign country, funded by the government. That firm could borrow, say, $10 billion of reserves, with the loan benchmarked to the 30-year US government bond and the central bank getting a premium over that to compensate loss of liquidity. 

âThe mandate of this company would be to invest in infrastructure development outside India, only of the kind that would either supplement Indiaâs infrastructure needs or help in sourcing raw materials or importing machinery for domestic development,â the report said. 

For example, it could invest in power projects in Nepal or Bhutan with an understanding they would supply power to India. 

âAlso the company can provide support to Indian oil and gas companies to acquire assets overseas which would facilitate Indiaâs infrastructure development,â it said. 

Balancing act: Finance Minister Palaniappan Chidambaram announced some of the panelâs recommendations back in February. 

These were that proposed overseas subsidiaries of India Infrastructure Finance Company Ltd. could borrow reserves and lend to Indian firms involved in domestic infrastructure projects for capital spending abroad, or borrow to invest in securities and provide insurance for overseas fund-raising for home projects. 

In the May edition, the report said borrowing reserves from the Reserve Bank of India (RBI) should not add to high domestic monetary expansion and only a small portion should be used. 

âThe challenge is to balance the objectives of the RBI in its reserve management (safety, liquidity and return) against the needs of the infrastructure sector,â it said. 

The financing gap â the difference between targeted spending and current spending as a percent of GDP â would be $162 billion at current prices, which had to come from private sector and offshore investors, it said. 

The report also recommended tax benefits for infrastructure firms, more liberal share buyback rules and tax rebates to big power projects. 

It suggested allowing greater foreign institutional investor participation in Indiaâs markets to generate funds and proposed a separate regulatory regime for infrastructure companies. 

Rupee loans for infrastructure projects could be refinanced through foreign currency loans, and the report said an interest-rate ceiling for senior, subordinated and mezzanine foreign debt should be dismantled to ensure an adequate supply of funds. 

http://www.dailytimes.com.pk/default.asp?page=2007\06\08\story_8-6-2007_pg5_23


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## Bushroda

malaymishra123 said:


> Cool, where is Agilient Tech. located? India or US?



The company has its HO in Santa Clara, California. But, I work for their development lab in Troy, Michigan. At the moment I am across the Atlantic in Britain on a Virgin Media prj. The company has its offices in Bangalore & Chennai. They have a huge Chip design lab in Gurgaon which is their biggest lab outside US. I cannot confirm but the rumours from the boardroom has it that the Central Management is planning to set up another Fab lab in Kolkata by the end of next year.



malaymishra123 said:


> Im gonna go to US after a couple of years for my MBA. Dont plan on having a career in programming. Its either IIM, ISB, in India, or straight to US.



Good Luck to you. I hope you make it to IIM/ISB. Though competition is extremely strong but nothing is impossible. From which Uni are you doing your CSE from?


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## Neo

* Indiaâs stagnant farm output a worry: FM *

BANGALORE, India: Indiaâs finance minister said Thursday that he was worried about near-stagnant farm output that has forced the country to import grains to feed its billion-plus people.

Both manufacturing and services are expanding strongly, P Chidambaram said in the countryâs high-tech hub, contributing to a record 9.4 per cent rise in economic output during the financial year ended March.

âBut we are concerned about the slow rate of growth in agriculture,â he said at an annual gathering in Bangalore of biotechnology companies, noting India had turned from a food exporter to an importer.

Land under rice and wheat cultivation has remained stagnant in the past decade, he said, urging Indiaâs two billion dollar biotechnology industry to focus as much on devising better-yielding crop varieties as it does on drug research and discovery.

Agriculture contributes about a fifth of Indiaâs economic output but is a direct or indirect source of livelihood for two-thirds of its population.

Annual per capita food grain production declined from 207 kilograms (455 pounds) in 1995 to 186 kilos last year. The rate of agricultural growth fell from five per cent in the mid-1980s to less than two percent in the past five years.

http://www.thenews.com.pk/daily_detail.asp?id=59599


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## Bushroda

*Spice Up Your Portfolio With Indian Companies* 
By Jennifer Openshaw
TheStreet.com 
6/8/2007 11:50 AM EDT 

If you're like me, I'll bet you're at least a little bit intrigued by investing in rapid-growth overseas markets. You've heard a lot about the BRIC countries -- Brazil, Russia, India and China. 

They're growing like weeds, exporting everything that isn't nailed down. They have growing consumer economies; it's almost like turning back the clock to early Industrial Age America, where almost any investment paid off and even bad ideas worked in a booming economy. 
Of course, I don't advocate bad investing ideas in the The Millionaire Zone. But I am sure taken by these growth stories. And one in particular curries my favor -- India. 

*Why India above the others? *

Quite simply, political vagaries make me shy away from Brazil and Russia. I don't understand those countries or their economies that well, and I don't invest in things I don't understand. 

So why India over China? I know China is growing faster. But I believe India has two distinct structural advantages that make its economy more diverse and bring steadier demand for its goods and services. 

The first advantage is language. Most Indian citizens are bilingual (or multilingual) with English as their second language. This is a huge advantage in a world economy that does much of its business in English. 

Secondly, and perhaps as a result, India has developed a strong service economy, with services that can be exported. Sure, there are call centers, but there's also rapid growth in highly valued services like accounting, engineering and product design. 

Beyond that, India's consumer economy and middle class are further along than China. Estimates call for a middle class of some 900 million by 2010, and the government, partly in response, is opening up retail markets to foreign companies. Tax reforms and reasonable inflation (5%) round out the picture. 

*So how does one invest in India? Here are four ways: *

ADRs. American depositary receipts, or ADRs, are shares traded on domestic exchanges representing a like value of foreign shares. You can emphasize companies serving the Indian market or those that export their wares overseas. 

HDFC Bank (HDB - Cramer's Take - Stockpickr) thrives on both local infrastructure and consumer growth, while Satyam Computer (SAY - Cramer's Take - Stockpickr) provides local IT infrastructure and services. Solid export businesses include familiar call center operators Wipro (WIT - Cramer's Take - Stockpickr) and Infosys (INFY - Cramer's Take - Stockpickr). 


ETFs. Exchange-traded funds are a more diversified if slightly more expensive way to play. The iPath MSCI India ETF (INP - Cramer's Take - Stockpickr) follows all Indian securities and works for a long-term play. Are you worried about another hit to emerging markets, like what happened in February? The fact that Indian markets only dropped 5% while China plunged more than 10% should give comfort. 

Closed-end funds. Closed-end funds offer a little more active management -- professional stock selection. Two that fit are the Morgan Stanley India Investment Fund (IIF - Cramer's Take - Stockpickr) and the Blackstone India Fund (IFN - Cramer's Take - Stockpickr). The 11.9% discount to net asset value makes the Blackstone fund especially appealing right now. 

U.S. companies. Those who read my columns (including this one on S&P 500 exporters) know that one of my favorite ways to play overseas is to find domestic companies that sell a lot abroad. For India, I know that Microsoft (MSFT - Cramer's Take - Stockpickr), McDonald's (MCD - Cramer's Take - Stockpickr) and even Wal-Mart (WMT - Cramer's Take - Stockpickr) do big business with, and in, India. 
Now, this may not be the most revealing or complete list you've seen. In fact, I left out the whole spectrum of Indian companies, large and small, that don't trade in the U.S. There is, however, a lot of promise, and Yahoo! Finance India and the Bombay Stock Exchange portals are worth at least a look. 

However you decide to play, India is sure to add some heat to your investment masala.


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## Bushroda

*Time for India to make a choice*
Source: Dipayan Mazumdar and Associates
Jun 08, 2007 05:55:20
ORLog.org, Romania

*Is India heading for a crisis or a boom are two conclusions which can be reached today depending on which side of the divide you stand. *

(PRLog.Org) â Is India heading for a crisis or a boom are two conclusions which can be reached today depending on which side of the divide you stand. If you are engaged in industry, service sector or other sunshine sectors, India is the flavour of the future as it is becoming a world player with nine per cent growth in the economy.

Indian industrialists are becoming world leaders and are on buying spree picking up giants in Europe and other parts of globe. The multinationals are setting up offices in India or outsourcing their work to be done here because of our skills in IT industry and availability of trained manpower which is proficient in English.

Our exports continue to grow even though a ten cent rise in value of Indian rupee as compared to US dollars has made the job difficult for exporters. All the mutual fund managers and venture capitalists want a share of growing Indian pie. The luxury goods manufactures are making a beeline for Indian markets and every month we hear about the entry of one more automobile manufacturer setting up shop in India.

The glittering malls, swanky apartments and a younger generation patronizing them are going after the goodies as if there will be no tomorrow. The hike in interest rates may have hurt the reality market, but there are no sign of a slow down yet. The indication being rising prices of cement and steel. The stock markets- another indicator of economics growth is touching new heights everyday. At one point India followed a fixed rate of exchange as it feared that rupee may sink in value as compared to other currencies. At the moment there is growing demand for taking steps to control the rising value of Indian rupee so that our exporter are not hurt

It was not many years ago that we lived in economy where foreign currency was guarded carefully by the Reserve bank of India and Indians traveling abroad had to make do with miserly allowance allowed to them by regulators. The situation has changed today and anyone can now splurge in foreign markets. Indian are not only buying companies but also real estate in destinations like Dubai, London, Singapore and Malaysia.

If this is a picture of economy booming, we also have a darker side. India after having its storage silos full for many years is now floating tenders for buying wheat in world markets and not many are coming forward to sell it to us at prices which we would like to pay. India is offering to pay more compared forward to sell it to us at prices which we would like to pay. India is offering to pay more as compared to the price paid to local producers, but world prices are riding much above these levels.

Worried about feeding over one billion people, the Government is looking for desperate measures to increase production or aim at ushering in second green revolution, but agriculture is defying the effort by our planners and scientist and the growth rate remains at extremely low level of one to two percent. In some critical areas like wheat production, oilseeds and pulses it has started stagnating. The farmers who are witnessing fertility going down, seeds being difficult to procure and growing debt burden are resorting to suicide instead of facing up to the situation. The fragmentation of land, inability to reduce our dependence on monsoon by investing in irrigation is making agriculture more and more as means of sustenance instead of being a mean to earn a decent living. The planners continue to talk about huge allocation of resources for upliftment of farmers but it is failing to change the situation. Are we heading for a situation where we lived dependent on ship loads of wheat from USA to supply to the poor.

The unfortunate part is that with growing incomes some of it is tricking down and people in present in present times not only seek wheat or rice, but also edible oil and pulses to meet their requirement of proteins. India has enough foreign exchange to buy these items but does it mean that we have to say good by to slogans like self sufficiency and become dependant on others to feed our population.

To be frank our planners as well as the government has no clear strategy to deal with the situation. It gives subsidy on Ammonia but not on potash and other nutrients with the result that soil quality is suffering. We want a free market economy but also want to control prices of agriculture products while industrial products are allowed to be sell at prices fixed by them. The situation is creating political uncertainty. It results in incumbency becoming a serious factor because major section of our population dependent on agriculture is not getting any benefits or very little from the growth in our national economy.

This challenge of twenty first century will require some out of box thinking. Repeating old slogans like working for common man or poverty eradication will not work. The pressure on land will have to be reduced. Productivity will have to be increased. This requires major initiative by Center State, and our food scientist. Sooner we change to meet the challenge better it will be. The alternative is too dreadful to imagine as it would lead to violence and bloodshed as is being noticed in many areas with growth of Naxalites in rural areas inhabited by tribals and other weaker section. Choice has to be made fast.


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## Bushroda

*The Commercial Vehicle Industry has Been Registering Positive Growth Rates Since 2002* 
Businesswire (Press Release), CA

DUBLIN, Ireland--(BUSINESS WIRE)--Research and Markets (http://www.researchandmarkets.com/reports/c59077) has announced the addition of âIndian Commercial Vehicle Industryâ to their offering. 

Emphasis is laid on the following key subject matters to accomplish the report: 

The transition of the industry from the days of restrictive government policies to free market competition. 

The characteristics of the industry and its demand drivers, with specific focus on the impact of government regulations (overloading, aging & emission norms) and road infrastructure on the industry. 

The changing demand dynamics of the industry with a significant shift in demand from vehicles with GVW >12 to 5 to =16.2 tonnes due to improved road infrastructure and the development of Hub & Spoke model of distribution. 

The increased specialization seen among the CV manufacturers as per consumer preference. 
Segment-wise vehicle sales analysis for the period FY 01-07. Sales projection with a five year horizon, for both Goods and Passenger Carriers. 

Financial profile, international forays, expansion plans of the top five players along with the details of corporate actions by other global and local players in India. 
Commercial Vehicle Industry in top gear 

Approximately 66% of the goods and 87% of the passenger traffic moves via road. This makes the Commercial Vehicle (CV) Industry, the lifeline of Indian economy. With a domestic market size of approximately Rs.23, 275 Crores and export sales of Rs.1, 610 Crores in FY 06, the Indian CV industry is the fourth largest manufacturer of CVs in the world. 

The industry is overwhelmingly dominated by Tata Motors with Ashok Leyland and Mahindra & Mahindra being distant second and third. Eicher Motors and Swaraj Mazda are some other Indian players in this space. 

The industry is cyclical as it draws its demand from the economy. The capital intensity and the high susceptibility to technology changes raise the entry barriers to the industry making it an oligopolistic market. The demand dynamics of the industry is dependent on the general health of the economy, infrastructure facilities (road condition), regulatory environment (emission, loading, aging norms etc.), interest rates scenarios, freight rates and fuel costs. In addition, prices of vehicles, their specifications and applications, fuel efficiency, technological conformity, spare parts availability and manufacturerâs service centre network sway the consumer preference significantly. 

The evolving Hub & Spoke model of distribution, improved road infrastructure and the Supreme Court ban on overloading of vehicles have brought about a shift in the consumer demand. The demand has shifted away from vehicles with GVW >12 to 16.2 tonnes (multi axle vehicles & tractor trailers). The market is now also witnessing increased specialization, with application oriented vehicles viz. cement mixer, LPG carrier, defence vehicles etc being introduced. 

The CV industry has been registering positive growth rates since FY 02. Although growth was subdued in FY 06, the Supreme Court judgment on overloading and the evolving Hub & Spoke model has led to stupendous growth of over 38% in FY 07 for the GC segment. The industry sold 5, 17,648 vehicles in FY 07 (Domestic sales of 4, 67,882 vehicles & Export sales of 49,766). The GC sub-segment of GVW 7.5 to 16.2 to 12 to 5 to 35.2 tonnes has also grown at a very fast pace. 

The Indian CV manufacturers are now attempting to increase the proportion of export revenues. However, the growth in exports at about 8% in FY 07 was relatively slack compared to the earlier years. 

Going forward, we estimate the domestic GC segment to register a CAGR in the range of 7.5-9% in tonnage terms over the next five years (2007-2012). The growth may be higher due to emerging export thrust and tightening of the regulatory environment (e.g. strict implementation of ageing norms etc). 

The domestic PC segment registered a growth of 4.03% in FY 07. The PC exports growth has remained strong in FY 07, registering a growth of over 84%. The PC demand today is largely driven by the private sector players. The State Transport Undertakings being cash strapped hardly replenish their fleet, thus capping the domestic growth in this segment. 

Going ahead, we estimates the PC segment to grow at a CAGR of 5-7% over the next five years (2007-2012).The segment can grow at a higher rate due to privatization of State Transport Undertakings or even privatization of certain profit making routes. 

Just as Indian CV manufacturers are making global forays, so are the global players making Indian forays. MAN AG, International Trucks and Engines Corporation have entered the M&HCV segment through the JV route. Hyundai, Scania, Stokota, Ural are some other International players who have plans to enter the Indian CV market. The competition from local players is also expected to intensify with Bajaj Auto and Piaggio entering the CV market. Moreover, the existing playerâs viz. Tata Motors, Ashok Leyland have also planned huge capacity expansions. 

In the long run, ability to provide high technology products with a wide range covering all the evolving market segments will be the key to success. Hardening of interest rates, increase in operating costs and impending competition from railways are worrisome factors for the industry.


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## Bushroda

*Rupee future crosses $24 mn on Dubai Exchange*
PTI[ FRIDAY, JUNE 08, 2007 06:12:43 PM] 

DUBAI: Indian rupee, which is being traded on a global exchange for the first time, crossed a turnover of $23.24 million on the second day of its debut at the Dubai Commodity Exchange on Friday. 

The latest trading price was $2.4325 , with 477 lots having been traded by the evening on the exchange, latest data shows. 

In its debut trade yesterday, settlement price for 100 Indian rupees was 2.4583 dollars, with 645 lots having been traded. It had hit a high of 2.4615 dollars and a low of 2.4571 dollars during the 12-hour session. 

The volume of the rupee contract is impressive and would pick up more in the days ahead, a market observer said. 

"The DGCX Indian Rupee contract will for the first time in history enable individuals and companies to have the opportunity to hedge and trade their Indian rupee risk on transparent and equal basis that an exchange provides," DGCX Chairman Colin Griffith said. 

"The recent strengthening of the rupee has necessitated the need for an efficient and easily accessible risk management tool which is exactly what this DGCX contract will provide. As the Indian economy continues to grow at record pace, so will the need for this contract," he said. 

Each DGCX Indian rupee contract represents two million rupees. Prices would be quoted in US Cents per 100 Indian rupees, with a minimum price fluctuation of 0.000001 US dollar per rupee (2 dollars per contract). 

At any point in time, DGCX would list the current and next two calendar months for the rupee contract, Griffith said.


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## Bushroda

*Gen-X are drivers of Indian retail boom: study*
Posted June 8th, 2007 by TariqueEconomy By IANS

New Delhi : India's booming retail industry, estimated to become a $427-billion industry by 2010 from the current $328 billion, should increase its focus on the youth as the most potential consumer, says a study. 

The retail sector in India is undergoing a major paradigm shift, boasting of a billion plus consumers of which over 50 percent are less than 25 years of age with an enormous appetite for quality products and have high purchasing power, said YouSumerism - Youth In India: Opportunity Knocks - conducted by leading global professional services firm Ernst & Young. 

Effective capitalisation of India's youth would help the global retailers, who are eyeing major investments in the sector, in securing their business in an emerging market like India where large-scale consumerism has yet not attained maturity. 

"Those living in emerging markets still have the tendency to save money. However by 2010 it is expected that the per capita income in India will reach a tipping point which will then lead to accelerated consumerism in India," Ashok Rajgopal, director (retail industry), Ernst & Young said in a statement here. 

"By targeting the youth population in India, retailers will be investing for the future as they will be able to influence and create loyalty from the start," Rajgopal added. 

According to the study, Indian youth can be classified into three age groups - 13-21, 22-28 and 29-35 - who have different behavioural patterns and thus distinct habits. 

It also elaborates on how consumerism differs between the behaviour of youth in large cities and those in smaller towns, highlighting the fact that regional set-up and ethnic backgrounds also could be used as an effective tool to reach out to the youth. 

"The Indian youth offers a huge lifestyle and luxury products and services consuming audience," stressed Rajgopal. 

He underscored that though the industry continues to be regulated, the retail sector has become the cynosure of a considerable amount of foreign investors. 

Rajgopal said that India currently is most suitably poised for the retail revolution to occur, adding: "The availability of quality retail spaces and brand communication are seen as positive factors inviting investment from retailers in the UK, Spain, Germany, Italy, France and some from the United States as well."


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## Bushroda

*TATA for now*
UK & Global News Distribution

*Applied Language Solutions celebrate the opening of their Indian office and their first customer, TATA, with an Indian Extravaganza to remember!*

[UKPRwire, Fri Jun 08 2007] Applied Language Solutions brought a touch of spice to Huddersfield with their Indian Extravaganza, an event they held to celebrate the opening of their Indian office and their first customer, TATA. This is one of the largest companies in India comprising 96 companies operating in six continents and employing around 500,000 people. The Tata Group's businesses are spread over seven business sectors including Tata Steel, Tata Consultancy Services, Tata Motors and Tata Tea. 

The event was a resounding success, attended by over 100 customers and local businesses and the crew of Dragonâs Den, who came to film the companyâs extensive progress for a follow-up programme since Gavinâs appearance on the show in March. A night enjoyed by all, the guests were able to sample traditional Indian cuisine provided by Curry Cuisine, whilst enjoying memorable performances from Huddersfield-based Salmaâs Bollywood Academy and local Indian musicians, Mohamed Assani and John Ball. 

Gavin Wheeldon, CEO of the Huddersfield-based international translation and interpreting company, speaks no foreign tongues but managed to successfully honour the traditions of the new Indian team members with a speech in their local language, Tamil. 

A delighted Gavin said: âThe Indian Extravaganza was the ideal way for us to show our respect for our new Indian team memberâs culture, and to allow our customers, staff and dignitaries in the UK to experience the wonderful traditions of India. The catering by Curry Cuisine was second to none, the music provided the perfect authentic atmosphere and the Bollywood performance by Salmaâs Academy was excellent! All in all, everyone had a brilliant night.â 

âIt is fantastic to know that so many are supporting us as we get closer to our ultimate goal of global domination. Winning TATA, one of India's oldest, largest and most respected business conglomerates, is an impressive achievement as the market in India is difficult to crack. Changing the attitude of the largest company in India to see the greater value-for-money in purchasing higher quality translation, as opposed to cheaper poor quality, is a feat no other translation company has yet achieved.â 

âWe have been employed by the TATA Group on several separate occasions and each translation project has been completed to the highest quality to ensure that all their intercontinental communications remain clear. This is certainly a fantastic start to our long-standing success in the Indian market, and has paved the way to enable us to get out there and pitch for more large customers.â 

In just over three years, Gavin has taken his Huddersfield-based translation and interpreting company from a one-man operation in his back bedroom into an international company with 70 staff in eight offices world-wide, including Barcelona, Paris, Guatemala, Bulgaria, California and India. 

Gavin enthused: âWe aim to have an office in every country and this is the next step forward to achieving our goal. This is the perfect time for us to expand into Asia as part of our ongoing strategy to globally expand the company and further develop its operations.â 

The Indian office will provide crucial support to the Applied Languageâs global sales and operations and the company is looking to recruit a large number of staff. Various employment opportunities are immediately available, and Applied Language plans to invest a further Â£10 million on expansion in the Asian market over the next five years. 

Gavin said: âIn todayâs business world, more and more companies are realising that communicating in their customerâs language is pivotal to their success in the global trading arena.â 

âIndia was chosen as a place to open an office as it is beginning to emerge as a dominant player in the global market. India is also renowned for having a highly skilled workforce, which is another great benefit of opening an office there. â 

âHaving a presence in Asia will give us a huge advantage. The fastâgrowing Asian economy offers fantastic business opportunities for Applied Language and will give us almost 24 hour global coverage, meaning our customers will have access to our services at any time of the day.â 

Applied Language Solutions are a rapidly growing language solutions company that deliver a high quality personal and corporate language service with optimal quality, price and delivery. 

Applied Language translates all kinds of documents from simple letters to large technical documents, including whole websites and printed catalogues, for specialist Medical, Legal, Financial and Marketing organisations. The company is committed to using only professional in-country translators and interpreters, of whom they have over 6,000 on their books. These translators work in over 150 languages including all the major European, Asian, African, Middle Eastern and American languages. 

Applied Language Solutions now have seven offices world wide: Huddersfield, California, Paris, Barcelona, Sofia, Guatemala City and India, and are proud to work with prestigious customers such as Nike, United Nations and Yahoo!. The company was honoured to be the winner of HSBC Start-Up Star Awards 2006.


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## Bushroda

*Delhi May Consider Restricting Foreign Capital*
Ruth David, 06.07.07, 3:30 AM ET
FORBES, NY

MUMBAI - India should consider discouraging some kinds of capital inflows as it struggles with a rapid appreciation of the rupee, due in part to a surge of foreign money into the country, a key government economic adviser said. 

Capital flows far exceed our current account deficit. We have to be very careful about how to moderate capital flows. We should not send out wrong signals, but at the same time some kinds of capital inflows could be discouraged, C. Rangarajan, chairman of the Prime Ministers Economic Advisory Council, told reporters at a financial conference here.

The rupees appreciation against the dollar has helped to tame inflation, but it also has complicated monetary policy, he said. The rupee has strengthened over 9% against the greenback since the beginning of the year. Inflation, which peaked at 6.7% in January, is now at 5.06%. 

In a bid to suck excess liquidity out of the system, the Reserve Bank of India has raised the short-term rate at which it lends to commercial banks five times since last June to 7.75%, and increased banks cash reserve ratio three times since December to 6.5%. 

The central bank isnt intervening to control the rise of the rupee, which is hurting Indian exporters (See:  Rising Rupee Said To Hurt Indian Exports), because to intervene it would need to buy dollars. That would push money into the system, conflicting with the banks monetary policy of eliminating excess liquidity to control inflation, points out D.K. Joshi, principal economist at the ratings agency CRISIL. 

The objective is to start discriminating between good capital and bad capital. In sectors like real estate, where there is already evidence of overheating, the government is now trying to regulate the inflows of foreign money, he said. The central banks policy of hardening interest rates has also served as a dampener by making home loans increasingly expensive. 

But Joshi said that the governments policy remains one of attracting capital inflows, since they are a reflection of the health of the economy. Because of some macro management issues, we may see some restrictions in sectors where price pressures are emerging, he said.

Rangarajan, a former governor at the Reserve Bank of India, also acknowledged the economy was showing signs of overheating. 

Cyclical overheating in an economy occurs when the existing capacities are being fully utilized and demand pressures are still there. Yes there is, to some extent, cyclical overheating, he said.

The Indian economy has risen at a compounded annual growth rate of over 8.5% in the last four years, but its rapid expansion has fuelled inflation and economists have voiced concerns that such high growth rates are likely to be unsustainable in the coming years.


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## Bushroda

*Trend Watch: 'India`s growth story' unfolds new facets*
MyIris.com 

In the last week, experts expressed their felicity on 9% plus GDP growth revealed by the Indian government. On May 31, official data estimated India`s GDP growth at an annual rate of 9.4% in fiscal year ended March 2007, higher than earlier advance estimates of 9.2% for the same period. 

This fastest rate for 18 years was posted taking support from manufacturing sector which is estimated to zoom at the rate of 12.3% in 2006-07 (9.1% a year ago). Even so, the data brought out alarming figures about agriculture, growth of which slackened to 2.7% in 2006-07 from 6% a year earlier. 

Above 9% growth for the second year in the series, however underweighted the estimates for the last quarter of 2006-07, when major restrictive monetary policy decisions were imposed while aiming at curbing inflation (the policy decisions have lag effects). The central statistical organization, government body estimated the economy to post 9.2% growth in last quarter of past fiscal, lower than 10% for the corresponding period of last year. 
Moreover, sectors like financing, institute real estate & business services, construction and agriculture forestry and fishing, showed a downturn. 

Along with this mixed data, the Government patted its back while pointing at 14.62% growth in the gross fixed capital formation at Rs 8,686.18 billion in 2006-07 (at constant prices). At current prices it is estimated at 29.5% against a corresponding rate of 28.1% in the previous year. The union finance minister P. Chidamaram, expressed his happiness about the growth, and complimented the Indian economy`s shifted to a higher growth trajectory.

Thus, whilst the government is revising its growth estimates in upward direction, international bodies like IMF and World Bank are predicting a slow down in Indian economic growth. World Bank, while giving its long term views, projected the growth to slow to 8.4% in the current financial year, 7.8% in 2008-09 and 7.5% in 2009-10 in its Global Development Finance, 2007. 

The expected downturn is attributed to restrictive policies implemented by Indian policy makers. The bank noted that more restrictive policy conditions will lead to deceleration in investment growth and weaker private consumption and government spending, and thus will contribute to a slowdown in the GDP growth. 

Earlier, International Monetary Fund in its World Economic Outlook, 2007, projected the GDP growth at 8.4% in 2007-08 and 7.8% in next fiscal. 

Economist`s estimates always bring in a wave of fresh air, adding keynotes to India`s growth story. While talking at `the India Investment Show 2007,` organized by myiris.com in association with ICICI Direct on June 2, Saugata Bhattacharya, chief economist, UTI bank said that growth is not a new phenomenon for India. The economy was growing by noticeable numbers since 1998. However, powered by new structural turns in its on-going growth story, India will become an economic giant by 2025. He pointed out that current growth in capital good manufacturing can be a good indicator for future developments.

The economist further pointed out that Indian economy is characterized by balances between consumption and savings, unlike US and China, which are two extremes. He clarified his stand by numbers, which reflected relatively higher consumption in the US economy and that of savings in China. 

The above stated factors, according to him, will lead to sustainable growth to India and allow Indian financial market to provide good returns. 

Going ahead, Dr Ajit Ranade, chief economist Aditya Birla Group, believes that, India will post good growth and returns to investors, however he also pointed out some worrisome factors about India`s macro economic environment posing problems for growing Indian economy. He markedly point out that inflation, fiscal deficit, Rupee and oil prices are the causes of concerns for India`s growth. He further raised question about the continuation of export (excluding software) growth in India. Moreover, he suspected whether the economy will have the appetite to digest more Dollar inflows.

According to him, growth, rising trade, external debt, demographic transition and knowledge base are India`s assets while domestic debt, resources crunch, poverty, inter-state disparity and fiscal deficit can be placed in liabilities side of India`s balance sheet. 

He further explained that, growth will call for higher tax collections, surge in assets prices, positive perceptions of foreign investors which in turn will attract more foreign capital flows. However, at present, infrastructure deficits both in physical and social are constraints for the growth, he feels. 

Given the strengths and weaknesses, and various predictions, the best policy of the hour seems to be `wait and watch` for further key economic data.


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## Bushroda

*Yorkshire puts on the ritz for Bollywood *
By Roya Nikkhah
The Telegraph
Last Updated: 1:03am BST 10/06/2007

Amid a sea of shimmering saris, gold bangles and picture-perfect choreography, Yorkshire was yesterday transformed into an Indian extravaganza for the climax of the Bollywood Oscars.

A county more famous for Wensleydale cheese and the former cricket umpire Dickie Bird than high glamour and movie star Aishwarya Rai had a serious shot of kitsch as the eighth International Indian Film Academy Awards reached fever pitch.

The great and the good of the Bollywood industry were greeted by a four-day fringe festival of Indian culture.

About 30,000 Bollywood fans were at the festival, the highlight of which was last night's awards ceremony at the Sheffield Hallam Arena, watched by a global television audience of more than 500 million and attended by Bollywood royalty, including Shilpa Shetty, the former Celebrity Big Brother contestant, and India's newly married golden couple, Rai and Abhiskek Bachchan. Leeds hosted "Bollywood in the Park", which attracted more than 60,000 visitors eager for a glimpse of the celebrities.

With bangra music blaring from giant speakers, the air around Roundhay Park was heavy with the scent of saffron and samosas.

Girls dripping in rhinestone with eyes heavily made up with kohl prowled the park with autograph books. "I'm dying to see Salman Khan in the flesh," said Navjit Abdennour, 17, a student from Leeds. "I've seen all his films and he is so handsome and has such big muscles. I just can't believe he is coming to somewhere like Leeds."

Nor could Michael Armitage, 80, a retired engineer from Leeds. In a cloth cap and twill shirt, Mr Armitage looked somewhat bemused as he peered through the window of a parked pink stretch limousine to check if Shilpa Shetty was inside. "I just came along to have a look and try some of the different foods as I don't know much about Indian culture," he said. "It's all very colourful and exciting but it is a bit noisy, isn't it?"

Local celebrity Sir Jimmy Savile put in an appearance, perhaps hoping to bag himself a Bollywood bride in the "Wedding and Lifestyle" arena.

Over four days, Yorkshire hosted more than 50 IIFA-related events in Leeds, Sheffield, Bradford, York and Hull. The choice of Yorkshire has raised eyebrows, particularly as the relatively unglamorous city of Sheffield beat New York, Barcelona and Sydney for the right to host the awards ceremony.

Judith Donovan, head of the Yorkshire Tourist Board, said: "This is only the tip of the iceberg. India is the next big tourist market for Great Britain and this event will guarantee that all those visitors go straight past London and on to Yorkshire."

Yorkshire Forward, the development agency, invested more than £2.5 million in the event. The local economy is expected to reap about £10 million.


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## Bushroda

*Latin America attracting investors from India*
*Similarities in consumer bases help make the region a natural market.*
By Marla Dickerson, Times Staff Writer
June 9, 2007 


JUITEPEC, MEXICO  Ask for directions to Dr. Reddy's Laboratories Ltd. in this industrial city in central Mexico and locals will give you a curious look.

Many are unfamiliar with the drug maker, one of India's largest pharmaceutical companies, which purchased a production facility here in late 2005 for about $59 million. 

It may be the first time they've heard of an Indian company doing business in Mexico, but it won't be the last.

Indian investment in Latin America is relatively small, but it's growing quickly. Indian firms have invested about $7 billion in the region over the last decade, said Rengaraj Viswanathan, head of the Latin American division of India's Ministry of External Affairs in New Delhi. He figures that amount will easily double in the next five years.

While India has become a magnet for foreign investment, Indian companies are looking abroad for opportunities, motivated by declining global trade barriers and fierce competition at home. Their gaze is falling on Latin America, where hyperinflation and currency devaluation no longer dominate headlines.

"Latin America is becoming a stable and increasingly growing and prosperous market that offers opportunities for our companies," Viswanathan said.

Like China, India is trying to lock up supplies of energy and minerals to feed its roaring economy. Indian firms have stakes in oil and natural gas ventures in Colombia, Venezuela and Cuba. Bolivia last year signed a deal with New Delhi-based Jindal Steel and Power Ltd., which plans to invest $2.3 billion to extract iron ore and build a steel mill in that South American nation. 

At the same time, Indian information technology companies are setting up outsourcing facilities to be closer to their customers in the West. Tata Consultancy Services is the leader, employing 5,000 tech workers in more than a dozen Latin American countries. 

Last month it inaugurated an office in Guadalajara, Mexico, that company officials said would soon employ about 500 people and as many as 10 times that within five years. Competition for tech workers in India has driven up costs there, as has the rupee's rise against the U.S. dollar, enhancing the attractiveness of Latin America.

Indian manufacturing firms, accustomed to catering to low-income consumers at home, are finding Latin America a natural market. Mumbai-based Tata Motors Ltd. has formed a joint venture with Italy's Fiat to produce small pickup trucks in Argentina. Generic drug makers such as Dr. Reddy's are offering low-cost alternatives in a region where U.S. and European multinationals have long dominated.

"We are looking at markets to grow," said Puvvala Yugandhar, senior director of business development at Dr. Reddy's. 

By sharing technology and employing chemists, engineers and programmers, Indian companies are helping to develop Latin America's human resources  and not just extract its natural ones. That's boosting the nation's standing among the region's leaders. 

Some see India as a partner rather than a rival that's out to steal their resources and jobs, a common worry here about China.

Brazilian President Luiz Ignacio Lula da Silva this month traveled to India with a contingent of entrepreneurs looking to forge stronger ties. Mexico sent its biggest-ever business delegation to India in March, and the two nations recently signed an economic cooperation accord. Mexican President Felipe Calderon in May snipped the ribbon inaugurating Tata Consultancy Services' Guadalajara facility.

"He knows that the way to compete with China is in services," said Ankur Prakash, general manager of Tata Consultancy Services in Mexico. He said 98% of his company's employees in Latin America were locals.

"We are not sending 747s full of Indians to this part of the world to work," Prakash said. "We are here to create jobs, not to gobble things up."

Mexico has been particularly hard-hit by China's rise. The Asian nation's exports of textiles, shoes, electronics and other consumer goods have cost Mexico tens of thousands of manufacturing jobs, displaced it as the United States' second-largest trading partner and flooded its domestic market with imported merchandise. Mexico's trade deficit with China was a record $22.7 billion last year. China has invested less than $100 million here since 1994, according to figures from the Bank of Mexico.

Mexico's trading relationship with India, albeit small, is much more balanced. Mexico's trade deficit with India was just under half a billion dollars last year. Indian companies have invested $1.6 billion here since 1994  about 17 times more than China  according to Mexico's central bank. Viswanathan of India's Ministry of External Affairs calculates Indian investment in Mexico to be around $3 billion.

Some of that is in basic industries and traditional maquiladora factories making goods for export. Mexico's biggest steel plant is owned by ArcelorMittal, whose president and chief executive is Indian tycoon Lakshmi Mittal, founder of Mittal Steel. Mittal merged with Luxembourg-based Arcelor last year to form the world's largest steel company.

Consumer electronics firm Videocon, based in Mumbai, owns a factory in Mexicali, Mexico, that produces television picture tubes.

But IT companies, including Sasken Communication Technologies Inc. and Hexaware Technologies, also are setting up operations in Mexico. Bangalore-based Infosys Technologies Ltd. is building a service center in northern Mexico that will open this summer and employ 1,000 people within five years, company spokesman Peter McLaughlin said. It will provide consulting and back-office services such as accounting for corporate clients in the U.S. and Latin America.

McLaughlin said the company chose Monterrey because it liked the city's modern infrastructure, educated workforce, abundance of bilingual talent and proximity to the U.S.

"It's imperative to serve our clients in the time zone that's convenient to their businesses," he said.

Indian pharmaceutical companies, too, are finding Latin America to be healthy territory for expansion. Firms including Ranbaxy Laboratories Ltd., Aurobindo Pharma Ltd. and Cadila Pharmaceuticals Ltd. have sales or manufacturing operations in the region.

Based in Hyderabad, India, Dr. Reddy's sells its antibiotics, stomach remedies and allergy medications throughout Latin America. But the Mexican plant, purchased from Switzerland-based Roche in late 2005, is its first venture in manufacturing in the region. 

The factory's main product is naproxen. That's the active ingredient in over-the-counter painkillers such as Aleve, which is manufactured by Bayer, a major customer of Dr. Reddy's. 

Yugandhar, Dr. Reddy's business development director, said the purchase was attractive for a variety of reasons. The plant, which employs 340 people, is approved by the U.S. Food and Drug Administration for exports to the United States. It has positioned the company to expand in Mexico, and the purchase overnight turned Dr. Reddy's into the world's No. 1 supplier of naproxen. 

"We wanted to be in the top 10 players in the world  in generics," Yugandhar said. "You can't do that [by growing] organically."

Yugandhar is the sole Indian at the plant, but says he has had little trouble fitting in. Although there are no Indian restaurants near him, spicy Mexican food has helped fill the void. He is working on his Spanish, but most high-level meetings take place in English, the company's official language. Mexicans handle the day-to-day operations at the plant.

Plant director Francisco Casillas said the Indian owners were first-rate scientists who were highly cost-conscious, a legacy of the hotly competitive, low-margin Indian market. He misses the abundant resources the facility had under its European owners. But he has developed respect for the Indian approach on his travels to headquarters in Hyderabad. 

*"They are always looking for more efficiency, productivity and cost savings," said Casillas, who keeps a figure of the elephant-headed Ganesh, Hindu god of good luck, on his desk. "They have taught us a lot."*


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## Bushroda

*Kolkata can be gateway to S-E Asia*
Press Trust of India

RANCHI, June 9: A multi-infrastructural link with Kolkata would help South-East Asian nations and Japan in strengthening economic relations with Indian states such as Bihar, Orissa, Jharkhand and West Bengal, Japans Consul General, Mr Noro Motoyoshi said today. 

Kolkata could be the gateway to South-East Asian countries, South Korea, China and Japan and a multi-infrastructural link including the railways, airports, roads and ports would help eastern states in trading, Mr Noro told a Press conference here. 

On a two-day visit to Jharkhand, he said the mineral-rich state should have a strong infrastructure connection with Kolkata.

During my meeting with the chief minister I told him the importance of a strong linkage between Jharkhand and Kolkata to develop the economy of Jharkhand, he said.
Asked whether Japan was interested to invest in such infrastructure in Jharkhand, Mr Noro said they were to be shortlisted by the Indian government. 

Recalling the cultural treaty between the former Prime Minister Jawaharlal Nehru and Japanese Premier Missi in 1957, Mr Noro said Japan was interested in strengthening relations in all spheres including political, economic, culture and military as the two nations celebrate 50 years of the agreement.



> *Kolkata can be gateway to S-E Asian nations: Japan*
> 
> Ranchi, June 09: A multi-infrastructural link with Kolkata would help South-East Asian nations and Japan in strengthening economic relations with Indian states like Bihar, Orissa, Jharkhand and West Bengal, Japan's consul general Noro Motoyoshi said Saturday.
> 
> Kolkata could be the gateway to South-East Asian countries, South Korea, China and Japan and a multi- infrastructural link including the railways, airports, roads and ports would help eastern states in trading, Noro told a press conference here.
> 
> On a two-day visit to Jharkhand, he said the mineral- rich state should have a strong infrastructure connection with Kolkata.
> 
> "During my meeting with the Chief Minister (Madhu Koda) I told him the importance of a strong linkage between Jharkhand and Kolkata to develop the economy of Jharkhand," he said.
> 
> Asked whether Japan was interested to invest in such infrastructure in Jharkhand, Noro said they were to be shortlisted by the Indian government.
> 
> Recalling the cultural treaty between former Prime Minister Jawaharlal Nehru and Japanese premier Missi in 1957, Noro said Japan was interested in strengthening relations in all spheres including political, economic, culture and military as the two nations celebrate fifty years of the agreement.
> 
> Noro also highlighted Japanese government's intention of strengthening defence relations between the two nations and said Japanese maritime self defence force already had an extensive drill with India.


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## Bushroda

*Operon, JH BIO and MAXCOOL to have manufacturing facility in India*
Bangalore, uni: 

*Korean operon, JH BIO and Indian air condition manufacturer Maxcool announced a strategic alliance to establish a state-of-the-art facility to manufacture ultra low temperature freezers, freeze dryers and other products related to Cryogenic technologies. *

Korean operon, JH BIO and Indian air condition manufacturer Maxcool announced a strategic alliance to establish a state-of-the-art facility to manufacture ultra low temperature freezers, freeze dryers and other products related to Cryogenic technologies, in the city on Saturday.
Speaking to reporters, Maxcool Managing Director G V K Rao said the facility would be set up near Dehradun or Mumbai. The investment would be around Rs.20 lakhs in next three years, he added. 

*Technology* 

He said various cryogenic technologies and know how available with Operon, protected by number of patents in several countries together with the technical and manufacturing capabilities of Maxcool would be exploited in commercialising the technologies for numerous applications. 

The joint venture would also explore the world markets, besides capturing good market share in India. He said the booming economy and excellent growth of biotechnology sector offered a very significant opportunity for the products manufactured in India to attain critical volumes.


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## Bushroda

*CII, MARG to train unskilled workers in Tamil Nadu*

Chennai, June 10 (IANS) The Confederation of Indian Industry (CII) and MARG Constructions Ltd have joined hands to train 5,000 unskilled workers for the construction industry in Tamil Nadu to meet the demand for skilled personnel.

The industry body Saturday signed a memorandum of understanding (MoU) with the private firm to launch its Grassroots Level Skill Development Initiative (GLSDI).

This programme would provide pre-employment skills and technical training to 5,000 unskilled workers by the end of 2008.

"The specific objective of the CII-MARG GLSDI project is to generate social inclusiveness and to provide socially and economically vulnerable youth a chance to be part of the mainstream economy," said B. Santhanam, managing director of Saint Gobain Glass India and chairman of the CII Task Force on Skills, Employability and Affirmative Action.

"The initiative would bridge the gap between demand and supply for skilled human resources in the entire Sriperumbudur, Oraggadam, Cheyyur blocks that are potential zones for extensive development in the engineering and IT sectors," Santhanam said.

MARG Constructions managing director said: "The programme will go a long way in making a difference to the growth of society.

"This initiative will grow into a movement that will meet the challenges of sustainability and of inclusive growth," he added.

IANS


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## Bushroda

*United colours of Air-India crew* 
P R Sanjai / Mumbai June 10, 2007 

The Air-India and Indian Airlines combine, wearing the new Air-India brand and livery, is set to give a snazzy new look for its cabin crew. 

It has roped in internationally acclaimed designer Ritu Beri and fashion guru Pierre Cardin to do the honours. While Beri will design the uniforms for the female cabin crew, Cardin will give the male cabin crew uniforms a new look. 

Air-India Chairman and Managing Director Vasudevan Thulasidas confirmed the development but declined to divulge more details. 

Ritu Beri is the first Asian designer to head a French fashion brand, Scherrer, while globally renowned Pierre Cardin is known for its avant-garde style and space-age designs. 

A top Air-India executive gave Business Standard some cues on what to expect from the new uniforms, which will be international and compete with those of Jet Airways and Kingfishers. 

There will be one set of uniforms for all Air-India cabin crew post the merger. Certainly, we will not drop the traditional sarees. But the new designs would definitely have a modern touch and will reflect contemporary fashion without losing out on Indian culture. 

Sources said Beri and Cardin have secured the contract despite tough competition from the countrys top fashion designers such as JJ Walia, Tarun Tahiliani, Satya Paul and lifestyle and luxury brand Ravissant. 

The new Air-India entity is likely to announce and showcase these new uniforms in a grand function soon. The designs of these uniforms will reflect the culture of various states, sources said. 

The state-owned carrier is following a trend started by its rivals like Kingfisher and Jet Airways. Italian fashion designer Roberto Capucci and his partner Enrico Minio recently helped Jet Airways redesign its cabin crew outfits. 

The fact that Capucci had never designed airline uniforms before, coupled with his reputation for elegant style, is what made him the choice to create something never seen before in airline uniforms. 

Meanwhile, Air-India has also finalised US-based Webber Group and Contour Group of the UK for supplying seats for its Boeing 787 airplanes, better known as the Dreamliners. 

The executive seats, that can be turned into flat beds, in these planes would be supplied by Contour, while Webber will provide the economy class seats.


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## Bushroda

*Institutes unlimited* 
*India&#8217;s sons and daughters are beyond state control*
Posted online: Sunday, June 10, 2007 at 0000 hours IST 

The times they are a-changin&#8217; sang Bob Dylan more than 40 years ago. It could find a ready echo in what is happening to our labour supply. A country that has alternately despaired and preened on its seemingly inexhaustible supply of labour, is being asked whether the wells will run dry. Are there enough skills available to keep the economy growing at this pace? When one-tenth of an estimated labour force of 400 million is unemployed, that might seem like a perverse question. But, increasingly, global investors are making that query. 

The reasons are obvious. Continuing with the oil sector analogy, the wells may be deep enough, but a lot of that oil is not extractable. But then, just as new technologies are turning hitherto unviable wells economic, investment in education and training is shaping the latent pool of labour the way the economy can make use of it. Government educational systems have little to do with this. It is private enterprise that has stepped forth to acquaint youngsters with the skills they need to meet the economy&#8217;s demands. The quality of training covers a range from superlative to ghastly, but it is largely for the market force of recruitment to separate and push them in the desired direction. 

For now, we should be grateful that they exist, for there would be no other way to overcome India&#8217;s acute shortage of skilled labour. If India got $15 billion of FDI in 2006-07, a large part was on the assumption that this infusion of capital will find the appropriate labour to spin the desired profits with (given, of course, usable land and risk-taking enterprise, the two other factors of production that have justifiably seen their rewards shoot up). We must, therefore, recognise the stellar contribution made by private institutes towards answering the labour supply question. 

It would be shortsighted of the government to react to sporadic reports of dubious practices at private technical training institutes by imposing a regulatory system that brings the mushrooming of these academies to a premature end. Government-run technical training is taking too long to expand. The six planned AIIMS-like institutes are still on the drawing board. Movement on the new IIITs and IITs is equally slow. The budget of the department is quite stretched, at just Rs 9,209 crore for 2007-08 (about Rs 1,500 crore of which is earmarked for existing IITs). 

To top it all, India&#8217;s higher academia is suffering the consequences of a control system that does not even think of education capacity as a crisis at all. It is still impossible to set up a proper full-faculty multi-discipline university in India or form a partnership with a foreign university. The sector, at its core, remains shut. The attitudes here seem to bestow education with a sanctity too precious to allow the taint of foreign influence, which is totally absurd in an era of openness and globalisation. Most remarkably, the closed system appears designed to ring-fence the minds that require the least protection &#8212; those of intellectuals, the very people who should be trusted to think for themselves. Larger freedom in the education/training sector will go a long way towards equipping young Indians with the skillsets required to sustain the growth trajectory well into the future. If the government cannot lend the future a hand, it should step out of the way.


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## Bushroda

*IBM announces Big Green Project in India* 
itVARnews Staff 
Saturday, June 09, 2007 

IBM announced âProject Big Greenâ in India. The initiative includes new products and services for IBM and its clients to sharply reduce data center energy consumption, transforming the worldâs business and public technology infrastructures into âgreenâ data centers. 

IBM launched this initiative as part of the global Intelligent Energy campaign, aimed at helping economies cope with the existing and impending energy crisis. Last month, IBM announced that it will redirect US$ 1 billion a year, globally, across its businesses, to mobilize the companyâs resources to dramatically increase the level of energy efficiency in IT.

IBMâs efforts under the Intelligent Energy campaign will be channeled through four specific initiatives - IBMâs Client Innovations in Energy, IBMâs Application of Technology & Services for Energy Efficiency, IBMâs Activities with Energy Influencers, and Environmental Efforts at Big Blue. With its work under each of these pillars, IBM aims to create a holistic approach to addressing the energy issue facing the globe. 

Announcing âProject Big Greenâ in India, Vice President - Site & Facilities Services, IBM, Steven Sams said, âBusinesses around the world are consuming extreme amounts of energy through their use of information technology --- over 100 billion kilowatts per year globally -- furthering today's energy crisis. In 2007, there will be $10 billion spent on data center energy worldwide, and IDC predicts that power and cooling spend in the data center will grow at eight times the rate of hardware spend.â

âThe fact is that the data center energy crisis is inhibiting our clientsâ business growth now and in the future. According to Morgan Stanley, energy used to power and cool todayâs data centers represents 44 percent of a data centerâs total cost of ownership â and for a company of any size today, this can be a huge saving, besides it being a great contribution towards protecting the environment.â he added.

Elaborating on the issue in India, Country Manager, eServer pSeries, IBM India, Jyoti Satyanathan said, âIn India, the need for intelligent energy solutions is more acute than many other nations. As per IDC, IT spending in the Asia-Pacific region is expected to grow by 52 percent to reach US$162.5 billion by 2010 â and this growth is driven by India in addition to China. However, our country is already facing an energy crisis. According to the Central Electricity Authority (CEA), at the current annual generation capacity of 1,30,000 MW, we face a shortage of nearly 9% with peak load deficits being higher at 10-11% and it will only get worse. It is important that Indian organizations start taking this problem seriously, and make the appropriate investments so that their energy spends can keep pace with their growth.â

âThe Green Datacenter offerings can help conserve energy, and cut a typical datacenter cost by half. In addition, they can protect the environment by reducing emissions that amount to taking 1300 automobiles off the road,â he added.

âProject Big Greenâ is an initiative under one of the four pillars of the Intelligent Energy Campaign - IBMâs Application of Technology and Services for Energy Efficiency. It targets corporate data centers where energy constraints and high costs can limit growth. As part of this initiative IBM will create a global âgreenâ team of over 1000 energy efficiency specialists from across the company, to offer âgreenâ solutions comprising IBMâs hardware, software, services, research, and finance offerings. 

IBM currently runs the worldâs largest commercial technology infrastructure, with more than eight million square feet of data centers in six continents. In India, IBM has executed datacenter projects exceeding 2.5 lakhs square feet for over 55 clients. 

The savings are substantial -- for an average 25,000 square foot data center, clients should be able to achieve 42 percent energy savings. Based on the energy mix in the US, this savings equates to 7,439 tons of carbon emissions reduction per year. IBM expects this will also help save more than five billion kilowatt hours of energy per year, globally.

By using these technologies internally, IBM expects to double the computing capacity of its data centers within the next three years without increasing power consumption or its carbon footprint. India houses one of the largest IBM data center in the Asia Pacific region with more than 4,800 sq feet.

IBM will soon launch an open, Web-enabled clearinghouse for energy efficiency incentives. The Energy Efficiency Incentive Finder will serve as a central website for details about energy efficiency incentives and programs that are available from local utility companies, governments, and other participating agencies anywhere in the world.

IBM Global Financing (IGF), the financing business segment of IBM, will provide a "green wrapper" of financing solutions to help data center owners access or acquire the hardware, software and services they need to build an energy efficient data center. IGF's simple financing solutions to qualified customers will also help alleviate some of the capital constraints and allow enterprises the opportunity to align their upfront costs to anticipated project benefits. Easy lease and loan terms will also help facilitate the planning and tracking of project costs.

According to the Integrated Energy Policy document (Hon. Prime Ministerâs speech at the Energy Conclave 2006 - âImplementing the Integrated Energy Policy: The Way Forwardâ) the estimated energy requirements in the year 2030 will be higher than todayâs levels by a factor of anywhere between 4 and 5, if our economy grows at around 8% per annum. The figures of future requirements are gigantic. Electricity generation capacity would need to go up from our current installed capacity of a 131,000 MW to between 800,000 to a 950,000 MW.


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## Bushroda

*Climate Change: Indian emissions  An opportunity in Asias booming economy*
Ethical Corporation

Indian companies focus when there are profits to be made, and are only slowly tuning in to the emissions debate. So a stronger regulatory environment is required for real progress to be made

Industry in India tends to act fast where it sees opportunities to gain revenue and drag its feet where there is no money to be made. At present, there are no regulations on greenhouse gas emissions in the country, although financial incentives to invest in emissions reduction do exist. 

According to Dr Albrecht Kaupp of the Indo-German Energy Programme, who advises the Indian governments Bureau of Energy Efficiency, the market potential in energy efficiency, energy conservation and management is over $2 billion a year. Barely a fifth of this potential is currently exploited.

Several reports, including the latest one by the Intergovernmental Panel on Climate Change, note that India will be among the countries worst affected by rising temperatures. Lehman Brothers have estimated India will suffer an estimated 5% loss of GDP due to climate change. This is twice the cost to the EU, the biggest OECD loser, and more than one percentage point higher than the cost to Africa.

*Rapid growth*

Meanwhile, from the early 1990s, India has experienced one of the fastest economic growth rates in the world, reaching over 9% last year. The contribution of India to global carbon dioxide emissions is around 4%, but it is growing fast as the country develops new power plants. 

According to the 17th Electricity Power Survey of the Indian government, Indias peak electricity demand was 75,756 MW in 2003, and will more than double to 152,746 MW by 2011-12. 

And managing the environmental impact of growth is increasingly under the spotlight in India. A recent World Bank report, Strengthening Institutions for Sustainable Growth: Country Environmental Analysis for India, has identified environmental sustainability as the next great challenge that India faces along in its path to development. 

According to the report, only half of Indian industries monitored complied with government pollution standards. And these monitoring programmes do not cover many small and medium enterprises, which are less able to afford clean technology and pollution controls. 

*Clean development leader*

Traditionally, Indian industry has been slow in adopting environmental standards in comparison to its speedy economic growth. But in contrast to industrys generally poor environmental records, India is the world leader in Clean Development Mechanism projects. 

The Clean Development Mechanism (CDM), proposed under the Kyoto Protocol, is an instrument to promote foreign investment in greenhouse gas emissions reduction projects in developing countries. The latest figures put out by the Indian ministry of environment and forests talk of an investment of 499 billion rupees (around $12 billion) in 591 CDM projects generating over 379 million carbon credits. 

But, is Indian industry doing anything at all except churning out project proposals on Clean Development Mechanisms? 

*Leading lights*

Some far-sighted corporates have taken unilateral action. Leaders like ITC and Tata Steel have shown foresight and taken steps to address their greenhouse gas emissions. 

ITC is one of Indias largest private sector companies with interests in cigarettes, hotels, agri-business and information technology, and beyond. Company chairman Y C Deveshwar announced in 2006 that ITC had become carbon positive. It has done so on the back of energy conservation measures, using low carbon fuels and creating carbon sinks in its large-scale agro-forestry programmes. 

Tata Steel, which recently acquired Corus Steel, has also taken steps to stabilise and reduce its energy consumption. 

Some attempts have been made to drum up popular support for tackling climate change. Greenpeace has joined with CNN-IBN, the television news network, launching a campaign to replace incandescent light bulbs with energy saving lamps.

*Shareholder pressure*

And there is now increased pressure from global investors for Indian companies to act on climate change. For the first time this year, the top 100 companies listed on the Bombay Stock Exchange completed questionnaires about their greenhouse gas emissions and preparedness to tackle climate change. 

The Carbon Disclosure Project, representing a group of 284 global institutional investors with assets of $41 trillion under management, has asked companies to evaluate the risks and opportunities facing them due to a changing environment.

Calls for better transparency on emissions and the evaluation of risk from rising temperatures are encouraging Indian companies to address the issue of climate change. Without government incentives or regulations to reduce emissions, however, the majority of Indian business may continue stalling.

The Indian government has started taking small steps by outlining new regulations promoting energy efficiency of appliances and developing green building codes, but larger and more comprehensive measures will have to wait until a post-Kyoto agreement takes shape. 

The governments position is that global warming needs to be addressed through common but differentiated responsibilities and that the industrialised countries must bear the burden of their historical emissions. 

Until such time, the governments position is that it will not take on any green house gas reduction targets.


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## Bushroda

*U.S. Tech Industry Pleads for Fewer Restrictions on Foreign Workers*
Marcus Yam (Blog) - June 8, 2007 8:17 AM
DailyTech, IL

*Indian outsourcing firms, Microsoft, Google and others speak out on the restrictions on hiring foreign help*

The pervasiveness of the Internet allows for a new definition of a global market, opening doors not only for businesses, but also labor forces. While a corporation may cater its products and services to a worldwide audience, it must adhere to strict rules with it comes to their human resources.

One such regulation by the U.S. government is the H1-B non-immigrant visa, which allows employers to seek temporary help (six years per visa) from skilled foreigners who have the equivalent U.S. Bachelor's Degree education. The most well known example of H1-B visa holders are workers from India providing IT duties to large Indian outsourcing firms and U.S. corporations. Out of the top 10 companies receiving workers thanks to H1-B visas, seven of them are Indian outsourcing firms, while the remaining three are Microsoft, IBM and Oracle.

In the early 1990s, the quota on the number of H1-B visas issued was rarely met, but in the last few years, all H1-Bs were snapped up in just a matter of months. Companies who are unable to acquire adequate number of visas will have to wait until the next fiscal year before refilling their applications. For the fiscal year 2008, the entire quota was exhausted before the end of the first day on which applications were accepted.

The U.S. government caps the number of H1-B visas at 65,000, with provisions for more workers with foreign graduate degrees and when the quotas are met. In May of this year, the Senate voted to increase H1-B visa fees from $1,500 to $5,000. Proceeds from the fees are used to fund U.S. educational programs.

Senator Bernie Sanders (I-VT), a strong supporter of the bill who originally sought for a greater fee increase to $8,500, explained his reasons for the increase to the Senate: "What many of us have come to understand is that these H-1B visas are not being used to supplement the American workforce where we have shortages but, rather, H1-B visas are being used to replace American workers with lower cost foreign workers."

The National Association of Software and Service Companies (NASSCOM), a group that represents a collection of Indian companies, was quick to refute the Senators claim, citing information that says there is no link between U.S. job losses. "These two do not seem to go hand in hand as exhibited through the 2006 survey by Money Magazine," NASSCOM said regarding Sanders statement.

The group also pointed out that U.S. firms also benefit from its relationship with Indian companies. "India is a major buyer of a whole host of US goods and services, including aircraft, wheat, branded garments and accessories etc... An overwhelming majority of the computers and software used by India's IT industry as also other sectors of the economy are those produced by US companies like HP, Dell, Microsoft and Oracle," it said.

The Information Technology Association of America (ITAA) also opposes the recent changes in the H1-B bill because it "seems to give short shrift to innovation and the competitiveness of Americas high tech industries." The ITAA expressed its concerns (PDF) in a letter to Senate leaders (PDF) on both sides of the aisle as well as the negotiators of the compromise measure.

"Americas economy is strong and vibrant, but the countrys future competitiveness rests on the ability of firms to recruit globally. As you know, the H1-B cap for FY `08 was reached in April, shutting out US employers from recruiting highly skilled foreign nationals who are graduating from US institutions with degrees in computer science, engineering, mathematics and other scientific and technical fields. Vacancies go unfilled and highly valued workers are forced to leave the country," the letter read.

The letter later concludes, "There is no doubt that immigration reform is needed that is tough and protects our border. But we have the opportunity to pass a law that is fair, practical and strengthens our economy. Most importantly, we need to have workplace enforcement that is effective, and uses the best available technology."

Regardless of job loss statistics, Sanders believes that large corporations like Microsoft should divert some of its off-shore spending back home. "To win favor in China, Microsoft has pledged to spend more than $750 million on cooperative research, technology for schools and other investments," Sanders believed. "If Microsoft and other corporations have billions of dollars to invest in technologyin China, these same companies should have enough money to provide scholarships for middle-class kids in the United States of America."

This shortage of visas is an issue that many tech firms have been wrestling with for a number of years. Bill Gates said in his congressional testimony in 2005, "You can't imagine how tough it is to plan as a company where we say, 'let's have this engineering group and staff it' ... we'll have Canadians waiting at the border until some bureaucratic thing happens where a few more [visa spots] get opened up. That's just wounding us in this global competition." Gates was hoping to convince politicians to remove the caps on H1-B visas.

Although it is not in the top 10 companies receiving H1-B visas, Google strongly urged the U.S. government to raise the quota on H1-B visas. Google Vice-President of People Operations, Laszlo Bock, pointed out in his congressional testimony that the Internet giant was built on the foundation of foreigners, citing Google co-founder Sergey Brins Soviet Union family origins.

"We opened our doors to Sergey's parents  a mathematician and an economist," said Bock. "Our educational system served Sergey well  he attended the University of Maryland and Stanford University. Our free market economy supported Sergey and Larry's entrepreneurship and rewarded it when they proved that they could turn their idea into a successful business."

Bock also said that Googles principal scientist and one of the chief creators of Google News, Krishna Bharat, was born in India and is a direct addition to the company through the H1-B visa. About eight percent of Googles U.S. workforce is on a six-year H1-B visa.

Bock wasnt campaigning only for his companys interests, but rather of the entire IT industry. "In fact, Google is just the most recent story for immigrants in Silicon Valley. Intel, eBay, Yahoo, Sun Microsystems, and many other companies were all founded by immigrants who were welcomed by America," he said. "We are not the only ones recruiting talented engineers, scientists and mathematicians. We are in a fierce worldwide competition for top talent unlike ever before. As companies in India, China and other countries step up efforts to attract highly skilled employees, the U.S. must continue to focus on attracting and retaining these great minds."


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## Bushroda

*Mumbai Walks a Fine Line for Power*
IEEE Spectrum, NY

India's on-again-off-again economy is back on again. *Fed by the outsourcing boom, India's largest city, Mumbai, is flourishing and growing skyward. A new megacity is rising from the rubble of an ancient capital--with all the modern amenities. *This means that Mumbai's planners have a lot to cope with these days. Chief among their responsibilities is keeping the lights on, literally. As we learn from Senior Editor Harry Goldstein, that task is a high-wire balancing act in which the experts are performing some nimble acrobatics to keep the power up and running. Reporting back from the city once called Bombay by westerners, Goldstein analyzes the nature of the problem in this month's feature "How to Blackout-Proof a City". 

With some 18 million consumers, Mumbai's electric power grid is one of the most insatiable systems in the world. It is hardly one of the most robust, however. In periods of peak demand, local authorities told Goldstein, managing the load is a precarious venture. It is a bit of irony that, just as India is poised to become an economic superpower, the utilities in the country's showcase city have launched their own public-service campaign urging Mumbai's citizens to conserve energy or face extensive planned outages this summer for the first time ever. 

"The load is rising a lot faster than anybody realizes," said Gerry F. Grove-White, executive director and chief operating officer of India's Tata power utility. "I look out my flat and every tower crane I see, I see increased load. And the investment in generation has not kept pace. Last year we scraped by. This year the jury is out when summer comes." 

Mumbai has long been blessed with abundant power, delivered chiefly from local hydroelectric projects that have been running since colonial times. The problem today is matching the rate of growth of the 21st Century version of the city. Increasing the availability, reliability, and quality of electricity is a long-term goal that will be met only with tens of thousands more megawatts of generation capacity. In the near term, administrators and engineers from Mumbai's power companies, along with government regulators, are doing their best to stave off planned brownouts, not to mention even worse conditions. 

"We're going to have to take a big deep breath and say, we're going to invest," Grove-White told Goldstein regarding Tata's planning. "We know what we need to do, and we will sell this output ultimately." 

In the meantime, with the peak demand period of the summer month's looming, Mumbai's utilities and local government have mounted an all-out public awareness campaign to use energy wisely. The message from the power companies is clear, Goldstein writes. To get through the tropical season without significant load shedding or blackouts, Mumbai's consumers will have to sacrifice a few of the conveniences they've come to enjoy over the past few years. 

Should that advice fail to reach receptive listeners, what has now been turned on could just as easily be turned back off again, no matter how nimble its providers skillfully perform.


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## Bushroda

*India likely to capture 15 pc of KPO by 2010*

New Delhi, June. 10 (PTI): Highlighting the continued growth story of India, the Government on Sunday said the country is likely to capture 15 per cent of over 54 billion dollars in the upcoming Knowledge Processing Outsourcing (KPO) industry by 2010. 

Pointing out that India is one of the few economies expanding at fast pace, Commerce and Industry Minister Kamal Nath said the country has huge potential in the KPO sector. 

Addressing the Plenary Session on the Emerging Power of Emerging Markets at St Petersburg, he said an estimated growth of nine per cent by India over the next five years would require investment rate of 35.1 per cent of GDP. 

At the session, organised by the International Economic Forum, he said the organised retailing in India is expected to grow at 37 per cent in in 2007 and 42 per cent in 2008. 

"This is also offering opportunities in the real estate sector," he said. 

Quoting a McKinsey study, Nath said the Indian pharma industry is projected to grow to 25 billion dollars by 2010. 

He emphasised the opportunities presented by India's farm and food processing sector, which has been identified as a priority area. He also spoke of India's strength in the gems and jewellery and automobile and auto-components sector. 

Kamal Nath said the change in the global trade has come about as a result of the rise of the emerging markets and pointed to India as an example of the growing clout of these countries in the global economy. 

"While India continues to alter the coordinates of global trade, the country itself has seen robust growth in manufacturing ...Very few countries in the world match these growth rates," he said, according to an official release here.


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## Bushroda

*Bharti to open retail stores early next year* 
Statesman News Service 

NEW DELHI, June 9: Bharti Enterprises and its back-end partner Wal-Mart will open their retail outlets some time early next year with the legal formalities on branding and franchise being worked out. Work is going on as per plan. By early next year, a clutch of stores would be opened, Bharti Group chairman and CEO, Mr Sunil Mittal, who was recently in the USA, said. You will see half-a-dozen coming up.

The Bharti Group had announced in November last year plans to invest $2.5 billion in the retail venture, partnering the US major Wal-Mart. While Bharti would manage the front-end, Wal-Mart would provide back-end and logistics support. 

Meanwhile, the two partners have started recruitment and are busy sorting out the legal issues. Legal issues like brand and franchise arrangement may take some time. But we are going ahead as per the plan, Mr Mittal said. 

During his visit to the USA heading a CII delegation, Mr Mittal met Wal-Mart vice-chairman, Mr Mike Duke in Washington. Asked about the foreign direct investment (FDI) in retail as desired by the USA, the CII president said if large big-box stores could benefit farmers and the customers, the industry may convince the government and push for FDI, starting with a cap of around 26 per cent. 

Currently, India does not permit FDI in multi-brand retail but allows 51 per cent in single brand retail and 100 per cent in cash and carry wholesale business. The existing policy also allows FDI through the franchise route. 

The Bharti-Wal-Mart joint venture is being structured in consonance with the FDI policy. 

*Outsourcing* 

The outsourcing debate should not become an India debate, the CII delegation impressed upon US officials, senators and congressmen. CII has allayed some of the fears and blunted some arguments against outsourcing, Mr Mittal said in a briefing on the recently concluded CII mission to the USA. We made a good case. But it will remain an election issue.

The CII CEOs delegation raised three critical issues during the mission ~ outsourcing, based on the recent H1B visa debate; the Indo-US civil nuclear agreement; and the Doha Round.

The CII delegation impressed upon them how India was doing a remarkable job of providing the backbone to the US economy with the reverse outsourcing being currently witnessed. 

Mr Mittal said that according to CII estimates, there would be a requirement of 17 million IT and knowledge professionals in the USA. This could be best served by India, he added. In fact the Indian professionals are adding competitiveness to the US industry, he felt. This is a partnership for competitiveness. 

CII also highlighted that most of the US manufacturing industry had moved to China and was now feeding US consumption patterns without hurting the US economy or industry. 

Agreeing that outsourcing would still be an election issue in the USA, Mr Mittal said there was a palpable fear of losing jobs and that there were clear undercurrents regarding this. 

Stating that there was a recent trend of reverse outsourcing Mr Mittal gave the instance of IBM bagging a $1.1 billion order from Bharti. He said other telecom companies were also looking at outsourcing to the USA.


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## Bushroda

*Israel Bourse Welcomes First Indian Bank* 
By Zach Helke Posted: 06/10/07 05:37
Diamonds.net, NY 

RAPAPORT... Israel's diamond bourse welcomed its first Indian bank June 8 2007, when the State Bank of India (SBI) opened a branch in the bourse's Ramat Gan location. 

The branch marks SBI's 84th overseas branch, with locations firmly fixed in the world's other diamond business centers, such as New York, Antwerp and Johannesburg. 

"We have thirty years of experience in diamond financing and have offices in all the major centers associated with the trade. Tel Aviv completes the loop," SBI Chairman OP Bhatt, told the Press Trust of India. 

Bhatt added that the bank will have a head start against others in the growing trade relations between the two countries. Trade has soared between the two nations, reaching $2.7 billion in the last year from humble beginnings at $200 million in 1992 when diplomatic relations were established between the two nations. 

"This was a natural event waiting to happen," said India's Ambassador to Israel Arun Singh. "The remarkable growth in bilateral trade between the two countries has led to diversification of trade with significant growth in new sectors." 

India's diamond merchants have long had a presence in Israel, many of whom came in the early 80's, even before official diplomatic ties were established with India. At present, some 30 diamond merchants are active in the Ramat Gan exchange, as well as India's Tata Consultancy Services (TCS) who compete for government contracts and employee many Israeli nationals. 

"The opening of a branch by SBI here demonstrates the strength and stability of the Israeli economy. It also shows the important role Israel plays in the diamond trade," Israel Diamond Exchange president Avi Paz said.


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## Bushroda

*India, China to keep mining on a roll: study*
Livemint.com, Wall Street Journal

*The Citigroup study says by 2030, the two countries will need the equivalent of 150% of the worlds current copper and nickel supply*

Manila: Rapid economic growth in China and India will drive demand for minerals in both countries, which in turn will help sustain a mining boom in Southeast Asia, according to the findings of a report.

China could be the worlds second largest economy by 2030 and India the fourth largest, said a report by Citigroup Global Markets Asia Ltd, which was released at the seventh Asia Pacific Mining Conference in Manila on Thursday.

By 2050, China would be the worlds largest economy and India third, accounting together for perhaps 35% to 45% of the total global economic output, it said.

The two countries, the report added, had been caught short in their demand for mined commodities, particularly copper, nickel, zinc, iron ore and coking coal. By 2030, the two countries will need the equivalent of 150% of the worlds current copper and nickel supply. 

This would mean massive increases in profitability and capital inflow to the (mining) sector, the Citigroup report said.

Mining companies in the Association of Southeast Asian Nations (Asean), had reacted by increasing production even faster than those outside the region. From 2001 to 2007, Asean countries with large mining sectors had seen mining output grow faster than other parts of the economy.

Asean mining economies are expecting positive growth from their mining activities, the report said.

At the same time, the report voiced a word of caution. The global environment looks likely to remain robust, but Asean must be proactive to promote its own mining growth, it warned, citing studies that show that mineral resources in the Philippines and Indonesia are deeply underutilized.


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## Bushroda

*75 % foreign corporations in India making profits*
Sunday, 06.10.2007, 10:48pm (GMT-7)

NEW YORK: An impressive 75 percent of foreign corporations with investments in India are making profits, according to 'The India Factor', a report released by Societe Generale Bank, one of the largest financial services group in Europe. 

The report, which gives a comparative analysis of the opportunities and risks in China and India, was released at a well attended luncheon on June 4, in New York City, in the presence of India's Minister of State for Industries, Ashwani Kumar and a host of senior corporate executives.Detailing the strengths of the Indian economy, the Societe Generale report mentions the four straight years of 8 percent GDP growth that crossed the 9 percent barrier for the current financial year.

The report also talks about the solid macro fundamentals in high savings rate, diversified economy, FDI and portfolio investments; the purchasing power parity that reached $3,942 in 2006 (expected to go up to $4282 in 2007); and growth across the socio-economic spectrum with a nearly 300 million strong middle class and fastest growing number of High Net Worth Individuals in the world. India today has over 700,000 consumers with more than $100,000 in liquid wealth. The Report also showed how India was becoming globally competitive in many sectors: Auto components; Chemicals; IT services; Manufacturing; Pharma and Oil Refining etc. It also noted that with its expanding middle class and rising incomes, India was a consumption driven economy experiencing an infrastructural investment boom. Further, the report found that European corporations were strong in the construction, telecommunications, banking and consumer goods sectors. Keynote speaker on the occasion, Kumar drew attention to the strength of Indian democracy, which afforded political stability to the decision making process. He described the egalitarian philosophy which animates the economic reform program so that all stakeholders feel a sense of participation.

The minister particularly noted that in the last 22 years, the Indian economy has succeeded in pulling up 1 percent of the population, previously below the poverty line, every year. Describing the factors which led to 9.2 percent growth of the economy and more than 11 percent growth in the manufacturing sector last year and the potential for continued high rates of economic growth, the minister also spoke about the policies intended to address the infrastructure challenge, including the power sector.Institutional Investors meet.

The following day, Ashwani Kumar addressed a group of Institutional Investors at an interactive breakfast meeting, where he gave a presentation on the state of the Indian economy, highlighting its phenomenal growth cutting across various sectors.While outlining major policy initiatives such as the recently announced policy on Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIR's), he emphasized the Indian government's commitment to continuing the process of economic reform.Kumar said that the resilience of India's democratic institutions had contributed to the economic growth of the country consistent with equality and freedom of its people.

Highlighting some of the success stories in India in fields such as real estate and manufacturing, he stressed that the qualitative distinction of India's success story was defined by the state's commitment to proactively intervene with a view to impacting positively on the living standards of the poor. The Minister's presentation was followed by a discussion with the bankers, fund managers and CEOs on the future growth potential of the Indian economy and the vast opportunities available to foreign investors.

The Minister informed that nearly 98 percent of the Indian economy was now open to foreign direct investment through the automatic route. He encouraged US companies to invest in major growth sectors such as infrastructure -- both physical and social -- which hold significant promise. He said that at least one-third of the estimated US$ 550 billion required to be invested in the infrastructure sector alone could come by way of Foreign Direct Investment & Foreign Institutional Investment. Speaking about the Indo-US Agreement on Civil Nuclear Cooperation, Kumar said that the Agreement was dictated by the need to access clean sources of energy for India's industrialization and economic growth. He felt that there was a need for deepening Indo-US economic engagement further. Business women's meetAt a breakfast meeting, June 7, with a group of leading American business women, the Minister for Industries emphasized the extraordinary growth of the Indian economy in the last few years. 

He, however, admitted the country was facing challenges of both physical and social infrastructure. Underlining the government's efforts to improve both, he stated that there was a need for roughly $550 million to be pumped into physical infrastructure of which 1/3rd will come from foreign direct investments.Kumar said that India has been frequently accused of delayed decision making or "democracy deficit". However, this impression was not correct, he said. Various studies done in this regard have concluded that there is direct correlation between economic growth and democracy. Touching upon the on-going debate on climate change, Kumar pointed out that China and India should not be asked to assume responsibilities disproportionate to the damages done to the climate. He also emphasized the need to harmonize economic growth with the climate improvement. He urged entrepreneurs to look to India's strengths such as democracy, liberty, freedom, secularism and pluralism.

He also referred to the major policy initiatives such as the recently announced policy on Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIR's). Responding to a question, Kumar said that the government was not going to artificially control the value of the rupee, though some steps would be taken to help exporters.

Touching briefly on the US-India agreement on civil nuclear cooperation, Kumar said that India was in dire need of power. Owing to this agreement, approximately 3500 mega watts of nuclear power would be generated by the year 2030 as against only 3000 mega watts generated in the last 60 years. He said that the increase in power would exponentially increase the GDP enabling India to surpass China and become the third largest economic power.


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## Bushroda

*As FDI streams in, Indian firms now more confident buying foreign assets*
Ruhi Tewari
Posted online: Tuesday, June 12, 2007 at 0000 hrs

new Delhi, June 11: The recently released World Bank report on globalization of corporate finance in developing countries has triggered a lot of excitement in the the country by pointing out that India has attracted a major chunk of the record $40.1 billion capital that has flowed into the region. This, feel commentators, is proof that India, with its much-improved domestic policies, has increased its ability to raise capital from the global markets. However, they have overlooked another important transformation. 

This is the fact that the very concept of capital flows is no longer viewed by Indian business and economic entities as a one-way movement &#8212; namely inflows &#8212; as was the case in the bad old days of socialist economic policy. Today, India is also experiencing massive outflows of capital as our companies go out to distant parts of the globe in search of investment ventures. The Indian multinational Tata Group&#8217;s $12-billion acquisition of Anglo-Dutch steel company Corus earlier this year resulted in FDI outflows from our country to the UK exceeding inflows. 

Other major outward investments from India include Aban Loyd&#8217;s $445 million investment in the Norway energy sector and state-run ONGC&#8217;s $410 million investment in Brazil for an energy stake. The largest overseas player in 2006 was State Bank of India (SBI), with a foreign investment of $1.18 billion, followed by Dr Reddy&#8217;s Labs with $777 million. 

These large flows of capital to and from the country have, however, brought the subject of capital account convertibility (CAC) to the centre of the economic policy discourse. There are two major questions doing the rounds &#8212; one, is full capital account convertibility (CAC) required to reap the full benefits of capital flows? Two, is our economy ready for such a step? 

The Tarapore Committee (1997) defines CAC as &#8220;the freedom to convert local financial assets into foreign financial assets and vice-versa at market-determined rates of exchange&#8221;. This basically implies complete mobility of capital across countries. Says CII director of financial services G Srivastava: &#8220;We have to address the larger macroeconomic question of whether our economy is ready for full CAC. Conditions like fiscal discipline, controlled inflation and sustainable growth must be fulfilled. India is certainly not ready to introduce full CAC.&#8221; 

Opines FICCI economic advisor Anjan Roy: &#8220;We are expecting $30 billion worth of FDI this year. Even if there is a slight slowdown in the growth rate of capital flows, it will not harm the economy. High capital inflows are anyway exerting upward pressure on the exchange rate.&#8221;


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## Bushroda

*India Poised To Win More Higher-Order Outsourcing*
Ruth David, 06.11.07, 3:25 AM ET
FORBES, NY

MUMBAI - They may be under fire in the U.S. over visas, but India believes its tech companies are poised to capture a bigger slice of the global outsourcing market. 

By 2010, the country will have 15% of the outsourcing market for higher-order knowledge processing work, such as research and data management, Commerce and Industry Minister Kamal Nath said Sunday in a speech at the 11th International Economic Forum at St. Petersburg, Russia. 

Indian companies had 11% of the market for outsourcing contracts above $50 million in 2006, according to the National Association of Software Services Companies. Indias software and services exports crossed $31 billion in fiscal 2007.

But Indian tech companies, which draw the majority of revenues from the North American markets, have been in the news lately after two senators asked nine companies, including biggies like Wipro (nyse: WIT - news - people ) and Infosys (nasdaq: INFY - news - people ), for details on their U.S. workforces. 

Their questions came amid charges that foreign firms use of the U.S. H1-B visa program has displaced American workers. (See:  India On Offensive About Visas). 

In a statement last week, Nath denied the allegations. Temporary movement of skilled professionals is an essential component of the global services economy and bears no relation to immigration issues, he said. 

The minister linked Indias cooperation on trade issues at the WTO to agreement on the services industry. Services are an important component of the breakthrough in the current WTO negotiations and any move which vitiates the current progress will only frustrate the progress in bringing the round to a successful completion, he said. 

At the St. Petersburg conference, he waxed eloquent on Indias growing importance on the global stage. What better example to cite the growing clout of emerging economies than India, which has recorded the fastest GDP growth in 18 years, with the economy growing 9.4% in 2006-07, Nath said.

He said an estimated growth rate of 9% over the next five years starting in fiscal 2007-08, would need an investment rate of 35.1% of the countrys gross domestic product. 

Indias high growth has been powered by the manufacturing sector, which grew 12.3% in fiscal 2006-07 as compared to 9.1% a year earlier. But Nath also spoke of investment opportunities in the farm and food-processing sector, which hasnt grown at the scorching rates of some other sectors and has been identified as a priority area by the government. 

He also invited investment in retail, where India doesnt yet allow foreign players in the multibrand segment. Organized retailing in India is predicted to expand 37% in 2007 and 42% in 2008. At present, small corner stores account for the bulk of the market.


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## Bushroda

*Indian farmers may lose healthy appetite for gold*
Tessa Kruger, 11 June 2007
MoneyWeb, South Africa

*Source of significant investment demand may disappear as Indian farmers move to cities and the country continues to industrialise. *

A considerable source of investment-related demand for gold could disappear as millions of Indian farmers move to cities or join industrialisation in India. 

The Fortis/VM Group said in a recent Yellow Book article a great gold market driver to watch in the short and longer term, is whether Indias rural poor continue to invest in gold during times of stress and transition, or if they will secure their income in alternative ways. 

The rural poor in India still account for two thirds of annual gold purchases in the country, despite its emerging middle class. 

But millions of Indian farmers are expected to move to urban centres over the long-term as they seek greater wealth and their farms disappear in the midst of industrialisation. 

The Indian government is looking at policies to move Indias 200m subsistence farmers into manufacturing to address their exposure to unsustainable land practices and to ensure that rural populations contribute to Indias extraordinary economic growth. 

Small scale farming in the country is also under threat from the vast debt burdens of small farmers  a symptom of a wider breakdown in agriculture due to a decline of public investment in agriculture, among other factors.

This anticipated shift away from small-scale farming into larger-scale agricultural development and increasing urbanisation could have a considerable impact on Indias gold demand. 

Small-scale farmers have traditionally used spare cash to invest in small pieces of jewellery, as they favour gold above paper assets in times of economic and political uncertainty. 

But gold - as the most esteemed medium of exchange for the countrys rural communities  will come under increasing pressure as Indias land use and tenancy changes over the next decade. 

Significant amounts of small pieces of gold investment jewellery are likely to re-enter the market as farmers disperse thereof to fund a new start in larger towns and cities. 

This trend would be influenced by factors such as the levels of government compensation for land, existing debt burdens and cost of relocation and the accuracy of titling of land deeds. 

A counter possibility is that the loss of one measure of wealth in rural India, land, may lead to a concentration in the other, gold. 

However, a lack of clarity on the rate and nature of savings in India does complicate the picture. Household savings and the number of banks in the country have increased and physical gold ownership plays a slightly different savings role as a result. 

A third possibility is that these farmers make it in an urban environment and start demanding gold for adornment as they fully participate in Indias booming economy. 

Although it is clear that middle class Indians will increasingly have a number of luxury items to choose to spend their money on, gold is likely to remain a high priority.

Changes in gold demand will depend on whether Indias rural poor will continue to invest in gold. 

But if the move away from traditional patterns of employment and income for subsistence farmers reduce the tiny amounts currently available for investment, the possibility emerges that this source of investment-related demand for gold will stop.


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## Bushroda

*Indian cities draw investors in*
Press release from: Assetz 
Published date: 06-11-2007 01:38 PM

(openPR) - The Indian property market is going from strength to strength according to the latest reports. Some investors have recently begun ploughing money into the country as they take advantage of cheap property prices and favourable exchange rates. The Indian tourist ministry has also been heavily promoting the many different holiday options that the country offers. 

In a campaign that last year cost £8 million, the ministry of tourism has been advising overseas holidaymakers to come and experience 'Incredible India'. A spokesman said the government "is putting greater emphasis on development of infrastructure at important tourist destinations and to promote and publicise various tourism products of India within the country and abroad". 

It seems that the campaigning has paid dividends, as tourist numbers have increased by around 45 per cent in the past two years. India is a huge landmass and conditions vary widely in different parts of the country. It is possible to take a ski trip to the north or a beach holiday in the south. There are jungles galore inland, allowing for safaris and wildlife-themed holidays, with visits to the habitat of the native Bengal tiger particularly popular. 

The cities are also experiencing strong property price growth and demand is expected to continue at high levels for at least the next 12 months, according to the chairman of the National Housing Bank (NHB). The NHB is a regulatory body for housing finance companies in India. 

According to statistics collected by the body, property prices in some of the bigger cities - like Mumbai, Delhi and Bangalore - have risen by between 30 and 40 per cent in the past year. The NHB attributes this to lack of land and housing stock supply (as much as 3.1 million units under, by government estimates), coupled with a strong economy that has seen wages rise and some sections of the populace become increasingly affluent. "Demand for housing will remain strong," a spokesman said. 

With this in mind, construction companies have gone into overdrive. Real estate is being built all over the Indian peninsula, including a huge development - described as a "mega housing project" by its developers - at Mohali. British investors that buy in India can be assured of getting a lot of property for their money and the present climate suggests a bright future for Indian investment.

The Indian property market is going from strength to strength according to the latest reports. Some investors have recently begun ploughing money into the country as they take advantage of cheap property prices and favourable exchange rates. The Indian tourist ministry has also been heavily promoting the many different holiday options that the country offers.


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## Bushroda

*Indian tech majors will be in global top 10 by 2010 * 
Posted online: Monday, June 11, 2007 at 0000 hours IST 

His predictions have often hit the bulls eye. IDC chief research officer, John Gantz was among the first few to deflate the hype around artificial intelligence in 80s. Next, he proclaimed there would be no major dislocation from Y2K. Today, he is busy allaying fears about a global tech slowdown. Chief architect of IDCs Global Internet Commerce Market Model, IT Economic Impact Model, and PC Software Piracy research, he is responsible for IDCs worldwide demand-side research, global market models, and research quality control and standards. In a chat with Pragati Verma, he shares the latest IDC predictions for the global IT industry for 2008 and beyond and their likely impact on India. Excerpts. 

*You are one of the very few analysts predicting a growth in global IT spending. What makes you so bullish? *

We have not yet seen indications that we are headed for a downturn in global IT spending. The best indicator for overall technology spending has been the rate of growth in PC shipments. Historically, PC investment is a strong indicator of IT spending sentimentthe two previous IT market downturns, in 1992 and 2001, were preceded by a sharp drop-off in PC sales. So, if there was any downturn in worldwide PC shipments during the first quarter of 2007, it would have represented a major cause for alarm and concern with regard to prospects for overall IT spending in the remaining months of this year. 

We now need to see how much of a turning point the first quarter will represent, in either a positive or negative direction. The answer depends largely on your view of the US and global economy, and where macroeconomic indicators are pointing for the next twelve months. The downside scenario holds that worldwide PC sales were artificially and temporarily inflated last quarter, partly by consumer demand, which is already softening in the face of realestate price declines and energy cost increases. The upside scenario, however, takes a view based on the relative stability experienced so far in Q1. 

If the upside scenario holds true, and the outlook for 2008 remains robust, increased confidence should translate into increased business investment in the second half of this year. If the downside scenario occurs, however, then firms will move quickly to delay and postpone IT projects in the second and third quarters as they seek to insulate themselves through rapid cost-control policies. We have already said that the IT market will expand in the range of 6-7% during 2007. 

*What does this mean for Indian software companies? Do you expect Indian companies to continue making inroads into bigger deals and hence on the global tech map?* 

India has already made a big impact on the global tech outsourcing space. *I am confident that at least one Indian IT company will be in global top 10 by 2010. Indian software industry has built exceptional brand equity in the global markets by delivering quality software at reasonable costs.* Indian companies now need to build a set of strong differentiators in the global markets. Competition could come only from Eastern Europe especially for Western Europe. Latin America is not so much of a threat. India has a clear quality advantage and I would think that India is easily five years ahead of any competitor. 

The key issues for the Indian IT export market will lie less in overall worldwide IT market growth and more in the internal dynamics around IT outsourcing, Indian labour supply, and competition from other regions. 

*Indian domestic market has also picked up momentum recently? How do you see that shaping up? *

Today, the Indian market is one of the fastest growing, along with Russia, China and Brazil. And there is a huge room to grow further. India accounts for 2% of worlds GDP and 1% of worlds IT spend. 

*Which are the hottest technologies invading corporates today? Do you see a wave of disruptive innovation? *

We are entering a peak period of innovation and disruption. IT initiatives will involve converging constituencies. Prominent technologies seen in corporate space will include blades; grid; green computing; web apps; SaaS; web 2.0; VoIP; IP Networking; triple play; video security; Location/GPS presence; social networks; and virtual worlds. 

*Which are the biggest tech challenges keeping CTOs and CIOs up at night?* 

When I speak to some of the CIOs, they sound quite negative, and are not too open about this. It reminds me of how the IT departments did not like adopting technologies such as Wi-Fi and VoIP earlier. However, these technologies are all prevailing in the market today. I think embracing some of the Web 2.0 applications like instant messaging and wikis will be popular. CIOs should realise that wireless LANs, VOIP, instant messaging, user generated videos and content and desktop search are inevitable technologies. And it would not make sense to resist these.


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## Bushroda

*India's DLF set to raise $2.4bn* 
BBC NEWS

*Indian property developer DLF is set to raise $2.4bn by floating its shares on the Indian stock market, the largest flotation in the country to date.* 

The property firm - the largest in terms of the area is has developed - is offering 175 million shares for 500 to 550 rupees each on the Sensex. 

Indian property prices have soared, as demand for land for homes and offices rises due to the growing economy. 

The previous share record in India had been Cairn Energy's $1.4bn flotation. 

*Strong demand *

"DLF is the best way to get exposure to Indian real estate, given its size, quality and credentials" said broker Edelweiss Securities before the listing started. 

The institutional buyer section of the listing was fully subscribed within an hour of the launch, according to the firm. 

Subscription to take part in the listing will run until Thursday. 

Property prices in India have risen strongly, although recent interest rate increases have had a slight cooling effect on the sector.


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## Bushroda

*India targets 35 African countries for investment*
By DAVID MALINGHA DOYA 
The EastAfrican 

India is looking for investment opportunities in 35 African countries including Kenya, Uganda, Tanzania and Rwanda. The areas it is targeting include information and communication technology, renewable energy, agro-processing and pharmacy. 

Ephraim Kamuntu, Ugandas State Minister for Trade and Industry, says an Indian trade delegation will meet potential partners from East Africa and other countries in the region in Kampala between June 27 and 30. 

He said, We expect participants, under their associations, to come for the meetings with ready-to-sell proposals because these people are not coming to gather information but to discuss real business. 

Three meetings have already been held in India. Meetings held in 2005 discussed 281 projects worth $11.6 billion and of which, projects worth $312 million are already being implemented. 

The Export Import (Exim) Bank of India is channelling money through regional and national development banks to local entrepreneurs in long-term loans. 

The rreasoning behind this is to raise the financial muscle of local entrepreneurs so that they can negotiate at parity with potential business partners from India. 

Dr Margaret Kigozi, executive director of the Uganda Investment Authority (UIA), said her organisation and the ministry wanted sectors to include small and medium enterprises, transport, aquaculture, agroprocessing and construction infrastructure. 

The business conclave is part of the India-Africa partnership, a programme which seeks to guarantee the supply of agricultural products and natural resources for the Asian countrys rapidly growing economy. 

Through joint ventures with local partners, India pledges to pass on skills and cash investments in the agricultural sector, financial services, ICT, banking and insurance. 

However, countries in the region will have to deal with problems of inadequate long-term capital and the energy shortage. 

Governments such as Ugandas will need to convince potential local partners that there will be no favouritism in forging these partnerships as the country is home to many citizens of Asian origin  some of whom are the leading business personalities in Uganda. 

It is obvious that they consulted some of the Indians who are already operating here, but when it comes to investing, all Ugandans  including those of Asian origin  will all be treated equally, said Mr Kamuntu. 

The question of favouritism, which usually raises emotions among local traders when it comes to foreign investment will be put to the test when the Indian delegation arrives. 

Sources say EXIM Bank will channel funds for these partnerships, partly to remedy the problem of inadequate long-term finance . 

The bank has already extended lines of credit worth $5 million each to the East African Development Bank and the PTA Bank while negotiations with the Uganda Development Bank Ltd for a similar facility are going on. 

In 2006, Uganda imported goods worth $90.92 million and exported goods worth only $2.81 million to India. Between January 2006 and March this year, India had registered 109 projects whose planned investment was about $230 million and projected to create 9,608 jobs. 

Uganda Investment Authority said the meeting will be held just before two similar meetings in Mozambique for the Southern Africa region and in Ouadogou, Cote dlvoire, for the West African region. 

The Confederation of Indian Industry, in conjunction with the Indian government and EXIM Bank of India are organising the meetings.


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## Bushroda

*Indias Ispat subsidiary plans to invest $2.9bn in Bangladesh* 
Web posted at: 6/12/2007 23:52:28
Source ::: AFP 

DHAKA  A subsidiary of Indian steel firm Ispat Industries yesterday signed a deal with Bangladesh to invest $2.9bn in the countrys fast-growing economy, officials said. 

The non-binding and non-committal memorandum of understanding was the biggest deal signed by Bangladeshs military-backed government since polls were cancelled and an emergency was imposed in January. 

Under the deal, Ispat Industries subsidiary Global Oil and Energy Company would conduct a feasibility study and begin negotiations with the government on specific projects, the governments Board of Investment chief Nazrul Islam said. 

Possible investments included $300m in coal mines, $500m in power plants, $100m in oil and gas exploration, $1.5bn in petro-chemicals and $500m for a liquefied natural gas plant, a government statement said. 

Ispat chief executive Vinod Mittal, a relative of British steel magnate Lakshmi Mittal, and Islam signed the agreement in the presence of senior government officials at a city hotel, a statement said. 

Bangladesh signed a similar three-billion-dollar agreement with Indias Tata Group in 2004. But despite years of negotiations, both sides have yet to reach a final agreement. 

The impoverished South Asian nation, home to 144 million people, has been one of the worlds fastest-growing economies in recent years, expanding an average five per cent since the early 1990s and forecast to expand 6.53 per cent in the year ending June.


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## Bushroda

*Indian Industrial Output Rises 13.6 Pct in April*
By RAJESH MAHAPATRA 06.12.07, 7:31 AM ET
FORBES, NY

India's industrial output rose a stronger-than-expected 13.6 percent in April from a year ago, the government said Tuesday, thanks to robust manufacturing.

But the numbers heightened concerns that the Indian economy might be overheating, growing faster than the pace that can be sustained. It also fueled fears that the central bank may further increase lending rates and take steps to restrain money supply growth to cool the economy.

While the April growth was slower than the 14.5 percent rise in March, it was stronger than the 11 percent expansion forecast by economists polled by Dow Jones Newswires.

The April data showed manufacturing expanded 15.1 percent in April, while electricity generation grew 8.7 percent from a year ago. Mining output rose 3.4 percent.

"This is yet another impressively strong Indian release, but the question is will it prove too strong for comfort," said Robert Prior-Wandesforde, an HSBC (nyse: HBC - news - people ) economist based in Singapore.

Indian Finance Minister P. Chidambaram said the government was concerned over excessive growth in some sectors "where there are signs of what you will call overheating."

Chidambaram didn't name the sectors, but he has previously warned banks against lending too much to real estate, which experts believe is drawing a lot of speculative money that may leave behind an asset bubble.

India's central bank has repeatedly increased interest rates since December in a bid to discourage lending and slow growth. The broader economy has grown 9 percent annually in the past two years, but the brisk expansion has also come with rising inflation.

The increases in interest rates have affected car and motorcycle sales and production of such goods as refrigerators and television sets for which demand is often linked to easy finance. But there has been little impact on machine goods, construction material and the real estate.

Moreover, exports have been buoyant as Indian producers increasingly penetrate new markets abroad.

"One can still make the case that real monetary conditions remain loose in the country and that is perhaps why the signs of slowdown in the economy remain few and far between," said Prior-Wandesforde at HSBC.

Prices of government bonds fell as the data on industrial output led traders to speculate on another round of monetary tightening by the central bank.


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## Bushroda

*Is India's Economy Overheating?*
Carl T. Delfeld, Jun 12th, 2007

Fears that India's economy, stock market and the exchange-traded fund (INP) that tracks it are overheated led its central bank to ramp up interest rates. 

Since January 2006 the Reserve Bank of India [RBI] has raised its overnight lending rate by one and a half percentage points, to 7.75&#37; and the rupee, in turn, has jumped 10% in value versus the US dollar during the past four months alone.

*But rather than slowing down, India's economy is speeding up. An article in the Economist states that JPMorgan estimates that growth in the three months to March accelerated to a seasonally adjusted annual rate of 11.4%. Yet, despite rapid growth, wholesale-price inflation fell to 5.1% in mid-May, down from 6.7% in January. Still the signs of an overheated economy are everywhere. A sharp increase in house prices, credit growth of 28% over the past 12 months, 15%-plus average rises in wages for skilled workers, record industrial capacity utilisation rates, and 41% more imports in April than a year ago.*

Plus, consumer prices still appear to be rising at an annual 8% clip which likely means that more aggressive rate hikes are on the way. The trick is to slow growth down a bit without triggering a sharp decrease in economic activity - easier said than done and what in the US is often referred to as a soft landing.

The higher rupee has helped boost returns for investors in the India ETF but valuations may be getting a bit toppy. Still you must admire the underlying growth and momentum of the Indian economy. Will higher interest rates and a stronger currency blunt this mojo?


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## Bushroda

*Education, Technology and the Future of India* 
Bill Gates, CXOToday.com 
Mumbai, Jun 12, 2007 

For me and anyone else who is passionate about using technology to help create opportunities for people, trends in India today are tremendously exciting and encouraging. 

As everyone knows, the nation has become a global leader in information technology and other high-tech fields such as pharmaceuticals, telecommunications, and telecom-based business services. These sectors have contributed to the economy's rapid growth since 2003, which has lifted many millions of people out of poverty. Continued growth could alleviate suffering and expand opportunities for millions more. One day, we may look back on India's progress during this decade as one of the great humanitarian achievements of our time. 

Equally exhilarating is how India's rise may influence the global community. The world will be a safer place if other nations can learn from the achievements of what is not only the largest democracy, but also one of the most pluralistic cultures. The Prime Minister, Dr Manmohan Singh, has said it well: India's success will renew humanity's faith in liberal democracy, in the rule of law, in free and open societies. The entire world has a big stake in India's future. 

*The Power of Indian Skills and Talent *

It seems to me that the India miracle, if you will, demonstrates the wisdom of sustained investment in the primary asset of any modern economy: people. During the nearly 60 years since independence, India's investments in human development have reduced hunger, increased literacy, and improved healthy conditions. Education investments have produced world-class scientists, engineers, and technicians. They, in turn, have fuelled the growth of Indian technology companies and attracted many global technology leaders, including Microsoft. 

People have been the key to Microsoft's success in India, and our experience may be illustrative. We entered the country 17 years ago, working closely with the government, IT industry, academia, and the local developer community. Over the years, the people of Microsoft India have had end-to-end responsibility for the development of many Microsoft technologies. They have made important contributions to many other products, including Windows Vista and the 2007 Microsoft Office system. 

We currently employ more than 4,000 people across 6 business units in Delhi, Bangalore, Mumbai, Hyderabad, Kolkata, Pune and Chennai, and we continue to expand our presence. Outside the United States, Microsoft's India Development Centre is our second largest product development facility. Two years ago, we opened Microsoft Research India, where scientists and engineers work to advance the frontiers of knowledge in computer science and related fields, often in collaboration with India's academic community. These teams have demonstrated India's great capacity for innovation by filing for 100 patents during the past two years. Other India units play major roles in our worldwide customer support, consulting services and management of our internal information systems. 

Beyond our direct presence, Microsoft also contributes to India's growth through the thousands of local partners, large firms and small, that develop and sell products and services based on our software platform. This year, 35 Indian companies qualified for the Forbes 2000 list of the world's biggest corporate giants. Among them were four valued Microsoft partners: Tata Consultancy, Infosys Technologies, Wipro and Satyam Computer Services. Microsoft is extremely proud to be a part of the economic transformation that these and other highly successful Indian companies have helped bring about. 

*Sustaining Growth, Broadening the Opportunity *

How can India best sustain its rapid growth and broaden opportunity for all its people? Much has been written about the need for sharply increased investments in highways, airports, power plants and other infrastructure. Economists also point to a need for regulatory reforms and better public services provided more transparently. These are important challenges. 

Also, from my perspective, investments in human capital should continue to be a high priority, especially efforts to further alleviate hunger, reduce illiteracy and improve public health. 

Threats to health such as HIV/AIDS, for example, could upset much of India s recent progress. The estimate is that less than one per cent of adults are infected, but because of India's large population, the number is among the highest in the world. 

Education at every level remains crucial for continued growth. Output of college and university graduates is impressive in absolute terms, and has been a great source of economic strength, but India cannot afford to become complacent. The nation now faces an acute shortage of skilled workers, as Infosys and other employers have warned recently. Education spending as a percentage of GDP lags far behind that of countries such as South Korea and Taiwan. Yet, one could argue that India needs a skilled and educated workforce even more than the so-called Asian Tigers do. They accelerated their development through manufacturing, primarily, while India's focus on services and technology makes its workforce skills especially critical. 

As many others have said and as the government has recognized in its budget plans, India urgently needs to build more primary and secondary schools, improve teaching and ensure that more children attend school, especially in rural areas. Higher education needs to be expanded and upgraded. Top-tier institutions are overrun with applicants, while skill levels among graduates of some other colleges do not meet world standards or the needs of employers. By one estimate, 25% of all new engineering graduates lack the skills to be employable in the IT industry, despite its dire need for workers. 

Microsoft is committed to helping improve Indian education. Over the past several years, we have been engaged in many collaborative efforts, mainly focused on advancing the instructional uses of technology and expanding access to computers and computer skills. For example, our Project Shish currently works with more than 10 state governments, bringing computer skills training to more than 120,000 teachers so far. We have helped enhance learning opportunities available to students in slum and rural schools through support for Digital Study Hall, a project that records and distributes DVDs of classes led by India's best grassroots teachers. And to help overcome a scarcity of classroom computers, Microsoft Research India has developed Windows Multipoint, a technology that enables several students to work on a single PC. 

In higher education, our efforts have included the Developer Platform Evangelism Academy, which has provided professional development to more than 1,000 IT and engineering faculty members at 51 Indian colleges. To help recent engineering graduates transition from school to careers, we recently began working with the Indian government and industry on an online employability portal. It will enable graduates to assess their skills, complete appropriate training and connect with prospective employers. 

*Technology and India's Future* 

Besides being an important tool in education and a growth sector of the Indian economy, information technology can aid social and economic development in many ways. Wide deployment of computers, software and telecommunications helps boost productivity and reduce transaction costs in many sectors, strengthening economic growth. Computers, mobile devices and software can help expand the quality and availability of health care and other public services, as well as education. 

A lack of access to technology, on the other hand, can hinder development. More than 30 years after the invention of one of the most versatile and empowering technologies of our time, the personal computer is readily available to only 1 billion of the world's more than 6 billion people. Microsoft's founding vision of a computer on every desk and in every home is a reality for the roughly 1 billion people living near the top of the global economic pyramid. But the digital revolution has yet to spread very far in many rural areas, impoverished communities and developing countries, including India. 

Disparities in technology access are troubling, for as the global economy is increasingly computerized and moves online, social and economic development becomes even more difficult in the places and for the people left behind, on the less fortunate side of the digital divide. This is a problem that Microsoft and others in the information technology industry have been working to address. 

Microsoft's ultimate goal is to bring the benefits of technology to every person. Toward that end, we have set our sights on an ambitious milestone: With governments and other partners, we aim to deliver the power of information technology to 1 billion more people worldwide by the year 2015. We are expanding several technology training and assistance programs. 

And we recently introduced the low-cost Microsoft Student Innovation Suite of software products, including versions of windows, Microsoft Office, Learning Essentials and Microsoft Math. Although we invested many millions of dollars to develop these products, the suite will be available tom students for about Rs.127, through government programmes in India and many other developing countries as part of targeted programmes that provide PCs to disadvantaged students. 

We are taking these and other steps because, as industry leaders and simply as human beings, we believe that all 6 billion people who share this planet deserve a chance to realize their full potential. We are especially excited to be working toward realizing this vision in India, where progress on many fronts is already well underway.


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## Neo

The old thread is closed, please continue your posting and debates here.
Thanks!
Neo


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## Neo

Please continue in this thread: https://defence.pk/forums/showthread.php?t=5804


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## Bushroda

Thanks Neo, so here we go

Previous discussion on this page
https://defence.pk/forums/showthread.php?t=1418
____________________________________________________________
*Asian invasion begins*
By Mark Hinchliffe, June 13, 2007
CourierMail, Australia

http://imageshack.us

AUSTRALIA is set for an invasion of Chinese and Indian cars and the return of several nameplates missing for some years.

Indian company Mahindra is about to relaunch in Australia with the Pik-Up ute.

It joins a growing list of new or returned marques in the Australian market after the re-introduction last year of Fiat and Dodge, Hummer and Skoda this year while Cadillac and Chinese brands wait in the wings.

Mahindra was last in Australia in the late 1980s with the Bushman, but the importers went broke and left buyers stranded. The Indian company now realises it has to regain the faith of Australian car buyers.

It is certainly well placed to launch an assault on our market, as it is on markets around the world.

Mahindra now has manufacturing plants in five countries and is selling vehicles in South Africa, Europe and Malaysia.

In April it tackled the biggest market in the world, the US, with three models. And now the company has set its sights on Australia.

In a move which showed the importance of the occasion, automotive sector president Dr Pawan Goenka attended the national launch of the Pik-Up at Bowral, southwest of Sydney last week.

Recently named "Man of the Year" by India's Autocar Professional Magazine, Dr Goenka said Mahindra was investing in the future.

"We will spend more money on research and development in the coming years than we have spent in the previous 60," he said.

Mahindra vehicles will be imported in Australia by TMI Pacific which is owned by the Tynan family of Sydney.

Chairman Michael Tynan began selling Mazdas in 1966 and now operates five dealerships selling 11 different brands.

Tynan, who is also deputy president of the NRMA, said they had previous import experience in the boating industry, but this was their first car importing venture.

TMI Pacific has spent $5 million over two years in testing, market research and securing ADR compliance for the Mahindra product.

He said their research showed country of origin would have little to no impact, at least on rural consumers.

He said they took the Pik-Up to field days in Orange in country NSW last year and had no adverse comments about its Indian origin.

"As we suspected, given the diverse origins of vehicles in Australia generally, the Mahindra's Indian roots seem to be of least concern," he said.

Like China, India is a powerhouse economy, well poised to pounce on the international automotive industry.

It is the fourth largest economy in the world based on gross domestic product and has 9 per cent annual economic growth.

Its car industry has experienced 8 per cent growth in the past three years and 30 per cent export growth in the past five years, although that has been off a low base.

Other car companies, such as Suzuki, have manufacturing plants in India producing cars mainly for the domestic market.

Mahindra also has entered joint ventures with Renault to produce the Logan small car for the Indian market and International to produce trucks.

Mahindra has 67 per cent market share of the local pick-up market and 40 per cent share of the SUV market.

With two new plants in India expected to boost annual production to a million cars within five years, it is no wonder Mahindra is looking to sell its vehicles on the world market.


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## Bushroda

*Will India's real estate bubble burst?*
By Mark Kleinman, Asia Business Editor
Last Updated: 12:49pm BST 12/06/2007

It seems destined to become one of the most ostentatious symbols of India's emerging wealth. Situated in the heart of Mumbai, the new $500m (£255m), 28-storey home of Mukesh Ambani, chairman of Reliance Industries and one of India's richest men, will tower above its surroundings: on one side, a view over the Arabian Sea; on the other, a panoramic perspective across Asia's biggest slum.

This juxtaposition of wealth and extreme poverty underlines the vast potential of India's burgeoning real estate industry, into which hundreds of millions of dollars are being poured every month.

This week, one of India's biggest property developers, DLF Universal, is undertaking the biggest domestic share offering to date, with a fundraising target of about $2.4bn.

Run by one of the country's wealthiest people, Kushal Pal Singh, DLF is expected to be valued at about $23bn once the listing, handled by banks including Citi and Merrill Lynch, is completed. The flotation on India's National Stock Exchange will not be DLF's first attempt, having aborted an effort to list last August amid concerns about its valuation.

DLF has ambitious plans to use proceeds of its IPO to accelerate its expansion by swallowing a larger chunk of the demand for new residential and commercial property.

advertisementIndia's economic growth last year was more than 9pc, its second-fastest level since the country gained independence from Britain in 1947.

India's young and increasingly wealthy middle-class are buying homes at an unprecedented rate. Property analysts expect demand for at least 20m new homes in five years. The overall real estate market is forecast to be seven times larger by 2015. Foreign investors, including 3i and Blackstone, the private-equity groups, have signalled an intention to grab a slice of the Indian economy with funds dedicated to infrastructure projects, which most analysts consider to be the most urgent requirement.

A property boom in India is potential good news for hordes of British retailers and leisure companies, such as Mothercare and Whitbread looking for development opportunities.

"India's real estate opportunity is genuine, large and will last a long while - a prospect not lost on developers and capital providers," said Ashish Jagnani, a Mumbai-based real estate analyst for Citi.

Since the beginning of last year, at least eight companies with an emphasis on the Indian property market have listed in London. Yesterday, seven of them were trading beneath the price at which they listed. In total, the companies have a market value of well over £1bn.

Among the glut of Aim-listed Indian property funds to have underperformed in share price terms is Trinity Capital, which raised £238m when it floated at 100p in April 2006. Despite being fully-invested in a range of commercial, hospitality and residential projects, the share price has continued to trail behind at around 90p.

Some analysts warn of the risk of a bubble in Indian real estate prices that could undermine growth prospects for the whole market.

Yesterday, a fund set up to invest in non-performing Indian assets, Dhir India Investments, announced plans to list on Aim and tap into a market for distressed assets estimated by PricewaterhouseCoopers to be worth $50bn.

But if bearish predictions of a real estate bubble are accurate, that pile of distressed assets could turn into a mountain as tall as Mr Ambani's new home.


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## Bushroda

And the fairy tale continues for April



> *Indian Industrial Output Rises 13.6 Pct*
> By RAJESH MAHAPATRA 06.12.07, 7:31 AM ET
> FORBES, NY
> 
> India's industrial output rose a stronger-than-expected 13.6 percent in April from a year ago, the government said Tuesday, thanks to robust manufacturing.
> 
> But the numbers heightened concerns that the Indian economy might be overheating, growing faster than the pace that can be sustained. It also fueled fears that the central bank may further increase lending rates and take steps to restrain money supply growth to cool the economy.
> 
> While the April growth was slower than the 14.5 percent rise in March, it was stronger than the 11 percent expansion forecast by economists polled by Dow Jones Newswires.
> 
> The April data showed manufacturing expanded 15.1 percent in April, while electricity generation grew 8.7 percent from a year ago. Mining output rose 3.4 percent.
> 
> "This is yet another impressively strong Indian release, but the question is will it prove too strong for comfort," said Robert Prior-Wandesforde, an HSBC (nyse: HBC - news - people ) economist based in Singapore.
> 
> Indian Finance Minister P. Chidambaram said the government was concerned over excessive growth in some sectors "where there are signs of what you will call overheating."
> 
> Chidambaram didn't name the sectors, but he has previously warned banks against lending too much to real estate, which experts believe is drawing a lot of speculative money that may leave behind an asset bubble.
> 
> India's central bank has repeatedly increased interest rates since December in a bid to discourage lending and slow growth. The broader economy has grown 9 percent annually in the past two years, but the brisk expansion has also come with rising inflation.
> 
> The increases in interest rates have affected car and motorcycle sales and production of such goods as refrigerators and television sets for which demand is often linked to easy finance. But there has been little impact on machine goods, construction material and the real estate.
> 
> Moreover, exports have been buoyant as Indian producers increasingly penetrate new markets abroad.
> 
> "One can still make the case that real monetary conditions remain loose in the country and that is perhaps why the signs of slowdown in the economy remain few and far between," said Prior-Wandesforde at HSBC.
> 
> Prices of government bonds fell as the data on industrial output led traders to speculate on another round of monetary tightening by the central bank.





> *India's April industrial output rises*
> BUSINESSWEEK, NEW DELHI
> 
> India's industrial output in April rose a better-than-expected 13.6 percent from a year ago, the government said Tuesday, thanks to robust manufacturing.
> 
> But the numbers heightened concerns that the Indian economy might be overheating. It also fueled fears that the central bank may further increase lending rates and tighten money supply to cool the economy.
> 
> Data released Tuesday showed manufacturing expanded 15.1 percent in April, while electricity generation grew 8.7 percent from a year ago. Mining output rose 3.4 percent.
> 
> "This is yet another impressively strong Indian release, but the question is will it prove too strong for comfort?" said Robert Prior-Wandesforde, an HSBC economist based in Singapore.
> 
> Indian Finance Minister P. Chidambaram acknowledged that the government was concerned over excessive growth in some sectors, "where there are signs of what you will call overheating."
> 
> The government would like to dampen demand in sectors such as real estate and housing, he said. Chidambaram has repeatedly warned banks against too much lending in real estate, which experts believe is drawing large amounts of speculative money that could result in a property bubble.
> 
> India's central bank has repeatedly increased interest rates since December in a bid to discourage lending and slow growth. The economy has grown 9 percent annually in the past two years, but the brisk expansion has accelerated inflation, which has averaged more than 6 percent so far this year.
> 
> The increases in interest rates have affected car and motorcycle sales and production of such goods as refrigerators and television sets for which demand is often linked to easy finance. But there has been little impact on machine goods, construction material and the real estate.
> 
> Moreover, exports have been buoyant as Indian producer increasingly penetrate new markets abroad.
> 
> In March, industrial production rose 14.5 percent. The growth in April, at 13.6 percent, was much higher than what analysts expected.
> 
> Economists polled by the Dow Jones Newswires had predicted industrial output would rise 11 percent.
> 
> "One can still make the case that real monetary conditions remain loose in the country and that is perhaps why the signs of slowdown in the economy remain few and far between," said Prior-Wandesforde at HSBC.
> 
> Prices of government bonds fell as the data on industrial output led traders to speculate on another round of monetary tightening by the central bank.





> *Indias industrial output grows strongly*
> Daily Times, Pakistan
> 
> NEW DELHI: Indian industrial output in April rose 13.6 percent from a year earlier, led by demand for cars and other manufactured goods in the booming economy, official data showed Tuesday.
> 
> Manufacturing output alone was up 15.1 percent in April, the first month of Indias financial year, despite aggressive monetary tightening aimed at cooling inflation.
> 
> In March, industrial output rose a revised 14.5 percent, up from the initial estimate of 12.9 percent.
> 
> For the year to March 2007, industrial output, which accounts for a quarter of the economy, rose 11.3 percent compared to 8.2 percent the previous year, which helped the overall economy expand by a faster-than-expected 9.4 percent and raised concern of overheating.
> 
> Inflation, as measured by wholesale prices, has recently eased, falling to its lowest level in nearly a year at 4.85 percent in the week to May 26. Analysts have speculated that the central bank however may continue a monetary tightening cycle that began in late 2004 to tame prices further. afp


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## Bushroda

*Education, Technology and the Future of India* 
Bill Gates, CXOtoday 
Mumbai, Jun 12, 2007 

For me and anyone else who is passionate about using technology to help create opportunities for people, trends in India today are tremendously exciting and encouraging. 

As everyone knows, the nation has become a global leader in information technology and other high-tech fields such as pharmaceuticals, telecommunications, and telecom-based business services. These sectors have contributed to the economy's rapid growth since 2003, which has lifted many millions of people out of poverty. Continued growth could alleviate suffering and expand opportunities for millions more. One day, we may look back on India's progress during this decade as one of the great humanitarian achievements of our time. 

Equally exhilarating is how India's rise may influence the global community. The world will be a safer place if other nations can learn from the achievements of what is not only the largest democracy, but also one of the most pluralistic cultures. The Prime Minister, Dr Manmohan Singh, has said it well: India's success will renew humanity's faith in liberal democracy, in the rule of law, in free and open societies. The entire world has a big stake in India's future. 

*The Power of Indian Skills and Talent* 

It seems to me that the India miracle, if you will, demonstrates the wisdom of sustained investment in the primary asset of any modern economy: people. During the nearly 60 years since independence, India's investments in human development have reduced hunger, increased literacy, and improved healthy conditions. Education investments have produced world-class scientists, engineers, and technicians. They, in turn, have fuelled the growth of Indian technology companies and attracted many global technology leaders, including Microsoft. 

People have been the key to Microsoft's success in India, and our experience may be illustrative. We entered the country 17 years ago, working closely with the government, IT industry, academia, and the local developer community. Over the years, the people of Microsoft India have had end-to-end responsibility for the development of many Microsoft technologies. They have made important contributions to many other products, including Windows Vista and the 2007 Microsoft Office system. 

We currently employ more than 4,000 people across 6 business units in Delhi, Bangalore, Mumbai, Hyderabad, Kolkata, Pune and Chennai, and we continue to expand our presence. Outside the United States, Microsoft's India Development Centre is our second largest product development facility. Two years ago, we opened Microsoft Research India, where scientists and engineers work to advance the frontiers of knowledge in computer science and related fields, often in collaboration with India's academic community. These teams have demonstrated India's great capacity for innovation by filing for 100 patents during the past two years. Other India units play major roles in our worldwide customer support, consulting services and management of our internal information systems. 

Beyond our direct presence, Microsoft also contributes to India's growth through the thousands of local partners, large firms and small, that develop and sell products and services based on our software platform. This year, 35 Indian companies qualified for the Forbes 2000 list of the world's biggest corporate giants. Among them were four valued Microsoft partners: Tata Consultancy, Infosys Technologies, Wipro and Satyam Computer Services. Microsoft is extremely proud to be a part of the economic transformation that these and other highly successful Indian companies have helped bring about. 

*Sustaining Growth, Broadening the Opportunity *

How can India best sustain its rapid growth and broaden opportunity for all its people? Much has been written about the need for sharply increased investments in highways, airports, power plants and other infrastructure. Economists also point to a need for regulatory reforms and better public services provided more transparently. These are important challenges. 

Also, from my perspective, investments in human capital should continue to be a high priority, especially efforts to further alleviate hunger, reduce illiteracy and improve public health. 

Threats to health such as HIV/AIDS, for example, could upset much of India s recent progress. The estimate is that less than one per cent of adults are infected, but because of India's large population, the number is among the highest in the world. 

Education at every level remains crucial for continued growth. Output of college and university graduates is impressive in absolute terms, and has been a great source of economic strength, but India cannot afford to become complacent. The nation now faces an acute shortage of skilled workers, as Infosys and other employers have warned recently. Education spending as a percentage of GDP lags far behind that of countries such as South Korea and Taiwan. Yet, one could argue that India needs a skilled and educated workforce even more than the so-called Asian Tigers do. They accelerated their development through manufacturing, primarily, while India's focus on services and technology makes its workforce skills especially critical. 

As many others have said and as the government has recognized in its budget plans, India urgently needs to build more primary and secondary schools, improve teaching and ensure that more children attend school, especially in rural areas. Higher education needs to be expanded and upgraded. Top-tier institutions are overrun with applicants, while skill levels among graduates of some other colleges do not meet world standards or the needs of employers. By one estimate, 25% of all new engineering graduates lack the skills to be employable in the IT industry, despite its dire need for workers. 

Microsoft is committed to helping improve Indian education. Over the past several years, we have been engaged in many collaborative efforts, mainly focused on advancing the instructional uses of technology and expanding access to computers and computer skills. For example, our Project Shish currently works with more than 10 state governments, bringing computer skills training to more than 120,000 teachers so far. We have helped enhance learning opportunities available to students in slum and rural schools through support for Digital Study Hall, a project that records and distributes DVDs of classes led by India's best grassroots teachers. And to help overcome a scarcity of classroom computers, Microsoft Research India has developed Windows Multipoint, a technology that enables several students to work on a single PC. 

In higher education, our efforts have included the Developer Platform Evangelism Academy, which has provided professional development to more than 1,000 IT and engineering faculty members at 51 Indian colleges. To help recent engineering graduates transition from school to careers, we recently began working with the Indian government and industry on an online employability portal. It will enable graduates to assess their skills, complete appropriate training and connect with prospective employers. 

*Technology and India's Future* 

Besides being an important tool in education and a growth sector of the Indian economy, information technology can aid social and economic development in many ways. Wide deployment of computers, software and telecommunications helps boost productivity and reduce transaction costs in many sectors, strengthening economic growth. Computers, mobile devices and software can help expand the quality and availability of health care and other public services, as well as education. 

A lack of access to technology, on the other hand, can hinder development. More than 30 years after the invention of one of the most versatile and empowering technologies of our time, the personal computer is readily available to only 1 billion of the world's more than 6 billion people. Microsoft's founding vision of a computer on every desk and in every home is a reality for the roughly 1 billion people living near the top of the global economic pyramid. But the digital revolution has yet to spread very far in many rural areas, impoverished communities and developing countries, including India. 

Disparities in technology access are troubling, for as the global economy is increasingly computerized and moves online, social and economic development becomes even more difficult in the places and for the people left behind, on the less fortunate side of the digital divide. This is a problem that Microsoft and others in the information technology industry have been working to address. 

Microsoft's ultimate goal is to bring the benefits of technology to every person. Toward that end, we have set our sights on an ambitious milestone: With governments and other partners, we aim to deliver the power of information technology to 1 billion more people worldwide by the year 2015. We are expanding several technology training and assistance programs. 

And we recently introduced the low-cost Microsoft Student Innovation Suite of software products, including versions of windows, Microsoft Office, Learning Essentials and Microsoft Math. Although we invested many millions of dollars to develop these products, the suite will be available tom students for about Rs.127, through government programmes in India and many other developing countries as part of targeted programmes that provide PCs to disadvantaged students. 

We are taking these and other steps because, as industry leaders and simply as human beings, we believe that all 6 billion people who share this planet deserve a chance to realize their full potential. We are especially excited to be working toward realizing this vision in India, where progress on many fronts is already well underway. 
---------------------------------------------------------------

_Although, I've covered this piece of news in the previous thread this is an update for people who happen to miss the last thread._


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## Bushroda

*Jones Lang LaSalle, Former Trammell Crow Entity Merge Indian Operations* 
June 12, 2007 
By Dees Stribling, Special Correspondent 

Jones Lang LaSalle Inc. and the Indian business entity formerly known as Trammell Crow Meghraj have struck an agreement to combine their operations in India. The new entity will be known as Jones Lang LaSalle Meghraj and will have about 2,800 employees in India with offices in 10 cities. 

The combined firm, which will have 44 million square feet under management across India, will have its head office in Delhi. The merger enables Jones Lang LaSalle, which has about 160 offices in more than 450 cities worldwide, to add scale in India and its fast-growing economy.

According to Jones Lang LaSalle, the new entity aspires to exceed $100 million in revenue by 2009 and aims to establish offices in five more Indian cities by then. The company also plans to introduce new service lines, including a hotel division, corporate capital markets, debt and derivatives, asset management and mall management. 

TCM was formerly an equity partnership between Trammell Crow Co., which was recently acquired by CB Richard Ellis Inc.; Meghraj Group, a private financial services company; and Sundown Group, a real estate investment company in the United Kingdom. Both Jones Lang LaSalle and TCM's senior management will hold leadership positions within Jones Lang LaSalle Meghraj, and all current employees will be integrated into the combined organization.


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## Bushroda

*Let feel-good touch all, says Montek *
Business Standard, Mumbai June 13, 2007 

Planning Commission Deputy Chairman Montek Singh Ahluwalia today said the government is formulating a strategy to double the growth in agriculture and called for sweeping reforms in education and health to make the surging economic growth truly inclusive. 

For a long time, inclusive growth was taken to be poverty alleviation. Today, more than poverty alleviation, inclusiveness goes beyond to the perception of everyone feeling that they are getting a share of the action and getting upward social and economic mobility, he said after giving away the Business Standard Awards at a glittering function attended by a galaxy of business leaders in Mumbai. 

The reforms in higher education and health should be similar, he said, to what happened in industry 16 years ago. 

Ahluwalia said the concerns of overheating of the economy are valid, especially against the backdrop of the rising inflation a few weeks ago. However, with the inflation coming down in the recent weeks, the real worries are over. 

He pointed out how the GDP growth is no longer a concern; the current debate is confined to whether it will grow at over 9 per cent, or, he said in a lighter vein, at as low as 8.5 per cent. 

On the downside, Ahluwalia pointed out that, in spite of the achievements of software companies, the skill shortage has to be recognised as a major crisis situation. This is where reforms in the higher education sector have to play a major role, he said. 

According to him, the government has recognised that infrastructure is the single most important lever to keep the growth momentum high, and expressed happiness that the concerns are shared by the chief ministers of various states. 

Traditionally, we tend to think that policy issues are discussed at the national level, but at the state level, there is a large degree of freedom to influence the levers of agriculture, infrastructure, and other social sectors, said Ahluwalia. 

He exhorted Indian industry to support the fundamental growth pillars of Indian economy in order to sustain growth. While we do our bit to raise consciousness, industry needs to lend its support, he said. 

Earlier T Thomas, the chairman of Business Standard Ltd, said India is lucky to have, in Prime Minister Manmohan Singh and Ahluwalia, two eminent non-political economists steering its policy framework. 

The CEO of the Year award was given to Bharti Group Chairman Sunil Mittal for being at the forefront of Indias phenomenal telecom growth. Receiving the award, Mittal said one can reasonably expect to be declared the entrepreneur of the year when one grows from a $5 million company to a $5 billion company in 10 years. 

However, he said, it was a proud moment for someone in Bharti to be recognised as the CEO of the year. He said he was glad he got it now, for, having moved on from being the CEO with effect from April this year, this was his last chance of winning the award. 

K V Kamath, the CEO and MD of ICICI Bank, who received the Banker of the Year award for transforming ICICI bank into a retail juggernaut, thanked Team ICICI for its efforts. 

The award for the Equity Fund Manager of the Year was won by Anup Bhasker, a former fund manager at Sundaram BNP Paribas and now the head of equities at UTI Mutual, while the honour of the Debt Fund Manager of the Year went to Ritesh Jain, head of fixed income at Kotak Mutual. 

Bharat Heavy Electricals won the Star PSU of the Year award, Parsvnath Developers was declared the Star Unlisted Company (the company was listed in November 2006), Siemens India won the Star MNC award and Manugraph India won the Star SME. The Most Innovative Company of the Year award was given to Moser Baer. 

Chevrolet Aveo U-VA won the BS Motoring Car of the Year award and Hero Honda CBZ X treme was chosen the BS Motoring Bike of the Year.


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## Bushroda

*India's biggest IPO is launched*
Teipei Times, NEW DELHI 
Tuesday, Jun 12, 2007

*SECOND ATTEMPT: DLF Ltd, the nation's largest real estate firm, first tried to go public last year, but scrapped the offer amid a stock market meltdown *

India's top real estate company, DLF Ltd, began taking orders from investors yesterday for its initial public offering (IPO) of shares in what will likely be India's biggest IPO ever.

DLF is offering 175 million new shares to the public in a price band of 500 rupees to 550 rupees. If all shares are subscribed, the company will raise between 87.5 billion rupees (US$2.1 billion) and 96.25 billion rupees depending on the cut off price.

A successful listing would boost the net worth of chairman K.P. Singh and immediate family members, who together own 97.4 percent of the company, to more than US$18 billion.

The sales end on Thursday, and the stock is expected to list on the Bombay Stock Exchange as well as the National Stock Exchange by the end of this month.

India's largest IPO until now was that of Britain's Cairn Energy, which listed its Indian subsidiary on the local stock exchanges last December.

India's booming economy, which is growing at close to 9 percent annually, has seen property prices soar in recent years, bringing windfall gains to companies like DLF that hold large land reserves on the outskirts of major Indian cities. Those were bought from farmers at rates much lower than the current market price.

The growth in the property market has slowed in recent months because of high prices and a series of interest rate hikes, but most analysts and research groups feel the lull is temporary.

DLF's IPO is expected to be subscribed at the higher end of the price band, making it a US$23 billion company in terms of market capitalization.

DLF, the country's largest real estate firm in terms of the area it has developed, first tried to make a public offer last year, but scrapped the plans amid a stock market meltdown and disputes with minority shareholders.


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## Bushroda

*Emerging India / Eco-fuels key to sustaining growth*
The Yomiuri Shimbun, Japan

The following is the third and final installment in the second part of a series of articles on new developments in India, which celebrates the 60th anniversary of its independence this year. 

The Ganges Delta, located at the mouth of the great Ganges River running through eastern India, has numerous islands and shoals in a vast expanse of coast several hundred kilometers from side to side. 

One of them is Gosaba Island, home to an expanse of virgin mangrove forests and where inhabitants make their living from traditional farming. A notable anti-global warming device has emerged on the island located about 110 kilometers from Kolkata. 

At her house's kitchen, blue flames rose as Malina Majumder, 48, lit a gas stove with a match. The stove was connected by a hose to a concrete tank buried in the front yard. 

The tank is a device to generate biogas. All Majumder has to do is stir kitchen garbage and cow dung in water and pour the mixture into the tank. The mixture ferments in due course to generate methane gas. 

"The fire is very strong. It cooks well with no smoke. It's very helpful," she said. 

The island has almost no telephone service, and until June 1997 it had no electricity supply either. Basic daily transportation is by rickshaw. 

But the methane gas energy source generation, which took advantage of local underdeveloped conditions, has changed islanders' life dramatically. 

According to the International Energy Agency, renewable energy sources accounted for 37.4 percent of India's energy consumption in 2004-- against 34.1 percent for coal and 22.2 percent for oil--a phenomenally high level compared with other countries. 

The trump card here is cow dung. The dung from the cattle that Hindus revere as god is processed into solid fuel after being dried in the sun. The fuel has long been appreciated in India. 

The Indian government saw the potential of this traditional fuel as a solution to two problems--energy supply and global warming. A team of experts in West Bengal State, where Gosaba Island is located, has developed a convenient and relatively cheap gasifier. The island is now designated as a model district for utilization of renewable sources of energy. 

A woody biomass-based power plant that uses wood chips as fuel and solar power generation equipment has been installed on the island. As a result, electricity is now supplied to about 10,000 islanders living in five villages. 

Despite continued economic growth for India as a whole, 78 million households--or 56 percent of Indians living in agricultural areas--have no electricity. The Indian government has set a goal of reducing the number of villages with no power supply from the current 122,400, to zero by 2009, and supplying electricity to all households by 2012. Of the 122,400 villages without power, 25,000 are in areas where power transmission cables are difficult to install. There is a possibility that power could be supplied to these villages if they use garbage effectively for power generation, as Gosaba Island has done. 

India has refused to commit to implementing the Kyoto Protocol, which calls for mandatory reductions in greenhouse gas emissions, by denouncing it as "the ego of industrial nations that impedes the growth of developing countries." But in anticipation of a future energy shortage, India has been showing a keen interest in developing renewable energy sources. 

India has surpassed Japan to rank fourth in the world in energy consumption. According to a report compiled by the Indian government's Planning Commission, the country's energy consumption will quadruple over a period of 25 years from 2006 to 2031 if the national economy continues to grow at an annual pace of 9 percent. 

Cow dung is not the only energy source the nation has to rely on. India had a wind-power capacity of 4.43 million kilowatts at the end of 2005, the biggest in Asia and the world's fourth largest. 

Indian New and Renewable Energy Minister Vilas Muttemwar is optimistic about the results of efforts to develop renewable energy sources. The minister says future technical innovations will "bring down the cost, and the day will come when all these sources will be cheaper than other power [sources]." 

Industrial nations as well as newly industrializing countries, both of which are tasked with tackling the same difficult issues as India, are paying attention to India's challenge--decreasing reliance on fossil fuels for energy supply while maintaining momentum in economic growth.


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## Bushroda

*Finnair to start direct Mumbai-Helsinki flights*

Mumbai, June 13 (IANS) Finland's national carrier Finnair is all set to start direct flights between Helsinki and Mumbai from June 27, Christer Haglund, senior vice president of the airline, said here Tuesday.

"Starting from June 27, Finnair will connect Mumbai to Europe in the fastest and most convenient service five times a week with the most competitive return fares," Haglund said at a news conference.

"Apart from providing the latest wide-bodied Airbus A340 crafts, Finnair will cater to Indian tastes and preferences with Indian cabin crew, to make Indian passengers feel at home."

Haglund said Finnair has decided to focus on India as a major Asian hub of its operations.

"Finnair commenced operations from to India with three flights a week to Delhi in October 2006, and in less that eight months, we will be operating 12 flights a week to India.

He also termed the Mumbai-Helsinki flights "environment friendly".

"With a flight time of just over eight hours, the Mumbai-Helsinki flights will be environmental friendly as there will be no refuelling stops on Europe's most modern fleet of aircraft."

The senior vice president said that the airline's economy class passenger load to Asia had increased by 80 percent, and the business class by 40 percent.

"We foresee an enormous potential in the Asia market, particularly in the Indian sector, though the revenue from the Asian market in the last fiscal was just five percent of the airline's total revenue."


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## Bushroda

*India Inc to hire more in Q3: Manpower* 
Posted online: Wednesday, June 13, 2007 at 0000 hours IST 

NEW DELHI, JUN 12: As India's economy gains strength, hiring by India Inc is expected to remain strong in the third quarter this fiscal with 42% corporates planning to recruit more, a survey by global employment consultancy firm Manpower said on Tuesday. 
As per the survey, out of 4,925 employees from 30 cities belonging to seven core sectors interviewed, 42% expected an increase in staffing levels in the Q3 2007. While 3% anticipate a decrease, 42% are expecting no change, putting the countrys employment outlook at 39%. 

The increased hiring is expected to be driven by sectors such as services, manufacturing and retail.The BPO and IT boom along with growth in retailing is spurring the services sector. It is also seeing a lot of consolidation and with economy booming, the sector is showing a lot of growth, Manpower India executive chairman Soumen Basu told PTI. 

Commenting on the survey, he said India Inc will need to translate its hiring intent of 39% into actual hiring and give the opportunity to the right talent. It should also look at how it can widen its talent base and make more skills available. In India, rejection l estate; mining and construction; transport & utilities; public administration and education; wholesale & retail trade and manufacturing. 

PTI


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## Bushroda

*Brazil, India demand lower U.S. farm subsidies* 
*Want `real' cuts in advance of trade negotiations, or risk another setback to WTO Doha round talks*

Jun 12, 2007 04:30 AM 
BRADLEY S. KLAPPER 
Toronto Star, Associated Press

GENEVABrazil and India have challenged the United States to offer "real" cuts in the amount of subsidies paid out to American farmers or risk another setback in the World Trade Organization's long-suffering round of global commerce talks.

The administration of President George W. Bush has not budged on farm subsidies since an October 2005 offer to cap them at $22 billion (U.S.) annually, but now needs to go as far as halving that figure to salvage a new global trade deal by the end of the year, Brazil and India said yesterday.

"The U.S. has to deliver," Indian Trade Minister Kamal Nath told reporters after top officials from more than 20 developing countries met at the trade organization's Geneva headquarters.

The talks, known as the Doha round, have struggled since their inception in Qatar's capital largely because of wrangling between rich and poor countries over eliminating barriers to agricultural trade. Critics of the subsidies say they unfairly deflate international prices, making it impossible for poorer countries to develop their economies by selling farm goods abroad.

Having already missed numerous deadlines, negotiators are currently aiming for year's end to wrap up a trade treaty designed to add billions of dollars to the world economy and lift millions of people out of poverty. 

Brazil and India, which co-lead the trade organization's emerging economies bloc, meet next week with the U.S. and the European Union in Germany for discussions that have been described as crucial for the six-year-old talks.

Brazil has proposed a limit of $12 billion (U.S.) on American farm subsidies, Foreign Minister Celso Amorim said. 

Indian Trade Minister Kamal Nath said many of the countries at the meeting wanted U.S. assurance that spending would not increase from a current estimated level of $11 billion.

Gretchen Hamel, speaking for the Office of the U.S. Trade Representative, said even the current U.S. proposal is generous compared to the intransigence shown by leading developing countries.

"The question in the negotiations is not whether (we) should improve our October 2005 offer, but whether there is enough on the table from other countries to warrant us maintaining our current proposal," she told Associated Press in an e-mailed statement. ``Neither in agricultural market access nor in (manufactured goods) have we seen such a level of ambition.''

The U.S. and the 27-country EU have repeatedly said they will make no further concessions on agriculture as long as such major emerging countries as Brazil, China and India refuse to open up their markets to manufactured products.


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## Bushroda

*The new passage to India, business class*

*· Foreign executives pour in as salaries soar 
· Shortage of local talent for boming economy *

Randeep Ramesh in New Delhi
Wednesday June 13, 2007
The Guardian 

Three years after rejecting the chance to work in India because the country was too poor and chaotic, Andrew Levermore, a retail executive who had worked in South Africa and Britain, was persuaded by a powerful Mumbai business family to set up India's first western-style hypermarket.

"I came round when I saw their vision. They were dead serious and yes I had to make some lifestyle adjustments but [it was] too good an opportunity too miss. Of course the salary compared favourably with home." Now on the brink of rolling out another 28 stores, Mr Levermore, 44, is convincing two more expats to leave jobs in the west and work in India. "I have just hired my head of operations from Sainsbury's and there's another [foreign hire] for buying and merchandising."

Mr Levermore is part of a new passage to India. As the economy booms, there is not enough talent to fill the expanding number of middle management positions and more western expatriates are taking senior positions. Recruitment consultants say Indian workers are asking for so much foreigners are being "priced back in".

"It's happening very quickly now," says Kris Lakshmikanth, chief executive of Headhunters India. "We are seeing more than 15% of management and skilled positions being filled by expats. In hotel management there's a step change required and we can only get that from abroad. In the airline industry, 50% of pilots are foreign. A few years ago they made up just 5% [of the workforce]." Salaries for chief executives have doubled in the past few years and now range from £125,000 to £600,000. Senior managers can expect £100,000 a year. The head of public relations at an Indian corporation earns £40,000.

Bharti Airtel, the country's biggest mobile operator, says foreign managers were once rare but are now as good value as Indian staff. Sunil Bharti Mittal, the company's founder, told reporters last month his company had begun to hire "expats who cost less than Indian managers".

Andrea Stone, head of marketing at Bharti's software arm Telesoft, joined on local terms in 2005. She said her salary was "good enough to live well [in Delhi]". "I brought skills they did not have. One was that I had worked in Britain, Hong Kong, Japan and Germany and could deal with overseas clients. The other was motivating teams of young dynamic people."

The real challenges, says Ms Stone, come when you leave the office. "You can't walk outside easily. It's too hot and there are not that many parks. Also Delhi does not have a public transport system, which is hard. You can't pop out for Marks and Spencer food. But you cope."

The travails of living in the developing world appear to pale beside the money to be made there. Foreign companies are also importing their brightest and best to India. Cisco Systems, the US technology giant, transferred seven top managers to its Bangalore office this year. The head of Anglo-Dutch multinational Unilever in the country is a South African. The boss of Goldman Sachs is an American.

Of the 3 million Indian students who graduate each year, Indian industry admits, only 15% could be employed in multinationals. Recruiting and retaining skilled Indian workers is becoming harder and more expensive than ever. Pay packets are getting fatter faster in India than anywhere else in Asia. According to a study by human resources company Hewitt Associates, average salary increases in India are running at more than 14% a year, compared with about 8% in China and slightly less in South Korea and the Philippines.

But many companies say that in the scramble to scale up, they need foreign help. Reliance Industries, India's biggest private company, is spending £2.5bn to create a chain of superstores across India. Its retail division now employs 100 expatriates in senior management who bring "invaluable global experience". These skills, said chairman Mukesh Ambani, were crucial in creating Reliance's signature convenience stores. "We were ahead of the world in creating [these]. When Tesco went to California it chose to use the same model. That shows how we benefit [from foreign talent]."


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## Bushroda

*Engg education and businesses from India and the US plan for collaboration*
By Team Mangalorean - Mangalore

http://imageshack.us

Mangalore June 13: Leaders of engineering education and engineering businesses from US and India, along with several government dignitaries met at an Action Planning Forum for Indo US collaboration in engineering education, hosted by Kris Gopalakrishnan, Managing Director and CEO-Designate of Infosys at their Mysore Campus on June 3 to June 5, 2007.

Infosys offered outstanding hospitality at their state-of-the art facilities of their Leadership Institute to the 81 participants who included several directors, deans of engineering, vice chancellors as well as over 25 business representatives. Prof. N. Balakrishnan, Associate Director, Indian Institute of Science and Dr. Frank Huband, Executive Director, American Society for Engineering Education, welcomed the participants on behalf of the organizers. Prof V.S. Arunachalam, Former Scientific Advisor to Defence Minister, Dr. T. Ramasami, Secretary, Department of Science and Technology and Dr. D. Acharya, Chairman of All India Council for Technical Education, gave keynote addresses. 

The goal of the Forum was to develop an action plan for improving the quality and global relevance of engineering education in India and in the US. Of particular concern to the participants was the lack of interest in science and engineering in the US, the inadequate preparation of engineering graduates in India, the shortage of students pursuing Ph.D. programs in engineering in India and the need to encourage and support women and underrepresented minorities in engineering careers in both countries. The participants discussed several successful and promising models of collaborations which have potential for scaling up. This was the first of two forums organized by the American Society for Engineering Education (ASEE) and the newly formed Indo US Collaboration for Engineering Education (IUCEE). The preliminary recommendations from the Mysore Forum will be developed further at the second Forum to be held at the National Academy of Engineering in Washington DC on August 29 to 31, 2007.

One of the key outcomes of these action planning forums could be the establishment of an Indo US Engineering Faculty Institute with four thrust areas: curriculum and delivery, quality and accreditation, research and development, and innovation and entrepreneurship. Cross cutting themes for these thrust areas are industry needs and global relevance. This Institute would help improve the preparedness of the large number of faculty in engineering colleges in India and in the US to address the needs of the global economy. Another outcome could be the development of an Indo US Engineering Student Network for facilitating student internships and interactions as well as providing students access to high quality learning materials. Expectations are that the Student Network will be linked to the Global Student Forum currently sponsored by ASEE and International Federation of Engineering Education Societies (IFEES).

The resulting sustainable collaborations are expected to lead to clear mutual benefits to India and to the US. Benefits to India include an increase in the number of qualified engineering faculty, access to better curricular experiences for students, better employability of engineering graduates with skills needed by industry, increase in the research activity and increase in the production of Ph.Ds. in engineering colleges. Benefits to US include opportunities for global experiences for faculty and students, collaborative research, development and entrepreneurship in emerging technologies of global relevance, as well as access for US universities and companies to more and better prepared engineering graduates. 

Initial support for the planning was obtained from Infosys, Deshpande Foundation, Indo US Science and Technology Forum as well as the corporations Hewlett Packard, National Instruments, Dassault Systemes, Microsoft, Autodesk, Agilent Technologies and UGS. Faculty, administrators and alumni of Indian Institutes of Technology (IITs) played a major role in initiating the collaboration at the Pan IIT 2006 Conference held in Mumbai in December 2006. The US Embassy as well as the International Federation for Engineering Education Societies (IFEES) and the Indian Society for Technical Education (ISTE) were also important partners.

The US delegation led by Dr. James Melsa, President-Elect of American Society for Engineering Education, visited New Delhi after the Mysore Forum. They met with President Abdul Kalam as well as the US Ambassador David C. Mulford to brief them about the recommendations from the Mysore Forum and to seek their advice. A small team of the participants, led by Barbara Olds, Associate Vice President, Colorado School of Mines visited Punjab Engineering College in Chandigarh (alma mater of Kalpana Chawla, the Indian born astronaut who died in the Space Shuttle Columbia disaster), for the nomination a faculty member, Uma Bathra, as Member-at -Large for Society for Women Engineers.


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## Bushroda

*Industrial output index echoes growth story*
Sangeeta Singh and Sanjiv Shankaran
LiveMint.com, Wall Street Journal

*Powered by a surge in manufacturing, production rose 13.6% in April, exceeding expectations*

New Delhi: Powered by manufacturing, industrial production in the country rose by 13.6% in the first month of the current fiscal year.

While manufacturing grew at 15.1%, the mining and electricity sectors grew by 3.4% and 8.7%, respectively, says a release issued by the Central Statistical Organization of the ministry of statistics and programme implementation. The revised annual industrial growth for 2006-07 has been pegged at 11.5%, while for manufacturing it is 12.5%.

On the face of it, the data suggests that the credit squeeze imposed by the Reserve Bank of India (RBI) is yet to impact the growth momentum in the economy.

However, as economists point out, the current surge is being led by sectors, financing their investments either through domestic offerings of equity and debt together with external commercial borrowings (ECBs), rather than taking recourse to bank credit.

Consumption and investment demand are independent. Most of the liquidity is getting absorbed in the retail sector. Investment demand is being satiated by going outside the system (through equity or ECBs), says Jammu and Kashmir Bank Ltds chairman and chief executive officer Haseeb Drabu.

The use-based classification data released along with the industrial production data reveals a double-digit surge in production of capital goods by 17.7%, intermediates such as steel by 12.6% and consumer non-durables such as cosmetics and services by 21.9%.

However, growth in production of consumer durables such as automobiles and television sets, which are directly affected by the rising cost of credit, rose by 5.3% after averaging 9.1% in 2006-07.

Some believe that the data also reflects growing consumer confidence.

The growth in consumer non-durables is an indicator of how the average household feels about the future; its not a bad measure of consumer confidence. Non-durables reflect a change in lifestyles, when it comes to capital expenditure, said Pronab Sen, Indias chief statistician.

Further, he suggests that the surge in production capacities, reflected in the double-digit growth in capital goods and intermediates, is beginning to catch up on demand in the economy. Capacities started a couple of years earlier may have started coming on stream; therefore, overheating may not become a concern, he reasons.

The continued surge in industrial production has triggered fears in some quarters that the central bank would effect another round of interest rate hikes. So far, it has raised its rates nine times since October 2004 and hiked the cash reserve ratio three times since December 2006, as a measure to curb excess liquidity. Consequently, commercial banks have increased their lending rates at 250 basis points since December 2006.

Currently, credit growth has slowed to 26%, compared with 30% at the end of May last year. The inflation rate as measured by the wholesale price index, too, moderated to 4.85% for the week ended 26 May.

According to Shashank Bhide, senior research counsellor, National Council for Applied Economic Research, the data is largely a reflection of more than 10% industrial growth in the last quarter of 2006-07.

I believe this momentum can be sustained, said Bhide. While the high growth in capital goods sector is a reflection of increased investments, in the consumer goods sector it is due to increased domestic demand as also increased export activities.

Sen, who says he believes bank credit has never been a major source of term finance, maintains that the hike in interest rates would not trigger a significant slowdown in capital goods. RBI data shows that ECBs in 2006-07 were largely on account of investment demand. 
In the April-December 2006 period, ECB inflows were $9.1 billion (Rs37,310 crore), higher than inflows of $2.72 billion for all of 2005-06.

Again, according to Prime Database, a New Delhi-based independent research outfit on primary markets, aggregate borrowing (including banks and PSUs) through private placement in 2006-07 rose by 13% to Rs92,355 crore. In the same period, equity offerings mopped up Rs24,993 crore, the highest ever in the Indian capital market.


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## Bushroda

*One PC for every 50 Indians* 
CORPORATE BUREAU 
Posted online: Wednesday, June 13, 2007 at 0051 hours IST 

NEW DELHI, JUN 12: The personal computer (PC) market in India witnessed 20% growth in unit shipments in fiscal 2006-07, according to IDC. With this, the total installed base of PCs in India grew to more than 22 million, which means a PC for every 50 Indians. 

At the year-end, HP retained the top spot with a market share of 21.2%, followed by HCL at 13.5% and Lenovo at 9.5%, in terms of unit shipments of both desktops and notebooks. In commercial desktop PC shipments, HCL led the market, followed by HP and Lenovo, whereas in consumer desktop PC shipments, HP was the leader, followed by HCL and Zenith. 

In terms of total desktop PC shipments also HP led the market, with HCL and Lenovo coming at second and third spots, respectively. In the notebook PC market, HP retained the top spot with a market share of 39.6%. Lenovo came in at the second spot with 17.6% market share and Toshiba climbed up to take the third spot replacing Dell. 

Overall client the installed base of PCs registered a CAGR of 32.3% up from 9.5 million in 2003 to cross 22 million in 2006, thereby more than doubling in a three-year time frame. 

Post liberalisation blues have given way to a robust economy that is fuelling increasing spends on IT infrastructure by corporates and government, and on PCs by the home and education segments. PCs form the backbone of IT adoption, said Kapil Dev Singh, country manager, IDC India. 

However, we still have miles to go as a country to evolve an ecosystem that would help to take this trend to the next level, so that the benefits of computerisation reach to the masses, he added.


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## Bushroda

*Designing Dharavi: Improving Life in Mumbai's Largest Slum*
WorldChanging Team
June 12, 2007 9:53 AM
Contributed by guest writer, Augusta Dwyer 

It is difficult not to be daunted by Dharavi. Mumbais largest slum  indeed the largest slum in all of Asia  many taxi drivers outside the train station at Mahim junction dont even want to go there. Finally one agrees, negotiating the narrow streets around the station then onto a highway crossing the noisome mangrove swamp lining the Mithi River, its name, sweet, an insult to its present state. 

When he was a boy, Santosh Sabat could see the train station from his familys shanty house, and there was open space all around. People would put down stones or lengths of lumber to cross its streams and wetlands. 

By now, however, 600,000 people live in Dharavi. It is packed with all kinds of shops and small businesses, 62 pongal houses, where legions of young men pay a few rupees a month to sleep, Mumbais largest recycling industry, which employs 5000 workers, leatherworks, potteries, and the infernal little place I see when I first emerge at T Junction, a murky room filled with a huge mound of discarded shoes and sandals, where three women toil in the suffocating heat, franticly rubbing and cleaning them for resale. In the dual-front attack of sun and desolation on this mean little lane, their ill-paid work -- and the life that must call for this -- seems as bleak as any could possibly be.

Santosh, 37, has lived here all his life; he brought his wife here from Orissa, and his two sons, Sagar, 11, and Samir, 7, were born here. Four years ago, after losing his job at a textile factory, he purchased a cable installation business. He earns good money by Mumbai standards, between 10,000 and 12,000 rupees a month, but not enough to find better lodging than what he has now, a two-storey structure typical of many Dharavi slum houses, plastered brick on the first floor and corrugated metal sheeting forming the walls and roof of the second. 

But he has always had an interest in social work, he says, ever since I was a child, so thats how, when people were talking about National Slum Dwellers Federation, I joined. This was in 1991, he adds. 

By now Santosh is on the committee of a local Federation society representing160 families, and part of a movement of the poor with two million members across India. I saw the work being done by the NSDF and thats why I thought that, by joining, our lives would improve, he says simply.

Improvement is also on the mind of the state government these days. Indias economy is growing at a pace rivalling that of China, and Mumbai, Indias largest city, is at its forefront, seeing rapid growth in its financial, banking and IT sectors. As the entire metropolis expands ever further north, Dharavi, a district once on the city outskirts, now lies at its very heart.

Originally a village of Kolis, or fisher folk, living along the banks of Mahim Creek, decades of migration and forced relocations of slum dwellers from other parts of the city have filled in the swampy land and carpeted it with a map of contiguous settlements, called nagars. Dharavi, as journalist Kalpana Sharma wrote, is today an amazing mosaic of villages and townships from all over India. 

Santoshs home now sits within a dense maze of lanes and alleys, down a corridor no more than two feet wide, a small flag-stoned space with lime-green walls, lit with a fluorescent light and filled with women and children. His wife Geetangeli wastes no time in switching on a large, square fan and sending Sagar, just back from school and still in his uniform, out for cold bottles of Coke. 

The fan seems to take up an absurd amount of space, as does the large plastic barrel of water. A bunk runs across one wall, wedged beneath a staircase and a shelf loaded with electronics: a television, a sound system and a shrine lit with multi-colored fairy lights. While it has an upstairs loft, this has been lent to friends, another family of four, which means eight people make do in these two little rooms.

With spaces the size of a phone booth for cooking and for bathing, I can picture how Geetanjelis life in here is one of continually manoeuvring herself around bulky objects, children and visitors. Extending an arm through the doorway, she can easily touch the wall of the next building. The tap outside works for two hours a day, and the public toilet, while not far, is noxious and ******. Garbage is simply thrown into any available open space outside, mixing its ******* odours with that of the running sewers. But worst were last years monsoon floods, and she points to Samir. The sewage water came in higher than his head, she says. 

Yet for all its chaotic tangle of urban poverty, Dharavi is a slum with major real estate value. Thanks to Mumbais financial vibrancy, it now lies next to one of its most sought-after commercial districts, the Bhandra-Kurla Complex, and there are big plans to rehabilitate it. 

The state government wants private developers to do that, the carrot being the so-called sales options: for every square metre of housing built and given to slum dwellers like the Sabat family, they can construct 1.33 square metres of luxury apartments to sell on Mumbais booming open market. 

The citys Slum Rehabilitation Authority has stipulated that apartments for slum dwellers need only be 225 square feet in size, with walls ten feet high. And these may be slotted like rabbit cages into multi-story blocks, like those that dot the entire city, usually surrounded by the shacks of slum dwellers who provide an array of cheap services to their more affluent neighbours. 

But while these kinds of buildings are fine for the wealthy, says Sundar Burra, they are a disaster for the poor. They cannot afford to maintain elevators, or the cleaning, or the electricity needed to pump the water so high. Because of the expense and distance from work, it is not unusual for some to sell out and move back to the street. 

Sundar works at the Society for the Promotion of Area Resource Centres, better known as SPARC, the NGO that supports the efforts of the NSDF and its sister movement, Mahila Milan, to obtain better housing for their many members. Along with their struggle for tenure rights, members of both organizations have learned to formulate their own strategies for achieving housing that meets their various needs. It was the women pavement dwellers of Mahila Milan who first started designing their own flats and buildings, as the city threatened to demolish their pavement huts.

Laxmi Naidu, who lived with her family on a sidewalk in Nagpada for 22 years, recalls how she and other women in her community first came up with the design, actually measuring it out with their saris. In each house on the pavement, there are two or three generations living, she says, so when we knew we were going to be shifted, we asked, how can we stay together? We didnt have enough space for all the people in 225 square feet, so we decided to have another floor. 

Mahila Milan even held a street exhibit of this design, inviting members of government, local press and slum dwellers from all over the city to attend. Soon, the NSDF was holding such exhibitions in cities all over India.

Because of their 14-foot height and single tall window, the Mahila Milan flats recently constructed in the district of Mankhurd are well ventilated, bright, and less dependent on electric fans for cooling. Their loft spaces add extra room without seeming crowded, and include small spaces for bathing. But toilets are placed at the end of each of the buildings four floors, and kept clean by the two or three families who use each one.

The NSDF has put up three buildings in Dharavi as well. These also include the loft idea, as well as wide outer corridors, but no running water or toilets inside the apartments, decisions made by the slum dwellers themselves. They are wearily used to both electricity and water shortages, and wanted to avoid having to climb several sets of stairs with heavy cans of water. And the corridors allow families to sit outside their flats and socialize with neighbours. In a country where inter-religious strife has been deadly, maintaining good relations between Muslim and Hindu neighbours is crucial.

Recently, students at the Komla Rajevi Vidananaya Institute for Architecture have also become interested in Dharavi. They began their project by doing something developers never do: talking to the people who are going to be re-housed. The result is a slew of innovative ideas, combining living and work spaces, and even including environmental benefits like water harvesting, that challenge the Goliath of high-density housing. 

One student has created a multi-storey building with wide outer corridors connected by ramps, what KRVIA professor Ninad Pandit calls spaceways in the sky, to replicate the street. There are certain parts of Dharavi where various sorts of related economic activity goes on in several houses, he goes on, rather than just one house. So the apartments can be modified, allowing neighbours sharing a particular manufacturing process to open joining walls on one floor, while maintaining a secluded living space on another. Communal open space on various levels allows women to preserve an afternoon tradition, getting together to do embroidering.

Another design lifts the building right up over an open plaza, high enough so that, as Ninad puts it, you dont feel you are under a stilted building. Along with space for socializing and childrens games  cricket being a bit of an obsession in Mumbai -- the plaza could also be used for another prevalent Dharavi trade, drying poppadums.

In an area called Social Nagar, scores of khumbars, or potters, ply their craft, and one of the KRVIAs most interesting designs focuses on them. This student looked at the existing houses, with their living space at one end and a place to make the pots at the other. The designer took the psychology of the long house, says Ninad, and put these long strips throughout the building. These are then staggered, so that each has an additional open terrace on which to make pots, which are fired in a community kiln. Situated near a busy rail station, commercial premises would take up ground floors, but an inner ramp departs from the sidewalk to weave through the complex itself to more micro-business units. So it leads you somewhere, said Ninad, its not a dead end. People will actually use it. 

In an area called Social Nagar, scores of khumbars, or potters, ply their craft, and one of the KRVIAs most interesting designs focuses on them. This student looked at the existing houses, with their living space at one end and a place to make the pots at the other. The designer took the psychology of the long house, says Ninad, and put these long strips throughout the building. These are then staggered, so that each has an additional open terrace on which to make pots, which are fired in a community kiln. Situated near a busy rail station, commercial premises would take up ground floors, but an inner ramp departs from the sidewalk to weave through the complex itself to more micro-business units. So it leads you somewhere, said Ninad, its not a dead end. People will actually use it. 

But it is difficult to keep him off the politics of the development. So far, he says, there is no indication of how increased traffic, the need for more schools and clinics, flooding problems and other complications will be dealt with. Ostensibly, they are to be left on the shoulders of developers. Tenders will be decided based on how much bonus  the percentage of floor-space sales profit -- the developer will hand back to the government. The question for the government, he remonstrates, is why are you looking at it as a tool to earn money? Youve got 60 per cent of the population living on six to eight percent of your land and you still want to make money off them? 

While the KRVIA exhibited the student designs to the public last month, authorities have yet to decide on whether their smart ideas will be incorporated into Dharavis future.
Yet the template is there, and it works. As the National Slum Dwellers Federation has repeatedly proven, housing the poor works best, costs less and is better for the environment, when the poor themselves have a say in what is being built.


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## Bushroda

*Hydrologist to develop drinking water sources in rural India*

A University of Rhode Island researcher has been awarded a $190,000 grant from the World Bank to develop a system to provide villagers in rural India with safe, affordable and reliable drinking water.

Thomas Boving, associate professor of geosciences, is one of just 22 grant winners from 13 countries selected from a record pool of 2,900 applicants for a total of $4 million in funding. The World Banks Global Development Marketplace and the Bill and Melinda Gates Foundation are the funding agencies.

The URI scientists project will use a low-cost, easy to replicate approach of treating polluted surface water with riverbank filtration wells. A pilot site will be established in Karnataka, India, where small private sector providers will be shown how to build a business around the design, installation and operation of the filtration systems. The project expects to provide access to safe drinking water to more than 5,000 people.

The Kali River in southern India is very polluted, so if the locals rely on water from the river to drink, they get sick, said Boving, who lives in Hope Valley, R.I. If they rely on existing wells for their water, they typically must carry the water long distances and the wells often go dry. Riverbank filtration wells, however, make use of the natural filtration capacity of the sediments underlaying the river and produce water without contaminants.

In India, water-borne disease accounts for 21 percent of all communicable diseases and results in 1,600 de aths each day. To sustain its rapidly expanding economy, India will need to improve its drinking water treatment and distribution infrastructure. 

Beginning next fall, Boving will survey local residents about water needs and related issues, as well as track infection rates from water-borne diseases. He will then identify several potential sites at which to install riverbank filtration wells.

Well drill the wells near the river, and the pump will force the water to flow into the well through natural sediments that will clean it of pathogens, Boving explained. To ensure that the water is cleaned thoroughly, it should take about 20 days for the water to travel from the river to the well. The exact location of the wells  how far away from the river to put them -- will be determined by the geology.

According to Boving, riverbank filtration wells are proven systems that are more reliable and user friendly than other available treatment options because of their simplicity and because they do not rely on chemicals. They also can be used adjacent to almost any river.

The two-year project is designed to create jobs and self-sustaining businesses. Boving and a local collaborator will train local residents to operate the wells and monitor them for pathogens. The challenge, he said, will be to impose a Western business model on an Indian culture.

The World Bank project builds on a related effort Boving and his partners are currently undertaking in western Jordan, which is funded by a NATO grant. There they are using a similar approach, though the water issues in the dry Middle East are quite different from that of monsoon-dominated southern India.

What is really needed in both of these locations -- and in many, many other places in the developing world in coming decades -- is new sources of clean drinking water, Boving said. Clean water has to be cheap, and it has to be easy for the people to access, or it wont work. There also must be local control, and the water supply must be sustainable. With the World Bank funding, we aim to provide the people in our study area with exactly that.


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## Neo

June 13, 2007 
*India eyes 4.4m tons rice export in 2007*

MUMBAI, June 12: India is likely to export 4.4 million tons of rice in 2007, almost the same as a year ago, the United Nation's Food and Agricultural Organisation (FAO) said in its latest outlook.

The report said Indian rice export prices were expected to increase with the state-run grain procurement agency Food Corp. of India (FCI) setting a higher rate for purchases from farmers and a supply squeeze in aromatic basmati rice.

The rise of the rupee against the dollar will also make Indian exports dearer, the report said.

The Indian rupee has strengthened against the dollar to reach a nine-year peak of 40.28 on May 28. The rupee was 40.702-712 per dollar on Tuesday. India's Commission for Agricultural Costs & Prices has recommended a minimum support price of Rs675 for 100 kg of grade 'A' paddy (un-milled rice) and Rs645 for 100 kg of common varieties during the 2007-08 (July-June) season.

This is an increase of Rs65 per 100 kg over the price offered in the 2006-07 procurement season.

The report said global basmati rice prices are likely to rise, reflecting supply shortages of the aromatic variety in India and Pakistan.

There's more demand this time as many buyers from the Middle East are opting for Indian basmati instead of basmati from Pakistan, hence we are facing a shortage, said a senior executive with Amritsar-based Lal Qilla Rice.

The prices of traditional Indian basmati rice are ruling at $1,400 per ton compared with $700 a year-ago, he added.

India produced 91.05m tons of rice during the 2006-07 crop year compared with 91.79 million tons in the previous year, as per the latest government estimates.

The report said strong import demand is expected to drive international trade in rice to a new high of 30.2 million tons in 2007, largely spurred by a return of Indonesia as a major rice importer. FAO has revised India's wheat imports in 2007-08 to 3 million tons, up one million tons over its May forecast, but much lower than 6.5 million tons of imports a year ago.

But FAO said the forecast for India's wheat purchases were tentative as much would depend on the final outcome of this year's harvest and price developments in the domestic market.

India's state-run State Trading Corp. this month scrapped a tender for one million tons of wheat imports on high prices.

FCI has procured 10.79 million tons of wheat as on June 11, compared with a total procurement of 9.23 million tons last year.

India's wheat production for 2006-07 is seen at 73.70m tons compared with 69.35 million tons, as per latest government data.Reuters

http://www.dawn.com/2007/06/13/ebr18.htm


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## Bushroda

*Organised food retailing can increase rural income, cut inflation: CRISIL* 
13 June 2007 

At an estimated Rs12.8 trillion in 2006, India's retailing sector makes up close to 40 per cent of the country's GDP. Of this, food and grocery (F&G) items account for a significant 74 per cent of total retail sales across both, the organised and unorganised sectors. 

Only 1 per cent of the food items retailed in India flow through the organised retail channel.

An analysis done by CRISIL Research reveals that a robust, widespread and deeply penetrated organised food retailing network in India would address some key concerns facing the Indian economy today viz. limited rural prosperity and high food prices. Reduced supply chain costs arising out of lower wastage and storage costs can be shared between producers and consumers of food items as higher farm incomes and lower food prices.

The organised retail sector makes investments to reduce inefficiencies of the traditional multi-level F&G supply chain. These inefficiencies often arise out of restrictive procurement practices, and multi level storage and commissions. This pushes up the final retail prices paid by the Indian consumer to 2.6 times the prices paid to the Indian farmer. Better supply chain management implies disintermediation, an associated reduction in commissions and a far lower wastage of goods by enhancing transportation and storage facilities. 

CRISIL Research has estimated the total avoidable supply chain costs in the F&G vertical in India at about Rs.1 trillion. 

About 57 per cent of this is due to avoidable wastage and 

About 43 per cent is due to avoidable costs of storage and commissions. 
Consequently, the average realisation of the farmer is only 35-40 per cent of the retail price. This is very low as compared with farm realisations of 60-65 per cent of the retail price in countries like the US, which have an organised retail penetration of about 80 per cent. 

Sudhir Nair, head, CRISIL Research, says "If one-third of the above-mentioned savings (around Rs 335 billion) are passed on to the consumer in the form of lower costs, it amounts to more than 3.5 per cent of the country's spend on food items (Rs9,510 billion); this can play a significant role in lowering food inflation."

Strengthening the case for organised food retailing in the country, Nair further emphasises, "Realisations earned by farmers on food grains and fresh grocery, at current levels, are estimated at around Rs1.8 trillion. Assuming this segment shifts entirely to organised retailing, and two thirds of the savings from reduced supply chain inefficiencies are passed on to the farmer, farm incomes could grow by more than 37 per cent to Rs2.47 trillion. With 60 per cent of India's population employed in agriculture, this is very significant."

Further if farmers spend around 80 per cent of this incremental income, an incremental spending of upto Rs536 billion would get added to the Indian economy. This is equivalent to nearly 1.7 per cent of India's GDP.


----------



## Bushroda

*Indian worker's Polish love intensifies*
IANS[ WEDNESDAY, JUNE 13, 2007 06:30:56 PM] 

NEW DELHI: Poland could soon witness a large influx of Indian workers, particularly in the construction sector, after the two countries sign a memorandum of understanding (MoU) to streamline labour migration to the East European country. 

This was decided at a meeting held here Wednesday between Minister for Overseas Indian Affairs Vayalar Ravi and Poland's Minister for Lbaour and Social Policy Anna Kalata. 

Addressing a press conference after the meeting, Ravi said, "We proposed to sign an MoU with Poland and a note is being circulated in this regard... The MoU will streamline migration of labour from India to Poland to work in the construction, agriculture and service sectors in that country." 

As of now, there are only around 3,000 Indians employed across various sectors in Poland but this number is expected to get significant boost once the MoU is signed. The Polish minister has taken the initiative to promote recruitment of Indian workers in her country. 

Stating that her country is facing an acute labour shortage, Kalata said, "We have noticed severe discrepancies in our labour market. Around 800,000 Polish workers have left to work in other countries in the EU (European Union)." 

"The need for labour is more so in the construction sector as we are going to build a number of stadiums for the Euro 2012 football championship," the visiting minister added. 

Poland, along with Ukraine, will play joint hosts to football's second biggest event in 2012. 

She also said that Poland is on a quick growth path and hence there is an urgent need for skilled manpower. "In the first quarter of this year, our economy grew by 7.4 percent." 

The proposed MoU will also facilitate Indian companies to invest or get into partnership with companies in Poland in various sectors. 

To a question as to whether Poland was seeking investment especially from Indian IT companies, an official from the Polish minister's delegation said, "IT is one of the fastest growing sectors in Poland. We don't have to especially invite them (Indian IT companies). They very well know where the green is." 

To a question as to whether India will be signing a social security agreement with Poland similar to the one that was signed with Belgium last year, Ravi said, "This will be an MoU for streamlining labour migration, but yes, we can go on and sign a social security agreement later."


----------



## Bushroda

*Faces Cosmetics sets sights on Indian market*
Charlotte Eyre
Cosmetics Design, France

6/12/2007 - *Aiming to tap into India's booming cosmetics and personal products market, Canadian firm Faces Cosmetics plans to set up a series of stores across the country.*

The company has signed a memorandum of understanding with an Indian personal care products manufacturer, and it expects to conclude the terms of investment by the end of the month, a company report states. 

Faces Cosmetics did not reveal the name of the partner. Initially, Faces Cosmetics expects to open company-owned stores, soon followed by an aggressive rollout of franchised stores. These will sell a range of cosmetic, skin care and anti-aging products, the report stated.

A recent statement from the company's chairman and chief executive, Ramesh Jolly, said that as India is the fourth largest and second fastest growing major economy in the world, it is therefore "a key market for Faces Cosmetics future expansions plans".

Faces Cosmetics produces color cosmetics and anti-aging products that are targeted at women of varying skin tones and ethnicity, as well as at a range of age groups, from teenagers to more mature women. 

The company's product portfolio also includes aesthetic treatments such as facials, manicures and waxing. 

It mainly operates a franchise model, where their different product categories are sold through 56 retail outlets in the US, Ireland, Canada and Mexico.

In January 2007, the group announced the sale of a master franchise in the Middle East, covering the United Arab Emirates, Saudi Arabia, Kuwait, Oman, Qatar, Bahrain, and Yemen. It also plans to open franchises in Eastern Europe, starting with a store in Prishtina, Kosovo.

India, along with China, is one of Asia's largest cosmetics markets, and has had growth of about 60 percent since the late 1990s, a recent Euromonitor report states.

Euromonitor experts believe that the country's current low per capita spending on personal products offers impressive growth opportunities, as Indian men and women become more interested in personal care and grooming products.

Several cosmetic and personal product companies have recently harnessed this growing consumer-spending power, and multi-national companies such as Estee Lauder, Unilever and Colgate-Palmolive have all invested in the country.


----------



## Bushroda

*Indian trade looks for new sources for diamonds*
DailyTimes, Pakistan

NEW DELHI: India, the worlds largest diamond importer, has started buying diamonds directly from Russia and wants to source from other producing nations as well to secure long-term supplies and save on purchase costs. 

Following a relaxation in Russian export rules earlier this year, Indian importers have been ordering about $10 to $12 million of diamonds each month directly from Russia. 

India buys around $8 billion worth of diamonds annually, almost all of which are exported after polishing and cutting. Most of the diamonds are bought directly from companies such as De Beers and Rio Tinto. 

Imports of diamond have started from Russia. There are two to three importers who are buying, Praveen Shankar Pandya, convenor for rough sourcing at the Gems and Jewellery Export Promotion Council (GJEPC), told Reuters. 

We are ready to buy up to $1 billion worth of diamonds annually from Russia, he said, adding the purchases were being made from state-owned Russian firms such as Alrosa and Gokhran. 

Russia accounts for more than 20 percent of global diamond production, most of which is mined in Siberia. 

Developing direct sales from Russia was important to the industry as De Beers, the main supplier of diamonds to India, has agreed that it will phase out purchases from Alrosa by 2009. 

In January, Russia allowed unlimited exports of platinum group metals, uncut diamonds and other precious metals and ores, subject to a licence from the economy ministry, replacing a system of long-term export quotas that had made trade difficult. 

India also abolished a 5 percent duty on imports of rough and polished diamonds in the government budget in February. 

The contracts with Russia are our first. We are also trying with African countries like Botswana, Angola and South Africa, Sanjay Kothari, chairman of GJEPC, said. 

He said that the Indian industry had formed a company called Diamonds India Limited a year ago with the aim of buying directly from producing countries. Industry officials said buying directly was cheaper by 4 to 5 percent than buying from a trading house. 

Bakul R Mehta, a convenor of the GJEPC, said buying from producers would also help secure long-term supplies. 

An Indian government decision to allow advance payment for buying of diamonds had helped the purchases from Russia. 

That is how it has taken off. We have to now make it grow. One hurdle confronting the Indian industry is that South Africa is considering a tax on diamond exports to encourage the local processing industry, although the GJEPC thought that would not be too disruptive. 

It is not only the cost, but the marketing ability is also important. It has taken us 30 to 40 years to develop the market, Kothari said. 

Mehta said the move to direct sourcing and the scrapping of the import duty would help India realise its goal of becoming a global trading centre for jewellery and gems. 

It will start happening in a year or so. I am hopeful that India will become a gem and jewellery hub, he said. reuters


----------



## Bushroda

*Apple finally offers complete iPod, Mac lineups to India*
By Aidan Malley
Published: 06:35 PM EST 

Apple Inc. has struck a deal that will for the first time put every one of its computers and portable media players on the shelves of Indian stores, closing a years-long gap in the company's international business.

PC business Wipro Infotech confirmed on Wednesday that it has negotiated with Apple to bring all of the latter's internationally available products to the Asian country, including rarer items such as the Xserve and Xserve RAID.

A specialized team is simultaneously being formed to help market Apple's devices to small, medium, and enterprise businesses, Wipro said. At least some support for the devices would also be handled by the large IT company.

The deal between the two firms brings India's range up to par with most other countries for the first time in several years. The Indian distributor had previously agreed to sever its links with Apple during the Mac maker's rapid decline in 1997, when Wipro's profits from Apple products were less and less beneficial to its bottom line.

Apple's resurgence in recent years has seen a similar return to health for its Indian business. In March of last year, the company announced that it would begin selling some key iPod and Mac models through local resellers in the country, but until now had refrained from opening up its entire catalog to the country's booming economy. 

No direct Apple sales are planned for the country, however. The company's official online store for the nation remains browse-only and lists products as well as pricing, but won't let customers order from the website.

Wipro itself says it welcomes the return to its role as a preferred partner.

"We are extremely pleased to partner with Apple, which is well known for its innovative products and solutions," says Wipro PC division VP Ashutosh Vaidya. "Coupled with Wipros proven marketing and support infrastructure, this will offer the customers significantly higher value for their investments."


----------



## Bushroda

*Can Romania become Europe's India?*
Alina Pahoncia | Data: 14 Iun 2007
Ziarul Financiar, Romania 

The representatives of some of the biggest players in the business process outsourcing (BPO) industry have launched operations in Bucharest in the last three years, turning Romania into a Southeast European leading light in this field.

Taking into consideration the fact that India continues to be the world's most attractive location for companies seeking to open service centres, does Romania stand any chance of becoming Europe's India in terms of outsourcing? This was the most important question that was requested to be answered by consultants, experts in this field and representatives of the authorities, who were attending the first BPO conference in Romania organised by ZIARUL FINANCIAR, in partnership with Genpact.

Economy and Finance Minister Varujan Vosganian, who attended the seminar, said that investments in outsourcing could reach 200-250 million euros by 2010. 

However, Patrick Cogny, CEO of Genpact for Europe, says that it is quite difficult to relate any SE European country to the Indian model. "India has been the worldwide success story of outsourcing over the last few years. The outsourcing industry has existed in India for well over 10 years, which demonstrates outsourcing is an industry that redefines the way companies do business," Cogny specified. India is the location of choice for service providers, especially because of the low costs and the availability of language skills. 

Whereas in India, BPO industry players operate on a market that turns out approximately 400,000 graduates a year and where experienced employees and managers are highly available, in SE Europe and implicitly in Romania, the workforce market is much more fragmented. 

According to a survey conducted by the US consulting company A.T. Kearney that was revealed during the event, Romania's attractiveness, as far as BPO investors are concerned, has lessened compared with last year. Romania therefore ranks 33rd out of an index of 50 countries, unlike last year, when it ranked 24th in the same index (although the index only accounted for 40 countries). 

"Some time ago, Romania's disadvantage to other countries was its economic stability. Now, it's HR that's the problem," Bogdan Belciu, manager with A.T. Kearney, pointed out, explaining that the main reason why Romania dropped in the ranking was due to human resources.

"We have to maximise the size of the HR market we operate on as outsourcing players. Endlessly fighting over the same people who work in the industry is not a solution. The moment five or six players in the field realise this, we will all stand to gain," stated Manish Sinha, HR Leader, Genpact Europe. 

The BPO industry players particularly require individuals with foreign language and various technical skills (accounting, IT etc.).

"The war over talent is the only thing that makes a difference among countries and the companies that operate on the BPO market," stated David Jensen, Senior Vice President, Communications, at Genpact.


----------



## Bushroda

*China, India, South Korea, Philippines: Asia Local Bond Preview* 
By Kevin Lim

June 13 (Bloomberg) -- The following events and economic reports may influence trading in Asian local-currency bonds today. Yields are from the previous session. 

*China:* The government will sell 30 billion yuan ($3.9 billion) of one-year notes today. China yesterday said the consumer price index rose 3.4 percent in May from a year earlier, breaching the central bank's 3 percent ceiling for this year for the third straight month. 

The yield on the 4.3 percent bond maturing in October 2009 was little changed at 2.93 percent, according to the China Interbank bond market. 

*India:* Output at factories, utilities and mines grew 13.6 percent in April from a year earlier, a government report showed yesterday, beating the median 11.3 percent forecast of economists in a Bloomberg survey. The government revised growth in March to 14.5 percent from an earlier reported 12.9 percent. India today will sell a total of 60 billion rupees ($1.47 billion) in treasury bills maturing in 91 and 182 days. 

The yield on the 8.07 percent bond due January 2017 rose 3 basis points to 8.26 percent, according to the central bank's trading system. A basis point is 0.01 percentage point. 

*Indonesia:* The rupiah's gain against the dollar will be helped by investments into the stock market and treasury bonds, central bank Governor Hartadi Sarwono said yesterday. ``If people are still interested in entering the stock market, or buying treasury bonds, that will strengthen the rupiah,'' Sarwono told reporters in Jakarta. 

The yield on the 10 percent bond due July 2017 fell 5 basis points to 8.95 percent, according to the Inter Dealer Market Association. 

*Malaysia:* The government will tomorrow sell 3 billion ringgit ($871 million) of 10-year bonds that comply with Islamic laws. Malaysia wants to ensure interest rates are at levels conducive to sustain economic growth, state news agency Bernama reported yesterday, citing Deputy Finance Minister Ng Yen-Yen. 

The yield on the 3.814 percent bond due February 2017 rose 6 basis points to 3.86 percent, according to the central bank. 

*Philippines:* The government yesterday rejected all bids received at an auction of 6 billion pesos ($130 million) of four-year treasury bonds. Finance Undersecretary Roberto Tan, the interim treasurer, said the government may increase borrowings from official development lenders to offset any shortfall in domestic debt. The yield would have risen to 6.749 percent at the auction if the government sold all the securities on offer, compared with 6.419 percent at an April auction. 

The yield on the 14 3/8 percent bond due April 2017 rose 5 basis points to 7.38 percent, according to the Philippine Dealing & Exchange Corp. 

*Singapore:* The economy will probably expand 6 percent this year, according to a central bank survey of 16 economists released yesterday. A similar survey carried out in March had forecast 2007 growth at 5.4 percent, slower than last year's 7.9 percent expansion. 

The yield on the 3 3/4 percent bond due September 2016 fell 7 basis points to 2.93 percent, according to data compiled by Bloomberg. 

*South Korea:* Higher competition for loans among banks is fueling an increase in money supply and risks fanning inflation, in Asia's third-largest economy, Bank of Korea Governor Lee Seong Tae said yesterday. Prime Minister Han Duck Soo told Parliament yesterday the won's appreciation has created ``difficulties'' for businesses and the government will ``stabilize'' the currency market when needed. 

The yield on the 4 3/4 percent bond due March 2012 rose 7 basis points to 5.42 percent, according to Korea Exchange. 

*Sri Lanka:* The government plans to sell up to 14.9 billion rupees ($134 million) of 91-, 182- and 364-day treasury bills today. Sri Lanka sold the securities at weighted average yields of 16.94 percent, 16.69 percent and 16.6 percent, respectively, on June 6. 

The yield on the 6.85 percent bond due April 2012 rose 5 basis points to 14.95 percent, according to People's Bank. 

*Taiwan:* Central bank board members will meet on June 21 to discuss monetary policy. The monetary authority has raised borrowing costs at its last 11 quarterly meetings, increasing the discount rate on 10-day loans to banks by an eighth of a percentage point each time to 2.875 percent on March 29. 

The yield on the 1 7/8 percent bond maturing in March 2017 fell 7 basis points to 2.46 percent, according to Gretai Securities Market. 

*Thailand:* Former Prime Minister Thaksin Shinawatra will go to court to contest the seizure of his assets, his lawyer said yesterday after his family had more than $1.53 billion frozen by investigators. Thaksin was deposed in a military coup in September. 

The yield on the 5 percent bond due May 2017 fell 4 basis points to 4.30 percent, according to the Thai Bond Market Association.


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## Bushroda

*After doctors, other Indians get ready to exit Britain*
Prasun Sonwalkar, Indo-Asian News Service
London, February 12, 2007
Published: 17:2 IST (12/2/2007) 

After doctors, other highly skilled professionals from India in Britain also face the prospect of returning home with the Home Office deciding to challenge a judicial review of recent changes in immigration rules.

Thousands of those affected by changes to the Highly Skilled Migrants Programme (HSMP) in November 2006 filed a judicial review application on Feb 6. Its admissibility is likely to be decided later this week.

Lawyers representing the Indians say there could be no greater unfairness than enticing people to come to the UK, only to change the rules under which they entered."In a letter to the Home Office, lawyers representing the HSMP Forum said: "There could be no greater unfairness than enticing people to come to the UK and to commit their future lives here for the benefit of the UK, only to change the rules under which they entered."

The Home Office responded to the notice by saying that the secretary of state would contest the judicial review, adding: "It is important that those who pass the test at the extension stage are those who will make 'the greatest contribution to the UK economy'." 

The letter added that those in Britain under the HSMP would be entitled to a permanent settlement after completing the qualifying period, but that there was "no guarantee of this". 

The November 2006 changes affected thousands of highly skilled professionals from India and other non-European Union countries. Other skilled professionals under the work permit category were also affected by changes made in April 2006 that raised the qualifying period of settlement from four to five years. Those affected under the work permit are also preparing to file a judicial review petition.

Amit Kapadia, a coordinator of the HSMP Forum, said: "The UK Home Office in order to make HSMP immigrants lives miserable in the country have been coming up with stringent new rules and expectations. It clearly shows their attitude to drive immigrants out of the country by making things very difficult. 

"It is preposterous that a programme that was initially promised to be for settlement is being converted into just a moneymaking spree for the Home Office and immigrants are solely treated as cash machines and not human beings."

Kapadia added that the new points-based system (PBS) for the HSMP category stipulated the capacity to earn high salary and younger age. Many employers do not consider HSMP holders for permanent employment because their visa is for a limited period.

"People below 32 years don't get any points for age. This is contradictory to the fact that 80 percent of the HSMP holders in the UK have been above 28 years old at the time of entry into the programme and can't grow younger everyday. Also, the new PBS ignores any points for experience when most of the HSMP holders initially qualified for the programme because of their experience," Kapadia added.

In discussion boards and chat-rooms, those affected have been lamenting the changes and animatedly discussing the possibility of any relief from the judicial review. Several have already initiated plans to return home or to other countries.

Kapadia cited the instance of Prabhakar Rao from Mumbai who was employed with the UTI Bank and completed his post-graduation from a reputed British university and opted for the HSMP visa. But his extension was refused recently under the new rules. He is in Britain with his wife and a four-year-old daughter. 

According to Rao: "We are in middle of a crisis. I could have continued my career in India but for the false promises made by the UK Home Office. Due to the new changes, all my plans got jeopardised." 

Inayat Saiyed, an IT professional from Ahmedabad, said: "Due to the new rule changes, I was not able to call my wife and kids to join me in Britain. My family members back home are paranoid. I don't know what will happen to us. We are undergoing the worst phase of our lives."


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## Neo

Thursday, June 14, 2007 

*Strike delays Indias state-run airline flights*

NEW DELHI: Thousands of striking airline employees must call off a work stoppage that has left hundreds of domestic passengers stranded or face stern action, Indias aviation minister warned Wednesday.

Flights across India were seriously delayed with thousands of baggage handlers, check-in staff and other employees of Indias struggling state-run domestic carrier Indian on an indefinite strike.

If they dont call off the strike by this evening the government will be forced to take stern steps, Civil Aviation Minister Praful Patel told reporters Wednesday, warning employees to think about their futures.

As many as 23 employees of the airline were suspended Wednesday, a Press Trust of India news agency report said.

If passengers coming to the airport keep facing this kind of inconvenience we will have to think of some other steps, said Patel, calling the strike illegal. afp

http://www.dailytimes.com.pk/default.asp?page=2007\06\14\story_14-6-2007_pg5_19


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## Neo

Thursday, June 14, 2007 

*India to float 2m tonnes wheat import tender*

NEW DELHI: India, the worlds second-largest wheat producer, will float a tender to import 2 million tonnes of the grain by the end of June, a senior government official said on Wednesday. 

The idea is to build buffer stocks, the official, who did not wish to be identified, told reporters. Farm Minister Sharad Pawar said last week the government would import 5 million tonnes of wheat between August and December to supplement government bins that was running short of procurement from local farmers. 

Last month, the government scrapped a one million tonne import tender saying the prices quoted by firms were high. In 2006, India had imported 5.5 million tonnes of wheat to replenish depleted stocks, after the government could buy only about 9 million tonnes from farmers against a target of 16 million tonnes. 

In the current season, the government hopes to procure about 11 million tonnes of wheat from farmers. reuters

http://www.dailytimes.com.pk/default.asp?page=2007\06\14\story_14-6-2007_pg5_18


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## Neo

Thursday, June 14, 2007 

*India confident on 07/08 export target*

NEW DELHI: India is confident of meeting its 2007/08 export target of $160 billion, despite the rise in the rupee, but the government is looking into possible job losses due to the gain, Trade Minister Kamal Nath said on Wednesday. We will meet the target. I am confident, Nath told reporters. 

The partially convertible rupee has gained nearly 8 percent against the dollar since the start of January, and hit a nine-year peak of 40.28 per dollar in late May. 

It is Asias best-performing currency against the dollar so far this year, and was trading around 41.0 per dollar on Wednesday. 

Small and medium-sized exporters, who account for more than 45 percent of Indias total exports, say the appreciation is hurting business and is likely to cost jobs. 

Nath told reporters his ministry was setting up a panel of experts to examine the extent of job losses in the export sector, and said he would meet the finance ministry to seek tax rebates to enable exporters to tide over the appreciation. 

Since the loss is felt by small companies and traditional sectors of exports with very high export-employment ratio, we are likely to suffer job losses of 8 million in the current fiscal, GK Gupta, president of the Federation of Indian Export Organisations, said after meeting Nath. 

Indias export target of $160 billion for the fiscal 2007/08 year, which began in April, compares with exports of $125 billion in 2006/07. Exports were $10.6 billion in April, lower than $12.6 billion a month earlier. 

The exporters suggested the rupee could be pegged to a basket of currencies of competitor countries, including China, Thailand, Pakistan, Sri Lanka, Bangladesh, Vietnam and Indonesia. 

The central bank has raised interest rates and bank reserves sharply in the past half-year to help curb inflation and strong credit growth. reuters

http://www.dailytimes.com.pk/default.asp?page=2007\06\14\story_14-6-2007_pg5_26


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## Bushroda

*Formula One prepares to invest in new Indian wealth*
Ashling OConnor in Bombay
THE TIMES

India has received a conditional offer to stage a Formula One grand prix in 2009 as the sport seeks to embrace the worlds fastest-growing economy after China. 

The Indian Olympic Association (IOA) said yesterday that it had received a memorandum of understanding from Bernie Ecclestone, the Formula One ringmaster, about hosting a race in Delhi, subject to funding and infrastructure being in place. We have bagged a Formula One championship for India, Suresh Kalmadi, the IOA president, said. 

India has long been earmarked as a potential destination for Formula One because of its huge television audience, young demographic and soaring incomes. More than half the 1.1 billion population is under 35 and a booming economy is cultivating a society where young software entrepreneurs drive sports cars and own private jets. 

Motor sport is yet to attract a significant following, but this could change if India produces a world-class Formula One driver. Narain Karthikeyan became Indias first when he signed for the former Jordan team in 2005, but has since dropped to test-driver status with Williams. Karun Chandhok, who joined the GP2 Series this year, is a potential talent. 

In April, Ecclestone said that he was personally enthusiastic about India as he is keen to extend the sports reach in Asia. Singapore is the latest to win a race. However, he has had difficulties with Indian bureaucracy and talks with other cities, including Hyderabad and Bangalore, faltered. 

The chances of a race in India increased this year with the involvement of Vijay Mallya, the Kingfisher beer baron who sponsors the Toyota team. The billionaire has lobbied hard for India and recently gained the backing of the state government of Delhi. However, this was for a street race similar to the Monaco Grand Prix, which appears to have been ruled out by the IOA in favour of building a track. 

Olympic officials hope to ride a wave of infrastructure development before the 2010 Commonwealth Games in the Indian capital, seeking the funds for a track through the public and private sectors. If India is to host a race, the IOA must sign a contract and submit financial guarantees by the end of September.


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## Bushroda

*Goldman buys stake in Indian firm* 
By Darla Mercado 
June 14, 2007 

*Goldman Sachs Group Inc. will purchase a stake in ICICI Financial Services in Mumbai, India, published reports said.*

Goldman India CEO and managing director Brooks Entwistle confirmed today that the New York-based investment bank will purchase shares in ICICI, but declined to reveal just how many shares it would buy or how much it would invest, Bloomberg reported.

India, the worlds second-fastest growing economy, is already attracting attention from the asset management and insurance business sectors: ICICI Bank has already announced it would sell a 5.9% stake in ICICI Financial Services to five unnamed investors, MarketWatch reported. 

ICICI Bank said that next Monday it will set the price band for its share offering, which is Indias largest, Bloomberg said.

The investment is subject to clearance from Indias national bank, the federal Foreign Investment Promotion Board and the Insurance Regulatory & Development Authority.


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## Bushroda

*As upper-class India changes, a storied prep school sees old ways erode, new money arrive*
International Herald Tribune, France
Published: June 14, 2007

DEHRA DUN, India: For generations, the sons of India's elite have gone into the hills, heading to this once quiet Himalayan town, to a small, spartan boarding school hidden behind high brick walls.

And until very recently, a boy leaving the Doon School could expect to find a place in the upper rungs of Indian life.

From this privileged enclave  an Indian Eton, modeled on England's most exclusive boarding school  it once seemed impossible to fail. The ambitious boys, those with names still found on school award lists, were bound for top positions in the establishment. Many students found jobs through the "Old Boys," the network of Doon graduates working in nearly every important Indian institution.

They became ambassadors and corporate chieftains. One, Rajiv Gandhi, class of 1960, became prime minister.

If all else failed, a few phone calls would be made, a few strings pulled, and a Doon boy  now a man  could live a quiet, genteel life running a tea plantation.

"There would be a big bungalow, and servants," said Philip Burrett, Doon's deputy headmaster. "A boy knew he could have that, at least.

"Those days are gone," he said one recent evening. "It's a more complicated world out there now."

So it is.

This island of carefully crafted austerity, founded in 1935, has become a reflection of a traditional upper class that is disappearing  and a new upper-class emerging to replace it.

India's old class lines have been tangled by an explosion of wealth since it opened its economy in the early 1990s, and once finely drawn social distinctions have been clouded by everything from standardized university entrance exams to jobs reserved for lower-caste Indians.

So today, the sons of diplomats are increasingly outnumbered on the vast Doon cricket grounds by the sons of newly wealthy gas-station owners and factory managers. Established families are being replaced by small-town success stories. Among the 500 or so students, it's no longer bad form to openly strive for well-paying jobs and imported cars.

"This rising class is very ambitious, and they drive their kids hard," said Kanti Bajbai, a Doon graduate and foreign affairs analyst who became headmaster in 2003. "The people who began to make money suddenly felt they could compete anywhere."

They are also growing fast. In 1995, 79,000 households earned more than US$50,000 per year. By 2005, the number was 609,000.

Nouveaux riches, some would call the recent arrivals who increasingly dominate India's boardrooms, its staid British-style clubs  and Doon School. Talk informally to some alumni, particularly those from older, well-connected families, and they'll lament the arrival of new money.

But such talk goes over badly at Doon, which is trying, in its own quiet way, to make peace with the country shifting around it.

"Doon mirrors a changing India," said Ashish Mitter, 17, the son of an Old Boy who became a top diplomat. "Doon has the reputation of being an elite school, of having the children of rich families, but that's not what it really is."

To most Indians, the school remains part of a barely conceivable universe of wealth and privilege. Its US$4,800 (3,600) annual fees are more than five times the country's average per capita income.

But, Mitter said, the Doon mystique is rooted in other things  in academics, sports and intense friendships nurtured in boarding school isolation. It's about taking pride in being an "all-around boy," as they like to say here. "Doon gives you an education in the true sense of the term," he said.

What it doesn't give you anymore is a guarantee of the good life.

While the school remains among India's best, the unspoken extras that Doon long provided  entrance into most any Indian university and connections leading to professional success  have largely disappeared.

Today, success in India is most often defined by admission to a handful of exceedingly competitive universities. A diploma from these schools  most prominently the Indian Institute of Technology  is the most prominent springboard to professional achievement.

But admission is based on one thing: a standardized admission test. And the stellar scores required for entry mean ambitious high school students often spend a year or more in the top day schools  or even full-time cram schools  that focus on the exams.

Doon students who want to get into those universities normally leave at least a year before graduation, to enter a cram school and prepare for the tests.

Because if there's one thing Doon is not about, it's cramming.

Just ask Mitter.

There are his seven classes a day, the student council he sits on, the weekly magazine he helps edit, the cricket games he plays. He's the school "captain," helping oversee the lives of the other boys.

At Doon, boys are molded into a particular type of man.

Time spent here is not always easy. The classes are demanding and the homework exhausting. The bullying can be pitiless. Former government minister Karan Singh recalled his "four rather unpleasant years" there in his autobiography.

But Doon's imprint is lasting.

It's a place where students read Shakespeare in small, discussion-filled classes, and grow comfortable wearing coats and ties. They take grueling treks into the mountains, cementing friendships that are often carried far into adulthood. They learn to be confident, and well-spoken.

Its austerity is almost monastic: The boys sleep on narrow beds and study in unheated rooms; the floors are rough stone and the lights are fluorescent tubes. Students are rarely allowed into Dehra Dun, once a small town now paved over with construction and pushing up against Doon's red walls.

With its quiet, leafy grounds, its requisite ivy-covered walls, its graceful colonial brick buildings and its increasingly scruffy stuffed tiger in the library, it can seem a place out of time.

Not long ago, when India's elite was a tiny, well-defined community, Doon was simply a part of life for 11-year-old boys of a certain pedigree.

It found its model in Eton, the centuries-old boarding school outside London with deep roots in Briton's upper classes and political aristocracy.

Doon's first headmaster, Arthur Foot, had been a teacher at Eton, and imbued the school with much of its ethos: study hard, play hard, become a leader. Surrounded by the sons of privilege, but horrified by outright snobbery, he urged boys not to mistake wealth for success while encouraging them to "develop that elusive faculty known as taste."

Doon became an enclave of tradition, where money alone didn't bring admission. The boys came from well-educated, well-connected families. Most were high caste. Most grew up speaking English.

"When I was a boy, it wasn't for people like us. It was for big chaps," said Anand Vardhan, a small-town north Indian doctor whose two sons go to Doon  but whose own father would never have thought of sending him.

In Doon, Vardhan sees possibility. He knows the diploma won't mean automatic entry for his sons into India's most elite corridors, but it will bring an excellent education.

Then there are other, less tangible, benefits.

A Doon student may not come from an elite family, but by graduation he probably looks as if he does  and is comfortable in that world.

"You should be good-looking, well-mannered .... They have to have expression power that must be very good," said Vardhan. "I didn't have that."

"For my sons, things are different," he added.

It's surprising then, when students insist that class really doesn't matter  at least not among themselves.

In part, that's the result of the school's aggressively spartan policies.

You can't wear the latest clothes at Doon, or show off the latest iPod. Spending money works out to less than US$3 (2.60) a week.

What you get here, Bajpai says, "is a metal bed, two metal (clothing) hooks and a metal locker."

"We come from different places, different towns, but we're equal at Doon," said Vardhan's 16-year-old son Suhaas.

But it goes deeper than that, according to Mitter. Once someone becomes a Doon boy, his home life  his family's money, status and influence  is left at the gates.

"We don't ask, and we don't care, who someone's parents are," he said. "We all play together, we all eat together, we all live together."


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## Bushroda

*Brazil Rolls Dice on India to Hedge China Bet: William Pesek *
By William Pesek

June 15 (Bloomberg) -- In a world where just about everyone is scared silly of upsetting China, Brazil may be an anomaly. 

Google Inc., Yahoo! Inc. and Microsoft Corp. are so worried about crossing China that they help it censor the Internet. For all its tough talk and actions around the world, the Bush administration shies away from branding China a currency manipulator or getting closer to Taiwan. 

Yet here you have Brazil risking China's wrath by cozying up to that other rising Asian superpower, India. Brazilian President Luiz Inacio Lula da Silva did just that earlier this month, visiting India to quadruple trade to $10 billion and talking of a special partnership with Asia's No. 4 economy. 

Mindful of how that might look in Beijing, Lula said in New Delhi that ``today, it is important to talk to China. You can't take China out of the picture. As in all pictures, China will be present.'' There, he said it: China is still the big economic cheese. 

The real impetus behind Lula's growing India focus was articulated by Roberto Jaguaribe, undersecretary general of political affairs at Brazil's Foreign Ministry. On the eve of Lula's trip, Jaguaribe told O Estado de S. Paulo newspaper that ``it's inevitable for Brazil to have a special relationship with India.'' 

Why? Because unlike China, Jaguaribe said, India is ``a real democracy'' and doesn't compete directly with Brazilian producers. ``We need to consolidate this process of strategic association with India to exploit our reciprocal competences,'' Jaguaribe said. 

*Controversial China* 

The subtext of all this is that China is a problematic trading partner for Brazil. On the one hand, Chinese demand for everything from iron ore to agriculture products to diamonds to graphite is boosting Brazilian growth. On the other, cheap Chinese exports of everything from shoes to textiles to toys are undermining industries Brazil needs to reduce poverty. 

In 2005, Lula took a calculated risk by becoming the first leader of a major nation to recognize China as a ``market economy'' under World Trade Organization rules. At the time, Lula and Chinese President Hu Jintao said they expected to double trade to $20 billion within three years. 

Things didn't turn out as planned. Chinese investment rolled in far more slowly than anticipated, while cheap goods flooded the domestic market. Bottom line, Brazil weakened its defenses for a rising superpower unwilling to do the same. It doesn't help that Brazil's currency is up 10 percent so far this year, while China continues to amass more than $1.2 trillion of reserves to keep its own weak. 

*Hedging With India *

Hence the appeal of India. Brazil hopes it will offer trade and business opportunities that benefit both nations equally. It's a chance to hedge Brazil's bet on China. The move is a wise one, even if it comes at the expense of Brazil's China ties. 

There are many logical reasons for Brazil and India to get close. Both nations are allies in getting the world's richest nations to scrap the agricultural subsidies eroding living standards in poorer economies. Brazil and India also are pushing for greater influence at the United Nations, International Monetary Fund and World Bank. 

India also offers Brazil an important opportunity to go up- market. Unable to compete with China's cheap labor, Brazil is realizing that service industries hold the most promise in creating good-paying jobs. Given India's growing role as a hub for information technology, biotechnology and pharmaceuticals, Brazilian companies may find greater profits there than in China. 

*Grand Vision *

While that's the grand vision, Lula has considerable work to do to achieve it. India is growing much faster than Brazil -- 9.1 percent year-over-year versus 4.3 percent -- and it's getting more attention globally than Latin America's biggest economy. 

Even though Brazil's $967 billion economy is bigger than India's $854 billion one, India is in a far more vibrant part of the world. While currency devaluation and hyperinflation no longer dominate the headlines about Latin America, Brazil doesn't have the kind of growth in its backyard -- including from the U.S. economy -- that India does. 

Yet there are some important points to keep in mind as Brazil and India become closer. 

One is that Brazil and India are essentially saying ``don't forget about us.'' Among the so-called BRICs economies, the potential of Brazil and India are often no match for China's rapid growth and Russia's oil and massive nuclear arsenal. 

China in particular continues to get much of the world's attention and a disproportionate amount of its investment. And yet, many of the biggest challenges -- including climate change, sustainable economic development, poverty reduction and finding cleaner energy sources -- will require significant Indian and Brazilian input. 

*Diversification* 

It's also a reminder that hitching your future to one economy can be dangerous. If growth in China slowed sharply, many economies in Latin America and Asia would be in big trouble. For proof, look no further than Peru, where on May 30 stocks fell the most in 17 years on concern that China's demand for commodities may slow. 

Diversifying your key trading partners is never a bad thing. And clearly, China may not like it. Yet considering the risks China faces -- economic overheating, stock bubbles and rampant pollution -- Lula is doing the right thing for Brazil in looking to India.


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## Bushroda

*IMG to develop signature golf courses in India*
Livemint.com, Wallstreet Journal

*IMG now joins a short list of companies cashing in on the golf boom*

Anik Basu New Delhi

International Management Group (IMG), long associated with cricket, tennis and fashion shows here, senses serious greenbacks in the greensas in designing and developing golf courses around Indian real estate projects.

The US firm has lined up an ace up its sleeveFijian golfer Vijay Singh, who IMG represents, and who will be involved in planning the courses that will cost around $8 million (about Rs32 crore) each to develop.

The ethnicity factor is certainly there, admits Mark Adams, IMG senior vice-president and director of its golf services in Asia, visiting India for the third time in recent months. We definitely see a couple of Vijay Singh opportunities. Singhs grandfather migrated from India to Fiji.

IMGs entry into a segment dominated by individual Indian golf course designers, such as Ranjit Nanda or the occasional imports from abroad such as pro-turned-entrepreneur Greg Norman, underscores the importance of the sport in a country driven by a booming economy and affluent families who sees golf as a lifestyle. 

IMG now joins a short list of companies cashing in on the golf boom. This month, consumer electronics company LG Electronics India Pvt. Ltd ended its decade-long association with cricket in favour of golf. Auto components leader Hero Motors Ltd says it will soon begin manufacturing golf carts. Sports gear major Puma Sports India Pvt. Ltd has unveiled a range of golf lifestyle apparel and accessories, endorsed by British golfer of Indian origin, Kiran Matharu. 

Real estate developers have realized theres money to be made from the sport. Premium gated communities are coming up around golf courses carrying signature names, such as Jaypee Greens, around a fairway once known as the Greg Norman Golf Course in Greater Noida, a suburb of the Capital. The apartments typically cost several crores each.

Earlier this year, the first-ever professional Indian Open for women was held at the DLF golf course in Gurgaon. 

People associated with golf in India say they are not surpised; they reckon the sport has witnessed a 35-40% growth over the last four years. Brandon de Souza, managing director of golf events management company Tiger Sports Marketing Pvt. Ltd, claims 150,000 people have taken up the sport since 2003, swelling the number of serious golfers to 400,000. 

Whereas once a handful of golf courses dotted the country, he says, today there are 190 across the country. Its an industry and Id say its worth between Rs30 crore and Rs50 crore, de Souza says. 

But the golf course designing and development proposed by IMG is new for India even though IMG says it has designed golf courses and provided management services in other markets. 
Recently, IMG Golf Course Management, a specialized division, was selected by the worlds top golfer Tiger Woods to manage the only course he designed: the Al Ruwaya golf course in Dubai. IMG has also developed 17 golf courses in China, is developing four more and managing another four. 

As it did in China, IMG plans to educate Indian clients that it can do more than just manage events but also design golf courses and the infrastructure around them. The IMG brandand the Vijay Singh signaturedefinitely open doors in India, Adams says, adding that real estate developers have shown interest. We hope to wrap up at least three projects in the next 60-90 days. 

IMG Indias managing director Balu Nayar says theres more sense in looking at realtors rather than plan stand-alone courses because of the real estate boom. Theres a lot of demand for golf and developers are looking at creating golf infrastructure in real estate projects... Its a new revenue source (for IMG), he says.

IMG already is aware of one area of concern: the environment. Golf courses strain water resources and use massive amounts of fertilizers and pesticides to maintain the turf. Critics of golf courses also allege they waste resources from land to water. 

Golf has no place in the development strategy for India, says Amit Srivastava, director of India Resource Center, an anti-globalization group. IMG says it would strive to work towards environment enhancement, rather than degradation. Nayar says as the company was focusing only on real estate projects, courses developed by it would have access to waste water from the residential properties around. Its this water well recycle, he said.


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## Bushroda

*Biotech industry exports grow 47% to touch US$ 1.2bn*
2007-06-14 18:19:45 Source : Moneycontrol.com

The Indian Biotech industry, comprising 325 firms, has several reasons to celebrate its performance in the just concluded fiscal 2006-07. 

For one the Biotech exports grew 47% to post revenues Rs. 4,937 crore or US$1.2 Bn in export revenue. Secondly, the Top 3 Biotech company slots occupied by three firms of Indian origin, contributed nearly 27% of industry revenue of Rs. 8541 crore. Top 3 industry positions went to  Pune-based Serum Institute (Rs. 951 crore), Bangalore-headquartered Biocon (Rs. 823 crore) and New Delhi-based Panacea Biotec (Rs. 600 crore)--contribute 27 pc of the industry revenue. 

For the second year in running, Serum Institute has improved its lead over No 2 player, Biocon to Rs.128 crore compared to Rs. 15 crore last year. The 40-year old Serum Institute, set up by Dr Cyrus S Poonawalla, is the largest vaccines maker in India and second largest Paediatric vaccines maker in the world. Sold in over 150 countries, Serum's vaccine shot is the first for every second child born in the world. The company has capacity to produce 100 million doses of the human influenza vaccine and other key vaccines like hepatitis B and DTP. 

These findings will be released in the 5th industry survey conducted by CyberMedia Group's specialty BioSpectrum magazine in its forthcoming issue. BioSpectrum and Association of Biotechnology Led Enterprises (ABLE) initiated this annual exercise to map the contours of the biotech industry and to identify indomitable winners in 2003. 

According to Mr. Pradeep Gupta, Chairman and Managing Director of CyberMedia, publishers of BioSpectrum, "The Biotech industry is now truly global with two-thirds of the revenue coming from exports. The Rs. 8541 crore industry (FY 05-06 Rs. 6521 crore) has emerged among the stars of the knowledge economy by inventing and launching several breakthrough products."


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## Bushroda

*New Delhi to host first European Tour golf tournament in India in 2008*
PRInside, Austria
© AP 2007-06-11 

DUBAI, United Arab Emirates (AP) - India will host a European Tour golf tournament for the first time next year.

The US$2.5 million Indian Masters will be played in New Delhi from Feb. 7-10, promoters and organizers announced Monday.

The tournament will be sanctioned by the European Tour and the Indian Golf Union.

"Golf is fast becoming extremely popular in India," said Mohamed Juma Buamain, chief executive of Golf in Dubai, the promoter of the event.

The news was welcomed by Jeev Milkha Singh, the highest ranked Indian golfer at No. 58 in the world.

"This is just fantastic news for Indian golf," he said. "I think it is also an acknowledgment of the superb results posted by Indian golfers across the globe. A tournament of this stature is sure to catalyze exponential growth of the game back home."

India has traditionally hosted Asian PGA Tour events. With India's booming economy, several new golf courses are in the pipeline.

"The growth of the Indian economy has coincided with the emergence of golf as a major sport in the country," European Tour chief executive George O'Grady said. "We are always keen to expand our tournament portfolio into new territories and we believe that the Indian Masters offers huge potential on that front."


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## Bushroda

*IA trumps Jet in May as leading airline*
P R Sanjai / Mumbai June 14, 2007 

State-owned carrier Indian Airlines has squeezed past rival Jet Airways to emerge as the largest airline in terms of market share in the country in May. The airline has cornered 23 per cent market share against 22.5 per cent recorded by the private Jet Airways (excluding Air Sahara). 

Indian Airlines, which had been the second largest airline in terms of market share, had lost even this position to budget carrier Air Deccan in July 2006. 

Later in April 2007, Indian Airlines jumped to the number two slot thanks to an aggressive marketing initiative, coupled with the crashing of Air Deccans reservation system for a few days. 

The market share of Indian Airlines in April was at 22 per cent, while that of Jet Airways was at 22.3 per cent. Air Sahara, rechristened JetLite after being acquired by Jet Airways, has maintained a market share of 6.8 per cent in May against 7.1 per cent. 

The Vijay Mallya-promoted Kingfisher Airlines, which has recently picked up 26 per cent stake in Air Deccan, has improved its position to 12.2 per cent in May against 10.9 per cent in April. 

The aggressive marketing initiatives by Indian Airlines and the emergence of Kingfisher Airlines as a potential competitor to Jet Airways in services have helped the national carrier to grab the top slot, industry analysts pointed out. 

Commenting on the market share, Indian Airlines officials said the carrier was always the number one in the domestic circuit, in terms of revenue per kilometers per day. 

Jet executives said the latest data was not available and added that it was irrelevant to consider the standalone market share of Jet Airways, excluding JetLite, as the latter was very much a part of Jet. Indian Airlines has been dropping fares to garner market share. The spot fares of Indian Airlines is cheaper than low-fare carriers. 

The carrier was offering tickets at throw-away prices on the premium economy fares, surf and save schemes and other similar schemes, said a senior executive of a leading low-cost carrier. 

According to highly placed sources, SpiceJet garnered 8.2 per cent market share (8.3 per cent in April), Air Deccan 18 per cent (18.3 per cent), and IndiGo 6.9 per cent (6.3 per cent) in May.


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## Bushroda

*Islamic investors turn to India*
By Indrajit Basu 
Asia Times Online

KOLKATA - The relentless rise of the price of oil over the past two years has hardly been good news for India's stock markets and economy. While high oil prices gave the country's stock investors many sleepless nights, its impact on the economy was greater, including a spike in inflation rates and higher costs across industries. 

Lately, however, there seems to be at least one upside emerging from the oil-price rallies. A part of the immense wealth that the Islamic - primarily Persian Gulf - countries generated from the years of escalating oil prices is trickling into India's stock markets and other investment avenues, such as the property and commodities markets, for the first time. 

Of course, direct or indirect investments from Islamic countries are not new to India. Every year, India sees inflows of billions of dollars in its stock and real-estate markets, and even industries, but until recently, much of it came from the huge population of non-resident Indians working is such regions as the Persian Gulf. Islamic investors hardly invested any money in India. 

Now, however, say industry sources, India (along with China), which has been ignored for so long, has begun to feature prominently on the radar screens of Islamic investors as they look to expand beyond their traditional markets - mainly the United States and Britain - and explore emerging investment destinations. 

"Over the last year or so, there has been a marked increase in investment inflows from Islamic countries," said Anand Tandon, founder and managing director of Gryffon Investment Advisors, a Mumbai-based firm that is trying to promote Islamic investments in the country. "And although it is hard to put a number to the amount of investments that have come in lately, anecdotal evidence indicates that the interest of the Islamic investors for investing in India is significant." 

Indeed, thanks to almost five years of high oil prices, the coffers of the Gulf countries are overflowing. Although those countries do not provide much information about their outward investments and wealth, according to the estimates of the Washington, DC-based Institute of International Finance, a global bankers' group, the total export earnings of the member countries of the Gulf Cooperation Council (GCC - Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates) during 2002-06 exceeded US$1.5 trillion, which is more than double those in the previous five-year period. About $1 trillion went toward imports. The remainder of the earnings - some $542 billion - represented surplus funds that entered global capital markets and contributed to an increase in the GCC's foreign-asset holdings. 

Again, no firm numbers are available on how much of that booty went where, but the Institute of International Finance estimates that of the accumulated surplus of $542 billion, about $300 billion must have gone to the US, $100 billion to Europe, $60 billion to the Middle East and another $60 billion to Asia, while $22 billion was invested in other locations. 

But the India story may not be all about numbers. "The point is," said Talah Sareshwala, "after investing in Islamic countries in Asia like Malaysia, Indonesia and Pakistan, Islamic investors are turning to India because they realize that India may be the best option for them now." Sareshwala is the co-founder of Parsoli Corp, an Indian stock-brokerage firm that adheres to Islamic investment laws and has also created the country's first Islamic equity stock index, the Parsoli Islamic Equity Index. 

To understand why India is emerging as the best option, it is important to understand the principles or rules that govern investments of the Islamic community in general. One of the biggest drawbacks of Islamic investments is that the principles (sharia) laid out by the Koran do not allow the division or separation of profit from risk in any of a person's commercial dealings. 

Muslims who follow sharia investment principles therefore cannot invest in ventures that earn from giving or taking interest, and as an extension of sharia, neither can they invest in ventures that are involved in activities that the Koran identifies as unethical, such as tobacco, fashion, pornography, alcohol, hotels and entertainment. 

"To a large extent, therefore, the investment options of the sharia investors are limited compared [with] the options available to non-Islamic investors," said Dr Shariq Nisar, an expert on Islamic finance. 

Against this background, India's biggest attraction for them is that it offers investment opportunities in a wide variety of sectors. Take the stock markets for instance. A study undertaken by Gryffon Investment Advisors on the compliance of stocks of the Bombay Stock Exchange (BSE 500) reveals that the market capitalization of sharia-complaint stocks is more than 58% of the total market capitalization. 

And according to a study conducted by Idafa Investment, the other Indian stock brokerage that adheres to Islamic investment law, there are more than 840 sharia-compliant stocks in the indices of the Bombay (BSE Index) and National (NSE Index) stock exchanges. 

"That is higher than the sharia-compliant listed stocks in countries like Malaysia, Pakistan, Indonesia and the GCC countries put together," said Sareshwala. "Moreover, it is also a fact that over the past three years the returns on investments like stocks and real estate in India have also been higher than [in] most other Asian economies." 

The shift in the center of gravity for Islamic investments is actually not a recent phenomenon. According to Nisar, investors started slowly moving away from established and wealthy economies like Europe and North America as far back as just after the September 11, 2001, terrorist attacks on the US. 

After those attacks "and the restrictions imposed on money flows from Muslim states, Islamic investors realized back then that they must look elsewhere and reduce their dependence on developed markets. which have been their favorite destinations for decades", Nisar said. 

Consequently, China and India in particular, with their red-hot economies, have emerged as ideal alternatives. The fact that Gulf investors are now increasingly looking at China as well is evident from the fact that in the recent $19 billion initial public offering made by the Industrial and Commercial Bank of China - the largest ever - Middle Eastern investors picked up as much as $2.5 billion worth of shares. Besides, reports suggest that GCC investors in recent times have also poured $1 billion in China's property markets and infrastructure sector. 

However, Nisar said that while China, riding high on its manufacturing capacity, has recorded tremendous economic growth recently, it is still viewed with suspicion by Islamic Investors, mainly because of its political ideology and economic structure. On the other hand, India, the world's largest democracy, offers some very clear advantages. 

"With a population of over 1.3 billion, huge human and natural resources, and with costs that are at the very low end of the global average, India represents economic opportunities on a scale almost equivalent to China," Nisar said. "But its legal framework, which protects foreign investments, is one of the best in the region, and that's where India scores higher over many Asian countries." 

Nevertheless, entry to India is not always easy. According to Ashraf Abdul-Haq Mohamedy of Idafa Investments, while China welcomes Islamic investors with open arms, India still treats money from Islamic countries with suspicion. 

"For instance, any money from the United Arab Emirates and Mauritius is scrutinized microscopically and seen as terrorist funds," said Mohamedy, "which is why you will find Islamic investments these days are mostly taking other routes, like the Singapore or the United Kingdom route, or are coming in through joint ventures with local partners." 

That may be another reason Islamic investment inflow numbers are hard to track - most so far have been in the country's real-estate sector, which is largely unorganized, or in sharia-complaint industrial ventures via local partners. 

However, that's changing. According to Nisar, over the past few months Islamic investment of close to $750 million in the stock markets and infrastructure sector have been announced. During the same period last year, India saw just $50 million of Islamic investments in its capital markets. "The recent announcements, therefore, may be a precursor to the billions that may be waiting to get in," he said. 

The trend is clear, said Amrit Pandurangi, director of global audit firm PricewaterhouseCoopers, in a comment to India's Economic Times. "Everybody is looking at India as a good place to invest."


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## Bushroda

*London Gets Influx of Indian Tourists as Japanese Stay Home* 
By Nick Allen

June 14 (Bloomberg) -- Visitors from India are spending more in London than the Japanese for the first time, highlighting the strength of India's economy and the changing nature of tourism in the U.K. capital. 

Indians spent 139 million pounds ($273 million) last year, up from 107 million pounds the previous year and 78 million pounds in 2003, according to the latest figures from Visit London, which promotes the city to tourists. The number of Indian tourists rose from 130,000 in 2003 to 212,000 last year. 

``It's all about how deep is your pocket,'' said Rajesh Saxana, 49, a government official from New Delhi as he watched the changing of the guard outside Buckingham Palace. ``I always dreamed in my childhood that I would come to London one day. Now India has more economic power and prosperity and we can do it.'' 

India, Asia's fourth largest economy, is growing at the second-fastest pace after China among the world's major economies. The $854 billion Indian economy will grow 8.5 percent in the 12 months ending March 31, according to the Reserve Bank of India. It averaged 8.6 percent growth in the previous four years. The $12 billion real estate industry is growing at 30 percent a year. 

Salaries may grow an average 14.5 percent this year, Hewitt Associates Inc., a human resources consultant, said in March, enriching the country's middle class which numbers about 300 million people. 

``Those who were middle class are becoming upper middle class,'' said Lakshmi Prattipati, an Indian tourist in Parliament Square. ``They have money and they want to travel to see places all over the world.'' 

The rise in Indian tourism coincides with a decline in Japanese visitors to London. There were 434,000 in 2000 and last year only 230,000 visited, spending 123 million pounds. 

Developing Countries 

``It's illustrative of the way the mix of people coming into London is changing with an influx from nations who are finding their economic feet and their travel bug,'' said Ken Kelling, a spokesman for Visit London. ``We see the number of visitors from India growing quite fast over the next few years.'' 

London faces competition from countries including the U.S., Australia and South Africa to harness the growing number of Indians traveling abroad, Kelling said. He believes most will favor the U.K. because of historical links between the two countries. India gained independence from British rule in 1947. 

``Bollywood is also a big draw because the films have used lots of locations here,'' Kelling said, referring to the Indian film industry. ``We've just produced a Bollywood map of London so people can go and see them.'' 

London Convention 

London is also bidding to host the 2008 annual convention of the Travel Agents Association of India, which would be the first time it has been held in Europe. About 90 percent of bookings in India are made through travel agents who together represent hundreds of millions of potential tourists. 

``If we succeed we could expect to see tourism from India grow by up to 30 percent in the years following,'' said Martine Ainsworth-Wells, of Visit London. 

At London's famous Madame Tussauds waxwork museum sculptors have just given pride of place in the entrance hall to a new figure of Bollywood actor Shah Rukh Khan. Tourists queue to have their picture taken with him, mostly ignoring a waxwork of pop star Madonna nearby. 

Outside the Houses of Parliament tourist Y.G. Bhave said he was more interested in India's shared history with Britain. 

``It gives a special kind of pleasure to visit the country of India's erstwhile masters, not as their slaves but as their equals,'' he said. ``They can no longer pass laws over us.''


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## Bushroda

*Best Western And Cabana Hotels Announce India Expansion Plan*
Hotel Interactive, Inc., NY
6/14/2007 12:39:30 PM

The worlds largest hotel chain, Best Western International, Inc., today announced its aggressive development plan for India under the leadership of master licensee Cabana Hotel Management Pvt. Ltd. Over the next 10 years, the companies intend to add more than 100 hotels and 10,000 rooms to the burgeoning Indian hospitality market. 

Through the partnership, Cabana Hotels will represent the Best Western brand in India, provide hotel management services and establish an advanced hotel management institute in Bhubaneshwar. Designed as the first of its kind in this country, the school broke ground yesterday and will bring world-class hotel management standards to India by providing in-depth training programs for employees working in new Best Western properties. 

Cabana Hotels is planning a major investment of more than $1.2 billion in Best Western-branded hotels during the next decade, and building or converting hotels at 3.5- and 4-star levels or above in markets including Mumbai, Delhi, Bangalore, Bhubaneshwar, Ooty, Rameshwaram, Bhubaneshwar, Hyderabad Kanyakumari and Jaisalmer. 

India's booming economy and growing travel market make the country an excellent strategic fit as Best Western furthers its global reach, said David Kong, president and CEO of U.S.-based Best Western International. With more than 30 years of hospitality and management experience in North America and India, Cabana Hotels is a respected and proven leader within the industry, and a well-suited partner. The companys co-chairman and co-founder, B.B. Patel, owns and operates eight Best Western-branded properties in California, bringing a thorough knowledge and understanding of the brand to our development efforts. 

Best Westerns India expansion is consistent with its overall growth strategy for increasing brand awareness and preference in new markets by building high-caliber hotels that receive Best Westerns Premier® descriptor. Designed to identify properties offering a discriminating level of service and amenities that meet the needs of sophisticated business and leisure travelers, the Premier model has been operating successfully in Europe and China for the last several years. 

Best Westerns global footprint and worldwide reservations system make it a strong partner for international hotel developers, said Dr. Prabhu Goel, a co-founder and co-chairman at Cabana Hotels and leading private venture investor who serves on boards of directors for public and private companies in the United States and India. Cabana will leverage this strength to become the leading provider of high-quality hotel accommodations in India, with a focus on achieving excellence and building relationships with existing and potential clients. 

In addition to Patel and Goel, Cabana Hotels directors include Sushant Patnaik, a successful entrepreneur with holdings in both India and the United States. Cabana Hotels CEO Anil Wad brings more than 25 years of hospitality management experience to the leadership team.


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## Bushroda

*Cool It, But Let's Grow*
15 Jun, 2007 l 0152 hrs IST

The Reserve Bank of India (RBI), which has been cracking down on inflation, may be somewhat disturbed by the latest data released by the Central Statistical Organisation. According to the figures, India's industrial production has witnessed the highest growth in a decade of 13.6 per cent in April 2007 compared to 9.9 per cent in April 2006, outdoing all expectations, including perhaps the RBI's. It is surprising how such growth has been achieved despite tighter credit and rising interest rates. The apparent drivers seem to be the rise in investment in many sectors and an increased demand for consumer non-durables. 

Production of consumer non-durables has grown by a healthy 21.9 per cent in April 2007, compared to just 9.4 per cent in April 2006, that too at a time when inflation in these products has been high. Perhaps this is because salaries in India are rising as well. Salaries are expected to grow the fastest in India among all Asian countries, at the rate of 14.5 per cent this year. 

Manufacturing too saw a phenomenal 15.1 per cent growth owing to increased capacities being created in steel, automobile, cement, petrochemicals and plastics among others. The tightening of monetary policy has not hit big manufacturers as they can easily avail cheap international credit. Moreover, the rising rupee has made the import of capital goods cheaper. 

What is disturbing is that some sectors, like automobiles and consumer durables, are beginning to slow down. The growth in production of consumer durables fell to 5.3 per cent against 7.4 per cent last year. Although this might be good news to central bankers who want to curtail inflation, it can impede India's growth trajectory. Already, there are clear signs that small and medium enterprises have been hit by tighter interest rates. 

Small and medium enterprises account for nearly 50 per cent of India's industrial output, and contribute almost 35 per cent of exports. And exporters in general have seen an 8 per cent fall in realisations due to the rupee appreciation last year. Any adverse impact on this sector can have long-term implications on the country's economic health in general. 

Overheating of the economy has been a major worry for the government. Inflation in India, in real terms, has been much higher than that in China. However, now that the inflation rate has fallen below the RBI's target for the first time in nine months, the authorities might reconsider the tight monetary policy that they have adopted. 

A balance must be struck between controlling inflation and allowing healthy economic growth.


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## Bushroda

*Distributors see India as a growth driver*
By James Carbone 
Purchasing 
June 14, 2007 

While India's electronics industry is still in its infancy, some distributors see the country as the next hotbed for electronics distribution because India's OEMs have a history of using distributors rather than buying direct.

"In the late 1990s and in 2000, most semiconductors sold in India went through distributors," says Kamath Suresh, general sales manager for Avnet Electronics Marketing Asia. "Suppliers did not have a presence in India and did not see business growing there. There was no concept of direct customers. Everything was through distribution," he says.

Over the last three years that has changed a bit and some semiconductor and component manufacturers have started to set up offices in India. Still only about 510% of the component business has shifted from distribution to component manufacturers, according to Suresh.

With major OEMs and electronics manufacturing services providers increasing their presence in India, distributors doing business there can expect strong revenue growth. Roy Vallee, CEO of Avnet, says Avnet is seeing very high growth rates coming out of India. Avnet's business is coming from indigenous OEMs which build white goods and from EMS companies that are starting to set up shop in India.

"It will be a while before India is the size of China, but we are established in India and I am encouraged by our prospects," says Vallee. "We are well positioned there."

In addition to white goods, equipment such as set top boxes, cell phones and some telecommunications base stations are being built there, he says.

"India is the region to watch," says Michael Long, president of Arrow Global Components. "We are investing and we will build infrastructure as the market grows. We will be there to support the manufacturers that build in India."


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## Bushroda

*&#8242;India, China are real growth markets for world economy&#8242;*
FreshPlaza, Netherlands

Global head honchos of Ernst and Young are bullish on India's success story. Global Chairman & CEO, Ernst & Young, Jim Turley and COO, Ernst & Young, John F Ferraro spoke about this on the sidelines of the Ernst & Young World Entrepreneur award ceremony in Monte Carlo.

Excerpts from an interview given to CNBC-TV18:

*India story has been looking robust and stronger, you have been a frequent visitor to India but at this point in time, there are some concerns like the rupee is appreciating, interest rates are high and inflation is at about 6%, how strong is India story looking to you?*

*Turley:* I still think its looking very strong, you saw great growth last quarter and the things like strong rupee, some concerns about inflation are really a result of great strong success and so, while there are always things to be concerned about, I think the positives far outweigh the concerns.

*You have been monitoring property prices in India?*

*Turley:* The property prices have been going up dramatically, more in some sectors and geographies than others but I still think that is not holding back the economy. The strength, the entrepreneurship, the focus of the business community is very much on the positives and so it's a positive story still.

*We were talking about the internal situation in India, but what about the external triggers and the external factors because everybody is worried about the Chinese economy and what's going to happen to it and the Chinese stock markets, your thoughts on that?*

*Ferraro:* If one looks at the long-term, then China and India are real growth markets for the world economy and if you look at the India particularly, and you look at the private equity firms, they are now all setting up house in India. You look at the Indian companies that are investing outside of India, we just see robust opportunities in the future for both parts of the world.

*What about the US economy and the concerns on the sub-prime market, have those concerns eased for the moment?*

*Turley:* I think when you look around the world, corporate profits are in good shape, there are some concerns about valuations, like China being one but when one looks at the fundamentals, the profitability of companies and the level of innovation coming, I still think we are in for some good positive future.

*At this point, there are some concerns because of the US presidential elections, the outsourcing outcry gaining momentum, also concerns on what's going to happen with H1-B visas, how much of an issue is that likely to be?*

*Turley:* Every time there are presidential elections in the United States, there are is an element of the political environment - the talks about job placement and outsourcing of jobs. I think this cycle will be no different.

In many ways, whenever I am in India and speaking about this with business leaders, they say that more the discussion happens in United States, the better it is for India because inevitably the story that is being told in the US is about the relative cost advantages in India, the relative talent advantage in India and so at the end of the day, it is actually benefiting India.

*There is debate currently in India what companies should do with their annual shareholder reports, what are your thoughts on this and what is the global trend that you are seeing at this point?*

*Ferraro:* That is not a big debate unique only to India; it is all around the world and we have to work stronger on clearer, more transparent and more useful annual reports and in terms of it being a trend yet, I won't say it is a trend yet in terms of taking the dialogue into action.

*Turley:* I think it's going to be something that is going to be studied by a lot of different people from a lot of different perspectives, not just the companies but also the investor groups, the regulators, firms like ours, etc.

It's really about great minds together thinking about what the future financial reporting should be because it has to be relevant and reliable and demonstrably what is there today may have been the right thing for a time that was less global, for a time where there was less technology and for a time less complex than today. I think you are going to see continuing dialogue and probably some experimentation towards reform.

*And also some experimentation with quarter to quarter results and financial reporting that happens every quarter?*

*Turley:* Not everybody around the world is on a quarterly reporting system. So, you are going to see some who have not been quarterly, move to quarterly. The technology is available if companies and regulators could arrange to report even more frequently.

I think getting the balance right between what the investors want, what information they need and how timely they need it, is going to be the real discussion taking place.


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## Bushroda

*Rs 500 cr for Mumbai Metro* 
15 Jun, 2007 l 0052 hrs ISTl
Mahendra Kumar Singh/TIMES NEWS NETWORK

NEW DELHI: Urban development ministry has decided to provide viability gap funding of around Rs 500 crore for the first corridor of the Anil Ambani group-led Mumbai Metro rail project of Rs 2,356 crore. This will be the first Metro project in country to be executed under public-private partnership. 

The project hit a stumbling block after finance ministry refused to pay 20% of the cost through viability gap funding (VGF) on the ground that the consortium led by Anil Ambani groups Reliance Energy had applied for VGF after completing the bidding process. 

Viability gap funding means a one-time or deferred grant for infrastructure projects that may have long gestation periods and limited financial returns, so that their viability may be improved through government support. 

Urban development secretary M Ramachandran said, "The ministry has given in-principle approval to provide funds through VGF for the project. The proposal will soon be sent to Expenditure Finance Committee and then to the Cabinet Committee on Economic Affairs for final approval."


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## Bushroda

*Mumbai Metro to be first green metropolis*
Rajshri Mehta 
Thursday, June 14, 2007 10:29 IST

Though not mandatory for an MRTS project, the Mumbai Metro One will invest in a detailed study to understand the impact of the project.

Mumbai Metro One is geared with a vision is to make the citys first metro a Green Metro. To see that the project develops as per the best environment-friendly global practices, the company formed jointly by Anil Ambani-owned Reliance Energy and the Mumbai Metropolitan Region Development Authority (MMRDA) has recently undertaken many initiatives.

Though not mandatory for an mass rapid transport system (MRTS) project, the company has decided to invest in a detailed environmental study to understand the impact of the project during construction and in operational stages, and to adopt measures to make it an environment-friendly metro. The company has hired an experienced and specialist agency to undertake this study.

As a part of this study, certain environmental parameters like air quality, water quality and noise levels will be monitored and captured at certain key locations like Sarvoday Hospital along the corridor, said K P Maheshwari, director, Mumbai Metro One Private Limited.

While finalising the design and specifications, construction methodology and construction equipment adequate measures and precautions would be taken to mitigate and minimize the impact on the environment during construction and operation.

The company is also preparing an environment management plan, which will be embedded in the project itself in order to assess environmental benefits of the project due to reduced vehicular emissions on the route and reduction in the traffic noise levels, Maheshwari added.

This study is being done based on the guidelines followed by international agencies like the World Bank and other international associations of financial institutions and bodies. This activity was started in May 2007 and will continue till September-end.


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## Bushroda

*Diversity key to well-managed Indian economy*
DALE JACKSON 
Globe and Mail, Canada
June 15, 2007

Can India maintain momentum? 

There are two words Jayesh Gandhi wants Canadian investors to remember when they think of India: sustainable growth. Those are the words the fund manager from Mumbai-based Birla Sun Life Asset Management uses when addressing concerns that his country's booming economy is growing too quickly.

"We hope to see India continuing its strong earnings growth and economic growth for the next 10 years," he says.

Mr. Gandhi is travelling across the country to promote his Excel India Fund - one of the best performing mutual funds and the only pure-play Indian equity fund in Canada. Over the past five years Excel India has consistently returned well over 30 per cent annually while the average emerging market equity fund has been pulling in an average 20 per cent a year. Even the benchmark MSCI emerging market index has managed to post a still impressive gain of 18.7 per cent each year. 

Since the beginning of this year the Bombay Stock Exchange's 30-member Sensex Index has risen 50 per cent to surpass $1-trillion (U.S.). Economic growth in India has averaged 8.6 per cent annually over the past four years, helping to spur earnings growth as high as 35 per cent. The rupee is currently the best performing currency in Asia. 

Mr. Gandhi says there's no reason to believe the good fortune will not continue because India's growth is diversified. His $277-million (Canadian) Excel India portfolio reflects that diversification with a mix of infrastructure, industrial and consumer stocks. 

Key holdings in the fund also reflect Corporate India's expansion to the global stage. The country's largest private sector bank, ICICI, accounts for nearly 5 per cent of holdings.

Other large positions include Tata Steel, which has been reported to be a serious contender to acquire Stelco Inc. He says Tata has maintained a low cost structure while boosting quality to the global standard. Other members of the giant Tata Group include Tata Motors Ltd. and Tata Consultancy Services. 

One infrastructure play in the fund is Bharat Heavy Electricals Ltd., which designs and builds power plants.

The fund, which has a management expense ratio of 3.4 per cent, also includes a large weighting in India's growing technology sector, including the country's second largest software manufacturer, Infosys Technologies Ltd. 

There are, however, signs the fund may have hit a rut. So far this year Excel India has returned less than 2 per cent. Much of the fund's decline occurred earlier this month when fears of rising global interest rates caused steep selloffs on emerging markets, including India. Mr. Gandhi says he's not concerned because the fundamentals of the Indian market remain strong. "After a spectacular four years, six months is not a time frame one should look at," he says. "India's a much longer-term sustainable story." 

Mr. Gandhi isn't alone in his optimism. TD Economics has upgraded its forecast for gross domestic product growth in India by half a percentage point a year to at least 8 per cent. "I think India's growth is sustainable because it's balanced," says international economist Richard Kelly. 

That balance includes equally vibrant consumer and industrial bases combined with a cooling effect from a series of interest rate hikes by India's central bank. "Interest rates are starting to get in that biting range," says Mr. Kelly.

To make his point he contrasts India with a closely linked emerging market - China. Much of China's growth is in the industrial sector while an increasingly affluent Indian middle-class has been creating demand for consumer goods and fuelling a robust financial services industry. Average annual wage increases over the past five years in India have been as high as 15 per cent.

As a result India is the only emerging market economy running a current account deficit. That means India imports more goods and services than it exports. "You have to have a domestic consumer base to have a balanced economy," he says.

Mr. Kelly also credits India's central bank with taking the necessary measures to regulate growth and encourage diversification. "The economic management of India is doing much better than China," he says.

While he describes his view of India as "extremely optimistic," Mr. Kelly says like China, runaway inflation is the biggest concern in India. He says the first red flag will wave when inflation continues to climb after the central bank raises the benchmark interest rate.


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## Bushroda

*'Overheating abating, power still a concern' *
Asit Ranjan Mishra & Siddharth Zarabi / New Delhi June 15, 2007 

Days after he first warned about signs of cyclical overheating in the Indian economy, C Rangarajan, chairman of the Prime Ministers Economic Advisory Council, today told Business Standard that previous signs of overheating which were visible through a rise in the wholesale price index-based inflation and merchandise trade deficit are abating. 

The council has also estimated that the current account deficit for 2006-07 is 1 per cent of GDP, down from 1.1 per cent of GDP in 2005-06. 

To some extent there has been an abatement of overheating. What has been happening now is that the growth has been driven not only by consumption demand but also by investment. With new investments being made and new production coming out, cyclical overheating is abating, Rangarajan said. 

The investment ratio as a proportion of GDP for 2006-07 has been estimated at 35.2 per cent, while the savings rate is pegged at 33.8 per cent, with both ratios being nearly 1.4 percentage points higher each than in 2005-06. 

If growth is only driven by consumption demand, then when full capacity is reached, it leads to further overheating. But in case of India, a greater part of growth is now being driven by investment. Initially, it may create a situation in which the prices will rise, but subsequently as the capacity is being created, it will have an impact on inflation and overheating, Rangarajan said. 

When an economy operates at full capacity, a situation develops where the prices tend to rise. Overheating is a phenomenon where demand is striking hard on the available supply. This shows up in two ways  in an increase in the prices and the balance of payments. When overall demand exceeds supply, then it spills into the balance of payment, Rangarajan added. 

This is what we saw last year when prices rose faster than what we considered to be acceptable or desirable. The overall balance of payments continues to remain comfortable. In fact, our recent calculations indicate that the current account deficit for the last year is 1 per cent of GDP. But the merchandise trade deficit, that is import and export of goods alone, constitutes 7 per cent of GDP. However, the remittances and service exports were high enough to keep the overall current account deficit under 1 per cent of GDP, Rangarajan added. 

However, the chairman of the PMs Economic Advisory Council cautioned that cyclical overheating should not be allowed to turn into structural overheating. 

The point I want to make is that a structural imbalance should not develop in the economy. In many sectors of the economy the investment may be adequate to create additional capacity, one area where probably it is not happening is infrastructure, more particularly in the case of power. That is where the structural imbalance comes in. If this structural imbalance is not taken care of then this overheating may continue. So one area which needs more focus is infrastructure in general and power in particular, Rangarajan observed. 

He added that many power projects where work was under process would come into effect in the third year (2009-10) of the Eleventh Plan period.


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## Bushroda

*Economy of thought meets economy of words* 

*Chidambaram in Mumbai today, to read from and sign copies of A View from the Outside: Why Good Economics Works for Everyone* 

Alaka Sahani 

Mumbai, June 14: When Palaniappan Chidambaram launched the compilation of his columns in The Indian Express and The Financial Express, A View from the Outside: Why Good Economics Works for Everyone, in January, the Capitals whos who trooped in at Prime Minister Manmohan Singhs residence to be partake. The ensuing discussion on the very popular finance ministers sharp and insightful writing was a lure by itself. 

Tomorrow, the countrys finance capital is set for an encore as Chidambaram reads from his book and signs copies at Crossword, Kemps Corner, at 4.45 pm. The event is part of Book Series, an initiative by The Express Group to launch books authored by eminent columnists of The Indian Express and The Financial Express. 

The book, published by Penguin Portfolio, is a collection of columns that assess the promises and performances of the NDA government from 2002 to 2004. The columns reflect the views of Chidambaram, who has served as finance minister between 1996 and 1998, and again from 2004 till present day, on a range of issues that remain important regardless of the government in power. 

They cover subjects such as agriculture, foreign investment, monetary policy, budgets, taxation and international relations. Every column bears a date and that date also sets the context, Chidambaram says in the books introduction. 

The columns arent mere reactions of the Harvard graduate to the zeitgeist; they give readers an extraordinarily 

clear understanding of the problems underlying the countrys economy and its politics, and ways of solving them. Though Chidambaram admits he leaned towards topics that had some connection with the economy, he touched upon other subjects too. 

I have written about children, the Millennium Development Goals, terrorism and our neighbours, he adds. 

Given its content, small wonder the books launch in New Delhi witnessed two rounds of intense discussions. Economists Isher Judge Ahluwalia, Raghuram G Rajan and Jagdish N Bhagwati were the panelists for the first round. The second one had Arun Jaitley, Union Minister Kapil Sibal and Airtel head Sunil Mittal. This also held the attention of Rahul Gandhi and vice-chairman of Planning Commission Montek Singh Ahluwalia. 

Shekhar Gupta, Editor-in-chief of The Express Group, calls the book a must-read for those interested in the Indian economy, politics and governance. Chidambaram, known for ascetic minimalism in personal life, is equally austere with words, feels Gupta, who will be present at the book reading and signing session. Columnists Shobhaa De and K V Kamath will speak on the occasion.


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## Bushroda

*Industrial data raise hopes in India*
*Output rose 11.5% in the last fiscal year, hinting economic vitality is spreading beyond tech.*
By Henry Chu, Times Staff Writer
June 15, 2007 

NEW DELHI  Old-fashioned industry in India grew 11.5% in the last fiscal year, boosting hopes of broader-based economic growth in a country that has seen rapid expansion of high-tech and back-office services.

Figures released by the Indian government this week showed a rise in productivity in traditional sectors such as manufacturing, mining and electricity, which contributed to the nation's overall annual growth rate of 9%, one of the world's highest.

The 11.5% increase in industrial output was recorded from April 2006 through March 2007, according to the Indian Ministry of Statistics. Preliminary indications point to the trend continuing: In April of this year, industrial output was up 13.6% compared to the same month last year. 

India's GDP now stands at about $1 trillion, according to an April report by Credit Suisse, about one-fourteenth that of the United States.

The robust industrial growth is welcome news for Prime Minister Manmohan Singh, whose government has put a premium on spreading more widely the fruits of India's impressive, but uneven, economic boom.

Marquee sectors such as computer software and call centers have built a global profile and grown at a scorching pace, but they account for a relatively minuscule number of jobs. Information technology, for example, employs between 1 million and 2 million workers, well under 1% of a workforce of about 400 million people.

Critics have said that India is trying to vault from an agricultural to an information-based economy without passing through the traditional hoop of industrialization, a stage that usually creates opportunities for mass employment.

The new figures are fueling optimism in some quarters that the Indian economy is developing in a more well-rounded way. Although industry here still lags far behind that of China, where factories have sprouted all over the countryside, rising trade in items such as automobile parts, pharmaceuticals and textiles helped trigger a 12.5% expansion in Indian manufacturing during the last fiscal year. Some economists, however, cautioned against equating such growth with an automatic increase in jobs.

Some of the hike in industrial output is due to more mechanized production and greater efficiencies rather than a swelling of the labor pool. 

"India's track record in creating jobs is not that great," said analyst Paranjoy Guha Thakurta. "It's early  to say whether the growth is more broad-based and whether it's more inclusive."

Also, he said, some sectors, such as information technology services, could decelerate because of the rupee's strength against the dollar. The Indian currency has gained more than 7% on the dollar since the beginning of the year. 

The strong performance of industry has been accompanied by signs that inflation has slowed after pushing 7% earlier this year.

The government reported last week that the wholesale price index had dipped to a 10-month low of 4.85% at the end of May, below the psychological threshold of 5%, the target set by the Reserve Bank of India. Much of the drop was due to lower food prices, but the bank is not expected to roll back the interest-rate hikes it has adopted to curb inflation.

Earlier this year, soaring prices for food staples such as onions and lentils exacted a heavy financial toll on ordinary Indians, up to two-thirds of whom make less than $2 a day.

Analysts are closely watching the coming monsoon season, whose rains determine much of the country's farm output and, therefore, food prices.

The majority of India's 1 billion people still rely on agriculture for their livelihoods, but farming's share of the economy has plummeted by more than a third over the past 20 years.


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## Bushroda

*India will become 37th destination visited by The European Tour*
WorldGolf.com, AZ

India is set to become the 37th destination visited by The European Tour next year when the inaugural Indian Masters is played at a venue to be announced from February 7-10, 2008.

Promoted and organised by golf in DUBAI, and sanctioned by The European Tour and the Indian Golf Union, the $2.5 million event will be the richest event held in India and represents a new era for professional golf in the country which has produced European Tour champions in Jeev Milkha Singh and Arjun Atwal.

General JJ Singh, President of the Indian Golf Union, said: It is an historic moment for Indian Golf with a European Tour event being held in India boasting of the richest prize money in the history of Indian golf.

The event is a result of the growing status of the game of golf in India, augmented by the Indian performances across the golfing globe. Indian golf is surely to get a boost when the best talent from over seven continents will be on display and also will showcase the infrastructural development needed to host an event of this stature. I also take this opportunity to thank golf in DUBAI for making this happen.

Mohamed Juma Buamaim, Vice-Chairman and CEO of golf in DUBAI, said:

"Golf is fast becoming a big-time sport and the game is growing, no question. And this European Tour event, I am sure, will have the appeal and the profile to further enliven the Indian golf scene.

"Being the promoters and organisers of world-class events like the Dubai Desert Classic and the Dubai Ladies Masters, we are quite certain that the Indian Masters will create an unprecedented buzz on the vibrant Indian golfing scene.

"The tournament is part of golf in DUBAIs ambitious drive to expose the Emirate's rapidly-growing golfing portfolio of world-class courses on the global stage," added Buamaim.

"It is also one of our objectives to organise tournaments, locally or internationally, on behalf of our partners to try and promote Dubai as one of the leading golf destinations in the world," he said. "And this tournament is a reflection on our team efforts to achieve this common goal."

George OGrady, Chief Executive of The European Tour, said: The growth of the Indian economy has coincided with the emergence of golf as a major sport in the country. We are always keen to expand our tournament portfolio into new territories and we believe that the Indian Masters offers huge potential on that front.

Thanks to Indian pioneers such as Jeev Milkha Singh and Arjun Atwal  both popular Champions on The European Tour International Schedule  along with Jyoti Randhawa and Shiv Kapur, professional golf in India has taken a massive step forward over the past decade.

We are delighted to extend our close relationship with golf in DUBAI, who we know well through their tremendous organisation of the Dubai Desert Classic he added.

golf in DUBAI is backed by Dubal (Dubai Aluminium) as the main partner and National Bank of Dubai, Emaar, Jumeirah Hotels, Emirates airline, BMW, Jumeirah Golf Estates, Gulf News, Omega and CNN as partners in its drive to promote the city's golfing industry.


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## Bushroda

*India's Inflation Rate Slows to a Nine-Month Low* 
By Cherian Thomas

June 15 (Bloomberg) -- India's inflation slowed to a nine- month low as import duty cuts drove down prices of food grains. 

Wholesale prices rose 4.80 percent in the week ended June 2 from a year ago, slowing from 4.85 percent in the previous week, the Ministry of Commerce and Industry said in New Delhi today. The inflation rate, in line with the median forecast of 12 analysts, slowed for an eighth straight week. 

India, which revises its inflation data after a two-month lag, may revise today's preliminary number upward because consumer demand remains strong. The government's latest industrial output growth was faster than analysts' expectations, indicating the central bank may have to raise borrowing costs further to damp demand for manufactured products. 

``The final inflation data will be much higher,'' said N. R. Bhanumurthy, an economist at the Institute of Economic Growth in New Delhi. ``Inflation has slowed because of farm prices. Consumer demand for manufactured products remains strong as evidenced by the industrial production data.'' 

The government today raised its inflation estimate for the week ended April 7 to 6.44 percent from 6.09 percent, the statement said. That is the seventh straight upward revision. 

India's industrial production grew 13.6 percent in April, the government said on June 12. India's economy has averaged an 8.6 percent growth since 2003, the second-fastest after China among the major economies, causing demand for manufactured and farm goods to outstrip supply and stoking prices higher. 

*Manufactured Products *

For the week ended June 2, the inflation index of manufactured product prices rose 0.2 percent, today's report showed, while the index of food grains, including cereals and pulses fell 0.1 percent. 

To check prices of food grains, which have risen at almost twice the pace of manufactured product costs over the past year, the government removed the import duty on lentils in June 2006, and on wheat in September. 

The yield on India's 10-year government bond remained unchanged at 8.34 percent after the release of the inflation report. 

The Reserve Bank of India, which has raised its key interest rates nine times since October 2004, will announce its next monetary policy on July 31. The central bank can announce rate changes before the scheduled monetary policy review, as it has done three times since December. 

To combat inflation, the Reserve Bank has also allowed the rupee to gain to near a nine-year high to make imports cheaper. It has slowed dollar purchases on concern rupee funds injected from the exercise will stoke inflation.


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## Bushroda

*China and India a double-edged sword for Africa* 
Business Report, South Africa, June 15, 2007
By Clare Nullis

Cape Town - Friend or foe? Comrade or coloniser?

Business and political leaders attending an annual conference meant to focus entrepreneurial attention on Africa hailed China' and India' huge appetite for raw materials as a powerful driving force to move the African economy up a gear.

But the discussion at the World Economic Forum's annual conference on Africa, which ended Friday, was tinged with a now familiar note of anxiety that the two giants would exploit Africa's resources and leave the continent empty handed.

"It's an opportunity of a lifetime for a continent such as Africa to have such great attention and increasing demand for its resources from two countries both having populations of more than 1 billion," said Tokyo Sexwale, a South African business tycoon who is a potential candidate to be the country's next president.

But he said that the big challenge for China would be to prove to Western critics that it was not motivated by the same financial imperialism of which the West stood accused in the past.

China has found a seemingly limitless market in Africa for its cheap goods. And oil-rich countries such as Nigeria and Angola provide the natural resources China needs to sustain its rapid growth.

The Chinese economy is growing by about 10 percent. Much of Africa's estimated 5.5 percent economic growth last year - well ahead of the global average - was attributed to China's near-insatiable demand for the continent's oil, gas, timber, copper and other natural resources.

"China is growing. China has a voracious appetite for many things. They are buying anything under the sun to support a growth that has taken off," said South African trade and industry minister Mandisi Mpahlwa. "Should we stop them? Should we say they should not buy from us because it's only raw materials they are buying?"

He said China's goal of doubling its rate of growth by 2020 offered boundless opportunities for Africa to benefit from the boom.

Africa has become a crucial part of China's growth strategy. Two-way trade soared 40 percent to $55.5 billion last year, and Beijing says it believes that figure will rise to $100 billion by 2020. At a Sino-African summit in Beijing late last year, Chinese entrepreneurs signed deals worth $1.9 billion with African governments and firms.

China's former foreign minister, Li Zhaoxing illustrated the extent of the ties: China had 900 projects in Africa; more than 800 Chinese companies are operating in Africa; it has sent 16,000 medical personnel to the continent; offered scholarships to 20,000 African students and trained 17,000 African professionals. And so the list went on.


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## Adux

*FM confident of GDP growth touching 10 per cent this fiscal *

Saturday, June 16, 2007
15:36 IST

Blog this story



Coimbatore: Union Finance Minister P Chidambaram today expressed confidence of the GDP growth touching 10 per cent during the current fiscal.


With efforts put in by entrepreneuers, industrialists and all sections of the society, the country achieved 7.5 per cent growth in the first year of the Dr Manmohan Singh-led UPA rule followed by nine per cent next year and 9.4 per cent in the just concluded financial year, Chidambaram said.


Speaking after inaugurating a plant, manufacturing defence-oriented products, on the city outskirts, Chidambaram said the Government's confidence in the reforms, was the main reason for the economic growth being achieved and taking the Nation economically forward.


Lauding the efforts of Saarc Tech Tool for taking up the manufacture of packaging system for defence and war equipment, Chidambaram said it was really regrettable that the country had to import coffins at a cost of Rs 1.10 lakh each to bring back the body of jawans who died in the Kargil war.


The Rs 9 crore plant would manufacture defence-oriented products like roto moulded transit cases (boxes) which could be used by defence forces for carrying sophisticated defence equipment. The plant has a capacity to manufacture 60,000 boxes annually, its Managing director, P Murugesh said. The company was ambitious of achieving a turnover of Rs 100 crore in the next five years, he added.


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## Bushroda

Thanx Adux, I was about to post it before I checked on your post. Great news anyway.


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## Bushroda

*India Property 2007 under way in Dubai*
BY A STAFF REPORTER 
Khaleej Times Online
16 June 2007 

DUBAI  The three-day India Property 2007 opened on Thursday at Renaissance Dubai Hotel.

Organised by the official body of the Indian real Estate industry, the Confederation of Real Estate Developers Association of India (CREDAI), and Maharashtra Chamber of Housing Industry (MCHI), the exhibition aims at attracting foreign investments from NRIs and other investors.

The show will also be held in London, at Olympia Conference Centre from July 20 22, 2007. This is the eighth Property Show to be held in Dubai since 2002. 

Rajni S. Ajmera, President, CREDAI, said: "With the boom in the economy, Indian Real Estate has emerged as a Global destination for world's top construction companies, architectural firms and allied industries seeing the huge growth potential that it offers. In line with the growing interest in Indian reality, these property shows facilitate an interaction between NRIs, reality investors and developers, all under one roof, wherein they get to know firsthand the types of properties available, loan options and other formalities required, in finally procuring their property back home." 

Nainesh Shah, Chairman, International Exhibitions, MCHI , said: "Indians settled abroad are one of the most influential and prosperous communities in the global economic development and we are glad to provide them an opportunity of being part of a success story, by investing in Indian Real Estate, which is today, the growth driver of the Indian economy." According to J.S. Augustine, Co-Chairman, International Exhibitions, MCHI said, "The interest levels amongst NRIs have increased many fold in the last 7 years. NRIs have benefited immensely through our exhibitions and have bought peace of mind by making the right choice. We are proud that we have played a key role in facilitating such a process for the NRI community at large and we strive for bettering this year on year." 

"Today, with the real estate in India booming and the government's open door policy for inviting foreign direct investments into the country, there has been a spurt of Indian property fairs held abroad targeting NRIs there, to invest in properties back home. In this scenario, it becomes important to differentiate between Industry organised property exhibitions and the other property exhibitions held by fly by night operators, event companies, dot.com companies, organisers of trade shows, consumer shows and lifestyle shows." He said industry organised property fairs offer NRIs a wide range of properties, from leading and established developers who have a more organised feedback mechanism and maintain a high standard in quality of construction and delivery.


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## Bushroda

*Indian wholesale price inflation eases to its lowest*
Daily Times, Pakistan

NEW DELHI: Indian wholesale price inflation eased to its lowest in 10 months, holding within the central banks comfort zone, but analysts said strong industrial growth meant the central bank would remain vigilant. 

The widely tracked wholesale price index rose 4.80 percent in the 12 months to June 2, slowing from 4.85 percent a week earlier and well below a two-year high of 6.69 percent in January. 

The central bank has raised interest rates five times in the past year, the last time at the end of March, and may still have to tighten further despite the better inflation news. 

Inflation may come down even further in the coming weeks but I dont think the central bank is comforted by the decline in the headline numbers, said Indranil Pan, chief economist at Kotak Mahindra Bank. 

Far too many factors point to rapid economic growth which may raise inflationary pressures in the coming months. 

The inflation rate published on Friday matched a forecast of 4.80 percent in a Reuters poll of analysts. Wholesale price inflation is now at its lowest since the week of July 29 last year. 

The yield on the 10-year federal bond was unchanged at 8.34 percent after the data, while the partially convertible rupee initially eased to 40.9650/9750 per dollar before recovering to 40.9350/9500. 

The wholesale price index is more closely watched than the consumer price index because it has a higher number of products in its basket and is published weekly. 

The Indian economy, Asias third-largest, grew 9.4 percent in the fiscal year that ended in March, its highest rate in 18 years and second only to China among major economies. 

April industrial output, released this week, clocked 13.6 percent annually, making the market nervous the central bank might tighten policy again at its next review on July 31 or even before. 

Fuel price rise?: As well as raising rates, the central bank has increased banks reserve requirements three times since December to rein in inflation and credit growth. It held rates steady at its last review in April but said it would act swiftly if needed. 

It aims to keep inflation close to five percent in the fiscal year to March 31, 2008, and bring it down to 4.0-4.5 percent over the medium term. In an effort to make imports cheaper, it allowed the rupee to appreciate to a nine-year high against the dollar in late May and the government has cut duties on cement and steel to soften prices. 

But India has grown at an annual average of 8.6 percent in the past four years, leaving factory and port capacity stretched and demand for manufactured goods outstripping supply. 

An oil ministry official said this week the government might review retail prices of petrol and diesel in mid-July to bring them in line with higher oil prices. India, which imports 70 percent of its oil, sets a ceiling on retail fuel prices. 

Analysts said this could also pose a threat to inflation. 

Decline in food prices is a major relief but manufacturing inflation still continues to be relatively high. And petroleum prices have yet to be revised, said Saumitra Chaudhuri, an economic adviser at domestic rating agency ICRA. So we have to see the inflation data in this context. 

Global edible oil prices, mainly soy and palm which India imports in large volumes, have risen sharply in recent months and food price pressures at the start of the year posed a political headache for the ruling coalition. reuters


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## Bushroda

*Indian strike - privatisation is the answer * 
Updated: 06-16-2007 

The civil aviation industry remains in a turmoil with the latest short term strike of the public sector carrier Indian creating chaos for consumers. Though the strike was thankfully resolved within a day or two, it created headaches and heartburns for the flying public who still regard Indian as the most 'reliable' airline in the country. This reputation has been badly battered as people of all walks of life who had to reach destinations on urgent work had to suffer undue hardship. 

The strike came just as the public sector company was in the process of merging with Air India with the aim of becoming one of the biggest players in the civil aviation sector. At this critical stage, its public image as the slow but steady carrier has been badly bruised. Normally Indian is the airline of choice for those who put a premium on safety and reliability as well as punctuality. It is well known that Indian has considerable infrastructure to maintain and operate its aircraft efficiently. It also has the reputation of being a safe airline. Besides, whenever there is a traffic jam in the skies or in airports, the civil aviation authorities give priority to Indian flights, enabling them to be more punctual than the other private airlines in such situation.

In contrast, these two days of the strike by the domestic carrier have given the impression that the stodgy but solid player can no longer claim that it is the most dependable airline.

This comes as a blow to the newly created entity that is already aware of the tough competition in the field. The spate of mergers and acquisitions that began with Jet Airways taking over Sahara and followed with Kingfisher's tie-up with Air Deccan is still not over. Kingfisher is making it clear that it is eyeing other acquisitions like the smaller Spicejet or GoAir, depending of course on their availability. Ultimately, it is clear that there will be about three or four large entities in the civil aviation industry within the next few years.

In this scenario, the Indian and Air India combine will have to show a lot more pizzaz than they have recently to beat the competition. Jet is slowly taking over the space of the most reliable and ontime carrier while Kingfisher has got the tag of providing the most comfort and luxe experience. It has yet to be seen whether Indian-Air India will try to launch a low cost carrier like the other two biggies. Jet is swiftly changing Sahara to Jetlite and Kingfisher has made Air Deccan its low cost brand. In any case, the merged public sector entity seems to be lagging far behind the others.

The fact is that it is time to think - yet again - about privatising Indian and Air India. Globally, the era of the public sector airline seems to be over. Once upon a time, every country had its own national airline which was often government owned, like British Airway, Air France and Lufthansa. But declining profits took their toll as more efficient private airlines forged ahead and most countries have now privatized their national carriers. India will also have to think in terms of privatising though this proposal has always met with stiff resistance from politicians. The real reason for maintaining a government owned national carrier is the patronage and power that goes along with operating such an entity. It is well known that becoming the minister for civil aviation is a plum post and these cabinet ministers have virtually ruled the skies.

One has only to compare the Air India launched by J.R.D. Tata to the Air India currently operated by the government to see the difference between private and public sector management. When JRD ran the show, Air India was a boutique airline that was renowned globally for its service and class aboard flights. In contrast, Air India is now considered a lame duck. Even Indians shun this international airline which has become a byword for inefficiency in the aviation world. Umpteen stories have appeared in the media about the mishaps that take place owing to overbooking, prolonged delays and discomfort to passengers in this airline. The simple fact is that bureaucrats are not equipped to run airlines and the job needs to be handed over to professionals in the aviation industry.

Any whiff of privatisation, however, elicits strong protests from politicians of all hues. There is a feeling that selling Indian and Air India would be like selling the crown jewels of the economy. In fact, the government could keep a minority stake in the airline while making a strategic sale to a private operator. This would enable it to reap the benefits of revenues from dividends in case the airline improves profitability and yet retain a nominal stake in the company. Maruti Udyog, the Indo-Japanese carmaker for instance, is a case in point where the government has gradually eased out of the company which has in turn become more dynamic as it has been freed from bureaucratic controls.

The latest flash strike in the domestic carrier has thus come as a warning signal to the government. If it really wants the public sector carriers to become effective players in the aviation sector, it will have to take a comprehensive review of civil aviation policies and ultimately take some hard decisions.


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## Bushroda

*Indias $1 bn club expands by 245%*
Livemint.com, WallStreet Journal

*71 listed companies now generate $1 bn in annual sales, up from 29 five years ago; China sees 500% increase*

Indias heady economic growth in the past five years has seen the number of listed companies with annual sales of at least $1 billion grow more than two-fold to a record 71.

The not-so-great news is that in the same period, neighbouring and sometimes rival Chinas billion-dollar corporate club has increased 500% to 90 from just 18.

There is nothing particularly significant about crossing the $1 billion, or Rs4,100 crore, annual revenue mark. But $1 billion is often a psychological benchmark that tends to separate the big boys from the rest of the corporate pack.

Economists are not surprised at the jump in the number of such companies in India, up from 29 five years ago and through the fiscal year ended March.

It is the rising tide effect, notes Subir Gokarn, executive director and chief economist at credit rating agency Crisil Ltd. With the economy on the high growth track, the environment is conducive to significant growth for businesses as well, he says.

A Mint analysis of traded companies in Brazil, Russia, India and China, the so-called BRIC countries, shows that on this score at least, India and China have pulled far ahead of the pack.

Data from Bloomberg suggests that Brazil has 17 companies with annual revenues of more than $1 billion, compared with 11 in 2001. Russia has actually seen a drop in the number of $1 billion companies into single digits, from seven in 2001 to three in 2006.

The notion of BRICs as global powerhouses has taken root since a 2003 report by investment bank Goldman Sachs Group Inc. suggested that Brazil, Russia, India and China could be among the most dominant economies by 2050. These countries are forecast to hold a combined gross domestic product (GDP) of $14.951 trillion.

We think the number of such opportunities over the years would be much larger, says Mark Mobius, managing director of Franklin Templeton Investments. China and India are unique in this respect. The internal market is so big that companies can continue to grow for many years without the market being saturated or glutted.

According to Mobius, one prime example is the use of mobile telephony where China even now has only 45% penetration and India only 15%, and still growing. Many more sectors, according to him, would see such opportunities.

Many people are dismissive of such mega trends as being too shallow or simplistic, says Mobius. However, over a period of time, one realizes that it is these trends which manifest themselves in growth of companies and even the economy, he adds.

To be sure, the sudden and sustained appreciation of the rupee versus the US dollar has also a bearing on the swelling number of billion-dollar companies in India. The rupee has appreciated about 10% since January 2007 against the greenback. With the erosion of the value of the dollar against the rupee, Indian companies sales have grown faster in dollar terms than they otherwise would have. 

Indeed, of the 71 firms, three companies clearly made it into the list because of the currency effect: Indian Bank, ABB Ltd and National Mineral Development Corp. Ltd. In the case of commercial banks, the net interest income is considered as revenue.

The list of Indian companies doesnt include unlisted organizations such as the Gujarat Cooperative Milk Marketing Federation, which markets Amul dairy products. The federation said on Friday that its revenues have touched Rs4,277.84 crore in 2006-07, thus becoming the first $1 billion cooperative in India.

Clearly, Indias growth of billion-dollar businesses pales in comparison to Chinas performance on this front. China also has an edge over India in the sheer size of its top business houses.
For&#8202;instance,&#8202;Indian&#8202;Oil&#8202;Corp. Ltd, the largest Indian company with revenues of $52.53 billion, is still less than half the size of its Chinese counterpart, China Petroleum and Chemical Corp., which is the largest Chinese company with revenues of $133.84 billion.

In fact, the latest Global Fortune 500, published by Fortune magazine, has only six Indian companies. In comparison, 20 Chinese firms are featured on the list. Still, Siddhartha Roy, economic advisor to Tata Sons, says that the two countries cannot be compared.

The growth rates for the two countries are quite different, says Roy. We also have to take into account the fact that businesses in China have got much more support from their government. Look at Chinas currency, for instance. It continues to be kept at an artificially low level.

Irrespective of what China does, economists remain sanguine about about Indias corporate houses. The GDP will continue to grow and, with the growth, demand will also increase, says Roy. On the export front too, Indian businesses will continue to do well as they are competitive and cost-effective in the global markets.

I see this growth gaining momentum and a lot of it will be triggered by the need for businesses to stay in a position of competitiveness, adds Crisils Gokarn. This will result in consolidation giving birth to more billion-dollar companies in India.

Indeed, the Mint analysis suggests some 13 listed Indian companies are likely to cross the $1 billion annual sales figure within the next 12 months.


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## Bushroda

*Bring parallel economy into tax net: Kalam*

Nagpur, Jun 15: President Dr A P J Abdul Kalam today called for research to work out ways and means to bring the country's entire economy, including the 'parallel economy', within the tax net.

Speaking at a function as part of the silver jubilee celebrations of the National Academy of Direct Taxes (NADT) here, Dr Kalam said the research would enable the Ministry of Finance to make the necessary changes in its policy every year to bring the parallel economy into the tax net.

Referring to reports about the existence of the parallel economy, he said the research on the ways to bring the parallel economy into the tax net could be carried out in cooperation with renowned economists from academic institutions. Probationers from NADT could participate in the research, he added.

Dr Kalam said the probationers could also study judgements from direct tax tribunals and the courts to determine if there is a need to make the laws simpler or clearer so that the need for litigation was reduced.

Research could also be conducted to bring more transparency in the tax system, reduce the fear in the minds of the tax-payers, increase recovery amid a friendly environment, improve the economy, contain inflation and ways to put tax collections to maximum use for the development of the country, the President said.

Although India's Gross Domestic Product (GDP) is growing at 9 per cent per annum, economic growth has not fully reflected in the quality of life of a large number of people, especially of those in the rural areas, he said. 

To improve the quality of life, efforts must be made to provide housing, drinking water, nutrition, sanitation, education, employment and healthcare, besides promoting the joint family system and righteousness, removing social inequalities and reducing corruption Dr Kalam said. 

This would ensure a prosperous and strong India, he added. 

Maharashtra Chief Minister Vilasrao Deshmukh was the chief guest at the function.


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## Bushroda

*Looking into the eye of the tiger *
By Gaurav Ghose, Financial Reporter
GULFNEWS 

India's economic growth continues apace. The latest GDP figure of 9.4 per cent in the year to March is a sign of the continuing robustness.

Despite concerns of the economy overheating - though there are some recent signs of cooling - most economists regard the macroeconomic performance as commendable. 

Now the same tribe looking ahead and wondering what lies ahead have first to evaluate what's going on, then what makes India unique and what are the factors that will sustain high growth, even if it is somewhat slower than the current rate. And it is here there are some agreements and equally serious disagreements. 

In documenting the growth story and making a 2008 outlook forecast, the latest BNP Paribas report carries the headline "India is different."

It nominates two areas of deviation from the rest of the Asia growth experience. 

First is the fact that India's lively growth rates are being achieved with exports playing a secondary role. Though its contribution has risen, India's export-to-GDP ratio reached only 20.2 per cent in 2006, significantly lower than its regional counterparts (see Table 1). 

Second is India's distinctive de-industrialisation process, which, unlike other developing countries, bypassed the manufacturing stage of economic development and leapfrogged straight into services. 

Since 1991, when economic reforms were hastened, the services sector has grown 8.1 per cent per year, compared with only 6.4 per cent in industry and 2.7 per cent in agriculture. 

There are several implications of India's distinctiveness.

The report points out "at a time when there is a debate on whether Asian economies (referring to North Asia and Asean economies) are uncoupling from the OECD economic cycle, we contend this issue is not applicable to India, which has only a small export sector. An important corollary is that India is less vulnerable to external demand shocks..." 

Amitendu Palit, a member of the Indian Economic Services and now a visiting scholar at ICRIER, an autonomous policy institute in New Delhi, disagrees. 

He believes exports have to grow to ensure double digit growth rates on a sustained basis. "Services have definitely helped growth. But the 'leapfrogging' has created serious structural imbalances. This is unlikely to be sustainable, unless industry grows," he adds. 

*Concerns *

In fact, the BNP Paribas report notes that the main concern behind India's peculiar mode of development is that the knowledge-intensive services sector is never likely to become a mass employer of low-skilled labour. 

In monetary matters, concerns on the development of agriculture, rising inflation and strong credit growth have led the Reserve Bank of India to adopt a series of monetary tightening measures, including successive increase in repo rate and cash reserve ratio since April 2006. 

Standing back, it is the growth in private savings, the improvement in fiscal balances, a rise in the overall investment rate and much improvement in external debt which feature as positive factors determining economic prospects. 

India's overall savings rate of 32.4 per cent - comprising household savings, private corporate savings and public sector savings - compares favourably with the world average of 22 per cent and the 17 per cent in low economies. "Still not enough, when compared to China and definitely needs to reach 40 per cent of GDP," Palit points out. 

In the budget arena, the consolidated deficit of the central and state governments has declined to about 6.3 per cent for 2007 from a peak of 9.9 per cent in 2002 (see Chart 1). 

But, says Aninda Mitra, vice-president and senior sovereign analyst at Moody's, "[That level of] deficit does not take into account several off-budget items, especially items related to oil subsidies (estimated at 1 per cent to 2 per cent of GDP), which add to general government debt and require market funding."

Also, Mitra says, despite deficit reduction, the stock of India's public debt remains well over 80 per cent of GDP. This burden corresponds to more than four times government revenue and requires interest payments of about 30 per cent of total revenues.

That said, he also observes that foreign currency denominated debt is negligible, and the domestic debt market is deep, providing ample financing for the government.

Paul Rawkins, a sover-eign analyst at Fitch Ratings, adds that, although the fact that central government [?] and the states have been "singing from the same hymn sheet" in policy terms is notable, "fiscal consolidation needs to be faster if India is to aspire to sustained higher growth". 

The BNP Paribas report observes that India's external debt expanded at a much lower rate than GDP during the last few years, which has resulted in a gradual decline in the debt-to-GDP ratio, so that the country has low external vulnerability (see Chart 2). 

Yet FDI into India has remained low. Instead, commercial loans (accounting for 34.9 per cent of total capital inflows in 2006, dominate capital inflows into India.

It is estimated that to support an annual GDP growth rate of eight per cent, the investment component needs to be 31 per cent of GDP. Thus, investment rates need to improve to meet the 10 per cent target growth for the Eleventh Plan. 

Moreover, in respect of business regulation, India ranks a poor 134th in the World Bank's Doing Business survey, of 175 countries surveyed. In the Enterprise survey electricity is the main constraint. Taxation and corruption are the other main constraints. So what should we take from this analytical round-up? 

The BNP report estimates India's growth to ease to 8.1 per cent in 2008 as "domestic demand, especially private consumption and investments, softens." It expects a slight deceleration in export growth as global demand slows and [from] the lagging effects of a stronger rupee. 

Moody's puts the 2008 outlook figure at 7.6 per cent, the lowest of the lot, Palit feels confident about 8.5 per cent growth and Rawkins, the most upbeat, is looking closer to 9 per cent. 

So the tiger may be adjusting its stride. In doing so so, it might alleviate the inflation issue, and address some of the structural concerns which have lagged behind in its surge. A slight pausing for breath might make both India itself and the watching world feel a little easier.


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## Bushroda

*The grand Indian TOUR*

Check out this bit of trivia on Indian tourism. The first Planning Commission in 1955 had ranked tourism in the 269th place on their priority list, even lower than the development of lighthouses. It took nearly three decades of darkness before somebody saw the light and the huge potential in tourism revenue as well as scope for employment. 

While international tourist arrivals remain sluggish, domestic tourism is where the action is. An incredible 375 million Indians are discovering the countrys myriad destinations and fuelling an unprecedented boom. 

Incredible India trumpets the high decibel campaign but its no hype. From the awesome heights of the Himalayas to Goas sun-kissed beaches, India is a land of a million journeys. 
Indias tourist destination ranges from the top 10 World Heritage sites to new untapped destinations like the Lakshwadeep and the Andamans. India has also been popular for its wildlife. 

While the tiger remains the symbol of Indias magnificent wildlife, our sanctuaries offer some of the widest range of wildlife in the world. Indias mountains offer some of the best places in the world to literally chill out. Some are well known while others remain unexplored but all rejuvenate body and soul. 

Here are some of the well-known places that offer world-class hospitality and are renowned for their heritage. 

Rajasthan ~ The historical citadel of India, Rajasthan is the land of Rajput royalty. From the Amber Fort to the desert fortress of Sonar Kella, it provides a most authentic taste of war, honour and extravagance of the royal Rajputana. 

Maharashtra and Goa ~ The land of silvery sandy beaches, emerald blue waters Goa is a paradise for leisure seekers. The Ajanta-Ellora caves in Maharashtra are a historical marvel. Dated back to the 2nd century BC it is said that Buddha meditated here. The Elephanta Caves near Mumbai also deserve a special mention. 

Kashmir - In spite of the ongoing militancy Srinagar continues to attract tourists eager to experience its legendary charms. Tourists can hire a houseboat to savour the charms of the Dal Lake. Winters in Gulmarg are beautiful as the sun shines while the snow kisses your feet. 

The Andamans ~ Floating in the azure blue waters of the Indian Ocean the emerald green Archipelago of 572 islands has a long history. Blessed with natural green forests and exquisite endemic species, the place is a nature lovers haven. 

Darjeeling - The Queen of the hills of Bengal is of exquisite beauty. From the legendary Toy Train to the lush tea gardens, everything in this hill station brings pleasure with leisure. 

Kerala ~The land of coffee, the backwaters of Kerala are worth visiting. It is often referred to as Gods Own Country for its natural surroundings of lush greenery amidst a myriad of tranquil lagoons. 

Pondicherry ~ A family vacation spot, it is truly the mother of all getaways on the southeastern side of India. For those wanting to give History and Architecture a slip, theres plenty to do here. One can enjoy the exhilarating experience of watching the sunset on the shimmering blue sea. 

The list of exotic vacation spots in India is truly endless. Ranging from the ancient rock temples to the sun-kissed beaches, every place in India seems to offer something different. 

Indias ancient cultural past and religious traditions have created distinctive architectural styles and world famous monuments. 

Chitrakoot - The hills of many wonders is a revered place for the Hindus. Located in the Banda district of Uttar Pradesh, Lord Rama is said to have spend 12 years of his exile here. 

When mentioning Indian temples, then along with Konark in Orissa is another Sun Temple that leaves one spellbound  the temple at Modhera, Gujarat. Vandalised by Allaudin Khaljis commander, many of the adornments of the temples are missing, but even in the ruined state Modheras beauty is bewitching with its breathtaking expansive layout and design. 

And if you yearn for a tinge of royal hospitality in the laps of the Himalayas, just head for Nalagarh Fort in Himachal Pradesh. Spread across 20 acres on the Shivalik foothills, it offers a range of facilities with modern comforts. In the South, Thanjavur near Madurai remains famous for its Tanjore paintings and cluster of ancient temples. 

Indias tourism industry is booming. Ambika Soni, our tourism minister is hopeful that in a few years India will be among the most visited countries by tourists across the world. India received an estimated of 

3.5 million foreign tourists last year but the number of domestic tourist were 366 million over the same period. The new generation of Indian travellers is young and takes frequent holidays in the year. 

In global terms the tourism industry is the single largest employer in India. It is found that every rupee spent by a tourist changes hands 13 times, and every hotel room gives direct employment to three people and indirect employment to eight. 

The tourism sector is expected to grow at a rate of 9.7 per cent per annum and will create 7 million jobs over the next 10 years. Tourism is now being heralded as the next big thing for Indian economy. From Kashmir to Kanyakumari, from Dwarka to Arunachal Pradesh every state in India has something dazzling and beautiful to offer. 

The next time you wish to take a holiday, plan it somewhere in our own Subcontinent of wonders so that you get to see the diverse beauties of our motherland and also play an important role in boosting the countrys tourism industry. 

So, leave aside the hectic schedules and rush hour traffic behind and take a look at those places sure to take you miles away from the maddening rush.


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## Bushroda

*FM confident of GDP growth touching 10 per cent this fiscal*
Coimbatore, June 16, 2007
First Published: 15:39 IST(16/6/2007)

Union Finance Minister P Chidambaram on Saturday expressed confidence of the GDP growth touching 10 per cent during the current fiscal. 

With efforts put in by entrepreneurs, industrialists and all sections of the society, the country achieved 7.5 per cent growth in the first year of the Manmohan Singh-led UPA rule followed by nine per cent next year and 9.4 per cent in the just concluded financial year, Chidambaram said.

Speaking after inaugurating a plant, manufacturing defence-oriented products, on the city outskirts, Chidambaram said the Government's confidence in the reforms was the main reason for the economic growth being achieved and taking the nation economically forward.

Lauding the efforts of Saarc Tech Tool for taking up the manufacture of packaging system for defence and war equipment, Chidambaram said it was really regrettable that the country had to imports coffins at a cost of Rs 1.10 lakh each to bring back the body of jawans who died in the Kargil war.

The Nine crore rupees plant would manufacture defence-oriented products like roto moulded transit cases (boxes), which could be used by defence forces for carrying sophisticated defence equipment. The plant has a capacity to manufacture 60,000 boxes annually, its Managing director, P Murugesh said.

The company was ambitious of achieving a turnover of Rs .100 crore in the next five years, Murugesh said.


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## Bushroda

*What the economic rise of China, India means for Japan*
Takashi Shiraishi / Special to The Yomiuri Shimbun
The Daily Yomiuri, Japan

The economic rise of China and India is a given, but what changes will it bring about in the international balance of power when viewed from a long-range perspective? And how should Japan deal with these changes? 

Intriguing projections on the topic can be seen in the latest long-term global economic forecasts by the Japan Center for Economic Research (JCER), a private think tank. 

According to the projections, Japan's gross domestic product, as measured on the basis of purchasing-power parity as of 2000, will stand at 4.2 trillion dollars in 2020. 

The figure will increase to 4.7 trillion dollars in 2030, and rise to around the 5 trillion dollars level in 2040 and 2050. 

China's GDP based on the purchasing-power parity measurement will be 17.3 trillion dollars in 2020, expanding to 25.2 trillion dollars in 2030, 30.4 trillion dollars in 2040 and eventually to 33.4 trillion dollars in 2050, JCER said. 

This means that the size of the Chinese economy will be four times as large as Japan's in 2020, five times that of Japan in 2030, six times in 2040 and almost seven times in 2050. 

Meanwhile, the GDP of the United States is projected to stand at 16.8 trillion dollars in 2020, 21.4 trillion dollars in 2030, 27.2 trillion dollars in 2040 and 34 trillion dollars in 2050. 

In other words, the size of the Chinese economy is forecast to surpass that of the United States during the 2020-2040 period. 

However, the U.S. economy, in terms of 2000 PPP-based GDP, will be more than that of China by 2050, due mainly to differences in population growth ratios of the two countries, according to the estimates. 

As for India's GDP, the figure in 2020 will be 7.1 trillion dollars, and will leap to 19.1 trillion dollars by 2050, the forecasts said. 

The scale of the European Union economy, on the other hand, is estimated to expand to 14.5 trillion dollars by 2020 and climb to 19.9 trillion dollars by 2050. 

This means the scale of the EU economy may be similar to India's in 2050. 

The size of the economy of the 10-member Association of Southeast Asian Nations will keep swelling to 3.9 trillion dollars in 2020, 5.5 trillion dollars in 2030 and 9.2 trillion dollars in 2050. 

This signifies that the ASEAN economy will stand above Japan's in 2030 and will be 1.8 times that of this country in 2050, according to the think tank's long-term forecasts. 

To avoid misunderstanding, it should be stated that the size of a country's economy based on purchasing-power parity is not exactly the best yardstick for measuring that country's power. 

Military might, technological clout and political leadership matter a great deal. 

=== 

Interdependence a certainty 

Nevertheless, when the scale of the Chinese economy--gauged on a purchasing-power parity basis--exceeds that of the United States and grows to a level five to six times larger than Japan's, while India's economy evolves to be on a par with the EU in terms of GDP, the global order, as well as that in Asia, will almost certainly undergo a major transformation. 

The presence of China and India will surely become a far more important factor in international relations than at present. 

Another noteworthy point is the certainty that international economic interdependence will continue to expand and deepen in the future. 

In an age of globalization and regionalization, economies of individual countries, as a matter of course, can never be considered self-sufficient. 

This is demonstrated by the fact that East Asian economies--comprising Japan, the newly industrializing economies of South Korea, Taiwan, Hong Kong and Singapore, plus ASEAN and China--are being brought together more closely than ever because of ever-increasing and interdependent regional business networks. 

As a result, China's economic development has been heavily reliant on direct investment from overseas. A glance at the latest statistics shows that China's foreign trade dependency ratio, or the ratio of the sum of exports and imports to GDP, soared to 70 percent in 2004 compared with 51 percent in 2002. 

To put it another way, because of the expansion and deepening of economic interdependence among nations, China and other countries are taking an increasingly significant interest in the stable development of the existing world political and economic order. 

What changes will occur in the global order, and that of Asia, in the wake of China's and India's emergence as economic powerhouses? 

How the changes will ultimately manifest themselves in the global and Asian order is immaterial. There is no way to know. 

It is clear, however, that for Japan, as well as many other countries, revolutionary changes in the world order would be undesirable. 

Many countries want to see the existing order change gradually, in an evolutionary way. 

A fundamentally significant problem is what Japan should do to assist this process. 

Two relevant points are worth noting: First, efforts should be made to enhance long-range predictability in world and regional affairs. 

As already mentioned, the scale of the Chinese economy will exceed that of the United States, in purchasing-power parity terms, from 2020 to 2040, while the Japanese economy will be dwarfed to a size one-seventh that of the United States and China and one-fourth that of the EU and India by 2050. 

=== 

Long-term predictions a must 


Consequently, Japan will find it difficult to act as a major power in global politics, as potent as the United States, the EU, China and India. 

As the American and Chinese national power become competitive, however, Japan will play a decisive role in determining the regional balance of power in East Asia. In the 2020-2040 period, for example, when the scale of China's economy will top that of the United States, the size strength of the Japanese and U.S. economies combined will still be greater than China's. 

What should Japan do, then? 

Suppose a major transformation of the balance of power in international relations takes place. If all players believe in and act upon the mind-set that the process would lead to revolutionary changes in the global order, the situation could become extremely volatile. 

To preempt this possibility, it will be imperative to increase the long-term predictability regarding changes in the global and regional order. 

The role Japan can play will not be to focus its diplomatic efforts on formulating a balance of power between the United States and China. 

Instead, Japan should maintain the Japan-U.S. alliance, while forging ahead with strategic dialogues with China, thus encouraging a gradual transformation of the order. 

=== 

Japan should pursue India partnership 


It is of great importance for Japan to explore ways of forming a strategic partnership with India, which is projected to become a rising economic power on a par with the EU over the long term. 

But any attempt to have India involved in balance-of-power politics in East Asia should be avoided. In any case, India is not likely to play this game. 

Second, the East Asian network of economic partnerships should be given added momentum. 

The deeper the interdependence among regional economies, the more it will be in China's interest to endorse evolutionary changes to regional order. This, too, applies to many other countries in the region. In other words, the more isolated from the network of interdependence of nations a country may be--as is the case with Myanmar--the stronger its disposition for dependency on China. 

Another point worth noting is that many Southeast Asian countries whose industries are competitive rather than complementary with China's perform a balancing act that engages both Japan and China. 

Thailand, for instance, has three strategic industries: the automobile industry, which relies on Japanese automakers, and tourism and agribusiness, which have their eye on the China market. 

Indonesia, for its part, already has a strategic partnership with China and is now seeking another with Japan. 

All these cases show that Japan's commitment to help facilitate future development of East Asian economies will be certain to promote regional economic partnerships, bringing about a stable evolution of regional order. 

The government's Council for the Asian Gateway Initiative, chaired by Prime Minister Shinzo Abe, recently issued a set of policy recommendations. 

Among major initiatives envisioned by the council are calls for revamping policies concerning the nation's civil aviation policy, foreign students studying in Japan as well as measures to make Japan's financial market truly attractive in the eyes of the rest of Asia. 

The council's blueprint envisions Japan opening ever more widely to Asia and the rest of the world, and tapping Asian economic growth potential and vigor for the benefit of the Japanese economy, so that this country can play a responsible role in promoting the development of Asia and the evolutionary transformation of the regional order. 

Enhancing the long-term predictability of the changing regional order, while deepening economic integration in the region, is the way to go for Japan.


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## Bushroda

*Air India showcases first refurbished aircraft* 
Fly South Aviation News, South Africa 

*The new carrier will operate to the U.S. Five more aircraft to get facelift*

http://imageshack.us 

MUMBAI: Air India on Friday unveiled its refurbished Boeing 747-400 aircraft, the first of six aircraft that will undergo a total makeover. The aircraft is christened `Agra' and will operate to the U.S. destinations of New York, Newark and Chicago. 

Air India has for the first time undertaken a major in-house cabin refurbishment and in-flight entertainment upgradation programme at an estimated cost of Rs. 50 crore for each aircraft, thus totalling to Rs. 300 crore for the six aircraft. 

The cabin has been upgraded with all new economy seats, cushions and upholstery; the new i4000 in-flight entertainment system from Thales is installed on every seat back including the economy seats with audio and video on-demand and other interactive entertainment. Also, all passengers will have access to personal screens with 415 gigabytes of content  nearly 200 movies in English, French, Japanese and some regional ones. 

Besides, new overhead bins and aircraft side panels, a new overhead ceiling for the cargohold, freshcoat of paint for the side trims, cockpit trims and new toilets are part of the refurbished aircraft. All these were supplied by Jamco, a Japanese cabin interior equipment provider. Health Tecna was selected for the interior scheme and components and new seats were provided by the Texas-based Weber Aircraft. Air India is acquiring 68 new aircraft, which will boast the latest amenities. Seven of the 18 aircraft ordered for Air India Expresshave already been inducted in its fleet. The first of the 50 new aircraft for Air India will join the fleet in June. With the induction of the Boeing 777 aircraft, the airline will launch ultra-long range, non-stop services between India and the U.S. Thereafter, Air India will introduce one-stop services to several American cities from multiple points in India.


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## Bushroda

*Scotch set for passage to India*
By Selwyn Parker
Sunday Herald, UK

*With emerging markets clamouring for quality whisky, and the previously closed Indian sector ready to open to premium brands, the industry is poised for unprecedented growth*

IT IS a fair bet that Vijay Mallya started lobbying for the dismantling of India's blockade of tariffs on imported whisky as soon as he returned home after the announcement of his company's £595 million purchase of Whyte & Mackay in May.

Now that exorbitant tariffs of up to 550% on Scotch whisky, not to mention other measures against imported spirits, will work against his new investment, there is no longer any point in the chairman of United Spirits pretending the barriers that have largely kept the Scottish whisky industry out of India are justifiable.

By ensuring a virtually protected market the duties certainly helped Mallya build United Spirits from a business worth perhaps £100m when he took it over from his father in 1983, but they now prevent him from making the most of his ownership of Whyte & Mackay.

Under the current sky-high barriers, United Spirits will not be able to sell its new label at prices Indian consumers can afford. And, as a politician and president of the Janata Party, Scotland's latest whisky baron is in a position to do something about it.

Meantime, it is no exaggeration to say that the entire Scottish industry, from independent distillers such as Perthshire's Tullibardine to global giants like Pernod Ricard, anxiously await the outcome. By opening up the Indian market, Mallya could deliver a half- century of ever-increasing profits not only for Whyte & Mackay but for the entire Scotch whisky industry.

"Mallya sells about 60 million cases a year of his molasses-based whisky in India compared with 80 million cases of Scotch sold worldwide," points out Michael Beamish, a director and shareholder of Tullibardine, which has increased capacity by 25% in the last few months on the back of mainly Asian demand. "If just 20 million of those 60 million cases were Scotch, it would boost the industry by a quarter."

But this is a highly political situation and industry figures are reluctant to get involved just yet. "It's very interesting but we can't say what will happen," says Chivas Brothers's chairman and chief executive Christian Porta.

However, there is no doubt that the industry could be looking at years of sustained profits out of India if it goes the same way as other Asian nations in the last five years. At this rate, by 2050 the best business in Scotland could be whisky rather than finance.

The glowing future for whisky (and probably gin) shows how old industries - in the case of whisky, one of the oldest - can survive and prosper provided they leave home. When Pernod Ricard-owned Chivas Brothers recently unveiled its £27m global marketing campaign for Ballantine's blended whisky and another campaign to revive Beefeater gin, the owners made it clear they entertained virtually zero ambitions for either of the brands in Britain.

Indeed, according to a study by International Wine and Spirits Record, by 2010 Scotch is expected to fall to second place behind vodka as Britain's most popular spirit, down by about 10.35% from the present 7.4m cases a year.

By happy contrast, Asia dominates the spirits market, accounting for 47% of consumption, while Britain accounts for less than 10% of global whisky sales.

It is a measure of the excitement in new markets, from Asia and Central America to Russia and the Baltics, that Ballantine's TV advertisement was shot in Buenos Aires with a soundtrack of Italian diva Maria Callas singing an aria set in the Austrian Tyrol. In a global campaign relying on sales practically everywhere except Britain, it is not helpful to be associated with any one country. Also, there was nobody aged over 40 in sight.

Similarly, Beefeater is pursuing 25-35-year-olds who have probably never been to Britain. The campaign is titled London Calling and features Jamie Oliver and other celebrities associated with a capital that is considered cool in important markets such as Spain, Russia and the United States.

More IWSR figures show that the world's hot spots are emerging markets. It is newly affluent Chinese who have pushed up sales of premium whisky there by 116% in the last two years and of super/ultra, the oldest dram, by over 32%. Diageo, for instance, says its sales are up by 80% in China.

The industry fervently hopes that China will continue at this rate and follow South Korea and Taiwan where premium blends and, increasingly, single malts are just about de rigueur for ambitious young executives seeking the reflected prestige of heritage brands. Overall, sales to China have rocketed from £1m to £50m in just five years with much more to come.

"There is massive potential in the Chinese malt whisky market," explains Tullibardine's Beamish. "It is in its infancy." Like other independent distillers, Tullibardine is anxious to sign up a distributor in China, hoping to do so within a month.

Other nations have joined the rush to "premiumisation" - the demand for higher-value spirits. In vodka-loving Russia, sales of premium whisky jumped by 53% and of super/ultra by 71% between 2003-2005 with the help of specially branded bars, snow golf tournaments and recitals of chamber music among other promotions.

"There is a lot of money in Russia. The move from socialism to capitalism has created many wealthy individuals who want to be seen driving the right cars, wearing the right labels and drinking the right brands," points out Andrew Sowray, Chivas Brothers's regional manager there.

Sales of premium are up 47% in Eastern Europe and the Baltics, up 38% in Singapore, Malaysia and Hong Kong, up 40% in Venezuela (and 43% for super/ ultra), and in the US up respectively by 4.5% and 20%. But, with hundreds of brands competing in emerging markets, no promising prospect can be missed, which is why Diageo and Pernod Ricard - among others - have descended on oil and diamond-rich Angola and are testing different labels there.

The general strategy is to grow different brands in each market rather than to try and Johnnie Walker-ise the world. For instance, the Pernod Ricard-owned label 100 Pipers, Edrington Group's The Famous Grouse and Dewar's are big-selling labels in Thailand, another runaway market - boosted by the world elephant polo tournament organised by Pernod Ricard.

In France, Clan Campbell sells 1.6m cases a year in part by working its heritage with the Duke of Argyll to the hilt and through sponsorship of the official after-show party for the Cesars - the French equivalent of the Oscars. Chivas Brothers's Passport is big in Spain and Edrington Group's Cutty Sark in Turkey.

But of all the opportunities around the world, India offers the most massive and almost immediate potential, as Mallya is the first to acknowledge. "The potential for premium Scotch whisky in India is enormous," he summarises. Indeed, company reports show his company last year imported 17m litres of Scotch for his home-grown blends.

At present, the top brands barely scrape a living there, in what is very much a bulk market sustained on United Spirits's labels such as 30-year-old Bagpiper, the second-biggest non-Scotch brand in the world, whose packaging features a bearded Sikh playing the pipes. As Gavin Hewitt, director of the Scotch Whisky Association, points out: "Scotch accounts for less than 1% of a 100m case spirits market."

A Chivas Brothers insider drily acknowledges: "I suppose you could say that Ballantine's exists in India." Because of the daunting levels of protection, true Scotch brands are forced into the limited market of top restaurants, nightclubs frequented by expatriates, duty-free outlets and airlines, although probably not Mallya's own Kingfisher airline which is named after his company's beer.

When the barriers come down, it is certain that United Spirits will get a head start of perhaps two years. As the industry here regretfully points out, it will be the local producers who will find their way around the tortuous bureaucracy and eccentric distribution system the quickest. "Mallya has a very rapid route to market," says one player. Thus he will be the first to capture the benefit of the lower tariffs.

However, it looks as though the industry's long and sometimes bitter fight to get into India is reaching a happy conclusion. Prodded by a determined Scotch Whisky Association, the EU will refer the matter of fair access to India to the World Trade Organisation unless tariffs come down beforehand. If they do not, the WTO should deliver a ruling on the matter by early 2008. Nobody expects anything other than a favourable verdict.

Although Mallya has plans to take Whyte & Mackay, the fourth-largest producer of Scotch behind Diageo, Pernod Ricard and William Grant, deeper into China among other markets, the home nation will be United Spirits's main priority. "This is a deal done completely for the domestic market," insists Sandeep Gill, managing director of Deloitte Corporate Finance.

As the jewel-bedecked billionaire himself implies, his purchase of Whyte & Mackay amounts to a vote of confidence in premiumisation. Put another way, in an economy that is rapidly acquiring the wealth to pursue top brands, United Spirits's Bagpiper brand just will not cut it.

Last week, Ermenegildo Zegna, the Italian maker of luxury suits, opened a store in Mumbai, reflecting the fact that India claims more billionaires than any other country in Asia. Furthermore, about 1.6m households earn £50,000 a year, quite enough to splash out on a bottle of 12-year-old Whyte & Mackay. For the ambitious spirits baron, a distillery in the industry's heartland is the essential first step to selling whisky into the premium and super/ultra categories. For the same reason, India's Tata Tea felt it had to buy Tetley.

The question now is whether there is enough Scotch for India, China and other nations thirsty for the world's most distinguished tipple. "Growth in the Asian market is huge. If long-term forecasts are right there may not be enough Scotch whisky to meet future demand," Fraser Thornton, managing director of Burn Stewart, told the Sunday Herald late last year.

Whyte & Mackay looks to be ready for that, with a bulk Scotch inventory of about 115m litres. Its new owner has signalled he will crank up production to meet expected demand in his home country. Earlier this year, Diageo, which has earmarked a marketing budget of £50m for Asia alone, announced a £100m spend on a new malt distillery at Roseisle near Elgin, an expansion of its Cameronbridge distillery in Fife where Johnnie Walker, J&B and Bell's are produced, and bottling facilities and casks. Other whisky companies have hundreds of warehouses all over Scotland packed 10 stories high with maturing barrels of whisky.

Meantime, some independents are busily adding capacity to produce more of their own-label whisky but also for the blends of others. "We've increased production by 25% in the last few months," says Tullibardine's Beamish, although that may not be enough. At present, single malts hardly make double figures in most Asian markets, but more and more drinkers are moving up from blends as they develop their palate.

"In spirits we see a shift in whisky consumption in Asia towards more malts with increasingly sophisticated drinkers," Vinexpro chief executive Robert Beynat told Drinks Business magazine recently.

The race is on to make sure that Vijay Mallya's United Spirits does not get more than rival companies regard as a fair share in those increasingly sophisticated Asian markets, starting with India.


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## Bushroda

*New Destinations Pushing The Investment Envelope* 

*Exciting new investment avenues are emerging that enable you to diversify and grow your portfolio* 

RAJESH NAIDU & RAHUL JAIN 
Posted online: Sunday, June 17, 2007 at 0106 hours IST 

The Indian stock markets, though far from being evolved, have attained a level where new developments are creating new investment trends and avenues. The investor is the one who has benefited to the hilt from the dynamics in this segment. And the upshot of these increasing dynamics has been new, innovative and tailored financial instruments like currency derivatives, weather derivatives and rainfall insurance. These new developments in the markets have created instruments that cater to the varied needs of investors. 
In fact, considering the launch of derivatives products on the Bombay Stock Exchange (BSE) in June 2000, it was a mere conjecture to assume that the stock market will see such investment instruments. More so, that assumption was rubbished and considered to be inadequate understanding of the market, since the markets didnt accomplish the peaks, which it has in recent times. 

FE Investor studies the various emerging and upcoming bouquet of financial instruments in the markets and gives insight into the technicalities involved in investing in these instruments. The reason being these instruments may be the future market-movers and momentum-creators. In a nutshell, these instruments can change the way financial instruments are looked at. 

*Commodity-linked securities* 

This instrument is yet to be launched. If you are willing to take a little risk over a longer term for getting a higher return than the conventional way, then commodity-linked securities is a good bet. But considering the Indian markets conditions, there is still uncertainty over the launch and acceptance of these securities. 

Points out Mohan Natarajan, director, Kotak Commodities, In India there are some regulatory hurdles, when it comes to new financial instruments like commodity-linked securities. And unlike India, internationally, banks are allowed to issue commodity-linked instruments. 

And if banks and other financial institutions are allowed to issue such instruments, it will stand in good stead for investors who intend to cash in on such instruments. Also, it makes tremendous sense from a corporate standpoint, considering the dependence of most companies on commodities is much higher. Companies into oil and gas, steel, aviation are the ones to name a few. And these commodities have a major effect on the earnings of the companies that can be a supplier or consumer. 

Ideally, a commodity-linked security instrument entails this: the returns on a security will be linked to the prices of a specific commodity and if the price of the commodity increases, returns will lower and vice versa. 

Currently, this instrument is privately placed and issued as capital guarantee bonds by various commodity brokerages wherein the returns are linked with any specific commodity like gold, silver or mix of both. It has zero downside risk and unlimited upside gain and also this instrument is structured according to the requirement of the client. However, adds Natarajan from Kotak Commodities, In order that this instrument be used to its potential, there needs to be listing of such instrument, and a clarity on whether NBFC should be allowed to issue such instruments or not. 

*Weather derivatives* 

The short-lived but strong and considerable impact of weather on the corporate earnings and, more specifically, on the business domain, accentuates the significance of the weather derivatives instrument in India. The instrument was launched on September 22, 1999 on the Chicago Mercantile Exchange (CME). 

Says an analyst from a leading broking firm, Weather derivatives will be of great benefit not only to niche investors but also to farmers. Also, looking at the monsoon conditions in India, farmers can reduce their risk by taking exposure in commodity futures. 

In a crude description, weather derivatives entails this: as an investor, you end up gaining a compensation for your claim of choosing the weather derivative product and lose if your claim fails to realise. 

For example, there is a sweater seller A. He, as an investor, gets a weather derivatives structured with XY subscriber, that if the winter temperature passes 19 degrees, the subscriber will pay for the losses incurred by him, due to under-selling of sweaters. However, if otherwise, the investor A will pay a premium to the subscriber. In this context, weather derivatives hold significance in India. In fact, it can be applied to rainfall, which is a more important variable. In this, a rain day (RD), defined as a 24-hour period during which precipitation was in excess of the reference (20 mm), and an index cumulating the number of RDs between June 1 and September 30 can be used to compute pay-off. 

Considering the unpredictability of monsoons in India such instruments even out any wrong tactics, which is so easily found in the markets. It is found that in the US, weather affects an estimated 20% of the economy. And in India, the figure would be higher, considering the fact that India is an agrarian country. 

The pricing of weather derivatives is an issue. One cannot buy or sell the underlying, be it sunshine or rain. Positions have to be hedged with offsetting positions and one cannot create a risk-free portfolio by combining the derivative with its underlying. 

Predictability of even large-scale weather systems beyond a week is difficult at best. Even though it is a nascent market and has not yet extended beyond the US, almost 2,000 weather swaps (private, off-exchange contracts between individual entities) with an estimated value of close to $3 billion have been negotiated. The Indian markets can follow suit. 

*Weather insurance* 

Weather insurance has been a boon in disguise for the farmer community. Whether it is protecting farmers losses occurring from low rainfall, excess rainfall, lower crop yields and bad weather condition, weather insurance has been a saver. ICICI Lombard and IFFCO-Tokyo had started this product in some areas. The product is designed for farmers who get affected by adverse weather conditions and ultimately get lower yield/earnings on their grown crops. Weather insurance can offset this problem. 

The premium is based on various parameters, studying past rainfall pattern, weather condition, and this helps in ascertaining the impact of weather on crop yields/output. The claim is settled on the basis of index. The index is created by assigning weights to critical time periods of crop growth. 

The past weather data is mapped on to this index to arrive at a normal threshold index. The actual weather data is then mapped to the index to arrive at the actual index level. In case there is a material deviation between the normal index and the actual index, compensation is paid out to the insured on the basis of a pre-agreed formula. 

*Gold ETF* 

Gold ETF (exchange traded fund) has been in the news of late. It is just like a mutual fund where you will get units on the basis of net asset value (NAV) on that day. Explains Rajiv Mehta, executive director, Benchmark Asset Management, Internationally, ETFs took time to emerge as a good investment option. However, considering the Indian markets conditions, it wont be long that these ETFs would soon be a preferred option. 

In a Gold ETF, the NAV price is directly mapped to the bullion index. A very small percentage is kept in cash or money market instruments. The minimum investment is Rs 10,000 in case of Benchmark and Rs 20,000 in UTI. 

Investing in Gold ETFs is comparatively better than buying physical gold. This is because a minimum lot size in buying physical gold is 100 gm (futures market), which costs little less than a lakh plus the risk of theft. Gold ETF is a different investment product and returns are linked to gold prices, which are derived from demand supply forces. 

And also those investors who cannot take exposure in all the stocks in a specific index can opt for the specific sector index ETF. See box Other avenues 

*Securitised paper* 

Securitised paper is analogous to the saying What goes around comes around. Currently, only institutional players participate in these papers. However, it may emerge as a new financial instrument for individual investors. It goes this way: you can come across a situation where you can get interest on your investment in a loan asset of a bank where you yourself is a borrower. Shocked? You could see this in the near future. This type of structured products is known as mortgage-linked investment product. 

The structured product will include a portfolio of borrowers of some specific category depending upon income level, location, the amount of the loan borrowed, etc. The product will be floated through a special purpose vehicle (SPV). 

Take a case, A bank has lent money to purchase a house to say 10,000 individuals having salary income with tenure of 7 to 10 years and the loan amount is between Rs 5 to 7 lakh. Such identical loan assets are clubbed together by the bank and transferred to a special purpose vehicle. This is nothing but securitisation of debt. The SPV thereafter is entitled to receive the cashflows in terms of the EMI payments from the borrowers through the bank. The loans are then sold to the investors and the SPV then pays the lender the consideration for the loan assets. Here, you, through a borrower, may actually end up buying into this loan asset at a later stage. 

This instrument being asset backed is of high credit quality long-term instrument having a fixed coupon rate because the paper/bond is backed by mortgage of the asset like house, car, bike and consumer durable. 

This instrument will help to maintain the liquidity in the banking system and to ease the high interest rates scenario, says a banking analyst from a leading broking firm. 

The interest could be paid monthly, quarterly or half yearly from the EMI coming from the borrowers. The coupon rate will naturally be lower than the loan rate to the margin. But at what rate they float instrument is a thing to watch out for. 

*Real estate mutual funds* 

An increasing interest in the real estate sector has made sure the emergence of new lucrative opportunities for investors. A case in point is the Real Estate Mutual Funds (REMFs), a new emerging financial instrument. The huge funds that are entering the real estate market were bound to cause a stir in an already booming sector. A slew of real estate funds promoted by both foreign and Indian financial institutions are competing to invest in the higher return segment. 

Some of the prominent companies promoting real estate funds in India are HDFC Property Fund, DHFL Venture Capital Fund, Kotak Mahindra Realty Fund, Kshitij Venture Capital Fund (a group venture of Pantaloon Retail India) and the ICICIs real estate fund, India Advantage Fund. Regulated under Sebis venture capital funds, these are closed-ended schemes with an initial public offer (IPO) contributing to a discount on net asset values (NAVs). 

Moreover, there is also a long list of international investors, like US-based Warburg Pincus, Blackstone Group and JP Morgan Partners to name a few, pumping in foreign funds in India. 

The 10th Five-Year Plan ending in 2007 has proposed that Securities and Exchange Board of India (Sebi) would regulate the real estate mutual funds in India. These can invest in real estate in India directly or indirectly. Sebi would introduce the real estate mutual funds (REMFs) as close-ended units and list in the stock markets. 

Globally, REMFs are also known as Real Estate Investment Trusts (REITs). The REMFs or REITs once introduced in the country are expected to bring in more liquidity and heighten the organisation level of the emerging real estate market in India. 

REMFs are to be introduced in India following their success stories in some major economies like the US, the UK, Japan, South Korea, Singapore, and Hong Kong. These shall lessen the tax burden on entities by exempting corporate and capital gains tax. According to reports, at least 90% profits from REITs are distributed as profits through dividends. In fact, instruments like these, if regulated and fostered with greater-good-for-all rules, bring in more success stories of investment. 

More so, in the context of Indian markets it holds paramount importance. The reason being, with the economy growing along with the surge in the income level, instruments like these can prove to be judicious destinations for parking hard-earned money. 

But in this whole plethora of varied financial instruments, in order to avoid any eventuality, you need to employ culling strategy in the selection of varied financial instruments along with sifting of your investment objectives.


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## Adux

*India's investment in US surpasses $2 bn in 2006-07 *

Sunday, June 17, 2007
12:22 IST

Blog this story



New Delhi: Indian companies invested over $2 billion in the US in 2006-07 and completed a total of 48 deals with the firms there, says a report. 


The IT and ITES (IT-enabled services) industries have accounted for 48 per cent of the 48 deals, including mega deals taking place in other sectors such as pharma, hospitality, agro products and automotive industry among others, according to a study jointly done by the Federation of Indian Chambers of Commerce and Industry (FICCI) and global professional services firm Ernst & Young. 


Indian outbound deals crossed $15 billion in 2006 and it is expected that by 2007, the value could surpass $35 billion. Also, during the first nine months of 2006, Indian companies have announced 115 foreign acquisitions worth $7.4 billion, a seven-fold increase since 2000. 


According to the report, the companies that have clinched the top five deals during the period are Tata Tea, ONGC Videsh, Tata Coffee, Indian Hotels and HOV Services. 


"Over the last decade, Indian companies belonging to diverse industries have been gradually gearing up to become emerging multinationals. Leveraging the nation's comparative advantage of knowledge, Indian companies have grown through acquisitions, built best-in-class competency and become large-scale players," the report says. 


It also stresses on the fact that Indian investments abroad are not always done by large business conglomerates but are largely driven by several of small and medium enterprises. 


One of the main factors that have acted as a catalyst for such enormous deals is the growing confidence among Indian companies coupled with the willingness to take risk. 


Also, India Inc is now well-equipped to acquire overseas companies because of the regulatory development that has taken place due to the government's liberal measures and various monetary relaxations provided by the Reserve Bank of India (RBI) with the growth of foreign exchange. 


In the BPO (business process outsourcing) space, the report said, Indian companies are now increasingly opening up units in the US providing opportunities of large-scale employment there, giving rise to a 'reverse outsourcing' trend.


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## Neo

*Major firms eyeing expanding biotechnology sector​*By Anand Kumar

INDIAS biotechnology (BT) sector, which shows immense potential for growth, continues to expand at a hefty pace.

Earlier this month, some of the biggest names from the sector, both within India and from abroad, gathered in Bangalore  the Silicon Valley of India  for their annual love-fest.

The countrys BT potential has been spoken of in awe by industry insiders for years, but unlike the phenomenal growth of the information technology (IT) sector, there has been little headway so far, in terms of high-profile companies, major export orders, mergers and acquisitions, venture capital funding and the like.

India is also facing an acute shortage of trained personnel, and though there has been a mushrooming of scores of institutions offering biotechnology courses, there is a massive shortage of teaching faculty and experienced mentors.

Many state governments  notably the two southern ones, Karnataka and Andhra Pradesh, and Maharashtra in the west  have been offering incentives to attract the BT industry.

But for all the hype that has been built around the sector, it has only now reported total revenues of a paltry $2 billion  in contrast, the top three IT firms, TCS, Wipro and Infosys, are pushing ahead aggressively, with annual revenues of $4.3 billion, $3.5 billion and $3.1 billion respectively. Total IT industry revenues add up to a whopping $47.8 billion.

BT industry leaders, however, feel it is unfair to compare it with the more successful IT sector, which has had a head-start of nearly 20 years. BT industry revenues have doubled in a short span of two years; total revenues were around a billion dollars in fiscal 2004-05.

Kiran Mazumdar Shaw, the doughty chairwoman and managing director of Biocon India  and the chief spokesperson for the industry  is confident that the sector is on the right track to achieve the targeted turnover of $5 billion by 2010. According to Shaw, the bio-pharma sector accounted for $1.4 billion of the total revenues, while bio-services and bio-agri sector added about $250 million each. While the overall BT sector expanded at about 30 per cent, bio-agri saw a growth of 50 per cent.

Investments into the BT sector almost touched the $600 million mark, with Bangalore alone attracting investments of $245 million during financial year 2006-07 (ending March 31, 2007).

International consultancy Ernst & Young has ranked India number three, behind Japan and South Korea, in terms of biotechnology potential in the Asia-Pacific region.

According to Shaw, the biotechnology industry in India is gaining critical mass. Indias cost and skill base is supporting affordable drug development. The country is also gaining global leadership in BT (bacillus thuringiensis) cotton, and thanks to farmers adopting the genetically modified seed, India has emerged from a net importer of cotton to a net exporter in a short span of just a few years.

INDIAS high-tech capital, Bangalore  which is also the capital of Karnataka  continues to hold sway in the biotechnology sphere. The government is promoting a sprawling BT park, the Bangalore Helix, which has already started attracting the attention of international firms.

According to government sources, over a dozen international companies made inquiries about the park, coming up near the Electronics City, another showpiece, which is fast developing on the outskirts of Bangalore. The first phase of Bangalore Helix is expected to be operational from next month, and will house the Centre for Human Genetics and the Institute of Bioinformatics and Applied Biotechnology.

The entire project is expected to be ready in about five years, and will ensure Karnatakas lead in the BT sector. The state already accounts for more than half of Indias BT revenues, and there are nearly 200 firms involved with BT operating out of Bangalore.

Companies like Biocon  based in Bangalore  are busy signing agreements with international partners. It recently signed a memorandum of understanding with the Deakin University, Victoria, Australia, for joint multi-disciplinary research focused on BT and biosciences.

According to Crispin Kirkman, managing director, Emerging Technologies Network Agency, UK, the opportunities for Asian and Indian companies in the biotechnology sector are immense. The key to their success is their ability to retain their cost advantage while matching the quality standards of the west.

India, he points out, is an increasingly attractive destination for R&D activities in the pharmaceutical and biotechnology industry. Western companies are looking to partner with Indian companies because of their low cost, flexibility, high proficiency in health care and science, and excellent talent pool, adds Kirkman.

The biotechnology (or life-sciences) business has of course attracted all the top Indian corporates. The Tatas, Reliance Industries and the Aditya Birla group have set up separate life-sciences divisions and groups to take advantage of the expected explosive growth in the sector.

All these three top business groups aim to focus on research and development, which could lead to global patents on new drugs. Reliance Life Sciences has filed over 200 international patents on various innovations, and recently acquired UK-based biotech start-up, Genemedics. Reliance has also gone in for strategic investment in a US-based BT fund.

The Tatas have also been investing in research firms, including Avesthagen and Advinus Therapeutics, both of Bangalore, and Indigene Pharma of Hyderabad. The Aditya Birla group is also focussed on R&D in the BT arena.

THE most significant gain recorded by the BT sector has been in cotton production. Finance Minister P. Chidambaram wants the industry to replicate the success in the area of food crops, which would help make India self-sufficient.

Emphasising the importance of BT in agriculture, Chidambaram told scientists that what has been done with Bt cotton must be done with foodgrains. Referring to the opposition to the use of genetically modified seeds and produce by some environmentalists, Chidambaram says these are issues that need to be tackled by scientists, and not brushed aside by emotion and political arguments.

K.K. Narayanan, president, Association of Biotechnology-led Enterprises (ABLE), who is also managing director of Metahelix, an agri-biotech firm, points out that Indias cotton production soared from 14 million bales in 2002 to 27 million bales last year, thanks to BT.

From being a net importer of cotton, India emerged as a net exporter in a short span of three years. Yields have gone up from 300 kg a hectare to 500 kg at present. And India has also surpassed China as the country with the largest acreage of Bt cotton  9.5 million acres  points out Narayanan.

Metahelix, which has launched transgenic seeds for wheat and vegetables, is also active in contract R&D, and has obtained early stage funding from venture capital funds.

India is today the worlds third largest producer of cotton, and production is expected to grow by seven per cent in the new season beginning October. Industry analysts expect total cotton production to reach 28 to 29 million bales next year.

Indias cotton exports have soared to 4.7 million bales, with China being the major consumer. The use of genetically modified seeds has helped improve the quality of Indian cotton as well.

The agriculture sector in India has been seeing anaemic growth in recent years. At a time when the services and manufacturing sectors have grown by 13 per cent and 12 per cent respectively, agriculture has been plodding at a mere 2.3 per cent. Indias gross domestic product (GDP) grew by 9.4 per cent in the year ended March 31, 2007.

BT has had a tremendous impact on one crop  cotton  in recent years. The BT industry believes there is enough scope to repeat a similar success story in other crops and even food grains.

http://www.dawn.com/2007/06/18/ebr12.htm


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## Neo

*Is India a closed-door economy?​*PRITI PATNAIK

MONDAY, JUNE 18, 2007 

NEW DELHI: The brouhaha over large capital inflows, particularly into the stock markets, may be unfounded. Even as finance minister P Chidambaram calls for greater maturity in handling large capital flows, India remains one of the more closed economies compared to other Asian countries. Data sourced from Unctad, which measures FDI openness in terms of FDI stock as a percentage of GDP, shows that for India the figure was just 5.5% compared to Pakistan or Indonesia, where FDI constituted at least 7% of GDP. Hong Kongs FDI stock stood at nearly 300% of its GDP in 2005. 

Indias FDI openness increased 10-fold from 0.5% in 1990 to 5.8% in 2005. However, this is still much lower than other emerging market economies in Asia, including China, the report says. 

FDI flows have been determined by several push and pull factors, including strong global growth, soft interest rates in home countries, a general improvement in the risks associated with emerging market economies, greater business and consumer confidence, rising corporate profitability, large-scale corporate restructuring, sharp recovery of asset prices and rising commodity prices. 

According to RBI, the indicators of Indias openness are merchandise trade, trade of goods & services and gross capital transactions. Comparing FDI stock as a percentage of GDP is fair because it shows the amount of foreign participation in the economic activity of a country, said an analyst. Though our capital market is booming, qualitatively, there is much to be desired, he added. If India had to keep pace with China, the economy should have received about $30 billion of FDI two years ago. 

FDI equity flows are expected to touch $30 billion by March 2008, almost doubling from the previous year, commerce minister Kamal Nath said recently. FDI in 2006-07 stood at $16 billion, the highest ever. 

Last week, Mr Chidambaram had said, All the developed economies are either fully convertible or nearly fully convertible. So if we aspire to be a developed country, we must learn to manage fully convertible or nearly fully convertible capital account. The only way to manage large inflows is to evolve policies that will encourage large outflows too. If inflows and outflows are equally large, then it is manageable, he had said. 

RBI deputy governor Rakesh Mohan said opening up the capital account meant market participants needed to be better able to absorb greater volatility and shocks. In the context of progress towards further capital account convertibility, the market participants are going to be faced with increased risks on multiple accounts: volatility in capital flows, volatility in asset prices, increased contagion and the ability of legacy institutions in managing risks, he said. 

On an average, Indias share was 24% of the total portfolio flows to all developing countries during 1999-2005. Foreign investors were betting on Indian stocks and net portfolio flows stood at $12.2 billion in 2005, almost double the FDI figure at $6.6 billion. 

http://economictimes.indiatimes.com...a_closed-door_economy/articleshow/2129760.cms


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## Neo

*Sony Ericsson to set up R&D unit ​* 
MUMBAI: Mobile phone maker Sony Ericsson said on Wednesday it is setting up a research and development unit in India to strengthen its position in the worlds fastest-growing mobile market.

Sony Ericsson began selling cheap mobile phones in India in Januaugh manufacturing agreements with Flextronics and Foxconn and has a production target of 10 million units by 2009.

Establishing a development facility in India, along with manufacturing, gives us a strong foothold for generating future growth, Sudhin Mathur, general manager for Sony Ericsson India, said in a statement. No financial details were disclosed.

Sony Ericsson, a joint venture between Japans Sony Corp. and Swedish telecom equipment maker Ericsson had more than doubled its share of the Indian market, the statement said without specifying the share.

The India unit will develop innovations that have worldwide appeal as well as for the Indian market, the company said.

The unit in the southern city of Chennai will be headed by Anders Grynge, who was previously at its R&D centre in Sweden.

Sony Ericsson said it also has R&D units in China, Japan, Sweden, the Netherlands, the United States and Britain.

http://www.thenews.com.pk/daily_detail.asp?id=61298


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## Neo

*Nissan-Renault boss eyes $3,000 car in India ​*
TOKYO: Carlos Ghosn, head of Japans Nissan Motor Corp and Frances Renault, said Wednesday the automakers were considering launching a low-cost 3,000-dollar car in India. 

Ghosn said he saw ready opportunities in India, which is one of the worlds fastest growing automobile markets, on the back of a burgeoning middle class. 

We are investigating at the level of the alliance this is a common work made Renault and Nissan how can we make a 3,000 dollar car, Ghosn told reporters after a Nissan shareholders meeting in Yokohama. 

The very likely situation is, if we build a car like this, it will be done in India because the suppliers are there, the plants will be there and the environment in India will be very favourable to a frugal product definition. afp

http://www.dailytimes.com.pk/default.asp?page=2007\06\21\story_21-6-2007_pg5_24


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## Neo

Thursday, June 21, 2007 

*Kingfisher lines up $7 billion Airbus order​*
LE BOURGET: Indias Kingfisher Airlines said on Wednesday that it had signed a preliminary sales agreement to buy 30 long-haul Airbus planes and 20 small aircraft worth 7.0 billion dollars (5.2 billion euros). 

The deal, an intention-to-buy agreement, was signed by Kingfisher chairman Vijay Mallya for 15 midsized A350 airliners, 10 A330s, five A340s and 20 single-aisled A320s. 

Our strategy at Kingfisher is to open new long-haul routes and expand existing ones, said Mallya in a statement. 

With the A340-500 and then the A350 XWB we will be able to offer direct routes between India and the United States for example. 

The A330 will allow us to expand services to Europe and the A320s will help us to meet demand in our home region. 

The order for the mid-sized longhaul A350 was particularly welcome for Airbus, which is hoping to establish the plane as a rival to the extremely popular Boeing 787 Dreamliner. 

Kingfisher have reaffirmed their faith in the A350 XWB and we are delighted with this, said Airbus sales director John Leahy. afp

http://www.dailytimes.com.pk/default.asp?page=2007\06\21\story_21-6-2007_pg5_27


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## joey

> *Moser Baer lines up Rs 2,000 crore funds for FAB City*
> 
> KVVV CHARYA
> Posted online: Wednesday, June 13, 2007 at 0048 hours IST
> 
> 
> 
> HYDERABAD, JUN 12: CDs, DVDs and floppy disks major, *Moser Baer India Ltd mulls to set up its proposed solar photovoltaic cell making unit in Fab City*, Hyderabad, according to the official sources.
> 
> Moser Baer chairman and MD Deepak Puri had recently met the chief minister YS Rajasekhara Reddy and sought his support for the project. The company has sought about 75 acre land in the Fab City and plans to make an investment of about Rs 2,000 crore in the next one year. It is targeting a capacity of 80 mw by 2007.
> 
> Confirming the development, the states industry secretary B Sam Bob said, We have asked the company to submit its business plan, accordingly a decision will be taken soon.
> 
> Besides the land, the company has evinced interest in joining the Fab City SPV project, which will develop the required infrastructure for the Fab. Moser Baer India had recently altered its Objects Clause facilitating the company to act as developer. Considering the special status the company had accorded for entering renewable energy sector, it is planning to develop an SEZ with upstream and down stream companies.
> 
> http://www.financialexpress.com/fe_full_story.php?content_id=166997



For peoples who dont know Moserbaer is a Indian company and accounts for 20 to 30% of world CD market OEM's, They are the first recently to make 8x or 16x Double sided blue ray disc IIRC.

Their DVD blank medias are of the best quality you can get in India, not even sony comes close.


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## Neo

*Japan plans exorbitant investment in India ​* 
TOKYO: Japan is planning to invest billions of dollars in India through private funds and government loans to improve infrastructure in the rapidly growing economy, an official said on Friday.

Details will be announced when Japans Economy, Trade and Industry Minister Akira Amari visits New Delhi and Mumbai from June 30 through July 4, an official at his ministry said.

He will be joined by more than a dozen executives of big Japanese companies, led by Osamu Suzuki, chairman of Suzuki Motor Corp., a top player in Indias burgeoning auto market.

The investment plan is part of Indias own project of constructing infrastructure so the precise figure for Japanese investment depends on India, the official said on condition of anonymity. But it will total in the billions of dollars.

Japan has been trying to build closer political relations with India, in part to counter frequent rifts with China, but Japans trade with China far surpasses its investment in South Asia.

The investment plan follows up a general agreement signed in December between Japanese Prime Minister Shinzo Abe and his Indian counterpart Manmohan Singh on working together on a Delhi-Mumbai Industrial Corridor.

The corridor plan would build a high-speed rail network between Indias two largest cities and develop sea ports on the west coast, with infrastructure built along the route.

Singh said in October that India needed to spend 320 billion dollars by 2012 to improve its creaking infrastructure in order to accelerate economic growth and tackle poverty.

During his stay in India, Amari will meet Singh and also Indian Commerce Minister Kamal Nath to discuss deadlocked global trade talks and negotiations on a free trade deal between New Delhi and Tokyo.

http://www.thenews.com.pk/daily_detail.asp?id=61549


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## Neo

*Auto demand boosts CNG prospects in India​*
MUMBAI, June 22: Indian energy firms are stepping up spending on compressed natural gas (CNG) infrastructure to meet soaring demand from vehicle makers, but poor facilities may hamper gas adoption in the near term, analysts say.

India ranks fifth in the world for vehicles running on CNG, which is half the price of petrol or diesel.

But CNG is offered at only about one per cent of India's 35,000 retail outlets, in sharp contrast to neighbouring Pakistan where CNG is widely used and on offer at nearly 1,400 gas stations.

However, its demand along with piped gas in households is forecast to more than treble to 7 per cent of total gas demand in the next five years, according to KPMG.

India's third-largest car maker Tata Motors Ltd. has introduced a CNG model and even luxury car maker DaimlerChrysler is looking to get into the segment.

The actual problem right now is that CNG availability is restricted to cities, said Dilip Chenoy, director general of the Society of Indian Automobile Manufacturers. But as the spread of CNG infrastructure increases, perhaps the shift to CNG variant vehicles will be imminent, he said.

Leading energy firms are pouring money into gas distribution across India with state-run gas transporters GAIL (India) Ltd. and top private firm Reliance Industries Ltd pledging nearly $7 billion each to set up gas infrastructure, including city gas distribution projects such as CNG outlets.

Smaller gas transporters such as UK-based BG Group's Gujarat Gas Co. Ltd, Indraprastha Gas Ltd, Mahanagar Gas Ltd and Adani Energy Ltd have also lined up multi-million dollar investment to sell natural gas across India.

But this infrastructure may take up to five years to be operational and as a result CNG penetration is slow to catch on.

We have to accept that availability of natural gas is localised right now and is a bit of a problem, said Bhashit Dholakia, general manager at Adani Energy. But things will improve once new pipelines are set up and projects by companies like Reliance start taking shape.

India, Asia's third-largest oil consumer, imports 70 per cent of its oil and is encouraging use of natural gas to lower pollution and cut its import bill as the booming economy boosts energy demand among its 1.1 billion people.

KPMG expects at least 30 cities to embrace CNG, which costs half the price petrol and diesel, compared to a handful of large cities and smaller towns in a few states at present.

The fuel is mainly used by public transport services such as three-wheeled auto rickshaws, taxis and buses, after environmental laws were introduced in recent years.

India produces 95 million standard cubic metres of gas per day (mmscmd), which the government expects to rise to more than 190 mmscmd by 2009 after a series of gas finds off the east coast come on stream.

Goldman Sachs estimates the share of natural gas in India's coal-dominated energy basket will double to 18 per cent by 2015 -- still less than Pakistan where natural gas is more than 50 per cent of the energy basket.

We expect this will mainly come at the expense of oil, the share of which is likely to fall to 25pc from 30 per cent during the same period, Goldman said.

Analysts say CNG fuels 2-3 percent of all cars sold now but they see this segment as the fastest-growing in terms of fuel options in India's rapidly expanding vehicle industry. Only eight in every 1,000 Indians currently own car.Reuters

http://www.dawn.com/2007/06/23/ebr19.htm


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## Neo

*Worries about Indian rupee getting stronger​*
By Anand Kumar

INDIAS strong economy, with gross domestic product (GDP) having expanded by 9.4 per cent in the year ended March 31, 2007, foreign exchange reserves overflowing at nearly $210 billion and inflation well under control should have pleased government leaders, central bankers and economists.

But the rising strength of the rupee against the dollar has set alarm bells ringing at the headquarters of the Reserve Bank of India (RBI), the countrys central bank, here, and also at the Union Ministry of Commerce in Delhi. Exporters are warning the government of a disastrous performance this year, if the rupee is allowed to head northwards.

The Indian currency has been gaining strength on the back of ceaseless inflow of foreign exchange. For the year ended March 31, foreign direct investment (FDI) nearly tripled to $15.7 billion. Commerce Minister Kamal Nath expects FDI to double this year to $30 billion.

Indian companies are on a fund-raising spree abroad to finance their domestic expansion and even their overseas acquisitions. ICICI Bank is raising a record $4.3 billion, both in India and abroad, to fund its activities. Real estate giant DLFs recent initial public offering (IPO) was over-subscribed by 3.5 times, and the company hopes to raise record sums.

Foreign institutional investors (FIIs) have been pouring funds into the country, wanting to subscribe to the IPOs. The RBI, meanwhile, is fighting a losing battle against the rupee, which continues its northwards march.

Last month, the rupee broke a nine-year record, peaking at 40.28 against the dollar. Last week, it closed at around 40.7. The currency has gained by 8.5 per cent so far this year, and there are no signs of a slowdown. Analysts are predicting the rupee would break the 40 barrier, even heading to 39 over the next few weeks.

Exporters are crying hoarse, while importers are merrily acquiring consumer goods. This has widened the trade gap to a record $7 billion. The commerce ministry has set a target of $160 billion for merchandise exports in the current fiscal (2007-08) and $200 billion for the next fiscal. For the year ended March 31, 2007, Indias exports touched $125 billion.

But with the strong Indian currency, exporters are worried that the targets would be missed. They have been petitioning the government for further incentives, and Commerce Minister Nath has already recommended a series of breaks for exporters. The finance ministry has yet to give the final clearance.

The commerce ministry wants to introduce a scheme that would refund taxes and levies to industries that have no import obligations to offset the gains of the rupee. Nath has sought Prime Minister Manmohan Singhs intervention.

The textile and apparels sector has been the worst hit by the rupees gains. Textile exports have slipped by nearly 6.5 per cent over the past few months, and are declining sharply.

For the first time in several decades, Indias textile exports to the US have recorded negative growth in value terms. Though Indias apparel exports to the US rose by 7.5 per cent during the first three months of 2007, in terms of value it declined by nearly half a per cent. The last six months has seen a sharp 40 per cent deceleration in textile exports.

For the year ended March 31, 2007, apparel exports declined by 2.1 per cent, as against gains of nine per cent in the previous fiscal, and 27 per cent in 2005. Indias bigger rival, China, saw textile exports to the US soar by 31 per cent in value terms. The currencies of other major textile exporters have also remained weak, boosting their exports: Pakistans currency fell by 1.3 per cent (against the US dollar), Sri Lankas by 5.5 per cent, and Indonesias by 2.3 per cent. Consequently, their textile exports have seen gains in volume terms.

Textile and garment exporters bodies have sought far-reaching benefits from the government. The Confederation of Indian Textile Industry has urged the government to intervene in the matter and to help exporters. A delegation of textile and garment exporters, organised by the Federation of Indian Exporters Organisation, last week told the government to reimburse transaction costs and local taxes, and to reduce interest rates to offset the adverse impact of the appreciation of the rupee.

According to a spokesman of the Textile Export Promotion Council, the concessions being sought by the industry are WTO compatible, and other exporting countries would have no grounds to oppose them.

Textile and garment exporters have had to go in for a drastic revision in their export targets from $50 billion to $25 billion, for the year 2012. Similarly, exports are unlikely to meet the target of $11 billion in the current fiscal, and may end up at $9 billion. Nearly two million workers are likely to lose their jobs because of the setback in exports caused by a hardening rupee.

Vijay Agarwal, chairman, Apparel Export Promotion Council, points out that apparels exports growth has slowed down dramatically, and will be pegged at under-eight per cent in the current fiscal, as against 30 per cent growth seen last year. Many exporters will have to shut shop, he has warned the government.

Ironically, while Indian textile and garment exporters are in the doldrums, international brands are bullish about the domestic market here. All the top international labels are aggressively expanding their market share in India, opening new retail outlets and tying up with local partners.

International brands are expanding their presence in India thanks to the buoyant economy and the phenomenal growth in compensation in several industries including IT, ITES, healthcare, hotels and tourism, aviation, automobiles and entertainment. The booming services sector, especially in cities like Mumbai, Bangalore, Delhi, Chennai, Hyderabad and Pune, has resulted in hundreds of thousands of young Indians splurging on branded clothes.

The Indian government has also liberalised rules relating to FDI in the retailing sector, enabling international brands to set up exclusive showrooms for single brands. Foreign brands are now either setting up exclusive outlets, or opting for the franchising route. Brands like Armani, Benetton, De Witte Lietaer, Esprit, Jockey, Marzotto, and Vincenzo Zucchi have opted for collaboration with local partners, while Benetton, Lacoste, Levi Strauss, Mango and Marks & Spencers have gone the franchise way.

Earlier this month, Hyderabad got its first Crocodile Store at the Hi-Tech City. According to P. Sundararajan, managing director, Crocodile Products Pvt Ltd, the last six months have seen a 30 per cent top-line growth for the company.

Bangalore, the IT hub of India, has also seen dozens of international brands setting up outlets, catering to the booming consumer market. NEXT, Guess, The Body Shop, MAC, Mango, Springfield, Boss, Mont Blanc, Esprit, Marks and Spencer, Kipling, Kappa, and Bossini are among the international fashion brands that have set up shop in the city in recent months.

Scores of new shopping malls are also being built at a frenzied pace in Bangalore to meet the growing demand from international fashion brands for retail space. According to analysts, Bangalore has overtaken even Mumbai and Delhi in terms of new international brands that are opening showrooms.

But Indian textile companies are also acquiring firms abroad. Flush with funds, many have been aggressively scouting for companies, both in Europe and the US. Welspun has bought Christy of the UK, GHCL has acquired Rosebys of the UK and Dan River of the US, Malwa Industries has bought Emmetre of Italy and Third Dimension of Jordan, while Alok Industries has acquired the UKs Hamsard.

http://www.dawn.com/2007/06/25/ebr11.htm


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## Neo

*India doling out aid to boost quality tea output ​* 
GUWAHATI, India: India on Monday began distributing $1.2 billion in aid to help tea planters facing a decade-long slump in tea prices caused by stiff competition in the global market. The package, first announced last May, aims to boost Indias production of high-quality tea to increase exports and fend off challenges from new tea-growing countries.

More than 50 per cent of the total project money would be utilised for replanting and rejuvenating almost all the 800 tea plantations in Assam, said junior commerce minister Jairam Ramesh in Assams main city Guwahati.

The minister on Monday handed out Rs480 million to 82 tea estates in the northeastern state the heart of the countrys tea industry which grew more than half the 955 million kilograms (2.1 billion pounds) India produced in 2006.

The countrys $1.5 billion tea industry has been in crisis since 1998, with prices and exports dropping because of a glut in the world market, forcing 70 of Assams 800-plus tea gardens to close down. 

http://www.thenews.com.pk/daily_detail.asp?id=61919


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## Neo

*India market boom makes analysts scarce, costly ​* 
MUMBAI: Indian fund managers and brokerages face a severe shortage of analysts as talent is snapped up by big-spending foreign firms lured by a four-year bull run in the local stock market.

International financial firms are paying analysts twice as much as their domestic peers, people in the industry say, with smaller brokerages worst hit as they are squeezed by higher wage bills and falling commissions as Internet broking grows.

Foreign players come with a huge capital and a capacity to sustain losses for three to five years, said Nirmal Jain of India Infoline, a financial services firm. Global houses such as Morgan Stanley, Lehman Brothers, Goldman Sachs and Credit Suisse have been ramping up operations in India, while others like German insurer Allianz have said they may launch asset management services in India.

Last month, J P Morgan hired equity analysts away from Citigroup and local brokerages Kotak Securities and Stratcap Securities. Local brokerages are forced to pay top dollar to fight back. India Infoline last month paid Rs440 million ($10.8 million), nearly twice its January-March quarterly profits, in joining bonuses for four senior executives from CLSA.

Salaries for analysts with up to 10 years experience have nearly trebled in the last three to five years, said Vasudeo Joshi, head of institutional equities at Man Financial. But that has not deterred foreign firms, for whom Indian analysts are relatively cheap as their salaries are below international levels.

Fund managers in India, on the other hand, are paid almost as much as their counterparts in Hong Kong. Salaries of Indian bankers and fund managers have been on the rise for several years but the rate began accelerating last year. Experienced analysts in India now earn Rs2-4 million ($50,000-$100,000) a year, twice as much as they earned three years ago, but only a fraction of the compensation packages for senior analysts at major brokerage houses in Hong Kong, who make $400,000 to more than $1 million in some cases.

At the entry level, annual salaries in India have doubled to between 300,000 and 500,000 rupees in three years but are still far below Hong Kong, where the total compensation can be as much as $150,000-$175,000, industry players say.

Demand for analysts has soared in step with the stock market boom, which saw Indias main index rise 73 per cent in 2003, 13 percent in 2004, 42 per cent in 2005 and nearly 47 per cent in 2006. It is up 5 per cent so far this year.

For the requirement of five people in the research industry, the availability is only two people, said a senior analyst, who resigned as head of institutional equities at a brokerage to join another company last month.

India had just 302 active chartered financial analysts as of May 1, according to the CFA Institute. Everyone is looking for ready-made talent. There is very little fresh talent in the market today, so we have to make do with the available stock, said K Sudarshan of EMA Partners, a placement agency.

The skills shortage is felt beyond the financial sector, even though India churns out 3 million university graduates a year. Software industry body NASSCOM says members face a shortage of qualified staff, pushing up wages by 10-15 per cent a year.

Deepak Jasani of HDFC Securities says that to deal with the skills shortage, brokerages are offering higher salaries and employing fresh graduates and training them. Some analysts say plum jobs are available only for sector specialists and some brokers complain analysts often fail to provide quality research to justify their cost.

The industry is quite volatile, it is a high-risk, high-reward game. In good times you will get much higher salary and higher compensation, but when the times turn bad you may find it difficult to sustain your job as well, Infolines Jain said.

Analysts say smaller brokerages are also challenged by Internet broking, which accounts for 12 per cent of market volumes but is likely to rise to a quarter in three years. Wage inflation is on the rise but the commission rates are falling, so booking profitability for the second-tier and third-tier brokers is under pressure, said Man Financials Joshi.

Commissions for trades over the Internet are much lower than traditional broking and competition is rising as many big firms are entering this market, brokers say. Internet broking has doubled each year since the last few years while the market has been growing at 20 per cent. The impact of it is seen but will be felt much more as it begins to gather momentum now, Jain said. 

http://www.thenews.com.pk/daily_detail.asp?id=61913


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## Neo

*Saudi-Indian trade crosses $9.87 billion​*
RIYADH, June 26: Bilateral trade between India and Saudi Arabia crossed $9.87 billion in 2006.

Highlighting the growing strategic and economic relations between the kingdom and India, the Indian consul-general in Jeddah, Ausaf Sayeed, said: India is the sixth biggest investor in Saudi Arabia with investments, totaling $1.2 billion, compared to $250 million just three years ago.

Indian economic offensive seems to be finally paying off. Indian companies, such as Wipro, Satyam Computers, TCIL Saudi Co Ltd, TCS, Tata Motors and L&T have started their projects in the kingdom. Likewise, Saudi companies have started 49 projects in India and another 50 have been approved, he emphasised.

Around 3.7 million Indian nationals live today in the six GCC countries and send home about $8 billion annually. More than 1.5 million Indians are employed in Saudi Arabia alone.

http://www.dawn.com/2007/06/27/ebr9.htm


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## joey

Go Japan!! They are one of our our closest friends in thought level these days, the delhi-mumbai trade corridor will be funded by them which will itself cost over billions of dollar which will pump huge trade turnover well over hundreds of bn $'s, a Delhi-Mumbai fast corridor is unthinkable what it can do...


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## Bushroda

*India's strong rupee*
Jun 27th 2007
From the Economist Intelligence Unit ViewsWire

*An enviable problem to have*

The Indian rupee has appreciated by nearly 10% since late 2006, posing an acute dilemma for Indian policymakers. In some ways, the present strength of the currency, which is now hovering just above the symbolic Rs40:US$1 mark, is an enviable problem. It suggests that the country's attractiveness to foreign investors is increasing and signals optimism about the Indian economy more generally. However, the concerns of exporters, who are part of India's economic resurgence, are rising as their goods become more and more expensive for overseas buyers.

The recent strengthening of the rupee is a dramatic departure from past trends. The currency depreciated steadily for a decade after being floated in 1993, dropping from an average annual rate of Rs31.37:US$1 in the 1993/94 fiscal year (April-March) to Rs48.40:US$1 in 2002/03 (an average annual depreciation of nearly 5%). Between 2003/04 and 2005/06, however, the rupee appreciated against the dollar by 3% on average a yearalthough there was considerable two-way movement of the rupee from month to month. The trend of steady month-on-month appreciation began in September 2006 and has been continuous since then. The average rupee-US dollar rate in May 2007 was the lowest since 1999/2000.

Although the rupee-US dollar exchange rate has the greatest impact on the Indian economy and business sector, the rupee has also appreciated against other currencies. In January-May 2007, the rupee's value in terms of pounds, euros and yen rose by 8%, 6.9% and 11.2%, respectively. During 2005/06, 86% of Indian exports and 89% of imports were invoiced in US dollars, according to the Reserve Bank of India (RBI, the central bank). The euro was a distant second, with shares of 8% in exports and 7% in imports.

*Explaining the rupee's appreciation*

The main reason for the rupee's appreciation since late 2006 has been a flood of foreign-exchange inflows, especially US dollars. The surge of capital and other inflows into India has taken a variety of forms, ranging from foreign direct investment (FDI) to remittances sent home by Indian expatriates. In each case, the flow seems unlikely to slacken. The main impact of these various types of flows is as follows:

* FDI. India's stellar economic growth has created a large domestic market that offers promising opportunities for foreign companies. Moreover, the country's rising competitiveness in many sectors has made it an attractive export base. These factors have boosted FDI; in 2006/07 FDI amounted to around US$16bn, almost three times the previous year's figure. More than half of these inflows arrived in the final four months of the fiscal year (December 2006-March 2007).

* External commercial borrowings (ECBs). Indian companies have borrowed enormous amounts of money overseas to finance investments and acquisitions at home and abroad. This borrowed money has returned to India, boosting capital inflows. India's balance-of-payments data (available to December 2006) reveal that inflows through external commercial borrowings (ECBs) amounted to an enormous US$12.1bn during April-December 2006, a year-on-year jump of 33%. The flood of borrowed money is likely to grow in 2007. In the first three months of the year, Indian companies notified the RBI of plans to raise nearly US$10bn in overseas debt.

* Foreign portfolio inflows. India's booming stockmarket embodies the confidence of investors in the country's corporate sector. Foreign portfolio inflows have played a key role in fuelling this boom. Between 2003/04 and 2006/07, the net annual inflow of funds by foreign institutional investors (FIIs) averaged US$8.1bn. Trends during the first five months of 2007 indicate that this flood is continuing, with net FII inflows amounting to US$4.6bn. Another major source of portfolio capital inflows has been overseas equity issues of Indian companies via global depositary receipts (GDRs) and American depositary receipts (ADRs). Inflows from GDRs and ADRs amounted to US$3.8bn in 2006/07, a year-on-year increase of 48%.

* Investments and remittances. Indians settled in other countries have also been a major source of capital inflows, with many non-resident Indians (NRIs) investing large amounts in special bank accounts. While NRIs' emotional connection to their country of origin is part of the explanation for this, the attractive interest rates offered on such deposits also provide a powerful incentive. In 2006/07 NRI deposits amounted to US$3.8bn, a 35% increase over the previous year; the outstanding value of NRI deposits as of end-March 2007 was US$39.5bn. Another large source of foreign-exchange inflows has been remittances from the huge number of Indians working overseas temporarily. Such remittances amounted to a colossal US$19.6bn in April-December 2006, a 15% year-on-year increase.

*Export risks*

Buoyant export growth has also built up India's foreign-exchange holdings. IT and business-process outsourcing (BPO) exports have expanded at an especially robust pace, with exports of software services reaching US$21.8bn in April-December 2006 (a year-on-year increase of 31%). However, the rupee's appreciation is alarming exporters, as it makes their products more expensive in overseas markets and erodes their international competitiveness.

The RBI's deputy governor, Rakesh Mohan, recently referred to the effects of the rupee's appreciation as a case of "Dutch disease". The term refers to episodes where large inflows of foreign exchangeusually as a result of the discovery of natural resources or massive foreign investmentleads to appreciation of the currency, undermining a country's traditional export industries. ("Dutch disease" originally referred to the adverse impact of the discovery of natural-gas deposits in the Netherlands on that country's manufacturing exports.)

There is already evidence in India of an export downturn in a number of sub-sectors. In the apparel sectorone of India's major export industries--the strong currency has eaten into the value of exports to the US, which declined by 3.5% year on year in January-April 2007. During the same period, apparel exports to the US by China, India's most important competitor, rose by 57%. Moreover, for India the decline marks the reversal of a positive trendapparel exports to the US rose at an average rate of 21% a year after import quotas were phased out at the beginning of 2005.

*Policy dilemma*

Indian policymakers face a difficult dilemma. On the one hand, the rupee's appreciation has benefited the economy by making imports cheaper. This is no small benefit--containing inflation has been high on the policy agenda during the past year, as the annual inflation rate (as measured by the point-to-point change in wholesale prices) rose to 6.1% in January 2007, compared with 4.2% a year ago. The inflation rate has subsequently moderated. This may offer the RBI some comfort in its battle against inflation, but the bank's new, stricter inflation target (4.5-5% in 2007/08, down from 5-5.5% in 2006/07) suggests that there will be one more increase in interest rates by the end of 2007.

On the other hand, for both economic and political reasons, policymakers cannot afford to ignore the problems of exporters. Although exports account for a relatively small share of the economy, India's rapid export growth in recent years has been an important catalyst of economic growth. Given the limited extent to which the RBI can intervene in the foreign-exchange market in the face of large and sustained capital inflows, policymakers can only stem rupee appreciation substantially by easing limits on domestic firms' overseas investments or restricting inflows--for instance, through further controls on ECBs. The RBI has already taken tentative steps in this direction, making it more difficult for Indian firms to borrow in foreign currency and eliminating the exemption from ECB limits previously enjoyed by real-estate firms.

In confronting this dilemma, government policymakers are undoubtedly hoping that there will be no need for a major intervention. However, the problem is unlikely to disappear soon. The Economist Intelligence Unit forecasts an average annual exchange rate of Rs41.3:US$1 in 2007 (a 13.5% real appreciation year on year) and Rs40:US$1 in 2008 (6%).


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## Bushroda

*Indian stocks seen gaining into 2008*
Wed Jun 27, 2007 11:49 AM BST
By Himangshu Watts, Reuters, UK

MUMBAI (Reuters) - Indian stocks are expected to rise another 5 percent by the end of the year, extending a four-year bull run, though at a much slower pace than in the previous two years, a Reuters poll showed on Tuesday.

Analysts expect banks and telecoms to drive the gains, while automakers lag behind as higher interest rates slow consumption in Asia's third-largest economy.

The Bombay Stock Exchange's main 30-share index <.BSESN> is expected to rise to 15,250 points by the end of 2007, for a 10.6 percent full-year gain, the median forecast of 14 India-based and European analysts showed. 

It is expected to rise to 16,000 points by mid-2008 from Monday's close of 14,487.72.

The Indian economy has grown an average 8.6 percent over the past four years, powered by rising corporate profits and attracting strong capital inflows that have boosted shares.

The main index gained 73 percent in 2003, 13 percent in 2004, 42 percent in 2005 and 47 percent in 2006. It is up 5 percent so far in 2007.

Analysts say rising inflation, which hit a two-year high of 6.7 percent in January, and five interest rate increases in the past year have muted market sentiment in 2007.


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## Neo

Happy Feet, where have you been??
Good to have you back!


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## Bushroda

*US financial giant CIT eyes Indian market to tap loan demand*
FORBES, NY
06.26.07, 7:56 AM ET

BANGALORE (Thomson Financial) - CIT Group Inc, the US financial company with 80 billion dollars in managed assets, said it plans to enter the Indian market to tap booming demand for commercial and consumer loans.

'India is one of the places we are talking about doing our core business in, after China,' said Michael Baresich, executive vice president of the Fortune 500 company. 'The dimensions of our business in India are under consideration.'

'We like the scale of the Indian market,' Baresich told reporters in Bangalore, where CIT awarded its first information-technology outsourcing contract to Mindtree Consulting, a mid-sized IT company.

CIT wants to join global financial giants such as Citigroup (nyse: C - news - people ), HSBC (nyse: HBC - news - people ) and Deutsche Bank (nyse: DB - news - people ) in tapping expanding demand for corporate and consumer finance in a nation of 1.1 billion people as economic growth accelerates.

Indian companies are borrowing more to invest in new production facilities and meet growing domestic demand for homes, cars, computers and other consumer durables being stoked in part by the easy availability of loans.

The economy grew 9.4 percent in the year to March, while bank loans expanded 29 percent.

'Certainly India is of great importance,' Baresich told a press conference.

The partnership with Mindtree, forged after CIT whittled down a list of more than 100 IT companies, is a beachhead for something bigger for the finance company in the world's second-fastest growing economy.

Mindtree will have 75 professionals, expected to grow to 100, dedicated to doing work for CIT in handling computer systems dealing with finance and sales from its sprawling Bangalore campus.

'This contract makes us feel more well-regarded,' Mindtree Chairman Ashok Soota said. 'We see this as a partnership that will be developing and going ahead.'


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## Bushroda

*Mumbai's sky-high apartment prices*
Financial Mirror, Cyprus
27/06/2007 

Mumbai, Indias financial capital is one of the most expensive places in the world to buy a condominium unit, according to a Global Property Guide survey.

Apartments in South Mumbai cost around US$9,000 to US$10,200 per square metre. Such stellar prices can only be found in the worlds leading cities, says Yasmin Rahman, yields and valuation analyst at the Global Property Guide. 

Property prices in other cities in India are significantly cheaper than in Mumbai. In New Delhi, the administrative capital, used apartments cost around US$2,000 to US$3,000 per sq. m. In Bangalore, Indias Silicon Valley, prices are around US$950 to US$2,000 per sq. m.

These prices are exceptionally high for a country with a GDP per person of only US$770 in 2006. Even for highly paid call centre agents with annual income of around US$3,000 to US$4,500, these condominiums are still unaffordable. 

*Remarkable growth*

Residential property prices in India have been rising remarkably during the past years, boosted by the IT industry's expansion and by rapid economic growth. IT and IT enabled services (ITES) firms have gobbled up new property offerings in several cities. There has also been a continuing move toward suburban business districts (SBD) in Mumbai, Delhi, Bangalore and Chennai. 

Indian cities are have struggled to accommodate the influx of people from rural areas. Public infrastructure such as roads, bridges and trains are filled to the brim. Congestion and traffic jams are part of business-as-usual environment. 

Demand for quality accommodation of expatriates and mass affluent individuals outstrips supply. The government is encouraging the development of new residential complexes with world class amenities and facilities.

*Low yields because of rent control*

Indias rental market is still hindered by socialist laws protecting tenants. Although these laws are slowly being replaced by more market oriented laws, the rental market's full potential has yet to be realized. 

Ironically, these rent control laws help create a housing shortage which pushes up prices. Monthly rents in Mumbai are expensive at US$8,000 to US$10,000. Nonetheless, yields are low, at 3 to 4.7%. 

In Delhi, the maximum annual rent is capped at 10% of the cost of construction and the market price of the land. However, the cost of construction and the price of land are both based on historical values and not the current market valuation. So the older your property, the smaller the rent you can charge.

Newer and smaller units in New Delhi fetch on average up to 8.4% rental yields yearly. But generally, yields are low to moderate in Delhi, at 4% to 5.8%. 

Bangalores more laxly-regulated rental market has higher annual yields at 7% to 10%.

*Urban housing problems*

In a separate study, the Global Property Guide finds that high transactions costs and restrictive rental markets are conducive to the creation of urban slums. Roundtrip transaction costs for property purchases in India are moderate to high, ranging from 7.5% to 17% of property value, depending upon the city. 

Registering property transactions in India is slow and cumbersome as many properties lack clear titles. Property valuation is not standardized. Such problems encourage the under-provision of housing and the growth of slums. 

In 2001 about 55.5% of Indias urban population lived in slum areas. The number of slum dwellers in India exceeds 158 million, more than the population of the UK and Germany combined. Dharavi, Asias largest urban slum area with more than a million people, is located right next to Mumbais prime business districts, the Bandra-Kurla Complex. 

As the Indian economy continues to rapidly expand, its cities will continue to attract investors, expatriates and migrants. The development of Indias real estate and rentals industry would greatly benefit from further liberalization of property ownership laws.


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## Bushroda

Neo said:


> Happy Feet, where have you been??
> Good to have you back!



Thanx Neo, Just took time off to do some DIY stuff. 
How are the thing here?


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## Bushroda

*Thai Leader Looks for India Investments*
FORBES, NY
By ASHOK SHARMA 06.26.07, 6:29 AM ET

Thailand's prime minister on Tuesday launched a weeklong tour of major Indian cities by prominent Thai investors to look into new business opportunities.

"I do hope our business people will fully utilize this roadshow to further strengthen our partnership," Prime Minister Surayud Chulanont said at a meeting with India's top business leaders.

He asked India to play a major role in promoting information technology in Asia. Thailand would, in particular, welcome the Indian investment in information technology and pharmaceuticals, Surayud said.

"Our cooperation has developed in both bilateral and multilateral fora in all sectors, including trade, investment, security, transport, science and technology, energy, technical cooperation and culture," he said.

Surayud said the two-way trade in 2006 rose to nearly US$3.4 billion (euro2.53 billion) from US$2 billion (euro1.6 billion) in 2004. It appears likely that a target of US$4 billion (euro2.97 billion) will be achieved, he said.

He also said that India and Thailand were on track to establishing a free trade agreement covering merchandise trade by 2010.

Thailand accounted for nearly US$830 million (euro616.6 million) of approved foreign direct investment in India in food processing, hotel and tourism, construction and electrical equipment, telecommunications, trading and transportation, he said.

India's economy is growing at more than 8 percent annually. Thailand expects an annual growth of 4-4.5 percent in 2007.

Surayud will meet with India's Prime Minister Manmohan Singh later Tuesday. He arrived in New Delhi on Monday and was scheduled to return home on Wednesday.


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## Neo

Well I tried to keep the thread alive while you were away. Malay isn't posting much lately.


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## Bushroda

Never mind, I am back now. Thanx for taking care of the thread. I'll take it from here.


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## Bushroda

*Indo-Thai FTA by 2010: Thai PM*
26 Jun, 2007 l 1819 hrs ISTlIANS

NEW DELHI: India and Thailand have stepped up negotiations to conclude a landmark free trade agreement (FTA) by 2010, Thai Prime Minister Surayud Chulanont on Tuesday told top businessmen in New Delhi as he sought a greater role for India in "bridging the digital divide in Asia." 

Allaying apprehensions of investors after a military-led government took over power last September, the Thai leader assured that the country's economy was in top form and full democracy would be restored after elections, to be held before the year-end. 

"Our two countries are on track to conclude an FTA in near future, with a view to establishing the FTA covering trade in goods by 2010," he said in his keynote address at a business summit, organised by three apex business bodies of India, at Hotel Taj Mahal here. 

"Upon the achievement of this goal, long-term mutual benefits in trade and investment could be realised and our partnership expanded further to cover technological know-how and expertise," said Surayud, who arrived in New Delhi on Monday evening on a three-day visit that also takes him to Kolkata as well as historical places like Varanasi and Sarnath. 

Painting a buoyant picture of steadily burgeoning business ties, the Thai leader announced the launching of a weeklong India-Thailand FTA roadshow from June 28 to July 4. 

Thailand's Deputy Foreign Minister Sawanit Kongsiri will lead a prominent group of investors on the roadshow to important Indian cities to explore business opportunities that will come into play after the FTA comes into effect, Surayud said. 

India's Commerce Minister Kamal Nath, who was present at the business meeting, stressed on diversifying trade between the two countries and called for an FTA that covers not just goods but also services and investments. 

Calling India "Thailand's new major market and a key engine of the rising Asian economy," Surayud underlined the importance of the proposed FTA and said that since the elimination of tariffs on 82 items under the early harvest scheme of limited FTA in 2004, bilateral trade has jumped to $3.4 billion last year. 

The agreed target of $4 billion by 2007 is likely to be achieved, he said. 

He sought more Indian investment in IT and pharmaceuticals - the two areas in which India has proven expertise. 

The Thai prime minister stressed that India, with its vast reservoir of skilled personnel and entrepreneurs, could be "a key driver of a knowledge-based Asia. 

"And we are convinced that the interaction of these assets with the dynamism of other growth areas in Asia, from China to Japan to ASEAN, can help ensure the peaceful rise of Asia as a key player in the global economy. 

"Our growing partnership is the outcome of synergy between India's 'Look East' policy and Thailand's Look West policy." 

Earlier in the day, the Thai leader was accorded a ceremonial welcome at Rashtrapati Bhavan, the presidential palace. He met External Affairs Minister Pranab Mukherjee and discussed with him a host of bilateral, regional and global issues. 

Surayud lauded the nearly 100,000-strong people of Indian origin in Thailand for playing a prominent role in Thailand's economic and social life. 

He also praised them for contributing to the evolution of "a multi-dimensional relationship" between India and Thailand. 

Surayud is scheduled to meet Prime Minister Manmohan Singh in the evening for formal talks after which the two sides will sign two agreements in the fields of energy and cultural cooperation.


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## Bushroda

*World Bank loan to fund India's rural poverty fight*
WASHINGTON POST
Wednesday, June 27, 2007; 4:29 AM


NEW DELHI (Reuters) - The World Bank said on Wednesday it had approved a $600 million loan for India to help it revamp thousands of ailing rural cooperative banks and fight village poverty through cheap loans.

"Better access to finance for India's rural poor is absolutely critical for higher rural growth, for reducing inequality and ultimately, alleviating poverty," Isabel Guerrero, the bank's country director for India, said in a statement.

Last year, India approved a 135.96 billion rupee ($3.32 billion) package to refinance loss-making cooperative banks so they could start lending to poor farmers at cheaper rates.

It sought multilateral cash to part-finance the project.

So far, 12 of India's 29 states have sought financial help for their cooperative banks.

About 87 percent of marginal Indian farmers and 70 percent of small farmers have no access to credit from a formal financial institution, the World Bank said, adding they often have to rely on "extortionate" money lenders.

Thousands of farmers have committed suicide in recent years across India's sprawling western and southern plateau because they could not repay loans taken for their crops.

The absence of cheaper credit prevents farmers from adopting the latest technology, or buying quality seeds and fertilizers.

India's economy expanded by a red-hot 9.4 percent in 2006/07 but farm growth lagged seriously behind at just 2.7 percent. In May, Prime Minister Manmohan Singh announced a 250 billion rupee package over four years to boost farm growth and tackle pervasive poverty in villages which are home to nearly 70 percent of the country's 1.1 billion people.

The move followed a poor showing by the ruling Congress party-led coalition in several state elections.


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## Bushroda

*H-P's Emerging Task: Deter Forgeries*

*Tailored Projects Abroad
Aim to Stem Fraudulent Documents*

By JACKIE RANGE
WALLSTREET JOURNAL ONLINE
June 28, 2007

BANGALORE, India -- As anyone who does business in India knows, you can't get very far without the right piece of paper. That makes forgery a big problem and one of the most common types of fraud.

At a research and development laboratory here in India's tech hub, Hewlett-Packard Co. is researching a way of marking new paper documents with a bar code that helps prevent forgeries. "Trusted Hardcopy," H-P's internal name for the project, is one of several innovations that are part of a big push by the personal-computer maker to devise products for specific markets that will also have broader use. The aim: To help capture what it calls its "next billion customers" -- a reference to massive emerging markets such as India and China.

With Trusted Hardcopy, which is just one of the tailored efforts, rather than requiring holograms or watermarked paper, the system uses equipment no more complicated than some software, a scanner, and a computer. The bar code is designed to act like a digital signature, "thus bringing network level security to the world of paper," says H-P in a company document. H-P envisages government entities, public offices and companies as potential users, such as for the registration of land ownership.

"India is one of the largest growing markets for H-P," says Anjaneyulu Kuchibhotla, a department director at H-P Labs India, though he adds that India is "starting from a fairly low IT base."

The Asian-Pacific region, which includes India and China, accounted for $4.5 billion of H-P's total revenue of $25.5 billion for the three months ended April 30. But with an increase of 16% over the year-earlier period, the Asian-Pacific region was the company's fastest-growing geographical area. H-P, based in Palo Alto, Calif., declined to provide results just for India.

India's technology industry is expected to grow dramatically in coming years. In 2011, India's tech industry is likely to be worth more than $110 billion in annual revenue, says research and consulting firm IDC (India) Ltd., up from $48.5 billion in 2006. Now there's a computer for only one in every 50 people, a total of 22 million, IDC says. But that is expected to grow significantly as India's economy expands at an annual clip of about 9%.

Already H-P is India's biggest seller of PCs in terms of units sold, with a 21% market share, according to IDC, ahead of India's HCL Technologies Ltd., which has 14%, and China's Lenovo Group Ltd., with 10%. H-P employs more than 29,000 people in India, its second-largest single-nation work force after the U.S., with a business that spans areas including outsourcing, manufacturing, technology services and customer support.

By focusing its research in India, as well as at its labs in Russia, China, and elsewhere, H-P aims to invent products that fit a particular local need but can also be used in other markets. The time from conception to market can be as long as three to five years. Some of them might never see the light of day. "Not everything we work on makes it to a product, but the ones that do tend to have a very significant impact," says Ajay Gupta, the director of H-P Labs India, in an email.

At the company's lab in Beijing, H-P is researching new databases that can handle very large amounts of information. H-P says some of its biggest clients, in terms of the number of transactions and customers, are in the world's most populous nation, and the company is working with them to build information systems large enough to handle that. Given the huge number of people in India, the results of the research could have application here, H-P says.

H-P's Indian labs, in downtown Bangalore, are staffed with employees with advanced degrees in computer science and engineering. The majority of employees are of Indian origin. Rooms are named after scientists such as Galileo and Marconi.

H-P reckons that the potential market in India -- those who may buy computers or are customers of companies that use computers -- could number 900 million. Yet India also is famously bureaucratic and forms-ridden. So the company has focused some of its efforts on trying to bridge the gap between tech and paper.

"We sort of assume that paper's not going to go away," said Mr. Kuchibhotla. "And we say that if paper's not going to go away, what technology do you need to bridge what's happening in the paper world with what's happening in the IT world?"

H-P's goal was to make a product that allowed paper to be read by a machine and secure against forgery. An early version of Trusted Hardcopy puts a bar code on paper that is similar to the bar codes on groceries. It contains the data that are also printed on the document and can be read by a scanner. It also encodes the data in the bar code to prevent tampering.

Because the bar code contains the authentic data, any changes to the document should be identifiable. The content of the bar codes can't be modified. The bar code is printed at the bottom of a page of regular size copier paper in about six square inches.

Another product H-P is developing is "TVPrintCast," which sends data over television networks. A set-top box receives the data, and the consumer can then print out the information. TV penetration in India is far higher than computers -- in 2005 India had 500 million TV viewers, compared with 6.5 million Internet users. The product would mean, for instance, that while watching a cooking program, the recipes featured could be broadcast and printed out. H-P isn't the only one in the running: An India company, Chennai-based Novatium Solutions Pvt. Ltd., is already selling a product called Nova netTV, which allows desktop computing on a TV.


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## Bushroda

*Air India Starts Cargo Operations With Airbus Planes*
BLOOMBERG
By Gautam Chakravorthy

June 27 (Bloomberg) -- Air India Ltd., the nation's biggest overseas carrier, started freighter operations with two Airbus SAS planes to tap rising demand for transporting goods in the world's second-fastest growing major economy. 

Air India started flights to Europe with the freighters, converted from old A310 passenger planes at a cost of $16 million, it said in a statement released in Mumbai today. 

Growing exports of gems and jewelry and imports of technology equipment have boosted demand for cargo flights in the South Asian country. India has one cargo airline, Blue Dart Express Ltd., and existing airlines plan to start cargo flights by buying new planes or converting passenger aircraft. 

India should have 500 cargo planes within the next 15 years, Praful Patel, the country's civil aviation minister, said in Mumbai at a function in connection with the start of state-owned Air India's cargo operations. 

State-owned Indian Airlines Ltd. is converting five Boeing Co. 737 aircraft to start cargo service while Deccan Aviation Ltd. and GoAirlines (India) Pvt. are also planning freighter services in India. 

Air India has a share of about 11 percent of cargo export from the country and 7 percent of imports, it said. It now moves cargo in passenger planes. 

The carrier will initially operate four flights a week to Frankfurt and Paris with the two A310s. The first cargo flight from Mumbai to Frankfurt will have stopovers in Bangalore and in Dammam, Saudi Arabia, it said.


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## Bushroda

*India sneaks into Pakistani auto market* 
By Khalid Mustafa

ISLAMABAD: In a shocking development, India has managed to sneak into Pakistans market of 160 million people through a faulty free-trade agreement (FTA) with Sri Lanka, a senior official told The News.

Keeping in view the sensitivity of the issue, the Economic Coordination Committee (ECC) that meets today (Thursday) with Prime Minister Shaukat Aziz in the chair would take up the FTA with Sri Lanka for review, he said.

Indian business tycoons have relocated their automobile industry to Sri Lanka and started exporting their products tyres, tubes, automobiles and spare partsto Pakistani market under FTA with Colombo, the official said.

Under the FTA between Pakistan and Sri Lanka, Islamabad cannot object to import of these items. Under the rules of origin, Pakistan cannot raise this issue as all the said items are being manufactured and value-added in Sri Lanka. However, the capacity of the negotiating team headed by joint secretary FT Wing in Commerce Ministry which has been involved in technical parleys with Sri Lanka on FTA is questionable, as the team could not foresee the future investment by India in Sri Lanka on automobile sector which can be injurious to Pakistans economy, the official said.

Although it is a fact that India-Sri Lanka FTA was inked much prior to Pak-Lanka FTA, but Pakistani negotiators could not examine the Indo-Lanka trade agreement and analyse its impact on Pakistans economy, he added.

Although the import of tyres, tubes, vehicles and spare parts is meagre this year, but a beginning has been made. Under the FTA, Pakistan has received tyres and rubber tubes in import from Sri Lanka valuing $169,000 and road vehicles and their parts worth $14,000. The official said this is the time to review the FTA.

According to a summary of the Commerce Ministry submitted to the ECC, seeking a review of Pak-Sri Lanka FTA, Colombo will resolve the issue of auto sector of Pakistan on permanent basis in case Pakistan reduces 1) the tariff concession on margin of preferences on betel leaves from 35 to 20 percent and removes the quantitative restrictions of 1,200 tones; 2) eliminates tariff on herbal cosmetics, biscuits, confectionery and ceramic tiles made in Sri Lanka.


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## Bushroda

*DaimlerChrysler to manufacture CVs in India* 
Tuesday, 26 June 2007 

*DaimlerChrysler to roll out Mercedes-Benz branded CVs in India. Obtains NOC from TATA*

NEW DELHI : German auto maker, DaimlerChrysler, has been given a no objection certificate by TATA Motors, to start manufacturing commercial vehicles (CVs) in India.

DaimlerChrysler India holds 6.64% in Tata Motors. According to government guidelines, a NOC is required from the Indian company before entering the CV segment as a competitor. Tata had entered into a collaboration with Daimler Benz in 1954 for medium CVs.

Initially DaimlerChrysler will manufacture the vehicles at its facility at Pune. Production would later be shifted to its new plant at Chakan, near Pune. DaimlerChrysler has acquired 100 acres at Chakan Industrial Park.

Currently, DaimlerChrysler is importing Mercedes-Benz trucks.

"Daimler is also expected to get into the production of luxury coaches and buses" reports Economic Times. In addition to this, Daimler would develop bus bodies at its India unit.

It still remains to be seen how soon DaimlerChrysler India commences domestic production. The CV segment is currently in the midst of a slowdown and market leader Tata Motors has recently cut production.


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## Bushroda

*Chandigarh tops list of boom towns of tomorrow, Nagpur 2nd*
28 Jun, 2007 l 0122 hrs ISTlTIMES NEWS NETWORK

Always wanted to buy a house but just cant afford one any longer? Have a little surplus money that youd like to invest in real estate but find land prices in your city completely out of reach? It might not be a bad idea to think beyond life in a metro and consider some of Indias smaller cities, which could be where the next big boom is coming. 

Thats right. If you thought all the real estate action was in the metros, think again. A booming economy and surging service sector have ensured a surge in income and purchasing power even in smaller towns. And the need to keep costs in check is prompting many corporates to check out B cities even as retail chains are eyeing potentially lucrative customer bases. 

So which are the boom towns of tomorrow? A study of Indias emerging growth centres has come up with a list of 15 cities, all of which share the advantages of relatively low real estate cost, plenty of land available for development, an untapped pool of manpower and rising quality of life. 

After assessing cities on the basis of five key parameters  real estate, people, physical infrastructure, social infrastructure and business environment  the study concluded that Indias hottest emerging city is Chandigarh. Indias first planned city got top ranking for the potential of its real estate market, physical infrastructure and business environment. While there is little space left within the city itself, Chandigarh scores because of the rapid development taking place on its outskirts, in areas like Panchkula, Mohali, Zirakpur and Dera Bassi on the Chandigarh-Ambala highway. Good connectivity, low operational costs and high disposable income also contributed to it being declared Indias hottest emerging city. 

Chandigarh is followed by Nagpur, which has seen a boom in both commercial and residential construction. With efforts on to improve the citys infrastructure, it has the potential for developing into a much sought after destination, especially since plentiful supply of educated manpower and lots of land for large campus developments are attracting many IT companies to the city. The study, conducted by real estate consultancy Knight Frank, puts Goa and Kochi at joint third place.


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## Bushroda

*Sensex may touch 16k mark by mid-2008: Poll*
REUTERS[ WEDNESDAY, JUNE 27, 2007 09:00:04 AM] 

MUMBAI: Indian stocks are expected to rise another 5 per cent by the end of the year, extending a four-year bull run, though at a much slower pace than in the previous two years, a Reuters poll showed on Tuesday. 

Analysts expect banks and telecoms to drive the gains, while automakers lag behind as higher interest rates slow consumption in Asia's third-largest economy. 

The Bombay Stock Exchange's main 30-share index is expected to rise to 15,250 points by the end of 2007, for a 10.6 per cent full-year gain, the median forecast of 14 India-based and European analysts showed. It is expected to rise to 16,000 points by mid-2008 from Monday's close of 14,487.72. 

The Indian economy has grown an average 8.6 per cent over the past four years, powered by rising corporate profits and attracting strong capital inflows that have boosted shares. The main index gained 73 per cent in 2003, 13 per cent in 2004, 42 per cent in 2005 and 47 per cent in 2006. It is up 5 per cent so far in 2007. 

Analysts say rising inflation, which hit a two-year high of 6.7 per cent in January, and five interest rate increases in the past year have muted market sentiment in 2007. 

However, scorching economic growth and net foreign fund inflows of $4.4 billion since January have lent it support, and analysts say they expect inflation, which is now at a 14-month low of 4.3 per cent, to remain tame. 

"In our view interest rates will stabilise and inflation will come under control, and this will ease the pressure on (the central bank) to increase interest rates," said Amitabh Chakraborty, president for equities at Religare Securities Ltd. 

He said rapid economic expansion had helped banks. In the past year, shares of State Bank of India, the country's largest lender, have risen 88 per cent, while ICICI Bank has gained 86 per cent. 

Last week, ICICI Bank, the second-largest lender, raised $4.9 billion in the country's biggest share sale. "The banking sector is the direct play on the economy, and when the economy is growing rapidly, the credit growth will be quite robust," Chakraborty said. 

Analysts said banks also were poised for consolidation ahead of a possible new policy regime in 2009, when controls on foreign banks will be reviewed. But India's automobile makers are suffering as rising interest rates have hurt demand, and most of the analysts polled said the sector would continue to underperform. 

Bajaj Auto, Hero Honda and Tata Motors have been the worst performing shares among the top 30 stocks in the index in the past year. 

Most analysts said the telecoms sector, which in February saw Vodafone buy a controlling stake in India's Hutchison Essar from Hutchison Telecommunications International Ltd, would remain attractive. 

India is the world's fastest-growing cellular market, adding more than 6 million users every month. The top performers in the 30-issue index are telecoms firms Bharti Airtel Ltd and Reliance Communications, which have more than doubled in the past year. "We are positive on Reliance Communications. It has a significant acquisition potential," Religare's Chakraborty said.


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## Bushroda

*Tata Power May Buy Vessels, Shipping Company Stakes*
BLOOMBERG
By Michele Batchelor and Archana Chaudhary

June 27 (Bloomberg) -- Tata Power Co., India's third- biggest utility, said it may buy vessels or stakes in shipping companies to transport coal from Indonesia, after acquiring shares of two mines in the Southeast Asian nation. 

The company has appointed an adviser to look at the options including long-term charters, Managing Director Prasad Menon told reporters in Singapore today, without elaborating. Tata Power is in talks with shipping companies and agents, he said. 

Acquiring a vessel or a shipping group's stake will help the Mumbai-based company cut transportation costs. The Baltic Dry Index, a measure of commodity-shipping costs on different routes and ship sizes, has risen 37 percent this year, according to the London-based Baltic Exchange. 

``Picking up a stake in a shipping company will mean ensured capacity for Tata Power, which makes sense in the long run,'' said Sameer Ranade, an analyst at PINC Research in Mumbai. ``But it may have to pay a premium for the stake considering tanker demand and high freight prices.'' Ranade has a ``hold'' rating on the stock. 

Tata Power shares rose 13.1 rupees, or 2 percent, to 645.55 rupees at the 3:30 p.m. close on the Bombay Stock Exchange. The stock has risen 15 percent this year, outperforming the 4.6 percent gain in the Sensitive Index. 

*Coal Purchase *

The company agreed in March to pay $1.3 billion to PT Bumi Resources, Asia's third-biggest coal miner, for a 30 percent stake in PT Kaltim Prima Coal and PT Arutmin. The acquisition entitled Tata Power to purchase 10 million metric tons of coal from one of the mines, securing supplies of the fuel for its power plants to be built on India's west coast. 

Indian power producers are buying coal to help the government meet a target of almost tripling the country's generating capacity by 2012 as demand in the world's second- fastest growing major economy rises. 

Tata Power will need to import 21 million tons of coal a year by 2013, from 2 million tons now, Menon said. 

Coal is the world's fastest-growing energy source as rising oil prices prompt users to switch fuels, the U.S. Energy Information Administration said in a report published May 21. China, India, and the U.S. will collectively account for 86 percent of the increase in global coal demand by 2030, it said. 

Tata Power reported May 30 fourth-quarter profit declined by a third to 927.3 million rupees ($22.8 million) after it set aside money from a tax refund for distribution to consumers. Revenue fell 19 percent to 9.47 billion rupees.


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## Bushroda

*India to be world's 3rd biggest banking hub*
AGENCIES[ TUESDAY, JUNE 26, 2007 09:35:42 AM] 

LONDON: China is set to become the world's largest banking market and India the third-largest behind the US, according to a study by accounting firm PricewaterhouseCoopers LLP. 

By 2050, banks in the seven emerging economies of China, India, Brazil, Russia, Mexico, Indonesia and Turkey will have higher profits and more assets than those in the Group of Seven countries, the report said. 

China, India and the five other economies in what PricewaterhouseCoopers calls the E7 group of emerging countries will have economies between 25 per cent and 75 per cent larger than Canada, France, Germany, Italy, Japan, the UK and the US in 2050, the accounting firm said. 

Borrowing from banks in those countries is likely to grow faster than the economy as a whole, the report said. 

"A lot of these markets look quite risky, but they're one of the places where you're going to get the biggest growth," John Hawksworth, head of macro-economics at the firm said in a phone interview. 

``We might see some of those banks in China and India looking to acquire banks in the US and Europe and become global players. If you're not over there, your growth will be limited and you might end up getting taken over by one of them.''


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## Bushroda

*Leather crafter aims to become India's first global fashion label* 
BUSINESS REPORT, SOUTH AFRICA
June 27, 2007
By Anil Penna

Bangalore, India - As Western luxury brands target India's rising rich, a leather goods firm aims to turn the tables and become the country's first global fashion marque.

Hidesign, based in the former French colony of Pondicherry in the southeast, logged $80 million (R571 million) in sales at home and abroad last year, and is seeking to ride on an international fashion name to penetrate markets abroad.

It was in talks to sell a 20 percent stake to French fashion house Louis Vuitton, which was assessing the Indian brand's value, said chief executive Kunal Sachdev.

A preliminary agreement was in place before the investment, said Sachdev, adding that Hidesign would also collaborate with Louis Vuitton in setting up a leather factory near Chennai in southern India.

Hidesign runs 12 stores overseas, including in China, Russia and South Africa. It wanted to increase that number to 50 in three years, he said.

The brand is sold from Australia to the Middle East, Europe and Africa. It can be found in multibrand department stores such as House of Fraser, John Lewis, Magasin Du Nord, Selfridges and Myers.

"There are no previous examples of an Indian brand establishing a footprint overseas," said Arvind Singhal, who heads retail consultancy Technopak. "Hidesign is the first.

"There is a retail opportunity in the mass prestige market for products that are not as expensive as Gucci nor very cheap," he added. "Hidesign will appeal to those who cannot spend $2 000 but can afford $250."

A tie-up with Louis Vuitton would give Hidesign international respectability and recognition, enabling it to compete overseas with brands that fall in the same segment, such as Coach of the US, Singhal said.

Hidesign was founded in 1978 as a one-man workshop by Dilip Kapur, who began handcrafting leather bags, jackets and other accessories, becoming one of the best-known brands in India, where it now operates 18 boutiques.

Kapur makes a virtue of going back to traditional leather tanning methods, using natural vegetable oils and dyes in his products - hand and computer bags, briefcases, wallets, belts - to give them a distinctive shine and feel.

Hidesign avoids pigments and lacquers; its oil-tanned ranch leather is very lightly dyed and then covered with natural oils. The brass buckles and rivets are individually sandcast and hand polished in the tradition of old European saddle making.

Such products may appeal to environmentally conscious consumers, but that may not open the doors of the world's biggest shops to an emerging company with aspirations to become a global player.

Hidesign's international expansion depended on its ability to open exclusive stores in prestigious outlets that were prepared to let out premium space to only the most exclusive brands, said Sachdev.

"In building the brand internationally, we have to go the exclusive-store route," he said. "Just advertising won't give customers an idea of the brand they are buying, the philosophy behind it."

That's where Louis Vuitton comes in.

"The fact that Louis Vuitton is associated with us would open up the doors internationally for us, in terms of opening stores and widening our global presence," said Sachdev, who is targeting 30 percent growth in annual sales.

Louis Vuitton, which has one store each in New Delhi and Mumbai, and may soon open a third in Bangalore, is trying to expand in India, a nation of 1.1 billion people. 

So are other international luxury brands.

Hidesign's local market knowledge would be useful to the French fashion house, although the brands would remain independent, said Sachdev.

India's consumer market is expected to grow fivefold to $1.5 trillion by 2025 as a fast-growing economy boosts the personal incomes of a youthful population, according to the consulting company McKinsey.

"After China, India will be the next growth story," Yves Carcelle, the chief executive of Louis Vuitton in New Delhi, said recently. 

"But right now, we are [at] the beginning."


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## Contrarian

Hey happy feet. Good to have you back. Im back as well.


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## Bushroda

*India's Rolta Looks West For Acquisitions*
Ruth David, 06.28.07, 12:20 AM ET
FORBES, NY

MUMBAI - The midsize Indian technology company Rolta is looking at expanding in the North American and European markets and could announce an acquisition in the range of $150 million.

Sources familiar with the Mumbai-based company said it was in talks with three to four Western companies, but was likely to make just one key acquisition. Rolta is a provider and developer of tech-based geospatial information systems, engineering design automation solutions and electronic security services in India and abroad. It has depositary receipts listed in London. 

Rolta last week announced that it had raised $150 million by issuing foreign currency convertible bonds in international markets. The bonds are expected to list on the Singapore Stock Exchange.

Rolta Chief Financial Officer Hiranya Ashar refused to comment on any of the prospective partners the company was in talks with. But he said one of the primary purposes of the money raised was acquisitions. We are looking at expanding in these markets. But nothing has been finalized, Ashar told Forbes.com. 

Bolstered by an economy that has grown more than 8% annually since 2003, Indian firms are aggressively expanding internationally, often choosing to acquire companies that will help them ramp up faster in new geographic regions. Though the average deal size is around $160 million, there have been several multibillion-dollar acquisitions, such as Tata buying out Corus and Suzlon Energy (other-otc: SZEYF - news - people )absorbing RE Power. 

Midsize companies like Rolta are making strong profits off software contracts from global clients, but the the rise of the rupee against the dollar remains a concern, said technical analyst Ashwani Gujral. He thinks it would make more sense for these companies to pursue business in European countries, where the currency is more able to withstand pressure from the rupee. 

Most of Indian tech companies revenues come from the North American market, but now many are looking at increasing the share they derive from Europe. 

Indian businesses often have to deal with investors concerns about high valuations when they buy abroad, but Gujral said assets everywhere have appreciated significantly in recent months. These days, there is nothing worth buying that is cheap. Indian firms are taking on bets in boom times, leveraging a lot of debt. Weve still to see how they can carry it off. 

With economic growth rates at 9% to 10%, if they dont acquire now, when will they? he said.


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## Bushroda

malaymishra123 said:


> Hey happy feet. Good to have you back. Im back as well.



Nice to see u back Malay. How'd ur exams go?


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## Neo

Great...Happy Feet, Malay and Neo, The Three Musketeers are all back in action!


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## Bushroda

Neo said:


> Great...Happy Feet, Malay and Neo, The Three Musketters are all back on the topic!



..and together we shall rule..

hehe.. anyway, cheers guys. I appreciate your contributions.


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## Bushroda

*Indias dollar millionaire club swells; over 1 lakh*
Srinivasalu Reddy, Hindustan Times
Mumbai, June 28, 2007

Buoyed by robust returns from equities and real-estate investments, high foreign inflows and a booming economy, India is now the worlds second-fastest producer of freshly minted dollar millionaires, marginally behind Singapore. 

According to the World Wealth Report released on Thursday by global investment bank Merrill Lynch and consultancy major Capgemini, there were over 100,000 dollar millionaires in India in 2006. At 100,015, the number was up 20.5 per cent over 2005  the second fastest growth in the world behind Singapores 21.2.

Dollar millionaires are people with net wealth more than $1 million, excluding the value of primary residence and consumables. The combined wealth of these Indians is $100 billion, a third of which is enough to wipe out Indias $33-billion fiscal deficit, making the economy debt-free. 

The burgeoning rich list has lured a number of domestic and foreign players to set up specialised private-banking arms to tap into their wealth. It indicates growth in the Indian economy. As people create more wealth, it will percolate down, said industrialist and former CII chief Adi Godrej. 

Pradeep Dokania, managing director at DSP Merrill Lynch, said: It is a reflection of robust growth of the Indian economy and that the fruits of growth are permeating to various sections of the population.


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## Bushroda

*Sustainability of economic growth*
SAUMITRA CHAUDHURI
[ FRIDAY, JUNE 29, 2007 12:46:19 AM] 

In 2006-07, the Indian economy grew by 9.4% according to the preliminary data released last month. It is, however, possible that due to higher output growth in manufacturing and in some other sectors, this figure is eventually revised up to 9.5%9.6%. In three of the previous four years, the economy grew at 9% or above. 

In the current year it is likely that growth will be close to 9%, if not a little higher. The non-farm sector has seen its growth accelerate from under 6% in the early years of this decade to an average of over 10% in the last three years and to 11% last year. While the services sector has been doing well for some time, industry has begun to keep close pace with it for the past three years, even at the elevation growth rates. 

Now all of this has generated considerable discussion. In the land of the Hindu rate of growth, is this a fundamental transformation or is it a transitory event soon to be replaced by a slower-moving and more familiar machine? Many think so, and have not been loath to say so, and proffer much advice about how to slow down before we go off the road. It goes with the territory, I suppose. For long, observers speculated as to when China would come crashing down in a hard landing. After more than a decade of waiting it has now become passé. 

Why should one believe that a fundamental transformation has come to be? Many growth spurts have been fuelled by leveraged consumption demand; if it is government demand, the fiscal deficit widens, if it is private consumption, the household debt rises; if it is both, both happen. Most often there is not enough unutilised productive capacity in the economy and prices rise; higher imports to meet domestic demand widen the trade deficit. Such a growth trajectory is not sustainable and eventually through a series of adjustments, the economy reverts to a pace of economic growth that is consistent with the availability and employment of its productive resources. 

Due perhaps to its high visibility and the fact that leveraged consumption was a new phenomenon in India, a widespread perception developed that the pick-up in economic growth was a consumption-led boom, and that too one fuelled by leverage. In fact, the expansion of economic activity was as much due to fixed capital formation as it was due to consumption. The average annual growth in real final consumption was 6.4%, while that for fixed capital formation it was close to 14%  a very big change from the 2% of the first two years of this decade. 

The strength of the investment boom may be seen from the big increase in the investment rate, i.e., the proportion of total investment to GDP. For many years, since back in the mid-1970s, the investment rate was stuck in the low to mid-20s. After the reforms of 1991, the investment rate rose to a peak of 26.9% in 1995-96 but then fell off. Between 1996-97 and 2002-03 it ranged between 23% and 25%. In 2003-04, the investment rate rose to 28.0%, and the momentum of investment expansion gathered steam. The rate rose further to 31.5%, to 33.8% and then to 35.1% in 2004-05, 2005-06 and 2006-07 respectively. In every sense, this order of change in the trajectory of investment is enormous. 

Why investment was able to rise  when it had not for so long  is a more complex question. Suffice it to say that this is only possible if the economic agents and transactional framework are capable of supporting a greater intensity of economic activity. By illustration, observe that private corporate investment rose by 53%, 41% and (possibly) 25%-30% in 2004-05, 2005-06 and 2006-07 respectively. 

The other factor that imparts the increase in the investment rate with the character of robustness is the counterpart rise in the domestic savings rate: from the mid-20s to nearly 30% in 2003-04, to 32.4% in 2005-06 and then to 34.7% in 2006-07. The domestic savings rate in 2007-08 is expected to be well over 35% of GDP. The increase in the rate of domestic savings has come primarily from improvement in government fiscal balances and from higher retained earnings of the corporate sector. 

Gross savings ( i.e., before mortgage and other loans) of the household sector has also seen an increase. The consequence of this on the external payments has been that the large increase in the investment rate has not been accompanied by a big rise in the current account deficit. In part that was because at the beginning of the boom in 2003-04 we had a small surplus in the current account, reflecting excess productive capacity at home. 

This surplus has now become a small deficit  although much smaller in comparison with the large capital inflows. The fact that most of the incremental investment has been financed from domestic sources is an important indicator of sustainability of the pace of investment. The extent of leverage still available to the economy, in terms of its ability to raise capital from overseas markets is enhanced by the modest use that has been made as of yet of this resource. 

In the current year (2007-08) the investment rate is likely to be over 36%. It is, of course, possible to argue that four or five successive years are just so many flashes. But then all we need are a few such flashy years and we will be on a comfortable platform with close to a 40% investment rate and that could yield us many years of strong growth  such as Japan had between 1955 and 1973, Korea between the mid-1960s and 1991, and China from 1978 to the present. 

Certainly there is no inevitability about this outcome, as if some committee of divine beings high up had deemed it to be so. But as a potential, that if worked upon with diligence and imagination, which is certainly within reach  albeit with a bit of luck. Indeed, that is the hard ground of evidence and logic upon which global investors are basing their optimism about Indias economic future.


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## Bushroda

*State Bank of India May Need 1 Trillion Rupees*
BLOOMBERG
By Sumit Sharma and Anoop Agrawal

June 28 (Bloomberg) -- State Bank of India, the nation's biggest by assets, said it may need 1 trillion rupees ($24.5 billion) in five years to sustain loan growth and fend off competition. 

Mumbai-based State Bank wants the money to meet stricter capital requirements, fund the growth of its banking units and expand its assets 25 percent yearly, Chairman Om Prakash Bhatt told reporters in Mumbai. The bank is concerned about its loss of market share, he said. 

The lender is waiting for government controls to ease, as a 20 percent cap on foreign ownership and a requirement that India hold a majority stake have limited its options to raise capital. ICICI Bank Ltd., India's biggest by market value, sold $5 billion of stock last week because overseas investors are allowed to own up to three-quarters of the company. 

``State-run banks will always have this problem of fund raising because of government control,'' said Sandip Sabharwal, chief investment officer at Mumbai-based J.M. Financial Mutual Fund, who oversees the equivalent of $171 million in equities. ``Every time they decide to raise funds they will need approval.'' 

New laws being passed in the next two months will allow State Bank to raise as much as 80 billion rupees of capital once the government's stake falls to 55 percent from 59.73 percent, Bhatt said. The rules will permit other fund-raising options as well, such as issuing preferred shares. 

Credit Risk 

Since April the bank has sold 50 billion rupees of debt, Bhatt said. The perceived risk for holding debt of State Bank of India rose to a three-month high after Bhatt told shareholders on June 25 that its capital requirements would be increased to 500 billion rupees in three years. 

Credit-default swaps based on $10 million of the company's debt rose to $52,000 from $51,000 yesterday, according to data compiled by Bloomberg. That's the highest since March 23. An increase in the price indicates deterioration in investors' perceptions of the bank's ability to repay what it owes. 

Indian banks need more capital to fund the building of roads, ports and power plants in an $854 billion economy that grew an average 8.6 percent over the past four years. The International Monetary Fund expects India to overtake South Korea this year as Asia's third-biggest economy after Japan and China. 

Share Sale 

Government-owned State Bank, with more than 100 million customers and 9,400 branches across India, may sell as much as $1.5 billion of stock this year, Bhatt said in May. The bank sold shares in 1994 in India and in 1996 in London, where it raised $350 million. 

``Banks will need more money as the Indian economy is growing at a fantastic pace,'' Bhatt said. 

State Bank's assets are expected to grow by 25 percent annually over the next three years, Bhatt said today, after growing 70 percent to $156 billion in the five years through March 31. ICICI forecasts 30 percent growth this year and had a three-fold increase in assets to $62 billion over the five years. 

The 200-year-old bank also plans to combine its asset management, insurance and non-banking operations in a holding company to unlock value, Bhatt said on June 25. State Bank of India proposes to sell about a 10 percent stake in its holding company to `three to four investors' within four months or so, he said today. 

Life Insurance Unit 

State Bank values its life insurance unit at $7 billion, Bhatt said. SBI Life Insurance is the fastest-growing life insurer in India, he said, and may go public in the year ending March 2009. French lender BNP Paribas's Cardiff SA unit holds a 26 percent stake in State Bank's life insurance venture. 

The bank also aims this year to increase the share of low- cost deposits by 1 percentage point to 44.5 percent, attract more rich customers and expand in rural areas. 

The bank needs to boost its market share, Bhatt said. Training programs are planned for all 200,000 employees to improve service, he said, after its product innovation and service standards declined. 

State Bank of India's shares, which have risen 18 percent this year, traded at 1,470.35 rupees, up 1.6 percent, at 3:30 p.m. on the Bombay Stock Exchange.


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## Neo

*Indian inflation falls to 14-month low ​* 
NEW DELHI: Indias inflation has fallen to a 14-month low helped by lower food prices, data on Friday showed, easing pressure for further interest rate hikes.

The wholesale price index, Indias closely watched cost-of-living monitor, showed inflation slowed to a lower-than-expected 4.03 per cent for the week ended June 16, from 4.28 per cent a week earlier and 5.5 per cent a year ago.

The latest figure was comfortably within the central banks medium-term inflation target of 4.0 to 4.5 per cent. 

Its a positive surprise, said D K Joshi, principal economist at leading Indian credit rating agency Crisil. The central bank can now afford to adopt a wait-and-watch policy and refrain from raising rates for the time-being.

It is possible that the impact of the central banks interest rate rises have still not been fully felt, he added. 

The central bank has hiked benchmark rates nine times since late 2004, driving borrowing costs to five-year highs. Its next monetary policy review is on July 31.

In early February, inflation hit a more than two-year high of 6.73, sparking warnings that the economy, which expanded by a scorching 9.4 per cent in the 2006-07 financial year, could be overheating.

The latest data came as welcome news to the Congress-led government as inflation has emerged as a major political issue because of the burden it imposes on Indias millions of poor households. Economists had been expecting inflation to fall to around 4.13 per cent this week. Inflation has been declining steadily over the past two months.

The newest drop was driven by a fall in food prices, such as pulses and vegetables, and some manufactured goods as well as by a higher base effect from a year ago.

The government has cut wheat and lentil import taxes and duties on steel and fuel in its bid to cut prices.

Earlier in the week, Finance Minister P Chidambaram said inflation-fighting measures and a sharp appreciation of the Indian rupee which has been riding at nine-year highs against the dollar had helped subdue prices. More rate rises might not be needed if the trend continued, he said.

This has eased fears about an interest rate rise, said Deepak Lalwani, Director of London-based brokerage Astaire & Partners Ltd. The India story remains positive, Lalwani said.

The inflation data helped drive up Indias benchmark Sensex share index by 1.03 per cent or 145.94 points to 14,650.51, just 73.37 points shy of its intraday record of 14,723.88 hit on February 9.

Economists warned that the central bank would not be able to lower its guard against inflation as the economy was operating at close to capacity and there was still a risk of overheating.

If you think that the economy was operating at 60 per cent capacity four years ago and is now at around 90 per cent, price pressures must be building, said Lalwani.

http://www.thenews.com.pk/daily_detail.asp?id=62482


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## Neo

*Indian shares may hit record highs ​* 
MUMBAI: Indian share prices could hit record levels next week on global market gains as rate concerns ease, dealers said on Friday.

They said the markets showed buoyancy after Indias inflation rate continued to fall, easing pressure for further interest rate hikes.

They said buying momentum picked up towards the close of the week with the benchmark 30-share Sensex moving towards record levels.

Indian shares rose 183.15 or 1.26 per cent to close the week at 14,650.51, just 73.37 points short of their intraday record of 14,723.88 hit on February 9.

Sentiment improved as Indias inflation fell to a 14-month low of 4.03 per cent for the week ending June 16 from 4.28 the previous week, dealers said.

The figure was comfortably within the central banks medium-term target of 4.0-4.5 per cent.

The markets could move to record highs early next week, said a dealer at brokerage Jamnadas Morarjee. The absence of fresh buying triggers may, however, limit gains, he said.

Dealers said the pace of buying would pick up only when first-quarter earnings data from Indian companies are announced in July.

Overseas funds have been net buyers of Indian equities this year to the tune of 4.45bn dollars, well above the 2.66bn dollars worth of shares that they purchased during the same period a year ago.

http://www.thenews.com.pk/daily_detail.asp?id=62484


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## Bushroda

*Private beats public sector in quarterly investments*

*Seven-Year Wait: Last time this happened was in April-June 1999* 

New Delhi, June 29: A trend is beginning and early signals indicate that it may be here to stay. For two consecutive quarters  October-December 2006 and January-March 2007  private investment in industry has beaten government investment. This has happened after a gap of seven years. The last time private investment was higher than government investment was in the quarter ended June 1999. 

In an indication of investment confidence, outstanding private investment in industry surpassed outstanding government investment by 28 per cent according to the latest data released by the Centre for Monitoring the Indian Economy (CMIE). Outstanding investments are those investments that have been announced, proposed or are under implementation, implying that they will lead to the availability of productive capital for the economy in the near future. 

Since September 1999, outstanding private investments have been lower than government investment. The difference between private and government investments has grown from 14 per cent in the December 2006 quarter to 28 per cent in the March 2007 quarter. In the quarter ending March, private ownership of outstanding investments exceeded government ownership by Rs 3,74,045 crore. 

This is partly due to a boom in construction, electricity, mining and services investment by the private sector, which increased by 335 per cent, 119 per cent, 112 per cent and 78 per cent respectively, over the financial year 2006-07. Sluggish government investments added their bit to it. 

Government investment growth in mining, irrigation and services showed signs of slowing down as growth in mining investment fell to 30 per cent in 2006-07 from 81 per cent in 2005-06; in services the growth fell to Rs 44,200 crore in 2006-07, an increase of only 9 per cent over the previous period compared to Rs 1,26,119 crore in 2005-06, which was an increase of 33 per cent. 

In services, government investment in industries that are traditionally considered the governments domain has fallen. Outstanding investments in railway transport fell by 8 per cent or Rs 12,670 crore over 2006-07 compared to a 54 per cent growth in the previous year. Air transport saw a fall of 14 per cent or Rs 4,281 crore and overall government investment growth in the transport industry slowed down to 4 per cent in 2006-07 compared to 30 per cent in the previous year. Surprisingly, while government investment in the Railways declined, private investment in it rose by 483 per cent. But it was air transport that recorded the highest growth in outstanding investment for the private sector, growing at 535 per cent or Rs 17,300 crore in 2006-07. Overall, private investment in the transport industry grew by 202 per cent or Rs 104,976 crore. 

Private investment in infrastructure related industries like roads, railways, air transport, shipping and automobiles grew at triple digit rates, while government investment in these core industries stagnated. Although outstanding government investment surpasses outstanding private investment in mining, electricity, services and irrigation, current trends show that within the current financial year private investment will surpass government investment in services and mining, while the same can be expected in electricity generation and irrigation by the end of the next financial year.


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## Contrarian

Bushroda said:


> Nice to see u back Malay. How'd ur exams go?



Hey dude,

they went ok, not as good as last sem's .
Im hoping my teachers will give me good internal marks to boost the average...they quite like me you know


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## Contrarian

*US takes the shine off Indian jewellery*

WASHINGTON: Hours after Indias commerce minister Kamal Nath left Washington DC after resisting US pressure to toe its line on international trade, the Bush administration has terminated some preferential benefits to India and Brazil, signalling a tough new approach towards two countries regarded as rebels in a western effort to hew a new trade regime.

The US Trade Representative (USTR) on Thursday announced that it is revoking duty-free status for gold jewellery and brass lamps from India, following a review of the Generalized System of Preferences program mandated by Congress.

India shipped nearly $ 2 billion in gold jewellery and $20 million in brass lamps to the US in 2006 under the GSP programme. Although the USTR announcement also involved revoking GSP privileges to several other countries, India and Brazil (which got knocked on brake parts worth $ 242 million) are among the hardest hit.

The GSP program was created in 1974 to provide duty-free treatment to nearly 5,000 products exported to the US from 131 beneficiary developing countries.

GSP privileges are typically withdrawn when Washington feels products from beneficiary countries have "exceeded statutory competitiveness limitations."

The USTR move followed several rounds of failed talks between Kamal Nath and US interlocutors aimed at breaking a deadlock that has stalled progress on the Doha Round. Administration officials, including Secretary of State Condoleezza Rice and Naths counterpart Susan Schwab have bitterly criticized India for being the spoiler.

But Kamal Nath, a suave Doon Schooler entrusted with safeguarding the livelihood of 800 million Indians who subsist on agriculture, has stood his ground. In a press conference at the Indian Embassy before he left for India, Nath said "Indian agriculture is subsistence, it's not commerce. You can negotiate commerce, but you cannot negotiate subsistence."

At the heart of dispute is the US-EU insistence that India and other poor nations whittle down high tariffs. Nath and his developing world counterparts want the west to first reduce subsidies to their farm sector that makes western produce cheap, and whose import (sans tariff) will decimate the agricultural sector in poor countries. A country like India, Nath said, is "batting for protection of livelihood."

Naths arguments have had little impact in the US, where his counterpart, USTR Susan Schwab, who the Indian commerce minister has met seven times in the last fortnight, launched a withering attack on India, accusing it of "misusing its newfound clout."

"Perhaps India and other major trading countries are still assessing their new responsibilities. It's my earnest hope that they come to terms with the reality that the benefits of accepting this responsibility will dwarf the political and economic challenges of doing so," Schwab said in Naths presence at a meeting of the US-India Business Council earlier this week.

Secretary Rice followed her up by remarking that "it would be a tragedy and a true shame if we did not complete this historic (Doha) agreement" implicitly blaming India for the deadlock.

With such rebuke ringing in his ears, Nath still presented a calm face, promising that India and the US would eventually find convergence in their positions.

He also cited figures to show that bilateral trade between the two countries was healthy and poised for greater growth.

But for now though, the only concession New Delhi gave Washington was a basket of mangoes that Prime Minister Singhs media advisor Sanjaya Baru presented to Secretary Rice. And that too a few hours before the US took the shine off Indias gold exports.

http://timesofindia.indiatimes.com/US_takes_the_shine_off_Indian_jewellery/articleshow/2162971.cms


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## Contrarian

*India catches up with China in PC growth*


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BANGALORE: India is slowly emerging from behind the Chinese shadow in the global PC market.

In 2006, the total PC shipments to India were 7.5 million, showing an overall growth of 18&#37;, while China shipped 28.5 million units (second only to US), a growth of 17%. In 2007, the Chinese are likely to buy 33.6 million desktops, notebooks, servers and other computers, according to projections from market research group Gartner. For India, number projected for this year is 8.8 million.

But the market in China is slowing down just as India&#8217;s is accelerating. As per Gartner predictions, both countries will enjoy growth between 16% and 18% this year, but next year India will move ahead. While China&#8217;s PC market will still enjoy respectable growth of 14%, India&#8217;s computer sales will grow at a rate higher than 20%, Gartner forecasts.

One factor constraining growth in India is that folks in semi-urban and rural areas are still not confident about using email and internet. "Language is a key factor in that. In China, everyone speaks Mandarin and language-based software applications have taken off in a big way. India is yet to catch on to the regional bandwagon. The problem here is, Indians speak so many languages," says Diptarup Chakraborti, principal analyst at Gartner, India.

But there is a twist to the Indian growth story. The growth has been spurred by increased sales of notebooks and not desktops. Says Chakraborti, "The mobile PC (notebook) segment is growing at a scorching rate and posted a growth rate of 89% in 2006 over 2005.


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## Contrarian

*Forex reserves rise to $192 billion*

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NEW DELHI: On the back of positive change of $10.9 billion in valuation due to the depreciation of dollar and external commercial borrowings at $16.1 billion, the foreign exchange reserves of the country swelled by $47.5 billion to $192 billion in 2006-07. Against this, in 2005-06, the net accretion to foreign exchange reserves was only $ 10.1 billion.

As per the data released by RBI on Friday, the accretion to the foreign exchange reserves was of the order of $36.6 billion on a balance of payment basis during 2006-07. Valuation gain reflecting the appreciation of major currencies against the dollar, accounted for an increase of $10.9 billion in total reserves as against a valuation loss of $5 billion.

The current account deficit during 2006-07 amounted to $9.6 billion or 1.1&#37; of GDP as against $9.2 billion in 2005-06. After remaining in the negative zone for the three quarters, current account turned positive by $2.56 billion in the fourth quarter. In the first three quarters of 2006-07, the current account deficit was around $12 billion.

Because of the surge in the net invisible receipts to the tune of $55.30 billion as against $42.65 billion in the last year, current account deficit remained at the last year level of $9.61 billion.

A huge surge occurred under the capital account too. The inflow under the capital account in 2006-07 went up by over 90% to $46.22 billion as against $24.24 billion in the last year. This made the reserves to further swell by $36.61 billion as against $15.05 billion in the last year.

Gross invisible receipts, comprising services including software, travel, remittances and investment income rose by 29.1% to $119.16 billion in 2006-07 from $92.29 billion in the last year.


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## Contrarian

*India warns nations not to confuse subsidies with tariffs*

WASHINGTON: India has warned the developed world not to confuse subsidies with tariffs and said if a country like the US wanted "headroom" for distortions in subsidies the developing world will be seeking the same for tariffs.

"Subsidies are distortions, tariffs are not," the Union Minister for Commerce Kamal Nath told reporters in the US. "So, we need to correct subsidies and while subsidies are being corrected I don't see there needs to be an exchange rate in correcting distortions and looking for tariffs," he said at the Embassy of India.

"Where India is concerned is that we have low tariffs, so our position may be more flexible, but we must go by our groups. The group formations are very important and that's what we will be doing," the minister said.

He, however, said India will continue to push for a successful conclusion to the Doha Round of trade talks.

"The US must also be demonstrating because this town says effective cuts in trade distortions. What does that mean? Effective cuts does not mean the right to be able to increase your subsidies," he said.

"The G-20 offer (on agricultural subsidies) is 12.1. That's where it stands at the moment. There was a big gap between 12.1 and 17. Now since the US wants some headroom, there are countries which say that if you want headroom in your distortion, we want headroom in our tariffs," Nath said.

"So you can't have headroom for distortions without having headroom for tariffs and if market access of subsidised products is very different from market access to agricultural products," the minister said.


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## Contrarian

*Merged AI-IA needs 60 more aircraft*


Write to Editor
NEW DELHI: Facing an aging snag-prone fleet that has to be phased out to compete in the fast expanding aviation industry, the merged Air India-Indian Airlines is going to require at least 60 more aircraft than the earlier order placed for 111 planes worth over $ 10 billion.

During a review meeting on merger held by aviation minister Praful Patel on Friday, the problem of aircraft shortage was discussed threadbare. A working group set up on this issue has found that the merged airline will need 30 wide-bodied aircraft and at least as many, if not more, narrow body planes. Additional fleet will require $6-7 billion extra spending.

"From now till mid-2009, we will return or phase out many aircraft and there is a shortage of aircraft even currently, The working group will submit its report in two weeks. We are working out a strategy to either lease brand new planes or buy them. But for the leasing option, only brand new planes would be considered,&#8217;&#8217; AI CMD V Thulasidas told TOI.

The wide-bodied options are Boeing 747, 777 and 787 apart from the Airbus A310 and 330s. The narrow body options include Boeing 737 and the A-320 family. The airlines are also facing shortage of planes. The ministry now admits the main reason for dwindling fortunes of national carriers is that they did not get modern planes for years while the competition kept adding capacity as the market grew.


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## Contrarian

*Air Deccan to build low-cost airports*


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BANGALORE: After low-cost flying it&#8217;s now low-cost airports. Air Deccan has announced plans to partner with builders to bid for the construction of four low-cost airports in Karnataka. The Karnataka government had recently called for expressions of interest for setting up airports in Hassan, Shimoga, Gulbarga and Bidar.

But the airline did not disclose who they would be tying up with. The partnership with the builder would be based on an assurance from Air Deccan that the latter would ensure regular passenger traffic to these smaller towns.

Air Deccan executive chairman G R Gopinath said his vision is to build no-frills airports at a cost of Rs 20 crore each, compared to the over Rs 300 crore that regular airports cost.

This would mean the airports will not have aerodomes, aircraft push-back vehicles and buses to ferry people from the aircraft to terminal buildings.

Speaking on the sidelines of a press meet to announce a tie up with India Post to sell Air Deccan tickets through post offices, Gopinath said, &#8220;These airports will be equipped with all the necessary infrastructure. But the terminal buildings will be smaller and less opulent than airports in a metro. Also the runway will be built to accommodate turbo-propelled aircraft like ATRs.&#8221;


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## Contrarian

*Hotel rooms planned in malls now*

GURGAON: After malls in the national capital region (NCR) emerging as the happening spots, developers have chalked out a plan to create hotel rooms in upcoming malls to provide staying facility to the inbound tourists and also for those who wish to stay close to &#8216;happening&#8217; life yet maintain complete &#8216;privacy&#8217;.

Major players in the real estate industry say that this would bring a revolution in the sector since such a trend has brought desired dividend in the foreign countries.

According to industry players this was waiting to happen around Delhi since there is a high demand of hotel rooms and that the demand is going to see a manifold increase in the near future.

&#8216;&#8216;First of all creation of hotel rooms in malls costs less to the developers since the additional facility is created with less investment. You don&#8217;t need to acquire fresh land for these rooms. So, at the end of the day, the customer also has to pay less for using the facility,&#8217;&#8217; said Vipin Luthra of Ambience Hospitality Management.

Group executive director Rajeev Talwar of DLF said that the trend is going to be a success in this region. &#8216;&#8216;We are expecting to start first 250 rooms hotel - Hilton Garden Inn - at our mall in Saket in Delhi in 2008. We will be creating more such colocate hotels in our future malls. This has started since we have entered into a joint venture with Hilton Hotels,&#8217;&#8217; Talwar added.

Even Ansal API and Ambience Hospitality Management are putting up about 100 rooms each at two of their malls coming up in Greater Noida and Gurgaon. &#8216;&#8216;These hotel rooms are exclusive ,&#8217;&#8217; said Sushil Ansal, chairman of Ansal API.


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## Contrarian

*TCS close to buying 2 LatinAmerica cos*


BANGALORE: India's top software exporter, Tata Consultancy Services, is close to buying two firms in Latin America for about 2 billion rupees ($50 million), Business Standard daily said, citing unnamed sources.

A spokesman for Tata Consultancy declined comment on the report.

Mumbai-based Tata Consultancy, part of the salt-to-steel Tata business group, is looking at one back-office services firm and an IT services company in Latin America and it has completed due diligence of the target companies, the newspaper said.

According to the report, the company has completed due diligence of the targeted companies. The estimated value of these two firms is said to be around Rs 200 crore, with a headcount of 100 each.

In May, Tata Consultancy, whose clients include General Electric and ABN AMRO, said it had set up a software development centre in Mexico to serve local clients and provide near-shore services to US customers.

In all, TCS has set up operations in 14 countries including major centres in Argentina, Brazil, Chile and Uruguay, employing over 5,000 persons. Revenues from its Latin American operations touched $159 million (around Rs 650 crore) in 2006-07


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## joey

*India, Japan to discuss Delhi-Mumbai industrial corridor*

HT

Mumbai+industrial+corridor
Indo-Asian News Service
New Delhi, June 30, 2007
First Published: 14:17 IST(30/6/2007)
Last Updated: 14:23 IST(30/6/2007) 

Ahead of Japanese Prime Minister Shinzo Abe's visit in New Delhi late August, India and Japan have stepped up negotiations on an economic pact and the multibillion dollar Mumbai-Delhi industrial corridor with Trade Minister Akira Amari beginning a five-day visit in New Delhi on Saturday. 

Japan's Minister of Economy, Trade and Industry Amari is leading a delegation of top 15 corporate honchos, led by Suzuki Motor chairperson Osamu Suzuki. 

Amari will meet Commerce Minister Kamal Nath and deputy chairperson of the Planning Commission Montek Singh Ahluwalia and discuss with them a host of trade-related issues with special focus on fleshing out the Delhi-Mumbai industrial corridor project. 

India has fine-tuned an ambitious plan for the industrial corridor project and will make a presentation to the Japanese side to increase funding for the project, *now expected to cost $90-100 billion.*

*The project entails the development of infrastructure along the 1,483-km dedicated freight corridor between New Delhi and Mumbai that includes the building of airports, setting up of several agro-processing parks and special economic zones, creating 4,000 MW of power generation facility and two ports in Gujarat and Maharashtra.* 

The industrial corridor project, which was initiated during Indian Prime Minister Manmohan Singh's Tokyo visit in December 2006, is likely to be finalised during Abe's visit to India in the last week of August. 

The first phase of the project is expected to be completed by 2012. The second and the last phase of the project are expected to be completed by 2016. 

Japan is keen to invest in India's infrastructure and make it a hub for production and exports to Europe and West Asia. 

Amari's visit will be followed by a delegation of Japanese officials who will come here for another round of negotiations on a comprehensive economic partnership agreement between the two countries. 

---------------------------------------------

100 bn dollar investment for a industrial corridor.. Adux how about a partnership and investing money to buy land up the corridor once work begins?


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## Contrarian

joey said:


> *India, Japan to discuss Delhi-Mumbai industrial corridor*
> 
> 
> 100 bn dollar investment for a industrial corridor.. Adux how about a partnership and investing money to buy land up the corridor once work begins?



This is excellent news.

BTW Joey, the land along those areas is already very expensive. The land prices there have already shot up by a good margin. If you really wanna buy land, buy it in the still relatively rural areas around Gurgaon, that is beyond Sonipat, etc. Within 5 years, you'd be left with double the money you invested.


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## Neo

*India, Japan set deadline to start work on $90bn industrial project ​* 
NEW DELHI: India and Japan on Monday set a deadline of next January to start building a chain of manufacturing clusters between New Delhi and Mumbai in an ambitious project that aims to make India an export base for Japanese companies. 

The proposed project, called the Delhi Mumbai Industrial Corridor, is expected to attract investments of about $90 billion (euro66 billion) over seven years, said Indian Commerce and Industry Minister Kamal Nath. 

The plan involves building new plants and infrastructure projects, mostly with Japanese money, along a 1,483-kilometer (922-mile) stretch that cuts through six states in Indias north and west and runs parallel to a railroad and highway linking New Delhi and Mumbai, a port city. 

We expect to start work by January next year, Nath told reporters after holding talks with visiting Japanese officials and business executives. Both sides agreed to work out the details of implementing the project before Japanese Prime Minister Shinzo Abe visits India next month. 

The governments of the two countries, along with infrastructure companies, will build roads, power plants and ports, while top Japanese manufacturers will invest in new plants, said Akira Amari, Japans minister for economy, trade and industry. Indian companies willing to build infrastructure for the project will be able to raise money from the Japanese market, Amari said. 

I believe (the project) will become a trigger for a new industrial revolution in India, Amari said. It will help India enter a new phase of growth. Indias rapid economic expansion in recent years _ averaging 9 per cent a year _ has attracted Japanese companies to expand their operations here, and some are now looking to use India as a base to export to Africa and Europe. 

Top executives from Japanese companies such as Mitsui & Co, Honda Motors Co, Suzuki Motor Corp, NEC Corp, Sony Corp and Hitachi Ltd attended the talks. The presence of the CEOs is evidence that Japans business holds a very strong interest in India, Amari said. 

http://www.thenews.com.pk/daily_detail.asp?id=62971


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## Neo

*Indian trade deficit rises by 45pc​*
NEW DELHI, July 2: Indias trade deficit grew by 45 per cent in May to $6.21 billion compared with last year as imports leapt thanks to a rapidly growing economy, according to data released on Monday.

The deficit, which was swelled by non-oil goods, was up from $4.26 billion in the same month in 2006.

Imports climbed by 26.4 per cent to $18.07 billion in May from a year earlier while exports jumped 18 per cent to $11.86 billion, data showed.

Imports have been climbing on the back of a fast-expanding economy.

Indias economy posted 9.4 per cent growth in the last financial year to March, the fastest pace in nearly two decades.

The trade deficit stood at $7.06 billion the previous month after rising from $3.80 billion in March, the Ministry of Commerce and Industry said export growth was slower in May compared to the 23.06 per cent year-on-year growth achieved last month.

The export performance in May reflects execution of old orders by exporters. The rupee rise impact may be visible from July onward, Commerce and Industry Minister Kamal Nath said.

The rupee has risen nearly nine per cent against the dollar so far this year as investors pump money into the South Asian economy.

Fuelled by fast economic growth, non-oil imports jumped by a strong 41.58 per cent to $13.33 billion in May compared with $9.42 billion in the same month last year.

Cumulatively for April-May in the current financial year to March 2008, exports increased by 20.37 per cent to $22.43 billion. Imports for this period climbed by 33.05 per cent to $35.71 billion.

The value of oil imports dropped by 2.99 per cent to $4.74 billion in May from $4.88 billion in the same month of the previous year.

We expect the current account to worsen in full year 2008 due to the recent large appreciation in the rupee, said brokerage Goldman Sachs in a research note.

The rupee has appreciated by 8.8 per cent in the year to date, which is expected to widen the trade deficit significantly, it said.

The May trade data emphasises that trend, it said.

Outsized capital inflows will maintain pressure on the rupee to appreciate, Rajeev Malik, senior economist at JP Morgan Chase in Singapore, added.

http://www.dawn.com/2007/07/03/ebr19.htm


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## Bushroda

*Clues to India's future prosperity can be found in Henry Ford's past*
Globe and Mail, CANADA 
MARCUS GEE 
July 4, 2007

When Henry Ford's Ford Motor Co. introduced the Model T in 1908, it sold for $850 (U.S.), less than half the $2,000-$3,000 charged by competing auto makers. The Tin Lizzie (as it came to be known) was so successful that by the time the 10 millionth rolled off the assembly line, nine out of 10 cars roaming the roads of the world were made by Ford.

Next year, exactly a century later, India's Tata Motors hopes to repeat the trick when it brings out a no-frills car for the masses that will sell for about 100,000 rupees ($2,600 Canadian). That's one lakh in Indian terms of measurement, and the one-lakh car would be the cheapest by far, not only in India, but in the world.

Many in the auto industry doubt that mastermind Ratan Tata, head of one of India's biggest business empires, can keep the cost that low. But if he even comes close, he will have done for India what Ford did for the United States 100 years ago: Put the dream of car ownership within reach of the common people.

At present, most Indians get around by train, bus, motor scooter and three-wheeled auto rickshaw. Indians buy about 1.3 million passenger cars a year, less than Canadians, even though India's population is 36 times as big. But with India's economy growing at 8 or 9 per cent a year, the market is set to boom. One study estimated it will double within a decade. With a population of 1.1 billion, and a middle class expected to grow tenfold over the next two decades, India is a potential motherlode for car makers.

Rather than cater to the upwardly mobile "New Indians" who want a flashy car to advertise their success, Tata is aiming at the lowly striver who wants to get around while getting ahead. The cheapest competing car, Suzuki's Maruti 800, goes for more than $4,000.

But Tata's car wouldn't be a bucket of bolts like East Germany's infamous Trabant. If reports of the secretive project are correct, Tata's rear-engine one-lakh car would have four doors, a top speed of around 120 kilometres an hour and a 33-horsepower engine, but no power steering or air conditioning on the basic model.

No one knows what the creature will look like yet, but Mr. Tata trained as an architect and brought in Italian car designers for the project, so it is bound to be much more than a tin box on wheels. If it catches on, Tata hopes to sell them not just in India but in Africa, Latin America and other parts of Asia - wherever incomes are still relatively low but aspirations high.

Tata is not the only one to see the potential of a low-cost car for the developing world. Every important global car maker, from Toyota to Volkswagen to Peugeot, has plans to produce a low-cost people's car. Chrysler is working with China's Chery and General Motors is working with South Korea's GM Daewoo on no-frills models. Germany's Roland Berger Strategy Consultants predicted in a recent report that 18 million cars priced at less than $14,300 would be sold around the world annually by 2012, an increase of four million a year from the current figure.

Renault's Logan has already sold more than half a million of its basic Logan model, which made its debut at $7,600 in 2004. Now it plans to take on Tata by producing a new model that Renault-Nissan chief executive officer Carlos Ghosn hopes to sell for less than $3,000 and market in Asia, with low-cost India as the manufacturing base.

If it's smart, India could become a hub for the production of small, cheap cars for the world. It has low-cost labour in abundance, hordes of skilled engineering graduates and a growing number of inexpensive parts makers.

Tata honed its low-cost car-making skills with the Indica, a compact hatchback it sells in Europe, and the Ace, a small, sturdy truck that went on sale two years ago for $5,400 and became a huge hit with Indian drivers.

India's recent economic success has been founded to a large extent on supplying services like software development to wealthy overseas clients. Its future success may lie with supplying inexpensive, good-quality products and services to its own people, cutting costs through creative innovation. That was Henry Ford's trick, after all.


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## Bushroda

*Japan to Partly Fund Indian Public Works on Freight Corridor* 
Bloomberg
By Kartik Goyal

July 2 (Bloomberg) -- Japan will partly finance India's $90 billion plan to build ports, airports, roads and set up new industrial centers along the New Delhi-Mumbai freight railroad, Japan's Economy and Trade Minister Akira Amari said. 

``Implementation of this project will be extremely important for attracting the Japanese companies that are the potential investors,'' Amari said, through an interpreter, addressing a media conference in New Delhi today. 

Finance Minister Palaniappan Chidambaram estimates India needs an investment of $475 billion by 2012 to improve public works. The government wants better utilities to woo investment in factories, generate jobs and accelerate economic growth to fight poverty in the world's second-most populous country. 

India plans to upgrade industrial infrastructure along the 1,483 kilometer (921 miles) Delhi-Mumbai freight corridor that connects the capital Delhi in the north and the financial center Mumbai in the west to boost industrial growth and create jobs. 

The first phase of the project is likely to be completed by 2012 in line with the dedicated rail freight corridor, Indian Trade Minister Kamal Nath said. The project will involve upgrading six airports and setting up two ports, one each in the western states of Gujarat and Maharashtra. 

Nath invited Japanese companies to utilize the investment opportunities arising out of India's thrust on infrastructure. The government of India will also invest in the project. 

``The project is expected to transform the industrial landscape across half-a-dozen Indian states leading to rapid development of industrial as well as physical infrastructure along the route of the corridor,'' Nath said. 

Indian Railways is building two freight tracks on the busiest routes of the country. The first will connect Mumbai to Delhi. The second track will run between Ludhiana in the north and Kolkata in the east. 

India's economy grew 9.4 percent in the year ended March 31, the fastest pace since 1989. India's growth in the past four years averaged 8.6 percent, making it the second-fastest growing major economy after China.


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## Bushroda

*Putting India's reserves to work*
INTERNATIONAL HERALD TRIBUNE
By Andy Mukherjee Bloomberg 
NewsPublished: July 3, 2007

India has wasted three years debating a modest proposal for diverting some of its foreign reserves to plugging the country's abysmal infrastructure deficit. It's only now that China is all set to carve out $200 billion from its reserves into a sovereign wealth fund that India is hastening to reach a decision on what to do with its own low-yielding cache.

Finance Minister P. Chidambaram said in a speech at the London Business School last week that the government has "persuaded" the Reserve Bank of India to lend $5 billion from its $212 billion kitty.

The money will go to a special-purpose vehicle formed last year to enable long-gestation projects to raise funds cheaply.

India urgently needs to raise investments in roads, ports, airports, power stations and railways. The latest official estimate puts the amount of funds required in these areas at a massive $475 billion over five years.

Those who oppose using reserves for infrastructure investments highlight two key risks: The economy may overheat because of additional domestic liquidity, and the country may lose hard-currency cover in the event of a run on the rupee.

After four years of 8.5 percent compounded annual growth in gross domestic product, there is a danger that the economy is exhausting its productive capacity.

Bloated order books bear testimony to serious supply constraints. Bharat Heavy Electricals, India's biggest maker of power equipment, has a three-year order backlog. Pakistan's cement makers are hoping to benefit from a shortage of building materials in India.

All of this provides a perfect setting for spending a few billion dollars from foreign reserves to import turbines, railway coaches, port equipment and air-traffic control systems.

With adequate leverage, even $5 billion can have an amplified impact on a $1 trillion economy. India Infrastructure Finance, the special-purpose vehicle, can then have a significant corpus to provide credit lines to companies that will import capital goods.

So while spending foreign reserves at home may shore up domestic liquidity and inflation, utilizing the funds overseas will help the economy achieve a better balance between strong demand and tepid supply.

At $65 billion, the annual trade deficit is both large and widening. However, that shouldn't deter the country from accelerated machinery imports.

India's basic balance of payments, or the sum of net exports of goods and services and foreign direct investment, is quite healthy. The minuscule $1.2 billion shortfall in the year that ended March 31 was only a third as large as in the previous year.

Those who support the plan to make use of reserves emphasize the low returns on the central bank's foreign assets, which are financed by selling high-cost local debt.

The Reserve Bank of India recently issued three-month treasury bills at a 7.2 percent yield to mop up some of the excess local liquidity created by its purchase of U.S. dollars.

The central bank is buying dollars to stem the pace of appreciation in the rupee, Asia's second-best-performing this year after the Thai baht. However, it isn't making much on the assets it's acquiring with those dollars. In the year that ended June 2006, the Reserve Bank earned 3.9 percent on its reserves.

The domestic economy - especially infrastructure - promises significantly higher returns. National Thermal Power Corporation, the country's biggest power producer, sold a 10-year dollar-denominated bond last year, paying a coupon rate of about 5.9 percent.

The higher returns from domestic infrastructure lending, skeptics say, will only be a reward for sacrificing safety and liquidity, the two essential features of reserve assets.

In this view, lending to Indian companies will compromise the Reserve Bank's balance sheet, leaving it unprepared for a currency crisis. This argument, too, is an exaggerated one.

India's reserves exceed short-term debt by a multiple of 16, providing a much greater cushion than mandated by the Guidotti-Greenspan principle.

That rule of thumb, named after Pablo Guidotti, a former treasury secretary of Argentina, and Alan Greenspan, the former U.S. Federal Reserve chairman, says that countries should hold reserves equal to foreign liabilities coming due within a year.

Even if India were to pay off its entire foreign borrowings - short-term and long-term - it would still be left with $44 billion. So, even by a conservative estimate, a fifth of India's reserves are surplus. Out of this, the current proposal only envisages using $5 billion. How big a risk can that pose?

Using reserves to finance the acquisition of foreign-made capital goods is undoubtedly a roundabout way to achieve a goal that may be as easily reached if the central bank were to just stop buying the incoming dollars. An appreciating rupee will automatically make imports cheaper.

That will be an altogether more satisfactory solution than creating a new layer of state interference.

However, after witnessing New Zealand's helplessness against carry traders who are pushing its currency too high, the Indian central bank isn't likely to leave the rupee entirely to market forces. So it will acquire dollars even when further reserve accumulation doesn't make economic sense.

From this perspective, putting a small part of the treasure trove into infrastructure will at least be a second-best alternative to laissez-faire.


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## Bushroda

*India may win $2 bn FDIs after easing mining law*
AGENCIES[ WEDNESDAY, JULY 04, 2007 01:15:25 PM] 

MUMBAI: India expects to attract as much as $2 billion of foreign direct investment annually in metals and minerals sector after the government overhauls a 50-year-old mining law, Junior Mines Minister said. 

A panel of ministers will meet July 6 to discuss the new policy, which may be approved by Parliament in the monsoon session scheduled to begin next month, T Subbarami Reddy said today in New Delhi. 

Delays in securing mining licenses and land have undermined India's efforts to win more investments, leaving the South Asian country short of the raw materials required for an economy that expanded 9.2 per cent last year, the most in almost two decades. 

``If all the obstacles are taken care off, we could invest up to $1 billion in a period of five years,'' said Christopher Rashleigh, director of Indo Gold Ltd, in an interview today in New Delhi. The Australian mining company has applied for rights to explore gold and copper in the northern Rajasthan state. 

India's government wants to simplify procedures and reduce delays that have dissuades mining companies from investing in the country, which according to McKinsey & Co has the world's fourth largest bauxite deposit, and the fifth-largest of iron ore reserve. 

Posco, Asia's third-biggest steelmaker, has faced delays in getting rights to mine iron ore for its 12 million tons-a-year plant. Construction work on the plant will start in October, six months later than planned, because of the hold up, the company said on May 15. The federal government and the ministry of mines has asked the Orissa state administration to hasten the process, Reddy told reporters today.


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## Bushroda

*Panasonic to integrate India ventures for better synergy*

*Panasonic Sales is the new umbrella entity that has been created by MEI to coordinate the activities of all its consumer electronics ventures in India*

Livemint.com, WALLSTREET JOURNAL
Yassir A. Pitalwalla and Sagar Malviya

Mumbai: The worlds largest consumer electronic company, Japans Matsushita Electric Industrial Co. Ltd (MEI), that owns the National and Panasonic brands is looking to gets its five independent consumer electronics ventures in India to work together. 

We are looking to unify the activities of our India ventures to synergize them for better focus, said Arjun Balakrishnan director, operations, Panasonic Sales and Service India Pvt. Ltd. 

Panasonic Sales is the new umbrella entity that has been created by MEI to coordinate the activities of all its consumer electronics ventures in India. 

The move follows the India visit of Takemi Sano, executive vice-president, MEI, this week. Sano was part of a high-level delegation, accompanying Japans minister for economy, trade and industry on a visit to the country.

Panasonic wants to create a unified holding company structure in India which will hold shares in all its India businesses. The Japanese parent often finds it difficult to get a group wide view of operations in India, said Sushil Jiwarajka, managing director of the Salora group, one of the partners of Panasonic in India. Jiwarajka added that the five companies had been started at various periods of time by different divisions of Matsushita. 

For the year ended March 2007, the five MEI-controlled listed entities had a combined turnover of Rs707.58 crore and a profit after tax of Rs19.35 crore. 

A merger of the five listed companies, however, is not being contemplated because the companies have different joint venture partners. Matsushita Electric Works (MEW), which bought an 80% stake in Anchor Electricals Pvt. Ltd, will continue to operate separately from the five companies. Anchor, which is controlled by MEWa 51% subsidiary of MEIwill continue to operate independently, said Toshihide Arii, chairman of Anchor Electricals. 

Due to the absence of a unified structure of command, Matsushita has been unable to develop a comprehensive India strategy across different product segmentsfrom zinc carbon batteries to rice cookers and plasma television sets. 

Out of the five listed companies, two manufacture components used by the groups other Indian ventures. 

While Panasonic AVC Networks manufactures television sets and audio systems, and the main components that go into colour television sets, Panasonic Carbon makes carbon cell rods used in dry cell batteries. 

Panasonic Battery sells batteries used in torches and other instruments and appliances under the Novino and Panasonic brands while Nippo Batteries too sells batteries but under the Nippo brand. And Panasonic Home Appliances manufactures rice cookers and hair dryers.

There can be a lot of synergies in promoting the common brand, sharing best practices, reducing costs and bringing in efficiencies thus helping improve market share and shareholder value, said Jiwarajka.


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## Bushroda

*India's in inflation comfort zone, says Montek*
REUTERS[ TUESDAY, JULY 03, 2007 12:23:44 AM] 

NEW DELHI: Indias inflation rate has entered a comfort zone and fears of overheating in the economy are in the past, a top government official said on Monday, as he predicted growth of at least 8.5% this fiscal. 

I certainly feel the fear of overheating is behind us, Montek Singh Ahluwalia, deputy chairman of the Planning Commission, said. I mean the rate of inflation has been steadily coming down in each of the past five weeks. I would definitely say that we have entered the comfort zone as far as inflation is concerned. 

Indias most-widely tracked inflation rate fell more than expected to a 14-month low of 4.03% in mid-June, well below a two-year high of 6.69% in late January. Mr Ahluwalia said the economy should grow by at least 8.5% in the financial year to March 2008. An average of 9% growth over the next five years was achievable. 

Opinions vary but most people still think that the growth this year will be above 8.5%. I mean 8.5% is the lowest number that I have seen. Mr Ahluwalia said monetary tightening measures adopted by the central bank had achieved the expected objective without hurting growth. I am pretty sure that the inflation rate is going to go down. The monetary tightening has achieved the objective that was expected and I dont think it has really killed the growth momentum, he said. 

The Reserve Bank of India has raised interest rates five times in the past year, the last time at the end of March, but could now hold its fire when it next reviews policy on July 31 with inflation now below its stated tolerance level for 2007-08 of 5%. Mr Ahluwalia said inflation would not be a problem in the next 5 to 6 months, assuming monsoon rains were normal. So I would, therefore, assume that any fear that, you know, we have to keep doing things to control inflation, I mean they are not warranted, he added.


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## Bushroda

*India 07/08 tech exports seen up 26-29 pct*
By Sumeet Chatterjee

BANGALORE (Reuters) - *Indian software and services exports are expected to rise by 26 to 29 percent to around $40 billion in the year to March 2008 *as demand for outsourcing remains strong, an industry body said on Monday.

That would be lower than 2006/07 export growth of 33 percent to $31.4 billion, but, despite worries about the strength of the rupee currency, the sector was on track to achieve a target of $60 billion in export revenue by 2009/2010, the National Association of Software and Service Companies (Nasscom) said.

"*We are confident and I think we will get there. The projections look robust and strong and we should hit $60 billion in exports by 2010*," Nasscom President Kiran Karnik said at the release of its annual survey for the sector.

"The overall demand is strong ... The headroom for growth is huge."

Overall revenue in the export-driven software and services sector is likely to grow by 24 to 27 percent to $49 billion to $50 billion this fiscal year, after a rise of 30.7 percent to $39.6 billion in year ended on March 31.

Indian software firms such as Tata Consultancy Services, Infosys Technologies and Wipro provide solutions like system integration, application development, and supply chain designing and back-office services.

The country's large pool of English-speaking engineering workforce and wages well below western salaries have helped to attract outsourcing from Western firms like ABN AMRO, Nortel and Airbus.

But the industry does face some obstacles -- a skills shortage and related wage rises of about 10 to 15 percent a year, inadequate infrastructure, and the rise in the rupee of nearly 9 percent against the dollar this year.

"We are concerned about the very sharp appreciation of the rupee vis-à-vis the dollar. It's has been too much, too fast, and that is of concern," Karnik said.

He said Asia's third-largest economy continued to be a preferred outsourcing destination as the costs were still lower, despite rising wage bills. Nasscom says the industry contributes 5.2 percent to the country's gross domestic production.


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## Bushroda

*'BRIC' ETF Investing: Getting Started in India* 
By Jonas Elmerraji
Special to TheStreet.com
7/5/2007 4:00 PM EDT

India is a country with mind-blowing economic potential in the coming years. As is, its economy is growing at a rate of over 9% per year (see data from India's Central Statistical Organisation). 

Now, with two India-focused exchange-traded funds (ETFs) in development, here is a primer on India and how you can get a share of the "I" action in BRIC. 

*BRIC Recap* 

BRIC is the term investors use to describe the emerging economies of Brazil, Russia, India and China (see "'BRIC' ETF Investing: An Introduction"). The BRIC countries are the poster children of emerging-market investing. Each country is estimated to become an economic powerhouse within the next several decades. 

Whether or not you believe the hype surrounding BRIC, the returns are irrefutable. BRIC securities have pounded returns well into the double digits this year with no signs of slowing down, including India-based companies such as ICICI Bank (IBN - Cramer's Take - Stockpickr) and Mahanagar Telephone Nigam (MTE - Cramer's Take - Stockpickr) (see the "Portfolio Tracking" section of Stockpickr's "Highest-Yielding BRIC Stocks" portfolio). 

*So, Why India?* 

There are a couple of reasons why Indian investments could be an attractive addition to your portfolio. First, outsourcing has become the name of the game here in the U.S., and India is one of our favorite places to send offshore service jobs. The West's increasing exposure to the Indian economy is opening up a pipeline of cash (see cash flow) to Indian companies. 

Second, India has a growing middle class that's educated, hardworking and filled with entrepreneurial ambition. Combined, it's the recipe for a great emerging-market investment. 

While the first steps in India's economic growth have been predominately in manufacturing jobs and broad customer service jobs, Indian workers are starting to move into more specialized service jobs. Financial services, information technology and research are among the more focused and advanced-level services that Indians are now beginning to provide on a regular basis. Workers in these specialized roles earn more money and help provide Indian contracting companies with the wherewithal to make an impact on the international stage. 

*India ETF* 

If you're interested in investing in an emerging economy like India, an ETF is an attractive way to get started, because it can provide you with easier access to the market as well as professional management (see money manager). 

However, while PowerShares has two India-specific ETFs in its product pipeline (see "New Passages to India for ETF Investors"), there is currently no pure India ETF that's available to investors. (To learn more about ETF investing, visit TheStreet.com's ETF Center.) That's not to say that there isn't anything ETF-like that's available right now if you want to add India to your portfolio. 

*India ETN and India Closed-End Fund* 

An exchange-traded note (ETN) is a fairly new idea. Basically, instead of giving you equity like an ETF does, an ETN is a debt security (like a bond) that promises to pay you the change in the asset that it tracks. In the case of India, Barclays' iPath MSCI India ETN (INP - Cramer's Take - Stockpickr) tracks the MSCI India Index of companies. 

In terms of share price, since an ETN's issuer is on the hook for debt, the share price of iPath MSCI India ETN is reliant not only on the index it tracks but also on the credit of Barclays. 

ETNs are definitely something to keep your eye on. India has highly restrictive laws about non-Indian direct investment in their country. Because no Indian equities need necessarily be owned by an ETN, the idea behind this investment type is that it can open investors up to the profitability of a place like India, without all of the bureaucratic red tape (and expense) that's normally associated with investing in the country as a foreigner. 

In addition to an India-centric ETN, closed-end mutual funds have been the easiest way for American investors to get India-specific exposure in their portfolios. Like ETFs, closed-end funds trade openly on exchanges such as the NYSE and Amex. 

Two India-focused closed-end funds are The India Fund (IFN - Cramer's Take - Stockpickr) and Morgan Stanley's India Investment Fund (IIF - Cramer's Take - Stockpickr) (both have brought triple-digit returns since the summer of 2003). 

However, unlike ETFs, these (and other) closed-end funds trade at a premium or discount, which means that the share price of a closed-end fund isn't as closely tied to its net asset value (NAV) as that of an ETF. Because Indian closed-end funds have a tendency to trade at a premium these days, it's a good idea to wait for a market correction before going too wild with these. 

*Know What You Own* 

Even though India is on the fast track to big money, its economy is not risk-free. While outsourcing is a huge boon to the Indian economy, having too large of a dependence on American interest (and money) could be a deal-breaker until the country's economy is able to sustain itself with the same degree of prosperity that it's currently enjoying. 

For now, however, money is doing the talking with respect to India. Emerging-market investments are crushing expectations, and if fund managers are concerned about the amount of risk in the Indian economy, they certainly haven't been letting on to it.


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## Bushroda

*AIs direct flights to US from Aug1*
G GANAPATHY SUBRAMANIAM
TIMES NEWS NETWORK[ THURSDAY, JULY 05, 2007 03:28:48 AM] 

NEW DELHI: Air Indias much-awaited direct flight to the US would be launched on August 1. While direct connectivity from Mumbai to New York would save time and the hassle of catching a connecting flight at a European or a south-east Asian hub, passengers have to fork out about Rs 4.58 lakh for a first-class return ticket. 

A club-class ticket on the Mumbai-New York-Mumbai sector would cost around Rs 2.25 lakh, according to airline sources. The economy fare on this flight would be Rs 54,700. All regulatory clearances have been obtained and Air India would deploy a Boeing B777-200 long range aircraft for this flight, the sources said. The airline, now being merged with sister carrier Indian, has been preparing for a long time to launch this connection. 

This is the first direct flight from India to the US by any Indian airline. US carriers like American and Continental are operating non-stop flights between the two countries, but most of the traffic between India and the US is routed through hubs like London, Singapore, Kuala Lumpur, Dubai, Paris or Frankfurt. 

Air India plans to pamper passengers on this flight since the flight time is nearly 15 hours. According to plans approved by the airlines chief V Thulasidas, new standards have been set for in-flight entertainment and hospitality. There is enough time to pamper the passengers and enable them to emerge fresh and relaxed from the long flight, sources said. 

Air India is the only Indian carrier flying to the US, though Jet Airways is expected to enter this segment soon. UB groups Kingfisher is also planning direct flights to the US, starting with a Bangalore-Los Angeles connectivity meant for the infotech industry, but has to wait for regulatory clearances. According to government rules, only airlines with five years of domestic experience are allowed to fly abroad, but the policy is under review now. Kingfisher has to either wait for policy relaxation or utilise the rights of Air Deccan, wherein the UB Group recently bought 26% stake. 

Airline sources said the B777-200s flying on the Mumbai-New York sector will have eight first-class seats, 35 club-class seats and 195 economy-class seats. These aircraft are equipped with accent lighting or mood lighting enhancement facilities. All seats are fitted with entertainment system containing 250 hours of video and over 150 hours of audio programming. Passengers will be able to use laptops, keyboards and MP3 players using connectivity provisions provided in the cabin. Wall-mounted satellite telephones are available for making calls anywhere in the world during flights, they said. 

First-class passengers would have the luxury of ordering exclusive convenio service to have meals at a time of their convenience. Air-India plans to offer Indian, Continental and Oriental cuisine on the India-US flights. 

Each first-class seat would virtually be a cabin with space width of 23 inches and design meant for privacy. These seats have an in-built lumbar support and massage system. 

The club-class seats can transform into a flat bed at the touch of a button, the sources said. Air India is providing limousine service for both first and club-class passengers. 

For Air India, launch of the US flight would be the first major highlight after the merger with Indian is formalised by the month-end. Boeing is delivering the B777-200 aircraft later this month and large-scale preparations are on the direct-to-US flight, the sources said.


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## Bushroda

*"Chindia": A Match Made in Heaven?*
Tom Doctoroff
Posted July 5, 2007 | 01:46 PM (EST) 

Thomas Friedman, the esteemed New York Times columnist, says the world is flat. Every day, it seems, we are losing manufacturing, and now service, jobs to the emerging giants in the East. Is there a new Godzilla ready to tear its teeth into our economic fabric? China and India represent a whopping 20% of global output and, combined, are already larger than the United States. 

If the two nations were able to structure their economies to achieve enduring collaboration, "Chindia" would take over the world. 

But rest easy . This union will not be consummated for a very long time, if ever. 

*Complementary Economies* 

Were there ever two countries more yin-and-yang than India and China? On every dimension, in every sphere, their strengths and weaknesses are complementary, ripe for a commercial partnership that could -- theoretically -- alter 21st-century order. China, overflowing with technocrats, could build the factories. The business of building and managing global companies and brands could be turned over to India, a country of tremendous intellectual and strategic energy . 

Compared to China, the subcontinent is a manager's nirvana (but lacks investment capital). Its service sector, representing well over 50% of output, is light years ahead of China's. Ditto the emergence of world-class multinational corporations led by seasoned management. Economic development is lubricated by sophisticated corporate governance and a stubbornly independent judiciary. The Indian economy seems to be -- finally -- thriving, despite dysfunctional state organs and petty political infighting. And Tata's long-awaited -- and skillfully executed -- bid for Dutch steelmaker Corus Group presages a new era for the Indian multinational. Finally, while primary education is lacking, India's universities produce legions of inventive, conceptually driven, English-speaking professionals. In contrast, China's "Innovate or die!" rallying cry is no more than a propaganda campaign orchestrated by party cadres. 

The Middle Kingdom, on the other hand, boasts formidable production capability (but does not nourish its consumer markets). Fueled by armies of well-trained workers, it is a powerhouse, exploding with energy and ruthlessly propelling its way to the top of value chains. A massive, technocratic bureaucracy has, in spite of rampant corruption and few checks and balances, engineered a stunning industrial infrastructure within the past two decades. The PRC is roaring ahead, driven by a focused central (imperial) government as well as a dynamic private sector. The Chinese people, right down to the farmers, are equipped with an expansive worldview and trenchant ambition. They are hungry for glory. 

*Hurdles to Overcome* 

Flirtation between the two powers has begun. Bilateral trade figures -- up from practically nothing a few years ago to more than $20 billion in 2006 -- hint at a new age of win-win cooperation. It looks like a match made in heaven. 

But the bride and groom are miles from the chapel. From a Chinese vantage point, there are three barriers that preclude symbiosis -- i.e., actual integration of economic and corporate structures. First, on the Chinese side, disputes regarding sovereignty, remnants of a 1962 border war, have not been resolved. More critically, India's embrace of Tibet's Dalai Lama, a "splittist intent on dividing the motherland," hits the paranoid third rail of centrifugal disintegration. 

Second, India's most exportable products -- services such as education and software development -- have limited entry to the mainland. NIIT, the world's largest technology institute, has struggled valiantly to operate freely in the PRC, despite a severe shortage of qualified IT professionals. China's own service sector -- banks, travel, financial services -- is nascent. Its central government is obsessive about controlling political dialogue, shying away from industries driven by free expression, despite an oft-proclaimed need for innovation. Leaders are schizophrenically torn between "learning from the world" and insulating state-owned enterprises (SOEs) from the claws of foreign competition. 

Finally, China and India spring from two radically different worldviews. Confucianism, the PRC's cultural blueprint, dictates that the individual accepts his place in, and then advances through, an intricate societal hierarchy. Chinese adhere to a striving, pragmatic, morally relativistic code of conduct (visitors driving through Beijing's Darwinian traffic will feel this firsthand). Hinduism and Buddhism, in contrast, reject materialism and embrace cosmological transcendence. "Brahminian restraint" (i.e., primary satisfaction derived from intellectual exchange) has yielded a love of debate. But the Chinese like to get on with it. 

Are the Chinese and Indian nations destined to deal with each other on tender hooks, confounded by motivational discrepancies? True, both are scaled emerging economies with complementary strengths and weaknesses. But any marriage must be built on trust. Unless the leaders of both countries encourage their own people to celebrate cultural diversity, the potential for the Chinese dragon and Indian tiger to achieve collective greatness will be capped.


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## Bushroda

*Back to export subsidies?* 
Business Standard / New Delhi July 05, 2007 

The finance minister is reported to have said in London that he is thinking of how to help exporters tide over the impact of a rising rupee. The option, of course, would be to try and keep the rupee down, as China is accused of doing with the yuan. Indeed, the widely debated question is whether such mercantilism explains Chinas economic success of recent years. While some have argued that Chinas currency is massively under-valued, others have contended that the yuans value is not terribly out of linein other words, the Chinese miracle is not driven by cheap currency alone. In the Indian context, one explanation for long years of under-performance is that the rupee was consistently overvalued, leading to persistent foreign exchange problems. This was corrected only when Manmohan Singh assumed charge as finance minister in 1991 and substantially devalued the rupee in a quick double-step. Now, 16 years later, the rupee has been climbing against key international currencies because of the current account surplus in the January-March quarter and strong capital inflows, so a weaker rupee is what exporters clamour for once again. Commerce Minister Kamal Nath, while echoing the exporting communitys woes, has argued for concessions from the government over and above what he announced some weeks ago. Indeed, while commenting on the export performance during May, when export growth dropped to 18 per cent, compared to 23 per cent in April, Mr Nath has cautioned that worse is to come. 

There are of course those who argue that the rupee should be allowed to find its own level, and that everyone should adjust to changes in the currency market, but they are in a small minority. So the real choice before the government is to try and drop the rupees value or work out an export benefit package. The only way to lower the rupees value is for the central bank to buy dollars. But is this a feasible policy, when last years capital account surplus was $45 billion, and the January-March quarter saw a current account surplus as well? And if the RBI does manage to devalue the rupee, what will be the costs of such an operation? Since the RBI will have to sterilise the flood of rupees that it will unleash on the market when it buys dollars (the alternative will be to risk inflation), this will involve an interest cost, which will be the difference between what the RBI earns on its dollar deposits and what it pays the banks that buy its sterilisation bonds (with the tab being picked up by the government through the Budget). There is then the cost that the economy will pay by way of more expensive imports, when the RBI tries to lower the rupees value. Whether the costs outweigh the benefits is an issue for debate, but it is obvious that any policy of deliberately undervaluing the rupee distorts economic signals and could make the problem worse by encouraging further inflows in the belief that the RBIs policy will not be sustainable. Indeed, the rupees recent climb is precisely because the RBI felt it could not sterilise the inflows fully. 

A less distorting method, and one that the finance minister and commerce minister seem to be working towards, is a specific export package of concessions and benefits to neutralise some of the impact of the rising rupee on exporters. The duty drawback and duty entitlement passbook (DEPB) scheme offer a way out, especially since state-level taxes that add up to a tidy sum are not rebated at the moment. However, the last thing the country needs is a re-birth of permanent export subsidies, which were abolished when the rupee was devalued in 1991. So it will be important to have a sunset clause in any relief package that is worked out; exporters should understand that they are being given only temporary sustenance until they improve their productivity levels and can compete without the help of crutches.


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## Bushroda

*Unitech to build plush luxury villas, targets NRI buyers*
Jul 5, 2007, 12:00 GMT 

New Delhi, July 5 (IANS) Indian real estate major Unitech Ltd Thursday announced its latest multi-million dollar residential complex of luxury villas and penthouses coming up in Noida, targeting non-resident Indian (NRI) buyers.

For this project Unitech has acquired 347 acres of land for about Rs.17 billion (Doller 420 million) in May 2006. The cost of construction will be about Rs.60 billion, according to company officials. 

'This is the biggest ever land deal in India by any real estate developer. The new project - Unitech Grande - is meant for the high-end luxurious segment as there is a growing need for such type of residential complexes in India,' Sanjay Chandra, Unitech managing director, said at a press conference here. 

'The economy is booming and with the arrival of global luxurious brands in India, the demand for an upscale lifestyle is gradually emerging,' he added.

Aimed primarily at the NRIs, the complex is going to have its own golf course, a fitness centre, eight signature towers and four gateway towers which will house the penthouses. 

The complex is also expected to house schools, hospitals and shopping outlets. 

The size of the apartments will be between 2,200 sq ft and 5,500 sq ft. The total project will be built in four phases over a span of seven years. 

During the first phase over 670 units will be built within three years and three months. The complex will have a total of 5,300 units, officials said. 

'We have already sold over 25 percent of the 670 units that will be ready in the first phase of construction, out of which 10 units have been sold to NRIs. As the project gets ready, we will eventually start targeting the corporates,' Chandra said.


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## Bushroda

*Larsen to launch $1 bln infrastructure fund*
Thu Jul 5, 2007 8:40 PM IST 

BANGALORE (Reuters) - India's top engineering and construction firm, Larsen & Toubro Ltd. (L&T), said on Thursday it will launch a $1 billion infrastructure fund in one to two months.

"Various institutions around the world will invest in that fund...L&T will invest $50 million in that. The fund will work independently to promote various infrastructure projects in India," Chairman A.M. Naik told reporters.

Naik also said that L&T will form 3 wholly-owned units for power, shipbuilding and railways to tap growing business potential as Asia's third-largest economy steps up investment on infrastructure projects to boost growth.

"We are creating these separate companies so that we can attract the best talent to be the CEOs...It will take more than 5 years before these companies mature for an independent existence without L&T's support."

In the power business, Nayak said L&T had tied up with Japan's Mitsubishi Heavy Industries to make super-critical boilers in India. It will soon form a joint venture with a leading turbine manufacturers, he said.

Analysts say companies such as L&T and state-run power equipment maker Bharat Heavy Electricals Ltd. are expected to benefit from a slew of big power projects planned by India to overcome shortages in electricity.

India plans to add 78,577 megawatts of power generation capacity by 2012, mainly from coal-fired units.

Shares in the company ended 1.7 percent higher at a record close of 2,331.15 rupees, after rising to a life high of 2,364 rupees during trade, in a Mumbai market that fell 0.1 percent.


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## Bushroda

*WEB FEATURE: Investing in India*
By Dorothy Alpert, Deloitte & Touche LLP 

JULY 05, 2007 -- For a number of years, India has been a paragon of profitability for companies seeking to outsource information technology (IT). This is just one of the factors that have contributed to Indias continual increasing power in the global economy. 

While the IT industry and other market influences are expanding Indias gross domestic product at a rate of 8.5 percent, Indian real estate market values have also been rising. Market values are now appreciating at 30-plus percent annually, particularly residential.

This growth can be attributed to rising incomes, rapid population growth and a significant cultural shift. The up-and-coming generation of Indians is seeking to live outside extended-family homes, thus driving multifamily housing development. 

With a median age of 24-years-old and 2.5 million employable college graduates emerging every year, Indias multifamily real estate has yielded impressive gains for the past two years with a sharp increase in demand. Along with this impact on housing, there has been a compelling change for offshore investorsIndias foreign direct investment (FDI) reform. 

As of 2005, FDI of up to 100 percent is permitted in new development and subject to guidelines including minimum property size, capitalization and other standards. Due to the changes in FDI regulations, investments may now be made directly with joint venture partners, through holding companies, or in a combination of these vehicles with a choice of explicitly defined ownership structures. 

In the 1990s, reform of interventionist economic policies first enabled significant growth. Trade barriers were lowered and capital markets were liberalized, helping spark the current outsourcing boom. In the interim, corporate tax codes have been restructured and stock market regulation has been strengthened, in addition to other reforms. 

Specific to real estate, the government has repealed restrictive land ownership laws, decreased property taxes and revised rent control policies that were formerly weighted against owners. Inconsistent urban renewal policies have been replaced by cohesive regional financing. In areas where development scale was limited by lack of institutional financing due to public perceptions of market risks, new regulations seek to encourage large projects. 

Indias substantial opportunities are not without risk. Macro-level issues include a swelling national deficit, rising interest rates, stock market gyrations and possible inflation. Despite Indias fast-developing, infrastructure-focused economy, structural constraints exist. Overloaded roads, bridges, power, water and sewer systems can cause traffic tie-ups, limit water availability and cause electrical outages.

Additionally, a lack of adequate medical care in a society where 60 percent of people live at or near the poverty line greatly increases health risks including pandemic vulnerability. Civil unrest and terrorism prospects may be amplified by urbanization, rapid population growth, anti-globalization sentiment and strained Indian-Pakistani relations. Natural disasters such as the 2005 floods in Bangalore, along with the possibility of earthquakes and monsoons, may also pose a threat. 

Even after weighing the potential benefits and risks of Indian real estate, foreign investors should partner with a qualified real estate advisor. Investors should seek a real estate advisor who meets the following criteria: a meaningful history and widespread presence in India, the ability to chart both entry and exit strategies, familiarity with Indian and Western business practices and an intmate knowledge of the many intangibles that make investing in India as promising as it is may be complex.

India presents extraordinary real estate opportunities for astute foreign investors. Deep market knowledge, development-process familiarity, steely nerves, patience and higher-than-usual risk tolerance may be essential to realizing the gainsand providing the benefitsthat Indian real estate is uniquely positioned to deliver.


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## Bushroda

*Can organised retail in food help lift the tail?*
ASHOK GULATI & THOMAS REARDON
[ FRIDAY, JULY 06, 2007 04:22:23 AM] 

Organised food retail is perhaps the fastest growing component in the entire agri-system of India today. Last year, it registered a growth rate of 46% in sales, 48% in retail space and 65% in the number of outlets of the organised retailers in 73 cities of India. This year, the indications so far are that the growth may be equally strong or even more, albeit still from a low base. 

Compared to this phenomenal growth in organised retail, agriculture, the so-called tail-end of the agri-system, has been growing at an average annual growth rate of 2.3% during the last five years (2002-07). The key policy question is can the booming organised retail in food help lift the growth rates in agriculture? The short answer is yes in due course, especially when organised retail attains a critical level in terms of size and scale, and if it finds the environment conducive enough to tie up with farmer groups either directly or through the retailers specialised and dedicated procurement agencies/companies or processors. 

To understand how organised retail can help production in the farms, one has to imagine the process from plate to plough, or retail to tail (farming) (see the figure). In the emerging Indian economy, consumer is going to be the queen as supply bottlenecks are removed and competition builds up in each sector. 

The organised retailers are first interface with the consumers who buy in the organised channels, and they can effectively communicate consumers preferences back to the producers in terms of quantity, quality and other specific traits of different commodities. By contrast, traditional retail, working facelessly through the wholesale market, is not in direct communication and interface with the farmers in the fresh domain, and the processors in the processed domain. 

This market information itself is critical for producers to mitigate their market risk and encourage investments. The process can be strengthened and expedited if the retailers or their specialised procurement agencies not only tie up with farmer organisations for their output but also help them in providing critical inputs such as technical expertise, extension, finance, insurance, etc which are in general scarce or even missing in the public support systems accessed by farmers. Given the scale at which organised retailers operate, they can bring in the services of banking, insurance, etc through specialised agencies. 

This would release credit constraints and also cover production risks as farmers move from low to high value agriculture. This surge of access to inputs means farmers are empowered to modernise and become more competitive both in national and international markets. Supplying to supermarkets can thus be a springboard or (in bicycle) training wheels for exports even by small/medium farmers. 

Given the size of demand by organised retailers, it is very difficult for individual farmers, especially small ones, to enter into any agreement or contracts with these retailers. That is where a challenge lies in clustering farmers in groups of viable size to match their supplies with the type and size of demand by the organised retailers. But who would do it? 

Remember the Mother dairy case in milk during 1970s. Although it was under a sort of cooperative network, duly supported by the government (NDDB) in terms of cheap capital, the key feature was that it rolled out the front end (neighbourhood milk booths) in Delhi as well as other cities in India (such as in the chain of Milk Parlours in Bangalore), and procured milk from cooperatives of farmers from far off areas, chilled and homogenised that and by next day put it in the booths all over Delhi and other cities. 

This helped farmers by giving them an assured market (while the traditional market was risky and fluctuating) and induced more investments in the milk sector. Today, India is the largest producer of milk. Part of that feat is due to productivity increases from the NDDB scheme. But there is still much potential to be realised, as still less than 20% of that passes through the organised sector. 

Similar things can happen under private ownership of retail, and for various commodity chains, ranging from tomatoes, mangoes to poultry and so on. The backward integration of these mega retailers can take several forms, directly through farmers organisations, or through lead farmers, or through specialised agencies. But all this happens when the front end of organised retail is big enough to necessitate large procurement and thus pay for the price premiums that reward consistency and quality differentiation. Once they reach a critical level of say 20-30% of the total retail, their impact on modernising the wholesale markets, logistics, and in providing necessary inputs to farmers, etc would start becoming visible. 

Today, the organised retail is in its infancy but moving fast in that direction. Next five-to-ten years are critical for its scaling up to have a visible impact on the backend operations of these retailers. The government and business need to work together in a way that this opportunity is not lost but used in a manner that benefits majority of stakeholders in this chain from retail to tail. 

This can be done when the government follows policies for their continued growth, mops up revenue resulting from compliance to taxes by the organised retail, and uses that revenue to build infrastructure in commodity chains that helps farmers, wholesalers and also traditional retailers, as well as the procurement activities of modern retail itself. Each commodity chain is unique and needs careful assessment by both the business and the government. If one plays this game wisely, one can make it much more inclusive by bringing in farmers and several informal vendors in the mainstream of this structural change, without sacrificing efficiency of value chains.


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## Bushroda

*India amongst top 3 FDI destinations: E&Y survey* 

New Delhi, July 5: India's popularity as an international investment destination appears to be increasing fast. According to a survey undertaken by Ernst and Young, India is one of the top three destinations attractive to foreign investors, the other two being China and the United States. 

The survey, according to The China Daily, said that eleven percent of investors had cited India as being among their top three preferences in 2004, but in 2007, the investor marker has risen to 26 percent. 

China is still the most attractive destination for foreign investment, the Ernst and Young survey claimed. 

Between February and March 2007, the survey asked 809 managers from various industries in European, American and Asian firms about their investment preferences. 

Forty-eight percent cited China as one of their top three preferred business locations in 2007, up from 41 percent in the 2006 survey. 

They said they were drawn to China because of its low labour costs, more competitive rates and higher productivity. 

The country's infrastructure, quality of research and development, workforce education and political stability were cited as major advantages. 

However, the survey revealed that China still lags behind in quality of workforce. Only four percent of those surveyed said it is the most attractive country in terms of its labour skills. 

In addition, only four percent of respondents said China is the most attractive economy in terms of research and development availability and quality, as opposed to 43 percent for Europe and 27 percent for North America. 

The survey ranked investment preferences on the basis of market and access, labour and productivity, fiscal, legal, environmental and regional issues. The United States was found to be the second-most attractive country, finding favour with 33 percent of the respondents. 

Aside from India and China, the other two "BRIC" countries -- Brazil and Russia - featured less prominently in terms of investor interest. 

Despite Russia's abundant energy supplies, internal political uncertainties seem to deter investors. Similarly for Brazil, the considerable efforts by the government to secure macroeconomic stability have failed to convince corporate decision-makers.


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## genmirajborgza786

Indian stocks jump to record high 
India's main stock index, the Sensex, has burst through the 15,000 mark, surging to a record on optimism about economic growth and corporate profits. 
Bombay's Sensex closed 102.23 points, or 0.7&#37;, higher at 14,964.12. It rose as high as 15,007.22 on Friday, taking gains for the week to more than 2%. 

Official data on Friday showed that inflation had eased, making it less likely that interest rates will rise. 

Gains may continue thanks to the strong economic environment, analysts said. 

Better figures 

"We expect Indian corporates to show sound earnings data, which could keep the markets buoyant," said Naresh Garg of Sahara Mutual Fund. 

Andrew Holland of DSP Merrill Lynch said: "We expect the markets to remain strong over the short term, probably ending the year higher than they are now." 

The Sensex has gained almost 9% this year, extending last year's near 50% surge. 

Underpinning the stock market has been foreign demand for Indian shares, as investors try to tap into one of the world's best-performing economy. 

At the same time, domestic demand has also remained steady. 

"Investors have been positively surprised by the stronger-than-expected appetite for issuance over the past month and also by favourable inflation data," said Rajeev Malik, an economist at JP Morgan Chase Bank. 

Software services companies Tata, Infosys and Wipro led gains on Friday, closing 4.4%, 2.9% and 3% higher respectively. 

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/6278008.stm

Published: 2007/07/06 14:49:12 GMT

&#169; BBC MMVII


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## Bushroda

*India's Wipro buys Singapore-based Unza for US$246m*
Channel News Asia, Singapore
Posted: 06 July 2007 2322 hrs 

BANGALORE, India : Wipro Ltd, which built India's third-largest software business after starting out as a maker of oils and soaps, said Friday it would buy Singapore-based consumer products firm Unza Holdings for 246 million dollars. 

Bangalore-based Wipro signed definitive agreements to acquire Unza in a transaction expected to be completed by the end of July, catapulting the combined entity into a strong Asian force, the company said here. 

Unza is Southeast Asia's largest independent maker and marketer of personal care products, with a presence in more than 40 countries. 

Unza has manufacturing plants in Malaysia, Vietnam, China and Indonesia. Its sales last year grew 14 percent in dollar terms, well ahead of market growth rates in the region. 

Wipro Consumer Care and Lighting reported revenues of 8.18 billion rupees (202.5 million dollars) for the financial year ended March, clocking growth of 36 percent. It makes soaps and office furniture and has domestic and commercial lighting businesses. 

The purchase is only the latest overseas asset acquisition this year by an Indian firm, attesting to the growing clout abroad of an economy that grew at a record 9.4 percent pace in the last financial year.


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## Bushroda

*Thriving in central India's suicide belt*
DOUG SAUNDERS 
From Saturday's Globe and Mail, Canada
July 6, 2007 at 7:33 PM EDT

YAVATMAL, INDIA  Amidst the sun-charred fields and sad villages of central India's suicide belt, you'll find a surprising burst of green fields, filled with a range of thriving crops and lined with fruit trees, an oasis of prosperity and success that seems to defy the depressing logic of the region's farm economy.

This thriving 25-hectare farm, run by a man who failed at cotton almost to the point of suicide himself, shows what can be done, with knowledge and planning, on the same stretch of soil.

Subhash Kuttall Sharma, a 55-year-old farmer with a seemingly endless supply of energy and a quiet smile, came here in 1960 with his father, who had joined thousands of people from India's northern states in the early years of the Green Revolution, hoping to grow high-yield cotton and soybeans for export.

He was among the first to adopt the chemical fertilizers and high-yield hybrid seeds of the Green Revolution, and in the early years they made good money. In 1973, he won a state award for running the best chemical-fertilizer farm in the region.

Then it all started to go wrong. His cotton yields plummeted, from 450 tonnes to around 50 tonnes. His sorghum plants lost 30 centimetres in height, dropping the yield from about 1,000 kilograms a hectare to less than 250. He took out a loan, and by 1992 he was deep in debt. In 1994, nearly bankrupt, he went to school and started studying other, older farming techniques.

Today, he practices a labour-intensive form of agriculture using many of the techniques that are called organic in the West. He preserves the monsoon rains by landscaping the fields and holding millions of litres in hand-dug pits. He uses manure and plant waste as fertilizer, and keeps one-third of his land fallow at all times.

And, most significantly for this troubled region, his farm requires a lot of labour: While conventional Green Revolution farms require one labourer for two hectares, he employs 1.5 labourers per .4 hectares, 45 employees for his 20-hectare farm. They're housed and fed at his farm; they all say they prefer this life to the devastation of cotton farming.

Before, I was taught that the only important thing was to maximize my yield each year, and I was so good at this that I won awards, he said, laughing, over a meal of curry and rice with his labourers. But it nearly killed me. I've realized that sustainability and diversity are much more important than yield: You plant six or eight different crops, so that even if half of them fail, you'll still get by.

Actually, he gets by very well. Last year, he harvested 500 tonnes of produce from the 20 hectares he cultivated, generating $20,000 before his labourers were paid (at around $1 a day each). This is a huge return by Indian standards, allowing him to build a big house in town. He is able to keep an eye on futures markets, so he can predict which crops will be making good money in a year's time  something that the tiny, impoverished farms of India are unable to do.

Agriculturalists describe this sort of farming as the solution to the crises of the developing world  they employ a lot of people, protect farmers from failure, and satisfy consumers with high-quality organic produce. But they require a lot of training, and farm colleges in countries such as India do not generally teach these methods.


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## Bushroda

*Ethiopia connects to Indian schools, hospitals with new 'e-network'*
Sydney Morning Herald, Australia
July 7, 2007 - 2:50AM

Dr. Desalew Mekonnen, a first-year medical resident at Black Lion Hospital in the Ethiopian capital, mulled over a patient's electrocardiogram and frowned.

A consultation was in order. Desalew called upon a more experienced physician _ in Hyderabad, India _ by Web cam as part of a new US$116-million project that links Indian hospitals and universities to Ethiopian ones.

"It's very helpful," 28-year-old Desalew said Friday. "It will improve health care in Ethiopia."

The program, paid for by the Indian government, allows doctors, students and teachers in Ethiopia to take classes and consult with Indian specialists by Web cam and e-mail.

Pranab Mukherjee, India's foreign minister, inaugurated the program during a trip to this Horn of Africa nation, saying the two countries have strong ties. Ethiopia has 3,000 students enrolled in Indian universities, and Ethiopian universities have 450 Indian teachers, he said.

"Education and knowledge are the prime drivers of all economic and social development," he said. "We are happy through this project to be able to strengthen our cooperation with Ethiopia in this critical field."

Fekadu Mulugeta, a vice president at Addis Ababa University, said the program allows Ethiopia to harness India's expertise. With a booming technology industry, India's economy is expected to grow by 8 percent this year.

"It can help in providing education for people who may not be able to travel abroad," Fekadu said.

Getachew Wegaw, a student at Addis Ababa University, watches live telecasts with professors in New Delhi for his masters' in business administration.

"In this type of technology, we can ask questions, we can get answers live," said the 30-year-old student. "Very experienced teachers are leading the course. They are sharing their experience, their knowledge with us."

The program now involves four Ethiopian schools and hospitals. But officials said they hope it will eventually connect all 53 African nations to India by satellite and fibre optic connection.

"We are in the information age," said Tefera Walwa, Ethiopia's Minister of Capacity Building. "Our country cannot function in isolation of the rest of the world."


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## Bushroda

*Reliance supermarkets jostle for space in India*
International Herald Tribune
By Saikat Chatterjee Bloomberg News
Published: July 5, 2007

NEW DELHI: Ram Pukar doesn't need Wal-Mart Stores to make him worry about his fate as a fruit salesman in a New Delhi suburb. Homegrown stores owned by Reliance Industries have already cut his profit in half.

India's biggest company by market value is "trying to drive us out of business by offering cheap rates," said Pukar, who sells mangoes and pomegranates from his cart a kilometer from where a Reliance Fresh convenience store recently opened.

Investors concerned that the Reliance chairman Mukesh Ambani's lack of retail experience would be a handicap should think again. The Mumbai-based group is investing $6 billion in the stores, supported by record profits from operating the world's third-largest oil-refinery. The stores are opening as India's retail sales surge, rising as much as 35 percent a year driven by a burgeoning middle class.

The supermarket chain's sales will reach $25 billion by 2011, more than its total revenue last year, the company has forecasted. The growth, combined with profits from oil, will drive Reliance shares to 2,060 rupees in the next 12 months, Goldman Sachs Group analysts said in a June 18 note.

"They have entered a virgin area, very, very early, which is growing at a phenomenal pace," said Chakri Lokapriya, who manages $470 million in shares, including Reliance, at BNP Paribas Asset Management.

Reliance shares are up 34 percent already this year, giving the company a market value of $59 billion. The company's net profit reached 109 billion rupees in the year ended March 31.

Reliance is getting into the market before Wal-Mart, the world's biggest retailer, because the Indian government does not currently allow foreign companies to open supermarket chains in the country. Carrefour and Tesco, Europe's biggest food retailers, have also expressed interest in entering the market. Single-brand retail outlets owned by foreign companies are permitted.

The Indian government commissioned a study about the impact of large retailers on the nation's economy before making a decision on allowing foreign investment in retail. The results are expected to be released within months.

Wal-Mart has instead entered into a wholesaling joint venture with the India-based Bharti Group, controlled by the billionaire Sunil Mittal.

Wal-Mart aims to sell goods to retailers, including small store owners, to help them "lower costs and increase profits," wrote Kevin Gardner, a spokesman for the Arkansas-based company, responding to questions in an e-mail.

By 2010, there will be 65 million middle-income households in India, up from about 40 million last year, according to McKinsey estimates.

"The economy is growing by more than 9 percent and even if Reliance takes between 20 percent to 25 percent market share of the organized retailing, they will still have a very huge business," said Suhas Naik, who manages the equivalent of $100 million in stocks, including Reliance Industries, at IL&FS in Mumbai.

For now, most produce shopping takes place on street corners where vendors in pushcarts jostle for space. The vendors shout out what they have on offer to lure customers -who then elbow each other to pick the best vegetables from wicker baskets lying on the ground.

Such outlets control 96 percent of the country's retail market, according to a New Delhi-based consulting firm, Technopak Advisors.

Reliance and other retailers, such as Pantaloon Retail India, want to change all that. Reliance's stores sell vegetables, fruits and even flowers used for offerings to Hindu deities under one roof. The stores also sell staples such as sugar and rice for less than the neighborhood stores.

Reliance, which opened its first store on Nov. 3, is reaping its home-court advantage to grab more shoppers like Kavita Gupta. Gupta enjoys the unaccustomed pleasure of shopping in an air-conditioned store.

"The shopping experience has become much better, I can avoid the heat outside and can get most of the stuff I need under one roof," Gupta, 37, said.

Other companies plan to follow suit: Bharti Group and Aditya Birla Group are among other companies that are set to start nationwide retail chains within the next year. Tushar Pania, a Reliance spokesman, declined to comment on the company's plans.

Street vendors and some politicians are fighting the trend. The Indian government's Communist allies oppose any opening to overseas retailers on the grounds that it will displace small retailers and hurt the livelihoods of those who work there.

India's Congress Party, which leads the governing coalition government, wants to have safeguards from the government before it allows foreign investors greater access to the nation's retail industry, which accounts for about 7 percent of the Indian workforce.

Others have taken a more violent approach. A group of protesters belonging to the Indian Justice Party stoned a Reliance store in New Delhi last month.

"We feel that big companies shouldn't enter the retail business be it Indian or foreign," Udit Raj, chairman of the party, said in an interview in New Delhi. "Small vendors are facing total starvation."

Reliance Fresh outlets in Ranchi, in eastern India, and Indore, in central India, have been attacked by traders. On May 27, vegetable vendors held a one-day strike to protest the opening of Reliance Fresh stores. Traders also went on protest marches in the western city of Ahmedabad against retail chains, the Press Trust of India reported.

As for Pukar, he's not optimistic that either the country's cart vendors or the nation's consumers will win. He said, "once we are gone, Reliance will raise the prices."


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## Bushroda

*25,000 level within 3 years?*
7 Jul 2007, 0236 hrs IST,Prabhakar Sinha,TNN

NEW DELHI: If the economy continues to perform at the present level, the 30-share sensitive index of Bombay Stock Exchange could cross the 25,000 mark in the next three years. 

This will prove the high networth investor Rakesh Jhunjhunwala correct, who in 2005 had predicted that the sensex would cross the 25,000 level in the next five years. 

At present, the industrial sector is growing at over 13%. In April 2007, the rate of growth of industrial sector was 13.6% at the constant price. If annual inflation of 5% is taken in to account, on the nominal term, the industry should be growing at over 18%. Normally, a senior economist of a financial institutions said, performance of large Indian companies on the whole is better than the overall industrial growth, That means, the sensex stocks turnover should grow at higher than the 18%  the nominal Industrial growth rate. 

If the profit margin of the companies remained at the present level, the profitability of companies will also grow at over 18% in times to come. In fact, in the past four years, the profitability of sensex companies grew at over 20%. 

If the profitability grew at 18.6% in the next three years, the sensex should be at over 25,000 level if the shares continue to quote at the present level of 22 times of the underlying earnings. That means, the sensex would also grow at the same level. 

In last four financial years, the sensex has improved at an annual growth rate 44% from 3048 as on March 31, 2003 to 13,072 on the last trading day of the last financial year. In the last two years also, the sensex grew at 42% compounded annually. However, in 2006-07, the sensex improved by only 16% from 11,280. But, in the last over 3 months, the index has increased by 15%. 

Market sources said that going by the future demands in the Indian and global markets for goods and services produced by Indian companies, their performances are likely to continue be good. 

He said that in the last two years, Indian companies have emerged stronger and more efficient because of global competition. 

China is no more a threat to the Indian companies, instead its high growth has provided a huge markets to Indian companies. 

He said that the future driver for growth in India would be financial markets, real estate, retail and healthcare including pharmaceuticals. Software and auto ancillaries will continue to boom. On top of this all, India has emerged as important investment destination for investors all over the world. Therefore, he said, going by the present trend, sensex might cross the 25,000 mark much before 2010.


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## Bushroda

*Anheuser-Busche to sell Indian-brewed Budweiser*
International Herald Tribune
The Associated Press
Published: July 6, 2007

MUMBAI, India: India, this Bud's for you.

Anheuser-Busch, the world's largest brewer, introduced an Indian-brewed Budweiser on Friday as part of the company's plan to tap into the country's booming economy, a top official said.

While India is one of the world's largest markets for spirits, it ranks near the bottom among beer-guzzling nations.

Anheuser-Busch, however, sees great potential in the country.

"India has strong and consistent economic growth," said Stephen J. Burrows, chief executive officer of Anheuser-Busch Asia-Pacific operations. "It represents a major entry point for Anheuser-Busch."

Budweiser will initially be on sale only in southern and western India. The company does not sell imported Budweiser in the country.

"The first step is to get the beer established, then we will look at expansion," said Burrows.

India's beer industry posted a blistering 20 percent growth per annum over the past two years, up from 10 percent per year over the past decade. The growth has been fueled by India's growing middle class and its huge population of young people. Roughly 60 percent of the nation's 1.2 billion are people under the age of 30.

"The emerging strong middle class has historically been good for the beer industry," said Burrows.

The St. Louis-based beer maker announced a joint venture in February with Crown Beers India Ltd. to brew, market and distribute Budweiser and other brands in India and set up a new brewery in the southern Indian city of Hyderabad.

With a flat U.S. beer market, Anheuser-Busch has sought overseas growth. It began brewing in China in 1995 and that country's beer market pushed ahead of the U.S. in 2002 as the world's biggest.

Anheuser-Busch has a 27-percent share in the China brewer Tsingtao Brewery Co., China's biggest brewer, and a 50 percent ownership in Grupo Modelo, Mexico's leading beer-maker.

The company faces tough competition in India with United Breweries Ltd., the world's second-largest alcohol manufacturer, which has about 45 percent of the beer market share, followed by London-headquartered SABMiller with some 36 percent.

The Crown Group operates businesses in India's agriculture industry through seed production and export businesses. The group also deals with industrial exports and real estate.


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## Bushroda

*Japan's JAL to fly daily to New Delhi*
Channel News Asia, Singapore
Posted: 06 July 2007 2257 hrs 

TOKYO : Japan Airlines will start flying daily between Tokyo and New Delhi to meet strong business demand, the airline said Friday. 

JAL currently operates four flights per week on the route, offering business and economy class cabins, the airline said. 

"As business passenger demand on this route has been particularly strong, JAL has decided to increase flight frequently further," it said in a statement. 

The daily service will start from October 28, it said. 

Japan has been trying to build closer political and economic relations with India, in part to counter frequent rifts with China, although Japan's trade with China still far surpasses its investment in South Asia. 

Japanese Prime Minister Shinzo Abe will visit India next month along with a commercial delegation headed by Fujio Mitarai, chairman of the influential Japan Business Federation. 

Trade Minister Akira Amari recently visited India and announced an initiative to help develop the South Asian country's infrastructure.


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## Neo

*Indian telecom industry revenue up ​* 
BANGALORE: Indias telecom industry sales exceeded one trillion rupees ($24.76 billion) for the first time in the last business year on the back of an increasing subscriber base, according to a survey on Friday. 

Sales reached Rs1.07 trillion in the year ended March, a 22 per cent increase from a year earlier, said the annual survey by Voice and Data, a telecom industry publication. Mobile-phone company revenues grew 56 per cent to Rs561.8 billion while fixed-line sales declined 11 per cent, it said. The number of cellular and fixed-line users rose 46 per cent to 206 million in a country that has become one of the worlds fastest growing telecom markets as economic growth accelerates, reaching 9.4 per cent last year. 

With increased connectivity, one in five Indians now has access to a phone, said the survey. Cellular subscribers increased almost 73 per cent to touch 157 million, making up for a 3.3 per cent decline in the number of fixed-line users to less than 50 million. This is a nation gone mobile, Prasanto Roy, chief editor of the publication, said in a statement. The moneys all in mobility. So is the growth. 

A steep decline in the cost of owning a cellular handset and a connection has led to a surge in the use of mobile phones in the nation of 1.1 billion people. In the last financial year, India added more mobile-phone users per month than China. An average 5.5 million cellular lines were sold every month.

http://www.thenews.com.pk/daily_detail.asp?id=63434


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## Neo

*Indian inflation rises​*
NEW DELHI, July 6: Indias inflation rate jumped by a surprise tenth of a percentage point, snapping 10 straight weeks of decline, but remained at a 14-month low, official data showed on Friday.

Inflation rose to 4.13pc for the week ended June 23, on the back of higher food costs, from 4.03pc a week earlier, but was lower than the 4.84pc registered a year ago, according to the wholesale price index, Indias closely watched cost-of-living monitor.

This weeks figure, which defied analysts forecasts that it would remain flat, was still comfortably within the central banks medium-term inflation target of 4.0 to 4.5pc and well below its goal of close to five per cent for the current financial year to March 2008.

Economists have said the central bank will be closely watching the inflation pattern ahead of its next policy review on July 31, but they expect it to leave interest rates on hold.AFP

http://www.dawn.com/2007/07/07/ebr11.htm


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## Bushroda

*Graduates celebrate India's clout*
*They recall how technology institute prepared many for their roles in America*

Tom Abate, Chronicle Staff Writer
Saturday, July 7, 2007

Several thousand graduates of India's elite university system gathered at the Santa Clara Convention Center Friday for an event that celebrated the growing economic and political clout of that nation's expatriates and touched on issues stemming from the increasing globalization of talent and innovation. 

The conference, which ends Sunday, brings together graduates of the Indian Institute of Technology. This network of technology schools, founded in the 1950s shortly after India achieved independence, has maintained its elite status by admitting just a few thousand students each year based on a competitive, nationwide exam. 

Rajat Gupta, a senior partner in the McKinsey & Co. consulting firm, and Dilip Venkatachari, who runs Google's mobile products division, described IIT as a university system that has graduated about 100,000 people in the past half century. About 25,000, like themselves, eventually immigrated to America and climbed the corporate and entrepreneurial ladders. 

Opening the event, Gupta recalled how this global gathering started five years ago with a meeting of 25 alumni at Stanford. "From those humble beginnings it is gratifying to have nearly 4,000 IITians gathered here in such a short time," Gupta said. 

To the extent this was a coming-out party for the Indian American lobby, its impact was somewhat tarnished by the last-minute decision of presidential candidate Hillary Clinton -- originally due to appear in person -- to address the group by satellite instead. During her 15-minute remarks, Clinton said she favors globalization and immigration, but suggested that Americans are getting short shrift from trends like outsourcing and the ever-widening trade deficit. 

"Americans are concerned about outsourcing and I think they're right to be," said Clinton, who argued for strengthening the education system to get more people, particularly women and minorities, into fields like engineering. At the same time, Clinton said, she favors the H-1B program that allows high-tech companies to hire college-educated foreigners and would support an increase in the number that U.S. firms are allowed to hire. 

The politics of immigration surfaced again in an afternoon news conference when reporters asked Indian American business and academic leaders to react to the congressional deadlock over immigration. 

"The day this country limits the reasonably free flow of skilled immigrants is the day we start going downhill," said Pradeep Khosla, dean of the college of engineering at Carnegie Mellon University. 

General Electric chief executive Jeffrey Immelt discussed the promise and perils of globalization -- and also played to the crowd. "I'm here today because I am a big consumer of the product, which is you," said Immelt, noting that GE employs about 1,500 graduates of the prestigious system. "Thirty-five of the top 600 people in GE are IIT grads." 

Arguing that "business in the 21st century is really the intersection between globalization and technology," Immelt spoke about the strength of the Indian economy and took a swipe at the political process. "The economy has now gotten to a point in India where the government can't screw it up," he said to applause. 

He also acknowledged the controversy that surrounds the growing integration of world economies. "I'm a globalist, you're a globalist," Immelt told his audience, saying the real question is whether the process would be slowed or stopped by political backlash. 

"If you put globalization up for a vote in the U.S., it would lose 60-40," he said, attributing this margin in part to "misinformation" but also because "the bottom 25 percent of the U.S. has suffered from a wealth standpoint." 

Immelt posed this challenge for his audience: "Can the standard of living of Indians grow one hundred-fold, which should be your goal, without the standard of living of Americans going down?"


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## Bushroda

*Growth self-accelerating, says Reddy*
BS Reporter / Mumbai July 3, 2007 

Yaga Venugopal Reddy, Governor, Reserve Bank of India, said there is tangible evidence of self-accelerating growth of the Indian economy.

"From an annual average growth rate of 3.5% during 1950 to 1980, the growth rate of the Indian economy accelerated to around 6% in the 1980s and 1990s. In the last four years (2003-04 to 2006-07), the Indian economy grew by 8.6%. In 2005-06 and 2006-07, it had grown at a higher rate of 9% and 9.4%, respectively," Reddy said while addressing the Central Bank of the Russian Federation on Monday.

Reddy added: "An important characteristic of the high growth phase of over a quarter of century is resilience to shocks and considerable amount of stability. We have witnessed one serious balance of payments crisis triggered largely by the Gulf war in the early 1990s. Credible macroeconomic structural and stabilization programme was undertaken in the wake of the crisis. The Indian economy in later years could successfully avoid any adverse contagion impact of shocks from the East Asian crisis, sanction like situation in post-Pokhran scenario, and border conflict during May-June 1999. Seen in this context, this robust macroeconomic performance, in the face of recent oil as well as food shocks, demonstrates the vibrance and resilience of the Indian economy."

According to the speech released by the RBI on its website today, Reddy also said there were signs of deceleration of credit growth recently.

"The acceleration of growth in the real estate sector has been reflected in the upward shift in the growth trajectory of credit extended by commercial banks, which in the past three years has been unprecedented in the history of the Indian economy. There has been some sign of deceleration in the recent period," he said.

Reddy repeated that the central bank expected economic growth of 8.5% in the fiscal year ending March 31, 2008, and wanted to contain inflation close to 5%.

Reddy also reiterated the stand of gradual reforms in the financial sector. "In view of the proven success of our overall approach to reform over the last fifteen years, there is considerable merit in pursuing the gradualist, participative and harmonious approach towards further reforms in financial and external sectors. Since it is generally accepted that financial and external sectors in India are reasonably strong and resilient, high priority is being accorded for further reforms in the fiscal sector, agriculture, physical infrastructure, especially in power and urban areas, and delivery of public services such as water, health and education.

"Progress in these sectors will help, over the medium term, enhance competitiveness and accelerate reforms in financial and external sectors, in a harmonious and non-disruptive manner, thus, reinforcing self -accelerating growth with assured stability."


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## Bushroda

*SBI's $1 bn infra fund in two months*
BS Reporter / Mumbai July 8, 2007 

The countrys largest lender, State Bank of India (SBI), has decided to join hands with foreign funds to set up a $1 billion infrastructure fund. It expects to launch the fund in the next two months. The money would be raised both in the overseas as well as domestic markets. 

An estimated sum of $475 billion is needed for infrastructure development in the next five years to support the growth momentum. The Indian economy grew by 9.4 per cent in 2006-07. A senior SBI official said, The fund will mainly meet the funding requirements for infrastructure, both in terms of equity and debt. It will be launched in two months. The infrastructure sector has huge requirements and there is no way of funding these projects through the normal bank financing route. 

The infrastructure sector accounted for only 7.6 per cent of the non-food credit as on December 22, 2006. The total outstanding loans to the sector stood at Rs 1,24,271 crore on December 22, 2006, a rise of 21.7 per cent over a year earlier. SBIs lending to the infrastructure sector has doubled in about 18 months and is around Rs 20,000 crore currently. 

The committee on infrastructure, headed by the Prime Minister, had pegged the investment requirements for airports at Rs 40,000 crore by 2010 and national highways sector and ports at Rs 1,72,000 crore and Rs 50,000 crore, respectively, by 2012. 

The private sector is expected to contribute a substantial part of this investment. India has the estimated potential to absorb $150 billion of foreign direct investment (FDI) in the next five years in infrastructure alone. 

The countrys largest engineering company, Larsen & Toubro (L&T), is also setting up a $1 billion fund to invest in infrastructure projects. L&T plans to raise $500 million in the next two to three months, with the company investing $50 million as seed capital. 

Infrastructure Development Finance Company (IDFC), which raised $519 million through the sale of shares to institutional investors overseas earlier this year, has set up a $5 billion infrastructure fund along with New York-based Citigroup and Blackstone.


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## Bushroda

*Net-driven education will yield billions*
8 Jul 2007, 0306 hrs IST,Abhay Vaidya,TNN

PUNE: Thanks to the internet and emergence of knowledge economy, education is becoming big business in India. Take the example of e-learning company Brainvisa, which provides corporate training modules to a large number of Fortune 500 companies and strives to become a world-class leader. 

"The opportunities are immense," says Brainvisa's 33-year-old CEO Supam Maheshwari, who is assisted by the other IITians who founded Brainvisa, Nitin Agarwal (30) and Vikas Kumar (31). "We are not serving even one per cent of the market share." 

Another company from the "Sequoia family" hit global headlines recently when its business model of 'providing online e-tuition to American schoolchildren' was highlighted by the prestigious newsmagazine, 'The Economist'. 

Based in Bangalore, TutorVista, which has provided e-tutoring to over 2,000 students in US and UK, has now turned its attention to Indian students, offering e-tuition from classes six to ten for the CBSE and ICSE curriculum. 

Last week, Hyderabad-based BodhTree Consulting launched 24x7guru.com to provide a diagnostic and self-assessment tool for students studying from class three to ten. After coming home from school, students subscribing to this educational service-provider will log on to this website and sharpen their learning by answering questions about the subjects taught in school. 

Rising affluence in the 250-million strong Indian middle class, the desire for quality education and expanding internet connectivity with better bandwidth are the driving forces of the nascent e-learning industry in the country. 

What is serving as another growth impetus for this industry is the fact that children are becoming increasingly computer literate and internet-savvy. 

Although not in the educational-tutoring space currently, Brainvisa's CEO Maheswari is keeping a close watch on this sector and says that it is beginning to "warm up". According to him, this sector has a fantastic growth potential, easily much more than Rs 15,000 crore which is the size of just one company selling soaps in India. 

He calculates that with the average Indian middle class family spending more than Rs 500 per month on education, the market is huge for the 250 million Indian middle class with purchasing power. 

At just Rs 500 per month, the annual educational market for this size works out to an astronomical Rs 1,500 billion or Rs 1.5 lakh crore. 

Even a small slice of this pie could mean a huge e-learning market waiting to be tapped in the country. 
Apart from the fact that the Indian education sector is second biggest in the world, next only to China, what gives Indian e-learning entrepreneurs a greater edge is the proficiency in English and IT. 

This offers it a global opportunity to earn in dollars as is being attempted by the new-start-ups and as has been demonstrated by pioneers such as Educomp Solutions Ltd and NIIT. 

The Brainvisa CEO is fascinated by American educational giant Kaplan which, in less than 10 years, grew more than tenfold to a $1.6 billion company in 2006. Kaplan provides a variety of educational needs to schoolchildren, college students and professionals. 

His optimism is shared by others in the industry such as Sanjiv Gupta, CEO, BodhTree Consulting, who observed: "Education is among the fastest growing service sectors of the economy and it is becoming a powerful and very important personal attribute." 

What makes these start-ups noteworthy is the innovative application of thought that is driving them towards new business opportunities in the knowledge economy.


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## Bushroda

*Duty cut brings cheer to beer guzzlers *
KAKOLY CHATTERJEE 

New Delhi, July 8: The cut in the duty on imported beer is expected to see the prices of foreign brands such as Heineken, Carlsberg and Tiger coming down by as much as 20 per cent.

While basic duties remain the same at 100 per cent for the alcoholic beverage, the additional duty of 75 per cent has been scrapped. Consequently, imported beer will cost less by Rs 15 to Rs 20.

Essentially, a bottle of Heineken which earlier retailed at Rs 100 would now be available for Rs 80, said Adil Mehra, managing director of GTFT  an importer of beer, wine and hard liquor.

However, with domestic prices ranging between Rs 30 and Rs 55, the 20 per cent reduction in imported beer prices would not bring any drastic shift in consumer preferences.

There will not be any considerable shift in consumer preference as domestic beer continues to be available at cheaper rates, said Rohit Mehra, MD of Mohan Brothers Private Limited.

For brewers in India, the growing middle and upper middle class represents a lucrative market. More people are taking to alcoholic beverages with changing tastes and lifestyles. 

Beer, being low in alcohol content, is often the preferred drink of the younger generation. 

The more affluent and widely travelled people among this section often prefer foreign brands.

Subhash Arora, founder of the Delhi Wine Club, said, With increased disposable income and refined tastes, sales of imported beer are going to increase. The market is set to grow at 15 per cent per annum.

Analysts said the Indian beer market was around 8 million hectolitres per annum which works out to a per capita consumption of less than 1 litre against 18 litres per annum in China. 

The Rs 8,000-crore plus domestic market, which is growing at 30 per cent annually, is mainly controlled by United Breweries and SABMiller, who together have about 25 breweries under their fold.

Breweries such as Mohan Meakins, Mount Shivalik, Yuksom Breweries, Devan Modern Breweries and Asia Pacific Breweries control nearly 18 per cent of the domestic market.

However, beer imports, which have been eased by lower taxes may actually be hit by big brands deciding to set up base in India.

Sources said global majors such as Heineken and Anheuser might launch their products in India some time in the future encouraged by the growing market. 

The current trend shows Indians are drinking more and more beer. Several factors are seen as driving this growth, including a buoyant economy, young population and a change in the licensing system.

With the Indian beer industry poised for a 30 per cent growth in the next two to three years, global players are getting ready to grab a larger pint, said Arora.

But if foreign brands are planning to make a pitch for Indian guzzlers, existing players such as United Breweries and SABMiller are also planning to widen their range.


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## Bushroda

*India quickens its growth*
Morris Beschloss
Special to The Desert Sun
July 8, 2007 

With the world's two most populous nations (China and India) setting a torrid pace in their battle for global economic supremacy, India is in danger of overheating. While most attention has been riveted on China's unprecedented expansion, democratic India has hit economic strides, putting it closely behind China's near double-digit gross domestic product achievement.

Although both nations belong to the exclusive one-billion-plus population club, each represents a different approach to global economic expansion.

While China is a highly disciplined state-directed economic superpower, India has depended on its unprecedented entrepreneurial skills to cut a wide swath in world economic leadership.

Coming to the game in the early 1990's, the Indian sub-continent is in danger of overheating as it's playing catch-up with its older rival. Under the leadership of Prime Minister Manmohan Singh, New Delhi is finally cracking the British-imposed bureaucracy that held back most of the commerce and industry comprised by the British infrastructure in the long period of colonization.

The first break came with the ascendance of Singh to the position of finance minister in 1990. Singh wisely circumvented the Socialist vise that was strangulating India's economy by developing India's version of Silicon Valley in the city of Bangalore, which had become an embryonic technology center even before Singh appeared on the scene.

With 50,000 engineers graduated in foreign universities as far back as the 1970's, India had no dearth of potential talent to flex its technological muscles.

The trouble was that homeland opportunities were few and far between. Since information technology was a "green field" discipline in the late 1980's, Singh successfully concentrated on keeping this new development out of the hands of Indian officialdom.

This led to a meteoric rise in the decade of the 1990's with generous government enticements bringing a large proportion of foreign graduates back to India.

But with this incidence of unbridled capitalism manifesting itself in Bangalore, even more traditional industries, such as steel, have unshackled themselves from bureaucratic restraints.

This has led to domestic expansion, recently reaching 9.2 percent, not far behind China's 10.4 percent.

This has superseded the plodding rate of 3 percent, symptomatic of the old India, which seemed to be going nowhere fast. At this new rate of growth, India is due to soon surpass Japan, trailing only the United States and China, if purchasing power parity is considered.

But unlike China, which has maintained moderate inflation and no trade deficit, India is incurring a 6.7 percent inflation rate, plus a widening current account deficit.

Much of this is due to an overheated expansion which is forcing practically all Indian plants to operate at maximum capacity; coupled with unprecedented consumer demand, which is driving prices up to new heights.

Despite India's phenomenal expansion, it's suffering from an inadequate infrastructure, which it has only recently begun to address.

Unlike China, and more like the U.S., India must pass new legislation through a fractious Congress headed by the ruling Congressional party, which recently regained power from the previously ruling nationalists. This massive sub-continent must also contend with indigenous states, some of which are run by left wing governments who don't share New Delhi's priorities.


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## Bushroda

*Were all on a spending spree* 
KRISHNA KANT AND PALLAVI MULAY
TNN[ SUNDAY, JULY 08, 2007 11:47:08 PM] 

The recent increase in interest rates and inflation fears may have failed to dampen Indias growth story, but the source of the economic bull run is about to change. Domestic investment  which, in the recent past, accounted for as much as half of the incremental growth in Indias gross domestic product (GDP)  seems to be peaking and making way for higher consumption demand. 

According to the latest data available from the Central Statistical Organisation (CSO), gross fixed capital formation (GDCF) accounted for 39% of incremental growth in GDP at current prices during FY07. The corresponding figure was 40% in the previous year. Most surprisingly, the share of private final consumption expenditure (PFCE) in incremental growth continues to rise after hitting a trough in 04-05. Last year, incremental growth in private consumption accounted for 47% of the economic growth  up from 45.2% in the previous year and 42% a year before that. 

Does this mean that Indias growth story is over? In the long term, there is an inverse relationship between consumption and investments and the latter is needed to sustain growth. In the immediate term, however, faster consumption growth will add to the growth story that began with the investment boom around five years ago. 

A diversified source of growth is always preferable to the one that is more dependent on only one source of growth. And anyway, at 39%, the contribution of investment demand to GDP growth is still higher than the historical average of around 32%. The share of consumption demand, however, is still below the historical average of 52%. 

This may have prompted leading brokerages and various agencies to revise upwards Indias FY08 GDP growth by 50 basis points from their previous estimates. In FY07, Indias GDP grew by 9.4%, faster than advance estimates, It was the fourth consecutive year when the economy registered accelerated growth. 

The growth was aided by resurgence in the industrial sector, followed by a strong capital expenditure (capex) cycle, which pushed up demand for all types of investments goods  plant & machinery, machine tools, metals and cement, among others. 

One immediate fall-out of the acceleration in consumption growth could be a faster growth in the topline of consumer goods companies. Going forward, expect a faster growth in demand for consumer goods, ranging from every-day use soaps to garments and consumer electronics. 

But what may have caused this shift in the source of Indias growth? One reason could be the recent rise in interest rates, which increased the cost of borrowings for companies and individuals. According to investment theory, every rise in interest rate makes a certain number of investment projects unviable. But why didnt the higher interest rate dampen consumption demand as predicted? 

A more plausible reason may be the long-term link between investment and income. Todays income  salaries, rents, interest income, dividends and profits  are the result of investments made in the past. The projects executed during the first half of the current investment boom have begun yielding results in the form of higher corporate income and government revenues. This percolates down to the households in the form of higher salaries, greater dividends, more interest earnings, rents or all of these. The end result is higher disposal income in the hands of individuals and families. 

Now, households may choose to either save their growth in income or increase their consumption to an equal extent or do both. While data on households savings for FY07 is still not available, there is a clear indication that they are now spending more on items of consumption. Is this the beginning of a consumption boom?


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## Bushroda

*The second wave* 
*Inspired by the tech growth story, Indian biotech sector is striving to move to the big league. Will it be the next big thing? *

BV MAHALAKSHMI & SUDHIR CHOWDHARY 
Posted online: Monday, July 09, 2007 at 0000 hours IST 

You could call IT an inspiration. As the Indian tech industry reaffirmed its $50 billion promise last week, the fledgling biotech sector seems to be getting ready to raise the bar too. 
Industry captains foresee a wave that could catapult Indian biotechminuscule compared to the IT sector, but high on potentialinto the big league. Hoping to be the next big thing in India after IT, they predict they could surpass the target$5 billion by 2010 from the current $2 billion and records growth much faster than the IT sector, going forward. 

Growing at a steady rate of 35% year-on-year, industry mandarins are wondering whether the $5 billion milestone was pegged lower and whether its time to raise the bar? Says Swati A Piramal, directorstrategic alliances and communications, Nicholas Piramal India, In fact, it is a fairly low target. Last year, the output from a small island state of Singapores Biopolis was $23 billion. This generated high-skilled jobs and huge value was added for Singapore. Similarly Taiwan, Israel and Korea are generating huge biopharma turnovers. Indian biotech sector, unlike the pharma and IT segment, is growing relatively at a faster pace. And, unlike the IT sector, it is focused more on products and comprises less of services. Certainly, there is a tremendous potential. In its latest global biotech survey, Ernst & Young ranked India number three after Japan and Korea in the Asia-Pacific region. 

Biocon CMD Kiran Mazumdar-Shaw says, We believe that this milestone can definitely be achieved by 2010. Innovation has to replace the generics and the mindset. Agrees Metahelix Life Sciences MD KK Narayanan, At the present growth rate of over 35% year-on-year, the Indian biotech sector should be able to reach $5 billion by 2010 in spite of the heightened competition from countries like China and some of the East European states. Agri-biotech is now the fastest growing area. However, this sectors growth is likely to plateau off in the next year unless new biotech crops (other than Bt cotton) are approved for commercial cultivation. 

Narayanan, who is also the president of Association of Biotech Led Enterprises (ABLE), says that Indian biotech industry is poised to grow much more than the IT sector though it cannot be strictly compared with the IT sector. Biotech needs large investments in infrastructure. Being R&D centric, there is a considerable lag phase before there is return on investment. The biopharma industry spends four times as much on R&D as the IT industry. Further, the number of patents filed in biopharma are much higher than the IT sector. 

Explains Piramal, Although the timelines of a product coming to market are higher, the risks are also more as only one in 100 medicines in research make it to the market. The only parallel that exists with the IT sector is the way the industry has grown; from services to products rather than from innovative products itself. 

Confidence from a resurgent Indian biotech sector, often called the second pillar of the knowledge economyIT being the firstemanates from the improved regulatory infrastructure and standards of bio-manufacturing, increasing R&D collaborations with the US and European companies and acceptance of Indian clinical data by international bodies like USFDA. The likes of Biocon, Wockhardt, Dr Reddys, Shantha Biotec, Bharat Biotech, Transgene Biotek, Panacea Biotech and Ranbaxy are emerging on the global scene with their own brands of recombinant products, which are increasing market share and rivaling leading global brands in their quality. 

Importantly, the sector is ushering in a reverse brain drain with hordes of Indian scientists coming back to take up work relating to drug discovery and clinical development. The governments adoption of a product patent regime, in full compliance with the provisions of WTO and TRIPS, has given a further impetus to the growth in this industry. This change in the intellectual property regime has prompted many Indian companies to dedicate innovative research. Bangalore alone witnessed investment commitments far in excess of Rs 1,000 crore from companies like Jubilant, AstraZeneca, GE Healthcare and Biocon, points out Mazumdar-Shaw. On its part, the department of biotechnology intends to expand the sector five-fold over the next five years, creating at least 10 biotech parks by 2010. 

Already, the Indian biotech sector offers a wide variety of products and services including into affordable vaccines, non-vaccine therapeutics, innovative product development and contract services, says Wockhardt chairman Habil Khorakiwala. Several Indian firms have focused their businesses on the development, manufacturing and marketing of vaccines. These include Indias first domestically produced recombinant human hepatitis B surface antigen (Hep-B) vaccine Shanvac-B, from Shantha Biotechnics, followed by Panacea Biotec, Biological E (Hyderabad) and Transgene Biotek, Bharat Biotech International which are involved in similar work. Indian firms are also making directed attempts to produce novel non-vaccine products. 

Analysts opine that growth engines could be biogenerics, agribiotech, nutraceuticals contract manufacturing, DNA microarray technology and data analysis services through bioinformatics companies. 

The nascent biotech industry is also learning lessons from its big brotherthe pharma industry. To sustain themselves in the long run, biotech companies will need to make the transition to innovative, R&D-driven enterprises, and will need to find creative solutions around challenges such as insufficient venture capital and indifferent public equity markets. 

On the biggest challenges biotech firms are facing in the current environment, analysts aver that the short answer to this problem is that we should develop our own technology; we should acquire so much intellectual property that the West will be as much dependent on us as we are on them. As Mazumdar-Shaw puts it: there is a transition from generics to new molecules in discovery research. In order to facilitate this, there is a need for large animal house facilities, regulatory infrastructure, private and public funding. 

Another big challenge Indian biotech firms face is raising capital. The Indian financial market is far more risk-averse than the US biotech, which forced biotech firms to focus on a revenue model based on services. As a result, few companies dared to invest in new drug development; most Indian biotech firms provided research services, clinical development and diagnostic services to keep their operations going. In that regard, most of these companies are emulating the outsourcing model of the software services sector. 

This, however, is fast changing by adopting the hybrid model where a part of the company focuses on delivering services, which then enables other units to work on new discovery programs. So building a biotech sector, which can manage to develop a large number of capabilities in drug development and manufacturing, is now happening more often. 

The India story has begun and it is by no means over. The importance of moving ahead with services and innovation together is what is the need of the hour and is going to put biotech as the next big thing happening for India after the IT revolution.


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## Bushroda

*Biggest B school on cards in Punjab* 
BALBIR SINGH 
Sunday, 08 July 2007

CHANDIGARH: UBS passout Anshu Kataria is all set to start the biggest (in terms of intake) business school of the region near Chandigarh. The above said B' School is coming up in village Nepra on Chandigarh-Rajpura Road, where the big players like Chitkara, Gian Sagar, SVIET have already established. 

Muktsar-born Kataria disclosed that in the year 1996, he had to wait outside UBS to get admission in Masters for more than 20 days. Even he was not having enough fees with him required for admission because of financial problem. But he was having dream in his mind to study in business school. Struggle for getting seat in business school motivated him to have his own business school one day. 

Son of noted academician Prof. D.C. Kataria who is renowned in North India for creating awareness of UGC NET Exam, Anshu Kataria at the age of 31 is intended to have the biggest B' School of the region with the intake capacity of more than 480 students by 2010. 

Having worked with renowned group like Desh Bhagat, Chandigarh; C.T. Institutions, Jalandhar, SVIET, Chandigarh; Ind Swift, Chandigarh and Outline System, USA at senior positions, Kataria says that in booming economy, the demand for management graduate have increased manifold, but supply is not increased which results into breaking all previous record in terms of pay packages of fresh MBA passouts. 

Kataria gets support from his wife Dr (Mrs) Parveen Kataria, Doctorate and Gold Medalist from UBS, PU in turning this dream into reality.She also have the experience of working with top B' Schools of the region like Gian Jyoti Institute of Management and Technology, Mohali; Centre for Management Training Research, Kharar; SVSM, Banur etc.The couple is going to set new benchmark for quality of education for new and existing business schools. 

It is to be mentioned that Aryans Group has already got Letter of Intent (LOI) for establishment of 2 business school namely Aryans Business School(ABS) and Aryans School of Advanced Management (ASAM) from All India Council for Technical Education, Ministry of Human Resource Development, Government of India, New Delhi.


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## Bushroda

*Medical tourism warts-and-all*
By Libby Peacock
The Australian

*LINDA Beier, an expatriate living in Hong Kong, was unhappy with the appearance of her teeth, so when she had the chance to join a friend for a 10-day break in Thailand she included a visit to a well-known Bangkok dental practice, where the problem was fixed for a fraction of the cost in her adopted home.*

Beier's dental procedure was just a tiny cog in the global medical tourism wheel which, according to some estimates, is a $50 billion global industry. 

Several hospitals in Asia have carved out such outstanding reputations that medical tourism has become a big money-spinner; the typical combined hospital and doctors' charges are 60 per cent to 85 per cent lower than those in, say, US hospitals. 

In Singapore and Thailand, government agencies have been set up to help market their expertise globally. Medical travel agencies have sprung up and top Asian hospitals routinely have international desks and services to assist overseas patients with everything from doctors' appointments to accommodation. 

*Thailand*
Bangkok's Bumrungrad International Hospital has won international acclaim and is Thailand's best-known facility for health tourism. It was the first hospital in Asia, and the only one in Thailand, to be accredited by the US-based Joint Commission International, an organisation aiming to elevate healthcare delivery standards through an evaluation and accreditation process. 

Last year, 435,000 international patients from more than 150 countries were treated at Bumrungrad, with surgeries ranging from comprehensive check-ups and cardiac surgery to cancer treatment and plastic surgery. An elective coronary artery bypass operation that would typically cost $70,000 is about one-quarter of that fee at Bumrungrad. 

The hospital's group marketing director Ruben Toral says: "We deliver a Mercedes product at a Toyota price." He's referring to the three things Bumrungrad prides itself on: high-quality, international-standard medical services, immediate access to those services and specialists, and affordable prices. 

Mr Toral says the hospital is a one-stop medical centre with more than 900 internationally trained medical specialists under one roof. Patients arriving for treatment might well be guests checking in at a five-star hotel; there are concierge-style services and an electronic medical-records system that eliminates paper and waiting. 

Like other top Asian hospitals, Bumrungrad works with the travel industry to promote medical tourism and the hospital has a partnership with Diethelm Travel, Thailand's largest inbound tour operator, which has an office in the hospital; the hospital also has a new kiosk at Bangkok's international airport. 

All Bumrungrad's doctors are Thai, but more than half have international training or overseas board certification. 

Another Thai institution providing international services is the Bangkok International Hospital, which boasts a considerable portion of foreign patients. Its International Medical Centre features a team of multilingual interpreters. 

Also in Bangkok, the BNH Hospital offers a range of medical services, from orthopedic surgery and ophthalmology to pediatrics. Various check-up programs are on offer for set package prices (a general heart check-up including a chest X-ray, electrocardiogram, a blood test and tests for blood pressure and diabetes costs the promotional fee of $165 until June 30). The hospital's International Travel Medicine Clinic provides full medical services and immunisations and the "first comprehensive spine centre in Thailand". 

Southern Thailand's Phuket may be famous for its beaches and warm seas, but to some tourists it has another attraction: sex-change surgery. (This is one of the top 10 procedures attracting foreign patients to Thailand.) The Bangkok Phuket Hospital is part of the Bangkok Hospital Group, a network of 15 private hospitals. The hospital offers sexual reassignment surgery, as well as extensive health-check facilities (it has the equipment to perform full-body CT scans and 4D ultrasounds). Years ago the hospital set up a subsidiary travel agency, Phuket Health and Travel, offering packages for procedures such as plastic surgery, dialysis, hip or knee replacements and annual check-ups. 

*Singapore*
Singapore is another player in the Asian medical tourism market, which is unsurprising given the super-efficient city-state's reputation for sophisticated facilities and advanced technology. Critics say costs are 30 per cent to 50 per cent higher than those in Thailand but, even so, they remain appreciably lower than in the US and Australia. 

In 2003, Singapore created Singapore Medicine, a government-industry partnership to develop Singapore as an international hub for medical travellers, research, conventions and education. 

According to Singapore Medicine director Jason Yap, Singapore received 374,000 healthcare visitors in 2005 and services ranged from transplants and hip replacements to fringe procedures. 

The eMenders group consists of more than 50 specialists based at the Mount Elizabeth Medical Centre in Singapore, covering more than 25 specialty areas. All the doctors have internationally recognised qualifications and have received their specialty training, or additional training, at leading institutions in those countries. 

*Medical tourism vs medical travel*
According to eMenders chief executive Moonlake Lee, it is important to differentiate between the terms medical tourism and medical travel. Most eMenders patients fall into the category of medical travel (they go to Singapore primarily because of medical reasons). For other patients, medical services may be incidental to their trip; those in this category mainly have elective, cosmetic or minimally invasive procedures, such as dermatology, dental, general health screening and aesthetic procedures. Many patients also come to seek second opinions on treatments or on diagnoses made by their doctors back home. 

The Mount Elizabeth Hospital is owned by the Parkway Group, which also owns the East Shore and Gleneagles hospitals in Singapore and a network of hospitals in Asia. Parkway's International Patient Assistance Centre helps patients to access the right channel of expertise and assists with travel and other necessary arrangements. 

Dentistry also draws international patients to Singapore. Doctor Ansgar Cheng of Henry Lee Dental Surgery says dental services have been provided at the Mount Elizabeth Medical Centre for more than 27 years and overseas patients come from throughout Asia, Australia and New Zealand. 

The practice also has a growing number of clients from Russia, Canada, Britain and the US, says Dr Cheng, who has fellowships in Singapore, Canada and Australia. Typically, international patients seek procedures such as dental implants, crowns, veneers and dentures. 

Another Singapore hospital with an international patients' centre is Raffles Hospital, which offers fixed-price packages, from screening for osteoporosis for about $S100 ($80) to total knee replacements. The package price for a coronary artery bypass graft runs at $14,000 for up to an eight-night stay with two nights in the intensive care unit. 

*India*
Think of India and images of ancient temples, tigers, call centres and the information technology boom may jump to mind. These days, health care is also on the list. India has some excellent medical care providers; in 2004, Indian facilities treated an estimated 150,000 medical tourists. 

Cardiac care is one specialty drawing overseas patients to India. The Escorts Heart Institute and Research Centre in Delhi is a state-of-the-art institute where more than 35,000 open-heart operations have been performed. 

At Escorts, open-heart surgery costs about 200,000 rupees ($6000). Like most international hospitals in Asia, the centre helps foreign patients with visa arrangements, airport pick-ups and accommodation. 

The Apollo Hospitals Group runs hospitals across India, including in Delhi, Hyderabad, Chennai, Bangalore and Kolkata. Some patients are also drawn to India's holistic approach to healing, where disciplines such as yoga and meditation may be used alongside the latest medical techniques. Various city hospitals across India have ayurveda natural healing centres. 

The Wockhardt Hospitals Group has a chain of super-specialty hospitals, such as the Wockhardt Eye Hospital, Wockhardt Bone and Joint Hospital and Wockhardt Heart Hospital in Mumbai, and others in Bangalore, Hyderabad, Kolkata and Nagpur. The group has an association with Harvard Medical International, an arm of the Harvard Medical School. 

Other Indian hospitals treating increasing numbers of foreign patients include Global Hospitals, a dedicated centre in Mumbai for multi-organ transplants also focusing on cardiology, liver diseases, oncology and haematology. There is also the well-regarded L. V. 

Prasad Eye Institute in Hyderabad. The Ruby Hospital in Kolkata even has an exclusive lifestyle floor, The Enclave, housing private apartments. 

*Malaysia*
At the forefront of medical tourism in Malaysia is the state of Penang, where the Government is actively promoting its private facilities for cosmetic surgery. Hospitals drawing international patients include the Gleneagles Medical Centre with its own foreign patients' service and a range of services and packages (a standard executive health screening test including examination, electrocardiogram, chest X-ray and blood and other tests runs at about 455 ringgit or $160). 

The 258-bed Penang Adventist Hospital is a private hospital that is part of an international network of more than 500 facilities and claims to be the first private hospital in northern Malaysia to have performed procedures such as coronary bypass and laser heart surgery. 

Another Penang hospital that has established an international reputation in Southeast Asia is the modern Island Hospital which, apart from the usual facilities, also has a heart centre, urology centre, fertility centre and laser vision-correction centre. A standard executive screening program here costs $100. 

*Philippines *
The Philippines is also starting to cash in, with an official Philippines medical tourism program running in co-operation with its Department of Tourism. The first Philippines Medical Tourism Congress was held in Manila late last year and it's hoped patients from the US and Australia will be attracted in the future. Several healthcare facilities are participating in the program, but so far St Lukes Medical Centre in Quezon City is the Government's only full medical tourism partner. 

*Pre-travel warning*
A word of warning: do your homework before you fly. Asia is home to many international-standard hospitals, but if you don't choose well your medical holiday could end in disaster. 

*Botched: Warning on cheap 'holiday surgery' fixes »*

In the southern Chinese city of Shenzhen, for example, there are thousands of unlicensed centres offering all sorts of plastic surgery. But don't fall for it. Elective treatments at overseas hospitals or clinics are not claimable from Australian health funds and, if post-operative problems or negligence issues arise, suing a foreign doctor is likely to be a labyrinthine process. That bargain procedure may just be the final cut.


----------



## Bull

http://news.bbc.co.uk/2/hi/south_asia/6263984.stm


----------



## Bushroda

*Indian tech firms Q1 net to rise; rising rupee, wages a worry*
Mon Jul 9, 2007 1:10 PM IST 
By Sumeet Chatterjee

BANGALORE (Reuters) - India's top software services companies should report quarterly earnings rose 10-25 percent as they won more outsourcing business from Western clients, but wage increases and a stronger rupee will have dented margins.

Analysts are bracing for a slowdown in earnings growth, and will be watching if companies lower their forecasts even though the outlook for new outsourcing contracts remains buoyant.

The rupee, which rose 6.8 percent against the dollar in the June quarter to 40.72, poses a big problem for software services exporters that get more than 60 percent of their revenue from the United States.

Every 1 percent rise in the value of the rupee against the dollar shaves 30-50 basis points from operating margins of Indian software services exporters, analysts said.

This would have lowered the net profit of top companies by 1-15 percent in the three months ended June from the March quarter, they said, with wage rises and costs related to getting U.S. visas for work permits at client sites.

Analysts at Westpac Bank expect the rupee to rally further to 39.4 per dollar by the end of the year.

Even so, margins for the top software companies are still well in the double digits, and over 20 percent for the top 3 exporters.

Infosys Technologies Ltd., which kicks off the results on Wednesday, is expected to post net profit rose 21.2 percent in the fiscal first-quarter ended June from a year earlier, according to a Reuters poll of 10 analysts.

Compared with the March quarter, the estimate will be 15.3 percent down, it showed.

"The June quarter was definitely a very difficult quarter for all the software companies," said Tejas Doshi, a sector analyst with Mumbai brokerage Sushil Finance.

"Most of the firms give wage hikes in the first quarter. On top of it, the sharp rupee appreciation has come as a major blow for all. The pressure on margins will definitely be there."

Wages in the sector are rising by about 10 to 15 percent a year, compared with 2-6 percent in the West, as companies try to retain staff from being poached by rivals such as IBM and Accenture.

Tata Consultancy Services, India's top software exporter, is expected to post 25 percent rise in quarterly earnings on July 16, followed by number-three Wipro up 22.3 percent on July 19. 

*SLOWING GROWTH*

India's booming software services industry has been winning large outsourcing business from overseas clients like ABN AMRO, Airbus, and Qantas but growth is expected to slow.

Last week, an industry body forecast software services exports would rise 26 to 29 percent to around $40 billion in the fiscal year to March 2008, slower than a 33 percent rise in 2006/07.

"While operationally we expect positive comments by companies in terms of volume growth, guidance in U.S. dollar terms and pipeline, the street focus, in our view, would continue to be on the rupee movement," SSKI India Research said in a report.

The rupee has risen more than 9 percent against the dollar in 2007, propelled by rising foreign investment in the fast-growing economy. This reduces the amount of rupees that exporters get when dollar earnings are converted.

Brokerage Kotak Institutional Equities said it expected profit margins to decline by 250 to 350 basis points for companies like Infosys and Tata Consultancy that had raised wages in the June quarter.

It expected Infosys to cut its earnings per share guidance by 5 to 7 percent in rupee terms for the year to March 2008, while fourth-ranked Satyam Computer Service Ltd. may lower by 1.7 percent due to the stronger rupee.

Infosys shares fell 4 percent in the June quarter, while Tata Consultancy lost 6.7 percent and Wipro shed 7 percent. All were weighed down by foreign exchange and margin pressure concerns.

In comparison, the sector index dropped 0.6 percent while the main BSE index rose 12 percent.

But analysts said the drop in prices offered opportunities for investors.

"Business momentum continues to be strong with pricing on an uptrend... reasonable valuations provide a good entry point for long-term investors," Surendra Goyal and Hitesh Shah wrote in a Citigroup research report.


----------



## Bushroda

*A Reunion at the "MIT of India"*
TIME
Monday, Jul. 09, 2007

Google, Microsoft and General Electric came to Santa Clara, Calif., last weekend, and all but begged graduates of one of the world's top engineering schools to work for them. Google spent $200,000 to be the lead sponsor of the four-day-long reunion of 3,500 alumni. Microsoft's research center in Hyderabad came calling. The CEO of GE, Jeff Immelt, already employs 1,500 graduates and says he needs more. Stanford? MIT? Harvard? Nope. This was a gathering of graduates of the Indian Institutes of Technology.

Prime Minister Jawaharlal Nehru started the Indian Institute of Technology in 1950 because he recognized that his new country needed builders engineers who would give India the same vitality that was turning the United States into a superpower. The IIT system now includes seven campuses, and its graduates quickly became India's technological elite. A half-century later, their influence is almost as great in the U.S., where 25,000 of IIT's 100,000 graduates live. IIT grads include venture capitalists Vinod Khosla, Kanwal Rekhi and Yogen Dalal; former McKinsey managing director Rajat Gupta; Vodafone CEO Arun Sarin and 35 of the top 600 executives at GE. Silicon Valley couldn't run without them, and India's booming tech economy has opened up another world of opportunity. "You've almost got too many choices," Immelt said in a speech to the group on Friday. Spend some time in the world of IIT, and engineering almost feels  well, glamorous.

IIT has often been called the MIT or Harvard of India, but there's a big difference  IIT is a lot more selective than the top Ivy League schools. About 250,000 Indian students take the first screening exam for a spot at an IIT; 100,000 make it to the next round; but only 4,000 are eventually selected. Even if they could make the cut at IIT, however, the brightest young American students are less likely now than they were a generation ago to choose engineering. The number of engineering grads in the U.S. peaked in 1986 at close to 80,000, and has fallen to about 70,000 now. "Engineering has played second fiddle to other professions in the U.S." says Subhash Tandon, a 1972 IIT grad. "There isn't a prime time TV show about engineers."

But it will take more than a CSI: Palo Alto to reverse that trend. Engineering in the U.S. needs a rebranding. IIT went through such a transformation after the tech bubble burst in 2001, when engineers  Indian and American alike were being laid off by the thousands. That's when some of the school's most prominent alumni decided to turn IIT into a brand combining the brainpower of engineering with the excitement (not to mention the big money) of entrepreneurship, by playing up the accomplishments of IITans like Umang Gupta, CEO of the web services company Keynote and employee No. 17 of the company that later became Oracle. Gupta is a rock star to young IITans, who say he understands their desire to take what they know and build something bigger out of it. "Everybody wants to start a company," says Deepak Goel, a 1999 IIT graduate and design engineer at Microsoft.

Making a mark in the global economy, however, means becoming a global citizen. "How well do you travel?" Immelt asked. It's a lesson that U.S. workers, too, are starting to learn. Satish Bhat, program manager of Microsoft's development center in Hyderabad, says he's been taking on not just Indians who want to move home, but also "diversity hires"  Americans who want to move to India. "That's where the action is," Bhat says.

Still, the IIT boosters are aware of the challenges of globalization and those it leaves behind. Immelt said India's success will be defined by its ability "to make the pie bigger." Hillary Clinton, who spoke by satellite to the crowd (a decision that left many at the conference wondering whether she was trying to distance herself from India), asked these engineers, scientists and business people to use their skills to create "a shared prosperity for America and India." IIT graduates helped build the technology that made globalization possible. Perhaps they'll also be the ones who make it work for everyone.


----------



## Neo

*Railways real estate auction​*
By Anand Kumar

INDIAN Railways is the biggest landowner as its track network is spread across 63,000 km across the nation. But it also happens to be one of the most inefficient landlords, and has a terrible track-record of managing the vast tracts of land.

Even in cities like Mumbai, Delhi and Bangalore, where land is at a premium, the railways have mismanaged their estates, resulting in hundreds of acres being occupied illegally by the land mafia. After the land sharks acquire the properties  obviously in league with some officials  they put up slum colonies and rent out the shelters to the poor and needy.

Once an illegal shanty comes up on public property, it is a time-consuming and near-impossible task to get them relocated. It is not just the courts and local politicians who are opposed to the forceful eviction of the occupants, but even international organisations like the World Bank do not extend funding in the absence of a resettlement of persons likely to be displaced by a project.

It is only recently that Indian Railways has realised the worth of the land owned by it. In places like Navi Mumbai, a satellite town on the outskirts of Indias financial and commercial capital, the railways have capitalised on their land holdings, putting up sprawling IT parks and office complexes on top of railway stations.

Of course, these developments occurred because of a smart joint venture partner, the Maharashtra government-owned City and Industrial Development Corporation (Cidco), which has been ensuring commercial exploitation of the land. Recently, Cidco and the railways auctioned off tens of acres of land outside new stations in Navi Mumbai, fetching them billions of rupees.

Similarly, in the national capital, the Delhi Metro Corporation  which has built an impressive mass rapid transit network  has been auctioning off land outside the new stations profitably, and top developers have built shopping malls and commercial office blocks.

Railway stations are prime commercial properties because of the fact that thousands of passengers traverse through them. Mumbais suburban railway network carries over six million passengers daily, many of who would prefer to do their daily shopping  for vegetables, fruits, groceries, and essential items  near the stations.

While Indian Railways failed to capitalise on this aspect, enterprising traders, hawkers and vendors have exploited it to the hilt. But hawkers and vendors occupy narrow corridors leading from the stations to bus stands, resulting in further congestion. In Mumbai, many of the railway over-bridges are also occupied by hawkers, who block the smooth flow of passenger traffic.

But the suburban railway management has now realised the potential in exploiting the little land that is still left with it, and is planning to auction off space above and below railway stations, and also in the neighbourhood.

Indian Railways, under the stewardship of Lalu Prasad Yadav  who has turned out to be a surprisingly shrewd and pragmatic minister  is now launching an ambitious expansion project. It plans to promote two major dedicated freight corridors  linking Delhi to Mumbai and Kolkata.

These access-controlled corridors would see high-speed freight trains lug cargo in modern containers, from and to the two major ports (Mumbai on the west coast, and Kollkata on the east) to the countrys heartland. Indian Railways has a pathetic track-record in cargo movement, and many private companies prefer sending their goods (including automobiles, consumer durables, industrial products, etc) by road  though the costs are higher  because of factors like safety and timely delivery.

Unfortunately, though Yadav announced the ambitious Delhi-Mumbai dedicated freight corridor ( the nearly 1,500-km-long corridor would cost about $7 billion) nearly two years ago, there has been little movement on the ground. A special purpose vehicle (SPV), the Dedicated Freight Corridor Corporation, was set up last year, but the project has been moving at a painstakingly slow pace.
 
The Indian Railways, managed by a board, is a top heavy and centralised organised, with little autonomy for divisional railways and other units. Even today, the Indian Parliament has to pass the railway budget, and even senior officers in other parts of the country have little freedom and have to approach the board for clearances.

Allegedly autonomous corporations set up by the railways have failed miserably, as bureaucrats in Delhi are loathe to the idea of allowing managers take decisions on their own. Organisations like the Delhi Metro Corporation, or the Konkan Railway  which built a new railway line along the western coast of the country  have survived and thrived thanks to the presence of strong chief executives who have refused to kowtow to the babus in Delhi.

The managing director of Delhi Metro, E. Sreedharan, is a much-respected professional, who brooks no interference from any quarters. He built the metro in a record time, and has ensured its autonomy. Stung by an independent Delhi Metro boss, the railways were reluctant to allow autonomy for metros in other cities.

But state governments, who are joint venture partners in metro corporations, have managed to win independence for new corporations in cities like Mumbai and Bangalore. These mass rapid transit networks are being promoted under public-private partnerships, with private (including international) partners managing the show.

The delay in building the Delhi-Mumbai corridor will prove to be prohibitively expensive for one of the biggest projects being taken up in India. The Delhi-Mumbai Industrial Corridor (DMIC), which will come up along the freight corridor, envisages an investment of a whopping $90 billion over the next few years.

The corridor will see hundreds of industrial clusters, mega power plants, ports and airports come up along side. It is expected to generate three million jobs in the manufacturing and processing sectors, lead to the rapid industrialisation of at least half a dozen states, triple industrial output in the region and quadruple exports from the hinterland.

The corridor is being partly-financed by the Japanese government, and dozens of Japanese corporations are eager to invest in units and in the infrastructure. Last week, Akira Amari, Japans minister for economy, trade and industry, visited Delhi and Mumbai, and worked out the modalities of the mega project with Kamal Nath, Indias commerce and industries minister. He also met top industrial barons in Mumbai.

The project, which was conceptualised last December, when Indian Prime Minister Manmohan Singh visited Japan, is likely to kick off formally next month, during the official tour of Japanese Premier Shinzo Abe to India. Work on the project is expected to begin in January, and is likely to be completed within seven years.

According to Amari, the corridor will trigger off an industrial revolution in India. The Japanese delegation included top executives from leading companies including Suzuki Motor Corp, Honda Motor Company, Mitsui & Co, Sony Corporation and Hitachi Ltd. All of these corporations are eager to set up units, and hope to establish a regional base along the corridor, to service the European and African markets.

Of course, Indian government leaders, stung by the controversies relating to land acquisition for special economic zones (SEZs), have made it clear that the government would not be involved in acquiring land for the project. Investors will have to negotiate with farmers and landowners, to prevent the kind of violence that broke out in West Bengal recently.

Politicians and state governments are also lobbying for a piece. Nath, the federal minister  who is from Madhya Pradesh  was annoyed that the corridor would not cover his state. He warned that the project would not be a success if Madhya Pradesh  Indias largest state  was not included.

But analysts feel that the project  initially expected to cost around $50 billion  would become prohibitive if the government now decides to divert the corridor to other near-by states and cities. A direct route between the north Indian markets and the western coast ports would cut down travel time and also result in significant savings.

It remains to be seen whether the ambitious project will take off smoothly, and attract huge investments, or whether it will fall victim to petty politicking.

http://www.dawn.com/2007/07/09/ebr11.htm


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## Bushroda

*Mutual synergies* 
Mail & Guardian, South Africa 
Navdeep Suri: NEWS ANALYSIS 
09 July 2007 11:59 

When the Confederation of Indian Industry decided to set up an India Business Forum (IBF) here last March, they were pleasantly surprised to discover that as many as 36 Indian companies have resident offices in South Africa.

Surprised because, since 1948, India had enforced economic sanctions against the apartheid regime with such vigour that a flourishing trade in commodities like jute and tea had come to a grinding halt and by the time we resumed full relations in 1994, our economic and commercial links were non-existent. Trade is booming, as the accompanying articles attest.

Investment flows are another important indicator of the growing economic partnership. Accurate FDI data is much harder to obtain than trade statistics, but we estimate that Indian companies in South Africa are currently executing projects to the tune of more than $2-billion. These cover a broad range of sectors including automobiles, metallurgical industries, telecommunications, pharmaceuticals, processed foods, software development, minerals beneficiation, hospitality and financial services.

Several Indian companies have strong social responsibility programmes in place. To take just a few examples:

The Tata group is taking 50 unemployed women graduates to India for internships and provides bursaries to deserving students at the University of the Witwatersrand.

Satyam has already taken 50 young South African graduates to their state-of-the-art IT facility in Hyderabad for a year-long programme that includes nine months of on-the-job training. 

Ranbaxy plans to take chemists and pharmacists to India for training and will start enrolling local staff in an online training programme for its Be-Tabs facility.

Rosy Blue and KGK are training and employing several hundred local staff in their diamond-cutting and -polishing facilities in Cullinan and in Jo'burg's CBD.

Neotel is setting up a Telecom Training Academy in Jo'burg to meet its needs for skilled professionals. 

The Confederation of Indian Industry is in dialogue with the Umsobomvu Youth Fund to set up separate training centres for IT and vocational skills.
But this is not a one-sided relationship. As the Indian economy grows annually at 8% to 9%, several South African companies have moved quickly to position themselves in a trillion-dollar economy with a middle class of more than 300-million. 

Airports Company South Africa and Bidvest have won the huge contract for expansion and upgrade of Mumbai International Airport; SAB-Miller is now India's second largest brewer; Altech will soon start supplying set-top boxes to the Indian market and FirstRand Bank has become the first African bank to establish a presence in India, joining financial services majors Old Mutual and Sanlam, which have already been around for a while. Sasol, De Beers, BHP Billiton, Batemans and Tiger Brands are some of the other major local players looking for a piece of the action. The Sahara group is executing substantial projects in both countries.

In doing so, the private sector in both countries is giving concrete shape to the somewhat nebulous concept of South-South cooperation. Indian pharmaceutical companies are playing a key role in making healthcare more affordable for low-income communities in Africa and elsewhere. They were largely responsible for bringing down the price of an antiretroviral dose from an extortionate $30 per day to the much more reasonable level of about $220 for an entire year -- or just 65 cents per day!

When President Thabo Mbeki and Prime Minister Manmohan Singh set the ambitious target of trebling bilateral trade by 2010 as part of the Tshwane Declaration signed in Pretoria last October, we started to draw up a work plan that will take us towards this goal; help us make up the lost time.

As Mahatma Gandhi put it in a different context almost a century ago in Johannesburg in 1908, "If we look into the future, is it not a heritage we have to leave to posterity, that all the different races co-mingle and produce a civilisation that perhaps the world has not yet seen?"

And that really sets a challenge for us, in government and in the business community. Can we harness the synergy, the complementarity between our countries and our economies to truly produce a model of economic partnership, of south-south cooperation, that the world has not yet seen?

_Navdeep Suri is India's consul general in South Africa_


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## Bushroda

*May industrial output seen up 11.1 percent*
REUTERS[ TUESDAY, JULY 10, 2007 03:30:41 PM] 

NEW DELHI- Annual growth in Indian industrial output is expected to have slowed in May to a still-robust 11.1 percent as a year-long monetary tightening campaign slows credit flow and dampens consumer demand. 

The median forecast of 10 analysts in a media poll put annual growth below April's 13.6 percent and a 14.5 percent in March. That would be the slowest rate since February when output grew 10.8 percent from a year earlier and well off last November's peak when output grew an annual 15.4 percent, its fastest rate in more than a decade. 

"Interest-rate sensitive consumer goods sectors like automobiles will slow down, but the growth in infrastructure industries will still be strong," said Rajeev Malik, economist at JP Morgan in Singapore. The central bank has raised its short-term lending rate five times since June 2006, most recently in late March, and has raised reserve requirements three times since December to contain inflation and credit growth in the red-hot economy. Asia's third-largest economy expanded by 9.4 percent in the 2006/2007 fiscal year to March 31 -- its fastest in 18 years -- attracting huge capital inflows. 

The inflows pushed the rupee 9.5 percent higher against the dollar this year, making it Asia's top performer and fuelling concerns that exports may suffer because of the currency's strength. Less competitive exports would weigh on the manufacturing sector which accounts for 15 percent of India's gross domestic product. The central bank and the government expect growth to moderate to around 8.5 percent in 2007/08.


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## Contrarian

Bushroda said:


> *A Reunion at the "MIT of India"*
> TIME
> Monday, Jul. 09, 2007
> 
> Google, Microsoft and General Electric came to Santa Clara, Calif., last weekend, and all but begged graduates of one of the world's top engineering schools to work for them. Google spent $200,000 to be the lead sponsor of the four-day-long reunion of 3,500 alumni. Microsoft's research center in Hyderabad came calling. The CEO of GE, Jeff Immelt, already employs 1,500 graduates and says he needs more. Stanford? MIT? Harvard? Nope. This was a gathering of graduates of the Indian Institutes of Technology.
> 
> Prime Minister Jawaharlal Nehru started the Indian Institute of Technology in 1950 because he recognized that his new country needed builders engineers who would give India the same vitality that was turning the United States into a superpower. The IIT system now includes seven campuses, and its graduates quickly became India's technological elite. A half-century later, their influence is almost as great in the U.S., where 25,000 of IIT's 100,000 graduates live. IIT grads include venture capitalists Vinod Khosla, Kanwal Rekhi and Yogen Dalal; former McKinsey managing director Rajat Gupta; Vodafone CEO Arun Sarin and 35 of the top 600 executives at GE. Silicon Valley couldn't run without them, and India's booming tech economy has opened up another world of opportunity. "You've almost got too many choices," Immelt said in a speech to the group on Friday. Spend some time in the world of IIT, and engineering almost feels  well, glamorous.
> 
> IIT has often been called the MIT or Harvard of India, but there's a big difference  IIT is a lot more selective than the top Ivy League schools. About 250,000 Indian students take the first screening exam for a spot at an IIT; 100,000 make it to the next round; but only 4,000 are eventually selected. Even if they could make the cut at IIT, however, the brightest young American students are less likely now than they were a generation ago to choose engineering. The number of engineering grads in the U.S. peaked in 1986 at close to 80,000, and has fallen to about 70,000 now. "Engineering has played second fiddle to other professions in the U.S." says Subhash Tandon, a 1972 IIT grad. "There isn't a prime time TV show about engineers."
> 
> But it will take more than a CSI: Palo Alto to reverse that trend. Engineering in the U.S. needs a rebranding. IIT went through such a transformation after the tech bubble burst in 2001, when engineers  Indian and American alike were being laid off by the thousands. That's when some of the school's most prominent alumni decided to turn IIT into a brand combining the brainpower of engineering with the excitement (not to mention the big money) of entrepreneurship, by playing up the accomplishments of IITans like Umang Gupta, CEO of the web services company Keynote and employee No. 17 of the company that later became Oracle. Gupta is a rock star to young IITans, who say he understands their desire to take what they know and build something bigger out of it. "Everybody wants to start a company," says Deepak Goel, a 1999 IIT graduate and design engineer at Microsoft.
> 
> Making a mark in the global economy, however, means becoming a global citizen. "How well do you travel?" Immelt asked. It's a lesson that U.S. workers, too, are starting to learn. Satish Bhat, program manager of Microsoft's development center in Hyderabad, says he's been taking on not just Indians who want to move home, but also "diversity hires"  Americans who want to move to India. "That's where the action is," Bhat says.
> 
> Still, the IIT boosters are aware of the challenges of globalization and those it leaves behind. Immelt said India's success will be defined by its ability "to make the pie bigger." Hillary Clinton, who spoke by satellite to the crowd (a decision that left many at the conference wondering whether she was trying to distance herself from India), asked these engineers, scientists and business people to use their skills to create "a shared prosperity for America and India." IIT graduates helped build the technology that made globalization possible. Perhaps they'll also be the ones who make it work for everyone.


IIT is a great instituition, but i never wanted to go there, though i am doing engineering. My dad was hyperventilating the day the results came out for IIT. He wanted nothing more than for me to get in IIT.


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## Bushroda

malaymishra123 said:


> IIT is a great instituition, but i never wanted to go there, though i am doing engineering. My dad was hyperventilating the day the results came out for IIT. He wanted nothing more than for me to get in IIT.


I just gave one attempt & threw my hands in the air. Good thing is that even my dad didn't expect too much from me.


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## Bushroda

*Favorable Government Policies and a Booming Economy Keep the Indian Healthcare Industry in Top Shape* 
Frost & Sullivan
Mon, 09 Jul 2007 12:40:02 GMT 

PALO ALTO, Calif., July 9 /PRNewswire/ -- With the demand for healthcare services set to more than double in the next five to ten years, the Indian healthcare industry appears ripe for investment. A robust economic reform process and inflated healthcare budgets have attracted big ticket foreign investments in several sectors, such as pharmaceuticals, biotechnology, clinical trials, medical devices and equipment, healthcare services, insurance, and outsourcing. 

New Country Industry Forecasts from the Frost & Sullivan Economic Research and Analytics team addressing the Indian Healthcare Industry reveals that opportunities exist in the pharmaceutical and medical tourism sectors of the industry. 

If you are interested in a virtual brochure, which provides manufacturers, end users, and other industry participants with an overview of the latest political, economic and social analysis of the Indian Healthcare Industry then send an e-mail to Shwetha Thomas, Corporate Communications, ERA, at sthomas@frost.com with your full name, company name, title, telephone number, e-mail address, city, state, and country. We will send you the overview by e-mail upon receipt of the above information. 

India's recognition of pharmaceutical product patents and establishment of new regulatory bodies will likely draw more foreign investors seeking outsourcing opportunities in the country. Additionally, the creation of a suitable infrastructure coupled with an increase in healthcare as well as drug and pharmaceutical R&D expenditures will attract new drug development projects. 

"The government is not sparing any efforts to promote India as a hot destination for medical tourism," says Frost & Sullivan Research Analyst Konda Reddy. "It has increased the budget outlay toward the development of medical tourism centers across the country." 

By increasing public healthcare expenditures to 2.0 percent of the gross domestic product (GDP) by 2010, as stated in the National Health Policy, the government will help to increase the number of healthcare centers in remote areas and improve essential healthcare supplies. 

The government continues to work toward delivering effective and affordable healthcare services to the population's vulnerable sections residing in rural areas through its common minimum program and national rural health mission. 

India also looks to modernize its healthcare system through greater collaboration with the healthcare industry. Specifically, the country hopes to provide innovative drugs, expand healthcare insurance, as well as provide modern medical equipment and better services. The government aims to revolutionize the delivery of healthcare services using information and communication technology with its implementation of Telemedicine, one of the world's biggest healthcare projects. 

Healthcare-related programs such as e-Health and the government's encouragement of public-private partnerships, have improved the accessibility, standard and quality of medical services. India continues to give priority to its national disease control programs, which receive considerable funding from various bilateral and multilateral donor agencies. 

The various health and family welfare programs must share credit with the country's economic and social transformation, for the improvements in basic healthcare indicators such as infant mortality rate (IMR), maternal mortality ratio (MMR), life expectancy, and death rate over the last decade. 

Despite obstacles, the economy will likely improve steadily from 2006 to 2010. The GDP and gross capital formation are expected to increase, while the inflation rate will likely decrease. Furthermore, the government will also implement policies to significantly lower the unemployment rate. 

"This conducive investment environment has directly and indirectly enhanced healthcare infrastructure, facilities, and the quality of healthcare professionals in India," notes Reddy. "This has, in turn, improved the standard of health services in the country, making it a potential regional hub for healthcare services in the Asia Pacific." 

The three-part series addressing the Indian Healthcare Industry is part of the Frost & Sullivan Healthcare GPS subscription services. The Political and Policy Analysis of the Indian Healthcare Industry provides a detailed coverage of the political establishment, general economic and industry specific policies, and their impact on the industry. The Economic Analysis provides an overview of the market size, a discussion of drivers as well as restraints, and an analysis of market structure in the context of the overall Indian economy. The Social, Infrastructure, and Labor Analysis studies the labor market dynamics, infrastructure conditions, and consumption profile of end-users. Analyst interviews and briefings are available to the press. 

Frost & Sullivan's Country Industry Forecast research provides a unique country-specific perspective on various industries. The valuable Country-Industry Linkage includes in-depth analyses and forecasts. 

The Frost &Sullivan Economic Research and Analytics team provides research focused on timely and critical sociometric, econometric, demographic, political, and regulatory information for specific countries by industry. It produces research services, economic impact articles, and economic updates that discuss relevant and critical economic trends.


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## Bushroda

*The shape of things to come*
T T RAM MOHAN
TNN[ WEDNESDAY, JULY 11, 2007 11:16:25 PM] 

Slowly but surely, Indias financial sector is seeing a change in ownership patterns. The process has been on for a while now but it has gathered pace with the growing global integration of the Indian economy. It is most visible in areas directly linked to the capital market  brokerage and investment banking  but others such as asset management, insurance and banking are not entirely immune. 

Foreign firms are moving into brokerage and investment banking in a big way. The writing was on the wall when Goldman Sachs broke off its collaboration with Kotak, Merrill Lynch gained control over its joint venture with DSP and Morgan Stanley parted ways with J M Financial. Several foreign firms have made their moves into the retail space: Citibank (Sharekhan), Merrill Lynch (India Infoline), BNP Paribas (Geojit Securities), Standard Chartered Bank (UTI Securities). 

When foreign firms came in several years ago, the broking market was smaller, the investment banking opportunities mostly related to the domestic capital market and the local firms had all the relationships. The volumes just did not justify the investment in distribution or the demands on top management time. 

Over the past four years, the situation has changed dramatically. Trading volumes, both institutional and retail, have risen sharply. Mergers and acquisitions of Indian firms and by Indian firms have shot up. So has international fund-raising by Indian firms. Private equity investment is growing rapidly. Investment banking revenues have soared as a result. 

Paradoxical as it may seem, the very success of Indias corporates and their growing integration with the global economy poses a threat to Indias financial firms. The rising share of broking and investment banking income related to cross-border activity means that foreign firms can go it alone on the strength of such activity alone. 

They do not need to worry about revenues related to the domestic capital market. This means they do not have to invest for now in domestic distribution. One office in Mumbai is all they need. At the same time, they can sense the potential for growth in retail brokerage and wealth management. So they are taking equity positions in the leading Indian retail players. 

Is this finis for Indian investment banks and brokers? Not really. Foreign firms will focus on the investment banking needs of top corporates and on institutional brokerage. Nevertheless, investment banking opportunities in small and mid-sized companies will still be available to Indian players. 

Brokerages run by first-generation professionals will see merit in selling out to foreign players. But family-run brokerages, with their long-standing relationships, will stay. Indeed, some of them are strengthening their presence in the retail market by buying up small brokers. By combining retail brokerage with wealth management they can remain viable. 

In asset management, the top five includes one public sector firm (UTI), one domestic firm (Reliance) and three joint ventures (HDFC, ICICI and Birla). There is no particular advantage that foreign firms enjoy at the moment. This could change when Indian investors seek exposure to international capital markets in a big way but that is some distance away yet. 

In insurance, LIC, with a market share of 80%, remains the leader by a wide margin. Moreover, the entry of new firms has opened up the market in a big way, so loss of market share has not come in the way of healthy growth in premiums at LIC. 

In insurance too, it is the domestic market that counts and there is little product differentiation, so foreign firms lack a decisive advantage. 

In banking, the situation is closer to that in investment banking. Cross-border business is fast becoming a big source of fee income. Foreign banks have shown a huge increase in profit over the past year on the strength of their global network. This is a material change in the competitive situation. With their entrenched advantages in distribution, public sector banks can hang on to the lower tiers of the domestic business but they need desperately to upgrade their human resources. 

Wherever regulatory barriers have been dismantled, the international financial giants have come marching in and domestic players have fallen by the wayside. Will this story be replicated here? It is possible but it is not inevitable. Indias geographical size and lack of financial penetration hold out the possibility that, despite the entry of foreign firms, there is space for Indian firms. But for this to happen, we require a combination of skilful regulation and nimbleness on the part of Indian firms.


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## Bushroda

*Turkey for India investments in energy, infra*
PTI[ WEDNESDAY, JULY 11, 2007 08:30:32 PM] 

NEW DELHI: With sugar, energy and petrochemicals sectors to be privatised soon in Turkey, the country on Wednesday invited Indian companies to work in partnership, taking advantage of its favourable investment environment. 

"The sugar, energy and petro chemicals sectors in Turkey will be privatised in another 12-18 months and this will give ample opportunity to foreign firms to work in partnership with Turkish companies in these sectors," Investment Support and Promotion Agency of the Republic President and CEO Alpaslan Korkmaz said at a CII conference here. 

He said Turkey is enhancing the role of private sector in its economy by opening key markets to competition and regulation by independent agencies. 

Once the privatisation is complete, Indian companies can form joint ventures with Turkish firms to expand their market in Turkey, besides gaining access to other global markets, he said. 

"Improved investment environment and accelerated privatisation in Turkey will provide Indian companies an access to the EU, Central and Eastern Asian markets," he said. 

Growing domestic market, institutionalised economy, qualified and cost effective labour are favourable to Indian companies investing in Turkey, especially in areas like infrastructure, IT, energy, food processing and manufacturing, he added. 

Korkmaz said FDI in Turkey is set to be 30 billion dollars for 2007. Citing the example of Indian developer GMR bagging an about Rs 11,000-crore project to modernise Istanbul's second airport, Korkmaz said more Indian firms should emulate such a move and expand presence in the country.


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## Bushroda

*Engaging India: The great retail debate*
By Joe Leahy, Mumbai correspondent
Financial Times, United Kingdom 
July 11 2007

_*Engaging India is a weekly online column analysing the issues, trends and forces behind the business and politics shaping India and its impact on the world, which appears on FT.com India, a dedicated online section on India. Engaging India appears every Thursday morning exclusively on FT.com India and is written by Jo Johnson, the Financial Times South Asia bureau chief; Amy Yee, New Delhi correspondent; and Joe Leahy, Mumbai correspondent.*_

One evening a few weeks ago, I popped into a small grocers shop on Peddar Road, a major thoroughfare in wealthy south Mumbai, to buy a carton of milk.

The lights in the shop were dim, presumably to save electricity, and the owner, while polite and helpful, did not even have any plain soy milk in the rusty fridge at the back of the store, let alone the dairy variety.

This in a neighbourhood that probably has one of the highest concentrations of millionaires and billionaires in India. Directly across the road, for instance, is the stately Jindal Mansion, the headquarters of the Indian steel family of the same name. 

The experience caused me to reflect on what is becoming perhaps one of the most important debates in the modernization of Indias economy: whether to allow large corporations to invest in Indias retail market even if this is at the expense of the countrys millions of mom and pop stores like the one on Peddar Road. 

On one side of the debate are the domestic conglomerates led by Reliance Industries, the countrys largest company controlled by industrialist Mukesh Ambani, which has launched a $5bn push to set up a nationwide chain of stores selling fresh produce.

On the other are the millions of small shopkeepers and hawkers, who worry they will be crushed by the entry into the sector of Reliance and its peers, as well as foreign groups such as Wal-Mart, which plan to come in once the government eases restrictions on foreign investment.

At stake is a market worth $200bn in sales, according to KPMG, but of which organised retailing presently accounts for only 3 per cent.

The unsatisfying shopping experience in Peddar Road reminded me of the words of Roger Corbett, the straight-talking former chief executive officer of Woolworths Australia.

During a visit to Mumbai last year, Mr Corbett said Indias neglected retail sector was crying out for investment. 

Why should the Indian people have inferior shopping? Why shouldnt they have world-class shopping? he said.

If organised retailing were allowed what will happen is that the Indian market will also improve and the net benefactor, big time, will be the Indian consumer. 

Such arguments hold little weight with the countrys army of small shopowners. At a press conference this week, a coalition of traders, hawkers, cooperatives and unions, united by an activist group known as India FDI Watch, issued an ultimatum to the large retailers  quit retailing by August 9 or face boycotts and demonstrations. 

Equating their struggle to Indias independence movement led by Mahatma Gandhi, the retailers called for a Day of Protest against the corporate chains, pointing to overseas studies claiming retailers such as Wal-Mart have wiped out unions and small businessmen in the neighbourhoods they have established stores. 

Vinod Shetty of FDI Watch said Wal-Mart should read the history of Indias freedom struggle. Finally the East India Company had to quit India, the cost of fighting the Indian people was too expensive, he said, referring to the British colonial trading company.

Mohan Gurnani, the head of an umbrella group that claims to represent 750 traders associations in the state of Maharashtra, of which Mumbai is the capital, said family-owned businesses saw the entry of Wal-Mart and Reliance as an economic terror that would lead to the forced starvation of their families.

Beneath the political rhetoric, there are a myriad of factors at play, including the growing impatience of many Indians with the concentration of wealth in the hands of industrialists, businessmen, and highly educated professionals. 

Indias communist party and its allies are also latching onto the small traders fears to pick up votes ahead of a series of elections over the next couple of years. 

But as with many such issues in India, lost in the debate are the interests of the people most in need of help, in this case, the countrys farmers. 

Corporate retailers are probably the only group in the country with the capital and the incentive to build the rural infrastructure  the roads, cold storage, and logistics networks  that farmers in the countrys impoverished hinterland desperately need. 

India loses as much as 1.7 percentage points of gross domestic product from wastage of farmers produce and the siphoning off of commissions by numerous middlemen, according to a study by Crisil, a ratings agency affiliated with Standard & Poors.

Asked about how they would improve rural infrastructure, the small traders lobby has few answers except to warn that farmers would eventually be worse off if large corporations were allowed to monopolise the market. 

In the end, both sides are probably right. It would not only be economically catastrophic if small traders were put out of business en masse, India would also lose an intrinsic part of its cultural and social fabric. 

At the same time, Indias countryside needs investment to help cure the social ills that are driving millions to migrate to the slums of big cities such as Mumbai. 

Some argue one compromise would be to offer existing small traders jobs in supermarkets or franchises to set up modern convenience stores. But the traders lobby rejects this idea, fearing their members will become enslaved. 

At this point, only one thing is clear. The emerging war over the future of shops like the one on Peddar Road promises to become one of Indias most burning socio-economic issues of the next decade.


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## Bushroda

*A-380 may land ahead of schedule*
12 Jul 2007, 0110 hrs IST,Saurabh Sinha,TNN

NEW DELHI: India will see the worlds biggest commercial airliner, the A-380, in regular operation much earlier than expected. Kingfisher, the only Indian carrier to have ordered this aircraft, was supposed to start getting deliveries from late 2011. However, the airlines CEO Vijay Mallya told TOI that he has "requested Airbus to advance the delivery of two planes to 2009", something which is most likely to happen. 

Hoping to get government clearances to fly abroad much before then, the airline plans to mount these planes on the Bangalore-San Francisco and Mumbai/Delhi-New York routes with a possible stop-over in Europe. 

"Negotiations are on with Airbus," Mallya said. Kingfisher is keen on getting these planes fast as the aviation ministry is learnt to be in favour of a case-to-case basis clearance to airlines for flying abroad and do away with the five-year norm. Moreover, Delhi will get an A-380-compliant code F runway next year. New airports in Bangalore and Hyderabad are also going to be ready next year that can easily accommodate this plane. 

The airline had placed a firm order of five A-380s, each of which has a list price of Rs 1,200 crore, with an option of five more at the Paris air show in 2005. The original delivery schedule was supposed to begin in 2010 but Airbus initial troubles with this plane meant that the planes would start coming from 2011 or 2012. Mallya is learnt to be renegotiating the price because of delays. 

But with the focus on the US-India sector amidst Jet beginning flights via Brussels and Air India launching nonstop ones from August, Kingfisher too wants to begin operation on this route with its characteristic bang. It plans to have a casino on board this aircraft and put three classes  first, business and economy. 

From next March, Kingfisher will start getting the long range A-340-500 planes that are capable of flying nonstop for 16 hours. Sources say this plane could be used for nonstop flights while trans-Atlantic flights via London may be mounted on the A-380. These plans are not on thin air as the airlines recent acquisition of 26% stake in Air Deccan has put it on a firmer ground. "Air Deccan will complete five years of operation in 2008 and would be eligible to fly abroad. Anyway, theres a proposal to relax norms for airlines to go abroad," said a senior official. 

Kingfisher clearly wants to be the first Indian carrier to begin operating the A-380s. The only other airline that's currently considering this plane is AI. It is learnt to be looking at the 550-seater (in three classes) A-380 and the 475-seater Boeing 747-800 for being inducted into fleet after 2011.


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## Bushroda

*Indian hotels show strength in numbers.*
Thursday, 12th July 2007
Source : HotelBenchmark Survey by Deloitte

Indias size and diversity is matched by very few countries; spreading over 3m square kilometres, India rises in the snowy peaks of Kashmir in the north, and falls to the tropical shores of Keralas southern tip -

In the west the barren rocky deserts of Rajasthan provide an arid, hostile environment, while in Bengal to the east lush jungles create a haven for wildlife. 

Dotted across this vast and breathtaking countryside are huge metropolises, swelling secondary cities and many thriving regional centres, over 40 cities with populations 1m strong, all with their own particular industries and economies. But despite Indias huge scale, contrasting regions and scattered cities, one thing does link this spectacular country, growth.

The figures are staggering. India contains over 1.13 billion people, and is predicted to become the worlds most populous country by 2050, overtaking China as it swells to 1.6 billion. Three cities  Mumbai, Delhi and Kolkata - contain over 10m inhabitants, and those figures rise daily. The northerly state of Uttar Pradesh has a population of over 139m - approaching the 143m living in the whole of Russia and making it the most populated internal region in the world. Likewise, Indias economy is growing at speed. Real gross domestic product (GDP) grew by 8.5% in 2005, a further 8.8% in 2006, and according to the Economist Intelligence Unit (EIU) this trend will continue in 2007-08. 

Yes, India is on the move and the hotel industry is not being left behind. Across India average room rates are sky-rocketing. In the twelve months to March 2007 average room rates have risen 28.7% to US$174, driving revenue per available room (revPAR) up 26.9% to US$122. The Indian hotel market however, does suffer from limited supply. There are an estimated 105,000 hotel rooms in India  a number comparable to that of Manhattan. This lack of supply, especially in the lower end of the market, combined with increased demand, is allowing hoteliers to push up average room rates.

For the first time India looks like becoming a major force in the world hotel industry. So what is fuelling this dramatic growth, and how sustainable is it? In this article we shall look at the factors defining this exciting period in Indias history. To gauge these trends there are no better places to look than Indias four major gateway cities - Delhi in the north, Chennai in the south, Kolkata in the east, and Mumbai in the west. 

*The new tiger economy*

It has to be recognised that it is not Indias hotel industry alone that is prospering. Across the country industries are booming, encouraged by a strong and apparently stable economy. The government is looking east, to their heavyweight partner China and the heavily Chinese influenced Association of South-East Asian Nations (ASEAN), for trade and investment. Combine this with an increasingly close relationships with the US, already excellent ties with the UK and an, albeit partial, thaw in tensions with neighbour Pakistan, and Indias global network of friends looks pretty healthy. Key areas such as IT, pharmaceuticals and telecommunications have seen rapid expansion in recent years. Many companies outsource their operations to India, benefiting from a seemingly bottomless pool of skilled labour, cheap costs and hefty government incentives. 

So what effect is this economic upsurge having on the hotel industry? Well, the EIU believes that approximately 80% of foreigners coming to India are there to do business. As business travel generally generates a higher spend than leisure tourism, it is plain to see why the Indian government is keen to promote this further. International tourism expenditure in India in 2006 was some US$8.7 billion, and is expected to rise to over US$10 billion in 2008, with the lions share of this being generated from the hotel sector. 

It is no wonder therefore, that Indias government is tearing down the barriers to potential inward investment and continued growth. The central governments expenditure tax is no longer applied to hotels and services charges have been slashed. The hotel industry is now classed as part of the countrys infrastructure by the government, lowering borrowing costs. The government is also issuing new long-term tourist visas to the citizens of selected countries, including the UK, Japan, Germany, France, Switzerland and Brazil. The five-year validity of the visa sends out a clear message: encourage repeat visits from wealthy tourists.

*Island nation*

India can almost be considered an island, and in ancient times it was. Approximately 6m years ago the Indian continental plate crashed into the Eurasian continent, an impact so severe it created the largest visible mountain range on earth  the Himalayas. With such a formidable boundary to the north and two long coastlines tapering to the southern tip - where the Bay of Bengal and the Arabian Sea meet at the Indian Ocean - India can essentially only be reached by air. The volatile border regions with Pakistan and Myanmar only serve to limit land access further. With the existing road and rail network often considered time consuming, unreliable or even unsafe, and a growing number of private low-cost airlines entering the market, domestic air travel across this vast land is also becoming increasingly popular. 

Given the scale of India, air travel is a key sector. Domestic air travel throughout the country is becoming a cheaper, more feasible option with private carriers Kingfisher, Jet, Air Sahara, Indigo, Spicejet and Deccan Airways all expanding their fleets and cutting fares. In response to this, the national carriers Indian Airlines and Air India are doing likewise.

The majority of international visitors arriving in India fly into one of the four gateway cities. So how are the hotel industries in these metropolises being affected by, and reacting to, the overriding nationwide trends?

*The capital: Delhi*

The gateway to the north of India, Delhi is the starting point for the majority of Indias tourists. The apex of the revered Golden Triangle tourist track and capital of the ancient Murghal Empire, Delhi has enough attractions of its own to enjoy before tourists set off to Agra and Jaipur. However with thriving telecommunications, IT, banking and manufacturing industries, a key English-speaking workforce and a per-capita income more than twice the national average, Delhi is also a haven for business travel. 

Delhis relevance to the world of business is enhanced by the presence of many major multinational companies, with local government actively promoting this area as a counter to the Financial Centre of Mumbai. With the exception of the Taj Group, all hotel industry major players have based themselves here.

A dramatic 35.7% rise in the twelve months to March 2007 forced Delhis average room rates up to an incredible US$225; the highest of all Indian cities. While occupancy levels decreased slightly to 74.8%. The main reason for this is under supply, especially in the lower end of market. As with all cities in India, the market in Delhi is dominated by 5-star and 5-star deluxe properties. Efforts are being made to solve this problem; with the local government introducing, as part of their Delhi Master Plan, a scheme intended to create a more even-spread accommodation hierarchy across the city, while also developing accessibility (road, footpaths, road bridges and parking). Another impetus for this is the fact that Delhi will host the forthcoming Commonwealth Games in 2010. 

Between now and the Games, new developments in the National Capital Region (NCR - including Delhi and its suburban conurbations of Gurgaon and Noida) are set to include a 320-room Novotel, a 200-room Taj Hotel, three Starwood (the 300-room Westin New Delhi, the 97-room Westin Sohna-Gurgaon and the 220-room Sheraton New Delhi) and a 319-room Leela-Kempinski joint venture. The public sector is also playing a role with the state governments of Delhi, Haryana and Uttar Pradesh having ear-marked 75 potential NCR sites for hotel development.

Together with Mumbai, Delhi accounts for the bulk of inward arrivals. The modernisation plan for Indira Gandhi International Airport by its new private owners is already underway. This is expected to be completed by 2010 and will more than double its capacity. 

*The financial centre: Mumbai*

The capital of the western Maharashtra state, Mumbai was created as a deep water port by the British and Portuguese, and began to boom following the construction of the Suez Canal. It is now the financial capital of India, home to the Reserve Bank of India, the National Stock Exchange and the more traditional Bombay Stock Exchange, contributing an estimated 40% of Indias foreign trade. Mumbai also has thriving industries revolving around IT, engineering and healthcare sectors. Most Indian conglomerates have their corporate offices here, including Tatas, Birlas and Reliance. This status makes Mumbai a haven for national and international business travel.

Mumbai experienced revPAR growth of 40.8% in the year to March 2007. This, again, is due to a sharp increase in average room rates, which rose 35.6% to US$202 over the same period. Occupancy for this period stands at 75.9%. Once again an extremely top-heavy market dominated by luxury properties, as well as a shortfall in supply, is forcing this trend. Increased capacity at Mumbais Chatrapati Shivaji International Airport has exacerbated the problem and allowed hoteliers to force average room rates even higher. With the proposed, further expansion and modernisation of the airport by its new owners, and with the new airport planned in the eastern suburbs of Mumbai, the city looks set for an even greater increase in arrivals. Planned developments over the next two years by Marriott, Four Seasons and Accors 300-room Sofitel Mumbai will help. 

*The growth city: Kolkata*

The capital of West Bengal, Kolkata is the hub of trade into eastern India. As a traditionally socialist city, Kolkata had been unattractive to inward investment. The state government (the longest serving democratically elected communist government in the world) had long favoured trades unions and workers rights, and consequently the post-independence days had seen Kolkata lose out as international companies located elsewhere. However since 2000 with changed leadership, IT and manufacturing sectors are now revitalising the city. With its prime location for trade routes with China and the ASEAN countries, and direct flights to Brunei, Bangkok and Singapore, Kolkata looks set to grow and grow. 

Although revPAR remains the lowest of the gateway cities, Kolkatas rate of growth is among the countrys highest. An average room rate rise of 35.7% in the year to March 2007 is on a par with Delhi. Average rates for this period stand at US$120, having hit a peak of US$160 in January 2007, while RevPAR grew 35.6% to US$83. But as the citys status as a centre of industry grows in the coming years, will supply become increasingly outstripped by demand? In the hotel sector Marriott plan to open a new 250-room Courtyard property in the city by 2009, while Hilton, with its Indian development partner DLF Ltd, also has a new opening planned in the city. It remains to be seen however, if the supply of beds in the city can reach the necessary levels for the projected visitor boom.

*The resort: Chennai*

Despite the 12km-long Marina Beach that defines Chennais eastern limits, the capital of Tamil Nadu state and the gateway to south India is no beach resort, but a major industrial centre. The traditional hub of Indias automobile industry is also now becoming a major IT centre, housing manufacturing plants for companies such as Dell, Nokia, Samsung and Cisco. Naturally the meetings, incentives, conference and exhibitions (MICE) tourism is a major sector, with the 2,000-capacity Chennai Conference Centre providing an excellent facility. Many of the positive effects of Bangalore (Indias Silicon Valley) have also rubbed off on Chennai, with many IT outfits reportedly considering Chennai more favourably due to the infrastructure that the city offers.

With revPAR growth of 27.2% for the twelve months to March 2007, Chennai follows the pattern of Indias gateways cities. Average room rates, rising 32.5% to US$135, accounted for this growth, while occupancy fell slightly to 75.2%. Direct air links with many ASEAN countries and the Middle East show strong potential for further growth through MICE tourism. Leela-Kempinski plan to open the 300-room Leela Palace Kempinski Chennai by 2008, while the 253-room Hilton Chennai is set to open in December 2007. Both hotels will include significant conference facilities, including a 1,600 square metre convention centre at the Leela-Kempinski. 

*Indian summer: the autumn effect*

The autumn time is always a good period for the Indian hotel industry. The searing temperatures of the summer months cool off to create a more visitor-friendly climate, and Indias inbound tourist cycle begins. This starts in late September/early October and runs through until February or March. Inbound tourism takes a significant leap around this time, and with the governments Incredible India campaign compounding the already versed impacts of Indias economic growth, and increased capacity at Indias two main airports in Delhi and Mumbai, 2006 was an especially good autumn. A good conference season and the fact that cricket-crazy India was hosting the autumn ICC Champions Trophy led to the number of inbound tourists growing 13% to over 4.4m in 2006.

The impact of this combination of factors saw hotels able to force room rates up dramatically. Although previous year comparisons had been positive throughout 2006, momentum gathered in autumn and October saw room rates across India rise 36% to a national average of US$196. By November this had risen further to a staggering US$215, levelling at US$205 in December. The biggest individual impact of this autumnal boom was seen in Mumbai in November 2006, when the soaring average room rates and high occupancy levels saw revPAR swell to US$213  a staggering 83% rise from the previous year.

*A false dawn...? *

Make hay while the sun shines, appears to be the current motto of Indias hoteliers. But can average room rates be forced higher in future years and if so, how high? Already Mumbai and Delhi have average room rates comparable to the traditionally most expensive cities in Asia. Delhis average room rate for the April 2006 to March 2007 period (US$225) outstrips all its regional rivals, including Singapore (US$138), Shanghai (US$138), Hong Kong (US$190) and Tokyo (US$196). But how high can they go? 

A hotel construction boom in years to come looks like resolving the supply problem in all sectors. Indias budget sector in particular looks set to take off, with Accor and Hilton planning to launch their Ibis, Formule 1 and Hilton Garden Inn brands across the country. Whitbread Plc, operator of the UKs Premier Travel Inn budget chain have committed to opening several hundred hotels across India and China in the next 5 years, while the easyGroup has also identified India as an important market for its easyHotel.com brand. 

Local operators are also expanding their portfolios, with Sarovar having launched its Hometel budget brand, and South-India based Choice Hotels looking to open 8-10 budget hotels a year in the next 3 years. And development is planned not only in the gateways cities, but new, rapidly growing metropolises such as Bangalore, Hyderabad, Pune, Chandigarh, Indore and Jaipur. Once this happens it is likely that the new competitive climate will force average room rates, even in the top end of the market, to plateau or fall. 

*Or a bright future? *

To maintain such growth, Indias economy needs to continue its boom and the government continue to invest in the countrys infrastructure. There seems no reason why, with Indias wealth of resources and skilled labour, the economy cannot continue to grow at speed. With a booming IT sector, India is ideally placed to thrive in the 21st century. However justification of such high average room rates can be found only in world-class facilities and back-up services for the business traveller. If the logistics of travel itself are troublesome, business people may be dissuaded from travelling to India. As Indias cities attract increasing numbers of visitors, the surrounding services need to be improved. 

However with the increasing supply of air travel it is becoming easy to travel around this vast, spectacular land. Whether you enter by the north, south, east or west - through Delhi, Chennai, Kolkata or Mumbai  India is now becoming more accessible. As urbanisation increases, from sprawling gateway metropolises, to the rapid-rising secondary cities, and small but swelling regional cities, the need for hotel rooms will keep pace. 

International chains have realised this great opportunity, and even although average room rates cannot continue to climb as steeply in future years as was seen in 2006-07, a large increase in supply will compensate for this. Growth is growth in any form.


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## Bushroda

*India's Outsourcing Sector Boosted By Tax Ruling*
Lorys Charalambous, Tax-News.com, 
Cyprus 11 July 2007

India's Supreme Court has said that outsourcing activities carried out by a unit of Morgan Stanley in India are not liable for Indian taxes, in a case that was being keenly watched by other major multinationals with operations in India.

The Supreme Court bench, headed by Justice S. H. Kapadia, was of the opinion that Morgan Stanley Advantage Services (MSAS) was not liable for tax in India since it was a back office processing unit, and did not constitute a permanent establishment in the country.

"There was no agency PE as the PE in India had no authority to enter into or conclude the contracts. The contracts would be entered in the US. The implementation of those contracts only to the extent of back office functions would be carried out in India, the judgment stated.

However, the court also said that the parent company would have to pay an appropriate "arms length" price to the Indian subsidiary, otherwise tax could be imposed. 

The ruling is likely to be viewed with some relief by the numerous other multinational companies such as HSBC and Standard Chartered which have outsourced their back office and administrative functions to India.

The outsourcing industry has been a boom sector for the Indian economy in recent years, but the tax authorities have been unsure on the tax status of such companies, known as BPOs (Business Process Outsourcing firms). Tax uncertainty was heightened when the Indian government notified firms in 2003 that a BPO would be liable for income tax on earnings which related to their parent companys core business. The BPOs opposed the move, arguing that the services being provided were sold to foreign customers, and that therefore foreign firms should be liable for tax. 

A Morgan Stanley official speaking after the verdict said that "significant certainty" on the taxation of BPOs had been restored by the Supreme Court.


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## Bushroda

*Can we twist the dragons tale?*
MAYUR SEKHAR JHA
TNN[ WEDNESDAY, JULY 11, 2007 06:17:50 AM] 

Small industries in India contribute 40% of the countrys industrial output, producing over 8,000 value-added products. They contribute nearly 35% in direct export and 45% in the overall export from the country. They are one of the biggest employment-providing sectors after agriculture, providing employment to over 28 million people. The 3-million-plus small and medium-sized firms produce a diverse range of very basic to highly-sophisticated products. They are driving the India growth story. 

But, despite their strength, SMEs are facing tough challenges in the present scenario of liberalisation and globalisation. They are finding it difficult to sell their products in the domestic and international markets because of increasing competition, admits a senior official in the ministry of small-scale industries. 

*enter the dragon* 

THE biggest competition comes from China. Small companies in several manufacturing sectors such as chemicals, textiles, consumer goods, electricals & electronic gadgets and toys, among others, are losing business to their Chinese counterparts, not only in export markets, but also at home. 

In textiles, for instance, despite being under the quota regime, Chinese manufacturers beat their Indian counterparts by huge margins. The story is similar in the case of durables. 

According to experts, the biggest difference is that Indian policymakers do not depend on smaller companies for economic growth. Though there is much talk of SMEs, the general ideological stand is that only large companies can bring about a critical mass in the economic growth. On the other hand, in case of China, the government trusts the SME sector, which forms 99% of all enterprises in the country and are a vital force for the sustained development of the economy, says Prof Aditya Mukherjee of Delhis Jawaharlal Nehru University. 

Ou Xinqian, vice-chairman of the National Development and Reform Commission, China's top economic planning panel, told a press conference last week that China has 42 million SMEs, which represent 99% of all enterprises in the country. It provides 75% of jobs in urban areas. Industrial output and export volume of these enterprises constitute 60% of Chinas total. The seriousness with which the Chinese government deals with SMEs is evident from the fact that it is implementing a special law for the promotion and protection of these units. 

*Drag & play policy* 

NOT that policymakers in India have not been reactive to the issue of empowering SMEs. As part of the Union budget this year, finance minister P Chidambaram had announced a preferential lending policy for small-scale industries (SSIs). However, this policy is yet to see the light of day. 

True, there have been delays in implementing the SSI policy. But it is very much there. Moreover, we are working on certain other incentives for the SME sector as well, the official in the Union finance ministry adds. 

The finance ministry is also considering an industry proposal for setting up a knowledge enterprise development fund. This fund will have an initial corpus of Rs 500 crore and will be used to finance start-ups and ideas. Access to funds, at present, is perhaps the biggest issue with Indias small companies. If this fund is created, it will solve many wearies of the Indian SME sector. Moreover, provision for loans at lesser interest rates is important. For a small businessman, paying 15% interest kills business sense, says Chetan Bijesure, manufacturing and senior assistant director (foreign trade division), Ficci. 

the think-big factor 
THIS is not all that the SME sector has been lobbying for. They say that the government should look at encouraging commercial banks to look favourable at risk-capital funding for SMEs. We get hampered, specifically while entering into technology-driven areas, as we can get funding only on the strength of our balance sheets and, due to this fact we get limited in our funding processes. The government should encourage commercial banks to actively look at early-stage risk-capital funding, says Tiger Logistics managing director Harpreet Singh. The Rs 50-crore Tiger Logistics is a first-generation enterprise, which is seeking to expand into the global markets. Until now, most expansion projects of the company have been debt funded. 

Rakesh Malhotra, managing director of Luminous Power Technologies, which makes power invertors, says that the government should aim at being more proactive rather than being reactive. The government should, through various communication channels, aim at displaying information, which is forward looking rather than putting up information only on rules and laws. They should (also) aim at setting up sources for qualified information that shows how the government plans to match up to the changing scenarios rather than just putting up rules and regulations. 

Another critical challenge that Indian SMEs have been facing is that of mid and senior-level managers. The government, along with education institutions (and not just the tier-I and II institutions) must aim at developing this category of personnel power so that SMEs can benefit from this. The lack of quality managerial bandwidth actually stunts the growth of SMEs, says Perry Madan, senior partner of Delhi-based HR and temping firm Elixir Web Solutions.


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## Bushroda

*DP World to buy, expand ports in India*
AGENCIES[ THURSDAY, JULY 12, 2007 08:08:13 AM] 

NEW DELHI: DP World, the world's third-biggest container terminal operator, is seeking to buy or expand port facilities in China and India as trade booms in the world's two fastest growing major economies. 

``India and China are two important markets for us,'' Chairman Sultan Ahmed Bin Sulayem said today in an interview in Singapore. ``India, we are well covered both in the east and west coasts. China we need to cover more.'' 

DP World and other container terminal operators plan to invest more in the two countries, as economic growth and surging exports boost sea-cargo shipments. The Dubai-based company plans to spend about $3.5 billion over the next five years on overseas projects worldwide. 

The company, owned by the government of Dubai in the United Arab Emirates, would acquire or expand facilities as part of the expansion plan, he said. 

DP World aims to double its annual handling capacity to 84 million 20-foot equivalent container units by 2016. The company operates 42 terminals in 22 countries, ranking behind PSA International Pte. and Hutchison Port Holdings Ltd. 

Last month, it raised $3.25 billion from the sale of bonds, partly to help fund expansion plans. The company also sold six US terminals for an undisclosed sum to American International Group Inc. earlier in the year because of political opposition in the country. The company acquired the facilities as part of its $6.8 billion acquisition of London-based Peninsular & Oriental Steam Navigation Co. 

*Indian Growth* 

In India, the company is investing $500 million in a container terminal in the southern city of Kochi. It's also spending $190 million on expanding the Kulpi port in West Bengal, which it acquired as part of the purchase of P&O. 

DP World's total investments in India, the world's second- fastest-growing major economy, will likely reach $2 billion, Senior Vice President and Managing Director Ganesh Raj said in March. 

In January, DP World won approval to build a terminal in Qingdao, mainland China's third-busiest port. The company already has a stake in a terminal in the port, southeast of Beijing. It also has stakes in terminals in Tianjin and Shanghai. 

Container volume at ports in China has tripled since 2001, as U.S. and European consumer buy more low-cost goods made in the country. China's surging exports have fueled economic growth of more than 10 percent in each of the past four years. 

Dubai Aviation is in talks to buy an airline in Africa, bin Sulayem said without naming the airline. The company also wants to manage more airports, he said.


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## Bushroda

*Emerging Asia's Innovation Edge*
*Developing economies such as India and China are poised to overtake mature ones in innovation and technology adoption *

Farihan Bahrin 
Businessweek

At the rate developing nations are churning out new inventions, businesses in mature markets can no longer afford to wait for innovation to come to them, warned Gartner in its latest report released Monday. 

"[Businesses] have to look beyond their own borders and consider untapped markets that they have perhaps not considered up until now, if they want to continue to innovate in a global economy," said Sandy Shen, research director at Gartner, noting that both China and India are emerging as powerhouses of innovation and creativity.

According to Shen, China and India have the ambition to lead the IT industry in the global market, and innovation is their only way to compete globally. In 2005, for, example, Gartner's study showed that the number of patent filings in China outnumbered those in the United States.

"Slightly less than one-tenth of world intellectual property organization international patents were attributed to emerging markets," revealed Partha Iyengar, vice president and analyst at Gartner. "If the growth rates remain constant, the emerging market share could reach almost one-fifth in 2012."

As the two largest growing economies in Asia, both China and India have been making major progress, particularly in the respective areas of research and IT services innovation.

Chinese firms are already posing a serious threat to global organizations, according to Shen. She noted that conglomerates like Huawei, Lenovo and Haier have been stepping up investment in new product research and aggressively pushing into the global market as low-cost players.

India, on the other hand, appears on the way to becoming an IT services powerhouse with a cohort of mega-sized Indian IT companies such as Wipro, Infosys and Tata Consulting Services (TCS) leading the charge. According to Gartner's report, IT services account for around half of India's services exports, and the market is forecasted to grow at more than 30 percent per year.

With the populations of China and India moving from below poverty line to a size comparable to the European middle-class in purchasing power parity (PPP) terms, Gartner predicts a pent-up demand that will pave the way for the creation of new, relatively untapped markets.

"Eighty-five percent of the world's population reside in emerging markets," said Shen. "We are looking at immense nations that are rapidly moving from subsistence living to being consumers, which in turn means a large number of new people to sell new technology to.

"Global companies in mature markets cannot afford to ignore developing nations, given the huge untapped opportunities they offer," she added.


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## Bushroda

*India potential underlined* 
SouthAsian Focus, Canada
Wednesday July 11 2007 
Staff Report 

While India's investment into Canada totalling around $2 billion over the last couple of years is a good start, it is nowhere near the potential represented by both countries, James Flaherty, Minister of Finance, said at the Canada India Day gala held in Vaughan over the weekend. 

A number of leading community representatives including R.L. Narayan, Indian High Commissioner, attended the event held to celebrate Canada Day. 

Flaherty recognized India's rapid economic growth-- the country has been charting a stable 8 per cent GDP annual expansion and is poised to become the world's fifth largest economy in a decade, overtaking in the process Italy, France and the United Kingdom-- but said in order to sustain the growth India will require a predictable long-term supply of natural resources and energy. He pointed out Canada is an emerging energy superpower with the largest established petroleum reserves on the planet after Saudi Arabia. 

He noted India is the second largest source of new Canadians with more than 700,000 people of Indian heritage calling Canada home. "Indo-Canadians have shared their culture, values, skills and expertise, and continue to do so." 

Flaherty praised the role of cultural organizations such as Panorama India, through which Indo-Canadians have also shared their spirit of generosity and giving. 

The minister presented plaques to various businesses for their community initiatives, including to Jeff Lal of Jaipur Development, and Nina Jain of Scotiabank. 

Panorama India provides a platform for all Indian cultural associations, groups, and individuals to exhibit and showcase their arts and culture and to foster a better relationship between India and Canada. 

The Canada Day celebration, now called Canada-India Day Gala Dinner, is a fund-raising event. The funds raised enables the organization hold various other events to showcase India's art, culture and heritage.


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## alamgir

The myth of the NEW Indiaindia is a roaring capitalist success story. So says the latest issue of Foreign Affairs; and last week many leading business executives and politicians in India celebrated as Lakshmi Mittal finally succeeded in his hostile takeover of the Luxembourgian steel company Arcelor. Indias leading business newspaper, The Economic Times, summed up the general euphoria over the event in its regular feature, The Global Indian Takeover: For India, it is a harbinger of things to come  economic superstardom.

This sounds persuasive as long as you dont know that Mr Mittal, who lives in Britain, announced his first investment in India only last year. He is as much an Indian success story as Sergey Brin, the Russian-born co-founder of Google, is proof of Russias imminent economic superstardom.

In recent weeks, India seemed an unlikely capitalist success story as communist parties decisively won elections to state legislatures, and the stock market, which had enjoyed record growth in the last two years, fell nearly 20%in two weeks, wiping out $2.4 billion in investor wealth in four days. This week Indias Prime Minister, Manmohan Singh, made it clear that only a small minority of Indians will enjoy Western standards of living and high consumption.

There is, however, no denying many Indians their conviction that the 21st century will be the Indian Century just as the 20th was American. The exuberant self-confidence of a tiny Indian elite now increasingly infects the news media and foreign policy establishment in the US.

Encouraged by a powerful lobby of rich Indian-Americans who seek to expand their political influence within both their home and adopted countries, President Bush recently agreed to assist Indias nuclear programme, even at the risk of undermining his efforts to check the nuclear ambitions of Iran. As if on cue, special reports and covers hailing the rise of India in Time, Foreign Affairs and The Economist have appeared in the last month.

It was not so long ago that India appeared in the American press as a poor, backward nation, saddled with an inefficient

bureaucracy and, though officially nonaligned, friendly to the Soviet Union. Suddenly the country seems to be not only a roaring capitalist success story but also, according to Foreign Affairs, an emerging strategic partner of the US. To what extent is this wishful thinking rather than an accurate estimate of Indias strengths?

Looking for new friends and partners in a rapidly changing world, the Bush administration clearly hopes that India, a fellow democracy, will be a reliable counterweight against China as well as Iran. But trade and cooperation between India and China is growing; and, though grateful for American generosity on the nuclear issue, India is too dependent on Iran for oil to wholeheartedly support the United States in its efforts to prevent the Islamic Republic from acquiring a nuclear weapon. The world, more interdependent now than during the cold war, may no longer be divided up into strategic blocs and alliances.

Since the early 1990s, when the Indian economy was liberalised, India has emerged as the world leader in information technology and business outsourcing, with an average growth of about 6 per cent a year. Growing foreign investment and easy credit have fuelled a consumer revolution in urban areas. With their Starbucks-style coffee bars, Blackberry-wielding young professionals, and shopping malls selling luxury brand names, large parts of Indian cities strive to resemble Manhattan.

But the increasingly common, business-centric view of India suppresses more facts than it reveals. Recent accounts of the alleged rise of India barely mention the fact that the countrys $728 per capita gross domestic product is just slightly higher than that of sub-Saharan Africa and that, as the 2005 United Nations Human Development Report puts it, even if it sustains its current high growth rates, India will not catch up with high-income countries until 2106.

Nor is India rising very fast on the reports Human Development index, where it ranks 127, just two rungs above Myanmar and more than 70 below Cuba and Mexico. Despite a recent reduction in poverty levels, nearly 380 million Indians still live on less than a dollar a day.

Malnutrition affects half of all children in India, and there is little sign that they are being helped by the countrys market reforms, which have focused on creating private wealth rather than expanding access to health care and education. Despite the countrys growing economy, 2.5 million Indian children die annually, accounting for one out of every five child deaths worldwide; and facilities for primary education have collapsed in large parts of the country (the official literacy rate of 61 percent includes many who can barely write their names). In the countryside, where 70 percent of Indias population lives, the government has reported that about 100,000 farmers committed suicide between 1993 and 2003.Feeding on the resentment of those left behind by the urban-oriented economic growth, communist insurgencies have erupted in some of the most populous and poorest parts of north and central India. The Indian government no longer effectively controls many of the districts where communists battle landlords and police, imposing a harsh form of justice on a largely hapless rural population.

The potential for conflict  among castes as well as classes  also grows in urban areas, where Indias cruel social and economic disparities are as evident as its new prosperity. The main reason for this is that Indias economic growth has been largely jobless. Only 1.3 million out of a working population of 400 million are employed in the information technology and business processing industries that make up the so-called new economy.No labour-intensive manufacturing boom of the kind that powered the economic growth of almost every developed and developing country in the world has yet occurred in India. Unlike China, India still imports more than it exports. This means that as 70 million more people enter the work force in the next five years, most of them without the skills required for the new economy, unemployment and inequality could provoke even more social instability than they have already.

For decades now, Indias underprivileged have used elections to register their protests against joblessness, inequality and corruption. In the 2004 general elections, they voted out a central government that claimed that India was shining, bewildering not only most foreign journalists but also those in India who had predicted an easy victory for the ruling coalition.

Many serious problems confront India. They are unlikely to be solved as long as the wealthy, both inside and outside the country, choose to believe their own complacent myths. 

www.india-news.in


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## Contrarian

I have read this article, its old, why are u posting it now alagmir, i think it has been posted before.

Plus now its incorrect as well, there has been a manufacturing boom in India as well, therefore it is giving rise to a labour intensive growth pattern.


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## Bushroda

Alamgir, If you are posting something I request you to post the link to the article as well rather than just the top URL of the website.


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## Bushroda

*In the fast lane*

*In spite of several roadblocks, Hertz India is on the fast lane to position itself as a 'Total Mobility Solution Provider' in business and leisure travel across the country. Rajiv K Vij, CEO, gets behind the wheel to share his thoughts with Praveen K Singh.*

At a time when intra city travel has become an ingredient of professional necessity as well as a statement of leisure lifestyle, the business of car rentals has gained enormous significance in the hospitality segment. The market for car rentals is growing at a rapid pace, driven by the booming hotel and travel sectors. One of the prominent players in this segment is Hertz India. Rajiv K Vij, CEO of the company says, "India has around 2,00,000 cars registered as taxis in India, and the organised sector generates a market share of 10 per cent in value terms."

Vij is enthused by the fact that the car rental industry in India is expected to register a growth of 20 per cent year-on-year for the next three to five years. His aim is to make Hertz India the first brand choice for vehicle rentals and total mobility solutions. 

*Development in India *

Car rental is a fairly nascent business in India. The success achieved so far is backed by the present needs. Hence, the possibilities for its success become far more apparent. Vij says, "Car rental industry in India is dominated by chauffeur drive options and as a matter of fact - can be largely defined as taxi - 'metered' for city operation and 'non-metered' for inter-city operations." He further explains that globally, there are four distinct services offered by the car rental industry for business/leisure travellers: Self-drive dominated by brands like Hertz, Avis, Budget, etc.; Radio Taxi's for city travel needs including for travellers staying in hotels, serviced apartments, etc.; limousine services offering high-end cars for dignitaries, occasional usage and entertainment; and finally, corporate fleets - companies offering cars to their employees. 

In this respect, car sharing is another concept that is gaining worldwide acceptance. "It is expected that over the next few years, the Indian market will see a transition from its current state to comparable developed markets of the world, especially the metros," says Vij. I believe that the potential for growth is very high in self-drive, corporate fleets and radio taxi options, each of which will service different market segments by offering economy, standard and premium services to penetrate the market deeply, he adds. 

"Currently south, north and west regions of the country are bigger markets than the east. High-end car rental services/self drive and corporate fleets have more potential in urban centres and regions with high concentration of business establishments and major tourist locations," he feels. 

*On the horizon*

The open economy has just spurred the growth of opportunities. The market for the car rental is large enough to accommodate various new players. Vij opines that funds and brands will only help in improving overall infrastructure and quality of services, which in turn will pull in more customers as well as improve domestic travel quality. With globalisation of the Indian economy and more Indians travelling overseas on business and leisure, this segment of the travel industry is heading upwards. Also, the understanding of the value of brands in terms of quality and reliability of service is being better appreciated today. "The appreciation factor is playing an important role in the growth of this sector. Along with better infrastructure in place over time, possibilities for the sector to grow further can only increase," he says. 

As such there is a visible shift by both the corporate and the leisure segment in using branded services. This is more prevalent in companies who are looking at a consistency standard in their products/services, remarks Vij. 

Customers will demand self-drive cars' like their international counterparts, predicts Vij. He says, " In future, upon reaching a city one can expect to get an SMS with the car number, the chauffeur's name and his mobile number. Long term rentals for expatriates is another trend, which is sure to get a boost. Expats coming for short durations would be happy to cut down the complications associated with ownership. through other options available to him." There is also a large market potential for off road adventure tours using SUVs which are now available in the country. Car rentals in future would be more organised, predicts Vij. 

*Vij believes*

The international scenario in the car rental business is also changing very rapidly. Overseas, driving holidays is catching up big time with the Indian traveller increasingly realising the fun of travelling by road. "Although it is a challenge to drive in Europe/US where road and traffic conditions are very different, most people who try this once always come back for more. This has heralded a new beginning for the car rental industry in India ," believes Vij. 

The Indian market is however nascent and fragmented. "The state of the infrastructure of airports, highways, road signages, etc is a major challenge faced by this industry. Recognition of the industry as a critical component to tourism and formation of a study group by the government to address our core problems is the need of the hour," suggests Vij.


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## Bushroda

*India's Rupee Rises on Optimism Global Funds Buying More Stocks* 
By Anoop Agrawal

July 9 (Bloomberg) -- India's rupee rose to the highest since May 1998 after overseas funds bought more shares and bonds in a nation where the economy is growing at a pace second only to China among the world's largest economies. 

Global funds bought stocks for five days through July 5, the longest run in more than a month, according to the stock market regulator. That helped the benchmark stock index rise to a record today. The rupee rose also as companies borrow more overseas to benefit from lower U.S. dollar interest rates. 

``I am bullish on the rupee,'' said Vikas Babu, a currency trader with state-owned Andhra Bank Ltd. in Mumbai. ``The capital flows are robust as there is a deep interest in Indian assets. That trend is unlikely to reverse immediately.'' 

The rupee rose to 40.425 against the dollar as of the 5 p.m. close in Mumbai, from 40.455 on July 6, according to data compiled by Bloomberg. That the strongest since May 13, 1998. 

ICICI Bank Ltd., India's largest lender by market-value, plans to borrow a record $1.5 billion to fund growth in demand for credit. The amount is almost twice the syndicated borrowings of Indian banks this year and a little lower than the $1.86 billion of loans the bank took in 2006. 

India's economy expanded 9.4 percent in the fiscal year ended March 31, the best since 1989. The International Monetary Fund expects India to overtake South Korea this year as Asia's third-biggest economy, behind Japan and China. 

*Direct Investments *

Lenders, including HDFC Bank, UTI Bank, and State Bank of India, are planning share sales to meet rising demand for loans. Infrastructure Development Finance Co. raised $519 million selling shares last week to fund public works. 

Foreign direct investment rose 78 percent in the year through March to $8.44 billion, the central bank said June 29. 

Overseas borrowings by Indian firms rose almost sixfold to $16.1 billion in the fiscal year through March 31, making 36 percent of capital flows into the country, the central bank said on June 29. 

Capital flows into Asia's fourth-largest economy helped push up the rupee 9.6 percent this year. Infosys Technologies Ltd., India's second-largest computer-services provider, may miss its local-currency sales forecast because of the stronger rupee, which lowers the value of overseas revenue, Credit Suisse said last week. 

The rupee pared gains on speculation the central bank will sell the currency through state-owned banks to halt a slowdown in the growth of exports. 

Growth in overseas shipments slowed to 12.7 percent in the five months through May, compared with around 19 percent a year earlier, the Ministry of Commerce and Industry said July 2. Exports account for about 12 percent of the $854 billion economy. 

``There is speculation of the central bank helping the dollar,'' said Agam Gupta, head of trading at Standard Chartered Plc in Mumbai. ``The rupee may decline this week.'' 

The currency may fall to 40.50 this week, Gupta said. 

The central bank's foreign-exchange reserves rose $36.2 billion in the first half, compared with $25.7 billion for the six-month period last year. That suggests the central bank bought more foreign currency.


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## Bushroda

*Jet to fly Mumbai-Newark from August 5*
Suman Guha Mozumder in New York 
July 12, 2007

Jet Airways, India's largest private airlines, on Wednesday announced its daily transatlantic service between Mumbai and New York, beginning August 5.

Jet Airways [Get Quote] officials, including chairman Naresh Goel, said flights will operate between New York's Liberty International Airport, which is actually located in New Jersey, and Mumbai International Airport on new Boeing 777-300ER wide-bodied jets.

Flights depart New York at 8:25 pm and arrive in Mumbai at 11:30 pm the following day. Return flights will leave Mumbai at 2:10 am and arrive in New York at 11:55 am the same day.

"Just as Jet Airways created unprecedented standards of efficiency and service on flights in India, we are proud to be launching transatlantic service, and bringing the spirit of the New India, into one of the world's most important cities," Goel said in a brief speech at the gala announcement luncheon at the Waldorf Astoria Hotel.

"The burgeoning economy of 'New India' offers American business leaders myriad opportunities, which is why the time is right for us to start flying from new York," he said.

The announcement came a day after Air India, India's national carrier, announced non-stop daily flights between Mumbai and JFK airport in New York beginning August 1.

"Our goals is to be recognised as one of the world's top five airlines by 2010 and having built our reputation in India and six other international destinations, we are confident that the US market is ready to recognise Jet Airways as one of the most exciting and outstanding pioneers of aviation in the world today," he said.

Goel said that with the forging of closer relations between the US and India, two of the world's largest democracies, airline passenger traffic is increasing to and fro almost regularly. "We see that the US is going to be our biggest market," Goel said.

Jet, which is building a major hub in Brussels for all its flights connecting India and the US, will also commence service between Delhi and Toronto beginning September 5. In addition to flights to Brussels from Mumbai and Delhi, direct flights between Brussels and Chennai, Bangalore and Ahmedabad will eventually enable travelers to connect seamlessly from five Indian gateways to six North American airports, including Chicago, Los Angeles and San Francisco.

Jet did not say how early the flights will take off.

Asked as to how he would compete with Air India which claims to have the emotional loyalty of a large number of members of Indian corporate world, Goel parried a direct reply.

"It is a huge market and as far as Air India is concerned its market share is about 14 or 15 percent. Naturally, the rest of the market is for other carriers. So, it is only fair that customers get a better service on this route," Goel told rediff.com. "We are striving not to be inferior to Singapore Airlines or Cathay for that matter," he said.


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## Bull

alamgir said:


> Nor is India rising very fast on the report&#8217;s Human Development index, where it ranks 127, just two rungs above Myanmar and more than 70 below Cuba and Mexico. Despite a recent reduction in poverty levels, nearly 380 million Indians still live on less than a dollar a day.



I too dont subscribe to the views of India being a 'economic superpower' or si it anywhere close to becoming a meaningfull one. 

but due to sheer size of the popluace it can be bigger than US even with 380 million people living under abject poverty. Thats the truth.

Poverty levels were at 70&#37; during 1950's now it is at 35%. Thats a whopping 50% reduction, commendable and laudable.



alamgir said:


> Malnutrition affects half of all children in India, and there is little sign that they are being helped by the country&#8217;s market reforms, which have focused on creating private wealth rather than expanding access to health care and education. Despite the country&#8217;s growing economy, 2.5 million Indian children die annually, accounting for one out of every five child deaths worldwide; and facilities for primary education have collapsed in large parts of the country (the official literacy rate of 61 percent includes many who can barely write their names). In the countryside, where 70 percent of India&#8217;s population lives, the government has reported that about 100,000 farmers committed suicide between 1993 and 2003.



Well whatvere is said here are the present facts, how can you say thats proof of ni improvement when no past data is presented. You have to state or atleast go thru previous data to figure out where the progress is made.


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## Bushroda

*IBEF Research: India in the fast lane*
Source : Moneycontrol.com
2007-07-12

The India growth story is no longer just the preserve of columns in daily newspapers and speeches of political leaders and civil servants. The number of growing job opportunities in big and small cities, the construction work on the roads, ports and at airports, the healthy balance sheets of companies and the heightened growth in consumerism  all go on to prove that this growth story has begun to change lives of millions across the length and breadth of India.

Statistics only reinforce the all-pervading India growth story. During the past three years, India has grown at an average growth rate of 8.6%, the fastest since Independence. Its global competitiveness ranking has improved from 57 in 2001 to 45 in 2005 and 43 in 2006. According to the latest Global Competitiveness Report, India has the highest rank amongst the BRIC economies, with China at 54, Russia at 62 and Brazil at 66.

Indias economy is at the fulcrum of an ever-increasing growth curve. While both the industry and the services sector are growing in doubt-digits, other indicators  such as the capital markets, foreign exchange reserves, foreign trade and (outward and inward) FDI  too reinforce Indias growth story. Today, Indias foreign exchange reserves are at over $200 billion. The Sensex has topped the majestic 14,000 mark and FDI inflows for 2006-07 are estimated at $19 billion (up from $7 billion during 2005-06). During 2006-07, exports rose 23.9 per cent to $124.63 billion, while imports jumped 29.3 per cent to $181.4 billion.

In services, India has emerged as the worlds 10th largest services exporter. The country has transformed itself from a low-cost outsourcing hub for back-end jobs to a knowledge hub to the world and an emerging R&D powerhouse. Over 100 Fortune 500 companies have set up R&D centres in India.

In 2006-07, the industrial sector grew by an impressive 11.3 per cent. The upbeat Indian industry has outmatched China with as many as eight domestic firms making it to Standard & Poors list of challengers to leading global blue-chip companies. S&P recently included eight Indian companies in its annual, Global challengers List of 300 firms, as against four from China.

The private sector in India has played a key role in Indias growth. From operating in a protected environment, Indias dynamic entrepreneurs have moved towards attaining world standards of quality and efficiency at competitive costs. Today, Indias private sector contributes nearly 75 per cent of Indias GDP.

Indian companies have also displayed a voracious appetite for doing business overseas. Since 2000, India Inc has made over 300 acquisitions overseas. Big ticket acquisitions like the recent £595 million acquisition of Whyte & Mackay by Vijay Mallyas UB group, Tata Steels acquisition of Anglo-Dutch steelmaker Corus Group Plc for $11 billion and AV Birla groups acquisition of Atlanta-based aluminium major Novelis for $6 billion, go on to prove that corporate India is today a force to reckon with. Numerous Indian companies, such as Ranbaxy, Dr Reddys, Wockhardt, Moser Baer, Bharat Forge, Infosys, Tata Motors, TCS, L&T, Wipro and Satyam, have made a mark overseas.

At the helm of the India growth story is its ever-increasing middle-class, estimated to grow from 50 million today to 583 million by 2025. India is today the fourth largest economy in the world in terms of purchasing power parity (PPP) and is expected to rank third by 2010, just behind the US and China. A recent research report by McKinsey Global Institute points out that the Indian middle class will reshape global markets. Households that can afford discretionary consumption will grow from 8 million today to 94 million by 2025, the report says

Indias per capita GDP is growing at the rate of 6-7 per cent per annum. Indias overwhelming youth population  70 per cent of India is below the age of 35 years  is playing a vital role in its growth. Rising incomes have led to higher consumer spending and rising consumer confidence. As a result, sectors like consumer durables; retail and IT have been growing at rates of over 20 per cent.

Industries like aviation, retail and telecom are growing like never before. India is adding 5-7 million mobile connections each month. Indias civil aviation passenger growth stands at 20 per cent - among the highest in the world. Airlines are expanding like never before - ten Indian carriers have placed orders for 400 aircraft worth $15 billion. The number of passengers who will be airborne by 2020 is a whopping 400 million. Similarly, organised retail industry too is growing at a healthy rate of over 35 per cent.

Once considered a bane, Indias core sector (roads, power, ports, airports etc) is today being viewed as a $340 billion opportunity over the next 10 years. The governments measures to improve the countrys infrastructure are moving at a fast pace. Forty-eight new road projects worth $12 billion are under construction. And an additional $24 billion worth of investments are being undertaken to develop and upgrade roads till 2008. The government has announced an ambitious plan to add around 1,00,000 MW of additional generation capacity by the year 2012 with an investment target of $73 billion. Railways, airports, ports, water supply, all these are in for huge investments to cater to Indias ever-increasing needs.

Growth is not surpassing villages. During 2000-2005, penetration of colour TVs in rural areas has raised by 200 per cent, followed by motorcycles at 77 per cent, refrigerators at 31 per cent, tractors by 28 per cent and bicycles by 17 per cent. Rural India today is consuming more shampoos, packaged oils and biscuits, more soft drinks, branded utensil cleaners and toothpastes and toothpowders today than ever before. The government is working towards improving the productivity of the agricultural sector. Prime Minister Dr Manmohan Singh recently announced that $120 billion would now be spent on a four-year project ending in 2009 to connect 66,000 villages by road. Rural road connectivity will lead to rural development. It will make villages accessible to economic and social services. And as the India growth story also becomes the story of rural India, the prowess of the nation will become truly insurmountable.


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## Bushroda

*Exporters gain if India-EU FTA becomes reality* 

London, July 12: Indian exporters will be able to increase their exports to the 27-nation European Union (EU) by just under 20 percent, if the negotiations for a Free Trade Agreement (FTA) between India and the EU is successfully concluded, according to a media report today. 

India's Commerce Secretary G K Pillai and the EU's David o'Sullivan launched these negotiations in Brussels on June 28, Inepnext said here. 

The next round is expected to take place in 2-3 months' time in New Delhi and will be ready for signature two years, it said. 

The stakes are high for both sides. The FTA is expected "to promote trade between India and the EU by removing barriers to trade in goods and services and investment across all sectors of the economy," according to the brief statement issued by the two sides on June 28. 

This agenda is favoured by Prime Minister Manmohan Singh and his EU counterparts. At 2005 summit meeting they set up a high level trade group to look into the possibility of launching negotiations for trade and investment agreement. 

However, the 2-day meeting in Brussels seems to have made little headway and this despite the admission, by the two sides, that "there has been significant preparatory work." 

The high level trade group, made up of senior Indian and EU officials, has in fact been preparing the ground for these negotiations since October, 2005. 

Its report, covering such key issues as trade in goods and services, investment, technical and sanitary barriers to trade, intellectual property rights and government procurement, is in the hands of the Indian and EU negotiators. 

The EU's preparations have not been limited to its projected FTA with India; the fact is that the EU plans to conclude FTAs with not only India but also the Association of South-East Asian Nations (ASEAN) and South Korea. 

These agreements could boost EU exports to India by just under 57 percent, to Asean by some 25 percent and to South Korea by 48 percent, according to studies carried out by two independent think-tanks on behalf of the European Commission. 

The biggest gains for India would include a 46 percent increase (worth 3.6 billion euro) in its exports to the EU of textiles and clothing. 

Business services from Asean to the EU would rise by 80 percent (worth 14 billion euro) and of vehicles from Korea by 40 percent (worth 5 billion euro). 

An EU-Asean agreement would see some trade diversion from China and India, and the Gulf States could see some trade diversion effects by an EU-India FTA, according to the two think-tanks. 

The 27 EU governments adopted the European Commission's recommendations to open FTA negotiations with both Asian and Latin American countries in late April. 

The aim, they declared, should be "a new generation of WTO-compatible FTA that extend beyond present agreements." 

These FTAs, the EU governments pointed out, "should be ambitious and comprehensive and comprise far-reaching liberalization of trade in goods and services, and investments," with "special attention given to the elimination of non-tariff barriers." 

The new FTA agreements, they pointed out, would help EU industries compete more effectively against their global competitors on these three important markets. 

This is because each FTA agreement would be so crafted as to promote trade between the two parties to the agreement. Thus the EU-India agreement could provide tariff cuts for products of specific export interest to each side. 

These reduced tariffs would not be available to exporters from other countries, because the agreement would contain rules of origin that they would be unable to meet. 

Tariff cuts made within the framework of the Doha Development Round would have to be extended to all WTO countries, however, under the Most-Favoured-Nation (MFN) rule. 

The negotiations for an EU-India FTA could prove even more difficult to bring to a successful conclusion than the Doha Development negotiations. 

The EU will be pressing for substantial tariff cuts, on the grounds that India, as well as Asean and South Korea, "combine high levels of protection with large market potential." 

What is more, the EU wants the FTAs to focus on areas not currently covered by WTO rules, such as investment, trade in certain services and the removal of non-tariff barriers and technical barriers to trade.


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## Bushroda

*Foreign hotel chains queue up for India* 
Mohini Varma
Tuesday, July 10, 2007 (Pune):

Foreign hotel chains are making a beeline for India, Radisson's parent US based Carlson Hotels has now got the taste of solid growth and is spending Rs 600 crore to expand.

The hotel chain wants to increase its properties from 34 to 64 properties. These will be across categories like top end with Radisson, business hotels with Park Plaza and budget hotels with Country Inns.

Starwood hotels and resorts which has over 21 operating properties in India including the Le Meridians and Sheratons is also planning to launch its trendy-funky brand of 'W' hotels in Mumbai.

The boom in the tourism Industry has established an unprecedented demand for quality accommodation, room rates have gone up by 18-22 per cent in the past year.

Thats why international and domestic players are fast scaling up operations in India and now the Carlson group is scaling up both in the luxury as well as the budget segments.

*Budget segment*

New York based Berggruen has invested Rs 400 crore to expand in cities like Kerala, Goa and Karnataka. Tata's Ginger is spending between Rs 200-240 crore to capture the tier II towns.

Whitbread with Emaar and Accor are putting up low-price hotel chains. And Carlson's Park Inns will also see an investment of Rs 200-300 crore.

With the demand for the budget segment growing three times faster than the luxury segment, competition in this space is likely to hot up further.

India is estimated to need up to 80,000 economy-style rooms by 2010, some of which is driven by the commonwealth games, but for these hotel chains all such expansion surely make for profitable seasons ahead.


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## Bushroda

*A 24-hour Real Estate channel on air soon* 

A 24-hour TV channel dedicated to real estate goes on air this month in India, a hot property market where buying a new home is considered a hallmark of success among the youthful middle-class. About 90 per cent of all property investment in the country is in houses, while an economy growing at 8 to 9 per cent a year has spurred demand for shopping malls and offices as well. The owners of Real Estate TV say their station will be the first of its kind in south and southeast Asia, a one-stop shop for everything related to the property business and some 250 related industries, such as cement and steel. It will provide comprehensive, latest and authentic updates on all aspects of real estate, including infrastructure, said Manoj Namburu, chairman of the Alliance Group which owns it. Apart from property information, analysis and advice, we will have various shows on lifestyle, heritage homes and interior decor among other things, said Krishnan Sriram, the channels corporate communications chief. 

The channel can also be seen in the Middle East, targeting the large Indian expatriate community in the Gulf. Real Estate TV will also air game shows and even soap operas with a real estate theme, as well as a reality show on the red tape and corruption that faces home-buyers. Indias property boom gathered pace after the government eased rules on foreign investment in the construction industry in 2005 to help revamp the countrys crumbling infrastructure and fill an estimated shortfall of 20 million homes.


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## alamgir

malaymishra123 said:


> I have read this article, its old, why are u posting it now alagmir, i think it has been posted before.
> 
> Plus now its incorrect as well, there has been a manufacturing boom in India as well, therefore it is giving rise to a labour intensive growth pattern.



sorry have not seen it, and manufacturing boom in india as you describe above but some indian not agree with you as in this article................................................................................................Laveesh BhandariPosted online: Saturday, February 17, 2007 The problem is not job-less growth; it is the quality of Indias demographic dividend 

The latest unemployment figures from the NSSO  preliminary estimates of the NSS draft were reported by this newspaper on Friday  are not surprising to those who have been following the numbers. Urban unemployment is up marginally to 7.4 per cent in 2004-5 from 7.3 per cent in 1999-2000 and 6.8 per cent in 1993-94. Smaller cities have a much larger unemployment rate, and women suffer higher unemployment rates than men. The difference between larger and smaller cities is quite significant  6.1 per cent in the larger (Class 1) cities to 8.7 per cent in Class 3 cities. What is more pertinent is that unemployment rates are rising in smaller cities and falling somewhat in the larger cities. 

Will this trend continue? With high economic growth, unemployment will increase but at a lower rate. However, with sustained high growth and with better education and training, unemployment rates will fall. On the one hand the demographic dividend is yielding fruit and large numbers are entering the labour force. On the other, greater economic growth is generating a greater demand for human resources. One would therefore expect that this greater demand for human capital will be met in a country such as India. But that is not necessarily the case. 

On the one hand a large number of youth are not finding the jobs that they would like  and employers are complaining everywhere about a dearth of adequately trained manpower. 

The problem, of course, is a mismatch in the quality of the human capital. A large number of Indias youth are under-educated, under-trained and under-prepared for the skills required in todays economy. They look for jobs, but do not have the human capital or the skills required for the jobs that are available. As a consequence, the few who have the required skill set are being offered stratospheric salaries. 

There are a few other dimensions to the problem. The first is geographic. In many areas this increase in the labour force is being compensated by out-migration. In some others it is being accelerated due to in-migration. It is well-known that the larger cities and larger economic concentrations have been growing far more rapidly than those more in the interiors in the last few years. As a consequence cities such as Delhi have been attracting large number of young migrants, many of whom are unable to get jobs. Other cities such as Kolkata are only now seeing rapid economic growth and therefore the fall in unemployment rates is quite significant. 

The second aspect of unemployment is its concentration in the 15-25 age group. Depending upon the estimate, between 70 to 90 per cent of the unemployment is in this age group. The youth can afford to wait if they do not find a job to their liking. The responsibilities are lesser and the cost of waiting not that high. And the bulk of the unemployment is a result of this ongoing search for the right job rather than taking up any job that is available. As a consequence we find that a far greater proportion of the better educated are employed. This is an important aspect of unemployment in India. A large part of the unemployment is actually a result of the mismatch between expectations of the employee and the employer. 

There are various ways by which this mismatch can be corrected. The first is related to better quality of matching services. The current employment exchange system is quite defunct and needs to be shut down or completely overhauled. Skill and training mechanisms need to be strengthened by bringing in employers in overseeing such institutions if not running them altogether. There are many models currently being debated, but as is often the case in India, few have been taken up even on a pilot basis. 

But such skill and vocational courses are not the only solution. The core issue has to do with a school and higher educational system that is low on quality and content and has little relationship with the requirements of the employment market. Indian youths are getting educated in large numbers but what many are learning has little value. 

Some have argued that reforms have led to job-less growth. The argument goes that rapid economic growth in India has been unable to generate opportunities for the poor and underprivileged. And as a consequence unemployment has been rising as well. 

Consider some of the most rapidly rising professions of the 1990s. As per analysis conducted on NSSO 1993-94 and 1999-2000 data, among the major occupations the most rapidly growing ones were wholesale and retail trade, agents, bricklayers and construction workers, nursing and health technicians, hotels and restaurant keepers, transport equipment operators, cooks and waiters, dhobis, drycleaners, caretakers, sweepers, etc. Most of these professions are not those normally associated with the more privileged section of the population. And most of the reforms in the 1990s would not have directly impacted their sectors. But the impact of greater incomes generated opportunities for all across the economy. In other words, the problem is not so much that opportunities are not being generated  had that been the case unemployment would have been far higher than the 7.4 per cent. Neither is it an issue of opportunities for the privileged versus those for the underprivileged. The critical issue is that of the so-called demographic dividend. 

The majority of the countrys population is currently classified as youth, adolescent or child. A very large group enters the working age group every year. The numbers are staggering. As of 2001 there were 354 million in the 5-19 year age group. That means that somewhere in the region of 170 to 200 million will want a job over the next 15 years; or in the region of 12 to 15 million every year. 

In the net analysis, therefore, we need to aim for greater growth that needs to be sustained. And we need to match that with a comprehensive approach towards universal education and training. 

The writer is director, Indicus Analytics


www.indianexpress.com/story/23482.html-37k


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## joey

> The potential for conflict  among castes as well as classes  also grows in urban areas, where Indias cruel social and economic disparities are as evident as its new prosperity. The main reason for this is that Indias economic growth has been largely jobless. Only 1.3 million out of a working population of 400 million are employed in the information technology and business processing industries that make up the so-called new economy.No labour-intensive manufacturing boom of the kind that powered the economic growth of almost every developed and developing country in the world has yet occurred in India. Unlike China, India still imports more than it exports.


Wrong...and grossly.




> For decades now, Indias underprivileged have used elections to register their protests against joblessness, inequality and corruption. In the 2004 general elections, they voted out a central government that claimed that India was shining, bewildering not only most foreign journalists but also those in India who had predicted an easy victory for the ruling coalition.


Wrong again, the author does not knows Indian politics.
In some states poor are being kept poor so that they can increase vote bank - Communist states.


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## joey

There are problems, and lots of it, But I'm optimistic due to its my country and I'm determined to do something for it.

Lets move on alamgir  We need to see how sustainable things are for more 5 years to confirm anything.


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## blitz

Alamgir, i might even believe you, if i didn't see the transformation with my own eyes. I have already seen tremendous growth in 5 years, so much so that it seems like a different world. I went to my home town Lucknow, India, after 5 years abroad. Its a different city to say the least. Its the kind of transformation that happens in decades in other countries. And Lucknow is a 2nd tier city, not even 1st. There was not a single mall in Lucknow when i left 5 years ago, there are 15 now. The roads are broader, cleaner in general. Where there used to be traffic jams earlier, there are flyovers on every busy section. etc etc
And all this in a 2nd tier city.


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## Bushroda

*India's forex reserves at a record $214.835 bn*
13 Jul 2007, 2040 hrs IST,REUTERS

MUMBAI: India's foreign exchange reserves rose to a record $214.835 billion on July 6, from $213.486 billion a week earlier, the Reserve Bank of India said in its weekly statistical supplement on Friday. 

The central bank said foreign currency assets expressed in US dollar terms included the effect of appreciation or depreciation of other currencies held in its reserves such as the euro, pound sterling and yen. 

The foreign exchange reserves include India's Reserve Tranche Position in the International Monetary Fund, the RBI said.


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## Bushroda

*Trend Watch: Economic outlook* 

Industrial Production data for the month of April released in the month of June, was gratifying to the extent of confirming the fact that the Indian economy is on high growth trajectory, while after one month the same data for May evoked the discussion about its slowing down. 

In April 2007, the index for industrial production was estimated to grow by 13.6% annual growth while manufacturing sector soaring by 15.1% during the same period. However, government`s exercise of revising the same estimates has been disappointing, with a downward revision. The official data released this week (July 12) has revised the April IIP growth to 12.3%. Moreover, for May, the index is estimated to registered Y-o-Y growth 11.1% lower than 11.7% in the same month a year ago. 

The table given shows that important sectors like manufacturing and consumer durables headed downward. Additionally slump in automobile sales, drop in banks` credit raised fears about the slowdown of the economy. However, drawing such an extreme conclusion doesn`t seem to be required given the rise in capital good sector. Moreover, plausible 8.7% growth in infrastructure, and better performance by mining and capital goods sectors can`t be overlooked. 

It is well-known fact the current manufacturing growth is propelled by investment demand and not only consumer demand, which warrants a sustainable growth in the sector. Though the numbers have headed southward, holding RBI`s tightening monetary policy in 2006 and early 2007culpable for the downward movement, RBI`s stand is very much desired, given the skewed performance of the sectors, especially agriculture. The prime sector i.e. agriculture, is lagging much behind, and continuous robust industrial growth in such scenario will create imbalances in the economy, hampering its growth prospects in the future. Thus, such adjustments here and there, confirm soft-landing of the economy and therefore should be dealt with , without creating too much of concern.

The widely tracked inflation data published on Friday also injected a surprise in the market. The WPI-based inflation stood at 4.27% for the week ended June 30, higher than 4.13% in the previous week. Nonetheless, the rate still stands within the RBI`s comfort limit of 5% for this fiscal. The rise in the inflation rate was attributed to disrupted supply of commodities due to heavy rains. In near future however, amount and distribution of monsoon will be the key determinant for the movement in prices (especially for primary articles). Besides, the rising trade has made the domestic prices more sensitive to the global ones. Skyrocketing crude oil price globally will also put upward pressure on domestic fuel prices. All these drivers needs to be monitored but still upto 5% inflation rate is very high for the economy growing at 8% plus. 

Sharp appreciation in the Rupee versus Dollar received a wide attention by both market players and policymakers. The domestic currency, supported by better economic prospects and foreign capital inflows in equity market has gained over 9% in this year so far, making exporters` life difficult. Though, the market participants drew a conclusion that the RBI may not cap the Rupee rally when the government announced relief packages to for Indian small & medium enterprises (SME) sector exporters, it is unlikely to to sustain for long. At very first place, offered package is very inadequate for Indian exporters to improve their margins and they have expressed their dis-satisfactions on this. Since the SME contributes largest part in the country`s exports, and provides employment to millions of people, a shut down of such enterprises will cost heavily for the government. Additionally, since the sharp Rupee appreciation reducing the earnings of Indian BPO (Business Processing output) units, may force these IT and BOP units to scale down their domestic operations. It would create a huge unrest in the society as BPO is the major employment generator for Indian youths. Such real economic factors, increase possibility of the central bank to step in the currency market to cut the Rupee rally. Liquidity sterlisation via MSS (Market Stabilization Scheme) is a widely used instrument by the apex bank in recent weeks. 

In the same line an CRR hike is also widely expected by the experts. Moreover, incremental CRR which targets on quantity mechanism is foreseen ahead of the monetary policy review on July 31, 2007, while policy rate hike is unlikely for the near short-term.


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## Bushroda

*Indians find home in southern China*
By Steven Chan and Liang Qiwen (China Daily)
Updated: 2007-07-14 09:06

GUANGZHOU: Of the myriad ethnic groups that have made Guangzhou something of a multinational, multicultural melting pot, one that is growing in increasing numbers in recent years is the Indian community. 
On the back of Guangzhou's strong economy and in the wake of China's WTO entry, more and more Indians have chosen to set up companies in the city. 

With these entrepreneurs have come families, Indian staff, restaurants and banks and other businesses looking to service this growing community. UCO Bank and Bank of Baroda, two of India's largest, have recently set up branches in Guangzhou. 

While official numbers are hard to come by, residential enclaves in downtown Taojin Lu and Xiaobei Lu have experienced surges in recent years. Today there are an estimated 2,000 to 5,000 Indians living in the area. 

But though in China, observers will find Indians follow traditional, rather than local, customs and culture. Rather than rolling up en-masse at a Chinese New Year's Day festival, Indian residents are more likely to be found socializing in large numbers behind closed doors in secluded restaurants. 

The Indian community is very "close-knit", admits Yogesh Nagaonkar, manager and co-owner of Indian restaurant Haveli. While there is no structured community life, Indians venturing to the city are quickly absorbed into a low-key social group that is actually very open to insiders, he says. 

"Welcoming new people is the way to network and build relationships for common benefit. It is part of our culture." 

Frequent social gatherings and cross-patronage of businesses ensures everyone gets to know each other very quickly. And arrivals from home never appear without a name or a contact number at hand. 

"China is a good country and Guangzhou a good city to do business in, so others want to join us. The environment is very comfortable and many people can now speak English, so it is easy to communicate," Nagaonkar says. 

The newly wed restauranteur said his wife will be coming to live with him next month. "We are in a good location, there is shopping, transportation, schools. Everything is here. I feel like this is my home." 

Of the many Indian companies setting up, most are in export or light manufacturing - garments, shoes, textiles and jewelry, while Indian importers trade in raw materials such as iron ore, says Bonwe Yeung, liaison officer of the local chapter of the Indian Chamber of Commerce. 

"Indian companies come to Guangzhou because there are many advantages - a strong economy and so many resources. Wages are low and the environment is good for them.


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## Bushroda

*Sensex poised to set more records* 
By Geetha Bhaskaran, Special to Gulf News
Published: July 14, 2007, 23:31 

Mumbai: It's party time for stocks and Indian markets are poised to press ahead to record peaks this week, the third in a row as foreign investors pour money into the fastest growing major economy after China. 

Inflows from foreign portfolio investors into Indian shares have topped $3.5 billion since late June, or nearly half the total $7.7 billion for 2007. 

The sudden spurt in investment has been the main driver for the stock market. 

The top-30 Sensex, which rose 2.1 per cent last week, has hit record highs in eight of the 10 trading days so far in July. 

"More gains are in store," said equity trader Ashwin Dalal. "The rally is entirely liquidity-driven, and I don't see cash flows slowing down." 

The strong rupee that has gained more than nine per cent this year has given foreign investors an added incentive to buy into Indian blue-chips. 

Historically, foreign equity strategists used to factor in currency depreciation losses when picking stocks in India. 

The rupee's rise has given an expected bonanza to investors.

"The Sensex has risen over 10 per cent this year," strategist V. Venugopal said. "For foreign investors, the returns are double in dollar terms because of the rupee's gains." 

However, the rupee's ascent has squeezed margins of export-driven companies like Infosys Technologies, which last week lowered its full-year earnings forecast in rupees. 

The software firm, which is also listed on the US Nasdaq, said its operating margin fell to 24.9 per cent in the quarter ended June from 27.8 per cent in the March quarter.

The focus this week will be on bigger rival Tata Consultancy Services, which reports quarterly earnings tomorrow, followed by Wipro on Thursday and Satyam Computer Services the day after. 

Although earnings are widely expected to show the rupee's effect, the outlook for the booming sector remains bullish with companies grabbing large outsourcing deals at a fast rate. 

Infosys added 35 new clients in the June quarter and over 3,700 staff. 

"The rupee's rise may have affected export competitiveness, but has had a salutary impact on inflation and over time lower inflation should compensate for nominal appreciation," a finance ministry official told reporters in New Delhi last week. 

The comment, widely published in the media, reinforced the view the government was comfortable with a stronger rupee, which hit a nine-year high of 40.28 per dollar in May. 

The central bank intervened aggressively last week to rein in the rupee when it neared that level, but analysts believe surging foreign inflows will push the rupee past 40. 

Inflation crept higher to 4.27 per cent at end-June, from 4.13 per cent a week earlier, data showed on Friday, but the Reserve Bank of India is unlikely to raise interest rates when it reviews policy on July 31. 

The central bank has raised rates five times since mid-2006, but held them at its last review in April. The higher rates have slowed loan growth and hit sales of motorcycles and trucks. 

Last week, the government said industrial production grew an annual 11.1 per cent in May, still robust but below a revised 12.4 per cent growth in April, as higher rates began to bite spending. 

Manufacturing, which makes up about 15 per cent of gross domestic product and nearly 80 per cent of industrial output, rose 11.9 per cent in May from a year earlier, compared with a downwardly revised 13.7 per cent in April.

Industrial output, which generates a fifth of econ-omic activity, has been driven by strong consumer demand for items such as cars and mobile phones. 

Other big results due this week include: Cement maker ACC Ltd, Larsen & Toubro and Ranbaxy Laboratories on Thursday and Ambuja Cements on Friday.


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## Bushroda

*Targeting the homing instinct* 
*With domestic buying slowing down, developers are increasingly focusing on NRIs and promising them world-class housing in India* 

VARUN SONI 
Posted online: Sunday, July 15, 2007 at 0000 hours IST 

Non-Resident Indian (NRI), Gurdeep Singh, who has been living in Canada for the last 11 years, recently bought a property in a fully integrated township being developed by a leading builder in Amritsar. Costing Rs 44 lakh, for Singh the primary reason for booking the property in his home state of Punjab was sentimental. The lure to come home is always there and with the realty boom that is sweeping India at the moment, it was only prudent that NRIs like us invest in property in the country, he says. 

While NRIs form 10-20% of the total number of buyers of any particular project (mostly residential) across India, in states like Punjab, Kerala and Gujarat, the percentage is as high as 30-40%. Coupled with Hyderabad, these states account for the maximum number of NRIs and many builders in these areas are focusing on developing townships specifically for people of Indian origin living abroad. As per estimates, around $600 million came from NRI investors into India last year, a figure that is likely to increase rapidly every year. 

Most of the NRIs are following a trend of returning to their homeland after retirement or sending their children to India for studies, with the result that they are always looking for a second home in India, preferably located in their hometown says Kamal Taneja, MD, TDI. Which is why developers are coming up with township projects targeting NRIs in the states of Punjab, Haryana and Kerala. With the IT boom, there are IT professionals who want to settle in a place which will offer them IT opportunities. So places like Bangalore, Hyderabad, Ahmedabad, Pune, Indore, etc. too are becoming popular with them. Such township projects can also come up in areas that are witnessing a real estate boom and major developers are coming up with their projects in cities like Agra, Sonepat, Panipat and Moradabad. 

But why are builders specifically targeting NRIs? Is it advantageous to build townships that are catering to NRIs needs and requirements? Says Rajit Kakar, MD, Silver City Group, Builders are specifically targeting NRIs mainly on account of two factorsmoney inflow from NRIs is much easier and payments are received on time. 

According to Suryavir Singh, official spokesperson, Sahara Infrastructure and Housing, some of the other reasons why builders are targeting NRIs are: 

* Many NRIs are getting professionally attached to India because of vibrancy in the economy and a chance to earn handsome returns. 

* The government is promoting NRI investors because it is a very good source to earn foreign exchange. 

* NRIs are emotionally routed to their motherland and their intense desire of owning a house back home drives them to invest in real estate. 

Agrees Jackbastian Nazareth, Executive Director, Sobha Developers Ltd, Most townships offer a lifestyle which is more in tune with the lifestyle the NRIs have been used to abroad and it is natural that they would prefer to have an extension of that kind of a lifestyle when they relocate to India. Further, they are not averse to investing in something which has a greater value eventually  even if it costs a bit more than the run of the mill apartments. 

Also, NRIs are allowed to make real estate investments in India without any cap on the quantity or the number of investments. Returns from real estate investments in India have consistently performed well and even out performed the other investment options and easy home loan availability from financial institutions in India, NRI remittances and repatriation procedures has emerged as the best of all the available prospects for NRIs looking forward to return to India. 

To an NRI, a base in the homeland also brings with it a sense of security. The number of NRIs who are investing in property for sentimental reasons and for better investment returns is quickly multiplying. What has also made NRIs flock to India has been the initiative by builders and real estate dealers to ensure transparency about the projects on offer and fairness in dealings. NRIs consider their investments to be safe and rewarding when they park their money in real estate, says Rohit Malhotra, CEO, Realtech Group. 

The specifications of these projects too are customised to cater to NRI needs. So, there are premium air-conditioned apartments with wooden flooring in the bedrooms, Italian marble, modular kitchens etc. Some of the other salient features include: 

* Redefining elegant and healthy living with 82% open exquisitely green landscaped spaces and water bodies, with meticulous architectural planning. 

* Modern construction with straight-line designing. Earthquake resistant RCC construction conforming to Zone-V seismic compliance. 

* Surface and basement parking. 

* Rain water harvesting. 

* Environment friendly with all conceivable facilities like a state-of-the-art club with a swimming pool, tennis courts, gymnasium, jogging tracks, golf putting green, convenience stores, amphitheatre, childrens play areas, indoor and outdoor games, banquet and community halls, party lawns and entertainment hub. 

* Other features that can find mention in townships targeting NRIs include club house, estate drive, party lawns, entry lake and fountain, meditation park, tennis court, table tennis room, card room, basketball court, badminton court, kids pool, steam room, hot water jacuzzi, steam and sauna. 

A package that is bound to floor the NRIs.


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## alamgir

India's "Running on Empty" 
Global Envision has an interesting new story on a particular challenge facing India in its path to progress: water, or more accurately, the lack of it. Aside from squabbles with China over water, it has to deal with a dilapidated infrastructure for delivering water and other challenges brought on by a longtime neglect of its water infrastructure:


New Delhi's water woes are typical of many parts of India. Most low- and middle-income neighborhoods in large metropolitan cities face similar shortages. But those worst hit by the shortage are the poor. The majority of slum areas in cities like Mumbai (Bombay) have no tap water; period. The water crisis, decades in the making, is getting worse just as India's economy is making impressive strides. A soaring population, rapid urbanization, and a thirsty farm belt are all putting enormous strains on India's anemic water infrastructure. The resulting water shortage could severely impact India's agricultural sector and thus hamper the country's ability to feed its billion-plus population and also cause internal and transborder conflicts. 
Measured by conventional indicators, water stress, which occurs when the demand for water exceeds the available amount during a certain period or when poor quality restricts its use, is increasing rapidly, especially in developing countries like India and China. According to the 2006 Human Development Report (New York: UNDP), approximately 700 million people in 43 countries live below the water-stress threshold of 1,700 cubic meters per person. By 2025, that figure will reach 3 billion, as water stress intensifies in China, India, and sub-Saharan Africa...

Uneven access to water, wastage, and widespread corruption in collecting water tariffs are compounding the waterscarcity problem, and no city exemplifies this better than New Delhi. According to a 2006 United Nations Development Program paper, New Delhi's water demand is estimated at 3,600 million liters of water per day (and rising); the highest of any city in the country. The local public-water utility, Delhi Jal Board, supplies approximately 3040 million liters per day, out of which only about 1,730 million liters reach consumers, because of massive distribution losses resulting, for example, from leaks from old pipes.

Access and use of water varies widely. The Delhi Development Report 2006 (Delhi government [New York: Oxford University Press]), published with the help of the UNDP, points out that almost 27 percent of homes in the city receive tap water for less than three hours a day, and 55 percent of households receive water for only three to six hours a day. In addition, almost 18 per cent of households receive less than 100 liters per capita daily (lpcd), while 31 percent of households get over 200 lpcd. Also, of the nearly 690,000 households living in slum areas, 16 percent receive less than 25 lpcd and another 71 percent receive between 25 and 50 lpcd. Not surprisingly, reliable access to tap water is a major sales pitch for the posh condominium and apartment buildings that are sprouting up in the suburbs of almost every big city. To guarantee 24-hour running water, contractors are digging wells deep underground. Not surprisingly, the water table in some parts of Delhi, for example, have dropped by as much as 30 meters, compared to levels in 1960, and is not getting adequately replenished. Experts fear that this supply will soon get exhausted. What happens after that is anyone's guess. 

India's water scarcity is made worse by high levels of pollution in water bodies in all major cities. According to We for Yamuna, an environmental group based in New Delhi, their city dumps 950 million gallons of sewage into the Yamuna river, which flows through the bustling metropolis. Out of this, only 5 percent is treated properly before it gets dumped into the Yamuna, which supplies 75 percent of Delhi's drinking water. Sewage disposals from New Delhi neighborhoods, industrial effluents, chemicals from farm runoffs, and arsenic and fluoride contamination have made the Yamuna water extremely poisonous for both consumption and irrigation, and experts agree that the river is clinically dead. Millions have been spent on "cleanup efforts," but no one knows where the money went... 


India faces a serious water crisis, which, if it remains unattended, has the potential to threaten India's economic growth and create domestic instability and tension among its neighbors. The lack of water in the agricultural states has the potential to accelerate the demographic problem by hastening the migration of farm workers to urban centers, thus putting enormous pressure on city infrastructure. India's ballooning population, coupled with rapid industrialization, means that meeting the rising water demands will become an increasingly difficult task unless urgent steps are taken right away. Everyone agrees that building extensive canals by itself won't solve India's water woes. The first step, experts suggest, should be a massive public education scheme to teach people, especially wealthy farmers, the need for water conservation and thus reduce the per capita water consumption. On the policy front, India will have to take urgent steps to improve the management of water utilities and reduce wastage. In addition, technological innovation through further advances in desalinization, water recycling, deeper drilling, and water transportation techniques has to be stepped up. But these steps must be accompanied by traditional water-conservation means such as constructing water percolators to refill aquifers, switching to crops that need less irrigation water, reforesting hillsides, and restoring topsoil to increase the absorption of rainfall. Together, these steps will go a long way to alleviate the situation. 

www.ipezone-blogspot.com/2007/07/indias-water-shortage.html=88k


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## alamgir

India on fire
Feb 1st 2007 | DELHI
From The Economist print edition

India's growth rate is close to China's; but signs of overheating suggest that this pace cannot be sustained
Corbis
THE economy is sizzling and foreign businessmen and investors are swarming to Bangalore and Mumbai to grab a piece of the action. India's year-on-year growth rate could well hit double figures at some point in 2007, and the country may even grow faster than China for at least one quarter. But things are so hot there is a big problem: India's current pace of expansion may not be sustainable. 

On the face of it, the figures are compelling. India's real GDP grew by 9.2% in the year to last September (the latest numbers available). Over the past four years it has clocked up an average annual pace of more than 8%, compared with around 6% in the 1980s and 1990sand a measly 3.5% during the three decades before 1980, when highly interventionist policies shackled the economy (see chart 1). India seems to be reaping the rewards of reforms that were made in the early 1990s. These massively lowered barriers to trade and liberalised capital markets. As a result, total trade in goods and services has leapt to 45% of GDP, from 17% in 1990.

Economic growth is likely to remain strong this year, driven by booming investment and consumption. The government's five-year plan to 2011-12 has an ambitious target of 9% average annual growth. Most Indian economists expect at least 8% over the next five years. Some, such as Surjit Bhalla, of Oxus Investments, think even 10% is feasible, thanks to a surge in investment. 

Optimism is abundant. Indian businessmen were the most upbeat among 32 countries surveyed recently by Grant Thornton, a London-based accounting firm: 97% of the respondents were bullish about the future. Indians are rightly proud of the huge global success of firms such as Infosys, or of Tata Steel's £5.8 billion ($11.3 billion) acquisition of Britain's Corus this week. They point to new mobile-phone subscriptions, which are running at a higher monthly rate than in China, as evidence of their economy's vigour and modernity. But look again. Perhaps the only thing really growing faster in India than China is hype.

Recent visitors to Delhi were greeted by a poster campaign by the Times of India announcing India poised. But poised for what? The economy is displaying alarming symptoms of overheating. This implies that demand is outpacing supply and hence the pace of growth is unsustainable. Despite lower oil prices, wholesale-price inflation has risen to 6%, which is above the 5.5% upper limit set by the Reserve Bank of India (RBI). India does not have a single rate of consumer-price inflation, but the crude average of the rates for industrial, non-manual and agricultural workers is above 7%. Capacity utilisation is higher than at any time in the past decade and severe skill shortages have caused wages to rocket. 

The RBI is also concerned about a credit boom. Bank lending to firms and households has expanded by 30% over the past year. Lending on commercial property is up by 84% and home mortgages by 32%. Asset prices look bubbly. After rising more than fourfold over the past four years, India's stockmarket is one of the emerging world's most expensive, with a price-earnings ratio of more than 20. House prices in many big cities have more than doubled over the past two years.

Against this sweltering background, the RBI's interest-rate decision on January 31st looked timid. It raised its overnight lending rate by a quarter-point to 7.5%, but left the reverse repo rate (which it uses to drain excess liquidity from the banking system) unchanged at 6%. Over the past couple of years interest rates have risen by less than the rate of inflation, so they have fallen in real terms.

The inflation numbers probably understate the degree of overheating. When demand outpaces supply in an open economy it is more likely to show up in a current-account deficit than in inflation. India's deficit widened to more than 3% of GDP in the three months to Septembera huge swing from a surplus of almost 4% in the first half of 2004. And the true gap between domestic demand and supply is even bigger. Yaga Venugopal Reddy, the RBI'S governor, recently drew attention to how India's current-account deficit is larger once you exclude the money sent home by Indians abroad. These remittances do not reflect domestic demand or supply, but are more like a capital inflow. Excluding workers' remittances, India's deficit is running close to 5% of GDP (see chart 2)larger than the equivalent deficit during India's balance-of-payments crisis in the early 1990s.

Keeping up with demand
The risk of a financial crisis is slight, because India has the cushion of $180 billion of foreign-exchange reserves, which is equivalent to 11 months' imports, and its external debt is small. But this misses the point. The reason for concern about India's widening current-account deficit is not that it heralds a financial crisis, but that it is a signal of how supply cannot keep pace with red-hot demand. 

Furthermore, unlike China and most other Asian emerging economies, India is heavily dependent on short-term portfolio capital inflows, rather than foreign direct investment, which is longer-term. Short-term capital has accounted for four-fifths of capital inflows into India over the past three-and-a-half yearsalthough, encouragingly, foreign direct investment did pick up strongly last year. This means India is vulnerable to rising interest rates if there is a sharp reversal in the appetite for risk in global financial markets. 

How fast can India grow? Most standard methods of estimating the trendor potentialrate of growth (the maximum at which an economy can expand without triggering a rise in inflation) arrive at figures of around 7%. But business people, investors and an unusually large number of economists, are convinced that India is undergoing a paradigm shift and so backward-looking historical data are now irrelevant for assessing future growth. 

India's capacity for growth has certainly increased over the past decade, thanks to earlier reforms. Yet given widespread signs that India is already exceeding its speed limit, there is a high risk that if the economy continues to grow at 9% or more, it will get ever hotter. Inflation will climb higher and financial imbalances will widen, running the risk of a hard landing. India has no genuinely independent central bank to put on the brakes. And policymakers are understandably reluctant to cool demand when India needs rapid growth to create jobs and reduce poverty. 

An alternative to slowing demand is to boost supply by speeding up reforms and attacking the many bottlenecks caused by inadequate infrastructure, dreadful public services, skill shortages and rigid labour laws. But improving infrastructure and education not only takes time, it also requires money, and India's fiscal finances are far from healthy. 

On the surface, the government has made great strides to cut its budget deficit. The IMF forecasts the deficit for central and state governments will fall to 6.2% of GDP in the fiscal year ending in March, slightly below budget and down from a peak of 10% in 2001-02. Some of the reduction is due to greater fiscal prudence and reduced tax evasion, but it also reflects a cyclical upswing in tax revenue on the back of the economic boom and low interest rates, thanks to the global liquidity glut. If interest rates rose because foreign investors lost their appetite for risk, or if the economy slowed, the budget deficit would widen. 

It already looms dangerously large. Chetan Ahya, Morgan Stanley's economist in Mumbai, calculates that off-budget items, such as oil and power subsidies, amount to another 1.8% of GDP. This puts the total deficit closer to 8% of GDP, the biggest among the main emerging economies. India also has the highest ratio of public debt to GDP, at 80% (see chart 3).

The budget deficit could swell further over the next few years. Generous tax exemptions for exporters in special economic zones may erode future revenues. And the government's Sixth Pay Commission, due to report by April 2008, is likely to lead to a big rise in public-sector pay. Its predecessor's report marked the start of a sharp downturn in public finances; and the new recommendations will be implemented in 2009, an election year.

Again, the concern is not that India's public borrowing causes a financial crisis. Most of it is funded through domestic, not foreign, debt and controls on capital outflows ensure that domestic savers buy government bonds. The real problem is that India's weak fiscal position constrains its future growth by leaving no room for more public spending on infrastructure, education and health. 

Leaving the farm
The growth optimists point to India's favourable demography. The population of working age will continue to rise for several decades, whereas in China it is expected to fall. This, it is argued, will boost India's workforce and both saving and investment. Furthermore, 60% of India's labour force is engaged in low productivity farming. As workers shift from agriculture to more productive jobs in industry and services, this will automatically boost GDP growth. Yet this assumes the newcomers will all find jobs. If those jobs do not appear, the so-called demographic dividend will more likely turn into a demographic disaster. Some 60% of the demographic bulge will come in five poor and badly governed states.

This is just one example of how economic commentators tend to confuse India's long-term potential (what is feasible provided the best policies are put in place) with its current potential (ie, non inflationary) growth rate. That India has huge long-term potential is undeniable, but without reforms the country cannot fully exploit it. 

All agree that the biggest obstacle to growth of 9% or more is India's infrastructureespecially its lousy roads, ports and power. According to the World Bank, the average manufacturing firm loses 8% of sales each year from power cuts. India spends 4% of its GDP on infrastructure investment, compared with China's 9%. In absolute dollar terms, China spends seven times as much on its infrastructure. 

India's government has ambitious plans to increase total infrastructure spending to 8% of GDP over the next five years. This will involve some increase in government spending, but the idea is for the bulk of it to be financed by public-private partnerships. That will be hard.

Private investors, especially foreign ones, still shy away from sectors like electricity and roads because they are uncertain of earning a reasonable return. Only about half of all electricity generated is paid for, because power is stolen and bills are left unpaid. Saumitra Chaudhuri, the economic adviser at ICRA, a credit-rating agency, argues that public-private partnerships first require regulatory reforms to protect the interests of both investors and consumers. As the World Bank put it in a report last year, when systems are failing, it is not enough to fix the pipes, one needs to fix the institutions that fix the pipes.

Another obstacle to growth in manufacturing is India's labour laws, which are among the most restrictive in the world. Firms employing more than 100 people cannot fire workers without government permission, which discourages expansion. Today's central government cannot scrap these laws because it relies on the support of the communist parties. In theory, the state governments can apply the laws more flexibly, especially in the special economic zones, but this is unlikely to lead to more flexible labour markets overnight. 

A third big problem is the dreadful quality of public services, from education and health to the provision of water. Half of urban households lack drinking water within the home; one quarter have no access to a toilet, either public or private. Many public services in cities have worsened in recent years. In Bangalore water is now available for less than three hours a day, compared with 20 hours in the early 1980s. This may be another reason why workers are not moving in from rural areas as rapidly as in China.

Nor are young Indians equipped for more productive jobs in the towns. The quality of education and health care is dire. A survey in 2003 found that only half of paid teachers were actually teaching during school hours. Another survey found that government health centres in poor parts of Delhi had a more than 50% chance of prescribing a harmful therapy for common ailments. 

Bizarrely, India has one of the most privatised health systems in the world. Government spending accounts for only 21% of total health spending. Likewise, in eight of 18 states studied more than half of all children in urban areas are in private schools. But this is not a model for free-market economics or the result of policy reform. People go private only because public services are so bad. Subir Gokarn, an economist at CRISIL, another credit-rating agency, worries that because the educated middle class do not use public services, there is less public outcry for reform than there should be.

Sadly, the prospects for dramatic change in the near future look slim. With a few exceptions, such as the partial opening of retailing to foreign investment and the privatisation of the two biggest airports, reforms have stalled since the government took office in 2004. Despite the reformist instincts of Manmohan Singh, the prime minister, the need to maintain the coalition overwhelms the appeal of reform.

Back to school
The supply-side constraints of infrastructure, labour laws and public services seem formidable, yet the vast majority of local economists in Delhi reckon that annual growth of at least 8% is sustainable even without further reform (with reform they look forward to 9% or more). A popular argument is that other Asian economies grew by 8-9% for long periods, so why not India? But East Asian economies invested much more in education and infrastructure than India does today. 

A recent study from Goldman Sachs, which forecast that India could sustain 8% growth until 2020, was widely trumpeted in Indian newspapers. However, the bank's report clearly stated that this would require better education, labour market reforms and less red tape. Oddly, most newspapers failed to mention that.

Indeed, it is possible to detect a belief among some that it is now India's right to match China's growth rate of 10%. Even the finance minister, Palaniappan Chidambaram, has felt the need to remind people that present rates of growth are not because some kind god smiled at us. No country deserves rapid growth, unless it puts in place the right policies. The biggest danger of today's rampant economic optimism is that it could breed complacency about the need for reforms. That would be a sure recipe for a future slowdown.

India needs faster growth to create more jobs for its expanding population and to make it easier to relieve poverty. The awkward truth is that although the economy is sprinting ahead, most people are only crawling. Although the educated middle class has enjoyed big salary increases and a surge in the value of their homes and shares, the 60% of the population close to or below the poverty line have not yet seen a material gain.

Measured by the commonly used gini coefficient, India has less income inequality than China or America. But it has much more poverty. Some 260m people still live on the equivalent of less than $1 a day. Half of all children under five are malnourished. India needs rapid growth. But by itself that is not sufficient to end poverty, warns Rajiv Kumar, the director of ICRIER, an economic research institute. Better infrastructure and education are needed to make the rural poor more mobile so they have an escape route. In this way, better infrastructure and improved public services can not only increase growth, but also spread the rewards. 

To boost sustainable growth, India needs to clear the path ahead rather than risk running an economy beyond its safe maximum speed. Indians are understandably eager for their economy to sprint like a tiger rather than amble along like an elephant. Yet few animals have an elephant's stamina or can travel as far in a dayprovided its way is not blocked.

www.economist.com


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## alamgir

'Untouchables' left behind in booming nationBy Emily Wax, Washington Post | July 5, 2007

DALLIPUR, India -- The hip young Indians working inside this country's multinational call centers have one thing in common: Almost all hail from India's upper and middle castes, elites in this highly stratified society.

India may be booming, but not for those who occupy the lowest rung of society. The Dalits, once known as untouchables, continue to live in grinding poverty and suffer discrimination in education, jobs, and healthcare. For them, status and often occupation are still predetermined in the womb.

While some Indians had hoped urbanization and growth would crumble ideas about caste, observers say tradition and prejudice have ultimately prevailed.

"There's talk of a modern India. But the truth is India can't truly move ahead with caste in place," said Chandra Bhan Prasad, a Dalit writer and specialist on India's caste system. "In all ways, it's worse than the Jim Crow laws were in the American South because it's completely sanctioned by religion. Despite so many reforms, the idea of untouchability is still very much a part of Indian life."

As India's economy surges, one of the country's most serious and stubborn challenges is how to combat entrenched caste prejudice. Dalits, along with other "backward" castes, make up the majority of India's 1.1 billion people, and social scientists worry that these groups are being left behind.

The contrast between the gleaming call centers of rising India and the abject poverty that is the reality for many Dalits is all too obvious in Dallipur, an impoverished village on the outskirts of Varanasi in Uttar Pradesh state.

Without electricity, paved roads or running water, the hamlet is home to landless Mushars, the lowest social stratum of Dalits, who work as shoe shiners, trash pickers, toilet cleaners, and street sweepers.

Amid the straw and mud villages, two children died of starvation last year -- not for lack of food in the area, but as a result of prejudice.

Chandrika, a 24-year-old Dalit mother, recalled carrying her crying 2-year-old son and her weak 20-month-old daughter to a nearby health center. There, she pleaded for a card that would allow her malnourished children to receive free milk.

But before the nurses could examine her children, she was mocked and shooed away by doctors, who told the young mother to go beg in the market.

"They said again and again, 'We don't want to see you Dalits here bothering us,' " said Chandrika, a thin, dark-skinned woman who wept as she recounted how her children died. "My milk had dried up from stress. There was no work for me. There was no one to hear my plight."

Local government leaders who came to investigate her children's deaths insisted that the shy mother and her fellow villagers build a raised concrete stage -- Dalits could be addressed by upper castes only from a higher platform, Chandrika and other villagers were told. The 3-foot-tall dais remains in Dallipur today, the only outcome of the investigation.

By virtue of birth, some castes inherit wealth; the Dalits inherit debt.

Caste often determines Indians' spouses, friends, residence and, most important, occupation -- part of a Hindu belief that people inherit their stations in life based on the sins and good deeds of past lives.

Some Indians believe that the spread of capitalism in urban areas has in some ways dissolved caste by creating new occupations and eliminating obsolete ones. For instance, with the growing use of flush toilets in Indian cities, the disposal of human waste, once a job for Dalits, is now done with a simple pull of a lever.

In booming evening bazaars in Mumbai and New Delhi, lower castes sell cellphones, leather tennis shoes, and grooming kits from small shops and curbside pushcarts alongside higher castes, with everyone "in a capitalist rush to make money," said Prasad, the writer. "A lower-caste businessman may even enjoy an evening cigarette with a higher caste, completely taboo even 50 years ago."

Prime Minister Manmohan Singh recently compared India's caste system to apartheid in South Africa, calling it not just prejudice but "a blot on humanity."

Critics say that such statements are simply meant to garner votes from lower castes and that any gains made by Dalits have been marginal.

"India is not a true democracy," said Anup Srivastava, a researcher with the People's Vigilance Commission on Human Rights in Varanasi who is investigating complaints filed by Dalits about discrimination among neighbors, in schools, at hospitals and at work. "The country is independent. But the people aren't. How can there be a democracy when there are still people known as untouchables who face daily discrimination?"

www.boston.com


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## alamgir

How will India cope with skill shortages?
Here are some recent figures released by Ficci on the terrible shortage of people that India will face in the coming five years  some hard numbers:

Biotechnology sector: 80 percent shortfall of doctorate and post doctorate scientists.

Food processing sector: 65 per cent shortfall of refrigeration mechanics, electricians etc. 70 percent shortfall of food safety personnel.

Health sector: Shortage of 5 lakh ( half a million) doctors  in particular anaesthetists, radiologists, gynaecologists and surgeons (particularly neurosurgeons). Also, a shortage of 10 lakh (1 million) nurses.

IT sector : Shortage of 5 lakhs (half a million) engineers.

Education sector: Faculty shortage of 25-40 percent.

Banking and Finance sector: 50-80 percent personnel shortage.

Aviation sector: Severe shortage of pilots.

Textile sector: Will create 10 lakhs (1 million) jobs in the next few years due to rapid expansion.

Pharma sector: Severe shortage of top pharma scientists as research expenditure by pharma companies has quadrupled in the last 5 years. Thus there is a shortage of middle-level and junior scientists too. This has made salaries of top pharma scientists rise to US levels.

Semi-skilled and skilled labour: The shortage of factory workers and construction labourers is already being felt across industries.

Action Plan of the government:
This is what the government has done/planned, and explained by the PM in a recent speech:

As per recommendations of the Knowledge Commission, by 2015, India should attain a gross enrollment ratio (in higher educational instituions) of at least 15 percent if we are to be in line with most modern societies. Such a quantum jump in our university system has to be well planned and well funded our Government has started new national institutions in the fields of science, technology and medicine. In the last 100 years, we have had only one Indian Institute of Science. In past two years, we have sanctioned six more. We have opened new national institutes in medical sciences, engineering and managementwe intend to establish 30 new Central Universities across the country. The work on the modalities for setting these up has begun and the Ministry of Human resource Development, the UGC and the Planning Commission are working to operationalize this in the next 2-3 months. This expansion is going to be a landmark in expanding access to high quality education across the country.

Hope for the hundreds of eager youngsters in schools today. They will (hopefully) not suffer the same fate as present generations who have had far fewer opportunities to get into good quality educational institutions.

Its quality that people are concerned about. Why, last Saturday a girl killed herself, not because she didnt get admission into college, but because she didnt get admission into a college of her choice. And this poor girl wasnt even trying for a professional seat in an engineering or medical college, she was trying for a seat in the 11th grade!!

Just take the example of our medical education. Its in shambles. Hundreds of hopefuls cannot get a medical education in India because of the ridiculously high level of competition. There are just too few seats in the reputed government colleges (their fees are affordable.) And as for private colleges, they are beyond the reach of the middle classes and its not just because of their tuition fees. Lakhs of rupees are taken as donations and so unless you are academically brilliant or rich, you can forget about being a doctor.

And as for our primary education, the less said the better. Its in terrible shape (government schools) and I know intelligent children who live in the slums who have little hope of even grabbing jobs of sales people or even telephone operaters because of the poor education they are being imparted today. These millions of children are destined to languish in the slums even when they are adultsits just sad! 


Why are the Indians living abroad not coming back in droves?
I think of this frequently, perhaps because some cousins who I felt close to have gone forever and so have several of my very good friends.

Now that our economy has improved, why cant people like them, people who are educated, try to come back? Educated people in India can get good jobs and a decent standard of living, though not as high as they might get abroad. Some feel the trend is reversingbut I think its more because the western countries are becoming more stringent about immigration, green cards, citizenship etc. Those Indians who do return voluntarily either do it because they want their children to grow up here or because of the responsibility of old parents.

The truth is that few people feel they can adjust to a life in India after living for years abroad. Its more than just about physical comforts and money. It could be a more professional environment at work, or it could be just being able to get things done more quickly and professionally over there. Whether its getting a licence or a cinema ticket!

And from what I hear from some of my younger cousins who have migrated, they are happier there because there are no relatives to interfere in their life, be it in-laws, parents or aunts and uncles. You can lead a completely independent life out there, which is in stark contrast to life here. I dont know how important a factor this is for people who make the final decision to live in a foreign country, but I would really like to know.

Ofcourse, every individual has a right to carve a better life for themselvesbut the reality is that India needs these people to come back. With their international exposure, their contribution will be invaluable to India. Dont those who live abroad want to be part of Indias growth, even if they have to pay a price for it?

Update: I wrote this post early morning and therefore missed the news item that appeared today in DNA. It says that a faculty shortage is hampering the growth of IIM and this dearth of teaching staff is impeding the institutes entry into the top B-schools of the world. Apparently there are government restrictions on salaries and therefore the schools find it a struggle to attract the best talent. Again its not quantity, but the quality which matters to the IIMs and they are simply not getting enough of the best.

(Statistics from Hindustantimes.com and Mumbaimirror.com)

www.nitawriter.wordpress.com


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## alamgir

Ugly face of the knowledge economy 
With the basic issues of quality, equity and access to higher education in India still unresolved, the country is ill prepared to generate knowledge creators or workers of the highest quality. If the current trends are any indication, reliance on the market forces is further aggrevating the crisis, writes N Raghuram. 

Combat Law, Vol. 5, Issue 1 - Higher education in India is gasping for breath, at a time when India is aiming to be an important player in the emerging knowledge economy. With about 300 universities and deemed universities, over 15,000 colleges and hundreds of national and regional research institutes, Indian higher education and research sector is the third largest in the world, in terms of the number of students it caters to. However, not a single Indian university finds even a mention in a recent international ranking of the top 200 universities of the world, except an IIT ranked at 41, whereas there were three universities each from China, Hong Kong and South Korea and one from Taiwan. 

On the other hand, it is also true that there is no company or institute in the world that has not benefited by graduates, post-graduates or Ph.D.s from India: be it NASA, IBM, Microsoft, Intel, Bell, Sun, Harvard, MIT, Caltech, Cambridge or Oxford, and not all those students are products of our IITs, IIMs IISc/TIFR or central universities, which cater to barely one per cent of the Indian student population. This is not to suggest that we should pat our backs for the achievements of our students abroad, but to point out that Indian higher educational institutions have not been able to achieve the same status for themselves as their students seem to achieve elsewhere with their education from here. 

While many reasons can be cited for this situation, they all boil down to decades of feudally managed, colonially modelled institutions run with inadequate funding and excessive political interference. Only about 10 per cent of the total student population enters higher education in India, as compared to over 15 per cent in China and 50 per cent in the major industrialised countries. Higher education is largely funded by the state and central governments so far, but the situation is changing fast. Barring a few newly established private universities, the government funds most of the universities, whereas at the college level, the balance is increasingly being reversed. 

The privatisation experience 

The experience over the last few decades has clearly shown that unlike school education, privatisation has not led to any major improvements in the standards of higher education and professional education. Yet, in the run up to the economic reforms in 1991, the IMF, world bank and the countries that control them have been crying hoarse over the alleged pampering of higher education in India at the cost of school education. The fact of the matter was that school education was already privatised to the extent that government schools became an option only to those who cannot afford private schools mushrooming in every street corner, even in small towns and villages. On the other hand, in higher education and professional courses, relatively better quality teaching and infrastructure has been available only in government colleges and universities, while private institutions of higher education in India capitalised on fashionable courses with minimum infrastructure. 

Nevertheless, successive governments over the last two decades have only pursued a path of privatisation and deregulation of higher education, regardless of which political party ran the government. From the Punnaiah committee on reforms in higher education set up by the Narasimha Rao government to the Birla-Ambani committee set up by the Vajpayee government, the only difference is in their degree of alignment to the market forces and not in the fundamentals of their recommendations. 

With the result, the last decade has witnessed many sweeping changes in higher and professional education: For example, thousands of private colleges and institutes offering IT courses appeared all across the country by the late 1990s and disappeared in less than a decade, with devastating consequences for the students and teachers who depended on them for their careers. This situation is now repeating itself in management, biotechnology, bioinformatics and other emerging areas. No one asked any questions about opening or closing such institutions, or bothered about whether there were qualified teachers at all, much less worry about teacher-student ratio, floor area ratio, class rooms, labs, libraries etc. All these regulations that existed at one time (though not always enforced strictly as long as there were bribes to collect) have now been deregulated or softened under the self-financing scheme of higher and professional education adopted by the UGC in the 9th five-year plan and enthusiastically followed by the central and state governments. 

In the run up to the economic reforms in 1991, the IMF, world bank and the countries that control them have been crying hoarse over the alleged pampering of higher education in India at the cost of school education. The fact of the matter was that school education was already privatised to the extent that government schools became an option only to those who cannot afford private schools mushrooming in every street corner. 

This situation reached its extreme recently in the new state of Chattisgarh, where over 150 private universities and colleges came up within a couple of years, till the scam got exposed by a public interest litigation and the courts ordered the state government in 2004 to derecognise and close most of these universities or merge them with the remaining recognized ones. A whole generation of students and teachers are suffering irreparable damage to their careers due to these trends, for no fault of theirs. Even government-funded colleges and universities in most states started many "self-financing" courses in IT, biotechnology etc., without qualified teachers, labs or infrastructure and charging huge fees from the students and are liberally giving them marks and degrees to hide their inadequacies. 

It is not that the other well established departments and courses in government funded colleges and universities are doing any better. Decades of government neglect, poor funding, frequent ban on faculty recruitments and promotions, reduction in library budgets, lack of investments in modernization leading to obsolescence of equipment and infrastructure, and the tendency to start new universities on political grounds without consolidating the existing ones today threatens the entire higher education system. 

Another corollary of this trend is that an educational institution recognized in a particular state need not limit its operations to that state. This meant that universities approved by the governments of Chattisgarh or Himachal Pradesh can set up campuses in Delhi or NOIDA, where they are more likely to get students from well off families who can afford their astronomical fees. What is more, they are not even accountable to the local governments, since their recognition comes from a far away state. Add to this a new culture of well-branded private educational institutions allowing franchisees at far away locations to run their courses, without being responsible to the students or teachers in any other way. This is increasingly becoming a trend with foreign universities, especially among those who do not want to set up their own shop here, but would like to benefit from the degree-purchasing power of the growing upwardly mobile economic class of India. Soon we might see private educational institutions getting themselves listed in the stock market and soliciting investments in the education business on the slogan that its demand will never see the sunset. 

The economics of imparting higher education are such that, barring a few courses in arts and humanities, imparting quality education in science, technology, engineering, medicine etc. requires huge investments in infrastructure, all of which cannot be recovered through student fees, without making higher education inaccessible to a large section of students. Unlike many better-known private educational institutions in Western countries that operate in the charity mode with tuition waivers and fellowships (which is one reason why our students go there), most private colleges and universities in India are pursuing a profit motive. This is the basic reason for charging huge tuition fees, apart from forced donations, capitation fees and other charges. Despite huge public discontent, media interventions and many court cases, the governments have not been able to regulate the fee structure and donations in these institutions. Even the courts have only played with the terms such as payment seats, management quotas etc., without addressing the basic issue of fee structure. 

It is not only students but also teachers who are at the receiving end of the ongoing transformation in higher education. The nation today witnesses the declining popularity of teaching as a profession, not only among the students that we produce, but also among parents, scientists, society and the government. The teaching profession today attracts only those who have missed all other "better" opportunities in life, and is increasingly mired in bureaucratic controls and anti-education concepts such as "hours" of teaching "load", "paid-by-the-hour", "contractual" teachers etc. With privatisation reducing education to a commodity, teachers are reduced to tutors and teaching is reduced to coaching. The consumerist boom and the growing salary differentials between teachers and other professionals and the value systems of the emerging free market economy have made teaching one of the least attractive professions that demands more work for less pay. Yet, the society expects teachers not only to be inspired but also to do an inspiring job! 

Deemed universities - a national debate needed 

Yet another worrisome trend in higher education and research is the emerging government policy of according deemed university status to national labs and research institutes, so that these institutes can award their own Ph.D. degrees, without having to affiliate themselves to a university or fulfilling any other role of being a university. National laboratories include those under the Union government's Council of Scientific and Industrial Research (CSIR), Indian Council of Medical Research (ICMR), Department of Atomic Energy (DAE), Defence Research and Development Organisation (DRDO), Department of Space (DOS) etc. Some DAE institutions have already obtained deemed university status, and the UGC has already recommended the case of CSIR for the commission's approval. It is not clear whether all the national laboratories are under consideration for this status, but it is most likely that all of them would eventually like to seek such a status. 

The national laboratories were specifically established with the aim of making more direct contributions to the technological needs of the country in chosen areas such as medicine, agriculture, petroleum, metallurgy, energy, defence, space etc. It was expected that these national (or regional) laboratories would employ selected scientific manpower generated from the colleges/universities and nurture their talents towards specific applied goals. But this did not happen, as the national labs became more sophisticated versions of university departments drawing better monetary and infrastructural support and publishing research papers, for which they need research students, who cannot be retained and tapped unless they are promised research degrees. The present demand for seeking deemed university status could therefore be an exercise to legitimise the current situation of the national labs, and redefine their original goals. 

However, the country needs to decide whether it wants to develop glorified technicians and sycophants or make versatile scientists and conscious citizens. Barring a few exceptions, the monolithic hierarchy of national labs does not provide enough opportunity to young researchers to relate their research to broader social and national values. The more open intellectual environment of universities, which include natural and social sciences, is essential for interdisciplinary learning, personality development, national values and better citizenship. Thus, the issue of deemed universities calls for an open national debate, as it has major implications for our higher education and research in science and technology. 

With the basic issues of equity and access to higher education still unresolved, the country is ill prepared to generate knowledge creators or knowledge workers of high quality to tap the opportunities of the emerging knowledge economy. There was a time when the country debated passionately about external brain drain of students going abroad and not returning, and internal brain drain of students taking up careers in areas quite different from their academic backgrounds, and what a waste of national resource this was. This situation has only worsened, with unemployment and underemployment in the era of liberalisation and globalisation, but we don't seem to even talk about it anymore. 

Reforms may mean different things to different people, but for those students and teachers who are at the receiving end of their governments, reforms have come to mean withdrawal of government funding, no matter what happens. For those who believed that reforms in higher education would reduce bureaucratic controls, attract better talent, provide more operational freedom, improve transparency, increase accountability, remove corruption, encourage self-financing, reward productivity and punish laxity, to say that they are disappointed at the state of affairs in our country is an understatement. 


N Raghuram 
Combat Law, Volume 5, Issue 1 
(published 15 March 2006 in India Together) 

The author is Reader, School of Biotechnology, GGS Indraprastha University, Delhi. 

www.indiatogather.com


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## Bushroda

*GDP expected to grow at 9.2 % in 07/08: CII* 

New Delhi, July 15: Indian economy is expected to show a marginal decline in GDP growth to 9.2 percent in the current fiscal from 9.4 percent in 2006-07 with services sector and industry maintaining the momentum, CII has said. 

According to the chamber, the agriculture sector would show a moderate three per cent growth, against 2.7 percent in 2006-07. 

Industry and services sector are expected to grow at 9.4 percent and 11.2 percent respectively during 2007-08. 

"On the whole, CII expects the GDP growth to be 9.2 percent during 2007-08, with agriculture growing at 3 percent, industry at 9.4 percent and services at 11.2 percent," the chamber said in its 'state of the economy' report. 

The Indian economy had registered a 9.4 percent GDP growth in 2006-07, highest in the last 18 years, due to a stellar performance by manufacturing and services sectors. 

In its quarterly analysis of economy for the Jan-March period, the chamber said in spite of appreciating rupee impacting exports, country's GDP grew at 9.1 percent primarily led by 19.35 percent growth in corporate earnings. 

It said appreciating rupee had a negative impact on profits of textile and leather sectors during the fourth quarter with profit margin expected to erode further to 10.4 per cent during the next six months. 

Service sector companies registered a 45.68 percent growth in profits compared to 10.32 percent growth in the corresponding quarter last fiscal. Manufacturing sector, however, reported a slowdown in profits during the quarter to 7.91 percent from 15.17 percent in Q4 2005-06. 

The chamber, however, cautioned that the continuous decline in oilseed production could act as a hurdle to agricultural growth in the country. 

Oilseeds production has declined by 14.79 percent in the quarter under review which is expected to further increase the demand-supply gap for edible oils. 

CII pointed out on the need to restructure domestic pricing policy of various crops as farmers are switching from oilseeds crops to more lucrative alternatives like wheat and gram.


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## Bushroda

*Crop prodn to rise by 2.6 %, food grains 0.9 % in FY 08: CMIE* 

Mumbai, July 15: Despite the initial slowdown in sowing due to lower than expected rainfall in June 2007, crop production is likely to rise by 2.6 percent in FY 08 as against the meagre 0.9 percent increase this fiscal. 

However, food grain production is projected to grow by a marginal 0.9 percent to 214-million tonnes in FY 08 as compared with 211.8-million tonnes in FY 07, the Centre for Monitoring of Indian Economy (CMIE) said in its monthly review of the Indian economy here. 

The higher growth in crop production largely reflects the recovery in oilseeds production during the year. Its production is projected at 26.9-million tonnes in FY 08, up by 16 percent as against the 23.3-million tonnes produced in FY 07, the report said. 

Food grains production may show a little improvement due to a marginal increase in rice and wheat production. In FY 08, rice production is projected to see a marginal 0.2 percent increase over last year's 91-million tonnes while wheat production is projected to go up to 74.2-million tonnes in FY 07. 

Meanwhile, sowing for the Kharif season has begun successfully in several states. Till June 2007, the area under food grains, oil seeds, cotton and sugarcane added up to 127.6- lakh hectares. 

This level of acreage was lower by nine percent as compared to the 140.5-lakh hectares sown during the same month a year ago. The slow pace of sowing attributed to the poor progress of monsoon in the early weeks of June. 

In the first and second week of June, rainfall was lower than the long period average by 39 percent and 12 percent respectively. In the subsequent week, the monsoon has made rapid progress. 

By July 4, it covered the entire country and to date, total rainfall was 20 percent above LPA and 27 percent higher than the rainfall in the same period of FY 06. Thus, the pace of sowing was expected to accelerate in July, it said. 

Till June 2007, except cotton, acreage of all the crops was lower than the year-ago level. Cereal was sown over 55.3 lakh hectares as of June 28 as against 63.8 lakh hectares sown a year ago. Area sown of all cereal crops was down. 

Rice, the major Kharif crop, was sown over an area of 31.6 lakh hectares as on June 28, as compared to 34.3 lakh hectares covered a year ago. However, as the intensity of flood subsides in states, the progress of sowing is expected to see a rapid improvement, CMIE said. 

Oilseeds sowing was also down till June 27 as compared to a year-ago level. Groundnuts and soya bean are the major oilseed Kharif crops. Sowing of these crops was poor. Groundnut covered 6-lakh hectares as of June 29 as compared to 8.2-lakh hectares during the same period last year. 

Groundnut sowing lagged behind in Gujarat on account of poor rain in the early weeks of monsoon followed by heavy rains which caused floods. Till June, area sown under groundnuts in Gujarat was significantly lower at 1.91 lakh hectares as against 4.38 lakh hectares covered a year ago.


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## Bushroda

*India Inc goes Dutch!*
14 Jul, 2007, 1638 hrs IST,
Gaurie Mishra, TNN

NEW DELHI: India Inc. has found a new hunting ground to satiate its ever-increasing hunger for cross-border acquisition and this time its Holland. ABN Amro M&A executives say as many as three deals each worth $500 million are being negotiated by Indian companies. 

We are in discussions with many of our Indian clients regarding non-domestic M&A opportunities, including those in the Dutch market. Currently, there are at least 2-3 Dutch opportunities that are being investigated by some of our Indian clients. Deals that are being targeted would likely be in excess of $500 million, said ABN Amros M&A advisory executive director Remco Van Der Pol. 

Consumer products, IT, pharmaceuticals and manufacturing are the sectors where Indian companies are evaluating the deals. Though a time frame has not been fixed, experts say, the deals could be struck in the next 8-10 months. Dutch companies too are looking at entering India. 

But while Indian companies are planning to use M&As as entry vehicles, Dutch companies are looking at the joint venture route for entering the country for the simple reason that not many domestic companies are on sale. 

With the current boom in the Indian economy and prospects for even higher growth, not many Indian companies are up for sale. Dutch companies tend to be quite open to any kind of cooperation with Indian companies as long as it adds value to their business. Joint ventures could occur in retailing, real estate and seeds, added Mr Pol. 

Though Europe is where a lot of Indian companies are striking deals, Holland is a new territory. Recently, there have been large cross-border deals where Indian companies have snapped up their European counterparts. Tata Steel bought Anglo Dutch company for $12 billion. 

Suzlon acquired German company RE Power for $1.6 billion. Incidentally, ABN Amro was one of the co-advisors in the Suzlon-RE Power transaction. The total value of cross border M&A transactions that Indian companies has also risen sharply in the last two years. 

In the first half of 2007, M&A deals worth $45 billion have been struck, of which 90% are crossborder transactions. In 2006, value of M&A deals was $40 billion, with cross border accounting for 80% of the total value. In 2005, value of M&A deals was worth $26 billion, with 50% being cross-border transactions.


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## Bushroda

*Tatas eyeing USD 50 bn turnover by FY08*
15 Jul 2007, 2000 hrs IST,PTI

MUMBAI: Tata Group expects to more than double its turnover to USD 50 billion this fiscal with the acquisition of Anglo-Dutch steel firm Corus. 

"We should touch the USD 50 billion turnover mark in FY08. With a 30 per cent growth this year, our USD 22 billion turnover in FY07 will become USD 28 billion in FY08. Corus would bring in an additional turnover of USD 22-23 billion," a top Tata official said on Sunday. 

All these together "we should well cross the USD 50 billion turnover mark by FY08," the official said. 

The Ratan Tata-led corporate major is also betting big on its inter national businesses, which are expected to contribute 50 per cent of the total turnover in 2008, he said. 

In 2006-07, the international business contributed only 30 per cent of the USD 22 billion turnover, which worked out to USD 6.7 billion. 

With acquisition of Corus the international business will account for 50 per cent of the total turnover, the official said.


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## alamgir

INDO-US WHEAT ROW 
Weeding out wheat 
Claiming highest quality standards in the world when it comes to its own agricultural imports, the United States has no qualms in exporting sub-standard wheat to India. US participation in India's wheat procurement cannot be at the cost of India softening quarantine standards, says Devinder Sharma. 

19 June 2007 - It is a queer case of double standards. Claiming highest quality standards in the world when it comes to its own agricultural imports, the United States has no qualms in exporting sub-standard wheat to India. In fact, diplomatic pressure is being built upon India to import weed-infested wheat. 

Failing to reach an agreement after recent bilateral discussions on plant health, a statement from the US Embassy in New Delhi said "Substantial hurdles still remain, as the US cannot agree to import standards that are impossible to certify and are not in line with international norms." At the heart of the row are the quarantine norms that do not allow wheat consignments with dangerous weeds beyond the permissible limit. 

The American wheat comes with 21 alien weeds which are not known to exist in India. As per the weed risk analysis done by the Ministry of Agriculture, all these weeds are of quarantine importance and carry high risk. More worrying is the presence of two weeds Bromus rigidus and Bromus scealinus -- better known as foxtail wheat, which is similar in appearance to wheat and therefore difficult to identify. 

While the US accepts that its wheat contains 21 weeds, it has expressed its helplessness in cleaning wheat shipments to bring it in tune with the Indian threshold limits. 


 Wheat imports: Subverting procurement 
 Fungus threat to Indian wheat 


Already, surreptitiously imported along with wheat, several weeds and pests have turned into a national menace. India is spending crores of rupees every year in fighting these alien invasive species. 

Earlier too, India had in 1996 rejected wheat imports from America on reasons of inferior quality, and had instead imported one million tonne from Australia. In 2006, when India imported 5.5 million tones of wheat from Australia and some other countries, the US was unable to find a foothold into Indias burgeoning wheat market. Aware that India is likely to turn into a major wheat importer in the years to come, the US has stepped up diplomatic and political efforts to exert pressure. 

Not that the Australian wheat is much superior. In 2006, bending backwards to allow the highly contaminated wheat shipments from Australia, Indian Food and Agriculture ministry had turned a blind eye to the presence of 14 weeds, two fungal diseases and one insect pest that the import consignments contained. Of the 14 weeds, 11 species are not found in India. 

Interestingly, while the US accepts that its wheat contains 21 weeds, it has expressed its helplessness in cleaning wheat shipments to bring it in tune with the Indian threshold limits. At the Portland port from where much of its wheat is exported, the US grain merchants were unable to clean wheat of the menacing weeds. The US is seeking import norms of 0.3 per cent weed infestation. At this level, the total number of weed seeds per 200 kg of wheat comes to a massive 12,000. India, on the other hand, is insisting on not more than 100 weeds in a consignment of 200 kg of wheat. 

Although the US is publicly claiming that its "wheat is among the highest quality in the world and is safely shipped to over 110 nations including every importer of significance except India", the fact remains that much of the American wheat imported by rich and developed countries like Japan is actually for milling purposes. In India, wheat imports are used as grain by farmers and therefore the worry that the weeds will take root. 

Several of the minor weeds that came along with PL-480 wheat shipments into India in past have turned into biological nuisances, often the weed becoming a national menace. Lantana camera was among such weeds, which entered India three decades ago. Today, it has spread wide and wild, and has withstood all control measures. Being poisonous, not even the cattle feed on it. Phalaris minor too came with the wheat consignments from the United States. This weed, already resistant to chemicals in the US and Australia, has established itself as a strong competitor of wheat in India. The weed has also become resistant to chemicals in India and is responsible for reducing wheat yields by an estimated 25 per cent. 

It is not the first time that the US is trying to export sub-standard agricultural products. In September 2000, the United States Department of Agriculture (USDA) sent a delegation to press for opening up the Indian market for what would have turned into the first major import consignment of genetically modified soybeans. If allowed, the soybean imports would have brought along five exotic weeds and at least 11 viral diseases, of which two are economically dangerous. The US did insist that the accompanying pests would not pose any problem for Indian agriculture. 

Earlier too, during 1998-99, the National Bureau of Plant Genetic Resources (NBPGR) had received 359 samples of transgenic soybean from the USA for quarantine. Nearly 143 of these were rejected because of the presence of downy mildew fungus (Peronospora manshurica), which is known to cause serious losses and is not known to occur in India. Bulk imports, however, fail to eliminate the threat of import of nematodes, viruses and several fungi. 

For reasons unexplained, India appears more eager to allow sub-standard imports. As noted earlier, in 2006, it relaxed most quality norms for Australian wheat by asking the exporting country to provide a certificate saying that the imports are "essentially free from weeds". At the time of tender, the requirement was "free from weeds". Over-ruling all objections raised by the plant quarantine directorate, the Food and Agriculture Ministry has relaxed the provisions of Plant Quarantine Order 2003. 

The US regulates weeds under the Plant Protection Act 2000. The PPA defines a noxious weed as a weed that could bring harm to agriculture, the public health, navigation, irrigation, natural resources, or the environment. 
Under the PPA, noxious weeds are regulated similarly to plant pests. The PPA lists some 170 weeds that cannot be imported into the US. 


 Subverting wheat procurement 
 Fungus threat to Indian wheat 


After the current din dies down, India might relax quality norms for American wheat. Agriculture Minister Sharad Pawar has already been quoted as saying: "It is true that talks have been held with the US government. We want that the US should also participate in our wheat import process." What is however not being perceived is that the US participation cannot be at the cost of softening the quarantine standards. At a time when international quality parameters are being tightened the world over to ensure that invasive alien species do not use the vehicle of commodity trade to enter into a country, India should not relax the quality norms thereby opening the floodgates to noxious weeds, deadly insect pests and dreaded plant diseases. 

What Sharad Pawar needs to understand is that wheat with foreign weeds would not be accepted for import in the United States for the same reasons -- quality standards -- that we are being asked to do away with. &#8853; 

Devinder Sharma 
19 Jun 2007 

Devinder Sharma is a food and trade policy analyst. He also chairs the New Delhi-based Forum for Biotechnology & Food Security. Among his recent works include two books GATT to WTO: Seeds of Despair and In the Famine Trap. 

www.indiatogether.org/opinions/dsharma/-36k


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## alamgir

Indias exports will fail to reach target
NEW DELHI: With the rupee appreciating by the day, the goal of Indias exports reaching $160 billion in the current fiscal (2007-08) has become a distant dream for exporters, says a leading industry body, according to Internet. 
The level of appreciation of the Indian rupee, which strengthened by 8.35 percent during the fist half of this year, is second only to that of the Brazilian currency, which appreciated by 9.28 percent during the same period, according to the Associated Chambers of Commerce and Industry of India (Assocham). 
Other currencies have also appreciated against the US dollar, but not to this extent. 
The currency of Thailand appreciated by 7.56 percent, of Russia by 2.08 percent, of Malaysia by 1.98 percent, of China 1.82 percent and of Singapore, Bangladesh, Indonesia, Pakistan and South Korea by less than one percent. 
The sectors worst hit by this appreciation in the value of the rupee are IT and IT-enabled services, textiles, leather, sugar and pharmaceuticals. 
The chamber said if the appreciation of the rupee was not tackled soon India would gradually lose its competitive edge over the buoyant economies of China, Hong Kong, Vietnam and others in the IT and services sectors.
The small and medium enterprises (SMEs) exporters who operate on thin margins are badly affected on realisations because of high appreciation of the rupee. 
In the highly competitive global market, hardening (of the rupee) will dampen the prospects of the exporters, Assocham said. 
In textile and leather exports, India is facing stiff competition from China, Bangladesh and Pakistan and their currencies have appreciated insignificantly, compared to rupee. 
Appreciating rupee would dampen the export competitiveness by at least $15 billion in the current fiscal itself. Exporters may not be able to sustain the currency appreciation as it is high and happening very quickly, said Assocham president Venugopal Dhoot. 
Pakistan and China are performing better than India in the textiles sector because their currencies are not appreciating as much as the Indian rupee and so their prices are lower, the survey said. 
Realisations are also taking a dip because of the appreciation and mostly hitting the SME exporters segment as they operate on thin average margins, Dhoot added. 
www.newstoday-bd.com


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## alamgir

Reality lagging behind promises
Published: March 6 2007 16:04 | Last updated: March 6 2007 16:04

The Indian economy recorded a scorching growth rate of 9.2 per cent during 2006-07, led by the industrial and services sectors  growing at more than 10 per cent and 12 per cent respectively  while the agricultural sector lagged, with growth slowing from 
6 per cent to 2.7 per cent.

With inflation at more than 6 per cent, P. Chidambaram, the finance minister, focused his budget last week on addressing the agricultural sector and supply side constraints that could slow macroeconomic stability and growth.

Substantially enhanced outlays were announced for irrigation, drinking water and sanitation, rural health, HIV/Aids and rural employment schemes. 
There was also a focus on education and training.

The announcements of scholarships for school students to arrest the large drop-out numbers and substantive grants for upgrading industrial training institutes in public-private partnerships will go a long way in improving the employability of some 71m youngsters who will enter the work force in the next five years.

However, if India is to provide sufficient employment, government policies need to focus on helping it to become a global manufacturing hub, otherwise the demographic dividend offered by a young population could turn into 
a demographic disaster 
as millions of youthful would-be workers fail to find jobs. In that respect, 
a lot more could have been done to liberalise foreign investment, reduce the size of the public sector and free up the labour market.

Import duties for non-agricultural products have been reduced from 12.5 per cent to 10 per cent, still not at the promised low levels, and duties on wine and alcohol continue to be levied at rates that could cause dispute at the World Trade Organisation.

There was no reduction in manufacturing taxes, but the service tax net has been expanded, even so far as covering letting commercial property. The finance minister also offered a welcome reiteration of plans to introduce a national goods and services tax.

There was some hope for a reduction in surcharges against the backdrop of buoyant tax revenues, but there has been a 1 per cent rise in the education levy, taking the corporate tax burden from 33.66 per cent to 33.99 per cent.

There has also been 
an increase in dividend distribution tax from 14.03 per cent to 16.995 per cent. Though there is no tax in the hands of the recipient of the dividend, the overall corporate tax has gone up to 43.58 per cent (assuming full distribution of dividends), which is, for 
the first time, higher than foreign company tax in India at 42.02 per cent.

Indias 11th five-year plan has the declared objective of faster and more inclusive growth. This was a political budget focused on the second of those objectives. Even so, it could have delivered more than it did to help growth in the manufacturing sector.


Vivek Mehra is an 
executive director of PricewaterhouseCoopers

www.ft.com


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## alamgir

OPINION : HEALTH INSURANCE 
Healthcare as a broad public challenge 
The mounting cost of hospital care, increasing out-of-pocket expenditure, and its catastrophic impact on family finances demand an innovative and flexible risk-pooling mechanism to provide a security net for the poor. Merely transfering the costs to the public exchequer will land the nation in a no-win situation, writes Jayaprakash Narayan. 

01 January 2007 - The UPA government's National Common Minimum Programme advocates a national health insurance scheme to help the poor tide over the economic crises resulting from the costs of ill health. Is such insurance a viable option? This requires a serious national debate. Several states have been toying with such an idea of health insurance in recent months. Any hasty decisions without careful evaluation of costs and benefits will land the nation in a potentially no-win situation. 

Let us look at our health crisis. First, public health expenditure in India is amongst the lowest in the world as a share of GDP, at less than 1 per cent. What is more, as a proportion of the total health expenditure, it accounts for under 20 per cent, making India a member of a small group of nations in extreme distress - like Cambodia and Afghanistan. Private health expenditure accounts for 80 per cent of the total health care costs. 

Second, most of the private expenditure is out-of-pocket (nearly 97 per cent), as there is neither health insurance coverage for the bulk of the people, nor a viable risk-pooling mechanism. As a result, the economic consequences of ill health are devastating for most families. Surveys show that a single episode of hospitalisation costs a family about 60 per cent of the annual income, on average. This high average out-of-pocket expenditure applies to all cases of hospitalisation. This is because even in public hospitals, costs are incurred for transport, accommodation and board for the patient and attendants, bribes, and often diagnostic investigations at private facilities and purchase of drugs unavailable in government hospitals. As a result, 40-60 per cent of hospitalised patients borrow heavily at high interest, and up to 30 per cent end up slipping below the poverty line on account of healthcare costs. 

Excessive reliance on health insurance may be neither prudent nor cost-effective. Health insurance will only address the symptoms of public health failure. 


&#8226; Will PHF be meaningful? 
&#8226; Universal care: Miles to go 


Adding to all this, advancing technology and rising private investments in expensive equipment have resulted in an ever-increasing temptation to subject every patient to a plethora of largely unnecessary and costly investigations. The mounting cost of hospital care, increasing out-of-pocket expenditure, and its catastrophic impact on family finances do demand an innovative and flexible risk-pooling mechanism to provide a security net for the poor. 

What a national health insurance scheme will do is simply transfer these costs to the public exchequer. The experience of many health insurance projects run by civil society initiatives and non-profit foundations indicates that the average actuarial costs even for a modest health insurance coverage will be about Rs 300 per capita per annum. A national scheme would involve coverage of about 300 million poor people with full government subsidy, and another 400 million lower middle-class people with 50 per cent subsidy. The cost to the exchequer will be around Rs 15,000 crores per annum for any credible national insurance programme, even with modest and limited risk coverage. When the current public health expenditure is only Rs 25,000 crores, a 60 per cent escalation only for health insurance is unrealistic and unsustainable. Such shift in expenditure will actually result in subsidising private hospitals. 

Worse, such a diversion of expenditure could further diminish resources for preventive and public health. Most of the disease burden is a consequence of primary care failure. The need of the hour is clearly to strengthen preventive and public health systems to obtain best value for the money spent, reduce the disease burden and promote overall health. Excessive reliance on health insurance as a means of healthcare delivery is neither prudent nor cost effective. Health insurance will only address the symptoms of public health failure, without reducing the disease burden. This failure of preventive health will only escalate costs of curative medicine, in the fond hope that more hospitals will ensure better health. 

Furthermore, insurance usually involves adverse selection of beneficiaries, as those who are likely to benefit from hospital care are more likely to join it. There is also the moral hazard problem of two kinds&#226;&#8364;&#8221;poor hospital care once the population is enrolled in the risk-pooling mechanism, and over-consumption of medical services by the richer and better-informed sections. As a result, in OECD countries, healthcare costs are growing much faster than GDP. The total healthcare costs in rich countries are estimated at an astronomical $3 trillion. Let us not repeat the mistakes of other countries.


The range of diseases is also changing slowly in India with enhanced prosperity, better preventive care and longer life spans. India should therefore move towards risk-pooling options to reduce the burden of hospital costs on individual patients. But our first priority should be improvement of public health delivery systems. That is where the least investment yields the best returns. Meanwhile, the government can encourage the innovative schemes taken up by credible institutions such as SEWA in Ahmedabad or Tribhuvandas Foundation in Gujarat. Subsidies to such schemes may work. 

Instead of going for what look like obvious solutions but are actually riddled with problems, India needs to devise risk-pooling schemes primarily involving public sector institutions. In a scheme where money follows the patient and public hospitals are rewarded on the basis of services delivered, the incentives will be dramatically altered, and service will improve. Such risk-pooling will strengthen public sector while providing relief for the poor. &#8853; 

Jayaprakash Narayan 
01 Jan 2007 

Dr. Jayaprakash Narayan is the coordinator of Voteindia - a national campaign for political reforms. This article was first published in the Financial Express. 

www.indiatogether.com


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## Neo

*Alamgir,

Whats the point of posting old news when the thread is kept upto date in chronological order by Bushroda, Malay and myself on almost daily base? Please do not spoil it.
If you're really interested in gaining knowledge or engaging debates or having a Q & A sessions you're most welcome to join us.

Sincerity is usually displayed in balanced posting, unfortunately all you've been doing is spreading negativity all around. I truely regret that!

Please take some time to think about it before making your next post.

Thanks,
Neo*


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## Neo

*Indian equities touch reaching new highs​*
MUMBAI: Indian share prices may hit a fresh record next week on strong demand for global equities after the benchmark 30-share Sensex index surged past the 15,000 points level on Friday, dealers said.

Indian shares rose 308.6 points or 2.06 percent to close the week at 15,272.72, the first time the index closed above the 15,000 points level. The Sensex has now risen 4.2 percent in the past fortnight.

The markets saw another week of strong gains at the 15,000 points level. Global and local fund buying is strong and we could see the markets hitting a new high soon, said Advait Date, a dealer with brokerage BHH Securities.

Dealers said automobile, infrastructure and property stocks could gain further as concerns of a local interest rate hike eased.

Analysts do not expect Indias central bank to hike rates despite higher inflation data recorded for two straight weeks.

Inflation rose to 4.27 percent for the week ended June 30, from 4.13 percent a week earlier, but was lower than its two-year high of 6.73 percent in February this year.

There is a strong case for rates to remain unchanged with inflation and loan growth slowing down in recent months, said Rajeev Malik, Asian economist with J P Morgan Chase Bank, based in Singapore.

Indias central bank will review monetary policy on July 31.

Analysts said Infosys earnings data this week were broadly in line with expectations, despite a cut in its full-year earnings forecast.

The rupee trades at a near-decade high against the dollar at 40.47. Software companies bill most clients in dollars and a strong rupee hits earnings.

Capital goods, automobile and metal stocks rose this week.

Earnings data from Indias biggest software exporter TCS on Monday could set the trend for software stocks.

Overseas funds have been net buyers of Indian equities this year to the tune of $7.7 billion, well above the $2.79 billion worth of shares that they purchased during the same period a year ago.

In 2006, the Sensex rose by a record 46.7 percent, led by foreign fund investments in Indian equities totalling $7.99 billion.

http://www.dailytimes.com.pk/default.asp?page=2007\07\15\story_15-7-2007_pg5_24


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## Bushroda

*Investment growth on a hat-trick*
Ruhi Tewari
Monday, July 16, 2007

*Outstanding Surge: 2004 marked a turnaround with growth rate going well above 6%, the first time since 1996; by March 2007 it touched 12% *

New Delhi, July 15: In what can be seen as a positive development for the Indian economy, the total outstanding investment (government and private) has shown a sharp increase since March 2004. Outstanding investment is the sum of announced, proposed and under-implementation investment projects in the country. 

Latest quarterly data on outstanding investments (June 1995 to March 2007) reveals that while such investments have been on the rise for most of the period, the rate of growth increased post-2004. The growth rate of over 5 per cent in December 1996 declined to that of over 4 per cent by June 1997. This decline continued with December 1997, witnessing a mere 1.14 per cent growth in investment. 

Most of 1998 saw a negative growth rate (a decline in absolute terms), most of which was caused by a sharp decline in the growth of private outstanding investments. By September 1999, this component had become less than the government component in absolute terms by Rs 29,583 crore. Thus, as individual components displayed similar trends, the overall growth rate of outstanding investments ranged from 1.76 per cent to slightly over 5 per cent. 

The year 2004, however, marked a significant turnaround with the growth rate going well above 6 per cent, the first time since 1996. By March 2007, growth in investment had touched 12 per cent. The end of 2006 witnessed a sharp rise in private investment, which after a gap of 10 years, exceeded government investment by a whopping Rs 2,41,581 crore. 

This sharp rise in private investments can be attributed to the boom in construction, electricity, mining and services investment, by the private sector, which increased by 335 per cent, 119 per cent, 112 per cent and 78 per cent respectively, over the four quarters ended March 2007. Further, sluggish government investment added to that wide gap. 

However, according to CMIE managing director and CEO Mahesh Vyas, this trend is not linked to the changes in individual government and private components of outstanding investments. The sharp increase since 2004 is mainly because of the revival of the business cycle since the middle of that year, he said. It has become like a cycle. The revival led to booming investment, which in turn, became a source of further demand, and hence growth. 

There is no reason for investment slowdown at least in the next one year. The next four quarters are most likely to see robust investment growth. However, it is difficult to predict beyond that, said Vyas. If we are able to convert such investments into actual production capacity, the economy will witness high growth. 

Abheek Baruah, chief economist, HDFC Bank agrees that this growth will continue. The revival in investment post-2004 has been largely due to an increased capacity addition by companies. The period from 1998 to 2004 was a fallow period. This changed post 2004. There was a spurt in private investment not just in services but also in manufacturing and infrastructure. 

Rajesh Chadha, senior fellow, NCAER gave the imbalanced growth logic to explain this trend. While government investment kept growing at a relatively stable rate during 1995-2003, private investment grew with hiccups. The average annual growth rate of outstanding investments during June 1995 to March 2004 was 3.2 per cent with the compared corresponding growth rate of only 0.6 per cent in private outstanding investment. It seems that excess capacity had been fully utilised and there was need to create more capacity in the private sector post March 2004.


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## Bushroda

*Get on to the local 'IT' train*
16 Jul, 2007, 0225 hrs IST,Ranjit Shinde, TNN

The times have become rather tough for IT stocks. Once the cynosure of the market, they no longer lead the broader rallies in the stock market. Of late, they have even started underperforming benchmark indices. 

During the first half of 07, the BSE Sensex gained 5%, while the ET IT index, representing 30 frequently traded IT stocks, managed to crawl up just about 1%. 

Investor disinterest stems from worries over the single most important factor, at least for now, which is, strengthening of the rupee against the dollar. As per the latest Nasscom release, the domestic IT sector mops nearly 80% of its revenues from overseas markets (predominantly the US and Europe) and hence, finds itself straight in the line of fire when the home currency starts appreciating. 

Interestingly, this time around, the rupee has been gaining against major trade currencies including the dollar, pound and euro. Hence, Indian IT exporters may not avail of any leverage by merely cutting exposure to the US and increasing their presence in Europe. Such a geographical shift can only be beneficial if we focus on India as a market. 

Companies which have significant revenues from the domestic market will be at a lesser risk when the rupee appreciates. This makes it imperative to know if there are any Indian IT companies earning all or a major chunk of their revenues from domestic operations. 

ETIGtried to find out if there are any such companies and whether they are profitable enough to justify a larger presence in the local market. We identified a handful of companies which are less prone to forex fluctuations and at the same time, demonstrate moderate to robust operating profitability. 

These companies are mainly niche market players, unlike many of the IT exporters which provide applications development and maintenance services that attract a lot of competition, given their ubiquitous nature. For instance, Rolta focuses on geospatial information services and engineering solutions. 

Since there are not many players in this segment, Roltas operating margins exceed even those of top IT companies. Tulip is engaged in corporate data communications and network connectivity solutions, while NIIT is a leading player in IT education. 

Spanco offers integration solutions in the telecom space. The margins for other locally oriented companies are not as high as Roltas, but they run operations profitably. 3i Infotech and NIIT earn operating margins in the low 20s, which is in tandem with many medium-sized IT exporters. 

Scrips of some of these companies are attractively valued at the current price levels. 3i Infotech and Spanco Telesystems are available at a trailing 12-month P/E of about 15 and 17, respectively. 3i Infotech enjoys a prominent presence in the banking, financial services and insurance domain. It is among the few product-oriented IT companies in the country showing good profitability. 

Spanco and Tulip are riding high on the increased demand for networking and data communications, following momentum in domestic economic activities. While most IT companies are reeling under the pressure of forex fluctuations, companies which take advantage of the boom in the local economy and cater to the domestic market profitably look attractive.


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## Bushroda

*Indian auto market reaches top gear*
7Days, United Arab Emirates
Last Updated : Monday 16 Jul, 2007 - 

Cheap, fuel-efficient and versatile, compact hatchbacks are by far the most popular vehicles in Indias rapidly growing auto market. And as global automakers rush into the country to set up plants to make similar small cars, both established companies and newcomers see a bigger role for India: Asias small car export hub.

Already, South Koreas Hyundai Motor has shifted its entire production of the Atos Prime, its most popular compact, to the southern Indian town of Sriperumbudur, just outside the port of Chennai. It plans to do the same for the Getz, a premium hatchback. A third of the cars produced at this plant are exported to 67 countries, from neighbouring Sri Lanka to faraway Mexico.

By October, Hyundai will complete a second factory nearby, doubling annual production to 600,000 cars, most of them compact hatchbacks that sell for little more than $7,000. We have a very clear target, said Heung Soo Lheem, chief executive of Hyundais India operations. India will be our export hub, which means all our small cars will be produced here.

Suzuki Motor, which owns a controlling stake in Maruti Udyog, Indias largest carmaker, is investing $2 billion in India and plans to export 200,000 cars from the country by 2010, Chairman Osamu Suzuki said during his recent visit. In addition, Tata Motors plans to make a $2,500 car, which could set new standards for the auto industry worldwide. The company is setting up showrooms across Africa and has tied up with Fiat to use its South American sales network.

Now newcomers like Frances Renault, which has rolled out its Logan sedan and hatchback here, are breaking into a market that for years has been dominated by Maruti, Hyundai and Tata. Renaults alliance partner Nissan Motor has recently announced plans to make cars in India and export them to Europe.

Spurred by Tatas ambitions for a super-cheap car, Nissan and Renault are also exploring the viability of a below $3,000 car in likely collaboration with Indian partner Mahindra & Mahindra. This could have a potential bigger than India, Carlos Ghosn, CEO of both Nissan and Renault, said recently. General Motors has started making small cars here, including the Chevy Spark, a $7,200 compact car that CEO Rick Wagoner said is a big part of our India strategy.

Honda Motor has begun building a new plant for premium hatchbacks in western India, and Toyota Motor and Volkswagen AG are expected to announce similar ventures in coming months. For now, most newcomers want simply to gain a foothold in India, where JD Power and Associates predicts annual vehicle sales will nearly double to two million units by 2012.

Manufacturers expect annual production to rise well above three million cars by that time, which is huge considering cars were long considered a luxury in this once-socialist style economy. Until the mid-1980s, Indias roads were dominated by just a couple of models, including the Ambassador, a simple, mid-sized sedan copied from the British Morris Oxford. The Ambassador met the needs of a small elite and its market was protected with high tariffs.

The government has since eased rules and encouraged expansion of the auto industry amid rising demand from the countrys prospering middle class. Compact hatchbacks, which account for three-quarters of current sales, look set to continue to dominate. Analysts say Indias manufacturing could meet the global demand for compacts anticipated as Asias middle class grows and consumers worry about higher fuel costs.

Indias proximity to other booming economies in Asia as well as other emerging markets like Africa gives it an advantage, said VG Ramakrishnan, director of automotive practices at the consulting firm Frost & Sullivan. And shipping to Europe from India can be less expensive than from Brazil, Thailand or South Korea. India also offers access to low-cost auto components and cheap labour, Ramakrishnan said. As manufacturing gets increasingly automated, companies can tap the countrys pool of software engineering talent.

Foreign automakers are allowed to set up fully-owned subsidiaries, which could give the country an edge over China, where local partners are mandatory. Perhaps the best proving ground will simply be satisfying Indias demanding, yet frugal, consumers.


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## Bushroda

*Usher in a second Green Revolution* 
SHOBHA AHUJA 
Posted online: Monday, July 16, 2007 at 0006 hours IST 

With our gross domestic product (GDP) touching near double-digit growth rates, our economy is in the best ever phase of growth. Yet, this growth rate has been achieved mainly due to the impressive performance of the manufacturing and services sectors. The performance of agriculture, which has been largely bypassed by the reform process, continues to be lacklustre. Hence, it is important that agriculture is brought within the ambit of reforman area where foreign investment can make a major contribution. 

By facilitating the introduction of new production techniques, which are in line with international best practices, the experience of the foreign investor in the farming sector could prove invaluable. The case in point is that of ITC Ltd, where the introduction of Internet-linked kiosks, or e-choupals, set up in around 20,000 villages across the country, has helped the farmer to gain information on agri-prices and thereby negotiate the sale of his produce at best-prevailing rates. Such success stories would surely gather pace once FDI enters the farming sector in a big way. 

Another reason for advocating foreign participation in farming is that Indian agriculture is presently in a time warp, burdened with the problem of low productivity, technological obsolescence and inefficient resource use. The sector, which supports 68% of the population, continues to grow at a relatively modest pace with its share in GDP falling to 19%, thereby badly affecting labour absorption in this sector. Besides, value addition in farming is on the decline while its share in capital formation has dropped from 2.2% of GDP in the late nineties to 1.9% at present. Hence, Indian agriculture faces an acute shortage of investible funds for modernisation and infrastructure development programmes. FDI in farming would unleash a new revolution by enabling the farmer to move from supply-driven to market-driven production that would add more value to their products, help secure high returns on investment and thereby improve the monetary status of the farmer. After all, the country gained considerably from harnessing the new seeds technology of the Green Revolutionthrough the shared expertise of foreign partnership. Foreign expertise could once again be tapped for exploring more sophisticated versions of technology to produce more from our given land resources and, in the process, flagging off a second Green Revolution in the country. 

Besides, by forging effective partnership with the farmer, FDI can facilitate efficient market linkages from the farm to the table, transfer know-how and assist in research. Farmer education and information dissemination is another area where the experience of the foreign investor could be shared. 

The involvement of FDI in the export of farm produce is yet another uncharted territory. The expertise of the foreign investor could be utilised, especially in those markets that impose stringent sanitary and photo-sanitary conditions on our farm products. Similarly, there are vast vistas of opportunities for foreign assistance in packaging and quality up-gradation. 

Finally, opening up the farm sector to foreign companies can help meet the development aspirations of our country. By facilitating productivity improvement in our farm sector, the foreign investor can help in employment generation, poverty alleviation and ensuring food securityand, in the process, ensure welfare gains for the economy. No wonder, all Asian countries are tending towards opening the sector to FDI. 

Yet, there are certain aspects that must be considered before opening up farming to FDI. Firstly, priority should be given to reforms. Various laws and regulations, such as the APMC Act, which continue to stifle the growth of the agriculture sector, need to be reviewed. Free inter-state movement of agricultural commodities should be allowed so that the domestic investor is enthused to enter the farm sector. 

Lastly, a regulatory mechanism must be in place so that the move does not lead to uprooting and dispossessing marginal farmers who own less than one hectare of land.


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## Bushroda

*India's Growing Wealth Belt Spawns A New Breed Of Managers* 
*New wealth creates room for financial planners.*

By: Knowledge@Wharton 

Five years ago, a cold call from Deutsche Bank changed Nagendra Venkaswamy's life. A director at a Bangalore-based software firm, he was 40 years old and facing financial ruin. "After 20 years of working, I had spent all my money on gambling in the stock market," he recalls. "All I was left with was my house and the equivalent of $200. My wife and child had no idea that I was absolutely broke."

The Deutsche Bank representative who called Venkaswamy helped him work on a plan to recharge his finances. "He held up a financial horoscope for me," he says. "If I needed to survive, I had to change my habits." The planner also offered an array of options that, among other things, helped him ensure his family's financial security and steadily build an asset portfolio. "In six months I had recovered everything I had lost," says Venkaswamy, who today is managing director of Indian operations at Juniper Networks in Sunnyvale, Calif.

Until recently, wealth management for high net worth individuals was an almost unheard-of concept in India. Rising incomes and the unlocking of wealth from closely held businesses have created a whole new generation of individuals that constitutes a credible market opportunity for asset managers, private bankers, financial advisors and others. Simultaneously, new options for investing are emerging as well, including art, overseas investments and real estate venture funds.

"The wealthy Indian has just recently started waking up to the concept of private banking," says Sutapa Banerjee, senior vice president and head of Indian private banking at ABN AMRO Bank. Previously, most high net worth individuals (HNWIs) invested in a few asset classes, using their local brokers, chartered accountants or tax consultants. For wealth managers, "it is an extremely challenging task to break the traditional mindset" and convince HNWIs to embrace "an asset allocation methodology through a professional wealth manager," she adds.

"Traditionally, the wealth management market in India was served by those that cross-sold mutual funds and broker/banker products to mass affluents," or individuals with liquid assets of between $50,000 and $300,000, says Leo Puri, managing director at private equity firm Warburg Pincus in New York City and a former director at McKinsey & Co. in Mumbai. "A true [wealth management] market is just beginning to develop."

Banerjee attributes the increase in the number of wealthy Indians to a combination of factors. For one, many are invested in the equity markets and have benefited from strong corporate results in recent years. Stock market earnings multiples are also riding high, and so is sentiment in the market for initial public offerings, she says. Promoters of Indian companies have also been able to unlock significant wealth through mergers and acquisitions, she adds.

*The 'Wealth Belt' Expands*

According to a report titled, "State of the World's Wealth: 2006," published by Merrill Lynch and French consulting firm Capgemini, the number of high net worth individuals in India grew 19.3% between 2004 and 2005 to 83,000, whereas the global average was 6.5%. The report also found that only 0.01% of India's adult population is made up of HNWIs, which is a tenth of the Asia-Pacific average.

By Puri's estimates, India now has roughly 20 million urban households that earn $5,000 to $10,000 annually. Another six or seven million households earn between $10,000 and $100,000. Wealth managers are actively developing products and strategies to tap into those markets, says Puri. India has fewer than 100,000 individuals with a million dollars or more to invest, he says, using the international definition for HNWIs.

But international yardsticks don't lend themselves easily to the Indian market, says Kanwar Vivek, head of private banking at ICICI Bank, India's largest private sector bank. "Inheritance is not a vital wealth forming segment here yet, unlike Europe which has been rich for 250 to 300 years," he says. "In India, the people who are rich are those who own SMEs (small and medium enterprises) or LMEs (large and medium enterprises). It's a booming market. The opportunity lies in increasing their wealth. We want to catch the group of clients who will be in the Rs. 4 to 5 crore ($1 million to $5 million) bracket tomorrow." ICICI assigns a wealth manager to each client with an investment size of at least Rs. 1 crore (about $240,000).

Deep-rooted cultural moorings - such as keeping money matters strictly private - are also giving way. "In India, money does not have sinful connotations anymore," says Pradeep Dokania, managing director and head of the global private clients group at DSP Merrill Lynch. "India has always had a lot of enormously wealthy people such as landlords, royalty, rich farmers and traders," notes Abhay Aima, head of the wealth management practice at HDFC Bank in Mumbai. "However, they traditionally did not discuss their assets with financial institutions."

*Emerging Asset Classes*

Indian HNWIs are beginning to explore investment opportunities beyond the traditional capital markets, migrating to newer asset classes such as art, real estate and overseas investment opportunities. Wealth management firms are targeting specific niches among them to avoid the clutter of competition. HDFC, for instance, is looking to service mass affluents, high net worth individuals and ultra high net worth individuals, but its focus is mainly on the first two. It is also pitching its services to wealthy non-resident Indian (NRI) investors who have done well overseas and are now looking to invest in a booming home economy. These investors are typically based in Singapore, Hong Kong, the U.K., the Middle East and the U.S.

Smaller shops, too, have made a specialty in servicing overseas clients. Govind Pathak set up Acorn Investments Advisory Services three years ago and has formed a niche among U.S.-based high net worth clients. "All my advice is India centric," he says. "People want alternative or supplementary advice that is not coming from product sellers such as banks and insurance companies." Acorn's minimum requirement for a client's investment check book is Rs. 25 lakh, or about $60,000.

ABN AMRO currently provides consulting services for assets totaling $800 million, and its clients are mostly owners of small and medium enterprises. "We are very strong as a diamond financing bank, and diamond [industry] clients are automatically our target clientele and constitute a substantial portion of our business," says Banerjee.

Vallabh Bhansali, director of Enam Financial Consultants, a financial services firm based in Mumbai, believes the concept of wealth management is often misunderstood in an emerging market like India. "Income and wealth are different as far as our understanding is concerned," he says. "Many banks offer transaction-driven services. That is not wealth management. We tell our clients to give us all their worries, and think wealth. Serious wealth management requires that the wealthy should really think wealth seriously." Enam accepts clients with a minimum of $1 million in assets and employs three wealth managers to service them.

Dokania of DSP Merrill Lynch is working out hybrid models to attract the right clients. "Create a product proposition that is all pervasive - equity, fixed income, debt, advisory - and you have a relationship that is not just transactional," he says. His firm's threshold for taking on asset management clients is $500,000 in financial assets, excluding the value of home equity or jewelry. He says his firm's clients average a portfolio size of $1.5 million.

As the wealth management market evolves, wealth managers are preparing to offer more and more sophisticated financial products. "Real estate venture funds are the new fad in the market, given the superlative returns real estate investments have been offering in the last few years," Banerjee says. "Soon we can expect the introduction of REITs (real estate investment trusts) and real estate mutual funds." Puri feels alternative markets for assets like art will become much bigger, especially with the presence of a dedicated fund, both in India and overseas.

*Regulatory Constraints*

While the wealth management market is expanding, regulatory constraints prevent banks from offering a wide range of services. "There is a host of products which a bank can't sell and provide to its clients," Banerjee says. "Until recently, banks were not allowed to sell real estate venture funds. Similarly, banks are not allowed to run a portfolio management scheme for clients." Banks can offer such services only by setting up separate non-banking finance companies, "licenses for which are also very hard to come by."

As a result, ABN AMRO offers its clients investments in debt, equity, mutual funds and insurance through the mutual fund route and a variant of portfolio management services, she says. It has also put in place third party arrangements to help its clients invest in newer asset classes such as real estate and art. ABN AMRO currently has about 700 client groups with assets totaling some $800 million. Banerjee hopes to increase that figure to between $2 billion and $3 billion in the next few years.

Banerjee predicts that the regulatory establishment will eventually loosen up, with India moving towards full convertibility of the rupee on the capital account, which essentially will allow its unhindered flow to foreign markets. By 2009, "the regulatory regime in India will be more conducive for foreign banks to do business in the country."

Dokania and Puri point to recent moves in that direction by India's central bank, the Reserve Bank of India. Indians can now remit up to $50,000 overseas in a single year, and that cap will be raised to $200,000 by 2009. Banerjee notes that these measures will open more opportunities for banks like hers to offer clients international investment products.


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## Bushroda

*CEO racing to complete India's showpiece airport*
Taipei Times, Taiwan
Monday, Jul 16, 2007

Swiss chief executive Albert Brunner, whose nation takes pride in its clocks and watches, is racing against time to get a showpiece airport up and running in the high-tech Indian city of Bangalore.

April 2 next year is Brunner's deadline for Bangalore International Airport to receive and send off the first of the 8 million passengers it expects to handle in its first year.

That is a date the chief executive officer of Bangalore International Airport Ltd, is determined to keep.

If he succeeds, it will be a remarkable victory for a project conceived in 1991 but construction of which began only 14 years later after it was awarded in July 2005 to a consortium including Unique Zurich Airport, Siemens of Germany and Larsen and Toubro of India.

The airport, expected to cost US$500 million, has been designed for 11 million passengers a year, up from the 5 million first planned, as traffic growth accelerated with an expanding economy.

"The deadline is tight," said Brunner, who spent almost as long on negotiating the project as the three years he undertook to build the airport in. "But we want to show it can be done so we didn't shift the date."

Brunner, chosen to head the 1,640 hectare project because of a reputation for patience, may just pull it off.

Six thousand workers are working day and night seven days a week, he said, to ensure the deadline is kept in a nation where large projects routinely overrun by years, even decades.

By Thursday, 77 percent of the work on the airport being built in Devanahalli, 35km from Bangalore, was complete, Brunner said.

A fuel depot and cargo handling complex are being built at an additional cost of US$173 million for which concessionaires have to pay.

All concessionaires have been selected, said Brunner, who has been living away from his wife and 14-year-old son while he executes the project.

The concessionaires include Indian Oil and Skytanking to provide aviation fuel, and GlobeGround India and Air India plus Singapore Airport Terminal Services to cater to ground handling and LSG Sky Chefs and Taj SATS to compete for the food and beverage business.

"We want to make sure there's competition," Brunner said. "We want a clean, efficient, passenger-friendly and professional airport."

The airport will apply for a license by the end of September and start trials of systems the following month, said Brunner.

"We try hard to keep our reputation as timekeepers of the world," he said.


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## Bushroda

*Nokia Converts Margin-Sapping India, China Into Profit Machines* 
By Juho Erkheikki

The Nokia 6300 phone July 16 (Bloomberg) -- Nokia Oyj, the world's largest cell- phone maker, disappointed shareholders twice in the past three years by failing to keep up with consumer trends. This time, the company may have it right. 

Models such as the 550 euro ($759) N95 are paying off as customers trade up from starter phones in India and China. The shift is restoring profit margins that Chief Executive Officer Olli-Pekka Kallasvuo sacrificed last year when he focused on cheaper phones to win sales in those countries, where Nokia is the dominant brand. 

The shares have climbed 41 percent this year to 21.76 euros. Investors who bought at previous peaks, in early 2004 and again in 2005, were disappointed when competitors took away sales with new designs Espoo, Finland-based Nokia ignored. The shares remain at one-third their peak of 65 euros in June 2000. 

``The miss in clamshells in 2004 and then in slim phones have been the main disappointments,'' said Marko Alaraatikka, a fund manager at Evli Investment Management in Helsinki, which oversees about 6 billion euros including Nokia shares. ``I haven't heard anybody saying the stock will rise to 65 euros again, but I think it could up to 24 to 25.'' 

Nokia is touting the N95, with a dual-sliding cover, GPS navigation and a 5 megapixel camera, and the 250 euro 6300 slim phone to affluent users in Mumbai and Beijing, as well as the U.K. and Europe. The popularity of these handsets will help prop up Nokia's average selling prices, said analysts including Kulbinder Garcha at Credit Suisse in London. 

*Profit Gains *

In China, Nokia's biggest market, the company's unit share was about 42 percent in the first quarter, according to Framingham, Massachusetts-based researcher IDC. In India, Nokia has about two thirds of the market, the Times of India reported in May, citing a company executive. The company doesn't break out India figures from the Asia-Pacific region. 

Investors underestimate the impact the new phones will have on Nokia's profit, said Garcha, who has a ``trading buy'' rating on the shares. 

Amid a global slump in handset prices, Nokia exploited its size to lower production costs more than rivals, and eked out an expansion of its gross profit margin to 33.1 percent of sales in the first quarter from 32.4 percent in the fourth. Motorola Inc., the second-largest phone maker, had a gross margin of 26 percent and its mobile-phone unit posted an operating loss. 

*Motorola Woes *

As prices stabilize, at least four analysts have boosted second-quarter profit estimates for Nokia in the past month. The company, which booked a ``significant'' one-time cost in the second quarter from job cuts at its network equipment venture, is expected to report profit of 1.06 billion euros, or 28 cents a share, based on the average of 36 estimates compiled by Bloomberg. 

Nokia had a profit of 1.14 billion euros, or 28 cents, a year earlier, including a gain from an asset sale. Sales jumped 31 percent to 12.9 billion euros from a year earlier, according to the average estimate. The company reports second-quarter results Aug. 2. 

``Nokia is by far the most efficient in logistics and distribution,'' said Mika Heikkilae, chief investment strategist at Arvo Omaisuudenhoito in Helsinki, which oversees about 370 million euros. 

Nokia has also capitalized on missteps at Motorola, which said last week that second-quarter sales will miss its forecast, the third time the company has fallen short of its own predictions this year. 

The Schaumburg, Illinois-based company failed to bring out devices with more features to replace the best-selling Razr, and is losing sales to Nokia, Samsung Electronics Co. and newcomer Apple Inc. Motorola reports results on July 19. 

*China, India *

The shares, at their highest in five years, may reach 25 euros, said Ehud Gelblum, an analyst with JPMorgan Securities Inc. in New York. Motorola shares fell 19 cents to $17.89 July 13 in New York Stock Exchange composite trading and have dropped 13 percent this year. 

Nokia lowered its prices last year in emerging markets to keep Motorola's share from rising and ensure scale advantages, Evli's Alaraatikka said. Motorola's decision to drop aggressive pricing this year should boost Nokia's profits, said Gelblum, who rates the shares ``overweight''. 

Nokia controlled 36.2 percent of the global market in the first quarter, up from 33.2 percent a year earlier, according to researcher Strategy Analytics Ltd. The company said in May that its share would rise in the second quarter. 

Motorola's share fell to 18 percent from 20.4 percent and Suwon, South Korea-based Samsung, the third-largest handset maker, increased to 13.8 percent from 12.6 percent. Samsung overtook Motorola in the second quarter in terms of shipments, according to reports from the companies. 

*New Models *

Nokia's sales in China and the Asia-Pacific region each jumped 39 percent last year, after Kallasvuo focused on selling entry-level phones. India, the world's fastest-growing cell- phone market, is Nokia's third-largest territory. Revenue in China has risen 75 percent since 2002. 

With Nokia now entrenched, Kallasvuo's bet on India and China may pay off. The company's gross margin, the percentage of sales left after production costs, will increase to more than 35 percent in the fourth quarter, mainly because of phones such as the N95 and 6300, Garcha said. India's economy grew at the fastest pace in almost 20 years in the 12 months ended March 31, and China's retail sales jumped 15.9 percent in May, the fastest pace in three years. 

The 6300 model, aimed at mid-tier customers, started shipping in the first quarter and was the second most sold cell phone in China in April in its price range. 

*Replacement Phones* 

That's helped bolster average prices for phones Nokia sold in China. They rose 3.8 percent to 81 euros in the second quarter from the first, Garcha estimated in a June 6 note. In the Asia Pacific region including India, prices he predicted prices increased 4.1 percent to 77 euros. 

As customers move up in price range, Nokia is benefiting from the users' tendency to stick with a brand whose products they have already learned how to use, analysts and investors including Heikkilae said. 

Replacement phones will make up 60 percent of emerging- market sales this year, up from 50 percent in 2006, according to Nokia. Globally, the replacement market is expected to climb to 80 percent by 2010 from current 65 percent. 

``Replacements will give the basis for the future and the market leader should benefit the most from it,'' said Mika Heikkinen, fund manager at FIM Asset Management in Helsinki, which manages 8.5 billion euros including Nokia shares. 

Investors including Alaraatikka are aware that Nokia has disappointed investors before. After rising more than 650-fold from 1992 to mid-2000, the shares fell to as low as 10.55 euros in March 2003. 

*Momentum Shift *

The shares recovered to reach 19.09 euros a year later, then dropped by more than half in four months to 8.83 euros as the company was slow to introduce phones that flip open like clamshells. They dropped again in July 2005 when Motorola gained share with slim models such as the Razr. 

Now the momentum has swung back to Nokia, which charged into emerging markets early and so far has maintained its lead. 

Nokia started to address the ``slim issue'' in late 2006, when it unveiled the 6300 model and discussed its ``Barracuda'' model, a 9.9-millmeter thick phone that will go on sale in the third quarter. In May, Nokia introduced its slimmest device yet, the 6500 Classic that also allows faster Internet access. It will be also available in the third quarter. 

The N95, which started shipping at the end of the first quarter, is the best-selling device in the U.K. and No. 4 in Western Europe, Nokia says. Apple's iPhone, released in the U.S. June 29, hasn't yet gone on sale in Europe or Asia. 

``Nokia has managed to lift its market share and its product portfolio is being improved,'' Alaraatikka said. ``The situation is very good and this could go on.


----------



## Bushroda

*Linking economy to bank's growth*
15 Jul, 2007, 0502 hrs IST, TNN

MANGALORE: The upsurge in the economy is creating a potential for business growth of the bank, said Vijaya Bank chairman and managing director Prakash P Mallya here on Friday. 

He was speaking after inaugurating the branch managers conference of Vijaya Bank. The objective of the bank was to achieve a business level of Rs 76,000 crore and it aims at Rs one lakh crore business by March 2009, he said. 

Observing that the financial system was pursuing the best international practises, Mallya said few banking entities here were rated within the top 100 banks in the world. 

Commenting on the growth, Mallya said Indias economic growth was taking rapid strides. 

The GDP growth of over 9% will commensurate the growth in the national income, he said, adding that the sustained growth in foreign reserves, increased investment by Financial Institutions and increasing foreign direct investment (FDI) were fuelling this growth. 

He observed that tremendous growth witnessed in the service sector and industrial growth of over 13% should augur well for the bank. Mallya also spoke at length in the historical perspective of five major banks in the DK district. 

Referring to the performance of Vijaya Bank, he said the bank has achieved a record growth under deposit, advances and profitability fronts. He intended to set a direction for quality banking along with quantity.


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## Bushroda

*Etihad to expand India operations*
Gulf News Daily, Bahrain

Abu Dhabi: Etihad Airways plans to start services to Indian cities of Bangalore, Chennai and Hyderabad.

This follows the successful launch of its Kochi and Thiruvananthapuram services.

Services to Kochi and Thiruvananthapuram started at the beginning of June and since then passenger figures on both routes have averaged more than 90 per cent across economy and business class.

Etihad also operates daily flights to Delhi and Mumbai and it will look to boost its network further during the next 12 months as bilateral talks with the Indian government continue.

"India is one of Etihad's key global markets and the phenomenal success achieved so quickly by the Kochi and Thiruvananthapuram flights demonstrates the growing demand for our services," said Etihad Airways' chief executive James Hogan.

"Currently Etihad flies to four Indian destinations and ideally we would like to double this in the next few years in order to satisfy the huge demand from Indian customers across Etihad's flight network, which includes the UK, Canada and South Africa as well as the UAE," he added.

To celebrate the launch of the new Kochi flights a delegation of senior Etihad officials, lead by James Hogan, has visited the city. 

During the two-day visit the delegation hosted a reception as well as conducted several media activities.

Etihad Airways is the national airline of the UAE based in the UAE's capital, Abu Dhabi.

Currently Etihad offers flights to 44 destinations in the Middle East, Europe, North America, Africa and Asia.


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## Bushroda

*Travel in the lap of luxury: Maharaja plans big for direct US flights* 
P R Sanjai / Mumbai July 15, 2007 

*PLANE TRUTHS:* The Boeing 777 will feature new livery. 

Air-India is planning to provide a host of new value-added services on its non-stop flights to the US. 
Other than free pick-ups from airports, the airline will also provide onboard telephony and CCTV facilities for the first and business class travellers. 

The state-owned carrier, which will soon induct Boeing B777-200 LR aircraft for its non-stop service, has also drawn up plans to provide a series of in-flight entertainment for its passengers on the Mumbai-New York flights, starting August 1. 

Sources said Air-India would be taking delivery of Boeing B777-200 LRs by this month-end. &#8220;The aircraft would have wall-mounted satellite telephones that allow passengers to make calls to anyone, anywhere in the world while travelling. It would have landscape camera systems,&#8221; sources added. 

Industry players pointed out that the national carrier was positioning itself as a premium service with non-stop flights as various private players are eyeing the US destinations with advanced in-flight entertainment (IFE) systems. 

Recently, Jet Airways displayed its IFE systems on its Boeing B777 aircraft, which will fly to the US via Brussels in the three-class configuration. 

The new 238-seater aircraft has been configured with 8 seats in the first class, 35 in the business class and 195 economy seats. Each first class seat, designed for privacy, is 23 inches wide and has a seat pitch of 80 inches, which can turn into flat 31-inch beds. Executive class will have a privacy divider between seats. 

The airline executives said Air-India would be the first airline to offer its passengers the first class non-stop travelling experience between Mumbai and New York. 

The B777-200 LR will have mood lighting in addition to the main cabin illumination system, providing passengers with a greater degree of control over individual lighting. 

The airline is also offering the audio-video on demand (AVOD) system with 400 hours of video content in all the classes. The in-built audio jacks on every seat will be equipped with a special noise cancellation feature. 

Passengers will also be provided PC power and USB ports integrated into each seat to enable the use of laptops, keyboards and MP3 players. 

The new flights will significantly reduce travel time, with the airline planning to cover the Mumbai-New York route in 15.55 hours and the New York-Mumbai round in 15.15 hours. The flight duration is at least two hours less compared with the one-stop services offered by other airlines.


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## Contrarian

Bushroda said:


> *CEO racing to complete India's showpiece airport*
> The airport, expected to cost US$500 million, has been designed for 11 million passengers a year, up from the 5 million first planned, as traffic growth accelerated with an expanding economy.



Thats weird, the BIAL airport is an entirely new airport being built from scratch ! And it is a greenfield airport, and they are doing it for just around $500 mil??

The Delhi International Airport, was already there, and they are completely renovating it, and adding another terminal, and that is being done for over $1.2 Bil !!

Now how is it possible that its soo expensive in Delhi? Or are they making the Delhi Airport on a grand grand scale?


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## Bushroda

malaymishra123 said:


> Thats weird, the BIAL airport is an entirely new airport being built from scratch ! And it is a greenfield airport, and they are doing it for just around $500 mil??
> 
> The Delhi International Airport, was already there, and they are completely renovating it, and adding another terminal, and that is being done for over $1.2 Bil !!
> 
> Now how is it possible that its soo expensive in Delhi? Or are they making the Delhi Airport on a grand grand scale?



I suppose $500 million could be for the main terminal to make it operational. As the time goes other terminals would be added at additional cost.


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## Bushroda

*GDP of India expected to grow at 9.2 % in 07/08*
HULIQ, NC

Indian economy is expected to show a marginal decline in GDP growth to 9.2 percent in the current fiscal from 9.4 percent in 2006-07 with services sector and industry maintaining the momentum, CII has said.

According to the chamber, the agriculture sector would show a moderate three per cent growth, against 2.7 percent in 2006-07.

Industry and services sector are expected to grow at 9.4 percent and 11.2 percent respectively during 2007-08.

"On the whole, CII expects the GDP growth to be 9.2 percent during 2007-08, with agriculture growing at 3 percent, industry at 9.4 percent and services at 11.2 percent," the chamber said in its 'state of the economy' report.

The Indian economy had registered a 9.4 percent GDP growth in 2006-07, highest in the last 18 years, due to a stellar performance by manufacturing and services sectors.

In its quarterly analysis of economy for the Jan-March period, the chamber said in spite of appreciating rupee impacting exports, country's GDP grew at 9.1 percent primarily led by 19.35 percent growth in corporate earnings.

It said appreciating rupee had a negative impact on profits of textile and leather sectors during the fourth quarter with profit margin expected to erode further to 10.4 per cent during the next six months.

Service sector companies registered a 45.68 percent growth in profits compared to 10.32 percent growth in the corresponding quarter last fiscal. Manufacturing sector, however, reported a slowdown in profits during the quarter to 7.91 percent from 15.17 percent in Q4 2005-06.

The chamber, however, cautioned that the continuous decline in oilseed production could act as a hurdle to agricultural growth in the country.

Oilseeds production has declined by 14.79 percent in the quarter in India under review which is expected to further increase the demand-supply gap for edible oils.

CII pointed out on the need to restructure domestic pricing policy of various crops as farmers are switching from oilseeds crops to more lucrative alternatives like wheat and gram.


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## Bushroda

*India makes its global presence felt* 
By Walter T Molano 
Asia Times, Hong Kong

Although China dominates the business headlines, India is becoming a contender in the global marketplace. Initially focused on services, Indian manufacturers are joining the battle. Chinese manufacturing exports are six times as large as their Indian counterparts. However, India's manufacturing output is increasing at an annual pace of 7%. 

The auto-parts sector is where Indian manufacturers are having the most impact, entering the space vacated by US producers

when oil prices rose. As a result of the new opportunities, capital inflows are rising. In addition to foreign direct investment (FDI), portfolio investment is pouring in. At the end of May, the capitalization of the Indian stock exchange breached the US$1 trillion mark, putting it in the major leagues. 

The massive investment flows are creating some complications. The acquisition of imported equipment and machinery needed to modernize the country's capital stock is fueling a current-account deficit. Moreover, the capital inflows are putting upward pressure on the rupee, appreciating 9% year-to-date against the US dollar. However, the heavy pace of investment is propelling the Indian economy. The country's gross domestic product (GDP) grew 9.2% year on year during the first quarter of the 2007, making India an important player in the global marketplace. 

The rapid pace of GDP growth is creating inflationary pressures. India's inflation rate could finish the year above 6%, even though the official target is 4-4.5%. As a result, the Reserve Bank of India began tightening monetary policy. The move had a noticeable impact on lending rates, pushing mortgage rates to 12% from a low of 7.5%. Nevertheless, bankers reported no major reduction in mortgage applications. 

The impact was more noticeable in the sales of automobiles and durable goods, which increased year on year only 2.9% and 1.6%, respectively, in March. The insensitivity of the mortgage market to changes in interest rates reflects the country's tremendous housing deficit. Government officials hope that tighter monetary policy will dampen the annual GDP growth rate to a more sustainable 8%. 

The heady pace of economic growth is straining the India's infrastructure. Power blackouts are becoming a way of life in large cities such as Mumbai. Engineers estimate that the country will need to double its electricity infrastructure every five years for the next 20 years as it approaches consumption levels of more developed countries. India's per capita electricity consumption is one-third of China's and a twelfth of the United States'. 

The ravenous hunger for energy is also making India a major competitor for oil and gas. Self-sufficient only a decade ago, it is now an importer of energy. Indian energy demand is growing at double-digit rates, forcing its oil companies to search abroad for additional resources. Oil and Natural Gas Corp (ONGC) is actively scouring the world for new fields and exploration rights. 

The aggregation of the Indian juggernaut to the global economy will increase the overall demand for natural resources. Many people consider the commodity boom to be entering a mature stage. However, nothing could be further from the truth. The reincorporation of China and India into the global economic community after a hiatus of more than half a century is going to push commodity prices higher for the foreseeable future.


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## Bushroda

*Lifestyle funds: Will they be the next big story?*
16 Jul 2007, 0432 hrs IST,Madhu T,TNN

Lifestyle is a popular word these days. Your doctor associates it with certain ailments. Your insurance and investment advisors throw the word at you to persuade you to sign on the dotted line. No wonder mutual funds are hopping on the bandwagon: Kotak Lifestyle fund and Birla GenNext fund have been around for a while, and UTI's Lifestyle fund is currently open for subscription. 

As the name suggests, these funds will invest in firms that will benefit from changing consumption patterns in the growing Indian economy. Since many argue that consumerism is a key driver of Indian economy, this must be a great opportunity, right? Well, sort of. 

"The MF industry is really short of ideas," says Amar Pandit, director, My Financial Advisor. "They want to launch a new scheme every six months to raise the assets under management." However, he adds that unlike some recent schemes "which lacked a relevant theme, the lifestyle theme is quite nicely packaged." One mutual fund manager says, "Lifestyle is a very relevant theme these days. I think the sector would do really well as the economy accelerates." 

Simply put, such a scheme is somewhat like a diversified fund, except that it would refrain from investing in certain sectors, such as capital goods and information technology (IT). "Except for these exclusions, the portfolio of these schemes would look more like a diversified scheme," notes Pandit. 

So, should one invest in a lifestyle fund? 

Pandit argues that although the theme is appealing, you would be better off investing in a diversified scheme. Many financial advisors concur. They feel there is no point to investing in an almost-diversified scheme. "Excluding IT and capital goods is not a great idea. In fact, you will benefit from these sectors in a well diversified scheme," said a financial advisor who did not want to be quoted. 

So, if you are planning to invest additional money in a MF scheme, it makes more sense to choose an existing diversified scheme from a reputed fund house, which has performed well in the last five years. That would be a better and safer way to create wealth.


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## Bushroda

*Ad hoc relief for exporters* 
S Shivakumar, merinews 
16 July 2007, Monday 

_*It is high time the govt. realised that charity begins at home. Instead of lending to prosperous economies at dirt cheap rates of interest, it can finance its own exporters and importers at a competitive rate and accelerate economic growth. *_ 

ONLY RECENTLY I wrote (vide Cost of Export Credit Needs to be Reset) that the government of India (GoI) would typically meet the demands of our exporters (against the backdrop of the rising rupee) half way, say, by temporarily allowing higher duty drawback rates, higher duty entitlement pass book rates and a slightly lower cost of export credit. 

Well, if you go through the details of the Rs 1,400-crore relief package announced last week by the GoI for our exporters, you will realise that most of what I wrote has come true. I say most because GoI has allowed interest relief on export credit only in respect of nine identified sectors. You need not be a rocket scientist to predict GoIs reaction to such crisis situations. GoI comes out with remedies, that too ad hoc, only after it is swamped with SOS from exporters - not for it the rigmarole of finding a permanent solution to the vexed problem after carefully vetting the issues involved. 

As I said in the previous article, a fluctuating currency is the hallmark of a growing economy. Even the developed economies cannot claim that their currencies do not fluctuate  the highly export-dependent Japanese know this too well. But then you may be inclined to remark that their exporters do not crib whereas ours do. Your remark of course is right but for the cribbing part  it is not cribbing; it is a candid expression of a genuine grievance. Our exporters are not blessed with the same infrastructure advantage that they are blessed with.

To compensate our exporters, disadvantaged by an apology of an infrastructure, we should pass on to them the savings achieved on our imports (whenever the INR appreciates) in the form of cheaper funds. Our government generates at the most 1.5% (net of hedging expenses) on a part of the huge forex reserves that it invests in USD-denominated securities. Surely it can generate much more than that if it lends even a fraction of the said investment to our exporters and importers at 5%. It makes no sense for a poor country like India to lend to the worlds most prosperous country (USA) at 1.5% while denying a similar privilege to its own exporters and importers who contribute their mite to the countrys economic growth. 

It is difficult to believe if we are told that our economy lacks absorptive capacity especially when smaller economies like Vietnam can be comfortable with capital flows of up to USD 150 billion! Here I would not like to compare our absorptive capacity with that of China because such a comparison is cruel  after all, our interest rates are determined by the market. 

A permanent solution has to be found to this vexed problem since it is bound to arise fairly regularly in the days to come in the trillion dollar Indian economy. It is already believed in informed circles that the INR can appreciate to 35-36 levels vis-à-vis the USD. If the government believes that knee-jerk reactions can take care of the problem, then it is unfortunate. 

No problem is solved through ad hoc measures or by sleeping over it. Better tackle it head-on today. Tomorrow may be too late.


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## Bushroda

*Growth self-accelerating, says Reddy* 
BS Reporter / Mumbai July 3, 2007 

Yaga Venugopal Reddy, Governor, Reserve Bank of India, said there is tangible evidence of self-accelerating growth of the Indian economy.

"From an annual average growth rate of 3.5% during 1950 to 1980, the growth rate of the Indian economy accelerated to around 6% in the 1980s and 1990s. In the last four years (2003-04 to 2006-07), the Indian economy grew by 8.6%. In 2005-06 and 2006-07, it had grown at a higher rate of 9% and 9.4%, respectively," Reddy said while addressing the Central Bank of the Russian Federation on Monday.

Reddy added: "An important characteristic of the high growth phase of over a quarter of century is resilience to shocks and considerable amount of stability. We have witnessed one serious balance of payments crisis triggered largely by the Gulf war in the early 1990s. Credible macroeconomic structural and stabilization programme was undertaken in the wake of the crisis. The Indian economy in later years could successfully avoid any adverse contagion impact of shocks from the East Asian crisis, sanction like situation in post-Pokhran scenario, and border conflict during May-June 1999. Seen in this context, this robust macroeconomic performance, in the face of recent oil as well as food shocks, demonstrates the vibrance and resilience of the Indian economy."

According to the speech released by the RBI on its website today, Reddy also said there were signs of deceleration of credit growth recently.

"The acceleration of growth in the real estate sector has been reflected in the upward shift in the growth trajectory of credit extended by commercial banks, which in the past three years has been unprecedented in the history of the Indian economy. There has been some sign of deceleration in the recent period," he said.

Reddy repeated that the central bank expected economic growth of 8.5% in the fiscal year ending March 31, 2008, and wanted to contain inflation close to 5%.

Reddy also reiterated the stand of gradual reforms in the financial sector. "In view of the proven success of our overall approach to reform over the last fifteen years, there is considerable merit in pursuing the gradualist, participative and harmonious approach towards further reforms in financial and external sectors. Since it is generally accepted that financial and external sectors in India are reasonably strong and resilient, high priority is being accorded for further reforms in the fiscal sector, agriculture, physical infrastructure, especially in power and urban areas, and delivery of public services such as water, health and education.

"Progress in these sectors will help, over the medium term, enhance competitiveness and accelerate reforms in financial and external sectors, in a harmonious and non-disruptive manner, thus, reinforcing self -accelerating growth with assured stability."


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## alamgir

Neo said:


> *Alamgir,
> 
> Whats the point of posting old news when the thread is kept upto date in chronological order by Bushroda, Malay and myself on almost daily base? Please do not spoil it.
> If you're really interested in gaining knowledge or engaging debates or having a Q & A sessions you're most welcome to join us.
> 
> Sincerity is usually displayed in balanced posting, unfortunately all you've been doing is spreading negativity all around. I truely regret that!
> 
> Please take some time to think about it before making your next post.
> 
> Thanks,
> Neo*


 i read at least all posts which shows just one side of coin all my post not years old, and how can start a debate when a small portion of other side is not tolerable by mod. of pdf,sorry next time i will start my post with.....Saare jahan se achha Hindustan hamara


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## Contrarian

*India-Sudan ties may sour over OVL pipeline*


NEW DELHI: India's relations with Sudan appear to have got into a knot over a petroproducts pipeline in that country built by OVL, the overseas investment arm of ONGC.

After delaying payment of three installments towards the cost of the pipeline, Sudan's ministry of mining and energy is mum on clearing the next installment, that will become due on June 30, or paying interest for delayed payments.

OVL completed the 741-km pipeline connecting Khartoum refinery to Port au Sudan in August 2005, two months ahead of schedule, at an investment of $194 million. This included a $15 million component for financing of pumping stations etc. As per agreement with OVL, Sudan's ministry of energy and mining was to pay back investment in 18 half-yearly equated instalments of $14,134,790 each.

The contract also lists as the first option the provision of ONGC Videsh recovering the instalments by taking crude oil instead of cash. As per this clause, Sudan was to offer the oil three months before an instalment became due to allow ONGC Videsh to tie up shipping and supply or trading arrangements.

Oil ministry documents show Sudan has not kept its word and has not allowed OVL to exercise the option of taking payments. Of the three instalments paid so far, the first was delayed by two months, second by one month and the third by over four months. OVL is yet to hear on the next installment and interest claim due to delayed payment of earlier installments besides three claims made for additional work done as per Sudan government's demands.

After a series of meetings between ONGC executives, officials from Sudan's ministry of mining and energy, representatives of SPPC - the Sudan government-run company that executed the project and operates pipeline - promised in March that they will send within 10 days to government a proposal for settling OVL's claims of $47 million.

Nothing, however, moved and OVL took up the matter with top officials of Sudan's ministry of energy and mining in May and June, only to be greeted with silence from the other end.


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## Contrarian

*Corridor to pass via MP now*


NEW DELHI: Japan, which is partnering India in the Delhi-Mumbai Industrial Corridor, has agreed to let the $100 billion project pass through Madhya Pradesh giving a boost to industrialisation in the home state of commerce and industry minister Kamal Nath.

The Delhi-Mumbai Industrial Corridor (DMIC) Corporation, which will implement the 1,483-km project along the proposed high speed rail freight corridor, will be launched by Japanese Prime Minister Shinzo Abe and Prime Minister Manmohan Singh here next month.

Japanese are the key funding partners in the freight corridor project. Both the countries are keen to replicate the model for the DMIC project too.

"On my request, the Japanese have agreed to increase the expanse of the corridor to 250 km on either side of freight route bringing a large area of Madhya Pradesh in the project territory," Nath said.


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## Contrarian

There it is !!
Poltical leaders taking their age old routine again! Trying to make it past their home states!


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## Contrarian

*Govt ready with its own model of Temasek
*

NEW DELHI: The government and Reserve Bank of India are nearly ready with an indigenous model of Singapore's Temasek  a government-owned investment vehicle that will use foreign exchange reserves.

But unlike Temasek, the Indian company  that will be a special purpose vehicle registered either in Singapore or London to undertake wholesale banking activities  will only deal in loans and will not provide equity capital.

Besides, the focus will be on infrastructure and the SPV will provide loans to Indian companies that are buying equipment overseas or lend to domestic oil companies acquiring oil or gas assets overseas or building pipelines that terminate in India.

The only issue yet to be firmed up is the modalities for transferring money from RBI to the SPV. While law does not allow RBI to lend to the SPV, the finance ministry did not appear very keen on the refinance route suggested by the central bank since it could raise the cost of funds. Under this route, the SPV will have to first raise money to lend and then receive the amount from RBI. A third option is to let the SPV subscribe to bonds issued by RBI but even that appears to be a grey area.

"RBI has been asked to look at other options too since the idea is to provide low cost funds to Indian companies investing in building infrastructure," said a source.

For companies availing a loan from the SPV, debt will be treated as ECBs and would be subject to all norms applicable to ECBs, said a source.

By lending overseas, the government hopes to ensure that the problem of raising money supply into India is addressed.

But critics of drawing down foreign exchange reserve pointed out that the model does not help improve the state of roads or ensure better electricity supply.

Besides, it could not just affect Bhel and L&T's order book since companies would be able to raise cheaper funds overseas to buy equipment but could also result in the large international players shying away from investment in India.


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## Contrarian

This is great news !


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## Contrarian

*RBS to double India headcount
*

NEW DELHI: British banking giant Royal Bank of Scotland, which has countered its Barclays' takeover bid for largest Dutch bank ABN Amro, plans to double its India headcount to about 1,000 employees by the end of this year.

RBS, which has an India development centre at Gurgaon with about 600 employees currently, is aiming to tap the "world-class IT talent base" present in India to support its global operations.

"We have a robust long-term India strategy. We would be doubling headcount to about 1,000 people by year end. India has a world-class IT talent base and we would like to leverage this opportunity," RBS India Development Centre MD Gary Strain said.

RBS, the third largest bank in Europe, serves more than 35 million customers worldwide and its India centre develops business-critical technology applications for RBS Group.

"The roles (at India centre) are truly global and talent gets groomed to operate in a global environment. This coupled with a strong people development agenda positions us uniquely in the market," Strain added.

In a bid to boost its India operations further, the bank recently appointed Barclays's India co-CEO Madan Menon as the country head for its global banking and markets division. Menon would be responsible for building RBS' capabilities in fixed income products, syndicated loans, debt markets, risk management, acquisitions.

The investment banking sector in India has witnessed a makeover over the years. The scenario changed dramatically, with a remarkable rise in market trading volumes, growing number of mergers and acquisitions and international fund raising exercises by Indian companies.

Global financial giants such as UBS, Deutsche Bank, Goldman Sachs and Lehman Brothers are already present in the Indian investment banking market.


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## Neo

alamgir said:


> i read at least all posts which shows just one side of coin all my post not years old, *and how can start a debate when a small portion of other side is not tolerable by mod. of pdf,*sorry next time i will start my post with.....Saare jahan se achha Hindustan hamara



*I'm not quite sure what you meant by that, if you have issues with moderation please adress them with us or the Webmaster. 
You're free to share your pov, I asked you to do it in propper way and engage a mature debate instead of flooding the thread with negativity.

Thanks!*


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## Bushroda

*Traffic management plan ready for Mumbai Metro* 
Express News Service 

Mumbai, July 15: With construction of the citys first metro rail corridor set to begin at the end of the monsoon, officials are currently discussing a traffic management plan to ensure that motorists along the 11.4-km Versova-Andheri-Ghatkopar route are not inconvenienced by the digging work and slurry discharge. 

MVA, an American consultancy firm contracted by special purpose vehicle Mumbai Metro One Pvt Ltd, has completed the traffic management plan, said officials of the Mumbai Metropolitan Region Development Authority (MMRDA). In congested areas like the Andheri station, where construction will be a huge challenge, the plan entails deploying a squad of traffic wardens to help ease movement of vehicles. A detailed plan for diversions and barricading is also ready. Even slurry from digging is to be disposed off in fully-covered containers, with almost no sign of the activity on the part of the carriageway open for traffic. 

Planners at the MMRDA, the traffic police and other city organisations are currently discussing the plan. Once their suggestions are incorporated in the plan, it will be finalised, said a spokesperson for the MMRDA. The idea is that motorists should not be inconvenienced at all. 

Meanwhile, financial bids for the supply of rolling stock have been invited. Among the shortlisted companies are Bombardier (Germany), Kawasaki (Japan), Alstom (France) and Siemens (Germany).


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## Bushroda

*economic & strategic outlook - india* 
Al-Bawaba, Jordan
Posted: 16-07-2007 , 14:17 GMT 

*The Indian stock market grew at a CAGR of 37.5% over the past four years. The long-term view of the market remains bullish.*

Global Investment House Economic & Strategic Outlook-India - Stock Exchange - The Indian stock market continued its positive momentum since the past two years despite domestic and global pressures. The robust macroeconomic outlook coupled with encouraging policy initiatives by the government, buoyant investment climate, strong investments by FIIs, and impressive financial performance of Indian companies were the main factors that boosted the market sentiment in recent years. The buoyancy in stock market continued despite the inflationary pressure and hardening of interest rates. 

The Indian stock market grew at a CAGR of 37.5% over the past four years. The market, which witnessed a strong rally in 2005-06, continued its winning streak in 2006-07 as well. The BSE Sensex posted a return of 15.9% in 2006-07 on top of 73.7% in 2005-06. The S&P CNX Nifty also recorded a gain of 12.3% in 2006-07, over and above the gain of 67.1% in 2005-06. Though the market was up in 2006-07 there were some anxious moments which resulted in heavy selling pressure in the market. The market dipped to 9,920 level in Jan 2006 in view of the global concerns such as rising interest rates, high oil prices and likely slowdown in US economy. However, the market bounced back in subsequent months on the strength of buoyant Indian economy. The market recovered impressively by 21.4% to reach at the level of 12,043 in April 2006. However, within a month the market again faltered and dipped by 13.7% in May 2006 to reach at 10,399. Since then the market recovered gradually with benchmark BSE Sensex crossing 14,091 in January 2007. The global concern again forced the market to retraced back to 12,938 in February 2007, representing a decline of 8.17% in a month. However, with the positive news flow of strong industrial numbers, better corporate performance, and rising liquidity pushed the market again on a growth path with the Sensex rising consistently since then. The rally in the stock market during the last one year was spread across mid-cap and small-cap companies as well. The broad-based BSE 500 index increased by 35.8% on a point-to-point basis in May 07. The major sect oral indices registered gains during 2006-07 in line with the generally upbeat sentiment in the stock market.

*FIIs flocking to India*

With the unfolding of the India story, Foreign Institutional Investors (FIIs) evinced keen interest in the Indian capital market. FilIs flocked to Indian market not only from the traditional geographies like USA and Europe but also from the Middle East and Far East region. Number of FIIs registered with regulatory authority swelled to 1,047 as of June 22, 2007 as compared to 924 during the same period of the previous year. The cumulative FII investment in Indian stock market ballooned to US$53.6bn as of June 22, 2007 as against US$43.8bn in June 2006.

*India eighth largest IPO market*

As per the study conducted by E&Y, Indian companies raised US$7.23bn from the domestic capital markets in 2006, making the country the eighth largest issuer of equity capital in the world. Chinese companies raised a whopping US$56.6bn, which was the highest amount raised in 2006. China was followed by US companies with total proceeds of US$34.1bn, and Russian companies with US$18bn in raising funds. Worldwide IPO activity in 2006 raised total capital of US$246bn. 

*Market reasonably valued despite sharp run up*

The price-earning (P/E) ratio of BSE stood at 20.78x at the end of June 22, 2007 with a market capitalization of US$1,005bn. Despite an increase in stock prices, the price-earning (P/E) ratio remained generally attractive due to an increase in corporate earnings. We believe that as long as the index PEG is less than one, there is no need to fret over the market. Although the P/E ratio of the BSE Sensex is higher than other emerging markets, historically, the ratio is much lower as compared to its own high in the past. Some amount of premium to the Indian market is justified as compared to other emerging market since India is growing at around 9% p.a. and the growth momentum seems sustainable. The price-book value (P/BV) multiple of BSE stood at 5x at the end of May 2007. The dividend yield of the 30 stocks comprising BSE Index was 1.2% as of May 2007.

In the longer term, the market seems to be in a secular growth trend. However, in the short-term, concerns remain on higher interest rates, firm rupee and less liquidity. The liquidity is drying up in the secondary market in India on big issues, and bond investments, etc. On interest rate front, we believe that RBI is likely to keep interest rate rise on hold for some time. Currently, the Indian market is at fair levels and we see support at the 14,000 level. The major risk is that the higher interest rate environment could hit corporate earnings growth.

We are rather neutral on India right now. India has witnessed a very good run in recent months. But we are a little worried about it in the short-term, probably up until the end-July. There has been a huge surge of new issuance, which means the liquidity is likely to dry up. We have got interest rates that have moved higher and there are some questions about earnings. 

Currently, the Indian market is trading at a one year forward P/E of around 17x. The long-term view of the market remains bullish buoyed by the strong economy, rising income levels, huge investments in infrastructure, encouraging policy initiatives by the government, etc. If India can make a successful beginning with the proposed modernization of its pension industry, that will provide big boost to the Indian stock market.


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## Bushroda

*India tops consumer confidence index* 
Meenakshi Radhakrishnan-Swami / Mumbai July 17, 2007 

Consumer confidence is softening across the world but Indians remain the most upbeat. 

That is the finding of the ACNielsen Consumer Confidence and Opinions Survey for the first half of 2007, the results of which have been made available exclusively to Business Standard and published in The Strategist, the weekly management and marketing section, today. 

While all three indices (Indias, Asia Pacifics and the global index) have dropped two points, with 135 points, India is in the lead of both the 47-nation global survey (97 points) and the 14-country Asia Pacific study (96). The countrys 137 score in the October 2006 round of the survey was an all-time high. 

Conducted in April 2007, the survey covered over 26,000 people, including more than 500 people from India. Indians remain confident of the job market and personal finance: 94 per cent are optimistic about employment prospects, compared with the regional and global averages of 50 and 52 per cent, respectively. 

Indian consumers perceptions of the state of their personal finances is also encouraging: 90 per cent rate it as excellent or good (region: 54 per cent). 

The survey also polled consumers on their major concerns. Compared with the last round, there is a sharp rise in Indians concern over the economy, with 46 per cent citing it as a major worry. 

But fears of terrorism appear to have abated: in the last round, India was the most worried in the world about terrorism, with 31 per cent mentioning it as a major concern. 

There is a 15 percentage point drop this time and India is not on the top 10 list of worriers anymore. Across Asia, 41 per cent are concerned about the economy, compared with 37 per cent worried about health and 30 per cent about job security, lower than the global averages. 

The survey also studies how spare cash is used after covering necessary living expenses. 

Significantly, India moved down two places to become No 3 among those who invest in stocks and mutual funds even though more respondents (53 per cent) chose this option compared with the last round. Other popular choices remain savings accounts, holidays and new clothes.


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## Bushroda

*Obstacles Abound for Auto Builders in India* 
By NICK BUNKLEY
New York Times
Published: July 17, 2007

Automakers already struggling with intense competition in the United States and many other regions of the world have long worried about their prospects after China and India begin building large numbers of ultra-cheap cars.

But Chinese carmakers have experienced numerous setbacks to their global ambitions, and a new study of the Indian auto industry reveals more obstacles than many outsiders expected.

The study, being released today by I.B.M. and the Transportation Research Institute of the University of Michigan, notes that Indian automakers are plagued by a shortage of skilled workers, inferior product quality and deficient highway infrastructure, among other challenges. 

Its authors, who interviewed 30 high-level executives and automotive experts in India, are confident that the industry will surmount the impediments to make India one of the worlds top 10 vehicle-producing countries by 2015. But they suggest that the Indian car market remains in a fairly primitive stage of development.

Roads are the big problem, said Allan Henderson, senior managing consultant at I.B.M. Institute for Business Value. The infrastructure needs to be improved more than you might think. Theres a number of problems, but theyre aware of them and they know what it takes to overcome them.

Sales of passenger cars in India have more than doubled since 2002, to 1.4 million from 675,116, according to the Society of Indian Automobile Manufacturers, which represents 38 vehicle and engine makers in the country. Passenger car exports have nearly quadrupled in the same period but still were less than 200,000 in the last 12 months.

Future growth could be limited, however, by too few engineers and skilled trades workers. Although India is known as a home of plentiful low-cost labor, many workers do not have the qualifications that automakers there desire.

It was almost unanimous amongst the interviewees that this is a challenge they need to work on, said Bruce M. Belzowski, senior research associate in the Transportation Research Institutes automotive analysis division. We were under the impression, as most Westerners are, that India is an almost unlimited source of labor.

Even if carmakers are able to increase production, the study found that many consumers do not want to buy them because roads are in poor shape and congested. Motorcycles and other two-wheelers are the most popular form of transportation, outselling four-wheeled vehicles by a four-to-one margin.

Exporting is troublesome as well. Indian automakers have difficulty understanding foreign consumers, developing a range of models, managing global supply chain logistics and incorporating advanced technology, the study concluded. Additionally, Indian ports would need significant upgrades to handle high volumes of vehicles.

Theyre not ready for full-scale exporting, Mr. Belzowski said. 

The problems that Indian automakers are facing will not halt the industrys growth, but they will take time and considerable resources to resolve, Mr. Henderson said.

Ultimately, he said, it doesnt look like theres really anything that should stop the Indians from being major global players. They fully expect to be a powerhouse on the world stage.

The countrys automakers do have several important factors working in their favor: The Indian government is solidly behind their efforts, even drafting an aggressive mission plan for the industry, and Indian consumers generally want to buy vehicles made in their own country to support the economy. (In contrast, Detroits automakers often complain that they get little support from the United States government or from American consumers.)

As a result, executives interviewed for the study projected domestic sales to double to 2.8 million by 2010 and reach 4.2 million by 2015. Even then, just a small fraction of the nations more than 1.1 billion people will own cars.

India can assert some advantages over China, which has about 200 million more people and a fairly extensive road network. Auto loans are more widely available in India, making it easier for less affluent consumers to buy a car, and intellectual property is more respected in India than in China, where vehicle designs are often copied freely.


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## Bushroda

*India likely for surplus current a/c*
16 Jul, 2007, 2102 hrs IST, PTI

NEW DELHI: India would take some more time before it registers current account surplus on annual basis, though the country showed current account surplus in the last quarter of the previous fiscal, says a PHDCCI study. 

Simply put, current account surplus means that a country's exports of goods and services are more than its imports. 

"Though the current account surplus registered in the fourth quarter of 2006-07 helped in bridging the annual current account deficit to $ 9.6 billion, there is no conclusive proof that trend may set a new path," a statement from the chamber said. 

It said with appreciating rupee, the economy still has a high degree of pent-up demand for non-oil imports, particularly for the capital goods, which can widen the trade deficit. 

The imports for fourth quarter of last fiscal increased to $ 49.28 billion from $ 42.3 billion in the corresponding period last year. It is also reported that for May 2007 import growth was 26.36 per cent, vaulting the trade account deficit to 45.7 per cent. 

"The possibility of hardeni oil prices can create further take up the import bill, making achievement of current account surplus in the coming quarters a distant possibility," the statement added.


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## Bushroda

*600,000 Toyota Units in India by 2015*
Bangalore, India 7/16/2007 11:03 AM GMT 
TransWorldNews

India is Asia's fourth largest auto market and Toyota plans to increase its capacity in the nation by a factor of 10 by 2015. Toyota released their plans at a presentation by Atsushi Toyoshima. 

Toyota produces the Corolla sedan and the Innova near Bangalore and imports the Camry and Land Cruiser prado SUV. Toyota only has about 4% of the car market in India at this time. 

Toyota is not alone in trying to tap the populous country. Honda and General Motors also have similar plans. India's economy is growing and has led to a boost in vehicle sales. It is expected that India's car sales could rise to about 3 million by 2015.


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## Bushroda

*Giving investors picture perfect feel of goings-on* 
Bibhu Ranjan Mishra / Bangalore July 17, 2007 

Domestic firms are increasingly using audio- and video-conferencing solutions for investor relations calls. 

With increasing pressure from regulators to reach out to all investors, analysts and institutional buyers  both in India and abroaddomestic firms are now increasingly using integrated audio- and video-conferencing solutions for their investor relations (IR) calls. 

Video-conferencing technology helps people located in multiple places to see and listen to each other simultaneously via two-way video- and audio-transmission. Based on interactive telecommunication technology, it can also be used to share documents and whiteboards. 

The most important element in audio- and video-conferencing is that the entire proceeding is moderated, with absolutely no interruption during the meeting and presentation. This gives every participant a chance to ask questions and the benefit of that reply goes to everybody. 

A company can get the natural transcript of the proceedings, which reduces the chances of their presentations or quotes being misrepresented. 

Besides, most of the listed companies announce their results in a span of 15-20 days, which makes it difficult for the stakeholders, institutional buyers, analysts and funding agencies to attend the meetings physically. 

Diptarup Chakraborthy, Principal Analyst, Gartner India, says: Investor relation calls create more opportunities to meet companies more often. It helps us in closely monitoring the companies and also in reviewing their performance on a regular basis. As an analyst, IR calls help me in giving more authentic and genuine information to the market. 

While exact figures are hard to come by, industry observers say every year they have been noticing at least a 20 per cent increase in the use of audio and web platforms for IR calls. 

The quality of investors has seen a major change  from a standalone brokers market to a more institutional-based one which is dominated by mutual funds, venture capital funds and pension funds that feel comfortable in serious business discussions via audio- and video-conferencing, says Kiran Datar, MD of WebEx Communications India. 

Infosys Technologies was the first customer of WebEx in India for IR calls in 2000, after the company introduced its communication software in the Indian market. The last two years, however, have seen many old-world companies too starting to use the collaborative communication software for corporate governance. 

WebEx sources say they have seen at least an 80 per cent increase in many of these old-world companies using technology for IR calls. It handles at least 150 IR calls every quarter now. 

Some old-economy companies include Cairn Energy, DRL, Ashok Leyland, Apollo Tyres, ACC, Sterlite Industries, Patel Engineering, Ballarpur Industries, Dabur India, ABG Shipyard, Kohinoor Foods and Sri Renuka Sugar. 

Its absolutely a way to go forward. Instead of conventional methods of gathering analysts at one place, it allow the global audience to participate in the proceedings, says Swaminathan Krishnan, senior VP (Marketing), Sasken Communication Technologies. 

Yugal Sharma, country manager, India & SAARC, Polycom, says: In India, a number of organisations across the telecom & IT sectors are large users of conferencing. We see large deployment of voice and, more importantly, video solutions in industries like manufacturing and steel. 

Meanwhile, most of the telecom services operators in India including Tata Indicom, Reliance and Airtel have started focusing on providing conferencing solutions. Airtel recently introduced video-conferencing solutions for its enterprise customers. 

These days, there is a lot of demand for audio-video conferencing for investor calls and meetings. In fact, it is slowly occupying the top slot in our service. It constitutes the bulk of the scheduled meetings, claims Prakash Bajpai, CEO of Reliance Communications.


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## Bushroda

*More reforms needed for an upgrade*
17 Jul, 2007, 0336 hrs IST, TNN

MUMBAI: India still has a long distance to travel before it can hope to see a further upgrade in sovereign rating, although there has been a considerable improvement in the fiscal position, according to global ratings firm Fitch Ratings. 

Paul Rawkins, senior director, sovereign and international public finance, Fitch Ratings told ET that although both the Centre and state governments have managed to improve their fiscal positions marked by a reduction in the combined fiscal deficit from 10.1% in 2001-02 to 6.1% in 2006-07, yet the level of public debt is too high compared to other sovereigns, which the ratings agency tracks.  

We acknowledge that government finances have improved. But there needs to be a further improvement for a further upgrade, he said. Fitch upgraded Indias rating from speculative grade to investment grade last year. Senior officials from the global ratings firm are in India for their annual ratings review and will meet RBI and finance ministry officials. 

According to Mr Rawkins, Indias growth story would be sustained since it is not just a matter of cyclical upturn. There have been certain structural changes. The high growth rate of the economy should be an opportunity for the government to undertake more fiscal reforms, he feels. One notable feature is that there is awareness among the policy makers on the need for fiscal consolidation. There is a realisation within the establishment that the fiscal needs to be handled well and achievements on the fiscal front ought not to be frittered away. 

But there are limitations on slashing current expenditure because nearly 86% of it is accounted for by interest payments, he pointed out. Given the rigidities on the expenditure side, the government will be heavily dependent on buoyant revenues to deliver smaller deficits, he said. One has to make sure that revenues continue to grow. The way out is to spread out and generate more revenues, he said. Mr Rawkins like some other fiscal experts has made a strong case for widening the tax base. 

He also wants subsidies to be curtailed and for the government to spend more on infrastructure and social sectors. Mr Rawkins has also sounded out a warning. The mistakes made in implementing the recommendations of the Fifth Pay Commission should not be repeated by the Sixth Pay Commission since the huge pay hikes by the Centre had to be implemented by states which bloated their pension bills, resulting in further deterioration of state finances. In its recent report, Fitch had said that the combined  states and Centre  tax to GDP 

ratio has to be improved to 17.6% by FY10 from 15.8% in FY05. And the combined debt to GDP ratio has to be brought down to 75% from 82.5% during the same period.


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## Bushroda

*India Shining II? PM aide says jobs for all by 2010*
CNN-IBN
July 16, 2007

New Delhi: Worried over the spate of electoral reverses in various state Assembly elections, the Congress is going on what seems a hasty damage control. 

After its slogan of 2004 - Congress ka haath gareeb ke saath (Congress' hand is for the poor) - the party has now unveiled another trump card. 

As the countdown to General Elections of 2009 begins, Economic Adviser to Prime Minister Manmohan Singh, C Rangarajan says there will be employment for all by 2010. 

A study that I have done shows that by 2010, the labour force and the work force will almost be equal in the sense that there will be no unemployment even assuming a growth rate of 8 per cent. In fact the economy will grow at a higher rate than this. Therefore the question that remains is not so much of quantity employment as the quality and this will depend on improving the total factory productivity both in agriculture and unorganised sector, says Rangarajan.

But there is a rider.

They may still have an employment which gives them a level of income which is not equal to the level at which they can be taken out of poverty, he says. 

But as is the case most of the times, the Left allies have been quick to dismiss the claim and think the government is living in an illusionary world.

The growth pattern so far has suggested that the employment generation has always been much more than growth rate, says CPI-M politburo member Sitaram Yechury.

Opposition BJP  whose India Shining campaign spelled doom for the alliance at the Centre in the last Lok Sabha polls - has also been quick to raise a voice of dissent.

This is not inclusive growth, this is not equitable growth, says BJP leader Prakash Javadekar.

However, despite all the statements and claims, Government does admit employment would not be enough to lift the worker above the poverty line or improve his quality of life. 

This is because that requires skilled jobs in factories but over 60 per cent of the country still survives on agriculture. 

Whether the partys desperate attempt at its version of the India Shining will work or not is for time to tell.


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## Bushroda

*India: Greenfield Airports In India  A Case Study Of The Bangalore International Airport*
16 July 2007
Article by Sumeet Kachwaha 

_*Transcript of talk delivered by Sumeet Kachwaha at the Inter Pacific Bar Association Annual Conference; Beijing, 2007._

*Introduction and background:* 

When one looks at the current huzzle and buzzle around privatization of infrastructure in India, it is difficult to imagine that just about six years back, privatization was virtually unknown in India. The story started with the Road sector in the late 1990s but that too initially was not under the BOT Model. The project was funded by the Government through a 1% cess on diesel. Infrastructure bonds were floated where the Public Sector Corporations invested. It was only in this millennium that privatization, as properly understood was adopted as a Government policy.

*Why privatize?*

Look at the Airport sector alone. This sector has witnessed a growth of 35% on an average year upon year for the last six years (global growth is only about 9% per annum). The growth is fuelled by the robust economy and indeed infrastructure leads to economic growth thus completing the cycle. It is estimated that had the infrastructural gap not been there, Indias GDP would have been 2% higher per annum - and indeed would have been at about par with the phenomenal growth China has achieved.

Currently the airport infrastructure is totally inadequate. It is fairly common for flights to hover around airports due to congestion, waiting to get landing permission or waiting at the ground in the queue to take off. To give an idea of infrastructure gap, the Delhi Airport as of now has a capacity to handle 12 million passengers per annum but it is actually carrying 16.5 million passengers per annum, which is expected to grow to 20 million passengers by next year.

Airport modernization is therefore some thing which we could have done with as of yesterday. The Government cannot cope up with the demand - and hence privatization is necessary.

*Snap shot of the future:*

We have two "green field" airport projects where the concession agreements have already been signed. These are for the international airports at Bangalore and Hyderabad, expected to be completed next year. We have two "brown field" airport projects for Delhi and Mumbai to be completed by 2010. We are in the process of inviting bids for 6 more green field airports in metro cities and 35 brown field airports in the non-metro cities. So one can see what a happening sector this is currently in India.

*The Bangalore International Airport:*

In this talk, I propose to take up the Bangalore green field airport which was signed off by India in July 2004 as the model for our discussion. In fact the next concession agreement for Hyderabad which was entered into six months later was virtually on the same lines and these two are the only green field concession agreements signed so far. There is no "Model Concession Agreement" announced by the Government for future projects (though it is proposed to come out with one some time in the future). 

*Structuring:*

Though the concessionaire for the Bangalore airport is a private limited company, the Government through its agencies and instrumentalities holds 26% shareholding  (the break up being 13% by the Central Government and 13% by the State Government). This 26% shareholding ensures that the Government is able to veto certain "fundamental resolutions" which as per the Indian Companies Act require a minimum of 75% shareholders vote. For instance, issuance of new shares; change of directors; change of auditors etc. all require at least 75% shareholders vote. Hence the Government does retain some sort of control in the venture. Amongst the private players in Bangalore airport, Siemens of Germany have the majority 40%. Zurich airport holds 17%. 

*Description of the project:*

Let me begin by briefly sketching salient features of the Bangalore Airport. The site is situated about 29 k.m. from Bangalore and covers about 4300 acres. The airport design allows a second runway to come up in the near future with a separation distance of about 2 k.m. between the two run ways. The run way would be approximately 4000 mtrs. in length with a width of 60 mtrs. The airport would be at par with a world class international airport. 

A significant part of the project is permissible for "Non-Airport" activities. The concessionaire can develop up to 300 acres land commercially for any activity not connected with the airport. In this 300 acres the concessionaire is free to set up not only hotels or malls - it can even go for Special Economic Zones, manufacturing factories, country clubs, golf courses, power plant etc. Considering that this huge chunk of prime land comes to the concessionaire on a long term lease, virtually free of cost, it is easy to imagine that this would be the commercial backbone of the project.

*Nature of the concession:*

Basically the concession is for Development, Construction, Operation & Maintenance of the airport. The agreement allows the concessionaire to develop, construct, operate and maintain the Bangalore International Airport for a period of 30 years, extendable at its sole option for another 30 years (i.e. total 60 years). The land for the same is leased by the State Government. 

The concessionaire has the burden to independently evaluate the scope of the project and be responsible for all risks which may exist in relation thereto. It is obliged to follow good industry practices and all applicable laws.

The Government on the other hand, undertakes to support the project. Article 5.4 of the concession agreement states that in so many words: ("GOI acknowledges and supports the implementation of the project"). It further states that the Government of India will not take any steps or action in contradiction with the Concession Agreement which results in or would results in its shareholders or the lenders being deprived or substantially deprived of their investment or economic interest in the project. Further all statutory and non-statutory bodies under the control of the Central Government will act in compliance with the concession agreement as if they are a party thereto and the Government of India shall ensure that all statutory compliances as may be required in relation to the project are granted promptly. This is a unique feature of the Airport concession agreements In fact the concession agreements in the Port sector or Road sector do not have similar obligations on the Government. The Concession Agreement also insulates the concessionaire against competition by stating that no new airport would be allowed to be set up within 150 k.m. radius for a period of 25 years from the date of airport opening and further the Government of India will ensure that no other airport in India gets any unfair competitive advantage as compared to the Bangalore airport. Again a unique feature to be found in the airport concession agreements alone.

*Monitoring of the project:* 

It is provided that the Government shall not intervene in or interrupt in the design, construction, completion, commissioning, maintenance, monitoring or developing of the airport unless it is on account of national emergency or as per any existing law or for public safety. If intervention is on account of public safety, it shall be limited in time and for a period to be mutually agreed between the parties. The parties agree to set up a joint Co-ordination Committee comprising of representatives of the State and private parties to monitor the implementation of the project at all stages including post-completion.

The airport performance shall be monitored through passenger survey and as per the IATA Global Airport Monitoring survey standards.

*Charges which can be levied:*

As mentioned earlier the concessionaire is free to develop approximately 300 acres for non- airport activities (which indeed is to fund and finance the project). The charges here are not subject to Government control and will be free market driven. However Airport Charges i.e. which ultimately fall on the passengers shall be fixed with the approval of the Ministry of Civil Aviation. This would include passengers fees, landing charges, user development fees etc. These charges would be fixed on the basis of the current charges in place for other airports in India and shall be consistent with the International Civil Aviation Organisations policies on charges for airports.

*Heads of risks:*

Before we get into an evaluation and allocation of risks lets just pause and see what is the nature of the contract. We are not looking at an ordinary construction contract. Airports are not mere place for aero-planes to land or take off. They involve public interest, convenience and safety. Besides construction of airport building, ATC tower, administrative buildings etc. they can encompasses mini-townships, commercial areas, Special Economic Zones (modeled on Chinas experience) and indeed manufacturing factories, golf course, country clubs etc. Therefore the project is both mammoth and diverse. Then we are not only looking at a mammoth and diverse project - we are looking at it over a period of 60 years! 

How large is a period of 60 years in the life of a nation can perhaps be best illustrated if we consider that India was not even an independent nation 60 years back and indeed the history of civil aviation is probably not much more than 60 years. Unimaginable changes can and will take place in 60 years. So the public element; complexity and diversity of the project and the length of the concession agreement are all so vast, that it would be some what naïve to try and enumerate all risks associated with the project or indeed to try and address them through a contractual process of allocation of risks.

With this note of self  caution, I propose to briefly deal with allocation of risks in green-field airport privatization under the following 5 heads:

delays and consequences of delay in the airport opening; 

change in law and the risks involved therein;

termination of agreement due to default of either party; 

The role of the regulatory authority; and

dispute resolution.

*i. Delays:*

The target date for airport opening is stipulated as 33 months from the date of financial closure and from this date (i.e. date of airport opening) the concession period is to start running. In other infrastructure sectors like Roads or Ports, the concession period starts to run from the date of signing of the concession agreement. This is the greatest incentive and at the same time coercive measure to ensure timely completion of the project. For example, if the concessionaire is able to complete the project even before the target date of opening, it gets its reward automatically in the form of the extra concession period it "earns" for itself and if he delays it, he eats into the concession period and therefore the profits. One would have thought this to be a fairly sensible approach of reward and punishment. However in the airport sector one finds the provision for delays to be rather soft on the concessionaire. Firstly the 33 months period for completion can be extended by as much as six months if it can be shown that the delay was on account of failure by Government of its obligations under the agreement (surely a very vague ground for extension, which if invoked would probably end up in dispute). After the six months extension liquidated damages kick in which are around US$ 2250 per day (once again a fairly nominal amount one would think considering the public interest involved in expediting the opening). Further, if for another six months the airport does not open then it becoming an "event of default", which has its own cure period etc. Finally  it will lead to termination of the contract. This gives easily up to 2 years or so to a defaulting concessionaire to extend the deadline without having the project cancelled on account of delay.

One would think that where the total time for opening is 33 months, to allow such a large period before termination is perhaps not justified. 

*ii. Change in law:*

It is obvious that a concession agreement over a long period of time cannot guarantee against change of law. The concession agreement divides and treats the subject of change of law in two categories  the first is where a change in law entitles the concessionaire to some compensation and the second is where it does not entitle the concessionaire to any compensation.

The "no compensation" cases or case where the concessionaire is not entitled to any benefit on account of change in law are those which relate to any of the following 4 types of statutes. 

any non  Federal (or State) law 

any environmental law 

any labour law, or 

any tax law

Hence change of law under any of these statutes would not entail any compensation to the concessionaire for any loss which may be occasioned to it. In tax laws however there is a further refinement. If there is any tax benefit which is currently allowed to the concessionaire, it cannot be taken away by change of law without corresponding compensation. For instance, one benefit the infrastructure sector (including private airports) enjoy is a 10 year income tax holiday which can be availed of at any time during a 15 year period. Save for such current tax benefits, the Legislature is free to amend its tax laws to the detriment of the concessionaire and the concessionaire has no relief against the same. 

As regards the second category laws i.e. other than the above four, it is envisaged that if there is any change of law, which results in a financial loss or burden in connection with the development or operation of the airport and the affect to which exceeds over US$ 200000 in any given year, then the concessionaire may notify the Government and propose amendments to the contract so as it is put in the same financial position it would have been, had there been no such change in law. If the parties do not agree to the amendments necessary, the matter would be settled through the Dispute Resolution Mechanism. 

It would be noticed that this some what limited insulation against change in law is only in relation to "airport activities" and does not cover the "non-airport activities". More significantly it leaves it to the parties to hammer out an agreement as would suffice restitution. This is not very satisfactory, as typically Government bureaucrats are ill-suited and may be naturally reluctant to take upon themselves the delicate balancing act. There would be delays in decision making or decision making would not be free from controversy or it may be ad hoc and lack transparency and invariably it would be short of expectations. All this would lead to dispute. Perhaps a more efficient mechanism to deal with this may have been to set up Dispute Review Boards (DRBs) till such time as the Independent Regulator is in place.

*iii. Termination of the agreement due to default:*

The Agreement enumerates the "events" which would tantamount to "events of default" for either party. Once an event of default (as defined) takes place, a 120 days cure, period is stipulated in the first instance. If there is no cure a notice of termination may follow. Once notice of termination is issued, two consequences would follow: (i) Government would acquire the airport and all rights, interest and titles of the concessionaire relating thereto, and (ii) have the option to acquire and take over the non  airport activities. It is to be noted that the airport would be taken over even though the termination may be due to the Governments own default.

After take over of airport comes the issue of compensation. If it is the concessionaires default then the only compensation allowed to it is: (i) 100% of the outstanding debt and (ii) value of investment of the concessionaire in the non-airport activities taken over by the Government consequent upon take over.

If on the other hand, it is a Governments default (and yet the airport is taken over) then the compensation is more liberal. It includes: (i) the outstanding debt or "Settlement Amount" (as defined) whichever is higher. Settlement Amount would include the net current asset; gross fixed asset; intangible asset etc. (ii) value of investment in the non - airport activities which the Government decides to take over and (iii) damages.

*iv. Role of Regulatory Authorities:*

In infrastructure projects involving the public an independent regulatory authority has become necessary. Accordingly the Concession Agreement envisages that an Independent Regulatory Authority would be set up to regulate any aspect of the airport activity. Very vast powers are envisaged to be cast upon the Regulator. The Regulator would not only lay down or regulate standards, approve charges, impose penalties etc.  it would also settle disputes - not only between public and the Government and / or concessionaire in relation to the airport but also between the concessionaire and the Government.

Two points are noteworthy here  the first is that extremely vast powers have been cast upon the Regulator, to the extent which would ultimately lead to fading away of the parties contract. Ultimately the Regulator will be the bed rock on which would depend the fate of the project. The second point is that the Regulator is not yet in place. The draft for enacting the law in this regard is still at the discussion level with the Government. Once the Cabinet approves it, a Bill will be drafted and placed before Parliament, which will then be debated. It will go through several sub-committees of Parliament. So we are at perhaps 3 years or so away from the stage when an Independent Regulator is constituted. Further, the history of an Independent Regulator in India is not very encouraging. Roads were the earliest to go for privatization and it was envisaged that they would have a Regulator  but there is not even a draft Act in place here. Same is the story for Ports and Oil and Gas. The radio broadcasting sector has been privatized for about 15 years now but there is no Regulator there as well. In the power sector Regulators are there in the State as well as the Centre level but the track record is not very encouraging. In short, we are years away from setting up an Independent Regulator (ensuring foremost his independence) then providing for transparency, accountability etc. in its working. The nuances of airport governance through Regulators is yet to be worked out. What will be the regulatory philosophy has yet to be developed. There is yet to be consolidation and standardization in the field. The Government is still debating preliminary issues as to the constitution and composition of the Regulators. One set of thinking is that instead of multiple regulators for multiple sectors, we should have only 2 or 3 Regulators. One would for instance deal with all types of carriage e.g. roads, airports, ports and even transmission lines  the other would deal with electricity, voice data etc. Another theory is that energy, communication and transportation should be under one Regulator. It would seem that we are years away from having an independent Regulator as can fulfill the enormous and all compassing role visualized for it is under the Concession Agreement and till that happens there will be ad hoc decision making lacking transparency and leading to disputes which may hamper the growth and privatization in the sector. 

*v. Dispute resolution:*

Normally one would not except to hear about Dispute Resolution on the subject of risk allocation but here we have a some what unusual situation. The Concession Agreement envisages that Dispute Resolution shall be through ad hoc arbitration, under the UNCITRAL Rules and under the Indian Arbitration Act with the venue at New Delhi. This is of course not unusual by itself  as ad hoc arbitration is more common in India, compared to Institution arbitration. The peculiar feature in dispute resolution is that once an independent Regulator is put in place, the arbitration agreement shall stand overridden and disputes shall be referred to the Regulator. In other words, parties would no longer be able to go for arbitration. The only exception envisaged (to resort to the Regulator) is where sums are payable under an indemnity guarantee by the Government of India, to the concessionaire relating to Airport Charges (as defined). Here resort to arbitration is permissible (but not otherwise). There are two types of problems I envisage. First, international parties committing huge funds in a foreign jurisdiction will have far greater confidence in arbitration in a neutral country under the Rules of a neutral Arbitral Institute. This basic expectation is taken away under the airport Concession Agreement. The second issue is that once the Regulator is put in place (even if it is assumed that it would be independent and would efficiently deal with the disputes) it would naturally be subject to the hierarchy of the Indian legal system - which would mean that it would be subordinate to and amenable to the Writ jurisdiction of the High Court. Besides, writs by High Court, any decision of his can be appealed to the appellate authority. In short, one is therefore looking at three or four stages in dispute resolution. First, the decision by the regulatory authority, followed by decision of the appellate authority, followed by a Writ to the High Court followed by a discretionary appeal to the Supreme Court. Given the delays under the legal system, dispute resolution would become inefficient and expensive. Perhaps the Government should have segregated pure contractual disputes between the concessionaire and the Government and reserved these for international arbitration (which would have been as per the expectations of the international investing community also). The Regulator should step in only where public interest is involved. Dispute Review Boards should have also been envisaged in the Concession Agreement in a project of this type.

*Conclusion:*

To briefly conclude, India is firmly on the path of privatization in the airport sector. However the Concession Agreements do need a further in-depth look. Hopefully there would be a Model Concession agreement in the near future which would bring uniformity and address some of the issues which need a second look.


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## Bushroda

*Credit Suisse eyes 15pct in India Park Hotels - report*
Mon Jul 16, 2007 11:06 AM IST 

MUMBAI (Reuters) - Credit Suisse is buying up to 15 percent in Park Hotels for $50-$55 million, two newspapers reported on Monday.

Credit Suisse's real estate fund will acquire 10-15 percent in the hotel chain in a structured deal, the Business Standard said, citing sources close to the development.

The deal is expected to be announced on Monday, the Hindustan Times paper said, also citing sources close to the development.

A spokeswoman for Park said she had no information at this point. A spokeswoman for Credit Suisse declined comment.

The Park chain of luxury boutique hotels, part of the diversified Apeejay Surrendra group, has six properties in India.

Credit Suisse, one of the world's top investment banks, launched its domestic brokerage operations in India earlier this year and recently obtained its Indian merchant banking licence.

A booming economy and an expansion in tourism are boosting demand for hotels in India, where a shortage of rooms has resulted in some of the highest tariffs in the region.


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## Bushroda

*Monsoon tourism making a splash* 
Kalpana Pathak / Mumbai July 17, 2007 

The monsoon, which is traditionally seen as an off-season in the tourism industry, has taken off very well this year. 

Monsoon tourism, as it is known, has performed beyond the expectations of tour operators, garnering a 50 per cent increase in both in-bound and out-bound traffic. Last year, the industry saw an increase of only 15-20 per cent in monsoon tourism. 

While Goa and Kerala remain the top domestic destinations, West Asia is still a favourite with travellers heading for international destinations. Over the years, the number of international tourists visiting India during the monsoon, especially from the Gulf countries, has almost doubled. 

The Indian monsoon during June-September coincides with the summer vacations in the Gulf countries. Thus one can witness a steep increase in tourist inflow this monsoon, a Thomas Cook official said. 

Besides, there has been an increase in travel by the double-income-no-kids (Dink) group. These people believe in beating the rush and getting a truly relaxing holiday. As they do not have kids, they are not bound by the school holiday cycle and during this time they get quality holidays, adds the Thomas Cook official. 

Another trend visible this monsoon is the charters coming from Spain to Jaipur. SOTC Holidays has witnessed an increase of 30 per cent in initial bookings of its monsoon packages. While the season is still on, the travel major expects the bookings to go up further. The bookings might go up to what we call a high season, where people are ready to pay extra to go on a holiday, said Frederick Divecha, senior vice-president, marketing, SOTC. 

While Kerala, Goa, Madhya Pradesh, Sikkim and Meghalaya have already started cashing in on monsoon tourism by starting special monsoon packages, Mahrashtra Tourism Development Corporation, too, has had its cash registers ringing with tourists making a beeline for Lonavla, Khandala, Malshej Ghat and Karla. 

Tour operators see a surge in the number of bookings, with the marriage season also on in many parts of the country. 

With the marriage season on, a lot of travellers have done their holiday bookings for the second week of August. The destinations these newly-weds are looking at are South Africa and Mauritius for the affluent category and the Far East for the economy category, said the Thomas Cook official. 

On an average, based on the destination, the mode of travel and the accommodation chosen, a domestic holiday package would cost anywhere between Rs 12,000 and Rs 20,000 per head and an international holiday package would cost anywhere between Rs 20,000 and Rs 35,000 per head. 
--------------------------------------------------------------------------------

*MONSOON MAGIC * 

* Goa and Kerala remain the top domestic destinations 

* The Gulf countries are the favourite international destination 

* International tourists visiting India have almost doubled 

* There are charters coming from Spain to Jaipur


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## Bushroda

*Move to spur dollar outflows* 
JAYANTA ROY CHOWDHURY 

New Delhi, July 16: Faced with a problem of too many dollars and euros in the countrys kitty, the Congress-led government may work out a package to encourage outflow of foreign exchange through investments abroad. 

Rules allowing funds to invest abroad may be relaxed further and a limited number of treasuries and brokers may also be allowed into the field.

It is also likely to place checks to see most of external commercial borrowings or foreign currency loans that companies raise abroad are spent on purchase of assets such as firms or mines abroad or on import of capital goods or raw material.

*Indias forex reserves have already swollen to $215 billion, and is being forecast to increase by another $40 billion by the end of this year. Net FDI inflows may top to $15 billion, almost double of last year's $8.4 billion.*

A top official said the North Block would work out fresh relaxations for mutual funds who are already allowed to invest a portion of their funds abroad. 

In May, the aggregate ceiling for overseas investment by mutual funds registered with capital market regulator Sebi was increased from $3 billion to $4 billion.

Former RBI governor and head of the Prime Minister's panel on economy, C. Rangarajan, also said the government would work to limit the conversion of external commercial loans into rupee funds by companies that use this money for a variety of reasons within the country. 

ECBs should be used up abroad to buy assets there or in procuring capital goods.

India Inc, however, isnt much enthused by the new thinking on ECB utilisation and pointed out that with interest rates at a high in India, many would naturally tap foreign markets for cheaper loans, part of which would be used as working capital.


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## Bushroda

*India Now festival kicks off in London*
Katie Allen, Guardian Unlimited
Monday July 16, 2007

It has banks, energy companies and car makers listed on the London Stock Exchange, is second only to the US for inward investment projects into London and its filmmakers shot 40 major productions in the capital city last year.

These are three facts about Indian business that Ken Livingstone wants Londoners to take away from a festival starting today. The London mayor's office kicks off the three-month India Now season by sailing a replica of the Taj Mahal on the Thames. The festival aims to cement London's strong ties with a booming Indian economy. 

"This year India is our target," says John Ross, the mayor's economic advisor. "In 10 years' time the Indian influence in London will be twice as big as it is now, at a minimum." 

According to statistics the city has put together for India Now, London alone accounts for a third of India's rapidly rising overseas investment in Europe. There are far more Indian companies listed on the London Stock Exchange than in New York and there are more than 10,000 Indian-owned businesses in London employing almost 50,000 people. 

"The perception of the average Londoner might be of curry houses and call centres but coming down the line are global IT players, pharmaceutical firms, steel producers and car makers," says Mr Ross. London has sought to become the global base of choice for Indian companies by highlighting a common legal framework and a useful time zone. 

Such advantages combined with the city's status as a media hub were behind a move to London by India's largest post-production company Prime Focus. The visual effects specialist bought a controlling stake in UK post-production group VTR last year and now employs 250 people. "Our whole plan is to use VTR as our vehicle for global growth, " says Prime Focus boss Parvinder Bhatia. 

Prime Focus post-produced Bollywood film Chak de India, starring Shahrukh Khan as a girl's hockey team coach, which forms part of the India Now season.


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## Neo

*Unemployment in India will be wiped out by 2010: PMs advisers​*  

By Iftikhar Gilani

NEW DELHI: Prime Minister Manmohan Singhs economic advisors claimed on Monday that unemployment would be completely wiped out from the country by 2010.

The economic advisory panel, headed by former Reserve Bank of India (RBI) governor Dr C Rangarajan, made this bold prediction citing the current economic growth rate, which it expected to remain at around 9 percent in the current fiscal year.

In its economic outlook for 2007-08, the panel also projected that inflation would remain around 4 percent. After factoring in future correction in petroleum-product prices, it should be possible to maintain the headline rate close to four per cent. 

Asked what the basis of his claims that unemployment would be wiped out were, Dr Rangarajan responded that with GDP growth rate of eight percent, keeping in view employment elasticity at 0.48, the work force would become equal to the labour force demand by 2010. 

He did, however, add that he was only projecting figures in terms of quantity and had not taken quality employment into account.

There appears to be a skills mismatch in the economy that needs to be urgently addressed in order to enable a smooth transfer of employment from agriculture to the secondary and tertiary sectors of the economy, which is necessary to realise the figures, he told reporters.

The new challenge facing the Indian economy is improving productivity in the informal sector and in agriculture so that there can be a significant improvement in the quality of employment, Rangarajan said.

On the export front, the advisory council expected exports to touch $147 billion, less than the government target of $160 billion. Imports are projected to cross $223 billion. Exports growth is expected to slow down to 18 percent in dollar terms in the wake of the strengthening of the Indian currency against the greenback.

The panel projected that foreign direct investment (FDI) would increase to $15 billion in 2007-08 from $8.4 billion in the last fiscal year. Net portfolio inflows are estimated at $12.5 billion. For 2007-08, it projected an increase in net FDI inflows from the current level of $8.4 billion to $15 billion.

http://www.dailytimes.com.pk/default.asp?page=2007\07\17\story_17-7-2007_pg7_52


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## Bushroda

*India Expects to Link Every Village to Phone Networks This Year* 
Bloomberg News
By Ashok Bhattacharjee

July 13 (Bloomberg) -- India expects its villages to be connected to telephone networks two years ahead of schedule as part of a $43.5-billion spending plan that seeks to create the infrastructure necessary to support economic growth. 

Telephones will reach the 66,822 villages that don't already have one by November and broadband connections will be provided in every village by 2012, according to an e-mailed statement issued today by Prime Minister Manmohan Singh's office. Singh yesterday reviewed the progress of roads and telephones in the so-called ``Bharat Nirman'' or nation-building program. 

The government headed by Singh, who is often described as the architect of India's economic reforms, plans to spend $43.5 billion by 2009 to build roads, schools, hospitals and other social projects. Singh wants the benefits of economic growth to spread to rural areas, where about seven in 10 Indians live. 

``It was noted the performance of extending telephony to the rural areas was progressing extremely well,'' according to the statement. 

South Asia's largest economy expanded 9.4 percent in the year ended March 31, the biggest gain since 1989 and more than the government's initial estimate of 9.2 percent. The growth has spawned a new set of customers for cars, mobile phones and consumer goods in India, where increasing signs of affluence are visible in the urban centers. 

*Middle Class* 

The middle class in India, people earning from $4,545 to $23,000 a year, has tripled to 300 million in the past 20 years, according to the National Council for Applied Economic Research. 

The program has connected 48,125 villages to the national telephone grid, according to the statement. About 80,000 towers will be set up by May 2008 to help provide wireless services. The government plans to add 50 million rural phone subscribers this year. 

Singh also assessed the implementation of the rural road project, in which all-weather roads have so far connected 13,831 of the targeted 66,802 villages. 

As part of the program, 40,000 kilometers of new roads have been built and 50,000 kilometers of roads have been improved, according to the statement. 

The Bharat Nirman project aims at ensuring safe drinking water supply in some 55,000 villages that are without it, providing electricity to 100,000 villages that don't have power supply, extending irrigation to an additional 10 million hectares and building 6 million houses.


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## Bushroda

*India to dominate global KPO mkt; create 1.8L jobs*
17 Jul, 2007, 1555 hrs IST, PTI

NEW DELHI: India, already known as the back office of the world, will account for two-third of the global Knowledge Process Offshoring (KPO) segment that could create up to 1.8 lakh new jobs here by 2011, a new study has said. 

The worldwide KPO market is expected to grow to 16.7 billion dollar in revenues by 2010-2011 at an annual growth rate of 39 per cent. Of this, India would account for 11.2 billion dollars, according to the study by business research and analytics firm Evalueserve. 

The industry would employ about 3.5 lakh professionals by March 2011 globally. This includes nearly 2.55 lakh in India, where only about 75,400 people are currently employed. 

According to Evalueserve, the KPO industry in India had only 9,000 billable professionals in India, generating revenue of 260 million dollars during 2000-01. This number has grown to 75,400 by 2006-07 with 3.05 billion dollars in revenue at an annual growth rate of 51 per cent. 

The anticipated success in KPO comes after the success of Business Process Outsourcing (BPO) in the country, which accounts for revenues of 15.8 billion dollar in 2006-07, a jump from just 7.7 billion dollar in 2003-04. 

This huge growth in the global KPO space would be driven by the vast pool of educated and experienced professionals in countries like India, China, Russia, Poland, the Philippines, Hungary and many republics from the erstwhile Soviet Union, California-based Evalueserve's Chairman Alok Aggarwal said. 

It is quite likely that companies -- both with their own captives and those using third-party vendors -- may use a "hub and spoke" model in which a provider in India may constitute the "centre" whereas other units in the world may provide appropriate "spokes", Aggarwal said.


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## Bushroda

*Private equity investment jumps 68% in Q2*
17 Jul, 2007, 1640 hrs IST, REUTERS

MUMBAI: Private equity investment in India jumped 68 per cent in the second quarter of 2007, with the financial services grabbing the lion's share, an industry tracking firm said on Tuesday. 

Investment rose to $3.2 billion during April-June, data released by Venture Intelligence showed, from $1.9 billion in the year-earlier period. 

There were 76 deals in the quarter, up from 67 a year earlier. The financial services sector accounted for 15 deals worth about $1.3 billion. 

The largest was a $767 million investment by Carlyle Group and Citigroup in India's largest mortgage firm, Housing Development and Finance Corp. Technology and related sectors had more than 25 deals, but they were worth only $550 million. 

Manufacturing did not figure in the top five, Venture Intelligence Chief Executive Arun Natarajan said. "We are all puzzled, manufacturing was number-two for a long time until the first quarter of 2007," he said, adding a third of manufacturing deals had earlier been in the auto parts sector. 

Private equity investment in India is expected to touch about $10 billion in 2007. Investment had more than tripled to $7.46 billion in 2006 from $2.26 billion in 2005.


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## Bushroda

*Sienna Miller, Bollywood star promote Indian energy conservation* 
Alastair Grant, USAToday 

*The Factory Girl's Sienna Miller has combined forces with Bollywood's biggest movie star to raise global warming awareness throughout India. *

Sienna Miller teamed up with Bollywood star Amitabh Bachchan on Tuesday to urge Indians to do more to slow global warming.

The 25-year-old actress met Bachchan in Mumbai at the start of a week-long trip to India as an ambassador for Global Cool.

"If each one of us does our bit, we will be helping to keep global warming from harming our countries," Miller said.

Bachchan, India's biggest movie star, announced that the Indian International Film Academy would partner with Global Cool, an organization that spreads awareness about global warming, to increase knowledge about greenhouse gas emissions.

"Carbon emissions will be huge from countries like India and China with growing populations and economy," Bachchan said. "It will be wise to start doing whatever we can to protect our planet."


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## Bushroda

*India: competition is powering Indian economy*
FreshPlaza, Netherlands

It is competition and not population which is powering the country's economic development, Dr JJ Irani, director, Tata Sons, said on Saturday.

Delivering the MS Khan Lecture here, Dr Irani said in his opinion, the economy was being 'powered by a competitive spirit since 1991'.

"Before that we were a protected economy, and there was no competition," he said, adding that prior to 1991 Tata Steel used to exchange knowledge with SAIL and others without being competitive, and used to take pride in telling what it was doing. "This no longer exists today."

The Tata Sons director recalled the times when customers had no other choice but to bear with poor-quality products and inefficient services.

"We had captive markets and poor quality products to satisfy our customers, including in steel," said Dr Irani, adding that once competition was introduced in 1991, it started helping the Indian entrepreneurship skill to grow.

The country had to pay a big price as India's contribution to the world trade was a mere 0.5% before 1991, Dr Irani said.

Praising Jet Airways, one of the best domestic airliners in the world, Dr Irani said it is competition, which has brought it into existence.

It is also competition that has driven Indian Airlines to improve its services. So is the case with BSNL in telecommunications, where private players are constantly forcing the company to improve its services, Irani said.

According to him, what is driving 'competitiveness' today is knowledge power unlike pre-1991 period, when foreign companies possessing technology in any field were eager to sell it to their Indian counterparts as they had no direct access to the market.


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## Bushroda

*New skill upgrade programme for Indian workers*
17 Jul 2007, 2123 hrs IST,IANS

NEW DELHI: Indian workers will now have an opportunity to improve their skills before emigrating abroad for job, thanks to a countrywide skill upgrade programme the government will roll out soon. 

The Ministry of Overseas Indian Affairs (MOIA) signed a memorandum of understanding (MoU) with the Ministry of Micro, Small and Medium Enterprises (MMSME) on Monday to institute a process to develop and upgrade skills of Indian workers desirous of emigrating overseas for the purpose of employment. 

Both ministries will work towards developing a framework to benchmark, assess and certify Indian workers seeking employment abroad. 

"The programme is likely to be launched in August across the country," an MOIA official said. 

According to an MOIA press release issued on Tuesday, this initiative aims to enhance the image and perception of Indian workers abroad and equip them to be more competitive in an international working environment and promote greater job opportunities for Indian workers. 

The programme will also help overseas Indian workers move up the value chain. 

According to the MoU, while the MOIA will fund the training programme, the MMSME will implement it through its training centres across the country. 

In fiscal 2007-08, the target will be to train approximately 2,000 emigrant workers in various trades such as electrician, machinist, computers, electronics, welding and plumbing for jobs, mostly in the Gulf countries. The focus will be on the manufacturing and construction sectors. 

The duration of the various courses will vary from 15 days to three months. 

The MOIA is planning to spend around Rs.90 million on the scheme in partnership with other institutions, the release stated. 

The ministry had organised a similar programme in 2006-07 with the governments of five states - Tamil Nadu, Andhra Pradesh, Karnataka, Kerala and Punjab - which all are major labour suppliers. 

"We gave funding for training of around 40,000 workers in last year's programme," the official said. 

There are over five million Indian workers abroad with 90 percent of them based in the Gulf countries and Malaysia. In 2006 alone, over 675,000 Indian workers went abroad with emigration clearances. 

They contribute significantly to Indian economy by way of remittances. 

However, in recent times, competition from countries like Bangladesh, Nepal, Pakistan, Sri Lanka, Indonesia and the Philippines has resulted in low wages and exploitation of workers. 

It was in this context that the government decided to intervene and help Indian workers with the skill upgrade programme.


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## Bushroda

*India can attain 10% growth in 2008-09: FM* 
Business Standard
New Delhi July 18, 2007 

Finance Minister P Chidambaram today expressed hope that the economy would be able to grow at 10 per cent next year if productivity in agriculture is improved. 

Our goal is to touch the magical number of 10 per cent growth. Can we do it this year? I am doubtful. Can we do it next year? I think it is possible. If we can get our act together and push agriculture growth to 4.5 per cent, then India can grow at 10 per cent in 2008-09, Chidambaram said at the India Policy Forum, 2007, organised by economic think-tank NCAER. 

Earlier during the day, talking to mediapersons after a meeting with chief commissioners of income tax, the minister expressed confidence that the revenue deficit would be eliminated by 2008-09. 

This is a key deficit management target under the Fiscal Responsibility and Budgetary Management (FRBM) Act. 

A report by the Prime Ministers Economic Advisory Council had on Monday said the central governments revenue deficit is unlikely to be eliminated by 2008-09. 

It had also pointed out that there are substantial off-budget liabilities aggregating 2 per cent of GDP, and potential expenditure increase, after the Sixth Pay Commission makes its recommendations. 

When asked about this, Chidambaram said the report did not say the target would not be met, but only mentioned the difficulty in achieving the target. 

There is a subtle difference between difficult to meet and would not be met. We have been right so far (in meeting the revenue deficit target). There is no reason why we should be wrong next year. 

The revenue deficit stood at 2 per cent of GDP in 2006-07 and is to be cut to 1.5 per cent of GDP in the current fiscal year. 

The FM said the government would soon issue guidelines on determining fair market value of stock options given by companies to their employees for calculating fringe benefit tax (FBT). 

Guidelines (on fair market value) would be issued shortly, he said. Chidambaram denied there was any ambiguity about taxing employee stock options (ESOPs). 

Ruling out any extension of the date for submitting income tax returns, he asked the taxpayers to file their returns by July 31. 

I suggest you file (I-T returns) today. Dont wait until the last day. Please file today, he said, when asked whether the government would consider extending the date for filing of returns by individual taxpayers. 

Also, the government may not allow taxpayers to submit returns through post offices this year. 

Well, it may not be necessary this year. Last year was an extraordinary situation when there was threat of labour dispute. But no decision has been taken yet, he said. 

At the NCAER function, Chidambaram said it was unfair to compare India and China. 

We have to work within the boundaries of democracy and hence we have to make adjustments. We have larger concerns. It is within these rules that one has to play the game.... I think Indias 9 per cent growth is comparable to Chinas 10 per cent. 

Indias growth is now driven more by investment. Indian industries and services sectors are trying to extract more value from each rupee invested. That is driving productivity gain in the Indian economy, Chidambaram added.


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## Bushroda

*Tea-drinking India warms to coffee house culture*
*A burgeoning middle class is rapidly developing a taste for the roasted bean - and Starbucks is taking notice*
SONYA FATAH
Special to The Globe and Mail
July 17, 2007

NEW DELHI -- Among hot beverages, India is synonymous with just one: tea. But a lifestyle revolution driven by a burgeoning middle class is luring young Indians to cafés where cappuccinos, lattes and mochas are the drink of choice.

South Indian-style coffee - boiled with milk and served in stainless steel tumblers - has long been sipped in India's southern states of Karnataka, Tamil Nadu, and Kerala. But a new coffee-drinking culture has emerged since India's plantation owners have crept into the café business, launching a cultural revolution that has seeped into India's urban centres.

Today, there are about 750 cafés across India, two-thirds of which are owned and operated by Café Coffee Day, a company that plans to have 1,400 cafés across India in five years' time, as well as 10 in Pakistan and 10 in Austria.

"I expect this market to grow 40 per cent annually for the next three years," says Jagdeep Kapoor, director of Samsika Marketing Consultancies. "That is going to be huge."

In the next two decades, analysts expect there will be as many as 5,000 cafés in India.

It's taken a decade for India's largest chain to create a café culture. 

There were only a handful of Café Coffee Day outlets in the late 1990s, all in India's six largest cities. But the chain, which is owned by the Bangalore-based Amalgamated Bean Coffee Trading Co. Ltd., has mushroomed since 2001, now boasting 401 cafés in 72 cities and aiming to cross the 500 mark by the end of the year.

India is also attracting global attention. Starbucks Corp. is eyeing New Delhi or Mumbai for its first outlet. Italian coffee company Lavazza is already here, after acquiring Barista Coffee Co. Ltd. 

Starbucks is keeping mum about its strategy in India, as it navigates strict Indian laws on foreign ownership in the retail sector.

"We are looking forward to offering the finest coffee in the world, handcrafted beverages, legendary service and the unique Starbucks Experience to customers in India, first in either Delhi or Mumbai, in the near future," T. May Kulthol, a company spokesman, said in an e-mail.

But other players in the coffee sector are watching the global giant closely, amid speculation it may buy an Indian chain to gain a quick footing.

"They are scared of us. We are not scared of them," scoffed Naresh Malhotra, director of Café Coffee Day. "Let them come in. It will make for a greater awareness for coffee."

Café Coffee Day must also worry about another giant, Tata Coffee Ltd., which sold its share in Barista to the Italians and is developing its own brand, Mr. Bean Coffee Junction. From its first test location in the southern city of Kochi - near India's famous plantation country - Tata plans to expand the concept to five stores in Bangalore, Chennai and Hyderabad. 

"If these stores are a success, then we will go in for a franchise model and rapidly expand," said M.H. Ashraff, managing director of Tata Coffee. 

The company is the country's largest coffee conglomerate, producing 10 million kilograms of coffee from its estates, spread over 7,000 hectares in Karnataka state. Café Coffee Day's parent company, Amalgamated Bean, sources coffee from the 5,000 acres of coffee plantations it owns in the south.

The market, analysts say, has space for all. With a forecast of a 6- to 9-per-cent annual real growth rate in gross domestic product over the next two decades, the value of the Indian consumer market is expected to triple as a result of productivity increases, growing openness of the Indian economy and demographic changes, according to a report released by McKinsey & Company.

India's big cities are expected to boom in the next three decades. Analysts forecast that the country could have as many 35 cities with a population of over one million, and 300 smaller metros, with 100,000 to one million people each.

Coffee plantations were started in Southern India around the 18th century when the East India Co. discovered it could profit from growing the plant in its eastern colonies. Some even trace coffee's heritage to a few centuries earlier.

Today, most of India's coffee - about 60 per cent of it - is grown in Karnataka, in the country's south, along the slopes of the Western Ghats range.

Analysts say the café culture change is less a reflection of a coffee drinking culture and more about a lifestyle revolution.

"On-premise consumption has increased substantially. There is a lot of young culture - a lot of college students and a lot of student kids would like to hang around and there was no such wholesome place available," Mr. Kapoor says.

*Coffee in India*

Popular Indian lore says that 

Baba Budan, a revered Muslim holy man from India, discovered coffee on a pilgrimage to Mecca in the 16th century. He smuggled seven coffee beans out of the 

Yemeni port of Mocha wrapped around his belly. On his return home, he settled on the slopes of the Chandragiri Hills in Kadur district, or what is now Karnataka. The hills of this famous coffee-producing region were later named after him.

*Indian latte*

Kaapi is a sweet milky coffee made from dark roasted coffee beans and chicory, popular in the southern states of Karnataka and Tamil Nadu. The most commonly used coffee beans are Peaberry, Arabica, Malabar and Robusta grown in the hills of Kerala, Karnataka and Tamil Nadu.

578,000 - Number of people employed in Indian coffee industry

201,498 - Mega-tonnes of Indian coffee exported in 2005-2006


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## Bushroda

*Now, foreign cos scoop up India funds*
18 Jul, 2007, 0140 hrs IST, TNN

NEW DELHI: Government on Monday liberalised rules for foreign companies to raise money from Indian capital market by issuing Indian Depository Receipts (IDRs). 

The move is designed to facilitate greater outflow of capital from the domestic economy thereby easing the upward pressure on rupee and prepare ground for the emergence of an international financial centre in India. 

Although India had created a policy regime for IDRs, the Indian equivalent of GDRs and American Depository Receipts, in 2004, no foreign company has raised any capital in India using this instrument. 

The latest amendments to the Companies (Issue of Indian Depository Receipts) Rules, 2004, has extended the limit for an overseas firm to raise money from India in a financial year from 15% of its paid-up capital and free reserves to 25% of the post-issue number of equity shares. 

The eligibility condition requiring the issuer to be profit making for at least five preceding years has been changed to three out of five preceding years  the condition in this regard for domestic issues. Further, the requirement of declaring a minimum dividend for last five years and a minimum 2:1 debt equity ratio have been omitted. 

Such criteria cannot be applied across the board as these are specific to individual companies who follow different dividend policies in their respective jurisdictions, the ministry of corporate affairs said in a statement. However, the new rules require that a foreign company wanting to raise money in India through IDRs should have a continuous trading record on a stock exchange in the parent country for at least three preceding years. This will ensure that issuer is a known entity. 

Also, net worth and market capitalisation ceilings have been provided for as eligibility conditions instead of net worth and turnover-based ceilings. The turnover criteria may not disclose the profitability or the market perception of the issuer. The new norms have made Sebi approval of IDR applications time bound. 

The disclosure norms have also rationalised. The requirement of publishing quarterly audited financial results in newspapers, has been done away with. Quarterly audited results or unaudited results may be subjected to limited review by the auditors of the issuing company and disclosed after its board approval. 

The manner of publication has been left to be specified in the listing conditions to be decided by the Indian stock exchange as per Sebis guidance. Information on listing, trading record or history of the issuer on all the stock exchanges in the world would also be required to be disclosed in the offer document.


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## Bushroda

*India to grow at 9.4 pct in FY08 - Credit Suisse*
Tue Jul 17, 2007 5:56 PM IST 

MUMBAI (Reuters) - India's economy should expand by 9.4 percent this financial year, higher than official estimates, though inflation and interest rates were likely to rise too, a senior economist with Credit Suisse said.

The central bank forecasted the economy will grow by around 8.5 percent in 2007/08, and the Prime Minister's Economic Advisory Council said on Monday it saw growth at 9 percent.

Rising income levels would fuel demand for goods and services and propel growth in Asia's third largest economy, the economist said on Tuesday.

"We are probably close to the bottom of the cycle in terms of the moderation in consumer spending... We are going to get a rebound," said Sailesh Jha, senior regional economist with the Swiss bank.

Jha said the cumulative impact of a series of monetary measures by the Reserve Bank of India to cool consumer spending and credit growth had been limited largely to easing sales of vehicles and property.

"In fact firms are expanding capacity via warehousing. So, bottoms up indications are strong for growth," said Jha, who expected the economy would grow by 9.6 percent in 2008/09.

Jha said he expected inflation to start moving higher from September, and the central bank to respond by raising the repo rate by 25 basis points in October, and a further 25 basis points in January, 2008.

The cash reserve ratio (CRR), the proportion of deposits banks must park with the Reserve Bank of India, could be raised by 100 basis points by January, in a bid to drain excess cash from the banking system, he said.

Jha predicted that foreign investment inflow would remain robust this year, helping the Indian rupee appreciate to 39 per dollar by March 2008. The rupee hit a nine-year high of 40.28 in late May, and ended at 40.3525/3600 on Tuesday.

He expected the central bank to intervene less against a rising rupee in coming months.

In the January-March quarter, "they will run out of sterilization instruments, and the inflation number will start picking up and so the currency appreciates," Jha said.


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## Bushroda

*Reliance Industries Confirms Discovery Off East Coast* 
By Archana Chaudhary and Manash Goswami

July 17 (Bloomberg) -- Reliance Industries Ltd., India's biggest company, confirmed a gas discovery off the country's east coast, potentially becoming the country's largest producer of the fuel. 

This is the first discovery in the region by any company, P.M.S. Prasad, president of the Mumbai-based company's oil and gas business, told reporters today. The well drilled in the CY- DWN-2001/2 area of the Kaveri Basin produced 31 million cubic feet of gas and 1,200 barrels of oil a day, he said. 

The find may help billionaire Chairman Mukesh Ambani overtake Oil & Natural Gas Corp., India's biggest producer of natural gas, and boost income from selling a fuel that's available in half the quantity needed by the country. Reliance made the world's biggest discovery of 2002 in the adjoining Krishna Godavari area, from where it's slated to start production next year. 

``We are as excited about the discovery as we were about Krishna Godavari,'' Prasad said. ``It's a significant milestone.'' 

V.K. Sibal, director general of hydrocarbons, yesterday said his office had been informed of the Kaveri Basin find. Reliance shares rose 50.8 rupees, or 2.9 percent, to 1,827.35 rupees on the Bombay Stock Exchange today. 

*Dhirubhai Ambani* 

The well is at a water depth of 1,185 meters, Prasad said. The discovery has been named Dhirubhai-35, after the late founder of the company. Reliance names each discovery after Dhirubhai Ambani, who started life as a gas station attendant and built the diversified group. 

``The potential seems to be very huge,'' said Karthik Ramakrishnan, analyst at Mumbai-based Sunidhi Consultancy. ``It augurs well for India's energy sector because we have a huge shortage in fuels as demand is rising.'' 

India's current gas supply of 85 million cubic meters a day, including imported liquefied natural gas, falls short of the potential demand of 170 million cubic meters, according to estimates by the Oil Ministry. Gas consumption may rise to 400 million cubic meters a day by 2025 if the economy grows at the projected rate of 7 percent to 8 percent a year. About 80 percent of the current supply is from Oil & Natural Gas. 

Reliance, run by Dhirubhai Ambani's elder son Mukesh, plans to start producing 80 million cubic meters of gas a day from Krishna Godavari, north of the Kaveri basin, next year. Reliance is investing $5.2 billion to produce gas at the site. 

*Rig Shortage* 

Oil and gas exploration is being hampered by a shortage of manpower and increasing costs, Prasad said. Record crude oil prices have prompted companies to increase exploration, leading to a shortage of rigs and engineers, he said. Reliance has spent 90 billion rupees on exploration, three times the amount it had committed to the government. 

Reliance said Nov. 1 the cost of developing the Krishna Godavari fields doubled to $5.2 billion from an earlier estimate. 

The company will get eight rigs starting September to the middle of next year, Prasad said. Four rigs will be able to drill at more than 2,000 meters water depth. 

``Capital costs of explorers have almost doubled with rig costs going up and this will affect their profitability,'' Nagarajan Narasimhan, head of research at Crisil Ltd., the Indian unit of Standard & Poor's, said on phone from Mumbai. 

Additional supplies of natural gas may lower India's need to import the fuel. Petronet LNG Ltd., India's largest liquefied natural gas importer, said on July 3 it agreed to buy 1.25 million metric tons of liquefied natural gas from Qatar to supply the country's biggest gas-fired power plant in Dabhol. 

Petronet is in talks with Chevron Corp. to import 5 million tons of LNG from the Gorgon LNG project in Australia in 2013, Managing Director P. Dasgupta said on April 26. The company, which is doubling capacity at its Dahej terminals by December 2008, plans to start importing cargoes into a second LNG import terminal in Kochi starting in 2010, Dasgupta said. 

``We estimate that almost 50 percent of India's gas needs will be met through the new gas finds in the coming five years, cutting exports to one-fourth of India's needs,'' Crisil's Narasimhan said.


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## Bushroda

*Bangalore keen to be the IT Gateway to Asia*
Vicky Nanjappa in Bangalore 
July 17, 2007 14:00 IST

After its image took a beating thanks to the UK terror plot, Bangalore city will now try and regain its image as the top IT city in the region by portraying itself as the IT Gateway to Asia.

Karnataka's information technology secretary M N Vidyashankar told rediff.com that the theme of the four-day Bangalore IT.in to be held between October 29 and November 1 will put the image of Bangalore on the global map once again as the leading infotech city.

The Karnataka government realises that there is a need to wash away the negative publicity it has got in the wake of the London terror plot with three persons from the city being detained.

Vidyashankar said that Bangalore IT.in is Asia's biggest IT and telecom exposition and the event will provide a platform to exchange knowledge on information and communication technologies (ICT).

Apart from this the event will also enable countries and companies in Asia to leverage Asia's ICT eco-system built in India, with Bangalore as the nerve centre of all high-tech activities.

The IT secretary said that keeping in mind the changing needs of the industry, the theme of the event will be on portraying Asia's unique ICT system.

Organised by the state government, in association with the Software Technology Parks of India (STPI) and Cyber Media, the 10th edition of the IT.in will highlight the country's large ICT talent and end-to-end capabilities across the value chain.

"India is positioned in the world of IT as the only country in Asia offering a gamut of services from low-end data entry to high-end analytics and research and development. With skilled talent pool and cost advantage, an ICT ecosystem has been built over the years to thrive on the opportunities created by the global economy in a flat world," said the IT secretary.

Vidyashankar also pointed out that India accounted for one-third of Asia Pacific's IT jobs. He said that India has become a destination of choice on parameters such as talent, maturity and business environment.

Cyber Media group chairman Pradip Gupta pointed out that Bangalore has moved up the value chain to emerge as a global destination for systems on chip design, embedded software and a centre for remote management of infrastructure services.


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## Bushroda

*india: Organic farming provides a clue for struggling farms* 
Monday Morning, Lebanon

Prime Minister Singh: Till we make farming as a whole viable at this scale, it would be virtually impossible to reduce rural poverty and distress

As India struggles to deal with stagnation in its crucial agricultural sector, small-scale organic farming initiatives near the capital Delhi are providing clues on how to reap healthy profits from the land. 

Many farmers in India, where more than 70 percent of the people depend on the land, eke out a living -- or else fall steadily into debt -- trying to grow water-, fertilizer- and pesticide-heavy crops on an acre or two of land.

Growth has clocked in at a mere two percent -- far behind the wider figure of nine percent -- leading the government to wager six billion dollars in a push for large-scale, industrial farms.

Small and marginal farms have become an unviable proposition, argued Indian Prime Minister Manmohan Singh last month, announcing the four-year investment in farm technology and infrastructure.

Till we make farming as a whole viable at this scale, it would be virtually impossible to reduce rural poverty and distress, he said.

But around Delhi, free-range and organic goods from newcomers to farming are showing that money can be made by growing specialty products that consumers are willing to pay more for.
At the French Farm in Gurgaon, a suburb of Delhi known mainly for its call centers, Roger Langbour raises thousands of free-range Peking and Muscovy ducks on feed that is free of pesticide and antibiotics.

White ducks sit placidly on the ground in a large enclosure with wire fencing. Elsewhere turkeys and even a small number of quail and pheasants strut and peck at the ground.

People said youre are crazy; no one will buy your ducks, said Langbour, who started the three-acre farm 14 years ago after a career in the French air force, which sent him to India on his last post.

But Im the one who opened the duck market in India. In 1991, 92, there were no ducks on the table here.

Agriculture is the sector thats going to be the next big thing. Its an unorganized sector so theres a lot of opportunity, enthused Indira Khosla, a co-founder of the company.

Recent studies have shown that if you want to achieve growth, it can be through high-value crops, not though cereals. argued Surinder Sud, agriculture editor for the Business Standard daily.

An Indian Council for Agricultural Research study showed that the two-percent agricultural growth rate masked a six-percent growth rate in fruits and vegetables, Sud said.

Even so, India, the worlds second largest wheat producer, may be reluctant to encourage its farmers to move away from growing staples like rice and wheat.

As incomes and food consumption have gone up, wheat reserves fell last year and the country was forced to import the commodity for the first time in six years.

But Sud said that with big foreign reserves thanks to 15 years of a booming economy now growing at more than nine percent per year, food security can be managed.

Four million hectares of land are now devoted to certified organic farming for export, Dave said, including of mangoes, spices and nuts.
The council has developed standards for organic exports, and mandatory domestic standards are in the works. This will make it easier and cheaper for farmers to get the kind of accreditation that is recognized abroad.

But for now, the impetus for organic agriculture is coming not from small farmers in remote areas far from markets, but from city-based businesses.


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## Bushroda

*Railways seeks private participation to introduce high-speed trains* 
S. Vydhianathan 

CHENNAI: The Railways is looking for public-private partnership to in introduce ing high-speed trains in select corridors. 

As such high-speed trains can be operated only on dedicated elevated corridors, costing at least Rs. 70 crore a per kmilometre, private participation has become imperative, according to Southern Railway General Manager Thomas Varghese. There are demands for bullet trains from Chennai to Ernakulam, Bangalore, Coimbatore and Madurai and from Trivandrum to Mangalore. 

The Railway Board Chairman recently held detailed discussions with Chief Secretaries of Tamil Nadu and Kerala on this issue. As heavy investments are needed to realise these demands, an in-depth market survey on possible clientele who could afford to pay fares on a par with those of airlines would have to be carried out. 

A bullet train between Chennai and Bangalore would be ideal in view of the increasing passenger patronage between the cities, Mr. Varghese said in an interview on Monday. 

The Railway Board recently decided to have at least one high-speed corridor in each zone. Chief Minister M. Karunanidhi had written to Railway Minister Lalu Prasad, asking him to consider the possibility of operating bullet trains from Chennai to major cities in the State. Mr.Varghese, who is laying down office on Wednesday after serving in the Indian Railways for over 35 years, said during his two-year stint as General Manager there were no major accidents in the zone. in Southern Railway. However, he admitted that there were deaths in fatal accidents at unmanned railway crossings, for which the Railways could not be held responsible.

Claiming that the total revenue of the zone had been on the rise, Mr.Varghese said that it had recorded 12 per cent increase in total earnings in the first three months of the current year. Despite the uptrend in the earnings, the operating ratio was more than 100 per cent. Thanks to the various steps taken by the zone, the ratio came down from which was 115 per cent in the year before last year came down to 104.5 per cent last year. This meant that for every rupee earned, the zone was spending Rs. 104.5. To break even, 

To break even, the freight traffic had to be improved substantially. The General Manager said the Board had been sanctioning funds generously for undertaking various ongoing projects, passenger amenities and for improving safety. With the sanctioned funds, the zone would be able to complete the ongoing projects at the earliest.


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## Bushroda

*Indian carriers can now make Malaysia a hub*
18 Jul 2007, 0335 hrs IST,TNN

NEW DELHI: Indian carriers designated to fly abroad now have the opportunity to set up an international hub. The government's recently-signed pact with Malaysia has won India the "beyond right" that allows airlines to use Kuala Lumpur as a hub in the east and connect other destinations like Australia and the west coast. 

So far, Jet is the only Indian airline to have a base abroad, in Brussels, and now Air India is also trying to get a base in Europe. 

"The beyond right is an important feature of this pact as any designated Indian carrier can fly beyond KL. The best part of the deal, signed by an Indian team led by aviation secretary Ashok Chawla, is that the excellent KL is also among the most economical ones in the southeast. It will be the ideal hub for an airline that's equipped to expand operations to the southeast and Australia," said a senior official. 

The importance in terms of growing traffic to the southeast can be gauged from the fact that Jet recently strengthened its code share agreement with Qantas to provide seamless connectivity between India and Australia via Singapore. 

Without a base of their own, Indian carriers need such pacts. But with India now tying up with Malaysia, its carriers can set up base in KL to offer onward connections. 

Air India chairman and managing director V Thulasidas said: "We will surely look into the potential of using KL as a point for carrying beyond traffic. We are going to expand our operations and add more cities on our map." 

AI is currently in the final stages of tying up with a major European hub airport for using it as a base.


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## Bushroda

*India-Indonesia trade to touch $10 bn*
17 Jul 2007, 1301 hrs IST,IANS

JAKARTA: Trade between India and Indonesia is expected to hit a historic high of $10 billion by 2010, says Indonesian President Susilo Bambang Yudhoyono. 

"The bilateral trade target of $10 billion for 2010 can be achieved if the two nations seriously develop and enhance the existing cooperation," the President said. 

Indian Ambassador to Indonesia Navrekha Sharma said a number of Indian companies had expressed keen interest in investing in Indonesia's information technology, infrastructure, banking and automotive sectors. 

Susilo said Indonesia must be able to grab all the opportunities by establishing strategic partnership with India, which is a big country and has many comparative advantages, such as advanced technology. 

He also underscored the importance of cooperation in the pharmaceutical industry, considering India was one of the world's largest pharmaceutical product suppliers. 

"We have a fast-growing domestic market and abundant natural resources. If the countries' potentials are combined, both Indonesia and India will take the great advantage of their cooperation," he said.


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## Bushroda

*India sees 10 percent economic growth if farm output recovers*
FORBES, NY
07.17.07

NEW DELHI (Thomson Financial) - India's economy could touch annual growth of 10 percent in the financial year beginning April 2008, provided its ailing farm sector picks up.

'Achieving a 10 percent growth in 2007-2008 (April-March) is tough, but it is possible in 2008-2009,' Finance Minister Palaniappan Chidambaram told economists at a function in New Delhi on Tuesday.

'That will be a fitting finale for the government's five-year tenure,' Chidambaram said, adding the target could be achieved only if India increased farm output.

'It will be possible to push up the economic growth by improving the performance of agriculture, which has been stagnating,' the minister said.

Agriculture contributes a fifth of India's economic output and is a direct or indirect source of income for two-thirds of its population.

Annual per capita food grain production shrunk from 207 kilograms in 1995 to 186 kilos last year. The rate of agricultural growth fell from five percent in the mid-1980s to less than two percent in the past five years.

India, the world's second-largest wheat producer, exported no wheat last year after shortages forced it to import the commodity for the first time in six years.

The Indian economy grew faster-than-expected at a record 9.4 percent pace in the past year to March, beating New Delhi's forecast of 9.2 percent and raising hopes of greater foreign capital inflows.

In the previous fiscal year, India's economy grew 9.0 percent.

Chidambaram said India's sizzling growth compared well with China's economy.

'India's growth rate compared to China is not bad in view of the fact that India has to follow democratic norms and generate (political) consensus, evolve laws and endure criticism before moving forward,' the finance minister said.

India's growth lagged behind Asian rival China's 10.7 percent in 2006.


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## Bushroda

*Retail needs FDI to reach its potential*
18 Jul, 2007, 0346 hrs IST,Gaurav Taneja, 

In 2003, Indias economy was projected to overtake the US to become number two soon after 2060. However, given the revised estimates, the chances are that the overtake may actually happen even earlier! With such growth prospects, rising incomes with increased per capita spending, changing consumer tastes and high proportion of young working population  no doubt India tops the list of emerging markets for global retailers! 

However, the retail sector is presently grappling with certain policy, regulatory and tax issues, which if not quickly addressed, may impact not only the prospects of retail sector but also the long-term India story to a some extent. 

At the regulatory front, presently, FDI is completely prohibited in multi-brand Retail. Further even in case of single-brand retail, only 51% FDI is allowed with prior government approval. However, if organised retail in India has to grow as forecasted/estimated, it requires significant capital, technology and application of latest global best practices. In such case, restricted FDI regime may be an impediment. Growth of organised retail is likely to have a positive impact not only on end consumers, but also on employment generation, supply chain efficiency, agricultural practices, sourcing from India, etc. 

Organised retail, besides benefiting the consumers by way of competitive product pricing and quality service, is introducing the Indian consumer to a shopping experience like never before. The modern shopping complexes are becoming the destination point for shoppers as well as window-shoppers. There is everything for everyone  shopping, entertainment, and food, all of it under one roof. Further, being largely labour-intensive, organised retail is likely to unleash huge job opportunities. 

Further, to the surprise of many, retail also requires application of global best practices in terms of processes, systems, quicker assimilation and implementation of new technologies. The food supply chain in India remains fragmented and unorganised. From farm to fridge, distribution of most food items involves multiple intermediaries and wastage during transportation and storage. Organised Retail is expected to result in significant investments in upgrading the technology and practices in the entire value chain, and, the removal of intermediaries. This will reduce wastage and duplication of efforts resulting in farmers realising both higher productivity and better price. 

Opening up the sector to global retailers will only result in further investments to help farmers scale up and modernise farm practices. Direct inclusion of farmers into this process on fair terms would give them the first real opportunity they have had in centuries. The extent of sourcing from India will also grow manifold when global retailers are allowed to operate in the Indian market. Global retailers have invested significantly in the local economies they are present in. In the process, they have improved living standards of consumers, suppliers, farmers and employees and generated greater quantity and quality of employment. 

All of the above strongly advocate a case for allowing FDI in retail sector. A gradual approach, similar to telecom sector, may also be explored, such as, opening up the sector for 51% FDI now, with a clear road map for further liberalisation. In a scenario where large Indian business houses/conglomerates like Tatas, Reliance, Birlas and Bhartis have already entered the field with huge investment plans, there does not seem to be any logic in arguing against FDI on the ground of impact on mom-and-pop stores. 

Besides allowing FDI in retail, to unleash the growth potential of retail sector, government will also have to give infrastructure development its due attention, so that it keeps pace with the current retail transformation. Further legislative reforms, and rationalisation of fiscal laws, is also required to keep the momentum going. 

The rising demand for cornering prime locations has hiked the property lease rentals across the country. The recent levy of service tax on such rentals has further aggravated matters. Further, a typical retailer is subjected to service tax levy also on security, storage and warehousing, commission and collection agents services, transport services. This becomes a significant additional cost, given the wafer thin margins in this industry. In most cases, the retailers are not able to utilise the credit of service tax paid on the input services consumed by them. Similarly, the credit regime is also not very friendly in respect of central sales tax / entry taxes. 

Retail sector needs a much better set of regime, till an integrated goods and service tax (GST) is introduced. Given the huge benefits of organised retail, and the likely spiralling effect of the sectors growth on the growth of Indian economy, including the rural economy, it is high time that this sector receives its due attention, and measures are introduced liberalising and rationalising regulatory and tax environment.


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## Bushroda

*An unbound India flourishes, but the job's not yet done*
MARCUS GEE 
Globe and Mail, Canada

One day in the 1980s, Gurcharan Das found himself arguing with the finance minister of India about the value of face creams for women. Mr. Das, then an executive with Proctor & Gamble, was pleading with the minister to lower India's 120-per-cent excise duty on toiletries, which were making it hard for P&G to sell its Oil of Olay cream to Indian women.

"A face cream won't do anything for an ugly face," said the minister impatiently. "These are luxuries of the rich."

When Mr. Das protested that even a young woman from the village used traditional beauty pastes, the minister said: "No, it's best to leave a face to nature."

"Sir," Mr. Das objected, "how can you decide what she wants? After all, it is her hard-earned money."

"Yes, and I don't want her wasting it. Let her buy food," said the minister, ending the meeting with an imperious wave of his hand.

Those were the bad old days. Like many Indian executives, Mr. Das spent hours in the stale corridors of Delhi's government offices, suffering the disdain of countless time-serving officials as he tried to negotiate a web of taxes, regulations and restrictions.

Under the Licence Raj, as India's stifling business rules were called, "you could actually go to jail for producing more than your approved limit. A farmer could not sell his produce beyond state borders. A young entrepreneur faced up to 37 functionaries and inspectors, each of them wanting his cut. It was a crime to invite your customer to lunch abroad while travelling because it exceeded your foreign exchange allowance."

These were more than just minor annoyances for Indian businessmen. The Licence Raj held India back for decades, curbing its economic growth as first Japan, then South Korea, Taiwan and Hong Kong and then China leapt from poverty to prosperity. "By suppressing economic liberty for 40 years, we destroyed growth and the futures of two generations," he writes in his 2000 book India Unbound.

That made Mr. Das mad, and he wasn't afraid to say so. A government official's son educated at Harvard on a scholarship, he had no patience for the petty tyranny of Indian officialdom. He once even had the nerve to challenge the regal Indira Gandhi. "Does the market always make the right decisions?" she demanded when he questioned the Licence Raj after a speech she gave to a business audience. "Not always, madam, but always better than bureaucrats," Mr. Das replied. "Ah," she said with a condescending smile, "we have a market-wallah, do we?"

He doesn't have to suffer that kind of sneering any more. Since finance minister (now Prime Minister) Manmohan Singh introduced market-oriented reforms in 1991, the Licence Raj has crumbled. India is, indeed, unbound. With its natural entrepreneurial talent liberated, the country has registered steadily accelerating economic growth, which touched 9 per cent last year, close to booming China's.

Unlike China's government-directed, top-down formula, India's miracle has been "a people's success - a success from below," Mr. Das says.

"It has happened in spite of the state, not because of the state," he said in a recent conversation as he walked his dog in Delhi's sprawling Lodhi Garden.

The Italian saying, he says, applies equally to India: "The economy grows at night when the government sleeps."

In every sector where the government has stop meddling, from telecoms to airlines, private industry has grabbed the ball and run with it. But the job isn't done yet. While socialist follies like central planning and import substitution have largely been done away with, India still limits foreign investment, still restricts companies' ability to let unneeded employees go and still operates too many companies itself.

India's government, says Mr. Das, needs to stop doing what it should not be doing: mucking with the market. 

Just as important, it needs to start doing what it should be doing.

Government's role in enabling economic development is to make sure that basic health care is provided to its citizens; to direct the building of roads, airports and sea ports to carry the nation's products; and to regulate the market with clear and legally enforceable rules; and, most important, to educate young people so that they can do the work of a modern economy.

As it stands, primary education is a wreck. One-quarter of Indian school teachers don't even show up for work. One in four men and one in two women cannot read or write. "The Indian state's biggest failure has been in building human capabilities," Mr. Das writes in India Unbound.

India's economy may grow while government sleeps, but India won't truly prosper until government wakes up and does its job.

Making India his business

Gurcharan Das grew up in modest circumstances as the son of a public works official for irrigation and canals. 

The family moved to Washington in the 1950s when his father was posted there to negotiate with newly created Pakistan over the sharing of rivers. When they returned to India, Mr. Gurcharan stayed on to finish high school and then take a scholarship at Harvard, where he graduated with honours and attended the business school.

Homesick, he returned to India to work as a minor executive for Vicks, travelling around the country promoting its famous Vaporub. He worked his way up to chief executive officer of Procter & Gamble India and then director of strategic planning for P&G Worldwide. Since taking early retirement, he has been a consultant to industry and government. He writes a column for the Times of India and has written several plays and a novel, A Fine Family.


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## Bushroda

*Tectonic Economics*
Robyn Meredith, 07.18.07, 6:00 AM ET
FORBES, NY

_*Before our eyes, two giant nations--India and China--are simultaneously embracing both capitalism and globalization. The world economy is being transformed as a result, as Forbes Senior Editor Robyn Meredith explains in her new book, The Elephant and the Dragon: The Rise of India and China and What it Means to All of Us ($26, W.W. Norton, 2007) . Each weekday through July 27, Forbes.com will post a new excerpt from the book.*_ 

The Elephant and the Dragon is the story of how India and China are changing their destinies, and with that, changing the world's. 

Both nations are growing so fast that they make the economies of the United States, Europe and Japan seem as if they are standing still. As a result, doing business in India and China has become the only hope for Western companies determined to quickly add new customers--the only way for Western executives to make stockholders happy. For business executives today, an understanding of India and China is now considered as essential as a grasp of accounting.

China began opening up its economy a generation ago, in 1978. Since then, foreign companies have poured $600 billion in foreign direct investment into China--more than the U.S. spent rebuilding Post-War Europe under the Marshall Plan. 

In that time, China has transformed itself from a nation of peasants to an army of factory workers, plus a growing middle class. As a result, the vast majority of Chinese people have prospered, and the average Chinese now earns five times more than when economic reforms began. Streets are lined with shiny office buildings and new factories, and freshly poured highways stretch across the vast country. There are new airports and shopping malls and hundreds of millions of cellphones in a land where there were few telephones a decade ago. China is flying along, fast as a dragon. Nations around the world are in awe of China's lightening-fast rise.

That includes India. After decades of slow growth, India is finally following China's example and modernizing its economy, trying to drag its 1.1 billion people into the modern age. Finally, Indian incomes are rising, foreign investors have come calling, and India's economy is taking off. Slowly but steadily, like an elephant, India is trudging into the future.

Both India and China are moving from the ranks of developing-world countries toward superpower status. Their transformations are as stunning as any the world has seen since America itself emerged on the world stage. And the impact is felt on American shores, where prices have fallen at local Wal-Marts and risen at local gas stations. There are plenty of other contradictions. Middle-class American jobs are threatened even as mortgage payments are kept low thanks to China's powerful financial clout. In short, India and China have become a source of employees, co-workers, customers and competitors. 

American companies can now connect with cheap workers half a world away at the click of a computer mouse, and the result for American, European and Japanese workers is the terrifying, dark side of globalization. More than a billion workers have just been thrown into the world's labor pool, and America must cope with the changes. Farmers were displaced by the Industrial Revolution in the 19th century. Sweatshop workers lost their livelihoods to assembly lines in the 20th, and just a generation ago, American factories closed because blue-collar work began moving to Mexico. History is about to repeat itself, sending a spasm through the world's job markets.

Yet the rise of India and China is about much more than jobs moving overseas: It is about a major shift in post-Cold War geopolitics, about quenching a growing thirst for oil, about massive environmental change. This is tectonic economics: the rise of India and China has caused the economic and political landscape to shift before our eyes.

We must make sense of how our world is being shaped by the rise of India and China. Only then can we adjust to, and even thrive, in the age of the Elephant and the Dragon.


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## Bushroda

*Maharashtra in for $3 billion face*
Uma Upadhyaya.
Mumbai, July 18, 2007
First Published: 00:48 IST(18/7/2007)

The Mumbai makeover project has spawned bigger dreams. 

The state government is now working on an ambitious 15-year plan to build expressways, airports and ports that will provide better connectivity across the state. The estimated initial investment: $3 billion or Rs 12,000 crore.

"We are looking at infrastructure development and modernisation across the state, linking our larger cities like Pune, Nashik, Kolhapur, Nagpur. This means more highways, expressways and airports. We are finalising the details," said Chief Minister Vilasrao Deshmukh.

The projects will be undertaken through four different public-private business models in which government investment will be nominal, said Chief Secretary Johny Joseph. 

The government has also identified 21 new locations to be put on the aviation map, to try and accommodate the boom in civil aviation. Seven of these  including Shirdi, Amravati, Kolhapur and Latur  will be developed as full-fledged airports through private investment.

Forty-eight sites have been identified as business ports along the 720 km coastline of the state. 

Deshmukh discussed a rough blueprint of this plan with global players in infrastructure while in New York last month. 

Though Maharashra has seen steady growth in investment in industry over the last decade, there are signs of stagnancy thanks to the poor infrastructure beyond the Mumbai-Pune-Nashik triangle.

If the state is to compete with neighbours like Gujarat and Andhra Pradesh, which are aggressively marketing their industry-friendly destinations, it has no option but to go in for a major infrastructure makeover. 

In addition to transport, the state is also inviting private participation in the power generation, irrigation and urban housing sectors. 

The Public-Private-Partnership Facilitation Cell set up four months ago by the government and headed by Secretary (Special Projects) Sanjay Ubale will act as an interface for investors. Deshmukh is also likely to set up an advisory committee of experts to implement the plan.


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## Bushroda

*Relief from a rising rupee*
By Raja M 

MUMBAI - Lumbering to limit the rupee's growing muscles from damaging India's export business, the government has announced a much-awaited US$345 million relief package for worried exporters. The rupee has been averaging a 9.6% climb against the US currency since January, making Indian exports more expensive and less competitive in global markets. 

A record $44.9 billion worth foreign-exchange assets flowed into India this year, up from $23.4 billion in 2006. This contributed to the cheaper dollar fetching fewer rupees and punched big holes in exporters' profits. 

As this article was written, the exchange rate was Rs40.41 to US$1, compared with an average of Rs45 this decade. Thailand is another Asian country facing a similar problem, where a strengthening baht is expected to shrink its exports by 12.49% in the second half of this year. 

The rising rupee has caught global attention, and Time magazine termed the Indian currency's appreciation "one of this year's biggest business stories". 

The Indian government's export-relief package includes increasing drawback rates on most existing export items eligible for this concession, increasing the list of export items eligible for duty drawback, and banks offering shipment credit on easier terms for small and large exporters. 

India's most frequently exported items include textiles, food products from snacks to tea, engineering products, garments, marine products, automobiles, leather goods, sports equipment and, of course, the software and outsourcing-service industries. 

The textile industry is one of the worst victims of the rising-rupee story, with exporters to the US suffering losses ranging from 23% to more than 70% because of the dollar exchange rate dipping. Indian exports to the US totaled $22 billion last fiscal year, compared with the $288 billion worth of China-US exports. India also fears losing more than a quarter-million jobs because of fewer export orders, mostly in the textile industry. 

The $1.5 billion Indian tea industry, the largest tea producer in the world, also took a hammering, with exports already falling behind this year by 5 million tonnes compared with last year. 

The relief package hasn't come too soon, as more optimistic analysts expect the dollar to sink deeper against the rupee. Forex assets are expected to rise to $60 billion, taking India's total foreign-currency holdings to a record $260 billion. 

Those gleefully cheering the rising rupee are importers and the tourism industry. Indeed, this crisis of plenty could be deeply ironic for those who remember India's desperate foreign-exchange-reserves situation in 1991, when the government ignominiously had to sell 20 tonnes of its gold holdings for $200 million to pay for imports. 

When now-Prime Minister Manmohan Singh entered the cabinet as finance minister in 1991 and opened India's economy to the world, its forex holdings were $495 million, barely enough to finance imports for a fortnight. Sixteen years later, India has $218 billion in foreign-exchange holdings and worries what to do with it. 

Export trade associations have cautiously welcomed the new governmental relief package, but most have appreciated the good intentions more than the actual content. Ganesh Kumar Gupta, president of the Federation of Indian Export Organizations, said the duty drawback rates should have been increased by an additional 5%. The hard-hit members of the Synthetic and Rayon Textiles Export Promotion Council agreed. 

Exporters also sought more sales-tax concessions. The prevailing sentiment was that the government's move was a stopgap measure, and that the regulatory Reserve Bank of India would have to be more adroit in managing the increasing forex inflows. The RBI has already purchased $24 billion in US currency this year to keep the rupee in check. 

Finance Secretary D Subbarao said he hopes the new sops will ease the way to reach the $160 billion export target for the current fiscal year, and added that the drop in exports cannot be fully blamed on the rising rupee. 

A recent report by the Federation of Indian Chambers of Commerce and Industry agreed with him. It said inadequate port and shipping facilities are among the biggest roadblocks to India achieving the current export target and the $200 billion export target for next year. 

Local analysts say another long-term solution is to usher in capital account convertibility (CAC, or freedom to convert local financial assets into foreign financial assets, and vice versa, at market rates). Finance Minister P Chidambaram told the India-Europe Investment Forum in London this month - the European Union is India's biggest investor, contributing 25% of foreign direct investment in the country - that India is gradually moving toward CAC. 

"There is de facto full capital account convertibility for non-residents: they can bring in their money and they can take out their money," Chidambaram said, and pointed out that foreign investors too can bring in capital and take home their profits, dividends, capital, capital gains and royalties. 

For now, more foreign investors largely mean bad news for India's exporters.


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## Bushroda

*London mayor opens India festival, blames Britain for past woes*
by Katherine Haddon
France24, France 

London Mayor Ken Livingstone blamed India's past economic problems on the "long, dark night of imperialism" Tuesday as he launched a major festival to strengthen ties with the now booming country.

Livingstone was joined by Bollywood actress Shilpa Shetty as he kicked off "India Now," a three-month extravaganza of 1,500 events spanning theatre, dance, music, film and food.

The capital's Indian summer aims to spotlight economic and cultural ties with India at a time when Livingstone is trying to attract business from thriving economies across Asia.

The man nicknamed "Red Ken" because of his hard-left past told reporters that part of the reason for India's current prodigious economic success was because it was catching up after years of colonialist oppression.

"If you go back 600 years, someone coming here from another planet would have looked at where was the place to land and meet the inhabitants, they would have gone to India or China, two great civilisations," the mayor said.

"They wouldn't have gone to Europe -- backward, people living in appalling conditions.

"Imperialism damaged massively the economies of Asia and Africa. That world's gone.

"People are now surprised, why is India growing so fast? -- it is just catching up with the ground it was not allowed to occupy during that long, dark night of imperialism."

This year -- the 60th anniversary of independence from British rule -- India's economy is set to grow by 8.1 percent, according to the United Nations.

This places it behind only China, which Livingstone tried to court with a similar festival during Lunar New Year in February, among the world's fastest-growing major economies.

Events planned during "India Now" include a three-week mini-festival in Trafalgar Square in August, featuring Bollywood dance displays, and Regent Street, a busy shopping area, getting an Indian make-over on September 2.

Launching the event, Livingstone and Shetty posed on a boat on the River Thames near Tower Bridge with a replica of the Taj Mahal, one of India's most-visited tourist attractions.

Shetty is the most recognisable Indian star in Britain after winning the reality television show "Celebrity Big Brother" earlier this year despite a racist bullying row.

She said she thought the festival would boost relations between London and India.

"I just absolutely love the fact that the whole perception of India has changed, I think more so over the last three years, and people are very intrigued about India," she said.

Britain and India already enjoy significant links -- some six percent, or 437,000, of Londoners are of Indian origin, making it the largest national minority community in the British capital, the mayor's office said.

But Livingstone said that one of the main goals of the festival was to help Londoners who "know no more about India than the fact that great curries come from there" to understand the value of Indian culture and business.

He is travelling to Mumbai and New Delhi in November to open two offices promoting the British capital there and says he has been working with Prime Minister Gordon Brown for easier access to Britain for Indian business people.

Livingstone also expressed hostility to trade barriers, adding: "It is better that we grow with these emerging economies, so we will do all we can to clear any bureaucratic or regulatory mechanisms out the way."

Among the other celebrities helping to promote the event at its launch were Indian cricket captain Rahul Dravid and fashion designer Manish Arora.


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## Bushroda

*Analysis: India to reinforce power market* 
Published: July 18, 2007 
By KUSHAL JEENA

NEW DELHI, July 18 (UPI) -- India is contemplating reinforcing its electricity market to create adequate capacity so the government can use the feedback mechanism to make investments in the country's ailing power sector. 

"Over the next decade, as we hopefully resolve the situation of chronic power shortage and inadequacy, it is preferable to err on the side of caution and create adequate capacity while reinforcing the market for electricity so that feedback mechanisms are able to inform investment decision," said the Economic Outlook for 2007-08, a broad outline report that was prepared by the Economic Advisory Council of Indian Prime Minister Manmohan Singh. The report was released by C. Rangarajan, chairman of the council. 

"Efficiency of electricity is a consequence of the interplay between technology, prices and competitive forces," he said. "The danger in anticipating an outcome such as increased efficiency may result in the under-provisioning of productive capacity and thus bear on the ability of the entire economy to sustain a high rate of growth." 

He said the government should allow private investors in the power sector to take those decisions and arrive at solutions that are more adaptive than long-range planning. 

Unlike telecommunications and manufacturing, private investment has not been forthcoming in India's power sector. This has led to a situation where it has been mostly the public sector that is engaged in investing in new power-generation capacity. 

The government has worked over time to attract private investment in the sector with several new initiatives. None has yielded the desired results, however. 

The Economic Outlook says not only does public-sector investment diminish the potential investment the economy could make in capacity augmentation, but it also imbues it with the kind of special difficulties that arise from the idiosyncrasies of the government agencies and systems. 

It says the consequence has been that domestic manufacturing units have higher operating costs than they would have had in the presence of adequate grid power, bringing about an adverse effect on their global competitiveness. 

It is also probable that had adequate power been available, much more manufacturing capacity might have come up. There has thus been both a real and opportunity cost resulting from the inadequacy of generation. 

"The capacity build-up that the government has planned has been in respect of an attenuated demand, and then even that capacity has failed to materialize in time," said G.K. Chadha, member of the council. 

India during the 10th five-year plan (2002-07) period set a target of capacity addition of 41,110 megawatt. It succeeded in implementing 18,000. 

The gap holds serious implications. The initial thinking in formulating the current 11th-plan period (2007-12) would be about 50,000 MW. It was revised upward to 60,000 MW in the approach paper for the 11th-plan period. 

India's planning panel recently again raised this to 68,869 MW with a best-effort commitment to bring another 11,545 MW forward -- leading to a total capacity addition of 80,414 MW. 

"Given the record of slippages in implementation, the panel should be guided by the past and accordingly ought to lower its sights and adopt a realistic target, which is not in excess of 40,000-50,000 MW," said Syed Azeez Pasha, an energy expert and member of the parliamentary standing committee attached to the Ministry Of Power. 

The Economic Outlook asked the government to take urgent measures to complete the reform of the power-distribution network, work to bring in greater private-sector participation and encourage the large-scale import of power-generating plant and equipment to augment domestic production. It also pointed out that success on these fronts would dramatically change the conditions and relax the constraints that brought about slippage in the past. 

Rangarajan was of the view the reform of the distribution sector must be accelerated so that commercial viability is restored. 

"Simultaneously, it is necessary to realize that the single most important constraint facing the Indian economy is infrastructure, and power sector is within that," he said.


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## Bushroda

*France's Velcan eyes Islamic bonds for India dam*
Tue Jul 17, 2007 3:48 PM IST 

MANAMA (Reuters) - French renewable energy company Velcan Energy plans to raise about 200 million euros ($275.8 million) through convertible Islamic bonds to finance a hydroelectric dam in India, the company said on Tuesday.

Velcan is targeting Muslim investors because the dam project would provide the kind of stable, long-term returns that would allow bondholders comply with Islam's ban on receiving interest, Managing Director Antoine Decitre told Reuters.

Islamic bonds, or sukuk, are typically backed by physical assets that pay a profit instead of interest.

"Dams are exactly this kind of asset. This fits very well with Islamic finance," he said.

Velcan is picking an arranger for the sukuk which will be convertible into stock, Decitre said.

The firm is likely to target exclusively Middle Eastern investors for the sale, due by the end of the first quarter, he said.

More Islamic lenders are considering investments in India, home to the world's third largest population of Muslims.

About 650 million people live without electricity in India, Asia's third last economy, which will need investments of 100 billion euros in hydroelectric power, Velcan said.


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## Bushroda

*Bangalore International Airport right on schedule, but what about infrastructure?*
18 July 2007

India's silicon city Bangalore will have a brand new international airport by April next year, the Swiss CEO of Bangalore International Airport Ltd (BIAL) Albert Brunner has announced, saying that the project is already '77 per cent complete' and should be able to throw open its doors on the projected date of opening. 

The roof, front and back glass façade and walls of the terminal building are complete, while seven of the eight fixed link bridges connecting the terminal to the apron are in place. Fourteen escalators have been installed.

The four-km runway is nearing completion and the taxiway is '98 per cent complete', Brunner says. Still in progress is the fabrication of the top dome of the control tower. The airport will have a rainwater harvesting system covering 1,680 acres, a sewage treatment plant and a tertiary treatment plant to reuse the water. It is designed to handle eight million passengers in its first year of operations starting 2 April 2008, a date the chief executive officer is determined to keep.

*Dream come true*

If he succeeds, it will be a fairytale ending for a project conceived in 1991, on which construction began only 14 years later after it was awarded in July 2005 to a consortium including Unique Zurich Airport of Switzerland, Siemens of Germany, and Larsen and Toubro of India. Expected to cost $500 million, it has been designed for 11 million passengers a year, up from the 5 million first planned, as traffic growth to the hi-tech city has skyrocketed with its flourishing economy. Union civil aviation minister Praful Patel, after his recent visit to Devanahalli, was satisfied with the airport's aesthetics and progress, Brunner says.

Six thousand employees are working round the clock seven days a week to ensure the deadline is met in a country where large projects routinely go into time overruns by years, sometimes even decades. A fuel depot and cargo-handling complex are being built at an additional cost of $173 million. The concessionaires  Indian Oil and Skytanking for aviation fuel, and GlobeGround India and Air India plus Singapore Airport Terminal Services for ground handling  will pay for this. 

Other major concessionaires include LSG Sky Chefs and Taj SATS, which will compete for the food and beverage business. All concessionaires have been selected, and "we want to make sure there's competition", says Brunner, who has been living away from his wife and 14-year-old son, who have stayed back in Switzerland while he executes the project. He expects to apply for a license by the end of September and start trials of systems the following month.

*Expansion plans*

Business prospects are so good that the new airport at Devanahalli, 35 km from Bangalore city, will have to build a second runway as early as 2014, to boost its capacity. This will enhance BIAL's capacity to about 40 million passengers a year. The present runway could easily meet the requirements for the first two years, handling about 17 million passengers a year. 

But what could throw the proverbial spanner into the rapidly ongoing work is Bangalore's appalling infrastructure. A six-lane highway is being constructed, which will pass close to the airport, but both the state government and the National Highways Authority of India (NHAI) are unwilling to build the trumpet flyover connecting it to the airport approach road. 

*Speed bumps ahead*

BIAL has assigned L&T to complete the project at a cost of Rs117 crore, but acquisition of the land for one road over bridge has run into trouble, with the landowner going to court. Only two road over bridge loops would be ready by April 2008, Brunner said. So, when the airport opens, people will have to travel an extra five to six kilometers in Bangalore's bumper-to-bumper, world-class traffic jams.

Brunner says that what the airport really needs is a rail-link and a second highway. However, the closest railhead is seven kilometres from the airport exit. So, BIAL is negotiating with bus companies to run shuttle services to the city, and is close to signing a deal for taxi services.

Even if the infrastructure problems are overcome, there is a growing lobby for retaining the present HAL airport at Bangalore, especially from the low cost airlines. The question is whether BIAL will allow the second airport to function. Brunner does not see any need for two airports in a city like Bangalore. Campaigning to retain the HAL airport was expected, he says: "It is a worldwide phenomenon whenever a new airport comes up." he told journalists. 

At present, though, the man from a nation that takes pride in its clocks and watches is racing against time to get his showpiece airport up and running. "We try hard to keep our reputation as timekeepers of the world," he says.


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## Bushroda

*Great Leap Forward*
19 Jul 2007, 0017 hrs IST

Euphoria is in the air. Finance minister P Chidambaram believes that the economy can grow at 10 per cent in 2008-09. Does that seem ambitious? Not if one looks at China's record in the 80s and 90s. While China and India had comparable growth rates between 1950 and 1980, China grew at an average annual rate of 10.3 per cent in the 80s, against India's 5.7 per cent. It was the same story in the 90s: China grew at an average annual rate of 10.6 per cent against India's 6 per cent. It is only after the turn of the century that India made a great leap forward, its average annual growth in the last four years being well above 8 per cent. Considering China's record, there is no reason why India cannot grow at 10 per cent per annum for two decades. 

What do we do to achieve this? The impact of a rising rupee on exports and employment is perhaps overstated. In fact, it is infrastructure constraints such as poor roads, ports and electricity supply that could scupper the growth story. Whether it is agriculture or industry, linkages to domestic and international markets must improve. Agriculture should grow at 4 per cent for the economy to grow at 10 per cent. While manufacturing and services are growing at 10-11 per cent, more foreign direct investment could improve connectivity with overseas markets and provide access to improved technology. China has been able to leverage FDI on both counts. 

According to the prime minister, India needs to invest $300 billion in infrastructure. One way of moving on this count is to guide foreign institutional investment into long-term debt by relaxing some of the present restrictions. With foreign exchange reserves of $200 billion, this is the right time to deepen the debt market. FII inflows in 2007, at $8.4 billion, have already surpassed their level for all of 2006. Rather than raise an alarm over India's capital inflows, which are about a fifth of China's, RBI needs to check on their quality by keeping a watch on short-term flows. 

A growing economy will inevitably attract foreign capital and give rise to a dearer currency. Developed economies like Japan went through the same process in the post-War years. Rather than try to arrest the rise of the rupee through strong measures, the government should address endemic supply side and governance bottlenecks. If India is looking at two decades of 10 per cent growth, its policies should be long-term rather than reactive. A gentler approach to currency management can be accompanied by fiscal incentives for exporters and domestic producers.


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## Bushroda

*India HDFC Bank raises $698 mln with NYSE share sale*
Wed Jul 18, 2007 9:41am ET
By Himangshu Watts

MUMBAI, July 18 (Reuters) - India's HDFC Bank Ltd. (HDBK.BO: Quote, Profile , Research) (HDB.N: Quote, Profile , Research) has raised $698 million by selling American Depositary Shares (ADS), the latest in a run of capital raisings by Indian firms looking to fund their growth in the rapidly growing economy.

HDFC Bank said in a statement to the Bombay Stock Exchange on Wednesday it had raised $607 million through the sale of 6.59 million New York Stock Exchange-listed ADS at $92.10 each. 

People with knowledge of the deal said the underwriters had also exercised an overallotment option worth $91 million.

"International investors have confidence in India's growing economy and developing banking sector, driven by positive demographics and increasing consumption," said Hemendra Kothari, chairman DSP Merrill Lynch.

One banker said the sale had generated demand of $2 billion, including orders from several funds with a long-term investment horizon.

HDFC Bank, which has a market value of $10 billion, said the funds would be used to strengthen its capital base and to support future growth. Indian banks have been raising money to fund booming loan growth in an economy that is growing 9 percent a year.

Top private lender ICICI Bank (ICBK.BO: Quote, Profile , Research) (IBN.N: Quote, Profile , Research) raised a record $4.9 billion last month, partly through an ADS offering, and real estate firm DLF Ltd. (DLF.BO: Quote, Profile , Research) raised $2.25 billion in India's largest-ever initial public offering.

HDFC Bank said each ADS represented three equity shares of the bank. It said the offer price was equivalent to a price of 1,235.06 rupees per equity share, 3 percent above Tuesday's closing price of HDFC Bank's shares on the Mumbai exchange.


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## Bushroda

*Japan's Honda announces output expansion plans for India, Thailand*
FORBES, NY
07.18.07, 3:37 AM ET

TOKYO (Thomson Financial) - Honda Motor Co Ltd, Japan's second-largest automaker, unveiled Wednesday a fresh growth strategy that will see it boost its production capacity around the world to 4.7 million vehicles by 2010 from 3.9 million at present.

To take advantage of demand expansion in the emerging markets of Asia and South America, Honda (nyse: HMC - news - people ) said it will build second car assembly plants in Thailand and India, and a first car factory in Argentina.

Honda president Takeo Fukui told reporters Wednesday that Honda will spend an estimated 23 billion yen to build a new assembly plant in Thailand, which will go into operation in the latter half of 2008 with annual capacity of 120,000 vehicles.

Upon completion of the plant, Honda will have the capacity to make 240,000 cars a year in Thailand. Some of those vehicles will be sold in the greater Asia-Pacific region, Fukui said.

In India, Honda will spend 230 million US dollars to build a second assembly plant by the end of 2009. The new plant will double its existing output capacity to 150,000 vehicles annually by 2010.

In South America, where Honda currently has a car plant in Brazil, the company will spend 100 million US dollars to build a new assembly facility in Buenos Aires, Argentina which is set to start , production in the latter half of 2009 with annual capacity of 300,000 vehicles. The plant will export the automobiles to markets across South America.

Fukui also said the company's joint venture in China, Guangzhou Honda Automobile Co, will build a research and development center there at the cost of 30 billion yen, which will introduce a car specifically-designed for the Chinese market. It is set for launch in 2010.

Asked about the size and price of the car targeted at the China market, Fukui hinted that it will be cheaper than other models in Honda's existing vehicle lineup.

'It will be a low-priced car unlike anything Honda would sell on its own. A decision has not been made on its size either, but it will probably be not big for pricing purposes. We currently only plan to sell the car in China, but I would not rule out the possibility of it being exported to Southeast Asia in future,' the Honda president said.

As for North America, Honda plans to open its second car assembly factory in Indiana and an engine plant in Canada in the autumn of 2008. Fukui said the car production capacity of Honda in the region will reach 1.62 million units by autumn 2008.

In Europe, Honda will have the capacity to roll out 300,000 vehicles a year by early 2008 when the annual capacity of its assembly plant in Turkey increases to 50,000 units from 30,000, Fukui said.

For the Japanese market, he said demand has been slightly weaker than Honda expected previously and as a result the company has postponed its schedule for importing its Acura luxury brand, currently only available in offshore markets, by two years to 2010.

'We expect conditions to remain severe in the domestic market,' he said, noting generally thin demand conditions in the local economy as a whole.

To cope with this Honda plans to improve the cost competitiveness of its minicars, or vehicles with engine displacement of 660 cc or less, Fukui said.

This will see Honda transfer the production of engines and parts for minicars from its own plant to the minicar assembly plant of its subsidiary Yachiyo Industry Co, he said.

By making this move, Honda aims to save on distribution costs and control inventory more effectively while improving production efficiency, a Honda spokesman said.


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## Bushroda

*Off The Starting Block*
19 Jul 2007, 0019 hrs IST

While releasing the prime minister's Economic Advisory Council's Annual Economic Outlook for 2007-08, the council's chairman, C Rangarajan, is reported to have said, "The Indian economy is on an unprecedented strong trajectory of economic growth". Following a growth projection of 9 per cent for 2007-08, that statement succinctly captures the essence of the current economic conjuncture. 

Vigorous growth in GDP, with a resurgent industrial sector and continued dynamism in services, has characterised the Indian economy since 2003-04. The economy clocked an annual average growth of 8.6 per cent during the last four years. The fact that there has been a perceptible shift in the growth trajectory and that such a shift is a very virtuous is well accepted. 

High growth generates its own momentum. With high growth comes high savings and investment, and these reinforce growth itself. Annual growth of 3.9 per cent leads to a doubling of per capita income in a little more than 18 years. It doubles in a little more than eight years when annual growth is 9 per cent. The magic of compounding coupled with accelerating growth makes dramatic transformation possible. The difference between a per capita income of $583 or Rs 25,825 in 2005-06 and $1,166 in 2013-14 is much more than $583. It is a revolutionary transformation to high savings and high investment, a diversified industrial base, popular demand for better education, health and infrastructure facility. 

Some disbelief in the sustainability of this high growth often stems from a simple extra-polation of the lacklustre growth performance of the country during the past until the 1980s and 1990s. What should not be forgotten is that the recent Indian growth experience is novel, but not unique. Other countries, particularly East Asian economies, have been through a similar phase. During the 1970s and 1980s these countries grew rapidly and consequently improved the economic and social well-being of their people. All this while, India remained confined to a slow or a medium growth trajectory. 

But India today is different from the India until the 1980s. India's reforms have encompas-sed the real, monetary, financial, fiscal and external sectors. Structural reforms have transformed the industrial sector from a command and control structure to a liberal and competitive one. The fiscal environment has been marked by prudence backed by fiscal responsibility legislations, steep reductions in import duties and other tax rates, introduction of VAT, and a taxpayer-friendly regime. The financial sector has been restructured with independent regulatory mechanisms in place. 

The EAC's inflation projection of 4 per cent for 2007-08 is also an encouraging sign. It underlines the abiding commitment that policy-makers have towards macroeconomic stability in general and low inflation in particular. Inflation has come down because of the combined effect of four factors. First, with the high base of the last year with prices of some of the commodities already very high, any rise looks small. Second, there have been improvements in the supply situation of some essential commodities such as wheat and sugar. Third, the monetary and fiscal measures - such as increasing the cash reserve ratio and decreasing the customs duty rates - activated a few months ago have finally taken hold. Fourth, with the rise in the value of the rupee vis-a-vis the US dollar, the prices of some imported goods have come down. 

Some questions have been raised about the exchange rate of the rupee vis-a-vis foreign currencies, particularly the US dollar in recent months. Is such an appreciation hurting growth in general and exports in particular? A fixed exchange rate works only if the appropriate level at which the rate has to be fixed is known. But, figuring out the optimum external value of a currency is an extremely arduous task. Under officially fixed rates, a currency runs the risk of being over- or undervalued. Overvaluation leads to recession and/or deflation, and undervaluation leads to overheating and/or inflation. 

These difficulties in deciphering the optimum value partly explain why many countries allow their currencies to float and find their levels at market-determined rates. But, even with floating rates, too rapid or too slow a speed of adjustment or undue volatility sometimes necessitates some government or central bank intervention. What will work and what will not depends on the country-specific circumstances. 

One such recent example of rapid change in currency value in the Asian neighbourhood is Thailand. The Thai baht has been rapidly strengthening over the last eight months. The abrupt closure of a footwear factory called Thai Slip Southeast Asia Import Export, employing over 5,000 workers near Bangkok, without any prior notice to employees, created a bit of a stir. The owners of Thai Slip reportedly claimed that they had no option because of the unrelenting rise of the baht in the last three to four months. 

There were workers' protests; and after talks, the company won a lifeline from the Thai Textile Institute, and many workers were back to work. The measures announced by the government of India on July 12, including on interest rates on pre-shipment and post-shipment credit and on duty drawback rates, clearly demonstrate that it is fully aware of the adjustment costs and is willing to act firmly and promptly to maintain the high-growth momentum.


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## Bushroda

*No to luxuries:Nilesh Shah*
19 Jul, 2007, 0020 hrs IST,Nilesh Shah, 

With uncertainty on the direction of interest rate, floating or semi-fixed interest arrangement (for home loans) should be preferred, says Nilesh Shah, chief investment officer of ICICI Prudential MF. 

THIS is probably the most commonly asked question, which most of the common people are deliberating. Direction of interest rates will determine host of their future decisions, be it pertaining to loan, investments or even day-to-day expenses. With consumer boom erupting in the Indian economy, and with younger population participating in consumerism (thanks to the outsourcing phenomena), coupled with increased entrepreneurial initiatives, credit off take in the Indian economy has increased substantially, contributing to the much-talked about liquidity problem. 

This liquidity concern, in turn, gave rise to another economic worry called inflation, which hit these consumers from the consumption perspective. With an overall economic growth getting hurt by the inflationary pressure, RBI, in its monetary policy, announced an increase in reverse repo rates and CRR hikes to control liquidity, and thereby inflation. However, this stance resulted into increase in interest rates, thereby again hitting common consumers, especially those who had already availed loans and are paying pinching EMIs. Inflation numbers seem to come under control with a variety of factors acting in its favour, ranging from base effect to better monsoon. 

However, another concern started emerging called rupee appreciation. Since the beginning of this year, the rupee has appreciated by about 9%. Though the rupee appreciation contributed in controlling inflation, it is hurting the export competitiveness of the economy. This is again not a heartily welcome situation for policymakers. In case the rupee appreciates further at the rate experienced since early this year, RBI may have to take some drastic steps such as market sterilisation or CRR hike. However, in my opinion, the rupee is unlikely to demonstrate drastic strengthening from current levels, and hence we may not really see any material intervention by RBI on this count. Thus, coming back to the first question, from hereon, what could be the direction that interest rates may take. I believe that in the short term, i.e. for the next three months, with WPI touching favourable limits, loan growth getting contained, improving asset liability mix of banks, we may not see aggressive policy stance by RBI and rates may remain stable at current levels. However, broadbased reductions in lending rates are unlikely in the short term. 

In the medium term, depending on sustenance in controlling inflation and capital inflows, the call on interest rates will be taken. Given the outlook on medium term, aggressive hike in interest rates does not seem to be a reality. 

From the global market perspective, though other major economies such as the UK, the areas around the euro zone, Australia and New Zealand are hiking interest rate, in the US we expect interest rates to be steady in 2007. This in turn will keep the capital inflows to India in comfortable levels, thereby not influencing the liquidity condition. 

Thus, the upside of interest rate seems to be capped and downward movement of interest rate seems to be protected. So overall, we expect a range-bound scenario. Under the given circumstances, my advice to borrowers would be to borrow only if it is a necessity. Time is not right for borrowing for luxuries. For instance, if a common person wants to borrow for his or her first house, one should not wait. But the decision to buy second or third flat from the investment perspective can certainly be stalled or the surplus money can be routed to other investment avenues. Similarly, with uncertainty prevailing on the direction of interest rate, floating or semi-fixed interest arrangement should be preferred. 

However, as a word of caution, I would like to mention that the statements and suggestions are based on various assumptions and are more like blanket advice. 

Individual borrowers may have specific requirements, individual risk appetite, and background, which may influence their decisions otherwise.


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## Bushroda

*NRIs may rival MNCs as investors in Indian economy*
Pramit Pal Chaudhuri, Hindustan Times
New York City, June 08, 2007

The single-largest source of foreign capital into India, non-resident Indians, may one day become the prime source of investment in the domestic economy. A new report on remittances to India says "NRIs now see India as an investment destination" and are already leaving their mark in real estate and the stockmarket.

Muzaffar Chishti of the Migration Policy Institute, author of "The Phenomenal Rise in Remittances to India: A Closer Look," says the most striking evidence of the fact that NRIs are seeing the Indian economy as an opportunity is the rise of so-called "private transfers."

There are two main types of NRI remittances. The most well-known type is "inward remittance" i.e. when an NRI wires or sends money to an individual in India, usually a relative. The other type is "private transfer" i.e. when an NRI deposits foreign exchange into a rupee account and then spends it inside India. 

The little-noticed trend, says Chishti, is how fast private transfers have grown. Between 2000-01 and 2005-06 private transfers grew by 88 per cent, more than double the rate of inward remittances. The former exceeded the latter by $ 2.3 billion last year.

The other trend is that North America, by far, is the largest source of remittances  44 per cent of the total. The Persian Gulf, which once dominated remittances even 10 years ago, is the source for only 24 per cent. 

Unlike the traditionally working-class Indian population in the Gulf, the middle-class North American NRIs are more likely to see India as a place for long-term economic investment. Nearly a third of all remittances are over $ 2,200.

In other words, NRIs are bringing in billions of dollars, converting them into rupees and personally spending them inside India. Chishti cites real estate experts as saying 20 per cent of all properties being sold for over $10 million in Delhi are being bought with NRI funds. "In the end, no one knows where or how much NRIs are investing in India," he says.

The amount of money concerned is enormous. Last year remittances to India totalled $ 24.6 billion, more than foreign direct investment or foreign institutional investment. Private transfers, which overtook inward remittances only in 2003-04, alone totalled about $ 13 billion last year. India received $ 15.7 billion in FDI equity flows during the same period.

The amount of money NRIs are transferring is still growing. Western Union, the worlds largest wire transfer company with $ 4 billion in revenues, says it saw a 102 per cent increase in person-to-person remittances to India last year. 

In the first quarter of this year, says company spokesperson Erenay Jackson, global transfers to India were "94 per cent higher than the same quarter last year." 

The company declines to say how much of its revenue comes from India, only saying 5 per cent of its revenue came from China and India. 

NRI investment in India, believes Chishti, is a vote of confidence in the new Indian economy. In the past, Indias rigid foreign exchange controls, the volatility of the rupee and the lack of growth meant NRIs would keep their money in repatriable foreign exchange deposits (counted as debt by the RBI and not included in remittance figures) rather than convert their money into rupees. 

Joydeep Mukherji of Standard and Poors notes that the recent rise of the rupee would have provided a strong incentive to convert dollars in NRI accounts into rupees. 

Another factor was 9/11 which drove some remittances out of the informal hawala market. Western Union, for example, experienced a surge in money transfers to South Asia as anti-terrorism finance laws were introduced across the world.

Chishthi is critical of the governments lack of imagination on using NRI remittance for development purposes. For a while the surge in personal transfers was explained away as being overseas Indians cashing in various NRI-targeted bond issues. 

But the surge continued even in years when no bonds were maturing. "Official policy has long focused on deposits. The real story is remittances," he says.


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## Bushroda

*India can be IT research powerhouse, says Microsoft*
July 19, 2007

The story of Microsoft in India is stuff dreams are made of. Having set up India operations in 1990, Mirosoft's current headcount stands at 5,000. The company primarily has six business units in India -- Microsoft Corporation India (Pvt) Ltd (the marketing division), Microsoft Research India, Microsoft India Development Center, Microsoft Global Technical Support Centre, Microsoft IT and Microsoft Global Services India. 

As India moves into its next phase of growth in the global knowledge economy, Microsoft continues to work in tandem with government, Indian IT industry and academicians. 

In an exclusive e-mail interview with Senior Associate Editor Indrani Roy Mitra, Microsoft India chairman Ravi Venkatesan shares his vision. Read on. . .

*We feel the general population is overawed by IT majors like Microsoft, Infosys, Wipro, etc. Could you please explain what Microsoft stands for / does in India?* 

Ever since we set up India operations in 1990, a strong India focus and commitment for strengthening India's presence in the digital economy has topped our agenda. We are committed to delivering local strategies that are in sync with India's unique environment. Today we have offices in 10 cities, including Bangalore, Chennai, Hyderabad, Kolkata, Mumbai, New Delhi, Pune, Nagpur, Ahmedabad and Chandigarh. 

India is significant to Microsoft from, both, a market perspective as well as from a talent perspective. Accordingly we engage with India on a multitude of areas and our long-term commitment is evident from the fact that India is one of the few countries apart from the US where we have an end-to-end presence through our six business units, namely Microsoft Corporation India (Pvt) Ltd (the marketing division), Microsoft Research India, Microsoft India Development Center, Microsoft Global Technical Support Centre, Microsoft IT and Microsoft Global Services India.

Today, we have strength of over 5,000 employees across these six business units.

Our chairman Bill Gates, on his last India visit in 2005, committed $1.7 billion India investment which is a testimony to the increasing confidence of the company in India. Today, India is among the fastest growing subsidiaries for Microsoft in Asia and is poised to be among the top 3 over the next 5 years.

Our focus is on becoming a key IT partner to Indian businesses, the Indian government and the IT industry. We will support and fuel the growth of the local IT industry with a thrust on driving Innovations for, from and with India and under our commitment of 'Unlimited Potential,' create a more inclusive growth for the billion Indians by relevant and affordable access to computing. 

*A lot is being said these days about corporate social responsibility. What responsibility, according to you, should corporates have to improve the state of living?*

All of us -- individuals, families, and organisations -- have a responsibility to contribute to the society in whichever way we are able to. Corporates, of course, have the means to effect change on a larger scale, and it is an opportunity they should take seriously. Having said that, I would just like to add that being responsible is not just about, say, spending money on a cause. It means being conscious of the impact -- both good and bad -- your business could have on the world you inhabit. 

As part of the IT sector, for instance, we at Microsoft are constantly looking for ways in which technology can benefit the less fortunate majority of humans. Our global effort, Unlimited Potential, expands and accelerates Microsoft's commitment to facilitate sustained social and economic opportunity for the more than five billion people living in every country around the world who do not today benefit from technology. And this is not about charity but more about responsible growth. 

*Thousands of children are educated, orphans are cared for, destitute are looked after and the poor are fed under your social project -- Indian Giving Campaign. Could you please tell us its modus operandi? How will you rate it against its parental charity initiative Giving Campaign?*

This is an extension of Microsoft's efforts at creating social and economic opportunities that change people's lives and transform communities. Through its matching contributions programme, Microsoft allows its employees to direct corporate contributions to nonprofit organisations working to improve lives in the country. Donations that India based employees make to eligible nonprofits are matched Rupee for Rupee by the company, up to Rs 50,000 per employee per year. 

We do believe it is not enough to just give money but giving your time and effort is as important. Under our employee volunteer programme, we set aside three working days per employee per year to enable them to volunteer their time and and donate other resources such as their knowledge and expertise towards the betterment of communities. 

*A recent report stated that Microsoft is to hawk PCs to school kids. What is your plan for education?*

It is the investment made by India in human capital that has led to its success. If India has to maintain and rise further in the emerging global knowledge economy, it has to ensure that it is able to create an enabling environment for education and jobs and opportunities. It has to innovate to be able to do this. 

Keeping this in mind, transforming education is one of the three key initiatives Microsoft Unlimited Potential has committed itself to. Over the past several years Microsoft has been using a combination of quality content, partnerships, training, and broad access to transform education In India. 

Under its programme, Project Shiksha (the global partners in learning programme) Microsoft has worked with state governments, and other key stakeholders to offer a spectrum of education resources including tools, programmes, and practices. Going forward, Microsoft will both scale up the existing initiatives and broaden the opportunity beyond institutions to enable access for individuals under a 'Connected Learning framework' called IQ. IQ is essentially a combination of an online and offline content tied into all aspects of a student's learning process and growth. 

The IQ PC includes Windows, Office/Works, Encarta, Student 2007 and specialised education solutions from a host of key partners. The content focuses on the key concerns of families, be it the learning of English as a language, tutorials for competitive examinations, or ensuring a seamless transition from class work to homework. 

*Where do you see Microsoft in five years, vis-&#65533;-vis its competitors? *

If you see Microsoft over the last few years, we have grown considerably and now have a multi core strategy of growth. And over the years we have been able to consistently create a leadership position in every business area we operate in be it gaming, software or mobile computing. 

We see ourselves doing equally well over the next five years. A lot of businesses that we are now getting into are areas that are emerging and developing themselves, so more than competing with other players, the challenge in these areas will be the evolving customer needs and business models themselves. For instance, with customers moving increasingly online the delivery of software over the net as a service is starting to gain popularity. 

However, most players are trying to attune themselves to how to make this efficient, user friendly and scalable and are grappling with the question of whether customers will adapt this consumption model permanently. Microsoft believes it will be a combination of online and offline usage that will spur adoption. We call it the software plus service approach, and our focus will be on getting this model right and enabling customer adoption.

There are other new areas that we have successfully forayed into recently, such as search-based advertising, gaming and entertainment devices and so on. While we face intense competition in these against a set of very capable competitors, the market growth itself in these areas will be so high in the coming years that we will be able to gain considerable ground. 

*In October, you launched live.com mainly, it is said, to counter Google's search engine. Please tell us more about it.*

Windows Live is a new set of Internet services and software designed to put the individual in control by offering complete choice and customization.. The goal with live services is to create a seamless experience between offline and online technology experiences, and help customers push into the next phase of computing by giving them access to what they want -- how and when they want it, regardless of connectivity or device. 

Overall, this is part of Microsoft's software+services strategy. Geared towards enabling customers to optimize full capabilities of the networked environment, and to seamlessly bring together the information, relationships and interests they care about. We believe that no other company has the assets, audience and aspirations to deliver experiences and solutions that span our work styles and lifestyles in this age of Internet services. 

*Could you please share with us your vision of Microsoft India?*

Globally, with Unlimited Potential, we are determined to reach IT to the next billion people by 2015. India is one of the most exciting and important markets for Microsoft right now&#65533;both the challenges and opportunities are huge. In addition to being a growth sector of the Indian economy, information technology is also a key enabler of social development. In India especially, the progress on many fronts is already well underway and will continue to mature.

The task that we have today is to make technology pervasive and useful in the everyday lives of more and more people. The growth of IT penetration in India, currently, might be rapid, but it is not rapid enough. And while affordability is critical, it is imperative for technology to be relevant and accessible too. Only when we meet these criteria will the adoption of technology grow exponentially. At Microsoft India, this is what we seek to deliver through Unlimited Potential. 

*Please throw some light on the research initiatives undertaken by Microsoft India. What impact are they going to have on India's IT growth?*

In India, Microsoft conducts research primarily through Microsoft Research India which, like its other sibling labs, conducts basic and applied research in computer science and allied areas. 

MSR India currently focuses on six areas of research: Cryptography, Security and Algorithms, Digital Geographics, Mobility, Networks, and Systems, Multilingual Systems, Rigorous Software Engineering, and Technologies for Emerging Markets. 

An important objective for MSR, in addition to contributing to Microsoft's products and businesses, is to advance the state-of-the-art in computer science. In fact, a majority of the results of our research are published in leading conferences and journals, and are therefore available for researchers and technologists across the world, including India, to use to advance their technologies.

We firmly believe that research leads to innovation, which is critical to technological leadership. MSR India is committed to enhancing India's research pipeline and have a number of initiatives to help achieve this. MSR India's External Programs and Research Group conducts a number of programmes, including collaborating with Indian academia, granting PhD Fellowships, research grants, research funding and travel grants for researchers. 

In addition, some of the MSR researchers also hold adjunct faculty positions in leading technological institutions. MSR India holds an annual research symposium- TechVista- which brings together some of the world's leading researchers and technologists who talk about the cutting edge of research in different domains. TechVista aims to inspire the young, potential Indian research talent to take up advanced studies and adopt research as a career. 

We think India has the potential to become a research powerhouse that can drive technology across the world as well as in India, and are confident that our efforts will contribute towards fulfilling this potential.


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## Bushroda

*The Indian Tigers African Safari*
By J. Peter Pham

While the African travels of Chinese leaders and their troubling arms sales to regimes on the continent, have caused increasing concern in Washington and other Western capitals, Indias growing interests in Africa has gone largely unnoticed. Hence, most media ignored Indian External Affairs Minister Pranab Makherjees visit to Ethiopia at the beginning of the month, a trip during which he not only met with African Union Commission Chairperson Alpha Oumar Konaré, but also signed a series of wide-ranging bilateral economic and political agreements with his Ethiopian hosts. As the United States continues to go about building its own framework for broad long-term engagement with an Africa that is increasing important strategically, diplomatically and economicallylast week President George W. Bush appointed Army General William E. Kip Ward as the first head of the new unified combatant command for Africa (AFRICOM)the significance of Indias political and commercial ties across the continent needs to be examined. 

To a certain extent, Indias approach to Africa can be analyzed under the same categories which I suggested last year might be helpful to understanding the African strategy of the Peoples Republic of China: quests for resources, business opportunities, diplomatic initiatives, and strategic partnerships.

The quest for resources. With its economy projected to grow by somewhere between 8 and 10 percent annually over the next two decades and its population of 1.1 billion accounting for one-sixth of humanity even as its proven petroleum reserves remains stagnant at less than 0.5 percent of the worlds total, India faces a serious energy crisis. According to data from the International Energy Agency, India currently imports about 75 percent of its oil, a foreign dependence projected to rise to over 90 percent by 2020. Given that most of these imports are coming from the volatile Middle East, it is more than understandable that India would seek an alternative supply of energy in the burgeoning African oil sector. Thus, for example, the overseas division of Indias state-owned Oil and Natural Gas Corporation (ONGC), ONGC Videsh (OVL), has aggressive sought stakes in exploration and development across the continent. In 2005, teaming up with the worlds largest steel maker, Mittal (now Arcelor Mittal), owned by London-based Indian billionaire Lakshmi Mittal, ONGC Videsh formed a new entity, ONGC Mittal Energy Ltd. (OMEL), which agreed to $6 billion infrastructure deal with Nigeria in exchange for extensive access to some of the best production blocks in the West African country. Another state entity, the India Oil Corporation (IOC), has invested $1 billion in an offshore block in Côte dIvoire. Other African countries being courted by Indian concerns include Burkina Faso, Equatorial Guinea, Ghana, Guinea-Bissau, and Senegal.

Hydrocarbons are not the only natural resources being sought by the growing Indian economy. Vedanta Resources, a publicly traded metals conglomerate founded in Mumbai in 1976, has invested over $750 million in Zambian copper mines, while just two months ago the Liberian parliament ratified a 25-year deal allowing Arcelor Mittal to launch a $1 billion iron ore mining project that will eventually employ 20,000. In Senegal, a joint public-private Indian group has invested $250 million in exchange for a stake in colonial era enterprise, Industries Chimiques du Senegal, with rock phosphate mines and plants to produce phosphoric acid used in agriculture. 

Business opportunities. A report published in April by Chatham House (formerly the Royal Institute of International Affairs), noting that African countries are proving to be very attractive to Indian investors, observes that India has sought to gain a foothold in these countries by writing off debts owed under the Heavily Indebted Poor Countries Initiative and restructuring commercial debts. At the same time, the Export-Import (EXIM) Bank has extended lines of credit to governments, commercial banks, financial institutions and regional development banks. Within the framework of the Techno-Economic Approach for Africa-India Movement (TEAM-9) it launched in 2004, India has extended over $500 million in highly favorable credit to eight African countries (with six others lined up to join) linked to the purchase of Indian goods and services. Leading exports from India to Africa include machinery, transport equipment, paper and other wood products, textiles, plastics, and chemical and pharmaceutical products. Major Indian conglomerates like the Tata Group and the Mahindra have made considerable headway in Africa as have infrastructure-building concerns like KEC International, the overseas arm of Kamani Engineering Corporation, which has projects in Algeria, Ethiopia, Ghana, Kenya, Libya, Mozambique, South Africa, Tunisia, and Zambia. With HIV/AIDS and other diseases ravaging the continent and driving up demand for lower-cost generic anti-retrovirals and other drugs, Indian pharmaceutical firms like Cipla and Ranbaxy have opened entirely new markets. According to the Confederation of Indian Industry (CII), trade between the subcontinent and Africa has been growing at the annual rate of 25 percent in recent years. Last October, a CII-sponsored Conclave on India-Africa Project Partnership in New Delhi attracted over 750 delegates and produced business deals worth $17 billion.

Diplomatic initiatives. Over the last decade India foreign policy establishment has endeavored to overcome the institutional neglect to which it had consigned Africa after the promising start of the post-colonial Non-Aligned Movement. Until 2003, the Ministry of External Affairs had only one joint secretary with responsibility for the singular Africa division; nowadays, three joint secretaries manage three regional divisions covering the continent. In the 1990s, India was closing down diplomatic missions in Africa as an economy measure; today it has twenty-five embassies or high commissions on the continent with four others scheduled to open over the next two years. The attention has already paid off. Last year the chair of the Council of Ministers of the Economic Community of West African States (ECOWAS), Foreign Minister Aïchatou Mindaoudou of Niger, threw the weight of the 15-member sub regional group behind Indias bid for a seat on the United Nations Security Council. 

Building strategic partnerships. The specter of Mahatma Gandhiwho, it should be recalled, began his career as an activist in South Africanotwithstanding, Indias leadership has recognized that a rising power also needs the ability to project hard power in proportion to its economic and other elements of its soft power. Since the end of the Cold War, India has participated in UN peacekeeping operations in Mozambique, Somalia, Angola, Sierra Leone, Ethiopia, Eritrea, the Democratic Republic of Congo (DRC), and Liberia. The Indian contingents with the missions between Ethiopia and Eritrea (UNMEE) and in the DRC (MONUC) represent the largest national contributions to both forces, while the contingent deployed since January to the Liberian mission (UNMIL) under Commander Seema Dhundia enjoys the distinction of being the first all-female UN peacekeeping unit ever deployed. India has also invested in future African military leaders, training officers from a number of African countries in the academies of its three service branches as well as the postgraduate National Defence College in New Delhi and Defence Services Staff College in Wellington. 

Earlier this year, Vice-Admiral J. Mudimu, chief of the South African Navy, paid an extended visit to his Indian counterpart, Admiral Sureesh Mehta, chief of the Naval Staff of the Indian Navy, to work out the mechanisms for cooperation between the two countries for regional security in the Indian Ocean, particularly for dealing with terrorism and piracy. The two officers also explored the possibility of creating a naval component to the loose trilateral political alliance of India, Brazil, and South Africa (IBSA) that was launched in 2004 achieve common positions at the UN, the Doha Rounds, and other multilateral settings for the three major southern nations.

Last year, the National Security Strategy of the United States of America declared that Africa holds growing geo-strategic importance and is a high priority of this Administrationas it should be for a region which not only currently supplies the U.S. with more hydrocarbons than the Middle East, but also presents significant political, security, and humanitarian challenges. However, while the growing influence of any other major actor on the continent bears very careful watching, there are a number of reasons why New Delhis increased engagement in Africa, unlike that Beijing, ought to be cautiously welcomed in Washington.

First, Indias modus operandi not only benefits Indians, it also benefits Africans. As Karen Monaghan, the National Intelligence Fellow at the Council on Foreign Relations, observed in an audio podcast last month, India can teach Africa a few things about the importance of entrepreneurship for driving and generating jobs, and generating income, and generating growth, noting that Indian companies are much more integrated into African society and the African economy, hiring locally and emphasize training Africans on how to maintain and repair the plants they build. In short, the lessons which India learned while freeing itself from the oppressive Hindu rate of growth with the economic liberalization begun in the 1990s under then-Finance Minister (now Prime Minister) Manmohan Singh are precisely those African states need to study for their own development, rather than the no strings attached blandishments which are offered to them by Chinas mercantilist mandarins. Moreover, for African states, many of which are plagued by instability, autocracy, and ethnic and religious strife, India offers the example of a successfully developing country where speakers of twenty-two different official languages (in addition to English) as well as an estimated 1,652 mother tongues have co-existed largely peacefully for six decades, acquiring ever greater national consciousness while building the worlds largest democracy. Despite its difficult birth as an independent nation in the midst of the religious partition which created Pakistan, India is home to what, by most measures, is the second largest Muslim population of any nation in the world and, until the election today of his successor, had a widely popular Muslim, A.P.J. Abdul Kalam, as its president (the prime minister, who continues in office, is, as his name indicates, a Sikh, while the chair of the ruling coalition, Sonia Gandhi, is the Italian-born Roman Catholic widow of assassinated former Prime Minister Rajiv Gandhi). 

Second, the burgeoning Indian-African relationship is good for the United States overall. Earlier this year in an essay for The National Interest, former U.S. Ambassador to India Robert D. Blackwill argued: It is safe to say that the alignment between India and the United States is now an enduring part of the international landscape of the 21st century. The vital interests of both Washington and New Delhi are now so congruent that the two countries can and will find many ways in which to cooperate in the decades ahead. Over time, the U.S.-India relationship will come more and more to resemble the intimate U.S. interaction with Japan and our European treaty allies. That type of strategic partnership, however, requires nurturing, and thus America will have to take into account the interests of friends like India in places like Africa. 

For its part, among other things, the U.S. can benefit in many of its security preoccupations in Africa from the tacitand occasionally explicitsupport of India, which has enormous political capital from its longtime leadership of the Non-Aligned Movement as well as its support of anti-colonial and anti-apartheid movements on the continent. On the other hand, no country has lost more of its citizens to Islamist terrorism than India, which - even today - remains one of the states most targeted by jihadis. Hence New Delhi is the potentially ideal complement to Washingtons counterterrorism agenda for Africa, able to articulate the anti-extremism message credibly in places where, quite frankly, our credibility is very limited. Furthermore, while America cannot expect a proud and democratic nation like India to be its lackey, neither will the latter country likely to present a direct challenge to core U.S. interests in what is now the geostrategically vital region of Sub-Saharan African. On the other hand, as it play commercial catch-up (Indias exports amount to just 10 percent of Chinas), the subcontinental countrys economic interests are more likely than not to clash with those of the Middle Kingdom.

Thus there are two Indian proverbs which should kept in mind: Do not blame God for having created the tiger, but thank him for not having given it wings and Two swords do not fit into one scabbard. These are precisely the prudent counsels for U.S. policymakers now that India has entered the African arena. Eagle and tiger can both coexist as long as both are cognizant of the other and both avoid impinging on each others spacethat is to say, so long as each country respects the vital interests of the other in the African theatre. The dragon, on the other hand, being a winged serpent, potentially intrudes on both the aquiline aerie and the tigrish lair.


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## Bushroda

*IT firms to set up more overseas centres: Premji*
19 Jul, 2007, 1745 hrs IST, PTI

BANGALORE: Information technology czar Azim Premji on Thursday said with the sharp appreciation of the rupee, the trend of Indian IT firms setting up overseas centres in new low-cost destinations will accelerate. 

The chairman of the country's third biggest software exporter Wipro Ltd said the Indian software and BPO industry was evaluating or had already effected setting up centres outside the country. 

"I think that trend will accelerate," Premji said. 

"Centres (set up by Indian companies) have already come up in China...new centres are coming up in the Philippines," he said in response to a query at a press conference. 

Going forward, such units would come up in eastern Europe, parts of Latin America, Vietnam and even in India's neighbourhood if political stability returned there, he said. 

Premji said it was important to see the Indian software industry not only added value to its European, American and Japanese customers but also remain competitive with rest of the world in terms of value for money proposition. 

More overseas centres by Indian firms notwithstanding, Premji said, India still continued to be the best bet without question for scalability, quality and leadership talent. 

Asked about his outlook on the US market, he said despite weakness of the dollar, the US economy was fundamentally, reasonably strong. "So, one would expect demand from the US in the current year is as strong as we have seen last year". 

He said with European economy stronger than last year and the Japanese economy strong, the global economy was strong. 

"Demand is not a limitation; it's our ability to win orders and execute and operational efficiency," he said. "With all the attention that global sourcing has got, the Indian story is very strong".


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## Bushroda

*India Eyes 10% Economic Growth*
By . Agence France-Presse 

*Higher than expected*

July 18, 2007 -- India on July 17 said its resurgent economy could touch an annual growth of 10% in the financial year beginning April 2008, provided its ailing farm sector picks up.

The Indian economy grew faster-than-expected at a record 9.4% pace in the year to March, beating New Delhi's forecast of 9.2% in May and raising hopes of greater foreign capital inflows. 

Finance Minister Palaniappan Chidambaram said India's sizzling growth compared well with China's economy. "India's growth rate compared to China is not bad in view of the fact that India has to follow democratic norms and generate (political) consensus, evolve laws and endure criticism before moving forward," the finance minister said.

India's growth lagged behind Asian rival China's 10.7% in 2006.


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## Bushroda

*Wipro: Strong Rupee Slowed Profit Growth*
By RAJESH MAHAPATRA 07.19.07, 3:59 AM ET
FORBES, NY

NEW DELHI - India's third-largest software company, Wipro Ltd., said Thursday a sharp appreciation of the rupee caused its profit growth in the April-June quarter to slow to 16 percent.

Bangalore-based Wipro (nyse: WIT - news - people ) reported a net profit of 7.1 billion rupees (US$175 million; euro127 million) in its fiscal first quarter compared with profit of 6.14 billion rupees in the same period a year ago. The growth was sharply lower than the 44-percent profit increases of the previous quarter and the same quarter a year ago.

Profit for the January-March quarter was 8.61 billion rupees (US$200 million; euro145 million).

The rupee's strength hurts India's technology firms, which do outsourcing work for Western companies, because a significant chunk of their income is denominated in dollars.

Wipro's sales totaled 41.83 billion rupees (US$1.03 billion) during the April-June period, up 34 percent from a year ago.

"The results for the quarter are satisfying considering the strong headwinds faced by us in the form of an appreciating rupee," Chairman Azim Premji said.

The earning numbers, which conform to U.S. accounting standards, fell short of analysts' expectations. Wipro shares dropped 1.3 percent to 499.85 rupees as trading opened shortly after the results were announced.

"Overall, the first-quarter numbers are disappointing, and we expect the shares to remain weak in the near term," Trideep Bhattacharya at UBS (nyse: UBS - news - people ) Securities told Dow Jones Newswires.

Wipro, which writes software for companies such as General Motors (nyse: GM - news - people ) and Cisco (nasdaq: CSCO - news - people ), said it won 39 new clients during the April-June quarter, including a US$130 million outsourcing deal from a European firm. It didn't name any of its new customers.

Outsourcing orders made up 70 percent of total sales. The company also has interests in desktop manufacturing, lighting and personal care products.

The rupee rose nearly 7 percent against the U.S. dollar during the three months through June.

"There is nothing that has happened in the US economy or the Indian economy that the rupee should have appreciated so much," said Suresh Senapaty, Wipro's Chief Financial Officer.

Last week, it bigger rival Infosys Technologies (nasdaq: INFY - news - people ) cut revenue and profit forecast for the full year citing the rupee's unexpected strength.

Senapaty said Wipro was trying to offset the currency impact by charging new clients 4 percent to 5 percent higher.

"We are also renewing our existing deals at 2.5 percent to 4 percent above the average billing rate," he told reporters. The company previously billed its customers an average hourly fee of US$28 (euro20) per worker employed at it low-cost centers in India.

The higher fees are likely to be offset by a wage hike at the company that goes into effect next month.

Wipro, which is also listed on the New York Stock Exchange, hired 4,319 new employees in the latest quarter, increasing its total staff strength 6 percent to 72,137.


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## Bushroda

*No policy to build new towns*
19 Jul, 2007, 0110 hrs IST,T K Arun, TNN

The rupee, its now settled, can only strengthen against the dollar. What can the government do to help industry in this situation? One thing that is entirely in the governments hand to do is to bring down the cost of one vital factor of production  land. It will call for a major policy change, to remove the present artificial scarcity of urban land that is driving up real estate prices to ridiculous levels. 

Productivity gains in Europe and Japan stand to reduce the current premium on the US as a global investment destination, according to Citibank economist Don Hanna. This would add to the pressure on the US to cut down its current account and fiscal deficits. A weaker dollar would be a natural corollary. 

The flip side is that the dollar would, in such a scenario, weaken against most currencies, including the currencies of Indias trade rivals. This would mitigate the impact to a certain extent. However, the Indian economy would need to adjust and several structural rigidities that stand in the way of flexible adjustment would need to be removed. 

Land is one constraint that has received the least policy attention, specifically urban real estate. According to the 2001 Census, only 28% of Indians live in towns. No economy can grow at a sustained 9% without the share of the urban population rising rapidly. 

The Central Statistical Organisation estimates Indias present population to be 112.2 crore. Assume, rather conservatively, that this number would be 14% larger in 2020. That would make it 128 crore. Assume the share of urban population goes up to half  some 64 crore people would live in towns. Let us assume that some progress in urbanisation has already taken place since the 2001 Census and that the present level of urbanisation is 31%; that is, around 35 crore people live in towns already. That would still leave the additional number of town-dwellers by 2020 at 29 crore. 

Assume that population density in a decent town is 12,000 per sq km (as per the 2001 Census, just 10 districts out of the countrys 593 had a population density higher than 12,000 per sq km.) At that level of population density, India would need additional urban space of 24,166 sq km to accommodate those additional 29 crore people. To put it differently, India would need 16 more cities, each the size of Delhi. 

Do we have any policy in place to build new towns on this scale? Absolutely not. What we do have by way of policy to augment urban infrastructure are two things: one, a policy to create Special Economic Zones and two, a central urban renewal mission named after Jawaharlal Nehru. The area of an SEZ has been capped at 5,000 hectares or 50 sq km. And urban renewal doesnt quite yield new towns. 

Right now, acquisition of land is seen as the biggest problem even in getting these small chunks of urban infrastructure called SEZs going. How will we ever release land on a scale large enough to build 16 new Delhis, without the country witnessing extreme turmoil, say 500 Nandigrams? 

The problem is with land acquisition. Why should land be forcibly be taken away from peasants, big and small? Why cant we create conditions in which peasants happily and voluntarily make land available for building towns, factories, etc? 

This is not all that difficult. The farmers who sold land to builders who built Delhis suburb of Gurgaon are fabulously rich, compared to their brethren who continue to till the land. The main thing is to make sure that farmers get a price that rids them of anxiety and uncertainty about future incomes. 

It is not easy to replicate Gurgaon everywhere, for the simple reason that every new town cannot be near Delhi or Mumbai. We need policy slightly more evolved than allowing farmers to sell land to builders at mutually agreed prices. 

Two things need to be done. Entire zones, measuring tens of thousands of sq km, need to be earmarked for free, automatic conversion from farm land to urban land, on the owners request. Right now, such conversion is an arbitrarily granted form of patronage, which can be purchased from politicians and bureaucrats at a very high price. This must change. This will immediately fetch the farmer a much higher price than at present for his land  he would sell it after converting it to commercial land. 

Further, farmers need to be organised into builders of towns. This is not some idle dream but what a group of farmers have accomplished in a town called Magarpatta, near Pune. 

Farmers can form limited liability companies, pooling their land as capital. They can lease out the land, or better still, create built-up area of the kind required for offices and factories and lease out this built-up area. If private builders can access credit on the strength of their notional land banks, why shouldnt farmers companies get the requisite credit for their projects on the strength of their real land bank? They can then sell a variety of services to those who come and occupy their built-up spaces. Of course, these are just some of the many possible policy options. The point is that we need to think of those options. Now.


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## Bushroda

*Bessemer to Lift India Investment*
By REBECCA BUCKMAN
Wall Street Journal
July 19, 2007

Another big U.S. venture-capital firm, Bessemer Venture Partners, is expanding its presence in India, earmarking $350 million of a new $1 billion fund to tap the country's fast-growing economy.

Bessemer has made 12 investments in Indian companies from its current investing fund, raised in 2004. They include a hotel chain, a financial-services firm and a company that makes components for air conditioners, says Rob Chandra, the Bessemer managing partner heading up the firm's Indian efforts. The new fund is expected to be announced today.

Bessemer's move to devote a portion of the firm's main fund for Indian investments -- instead of raising a separate, dedicated fund -- runs counter to the trend in Silicon Valley, where firms have set up distinct funds to invest in countries like India and China.

Mr. Chandra says investing globally out of a single fund would create a "good alignment of interests" between the fund's investors and Bessemer's partners, who would make money only if the fund as a whole turned a profit for its investors. Investors in venture firms with multiple funds often make money in some funds but lose money in others, he said.

Bessemer will likely collect a traditional "management fee," generally at least 2% of assets, of the $1 billion fund.


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## Bushroda

*India's Larsen & Toubro Q1 net up 140 pct at 3.77 bln rupees*
FORBES, NY
07.19.07, 8:50 AM ET

MUMBAI (Thomson Financial) - India's Larsen & Toubro said it posted a 140 pct rise in first-quarter net profit due to a fast-growing capital goods sector, a booming economy, a robust order book and quick turnaround in order execution.

The engineering and construction major said its capacity expansion programs are 'on stream' and that it is confident it will maintain momentum in revenue growth and profitability in the near to medium term. 

Net profit for the quarter to end-June rose to 3.77 bln rupees from 1.57 bln a year ago while gross sales and service revenue from operations rose 30 pct to 45.74 bln rupees.

Operating margins improved by 1.1 pct over the year. Chief financial officer YM Deosthalee said he expects the current trend in margins to remain steady for the year. 

He added the company's order book was around 420 bln rupees as at June 30, up 45 pct from last year. 

Of the order book, 36 pct of the orders were from manufacturing sector, 22 pct from the hydrocarbon sector, 12 pct from processing industries and 11 pct servicing the power sector. 

In the first quarter, the company's order inflow was 98.81 bln rupees, of which 14.00 bln rupees were booked by international players.

L&T said it currently has 30 bln rupees in orders from the defence sector and expects around 50 bln rupees worth of business from the sector over the next two years. 

Other income for the period rose sharply to 2.10 bln rupees from 650 mln rupees a year ago, due to a translation gain on the appreciation of the rupee against currencies like the US dollar and the yen. 

Deosthalee said the company has increased its portfolio of international borrowings in the last few years, with the holdings mostly in yen or US dollars. He expects rupee to trade in the range of 40.00-40.50 against the greenback in the short-term but expects the Indian unit to appreciate further over next 2-3 years.

The company said it is yet to finalise a site for its new shipbuilding yard, but expects to make an an announcement on the matter soon.


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## Bushroda

*Re eases as oil cos step up dlr buying*
19 Jul, 2007, 1015 hrs IST, REUTERS

MUMBAI: Rupee slipped on Thursday as rising oil prices spurred oil companies to buy dollars, though dealers expected capital flows into the fast-growing economy to bolster the local unit. 

At 9:45 am, the rupee was at 40.43/44 per dollar, easing from Wednesday's 40.4150/4250, and drifting further from a nine-year peak of 40.28 hit in late May. 

"Oil companies have called the shots in the morning, but trading has been subdued, and most of the market is looking for direction," said a senior dealer with a private bank. 

A fall in US gasoline stocks pushed up oil prices to above $76 a barrel. Oil is India's largest import. Still, the prospect of strong foreign fund flows, specifically into local equities, limited the rupee's losses, with a section of the market building fresh positions in the local unit on expectations of a renewed burst of capital inflows. 

The spectre of central bank intervention weighed over the market, though the Reserve Bank of India was not seen buying dollars in early trade, dealers said. 

The central bank is widely believed to have bought dollars recently to keep a lid on the rupee, which has gained about 9.5 per cent against the dollar in 2007 to be Asia's best performing currency this year. 

The rupee's rise has dented the profits of Indian exporters, and India's third-largest software services exporter, Wipro, said on Thursday that the rupee's rise had an impact of 3.4 per cent on April-June margins.


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## Bushroda

*India climbs up the income ladder* 
Siddharth Zarabi & Asit Ranjan Mishra / New Delhi July 20, 2007 

Economic growth and an appreciating rupee will see India break into the ranks of lower middle-income countries this fiscal year, a few years earlier than expected. 

At $1,021, the Prime Ministers Economic Advisory Council has projected that per capita income would increase over 25.58 per cent this fiscal, against $831 in 2006-07. 

This would put India in the same category as China, though the latters per capita income was estimated at $2,165 in 2006. 

This years projected increase in per capita (in dollar terms) is nearly double the average 13 per cent growth between 2003-04 and 2006-07. In the same four-year period, GDP grew an average 8.6 per cent. 

Council member and ICRA chief economist Saumitra Chaudhuri said that using Central Statistical Organisation data, the council arrived at 2006-07s per capita income in dollar terms assuming an exchange rate of Rs 45 per dollar. 

For the current years projection, the exchange rate assumed is Rs 41 to the dollar. It is a commendable achievement, but there is so much to do. $1,000 is not a big amount these days, he said. 

However, World Bank lead economist in India Dipak Dasgupta described it as a huge thing in the broader scheme of things. It really is the effect of higher GDP growth. The exchange rate does not have that big a role, he said. 

India is currently classified as a low income country by the World Bank, which categorises its 185-member countries on the basis of their 2006 gross per capita into four groups: Low income countries (per capita income of $905 or less), lower middle-income countries (per capita income between $906 and $3,595), upper income countries (between $3,596 and $11,115) and high income countries ($11,116 or more). 

The banks income classifications are key to deciding the lending category of the country concerned. 

This signals that India is no more a poor country  an impression that was anyway fading away. The International Development Association may reduce aid as India is up a step on the ladder, said Arvind Panagariya, professor of economics, Columbia University.


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## Bushroda

*Billionaire Chandra Plans Homes for India's Masses*
By Subramaniam Sharma and Haslinda Amin

July 19 (Bloomberg) -- Billionaire Ramesh Chandra's Unitech Ltd., marketing apartments for as much as $1.5 million, is considering building homes that could sell for 1 million rupees ($24,746), as economic growth lifts more Indians out of poverty. 

``As people come above the poverty line, there will be a requirement for mass housing,'' Chandra, 68, said in an interview in Gurgaon, near New Delhi, yesterday. ``They will not be able to afford 4 million rupee houses, their demand will be mainly for 1 million rupee or 1.5 million rupee houses. And for that the demand will be phenomenal.'' 

At least 291 million Indians will increase their annual household income to at least 90,000 rupees, or $5.40 a day, by 2025, McKinsey & Co. estimated in May. That's almost equal to all the people in the U.S., the world's third-most populous nation. 

DLF Ltd. and Unitech, India's biggest developers by market value, are benefiting as Asia's fourth-biggest economy expands at an average 8.6 percent a year. They may need to turn to the mass market if a glut develops in the luxury market now favored by many builders, said Suhas Naik, who manages the equivalent of $100 million at IL&FS Ltd. in Mumbai. 

``Real estate companies don't have a choice, with millions of square feet proposed to be developed,'' Naik said today. ``How much can the luxury segment absorb?'' 

*Land Reserves* 

Unitech has land reserves of 14,500 acres (5,868 hectares), it said in its annual report for the year ended March 31. Shares of Unitech fell 5.5 rupees, or 1 percent, to 543.65 rupees on the Bombay Stock Exchange today. 

``We want to start mass housing, we are doing some research,'' Chandra said. 

The country will need as many as 10 million new housing units a year by 2030, according to the Asian Development Bank. 

The proportion of India's population surviving on an annual household income of less than 90,000 rupees will drop to 22 percent by 2025, down from 54 percent in 2005 and 93 percent in 1985, New York-based McKinsey said in May. India will be the world's fifth-biggest consumer market by then, surpassing Germany, as incomes almost triple, McKinsey said. 

Unitech's plans to build homes to tap larger numbers of people come amid concerns the supply of residential apartments for the middle and luxury segments may exceed demand. 

*200,000 Homes* 

In the next three years, 200,000 homes will be built in India's seven biggest cities for middle- and high-income groups, property adviser Knight Frank LLC said in a report this week. 

Homes for the middle-income group would typically cost 2.5 million rupees to 5 million rupees, Malvika Chandra, national head of research at Knight Frank's India unit, said in a phone interview from Mumbai. 

``The demand just about meets supply,'' the Knight Frank report said. ``Residential values across the country will remain under pressure and going forward some markets may even witness a correction to the tune of 15 to 20 percent.'' 

Unitech this month started selling 670 luxury apartments at Noida, near the capital New Delhi, in the first phase of plans to build 5,300 units. 

The developer has buyers for a fourth of the initial group of residences, Managing Director Sanjay Chandra said July 5. The apartments cost an average $600,000 and the most expensive costs $1.5 million, Ramesh Chandra said yesterday. 

*Profit Margins* 

Profit margins from the sale of ``mass housing'' will be smaller than from other residences, Chandra said. 

``Our major concentration will be on the mid-level and on the middle class, their growth is faster, their aspirations are higher and margins will be reasonable,'' Chandra said. ``In mass housing, margins will be much lower. In luxury housing, the margins are higher, but demand will not be as high.'' 

Profit margins at Unitech more than quadrupled to 39.7 percent in the year ended March 31, from a year earlier, according to data compiled by Bloomberg. Parsvnath Developers Ltd.'s profit margin widened to 19.4 percent from 16.6 percent. 

Developers can build cheaper homes in locations on the outskirts of cities and shorn of luxuries such as swimming pools and jogging tracks to avoid sacrificing profit margins, said Naik at IL&FS. 

``They may not compromise on margins,'' he said. 

Unitech may consider building homes for the masses on the outskirts of cities such as Bangalore, Chennai, the capital New Delhi and its suburbs and smaller centers such as Indore and Bhopal, both in the central state of Madhya Pradesh, Ahmedabad, in the western state of Gujarat, and Nagpur, in the western state of Maharashtra, Chandra said. 

``Most of these projects will be near major growth sectors,'' he said. 

Competitor DLF, which today reported a first-quarter profit of 15.15 billion rupees on sales of 30.74 billion rupees, said the company doesn't plan to pursue low-price homes. 

``We make homes for the weaker section, but it's not a business proposition,'' DLF Vice Chairman Rajiv Singh told reporters in New Delhi today.


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## Bushroda

*Ferrari selects Tata Motors to roll out cars in India: Report* 

New Delhi, July 18: Italian sports car maker Ferrari plans to roll out its cars in India in a tie-up with domestic conglomerate Tata group, a media report said. 

"The world's favourite sports car has chosen Tata Motors as partner to zoom into India's exclusive market," reports said. 

When contacted, a Tata Motors official declined to comment. An e-mail sent to Ferrari remained unanswered. 

The report said Ferrari would launch two cars in India - 612 Grand Tourer, a big four seater and F430. Tata motors will market and set up engineering centres for after- sale services, the report said. 

Tatas were the logical choice for Ferrari as the Italian firm already gets lot of its software from Tata Consultancy Services. Besides, Ferrari's parent company fiat has a joint venture with Tata Motors.


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## Bushroda

*Tata, Mahindra may bid for Land Rover and Jaguar*
FRANCE24, FRANCE
Thursday, July 19, 2007

*Indian automakers Tata Motors and the Mahindra group are considering separate bids to buy luxury British car brands Jaguar and Land Rover from US carmaker Ford Motor Corp.*

NEW DELHI, July 19, 2007 (AFP) - Indian automakers Tata Motors and the Mahindra group are considering separate bids to buy luxury British car brands Jaguar and Land Rover from struggling US carmaker Ford Motor Corp, according to media reports on Thursday. 

Ford announced last month that it was considering selling off the two iconic marques as it restructures its North American operations. 

Media reports have pegged the deal as worth around 1.3 billion to 1.5 billion dollars. 

Tata Motors, India's biggest automobile company, has appointed advisors to evaluate a bid and signed a confidentiality agreement with Ford to access financial details of the two brands which have a combined British workforce of 19,000, the Business Standard daily quoted unnamed sources as saying. 

The move would be in keeping with Tata group's growing appetite for overseas acquisitions. 

Earlier this year, Tata Steel bought Anglo-Dutch steelmaker Corus for 13.7 billion dollars, India's biggest ever foreign takeover. 

Leading tractor and utility vehicle maker Mahindra and Mahindra, which formed a joint venture this year with France's Renault and Japan's Nissan, had also signed a confidentiality agreement with the US carmaker, the Economic Times reported. 

Ford bought Jaguar in 1989 for 2.5 billion dollars and Land Rover from Germany's BMW in 2000 for 2.7 billion dollars. 

Spokesmen for Tata and Mahindra declined to comment. 

The Economic Times said Mahindra and Mahindra's real interest is in Land Rover, but since the two brands are being offered as a package deal it is looking at a combined bid.


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## Bushroda

*India to Keep Monetary Policy Tight, Chidambaram Says* 
BLOOMBERG
By Cherian Thomas and Haslinda Amin

July 19 (Bloomberg) -- India will maintain a ``fairly tight'' monetary policy to curb inflation that may be stoked by rising crude oil prices and consumer demand, Finance Minister Palaniappan Chidambaram said. 

``We have to do our best to keep inflation down in a world where fuel prices are flaring up, commodity prices are increasing and demand remains high in China and India,'' Chidambaram, 61, said in an interview yesterday in New Delhi. 

Indian bonds fell the most in more than five weeks after Chidambaram's comments. Bond investors in India had previously been expecting interest rates, which have risen since October 2004, to ease after inflation fell to near a 13-month low and record growth in bank loans slowed. 

``I would expect the Reserve Bank of India to maintain the status quo,'' said D.H. Pai Panandiker, president at RPG Foundation, an economic policy group in New Delhi. ``The central bank has a difficult task to keep inflation within acceptable limits and at the same time not allow the rupee to appreciate too much and hurt exports.'' 

The yield on the benchmark 7.49 percent note due April 2017 rose 6 basis points, or 0.06 percentage point, to 7.84 percent as of the 5:30 p.m. close in Mumbai, according to the central bank's trading system. The yield had declined 42 basis points in the month to yesterday, partly on optimism the central bank this month may refrain from raising borrowing costs further. 

*`Still Concerned'* 

Chidambaram, whose ruling Congress party faces national elections by May 2009, wants to drive down inflation to as low as 4 percent. India's benchmark wholesale price inflation rate fell by a third to 4.27 percent in the week ended June 30 from a two-year high in January. Rising prices caused the Congress party to lose power this year in two states and fall further behind in the most populous province of Uttar Pradesh. 

``I am still concerned about commodity prices, prices of food grains, edible oils and most importantly, I am very concerned about crude oil prices,'' said Chidambaram, who holds a Harvard MBA and is a lawyer by training. ``Inflation is low because we kept a tight control over money supply and we have allowed the rupee to appreciate a bit.'' 

The Reserve Bank of India, which will release its next monetary policy statement on July 31, increased its key overnight lending rate six times in the past 1 1/2 years and also raised its cash reserve ratio, or the proportion of deposits commercial banks need to maintain with the central bank, three times since December. 

*Loan Growth *

That helped slow the growth in loans to consumers and companies to 23.4 percent in the year to June 29 compared with a 31.8 percent gain in the same period last year, the central bank said July 13. 

Still, India has expanded at a record 8.6 percent average pace since 2003, making it the world's second-fastest growing major economy and increasing the consumption of oil. India currently imports almost three-quarters of its oil needs. 

Crude oil approached an 11-month high in New York yesterday, after an Energy Department report showed that U.S. gasoline inventories unexpectedly fell last week. The price of oil is up 23 percent this year. 

India may increase gasoline and diesel prices because of the rise in oil prices, the Financial Express reported July 2, without saying where it got the information. 

``Rising crude oil does not necessarily mean higher local fuel prices,'' said Chidambaram. ``It means our subsidy bill can go up'' as the government prevents higher oil prices from filtering into the economy. 

*Fuel Subsidy *

Indian Oil Corp., the nation's largest refiner, and its state-run counterparts are barred by the government from raising fuel prices in line with crude oil costs to control inflation. 

India plans to spend 28.4 billion rupees ($702 million) on compensating the refiners for subsidizing fuel in the year that started April 1, compared with 27.85 billion rupees a year ago, according to budget estimates made in February. 

India's other inflation-fighting measures are also adding to the country's subsidy bill, which makes up about a tenth of the federal budget. 

The gain in the rupee to a nine-year high has helped reduce imports of oil and other products and contain inflation, but ``it does pose some other problems,'' Chidambaram said yesterday. 

``Exporters are complaining,'' he said. ``We have given some incentives to our exporters.'' 

India this week eased interest rates and increased the tax refund limit for small and medium-sized exporters to cushion them from a 9.5 percent gain in the currency this year. The relief to textile, leather, handicraft and other exporters will cost the federal government 13 billion rupees, the finance ministry said on July 12. 

India's currency surged as the central bank slowed dollar purchases on concern rupee funds injected from the exercise will stoke inflation.


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## Bushroda

*What can Indian Elephant learn from Chinese Dragon*
20 Jul, 2007, 0459 hrs IST
Ashok Gulati & Shenggen Fan, TNN

Once again, India (the elephant) will fail to achieve its targeted growth rate in agriculture in 2007-08. The economic advisory council to the Prime Minster in its Economic Outlook for 2007-08 identifies agriculture as a special sector needing attention, as its growth rate is not likely to cross 2.5% against a target of 4%. Comparing with China (the dragon), the report goes on to state that India is not very unfavourably placed either in terms of irrigation, or tractor intensity, or farm size, but still Indian yields for major crops like rice, wheat, groundnut, etc. are almost half of those in China. The council explains this difference in yields primarily through differences in fertiliser consumption. 

But if Indian policymakers have to learn anything from China with respect to agriculture, they better go back to 1978, when China started economic reforms. IFPRIs research in this area (The Dragon and the Elephant edited by Gulati and Fan, 2007, forthcoming, Johns Hopkins University Press) reveals that the initial six years of reforms in China, 1978-84, were the most critical for Chinese agriculture. 

The land tenure system was changed from commune-based to household responsibility system and procurement prices for most of the staple crops were revised upwards by as much as about 20%. These two policy changes together created a highly favourable incentive environment in agriculture, leading to increased private investments and higher usage of fertilisers in agriculture. As a result, agricultural GDP grew at 7.1% per annum during 1978-84. And since agriculture prices increased much faster than the overall price index of the economy, agriculture incomes increased even faster than the agricultural GDP, by more than 10% per annum, and poverty in China declined from 33% to 15% in just six years. 

This generated a huge demand for goods produced by town and village enterprises (TVEs) in China, thus spurring a next round of rural non-farm growth and employment. These TVEs have been the real catalysts in making China as the manufacturing hub of the world today. 

The lesson from China story is clear: that agriculture led reforms can spur growth in rural non-farm sector and the two together can go a long way in cutting down poverty fast. Thus, firing the economic pyramid from the bottom can bring rich dividends (see figure). But in India, growth spurred from IT boom (top of the economic pyramid), and the economic reforms focused more on industry and service sectors than on agriculture. As result, while Indias service sector is doing very well, and manufacturing has picked up momentum during the last five years or so, but agriculture is still limping. 

The sceptics of China story often doubt whether there is anything worth while for India to learn as India already has its agriculture in private hands. There are at least three points that one can still learn from China. First, China had heavily invested in rural infrastructure, education and health. Although these investments are not strictly counted as investments in agriculture, yet they laid a basic foundation for agricultural growth. 

In 2004, adult literacy rate in India was still as low as 62% while Chinas was as high as 92%. Most of villages in China now have access to all weather roads, while India is far, far away from that target. Second, China spends almost 1% of its agriculture GDP on agriculture R&D, while India had its expenditure levels below 0.5% for most of the years, which are lately raised to 0.6% last year. Rural roads, and agriculture R&D, the two together, can be powerful engines of growth in agriculture and associated rural non-farm activities. 

Third, it may be noted that in China, for the last 10 years or so, much of the growth in agriculture is coming from the high-value segment (livestock, fruits and vegetables, and fishery), which are growing in the range of 5% to 8% per annum while food grain segment is growing at less than 1% per annum. 

China is increasingly importing land demanding commodities like soybeans (imports exceeding 30 million tons) while exporting labour and care intensive commodities (fruits and vegetables). This is all driven by rising incomes, changing consumption patterns, and rational usage of resource endowments. Similar things are likely to happen in India over the next five to ten years. An important lesson to learn here is that high value agriculture needs fast moving infrastructure, and each commodity value chain has its specificity. Both public and private sectors need to invest heavily in logistics and infrastructure, processing and modern retailing. This will unlock huge potential in non-farm employment and promote rural-urban migration. 

It may be noted that in China, during 1978-1997, rural non-farm GDP was growing at more than 24% per annum, and rural non-farm employment at almost 10% per annum. More than 180 million of Chinese farmers migrated to urban sectors since the reform in the late 1970s. Despite rapid overall economic growth, rural urban migration and non-farm sector in India is till embryonic.


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## Bushroda

*Indian consumers top the Nielsen Global Consumer Confidence Index* 
(19 July 2007 3:20 pm)

MUMBAI:The confidence of Indian consumers in India is high for the fifth consecutive time with 135 points in the global consumer confidence index conducted by the Nielsen Company, twice a year.

The survey which polled internet users across 47 markets from Europe, Asia Pacific, North America and the Middle East conveyed that 93 percent Indians who were polled, consider their job prospects to be excellent or good over the next 12 months.

The high consumer confidence is also reflected in the way consumers view the state of their personal finances in the next 12 months with nine in ten Indians feeling 'excellent' or 'good' about it.

According to the survey, Indians are also quite optimistic and confident about the future of the economy with 61 per cent feeling that it is an 'excellent' or 'good' time to buy things that they want or need.

"Indian consumer confidence is in line with the release of the country's latest GDP figure of 9.4 percent - the highest growth India has posted in eighteen years," said ACNielsen executive director customized research south east Asia Sarang Panchal. "It is no surprise, therefore, to see forty-five percent of Indian consumers surveyed rating their job prospects in the next 12 months as 'excellent," he added Panchal.

India also became the third highest globally after Hong Kong and China in terms of investment in shares and mutual funds with 53 percent of Indians saying that they would invest in shares of stock or mutual funds with their spare cash after covering their essential living expenses. Increasingly Indians love traveling and it finds it's way to the third slot, with 39 percent Indians voting for it as a means of spending their extra money. 

37 percent of Indian respondents would spend in Paying off debts/credit card loans whereas 32 percent would spend in buying new clothes. New technology with 29 percent and home improvement and decorative items with 32 percent are some other ways Indian respondents utilize their spare cash. Retirement fund is also something that Indians believe they should invest in, with 21 percent of Indians investing in it.

"With a high propensity to spend among Indian consumers, benefits to different industries become more substantial which in turn supports a continued improvement in the economy and consumer sentiment," said Panchal. "With four percent of the Indian respondents admitting to not having any spare cash after their necessary purchase for discretionary spending, it is among the lowest in the world." 

However there are still some areas of concern for consumers like the country's economy, with 46 percent citing this as their biggest and second biggest concern followed by health which had 31 percent Indians responding to it. 

The other concerns were job security getting 19 percent responses, political stability with 16 percent and terrorism getting 16 percent. 

Global warming has fast become an alarming environmental hazard and 19 percent of Indians expressed their concern about it. "The level of concern about global warming is now on par with people's concern about personal things like job security," continued Panchal. "It's time for both the government and people to take their own responsibilities to slow down the worsening situation, if not improving."

The release concluded that Indian consumers are optimistic in contrast with the world's most pessimistic consumers who hail from Portugal, Korea, Japan and Hungary, who are pessimistic about the job market, state of their personal finances or readiness to spend.


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## Bushroda

*Labour-based units key to double-digit growth * 
ECONOMY BUREAU 
Posted online: Friday, July 20, 2007 at 0012 hours IST 

NEW DELHI, JUL 19: The government should bring in policies that promote labour-intensive manufacturing in order to generate and sustain double-digit growth in national income, Arvind Panagariya, Professor of Economics and Jagdish Bhagwati Professor of Indian Political Economy at Columbia University, said at a CII seminar here on Thursday. 

He said while China has done a great deal in promoting labour-intensive industry, India has lagged behind on that front. Promoting the labour-intensive industry can have a big multiplier effect on the entire economy, he said, adding that India should exploit its competitive advantage of having huge labour force.  

While appreciating the growth that the IT and software industry has witnessed recently, he said these capital-intensive sectors can generate limited employment. 

India needs to focus on developing labour-intensive industries, such as steel, coal and cement, to fasten the rate of growth, he said. Panagariya, whose book India: An Emerging Giant is being published in December 2007, said that at this point the country should not bother too much about inequalities as it can take the focus away from reforms. 

When we focus on inequality, we go after guys who actually create wealththereby hampering the overall growth, he said. 

We should focus on poverty alleviation and not too much on inequalities, he added. Putting forth a case for hastening reforms, he said growth has been ultimately linked to reforms.


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## Bushroda

*Growth and development of indian textile industry *
Fashion2Fibre

*INTRODUCTION* 

The Indian Textiles Industry has an overwhelming presence in the economic life of the country. Apart from providing one of the basic necessities of life, the textiles industry also plays a pivotal role through its contribution to industrial output, employment generation, and the export earnings of the country. Currently, it contributes about 14 percent to industrial production, 4 percent to the GDP, and 17 percent to the countrys export earnings. It provides direct employment to about 35 million people, which includes a substantial number of SC/ST, and women. The Textiles sector is the second largest provider of employment after agriculture. Thus, the growth and all round development of this sector has a direct bearing on the improvement of the economy of the country.

*ORGANISED COTTON/ MAN-MADE FIBRE TEXTILE INDUSTRY*

The Cotton/ Man-made fibre textiles industry is the largest organized industry in the country in terms of employment (nearly 1 million workers) and number of units. Besides, there are a large number of subsidiary industries dependent on this sector, such as those manufacturing machinery, accessories, stores, ancillaries, dyes & chemicals. As on 31.10.2006, there were 1818 cotton/man-made fibre textile mills (non-SSI) in the country.

Over the years, production of cloth in the organized mill sector has been stagnating. It has declined from 1714 mn. sq. mtrs. in 1999-2000 to about 1434 mn. sq. mtrs. in 2003-04. However, since then, it is showing a constant increasing trend; 1526 mn. sq. mtrs. in 2004-05, 1656 mn. sq. mtrs. in 2005-06. In 2006-07, it is anticipated at 1900 mn. sq. mtrs. The total production of cloth by all sectors i.e. mill, powerlooms, handlooms, hosiery and khadi, wool and silk, has shown an up-ward trend in recent years. During 2006-07, the total production of cloth is anticipated to touch 49, 542 mn. sq. mtrs., compared to 52,000 mn. sq. mtrs. in 2005-06. The satisfactory performance of cloth production has resulted in favorable per capita domestic availability of cloth in the country. During 2004-05, the per capita availability of cloth was 32.63 sq. mtrs., and it is expected to increase to 43.33 Sq. mtrs. during 2006-07.

*TECHNOLOGY UPGRADATION*

The Indian Textiles Industry has suffered from severe technology obsolescence and lack of economies of scale, which, in turn, had diluted its productivity, quality and cost effectiveness, despite distinctive advantages in raw material, knowledge base and skilled human resources. While the relatively high cost of state-of-the-art technology and structural anomalies in the industry have been major contributory factors, perhaps the single most important factor inhibiting technology up gradation has been the high cost of capital, especially for an industry that is squeezed for margins. Given the significance of this industry to the overall health of the Indian economy, its employment potential and the huge backlog of technology up gradation, it has been felt that in order to sustain and improve its competitiveness and overall long term viability, it is essential that the textiles industry has access to timely and adequate capital, at internationally comparable rates of interest in order to upgrade the level of its technology. 

The Technology Up gradation Fund Scheme (TUFS), the flagship scheme of Ministry of Textiles was launched on 01.04.1999. Initially proposed for a period of five years, the scheme has now been extended till 31.03.2007, and is designed to ensure the availability of bank finance at rates comparable to global rates. Under this, the Government reimburses 5% of the interest charged by Banks and Financial Institutions, thereby ensuring credit availability for the up gradation of technology to industry at global rates. 

The Government has strengthened and augmented the Technology Up gradation Fund Scheme (TUFS). The allocation for the subsidy component of TUFS was enhanced from Rs.249.00 crores in 2004-05 to Rs. 485.00 crores in 2005-06, registering an increase of 95%. This has been further increased to Rs.835 crores in 2006-07, an increase of 91% over 2005-06. Till 31.10.2006, the Scheme has attracted 6142 applications, involving an investment of Rs 53,003.00 crores. Out of this 5882 applications with a project cost of Rs. 47,580 crore have been sanctioned. As such, this Scheme has created such a great momentum that has resulted into an investment of around Rs. 50,000 crore from the textile industry only under this Scheme. Owing to TUFS only the textile sector is still in an upbeat mood to modernize itself so that it may take on the global competition with confidence.

*TEXTILES EXPORTS*

Textiles exports form 17% of the countrys total export earnings and Indias share in the global textile market and apparel market is 4% and 2.8%, respectively. The Textiles exports basket consists of Ready-made garments, Cotton textiles, Textiles made from man-made fibre, Wool and Woolen goods, Silk, Handicrafts, Coir, and Jute.

*POST-MULTI FIBRE ARRANGEMENT SCENARIO*

In the post-Multi Fibre Arrangement (MFA) era w.e.f. January 1, 2005, the textiles exports are up by 25% in 2005-06 over 2004-05 The share of textiles exports in USA imports have increase from 4% to 5% in calendar year 2005 as compared to that achieved in calendar year 2004.The share of textiles exports in extra- EU imports increased from 6% to 7% in calendar year 2005, growing at 18% year-on-year basis as compared to 5.6% growth in extra-EU imports. The country in calendar year 2005 was the third largest supplier of textiles to USA and EU. During 2005-06, Indias total apparels exports were US$ 8.63 billions, registering a year-on-year increase of 31%. The country enjoys a higher realization in US markets for apparels of US$ 3.9/ sq. mtrs. as compared to US$ 2.8/sq. Mtrs. for China. The realization has increased in the past two years compare to decline for China. 

As per Industry estimates, the investment has picked up in the past two years increasing from Rs. 7349.00 crores in 2004-05 to Rs. 15,032.00 crores in 2005-06. It is estimated that the total investment in the textiles and clothing industry between financial years 2003-06 was around Rs. 42,978.00 crores. To sustain the above growth, the industry would need an investment of Rs. 1,94,000.00 crores (US$ 43 billion) between the financial years 2007-2012, and the industry will potentially generate additional employment for 14 million people, of which 4.4 million would be in apparel sector.

The Government has launched the Scheme for Integrated Textiles Parks (SITP) in August 2005, to strengthen infrastructural facilities in potential growth areas by merging the existing two schemes viz. Apparel Parks for Exports Scheme (APES) and Textile Centres Infrastructure Development Scheme (TCIDS). Under the scheme, twenty-six Integrated Textile Parks/projects have been approved with an estimated project cost of Rs. 2411.20 crore, of which Government of India assistance under the scheme would be Rs. 862.55 crore. The estimated investment in these parks would be Rs. 13,445 crore and estimated annual production would be Rs. 19,200 crore. Estimated employment generation would be more than 5 lakh. The projects are expected to be completed by March 2008. Twenty six parks have been sanctioned at Gujarat (6 Nos.), Andhra Pradesh (4 Nos.), Maharashtra (6 Nos.), Tamil Nadu (5 Nos.), Rajasthan (2 Nos.) and one each in Karnataka, Uttar Pradesh, and West Bengal.

*JUTE & JUTE TEXTILES INDUSTRY*

The Jute industry occupies an important place in the national economy. It is one of the major industries in the eastern region, particularly in West Bengal. Jute, the golden fibre, meets all the standards for safe packaging in view of its inherent advantages of being a natural, renewable, biodegradable and eco-friendly product.

Globally, India is the largest producer and second largest exporter of jute goods and this sector support livelihood of about 40 lakh farm families, and provides direct and indirect employment to 4 lakh workers. There are 78 Jute mills in the country, of these 61 are in West Bengal, 3 each in Bihar and Uttar Pradesh, 7 in Andhra Pradesh and one each in Assam, Orissa, Tripura and Madhya Pradesh. Annually, the export of Jute Products amounts to Rs. 1000.00 crores. The production of raw jute varies between 90-100 lakh bales (180 kg.each), and the domestic consumption of jute goods is in the range of 13.5- 14.5 lakh MT. The ratio of domestic consumption to exports is 80:20. The production of jute is concentrated in 36 districts of West Bengal, Orissa, Bihar, Assam, Meghalaya, Tripura and Andhra Pradesh. In 2005-06 jute season (July-June), the production of raw jute was 85 lakh bales and in 2006-07 jute season, it is estimated at 105 lakh bales. 

The UPA Government announced the first ever National Jute Policy on April 15, 2005, with the objective of achieving a Compounded Annual Growth Rate (CAGR) of 15% per annum; improving the quality of jute fibre; ensuring value addition through diversified jute products; ensuring remunerative prices to jute farmers and enhancing the yield per hectare. 

As envisaged in the National Jute Policy 2005, CCEA has approved in its meeting on 2.6.2006 the Jute Technology Mission to be implemented during 2006-07 to 2010-11 at an estimated cost of Rs. 355.55 crores, and establish a National Jute Board at Kolkata by merging the Jute Manufactures Development Council (JMDC) and the National Centre for Jute Diversification (NCJD). Steps have also been initiated to set up a National Institute of Natural Fibres and a National Jute and Jute Geo- Textiles Museum. The Minimum Support Price (MSP) for raw jute has been increased to Rs. 1000.00 per quintal in 2006-07, up from Rs. 910.00 per quintal in 2005-06, with a view to protects the jute farmers from seasonal uncertainties, and helps to prevent distress sales by farmers. 

*COTTON & COTTON TEXTILES INDUSTRY*

Cotton is one of the principal crops of the country and is the major raw material for the domestic textile industry. It provides sustenance to millions of farmers and contributes significantly to the countrys export earnings. The country has the distinction of growing all the four cultivated species of cotton viz. Gossypium arboretum, G. herbaceum (called Desi/ Asian cotton), G. hirsutum (American upland types), and G. barbadense (Egyptian type), as also hybrid cottons. 

The ratio of the use of Cotton to Man-made fibres and filament yarns by the domestic textiles industry is 56:44. India is the third largest producer of cotton (4.13 mn. metric tonnes), accounting for 16 % of global production, and the cultivated area in the country is the largest in the world (between 88-90 lakhs hectares). The states of Punjab, Haryana, Rajasthan, Gujarat, Maharashtra, Madhya Pradesh, Andhra Pradesh, Karnataka and Tamil Nadu accounts for 99% of cotton cultivation in the country. Due to focused support to Cotton growers by the Government, cotton production reached a record high of 243 lakh bales (170 kg. each) in the 2004-05 cotton season (October-September), and is expected to remain the same during 2005-06, despite a reduction in the area under cultivation. The productivity has increased from 399 Kg./hectare in (2003-04) to 463 kg./hectare (in 2004-05), and it is expected to reach 468 kg./ hectare in 2005-06. 

Seeing the importance of cotton in the textiles economy, the Technology Mission on Cotton (TMC) was launched on 21.02.2000, to raise productivity, improve the quality, and reducing the cost of production of cotton. The mission will continue till 31.03.2007. The Mission consists of four Mini Missions, of which, the Ministry of Textiles is implementing Mini-Missions III & IV, which involve the development of marketing infrastructure, and the modernization / up gradation of ginning and pressing factories. Under Mini Mission III, there it is proposed to develop 250 market yards. Against this, upto 31.10.2006, 219 market yards have been sanctioned and 106 have been completed. Similarly, under Mini Mission IV, against a target of modernization of 1000 ginning & pressing factories, 821 have been sanctioned, and 493 have been completed. 

*HANDLOOMS*

Handlooms represent the rich and diverse cultural heritage of the country. Their cultural importance pertains to ensuring the preservation of heritage, traditional skills and talent. Their economic importance lies in their high employment potential, low capital investment, high value addition, and potential for export/ foreign exchange earnings. The handlooms provide employment to more than 6.5 million persons, second largest after the agriculture.The production of cloth by the handloom sector during 2004-05 was 5722 mn. Sq. mtrs. and, in 2005-06, it is estimated at 6188 mn. Sq. mtrs. The Government launched Handloom Mark on June 28, 2006, for the brand promotion of handloom products. Some of the important schemes being implemented in the sector are: (i) Deen Dayal Hathkargha Protsahan Yojana (DDHY) (ii) Marketing Promotion, (iii) Handloom Export Scheme (iv) Workshed-cum-Housing Scheme, and (v) Weavers Welfare Scheme. 

During the tenure of UPA Government, besides the ongoing Schemes, several initiatives have been taken in the handlooms sector which includes launching of (i) Integrated Handloom Cluster Development Schemes (ii) Health Insurance Scheme (iii) Mahatma Gandhi Bunkar Bima Yojana (iv) Handloom Mark Scheme (v) Technology Up gradation Funds Schemes for Handloom Sector and (vi) 10% Rebate Scheme on sale of handloom fabrics. Besides, 273 New Yarn Depots, covering approximately all handloom clusters, have been set up. The platforms in the form of exhibitions/marketing events, wherein weavers can showcase their products for public have been doubled and to improve the credit worthiness of weavers, the Ministry of Textiles have taken up the matter with the Ministry of Finance to provide credit at lowers rate as well as writing off the old debts of the weavers. 

Under the Integrated Handloom Cluster Development Scheme, in the first phase, 20 handloom clusters have been set up at an estimated cost of Rs. 40.00 crores at Chirala and Madhavaram (Andhra Pradesh), Bijoinagar (Assam), Bhagalpur (Bihar), Kullu (Himachal Pradesh), Gadag (Karnataka), Thiruvananthapuram (Kerala), Gwalior/Chanderi (Madhya Pradesh), Imphal (Manipur), Bargarh and Sonepur (Orissa), Kurinjipadi, Trichy and Tiruvannamalai (Tamilnadu), Mubarakpur, Varanasi and Barabanki (Uttar Pradesh), Burdwan and Nadia (West Bengal). In 2006-07, 100 additional clusters have been taken up for development.

*DECENTRALISED POWERLOOMS SECTOR*

The decentralized power looms sector plays a pivotal role in meeting the clothing needs of the country. The power looms industry produces a wide variety of cloth, both greys as well as processed. The production of cloth and the generation of employment have been rapidly increasing in the power looms sector. In 2005-06, it contributed 62% of the total cloth produced in the country (30,254 mn. Sq. mtrs.), and provided employment to about 4.86 million persons, which is approximately 60% of total employment in textiles sector. There are 19.23 lakh Power looms in the country, distributed over approximately 4.30 lakh units. The major powerloom clusters are at Erode, Salem, Madurai, Ichalkarnji, Solapur, Bhiwandi, Malegaon, Burhanpur, Bhilwara, Kishangarh, Ludhiana and Amritsar. 

*WOOL & WOOLEN TEXTILES INDUSTRY*

The woollen textiles industry is a rural based and export oriented industry in which the organized sector, the decentralized sector, and the rural sector complement each other. This industry is employment oriented, providing employment to 27 lakh workers in a wide spectrum of activities. The country is the 7th largest producer of wool, contributing 1.8% to total world production. The anticipated production of indigenous raw wool is estimated at 55.10 mn.kg. (2004-05). Out of the total production of raw wool, only 5% is of apparel grade and 85% is carpet grade and 10% is coarse grade. Since our domestic produce is not adequate, the industry is dependent on imported raw material. Wool is the only natural fibre in which the country is deficient. 

A small quantity of specialty fibre is obtained from pashmina goats and angora rabbits. There are about 718 woollen units in the country, the majority of which are in the small scale sector. The Government is implementing the Integrated Wool Improvement Programme (IWIP) for the growth and development of the wool and woolen industry in the country. There are two components in the programme, viz., (i), improvement in wool fibre and (ii), quality processing of wool. The programme is being administered by the Central Wool Development Board (CWDB), Jodhpur, through State Governments organization/ NGOs, and will continue till 31.03.2007. 

*HANDICRAFTS*

The Sector provides employment to an estimated 63.81 lakhs artisans, of which 47.42% are female; 24.73% belong to Scheduled Castes, and 12.38% to Scheduled Tribes. 

The Working Group on Textiles and Jute for the 10th Plan had projected a growth of employment in the Handicrafts sector @ 3 per cent annually during 10th Five Year Plan period. Thus, it is presumed that 9.29 lakhs more artisans will be employed during the period and by the end of Tenth Plan, total employment provided by the handicrafts sector would be 67.70 lakhs. The production during Tenth Plan increased from Rs. 19,564.52 crores in the year 2002-03 to Rs. 32,108.10 crores in the year 2005-06. Exports, which stood at Rs. 10,933.67 crores in the year 2002-03, increased to Rs.17,276. 71 Crores in the year 2005-06, thus showing a growth of 58.02 per cent during the period registering an annual average growth rate of around 19 per cent. The employment increased from 60.16 lakhs in 2002-03 to 65.72 lakhs in 2005-06 at an estimated annual growth rate of about 3 per cent. The plan expenditure during the period also witnessed a steady growth as is indicated from an expenditure of Rs. 71.65 crores in 2002-03 to Rs. 97.24 crores in 2005-06, with the budget outlay for the year 2006-07 fixed at Rs. 110.00 crores including North-Eastern Region, out of which, upto 1st December2006, Rs. 40.14 crores have been sanctioned.

During 2005-06, the export of handicrafts including Hand Knotted carpets were s. 17,276.71 crore (3006.90 US $ Million) registering an increase of 10.63% in rupee terms and 19.28 percent in dollar terms compared to the corresponding period of 2004-05. The main items, which exhibited increased in exports during 2005-06 areZari and Zari Goods (37.57%), art metalware (8.86%), wood wares (18.29 %) and embroidered and crocheted goods (12.18 %). The export target for 2006-07 has been fixed at Rs. 19,500 crore. During 2006-07 (April  November, 2006), handicrafts exports including carpets, exhibited a growth of 16.70 % in rupee terms and 14.06 % in dollar terms as compared to the corresponding period of 2005-06. The export of handicrafts including carpet during 2006-07 (April  November, 2006), were Rs. 11,250.12 crore.Some of the important schemes implemented for the holistic growth of the handicrafts sector are :- (i) Baba Saheb Ambedkar Hastshilp Vikas Yojana (AHVY); (ii) Design & Technical Upgradation Scheme; (iii) Marketing & Support Services Scheme; (iv) Export Promotion Scheme; (v) Bima Yojana for Handicraft Artisans; (vi) Special Handicrafts Training Programme (SHTP). 

In addition to the ongoing schemes, during 2005-06, the Government launched the Credit Guarantee Scheme; the Scheme for setting up of Facility Centre and Electronic- Kiosks; and the Gandhi Shilp Haats Scheme, wherein everyday a marketing platform is provided to handicraft artisans in some part of the country. The Shilp Guru Award is given as a part of recognition to the living legends of creativity for their excellence and contribution. On 9th September, 2006, the Vice President, Shri Bhairov Singh Shekhawat gave away Awards to 29 Ship Gurus selected for the years 2003, 2004 and 2005. Besides, the Indian Exposition Mart, Greater Noida and the Rajiv Gandhi Handicrafts Bhawan, New Delhi, have been set up to, inter alia, provide marketing outlets to artisans as well as state agencies.

*SERICULTURE & SILK TEXTILES INDUSTRY*

Sericulture is an agro-based industry and is suitable for countries like India, which have a large agriculture base. Being a rural and labour intensive industry, it offers relatively high returns on modest investment. Sericulture activities are generally environment friendly.

India is endowed with all four varieties of silk: Mulberry, Eri, Tasar, and Muga. The silk sector is spread almost all over the country, including remote areas of the North East. Globally, India is the Second largest producer of Silk and contributes about 18% to the total raw silk production. During 2005-06, the production of raw silk was 17,305 mt. against a demand of around 26,000 mt. The sector employs about 6 million people, mainly in rural areas. This sector accounted for the export of Rs. 3158.16 crores in 2005-2006, and the export basket consists of Natural Silk Yarn, Fabrics, Made-ups, Readymade Garments, Silk Carpets, and Silk waste. The total silk production during 2004-05 was 16,500 mt. and exports were Rs. 2,879.56 crores. During 2006-07 (upto September 2006), Bivoltine Silk production reached 501 M.Ts, showing an increase of 35.8 % (369 M.Ts) compared to the production during the same period of the year 2005-06.

During the year 2006-07, up to September, the total Provisional production of all varieties of silk is 9768 M.Ts, showing an increase of 12.1 % as compared to the actual production during the same period of the year 2005-06, i.e., 8714 M.Ts. Provisional production of Mulberry Raw Silk is 8878 M.Ts. in 2006-07 upto Septmebr, showing an increase of about 12.1 % when compared to the same period of the previous year i.e. 7919 M.Ts.. The provisional Silk export earnings up to Agusut 2006is Rs. 1372.68 crores 299 .19 Mn. US $) indicating an increase of 10.2 % over the performance of the same period of the year 2005-06, which was Rs. 1245.96 crores (285.84 Mn. US $).- The Government has launched the Silk Mark Scheme for the brand promotion of Silk, and the Central Silk Board (Amendment) Act, 2006, for regulating the quality of Silk-worm seeds, came into force w.e.f. September 14, 2006.

*CENTRAL COTAGE INDUSTRY CORPORATION OF INDIA LTD*

The Central Cottage Industries Corporation of India Ltd. (CCIC) is mainly engaged in the marketing of quality handlooms and handicrafts, and develops their market in India and abroad. The Corporation operates through its five showrooms situated in Delhi, Kolkata, Mumbai, Bangalore, and Chennai and has franchisee outlets at Jaipur and Gurgaon. It is expected that CCIC will achieve a record turnover and profit of Rs. 110.00 crores and Rs. 10.25 crores, respectively, during 2006-07.

*NATIONAL INSTITUTE OF FASHION TECHNOLOGY (NIFT)*

The National Institute of Fashion Technology was set up in 1986 as an autonomous Society in collaboration with the Fashion Institute of Technology (FIT), to prepare and train professionals to meet the requirements of the textile industry. The Institute has pioneered the evolution of fashion business education across the country through its network of seven centres at New Delhi, Bangalore, Chennai, Gandhinagar, Hyderabad, Kolkata, and Mumbai. NIFT, besides conducting regular professional undergraduate and postgraduate programmes in Design, Management and Technology, also offers short duration part-time courses under its Continuing Education Programme. 

The National Institute of Fashion Technology Act, 2006 came into force w.e.f. July 14, 2006. This Act provides statutory status to the Institute and formally recognizes its leadership in the fashion technology sector, and empowers NIFT to award degrees to its students. NIFT is the first institute in the world to award Degrees in fashion education.

*CONCLUSION*

Today, Indian industry is extremely fragmented. India will gain market shares in the European Union, the United States and Canada to a significant extent, but the expected surge in market share may be less than anticipated, as proximity to major markets assumes increasing economic significance and tariffs are increasingly restraining trade due to the fact that products cross borders several times. Furthermore, other developing countries are catching up with China in terms of unit labour costs in the textile and clothing sector and China has of yet not shown competitive strength in the design and fashion segments of the markets.


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## Bushroda

*From The Spinning Wheel To Fiber Optics*
Robyn Meredith 07.20.07, 6:00 AM ET
FORBES, NY 

*Before our eyes, two giant nations--India and China--are simultaneously embracing both capitalism and globalization. The world economy is being transformed as a result, as Forbes Senior Editor Robyn Meredith explains in her new book, The Elephant and the Dragon: The Rise of India and China and What it Means to All of Us ($26, W.W. Norton, 2007) . Each weekday through July 31, Forbes.com will post a new excerpt from the book. *

Desperation brought economic change to India as swiftly as it had come to China--but more than one decade later, and of an entirely different form. In 1991, India was flat broke. One hundred and ten million people had been thrown into poverty in just the previous two years. The government's finances had collapsed. India faced a crisis.

The nation's troubles weren't just economic, either. Rajiv Gandhi was running for prime minister. His family name has been as interwoven with 20th-century Indian politics--and just as star-crossed--as the Kennedy name has been in America. 

With the nation's finances already in tatters, its politics hit bottom too: During a campaign stop on May 21, 1991, Rajiv Gandhi was assassinated. Out of the ashes of the ensuing nationwide emergency, India finally embarked on the economic reforms that would reconnect it so powerfully with the rest of the world. To understand today's India, one must look back.

While it was Communism that crippled China, it was the reaction to Colonialism that proved India's great handicap. India has been haunted by two lingering ghosts of the post-colonial period--Mahatma Gandhi's anti-industrialization tenets and Jawaharlal Nehru's socialism--which together caused India to withdraw from the world economy after winning its freedom from Britain 60 years ago. 

Gandhi and Nehru intended to help India's poor by pushing the nation toward self-sufficiency, but their philosophies wound up keeping Indians poor instead of lifting them out of poverty.

To Narayana Murthy, the Bill Gates of India, the historic economic reforms begun in July 1991 meant that India had stopped walling itself off from the world. Murthy is the lead founder of tech powerhouse Infosys (nasdaq: INFY - news - people ), which at the time, had 176 employees. (Today, it has more than 70,000.)

Murthy watched in wonder as his government finally abolished the "license raj" responsible for delays and corruption, lowered import duties, made the currency partially convertible, changed the rules for issuing stock, opened state-owned industries to private investors and adopted many other economic reforms, abandoning India's isolationist approach.

The changes of 1991 led to an economic boom not just for Infosys, but for the nation. Yet the reform process that began with such a bang sputtered after only a few years. In the years that followed, Indian industrialist Ratan Tata and other members of India's global business elite watched China race ahead of India, growing more and more frustrated that India had halted its own economic rise, forcing much of its own population to remain poor while Chinese were climbing out of dire poverty.

"For a long while, there was denial, there were excuses. Suddenly, there was an awakening," Tata said. Finally, Indian politicians began to turn to China for inspiration. 

China is still far ahead, but India is finally on its tail. Both are rushing headlong into the modern world as Chinese and Indians are increasingly making what Westerners buy, answering American customer service phone calls or themselves buying Western-branded goods. Globalization has clearly benefited both India and China greatly, lifting 200 million Indians and Chinese out of poverty during the 1990s and catapulting tens of millions more far ahead into middle class life. 

Still, progress on India's development projects is on-again, off-again. "India will never be a tiger. It is an elephant that has begun to lumber and move ahead," says Times of India columnist Gurcharan Das. "It will never have speed, but it will always have stamina." 

Murthy's partner, Infosys Chief Executive Nandan Nilekani, says, "Indian people will now feel disenchanted if growth rates fall below 6%." He declares that India's reforms are irreversible.


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## Bushroda

*Export growth: New economics* 
Surjit S Bhalla / New Delhi July 21, 2007 

*IT DOESN`T MATTER* 

The recent forecast by the EAC implies a sharp acceleration in export growth, despite a large 10 per cent appreciation of the rupee. This is new economics. 

It is clear that I dont want to be smoking what the economic czars of the UPA government have been indulging in for the last several months. Some weeds can lead to inexplicable mistakes, and in an increasingly competitive world, that is unaffordable. The background of an inherited robust domestic economy and unprecedented worldwide growth has most likely dulled the economic senses of the UPA. They feel they can afford to experiment with the Indian economy, and have it grow considerably below its potential with the logic that hey, we are still growing above 6 per cent, so why are you complaining? 

The technocratic Economic Advisory Council (EAC) of the Prime Minister of India has just made a forecast for Indian export growth over the next year: Exports would grow to $147 billion from $124 billion in 2006-07, an 18 per cent rise. On the face of it, this forecast is unexceptionable. Indian exports have been growing at 20 per cent plus for the last several years and in the fiscal year just ended, the increase was 25 per cent. 

However, over the last six months the seasonally adjusted (seasonal factors from RBI Bulletin, November 2006) export growth has been a full 10 percentage points lower at 15 per cent. 

This figure is close to the 18 per cent growth forecast made by the EAC, so what is the problem? Just that in April-May the rupee appreciated by 10 per cent, and exports occur with a lag (the gap between contract and delivery is often a few months). Thus, the December 2006-May 2007 figures represent export growth before the 10 per cent rupee appreciation. And even this growth of 15 per cent is well below the bold EAC forecast! And if the rupee appreciation is sustained, export growth in 2007-08 is likely to be at least 25 per cent below trend. Unless something was exceptionally, and temporarily, the problem with our exports in the last six months (unlikely; our exports should have shown an acceleration especially with world GDP accelerating to new highs above 5 per cent per annum, and exports above 20 per cent), it is likely that Indian export growth will average around10-12 per cent in 2007-08. The slowdown in recent export growth, and the seasonal factors, etc. are well-known to the EAC, so why a forecast that is likely to have an error of around 50 per cent (12 vs. 18 per cent)? 

A similar large error was recently made by the authorities with respect to inflation, so at least the trend is continuing! In mid-2006, international oil prices rose, and were soon followed by a rise in international (and domestic) wheat prices. Both rose by upwards of 20 per cent. This supply shock meant that overall inflation temporarily exceeded the comfort zone of 5.5 per cent. So what could the government have donenothing, as it successfully did in the 1998 food (onion) price inflation episode. Supply shocks have a tendency to work themselves out. Just look at the following supply shockoil prices have quadrupled in the last four years, yet world inflation has stayed shockingly stable. Contrast that with the 1973 oil quadrupling, when the world was not prepared and ended up with stagflation. Alone among mature economies, India responded to the 2006 supply shock as if nothing had changed in the last 35 years, and if everything had changed since the last analogous supply (food) shock in 1998. 

The government (the RBI or Ministry of Finance?) messed up in its analysis of inflation. Its first response to slaying the non-existent excess inflation dragon was to jack up interest rates. This was a gift to foreign investors (including Indian NRIs), who now had a higher yield on Indian investments; and was a gift to foreign banks, who could now lend more money to Indian firms through the ECB window. This led to, uh-oh, large inflows of dollars, which put pressure on the Indian rupee. And the government allowed the rupee to appreciate in order to fight inflation. The circle goes on. 

Now the government says that the rupee appreciation does not matterindeed, according to the EAC logic, new economics is being invented. The demand curve, erroneously thought to be downward-sloping (as prices go up, less is demanded) is actually upwardly-slopingcostlier Indian exports, costlier by around 10 per cent, will actually lead to an acceleration in the rate of growth of exports. So let me see: a 10 per cent appreciation in the rupee leads to an acceleration in export growth by 3 percentage points, so a 20 per cent appreciation should lead to an acceleration of 6 percentage points. So, the EAC forecast for 2007-08 might well be: rupee at 36 and export growth at 21 per cent. We can extend this logic, but . 

The real world of course is different. In the world of downwardly-sloping demand curves, a sustained appreciation of 10 per cent in the exchange rate is likely to lead to a decline in GDP growth of at least two percentage points*. Given Indias excess productivity growth of around 3 per cent, the net effect of the rupee appreciation would be somewhat less than 2, likely around 1.5 per cent. Thus, we should expect GDP growth next year to be about 1-1.5 percentage point lower than the 9.5 per cent growth just experienced. A rather large cost to the experimentation with the invention of new laws of economics. 

The 18 per cent export growth seems an impossible belief, even by India Shining standards. So why did the EAC make such a forecast? Politics? But howwhat election are the technocrats running for? Wishful thinking? But what does that achieve? Something that they are smoking? Likely, and you dont want to smoke the same.


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## Bushroda

*What makes an Indian CEO great?* 
By: Malini Goyal 

Understanding CEOs and what makes them tick is a subject of intense interest in mature economies like the US. But it is now beginning to find takers in India. What makes an Indian CEO great?

In what ways are they different from their global counterparts? Do CEOs of PSUs require distinctly different skills vis-??-vis private sector CEO to survive. As the Indian economy integrates with the global world, how are those traits in successful CEOs evolving?

In a maiden attempt to understand Indian CEOs, a London-based consultancy Hay-Group partnered with BPCL to research and publish a book "The Indian CEO", released by prime minister Manmohan Singh on Wednesday.

The research for the book was conducted over ?? months and indepth interaction with over ?? top-notch CEOs from private and public sector in India to flesh out a few patterns. 

Here are four interesting traits that emerge from the book:

Cerebral & competitive 

Thrust on education, strong focus on quantitative skills and aggressive competition all their lives  from school-college admission , jobs, and others  make them good leaders with strong cognitive powers, strategic & analytical skills. 

The Indian CEOs compare very well with the best of CEOs across the world, says GM of HayGroup (Malaysia) Tharuma Rajah. 

Indian managers are very quick to adapt. Perhaps the constraints in infrastructure and the flip-flop in regulatory environment in India pushes managers to be smart adapters. 

If you cant change the situation, change your strategy  and good CEOs seem to do this very well. Not surprisingly, Indian managers have emerged as the single largest talent pool being tapped by MNCs for their global operations , Tharuma says. 

More rounded perspective 

"For the western CEOs, a straight line is the shortest distance . For Indian CEOs, it?s a circle," says director of HayGroup London Gaurav Lahiri.

It?s got to do with Indian philosophy which takes a far more holistic approach to life. 

As a result, compared to their counterparts in other countries , Indian leaders show an unusually consistent and pervasive concern for the good of their country along with a related focus on providing goods and services which benefit everyone and on addressing the practical needs of the lower half of the economic pyramid or on enhancing India?s pride and stature vis-??-vis global community. 

Weak emotional quotient

Interestingly, research for the book revealed that Indian CEOs lack skills in tuning into people. Often their focus on entrepreneurship and strategy neglects the task of energizing their teams. 

There is a lack of attention to others, especially as individuals  one on one. Their interpersonal skills, empathy and good judgement of people are poor. "India is weak in team sports," says Rajah. 

And even in ones like cricket, its individuals who rule rather than the team. Almost half of the CEO participants in the research provided a full story of their difficulties with governments and reglators.


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## Bushroda

*CNBC Awaaz launches 'Pehla Kadam'* 
Friday - Jul 20, 2007 

CNBC Awaaz, the Hindi consumer news channel, has launched 'Pehla Kadam', an organized investor education initiative for the Indian investors raring to venture into investing with the stock market. The show has been developed in association with NDSL and NSE. Finance Minister, P. Chidambaram launched the learners' kit at an evening dedicated to the new informed investing India.

While, the Indian economy growing at 9.2% GDP, the number of people investing money in stock market is still restricted. About 8 lakh Demat accounts were opened over the last one year and the uncertainty in the stock market restricts the investors to invest in the share market, the show promises to take into account these challenges by answering various aspects such as financial planning and risk management.

Haresh Chawla, CEO, TV18 group said, "CNBC Awaaz has created an impact as a consumer and business channel in the market, in its two years of existence. With our initiatives for our investors, we now have 60% of the market share in the Hindi business news genre."

"Through our Pehla Kadam initiative, we intend to reach prospective investors across India, who are reluctant about investing in stock markets largely due to lack of knowledge and understanding of the market and fear of risk. As a consumer focused channel, we have taken this initiative to empowering our viewers with information which will help them make intelligent and informed decisions." adds Chawla.


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## Bushroda

*Giving life to insurance!*
20 Jul, 2007, 0006 hrs IST, TNN

The report that new mortality tables for the life insurance industry would be available within the next six months is welcome. Not only for the obvious advantage that it should bring down insurance premia and hence make insurance affordable for a much larger section of the population. 

But for another more indirect reason: higher insurance penetration means more long-term funds will be available to finance our infrastructure needs. 

One of the biggest obstacles to infrastructure development has been the lack of adequate long-term funds. The quantum of funds needed for infrastructure in the next five years has been estimated at $450 billion, much of which will have to come from domestic sources. Unfortunately, the two main domestic sources of long-term funds  pension and insurance funds  are both relatively under-developed. 

Pension funds are virtually non-existent and though insurance penetration has improved after the opening up of the sector to private players, it is still nowhere near what it is in comparable markets elsewhere. While low income levels and lack of awareness are partly responsible, high premia levels also play a part. India is a notoriously price-sensitive market where every rupee counts. 

The insurance industry has only to look to the telecom market to see what can be done if prices become more affordable. If people are willing to buy mobile phones, that by no stretch of the imagination can be regarded as critical for family security, imagine how much more willing they would be to buy life insurance. Especially in a country that has no safety net to offer! Provided, and this is the key, players in the life insurance business get their pricing right. 

This is where the new mortality tables come in. By enabling life insurance companies to price risk more accurately taking into account the increase in the average life expectancy of the average Indian  up four and six years for men and women respectively since 1991  the introduction of the new tables should lead to a fall in premia. 

And as with any market, where a fall in price expands the market, a fall in premia will lead to a rise in insurance penetration. With hugely positive implications for the economy as a whole.


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## Bushroda

*Report: Tata Motors to Invest in Thailand*
FORBES, NY
07.19.07, 1:42 AM ET

BANGKOK, Thailand - Indian automaker Tata Motors Ltd. is investing 1.3 billion Thai baht (US$43 million; euro31 million) to build 35,000 one-ton pickup trucks a year in Thailand, a local newspaper reported Thursday.

The pickup plant, 70 percent owned by Tata Motors (nyse: TTM - news - people ) and 30 percent owned by local Thonburi Automotive Assembly Plant Co., was among nine approved projects worth 35 billion baht (US$1.2 billion; euro870 million), according to Board of Investment Secretary-General Satit Chanjavanakul, the Bangkok Post said.

The investment board granted the plant investment incentives Wednesday, the paper said.

About 80 percent of the output will be sold in the local market, with an estimated price for each pickup between 400,000-500,000 baht (US$13,350-US$16,675; euro9,700-euro12,100), the Post said. Current prices for pickups in the market range from 600,000 to 1 million baht, the paper said.

Thailand's vehicle market is dominated by pickup trucks, which account for about three-quarters of the autos made here.

It will be the first time the Thonburi plant has been used to make pickup trucks. Until now, the plant made various Mercedes-Benz models.

Other major pickup makers in Thailand include Toyota Motor Corp. (nyse: TM - news - people ), Isuzu Motors Ltd. (other-otc: ISUZY.PK - news - people ) and Mitsubishi Motors (other-otc: MMTOF.PK - news - people ) Corp.


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## Bushroda

*India banks' profits to surge, asset quality watched*
Fri Jul 20, 2007 2:21PM IST
Himangshu Watts

MUMBAI (Reuters) - India's top banks, State Bank of India and ICICI Bank, are expected to report quarterly net profit rose strongly as a booming economy drives demand for loans.

Analysts are upbeat about India's banking sector, but there are concerns about loan defaults after interest rates were raised five times between June 2006 and March this year.

"Asset quality trends will be the key to watch for in these results, especially for private banks, as with rising interest rates, the asset quality cycle may also be reversing," CLSA said in a report.

India's economy, Asia's third largest, is likely to grow by 9 percent in the fiscal year ended March 31, a report by the prime minister's Economic Advisory Council said this week. It has grown at an average rate of 8.6 percent in the past four years.

ICICI Bank is expected to report on Saturday that net profit rose 24.6 percent to 7.7 billion rupees, according to a Reuters poll of 10 brokerages.

Analysts are confident on the prospects for the bank, which raised an Indian record $4.9 billion in share sales last month.

"This would lower the return ratios in the short term, but would provide enough capital to grow at more than 30 percent for three to four years," Prabhudas Lilladher said in a report.

Brokerage Motilal Oswal said ICICI Bank's fee income was likely to grow 45 percent, driven by strong performance in insurance, credit cards and international business Shares in ICICI, valued at $26 billion, have doubled in the past year.

"No other bank gives exposure to successful businesses in insurance, investment banking, retail assets and international banking -- all in a single package," Macquarie Research said in a report.

Government-run State Bank of India, which is considering raising up to $12 billion to fund growth, is forecast to report that net profit rose 32 percent to 10.5 billion rupees in the April-June quarter. It reports on July 28.

"We expect margins to improve in Q1 FY08 on account of improvement in yield on advances due to successive prime lending rate hikes by the bank," Motilal Oswal said in a report.

SBI shares have risen 125 percent in the past year, and analysts expect the bank's growth momentum to be sustained.

"We think the bank is well positioned for strong 40 percent credit growth over the next three years. It now has strong presence in multiple asset domains, and is rolling those out to new geographies," Macquarie said.

Shares of State Bank of India rose 54 percent during the June quarter, outperforming a 22.4 percent rise in the banking index and the Mumbai market's benchmark index, which rose 12.1 percent. Shares in ICICI Bank rose 12 percent in the quarter.


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## Bushroda

*India says WTO's new proposal could revive stalled trade talks*
International Herald Tribune
July 20, 2007

NEW DELHI: The World Trade Organization's latest proposal on cuts in import tariffs and farm subsidies could help revive negotiations on a new global trade pact, India said Friday.

The latest negotiating drafts from the WTO offered a good reason to resume the deadlocked talks, although New Delhi has concerns over some of the content, said Indian Commerce and Industry Minister Kamal Nath.

"It is not a text of convergence. (But) this text is a good basis for intensive negotiations," Nath told reporters. "We hope that in September negotiations start."

The Doha trade talks, named after Qatar's capital where they were launched in 2001, aim to add billions of dollars to the world economy and help poorer countries benefit from new trade flows. Negotiations have been deadlocked because of wrangling between rich and poor countries over eliminating barriers to farm trade and, more recently, manufacturing trade.

The WTO draft agreements released Tuesday require the United States to reduce its trade-distorting farm subsidies to a level between US$13 billion and US$16.4 billion (9.4 billion and 11.9 billion). In return, major developing countries such as Brazil, China and India will have to give greater cuts in industrial tariffs.

Diplomats from member countries of the world trade body will start discussing the proposal next week, though negotiators appear to have given up hopes of reaching a final accord by year-end.

India has concerns over the proposals relating to industrial tariffs, but that would not come in the way of restarting the talks, Nath said.

"It is a package ... at least, now, there are certain parameters," he said. "So we can move forward."

Nath also came out in support of China, which has objected to a proposal in the WTO draft that gives Beijing only a two-year grace period before it is required to cut industrial tariffs. China, which joined the WTO in 2001, wants a 10-year grace period.

"Newly acceded members should get some concession," Nath said. "China has already contributed its part (to trade liberalization)."


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## Bushroda

*Lockheed eyes India for cheaper commercial products*
20 Jul, 2007, 1626 hrs IST, PTI

BANGALORE: US defence contractor Lockheed Martin Corporation is looking at the possibility of making some new commercial products in India for the global market to cut development time and cost, a company official said on Friday. 

Royce Caplinger, Managing Director, India, Lockheed Martin, said research and development in the US for new products took a longer time and a lot of money. 

"Increasingly in the global economy where we live, you don't have the luxury of taking 20 years to bring a product to marketplace", he said adding the products needed to be made at a cheaper cost. 

"We are hoping that India will be one of the places we can do that", he told a press conference here. 

Caplinger, however, declined to give the nature of products to be made in India but indicated that it would not be for defence sector, saying "defence is a different beast". 

"We are approaching India on a very broad front", he said. "We are looking at business opportunity... What's the thing we can do in India..that we can take to the global marketplace". 

The $39.6 billion company was looking to make products in India that would be cheaper and better to compete in the global marketplace, he said. 

Senior Vice-President and Chief Technology Officer of Lockheed Ray O Johnson said the company would explore possibilities of setting up an R&D centre in India to leverage the engineering talent pool.


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## Bushroda

*India's forex reserves at a record $218.96 bn*
20 Jul, 2007, 1710 hrs IST, REUTERS

MUMBAI: India's foreign exchange reserves rose to a record $218.956 billion on July 13, from $214.835 billion a week earlier, the Reserve Bank of India said in its weekly statistical supplement on Friday. 

The RBI said foreign currency assets expressed in US dollar terms included the effect of appreciation or depreciation of other currencies held in its reserves such as the euro, pound sterling and yen. 

The foreign exchange reserves include India's Reserve Tranche Position in the International Monetary Fund, the RBI said.


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## Bushroda

*India's Air Apparent*
Tara Weiss, 07.20.07, 5:25 PM ET
FORBES, NY

Naresh Goyal might not have the height or the hair of Virgin Chief Executive Sir Richard Branson, but he's certainly got his fellow airline owner's charisma. 

The founder and chairman of Mumbai-based Jet Airways is in town for one of his "road shows," part of a campaign to introduce Americans to the 14-year-old airline that begins service from Newark, N.J. to Europe and India next month. He met with reporters in his suite at the Waldorf-Astoria, showering them with compliments and hearty laughs. 

He says he can't be compared to Branson because unlike his British counterpart, he's not the face of the brand. That may be true, but like Branson, Goyal built Jet Airways from the ground up. 

Goyal started working in the airline industry right after college in his great uncle's marketing agency for Lebanese International Airlines. His salary was so low--$40 per month--that he had to sleep on the floor of his office. But he moved up the ranks quickly, becoming a publicist for the airline and from there, moving on to other international airlines. 

After a few years, he started Jet Air, a marketing organization that represented several international airlines in India. His mother sold her own jewelry to give him money to start the business.

In the early '90s, he looked into buying an airline in Scotland since there was no "national" carrier there, but his plan came to nothing. At home, though, things were changing. From 1953 until 1992, the only airlines allowed to be based in India were owned and operated by the government. They were less than hospitable--there were no printed schedules, and service was abominable. 

"They [thought they] were doing you a favor to carry you from point A to point B," says Goyal. But when the government opened the airline industry to private competition, Goyal jumped at the opportunity. 

"There was a huge market for good value and a high level of service in a marketplace that had never seen that before," says Bob Mann, an airline consultant with R.W. Mann & Company. "He got in front of the wave before it reached the shore."

Goyal now runs an airline that flies from India to 50 destinations. Starting in August, Jet Airways will have a European hub in Brussels. 

Goyal still remains true to his marketing roots, which were showcased in a lavish press conference recently. He might not be able to bring one of the airline's Boeing 777s into the Grand Ballroom of the Waldorf-Astoria to show off the upgraded cabins of Jet Airlines, but he did the next best thing: He brought life-size replicas of the cabins and showed off the flight attendants' newly designed mustard-colored ensembles. 

Goyal markets service and comfort as the keys to his airline. For about $10,000, passengers in first class get a private suite, complete with closing doors; a full bed; a flat-screen television; and a meal that might be served at a top restaurant in any city. Business and coach offer levels of comfort too, with televisions and ergonomically designed chairs. 

This isn't entirely new, says Mann. The Dubai-based airline Emirates and Etihad Airways, the national airline of the United Arab Emirates, both have first-class closed-door cabins. Plus, there's lots of competition from the likes of Virgin and British Airways (nyse: BAB - news - people ), which also fly to India. 

But with globalization and India's economy opening up, Goyal is counting not only on the Indian diaspora looking to travel around the world, but businesspeople who increasingly need to go to the Indian subcontinent for work. "The demand has been pent up for a long time," says Mann. 

Goyal recently sat down with Forbes.com to discuss his airline's past and future. 

*Are you the Richard Branson of India?* 

Goyal: No. I don't want to follow someone else, but he is a very dear friend of mine. We know each other through the industry. He's the best marketing person in airlines. He is the Virgin brand. I don't want to be the brand because an organization lasts longer than the individual. The institution is there for a long time to come, while individuals come and go. 

Our airlines work together very closely. We bring traffic from India to London and transfer them to him. We have a commercial alliance.

*How did you pick Newark as the first American destination for Jet Airways?* 

We found there's less congestion at Newark after you leave the airport than at JFK. Eventually we'll fly to both because both airports are important. If I have a choice, I fly into Newark.

*After Newark, there's a lot more North American expansion planned. Some observers say it's too fast, but you don't agree. Why*? 

There is traffic already. You don't have to do anything and traffic exists. There are 2.5 million Indian-Americans living in the U.S. We want to serve that population. Also, Indian companies are becoming global. People in the west used to think India is something hidden. Today, U.S. companies have so much interest in India. 

Next is Toronto on September 5. There are 800,000 Indians in Canada. We'll start service to JFK, San Francisco, Chicago and L.A. in the next year. 

*There are so many options in the airline industry. Why would someone pick Jet Airways?* 

Service is everything. I'm paying $750 per day to stay here [the Waldorf-Astoria Hotel] and there's lousy service. I ordered my breakfast at 9 a.m. and my breakfast never came. I went hungry. This would never happen in India. Hospitality is in our blood--to look after our guests. Even if you come from a poor family, the lady of the house will offer you tea or coffee. 

In terms of American passenger-airlines service, they dump people from one point to another. With us, you get a hot meal within a half hour of takeoff. It's a three-course meal in every section of the airplane--even in coach. 

*What about pricing?* 

We are not here to get into fare wars. We are here to give you the best product, which hopefully no other airline gives you. 

*Your flight attendants are outfitted by a fashion designer, three-course meals are served in all sections and you're pouring Dom Perignon to passengers in first class. How can you afford that without raising prices? *

Productivity. It's higher and better than other carriers. Our cost ratio in the aircrafts is one of the lowest in the world. We have created high morale for our people. Our employees believe in the company. They believe it's their company. There's a feeling among employees that if the company makes money, it's their money and if the company loses money, that's their loss. 

*With your love of airlines, have you ever learned how to fly an airplane?* 

No, I can't even drive a car. I don't even know how to swim.

*Why do you enjoy the airline industry?* 

It connects cultures. You make friends. And of course, there's a certain glamour in this business.


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## Bushroda

*RPG Group to invest Rs.12,000 crore in power sector*
Wednesday, July 18, 2007

RPG Group has earmarked an investment of Rs.12,000 crore for power and Rs.450 crore for carbon black for a period of two-three years.

Of the total investment of Rs.12,000 crore in the power business, the company have already committed Rs 2,000 crore. The group is setting up a 2,000 MW thermal power plant and has identified three states - West Bengal, Jharkhand and Orissa - where it is assessing the project's prospects.

RPG Group is adding two more facilities to its already existing three carbon black plants. It has decided to set up the fourth plant at Mundra while the location of the fifth is yet to be decided.


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## Bushroda

*More Chinese flights to India*

BEIJING, July 20: In view of increasing tourist exchange between China and India, Air China today said it will start operating daily flights between Beijing and New Delhi starting 31 October. 

At present it has only four flights a week between the two cities. 

The state flag carrier will be joined by another international carrier, China Southern, which is expected to start three flights a week to Delhi from Guangzhou (erstwhile Canton), a home to more than 3,500-strong Indian community and throbbing business hub in south China. The flights will be seven a week on the first anniversary of our starting of Beijing-Delhi sector on same day last year, Mr Zhao Quanzhen, Air China country manager (India), said. 

The flag carrier had started with three flights a month. Noticing demand, it added another flight in March this year. 

Air China plans to introduce two brand new Airbus 330s to ply on the Beijing-Delhi sector. At present the carrier is plying Boeing 767s and Airbus 300s. 

The new airbuses would be roomier with 30 business class seats and 256 economy class seats with world class entertainment during the journey. 

Mr Zhao said the expansion of operations in India was a part of Air Chinas global expansion plan. 

By next year we would have 20 Boeing 787s added to our existing fleet of 212 aircraft, mostly Airbus 300s and Boeing 767s, he said. 

Air China is also slated to become a member of the prestigious Star Alliance of the worlds leading airlines with members such as Lufthansa, Austrian, Thai Airways, Finnair and United Airlines. 

The 10th anniversary of the alliance is being held in Beijing this year. It is a high point in our airline history Mr Zhao said. With more than 100 domestic and 37 international destinations, Air China has 35 per cent share in the domestic market and 70 per cent share in the international market. 

China Eastern and China Southern together make up for 30 per cent of the China carriers international market. 

China Eastern flies four Shanghai-Delhi flights a week. China Southern is expected to start at least three flights a week on the Guangzhou-Delhi sector at about the same time as us (in October), Mr Zhao said. 

However, Mr Zhou is not satisfied with the load factor. From Beijing to Delhi it is as high as 80 per cent, but on the way back it is just about 60 per cent.


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## Bushroda

*Tracking the Indian Railways' turnaround saga* 
Arvind Padmanabhan 

It's a turnaround story that has not only amazed management experts but also caught the attention of premier global business schools like Harvard and Wharton - the dramatic return to profitability for the 154-year-old Indian Railways, among the world's largest railroad networks.

In February, when Railway Minister Lalu Prasad presented India's railway budget for the 2007-08 fiscal, its most striking aspect was the Rs.215 billion ($4.5 billion) surplus he announced for the organisation that employs 1.5 million people and boasts a 63,332-kilometer network that ferries 14 million passengers daily in 9,000 trains (4,000 more for cargo) from 6,947 stations.

"The railways are poised to create history," exulted Lalu Prasad, one of India's most colourful politicians, during his 116-minute speech, referring to the highest-ever surplus - akin to profits for companies - which the Indian Railways was projected to post for the fiscal year ended March 31.

"This is the same railway that defaulted on the payment of dividend and whose fund balances had dipped to Rs.3.59 billion ($80 million) in 2001," said the minister to the amazement of industry honchos and experts who were listening attentively to the speech.

In fact, he not only said that the surplus would increase next fiscal but also belied speculation over freight and upper class fare hikes that had once been a regular feature for the railways to bridge deficits. In fact, he even announced an across-the-board cut in tariffs and rolled out plans for 40 new trains, extended the run of 23 and increased the frequencies of 14 others.

All this only left experts gasping. They wondered what had caused such a sharp turnaround in the organisation from being the backbone of the Indian economy to being termed a "white elephant" headed towards bankruptcy by a government-appointed expert group.

"Today Indian Railways is on the verge of a financial crisis. To put it bluntly, the 'business as usual, low growth' will rapidly drive it to fatal bankruptcy, and in 16 years, the Government of India will be saddled with additional financial liability," said the report presented in July 2001.

This was, indeed, alarming for the Indian Railways, which since the commencement of its first journey on April 16, 1853, has come to reflect the pluralistic character of the country with many unique features such as having the world's largest as well as the smallest stations, the oldest running locomotive and a separate budget since 1924.

But from 2005, the signs of change were visible and became well entrenched by 2007. "The railways' renaissance has been engineered by simple entrepreneurial practices, which have evoked the admiration of internationally renowned institutions and companies alike," said a report by KPMG, which also conducted an international conference on railways in New Delhi last month.

"The railways are now working like a private sector corporation. This is great news for India. We wish other public services, especially in the social sector, like education and health would follow suit," Habil Khorakiwala, president of an apex industry group, the Federation of Indian Chambers of Commerce and Industry (Ficci), said.

"The turnaround is not hype because the net revenues have increased sharply," said Prof. G. Raghuram, who has thoroughly examined the performance of the Indian Railways as a case study for the premier Indian Institute of Management at Ahmedabad, one of India's best-known business schools.

"By increasing the axle-loading of wagons (which increases freight traffic) and, combining it with a market-oriented approach, Lalu Prasad has contributed to the success of Indian Railways," Raghuram added.

Lalu Prasad attributed the transformation almost entirely to improved efficiency that was even able to withstand increased competition from budget carriers that were offering to fly passengers for the cost of a second-class air-conditioned fare of the railways.

"Over the past 30 months, freight volumes have grown by 10 percent. Similarly, growth in passenger volumes has been doubled," he explained to a group of 130 students from Harvard and Wharton a few months ago, while delivering a lecture on the transformation of Indian Railways.

"On the supply side, increase in load coupled with reduction in turnaround time of wagons from seven to five days has contributed to an incremental loading capacity," the minister said in the rather simplistic explanation.

With financial parameters back on track, the Indian Railways now has set itself ambitious targets in areas such as refurbishment of stations, passenger amenities, better coaches and new freight corridors as it approaches the 11th Five Year Plan that begins April 1.

And says KPMG: "Indian Railways is in a dynamic phase of growth with new initiatives planned to capitalise on the existing gains and moving steadier and closer to the larger objective of offering world-class services in both freight and passenger transportation."


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## Bushroda

*Lifetime jobs a thing of past*

KOLKATA, July 20: Lifetime employment is a thing of the past and marketing economy has come of age. This was the general view expressed by experts at the HR Summit 2007 organised by the Indian Chamber of Commerce here today. 

According to top HR bosses, employees decide to continue with or leave an employer on the basis of job satisfaction. 

If they feel important and engaged in the company and get credit for their job, more often than not they stay, said Mr Anand Nayak, executive vice-president of ITC. Further, he added, in most cases employees leave their bosses and not the companies. 

Making employees stake holders in the companys growth, however, was cited as a good retention strategy, though bonds dont work. What the earlier generation wanted to achieve in 40 years, this generation wants in 10 years, so loyalty is no longer the key, said Mr S Muthal, president HR of Nicholas Piramal. 

People need companies but it is the same for companies too. Addressing the summit, Mr Radhakrishna Nair, CHRO of Tata Steel, said that in todays perspective the bosses who feel insecure create problems.


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## Bushroda

*EXCLUSIVE INDIAN AVIATION SURVEY (Part 1): The message from India is clear, if the price is right people will find a way.*
Centre For Asia Pacific Aviation, Australia 
20-Jul-2007

(CAPA): The Centre For Asia Pacific Aviation (CAPA) recently surveyed almost 2000 passengers at major airports in India, the first such study to be conducted. The numerous findings of this survey were significant, and in many ways surprising. 
Fundamental trends in passenger behaviour have emerged, in the context of Indias Low Cost Carrier (LCC) revolution and this vast countrys developing economy. 

Watch this space over the coming weeks, as CAPA progressively presents the key findings in a 8-part series.

*Internet Sales and Credit Cards* 

Three years ago many arguments were put forward that Indian LCCs would inherently fail due to the low internet and credit card penetration in the Indian market. The LCC model would not work in India it was thought, as the glaring differences with the LCC environment in Europe and the US would attest. 

The spread of middle class affluence, in the wake of enormous economic growth, has challenged this point of view, and our survey results prove what we have in fact been hearing from Indias LCCs over the past year. The figures are startlingly clear, and still surprising to some  India is in line with global experience:

43% of LCC passengers in India bought their tickets over the internet; 
48% of LCC passengers in India used a credit card to pay for their ticket.

The figures relating to Indian passengers travelling on Full Service Carriers were significantly lower: 

21% bought their tickets over the internet; 
61% bought their tickets via a travel agent; 
31% used a credit card to pay for their ticket.


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## Bushroda

*Railways may flag off private stations*
Animesh Singh in New Delhi 

Imagine a railway station run by the private sector? 

In a significant move, the Railways are preparing a blueprint to set up greenfield railway terminals across the country under private-public partnership. 

The locations, which are being looked at, include a new terminal in Patna and Bijwasan (near Delhi).

Under the plan, the Railways would acquire and lease out the land to the private concessionaire. 

The private developer would construct and maintain all facilities during the construction period and run the operations for a specific period. The Railways will repossess all the assets after the concession period

The move is a part of the Railways new thrust to modernise stations and improve facilities for customers through private sector participation as the battle with low cost airlines hots up. 

The Railways have identified 16 stations, which would be modernised under the public-private partnership in various parts of the country. These include New Delhi, Chennai, Howrah, Mumbai CST, Bangalore, Bhopal and Lucknow amongst others.

A senior railway official said that the focus would be first on developing additional terminals at stations in the four metros, as these stations handle a lot of traffic.

Meanwhile, the ministry has selected the UK based company Terry Farrell and Partners, an architectural firm, for preparing the feasibility report and master plan for modernisation of New Delhi Railway Station.

The modernisation of stations would include setting up shopping and food plazas, budget hotels and retiring rooms. It also includes setting up spatial segregation of facilities at different floor levels for smooth passenger flow. 

Other facilities such as segregation of incoming and outgoing passengers, major facilities at first floor or underground concourse level, and direct vehicular access to the concourse would also have to be suggested by the company.


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## Bushroda

*India's ICICI Bank net rise 25 pct, meets forecast*
REUTERS, UK
Sat Jul 21, 2007 12:04 PM BST

MUMBAI, July 21 (Reuters) - India's second-largest lender, ICICI Bank (ICBK.BO: Quote, Profile , Research), reported on Saturday a 25 percent rise in quarterly net profit, meeting forecasts and helped by growing demand for loans in the expanding economy.

The bank, which is also listed in New York (IBN.N: Quote, Profile , Research), said its net profit for the April-June quarter was 7.75 billion rupees ($192.21 million), up from 6.20 billion rupees a year ago.

A Reuters poll of 10 brokerages and analysts had forecast a 24.6 percent rise in net profit to 7.7 billion rupees. 

Total income for the quarter was 92.81 billion rupees, up from 60.49 billion rupees a year ago.

Analysts are upbeat about India's banking sector but there are concerns about loan defaults after official interest rates were raised five times between June 2006 and March this year.

"We do see a little slowdown there because of the interest rate where they are and the property prices being high," Chief Financial Officer, Vishakha Mulye said.

ICICI Bank, which had an overall credit growth of 35 percent, has seen a slowdown in its mortgage and auto loans business, she said.

But this was offset by a near doubling in its international business and increase in non-collateralised portfolios such as credit cards and personal loans.

Its international business now constituted 16.5 percent of its advances book and non-collateralised portfolios made up 17-18 percent, up from less than 10 percent a year earlier, she said.

"As a strategy, we have increased our non-collateralised portfolio," Mulye said.

The bank's fee income grew by 35 percent with retail contributing about 55 percent of it and corporates accounting for another 42 percent. 

Analysts are optimistic about the prospects for the bank, which raised an Indian record $4.9 billion in share sales last month.

Shares in ICICI Bank rose 12 percent during the April-June quarter, lagging the 22.4 percent rise in the banking index <.BSESBANK> of the Mumbai exchange but matching the 12.1 percent rise in the benchmark index.


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## Bushroda

*Infrastructure fund for state govts: FM* 
Press Trust of India
Saturday, July 21, 2007 (New Delhi):

The apathy of state governments toward infrastructure development prompted the Centre to announce a Rs 100 crore corpus to help them in preparatory work of projects coming up with public-private participation.

"It would be a revolving fund that will get replenished from successfully bid projects. In case it needs to be topped up, it would be topped up through budgetary support," Union Finance Minister P Chidambaram said at a conference of Chief Secretaries on Public-Private Partnership (PPP).

The fund, to be called India Infrastructure Project Development Fund, would bear up to 75 per cent of development costs of projects till the bidding stage, he said.

If the bidding is successful, the amount given to states would be treated as interest free loans and in case the exercise fails, the assistance would be converted into grant. In case of successful bidding, the money would be recovered from those who get the contract, he said.

*Lack of projects*

Finance Ministry sources said that the fund would be sent to Cabinet Committee of Economic Affairs after approval by the Finance Minister.

Although finances were available, there were not enough infrastructure projects on the shelf in states, Chidambaram said, noting that large private funds were looking at India with interest.

After launch of two funds for infrastructure projects, including the $5 billion fund by Citigroup, Blackstone, IDFC and IFCL combine, other similar initiatives are waiting to be launched in India, he said.

*Forex reserves*

The Finance Minister reiterated that talks with the Reserve Bank were on to provide $5 billion from foreign exchange (forex) reserves for infrastructure projects.

"We have succeeded in convincing the RBI to lend $5 billion from the forex reserves to the India Infrastructure Finance Company Ltd, which would finance the infrastructure projects of Indian companies, especially for capital imports," a finance ministry official said.

Sources said the proposed borrowing from RBI would not be spent in the domestic market to avoid increase in money supply and inflation.

*Momentum*

Chidambaram said the pace of infrastructure projects had gathered momentum in 2006-07. As many as 12 states have agreed to sign MoUs with Asian Development Bank for providing technical assistance to PPP projects. Two such MoUs have already been signed, he added.

He said 31 proposals under PPP were received during 2006-07, out of which 21 involving a project cost of Rs 9,325 crore were given in-principle or final approval.

Similarly, 25 proposals under viability gap funding were received from state governments last fiscal, of which 18 were given in-principle approval, Chidambaram said.

*Quality and execution*

He said while funds are available, there is a paucity of infrastructure projects in the pipeline. "I wonder why there is not adequate projects in the pipeline. Every state should have a number of projects on the shelf," he added.

The Finance Minister also expressed concern at the quality of design of projects and the way they are executed. "These do not measure up to the requirement of the economy," he said.

India needs $475 billion of investment to improve its ports, roads, power and other infrastructure facilities during 2007-12.


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## Bushroda

*India likely to get more multi-billion dollar funds* 
BS Reporter / New Delhi July 22, 2007 

The country may see more multi-billion dollar infrastructure funds like the $5 billion fund, known as India Infrastructure Initiative, created by Citigroup, Blackstone, IDFC and IIFCL, finance minister P Chidambaram said today. Speaking at a conference of chief secretaries on public-private partnership (PPP) here, Chidambaram said there was no dearth of funds for infrastructure projects. 

"The problem is we do not have adequate pipeline of projects. Large private funds are looking at India with interest for funding infrastructure projects. Similar funds like India Infrastructure Initiative are waiting to be launched. 

Officials told Business Standard that some Japanese companies are interested in launching an infrastructure fund in India. "We are also in discussion with the Reserve Bank of India for providing money for infrastructure funding. This will make available an additional $5 billion funding," Chidambaram added. 

Gajendra Haldea, adviser to Planning Commission Deputy Chairman Montek Singh Ahluwalia, said at current estimates, India would need Rs 17,57,000 crore of investment in infrastructure. 

The central government would provide Rs 7,44,000 crore funds while states are expected to provide Rs 4,31,000 crore. "Private companies are expected to rope in Rs 7,44,000 crore (33 per cent of the total fund requirement) funds, he added. Chidambaram also announced a Rs 100-crore corpus to help state governments in preparatory work of projects coming up with public-private participation. 

"It would be a revolving fund that will get replenished from successfully bid projects. In case it needs to be topped up, it would be topped up through budgetary support," he said. 

The fund, to be called India Infrastructure Project Development Fund, would bear up to 75 per cent of development costs of projects till the bidding stage, he said. 

If the bidding is successful, the amount given to states would be treated as interest free loans and in case the exercise fails, the assistance would be converted into grant. 

In case of successful bidding, the money would be recovered from those who get the contract, he said. Finance ministry sources said the fund would be sent to the Cabinet Committee of Economic Affairs after approval by the finance minister, who had proposed it in the Budget for 2007-08. He said 31 proposals under PPP were received during 2006-07, out of which 21 involving a project cost of Rs 9,325 crore were given in-principle or final approval. 

Similarly, 25 proposals under viability gap funding were received from state governments last fiscal, of which 18 were given in-principle approval.


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## Bushroda

*India to use forex reserves for infrastructure*
New Delhi, July 21, 2007

With $475 billion required over the next five years to spruce up shaky infrastructure, India will use a part of its foreign exchange reserves to fund such projects, Finance Minister P Chidambaram said on Saturday.

"The government will not be able to meet the growing funding need on its own for infrastructure. The country will need massive private investment," Chidambaram told a conference on infrastructure in New Delhi.

"Private investment need is around $18-20 billion a year," he said, adding the government was discussing steps with the central bank to use some portion of the foreign exchange reserves, estimated at around $220 billion, for infrastructure.

Earlier this year, some leading financial services companies, led by Citigroup, Infrastructure Development Finance Company, Blackstone and India Infrastructure Finance Company (IIFCL) had launched a $5 billion infrastructure fund.

"Similar initiatives are waiting to be launched," the finance minister said.

Chidambaram also disclosed plans for the proposed India Infrastructure Project Development Fund and said up to 75 per cent of the expenses of projects under public-private partnership will be financed by it.

He said the revolving fund with a corpus of Rs 1 billion ($25 million) will be used to assist states and will get replenished not only from successful bid projects but also through budgetary support.


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## Bushroda

*Rs 100 cr fund to help states*
22 Jul, 2007, 0458 hrs IST, AGENCIES

NEW DELHI: The apathy of state governments toward infrastructure development on Saturday prompted the Centre to announce a Rs 100-crore corpus to help them in preparatory work of projects coming up with public-private participation. 

It would be a revolving fund that will get replenished from successfully bid projects. In case it needs to be topped up, it would be topped up through budgetary support, finance minister P Chidambaram said at a conference of chief secretaries on public-private partnership (PPP). 

The fund, to be called India Infrastructure Project Development Fund, would bear up to 75 per cent of development costs of projects till the bidding stage, he said. If the bidding is successful, the amount given to states would be treated as interest free loans and in case the exercise fails, the assistance would be converted into grant. 

In case of successful bidding, the money would be recovered from those who get the contract, he said. Finance ministry sources said the fund would be sent to the Cabinet committee of economic affairs after approval of the finance minister,who had proposed it in the budget for 2007-08. 

Although finances were available, there were not enough infrastructure projects on the shelf in states, Chidambaram said, noting that large private funds were looking at India with interest. After launch of two funds for infrastructure projects, including the $5 billion fund by Citigroup, Blackstone, IDFC and IFCL combine, other similar initiatives are waiting to be launched in India, he said. The finance minister reiterated that talks with the Reserve Bank were on to provide $5 billion from forex reserves for infrastructure projects. 

We have succeeded in convincing the RBI to lend $5 billion from the forex reserves to the India Infrastructure Finance Company Ltd, which would finance the infrastructure projects of Indian companies, especially for capital imports, a finance ministry official said. Sources said the proposed borrowing from the RBI would not be spent in the domestic market to avoid increase in money supply and inflation. 

Chidambaram said the pace of infrastructure projects had gathered momentum in 2006-07. As many as 12 states have agreed to sign MoUs with Asian Development Bank for providing technical assistance to PPP projects. Two such MoUs have already been signed, he added. 

He said 31 proposals under PPP were received during 2006-07, out of which 21 involving a project cost of Rs 9,325 crore were given inprinciple or final approval. Similarly, 25 proposals under viability gap funding were received from state governments last fiscal, of which 18 were given in-principle approval, Chidambaram said. 

He said while funds are available, there is a paucity of infrastructure projects in the pipeline. 

I wonder why is there not adequate projects in the pipeline.Every state should have a number of projects on the shelf, he added. The finance minister also expressed concern at the quality of design of projects and the way they are executed. 

These do not measure up to the requirement of the economy, he said. India needs $475 billion of investment to improve its ports, roads, power and other infrastructure facilities during 2007-12.


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## Bushroda

*Womenomics rises*
22 Jul 2007, 0057 hrs IST,Amrita Singh & Neelam Raaj,TNN

When the first women-only mall came up in Bangalore two years ago, it was expected to be a runaway retail success. But its developers, the Prestige group, were soon forced to close the doors on their novel concept. Says Neeraj Duggal, vice-president of retail development for Prestige, "We could not fill the space in Eva as there weren't many women-specific products and brands back then." 

Today, he'd be running way, way short of store space. From apparel brands to financial products, from automobiles to even the latest radio station, everything's aimed at the new woman consumer. The future of the world economy lies increasingly in female hands, wrote the Economist in a cover story titled Womenomics last year. And for marketers in India, profits increasingly rely on their power to loosen those Gucci purse-strings. 

*X FACTOR *

No wonder that after years of playing second fiddle to men  and even children - when it came to marketing, the upwardly mobile woman is now spoilt for choice. She can talk on a pink mobile phone, using a women's prepaid SIM that allows her to make calls even when there is no balance, shop with a cashback women's credit card, bank at a women's branch, whiz around in a car bought with 'women on wheels' loan, stay on a women-only hotel floor and even go on an all-women holiday. Whew! If that isn't the power of the X chromosome, what is? 

Even traditionally male categories such as technology and automobiles are queuing up to woo the queen bee. Remember the SUV ad where a young woman pushes aside a man to get into the driver's seat? 

Well, she is in the driver's seat, literally, going by surveys that gauge consumer trends. According to a KSA-Technopak 2006-07 consumer survey, Indian women will be spending more on themselves than ever before. "As more and more young women join the workforce, they are buying things for themselves that give them a sense of confidence and independence. They also don't think twice before spending on themselves. They buy it now and pay for it later. It's all because they are far more confident today then they ever were," says Kiran Gera, president of Ficci's ladies association. 

The increased spending power is clearly reflected in the figures. Says Atul Chand, vice-president, marketing for John Players, "If the men's branded clothing market is growing at 10-15%, women's branded wear is growing at 30-35% annually." No surprise then that last month, John Players, launched Miss Players. Allen Solly, another menswear brand, had taken the plunge earlier after it realized that women were behind the rapid sales in sizes 26 and 28 rather than thin men! 

*ALL ABOUT EVE *

It isn't just urban woman that manufacturers are looking at. "Growth is equally buoyant in smaller towns and cities," affirms Chand. The small-town girl, according to a study by Grey Global Group, is three times more likely to think "a big house and a big car" are necessary to happiness. 

Aspirations are definitely soaring and for companies, this is incentive enough to explore what will drive a woman to spend. When Hero Honda rode into the gearless scooter segment with Pleasure, it decided its focus was going to be women. So the company conceptualised Just4her outlets which were manned by female service supervisors and sales executives and offered anytime pick up and emergency services. All women scooter owners could become members of the lady riders club and get personal as well as accident insurance. 

With Pleasure notching up sales of over 100,000 units at a time when the scooter market overall has been on the decline, brand experts say the company's strategy of reorienting to the new consumer on the block is paying off. 

Two years ago, ITC hotel, the Maurya, was one of the first to heed the needs of its single women travellers. The Eva floor, refurbished recently, offers its female guests the services of a woman butler, optimal security by restricting elevator access to only those with room key cards and an interactive doorbell to see who is at the door. 

"Demand for the Eva floor is so high that the rooms are always booked," says hotel spokesperson Prathima Vasan. 

If everyone's rolling out the red carpet, it's all thanks to the power of the purse. The number of women employed in high-paying knowledge industries has been on the rise. According to Nasscom, almost 30% of the workforce in the IT industry comprises women and this is slated to go up to 45% by 2010. In the BPO sector, women make up for 50% of the workforce. Little wonder that they have become prized clients for banks who are customising products for them. 

Admits Parag Rao, head of marketing credit card division with HDFC Bank, "Three years ago, only about 15% of our clients were women. Today, the figure stands at 25 and it's growing." 

*BANKING ON HER *

Banks are increasingly attracting women who earlier, despite managing household funds, seldom approached a bank. Manju Srivatsa, vice-president, retail at UTI Bank, says, "Women are a little hesitant approaching banks as financial products have traditionally catered to men. It is this attitude that is changing." 

From providing free accounts for children to ensuring a hassle-free banking experience by giving women account-holders a single point of contact for all transactions, there's a lot on offer. All because it makes more financial sense to target women. Says Harish Bijoor, a Bangalore-based brand consultant, "Men are selfish buyers and usually buy only for themselves but women make purchases for the entire household. In most households, it's they who control the purse strings." 

But women can be tricky customers and experts warn that businesses could read them all wrong. It's easy to straitjacket women customers into the stereotypical alpha female or the fashionista merely satisfied with discounts at beauty outlets. But with the modern women refusing to fit into any of these neat categories, marketers may have to do more than just think pink.


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## Bushroda

*UPS faces protective challenges with India *
By RAYMOND THIBODEAUX
For the Journal-Constitution
Published on: 07/22/07

New Delhi, India  Namdan Kishore's trips to United Parcel Service's retail store in this sprawling business plaza of India's dusty capital have become routine. As an office assistant for a real estate developer, he spends most of his days copying paperwork, making copies of copies and sometimes express mailing them.

"I used to go to a small photocopy shop in this same plaza," Kishore said. "The copies here are better and here there is good air-conditioning," a competitive leg-up in New Delhi, which at an average temperature of 115 degrees feels like a furnace in the summer.

He's not exactly the big-spending corporate client that international express couriers dream about. But tapping into even a modest percentage of little spenders like Kishore adds up in a country like India, with 1.1 billion people.

With its Indian partner, Jetair Business Solutions, Sandy Springs-based UPS expanded business in India by a whopping 25 percent last year, representing a growing  if deliberately undisclosed  portion of UPS' $47.5 billion in revenue. The UPS Store in New Delhi, the company's fourth in India, is part of a rollout of 150 retail stores over the next four years.

With markets at home becoming saturated  and with an economy appearing to slow down  many American companies are looking toward the world's fastest-growing economies, India and China, to pick up the slack. India's economy is expanding at its fastest rate in nearly two decades: Its $771 billion economy grew by 9.4 percent in the last fiscal year, slightly higher than expected.

But India's postal service wants to rein in international express couriers doing business in India, in what many here see as a backward step in the liberalization of the country's economy.

A recent proposal to be reviewed by Parliament gives the postal service exclusive rights for express delivery of letters weighing up to 300 grams within the country, virtually shielding the government agency from competition.

The proposal also blocks foreign ownership of express couriers operating in India and requires large private courier services to fork over 10 percent of their profits to a fund that helps the government improve its delivery service to the country's rural areas.

"Until we resolve this issue, it's going to be difficult for foreign companies to expand their operations inside India," said John Fennerty, deputy economic counselor for the U.S. Embassy in India. "In this climate, it's difficult to make business judgments."

UPS Jetair's managing director, Pirojshaw Sarkari, said the express courier industry has banded together to fight the new proposal.

"We are working to show the Indian government international best practices with regard to the basic principles on which the express industry and national postal services should interact, such as by having an independent regulator for the industry [and] a level playing field in the competitive services market between the national post and the private sector," he said.

*Protectionism tradition*

India historically has favored trade measures that have protected its own markets from foreign competition, even as it decries unfair restrictions of its exports abroad. It wasn't until the early 1990s that India began a big push to open its markets to the West, resulting in a huge export boom that helped international couriers flourish.

Still, vestiges of those older trade policies persist. In the latest tiff, the United States and Europe point to India's high import duties for wine and liquor, which are more than three times the cap set by the World Trade Organization. Just off the heels of a decision to allow imports of Indian mangoes, the United States has chided India for not importing American wheat, which could help feed India's 400 million malnourished children.

"If the political and legislative climate wasn't good, we would not have so many companies coming to invest their money in India," said G.K. Pillai, India's commerce minister.

Foreign direct investment in India more than tripled last year to about $18 billion, according to government figures.

With more foreign money circulating in India's economy, the country's government can better afford infrastructure improvements such as more roads and more sea and airport facilities, Pillai said, adding that a $140 billion plan is in the pipeline for those projects.

In a recent UPS annual survey of 1,200 Asian business leaders, more than half of those polled said India's political and legislative environment was less-than-friendly to foreign companies. Weak transportation and power infrastructure were also cited as disadvantages to doing business in India.

In India's larger cities like New Delhi and Mumbai, formerly known as Bombay, the roads are often packed with city buses and rickshaw taxis battling for the least-clogged lanes  and more importantly swerving to avoid the cows that wander aimlessly through the city's snarled rush-hour traffic.

"There are challenges in terms of infrastructure, the regulatory and tax environment, but those things are not uncommon when doing business in developing countries," said John Flick, UPS International spokesman. "All these things require a deep local understanding and we have a local UPS team working on those challenges."

*Slowly building the brand*

For now, UPS is hoping its retail stores bring more brand-name recognition in a country where many people still go to streetside letter-wallahs who type up their correspondence on manual typewriters.

Already, international express carriers are part of a new trade route as millions of Indian expatriates living in the U.S. and Canada use companies like UPS to send an endless stream of birthday and wedding gifts, as well as the latest technological gadgets that might be hard to find in India. In return, Indian families here send their relatives abroad hard-to-find Indian spices, textiles and other gifts from the homeland, turning international companies like UPS into the modern-day equivalent of ancient trade routes. The UPS Store chain offers packaging and express shipping, as well as digital printing, office supplies and ticketing services for Jet Airways, one of India's largest airlines.

"With some aspects of our retail store, we have to create demand," said Hauafreed Nasrwaingi, marketing director for India's UPS-Jetair joint venture. "When I tell them they can send stuff to the United States within 48 hours or less, they are happily surprised."


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## Bushroda

*Healthcare gaining momentum* 

Coimbatore, July 21: With Indian health industry expected to grow at an exponential rate in the near future, there was the need to address facilities in non-metropolitan cities with regard to infrastructure, state-of-the-art technologies and services, industry analysts said.

According to Dilip Sawhney, Vice-president, GE Healthcare, the healthcare industry was booming following the growth in middle class economy and its expenses for medical care.

Swati Chaturvedi, senior industry analyst, Frost and Sullivan, a global growth consulting company said that despite the growth, the emerging healthcare segments faced some major hurdles in availability of equipment, services and trained manpower, reimbursement patterns and upgradation of technology at affordable prices.

Various stakeholders in the non-metropolitan cities like Kochi, Salem, Vijayawada, Jalandhar, Sanghli and Satara to overcome these hurdles in order to provide easy and affordable medical service to the masses, she told reporters, on the sidelines of a one-day summit 'Penetration of Quality Health in the Value Segment' here.

Anand Rangachary, Managing Director of Frost and Sullivan, said that increased focus of multinational companies on the Indian market to leverage its potential to develop as a cost-effective design and manufacturing hub was a critical factor which would define the growth expected in the coming years.

Another critical factor was the increased Government efforts and public-private initiatives in developing healthcare facilities, he said.

The company had conducted a pilot study in cities like Kochi, Salem, Vijayawada, Jalandhar, Sangli and Satara to understand key challenges faced by hospitals and bring forth the issues to relevant stakeholders in the indsutry, Anand said. The study revealed some of the key growth barriers such as low penetration of health insurance, lack of efficient after- sales service and non-availability of trained para-medical staff and technicians, he said.

Sawhney said there should be a collaborative approach and understanding between the doctors in the rural and semi-urban areas and big hospitals in the metros and two-tier cities so that patients could get better treatment.

GE was launching newer products suitable to the Indian market, he said adding the medical and health care industry was plagued by lack of skilled manpower, particularly in rural areas.


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## Bushroda

*Starbucks puts India on back burner*
Channel News Asia, Singapore
Posted: 22 July 2007 0249 hrs 

NEW DELHI : Starbucks, the world's largest coffee shop chain, has said it is postponing its plans to enter India but remains "committed" to opening up in the country. 

Seattle-based Starbucks said in May it aimed to open the first of 100 planned outlets in New Delhi or Mumbai by the end of 2007. 

But the company has formally withdrawn its application to operate through its wholly owned subsidiary, Starbucks Coffee International, the statement issued late Friday by the company's US headquarters said. 

"Starbucks is reviewing all its options and evaluating how we can proceed related to our entry into one of the fastest growing economies in the world," said the statement, quoted by Press Trust of India. 

The company gave no reason for its decision. 

It said it remained excited about the "great opportunities that India presents" and was committed to opening in India, but gave no timeframe. 

"It is premature for us to announce any new dates," Starbucks said. 

The company in May submitted a fresh application to India's Foreign Investment Promotion Board for clearance after an earlier request to forge a joint partnership was turned down. 

The first application was refused because of concerns about its proposed ownership structure, which was to be split among Starbucks, Indian retailer Kishore Biyani and VP Sharma, Starbucks' business partner in Indonesia. 

The joint venture structure was not in line with Indian rules that allow up to 51 percent foreign investment in single-brand retail outlets. The combined stakes of Starbucks and Sharma would have breached the foreign direct investment (FDI) limit. 

The decision by Starbucks came nearly a month after the government after the Indian government asked it to revise its entry proposal for a second time. 

Starbucks had initially sought to enter India through the franchisee route but was told by the Indian government to consider the FDI route instead. 

Local coffee chains have mushroomed in tea-drinking India in the past few years as spending increases because of a booming economy. 

The decision came among uncertainty about the government's FDI policy. 

Earlier this year, the world's second largest retail company, Carrefour of France, said it was putting its India plans on hold until "policy issues on FDI in retail are made clear." 

In June, British supermarket giant Tesco said it would wait for changes in FDI regulations to enter India.


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## Bushroda

*PC Sales Up 26 Per Cent: MAIT* 
EFY News Network

*PC sales are projected to touch 8 million units in fiscal 2007-08, given the strong macroeconomic conditions and buoyant buying sentiment in the market, led by demand from various industry verticals.* 

Thursday, July 19, 2007: The total PC sales between April 2006 and March 2007, with desktop computer and notebooks taken together, were 6.34 million (63.4 lakh) units, registering a growth of 26 per cent over the previous year. The buoyant mood in IT consumption was led by significant growth in notebook sales, which grew by 97 per cent, while purchases of desktop units grew by 19 per cent, as per the findings of the survey released by MAIT for fiscal 2006-07. 

Demand was highest from the telecom, banking and financial service sectors, education and BPO/IT-enabled services, and rose also on account of e-governance initiatives of the union and state governments. Further, significant consumption in the SMEs contributed to the industry growth and consumption in the home market remained buoyant. The southward trend in pricing continued during the year due to technology reasons. 

Commenting on the need for a strong domestic IT market to strengthen India's hardware manufacturing industry, Vinnie Mehta, executive director, MAIT, said, "Domestic demand is likely to gain further momentum in 2007, which has been declared the 'Year of Broadband'. The industry is eagerly awaiting the long overdue policy for the manufacture of IT and electronics products. This could play a critical role not only in boosting highly capital-intensive activities like the manufacture of semiconductors, LCDs, storage devices and other related products, but also in expanding the consumption of IT goods and services in the country." 

Emphasising the need for robust infrastructure to boost manufacturing, Mukul Singhal, president, MAIT, added "Clearly, apart from a stable policy regime, a strong infrastructure base is the need of the hour. We need reliable power, and a logistics and transportation infrastructure that can make India a viable manufacturing destination, ensuring timely delivery of goods produced. For our electronics industry to take its contribution to the Indian Economy to the next level, and for these firms to be globally competitive, it is imperative to create competitive infrastructure."


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## Bushroda

*Indian diaspora - the bridge that links India to the world*
Written by
Aroonim Bhuyan 

"When I meet heads of state and government and business leaders in distant lands, they tell me very proudly that the Indian community is a great asset, that people of Indian origin are highly creative, productive, enterprising, peace-loving and devoted to their families, their communities and their neighbourhoods."

Prime Minister Manmohan Singh said this while inaugurating the Pravasi Bharatiya Divas (PBD) 2007, the annual conclave of the 25 million-strong Indian diaspora spread across 130 countries, at New Delhi's Vigyan Bhavan convention centre Jan 7, putting in perspective the reputation the Indian communities overseas enjoy. And with it, the importance the Indian diaspora holds for India in the global context today.

"We are one family. The whole world is our home. That is why I have often said that while the sun has set on many great empires of the world in the past, the sun will never set on the world of the Indian diaspora! From Fiji in the East, to Los Angeles in the West, from Cape Town in the South to Toronto in the North, the people of Indian origin are the world's most globalised community," the prime minister said.

It is not just the moolah, the remittances, that count, say Indian officials who power the Ministry of Overseas Indian Affairs (MOIA), the nodal ministry that interfaces with non-resident Indians (NRIs) and persons of Indian origin (PIOs). There is knowledge and experience to be shared, ideas to be explored and successful models in multiple fields to be replicated.

As the prime minister said, "Invest not just financially, but intellectually, socially, culturally, and, above all, emotionally."

The Indian diaspora, once considered as the manifestation of 'brain drain', is now looked on as a major catalyst and enabler that can spur the country's growth rate, much like the overseas Chinese have turned out to be for China's phenomenal growth.

And that is because overseas Indians have made significant achievements in all fields, be it politics, education, industry, sports, arts, science technology or philanthropy.

Last year alone, overseas Indians were in news all across the world -- from New Zealand where Sir Anand Satyanand became the first person of Asian ethnicity to be appointed governor-general of that country, to Britain where L.N. Mittal came to head the world's largest steel entity, Arcelor-Mittal, to the US where Sunita Williams became the second woman of Indian origin to go to space.

The year 2006 also saw writer Kiran Desai becoming the youngest woman to win the prestigious Booker Prize and Indian American Indra Nooyi being appointed the chief executive of global beverage giant PepsiCo.

Prior to blasting off to space, Williams, whose father hails from the western Indian state of Gujarat, said, "I am half Indian and, I am sure a group of Indian people are looking forward to seeing a second Indian, a person of Indian origin, flying into space."

She was only partially correct. It was not just a group of Indians that had looked forward to her flight to space. It was the whole of India that was connecting emotionally with one of its "achievers" overseas.

The brightest side of this new sunshine story of India and its growing links with its diaspora is that overseas Indians are acknowledging with pride their Indian origins.

At his swearing-in ceremony in New Zealand's capital Wellington, Sir Anand said, "I acknowledge also my Indian origin, with four grandparents who migrated from that country to Fiji."

Another positive aspect of this new phenomenon is that many overseas Indians are returning to India, to actually take part in its growth process.

One very good example is Vikram Akula, founder of SKS Microfinance, an organisation that offers micro loans and insurance to poor women in impoverished areas of India.

"We need to look at getting microfinance in every village and every slum in the country," Akula, who holds a BA from Tufts University, an MA from Yale University and a PhD from the University of Chicago, told CNN.

Similarly, the American Association of Physicians of Indian Origin (AAPI), one of the most influential professional bodies in the US, has started two pilot projects in Bihar and Andhra Pradesh to improve primary healthcare in the two states.

It is not that one needs to come back to India to contribute to its growth story. After all, the Indian diaspora is being seen as the bridge and enabler that links India to the rest of the world.

Nothing manifests this better than the recent civilian nuclear energy deal between India and the US.

After Manmohan Singh and US President George W. Bush agreed on the deal, the Indian American community, regarded as the most educated and affluent of all immigrant communities in that country, lobbied hard for the US Congress to pass the bill that gave accent to the deal.

"I thank the overseas Indian community and its leaders who played a very significant role in highlighting the importance of this initiative in the US and elsewhere," Prime Minister Singh said at PBD 2007, acknowledging the Indian American lobbyists' hard work.

Another heartening aspect of this new phenomenon is that overseas Indians living in different countries are drawing upon their common Indian roots to seek each other's help.

After Trinidad & Tobago, home to around 520,000 Indian origin people, put up a rather creditable performance in its football World Cup finals debut last year, the Indian diaspora in that country sought the help of Indian origin footballer Vikash Dhorasoo to promote football among the youth there.

After all, it was at the same World Cup finals that Dhorasoo, whose ancestors had migrated from Andhra Pradesh to Mauritius, became the first Indian origin player to play in a World Cup finals match when he took the field for France in a group match against Switzerland.

If India hopes to keep using the bridge that the diaspora is, it has to maintain it too, see to it that no cracks develop, and ensure that the bridge stands on a string foundation. It was precisely with the mandate of looking after the welfare of overseas Indians that the Indian government had created the MOIA in September 2004.

Since then, the ministry has been taking several initiatives to keep India's ties with its diaspora strong.

A very important development has been the proposed PIO university.

"It is a wrong notion that all overseas Indians are rich," Minister for Overseas Indian Affairs Vayalar Ravi said in the course of an interaction with reporters in New Delhi. "They want quality and affordable education and we will provide this to them through the PIO university. The fees (for various courses) will not be high."

Another key initiative by the government has been to push for labour welfare pacts with countries, particularly in the Gulf, which have a large number of overseas Indian workers, and who contribute substantially to the country's economy by way of remittances. More than $23 billion flowed in to India as remittances last year, which was the highest for any country.

In fact, it won't be wrong to say that MOIA and its mandate will have to play a key role in India's growth story.

India and the Indian diaspora - two shining stories. Two stories linked by the common bonds of history, heritage and culture. India sees this combination as an essential component in establishing itself as a global power, sooner than later.

As Singapore's Deputy Prime Minister S. Jayakumar, himself of Indian origin, said about the Indian diaspora at PBD 2007: "They are not merely cultural ambassadors for India abroad; they are also ambassadors of the 'abroad' to India and can help interpret and explain international conditions to India and so contribute to its transformation."


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## Bushroda

*Shakers: Business personalities in the news*
International Herald Tribune

*Developer in India plans $25,000 homes* 

Unitech, the Indian development firm controlled by Ramesh Chandra, is considering building homes that will sell for as little as 1 million rupees, or about $25,000, as economic growth lifts more of the people in India out of poverty.

"As people come above the poverty line, there will be a requirement for mass housing," Chandra said Wednesday. "They will not be able to afford 4 million-rupee houses, their demand will be mainly for 1 million-rupee or 1.5 million-rupee houses. And for that, the demand will be phenomenal."

At least 291 million Indians will increase their annual household income to at least 90,000 rupees, or $5.40 a day, by 2025, McKinsey estimated in May.

DLF and Unitech, which are among the biggest Indian developers, are benefiting as the country's economy expands at an average of 8.6 percent a year.

The developers may need to turn to the mass market if a glut develops in the luxury market now favored by many builders, said Suhas Naik, a fund manager at IL&FS in Mumbai.

India will need as many as 10 million new housing units a year by 2030, according to the Asian Development Bank.


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## Bushroda

*Rural India driving high-end cars sales*
22 Jul, 2007, 0430 hrs IST,John Sarkar & Raja Awasthi, TNN

NEW DELHI: If C K Prahalad had been an automobile marketer, which places he would have zeroed on? You are right if you thought villages. In fact, premium carmakers are making a beeline to rural hinterland. 

In the north, sales of high-end cars are picking up in places such as Karnal, Hoshiarpur, Bhatinda and Patiala, and in the south, the backwaters of Kerala and rural areas of Karnataka is turning out to be an attractive destination for manufacturers. 

Companies such as Honda, Hindustan Motors, GM and Ford are are bullish about these rural hotspots and are expanding their presence in these areas by increasing the number of dealerships and marketing activities. This apart, the trend also reveals that among the number of vehicles sold, SUVs garner a considerable chunk of the market. 

According to Taipan Traders, authorised dealer of Mercedes Benz from Karnal up to northern territory, MD Manjit Singh Bala, there has been a jump of 35 to 50% in sales of high-end cars and SUVs in the last two years. While driving on our type of roads, the brand name and safety put the Merc above the rest. We are getting around 60 queries daily. 

Another reason for this is that with the real estate boom in the country which is fetching handsome prices for land, farmers in many areas have shown interest in buying big cars or SUVs, adds Mr Bala. 

Even the Honda CR-V is basking in all the rural attention it is getting. Apart from our main markets in metros, we believe that there is strong growth potential in the tier II cities and towns. We are increasingly focusing on these cities and setting up new dealerships there, a Honda Siel spokesperson told SundayET. 

Three factors have lead to growth in sales of SUV in rural India. Real estate, communication and boom in the economy. With the rise in income level people now are looking at the best at whatever price. We are dealing with Honda cars in the entire north India from last 10 years. The CR-V new model has seen a growth in sales by 100% in cities and more than 100% in rural belt. Besides this the frequent visit by the NRIs has also made a huge difference, said Lally Motors, authorised dealer for Honda Siel in the north, MD Sarav Deep Lally. 

In fact, carmakers believe that the NRI population in rural places are boosting sales, which is a logical enough reason. A large amount of Gulf money flows into some states like Kerala. Brand aspiration coupled with high peer pressure that pushes people to go in for these expensive vehicles, despite infrastructure being almost non-existent. We have witnessed our sales growing by leaps and bounds in rural areas of Punjab and Kerala, said a spokesperson for Hindustan Motors (HM), which markets top-notch SUVs such as the Mitsubishi Pajero and Montero. 

Even General Motors is looking aggressively at the rural market. We do a lot of road shows in these areas. And in the north, we have covered the region well with a vast number of dealerships too. So whenever someone from any rural district wants to pick up a car, its easy for him, said GM Veep Corporate Affairs P Balendran. 

So, with rural income burgeoning, its easy for carmakers too. Right Mr Prahalad?


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## Bushroda

*A new era in first class travel*

*The Indian airline Jet Airways wants to become a top-five carrier; so its just launched the worlds most extravagant first class*

Matt Rudd 
TIMES ONLINE

As of last weekend, I wish Id gone into organised crime when I left school. It never occurred to me as a good career option  making people sleep with the fishes and so forth  but now it does. Because Id have loads of (laundered) cash and I would be able to fly first class all the time. 

Having loads of (laundered) cash hadnt been an issue before. I had accepted life down the back, with the occasional upgrade to business. Besides, first class had never been sufficiently better than business to justify a life of lucrative but morally reprehensible crime. In fact, a friend of a friend of a friend who has gone into crime actively opts for business class on British Airways because he doesnt like the smothering you get in first. 

Last weekend was different. I experienced a first-class epiphany on a Jet Airways flight from India. Jet is the first airline in the world to introduce private cabins. Im using quotes because, strictly speaking, theyre not private. The sliding plantation-style doors and surrounding walls go up only about 4ft, meaning the cabin crew can peek over the top if they want. But for privacy in the skies, these cabins are unrivalled. 

I boarded from a steamy monsoon morning in Mumbai, ushered from check-in to seat as if I were concluding a state visit. Economy passengers were physically manhandled out of the way to make my progress swifter, which I loved. Then I took my seat (1A, since you didnt want to know) and began wondering whether you could still get into organised crime in your mid-thirties. Because theres no doubt Ive left it too late to become Justin Timberlake. 

I noticed the differences in quick succession. First, the stewardesses are more beautiful in first, which is sexist of me to notice, but surely not a coincidence. Second, you get foie-gras canapés with your drink, not pretzels. Third, the chair has a custom eight-point massage system. And fourth, Al Gores excellent An Inconvenient Truth  about how all our carbon consumption is destroying the planet  is one of the films available on my 23in recessed LCD television screen. So, three good things and one stark reminder of how awful it is to take such an obscenely large portion of a Boeing 777 all the way back from India. 

Still, lunch was amazing. Everything is served on full-size crockery, with full-size cutlery, in full-size portions on a full-size table à deux. Its like having a meal in your own private restaurant. After a delicious soup, I had sowewaali macchi tikka, murgh parchcha kebab and dum ka jhinga achari  aka salmon medallions, chicken and curried sea prawns. I could have followed with the rosemary-pesto rack of lamb, but I went for a chicken and cashew curry. It arrived warm rather than hot, which was annoying. If Id been an organised criminal, I would have complained. 

I drank, in the following order, the Krug Grande Cuvée (because its much more distinctive than the Dom Pérignon 1999), a top Chassagne-Montrachet and a big, juicy Saint-Julien. Then, because I was really getting into the conspicuous-consumption thing, I tried two of the three ancient malts in the single-malt library. 

BECAUSE the doors dont go all the way to the top, this is not the place to join the mile-high club with grace. Although the bed is big enough for coitus noncontortus, a (beautiful) hostess could peek over at any time  which would be off-putting, unless youre into exhibitionism. Im assuming youre not, so its still the toilet or a private jet for you. 

For me, none of this was an issue  Id left my amour at home  so I made do with the next best thing instead. I put on my beautifully tailored complimentary pyjamas, asked my waitress  sorry, stewardess  to convert my presidential seat into a bed (complete with above-and-below quilts and not one but two man-size pillows) and went to sleep. 

It was the sleep of babies. Rich babies with enormous silver spoons in their mouths, heavily dosed on Calpol, but babies all the same. Im 6ft 4in. My legs dont fold into a 31in seat pitch, so I never sleep in economy. Flat beds in business are, of course, better, but they dont allow me to fold up into the foetal position Ive preferred ever since I found a scorpion at the bottom of my sleeping bag one morning in the Kalahari. 

On Jets 83in-long flat bed, I could do what I damn well wanted. Or what I didnt want. I mean, who would pay £4,000plus to sleep? I wanted to drink Krug from Mikasa crystal for the whole eight hours. And watch guilt-inducing films using my Bose noise-reduction headphones. And make phone calls to buy and sell whole companies. And watch the world fly by through one of my four, yes, four, windows. I didnt want to sleep, but I couldnt help myself. I barely had time to change (in the outsize washroom), powder my nose (with my bag of Bulgari toiletries) and settle back into my seat for a refreshing fruit platter before we were touching down at Heathrow. 

And for all those of you who have found it irritating to read about what goes on in front of the many curtains that separate first class from economy, youll be delighted to hear that all the VIP pampering that accompanied my flight was undone by the time Id fought my way through gridlock Heathrow to the Piccadilly Line. And they didnt let me nick the Bose headphones, either. 

IS IT WORTH £4,360? Well, no, of course not. Unless £4,360 is no object, and then, yes, of course it is. Its not like flying at all. Its like hanging around in your own bedroom watching films, stuffing your face and not achieving very much at all. Which is the best thing in the world. Anyway, BA charges £3,665 for a first-class ticket to Mumbai, and it doesnt have private cabins. 

With the redesign of all three classes on Jet Airways, its chairman announced his intention to make the airline one of the top five in the world in the next 10 years. Theres no reason why it shouldnt be there already. The ergonomic economy seats feel far more spacious and comfortable than BAs; business class is on a par with the others; and those eight cabins up there in first class, as I so selflessly established, are in a league of their own. 

Now, if youll excuse me, I have to have a little word with a shopkeeper. Hes late with his protection money.


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## Bushroda

*Speed dating for entrepreneurs*
22 Jul 2007, 0012 hrs IST,Sujata Dutta Sachdeva,TNN

They meet for a short while, interact, and if they like what they see, decide to forge a relationship. No, this is not about speed-dating couples, but yes, the concept is the same. Young innovators look for experts to validate their innovations and also the right investors to kick-start their start-ups. 

Much like a speed dating event, these entrepreneurs meet on a pre-fixed date and venue. It's an informal get-together, like an unconference. An innovator gets six minutes to showcase his idea. But he must have a working prototype to press his case. The audience gives instant feedback, and if they are lucky, they even get a virtual capitalist or angel investor to fund their dream project. 

Such events are the latest trend among tech start-ups in India. While TiE's annual summit brings together entrepreneurs and investors, IITs mentor students who want to be entrepreneurs. But these are more formal platforms. There's a smaller and more informal event involving venture capitalists and start-ups. The first such event, Proto.in, was held in Chennai this February. Attended by nearly 140 people, it was a runaway success. 

The second such event is taking place in IIT-Chennai on Sunday. And this time, 25 entrepreneurs, handpicked from over 100 applicants, will showcase their prototypes. Watching them make their pitch will be a handful of VCs and angel investors. Twelve Malaysian start-ups are also participating. Similar to Barcamps and Mobile Monday unconferences, where geeks brainstorm, discuss the latest advances in technology and look for solutions, Proto is a platform for tech start-ups to pitch their innovation to experts, investors, and other like-minded people. "It aims at creating an ecosystem for technology start-ups that will redefine the image of India in the global economy, from being a mere outsourcing destination to that of a source of global technology innovation," says Ravi Shankar, one of the brains behind the event. The mantra is: 'create, contribute, collaborate'. 

Aloke Bajpai, who co-founded iXiGO.com with IITian Rajnish Kumar, Jens Schuetter of Amadeus Europe and Dharmendra Yashovardhan of INSEAD, was one of the many who attended the February Proto. "It was a mindboggling experience," he says. They showcased a Net-and mobile-based travel search engine that provides consumers an unbiased fare search and trip planning platform for the first time. "We have moved beyond the prototype stage and are looking for initial validation of our ideas from fellow technologists, and VCs. The boost in our credibility, post-Proto, made our task of hiring talent a lot easier," says Bajpai. 

Similarly, Lakshmi Narasimhan and Satish presented SpotEazy - a buzz aggregating technology which can crawl and mine the web for opinions, identify sentiments and combine them into a buzz score. The duo have applied this to consumer electronics to provide automated product recommendations that can guide people in making purchase decisions. "We weren't looking for VC funding. We had a prototype of our idea and wanted to bounce this off a group of tech enthusiasts and keen followers of start-ups," says Narasimhan. And he is happy with the feedback he got. 

Like start-ups, VCs too find the platform a great meeting ground. Rajesh Vakil of Siemens Venture Fund says he was attracted by the idea of meeting so many start-ups and the opportunity to touch and feel the product. "The event has a single-minded agenda, where start-ups pitch and others listen. From an investor's perspective, this is ideal, as you get to see many companies in the shortest possible time," he says. Mukul Singhal of Canaan Partners, another VC with investment interest in technology and healthcare sectors, was there in search of technology start-ups. "We get a lot of deals through our network but events like these give us a platform to meet new entrepreneurs in an informal setting," says Singhal. 

No wonder, most of them will make the trip again on Sunday. After all, six firms attracted investors in the last event. "In the black and red world of profits and losses, innovation is not easily captured in a spreadsheet or adequately described in a presentation slide. Yet we know innovators when we see them," says Rohit Agarwal, CEO, TechTribe Networks, in 'How Innovators Connect'. 

Unfortunately, the going is not always easy. "An innovator might have cool technology but what's more important is that the product must have a market and should be mature enough to succeed in the market. This is where most Indian start-ups find it difficult," says Vijay Anand of TeNet, one of the organisers of Proto. Also, most start-ups complain they barely get a chance to articulate their problems and find it difficult to attract clients, talent, partners and investors. So a platform like this helps in bringing together experts, VCs and market analysts who can help the start-up with their feedback that can make all the difference.


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## Bushroda

*A young Parisians dream project* 
Marie-Beatrice Gauthiez 

*He seeks to help underprivileged youth find new opportunities on Chennais food scene* 

CHENNAI: A year ago Alexis de Ducla, a young Frenchman from Paris, helped start La Boulangerie in Anna Nagar West, Chennai. It is a non-governmental organisation that offers training in pastry production and bakery management to young people from an economically disadvantaged background from the deprived areas of the city and beyond.

Every day a team of 24 hard-working young people knead, mix and cook croissants, breads, madeleines and other delicacies here. The crispy breads and the fine tarts go to restaurants such as the Park, Amethyst, Chamiers, and to shops like La Maison des Gourmets, the Auroville Boutique and Amma Nana. 

They undergo a two-year training course meant to give them a strong base in running a bakery. To be able to join, there is no need for them to have any set qualifications. Mr. Alexis and his partner, Antoine Soive, motivate the apprentices who are hired according to their level of poverty, thirst for knowledge and resolve to succeed. 

*The goal *

The goal is to train them, lift them out of poverty and push them towards good jobs: one of the trainees recently joined the Park as an intern. 

It represents a real opportunity for many of them. But it is not always easy. After my first day at the bakery, I left. I was frightened by the French team and by the organisation. But I finally came back, says Peter, one of the trainees. He comes from Dindigul. Ravi, the experienced executive master, says that life in Chennai and their backgrounds dont make their apprenticeship easy, but despite that they are doing a good job.

*From business school *

Educated at ESSEC, a French business school, Mr. de Ducla is not just another idealistic social worker. His ideas are down-to-earth and he tries to apply them to help people while also making a profit out of the operation. I am not here to change India but to play a role on a realistic scale, he says. He seeks to identify himself with those he seeks to help. 

Alexis was motivated to take up the project some six years ago after meeting Father Ceyrac, a Jesuit missionary who has been working to support children and people in distress in India for the past 60 years. At that time, Mr. de Ducla had no interest in India. He had skipped a lecture that Fr. Ceyrac gave in his school. But as fate would have it, after the lecture Fr. Ceyrac met Mr. de Ducla at a café and they started to talk. Before leaving, he told the young man: Help me Come to India. Two weeks later, an association named Collectif India was created. 

Over a six-year period, Mr. de Ducla visited India several times. He involved himself in many projects, including one in Madurai, but La Boulangerie is the one that best reflects its vision. For him, savage capitalism has wrought enough damage, and the answer should be shared capitalism from which everyone  rich and poor  can profit. Mr. de Ducla decided to settle down in Chennai because Tamil Nadu was his favourite region in India and because the city was booming. It had many hotels but lacked a qualified workforce in certain fields of food science. 

Mr. de Ducla talks about La Boulangerie as a test, an example that shows the big firms that this sort of project is viable and that helping the poor is not antithetical to making a profit. 

Acknowledging that profit and interest are the driving forces of the economy, he says humanitarian and social organisations should not shy away from these. He suggests that instead they should adopt a realistic framework that values entrepreneurship. 

What motivates him to pursue such an enterprise? I want to have a coherent life, responds Mr. de Ducla. It seems awkward to me to be working on the one hand for a big group like Nike that will exploit workers and on the other hand to create a humanitarian association. Humanitarian work and business should be one. 

He now plans to open a café on the tranquil terrace of the bakery on 15th Main Road in Anna Nagar West, where customers will enjoy croissants, cakes and sandwiches. Then he would wish to open a second café.


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## Bushroda

*The greenest skyscraper in India?* 
World Architecture News

http://imageshack.us

*FXFOWLE Architects' India Tower in Mumbai is under construction*

Construction has started on India Tower, a new 60-storey (301 meters) world-class Park Hyatt hotel, retail, and residential tower located in South Mumbai, India. The developer is committed to making India Tower a United States Green Building Council (USGBC) LEED Gold-rated project. Construction is expected to be completed in 2010. India Tower is located in the prestigious South Mumbai coastal area fondly referred to as the Queens Necklace. The towers rotated form emerges in response to the 3-acre site (1.2-hectares), the buildings functional requirements, and its mixed-use program that changes with each rotation of the tower. This circulation pattern separates retail, a custom-designed residential-style Park Hyatt hotel and serviced apartments, and long-lease and duplex penthouse condominium apartments. The design concept for India Tower was informed by Mumbais climate, the site, and the desire to create distinctive indoor and outdoor spaces with optimum views, inspirational settings, and personalized contemporary accommodations for all users. Designed to have the least possible impact on the environment, the tower will integrate current innovative sustainable systems and technologies throughout the building  solar shading, natural ventilation, daylighting, rainwater harvesting, and green interior finishes and materials  to make it one of the greenest skyscrapers in India. India Towers 3-story podium will include restaurants and cafés, luxury-brand retail stores, a health/fitness club with a swimming pool, and a nightclub/lounge. When arriving at India Tower, Park Hyatt guests will be directed to the Sky Lobby (levels 30-35) to check-in, then descend to levels 14 through 28 to their hotel residences. India Towers long-lease apartments will be located on levels 38 through 50, and will feature stylish and spacious two-story living spaces that have been specially designed to take full advantage of the expansive views from this height. Levels 52 to 59 of the tower will house one-of-a-kind duplex penthouse condominium apartments with unparalleled panoramic views.


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## Bushroda

*Tata's Rs.100,000 car: boon or bane for India?*
Posted July 22nd, 2007 by Tarique
By Bhamy V. Shenoy, IANS

It looks as though Tata's Rs.100,000 car will be a reality next year. It is now being praised all over the world as India's shining moment ushering in a new automobile era. When seen in the background of India's energy crisis, it shows India's total lack of preparedness and long-term planning failure.

On the part of Tatas, they have acted in a responsive and responsible way to deal with market realities. India's consumers are demanding better and more comfortable private vehicles at affordable cost with greater safety than two wheelers. But who is responsible for such a market? Why is the government least concerned about the detrimental impact this project will have? The Integrated Energy Policy report of 2006 brought out by the Planning Commission has clearly shown India's precarious energy supply/demand scenario. 

A well known American magazine Forbes has described Tata's car as "People's Car" and compared it to Ford's Model T, Volkswagen's Beetle and the British Motor Corp.'s Mini, all of which put a set of wheels within reach of millions of customers. It was this development that resulted in the US getting addicted to petrol. Will this be a happy development for India?

When the US, Europe and other developed countries were getting addicted to petrol, there was no fear of the world running out of petrol. The US has spent billions on developing its super efficient expressways and highways. Still some of them become virtual parking lots during busy hours. One of the biggest worries while planning to reach any place on time is traffic jams despite having personal cars. The development of private auto culture resulted in the slow deterioration of the once efficient US railway system.

Europe also followed in the footsteps of the US. But the EU countries did not allow their railways to deteriorate. Japan continued to develop its railway system and has now super fast trains. This has helped both the EU and Japan to stabilize their petroleum demand as their economy expanded since the first oil shock in 1973. The US is finding it difficult to get over its oil addiction. China has also decided to follow the US model. Its petroleum demand is growing rapidly as it switches from cycles to four wheelers in the name of development.

Unfortunately, India without strategic thinking is following the wrong examples instead of setting its own example to the rest of the world. In 1971 we had just 0.54 million two-wheelers and an equal number of four-wheelers. By the end of 2001, our two-wheeler population had exploded to more than 41 million and car population to only about eight million. Currently India has eight cars per 1,000 population. This is something we should be proud of and not quote the US or European statistics. In the case of the US it is more than 770 and for Europe it is more than 500.

In the 1980s and 90s, as Indians started to move from public transportation to private transportation mode using two wheelers, road congestion started to worsen while India's petrol demand started to increase rapidly. Now with Tata's Rs.100,000 car, which is likely to be followed by those of other manufacturers, families with two--wheelers will graduate to four-wheelers as happened in China from cycles to cars.

It took 30 years for the car population to increase 10-fold when cars were expensive. But with a lower car price and higher disposable income, this may happen quicker. In less than 15 years such a phenomenal growth took place in the case of two-wheelers.

No doubt the development of the automobile industry will have a multiplier effect and India's gross national product (GNP) will increase. But this GNP growth will also make life intolerable in urban areas where traffic congestion has already reached a critical level. Just one look at Bangalore is enough to convince any one.

We should learn from the example of city-state of Singapore that has succeeded in implementing draconian steps to reduce the automobile population. It has very high duty on cars and also it imposes high tolls for some of the congested roads during busy time. At the same time it has improved public transportation to reduce the need of having a private vehicle.

But in India, we do not have an integrated policy to take a look at different parameters affecting petroleum consumption despite having an integrated energy policy. These factors are: possible explosion in car ownerships when Tata and others introduce the Rs.100,000 cars, privatising public transportation to reduce cost and improve efficiency, massive investment in railways to improve the infrastructure, restructuring railway organizations to increase productivity and adapting minimum mileage standards for automobiles.

There is no need for the government to interfere with the market as they did during the licence-quota-permit raj to prevent Indians from getting addicted to petrol. But by adapting proper policy measures regarding the above-mentioned subject, the government can indeed reduce petrol and diesel demand so that India's energy security is not compromised. This is easier said than done. There will be resistance from the private automobile industry to impose high duties on cars.

Labour Unions will be unhappy at the prospect of privatisation of public transportation and also the political class which has learnt the fine art of monetising their influence. When Railway Minister Lalu Prasad is praised though wrongly for the 'efficient' operations of railways, there is no compelling force to bring about the needed massive reform in managing Indian railways. It is still not too late. If we act now, we can avoid being addicted to petrol and avoid the difficult and more expensive steps later.


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## Bushroda

*India's Booming Markets Attract New Investors*
HULIQ, NC
Submitted by Dinka on Sun, 2007-07-22 12:43. 

India's booming stock markets are attracting many new investors in the country as they continue to reach new highs. But many first-time investors have yet to learn that what goes up may also go down. 

Twenty-six-year old Monica Gupta began working three years ago in a consultancy company. She puts more than half her savings in stocks and mutual funds.

"I have got great returns on my investments. It's so much better than putting money in a bank," Gupta said.

Like Gupta, many young professionals are investing heavily in the stock market. 

Prithvi Haldea heads New Delhi's Prime Database, which tracks trends in the markets. He says many first-time investors have been encouraged by countless stories of people who have doubled or tripled their investments, as the Mumbai stock exchange's Sensex index soared from four thousand points in 2003 to more than 15 thousand points this month. 

"The young generation has tasted blood in the sense that they have huge earnings, and whatever investment they have made, they have been able to in a large number of cases, turn them into profits," Haldea said. "The numbers that are growing in terms of investor base, basically it is coming from this young generation." 

Young professionals are not the only ones attracted by the buoyant stock markets. Many others in the expanding middle class have diverted savings to stocks and mutual funds as confidence grows in the future of corporate India. 

As a result, household savings invested in equities and mutual funds have risen to about five per cent compared to just one per cent four years ago. 

Market analysts however point out that this is still low compared to developed economies. They say many people are still hesitant to tie their fortunes to the stock markets as debate rages about the sustainability of their massive rise in recent years. 

Prithvi Haldea is among those who believe that share prices have risen too high, too fast. He says the economy is on a roll and many companies are doing well but advises caution. 

"Our market is slightly skewed in the sense that we lack both the width as well as the depth," Haldea said. "The number of companies that are listed of good quality, that number is still very small, and the floating stock that is available is very, very small, so any buying interest from large buyers basically shoots up the prices dramatically."

Other market watchers simply point to the statistics - Indian stocks offered an average annual return of 38 per cent in the last five years - and say the risk is worth it.


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## Bushroda

*UTI Bank Raises $1.05 Billion Selling Shares to Institutions* 
BLOOMBERG
By Sumit Sharma

July 22 (Bloomberg) -- UTI Bank Ltd., an Indian lender whose market value has more than doubled in the past year, raised $1.05 billion selling shares to local and overseas institutions, the bank said in a e-mailed statement. 

The bank sold shares at a price of $15.4 apiece. That's at a 1.7 percent discount to the local share price of 649 rupees on the Bombay Stock Exchange on June 20. 

``Banks are the best play on an economy and investors are optimistic on India's growth outlook,'' said Navneet Munot, who helps manage $5 billion at Birla Sun Life Asset Management in Mumbai. ``Also valuations of Indian banks seem more attractive than those of banks from China.'' 

UTI Bank follows ICICI Bank Ltd. and HDFC Bank Ltd. in selling shares to garner more funds to meet growing demand for credit from companies and individuals in an economy that's growing its fastest in six decades. The bank also needs additional funds to bolster capital adequacy as loans grow. 

The Mumbai-based bank approved a plan last week to sell 42.4 million shares to institutions and 31.9 million shares to promoters at a minimum of 575.75 rupees a share. Citigroup Inc. and Goldman Sachs Group Inc. are helping sell the shares. 

Share sales by State Bank of India, the nation's biggest, Central Bank of India and Syndicate Bank among others, could boost funds raised this fiscal year to as much as $10 billion. State Bank of India, which may raise up to $1.5 billion selling shares, has not decided on the timing of the sale. 

UTI Bank's shares rose more than two and a half times over the past 12 months from 252.9 rupees on July 19 2006. The bank traded 0.1 percent lower at 649 rupees on Friday at close on the Bombay Stock Exchange. 

In London, its depositary receipts traded 2.81 percent higher at 15.70 pounds at close on June 20. The bank's GDRs have risen 58 percent since Jan. 1. 

*Overseas Investors* 

UTI Bank, which began operations in 1994, is 27 percent owned by state-controlled mutual fund UTI-I. State-run Life Insurance Corp. owns 10 percent and General Insurance Corp. of India and four other companies have 5.3 percent, according to the bank's Web site. Overseas investors own 40 percent of its shares. Indian funds and public owns about 17 percent. 

The bank sold 14.13 million shares in the London listed global depositary receipts. In addition the bank fixed a price of 620 rupees apiece for shares to be sold to local and overseas institutions, to be listed in India. The bank will raise 17.52 billion rupees ($435 million) with this placement. 

Promoters UTI-1 and Life Insurance Corp. were allotted 25.62 million shares, the statement said. The share price for the founders will be the same as the purchase price for overseas and institutional investors, he said. 

*Funding Growth *

UTI Bank, India's fifth biggest by market value, gave 60 percent more loans to 413 billion rupees in the three months ended June 30. Profit grew 45 percent to 1.75 billion rupees, it said on July 12. 

India requires $475 billion over the next five years for its roads, electricity plants and airports to keep pace with the rate of economic growth, Finance Minister P. Chidambaram said in June. The economy grew an average 8.6 percent in the past four years and the government wants to increase that to 10 percent by 2012. 

Banks in India will need 500 billion rupees of additional funds to bolster capital as lending grows, according to estimates by Banking Secretary Vinod Rai.


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## Bushroda

*Wealth, power shifting to East* 
SHARON MARRIS
Taranaki Daily News, New Zealand
23 July 2007


A man is climbing a steep cliff when he falls. 

Falling hundreds of metres every second, he manages to grab a small branch. Hanging from the branch, the man suddenly finds a new appreciation for religion. He looks up at the clear, blue sky and shouts: "Is anyone there?" There is a booming voice in reply. "It is I. What do you want?" Still holding on to the branch but becoming more desperate by the second, the man shouts back. "What should I do?" The reply is not what he wants to hear: "Jump". The man looks down at the rocks below ... 

The story is being told by American economist Clyde Prestowitz to a gala dinner of about 500 people at the Action Asia Business Summit in Auckland. Outside there is a stall selling the book he has written about his subject: Three Billion New Capitalists: The Great shift of wealth and power to the East. 

Mr Prestowitz is the president of Washington DC's Economic Strategy Institute, a think-tank specialising in international trade policy and how world economies adapt to change. He was formerly counsellor to the secretary of commerce in the Reagan administration, leading trade negotiations with Japan, China, Latin America and Europe. 

Mr Prestowitz got the inspiration for the book from his son, a software worker who was eyeing the snow removal business in the US. His son asked if he would like to be a co-investor, prompting the question: why snow removal? 

"He gave a big sigh and said: `Dad you just don't understand - software can be moved to India but snow can't'." 

So Mr Prestowitz travelled to India for the first time in 25 years and was blown away. 

Indian software companies such as Infosys have massive hi-tech complexes near the IT city of Bangalore which are like stepping into the 22nd century, he says. Back home, Mr Prestowitz, a self-confessed technology illiterate, is struggling with his computer and calls the Intel helpdesk. On the other end of the line is a young man with an Indian accent. When he asks the man his name, he is told it is Sam. "Na, it's not Sam," he says. "What's your name really?" The man's name is Rajiv and he is in New Delhi. 

Mr Prestowitz's points are sprinkled with vignettes such as these, episodes of life showing him that the wealth is shifting to Asia and some of the power is there already. 

"The West has always been the world's biggest economy and the dollar has been the world's currency for as long as we can remember," he says. "We're accustomed to living in a world where most of the rich live in the West just as we've always taken it for granted that the sun will come up." 

According to Mr Prestowitz, Americans will this year spend six per cent or seven per cent more than they earn. 

"I think you're familiar with this phenomenon in New Zealand," he says, meaning the regular scoldings we get from politicians and Reserve Bank Governor Alan Bollard for our high-spending and low-savings rate. "In a low-savings, high-spending economy, you're mortgaging your future and that doesn't sound to me like good policy. 

"Economies such as Japan are saving and producing but many western economies are consuming and borrowing. 

"The purpose of the United States in the world economy has been to consume and we're good at it but I don't believe this can go on." 

For this to continue would mean other countries continuing to lend money to the US and the West, an assumption Mr Prestowitz describes as heroic. For the US trade deficit, which stood at $60.04 billion for May, to be cut in half, the US dollar would face a devaluation of 70 per cent, he says. 

"That's a very different world economy we'd be talking about but of course, it's possible I'm wrong - it has happened once or twice in my life." 

The time is ripe for change. 

"The US accounts for only five per cent of the world's population but for 30 per cent of the world's GDP and there's something unbalanced about that," he says. "It is right and desirable that Asia should have economic production in keeping with its proportion of the world population." 

So should New Zealand be afraid of this change? 

"The thing to be afraid of would be the failure of these two great countries," he says. "It's of tremendous importance to us that they should continue on that ride." 

Mr Prestowitz likes to talk about countries such as Finland, Sweden and Singapore, which have made economic development and technology priorities - placing them above defence. 

"For these countries, economic development is national security," he says. 

Korea decided almost 20 years ago that it was going to become a world player in the telecommunications market. 

The US, Mr Prestowitz says, spent those years fighting over unbundling, using deregulation to promote competition instead of developing infrastructure. The worry for New Zealand is that it is only at the unbundling stage. 

Education, tourism and agriculture are its great strengths, but Mr Prestowitz warns against relying on them. "They are not industries where you get high-productivity gains. It's productivity gains that will determine your standard of living." 

New Zealand and other countries in the West need to think outside the box, Mr Prestowitz says. And on that subject, as for the man still hanging from the branch, he looks up at the sky again with another question. "Is anyone else up there?"


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## Bushroda

*Spatial balance of economic development unclear* 
D. Murali, C. Ramesh 

July 22: The boom in the Indian economy, while distributed across sectors such as IT, auto and manufacturing, is leading to concerns of geographic concentration of economic activity and its consequences for economic development. 

Prof Munisamy Gopinath, who teaches applied econometrics and international trade at Oregon State University, US says that though the country is on a high-growth path, the spatial balance of economic development, particularly the improvement of rural citizens welfare, is less clear at this time. 

Speaking to Business Line on a range of issues, from States competing with each other to attract industry to IT growth resulting in higher real estate costs, he said that the (tax) giveaway competition among States limited in scope, as larger States with well-established industrial and tax base hold a distinct advantage over others. 

But States at the losing end need not be discouraged because there is little systematic evidence that such instruments attract firms. In addition, it is not clear that the costs of these instruments outweigh their benefits. 

He pointed out that the types of jobs created by these instruments and the share of those jobs filled by in-State workers is limited. 

Additionally, inputs required for these companies may be sourced outside of the State, raising questions on the extent of backward/forward linkages generated by these instruments. 

According to Prof Gopinath, if two States are identical in demand patterns, infrastructure and human capital availability, such giveaways would help break a tie. 

Unfortunately, these economic fundamentals exhibit substantial spatial variation, with urban or city centres accounting for the bulk of economic activity. 

Raising the question of why States must go to great lengths to attract an individual firm, he said that other strategies to attract a host of firms are always available. 

For instance, a State Governments investments in infrastructure would help lower business costs and possibly attract more than one firm. Simultaneously, investments in locational amenities (like water availability, air quality and sanitation) would attract educated folks, creating a large, skilled labour pool, which again would be attractive to a host of firms. 

However, he added that there are limits to city size and growth. 

On how States can tackle the problems like rising rentals, higher traffic and worsening air quality, which accompany development, he said that regulations to improve market-based outcomes should be the priority if the prices/rental rates of land are outcomes of well-functioning land, labour and credit markets, which account for current and future growth potentials. 

With regard to externalities like traffic problems and deteriorating air/water quality, the public sector has to play the primary role. 

Suggesting that a combination of tax and other regulatory instruments can effectively address these issues, he said that pollution abatement requires investments from public and private sectors. 

However, the giveaways could come back to limit public policies if State Governments spending heavily relies on corporate taxes. The foregone resources and the limited ability of these Governments to tax new companies would make investments in public goods follow rather than lead economic growth. 

According to him, when markets do not function well and externalities are not alleviated, the benefits of locating in urban centres would be outweighed by costs. 

Deconcentration of urban centres will occur, as has in the case of Seoul. Again, the public sectors role would be to encourage such deconcentration without hurting existing centres and by investing in the development of targeted areas. 

Increasing literacy rates and unwillingness to engage in traditional professions like agriculture are driving large-scale migration from rural to urban centres. 

Informing that in the economic development process, agriculture is expected to release labour for industrial and eventually, service sectors, Prof Gopinath said that the process does not have to occur at the expense of either rural or urban sectors. 

For instance, agricultural productivity increases when transferred in the form of lower food prices could release consumers income to demand manufactured goods and services. 

And the demand-driven increases in industrial capacity and distribution networks could then absorb the labour released by agriculture. 

He added that the food processing and packaging industry could uniquely contribute to the transition process by providing quality jobs right next to rural areas, while helping improve agricultural productivity. 

Migration in response to labour market signals is important in the growth process. However, investments in infrastructure and locational amenities would ensure that citizens do not pay for economic development by compromising the quality of life. 

Globalisation is changing the way economies are structured and business is done; every country faces adjustment problems, there are few exceptions. 

However, the key issue is how to enhance competitiveness and how to help segments that could be adversely affected by global competition, he said. 

It is not clear whether trade and/or commercial policies could slow globalisation, when transport, information and communication costs have rapidly declined in the past two decades. 

In the Indian context, rural areas appear to be facing the greatest difficulty in adjusting to global competition, the reasons being absence or limited availability of safety nets and adjustment tools to tide over uncertainties of the marketplace. 

Without spatially conscious policies, globalisations flip side could be regional imbalances in economic development along with deterioration in the provision and quality of urban public goods. Hopefully, the high-growth environment will generate adequate resources to address these issues through public and private sectors. 

Prof. Gopinath has been with Oregon State University for a decade now. His research areas include trade and economic development with emphasis on agriculture and food industries. He holds a PhD in Applied Economics from the University of Minnesota.


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## Bushroda

*Intel goes 'deep inside' India to tap rural heartland*
The Age, Australia
July 22, 2007

Intel marketing veteran John McClure likes to tell the story of an unschooled Indian farmer who wanted to catch and store rain to water his crops but didn't know how to go about it.

The farmer's daughter figured out a way by researching the subject at an Internet-equipped community centre in their village after school hours and helped him design a "rain-harvesting solution," he says.

That's a simple example of how technology can improve the lives of the 700 million mostly-illiterate people who live in India's vast hinterland, said McClure.

The executive is at the helm of an Intel effort to take computers to the country's 650,000 villages.

"We are focused on getting as deep inside India as possible," the South Asia marketing director said in an interview in the northern Indian desert city of Jaipur.

"It's a frontier we do want to conquer while not missing anything in between," added the 38-year-old.

The world's largest microchipmaker, whose products power eight out of 10 computers sold globally, has tied up with state governments and Infrastructure Leasing and Financial Services (IL&FS) in a programme to spread computer literacy in the countryside.

Intel, which also unveiled a portable personal computer designed for school children Saturday, will provide technology support, educational content and wireless connectivity to 100,000 rural community centres over the next year.

It will also help lay a broadband network across rural India and develop local-language Internet content.

But the rural push is not driven by a sense of charity.

Intel is betting that children in the villages who experience first-hand the benefits of technology will buy a computer when they grow up and take up a job or go into business.

"There's an altruistic element to it but there's also a business element," McClure said. "By investing in these areas -- maybe ahead of the curve -- we will pull more users into the PC purchasing market faster."

India's villages are home to 70 percent of its billion-plus population, yet their contribution to national economic output has declined over the past two decades to as low as 20 percent from more than half.

The countryside is yet to receive its share of the dividend from an investment-, spending- and technology-led economic boom that has produced nine percent growth rates for each of the past three years.

Prime Minister Manmohan Singh's Congress party-led government, which came to power in 2004, is trying to change that by pumping money into rural infrastructure and boosting bank loans.

"To address inclusive growth is incredibly important for the Indian economy to keep growing at a healthy clip," said McClure. "Making technology available in rural areas is a critical element of that."

ICICI Bank, India's largest private bank, is giving computer loans to customers identified by Intel's dealerships while it expands lending in the countryside.

Vijay Chandok, a senior ICICI executive responsible for financing small and medium businesses, said his clients are benefitting from economic growth and depending on technology to boost their prospects.

"The small guy needs technology to make his business easier, faster and more efficient," Chandok said. "Equipment finance is a key proposition here."

India's installed computer base is just 30 million, small for the second-most populous nation in a world where one billion PCs have been sold, said R. Ravichandran, South Asia sales director at Intel.

The market in the year ended March grew to 6.34 million units, up from five million the previous year, and may rise to nine million by 2009, according to industry estimates.

Intel is doing its bit to boost computer sales in India, where it has invested one billion US dollars and hired 3,000 engineers, by promoting computer literacy at schools and catching users early.

It developed the so-called "classmate PC" targeted at schools in the cities in partnership with Indian computer-maker HCL.

"We are helping the country in an area that's extremely important and at the same time, it's a very, very long-term investment for us," said Rahul Bedi, Intel's South Asia corporate affairs director.

"We believe that unless you have social relevance built into business processes, you can't sustain them."


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## Bushroda

*Allow FDI in airline infrastructure: PHDCCI*
22 Jul, 2007, 1300 hrs IST, PTI

NEW DELHI: The new civil aviation policy should allow foreign direct investment for developing airline infrastructure and encourage larger participation of private players, industry chamber PHDCCI has said. 

"As the civil aviation sector is expected to see 25 per cent growth in the next 10 years, civil aviation infrastructure needs faster development through public-private participation mode, to be supplemented by foreign direct investment," PHDCCI President Sanjay Bhatia said in a statement. 

He said the new policy should facilitate entry of new private carriers and promote healthy competition to benefit the national economy and air passengers. 

More funds from private sector and FDI were needed as airport development in the country has not kept pace with the growth of the economy and passenger and cargo traffic, the statement said. 

"The airport infrastructure was developed expecting a growth of 16 per cent in air transport traffic per annum but the actual growth during the last three years has been in the range of 24-28 per cent," it said. 

The chamber has sought that the policy should provide a long-term vision beyond 2020. According to the government, the number of aircraft on scheduled operations would increase to 1,000 from current 321 and air passengers would go up to 280 million by 2020 from 95 million at present. 

Liberalisation of rules and regulations governing the civil aviation, without compromising on safety and security, and reduction in aviation turbine fuel (ATF) prices and taxation of ATF and lease rentals are also important, it added.


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## Bushroda

*Civil aviation sector to attract USD 110bn investment by 2020* 

New Delhi, July 22: The civil aviation sector in the country is likely to attract an investment of USD 110 billion by 2020 for purchasing new aircraft and building airport infrastructure. 

''Out of the total investment, 80 billion dollars would be required for the purchase of new aircraft and 30 billion dollars for building up airports' infrastructure,'' Joint Secretary to the Ministry of Civil Aviation R K Singh said in a seminar. 

In a bid to promote Foreign Direct Investment (FDI) in the civil aviation industry, it is proposed to further liberalise the FDI policy particularly in areas of charters, cargo, maintenance and repair operations, flying training and ground handling, he added. 

''With the steady induction of new aircrafts, India has the potential to become a regional maintenance hub. Companies like Boeing and Airbus have already committed an investment of 100 million dollars each for this purpose,'' he said. 

If India's current economic growth rates were sustained, it would become a trillion-dollar economy by 2009 and also emerge as the world's third largest economy by 2025. 

According to industry chamber PHDCCI, the new civil aviation policy that is expected to be announced sometime in 2007 should provide a longer term vision, beyond 2020 for the development of civil aviation infrastructure.


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## Bushroda

*Franklin Templeton Investments launches Franklin India high growth companies offshore fund*
Arabian News, UAE
21 July 2007

Franklin Templeton Investments, a global investment management company, has launched a new open-end diversified equity fund called Franklin India High Growth Companies Offshore Fund ("FIHGCF"). The fund, which is now available for investors in the Middle East, seeks to provide capital appreciation through investments in Indian companies/sectors with high growth rates. The New Fund Offer period is from July 15, 2007 to July 25, 2007 during which, units will be available at US$10 per unit (plus applicable load). Ongoing sales will commence on July 30, 2007.

On the rationale for launching the new fund, Mr. Harshendu Bindal, Senior Director, Franklin Templeton Investment Management Limited said, "The changing investment landscape in India along with a growing recognition of the long-term potential has led to increased interest for equities amongst investors. At the same time, a large number of investors are looking for an equity product that focuses on achieving capital appreciation through fast growing Indian companies. To cater to this need, we are now launching Franklin India High Growth Companies Fund. It will adopt a growth style of investing unlike other Franklin equity funds, which follow a blended investment style."

Elaborating further, he said, "In a rapidly growing economy like India, a growth style has performed better and is likely to sustain this performance (albeit with higher volatility) if the economy continues to grow at a rapid pace. Overall, this fund will help us in broad basing our equity product offerings and cater to the growing segment of equity investors looking for a high growth equity offering in their portfolio."

Speaking about the fund's strategy, Mr. Sivasubramanian K.N., Senior Portfolio Manager, said, "The economic and corporate fundamentals continue to be strong and India is projected to become one of the largest economies in the world. Given that Indian companies (enjoying various competitive advantages) are growing at a rapid pace and have the potential to grow at above-average rates in the years to come, FIHGCF's growth-focussed strategy of investing in such stocks will help investors capture the growth potential of corporate India in a comprehensive manner."

He added, "The fund's focus will be on companies offering the best trade-off between growth, risk and valuation. We will be looking for sustainable competitive advantages - proprietary intellectual property, strong management, distribution/cost advantages, or entry barriers specific to the respective sector. The fund will be managed based on a mix of top-down (macro analysis to identify sectors) and bottom-up approach (micro analysis to pick stocks within these sectors)."


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## Bushroda

*Indian real estate developer looks to build ties with Quincy*
Sunday, July 22, 2007
By Deborah Gertz Husar 
Herald-Whig Staff Writer 

Indian real estate developer Unnikrishnan Nambisan knows there's plenty of ways to seal a business deal, but building relationships is the key. 

"The most important is friendship," said the man known to his friends as Unni. 

Nambisan, chairman of UKN Properties in Bangalore, stopped in Quincy last week to visit friends Jim and Mary Benz and start building potential business relationships in the Gem City, which impressed him with its warmth and wealth of educational and business opportunities for people in his native land. 

"We have to market Quincy," Nambisan said. "I will start doing it. People will start inquiring about Quincy." 

Nambisan made some inquiries of his own in meetings with Mayor John Spring and Charles Bell with the Great River Economic Development Foundation. He's already talking about a return trip to Quincy. 

"Next time I probably will come with some business proposals for Quincy," Nambisan said in the midst of what was mostly a pleasure trip to the United States that's taken him to both coasts. "We would like to have some sister city relationship with one of our cities, Mysore, and some business also." 

The conversation with Spring touched on everything from hydroenergy and the port authority to the large number of nursing schools in Bangalore and people there looking to further their education in the United States. 

"They have a great deal of young people who go into nursing in India. Many would love to come to the U.S. to practice or obtain additional degrees, but they're limited," Spring said. "One of the things that has to be figured out is how we can allow people like that who have the education, have the background, to come to the U.S. to help us with the shortages we have. Nursing is certainly one of them, and the pinch is felt here in our community." 

Spring expects this first meeting to lead to further discussions. 

"This could lead to a business opportunity, a business exchange, maybe an educational exchange, a social exchange," he said. "I don't know if it will lead to a sister city relationship or anything along those lines  that would require a little more discussion  but I do think anytime you are open to working with people from foreign lands, it affords great opportunities." 

Ties between Mysore, a city of 350,000 about 100 miles from Bangalore, and Quincy "would be very fruitful," Benz said, and it's close enough to have many of same attributes as Bangalore, known as the Silicon Valley of India. 

Building connections with international communities "really has very little to do with the size of your community," Spring said. "It's more to do with your openness to this globalization and having experts in various fields to assist and aid us in making our community advantageous for the economy of the world." 

About 30 Quincy companies already are involved in international trade, Bell said, and he talks with someone from another country or discusses something tied to international trade about once a week. Bell expects those contacts to increase with the development of the port authority and the biodiesel plant in the south Quincy bottoms. 

"Transportation is becoming more important. Businesses internationally are placing more importance on economical transportation, especially as fuel prices increase. We're centrally located in the U.S., and we have some very strong logistical advantages people are just becoming aware of, some from marketing efforts we have done," said Bell, a business consultant with GREDF and manager of the entrepreneurship center. 

Bell and Nambisan talked about the way the city works with economic development and available incentives for retail, commercial, industrial and residential development. 

"We didn't talk about any specific projects. He does seem to have an interest in the Quincy area and seems to like it very much," Bell said. "It appears they have a lot of experience and would have the abilities to develop things well here." 

Nambisan also has some familiarity with the area thanks to his sister Sobha Velloday, who lives in Springfield and worked as an engineer with the Illinois Department of Transportation for 30 years. 

"They have a pretty good knowledge, both he and his sister, of Quincy and downstate Illinois. It was a little different than someone coming from a foreign country that had no previous connections here," Bell said. 

Benz, who visited Nambisan in December and January, hopes to build more connections during Nambisan's next visit to Quincy. 

"I'm dragging him here, dragging him there. You've got to meet this person, you've got to go here," Benz said. "We really should have an avenue to get some young people in India here. Some people from here should go to India." 

Building face-to-face relationships spurs business for Nambisan, from drawing friends to his developments in Bangalore to gaining leads on available properties. 

Years ago, for example, Nambisan bought a lot of acreage from farmers near Bangalore and urged them to use the proceeds to buy more land farther away on the city's outskirts. 

"So now what has happened is they're farming, but their land price has gone up very high. They have not lost anything, and they always think about me," he said.


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## Bushroda

*Renewable energy can ease power shortage *

** Solar heaters to be compulsory in new buildings
* Renewable energy contributes about 10,400 MW*

Bangalore: If the present rate of growth in Indias economy is to be sustained, the supply of electricity has to meet the demand, Vilas Muttemwar, Union Minister of State for New and Renewable Energy, said here on Friday.

Addressing the valedictory session of Solar India 2007 conference and exhibition, organised by the World Institute of Sustainable Energy (WISE), Pune, Mr. Muttemwar said the 9 per cent power shortage in the country could only be bridged through renewable energy.

Renewable energy has made a contribution of 10,400 MW to the national grid. The target set for the 11th Plan period is to achieve 14,000 MW power capacity through renewable energy, he said. 

The Ministry of New and Renewable Energy (MNRE) has proposed Rs. 500 crore to support the renewable energy industry, which included research and development efforts to improve technology. 

The Minister said the country had a vibrant solar industry, where solar water heating had emerged an important and widely used technology, contributing to energy saving in the domestic and commercial sectors. 

This had been made possible by soft loans to individual households and organisations for installing heaters, and through incentives to encourage its use, he said.

*Building bye-laws* 

The Ministry, in association with the Ministry of Urban Development, was trying to get building bylaws amended by local municipalities to make solar water heater installations mandatory in new buildings.


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## Bushroda

*India to set up first space university*
Monster and Critics, UK
Jul 22, 2007, 12:18 GMT 

New Delhi - Seeking to groom experts to help grow the country's satellite and rocket programmes, India will set up its first space university in the southern state of Kerala, reports said Sunday. 

G Madhavan Nair, Chairman of the Indian Space Research Organisation (ISRO), which will set up the Indian Institute of Space Science and Technology (IIST) to meet high technology requirements of ISRO, said the agency had set a 'target' of mid-August. 

Nair told the news agency PTI that ISRO came up with the idea of the institute as it was faced with a 'very alarming situation' in terms of attracting the right talent for India's space programmes. 

'Students will be taught in propulsion, aerodynamics, navigation, guidance, sub-systems, avionics, control systems and so on,' Nair said. 'So, that way, as soon as they come out of the Institute, they will be usable by us.' 

IIST will initially operate from the campus of the Vikram Sarabhai Space Centre at Thiruvananthapuram, a lead centre of ISRO, and venue for launches. ISRO will later create full-fledged infrastructure for IIST on a site near the Kerala capital in about two years. 

For its first batch the institute has already had a good response. Around 150 students are expected to be enrolled in aeronautical and avionics engineering and integrated MSc (Master of Science) in space sciences in the first academic year. 

'For the starting batch there are a large number of applicants from (Indian Institute of Technology) IITs,' said Nair. 

Many students coming out of India's premier technology institutes like IIT and Indian Institute of Science (IISc) are choosing management or information technology studies, or go abroad for work - thus are not available to the Indian scientific community. 

The Bangalore-based ISRO gets more than 70,000 applications annually from students of other institutions. But after the final selection process, only about 200 make the grade, whereas ISRO requires more than 300 scientists for its various space programmes. 

Nair said this 'difficult process' actually becomes a real hunt for talent at the country-wide level. 

'So we thought we need to plan something unique, catch the students at a young age,' said Nair. 

India, on June 21, inducted the Indo-Russian supersonic BrahMos missile into its defence forces. It has also developed, indigenously, all-terrain, short- and long-range ballistic missiles. 

ISRO manufactures and launches Indian satellites. Through its commercial arm Antrix Corporation, ISRO undertakes commercial satellite launches for other countries as well. 

ISRO plans to send an unmanned mission to the moon in 2008.


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## Bushroda

*India to gain $8 bn on forex reserves* 
Press Trust Of India / New Delhi July 23, 2007 

Due to hardening global interest rates, India is likely to gain $7-8 billion this year on surplus foreign exchange reserves invested by the Reserve Bank in central banks of other countries and the International Monetary Fund (IMF). 

During the year 2005-06 (July-June), the return on foreign currency assets and gold, after accounting for depreciation, increased to 3.9 per cent from 3.1 per cent during 2004-05, mainly because of hardening of global short- term interest rate, said a report on foreign exchange by the Reserve Bank of India (RBI). 

The return of foreign exchange invested abroad by the RBI, on behalf of the Union government, fetched around $6 billion between July 2005 and June 2006 as interest. 

Interest rate earnings on foreign exchange reserves was merely 2.1 per cent in 2003-04 and 3.1 per cent a year later. 

Analysts said with foreign direct investment expected to cross $20 billion this financial year and rising flow of funds through NRI remittances and Foreign Institutional Investors, India will soon be among the top league of countries with largest foreign exchange reserves. Foreign exchange reserves is already touching $219 billion. 

Earlier, the finance ministry had asked the RBI to lend $5 billion for investment in the infrastructure sector for capital imports.


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## Bushroda

*No cap on private sector salaries: FM* 

Mumbai, July 22: Setting at rest speculation that the government may put a cap on salaries for India Inc, Union Finance Minister P Chidambaram has said there cannot be any legislation on pay packets nor was it desirable. 

"The government does not legislate on salaries and the government ought not," he said here replying to a question raised by a Mumbai University research student on whether low remuneration was acting as a disincentive to attract researchers. 

Government salaries were no doubt poor as compared to market salaries. In fact, government salaries nowhere in the world match private sector except in Singapore, Chidambaram said during an interactive session with students yesterday. 

"I do not think there is any comparison between government salary and salary of the private sector. In fact, to come into the research field it calls for certain attitude. Are you inclined towards academics and research?" he asked. 

"Nobel laureate and renowned physicist Sir C V Raman could not have been a great scientist if he had thought he should be paid like IT icons Narayana Murthy and Azim Premji." 

"Having said that, I agree that compensation for teachers, professors and researchers should be considerably enhanced. When late Rajiv Gandhi was the prime minister, it was recognised through the UGC that the salary of a professor should be equal to a government secretary and I believe today the professor's salary is equal to the secretary," he noted. 

"I also agree that you need better laboratories, libraries and access to Internet (for quality research)," the Finance Minister observed. 

Chidambaram told the research community: "If you say government should compensate academia (researchers/teachers) as the private sector does for fund or money manager, that simply would not happen as the risks there (in private sector) are much larger, therefore rewards are also much more. Here (research and teaching) risks are lesser and rewards are also lesser, but you get respect, certain position." 

"What I suggest that since government has allocated Rs 100 crore each to Punjab Agricultural University and Universities of Mumbai, Chennai and Kolkata, a part of it could be set aside for fellowship and scholarship and endowment chair to attract world-class researchers where high compensation can be given," he noted. 

Referring to infrastructure woes, Chidambaram said India needs well-conceived, well-designed projects as the problem was not lack of financial resources. "Money is not a problem for infrastructure in India, but we must focus our attention to designing sound projects." 

On whether India should adopt Chinese model for infrastructure development, he said they used banking system to finance their projects, but did not pay attention to asset quality or credit appraisal, and banks were perhaps squeezed. 

"We cannot use that model as we cannot compromise the integrity and stability of our financial system in order to build infrastructure." 

"The problem is not money," he added. "If that was the problem, squeezing the banks was one of the answers. Then we can accept or reject it. But money is not the problem." 

"The problem in India arises India when designing an infrastructure project, we shelve it as we cannot implement it within stipulated time. Besides, the quality of infrastructure agencies is extremely poor," Chidambaram noted. 

"We must have sound infrastructure projects, find the right agencies who will do the work without time or cost overrun and maintain high standard of quality." 

"We have enough money and we have funding schemes. If viable private-public partnership models are made, money can be provided," the FM said. 

"Like for Mumbai city, we have given Rs 1,200 crore grant as an exception under the Jawaharlal Nehru National Urban Renewal Mission for making good drainage system. Five years from now, one has to see how the fund has been used properly," Chidambaram noted.


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## Bushroda

*GE Money aims at $8 bn assets in India by 2010*
22 Jul, 2007, 1110 hrs IST, PTI

NEW DELHI: Aspiring to quadruple its assets in consumer finance business to $8 billion on the back of a booming retail and mortgage market, GE Money India today said it would become the country's numero uno non-banking finance company by 2010. 

GE Money India, a unit of the world's biggest diversified conglomerate GE, could receive fresh fund infusion of close to one billion dollars from its parent to achieve the target. 

"From the point of non-banking finance company, our target is to be number one or two," GE Money (India region) President and CEO Vishal Pandit said. 

The asset size of the company's consumer finance business is worth about $2 billion, which is expected to grow four-fold by 2010, he said. 

GE Money worldwide has identified India as the "imagination breakthrough country" -- the country with the highest potential for growth. 

The Indian market, Pandit said, was on par with Eastern Europe in terms of potential for growth. 

"Achieving this target would mean expanding our branch network from 162 now to about 500-600," Pandit said. 

Asked about the funding requirement, he declined to quote any specific numbers, but said the ratio of equity infusion would be one-ninth of the asset value - which works out to a little less than a billion dollar. 

Moving ahead, the company would exit the consumer durables finance through mom and pop stores while broadening the reach to high growth and high profitability areas of personal loans, cars, mortgages and private label credit cards programme. 

"In India, we have 13 years of experience with proven capability of working with 5,000 retailers. We need to be in the areas of high growth and high profitability, which are personal loan, cars and mortgages," Pandit said. 

But consumer durables is not a profitable business any more as recovery from the manufacturer takes about five months, he added. 

He said the decision to exit consumer durables finance was taken as servicing the 5,000 retailers was becoming unviable due to lesser margins and increasing defaults, and also a changing pattern in consumer buying habits. 

"These days, consumers are not going for loans for purchase of white goods, as they swipe credit cards which gets converted into loans." 

The company, which started as a business-to-business service and branched out to the business-to-consumer space, will simultaneously pursue the two streams to propel growth.


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## Bushroda

*PFC's $1bn fund to rope in global majors*
22 Jul, 2007, 0406 hrs IST,Ishani Duttagupta & Shantanu Nandan Sharma, TNN

NEW DELHI: Power Finance Corporations (PFC) PE fund, which is targeted at last mile energy requirements of power projects in India, is expected to bring into its fold large cross-border funds such as Cornell Capital Partners, Babson Capital Management, Sun Life Financial, AllianceBernstein and Cigna. 

Sources said US Power Production had helped set up meetings between the PFC top brass and representatives of various investment companies in Houston and New York City earlier this month. PFC will thus become the first PSU to launch a PE fund in the country. 

Confirming that the fund is being set up, PFC chairman VK Garg told ET that the target was to scale it up to $1 billion eventually. We are targetting $1 billion because of the huge fund requirements of the power sector in India. After all, each ultra mega power project will cost around $4 billion, Mr Garg said. 

He also confirmed that PFC has been in talks with several players overseas, and the final names of the partners for the fund are likely to be announced soon. We are talking to several players to make the fund really big, Mr Garg said. While PFC is likely to hold a minority stake in the fund, it will remain the largest investor, sources said. 

To begin with, the fund will have a corpus of around $300-500 million, said a source. We are finalising the financial model of the fund, Mr Garg added. The interest in picking up a stake in the fund is very high among NRI groups and large investors in the US and UK, the source said. 

The exit route from the PE fund will be through sale of security in the market or to third parties. PFC will leverage the expertise of its technical staff to carry out due diligence of the power projects, the source added.


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## Bushroda

*Saks planning New Delhi store and major Middle East expansion* 
Business Intelligence, Middle East 
Trevor Lloyd-Jones 
Published: 22 July 2007 

INTERNATIONAL. From its original stores in Riyadh and Dubai, Saks Fifth Avenue is pressing ahead with a major expansion that will see the opening of three new regional outlets in the next two years, with another to follow in India shortly after.

General Manager of the regional licensee Style Avenue Middle East (SAME), Rusi Motiwalla, said that the Dubai Saks store has continued to perform very well and is seeing 30% growth in 2007, with performance above plan for the third consecutive year. This has encouraged the New York parent company to expand further in the region with the strong partnership that has evolved.

Additionally some of the shareholders in Style Avenue Middle East have India plans for Saks being confirmed. "I am travelling to India constantly and it is a market of great interest," said Motiwalla in an interview for BI-ME. 

SAME is the master licensee for the Gulf countries other than Saudi Arabia, where Kingdom Holding is operating Saks in Riyadh.

"We studied a 37,000 square feet unit in Emporium Mall in New Delhi, but it was not possible to make the assortment work in that kind of space. Instead the plan is for a 100,000 square feet unit in the Mall of India, where we have confirmed our interest. Subject to certain conditions and adjacencies, this will be the first Saks in India," said Motiwalla.

He predicts that new Delhi rather than Mumbai will be the centre for most luxury brands entering India, because of the availability of more suitable malls and higher purchasing power.

Saks has recently expanded its original 80,000 square feet (7,435 square metres) of sales space in Dubai with 8,000 square feet (744 square metres) of corporate office space that was relocated out to the new BurJuman office tower. 

Another 55,000 square feet of space for Saks in the Bahrain City Centre is due to open in September 2008. The operating company is on the short list for one or two big malls in New Delhi and Doha, Qatar, and it is looking at options in Kuwait. 

"New York has been very pleasantly surprised and now with the hype of Dubai starting to generate news in the US, the interest in our operation is growing and reaching a wider audience," said Motiwalla.

He added that the next opening for the group will be the 16,000 square feet Saks for Men store in Jumeirah Beach Residence by the end of this year. "We have expanded the mens business four times over and the demand has been very great. We have the best mens advanced selection in Dubai and this is really strong and cutting edge here," he said.

This Bahrain City Centre store has a designated 55,000 square feet with a large kids department, partially to cater to visiting Saudis. "We have decided that anything less than 50,000 square feet makes it very difficult to execute [the Saks concept] and being in the City Centre it is a very good location. As a luxury market Bahrain is currently underserved," said Motiwalla.

Saks is also looking at Abu Dhabi for another store, which will be more accessory driven and with higher price points and luxury brands.

Read also the full text of the interview with Rusi Motiwalla on the Middle East and Indian luxury retail markets, featured in The BI-ME Interview section.


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## Bushroda

*A Greener India*
By Joshua S. Hill
Canada Free Press, Canada
Sunday, July 22, 2007 

Expected to be finished construction in 2010, and set in the exquisitely named Queens Necklace of the South Mumbai Coast, India, the India Towers will mark a new type of ecological friendly development for the ever expanding Asian country. 

Standing at 60 stories  301 meters  tall, the world-class hotel, retail, and residential tower will be one of the greenest skyscrapers throughout all of India. The tower looks as if someone has half twisted a Rubik cube, and left it half done. This circulation design allows for separation of retail, residential style Park Hyatt hotel, serviced apartments, and long-lease & duplex penthouse condominium apartments. 

The design was impacted by the climate, the construction site which sits at 3 acres (1.2 hectares) and the desire to create distinctive indoor and outdoor spaces with optimum views, inspirational settings, and personalized contemporary accommodations for all users. 

Some of the green features of this skyscraper are solar shading and natural ventilation rather than compressed air conditioning. Lighting will be produced using a process known as daylighting; essentially, allowing daylight to filter in throughout the entirety of the building using strategically positioned windows and reflective surfaces. In addition, water for the building will be, at least in part, harvested from rain water. 

This new development, which has recently begun construction, is just the next in a long line of greener skyscrapers popping up all across the world. The Urbancactus in Rotterdam which places each apartment out with the sun allowing for a greater chance for plants to grow, the CIS Tower in Manchester England which will be able to provide 10% of its own power thanks to over 7,000 solar panels, and the Bahrain World Trade Center Towers, being built in the Kingdom of Bahrain which will be topped with 3 96-foot propellers providing the tower with 1100 megawatts of power per year are three of the greenest towers in construction at the moment. All are making strides towards increasing the amount of dependency they take off the environment, and diminishing the impact they are making around them. 

If youre looking to find out more about such green skyscrapers, then check out the Skyscraper Museum either online, or in person in NYC.


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## Bushroda

*Indian Railways plans to become world No. 1*
22 Jul, 2007, 0519 hrs IST, TNN

NEW DELHI: Indian Railways is drawing up an ambitious Rs 1 lakh crore-modernisation plan spread over the next five years to become the No. 1 railways in the world. 

Addressing the National Conference on Rail Technology in New Delhi, a prelude to the first ever dedicated exhibition on railways in India, Union minister of state for railways R Velu said that the amount will be spent on modernisation of railway signalling, track and rolling stock so that modern services could be provided to passengers and freight customers at low prices by bringing down the unit cost. 

IR, which gained a cash surplus of more than Rs 13,000 crore in a short span of 30 months, is expecting a quantum leap in the figure at around Rs 20,000 crore by the end of this year. It is also expecting to achieve a fund balance of Rs 16,000 crore and an operating ratio of less than 80% without privatisation, retrenchment and raising of passenger fares. 

Mr Velu said that while constructing freight corridors, not only new lines will be constructed but a new technology, new work culture and new perceptions will be brought in. 

This modern corridor would be appropriate for 25-30 tonnes axle load, longer double stack container trains. 

Once these corridors are constructed, goods trains will run at two to three times their present speed and passenger trains will also run at double the present speed.


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## Bushroda

*Opportunity for Bahrain to tap India's economic rise* 
Bahrain Tribune - 18/07/2007

(MENAFN - Bahrain Tribune) Bahrain expressed interest to forge bilateral trade ties with India witnessing a heady pace of economic growth, even if the much-awaited GCC-India foreign-trade agreement did not fructify, Indian Ambassador in Bahrain Balkrishna Shetty said yesterday. Bahrain, the financial and business gateway to the GCC region and North Africa, could tap the great Indian economic rise and become its hub for the entire Middle East, just like Singapore was the nucleus of the Indian presence in Southeast Asia.

India was on a roll, surpassing all business forecasts and throwing open a world of investment opportunities. "Bahrain should take advantage of its FTA with the US and attract Indian companies which would grab the opportunity to leverage on Bahrain-US close ties.

Bahrain can enjoy significant productivity gains, a direct result of the global export of manufactured goods and services from India, courtesy its strategic location," Ambassador Shetty said. He was talking on 'Trade opportunities between India and Bahrain', organised by the Rotary Club of Adliya.

Leveraging Indian expertise and improved relations between the nations, he predicted the launch of several joint-venture vehicles between Bahraini and Indian companies in coming years. India's rich information-technology and financial-consultancy services, tourism, healthcare and vast human-resource pool were areas where Bahrain could make big gains besides education, infrastructure and portfolio investment.

Bilateral trade volume between India and Bahrain last year was $532.08 million compared to $343.59 million five years ago. India's oil imports from Bahrain were valued at $237.58 million and non-oil imports $158.67 million in 2006, all amounting to $396.25 million. India stood third in Bahrain's non-oil exports list after Saudi Arabia and the USA.

It exported $135.83 million worth of goods to Bahrain the same year, predominantly in textiles, fruits and vegetables, engineering, iron and steel sectors. 

As a result of new opportunities, capital inflows were rising along with foreign direct investment and portfolio investments. By last May, the capitalisation of the Indian stock exchange breached the $1 trillion mark, catapulting it into the big league. 

Investments are projected to reach an all-time high by 2012 in power generation ($143 billion), transmission and distribution ($116 billion), roads ($40 billion), coal ($26 billion), ports ($20 billion), refineries ($22 billion), oil and gas ($100 billion) and railways ($15 billion). "It is a misnomer that India excels only in services sector. Our manufacturing skills have skyrocketed." 
This was reflected in Indian companies winning the coveted Deming prize of the Union of Japanese Scientists and Engineers for six consecutive years from 2001. India's manufacturing output was increasing at an annual pace of 7 per cent.

"Efforts were also on to create a 200 million workforce in 10 years. We managed to convert our biggest liability, human resources, into the biggest asset. Human resources is the driving tool of India's growth, a vision shared by Bahrain also."


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## Bushroda

*Bombardier lands $590M contract to build cars for New Delhi subway*

*Rail backlog $27B U.S., analysts say. 340 units to be assembled in India plants*

ROBERT GIBBENS, 
The Gazette, Canada
Published: Friday, July 20

Bombardier Inc. is deepening its footprint in the burgeoning mass transit markets of Asia with an order worth $590 million U.S. to build 340 subway cars for the New Delhi Metro Rail Corp. in India.

The subway trains will be mostly produced in Bombardier's Indian plants with deliveries from late 2008 through 2010 - in time to beef up public transit for the Commonwealth Games due to start in October 2010 in New Delhi.

Analysts estimated the order brings Bombardier Transportation's net backlog of rail equipment orders to well over $27 billion U.S. The transportation unit's orderbook is normally larger than aerospace's.

The contract was announced just after the Metronet consortium rebuilding two-thirds of London's Underground (subway) ran out of cash and went into creditor protection.

Bombardier denied reports its $6-billion (U.S.) contract to build subway trains, renovate older equipment and provide long-term maintenance, is in danger. It said Metronet's new administration has said all existing contracts will be honoured.

The New Delhi Metro's network is being expanded by a 60 kilometres, covering its north-south and east-west lines. The city has a population of 16 million.

"We've been operating in India for 35 years and we want this contract to set the standard for other mass transit projects we're pursuing in New Delhi, Mumbai, Hyderabad, Bangalore, Kochi, Chandigarh and through India," AndrE Navarri, president of Bombardier Transportation, said in a statement.

The stainless steel car bodies, bogies and propulsion systems for the first units will be made in Bombardier plants in Germany and Sweden with final assembly in India. Later, the Indian plants will take over almost full production. Bombardier is one of the first private companies chosen to build rail vehicles in India.

The 340 cars will form four-car trains with a capacity of 1,480 passengers each. Design is being done by Bombardier's engineering centre in Hyderabad, working with its Swedish plant. No details of contract financing were disclosed.

Bombardier says it is the world's leading supplier of subway trains. Its equipment is rolling in New York, Toronto, Paris, London, Berlin, Bucharest, Stockholm and Shanghai, as well as Montreal.

It was the first Western firm to build trains in China and it is a big supplier to Indian Railways.

"China, India and Russia, the world's fastest-growing economies, are opening up to foreigners - and Bombardier, Alstom and Siemens are moving right in," an industry analyst said. "Five years ago, those markets were mostly reserved for state-owned manufacturers. "


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## Bushroda

*India, Japan To Give Final Shape To Delhi-Mumbai Corridor*
Friday 20th of July 2007 

Indian and Japanese officials will meet in Tokyo next week to finalise the financing of the $9 billion Delhi-Mumbai Industrial Corridor Project (DMIC) to be jointly built by both governments, a senior official said.

'Both the countries would have a joint task force meeting in the coming Monday and Tuesday in Tokyo to finalise the project development fund that would finance the DMIC,' Ajay Dua, secretary, Department of Industrial Policy and Promotion (DIPP), told reporters here on the sidelines of an event.

Dua also indicated that the fund would be launched next month during the visit of the Japanese Prime Minister Shinzo Abe. 

During the visit to Japan, the Indian officials are also expected to meet representatives from the Tokyo Stock Exchange and other financial institutions to explore various options of funding the project. 

The DMIC entails development of infrastructure along the 1,483-km dedicated freight corridor linking India's two metros that includes building of airports, setting up of several agro-processing parks and special economic zones, creating 4,000 MW of power generation facility and constructing two ports in Gujarat and Maharashtra.


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## Bushroda

*Intel's technology helps Indian SMEs save costs* 
www.chinaview.cn 
2007-07-22 20:58:29 

NEW DELHI, July 22 (Xinhua) -- Intel Corp launched a new processor technology to help India's small- and medium-sized enterprises (SMEs) to reduce their operational costs, Indo-Asian News Service reported on Sunday. 

The company's Indian subsidiary has developed a new processor -vPRO - and an upgraded version of Centrino pro-processor for managing the services of SMEs. 

"Info tech firms such as Wipro, 3i and Zenith are building application and services on the vPRO platform to help small and medium enterprises (SMEs) reduce operational costs and consume less power," Intel South Asia Director Narendra Bhandari said at a conference here. 

"The new processors will transform the business client platform and manage the IT infrastructure remotely," he said.


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## Bushroda

*Healthcare requires over $200 bn investment*
IANS 
Sunday, July 22, 2007 15:53 IST

NEW DELHI: Access to quality healthcare in India is gradually diminishing, and to solve the crisis the sector would need an investment of about $202.75 billion over the next five years, says an industry body.

India's healthcare situation requires a much faster growth rate as it would require about 2.2 million beds and the investment needed for that is almost $77.9 billion, the Federation of Indian Chambers of Commerce and Industry (FICCI) said in a presentation to the government.

FICCI has suggested a five-pronged PPP (public-private-partnership) model to bridge this huge deficit.

"Unfortunately, at present there is a lack of regulatory framework and the sector attracts sub-standard private healthcare providers and quacks, there is slow implementation of the accreditation process that impacts the quality of healthcare, penetration of health insurance to larger population, shortage of adequately trained healthcare professionals leading to poor quality of service delivery," FICCI said.

"Absence of infrastructure status and appropriate incentives restricts private sector entry into rural and semi-urban areas."

The study also shows that even though 72.2 percent of India's population lives in the rural areas, 80 percent of doctors, 75 percent dispensaries and 60 percent of hospitals are in the urban areas, making it nearly impossible for the rural people, especially poor, to avail themselves of quality healthcare services.

The chamber has suggested attracting private investment in the sector, including foreign direct investment following the PPP route and expanding medical education and training, thereby promoting India as a global hub for quality and affordable healthcare services.

It has also urged that the sector be granted industrial status, making provision for soft loans from public sector banks and reducing customs duty on medical equipments.

To promote India as a healthcare hub, FICCI has suggested bilateral initiatives like a Joint Economic Trade Committee (JETCO) between Britain and India, business-to-business facilitation for British and Indian companies for medical equipment and mutual recognition of medical degrees among others.


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## Bushroda

*Railway station modernisation plans may be delayed* 
Mamuni Das 

*The Railways has pointed out that passenger access to railway stations is much easier than airports and that two work on different parameters. *

New Delhi March 14 Indian Railways' plans to modernise its stations may be delayed with the Planning Commission asking Railways to change the manner in which it has been pursuing the issue. 

The Railways had decided that it would define the detailed design parameters for passenger facilities with the help of renowned consultants and then invite developers to build the station as per the design. However, *the Planning Commission now wants Railways to define broad parameters only and let developers design the stations, as was followed in the airport modernisation plan. *

*Railways' case* 

The Railways has pointed out that passenger access to railway stations is much easier than airports and that two work on different parameters. In this backdrop, developers are more likely to give less priority to creating passenger facilities, curbing revenue generation for the station developer and operator, it says. 

Moreover, the Railways says that its method has been adopted in the modernisation plan of several stations worldwide, including London's Victoria station, the Dubai Metro, China's Shenzhen, Melbourne's Southern Cross, Berlin's Central station, Paris' St Lazare, Milan's Central Railway Station and Turin's Central Railway station in Italy. 

*Service portfolio* 

Since the Railways had decided that it would invite engineering consulting firms to advise it on preparing a detailed design report including that of passenger operational area, it has already short-listed world-class consultants for the New Delhi Railway station after a technical qualification round. 

It has recently technically qualified about seven firms for providing advisory services that include the Italy-based Grandi Stazioni SpA Via, Chinese firm East China Architecture and Design Institute (ECADI) and the UK headquartered Mott Mac Donald. However, the entire process may now get delayed with the Planning Commission wanting a change in the method. 

*The Railways has identified about 18 stations to convert them into world-class ones. The tentative list includes New Delhi, Chhatrapati Shivaji Station (Mumbai), Howrah, Chennai Central, Amritsar, Ahmedabad, Bangalore, Bhopal, Bhubaneswar, Chandigarh, Lucknow, Mathura, Pune, Patna, Secunderabad and Thiruvananthapuram.* It has sought status reports from the engineering, mechanical and commercial departments in-charge of the stations.


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## Bushroda

*Bright future for white revolution*

Amul's real strength lies in the network of its 2.5 million milk farmers organized through 12,000 cooperative societies in the villages of Gujarat.

Faced with increasing suicides by indebted and desperate farmers in various parts of India, the National Bank for Agriculture and Rural Development (NABARD) has launched an ambitious Rs 10,000 million National Milk Scheme. To provide farmers with sustained income to tide over the difficult times marked by recurring droughts and occasional crop failure.

In fact, the white revolution in India became a reality after farmers' cooperatives were floated by the Anand-based National Dairy Development Board (NDDB) in 1960s. Thanks to the vision and endeavours of V Kurien, who as the head of the NDDB gave an impetus to the dairy revolution in the country, that was instrumental in transforming India into the numero uno milk producer in the world.

Today, NABARD will join hands with NDDB for implementing its milk plan in 326 districts spread across the country. Notwithstanding, the steady increase in milk production in the country, there is still a huge potential for boosting milk production as the per capita milk consumption of milk and dairy products is dismally poor compared to global standards. Moreover, dairy products offer a huge export potential.

Together both NABARD and NDDB will support a range of activities at the field level with a focus on milk production, its handling, processing and marketing of dairy products in all the 326 selected districts of the country. With the demand for milk expected to touch around 172-million tonnes in 2021-22. Plainly, to meet this huge demand, milk production would need to be boosted by 4 per cent per year.

Meanwhile, a feeling is gaining ground that as there is a daily income in milk, wherever the farming community has taken to dairying as a secondary occupation, suicides have not been reported. Clearly, the NABARD sponsored milk scheme supported by NDDB seeks to increase milk productivity and optimize the cost of production by providing institutional credit to support quality breeding of the milch animals.

Today the daily per capita consumption of milk in the country is little over 250-ml as against 106-ml when "Operation Flood" was launched three decades ago. Also, the dairy industry has emerged as a single largest contributor to the Indian economy with as many as 80-million farming households involved in dairy related activities. With 12-million farmers spread over 176 districts of the country actively participating in the dairy cooperative movement initiated by NDDB, the future of the while revolution in India appears bright.

According to the Indian dairy industry analysts, India has the potential to become one of the leading players in the export of milk and milk products as the country has the geographical advantage of being located close to major milk deficient countries in Asia and Africa. Significantly, the major importers of milk and dairy products such as Bangladesh, China, Hong Kong, Singapore, Thailand, Malayasia, Philippines, Japan and UAE are located close to India. Thus, this could help India tap the export potential to these countries.

Further, in a significant development, the Gujarat Cooperative Milk Marketing Federation (GCMMF), based in Anand, is planning to roll out 10,000 Amul parlours across the country over the next three years. Today, Amul products stand out as a by- word for quality dairy products not only in India but in various parts of the world.

"The time has come for us to make direct contact with the consumers and to ensure that we are not exploited or squeezed out in the market by the big players," said a GCMMF spokesman. Adding, "we will open 10,000 parlours by 2010." More than 1,000 such parlours are already operational in various parts of the country.

Described as a billion dollar cooperative, GCMMF is quite bullish about its future prospects. "We have already joined the US$1-billion club and have set a target of US $2.5-billion by 2010" averred the spokesman of GCMMF. Today, Amul products are sold around the world. The USA, S.E. Asia and W. Asia are Amul's major consumers.

Besides, export of various Amul products to markets like West Asia, USA and Europe has increased by 15 per cent over the last two years. The GCMMF is also exploring new, potential markets in the Asia-Pacific region which includes markets like Japan and Australia.

Amul's long term marketing strategy is centred round the premise that the upwardly mobile cash-rich middle class consumers in India are increasingly becoming aware of the importance of health food and dairy products. All said and done, Amul's real strength lies in the network of its 2.5 million milk farmers organized through 12,000 cooperative societies in the villages of Gujarat.

All the 13 district milk cooperatives in Gujarat use Amul as the brand name for the packaged milk and other dairy products. Interestingly, GCMMF first introduced butter in 1956, cheese in 1970, ice cream in 1996 and today boasts of a wide range of milk products including srikhand, curd, flavoured milk and butter milk.

Thus, the Anand-based prime milk cooperative which took off in 1946 with a view to end the exploitation of dairy farmers by the middlemen is today a major force in the Indian dairy industry. Currently, the GCMMF processes around 5-million litres of milk per day. Amul today is not just a brand. But "represents the entrepreneurial spirit of the Indian farmers and the national commitment of self reliance and development of human resources and values based on a sustainable development process" says Verghese Kurien, the architect of the white revolution in India.

Amul is now a leader in baby food, dairy whiteners, cheese and ice cream. It holds more than three-fourth of the market share in butter. In order to stay competitive it has made a massive investment on technology upgradation. By all counts, Amul is hopeful of boosting the milk production in arid areas of Gujarat. Its hopes are based on the greening of Gujarat by the Narmada water in the near future.

Milk production in India is now close to 100-million tones a year. Since mid-1990s, India has retained its position as the biggest milk producer in the world. Driven by the growing disposable income and changing lifestyle, the demand for dairy products in India is on the rise. Sources in GCMMF point out that changing lifestyle characterized by urbanization, dietary habits and impulse buying have heightened the demand for dairy products in most parts of the country.

Higher farmgate prices for raw milk are spurring dairy farmers to increase the milk production through the upgradation of the genetic stock of their milch animals. The creation of a country-wide milk grid through quick transportation and efficient storage, has also given a boost to the milk production in the country.

According to a study by the US Department of Agriculture (USDA), the continuing expansion of the milk processing facilities in the private sector, the need to sustain fluid milk supplies during peak seasons and firm prices could lead to the increased milk yield in the country. In addition, the increased demand for value added dairy products and growing private sector investment in the dairy sector are conspiring to give an impetus to milk production in India.


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## Bushroda

*The Indian connection* 
*PASSING THROUGH: Phil Lawrie* 
Shuchi Bansal / New Delhi July 23, 2007 

Phil Lawrie, AlJazeera Networks global distribution head, cherishes his Indian connection. His grandmother was an Indian married to a Scotsman and his mother was born near Delhi. 

However, the 36-year-old AlJazeera director sheepishly admits that hes visiting the country for the first time. Lawrie is here to negotiate distribution deals with cable operators and direct-to-home platforms to carry AlJazeeras English news channel, once it gets landing rights in India. 

The Arab media network had applied to the information and broadcasting ministry about six months ago to allow its English channel into the country. The channel is still waiting for government approvals. 

Emphasising the importance of India in AlJazeeras scheme of things, Lawrie, who joined the broadcasting network 20 days ago, says: There are two strategic markets that we need to develop: India and the US. That this is my first business trip since I joined AlJazeera underscores the importance of the Indian market for the network. 

India is key because it is an economy of one billion people and is on its way to becoming an economic force to reckon with in the world economy. Besides AlJazeera is the flag-bearer of free speech. And it makes sense for it to be present in the worlds largest democracy, says Lawrie. 

If Lawrie is losing sleep over delayed permissions for landing rights in India, hes clearly not showing it. However, he admits that changing peoples perception about AlJazeera being an Al Qaeda mouthpiece is a huge challenge. 

AlJazeera English already reaches 100 million homes worldwide. It covers the developing world in great depth and counter-balances the Western perspective. It is a fantastic product to sell, says Lawrie, whos worked with CNN for six years. 

Prior to joining Aljazeera and relocating to Doha (Qatar), Lawrie was advising Discovery. However, media was not his first love as hed worked in the financial services sector for the first six years of his career. 

But the self-professed news junkie didnt think twice before moving to Turner Broadcasting System in the UK when CNN offered him a job. He managed the channels distribution for Europe, the Middle East and Africa. 

If Lawries to be believed, the companys pitch to channel distributors in India has evoked an overwhelming response, especially in Kerala and Kolkata. 

Not only are people asking when well go on air, many news channels have approached us requesting sharing of content, he says. Is a co-branding deal with a local player, a la CNN-IBN, also on the cards? It is too early to talk about such partnerships but we have been getting queries, he smiles. 

Funded by the Emir of Qatar, AlJazeera launched an Arabic news and current affairs channel in 1996 and later added a host of other channels such as sports, documentary and a childrens channel to its bouquet. 

The English language channel was launched in November 2006. Though the network makes money from subscriptions and advertising, it is still to turn profitable. Thats the way media businesses are. Profitablity is about five years away, says Lawrie. 

However, once AlJazeera comes to India, Lawrie is planning to exploit new media for business as well. For instance, the opportunity that the 180 million mobile phones in India offer, excites him. 

True, a majority of them would still not be multimedia ready, but as the population of sophisticated handsets grows, the medium could be exploited to generate revenue, he feels.


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## Bushroda

*Strong FII inflow may strengthen rally on the bourses:Experts* 

Mumbai, July 22 (UNI) Experts are of the opinion that the ongoing liquidity driven rally is likely to continue on domestic bourses in the week ahead, since corporate results announced so far have been encouraging, with the only exception of the information technology (IT) sector. 

It may be noted here that key first quaterly (Q1) results, scheduled next week, are Bharti Airtel, ONGC and Maruti Udyog, while Reliance Industries (RIL) will announce their results during the weekend, on Saturday. ONGC unveils Q1 results on Wednesday, while Bharti Airtel and Maruti Udyog will follow suit on Thursday.

The Bombay Stock Exchange (BSE) Sensex gained 292.83 points last week to settle higher at 15,565.55, while the National Stock Exchange (NSE) Nifty advanced by 61.50 points to 4,566.05, as buying momentum continued at higher level fuelled by strong global markets, healthy inflow from foreign funds, easing fears of interest rate hike and anticipation of robust first quaterly (Q1) June 2007 results. 

''The 30-share BSE index has hit 12 all-time highs in 15 sessions so far this month, including one on Friday. Besides good corporate earnings in a fast growing economy, the rise in the value of the rupee against the US dollar has attracted foreign funds in a big way. Foreign Institutional Institutions (FII) inflow in the first half of this month reached a whopping Rs 21,451 crore (till July 19). The large inflows this month are also due to FII subscription to initial public offerings (IPOs) of realty major DLF and ICICI Bank,'' market analysts explained. 

Receding fears of rising interest rates have also aided the surge on the domestic bourses over the past few days. Inflation is hovering at a little above 4 per cent. Inflation has remained below the RBIs targeted level of 5 per cent in recent weeks. It fell to a 14-month low of 4.03 per cent in mid-June, this year. Annual inflation had hit 6.69 per cent on January 27 this year, the highest in more than two years, economists observed. 

''The trend in other Asian markets will continue to have a bearing on domestic bourses this week. Asian markets may open on a subdued note early next week after China raised interest rates on Friday in the latest of a series of tightening steps aimed at keeping inflation in check and preventing the world's fourth-largest economy from overheating,'' a section of analysts cautioned. 

The respective announcement came after trading hours in key Asian markets including the Chinese markets on Friday. The People's Bank of China ordered an increase of 0.27 per cent in commercial banks' benchmark one-year deposit and lending rates. 

''The Prime Ministers Economic Advisory Council on Monday projected India's gross domestic product (GDP) growth at 9 per cent in 2007-08. It has warned that the constraints posed by farm and power sectors may make sustaining this level difficult in the years ahead. In its report, the Council expected inflation to remain close to 4 per cent,'' economists said. 

Ahead of the rate hike by China, the MSCI's measure of Asia Pacific stocks excluding Japan hit a record on July 20 on the back of strong earnings, including South Korean mobile phone maker LG Electronics, market participants said.


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## Bushroda

*India flies to the top league in aviation* 

*An integrated plan to speed up the work on the airports needs to be put in place* 

*The pressure on airports for parking, maintenance, handling and other services will increase manifold.*

Led by Air India, the airlines in India have kept the order books of aircraft manufacturers overflowing for the next three to five years. Even according to the U.S based Boeing, the Indian aviation market needs 856 new planes over the next 15 to 20 years. Air India rewrote history by ordering the largest number of aircraft ever for Boeing  68 new planes at an estimated cost of $11.6 billion. 

Assuming that different airlines  public and private alike  split their orders equally between Americas Boeing and the European Airbus Industrie, each of them can secure orders for about $36 billion at current rates.

Along with the defence and nuclear sectors of the country, which are now offering the best markets in the world today, the aviation sector has now emerged a top flier. But all this puts the pressure squarely on the aviation infrastructure in the country  an issue that Union Civil Aviation Minister Praful Patel highlighted in a recent interview to this newspaper.

Following Air India, Indian Airlines placed an order for 43 Airbus aircraft of different models. With the two national carriers already going through the process of merger on August 1, Air India, the new merged entity, will fly out its first 777 Boeing on its direct flight to New York. The airlines order with Boeing will bring to its fleet a complement of the Dreamliner - 787. 

*Market consolidation* 

Similarly, Kingfisher has booked to become the countrys first airline to acquire the Super jumbo Airbus A 380. Every airline in the country  from Air Deccan and Spice Jet, to Paramount Airways, IndiGo, and Jet Airways  firm orders for supply of new aircraft from one of the two aircraft majors. To meet their current market demand, most airlines have taken aircraft on lease.

At a time when mergers and acquisitions (M&As) have become the market trend even in the aviation sector, Air India and Indian Airlines integrate to become potentially one of the largest airlines in the world. Jet Airways has already acquired Air Sahara, while Kingfisher appears set to not only take a 26 per cent stake in Air Deccan, but also perhaps make it a subsidiary. Airline sources argue that these M&As A help consolidate the market and ensure economy of scales. Considering the fare wars in the market already, each airline wants to trim costs, rationalise operations, and synergise the handling to keep down the overheads to remain competitive.

With such large fleets of aircraft to be added to an already burgeoning aviation scenario, the pressure on airports for parking, maintenance, handling, and other services will increase manifold. The question now is whether the Government, the Civil Aviation Ministry, the Airports Authority of India, the airlines, State governments and the existing airports in the country are preparing for this explosive growth. The kind of maintenance, repair and overhaul (MRO) facilities required by 2020 or so must also be taken into account in this overall plan.

Looking at some of the existing airports can hardly be reassuring. Be it in New Delhi or Mumbai, Bangalore or Chennai, Hyderabad or Thiruvananthapuram, the congestion at the airports and the terminal buildings during peak hours defies an early solution. 

Unless the massive programme to redevelop the New Delhi and Mumbai airports, complete the greenfield airports in Hyderabad and Bangalore, expand and modernise the Kolkata and Chennai airports, besides fast-tracking the modernisation and expansion of 35 non-metro airports is expedited, the confusion is bound to become confounded. Add to this the demand by more and more international airlines to operate more flights to India, and to more centres in the country, the picture becomes even more complex.

*Need for integrated plan* 

Given this pace of growth and the ballooning air traffic  both international and domestic  an integrated plan to speed up the work on the airports and train the requisite manpower required to propel this growth needs to be put in place. A task force of efficient ministers, officials from different agencies involved in this challenge, and airline representatives should be asked to look into all these aspects and ensure that the aviation infrastructure falls into place at least within the next five years  in the XI Plan.


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## Bushroda

*Plan afoot to make entire Delhi Wi-Fi*
23 Jul 2007, 0126 hrs IST,Abantika Ghosh,TNN

NEW DELHI: Taking a cue from cities like Bangalore and Pune, the Delhi government is planning a Wi-Fi future for the city. The city government's information technology department is exploring options to ensure Delhiites have wireless net access on laptops. Bangalore is already Wi-Fi enabled, while Pune and Kolkata are on their way to attaining the status. 

But Delhi may take a march over other Indian cities as the government is looking at the latest WiMax technology which ensures high-speed internet access on the move. 

The IT department will soon issue advertisements seeking expressions of interest from infotech companies. It is currently busy doing homework. This includes a "tentative" plan to make use of the already existing broadband and GPRS networks of mobile service providers to ensure complete wireless connectivity. 

A senior IT department official said, "We are looking at a model that integrates all the existing technologies like GPRS, Wi-Fi and broadband. We are also looking at WiMax, which is the latest in the field. The final decision will be taken on the basis of the economics involved. But right now, our focus in on providing high-speed internet connectivity to all in an unwired way. This will come at a cost. But once the government enters the picture, the cost of internet access for an individual will come down drastically." 

Originally a brand name licensed by the company Wi Fi Alliance to describe the embedded technology of wireless local area networks (WLAN), the common use of the term Wi-Fi has now been broadened to mean generic wireless interface of mobile computing devices like laptops and palmtops. It is a short-range system covering many hundreds of metres. It uses a licensed bandwidth to provide access to a network  typically used by the end-user to access their own network, which may or may not be connected to the net.


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## Bushroda

*India Wrestles Inflation Under Control*
Ruth David, 07.22.07, 11:03 PM ET
FORBES, NY

MUMBAI - Inflation in India for the week ending July 7 remained steady at an annualized rate of 4.27%, the same as the week before, as the prices of some foods fell. However, industrial oils and wheat and maize moved up.

With inflation below the central banks ceiling of 5% for the fiscal year through next March, analysts said it is unlikely to hike interest rates at the next policy meeting on July 31. 

Media reports quoted Finance Minister P. Chidambaram as saying crude and commodity prices would be on a watch list, but there werent immediate plans to tighten monetary policy. 

Tackling inflation has been a key goal of the central bank this year. Inflation hit a high of 6.8% in January, but has receded since, as the Reserve Bank of India tightened lending rates and increased banks cash reserve ratios to suck liquidity out of the system. Inflation dropped to 4.03% last month.

The government also reduced fuel prices and import duties on a host of products to help tame inflation.

Indian agricultural production has been flat for the last few years, while demand has been increasing as incomes rise, pumping up food prices. 

The Reserve Banks battle against inflation has meant letting the rupee appreciate as it tries to mop up liquidity from foreign investment into the rapidly expanding economy. Foreign direct investment was $17.7 billion in fiscal 2007, up from $7.7 billion the previous year. The currency has appreciated close to 10% against the dollar since the beginning of the year to 40.32.

Earlier this week, Credit Suisse analyst Shailesh Jha said the rupee would breach 40 and hit 39 against the dollar by the end of March 2008. The Reserve Bank is in the midst of a regime change in terms of thinking about the rupee, believing now that rupee appreciation is beneficial for tempering inflation and will have a limited impact on overall export growth, Jha said.


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## Bushroda

*Swanky German rail coaches to replace present ones in a big way*
From our ANI Correspondent

Danapur (Bihar), July 22: The days for brick red or blue coaches of the Indian railways are numbered as swanky and state-of-the-art German coaches are being inducted in a big way. 

The German coaches, which first came to India in the year 2000 and were used in the Delhi-Lucknow 'Swarna Shatabdi Express', are now being manufactured at Rail Coach Factory in Kapurthala in Punjab. 

Plans are now afoot to soon induct the coaches, equipped with modern amenities in the Delhi-Patna Rajdhani Express, and 17 coaches have already arrived at a yard in Danapur railway yard.

This happened after the responses about the new coaches were 'encouraging' both from technicians and passengers. Two trains, Delhi-Mumbai and Delhi-Kolkata Rajdhani Express trains were fitted with these new coaches earlier.

The coaches were initially imported, but are now being jointly manufactured under the technology transfer clause of the agreement that Indian Railways signed with German firm ALSTOM-LHB in 1995. 

Apart from looks the coaches have several safety facilities. They are made of fire retardant material and have disc brakes attached for the safety of the passengers.

"The new coaches take care of three parameters - passenger amenity, safety and transport economics. State of art technology has been used in the coaches and has quantum jump," said Animesh Sinha, a senior mechanical engineer posted at Danapur railway station.

The toilets in these coaches match with those in aircrafts having pneumatic control container, which would discharge the waste outside the station only. 

The new coaches are equipped with hot cases and deep freezers, and are provided with four emergency windows and spring-loaded doors. 

India's rail network, the largest in Asia, carries more than 15 million people daily - more than the combined population of Norway and Sweden - but its safety record often comes in for criticism.

According to government estimates, the return on rail investments is nearly three times that of other transportation investments.


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## Bushroda

*Hospital-on-rails to serve rural poor* 
Peninsula, Qatar
7/13/2007 8:57:59

NEW DELHI  A hospital-on-rails that will travel through India's rural hinterland was launched here yesterday, promising to bring free up-to-date medical and even surgical treatment for millions with little access to them. 

The new train replaces the Lifeline Express that had been launched in July 1991 by Impact India Foundation in collaboration with Indian Railways and the Rajiv Gandhi Foundation. 

The coaches were redesigned and restored to be a fully functional, air-conditioned hospital, equipped with all modern diagnostic and medical facilities, including training facilities for up to 50 paramedics. 

Surgeries are conducted during its four-six week stay at a particular location. Each five-week stop costs around Rs 2 million. 

The train is equipped with three operation tables, modern surgical equipment and accessories, kitchen, restrooms, sterilisation equipment, recovery room for the patients, audiometric/ophthalmic room and X-Ray room. 

The project is funded by Impact UK, charitable organisations, Indian corporate houses and individuals. 

According to the Impact India website, the train's services include surgical interventions to restore movement to polio and orthopaedic patients, cataract operations as well as preventive treatment in the form of immunisation, administration of nutrients and creating health awareness among the deprived in rural and semi-urban areas. 

The original Lifeline Express was formed using four used coaches given by the railways. The coaches in the new hospital on wheels were manufactured at the Indian Coach Factory, Perambadur.


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## Bushroda

*Airports to turn into all-in-one aeropolises*
24 Jul, 2007, 0431 hrs IST,Nirbhay Kumar, TNN

NEW DELHI: You may not attend a wedding at an Indian airport anytime soon (in 2005, over 450 marriages were solemnised and officiated at Stockholms Arlanda airport). But you can look forward to spending an eventful day at an airport without going anywhere near an aircraft  maybe a movie, a piping hot meal or some shopping? 

Airports are vying with each other to go beyond flight operations. Call it an aeropolis or aerotropolis  thats the buzzword in Delhi, Mumbai, Hyderabad, Bangalore and Nagpur. With city centres, plush hotels, convention centres and banks, the airport projects in these centres aim to become self-contained cities. 

The airport city theme is gaining ground with greenfield airports at Hyderabad and Bangalore providing enough scope even as the proposed cargo hub at Nagpur plans to include a special economic zone besides logistics facilities and a township. 

Not to be left behind, the joint ventures modernising Delhi and Mumbai airports are also planning to host hotels, retail space and entertainment options. A similar attempt is expected by smaller airports as the government goes in for upgrade of 35 non-metro airports. 

While the government is expected to invest Rs 12,000 crore in modernising airports over the next five years, current estimates indicate private investors and developers would pump in Rs 24,000 crore. 

We want to build everything at the Delhi airport, providing all the civil amenities  from a business centre to shopping complex. So, if a traveller wants to have a meeting and wants to return to his/her destination the same day he/she can do it, said a spokesperson for Delhi International Airport. 

We had invited expressions of interest from property developers and investors for building hotels of various sizes and categories, ranging from economy to luxury. We have got responses from about 50 developers. After shortlisting the potential bidder, we would award the contract within a month for the first phase of the work, he added. 

The Hyderabad and the Mumbai international airports are also scheduled to get luxury hotels, convention centres and speciality restaurants by 2010. The Accor Group, for example, is planning a 309-room business hotel at the Hyderabad airport. 

Revenue earned from non-aeronautical activities at some of the airports such as Singapore and Hong Kong are significant. In some cases, they are higher than traditional aeronautical income. Many more new facilities, such as hospitals, speciality retail outlets, are planned, said an industry expert. 

Many new facilities not directly related to air travel can now be seen at airports, added an airport source. Non-aeronautical revenue as compared to aero is currently 25-35% of the total revenue. But in the years to come, it would increase to 50%, if not more, KPMG executive director Rajeev B Batra said.


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## Bushroda

*Indian farmer seeks to be monsoon proof* 
Gulfnews
By Chinmay Chaudhuri, Staff Reporter
Published: July 24, 2007, 00:06

The Indian farmer awaits the advent of the monsoon clouds every year with the eagerness of a would-be father. Every drop of rain rings the bell of prosperity in his ears and he starts counting his fortunes. He is forced to look up to the skies for divine blessings because the ground realities are the negatives he has to fight to earn his meagre living.

But this year the monsoon has been very unkind and has added much to the woes of the hapless Indian farmer. The death toll of over 500 apart, heavy rains lashing several parts of India have washed away crops and eroded almost three feet high soil from the farmlands. Experts say it indicates farmers can resume work only after about four months. Some have been totally devastated because the rains have rendered their land barren. 

Any damage to agriculture deals a big blow to the Indian economy. The sector may account for only about 25 per cent of the country's gross domestic product (GDP), but it supports nearly 57 per cent of the population. According to a study by economist Arvind Virmani as much as 45 per cent of the variation in India's GDP over the last 50 years can be explained by the fluctuations in rainfall. 

But what has the government done to protect its farmers from the vagaries of the monsoons? Little or nothing. One thing is common to all political parties that have occupied the hot seats in New Delhi - all have taken the surest way to secure farmers' votes by promising them protection from the calamities of nature. Unfortunately, mother nature still calls the shots.

Every budget spotlights on providing better irrigation and infrastructure, cheaper farm credit and insurance, better research, etc. But all those assurances appear to be false promises once the target of grabbing the power centre has been achieved. The government wriggles out of its responsibilities by one way or the other by citing either political or financial compulsions. One oft-cited excuse is: it is not the duty of the government alone. The private sector too must come forward to help the farmers. 

Recently, Commerce and Industry Minister Kamal Nath said in his meeting with the Parliamentary Consultative Committee, that the government hoped the private sector would supplement the public investment in agro-exports sector, pitching in greater investments than ever before. The government is seeking private investment in agricultural sector to develop cold chains, warehousing and transport facilities. 

The Consultative Committee members stressed the urgent need to set up recognised laboratories whose certifications are accepted globally for export purposes. The Agricultural and Processed Food Products Exports Developments Authority said it would set up 12 centres across the country at a total cost of Rs25 billion for handling of agro-perishable exports. But don't all these come after the son of the soil is sure of his crop?

The government is supposed to provide the correct timing and intensity of the monsoons, farm loans at minimum interest rates, good seeds and extend all help to the farmers when their crop fails. 

The burden of farmers' welfare has probably been too heavy, so the government is calling out for private help. The private sector cannot be called a shirker because a study shows the share of the private sector in capital formation in agriculture is approximately three times (in percentage terms) more than the public sector.

Asking the private sector for help in improving agricultural infrastructure is fully justified. But what about its own responsibility? When will the farmer see only prosperity in the monsoon clouds? The hapless soul is still waiting for an answer.


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## Bushroda

*Transforming India*
24 Jul 2007, 0008 hrs IST

The United States Agency for International Development (USAID) now describes India as a transforming rather than a developing country. This change in nomenclature may have been motivated by the need to cut an already minuscule amount of aid that India receives from the US. But it indicates a new way of looking at countries like India and China and the unique position they occupy in the world. 

American aid has always been strategically leveraged, with the bulk of it directed to a chosen few like Israel, Egypt, Pakistan and increasingly Iraq. It's not worth ruing the fact that USAID flows to India next year will be $81 million, down 35 per cent from this year's. 

Even at the higher rate it amounts to only 11 cents, or less than five rupees, for every Indian. In any case, India is looking for trade access rather than aid from the US as a way of lifting its economy and improving the living standards of its people. To label India as developing is to place it in the same bracket as the underdeveloped, the latter term having fallen into disuse lately. But both generate their own sets of cliches and vested interests. 

To be developing is to make ritual invocations to the wretched of the earth, wallow in poverty while blaming others for one's plight, know where to plead while making occasional prickly assertions of independence, and generally set low expectations for oneself. It's an identity that India needs to grow out of. Transforming would be a better description for the country to internalise. 

Influential recent studies, such as the ones carried out by Goldman Sachs and McKinsey Global Institute, suggest that the India story in the 21st century doesn't have to be a repeat of the latter half of the 20th. Both studies see it as a giant in the making, a crucial pole of the future world economic order. 

India has enormous problems and enormous prospects. It may have the makings of a superpower, but its infant mortality rate is a shocking 57 per 1,000 births; higher than Bangladesh or Namibia and about double that of Egypt. It's been left far behind by China in power, ports, roads, health and education. In the circumstances, transforming is an appropriate category. We have a lot of way to make up for the lost years of chronic, self-pitying underdevelopment. And we are not there yet.


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## Bushroda

*india infrastructure - require huge investment* 
Al-Bawaba, Jordan 
Posted: 23-07-2007 , 16:45 GMT 

Global Investment House  Economic & Strategic Outlook- India  Infrastructure - Improvements in infrastructure facilities will be critical to sustain and accelerate the current economic growth. It is noteworthy that in the recent years improvements have taken place in infrastructure facilities in areas such as telecommunications, roads, ports and railways. These developments are having a positive impact on the productivity and competitiveness of Indian economy. At the same time, infrastructural constraints in most critical areas such as power and urban infrastructure continue to impinge on the competitiveness of manufacturing activity. Apart from higher levels of investment, issues of governance and management including policies relating to appropriate pricing and user charges would need to be addressed to achieve satisfactory results.

The government projects a total fund flow of US$456bn in 11th five year plan (2007-12). The resources will be mobilised from public sector funding and private investment. Of the total projected investment, it is estimated that power could get 28%, roads 19.7%, railways 14.5% and telecom about 12.3%. Power sector can see investment of Rs5,257.2bn in the 11th plan. Public spending would continue to dominate this investment with private sector expected to contribute Rs200bn with a projected growth rate of 15%. Road sector can see investment of Rs3,686.5bn in the same period with private sector playing important role in the sector. It is expected that overall spending on national highways would grow by 5% per annum for next five years. Investment in rural roads is also projected to grow at 8% per annum.

Government has identified growth in agriculture sector as the key to realizing 9% growth rate during 11th plan. For this to happen, the irrigation network has to be improved substantially. It is projected that investment of Rs1,831.4bn would come to the sector for creating the target 14.5mn hectares of irrigation potential. In the water supply and sanitation sectors, Rs1,063.5bn worth of investment is expected to come. This would mean that central and state plan spending would grow at 10% and 5% respectively.

Index of six core infrastructure industries comprising of crude petroleum, petroleum refinery products, coal, electricity, cement and finished steel witnessed a robust increase of 10% in March 2007. A year ago, the index had increased by 7%. Except for cement, all the remaining five sectors witnessed higher growth in production in March 2007 as compared to the previous year. Electricity generation recorded a healthy increase of 8% in March 2007 as compared to the modest rise of 3.4% a year ago. Finished steel production witnessed the fastest increase of 15% in addition to the 10.9% increase a year back. Crude petroleum production recorded a turnaround, growing by 3.2% in March 2007. A year ago, production had declined by 2.5% in March 2006. Production of petroleum refinery products witnessed an impressive increase of 13.4%. Growth in cement production decelerated sharply to 5.5% in March 2007 as compared to the strong increase of 17% a year ago.

During 2006-07, index of six core infrastructure industries recorded a satisfactory rise of 8.6% as compared to 6.2% increase in the previous year. Electricity generation, with the largest weight in core infrastructure industries, grew by 7.3% during 2006-07. Growth in crude petroleum production grew by 5.6% during 2006-07 as compared to a decline of 5.3% during the previous year. Petroleum refinery production also witnessed a robust increase of 13.4% during 2006-07. Production of cement witnessed a lower increase of 9.1% during 2006-07 after expanding by 12.1% in the previous year. Growth in coal production also slowed to 5.9% from 6.6% during 2005-06.

Improvements in infrastructure assume critical importance for maintaining and improving Indias competitiveness as also encouraging investment in export production and sustaining the pace of export growth in the longer term. Given the kind of investment requirement for the infrastructure development with rapid progress with private participation, sector is expected to grow at good pace for the next few years.

Coal production was affected severely in the first half of 2005-06 owing to disruption in mining activities in various coal fields caused by heavy downpour in some regions during the monsoon. However, mining activities improved in the second half of the fiscal which facilitated a recovery in coal production. The finished steel sector witnessed some deceleration during the year, which could be partly attributed to higher imports and slowdown in exports. Growth in the production of petroleum refinery products recorded a slowdown due to unscheduled shutdown of certain refineries and some moderation in off-take of petroleum products. The subdued growth in electricity sector is attributed to inadequate availability of coal and gas. Reflecting these trends, production of many infrastructure industries fell short of their targets for 2005-06. The fertiliser sector also remained below target due to lackluster performance both by public and private sector plants on the back of shortage of raw materials and natural gas in a few plants and equipment problems. Natural gas production exceeded the target, even as electricity generation was held down by inadequate supply of gas.


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## Bushroda

*Satyam targets 75 percent growth in South Africa*

Mumbai, July 25 (IANS) Satyam Computer Services Ltd., one of India's leading software services providers, Tuesday announced its plans for more than 75 percent growth of its South Africa operations.

"Given the potential, both in terms of business and human capital (in South Africa), we have set an aggressive target of 75 percent year-on-year revenue growth and we will invest heavily in further developing the local human capital through various skill enablement initiatives," said Virender Aggarwal, director and senior vice president, Satyam's Asia Pacific region.

The company will hire about 200 South Africans for its offices there.

"In the next two to three years, we plan to achieve a leadership position in South Africa amongst our Indian peers," Aggarwal added.

The company is also bullish on several contracts that would be coming up in South Africa in the next few years and sees huge growth potential in providing IT solutions to the banking and finance, energy and utilities and government sectors.

"I am glad that a global IT giant like Satyam has partnered with us to associate with the country's inclusive strategy of growth and development and serve the economy in a meaningful way," said Sehloho Francis Moloi, South Africa's high commissioner to India.

"Partnering with Satyam and other companies will also contribute to the development of the kind of skills that South Africa needs in order to sustain the current economic growth that we are enjoying, especially the six percent growth we have envisaged in our economic outlook," Moloi added.

Currently, Satyam serves six of the largest firms in the country, employs over 120 technical resources at customer locations and has offices in Johannesburg and Cape Town.


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## Bushroda

*Indian economy growing below potential: Chidambaram*
Ahmedabad, April 01, 2007

India's economy was growing below its potential as a large number of poor people were not participating in the growth process, Finance Minister P Chidambaram said on Sunday.

"I am proud that we have achieved an average growth rate of 8.6 per cent during the past three years. At the same time, I am acutely aware that our economy is growing at a rate below its true potential," Chidambaram said at the convocation ceremony of the Indian Institute of Management.

"There are many reasons, but the most important appears to be that nearly one-half of the people of the country do not fully participate in the growth process due to lack of education, skills, jobs, capital or opportunity," he said.

"They are poor, not only in terms of income poverty but also in terms of many human development indicators." Chidambaram noted that India could emulate some smaller and poorer countries in its neighbourhood that have surged forward.

"Some of them have wiped out abject poverty, for instance Malaysia and Thailand," he said.

Some have become middle-income countries like South Korea while others like Sri Lanka have achieved remarkable progress in literacy, life expectancy and other human development indicators, he said.

Chidambaram said India, after independence, failed to encourage the creation of wealth. "Wealth creation, especially through private enterprise, was viewed with suspicion and sometimes even contempt," he remarked.


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## Bushroda

*Indiabulls 1st-Quarter Profit Doubles on Loans, Fees*
By Gautam Chakravorthy

July 24 (Bloomberg) -- Indiabulls Financial Services Ltd., a securities firm part-owned by Citigroup Inc., said its first- quarter profit more than doubled on higher lending to individuals and fees from selling insurance policies. 

Net income, including that of units, rose to 1.66 billion rupees ($41 million) in the three months ended June 30 from 766 million rupees a year earlier, Mumbai-based Indiabulls Financial Services said in a statement today. Total income doubled to 4.43 billion rupees. 

Indian banks and non-banking finance companies are expanding loans and fee income, aided by a consumer boom, as the fastest pace of growth in the Indian economy boosts incomes. Industrial production, a quarter of India's economy, expanded 11.7 percent in the two months ended May, faster than the 10.8 percent pace a year earlier. 

Indiabulls Financial Services' income from loan advances almost tripled to 3.1 billion rupees in the quarter as lending also tripled to 41.4 billion rupees, Indiabulls Financial Services said in the statement. Loans to individuals surged more than ninefold to 27.4 billion rupees in the period. The company plans to lend as much as 60 billion rupees this fiscal year. 

``We are on course to meet our target,'' Gagan Banga, executive director at Indiabulls Financial Services, said in a phone interview. ``We don't want to exceed the target.'' 

Indiabulls Financial Services, whose shares rose more than sevenfold in the past 12 months, fell 14.35 rupees, or 2.2 percent, to 649.8 rupees at 11 a.m. local time on the Bombay Stock Exchange today. The benchmark Sensitive index rose 0.7 percent to 15,847.35. 

*Higher Fees* 

Indiabulls Financial Services offers brokerage services in equities, debt and derivatives, gives loans against shares and lends to consumers. Fee income from selling insurance and processing applications for loans grew to 316 million rupees from 73 million rupees. 

The pace of growth of income from stock broking and other capital market-related activities at Indiabulls Financial Services slowed to 4 percent, rising to 1 billion rupees, after almost doubling a year earlier to 986 million rupees, as the company focused on expanding its finance business. The broking business accounted for 23 percent of revenue in the quarter, compared with 45 percent a year earlier.


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## Bushroda

*Perfect launch pad for move into Europe*

*A benign regulatory environment gives London the edge over New York as Indias giants go global, our correspondent says in our series on new Anglo-Indian links*

Ashling O' Connor 
The TIMES

Ronnie Screwvala, the Bollywood producer, could easily have floated his company in the US. The Indian entrepreneur has close ties to some of the major Hollywood studios, which bankroll many of his creative projects, including Disney, with which he has struck an animation deal. 

After some consideration, though, he chose Londons Alternative Investment Market (AIM) as the place to list UTV Motion Pictures. It was a fine call between AIM and Nasdaq, but in the end we needed to be on the London Stock Exchange, Mr Screwvala said. The Government is more supportive in the UK, the talent base in London is good, its central for time zones and as a commercial capital it is very strong. 

His geographical inclination is echoed across other Indian industries. London is the perfect launch pad to get into other European regions, Ramesh Phillips, the European operations co-ordinator for Wipro, the software group, said. Everything you need for a successful business is here. 

As Indian companies become global players, one of their first ports of call is the UK. This is because of the historic ties between Britain and India, but also because London is becoming a vital capital-raising centre for their international ambitions. 

London is also benefiting from a not New York effect, according to John Ross, the director of economic policy in the Mayor of Londons office. There are only three places where you can get unlimited access to capital and thats New York, Tokyo or London, he said. Tokyo hasnt really globalised and when it comes to international finance, London is doing better than New York. London is a one-stop shop for going global and India needs to raise lots of capital. 

Indian companies, mostly property funds, last year raised a record $2.7 billion (£1.3 billion) on AIM and $200 million on the main market. Twenty-four Indian companies are now traded in London; 19 are on AIM. 

The journey to Londons capital markets began in 1991 when India liberalised its economy, prompting widespread corporate restructuring, as Alan Rosling, the Tata director in charge of the Indian groups international strategy, recounts. He said: For the first time in a generation, Indian companies were free of government restrictions on their overseas investments, they had the competitiveness arising from lower costs of high quality people and they saw the strategic need to scale up to face growing international competition. 

The easing of capital constraints led many, instinctively, to seek a presence in London. They are coming for a range of strategic motivations  an international profile, acquisitions in Europe or diversifying their portfolio of investments, Ibukun Adebayo, India specialist at the London Stock Exchange, said. The fear [in India] that a foreign listing would be a premium capital outflow is being refuted. India realises that the investments flow back in one shape or form. 

As Indias companies look to London, so too do their trusted advisers and financiers. In the throes of independence, the State Bank of India, the countrys largest bank with its origins in the 19th century imperialist Bank of Bengal, ventured abroad on the coat-tails of the diplomatic corps. 

Today its private-sector rivals are expanding with the confident strides taken by Indias new ambassadors: the top 2,500 companies collectively sitting on free cashflow of $150 billion and underleveraged balance sheets. Our customers are going global and we have to follow them, Chanda Kochhar, the deputy managing director of ICICI Bank, Indias largest commercial bank, said. 

In the past five years, the bank has amassed a $6 billion balance sheet in the UK, its most profitable international subsidiary. I expect to see the operation grow 100 per cent this year and for years to come, Ms Kochhar said. Opportunities are arising in India but financial structuring is possible globally. We are bringing the opportunity from India and making it happen in the UK. 

Although it is tiny by global standards, even after a $5 billion secondary issue, ICICI is gradually building an international reputation. It was one of the lead arrangers on Tatas £271 million acquisition of Tetley Tea in 2000 and a second-tier syndicate lender for the Corus takeover and it structured the finance for the acquisition of Whyte & Mackay by the tycoon Vijay Mallya. 

We have global aspirations  this is an important platform for us, Sonjoy Chatterjee, the banks UK chief executive, said. Significant growth is to come from international markets and London is the hub. The regulatory environment is extremely benign and it is easy to do business here. 

In the heart of the City sits Punjab National Bank, the third-largest bank in India with 37 million customers and 2,700 branches. Established in 1895, it this year had the confidence to open its first UK branch. Now licensed by the regulator, PNB has ambitions beyond the Indian diaspora to win UK customers by using its cheaper administrative base in India to beat high street banks on their home turf. 

PNB illustrates how Indian groups are moving beyond simple cost advantage to rival UK companies at their own game. India is globalising and our customers are too, Madanjit Singh, the managing director of PNBs international arm, said. Unless we bring in global exposures and best practices, the past is no guarantee of the future. 

In modern times, Britain has ceded its once-dominant trading position in colonial India to more adventurous investors from the US, France and Italy. It would do well to heed the same advice. History offers no guarantee.


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## Bushroda

*Trends emerge from Indias LCC market revolution*
Wednesday, 25 July 2007
e-Travel Blackboard

The Centre For Asia Pacific Aviation (CAPA) has released results after a recent survey was conducted finding new trends in passenger behaviour following Indias Low Cost Carrier revolution and the countrys emerging economy.

The survey found Indias travelling population was increasingly using LCC as their preferred means of transport, price dependent, and a significant number of those purchasing tickets were using the internet to do so.

43 per cent of the 2000 LCC passengers surveyed throughout airports in India said they bought their tickets over the internet, while 48 per cent said they used a credit card to purchase their tickets. 

Figures relating to full service carriers in India were significantly lower, with just 21 per cent buying tickets over the internet, and 31 per cent using a credit card for the purchase. 61 per cent was found to have used a travel agent to buy air tickets.

CAPA noted that three years ago when the rise of Indias LCC market was beginning, industry analysts argued it would fail due to the low internet and credit card penetration in the marketplace. 

The spread of middle class affluence, in the wake of enormous economic growth, has challenged this point of view, and our survey results prove what we have in fact been hearing from Indias LCCs over the past year. The figures are startlingly clear, and still surprising to some  India is in line with global experience, as noted in CAPAs report.


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## Bushroda

*HP plans expansion to 500 cities by 2008,launches new products*
PTI 
Tuesday, July 24, 2007 22:02 IST

MUMBAI: World's largest personal computer maker Hewlett- Packard on Tuesday said it plans to expand its market to 500 Indian cities by 2008.

"Currently, we are present in 380 cities and are targeting to expand to 500 cities by 2008," Hewlett-Packard India Sales Pvt Ltd's Director (Consumer Products-PSG) Rajiev Grover told here.

By 2008, HP will also increase its retail outlets to 2,800, from the current 2,000.

"We already have presence in Tier I and II cities. This year our focus will be mainly on Tier III cities as there is a large scope there," he said.

HP Senior Vice President Global Marketing Satjiv S Chahil said: "We are mainly targeting the SMEs... as in any economy, small and medium business is the backbone (here)."

"We intend to maintain a leadership position here," he added.

HP also launched its new Compaq portfolio, a new range of desktops and notebooks. It includes Compaq Presario V6425TU and V6406TU notebooks and Compaq Presario SG3053IL and SG3043IL desktops.

Launching the range, Bollywood superstar and Compaq brand ambassador Shahrukh Khan said that the company's vision is to empower people to make their dreams come true.


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## Bushroda

*Sabinsa Corporation Unveils Manufacturing Facility in India*
2007-07-24 - Sabinsa Corporation 
NPI Center, Canada

*Facility allows Sabinsa to better serve global nutrition market while growing local economy*

PISCATAWAY, N.J., July 23, 2007 - Sabinsa Corporation today announced that it has completed construction of a $6 million manufacturing facility in Hyderabad, India. The state-of-the-art building and its 100 estimated employees will manufacture herbal extracts and phytochemicals for world markets including the U.S., Europe and Japan.

Located in India's Genome Valley, the new plant covers an area of 200,000-square-feet with a dedicated 60,000-square-foot area which houses a series of testing labs and manufacturing equipment to ensure optimum quality control, in addition to providing headquarters for Sabinsa's research and development operations. Sabinsa currently operates five additional manufacturing facilities throughout India. This plant, like the others, uses effluent water treatment systems and is environmentally conscious and friendly. 

"Increased demand for our scientifically backed ingredients coupled with tremendous business opportunity in the Genome Valley presented an ideal opportunity to grow our business and establish a new manufacturing plant in India," said Dr. Muhammed Majeed, founder of Sabinsa Corporation. "We are pleased to have the tools to better serve our customers while providing a range of employment opportunities that will allow both Sabinsa and the local economy to flourish."

Sabinsa Corporation, founded in 1988, is a manufacturer and supplier of herbal extracts, cosmeceuticals, minerals and specialty fine chemicals. Sabinsa's mission is to provide alternative and complementary natural products for human nutrition and well-being. Over the past nine years, Sabinsa has brought to market more than 50 standardized botanical extracts and privately funded several clinical studies in conjunction with prestigious institutions in support of these products. With more than 100 scientists working full time conducting ongoing research both in India and the United States, Sabinsa continues to develop and patent phytonutrients for the world market. All products intended for human consumption are certified Kosher.


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## Bushroda

*GE Equip enters India, plans $8bn investment* 
BS Reporter / New Delhi July 23, 2007 

GE Equipment Services (GEES) today announced its entry in India by acquiring 15% stake in Titagarh Wagons. The company also plans to invest $8 billion in the country by twenty ten.

Terming it a strategic investment, considering the Indian Railways has been opening up to private players, GEES feels that it would be able to fulfill the railway ministry's demands for wagons. In fact, with the partnership with Titagarh Wagons, GEES would foray not only in wagon manufacturing, but would also set up facilities for maintenance of wagons.

The partnership comes at a time when the railways ministry is in the final stages of starting work on the dedicated rail freight corridor project.

GEES India President Dhananjay Nalawade said currently Indian Railways has around 2,30,000 wagons, while it would require 3,30,000 wagons by 2010. "This is where our partnership with Titagarh Wagons would come in handy," he said. GEES is also in talks with the ministry for providing signalling equipment.

"GE is looking at investing around $8 billion in India by 2010, a majority of which would be pumped in infrastructure," Nalawade said. GE is also keen on taking part in the ministry's other PPP initiatives like land development.

Titagarh Wagons, which is one the leading railway wagon manufacturers in India, is primarily engaged in the production of wagons, bailey bridges and heavy earth moving equipment.


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## Bushroda

*Indian households lapping up laptops real fast*
Posted July 19th, 2007 by Tarique

New Delhi, July 19 (IANS) With the Indian IT industry witnessing a robust growth, the country's household segment, apart from the business sector, is fast lapping up notebooks inducing the market to grow fivefold, said an industry report.

Notebook sales account for over 13 percent of the total PC (personal computer) market of which the household segment constitutes 37 percent and businesses 63 percent, said an annual IT industry performance report released by the Manufacturers' Association of Information Technology (MAIT), a leading IT hardware and training body.

"Notebooks are becoming increasingly affordable, hence their consumption in the households grew fivefold accounting for more than one-fifth of the total notebooks market," Vinnie Mehta, executive director, MAIT, told a press conference here Thursday.

Annual sales of notebooks grew by a whopping 97 percent, with 850,860 units sold in 2006-07 compared to 431,834 in 2005-06.

The total PC sales rose to 6.34 million units in 2006-07 compared to over 5 million in 2005-06.

The bi-annual review also reported the growth of desktop market that grew at a rate of 19 percent with the business sector accounting for 74 percent of sales and households 23 percent, which has remained constant for the past 2-3 years.

"The household segment has the potential to grow at more than 20-25 percent. Having said that we do understand that the strengthening of the rupee and hike in interest rates have created a pressure on their disposable income," stated Mehta.

Contrary to popular belief, the report highlighted the fact that the sale of desktops was more in northern India than in the southern and western India.

"This I believe is more because of increased consumption (of desktops) by private companies and the several e-governance measures adopted by the government," Mehta explained, adding that a considerable growth in consumption was also noticed in the eastern region that is becoming more hi-tech by the day.

However, the sale of servers registered a negative growth, declining by five percent in the four metros of Delhi, Mumbai, Chennai and Kolkata and by 53 percent in Bangalore, Hyderabad, Ahmedabad and Pune.

The sale of UPS (uninterruptible power supply) grew by 80 percent in 2006-07 with 2.17 million units sold, of which households accounted for 42 percent and businesses 58 percent.


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## Bushroda

*Could Jaguar Or Land Rover Go Indian?*
Ruth David, 07.24.07, 8:15 PM ET
FORBES, NY

MUMBAI - Indias Tata Motors and Mahindra & Mahindra have reportedly been shortlisted as bidders for Ford Motors British luxury brands Jaguar and Land Rover. 

Tata Motors (nyse: TTM - news - people ) and Mahindra & Mahindra declined to comment on an article in The Economic Times that said Ford (nyse: F - news - people ) had cleared the companies to start due diligence and organize visits to Fords factories. 

An acquisition of either of the brands would vault Mumbai-based Tata Motors into the luxury market and strengthen it internationally. Though it exports cars and trucks to places like Africa and the Middle East, Tata is still mainly seen as an Indian outfit, said Mohit Arora, senior director at the consultancy group J.D. Power Asia Pacific. 

Since Tata Motors now has a fairly strong bottom line, they wouldnt have an issue with using internal accruals or raising more money from the markets, Arora told Forbes.com from Singapore. 

However, for a company that has made its name in India with cars that are cheap to run and operate, rather than the highest in quality, a move into the luxury segment would be a sharp departure, said Arora. Tata currently is working to realize ambitious plans to release an ultra-low-priced $2,500 car for the Indian market. (See:  The Next Peoples Car)

Tata Motors controls 65% of the Indian commercial vehicle market and 19% of the passenger car market.

In response to an e-mail, Ford Europe spokesperson John Gardiner said: Ford has been assessing a number of strategic options for all our operations.  The review is continuing and Ford is now actively investigating its options in terms of other possible actions: we are not ruling anything in or out. He refused to disclose who has expressed an interest in buying the brands.

A Jaguar acquisition would be good for Tata Motors since the Ford brand, despite its troubled past, currently ranks high in quality, said Arora. Land Rover, on the other hand, is at the bottom of J.D. Powers quality rankings. Media reports said the brands should fetch Ford about $1.5 billion.

As for Mahindra & Mahindra, the worlds fourth-largest tractor maker has more of a global presence. It also has more of an up-market focus and is likely to attempt expanding along those lines, Arora said. 

Mahindra already has a manufacturing base in the U.S., where it assembles 14 products, and it exports to Russia and several countries in Africa. In India, Renault (other-otc: RNSDF - news - people ) and Nissan (nasdaq: NSANY - news - people ) are in an alliance with the company, and the alliance is a key strength, he said. 

It is possible that an acquisition of one of the Ford brands could come in the context of an expansion of the Nissan-Renault-Mahindra alliance internationally.


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## Bushroda

*Railways planning heavy investment in infrastructure*
GULF TIMES
Published: Wednesday, 25 July, 2007, 02:26 AM Doha Time 

KOLKATA: The Indian Railways is planning to invest Rs2.51tn($62 billion) in the 11th Five Year Plan for developing infrastructure to strengthen its domestic supply chain.

The railways will chip in with this amount for five years down the line, of which Rs900bn will come from internal generation. At least 29% of the total amount will be from market borrowing and the rest will come from the government, V Mathur, member, traffic, Railway Board, told reporters yesterday.

He was speaking at a seminar on Logistic Colloquium organised by the Confederation of Indian Industry (CII) here.

He said the draft of the investment proposal had already been submitted to the Planning Commission. The Indian Railways is looking into several development aspects like electrification and gauge conversion. 

We are looking at Public Private Partnership (PPP) models in some areas and are also keen to explore opportunities with multilateral funding agencies, Mathur said on the sidelines of the seminar. 

Speaking on the Delhi-Mumbai industrial corridor, he said the Japan International Corp Agency (Jaica) was involved in a survey on the project. The survey will be ready by October.

Mathur said that Rs280bn would be invested in the Delhi-Mumbai freight corridor. He also said there was plenty of opportunity in the field of logistical development as the total import in India since 1995 increased by 19% and exports increased by almost 17%.

The railways will also develop about 20 warehouses in different parts of the country through the Railway Warehouses Corp. Earlier all the warehouses were developed but they were lying neglected, he said, adding the railways will also develop logistic parks along the Delhi-Mumbai freight corridor to enhance the domestic supply chain in India.

Indian Railways is also looking at multilateral funding agencies like Japan Bank for International Cooperation (JBIC) to participate in some of its logistics development ventures, Mathur said. 
Meanwhile, the railways is discarding the computerised system for enquiry regarding train timings and reservation and reverting to the manual service.

Railway Minister Lalu Prasad has inaugurated the new railway enquiry phone number 139 by asking the operator about the timing and first class air-conditioned rail fare of the Patna Rajdhani Express.

The phone number 139, to be available in four metros of Delhi, Mumbai, Chennai and Kolkata, is part of the integrated train enquiry system (ITES) called Rail Sampark consisting of interactive voice response system and regional call centres, Railway Board Chairman Jai Prakash Batra told reporters.

Asked what will happen to the existing computerised service, Batra said: It will coexist for some time but once this is fully functional, we may decide to close that down.
Batra replied in negative when asked if the new system was not like going back to the old days. 

He said that the new system was developed through public-private partnership (PPP) between Indian Railways Catering and Tourism Corporation (IRTC) and CRIS on the one hand and on the other hand Bharat BPO and Bharat Sanchar Nigam Limited as well as Spanco Telesystems and Solutions and Stratcon Backoffice Solutions with a call centre operator.

The add-ons in this service include hotel and taxi bookings and restaurant table reservations, apart from rail reservations. 

In the first phase zonal hub for the north region at Delhi and its call centre at Noida has been commissioned. This will provide the basic enquiry services for NCR Delhi, Punjab, Haryana, Himachal Pradesh, Jammu and Kashmir, Uttar Pradesh, Rajasthan, Uttarakhand and Chandigarh, Batra said.

The subscriber will be accessing this service by making a local call and not STD dialling. For the northern centre 497 skilled executives have been deployed for the purpose, he said.
The caller will have the option to seek information zone-specific regional languages.


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## Bushroda

*SEZ investment to cross Rs 1,00,000 cr* 
Chennai, UNI: 

Union Commerce Secretary G K Pillai, on Monday, said the investment in Special Economic Zones (SEZs) across the country is likely to cross the Rs 1,00,000 crore mark by 2008.. 

Union Commerce Secretary G K Pillai, on Monday, said the investment in Special Economic Zones (SEZs) across the country is likely to cross the Rs 1,00,000 crore mark by 2008.

Addressing a one-day national seminar on SEZ here, he said apart from the benefits of investment, the SEZs would generate about one lakh jobs in various fields by this year.

The Commerce Ministry is expecting another three lakh crore investment in Special Economic Zones by the end of 2009, which would generate three lakh more jobs, he said.

*Centres vision*

On SEZ Act, which brought enormous FDI, Mr Pillai said the governments vision on Special Economic Zones had tremendous potential to succeed.

Nokia, Flextronics, Ascendas, Foxconn Tech and Apache Software have already invested in India because of the Special Economic Zones, he said.

Mr Pillai, who is also the Chairman of the Board of Approval (BoA) for Special Economic Zone, said the SEZs were fairly distributed across the country, except for some places in Bihar and North Eastern states.

Private investment in Special Economic Zones, before the enactment of the Act, was merely Rs 3,600 crore, he said adding after the Act, many companies have so far invested over Rs 40,000 crore besides generating 50,000 jobs.

*Instructions*

On the land acquisition issue especially for the SEZ, Mr Pillai said the Centre had issued certain instructions with regard to approval of Special Economic Zones and the land acquisition for SEZs.

Chief Secretaries of all the state governments have been informed that the state governments should acquire land for SEZs only with 100 per cent consent from the land owners, he said. According to the statistics given by the officials on the latest state-wise Special Economic Zones position in India, Maharastra leads the table with 60 SEZs, formally approved by the Centre, followed by Tamil Nadu with 36, Harayana (22), Karnataka (20), Gujarat and Andhra Pradesh (19), West Bengal (10), Orissa (8) and Uttar Pradesh (6).

*Freight corridor*

Meanwhile, Mr Pillai said, India and Japan will next month sign an agreement for a dedicated rail freight corridor connecting Delhi, Mumbai and Kolkata, which will significantly reduce the time taken for transporting goods from one metro to another.

We are likely to sign it (MoU) next month when the Japanese Prime Minister visits India, Mr Pillai told reporters on the sidelines of the seminar here.

He said about 200 freight trains would ply on the corridor and help Indian Railways wean away goods traffic from the roads.


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## Bushroda

*The 10 countenances of the elephant*
Stephen Manallack
The Age, Australia
July 26, 2007

WITH India doing a nuclear deal with the US and taking a front seat in global forums, it is important that Australia understand this emerging superpower  especially as pressure mounts for India to join the 21-member APEC group and as India becomes one of our major trading partners.

Many of our business leaders have already been surprised and challenged by the negotiating skills and management performance of their Indian counterparts, most of whom learnt their craft in tight-capital and low-margin markets, a combination few in the West have experienced. Whether in business or politics (or international cricket), India is no pushover. To relate and negotiate, we need to factor in 10 realities about modern India, areas chock full of myth.

First, Indian entrepreneurs are now recognised around the world and there is a national expectation that the next Bill Gates will be Indian. Global successes are celebrated, as Lakshmi Mittal and Ratan Tata have found as their conglomerates become global steel leaders. There is much more to come on this front, with growing reserves of corporate capital finding a home overseas and more Western business icons falling to Indian ownership.

This entrepreneurial spirit permeates the nation and sits comfortably with the contradiction of socialist leanings. Nowhere is the spirit of small enterprise so active as in the communist-run state of Kerala  but the locals point out this contradiction is just "India".

Second, Indian leaders may live urban and increasingly Western lifestyles, but they do not forget the small towns and villages at the centre of rural life  and it's not just the politicians with an eye for votes, with major corporates such as Infosys pouring resources and funding into village developments. Somewhere at the back of the mind of most Indian delegations will be the nagging question: "What does this mean for rural communities?"

Third, India is a land of great cultural and linguistic diversity and countless opinions, but two things unite the nation  cricket and the World Trade Organisation. Indians become instantly passionate when challenged on their high tariffs, pointing to European and US agricultural subsidies as well as restrictions on the flow of capital and people out of India. This passion was seen at the WTO in Germany last month, when Indian delegates walked out, and will be seen again at countless forums around the globe. The message is, point the finger at India and you can expect a robust response.

Fourth, Indians have oceans of patience, which can drive Westerners crazy, but it gives them a special strength in negotiations. This patience is derived from deeply held spiritual views such as impermanence  Indians are constantly reminded of the impermanence of this life, everything changes, and they can wait when often we cannot.

Fifth, do not believe that the Indian economic miracle is just driven by call centres and IT. Important as these are, look also at energy, retail, manufacturing, pharmaceuticals and even agriculture (did you know India is the second-largest wheat producer?).

This economy is more driven by domestic demand than, for example, is China's, so deriving its long-term strength. Already the IT industry is changing in India, as much of the "grunt" work is actually outsourced to South-East Asia while Indian companies take a firmer grip on high-value knowledge work.

Sixth, the dragon (China) and the elephant (India) have discovered that they can dance, and soon China will become India's major trading partner. Competitors are becoming collaborators and politicians are pushing this hard, as decades of acrimony and mistrust begin to diminish.

So, Western business and political leaders need to be aware that the Indians coming to global negotiating tables and forums like the nuclear club and APEC will be leaders who confidently see that this century belongs to the East.

Seventh, while India feels great about the success of "Asia", in many ways it does not feel particularly "Asian". Indians feel Indian. To them, that is more relevant than being geographically part of Asia.

Eighth, whether dealing with the young or the old, in India never forget the "Father of the Nation", Mahatma Gandhi. So when Gandhi said there was enough in the world for everyone's need but not everyone's greed, your Indian counterpart will have this in mind.

When he scorned Western civilisation (on being asked what he thought of Western civilisation he said it would be "a good idea") this might account for the smile on the other side of the table, for Indians do not necessarily see Western leaders as representing a wonderful society.

Ninth, partly because of Gandhi, while the importance of "freedom" justifies actions in the US and other parts of the West, your Indian counterparts will be preoccupied with "freedom and equity", seeing little value in giving people the vote but no fair share of the food, and so on. Indian leadership needs more than the rallying cry of "democracy" to make it enthused.

Tenth, while many in the West see India as a "developing" country and may underestimate its desire to make an impact, the position it has taken at the WTO and other global forums is a sign that India has no intention of being a bit player in the world. Invite India in and you can expect them to want to be at the head of the table, making the running.

India will be a great power. Inviting India into APEC makes a lot of sense, so long as the members, including Australia, realise that this truly means an elephant will be in the room.

_Stephen Manallack is a former chief executive of the Australia India Business Council._


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## Bushroda

*CineMaya Media Group Expands US Operations in California *
Wed, 25 Jul 2007 12:31:28 GMT 
CineMaya Media Group, Inc. 

NEW YORK, NY -- 07/25/07 -- CinéMaya Media Group, Inc. (PINKSHEETS: CNMY), a leading media, entertainment and marketing services company focused on India and the Indian Diaspora throughout the world, announced today it is now expanding its business operations with a new office in the West Coast of the United States as the company has recently experienced a healthy increase in advertising and subscription revenue from this market. Incidentally, California, as a state, is also home to the largest concentration of Indian Americans in the US. 

The company has appointed Mr. Neeraj Dhar, formerly Vice President of India Business Development and Operations, as the new West Coast Business Head. Mr. Dhar will manage the West Coast business of the company's publication, advertising, and events divisions from the new corporate office based in the San Francisco Bay Area. 

"It is no secret that the Indian community has been enormously successful in the US, and a big part of this success has originated from Silicon Valley, California. CineMaya Media Group is now looking for an expanded presence in the California market, primarily through ad-sales and distribution for our publications: The Indian Express North American Edition and Divya Bhaskar North American Edition; marketing services division -- Elephant Advertising; and events management division -- CineMaya, LLC. This expansion will allow us to grow our multi-platform business in a robust hub of the Indian American community. We are very excited that Neeraj Dhar, who has been a key member of our team for several years, will now lead the efforts to expand the business in California," said Nayan Padrai, President of CineMaya Media Group. 

Here are some key statistics to consider about the Indian population in America and the West Coast 

-- Between 1990 and 2000, the Indian population in the US grew 113% -- 10
times the national average of 13%. Source: US Census Bureau

-- Approximately 2.3 million Indian Americans live in the US as of 2005.
Source: US Census Bureau

-- According to the US Census' American Community Survey, 2005,
California is home to over 450,000 Indian Americans, the largest
concentration of any state in the nation.

-- Today, Indian Americans are the second largest Asian American ethnic
group following the Chinese American community.

-- One in every nine Indians in the US is a millionaire, comprising 10%
of US millionaires. Source: 2003 Merrill Lynch SA Market Study

-- The Indian community in Northern California is a vital driver of the
technology industry. A University of California, Berkeley, study reported
that one-third of the engineers in Silicon Valley are of Indian descent,
while 7% of valley hi-tech firms are led by Indian CEOs. Source: Silicon
India Readership Survey

-- Indians own 50% of all economy lodges and 35% of all hotels in the US,
which have a combined market value of almost $40 billion. Source: Little
India Magazine

-- Indians, along with other Asians, have the highest educational
qualifications of all ethnic groups in the US. Almost 67% of all Indians
have a bachelor's or higher degree (compared to 28% nationally). Almost 40%
of all Indians have a master's, doctorate or other professional degree,
which is five times the national average. Source: The Indian American
Centre for Political Awareness.

*About CineMaya Media Group: *

CinéMaya Media Group (PINKSHEETS: CNMY) is a leading provider of high quality international South Asian media, entertainment, and marketing services. Established in 2000 as a vertically integrated company, CinéMaya Media Group has since grown into a mini-conglomerate in the ethnic media landscape through its robust businesses within the following areas: Publication, Broadcast Television, Radio, Film & Television Production, Events, and Advertising. 

To obtain more information about CinéMaya Media Group, visit www.cinemayamedia.com. Group business sites include: www.elephantadv.com, www.iexpressusa.com, www.divyabhaskarusa.com. 

*Safe Harbor Statement: *

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Certain of the statements contained herein, which are not of historical facts, are forward-looking statements with respect to events, the occurrence of which involve risks and uncertainties. These forward-looking statements may be impacted, either positively or negatively, by various factors. Information concerning potential factors that could affect the Company is detailed from time to time in the Company's reports filed with Pink Sheets.


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## Bushroda

*Container Corporation net up 12.5% for Jun`07 qtr* 

Container Corporation of India registered a 12.48% growth in net profits to Rs 1,870.90 million for the quarter ended June 2007 from a profit of Rs 1,663.30 million for the quarter ended June 2006.

Net sales rose 7.57% to Rs 7,759.30 million for the quarter ended June 2007 from Rs 7,213.30 million in the corresponding quarter, a year ago.

Total income rose 9.95% to Rs 8,110 million for the quarter ended June 2007 from Rs 7,375.8 million in the same quarter, last year.

The earnings per share (EPS) of the company rose 12.5% to Rs 28.79 in the quarter ended June 2007.

Incorporated in 1988, Container Corporation of India (CONCOR) is a multi-modal (rail and road) logistics support provider for the country`s exim and domestic trade and commerce, working under the ministry of railways, Government of India. It handles the imports and exports of the country from about 40 dry ports or terminals spread across India. It also enjoys a near monopoly situation in the transportation of containerised cargo through the Indian railways. 

CONCOR`s core business is characterised by three distinct activities, that of a carrier, a terminal operator, and a warehouse operator. 

The key value the company offers is the provision of a single-window facility co-ordinating with all the different agencies and services involved in the containerized cargo trade right from customs, gateway ports, and railways, to road hauliers, consolidators, forwarders, custom house agents and shipping lines.

Shares of the company closed down Rs 16.20, or 0.72%, at Rs 2,240.00 at the BSE. Total volume of shares traded was 684.


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## Bushroda

*Indian property boom continues*
By Nick Booker, Staff Columnist
In2Perspective, UK
Published 25th Jul 2007, (a Wednesday) at 12:00AM

There has been a lot of foreign investment money ploughing into India in recent months as the nation's property market hots up. Prices in the major urban centres have been going up consistently and have been further boosted by the influx of investment.

This has in turn attracted further investment and a number of property market analysts now have India on their shortlists of countries to watch.

A recent report by Reuters found that property prices in key areas of the biggest India cities - such as Mumbai and New Delhi - have more than doubled since 2005. In Bangalore, the price of the average flat has increased by half over the past two years and you would now be lucky to find one for under £50,000.

It may surprise some to learnt that the Reuters report drew comparisons between Indian property prices and Shanghai, the latter being well known internationally as a prosperous business centre. Prices in India are around 20 per cent lower than those for similar properties in Shanghai - but are continually increasing.

One property company based in India - Indian Ocean Ventures - is predicting that the total value of the national property market will rise from £6 billion to £27 billion over the course of the next three years. The company says that this is because the market is experiencing a lot of interest from overseas investors. 

CEO and managing partner Rohan Narse advised prospective investors to look at the north - specifically, around Delhi - and the west of India. These are where most of the industry is concentrated and as such where most of the money and demand is. A key thing is "to decide on a certain area or a certain developer - people are sold on India but they're not sold on which area or which developer".

"One of the fastest growing industries is hospitality - hotels. There are probably about seven or eight thousand good quality hotels in the whole of India, whereas in Hong Kong itself there are about seventy thousand. So really there is a significant amount of hospitality building work that is required," he added. 

This may be because last year, the government spent just over £8 million on promoting the country as a tourist destination to both domestic and foreign markets. feeds. The Indian tourist office says: "The government is putting greater emphasis on development of infrastructure at important tourist destinations and to promote and publicise various tourism products of India within the country and abroad."


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## Bushroda

*Uganda: Country Must Learn From Indian Lesson*
Arthur George Kamya
AllAfrica, Washington
26 July 2007

Relying on a recently published book titled "In Spite of the Gods" by Edward Luce, this article attempts to draw some lessons for Uganda from the economic organisation of post-independence India, initially organised around policies of import substitution (Mohandas Gandhi's handspun and homespun cotton substitute for Manchester-manufactured, imported yarn), self-reliance and tight state control.

In 1991, the Indian government ushered in a period of economic liberalisation responsible for today's so-called Indian economic miracle. In addition to being a vibrant and pluralistic democracy, pre-liberalised India built up an intellectual and technological prowess unequalled in the Third World.

The Indian economy was buttressed by a widespread use of English as the language of higher education instruction. An average GDP growth rate of 3.2% prior to 1990, however, was derided as the "Hindu rate of growth". While per capita incomes of India and South Korea were roughly at par in 1947, the latter was ten times the former by the 1980s.

Questions were rightly raised about the pre-1991 Indian economy: Were the large resources (equal to budgetary allocation for elementary schools) poured into English language universities for the urban elite justifiable in a country with 84% illiteracy rate?

The economic advantages latent in pre-liberalised India came to bloom with liberalisation. India's scientific and technical capacity spawned miracles. The software industry in America's Silicon Valley, dominated by Indians, reproduced several satellites in India. Western patients now routinely travel to India to be treated by India's brain and hip surgeons. Indian drug companies have more pending patent applications in the US than any other country (including the USA). Owing to its facility with the English language, India is the world's call centre capital.

A comparison between the Chinese and Indian model of economic growth is instructive. Chinese economic growth has been relatively more labour intensive compared to India. China spends a comparatively higher share of its budget on elementary education as opposed to India which spends more on higher education. With respect to textiles, while China competes on price, India competes on quality.

Essentially, while China has developed in the same sequence as most western countries (agriculture to low cost manufacturing, climbing up the value-added ladder, to hopefully burst into the nirvana of internationally tradable services), India (half of whose economy comprises of services, with agriculture and industry, each accounting for about a quarter each) is more akin to a middle-income country.

How is the foregoing analysis applicable to Uganda? Post-independence India's economic experience demolishes three shibboleths of President Yoweri Museveni. First, contrary to Movement dogma, it is possible for a country to democratise prior to having a sizable middle-class or majority literacy.

Secondly, India's post-liberalisation rapid economic growth in the absence of broad-based manufacturing-driven industrialisation teaches that destructive industrialisation such as the Mabira Project is not a necessary.

There is more than one way to skin the economic development cat. Thirdly, the argument that we can populate ourselves to economic prosperity (India and China have large populations; India and China are developing very fast; therefore, in order to achieve high development, a country needs a high population) is a fallacy. There is neither correlation nor causation between the magnitude of populations and the rate of economic growth of countries.

Proponents of this piffle mistake population size for population growth. Respectively, 2006-2007 figures of population size, population growth and GDP growth are for India (1.1 billion, 1.6%, 9.2%), China (1.3 billion, 0.6%, 10.7%) and Uganda (30 million, 3.6%, 5.3%), translating into rates of increase in living standards (economic growth rate less population growth rate) of 7.6, 10.1 and 1.7 percent respectively With respect to the ultimate goal of economic development (raising living standards), Uganda lags behind the other two countries not because they have bigger populations but because Uganda has a higher population growth rate..

The bigger question, though, is this: As a former British colony, with a decent higher education system (at least prior to recent changes), our economy is more akin to India than China. Yet we seem determined to follow a China-type model of development. Is this wise? Are not government policies (such as not teaching English until Primary Four) in a world where English is the coin of the globalised realm misguided?


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## Bushroda

*New careers that pay well now* 

*New lifestyles and much more money in the hands of consumers, has led to people willing to pay very well for services that were taken for granted earlier.* 

There are many traditional careers that people idolised and looked up to, but people would not opt for them because they did not pay well. With globalisation and the booming Indian economy the situation has changed drastically. New lifestyles and much more money in the hands of consumers, has led to people willing to pay very well for services that were taken for granted earlier. 

One prominent example is the teaching profession. Good schools today employ teachers of all subjects and skills, both co-curricular and extra-curricular, and are willing to pay them salaries that one could not have dreamt of just a few years ago. Online Tutors are already giving tuitions to foreign students sitting at home, and earning more than 10 to 15 dollars and hour.

People in the arts and creative fields are another example. Where traditionally artists would be on the fringes of society, in their khadi kurtas and by-two tea under the trees, today professionals in visual communication and allied fields command not only respectable salaries, they are ensured of steady and secure income. 

The same boom has hit the healthcare industry with paramedical professionals such as speech pathologists, optometrists, dialysis technicians, physiotherapists, etc. being given high salaries. Fitness experts are in demand, and so are psychological counsellors.

The list is endless. The significant point to note is that if you have the talent, inclination, interest and aptitude towards any field, howsoever obscure or unusual it may be, do not reject it under the assumption that you cannot make steady money in it. If you are good at the work, money is no longer a constraint. Do not live in the past and presume that those who chose such a career much earlier did not succeed financially, so you also will not. Have a vision for the next 40 years, and select a growing career that will take you to dizzy heights of success and rewards.


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## Bushroda

*India's demographic dividend* 
BBC
By Kaushik Basu 
Professor of economics, Cornell University 

*Nowadays no meeting on India seems complete without a reference to the coming "demographic dividend".* 

What really is this demographic dividend? 

The basic idea is straightforward enough. 

In the year 2004 India had a population of 1,080 million, of whom 672 million people were in the age-group 15 to 64 years. 

This is usually treated as the "working age population". 

Since outside of this age group very few people work, it is reasonable to think of the remainder, that is, 408 million people, as the "dependent population". 

A nation's "dependency ratio" is the ratio of the dependent population to the working-age population. In the case of India this turns out to be 0.6. 

On this score India does not look too different from many other developing countries. Bangladesh's dependency ratio is 0.7, Pakistan's 0.8, Brazil's 0.5. 

What is different about India is the prediction that it will see a sharp decline in this ratio over the next 30 years or so. This is what constitutes the demographic dividend for India. 

India's fertility rate - that is, the average number of children a woman expects to have in her life time - used to be 3.8 in 1990. 

This has fallen to 2.9 and is expected to fall further. Since women had high fertility earlier we now have a sizeable number of people in the age-group 0-15 years. 

*Benefits of demography* 

But since fertility is falling, some 10 or 15 years down the road, this bulge of young people would have moved into the working-age category. And, since, at that time, the relative number of children will be small (thanks to the lowered fertility), India's dependency ratio would be lower. 

It is expected that, in 2020, the average age of an Indian will be 29 years, compared to 37 for China and 48 for Japan; and, by 2030, India's dependency ratio should be just over 0.4. 

This can confer many benefits. 

First is the direct benefit of there being a rise in the relative number of bread-winners. 

Moreover, with fewer children being born, more women will now join the work force; so this can give a further fillip to the bread-winner ratio. 

A more indirect but vital benefit for the economy is the effect this can have on savings. 

*More women can work with fewer children being born *

Human beings save most during the working years of their lives. When they are children, they clearly consume more than they earn, and the situation is the same during old age. 

Hence, a decline in the nation's dependency ratio is usually associated with a rise in the average savings rate. 

India's savings rate as a percentage of GDP has been rising since 2003. It now stands at 33% which is comparable to the Asian super-performers, all of whom save at above 30%, with China saving at an astonishing near 40% rate. 

This savings growth is driven by improvements in the government's fiscal health and a sharp rise in corporate savings. 

But even if these factors disappear, the decline in the dependency ratio should enable India to hold its savings and investment rate above the 30% mark for the next 25 years. 

*Striking example*

This theory of demographic advantage has been challenged by some as just that - theory. 

One way of evaluating this in reality is to look at the actual experience of other nations. 

The most striking example of economic growth being spurred by demography is the case of Ireland. 

Ireland's legalisation of contraception in 1979 caused a decline in the birth rate, from 22 (per 1000 population) in 1980 to 13 in 1994. This caused a rapid decline in the dependency ratio. 

The phenomenal economic boom in Ireland thereafter, earning it the sobriquet "Celtic Tiger", is very likely founded in this fertility decline. (I am disinclined to concede ground to the competing view that it was caused by Pope John Paul II's visit to Ireland in 1979). 

*India's fertility rate has fallen* 

One has seen a similar sequence of changes in demographics and the economy in Japan in the 1950s and China in the 1980s. 

But even if this happened in some places, will it happen in India? 

My expectation is that India will get benefit from higher savings and investment rates and this will continue to fire India's high growth rate. 

Beyond that much will depend on how the nation performs on primary and secondary education (to make sure that the larger working-age population conferred by the demographic dividend are an educated lot) and the manufacturing sector (which is needed to create job opportunities for the larger labour force). 

What is important to remember is that the demographic dividend is a population bulge in the working-age category. 

Like a kill in a python's stomach it will eventually move up, causing a rise in the old-age dependency ratio some three to four decades from now. That is, every demographic dividend comes with an accompanying "demographic echo". 

It is in the nation's interest to reap as much as possible from the dividend so that it is robust enough not stymied later by the echo.


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## Bushroda

*The U.S.-India Business Council Hails 123 Progress *
PRNewswire-USNewswire, NY

WASHINGTON, July 25 -- The U.S.-India Business Council (USIBC) today applauded the substantial progress made by India and the U.S. toward a bilateral "123" Agreement to put in effect the Henry J. Hyde United States and India Peaceful Atomic Energy Promotion Act of 2006.

Passed by an overwhelmingly bipartisan majority of the U.S. Congress on December 9, 2006, the Hyde Act amended the Atomic Energy Act of 1954, authorizing U.S. companies to engage in civilian nuclear trade with India, subject to International Atomic Energy Agency safeguards.

Ron Somers, President of the U.S.-India Business Council, which spearheads U.S. Industry's advocacy campaign in favor of the deal, said, "Government officials on both sides who are working on this historic initiative deserve our deepest gratitude and respect for their vision and
statesmanship." 

Conclusion of the 123 Agreement and approval by the Congress would represent a major stride toward U.S.-India civil nuclear cooperation, which will create jobs and opportunities in India and across the U.S. India's nuclear industry has announced plans to expand from its current installed nuclear power capacity of 3,500 MW to 60,000 MW over the next 26 years. The expansion is valued at $150 billion.

India's rapidly expanding economy, growing at greater than 9% GDP, is confronting a major energy deficit. India's energy security challenge portends major collaborations with American companies. 

"The U.S.-India Business Council, a division of the 3 million-member strong U.S. Chamber of Commerce, formed the Coalition for Partnership with India shortly after the July 2005 visit to Washington of India's Prime Minister. The coalition serves as host for like-minded parties --
think-tanks, policy experts, Industry and the Indian American community in support of US-India cooperation.

The U.S.-India Business Council is based in Washington, DC, with offices in New York, Silicon Valley and New Delhi, and is today comprised of the largest 250 U.S. companies with trade interests and investments in India, joined by two dozen of India's premier global companies -- whose common objective is to expand trade and deepen commercial ties between the
United States and India.


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## Bushroda

*India - IOC plans Rs 2,500 cr unit*
25 Jul, 2007 - India 

Indian Oil Corporation (IOC), the countrys largest refiner of crude oil and marketer of petroleum products, is likely to set up a second paraxylene plant at one of its refineries at an investment of Rs 2,500 crore. 

The Fortune 500 company  it recently improved its rank to 135  has identified forward integration into petrochemicals as its next big business opportunity. It is already operating a Rs 5,000 crore paraxylene and purified terephthalic acid plant at its 12 million tonnes per annum (mtpa) refinery in Panipat. 

The paraxylene plant uses naphtha from the refinery and converts it into purified terephthalic acid, which is used to produce polymers. 

A Rs 6,300 crore naphtha cracker complex is also under construction at the refinery in Haryana. 

Besides, IOC is also planning around Rs 6,000 crore petrochemical complex at its upcoming 15 mtpa refinery in Paradip, Orissa. 

We are very bullish on the petrochemical sector. That is where we see our biggest business opportunities, said B M Bansal, business development director, IOC. 

He added that the new paraxylene plant could come up at any of the companys major refineries  Barauni, Panipat and Gujarat, among others. We are still in the process of studying the location, Bansal said. 

IOC, like the other auto fuel marketing companies Hindustan Petroleum and Bharat Petroleum, is also going slow on expanding its retail outlets in the country as a result of mounting losses from selling petrol and diesel at government-controlled prices. 

IOC currently loses around Rs 90 crore a day due to selling petrol, diesel, LPG and kerosene at government-controlled prices. It is selling petrol at Rs 5.90 a litre below the desired selling price. The revenue loss, referred to as under-recoveries, for diesel is Rs 4.80 a litre. 

Our auto fuel retail business is suffering and so we are looking to intergrate our refineries with the petrochemicals business, where the demand is expected to grow as the economy grows at a good pace, said a senior IOC official, who did not want to be named. 

The major petrochemical-producing companies in India are Reliance Industries and Indian Petrochemicals, which is in the process of being merged with Reliance. The two companies together control around 70 per cent of the market. 

Integrated refining and petrochem operations  with refinery output providing the feedstock for petrochem operations  ensure high margins. 

Either naphtha, produced in what is called the first cut of refining or natural gas is used as feedstock and is cracked (where the long hyrdocarbon chains are broken). This is then polymerised (hydrocarbon chains are re-arranged) to produce petrochemical products. 

There is a hige scope for increasing consumption of petrochem products in the country. Indias per capita consumption of polyester for example is 1.4 kg compared to 6.6 kg for China and 3.3 kg for the world.


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## Bushroda

*Infrastructure, India's most attractive sector: HSBC* 
2007-07-25 16:10:26 Source : Moneycontrol.com

Michael Preiss, Associate Director-Investment Advisory Group, HSBC said the Yen appreciation might prove to be a dampener for equities. 

He added that there is a big flush of money waiting to enter Indian markets and a lot of money coming in the markets may be borrowed money. 

Excerpts from CNBC-TV18s exclusive interview with Michael Preiss:

*Q: What will happen to global equity markets over the next month or so? Are we getting into a bit of a sticky patch now?*

A: Most probably, yes. It is a bit like a replay of what we saw in February. There was a question on whether the US housing issue and the subprime mortgage issue is just contained in the United States or whether it can even spread to other parts of the world. 

The market seems to imply that even in Europe, the cheap credit financing bubble is actually about to burst and a lot of these deals are actually going sour. So, to some extent that is actually putting pressure on global equities. 

The question is whether we should really go long or reduce exposure or whether to go short. Most people would agree that, at the moment, it is better to take some money off the table, go a little bit on the sideways and watch and see.

*Q: What is the call on India because we are only beginning to catch up and reports indicate there is a big flush of money waiting to come into the market?*

A: The words you used are right. There is a big flush of money. But let us not forget that a lot of that money is actually borrowed money. It is a lot of money done on leverage out of the carry trade, whether it is Swiss Francs or Japanese Yen. Both of these currencies are rising. 

So, the real question is whether we see risk aversion rising around the world. The economic fundamentals in India and many emerging markets are excellent. 

The only question is whether the financial market is ahead of itself. We see spreads widening and hence, basically people take a more cautious approach, and that could ripple through the system. 

That is why we had this big sell-off in the United States yesterday. People realised that there could be systematic risk out there. Hence, they scaled back some of these positions, and in addition to that, the Yen is rising. 

Rising Yen and widening spreads is exactly what you would like to see if you want to consider a short position in equities.

*Q: Pertaining to India though, what sort of queries do you get from your HNI clients and what sectors at this look the most attractive?*

A: Generally speaking, the most attractive sector as a long-term investor, is still infrastructure. Chidambaram said the same thing that India needs to spend more on infrastructure development. That is definitely a long-term investment trend where you cannot go wrong.

On the other hand, HSBC, and some old friends at Wall Street, always were underweight on India, irrespective of the fact that the Indian economy and the Indian market, performed very strongly. But the house view is still that investors, in a well-diversified portfolio, should have less assets in India. Their view hasnt really changed because of valuations.


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## Bushroda

*India adds a record 7 million mobile users in June*
John Ribeiro
IDG News Service
Computer World, Singapore
Updated: 26 Jul 2007

The boom in India's mobile telephony market continues, with the country adding a record 7.34 million new subscribers in June.

The monthly additions were the highest ever for the country, the Telecom Regulatory Authority of India (TRAI) said Wednesday, and followed the addition of 6.57 million new subscribers in May.

The total number of mobile subscribers in India at the end of June was 185.13 million, compared to 40 million fixed-line subscribers, according to the TRAI, based in Delhi. The country's overall teledensity -- the proportion of the population with access to a mobile or fixed-line phone -- crept up to 19.86% in June, from 19.26% at the end of May.

Fixed-line phones did not contribute to the increase in teledensity, however, as the number of fixed-line subscribers has been declining over the last few months.

Gartner forecast earlier this month that India would have more than 462 million mobile connections by 2011. New demand will come from rural areas, where service providers have started to offer low tariffs and handsets priced below $25, it said. Mobile phones are also filling gaps in the country's poorly developed fixed-line infrastructure.

Several phone vendors, including Nokia, have started to make phones in India. Nokia launched a mobile handset earlier this year designed for use by rural communities. Many people in rural areas are expected to use a community phone rather than have their own phone, because of the cost of the devices.


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## Bushroda

*Accelerating infrastructure growth*
26 Jul, 2007, 0450 hrs IST, 

The next ten years will be critically important for India. As it progresses towards becoming one of the largest economies in the world, its new passport to success will be infrastructure. The proposed plans spreading across railways, airports, ports, roads, water and power are extensive. And each area is demonstrating slow but steady progress. 

To begin with the arteries of the country, the colossal Indian Railways  already the worlds second largest rail network under a single management  is looking seriously at investing in dedicated freight corridors, new technologies and manufacturing facilities for rolling stock (locomotives and wagons), modern signaling to improve safety and line capacity, and modernising railway stations. The railways, with its remarkable performance turnaround to deliver over $3 billion in surplus driven by double-digit growth in freight traffic, have become the cynosure of all eyes globally. 

In aviation, competitive prices are helping the sector soar higher. Airline passenger traffic in India has been reporting robust growth and is expected to log among the highest growth worldwide over the next five years. Projections show that by 2020 Indian airports will handle a whopping 100 million passengers and 3.4 million tonnes of cargo per annum. 

As for intra-city commuters, public transportation is acquiring a new face. The first phase of the Delhi metro has already met with public appreciation and the second phase is well underway. 

A million cars were added to Indias roads last year and the roads in turn are expanding to accommodate them. With over 3.34 million kilometres, Indias road network is one of the largest in the world. And with the national highway development programme having been given top priority, this is just the beginning. 

The Planning Commission has estimated that India will require at least $320 billion in infrastructure investment over the next five years. This number, if anything, is a bare minimum as it falls below the benchmark 8% of GDP investment threshold. The 8% infrastructure investment rate coupled with 7-8% fiscal deficit necessitates, private investment for public infrastructure development in India which can be done under public-private partnerships (PPPs). 

For PPPs to be successful, the central and state governments will have to create policy frameworks for private investment, develop political will and mechanism to collect user charges, develop long-term debt and equity financing mechanisms, offer viability gap funding to generate bankable projects, and build project management capabilities in the public sector. 

It is easier to define policy frameworks for centrally-governed sectors such as telecom, national highways, civil aviation, and railways. Water and power are more complex as they involve the states as well. Alignment between state and central governments policies is essential as one should reinforce the other. 

Policy framework should be aligned with the end objective, otherwise it leads to unintended consequences. For example, currently an accelerated depreciation regime is in place to promote renewable energy projects. Under this regime, developers of renewable energy can take 80% depreciation of the asset during the first year, and 80% of the remaining during successive years. 

While this has encouraged renewable energy projects, especially wind, many such projects have not produced electricity at their target load factor as this regime does not reward projects that produce more renewable energy, it merely encourages initial capital expenditure. Indeed the average plant load factor for wind projects is less than 20%. An incentive programme, based on actual production of renewable energy is a better approach. A production credit-based approach will encourage projects that generate more power from renewable sources as opposed to treating all projects equal irrespective of actual plant output. 

Technology, user-friendly process, and front-line employee engagement are key to improving collection of end-user charges which chronically dogs power and water sectors. Andhra Pradesh and Delhi have clearly demonstrated that user fee collection can be improved if we make it easier for customers to pay, use tamper-proof metering technology, and make the front-line employees of the distribution company accountable for collection. This success story if replicated all over India will go a long way towards making private power projects bankable. 

Infrastructure projects need long development periods (3-7 years) and huge capital investments. Therefore, they become viable only in the long term. Today, India does not have more than 20-year treasury bonds. Therefore long-term debt financiers of infrastructure projects do not have suitable benchmarks; 20 or 25 year papers would become the benchmarks for long-term financiers for infrastructure projects and must be considered. 

Success of the Delhi Metro can be partly attributed to their strength of project management. However, in general, the public sector in India is short on project management talent and capacity. Training programmes should be instituted to build project management capabilities for public sector employees and the private sector should offer their expertise to the public sector. 

Today, there is a huge disparity in land prices paid to farmers and original owners and its market value after the infrastructure project is completed. A mechanism whereby the original landowners get a piece of the future price appreciation would go a long way towards alleviating this disparity which has now boiled over in public protests. 

We are embarking on a long journey to build adequate infrastructure for India. It is an opportunity and obligation to do that in a sustainable way. Thoughtfully done, environment-friendly technologies offer better life cycle costs even when they might seem a bit expensive upfront. We have to consider how to limit adverse environmental impact of building new power plants and other infrastructure as it is in our own best interest as well as that of the environment and society at large. 

If the journey of a thousand miles begins with a single step, then the story of Indias infrastructural renaissance has already found its beginning. The path to take it forward can be summed up in one phrase  invest and deliver.


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## Bushroda

*Cos wait for merchant airports*
26 Jul, 2007, 0209 hrs IST, TNN

NEW DELHI: After private roads and ports, the country is all set to get a number of private airports, also called merchant airports. Infrastructure developers such as Reliance Industries, Pragati Growth and Development and Anil Ambani-promoted Reliance Airport Developers have already shown interest in owning and operating airports across the country. Kolkata-based Pragati Growth and Development has identified land in Durgapur to develop such an airport. 

The techno-feasibility study is underway for the airport and it should be over in the next three to four months. For developing an airport in Durgapur we are getting support from the West Bengal government for acquiring land, Pragati managing director Raj Shekhar Agarwal said. 

For developing a basic airport with a terminal building and parking area requires an investment of Rs 100 crore. But an airport cant just be a standalone structure, hence it would have other facilities such as hotel, restaurant and recreational facilities, which would need an investment of at least Rs 1,000 crore, added Mr Agarwal. 

The rush for private airports is expected to start once the policy is framed. The merchant airport policy is likely to be finalised in the next two months. We would first get expertise in airport development on public-private partnership (PPP) model and then would go for a complete private airport, Reliance Airport Developers senior vice-president Tapan K Das said. 

Almost all major corporate houses in the country are interested in merchant airports. Initially they would go for a cargo airport and then for passengers, IDFC head for PPP initiative Sailesh Pathak said without naming companies. 

There is possibility that big retailers such as Bharti and Reliance would go for their own airport to secure their supply chain, Centre for Asia Pacific Aviations (CAPA) India head Kapil Kaul said. 

The domesic air cargo space is expected to grow at 10% in the next few years. To boost the sector, the ministry of civil aviation is planning to build an air cargo hub at Nagpur in Maharashtra.


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## Bushroda

*Learn from China*
26 Jul 2007, 0008 hrs IST

China has a sudden image problem. Its former top drug regulator was sentenced to death for accepting bribes to clear untested medicines. This was the result of a global scare over substandard Chinese goods, such as pet-food ingredients, contaminated toothpaste and unsafe antibiotics. 

Pet food contaminated with melamine and other compounds has been blamed for the sudden deaths of a number of dogs and cats in North America. The US has stopped Chinese toothpaste imports after adverse reports on consignments sent to Australia, the Dominican Republic and Panama. It has urged consumers not to buy Chinese fish. 

Earlier, the US banned Chinese goods such as garments for protectionist reasons. But this time the impulse is not merely economic as the alarm over Chinese drugs is not confined to the US. 

China's problem could be India's as well. India is the largest supplier of pharmaceutical products to the US. It sold drugs and ingredients worth $800 million to the US in 2006, against China's pharmaceuticals exports of $675 million in the same year. China provides Indian companies raw materials for antibiotics, some of which are exported. This is not only a concern for the USFDA but also for India's domestic consumers. India slaps anti-dumping duty on some Chinese chemicals; it should go further and probe their quality. 

The quality of drugs in India is already suspect. Medicines could cause harm by virtue of being spurious or irrational in terms of ingredient composition. Contamination is rampant in both allopathic and non-allopathic medicines. 

The Mashelkar report on the pharmaceuticals sector, in 2003, called for more effective regulation in all types of medicines. For an industry that ranks fourth in the world in terms of volume and 13th in terms of value, the regulatory framework leaves much to be desired. 

The Drugs and Cosmetics Act, 1940, would have to be continually expanded in scope to keep pace with technological changes and market realities. Are the existing laws and adminis-trative infrastructure adequate to deal with contaminated 
imports or the growing importance of molecular biology, stem cell research and clinical trials? 

State governments, such as Maharashtra, suffer from a shortage of drug inspectors. The number of personnel should be increased and their quality improved. 

A national drugs authority should combine the functions of the current regulators, the Central Drugs Standards Control Organisation and National Pharmaceuticals Pricing Authority. The current approach of separating issues of health and pricing does not make sense. Most Indians do not have health cover. Medicines account for 60 per cent of an individual's health spending. The task before the government is to ensure availability of quality medicines at affordable prices.


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## Bushroda

*Tata expected to bid for Ford marques*
By Joe Leahy in Mumbai
Financial Times, UK
Published: July 25 2007 22:13

Tata , Indias third-largest carmaker, is soon expected to appoint investment bankers to advise on its proposed bid for Fords Jaguar and Land Rover units, bankers in Mumbai said on Wednesday.

Mahindra & Mahindra, the countrys largest utility vehicle producer, is also expected to appoint an adviser in the coming weeks to join in the bidding contest for the UK luxury carmakers, one person familiar with the matter said. 

Speculation that the two companies would enter into an auction for the Ford units has driven shares of Tata Motors down 2.3 per cent and Mahindra down 2.8 per cent against a 2.6 per cent rise in the broader market. 

Investors are concerned that, while Land Rover might make a good fit for the Indian producers, loss-making Jaguar might not.

One part of the business makes sense for them and the other doesnt, said one banker in Mumbai. 

The Indian companies are expected to battle it out with private equity contenders for Jaguar and Land Rover. These are expected to include TPG Capital, Cerberus Capital Management, Ripplewood Holdings and One Equity Partners.

Ford is seeking to recoup about $3bn for the two companies compared with the $2.7bn it paid for Land Rover in 2000, auto executives say.

Analysts in Mumbai are split on the merits of the deal for Tata Motors. 

The company, which has made headlines globally with plans to make the worlds lowest-cost passenger vehicle, the one lakh car at a price of about $2,500, lacks a luxury brand. 

It has also been aggressively moving into overseas markets but mostly in developing countries. 

Some analysts see the acquisition of Land Rover and Jaguar as an opportunity for Tata to expand its portfolio into luxury vehicles while obtaining distribution networks in developed markets and access to more advanced technology.

By acquiring these companies, Tata Motors will not only have the greater access to the European markets but it will also have the technology to enter European markets, said Urmil Negandhi, an automotive analyst with Emkay, a Mumbai-based brokerage. 

Mahindra, meanwhile, has been seeking to become the first Indian carmaker to break into the US with its Scorpio sports utility vehicle. It would receive a substantial boost from Land Rovers sales networks. 

The company, which has a joint venture in India with Renault for its low-cost car the Logan, would also welcome greater access to European markets. 

Mr Negandhi said he expected the Tata and Mahindra industrial groups, with their large cashflows, to back any bid by their respective vehicle subsidiaries.


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## Bushroda

*Reforms racing down country roads*
26 Jul, 2007, 0314 hrs IST,Shishir Prasad, TNN

MUMBAI: India is shinning beyond Dalal Street, even in dusty small towns and distant villages. The rural folk are more than matching their urban cousins in spending as well as earning. So, after a shopping binge, dont feel guilty about how the money could have gone to improve the villages. 

On the contrary, dont stop  keep spending. For every Rs 100 you blow up, rural income rises by Rs 39. Feeling better? Well, all city slickers accused of being insensitive to the plight of the rural people now have hope. 

Future Capital Holdings chief economist Roopa Purushothaman and her teams recent research shows urban and rural India are too intertwined to be treated as two different worlds and when India does well, so does Bharat. 

The question has been doing the rounds in corporate boardrooms and government. There are many in policy circles who believe urban and rural are two different economies and they need different measures, says Purushothaman. The big message from the research is the two parts of India are really one. Policy makers just need to let the economy pull itself, she says. 

There might be something to this because the rural economy is increasingly looking urban. It too has popped the services pill. While agriculture continues to remain the bulk of the economy, it is no longer as powerful. It is important to the extent that 73% of the rural population is still stuck in farm jobs. 

Unfortunately, agriculture sector no longer creates wealth. There are more wealth and jobs being created in manufacturing, construction, restaurants, hotels and trade  chemists, for example  than in agriculture. The reason why it doesnt appear as powerful is there are far less number of people to speak for the non-farm sector. Just 27% of the rural workforce is employed in non-farm jobs. 

The one large change in rural economy is wage parity with urban centres in some sectors. People employed in trade 
and manufacturing now earn wages that are on a par with urban centres. There are sectors such as utilities, construction and transport where the rural areas still lag behind, but the improved performance in such sectors is also responsible for closing the gap between the spending power of the two parts of the economy. 

The research shows during 2000-05, the rural spending grew at 8% while urban Indias spending grew only 4%. In 
absolute terms, urban households spend twice the amount that a rural household does. This will remain, but we are interested in what is changing at the margins, and there it is clear that rural India is growing much faster, says Purushothaman. 

The counter-intuitive bit is that those at the lower income levels in rural areas are closing the gap with their urban counterparts at a much faster rate. So, those in low-income groups in urban areas are 
facing a greater inequality than the same strata of people in rural areas. This is not surprising because little investment has been made in improving the quality of urban infrastructure. 

Our research shows that over the last 20 years, urbanisation has actually declined in the country. India clearly has a model different from Chinas. China is building new urban centres while India is pushing production processes to rural areas, she says. The rural rich are not faring that well when compared to the urban rich  for the time being. 

The changes have largely been possible because the supply chain of goods and services is now spreading nationwide. Since urban headends of the supply chain are now taking more rupees of consumption, a little over a third of the rupees are ending up as income for the rural population. 

There is good cheer in this research because if all the economics indeed captures reality, it clearly means people dont have to leave the towns and head to the city to board the gravy train. They can stay right where they are and, pretty soon, the train will stop at a station close by.


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## Bushroda

*Delhi Metro logs record gross revenue* 
Staff Reporter 

*It earned Rs. 84.61 lakh and ferried 7.24 passengers on Monday * 

--------------------------------------------------------------------------------
*The Metro also recorded the highest number of smart card users at 2.81 lakh

Highest rider-ship on the Metro was 7.36 lakh recorded on Saturday*
--------------------------------------------------------------------------------

NEW DELHI: Even as the Capitals citizens continue to be harassed by the acute shortage of buses on the roads, the Delhi Metro has walked away with a record earning from sale of tokens and smart cards. The Metro railway, which ferried 7.24 lakh commuters on Monday, had recorded a gross revenue of Rs. 84.61 lakh, the highest so far. 

In a statement, a DMRC official said the highest rider-ship on the Metro was 7.36 lakh, recorded on Saturday when the gross revenue on that day was Rs. 81.6 lakh. 

On Monday, 2.24 lakh commuters used Line 1 (Shahdara  Rithala), 2.20 lakh used Line 2 (Central Secretariat  Vishwavidyalaya) and 2.79 lakh used Line 3 (Indraprastha  Dwarka Sector 9). 

The Metro also recorded the highest number of smart card users at 2.81 lakh.

On an average, 2 lakh commuters use smart cards every day. Total token sales on Monday showed an increase of 22 per cent; from 3.62 lakh it went up to 4.42 lakh, the official said. The top ten stations in terms of earning were Rajiv Chowk, Shahdara, Vishwavidyalaya (Delhi University), Chandni Chowk, Central Secretariat, New Delhi, Welcome, Uttam Nagar (East), Barakhamba Road and Rohini (West). Additional ticket counters were opened at 12 stations to handle the additional rush.


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## Bushroda

*Intellectual power of India takes hold in UK*
*In the first of a week-long series on the new Anglo-Indian business relationship, our correspondent charts the passage from India of increasingly ambitious companies*

Ashling O&#8217;Connor 
The Times

In a drab 1960s office block on the unfashionable Pinner Road in Harrow, North London, a dozen or so lab technicians in white coats are poring over clinical research for Intas Pharmaceuticals. 

The $150 million company was set up more than 35 years ago in the western Indian city of Ahmedabad by Hashmukh Chudgar, but it spread its wings into the British market five years ago at the behest of Nimish, Binish and Urmish, the founder&#8217;s sons. 

Their office is unremarkable, hidden away in a grey world of semidetached mock-Tudor homes, a parade of shops and careworn commuters trooping on and off the Metropolitan Line. 

But Intas is not only extraordinary in itself as the largest contract manufacturer by volume of generic drugs to the EU. The Chudgar family business in sprawling suburbia also represents a creeping counter-offensive that promises to transform the British economy: Indian insourcing. 

The Anglo-Indian relationship is still so dominated by memories of Empire &#8211; the novels of E. M. Forster and Rudyard Kipling, television series such as The Jewel in the Crown, not to mention the cricket &#8211; that it is all too easy to see the ties between Britain and India through the prism of the past. 

In the first wave of immigration, they came seeking a better life as shopkeepers, traders and restaurateurs. Today Indians are arriving as bankers, scientists, PhD students and software engineers. 

Seventy miles from Harrow, to the west of the Fens, India&#8217;s biggest software services provider has taken over the old Pearl Assurance call centre on the edge of Peterborough, in an even larger concentration of Indian capital in unexpected quarters. From its &#8220;innovation lab&#8221;, Tata Consultancy Services (TCS) provides software solutions for a host of blue-chip companies, including British Airways, Virgin Atlantic, National Grid, Welsh Water, United Biscuits, Norwich Union and AXA. 

More than a thousand employees, a third of whom are Indian, work on high-end technology projects for clients, including a leading media company that is aiming to rival the dominant digital television provider. 

The &#163;5 million facility has 18 British companies in the pipeline and a potential order book value of about &#163;120 million. 

*Mike Scott, the mathematician who heads the centre, has spent almost his entire career with British Telecom. He is an evangelical convert to the Indian way of doing business and, happily, his old employer is now TCS&#8217;s biggest customer. &#8220;There is a massive intellectual power in India,&#8221; he said. &#8220;It is amazing how bright and well trained they are. I saw nothing like it at BT.&#8221; *

As India bids for superpower status, it is having a transforming effect on the British economy. The singular evidence of this was Tata Steel&#8217;s successful &#163;6.7 billion bid for the remnants of British Steel completed this year in a deal that changed all foreign preconceptions of Indian enterprise. 

This new view of India&#8217;s purchasing power was reinforced a few months later by the &#163;600 million acquisition of Whyte & Mackay, the world&#8217;s fourth-largest whisky distiller, by Vijay Mallya&#8217;s UB Group. 

But these deals tell only part of the story. Below the banner of big headlines, Indian businesses are making inroads in a cross section of industries from healthcare to auto components and software design to film production. 

They already own some of the most British of institutions, from steel furnaces in Doncaster to the maker of the Queen&#8217;s favourite towels, and are casting their acquisitive eyes over genteel favourites such as Jaguar. Yet the process of Indian inward investment into the UK has only just begun because the Indian outward journey is still in its infancy. 

India is the future workforce of the world: half the 1.1 billion population is under the age of 25, and its 14 million-strong pool of young professionals, replenished by 2.5 million graduates a year, is nearly twice the size of both China&#8217;s and America&#8217;s. By 2025 India will eclipse Germany as the world&#8217;s fifth-largest consumer, McKinsey, the consultancy firm, predicts. 

India&#8217;s invisible hand has been at work in British business for some time, but because of a comfortable bilateral relationship, rooted in the shared &#8211; albeit uneven &#8211; experience of imperialism, it is only just coming to notice. 

Think London, the foreign direct investment agency for the capital, says that India is the second-largest investor by projects after the US. Sixteen per cent of the &#163;52 billion that flows into London each year comes from India, creating 634 jobs from 19 projects last year. These figures are impressive even before you consider that they do not include the Corus and Whyte & Mackay acquisitions. And they are symptomatic of a newly confident and capital-rich India, which has entered the global market seemingly from nowhere. 

Before 2000, an Indian company had never made a significant overseas acquisition. However, according to McKinsey, Indian companies bought more than 100 foreign businesses during 2005 for $4.5 billion. 

&#8220;Once they have taken the decision to move out of India, the world is their next market,&#8221; Kevin Gold, managing partner at the London law firm Mischon de Reya, said. 

Indian entrepreneurs, freed from the capital constraints of their predecessors, are suddenly taking flight from their domestic markets. London is often their first stop and is increasingly a bridgehead to continental Europe. 

&#8220;India is generating newfound wealth,&#8221; Sunil Dwivedi, head of India at Think London, said. &#8220;It wants a world platform and London is the natural choice because of historical and language connections. We have seen this coming for at least three years.&#8221; 

This year India&#8217;s total outbound M&A investment may exceed the $30 billion target for inbound investment, according to Ernst & Young and the Federation of Indian Chambers of Commerce and Industry. Investment by Indian companies into the UK has already eclipsed investment into India by British companies. 

&#8220;There is an amazing reversal in the tides of capital flows,&#8221; Naina Lal Kidwai, HSBC India chief executive and the first Indian woman to graduate from Harvard Business School, said. &#8220;You don&#8217;t see a Corus happening every day, but the trend continues. Indian companies see London as a gateway to Europe.&#8221; Small to medium-sized businesses represent the fastest-growing sector, particularly in private wealth management, retail banking and reinsurance. There are more than 10,000 Indian-owned businesses in London, employing 49,000 people. &#8220;If the Tatas can do it, smaller companies think they can do it, too,&#8221; said Anita Nandi, head of the City of London&#8217;s India office, which opened in Bombay in May to foster bilateral trade and investment. 

&#8220;Five years ago, they wouldn&#8217;t even have thought of getting out of their rural markets,&#8221; she said. &#8220;Technology means you can be sitting in a village in Madhya Pradesh but still doing business in London.&#8221; In pockets around Britain, thousands of Indian companies are quietly thriving in an amenable corporate environment where language and law are all terribly familiar. 

&#8220;The UK values people who come to live in Britain on the work they do and not their colour,&#8221; said Lord Paul, the Indian-born industrialist who is one of Britain&#8217;s richest men 40 years after he settled in London. &#8220;Any immigrant feels comfortable here, and Britain has gained because of its openness.&#8221; 

Behind the complaints about white-collar jobs lost to sweat shops on the sub-continent, Indian companies are making a significant contribution to the Government&#8217;s coffers and advances in science and education. 

TCS already generates about $800 million of its $4 billion global turnover from the UK, where it is reporting year-on-year revenue growth of 45 per cent. Employing 4,000 people in the UK, its economic impact is tangible. The idea that it is draining money from the British economy is outdated. 

Much like the East India Company believed that it would have a civilising impact on India, Indian companies believe that they can import a superior technical knowledge to make Britain a more efficient place. 

&#8220;In the narrow context, people see the offshoring. They do not see the full impact of our investment &#8211; the tax we pay, the academic institutions we support,&#8221; A. S. Lakshmi, TCS&#8217;s UK head, said. &#8220;But I think all the major political parties recognise we bring competitiveness to British companies. We help them become nimbler and open their eyes to new opportunities.&#8221; 

The empire is striking back, but the process of reverse colonialism is just getting started in the remaking of corporate Britain. 

*Indian firms doing business in Britain*

Tata (steel, IT, hotels, tea) 
Wockhardt (healthcare) 
UB Group (spirits) 
ICICI (financial services) 
Bharat Forge (auto components) 
HCL (outsourcing) 
Ranbaxy (pharmaceuticals) 
Apeejay Surrendra (tea) 
Monocon (refractories) 
Cognizant (IT) 
UTV (film) 
Godrej (consumer goods) 
Kotak Mahindra (broking) 
Reliance (life sciences, telecoms) 

*Onwards, upwards*

&#8212; India is the second-fastest-growing economy after China. GDP growth in first quarter was 9.1 per cent. Full-year growth is expected to be at its strongest in 20 years 

&#8212; India has 36 dollar billionaires and 83,000 dollar millionaires. It also has more than 200 million people who survive on less than a dollar a day 

&#8212; Bombay&#8217;s unofficial population is 20 million. It is forecast to eclipse Tokyo as the world&#8217;s most-populous city by 2020 

&#8212; *Per capita income in India will rise 26 per cent, from $831 to $1,021, this fiscal year, moving it into the category of lower- middle-income countries, as designated by the World Bank* 

&#8212; The UK is India&#8217;s fourth-largest trading partner behind the US, China and Belgium 

&#8212; India represents 16 per cent of the flow of foreign direct investment into London 

&#8212; There are 1.3 million people of Indian origin in Britain; 437,000 live in London. The capital is home to 173,000 Indian citizens 

&#8212; There are 160 multinational Indian companies in London. More than 10,000 Indian-owned businesses in the capital generated a combined turnover of $14.4 billion, or 5 per cent of the city's economy. India is the second-largest foreign creator of jobs in the UK, after the US


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## Bushroda

*Vision 2020, that's Kalam's parting shot for MPs*
24 Jul, 2007, 0223 hrs IST, TNN

NEW DELHI: In his farewell address to MPs, President APJ Abdul Kalam on Monday called upon parliamentarians to evolve a vision to transform the nation into a developed country by the 2020. 

Maintaining that the institution of Parliament faced greater challenges than ever before, especially on matters related to human development and governance, Mr Kalam told the MPs to evolve an energy independence bill for the nation, just like the Constitution was first drawn up. 

The 21st century parliamentary vision for India needs to have a global and long term perspective...for transforming India into a developed country by 2020 with the national prosperity index as a measure, and acquire energy independence before 2030, he told his audience, comprising the prime minister, Speaker, Cabinet ministers and senior leaders, at the Central Hall of the Parliament. 

Elaborating his concept of energy independence bill, Mr Kalam said it would be a three dimensional approach for energy choice towards realising clean planet earth. He also asked the Parliament to adopt a vision resolution. Adopt a resolution that India will be transformed into a safe, prosperous, happy and socio-economically developed nation before the year 2020 using national prosperity index (NPI) as a measure. 

Underlining the NPI concept, Mr Kalam said: While we are happy that our economy is in the ascent phase and our GDP is growing at nearly 9% per annum, it is evident that economic growth is not fully reflected in the quality of life of a large number of people, particularly in rural areas and even in urban areas. Hence, we have evolved what is called a national prosperity index which is a summation of (a) annual growth rate of GDP , plus (b) improvement in quality of life of the people, particularly those living below the poverty line and (c) the adoption of a value system derived from our civilisational heritage in every walk of life which is unique to India. 

Mr Kalam then spelt out his 10-point vision for a distinctive profile of India by the year 2020. A nation where the rural and urban divide has reduced to a thin line; where there is an equitable distribution and adequate access to energy and quality water; where agriculture, industry and service sector work together; where education with a value system is not denied to any meritorious candidates because of discrimination.

He also stressed on the need to provide the best education, healthcare for all, a transparent, responsive and corruption-free governance, eradication of poverty, illiteracy and crimes against women, an environment devoid of terrorism in a nation that is one of the best places to live in and is proud of its leadership. 

To achieve this distinctive profile of India, Mr Kalam called for integrated action in five key areas  agriculture & food processing, education & healthcare, infrastructure, information and communication technology and self-reliance in critical technologies  where India has a core competence. 

While the country could be rightly proud of its leadership and its many achievements over the past 60 years, we cannot afford to rest content with the past achievements and we have to march in tune with the challenges of the 21st century. The leadership of the nation has to radiate confidence in our people. he said.


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## Bushroda

*10 ways to improve India's healthcare system*
Baltej Maini 
July 23, 2007

I recently spent nearly three months in India -- traveling, meeting people and examining the vast changes that have altered the landscape that was India.

It was after nearly thirty-five years that I stayed more than two weeks in India, and I had the opportunity to view the many changes that had occurred, not through the eyes of a 'tourist', but through the eyes of an experienced healthcare executive who felt and saw the tremendous accomplishments that have been made.

The Metro commuter rail system, the eight-lane divided highway from the airport to the city of New Delhi, the construction of numerous flyovers to facilitate traffic, the evolution of high-rise buildings, call centres and shopping malls in Gurgaon, the emergence of Noida as an extension of the capital, and the presence of technology centres in Bangalore -- all signs of a robust and thriving economy.

What was striking is the frenzy with which hospitals are being built, ostensibly to meet the demands of an expanding middle class population that now can afford the best in healthcare.

Not a day goes by that a new healthcare venture is not announced, either in partnership with a foreign company or by an all Indian business house.

But behind all this glitter there are some ominous signs of the ills that pervade the health care system. A coherent and sustainable plan that addresses the healthcare needs of the masses is strikingly absent. There are no national standards by which physicians, nurses, pharmacists and hospitals are trained.

Financial incentives between specialists and hospitals from referring doctors govern the way a substantial proportion of patients are treated. Guidelines and protocols for the management of disease, including the length of stay, are virtually non-existent and the ability of hospitals to determine the appropriateness of medical and surgical therapy seems years away. 

Quality management remains an elusive dream; it is not sufficient to know the mortality rate of a surgical operation; one must know if the care was timely and appropriate. Judging from the incredible advances that have been made in information technology in India, it is noteworthy that these advances have not been applied on a large scale to healthcare.

The lack of an Electronic Health Record (EHR) prevents the development of transparency throughout the healthcare system. And compounding all this is the widespread use of spurious drugs that interfere with proper treatment. Above all, there is not enough historical evidence of what it costs for the treatment of a particular condition for insurers to adequately set their premiums.

So what is the remedy for all that ails the healthcare system? A few suggestions are timely and should be considered:

1. Develop and implement national standards for examination by which doctors, nurses and pharmacists are able to practice and get employment.

2. Rapidly develop and implement national accreditation of hospitals; those that do not comply would not get paid by insurance companies. However, a performance incentive plan that targets specific treatment parameters would be a useful adjunct.

3. Obtain proposals from private insurance companies and the government on ways to provide medical insurance coverage to the population at large and execute the strategy. It is healthy to have competition in healthcare, and provide health insurance to the millions who cannot afford it.

4. Utilise and apply medical information systems that encourage the use of evidence-based medicine, guidelines and protocols as well as electronic prescribing in inpatient and outpatient settings. This is possible though the implementation of the EHR; this will, in time, encourage healthcare data collection, transparency, quality management, patient safety, efficiency, efficacy and appropriateness of care.

5. Perverse incentives between specialists, hospitals, imaging and diagnostic centres on the one hand and referring physicians on the other need be removed and a level of clarity needs to be introduced.

6. Develop multi-specialty group practices that have their incentives aligned with those of hospitals and payers. It is much easier to teach the techniques of sophisticated medical care to a group of employed physicians than it is to physicians as a whole. It is also important that doctors are paid adequately for what they do.

7. Encourage business schools to develop executive training programmes in healthcare, which will effectively reduce the talent gap for leadership in this area.

8. Revise the curriculum in medical, nursing, pharmacy and other schools that train healthcare professionals, so that they too are trained in the new paradigm.

9. Develop partnerships between the public and private sectors that design newer ways to deliver healthcare. An example of this would include outpatient radiology and diagnostic testing centres. 

10. The government should appoint a commission which makes recommendations for the healthcare system and monitors its performance.

The present system (and its escalating costs) is not sustainable due to its inefficiency and a lack of aligned incentives for improving performance. A country that has leapfrogged from rotary phones to a ubiquitous presence of mobile phones must make a similar change in healthcare.

It will not be easy and it will not be inexpensive. But it has been done in other parts of the world before and it can be done here too. The potential to create the best healthcare system in the world exists. It is time to commence the debate, develop a plan and execute it.


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## Bushroda

*India gives assurance on iron ore and coal, Mittal says*
By Pratik Parija and Manash Goswami Bloomberg News
Published: July 25, 2007

NEW DELHI: Arcelor Mittal has said it received an assurance from the Indian government for supplies of iron ore and coal for plants planned in the South Asian nation, enabling the world's biggest steelmaker to advance ventures worth $18 billion.

Lakshmi Mittal, chief executive of the company, is meeting ministers of Orissa and Jharkhand to secure materials for the 10 million-ton plants planned in each of the two states. Mittal did not say when work would begin.

Delays in awarding mining permits and land have undermined Indian efforts to attract investment, leaving the nation short of raw materials needed to sustain the world's second-fastest-growing economy after China. Work on a $12 billion mill proposed by Posco will start in October, six months later than planned. The accord for the project was signed in June 2005.

"I'm confident of getting coal, iron ore and land," Mittal said. "There's definitely an assurance from the government. I am hopeful we'll get support from the Jharkhand and Orissa state governments."

The plants would each need 600 million metric tons of iron ore over three decades, Mittal said. The company is preparing a feasibility report on the ventures, he said.

Mittal in October 2005 announced a $9 billion venture in Jharkhand, which neighbors Orissa. The progress on the project has been slow, Mittal said a year ago. Mittal signed an accord with Orissa in December for a similar-sized venture.

"We're 100 percent committed to the two projects," Mittal said Wednesday.

The states Jharkhand, Orissa and Chhattisgarh account for 70 percent of the nation's coal reserves and 55 percent of its iron ore, according to McKinsey.

Mittal also said his personally-funded energy ventures in India were on course with no delays or cost overruns. In northern India, a refinery being built jointly with Hindustan Petroleum, the second-biggest Indian state refiner, is on schedule, Mittal said. Construction of the plant is expected to be completed by September 2010, Hindustan Petroleum said last year.

"We have had four foundation stone laying ceremonies for the refinery project, we want it now to take off," Mittal said. "Going by the speed at which the project is being pursued, there should not be any delay in implementing it, or any increase in the cost."

Premji to keep reins of Wipro

The Indian billionaire Azim Premji, who transformed Wipro from a vegetable-oils maker into one of the largest Indian computer services providers, has no plans as yet to pass the reins to his son Rishad, who lacks experience.

Wipro's board has a succession plan involving professional managers, Premji, the chairman and controlling shareholder of Wipro, said Tuesday. "We have the roughest and toughest competition, and the most sophisticated competition in the world," Premji said. "He's just too young and too inexperienced."

Premji, 62, took charge of Wipro when he was 21, following his father's death, and transformed a $2 million company into a global technology group with $2.5 billion in sales and 72,000 employees. Rishad, 31, last week became a business development manager in the financial services unit.


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## Bushroda

*ArcelorMittal plans massive India investment * 
Times of Oman
Thursday, July 26, 2007

NEW DELHI  Global magnate Lakshmi Mittal is looking to build two steel plants in India for about 18 billion dollars which would be the largest ever foreign investment in the country. 

The investment by ArcelorMittal would eclipse the 12-billion-dollar steel plant South Korean rival POSCO plans to build in eastern Orissa state, the newspaper reports said. 

The plans were announced after a meeting on Thursday between Mittal and India's Steel Minister Ram Vilas Paswan here, the Press Trust of India said. 

But "we have to have raw material linkages, land and other things in place" for the projects to go ahead, Mittal was quoted as saying after the meeting. 

Last December, ArcelorMittal, the world's biggest steelmaker, signed an 8.7-billion-dollar project with the Orissa government to build a 12-metric- tonne capacity steel plant in the resource-rich eastern Indian state. 

Now, ArcelorMittal, which has no manufacturing facilities in India, says it will also build a plant in eastern Jharkhand state, the reports said. 

The plants would have combined capacity of 24 million tonnes, the Press Trust of India said. 

Executives from ArcelorMittal have been in touch with state officials in Orissa and Jharkhand over the past year, said the Mint business daily. 

ArcelorMittal, which controls 10 percent of global steel production, has asked the government to speed up allocation of captive mines for its projects. 

Mittal's plans highlights the race among global steel giants to secure the supply of key materials, such as iron ore, to feed a growing world economy. 

India's Tata Steel Ltd, which earlier this year bought British steelmaker Corus, is also expanding operations domestically, and plans to increase its domestic production to about 20 million tonnes by 2015.


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## Bushroda

*Marketing India to the world*
2007-07-26 15:05:16 
Source : Moneycontrol.com

A strong rupee, a sensex bounding past 15000, Indian companies making headline grabbing global acquisitions, the insidious influence of Indian films - these are the parts that add up to the whole - ie. Brand India and its rising profile. Cashing in on the timing are two new Brand India campaigns - the tourism ministry's "India Now" campaign and the "India at 60" campaign of the CII and the US India Business Council. 

It's a potent mix of symbols - Shilpa Shetty - India's latest, de facto cultural ambassador and the Taj - the desi wonder of the world floating down the Thames. Both were playing their part in Brand India's latest marketing campaign. The purpose: to flag off the 'India Now' campaign - an initiative by the Mayor of London, supported by the Tourism Ministry of India. India Now may be preaching to the converted - but could still find first impressions hard to crack. As India is still being seen as the land of noise, colour and spicy food...all of which is true. Only, now there are more things to advertise!

Actress, Shilpa Shetty told CNBC-TV18, "I'm here to encourage the event and it's obviously going to make the ties between India and London stronger.

From film premieres, screenings to art, theatre, culture, food and workshops, this three-month long festival was a chance for London to leverage India's soft power to encourage bilateral trade and tourism. It was also a chance for the Indian tourism ministry to publicise its five year old Incredible India campaign. It spent Rs 5 crore telling Londoners "India was closer than they thought" - but the campaign is still work in progress.

Secretary, Ministry of Tourism, Govt of India, Dr Christy Fernandez says, "Tourism is not confined to casual visitors - there are serious visitors looking for opportunity as well - the way the mayor of London has put the whole thing together, also shows that they mean serious business between the two countries - major trade players are also participating and the general ambience and interest created over three months in a place like London cannot go unnoticed by the trade and industry."

Over the last five years, the Incredible India account has grown from a Rs 20 crore to a Rs 150 crore one - with agencies like O&M, Grey Worldwide, RK Swamy BBDO all doing time on it. It is now with Ashok Creatives, the government owned specialist tourism agency. But the brief has been consistent: to present India as an exotic tourist destination. 

The first campaign that truly marketed our economic confidence to the rising Indian consumer class was the Rs 200 crore 'India Shining' campaign that was a multimedia blitzkrieg. Created by Grey Worldwide for the NDA government in October 2003, India Shining may be remembered as the story of the NDA's failed bid to retain power in the 2004 Lok Sabha elections. The man behind that campaign believes that brand India needs to be marketed by a single entity.

Ex-National Creative Director, Grey Worldwide, Prathap Suthan says, "It needs to be the job of one group - whichever the body is - worth the long run - we need to invest in that. We cannot have smaller campaigns coming in from the side - you could come with a festival of lights - take Diwali - it has to sign up with the mother brand - if every communication were to align itself with that one feeling - that's going to give it the push to become what we need."

Executive Director, Tata Sons, R Gopalakrishnan explains, "There's a circularity - has Indian built Tata or Tata built India - it's not just us as there are other companies like Mahindra or Infosys as well. I feel very proud as an Indian citizen compared to 15 years ago when I went to the passport office. Now when I go to London, they say 'oh you're from Tata is that the one that bought Corus?' There is an instant recognition, if you go to San Francisco they know if you are from TCS, and the other day it was lovely to see the Indian flag flying high at Taj Boston."

But marketing India beyond tourism need not be the government's mission. Case in point - the Rs 17 crore 'India Everywhere' campaign, spearheaded by Infosys' Nandan Nilekani, orchestrated by India Brand Equity Foundation and supported by a dozen Indian companies. It was unveiled before the world's business leaders in Davos last year. While, in the past, Brand India may have led investors home, it's homegrown brands that are now taking India to the world.

R Gopalakrishnan adds, "I wish I could connect directly any advertising or any PR effort to any outcome. If I suggest that Corus happened because of brand building efforts by India, it would not be very plausible. It's also arguable - did India get built up by Corus or Corus get built up by India - there is a circularity in that relationship. I would certainly say that for a large number of Indian business houses, including the Tatas, it's very helpful for investors round the world to think of India as an investment-friendly place and those campaigns do help in that respect." 

Come September, the 'India at 60' campaign will be unveiled by the CII and the US India Business Council. The changing tone of our communication - from Indian exotica to earnings reports - is dictated by the economy's needs. And the face brand India presents to the world may be governed increasingly by where corporate India looks to for growth.


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## Bushroda

*Maruti's Profit Soars to Record on SX4, Swift Models*
By Santanu Choudhury

July 26 (Bloomberg) -- Maruti Udyog Ltd., maker of half the cars sold in India, reported record profit that exceeded analyst estimates in the first quarter as it introduced new models and a stronger currency cut import costs. 

Net income in the three months ended June 30 rose 35 percent to 4.99 billion rupees ($124 million), or 17.29 rupees a share, from 3.7 billion rupees, or 12.79 rupees, a year earlier, the New Delhi-based unit of Suzuki Motor Corp. said. That beat the 3.7 billion rupees median estimate in a Bloomberg survey of 16 analysts. Sales gained 26 percent to 39.14 billion rupees. 

Maruti introduced five new models in the past year to attract buyers and counter higher loan rates in India, where 80 percent of vehicles are bought on credit. General Motors Corp. and other carmakers are spending more than $3 billion to expand in the country as economic growth may help car sales triple to 3 million units a year by 2012 in India. 

``High interest rates are a temporary setback for automobile companies,'' said A.K. Sridhar, who helps manage the equivalent of $10 billion as chief executive officer of UTI Asset Management Co. in Mumbai. ``Sales should pick up from the third quarter,'' said Sridhar, who owns shares of Maruti. 

It's the 16th consecutive quarter of growth in profit for the maker of Esteem sedans, Gypsy sport-utility vehicles and Omni vans. 

Shares of Maruti rose 3.9 percent to 841 rupees at the close of trading on the Bombay Stock Exchange. The stock rose as much as 6 percent after the earnings were detailed. 

*Interest Rates *

India's central bank, scheduled to release its next monetary policy statement on July 31, has raised benchmark interest rates to control inflation in the world's second- fastest growing major economy. 

State Bank of India Ltd. and ICICI Bank Ltd., India's two- largest lenders, have tied up with the carmaker to offer loans to customers in towns and villages, where credit wasn't previously available, to boost vehicle sales. 

Maruti introduced the SX4 in May, its first new sedan in eight years, targeting buyers wanting more features such as air bags and leather seats. In January, Maruti started selling its first diesel car, the Swift, and a month before that it unveiled the Zen Estilo hatchback. 

That helped the automaker increase sales by 17 percent to 169,669 vehicles in the first quarter. 

``Car sales will continue to grow and Maruti will be one of its major beneficiaries,'' Amar Ambani, analyst at Mumbai-based brokerage Indiainfoline Ltd., said in a phone interview. 

Investment Plan 

The carmaker, 54 percent owned by Suzuki, will invest as much as $2 billion by 2012 to make new cars and expand capacity. That may help it take on competition from minicars of General Motors and hatchbacks from Volkswagen AG and Nissan Motor Co. 

The company's board today approved a proposal to change its name to Maruti Suzuki India Ltd. The new name is subject to approval from shareholders and the registrar of companies. 

``This international dimension in the company's name will help Maruti as it expands its role in global markets,'' the company said in a release. 

The strengthening of the Indian currency against the Japanese yen and the U.S. dollar helped Maruti cut the cost of imports, analysts said. The rupee gained 12 percent against the yen and 6.8 percent against the dollar in the last quarter. 

``They had a currency gain as the weaker yen made their raw material imports less costlier,'' said S. Ramnath, an analyst at Mumbai-based SSKI Securities Pvt. 

Profit was also bolstered by revenue from businesses other than manufacturing. The company's other income gained 56 percent to 2.23 billion rupees, Maruti said, without giving details. 

Spending on raw materials increased 30 percent to 31 billion rupees.


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## Bushroda

*Australia keen on selling uranium to India*
Posted July 26th, 2007
By Neena Bhandari, IANS

Sydney : Australia may begin selling uranium to India if a submission by Foreign Affairs Minister Alexander Downer is approved by the federal cabinet, a move that comes soon after India and the US finalised details of their nuclear pact.

The thorn so far has been the fact that India has not been a signatory to the international Nuclear Non-Proliferation Treaty. But with India's economic rise spearheading energy demand, Australia seems to be set to capitalise on it.

The Australian newspaper quoted government sources as saying that the cabinet's National Security Committee would shortly consider Downer's submission, which has the backing of Prime Minister John Howard.

"The prime minister is reported to have told colleagues that the public cannot understand why Australia exports uranium to China but refuses to export it to India," the newspaper said.

Australia plans to negotiate a nuclear safeguards agreement with India, governing the uses for Australian uranium only for its peaceful nuclear energy programme.

India has had an impeccable record of never having proliferated nuclear technology unlike some of its neighbours. The burgeoning economy is highly reliant on energy and India needs sustained supplies of uranium.

Greg Sheridan, one of the most influential foreign affairs commentators here, listed in The Australian five reasons why Australia should go ahead and sell uranium to India - it would be good for nuclear non-proliferation; the fundamental coming together of India and the US has profound implications for Australia; the global warming considerations are substantial; the bilateral Australia-India relationship would benefit enormously from trade in uranium; economic returns to Australia, especially South Australia, could be very significant.

In the 1990s, India was seen as a problem by Australia and the West, especially in non-proliferation, but today countries are looking "unashamedly in an India-centric way", added Rory Medcalf of Lowy Institute for International Policy, an independent think tank based here.

This would not be the first time that Australia would be selling uranium to a country that has not signed the NPT. Australia exported uranium to France through the 1980s - France joined the NPT in 1992.

DPA quoted the prime minister as saying earlier this year: "Certainly our policy to date has been to prohibit sales to countries which are not signatories to the Nuclear Non-Proliferation Treaty.

"But as time goes by, if India were to meet safeguard obligations, some Australians would see it as anomalous that we would sell uranium to China but not India."

Australia has 40 percent of the world's known uranium reserves and is the top exporter of the metal used to fuel reactors.

The issue is divisive in Australia because the opposition Labour Party argues that selling uranium to India would undermine the NPT. Labour is well ahead in opinion polls and is seen as the likely victor in general elections expected in November.

China, which is an NPT signatory, is suspected by some of passing on nuclear secrets. In April 2006, China signed a contract to import uranium from Australia.

Howard visited India in March 2006 and was pressed by Indian counterpart Manmohan Singh to allow sales of uranium. He agreed to send a delegation to India and the US to study the agreement between Washington and Delhi to share nuclear-power technology.


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## Bushroda

*'IT can't rest on past laurels'*
PTI[ THURSDAY, JULY 26, 2007 02:23:21 PM]

BANGALORE: A top infotech official has warned the Indian IT industry, already facing trouble spots such as wage inflation, high attrition rates and a strong rupee, cannot afford to sit on its laurels as global competition is on the rise. 

"We (Indian IT industry) cannot rest on our success to date," newly-appointed Chief Executive Officer and Managing Director of Infosys Technologies Ltd S Gopalakrishnan told media here in an interview. 

"It's all about what we are doing today, how we are going to compete tomorrow, which is going to decide your future. So, it's being relevant, continuously evolving and changing to meet the market requirements." 

Asked which are the countries he thought have the ability to beat India in its own game, Gopalakrishnan said, "Certainly China has the potential because it has a large number of engineering graduates and it's also a growing economy". 

But he would not say how many years before Beijing catches up with the 'desi' industry. 

However, the CEO also said India will continue to be the number one preferred location (for offshore outsourcing). 

"I think we will continue to be competitive. The other positive thing which is happening is that there is an ecosystem which is being built in India for technology. And that clusters...that's being created is also going to fuel more growth and create more opportunities".


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## Bushroda

*US trade body sees $150 bn opportunity in India nuclear deal*
Posted July 26th, 2007 
By Arun Kumar, IANS

Washington : The US-India Business Council (USIBC) says the India-US nuclear deal will create jobs and opportunities in India and across the US with the Indian nuclear industry planning a $150 billion expansion.

"Government officials on both sides who are working on this historic initiative deserve our deepest gratitude and respect for their vision and statesmanship," said USIBC president Ron Somers, hailing the progress on implementation of the 123 agreement.

Conclusion of the 123 agreement and approval by the Congress would represent a major stride toward US-India civil nuclear cooperation, which would create jobs and opportunities in India and across the US, said the organisation spearheading US industry's advocacy campaign in favour of the deal.

India's nuclear industry has announced plans to expand its installed nuclear power capacity of 3,500 MW to 60,000 MW over the next 26 years. The expansion is valued at $150 billion.

India's rapidly expanding economy, growing at more than nine percent, is confronting a major energy deficit. India's energy security challenge portends major collaborations with American companies, USIBC said.

The USIBC, representing 250 major US companies seeking to do more business with India, is a division of the three million-member US Chamber of Commerce, said to be the world's largest business association.

It formed the Coalition for Partnership with India shortly after Indian Prime Minister Manmohan Singh visited Washington in July 2005. The coalition serves as host for like-minded parties - think-tanks, policy experts, industry and the Indian American community in support of US-India cooperation.


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## Bushroda

*India's Cultural Revolution*
Robyn Meredith 
FORBES, NY
07.26.07, 6:00 AM ET

*Before our eyes, two giant nations--India and China--are simultaneously embracing both capitalism and globalization. The world economy is being transformed as a result, as Forbes Senior Editor Robyn Meredith explains in her new book, The Elephant and the Dragon: The Rise of India and China and What It Means to All of Us ($26, W.W. Norton, 2007). Each weekday through July 31, Forbes.com will post a new excerpt from the book.* 

When Stawan Kadepurkar entered college in 1991 in Pune, near Bombay, only 60% of the previous graduating class had found jobs. But by the time he graduated in 1995, India's economy had lurched into high gear and Kadepurkar and his graduating class found a far rosier future. Almost none worried about graduating into unemployment. 

Kadepurkar landed a job as an electronics engineer at Siemens (nyse: SI - news - people ) in Bombay and was paid $1,500 a year--a terrific salary at the time. For him, and for most Indian tech workers who graduated after 1991, the good times were just beginning. 

Two years out of college, he joined Infosys (nasdaq: INFY - news - people ) in Bangalore and helped the Indian company's client, Cisco (nasdaq: CSCO - news - people ), write code that allowed phone calls to be transmitted over the Internet. His salary rose to $5,000 a year--more than the combined earnings of his parents, both teachers. When Kadepurkar was all of 25, he bought a house. At 29, he bought his first car.

As India connects itself to the global economy, young Indians' clothing, food and even marriage rituals are starting to mirror what they see on their new color televisions. The people like Kadepurkar who are "taking away America's jobs" may be paid just a tenth of America's wages, but they have a fantastic standard of living in India, where the cost of living is much lower. 

While the glut of shiny new cellphones and motorcycles may be symbolic of India's economic success, it also signals a radical shift in culture. Millions of young, well-educated Indians live in a different world than that of their parents, who struggled to make ends meet on far lower salaries. They are even different from their older sisters and brothers, whose ambitions and dreams were far more modest. For the young and educated, India has been reincarnated as a land of prosperity and boundless opportunity. 

Many denizens of the New India work on behalf of American companies and can count on finding intellectually rewarding work while earning enough money to eat in restaurants, to buy homes and cars, to chat on cellphones with their friends, and to travel. Young, well-educated Indians finally have the things most American college graduates take for granted. 

Yet even as the New India cohort thrives, much of the rest of India is making much slower gains or even being left behind, creating social and political tensions that cloud over India's impressive strides forward. Most Indians still earn less than $60 a monthjust $2 a day. Bringing India's poor along on the ride to a New India would require vast job creation. That is only likely to come with the addition of thousands of factories, myriad construction projects or the nurturing of a big increase in agricultural exportsor all three. A lot depends on how soon India modernizes its infrastructure. 

Because of demographic trends, India is at a precipice. If India fails to create jobs for its fast-growing population of workers, it risks being mired in poverty and hopelessness. Today, half of India's 1.1 billion people are under 25 years old, and 31% are under 16 years oldnot yet working age. When India's young demographic bubble begins to reach working age, India will need far more jobs than currently exist to keep living standards from falling. 

The Indian government must not squander an opportunity to promote the nation's economic growth. If India fails to fully unleash its economy while it has the attention of investors around the world, it will pay a heavy price in prosperity both today and when its young population becomes a working-age behemoth in need of jobs. India must move past the on-again, off-again reforms that slow its economic rise or risk missing a historic chance to propel hundreds of millions of people out of poverty.


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## Bushroda

*RBI fixes dollar, Euro rates*
26 Jul 2007, 1721 hrs IST,PTI

MUMBAI: Reserve Bank of India (RBI) on Thursday fixed the Reference rate for the dollar at Rs 40.27 per dollar and the single European unit at Rs 55.23 per Euro from Rs 40.30 per dollar and Rs 55.64 respectively on Wednesday. 

In a press release issued here by the apex bank, the exchange rates of Great Britain's Pound and Japanese Yen against the Rupee have been given as Rs 82.5314 per pound and Rs 33.43 per 100 yen respectively, based on the Reference rate for dollar and middle rates of the cross currency quotes at noon. 

The Reference rate is based on 12 noon rates of a few select banks in Mumbai and the SDR-Rupee rate will be based on this rate, the release added.


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## Bushroda

*Hat Pin - HOLD*
James Crux
26/07/2007

Profiled by Growth Company Investor at 76.5p last year, human resources star Hat Pin has done a deal in the fast-growing Indian market. Famed for its Akamai, Saxton Bampfylde Hever and The Talent Business (formerly Kendall Tarrant) brands, Hat Pin has acquired Executive Access India for up to £6.9m in cash and shares in a deal part-funded through a £5.5m placing at 100p.

Executive Access India is a senior-level search business for the financial services, technology, academia and not-for-profit sectors and the acquisition should boost earnings within the first full year of ownership. Further earnings diversification on both a geographic and sector basis is another plus. Angela Campbell-Noe, the chief executive driving Hat Pins growth, insists Executive Access India is one of the pre-eminent executive search firms in India with an outstanding track record and this certainly looks a savvy deal. Executive Access India made £1.4m pre-tax from £3.2m sales in the year to March and the Indian economy is growing at circa 9% per annum.

Alongside the acquisition, Campbell-Noe flagged up strong 2007 trading from Hat Pin with Akamai, Saxton Bampfylde Hever and The Talent Business maintaining good momentum, order books strong and Hat Pin on track to meet market forecasts for the year. Hat Pin, which treated investors to 55% earnings growth in 2006 to 6.55p, offers plenty of organic growth potential with further earnings enhancing deals sure to follow. Readers who bought on our advice should sit tight for further organic and acquisitive growth, with further deals sure to follow. Hold.


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## Bushroda

*Downer defends Indian uranium deal plan*
By Maria Hawthorne, Todd Cardy and Nicolas Perpitch
News.com.au, Australia
July 26, 2007 06:19pm

*FOREIGN Minister Alexander Downer has defended plans to sell uranium to India and said the sale would help curb greenhouse emissions.*

Federal cabinet is considering the sale of uranium to India, the world's second most populous country, for electricity generation purposes only. 

India is one of only four countries not to have signed the nuclear non-proliferation treaty (NPT), which limits the spread of nuclear weapons. 

But Mr Downer said exports could go ahead if India agreed to inspections by the International Atomic Energy Agency (IAEA), similar to a deal being negotiated between India and the US. 

"In these circumstances it is a possibility that we would begin negotiations with India over supplying uranium to power stations which were subject to United Nations inspections and to the regime of the international atomic agency," he said. 

"But we haven't made any final decision about this. 

"It is still something that we are considering and we certainly will have to wait and see what the conclusion is of negotiations between India and America." 

Mr Downer said India had no record of exporting nuclear weapons technology to other countries and the export of uranium could help the country's burgeoning economy grow. 

"India is the second biggest country in the world in population terms," he said. 

"Its economy is growing at nearly nine per cent a year. It's going to be a massive consumer of energy and we want to deal with the issue of climate change." 

Labor's foreign affairs spokesman Robert McClelland said Mr Downer should be looking for ways to encourage India to sign up to the NPT, not to get around the treaty. 

"The foreign minister should be urging and leading greater global nuclear safeguards cooperation, and join Labor in campaigning for wide-ranging reform of the NPT to encourage India to join," Mr McClelland said. 

"Mr Downer's exuberant promotion of nuclear power is cause for concern  particularly given his weakness on the issue of nuclear non-proliferation." 

But Mr Downer said the Hawke Labor government sold uranium to France before the French signed up to the NPT in 1992. 

Any negotiations would be called off if the inspection system was not credible, he said. 

Federal Resources Minister Ian Macfarlane said India had agreed to use Australian uranium for electricity generation only.


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## Bushroda

*Malaysia's AGC Powers Into India With RM5.48 Billion Project*
Bernama, Malaysia

NEW DELHI, July 26 (Bernama) -- In what is seen as the first fully-owned Malaysian company to penetrate the tough Indian power sector, Asian Gateways Construction Sdn Bhd (AGC) has secured a 30-year contract to supply power -- projected to generate about RM1.028 billion in annual profit for the company.

After two years of intense negotiations, AGC signed the power purchase agreement (PPA) with PTC India Ltd, paving the way to build and operate a staggering RM5.48 billion thermal coal-fired power plant in Krishnpatnam in Andra Pradesh..

"It is 100 percent Malaysian project. This project is classified as a mega project by the Indian government and AGC will enjoy tax-free status," a jubilant AGC executive chairman/managing dircector, Datuk Seri Ho Seng Kung, told Bernama after clinching the deal here Wednesday.

"The duration of the project is 25 years with an extension of another five years and the total capacity of the plant is 1,600 megawatts (MW).

"The construction of the first phase will start once the environmental impact assessement report is ready and the project will kick off in 12 months or even earlier. Under the first phase we will supply 1050 MW," he said.

Robust India is hungry for power, where about 10,000 MW would be needed over the next five years to fuel its sizzling economy, steaming at about nine percent annually.

Ho said under the PPA, PTC, India's power-trading arm, agreed to buy all the power generated by AGC at US$0.05 per kWh.

PTC would tap the power from AGC plant and feed into India's national grid, which would be distributed nationwide, where demand from the booming industrial and commercial sectors are spiralling daily.

Ho said 1,000 acres of land in Krishnapatnam town, about 150 km north of Chennai, had been earmarked for the coal-fired power plant and the first phase was expected to be completed in 48 months, while the second phase was targeted to begin after the commissioning of the first phase.

Yearly, about two million metric tonnes of coal would be needed to power the plant and AGC's plans to import the fuel from its own coal mines in Sumatra, in Indonesia.

The company had also set up a special-purpose vehicle, AGC Power (India) Pte Ltd, to spearhead the project in Andra Pradesh, home to about 60 million Indians and investment-friendly state in the southern belt of India.

"It is great challenge for us as a Malaysian company but with our experience and expertise we managed to get this project.

"We also like to invite other public-listed companies from Malaysia to join us," he said.

India is the third largest producer of electricity in Asia with an installed capacity that has rose from 1,362 MW in 1947 to about 115,545 MW in 2005.

Yet, this production is inadequate to meet the colossal demand and frequent power outages have become a seasonal nightmare in many parts of India -- especially during peaks hours in summer.


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## Bushroda

*Bollywood brings sound of ringing tills* 
Ashling OConnor
The Times
July 26, 2007

When members of the International Indian Film Academy were scouring the globe looking for a suitable venue for their annual awards ceremony, they had the choice of both New York and Paris. 

It is a measure of Britains importance to Bollywood, the worlds most prolific film industry, that this year the academy chose Yorkshire. 

Outside India, the UK is Bollywoods biggest market with Hindi films routinely screened by the three largest multiplex chains and making the top-ten box office charts. 

Bollywood is also bearing the Made in Britain kitemark, with more and more Indian directors migrating to London as a favoured shooting location. Last year, more than 40 Bollywood films were shot in the capital, including Namaste London, Vipul Shahs £3 million hit about the cultural gaps between generations of non-resident Indians. 

Britain has always been a home away from home, Yash Chopra, the studio owner voted Bollywoods most powerful player, said. He was one of the first directors to shoot outside India and has a lake in Switzerland named after him for his services to tourism. 

Bollywoods new fascination with London is bringing a new breed of Indian tourist to the UK. Whereas their parents flocked to the Swiss Alps to visit the faux-Kashmiri backdrop against which their silver-screen heroes sang and danced their way to a schmaltzy denouement, the twenty-somethings and thirtysomethings of India today are drawn to the London landmarks they see in contemporary films. 

James Bidwell, chief executive of Visit London, the tourism promotion agency, said: The heritage and depth of connection [between India and Britain] is powerful, but the younger tourists are coming for Bollywood. 

Financially empowered by Western-standard pay packets, Indian tourists are an important source of revenue for the UK as they stay in the top hotels and dine in all the best restaurants. They numbered 212,000 in London last year, spending more than the Japanese. Each time they visited, they spent on average £645 per head, generating £139 million for the metropolitan economy. We can see that doubling or tripling in the next three years, Mr Bidwell said.


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## Bushroda

*Railways to invest Rs100bn in container operation* 
India Infoline News Service / Mumbai Jul 26, 2007 17:12 

*Railways requires the development of new ICDs and multi modal logistics parks, as the new container train entrants would need to have access to rail linked ICDs or develop their own ICDs within next three years.* 

An investment of about Rs100bn is expected to flow into Railways Container Operation sector in the next two years for wagons, logistics parks and Inland Container Depots (ICDs). This was stated by K.C. Jena, Member Staff, Railway Board while speaking at a Conference on Privatization of Container Transportation by Rail  Issues & Options on Thursday. 

Jena who is also the National Chairman of the Chartered Institute of Logistics & Transport India (CILT) said that the Rail Container policy announced by the Ministry of Railways requires the development of new ICDs and multi modal logistics parks, as the new container train entrants would need to have access to rail linked ICDs or develop their own ICDs within next three years. 

He said that overall the exercise is likely to make Logistics in India more effective to enable growth of physical trade and economy, and optimize the cost of supply chains and transactions. It will also facilitate moving towards a system of multimodalism based on co-existence of rail and road modes in the transport sector in our economy with a view to optimize fuel costs, control pollution, and minimize wasteful investment, he added. 

The Conference, which was attended by about 150 delegates from all over the country and abroad had a focused approach and was able to bring about consensus between the representatives of the container transport industries and the Government on the various issues. CILT is a worldwide organization of professional transportation, set up to promote the study of the art and science of transport in all its modes such as road, rail, shipping, civil aviation and pipelines.


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## Bushroda

*Wal-Mart to increase its Indian procurement*
Mikrofax eProcurement News, UK
25/07/2007 15:49

Retail giant Wal-Mart is to ramp up its procurement from India in order to enhance its global operations, it has been reported.

According to Moneycontrol India, the company will be sourcing electronics, leather accessories and footwear from the country in addition to the $600 million (£300 million) worth of apparel, jewellery and textiles that came from the sub-continent in 2006.

Rajnish Kapur, general manager for Wal-Mart Global Outsourcing India, commented that the company was taking "more and more penetration" in the area.

"We see that as a growing opportunity from India and we are exploring our opportunities there  We see huge growth opportunities in small towns," the official said.

The retailer was founded in 1962 by Sam Walton and became a listed entity on the New York Stock Exchange in 1972.

It is the fourth largest private employer in the world, following the Chinese Army, the NHS and Indian Railways.


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## Bushroda

*Abroad training made mandatory for railway managers* 

New Delhi, July 26: After Railway Minister Lalu Prasad Yadav`s success tour of Europe, it is now the turn of senior railway officers to go globe trotting. 

Railways made it mandatory for its officers to go abroad for training. While Divisional Railway Managers (DRM) would be sent to HEC Paris, General Managers to Stern Business School at New York. Similarly, other senior officials would go to Singapore and Malayasia. 

"It is very essential to have global exposure for our senior staff to keep the railways surging ahead," says a senior railway ministry official. 

"Though earlier officials were allowed to avail foreign training facility, it was never mandatory. Now as a policy, senior officials have to go to foreign countries to upgrade their skill and expose themselves to latest technology," the official said. 

There are about 14.12 lakh employees in railways including 14,000 officers. While the total number of DRMs is 67, there are only 24 GMs. 

As per the global training plan, the DRMs and GMs would be sent twice a year in a group of 20 for two weeks. 

"We need to learn and adopt the system in the heavy haul operation in the western countries. While Indian railway`s freight train carries maximum of 58 wagons, in South Africa, Brazil, Australia and Canada, the capacity is up to 400 wagons at a time," said the official. 

Last year, Yadav along with senior officials had visited Europe. After the tour the minister had instructed to follow the western model in services like passenger amenities and cleanliness. 

"The process of skill up-gradation drive is a continuous exercise to suit emerging railway business and technological needs. The plan is to ensure training of every officer in all functional management areas like assets maintenance, safety management, project management as well as general management," said the official. however, since the focus is now on to increase the volume in freight as well as passenger traffic with safety measures, there is a special emphasis to adopt the latest technology in the field, added the official. 

About the other staff, the official said, there is also a training plan to improve their skill in customer care, accident investigation, bridge inspection etc. Safety categories staff are given special training on disaster management with emphasis on relief, rescue and rehabilitation. 

The ministry has decided to select only global majors like Alstom, Siemens, Bombardier, General Electric to handle large projects such as setting up wheel factory, diesel locomotive factory, electric locomotive factory and coach factory in the country.


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## Bushroda

*Indian Institute Launches Online Grading of Diamonds* 
By Commodity Online
26 Jul 2007 at 11:08 AM GMT-04:00

SURAT (CommodityOnline.com) -- An institute dealing with diamonds in India has launched an online system to verify the diamond grading documents. 

The Indian Diamond Institute (IDI), based in Surat, a major town for diamond industry in the country, has taken the initiative to start the online service for verifying the diamond grading documents. 

Grading documents are certificates that consumers get when they buy diamonds from jewellers. Officials of the institute said the new online grading system will allow consumers from across India to validate diamonds they have purchased. 

According to the institutes executive director K K Sharma, the online grading of diamonds will provide a stamp of authenticity to consumers. 

So far the diamonds have been graded by the laboratories, but they are inconsistent in their work. So that is why the institute has decided to step in to verify the diamond grading report, Sharma told Commodity Online. 

He said the exercise would put pressure on jewellers as well as diamond brands that have stormed the retail market to ensure that their data conforms to international standards which the institute intends to follow. 

Consumers can access the new facility from the institutes website http://www.diamondinstitute.net. 

Consumers need to enter the relevant data from the diamond grading report which they obtain after making the purchase. The institute will produce an authentic grading analysis of the diamonds. The consumers could match the IDI analysis report with the diamond grading report that they have. 

Sharma said the institute has been inspired by a similar move by the American Gem Society (AGS). The AGS has been providing similar services to validate the grading reports from the last couple of years in the US. 

India is one of the largest importers of diamonds in the world as the country emerged as a major hub for processing of cut and polished diamonds. 

India imported $1986.53 million worth of cut & polished diamonds during the financial year 2006-07, and the country processed about 58% ($10.84 billion) of the worlds polished diamonds, worth $18.72 billion, in 2006.


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## Bushroda

*Indian Retail Becomes Customer Freak* 
By Priyanka Akhouri 
Mumbai, Jul 26, 2007

Retail sector one of the India's largest industry accounts for over 10 % of the country's GDP and around 8 % of the employment. Looking at the increasing demand in the retail market that is driven by customers' changing lifestyles, income growth, and different demographic patterns, the retail sector is expected to grow at a higher rate than the Gross Domestic Product (GDP) of the country. It's witnessing a dramatic transformation. Retailer's main area of focus is on customers, to transform their shopping experience from a traditional format to tech-savvy feeling. Not only the number of retail outlets is booming but also the system in itself is changing with the involvement of Indian corporates and international retail giants. 

Various studies carried out on the future of retail industry in India seem to point that the size of the organized retail would triple in another 4-5 years. However, this sector is expected to touch an estimated amount of US $17 billion as compared to the current size of US $6 billion. 

To meet this significant need - CIOs, retailers, enterprises, and customers can leverage on Intelligent Retail Network (IRN) solutions - introduced in India in early 2006. It enables to streamline business operations, access decision-making, improve consumer satisfaction, and ameliorate the management of inventory. The focus is on retailers to boost productivity by connecting people, places, and information, and improve customers' satisfaction by enhancing the shopping experience. Besides, it claims to increase revenue by improving decision making through utilization and delivery of data, and secure brand image and assets. This solution is now in the process of being rolled out in the market for the customers. Usage of IRN will enable retailers to attain flexibility in meeting frequent changing business demands. 

The solution, provided by Cisco, aims to integrate an existing retail system or infrastructure for easy implementation. Its components vary from a simple retail solution like the Point of Sale (POS) enterprise to media-rich customer interactive environments. Various offerings of this solution include Integrated Services Router, which ranges from a simple, wireless router to secure enterprise-wide platforms. The Unified Communications provide voice, video, mobility, and Internet Protocol (IP) communication solutions to facilitate effective interaction. The Video Surveillance enables the retail sector a consistent and efficient data integration. It also helps retailers to increase revenue and improve the in-store experience for shoppers. When combined with video analytics intelligence, the solution give retailers new ways to gather vital data about how assets and people move through a store. 

Anil Bhasin, VP (Enterprise) of Cisco India and SAARC said, " Across retail-sector operations, merchandising, human resources, training, customer services, and supply chain organizations can develop a roadmap, based on IRN foundation which will support their corporate vision for years into the future." 

Digital Signage - designed to meet specific needs of retailers offers comprehensive and scalable networking solutions, which enables retailers to customize their content to individual screens in individual stores. It includes mobility solutions that help retailer's productivity and responsiveness enabling secure access to network resources and applications. It enables to access corporate and store information, reduces retail costs through converging data and voice systems, provides instant communication with enterprises applications and resources throughout stores. It claims to support employee training and productivity, and maximizes customer's satisfaction with in-store broadcasting, multi-channel shopping, and digital signage as well as revenue-boosting smart technologies and information. Among the other assistance, it provides CIOs and retailers a more cost-effective employee training and management by connecting store sites via a Wide-Area Network (WAN). To improve the productivity, it supports employee communication by means of e-mail, voicemail, internet access, and videoconferencing. 

The solution attempts to make shopping quick, efficient, and pleasurable for customers and with a unified IP information network, retailers can resort to consumer driven replenishment, which can change the way the store handles forecasting along with better analysis of pre-sales data and real-time availability of data on customer behavior.


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## Bushroda

*Middle rank employees have high job satisfaction : ASSOCHAM* 
India Infoline News Service / Mumbai Jul 26, 2007 10:53 

Survey carried out by ASSOCHAM on `Job Satisfaction Levels that covered 700 Employees also revealed that other factors for job satisfaction comprise flexible working hours, plenty of leave facilities with reasonable perks, said 80% of respondents, adding that these are available in abundance in aforesaid jobs. 

Job Satisfaction is found to be highest at Middle ranks at centre in state governments and PSUs under them, foreign embassies and faculties in academic institutions as little sense of accountability chase them after office hours due to their employers moderate expectations and working practices offering such employees enough flexibilities. 

Above findings are in a Survey carried out by ASSOCHAM on `Job Satisfaction Levels that covered 700 Employees also revealed that other factors for job satisfaction comprise flexible working hours, plenty of leave facilities with reasonable perks, said 80% of respondents, adding that these are available in abundance in aforesaid jobs. 

The respondents felt that that jobs that drive maximum satisfaction include rank holders of Under Secretary, Dy. Secretary & Directors with government. Faculties in academic institutions like Lecturers & Sr. Lectures including Readers and Officials like Advisers, Commercial & Trade Officers in Foreign Embassies. Middle rank managers, senior managers and Chief Managers in PSUs are among others that remain highly contended and satisfied with their assigned job responsibilities, say majority of respondents. 

It also reveals interesting disclosures saying that satisfaction levels are rising even in over 65% middle rank working in MNCs, IT giants and large Indian corporate houses in view of attractive salary package and conducive work environment. Earlier, job satisfaction in these 3 places were at very lower side. 

However, over 40% of them said that senior officers of Joint Secretary ranks and above with government are among highly tense lot as their working hours have no defined ceiling and accountability varying from their normal hierarchical bosses to political masters and media, for which there is no particular specified time. 

Commenting on the Survey, ASSOCHAM President, Venugopal N. Dhoot said, apart from senior government officials, those that face severely tight schedule and thick and heavy responsibilities include top ranking executives in PSUs and banks. Ambassadors/High Commissioners and Presidents, Vice Presidents, COO in professional managed companies and other corporate houses including Country President, Country Manager, Director IT, HR, Technical & Operations, though have the squeezed schedule but draw them lower satisfaction as compared to middle rank holders elsewhere, said 55% of respondents. 

The most dissatisfied employees as per 85% of respondents are found in BPOs, call centres followed by engineering & construction companies, stock markets, textile and garment manufacturers, railways, FMCG, export houses, retail malls & multiplexes, hotels, transporters, etc. in view of longer working hours, higher targets to achieve with great expectations. 

*Key Factors for Job Satisfaction :* 

·  Reasonable accountability 

· Justified expectations 

· Flexible working hours 

· Adequate leave facilities 

· Employee friendly work culture 

· Good time for vacations/tours 

· Balanced life between home and office 



*Factors for Job Dissatisfaction* 

· Over 60 hours work in a week compared to 40-48 in Europe and US 

· Frequent changes of jobs for greener pastures 

· Stiff competition to come up in life 

· Higher targets with unreasonable expectations 



Dhoot further said that employees in India have longer working hours, i.e. over 60 compared to 40-48 working hours in Europe and US. The employees in BPO, call centres and domestic & overseas corporate sector who frequently quit the jobs for better salary & incentives and working in obsolete working conditions have the highest level of disappointment.


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## Bushroda

*Australia Follows US on India Nuke Sales*
By ROD McGUIRK 07.26.07, 10:54 AM ET
FORBES, NY

CANBERRA, Australia - Australia might lift its ban on selling uranium to India if New Delhi forms the nuclear partnership it is negotiating with the United States, Foreign Minister Alexander Downer said Thursday.

Australia, which holds 40 percent of the world's known uranium reserves, currently won't sell uranium to India because New Delhi is developing nuclear weapons and refuses to join an international nonproliferation treaty.

But Downer said India's dramatic economic expansion and the threat of global warming has forced the government to reconsider that ban.

Australia will take its cue from the civilian nuclear partnership deal that Washington and New Delhi have been negotiating for the past two years, Downer said.

Under the deal, the U.S. would ship nuclear fuel and technology to India in return for India opening its civilian nuclear reactors to international inspectors. India's military reactors would remain off-limits.

Downer said those negotiations were "heading in the right direction."

If a deal is reached, "it is a possibility that we would begin negotiations with India over supplying uranium for those power stations which were subject to United Nations inspections and to the regime of the International Atomic Energy Agency," Downer said.

Senior government ministers gave conditional support Thursday to making India Australia's only uranium customer that is not a member of the Nuclear Nonproliferation Treaty.

Resources Minister Ian Macfarlane argued that if Australia did not sell uranium to India, someone else would.

"If it's not from Australia under the strictest guidelines and safeguards, they will simply source it from other countries with much less restriction," Macfarlane told Australian Broadcasting Corp. radio.

The Australian Democrats, a minor opposition party, said in a statement that selling uranium to India "will undermine the most fundamental international treaty on weapons proliferation and could lead to further escalation of tensions in South Asia."

Security analyst Sandy Gordon said Australian uranium, while quarantined for peaceful purposes, would enable India to divert uranium from other sources to weapons.

"India is in some form of nuclear competition with China and Pakistan ... and it would have an effect on that," Gordon told ABC.

Pakistan's Religious Affairs Minister Mohammed Ijaz ul-Haq said his country, which came close to nuclear war with India in 2002, expected a similar offer of Australian uranium.

"As a Pakistani, I can tell you the entire nation will be very upset" if Pakistan is excluded, ul-Haq told ABC.

The Nuclear Nonproliferation Treaty calls on nations to pledge not to pursue nuclear weapons in exchange for a commitment by five nuclear powers - the U.S., Russia, Britain, France and China - to move toward nuclear disarmament.

India and Pakistan, known nuclear weapons states, remain outside the treaty, as does Israel, which is considered to have such arms but has not acknowledged it.


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## Bushroda

*Tips for a smooth passage to India* 
*Indias booming economy make it a tempting destination for export deals, but make sure you take the right precautions, says Simon Groves*

Personal Computer World, UK
Simon Groves, CRN 26 Jul 2007

UK exporters with their eyes on Indias booming economy need to proceed with caution. Indias economy continues to grow at about eight per cent a year, fired by a burgeoning services sector that contributes three-quarters of the nations economic growth. But although money continues to flood in, India is facing significant inflation  reaching 7.3 per cent year on year last October.

In addition, the government is still struggling to implement economic reforms, bring in much-needed infrastructure projects and manage costly subsidy systems.

These pressures highlight the importance of checking carefully the creditworthiness of trading partners in India. All too often UK firms chasing export deals forget to apply the same checks and measures that they would use for domestic customers. The basic principles are the same, but they need to be adapted.

*Credit check*. It is especially vital to check if a potential customer is under the supervision of the Board for Industrial and Financial Reconstruction. This means it is protected from bankruptcy, making it virtually impossible to reclaim a bad debt.

*Payment terms*. These must be in writing and agreed to by your customer before any transaction begins. Indian importers expect open account terms, but if there are concerns, exporters might try to opt for advanced payment or Cash Against Documents.

*Getting paid*. Slow payments are not excessive, but do not extend credit terms beyond 180 days as this will result in the Reserve Bank of India getting involved, delaying payment even further.

*Late payment*. Recovery of overdue payments through the legal system is slow, so out-of-court settlements are preferred. UK firms need a collection agency with local experience.

*Legal action*. If firms do have to go to court, be prepared to wait. Debt recovery takes on average 1,420 days, four times as long as in the UK, while bankruptcy proceedings take a staggering 10 years on average, compared with less than 18 months in the UK.


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## Bushroda

*Boeing, Air India Celebrate First 777-200LR Delivery* 
PRNEWSWIRE, NY
Source: BOEING

SEATTLE, July 26 /PRNewswire-FirstCall/ -- The Boeing Company (NYSE: BA) and Mumbai, India-based Air India today celebrated the delivery of the airline's first 777-200LR (Longer Range) Worldliner airplane. This is the first 777 from Air India's order of 68 Boeing jetliners. The airline will receive an additional three 777-200LR Worldliner and three 777-300ER (Extended Range) airplanes this year.

Air India's order for 68 Boeing jetliners, placed in December 2005, was the largest commercial airplane order in India's civil aviation history in terms of price. The order consisted of 23 777s, including eight 777-200LR Worldliners and 15 777-300ERs, and 27 787-8 Dreamliners. Additionally, Air India Express, a wholly owned subsidiary of Air India, ordered 18 Next-Generation 737-800s.

Air India will use the 777-200LR to become the first India-based operator to offer direct, nonstop flights between the United States and India. It begins service to New York's John F. Kennedy International Airport from Mumbai, India, on Aug. 1.

"Air India is connecting India to the world and is doing so in a manner that combines real economic advantages for the airline and a positive experience for our passengers," said V. Thulasidas, chairman and managing director of Air India. "Boeing's 777-200LR is the most technologically advanced passenger aircraft in its class and will enable Air India to fly passengers around the world with direct, nonstop routes."

The 777 family of airplanes is popular with passengers and airlines because of its fuel-efficient twin-engine design, high reliability, low operating costs and comfortable and spacious interior. It is the market leader in the 300- to 400-seat segment, capturing more than 65 percent of that market.

"The 777 delivers proven economic leadership and a very high level of passenger comfort," said Dinesh Keskar, Boeing Commercial Airplanes vice president, Sales. "Air India and Boeing embarked on a strategic fleet renewal and expansion plan in 2005. Today, we are seeing the results of that vision, plan and partnership coming together."

Air India's 777-200LR will have a three-class configuration, including eight first-class cabins, 35 executive class and 195 economy seats. All executive class seats will turn into flat beds and economy seats will be larger, at 18.5 inches in width. Passengers also will have access to an in-flight entertainment system provided by Thales on video screens that measure 23 inches in first class, 15.4 inches in executive class and 10.6 inches in economy. Additionally, the airplane will be able to carry up to 15 tons of cargo.

With the 787 Dreamliner and 777, Boeing offers a complete family of airplanes to cover the 200- to 400-seat market segment. With complementary range, speed, efficiency and operational commonality, yet differing seating and cargo capacities, airlines can use both models in their fleets to tailor capacity to meet seasonal demand.

Air India, India's national flag carrier, operates approximately 170 flights a week, carrying more than 5 million passengers a year to 59 cities worldwide from various points in India. Its subsidiary, Air India Express, operates 116 services a week to 10 destinations in the Gulf and South East Asia.

Air India, which is celebrating its 75th year of operation this year, operates 24 weekly flights to the U.S., including a daily service to New York via London and a daily service to Newark, N.J., via Paris.


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## Bushroda

*A-I cuts non-stop US fares by 33%* 
P R Sanjai / Mumbai July 27, 2007 

To compete with private airlines, state-owned carrier Air-India has reduced fares by an average 33 per cent for its non-stop Mumbai-New York flight from August 1 on its fully furnished new Boeing B777-200-LR aircraft. 

Air-India took delivery of these B777-200 aircraft in Seattle yesterday. Air-India has positioned its fares on a par with airlines offering one-stop services to US, as part of testing the market. 

The national carrier has reduced its economy fares by 37.17 per cent to Rs 50,700 (return fares excluding taxes) from Rs 80,700. The executive (business) class fares were lowered by 40.11 per cent to Rs 159,700 against the original price of Rs 2,66,700. 

The first class fares of this brand new carrier has reduced by 22.01 per cent to Rs 3,57,700 against Rs 4,58,700. The duration of the flight is approximately sixteen hours, resulting in saving of over 4 hours. 

A senior Air-India executive said: This is the part of strategy of testing the market. This will be a kind of introductory offer. The original fares would be restored once the market becomes sensitised about the experience of non-stop US flights which is offering a world-class facilities on-board. 

Travel Agents Federation of India (TAFI) General Secretary Ajay Prakash said this is the step in right direction which will enable passengers to experience brand new aircraft and its comforts. 

Air-Indias non-stop flights are equipped with the iThales Entertainment System, with an Audio Video on Demand (AVOD) facility. This handy system attached to every seat can be accessed by a touch screen. Passengers can avail of more than a hundred hours of audio and video entertainment.


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## Bushroda

*Appreciating Re: No need to panic* 

Indian software firms get 60 per cent of their revenues from the US. They need to reduce their dependence on the US market and move towards the European market, Japan etc and start earning in Euros and Yen.

The appreciation of the rupee vis-à-vis the US dollar (the same as the depreciation of the US dollar vis-à-vis the rupee) is causing concern among the exporters especially the software companies as they expect a fall in their export earnings because the US dollar would now fetch less rupees. Clearly, this is a part of the ongoing economic dynamics wherein the fiscal fundamentals are strong, foreign investors are quite upbeat about the Indian economy and are thus willing to pour in more money. Reportedly, in the first fortnight of this month foreign funds pumped US $4.1 billion into India, more than double the $ 2 billion they had pumped in November 2006.

One side effect of this is that the rupee is being increasingly accepted as a "hard currency" in many countries even though the Reserve Bank of India has not yet declared it as fully convertible. However, the people believe that the rupee could make good asset! Recall, 10 years ago, when a depreciating rupee had made the Indian importers jittery, I had then written in my column that there was no need to panic. 

To quote: "After 27 months the rupee is again in turmoil vis-à-vis dollar and other hard currencies. On 1st December, 1997 the value of rupee crashed to Rs 39.30 to a US dollar. It may be recalled that in September 1995 the rupee was in turmoil when it touched a low of Rs 35 against the US dollar in the foreign exchange market. In other words in past the 27 months the value of rupee vis-à-vis US dollar has depreciated from Rs 33.78 to Rs 39.30, ie, by almost five and a half rupee.

Since the introduction of the economic reforms in 1991 when the controlled exchange rate policy was done away with, the rupee has depreciated by almost Rs eight. Not bad, given the political instability in the country. Indeed it should not cause any concern since we have shifted to a market determined rate of rupee against all the hard currencies. This depreciation (and sometimes appreciation) is part of the game and most of the time good for the economy."

Moreover, from 1998 till 2003 the rupee was relatively stable vis-à-vis the US dollar and then rose steadily. But it is only in the past few weeks that the appreciating rupee began unsettling the applecart of many exporters. The rupee hit the intra-day high of $40.28 on 28 May while it finished at 39.85 a dollar on 13 May 13, 1998. Last week it was Rs. 40.50 to a dollar. In 2002, for every dollar worth of exports, an exporter got nearly Rs 49. But in December 2003, an exporter got Rs 45 for every dollar, which translated into a fall of approximately seven per cent.

The software companies are the hardest hit as their software exports are mainly for the US market. To quote: "Indian software firms get 60 per cent of their revenues from the US and a one per cent appreciation of the rupee against the dollar can impact earnings before interest and tax margins by between 30 and 50 basis points. Irrespective of the fact whether the company is big or small, all of them have been hit. The margins may be impacted by as much as 4 per cent."

What is the remedy? One, devaluation, but this instrument to check appreciation of any currency is outdated. Two, the buying and selling of the dollar by the Central Bank to stabilize the exchange rate of the rupee, is effective only as a short term measure. However, because of the hue and cry raised by the exporters the Government has come out with a Rs 1,400 crore relief package for the exporters. 

This includes interest subsidy to the tune of Rs 600 crore on bank loans and Rs 800 crore on duty drawback on inputs used in the manufacture of export goods and other measures. The interest subsidy is meant only for small and medium sized exporters while the duty drawback measure will apply to all the exporters. According to the exporters, though the relief package is not sufficient it would mitigate some of their problems.

Paradoxically, when the rupee is depreciating the importers are a worried lot and when the rupee is appreciating the exporters are the worried lot. This is because when the rupee is depreciating the importers have to pay more rupees to buy a dollar and thus imports become expensive while the exporters get more from a dollar. However, when the rupee is appreciating the importers have to pay less to buy a dollar while the exporters get less from a dollar. For instance, India imports huge quantities of oil, so when the rupee is depreciating our oil import bill goes up and when the rupee is appreciating our oil import bill comes down.

If the exporters are fretting about the declining export earnings because of the appreciation of the rupee, many others are happy as the appreciating rupee brings down our import bill of a number of capital goods and commodities like oil, pulses, grain etc. True, the appreciating rupee is only a temporary phenomenon which will stabilize at some level but we can use this opportunity to import capital goods to strengthen the capital base of our manufacturing sector. The time is also appropriate to import and build inventories of critical raw materials. We can also build our stocks of grain, pulses and edible oil to keep a check on inflation.

The ideal thing would be for the Reserve Bank of India to manage the exchange rate fluctuations within a certain band to be determined by it. But more important, our business houses and industries must realize that as the economy gets stronger, the rupee will also get stronger in relative terms. Therefore, businesses which are heavily oriented towards the US markets must factor in the appreciating rupee in their calculations and devise strategies to check the erosion in their export earnings. Moreover, they also need to reduce their dependence on the US market and move towards the European market, Japan etc., and start earning in Euros and Yen.

However, for a large number of people the exchange rate variations do not have much of a meaning unless some of the items of their daily consumption like pulses happen to be imported. The common man is concerned more with the domestic inflation which affects his living standards and not the appreciation or depreciation of the rupee which is remotely connected to his living standard. Fortunately, the domestic rate of inflation has come down which should make the consumer happy.

Plainly, there is no need to panic about the appreciation in the value of the rupee as it will not affect the common man to any significant extent. In economic terms, it means automatic correction in the exchange rate with every player in the foreign exchange market adjusting his requirements accordingly. The packages for exporters are unnecessary. The businessmen must learn to live with the exchange rate fluctuations in this era of globalisation and stop looking for succour from the Government.


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## genmirajborgza786

Thursday, July 26, 2007 
Business 
India to grow @9&#37;, says IMF 

Agencies 

Washington, July 26: Buoyant global economic outlook has prompted the International Monetary Fund (IMF) to revise upward India's Gross Domestic Production (GDP) growth rate by 0.6 per cent to 9 per cent for 2007. 
Major upward revision has been made for emerging markets with growth projection for China, India and Russia being raised substantially, IMF said in its update on the World Economic Outlook (WEO) on Wednesday. 

IMF had revised India's GDP forecast to 9 per cent over the projection made in April this year. 

The WEO update has also revised the growth forecast for 2008 by 0.6 per cent to 8.4 per cent. 

The Economic Advisory Council to the Prime Minister, headed by former Reserve Bank Governor C Rangarajan, had on July 16 pegged the country's economic growth rate at 9 per cent in 2007-08. 

The RBI, however, in its Annual Policy Statement had projected a growth rate of 8.5 per cent. 

India has recorded a GDP growth rate of 9.4 per cent during 2006-07. 

IMF has also revised the forecast for world economic growth to 5.2 per cent, up by 0.3 per cent from the projection made in April. 

The growth rate for China, however, has been revised by 1.2 per cent to 11.2 per cent and for Russia by 0.6 per cent to 7 per cent.



URL: http://www.expressindia.com/fullstory.php?newsid=90048




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## genmirajborgza786

Thursday, July 26, 2007 
Infotech 


India fastest growing Internet market 

Agencies 

Kolkata, July 26: India is the fastest growing internet market in the world with over 23 million active Internet users, holding out prospect of a larger growth in the number of netizens. 
The top eight metros were driving the growth of internet in India with fast growing adoption in smaller cities, said Manish Agarwal, Vice-President (Marketing) of rediff.Com, one of the leading online community portals. 

Kolkata accounted for 1.05 million activer users and was ahead of technology hubs like Bangalore (0.97 million) and Hyderabad (0.95 million). 

Kolkata also had the highest percentage of 'innovators' among online users in the country, he said after launch of rediff's new multimedia application 'iShare'. 

"iShare comes with a very light and easy to use utility tool which users can install on their PCs and upload multiple files even at a low- speed without having to worry about the source of the file," he said. 

For example, he said, users would be able to shoot videos on mobile phones, digicam, digital camcorder and upload it. 

Photos and music from any digital camera and MP3 player like ipods could be uploaded on iShare, he added.



URL: http://www.expressindia.com/fullstory.php?newsid=90043




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## Bushroda

*Indian cellular service market to exceed US$ 25 billion by 2011, says Gartner*
Gartner, Inc. - July 26, 2007

Gartner reports that Indian cellular services revenues were US$ 8.95 billion in 2006 and are projected to grow at a compound annual growth rate (CAGR) of 18.4 percent from 2007 to 2011 to reach US$ 25.617 billion. Data revenues will outpace growth of voice revenues and contribute 22 percent of revenue in 2011 from 9.6 percent in 2006, according to this latest Gartner forecast.

India will continue to be the fastest growing country in APAC in terms of mobile telephony after China and promises to become more dynamic with the entry of Vodafone. 

"With more marginal users forming the bulk of the addressable market, low service costs and inexpensive handsets will help to unlock the inertia and facilitate adoption of mobile services," said Madhu Gupta, a senior research analyst at Gartner. "Call rates have reduced significantly to about 2.6 cents per minute. However, this remains high compared with fixed-line rates at 0.9 cents per minute. Gartner expects prices to drop in order to become more competitive with fixed-line rates, further lowering the barrier to entry. This trend, coupled with the emerging-market handset initiative by vendors and operators, will boost adoption of mobile services in India's semi urban and rural provinces."

*Mobile Penetration in India*

Mobile penetration in the rural market is low at 2 percent, but this represents an immense opportunity for the cellular service providers. Handset manufacturers are therefore concentrating on launching sub US $25 mobile handsets. 

Businesses are expanding into India's smaller towns and cities where fixed-line connectivity is limited and often nonexistent. Enterprises will use mobile services for intra-company, as well as inter-company, communications. Gartner expects enterprise service plans offered by mobile services players to become distance independent. This will be a big incentive for companies to use mobile phones, not only because call rates are comparable to fixed-line rates, but also because of the benefit that mobility gives their employees, especially while travelling or in remote locations. 

With these factors, cellular market penetration is projected to increase from 12.7 percent in 2006 to 38.6 percent in 2011. This overall penetration will primarily be driven by an increased focus on the rural market, aggressive promotions by the players and handset bundle offers. By 2011, Gartner expects 58 percent of the rural population and 95 percent of the urban population to be covered with mobile connections.

Connections  prepaid driving growth

Mobile connection growth in the Indian market is on an upward trajectory, and robust growth will continue until 2011. The market is forecast to grow 23 percent CAGR during the five-year forecast period, growing to more than 462 million connections.

The Indian market is driven by prepaid connections, which accounted for more than 84 percent in 2006 and expected to grow to more than 93 percent of the connection base by 2011. Therefore the voluntary churn rate in India is 30.6 percent (2006), and despite a maturing market the ratio is expected to go up to 41 percent in 2011.

*Voice revenues versus data revenues*

The revenues from data services will significantly contribute to the growth of overall cellular services revenues in India, with a CAGR of 36.8 percent in the forecast period.

Prepaid subscribers are expected to adopt data services faster than the post-paid segment. Data revenues for the prepaid segment are projected to grow at 46 percent CAGR during the forecast period as compared to 22 percent for the post-paid subscribers during the same period.

The bulk of the revenues will continue to come from voice services. However, with the increased growth in data services, the percentage of revenues coming from voice will reduce from 90 percent in 2006 to almost 78 percent in 2011.

*Market and operator strategies*

Large players will have an advantage as they expand their presence and take advantage of economies of scale. But they will face tremendous challenges in finding the right balance between yield and market share. Customers with low disposable incomes will form a significant proportion of the base. As a result, ARPUs (Average Revenue Per User)/Year will continue to decline through the forecast period. In 2006 the average ARPUs/Year of players was USD 82.1, which will further reduce to USD 59.5 by 2011.

"Operators will have to look beyond revenue growth to stem erosion of their bottom lines. They will need to adopt measures to optimize cost associated with business operations and network management. More operators are likely to collaborate in terms of infrastructure sharing and outsourcing their network management to equipment vendors and, possibly, system integrators," said Mr. Gupta.

In India spectrum remains a scarce resource and is tightly controlled. This could have an impact on expansion plans and the quality of service because of inadequate investment in or upgrading of the networks. Existing license conditions, such as a high revenue share, take away significant resources that could be used for investing in networks and market development activities.

"With the intensifying competition, the release of 3G spectrum will help in bridging the gap generated because of lower voice tariffs and handset subsidies. The release of 3G will be essential to sustain the growth in the cellular services market," concluded Mr.Gupta.


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## genmirajborgza786

Story Think flat, think fast 
RC Acharya, RC Acharya
Posted online: Thursday , July 26, 2007 at 1030 hrs

Information Technology, as a sector, appears to lend itself readily to slogans that incorporate the word &#8220;think&#8221;. The Big Blue itself, IBM, popularly had &#8220;Think&#8221;. Its sprightly challenger, Apple Computer, had &#8220;Think different&#8221;. Now Infosys, with some inspiration from a bestselling book by Thomas Friedman, has come up with &#8220;Think flat&#8221;. It appears on the cover of the company&#8217;s annual report for 2006-07. 

Coming from a vast powerhouse of grey matter, with over 75,000 top-of-their-field men and women working away to maintain its predominance in the field of information technology, this is a conceptual mode of thought that deserves some solid thought from more than just Infosys&#8217; shareholders. 

This is a company that has to think hard and fast all the time. Consider the operational complexity. While its 87-acre facility at Bangalore with about 17,000 trained personnel has to operate in synchrony to retain its position as the command post that orchestrates the combined efforts of its 40 odd centres across the world, its much larger 250-acre campus at Mysore is busy churning out trained manpower for projected growth and expansion tomorrow. At any given moment, about 2,500 highly qualified professionals are going through the paces here so that Infosys is never short of hands to sustain its motto&#8212;&#8220;Powered by Intellect, Driven by Values&#8221;. 

This workforce generates revenue at a typical hourly rate of about $60-70 for run-of-the-mill tasks such as system design and writing software code, rising to about $100 for consultancy and other higher-level inputs. For the 75,000 whizkids on Infosys&#8217;s payroll, this translates into quite a tidy sum: a sum of Rs 12,156 crore, to be exact, for FY07. This is almost 16&#37; of India&#8217;s total IT and ITeS exports. 

No wonder, the IT/ITeS sector alone was reported to have paid for the country&#8217;s entire oil import bill in 2003. All thanks to the initiative taken by some of the industry&#8217;s visionaries: NR Narayana Murthy of Infosys, Azim Premji of Wipro and, of course, Ratan Tata of TCS, more than a decade ago. 

With a vast pool of 3.1 million university and college graduates, including around 500,000 engineering and diploma holders, being churned out every year within the country, the Indian software industry has scope for relentless expansion. Add to this technical competence their proficiency in English, which is not only the medium of instruction in almost all institutions of higher learning but also spoken increasingly in urban homes. This last factor is thought to have given the Indian software industry a unique edge in the international arena over other rival emerging export powerhouses such as China, which must apply almost all its software output to domestic purposes. Sans language barriers, Indian IT professionals&#8212;and even humble call centre operators&#8212;can understand exactly what the client wants, a significant part of the task for most of them. 

Satellites and telecom infrastructure have crunched the distance between clients and suppliers, and so a coder in Bangalore has an equal opportunity to meet specifications. It&#8217;s a &#8220;flat world&#8221; now. 

However, it is a flat world for others on the planet as well. At the current pace of globalisation, India&#8217;s language advantage may last for only about a couple of decades more, until an English-fluent generation of Chinese emerges to join the game. Today, they think in Chinese and translate it to English. Tomorrow, they will also think in English, which will imply a totally different level of flatness. 

Infosys, presumably, will not let any link weaken. Maintaining communication channels open with clients on a 24X7 basis is a vital factor in keeping the vast army of personnel earning top dollars, day in and day out. A vast control centre, with scores of large wall displays, monitors each and every link with overseas clients, flashing warning signals whenever a problem surfaces so that corrective action can be initiated in a matter of seconds. The backbone for this, of course, is an undersea optical fibre cable connecting Bangalore to New York that carries vast volumes of broadband traffic between Infosys and its clients across North America. 

The company&#8217;s system of operations is impressive in both the scale of operations and the manner in which even larger aims are being pursued with due dedication and planning. A visitor to the spanking new facility at Bangalore is told the story of Infosys at the Experience hall, and then given an audiovisual presentation in the Management Council hall, named after JRD Tata, who was a bold dreamer in his time in the manner that Narayana Murthy is now. This is also indicative of the mutually inspirational relationship which the big three&#8212;Infosys, Wipro and TCS&#8212;share amongst themselves. Compete yes, but poach no. 

However, Infosys measures its success not simply in terms of getting new clients, but retaining them for years on end, based on a relationship built on efficiency, on-time delivery and that most important element in the wide world of business&#8212;trust! 

&#8212;RC Acharya is a former member of the Railway Board and an observer of operational efficiency in the corporate world. These are his personal views0-0000.

http://www.financialexpress.com/printer/news/206793/


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## genmirajborgza786

Comparitive advantages and jobs
Nagesh Kumar
Posted online: Friday , April 20, 2007 at 0000 hrs

The past few years have seen a gradual shift in the way India looks at international trade. In the heydays of the import-substitution regime, we tried to substitute imports as much as possible and looked at exports as a way to earn foreign exchange to pay for the imports that could not be substituted (such as crude oil). The current mindset, as articulated by the commerce & industry minister, Kamal Nath, while presenting his annual supplement of National Foreign Trade Policy, reflects a refreshing change. We have at last begun to see exports as an &#8216;engine&#8217; of &#8216;growth and employment generation&#8217;. Even imports are seen in positive light now, recognising their contribution to industrial growth and competitiveness. 

Several countries, especially those in East Asia, have created millions of jobs by developing export-oriented manufacturing industries. In the context of India&#8217;s shrinking employment in the organised sector despite acceleration in GDP growth, the importance of job creation through export-oriented production cannot be overemphasised. An RIS study, &#8216;Towards an Employment-Oriented Export Strategy&#8217;, prepared for the ministry in 2006, made an attempt at examining the employment generation potential of exports. It found the merchandise export target of $150 billion by 2009-10, set by the UPA government in 2004, to have a potential to generate 81.57 lakh direct new jobs. However, an employment-oriented thrust to India&#8217;s export strategy could help create 124.44 lakh new direct jobs by 2009-10 with exports crossing $165 billion. Including indirect employment, export activity could support 210 lakh new jobs by 2009-10. In view of the robust growth of exports over the past few years, the overall export target for 2008-09 has been set at $200 billion. 

So, what is &#8216;an employment-oriented export strategy&#8217;? It involves consolidating current exports while moving up the value chain in labour intensive products such as agricultural products, textiles and garments, leather products, and gems and jewellery. In these products, despite our traditional comparative advantage, India&#8217;s share of the global market is only 3&#37; compared to China&#8217;s 18%. What is required is the consolidation of fragmented production structures, an emphasis on brand building, and greater focus on design, quality control and compliance with global standards. All this could be supported by taking stakes in global marketing chains and forging global tie-ups. 

The latest policy supplement continues the ministry&#8217;s employment-oriented thrust to India&#8217;s export strategy. For instance, steps have been announced to strengthen exports of agricultural and rural industry output, handicrafts, gems and jewellery, apart from cottage industry products, that could spell new jobs while earning foreign exchange and making growth more inclusive. 

The development of clusters of small-scale industries&#8212;assisted by common facilities, infrastructure and information/marketing facilities for export expansion&#8212;is crucial to the effort. 


The emphasis on promotion of exports of labour-intensive goods is a well-deserved priority, but we should not overlook India&#8217;s potential in skill-intensive sectors 

The emphasis on promotion of exports of labour-intensive goods is a well-deserved priority. But we should not overlook India&#8217;s potential of emerging as a global manufacturing hub for technology or skill-intensive goods that can generate a high value-addition per unit of exports. India can become competitive in some of these industries, given our pool of trained human resources. While India has developed a niche in pharmaceuticals, chemicals, auto parts and some segments of automobiles, opportunities have been grossly missed in toys, consumer electronics and ICT hardware that are labour-intensive. The supplement has attempted to induce an export culture by introducing incentives based on incremental exports for producers of high-tech items. 

Boosting exports in technology-intensive industries requires a different combination of policies aimed at achieving global excellence. Another RIS study, &#8216;International competitiveness of knowledge-based industries in India&#8217;, found a wide variation in enterprise-level export performance within industries, despite similarities in policy environment and opportunities. Inherent enterprise dynamism has an obvious role to play. But policies could help in nurturing world-class enterprises in select sectors. These champions could be given official assistance to reach world scale and compete with peers worldwide. They could be assisted in several ways&#8212;by financial institutions, for example, offering preferential access to funds for overseas takeovers, major expansion of production capacity and so on. Brand-building, R&D and market development projects could be assisted, too, with support from diplomatic missions abroad in terms of market information and investment opportunities. 

A number of Indian enterprises have begun to achieve global scale, and are looking to strengthen their strategic assets through international acquisitions. Such strategies could bring rich rewards in terms of their enhanced international competitiveness and future export possibilities. Access to global markets and technology through acquisitions, combined with local cost production bases in India, could turn Indian companies such as Tata Steel, Hindalco or Ranbaxy, among others, much more competitive and resourceful as international players. 

To conclude, the time has come to turn India into a manufacturing hub for the world that would deliver jobs, incomes and foreign exchange for India&#8217;s teeming millions. 

&#8212;The author is director general, Research and Information System (RIS) for developing countries. These are his personal views

http://www.financialexpress.com/printer/news/197112/


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## genmirajborgza786

Print Story Central Bank IPO fully subscribed on first day

Posted online: Tuesday , July 24, 2007 at 1436 hrs

Mumbai, July 24:The initial public offer (IPO) of Central Bank of India, expected to raise up to Rs 816 crore, has received good response from investors and got fully subscribed on the first day. 

As per the data available on the bourses, the IPO of the public sector lender has received 13.61 crore bids for the eight crore shares on offer. 

The price band for the issue, which opened and closes on July 27, has been fixed at Rs 85-102 per equity share. The bank has reserved four million shares for employees. 

Post-issue, the governments shareholding in the bank would come down to 80.2 per cent. The issue would constitute 24.68 per cent of the pre-issue and 19.8 per cent of the post-issue paid-up equity capital of the bank. 

The issue proceeds would be utilised for technology upgradation and to augment the capital base to meet future capital requirements arising out of the implementation of Basel-II standards. 

The bank has hired ICICI Securities, Citigroup Global Markets India, ENAM Financial Consultants, IDBI Capital Market Services and Kotak Mahindra Capital Company as its lead manager
http://www.financialexpress.com/news/Central-Bank-IPO-fully-subscribed-on-first-day/206603/#


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## Bushroda

Thanks for your contribution, Sir. I sincerely appreciate your help in building this knowledge base.


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## Bushroda

*Indian Mutiny*
THE TIMES
27 July 2007

*Delhi must ignore local and international ideologues*

However noble the intentions and pressing the need, a leader who cannot persuade party colleagues to back his or her proposals for reform is rarely able to achieve much. Manmohan Singh, the Indian Prime Minister, has made little secret of his determination to make his country more responsive to global markets since taking the first tentative steps as Finance Minister to reform a sclerotic, inward-looking economy in 1991. As Prime Minister he has tried to continue the reforms. But he has found himself frustrated by the hostility of left-wing ideologues within his coalition, by the vociferous complaints of those allegedly bypassed by Indias prosperity and by armchair socialists in the West who delight in denouncing the iniquities of the market. 

Since 2003, Indias economy has grown by more than 8 per cent a year. This is by far the most impressive growth that the country has enjoyed since independence. In less than a decade, Indias fortunes have been utterly transformed. A country that only 50 years ago could barely feed itself is now a global leader in high technology and a significant industrial power, and is becoming an acquisitive and aggressive investor in developed Western economies. Millions of Indians each year are joining the emerging middle class. Millions more who once had no way of escape from humiliation and abject poverty are able to save enough to educate their children and secure a rung for them on the ladder upwards. 

The whingeing of Western bien pensants who want India to remain wedded to a Gandhian philosophy of village socialism is not only outdated; it is deeply destructive and racist. By citing the growing gap between Indias very rich and very poor, it gives spurious legitimacy to the claim that the market has only exacerbated disparities, while ignoring the extraordinary advances made possible for millions of poor in India, China, Vietnam and other countries that have embraced the opportunities presented by economic reform. 

This politics of envy, unfortunately, also has a strong grip within India. Opportunist politicians are quick to exploit the discontent in villages and slums, which, thanks to the rapid spread of tele-vision, communications and education, have seen how a tiny minority of the super-rich live. The opposition Bharatiya Janata Party  which disastrously went into the last election, proud of its free-market achievements, with the slogan India shining  has turned against foreign investment and liberal market reforms. It has made much of farmers protests against the setting up of Chinese-style special economic zones. Other regional parties and splinter groups attack the coalition led by the Congress party for not doing enough to spread prosperity to their states and regions. 

These pressures on Dr Singh will grow after Congresss loss of control of Goa, the small southwestern state that has been a mainstay of the tourist boom. The partys leaders will take fright at this fourth election defeat in a year and could draw precisely the wrong conclusions. They will argue that they must do more to maintain subsidies for the rural poor by diverting more funds to agriculture, fixing prices and trammelling Indias dynamic new industries in regulation and red tape. Recent budgets have seen a partial retreat from reform. Dr Singh must defy the ideologues at home and abroad and liberate those market forces that have already transformed India.


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## Bushroda

*Clean up our class act* 
T.V. Mohandas Pai
Friday, July 27, 2007

*Infotech will generate 10 million Indian jobs in three years. We need to educate enough candidates* 

The Indian IT industry has never been in a better position to meet the global information technology challenge. Armed with a young working population and a cumulative average growth rate of 28 per cent in the last five years, the industrys contribution to Indias GDP is expected to rise to 7 per cent this year, generating over 10 million jobs, in the next three years. While growth in the industry has been fuelled by the availability of skilled talent on a large scale, a heavy dependency on people also threatens to slow down long-term growth in the IT industry if demand for talent continues to outweigh supply. Indias universities as the chief suppliers of such talent are struggling to meet the nations current and future skilled resource requirements. 

About 11 million students are enrolled in over 18,000 colleges and 350 universities in India  70 per cent of the nations graduates being from the arts faculty. In their current state, our universities are not in a position to meet the industrys skilled resource requirements. Education policies, set in the 1960s, are unsuitable for todays India, and that of the future. Because the scale is so enormous and given the inadequate investment in education over the last 15 years, graduates often require extra training at the time of employment. The industry has to bear this burden. 

Indias IT industry is responsible for creating an education market. It has shown the aspiring middle class that it pays to invest in a childs education and it has created the demand for educated people. It has also raised salaries all around for the educated class and given it greater bargaining power in terms of compensation. 

Many companies today also invest heavily in training new recruits to make up for the deficiencies in the education system. These efforts, however, are nominal compared to the large scale initiatives required of the government, which as the biggest agent of reform needs to take several immediate measures to improve the educational landscape. 

The first of these is to provide autonomy to institutions, especially institutions of higher education. In every aspect of the administration of universities, governmental control needs to be relaxed. Today, educational institutions cannot change their courses at will, nor are they in a position to invest in infrastructure or pay their faculty better. That is why almost 30 per cent of faculty positions remain vacant. Many educational institutions are impoverished because they cannot charge higher fees. The relatively well-off and educated middle class reaps the unnecessary benefits of subsidised education while the poor are left behind. Universities must be empowered to charge fees to those who can afford to pay them, and those who cannot should have the benefit of scholarships. A national scholarship scheme would ensure that no young person of merit is deprived of a higher education. It is true that education loans have become easier to get but they are inadequate and the meritorious poor need additional financial support. The government cannot shirk its responsibilities; measures to liberate institutions would go a long way in helping them charter their own mission, raise funds to build capacity, and compete for the best faculty and students. 

Over 400,000 students strive for limited IIT and IIM seats annually. Last year, over 50 per cent of the 6,000 IIT seats were reportedly filled by students who had enrolled in expensive coaching classes. This reality has demoralised a lot of bright, young people. It is only when capacity is expanded that education will become accessible to all. Our gross enrolment rate in the age group of 18 to 24 is 11 per cent. If growth is to be sustained, India needs to drive this number up to 25 per cent in the next five years. The investments in capacity building have to come from the taxes that we pay and from fees collected from students who can afford to pay for an education. Universities deprived of funding cannot produce the quality nor the quantity of talent needed to sustain growth in sectors like ours. Some positive changes have been seen in uplifting the quality of primary and secondary education but not as much has been done in higher education, where skill-building becomes most crucial as the youth prepare to enter the job market. This is especially important at a time when companies the world over are entertaining higher expectations from the Indian IT industry in terms of new service offerings and technical expertise. Our competitive advantage can only be sustained if we are producing highly skilled and readily employable graduates. 

Today, we are losing almost 1,60,000 Indians to foreign universities and students enrolled in these universities are paying almost $3 billion in fees and costs. It is imperative for the Indian government to strive to retain some of this talent in India, especially those students who are leaving on account of lost opportunities in India. Retaining such students will only be possible if we are giving them access to the same educational resources as those outside the country. Many outstanding foreign universities have expressed interest in establishing branches in India recently. The government must have an open policy towards global universities coming to India to train and educate our students. I do not see why it should object to this, as it benefits young Indians in their own country. We also need to move away from a wrong notion about education belonging to the public sector  foreign universities, accredited private institutions, funded by edupreneurs, should also be allowed to come up and compete to attract the best students and faculty. 

It is said that for every job that is created in the IT sector in India, four jobs are created in the rest of the economy. Education plays a key role in ensuring an adequate supply of skilled talent. For this momentum to be sustained, active efforts on the part of the government would be required to reform education.


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## Bushroda

*How Wipro boss is winning the race against himself*
By Mark Kleinman, Asia Business Editor
Telegraph, UK
27/07/2007

Azim Premji, the multi-billionaire Indian businessman, is a man who could reasonably lay a claim to his own version of the Midas touch. After taking over the modest family business at the tender age of 21, the chairman of Wipro decided that the business of producing cooking fat might not always be for him.

Instead, he reasoned, there was a nascent demand forming for services to help companies benefit from the coming revolution in information technology. Fourteen years later hydrogenated oil found itself outsourced in favour of hardware and R&D. Wipro, the Bangalore-based computer services giant, had been born.

That was back in 1980, and the decision has proved a wise one, both for chairman Premji and for Wipro's shareholders. A business that turned over $3bn (£1.47bn) annually now boasts revenues of over $4bn and is valued by the stock market at $26bn. In its core operations of IT, professional, engineering and infrastructure services, it counts a large chunk of the Fortune 500 among its client base. Wipro is now one of the largest companies in its industry in the world, rubbing shoulders with the likes of CapGemini and IBM and compatriots Infosys Technologies and Tata Consultancy Services.

Worth more than £8bn according to The Sunday Times Rich List, it is hardly surprising that Premji is often referred to as India's Bill Gates. In some respects, the comparison is apt, although "Bangalore Bill" seems a flippant soubriquet for a serious man who names Mother Teresa and Muhammad Yunus, the Nobel Peace Prize-winning Bangladeshi microfinance pioneer, among the people he has most admired.

advertisementRegardless of Premji's obvious success, 41 years is a long time for any one man to remain at the helm of a company. So it seems fair to ask whether he is still as driven as he was back in the 1960s, when, at his first Wipro annual meeting as the company's boss (following the untimely death of his predecessor, his father), one investor suggested he ditch his shareholding and hand over the reins to someone better qualified?

The answer, snapped back an instant after being levelled at the 62-year-old, leaves little room for doubt. "At the end of the day it is a race with yourself. Can you do better tomorrow than you did today and are you doing better today than you did yesterday? I am just as motivated now because the challenges are so much larger than they were then."

Among the biggest of those challenges right now is one over which Premji has no control, but which loomed large over Wipro's first-quarter earnings figures last week: the strength of the Indian rupee. The pace of India's economic growth has taken its toll on major exporters like Wipro.

Premji is unaccustomed to seeing his company's share price fall in the aftermath of results announcements, but he is optimistic about the future and comfortable with Wipro's three-pillar structure, focusing on IT services to Asian and global clients, as well as the smaller units offering professional and infrastructure services.

The numbers are still healthy. First-quarter revenues were up 34pc year-on year and net profit increased by 16pc. Premji insists of Wipro: "There are no plans for further diversification."

The same might not be applicable to him. Premji is spending an increasing amount of his time building the eponymous charitable foundation that is helping to educate thousands of young people in some of the poorest rural areas of India. "I do see myself directing more of my energies towards social services such as my foundation," he said.

Philanthropy, like the instinct for revolutionising technology services, may be a preoccupation that Premji shares with Gates, but in other ways, they appear to represent chalk and cheese. The Wipro boss's holidays are spent walking in the desolate hills near the company's Bangalore base, and he famously continues to fly economy and drive a Ford Escort.

During his recent hiking break, Premji might well have been pondering the trail marked "acquisitions". Hunting targets in Britain and elsewhere, he believes that India's approach to going global through overseas mergers is an inevitable, and laudable, trend. But don't expect to see him announcing any transformational deals. While Infosys is linked as a prospective buyer of CapGemini, the Paris-headquartered IT consultancy firm, Wipro is staying resolutely in the camp of finding smaller, bolt-on purchases.

"Our strategy is a string-of-pearls one. The problem with the services business is that most of what you are buying is people, and integration is a huge challenge," Premji said. "Too many global companies in software and BPOs [business process outsourcers] are running business models which are drastically in need of change. If we were buying one of them we would be buying yesterday."

But it is on the rush of foreign direct investment into India - as elsewhere, a political hot potato - that Premji is at his most vociferous. While Tesco and others wait for a long-promised government relaxation of laws on multi-brand retailing, and Vodafone shrugs off protests from rivals over its entry into the Indian mobile telecoms market, Indian companies have found it relatively easy, finances permitting, to acquire overseas competitors (Corus and Whyte & Mackay in Britain, and the aluminium producer Novelis in Canada, being obvious examples).

Premji believes that, if anything, the balance of power has shifted too far in favour of overseas enterprise wanting a share of the spending power of hundreds of millions of young Indians.

"The direction is towards liberalisation and we seem to have done more than our share of it in strategic areas that some of our Western friends have not," he said. "If you take China as an example, it gives with one hand and takes away with two, whereas India sometimes gives with two hands and takes away with one. We could be doing a better job in negotiating quid pro quos for our country."

India's other overwhelming challenges, according to Premji, remain providing social, economic and transport infrastructures worthy of a country destined to become one of the 21st century's powerhouse economies. Boldly, he claims that within two years "you will see world-class airports in every major city in India".

The slew of money from global investment banks and private equity firms being poured in that direction is a source of foreign capital more likely to be welcomed than confronted with an icy stare.

One day, inevitably, these will be somebody else's challenges to muse over in the hills around Bangalore. Premji's elder son, Rishad, recently joined Wipro as a business development manager. If he ever takes the mantle from his father - and that's by no means certain, Premji senior said this week - selling vegetable oil won't be high on his agenda.


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## Bushroda

*Mittal to build two plants in India*
Taipei Times

STEEL DEAL: In addition to its previously announced plans for a factory in Orissa state, tycoon Lakshmi Mittal will set up another facility in Jharkhand state 

AFP, NEW DELHI 
Friday, Jul 27, 2007, Page 10 
Global magnate Lakshmi Mittal is looking to build two steel plants in India for about US$18 billion, which would be the largest ever foreign investment in the country, reports said yesterday.

The investment by ArcelorMittal would eclipse the US$12 billion steel plant South Korean rival POSCO plans to build in eastern Orissa state, the newspaper reports said.

The plans were announced after a meeting yesterday between Mittal and Indian Steel Minister Ram Vilas Paswan in New Dehli, the Press Trust of India said.

However, Mittal was quoted as saying after the meeting that "we have to have raw material linkages, land and other things in place" for the projects to go ahead.

Last December, ArcelorMittal, the world's biggest steelmaker, signed an US$8.7 billion project with the Orissa government to build a 12 tonne capacity steel plant in the resource-rich eastern state.

Now, ArcelorMittal, which has no manufacturing facilities in India, says it will also build a plant in eastern Jharkhand state, the reports said.

The two plants would have combined capacity of 24 million tonnes, the Press Trust of India said.

Executives from ArcelorMittal have been in touch with state officials in Orissa and Jharkhand over the past year, said the Mint business daily.

ArcelorMittal, which controls 10 percent of global steel production, has asked the government to speed up allocation of captive mines for its projects.

Mittal's plans highlights the race among global steel giants to secure the supply of key materials, such as iron ore, to feed a growing world economy.

India's Tata Steel Ltd, which earlier this year bought British steelmaker Corus, is also expanding operations domestically, and plans to increase its domestic production to about 20 million tonnes by 2015.

Paswan said the governments of Orissa and Jharkhand should expedite allocation of mining leases and assured Mittal his ministry would do all it could.

"The matter is now being dealt at the highest level," Paswan said, adding Indian Prime Minister Manmohan Singh was involved.

Promising a level-playing field in the country, Paswan said of the 200 million tonnes of steel production targeted by 2020, only one-third would be produced by public sector steel firms and the rest by private manufacturers.

India currently produces about 35 million tonnes of steel a year.

Orissa, which has a quarter of India's iron ore reserves, has witnessed a rush by Indian and international players to invest in large steel plants there. But the road for some has been bumpy, with POSCO's huge project dogged by farmers' protests. POSCO now aims to complete the plant by 2016.


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## Bushroda

*India in currency swap talk* 
Charlotte Cooper, The Brunei Times
MUMBAI
27-Jul-07

THE Asian Development Bank (ADB) is in talks with India about a currency swap that would help fund infrastructure projects without adding to the inflows that are complicating monetary policy, senior officials said yesterday.

Officials from the Manila-based ADB told Reuters on a visit to Mumbai a dollar-rupee currency swap could help fund India's infrastructure development needs, now estimated at US$475 billion over five years, without currency risk to the end-user. India's strong rate of economic growth and soaring stock market is attracting billions of dollars in direct and portfolio foreign investment, pushing up the rupee and causing a monetary policy headache for the Reserve Bank of India (RBI).

"We are exploring the possibility of currency swaps which we believe could meet the needs of the Reserve Bank of India in managing its monetary policy," said Liqun Jin, ADB vice-president, operations. "We can also help the private-sector business finance their activities without foreign exchange risk. For the end-user, he just borrows rupees and pays back rupees."

ADB officials said India's finance ministry supported the idea, and indications were that RBI officials were also interested. India's banking system is awash with potentially inflationary excess cash due to central bank rupee sales for dollars to keep the exchange rate down.


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## Bushroda

*Outsourcing professional support to India*
Asian Investor, Hong Kong
By Sameera Anand | 27 July 2007 

*Integreon explains why leading investment banks, corporations and law firms, such as Clifford Chance and DLA Piper, are sending their work offshore.* 

Chris Niccolls is senior vice president at Integreon, a knowledge process outsourcing company. He used to be a managing director at Bear Stearns in New York, and was a client of Integreon's. Here he discusses why knowledge process outsourcing is taking off in India.

*Why is knowledge process outsourcing (KPO) in India growing so fast?*

Chris Niccolls: India is a country with thousands of years of history as a leader in education, innovation and even genius, especially in science and mathematics. However, because of a comparatively few years when India was labelled a Third World Country, the West only saw the inadequate infrastructure and forgot about the amazing people. And there are a billion people in India. 

History and politics held back the vast intellectual capital of its people, and kept it out of the global marketplace. Think about that for just a second. Einstein, Shakespeare, Mozart, DaVinci, Socrates, the people who come to mind when a Westerner hears the word genius, came out of countries that were tiny compared to India.

*How many geniuses have been born in India over the past few decades, but never made it to university? How many never found an outlet for their genius in Indias old economy? *

While everyone on our staff is amazingly qualified, theyre not geniuses. Well, actually some of them are come to think of it. But they are all part of a talented pool of Indians ready to show the rest of the world how good they are. 

Now that the world has seen this, and has had some years to digest this message, there is a tidal wave of work coming to India. Its the right place, the right time and absolutely the right people.

*Is KPO in India vulnerable to cannibalisation from other geographies? *

The issue is commoditisation. If more or less the same task is being performed by rooms full of people, its a matter of time before it moves to the lowest cost producer, or is taken over by a computer. 

At Integreon, we dont call highly repetitive work KPO, just because an expensive person is used to do it. Answering a phone is largely the same task for someone who is paid $50,000 or $5,000,000. 

We look for work that is true KPO, work that involves education, brainpower and decision-making. Still, after a while someone may come along and realise that what was thought to be complex decision-making really isnt. 

A benefit of our method of KPO is that we analyse and measure how work is performed. There are often better ways to work and unnecessary steps that can be eliminated. We find that some tasks that used to take years to learn, take much less time in a structured environment, where we test training, measuring the impact on the quality and the quantity of work. 

Were not concerned that KPO work will be cannibalized by cheaper labour markets. Thats not to say we wont set up shop in other countries. Were already doing that in the Philippines. What were not doing is looking for countries that are cheaper than India. Were looking for locations that have a unique value proposition, such as excellence in a specialty area, or that allow us to further expand access to the best and brightest workers.

*What is your firm's area of specialisation within KPO?*

Overall our area of specialisation is in the support of professionals - lawyers, accountants, investment bankers and other highly educated individuals who work in large corporations and are paid at the top-end of the pay scale. 

We see an opportunity in freeing up domestic intellectual capital by letting people do what they were trained and hired for. Just let lawyers be lawyers, and well take care of all of the minutia that they want off of their plate so that they can earn money for their firm. 

*What is your strategy to win business?*

It all comes down to trust. We want to be the most trusted KPO in the world. When we go to see a client and ask then to turn over important and critical work to us, they need to trust us. 

Of course we have to be competent and live up to our promises. If we dont, our clients will not recommend us to future clients. Integreon has never lost a client - Im pretty sure that were the only KPO that can say that. So, we want to be the most trusted. Its what we aspire to.

*How do you ensure Integreon employees adhere to regulatory requirements?*

Theres no one answer to that question. Basically, its hard work which never ends. Theres never any finish line for security and integrity. Integreon constantly compares ourselves to our clients and seeks the best practices for security. There are always shortcuts but you cant take them. 

And when you create a culture of security, and enforce it constantly, one of your best safety nets becomes your people. They know how important security is and want to ensure we follow the process because they know that the future of the firm could be terribly damaged by just one small breach. It helps the overall process when youve got 2,000 pairs of eyes to keep everyone honest. 

*What kind of clients do you work for?*

Wed love to tell you about our amazingly A-grade client list but most of our clients want to keep their names confidential. On our client list, we have some of the top law firms, investment banks and corporations in the world including Clifford Chance and DLA Piper  two of the three largest law firms in the world. 

In the professional industries that we mentioned, we are the dominant KPO. We perform a variety of tasks from lower end tasks in document editing to high end task in financial modelling. We do legal review of documents and a variety of litigation support functions. We have lawyers supporting other lawyers, who are fully capable of doing all the work that 1st and 2nd year lawyers do in a law firm. 

We expect to see the same trajectory in KPO as we saw earlier in business process outsourcing (BPO). Over time, the complexity of the work that clients send offshore will increase. We have the talent and the capabilities to move as deeply into the support of a clients work as they wish.


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## Bushroda

*'Investment a two-way process'* 
27 Jul, 2007, 0211 hrs IST,Sudeshna Sen, TNN

LONDON: Inflation, bank rates, floods and housing issues may dominate the local media, but Britains new chancellor of the exchequer Alistair Darlings first speech after taking over as the countrys finance minister was dominated by India, China and globalisation  and how to respond to the challenges of it. 

Taking off from where Prime Minister Gordon Brown left off, the Right Hon Alistair Darling said, Countries like us have a simple choice: to retreat behind national borders, hope we can keep the tide of globalisation at bay, or have confidence in our ability to face it head on and make globalisation a force for good for all our people here and across the world. 

You only need to travel to countries such as China and India, as I have in the past few months, to appreciate it. Chinas economy has doubled in size in the past six years; India in eight. And when you visit these countries and realise that they too want to compete with the best and importantly be the best, it is easy to be daunted by the challenges globalisation poses, he said. 

Mr Darling also told the gathering that Britain will not stand in the way of foreign state-owned funds buying into UK companies, as long as they play by the rules  his comment came in the wake of dark rumblings from Germany and EU, given that Chinese & Singaporean sovereign funds have just bought into Barclays, and a Qatari government-owned fund is bidding for British icon Sainsbury. It would be wrong for any government to say in respect to any particular investment proposal, for example ...the Chinese Development Bank and Barclays, for the government to step in and say you cant do this, Mr Darling said. 

However, while he said that Britain is open for business underlining an increasing divide with the EU on openness to foreign investment, he called for reciprocity from the emerging economies and a two-way process. Across the world, investment needs to be a two-way process. So just as we welcome investment here, there needs to be a level-playing field for British investment overseas. Openness should be a commitment by all, he said. Britains highly-advanced financial and legal services sector has long been waiting for financial sector reforms in India. 

Saying that the biggest challenges facing the world today are fierce global economic competition, rapidly expanding global trade and climate change, Mr Darling said, We must not allow globalisation to shape us to our disadvantage. Indeed if we do, people will understandably react against it. They will doubt its opportunities because they wont see them. On Britains future prosperity, he said, Hundreds of thousands of jobs in all parts of Britain depend on increasing trade and investment. 

While Mr Darling also pointed out that the need for international cooperation has grown more acute, and To be fully effective, we need the international system to reflect the realities of the changing global economy. That is why we have supported broadening the G7 and G8 dialogue to China, India and other emerging economies. A wealthier China and India will become bigger markets for the high-value added goods and services in which we are already world leaders. 

He pointed out that Britains history is defined by the its global outlook, and its wealth is built on it, and the key is to shape responses to the challenges of the future. Britain is investing as much in the intangible assets that are essential to equip ourselves for change in the new global economy  in innovation and intellectual property, software and skills  as it is in more traditional physical assets. Indeed, it suggests Britain is investing up to a quarter of its income in its future, he said. The governments key planks to preparing Britain for the future would be to maintain the stability that has been the foundation for its current economic success, to continue reforms (especially in the EU) to help meet competitive challenges from other countries; and to co-operate with other countries on collective challenges to everyones prosperity.


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## Bushroda

*Rlys to raise Rs 72,800 cr ($18 bln) for capex*
26 Jul, 2007, 0459 hrs IST, TNN

KOLKATA: The Indian Railways intends to raise Rs 72,800 crore($18 bln) from the overseas and domestic markets to part-finance its Rs 2,51,000-crore ($62.3 bln) capex plans for the next five years. It is considering possibilities of raising a portion of the requisite funds through external commercial borrowings and from multilateral funding agencies. The money will go into creating the proposed freight corridors, doubling of lines, electrification, gauge conversion and rolling stocks. We have recently submitted the proposal to the Planning Commission, VN Mathur, member traffic, Railway Board, said. 

Mr Mathur added, Of the Rs 2,51,000 crore, about Rs 90,000 crore will be Railways internal generation. We intend to raise about Rs 72,800 from the markets and this may also include ECBs. The Railway Board has also decided to approach multilateral agencies like the Japan Bank for International Co-operation to raise a portion of the funds. On the Delhi-Mumbai freight corridor, he said the railways has decided to set up logistics hubs and warehouses on the corridor to enable easy movement of goods. 

This is also expected to attract banks to these locations.


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## Bushroda

*American Tower chasing telecoms tie ups in India*
Tue Jul 24, 2007 4:45PM IST

NEW DELHI (Reuters) - Telecoms infrastructure firm American Tower Corp. said on Tuesday it was in talks with major Indian telecom operators for possible alliances.

Telecoms firms in India are looking to share infrastructure such as mobile towers to keep costs down and boost profits amid intense price competition and a surge in low-income subscribers.

Chief Executive James Taiclet said American Tower saw India as a high growth market, where a soaring subscriber base is driving demand for ever greater infrastructure.

"We've got plenty of financial capacity. We have substantial resources we can put into the country," he said at a press conference, without giving further details.

"We are initiating conversations, serious ones, with the carriers in the country ... to help create a commercial collocation passive infrastructure business," Taiclet said.

American Tower, which operates broadcast and wireless communications towers in North America and Brazil, might own or enter into joint venture or management partnerships with Indian firms, he said: "We are going to be flexible."

India is the world's fastest-growing mobile services market, with more than 6 million subscribers signing up each month, lured by tariffs as low as one U.S. cent a minute and the extension of networks to rural areas.

Taiclet said American Tower has the capacity and appetite for significant investments in the Asia-Pacific region. The company will open its regional headquarters in New Delhi and will name a regional president shortly.

"We already know who that is going to be and we are very pleased with the choice," he said.


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## Bushroda

*35 greenfield airports in India by 2010*
Monsters and Critics, UK
Jul 25, 2007, 11:15 GMT 

New Delhi, July 25 (IANS) India will have 35 greenfield airports by 2010 to keep up with the growth of the civil aviation sector, a senior official said here Wednesday.

'We expect 35 greenfield airports in the country to be operational by 2010,' Civil Aviation Secretary Ashok Chawla told reporters.

'We are investing over $35 billion in developing airports across the country given the fast growing civil aviation market in the country,' he said.

Earlier, inaugurating a seminar on 'Developing World Class Airport Infrastructure: Challenges and Opportunities', organised by the Foundation for Aviation and Sustainable Tourism (FAST), Chawla said that renovating and upgrading existing airports and developing greenfield airports were the only solution to meeting the current demand arising out of the fast growing aviation market.

FAST secretary general Gurcharan Bhatura said that India needed airports with world-class infrastructure according to the benchmarks laid down by the International Civil Aviation Organisation (ICAO).

'That is irrespective of the number of aircraft and their size, all departing passengers should be able to complete their normal departure formalities in 60 minutes,' he said. 'It includes luggage X-ray, airline checking, immigration, customs and security checks.'

On arrival, passengers should be able to complete all formalities within 45 minutes and leave the airport, he said. 

'The moot point is not the size of the airport or its capability to handle new generation aircraft like A380 or Boeing 777. Rather, it is with regard to its safety, security and efficient handling of passengers, freight and aircraft operations by providing adequate runway, taxiway and terminal capacities and quality service by friendly staff,' he said.

V.P. Agarwal, member (planning) of the Airports Authority of India (AAI), said the average passenger air traffic growth in India in 2006-07 was 29 percent while in cargo it was nine percent.

He called for more low-fare airlines to boost the market further.

'Induction of low-cost airlines and cheaper airfares will encourage and attract road and rail passengers to adopt air as a transport mode,' he said.

Stating that AAI manages 133 airports including 14 international ones and two joint ventures, he said, 'AAI will invest Rs.40,000 crore (Rs.400 billion or about $10 billion) in the next five years on developing airport infrastructure.'

He also mentioned that rapid vacation of runways and interconnecting all major airports with city centres by metro trains were being planned.

Addressing the gathering, Shailesh Pathak of the Infrastructure Development Financing Corporation highlighted the opportunities existing in public-private participation in airport development.

Representatives of various airlines, aviation training schools, government and other stakeholders participated in the seminar.


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## Bushroda

*Gas from ONGC's KG basin to flow from 2012* 
Shweta Rajpal Kohli
Tuesday, July 24, 2007 (New Delhi):

Oil and gas major ONGC had serious differences with the upstream regulator over the authenticity of its KG basin finds.

More than six months after ONGC announced its KG basin deep sea gas find, India's largest exploration firm finally has some idea of how much gas lies below the waters of its KG basin block.

ONGC plans to produce 12 mmscmd gas from KG 98/2 block and the gas is expected to start flowing from 2012. Total reserves right now stand at 2 tcf as against earlier reports of 20 tcf.

The numbers for ONGC's KG find may seem quite disappointing given earlier estimates of around 20 tcf and when we compare them to Reliance's mega find in the same area.

Reliance's estimates range between 35-50 tcf but ONGC's management insists it is being a bit conservative given strict disclosure norms and hopes that the actual number will be much higher.

"We never said 20-21 tcf, Director General of Hydro Carbons has approved 2 tcf and we will stick to that for now," said R S Sharma, Chief Managing Director of ONGC.

Infrastructure sharing

But the good news is that the differences with the upstream regulator over its gas find seem to be over. The company plans to wrap up the appraisal process by next month and submit the development plan next year.

And going ahead it may even join hands with rival Reliance Industries to share infrastructure in KG basin. For now ONGC has managed to rope in gas transmission company GAIL for marketing and transportation and to set up pipeline infrastructure for its new finds.

"With ONGC's finds in KG Basin and Mahanadi we are hoping to develop infrastructure with them," said U D Choubey, Chief Managing Director, GAIL.

But even as more and more finds are all set to alter the demand and supply scenario in the years to come. The big question that still remains unanswered is the price that the producers will get for this gas.


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## Bushroda

*GE Positions Itself To Profit From India's Freight Network Expansion*
Ruth David, 07.24.07, 6:18 PM ET
FORBES, NY

General Electric subsidiary GE Equipment Services has entered the Indian rail market by picking up a 15% stake in domestic freight car manufacturer Titagarh Wagons. The global giant is looking to target lucrative demand from Indian Railways as it opens up to private contractors. 

Indian Railways has around 230,000 freight cars now and will require 330,000 by 2010, said GE Equipment Services President Dhananjay Nalawade. This is where our partnership with Titagarh Wagons would come in handy, he told reporters in New Delhi. 

Neither company has divulged the cost of the acquisition. The General Electric (nyse: GE - news - people ) subsidiary will foray into producing railcars and setting up maintenance facilities in partnership with Titagarh Wagons, which is based in Calcutta, India. The Indian company, which started in 1998, manufactures freight cars, Bailey bridges--a kind of prefabricated truss bridge--and mining equipment, and its clients include the defense ministry. 

GE plans to make significant investments in India in the next few years. GE is looking at investing around $8 billion in India by 2010, a majority of which would be pumped in[to] infrastructure, said Nalawade. Faced with constant criticism over poor infrastructure, the government has estimated it will need around $350 billion in the next five years to ramp up power and improve roads, airports and ports.

Apart from GE, international companies like Toshiba (other-otc: TOSBF - news - people ) and Bombadier (other-otc: BDRAF - news - people ) are eyeing the Indian market as the government directs capital spending toward rail networks, particularly freight corridors and urban subway systems. 

The state-run Indian Railways, which runs more than 11,000 trains every day, is estimated to need nearly $15 billion for modernizing its existing fleet and for new additions. The railway ministry is using public- private partnerships with to raise the funds and supply the expertise needed to expand capacity.


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## Bushroda

*Retailers find growth in rural India*

*One chain that has moved into the vast farmlands offers such items as groceries, fuel and agricultural advice.*

By Shankhadeep Choudhury, Times Staff Writer
Los Angeles Times
July 24, 2007 

LATHI DHANAURA, INDIA  Lush green fields all around. The distant roar of tractors. The gurgle of piped-in irrigation water. And in the middle of this pastoral setting: an imposing store selling a variety to products including cosmetics fertilizers, seeds and toys.

"I don't need to go to the nearest town anymore," said 60-year-old Ranjit Singh, a local farmer who has been a regular at this rural department store for the last three years. "All my household stuff  grocery, agricultural commodities, my mobile phone and even the fuel for my tractor  is acquired here."

Welcome to rural India, the newest area to feel the retail boom this nation is witnessing.

The store, Hariyali Kisaan Bazaar, is capitalizing on a demographic reality here in the world's second-most populous country. Despite India's reputation abroad as a high-tech powerhouse and call-center magnet, more than two-thirds of its 1 billion people still live in the countryside, scattered among 627,000 villages.

Vast numbers of these residents of India's hinterlands remain mired in desperate poverty, subsistence farmers whose lifestyles are little changed from those of generations past.

But alongside them is a growing segment of rural dwellers of increasing means and spending power. Agriculture accounts for 27% of India's gross domestic product and 67% of the country's jobs. A study by the National Council for Applied Economic Research estimated that the Indian countryside had as many households of middle income and above as urban areas and twice as many households of lower-middle income.

That makes the countryside an appealing market for retailers willing to cater to agriculture-oriented customers and cope with India's often-dismal infrastructure. 

DCM Shriram Consolidated Ltd., a conglomerate with 40 years of experience in the Indian agricultural sector and annual revenue of $625 million, launched its chain of Hariyali Kisaan Bazaar outlets in June 2002. There are now 70 stores dotting the states of Uttar Pradesh, Punjab, Madhya Pradesh, Rajasthan, Andhra Pradesh, Uttarakhand and here in Haryana.

The stores tailor their inventories to the needs of local farmers, selling clothes, footwear, animal feed, irrigation equipment and even insurance.

The stores also use the promise of better quality control to win over customers who have often been unsure of the reliability and quality of goods and services sold by less scrupulous shops. Shoddy and adulterated goods are a problem in India's countryside.

"We used to buy petrol from shopkeepers locally  never a gas station. Very often, they mixed kerosene with the petrol," said Pramod Kumar, a 33-year-old farmer here in Lathi Dhanaura, a village in Haryana about 100 miles north of New Delhi. At the HKB store, Kumar added, "we get quality items at the best prices."

Suresh Kumar (no relation to Pramod), 25, who grows sugarcane, grams and lentils, said that in the markets of the nearest township, Ladwa, he and his fellow farmers from about 120 surrounding villages were often forced to buy whatever fertilizer was available.

"We did not even have the choice of buying the brand of agricultural inputs we wanted," Suresh Kumar said. "Moreover, bills or receipts were never issued."

Each HKB store usually operates in a catchment area of about 60,000 to 80,000 acres of farmland with about 15,000 to 20,000 households, said Vikram Shriram, DCM's vice chairman and managing director.

"HKB is unique as it embodies some of the key focus areas for India's rural development: investment in rural infrastructure, improving farmers' productivity and profitability, providing urban amenities to rural areas, aggregation of farm produce, access to information and use of information technology," Shriram said.

Many analysts say Indian farmers have been hampered by a lack of objective and timely advice on best agricultural practices, resulting in far lower yields from their fields than they might otherwise achieve.

At the Lathi Dhanaura HKB store, Jhabar Mal Yadav heads a team of three agronomists who provide 24/7 technological support to farmers.

"One of us usually stays at the store, while the other two venture out to the fields, delivering agri-advice to the farmers and ensuring adoption of modern practices," said Yadav, 34, who holds a doctorate in agriculture. "Through village-level meetings and crop seminars right at the fields, we tell agriculturalists which varieties of sugarcane and [rice] paddy to plant." 

Agriculture and rural India have also beckoned Amway India, a wholly owned subsidiary of Ada, Mich.-based Amway Corp., one of the largest direct-selling companies in the world.

Amway India, established in 1995, began commercial operations in May 1998 and has emerged as the largest direct-selling, "fast-moving consumer goods" company in India.

In 2001, the company introduced APSA-80, its only product for the rural market, a solution mixed with pesticides to enhance their effectiveness. Rajat Banerji, a spokesman for Amway India, said the solution commanded a market of more than $5 million in India and, besides its agricultural application, had been used in other interesting ways, such as lessening the dew on the field during the 2006 ICC Champions Trophy cricket matches in Mohali, Punjab.

To boost sales, Amway India began a program in which a sales van fully equipped with a generator, projectors, a digital screen, a public address system and display materials runs through villages on schedules and routes decided in consultation with local Amway representatives.


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## Bushroda

*Give these two the big push* 
Vinayak Chatterjee / New Delhi July 16, 2007 

Mumbai as an IFC and the Delhi-Mumbai industrial corridor both deserve to be aggressively implemented by the UPA government. 

The NDA government will always be remembered in infrastructure circles for the epochal National Highway Development Programme (NHDP). The present UPA government can certainly be credited with some good schemes  pushing PPP, forex for infrastructure, the creation of the Indian Infrastructure Finance Co Ltd, viability gap funding, airport modernisation, Bharat Nirman, JNURM, ultra-mega power projects, and even SEZs. These, however, have not quite fired the public imagination as the NHDP and the associated rural roads programme did. 

In this context, two new-age projects that have the requisite impact, and if properly pushed, can garner accolades for the UPA dispensation are Mumbai as an IFC and the Delhi-Mumbai industrial corridor. 

*Mumbai as an IFC*

This proposition has been presented very forcefully and professionally by the ministry of finance in an elaborate report. The finance minister himself has strongly endorsed the idea at a well-attended gathering in Mumbai this summer. Fundamentally, the idea is for Mumbai to replicate a London, New York or Singapore, which are at present the only global finance centres; and provide competition to other aspirants like Shanghai, Dubai, Paris, Frankfurt and Tokyo. 

There are five infrastructure challenges before the UPA Government in pursuing this path-breaking opportunity. They are:

- With its two financial centres being located in the Bandra-Kurla complex and Nariman Point/Fort in south Mumbai, intra-city drive times have become particularly critical. The linkages to the upcoming visionary SEZ in the immediate hinterland also needs to be factored in.

- A host of PPP solutions, based on user charges, need to be rapidly rolled out in order to alleviate infrastructure constraints such as transport, power, water, sewage, drainage, railway stations and so on.

- The citys administrative structure would have to be revamped. In China, the four largest cities have been given provincial status, much like Delhi. The central policy focus needs to be on the empowerment of the city government to take economic and service delivery decisions, as envisaged in the 74th amendment. 

- Financial allocations for the city made by the central and state governments have to be realigned to reflect the public revenues they generate and the citys legitimate needs for infrastructure maintenance as well as planned urban growth and development. 

One suggestion floating around is turning Mumbai into a Special Administrative Region like Hong Kong. Such a one country, two systems mechanism similar to the arrangement Hong Kong has with China would release a burst of energy  administrative, financial and political. 

Master Card Incs recent survey findings put Mumbai at the tenth place in terms of the volume of financial flows, ahead of Shanghai, Hong Kong, Sydney, Singapore and Zurich. Ernst and Youngs Global IPO Report 2006 puts Indias (read Mumbais) IPO market as the worlds eighth largest. With these two shots-in-the arm for IFC proponents, a Hong Kong type solution is well worth considering. 

*Delhi-Mumbai Industrial Corridor (DMIC)*

Originally mooted by the Japanese as a high-speed bullet-train type dedicated passenger route, it was then transformed by the Planning Commission, PMO and the railways into a freight corridor for three reasons:

- A high-speed passenger corridor would be seen as elitist;

- Higher axle-loads on freight trains would necessitate fresh sections of track and the strengthening/revamping of bridges, culverts and tunnels. It was better to do this afresh for freight and leave passenger trains to consequently increase speeds on existing tracks vacated by slower freight trains; 

- The acquisition of rolling-stock and freight train operations on a PPP basis was seen to be financially and administratively less burdensome than for the passenger. 

The Japanese were not particularly pleased, but nevertheless, the high-speed passenger corridor became a dedicated freight corridor. All this was happening as the SEZ frenzy was at its peak, and all concerned saw the great land value potential alongside the freight corridor. Surely enough, proposals flew in thick and fast to develop all kinds of economic clusters and connectivities across the freight corridor and lo and behold, the dedicated freight corridor morphed into an industrial corridor! Holy water was sprinkled on this idea when the Prime Ministers of Japan and India met in Tokyo in December, 2006 and a collaborative MoU was signed. 

Japanese interest in this project is at an all-time high. Indias department of industrial policy and promotion is enthusiastically preparing concept papers for a $90 billion ($50 billion till a few weeks ago) investment programme. The initial concept note was presented by Kamal Nath to the Japanese Trade Minister Akira Amari in New Delhi on July 2, 2007. The project would be launched in January, 2008 and completed in the next eight years. It is expected to mark another glorious chapter of Indo-Japanese collaboration after Maruti and the Delhi Metro, and would be the highlight of Japanese Prime Minister Shinzo Abes visit to India in August, 2007. 

History has shown that mega-infrastructure projects in India (or for that matter, elsewhere in the world) require a combination of strong political championing, unique structural solutions and visionary professional leadership to make them happen. 

Five issues that are common to both the above-mentioned projects are:

- The availability of soft long-term capital of about 30 years duration. This is normally available only under overseas development assistance schemes like World Bank, ADB or JBIC.

- Buy-in from a multiplicity of stakeholders like state governments, local communities, NGOs, central government authorities, railways, ULBs and the like. These are best harmonised by creating an empowered authority under an Act of Parliament. This would be in keeping with the spirit of similar enactments for SEZs, NHAI, electricity and so on.

- The institutionalising of non-partisan, visionary, professional leadership and management, much akin to E Sreedharans in Delhi Metro.

- Continuing political support with some clearly identified cheerleaders. The signs are that P Chidambaram and Kamal Nath are warming up to the task for IFC and DMIC, respectively, but the enabling legislation should be designed to outlive the initial political champions.

- Putting on the ground complex administrative frameworks consisting of a web of steering committees, empowered authorities, holding companies, land banking entities and a slew of connected SPVs. 

Will the UPA government choose to move ahead purposefully? Watch this space.


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## Bushroda

*India Tata Motors Buys Jaguar,Land Rover -TV*
CNNMoney.com
July 26, 2007: 05:27 AM EST

NEW DELHI -(Dow Jones)- India's Tata Motors Ltd. (500570.BY) has acquired Jaguar and Land Rover, Indian news channel CNBC-TV18 reported Thursday, citing unnamed sources.

A Tata Motors executive however declined comment when contacted by Dow Jones Newswires.

"Tata Motors does not have any comments to make. Tata Motors does not comment on mergers and acquisitions," said Debasis Ray, head of corporate communications.

Ford Motor Co. (F), which owns the two brands, also said the report was inaccurate and that it was still evaluating options.   

Tata Motors, which makes buses, trucks and passenger cars, is India's largest commercial vehicle maker by sales.

Last month, Ford hired advisors to help sell Jaguar and Land Rover, both part of its Premier Automotive Group (PAG), in a move expected to reap as much as $8 billion, according to some estimates.


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## Bushroda

*Tata Motors starts JV with Fiat subsidiary*
Ajoy K Das 
Wednesday, July 25, 2007 23:28 IST

KOLKATA: Even as it aims to scoop up British marquee brands like Jaguar and Land Rover, Tata Motors has started working on a joint venture with Iveco of the Fiat Group for a manufacturing base for commercial vehicles in Russia. 

Currently, both Tata Motors and Iveco have separate commercial bases in the form of distribution arrangements in Russia.

The Russian venture is also likely to be the future manufacturing and distribution platform for Tata Motors World Truck that is slated to be unveiled in mid-2008 and is currently in the design stage at R&D facilities of Tata Motors and Tata Daewoo Commercial Vehicle Limited (TDCV), Korea.

The joint venture plan comes in wake of a memorandum of agreement signed between Tata Motors and Iveco, earlier this year and part of the overall collaboration agreement with the Fiat Group in domains of engineering, manufacturing, sourcing, distribution of products. 

Highly placed sources in Tata Motors said that a Steering Committee had been set up soon after the signing of the Memorandum of Understanding (MoU) with Iveco to prepare a feasibility of co-operation both in the short and long term. 

This committee, after detailed analysis of various global markets, particularly in emerging countries, had zeroed in on Russia. 

Tata Motors and Iveco have expertise in the Russian market that could be leveraged to set up a manufacturing base. A definitive agreement between the two companies will precede before work on the Russian joint venture gets underway, sources said. 

A Tata Motors spokesperson said that the company had no comments on the issue at this point of time. 

Though these are early days and the contours of the joint venture are yet to be etched, officials said that Tata Motors could be looking to a 50:50 partnership with Iveco for its Russian venture. 

Tata Motors and Fiat Auto have already announced the formation of an industrial joint venture in India for manufacture of passenger cars, engines and transmission for domestic and global markets. The Tatas are also distributors of Fiat branded cars in India.

Both Tata Motors and Iveco have the entire range of light, medium and heavy commercial vehicles, as also Daewoo branded commercial vehicles in their portfolio. 

However, according to the tentative plans, medium and heavy commercial vehicles will be the focus for the Russian manufacturing base, at least in the initial entry point.


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## Bushroda

*Renault-Bajaj to drive $3K car*
27 Jul, 2007, 0200 hrs IST,
Nandini Sen Gupta, TNN

NEW DELHI: French carmaker Renault is close to tying up with two-wheeler major Bajaj Auto for a brand new global platform that would make the $3,000 car. According to sources in the industry, an announcement is due next week regarding the joint development of a platform for both light passenger vehicles and goods carriers. When contacted, Bajaj Auto MD Rajiv Bajaj refused to comment. 

Sources said a top-level Renault team was in India last week to discuss the proposed partnership. The alliance will set up the new platform at a new site (not the Chennai plant that Renault is jointly developing with M&M and Nissan, nor Bajajs Chakan or Akurdi plants in Pune). The cars and goods carriers made would be sold in India as well as abroad. 

While there had been speculation that both Nissan and Renault would partner with an Indian company for the $3,000 car, Bajajs alliance would only be with Renault. ET had reported about Renault initiating talks with Bajaj Auto on July 13. Renault went for a new partner for the $3,000 car after its current Indian ally Mahindra & Mahindra indicated that it was not interested in the project. 

M&M reportedly did not see it as its core competence as its long-term strategy is to be a global player in the SUV segment. It also felt that a sub-Rs 2-lakh car would not bring in the kind of margins that would justify the size of the investment. M&M vice-chairman Anand Mahindra could not be contacted. 

According to international media, Renault officially indicated its plans for an alliance with Bajaj Auto on Thursday. A Renault spokeswoman was quoted as saying: We have had contacts with Bajaj Auto and that was about the $3,000 car, but we are still in a phase of making up our mind. 

The French company apparently zeroed in on the Pune-based two-wheeler major after holding talks with it over a range of light commercial vehicles. M&M already has a commercial vehicle tie-up with American company ITEC and, therefore, was not an option for Renault. 

Currently, Renault has two separate joint ventures in India with M&M. One is Mahindra Renault, a largely marketing company, which is selling Renaults low-cost sedan, Logan, in India. The second is a three-way venture among Renault, Nissan and M&M, which is putting up a greenfield plant in Chennai. Renault is also putting up a power train plant in India, as a 100% subsidiary. 

Bajaj Auto has already announced its foray into the light commercial vehicle market, with a product that would compete with Tata Motors successful Ace light truck. And like Tata  which has just launched Magic and Winger, two passenger vehicle versions of Ace  Bajaj is planning to chalk out a passenger vehicle concept, to be showcased at the Auto Expo next January.


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## Bushroda

*India&#8217;s future &#8211; out of the back office and into the shop window*
*In the last of our series, The Empire Strikes Back, looks to the next decade as corporate India takes its brands, and its skills, into the West*

Ashling O&#8217;Connor 
THE TIMES
27 July 2007

Five years ago, anyone suggesting that The Times of India, the world&#8217;s largest circulation English-language newspaper, could buy the Financial Times, arguably the world&#8217;s most prestigious business paper, would have been laughed out of the room.

This month, despite the Indian media group&#8217;s insistence that it is focused solely on a booming domestic market, the rumour was taken very seriously in private equity circles. 

&#8220;Confidence is an enormous thing,&#8221; said Toby Greenbury, co-head of the India practice at Mishcon de Reya and a director of the Indo-British Partnership. &#8220;Some businesses in India are growing very fast and they are using the money to become international companies.&#8221; 

Above everything, they believe the global stage is their &#8220;rightful&#8221; place, according to Sonjoy Chatterjee, ICICI bank&#8217;s UK chief executive. &#8220;Corporate India is really thinking big,&#8221; he said. &#8220;It has seen what is available globally and is no longer nervous.&#8221; 

Tata Motors, India&#8217;s largest car-maker, is believed to be lining up a bid for Land Rover, exemplifying the ambitions of corporate India. Inherently conservative after years of socialist containment, Indian companies are developing a propensity for risk. They are profitable, underleveraged and being offered access to debt by international banks, which are convinced of their long-term worth. 

They are no longer content being commodity players; they want the premium end too. If the first step in globalisation was for cost-conscious Western brand owners to move their production east, the next stage appears to involve in-sourcing the outsourcer. 

You don&#8217;t get more English than Wimbledon but this year there was a hidden Indian influence in SW19: the famous green and purple towels so treasured by men&#8217;s champion Roger Federer that he gives them to friends as Christmas presents. 

Few outside the textiles industry noticed last year&#8217;s &#163;15 million acquisition by Welspun, India&#8217;s largest exporter of terry towels, of Christy, the 150-year-old brand beloved of Queen Victoria and a former pillar of the Courtaulds Group. 

But the deal underlined a growing confidence among Indian suppliers to put themselves in the global shop window after years of being the back-office boys. 

Welspun is using Christy &#8211; the largest terry towel supplier to Marks & Spencer, John Lewis, Bloomingdale&#8217;s and Debenhams &#8211; to gain access to new markets. 

Christy, now an Indian subsidiary, is relocating its sole UK manufacturing facility from the North West of England to northwestern India. Welspun&#8217;s mill in Anjar, Gujarat, with capacity to make 5.6 million towels a year at a quarter of the cost of the developed world, will be fully operational by September. 

With the death of Britain&#8217;s textiles industry long declared, it is an inevitable shift and is indicative of India&#8217;s new position in the world order. 

&#8220;Many British people still think India&#8217;s a place for low-cost labour and call centres but the Indians own call centres in the UK now,&#8221; Peter Luff, the Tory MP for Mid-Worcestershire and chairman of the Trade and Industry Select Committee, said. 

The next five to ten years will only see corporate India gaining in confidence. British companies will attract more interest from Indian groups hoping to apply their back-end scale and access to Asian markets to a world-famous brand with access to Western markets. &#8220;Indian companies already have the manufacturing facilities but they need the front and the visibility,&#8221; said Ramesh Ahuja, chief executive of SBI Capital Markets, the State Bank of India&#8217;s corporate finance arm in London. &#8220;That&#8217;s why Tata bought Tetley. Because they thought they could add value. And there&#8217;s no stopping this for the simple reason that there are a lot of synergies between Indian companies and UK companies.&#8221; 

There are significant hurdles ahead, though, not least a danger that India could start believing its own hype. 

Tata Consultancy Services, India&#8217;s biggest IT services company, is still only 5 per cent of the size of IBM, the world leader. ICICI bank, India&#8217;s largest commercial bank with a market capitalisation of $25 billion (&#163;12.1 billion), is only one tenth the size of Citibank. China has five banks in the top 50 global list while India has none. 

&#8220;In almost all cases, Indian businesses have a long way to go to challenge the global majors,&#8221; said Alan Rosling, the Tata director responsible for the Indian group&#8217;s international strategy. &#8220;Western and Japanese companies enjoy advantages beyond scale, including superior brands, technologies and competences, and forward-thinking multinationals are turning to India to exploit the same cost and people advantages that underpin the competitive challenge of Indian companies.&#8221; 

Turning Bombay into a global financial centre so it can interact properly with London and facilitate trade flows is another huge challenge. The pace of reform by India&#8217;s central bank is slow. 

Meanwhile, Bombay is losing out to other emerging financial centres such as Dubai, and some Indian banks abroad continue to be focused solely on the $30 billion global remittance market, rather than becoming serious corporate financers. 

&#8220;All the Indian banks have operations in London but [corporate financing] has been the preserve of foreign banks with the large balance sheets offshore. It is hard for players out of India,&#8221; said Naina Lal Kidwai, chief executive of HSBC India. 

Immigration concerns in the wake of the failed UK terror attacks, for which three of the suspects include Indian nationals, may also slow India&#8217;s march on Britain. Students, in particular, may find it more difficult to get visas in the coming months. It will not, however, be a deal-breaker. 

&#8220;The debate will die down because you will just not have enough skilled people [in the UK]. The estimate is that by 2020 the developed world will fall short of 40 million people of working age,&#8221; said Sunil Kant Munjal, chairman of Hero Corporate Services, an arm of India&#8217;s $3.2 billion Hero Group.


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## Bushroda

*Incredible India website goes commercial* 
Press Trust Of India / New Delhi July 26, 2007 

The tourism ministrys Incredible India website today acquired a business dimension with the launch of an e-commerce platform that will allow firms to conduct a host of travel-related activities. 

The platform, developed jointly by the ministry along with EVIIVO, a tourism e-commerce company, is accessible on the main site www.Incredibleindia.Org and will facilitate small and medium industries to conduct a host of travel related business activities, mainly booking of accommodation at the destinations. 

Terming the e-commerce platform as one of the most effective way of access to the tourism products, Tourism and Culture Minister Ambika Soni said the platform will strengthen our visibility on the internet. 

Launching the e-commerce platform, Soni said the website had proved to be singularly the most effective way to increase tourist inflow  from 3.9 million to 4.43 million from year 2005 to 2006. 

At this pace, I am sure we will be able to meet our 10 million arrivals mark in 2010 when Commonwealth Games will be held, Soni said. 

She said apart from the SME (small and medium enterprises) the business portal is expected to substantially benefit the medical tourism in the country.


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## Bushroda

*Indian stock market crashes by over 500 points*

Mumbai, July 27: Indian stock markets crashed Friday and led a key index to shed more than 500 points, taking cues from weak global markets and large-scale selling in heavyweight stocks.

The sensitive index (Sensex) of the Bombay Stock Exchange (BSE) witnessed its sharpest fall since April 2, with the barometer index dropping 541.74 points, or 3.43 percent, to close the day at 15,234.57 points. 

At this level, the index is at its lowest since July 12. It had shed 4.7 percent on April 2.

The index opened weak at 15,487.76 points Friday, down 288.55 points from the previous day's close at 15,776.31 points. Soon after, it touched the day's high of 15,495.51 points. 

By noon, however, it fell to the day's low of 15,159.68 points and settled at the current level after wild fluctuations. The mood was gauged by the fact that as many as 27 out of 30 shares that go into the Sensex basket ended in the red.

"After the bull run we have seen for the past few weeks, a correction was bound to happen. This drop cannot be taken as something negative. It was a correction, triggered by global developments," said an analyst with a brokerage here.

"The decline in the global markets and the prediction of higher inflation rates on the domestic front have affected the investors' sentiments which has led to the selling pressure," said PHD Chamber president Sanjay Bhatia.

Possibly, the higher interest rates have begun to have a negative impact on the corporate earnings, which may have affected the investors' perceptions, he said, adding that the fall Friday was a technical correction.

In a similar vein, Venugopal N. Dhoot, president of the Associated Chambers of Commerce and Industry (Assocham) advised the investors not to panic, wince the Indian economy fundamentals were strong.

"This is a temporary phase and stock market would give the corrective evaluation of the state of the economy."

The three Sensex shares that bucked the trend were ITC, up 3.12 percent at Rs.171.80, Ranbaxy Laboratories, up 0.40 percent at Rs.374.90, and Ambuja Cement, up 0.28 percent at Rs.125.05.

Tata Steel, on the other hand, led the losers, down 7.37 percent at Rs.651.60, followed by Reliance Communications, down 5.65 percent at Rs.537.35, and Bharat Heavy Electricals, down 5.40 percent at Rs.1,660.40.

Housing Development Finance Corp, Hindalco, Larsen and Toubro, Reliance Energy, Satyam Computers, Oil and Natural Gas Corp and HDFC Bank were also among those shares that shed ground Friday. 

--- IANS


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## Bushroda

*Currency Conundrum: Is the Strong Rupee Good or Bad for India?*
Knowledge@Wharton
Published: July 26, 2007 

History has been unkind to Canute. The 10th century king of England was so tired of his fawning courtiers that he took them to the shore and commanded the waves to roll back. It was to be a demonstration of the limitation of his powers. But Canute in popular perception is the man who tried to turn the tide and failed. 

Today, India's finance minister P. Chidambaram and Y.V. Reddy, the governor of the Reserve Bank of India (RBI), India's central bank, face Canute's predicament. In the public mind, they seem to be trying to reverse an inexorable inflow of dollars and its consequence -- an appreciating currency. Once traded at 47 or 48, the rupee now hovers at 40 to the dollar. Observers call it the fastest appreciation of the Indian currency in three decades. 

Is the rising rupee good or bad for India? What impact will it have on the global competitiveness of Indian firms? Should the RBI or the Finance ministry intervene? Responding to these questions and more, experts at Wharton and elsewhere say that the rupee's rise is the result of India's growing ability to attract global capital. While this creates problems for some companies that earn most of their revenues in dollars -- including IT giants such as Wipro, Infosys and TCS -- it also creates opportunities for Indian firms by making it less expensive for them to acquire overseas assets. In addition, a strong rupee is good for the Indian consumer. It would be unwise for the government to intervene to force down the rupee's value, they note. 

*What's Driving the Rise?*

Dollars are pouring into India. Net investments by foreign institutional investors (FIIs) were $10.16 billion during January-June 2007. This is more than the $8 billion recorded in the whole of 2006. July has beaten all records with an inflow of $5.81 billion (so far). The FIIs are chasing Indian stocks and taking the markets to what many feel are levels of irrational exuberance. The bellwether Bombay Stock Exchange (BSE) Sensitive Index (Sensex) was 15,732 on July 23 against 12,455 on April 2. (Incidentally, that day's low -- the Sensex plunged 617 points during the day -- was caused by the RBI's attempts to control the rupee.)

The foreign direct investment (FDI) numbers are equally impressive. In 2006-07, FDI inflows touched $19.53 billion, a 153% increase over the previous year. (This figure includes private equity and also $3.5 billion in reinvested earnings.) The government is looking at a target of $30 billion in 2007-08. Foreign exchange reserves stood at $214.84 billion on July 6. This is a far cry from $5.8 billion in the dire days of March 1991, when India had to pledge its gold to stave off a default crisis. 

External commercial borrowings of Corporate India were $12.1 billion in April-December 2006, an increase of 33%. Remittances from Indian workers abroad -- principally in the Gulf -- rose 15% to $19.6 billion in the same period. And non-resident Indian (NRI) deposits, attracted by better interest rates, were also up 35% in 2006-07 to touch $3.8 billion. These foreign exchange inflows have pushed the exchange rate to around Rs 40 to the dollar. The rupee has risen nearly 10% against the dollar this year. It has appreciated more than 14% from a low of 47.04 in July 2006.

*Painful Squeeze*

Wharton finance professor Jeremy Siegel notes (in his podcast) that a rising currency can cause distress. "This is painful. It's been the strongest appreciation of the rupee in over 30 years as I look back at some of the data," he says. CEOs of IT companies would agree with that assessment. Speaking at a press conference at Wipro's Bangalore headquarters on July 19, chairman Azim Premji complained about the "strong headwinds faced by us in the form of the appreciating rupee." Wipro reckons that its operating margins were lower by 2.4% in the first quarter because of the currency appreciation. Most IT companies -- the poster-boys of India's economic liberalization -- are in the same boat; they have been unable to meet their forecasted quarterly earnings. Their shares have been beaten down on the bourses, even as the markets are hitting new peaks.

Infosys chief mentor N.R. Narayana Murthy notes, "It (the rupee rise) is a macro-economic issue. I am not worried about factors which are out of my control." Others aren't taking it as easy. "A rising rupee can have a large impact on Indian exports and it could erode our competitiveness in the global market," IT firm Satyam founder and chairman B. Ramalinga Raju told The Economic Times recently. "Countries such as China are continuously suppressing the value of their currencies. So they may have an edge over us.... The government should intervene to bail out exporters who have been hit by the strengthening rupee." (The Indian government has announced a $3.5 billion package to provide relief to exporters in several sectors. But that has been deemed by many as insufficient.)

Jagmohan Singh Raju, a professor of marketing at Wharton, points out that smaller firms, including those "that rely on the U.S. market are clearly hurting. Companies such as Infosys and Wipro are feeling the impact, [but] smaller companies -- garment exporters and auto-part suppliers -- are hurting even more. Many of them banked on the dollar appreciating routinely after signing a contract. Now it is the other way around. I think these companies will be affected more than IT companies."

The Confederation of Indian Industry (CII) says that the worst hit are the textile and leather sectors. While individual exporters and companies have their woes, some complain of damage at a macro-level. A survey by the Federation of Indian Chambers of Commerce & Industry (FICCI) says sectors such as automobiles, consumer durables, food and food processing, gems and jewelry, textiles, handicrafts, and metal and metal products will be particularly impacted. "While the market should determine the exchange rate in the long run, sharp fluctuations in the short term create problems of adjustment for domestic industry," says FICCI president Y.K. Modi. The most affected, he says, is the small and medium enterprises (SME) sector.

*Government's Role*

When companies and industry organizations complain about such issues, the veiled -- and sometimes not-so-veiled -- argument is that the government should step in to provide support. Should it? 

"My feeling is no, they should not intervene," says Siegel in his podcast. "My historical studies showed that a lot of the 1997 crisis was because currencies did not appreciate. That was during the era of fixed exchange rates in Thailand, Taiwan, Indonesia and the Philippines. And by not letting them appreciate, they actually attracted more capital. By letting it appreciate, people are a little bit more cautious because it looks a little more expensive now. And all of the capital that came in -- they couldn't deploy it favorably, and the result was over-consumption, deficits and then finally devaluation."

"I think it is best not to interfere," agrees Wharton's Raju. "Some correction should take place by the end of next year as U.S. expenditures outside decrease." Raju adds that in the short run, "A case can be made to support the very small exporters. But the right way is to allow the rupees to flow out. Let Indians invest in the U.S. -- not just companies, but also individuals. Some recent steps are in the right direction. More can be done."

Montek Singh Ahluwalia, deputy chairman of India's Planning Commission and one of the principal architects of the country's economic reforms, believes that the Reserve Bank and Finance ministry face a difficult set of choices. In an interview in his New Delhi office, he told India Knowledge@Wharton that, "This is a balancing act that the Reserve Bank and the Finance ministry have to play. It is a reflection mainly of the trilemma that economists face; you can only have two out of three things. If you want to have a stable currency, an independent monetary policy and capital account convertibility, you can't have all three. You have to give up one."

According to Ahluwalia, "The positive feeling about the Indian economy is bringing in a lot of capital. The only way you can absorb this capital is to let the exchange rate appreciate." He recognizes that "many people feel the appreciation has gone beyond what is reasonable. But this is a balancing act. What else can the Reserve Bank do? It can intervene to stabilize the nominal exchange rate, and that will generate some liquidity. It can stabilize the liquidity, but that will impact the exchange rate. Whatever it does, there will be some problem. What the Economic Advisory Council has said is that it can do these three things, and it should do a little bit of each."

In an effort to force down the rupee's value, under normal circumstances, the RBI would have bought dollars from the market. This releases rupees which the RBI then tries to mop up by issuing debt instruments. But the RBI has bought some 28.4 billion in dollars between January and May 2007 and it has to draw the line somewhere.

The sloshing liquidity leads to inflation, which is not politically palatable either. Indeed, the RBI sees controlling inflation as its prime mandate. As measured by the wholesale price index, inflation has come down to around 4.3% now, against 6.7% in January. But analysts warn that the trend may reverse soon.

The RBI has pulled out all the weapons in its armory. It has raised benchmark interest rates seven times since October 2005. It has sought to suck liquidity out of the system by increasing the cash reserve ratio (CRR), the amount banks have to keep with the central bank. Explains S.S. Tarapore, former deputy governor of the RBI and the man who has prepared two roadmaps for the full convertibility of the rupee: "While, until recently, the RBI has been intervening in the foreign exchange market buying dollars, the resultant release of domestic liquidity has required the authorities to issue bonds under the Market Stabilization Scheme (MSS), absorb liquidity under the Liquidity Adjustment Facility (LAF) through the reverse repo facility (surplus liquidity in the market is placed with the RBI at a rate of interest of 6%) and to increase the CRR. All this has costs. But these measures have increased interest rates in India and stimulated even larger capital flows."

Economists and India's money mangers are divided on the virtues of a strong rupee and what the RBI should be doing about it. "I have always argued that we should not intervene much on ups and downs of exchange rates. Let market forces determine that," Satish C. Jha, economist and member of the Prime Minister's economic advisory council, told The Economic Times recently. "We can't forget that the rupee has remained undervalued for quite some time. I feel it will get stronger and will hover around 38 in the next two years. We have seen a strong inflow of foreign capital into the market. How can we expect the rupee to depreciate?"

The rupee will stay strong, says analyst Jamal Mecklai. Speaking to exporters at a seminar on "How to deal with the new improved rupee," held in Mumbai recently, he said this was a period of churn. Big export houses, he added, had weathered the storm because of their professionalism. The small companies should similarly get their act together.

"It is obvious -- from the recent paroxysm in inflation followed by the trauma in the forex market -- that control processes have run their course and, appearances notwithstanding, the Indian economy is being run largely by the free flow of capital," wrote Mecklai in Business Standard. "The increasingly aggressive bleating we are hearing about the strength of the rupee is clearly coming from sources that don't recognize this."

*How Should Companies Respond?*

"Exports are about job creation, not dollar creation," says Ajit Ranade, chief economist of the Aditya Birla Group. "Unlike earlier, we are not starved of dollars." Ranade says you cannot compare the situation in India with that prevailing in, say, the U.S. The so-called free markets in India are not free and allowing market forces full play has atypical outcomes. "Look at our export-import basket," he says. "Our three principal imports are crude, gems and jewelry, and capital goods. Crude prices are still administered. And gems and jewelry and capital goods do not affect inflation. It would be different in the U.S. But, in the Indian context, a stronger rupee does not mean lower inflation.

"Now look at our exports. Leave IT and software aside for the moment. Some 65% of our exports come from the SME segment. There are 15 million workers in this sector. The SMEs have profit margins of barely 5-10%. If the rupee rises, as it has, their entire profit gets wiped out."

If inflation is unpalatable, the scale of job losses that could take place in the SME sector is even more so. "Total exports are about 20-21% of GDP," points out Ranade. "The entire agricultural sector is less than that."

Wharton professors have words of advice for companies that feel stretched by the rising rupee. Krishna Ramaswami, a professor of finance, points out that Indian companies may not be affected much "if their international competitors' currencies have also appreciated, though he admits that they "may lose some share of their sales in the U.S. market and have their margins squeezed if not." He recommends that these companies could "hedge their currency exposure if they do not already."

Raju of Wharton's marketing department agrees. His advice to Indian firms that are feeling pinched by the rupee: "Do not rely on the U.S. market too much. Get more business in Europe. The euro and the British pound are appreciating with regard to the Indian rupee." Raju believes that just as some companies are hurt by the strong rupee, others benefit from it. "Airlines benefit. It is now cheaper for Indians to travel to the U.S. This is also a great time for Indian companies to buy equipment and technology products from the U.S. Companies that buy components from the U.S. are in good shape. It is a lot cheaper for an Indian PC manufacturer to buy an Intel chip or a Motorola phone. Mobile phone operators benefit from the strong rupee."

Management professor Saikat Chaudhuri recommends that companies would do well to stop complaining and take advantage of the rupee's rise to drive through essential changes. "I don't understand the cribbing," he says. "As the Indian economy grows, the rupee will grow stronger. You can't get the benefits of globalization without feeling the other effects. My view is that there should be a renewed imperative for IT firms to go for high-end work across all industries." Chaudhuri adds that the stronger rupee should make it easier for IT firms to set up operations abroad. "That would be a good trend. Also, resource utilization will have to become better." 

As for manufacturers, one thing could make things easier for them, Chaudhuri points out. "Right now, costs are high because of weak infrastructure. As India's infrastructure improves, those costs will come down. As freight corridors are built and airports are finished, that will help the manufacturers absorb the downside of the appreciating rupee." He also believes that the strong rupee could help companies drive through some strategic deals. "The strong rupee is good for Indian companies seeking to make acquisitions abroad. When your deals are worth billions, it makes a difference. We all like it when our money is worth more."

According to Siegel, "It is painful for the exporters, but look at the other side of the coin -- the consumers. A strong currency is good for a country; it's not bad for a country. They shouldn't just be beholden to the exporters. They should listen to the consumers, who are going to gain undoubtedly because of the strong currency."


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## Bushroda

*Govt to support India Inc's global quest*
27 Jul, 2007, 2103 hrs IST, PTI

NEW DELHI: Finance Minister P Chidambaram on Friday asked Indian industry to go global and assured that the government will help them in raising capital for acquiring businesses abroad. 

"We must look beyond 9 per cent growth, which is possible only through inorganic way," he told captains of the Indian industry at the NDTV Profit business leadership awards here. 

International Monetary Fund has revised upward its forecast for the growth of Indian economy to nine per cent and various other agencies were also estimating between 8.5-9.0 per cent GDP expansion, he added. 

Chidambaram said while companies must grow organically in the domestic market, they would have to go out and buy businesses abroad for expanding. 

"We all felt delighted when Tatas acquired Corus and all the major Indian companies should make efforts to become among the top five global brands," he said. 

"If you (companies) want money or capital, the government will support in raising the required funds," he added. 

The finance minister said Indians were already working with top global companies in advertising, public relations and many other sectors and it was time to realise that Indian industry will have to become globally competitive.


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## Bushroda

*Recruiting agents to help in skills upgrade scheme for emigrants*
New Delhi, July 27, 2007
27/7/2007

The Indian government will rope in recruiting agents to help identify trades and skill gaps in which potential emigrant workers can be imparted training before they move abroad for employment.

The Ministry of Overseas Indian Affairs (MOIA), in association with the Ministry of Micro, Small and Medium Enterprises (MMSME), will be rolling out a countrywide skills upgrade programme, tentatively from September 1.

The two ministries have decided to select five reputed recruiting agents from the eight Protector of Emigrants (PoE) offices.

"They will be involved in the training programme and will help in identifying trades, skill gaps and requirement of skills by foreign employers besides sourcing of trainees," an MOIA official told IANS.

The government has also identified six institutes where the potential emigrants would be sent for training - the Central Tool Room, Ludhiana; the Institute for Design of Electrical Measuring Instruments, Mumbai; the Central Institute of Tool Design, Hyderabad; the Electronics Service & Training Centre, Nainital; the Central Institute of Hand Tools, Jalandhar; and the Tool Room & Training Centre, Guwahati.

Among the various occupations identified in which the workers will be imparted training are machinist, turner, fitter, tool and die maker, fibre optics technician, electrician (household appliances), electrician (industrial applications) and plumber.

Quality system and metrology, basic pneumatics and hydraulics, welding technology and motor winding and repair are also on the list, according to the MOIA official.

"Moreover, the PoE offices in Delhi and Chandigrah will also identify more trades and these will be added to the list," he said.

The duration of the various courses will vary from 15 days to three months. Each programme will also include an orientation and personality development course.

The MOIA and the MMSME had earlier this month signed a memorandum of understanding (MoU), according to which the MOIA will fund the training programme and the MMSME will implement it through its training centres across the country. 

The initiative is aimed at enhancing the image and perception of Indian workers abroad and equip them to be more competitive in an international working environment and promote greater job opportunities for Indian workers. 

There are over five million Indian workers abroad with 90 per cent of them based in the Gulf countries and Malaysia. In 2006 alone, over 675,000 Indian workers went abroad with emigration clearances. 

They contribute significantly to Indian economy by way of remittances.

However, in recent times, competition from countries like Bangladesh, Nepal, Pakistan, Sri Lanka, Indonesia and the Philippines has resulted in low wages and exploitation of workers. 

It was in this context that the MOIA decided to intervene and help Indian workers move up the value chain through this skills upgrade programme.


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## Bushroda

*Best Engineers are joining IT, says Infosys*
ibnlive.com
Published on Friday , July 27, 2007 at 21:09 in Business section 

New Delhi: Infosysthe IT bellwether that tops the list of the 'best employers' in the country has admitted that the software industry does eats away a major chunk of the creamiest lot of engineering graduates, churned out by top-notch institutes of the country like the IITs.

S Gopalakrishnan, CEO, Infosys Technologies does agree, to some extent, with the perception that the IT industry sucks up most of the engineering talent in India. 

"The IT sector continues to be the preferred option for engineering graduates because the whole area of computers is seen as a sunrise sector. The sector that has got a lot of global opportunities for the students. So, it will continue to be the preferred sector (for engineering graduates), he was quoted by PTI. 

Gopalakrishnan said that Indian economy needs more engineers and that the intake should be increased.

Over time, we have to re-look at increasing the number of engineering graduates coming out so that requirements of all sectors can be met. Today, that's not happening. That's why there is a skewed trend towards IT, he said.

On the issue growing wage inequality between IT professionals and others, Gopalakrishnan, said as more and more industry segments are becoming global, the gap between salaries of IT professionals and others is reducing. 

"Look at retail, telecom and manufacturing companies. As they become more and more global, actually they compete very well with IT companies in terms of compensation," he said.

The rupee appreciation "is an issue of supply and demand," Balakrishnan said. "The Indian economy is growing at 8% and attracting lots of capital, both debt and equity; there's a lot more money flowing in than out," he said. 

For Balakrishnan, whose firm got more than 60% of its revenue from US companies paying in dollars, the trend requires some complicated and aggressive hedging. 

Gopalakrishnan, has warned the Indian IT industry, already facing issues like wage inflation, high attrition rates and a strong rupee, that it cannot afford to sit on its laurels as global competition is on the rise. "We (Indian IT industry) cannot rest on our success to date," Gopalakrishnan told PTI in Bangalore. 

"It's all about what we are doing today, how we are going to compete tomorrow, which is going to decide your future. So, it's being relevant, continuously evolving and changing to meet the market requirements." Gopalakrishnan does not buy the argument that the Indian IT sector may witness slowdown after growing at a scorching pace in the recent years.

"The market opportunity is there for companies to grow. Business is there for companies to grow. Nasscom continues to project that the sector would grow at 25-30% in the foreseeable future. So, I think the opportunity to grow continues to be there."Given the size of the Indian IT industry today, it is in a much better position to meet the expectations, he said. 

"Top tier (Indian IT) companies are much larger today. They have a global brand, global exposure, they have strong leadership, large employee pool....they are in a much better position. 

"To stay ahead of the race, Gopalakrishnan said, the Indian IT industry needs to further enhance its value proposition, service offerings and its portfolio to meet market demand and what the customers are looking for as well as respond to changes which are happening in (market) environment and technology."We have to make sure that we address the talent needs of the industry. Definitely, we need to address the issue of an appreciating rupee," he said.


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## Bushroda

*Inflation rises to 4.41%* 
27 Jul 2007, 1249 hrs IST,PTI

NEW DELHI: Wholesale prices-based inflation rate increased to 4.41 per cent for the week ended July 14 from 4.27 per cent the previous week mainly on higher prices of fruits and vegetables, ragi, wheat, jowar, condiments and spices. 

The inflation numbers are still within the five per cent annual target of the Reserve Bank, which is due to review the monetary policy on July 31. 

The annual rate of inflation was 4.62 per cent in the corresponding week last year. 

Among the primary articles, prices of vegetables rose sharply by 7 per cent during the week, while those of cereals rose by 0.9 per cent. 

In the non-food articles category, prices of fibre rose by 2.2 per cent. 

Among manufactured products, rates of rice and bran oil rose by 3 per cent each, while imported edible oil, groundnut oil, cotton seed oil and oil cakes became costlier by one percentage point. 

However, the prices of sugar, jaggery and gingelly oil declined by one per cent. Also, prices of fish-marine and urad declined by two per cent and one per cent respectively.


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## Bushroda

*Andhra Pradesh to be the most favoured destination for investors: YSR*

Hyderabad, July 27 :Andhra Pradesh Chief Minister Y S Rajasekhara Reddy today said he was determined to continue with efforts to project the state as the most favoured destination for domestic and foreign investment for creation of employment opportunities.

Addressing the captains of the Indian industry at the National Executive Committee meeting of the Federation of Indian Chambers of Commerce and Industry (FICCI) here, Dr Reddy said employment was one of the major indicators of the economy's health.

It was government's endeavour to generate employment for its citizens by promoting industries by laying special emphasis on employment intensive sectors such as textiles, leather, gems and jewellery besides IT and ITeS.

The government was also keen on creating infrastructure to fully realise the state's potential.

Andhra Pradesh would also build a natural gas pipeline network across the state to supply gas from the Krishna-Godavari Basin to meet the needs of existing and new industries besides domestic consumers.

Due to investor-friendly policy, the state was able to attract more industries. The government was also providing several incentives to those putting their money in the state.


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## Bushroda

*Brisk pace amid financial market risks* 
Nagaland Post

India's growth rates have been scaled up along with those of China and Russia in the IMF's July update for the world economy, which is on a " brisk pace", with the emerging market countries leading the way. But, IMF points out financial market risks have also increased as credit quality has deteriorated in some sectors and exchange markets remain volatile.

For 2006, India's growth rate has been raised to 9.7 per cent, which should gladden the hearts of globalisers here, while projection for 2007 is 9 per cent, an increase of 0.6 percentage points over the April World Economic Outlook estimate of 8.4 per cent. These are calendar year projections. Taking note of China's sizzling growth, the revised figures for 2006 and 2007 are 11.1 and 11.2 per cent respectively but for the two Asian giants, the tentative estimate for 2008 is 8.4 per cent for India and 10.5 per cent for China. The oil-rich Russian economy is expected to grow by 7 per cent 2007 and 6.8 per cent in 2008.

The US role as the principal locomotive of the global economy is somewhat muted by the growth decline to 1.7 per cent in the first quarter. IMF says recent indicators suggest that the economy regained momentum in the second quarter, and with correction in the housing sector continuing, overall downside risks related to U.S. domestic demand have diminished somewhat. This view runs counter to the prevailing fears of problems in the sub-prime mortgage market spreading and investor appetite for debt instruments drying up, as US market reports say. IMF sees the American economy returning to potential by mid-2008 after a mere 2 per cent in 2007 and rising to 2.8 per cent in 2008.

World output estimates in PPP (purchasing power parity) terms, in IMF usage, would be 5.2 per cent in 2007, higher than the 4.9 per cent April estimate, and a similar growth in 2008. At market exchange rates, it would be 3.6 per cent in 2007 (a against 3.9 per cent in 2006) and 3.7 per cent in 2008.

Besides the emerging markets, especially of Asia, contribution to sustained global expansion comes from the above-trend growth in EU and Japan where, IMF notes, domestic demand is taking a more central role. Both euro area and Japan will likely maintain 2.6 per cent growth in 2007 with some moderation in 2008. While developing Asia, mainly China and India, will be the fastest growing region (9.6 and 9.1 per cent over the two years), higher growth is also projected for Sub-Saharan Africa and emerging markets in other regions.

Inflation globally is well contained but some emerging markets (including India) and developing countries face price pressures, especially from energy and food prices, the Update said. Oil prices have risen again toward record highs against the backdrop of limited spare production capacity and strong demand and the risk of oil price hikes remains a concern. In food, supply shortage and growing demand of grains for bio-fuels are pushing prices.

The Petroleum Minister Mr Murli Deora has already sounded an alarm signal for revision of retail prices if there is no let-up in the oil price surge as the average price for Indian crude has already risen by 18 per cent in the first half of 2007 with continuing heavy losses for the marketing companies under the present subsidized pricing system for users of petroleum products.

Inflation risks have increased the likelihood of central banks having to tighten monetary policy further, IMF said. In many advanced countries (EU, UK and Australia) and some of the emerging economies (Korea) interest rates have been raised during the year. According to IMF, consumer prices in developing countries combined will also be higher at 5.7 per cent in 2007 before declining to 5 per cent in 2008.

In RBI's July 31 review, policy orientation is likely to be greater towards price stability and a closer look may be taken on financial market trends, especially with reference to credit quality and the debt flows. According to IMF, consumer prices in these countries combined will also be higher at 5.7 per cent in 2007 before declining to 5 per cent in 2008.

On global imbalances, IMF says some progress has been made toward reducing risks of disorderly unwinding of global imbalances although protectionist pressures are a continuing concern. Given the still bleak prospects for a successful conclusion of the Doha Round of multilateral trade negotiations, protectionism, in some form or the other, in major industrial countries could become a real threat.

In a Financial Market Update on July 25, IMF noted that though improved fundamentals and positive developments were seen in their local capital markets, financial vulnerabilities have continued to exist in some countries. Strong macro-economic performance has continued to underpin overall financial stability. Banks and corporations in some emerging market countries have, however, tapped foreign capital markets leading to "overly rapid borrowing, which is further complicated by their foreign currency exposures".

In sum, risks have increased in credit and markets and credit markets could remain volatile in the period ahead with a further re-pricing of some credit products. "However, so far, our assessment is that this risk is likely to remain largely contained, although further adjustments are still possible," the Financial Market Update said.

World trade volume (goods and services) is estimated to decline from 9.4 per cent in 2006 to 7.1 and 7.4 per cent in the two years 2007-08. IMF projections show that while advanced countries will export and import less, in these two years, other emerging markets (with exceptions like China) and developing countries will continue to run trade deficits. Their imports would decline from 15 per cent growth in 2006 to 12.8 and 11.1 per cent in the next two years but their export growth would also slow from 11.2 per cent in 2006 to 11.1 and 10.7 per cent for the next two years.


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## Bushroda

*Overwhelming desire for full set of wheels*
By Dan McDougall 
New Zealand Herald, New Zealand
Saturday July 28, 2007

"Wheels truly show your status. If I had a four-wheeler I would have better marriage prospects in my village, I would be respected," says Bengali market stall owner Venkat Banarjee. "I have an old Honda motorbike, so I am looked down on. To be able to afford a proper car, with four wheels, that would change my life, it would turn things around."

Four wheels good, two wheels bad, is a middle-class mantra, and now Indian billionaire Ratan Tata is preparing to unveil the world's cheapest car to meet the aspirations of the world's fastest-growing consumer markets.

Taking shape in a controversial Chinese-style "special economic zone" on the outskirts of Kolkata, the "Indian Mini" or "People's Car" is a concept Tata believes will offer the "miracle of personal transport" to India's masses and make his company a huge international player.

The domestic and global automobile industry is keenly watching the development of this ultra-economy car, expected to be launched at the end of the year and sell at about 100,000 Indian rupees ($3200), half the cost of the cheapest car available, the Suzuki Maruti 800.

The firm has shrouded the prototype in mystery, although Tata has dropped a few hints: "It is not as small as a Smart. It is not a car with plastic curtains or no roof. It's a real car." Tata is involved with the project and reportedly vetoed the design of the wipers - one wiper, not two.

Tata Motors is India's largest commercial vehicle maker. Tata Steel, an arm of the conglomerate, is now the world's fifth-biggest steelmaker after swallowing up the Anglo-Dutch Corus Group for US$12.2 billion. Last week, the firm was linked with a buyout of Jaguar.

But rather than become a symbol of growth and modernisation for a nation, Tata's "People's Car" has quickly come to symbolise the David versus Goliath battle between India's super industrialists and impoverished farmers who claim their land was seized by the government to make way for the new plant.


In Singur, West Bengal, where the world's cheapest car will be produced, hundreds of farmers, evicted from their land to make way for the special economic zone, are refusing compensation "pay-offs". Instead of public consultation, an 1894 colonial-era land law was exploited by West Bengal's government to acquire the land for Tata.

Hundreds of people have been hurt as protests have turned into clashes with police. Protesters claim the land seized for the plant is the most fertile on the plains of Bengal. The government denies this and claims most of the 14,000 farmers have accepted compensation.

Driving across the monsoon-lashed landscape of Singur, agricultural life is still thriving. Most farmers are on the third crop of the season. "This plant is the absolute end of us because we know more will follow or it will expand and we will be squeezed out and forgotten about," said farmer Bishnupada Mondol, 36. "As things stand many of the farmers have accepted the cash, but they don't realise the long-term future.

"I know of a few neighbours who have been offered a job in the Tata plant, but in reality they are simple farmers; working on a production plant will turn out to be their worst nightmare. People here have large families and they will spend the money quickly, then look around them and realise they have no land, no income and no prospects. I, for one, will not give up my land."

Nearly 404ha of farmland is already fenced off beside the best highway in the state. A further 320ha has been targeted. The project is billed as key to the rejuvenation of West Bengal, a signal that the communist regional government is investor-friendly.

Over the past year the Indian government has received applications for 250 similar special economic zones, involving turning huge tracts of land into gated business enclaves with middle-class townships attached. The zones have become a time-bomb for the political classes but the message coming from government is simple: this is a time of change, for the better.

Environmentalists, while sympathetic to evicted farmers, claim bigger issues than land seizures are at stake. "What we are really worried about is the appalling congestion in India's biggest urban areas," said Anumita Roychowdhury, associate director of the Centre for Science and Environment in New Delhi.

"Once people start using cars it will be hard to get them back, and selling cars for bottom dollar and encouraging banks to offer finance plans is a recipe for disaster. Tata reckons he will sell a million of these things a year. This will be an environmental disaster."

There could be further bad environmental news. Ford Motor Company in India have plans to make a small car for India while Honda and Volkswagen are expected to follow suit. India's environmental lobby seem resigned to defeat.

"He [Tata] knows he is on to an absolute winner," says Roychowdhury. "In the new India, four wheels has emotional appeal, not just practical. It is hard to get people to see beyond their immediate desires."


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## Bushroda

*At Home and Abroad, What Value Do Non-Resident Indians Bring to Multinational Corporations?*
Knowledge@Wharton 
Published: July 26, 2007

In 1980, Vivek Paul left India to obtain his MBA in the U.S. and, after graduating, had the good fortune to be recruited by Jack Welch at GE. In 1999, he left his position as the global head of GE Medical Systems to join Wipro, the Bangalore-based IT services firm, which at the time had about $150 million in revenues. By the time Paul stepped down in 2005 as Wipro's CEO and vice chairman, the company had become a leader in global outsourcing, with revenues reaching $1.4 billion. 

Paul, who is now a partner with the U.S. private equity firm Texas Pacific Group, is a high-profile example of what some believe is a growing catalyst for the development of Indian business: non-resident Indians (NRIs) educated in the West -- often in the United States -- who participate in the overseas expansion of Indian companies or who help international firms expand their business in South Asia with a high degree of Indian "DNA." 

According to Jitendra Singh, a professor of management at Wharton and Ravi Ramamurti, professor of international business at Boston's Northeastern University, émigrés can help their countries of origin in a variety of ways, providing economic capital that may be in short supply domestically, providing "hard" skills -- like engineering training -- and "soft" skills, such as a more intimate knowledge of global business culture. 

Singh and Ramamurti have been studying the emergence of multinational corporations from emerging economies, including India. In late June, they organized a conference on this topic in Boston, sponsored by the Center for Emerging Markets at Northeastern University, and The Mack Center for Technological Innovation and the Center for Leadership and Change Management -- both at Wharton. The conference's papers will form the core of an edited volume of the same name, which the organizers hope to see published in 2008. 

In India, the contributions made by émigrés are not readily apparent in economic terms. "Overseas [expatriate] Chinese accounted for 80% or more of the inward FDI [foreign direct investment] into China in the 1980s and early 1990s, when that country opened up," Ramamurti says. By contrast, "Non-resident Indians (NRIs) accounted for 10% or less of inward FDI after India opened up. Most of the capital sent to India by NRIs was personal transfers to family and friends, not FDI."

Instead, NRIs bring a mixture of hard and soft skills, some of the latter quite subtle but still important. "The subtlest aspect can be a different set of aspirations and the confidence that they can be achieved, which can transform a firm's culture, if leveraged well," Singh notes.

"But in some industries, like pharma or biotech, or some other high tech industries," he adds, "there can be hard factors as well like research or production processes, or the use of technologies like recombinant DNA or cell fusion in biotech."

*Two Generations of MNCs*

"There are two types of Indian MNCs today," Ramamurti says, "first-generation MNCs that were created when India was a closed economy -- in the 1980s and before -- and second-generation MNCs that were born after India embraced globalization in the 1990s." 

At different political and economic stages, different skills were needed. "In theory, NRIs offered three potential advantages: cutting-edge expertise, a rich professional network in the West, and, in the case of high-net-worth individuals, capital," Ramamurti notes. "But these advantages were of limited use in dealing with the central challenge facing first-generation MNCs, namely, organizational transformation of their domestic operations."

"The most important contribution of NRIs to first-generation MNCs was probably indirect," he adds. "Through their outstanding professional contributions in the U.S. and Europe, NRIs established the credibility of Indian talent and added luster to the India brand. This cleared the way for Indian companies to sell their products and services in the West. And through their annual remittances of $20 billion or more, NRIs helped strengthen the Indian rupee, making overseas acquisitions more affordable."

In addition to capital, connections, and both hard and soft skills, non-resident Indians sometimes fill the role of "fulcrum," or ambassadors between foreign MNCs and their Indian subsidiaries -- and between Indian MNCs and their foreign subsidiaries or markets -- shortcutting much of the need for cultural education. "Multinational corporations that are increasingly interested in India are hiring such non-resident Indians or sending senior NRIs already on their staffs back to India," Singh says.

*What Qualifies as 'Indian'?*

Recent mergers and acquisitions in the steel sector -- such as Netherlands-based Arcelor Mittal -- have put Indians and Indian companies at the forefront in that industry. But can such companies still be considered 'Indian'?

"By a very loose definition," Singh says, "Arcelor Mittal can be thought of as an Indian MNC, but I tend to think of it as an MNC led by Indians. It is quite different from India-based companies that have most of their revenues or profits coming from India -- like Reliance or Bharti Airtel -- or, for that matter, Infosys or TCS, which have most of their revenues and profits come from outside India but are based in India. Arcelor Mittal has relatively modest India exposure, but it is a truly global firm."

"The nationality of MNCs has become a less meaningful concept as globalization has accelerated," Ramamurti says. "At one time, firms were headquartered in their country of origin and raised most of their capital at home before slowly expanding abroad. Today, in a world where people and capital are highly mobile, entrepreneurs can optimize where they incorporate their firms, in the same way that they might optimize the global supply chain. Just as products today are made with inputs from many countries, the modern firm is created with inputs from several nations, and therefore it is less and less meaningful to speak of the 'nationality' of MNCs." 

Ramamurti points to a variety of different kinds of cross-pollination between NRIs and firms, both Indian and foreign. "NRIs in the U.S. venture capital or private equity businesses have helped fund start-ups in India. Other NRIs became entrepreneurs themselves, often creating 'born-global' firms that, from day one, had a front-end sales or design team in the U.S. and a back-end operations team in India -- such as MindTree Consulting. Other firms did exactly the same thing but were headquartered in the U.S. and were therefore technically U.S. MNCs, not Indian MNCs, like 24/7 Customer, Cognizant and OfficeTiger."

Singh cautions that it is important not to overstate the importance of NRIs to the current boom. "Most of the India-based firms, like Reliance, the Tata group, the Aditya Birla group, the IT companies and many others, were in large part not led by NRIs or expats, although they may have contributed to such firms. So if a case can be made [for the importance of NRIs], it has to be a rather circumscribed one."

*Indians vs. Indians*

The outsourcing boom has highlighted growing competition between Indian workers -- both in service industries like call centers and in higher-value areas like engineering -- and workers in more advanced economies, like the U.S. This competition has deep political and cultural resonances and often has a sharp edge to it. The business success of NRIs often engenders some ambivalence, depending on where it takes place. The successes of Indians or Indian businesses abroad is most often cause for celebration and national pride; the success of NRIs, particularly those who either re-immigrate to India or split their time between several locations, is sometimes viewed as a bit of a mixed blessing.

"One problem I have seen on several occasions," Singh notes, "is the animosity that can sometimes develop between the NRIs and the local executive talent." He cites the hypothetical example of two graduates from one of the IIMs or IITs, who were classmates 25 years back, who meet again in an Indian firm which is starting to go global. 

"One of them has spent the last 20 years in the U.S. or Europe and developed world-class capabilities, say, in the biotech world. The other has made steady progress up the ranks while remaining in India. The only way the Indian firm can hire the NRI is to pay him compensation comparable to his global market value, or else they will not get him. Clearly, they cannot pay the other guy the same. While he is capable, his market value is much lower. Needless to say, if he finds out that his former classmate is doing two or three times better than him in overall compensation, he is not going to be happy about it. He sees the other guy as a little bit different than him, but that does not give full credit to his colleague's quite different human capital, which is recognized by the global marketplace. This will be a rather serious issue for Indian firms for the next few years."

Ultimately, Singh believes, this is a management issue which Indian firms will have to work through. "I think the leadership of firms that bring in such people are responsible for helping them integrate better," he says.


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## Bushroda

*India on the mind* 
Planet India by Misa Kamdar
Reviewed by Scott B MacDonald 

One of the interesting conclusions about Kenneth Pyle's book Japan Rising: The Resurgence of Japanese Power and Purpose is that the Asia-Pacific country is an adaptive power, "more likely to take cues from the unfolding international system". 

What is implied is that Japan is not likely to become a true

hegemon in the sense that it has universal values that have an appeal and spread to other countries in the fashion of the American, French, Chinese and Russian revolutions. 

As Sreeram Chaulia adeptly noted in his review of Pyle's book in Asian Times Online, Japan "looks destined to remain a cautious adaptive power that receives more from the international system but gives less". [1] The same cannot not be said of emerging India. 

According to Mira Kamdar, a senior fellow at the World Policy Institute and an associate fellow of the Asian Society, India is economically on the rise, very much plugged into globalization, and is increasingly a pivotal player in a changing international system. Along these lines, India's experiment with democratic capitalism has an increasing appeal across borders, especially those in lesser developed countries. 

In her Planet India: How the Fastest-Growing Democracy Is Transforming America and the World, Kamdar emphasizes India's soft power, the appeal of its democratic system, and growing economic success make it an exciting counterpart to more authoritarian China and a far more affluent (and wasteful and materialistic) United States. She states: "From combating global terror to finding cures for dangerous pandemics, from dealing with the energy crisis to averting the worst scenarios of global warming, from rebalancing stark global inequalities to spurring the vital innovation needed to create jobs and improve lives - India is now a pivotal player. The world is undergoing a process of profound recalibration in which the rise of Asia is the most important factor: India holds the key to this new world." 

Kamdar undertook Planet India "because I believe India matters as never before to a world in crisis". The old Western-dominated world order is in decline - as reflected by severe environmental problems, a sharp-elbowed scramble for natural resources, global terrorism, extreme inequity, and the spread of AIDS and other diseases. While the West has a high standard of living and remains an attractive pole for people around the world, the expensive nature of Western society cannot be easily replicated. Consequently, another model is needed, and India fills that role. 

According to Kamdar, "India's goal is breathtaking in scope: transform a developing country of more than 1 billion people into a developing nation and global leader by 2020, and do this as a democracy in an era of resource scarcity and environmental degradation." 

While Planet India is very much an India-first book, it clearly points to all the soft-underbelly problems of widespread corruption, poor infrastructure, socioeconomic inequality, water shortages, disease and pollution. For example, Kamdar notes: "India is a potential hotbed of the planet's most lethal pandemics. It is also rapidly becoming the capital of non-communicable epidemics, with rates of diabetes and heart disease as well above global averages." She also takes into consideration problems such as poor treatment of women, the underclasses, and others, not to mention Hindu/Muslim tensions that all threaten to derail Planet India. 

Despite the multitude of problems confronting India, there is a very active desire to change things. Since the early 1990s, reforms have unshackled the economy, breaking out of a more socialistic development mode. This is where India offers an alternative mode of development between a wealthy and out-of-reach lifestyle in the West and a rapidly growing politically authoritarian China. India must offer lower-cost solutions to global problems, such as disease. 

"But India is also where there is perhaps the most hope of finding ways to deal with these and other scourges on a scale that could actually serve the world's billions," writes Kamdar. "The high-cost regimens will only help a few of those afflicted. If India can find low-cost, convenient therapies, for example oral insulin therapies where patients don't have to inject themselves, the lives of millions of people will improve." This lower-cost approach extends to a host of other areas, including alternative energy. 

Kamdar has written an interesting and topical book that most Americans should read, especially as India will increasingly become part and parcel of US life - either through the growing numbers of Indians living and working in the United Sates, Indian products showing up in the marketplace, or jobs being sent offshore to Delhi or Mumbai. She correctly points out that Indians living in the United States "are one of the most prosperous and well-educated groups in America". 

That success increasingly has an impact on driving India and the United States closer together and in Indians in the US wishing to give something back to the land of their origin. This is certainly a factor in improved US-Indian relations during the years under presidents Bill Clinton and George W Bush, founded on a growing clutch of shared strategic concerns, including the terrorist threat poised by radical Islam and a rising China. 

India's rise also provides, according to Kamdar, a historical opportunity for the US in terms of a partnership: India and the United Sates, undoubtedly two of the world's great democracies, have a real opportunity to recall each other to the moral bedrock of their respective founding moments; to turn away from rampant militarism and save our environment. 

There is a growing sea of ink being spilled to cover the rise of India. In many regards, India is in a race between the weight of a large and growing population hit by rising expectations and a highly competitive world and finite resources. The great Indian experiment is one of the most significant events of the early 21st century, something Kamdar brings very much to life. Planet India is clearly one of the more noteworthy additions to the literature on India and is strongly recommended.


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## Bushroda

*Rise Of The Rupee*
*Tech companies and exporters are losing profits as the currency continues to rise* 
by Manjeet Kripalani and Nandini Lakshman 

On July 20, a group of Indian businessmen gathered in Mumbai to listen to a presentation entitled "How to Deal with the New, Improved Rupee." Yet for this crowdmostly smallish exporters of textiles and commoditiesthe rupee's 10% appreciation against the dollar this year feels more like a punishment than an improvement. Jamal Mecklai, the risk-management consultant giving the talk, explained that the currency's unprecedented show of strength is a sign of India's increasing importance in the global economy. "India has grown up," he said. 

And it has done so in a hurry. A key manifestation of globalization has been a rebalancing of the world's currencies, as the dollar has fallen to new lows and the euro has hit all-time highs. Few developments, though, have been as unexpected as the strength of the rupee, which since March seems to have turned from a perennial weakling into a surging up-and-comer. 

Blame it on India's red-hot economy. After decades of puttering along at about 3.5% a year, the country is averaging growth of 9% or better annually, powered by a vibrant info-tech services sector and exploding consumer demand. What's more, India is awash in foreign money: $25.2 billion poured in during the fiscal year that ended in March, up 25% from 2005, attracted by deregulation of sectors such as retail and real estate and a roaring stock market. 

Although the currency was decoupled from the dollar and made partially free in 1993, the central bank has since operated a "managed float," intervening in the market to smooth out volatility but not to hold down the rupee's value. However, the Reserve Bank of India has been largely overwhelmed by the foreign funds rushing inmoney it can't mop up completely without provoking inflation. So it unteathered the rupee. "It was hard to fight the tide," says Chetan Ahya, chief economist for India at Morgan Stanley (MS). 

Indians don't quite know what to make of the rupee's levitating act. Some say it puts the country's hard-won export gains in jeopardy: Exports now make up 13% of gross domestic product, up from 9% a decade ago (although still far from China's 38%). A particular worry is that India could be ceding ground to Asian economies that manage their currencies more activelynotably China, which has refused to float the yuan. "We are losing our competitiveness to China, Korea, Taiwan, and Singapore...and the Reserve Bank is allowing the rupee to appreciate?" growls New Delhi economist Surjit Bhalla. 

*WAGE SQUEEZE*

No sector is more exposed to the effects of a strong rupee than the dynamic IT services industry, which brought in about $35 billion in export revenues last year. The top four IT companiesTata Consultancy Services, Infosys Technologies (INFY), Wipro (WIT), and Satyam Computer Services (SAY)are all complaining that the currency's strength is crimping margins. Profitability across the sector fell by 8% in the most recent quarter. "The rupee pressure is a concern," says Azim H. Premji, chairman of Wipro. "We have to squeeze efficiencies in cost, operations, supply chain, and processes." Still, with margins of 25% to 30%, "the big boys are in a position to take a hit for a while," says Kiran Karnik, president of the powerful Indian software association Nasscom. 

The pressure, though, won't let up on the IT players. Wages have risen by more than 15% in the past year, and the effect is amplified by a strong rupee, since most of the companies' sales are in dollars. The strength of the rupee is "an additional reason to convince customers they have to help us," says Ramalinga Raju, chairman of Satyam, which boosted prices by an average of 2% in the first quarter. 

*BUYING BINGE*

India's manufacturers have taken it on the chin, too. "The appreciation was so sudden that we were unprepared, and it has beaten all of us in the short term," says Baba Kalyani, chairman of Bharat Forge, an auto-parts maker that gets 70% of its export revenues from the U.S. The giants, though, are in a much better position to withstand the pain than are low-margin businesses in textiles and apparel. A further rise in the rupee, says Suresh Ramrakhiani, economist at the Cotton Textile Export Promotion Council in Mumbai, could lead to job losses for up to 200,000 people. Really small exportersspice merchants, producers of brassware, and the likeare hurting the most. And these small and midsize enterprises contribute 60% of India's export earnings, according to the Associated Chambers of Commerce & Industry in India. 

There's one upside to the strength of the rupee: It makes purchases abroad cheaper. India's biggest companies have been on a buying spree lately. In January, Tata Steel took over Corus Group PLC, an Anglo-Dutch company five times it size, for $11.3 billion, the biggest of its 11 foreign acquisitions in the past year. A strong rupee will only serve to make such deals more attractive. 

No one knows whether this is a passing trend or a lasting phenomenon. Some say the rupee hasn't found its true level yet and predict that in coming months it will settle at around 38 to the dollar, compared with about 40 today. And many would argue that such discomfort is simply a part of making the transition to a fully convertible currency regime, which India aims to do by 2011. "India used to be a large country with a small economy," says Ajit Ranade, chief economist at Aditya Birla Group, a Mumbai conglomerate with operations in textiles, metals, chemicals, and more. "Now we are a big economy, and we should act like one." 

*With Steve Hamm in New York.*


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## Bushroda

*The East Also Rises*
28 Jul 2007, 0059 hrs IST,Kaushik Basu

India's eastern region, which has seen a steady deindustrialisation for over 40 years, is stirring and there seems to be reason for hope. Recently, in Patna, Bihar chief minister Nitish Kumar gave one of the finest speeches one could have heard by an Indian politician. It was given in elegant, rhetoric-free Hindi, and with virtually no notes. 

He spoke about the poverty line, the numbers living below it in Bihar and what should be done about this. He then sat through several sessions listening to professional economists, and later, in an informal group, talked intelligently about reviving higher education in Bihar. 

Orissa, under Naveen Patnaik, has also shown dynamism that was alien to the state. There are initiatives afoot to attract industry and set up a mega private university. Add to these the recent changes in West Bengal, and one perceives a glimmer of hope for an industrial resurgence in the long-somnolent economy of eastern India. 

I have been studying West Bengal in some detail. It has had one of the most stable democratically-elected governments anywhere in the world, a 30-year unbroken run of the Left Front government, led by the CPM, involving seven easily-won elections. In fairness, the deindustrialisation of West Bengal began before the communists came to power, but, in the early years, the party revelled in it, and the flight of capital from the region picked up pace. 

The CPM made it clear that it would not tolerate industrialists who did not employ workers on better terms, not pausing to think that there were other regions willing to tolerate such industrialists. Hence, the workers of Bengal were not employed on better terms; they were not employed. 

West Bengal, however, had success with agriculture, and was the region with the fastest agricultural growth in India through much of the 80s and 90s. But the highest growth that agriculture can sustain never measures up to what is achievable by the industrial and services sectors. Hence, ignoring these and driving away industrial capital meant that the region steadily lost out in overall terms. 

The West Bengal government cannot defend itself by arguing that it willingly gave up its initial advantage in the industrial and tertiary sectors and higher education in order to concentrate on poverty removal and primary education. 

The 2001 census shows that West Bengal, with a literacy rate of 69 per cent, is just a notch above the all-India average of 65 per cent and way below regions like Kerala (91 per cent), Maharashtra (77 per cent) and several others. The percentage of population below the poverty line in 1999 was 26 for India and 27 for West Bengal. 

As often happens with communist parties, change of policy had to wait for a change of person at the helm. 

In November 2000, the long-standing chief minister of West Bengal, Jyoti Basu, retired, and Buddhadeb Bhattacharjee took over. Buddha started out as an orthodox Marxist but had the intelligence to be wary of the party's wilful driving out of capital. He had had a famous falling out with Basu in the 90s. Later he seemed  though one does not think he was  repentant, and was allowed back into the CPM fold. 

Over the last three or four years an interesting dichotomy has appeared in the policy statements that come out of the CPM leadership. For every market-oriented reform that is announced by the Congress-led government of India, the CPM leadership  usually members of the politburo  is harshly critical. On the other hand, in recent years, in the state of West Bengal the same party has announced a series of capitalist-friendly policies, more gung-ho than anything the Centre has tried. 

In 2002, soon after the change of guard, the West Bengal government declared the information technology and IT-enabled sectors to be a "public utility service", using a special provision permitted under India's Industrial Disputes Act, 1947, so as to stop trade union disruption in that sector. There is no way the party would have tolerated something like this if it came from the Union government. Last year when India jettisoned its arcane commodity taxation system for the more market-friendly VAT system, the movement was spearheaded by West Bengal's finance minister, Asim Dasgupta. 

Whether this divergence between the statements of politburo members and those of elected leaders like Buddha is a sign of some fissure in the party or a deliberate strategy one has no way of knowing. My own hunch is that the party is now devoid of ideology. This is a desirable change since ideology can be a bit like religious fundamentalism. It can delude people into believing that the secrets of the world are written down in a little magic book. This ideological fatigue, akin to what happened to China in the late 70s, therefore, represents great opportunity for change.


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## Bushroda

*South Africa: Envoy to India Tells of Open IT Posts*
Lesley Stones
Business Day (Johannesburg)
27 July 2007

There are an estimated 60000 posts that need to be filled in SA's information technology sector, but due to a skills shortage they remain vacant, and that is jeopardising the country's chance of meeting its economic growth targets.

"Our economy is growing well but we have one Achilles Heel -- our people are not sufficiently trained to support the kind of economic growth we have and the 6% growth per annum we envisage," SA's high commissioner to India, Francis Moloi, said.

"At the moment we need about 60000 trained ICT professionals. And we need them yesterday," he said.

"The biggest challenge our government is facing is giving people the skills they need to support this economic growth."

Moloi was addressing a press conference hosted by Satyam Computer Services, where the New York-listed company outlined its plans to expand in SA.

Satyam is recruiting technology graduates from SA and putting them through intensive year-long courses in India.

Thirty South African students are based in Hyderabad.

After three months of classroom training they will be assigned to projects where they shadow Indian experts.

A pilot batch of 12 have already returned to SA to work on projects for Standard Bank and the Limpopo provincial government. Another 100 will be recruited for training from September, with the courses costing Satyam R340000 for every student.

Moloi said Satyam's training was one of the best programmes he had seen so far. "If you need more people we will scout around SA and bring them here," Moloi said. The government did not put any money into the initiative, but it would look "favourably" on foreign companies that were helping to alleviate SA's skills crisis .

Satyam's campus can train 3500 students a year, and the number of South African trainees could grow from hundreds into thousands, said senior vicepresident Virender Aggarwal. The constraining factor would be Satyam's ability to find them all meaningful employment afterwards. That made it crucial to earn the support of SA's government to help Satyam win enough work in SA to use all the students it intended to train.

Satyam supplies technology services to 165 of the Fortune Global 500 companies. It runs graduate training programmes for students from about 18 countries . Aggarwal said the best students from a mathematical perspective came from China and India, but the South African recruits were coping well.

"The South Africans are as good as any, and in terms of attitude possibly among the best."


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## Bushroda

*China, India key to building ACT economy, Stanhope says* 
The Canberra Times
Sonya Neufeld 

The ACT needs to build stronger links with economies like China's if it is to continue to grow and diversify, Chief Minister Jon Stanhope says. 

Ernst & Young hosted a China Economy briefing yesterday, bringing together members of Canberra's business community to discuss how to pursue business in the rapidly growing Chinese market. 

Speaking at the briefing, Mr Stanhope said Canberra's economic footprint was "minuscule" compared with China's. It is forecast that by 2041, China will have the world's largest economy. The country is the largest source of imports for Australia and our second-largest export market. 

Mr Stanhope said, "For Canberra to continue its trajectory of strong economic growth and diversify its economy further, it needs to build stronger links to the economies which are shaping the economic future of the globe".

"China and India are undoubtedly the best examples." 

The Stanhope Government has been working hard to strengthen business ties between the ACT, India and China, and earlier this year led trade delegations to both countries. 

"The message we took to China was about the diversity of the ACT economy, our track record and innovation and our city's position as Australia's leading knowledge-cluster economy," Mr Stanhope said.

According to figures from the Department of Foreign Affairs and Trade, the territory's relationship with China is building. 

In 2005, China was the ACT's fifth-largest trading partner and was its second-biggest goods export destination after the United States.

Mr Stanhope said the ACT's top exports to China were education and tourism. 

Of the 81,000 Chinese students enrolled in Australian educational institutions, more than 2000 were studying in the ACT. In the tourism sector, the territory received more than 20,000 Chinese visitors last year. The number of Chinese visitors to the ACT had risen by 171per cent since 1999. 

"China has a strong desire to further develop its services sector, and that's almost exclusively a service and knowledge-based economy that the ACT has much to offer and much to gain from."

He said when pursuing business, Australian companies needed to focus on the medium-to-long term, be patient and be realistic about "complex" markets like China. 

"It can take some time to get established, and sometimes it's hard to stay engaged, but once you're in, the rewards can be immense."

Mr Stanhope said the ACT Government planned a further trade mission to China and India. 

"It's important we continue to maintain the momentum which we are now developing in relation to our relationships with these two powerhouses," he said. 

A partner and NSW leader of Ernst & Young's China Business Group, Colin Jones, said the biggest areas of opportunity for Australia in China would come from the building, engineering, food and beverages, agribusiness and information and communication technology sectors. 

Certain things were necessary when doing business in China. 

"Economies don't do business with each other, people do, so when it comes to doing business in China one needs to be patient, nimble and know the value of their proposition." 

Mr Jones said one of the main challenges that companies needed to consider about China was its ageing population and the huge potential migration from China. 

Ultimately, the most important ingredient of all in fostering a solid future with China was relationships. "In China, government is absolutely revered, and if you come with their support, many, many more doors will open for you."


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## Bushroda

*Global designs on India* 
Arati Menon Carroll / Mumbai July 28, 2007 

Indian real estate is benefitting from the integration of global architecture and design firms. What is driving this trend? 

By the end of the year, that darling of developers, Mohit Gujral, will be extending his architectural firm&#8217;s talent pool to include 30 Singaporean architects and designers in his first overseas office. Many of them will be practitioners in specific design areas like lighting or landscaping. 

Edifice Architects &#8212; a Rs 300 million architecture and interior design firm with a focus on the IT, ITeS, telecom and hospitality sectors &#8212; is also looking at starting an overseas office in the Philippines by the end of the year. 

Their approaches may be different &#8212; Gujral is climbing up the value chain by employing highly skilled designers, Edifice is leveraging cost efficiency and will outsource its base level drafting and 3-D animation work to the Philippines. Both, however, are means to achieve a greater scale of operations. And quick. 

Some of this urgency, both admit, comes from the increasing competition on home turf. From DLF to Unitech, Ansal API and Emaar-MGF, prestigious developers are signing on architects with a global imprint and Indian architects are feeling just that little bit unsettled. 

What started with the government liberalising the foreign investment regime in the $14 billion (source: Dun &Bradstreet) real estate sector and the subsequent rush of foreign investors, is unlikely to slow down. 

According to a report published earlier this year in fDi &#8212; a bimonthly publication on the business of globalisation &#8212; overseas funds of about $7 billion have been announced for investment in Indian real estate and FDI in real estate is estimated to reach $16 billion by 2012 from $600 million last year. 

&#8220;As a result, an increasing percentage of retail and commercial real estate development is now driven by standards set by private equity,&#8221; according to Peter Burke, a senior architect with Buchan group that is, at this time, involved with masterplanning projects in India. 

&#8220;It&#8217;s not as if there&#8217;s not enough work to go around but the imbalance between the scale of construction and the supply of local architects in the country is undeniable,&#8221; concedes Gujral. 

According to Vijay Sohoni of Council of Architecture, there are 40,000 registered architects in India, of which only 30,000-odd are practising &#8212; 80 per cent of these in the 10 large cities. But the problem, most say, is the proverbial quantity over quality. 

When Provogue tied up with UK-based Liberty International to float Prozone, a retail infrastructure arm, they were convinced that to create true brand differentiation in the mall space, a retail infrastructure specialist would have to be roped in. 

&#8220;Unfortunately local architects hadn&#8217;t had exposure to developing a mall of three million sq ft,&#8221; says Salil Chaturvedi, promoter of Provogue. 

So they signed on Benoy, a UK based practise with expertise in the retail and leisure markets. &#8220;Did you know that 35 per cent of the traffic in a mall is replenishment traffic, so certain procedures for traffic flow, service entry, offloading terminals have to be followed. Local suppliers just did not have that kind of hindsight,&#8221; says Chaturvedi. 

Ravi Sarangan, director, Edifice Architects, suggests that the demand-supply gap is even more conspicuous in sectors like hospitality. Edifice, who&#8217;ve chosen to focus on hospitality for precisely this reason, themselves collaborate with foreign architects to gain expertise. 

Similarly, as John Zeckendorf of Mandala Asset Solutions &#8212; professional developers and asset managers &#8212; points out, &#8220;The concept of integrated townships are around three years old in India and 50 years old elsewhere. International architects have had time to iron out the kinks and debug problems.&#8221; 

Mandala, that is currently working on mandates for eight townships, works with Australian biggies like Edaw and Buchan to ensure that land owners are able to &#8220;supply a differentiated product to a limited market&#8221;. 

The fact that projects are getting more grandiose in scale and complexity is driving the need for experienced master planning and urban design specialists. 

Take for instance, Unitech Grande, a super-luxury residential community with a Greg Norman golf course, that is being developed in Noida over 347 acres. The project involves 10 global architectural and design consultants. 

Often developers use different firms for specific areas of design within one project. Ansal API&#8217;s 5,000-acre Sushant Golf City in Lucknow offers golf villas designed by KTGY inside an 18-hole professional golf course designed by Martin Hawtree with landscaping by Belt Collins. 

There is also an upsurge of real-estate projects that wish to emulate foreign architecture. Mohali Hills, an Emaar-MGF development, is a gated mixed-use community with Spanish style architecture. 

&#8220;Global design firms work with the best developers worldwide and have to their credit some of the finest landmark structures in the world today,&#8221; says a senior company spokesperson. 

&#8220;When developers want iconic solutions, they tend to go with a global biggie like HOK, Renzo Piano or FX Fowle, all of whom are looking at entering India in a big way,&#8221; explains Sarangan. 

But what does that do to costs? &#8220;For most projects, there is a fractional increase in cost, of say Rs 10 per sq ft, but this is easily recouped from a sale price premium of up to 20 per cent on account of better design.&#8221; 

&#8220;If you have a &#8216;developer&#8217; attitude with a view to flip the asset in three years you will tend to tightly manage costs. If you follow an asset owning model you want flawless and accurate designing because the cost of rewriting is very high,&#8221; explains Chaturvedi. 

DLF believes it is an equitable trade-off bet-ween cost and time saving. Last year, they entered into a joint venture with a leading UK-based construction company, Laing O&#8217;Rourke, and have commenced the development of 14 projects covering a total area of 25.7 million square feet with an order book of Rs 4,172 crore, including big-ticket projects like The Magnolia, The Belaire and the Mall of India in Gurgaon. 

&#8220;They give us access to the latest advances in design and construction techniques, which always shortens lead time for completion,&#8221; says a company spokesperson. 

Sarangan hints at several peers whining about work being snatched away from them. But developers will tell you that there is a more than fair integration of local talent even when foreign architects are involved. 

&#8220;It is always a collaborative effort. Local architects have a better appreciation of local code compliance and regulatory issues. They also possess a sound understanding of the onground social milieu which largely influences realty design and development,&#8221; says the spokesperson for Emaar-MGF. 

In fact, Banerji&#8217;s lament is that senior Indian architects are actually so inaccessible that it&#8217;s impossible to tie them down to a discussion even. Mohit Gujral&#8217;s order books, for example, are overflowing with over 65 million sq ft of project work. 

With the Indian real estate market getting exposed to global best practices and international standards of designing, it seems certain that only those architects who rise to the occasion will profit, while others will get relegated to undertaking routine contracting work. 

As Gujral says, &#8220;With a huge infusion of funds in the market no one needs to learn from mistakes. They can afford the best the first time round.&#8221;


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## Bushroda

*Senior managers too in queue*
28 Jul, 2007, 0322 hrs IST,Thanuja B M, TNN

BANGALORE: Call it the effect of NRIs returning to their homeland and prepared to set up new companies, 2001 vintage entrepreneurs taking new guard or experienced corporate employees stepping out of their comfort zones. Venture capital (VC) firms are now seeing the average age of the people in non-internet areas approaching them for funding increasing to the late 30s. 

According to Sudhir Sethi, vice-chairman & MD, IDG Ventures India Advisors, The average age of the entrepreneur from non-internet sectors approaching us for funding has gone up. It is now between 35-40 years. In general, the tech sectors (internet, consumer wireless) still attract younger profiles whereas segments like software services, infrastructure, retail and related sectors are attracting the relatively older entrepreneurs. 

Agreeing with this, NS Raghavan of Nadathur Holdings said, Earlier we used to get people who approached us soon after their education. There were only a couple of people with experience who did come to us seeking funding for setting up ventures. Now, there are lot more experienced and older people seeking funding, especially people who have returned from overseas. He added that there is now some reluctance to fund youngsters out of college since they dont know too much about business. 

So, why this change? Kanwaljit Singh, managing director of Helion Ventures opines, One of the reasons I believe is that more senior managers are looking at turning entrepreneurs. This is prompted by a combination of overall market buoyancy, many success stories of first-time entrepreneurs in India in the past 5 - 7 years and also higher financial stability from the existing jobs so they have reasonable money in the bank to take the risk of entrepreneurship. The advent of more VCs and the ability for an experienced professional who has built `companies in the past to raise venture money is an added driver. 

Mohit Bhatnagar, an Operating Partner with Sequoia Capital India just says that it is a great time to be an entrepreneur. 

``Opportunities in India are fantastic and venture capital is accessible. So frankly entrepreneurs of all ages are stepping onto the stage. Currently, there are around 44 VC firms investing in India. About ten of them have own offices in the country and see anywhere between 100 to 400 business plans a year. 2006 saw VC investment of $506 million in India.


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## Bushroda

*ITC to invest Rs 8,000 cr in 5 hotels in 5 yrs* 

Kolkata, Jul 27 (UNI) ITC Limited will invest Rs 8,000 crore to set up five new premium hotels in Bangalore, Ahmedabad and Chennai in the next five years.

Speaking to mediapersons here today at the 96th Annual General meeting of the company, ITC Ltd chairman Y C Deveshwar said the hotel in Chennai would be the biggest hotel in India with 825 rooms.

'' We will also venture in super premium, heritage and luxury hotels in various locations of the country. The company plans to set up a seven star hotel in Ahmedabad and land for the project has already been acquired,'' he said.

Three hotels would be built in Bangalore which would be in the premium segment, he added.

Talking about the company's plans about the retail segment, Mr Deveshwar said,''We are not going to foray into modern retail concept unless the real estate prices become more realistic.'' However, the company plans to introduce a new strategy of positioning itself as a wholeseller that would supply FMCG directly to the hawkers under "Choupal Fresh" brand.

'' We are still toying with this concept and also intend to have our presence felt in the modern supermarts through standalone shops,'' he said. 

In the premium segment ITC currently has 200 stores under Wills Lifestyle and newly launched Miss Players segment.

ITC Limited is hopeful about the company's growth in FMCG segment, specially the food business, which grew at the rate of 60 per cent in the last fiscal.

Speaking about the company's investment plans in Bengal, Mr Deveshwar said his projects in the state, entailing an investment of Rs 1500 crore, have been delayed due to land acquisition.

''We have plans to create an integrated experimental farm cum food processing zone with logistics infrastructure. The project is yet to take off due to land acquisition hiccups,'' he said adding the horticulture projects had also been delayed due to the same reason.


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## Bushroda

*Infosys' Aspirations in Europe*
*The Indian tech services giant calls its move to take over some Royal Phillips' BPO centers an "outsourcing deal structured as an acquisition" *

Businessweek
27 July 2007

This will be Bangalore, India-headquartered Infosys' only second acquisition in its 25-year history where it last acquired Australian Expert Information Services for US$22.9 million in 2003. 

Described by Infosys CFO V. Balakrishnan as an "outsourcing deal structured as an acquisition", the agreement includes Infosys' move to take over Philips' finance and accounting business process outsourcing (BPO) centers in three countriesIndia, Poland and Thailandfrom Oct. 1 this year. Infosys will absorb 1,400 Philips professionals currently stationed at the three centers, into its own BPO headcount. 

The Indian services giant on Wednesday announced it will pay Philips US$28 million for the BPO assets, which include infrastructure, processes and intellectual property. 

The deal also entails a seven-year contract with Philips that will see Infosys providing finance and accounting services, as well as the processing of purchase orders. 

Infosys will deliver its services at a reduced billing rate during the first year, after which employees the Indian company acquired can be assigned to service clients other than Philips. 

Infosys said it intends to bring down the operation cost of the three BPO centers, in particular, it added that the acquisition will strengthen the company's foothold in Europe. 

Infosys CEO S. Gopalakrishnan said in a statement: "Global corporations require transformation partners like Infosys to enhance their competitiveness in the flat world We are excited to partner with Philips to take their F&A (finance and accounting)and procurement functions to the next level of transformation." 

Infosys' BPO subsidiary currently has close to 11,000 employees, and posted revenues of around US$164 millionregistering over 70 percent growthand net profit of US$37.5 million in its last fiscal year, ended Mar. 31. This business registered a revenue growth rate of over 70 percent. 

In an e-mail interview, Milan Sheth, a partner at Ernst & Young India's outsourcing advisory center, said the deal will allow Infosys to get "a readymade delivery engine from a very large and reputed European multinational". 

Sheth said a deal of this kind, where a company exits from its captive units through a reverse BOT (built, operate, transfer), is quite popular in Europe but is still fairly uncommon in the Indian context. 

Michael R Guilbault, senior analyst of professional services business quarterly at Technology Business Research (TBR), said in a research note: "This is one of the biggest outsourcing deals ever signed by an Indian IT services firm," Guilbault said, noting that the agreement is as significant as the US$244 million contract inked between Tata Consultancy Services and ABN Amro in 2005. 

"This deal clearly shows that Infosys is climbing the value chain by its newfound willingness to take on staff and facilities as part of a deal," he added. 

Earlier this month, rumors had swirled over a possible merger between Infosys and consulting firm Capgemini, though neither companies were willing to comment on the speculation. TBR's Guilbault noted that this union was unlikely.


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## Bushroda

*Bharti to Spend $1 Billion on Towers, May Sell Stake*
By Shailendra Bhatnagar and Catherine Yang

July 27 (Bloomberg) -- Bharti Airtel Ltd., India's largest mobile-phone operator, will spend $1 billion to expand transmission towers before joining rival Reliance Communications Ltd. in selling shares in the unit to investors. 

Bharti Airtel plans to sell a stake in the wholly owned tower subsidiary, Chief Executive Officer Manoj Kohli said in an interview today, without giving a timeframe. The unit will grow to be the world's biggest by the end of the year, he said. 

``A separate tower company gets a much better valuation than a single entity,'' said Mahesh Patil, who helps manage the equivalent of $1.5 billion in equity assets at Birla Sun Life Asset Management Co. in Mumbai. The incremental value creation in Bharti's case could be as much as $12 billion, said Patil, who has Bharti as his largest holding. 

Reliance Communications, India's second-largest wireless operator, valued its tower assets at 270 billion rupees ($6.7 billion) when it sold a 5 percent stake, more than the entire company's market value when it went public last year. 

India's government is encouraging carriers to share their infrastructure to expand coverage in rural areas. Bharti's tower spending is part of a plan to spend as much as $3.5 billion this year on network expansion to maintain its lead over Reliance and Hutchison Essar Ltd. 

*Tower Sharing *

Bharti, about a third owned by Singapore Telecommunications Ltd., aims to have more than 65,000 towers by the end of March, from about 45,000 now, Kohli said. The company will share them with Hutchison Essar, controlled by Vodafone Group Plc, and Idea Cellular Ltd., owned by billionaire Kumar Mangalam Birla. 

The legal process to set up an independent tower company will be completed by the end of October, Kohli said. The focus would be to cut energy costs, he added. 

The sharing of towers will result in the greater spread of mobile-phone services and lower costs for users as carriers pass on cost benefits to customers, a unit of UBS AG said. 

UBS Securities analysts Suresh Mahadevan and Lydia Chan revised their forecast for wireless penetration in India to 65 percent by March 2016 from 52 percent, mainly on account of sharing of passive infrastructure by rival carriers. 

``This is likely to result in making the mobile services more affordable and available to end consumers,'' Mahadevan and Chan said in a note released in April. 

Bharti shares declined 3.6 percent to 892.35 rupees at the 3:30 p.m. close of trading on the Bombay Stock Exchange today. Indian stocks fell the most in almost four months, mirroring a global decline. India's key Sensitive Index plunged 3.4 percent. 

*Lowest Rates *

The world's lowest local mobile call charges, of about 2 U.S. cents a minute, helped India add a record 7.34 million mobile-phone users in June, beating growth in China. About 17 percent of 1.1 billion people use handsets primarily because of the lack of networks in rural areas. 

Bharti is focusing on villages where 700 million people reside, Kohli said. The company has already slashed its lifetime prepaid connection fee by more than half to 495 rupees to lure lower-income users. 

``We have a matchbox distribution strategy,'' Kohli said. ``Wherever a matchbox sells in India, Airtel should sell.'' 

Attracting more rural customers would result in a drop in the average revenue per user, a key financial parameter, Kohli said. The decline won't be of concern as long as the company's profit margin on every minute of calls made by users can be sustained, he said. 

*More Users *

Bharti's average revenue generated by each mobile subscriber in a month declined to 390 rupees in the April-June period from 406 rupees in the preceding quarter and 441 rupees a year earlier. That drop was offset by the rise in the average usage time, which increased to 478 minutes a month from 441 minutes a year ago, the company said. 

First-quarter profit at Bharti doubled to a record 15.1 billion rupees ($375 million) from 7.55 billion rupees a year earlier, the New Delhi-based company said yesterday. The profit beat the median estimate of nine analysts Bloomberg surveyed. Sales rose 53 percent to 59.1 billion rupees. 

Reliance Communications announces earnings on July 31.


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## Bushroda

*South Africa to host largest ever Indian trade delegation*
July 27th, 2007

JOHANNESBURG, July 27 (NNN-BUANEWS) -- South Africa's official body for organised business, Business Unity South Africa (BUSA) is to host the largest Indian trade delegation yet to visit the country.

Next month on 2 and 3 August, (BUSA) will host a meeting known as India Calling, which forms part of the Indian Merchants Chamber (IMC) centenary celebration.

"India Calling is a very important date on South African business' calendar; we look forward to hosting our Indian counterparts and believe the conference will be educational and fruitful for all attending," said Jerry Vilakazi, chief executive officer of BUSA. 

The event endeavours to promote and build business relations between India and South Africa and will in particular focus on the infrastructure, Information and Communication Technologies, pharmaceuticals, skills training, financial services, mining and media industries.

India Calling is to be addressed by President Thabo Mbeki, said the organisers, as well as India's Minister of State for Industry and various local and Indian government and business delegates

The event is to take place in Johannesburg at the Sandton Convention Centre.

South Africa has been chosen by the sub-continent's powerhouse as a strategic investment destination.

India, Brazil and South Africa are partners in the IBSA forum, which is aimed at promoting closer cooperation between the three nations, particularly in stimulating economic growth and promoting co-ordination on global issues.

The partnership also seeks to advance the developmental agenda of the South and promote closer coordination on global issues among the three nations.

Trade between the three nations has risen sharply over the past few years and is expected to grow even more significantly once a formal trade agreement is in place between the IBSA partners. 

Trade between Brazil and South Africa rose to more than R10 billion in 2005 from R6.6 billion two years earlier. (R 1= 0.1411 USD)

Trade between India and South Africa totalled more than R14 billion last year, more than double that of 2003.

In November last year, the South African Revenue Services (SARS) Commissioner Pravin Gordhan hosted his Indian and Brazilian counterparts, KM Chandrasekhar and Jorge Rachid respectively at the Union Buildings.

The IBSA partners agreed to streamline issues of tax and customs administration, to enhance cooperation on tax and customs among themselves.

The revenue heads of the three nations signed a joint declaration, committing their organisations to closer ties across a wide range of areas on both the revenue and customs fronts.

The countries agreed to boost trade and economic development while also seeking to thwart smuggling, drug trafficking, fraud and tax avoidance in the three nations. -- NNN-BuaNews


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## Bushroda

*RAILWAY REVENUE EARNINGS UP BY 10.65 PER CENT DURING THE PERIOD 11TH  20TH JULY 2007* 

The total approximate earnings of Indian Railways on originating basis during the period 11th July  20th July 2007 were Rs. 1712.63 crore compared to Rs. 1547.79 crore during the same period last year, registering an increase of 10.65 per cent. 

The total goods earnings have gone up from Rs. 1066.66 crore during 11-20 July 2006 to Rs. 1163.74 crore during 11-20 July 2007, showing an increase of 9.10 per cent. The total passenger revenue earnings during the period 1120 July 2007 were Rs. 491.27 crore compared to Rs. 433.69 crore during the same period last year, an increase of 13.36 per cent. The revenue earnings from other coaching amounted to Rs. 44.29 crore during this period compared to Rs. 36.51 crore during the same period last year, an increase of 21.31 per cent. The total sundry earnings have gone up from Rs. 11.23 crore during 11-20 July 2006 to Rs. 13.33 crore during 11-20 July 2007, showing an increase of 18.70 per cent. 

The total approximate number of passengers booked during the period 1120 July 2007 were 189.94 million compared to 176.64 million during the same period last year, showing an increase of 7.53 per cent. In the suburban and non-suburban sectors, the number of passengers booked during 11-20 July 2007 were 110.12 million and 79.82 million compared to 102.36 million and 74.28 million during the same period last year, registering an increase of 7.58 per cent and 7.46 per cent respectively.


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## Bushroda

*Some Like It Hot*
*Why the Rising Mercury Doesn't Deter India's Golfers*

By PAUL BECKETT
Wall Street Journal
July 28, 2007

Mad dogs and Englishmen go out in the midday sun. So do Indian golfers, in droves.

June, before the monsoon rains arrive, is usually the hottest month here. The average daily high this year was 100.6 degrees Fahrenheit; on 11 days, it exceeded 104 degrees. The city sank into a desultory lull, the white sun enough to make your eyeballs sweat.

But neither sun nor heatstroke nor the red dust that sweeps through the city in the dry months keeps Delhi's golfers from their appointed tee times. Courses in the area were packed in the mornings starting at first light around 5:30 and just slightly less full in the afternoon. A few players used golf carts; most walked, usually with caddies in tow.

"Forty-five degrees [113 degrees Fahrenheit] is nothing," scoffs Ishwar Verma, a 61-year-old retired Indian Army colonel who plays five days a week and has a handicap of eight. "For me, golf is a passionate and obsessive mind game. It is mentally absorbing and so the temperatures don't really affect me." He wears a cap. His playing partners, he adds, "are more cautious, carrying their umbrellas, water bottles and head gear to protect them from sun stroke."

It was, in fact, Englishmen who brought golf to India. The first club, known today as Royal Calcutta Golf Club, was established in 1829. Until recent years, the sport was dominated by India's elite and retired military officers like Col. Verma, who has been playing for more than two decades.

The summer crowds now can be partly explained by the sport's broadening appeal as incomes rise, India's middle class swells and the price of equipment drops. Real-estate developments with homes surrounding golf courses are popping up around the country. The Delhi area has courses designed by Arnold Palmer and Jack Nicklaus. Indian professionals, meanwhile, are making a dent internationally, creating buzz at home. India's sports pages tracked the daily rounds of Indian great Jeev Milkha Singh at this year's U.S. Open and Masters. He tied for 36th and 37th, respectively.

One sweltering June Saturday at our local sports complex, there was a line for the 20-berth driving range. Youthful hackers sent balls into the shimmering haze. Three men walked back and forth across the range retrieving balls while the golfers kept hitting. They carried umbrellas -- not to protect against the sun but against the balls raining down around them.

According to the India Meteorological Department, Sunday, June 10, was the hottest day in New Delhi so far this year, with the thermometer hitting 112.8 degrees. About 190 players teed up at the Delhi Golf Club, one of the city's most prestigious. "They are very crazy golfers," says Krishan Lal, the chief starter. The course last year entered an arrangement with a nearby hospital to send a doctor and ambulance if needed; they have yet to be called.

Heat-resistant golfers hit the links in other hot spots, too, but rarely on Delhi's scale. At Furnace Creek Inn & Ranch Resort in Death Valley, Calif., where the temperature reached 111.9 degrees on June 10, only 28 golfers teed off. Many of them were hotel employees, says Phil Dickinson, the resort's director of sales and marketing.

At the Alice Springs Golf Club in the Australian outback, where summer temperatures in January and February regularly exceed 104 degrees, Sunday tournaments attract around 140 players, not far off the 160 or so who show up at more temperate times. "We're in the middle of Australia, so it's golf or nothing," says Doug Maiden, the club's pro. "There's not much else to do out here except drink."

Mr. Maiden says weekly tournament scores in the Australian summer actually improve by five or six strokes because the course is heavily watered then and the greens slow a bit.

Such fierce heat is the opposite extreme of what I grew up with in Scotland, where the goal is to keep warm, not cool. To try the other end of the thermometer, I arranged an afternoon round in Delhi with my neighbor, Sunil Anand, a 50-year-old insurance salesman. He plays three or four times a week, year-round.

When it gets really hot, Mr. Anand dips a towel in cold water and secures it with a rubber band around his cap. He redips throughout the round. His friends call him "The Sheikh." He wears dark glasses against the glare and carries cookies, gum, water, juice and a first-aid kit -- so much stuff that he's also dubbed the "grocery store."

His playing partners are more typical of India's hot golfers: They do nothing special. At the end of the round, they head to the bar for three or four whiskeys.

This is the time of year in India when the humidity rises, adding an element of stickiness to the conditions that you wouldn't find in other golfing hotspots like Scottsdale, Ariz., or San Diego.

Brigadier Surinder Singh Anand (no relation to Sunil), a military doctor and avid golfer, says golfers acclimatize over time, and that Indians are simply used to functioning in extreme heat. He says the most important factor is to stay hydrated, preferably with a drink of fresh lime juice, mixed with sugar syrup, salt (to replace minerals and prevent cramps), water and ice -- a concoction that is served in many restaurants here.

The temperature when we played earlier this month, I confess, reached only 99 degrees. The venue was the Qutab Golf Course, so named because it affords views of the Qutab Minar, a 13th-century sandstone tower that is one of the city's architectural treasures. Tee time was 3:30 p.m., just after the day's temperature usually peaks in the summer.

Thanks to a shield of a hat, sunglasses and factor-50 sunblock, the temperature at first didn't make much difference. I dutifully worked my way through a liter of water (I didn't hear about the fresh lime tip until after we played.) For the first five holes, I racked up my usual bogeys and doubles with one par.

Only gradually did the heat take its toll, even as I knew, logically, that it was getting cooler as the round progressed. I eyed with some envy the stray dog sleeping under a tree by the sixth tee. Parts of my body -- forearms, cheeks, neck -- started to sting. As we started the back nine, the sun felt like it was targeting my face like a laser beam. At the 10th green, we stopped at a snack hut. Mr. Anand asked for hot coffee, for no other reason than he likes it. I went for iced tea.

From the 11th on, as Mr. Anand's game improved, mine deteriorated. I kept drinking water and eating macadamia nuts for energy and for the salt. But the bogeys became doubles, the doubles became triples. What had, with at least some consistency, been 250-yard drives became 100-yard grass cutters. My concentration evaporated.

By the time we reached the par-four 16th and got stuck behind a very slow foursome, I'd had enough. We finished the hole (I had a triple bogey) and skipped the last two. As we headed for the clubhouse, I asked Mr. Anand how this rated for heat on a scale of one to 10. "Three," he answered. He hadn't even bothered with the wet-towel headgear.


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## Bushroda

*Lenovo to set up new manufacturing plants in India, Mexico* 
Xinhua English
2007-07-26 

NEW DELHI, July 26 (Xinhua) -- Global PC maker Lenovo said here on Thursday that it would invest 310 million U.S. dollars to set up two new manufacturing plants in India and Mexico, in order to meet the growing demand in those regions. 

Lenovo said the new plant in India will be opened in Baddi, a city in India's northern state of Himachal Pradesh, and expected to be operational in the third fiscal quarter of 2007, with an approximate annual production capacity of 2 million PCs. 

Meanwhile, the new plant in Mexico will be set up in Monterrey, a city in the north of Mexico, and is anticipated to carry out production by mid-2008, with a planned annual manufacturing capacity of 5 million PCs. 

Baddi manufacturing facility is Lenovo's second plant in India. "India is an integral part of Lenovo's global manufacturing strategy. With our second plant in India, we expect to improve our supply chain efficiently and better serve our growing base of customers in this region," said Jeff Gallinat, vice president of Lenovo's global manufacturing. 

In December 2006, Lenovo opened an innovation center in Mumbai, India's financial center, to accelerate innovation and create solutions for challenges faced in the markets. 

In addition, more recently, Lenovo also announced its worldwide marketing hub in Bangalore, India's IT center. 

According to Lenovo, the Monterrey plant will supply PCs to customers throughout the Americas and represents Lenovo's largest manufacturing investment to date outside of China.


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## Bushroda

*Big retailers target India*
*Hypermarkets are rising as middle-class incomes grow and consumerism flourishes in a country long dominated by mom-and-pop stores.*
By Henry Chu, Times Staff Writer
Los Angeles Times
July 28, 2007 

MUMBAI, INDIA  "Spoiled for choice" is not usually a phrase associated with shopping in this country. But for two hours  a lot longer than they'd intended  Sunil and Alka Paralkar puttered through the aisles squeezing fresh fruit, inspecting packaged foods and checking out shelves of knickknacks at a gleaming "hypermarket" here.

"I've been shouting at her, 'We have to go,' " Sunil said, shaking his head at his wife in mock exasperation. Yet several minutes later, the couple were still browsing and adding items to their steadily filling cart.

The Paralkars are among the millions of middle-class Indians whose growing purchasing power has domestic and global companies slavering. As Gandhi's homeland increasingly tosses aside the simplicity he espoused in favor of an eager consumerism, retailers are trying to position themselves to catch the wave.

The result is the rise of a way of shopping that may seem second nature in the West but represents a major shift in India: supermarkets and hypermarkets, with groceries, appliances, toys and numerous other goods under one roof.

Such establishments are relative novelties in a land where even sophisticated urbanites  or at least their domestic help  are apt to pick up the phone and order milk and eggs from the corner store or to haggle over vegetables with a roadside vendor on a flatbed bike.

But changing habits of work and play in India's surging economy have made big one-stop stores a viable alternative  at least for the small, but burgeoning, contingent of professionals with disposable income.

As Indian consumers who have lived abroad demand a range of choice similar to what they find in other countries, as young hipsters compare BlackBerrys and Burberrys and shopping becomes a recreational pursuit, big-box stores are now attracting thousands of customers a day.

"The reality is that the Indian consumer is exactly the same as the consumer in the rest of the world," said Andrew Levermore, chief executive of Hypercity, a hypermarket in Mumbai (formerly Bombay). "They're aspirational. They have a need for nice things, particularly the younger generation."

Overall, supermarkets, hypermarkets and discount stores account only for a tiny fraction of the retail market in India, but their sales still came to about $1.5 billion in 2006. 

And although India's supermarket sales lag far behind those in Asia's other developing giant, China, analysts see enormous potential in the subcontinent. New shopping formats are forecast to grow 34% a year by the start of the next decade. Because of legal restrictions on foreign retailers, the expanding hypermarket chains so far are Indian, although some foreign companies, including Wal-Mart Stores Inc., have started partnerships with Indian firms.

Hypercity opened in May 2006 in a vast, two-floor, 120,000-square-foot space in north Mumbai, on a street already filling up with other boutique shops and an upscale mall.

The bottom floor resembles an American supermarket but with extremely wide aisles that are routinely cited in feedback forms as the aspect of Hypercity customers most like  perhaps not a surprise in the densely crowded country of a billion people. The upper floor is given over to toys, electronics and home furnishings. There are two eating areas, a beauty salon and a 24-hour pharmacy.

The company studied the market for two years before diving in, and its research had not been entirely promising, Levermore said. For example, no one was sure how well packaged food, a big part of the groceries on offer, would sell to Indian housewives who regard meal preparation as their sacred duty.

But pre-packed food has proved a hit, including high-priced imported goods from the British supermarket chain Waitrose. The stock list was refined through trial and error. Mountain bikes are surprisingly popular. Western-style mattresses bombed.

About 25,000 customers a day stream in on the weekends. The average visit lasts more than 2 1/2 hours.

"A shopping expedition for the Indian family is a leisure pursuit right now," said Levermore, a native of South Africa. "There are not too many sports clubs or parks."

After a year, Hypercity has turned an operating profit in half the time expected, with revenue of $35 million. The company has six stores slated to open by March in New Delhi, Amritsar, Pune and Mumbai, and 22 others are under development.

Those plans are modest compared with some others'. Reliance Retail, owned by mammoth Reliance Industries, envisions 30 to 40 of its much smaller Reliance Fresh supermarkets in all of India's major cities. The first stores were launched last fall.

But to many social activists, expansion of such stores spells disaster for traditional corner establishments and their owners.

"It is not like Europe and America where alternate jobs are able to absorb people. Millions and millions are engaged in this occupation, and they will be thrown out," said Udit Raj, the chairman of the Indian Justice Party. "Most of the people selling fruit and vegetables are illiterate or at best semiliterate. And businesses such as Reliance won't take them in because they don't have the qualifications."

Raj's party has organized protests against Reliance Fresh across the country, some of which have turned ugly.

Matthew Stych, head of retail research for Euromonitor International, said independent vendors rang up 99% of grocery sales in India last year. That could drop slightly to 96% in 2011, but in as populous a country as this, even a decline of a few percentage points translates into thousands of shuttered shops.

The big guys will also find a tougher market if the retail sector is liberalized to let in more foreign companies such as Tesco and Carrefour.

"We're going to see a lot of retail casualties over the next few years. Not everybody's going to get it right," Levermore said.

At the moment, Hypercity and its Indian rivals have a head start. But "we're extremely conscious that the competition is coming," he said.

How quickly foreign companies will be able to capitalize on that trend remains to be seen. Indian law prohibits foreign retailers from setting up shop independently, except for single-brand stores. That means Nike Inc. can open an outlet, but multi-brand Wal-Mart cannot. Foreign companies must wait for an easing of the restrictions against them  a politically charged issue in a country long used to protecting homegrown businesses, including millions of mom-and-pop stores. To get its foot in the door, Wal-Mart has paired up with local player Bharti Enterprises in a wholesale venture instead.

"Wal-Mart has probably made the smartest moves it can under the circumstances. It's partnering with a partner with a good record on getting things done in India, which is key" in terms of winning over government officials and coping with India's bad infrastructure, said Stych of Euromonitor.

"All the big retailers should have plans to enter India," he added. "Whether they dive in right now isn't necessarily wise. There's possibly an argument to say, 'Let's sit back and see what mistakes Wal-Mart makes and see if we can learn anything from that.' India isn't going to follow the same growth curve as China. It might be slower, but it's obviously on its way."


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## Bushroda

*Rift between old and new*
*An older, state-supported middle class is giving way to a less stable, globalized go-getter crowd *
DOUG SAUNDERS 
From Saturday's Globe and Mail, Canada
July 28, 2007 at 12:00 AM EDT

MUMBAI, India  It would be easy to mistake Rajendra and Abhijit Kalekar for brothers. Aged 37 and 38, they share lanky appearances, friendly smiles and a gift of easy conversation; in fact, with the exception of Rajendra's mustache, they might be able to trade places. As first cousins in a tight-knit Mumbai family, they know each other well and the two men have maintained close family ties throughout their lives.

To outsiders, they also appear to play similar roles in the booming Indian economy: In their neatly ironed, open-neck dress shirts, both the Kalekar cousins are easily identifiable on the clogged streets of Mumbai as members of the fast-growing Indian middle class. They talk freely and eagerly about the things that interest middle-class people worldwide  the stock market, real-estate prices, the best schools for their kids, vacation plans, the morning commute.

But if you watched them make their journeys into work this week, it would have been immediately apparent that they are members of two very different groups, playing very different roles in the global economy, with increasingly little in common.

Despite almost identical educations and family backgrounds, the two men have found themselves members of two distinct middle classes. As poor countries become wealthy, these two classes, one old and fading, the other global and aggressive, increasingly find themselves at odds. When there are troubles in the world today, including some forms of terrorism, often at root it is because two middle classes are at war with one another.

Rajendra wakes every morning to his stirring wife and son in the sleeping room they share in their small but quiet three-room apartment in an older, government-built concrete structure. The couple bought the place five years ago for $18,750. It has more than doubled in value since then, he points out, though he is not eager to sell. It's in a bustling neighbourhood in northern Mumbai.

After he and his wife load their son onto a school bus, he makes his way through the crowds to the train station, where for a 25-cent ticket he will wedge himself into the teeming second-class carriage of one of the city's famous commuter trains and take his 40-minute daily ride. Strolling through more teeming crowds, he steps into the bank branch where he works as a manager  a dusty government-run building on a very poor street in a slum-packed section of Mumbai's south. His wife works at another branch of the same state-run bank. The ceiling fans kick into life as customers begin to flood in. At his metal desk, he works his way through piles of papers.

By this point in the day, his cousin Abhijit usually has boarded the elevator from his building's gym to the parking garage. He, his wife and their son have separate bedrooms in their five-room apartment in a luxurious new building surrounded by a wide, empty lawn  an extremely rare commodity in the world's most densely populated city.

I must admit that I chose the place because of the tennis court, he concedes, although he and his wife find little time to use the court, the pool or the gym facilities. By 7:30 a.m., he is in his four-door Honda, making his way to a futuristic mirror-walled office building, which bills itself as Windsor Tower, in a high-tech industrial park in northern Mumbai. Etched into the glass walls are his company's mottos, such as: Our values: commitment, passion, integrity, speed.

Abhijit, who has an MBA, works as a middle manager for a multinational cellphone company. His cousin Rajendra, who has a degree in commerce, works as a middle manager with a state-run bank. They are both doing very well in their jobs, and are gunning for promotions. Abhijit, who has a private office in the building's air-conditioned halls, may get himself a corner office and a raise of $500 a month. Rajendra, who has a green metal desk, may get moved to the next desk over, the top accounting position in the bank, and for this highest of promotions might receive an extra $100 a month.

Even 10 or 15 years ago, two university-educated Indians working for a bank and a phone company would have been in almost identical positions  as would their counterparts in South America, the Middle East or Southeast Asia. They would have been making similar sums of money; their employers would have been fully owned by either government or national firms, protected by tough tariff barriers and state protections; and they would have had lifetime guarantees of employment. Having such a job automatically made you a member of the country's elite, with great economic, social and political power.

Today, they are worlds apart. Rajendra, in a good job with an old middle-class employer, a government-owned bank, has a household income of $9,000 a year, $3,000 of which is provided by his wife's job. This was regarded, until quite recently, as an excellent middle-class salary in the developing world. He is squarely middle-class, earning an amount of money that puts him well out of poverty but still requires him to work until retirement.

But Abhijit, working for a publicly traded company with major shareholders in the United States and market ambitions around the world, has found himself in a different group entirely, one that provides incomes in the top 1 or 2 per cent, but which has seized the image of middle-class in the public imagination. His salary of more than $30,000 a year gives him a lifestyle, a home and a set of values that would be familiar to anyone in the Canadian or U.S. middle class.

Abhijit and Rajendra both play important roles in the Indian economy. They both have mortgages: Almost non-existent here before the 1990s, home financing has lifted tens of millions out of poverty and created sources of entrepreneurship and pools of investment. They both, like so many members of the world's middle class, see their homes as sources of equity for future growth.

Along with debt, they both have substantial savings. Rajendra and his wife manage to put $55 a month away for the future; Abhijit and his wife, a teacher, sock away $250 to $625. They both play financial markets: Rajendra puts his cash into bonds and safe securities (I'm a risk-adverse investor, he says), while Abhijit has joined the millions of developing-world citizens who actively play the stock market using online trading, with a preference for high-risk equities. 

A stock-market mania has overtaken India, driven by the new middle-class industries, and he is one of millions who make trades, sometimes of tiny amounts, on a daily basis.

It's a new experience  it was not something that people in India did 20 years back, Rajendra says. Now, we all put a share of our earnings into Internet-based trading. But it's important to me  I hope to retire early. I'd like to spend the last part of my career working for a charity, maybe in water conservation. And I'll need savings and investments to do that.

While Abhijit and Rajendra are both happy with their lives, their dreams and ambitions are rather different.

Rajendra expects to live in his small, cozy house, surrounded by books and musical instruments, for the rest of his life. He bought new appliances and a TV five years ago, when he and his wife bought the house, but his only recent major purchase was a new bicycle. He hopes to send his son to university in Mumbai. He spends his leisure time singing in a classical Marathi singing group (he plays tabla drums) and going on long hikes in the Indian countryside.

In many ways, I live the same life as my parents, he says, taking a break amid the chaos of the bank branch. But my life is more stable than my father's. There is security in my job, I know I will always have it, and my home is secure. If there's a problem, I have enough funds saved to fill the gap.

Abhijit, on the other hand, has traded houses nine times in the past 15 years. He and his wife both own cars (still a luxury item in India); he is thinking of hiring his own driver, for $150 a month  not for the driving so much as to have someone to handle the parking for him. He and his wife spend their weekends in shopping malls; they have recently bought a 26-inch LCD television and a nice designer watch. They would like to send their son to university in the United States.

It is very different for me  in terms of tangible, material things, there is a world of difference. Our incomes don't compare, Abhijit says. He is referring not to his cousin  the two see themselves as equals and don't discuss money  but to his father, who was also a bona-fide member of the old, government-controlled middle class, a comfortable Indian middle bureaucrat.

I grew up with three rooms for the five of us, he says. Now, we have five rooms for the three of us. The whole situation on the economic front has changed for us. It was a much tougher life for them.

It is also, it goes without saying, a much tougher life for his cousin, who lives the life of his father  but in a world where that life is no longer the pinnacle of Indian aspiration.

At the beginning of the 1990s, some dramatic changes took place in the world's major poor countries. Their old approach to economic growth, known as import substitution, had tried to build national economies using government-protected industries (or, in some countries, through actual state-run economies). After two or three decades, this approach had expanded the size of government and industry, produced a comfortable, educated middle class  and created enormous amounts of public debt, state paralysis and declining exports.

Abruptly, much of the world changed tack: Either on their own or at the behest of international lending agencies, the developing world had opened its borders and welcomed international capital. Globalization arrived almost overnight.

Suddenly, countries like India, Brazil and Taiwan were real players in the world economy. Whole new categories of jobs were created. And for a small but significant number of people, it was possible to live the middle-class dream the way North Americans and Europeans understand it.

But in many places there was a problem: The old, pre-1990s middle class no longer had an important role in the economy. As the private-sector economy advanced, their salaries stayed the same or shrank. While they were still known as the middle class, they were increasingly poor and irrelevant. Governments, and the international organizations that financed them, had abandoned the largest educated and prosperous class of the impoverished world, often letting its millions of families sink into oblivion.

After the structural adjustments in these countries, you had a larger middle class that was replaced by a somewhat smaller but more upscale middle class and a wealthier, new, entrepreneurial middle class, says Sherle Schwenninger, a U.S. economist who conducted a major study of the international middle class for the Carnegie Endowment for International Peace.

Now, some of that restructuring was absolutely necessary in the old developing-world economies. But it could have been more possible, and a lot more preferable, to do it in a way that could have left more openings to members of the old state-supported middle class. You could have had less loss of the old middle class and a much broader expansion of the new middle class. But they've ended up doing damage.

In India, that damage is mostly psychic: It has become popular, in newspapers and books here, to lament the loss of authentically Indian figures in the country's elite and their replacement with a group whose values are cosmopolitan, international and sometimes seen as a bit un-Indian.

In other countries, the effect has been more grim. In Russia in the 1990s, the old Communist-state middle class was dumped into poverty and became enthusiastic supporters of Vladimir Putin. In South America and Mexico, the old middle class suffered terribly and their clashes with the new middle class have led to extremist governments on the left and the right.

In Morocco, the sudden jettisoning of the old middle class  more dramatic than anywhere else in the Middle East  created a generation that was bitterly unhappy with its loss of stability, comfort and elite status. In this moment of historical transition between the nation state and globalization, says British scholar Shana Cohen, who watched this process unfold in Morocco, melancholia, the loss of an ideal, a past object of identification,  becomes the psychic unifier of a seemingly disparate group of people and the basis for social action.

This social action has become painfully visible recently as explosions have rocked Morocco's tourist cities. Morocco has done better than most African countries in building a new economy and cultivating political freedom. But it has done very badly in maintaining its middle class.

It's the Mohamed Atta phenomenon, says Mr. Schwenninger, referring to the Sept. 11 bomber, who came from a displaced, old-middle-class family in Egypt. You have a lot of educated Moroccans whose fathers were educated bureaucrats, who are now finding themselves lost and without a role in the economy, and their sons are often becoming jihadis.

In other places, the old middle class has been alarmed to lose its status to a new middle class that often has radically different politics.

That pattern was readily visible in last weeks' Turkish elections. The victorious AKP (peace and jobs) party of Prime Minister Tayyip Recep Erdogan, often seen as the voice of the poor and religious, was re-elected to a powerful majority despite the huge protests it received from the urban elite. But Mr. Erdogan's party serves another, less well-known role: It is in many ways the party of the new, multinational middle class. 

The old, bureaucratic middle class, located in the centres of Istanbul and Ankara, was a loyal backer of the army, the centralized state and the system of rigid secularism that has governed Turkey since the 1920s. But, just as the mosque-going villagers flooding into Istanbul felt alienated from this old middle class, so did the young computer technicians hoping to find work in a Europeanized economy. They, as much as the poor and disenfranchised, are the ones who have seized Turkey away from the old middle class.

Of course, in many of these countries the new middle class is not middle-class at all: It is a new wealthy elite, whose members happen to be employees rather than owners. They are often wealthier than successful entrepreneurs in the old, national economy. In post-Communist countries such as China, they are simply members of the old middle class who got lucky. In other places, such as Turkey, they have emerged from an entirely different group of people, from poor peasants who often had very different values from the old elite.

If managed well, with a government that is willing to spend money and energy transforming its economy, the old and new middle classes can become a harmonious group. The Brazilian governments of Fernando Henrique Cardoso and Luiz Inacio Lula da Silva are often credited with accomplishing this elegantly; South Africa, Taiwan and Korea have done a passable job. Here in India, which only 60 years ago had no middle class at all, it remains to be seen whether the old and the new can be reconciled peacefully.

In the Kalekar family, the two middle classes happen to be getting along quite well, thank you very much. That's partly because Abhijit and Rajendra are happy with their lives. They wouldn't want each other's hassles.

Rajendra, the banker, is spending his summer vacation on a long visit to a nature park with his son. He takes leisurely, two- or three-week vacations in the nearby countryside, often hiking on foot or travelling by train. He cooks, plays music and spends long nights with his friends.

My cousin? I do not feel a gap between us, he says. My view is that there is no space for financial matters to interfere with friendship.

Abhijit, the cellphone manager, is hoping to take a vacation some time in the next year or so, maybe a week or so in Singapore, or at the Disney resort in Hong Kong. He tries to get away with his wife and son. But there is so little time.

We are not people who work to live; I'd say we are the ones who live to work, he says, repeating the oft-repeated lament of the new middle class. There isn't much time left over for fun.


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## Bushroda

*SBI Q1net profit up 78%, beats forecasts*
28 Jul, 2007, 1348 hrs IST, REUTERS

MUMBAI: India's biggest bank, State Bank of India on Saturday reported a better-than-expected 78 per cent rise in quarterly net profit, buoyed by strong demand for loans in the expanding economy. 

The government-run bank said net profit in the April-June quarter rose to Rs 14.26 billion ($352 million) from Rs 7.99 billion a year earlier. 

A media poll of 10 brokerages had forecast that net profit would rise 31.6 per cent to Rs 10.5 billion. The bank, valued at $19.6 billion, said net interest income for the quarter rose 15 per cent to Rs 44.98 billion. 

Analysts are upbeat about India's banking sector, but there are concerns about loan defaults after official interest rates were raised five times between June 2006 and March this year. 

Rival ICICI bank last week met expectations with a 25 per cent rise in net profit. Shares of State Bank of India rose 54 per cent during the June quarter, outperforming a 22.4 per cent rise in the banking index and the Mumbai market's benchmark index, which rose 12.1 per cent. 

Shares in ICICI Bank rose 12 per cent in the quarter.


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## Bushroda

*Air India Eyes 60-Jet Buy; Selection Process To Start Mid-Aug* 
Dow Jones Newswires

NEW DELHI, Jul 28: State-run carrier Air India said Saturday it plans to buy about 60 new commercial passenger aircraft over the next few years and aims to start the selection and purchase process by mid-August.

Air India, which is being merged with state-run Indian Airlines, ordered 68 Boeing Co. (BA) jets, worth over $11 billion at list prices, in December 2005 in a move to modernize its aging fleet.

"We will need to order about 60 plus more planes, but this is just a rough estimate," Air India Chairman V. Thulasidas said without giving a timeframe. He was speaking to reporters on the sidelines of an event marking the delivery of the first aircraft from Boeing.

Separately, Indian Civil Aviation Minister Praful Patel said the aircraft selection process is likely to begin in a fortnight.

"The whole plan will be evaluated for requirements like extra wide body aircraft ," Patel said.

According to industry officials, it takes up to four years for an aircraft to be delivered after the purchase order is confirmed.

India's aviation industry expects to grow by more than 25% annually over the next few years as a rapidly expanding economy boosts incomes, making it an attractive market for local and international carriers.

Around 60 million Indians traveled by air in 2006, and this is expected to increase to 100 million 2010.

Indian Prime Minister Manmohan Singh on Saturday formally launched Air India's new fleet, including its freighter service, at an event marking the delivery of the first planes from the Boeing order - two 777-200LR aircraft.

The 68-plane order comprises eight 777-200LR Worldliners, 15 777-300ERs, 27 787-8 Dreamliners and 18 next-generation 737-800 planes for its low-fare unit, Air India Express.

Air India will use the 777-200LR to become the first India-based airline to offer nonstop flights between the financial centers of India and the U.S. - Mumbai and New York - from Aug. 1, officials said.

In December 2005, Patel also said that as part of the Air India deal, Boeing will invest up to $100 million in India for setting up a maintenance, repair and overhaul complex and another $75 million to install four aircraft simulators.

Engine manufacturer General Electric Co. (GE) will also invest $20 million for an engine shop and another $10 million for training and other civil aviation requirements, Patel had said.

*Merger To Boost Performance*

In March, the government approved the merger of Air India and Indian Airlines in a move aimed at building a single airline to take on rising competition from both domestic and foreign rivals.

"There was a time when Air India was regarded as one of the world's best airlines. I am sure that Air India will once again regain that reputation," Singh said.

Legal formalities for establishing the National Aviation Co. of India Ltd. are expected to be complete in the first week of August, Civil Aviation Secretary Ashok Chawla said earlier this week.

National Aviation will run the merged airline - which will be called Air India to retain brand recall - and Air India Express.

When asked about recent media reports that the merger may be delayed as labor unions of the two airlines were unhappy with talks with the government on wage hikes and promotions, Chawla said the integration process will take time, but talks will go on.

"I have seen reports that some parts of unions have expressed a kind of anxiety. We are talking to them," Chawla said.

"The integration in terms of human resources will be spread over a long period of time and though this is going to take time, I see no difficulties."


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## Bushroda

*AI to launch Mumbai-NY non-stop flight* 
Sandeep Phukan
Saturday, July 28, 2007 (Mumbai):

On August 1, 2007, Air India will launch its first non-stop commercial flight between Mumbai and New York, using its brand new Boeing 777-200 LR.

The state-of the-art 777-200 LR, or long range, can fly up to 21 hours non-stop, and offers a luxurious flying experience.

Every seat on the aircraft is equipped with a personalized in-flight system that allows one to choose from a host of movies or music.

For the first class travelers, each of the eight first class cabins has seats equipped with a personalized dining table and a 24-inch screen for in-flight entertainment.

Moreover, each of the first class seats also open out into full beds, a facility that is also available for the Business Class passengers.

In fact, even in Economy Class, each seat has personalized screens, wider seats, more legroom and the ambience is just right.

But maybe all this is because the plane is brand new, and the question is whether Air India can sustain these standards and will VIPs continue to get free upgrades?

"Every flight will have a flight manager, who will be in-charge of the aircraft. The aircraft will belong to him. Every airline does upgrades. But now, there will no upgrades into First Class," said V Thulasidas, CMD, Air India.

Besides these facilities, Air India, as always, offers an excellent choice Indian and Continental dishes and some good French wine to go with it.

So all one hopes is that Air India can maintain the standards and make sure that its passengers cherish their non-stop journey.


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## Bushroda

*America No. 1! Maybe, but here come China and India.*
Reviewed by Noam Lupu
San Francisco Chronicle

*The Elephant and the Dragon - The Rise of India and China, and What It Means for All of Us
By Robyn Meredith*

The economist Joseph Schum-peter famously wrote that capitalism is characterized by a process he called "creative destruction." Radical innovations such as the assembly line or the Internet drive long-term economic growth, but they also displace established companies. Thus the computer replaced the typewriter and the CD replaced the cassette, which had replaced the LP. While computer manufacturers expanded their business and hired workers, typewriter companies went out of business and laid off workers. Overall, though, productivity boomed and the economy grew.

Today, we see a similar process taking place, but on an international scale. Manufacturers of consumer goods from sneakers to lightbulbs are expanding in China while factories in the United States close their doors. Back-office services from computer programming to customer service are booming in India as U.S. workers get laid off. We could call it creative destruction for a globalized world. China and India are the CD to our cassette -- their workers can perform the same jobs for a fraction of the cost of American workers. 

But do we still stand to benefit from this globalized creative destruction? Yes, argues Forbes correspondent Robyn Meredith in her new book, "The Elephant and the Dragon." If we take the right measures, the rise of China and India -- together containing a third of the world population -- can "be a catalyst to reestablish America's competitiveness" rather than the doomsday predicted by so many pundits. 

A comprehensive primer on the development of these Asian tigers, Meredith's book shows that the fear behind alarmist predictions is not entirely unwarranted. In 1996, China exported $20 billion worth of electronics. By 2004, those exports had grown to $180 billion. A stunning 75 percent of all new toys in 2005 were made in China. Its economy has grown an average of 9.6 percent a year since it began to embrace a market economy in 1978 (the United States grew roughly 3.5 percent last year). The same country that was issuing ration coupons in 1992 now features a Starbucks on the Great Wall and one in the Forbidden City. China's economy is expected to overtake the United States' by 2030. 

India's emergence, though more recent, is no less impressive. The country has grown at an average annual rate of 6 percent since beginning its economic reforms in 1991. India had 300,000 cell phones in 1996, but Indians today buy nearly 7 million cell phones a month. Foreigners have invested in more than 1,000 Indian companies -- a record for any country outside the United States. Of the world's 500 largest companies, 400 send work to India. As Meredith puts it, China has become "factory to the world" and India "back office to the world." 

Meredith is at her best describing these "tectonic economics," marshaling a clever mix of statistics and anecdotes. She is, unfortunately, less compelling regarding the big open questions: Will all this growth lead China to democratize, or will its authoritarianism give it an advantage over India's turbulent democracy? How are these countries likely to respond to growing inequality and the social upheaval that comes with rapid growth? 

Meredith is more interested in the immediate impact on the United States. There are advantages for Americans, such as lower consumer prices: More than 70 percent of discount items sold at Wal-Mart are made with cheap Chinese labor. What's more, economists estimate that for every dollar spent by U.S. companies in India and China, the United States gains 13 cents. While companies move manufacturing and back-office jobs, they also create jobs in research and development, marketing and software engineering. Overall, these shifts are a gain for the U.S. economy and American consumers. 

But Schumpeter was right to use the word "destruction." It's estimated that 9 million U.S. jobs will move overseas in the next 30 years. Even if new jobs are created, a laid-off factory worker or call-center operator will have a hard time landing a software engineering job. As wages rise in China and India, factory owners will start moving up the food chain to stay competitive, competing more directly with the more specialized manufacturing still done in the United States. 

The best way to deal with these problems, Meredith rightly argues, is neither apathy nor aggression. "Forget protectionism. Forget letting the free market ride," she insists. "To meet the challenges, the United States must choose a third way: the nation must focus on creating jobs." For Meredith, that means improving education, increasing personal savings, balancing the federal budget, upgrading infrastructure, funding basic research and providing a safety net for displaced workers. 

This is sound advice, and Meredith commendably highlights issues that have all but disappeared from the political agenda. The devil, as always, is in the details: Funding these necessary endeavors while maintaining a balanced budget means cutbacks elsewhere. Still, Meredith is optimistic: "Americans are flexible and creative, are risk-takers, are the world's optimists, and are at their best as underdogs." Even if she's right, we're in for a world of creative destruction.


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## Bushroda

*'Inflation at 4-5% not a big threat'*
28 Jul, 2007, 1950 hrs IST, PTI

NEW DELHI: Former RBI Governor and Rajya Sabha MP Bimal Jalan on Saturday said inflation rate of 4-5 per cent and the problem of excessive supply of money is not a serious threat to Indian economy. 

"Higher rate of inflation and the problem of excessive liquidity can be managed without taking much harsher steps," Jalan said while speaking at an interactive session organised by the Indian Management Institute here today. 

"In a situation where the country had a good monsoon, healthy forex reserves and reducing fiscal deficit, inflation at rate of 4-5 per cent did not pose a great threat to the growth of economy," Jalan Said. 

When asked about whether RBI should go for another hike in CRR, he said, "I would not comment on the matter as RBI is soon going for its periodical monetary policy review and it could lead to market speculation." 

Commenting on the public services in the country, he said, "Providing quality public services such as health, universal primary education and other such amenities to larger section of population is the real challenge today."


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## Bushroda

*Monetary policy review to be announced in rising Rupee scenario* 

The dilemma that the Reserve Bank of India was confronted with, at its April Policy announcement was to block the Rupee rally against US Dollar while maintaining price stability. The central bank`s main weapon to curb the Rupee rally was to intervene in the currency market by supplying more Rupee, Knowing the affect it would have on inflation. RBI, thus shifted its focus only on inflation, hovering above 6% in early months of the current calendar year and allowed the Rupee to touch 42/USD mark in April.

At the previous Policy event, the central bank undertook steps* that would result in more Rupee outflows, ultimately supporting the Dollar against the Rupee. However, weak Dollar sentiments in global market on the fears of US slowdown and higher yielding Indian equity and assets, attracted more foreign capital inflows in Indian market pushing the Rupee to breach 41 mark. The Rupee closed the policy announcement week at 40.89/USD.

Interestingly, the Rupee trading in the range of 40.20- 40.85, is an indication of RBI`s strong presence in the currency market during the three months. Data showed that RBI had bought USD 23.4 billion in intervention between January and May, while it is widely believed that the apex bank has continued the practice in following months too. The local unit as a consequence has remained above 40 till date, but alongside it has created a bunch of other complex problems.

With sustained intervention by RBI, the banking system currently is estimated to be packed with about Rs 400 billion liquidity, sending the overnight call rates near zero percent. RBI`s previous rate hike, aimed at reducing the bank credit had also hit the bull`s eye. Thus, sitting at the mountain of cash, banks have eventually started reducing their deposit rates.

In a search of better returns, investors thus have turned to the stock markets and other assets classes, pouring liquidity into them. Excessive liquidity in any assets market puts pressure on prices, dragging them to asset bubbles conditions and thereby can affect the financial stability of the economy.

Besides that, excessive cash can also lift the commodity prices. Though, WPI-based inflation has lowered below RBI`s comfort threshold of 5%, the fall is attributed to higher base effect. Facts, which one should concentrate on, are upward revision of inflation data and rise in absolute prices. On top of that, banks in order to find customers for their cash, has started playing the card of reducing lending rates. Thus cash available at cheaper rates can even worsen the problem, hence adoption of efficient measures are need of the hour. 

Since last December, the apex bank had used the rate hike tool to contain inflation and inflationary expectation. While remaining vigilant on the lag effects of those rate hikes, the central bank is now also expected to press a pause button on tightening monetary policy. The present, its not overheating that is the cause of fret but it`s a problem of plenty that has become the cause of concern for the Government. To do away with this problem, a CRR (cash reserve ratio) hike is considered as an efficient way to drain out excess liquidity from the banking system. 

Central bank`s decision to hike CRR by 25 or 50 bps will be sufficient to suck the excess liquidity, said a treasurer. At present, RBI is also opting to issue bonds under Market stabilization (MSS) scheme to sterilize this liquidity. However, the option is a little expensive when huge interest payments on such bonds are considered. On top of that, RBI is approaching the self-imposed limit of Rs 110 billion for bond issuances, which limits the scope of implementing this alternative.

Market experts are also mulling over the possible enhancement of ceiling on cash absorption (Rs 30 billion) at reverse repos window to Rs 100 billion. However such provision may give rise to an interest rates arbitrage opportunity in the presence of call rates nearing 0-1% and reverse repos of 6%. Thus, to remain on the safer side, RBI is unlikely to alter this provision.

The above discussed measures are likely to cure the liquidity problems, but the problem of rising Rupee has not been solved from its root. IT and exporters of various segments have been affected severely, whose main income is from exports. Though, exporters were offered packages, there were acknowledged to be very insufficient given the 8% plus appreciation of Rupee against the Green Buck. Moreover, ample liquidity in the banking system has pushed the forward premia on Rupee in negative zone, there by Indian exporters who tried to hedge their currency risk for short period were the losers from this end too. However, the government`s speedy efforts to provide various relief packages to exporters indirectly suggests that exporters have to live with strengthened Rupee. It may be recalled that Y. V. Reddy, RBI`s governor, after the previous policy announcement, said that (Rs/USD) exchange rates are market determined. 

Still market participants are seeking RBI`s initiatives to promote growth in the scenario of appreciating Rupee. At present, infrastructure is one of the thrust areas for investment; sharp Rupee appreciation may threaten long term funds inflows to invest in India. Hence, project related to ECBs (External Commercial Borrowings) at lower interest rates and other schemes to bolster overseas investment in infrastructure sector are considered as immediate requirements. Some of the experts are also foreseeing lower deposit rates on foreign deposits ahead of monetary policy review scheduled on July 31. 

**Steps towards capital account convertibility*

1) Overseas investment limit (total financial commitments) for Indian Companies enhanced to 300% of their net worth.

2) Listed Indian companies limit for portfolio investment abroad in listed Overseas companies enhanced to 35% of net worth.

3) Aggregate ceiling on overseas investment by mutual funds enhanced to USD 4 billion.

4) Prepayment of external commercial borrowings (ECBs) without prior Reserve Bank approval increased to USD 400 million.

5) Present limit for individuals for any permitted current or capital account transaction increased from USD 50,000 to USD 100,000 a financial year in the liberalized remittance scheme.


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## Bushroda

courtesy: CNN Money


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## Bushroda

*Air India cuts non-stop US fares by 33 per cent* 
The News, Pakistan 

NEW DELHI: To compete with private airlines, state-owned carrier Air India has reduced fares by an average 33 per cent for its non-stop Mumbai-New York flight from August 1 on its fully furnished new Boeing B777-200-LR aircraft, a business Web site reported.

Air India took delivery of these B777-200 aircraft in Seattle on Thursday. Air India has positioned its fares on a par with airlines offering one-stop services to US.

The national carrier has reduced its economy fares by 37.17 per cent to Rs50,700 (return fares excluding taxes) from Rs80,700. The executive (business) class fares were lowered by 40.11 per cent to Rs159,700 against the original price of Rs266,700.

The first class fares of this brand new carrier has been reduced by 22.01 per cent to Rs357,700 against Rs458,700. The duration of the flight is about 16 hours, resulting in saving of over four hours.

A senior Air India executive said: This is part of the strategy of testing the market. This will be a kind of introductory offer. The original fares would be restored once the market becomes sensitised about the experience of non-stop US flights which is offering world-class facilities on-board.

Travel Agents Federation of India General Secretary Ajay Prakash said this is a step in the right direction which will enable passengers to experience brand new aircraft and its comforts.


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## Bushroda

*Gems & jewellery exports up 13%*
Press Trust of India

MUMBAI, July 28: Notwithstanding the complaints made by exporters from different sectors of the economy about the dampening effect of rupee appreciation, the countrys gems and jewellery exports have registered a 12.89 per cent and 21.58 per cent growth in the rupee and dollar terms respectively in the first quarter ended 30 June.

According to figures released by the Gems and Jewellery Export Promotion Council (GJEPC) here, the provisional net exports of gems and jewellery stood at Rs 18,398.55 crore in April-June this year as compared to Rs 16,298 crore in the corresponding period last year.

The gems and jewellery exports escaped the impact of rupee appreciation because a of slew of factors. The fact that this sector is import-centric actually helped, said Mr Sanjay Kothari, chairman of GJEPC, adding that as much as 75 per cent of the raw material needed is imported. India is the largest importer of rough diamonds.

Besides, unlike sectors such as textiles and leather which incurred higher input costs due to rising rupee, the remittances and payments by the industry are done in dollars, thus avoiding the perils of rupee appreciation. 

Gold prices have significantly gone up compared to last years prices too, affecting the prices of gems and jewellery. Exports in dollar terms improved from $3,623.12 million to $4,405.08 million in the quarter ended June 2007.

Gold jewellery exports, however, remained stagnant at Rs 3,034.43 crore as compared to Rs 3,020.44 crore. Exports of gold jewellery from export promotion zones increased from Rs 1,483.1 crore to Rs 2,243.60 crore in Q1 FY 2008. 

Exports of cut and polished diamonds stood at Rs 12,056.46 crore in the quarter as against Rs 10,810.17 crore in the year-ago period, contributing significantly to the growth of the sector. 

Exports of coloured gemstones showed a marginal improvement at Rs 223.52 crore as compared to Rs 222.90 crore, while exports of non-gold jewellery, pearls and synthetic stones jumped 80 per cent at Rs 304.95 crore from Rs 169.33 crore in the corresponding period last year. 

Exports of rough diamonds, however, declined by 9.55 per cent at Rs 535.58 crore in the first quarter of financial year 2008 as against Rs 592.16 crore in the corresponding period last year. 

Rough diamond exports in dollar terms declined by 2.59 per cent at $128.23 million as against $131.64 million, the GJEPC, the apex body of gem and jewellery industry, said.

The country has imported rough diamonds worth Rs 10,435.56 crore in the quarter as compared to Rs 9,852.72 crore in the corresponding period last year.

Gold bar imports have come down by 29.56 per cent to Rs 1,122.16 crore as against Rs 1,593.05 crore. Imports of cut and polished diamonds have showed a sharp jump of 84.32 per cent at Rs 3,919.62 crore as against Rs 2,126.56 crore in the year-ago period. 

The overall net imports of gem and jewellery increased by 16.21 per cent at Rs 16,449.04 crore during the quarter as against Rs 14,154.59 crore in the first quarter of financial year 2007. In the financial year 2007, gem and jewellery exports amounted to Rs 77,180.28 crore ($17.1 billion).


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## Bushroda

*Indian index likely to pause for breath* 
By Geetha Bhaskaran, Special to Gulf News
Published: July 28, 2007, 23:03

Mumbai: Indian shares could face turbulence this week if the global equity sell-off picks up momentum, but few pundits are willing to bet the bull run has lost steam. 

Robust growth prospects for Asia's third-largest economy will underpin Indian stocks in the near term, with quarterly earnings reports reinforcing the view that companies are poised to reap the benefit of rising demand. 

"There'll be head winds," said equity trader Ramnik Shah. "But there's enough fuel in the tanks to push ahead."

Concerns of a deepening subprime mortgage crisis in the United States have spooked global markets, and a slowdown in spending in the world's largest economy could hurt some Indian companies like software services exporters. 

However, India's economy is mainly driven by domestic demand which remains upbeat. Maruti Udyog, the country's largest car producer, last week posted a 35 per cent jump in quarterly profit as it rode higher sales of premium cars, suggesting a sharp rise in interest rates had not dented demand. 

*Heavy intervention*

Bharti Airtel said its quarterly profit more than doubled as the top mobile services provider grabbed new subscribers at a rapid pace in the world's fastest growing mobile market. Bharti, with nearly 43 million subscribers, added 5.6 million users in the June quarter. 

Data released last week by the regulator showed all mobile services providers signed in a record 7.34 million subscribers in June, taking the total to 185 million. 

But top motorcycle maker Hero Honda Motors posted a drop in profit for the fourth quarter in a row as higher interest costs kept buyers away. 

Focus this week will be on the Reserve Bank of India's (RBI) policy meeting on Tuesday, when most analysts expect the central bank to hold interest rates steady for a second quarter in a row. 

But the RBI may announce measures to suck out excess cash supplies, largely caused by the central bank's heavy intervention in the foreign exchange market to slow down the rupee's relentless rise against the dollar. 

"Inflation has remained below RBI's threshold of 5 per cent for seven weeks, but there's a lurking upside risk," said trader Onkar Mehta. "The RBI's stance on the outlook will be watched." 

Foreign fund flows will also be on the radar. The Sensex hit record highs on 14 days this month, the latest on Tuesday last week, driven by heavy portfolio inflows. 

Latest data showed foreigners bought shares worth nearly $6 billion in July, taking the total for the year to about $10.5 billion - within sight of the record $10.7 investment in 2005. 

Still, the sell-off across global markets on Friday tripped Indian shares, pushing the Sensex down 3.4 per cent and delivering its first weekly loss in seven weeks. 

"It was a welcome correction," said Mehta. 

"The market had been speeding on a one-way track, and needed to catch its breath." 

He expected the market to consolidate, digesting part of the gain and then resuming its climb. The Sensex is up 4 per cent in July and 10.5 per cent in 2007. 

Some of the top companies are scheduled to release their quarterly earnings this week. They include: Tata Steel, Mahindra & Mahindra, Bharat Heavy Electricals, NTPC, Cairn India, Nalco and Indian Oil Corp on Monday; Tata Motors, Reliance Communications and VSNL on Tuesday.


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## Bushroda

*LIFE@300kph*
29 Jul, 2007, 0419 hrs IST,John Sarkar & Meenakshi Verma, TNN

They are finally here. The macho 1670cc V-twin power cruiser MT-01 and the slick 998cc R1 are already lazing around in Yamahas garage in downtown Delhi. By the end of next month, the Jap bike maker is going to announce the price of their super bikes. 

We are putting in place the after-sales infrastructure now. Its very important to have a solid back-up in place for these bikes. Technicians have to be specially trained to service these machines because they are highly sophisticated, a Yamaha spokesperson said. 

Thats not all. Yamaha also intends to train customers in the skills necessary to handle these superfast motorcycles. These super bikes will be sold for an estimated Rs 11-13 lakh, and when you are coughing up that amount of money, you expect the service back up to be spot-on. 

Forty-five-year-old Arun Thareja, who is a super bike specialist and owns three of them, says, People are going to go down on these bikes, so more than after-sales support, companies should be ready with spare parts like panels, indicators, panels and wind screens. And oh yes, the tyres wear out every 7,000-8,000 km, so the sales department should have a good stock ready. I think one or two service centres in each city would do. 

Even Suzuki is keen to launch their super bikes here. Says Atul Gupta, VP-marketing at Suzuki Motorcycles and Scooters India: We are keenly studying three aspects of selling high-end bikes. One is how well can we homologate our high-end bikes for Indian conditions. Also, we are looking at what are the top cities where we see maximum sales potential and then the question of how well we manage to handle the after-sales and parts issues. 

So, companies planning to launch their top-end bikes here feel that after-sales service is what they should look into first. We are already ensuring that Suzukis technical team is trained in Japan to handle those bikes who, in turn, will train our dealers in India. Training does not incur lot of cost; in fact, most Suzuki dealers have enough space, which is the biggest cost for them. But we are working out a very sound after-sales strategy for being able to sell our high-end bikes in the country, Gupta adds. 

Even Honda Motorcycles and Scooters India (HMSI) is bullish about the niche market that India offers for super bikes. Says Sanjay Gupta, senior manager, marketing at HMSI: We will be going forward by introducing safety riding skills first. We already have simulators in place at some of our dealerships where a customer is put through various emergency situations. At present, we are putting in place the basic infrastructure before introducing the big bikes here. 

So when you have a machine that accelerates from 0-100 kph in less than three seconds and has a top speed of 300 kph, its imperative for bike makers to have the necessary service infrastructure in place. And who knows, on Indian roads, an ambulance service also doesnt seem very far fetched!


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## Bushroda

*Calling all with a chip on the shoulder*
Dr Vidya Mulky
July 28, 2007

The Indian semiconductor and embedded design industry clocked revenues of $3.3 billion in 2005 and employed nearly 75,000 people. This is expected to increase to $43 billion in 2015 with employment of more than 780,000. The semiconductor sector encompasses VLSI (very large-scale integration) design, hardware/board design and embedded software development, services that are offered by both captive and non-captive organisations across India.

The driving forces behind this growth are the rapidly growing domestic market, a strong education infrastructure, lower cost of talent, short product lead times, reduced entry barriers, rising government support, and an improving infrastructure.

The ISA-EY Benchmarking Study 2007 puts the semiconductor design sector in India alongside peer countries such as Canada, China, the Czech Republic, India, Israel, Taiwan, the UK and the US. Some of the things that clearly position as India as an attractive design hub are the availability and scalability of talent, quality of talent, quality of technical education, and the cost advantage.

But despite Indias educational network, there is a supply shortage of competent professionals confronting companies seeking to expand semiconductor design activities in India. The pressure on companies to emerge from the skills shortage is high at present, and will only increase with time.

EDA (electronic design automation) companies  into products and services  form the starting block for the VLSI and hardware/ board design market. They are one of the most important links in the semiconductor value chain. EDA companies have taken the lead in India in developing engineering talent for the industry.

Their models can be successfully replicated and scaled up. A structured plan to pro-actively address the workforce shortage at the campus stage itself could be achieved through:

Awareness: Students and placement officers at universities need greater awareness about the sector, its companies, compensation and benefits, thus enabling qualified people to make it the first choice at campuses. This could be through focused visibility programmes and the mass media.

Curriculum update: Industry support in introducing a relevant curriculum at the appropriate stage could help make the industry a viable option.

Centres of excellence: Joint initiatives between the industry and universities to establish centres of excellence for R&D in VLSI engineering, design automation and embedded system engineering, thereby creating intellectual property and raising familiarity among academics. 

Faculty sabbaticals: Short-term projects updating of technology awareness for faculty members in specific university departments could bring about specialisation among the academia.

Government: Grants and scholarships to encourage doctoral and postdoctoral research in premier institutes. Support to faculty and researchers to present papers globally and file for patents will be beneficial in the short and long terms.

Industrial training: Project assignments to engineering students for familiarisation with the latest technology will provide hands-on training.

Since this is a niche field that requires expertise not widely available, its employees are in high demand. Growth prospects  in terms of technical knowledge and escalation to higher positions  are among the fastest in the tehnology industries.


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## Bushroda

*India's Tata may begin Jaguar due diligence* 
Sabah, Turkey

India's Tata Motors Ltd. may start due diligence next week to acquire Ford Motor Co's Jaguar and Land Rover brands, the Hindustan Times reported on Saturday.

"Senior Tata officials are already in London. They will start due diligence from next week," it quoted a source close to the transaction as saying.

A spokesman for Tata declined comment.

Tata and its local rival Mahindra & Mahindra Ltd., along with U.S. buyout firms TPG and Ripplewood, were among those that have expressed interest in the marques, a person familiar with the matter said on Thursday.

The Hindustan Times said Citigroup was believed to be advising Tata, India's top bus and truck maker, on the deal.

The newspaper said Arun Gandhi, a director in the Tata group who was involved in Tata Steel's acquisition of Corus, was expected to lead the team of negotiators.

Ford said last month it was working with financial advisers on the best options for Jaguar and Land Rover. Sources have said Goldman Sachs, HSBC and Morgan Stanley are the banks on the deal.

Both Tata and Mahindra have declined to comment on the reports that they are in talks with investment banks and private equity firms to craft bids.


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## Bushroda

*India's Mobile Phone Sector Shows Huge Growth* 
Voice of America
By Anjana Pasricha 
New Delhi
28 July 2007

India's telecommunication sector is witnessing explosive growth, as falling tariffs and rising incomes bring mobile phones within the reach of millions of new customers. As Anjana Pasricha reports from New Delhi, telecommunication companies are now pushing into rural areas.

An unidentified fisherman speaks on his mobile phone on the outskirts of Chennai, India, 10 Jan 2007 
India's largest mobile phone company, Bharti Airtel, announced recently that it doubled its earnings in the April through June quarter to $368 million dollars, compared with a year ago. Subscribers rose by 82 percent. 

The staggering numbers did not surprise anyone in a country that is witnessing massive growth in the mobile phone market. 

Mobile users in the country have exploded from a mere five million in 2001 to 185 million at present.

A new study by the Gartner technology consulting group says the number will more than double in the next five years, growing to 462 million by 2011. 

But as urban centers are already saturated, much of the new growth will come from rural areas, home to two-thirds of the population.

That presents a lucrative opportunity in a country with more than 1 billion people. 

A senior research analyst at Gartner, Madhusudan Gupta, says service providers have started to focus on the rural market by offering low tariffs and affordable handsets. 

"The cost of the handset has gone has down as low as less than $25 U.S," he noted. "They are actually selling it on their own manufacturing cost. Therefore, what has happened is that a lot of rural people whose disposable income was not to an extent that they can afford it, are now in a state to buy it. They will obviously be giving lots of subsidies even on their voice tariffs."

Rates for domestic mobile services have dropped steadily in India, and are now among the lowest in the world at two cents a minute. 

All major telecom companies have begun investing heavily in new towers and base stations in the countryside to tap the rural market. Bharti Airtel, for example, is investing $2 billion over the next two years to expand its network in rural areas. 

State-owned Bharat Nigam Sanchar Limited plans to spend $4 billion on rural coverage as well as broadband network expansion. 

Increased mobile service could be a boon for rural areas, where the fixed-line infrastructure is poor, and most people do not have access to a phone. 

India is now the world's third largest mobile phone market after the United States and China.


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## Bushroda

*`India Inc`s overseas buys to cross $40 bn this year`* 
BANKER-SPEAK: Chanda Kochhar 
Anita Bhoir & Rajendra Palande / Mumbai July 29, 2007 

Chanda Kochhar, Deputy Managing Director at ICICI Bank, is currently at the helm of the banks corporate and international business after having overseen the bank grow into the countrys largest retail bank. Since she took charge, the banks international banking group (IBG) has more than doubled its asset book to over $19.18 billion leveraging the corporate linkage back home. In an interview with Anita Bhoir and Rajendra Palande, Kochhar talks about how ICICI Bank had sensed much earlier the substantial rise in cross-border acquisitions by Indian companies and had accordingly established presence overseas. Excerpts: 

*Whats driving ICICI Banks corporate and international businesses?* 

India is at a different inflection point today with the country riding on a healthy demand cycle and the corporate sector in turn investing in capacity building to meet the rising demand. After discussions with about 300-400 of our corporate clients, we have estimated that the investment pipeline has swelled to about $500 billion. 

More than half of this is in infrastructure and about 40 per cent in the manufacturing sector. This situation is unlike the 1990s when corporates were highly leveraged. Corporates now have healthy cash flows having generated cash of around $150 billion last year. 

*How is ICICI Bank capitalising on the investment pipeline?* 

We are known for our project appraisal skills. We have participated in major projects like the Delhi airport upgrade project, major toll road projects, power projects and steel and cement expansion projects. For appraising risks in various sectors, we have experts. 

The in-house expertise helped as the corporate team was cautioned against taking exposure to gas-based power projects with gas availability still some time away. The bank has also been sole underwriter to select rupee loans. We were underwriters to an aggregate of Rs 40,000 crore of loans last year. 

*How did ICICI Bank prepare itself for tapping business opportunities flowing from Indian companies overseas forays? *

It is pleasing to note that Indian corporates are planning to grow both domestically and globally. The demands of the corporate sector from Indian banks have changed in the recent past. 

They are now looking to work with banks that have the balance sheet size to support their inorganic growth and the ability to structure deals and also finance them at competitive rates through innovative structures. 

The banks offices across 18 countries helped in growing corporate business. Our share in the $11.5 billion foreign currency loan market was the highest last year. Of all the M&A transactions in 2006, we participated in 52 per cent of the deals. According to our estimates, this pipeline will continue to be robust as we expect deals of about $40 billion this year. This number could rise. 

*Given these levels of activities, how has ICICI Banks international book grown?* 

We sell almost 80 per cent of M&A finance to other banks within 10 to 15 days. We started a little over three decades ago and today have an international book, which is the largest among all Indian banks. We have the largest network when compared to any private bank in the country. 

Our international banking book totals $19.18 billion. We have 6,86,492 non-resident Indians as customers and direct (on-line) banking customers of over 98,860. 

The bank handled inward remittances of $8.48 billion last year, which is 28 per cent of the total. In some markets like Singapore and Bahrain, we are larger than all Indian banks present there. In Singapore and Bahrain our assets books are $6 billion and $5 billion respectively. 

*What has given ICICI Bank an edge over other Indian players overseas?* 

Like the retail story, we at ICICI Bank had sensed the growing international aspirations of corporate India three-and-a-half years ago. We then decided to give the banks international foray a big push. We wanted to set up capabilities for loan structuring and syndication. 

Today, the bank has 2,000 employees spread across 18 countries. We have also set up a dedicated foreign exchange derivatives business team of 100 people. 

Currently, we have a 25 per cent market share in the derivatives business in India. We also have product experts that assist our corporate bankers and help business houses understand various derivative and forex products. We have built this team over a period of three years.


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## Bushroda

*Jaipur, land of princes, palaces, peacocks*
David Bowden
The Brunei Times
KUALA LUMPUR
29-Jul-07

IF THERE were ever a city to fit the cliche{aac} concept of "a city of contrast", Jaipur in the Indian state of Rajasthan would be it as palatial buildings rise above the remnants of the walled city while destitute, homeless and unemployed rural folk take advantage of every piece of open land to set up shelters.

The Indian state of Rajastan is dominated by the shifting sand hills of the Thar Desert and Jaipur; its capital city since 1728 is one of the country's most historic cities and a "must see" for visitors. Known as the "Pink City", Jaipur was planned in the 17th century by Maharaja Jai-Singh.

While not losing sight of the misery for some of the city's inhabitants, visitors to Jaipur can discover extravagant palace forts and many intricately-carved temples to appreciate one of the world's greatest concentrations of heritage buildings.

Jaipur is one of the main destinations in the "Golden Triangle" linking the other key cities of Delhi and Agra (home to the famed Taj Mahal). All three are on many tourists' itinerary but distances between them are considerable and at least one week should be allocated for the exercise. Jaipur is arguably the most fascinating of all three, thus the best one to visit if time is limited.

The name "Pink City" is a little misleading as the colour of many of the older buildings in the historic heart are more rusty ochre but perhaps this is due to the accumulation of dirt, time, and dust on the pink-coloured paint that is applied every few years.

The city resembles a medieval citadel surrounded by more recent modern-styled buildings that are so typical of India's rapid economic expansion. However, cows roaming the street and carts pulled by camels clearly remind visitors of the city's traditional roots.

The city is surrounded by low foothills that are crowned by forts and enclosed by protective walls. The main attractions to visit in and around the city include the Amber Palace, City Palace, the Hawa Mahal, Jantar Mantar and Johari Bazaar. 

The pinkish facade of the Hawa Mahal is one of the most identifiable images of India having been used by Indian Tourism to sell the country for decades. Alternatively known as the Palace of Winds the highly ornate building contains over 950 latticed windows. The building was constructed in the 18th century for the then Maharaja's wives and servants to discreetly view the outside world without being seen. It is best visited before 8am as the sunlight afterwards is too harsh for photographs.

Jantar Mantar or the Observatory looks like a collection of stone sculptures but this fascinating open area display has been used to make astronomical observations for centuries. It features sun dials, zodiac signs and instruments to record every celestial feature.

The City Palace dominates the centre of the walled Pink City. The current Maharaja and family still live in an off-limits section of the fort but the public areas include a textile museum, royal armoury, ornate gates, detailed frescoes, gardens and places where musicians entertain visitors. The tranquil Palace Cafe{aac} should not be missed for its impromptu dance performances and soothing tea (www.royalfamilyjaipur.com). 

The Amber Fort is built high on the Galta Hills some 30-minutes drive from the city. Due to its massive scale, the fort was never being overrun by invaders. There are many interesting architectural features as well as the opportunity to ride on ornately- decorated elephants. Inside the fort, Garnesh Po is an ornate gate with beautiful frescoes, the Crystal Palace and rooms with mirrored ceilings resembling countless stars.

For those about to shop, Jaipur offers many bizarre bazaars. The shops around Hawa Mahal are the most commercial but don't expect too many bargains as the traders are used to serving throngs of cash-rich tourists. Johari Bazaar is the city's liveliest market with clothes, shoes, ceramics, jewellery and gemstones. Bartering is expected and anyone who believes they will make a financial coup in buying gemstones here and selling them overseas, may be disappointed.!

Several magnificent properties in the city have been con-verted into boutique and luxury hotels. They offer personalised service and are often decorated with ancestral portraits, weapons and royal heirlooms. No rooms are the same especially the suites and many are within the price range of travelling Asians. 

The palaces fit for Maharajas include the Rambagh Palace (operated by the Taj Group _ www.tajhotels.com), Raja Mahal Palace (www.royalfamilyjaipur.com) and Mandawa Haveli (www.castlemandawa.com). Alternatively contact the Indian Heritage Hotels Association (indianheritagehotels.com) for details on the most superb collection of unique historic properties located throughout the whole of India. For general information on Jaipur log onto www.rajasthantourism.gov.in.

Jaipur is 262km to the south of New Delhi or five hour's drive. Alternatively fly from New Delhi on Jet Airways (www: jetairways.com), or catch a train (the Shatabdi Express or the Pink City Express). A luxury train called "Palace on Wheels", visits Rajasthan's imperial cities over a week (www.palaceonwheels.net). 

Many city attractions are within walking distance but a car, driver and guide are best used as they are competitively priced; book at the India Tourism Office located near the train station. Cars also offer some relief from the heat and the teeming mass of humanity which can takes its toll as the day goes on.

Weather is a big consideration for visiting Rajasthan as the summer months can be perilously hot. Opt for the cooler months from October to March.

In many ways, Jaipur exhibits flamboyant architecture and in others, it provides a fascinating insight to life on the streets of India.

Whatever takes your fancy, Jaipur is a jewel in India's tourism portfolio.


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## Bushroda

*Feeling At Home* 
*State-promoted service apartments, with a 'feel India' flair, are wooing foreigners* 

Lola Nayar 

*No Alien Backpackers *
The Union tourism ministry is promoting branded home stay or B&B as an affordable alternative to budget hotels 

- It aims to be economical, homely and give the visitors an Indian experience 

- The concept is catching on with NRIs, PIOs, corporates, foreign tourists etc 

- India now needs 70,000 hotel rooms, double that by 2010 to meet the target of 10 million overseas visitors annually

Jay Ahuja, an Indian American settled in Miami, had all the fun, frolic and colour associated with any Hindu wedding, when he got his 28-year-old daughter married in the capital during a fortnight's sojourn at Comfort Home stay properties. "We rented two homes in Delhi. All the pre-marriage ceremonies were held there, although the wedding was at Le Meridien. The atmosphere was more like a home, we could order Indian meals with the help provided," explains Ahuja.

Ahuja is now planning another stay next January at one of the Comfort Home stay properties promoted by Maharaj I.S. Wahi of Travel Promotion Bureau. Comfort Home stay is the first attempt by the Union tourism ministry to promote the B&B and service apartment concepts as branded products. Several states are planning to adopt the guidelines issued by the ministry in October last year to promote the B&B concept.

"We are not tampering with the properties' looks, instead we're training house-owners to raise the comfort levels. Standardisation is part of the exercise," says Wahi, who is providing training to prospective hosts. The benchmarks include use of herbal products, white khadi linen and quality cleaning products. Wahi is not targeting volumes; he wants to establish Comfort Home stay as a premium B&B brand with 5,000 rooms across the country in the next five years. The idea is to give visitors a glimpse of Indian life, cuisine and culture.

In the recent past, a growing number of people, including foreign tourists, corporates, NRIs and PIOs are choosing B&Bs or home stays. Reveals Ajay Parihar, senior manager, makemytrip.com: "In April-June this year, 10-15 per cent of the queries we got were for B&Bmostly from the US." Doris Delessard, a Delhi-based French woman who provides property consultancy to foreigners, feels B&B and serviced apartments "provide a cost-efficient, warm and tailor-made option for clients planning a long stay, particularly during the peak tourist season."

There are other reasons for the trend. The government has realised that a severe lack of quality accommodation, particularly for budget tourists, is checking India's plan to achieve its annual target of 10 million overseas visitors, up from 4.2 million arrivals last year. The tourism ministry feels India needs another 70,000 hotel rooms now, and double that figure by 2010. And that most of these rooms have to be in the budget segment.

Both foreign and domestic budget and business travellers are unable to find quality accommodation. Many point out that it's tough to get hotel rooms during peak seasons. Worse, hotels jack up rates, which can be higher than the tariffs in London or Dubai. As a possible solution, MNCs have started putting up their junior and middle-level executives in home stays or service apartments in cities like Bangalore, Hyderabad and Gurgaon. 

Possibly, the first administrative initiative was taken by Goa, which has over 600 registered B&Bs and service apartment clusters. Explains Pamela Mascarenhas, deputy director, Goa's tourism department: "We started it in 1985, from one-room hutments to upmarket heritage homes. During October-March period, there's 60-70 per cent occupancy." Of late, other states, especially Delhi and those in the south, are following suit.

Delhi is to issue an ordinance next month making it attractive for house-owners to offer home stays.

It has estimated a need of over 20,000 rooms to meet the demand during the 2010 Commonwealth Games. Karnataka and Kerala too predict an increase in demand by a few thousand rooms. Both these states have recently issued guidelines for home stays to develop a distinct brand that is radically different from the image of "brothel homes and shady drug digs".

With safety and quality experience as the benchmarks, M. Sardana, north India regional director, Indiatourism, underlines that house-owners are being vetted on the basis of their educational, political and cultural background. Says U.V. Jose, additional director, Kerala Tourism: "Earlier, families didn't look at it as a source for income, now there's premium attached to family name and fame to attract high-end tourists."

Karnataka information and tourism secretary I.M. Vittalamurthy says his state has 500 homes in Coorg, besides 40-50 in Chikmagalur and Shimoga. "All these are plantation areas with scenic beauty and, more importantly, educated people," he says, nostalgically recalling how his home stay in Scotland helped him interact better with the locals.

Targeting to make 1,500 B&B rooms available in rural tourist hubs by end-2008, Karnataka is simultaneously developing infrastructure like roads, signage and civic amenities while marketing the selected districts as weekend getaways for executives. Wahi and Vittalmurthy underline that home stay is an environment-friendly alternative to setting up new hotels. So, next time you are travelling, don't look for a hotelhave a comfortable stay at home. Your next stop can, ideally, be Comfort Home stay.


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## Bushroda

*Planet Hollywood to anchor off Mumbai`s coastline*
P R Sanjai / Mumbai July 29, 2007 

The high-profile denizens of Mumbai and other celebrities will soon have a new place to hang out. Planet Hollywood, the US-based theme restaurant, is planning its debut in India by setting up a floating restaurant around the Mumbai harbour. 

Shubh Hospitality, the master franchisee of Planet Hollywood, will import a 5-deck ship from the US, which will be functional for eight months in a year. US-based Shubh Hospitality, which has a presence in Mumbai, also owns and operates Marriotts, Sheratons and Doubletree Hotels in the US. 

The investment for this first-of-its-kind venture has not been disclosed. When contacted, Shubhs sister company Arch Millenniums president and CEO, Siddharth Mobar, confirmed the development. 

This could be the first floating restaurant in India of this size. I cannot divulge more details at this point of time. We are in the process of getting the necessary details, he told Business Standard. 

The floating restaurant will have a restobar, a coffee shop, even a spa and lounge facilities. It is expected that Planet Hollywood Mumbai would also be used as an interesting venue for events like product launches, conventions and fashion shows. 

Like Hard Rock Cafe, Planet Hollywood is a theme restaurant chain. It began its innings with support from Hollywood superstars like Arnold Schwarzenegger, Demi Moore, Bruce Willis and Sylvester Stallone. 

While Shubh Hospitality executives could not be contacted, Maharashtra government sources confirmed the development, adding that the Tourism Department had given its green signal for this floating hotel concept in Mumbai harbour. 

During the off-season, the floating hotel will be anchored at Mumbai Port, the same place where international cruiseliner Superstar Libra operates domestic cruises. 

Interestingly, besides Planet Hollywood, other domestic hospitality majors have also planned setting up of floating restaurants in the port limits. 

There is one floatel  floating hotel  operating on a barge in Kolkata. We have also received proposals to start floating retail malls and restaurants on the sea, A K Chanda, chairman, Kolkata Port Trust (KoPT) told Business Standard. 

At present, Kolkata Port operates river cruises to Sunderbans. Goa has also received proposals for floating restaurants, while Panjim Port already has over 30 small passenger ships, that have restaurants aboard.


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## Bushroda

*A healthier future...* 
Radhieka Pandeya / New Delhi July 28, 2007 

...but for whom, ask analysts, as investors and the corporate medical sector gear up to pour money into medical cities. Radhieka Pandeya does some crystal-gazing. 

In August 1883, the quiet American city of Rochester came tumbling down under a tornado. As 24 people breathed their last, 40 others were left gasping for breath and medical care. The disaster gave birth to an idea, an idea that became a dream for Dr William Worrall Mayo  to give Rochester its first hospital. 

Six years later, the dream came to life and in September 1889, under the watchful eye of Dr Mayo, Saint Marys Hospital opened its doors to the public. As decades passed, the hospital spilled over into an institution and a research and development centre, giving America and the world one of its largest, most prestigious medical cities  the Mayo Clinic. 

A century after the inception of the clinic, a young Indian doctor practicing in America also began nurturing a dream. He wanted to create in India the same standard of healthcare, training and research that he saw in America, to build in India the Mayo Clinic of the East. 

In 2004, almost 20 years after his return from America, popular (and now controversial) heart surgeon Dr Naresh Trehan and president of the Indian Healthcare Federation announced his ambitious project  the Rs 1,250 crore MediCity coming up in Gurgaon. Enough ink has already been spilt on Trehans ignominious exit from the Escorts Heart Institute and Research Centre (EHIRC), but for a huge country like India with healthcare the current buzz, it is hardly surprising that medical and health cities seem to be surfacing on the horizon. 

Six months ago the Aditya Birla Memorial Hospital started near Pune, last month Dr Pratap C Reddy swung the doors open to the Apollo Health City in Hyderabad, and at the same time Shivinder M Singh began work on two Fortis Medicities, one in Gurgaon and another in Lucknow, with the promise of eight more in the pipeline. 

The concept of a medical or health city stands unprecedented in India. Not surprisingly, it is often a misunderstood term. A cluster of hospitals, a holistic healthcare centre, a large hospital sprawled across acres of land? Certainly. 

But it doesnt end here. In simpler terms, the difference between a hospital and a medical city is as vast as the difference between a corner shop and a megastore What you wont find at the shop, you will be certain to get at the store. 

In what could be the beginning of a medical renaissance, medical cities could change the way medical education and research and development is conducted in India, taking it from public to private to corporate. For Trehan, a medical city translates into an institution that has the resources and excellence to take clinical treatment out of operation theatres and into classrooms and laboratories. 

It is an institution of the calibre to train people from the level of a medical school right to the end the highest level of medical education. But this needs to be done through the highest level of faculty, which is not only into practicing medicine but equally involved in teaching and research. 

Institutions like the All India Institute of Medical Sciences in Delhi, Christian Medical College in Vellore and Maulana Azad Medical College in Delhi have been pockets of excellence in teaching and research in the country. Until 2005, India had only 229 medical colleges of which 106 were established through the private route with Manipal Hospital in Bangalore towering above the rest for its excellence in research, especially stem cell research. 

But despite these institutions, with only 25,000 medical graduates each year, the Indian ratio of doctors to population stands small at 0.6 doctors per 1,000 people, the world average being 1.8 per 1,000. This translates into an immediate need of another 12-13 lakh doctors, a gap so vast it will take decades to fill. A glimmer of hope now flickers in plans that lie atop the tables of medical Indias corporate world and within bricks of foundation that have been laid to mark medical city projects. 

On top of EHIRC and Fortis Healthcare managing director Shivinder M Singhs office table lie plans for not one but 10 medical cities that will take shape over the next 10 years. Promising to generate over 10,000 medical graduates each year from each campus and directly generating 30,000 jobs through his medical city projects, Singh is running hard to meet Indias requirement for doctors. He too takes inspiration from the Mayo Clinic and the Cleveland Clinic and strives to create a campus that is complete in itself. 

Our medical cities will have an education campus, research facility and multiple disciplines. The intention is to have a multi-super-speciality hospital with expertise in 20 medical disciplines and 8-10 sub-specialties in each. We wont have laboratory research. We will take our research out of the lab and put it to practical application, he explains. Singhs enormous project coming up in Gurgaon will see an investment of over Rs 1,200 crore with a 600-800-bed hospital at the education campus alone besides the beds at the multi-super-speciality hospital. 

In the south, Dr Pratap Reddys Apollo Hospitals Enterprise Limited took Rs 1,000 crore out of its pocket to launch the Health City  a project that marries allopathic medicine with alternative medicine in an attempt to usher in the concept of holistic healthcare under one roof. Unlike Trehan and Singhs medical city projects that will impart undergraduate and postgraduate medical education, Reddys educational institution will restrict itself to postgraduate education for doctors under Medical Council of India guidelines. 

Dr Hari Prasad, chief executive officer, Apollo Hospitals, says, We have over 300 students in different courses and our endeavour is to bring together the heavily fragmented healthcare space. At the Health City research and development will happen in a clinical setting allowing both clinical doctors and researchers to interact and take from each other. Having begun operations last month, Reddy is already looking at investing a further Rs 150 crore over the next 18 months to increase the bed count and the doctor count at the Health City. 

Interestingly, the turn of the wheel of thought has given birth to a unique concept of research in each mind. Where research at premier institutions like Harvard Medicine, Johns Hopkins and Mayo Clinic continues to redefine medical boundaries, the idea of directly copying therapies, cures and procedures from the West does not go down well with Indians any longer. 

We dont have to copy everything that comes out of the West because their gene pool is different from ours, stresses Trehan, We must develop our own therapies, our own R&D, our own devices, so that medicine can be custom made for Indians at lower costs. 

His own concept is unheard of. At his MediCity, Trehan intends to combine modern medicine, Ayurveda, homeopathy and Chinese medicine to create what he calls New Era Medicine  a more effective, less traumatic cheaper form of treatment. With the planned research, healthcare could bring a whole new paradigm for patients too. 

The choices will only grow, and going by the intended research and development, hope could become a much-used word among doctors and for patients. Bench-to-bed research, as Prasad calls it, is the concept at Apollo Health City where stem cell research will be a major focus. The bench-to-bed format will aim to bridge the gap between research labs and patient beds, resulting in steady delivery of healthcare. 

However, the big question that hangs above these medical city projects is that of the private healthcare cost advantage to consumers. Institutions like the Mayo Clinic have been modelled to be not-for-profit healthcare providers because the patients are being treated at a teaching hospital as also because of funds available from numerous foundations and grants. 

Analjeet Singh, chairman and managing director of Max Healthcare and ex-president of CII, explains that when a patient seeks medical treatment at a teaching hospital, he pays little for it. But in a corporate set-up like Indias, where foundations dont have enough money to invest in such projects, the costs have to be borne by the investor alone. 

Yet, L N Rawat, CEO, Aditya Birla Memorial Hospital, claims his medical city is one of the cheapest in private healthcare and having filled 100 beds on a single day this month at the in-patient department, there is no dearth of consumers. 

Fortis Singh confirms that the cost of healthcare at the medical colle ge campus of his medical city will be lower but goes on to add that the campus wont make any profit, but at the same time it isnt a charity initiative . Trehan agrees but furthers that healthcare should not make huge profits. It should make modest profits. 

Despite assuring a definite decline in the cost of healthcare at his MediCity as compared to that at corporate hospitals, Trehan is certain that his model will make profits because if you offer treatment at a reasonable price, you will do large volumes and make money as a result. 

But industry watchers are still doubtful that healthcare costs will decrease. Utkarsh Palnitkar, partner, transaction advisory services, Ernst & Young, says, The medical cities might even translate into higher costs of healthcare for the consumer. Dr Rana Mehta, vice president for healthcare at management consulting firm Technopak, agrees. 

Since the investment will be by corporates alone, costs might not come down at all. Apollos Prasad admits that at the Health City, cost of healthcare remains parallel to the cost at any other Apollo hospital. 

Medical cities are marked by mammoth investment and long gestation periods. The gestation period can squeeze a lot of money out of the investor without offering much in return. Here, explains Palnitkar, the investor needs to look at a de-risking model. This could either be done through leasing or forming strategic alliances. 

Fortis thus signed an agreement with real estate developer Ansal API to set up a 52-acre medical city in Lucknow at an investment between Rs 500-800 crore. The project, owing to its proximity to the airport, hopes to attract medical tourism as well. 

Kunal Banerjee, vice president for marketing with Ansal API, explains, The medical city will be complemented by a hotel and a country club, so there is enough infrastructure to promote medical tourism. 

GE Healthcare, a medical technology and equipment developer, also collaborated with Trehans Medicity for developing diagnostic and R&D facility. But Maxs Singh warns, The question is who the stakeholders are and what their expectations are. As a profit-making proposition, it isnt a good model but if the motive is creating a talent and research pool, then it is excellent. 

At the same time, industry insiders and analysts admit that there will be no shortage of consumers. Growing urbanisation, consumerism and accountability brought in by brand equity will make sure that private medical facilities continue to do good business because consumers now want facilities that are better than the best, says Mehta. 

The trend can be related with the growth in the health insurance market. At about 30 per cent CAGR in terms of collection of premium for health insurance, the growth is faster than anticipated. 

Medical cities may be the next ideal step towards building Indias healthcare and medical expertise, but the numbers are still insufficient. Even under the current, growing corporate set-up, a Technopak report points out that almost 90 per cent of the private healthcare is being serviced by an unorganised sector. 

The need is to take Indias current ratio of 1.5 beds per 1,000 people to the world average of four beds per 1,000. Though this could be done through a trickle-down effect, Mehta believes that it would also require a bottoms-up approach, which would entail starting smaller medicity formats in tier-three cities. Trehan also admits that the way forward is by coming up with a new paradigm and newer cures, and we will have a small role to play in it. 
-------------------------------------------------------------------------------- 

UP AND COMING MEDICAL CITY PROJECTS 

*Naresh Trehans MediCity*

The Rs 1,200 crore project in Gurgaon spread over 93 acres will consist of a 1,600-bed hospital with a complete biotechnology backup and R&D facility. It will have major undergraduate and postgraduate institutions for cardiology, oncology, bone and joint, neurosciences, regenerative medicine and trauma care. 

*Fortis Medicity*

At an investment of over Rs 1,200 crore, the project in Gurgaon will have two campuses. The hospital campus will have a high-end, multi-super-speciality hospital and research centre. The college campus will boast of a medical college for undergraduate and postgraduate education, a dental college, nursing college and facility for primary and applied research in medicine along with a 600-800-bed hospital. 

Spread over 52 acres, the project in Lucknow will see an investment between Rs 500 and Rs 800 crore. It will have an 800-bed hospital, a medical college offering undergraduate, postgraduate and post doctoral courses, a dental college, nursing college, college of physical medicine and rehabilitation, college of rehabilitative medicine and a college of allied medical science. 

*Apollo Health City*

At an investment of Rs 1,000 crore, this 33-acre project in Hyderabad will not impart undergraduate education. However, it has a postgraduate college for doctors, a nursing school and college, college of physiotherapy, institute of hospital administration, institute of medical informatics, institute for emergency medicine and an institute for paramedics. The hospital has 500 beds and almost 200 more will be added over the next six months 

*MIOT medical city*

Founder of the MIOT hospitals, Prof Dr P V A Mohandas plans to set up a multi-speciality medical city. 

*Dhirubhai Ambani Health City*

Reliance Anil Dhirubhai Ambani Group has expressed interest in building a 60-acre health city in Kolkata. 

*CMC Ajit Singh lottey medicity*

A sister concern of the famous CMC, Vellore, the Christian Medical College and Hospital at Ludhiana has initiated a Rs 50 crore medicity project in Ludhiana. The project will have a general and speciality hospital and an education institute. However, lack of funds and other hurdles have currently stalled it.


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## Bushroda

*India invites Indonesian firms in hotel sector*

New Delhi, July. 23 (PTI): India today invited Indonesian companies to invest in hospitality industry in the country, which, according to a study, needs 1.5 lakh hotel rooms in star category by 2011 at an estimated investment of Rs 79,900 crore. 

The proposal was made a high level meeting between Tourism and Culture Minister Ambika Soni and a 15-member Parliamentarian delegation, led by Vice Speaker Abdul Hamam Naja, from Indonesia here today. 

In the hotel sector, 100 per cent foreign direct investment (FDI) is allowed in hotel sector in India and, Soni said, already 6.5 billion dollars have been invested to meet the hotel room demand. 

According to a FICCI study, India would need a total investment of 79,900 crore (17 billion dollars) by 2011 to meet the demand of hotel rooms and at the current level of investment only 53,333 rooms would be created. 

Soni said more than 4.43 million tourists visited India last year and over 10 million are expected by 2010. 

She said the government may allow visa on arrival facility once modernisation of Delhi and Mumbai airports is complete. 

The move to give visa on arrival will also get facilitated with airlines giving advance passenger information to security agencies, she said. 

The minister said of the areas of cooperation in the sector could be human resource development, capacity building and participation in tourism marts and fairs. 

The visiting delegation showed interest in film making in India and discussed the ways to further strengthen the cooperation in the sector between the two countries.


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## Bushroda

*India execs most optimistic on economy, inflation: McKinsey*
29 Jul, 2007, 1145 hrs IST, PTI

NEW DELHI: Indians executives are the most optimistic in the world in terms of expectations for growth in economy, their industries as well as improvement in inflation levels in their countries, a new Mckinsey study shows. 

Except North America, a majority of executives across the world expect economic conditions to improve in the next six months with Indians coming on the top with as much as 81 per cent expressing a positive outlook, shows a survey conducted by international management consulting firm McKinsey. 

The robust economic growth projections come despite a growing threat from inflation across the world, the study noted. In India, the latest government data showed inflation rising to 4.41 per cent in week ended July 14 after being unchanged for two straight weeks. 

While fuel prices were steady during the latest reported period in India, the McKinsey study found that nearly two-third of the executives worldwide saw oil and gas costs as the biggest driver of the inflation. 

Indian executives were the most optimistic about decline in inflation over the next six months, while a majority of executives from neighbouring China expected inflation to rise further from its current level. As much as 39 per cent of Indian executives expected inflation to decline, while 36 per cent saw it rising higher in the next six months. 

In comparison, 75 per cent of Chinese executives saw inflation rising, as against just seven per cent expecting a fall. In North America, 59 per cent expected a rise and 10 per cent saw a decline in inflation going ahead. In Asia-Pacific, 67 per cent expect higher inflation, while 50 per cent of European executives also expected a rise. 

Interestingly, in regions where overall economic outlook has become notably more positive in the past quarter, the prospect of higher inflation is prevalent, McKinsey said. 

For example, Chinese respondents were not positive about inflation and 75 per cent of them felt it would go up in the next couple of months, but in India and Latin America less than 45 per cent expected a higher inflation. 

"These findings are particularly surprising -- in India because rupee has been appreciating steadily against the US dollar and in Latin America because of the region's historically high rates of inflation," the study noted. 

Indian executives also emerged as more optimistic than those in China, Latin America, Europe, Asia-Pacific and North America in terms of expectations for better economic growth as well as growth in their respective industries. 

This is despite India being the only region where level of optimism for economic growth has fallen in past six months. 

A total of 83 per cent Indians expected economy growing further during a survey by McKinsey in December 2006. This dropped to 81 per cent in the latest survey in June this year. 

This was still higher than 69 per cent in China, 60 per cent in Latin America, 52 per cent in Europe, 60 per cent in Asia-Pacific, 35 per cent in North America and 64 per cent in the rest of world. 

However, executives were relatively less optimistic about their industries than that of the country's economic prospects. In India, 68 per cent expected better conditions for their industry in the next six months, followed by 59 per cent in Latin America, 55 per cent in China, 45 per cent in Asia-Pacific, 40 per cent in Europe, 34 per cent in North America and 60 per cent in rest of the world.


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## Bushroda

*India's central bank expected to leave rates unchanged*
by Penny MacRae 
FRANCE24, France

India's central bank is expected to leave interest rates on hold this week as fears that the country's fast-growing economy is overheating begin to recede, analysts say.

The bank's aggressive monetary tightening has slowed credit and industrial growth and reduced inflation, they said, suggesting that the rate-hiking cycle that started in late 2004 could be ending.

"The unchanged interest rates will likely suggest the Reserve Bank of India&#146;s comfort in the current domestic macro-economic scenario," said Manika Premsingh, an economist at brokerage Edelweiss Capital in Mumbai.

The bank may instead move to reduce cash in the banking system to cope with hefty capital inflows at its quarterly policy meeting Tuesday, analysts said.

The RBI has pushed its benchmark repo rate to a four-year peak of 7.75 percent in its drive to tame inflation, raising the repo, its key short term lending rate, five times between June 2006 and March this year.

India's inflation accelerated to 4.41 percent for the week ended July 14 from 4.27 percent the previous week, data on Friday showed.

But the figure is well below the bank's ceiling of five percent for the fiscal year to March 2008 and sharply down from a two-year high of nearly seven percent earlier this year, which prompted the central bank to warn that the economy was possibly overheating.

"I expect the RBI to adopt a 'wait and watch' message -- with a cautiously watchful attitude to inflation," said Deepak Lalwani, director at London stockbroker Astaire and Partners Ltd.

India's economy grew by 9.4 percent in the last financial year and the central bank has forecast growth of 8.5 percent this year.

Monetary tightening has led to an easing of credit growth by a third to 24 percent after it touched 33 percent in June 2006.

Year-on-year industrial production growth fell to 11.1 percent in May from 14.5 percent in March while auto sales fell by 4.4 percent in June.

Freight rail traffic has slowed to a 22-month low of 3.9 percent while export growth has decelerated to a 44-month low of six percent. Business confidence has fallen sharply, mainly due to higher borrowing costs.

"We expect no further policy rate hikes as growth indicators are already pointing towards a significant further deceleration," said Morgan Stanley economist Chetan Ahya.

Analysts also said leaving rates on hold could act as a signal to commercial banks to start reducing lending rates, with a possible first central bank rate cut coming as early as the fourth quarter.

"Assuming the current growth decelerating trend is maintained, we see a 40 percent probability of a policy rate cut in the quarter ended December 2007," Ahya said in a research note.

However, some analysts said they expected the bank to take further action to reduce liquidity amid a surplus of cash that could allow inflation to re-emerge.

Foreign money has been pouring into India's booming stock market amid record highs.

A sharp rise in the bank's foreign currency reserves suggests it has been buying dollars and selling rupees to curb the Indian currency's jump against the US unit, injecting rupee funds into the banking system in the process.

"A hike in the cash reserve ratio (CRR) is a possibility," said India's Development Credit Bank's K. Harihar, referring to the amount of cash commercial banks must hold on deposit with the central bank.

The bank last raised the CRR by 50 points to 6.50 percent in March as it sought to suck out cash and curb credit growth that can stoke inflation.

The rupee is riding at close to decade highs against the dollar.


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## joey

*India shining, govt dozing*
Business Standard

The main difference between China and us is that its government works. Ours is happy to doze. 

Have you noticed something? The government has nodded off. 

Policy debates, say, in economics, which matters more than foreign policy, have all but ceased. Except for the angry fuss around the rural employment guarantee programme two years ago, no one talks very much about anything relating to economic policy. 

True, there is the odd quibble about the pace of this or the details of that. But no one, not even those darling pussycats, the Communists, who seem to have gone into quietus, is getting really anxious and jumpy any more about anything on the economic side. 

This is the UPA Effect, because this coalition is the greatest pacifier ever, led by a man who can soothe frayed nerves as no one else can. 

The technique is simple. You don&#8217;t like something? There there, says the government, we will not do it, calm down, go and see a movie or something. When you come back you will find nothing has changed, promise. 

Thus: Let&#8217;s cut subsidies. No? OK. Let&#8217;s privatise. No? OK. Give market access to someone other than you-know-who. No? OK. Reduce the EPF rate. No? OK. Do something about participatory notes. No? OK. Power sector reform? No? OK. Don&#8217;t want us to keep saying OK to every no? OK. 

And so it goes on. If even three ordinary people (let alone ministers) don&#8217;t like something and shout their protest loudly enough, the idea is dropped. Nothing moves forward so as the world moves ahead, we get left behind. 

This approach to consensual governance has had three effects, at the very least. First, the undeserving continue to get what they want. You can apply this test yourself and make a list. 

Second, conversely, the deserving are being denied what they need. It doesn&#8217;t matter which group. If you are deserving of something, you won&#8217;t get it. Go on, make a list and see. 

And, third, as a result, the majority is getting mighty peeved with a government that does absolutely nothing at all, good or bad. Indeed, this must be the only government&#8212;if one can dignify it by that name&#8212;of this kind in the world. It just floats along smilingly. 

What is truly extraordinary about this is that there is virtually no opposition. The BJP is knee-deep in its troubles, rather as the Congress was during 1996-2001. Its allies, even the Shiv Sena, are behaving like drugged zombies, stumbling around and tripping all the time. As far as the government is concerned, it is like an India-Holland cricket match. 

But just as when our bowlers succeed, our batsmen fail and vice versa, it is the UPA&#8217;s own ministers who stymie things. And when they all agree, it is the noble comrades who stick their oars in. 

A great deal, I can hear the PMO protest, has happened on the foreign policy side. Talks with Pakistan are making progress. The nuclear deal is almost through (although heaven knows what rights India has agreed to give up). Relations with China are good. East Asia is in the pocket. Russia has always been a pal. EU is ok. Etc. 

True. You can&#8217;t deny any of this. But I have never heard of these things doing very much for anyone, the poor or the middle class or even the rich. These things don&#8217;t bring down the price of fish, or raise incomes, or put more water in the tanks and canals, or create more schools and hospitals, and so on. 

This foreign policy-centric approach has been justified by the spinners as follows. &#8220;The PM decided long ago that, given the compulsions of coalition, economic and governance reform was impossible. So he decided to focus on what he can do&#8212;foreign policy.&#8221; 

In short, this government refuses to engage seriously with the politically difficult problems. It has, quite simply, abdicated. It half-heartedly pokes and prods at a problem once in a while, but the moment someone growls, it backs off. What a way to govern! 

As for the success in foreign policy, there is a structural explanation for it. In India, external relations are the sole preserve of the central government. No one else has a say in it. Had that not been so, I am certain we may not have got anything there either. 

Contrast this with China. They have all the things we don&#8217;t&#8212;price stability, increasing output, good schools and hospitals, proper governance and so on. And they also have good relations with everyone that we claim to have good relations with. 

The main difference between them and us is that they have a government that works. We have a government that dozes. 

And the irony is that in China the government, not having to face elections and thus not having the need to claim credit, can afford to doze while ours has perforce to be active so that it can claim credit in order to get re-elected. 

Instead, it is the other way around. In China the government is hyper-active while the only credit our government thinks that is worth claiming is looking like a nodding donkey.


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## Bushroda

*JSW Steel to Buy $1.2 Billion Mill in First U.S. Acquisition* 
By Debarati Roy and Haslinda Amin

July 30 (Bloomberg) -- JSW Steel Ltd., India's fourth- biggest steelmaker, plans to buy a U.S. plant for as much as $1.2 billion, its first purchase in the world's largest economy. 

``We're close to buying a steel-plate mill in the U.S.,'' Sajjan Jindal, managing director of the Mumbai-based company said in an interview on July 26. He declined to comment on whether the target is a plant owned by Jindal SAW Ltd., a pipe maker run by his elder brother. 

The purchase would allow JSW Steel to ship raw-steel slabs to the U.S. to make products used by shipbuilders and energy companies, Jindal said. Larger rivals Tata Steel Ltd. and Essar Steel Ltd. have made overseas acquisitions to sell more profitable products and win customers outside Asia. 

``Indian steelmakers are spreading their wings far and wide to hedge against regional cyclicality in prices and demand,'' A.S. Firoz, an analyst and former chief economist with India's steel ministry, said by telephone from New Delhi. 

Jindal Saw plans to sell its steel-plate mill, Mumbai-based Daily News & Analysis newspaper said last November. The company spokeswoman Abha Negi said she wasn't aware of a plan to sell the plant to JSW Steel. 

JSW Steel is more than doubling its slab-making capacity to 10 million metric tons by 2010. The company is also building a 3 million ton hot-strip mill to covert slabs into products used by makers of cars and appliances. Some of the raw-steel slabs will be shipped to the U.S. mill, Jindal said 

``The cost at the U.S. plant can be significantly lowered if we ship the steel from India and add value there,'' he said. 

Tata Steel bought U.K. Corus Group Plc in January for $12.9 billion in the biggest takeover by an Indian company. Essar in April agreed to buy Canadian rival Algoma Steel Inc. for $1.63 billion. Hindalco Industries Ltd., India's largest aluminum maker, in February bought Novelis Inc. for $3.4 billion.


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## Bushroda

*The Great Indian CEO Hunt* 
July 30, 07
Noor Fathima Warsia 

The Indian media industry has not seen a churn like this in years, and where talent is becoming a matter of concern in the senior management and middle management levels of various media entities, the top management has not escaped the pressure either. At least five media organisations are currently headless or without a CEO or CEO equivalent. 

These include STAR News, who lost its CEO Uday Shankar to STAR India. Even in STAR India, Shankar has gone as a COO, while Paul Aiello, CEO, STAR TV, is currently the acting CEO of STAR India. With Rajat Jain finally announcing his move to Mobile2win, Walt Disney Television Internationals hunt for a CEO is even more accentuated. 

Shantonu Adityas move to UTV Communications as CEO has left Sahara One Media and Entertainment without a CEO, Radio One lost its CEO Rajesh Tahil recently and no replacement has been identified yet. Also on the list is aMap, who lost its CEO Tapan Pal to INX Media, where he has joined as Chief Research Officer. 

Viacom-18, the newly formed entity between Viacom and TV-18, is aggressively looking for a CEO; Reliances plans for CEO for its entertainment entities has been known for a while, and the media even had rumours of Sameer Nair and Peter Mukerjea heading in that direction, when Nair and Mukerjea were still with STAR India. There have been speculations about Miditech looking for a CEO for a new channel it has been contemplating. 

Then there are examples like Fever 104 FM, where Keerthi Vasan, Business Head, HT Music, is the head of the station, however, the station as yet does not have a COO or CEO. To think that so many more ventures are in the pipeline makes the CEO hunt a lot tougher. 

Some CEOs are already surrounded by market speculations  one of the recent names was none other than Zee Entertainment Enterprises Ltds CEO Pradeep Guha. The rumour was quashed even before it made it to some section of the media, but the fact that the rumour was there reiterates the pressure on the professionals at this level, and even worse on the people who are looking for talent at this level. 

*Challenges of the CEO Hunt*

Players from the field like Rekha Koshy, Director, Accord, an executive search firm where Koshy leads the Media, Entertainment and Communication vertical nationally, believes that not just the CEO, but the second rung, the CxO rung is also a difficult level to look for. 

Giving the broader picture, she said, The Indian economy as a whole, and the media and entertainment industry in particular, is seeing unprecedented growth leading to a huge demand-supply mismatch for Leadership talent. The industry and most players had not anticipated this level of growth or mismatch, and hence, have been caught unawares and are clearly struggling to handle this situation. 

Agreeing with her, Korn Ferrys Partner Ashutosh Khanna asked, Where is the talent? Just a year ago, if a CEO moved on, you just knew the names that were there for the post, where are the names now with the number of positions that are vacant? 

While lack of talent is the first challenge, the second challenge identified is that media as a sector is at a nascent stage in India with limited in-house talent, particularly in emerging areas like radio, filmed entertainment, animation, film exhibition and distribution, etc. Koshy said, Many Indian managers have not successfully scaled up to global expectations due to multiple reasons such as operating in monopolies; lack of competition; a lack of exposure to matrix organisations; and lack of training to move from functional specialist roles to general management roles. 

The challenge interestingly has been the unrealistic expectations from the India market. The HR head of a leading broadcast network explained that one problem that had led to so many vacant spots was the expectations from the international giants following their investments in India. The HR head said, India is on the globe and everyone wants to invest, but there are unreal targets, and failing to achieve those has put pressure on the heads of various organisations. 

The final change is the lack of leaders in the making. Koshy elaborated, The media business in the country for a long time perhaps was best described as more entrepreneur/iconic CEO personality driven business rather than a business that built effective second line of managers. Thus, in a period of rapid growth it has resulted in a cross migration of talent which has been exposed to fluid, dynamic, competitive conditions in global matrix-ed organisations across developed industries such as consumer, FMCG, and financial services moving into this exciting growth area. 

*The trail ahead on the CEO Hunt*

Khanna is of the opinion that an organisation without the CEO is an organisation without a vision. Such a scene can last a few months, but beyond that it is a problem in the longer interest of the organisation. I think many in the industry have realised this, and not only are they working towards solving this hunt, but also on finding long term solutions. 

There is a small but good talent pool, and tried and tested leaders will be wooed to lead other media business with perhaps more attractive options resulting in increased salaries. Additionally, we see a trend over the next 18 months of talent getting picked from related industries, markets and geographical locations. Also, we believe that both clients and employees now clearly understand the difference between various life cycles within a company and hence, focusing on the best fit  a newer trend that will result in the emergence of the start-up CEO, the grow the business CEO/team and so on would also be seen, added Koshy. 

The observers also explained that as India established itself on the global entertainment and media map, one would see global talent movements to make up for the obvious shortages. Also, there are expectations to see an emergence of local talent from the middle management rungs that would be forced to take on larger responsibility earlier on in their careers. 

As the business grows larger and ownership becomes diversified, the need to get in a professional CEO leads to a search of appropriate professionals and with the lack of talent within, it would take time, effort and a lot of handholding and learning for the promoters, investors and the possible candidates, in making that transition. The challenge would be to manage this process most effectively, which we believe we are uniquely positioned to help our client do.


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## Bushroda

*Will boom in hospitality industry last?*
Sunday, 07.29.2007, 09:44pm (GMT-7)

NEW DELHI: Delhi's established players of the Indian hospitality industry last week discussed the current boom being witnessed by the industry and debated how long will this boom really last. The industry gurus were brought together at the Hotelex Conclave II, which was organized by CMP trade exhibition organizers on July 20 at India Habitat Centre. Distinguished speakers at the Conclave were Vipin Luthra- MD Ansal Group, Atul Mehrotra- Director Uppal Orchid Group, Kamal Sharma- Secretary General FHRAI. 

The moderator was Anuraag Bhatnagar- GM Le- Meridian, Jaipur.While providing a great opportunity for this generation, there are some challenges that need to be worked to retain the burgeoning sector and this was the highlight of the second edition of Hotelex Conclave."India in its growth and evolution, is witnessing a great change in this sector. 

The Indian hospitality market is booming and has become a target for big global names within the industry" stated M. Gandhi Managing Director UBM India Pvt Ltd. He added, "We are overwhelmed with the support and the tremendous response we got out of both the conclaves in Mumbai and Delhi. We look forward to similar response in Bangalore too in August." Commenting on the session, Kamal Sharma, Secretary General FHRAI said, "With the economy growing at a fast pace, the approach and thinking of the people has to grow to keep pace and continue to contribute to the booming industry". 

Vipin Luthra, MD Ansal Group said, "There is no doubt boom is there and it will grow. Demand will continue to grow, lots of projects are in pipeline but the boom growth depends on the supplier side, there is uncertainty from supplier side" Hotelex Conclave is a prelude to Hotelex India 2007 - India's leading hospitality industry exhibition. 

After successfully completing 16 years of Hotelex Shanghai the largest trade fair for China's travel, hotel & catering Industry; CMP announced Hotelex India 2007 a truly international hospitality exhibition due to take place from December 6 - 8 at MMRDA Ground, Bandra Kurla Complex, Mumbai.


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## Bushroda

*Activist investors do a world of good to corp governance*
30 Jul, 2007, 0817 hrs IST, TNN

Do private equity and hedge funds increase corporate governance in the companies they invest in? This issue, raised by an OECD report released last week, has become highly relevant for Indian markets, with PE and hedge funds now constituting a major source of capital. 

The report finds that activist hedge funds and PE firms can make significant impact on corporate governance practices by making informed use of their shareholder rights. This may include demands for changes in management, the composition of the board, dividend policies, company strategy, company capital structure and acquisition plans. 

PE and hedge funds (a certain variety of them) behave differently from other institutional investors in that they are more activist. In fact, their stated purpose is to increase the market value of their pooled capital through active engagement with individual public companies. 

So, while MFs, or traditional FII funds, are larger players in Indian (or global) markets at this point, their impact on invested companies is perhaps less, since both are not activist by design. 

While both MFs and FIIs tend to favour companies with good corporate governance, they do not normally take an activist stance towards corporate governance. They tend to use the street phrase vote with their feet - they sell out if they dont like a company. MFs and FIIs normally take stakes of 5% or less, have many such stakes, and have neither time nor intent of directly influencing management. PE funds, on the other hand, take stakes of 10% or more and most often seek a board seat. 

They then actively do things like select management and board members, review performance, and approve business plans. These funds thus behave like promoters. All this happens not only in unlisted companies, but even in PE engagements of listed mid-size companies. 

The OECD report concludes that in the presence of perfect capital markets there would be little scope for a special category of active investors, like PE firms and activist hedge funds. However, when markets are not perfect but characterised by information asymmetries, managements might pursue their own goals and interests rather than those in the best interest of the company and its shareholders. 

The report says most of worlds investment capital is with funds which are passive investors. In such a situation, activist hedge funds that are not constrained in their shareholding levels and that which have strong incentives to exercise their shareholder rights could improve the overall efficiency of capital markets and underpin good corporate governance. 

Evidence of the impact of role of PE investors can be seen in many listed companies. As has been pointed repeatedly in ET and Investors Guide, companies where PE funds have invested have shown a tendency to outperform market indices. 

All PE invested clearly dont outperform either. One such company, which could provide a good test of skills of an activist outside investor, could be Sical Logistics, where IDFC PE invested Rs 110 crore in Mar 2007 for a 14.8% stake. 

Sical is a diversified logistics company with operations like handling of bulk cargo, offshore and inland logistics. All these areas have tremendous growth potential. All segments of logistics business have been growing strongly over the last three years, with manufacturing and trade booming in India. Other logistics companies outperformed Sical by wide margins. Many of these companies have smaller revenues and operations, yet now have market cap 2-3 times higher than Sical. In other words, Sical was either not exactly capitalising on the opportunities the roaring Indian economy was presenting. While Sical did raise $75 million in Apr 2006 through an FCCB issue (and so FII types entered the stock in a bigger way), its shares continued to languish. 

IDFC PEs entry coincided with a series of changes. Sical announced a target to reach revenues of $1 billion by 2012, or about four times its FY07 number, implying a 5-year growth rate of 32%. 

Simultaneously, there have been management changes. IDFC got its representative Luis Miranda on Sicals board. In April, the promoter family of Sical, MAC group, distanced itself from the firm. All senior family members barring vice chairman of MAC Group - Ashwin Muthiah resigned from the board. The Sical board now has two promoter nominees and three independent directors. There are changes in operating management as well. 

The shares reacted favourably to IDFCs entry. It broke out of its range of last two years or so, reaching a high of nearly Rs 300. It is important to note that the Sical management may have on its own planned many of these new changes, and IDFC may have had little role. A couple of negative developments have caused the stock to retrace. The FY07 results werent good, net profit was lower than FY06. Then earlier this month, an offshore supply vessel Sical operated for ONGC sunk. 

So the share price now is back at Rs 240 levels, where roughly IDFC PE had entered. So can an activist PE help a laggard outperform? We will perhaps see in the next few months.


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## Bushroda

*Innovation to deliver affordability*
30 Jul, 2007, 0258 hrs IST,Kiran Mazumdar Shaw, 

The Indian pharmaceutical industry has enjoyed the comfort of duplicating patented drugs for nearly four decades under the shelter of a Patents Act that only recognised process- based innovation. 

Today, this sector is challenged by a new patent regime that calls for new business strategies devoid of local protection to face global competition. 

The World Trade Organisation sounded the alarm bell in 1995, the year when India agreed to pass legislation over a 10-year transition period to align its Patents Act with TRIPS (Trade-Related aspects of Intellectual Property rights). For the Indian pharmaceutical industry 2005 was the pivotal year. The time had arrived for a new innovation-led business model with all its daunting risks and its enormous potential. 

The corporate rhetoric has been impressive: India is a knowledge-led economy that has a large and diverse scientific and clinical skill base which provides a strong global competitive edge to Indian pharma. Yet two years on, the pharmaceutical sector in India is unable to demonstrate its acceptance of a product patent system that calls for a shift from a generics mindset to an innovator psyche. 

It is India Incs diffidence that has extended the legal debate on providing market exclusivity to Novartis for Gleevec, an issue which is being argued on the grounds that ever greening of patents should be denied. On the contrary, Indian companies should be innovating the next generation Gleevec and commercialise it through indigenous development that will deliver affordability. 

However, the apprehension of taking on and managing risk prevents India Inc to move from generics to new molecules. The combination of risk and unpredictability even hinders the investor community and stock markets to invest and value innovation. If India Inc is to attain global leadership in pharmaceuticals, we must recognise and enable the important paradigm shift between manufacturing generics and inventing and commercialising novel drugs. 

Today, the Indian pharma sector is ranked fourth in terms of volume and thirteenth in terms of value globally. It is imperative that we leverage our intellectual capital to climb up the value chain and it is important that we do it our way as opposed to replicating the model used by the west which completely forgets the affordability factor. 

Affordability is now recognised as a critical factor by national health systems and private insurance companies across the globe in their efforts to build sustainable models for healthcare against a challenging backdrop of ageing populations and scientific progress. 

It is also well accepted that developing new therapeutics for Malaria, TB, AIDS and other neglected diseases will have to be done in the developing world if they are to reach the patients that need them. Affordable innovation that delivers affordable drugs to the market is the only way forward. India needs to leverage its affordable cost base to deliver high value innovation to global markets by building excellence across the innovation chain from discovery to product and clinical development. 

The Indian market provides many potential value-adds to our native pharma industry. To begin with, India accounts for nearly a fifth of the world population, an appealing potential market size, but with abysmal penetration levels of less than 30%, implying that over 70% of the population have no access to basic healthcare. Looked at differently, this represents an enormous untapped market that can realise large revenues which could be channelled into R&D. 

In order to undergo transformational change with respect to R&D, Indian pharma companies have to increase current research expenditure from 1-2% to 7-10% of their sales revenue. A greater concern is that our publicly-funded research labs have failed to deliver high value innovation, which has imposed an additional cost on Indian industry to outsource intellectual property from overseas through in-licensing, outright acquisition, co-development and through other alliances. 

At a time when the global drug industry is struggling to deliver new drugs to the market, the regulatory environment is becoming increasingly hostile and insurers and governments are challenged with rising healthcare costs, Indian drug companies have a unique opportunity to cost competitively develop affordable drugs for world markets. 

Our talent pool combined with our flourishing capital markets that can fund innovation enable us to address the cost and productivity challenges being faced by the developed world. This is our challenge and our opportunity to create the start of a Golden era for the pharma sector in India. Lets not fail our country and its citizens who all deserve access to affordable medicine! 

It is only by building intellectual property that the Indian drug industry can differentiate and attain sustainable growth. Learning to compete with globally-benchmarked patent norms is integral to this effort. India Inc must learn to play the patenting game and beat global competitors without bending the rules. It is only through a concerted strategy of building high value intellectual property through the leveraging of Indias cost and skill base that we can gain market leadership. 

We have to pursue a growth path that breaks away from low margin, commoditising generics to stable and high margin new molecules. This is only possible if there is a concerted effort of all the Indian constituencies, the government, the regulators, the investors, the industry, the research centres, patent attorneys and academic researchers to make it happen.


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## Bushroda

*From the ringside, its clear: Stay the course on reforms*
Express News Service
Monday, July 30, 2007

NEW DELHI, JULY 29: Economic reforms over the past decade and a half have shown an India that was previously unknown to the rest of the world. In the last two years, Indias growth story has just got that much better with the economy clocking 9 per cent GDP growth in consecutive years. 

For N K Singh, who has been in the centre of decision-making right through the years of liberalisation  ranging from the Finance Ministry, Planning Commission and even the Prime Ministers Office, what he calls is being in the ring  there is still a large unfinished agenda for this reform-led growth story for it to be more widespread and sustainable. 

In his book The Politics of Change: A Ringside View, a collection of articles written by him in The Indian Express and The Financial Express, Singh highlights the task ahead for the country in a rapidly changing economic and social landscape. 

Over the years, much has changed but much more needs to change and it is these changes that are not easy, says Singh, but the important thing to be realized is that the country must stay the course and allow the politics of change to be binding, and not a divisive, influence in realizing our untapped growth potential. 

Unlike the early and mid-90s, its no longer marketing the India story. Everybody has bought that says Singh. Now is the time to come out with innovative models and ideas and find localised solutions to problems faced in various part of the country that are yet receive the benefits from the trickle-down effect. 

While his book touches upon issues as wide-ranging from multilateral relations to energy and infrastructure development and very often pointing out what is lacking in the approach, N K Singh told The Indian Express that at our present stage of development, it is still surprising to find a maze of bureaucracy in the education sector  a key sector where reforms are critical to ensure furthering of the benefits of reforms  that puts the license-permit raj era to shame. 

In sectors such as these, mere lip service will not do  much more needs to be done and that its too early to declare victory Singh said. 

In an era of coalition politics, Singh, in his book says, the consensus mantra should not be a device for leadership to postpone decisions. Rather resolving contentious issues cannot be postponed if the lofty aim of 10 per cent growth is to be realised. 

Given Singhs tenure during the reform era, what is very interesting are some of the anecdotal recounts of why things happen. Or do not happen. 

For instance, it was a nostalgic memory of the Indira Gandhi era when banks were nationalised that prevented a legislation diluting government equity in nationalised banks to see the light of the day. 

It is these interesting facets of decision making in a reform era which has also drawn people like Lawrence Summers (former US Treasury Secretary) to say that Singh has a great story to tell. In fact, T N Srinivasan of Yale University calls Singhs essays a penetrating analysis highlighting the complex interplay of economics and politics involved in reforming the Indian economy. 

*Essential reading on economic reforms *

Turning another page in its Books Series venture, The Indian Express Group will formally launch The Politics of Change: A Ringside View by N K Singh on Monday. It will be released in New Delhi by Finance Minister P Chidambaram. 

Published by Penguin Books, the books release will be followed by a panel discussion which will have Arun Shourie, K V Kamath, Mukesh Ambani, Prannoy Roy and Shekhar Gupta. 

Says Shekhar Gupta, Editor-in-Chief, The Indian Express: This selection of NKs very fine, very popular and very informative columns from The Indian Express and The Financial Express on subjects ranging from the initiation of reforms in infrastructure, the insurance sector, Centre-state relations, coalition politics, global perspectives on India to the challenges the country continues to face on the reform path, will be essential reading for any student of the history of Indian economic reforms. 

N K Singh has held several key positions in the Commerce and Industry Ministries, at State and Central levels. Presently, he is Deputy Chairman of the Bihar State Planning Commission, guiding his state through a frenetic era of growth and development.


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## Bushroda

*McKinsey study reveals upbeat mood* 

New Delhi, July 29 (PTI): A recent McKinsey study showed that Indian executives were the most optimistic in the world in terms of expectations for growth in economy, their industries and improvement in inflation levels.

Most executives in the world, except those in North America, expect economic conditions to improve in the next six months. Indians come on the top with 81 per cent expressing a positive outlook.

There are robust economic growth projections despite a growing threat from inflation all over the world, the study said. 

In India, the latest government data showed the rate of inflation rising to 4.41 per cent in the week ended July 14 after remaining unchanged for two weeks.

While fuel prices in the country were steady in the latest reported period, the McKinsey study found that nearly two-third of executives all over the world saw oil and gas costs as the biggest driver of inflation.

Indian executives were the most optimistic about decline in inflation over the next six months. Most Chinese executives expected the rate of inflation to rise from its current level. Thirty-nine per cent of the Indian executives expected inflation to decline, while 36 per cent saw it rising in the next six months.

In comparison, 75 per cent of the Chinese executives saw inflation rising against only 7 per cent expecting a fall. In North America, 59 per cent of the respondents anticipated a rise and 10 per cent saw a decline in the future. In Asia-Pacific, 67 per cent anticipate higher inflation and 50 per cent of the European executives see a rise. 

The prospect of higher inflation is prevalent in regions where the overall economic outlook has become more positive in the last quarter, McKinsey said.

Chinese respondents, for instance, were not optimistic about inflation with 75 per cent feeling it would go up in the next couple of months. In India and the Latin American countries, less than 45 per cent expected a higher inflation.

These findings are particularly surprising  in India because the rupee has been appreciating steadily against the dollar and in Latin America because of the regions historically high rates of inflation, the study said.


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## Bushroda

*Mumbai's local trains get facelift* 
Ketki Angre
Sunday, July 29, 2007 (Mumbai)

Mumbai's lifeline, the local trains are set to get a facelift. The Maharashtra Chief Minister Vilasrao Deshmukh flagged off the new and improved version that will hopefully make life of Mumbaikars' better.

The new train with a sleek new look, better ventilation and even a public address system will roll out on the tracks by October this year.

Though currently the trains are being tested, the railways assure that in the next two years 157 such rakes will roll in to replace the city's ageing fleet.

Deshmukh may not really occupy the driver's seat nor would he have gone through the troubles of traveling in a over crowded Virar fast but he certainly enjoyed the experience.

''Certainly, it looks so nice and comfortable. I am sure this will go faster than the cars we travel in,'' said Vilasrao Deshmukh, Chief Minister, Maharashtra.

However, don't jump the gun yet. It will take at least three more months before the new trains can make Mumbaikars' journey more comfortable.


http://imageshack.us

http://imageshack.us

http://imageshack.us


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## Bushroda

*Rs 50,000-cr plan to make Mumbai world-class city*
29 Jul 2007, 1611 hrs IST,PTI

MUMBAI: A massive Rs 50,000-crore makeover plan is underway in this financial hub to create world-class infrastructure and set up an integrated urban transport system that will combine the suburban rail network with a metro rail system, hovercrafts and sea links. 

For the integrated urban transport system, a unified authority called the Urban Transport Managament Authority will be set up to bring about an integrated fare structure and linkages among different modes of transport. 

The integration will attempt to create a coordinated routine and scheduling for the rail, rapid transit system, bus services and water transport. It will also work on unification of fare structure, rationalisation of redundant services and a coordinated public information system. 

With this integrated approach, Maharashtra Special Projects Secretary Sanjay G Ubale said, a commuter can buy a single ticket at the starting point and use different modes of transport like suburban rail, metro, waterways and road transport to reach a final destination. 

As part of the project, Mumbai will have nine metro corridors that will be mostly elevated and connect various suburban points. The project will also upgrade the three railway suburb network and create a Worli-Nariman Point sea link, an East Island Freeway and a waterway between Borivli and Nariman Point. 

The plan, to be completed by 2015, will also provide for inter-modal terminals at various points for transfers between different modes of transports. 

The unified metropolitan transport authority will also create a sub-system for road, rail, waterways and air transportation, including a network of railways, parking lots and private and public modes of transport. 

Elaborating on the plan, Ubale said the western and central suburban railway lines will be upgraded to have six lanes so that four lanes could exclusively be used for suburban traffic and two lines for outbound passenger and freight traffic. 

Besides introducing 157 new suburban rail rakes in the next two years, plans are underway to introduce AC suburban rails as in the metro. 

The first phase of the metro project will connect the 11-km stretch of Versova-Andheri-Ghatkopar, the 38-km stretch of Colaba-Mahim-Charkop and the 14-km Bandra-Kurla-Mankhurd stretch. 

The Anil Dhirubhai Ambani Group has bagged the Versova-Andheri-Ghatkopar corridor and the company can bid for the remaining corridors too, Ubale said. 

The World Bank, Indian Railways and the Maharashtra government are funding the first phase worth Rs 2,356-crore. The second phase includes extending the Harbour line up to Goregaon, adding extra tracks in the Kurla-CST, Borivli-Mumbai Central and Thane-Kalyan stretches. 

Work is in progress on the six-km sea link between Worli and Bandra, which is expected to cost Rs 1,100 crore. The bridge is expected to be operational by April 2008. Under the Rs 364-crore East Island Freeway project, the government plans to build an elevated bridge between Museum and Anik Panjarpur Road.


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## Bushroda

*Tremendous scope to increase Indian FDI - official*
Mon Jul 30, 2007 10:58AM IST

MUMBAI (Reuters) - India attracted more than $6 billion of foreign direct investment (FDI) in the June quarter and the scope to increase the inflows is enormous, a senior government official said in the Mint newspaper on Monday.

"The scope of increasing (FDI) is tremendous once foreign money starts coming into infrastructure, which even today, is not attracting funds to its potential," Ajay Dua, secretary of the department of industrial policy and promotion, told the paper.

Dua, who retires this week, said the key issues for foreign investors were assured revenue streams and risk mitigation.

Foreign direct investment more than doubled to 19.5 billion in 2006/07 (April/March), and the target for 2007/08 is $30 billion.

Last month, a government-appointed panel said India needed to invest $475 billion in its infrastructure over the next five years if the economy was to sustain a 9 percent growth rate in the medium term.

Dua said at least $10 billion to $15 billion of funds could come from Japan once Indian companies were able to issue Japanese depository receipts (JDR).

Dua said while Japanese law did not permit Indian companies to issue JDRs at present, he said India had been told the amendments should be in place by early September.


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## Bushroda

*RISE AND SHINE - Urban, industrial and commercial India since 1991* 
COMMENTARAO 
S.L. RAO 

A Kumbhakarna waking in India after sleeping since 1991, would have rubbed his eyes in disbelief. In the shops are apples from Fiji and China, Swiss chocolates, almost all the latest models of cars, cell phones, television, hi-fi equipment, and many consumer products including designer clothes, bags and other such luxuries. Most urban middle-class young men and women go to work, earning good salaries. So do the young from lower socio-economic strata with little education, in malls, multiplexes, fast food restaurants, supermarkets and hotels.

Housing loans at 10 per cent interest, the Sensex at 15,000 and rising, over $200 billion of foreign exchange reserves, the rupee rising every day in relation to the dollar and even other currencies, Indians welcomed as immigrants in most developed countries, India labelled as the new superpower of this century and sharply declining poverty levels make India a different country from what it was in 1991.

The rich and the middle classes are very much better off. But the over-fifty-fives of 1991 are now dependent on the generosity of their prosperous children because their savings are too small for the new higher prices of almost everything. The unorganized sector has more employment than before, but incomes remain low while agriculture has become an uncertain occupation for the many small land-owners.

Many industrialists in 1991 did not recognize that India had joined the world and would never again be an insular economy. Our opening the economy coincided with the revolution in telecommunications, information technology, travel and the growing shortage in the developed countries of people and of skills at affordable costs. Those Indian businesses that did not seize the new opportunities died or disappeared. There were many who did change and developed significant businesses. Some of them became the new barons of the Indian and the world economies.

Most knights of the level playing field led by Rahul Bajaj later joined the race to take advantage of the new situation. Bajaj, for example, handed over to his sons, who spent some of the large cash reserves on brand building, research and development, new production facilities and new professional managers. Fortunate ones like the Parle soft-drink clan, Balsara, MTR and many others found buyers and sold out. The swadeshi-ites led by the physicist-politician, Murli Manohar Joshi, had demanded preference to the indigenous over the foreign and coined the memorable phrase, Yes to computer chips but no to potato chips, shorthand for foreign investment only in high-technology areas. He and his supporters were silenced by Indias leadership in the IT revolution, the businesses it spawned and the new global reach of Indian business and human talent. Joshis disciples remain in government and outside and oppose foreign investment in, say, telecom and retailing. The sleazy underbelly of government, by innovating shady schemes that are mostly real estate scams like the special economic zones, give the Joshi disciples more ammunition.

The state-owned enterprises are the missing guests at this prosperous table. Their control by government bureaucrats, appointment of CEOs who are government officers, interference in investment decisions and limits on pricing freedom are some ways in which their prosperity has been hindered. An example of control was in the recent ONGC saga, first with the attempt to put the regulator of exploration, the director-general, Hydrocarbons, on the board, and then the humiliating treatment of the succeeding chairman selected by a neutral panel, initially giving him acting charge and then confirming him after a year. The appointment of IAS officers to run the newly merged national carriers is a guarantee (from past experience) that this sensible move and its long-awaited investment in new planes will fail. The bold investment plans of BSNL have been stymied by a new minister who overruled his knowledgeable predecessor for unknown reasons. The oil-marketing companies have lost large sums because government does not want to allow higher prices for petroleum products so as to counter inflation, nor to add to its deficits by directly meeting the shortfall.

However, the nationalized banks have so improved that they now pose real competition to foreign and private banks. So have the insurance companies. BSNL has retained its No. 1 position despite intense competition. BHEL has shown good profits, but government ownership has induced a timidity that is now leading to shortages of power plants. Single-product companies like NTPC or Power Grid cannot, because of government ownership, get into related diversification.

There have been many surprising revivals. In the late Eighties, the UB group was a conglomerate with control over its original and successful liquor business, Best & Crompton, a dying engineering company, an unprofitable Hindustan Polymer, a polyester-maker, poorly run Mangalore Refinery, Berger Paints, and a pharmaceutical company. Today it is highly focused; the second largest liquor company in the world with foreign brands owned by it, and No. 2 in the airline business in India. The rest were divested. So has Parry developed a narrow focus and become very successful in fertilizers and houseware. Sanmar, a Madras group, has similarly focused its business much more on its core chemicals and plastics. TATA has become a global company, as have the Aditya Birla group, Bharat Forge and many others. Even a small company like RAIN Calcining is now the largest in the world in calcined petroleum coke through organic growth and overseas acquisition. Indian companies have displaced multinationals in India in the pharmaceutical industry. 

Stories in foreign business magazines and books about strategies, buyouts, compensation and so on are no longer merely interesting reading. They are also about our companies as they grow, globalize and become more competitive. Where the maximum salary allowed by the registrar of companies for a CEO was Rs 90,000 a year, now the same company pays in crores apart from stock options and commissions, not only to the MD but also to the other top executives. But not in public sector enterprises.

Before 1991, the circumstances and challenges were different. The economy was protected and licensing ruled all management decisions. Foreign partners, imported technology and legal consumer-goods imports were all ruled by government. Smuggled products were therefore common. A departing embassy official in Delhi could sell all his belongings, even used garments, for good prices, such was the craze for foreign goods. This craze is not there now because everything is made or imported into India. Management was about small markets, small production capacities, premium prices, poor quality and relative neglect of the consumer. Most successful enterprises of past years had bought into the political system like the Goenkas, Apollo under Raunaq Singh, the Modis, Birlas and others.

Dhirubhai Ambani also ably played the system. But he was a great visionary, a tremendous manager who was good at spotting and rewarding talented people and a genius at innovative ways of raising finance. His visions in deciding to integrate vertically, from oil well to wall socket, planning for long-distance phone calls in India to cost as much as a postcard, for fantastic volumes in a variety of products and then creating markets for them, would have assured his success in any environment.

Hindustan Lever used government policies to keep its business growing under majority foreign shareholding. After 1991, though first off the mark in acquiring new businesses, it could not integrate them successfully. The world is different today for urban, industrial and commercial India. We need the government to be more fixated on improving it for all.


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## Bushroda

*Growth rate set to blaze soon*
30 Jul, 2007, 0355 hrs IST,MK Venu & Shaji Vikraman, TNN

NEW DELHI: *Double-digit growth is no longer the preserve of China or some small oil economies. Indias growth rate for 2006-07 is likely to be revised upwards from the current estimate of 9.4% to almost 10%. This is because growth has been more robust than estimated in both agriculture and manufacturing, according to highly-placed government sources. *

What would this mean for this years GDP growth? Since the base for comparison has become larger, one could argue that this years growth would be lower. But that is an arithmetic view of growth. The economic factors that drove growth to the touching distance of 10% last fiscal could sustain the momentum this year, too, to keep the growth rate above 9%, according to senior economists in the government. 

Thats not all. The economys managers can take heart. If containing inflation at a yearly average of 5.4% was a creditable achievement when growth was estimated at 9.4%, the same task seems even more creditable when it turns out that growth was 10%. Looking forward, the central bank could consider relaxing its tight grip on monetary expansion a bit, considering that real expansion could be larger than what it has been bargaining for. 

The 2006-07 growth rate in the agricultural sector is turning out to be higher than 2.7%, as estimated by the Central Statistical Organisation earlier. The revised growth rate in the sector could be 4% or more. 

Similarly, the manufacturing growth rate will be higher than the estimated 12.3%. The combined effect of these two factors could take GDP growth up in the range of 9.8-9.9%, sources said. The higher agriculture output will result mainly from an upward revision in the kharif output by about 4 million tonnes during the fiscal. The rabi output, too, has been estimated to be higher than anticipated. 

The GDP had expanded by 9% in 2005-06 and 7.5% in 2004-05. Per capita income has grown by 8.4% during the period under review as against 7.4% growth in the previous year, as per the CSO data. 

While releasing the growth figures for 2006-07, the finance minister had remarked, The time has come to shed lingering doubts about the sustainability of high growth and scepticism about the shift to a higher growth trajectory. 

If indeed the growth rate is revised to about 9.8-9.9%, the base effect could be somewhat daunting for fiscal 2007-08. The question is if a near-10% growth can be sustained on the back of a similar rate of growth the previous year. Economists say growth in 2007-08 will reflect recent attempts by the RBI and government to tighten money supply by hiking interest rates. 

A deliberate policy to somewhat cool down the economy may marginally decelerate the growth rate, even though we are in the middle of a new investment cycle. The chairman of prime ministers economic advisory council C Rangarajan is fairly confident India is now experiencing an investment-driven rather than consumption-driven growth. This is the one critical factor that might deliver a consistent GDP growth of 9%-plus for another few years, officials believe.


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## Bushroda

*Ensuring the multiplier effect in growth*
30 Jul, 2007, 0311 hrs IST,Jaideep Mishra, TNN

"There is occasions and causes, why and wherefore in all things" memorably and incisively composed the Bard. 

Consider, for instance, fast-paced currency appreciation. Foreign institutional investors seem very bullish on India. Never mind the lull in the monsoons, its simply pouring dollars here. 

As a consequence, the value of the rupee has risen at breakneck speed vis-à-vis the dollar, over 14% since last July. Its the fastest in decades, and surely calls for an appropriate monetary policy stance. The sudden hardening of the rupee ought not to wreak havoc on export performance, and overtly affect the real economy. 

But in tandem, what is needed is a proactive technology policy design to shore up efficiency, productiveness and innovation right across the board in the domestic economy. For, as India sustains the economic growth momentum, the rupee is bound to be on a strong wicket. 

In the short term though, it does make sense for the Reserve Bank of India to intervene in the foreign exchange market buying dollars, so as to prevent unwarranted appreciation of the rupee. 

Given the umpteen distortions and rigidities in the markets for goods and services, not allowing for one more anomaly  namely policy induced undervaluation of the rupee  would almost certainly stem exports and decelerate the growth momentum. 

Note that our merchandise exports now constitute 20% of GDP, with the SME segment accounting for about 65% of the trade. Given that profit margins in the long chain of small and medium enterprises are generally in the single digits, a policy of preventing excessive rupee appreciation would clearly have beneficial, economy-wide effects. There would be fiscal costs, no doubt, in the RBI mopping up dollars. 

The resultant release of rupee funds would require the issue of bonds under the Market Stabilisation Scheme to absorb liquidity and tame inflation, stepped-up recourse to the Liquidity Adjustment Facility through the reverse repo window (surplus liquidity in the system is now placed with the RBI at a rate of interest of 6%), and increase in the cash reserve ratio for the banking sector. The overall economic benefits ought to be far greater, certainly in the short-term. 

However, the monetary measures would tend to increase interest rates and egg on even larger capital flows. Which is all the more reason for a cutting-edge technology policy for long-term competitive advantage. It has been shown since the mid-1950s, on the basis of disaggregated growth accounting data, that in the mature economies by far the biggest factor contributing to growth is productivity improvement and know-how, read technology. It is a demonstrated fact that sensible R&D investments have a multiplier effect, revving up efficiencies and opening up new, emerging vistas for growth. 

The way ahead is a clear-cut policy for better allocation of resources for technology upgradation and increased spend on R&D. The latest estimates suggest that our R&D funding, as a percentage of GDP, has just about touched 1%, thanks to improved sectoral allocations in pharma, autos and I-T. But the figure is far lower than that in competitor economies, and overwhelmingly concentrated in a few prestige public sector projects. 

The prime minister has been thinking aloud about the need to boost R&D funding to 2% of GDP by 2012. A detailed gameplan would make eminent sense. Technology textiles, for example, are a $120-plus billion export opportunity waiting to be tapped. The 2003 technology policy statement says, it is important to draw on the many unique civilisational qualities that define the inner strength of India. A more concrete strategy would make a world of difference.


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## Bushroda

*Indian railways chug into the future* 
By Sanjoy Majumder 
BBC News, Delhi 

*There is a saying that the only way to discover the real India is by taking a train journey. *

For decades, many adventurous tourists have used this option - travelling on crowded, non-air conditioned carriages often with wooden seats, at a steady pace through the Indian countryside. 

It brought them face-to-face with millions of ordinary Indians who make up the six billion people transported by this vast network every year - middle-class families on vacation, farm or factory workers heading home to their villages, soldiers off to join their colleagues on the frontier. 

For years the state-owned system was the ultimate symbol of socialist India - a service subsidised by the state so that the vast lengths of the country could be linked. 

While impressive, it was also characterised by poor services, slow trains, fil-thy stations and archaic signalling systems. 

It also never made any money. 

Now, remarkably, all that has changed. 

Over the past year Indian Railways has generated profits of $4.5bn - double that of India's largest private company, Reliance Industries. 

*Turnaround* 

It is also attracting more passengers and improving its services with better trains and improved comforts. 

So how has Indian Railways - which is government-owned and operated by a vast bureaucracy - turned things around in a highly competitive market? 

I decided to start at the very beginning - at the magnificent and enormous Victoria Terminus in Mumbai (Bombay) - a Gothic architectural masterpiece with lofty domes, carved stone friezes and stained glass windows. 

It is a ready reminder that the railways were started when India was a part of the British empire. 

This is where, in 1853, 400 people boarded the first ever passenger service in India, from Mumbai to neighbouring Thane - a distance of 34km (about 20 miles). 

Now, of course, the railways in India span 60,000km and bridge the enormous diversity of this continent-sized country - from the high Himalayan mountains in the north to the western desert, the western and eastern coasts, the deep south and the distant north-eastern state of Assam. 

It is, in effect, India's lifeline. 

The vast terminal is teeming with people, as they wait patiently for the first of many of the long-distance expresses to pull in. 

Travelling by rail in India has always been relatively inexpensive - a trip from Mumbai to the capital, Delhi, costs between 425 and 3,000 rupees ($10-$73) depending on the class of travel. 

But the deregulation of the Indian aviation market has led to a huge increase in budget airlines offering cheaper fares. 

So the railways have decided to hit back. 

On platform four, a huge crowd is waiting for the fully-air conditioned Garib Rath [Poor-Man's Chariot] to pull in. 

Among those waiting are the Ansari family. 

*Comfortable* 

Every year, Mumbai shop worker Zahir Ansari takes his family to his village in north India. 

But for the first time in their lives, they will be travelling in air-conditioned comfort. 

"My wife read about this train in the papers and insisted I try and get us tickets," he says. 

"It will be so much more comfortable for the boys in the summer heat," he adds, looking at his two little sons. 

The Garib Rath is just one of many initiatives taken by Indian Railways in its effort to attract more passengers. 

At the other end of the scale is the Shatabdi Express. 

This high-speed inter-city train caters to business travellers making the point-to-point journey between Indian cities which are located fairly close to each other - and can be covered in about eight hours or less. 

On the Mumbai-Ahmedabad Shatabdi, it is all about living in the fast lane. 

As our blue and gold train pulls away, I am seated in an airline-style seat with a footrest, personal reading lamp, a laptop and mobile phone point and a personal LCD television screen to watch the latest stock market trends. 

A uniformed attendant pushes a cart through the narrow aisle offering passengers beverages followed by soup and dinner. 

*Changes *

The seven-hour journey costs 1,295 rupees ($32). 

There are other changes too. 

Eating on board has always been a major part of the Indian railway experience. 

From piping hot tea served in little ceramic cups to spicy curries and omelette on toast - the railways have always catered to a variety of tastes. 

But now, at the modern Mumbai Central station there is a huge sign towering over the concourse - twin golden arches of the world's most famous fast-food brand, McDonalds. 

There is also a pizzeria, Starbucks-style coffee shops and Indian fast-food restaurants serving their takeaways in cardboard boxes. 

And on board, tea is now made with teabags and served in a little plastic cup. 

Indian Railways own vast spaces across the country - mostly around their stations. 

These will now be rented or leased out to big retail giants - Walmart, local retail brands and hotels. 

Considering that the railways have about 7,000 stations across the country, there is plenty of space. It is estimated that 40,000 hectares of railway land is at the moment under-utilised or completely unused. 

But to get a real sense of where their ambitions lie, I head out to Mulund - a suburb of Mumbai and home to one of the system's many inland container depots. 

This is where huge containers are brought in from Mumbai port to be transported along the railway network to various parts of the country. 

"Every half-hour, a container train is setting off somewhere in the country," says Manish Kumar, general manager of the depot. 

*Business sense* 

Recognising that freight can be a major source of revenue in an economy that is one of the fastest growing in the world, the railways have now decided to build dedicated lines for freight trains connecting Delhi with Mumbai and Calcutta. 

A senior official at the Railway Ministry, Sudhir Kumar, says the system has been able to turn things around simply by working on their strengths - by improving the infrastructure so that they can carry more loads, people and cargo. 

"We are still a public utility and are fully conscious of our social obligations," he says. 

"But I feel that there is no inherent conflict between commercial opportunities and social obligation." 

So as India continues to transform under its growing economy - some of its oldest and most venerated institutions are beginning to change with clear results. 

Even if some of the romance has gone out of one of the world's oldest and largest railway systems.


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## Bushroda

*Geopolitics, Oil And Water*
Robyn Meredith 
FORBES, NY
07.30.07

_*Before our eyes, two giant nations--India and China--are simultaneously embracing both capitalism and globalization. The world economy is being transformed as a result, as Forbes Senior Editor Robyn Meredith explains in her new book, The Elephant and the Dragon: The Rise of India and China and What It Means to All of Us ($26, W.W. Norton, 2007). Each weekday through July 31, Forbes.com will post a new excerpt from the book. *_

Until 1600, India and China combined accounted for more than half the globe's economic output, sending everything from silk, porcelain, tea, furniture, spices and wallpaper--a Chinese invention--overland via the Silk Road or via ship on the Spice Route. Until the late 19th century, India and China remained the world's two largest economies. 

But protectionism and world wars intervened, then India and China shut themselves off from the world. By 2003, India and China together accounted for just 20&#37; of the global economy, despite their vast populations.

After a century-long hiatus, India and China are moving back toward their historic equilibrium in the global economy, and that is producing tectonic shifts in economics as well as geopolitics. 

As India and China rejoin the global economy, three big issues--besides jobs--are coming to the forefront. First, as the two giant nations go through industrial revolutions, their appetites for natural resources are skyrocketing. The new demand is leading to higher world prices. Their growing thirst for petroleum, along with newfound economic strength, is causing shifts in political alliances around the world. 

In addition, now that both nations are richer and have new technology, both are quickly modernizing their militaries, causing powerful shifts in geopolitics not seen since the end of the Cold War. Finally, as India and China industrialize, their already dire pollution is worsening. The result is blackened air and water for them, along with danger for the world's environment.

The most troubling element of the latter-day industrial revolutions in India and China may lie in their soaring energy demands. The rise in the consumption of natural resources is significant because of the sheer number of people involved: There are a combined 600 million Americans and Europeans, but more than a billion Chinese and a billion Indians. India's oil consumption has doubled since 1992, and China's has doubled since 1994. Today, India and China have low per-capita petroleum consumption, but if the two nations used as much oil as the U.S., there wouldn't be enough oil for the world. 

The race for resources like oil can put countries at loggerheads, and the foreign policies of both India and China are increasingly dictated by their energy needs. They have made up with historical enemies and, more alarmingly, have cozied up to nations led by despots or in otherwise unsavory states of affairs. Before our eyes, post-Cold War political alliances are shifting.

For now, as the Indian and Chinese economies grow and reclaim a larger slice of the global economic pie, both are growing more connected to the rest of the world, not more estranged from it. Disagreements between nations are no longer disputes about economic models--communism vs. capitalism. Capitalism decisively won the Cold War debate, and that has helped hundreds of millions of Indians and Chinese prosper by ushering in the globalization era that has created so many jobs and bettered so many lives in developing countries.

So far, the increased trade has drawn nations closer together--even to the point of answering each other's e-mails and phone calls. The whole world has a stake in keeping vibrant worldwide trade going, rather than giving in to the temptation to try to protect jobs at home instead of letting them flow freely around the world. 

The challenge for all nations is to negotiate the new terrain of a globe that again contains a powerful India and China. The geopolitical shifts are enormous, but the economic developments may force even bigger adjustments--for India and China, as well as for the West.


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## Bushroda

*The Internet's Spice Route*
Robyn Meredith 07.24.07, 6:00 AM ET
FORBES, NY

*Before our eyes, two giant nations--India and China--are simultaneously embracing both capitalism and globalization. The world economy is being transformed as a result, as Forbes Senior Editor Robyn Meredith explains in her new book, The Elephant and the Dragon: The Rise of India and China and What it Means to All of Us ($26, W.W. Norton, 2007) . Each weekday through July 27, Forbes.com will post a new excerpt from the book.* 

Middle-class Americans and Britons are growing increasingly worried that their jobs will be moved from Boston to Bangalore, from Manchester to Mumbai, from Dallas to Delhi. The fears of these Western workers are justified. India has more than 100 million English speakers--about twice as many as the U.K itself--and that is helping India attract millions of new jobs, propelling its once-crumbling economy into the 21st century.

Hundreds of thousands of white-collar, service industry jobs have already moved to India, and more are on the way--as many as 300,000 American jobs each year will move overseas for the next 30 years--9 million jobs in all, estimates McKinsey Global Institute, McKinsey & Co.'s economics think tank. 

On behalf of foreign companies, Indians answer phone calls, write computer code and increasingly perform far more sophisticated tasks--from accounting to investment banking--that previously were performed strictly in corporate offices across America and Europe.

Just as China has famously become the factory to the world, India is becoming the world's back office. The birth of the remote back office has turbocharged the Indian economy, reorganized the way business is done in India and around the world, and spread India Fever among foreign companies. 

Stunningly significant changes are coming. "I don't think most people appreciate the magnitude of the change in the worlds workforce; this is a tsunami coming our way," said Intel's (nasdaq: INTC - news - people ) Chairman, Craig Barrett. "Over the next 10 years you are going to see major, major dislocation." Intel has already hired 2,900 Indian workers. Of the worlds 500 largest companies, 400 send middle class work to India, up from 150 in 2000.

The new practice of moving white-collar work overseas is called offshoring, and it put long-ignored India on the map as a market for foreign companies. In 2005, Microsoft (nasdaq: MSFT - news - people ), Intel and Cisco (nasdaq: CSCO - news - people ) each announced they would invest more than $1 billion in India. IBM (nyse: IBM - news - people ) said it would invest $4 billion. 

"IBM is not going to miss this opportunity," said Samuel J. Palmisano, chief executive of IBM, which already has 43,000 employees in 14 Indian cities. IBM already runs information technology systems for 225 of its client companies entirely from India.

For Western workers, there are three big problems caused by offshoring--the movement of white-collar work overseas. First, certain industries, like computer programming, are being hit very hard by job losses. Second, for those industries where there is less job movement, wages can still be held down by the fact that the jobs could be moved overseas, even if they are not. Third, with the labor market globalized, workers should expect their jobs and careers will be less stable over decades as businesses continually evaluate where they can most efficiently have work done. 

Not all the news is bad for American workers--some of the job movement will even create jobs in the U.S. at higher wages. But Americans in many fields will need to get used to changing jobs, or even careers, more often.

However worrying for Westerners, the success of the offshoring movement has been a catalyst for economic growth in India. Hearing that economic powerhouses like America are worrying about competing with India has instilled pride in business and government leaders as well as workers. The creation of just a few hundred thousand jobs for college graduates in a land with a billion people has had a disproportionate effect. 

As we'll see in the next installment, the ability to connect cheap workers in India and China with the modern technology and infrastructure of the global economy is not just changing the lives of workers worldwide. It is not merely changing companies' fortunes. It is also changing the very way business is done--a revolution that has not been equaled since Henry Ford unleashed the assembly line.


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## Bushroda

*Advantage of appreciating rupee*
By Ashwani Mahajan

Appreciation of rupee would make imports cheaper and as such it would be cheaper to buy goods from abroad. Petrol should be cheap and so would be gold. Food items which are scarce in the country like pulses, edible oil etc. would get cheaper. All this may send a negative impact on agriculture and industry in the country, for which we may have to make fiscal adjustments. 

*How to take the benefit of appreciating rupee *

First of all those who feel appreciating rupee is a curse should change their opinion. Our commerce minister says that strengthening rupee would send a negative impact on exports. When he says so, he seems to be echoing the historical argument in favour of devaluation of rupee. Exporter had always argued that more and more of devaluation of rupee is the only way to increase exports. Accepting such arguments, rupee was devalued in 1966 and later in 1983-84. Since then rupee has depreciated from rupees 7.80 in 1983 to rupees 49 by mid 2002. But despite depreciating rupee the rate of growth of our exports has always been less than the rate of growth of our imports. If we think in terms of economic principles, under such circumstances appreciation of rupee rather than depreciation of rupee is the only way to reduce our trade deficit. More important is the fact that recent appreciation of rupee is not due to governments intervention but due to forces of the market. Supporters of globalisation have always been in favour of free market forces. Why are they arguing for restricting this tendency though RBIs intervention is beyond comprehension? 

*Government can take advantage of appreciating rupee*

Due to appreciating rupee, people all over the globe, are getting attracted to this currency. It is obvious that now since dollar is depreciating vis-à-vis rupee, people would prefer to keep rupees, instead of dollars. Under such circumstances government, is working fast on a scheme to issue rupee dominated international debt. In the past, official debt as well as commercial borrowings both were repayable in terms of dollars. Not only government can take the benefit of borrowing at cheap rate of interest, but Indian companies can also borrow internationally at cheap rate of interest by issuing rupee dominated debt. The proposal has been mooted by the Department of Economic Affairs, Ministry of Finance and is being discussed by policy makers at a higher level. There are many other advantages of issuing rupee dominated debt. One, there would not be any unwarranted expansion of money supply despite borrowings from abroad. Two, there would not be any currency related risk because loan would be repayable in rupees. Three, there would not be any risk of large scale flight of capital in the event of fast upheavals in exchange rates. Infact now the risk of upheavals in the exchange rates would be borne by foreign investors. Four, government companies and private companies may now have the facility to borrow at a lower rate of interest and as such this would help us in keeping the rate of interest low in the economy. Global rating agency-Standard and Poors have increased Indias sovereign credit rating to investment grade (BBB) from speculative rate (BB+). Experts feel that due to this improved rating the country has become attractive to a range of global investors. This would help the government to raise debt at highly competitive rates.


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## Bushroda

*Boeing sees India orders of $86 bln over 20 years*
Mon Jul 30, 2007 7:00AM EDT
By Unni Krishnan 

NEW DELHI, July 30 (Reuters) - U.S. aircraft maker Boeing (BA.N: Quote, Profile, Research) expects airlines in India to buy more than 900 new planes worth over $86 billion in the next 20 years on the back of strong passenger growth in Asia's third-largest economy. 

India's domestic aviation market is forecast to grow at about 20 percent a year over the next five years. From just four airlines three years back, India has more than 10 carriers now. "This demonstrates that Indian airline operators, not foreign carriers, are increasingly connecting India to the world by expanding their regional and global presence," said Dinesh Keskar, Boeing's senior vice president for commercial airplanes. The firm estimates the Indian air travel market will grow at an average 12 percent per year over the next 20 years, compared to the worldwide average of 4.7 percent. 

"The Boeing company detailed its current market outlook for India projecting India's need for 911 new commercial airplanes worth more than $86 billion over next 20 years," according to a company statement. 

Boeing has firm orders for more than 140 aircraft worth $20 billion from various Indian airlines, including Jet Airways (JET.BO: Quote, Profile, Research), Air India and SpiceJet (SPJT.BO: Quote, Profile, Research). 

State-run Air India has already received the first plane of a 68 aircraft order in the form of a long-range Boeing 777-200 that will fly non-stop between Mumbai and New York. 

It is likely to buy another 60 new planes by 2011 to expand operations and meet growing demand. 

Jet Airways (JET.BO: Quote, Profile, Research), the country's top domestic airline, has also decided to buy three additional Boeing 777-300 aircraft, supplementing an earlier order for 30 new planes. 

Boeing delivered 18 aircraft to Indian carriers between January and July this year worth more than $2.3 billion. 

Boeing's rival Airbus (EAD.PA: Quote, Profile, Research)(EAD.DE: Quote, Profile, Research) expects Indian firms to place orders for 1,100 passenger and freighter aircraft valued at about $105 billion over 20 years. 

Apart from passenger planes, Boeing is also among several global contenders to sell India as many as 126 advanced multi-role fighter jets in a deal that could be worth more than $8 billion. 

((Editing by Mark Williams; Reuters Messaging: surojit.gupta.reuters.com@reuters.net, +91-11-4178-1016)) Keywords: BOEING INDIA/ Keywords: BOEING INDIA


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## Bushroda

*Indian automotive sector gaining global clout*
30 July 2007

_The bidding war round the corner for Jaguar and Land Rover for an estimated price of $1.5 billion, which features Tata Motors Ltd, India's biggest automobile company, and Mahindra & Mahindra Ltd is symbolic of the evolving Indian businesses making a mark in the global market place, says Bundeep Singh Rangar, chairman, IndusView Advisors, the India-focused cross-border advisory firm._

The acquisition of Land Rover and Jaguar, the UK-based iconic marques owned by Ford Motor Company, the US-based world's third largest automaker (behind GM and Japan's Toyota) has the potential to raise the Indian automotive sector to the highest level to compete with sports Utility Vehicle (SUV) brands like Mitsubishi Pajero; Toyota's Land Cruiser Prado and Highlander; Jeep Wrangler by American automaker Chrysler Group; Hummer from US-based General Motor Corp; among others on the one hand and luxury car manufacturers such as Audi AG, Bayerische Motoren Werke AG (BMW), and Mercedes-Benz of Germany, etc, on the other.

India is on track to become the world's third-biggest car manufacturing country by 2030 leaving behind the UK and Canada as a major car-producing country by 2008. Its car production capacity is expected to surpass 2 million units by 2008 from the current capacity of 1.4 million units. The country offers the benefit of cost-efficient manufacturing, world-class production skills and availability of quality manpower.

The Indian automotive sector, characteristically driven by traditional and conservative business conglomerates is under-going a fundamental shift as companies set out to unlock the benefits of global scale of operations exhibited by the increasing merger & acquisition (M&A) deals in the sector worth more than $515 million from 17 deals so far this year, ie almost equal to the value and volume of deals done by the sector in the whole of last year. 

The show of growing ambition by the companies in the sector mirrors the growing aspirational value among consumers in the Indian market  not only to own a car, but also associate with a brand and upgrade to a luxury car, a segment that is growing at 25 per cent annually commanding a share of almost 27 per cent in the current sales. 

Such aspirations have seen more than 5,000 luxury cars added to the Indian roads in 2006, up from 3,000 in 2005 and just 1,000 in 2004, according to estimates. It's just a matter of time, before global luxury car brands Volkswagen, Lamborghini, Rolls Royce Phantom, Bentley, Porsche, Aston Martin and Ferrari roll out their India plans in full steam.

The bidding war round the corner for Jaguar and Land Rover, the UK-based iconic marques owned by Ford Motor Company, for an estimated price of $1.5 billion, which features Tata Motors Ltd, India's biggest automobile company, and Mahindra & Mahindra Ltd, tractor & utility vehicle manufacturer, among others is symbolic of the evolving Indian businesses making a mark in the global market place.

Between Tata Motors and Mahindra & Mahindra, whoever walks away with the deal, the moment will be historic as it will mark the automotive sector's entry into the elite billion- dollar acquisitions club.

With the two cult luxury brands in its armory, the winner will see itself take the first steps in to the un-explored premium segment and expanding global market place, with niche patrons apart from a combined workforce of 20,000 and state-of-the-art engineering platforms. 

The Indian partner on its part will bring on board the management expertise to save cost and improve production processes by virtue of coming from a country where economies of scale is the foundation of a profitable enterprise. 

The other reason why this deal will be significant is that it will further reinforce the prominence of the Indo-UK merger & acquisitions deal activity which has already seen the country's two of the largest deals  the acquisition of Hutchison Essar Ltd India's second largest GSM mobile service provider by the UK's Vodafone Group Plc and the acquisition of the UK's largest steel maker Corus Group Plc by India's Tata Steel Ltd.

*India is the second largest job creator in Britain*

The investments by India Inc. in Britain during the fiscal year 2006-07 has created 5,130 jobs, second to the US, according to the UK's Department of Trade and Industry. In terms of the number of new projects, India has been ranked third with 69 new projects, after 540 new projects US projects and 95 new French projects. 

According to Think London, an agency promoting investment into the city, Indian investment in the UK had gone up 111 per cent to 76 projects, creating almost 4,000 jobs during 2005-06. The Indian investment has contributed $67 million (£33 million) to the London economy in 2006-07.


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## Bushroda

*NIIT's revenue up 104%*
2007-07-30 16:31:12 Source : Moneycontrol.com

For the first quarter ending June 30, 2007, NIIT, Asia's No.1 trainer and leading Global Talent Development Corporation, recorded net revenues of Rs. 225.4 crore, representing a 104% increase over the same period last year.

NIIT Limited and its subsidiaries recorded a consolidated net profit of Rs. 15.4 crore, a growth of 17% over the same period last year compared to Rs 13.2 crore in the corresponding quarter last year. This has resulted in a basic EPS of Rs. 7.0 per share of Rs. 10 each.

The results were taken on record at the meeting of the Board of Directors of NIIT Limited here today.

Commenting on NIIT's Q1 performance, NIIT Chairman Mr. Rajendra S. Pawar said, 'NIIT revenues grew 104%. Growth momentum continues through new businesses, including the recently acquired Element K.'

New businesses, IFBI and Imperia, have increased enrolments in the current cycle by 100% and extended to markets beyond the metros, in Pune and Ahmedabad. Imperia launched 3 new programs: Human Resource Management, Retail Management and Software Development Management from IIMs in Ahmedabad and Calcutta. IFBI extended its portfolio by partnering with three more leading banks.

The company's Individual Learning Business recorded a 30% growth in revenue in Q1 over the same period last year, with career programs growing at 33%. NIIT students' placement in the Top 20 IT companies grew by 95%. 

To build talent for the high growth IT infrastructure management space, NIIT extended the new NetworkLABS curriculum to over 40 centres across the country. 

Continuing its march in the global arena, NIIT expanded its global network by adding new centres in Vietnam, Indonesia and Nigeria. 

With the added strength of Element K, NIIT has bagged a number of orders in the Corporate Learning space contributing to an order in-take of $38.5 M during the quarter. 

According to Mr. Vijay K. Thadani, Chief Executive Officer, NIIT, 'With the successful launch of new businesses, NIIT is well positioned to be a major provider of talent to sectors beyond IT. In addition, global partnerships will continue to contribute to NIIT's growth.'

During the quarter, NIIT announced its partnership with technology giant Intel to launch multi-core training curriculum, globally. The curriculum has been developed jointly and will be deployed by NIIT using its global delivery capability for the benefit of the software developer community.

In the School Learning Solutions space, NIIT signed up with 100 new private schools, to offer integrated computer and computer aided education. In addition, NIIT has also added 525 more schools under the Sarva Shiksha Abhiyan initiative of the Government.

*Other highlights of Q1 2007:*

- Leading IT magazine Dataquest has ranked NIIT No. 1 IT Training Company and in among the Top 50 IT companies in India and the Top 20 Fastest Growing IT companies in the July 2007 issue.

- TrainingOutsourcing.com has ranked NIIT and Element K among the Top 20 in the Training Outsourcing Industry, worldwide.

- NIIT was awarded the 'ICTE Gold Medal 2006-07' by the Ho Chi Minh Computer Association.

- NIIT Hole-in-the-Wall Education Ltd, a joint venture between NIIT and the International Finance Corporation partnered with Jaipur Municipal Corporation to set up 200 Minimally Invasive Education (MIE) Playground Learning Centers (PLCs) to promote computer education among school kids in Jaipur.

- Union Finance Minister P. Chidambaram felicitated the toppers of the first batch of Tax Return Preparers, trained by NIIT.

- NIIT Brand Ambassador Viswanathan Anand is ranked World No. 1 in Chess. 

Anand reached out to NIIT students, chess enthusiasts and media, nationally, using NIIT Imperia and the NIIT MindChampions Academy.


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## Bushroda

*Boeing: India will need 911 aircraft*
By OUR SPECIAL CORRESPONDENT

New Delhi, July 30: American aviation giant Boeing has projected a huge $86 billion market for commercial aircraft in India in the next 20 years, stating that India will require as many as 911 new commercial aircraft. This has been stated in the annual Current Market Outlook (CMO) of Boeing for 2007. The figures represent an increase from the CMO in 2006 in which Boeing had projected that India would need 856 planes at a value of more than $72 billion.

Boeing stated that it had bagged orders worth $20.4 billion in India in recent times. According to Boeing, this includes 68 aircraft for Air India, 30 aircraft for Jet Airways, 30 aircraft for SpiceJet and 10 aircraft for Air Sahara (that has now been renamed Jetlite). Boeing also stated that it had bagged orders for three Boeing 737BBJ aircraft from the Indian Air Force.

The company said that it had delivered two 777-200 LRs to Air India and two 777-300 ERs to Jet Airways this month. Air India will be using the Boeing 777-200 LRs to launch direct non-stop flights to the US from August 1. According to Boeing, Jet Airways will utilise the 777-300 ER to start flights to the US.

The Boeing 777-200-LR aircraft, for instance, is being seen by Air India as ideal for long-haul flights with its increased leg-room and space for passengers even in the economy class. The interior of the aircraft is divided into eight first class seats, 35 executive class seats and 195 economy class seats. Of the 23 Boeing 777s that Air India will acquire (in its order for 68 aircraft), eight will be Boeing 777-200 long range aircraft while 15 will be Boeing 777-300 extended range aircraft.

***

*SpiceJet breaks even with Rs 18.5cr profit*
By OUR SPECIAL CORRESPONDENT

New Delhi, July 30: Low-cost carrier SpiceJet announced on Saturday that it had finally "broken even" by making profits in real terms for the first time in the first quarter of this financial year (2007-2008). The airline announced that it had made a net profit of Rs 18.5 crore from April to June 2007, a vast improvement from the same period in 2006 when it had incurred a loss of Rs 3.4 crore.

The airline also announced that its CEO and chairman of board of directors Siddhanta Sharma will now be the executive chairman of the airline.

SpiceJet also stated that it had increased its fleet from six to 12 in the last one year which would go further up to 19 in the coming few months.

The airline has Boeing 737-800s in its fleet which have been taken on lease. Mr Siddhanta Sharma said that the airline would go in for more aircraft to expand its operations. The airline attributed the financial turnaround to "capacity addition and constant focus on cost". Mr Sharma also said the airline was sitting on cash reserves of $40 million, but added that it could also mobilise funds at a later date from the market.

Mr Sharma reiterated that his airline had decided not to join the "consolidation moves" in the aviation market and said that the low cost model of SpiceJet could only be implemented accurately if the airline went it alone instead of entering into a merger.

He, however, predicted that there would be a stabilisation of air ticket fares in India, with consolidation in the aviation market. "Low fares will still be there but one will have to purchase a low fare ticket that much in advance," Mr Sharma said.


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## Bushroda

*Air India plans new aircraft order*
By Santanu Choudhury Bloomberg News
Published: July 30, 2007

NEW DELHI: Air India, which is already buying new planes to spruce up its fleet, plans to order another 60 aircraft to meet rising demand for air travel amid India's rapidly expanding economy.

The carrier, which ordered 68 aircraft from Boeing last year, will prepare a proposal for the new purchases in two weeks, the Indian aviation minister, Praful Patel, said in New Delhi on Saturday. The state-run airline, which is the biggest Indian international carrier, will evaluate aircraft from both Boeing and Airbus, he said.

The company, set to be merged with Indian Airlines, faces growing competition from Jet Airways and Lufthansa.

"Looking at the demand and passenger growth, the number of new orders could be about 60," the chairman of Air India, V. Thulasidas, said Saturday at an event in New Delhi to showcase the new planes bought by the two carriers. "In the next two to three years, we should be replacing all the old aircraft with new ones."

Air India will also consider buying the Airbus A380 superjumbo, Patel said at the event.

"We will revisit the aircraft acquisition process of Air India within a fortnight," Patel said. "After all these new aircraft are inducted and the old ones phased out, Air India will need more aircraft."

Air India may sell shares next year to partly fund the purchase of new planes, Patel said in May. Air India and Indian Airlines were planning to go for separate initial public offerings earlier, but their plans were delayed by the merger.

Purchase of the new aircraft may help Air India to raise its profit, which slid to 149.4 million rupees, or $3.7 million, in the year ended March 31, 2006, from 963.6 million a year earlier.

Air India and Indian Airlines together have more than 110 planes and have ordered an additional 111 from Boeing and Airbus.

Air India ordered 50 Boeing planes for itself and 18 for its low-fare unit, Air India Express, in January 2006, to start flights to the United States and Canada. Indian Airlines ordered 43 planes from Airbus to introduce more services and win domestic market share.

Air India and Indian Airlines have been unable to tap India's expanding civil aviation market because of a shortage of aircraft, Prime Minister Manmohan Singh said at the function.

"With the acquisition of these aircraft, our national carriers will be better placed to take on competition at home and abroad," Singh said.

Air travel in India will grow by an average of 7.7 percent annually through 2025, compared with 7.2 percent growth for China and 4.8 percent globally, according to a December projection by Airbus.

The number of passengers rose 24 percent to 73.4 million in the fiscal year ended March 31, 2006, according to the Civil Aviation Ministry.

The number probably grew to 86.8 million, including 60.9 million domestic passengers, in the 12 months that ended March 31 this year, the ministry said.


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## Bushroda

*Manufacturing key growth engine, some services moderate: RBI* 

Mumbai, July 30: Manufacturing sector continues to drive the Indian economy, even though the growth has moderated in the much-hyped mobile telephony and civil aviation sector, the reserve bank said in a report. 

The macroeconomic and monetary developments, first quarter review 2007-08, released by the Central Bank here today said manufacturing sector expanded by 12.7 per cent during the April-may period, emerging as a key driver for 11.7 per cent growth in industrial production.

The manufacturing sector's robust performance was largely contributed by machinery and equipment, food products, basic metal and alloy industries and chemicals and chemical products, the RBI said.

Moderation was, however, witnessed in new cell phone connections, tourist arrivals, export cargo handled by civil aviation, air passengers, cement and steel during this fiscal so far, it said.

Bank deposits and non-food credit off take increased and so did exports of BPO and it-enabled services, which helped in sustaining the growth of the sub-sector financing, insurance, real estate and business services, the RBI said.

The higher growth in food products and wood and wood products, could be partly attributed to the base effect, it said, adding that while growth in the mining sector remained subdued, that of the electricity sector was higher than during the year-ago period.

The consumer goods sector saw strong growth in April-may this year on the back of acceleration in the growth of non-durables sub-sector which was due to higher production of food products, cigarettes and non-cotton cloth, the RBI said.


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## Bushroda

*Indian Airline Makes Its Case as a Premier-Class Contender* 
By JOE SHARKEY
New York Times
Published: July 31, 2007

BETTER than Singapore, better than Cathay and at least as good as Emirates. That was how Naresh Goyal stated his goal that the Indian carrier Jet Airways be rated among the top premier-class service in the world in a few years. 

I know. Tens of thousands of you, maybe more, are now stuck in overcrowded airports or wedged into cramped seats on delayed planes as the worst summer in domestic air travel history grinds on. 

So maybe youre not in the mood, or in the market, for another look at the phenomenal growth in top-tier international business and first-class air travel. Next week, Ill return to the world of airline misery where most of us spend our time.

But Mr. Goyal does present an interesting case. Most Americans have never heard of Jet Airways, the airline he founded in India 14 years ago as a domestic carrier and began building into an international player. That will change.

Starting Sunday, Jet Airways introduces its first service in the United States, a daily flight between Newark and Mumbai, India (with a stopover at the airlines new hub in Brussels). Jet Airways is operating the flight with one of 10 new Boeing 777-300ER aircraft it ordered as part of a $3.7 billion international fleet expansion that will add 20 777s and Airbus A330s to the fleet. The airline also has orders for 10 new Boeing 787s.

In the United States, much of the attention in the premium markets has been on trans-Atlantic service, as airlines like United and American spruce up business-class cabins to try to compete with top-tier carriers like British Airways and Virgin Atlantic, as well as the start-up all business-class airlines like Eos.

Foreign airlines like Singapore Airlines and Cathay Pacific Airways, meanwhile, have set the standards for premium-class travel between the United States and Asia, and have a major chunk of the international premium-class market in India. 

Jet Airways made its mark in Indias fiercely competitive domestic market, where most airlines are doing irrational pricing and losing money, Mr. Goyal said.

Jet Airways, which is profitable, now flies between 40 cities in India and has expanded to routes between India and London, Sri Lanka, Nepal and Southeast Asia. The airline plans to add service late this year to San Francisco and later to Toronto, Johannesburg and the Persian Gulf  all big premium-class markets.

Indias main carrier, the government-owned Air India, has been reacting to the competitive threat to its long-haul markets. It has expanded its international routes and its fleet with 22 long-haul wide-body aircraft, including 777-200ERs and 747-400s in the last three years, and has ordered 27 Boeing 787s among other new long-haul planes. Air India, which recently upgraded its first-class cabins on long-haul flights, now has 29 flights a week between India and Newark, Kennedy International Airport, Los Angeles and Chicago.

The lure of the Indian market recently prompted Continental Airlines to move up the starting date for its new nonstop service between Newark and Mumbai to Oct. 1 from Oct. 28. Continental has flown between New York and Delhi since 2005.

Continental promotes its BusinessFirst-class service on long-haul routes. But top-tier premium airlines offer more luxurious amenities, including cubicle-like personal spaces and lie-flat beds in business class. Emirates even has first-class cabins with seats enclosed in private compartments with doors.

Mr. Goyal says Jet Airways new long-haul first-class service will top that, with sliding double doors, an 83-inch lie-flat bed, storage closets, a 23-inch flat-screen video monitor, and a work table that can also seat two for an intimate dinner.

The money is there, he insists. 

In India, there are about 30 million people who would be called rich rich and another 350 million middle class, Mr. Goyal said. The economy is growing. Many Indians have the money, and they want quality service when they fly internationally  standards not lower than Singapore and Cathay.

He said there are 39 million Indian nationals living overseas, many employed in high-paying jobs in banking, technology and medicine. That doesnt include the growing number of affluent Americans and other foreign business travelers who are now flying regularly between the United States and many cities in India. 

Fare discounting for premium-class service has begun to break out among some airlines, chiefly United States carriers, on the lucrative trans-Atlantic market, where walk-up business-class fares are typically $8,000 to $9,000. (Walk-up first-class fares between New York and London on British Air are over $12,000.) 

Mr. Goyal insists that Jet Airways will be able to prosper without heavy discounting. We will be charging fares like British Air, Lufthansa, Emirates, Singapore, he said. We will not go into that fare war craziness. We dont have a Chapter 11 in India.


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## Bushroda

*India Inc in the brandscape* 
31 Jul, 2007, 0224 hrs IST, TNN

The importance of brands in creating value for businesses cannot be over emphasised. Though globally, on an average, intangibles-brands, know-how (R&D, patents et al), contracts and other intangibles (processes, human capital et al)-make up roughly 62% of enterprise value, in India its' 76%, higher than perhaps any other developed or developing market in the world  Switzerland (74%), France (73%), Australia (72%) and USA (71%). No wonder, even while the Indian economy remains significantly under-branded (advertising spends is under 0.4 % of the country's gross domestic product, compared to a global average of around 1 %), across sectors, brands are becoming the most dominant intangible asset. And a company brand  the face of the business for all its stakeholders  is no less important here. 

Reliance Industries (RIL), the company that pioneered retail participation in the capital markets under its founder Dhirubhai Ambani, emerges as the India's most valuable brand ($ 5.8-billion) on Brand Finance India's Top 50 Most Valuable (Company) Brands list. With a huge impetus on the direct consumer facing business, Reliance Retail, the brand also garners an A on Brand Rating, which demonstrates the resilience of the brand asset and its strong ability to secure future cash flows for the business. 

Public sector petroleum marketing brands  IOC, BPCL and HPCL  under strain due to rising crude prices and high under realisation due to government price controls, will have to exploit the substantial distribution muscle and brand recognition to economic use. 

The Tata Group's crown jewel and India's largest software company, Tata Consultancy Services, muscles its way to be among India's top three brands with a valuation of $4.02-billion. It is also one among India's most powerful brands (Brand Rating A+) in terms of its ability to sustain earnings into the future with the least risk. Wipro follows as the second most valuable IT brand ($2.65-billion, ranked sixth in BF Top 50), with Infosys ($1.61-billion), India's third most valuable IT brand, not making the BF Top 10 cut. While Indian IT companies continue to grow rapidly, the first strains in the India cost arbitrage model are beginning to show with relatively high employee attrition. All three brands are at strategy crossroads and will need to work harder on brand differentiation going forward. 

Among banks, SBI emerges as the most valuable financial services brand at $3.14-billion. ICICI Bank ($ 2.04-billion) at number nine in the BF Top 50 pecking order emerges as India's second most valuable financial services brand. The debate in the financial service market is rapidly changing with technology implementation and operational efficiency becoming table stakes. To break the current supply side parity, players will have to come up with market expansion strategies which are based on unique consumer value propositions. 

At number five on the BF Top 50 list, Tata Motors with a bigger portfolio in passenger and commercial vehicles pips Maruti Sukuki India ($ 1.01-billion, rank 16), Bajaj Auto ($825-million, rank 17) and Hero Honda ($599-million, rank 23) as the country's most valuable auto brand. 
Ranbaxy ($763-million, rank 20) is ahead of its peers such as Dr Reddy's ($360-million, rank 29) and Cipla ($185-million, rank 40) in terms of value as well as brand power. With their mainstay generics business getting increasingly crowded and margins under acute pressure, differentiated products under strong brands will be the strategy for the future. To establish a beach head in their global markets, pharma companies will have to be on the lookout for under leveraged brand assets which can be bought or licensed from their owners. Bhrati's Airtel is India's most valuable telecom brand ($ 1.71-billion, rank 11) and powerful brand (A+). The brand has secured leadership in network, innovations, offerings or services and managed to inject some emotional elements in a highly commoditised and crowded market.


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## Bushroda

*'India After Gandhi': profile of a titan on the rise*
*An Indian historian examines his country's remarkable transformation into a global power.*
By Vikram Johri
from the July 31, 2007 edition

There is a particular peril in compiling a history of contemporary events, and Ramachandra Guha defines it neatly when he says that, "Those who write contemporary history know that they are not addressing a passive reader of the text placed in front of him. The reader is also a citizen, a critical citizen, with his own political and ideological preferences." 

And yet, in spite of his own warning, Guha has chosen to write India After Gandhi: The History of the World's Largest Democracy, an opinionated account of what has transpired in his country since World War II. 

Contemporary India is not an easy nut to crack. From 1950 up through at least 1980, the country was bogged down by what was disparagingly referred to as "the Hindu rate of growth" (a sluggish 3.5 percent annual increase that some economists blamed on Hindu ideas about fatalism and contentment with one's lot in life.) 

But since the late 1980s, the country has undergone a remarkable transformation. In 1991, the Narsimha Rao government launched wide-scale economic reforms that ended the license-quota-permit raj (a complex patronage system set in place in the early years of India's civil service) that had shackled the economy for four decades. Today, India is looked upon as a major global economic player with rising clout in world affairs. 

But what brought about this transformation? And how inclusive has it been?

Guha, a noted Indian historian who has covered issues as diverse as environment and cricket in the past, takes a cautious approach in examining this meteoric rise, preferring to focus mostly on the good and the bad in policy that preceded it. 

*The beginnings of Indian democracy*

He is an unmitigated admirer of Jawaharlal Nehru, India's first prime minister and a global statesman. Committed to secularism and equality, Nehru was instrumental in ensuring that every Indian adult, regardless of educational qualification or gender, had the right to vote in India's first parliamentary election in 1952. 

Whether such a goal was desirable is almost beside the point. It boggles the mind to think of the scale on which this project was carried out. Even today, India's electoral experiment, conducted entirely on electronic voting machines, can provide lessons in operations and logistics to many other countries (including the US, as evidenced by its 2001 ballot blunder). 

Guha writes admiringly of the 1952 exercise, including profiles of various pan-Indian leaders and how they cast their votes.

He also devotes close attention to the framing of the Indian Constitution. Guha delves into the long hours of confabulation that members of the Constituent Assembly indulged in to arrive at a charter that has come to be regarded as among the best and most equitable in the world. 

Enamored as Guha is of Nehru, he gives space to the latter's political failures as well, most notably, his blind faith in China's ostensible friendship with India. Nehru was brutally shaken by the Chinese invasion of 1962 and he never truly came to grips with it. He died a broken man in 1964. 

Nehru's death left a gaping hole in Indian politics, and it took some years before this could be filled by none other than his daughter, the fiery Indira Gandhi. While Nehru was a sagacious leader, his daughter proved to be one of India's most ruthless and shrewd politicians. 

Gandhi was responsible for imposing the dreaded "Emergency"  a state of emergency during which she suspended elections and civil rights for 21 months between 1975 and 1977. 

The Emergency was a transparent effort to consolidate Gandhi's position amid perceived threats to her leadership. Thousands of her political rivals were jailed during this time and several democratic conventions were suspended. 

Gandhi ruled the Congress with an iron fist and pushed forward the political career of her son Sanjay, who is today remembered for egregious abuses of state power, including forced sterilizations. (Sanjay's political career ended with his death in a plane crash in 1980.) 

*The legacy of the Nehru-Gandhis*

The history of modern India, in many ways, is the history of the Nehru-Gandhi family. It was Indira Gandhi's bloody death in 1984 that caused the political rise of her naive older son, Rajiv. He, in turn, was killed by a Tamil suicide bomber in 1991, and after a self-imposed political exile, his widow, Sonia Gandhi, an Italian-born woman, took control of the Congress party in 1998. 

One of the many incidents that marked Rajiv Gandhi's prime ministership was the Shah Bano case, which Guha explains in depth. Shah Bano was a Muslim divorcée who approached the Indian courts hoping to secure alimony from her husband. The case went all the way to India's Supreme Court, which, in 1986, took the side of Shah Bano. 

This angered several sections of the Muslim community who urged Rajiv Gandhi to overrule the court order through legislation. Gandhi complied. That launched a divisive phase in Indian politics and led to the rise of Hindu fundamentalist groups, all of which angrily decried Congress's policy of appeasement toward Muslims. 

So vituperative have the charges and countercharges been that Indian politics today remain virtually split down the middle over the cause of Hindutva (Hindu nationalism). 

This, Guha maintains, is the paradox of India. On the one hand, shiny malls sporting the latest brands jostle for attention. On the other, dehumanizing poverty and social ills are still shockingly evident. While the rise of an enlightened middle class has helped much to raise India's profile, much remains to be done to lift the country from the throes of religious intolerance and casteism. 

Overall, Guha is optimistic about India's future. Backed by the rising popularity of native cultural products  including Indian movies and literature  Guha sees India as well on its way to finding its rightful place in the sun.


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## Bushroda

*Dell starts manufacturing in India*
TNN[ TUESDAY, JULY 31, 2007 04:00:21 AM]

CHENNAI: Dells first made in India computer rolled out of the conveyor at its newly established assembly line at Sriperumbudur, near Chennai, here on Monday. 

The first locally manufactured desktop was handed over to Infosys Technologies, one of Dells largest customers in India. The Sriperumbudur facility, in which Dell intends to invest $30 million over the next five years, now has a single assembly line, with a capacity to roll out four lakh units per annum on a single shift basis. 

While the company can operate upto three shifts, it also has enough land at its disposal to set up additional lines to achieve its production ramp up schedule to roll out 2.5 million units per annum over the next few years. We have commenced production today at this facility, which happens to be the third in entire Asia-Pacific region and Japan. 

The Sriperumbudur facility is also our third plant to go on stream this year, with two others in Brazil and Poland, Mr Rajan Anandan, vice president and GM, Dell India told a press conference at the plant. This facility is very strategic for our operations in India and it will help in reducing the lead time for delivery by 40 per cent  50 per cent. It will also help in reducing costs and we will pass on the benefits to the customers, as there will be meaningful reduction in prices, he said. 

The first desktop was handed over to Group Captain Deepak Sinha, vice president - CCD and Mr R N Koushik, AVP - CCD, Infosys, in the presence of Mr Kip Thompson, vice president - worldwide facilities and Mr K Y Yong, GM - Manufacturing Operations, both from Dell. 

We have put up the facility in just a short eight months and it is great day for manufacturing and technology in India, said Mr Thompson, who was earlier instrumental in launching Dell products in the country. Addressing the gathering, Mr Yong said the new facility has come up over 1.1 lakh sq ft of built up area. We have been allocated 50 acres and we have plenty of space set up addition assembly lines. In addition, 100 acres have been allocated for suppliers and we intend to establish an eco-system comprising many of our 90 vendors present globally, he said. 

While Dell formally selected Chennai, which according to company officials got the nod due to the presence of a sea port and an international airport, in September, 2006, it announced its intent to start operations by July this year. 

When we started operations at Penang in Malaysia and Xiamen in China in 1995 and 1998 respectively, the facilities were of the same size as in Chennai. However, they have since expanded to very large capacities and we expect the same to happen here too, Mr Yong said. Dell has an overall market share of 6 per cent in India. However, it has established around 30per cent share among large corporates. It has recently entered the banking and financial services segment.


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## Bushroda

*Jobs for Indians in EU to get easier*
1 Aug 2007, 0503 hrs IST,IANS

NEW DELHI: Migration of Indian workers to countries in the European Union (EU) is set to become easier with the government initiating a process to facilitate development of legal migration between India and the EU. 

A memorandum of understanding (MoU) between the Ministry of Overseas Indian Affairs (MOIA) and the International Organization of Migration (IOM) was signed here on Tuesday. 

The new MoU on Regional Dialogue and Facilitating Managed and Legal Migration between India and the European Union will aim at facilitating development of legal migration, enhancing regional cooperation on legal migration management and enhancing dissemination of information relating to employment opportunities in EU countries. 

"India is one of the handful of leading countries in the world when it comes to overseas workers," IOM Director General Brunson McKinley said following the signing of the accord. 

"It is one of the reasons for India's dynamism and prosperity." 

Stating that the MoU calls for the establishment of a project implementation unit (PIU) in India, McKinley said, "We have been working on this diligently for many, many years. It will go a long way in helping India's migrant workers." 

He said that the PIU will take up the following tasks on a priority basis: training sessions for workers and mutual capacity building; setting up of an overseas workers' resource centre in India; and import of Indian professionals to select EU countries like Italy, Spain and Ireland. 

The regional dialogue of the IOM involves 11 Asian labour supplying nations - India, China, Bangladesh, Indonesia, Nepal, Sri Lanka, the Philippines, Thailand, Vietnam, Pakistan and Afghanistan - and five destination countries in the EU: Italy, Germany, Britain, Ireland and Spain. 

Stating that IOM has signed similar agreements with several other countries, McKinley said, "But this agreement with India is very important for us. After all, very few countries have taken up steps like setting up a separate ministry for ensuring smooth and legal migration of workers." 

At present most skilled and semi-skilled workers in India migrate to the Gulf nation. However, this project, McKinley said, would help facilitate diversification of the migration process to the EU, a region where the future is likely to throw up major opportunities in the years to come. 

Speaking on the occasion, Minister for Overseas Indian Affairs Vayalar Ravi said that the MoU is in keeping with the MOIA's goals to facilitate legal and smooth migration of Indian workers. 

Stating that migrant workers are assets to the countries they belong to, the minister said, "Around $270 billion are sent by way of remittances by migrant workers to their respective countries. Of this, around $200 billion go to developing nations." 

He said that migration has given better opportunities for the poor to earn their bread and butter from other places. 

"However, we should ensure that they are not treated as second class citizens in the countries they go to. A project like this (with IOM) will ensure that overseas workers are respected wherever they are," he added. 

Stating that MOIA was looking to promote organised migration to labour seeking countries in the EU, the minister cited Poland as an example. 

"On our invitation, Poland's labour minister came to India and we signed a pact to promote migration of Indian workers to Poland, a country with a booming economy but facing a labour shortage. 

"This agreement with IOM will help in this process," he said. 

Established in 1951, the Geneva-headquartered IOM is the leading inter-governmental organization in the field of migration and works closely with governmental, inter-governmental and non-governmental partners. As of now, it has got 120 members and 20 observer nations, including India.


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## Bushroda

*India Is Waking Up to Tackling Glut of Cash*
By Andy Mukherjee

Yaga Venugopal Reddy, gov of Reserve Bank of India Aug. 1 (Bloomberg) -- The Indian authorities may have finally become serious about mopping up unwarranted liquidity in the banking system. 

With yesterday's announcement of a 50-basis-point increase in the ratio of deposits that lenders have to keep with the central bank as unremunerated reserves, the call-money rate may now rise from the 0.17 percent level it fell to last week. 

Overnight rates hovering near zero in an economy that's growing at a 9 percent annual pace, and where inflation may be simmering just beneath the surface? 

That wasn't just ridiculous; it was plain dangerous. 

Had it gone on for some more time, bankers would have judged the excess liquidity to have become permanent. 

Part of it would have then been funneled into the overheated property market, jeopardizing the central bank's efforts to slow down mortgage demand. 

Banks are itching to cut home-loan rates, which have risen 2 percentage points this year because of monetary tightening. Already, high borrowing costs are pushing up delinquencies in unsecured personal loans that are usually the first ones to witness defaults by households with stretched mortgages. 

If banks cut lending rates prematurely, credit growth may pick up speed again. Inflation, which accelerated to a six-week high in the week to July 14, may not be tamed without raising interest rates. Although an eighth quarter-point increase in the policy rate since October 2005 may not derail corporate investment growth, it would still be entirely unnecessary. 

The liquidity glut has been caused by foreign inflows that haven't been ``sterilized,'' or absorbed by the central bank. 

*Insufficient Absorption* 

U.S. dollars brought into the country by foreign investors and local corporate borrowers have been bought by the central bank to keep the local currency from rising. In the first five months of the year, such purchases amounted to $23.5 billion. But the rupee funds released into the banking system in the process haven't been neutralized by bond sales. 

In a July 16 note to investors, Peter Redward and Puay Yeong Goh, economists at Barclays Capital in Singapore, estimated that less than a third of the foreign inflow into India in the second quarter was sterilized. 

Since June 8, the figure has plunged to just 9 percent, the Barclays economists said. 

Every hedge-fund manager investing in India knows the near- zero rates will have to rise. And they are betting that they will rise through an appreciation of the exchange rate: The central bank will simply have to stop buying dollars, so that it has less domestic money to mop up. 

The sloshing liquidity has thus become a lightning rod for currency speculators, who are emboldened by a renewed interest among investors to allocate capital to India funds. 

*Budget Deficit *

More overseas money heading into Indian equities will push the Reserve Bank to choose between keeping the exchange rate steady (by buying dollars), or controlling inflation (by not buying dollars). 

The only way the Reserve Bank can control both inflation and the exchange rate for any length of time is if the government is willing to take a hit on its budget. Even on that count, there seems to be a lack of urgency. The Finance Ministry has imposed a limit of 1.1 trillion rupees ($27 billion) on the total stock of bonds and bills the central bank can sell. 

This is inadequate and must be increased to at least 1.5 trillion rupees, say Redward and Goh. Since the government will have to pay interest on these bonds, it is hesitant. But without the central bank possessing the ammunition to sterilize every rupee of liquidity released by every dollar purchased, it can never make the currency speculators go away. 

*Too Many Constraints *

The authorities want high growth, low inflation and a stable -- preferably undervalued -- currency. And they don't want to pay for it explicitly. 

Into the bargain, what has been allowed to drift is liquidity. 

The overnight index swap, which has a floating interest rate tied to call-money levels, fell more than 2 percentage points between April 27 and July 23. 

The increase announced yesterday in the cash-reserve ratio will help mop up liquidity in the short term. 

It is, however, neither a permanent fix, nor a free lunch: Preemption of bank deposits by the central bank acts as a tax on the banking system and erodes its competitiveness. 

*No End to Volatility *

Overnight adjustment of banking-system liquidity doesn't quite work in India. 

When money is loose, just like now, the central bank is loath to drain the lot overnight because of the obligation to pay 6 percent on these funds. So it decided in March to limit its daily borrowings to 30 billion rupees. That ceiling on absorption will now be scrapped, the Reserve Bank said yesterday. 

When liquidity in the system becomes tight, a different limitation kicks in: Banks aren't able to borrow from the Reserve Bank even if they are willing to pay the asking rate of 7.75 percent because of a shortage of collateral. 

That's because they have to set aside 25 percent of their deposits in ``statutory liquidity,'' or government securities that don't qualify as collateral. 

With all these constraints, an end to the volatility in the overnight rates isn't in sight. Excess liquidity may disappear, reappear, or turn into a drought. Banks will simply have to live with not knowing which of the three it might be tomorrow.


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## Bushroda

*One lakh broadband service centres by March 2008* 
Special Correspondent 

NEW DELHI: Union Minister of Communication and Information Technology A. Raja on Tuesday said that about one lakh broadband enabled service centres will come up in the country by March 2008 at a cost of Rs. 5,400 crore. 

One centre will come up for every six villages with all e-governance services. A sum of Rs 1,600 crore will be put up by the Central government and the rest by the private sector under the Public Private Partnership (PPP). The Minister was speaking during the inauguration of the e-India 2007 Conference here. 

The Minister said that for the implementation of e-governance, the government on its part is trying to provide basic infrastructure including internet, window facilitation centre and last leg connectivity for implementation of e-governance. However participation of the private sector and citizens is a key for providing totally transparent services to the public. The application of IT to government processes, e-governance in short, could have a profound impact on the efficiency, responsiveness and accountability of government and on the quality of life and productivity of citizens, especially the poor.

Mr. Raja said with Information and Communication at its core, the Department of Information Technology (DIT) has initiated the National e-Governance Plan (NeGP). It is an ambitious programme aimed at improving the quality, accessibility and effectiveness of government services to citizens and businesses with the help of information technology. The Indian economy was growing at a steady rate of 8-9 per cent. For this growth to be sustainable there is a need to increase the efficacy of business processes, especially those directly controlled by the government, he said.


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## Bushroda

*India to tackle inflation worries* 
Stewart Douglas 
Finance Markets, UK

The Indian Central Bank has today announced measures designed to curb inflation in one of the worlds fastest growing economies.

India has experienced exceptional economic growth over the last few years, prompting fears amongst analysts that inflation may continue to get out of hand and devalue the rupee.

The central bank has increased the cash reserve ration from 6.5% to 7%, attempting to reduce the overall amount of money loaned from banks. 

In effect, the reserve rate rises mean that Indian banks are prohibited from lending beyond 93% of their total cash assets, in an attempt to suppress the money supply and prevent inflation from gathering momentum across the economy.

The news comes just twenty-four hours after announcements from Beijing to the same effect, attempting to curb the rising tide of inflation in China that comes with rapid economic expansion.

The Chinese CCR has been raised to 12%, compared to the 7% figure in India, showing the extent to which inflation is posing a threat to the Chinese economy and way of life.

The move is designed to help improve the living standards of Indian citizens, by increasing the value of their economy in a global sense. Whilst economic growth is rampant, inflation can only reduce the living standards of ordinary Indians, and lead to uncompetitiveness on an international scale.

Whilst the cash reserve ratio was increased, interest rates in India remained stable at 7.75%, emphasising that controlling the money supply through the CCR is the favoured inflation-preventing method of the Indian government at this time.

The Indian and Chinese economies are growing at a significantly quicker speed than any others worldwide, as their industry rapidly develops and grows, prompting the need for tight macroeconomic controls to avoid inflation and international economic problems.


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## Bushroda

*India Invests $1 Billion in Global Trade Deal with Africa* 
PR-GB.com (press release), Bulgaria
Written by george2007 
Tuesday, 31 July 2007 

India has recently disclosed its plans to spend around $1 billion in a new global trade deal with Africa. Indian Ambassador Amarendra Khatua said that the agreement would consist of the improvement of the mining and oil facilities in Africa's Ivory Coast during the next 5 years. According to the official, his nation has sought to avail of the vast and abundant oil resources of the region through the Gulf of Guinea. Moreover, the Indian government has also considered about building new mining and energy facilities in the area. The new global trade deal would also serve to further fortify the alliance between India and Africa.

According to analysts, the global trade deal is vital in India's search for more energy resources outside its territory. Currently, the nation has embarked on looking for more energy and raw materials in order to fuel its rapidly growing economy. India is among the Asian countries that have shown a fast and remarkable economic growth during the recent years. As a result of this phenomenon, the energy demand from both industrial and domestic consumers have also risen. 

As India's energy resources fall short before the increasing demand, the government continues to seek more foreign supplies through signing global trade deals on energy. In fact, a large percentage of the nation's energy needs is already covered by foreign supplies. It must be noted that the recent floods that submerge the western part of India has also rouse more fears on energy supplies. Continuous and heavy rains during the past weeks had resulted to floods, which destroyed several petrochemical factories and a natural gas plant in the area. The damaged factories of both Oil and Natural Gas Corporation and Reliance Industries may only account for a minor percentage of India's entire production of energy. Still, the closure of these facilities has affected the country's energy sector and has roused concerns on energy shortage.

According to India's Ambassador to the Ivory Coast, both India and China are in need of securing their current and future energy resources due to their rapid economic development. He added that both countries needed to invest more money on global trade deals covering energy supplies. Needless to say, Mr. Khatua said that a civil war, which lasted until 2003, might pose as a hindrance towards India's plans to venture in Africa's mining and oil industries. He added that there were still plenty of things to be negotiated before his nation could proceed with its plans to make a global trade deal with the region. Currently, the Ivory Coast produces above 60,000 barrels of oil a day. Indian Oil and Natural Gas Commission (ONGC) already invested around $12 million in the exploration of an offshore oil resource in the place. Meanwhile, India's economy continues to expand with the increase of foreign investments. More foreign companies have been attracted by the country's improvement and are looking for business opportunities in the region. The government though was warned to increase its investments on infrastructure projects in order to cover the long term needs of its growing economy.


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## Bushroda

*Indias Real Estate Boom is here to stay*
PR-GB.com (press release), Bulgaria 
Written by george2007 
Tuesday, 31 July 2007 

Indian real-estate market has never found it so good. Amidst the euphoria in major metros and second and third tier cities where possibly every domestic investor is investing like there is no tomorrow a plethora of foreign investors are also all set to enter the Indian real estate investment space. A conservative estimate by one leading research firm states that over the next eighteen to thirty months venture capital worth $7 billion to $8 billion is expected to flow into the country. 

Truly Indian real estate is having a dream run for last five years. Some skeptic minds however, already have started asking the sustainability of the momentum. Global research and consulting firm A. T. Kearney has evolved a global industry curve for the property in India. A. T. Kearney has been analyzing real estate speculation and investment trend across fifty countries globally. The finding was blended with the particular countrys GDP and it was realized that in between the two (real estate investment and GDP of respective country) there exists a strong correlation. Global industry curve, thus devised by the consulting firm fits best between the two. 

Real Estate in India has always been considered as fragmented and unorganized business sector. Ten years ago, in 1995-1996, investment for the sector in the country was a meager 2% of the total GDP. For China the figure was a healthy 4.8%. However, investment since then in India kept rising steadily and touched 2.4% in 2004. Manufacturing favorite China was still way ahead with a robust 6.5% rate. A. T. Kearney by dint of its global industry curve has predicted that by 2010 the rate may go up to 4.2%. This only reinforces the fact provided by UN Economic and Social Commission for Asia and the Pacific (ESCAP) that real estate boom in Asia Pacific region is probably here to stay. India who has been witnessing a steady rise in the global economy for last 15 years thanks to its strong and consistent economic fundamentals delivered some robust result as far as GDP growth is concerned. For last five years, continuously, the country has been achieving GDP growth of 8.5%. 

Since liberalization India has attracted huge volumes of FDI inflows. In the last five years alone the FDI inflow stood up to $19 billion. These FDI inflows along with service sector boom have also straight driven the demand for office and business markets and districts. Next coming up are SEZs which will represent the next generation of growth. India with ever growing purchase powered middle-class with high disposable income and easy to available of housing finance holds a great fortune in real estate investment because the residential segment investment in the country represents more than 60-70% of the overall investment in the sector. It constitutes residential, office and commercial premises. 

Krish is an eminent analyst of real estate and investment domain. He has many titles under his credit. He is a marketing and management consultant who trains middle, senior executives and real estate agents in India from real estate firms. He has published many articles internationally on the area.


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## Bushroda

*India's central bank hikes cash ratio, key rates unchanged*
Servihoo, Mauritius
[31 Jul 2007] 

India's central bank moved to cut money supply but kept short-term borrowing rates unchanged to balance concerns over inflation and a desire to maintain high economic growth.

The Reserve Bank of India said in a quarterly review that while inflation had fallen below its five percent forecast for the year to March 2008 from nearly seven percent earlier this year, commodity and asset price rises remained a concern.

"While inflation has been steady, inflationary pressures remain and are more persistent than before, along with high commodity and asset prices," central bank governor Y.V. Reddy said in a statement.

In an effort to cool demand, the central bank cut the amount of money available for loans by hiking the commercial banks' cash reserve requirements by 50 basis points to seven percent.

Inflation accelerated to 4.41 percent in the week to July 14 from 4.27 percent the previous week.

"This is a surprisingly nervous (policy) in relation to inflation. It is the most hawkish stance the bank has taken relating to financial risks," said Manika Premsingh, economist with brokerage BRICS Securities.

Analysts had expected the central bank to keep its benchmark repo rate at a four-year high of 7.75 percent, which was reached after five hikes between June 2006 and March this year in an effort to tame inflation in the fast-growing economy.

India grew 9.4 percent in the year ended March and the central bank has forecast growth to slow to 8.5 percent this year, a prediction that was reaffirmed on Tuesday.

But despite the forecast of slower growth, the central bank said billions of dollars of foreign investment in the stock market this year had flooded banks with cash that was fuelling a boom in consumer and business spending.

The hike in the cash reserve requirement, due to take effect August 4, was aimed at removing some cash available for loans, the central bank said, adding the policy would continue for the next several months.

"The bank will continue with its policy of active demand management of liquidity," the central bank statement said.

"Banks, financial institutions and corporates are advised to be vigilant and prepared for risk mitigation strategies."

Consumers too have been affected by inflation with the cost of home loans up sharply since a Congress party-led coalition government came to power in May 2004 on a pledge to tame prices and spread the benefits of the economic boom.

But the government has had to grapple with by rising prices for food and other staples that led the central bank to aggressively tighten monetary policy to cool what it termed earlier this year was an "overheated economy."

The 30-share Mumbai stock exchange Sensex index rose 1.9 percent as investors shrugged off the hike in bank reserves and instead focused on strong company earnings, dealers said.

They said the market rose steadily following a short blip intraday on the news, with the Mumbai stock exchange benchmark 30-share Sensex up 290.08 points to 15,550.99 by the close.

The rupee strengthened against the dollar to 40.44 from 40.54 on Monday while it weakened against the euro to 55.42 from 55.30.

A leading business lobby group, the Federation of Indian Chambers of Commerce and Industry, or FICCI, said stable rates would boost growth.

"FICCI has welcomed the overall stance of monetary policy with an emphasis on price stability while ensuring a monetary and interest rate environment that supports exports and investment demand to sustain growth," the group said in a statement.


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## Bushroda

*Reckitt's India unit sees revenue doubling by 2010*
Tue Jul 31, 2007 12:58 PM BST

NEW DELHI, July 31 (Reuters) - The Indian unit of Britain's Reckitt Benckiser Plc (RB.L: Quote, Profile , Research) sees its revenue more than doubling by 2010 as it rolls out a broader range of products in a market where urban incomes are rising fast.

A growing number of young professionals with spare cash in their pockets is likely to fuel demand for goods and services in India, Asia's third-largest economy, analysts say.

"Our vision is to reach 25 billion rupees ($619 million) by 2010," Chander Mohan Sethi, chairman and managing director of Reckitt's India unit, told reporters at a press conference.

Reckitt Benckiser (India), which makes antiseptic Dettol, toilet cleaner Harpic, and pest repellent Mortein, posted revenue of 12 billion rupees in the year to December 2006. 

Sethi said sales of Dettol, the company's flagship brand, would touch 10 billion rupees by 2010, from 4 billion rupees now.

"The household penetration for that category is less than five percent today. It can only become bigger and bigger as awareness grows," he said.

Sethi described the Indian market for household and personal care products as nascent but expanding.

He said Reckitt plans to launch new products. Its Finish dishwasher and inhalant decongestant Karvol are among the items not yet retailing in India.

"There are a lot of categories in which we are present worldwide and intention is that India, too, should have those."

Reckitt competes with Hindustan Unilever Ltd. (HLL.BO: Quote, Profile , Research), the Indian unit of Anglo-Dutch consumer goods maker Unilever Plc (ULVR.L: Quote, Profile , Research), Godrej Consumer Products Ltd. (GOCP.BO: Quote, Profile , Research), Procter & Gamble Hygiene and Healthcare Ltd. (PROC.BO: Quote, Profile , Research).


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## Bushroda

*Steria offers $956m for Xansa31st July 2007*
Computer Business Review, UK
By Ed Thomas

*French IT services vendor Groupe Steria has tabled a bid for outsourcing firm Xansa, which values the UK-based company at approximately 472m pounds ($956m).*

Under the offer, which has been recommended by Xansa's board, Steria will pay 130 pence in cash for each Xansa share. This represents a 61.3% premium on Xansa's average closing price over the month ended July 26. Shares in Xansa soared over 30% in trading on Friday after the company revealed it was in advanced takeover talks.

According to Steria, the merger will create an enlarged company with annual revenue of approximately 1.8bn euros ($2.5bn), putting it "among the top 10 IT services providers in the European and UK markets". Steria also expects the deal to produce pre-tax cost savings of 24m euros ($32.8m) in 2008, rising to 49m euros ($67m) the following year and 53m euros ($72.5m) from 2010 onwards.

Headquartered in Paris, Steria has approximately 10,700 employees operating in 15 countries. In 2006, the company reported total sales of 1.3bn euros ($1.7bn), of which 42% was derived from its domestic market, with 23% coming from the UK, 16% from Germany, and 19% from the rest of Europe, including the Nordics, Spain, Switzerland, and the Benelux region.

One of the main reasons for acquiring Xansa is to gain access to its offshore delivery centers. The company has over 5,000 staff working out of centers in Noida, Chennai, and Pune, while Steria has yet to establish a significant presence in the region. The French company has tended to enter into partnerships with Indian companies, such as application development company PSI Data Systems.

Steria has preferred to take the partnership route due to its traditional focus on consulting, systems integration and infrastructure management projects, which lend themselves less easily to offshore delivery models. However, according to John Torrie, Steria's CEO for Northern Europe, the company is being increasingly drawn into the application management and development space and therefore needs an increased offshore capability.

Steria, which derives approximately 38% of its revenue from the public sector, will also be looking to take advantage of Xansa's growing presence in this space. Xansa's public-sector sales increased by 56% in the 12 months to the end of April 2007 and the company has significant deals with the UK National Health Service, the Home Office, and the Cabinet Office.

Steria has a number of clients in the UK local government space and has recently announced contract wins with Havant and Eastbourne borough councils. In central government, the company provides services to the Belgian finance ministry, the French ministry of economy, finance and industry, and the UK national probation service.


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## Bushroda

*India's airline industry growing at 12% per year* 
Malaysia Sun
Tuesday 31st July, 2007 

U.S aircraft maker Boeing expects airlines in India to buy more than 900 new planes worth over US$86 billion in the next 20 years.

Boeing has firm orders for more than 140 aircraft worth $20 billion from various Indian airlines, including Jet Airways, Air India and SpiceJet.

Boeing's Indian office estimates the local air travel market will grow at an average 12 per cent per year over the next 20 years, compared to the worldwide average of 4.7 per cent. 

From just four airlines three years back, Asia's third-largest economy now has more than 10 carriers.


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## Bushroda

*Boeing orders in India expected to grow as air travel expands*
Chicago Tribune, United States
July 31, 2007 

NEW DELHI - Boeing Co. on Monday raised its 20-year sales outlook for India as demand for transporting people grows in the world's second-most populous nation.

India is expected to buy as many as 911 new passenger planes worth $86 billion by 2027, Chicago-based Boeing said. That's 6.4 percent more than the forecast for 856 planes until 2026 made by Boeing in August of last year.

Economic growth and the start of budget carriers have made air travel more affordable in India. Indian carriers ordered more than 450 planes worth $30 billion in the past four years to capitalize on an annual 25 percent growth in air travel.

"There is a direct correlation between gross domestic product growth and the aviation sector," Dinesh Keskar, Boeing's senior vice president of sales for South and Southeast Asia, said in New Delhi. "As more and more people fly, the growth will be phenomenal."

India's economy expanded 9.4 percent in the 12 months ended March 31, the most since 1989, and could grow 8.5 percent in 2007, a pace surpassed only by China among the world's largest economies, according to the Organization for Economic Cooperation and Development.

A 1 percent rise in India's gross domestic product should translate into a 2 percent increase in air traffic, according to a June report by Ernst & Young LLP.

The number of passengers climbed 24 percent, to 73.4 million, in the fiscal year ended March 31, 2006, according to India's civil aviation ministry. It probably grew to 86.8 million, including 60.9 million domestic passengers, in the 12 months ended March 31, 2007, the ministry said.

Seven carriers have started flights in India in the past four years to capitalize on the growth in air traffic. Five others have sought approval to start flights.

Demand for air travel is expected to grow about 20 percent a year in the next four to five years, Keskar said.

Indian carriers will buy 757 of the 911 planes to meet growing demand for air travel and the remainder to replace their current planes, Keskar said.

The forecast for the 911 planes includes demand for 674 single-aisle planes, such as the Boeing 737 and Airbus A320, he said.

There will be demand for as many as 173 twin-aisle planes, such as the Boeing 787 and Airbus A350, Keskar said.

Indian carriers will purchase nine larger airplanes, such as the Boeing 747 and the Airbus A380, in the next 20 years, he said.


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## Bushroda

*Birthday Bashes That Take the Cake*
*For Parents in India, a Chance to Display Generosity, Affluence*

By Emily Wax
Washington Post Foreign Service
Tuesday, July 31, 2007

NEW DELHI -- Inside the chandeliered party hall of an upscale hotel, with its canopies of balloons and sparkly lights, three video cameramen and two photographers jostled like paparazzi to get a glimpse of the guest of honor.

Waiters in black tie waded through the crowd, serving endless silver trays of chicken tikka kebabs, grilled shrimp and samosas. Several DJs spun fast-tempo Punjabi pop that pulsated from refrigerator-size speakers. There were cocktails for the adults, and for the kids, cotton candy.

This was, after all, a birthday party for a 2-year-old -- little curly-haired Taisa Arora, to be specific. On a recent Saturday night, she wore her Strawberry Shortcake Mary Janes and a princess-like sequined outfit, and yawned as her grandmother cradled her amid the excitement of 125 guests, most arriving after 10 p.m. and only some of them children.

In India, weddings have long been extravagant celebrations of a lifetime, costing families huge sums. But with prosperity growing in urban India, more and more parents are spending exorbitant amounts on children's birthday parties -- sometimes in excess of $4,000 a bash.

"The birthday party is the new wedding in India, and the sky is the limit," said Rakesh Gupta, a party planner who has seen his business double in the past few years. "It's a serious industry now, and people want to spend lavishly and outdo each other. People in India don't like to save. They want to enjoy life and live for today after so many years of poverty and struggle."

For India's wealthier classes, birthday parties are a chance to network with business colleagues and to reunite relatives, bringing together overworked families from cities around the country. Perhaps most important, the parties are a source of pride for Indians looking to demonstrate their new wealth, as parents try to impress one another with opulent soirees.

The Indian economy has enjoyed record growth rates of 8 percent to 9 percent during the past three years, in part because the once-socialist country has opened its markets globally. The country has developed a large service industry, with the technology, pharmaceutical and biotechnology sectors serving international markets. Although India has the largest number of poor people struggling to survive on $1 a day, its middle class has more than tripled in the past two decades, according to the World Bank.

In cities, swanky stores hawk shiny bathroom fixtures and $2,000 Jacuzzis, and television ads show smiling Indian housewives buying new washing machines and moving into condo complexes.

When it comes to birthday parties, the change has been striking. Gone are the days of the quiet birthday visit with grandparents to a Hindu temple and a simple box of Indian sweets. Now there's the frazzled party planner to hire, invitations with calligraphy to buy, elephant and camel rides to plan, a sports or cartoon theme to pick out, and a moon bounce to choose.

Indian banks, which have long offered low-interest loans for weddings, now offer similar deals for birthday parties. And in a country of 1.1 billion people, where 32 percent of the population is younger than 15, party planners say the birthday industry might one day rival the wedding industry, which brings in $11 billion a year.

The parties are often more for the parents than for the children, a way for them to show their generosity -- and that they can afford to treat their friends, relatives and business partners to a lavish night out, in a country where social status is often linked to wealth.

At Taisa's bash, her father, a real estate mogul, shook hands and slapped the backs of relatives and business associates while a moon bounce was set up next to a merry-go-round. A tattoo artist -- the tattoos were temporary -- stood by, and a crew of chefs prepared more than 20 trays of Thai, Indian and Italian fare for a late-night dinner.

"We're proud parents. We want to celebrate in a big way," said Gagan Arora, 27. His wife, Shivali Arora, 24, with a tumble of freshly blow-dried curls and a pearl-stitched pink gown, cooed: "Some families in India have this kind of money now, so why not celebrate?"

During winter months, parties can include rides on elephants, ponies or camels, rock climbing, go-karting and miniature train rides. Puppet shows and magicians are year-round attractions.

Similar to bar mitzvah or bat mitzvah parties in the Jewish faith, Indian birthday parties usually feature elaborate themes -- typically the child's favorite hobby, superhero or cartoon -- emblazoned on napkins and cakes and carved into ice sculptures. (Harry Potter and Spiderman were huge this year, along with Barbie, a regular.)

Parents frequently compare invitations, regarding them as a kind of indicator of how fancy or plain the festivities will be. Also key is the all-important "return gift," or party favor, which tends to add a significant amount to an already steep bill.

"If you have money in this country, anything is possible," said Gupta, the party planner. "It's the best country in the world to be rich. But it's also the worst country in the world to be poor."

Indeed, India is a place of confounding contrasts. According to the United Nations, 42 percent of India's children are malnourished, a higher rate than in most African countries. Children are a fixture on bustling city streets, their hands outstretched for spare rupees.

Not far from the Arora birthday party at the Daffodils Hotel in New Delhi, barefoot girls just a few years older than Taisa performed cartwheels and twisted themselves into pretzel-like shapes as they begged for rupees, often tapping on car windows. "Hungry," they cried.

Indians themselves are not unaware of the contrast.

"In India, it's the fat kid in the city with excess and the skinny kid in the village living on prayers and grain crops, and it's a huge disparity," Anuj Nyyar, 26, who runs a DJ and party planning business for children's birthdays, said with a sigh. "But if anything, these birthday parties will keep getting bigger. People who have made it want to spend, and they are paying through the nose for these parties. Both realities exist in India, and we can't really judge parents for wanting to enjoy their wealth."

Some parents are rejecting the bigger parties as too materialistic and too far from old-fashioned birthday celebrations, and instead host a traditional lunch of kheer or rice porridge and maybe a cake.

"I'm no one to criticize people who can spend that kind of money on their kids. But I just feel it's a bit too much and too early. I don't think it's always the kind of fun a child, under say 8 or 9, is looking for," said Sushma Jain, 28, a primary school teacher in East Delhi, who has a 2-year-old. "If people have the money these days, maybe it's better to save in your child's name for the future."

Such frugality seems to be more the exception than the rule. Some parents say they feel intense party pressure from their children, who talk about whose bash had the best party favors (an iPod Mini per child is seen as the gold standard) and most impressive entertainment (it's not a real party without a merry-go-round). Others say the parties are simply fun and a way to enjoy the fruits of their hard work.

"With economic success has also come shocking lack of time for the urban Indian family to spend together," said Arpana Handa, 32, the sister-in-law of Taisa's mother. "The birthday party is another way of giving us this in our busy, modern lives."


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## Bushroda

*Tata Motors Profit Rises on Indian Currency's Gain*
By Santanu Choudhury and Thomas Kutty Abraham

Praveen Kadle July 31 (Bloomberg) -- Tata Motors Ltd., India's biggest truck maker, reported an unexpected increase in profit in the first quarter, buoyed by a currency gain that overshadowed lower truck and bus sales. 

Net income rose 22 percent to 4.67 billion rupees ($116 million) in the three months ended June 30 from 3.82 billion rupees a year earlier, the Mumbai-based company said in a statement today. That topped the 3.5 billion rupees median estimate in a Bloomberg survey of 16 analysts. Tata had a foreign exchange gain of 2.06 billion rupees. 

The truckmaker joins Jet Airways (India) Ltd. and Tata Steel Ltd. in reporting a foreign exchange gain after the rupee surged 6.8 percent against the dollar in the quarter, the biggest quarterly gain in 34 years. Reviving sales may hinge on the outlook for borrowing costs after rate increases damped demand from freight operators. 

``We are still concerned about higher interest rates and the slowdown in Tata's commercial vehicle sales,'' said Ambrish Mishra, an analyst at Man Financial Sify Securities India Pvt., a Mumbai-based brokerage. 

Tata Motors, which today reported its 17th straight gain in quarterly profit, has about 22 billion rupees of dollar- denominated loans, according to data compiled by Bloomberg. The foreign exchange gain in the second quarter compares with a loss of 455.8 million rupees in the year-earlier quarter. 

Sales in the quarter rose to 60.57 billion rupees from 57.5 billion rupees. 

*Rupee Gains *

The currency rose to as high as 40.215 against the U.S. dollar on July 24, the strongest since May 1998, making it the best performer this year of the 10-most traded Asian currencies. 

Higher loan rates in India, the world's second-fastest growing major economy, have deterred freight operators from buying new trucks and buses, slowing demand at Tata Motors's biggest business. 

The company also isn't able to raise prices enough to compensate for higher steel and aluminum costs because of competition from Hyundai Motor Co. and Suzuki Motor Corp. in the passenger car market. 

``Most operators who postponed their new purchases are waiting for the interest rates to correct,'' said Huzaifa Suratwala, an analyst at Mumbai-based Networth Stock Broking Ltd. ``The hike in interest rates has increased the cost of ownership for fleet owners.'' 

India's commercial banks have increased lending rates between 200 and 250 basis points since December. State Bank of India Ltd., the biggest lender, said April 7 it will charge its best borrowers 12.75 percent, the highest since April 1999. 

*Truck Sales *

Tata Motors' local truck and bus sales in the first quarter fell 2.3 percent from a year earlier to 61,633 units. Sales of the pricier and more profitable medium and heavy trucks declined 11 percent to 32,655 units. 

Passenger vehicles sales climbed 3.9 percent in the quarter to 51,840. Tata Motors, India's third-largest car and sport- utility vehicle maker, has tied up with Fiat SpA, Italy's largest automaker, to build a factory and sell new models in India. 

``The impact of rising interest rates is more in commercial vehicles than cars,'' said Dipak Acharya, who oversees the equivalent of $19 million in stocks at BOB Asset Management in Mumbai. Acharya owns Tata Motors shares. 

Shares of Tata Motors fell 1.1 percent to 699.3 rupees on the Bombay Stock Exchange today. The earnings were detailed after trading closed at 3.30 p.m. local time. The stock has declined 22 percent this year, lagging behind the 13 percent gain in the exchange's benchmark Sensitive Index. 

Vehicle sales are expected to rise in the coming quarters of the year ending March 31, Praveen Kadle, Tata's finance director, said at a press conference in Mumbai.


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## Bushroda

*Thailand-India free trade: the impact so far*
Bangkok Post, Thailand
AKE-AROON AUANSAKUL

The framework agreement to establish the Thailand-India free trade agreement (Tifta) was signed on Oct 9, 2003. Trade negotiations to move closer to full liberalisation are still continuing and are expected to be concluded by 2010. To accelerate the realisation of benefits, both countries agreed to implement an Early Harvest Scheme (EHS) covering trade in goods for 84 products. The Tifta-EHS covered three-year period between Sept 1, 2004 and Aug 31, 2006 and has now ended. 

At this stage, it is interesting to evaluate whether imports of any of the 84 items subject to tariff cuts resulted in trade diversion that may have led to a decline in the country's overall economic efficiency and welfare. This study attempts to empirically evaluate the impacts of post-Tifta-EHS tariff cuts on trade diversion using an econometric technique. 

The 84 items (Harmonised System [HS] code six-digit level) under the Tifta-EHS included fruits (fresh mangosteens, mangoes, durian, rambutans, longans); fishery products (salmon, sardines, mackerel); electrical appliances (window/wall air-conditioners, colour TVs, ball-bearings); precious metal and jewellery; polycarbonates, and more. Tariffs on these goods were cut by 50% on Sept 1, 2004, 75% on Sept 1, 2005, and eliminated entirely on Sept 1, 2006. 

The results of the study can be summarised as follows: 

1. Although India is a relatively small trading partner of Thailand (ranked 18th at $3.4 billion or 1.3% of Thailand's total trade in 2006), it holds immense promise based on its population and strategic location. 

2. Thailand incurred trade deficits with India from 2002-04 but had a surplus of around 10 billion baht in 2006. Post-Tifta-EHS evaluation found that total trade for all 84 product items increased by 40%, from 13.08 billion baht to 18. 38 billion baht over the Sept 1, 2004 to Aug 31, 2006 period. Thailand's exports in the categories covered increased by much more than its imports. 

3. The Post-Tifta-EHS tariff revenue loss for all 84 product items is estimated around 51 million baht per year which is minimal in comparison to the net gains from the overall trade surplus Thailand recorded. 

4. Only six out of the 84 items showed positive net imports from India during the period. Nonetheless, except for aluminium oxide other than artificial corundum, import shares of the other five products from India in the Thai market were averaging less than 10%, indicating that India was not a significant player in the products in question. They are: gearboxes (HS code 870840); semi-finished products of iron or non-alloy steel of rectangular (including square) cross-section, width measuring less than twice the thickness (HS code 720711); aluminum not alloyed (HS code 760110); other precious metal, whether or not plated or clad with precious metal (HS code 711319); and other appliances (HS code 848180) 

5. Moreover, only the import shares of four items _ gearboxes, precious metal, aluminium oxide, and other appliances _ trended upward for the 2003-06 period, implying the tariff reductions may have had positive impact on raising imports from India and probably at the expense of Thailand's other trading partners. The Philippines is important trading partner of Thailand for gearboxes while Japan, China and Austria export aluminium oxide. 

6. Nonetheless, results of the econometric analysis confirmed that only two of the six import items in question raised their import shares and caused trade diversion. They are the gearboxes and other appliance products. Increases in market shares of gearboxes and other appliance products from India in Thailand were found to have occurred at the expense of decreased market shares of other trading partners. For the gearboxes, the Philippines' export sector would be most affected whereas the Japanese export sector would be most affected for other appliance products exported to Thailand. 

The study recommended that although India is currently a small exporter of both products to Thailand, a continuation of zero import tariffs from India could definitely provide incentives and induce larger imports in the future, particularly for gearboxes where import elasticity value with respect to tariff was found to be greater than 1 (relatively elastic). 

The increased imports from India could occur at the expense of not only reduced government import tariff revenue collection from Thailand's other trading partners through import substitution effects, but also of reduced exports to Thailand of other trading partners, especially the Philippines. To offset an undesirable consequence, Thailand should promote and support domestic production of both products, particularly by foreign direct investment from India, Japan and other countries. 

Thailand is certainly benefiting over India with respect to Tifta-EHS as total exports to India have increased much more than total imports from India. Now that the early-harvest scheme has ended, Thailand should support a continuation and extension and propose to merge it into the broader Thailand-India FTA for the benefits of both countries. 

Authorities, however, should be very careful in listing the products to be included in the agreement, by examining the trade diversion impacts on the country's economy, efficiency and welfare. 

Ake-Aroon Auansakul is director of the research division at the International Institute for Trade and Development. The opinions expressed here are his own. He can be reached at akearoon@itd.or.th


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## Bushroda

*China, India becoming leaders in world economic growth*
Daily Times, Pakistan

MANILA: China and India are becoming the new engines of world economic growth by replacing United States and other developed countries, International Monetary Fund managing director Rodrigo Rato told a business conference in the Philippines.

He said China overtook the United States this year to become the biggest contributor to world economic growth.

For the first time, the largest contribution to global growth will now be made by China, he added.

Looking ahead, we expect this pattern of growth to continue ... we expect China and increasingly India  to grow in importance as engines of global growth. He said China would grow by more than 11 percent and India at around nine percent this year, with almost equal rates in the upcoming years.

 Apart from US, prospects in Europe and Japan remain good, Rato added, without giving specific figures.

The outlook for the global economy is generally good and the economic prospects of most countries in Asia are also good, he said.

At the same time, Rato warned that the oil market and capital flows can turned out to be critical issues foe these emerging economies.

Inflows of capital to emerging economies could complicate macro-economic management and expose the countries that receive them to an abrupt reversal of flows when sudden shocks occur, he added.


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## Bushroda

*Brocade Opens World-Class R&D Center in Bangalore, India*
*Center will Spearhead Development of Data Connectivity and Management Solutions for Global Markets*
July 31, 2007: 10:30 PM EST
CNN Money

BANGALORE, India, July 31 /PRNewswire-FirstCall/ -- Brocade(R) , the leader in networked storage solutions that help enterprises connect and manage their information, today announced that it has opened a world-class research and development facility in Bangalore. This opening will expand the company's presence in India and accelerate development of enhancements to its data center networking and management solutions for global markets.

"The establishment of the Brocade R&D center in Bangalore reflects our expanding global footprint as we meet the needs of companies and organizations around the world for solutions to meet the challenges of rapidly growing volumes of data," said Mike Klayko, Brocade Chief Executive Officer. "It also marks a significant milestone in the global growth of Brocade."

The Bangalore R&D center, housed in a custom-built facility with state-of-the-art infrastructure and equipment, is Brocade's newest R&D center. Bangalore will be a hub for the development of advanced technologies for data center networking and data management solutions.

The Asia/Pacific region represents tremendous opportunity for storage networking growth, with India and Hong Kong leading the charge. According to Gartner, in 2006, external disk storage grew 38 percent to 202 petabytes in the Asia/Pacific region (excluding Japan). And India saw the second-highest revenue growth for the region with 22.5 percent.

"In Bangalore we are able to find outstanding engineering talent with the right level of experience and expertise to develop our next-generation technologies," said Zahid Hussain, Brocade Vice President of Engineering. "Together with developers at existing Brocade R&D centers located throughout North America, and in Israel and China, the Bangalore team will drive development of new technology solutions designed to enable companies to connect and manage data more efficiently and reliably."

The new R&D center adds to existing Brocade relationships and presence in India. Brocade has a Center of Excellence relationship with the National Informatics Centre and engineering relationships with Wipro and HCL Technologies.

"Brocade has long been an important partner for us and we are excited to be working with a leader in network storage solutions," said S. Muralikrishnan, Vice President, Wipro Technologies. "Setting up an R&D center in Bangalore helps Wipro work more closely with Brocade to develop next-generation storage products."

"HCL congratulates Brocade for their new growth initiative in tapping into the Indian engineering talent as part of their global workforce," said Sandeep Kishore, Senior Vice President and Head of Hi Tech and Manufacturing, HCL Technologies. "Brocade's increased commitment to India will add a new dimension and depth to our relationship, and we wish them even greater successes in the coming years," he added.

*About Brocade*

Brocade is the leading provider of networked storage solutions that help organizations connect, share, and manage their information. Organizations that use Brocade products and services are better able to optimize their IT infrastructures and ensure compliant data management. For more information, visit the Brocade Web site at www.brocade.com or contact the company at info@brocade.com.

Brocade, the Brocade B-weave logo, Fabric OS, File Lifecycle Manager, MyView, SilkWorm, and StorageX are registered trademarks and the Brocade B-wing symbol, SAN Health, and Tapestry are trademarks of Brocade Communications Systems, Inc., in the United States and/or in other countries. FICON is a registered trademark of IBM Corporation in the U.S. and other countries. All other brands, products, or service names are or may be trademarks or service marks of, and are used to identify, products or services of their respective owners.


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## Bushroda

*Indian miracle continues*
Money Management, Australia 

Dubbed the Indian miracle, significant economic growth within India is offering Australian financial advisers and their clients vast and ranging investment opportunities, according to Dr Anand Sethi, economist and co-author of the acclaimed Doing Business in India.

Dr Sethi said Indias national companies, which are catering to its rapidly growing domestic market, should be a key factor for investors considering adding Indian stocks to their portfolios. 

Sectors like infrastructure, food and fruit processing and financial institutions (including non-banking) are seen as the leading sectors for investing at the moment, Dr Sethi said.

He added that with India becoming one of the leading emerging economies, emerging sectors including aviation and airports, retail and high-speed rail also provide an attractive option for investors.

However, when speaking about the investment risks present in India, Dr Sethi warned of fallout from Indias troubled political relationships with neighbours Pakistan, Afghanistan and Bangladesh.

Other current risks, according to Dr Sethi, centre on the escalation in fuel prices in Iraq and Iran, which India depends hugely on, and the shortfall in infrastructure development targets.

Dr Sethi will be one of the international keynote speakers at the sixth annual PortfolioConstruction Conference on August 15 and 16.

The conference, a two-day program of 31 sessions, aims to present debate on contemporary and emerging portfolio construction issues for professionals involved in the design, building or management of investment portfolios.


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## Bushroda

*INDIA'S LARGEST SERVICE PROVIDER, AIRTEL, DEPLOYS BUBBLETALK 'VOICE SMS' OVER FIXED LINE*
Telephony World (press release)

*Service Allows Customers to Send Voice SMS Messages from Fixed Line Phone* 

New Delhi, 31st July 2007: 'Voice SMS' pioneer, Bubble Motion has been selected by India's Number One Service Provider, Airtel, to deploy 'Voice SMS' over fixed line. This deployment means that Airtel customers will be able to send Voice SMS messages to any mobile - and soon they will also be able to send messages to other Airtel Fixed Line customers.

To use the service, the customer dials * followed by the mobile number of the customer they wish to send the Voice SMS to. The recipient then receives an SMS alert on his mobile phone, notifying them that they have a new Bubble message. The recipient then retrieves the Voice SMS by dialing *0* from their mobile.

Voice SMS is a phenomenon which has gained a great deal of traction in recent months as more and more service providers deploy BubbleTALK services. The ability to include more emotional content in a short message than other messaging services such as IM, SMS and email, has made Voice SMS messaging a popular channel amongst the youth market. Voice SMS has also proven very popular with many groups who find SMS inconvenient, as well as those whose first language is not supported by text entry on a phone keypad.

Sunil Coushik, President and Co-Founder of Bubble Motion said: "Airtel has become the number one service provider in India on the back of service innovations, which have successfully captured the imagination of India's wired and wireless customers. By deploying the best Voice SMS solution on the market, Airtel is staying one step ahead of its competition."

Bubble Motion, a Sequoia Capital India investee, has been winning plaudits recently for its Voice SMS services. BubbleTALK was recently honored as being the Best Consumer Application Award at the Mobile Messaging Awards. The BubbleTALK implementation at Vodafone Egypt was also recently named as being one of the top ten non-voice revenue-generators by telecoms analyst group Analysys.

*About Bubble Motion*

Bubble Motion is the award-winning pioneer of 'Voice SMS' services for mobile operators. The company allows operators to create a new revenue stream within 3 weeks, using their existing infrastructure with no cannibalization of existing services. This allows operators to create a new core service.

BubbleTALK, the carrier grade intentional voice messaging service provided by Bubble Motion is the worldwide standard for intentional voice messaging or 'voice SMS'. With 8 mobile operator partners, in 6 countries, and local points-of-presence in an additional 31 countries, BubbleTALK is available to over 1 billion people with local-dial access.


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## Bushroda

*Satyam Signs Two Major IT Contracts with FIFA*
31 July, 2007 16:52:06 
ARNnet, Australia 

International football organisation chooses global consulting and information technology services company to deliver FIFA Extranet, Intranet, and customised Event Management System with Match AG 

Sydney, July 31, 2007: Satyam Computer Services, Ltd. (NYSE:SAY), a leading global consulting and information technology services company, announced today that it has signed two multimillion-dollar contracts to support FIFA and its major forthcoming events. 

Thanks to the strength of its technical capabilities and flexible approach, Satyam has not only been selected to develop a customised Event Management System for one of the worlds premier sports organisations, but it has also been chosen to build an Extranet and Intranet for FIFA over the next 12 months. Satyams partnership will also include full, uninterrupted support for both solutions for FIFA, until the final whistle of each game. 

Working primarily from FIFAs Zurich headquarters, Satyam will provide in-country support for matches. It will also have teams work from offshore locations to enable lower costs and optimised CMM Level 5 quality. 

Clearly, FIFA organises incredibly large-scale, high-profile tournaments. In fact, we host the worlds most widely viewed sporting events, with as many as 28 billion people watching the 2006 Tournament. As such, we cannot afford even a seconds downtime, even during the huge usage spikes throughout games, said FIFA head of information technology solutions Michael Kelly. That is why we have chosen the reliability, flexibility, and reusability of Satyams applications. This is the start of a long-term relationship that will see Satyam working closely with FIFA over the next few years. 

We are delighted to have been chosen to deliver such critical applications for FIFA, and are committed to ensuring the success of managing its event logistics and Extranets/Intranet platforms, said Dr. Keshab Panda, the senior vice president, director, and head of Satyams European operations. 

*About Satyam Computer Services* 

Satyam (NYSE: SAY), a leading global business and information technology services company, delivers consulting, systems integration, and outsourcing solutions to clients in 20 industries and 57 countries. 

Satyam leverages deep industry and functional expertise, leading technology practices, and an advanced, global delivery model to help clients transform their highest-value business processes and improve their business performance. The companys 42,500* professionals excel in engineering and product development, supply chain management, client relationship management, business process quality, business intelligence, enterprise integration, and infrastructure management, among other key capabilities. 

Satyam development and delivery centers in the US, Canada, Brazil, the UK, Hungary, Egypt, UAE, India, China, Malaysia, Singapore, and Australia serve 570* clients, including one-third of the US Fortune 500. For more information, see www.satyam.com.


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## Bushroda

*Hi-tech borders with neighbours soon*
1 Aug, 2007, 0117 hrs IST,Nirmala Ganapathy, TNN

NEW DELHI: Imagine airport-like facilities along the border with Pakistan, Nepal and Bangladesh! Well, that might just become a reality. To facilitate movement of goods and people along border points, the government is actively pushing the idea of integrated check posts with neighbouring countries. 

India has already agreed to set up state-of-the-art integrated customs point with Nepal along four major entry points on the border and is now going to propose a similar arrangement to Pakistan. 

This matter will be put forward by India during the two-day Indo-Pak commerce secretary-level talks. The idea is to have an integrated customs point at Attari-Wagah and Munnabao-Khokrapar to replace the current antiquated system. 

Right now, it takes over 12 hours for passengers travelling through the Attari-Wagah border to complete formalities. It is a similarly long, painstaking effort to transport goods across the border. Goods have to be off-loaded from trucks and then carried by porters to the other side. 

Sources said this is a good time to push for upgradation of infrastructure as there is interest on both sides and bilateral trade has been growing rapidly in the last four years. An indication of this is that Pakistan is building a six-lane highway on its side of the border. 

The idea is to upgrade infrastructure at check posts to international standards, which includes immigration and security checks at one point of entry on each side of the border. 

Rites have already done a detailed project report on this proposal and this will be shared with the Pakistani side. This is among the set of fresh ideas that India will propose to Pakistan when commerce secretary G K Pillai and his Pakistani counterpart Syed Asif Shah hold discussions. 

The discussions with Nepal on the integrated customs point are in an advanced stage. Both sides have agreed to set up high-tech customs point at four sites - Raxaul-Birganj, Sunauli-Bhairahawa, Nepalgunj-Nepalgunj and Jogbani-Biratnagar. 

Sources said the Raxaul-Birganj post will be the first of the block. After six rounds of meetings, it has been decided that India will construct the posts at both sides at a cost of Rs 100 crore within 36 months after the project starts. Sources said land acquisition has been completed on both sides and that the government will soon start the tender process. 

According to the agreement between India and Nepal, the construction of the checkpoint will start in a year.


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## Bushroda

*High growth to continue: Reddy*
1 Aug 2007, 0337 hrs IST,TNN

NEW DELHI: Despite deceleration in corporate sales and profit growth, the high growth rate in industrial and service sector will continue, said RBI governor YV Reddy in the first quarter review of annual statement on monetary policy. 

He said domestic economic activity has continued to expand at a strong pace and there are indications that growth impulses are getting broad-based. The recent gains in bringing down inflation and stabilising its expectations should support the current expansionary phase of the growth cycle. 

Given the current momentum of expansion, despite evolving uncertainties in recent weeks, growth in industrial and service sectors  which constitute over 80% of the economy and contribute more than 94% of the GDP growth  is expected to sustain, the policy statement said. 

RBI maintained its GDP growth projection for 2007-08 at around 8.5%. The governor also noted that there is some deceleration in sales and profit growth, as against the levels recorded in the preceding year  may be because of increase in input and staff costs. 

Select private non-financial companies indicated that sales in 2006-07 grew at 26.2%  highest since the 1980s. The pick up in the activity in 2006-07, the statement noted, was aided by improvements in operational efficiency, increased plant automation, cost control through better product mix, capacity utilisation and economies of scale, rising incomes from financial activity and return of pricing power. 

The net profit of these companies was high at 45.2% as compared with 24.2% a year ago.


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## Bushroda

*Record works under NHDP this year*
Animesh Singh / New Delhi July 31, 2007 

The Ministry of Road Transport and Highways is planning to award contracts worth Rs 46,000 crore for 7,084 km of national highways (for four-laning and six-laning) in 2007-08. 

This is the highest yearly target set by the ministry since the National Highway Development Programme (NHDP) started by the National Highway Authority (NHAI) in 1999. 

The ministry is also aiming to complete the upgrade of 2,885 km of highways during this fiscal. A senior NHAI official said work for only 1,790 km of highways was awarded in 2006-07. 

The Public Private Partnership Appraisal Committee (PPPAC) of the ministry has now cleared an 882 km stretch for six-laning under phase V of the NHDP at a cost of Rs 6,293 crore. Ministry sources said with the toll policy cleared, the ministry would go all out to upgrade as many highways as possible. 

In fact, a section of officials had said the PPPAC, set up in October 2005, led to a slowdown in the awarding of the contracts. In 2005-06, the ministry awarded contracts for a 4,665 km stretch. The lull witnessed in 2006-07 (when contracts for only 1,790 km of highways were awarded) was attributed to delays by the PPPAC. 

However, the ministry is trying to make up for the lost time, sources say. 

The ministry has divided the 7,084 km stretch, to be awarded this fiscal, into three parts. Around 3,000 km stretch will be six-laned, while the rest will be four-laned. 

The ministry is in the process of preparing detailed project reports for the projects, for which the PPAC is yet for clear the bids.


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## Bushroda

*India Central Bank Tightens Money Policy*
FORBES, NY
By RAJESH MAHAPATRA 
07.31.07, 12:19 PM ET

NEW DELHI - India's central bank on Tuesday ordered lenders to hold a larger share of deposits in cash and took other measures to counter inflationary pressures arising from a surge in foreign money.

The Reserve Bank of India increased the cash reserve ratio - the proportion of deposits that commercial banks must hold in cash - from 6.5 percent to 7 percent, but kept its key interest rates unchanged. It also scrapped an existing cap on the money it can drain from the banking system.

The decision to persist with tight money policy hit banking stocks and bonds, and disappointed middle class borrowers battling higher lending rates.

It also underscored the risks confronting countries like India and China, where rapid economic growth has boosted demand and fueled inflation, a problem that is further aggravated by a surge in foreign capital into these countries.

In India, a series of interest rate hikes and tight money measures has seen credit growth slow and the inflation rate drop in recent months, but the central bank doesn't appear to believe that it is time to loosen monetary policy.

"We believe there is still a fear of higher inflation," said Governor Y. Venugopal Reddy. "Price stability is important for growth."

Reddy said he was also taking cue from the actions of central banks in many other countries that faced similar challenges.

On Monday, China announced measures to tighten bank credit and cool its sizzling economy, ordering a half percentage point increase - the sixth such hike this year - in the proportion of reserves that lenders must keep with the central bank.

"Risks from global developments continue to persist, especially in the form of inflationary pressures, repricing of risks by financial markets and danger of downturns in some asset classes, with implications for emerging market economies," a statement from the Reserve Bank of India said.

Also, as India's economy increasingly gets integrated with the global economy, the inflation rate at home must come down to the levels prevailing in developed economies such as the United States and Europe, Reddy said.

Inflation is currently hovering around 4.5 percent, down from a high of 6.7 percent reached in February but much higher than international levels.

Middle class borrowers, who have seen interest rates on housing and other consumer loans rise sharply over the past one year, were disappointed.

"The RBI's hawkish policy stance has likely torpedoed expectations that some commercial banks may soon cut their retail rates," investment bank Lehman Brothers (nyse: LEH - news - people ) said in a statement.


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## Bushroda

*Road of new rich littered with potholes*
Financial Times, UK 
By Joe Leahy in Mumbai
Updated: 8:10 p.m. ET July 31, 2007

To see signs of the increasing spending power of India's affluent classes, a visitor need only drive along the main western road into Mumbai.

After passing the "Auto Hangar" selling Mercedes cars, the visitor will see the Rolls-Royce dealership and then, further on, a showroom that is still under construction but above which the word "Porsche" is already clearly visible.

The sudden emergence in India of Porsche, the ultimate symbol of brazen consumption, is raising eyebrows in a country in which, not so long ago, the elite drove the indigenous Hindustan Ambassador.

"People have had the money for a very long time but it is only now that they are starting to feel more comfortable spending it locally rather than abroad," says Ashish Chordia, chief executive of Porsche Centre India.

The showroom, part of a push by Porsche into India's four biggest cities, is one example of the invasion of the country by high-end carmakers and luxury retailers. 

Leather goods maker Louis Vuitton and a variety of other LVMH brands are already present in India and a flood of others, such as elite Italian suit maker Brioni, are setting up shop in the country.

Capgemini and Merrill Lynch estimated in their annual World Wealth Report that the number of people with net assets of $1m or more in India reached 100,000 last year, up 20.5 per cent from a year earlier. It was the second fastest rate of growth in the world, after Singapore's 21.5 per cent.

As long as India's economy grows at rates of more than 9 per cent a year, the country is expected to continue generating wealth on this scale, analysts say.

Alex Kuruvilla, managing director of Condé Nast India, which is launching a domestic edition of its flagship magazine Vogue in September, says that during market research, the magazine discovered two types of luxury consumer.

There is the "old money", the people who for decades have shopped and holidayed overseas. They tend to be as discerning as their counterparts anywhere.

Then there are the nouveau riche  the new industrialists, professionals, entrepreneurs and others  who are not as familiar with luxury goods but have the cash to experiment.

Describing the average, nouveau riche consumer, Mr Kuruvilla says: "She's got the money. She can come into Delhi and pick up half a dozen of those $2,000 bags and that makes her a very important person as far as the market's concerned."

He envisages introducing more niche magazines as the market develops, such as Brides. India's wedding market is worth $10bn and is growing at a rate of 25 per cent a year.

The industry faces a number of challenges, however. Duties on luxury products, such as watches, can be as high as 60 per cent plus state taxes and value-added tax, making them uncompetitive against overseas prices, according to research by retail advisory firm Savigny Partners.

There is also a paucity of quality retail space outside the luxury hotels. Ermenegildo Zegna, the luxury menswear retailer, discovered this when it opened its first store in India in 2000 in one of Mumbai's leading malls. 

It was later forced to close because of the "deteriorating brand environment", which included a McDonald's opening next door, according to Savigny. It reopened this year in Mumbai's Taj Mahal Hotel.

New luxury developments are on the way. DLF, India's largest property developer, is building the Emporio luxury shopping mall in New Delhi. Meanwhile, the Wadia Group is planning to create a 25-acre development in Mumbai aimed at high-end retailing.

But life for the conspicuous consumer remains challenging in India. Mumbai, for instance, lacks the necessary infrastructure for sports cars.

While Mr Chordia says the company's sales have increased from about 40 units a year after it opened in 2004 to nearly 200 today, about 60 per cent of these are of the Cayenne sports utility vehicle.

Selling for up to Rs11m ($275,000), this is more practical than the Porsche sports cars, which cost up to Rs14m and are more vulnerable to abuse on Mumbai's potholed streets, where traffic often moves at walking pace and cars bump each other jostling for space.

In addition, the lack of parking often forces car owners to have their driver follow behind in a back-up vehicle to take care of the Porsche when it is not being driven. "There is always the worry a valet will not handle the car properly," says Mr Chordia.


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## Bushroda

*From lean years to the bulge bracket*
INDEPENDENCE SPECIAL/ EXECUTIVE LIFESTYLE
Kanika Datta / New Delhi August 01, 2007 

When M M Sabharwal joined Dunlop as a management trainee in early 1947, his salary was a princely Rs 75. Sent to England for training  Dunlop was UK-owned in those days  he returned a few months later when India was an independent country. 

Later, his salary rose to Rs 700, which was considered decent in those days. 

In 1961, P M Sinha started out in Esso, the oil company that was later nationalised to become HPCL, on a monthly salary of Rs 710. When he joined Levers seven years later, his monthly salary was Rs 2,410. 

On the whole, executive pay and perks in the India imbued with socialist values nowhere matched the compensation packages of today at any level. For instance, a starting salary of Rs 75 for a management trainee then would have been equivalent to Rs 900 today  way behind the Rs 20,000 that even a call centre rookie is paid. 

The explosion in executive pay in India Inc is a mid-nineties/early-2000 trend, a product of the urgent need for talent in a rapidly growing economy. Much has been written about the humungous CEO pay packages today  Rs 1 crore to Rs 3.5 crore a year, for instance, is considered par for the course. 

But CEOs and directors in the days preceding liberalisation were, on the whole, an undercompensated tribe. This was because till 1986, CEO and directorial salaries were, like everything else in the economy, government-controlled. The unwritten reason was that the government did not want significant salary differentials between bureaucrats and corporate executives. 

Thus, Sabharwal rose to become head of Dunlop. His salary? 

Rs 7,500 a month, the maximum ceiling imposed by the government. This ceiling was relaxed in the mid-seventies to Rs 10,000 a month, but only for about a year after which the earlier ceiling was re-imposed. 

There were limits on directorial salaries. For instance, when Sinha become a director on the Levers board in 1981, his salary was Rs 60,000 a year. This was higher than the Rs 48,000 a year that bureaucrats earned, but hardly qualified as bulge bracket. 

High taxation rates  at one time they touched the high nineties  meant that the low salaries were compounded by low take-home pays. Taxes were extremely high  and they included wealth tax, income tax and surcharges, Sabharwal recalls. 

As a result, corporations looked at various ways to compensate their senior managers. Many unlisted proprietary companies, aided by opaque accounting standards, simply paid their executives under the table. The larger listed companies offered lavish perquisites. These came in the form of large houses, company car and drivers, and a set of allowances  servants allowance, furnishing allowance, travel allowance  that required armies of clerks to administer. 

But perks were mostly tax-free so they allowed senior executives to enjoy living standards that were significantly above their means, so to speak. This was evident in the sharp diminution in CEO lifestyles once they retired. Both Sabharwal and Sinha say that there was little money to save or invest in homes as even junior executives do today. 

Sinha recalls being unable to raise the money in 1972 for a house in New Delhis Defence Colony that cost Rs 1,60,000 and was being offered in instalments. That was the year the government imposed price controls on commodities, so Levers wasnt doing well and couldnt offer loans. 

Sinha also recalls that the controls on directorial salaries meant that direct reports were often paid more because there were no limits on their salaries. 

The other (legal) way to get round the low-pay-high-tax trap was to alter designations. Thus, in the mid-eighties, Levers set up a management committee which basically did the same work as the board, only its members were designated vice-presidents. Being outside the purview of the Companies Act, vice presidents could be compensated more generously. 

The catch was that the government stipulated that companies had to have a chairman and at least three directors, so membership to management committees was limited in that sense. 

By the mid nineties, things had changed. Salaries really started taking off from 1994-5, says Sinha, who was CEO of Pepsi India from 1992 to 2002 and says his compensation was significantly better than his Levers directorial salary. 

Tax reforms started by Manmohan Singh in the early nineties swept many of yesterdays tax-free perks into the tax net, a process that reached its apogee with Chidambarams fringe benefit tax. As a result, salaries today are consolidated and more transparent. 

Second, with stock option schemes, companies are able to offer their senior managerial talent rewards that are tied to company performance and, although they are taxed, hold out a promise that is far more lucrative and lasting than the lavish perks of yesteryear.


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## Bushroda

*Nvidia development centre opened in Hyderabad*
Special Correspondent 

HYDERABAD: Nvidia, a US $ 4 billion fabless semiconductor and graphics solutions company, opened its sophisticated Hyderabad Development Centre at Nanakramguda on Tuesday. President and CEO of the company Jen Hsun Huang inaugurated the facility.

Mr. Huang said that the company, which currently employed 800 people in India, would expand its operations in the Asia-Pacific region. 

He said the company was growing fast in the region and was expecting a significant contribution towards development and design from India. 

He said that Indian technocrats had their share of contribution in the companys phenomenal growth in the last 14 years. 

"In fact, their number is so big that soon some one may comment that it is any Indian company," he said. 

Nvidia acquired PortalPlayer, a technology solutions provider for digital devices, which added significant capabilities in chip design. In fact, Nvidia wanted to provide all the features of a personal computer in mobile devices to produce a mobile computer. 

PortalPlayer had developed all personal computing capabilities on a single chip, he said.


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## Bushroda

*Ranhill awarded RM2.8b India jobs Contracts involve two power plants*
Malaysia Star, Malaysia 
Jul 31, 2007

PETALING JAYA: The Ranhill group has been awarded construction contracts worth a total of RM2.8bil involving two power plants in India. 

The larger contract, worth US$590.5mil (RM2bil), was for a power project in Korba District in the state of Chhattisgarh, while the other, valued at US$242.3mil (RM820mil), was for a power plant in Cuttack District, Orissa, Ranhill Bhd told Bursa Malaysia in two separate announcements yesterday. 

In the Korba project, the company said its wholly-owned subsidiary, Ranhill Engineers and Constructors Sdn Bhd (Ranhill Engineers), was awarded the contract by Dheeru Powergen Ptd Ltd. 

The contract is for the provision of engineering, procurement and construction (EPC) for the planned power plant, comprising US$172.5mil for onshore costs and US$418mil for offshore costs. 

Under the EPC contracts, Ranhill Engineers scope of works include design, engineering, material selection, supply to site, construction and commissioning for the complete plant and equipment. 

These contracts provide a good opportunity for Ranhill Engineers to make inroads into the Indian market, which offers many opportunities with its expanding economy and buoyant power industry. They would also enable Ranhill Engineers to expand its power division, the company said. 

In the Orissa project, Ranhill Engineers and Ranhill (India) Pte Ltd accepted EPC contracts for a 300MW coal-fired power plant that would be developed by KVK Nilachal Power Pte Ltd. 

Raw water for this plant will be drawn from the Mahanadi River, located about 7km from the project site, while coal linkage will be obtained from Talcher of Mahandi coalfields. 

The EPC works for this project are expected to commence by the last quarter this year, with completion scheduled within 33 months from Notice to Proceed. 

These Indian power plant projects further reinforced Ranhills position as a burgeoning player in the international engineering and construction industry, the company said.


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## Bushroda

*Back to India*
FORBES, NY
Robyn Meredith

Harsh Manglik spsent 35 years building his career in the U.S. Then he went home.
On a starry night 55 years ago, deep in a remote forest of northern India, a 4-year-old boy nicknamed "sher baccha" (Hindi for "tiger cub") rode safely in the arms of his father, who carried him into the moist air. "Can you hear that?" the boy's father asked. Then it came again: a deep, threatening rumble from a mile away. "That," his father said, "is a tiger."

The father was Ved Mitra Manglik, a towering figure famous for building dams and irrigation projects critical to the development of postcolonial India. He had dragged his family to this remote outpost, a hundred miles and a two-day trek from the nearest railroad station. No schools, no roads, no running water. He would always sling a rifle over his shoulder before stepping out of the tent that served as the family home. His son, the tiger cub, is Harsh Manglik, 59, chief of Accenture (nyse: ACN - news - people )'s thriving India business and overlord of 35,000 employees--4,000 more than the $16.7 billion American consulting giant employs in the U.S. Five years ago the firm employed only 800 people in the country. In his own way Manglik is helping to build modern India, just as his late father had done half a century before him. "It is heady to think you'll have a role in shaping things and seeing your fingerprints on it," Manglik says. "The future is being designed."

Yet Manglik long ago left behind India and the $100-a-month job he got after graduating from the Indian Institute of Technology Kanpur to seek a better career in the U.S. And for most of his 35 years in America he doubted he ever would move back to his homeland. Instead, he got a graduate engineering degree at Case Western Reserve University, followed by an M.B.A. at Carnegie Mellon. He became a U.S. citizen and climbed the ranks of big names in tech--Booz Allen, United Technologies (nyse: UTX - news - people ), Accenture, IBM, Symantec (nasdaq: SYMC - news - people ).

And then Manglik shocked his wife and two grown daughters and his relatives in India by doing the one thing they never expected: He moved back to India. He rejoined Accenture in September 2006 to run its far-flung India business from Bangalore, overseeing the hiring of 1,000 new employees a month, expanding service to U.S. clients and wooing Indian companies that could become the global giants of tomorrow.

"We know it is going to be big, and we know we have to get in now," he says.

Ever more executives, engineers and salesmen, India-born and U.S.-trained, are returning to their homeland to cash in on the Asia boom. The same is true for returnees to the once backward but now surging economies of China and Vietnam. In India these returnees are known simply as NRIs (for nonresident Indians); in Vietnam they are called Viet Kieu, meaning "overseas Vietnamese." In China they are "sea turtles," or Hai Gui Pai, although some jealous Chinese who never left dub these new arrivals Hai Dai--"seaweed."

Some 20,000 people of Indian descent have returned in the past two years, says Kiran Karnik, president of India's Nasscom, a tech trade group. Last year 40,000 returnees resettled in China, up from 7,000 in 1999, says David Zweig, a professor at Hong Kong University of Science & Technology. In Vietnam the government has eased visa requirements and investment restrictions to encourage the flow back, and since the 1990s thousands of Vietnamese have returned.

India's return tide started with the tech bust in 2000, when many Indians working in California lost their jobs; the joke then was that B2B meant not "business to business" but "back to Bangalore." The trend grew as U.S. companies began sending data processing and call center work to cheaper labor markets in Asia and India.

Accenture runs four small research labs around the world, and the newest one was set up in Bangalore in November 2006, two months after Manglik arrived there; it will have a hundred researchers in three years. Manglik is hiring 2,000 management consultants in India to bid for more gigs. "India is a key country for Accenture, a critical element in our global delivery network" and "integral to our growth strategy," says William D. Green, Accenture's chief executive. He personally wooed Manglik, who had put in two years at the firm before leaving in 1992, to rejoin and run India operations last year.

To use a phrase uttered by India's first prime minister, Jawaharlal Nehru, on the night India won its independence from Britain in 1947, for Manglik it was a long delayed "tryst with destiny." Like Gandhi, Manglik's grandparents on his mother's side had been jailed by the British for fighting to free India from colonial rule.

But Manglik would spend most of his adult life in the U.S., and with each promotion any thought of a permanent return to his homeland faded a bit more. "When I left India [in 1972] I was very clear I wanted to come back," Manglik says. "As I progressed in my career, it began to recede to the background." His father and mother seemed to accept this. "Fathers are heroes to most children--particularly to boys," he says. "But he brought me up to be independent. Never once did he say, 'Why don't you stay here?'"

He lived in Washington, D.C. , New York and Connecticut; in 1981 he married an Air India flight attendant. They settled in northern California and raised their two daughters there (neither of whom speaks Hindi). Every three years Manglik and his wife brought their American children with them to visit family in India.

As India's high-tech sector boomed in the build-up to the Y2K scare (the computer glitch that later fizzled), Manglik began to imagine returning to India once his daughters finished college. The scenario grew more real as his once swashbuckling father, in his 80s, had a stroke in 2004.

One summer afternoon in Delhi, as the father lay in bed, his health in rapid decline, Manglik's sister Kalpana visited his bedside to read him a passage she had penned in a biography she was writing about him. She wanted to describe how he felt about the long absence of Harsh, the only one of his five children to leave India. She voiced a hope that their father had harbored silently:

"I know my son will come back, because he knows his history is in the dust of India. One day he will know that this dust is his mother." She paused, waiting for her dad, ever stoic, to speak. He could not. His eyes filled with tears, and finally he managed to say, "I could not have said it better."

A few days later Kalpana read the passage over the phone to her brother, who was up late at night at his home near San Francisco. She listened for a reaction, from 7,690 miles away, but could hear only silence. "He didn't say anything," she says now. "He is the last person to cry."

Within a week Manglik visited her and their father in Dehra Dun. He began flying from San Francisco to India more often, each time finding the country modernizing before his eyes. His father died in September 2004, and Manglik attended the funeral, watching his dad's ashes sink into the same stretch of river where the elder Manglik had swum as a boy. A notion began to gnaw at him.

"My father never said it, but I do wonder what he thought about the fact that there I was, somewhere else, building my career, and whether I was being selfish."

And so when Accenture's chief, Bill Green, called him one day in August 2006 to entice him into quitting Symantec to take a job at Accenture--maybe a post running India?--Manglik's answer came quickly: "When do I show up?" He began his new job a month later.

The Mangliks moved to Bangalore in September 2006, and for months they lived out of a hotel room, having left behind their two grown daughters. This month they move into their new home, an apartment in central Bangalore. Manglik's wife, who had gone by the nickname Sally since she was a girl, has reclaimed her Indian name, Madhuri, meaning "sweetness."

Bangalore, a place of palm trees, traffic jams and tech entrepreneurs, is as close to Silicon Valley as you can get in India. It takes Manglik an hour, in a chauffeured Toyota (nyse: TM - news - people ) Corolla, to navigate the 9-mile drive to work each morning. "I've adapted to that," he says. "I make my phone calls in the car."

Past the shopping mall with a Citibank and Sony (nyse: SNE - news - people ) and Adidas (other-otc: ADDDY.PK - news - people ) shops, a row of office towers houses IBM, EMC and Oracle (nasdaq: ORCL - news - people ). Just past the Hindu temple lies his destination, the glass-and-concrete office complex housing Accenture India's Bangalore hive.

The brightly painted hallways are crammed with new hires in a rush, high-potential prospects who, in Manglik's generation, had to leave India if they wanted to exploit their technology degrees. But Manglik says he is lucky to be back in the land he left 35 years ago. "These are not even once-in-a-lifetime opportunities," he says, "because you don't usually get the chance, in an entire lifetime, to shape your country."

His father couldn't have said it better.


----------



## Bushroda

*Waking The U.S. Giant*
FORBES, NY
Robyn Meredith 
07.31.07, 6:00 AM ET

*Before our eyes, two giant nations--India and China--are simultaneously embracing both capitalism and globalization. The world economy is being transformed as a result, as Forbes Senior Editor Robyn Meredith explains in her new book, The Elephant and the Dragon: The Rise of India and China and What it Means to All of Us ($26, W.W. Norton, 2007) . This is the final excerpt from the book, which we have been serializing throughout July. *

With both China and India now open for business with the West, more than 1 billion workers earning dramatically less than Westerners have suddenly been added to the world's labor pool--including 6.8 million college graduates a year. 

Suddenly, Americans must compete for their jobs with much of the rest of the world, and are learning the hard way that they have no automatic right to earn 10 times more than everyone else on the planet for the same work.

India and China are rising so breathtakingly fast that they inspire fear--fear of the unknown. Unless America and Europe make changes, they risk decline even as their economies grow more interconnected with those of the fast-growing Asian giants.

The West cannot afford complacency. "Americans have to get more competitive," said Sybase (nyse: SY - news - people ) CEO John Chen. "We know how to do this; we just need to get it done." Former Treasury Secretary Robert Rubin agrees that the U.S. urgently needs to prepare for the increased competition from the East. "It is the greatest challenge since the emergence of the U.S. over 100 years ago," Rubin said.

Rubin and Chen are hardly alarmists, but they see the U.S. sailing blithely into the big waves of new competition almost entirely unprepared. Everyday families--as well as the U.S. government--have been spending well beyond their means. 

Just when the U.S. should be beefing up its educational system, voters have tolerated--and federal, state and local governments have allowed--the failure of many public school systems to educate their students even at a basic level year after year after year. 

Companies have become more and more focused on the next quarters results instead of long-term strategy during the very time that the re-emergence of India and China is roiling the global business landscape. Like the federal government, companies have cut back on basic research spending at a moment when innovation may be the only means for staying ahead. 

Today's challenge is to ready the nation for the coming wave of stiff competition from India and China. What the U.S. must do is clear: It must strengthen its educational and economic foundations and foster the innovation that will keep the U.S. lead in the technology that underpins so many parts of the nation's culture and economy. Now is the time for the U.S. to recognize the threat to American standards of living and to resolve to raise its game and compete on the new global terms.

The stakes are high: Without dramatic changes at the personal and government level, standards of living could fall as more and more white-collar as well as blue-collar jobs move overseas to hungrier, hard-working, lower-paid Indians and Chinese.

Make no mistake: The U.S. doesn't have a billion people, but it has enormous advantages and resources when it comes to competing in the world economy--even one in the midst of a historic shake-up. 

The American system is renowned for its ability to foster the kind of creativity and flexibility that has helped it rise above past challenges. Those are the traits that helped America send a man to the moon after President Kennedy called on the nation to concentrate its efforts. 

Americans must be ready for disruption and willing to undergo retraining to upgrade their skills and to be ready to change careers to jump on new job opportunities when they arrive. While the free market should be allowed to work, both the government and corporations must install a sturdier safety net for those whose livelihoods are disrupted by the enormous--and inevitable--changes afoot.

The U.S. is the world's largest, strongest, most resilient economy by a good measure. Americans must embrace that, and walk tall into the ways of a new world shaped by the rise of India and China. There is one thing impossible for any company to move overseas, and difficult for other nations to duplicate: America's essentially scrappy culture of thinking of, funding and bringing to market new ideas and ventures--its people's inventive, can-do mindset. Americans are at their best as underdogs.

So let the rise of India and China be a catalyst to re-establish America's competitiveness. Let it be this generation's space race. If inward-facing India and Communist China can transform themselves and face the world, so can the United States of America.


----------



## Bushroda

*Two of Mumbai's oldest rail terminuses to get a new look* 

Mumbai, July. 30 (PTI): The Indian Railways is set to give two of the city's oldest railway terminuses, Chhatrapati Shivaji Terminus and Dadar, a new look with more passenger amenities in the near future. 

Three new platforms and passenger amenities of the CST were expected to be opened to the public this September, a project which has cost the railways Rs 94 crore, while beautification work of Dadar station is scheduled to begin shortly, railway official said. 

The CST, a World Heritage site built in 1888 in south Mumbai, is one of the most enduring sights of the city. The new amenities including additional booking offices, new waiting halls and better parking facilities were expected to add charm to the place, he said. 

The three platforms, which were originally scheduled to be ready by March 2007, will be long enough in keeping with the Railways plan to extend the length of outbound trains to 24 coaches. 

Among other unique features, it will also have a lift to carry handicapped persons from one platform to another, the first in any railway station in the city. 

Railway authorities also said that work to improve the appearance of the Dadar station, a major halt for most outbound and suburban trains, will begin soon and a budget of Rs 2 crore had been sanctioned for its beautification. 

"The facade of the station is to be modernised while additional passenger conveniences will be provided on the platforms," Division Railway Manager J N Lall said. 

He said that the authorities would also take up the extension of some of the platforms on the suburban tracks in order to ensure that they were compatible with the longer 12-coach train that are to be introduced soon.


----------



## Neo

July 31, 2007 

*Indian demand for planes revised up​*
NEW DELHI, July 30: US aerospace giant Boeing on Monday revised up its estimate of the commercial aircraft India would need in the next two decades to 911 from 856, but added demand would be far below Chinas.

The new order projection is worth more than $86 billion, compared to a previous estimate of $72 billion last year, said Dinesh Keskar, Boeings senior vice president in India.

The increased projection is supported in part by robust economic growth, and increasing demand for domestic and international travel and ongoing efforts within airlines to reduce costs, a statement from Seattle-based Boeing said.

Our forecast for the Indian market is bullish, Keskar said adding that the company saw an average increase of 10 per cent annually in air passenger traffic in the next two decades.

According to Boeing, Indias state-run and private carriers had placed orders for 141 aircraft worth more than $20 billion in the past two years.

But he said the pace of growth in India lagged its main Asian rival China.

The market for Boeing in India is not as big as China, Keskar said.

Commenting on the 787 Dreamliner ordered by international flag carrier Air India, Keskar said Boeings delivery plans remained on schedule.

Air India is scheduled to get its first Dreamliner by September 2008. We dont see any changes in the delivery date, he said.

Besides air passenger traffic, Keskar said he saw potential for Boeing in Indias freight and aircraft maintenance market as well.AFP

http://www.dawn.com/2007/07/31/ebr19.htm


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## Bushroda

*India Inc in the brandscape *
31 Jul, 2007, 0224 hrs IST,Mansi Bhatt, TNN

The importance of brands in creating value for businesses cannot be over emphasised. Though globally, on an average, intangibles-brands, know-how (R&D, patents et al), contracts and other intangibles (processes, human capital et al)-make up roughly 62% of enterprise value, in India its' 76%, higher than perhaps any other developed or developing market in the world  Switzerland (74%), France (73%), Australia (72%) and USA (71%). 

No wonder, even while the Indian economy remains significantly under-branded (advertising spends is under 0.4 % of the country's gross domestic product, compared to a global average of around 1 %), across sectors, brands are becoming the most dominant intangible asset. And a company brand  the face of the business for all its stakeholders  is no less important here. 

Reliance Industries (RIL), the company that pioneered retail participation in the capital markets under its founder Dhirubhai Ambani, emerges as the India's most valuable brand ($ 5.8-billion) on Brand Finance India's Top 50 Most Valuable (Company) Brands list. With a huge impetus on the direct consumer facing business, Reliance Retail, the brand also garners an A on Brand Rating, which demonstrates the resilience of the brand asset and its strong ability to secure future cash flows for the business. 

Public sector petroleum marketing brands  IOC, BPCL and HPCL  under strain due to rising crude prices and high under realisation due to government price controls, will have to exploit the substantial distribution muscle and brand recognition to economic use. 

The Tata Group's crown jewel and India's largest software company, Tata Consultancy Services, muscles its way to be among India's top three brands with a valuation of $4.02-billion. It is also one among India's most powerful brands (Brand Rating A+) in terms of its ability to sustain earnings into the future with the least risk. Wipro follows as the second most valuable IT brand ($2.65-billion, ranked sixth in BF Top 50), with Infosys ($1.61-billion), India's third most valuable IT brand, not making the BF Top 10 cut. While Indian IT companies continue to grow rapidly, the first strains in the India cost arbitrage model are beginning to show with relatively high employee attrition. All three brands are at strategy crossroads and will need to work harder on brand differentiation going forward. 

Among banks, SBI emerges as the most valuable financial services brand at $3.14-billion. ICICI Bank ($ 2.04-billion) at number nine in the BF Top 50 pecking order emerges as India's second most valuable financial services brand. The debate in the financial service market is rapidly changing with technology implementation and operational efficiency becoming table stakes. To break the current supply side parity, players will have to come up with market expansion strategies which are based on unique consumer value propositions. 

At number five on the BF Top 50 list, Tata Motors with a bigger portfolio in passenger and commercial vehicles pips Maruti Sukuki India ($ 1.01-billion, rank 16), Bajaj Auto ($825-million, rank 17) and Hero Honda ($599-million, rank 23) as the country's most valuable auto brand.


----------



## Bushroda

*RBI may halt Re advance at 40: JPMorgan*
Bloomberg 
Mumbai August 02, 2007 

India's central bank is likely to stop the rupee's rally at 40 against the dollar after signaling yesterday that it will mop up surplus cash from the banking system, JP Morgan Chase & Co. said in a research note. 

The Reserve Bank of India yesterday told lenders to set aside more cash to cover deposits and scrapped a daily limit on the amount of money it drains, to remove funds injected as a result of dollar purchases. The rupee last week failed to break 40.215, the highest since May 1998, on speculation the central bank stepped up intervention. 

"The central bank is responding like a firefighter to the evolving challenges in the money market, owing to strong capital inflows,'' Rajeev Malik, JPMorgan's Singapore-based economist and Mumbai-based strategist Vikas Agarwal wrote in the note. ``Their foreign-exchange operations are likely to stay strong.'' 

Central bank Governor Yaga Venugopal Reddy is fighting to contain the 9.4 percent surge in the rupee this year that has curbed sales and profit at exporters including Infosys Technologies Ltd., the country's second-biggest software maker. 

Sales of the currency have increased money supply, forcing Reddy to take complementary steps to combat inflation. The rupee today fell 0.4 percent to 40.5275 as a slump in stocks fueled speculation global funds will pare riskier emerging-market assets on growing concerns of losses from subprime loans in the U.S. 

The rupee this year is the best performer among the 10-most active currencies traded in Asia outside of Japan. Foreign-exchange reserves rose $8.7 billion in the three weeks ended July 20, compared with $5.1 billion in June, suggesting the central bank stepped up dollar purchases. 

Reddy and fellow policymakers yesterday increased the cash reserve ratio of lenders by half a percentage point to 7 per cent, which according to the central bank may help drain as much as Rs 160 billion ($3.95 billion) from the economy. 

Capital flows from overseas will remain ``robust'' as Asia's fourth-biggest economy expands 9 per cent in the year ending March 31, said Sonal Varma, an economist at the Mumbai unit of Lehman Brothers Inc. 

"We expect the central bank to continue to lean against sharp rupee appreciation by actively intervening and simultaneously using sterilization measures,'' she said in a note sent to clients yesterday. 

Net purchases of Indian stocks by global funds almost tripled last month from June, while overseas borrowings by local companies rose six-fold to $16.1 billion in the year ended March 31. The central bank faces ``severe policy challenges'' in managing the flows, Reddy said on July 3 in a speech in Moscow.


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## Bushroda

*India FX market boom stokes high salaries, turnover*
Wed Aug 1, 2007 10:57PM EDT
By C.J. Kurrien

MUMBAI, Aug 2 (Reuters) - The salaries of foreign exchange traders in India are expected to jump by up to 30 percent this year as the rising rupee stokes demand for hedging services and trading volumes swell.

Some traders are now earning as much as their counterparts in Asian centres like Singapore, and keeping experienced staff is increasingly expensive. Banks face turnover of up to a fifth of staff each year.

"Retention is the name of the game. Banks don't mind paying heavily for it. Treasury is making so much money that they don't mind sharing a bit of the profits," said Tzeitel Fernandes at human resources firm Hewitt Associates.

India's annual foreign exchange market turnover has grown to a gross $6.5 trillion in the fiscal year 2006/07 from $1.4 trillion six years earlier.

"Volumes flowing through the system are much more than last year," said Hitendra Dave, co-head of global markets for treasury at HSBC (HSBA.L: Quote, Profile, Research) in India.

Dave guesses salaries have at least doubled in the past 12 to 18 months, while treasury revenues for the industry have doubled in the past year.

More commercial banks are offering treasury products to their corporate clients, whose overseas exposure is increasing as India's economy opens up, and foreign banks that are boosting operations in financial centre Mumbai are willing to pay more for talent.

Global houses like Credit Suisse (CSGN.VX: Quote, Profile, Research), Lehman Brothers (LEH.N: Quote, Profile, Research) and Goldman Sachs (GS.N: Quote, Profile, Research) have been ramping up in India and hiring experienced treasury sales and dealing staff. The new arrivals often don't train staff up themselves, they buy experienced talent, senior traders say.

"I lost a lot of people last year, but the bank is getting wise to the fact it's silly to lose people -- that you have to do all you can to retain them," said one head of trading at a foreign bank that has been in India for several years.

BEATING THE TRAFFIC

Traders say the average annual salary for a middle manager in treasury at a private sector or foreign bank is between 1.5 million and 2 million rupees (US$37,000-49,500). That's excluding bonuses, which can add another 8 million rupees, nearly $200,000.

That's still below Hong Kong, where middle-ranking foreign exchange traders pocket $220,000-300,000 a year, including bonus. But it's near or exceeding levels in Singapore, the world's fourth-largest currency trading centre, where traders earn about S$100,000 ($66,000) a year before sales commissions.

In London, big bonuses often mean new sports cars or diamond pendants. But Mumbai's traders use their new-found wealth to beat the traffic and upgrade their homes.

One senior currency trader, who moved from a private sector Indian bank to a foreign one, used to commute for an hour and a half on the city's overflowing trains. After a big bonus last year, he has a Honda City sedan and a bigger apartment just half an hour's drive from his office.

The advent of private equity and venture capitalists has also taken a toll on employers' wage bills and staff turnover.

"It's a huge drain in talent on treasury, which has contributed to the rise in wages and attrition," Fernandes said, adding banks were getting creative to retain staff, offering them equity, deferred bonuses and overseas postings.

Some banks also train up B or C teams.

"We always have people sitting on the bench," said a senior trader at an Indian bank. ICICI Bank (ICBK.BO: Quote, Profile, Research), India's largest private bank, says its treasury team has grown by 63 percent since March 2006, on top of a 60 percent expansion in the 12 months before.

Seasoned market players doubt the boom times will last.

They expect consolidation between local banks as a central bank regulatory review nears in 2009. Others think the sector will see an influx of talent attracted by the high pay, eventually forcing down wages.

For now, the only way to do business is to pay up.

"The rate of growth in salaries has to slow -- that's a fact -- but it will continue rising for a bit, at least till local compensations close in totally with the rest of Asia," said the head of trading at a foreign bank.


----------



## Bushroda

*Japanese PM to fund Delhi-Mumbai Industrial Corridor*
2 Aug, 2007, 0339 hrs IST,Amiti Sen, TNN

TOKYO: The proposed $90-billion Delhi-Mumbai Industrial Corridor (DMIC) project is likely to emerge as the hot-spot for Japanese investors over the next few years. When Japanese Prime Minister Shinzo Abe visits India later this month, he will be accompanied by around 50 top businessmen, half of them CEOs, from the country. 

Such is the interest in the project that companies like Mitsui, Hitachi, Mitsubishi, Honda and Orix have already started identifying potential areas of investment around the corridor. 

Officials from the ministry of economy, trade and investment confirmed to ET that the prime minister was likely to announce Japans willingness to contribute to the $250 million project development fund for the corridor. Japan is also hopeful that a detailed report for the DMIC project will be compiled by the end of the year. 

The DMIC project is very important for both India and Japan. It will provide investment opportunities for Japanese companies on an unprecedented scale, said vice-minister for international affairs (METI) Masakazu Toyoda. The work on the 1,483-km industrial corridor is expected to start next year. As many as 250 projects would be part of the corridor in sectors such as roads, ports, industrial parks and SEZs. 

Japanese financial services group Orix, which has already launched a $100 million project development fund in India together with ILFS last year, is upbeat about the investment prospects in DMIC. This project is huge. We want to invest in a large number of sectors including real estate development, SEZs, road construction, technology and training and ports, said Yukion Yanase from Orix. 

Mitsui corporation, which is investing in a free trade warehousing zone in Noida, wants to create more such zones along the DMIC. We are planning to construct major logistics centre around the DMIC, especially cold chain facilities and port facilities, said Mitsui general manager (strategic planning department) Takao Omori. He added that Japanese shipping companies keep complaining about port congestion in India which needed to be addressed. According to Jetro chairman Yasuo Hayashi, the project would transform the way the Japanese investors look at India. 

Earlier Japanese investors were only selling products in India. But now it could become a manufacturing base for exporting to countries in the EU, Middle East, CIS and Africa, he said. Jetro is organising seminars in Japan to increase awareness about the potential of the project among the small and medium enterprises. 

Another Japanese company with big plans for the DMIC project is Hitachi which has more than ten years of experience of doing business with India. We want to invest in a large number of sectors including transport, power plants, elevators and escalators, said Hitachis senior manager (Asia business department) Takafumi Kimishima. 

He, however, said that there was a lack of clarity on how the project would take shape. Although we know about the project, things are just a bit hazy at the moment, Mr Kimishima said. 

International affairs minister Mr Toyoda pointed out that there needed to be a number of follow-up meetings after Mr Abes visit and also after the project report is finalised to ensure its smooth implementation.


----------



## Bushroda

*Indian delegation in China to explore business opportunities*

New Delhi, Aug 2: Indian industry honchos are visiting China to explore investment and business opportunities, with special focus on steel, under the aegis of the Confederation of Indian Industry (CII). 

A nine-member business delegation is visiting Beijing, Nanjing and Shanghai from July 31 to Aug 3 to interact with Chinese companies, identify new emerging technologies and interact with government officials to support the ongoing India-China Strategic Cooperative partnership.

"India-China bilateral trade reached about $25 billion in 2006. The trade missions have played an important role in achieving the trade targets set by the two governments. The business community of India is keen to identify the key opportunities to enhance business ties with the Chinese economy," CII said in a statement here Thursday. 

The leading industry body also emphasised the need to promote India as a brand to propel bilateral trade and exports between the two countries.


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## Bushroda

*Indian New Age guru busts stress with breathing*
by Penny MacRae 
FRANCE24, France

Dozens of people are crammed into a small room, lying on the floor and breathing in rhythm to the loud whooshing sounds coming from the mouth of India's leading New Age guru, Sri Sri Ravi Shankar.

The eager crowd is learning a stress-busting technique that the perpetually smiling Shankar -- dubbed by one Indian magazine as the "fastest-growing guru in the marketplace of happiness" -- says he discovered meditating 26 years ago.

"Stress makes the vision narrow -- it doesn&#146;t allow you to think clearly or take the big decisions," Shankar, the founder of India's Art of Living movement, tells AFP in an interview.

"And, of course, you can&#146;t be happy," he adds.

With India's economy booming, Shankar and other New Age gurus have become increasingly sought after as overworked Indians seek new ways to cope with the pressures created by their materialistic lifestyles.

"Many people who come to us suffer from stress overload. They live pressure cooker lives. They need a way to decompress," says Sanjiv Kakar, programme director for the movement, which offers courses tailor-made for executives.

The telegenic Shankar hopscotches around the world to help out stressed-out A-listers. He once spoke at the ultra-exclusive World Economic Forum in Davos, where political leaders rub shoulders with the elite of the business world.

He says his programme of short, medium and long breaths has been taught in 145 countries to at least 20 million people over the past quarter century.

Shankar -- a student of Maharishi Mahesh Yogi, who famously taught "transcendental meditation" to the Beatles in the late 1960s -- says his goal is to make the world happier by showing people how to breathe properly.

He calls breathing "the forgotten secret of life" that can bring inner peace.

"For every emotion there's a corresponding breath, so when you're angry you have short fast breaths and when you're happy you take long deep breaths," he explains. "By breathing in certain rhythms we release negative emotions."

-- Breathe to stay young --

The guru, who tacked on the second honorific Sri to his name to distinguish himself from the Indian sitar master Sri Ravi Shankar, also says his breathing programme "keeps you young."

"Don't I look young?" Shankar, 51, asks executives at a retreat outside the capital New Delhi with an impish giggle that punctuates most of his sentences.

Indeed Shankar -- the prototype of a guru with white robes, shoulder length black locks and black beard -- looks in fine form for someone who says he gets by on just three hours of sleep a night.

Critics accuse him of offering nothing but Bobby McFerrin-style "don't worry, be happy" platitudes.

But he has nevertheless developed a big following among India's upper crust -- liquor baron Vijay Mallya and former Miss Universe Lara Dutta are fans -- with his laid-back message that people do not have to be poor to be spiritual.

While critics also label him "guru to the rich and famous," Shankar defends the right of the wealthy to inner peace.

"The Indian system does not say you have to take a vow of poverty to be spiritual. It is interesting to see that in the West, the basic ingredient of spirituality is to take a vow of poverty," Shankar says.

Renuka Narayanan, religion editor of India's Hindustan Times newspaper, says the Art of Living's "basic product is about peddling yoga," labelling Shankar as "syrupy but genuine".

"What's not to like about yoga?" she says. "It's all about breathing right, replenishing supplies of oxygen, feeling better about life."

Followers say the movement is about more than just tension-releasing lessons -- it is also about community service.

"Our spirituality is functional," says Shankar, who this year travelled to war-torn Iraq to impart his breathing technique.

Many people who do the course later work as Art of Living volunteers, the movement says.

-- Breathe out trauma --

"We teach people whose lives have been torn apart by natural disasters and wars to breathe out their trauma," says Kakar, the programme director.

Volunteers like Kakar have taught Shankar's techniques to survivors of the devastating 2004 Asian tsunami. Indian soldiers fighting Islamic militants in Kashmir learn the breathing as part of an army bid to cut stress in the ranks. 

Art of Living teams also lead convicts in breathing courses at prisons in India, Canada, the United States and elsewhere. And at India's premier state-run medical facility, the All-India Institute of Medicine, the course is used to help drug addicts in rehab.

"We find addicts who do the course have higher motivation to recover," says psychiatrist Anju Bhawan.

Shankar is a devout Hindu, but he insists the movement is secular.

"The spirituality or common values are the same in every religion -- religion is like the banana skin and spirituality is the banana," he chuckles.

The group, headquartered in a massive wedding cake-style building near the southern city of Bangalore, says it is funded by course fees and donations. It costs 37 dollars to do a course in India and several hundred dollars abroad.

"You can't do charity out of an empty bowl. We do programmes, we earn money and we spend it on charity," said Kakar.

Many practitioners say Shankar's programme changed their lives.

"It brought me a lot of inner peace," says Ajay Bagga, 38, chief executive of Lotus Asset Management in Mumbai. "I'd been a very aggressive, task-oriented manager, and then I became a much more humane kind of boss."

Shankar shrugs off his worldwide fame, but an adoring personality cult has nevertheless developed around him. Followers call him "His Holiness."

The guru, whose middle class parents were keen for him to be a bank manager, says he knew early on that he wanted to lead a spiritual life. He displayed a precocious ability to master the Hindu scriptures as a child, followers say.

"I would bunk the sports class and come home early. I would go to play football, and looking at my feet, I would say, 'these feet are going to be worshipped, they cannot kick anybody, let alone an inanimate ball'," he says.

Shankar may not have been an athlete in his youth, but he insists he never wants to grow up -- and thinks his breathing and meditation techniques will help him do that.

"I am just a child. I am no different from any one of you. Everyone has a childlikeness in them," he says, again with his signature giggle


----------



## Bushroda

*The empire Strikes Back* 
Telegraph, UK
Last Updated: 12:01am BST 03/08/2007

*From Raj to riches: as India celebrates 60 years of independence, acclaimed historian William Dalrymple salutes a country returning to its pre-colonial wealth* 

When I moved back to India with my family four years ago, I took a lease on a farmhouse five kilometres from the boom town of Gurgaon on the south-western edge of Delhi. From my road I could see in the distance the rings of new housing estates, full of call centres, software companies and fancy apartment blocks, all rapidly rising on land that only two years earlier was billowing winter wheat.

The first time I lived in Delhi, in the late 1980s, Gurgaon was a semi-rural Haryana market town, with a single large Maruti car plant to one side; it was home to no more than 100,000 people. 

Now it had become a city of several million; some said three million, some said more - the speed of growth was so enormous that it was difficult to obtain accurate figures. Either way, Gurgaon was now home to a population almost equal to that of my native Scotland.

Here an increasingly wealthy middle class had suddenly taken root in an aspirational bubble of fast-rising shopping malls, espresso bars, restaurants and multiplexes. These new neighbourhoods, most of them still half-built and ringed with scaffolding, were invariably given such unrealistically enticing names as Beverly Hills, Windsor Court, West End Heights - an indication, perhaps, of where their owners would prefer to be and where, in time, they might eventually migrate.

Four years later, Gurgaon has galloped towards us at such a speed that it now abuts the edge of our farm and the proudly-touted "largest mall in Asia" is arising a quarter of a mile from my house. 

What was farmland and a pool for water buffaloes when I moved in is now a mass of cranes, flanked by billboards advertising the latest laptops and iPods. There are still no accurate figures but the population has probably topped five million.

The speed of the development of Gurgaon is breathtaking to anyone used to the plodding growth rates of western Europe: the sort of construction that would take 25 years in Britain comes up here in five months, even if, at the end of it, the "luxury" flats will probably only have electricity for a couple of hours a day and the water supply will be intermittent at best.

The speed of change in Gurgaon reflects that of the growth of the Indian economy in general: economic futurologists all agree that China and India will at some stage in the 21st century come to dominate the global economy. 

The various intelligence agencies estimate that China will overtake America between 2030 and 2040, while India will overtake the US by roughly 2050, as measured in dollar terms. Measured by purchasing-power parity, India is already on the verge of overtaking Japan to become the third largest economy in the world.

Incredibly, India now trains a million engineering graduates a year (against 100,000 each in America and Europe) and stands third in technical and scientific capacity - behind the US and Japan, but well ahead of China.

Today India's IT sector alone annually earns the vast sum of almost $25 billion, mostly in export earnings. With an average growth rate over the last decade of 6 per cent and current growth of 9 per cent, it is little wonder that average incomes are doubling every 15 years: the number of mobile-phone users has jumped from 3 million in 2000 to 100 million in 2005; the number of television channels from one in 1991 to more than 150 last year. 

It is a similar picture on India's roads: in the early 1990s, as India was starting to relax import and investment restrictions on foreign manufacturers, there were only six or seven makes of car. 

More than 90 per cent of them were Hindustan Ambassadors, the Indian- made version of the 1950s Morris Oxford - effectively clumpy vintage cars. Now the new six-lane highways are full of sleek and speedy Fiats, Fords, Mercedes-Benz and even the odd Porsche and Bentley.

So extraordinary is all this to us today, particularly to those who knew the sluggish India of 20 years ago, that it is easy to forget how little of it would have surprised our ancestors who sailed there with the East India Company. The idea of India as a poor country is relatively recent: historically, South Asia was always famous as the richest region of the globe, whose fertile soils gave two harvests a year, and whose mines groaned with minerals.

Ever since Alexander the Great first penetrated the Hindu Kush, Europeans fantasised about the wealth of these lands, where the Greek geographers said that gold was dug up by gigantic ants and guarded by griffins, and where precious jewels lay scattered on the ground like dust. 

In Roman times, there was a dramatic drain of Western gold to India. This is something the Greek historian Strabo comments on with great anxiety in his writings - an image graphically confirmed by the recent finds of huge Roman coin hoards around Madurai in Tamil Nadu and a large Roman coastal trading post near Pondicherry. 

At the peak of the trade, during the reign of Nero, the south Indian Pandyan Kings even sent an embassy to Rome to discuss the latter's balance of payments problems. Even today, the English "pepper" and "ginger" are loan words from Tamil - respectively, pippali and singabera, testaments to the spice trade that was once a staple of this lucrative Indian export traffic.

It was similar legends of India's extraordinary wealth that drew the merchant adventurers of the Company eastwards. They came not as part of some Tudor aid project, or on behalf of a charitable Elizabethan NGO, but as part of a desperate effort to cash in on the vast riches of the fabled Mughal Empire, then one of the two wealthiest polities in the world. 

What the Poles are to modern Britain - economic migrants in search of better lives - the Jacobeans were to Mughal India.

At their heights, the Mughal Emperors were really rivalled only by their Ming counterparts in China. The Great Mughals ruled over most of India, all of Pakistan and Bangladesh and great chunks of Afghanistan. 

Their armies were all but invincible, their palaces unparalleled and the domes of their many mosques glittered with gold. For their contemporaries in distant Europe, they were potent symbols of power and wealth. The word Mughal (or Mogul) is still loaded today with connotations of this, even when it is divorced from its original Indian context.

In Milton's Paradise Lost, for example, the great Mughal cities of Agra and Lahore are revealed to Adam after the Fall as future wonders of God's creation. This was hardly an understatement: by the 17th century, Lahore had grown larger and richer even than Constantinople and, with its two million inhabitants, dwarfed both London and Paris. 

"The city is second to none either in Asia or in Europe," said Portuguese Jesuit Father Antonio Monserrate, "with regards either to size, population, or wealth. It is crowded with merchants, who foregather there from all over Asia. There is no art or craft useful to human life which is not practised there. The citadel alone has a circumference of three miles."

It was, in terms of rapid growth, instant prosperity and unlimited opportunities, the Gurgaon of its day.

What changed all this was quite simply the advent of European colonialism. Following Vasco da Gama's discovery of the sea route to the East in 1498, bypassing the Middle East and conquering the centres of spice production in South Asia, European colonial traders - first the Portuguese, then the Dutch and finally the British - slowly wrecked the old trading network and imposed with their cannons and caravels a western imperial system of command economics.

It was only at the very end of the 18th century that Europe, for the first time in history, had a favourable balance of trade with Asia. At the same time, the era of Indian economic decline had begun and was most precipitous in the region around the British headquarters in Calcutta. 

As the 18th century historian Alexander Dow put it: "Bengal was one of the richest, most populous and best cultivated kingdoms in the world We may date the commencement of decline from the day on which Bengal fell under the dominion of foreigners."

This was certainly the view of Edmund Burke, who impeached Warren Hastings, India's first Governor General, charging him with oppression, corruption, gross abuse of power and ruthlessly plundering India. 

On February 13, 1788, huge crowds gathered outside Parliament to witness the members of the House of Lords troop into Westminster Hall to sit in judgement on Hastings. 

Tickets for the few seats reserved for spectators were said to have changed hands for as much as £50. In the audience was Sarah Siddons, the great society actress (and courtesan), as well as Edward Gibbon, Joshua Reynolds, the novelist Fanny Burney, the Queen, two of her daughters and most of the ambassadors in London.

For all the theatre of the occasion - and, indeed, one of the prosecutors was the playwright Richard Sheridan - this was not just the greatest political spectacle in the age of George III. It was the nearest the British ever got to putting the Empire on trial and they did so with Edmund Burke, one of their greatest orators, at the helm, supported by the similarly eloquent Charles James Fox.

Hastings stood accused of nothing less than the rape of India - or as Burke put it in his opening speech: "Cruelties unheard of and devastations almost without name crimes which have their rise in the wicked dispositions of men, in avarice, rapacity, pride, cruelty, malignity, haughtiness, insolence - in short everything that manifests a heart blackened to the very blackest; a heart dyed in blackness; a heart gangrened to the core We have brought before you the head, the captain general of iniquity - one in whom all the fraud, all the tyranny of India are embodied."

When Burke began to describe the violation of Bengali virgins and their mothers by the rapacious tax collectors the British employed - "They were dragged out, naked and exposed to the public view, and scourged before all the people they put the nipples of the women into the sharp edges of split bamboos and tore them from their bodies" - Mrs Sheridan "was so overpowered that she fainted and to be carried from the hall".

Hastings was in many ways the wrong target for Burke's Parliamentary offensive and, after a trial lasting nearly 10 years, he was eventually acquitted on all charges. 

But it is worth recalling the damage that the Company undoubtedly did to the flourishing economy of India as the 60th anniversary of Indian Independence dawns amid unprecedented excitement at India's rapid rise towards its projected superpower status.

Today, academics, historians and economists are fiercely divided between those who believe European colonial rule brought great benefits to India and those who believe Britain put India into irreversible political and economic decline.

Given the complex and emotive issues involved, it is hardly surprising that there is little neutral territory in this politically super-charged debate: did Western mercantile-imperialism bring high capitalism and free trade to India, as supporters such as historian Niall Ferguson would have us believe; or did it irrevocably destroy millennia-old trading networks? 

Did it bring democracy to a part of the world inured to despotism and tyranny; or did it remove political freedom of expression from lands with long traditions of debate and public expression of dissent, as argued by the Nobel Prize winner Amartya Sen?

Did the British Empire bring in constitutional guarantees of the freedom of the individual; or promote slavery, exploitation, indentured labour and forced migration? Did the British bring just governance and irrigate the deserts, or did they plunder natural resources, drive a number of species to extinction and preside over a succession of famines that left many million dead while surplus grain was being shipped to Britain?

Most important of all, did the British promote religious tolerance, or did they instead sow the seeds of religious conflict with cynical policies of sectarian divide and rule - thus laying the scene for the politico-religious divisions we see around us and what Bernard Lewis and Samuel Huntingdon would have us believe are today's civilisational clashes?

There are no easy answers to any of these questions. Looking back at the role the Europeans have played in South Asia until their departure in August 1947, there is certainly much that the West can unambiguously be said to have contributed to Indian life: the Portuguese, for example, brought that central staple of Indian life, the chilli pepper; while the British brought that other essential staple, tea, as well as the far more important innovations of democracy and the rule of law, along with the railways, all of which have helped India rise again to greatness.

In the light of so much post-colonial disapproval, it is also worth remembering the impeccable reputation Victorian rule in India (if not that of the Company) once enjoyed, even from Britain's fiercest critics. 

Bismarck thought Britain's work in India would be "one of its lasting monuments". Theodore Roosevelt agreed that Britain had done "such marvellous things in India" that they might "transform the Indian population in government and culture, and thus leave [their] impress as Rome did hers on Europe".

The French traveller Abbé Dubois extolled the "uprightness of character, education and ability" of British officials in India, while the Austrian Baron Hübner ascribed the "miracles" of British rule to its administrators' "devotion, intelligence, courage, and skill combined with an integrity proof against all temptation".

It is also true that factors such as cricket and the English language have been crucial to India's modern success, cultural indicators that in their different ways set Indian eyes looking westwards to the rising power of Britain, and later the US, and away from the declining Islamo-Persianate culture of Central Asia and the Middle East, a world that would go into ever greater cultural and economic decline as the 19th century gave way to the 20th.

In the days that followed the fall of the Mughals after the great Indian Mutiny of 1857, this turning away from the old cultural moorings and the reorientation of India towards the West caused heartbreak to the old Urdu- and Persian-speaking elites.

As the poet and critic Azad wrote: "The glory of the winners' ascendant fortune gives everything of theirs - even their dress, their gait, their conversation - a radiance that makes them desirable. And people do not merely adopt them, but they are proud to adopt them."

Yet it was the depth of that reorientation and adoption, and the ease which Indians can now cross the globe and work in either Britain or the US, that today has given the country's anglicised elite such easy access to the jobs and opportunities of the Western economy.

Nevertheless, for all this we British should keep our nostalgia and self-congratulation over the Raj within strict limits. For all the irrigation projects, the great engineering achievements and the famous imperviousness to bribes of the officers of the Indian Civil Service, the Raj nevertheless presided over the destruction of Indian political, cultural and artistic self-confidence, while the economic figures speak for themselves.

In 1600, when the East India Company was founded, Britain was generating 1.8 per cent of the world's GDP, while India was producing 22.5 per cent. By 1870, at the peak of the Raj, Britain was generating 9.1 per cent, while India had been reduced for the first time to the epitome of a Third World nation, a symbol across the globe of famine, poverty and deprivation.

Today in India, the dramatic increase in wealth that we see on all sides is less some sort of economic miracle - the strange rise of a once impoverished wasteland, as it is usually depicted in the Western press - so much as things slowly returning to the traditional pattern of global trade in the pre-colonial world. Last year, the richest man in the UK was for the first time an ethnic Indian, Lakshmi Mittal, and our largest steel manufacturer, Corus, has been bought by an Indian company, Tata.

Extraordinary as it is, seen from the wider perspective the rise of India and China is merely nothing more than a return to the ancient equilibrium of world trade. Today, we Europeans are no longer the gun-toting, gunboat-riding colonial masters we once were, but instead are reverting to our more traditional role: that of eager consumers of the much celebrated luxuries and services of the East.

*William Dalrymple's new book, The Last Mughal: The Fall of a Dynasty, Delhi 1857, published by Bloomsbury, has just been awarded the Duff Cooper Prize for History.*


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## Bushroda

*Indian American Democrats Discuss Strategies to Raise Community's National Political Clout*
Earthtimes.org
Thu, 02 Aug 2007 23:17:54 GMT

WASHINGTON, Aug. 2 /PRNewswire-USNewswire/ -- The Indian American Leadership Initiative (IALI) will host the first Indian American Democratic Dialogue (Dialogue) at the Center for Strategic and International Studies (CSIS) on Friday, August 3, and Saturday, August 4. This path-breaking conference marks the first time that Indian-American Democratic elected officials, candidates, political appointees, policymakers, consultants, and fundraisers have gathered to discuss politics and policy. Among the expected topic of discussions are the Hindu prayer incident, nuclear deal, outsourcing, and "Macaca" slur from the United States Senate race in Virginia. 

Founded in 2001, IALI is a non-federal 527 that seeks to connect, promote, and invest in Indian American Democrats. For more information, visit http://www.ialeadership.com/. The Indian-American community is one of the fastest-growing, wealthiest, and best-educated immigrant groups in the United States. There are 42,000 Indian-American physicians. Over fifteen percent of Silicon Valley's start-up firms are owned by Indian-Americans. And, Indian- Americans own half of the economy lodge sector and thirty-seven percent of all hotels. 

EVENT HIGHLIGHTS Friday, August 3 8:45 a.m. Sen. Robert Menendez (D-NJ), Rep. Frank Pallone (D-NJ), Rep. Joseph Crowley (D-NY), and Rep. Nick Lampson deliver opening remarks. 9:30 a.m. Sen. Harry Reid's national security advisor Rich Verma, USINPAC founder Sanjay Puri; and House Committee on Foreign Affairs staff member Manpreet Singh Anand discuss U.S.-India foreign policy issues. 11 a.m. Long Beach City Council Member Suja Lowenthal, District of Columbia Chief Technology Officer Vivek Kundra and Assistant to the New York City Human Resource Commissioner Udai Tambar discuss Indian American local issues. 12:15 p.m. Georgetown University Law Center professor Neal Katyal delivers keynote address 1:30 p.m. House of Delegates Majority Leader Kumar Barve (D-MD) and State Rep. Swati Dandekar (D-IA) discuss Indian Americans and state legislative issues. 2:45 p.m. South Asian American Leaders for Tomorrow executive director Deepa Iyer, National Federation of Indian-Americans President Rajen Anand, Indian American Political Forum for Education President Ravi Sakhuja, Association of American Physicians from India Vice President Vinod Shah, and Immigration Voice Vice President Sivakanth Mundru discuss Indian-American grassroots mobilization efforts 4:15 p.m. New Jersey Transportation Secretary Kris Kolluri, Virginia. Technology Secretary Aneesh Chopra, and former New York Solicitor General Preeta Bansal discuss policy trends affecting Indian Americans. Saturday, August 4 9:30 a.m. DGA communications director Mona Mohib, DCCC Indo-American Council Chair Ro Khanna, Indian-American Forum for Political Education President-Elect Yogi Chugh and Campaign for America's Future communications director Toby Chaudhuri discuss the Indian American community and Democratic politics. 11 a.m. State Rep. Raj Goyle (D-KS), State Rep. Jay Goyal (D-OH), DGA political director Raghu Devaguptapu, former Ohio Attorney General candidate Subodh Chandra, former Georgia Secretary of State candidate Shyam Reddy and former Arizona State Treasurer candidate Rano Singh discuss running for state office. 1:30 p.m. India Abroad editor Aziz Haniffa, ABC Digital News Producer Nitya Venkataraman, and Sepia Mutiny blogger Anna John discuss media coverage of Indian American politics. 3 p.m. DNC Indo-American Leadership Council co-chair Shekar Narasimhan, DNC At-Large Member Kamil Hasan, Hillary Clinton for President fundraiser Reshma Saujani, John Kerry finance committee member Samir Desai, and John Edwards for President finance committee member Shi Shailendra discuss fundraising for candidates and the Democratic Party. 4:45 p.m. KPMG Federal Relations director Priya Dayananda, Mammen Group president Anil Mammen, Monument Group Principal Kathy Kulkarni, Dewey Square Group Associate Anu Rangappa and The Bonner Group Vice President Bhavna Pandit discuss policy issues facing Indian Americans from the lobbyist and political consultant perspective. Indian American Leadership Initiative.


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## Bushroda

*A Young Giant Awakes*
TIME
By Simon Robinson

Political slogans often outpace reality. when rajiv gandhi was campaigning in the late 1980s, he liked to say "Mera Bharat Mahan [My India is Great]." A TV advertisement put the phrase to a catchy tune. But few Indians had TVs in those days and while millions appreciated the sentiment, not all believed it. 

It makes more sense now. Sixty years after independence, India is beginning to deliver on its promise. Over the past few years the world's biggest and rowdiest democracy has matched its political freedoms with economic ones, unleashing a torrent of growth and wealth creation that is transforming the lives of millions. India's economic clout is beginning to make itself felt on the international stage, as the nation retakes the place it held as a global-trade giant long before colonial powers ever arrived there. That success may yet act as an encouragement to Pakistan and Bangladesh, still struggling to overcome longstanding questions around Islam's role in their societies. Despite its current political turmoil, Pakistan's economy, too, has boomed over the past few years, and Bangladeshis hope that if the current military-backed government can sort out its mess of corruption, the country can soon return to democracy and a re-energized economy. 

The challenges facing the subcontinent, of course, are enormous. Indian infants are more likely to be malnourished than African ones, infrastructure is straining to keep up with the economic boom, while corruption, discrimination, religious violence, child labor, bad schools and pollution persist. When the economy tightens or when tensions with Pakistan threaten war, a new slogan appears on India's auto-rickshaws: "Mera Bharat Pareshan [My India is Troubled]." 

But none of this means that the country's massive shift is an illusion. Twenty years ago the rest of the world saw India as a pauper. Now it is just as famous for its software engineers, Bollywood movie stars, literary giants and steel magnates. Photographer Prashant Panjiar, who took the photos for the following story on the Malhotra family, has detected a new confidence in the past few years. "A lot of people are still poor but there is a sense of purpose now," he says. "That old Indian fatalism has gone." Indeed, these days a new slogan has appeared on the back of the auto-rickshaws, a simple statement that captures the excitement and promise palpable in many parts of the country. "Mera Bharat Jawan," it reads: "My India is Young."


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## Bushroda

*The Real Estate Mogul Leading India's Charge*
TIME
By SIMON ROBINSON/NEW DELHI 

From the window of his ninth-floor office, Kushal Pal Singh looks down over New Delhi's Jantar Mantar, an elaborate astronomical observatory built by a far-sighted 18th century Hindu ruler renowned for his diplomacy and the monuments he left behind. The stone curves and pillars of the observatory worked in conjunction with its massive sundial to create one of the most reliable and accurate scientific instruments of the day, allowing astronomers to measure time, forecast eclipses and determine the positions of stars and planets. The Jantar Mantar "gave me inspiration," says Singh, the chairman of DLF, India's largest real estate company. "And the inspiration was that if this guy who conceived and made the Jantar Mantar centuries ago could be a forward-looking man, why is it that we can't be forward looking in our development and start to do something ahead of the time?" 

If you listen to Singh tell it, DLF is doing just that. Barely known outside its north Indian base a few years ago, the company is building houses, apartments, office towers and shopping malls across India. It has plans for airports, hotels and cinemas. Singh, 75, doesn't just want to cash in on India's economic boom, he wants to be a prime mover in the country's drive to erect modern cities where India's new middle class can live, work, shop and play. To do all that, though, DLF needs a lot more money, which is why on July 5 the company listed on the Bombay and National stock exchanges. An initial public offering for just over 10% of the company closed in mid-June and brought in some $2.24 billion. In the three weeks after it listed, DLF's shares rose nearly 9%, giving it a market capitalization of $24.5 billion  roughly $3 billion more than General Motors. The IPO, which was about twice the size of India's previous biggest, netted Singh and several family members, who together hold 87% of DLF, nearly $20 billion  enough to make them one of the richest clans in the world. "Frankly that is embarrassing to me," Singh says. "That is not the yardstick by which I want to be known. I feel proud that what I championed 25 years back has blossomed into something good for the country. That is what I want to be known for." 

Whether he likes it or not, the fortune Singh has amassed is bound to attract attention. DLF is, after all, the hottest property developer in one of the hottest markets in the world. India's economy has grown at an average annual rate of more than 8% over the past four years, bestowing prosperity upon millions of Indians and boosting demand for houses, offices, megamalls and hotels. Real estate prices have skyrocketed. A 2006 study by the Federation of Indian Chambers of Commerce and Industry and professional-services firm Ernst & Young found that total revenue from sales of commercial and residential property throughout India had grown 30% a year for the previous three years. Land prices in some areas have tripled in value since 2004, while office rents in Mumbai and New Delhi are now more expensive than those in Paris, Hong Kong or midtown Manhattan, according to a 2007 survey by real estate consultant CB Richard Ellis. Yet the boom may still have room to run. Merrill Lynch forecasts India's property industry will grow to $90 billion by 2015, up from $12 billion in 2005. 

During an interview in late May, Singh, who is widely known simply by his initials, K.P., espouses a similarly optimistic view. "As prosperity comes through I see massive opportunities," he says. "You will need 100 DLFs, there will be so much work." DLF, though, has a big head start on the rest of the industry, thanks largely to Singh. The amiable septuagenarian, who this day is dressed in a white suit with a polka-dot handkerchief poking from his breast pocket, recalls how prescient strategy  and a stroke of luck  turned DLF into a property powerhouse. Founded by Singh's father-in-law, Chaudhury Raghuvendra Singh, DLF (originally Delhi Land & Finance) got started in 1946, a year before India won its freedom from Britain. A former civil servant, Raghuvendra bet that hundreds of thousands of refugees, who were expected to settle in India's capital when partition split Hindu and Muslim India, would need places to live. He convinced farmers around New Delhi to hand over their land on the promise of future payment, borrowed money to develop residential neighborhoods and then sold at considerable profit to the influx of newcomers. 

But the good times ended in 1957 when New Delhi's socialist government granted itself sole development rights for the city, forcing private firms out of the business. By then, K.P. Singh had married into the family and would soon join his father-in-law's firm. The son of landlords himself, K.P. had studied science and then moved to Britain to train in aeronautical engineering before returning home as an officer in the Indian army. Military life was tough and family legend has it that Singh planned to return to his engineering studies in London when he was dragged before a colonel who had learned of his intentions. "You can leave," the senior officer told him, "but you will always be known as the coward who ran away." Singh stayed, serving in the Deccan Horse, a celebrated cavalry regiment, in the early 1950s, and learned the discipline that he says would help him in business years later. 

By the time he joined DLF in 1960, real estate development work had dried up completely. Instead, the company tied up with two U.S. firms to manufacture electric motors and automotive batteries. Although the battery joint venture eventually foundered, Singh says he learned a lot about American management techniques during the period. By 1980, he had hit upon a new scheme that would eventually help transform India. "I was hungry," he says now. "And the best things in life are done when you are hungry for more business." 

Singh's plan centered on Gurgaon, a dry, scrubby plain in the state of Haryana, just across the border from New Delhi. If he could buy enough land and then convince authorities to change their regulations, perhaps he could outdo his father-in-law's success in New Delhi. By 1981, though, the company had acquired just 40 acres. Singh had failed to persuade the state government to change a law preventing companies from acquiring farmland for commercial use. Frustrated and despondent, he sat beside a well one scorching summer day. "What the heck can you do in this place?" he recalls asking himself. 

That was when the driver of an overheating four-wheel drive stopped to request some water. The supplicant was Rajiv Gandhi, son of Prime Minister Indira Gandhi and soon to be India's leader himself. "Rajiv Gandhi was like a ray of hope for India," says Singh, who hit it off with the political scion and was later repaid for his water when Gandhi pushed the Haryana state government to ease commercial-development restrictions on farmland. "It didn't take me any time to convince him, frankly," Singh says. "We found that we were on the same wavelength very quickly." Their two-hour conversation that day as Gandhi's car cooled, says Singh, was "the birth of the entire urban-development policy of India today." 

Over the next two decades, as economic regulations were slowly liberalized, DLF amassed 3,500 acres in Gurgaon and began building some of India's first modern commercial structures, including offices for General Electric and, more recently, for Swedish cell-phone maker Ericsson and Swiss food giant Nestlé. The company also built luxury apartments and houses, including one residential estate incorporating an 18-hole golf course designed by golfing legend Arnold Palmer. Land that cost Singh as little as $65 an acre at current exchange rates now sells for about $4 million an acre. Meeting Gandhi "was lucky in one way," says Singh now. "But it wasn't only luck. It gave me an opportunity to fight." 

Singh has also had some pretty good advisers in his corner. Former General Electric CEO Jack Welch became a fan after the DLF chief helped set up Welch's first visit to India in the 1980s. In his autobiography, Welch wrote that Singh  whom he described as "tall, natty and aristocratic"  and his friends "showed us an India and a people that we loved. We saw all kinds of opportunities there." Singh later became a GE adviser. "I learned a lot from Jack Welch about how to run a business," he says. 

In the run-up to its IPO, DLF has been on another buying spree. Holdings in 31 cities now have the potential for 570 million sq. ft. (53 million sq m) of development, according to the company  more than double the amount that DLF has completed over the past few decades. The company likes to think big. Last year DLF began work on the Mall of India in Gurgaon, which will be one of the five biggest shopping complexes in the world. It has just opened a new technology park in Chennai; tenants include Symantec and IBM. In recent years, it has tied up with a host of foreign companies to develop airports (in partnership with Fraport AG, owner and operator of Frankfurt Airport), hotels (Hilton), and industrial estates and urban hubs (Dubai-based developers Nakheel). "Our collaborations are all with the very best from abroad," says DLF's energetic group executive director Rajeev Talwar. "We want to bring global best practices to India." 

Over the past few years, Singh has handed over much of the day-to-day running of DLF to his son and DLF vice-chairman Rajiv Singh, 48, who studied engineering at Massachusetts Institute of Technology (the younger Singh declined requests to be interviewed for this story). Daughter Pia, 36, a Wharton economics graduate, runs the company's retail business. Older sister Renuka handles some international business. K.P. says he plans to slowly step away from DLF to concentrate on his golf (handicap: 14), collect more art (DLF owns one of the biggest private collections in the country) and travel (Singh is the Honorary Consul General of Monaco and holidays in London regularly). "He's a perfectionist who will move heaven and hell if he wants something," says Pia, who recalls watching her father take over a hospital ward after her mother was badly injured in a helicopter accident that killed four other people. "He managed her case how he ran the business. He literally gave up everything for two years." 

DLF, which obviously remains a family-run operation, will need that kind of focus to successfully execute its ambitious agenda amid growing scrutiny, a by-product of going public. Some analysts say DLF, like the Indian property market itself, isn't transparent enough. There are questions surrounding the true value of DLF's recent land acquisitions, in part because 35% of the land on its books is not owned but under "agreement to purchase," according to IPO documents. In a pre-IPO report, Sydney-based Macquarie Research also criticized the fact that more than half of DLF's land is in New Delhi, Gurgaon and Mumbai, cities that some analysts believe will lag growth in smaller centers over the coming few years  a view rejected by DLF management. "These guys are perhaps not used to aggressiveness in business development," says Singh. 

The biggest threat, though, remains an outside shock, especially a crash in the property or stock markets. When U.S. property and media tycoon Sam Zell visited India in April, he told local real estate executives that they were "on the brink of excess" and that the boom could end in a bust. Indeed, the past few months have been shaky ones. Real estate stocks plunged as much as 50% in a general market sell-off last spring, while property prices have fallen by 20% or so in some areas in the past six months. Both the government and the Reserve Bank of India are trying to cool the real estate sector without crashing it. The RBI has cautioned banks against excessive lending for property deals and has raised interest rates six times in the past 18 months to try to rein in inflation, which peaked at almost 7% in March. The Securities and Exchange Board, meanwhile, has tightened up regulations on foreigners investing in real estate firms ahead of public listings. All that has made it harder and more expensive for Indian builders to raise money. 

Considering the challenges, it's hard to see how DLF's spectacular growth rate can be sustained for long. In its fiscal year that ended March 31, 2007, DLF reported that its profit grew by more than 1,000% to $470 million, while sales tripled to just under $1 billion. That record is fully reflected in the stock price, says Mukesh Agarwal, a manager at Indian financial-services firm HDFC Securities. "Since we have already had a stupendous run-up over the past two years, prices have been fully factored in," says Agarwal. "The upside may be limited." 

Singh doesn't see it that way. "Urban development in India ... will be the biggest sunrise industry that any country has seen in any part of the world," he says. "And this is going to be a long haul, not three or four years but 20 years or more." The trend is being driven by macro forces, such as the country's demographics, that aren't usually taken into account by stock analysts, he says. Not only will India pass China as the most populous nation on the planet in a couple of decades, its citizens are a lot younger than its rival; one in three Indians is currently younger than 15. As the country becomes richer (with a little help from the strengthening rupee, India became a $1 trillion economy in late April) and more urban (the number of people living in cities will rise to 461 million by 2025 from 286 million today, according to the Asian Development Bank), demand for housing should go right on booming. Already India's Ministry of Housing and Urban Poverty Alleviation puts the shortage of homes at 25 million. 

As its economy grows, India will need millions more square feet of offices as well. Industry analysts estimate India has less modern urban office space than a single large American city. India's infrastructure demands, too, should keep plenty of companies in business. The government estimates the country needs $320 billion of investments in roads, ports and bridges by 2012. "It's not a bubble," says Arjun Divecha, the California-based manager of investment firm GMO's $15 billion emerging-markets fund. "In India the reason why prices have risen so rapidly is because there has been so little increase in supply. If you look at the experience of other emerging markets, the real wealth escalator has been real estate and I expect the same in India." 

So does Singh, who laments that in its first 60 years, India's philosophy was to "think small, make small buildings and never to think that we could make bigger things, better things." He pauses for a second, looking old when he stops, but animated and younger as soon as he begins talking again. "I ask you, why can't we be excellent?"


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## Bushroda

*India's Democratic Advantage*
TIME
By ISHAAN THAROOR 

At the height of Britain's empire in India, Rudyard Kipling famously declared, "Oh, East is East, and West is West, and never the twain shall meet." Kipling thought the cultural gap between the colonizers and the colonized was unbreachable, but India's sophisticated independence movement, uniting Oxbridge thinkers and mass protests, proved him wrong. To be sure, Kipling's axiom still echoes in India today  not for divides of geography, but class. Beneath the glitz of India's ebullient film industry or the sheen of chrome-and-glass IT centers, a vast, confusing and poor India lurches onward. It shares little with the country's jet-setting globalists, high-powered intellectuals or high-rolling industrialists. It knows more about enduring hardship than enhancing hardware. Yet, again in India, the twain do meet. Sixty years of freedom have bound all Indians, rich and poor, to a single commitment: democracy. 

Visitors always seem to be astonished by the cacophony of the Indian street and the vibrant mix of ethnicities, cultures and religions that gives it life. With a sixth of humanity living within its borders, India is more linguistically diverse than Europe. But, apart from a few hiccups along the way, it remains one of the most stable and unified societies in all of Asia. "India has proven once and for all that countries which are poor and diverse can be democratic," says Rajeev Bhargava, director of the Centre for the Study of Developing Societies in New Delhi. "Now, the idea of India and democracy are inseparable." 

The hurly-burly of India's politics is not for everyone. Elsewhere in Asia, many rulers have favored an orderly, sternly run society over a boisterous, democratic one. Taiwan, South Korea and Singapore all grew their economies while keeping politics under a short leash. Today, China, the Asian giant whose shadow looms largest over India, tightly monitors public opinion and swiftly quashes dissent. The Chinese leadership vaunts harmony over all else, and points to the hundreds of millions it lifted out of poverty in just two decades as a vindication of its development-first policies. 

It's an argument not easily dismissed. Even the fiercest supporters of Indian democracy cannot ignore its dark underbelly. May's elections in the state of Uttar Pradesh  India's most populous  saw dozens of candidates run despite holding criminal records; at least six even coordinated their campaigns using mobile phones while detained in prison. It's one thing if such behavior was an aberration, but, in India, this is par for the course. Corruption pervades all strata of society  Transparency International ranks India worse than countries like El Salvador and Bulgaria in the corruption stakes  mostly because the nation's bloated, unwieldy bureaucracies encourage it. And as graft stifles the poor, separatist insurgencies in Kashmir and the country's troubled northeast continue to simmer, asking tough questions of a nation that values popular sovereignty and self-determination. 

But India perseveres nonetheless. "What's unique about Indian democracy," says Jay Panda, a young Member of Parliament from the eastern state of Orissa, "is that it has succeeded despite consistent predictions of its demise." Panda belongs to a regional party that leverages its seats in Parliament to ensure that his smaller state doesn't get the short end of the stick from federal policies. He sees himself as part of a "self-correcting mechanism" of the democratic system, which has, over time, learned how to accommodate diverse interests, enfranchise those on the margins and topple dynasts. In India, Panda believes, "the electorate is always the great leveler." 

The May elections in Uttar Pradesh, though controversial, are a case in point. If the northern state were an independent country, it would boast the sixth largest population in the world. Its people, many impoverished, more than a few illiterate, went to the polls and voted the most unlikely of parties into power. The Bahujan Samaj Party was once a small, rural movement agitating for the rights of untouchables, or Dalits. This year, on a platform of social justice, it formed a coalition of candidates from across backgrounds of caste and creed and shunted aside the more established Congress Party and the Hindu nationalist BJP. "It was an important affirmation of Indian democracy," says Bhargava. "Through parliamentary elections, through group recognition, people who in other places would remain on the outside get co-opted. They realize that they have a stake in the process, that they have hope." 

Indian democracy works because it welcomes everyone, identity politics and all, into its big tent  a habit that it developed during the years of its freedom struggle. At the turn of the 20th century, the Indian National Congress, a body led by mostly Western-educated Indian élites who spearheaded India's decolonization, was a broad umbrella organization composed of many different camps. According to Gowher Rizvi, lecturer in public policy and head of the Ash Institute for Democratic Governance at Harvard University, the debates and compromises thrashed out between independence leaders set the tone of the movement: "With this constant back and forth, Indian nationalism emerged hand in hand with a pledge to democracy." 

A generation of extraordinary revolutionaries cemented this pledge. Homespun-clad Mahatma Gandhi planted the spirit of an inclusive, secular nationalism at the grass roots. India's first Prime Minister, Jawaharlal Nehru, and his contemporaries nurtured it following independence, building democratic institutions and a system of checks and balances that remain entrenched to this day, while neighbors Pakistan and later Bangladesh routinely threw out constitutions and fell under bouts of military rule. 

That's why India's brief flirtation with authoritarianism was far less damaging than any junta-backed coup. Between 1975 and 1977, then Prime Minister Indira Gandhi imposed Emergency rule in order to curb mounting disorder sparked by mass political protests. The press was censored, hundreds were detained, and thousands of rural poor were forcibly sterilized under a campaign orchestrated by Gandhi's son, Sanjay. But what didn't kill Indian democracy made it stronger. "Every grown child needs chicken pox in order to become immune to it," says M.J. Akbar, editor in chief of both the Asian Age and Deccan Chronicle newspapers and a onetime MP. Gandhi called elections soon after the Emergency was lifted and irate Indian voters swiftly booted her government out the door. 

The power and durability of the Indian ballot is significant, given that more than a few Asian governments claim liberal democracy to be an alien, Western invention. As a screen to justify top-down rule, the "Asian values" hypothesis suggests that human rights and universal suffrage matter less to Asians than attaining prosperity. But in the wake of the spectacular crash of numerous Asian markets in 1997, spurred by the cronyism of its regimes, Rizvi believes "there is not an iota of truth in that idea." 

A trade-off between development and democracy can prove damaging. While China's economy soars, hundreds of millions of migrant workers and rural peasants have been left on the outside looking in. In India, says Rizvi, "growth may have been slow, but over a period of time it is more certain and sustainable because of its democracy." Some would dispute that assertion, but there's no arguing that economic policies and commercial decisions in India rope in a greater number of stakeholders than in many other places in Asia. 

True, India, a noisy nation of over 1 billion voices, can't match the hyper-affluence of Singapore or China's titanic boom, but it shows that hearing those voices is the best long-term strategy. "Attila the Hun was great for his country's GDP also," says Akbar, "but the future of the world is not just about growth rates. It's about the principle of human equality." India is neither East nor West as Kipling saw it, but in its diversity and exuberance a reflection of something universal. It is, as Akbar concludes, "the first modern nation of the emerging world." A nation where, more than anything else, democracy rules.


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## Bushroda

*Why India's Rise is Business As Usual*
TIME
By WILLIAM DALRYMPLE 

The idea that india is a poor country is a relatively recent one. Historically, South Asia was always famous as the richest region of the globe. Ever since Alexander the Great first penetrated the Hindu Kush, Europeans fantasized about the wealth of these lands where the Greek geographers said that gold was dug by up by gigantic ants and guarded by griffins, and where precious jewels were said to lie scattered on the ground like dust. 

At their heights during the 17th century, the subcontinent's fabled Mughal emperors were rivaled only by their Ming counterparts in China. For their contemporaries in distant Europe, they were potent symbols of power and wealth. In Milton's Paradise Lost, for example, the great Mughal cities of Agra and Lahore are revealed to Adam after the Fall as future wonders of God's creation. This was hardly an overstatement. By the 17th century, Lahore had grown even larger and richer than Constantinople and, with its two million inhabitants, dwarfed both London and Paris. 

What changed was the advent of European colonialism. Following Vasco da Gama's discovery of the sea route to the East in 1498, European colonial traders  first the Portuguese, then the Dutch and finally the British  slowly wrecked the old trading network and imposed with their cannons and caravels a Western imperial system of command economics. It was only at the very end of the 18th century, after the East India Company began to cash in on the Mughal Empire's riches, that Europe had for the first time in history a favorable balance of trade with Asia. The era of Indian economic decline had begun, and it was precipitous. In 1600, when the East India Company was founded, Britain was generating 1.8% of the world's GDP, while India was producing 22.5%. By 1870, at the peak of the Raj, Britain was generating 9.1%, while India had been reduced for the first time to the epitome of a Third World nation, a symbol across the globe of famine, poverty and deprivation. 

In hindsight, what is happening today with the rise of India and China is not some miraculous novelty  as it is usually depicted in the Western press  so much as a return to the traditional pattern of global trade in the medieval and ancient world, where gold drained from West to East in payment for silks and spices and all manner of luxuries undreamed of in the relatively primitive capitals of Europe. 

It is worth remembering this as India aspires to superpower status. Economic futurologists all agree that China and India during the 21st century will come to dominate the global economy. Various intelligence agencies estimate that China will overtake the U.S. between 2030 and 2040 and India will overtake the U.S. by roughly 2050, as measured in dollar terms. Measured by purchasing-power parity, India is already on the verge of overtaking Japan to become the third largest economy in the world. 

Looking back at the role Europeans have played in South Asia until their departure in August 1947, there is certainly much that the West can be said to have contributed to Indian life: the Portuguese brought the chili pepper, while the British brought that other essential staple, tea  as well as the arguably more important innovations including democracy and the rule of law, railways, cricket and the English language. All contributed to India's economic resurrection. But the British should keep their nostalgia and self-satisfaction surrounding the colonial period within strict limits. For all the irrigation projects, the great engineering achievements and the famous imperviousness to bribes of the officers of the Indian Civil Service, the Raj nevertheless presided over the destruction of India's political, cultural and artistic self-confidence as well as the impoverishment of the Indian economy. 

Today, things are slowly returning to historical norms. Last year the richest man in the U.K. was for the first time an ethnic Indian, Lakshmi Mittal, and Britain's largest steel manufacturer, Corus, has been bought by an Indian company, Tata. Extraordinary as it is, the rise of India and China is nothing more than a return to the ancient equilibrium of world trade, with Europeans no longer appearing as gun-toting, gunboat-riding colonial masters but instead reverting to their traditional role: that of eager consumers of the much celebrated manufactures, luxuries and services of the East.


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## Bushroda

*From Partition to Prosperity: A Family's Journey*
TIME
By SIMON ROBINSON/NEW DELHI

No single family perfectly captures the diversity of a country of more than a billion people, so when TIME set out to tell the story of India's first 60 years through the experiences of three generations, we had to make choices. Should we pick a rural clan, because India's masses live in villages, or city folk, because change is coming faster to urban India? What about a family living in one of the high-tech southern hubs of Bangalore or Chennai, or one from the teeming, poorer northern cities? In the end we settled on the Malhotras, a middle-class clan in New Delhi, because their experiences echo modern India's three ages: the joy and pain of independence; the era of stifling socialism; and the current burst of growth and optimism. The family history that follows tells how far India has come  and how far its people still wish to go. 

In the months leading up to India's independence in August 1947, millions of people in villages and cities around the land prepared to mark the event with ceremonies and fireworks, speeches and parties. For those living along the religious fault lines that dissected the north of the country, though, the mood was more fearful than celebratory. Would the departing British colonial rulers partition the country  split it into separate Hindu and Muslim nations  before they handed over power? And if they did, where exactly would the new frontiers lie? In Lyallpur, the third largest city in the predominantly Muslim northwest, 21-year-old teacher Santosh Malhotra, a Hindu, was debating whether to move east to avoid getting stuck on the wrong side of a new border. Religious tensions were rising, stoked by historical grievances, demagogic politicians and a sense of chaotic urgency as the day of independence drew closer. Santosh's father, the son of a successful Punjabi trading family, was away at his job in the army. Her mother and her younger siblings had already left to stay with an uncle in New Delhi. With her in Lyallpur were her husband Devraj, a clerk at a cotton mill, and her charismatic older brother Ram Swarup, who said he would ride his beloved horse across the new border if things got too hot. "The situation was not clear for a long time," Santosh remembers now of that period. "We weren't sure what the future held." 

One afternoon, about two months before independence, word came to Santosh that her brother was dead. To this day, the family believes Ram Swarup died after drinking milk poisoned by a Muslim extremist intent on driving out the Hindu community. "A Muslim bribed the Hindu shop owner to poison him," says Santosh. "It broke my heart." The following days were a blur: Santosh's father rushing home from his army job, her mother and uncle returning from New Delhi, her brother's funeral  and growing unrest in the streets after the British confirmed that Lyallpur would be part of the new nation of Pakistan. "We used to discuss freedom from the Britishers," she says. "But we were, to be honest, happy with the existing situation. Freedom, yes, but the changes upturned our lives." 

Santosh's family, while not wealthy, had much to lose. Now 82, Santosh remembers growing up in Lyallpur with affection. "It was a very comfortable childhood," she says, sitting on her bed in New Delhi, a fan slicing slowly through the thick summer air. "We played outside in the streets with no worries." Her father's family traded foodstuffs  wheat, lentils, sugar  and owned property in one of the city's Hindu neighborhoods. Soon after Santosh was born, her father, who had joined a local bank as a clerk, was promoted. "He used to say that I had brought him good luck," says the old woman, the second of her parents' six children. 

Santosh lives now with her son, daughter-in-law and granddaughters in a middle-class neighborhood called Vivekanand Puri. Her bedroom is painted fawn and has a bed, a bedside table and a television on a small wooden stand. She struggles with arthritis and in the past few months has begun spending most of her days in bed watching TV, talking to family members or sleeping. Her long hair is pulled back tightly off her face. Her earlobes hang heavy with gold earrings. She tires easily but when she speaks about the past her eyes light up. 

Most girls in her extended family left school by age 10, but Santosh studied until she was 13. "My mother was educated and she wanted education for me and my sisters," she says. Later Santosh began teaching in a tiny private preschool a few blocks away. When she was 19, a local pandit, or educated man, offered to tutor her so that she could work in a government school. "Teaching was one of the few jobs women could do," she says. "Yes, I liked it but it wasn't a choice. Today's women are more active and it's good they have that choice." Santosh's family arranged her marriage, to a young man named Devraj. Through the heavy veil that covered her face at the wedding, Santosh couldn't make out her new husband's features and didn't lay eyes on him until they arrived at his house the following day. "He was a good man," she says of Devraj, who died in late 2002 and whose photo hangs above her bed. "I was lucky." 

Growing up in the last days of the Raj, Santosh says she was hardly aware of India's colonial overlords. "We were happy in the sense that we could wear gold and go out and there was no theft  it was safe," she remembers. "We were aware of Mr. Gandhi, but everyone used to talk that he would be killed one day because of the work he was doing." On the night of independence, Santosh, her husband and her mother were still in Lyallpur, now renamed Faisalabad, despite the rising violence against Hindus and Sikhs in the city. Santosh's Muslim neighbors said they would hide her and her relatives until things calmed down. But when a cousin in the army offered the family a place on a military truck heading for the safety of India, Santosh and her mother signed up. (Her husband decided to stay on to tie up their affairs, hopeful that his policeman brother-in-law could offer him some protection.) 

Leaving was incredibly dangerous. There were four army trucks and one car in all, into which some 500 people were crammed like entombed warriors, upright and shoulder to shoulder, Santosh's mother perched on a box that contained her only remaining possessions  a sari, a suit, some jewelry and a photo of her dead son. "It was raining, children were thirsty," remembers Santosh. "I was worried about my husband." Just before they reached Lahore, one of the trucks broke down and the convoy stopped for about an hour while it was repaired. There was a steady stream of buses and trucks headed for the border and trucks coming the other way, too, carrying Muslim refugees from India. Rioters were attacking some of the vehicles headed out of Pakistan. At one point, Santosh says, she saw a truckload of bodies. "Everyone was praying to the gods that we would reach India safely," she says. Finally, the convoy reached Amritsar, just across the new border. 

Over the coming weeks between 800,000 and 2 million people died in the sectarian fighting. Up to 14 million people crossed the world's newest frontier, an incredible exchange of humanity and one of the largest mass migrations in history. Santosh and her family ultimately reached New Delhi, where they lived in tents for 18 months until the ruling Indian National Congress gave them (and thousands of others) land as compensation for their forced migration. Jetendar Malhotra, Santosh and Devraj's chubby-faced third child, was born in 1953. By then Santosh had started teaching again. "I had to earn because everything we had was left in Pakistan," she says. Her husband got a job with a government cotton mill. "I don't have ill feeling about that time," she says. "I was angry but when you see so many people in the same position with the same problems, you know it's not just happening to you. It was not a personal suffering." 

With both his parents working, Jetendar Malhotra spent much of his childhood at home with his three brothers. He liked school, he says, but also got into trouble occasionally for pulling pranks on teachers and classmates. He loved playing cricket and badminton. By the beginning of the 1960s, India's direction for the next few decades had been set. Under the paternalistic watch of Jawaharlal Nehru, who led independent India for its first 17 years, the government poured money into education, gave more rights to women and criminalized caste discrimination. Economic policies were increasingly socialist and protectionist. The government began investing heavily in industry and agriculture, and nationalized companies in so-called strategic industries such as mining, banking and airlines. "The world saw us as a poor place," says Jetendar today. "And we were. The idea was to protect the country until we could survive against everyone else." But while high import taxes were good for the country in the short term, Jetendar says, they also meant goods such as televisions, cars and refrigerators weren't available or were too expensive for average Indians. 

The shift to socialism and the "license Raj"  the government system of restricting competition in key industries to a handful of large family-owned companies  left India's economy mired in mediocrity. Economic growth averaged just 3.6% in the 1970s, a laggardly rate that barely kept up with population growth. Commentators dubbed India's performance "the Hindu rate of growth" as if the nation was doomed to poverty because of some innate flaw. With so much of the economy under state control, government jobs were often the best and safest option. After leaving school, Jetendar studied commerce via correspondence courses. During the day he would sell small electrical goods  irons, toasters, heaters  at a 40-50% markup. In a day he could make 300 to 500 rupees, $7.50 to $12.40 at today's exchange rates and a fortune in the early 1970s. But after trading for a few years, Jetendar decided on a government job  first at a state-owned chemical mill and then with the New Delhi tourism department. "Trading was temporary. I looked at it like, 'Today I have a business but tomorrow I might not.' With a government job the earning might not have been as much but it was guaranteed and the security was there for a long time." 

For those without a job with the government or one of the heavily protected family-owned conglomerates, life was much tougher. Millions sought a new start in places like Britain and the U.S. One of Jetendar's cousins moved to London in the 1970s to marry an Indian there, and in 1976 Jetendar's family arranged for him to marry a girl in the U.K. But at the elaborate engagement party the family held in India, Jetendar's would-be father-in-law insisted he move to London. Jetendar refused. "I liked her," he says now. "But I wanted to stay in India." 

In 1979 Jetendar began managing a state-owned liquor store in New Delhi. Three years later he bought his first scooter and the following year married Madhu, a Hindi teacher his mother Santosh had met when visiting a school. The couple had two girls, Yukti and Neeti. At one of two government-owned liquor stores Jetendar now helps manage, he shows me boxes of Indian whiskey that, at just over $1 per 750-ml bottle, is popular with working-class men. In the past few years, as the Indian middle class has grown and tastes have changed, government stores have also begun to sell wine. Jetendar recently attended a three-day wine-tasting course, though he admits that in his neighborhood "wine is not yet that popular." Jetendar spends most days sitting at a metal desk perched on a concrete mezzanine floor that juts out over the shop's basement. A fluorescent light casts an artificial glow across his books. A stint at a government catering company "was better," he says. "The office had air-conditioning." He pauses to look around his modest fief. "But you work hard wherever you are to make your kids' lives better. That's the way I look at it." 

In the living room of the Malhotras' modest, single-story home hangs a religious picture along with a painting by Yukti, now 22, depicting a white dove. An air-conditioning unit hums in the window and a red carpet covers the floor in the middle of the room underneath a wooden coffee table. A cabinet at one end of the room holds a stereo system, some vases and porcelain knickknacks. In a tiny parking area outside sits the family's first car, a boxy Maruti 800, which Jetendar bought in 1995. In the car's rear window a large L in sun-bleached red warns other motorists that Neeti, 19, is learning to drive. 

Yukti was born just as a new revolution was getting underway  this time not political but economic. Annual growth rates had risen to about 5% during the 1980s. But by 1991 the economy was a mess. The Indian government was broke and about to default on its international loans. Forced to act, New Delhi began a far-reaching economic-liberalization program that opened up trade and foreign investment, began to dismantle the infamous "license Raj" and set India on a path to the growth rate of more than 8% that it enjoys today. 

Yukti, who is shy and screws her face up in a frown when she's thinking hard, might not have experienced the old India firsthand, but she has little doubt that the changes are for the better. Her life has been much easier than that of her parents, she admits. She grew up knowing she would go to college. "My mother used to do household work as well as study," she says. "We hardly step into the kitchen." Halfway through an M.B.A. at Indraprastha University in New Delhi, Yukti says she wants to work for a big multinational or one of India's successful software or outsourcing firms. "With a government job you don't have opportunity for growth," she says, adding that she expects to be earning as much as her father within two or three years of starting her career. "The new generation understands that before, people looked for security. But now security is not the only criteria. Now people are more focused on growth." 

Like most young urban Indians, Yukti moves easily between the traditional and the modern. She wears jeans and T shirts around the house, business attire during her recent stint as an intern at Tata Consultancy Services, India's biggest software company, and saris to weddings and other family celebrations. Likewise, her views on marriage are a blend of the new and of traditionally conservative Indian beliefs. Unlike her grandmother, Yukti cannot imagine marrying someone she has never met. If her marriage is arranged, she says she will approve the man first, and she is free to find a mate on her own. But either way, she says she would never marry without her parents' blessing. "I obviously want them to be happy," she says. Her father Jetendar nods his agreement: "We want to be sure that the boy is educated, that he's stable in his life and his job." 

But Yukti isn't thinking about marriage just yet. She spends much of her time studying. In the final year of her undergraduate degree she took private classes designed to help her win a spot in an M.B.A. course. Her sister Neeti is doing the same. When they aren't studying they spend time with friends or family  or on the Web. "Television I used to like more, but now it's surfing the Net," says Yukti, who regularly chats with friends online. "We scrap [message] each other about all sorts of stuff: movies, study, whatever." Madhu, Yukti's mother, who is as outgoing and talkative as her husband is reserved and quiet, says she has given her "full freedom  but I always keep watch whether she's online or wherever." 

Whatever happens in the future, India will be Yukti's home. "I would like to travel for a holiday but never to live," she says. "Somehow I feel we have a pretty good home country. Why do we want to give all the other countries the benefit of what we can do here? There are so many opportunities." India's fractious politicians, though, need to start delivering. "The political scene here is very bad," she says. "No one has the responsibility to complete things. They promise and then just leave [projects]. We need to finish what we start." 

The coming decade or so may determine whether India is able to finish what it has started. For the country to prosper, India's government and its people need to figure out a way to spread the current boom to the two-thirds of the population in rural areas who are still poor. Succeed, and India could become a global power alongside China and the U.S. Fail, and there is a real chance that insurgencies festering around the country could explode. 

Expectations are higher than ever. India is seeing not only a revolution of the economy, but also one of the national mind-set. Fading from consciousness is Gandhi's spinning wheel and the dignity of poverty. Today improving your situation is desirable. Striving is O.K. "The big thing now is the whole world is around money and everything is so expensive," says Yukti. "In my parents' time you just needed the basic necessities. Now you need an a/c car, you need a TV, you need more luxurious things. Knowingly or unknowingly you compare yourself to others and decide that you, too, must have this." 

Madhu remembers when her father bought their first television. Everyone in the neighborhood would drop by to watch. "It was suffocating with everyone in there," she remembers. "But my father wanted to invite people so no one would think we were rich. Now everybody is rich in their own sense." Perhaps not rich  not yet. But three generations after India's independence, wealth is no longer something to be hidden from the neighbors. Better still, India's youth have something that is more valuable than TVs and cars and designer handbags: they have the hope that goes with a future full of possibilities.


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## Bushroda

*Rising Star*
By MICHAEL ELLIOTT, EDITOR, TIME INTERNATIONAL 

Jawaharlal Nehru's speech on Aug. 14, 1947, is one of the great pieces of oratory, something that still puts a chill down my spine whenever I read it. Nehru  referring to India's "unending quest" from the "dawn of history"  knew that there was something odd about celebrating political independence as if it was a dawn: colonial masters didn't invent India when they first arrived there or when they left. At the same time, shaking off the European yoke plainly marked a change, not just for the subcontinent, but the world. "A new star rises," said Nehru, "a new hope comes into being." 

Even those who love India with the crazy passion it engenders would admit that such hope has not always been made flesh in the past 60 years. But when we came to prepare our special issue on the anniversary of independence, we saw sign after sign that many of the old doubts and disappointments had fallen away. "I was born in the 1970s," says Nilanjan Das, deputy art director of TIME Asia, who designed the issue, and is Indian himself. It was, he says, "a time of indecisiveness and insecurity. But now we are in the middle of this amazing ride." 

It's well known that economically, India is going places. "Western businessmen who have been losing sleep over China may be worrying about the wrong country," says senior editor Jim Erickson, who managed the project wonderfully with his customary sure editing touch and attention to detail. "It is Indian corporations that are proving to be formidable competitors in the global, information-driven economy." At the same time, we wanted to make sure that we captured the human dimension of change, which New Delhi bureau chief Simon Robinson did by looking at three generations of a family. The Malhotras, Robinson says "were gracious in their welcome and generous with their time  their tale is a great reminder that the changes in India over the past 60 years are not just abstract numbers on paper but the stories of lives and families." In her study of Islam on the subcontinent, Aryn Baker looks at the way in which such lives and families have been shaped by faith, and by memory. "It always amazes me," she says, "how the past is very present in Pakistan's politics and society." 

Our writers and editors were, as always, supported in their endeavors by our terrific art and photo team in Hong Kong. Graphics maestro Dennis Wong worked alongside Das, and TIME Asia picture editor Maria Wood and deputy picture editor Wei Leng Tay did a tremendous job tracking down the photos needed to make the package sing. Tim Morrison, with Robinson and reporter Ishaan Tharoor, ensured that what couldn't fit in the magazine was beautifully displayed on TIME.com. 

I'm grateful to all of those who produced this issue and trust that you will enjoy reading it. India, says Tharoor, whose essay on democracy you will find inside, is a place that one sees through a "kaleidoscopic prism, its cacophonous street unafraid of its blemishes and warts." We hope you'll find evidence of that newfound Indian confidence  a confidence for which Nehru yearned 60 years ago  in this issue.
__________________________________________________________________________

*I have posted almost all the articles that are presented by TIME magazine. Please, refer to the above posts on this page.*


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## Bushroda

*ANA launches business-class flights to Mumbai* 
The News, Pakistan 

TOKYO: Japans All Nippon Airways announced on Thursday a new service between Tokyo and the Indian financial capital of Mumbai catering exclusively to well-heeled business travellers.

A Boeing-737 with 36 business class seats will fly six times a week to and from Tokyo Narita airport and Mumbai from September 1 with no room for economy class passengers in the rear.

Mumbai is Indias western gateway and centre of culture and finance. Many Japanese firms have entered Mumbai, said ANA vice president Shinichiro Ito.

With this new flight we would like to contribute to the further development of relations between Japan and India, he said at a press conference.

The new service reflects expanding business ties between Japan and India, which is enjoying near double-digit economic growth. It also follows the success of business class-only services criss-crossing the Atlantic between the United States and Europe.

ANA does not currently offer any flights to India. The cheapest fare for the new ANA business jet service between Tokyo Narita airport and Mumbai is 430,000 yen ($3,622), according to ANAs website.

Passengers get a standard business-class seat with a 61-inch pitch, as well as a portable media player with HDD for music, movies and videos to keep them entertained during the nine hour-plus flight.

Our main target is Japanese business people flying from Japan to India as there are already many Japanese companies investing in the Mumbai area, said Ryoichi Fujisaki, a spokesman for Japans second largest airline. But he said ANA would also promote its new flights to Indian travellers.

From October 28 until next March 29 the service will make a stop in the southwestern city of Nagasaki on the outbound flight to Mumbai, also known as Bombay.

With no Concorde to whiz rushed executives across the Atlantic faster than the speed of sound, business-class only flights have grown increasingly popular between the United States and Europe in recent years.

Their success has spawned a new wave of carriers offering nothing but business class seats, such as Britains Silverjet, US airline Eos and Frances LAvion.


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## Bushroda

*Salaries of India's forex traders will jump by 30%* 
Gulf News, United Arab Emirates 
Published: August 02, 2007, 23:15

Mumbai: The salaries of foreign exchange traders in India are expected to jump by up to 30 per cent this year as the rising rupee stokes demand for hedging services and trading volumes swell.

Some traders are now earning as much as their counterparts in Asian centres like Singapore, and keeping experienced staff is increasingly expensive. Banks face turnover of up to a fifth of staff each year.

"Retention is the name of the game. Banks don't mind paying heavily for it. Treasury is making so much money that they don't mind sharing a bit of the profits," said Tzeitel Fernandes at human resources firm Hewitt Associates.

India's annual foreign exchange market turnover has grown to a gross $6.5 trillion in the fiscal year 2006-07 from $1.4 trillion six years earlier. 

"Volumes flowing through the system are much more than last year," said Hitendra Dave, co-head of global markets for treasury at HSBC in India.

Dave guesses salaries have at least doubled in the past 12 to 18 months, while treasury revenues for the industry have doubled in the past year.

More banks are offering treasury products to their corporate clients, whose overseas exposure is increasing as India's economy opens up, and foreign banks that are boosting operations in financial centre Mumbai are willing to pay more for talent.

Global houses like Credit Suisse, Lehman Brothers and Goldman Sachs have been ramping up in India and hiring experienced treasury sales and dealing staff. The new arrivals often do not train staff up themselves, they buy experienced talent, senior traders say.

"I lost a lot of people last year, but the bank is getting wise to the fact it's silly to lose people - that you have to do all you can to retain them," said one head of trading at a foreign bank that has been in India for several years.

*Beating the traffic*

Traders say the average annual salary for a middle manager in treasury at a private sector or foreign bank is between Rs1.5 million and Rs2 million ($37,000-$49,500). That's excluding bonuses, which can add another Rs8 million, nearly $200,000.

That's still below Hong Kong, where middle-ranking foreign exchange traders pocket $220,000-$300,000 a year, including bonus. But it's near or exceeding levels in Singapore, the world's fourth-largest currency trading centre, where traders earn about S$100,000 ($66,000) a year before sales commissions.

In London, big bonuses often mean new sports cars or diamond pendants. But Mumbai's traders use their new-found wealth to beat the traffic and upgrade their homes.

One senior currency trader, who moved from a private sector Indian bank to a foreign one, used to commute for an hour-and-a-half on the city's overflowing trains. After a big bonus last year, he has a Honda City sedan and a bigger apartment just half an hour's drive from his office.

The advent of private equity and venture capitalists has also taken a toll on employers' wage bills and staff turnover.

*Talent drain*

"It's a huge drain in talent on treasury, which has contributed to the rise in wages and attrition," Fernandes said, adding banks were getting creative to retain staff, offering them equity, deferred bonuses and overseas postings.

Some banks also train up B or C teams.

"We always have people sitting on the bench," said a senior trader at an Indian bank. ICICI Bank, India's largest private bank, says its treasury team has grown by 63 per cent since March 2006, on top of a 60 per cent expansion in the 12 months before.

Seasoned market players doubt the boom times will last. They expect consolidation between local banks as a central bank regulatory review nears in 2009.

Others think the sector will see an influx of talent attracted by the high pay, eventually forcing down wages.

But for now, the only way to do business is to pay up.


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## Bushroda

*India ready to help SA with 2010 preparations*
*Mlambo-Ngcuka says South Africa stands to benefit a lot from India* 
SABC News, South Africa
August 02, 2007, 22:15

Phumzile Mlambo-Ncguka, SA's deputy president, says South Africa stands to benefit a lot from India, in terms of acquiring necessary skills in specialised fields such as software engineering and financing. She was speaking at the South Africa-India Business Conclave, under way in Sandton, Johannesburg.

The two-day meeting aims to promote business, investment and tourism between the two nations. More than 500 delegates are attending. The deputy president says India and South Africa are key role players in advancing the developmental agenda of the South.

Ashwani Khumar, India's minister of industry, says New Delhi is ready to assist Pretoria with the infrastructure development ahead of the 2010 World Cup. Khumar has also invited South African companies to take advantage of the growing Indian economy.


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## Bushroda

*The Heart Of The Matter* 
*India's interests, in both the civilian and strategic fields are protected. Whatever the strategic purposes of the US, a friendlier and closer relationship is probably reflective of the goals of India's new generation for technological freedom.* 

Arundhati Ghose 

July seems to be a particularly significant month for Prime Minister Manmohan Singh--in July 1991, as Finance Minister in the Narasimha Rao government, he announced the liberalization of industry from government controls in his budget speech, starting the move towards the opening up of the Indian economy. In July 2005, in a Joint Statement with President Bush, he initiated a process aimed at removing three decades of technology denial to India by most of the countries with advanced technology. The process was centred on an agreement with the US, the progenitor of the denial regimes, in civilian nuclear energy. And then, last week, after a rocky and strenuous two years of negotiations, the government of India approved such an agreement. 

While the text is not yet publicly available, it is clear that, in spite of fears and dire prognostications, Indias negotiators have been able to project and protect Indias interests, in both the civilian and strategic fields. It is true that, as in the case of his economic reforms, Prime Minister Manmohan Singh is not solely responsible for this achievement; he built on a basis established by his predecessors and has been assisted be an outstanding team of negotiators.

To briefly put the agreement--called the 123 agreement as it is under that section of the US Atomic Energy Act that the US signs such cooperation agreements with other countries--into a context, it is necessary to recall that India started her nuclear energy programme with international cooperation, including with the US, and in fact signed on to a Partial Test Ban Treaty in 1963. However, when the US and the USSR pushed through a discriminatory Nuclear non-Proliferation Treaty in 1970, after China had conducted her first nuclear test in 1964, India refused to join. In 1971, the nuclear armed USS Enterprise sailed into the Bay of Bengal to put pressure on an India that was winning the Bangladesh war, India tested a nuclear device, in 1974. Enraged, the US not only passed domestic laws to curtail the flow of all dual use technology to India, but by 1975, had established the Nuclear Suppliers Group to ensure that the technology denial regime was broad based. The nuclear issue became, and remained, for the next thirty years, a major obstacle in normal India-US relations. 

In 1998, India conducted five nuclear tests and declared herself a nuclear weapon state . After an initial period of outrage, the US government, under President Clinton, a Democrat, appeared to move towards an engagement with India, recognizing that Indias security interests had to be taken into account, even while pushing for a global non-proliferation regime with progressively stricter controls on the export of dual use items and technologies to India. The objective of that government was to discuss civilian nuclear cooperation with India, even while attempting to cap, roll back and eliminate Indias weapons programme. Clearly, this approach did not lead to any significant improvement in relations.

In the meanwhile, Indias economy had started to grow and the world itself had started to change. The Bush Administration, a Republican one, realized that it had much to gain if it could forge a new and friendly relationship with India, and for that, the nuclear issue had to be resolved. To accomplish this, the US had to change its domestic law to favour only one country, India. For India, an opportunity presented itself to unshackle the nuclear energy sector, and to benefit from free flows of high technology to enable her to build a competitive knowledge based economy, without compromising her security interests or her technological independence.

India offered to separate her civilian and military facilities and place the former under IAEA safeguards; in return the US proceeded to change its laws to exceptionalise India. The Hyde Act, finally passed by the US Congress, did exceptionalise India, but it also introduced a series of conditions which made the Act as much a non-proliferation act as a cooperation one. This was a reflection of an entrenched distrust of India in parts of the US establishment, with memories of not only Indias own hostility to the US during the Cold War, but the indignation at Indias nuclear weapons tests, still alive. It was this mind set ( with an almost mirror image in India) that the negotiators of the Agreement had to contend with. It has been held that the US Congress, in permitting civilian nuclear cooperation with India, has only reiterated those sections of US law that were not amended; however, the inclusion of sections of a US non-proliferation law that had generic reference were made specific to India.

This would have been the biggest hurdle before the negotiators, one that was handled by the US side as the law applied to them and could not bind India. Clearly, this obstacle was overcome by intervention at the political level which had determined that friendly relations with India required flexibility and sensitivity to Indias concerns. There are already reports of a negative reaction in the US, with some US Congressmen taking strong exception to the concessions made by the US to India in the Agreement.

However, India had specific concerns, too. Indias nuclear programme depends on reprocessing spent fuel; the US, in its other 123 agreements gives such rights (when using US fuel or materiel) only to safeguarded facilities. India, which had not, in its separation plan, provided for any reprocessing plants to be placed under safeguards, offered, as a compromise to build a special reprocessing plant for US fuel which it would place under safeguards. In any case, US law does not bar reprocessing rights. Secondly, India had, in March 2006, agreed to place each civilian facility under safeguards for the lifetime of the facility, provided such facility was assured fuel in perpetuity. This was a major issue, as India still had bitter memories of Tarapur. According to US law, if a non-nuclear weapon state tested a nuclear weapon all cooperation would cease, and all materiel or fuel imported from the US would have to be returned. This would have implied that either Indias investments or her freedom to test in the future, should she require to do so, would be jeopardized. Obviously, while politically the US accepted Indias possession of nuclear weapons, no amendment had been introduced to the legal provisions. A third area of difficulty related to the transfer of enrichment and reprocessing technologies; while India does not need such technologies, having developed her own, she could not accept any discrimination in treatment, which might impact on some components she may require in the future. According to the Prime Minister and the External Affairs Minister, all Indias concerns have been "satisfactorily" met in the Agreement.

Of course, there are still further steps to be taken and obstacles to be overcome. The Nuclear Suppliers Group has to be persuaded to make the same exception for India--will China agree, without some provision for Pakistan? India has to negotiate a sui generis India-specific safeguards agreement with the IAEA for her civilian reactors, the US Congress has to approve the whole deal after it is completed, not necessarily a foregone conclusion. In India, opposition Parties, particularly the Left front have to concur-an uncertain eventuality.

To try and change mindsets, to overcome decades of estrangement, distrust and adversarial relations, through a single Agreement, however significant, is a giant task Whatever the strategic purposes of the US, a friendlier and closer relationship is probably reflective of the goals of Indias new generation for technological freedom.. It is the heart of the matter.


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## Bushroda

*PSBs handicapped by curbs on equity *

KOLKATA: State Bank of India Chairman and Managing Director O. P. Bhatt on Thursday regretted that public sector banks (PSBs) were restricted from raising capital which was hindering them from advancing lendable resources. 

He said there was restriction on banks that the government holding in PSBs should not go down below 51 per cent. 

Speaking at the Banking Conclave 2007, organised by the Federation of Indian Chambers of Commerce and Industry (Eastern Region) here, Mr. Bhatt said 78 per cent of the Indian banking industry was PSBs. 

Mr. Bhatt said the Indian banking system was not in a position to finance the entire amount needed for the development of the infrastructure sector, which was put at $300-400 billion. 

He said there was a possibility that the countrys booming economy might falter due to inadequate growth in the infrastructure sector. The issue of restrictions of government holding in PSBs would have to be debated, adding that there was scope to do away with it, he added. 

This has to be made to happen, and there is a potential to make it happen, he said. Mr. Bhatt said for SBI, the bank had the option to dilute up to 55 per cent of the equity from the present government holding of 59 per cent. Under the current valuation, the bank could raise up to Rs. 5,000 crore by diluting four per cent of the equity, he added. In spite of capital raising restrictions, SBI was the largest lender to the infrastructure sector. 

During the current financial year, the asset base of the bank was projected to be in the region of Rs. 80,000 crore to Rs. 100,000 crore. 

Mr. Bhatt said banks would have to deal with risk mitigating issues, particularly in new businesses. Banks did not know how to finance knowledge-based industries as they lacked expertise. SBI was focusing on financial inclusion by reaching out to distant villages, he added. 

Mr. Bhatt said the bank had shortlisted three foreign partners for its proposed foray into the general insurance venture. He said SBI would form a holding company for SBI Life and SBI Mutual Fund shortly. Strategic investors might also be given a part of the stake in the holding company. 

Giving the rationale for floating the holding company, Mr. Bhatt said it would be done to synergise operations and get a valuation. The holding company might get listed on the bourses at a later date, he said. SBI would create a separate company for management of pension funds, he said. On capital requirement, he said SBI would require Rs. 15,000 crore to sustain business.  PTI


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## Bushroda

*Stock and awe*
First Published: 00:22 IST(3/8/2007)

The global meltdown in stock prices has, as was only to be expected, hit Indian stock markets hard. Expected, because globalisation has both an upside and a downside. For quite some time now, Indian corporates have been reaping the benefits of a sustained boom in global economies, as well as easy access to cheap credit in overseas markets. This has helped them to grow rapidly in size, expand their international presence, finance large mergers and acquisitions abroad, and show healthy profits. Expectedly, this made their stocks attractive investments, both for domestic and foreign investors. The result has been a Sensex on steroids, and a massive influx of foreign funds. As of August 1, data released by markets regulator Securities and Exchange Board of India shows that foreign institutional investors (FIIs) had pumped in more than Rs 43,237 crore, or over $10.3 billion, into Indian equities. This is a massive vote of confidence in the Indian growth story. FII buying has, in fact, been one of the major accelerators of the Sensexs rapid rise. However, this comes with a caveat: this money originates overseas, and will inevitably react to overseas linkages.

The massive slide over the past few trading sessions, therefore, has to be seen in context. Worries over looming credit defaults in the US sent stock prices crashing worldwide. The tremors rocked India as well. In just two days of freefall, the benchmark Sensex has shed more than 1,100 points. Investors  both big and small  have been hit hard. On Wednesday alone, the combined value of listed stocks declined by Rs 1,81,000 crore. However, most analysts see this as a correction.

The fundamentals appear to justify this view. Over the past five years, the Sensex has a return of almost 500 per cent. This years return, despite the crash, is still over 28 per cent. More importantly, the Sensexs long-term trend is still charting an upward path. Our economy is also not heavily dependent on the US. The International Monetary Fund raised its global growth estimate to 5.2 per cent barely a fortnight ago. Indias GDP growth for the current fiscal is expected to be in the 9-10 per cent range. While investors definitely need to tread cautiously in the short-term, the long-term outlook is still positive.


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## Bushroda

*ANA targets higher fliers with new business-class-only service to Mumbai*
Channel News Asia, Singapore
03 August 2007

TOKYO: Japan's All Nippon Airways announced Thursday a new service between Tokyo and the Indian financial capital of Mumbai catering exclusively to well-heeled business travellers. 

A Boeing-737 with 36 business class seats will fly six times a week to and from Tokyo Narita airport and Mumbai from September 1 -- with no room for economy class passengers in the rear. 

The airline is believed to be the first in Asia to offer business class-only flights, which have already taken to the skies elsewhere. 

"Mumbai is India's western gateway and centre of culture and finance. Many Japanese firms have entered Mumbai," said ANA vice president Shinichiro Ito. 

"With this new flight we would like to contribute to the further development of relations between Japan and India," he said at a press conference. 

The new service reflects expanding business ties between Japan and India, which is enjoying near double-digit economic growth. 

It also follows the success of business class-only services criss-crossing the Atlantic between the United States and Europe. 

Analysts said other airlines in Asia would carefully study the market for such services before following ANA's lead. 

"The business jet is obviously a trial for ANA," said Osuke Itagaki, an aviation analyst at Credit Suisse. 

"The airline will have to examine whether it can earn a profit or not. I doubt similar flights will suddenly increase in Asia in a short period of time," he said. 

The cheapest fare for the new ANA business jet service between Tokyo Narita airport and Mumbai is 430,000 yen (3,622 US dollars), according to ANA's website. 

Passengers get a standard business-class seat with a 61-inch pitch, as well as a portable media player with music, movies and videos to keep them entertained during the nine hour-plus flight. 

"Our main target is Japanese business people flying from Japan to India as there are already many Japanese companies investing in the Mumbai area," said Ryoichi Fujisaki, a spokesman for Japan's second largest airline. 

But he said ANA would also promote its new flights to Indian travellers. ANA does not currently offer any flights to India. 

From October 28 until next March 29 the service will make a stop in the southwestern city of Nagasaki on the outbound flight to Mumbai, also known as Bombay. 

With no Concorde to whiz rushed executives across the Atlantic faster than the speed of sound, business-class only flights have grown increasingly popular between the United States and Europe in recent years. 

Their success has spawned a new wave of carriers offering nothing but business class seats, such as Britain's Silverjet, US airline Eos and France's L'Avion. 

Analysts said the new service could be lucrative for ANA. 

"I guess potential demand for business jet flights to and from India is high in Asia, but it will probably take time for ANA to make its customers aware of the new service," said Mizuho Investors Securities analyst Takahiko Kishi. 

The aviation authorities of India and Japan in December agreed to increase the total number of flights between the two countries to 42 from 18 as part of efforts to strengthen bilateral ties.


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## Bushroda

*How the leaders delivered* 
A K Bhattacharya / New Delhi August 03, 2007 

Let this review start with a general advisory: Do not get put off by the title of this book. 

Yes, this is an anthology of important speeches made by eminent Indians between 1877 and now. Its also true that speeches being what they are can generally be very boring and soporific. 

But the 161 speeches (classified under 17 broad themes) that find place in this volume are neither boring nor soporific. They are selected with great care and thought. Indeed, they capture the evolution of India as a nation over the years. Almost all the speeches articulate the various ways India has evolved as seen by some of its greatest thinkers, social reformers, economists, scientists and politiciansbefore independence and after. 

Thus, Surendranath Banerjea or Dadabhai Naoroji emerge in a new lightnot as intellectual or political collaborators of colonialism, but as forces that saw in the British raj the many virtues that could be assimilated and absorbed. As Rakesh Batabyal, the editor of the volume, argues, all these leaders believed in what Karl Marx described as the regenerative role of colonialism. Arguing in those days that the British education system or the railways network also had some redeeming features required political courage and the vision to look ahead. 

Another idea that these leaders of the early nineteenth century grappled with was whether India could emerge as a nation from merely being a geographical entity. Gokhale, Naoroji, Banerjea and Gandhi spoke at length and at different times on how the various states under the British raj could be united as a single political entity. They all seemed to have recognised the daunting task. But not for once did they give up in arguing their case cogently. 

Eventually, as the speeches reproduced here show us, it took the grit and determination of Jawaharlal Nehru and Sardar Vallabhbhai Patel to use persuasion and even threats to get all the 500-odd princely states to agree and submit to the sovereignty of the Indian state. One of Patels speeches made at Jaipur in the presence of the Kapurthala royalty gives adequate evidence of how the then home minister had alternated gentle persuasion with blatant threat to get the Nizam of Hyderabad and some other recalcitrant kings to sign on the dotted line. 

Equally bold is Nalini Ranjan Sarkar, who headed the Federation of Indian Chambers of Commerce and Industry (Ficci) in 1934. In his presidential speech that year, he outlined a detailed agenda for action to usher in planned economic development in India. His speech, delivered at a time when most Indian political leaders were in jail, showed that Indian business leaders and Sarkar in particular were clear in their mind that building a strong industrial base and attaining high economic growth were as important goals as political freedom from the British rule. Not surprisingly, it is Sarkar again who pushed the Indian government to set up the Indian Institutes of Technology so that the country could produce engineers of international class. 

The range of the subjects covered by the speeches is indeed vastfrom Jagadish Chandra Bose on his belief in the existence of life in plants to Swami Vivekananda on the social purpose of the Hindu religion, CV Raman on the Nobel prize winning Raman Effect, Kanu Sanyal on the formation of the CPI-ML and to Indira Gandhi on why the commercial banks had to be nationalised. 

The speeches become more interesting during the post-independence era. It is Brajesh Mishra who in 1974 explains to the world why the Indian government went in for a nuclear test at Pokhran. In 1998, Brajesh Mishra is part of the Vajpayee government at the Centre. And the explanation offered by Vajpayee after the series of nuclear tests in May 1998 is quite different. 

What assures for this book a permanent place in ones bookshelf is the highly informative and succinct introduction to each of the speeches. The context and the significance of the speech are outlined with an objectivity that would be the envy of any historian. 

Objectivity suffers only in one placethe section which carries speeches on economy and development. The volume editor seems to have been ideologically biased towards the economic views espoused by the Left. How otherwise does one explain the inclusion of a fairly ordinary and long speech of Somenath Chatterjee, at present the Lok Sabha Speaker! The speech is ostensibly a critique of the new economic policies introduced by the PV Narasimha Rao government, but the arguments therein are poorly marshalled and flawed as well. 

A notable omission from this volume is the historic speech delivered by Ghanshyam Das Birla at a Ficci luncheon meeting in the late 1970s. In that speech, Birla voiced the collective anguish of Indian business leaders, who were constrained by a plethora of restrictive economic laws. Birla went a step ahead and called upon business leaders to violate the economic laws that barred them from producing more. Among those who listened to Birla at that meeting was George Fernandes, the industry minister at that time. Such a speech should have surely found a place in a volume that is otherwise unmatched in its comprehensiveness.


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## Bushroda

*Infrastructure identified as priority area by IFC*
2007-08-02 18:23:25 
Source : Moneycontrol.com

IFC, a member of the World Bank Group, today reaffirmed its commitment to contribute to India's economy by expanding its investments in private enterprises in the sectors where IFC is needed most. IFC Vice Presidents Farida Khambata and Declan Duff joined South Asia Director Paolo M. Martelli in India this week to discuss with government and private sector partners how to move ahead with IFC's growing focus on India's infrastructure, midsize companies, and financially underserved markets. 

In the financial year ending June 30, 2007, private sector projects worth $3 billion were supported as a result of IFC's assistance to the Indian corporate sector. IFC's annual investments in India this year surpassed the $1 billion mark for the first time since IFC's founding in 1956. IFC invested more in India in FY07 than in any other country, making the India investment portfolio its second largest after Russia. 

This year IFC also doubled its portfolio in the infrastructure sector, to $600 million. Investments ranged from natural gas to wind power, and from port services to a fund for developing public-private projects in infrastructure sector. 

Dhanendra Kumar, who represents India on IFC's Board of Directors, welcomed the development, saying, "Today, a poised and confident India has set larger goals for inclusive growth and sustainable development. IFC is providing valuable advice and financing to help the private sector contribute to these goals. We are particularly pleased that a significant part of IFC's commitments in the financial year have been to the infrastructure sector, in keeping with India's priorities."

"India's impressive growth is improving the quality of life. The government seeks to ensure that growth is inclusive and sustainable. We want to help this important effort by boosting rural growth, building infrastructure, and supporting reform," Declan Duff, IFC Vice President for Industries, explained.

Farida Khambata, IFC Vice President for Asia and Latin America, elaborated, "India's priority is infrastructure, where the problem today is a shortage of bankable projects. IFC is setting up an infrastructure advisory facility with donor support to develop bankable public-private partnerships, in close collaboration with government agencies at the central and state levels. This will help create model PPP arrangements in newer subsectors and increase access to infrastructure services across the South Asia region." 

Paolo M. Martelli, IFC's newly appointed South Asia Director, added, "IFC not only invests, but also manages advisory programs in challenging markets. We offer our global and local resources to the private sector in support of the larger goal of sustainable growth and poverty reduction." 

IFC's strategic priorities include strengthening the focus on challenging markets; differentiating through sustainability; addressing constraints to private sector growth in infrastructure, health, and education; supporting local mid-tier manufacturing companies become globally competitive and helping local financial market development through institution-building and innovative financial products.

IFC's products and services have expanded from the original dollar-denominated senior loans and equity, to include loans in a variety of currencies, including Indian rupees, quasi-equities of varying types, currency and interest rate swaps and, most recently, carbon credits. IFC's advisory services are an increasingly integrated component of the Corporation's contribution to private sector growth in developing regions. 

Today IFC's activities in India cover a wide range of sectors, from power, transportation, and oil and gas to manufacturing companies in auto components, engineering, pharma sectors to microfinance and housing finance institutions, poultry and vegetable farms, IT companies, and hospitals. 

IFC's focus is on supporting mid-tier banks and manufacturing companies that aspire to global competitiveness and lack easy access to long-term funding. In India, IFC was a founding investor in key financial institutions, such as HDFC and IDFC that remain partners today.

Since 1956, IFC has supported then early-stage Indian companies, such as Bharat Forge and Titan Watches, that have since grown into global brands; firms such as Bajaj Scooters, Arvind Mills, and Moser Baer, that have become household names; and industry leaders, including Tata Steel and Larsen and Toubro, that had sought to establish credibility in global markets. 

Today too, IFC selects mid-sized high growth companies that are modernizing, restructuring, or expanding to become globally competitive. Recent investments include include MSPL, Lanco, ABC Coffee, Ocimum Bio, OCL, Kanoria, Suguna Poultry, Electrotherm, LG Balakrishnan, PSL, Drishti, Nevis, Montalvo, Indecomm, and iLabs.

IFC focuses on combining investments with capacity-building advisory services in such areas as governance structures, staff training, and systems and procedures for management, accounting, and risk assessment.


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## Bushroda

*Thai jewellery traders complain of market seizure by Indians*
Asia Thailand Biz
Posted: 2007/08/02
Mathaba News Network, Thailand 

Thai jewellery traders have complained their markets in the eastern province of Chantaburi have been seized by some groups of Indian gem traders through a price distortion.

Pornchai Chuenchomlada, president of the Thai Precious Stones and Ornaments' Association, submitted a written complaint to a member of Thailand's National Legislative Assembly that the number of Indian gem graders in the province had increased considerably.

Some groups of the Indian traders had distorted product prices to such an extent that Thai entrepreneurs including manufacturers and traders could not compete with them.

He said the Indian traders had an advantage because they had a larger amount of capital, more branches overseas, and lower trading costs.

In addition, most of the Indian traders had often shunned abiding by state rules and regulations.

Currently, more than 100 out of 200 jewellery manufacturing plants had closed their business since they could not compete with the Indian traders in terms of prices.

So, the association wanted state agencies concerned in security affairs to examine whether the Indian traders' behaviour had undermined the country's economy or not, he said. (TNA)


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## Bushroda

*CRR hike to slow short term growth: Moody's*
BS Reporter / Mumbai August 2, 2007 

Reserve Bank of Indias (RBI) decision to hike cash reserve ratio (CRR) to suck out excess liquidity and its general policy stance may lead to slower short term growth for Indian economy, according to rating agency Moodys.

The central bank in its first quarter of review of annual monetary policy for FY08, raised the CRR (the share of deposits that banks have to keep with the central bank without getting any interest), by 50 basis points to 7% from August 06, 2007.

This is fourth time it has raised CRR. This is expected to take about Rs 16,000 crore out of the system.

The RBI also removed the Rs 3,000 crore cap to mop up funds from banks under the reverse repo window.

"From a credit standpoint, the preservation of India's macroeconomic stability remains in a critical phase, and Tuesday's moves are consistent with that," Aninda Mitra, VP, Moody's, said.

"In an atmosphere of still-strong underlying growth, a prolonged tightening stance goes to show that one or two benign price signals are not enough to effect a short-term change in the course of policy." Moodys said.

In Moody's view, he said, it is not usually enough for policy makers to simply manage short-term demand without credibly addressing longer-term capacity problems, especially in high-growth potential economies. "Nor is it typically feasible for the private sector to somehow step into the structural void and bear the financial brunt of capacity building," he said.

As a result, he said, Moody's believes that a tightening bias in the overall monetary framework could remain in place until the government is further able to reduce its own debt burden, which currently precludes better resource usage in more productive areas, or officials can establish a more effective enabling role for the private sector or foreign participants in the capacity-building process.


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## Bushroda

*Good news on Indo-Pak trade front*

The news that India and Pakistan have decided in New Delhi to increase their bilateral trade by six times to $10 billion by 2010 should not go unnoticed because it means the pulling down of some of the political barriers that have stymied economic development in both countries. Like all trade negotiations, the two sides should seek mutual advantage and learn to adjust their economies accordingly, all the while keeping focus on what they have agreed under their World Trade Organisation (WTO) commitments.

It is the political barrier in Pakistan that has to be pulled down; and Indias economy has to get rid of the hangover from its Nehruvian days and match the openness it demands from its free-trade neighbours. All said and done, though, getting bilateral trade to touch $10 billion by 2010 will stretch the imagination of both parties which are used to deadlocking each other as a good domestic gimmick. Trade now stands at $1.7 billion and is heavily in Indias favour, which clearly indicates where the logjam has to be broken. Many more items will have to be included in the list of tradable commodities, which today stands at 1,800, having grown painfully slowly from only 40 under the regime of General Zia-ul-Haq in the 1980s.

Economic wisdom is not a plant that grows wild in South Asia. The Indo-Pak economic thaw has been forced by external leverage as Pakistan has got used once again to American assistance and India has quenched its thirst for nuclear technology from the United States. Pakistan has been linking a breakthrough in trade with India to progress in peace talks with special reference to the Kashmir dispute. The idea in Islamabad is to punish (sic!) India in order to get its way on Kashmir. It says it has great geopolitical advantage because it sits astride a clutch of trade routes joining South Asia with Central Asia. But the operationalisation of this vision is obstructive rather than constructive. The purpose is to deprive someone else of advantage, not to seek advantage for oneself.

The one item in President General Pervez Musharrafs political agenda that has found favour among the masses in Pakistan is normalisation with India. While not detracting from his efforts to ease the tensions that peaked in 2001, one has to fault his men for not grasping the urgency to get Pakistans equation straightened out with India as the status quo power in the region. India had granted Pakistan the most favoured nation (MFN) status in 1996 but Pakistan has not reciprocated because of Kashmir, a decision accepted by Pakistans ruling politicians because of internal pressures.

What militates against this policy is the multilateral treaty of a free trade area (SAFTA) signed by it at South Asian Association for Regional Cooperation (SAARC). The treaty required the signing of bilateral free trade treaties among SAARC members. Pakistan signed the free trade treaty with India but refused to ratify it because of Kashmir. That leaves Pakistan isolated in the region where all other states have signed and ratified their free-trade treaties with India.

There are reasons for holding Pakistan more responsible than India for the delay in economic normalisation. It is not useful for Pakistan to view its geopolitical advantage in military terms. And if it takes another look at itself as a trading nation rather a warrior state, then it has to actively sell its trade routes to the two regions it has actually tried to separate for the past 60 years. Its efforts to extract a price for being the impenetrable barrier to movement of commodities have given a strangely anachronistic definition to the Indo-Pak border. There are few frontiers left in the world today that are as off-limits as this boundary line. The examples that spring to mind  North and South Korea, Israel and some of its neighbours (Syria and Lebanon)  explain how threatening the policy is to the region.

The two economies are communicating all right, but through third countries and through smuggling. Analysts rightly add a couple of billion dollars to this regular trade by computing a huge chunk that Pakistani importers consume on the side. But now that the two sides have pledged to facilitate Pakistans exports to India  cement is on the line  things may start looking different. It is only after agreeing to do normal trade that one can get into the nitty-gritty of getting the other partner to pull down its non-tariff barriers. There are no trading partners in the world who dont occasionally lock horns, at times quite aggressively, over trade imbalances.

Pakistan is threatened on its western border in a most glaring contradiction of its traditional security perception in the region. But it is taking too long  even after loss of territory  to even recognise this threat. Normalisation with India is on the cards, the people of Pakistan want it, the changing threat perceptions demand it, and one can, and should, choose to do the right thing without being dragged to it kicking and screaming.


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## Bushroda

*Buddha Can Show The Way*
3 Aug 2007, 0054 hrs IST,Kaushik Basu

I had argued in these columns last week that changes in the states of Bihar, Orissa and Bengal raise the possibility of an industrial resurgence in the eastern region of the nation. 

The source of West Bengal's change is the CPM's recent realisation of what the Chinese realised in 1978  that good economic policy has nothing to do with one's fondness for or dislike of big companies and capitalists. 

In today's world, with free-floating capital and footloose corporations, if you are in charge of just a region, or even a country, and want your workers to be employed and paid decent wages, you have no choice but to welcome capital. In an interview in 2005, Buddhadeb Bhattacharjee said, "I want investment. Money has no colour or nationality... We cannot dwell in the past. Look at China. Does it have any problems accepting investments from capitalist countries? Does Vietnam not want American capital?" 

From the manner in which re-industrialisation is being attempted in West Bengal, there are signs that the government is trying to take a page out of China's book of "capitalism by fiat". The state government is using its party power and proximity to the unions to forcibly acquire rural land and other rights for big business houses to start up large industrial projects. 

The state has struck deals on steel, port development, hydro-chemicals, and food processing with large corporations  all in the last two or three years. It had earlier persuaded IBM and Wipro to start operations in the state; and has received investment from Pepsi and Mitsubishi. 

In the services sector eastern India cannot any more take the lead. Misled into thinking that this skilled labour-intensive sector is not in the interest of the masses, the gravy train was allowed to pass. Fortunately for India, the southern states cashed in on this great opportunity. 

India has not done well in the industrial sector over the last 20 years. As a consequence the opportunities here are enormous and it is possible for eastern India to take the lead in this sector. I disapprove of the use of CPM cadres to settle disputes and terrorise people as happened in Nandigram. At the same time we must not give in to Trinamul Congress's mindless effort to stall industrialisation. 

Industrial development is the only way to make a serious dent in poverty. This in turn means that land acquisition for large-scale industrialisation is unavoidable. And let us not delude ourselves into believing that this can be done under conditions of unanimous support. 

Large industries often require large tracts of land, which means many contiguous farmers have to be persuaded to sell their plots. In every sufficiently large group there are bound to be one or two farmers who will not want to sell their land no matter what the price. Hence, if we insist on voluntary participation of all farmers, we will be forced to abandon the very idea of industrialisation. Government should pay the farmers not just the market price but also a substantial mark-up on it. But, even with such high payment, to think that everything can be done entirely on the basis of voluntary land sales by farmers is an illusion. 

One strategy that can help government smoothen the land acquisition process is to find two potential areas for every industrial project, announce that one will be chosen and list the benefits that will accrue to the region. This will build up pressure from those who are in favour of getting the project to their region. Fearful of it going to the other region, they will take the initiative to neutralise the naysayers. 

It is possible that in Singur, when the immediate costs and benefits of the car factory are added up, we will find that Bengal has made a net loss. But the deal is nevertheless worthwhile. After so many years of deindustrialisation, the first large industry to set up shop in the state will need disproportionate inducement. 

Hence, we have to view the first entrants as the Pied Pipers of industrialisation. And if i were to choose one from among India's major industrial houses, the Tatas, with their reputation for integrity and quality, would certainly be high up on my list. If this goes well, many more industrialists will want to come to the region, and the regional economy can then recoup the losses of the short run many times over. 

Whether the West Bengal government has the ambition and imagination to lead the entire eastern region to economic prosperity and industrial leadership remains an open question. Moreover, unlike the Chinese communists, the CPM government functions within a nation that is a vibrant democracy with a powerful legal system; so there will be limits to how far they can imitate China. Also, the unions controlled by the CPM are a small part of India's labour movement and so the party's hold over labour in general is limited. 

But even with all these caveats, for the first time in decades it seems within the realm of possibility that West Bengal will see a massive re-industrialisation, which can generate employment throughout the eastern region of India, and cut poverty and raise the common man's standard of living more sharply than ever before.


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## Bushroda

*Boeing, Jet Airways Announce Order for Three 777-300ERs*
(WebWire) 8/2/2007 9:54:32 AM

SEATTLE,- The Boeing Company [NYSE: BA] and Jet Airways, Indias largest private airline, today announced that the airline has exercised options for three 777-300ER (Extended Range) airplanes. 

The order, valued at more than $790 million at list prices, follows a previous order for 10 777-300ERs in September 2005, for a combined total of 13 777-300ERs. The order was recently included on the Boeing Commercial Airplanes Orders and Deliveries Web site, attributed to an unidentified customer. 

"It is vital that Jet Airways continues to expand its fleet progressively to ensure its leadership position in Indias dynamic aviation market," said Jet Airways Chairman Naresh Goyal. "The 777s operating efficiencies and passenger comfort play a pivotal role in our long-haul growth strategy, and will play a pivotal role as we expand our international operations." 

Jet Airways took delivery of its first 777-300ER in April. In December 2006, the airline also placed an order for 10 787 Dreamliners. 

"The 777s market-leading efficiency and passenger comfort will help our airline customers generate profitability from their operations," said Dinesh Keskar, Boeing Commercial Airplanes vice president, Sales. "Jet Airways is making the passenger-preferred 777 a cornerstone for its success." 

The 777 family of airplanes is popular with passengers and airlines because of its fuel-efficient twin-engine design, high reliability, low operating costs, and comfortable and spacious interior. The 777-300ER typically carries 365 passengers up to 7,930 nautical miles (14,685 kilometers). 

With the 787 and 777, Boeing offers a complete family of airplanes to cover the 200- to 400-seat market segment. With complementary range, speed, efficiency and operational commonality, yet differing seating and cargo capacities, airlines can use both models in their fleets to tailor capacity to meet seasonal demand. 

Jet Airways, with more than 330 daily flights to 49 destinations, operates throughout India and has international routes that include London, Singapore, Kuala Lumpur, Bangkok, Colombo and Kathmandu. The airlines current 777-300ERs operate a Mumbai-London route. The aircraft are configured in three classes, including eight First Class suites, 30 Premiere seats and 274 Economy seats. 

The 777 is the market leader in the 300- to 400-seat segment, capturing more than 65 percent of that market since its launch. The 777 has logged orders for more than 975 airplanes over the life of the program, and has more than 325 unfilled orders worth more than $82 billion at current list prices.


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## Bushroda

*A million jobs by 2010?*
Gaurav Choudhury, Hindustan Times
August 02, 2007
First Published: 07:20 IST(3/8/2007)

After information technology, India is emerging as a global hub for biotechnology. The Indian biotech industry, excluding the organised pharmaceutical and drug manufacturing companies, reported revenues in excess of $1 billion in 2005-06. Encouraged, the government has prepared a draft biotech strategy to provide a clear roadmap to the industry for 10 years. 

The draft strategy has tried to take a holistic look at the current scenario and has suggested several measures and timeframes to promote innovation and manufacturing. The declared goals are to create world-class human capital, build quality infrastructure, and address the basic needs of society. All this would be aimed at logging $5 billion and generating a million jobs by 2010.

The sector is characterised by dynamic changes in terms of new ideas and developments. The applications cover a broad spectrum of sectors including agriculture, food processing, pharmaceuticals, textiles, chemical sciences, and environmental preservation.

The world has woken up to the fact that India is a country that cannot be ignored while plotting the landscape of the biotechnology industry, consulting firm Frost & Sullivan has said in a report.

Arvind Lal of Dr Lals Pathlabs said the quest for improving the standard of healthcare has led to a tremendous global effort dedicated to new drug discovery and development. Today, the pharmaceutical industry faces significant challenges such as cost optimisation, competition from generic drug makers, and, most crucially, an innovation deficit, said Lal.

There is a shortage of people with the appropriate research and development skills. In clinical research outsourcing, we have to recruit for the focus area of research, said Dr Kashmira Pagdiwalla, director (HR operations) at Intas Biopharmaceuticals.

A survey Ficci found that the shortage of doctorate and post-doctorate scientists in biotech at a worrying 80 per cent.

Thats why growth of employment in biotechnology is 10 times that in the other sectors of the larger life sciences industry. There are several employment opportunities in R&D, manufacturing and quality control. On a sub-sectoral perspective, the requirement of skilled manpower in R&D is more, Pagdiwalla said, adding: Recruiting in biotechnology does not mean that an HR person can relax.


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## Bushroda

*BioTek opens offices in China and India*
Laboratory Talk, UK
3 August 2007

These countries are devoting major resources toward the rapid growth of their respective pharmaceutical and biotechnology sectors,' stated Peter Weith, vice president of marketing and sales at BioTek

'BioTek's core microplate technologies will complement their associated investments in Life Science research, while allowing us to further build upon our global branding initiatives and service infrastructure', said Peter Weith. The company's new office in China, BioTek Instruments Representative Office Beijing, has been opened in direct response to their expanding customer base and distribution partners throughout China.

Chief representative Steven Fisher and local staff will offer a high level of technical and sales support to China's dramatically growing pharmaceutical market.

BioTek Instruments India, a joint venture with Medi-Spec Instruments India, will be based in Mumbai under the leadership of managing director Vipul Chhatbar.

Commenting on the new venture, Chhatbar noted: 'Growth within the Indian sub-continent has been tremendous.

'The joint initiative between BioTek Instruments and Medispec India will allow us to remain a step ahead of our competition by leveraging our existing customer base with local currency and tax-free benefits'.


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## Bushroda

*Apollo to run mini-hospital at new Hyderabad airport*

New Delhi, Aug 3: GMR Hyderabad International Airport Ltd (GHIAL), which is building a greenfield airport in Hyderabad, Thursday selected Apollo Hospitals for setting up a medical centre inside the passenger terminal.

The 17-bed medical centre will be built in the passenger terminal building (PTB) of the airport in Shamshabad, which is expected to become operational by March 2008.

"We are fully aware of the importance of providing emergency treatment to the passengers as well as the basic medical care for employees working in the airport. We are sure it will live up to our expectations in making the new Hyderabad international airport a truly customer-friendly one," T. Srinagesh, chief operating officer of GHIAL, said in a statement.

As per the agreement, Apollo Hospitals will set up the medical centre spread over 300 sq meters in Level B of the PTB and first aid kiosks in passenger restricted areas.

"It (Apollo) will provide permanent staffing and dedicated paramedics in this centre. It will have facilities like ultrasound, ECG as well as round-the-clock emergency dental services," the company added.

GHIAL is a joint venture company promoted by the GMR Group, which has a stake of 63 percent, and Malaysia Airports Holding Berhad with an 11 percent stake.

The Andhra Pradesh government and the Airports Authority of India will have 13 percent stake each in the project.

"The facility will serve as an emergency treatment centre for passengers who may develop medical complications while on travel or in the airport premises.

"It will also serve as an important partner in disaster management during crisis periods such as explosion, fire, earthquake, plane crash etc within the airport premises," the company added.

In addition to the passengers, the centre will provide medical care to needy airlines and airport staff, and will also act as a centre for conducting pre-flight medical tests for pilots and flight crews.

The agreement also envisages the medical centre to own and operate a minimum of four advanced ambulances, the company added.


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## Bushroda

*Up, through highs and lows *
Gautam Chikermane
Friday, August 03, 2007

July 27: 542 points down. July 30/31: 316 points up. August 1: 615 points down. The uncertainty has only begun, with the Sensex rising 50 points yesterday. This seesaw is here to stay and for investors who came in over the last four years, who so far have only met Mr High Returns, it is time to look at his shadow, Mr High Risk. Like it or not, Mr Risk accompanies Mr Returns. Sometimes investors think Mr Returns is their friend, and put in money as if the friendship will end if the increased investing stream ends  this is what has happened over the past four years, between May 2003 and today. At other times, investors feel close to Mr Risk and look to another entity, Mr Zero Risk, whose shadow is Mr Low Returns  the period between February 2000 and May 2003, for instance. 

This uncertainty is here to stay. According to experts, the epicentre of this times financial earthquake with destruction across the world lies in risks in the US subprime lending market. Subprime lending is the offering of loans to borrowers who have bad credit histories and hence do not qualify for market interest rates but higher ones. Somewhat perverted in its creation, the problem doesnt end in its creation or culmination or even with banks  critics argue that this encourages predatory practices that hurt borrowers, who, when they default, end up bankrupt; while bankers say theyre only helping citizens who otherwise would be financially excluded get credit. 

The whizkids of Wall Street have converted this practice into a debt wish. They bought these loans from banks, repackaged them into securitised debt products called collateralised debt obligations (CDO), and sold them to investors. Before the sale, however, the bonds had to be rated and credit rating agencies gave them investment grade ratings, which in hindsight were perhaps not warranted. Again, in hindsight, investors who bought the CDOs are being termed too greedy. And as money managers told their investors that the CDOs in their portfolios were, in hindsight, all but a glossary, panic set in. And beyond all this hindsight lies a foresight: over the next few months, expect lawsuits to follow. 

But what do ACC, Reliance Energy or Hindalco, the biggest losers on Nifty on August 1, have to do with CDOs? The answer: uncertainty. But does uncertainty mean that the underlying companies that comprise the various indices like Sensex or Nifty are going to stop their profits streak? The numbers say no  as the first quarter results show, net profits of 1,654 companies for the period April 1, 2007 through June 30, 2007 are up 39 per cent, compared to 32 per cent in the previous year. This is on a lower sales growth (19 per cent versus 29 per cent), implying productivity gains, and despite rising interest costs, which have grown 45 per cent compared to 25 per cent. 

If companies are doing fine, is it that in a fit of irrational exuberance investors have pushed up prices to unsustainable heights? Possible  PE multiple of Sensex, even after being beaten down 841 points in just four trading sessions, is still over 20 times, way above most developed markets (UKs and Germanys 13, Frances 16) and emerging economies (Russias 11, Brazils 14, Indonesias 16), but close to Taiwans 21, and Japans and Malaysias 23. As I have argued earlier, the relatively higher valuation for Indian equities is nothing to worry about as it is backed by globally above-par corporate performance  with just six companies in Fortune 500, corporate India is still to attain global scale. 

The path to that scale is currently being built by heavy investments  private, public and PPPs  in infrastructure. Not as much as Chinas but much more than ever seen before. Physical connectivity, infrastructure of roads, ports, railways and airports will speed up goods delivery. Communications infrastructure of telecom is already doing its magic to productivity and will continue. Regulatory and financial infrastructure that oversees all these and links them through finance (banking, insurance, capital markets and pensions) will, we hope, make doing business in India a more pleasant, more profitable experience. Coming to ride that infrastructure are not only crores of rupees but billions of dollars as well. 

So, with an almost certain medium- to long-term future ahead, just what is the uncertainty were talking about? It is short-term trading and speculation that create higher volatility. But unless you are riding this volatility full time, chances are against you. Now, chance is a word that takes us into a realm that goes beyond investing  it takes us into a casino where, looking at the cards youve been dealt (that is todays numbers), you take bets on whether to buy more or sell out. Which suits the temperament of some people just fine. 

For the larger mass of people wanting to create long-term wealth, however, these are noisy but often profitable blips. An 841 point fall in just four days that has brought the prices of many good companies down by over 20 per cent makes them more attractive than they were. Its like buying the latest Rs 10,000 iPod for Rs 8,000 or getting a Rs 3,000 iPod Shuffle for your sweetheart for free. But why bother? Your mutual fund would be doing that for you anyway, just continue with your systematic investment plan. 

When I use the word you, I mean it as India being a young nation. Compared to the current numbers where every third Indian is below 15, by 2020 the average Indian will be 29 years old (average Chinese and American will be 37, average Japanese 48). These young people will be closer to Mr Returns because theyre not mortally afraid of Mr Risk. They will enter, stay in and profit from the markets.


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## Bushroda

*India, Sri Lanka targets trade pact by October*

New Delhi, Aug 3 (IANS) India and Sri Lanka have decided to sign a Comprehensive Economic Partnership Agreement (CEPA) by October this year for augmenting mutual trade and investment, Minister of State for Commerce Jairam Ramesh said here Thursday.

"Both India and Sri Lanka can thrash out the differences and early conclusion of the CEPA would ensure the sustained interest of all the stake holders," Ramesh said during his meeting with Sri Lankan Minister for Investment Promotion Navin Dissanayake.

Sri Lanka also invited more investments from India in several areas including oil exploration and refining, information technology and apparel and textile sectors.

"During the meeting, the Sri Lankan Minister also agreed on holding an Investment Expo in his country in October-November this year, focusing exclusively on the Indian companies. Both Ministers agreed that the Expo should focus on two major sectors such as information technology and apparel and textiles," said a joint statement.

The visiting minister also invited Indian companies to help Sri Lanka in development of infrastructure, including the proposed 1000 acre Special Economic Zone in eastern Lankan province of Trincomalee.


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## Bushroda

*Pune set to edge out Bangalore in Infosys space race *
VIVEK NAIR 

Mumbai, Aug. 2: The ground is beginning to shift at Infosys. Literally. 

Stymied for growth in land-scarce Bangalore, the countrys second largest software maker with revenues of over $3.1 billion in fiscal 2007, is making huge investments in Pune. 

A little over a year from now, the centre at Pune will house more employees than its current base in Bangalore. 

When that happens, the wheel will have come full circle because it was at Pune that seven founders met on a fateful day in 1981 and marked their tryst with destiny. Two years later, N. R. Narayana Murthy and his six colleagues moved their headquarters to Bangalore  and turned it into Indias silicon city. 

Almost 25 years later, frustrated by the breakdown of infrastructure in Bangalore and fighting off accusations of being land grabbers, Infosys has drawn up plans to create 14,400 more seats in Pune, which now has 9,181 seats  taking the total number to 23,581 seats when complete.

Compare this with the fact that Infosys' existing campus in Electronics City now has 20,715 seats; the company is only adding 2,330 seats. Observers say that the quantum jump in seat additions could see Pune having the maximum number of employees (excluding its BPO operations) in Infosys domestic setup. 

Infosys now has over 75,000 employees; Bangalore has 18,490 employees and 10,750 are located in Pune. 

It isnt clear whether Pune will overtake Bangalore in revenue earnings. In any case, Infosys does not give a breakup of the revenue earnings of its nine development centres.

Its not only Pune that is enjoying the spinoff benefits from the infrastructure gridlock that has started to choke development in Bangalore. Over the past one year, other cities like Hyderabad and Chennai have grown faster than Bangalore and the net addition of seats in these places is also higher than that in Bangalore. 

Infosys now has facilities in nine locations around the country. Among them, while 7,500 seats are to be added in Chennai, 2,850 more seats are being put in Hyderabad and 3,500 in Mangalore. 

Responding to an e-mail questionnaire sent by The Telegraph, T. V. Mohandas Pai, member of the board- HR, E&R & administration, Infosys, explained that Pune was seeing the largest addition of seats since the company had the maximum land available to expand there. 

In Bangalore, we do not have any more land, he added. Infosys is investing Rs 725 crore in Pune and Pai said the facility would be a delivery centre. 

However, Infosys is not the only company that is halting expansion in Bangalore due to infrastructure woes in the city. Last year, global engineering giant Siemens AG had announced that it would freeze all expansion plans in the state. Siemens had then said it would opt for other cities which had better infrastructure facilities like Chennai, Hyderabad, Pune and Calcutta to expand its business. 

Sources added Infosys had been looking to expand in Bangalore for more than two years now and that it had made repeated requests to the previous state governments to make land available, but to no avail.


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## Bushroda

*Tata Unbound* 
Businessweek

*A talk with Ratan N. Tata reveals his take on everything from Tata Group's expansion plans, to being overstretched, to choosing a successor *

For the past four years, Ratan N. Tata has been racing to seize opportunities to establish the Tata Group, one of India's oldest and biggest conglomerates, as a major global player in everything from steel and cars to hotels and information technology services. Besides making big acquisitions such as the Anglo-Dutch steel giant Corus Group and the Ritz Carlton hotel in Boston, the Tata Group is plowing $28 billion over the next five years into capital investments in a range of industries at home. 

But at 69, this also is a time for the visionary tycoon to start considering his legacy. In a surprisingly candid and introspective interview with BusinessWeek's Pete Engardio and Nandini Lakshman at Bombay House, the Tata Group's graceful, colonial-era headquarters in Mumbai, Tata discussed the formation of the group's global strategy and its major challenges. He also talked about his achievements, disappointments, and unfinished agendas. Excerpts follow: 

*What were the origins of your big global push?*
Around eight years ago we asked our companies to benchmark themselves against the best in breed in India. We wanted to know what they need to be in the top three market position, and have a path to get there. 

About four years ago we decided to look at ourselves and our goals in a much bigger and bolder way than we had in the past. The genesis of this came from a little comparative study we did of India and China. I realized the difference was the scale of each thing they undertook. When you go to the Far East, you get overwhelmed. Whether they build a port or some other infrastructure, skeptics around the world would say, "My God, this is just over the top." I realized that with almost everything China did big, they grew into it very quickly. Their growth rate momentum supported that. 

It led me to mandate around 2003 that we rescale our thinking in terms of our growth, not just organic growth but also inorganic growth, and that we look at global scale rather than domestic scale. Then we just forced and cajoled this to happen in the business plans of the companies. 

*Why all the acquisitions now?*
First, our companies are more prosperous than they were. Access to international funds certainly is a factor. There also is a strategic situation that sometimes makes it easier to grow internationally than domestically. The auto market may be booming now in India, for example, but we may be weak elsewhere. 

*Your acquisitions have been all over the map. Is there an overarching strategy?*
We want to extend our footprint overseas wherever it makes sense to us. We want to be in a place in a meaningful way, not just as a red dot on a map to say that we are there. 

Each acquisition had a strategic reason. Tetley [the British company bought in 2001 by Tata Tea] was to gain a brand. Daewoo Motors had heavy trucks, which we didn't have. [European steel giant] Corus was basically a very good fit. It has complimentary products and has 19 million tons of capacity we can acquire with a single company and has a footprint in Europe. 

In hotels, we have a geographic plan. We are looking at iconic hotels in strategic places. We are not to acquire a chain. We looked at three or four locations in the U.S., one or two in Europe, at South Africa, and the Indian Ocean. You may well see another. 

*Why acquire hotels with names like Ritz or Pierre when you already have a strong name in Taj? *
There are two ways to [expand]. One is to have the Taj brand everywhere. The other is to get iconic hotels with their own brands. People will realize that they are your hotels. We could retain those brands for awhile, and alter them at some time. The Ritz in Boston now is the Taj Boston, and we just signed a deal with Camdon Place in San Francisco, where we will retain that brand for awhile. We don't own the Pierre. It's a lease. But even when Four Seasons had it, it was still the Pierre. 

*At the same time you are buying luxury hotels, the Tata Group is going after the so-called bottom of the pyramid with everything from low-cost watches to cars. Why?*
All of Indian industry is aiming for the tip of the pyramid (high-end consumers). But you have this huge base of the pyramid which is not addressed. We said that in India, maybe we should break tradition and go to a market that in future will be 600 million people. We asked whether we can raise standards for products at that level. Can we produce a $2,000 car? Can we produce a $25-a-night hotel? A very inexpensive watch? 

*Do you plan to bring products like the low-cost hotels to the U.S.?*
It would be philosophically wrong for us to go into the U.S. with no-frills products. If we go for the bottom of the market, we would build an image of that nature. The Taj Group [of hotels] ought to carry through the high stature it has in India. 

*Are you satisfied with your progress in India at the bottom of the pyramid?*
We have not been so successful. We have been trying to reinvent products. But we haven't reinvented the businesses, which is something we need to do. We should look at different ways of marketing these products. With the car, for example, we are looking at selling through stand-alone services guys who may act like insurance agentsoperating on their own, using satellite service stations. 

*Nissan's Carlos Ghosn now also wants to make a low cost car in India. Is that a concern?*
It's not a concern. At least he's talking about it because he believes in it. Mr. [Osamu] Suzuki [chairman of Suzuki Motors] says it can't be done. When we produced the Indica, it was to be a $4,000 car, but others felt it had to be a $7,000 car. Now why should the $2,000 car be the limit? 

*Are you happy with the design?*
I had hoped in design it would be totally unconventional. But it is still a car. I was disappointed we used conventional materials like steel, not plastic. In fact, General Electric was also very keen that we develop a plastic car. But the cost of plastic was more than steel, so it became a conventional material car. 

At first, I thought about something that was very different from a regular car, but I wasn't specific. When you get into that mode, you don't accept anything that exists today. In the early thinking, the car had no doors. We looked at it as a progression up from a basic motor transport to something that was motorized and would take a family. Then we realized that people weren't going to consider that to be a car but some other animal. We realized we need doors and a roll-up window. 

*How could you get the cost down so low?*
First, it is small. It is innovative in that it is lighter and has less materials than other cars. It won't have a lot of frills. A trivial example is that it may not have air vents. There is very minimal trim. The dashboard can be rather stark. The base model may not have any reclining seats. But it is upgradable to have power windows and power steering. 

*When you took over the group in 1991, you wanted to radically reduce its size. Now there are more companies than before. Are you too big?*
It's one area I have not succeeded in what I set out to do. We have about 80 to 90 companies and about 300 subsidiaries in 40 businesses. We said that we would bring it down to 15 or so. We've done a little bit through internal mergers, and have gone out of some businesses. But we also added some. 

What we have done is to create clusters around the strong companies in each business. They are like mother companies. We have created a bunch of mini groups that are in less business than before. But if you look at them together, we are still too diverse and too big. 

*What happened to the downsizing?*
We told companies they had to be among the top three in their markets. And many were. They met the challenge. So the question came up, "Why are you doing this to us and not to them?" We didn't have an answer for that. 

Do you have enough management bandwidth for all these businesses? It is an issue. We have to increase the management bandwidth with the same ethical standards and values. This is something you cannot ensure until that person is with you. We need to empower more young people. We still have a years-of-experience syndrome in our group. 

*How about you personally? Aren't you overstretched?*
I'm involved in more issues than I feel I should be. Some of my people probably would agree. 

*Do you think this can be a model for the global corporation of the future?*
The shareholder in India does not see [funds spent on corporate responsibility] as money that belongs to him and that must be distributed to him. I think it is the kind of company you should see in Brazil, Kenya, or Central America. And it may rub off on some Southern states in the U.S. 

*What do you say to concerns that you have not designated a successor?*
There is a problem. It is something that I am committed to do while I am here, and not to carry on endlessly as may have happened in the past. There are some contenders outside the group and inside, but no anointed individuals. I will have this defined 24 months before my exit. And that exit needn't be at 75, but much earlier. Whoever it might be, I hope I can pick the right person who will surprise everybody. 

*What are your big challenges now?*
I think people. The other is retaining the value systems as we grow bigger, diverse, and go overseas. Before we make an acquisition, we spend a fair amount of time and effort becoming comfortable with the management and their ethics. If that isn't there, we will not go forward, as it's too difficult to change the culture from several thousand miles away. 

With Corus, we really came to know the top three or four people well enough to conclude that even if we don't go forward, we at least saw a friendship. We interacted with them for eight or nine months, even before we thought that we would acquire the company. We thought we might just have an alliance. 

*While your corporate responsibility spending is laudable, some might say it is excessive for a global public company. Is there are risk it will diminish under future managers?*
I can't ensure this will survive. The view I take is that there is no issue if I am in the ballpark in terms of dividend payments and the bottom line, and if we still remain competitive. If one went to Tata Steel, for example, you could take a broom and sweep out a lot of these costs [such as maintaining municipal services in Jamshedpur]. You could turn it into a more conventional company. But you would have great discontent. And I think it would change the environment and atmosphere. We certainly don't do all these things in other countries. But here, we have this responsibility. Remember that Tata Steel went from 78,000 employees [in 1994] to 38,000 todaywith no labor unrest. You could never do that unless there was faith between the employer and employee. 

*What are some things you would like to leave as your legacy?*
I would really like to see ourselves serving the low end, the underprivileged, more than we are doing today. I feel we can achieve breakthroughs in some areas, like helping provide water. The bare necessities. If our company could spearhead things like this, it would give me great happiness. It also would give me great pleasure if I could create awareness of the destruction of the environment around us.


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## Bushroda

*Land of curry fast gaining currency*
3 Aug, 2007, 0231 hrs IST,Vishakha Talreja & Moinak Mitra, TNN

NEW DELHI: Stomach this. Over the last 12 months, tour operator Cox & Kings has been raking in the moolah through its Curry Spice Tour of India. So has SITA Travels with its Cuisines of India travel-pack aimed at the global foodie. Other tour operators are not averse to the idea either. Gourmet tourism (the wine curries favour too) has just found a new home  India. 

The land of curry is fast gaining currency among other people, tingling their tastebuds and bringing them to India in droves. While tour operators cash in on the tastes of India with sugar-coated brochures promising gastronomic trails, ET goes the whole hog. 

Though the 20-30% margin falls nothing short of mouthwatering, operators carp on volumes. While theres a growing awareness of Indian cuisine the world over, this is still not France or Italy where gastronomic tours are the norm. 

India has a long way to go and this is just the tip of the iceberg, says Himmat Anand, COO of SITA Travels, which brings four to five culinary groups annually into the country under its Cuisines of India banner. Every group comprises 15-20 members. That makes it 100-odd from SITA. Overall, not more than 500 gourmet tourists (a puddle in a sea of 4.4-million tourists who touch down in India every year) land up annually, adds Anand. 

To turn the trickle into a flow, now even the tourism ministry has something to chew on. Gastro-enteritis is out, gastro-entreatie is in. The ministry has identified gourmet tourism as one of the themes to promote India as a destination for foodies. Weve even cut a compact disc specifically aiming at the global tourists hunger drive, and are now distributing it across tour operators countrywide, points out a ministry official. 

A speed read through Cox & Kings Curry Spice Tour takes the gourmand traveller through cups of mishti doi (sweetened curd) in Kolkata, or chakna (spicy offal stew) in Hyderabad, or the narrow bye-lanes of Paranthewaale Gali in Delhi, the Royal Barge in Udaipurs Lake Pichola with sweet champagne on ice, or for that matter, a late evening Chettinad meal at a private home in Chennai. Gourmet tourism is targeted at a niche segment of high-end travelers. The concept is gaining popularity among tourists, says Arup Sen, executive director, Cox & Kings. 

The hospitality trade too is wheeling in sumptuous spreads to satiate global appetite. Bukhara and Dum Pukht are destination restaurants. We have both groups and individuals coming to the (ITC Maurya) hotel only to relish cuisine at the two anchor restaurants, he says, and the glint in his eye doesnt betray Bill Clintons fave Bukhara Dal that went on to put Indian cuisine on the global map. 

Never mind the accolades, gourmet tourism faces an uphill task. Ask Indias Cordon Bleu chef Sanjeev Kapoor and he retorts straight from the gut While the country offers some cuisines, gourmet tourism could face some challenge. Besides the notion that most Indian eating joints are unhygienic, there are logistical nightmares. Anyhow, this is a sunrise sector and I expect a lot of action in times to come. No point in hurrying the curry. For tour operators, thats the bottomline.


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## Bushroda

*Lockheed Martin to set up centre for innovation in Gurgaon*
2 Aug, 2007, 1329 hrs IST, IANS

NEW DELHI: US defence and aerospace major Lockheed Martin Corp has entered into a 50:50 collaborative venture with Bangalore-based Wipro to set up a centre for innovation in Gurgaon on the edge of Delhi - its third such facility globally. 

"We're calling it the Network Centric Operations Centre (NCOC). It'll have core competence in testing and analysing war-fighting concepts and other command and control operations," said Richard G. Kirkland, the group's president for South Asia. 

"This facility will have some 40 trained people. But as and when the need arises, we will deploy people depending on what kind of demonstration the client needs," Kirkland, who is based in Arlington, Virginia, told IANS during a visit here. 

Kirkland did not divulge the amount of money being invested in the project, but said: "The fact that this is only our third such centre globally speaks about the significance we attach to India and the project." 

The Gurgaon facility will help defence and homeland security customers fight terror and tackle other issues like natural disasters in an integrated manner by suggesting how the available resources can be optimally deployed. 

Technically, the services offered by the centre will combine what is also called C4ISR capabilities - command, control, communications, computers, intelligence, surveillance and reconnaissance. 

"It will be modelled on the Centre for Innovation in Suffolk, Virginia, and the experimentation facility called 'Swift' at the Farnborough Aerospace Centre in Britain," Kirkland said. 

"Essentially, the facility will develop for its civil and defence customers the solutions required to address complex problems, emerging threats and similar operational challenges, using modern techniques," he added. 

The situations can vary from floods to disasters and earthquakes and terror attacks, maritime surveillance and the whole battle space, while the solutions will help concerned authorities deal with the situation in the best possible manner. 

"In other words, our expert team at the centre, together with the customers, can effectively simulate various operations so that a clearer understanding emerges about the challenges and opportunities of a situation and the technologies needed."


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## Bushroda

*New services bolster Cheng Lies China-India link*
Cargo News Asia, Singapore

Cheng Lie Navigation, acquired by CMA CGM last April, has launched two new services between China and India.

The first, a new China-Korea-Southeast Asia-India service to be called NIX (New India Express), will focus on Nhava Sheva on the west coast of India and will be launched in partnership with Korea Marine Transport Co (KMTC).

This fixed day weekly service will operate with five containerships, four supplied by KMTC that will include two vessels of 1,860 TEU, and one from Cheng Lie Navigation.

The service began on July 29th in Busan, and its rotation covers Xingang, Qingdao, Busan, Hong Kong, Shekou, Singapore, Port Klang, Nhava Sheva, Port Klang, Singapore, Hong Kong, Busan, Xingang.

The second service, a North China  South India Express Service named NCC, to be deployed from North China to Chennai, is designed to serve between the booming China market and Chennai on the East Coast of India, and will be launched in partnership with Wan Hai Line and Sea Consortium.

NCC will operate with four 1,700 TEU vessels and will average 10 days from Shanghai and 12 days from North China to Chennai, with calls at Qingdao, Lianyungang and Shanghai on the way. 

Starting in September, the rotation of this service will be: Qingdao, Lianyungang, Shanghai, Singapor, Port Kelang, Chennai, Port Kelang, Singapore, Hong Hong, Qingdao.

These new services are expected to meet our customers needs, and will allow connect growing container markets of China to Southeast Asia and India, said Igal Dafni, president of Cheng Lie Navigation.


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## Bushroda

*Growth in China, India is topic at BYU*
By Catherine Smith
Deseret Morning News 

China and India are experiencing explosive economic growth that will offer both challenges and opportunities for the United States, U.S. vice consul to India Brian Reynolds said Wednesday.

Reynolds spoke at Brigham Young University's David M. Kennedy Center for International Studies. He stressed his comments were his opinions and not those of the State Department.

Reynolds also served for two years in China with the U.S. ambassador and stressed that both countries are emerging as economic strongholds.

Last year, the U.S. gross domestic product was $13 trillion, China's was $10 trillion and India's $4 trillion, showing the economic progress both countries had, Reynolds said.

"When business leaders arrive in China, they're amazed at the opportunities and bewildered by the bureaucratic morass," he said.

India's bureaucratic controls are "virtually unnavigable" because of the extreme corruption within the country. "They don't know how to handle (corruption) because it's at every level of government," Reynolds said. "It's not a big issue to them."

More Chinese people have started resisting the government's control of business. Thousands of acts of social unrest occur every year in China, with people wanting to break the law in order to get the government's attention and fight for their business rights, Reynolds said. Most of those who fight are executed; others are forced into slavery.

The Chinese government sees democracy as a problem, as its people look to the West for political influence, he said.

"Those people know their system is flawed," he said. "They want to vote, but they won't tell the government that."

More than 130 million people live below the poverty level in China, working low-paid jobs, and the cost of labor in China rises every day, Reynolds said.

China's one-child policy will affect the country's future wealth, he said. With the Chinese population aging at a faster rate than anywhere else in the world, in the future one person could be caring for six. Some Chinese companies already outsource to other countries, such as Indonesia and Vietnam, because of their growing businesses and diminishing work force.

However, Reynolds said the main concern the U.S. should have is the lack of American goods found in Chinese stores  a lack that creates a huge trade deficit.

But despite its problems, China's economy could change its politics.

"Economic liberalization goes hand-in-hand with political liberalization," he said. "Information is going to change China."

India, on the other hand, has a "glut of resources that (are) untapped," Reynolds said.

He said the country could become a major player in agriculture exports. India has high-paying jobs, and like the U.S., it is a service-driven economy. India heavily promotes education, degrees earned in the U.S. are highly prized and several American universities have created Indian campuses, Reynolds said.

India's own primary education system is slowly improving, as well as encouragement for entrepreneurs.


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## Bushroda

*India aims to ease air space management snarls*

By Neelam Mathews, New Delhi, Aug 3: India's civil aviation ministry has initiated talks with the defence establishment to ease restrictions on the use of air space to accommodate growing civilian traffic. And it has projected a two-fold increase in the fleet size of carriers over the next five years.

With military concerns being a sensitive issue and airspace management a pressing need, talks are on to work out a plan for the flexible use of India's air space, said Airports Authority of India (AAI) chairman K. Ramalingam.

"We have an active dialogue on with the Indian Air Force (IAF). As a result, Goa has got more flying hours. Also Hindon (an IAF station near Delhi) has allowed us the use of air space," K.N. Srivastava, joint secretary in the civil aviation ministry, told IANS in an interview.

The release of air space under IAF is, in fact, among the key suggestions in the draft civil aviation policy and the Vision-2020 document that is being examined by a group of ministers under External Affairs Minister Pranab Mukherjee.

Air traffic in India has increased 46 percent in the first six months of this year over the like period of 2006. As many as 123,000 people travel daily by air in India and put a heavy load on the ground and air infrastructure. AAI, therefore, has had to fast forward its upgrade plans, which include preferred routes implementation, networking of military and civilian radars and consolidation of airspace, Ramalingam said.

Also, 70 percent of air space over the Delhi airport, one of the country's busiest, is under military control. As a result, civilian flights have to take circuitous routes, creating safety issues, delays and wastage of fuel, experts said.

In fact, the two converging runways in Delhi and Mumbai's cross-runways have not made the job easy. These two airports have, therefore, become the main choke points since they account for over 50 percent of India's air traffic, they added.

Unmanned aerial vehicles (UAVs) have also increased sharply over the past years, posing not just a formidable challenge for surveillance of air space but also altering the military's requirements, according to the experts.

"The system should be flexible enough that changes with requirements of military needs," said Fred Pease, executive director of the US Department of Defence Policy Board on Federal Aviation.

AAI's recent capacity enhancement initiatives in Delhi and Mumbai air traffic control (ATC) operations include simultaneous, two-runway operations with one reserved for international operations and the other for domestic.

Control positions have also been added in the ATC towers, resulting in a significant reduction in delays and congestion, Ramalingam said.

Ministry officials said hospitals and top corporate houses have also made pleas to permit helipads on their buildings after permission was given to the Tatas to start helicopter operations at Mumbai's Taj Wellington Mews luxury hotel.

The Director General for Civil Aviation conducted trial landings in late-June and AAI may soon announce dedicated helicopter routes, the ministry officials added.

The signing of the Aviation Corporation Program (ACP) initiated by the US Trade and Development Agency and the Indian civil aviation ministry will also help in enhancing India's air traffic and air space management.

"We have identified areas on performance-based navigation for precise approach, arrival and departure procedure like Required Navigation Performance (RNP) and Area Navigation (RNAV) for which training is being planned," Ramalingam said.

RNAV, he explained, enables aircraft to fly on any desired flight path in the coverage area of navigational aids. Therefore, aircraft with RNAV have better access and flexibility for point-to-point operations.

The first step in the direction was taken recently when India signed an agreement with the US Mitre Corp. for consultancy on the design of area navigation routes over Mumbai and Delhi.

Mitre is offering its model used across the US to design new arrival and departure routes and procedures.

The $1.7 million order will include training and technology transfer. This model will improve on-time performance, improve flight predictability and save fuel. Plans are on to soon send Indian air traffic controllers to the US for training.


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## Bushroda

*Come alive with the hot buzzword, Animation* 
Tuesday - Jul 31, 2007 
Televisionpoint.com Correspondent

A toon man looking suspiciously like Saif Khan, a bearded patriarch with an uncanny resemblance to Bachchan Senior singing 'Mere Pas Aao'; a toothbrush talking and dancing, hearts floating out of mid-air, animation is everywhere. Think television, movies, ads and games, animation is the hot buzzword in the entertainment industry today.

*Major companies like Walt Disney, Imax and Sony are continuously outsourcing cartoon characters and special effects to India that is enjoying its newfound status as a preferred destination for outsourcing thanks to low production costs. In fact it is steadily overtaking the Philippines, Korea and Taipei.*

*With the big studios having state-of-the-art facilities equipped with SGI, 3DMax and SoftImage, Maya, SFX and processing motion capture facilities in Mumbai, Bangalore, Chennai and Trivandrum, India is now a global player in this industry.* Today there are a number of animation training studios in Mumbai and students have plenty to choose from. 

Sandip Kshirsagar, director of Bounce Animation Studio & Academy explains the evolution of this sector. Traditionally animation was used in cartoons like Tom and Jerry and done by hand in what is called Cel animation. Artists would manually sketch characters in a flicker book format with 24 frames per second.

Today, the process has completely evolved and 2D and 3D animation is used widely. 3D is generally used for product modeling and simulations as it gives a 360 degree view. It is used across mediums like in ads, computer games, websites, architectural designs and more. 

Pritee Purswani, senior counselor at Arena Multimedia says animation is a booming market especially now with Bollywood coming into the sector. The prospects have broadened and India is witnessing a 20 per cent growth each year. She says the industry doesn't have enough skilled trainees and there is a huge gap between demand and supply so if you're thinking of getting into the profession, now is a good time.

Arena offers a two-year training program where students are taught graphic designing, editing and 2D and 3D animation. They are taught studio Max, Maya and how to create cloning effects and skin effects.The course consists of alternate days of theory and practical's so that students can first learn and then experiment with the software's. The students get on-course training and are usually absorbed by animation studios later on. Bounce Academy offers a 16 month extensive course where the entire process of 3D filmmaking is taught. 

The first eight months drawing and filmmaking is focused on followed by visualisation and then a two-month internship. Students are assisted in finding jobs or have the option of joining the Bounce Animation studio. Everything from Photoshop to 3D Max Maya, after effects and editing is covered. 

Kshirsagar says this industry is growing very rapidly and India is cashing in with movies like Hanuman clicking very well with the audience. Also Hollywood films like the Chronicles of Narnia were a hit where 35 to 40 per cent of the film was outsourced to India. Movies aside, television channels too are broadcasting more animated shows. 

Aparna Bhosle, Director, Programming and Production, Walt Disney (India) says they ensure that there's a good mix of animation and live action on their channel. In the children's space, it is important to have animation on the channel as a part of the programming mix. Hungama TV has some of the highest rated shows in the kids' space and their programs like Shin Chan, Doraemon and Kochikame are extremely popular. While Hungama TV is a channel for kids with a target audience of 4 to 14 years, there are also adults that tune into their shows.

Hanuman, a 2D animation movie, was a major success in the country. However, the honour of being the first animated film in India goes to Ashok Kaul's Bhaggmati: The Queen of Fortunes (2005). Hanuman's success story lies, perhaps in its simple storyline. The film traces the journey of this mythical God cum superhero, from his days as a cute miracle-working baby to his ultimate triumph in the army of Lord Ram.

V G Samant, director of the film says that initially no one was coming forward to sponsor the film and hence it took several years to come to the big screen. He completed the research for the film, wrote the script and made sure that there were well trained animators and technicians working on the film. It was later dubbed in many foreign languages and received a good response abroad. 

After the positive feedback, Samant has decided to direct two more animated films, one which will be on Lord Ganesha and the other...well, you have guessed its a sequel to Hanuman. It seems animation is no longer restricted to cartoons but is a part of almost all entertainment fields and just keeps growing.


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## Bushroda

*Indian PM warns agriculture is in crisis despite booming economy*
ForexTV.com, NY
08/03/07 12:28 pm (GMT) 

BANGALORE, India (Thomson Financial) - Prime Minister Manmohan Singh warned Friday against complacency over India's booming economy, saying the dividends of growth are yet to trickle down to the rural poor and farmers are in crisis.

Singh, whose party came to power in 2004 on the promise of improving rural lives, is presiding over an economy that is growing at around nine percent, the fastest after China.

The investment and savings rate is as high as 35 percent of national economic output, Singh said at a meeting of his Congress party in this southern Indian city, the hub of a 50-billion-dollar IT industry at the vanguard of the country's economic resurgence.

"But we cannot be complacent till the growth becomes inclusive and socio-economic development benefits more than half the population, especially in rural areas," Singh said.

India's rain-dependent agriculture, which contributes about a fifth of economic output but is a direct or indirect source of livelihood for two-thirds of its billion-plus population, is growing at less than a quarter the pace of the overall economy.

Annual per capita foodgrain production declined from 207 kilograms (455 pounds) in 1995 to 186 kilos last year. The rate of agricultural growth fell from five percent in the mid-1980s to less than two percent in the past five years.

India, the world's second-largest wheat producer, exported no wheat last year after shortages forced it to import the commodity for the first time in six years.

Despite the Indian economy growing at a sizzling pace, thousands of debt-ridden farmers have committed suicide after crop failures.

"Agriculture in many parts of the country is in a state of crisis," said Singh, an economist who in 1991 introduced reforms that ended four decades of socialist-style insulation by opening the doors to foreign investors.

"The fact that farmers are compelled to resort to suicides is a matter of deep concern for all," he said.

In May, Singh announced a six billion US dollar package to try and help poor farmers.

The funds for investment in technology and infrastructure to bring crops to market more efficiently will be made available to India's 29 states over a four-year period.

On Friday, the premier pledged to improve living standards in the countryside by building state-of-the art power plants, roads, telecommunications, housing, healthcare and education facilities.


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## Bushroda

*Moving on*
Sandy Howard
Newstatesman, UK
Published 02 August 2007

Print version Listen RSS From SUVs to battered buses and auto-rickshaws, Delhi's transport captures the divide between rich and poor. But its cheap, safe Metro system may level the field.


My heart sank as the auto-rickshaw driver named his price. "Three hundred rupees to Vasant Kunj? No, no, 100," I insisted. The driver, or autowallah, looked back at the expensive bar we had just left, and repeated his price.

Three drunk, young Delhiites strolled out the bar and up to their SUV. Their western-style clothes and confident manner were brash and loud, like the city itself. One of them banged on the windscreen to wake his sleeping driver. They sped off, Punjabi-remix music thumping from inside the air-conditioned cab. From their dust emerged some child beggars. Little girls dressed in shabby dresses marched straight up to tug on our arms and gesture to their mouths. 

Living in New Delhi, you spend a lot of time in transit. Seven different empires have made this their capital, each building on a new area of land. The resulting low-lying, spread-out city is a transport nightmare. Like India's other big cities, Delhi embodies the contrasts of a country that has experienced several years of unprecedented economic growth, but where poverty and social inequality are rife. These contrasts are rendered vividly through the chaotic transport system.

Most aware of this are the relatives of those routinely killed by Delhi's Blueline commuter buses. Over 60 people have died in bus accidents since the beginning of the year. These beasts are overcrowded and manically driven. Many passengers are crushed by the giant wheels while dangerously leaping on and off.

The problem became so acute that the Delhi government announced that all buses would be pulled off the road for safety inspections. Without a cheap alternative, many of the very poor Blueline commuters protested. They put worries about lost work before physical safety.

From the back seats of their air-conditioned cars, Delhi's wealthy read about the Blueline commuters' concerns in the morning paper. Being driven to work from the expensive enclaves of south Delhi is as natural for them as having live-in servants.

Nipping between the monstrous Bluelines and chauffeur-driven SUVs are the yellow and green auto-rickshaws. Their passengers are neither wealthy enough to have their own cars nor poor enough to ride the buses. Many of them are part of Delhi's ambitious and aspiring middle classes; entrepreneurs increasingly willing to marry low costs with high risks on the way up the social ladder. 

Along with their passengers, the auto-rickshaws themselves are touted as a sign of progress. As part of Delhi's modernisation drive of the past few years they have been made to run on less-polluting compressed natural gas. But the autowallahs are the most hated figures in the city. Aggressive and extortionate in equal measures, their driving bangs their passengers round the cabin and they never follow the meter.

Autowallahs take no greater pleasure than charging astronomic rates to foreigners. When I haggle, my efforts to tell the autowallah I work for an Indian company on an Indian salary are never believed. They look around the dusty, noisy, street where a mutilated dog is taunted by a naked child-beggar and ask, "Why would you come from over there, to work here?"

This is a question that many expats ask each other. Many young European businesspeople hate the heat, pollution and con artists but choose to stay. One German engineer I met expressed a sentiment that matched many others. He said he came to Delhi to see for himself "this process of change, this emerging giant".

Last week, driving back home from a night out in an overpriced auto, I passed dozens of families sleeping naked on the pavement in the baking heat. The more things change the more they seem to have stayed the same for the bulk of Delhi's poorest. Little has visibly changed in the city since I first came here eight years ago. New buildings are restricted to the outskirts, while pollution and poverty are still ever-present. 

A critical exception is the Delhi Metro: with spacious, clean stations and state-of-the-art technology, the Metro is a shining symbol of definite progress. Its elevated tracks cut strong lines into neglected west and north Delhi. 

Historically despised by the rich of south Delhi, the residents of these poorer areas now have access to cheap, safe transport. In the recent bus crisis, the Metro happily accommodated thousands more passengers. Its large-scale expansion to the rest of the city is being heralded as the answer to Delhi's transport fatalities. And symbolically, the Metro nurtures the idea that this city of so many injustices can become an easier and fairer one to live in.


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## Bushroda

*Infrastructure needs $320 bn in next 5 years*
3 Aug, 2007, 1940 hrs IST, 
INDIATIMES NEWS NETWORK

MUMBAI: India needs an investment of around $320 billion and the investments in infrastructure needs to be increased from the existing 4.55 per cent to about 8 per cent of GDP over the next 5 years, according to Manoj Vaish, president & CEO  India, Dun & Bradstreet. 

He was speaking at a conference on Dynamics of Infrastructure & Real Estate Markets: The Financial Perspective organized by Dun & Bradstreet. 

The conference stressed on the importance of infrastructure development as the key driver to sustain this momentum of current and potential economic growth. 

An improvement in the infrastructure would do wonders to the Indian economy with urbanization being of prime importance. Proactive participation from the private sector and the recent focus shown from the government has boosted the sector and there will be an increase in the infrastructure and real estate markets, Vaish said. 

Niranjan Hiranandani, chairman, Hiranandani Developers, said, although the rates have gone up the real income has also seen an increase and hence we should not only strengthen the infrastructure but also de-regulate. Although the margins will decrease the volumes will increase in the real estate sector and hence the next ten years will be twice as prospective as the previous ten years. 

The policies that we have are impeccable and world-class but implementation is bad and hence in Maharashtra the Urban Land Ceiling Act should be scrapped whilst the FSI should be raised in certain areas and policies on the Rent Act should be prospectively changed, he added. 

Speaking on social infrastructure initiatives by CIDCO, Nakul Patil, chairman, CIDCO, said, land is the biggest resource for development in Maharashtra and the 344 square kilometers of Navi Mumbai handed over by the government to CIDCO has housed over 12 lakh people and generated over 3 lakh jobs. Besides being the educational hub of Mumbai it has also been touted as the fourth best city world over in terms of development.


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## Bushroda

*Indian textiles - on a buoyant yardage*
India Infoline News Service / Mumbai Aug 03, 2007 18:19 

*Currently, it contributes about 14 percent to industrial production, 4 percent to the GDP, and 16.63 percent to the countrys export earnings.* 

The Indian Textiles Industry has an overwhelming presence in the economic life of the country. Apart from providing one of the basic necessities of life, it also plays a pivotal role through its contribution to industrial output, employment generation and the export earnings of the country. The Textiles sector is the second largest provider of employment after agriculture. Thus, the growth and all round development of this industry has a direct bearing on the improvement of the economy of the nation. Currently, it contributes about 14 percent to industrial production, 4 percent to the GDP, and 16.63 percent to the countrys export earnings. It provides direct employment to over 35 million people, which includes a substantial number of SC/ST and women. 

The industry is now accelerating at an annual growth rate of 9-10 percent and is expected to grow at a rate of 16 percent in value terms and will reach the level of US $ 115 billion by 2012. The clothing and apparel sub-sector are expected to grow at a rate of 16 percent in volume terms and 21 percent in value terms, and textiles exports are expected to grow at a rate of 22 percent in value terms, by 2012.

The catalyst for this exponential growth is a buoyant domestic economy, substantial increase in cotton production, the conducive policy environment provided by the Government, and the expiration of the Multi Fibre Agreement on December 31, 2004.

*Technology Mission on Cotton*

The Government has initiated schemes which have facilitated the growth of the industry. The Technology Mission on Cotton has increased cotton production and reduced contamination levels. This industry consumes a diverse range of fibres and yarn, but is predominantly cotton based. A significant increase in cotton production during the last two-three years has increased the availability of raw cotton to the domestic textiles industry at competitive prices, providing it with a competitive edge in the global market.

The Technology Upgradation Fund Scheme has facilitated the installation of the state-of-the-art machinery at competitive capital cost, and the Scheme for Integrated Textiles Park was launched to neutralize the weakness of fragmentation of various sub-sectors of the textiles and non-availability of quality infrastructure. The rationalization of fiscal duties undertaken during the last three years has provided a level playing field in all segments of the industry, resulting in the holistic growth of the industry.

*Increased Investment And Plan Allocation*

Investment in the textiles sector in the past three years increased from Rs. 11,628.00 crore in 2004-05 to Rs. 31,000.00 in 2006-07. It is estimated that total investment in the textiles and clothing industry between financial years 2004-07 was around Rs. 64,478.00 crore. It is expected to reach Rs 1,50,600 crore by 2012. This enhanced investment will generate 17.37 million jobs by 2012. 

In 2007-08, the plan allocation for Textiles has been enhanced by 66.27% over that of 2006-07. The Ministry of Textiles is one of only two Ministries that has seen such a high level of incremental budgetary support for its Annual Plan.

*Exports*

The Indian textiles industry is an export intensive industry, and about one third of its total production is exported in some form or the other. Through export friendly Government policies and positive efforts by the exporting community, textiles exports increased from US $ 12.45 billion in 2002-03 to US $ 17.85 billion in 2005-06, and are estimated at US$ 19.24 billion in 2006-07.  

Exports of textiles and clothing, till 2004-05, had grown at a moderate pace. However, in 2005-06, they registered a sharp growth of 22%. This sharp rise in export was due to the elimination of trade quotas in the global textiles and clothing trade after over four decades of restrictions, w.e.f. January 1, 2005 coupled with an increased flow of funds to augment capacities in the entire textiles value chain, and favourable Government policies. Textile exports are expected to reach US $ 55 billion and attain a share of 7% in the global textiles trade by 2012.

*Apparel and Clothing*

The Clothing sector is an export intensive sub-sector and contributes about 40-45% to total textiles exports. It is a low investment and highly labour intensive industry : an investment of Rs.1.00 lakh in the sub-sector creates 6-8 jobs.

During the Tenth Five Year Plan, exports of readymade garments increased at the annualized rate of growth of 13.72%. Major change was witnessed in 2005-06, when it increased by 28 percent.

The investment requirement of this sub-sector by 2012 will be Rs.21,800.00 crore, and will create incremental employment for a 56.40 lakh workforce, of which 28.25 lakh will be semi-skilled, and 11.30 lakh un-skilled. 

*Scheme For Integrated Textiles Park (SITP)* 

Though the Indian textiles industry has its inherent advantages, infrastructure bottlenecks are a prime area of concern. With a view to take advantage of the post Multi Fibre Arrangement scenario, the Apparel Parks for Exports Schemes and the Textiles Centre Infrastructure Development Scheme were launched in 2002 to provide world class export infrastructure at important textiles centres. The objective of APES was to create exclusive export zones of apparel manufacturing. TCIDS was to modernize and fill in the gaps in the existing infrastructure at existing major textiles centres, to remove the impediments to production. 

The performance of both Apparel Parks and TCIDS was restrained by the nature of assistance permitted. It was felt that there was a need to review both the schemes to examine the possibility for making provision for expeditious implementation of these schemes. Therefore, both the Schemes were subsumed into a new scheme called the Scheme for Integrated Textile Park  in 2005. These parks would incorporate facilities for spinning, sizing, texturing, weaving, processing, apparels and embellishments. This scheme is based on the Public Private Partnership (PPP) model. 

During the Tenth Five Year Plan, 30 projects were sanctioned: Andhra Pradesh (4), Gujarat (7), Maharashtra (6), Tamil Nadu (6), Rajasthan (4), Karnataka (1), Punjab (1) and West Bengal (1). These parks will be set up by 2008 with an additional investment of Rs. 15,434.60 crores. The Integrated Textile Park at Palladam, Tamil Nadu is nearing completion.

These parks will generate an annual production of Rs. 23,600.00 crores, and will create more than half a million new jobs. Additional textiles parks will be set up by 2012.

*National Institute of Fashion Technology (NIFT)*

NIFT was established by the Ministry of Textiles in 1986 as the apex body for HRD for the textiles, garment and allied sectors. NIFT has recently been given Statutory Status through an Act of Parliament for the promotion and development of education and research in Fashion Technology. 

A new extension centre was inaugurated at Rae Bareli in Uttar Pradesh on February 13, 2007. The opening of new NIFT Centres at Patna and Mohali is under consideration.

*Apparel Training and Design Centres (ATDC)*

The Apparel Industry employs approximately 5 million workers, of which approximately 2.5 million are employed in the export sector. Thirteen Apparel Training and Design Centres (ATDC) are being run by the Apparel Export Promotion Council (AEPC). ATDCs have trained over 21,000 workers since inception. AEPC plans to set up 25 new centres in 13 States, and 13 mobile centres during the Eleventh Five Year Plan. These additional facilities will enable ATDCs to train 57,625 trainees in addition to 30,000 students being trained by existing ATDCs. Further, 15,000 students would be trained through mobile centres. 

*Jute*

The Jute industry occupies an important place in the national economy. It is one of the major industries in the eastern region, particularly in West Bengal. Jute, the golden fibre, meets all the standards for safe packaging in view of being a natural, renewable, biodegradable and eco-friendly product.

The Government has announced the first National Jute Policy on April 15, 2005, and as envisaged in the Policy, the Government on June 2, 2006, approved the implementation of the Jute Technology Mission (JTM) at an estimated cost of Rs.355.55 crore.

*Sericulture and Silk Industry*

Globally India is the second largest producer of silk and contributes about 18% to the total world raw silk production. India has the unique distinction of being endowed with all the four varieties of silk, namely, Mulberry, Eri, Tasar, and Muga. The sericulture and silk textiles sector provides employment to about 6 million people, mainly in rural areas.

*Handlooms*

Handlooms play a very important role in the countrys economy and provide direct or indirect employment to about 6.5 million people. The Government has ensured the availability of raw-material to handloom weavers through the Hank Yarn Obligation Order.

The production of fabric by this decentralized sub-sector has been on the upswing. In 2005-06, and in 2006-07, the production is estimated at 6,871 million sq. mtrs.

For the first time a cluster approach was introduced in 2005-06 for the comprehensive and holistic development of selected handlooms clusters, and during 2007-08, 100-150 additional handlooms clusters will be taken up for development.

For the welfare of weavers in handlooms sector, Mahatma Gandhi Bunkar Bima Yojana was launched in 2005 to provide life insurance cover to weavers. Similarly, the Health Insurance Scheme was also launched in 2005 to provide health insurance coverage to the weaver, his/her spouse and two children.

*Handloom Mark*

The Handloom Mark was launched on June 28, 2006, by the Honble Prime Minister, Dr. Manmohan Singh, to give a distinctive identity to handlooms products.

*Handicrafts*

Handicrafts represent the rich and diverse cultural heritage of the country. Its cultural importance pertains to ensuring the preservation of heritage, traditional skills and talent. The economic importance lies in the handicrafts high employment potential, low capital investment, high value addition and potential for export/ foreign exchange earnings.

The Sector provides employment to an estimated 63.81 lakhs artisans, of which 47.42% are female; 24.73% belong to Scheduled Castes, and 12.38% to Scheduled Tribes. 

Exports of Handicrafts and hand-made carpets has increased from Rs. 17,608.91 crores (US$ 3.98 billion) in 2005-06 to Rs. 20,963.00 crores (US$ 4.61 billion) in 2006-07. India is the world leader in carpet exports with 36% of the global market share. 

The Rajiv Gandhi Shilpi Swasthya Bima Yojana was introduced to provide health insurance coverage to artisans and their families

The Government has reaffirmed its resolve to restructure and make the Textile sector competitive. The growth trajectory is now irreversible. Investment is increasing, textiles exports are on the rise, Plan allocations have increased, confirming the buoyancy of the sector. 

Source: Inputs from the Ministry of Textiles


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## Bushroda

*Indias automotive components industry grows up*
3 August 2007 | 
just-auto.com, UK

*The Indian automotive components industry is rapidly gathering strength and becoming much more significant to the global auto industry according to research undertaken by auto industry website, just-auto.com. *

The research highlights a massive influx of overseas technology and know-how since the Indian economy was deregulated in the 1990s and inward investment to India took off.

Many global companies looking to outsource to low-cost locations now view India more favourably than China as a source point for components.

There are a number of reasons for this: not least the issue of language. 

All educated Indians speak fluent English, making communications easier. 

Secondly, there is a good further education system in the country, leading to the high availability of well-trained engineers. 

Thirdly, there is a strong manufacturing and engineering tradition in the country, which means that it is not difficult to upgrade local companies in terms of equipment, training and quality of output. Companies also tend to be entrepreneurial and willing to learn. 

Finally, there is a very strong high-tech sector, making it attractive to outsource software development and R&D functions. 

International Tier_1 suppliers are also becoming increasingly confident in India's ability to build more complex parts.

just-auto's report also notes that although it is now being addressed by the Indian government, Indian transport infrastructure is still poor. However, this is counterbalanced by India's excellent strategic location between Europe and Asia, allowing it almost equidistant access to both major markets.

The country's growth targets in terms of overall industry size and export value seem achievable, and the coming years are likely to see increased traffic between India and the rest of the world, in terms of inward investment into India and, increasingly, outward investment by large Indian companies in overseas manufacturing.

In the steel industry, Indian companies have taken a major global position through overseas acquisitions. Large Indian automotive firms such as Tata look set to follow, either through buying car brands or components companies. 

India's position and influence in the global auto industry will undoubtedly keep on growing, the report concludes.


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## Bushroda

*India's Wipro eyes acquisition of Nasdaq-listed Infocrossing*
CNN Money, NY
August 03, 2007: 12:31 PM EST

BANGALORE, Aug. 3, 2007 (Thomson Financial delivered by Newstex) -- India's third-biggest software exporter Wipro Ltd (NYSE:WIT) is looking to buy Nasdaq-listed Infocrossing Inc (NASDAQ:IFOX) , an outsourcing solutions company, according to a report on CNBC-TV 18 citing sources.

The television channel said the deal size is between 450-500 mln usd.

'We do not comment on market rumours,' a Wipro spokesperson told Thomson Financial.

Infocrossing, a provider of selective IT infrastructure , enterprise application and business process outsourcing services, reported first quarter revenues of 59.2 mln usd and forecast full year revenues of between 250-255 mln usd for 2007.

Last year, the Leonia, New Jersey-based IT company had posted revenues of 229.2 mln usd
Wipro closed at 470.25 Indian rupees, up 1.73 pct, on the Bombay (OTCBB:BBAO) Stock Exchange, while Infocrossing was trading up 6.34 pct at 18.15 usd.

Earlier, on July 20, the NYSE-listed Wipro's chief strategy officer Sudip Nandy had said the company is likely to make acquisitions in Germany in the price range of 60-70 mln eur.

On July 6, Wipro's consumer care and lightings unit agreed to buy Singapore-based Unza Holdings Ltd, a consumer goods manufacturer for about 246 mln usd in cash.

As on June 30, the company had cash and cash equivalents of 18.02 bln usd.


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## Bushroda

*CII to launch 'Sustainable Cities' project in South India*

Kochi, Aug 3 : Describing the development of 'Sustainable Cities' with improved habitation standards as crucial for India's growth, CII Southern Region Chairman Pradipta K Mohapatra today said the Confederation will launch several projects for this shortly.

Addressing a press conference here to announce the CII's initiatives for south India for 2007-08, Mr Mohapatra said under the head 'Sustainable Cities', CII was planning to develop a 'City Connect Project' in Karnataka in association with the Jawaharlal Nehru Urban Renewal Mission.

It would also commission a study on 'City Infrastructure' in Hyderabad. CII, Kerala, had already set up a task force for an 'Urban Kerala Mission', state CII Chairman Umang Patodia said.

Stating that the CII would like the southern states to synergise their development initiatives and learn from one another, Mr Mahapatra praised Tamil Nadu for developing its Tier II and III cities in a big way.

Similalry, lessons could be learnt from Kerala's success in tourism, Andhra Pradesh's strides in agro-based products, Karnataka's headway in innovation and Puducherry's initiatives for livelihood enhancement, he added. 

Unveiling the CII's work plan for southern India, for 2007-08, entitled 'The Southern Leap Forward', Mr Mohapatra said the key focus of this would be on skills development and employability, affirmative action, promotion of sustainable cities, progress of less developed areas and corporate social responsibility.

As part of the affirmative action planned by CII, at least 2,000 SC/ST youth were to be trained in vocational skills in different southern states. 

Stating that the CII would like to partner with the state governments in implementing the plan, Mr Mohapatra said he would meet Kerala Chief Minister V S Achuthanandan and other senior government officials tomorrow to see how the CII plan could be accomplished with the government's vision.


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## Bushroda

*IT-ITES sector tapping revenue of US$ 50bn*
2007-08-03 19:39:42 
Source : Moneycontrol.com

NASSCOM and The Boston Consulting Group (BCG) today released Innovation Report 2007 which consists of findings for unleashing the innovative power of the Indian IT-ITES industry. The report addresses three aspects of the innovation agenda  the factors that form a powerful imperative for innovation; the approach for firms to spur innovation; and specific recommendations to expand the innovation ecosystem in India. It benchmarks the Indian innovation ecosystem with leading innovation ecosystems around the world, and outlines recommendations for developing Indias innovation ecosystem for the country to realize this multi-billion dollar opportunity.

Sharing findings of the report, Mr. Kiran Karnik, President, NASSCOM, said, India has established itself as a distinguished leader on the world stage in the IT-ITES arena  Indian firms have successfully dominated the first two phases of evolution characterized by export led growth driven by factor arbitrage and gaining domain experience and superior delivery capabilities. However, the industry is now entering the third phase where Indian firms needs to recognize and act on the importance of Innovation for maintaining their competitive edge and fuelling further growth to challenge global players. Traditional factors that led local firms through the first two phases are being fast eroded by rising factor costs, geographical and cultural affinity to other destinations, global firms building sizeable Indian capabilities, very few big Indian players and future governance and management challenges for firms if they follow the current linear expansion model.

He added, Focusing on innovation besides differentiating Indian IT-ITES industry will also allow it to tap additional revenue streams worth US$ 50 billion by 2012.

Innovation is the top priority for global corporations todayfor growth, differentiation and leadership. If the Indian IT industry can further enhance its ability to service this top priority of global corporations, the market opportunity is inestimable. While the Indian IT-ITES industry has shown strong revenue growth over the years largely led by exports, investments in deep domain knowledge and IP creation would help fuel this growth story. To sustain high levels of growth, the industry needs to focus on cultivating and nurturing an ecosystem of innovation and institutionalize it. Be it process innovation, product innovation, business model innovation and the like, India is uniquely positioned to define that platform and set newer benchmarks both for the domestic and global IT industry, said Mr. Lakshmi Narayanan, Chairman, NASSCOM.

Mr. James Abraham, Partner and Director, BCG commented, "Support from ecosystem is very important in making innovation at firm and country level successful. Relative to several international examples, Indian ecosystem is weak and requires significant bolstering. The study identifies specific initiatives which need to be undertaken by different stakeholders.

The report outlines several challenges faced by the Indian innovation ecosystem such as:

Insufficient mentoring and networking support for start-ups and entrepreneurs

Lack of entrepreneurs focused on IP development in emerging technologies

Lack of knowledge sharing between IT-ITES firms and key user industries

Severe lack of funding at the seed / start-up stage

No platforms for all stakeholders to interact with each other

No market-place for innovation trading in India

Tenuous partnership between industry and academia

Lack of meaningful collaborations between industry and research institutes


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## Bushroda

*Tatas plan to make aircraft components*
Fly South Aviation News, South Africa

MUMBAI: Tata Group, which started India's first airline in the 1930s, is understood to be planning a foray into manufacture of aircraft components for exports. 

The group is acquiring land at a Special Economic Zone in Nagpur for setting up the component manufacturing plant. Incidentally, US aircraft maker Boeing too is setting up a Maintenance, Repair and Overhaul (MRO) facility at the Nagpur SEZ. 

Tata Motors ED (finance) Praveen Kadle said that the company has plans for the aerospace sector but maintained that nothing has been finalised as yet. 

Maharashtra Airport Development Company vice chairman and MD RC Sinha, whose firm is in charge of putting up the Nagpur SEZ project, said that a Tata company is taking up the land for aircraft component business. 

The Tata Group had started Tata Airlines in 1932 and it was taken over by the government that turned it into Air India. The infrastructure work on the Nagpur SEZ is progressing satisfactorily and major work would be completed by December next year, Sinha said.


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## Bushroda

*CII CEOs mission to China for businesses in Steel*
2007-08-03 19:10:49 
Source : Moneycontrol.com

A 9-member delegation of Confederation of Indian Industry (CII) headed by Mr. Sanjay Budhia, Chairman of CII National Committee on Trade Policy and Managing Director of Patton International Ltd, is on a CEO Level Business visit to China. The delegation will visit Beijing, Nanjing and Shanghai from 31st July to 3 August 2007. The objectives of the mission are to interact with Chinese companies to explore business opportunities for Indian companies, to identify new emerging technologies and possible areas of cooperation and to interact with government officials to support the ongoing India-China Strategic Cooperative partnership. The delegation is supported by the Embassy of India in Beijing and the Indian Consulate in Shanghai. 

The members of the delegation comprise Mr. Arvind Jain, MD, Bhilai Engineering Corporation Ltd; Mr. Harsh K Jha, MD, Tata Metaliks Ltd.; Mr. Sandipan Chakravortty, Deputy Chairman of CII (ER) and MD of Tata Ryerson Ltd.; Mr. Ramavtar Agarwal, Vice President (Steel), Texmaco Ltd.; Mr. Bhusen Raina, Immediate Past Chairman of CII (ER) and MD of The Tinplate Co. of India Ltd.; Mr. Sumit Goyal, Vice President, Patton International Ltd.; Mr. Sunil Misra, Regional Director, CII (ER) and Mr. Madhav Sharma, Director & Chief Representative, CII (China).

The CEO Mission is focusing on steel trade between the two countries. The mission visited the Nanjing Iron & Steel Co Ltd and will have several interactions with Steel companies like Jiangsu Dongsheng Metal Material Co., Ltd; Nanjing Aibang Iron and Steel Co., Ltd; Jiangsu Federation of Industry and Commerce Steel Commerce Chamber; Meishan Steel and Iron Co., Ltd; Jiangsu Shagang Steel Group Co., Ltd; Jiangsu Overseas Group Co., Ltd. In Shanghai, the delegation will visit the Boa Steel Plant.

While comparisons of the Indian and Chinese economic performances and their shares in world market in various sectors continue unabated, close economic cooperation between the two countries in recent years represents a significant development. The CII CEO's Delegation to China will certainly endeavor to further promote the trade and economic cooperation between the two countries.

India-China bilateral trade reached about US$ 25 billion in 2006. The trade missions have played an important role in achieving the trade targets set by the two governments. The business community of India is keen to identify the key opportunities to enhance business ties with the Chinese economy. In past few years, the networking between the businesses of the two countries has led to rapid increase in bilateral trade. According to a CII study, in view of India's dynamic comparative advantage, special focus needs to be given to investments and trade in services and knowledge-based sectors, besides traditional manufacturing. CII Survey in 2006 also pointed out that building Brand India in China is very important to boost India's export to China. The CEO's Mission to China is a major step in achieving that objective.


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## Bushroda

*CEOs for synergy between B-schools, industry* 
Press Trust of India / Noida 
August 04, 2007 

Top executives of leading corporates such as Reliance Industries, HCL, Parsvnath and UK Paints have suggested forging links between business schools and industry to leverage India into an economic super power in the next two decades.

"Emphasis should be laid on all round development of students in today's world of hardcore commercialisation. The aim of B-Schools should be creation of total human beings," Pradeep Bhagat, director, UK Paints India, said at an HR summit organised by B-School Amity International.

He added that a comprehensive development alone could ensure the success of the future managers and executives in present competitive world.

Industry guides and mentors who helped the final year MBA students in completing summer training were felicitated with 'Academic-Industry Interface Award' followed by cultural performances by the students.

Industry leaders felt the concept of the Industry-academia interaction was an interesting one as the economy is on a high growth path and there is no dearth of jobs in the country.

Arunava Guha, VP, Reliance Industries, said: "Such events are the need of the day. Industries and academia have to work hand in hand, as either cannot survive without the other." The meet highlighted that it is not necessary that a person with a degree in business management would also be a good manager. Years of toiling around people and being in tune with customers, co-workers and other managers goes into the making of an effective and "good" manager.


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## Bushroda

*A Monsoon Romance? * 
*Indian farming must think beyond mere seasonal gambles* 
Lola Nayar 

*Chaff And The Grain *

*India is banking on 4% agriculture growth for achieving double-digit GDP growth 

Public investments in agriculture have risen to Rs 13,200 cr in 2005-06 from Rs 7,000 cr in 2000-01. But its share in planned expenditure has come down to below 2%. 

Production has gone up wherever high-yielding crop varieties have been adopted 

Not much progress has been made on irrigation infrastructure as most farmers are still dependent on monsoons which can make or mar production 

Policy and management fatigue are attributed to farm crisis*

***

First, the good news. After over a decade, India is likely to witness three consecutive years of positive growth in the farm sector, if the weather gods continue to be benevolent this year. Until now, despite a not-so-good July month, the summer monsoon, which accounts for four-fifths of annual rainfall, has been 4 per cent higher than normal. It seems agriculture is on a revival path, and Union finance minister P. Chidambaram's dream of a double-digit GDP growth may soon become a reality.

Although experts don't wish to speculate on the impact of the 30 per cent shortfall in rainfall during the week ended July 25, they say that an overall one per cent increase can result in 0.21 per cent growth in agriculture, provided other factors remain favourable. If true, agriculture can grow by over 3 per cent this year, instead of the 2.5 per cent estimated by the prime minister's economic advisory council (EAC). Even the 2006-07 GDP growth is expected to be pegged higher than 9.4 per cent with a revision in farm production estimate.

Both Chidambaram and PM Manmohan Singh have often stressed in the recent past that for India to achieve double-digit growth, it is important that the agriculture sector clocks 4 per cent annual growth. And that the manufacturing and services sectors keep growing at the current frenetic pace. If monsoons are good next year too, despite the government's current objective to cool down the overheated economy, a 10 per cent growth is in the realm of possibility.

"The recent progress is largely because of a revival in investments in irrigation and rural infrastructure as well as credit flow to the farm sector," notes M.S. Swaminathan, chairman, National Commission on Farmers. Prof Ramesh Chand of the National Centre for Agricultural Economics and Policy Research points to the quantum jump in public investments in agricultureup from Rs 7,000 crore in 2000-01 to Rs 13,200 crore in 2005-06. Overall, while Rs 60,000 crore was allocated for agriculture in the 10th plan, the figure is being hiked to Rs 1,33,000 crore in the 11th plan.

Mangala Rai, director general, Indian Council of Agricultural Research, feels there is another factor that has fuelled the current growth phase. He thinks that wherever better crop varieties have been promoted, yields have increased sharply. In the case of wheat, farmers in Punjab have double the productivity levels compared to their counterparts in Uttar Pradesh and Bihar. Similarly, Andhra Pradesh farmers have higher yields of pulses and chickpea, which normally grow better in the north.

Despite this rosy scenario, experts feel this is just a short-term phase. For instance, Chand stresses that "agriculture distress cannot be stemmed with two or three years of investments and growth". Cautions Swaminathan: "We can't be complacent since over 60 per cent of our cultivated area is still rainfed. 

We must accelerate progress in water-harvesting and efficient use." These experts think India has to evolve a long-term vision to combat the existing agriculture crisis.

India is not on firm ground when it comes to ensuring food security; in fact, foodgrain production has stagnated at 209-213 million tonnes in the past several years, with sharp dips during years of poor monsoons. (This year, the estimates have been raised by 4 million tonnes to 216 million tonnes.) In addition, the share of agriculture has declined to 18 per cent of the GDP even as it continues to sustain 58 per cent population. "Therefore, there is no time to relax or rejoice," contends Swaminathan.

Even the current wave of positive growth is a sort of a misnomer when looked over a longer time period. For example, the overall average annual growth rate is short of the targets set under the 10th Plan. ICAR's Rai adds that while the average annual growth between 1996-97 and 2003-04 has been around 2.7 per cent, there has actually been a negative growth of 0.3 per cent in monetary terms. This implies that farmers are earning much less than what they were in the 1980s and early 1990s.

Critics feel the negative growth in economic terms is due to a "policy fatigue" that prevent decision-makers "from taking bold steps". The government doesn't look at agriculture in commercial terms, and sees the farmers as mere producers, not also as rural consumers. "In such circumstances, who will invest in farm sector," asks Rai. Trends in the past decade indicate farming has become unviable.

This is clearly proved by the scores of debt-trapped farmers, who continue to commit suicides every week, particularly in relatively prosperous states like Maharashtra and Andhra Pradesh. Last week, in keeping with the government objective of ensuring inclusive growth and preventing suicides, the prime minister's office held parleys with states to ensure greater focus on agriculture.

G.K. Chadha, a member of the EAC, looks at growth with a sense of optimism. "But I feel investments need to be pushed further as we are not able to generate enough rural employment, improve incomes, or eradicate rural poverty," he adds. For this to happen, investmentboth public and privatehave to increase further. Experts say that while public investments have gone up in quantitative terms, they have declined from over 4 per cent of budgetary allocations in 1980-81 to under 2 per cent this year.

For improving incomes of the small and marginal farmers, president of Indian Society of Agricultural Economics S.S Dohl moots setting up of environment-friendly industries in rural areas, which employ 70-80 per cent local workers. "There must be a pull factor for marginal farmers who can work in these industries, and also do part-time work on their farms," he says. Adds Chadha: "Although production is beginning to match the shift in consumption patterns, India needs to take a quantum jump from the current technology fatigue and push for newer crop varieties."

Then there is the question of "management fatigue" among the decision-makers. S.S. Acharya of the Jaipur-based Institute of Development Studies points to some recent blunders. One of them related to the government's move to import one million tonnes of wheat. As the tenders to import wheat at $260 per tonne were kept in abeyance, India is faced with prices of over $300 per tonne. "We are a big player in the global market and should have our own forecasting mechanism. There are people who have interest in our decisions going wrong," warns Acharya.

So, while the government keeps making such mistakes, it keeps pinning its hopes on the rain gods. But Rai thinks India needs to be prepared for the vagaries of the monsoons and climatic changes.He adds that the country has witnessed 11 of its hottest years in last 12 years. Chadha's last words shouldn't be forgotten too; he says Indian agriculture "is still a gamble on the monsoons".


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## Bushroda

*Avoid infrastructure funds if you can*
Saturday, August 04, 2007 15:29 IST

Here is one opportunity everyones sure about  the infrastructure sector. Investors are pouring money into infrastructure stocks and funds. The logic is very simple. India is a growing economy and there is huge demand for infrastructure. 

So, these companies are likely to see exemplary growth. All the same, those investing in this sector may be exposing themselves to high risk. Its time for stock-taking. 

Well limit ourselves to answering just two questions: a) should be invested in infrastructure funds, and b) What should be the allocation. 

These days, it is not uncommon to meet people who have put over 20% of their portfolios into dedicated infrastructure funds. Add the infrastructure component in the diversified equity funds and what you have is an allocation well in excess of that (may be as high as 35%). 

Well, even if you are an investor who has a high risk appetite, this kind of an allocation may be stretching it too far. 

Here are some points to be kept in mind when evaluating the prospects of the infrastructure sector:

*There is indeed a tremendous growth opportunity. However, will this growth be profitable? Given that competition is already very intense, profitability will be a big issue. Ultimately, stock prices track earnings growth, not sales growth. 

*With more multinational engineering and construction companies coming to India, the competition is likely to intensify further. Profit margins in India are higher than the international average; there is no guarantee that margins in India will not move to the international average. If this were to happen, profitability will be hit. 

*With demand growing so rapidly, and companies stretching themselves to grow, execution risks arise. Any failure on the execution front (lapse on recruitment, quality related issues, delay in execution) could have significant monetary and non-monetary consequences for the company. For some reason, investors are ignoring this risk completely. 

*From a stock market perspective, you need to evaluate how much of the future growth and the potential risks are factored into the stock price. Only if the risk-return ratio is favourable should you consider an investment. If you were to go by this criterion, not many stocks would find favour. 
This brings us to a critical point  why restrict your fund manager to investing only in infrastructure stocks? 

If you have selected a good asset management company with a smart fund management team, give them the flexibility to invest the monies across sectors. Of course, if they find something attractive in the infrastructure sector, as per their criteria, they will own it for you. 

Our recommendation, therefore, is to avoid infrastructure funds. If, however, you have a huge appetite for risk, may be you should consider having 5-10% of your monies in such funds (from reliable AMCs). 

Sector funds have dominated the performance charts over the last one year. Infrastructure funds grab the maximum number of places in this listing. As an investor, it is natural for one to consider investing in sector funds and in particular infrastructure funds. 

But as a smart investor, it is important to realise that if you are looking at building long-term wealth without taking undue risk, sector funds are best avoided. But, if you still wish to own them, ensure they account for no more than 5-10% of your portfolio.


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## Bushroda

*'Time' Brings out Special Cover on Booming India * 

New Delhi, Aug 4: Time magazine has come out with a special cover to mark the 60th anniversary of India's independence, noting that the world's largest democracy is 'living up to the dreams of 1947' when it got freedom.

The issue has articles that look at the country's middle-class, religion, politics and the transformation of its economy, besides a write-up profiling the conflicts, trends and turning points that shaped modern India.

In an article, noted writer William Dalrymple, the author of 'The Last Mughal: The Fall of a Dynasty, Delhi 1857', says India's rise is not a 'miraculous novelty' as depicted by the Western media and that it is a return to traditional global trade patterns.

He argues that 'the idea that India is a poor country is a relatively recent one' as 'historically, South Asia was always famous as the richest region of the globe'.

The magazine, in its cover story 'India Charges Ahead', notes that the country faces challenges the size of an elephant but the world's largest democracy is living up to the dreams of 1947.

"Twenty years ago the rest of the world saw India as a pauper. Now it is just as famous for its software engineers, Bollywood movie stars, literary giants and steel magnates," one article says.
______________________________________________________________________________

*I've covered all the articles from the TIME Magazine's current issue on Page#58(Posts# 574, 575, 576, 577, 578 & 579)*


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## Neo

*Indian PM warns agriculture is in crisis ​* 
BANGALORE, India: Prime Minister Manmohan Singh warned on Friday against complacency over Indias booming economy, saying the dividends of growth are yet to trickle down to the rural poor and farmers are in crisis.

Singh, whose party came to power in 2004 on the promise of improving rural lives, is presiding over an economy that is growing at around nine percent, the fastest after China.

The investment and savings rate is as high as 35 percent of national economic output, Singh said at a meeting of his Congress party in this southern 

Indian city, the hub of a $50-billion IT industry at the vanguard of the countrys economic resurgence.

But we cannot be complacent till the growth becomes inclusive and socio-economic development benefits more than half the population, especially in rural areas, Singh said.

Indias rain-dependent agriculture, which contributes about a fifth of economic output but is a direct or indirect source of livelihood for two-thirds of its billion-plus population, is growing at less than a quarter the pace of the overall economy.

Annual per capita food grain production declined from 207 kilograms (455 pounds) in 1995 to 186 kilos last year. The rate of agricultural growth fell from five per cent in the mid-1980s to less than two percent in the past five years.

India, the worlds second-largest wheat producer, exported no wheat last year after shortages forced it to import the commodity for the first time in six years.

Despite the Indian economy growing at a sizzling pace, thousands of debt-ridden farmers have committed suicide after crop failures.

Agriculture in many parts of the country is in a state of crisis, said Singh, an economist who in 1991 introduced reforms that ended four decades of socialist-style insulation by opening the doors to foreign investors.

The fact that farmers are compelled to resort to suicides is a matter of deep concern for all, he said.

In May, Singh announced a six billion dollar package to try and help poor farmers.

The funds for investment in technology and infrastructure to bring crops to market more efficiently will be made available to Indias 29 states over a four-year period.

Social activists say the suicide rate among poor farmers in six of Indias 29 states has hit a 10-year high despite a Rs37.5-billion ($835-million) relief package unveiled by Singh last year.

On Friday, the premier pledged to improve living standards in the countryside by building state-of-the art power plants, roads, telecommunications, housing, healthcare and education facilities.

http://www.thenews.com.pk/daily_detail.asp?id=66876


----------



## joey

*Gujarat's agri productivity up Rs 34,000 cr*
3 Aug, 2007, 1600 hrs IST, PTI
Economic Times

COIMBATORE: Agricultural production in Gujarat increased four times from Rs 9,000 crore in 2001-02 to Rs 34,000 crore in 2006-07 following the introduction of 'Krishi Mahotsav', the state's Minister of State for Agriculture Dilipkumar Thakor said on Friday. 

Considering the plight of farmers in Gujarat, Chief Minister Narendra Modi drew up the Krishi Mahotsav programme to enhance their income. Scientists and officials went to villages and advised farmers on the use of fertilizers, pesticides and pattern of crops, Thakor said. 

The initiative proved successful and farmers are a happy lot now due to increased productivity and income from agriculture, horticulture and animal husbandry, Thakor said while interacting with scientists of the Tamil Nadu Agricultural University here. 

About 700 scientists and officials visited over 18,600 villages and met nearly one lakh farmers. The Gujarat government wanted to see the income of the farmers doubled in five years, he said. 

The main aim was to restructure the system and reframe agriculture policy by strengthening research and links between scientists and farmers and to bring about a change in the attitude of farmers, Thakor said. 

Later, talking to reporters, Thakor said Gujarat and its agricultural universities are exploring the possibility of entering into collaborations in various fields of agriculture and horticulture.

***********************

Hear Hear the great commies the peoples government, it has been 30 years since your managing my state and still you have to kill peoples to get land for SEZ. What a irony!

*****************************************************

*Pak opens door for Indian ships to enter*
4 Aug, 2007, 1400 hrs IST, TNN
Economic Times

NEW DELHI: Indian ships will now be allowed to go into Pakistan, enabling direct movement of goods from Pakistan to India. The two countries have signed a new shipping protocol bringing to an end the 31-year protocol, which allowed goods to be ferried by India only through third-country ships. 

The two countries are also discussing a comprehensive visa agreement, which will also take into account business visas. Both have decided to open two bank branches in each country and facilitate cement exports from Pakistan and tea imports from India. 

The decisions have been taken as part of the composite dialogue held between the two countries. Addressing a business session organised by Ficci, Pakistan commerce secretary Asif Shah said the new shipping protocol was already in place and there were no legal issues restricting Indian ships from going into Pakistan. 

&#8220;I don&#8217;t know if there are any technical issues left to be sorted out. But legally, Indian ships are now allowed to enter ports in Pakistan,&#8221; he said. 

The commerce secretary revealed that the two countries were in the process of discussing a visa regime and a comprehensive visa agreement was on the anvil, which would include business visas. &#8220;It takes two to tango. If India agrees to the proposals made by Pakistan, there will be a sea change in the visa regime,&#8221; he said. 

On export of cement to India, Mr Shah said discussions on the required certification process had proved to be fruitful and the first tranche of cement was likely to be exported by August end.


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## joey

*Moser Baer bags $880mn deal*
28 Jul, 2007, 0356 hrs IST, TNN
Economic Times 


NEW DELHI: Moser Baer Photo Voltaic (MBPV), a Moser Baer subsidiary, has entered into an eight-year, $880-million agreement with Norway-based REC Group for sourcing multi-crystalline silicon wafers. Silicon wafers go into manufacturing wafer-based solar cells. 

MBPV uses multiple technologies, including crystalline silicon, nano-technology and thin film, to make solar cells and modules. It has manufacturing facilities in an SEZ at Greater Noida. 

Delivery of wafers under the agreement will start in 2008. &#8220;Globally, multicrystalline silicon wafers have a long lead time and supply is short of the rising demand. This contract would help MBVP get an assured supply from a reliable supplier,&#8221; said Moser Baer CFO Yogesh Mathur. The contract with REC Group is structured as a take-and-pay contract with pre-determined prices and volumes for the entire contract period. 

MBVP would look at a combination of spot-buying, medium to long-term tie-ups and strategic investments to fulfil its silicon wafer needs. It has a strategic sourcing tie-up with Deutsche Solar and a 40&#37; stake in Slovenia-based Solarvalue Proizvodnja d.d. that plans to set up a capacity of 4,400 tonnes of solar grade silicon by 2008-end. 

The company recently announced the completion of the first phase of its 80 mw silicon crystalline project &#8212; 40 mw is currently up and running &#8212; and expects completion of second phase by the end of the current fiscal. &#8220;We are looking at expanding capacity from 80 mw by fiscal-end to about 250-300 mw in the next two years,&#8221; Mr Mathur said. 

The company recently commenced commercial shipment of its solar photovoltaic cells and announced that it has customer orders and MoUs exceeding $100 million. 

The global photovoltaic market is expected to grow over six times to $40 billion by 2010.


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## Bushroda

*Indelible investment trend boldly written in Indian Inc* 
Martyn Davies and Abdullah Verachia 
Sunday Times, South Africa
Aug 05, 2007 

India-Africa ties are no longer based on political affinity originating from their common colonial past

A new trend in the global economy is the integration of developing world economies. As trade and investment between emerging-markets grows, so traditional European and North American corporate interests are being displaced. 

This is now happening in Africa. The rise of China and India in close pursuit will change the landscape of African economies. 

Much is being reported of Chinas state-driven uber-competitiveness, but Indias private firms will be the winners in Africa. They may not have the deep pockets of Chinas state-owned resource firms, but they are profit-hungry, run by savvy managers and have tried and tested business strategies for emerging markets  India itself being among the worlds biggest. 

India Inc is coming to Africa. 

Most Indian business across the continent is micro in size and family- owned. This is why most of us cant name an Indian firm of significant size from KwaZulu-Natal. 

Similarly, we dont know any from Kenya, Tanzania or Uganda either, where second-and third-generation Indians pretty much control the economies of East Africa. 

But the new wave of Indian investment to Africa is coming from its aspirant multinationals. Corporate Indias expansion into Africa is replacing the traditional and typically entrepreneurial small trading business model of migrant Indian labour.

Indias traditional corporates are diverse, family-owned and all-powerful in their home economy. Firms such as Tata, Reliance, Mahindra & Mahindra, Ranbaxy and Dr Reddys are becoming household brands in developing markets in Africa. 

These emerging multinationals are building competitive advantage in the information technology, healthcare, pharmaceuticals, biotechnology and automotive sectors. They all have the advantage of a huge domestic market to leverage for global comparative advantage. 

Indias large and growing domestic economy provides a strong resource base from which to expand offshore. Low labour costs, a sizeable domestic consumer market, skilled labour, high levels of education and Indias wealthy international diaspora all contribute to that countrys competitive advantage.

India Incs international expansion strategy is primarily focused on emerging markets. Indian firms, often lacking the capital, products and technology to compete head-on with Western multinationals, are venturing into less competitive market spaces in the developing world. This strategy is supported by the Indian government, which is encouraging its firms to focus on non-traditional markets, the emerging-market economies with special emphasis on Africa. 

India-Africa ties are no longer based on political affinity originating from their common colonial past . Indias economic diplomacy now leverages old political ties for commercial gain. 

But when setting up shop in South Africa, Indian diplomats and entrepreneurs never fail to mention Mahatma Gandhi and how his legacy somehow makes its way into their business plans. 

Whereas Chinese state-owned enterprises have little difficulty accessing capital from Chinas policy banks, Indian firms cost of capital is market- rather than politically- determined. This partly accounts for Indias significantly lower outward stock of foreign direct investment. 

To try to rectify this, Indias government is also encouraging its firms to invest in Africa through offering financial incentives. 

Although not financially able to compete with the support given to Chinese state-owned enterprises by Beijing, Delhi is focusing its financial aid efforts on a handful of key African economies, mostly in West Africa. 

It is doing so through the setting up of financial credit lines to support Indian firms to win contracts on the continent. 

It has provided a 200-million credit line for projects under Nepad. Another 250-million credit line has been extended to West Africa through regional grouping Economic Community of West African States (Ecowas) for the Ecowas Bank of Investment and Development.

The drivers of India Inc investing in Africa are: 

Vertical integration: Indian firms are acquiring upstream companies to secure resource assets. 

Coupled with China, Indias growth is driving global commodities demand with African states satisfying a large part of this demand. 

Capturing consumer markets: Indias firms are establishing a wide footprint across Africa selling an array of products from pharmaceutical to automotive to consumer goods. 

Energy security: on the back of energy demand and rising oil prices, Indias energy firms are on the international acquisition trail. 

Having to import 70% of its oil requirements, India is strategically vulnerable. To meet growing demand for energy, Indian firms have embarked on an aggressive energy investment drive in Africa. 

India has invested almost 2-billion in Sudan. ONGC Videsh Ltd is partnering with other Asian companies Petronas (Malaysia) and the Chinese National Oil Company (CNOOC) in Sudan. Western nations imposition of sanctions against Sudan has created market gaps that have been filled by Asian firms, Indian included, that have business models less constrained by political forces. 

Head-to-head competition in the energy- and oil-rich economies of Angola and Sudan for oil concessions has pushed up the cost of acquisitions. China and India are increasingly exerting greater commercial influence in Africa. 

India is emerging as South Africas foremost strategic partner in Asia. Japan, Malaysia and China previously held this title but the rapidity at which Indian firms are investing in the local economy has increased Indias importance for the South African economy. 

As Indian firms are graduating to multinational status, South Africa has become a preferred investment destination. 

Tata is Indias major investor, and its no secret that Tatas chairman Ratan Tata has a hotline to President Thabo Mbekis office. 

Tatas axiom of benevolent capitalism and intensive community involvement appeals to the South African governments thinking on development. 

There are now 35 Indian companies that have invested about 150-million in South Africa. There is a further US500-million in the investment pipeline. 

India will soon become the biggest foreign investor into the economy. 

Indias banks are also moving in. State Bank of India already has a presence; ICICI Bank will soon move in, possibly followed by the Bank of Baroda. 

The face of Indian business will no longer be small and entrepreneurial, but corporate and multinational. This shift reflects the developmental confidence of India itself. 

Leveraging traditional relations built up during the colonial period, India is ideally positioned to take advantage of its durable political ties for commercial positioning on the continent. 

Indias emerging multinationals are being welcomed into African economies and do not have to contend with the political baggage of being a former colonial power. Along with China, Indias commercial engagement of the continent will have long-term strategic consequences for the continent  an economic destiny that is no longer framed by European interests . 

Davies is chief executive of Emerging Market Focus and heads the Asia Business Centre at the Gordon Institute of Business Science; Verachia is a senior business analyst at Emerging Market Focus.


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## Bushroda

*Realty sector prices not yet in bubble zone*
5 Aug, 2007, 0108 hrs IST, TNN

MUMBAI: The real estate sector is back in news. Only recently, the realty stocks were on a roll with the newly-launched BSE Realty index gaining handsome ground on a daily basis. However, on Friday, as news of Puravankara Projects lowering its price band to generate interest trickled into the market, investors and analysts have started voicing their concerns over the price build-up and bubble in the real estate sector. 

Incidentally, the institutional segment of Puravankara Projects was subscribed only a little over 30% till Friday when the issue was initially supposed to close. The price band has been lowered to Rs 400 to Rs 450 from the earlier Rs 500 to Rs 550. 

In a recent report on the real estate sector, JP Morgan has said that while correction in certain pockets of the country cannot be ruled out, Indian property rates are not yet in a bubble zone. Property prices seem to be at risk given concerns about rate hikes and potential oversupply. 

A correction in certain micro markets cannot be ruled out. However, our analysis of past property booms suggests that we are still not in a bubble zone, and that a bust is unlikely, says the 60-page report. 

The report also highlights the point that certain markets (NCR/ Bangalore) have already experienced some correction over the past six months even as analysis of previous property booms across the globe suggests that Indian property prices are not yet in a bubble zone. No property consultants/developers are predicting any across-the-board sell-off scenario, it adds. 

Further, the foreign brokerage feels that the fundamental drivers for the sector are in place and it is all set for a sustained structural growth period. We forecast the industry to grow from $50 billion in FY07 to $90 billion by FY11, a growth rate of 13% per annum. It further adds that the demand for real estate is backed by factors like improving demographics, healthy macro environment, growth of the service industry and notification of city development plans. 

However, at the same time, the report says that prices in India cannot be termed cheap. Clearly, prices in India are not cheap. Rise in prices as per estimates available are near 18-26% CAGR levels in Mumbai and Delhi over the last four years. India is still an emerging economy and periods of such high economic/wage growth stable pricing environment can be argued for. Also, while comparing with the past, investors must keep in mind that the quality of construction in India has markedly improved so it is difficult to get a reference figure for the same quality product, it adds. 

JP Morgan also feels that going ahead the sector will witness some amout of consolidation as well capitalised property developers are in a position to acquire projects from smaller players at profitable rates and also benefit from reduced competition for land parcels. 

Finally, the financial major has listed players such as DLF and Unitech that are likely to emerge as a proxy Indian real estate sector for investors. Region specific (Mumbai, Bangalore) players are also now coming into the market thereby widening investor choice, it adds.


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## Bushroda

*New India gets experimental*
5 Aug 2007, 0022 hrs IST
Meenakshi Sinha,TNN

Stability, security, permanence - these seem boring and staid words in the present Indian order. With the economy opening up and throwing new jobs into the pipeline, you don't have to be an NRI to make a career shift or work in NGOs seeking a prosperous rural India. Many enterprising individuals at the top of their careers are happily and successfully chucking up stable careers to find new meaning in their lives. Who wants to lumber through a 9 am-5 pm shift, if at all such a thing exists in the private sector any more? 

Now, tech wizards, investors, IT and medical professionals are all turning dreamers and visionaries. They are willing to discard the cushioned path to pursue their passions and are even making a radical career switch. 

One of the factors driving this change is the booming economy. Noted columnist Rama Bijapurkar, better known as India's market strategy consultant, says flexibility is the buzz word now and has become a valued commodity. Quite a change from the rigid norms and values of the 60s and 70s. ''Today, there's rigidity towards fixed professions like medicine, law and engineering,'' she says. But these aren't the only mantras to success now. 

Bijapurkar, a commentator on economic and social change in an evolving, liberalizing India, attributes this change to parents becoming more democratic, what with new opportunities being available to the current generation. With basic roti, kapada and makaan issues being taken care of, they know their kids won't exactly be stranded on the road or be left wanting for the necessities of life. They can therefore afford to experiment with different jobs, she explains. 

Though this section comprises merely 20% of the economy, it has seen sky-rocketing remunerations within their small range of options. ''The opening of Indian economy in the 1990s has seen dramatic growth rate in select sectors like IT, high-end and middle-level jobs and BPOs,'' says Praveen Jha, faculty member, Centre for Economic Studies and Planning, JNU. This sea change, he says, has come about due to a sense of restlessness and inadequacy with the current job. ''New opportunities only made the task easier, as people found more job satisfaction with a career switch,'' he says. 

As old patterns came under tremendous strain from the new order, sociologists found this a win-win situation in terms of social acceptance. ''Earlier, we were status-seekers, so we stuck to professions like civil services, medicine and engineering. That's no longer the case today,'' says Anand Kumar, professor, sociology, JNU. 

In fact, he says, there have been three noticeable changes in urban India. One, the new direction of the economy has created new spaces. Second, the stature attached to select jobs is crumbling, leading to newer possibilities. Third, a spirit of adventure has set in. But the latter is temporary for want of meaningful engagement. 

Maybe that's one reason why Michael Lewis, author of best-sellers like Liar's Poker, Moneyball and The New Thing, maintains that progress should be calculated in terms of what it has rolled over or left behind. In the Indian context, it depicts a growing trend towards individuals who have seized new job opportunities to harness their skills in various creative fields.


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## Bushroda

*Fishermen get credit cards under Swarojgar Yojna*
Express News Service 

Chandigarh, August 4: The Union Minister of State for Finance, Pawan Kumar Bansal today presented credit cards to 54 fishermen belonging to the minority community of Bapu Dham Colony in a function held at the sector 28 Community Hall. 

These Punjab National Bank Swarojgar Yojna Cards will allow fishermen to enhance their existing business by taking a loan upto at least Rs 50,000 under the Swarojgar Yojna Scheme. 

Speaking on the occasion, Bansal reiterated the Centres committment to reach a larger footprint of account holders in various Nationalised banks. He also laid emphasis on the importance of banking, especially for migrants who leave their homeland in search of work and better living. 

Bansal pointed out how repartriating funds back home and saving even small sums of money can have a huge impact on the overall economy of the country and how banks play a pivotal role in sustaining the dream run of the Indian economy at 9 per cent and growing. 

B P Chopra, General Manager, Punjab National Bank, emphasised the need of Nationalised Banks to participate in minority related programmes envisaged in the Prime Ministers 15-point programme. He expressed immense satisfaction at the bank being of help to the 54 fishermen who could now conduct their business with additional infrastructure and a larger footprint. 

Arshad Khan, Councillor and Convenor of United Progressive Muslim Front, said this was for the first time in the city that 54 beneficiaries from the minority community were aided financially by a Nationalised bank under this scheme. The hopes, aspirations, needs and dreams of the 54 fishermen will finally be met. It could well be termed as the beginning of a new era of financial independence and economic prosperity for the poor representatives of the minority community, said Khan.


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## Marathaman

Bushroda said:


> *New India gets experimental*
> 5 Aug 2007, 0022 hrs IST
> Meenakshi Sinha,TNN
> 
> Stability, security, permanence - these seem boring and staid words in the present Indian order. With the economy opening up and throwing new jobs into the pipeline, you don't have to be an NRI to make a career shift or work in NGOs seeking a prosperous rural India. Many enterprising individuals at the top of their careers are happily and successfully chucking up stable careers to find new meaning in their lives. Who wants to lumber through a 9 am-5 pm shift, if at all such a thing exists in the private sector any more?
> 
> Now, tech wizards, investors, IT and medical professionals are all turning dreamers and visionaries. They are willing to discard the cushioned path to pursue their passions and are even making a radical career switch.
> 
> One of the factors driving this change is the booming economy. Noted columnist Rama Bijapurkar, better known as India's market strategy consultant, says flexibility is the buzz word now and has become a valued commodity. Quite a change from the rigid norms and values of the 60s and 70s. ''Today, there's rigidity towards fixed professions like medicine, law and engineering,'' she says. But these aren't the only mantras to success now.
> 
> Bijapurkar, a commentator on economic and social change in an evolving, liberalizing India, attributes this change to parents becoming more democratic, what with new opportunities being available to the current generation. With basic roti, kapada and makaan issues being taken care of, they know their kids won't exactly be stranded on the road or be left wanting for the necessities of life. They can therefore afford to experiment with different jobs, she explains.
> 
> Though this section comprises merely 20% of the economy, it has seen sky-rocketing remunerations within their small range of options. ''The opening of Indian economy in the 1990s has seen dramatic growth rate in select sectors like IT, high-end and middle-level jobs and BPOs,'' says Praveen Jha, faculty member, Centre for Economic Studies and Planning, JNU. This sea change, he says, has come about due to a sense of restlessness and inadequacy with the current job. ''New opportunities only made the task easier, as people found more job satisfaction with a career switch,'' he says.
> 
> As old patterns came under tremendous strain from the new order, sociologists found this a win-win situation in terms of social acceptance. ''Earlier, we were status-seekers, so we stuck to professions like civil services, medicine and engineering. That's no longer the case today,'' says Anand Kumar, professor, sociology, JNU.
> 
> In fact, he says, there have been three noticeable changes in urban India. One, the new direction of the economy has created new spaces. Second, the stature attached to select jobs is crumbling, leading to newer possibilities. Third, a spirit of adventure has set in. But the latter is temporary for want of meaningful engagement.
> 
> Maybe that's one reason why Michael Lewis, author of best-sellers like Liar's Poker, Moneyball and The New Thing, maintains that progress should be calculated in terms of what it has rolled over or left behind. In the Indian context, it depicts a growing trend towards individuals who have seized new job opportunities to harness their skills in various creative fields.



This is an excellent article. Very insightful.


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## Bushroda

*The IT destination*
4 Aug, 2007, 1523 hrs IST, TNN

MUMBAI: IT Parks like Rajiv Gandhi IT Park at Hinjewadi, Magarpatta Cybercity, MIDC Software Technology Park at Talawade, Marisoft IT Park at Kalyaninagar, International Convention Centre (ICC), Weik Field IT Park etc are the latest realty development. 

Many of India's major software players such as Infosys, Tata Elxsi, TCS, Tech Mahindra, Wipro, Patni, Satyam, Kanbay Software and others have a major presence in Pune. Global majors too, like Accenture, BMC Software, HSBC Global, IBM, Dell, Google, Siemens, Amdocs, Cognizant, and Symantec have a major presence in Pune. 

The IT sector in Maharashtra got another shot in the arm recently. MIDC will jointly develop an integrated township with a New Yorkbased realty firm Vornado Reality Trust at Hinjewadi. Vornado will invest $200 million on the township which will be developed over the next five years. Hinjewadi Township Pvt Ltd will be developed jointly by MIDC and Vornado. 

The shareholders agreement was signed by Rajiv Jalota, CEO, MIDC, Maharashtra, India and Michael Fascitelli, President, Vornado Realty Trust, USA at New York on the sidelines of Maharashtra Investment Forum's two-day meet. 

Mr Shamsu Lalani, Director, Lalani Group, which has recently announced an IT Park project, 'Lalani Quantum', at Bavdhan says, "Pune is today fast emerging as an infotech hub of India. Pune is well known for its educational institutions, universities and its climate and is one of the leading destinations for IT investments. Also, it is in close proximity to the financial capital Mumbai. The availability of huge land in prime locations, as also change in the industrial atmosphere with due importance being accorded to the IT sector in a residential zone, prompted us to start the project. It will have fun and entertainment zones to make it an exciting place of work." 

Encompassing an area of around 2-lakh sq.ft, Lalani Quantum is easily accessible from the Mumbai-Pune Expressway as well as the Pune-Bangalore highway. The built-to-suit IT Park is strategically located close to a residential belt so as to ensure a steady stream of human resources. 

Engineering graduates from Pune number up to 10,000 engineers in various disciplines every year, especially serving the burgeoning software and IT industry. This ensures abundance of manpower in terms of skilled IT professionals. Also development of a proposed SEZ at Bavdhan will further boost such projects. 

Pune is witnessing a gradual transition from industry to an economy driven by IT, ITES. The active involvement of the state government responsible for this transition cannot be overlooked. Government of Maharashtra has decided to develop Mumbai-Pune as IT corridor where all facilities required by the software units with export potential could be made available through co-ordinated efforts from various government/semi- govt agencies. Electronic telephone exchanges with ISDN facilities and network of optical fibre cable are being set up, some of which are already completed and in operation. Dedicated earth stations are available for fast communication. 

Mr Lalit Kumar Jain, Chairman, Kumar Builders says, "Residential space is available in and around Pune and more importantly at reasonable rates. An area like Aundh, one of the posh localities in the city, is very close to the Software Technology Park set up at Hinjewadi. Koregaon Park, another plush and cosmopolitan locality is very close to Kharadi Knowledge Park. 

Areas having relatively cheaper rates are also available in Pimpri-Chinchwad , Sangvi, Nigdi areas, which are also close to Pune Infotech Park. This ensures that Pune doesn't just grow into another unbalanced industrial sector. The city is moving in the right direction with a fine balance between the residential and industrial sector." 

This IT boom has been instrumental in the escalation of real estate prices, which has multiplied manifold in the recent past but has stabilised now (though it still looks realistic compared to other metros and IT hubs.) Despite the price escalation, corporates and individuals are still buying as long as the IT and ITES sector boom continues. 

Mr. Prashant Waghmare, City Engineer, PMC, says, "Chief Minister Vilasrao Deshmukh in a recent meeting has made clear his intentions and has pitched for Pune as the IT destination of the State. He said that the IT companies will be coming to Pune and to make the city the next IT destination, it is essential to build the infrastructure that will attract these investments. To meet the demands of this explosive economic growth in Pune, the state is planning to develop a 1,000 MW power plant, which will exclusively serve Pune." 

Mr. Varghese Mathews of Ashish Realtors , says, "Pune being the centre of learning, education and research, the easy availability of software engineers is an advantage. Besides Pune's proximity to Mumbai, from where Pune constantly attracts young aspirants due to its economical viabilities, climatic conditions and cultural resources is an added advantage. 

"The government has chosen Pune city as a prominent centre for development of IT looking at the industrial growth in and around Pune city and the excellent international standard, educational facilities available in Pune. The Centre for Development of Advanced Computing (C - DAC), which is one of the premier institutes in country in the IT, is also located at Pune." 

"Connectivity has played a pivotal role in this makeover," says Mr. Shrikant Nivasarkar, a well-known architect . "Rajiv Gandhi Infotech Park at Hinjewadi is located just 45 minutes drive from Pune airport and is easily accessible. It offers easy access to the commercial capital of the country, Mumbai, via the new Mumbai-Pune Expressway . IT parks at Kharadi and Talawade are too conveniently located to connect with," he adds. 

The geographical nature too seems to favour the city in its quest. Every project needs a special environment that imparts tranquillity to the spirit and stimulus to the mind. The natural layout of the land, gently undulating hills on three sides, is being capitalised on, to provide every facility within the park an unparalleled, peacefilled , colourful and a tranquil ambience. The nickname, 'Queen of Deccan' is apt and being tailored to meet the demands of the IT industry. 

The stupendous and instantaneous success of the Pune Infotech Park and the demands of the IT industry for more international-level infrastructure close to the park, compelled the state to develop multiple facilities within the city. The presence of leading IT companies like Wipro, Infosys, Geometric, bears testimony to the success of this city as an IT hub.


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## Bushroda

*RIL plans to invest Rs 56,000 cr in oil biz*
BS Reporter / Mumbai August 05, 2007 

Reliance Industries, the countrys most valued company, plans to invest up to nearly $14 billion (Rs 56,000 crore) in oil exploration and production business and laying transportation pipelines in next two to three years. 

President (development and production) S C Varma said this today at a meeting organized by the Confederation of Indian Industries. He said the company would investment Rs 12,000 crore for laying 1,400 km pipelines. 

Company observers said Reliance was expected to spend a large chunk of this investment for exploration of new blocks at Mahanadi, Cauveri and Saurashtra. The 1,400 km pipeline will pass through the breadth of the country, connecting eastern part to the western end. 

The company has earmarked an investment of Rs 20,000 crore for exploration at Krishna Godavari. Production of gas from the K-G basin will begin by June 2008. 

The company is especially bullish on city gas networks, where its advantage over competitors would be a captive supply of gas. The company intends to set up gas networks in hundreds of towns across the country. 

The three key pipelines being planned by the Mukesh Ambani-controlled company are from Kakinada in Andhra Pradesh to Bharuch in Gujarat and two coastal pipelines to West Bengal and Chennai. Reliance had already signed contracts worth Rs 18,000 crore with suppliers of pipes, machinery and pumping equipment, for production of gas. 

Gas consumption may rise to 400 million cubic metres a day by 2025 if the economy grows at the projected rate of 8 per cent a year. At present, there is a demand of 170 million cubic metres a day, while supply stands at 93 million cubic metres a day.


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## Bushroda

Marathaman said:


> This is an excellent article. Very insightful.



Call it a deviation from the normal. Good to see atleast some venture on a new path rather than flocking in the same direction.


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## Bushroda

*Kolkata 3rd major IT destination by 2010: Buddhadeb* 

Kolkata, Aug 4 (UNI) West Bengal Chief Minister Buddhadeb Bhattacharjee has asserted that Kolkata is poised to be the third most sought after BPO destination in the world by 2010.

While inaugurating an IT park, 'Millenium City', here yesterday, the chief minister claimed that the state's growth rate in IT industry was much higher than the national average.

''The extremely talented human resource and labour cost advantage provided by Bengal was instrumental in ensuring the unprecedented growth of this industry in the past few years,'' Mr Bhattacharjee elaborated.

He further claimed that about 15,000 youths in the state had availed of employment opportunities in the state's IT sector this year.

''Bengal as a whole is benefitting enormously from this boom in the economy. Durgapur now has more than 1,000, Siliguri more than 200 and Kalyani has more than 100 IT professionals,'' Mr Bhattacharjee said.

He stated that while Indian economy was growing at as high as 8-9 per cent, the new employment opportunities created had decreased by almost four per cent in the last fiscal. 

Therefore, it was imperative to create more jobs so that the benefits of economic growth could be realised in all quarters of the society.

''While Hyderabad and Bangalore had been very successful in laying the foundation of IT way back in the 1980s, Bengal was lagging behind so far. However, the scenario has changed, with IT majors, including IBM, Siemens, Alstom and Lufthansa choosing Kolkata as their favoured destination,'' the chief minister said.

State IT Minister Debesh Das also informed the mediapersons that while the IT market across the world is estimated at USD 100 billion, India has managed to attract investment of a mere USD 0.2 billion. However, India has set a target of attracting investment of upto USD seven billion by 2010, he added.


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## Bushroda

*US to harness business prospects in East India*

Kolkata, Aug 4 : In view of the enourmous business prospects in Eastern India, the US government has decided to create a conducive environment for trade and commerce.

Talking to mediapersons here today, US Minister Counselor for Commercial Affairs Carmine D'Aloisio said east India, especially West Bengal, had a huge potential in Biotechnology, Pharmaceutical, Research & Development and Food Processing sector.

Mr Carmine said the American Consulate would conduct various training programmes for entrepreneurs to realise the loopholes in various sectors while trading and make them aware of the ever growing opportunities.

He also said that the consulate would help American companies to develop in West Bengal for promoting US goods in the Indian market and vice versa in their country.

The Indo-US trade had doubled in the past few years and the ongoing talks between the US President George Bush and Indian Prime Minister Manmohan Singh would help increase its manifolds.

He informed that India's nuclear sector should be included in the global supply chain and cater to the needs of the third world countries. 

''The low import duties in India have allowed several foreign companies to enter the market here,'' he said adding that business environment and policies should be improved to make India a major global player.

Citing examples of countrywide protests on land acquisition for Industrialisation, Mr Jardine said no economy can sustain without industries and hence the farmers have to spare some land for the economic growth of the country.

He also stressed on pro-growth, pro-consumer strategies along with more partnerships between the two countries so as to create decent job opportunities in the country.


----------



## Bushroda

*UK wants more access to Indian market for its financiers*
4 Aug, 2007, 2053 hrs IST, PTI

CHENNAI: The United Kingdom on Saturday asked for more access to the Indian market for its financial institutions, saying it would strengthen the domestic sector. 

British Deputy High Commissioner in South India Mike Connor said India has caps in insurance, banking and software development sectors, which are Britain's strengths. 

He said the UK is predominantly a service economy and this is reflected in the UK investments in India: HSBC, Standard Chartered Bank and a few insurance and software companies. 

"But it is these very sectors that India has blocks or caps on FDI," he said while speaking at a public lecture on "India and the UK: Opportunities for Economic Partnership". 

The bilateral trade between India and the UK was over eight billion pounds, but "there is still a limitation on the access of major British financial organisations to the Indian market," Connor said. 

"In banking there are still several regulatory barriers, although some banking reforms have been adopted. Higher ceilings on foreign shareholding in banks would encourage transfer of expertise, strengthen India's financial sector and benefit consumers with wide access to financial services." 

British law firms are also prevented from practicing in India, he said. 

"British law firms be allowed to be practice in India. They will bring with them expertise, business and major employment opportunities". 

"They do not want to deprive Indian lawyers of work. UK firms probably have a strong tradition of employing Indian people to run their companies here in India right to the highest management levels," Connor said.


----------



## Bushroda

*Egypt wants a bite of Indian BPO mkt*
5 Aug, 2007, 0924 hrs IST, AGENCIES

CAIRO: Egypt has set its sights on grabbing a share of the multi-billion dollar Indian-dominated call centre market and is looking to an unexpected corner for a helping hand, India. 

As it makes its pitch to the world, touting a multilingual workforce over India's English-speakers, a time zone shared with Europe and proximity to the US, Egypt is marketing its edge over India to India itself. 

The government has sent a high-level delegation to India to convince the IT behemoth to sub-outsource its outsourcing to Egypt. 

Several cooperation agreements and memoranda of understanding were signed between the two countries, and Indian industry giants such as Wipro and Satyam have signed agreements to set up support centres in Egypt. 

According to the Yankee Group, a US-based technology research and consulting firm in IT outsourcing, Egypt is 15 to 20 years behind India, which has boomed to dominate 60 per cent of the overall offshore market. 

But the south Asian giant struggles to maintain an adequate supply of skilled workers, and handing some of the pie to Egypt could be mutually beneficial, Egypt says. 

The Information Technology Industry Development Agency (ITIDA) was set up by the government of technocrat Prime Minister Ahmed Nazif in 2004 to guide Egypt's burgeoning IT industry and propel it onto the world stage. 

The government hopes to entice major IT players to set up their call centres, accounting and payroll management, known as business process outsourcing (BPO), in Egypt, pumping resources into an industry it hopes will elevate the national economy. 

"This sector will lead to a renaissance in Egypt," ITIDA CEO Mohamed Omran told media. So will Egypt become the new India? "Absolutely not," said Omran. "We cannot compete with India, we don't want to compete with India, we want to cooperate with India." 

"It's what makes the most sense," said Mai Farouk, an independent IT analyst, currently researching Egypt's outsourcing industry. 

"It would help the industry grow and elevate its standard," said Farouk, but she fears that the lack of a formal analysis of Egypt's IT experience so far could send the country down the wrong path. 

"There has been no thorough analysis of the Egyptian experience," she told media. "In Egypt, if a type of business is successful, everyone jumps into it. It is an individual and business trend here. 

"We need to study and learn from other's mistakes," she said. One problem facing India is the country's poorly planned roads making it difficult for staff to reach some of the outsourcing centres, something Egypt has picked up on. 

Far from the clutter of Cairo, the government has allocated a vast expanse of desert to the highly marketed "Smart Village," a gated compound built with state of the art technological services. 

The lush techno park already houses industry giants Microsoft, Vodafone, Ericsson and Alcatel among others. At the high-tech Vodafone Egypt offices, employees have already tasted some of that renaissance mentioned by Omran. 

Staff have access to their own restaurant, cafe and gym. Sherif Bakir, head of retail at Vodafone Egypt, says the Smart Village has been very enticing for investors as well as new recruits. 

"Young graduates in Egypt are attracted by so many factors in the IT industry: the prospects of a career, the salaries (which are four times that of an average starting salary) and the opportunity to work somewhere like Smart Village with all its benefits," he said. 

"And in Egypt, being a call centre agent is not seen like being a telephone operator. It's not a dead end job, it's seen as a stepping stone to a career in the IT industry." 

But critics say Egypt's outsourcing "boom" won't develop into more than a boutique industry, with the much-touted multilingual and skilled human resource pool amounting to a tiny percentage of Egypt's 76 million population. 

A high level of illiteracy, dire poverty and a very large rural population mean that most won't touch the benefits of a booming IT industry. 

Omran, of ITIDA, says the figures speak for themselves. "A tiny percentage of a huge population is a lot of people," he said. "We're talking millions. And IT is like blood, it gets into the veins of all industries and sectors." 

He is eager to showcase his agency's pride and joy: Xceed, one of the largest contact centres in North Africa and the IT arm of the government-owned Telecom Egypt. 

At the 16,000-square-metre (170,000-square-foot) space equipped with "cutting edge fault tolerant IT infrastructure," 1,200 agents offer customer and technical support to General Motors, Microsoft and Oracle among others, in eight languages including English, French, German and Hebrew. 

According to Xceed, in 2005, nearly 70 percent of total outsourced Egyptian workstations were supporting local customers. "However, by 2010 this will be nearly completely reversed with 65 percent of Egyptian outsourced workstations servicing foreign end-users." 

The ministry of communication and information technology is trying to attract foreign companies with a special focus on call centres, by offering five to 10 year tax exemptions, branding Egypt as a safe oasis in a troubled region. 

But there is enormous political uncertainty in the country as to who will succeed 79-year-old President Hosni Mubarak, who has ruled Egypt for over a quarter of a century.


----------



## Bushroda

*Mumbai or Bust -- In the Lap of Luxury*
*Airline Now Offers High-End Service Between the U.S. and India*

By BOB JAMIESON
ABC News
Aug. 5, 2007 

A new era in air travel between the United States and India began this weekend with the inauguration Saturday of Jet Airways service between Newark Airport just outside New York City and Mumbai. 

Jet Airways? Is that a cheap seat carrier? 

Few are familiar with the home-grown Indian airline, but its founder Naresh Goyal says it won't take long for travelers to become familiar with what he believes will be an airline with luxury service that rivals trend-setters Singapore, Cathay, British Airways and Emirates. 

"My goal," said Goyal at a recent lunch in New York, "is to be better than those airlines in terms of service, and we are already remaking the image of Indian air carriers." 

Until recent deregulation, Air India was the only carrier permitted to offer international travel from Bombay, Mumbai and other gateways in India. Jet Airways, founded 14 years ago as a domestic carrier, has become the first to fly to the United States as part of an aggressive expansion plan that Goyal believes will be driven by the booming Indian economy. 

"There are about 30 million people in India who are very rich," says Goyal, "and another 300 million middle class."

With India's increasing connections to the global market, Goyal says there is great demand for premium air travel and quality service like that branded on board Singapore, Cathay and British Airways. 

"Because of the stunning growth of the Indian economy," says a Jet Airways spokeswoman, "particularly the emergency of Indian companies in the global market, there are more and more travelers who want premium service" which is not offered by other Indian carriers. 

India's economy has already attracted Continental to begin flights between Newark and Mumbai, but Jet Airways has a strategy to capture travel to and from India's vast country. 

Jet Airways now flies between 40 cities in India and has quickly added routes to London, Sri Lanka, Nepal and Southeast Asia. It has established a hub at Brussels' airport, underused since the demise of that country's state carrier.

Jet Airways will fly from Newark to Mumbai through Brussels and soon from Toronto, and then from cities other than New York in the United States, coordinating schedules so that flights from many cities in India can connect to various European and North American destinations. 

It will fly new Boeing 777-300 ER aircraft with newly designed three-class cabins and service that emphasizes India's roots but with a heavy helping of modern grace. 

But at the New York lunch, Goyal emphasized Jet Airways' high level of service and plush, roomy seats in first and business class.

"We aim to be one of the top five airlines in the world in very short order," he said. 

In first class, Jet Airways offers a mini suite with sliding double doors, an 83-inch-long lie-flat bed, a 23-inch video monitor to show films and videos from the extensive entertainment system, and a "buddy" seat that permits two travelers to dine together. 

In business class, Goyal says there are wide, lie-flat beds and high-level food and wine. 

In all three classes of service, including coach, toilets in the lavatories will include a bidet function, a European touch that is now beginning to appear on some Asian airlines. 

His spokeswoman says service aboard the flights will dramatically change American perceptions of Indian air carriers.

"There is no other word but graciousness," she says, "it offers a level of service that will destroy many stereotypes about India and its airlines." 

It will also offer competition and the prospect of lower premium class fares, which now range from upwards of $4,000 to $11,000 depending on class of travel. 

Jet Airways is betting it has the right formula -- in fact, betting $3.7 billion on its international fleet expansion, including orders for 10 of the new Boeing 787 Dreamliners.


----------



## Bushroda

*Reliance to invest $14 bn over 2-3 years*
5 Aug, 2007, 1616 hrs IST, REUTERS

MUMBAI: Reliance Industries Ltd, plans to invest up to Rs 60 billion ($14 billion) in oil exploration and production and in laying transport pipelines, a national paper reported on Sunday. 

Of this amount, the company would spend about Rs 120 billion in laying 1,400 km of pipelines over two to three years, the paper quoted S C Varma, President, development and production of Reliance Industries, as saying. 

India's gas consumption may rise to 400 million cubic metres a day by 2025 from 170 million cubic metres now, if the economy grows at a projected rate of 8 percent a year, the paper said. 

Reliance, which discovered India's largest gas field in 2002, in July made a new discovery in a deepwater block in the Cauvery basin, off India's east coast. 

The company has said it is spending about $5.2 billion to develop and $3.5 billion to maintain production from deep-sea gas fields off the east coast. A global shortage of rigs was affecting its exploration and development plans, Reliance Industries has said.


----------



## Bushroda

*Working together*
*India should not regard Africa as simply a source of natural resources. Instead, it needs to invest in the region's human capital and share Indian know-how.*

Alex Vines and Gareth Price
Guardian, UK
August 5, 2007 

China's increasing influence in Africa has attracted great attention in recent years. But Asia's other rising power, India, is also becoming more active on this front, as its economic links are moving beyond its traditional partners in the British Commonwealth. Indeed, India's non-oil trade with West Africa currently stands at more than $3bn and is rising fast, accounting for 1.2% of the country's total foreign trade.

India's economic activity in Africa goes far beyond its ever popular Bollywood movies. Indian investment in Côte d'Ivoire is expected to grow to $1bn by 2011, which represents 10% of total Indian foreign investment in the last decade. India's state-run Oil and Natural Gas Corporation (ONGC Videsh) produces Sudanese oil, and over the next two years Indian diplomatic missions will open in Mali, Gabon, Niger, and Burkina Faso. Until 2003, the Indian Foreign Ministry had a single Africa division; it now has three: West and central Africa, East and Southern Africa, and west Asia and North Africa.

A study by the Federation of Indian Chambers of Commerce and Industry identified (pdf) five main sectors that can act as "engines of growth" to boost Indo-Africa trade: pharmaceuticals and the health sector, information technology, water management, food processing, and education. 

Nigeria is India's largest trading partner in Africa. Bilateral annual trade turnover exceeds $3bn, with oil constituting more than 96% of Indian imports from Nigeria. India maintains a three-pronged strategy: term contract for crude purchase, participation in the upstream sector, and refineries.

This puts India in direct competition with the west and other Asian countries to secure West African resources. But India's quest for energy in West Africa is not a core component of the government's energy policy; rather, it is part of its effort to diversify energy sources by offering infrastructure investments, in addition to cash bonus payments when contracts are signed.

Of the 45 blocks 17 are being reserved for unknown companies that will be given a first right of refusal on acreage in exchange for promises to invest heavily in projects not directly related to oil production, such as new power plants and refineries. These negotiations have been ongoing, and India's ONGC, in alliance with Mittal Energy, part of the Mittal companies run by Indian billionaire Lakshmi Mittal, is tipped to get the right of first refusal for a number of blocks.

During a Nigerian mini-bid round in 2006, ONGC-Mittal was offered the right of first refusal for three blocks. ONGC-Mittal Energy is keen to secure blocks with proven reserves, but also is less concerned about the fine detail of the infrastructure packages than their Asian competitors. The creation of ONGC-Mittal in late 2005 seems to have been intended to cut through bureaucratic processes, learn from the private sector, and strengthen bids as an infrastructure provider.

In 2005, the Indian Cabinet's Committee on Economic Affairs prevented, on due diligence grounds and at the last moment, the overseas arm of ONGC Videsh from entering into a $2bn deal for a stake in a Nigerian oil block. But the 2007 licensing round appears to have been rushed through to raise cash during the dying days of the Obasanjo administration, and it would serve India's government well to watch this process closely, too.

Other parts of the Mittal dynasty have also raised eyebrows in West Africa. In late 2005, Mittal Steel, the world's largest steel company, signed a $900 million deal with Liberia's transitional government to mine iron ore, which many claim allowed Mittal to opt out of human rights and environmental law. The elected government of President Ellen Johnson-Sirleaf in 2006 reviewed the deal, and the Liberian senate is currently scrutinising it.

India's business engagement in Africa attracts mixed opinion. Mahatma Gandhi once said that "commerce between India and Africa will be of ideas and services, not of manufactured goods against raw materials after the fashion of western exploiters." However, according to Zambian opposition MP Guy Scott, "People are saying, 'The Whites were bad, the Indians were worse, but the Chinese are worst of all.'" 

India should not regard Africa as simply a source of natural resources. Instead, it needs to invest in the region's human capital and share Indian know-how. Many Indian goods have much greater suitability for African than western markets. Sales of Tata cars, for instance, are booming in many African countries. 

But shared know-how should move beyond economic links. India's democracy in a post-colonial setting has relevant lessons for Africa. India also offers important experience in agricultural expansion, clean water management, and confronting the growing threat of climate change. 

Whatever role India ultimately plays in Africa, perhaps its most important contribution could be to introduce competition. India's government needs to carefully watch how its companies and others rise to this challenge.


----------



## Bushroda

*Tatas to manufacture aircraft components for export market* 
Written by Arjun 
Sunday, 05 August 2007 

MUMBAI: Tata Group seems to be planning a foray into manufacture of aircraft components for exports, according to reports published by the Economic Times.

The group is is understood to be acquiring land at the Nagpur Special Economic Zone (SEZ) for setting up the component manufacturing plant. The Maharashtra Airport Development Company is in charge of putting up the Nagpur SEZ project. R C Sinha, Vice Chairman and Managing Director of Maharashtra Airport Development Company, said that a Tata company is taking up the land for aircraft component business. He said that the infrastructure work on the Nagpur SEZ was progressing satisactorily and major work would be completed by December next year.

Meanwhile, Boeing is setting up a Maintenance, Repair and Overhaul (MRO) facility at the Nagpur SEZ.

Praveen Kadle, Executive Director (Finance) - Tata Motors, has told PTI that the company has plans for the aerospace sector though nothing had been finalised as yet.

Tata Airlines, India's first airline, started in 1932 by the Tata Group was taken over by the government and turned into Air India.


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## Bushroda

*India to outdo US, Japan in economic growth*
5 Aug, 2007, 1130 hrs IST, PTI

NEW DELHI: Emerging economies, including India, will overtake the developed countries in economic growth by 2050, with the popularity of India and China as investment destination is rising while the attractiveness Europe and North America is slipping, says a study. 

"The seven new global powers by 2050 will comprise the so-called BRIC economies (Brazil, Russia, India and China) together with Indonesia, Mexico and Turkey," says the Ernst and Young European Attractiveness Survey 2007. 

These seven emerging countries would overtake the economies of the G7 countries, Britain, Canada, France, Germany, Italy, Japan, United States, in terms of gross domestic product (GDP) but whether India can develop its infrastructure at pace with that of global investment remains to be seen, the survey added. 

The developing economies will outdo the G7 if it manages to mend the loopholes regarding transparency, fairness and infrastructure development. India's popularity is rising as 26 per cent respondents said the country is amongst their top three preferences in 2007 whereas the figure was just 11 per cent in 2004. 

The survey highlights that with intensifying competitive cost pressure, companies across the world would resort to offshore services and manufacturing to lower cost and higher growth economies such as China and India. 

One company in five intends to relocate all or part of its European activities outside the region and for this they look forward to the Asian countries. "China attracts the interest of 50 per cent of respondents currently undergoing a relocation search, while India is considered by 30 per cent of voters," the survey said. 

Europe's attractiveness for foreign investors declined significantly in 2007, though it has managed to maintain its lead as the most attractive global investment region, the survey says. 

However, the survey cautions that the mature economic markets in Europe are losing their hold on investors as the emerging economies of Asia gain further momentum. This change in foreign investor interest towards Asian countries is because of high skilled labour power cost effectiveness and good ground for Research and Development (R&D) activities. 

Asia has shown a significant gain and narrowed the gap with Europe and in the list of preferred regions China has moved up to the second position this year, while India has attained fifth position in the league. 

Western Europe tops the chart with 55 per cent respondents naming it as one of their most preferred business locations followed by China which received the vote of 48 per cent respondents, while India managed to hold on to the fifth position with 26 per cent decision makers voting in its favour, the survey said. 

Central and Eastern Europe grabbed the third position (39 per cent vote) whilst the United States and Canada shared the fourth slot with 38 per cent respondents voting in their favour for the preferred location for investments. 

The global business world has become increasingly multipolar, the survey said adding that "the attractiveness of the traditional top ranked regions of Europe and North America is giving way to a rise in popularity of India and China".


----------



## Bushroda

*Infosys Tech to invest Rs 30 cr on expansion*
5 Aug, 2007, 1127 hrs IST, PTI

CHANDIGARH: Software solutions developer Infosys Technologies Limited has said it will invest Rs 30 crore on expansion of its Chandigarh operations during the current fiscal. 

"We will invest Rs 30 crore on infrastructure development of our operations in Chandigarh during this year," Infosys Technologies Limited's Development Centre Head Sameer Goel said here. 

The company, which is India's second biggest software exporter, has so far invested Rs 160 crore on its facility in Chandigarh. 

With the new investment, it proposes to set up blocks for software developers at its IT centre in Rajiv Gandhi Chandigarh Technology Park. The 30-acre Software Development Centre of Infosys employs about 2,000 people in Chandigarh, which is extendable to 3,000. 

The company has been exporting softwares to countries like the United States, Europe and Middle East. It has also been awarded the STPI software export award for earning export revenue of Rs 17,423 lakh from the Union Territory.


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## Bushroda

*Smart City project will boost economic growth *
K. Venkiteswaran 

*Kerala to become choice destination for IT companies, says study*
--------------------------------------------------------------------------------
*State offers talent pool of engineering graduates*
*50% rise in software exports from State*
--------------------------------------------------------------------------------

KOCHI: The high cost of operation and congestion in tier-I cities have made potential investors take a second look at green field areas like Kochi. The decision of the Dubai-based Tecom Investment FZ-LLC to set up Smart City here has paved the way for others to fall in line. Kerala also offers an excellent talent pool of science and engineering graduates. 

*The high and low* 

The State has the highest density of science and technology personnel in the country, with about 25,000 engineering graduates a year from eight universities in the State. The lowest employee attrition rate of less than five per cent, centres of excellence such as the Indian Institute of Management (Kozhikode), Indian Institute of Information Technology & Management  Kerala, etc., are the other reasons for IT companies to set up shop here, it is pointed out. 

A KSIDC publication exudes optimism that Kerala would soon become a choice destination for IT companies. Software exports from Kerala crossed Rs.700 crore in 2006-07, up by 50 per cent compared to 33 per cent at the national level. With infrastructure developers such as L&T, the Leela Group, Sobha Developers, Cochin International Airport Ltd. and the Muthoot Group launching ventures in the State, Kerala is poised for big ticket development, say experts. 

Smart City is a joint outcome of the State Government and the Dubai-based Tecom Investments, builders of industrial infrastructure. The project envisages building an 8.8 million sq. ft. facility here. It has given an impetus to IT majors to set shop here. Infosys Technologies, the major in Indian IT services industry, has broken ground to set up its development centre on a 50-acre campus at Technopark in Thiruvananthapuram. Wipro has almost completed the first phase of its one-million sq. ft. development centre at Infopark in Kochi. NeST, Keralas own multinational, has started work on a one-million sq. ft. facility at Kinfra Park in Kochi for its hardware manufacturing business. Cognizant Technologies, one of the fastest growing Indian IT majors, has opened its development centre in Kochi. 

Smart City, one of the biggest FDIs in the IT infrastructure sector in the country with a total investment of Rs. 1,700 crore, will come up on a 246-acre plot. It will have at least 6.21 million sq. ft. dedicated to IT-related units. 

*Similar cases* 

The Smart City is expected to do what the TIDEL Park did for the IT industry in Tamil Nadu and HitTec City in Andhra Pradesh. The 1.3-million sq. ft. TIDEL, Indias second largest IT facility, was set up in 2000. IT exports from the State rose dramatically since then: from Rs. 1,246 crore in 1999, it more than doubled to Rs. 3,116 crore in 2001 and then to Rs. 14,115 crore in 2005-06. Hi-Tec City, a one-million sq. ft. facility, was launched in 1998. Today, Hyderabad has the presence of all the IT majors across the globe. Though late to come up, Smart City is a behemoth in size compared to the other two. With Technocity, another project on IT infrastructure coming up in Thiruvananthapuram, Kerala, is certain to become an investment destination for IT companies, says the KSIDC publication.


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## Bushroda

*New ICER laboratory to train young scientists *
Special Correspondent 

CHENNAI: An International Centre for Excellence in Research laboratory (ICER) was inaugurated on the premises of the Tuberculosis Research Centre here on Saturday. Set up in collaboration with the National Institutes of Health, U.S., the Centre will foster research in immunology and infectious diseases and focus on training young professionals in frontier areas of bio-technology.

Inaugurating the centre, Kathryn Zoon, director, Division of Intramural Research, National Institute of Allergy and Infectious Diseases (NIAID), National Institutes of Health (NIH), U.S., said the new labs were a demonstration of the firm commitment of the NIH towards building sustainable infrastructure for research in infectious diseases and immunology. Young scientists from both nations would be trained and it was hoped that the work carried on in these labs would lead to new vaccines and other therapeutic measures that would be of benefit to the public.

N.K.Ganguly, director general, Indian Council for Medical Research, said the collaboration between TRC and NIAID began several years ago and has since matured well. ICER nurtures research in basic sciences and in developing new vaccine strategies. The lab would work primarily in areas such as tuberculosis and co-infections, including HIV/AIDS. The aim would be to create a large pool of scientists to handle these areas, he said. Altaf Lal, health attaché and U.S. Department of Health and Human Services Representative for South Asia, said the collaborationss between India and the U.S. in biomedical research has produced significant results, leading to a better quality of life. The U.S. has bilateral agreements to work in areas such as vaccine development, maternal and child health, reproductive health and environmental and occupational health, he said. The model has been so successful that many other countries have followed suit, he said. P.R.Narayanan, director, TRC, and Thomas Nutman of the Laboratory of Parasitic Diseases, NIAID, spoke.


----------



## Bushroda

*India on African safari, hunting oil*
*Mahatma Gandhi once said that "commerce between India and Africa will be of ideas and services, not of manufactured goods against raw materials after the fashion of western exploiters." However, according to Zambian opposition MP Guy Scott, "People are saying, 'The Whites were bad, the Indians were worse, but the Chinese are worst of all.' "* 

By Alex Vines and Gareth Price 

China's increasing influence in Africa has attracted great attention in recent years. But Asia's other rising power, India, is also becoming more active on this front, as its economic links are moving beyond its traditional partners in the British Commonwealth. Indeed, India's non-oil trade with West Africa currently stands at more than $3 billion and is rising fast, accounting for 1.2% of the country's total foreign trade. 

India's economic activity in Africa goes far beyond its ever popular Bollywood movies. Indian investment in Côte d'Ivoire is expected to grow to $1 billion by 2011, which represents 10% of total Indian foreign investment in the last decade. India's state-run Oil and Natural Gas Corporation (ONGC Videsh) produces Sudanese oil, and over the next two years Indian diplomatic missions will open in Mali, Gabon, Niger, and Burkina Faso. Until 2003, the Indian Foreign Ministry had a single Africa division; it now has three: West and Central Africa, East and Southern Africa, and West Asia and North Africa.

A study by the Federation of Indian Chambers of Commerce and Industry identified five main sectors that can act as "engines of growth" to boost Indo-Africa trade: pharmaceuticals and the health sector, information technology, water management, food processing, and education.

Nigeria is India's largest trading partner in Africa. Bilateral annual trade turnover exceeds $3 billion, with oil constituting more than 96% of Indian imports from Nigeria. India maintains a three-pronged strategy: term contract for crude purchase, participation in the upstream sector, and refineries.

This puts India in direct competition with the West and other Asian countries to secure West African resources. But India's quest for energy in West Africa is not a core component of the government's energy policy; rather, it is part of its effort to diversify energy sources by offering infrastructure investments, in addition to cash bonus payments when contracts are signed.

Seventeen of the 45 blocks are being reserved for unknown companies that will be given a first right of refusal on acreage in exchange for promises to invest heavily in projects not directly related to oil production, such as new power plants and refineries. These negotiations have been ongoing, and India's ONGC, in alliance with Mittal Energy, part of the Mittal companies run by Indian billionaire Lakshmi Mittal, is tipped to get the right of first refusal for a number of blocks.

During a Nigerian mini-bid round in 2006, ONGC-Mittal was offered the right of first refusal for three blocks. ONGC-Mittal Energy is keen to secure blocks with proven reserves, but also is less concerned about the fine detail of the infrastructure packages than their Asian competitors. The creation of ONGC-Mittal in late 2005 seems to have been intended to cut through bureaucratic processes, learn from the private sector, and strengthen bids as an infrastructure provider.

In 2005, the Indian Cabinet's Committee on Economic Affairs prevented, on due diligence grounds and at the last moment, the overseas arm of ONGC Videsh from entering into a $2 billion deal for a stake in a Nigerian oil block. But the 2007 licensing round appears to have been rushed through to raise cash during the dying days of the Obasanjo administration, and it would serve India's government well to watch this process closely, too.

Other parts of the Mittal dynasty have also raised eyebrows in West Africa. In late 2005, Mittal Steel, the world's largest steel company, signed a $900 million deal with Liberia's Transitional Government to mine iron ore, which many claim allowed Mittal to opt out of human rights and environmental law. The elected government of President Ellen Johnson-Sirleaf in 2006 reviewed the deal, and the Liberian Senate is currently scrutinizing it.

India's business engagement in Africa attracts mixed opinion. Mahatma Gandhi once said that "commerce between India and Africa will be of ideas and services, not of manufactured goods against raw materials after the fashion of western exploiters." However, according to Zambian opposition MP Guy Scott, "People are saying, 'The Whites were bad, the Indians were worse, but the Chinese are worst of all.'" 

India should not regard Africa as simply a source of natural resources. Instead, it needs to invest in the region's human capital and share Indian know-how. Many Indian goods have much greater suitability for African than Western markets. Sales of Tata cars, for instance, are booming in many African countries. 

But shared know-how should move beyond economic links. India's democracy in a post-colonial setting has relevant lessons for Africa. India also offers important experience in agricultural expansion, clean water management, and confronting the growing threat of climate change.

Whatever role India ultimately plays in Africa, perhaps its most important contribution could be to introduce competition. India's government needs to carefully watch how its companies and others rise to this challenge. 

_*(Alex Vines and Gareth Price are, respectively, head of the Africa and Asia programs at Chatham House, the Royal Institute of International Affairs, in London.)*_


----------



## Bushroda

*Racing ahead*
4 Aug, 2007, 1437 hrs IST, 

MUMBAI: Mumbais population is multiplying every day and this has led to the creation of 'Navi Mumbai' to support the burgeoning numbers; Panvel forms a small part of this twin city. From being a quiet rural sylvan retreat decades ago to now becoming one of the strongly emerging towns in Mumbai, Panvel has witnessed a remarkable transformation. 

Originally known by a single name, Panvel today has branched out into Panvel (old), Panvel (new) and Khandeshwar with the former coming under the jurisdiction of Panvel Municipal Council and the latter two under CIDCO. 

One can see a clear dichotomy, as Old Panvel even today remains quite unplanned as against New Panvel and Khandeshwar which are well planned and maintained by CIDCO. Nevertheless , Old Panvel still enjoys unperturbed loyalty of people who have been staying here for ages. New Panvel and Khandeshwar have more influx of outsiders as they are newly developed areas. All three, despite their individual differences, are racing ahead on the growth charts. 

Reveals Ms. Vidya Pradhan, a teacher and an Old Panvel resident for last 22 years, "When I came to Panvel, it was very sparsely populated, almost a jungle with less civilization and lot of fields around. The scenario has completely changed. There is more construction happening, more buildings, more shops, showrooms and theatres. The service class is emerging and money is pouring in. Who would imagine a Nike or Adidas coming to Panvel, but today we have it all! 

Panvel has become a rewarding destination for builders too. Says an enthusiastic Vilas Kothari, proprietor of Neel Group, "When I entered the construction line in 1992-93, there were only CIDCO type constructions in New Panvel which were either low quality or had problems with actual possession. There was need for private construction by industrial areas like Taloja, Nagothane, JNPT and ONGC. Being born and brought up here I had first-hand knowledge about the situation which helped in creating a product catering to actual customer demands." 

"Also after Vashi, Nerul, CBD and Kharghar, people were thinking what would be the next big thing? The answer was Panvel. To rates which once ranged from Rs. 500 to Rs. 700 ten years back, Panvel in the last year has seen a tremendous gallop in property prices which now range between Rs. 2000 to Rs. 2500 for Old Panvel and Rs. 2500 to Rs 3000 for New Panvel." 

With upcoming premium projects like Neel Splendour in Khandeshwar and Neel Park in Old Panvel, Kothari remains bullish on Panvels potential. 

Property consultants too are happy with the way the city is growing. Explains Mr Sameer Kelkar of Prashanti Consultants, "In the last year, prices have seen a three-fold increase. The reason is a lot of related development. The Reliance SEZ, Panvel Railway Terminus and the much-awaited International Airport have led to the property price escalation." 

"Panvel has become a central place. Both Mumbai and Pune enjoy flawless connectivity with Panvel. The Konkan Railway connects South India to Panvel. So a lot of South Indians prefer living in Panvel. Panvel also serves as a major junction for many outstation trains. Basic infrastructure like educational institutions, hospitals and markets is well in place. And when compared to Vashi or Nerul, Panvel still seems quite affordable to the buying class. So the demand is soaring," he adds. 

Tarun Raina, a resident, shifted to New Panvel five years ago and is quite happy with his decision. He shares, "After Dad's retirement we decided to shift from Khopoli. Panvel was near and also rapidly developing. We chose New Panvel because we found it more planned as against Old Panvel, which looked saturated. Panvel has good business potential and we wanted to start a business, so we finally settled with a house in New Panvel which we got for a price three times cheaper than today. And ever since, Panvel has been flourishing both in social development and on the business front." 

Mr. Rajesh Prajapati of Prajapati Builders shares his experience. He says, "Earlier , mostly outsiders preferred buying here for investment reasons. The user -investor ratio was 40:60. Initially financial parameters were of paramount importance and the in-house buyer would not readily spend on classy apartments. Today the ratio has reversed, income levels have risen and so Panvel from a destination of economy has turned into a destination of choice, resulting in better returns." 

He makes a striking revelation saying that Old Panvel should be renamed as the word 'Old ' conveys a passive meaning and this affects the demand. "To sell a product today, one needs to be more careful with the packaging. The moment one says Old Panvel, the buyer feels resentful. The feel good factor is missing here which restrains the buyer at times from buying a place. And so it's self explanatory why New Panvel is doing better than its counterpart." 

The areas around the railway station and 'Takka' area are gaining demand due to proximity to the station. Also many builders are coming up with new projects. The concern today is that fresh land is no more available in Panvel. Builders are now acquiring old plots from owners and converting them into apartments as the demand is increasing. 

While most are piggybacking on soaring property prices, there are a few who choose to differ. Say Mr. Ramesh Majethia of Milkat Estate Consultants, "The last time Panvel saw a similar price hike was in 1995 when private construction was newly entering the market. Today prices have hiked again but the rise in interest rates has lead to reversal in prices. Prices have already fallen by Rs.200 to 300 in the last two months now standing at Rs.1800 to Rs.2200. While on the commercial side, prices are high at Rs.10,000 to Rs. 12,000 on the main street and Rs. 3,000 to Rs. 4,000 for shops in bylanes." 

And Panvel is up for more. The builder fraternity collectively highlighted the upcoming Township Projects around the periphery of Panvel within a radius of ten kilometers. Builders like Akruti, Hiranandani, DLF will jointly handle these projects, which would be spread over more than 100 acres. Kalpataru Builders is already building a miniature version of a township project at Old Panvel, the first of its kind. 

Speaking on future projects, Mr Prakash Patil, administrative officer, Panvel Municipal Council (PMC),revealed, "We are developing a new 'Waste Plant' along with CIDCO at a village called 'Chad ' near Taloja. This will be the dumping ground for garbage wherein the garbage will be segregated and put to use accordingly." 

Development brings in many side effects . One hopes that in the pursuit of a technically prudent environment, the quality of life is not compromised.


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## Bushroda

*Monsoon mania draws Arabs*
5 Aug, 2007, 0457 hrs IST,Ranjeni A Singh, TNN

NEW DELHI: Roll out the red carpet even if its raining hard. And dont forget to put away the umbrellas as more Arabs are coming to enjoy the Indian monsoon. In fact, their fascination for rains has resulted in tourist arrivals from the Middle East region clocking 18 to 20% growth every year. In 2006, the growth was 18%, while this year looks positive and set to break this figure. 

Hordes of tourists come from Middle East countries come to witness the drenching monsoon rain in India, a phenomenon never seen in desert climates. The UAE has consistently been Indias largest market from the region, with over 50,000 arrivals last year. Iran contributed over 20,000 visitors, followed by Oman and Saudi Arabia with just over 18,000 each. Other strong markets were Turkey, Bahrain and Kuwait. And we are not talking about the expat Indians but native Arabs. 

The Middle East is very important to Indias tourism industry and according to the latest statistics, tourism flow from the region has been increasing every year, says K L Das, India Tourism Office regional director in Dubai. 

So whats attracting the tourists to India? Actually, the holiday season in Middle East coincides with the monsoon hitting Indian shores. 

Moreover, India is the closest rain destination and its easier to come here as the Wests obsession with security makes it difficult for these tourists to go there, says Radhika Shastry, MD, Group RCI, a timeshare vacation company. Besides cultural similarity and food act as motivators, says Das, adding the time-spend by Arabs is also the longest compared to other inbound tourists. 

Taking advantage of the Arab penchant for the monsoon rains and Ayurvedic treatment, India aggressively marketed itself as a monsoon destination in the Arab Travel Mart held in May this year. Many Indian states took part in the four-day event, including Kerala, J&K, Goa, Uttarakhand, Assam, UP and Madhya Pradesh. 

In fact, India expects to receive more than 20% tourists from the UAE this yearLast year, 149,568 people from Arab countries visited India  an increase of 18% from 2005, say tourism ministry officials, adding we had about 55,000 visitors from the UAE in 2006. The arrivals from other countries in the region also look optimistic. 

Seeing the response, the Indian tourist industry has created tours and activities aimed at rain-starved Arab visitors. 

Over the years, the number of international tourists visiting India during the monsoons has increased almost two-fold, says Sachin Ramphal, senior manager, Thomas Cook. Says Arup Sen, executive director, Cox & Kings: West Asia doesnt have snow-capped mountains, lush valleys, sparkling streams of rivers and the wonder that is monsoon. 

Many of them see this for the first time in their lives when visiting India. Interestingly, the average spend of a West Asian tourist is twice as much of a South-East Asian, at $ 150 per person per day in the high-end category. Tourists from West Asia travel in families and that too large extended families. 

They comprise rich customers as there is hardly any concept of middle class in West Asia. They prefer staying in luxury hotels, says Sen. 

Seeing the lucrative market, even the states are getting aggressive. Besides Kerala and Goa, Madhya Pradesh, Sikkim and Meghalaya are also drawing up plans to woo the Arabs. UP has already picked up the Chasing the Monsoons campaign to woo tourists from the Arab countries.


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## Bushroda

*Indian abroad tourists to double.*
Saturday, 4th August 2007
Olivier Hofmann / Euromonitor International, Hong Kong

By 2010 the number of tourists travelling from India is expected to more than double, therefore tour operators are preparing to take advantage of this boom in the Indian travel market.

The total number of outbound travellers is set to reach 16.3 million in 2011 alone. 

This dramatic rise in the number Indians travelling abroad, 132% over 2006 to 2011 according to Euromonitor International's latest research, is being driven by rising disposable incomes, more affordable holiday options and the growth of low cost carriers, enabling more Indians to travel abroad. 

*Budget airlines drive outbound travel*

The growing strength of low cost carriers in India is one of the key factors boosting the Indian outbound travel market. Clement Wong, Travel and Tourism Account Manager comments, Indian tourists now have more choice and options for travel outside the country, thanks to the continued growth in low cost carriers. At times, it is even for cheaper to travel to other countries in South East Asia than to other regions within India.

Air Deccan, the first low cost carrier to operate in India, is currently the most prominent in the market. However, SpiceJet and Go Air have also joined the scene and the number of players looks set to rise.

With departures by air accounting for more than 98% of all departures from India, the air travel market is clearly on a high. In 2006, sales for low cost airlines grew by 115% in India, storming ahead of the industry average growth of 19.5%. 

Singapore is currently benefiting from the bulk of Indian outbound tourism; however, as foreign travel becomes more affordable many Indian holidaymakers will set their sights further afield. 

*Countries fight for the Indian traveller*

The US is predicted to be the most preferred destination for Indian travellers by 2011, according to Euromonitor International, receiving 10.2% of outbound tourists from India. The strengthening of business ties and a large number of Indians residing in the US will be the main drivers behind this trend. 

The growing number of Indian tourists is now being more widely recognised and countries across the globe are increasingly trying to attract Indian tourists. A number of countries, including Ireland, the Netherlands, Spain, Poland and South Korea, have already opened tourist offices in India to directly target Indians who want to holiday abroad. Euromonitor's Clement Wong comments, Indian tourists are big spenders and as such are a boost to the tourism revenues of any country. 

Brand new forecasts from Euromonitor International show that outgoing tourism expenditure from India will grow by over 25.7% between 2006 and 2011 to reach a value of US$21 billion by 2011.


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## Bushroda

*Aperto Named #1 WiMAX Company in India by Voice&Data Magazine* 
Written by EditorsChoice 
Friday, 03 August 2007 

Aperto® Networks, builder of the worlds most advanced WiMAX solutions for fixed, portable, and mobile applications, today announced that it has been named as the Top WiMAX Company in India by Voice&Data magazine. The honor was awarded at the 8th Annual Voice & Data 100 Awards on July 18 in New Delhi.

New Delhi, India (Vocus) July 19, 2007 - Aperto® Networks, builder of the worlds most advanced WiMAX solutions for fixed, portable, and mobile applications, today announced that it has been named as the Top WiMAX Company in India by Voice&Data magazine. The honor was awarded at the 8th Annual Voice & Data 100 Awards on July 18 in New Delhi.

This is a tremendous honor for Aperto and our WiMAX Forum® Certified PacketMAXÔ solution, said Manish Gupta, Vice President of Marketing & Alliances for Aperto Networks and WiMAX Forum Board Member. It recognizes how broadly our award-winning technology is being adopted in India, one of the top WiMAX markets in the world. Aperto takes this market very seriously and has successfully deployed its solutions with several large service providers across India. Earlier this year we expanded operations in India, opened a new office in Bangalore, and set up two subsidiaries employing teams in engineering, marketing, product management, sales, and sales support.

V&D 100 is the most comprehensive survey on Indian communications industry. It covers both equipment as well as services industry. It is the most trusted and widely used survey for those seeking statistics on Indian communications. It is also the most comprehensive, as it covers a wide range of segments including A/V conferencing, fixed phones, mobile phones, GSM handsets, broadband, fixed wireless phones, CDMA handsets, modem, network integration, network management services, structured cabling, network storage, router, switch, WLAN, T&M, telecom cables, transmission, telecom software, telecom turnkey, voice solutions, fixed services, NLD, ISP, cellular, VSAT, wireless infrastructure, ILD, radio trunking, independent infrastructure provider, enterprise equipment, telecom services, VAS, and telecom equipment. 

"WiMAX could do for Internet connectivity what mobile phones did for voice, though WiMAX is currently less about mobility than about rapid deployment and penetration," said Prasanto K. Roy, Chief Editor at CyberMedia Publications. 

"With the growing demand for broadband connectivity from urban homes and small/midsize businesses, WiMAX deployment is beginning to take off in India. The country could become one of the largest WiMAX markets in the world and we expect more investments in the sector.

The Aperto family of products delivers the critical elements required to extend wireless broadband services to a wide range of usersranging from large enterprises and public-sector organizations to multi-tenet buildings and residencesusing a single, standards-based platform. The companys flagship product, the PacketMAX 5000 base station, is also the only carrier-grade base station that can support and operate both the IEEE802.16-2004 and IEEE802.16-2005 WiMAX standards simultaneously.

*About Aperto Networks: *

Aperto Networks helps service providers worldwide profitably deliver affordable wireless voice and broadband services by building the worlds most advanced fixed and mobile WiMAX Forum Certified base stations and subscriber units. Aperto fundamentally changes the economics of delivering voice and broadband services through IP-rich, point-to-point and point-to-multipoint networks, allowing carriers to offer a wider variety of services to more customers using less equipment. Its carrier-class WiMAX technology offers industry-leading subscriber density, quality of service, ease of use, and reliability. Aperto is a founding board member of the WiMAX Forum, as well as a founder and lead contributor to IEEE 802.16 and the ETSI-BRAN standards. Serving more than 400 customers in 90 countries, Aperto Networks is based in Milpitas, California. For more information, visit us at www.apertonet.com.

*About CyberMedia:*

CyberMedia is South Asia's first and largest specialty media house, with thirteen publications (including BioSpectrum, Dataquest, PCQuest, Voice&Data and Global Services) in the infotech, telecom, consumer electronics and biotech areas, and is a media value chain including Internet (www.ciol.com), events and television. The group's media services include market research (IDC India), job board (CyberMedia Dice), content management and multimedia, and media education. Voice&Data is CyberMedias flagship magazine for the telecom sector.

Aperto Networks is a registered trademark of Aperto Networks. The Aperto Logo and PacketMAX are trademarks of Aperto Networks. All other trademarks are the properties of their respective owners.


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## Bushroda

*`Unbranded` brands*
Madhukar Sabnavis / New Delhi August 3, 2007 

There is something to learn from the 'non-product' brands around us. 

What is common to Himesh Reshamiya, Harry Potter, the Wimbledon and the Taj Mahal? An odd collection, isnt it? 

Himesh Reshamiyathe man with the cap and the nasal voice. He has been the butt of jokes for many music connoisseurs but his film Aap Ka Saroor, released a few weeks ago, has been one of the few box office hits of the year. His music plays over and over again across radio channelsa quiet acceptance that there is an audience for himand thats beyond rickshaw drivers. His hits have come from singing for stars and in movies that are not top notch in the industry. While the debate may rage on whether he will survive the test of timethe fact remains for the last two years he has been the star in the industry. His presence at talent hunts, as a judge, on television and his latest invitation to a chat show that boasts of only A grade stars are further affirmation of this status. 

The Taj was recently voted as one of the seven wonders of the world. It is a fact that we are a country of one billion people, where English is widely spoken and awareness of issues is high. The media played an active role in garnering the required votes. However it cannot be denied there is something enigmatic about the Taj. Besides its marble splendour, it has its own look in different lightwhich makes it an architectural wonder. And add to it, centuries ago, it was a monument built to a universal emotionlovemaking it even more enigmatic. Not surprisingly, even as the image of India has changed from one of elephants and snake charmers to infotech and knowledge, the Taj as a symbol of India stood the test of time. No foreign tourists visit to India is complete without a darshan of the Taj! 

Is the game bigger or the players bigger? Who makes whom? It remains a chicken and egg question. While golfer, tennis stars and cricketers rebelled in the 60s and 70s to get their pound of flesh, the fact remains that today it is stars that draw audiences and the money. However, the Wimbledon has managed to be different. The finals in the first week of Julyan annual eventthe only one staged at the Wimbledon courts every yearcontinues to be the Mecca of tennis. Tickets are still sold for the dayfor a courtand people throng to it hoping to see the top seeds but satisfied with watching a final even if a lesser player reaches the final. The Venus Williams-Bartoli final was in true competitive spirit a shadow of a fight, but the match has not diminished the charm of the tournament. Next year, there will be the same crowds, the same wait, the same premium pricing and same energynot to forget the strawberries and creams. 

Potter mania seized the world in July. And this is particularly fascinating. The world has moved to the Internet and people are already talking about the third screenTV, computer and now the mobile. Kids and technology go hand in handand in this context the printed word seems archaic. Yet writer J K Rowling could create such hysteria with her character Harry Potter (and his friend Ron and Hermione) that across continents her seven edition of story generated such excitement that kids booked their copies in advance, stood in queues to be the first to get their copy and sat and read it religiously without demanding a Net version or a film production! During this period, one began to wonder whether reading was dead or dying. 

So whats common to these four phenomena besides the fact that they were in the news in July? Deep down they manage to find connects with specific target groups, which makes them newsworthy. Whether it is Himesh Reshamiya with the youth or Potter with kids or the Taj with foreign tourists or the Wimbledon with tennis fans, these are brands in their own right. The Tajs reputation has been built over centuries, the Wimbledons over the last 125 years, Potters over the last decade and Himeshs over the last couple of years. There is something about them that can be inspiration or learning for product brand buildersbecause none have been overtly advertised. Consciously built, maybe! They are unbranded brands. 

What interesting lessons can we draw from these for branding? 

First, there is a need to be different and stand outespecially in a cluttered market. Like him or hate him, Himesh Reshamiya has a voice distinctly differentadd to it his look and small town roots, these make him a character. Harry Potter is a school kid with a differenceits about spirits and ghosts and a mystical dark era that makes him vulnerable and daring togethera character so different from what one has seen in kid stories to date. 

Second, there is a need to build myths and stories to create enigma. The Taj has its myth in its origins and it has been guarded. Yet over the years new stories have developedsome true and some not so trueWas it a Rajput creation?these have added to its mystique and charm. 

Third, the need to invest time: strong brands dont happen overnight. The Taj and the Wimbledon have gone through the test, the jury is perhaps still out on Potter and Reshamiya. Even the story of Potter began to emerge post Rowlings third novel and seems to have reached a crescendo in the seventh. 

Fourth, brand custodians need to hold something dear and inseparable to a brand. The Wimbledon is what it is today because some champion has decided quite doggedly to safeguard some ritualswhile evolving in othersno coloured clothing, play on grass, the timing in June/July, calling the fairer sex ladies not women and of course the strawberries and creamthat keeps it special for tennis. Retaining the purity is critical. 

Finally, the biggest creator of a brand is its consumers. Not so much in their consumption of the brand but in valuing the intangibles of it and keeping the legend going. The challenge is to uncover and understand what those intangibles are to fuel it to keep it going. The Taj and Wimbledon are prime examples of thisexpectation of consumers year after year are met and often exceeded that get them to become spokespersons and champions. 

Something worth thinking about.


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## Bushroda

*A launch pad for lucrative career*
Special Correspondent 

KOCHI: Kochi, by hosting The Hindu Opportunities Job Fair on August 18 and 19, is joining the big league of other metro cities in providing a platform for ambitious youngsters to launch their career dreams, especially in the Informa tion Technology sector. 

In recent years, The Hindu Opportunities Fair has provided a ready platform not just for first-time job seekers but also for those looking for better prospects. For companies that recruit in large numbers, the fair is the right plac e as many hopefuls can try their luck at the stalls during the two-day event.

This is the first time The Hindu Opportunities Fair is coming to Kochi. The fair is going to be held under the aegis of The Hindu with Cognizant as presenting sponsor, SFO Technologies as associate sponsor, and AP TECH as training sponsor. The Raymond Shop, Kochi, is the grooming partner and TMI First, the technology partner.

Some of the participating companies are Allianz Cornhill Information Services P. Ltd, Allsec Technologies Ltd, Aryans Infoway P. Ltd, Assyst International P. Ltd, Calpine Technologies P. Ltd, Cordiant Technologies, Citigroup Information Technology Operations, Genpact, Hages Business Solutions Pvt. Ltd., IDSi Technologies India Pvt. Ltd., Ind Sigma Infotech Pvt Ltd., Intelenet Global Services Pvt. Ltd., KGISL, Larsen & Toubro Ltd., Outsource Partners International, Qfirst, SlashSupport India P. Ltd, Sutherland Global Services, Tata Elxsi Ltd, Visual Graphics Computing Services, Wipro Technologies, Wrench Solutions P. Ltd, Zerone Consulting P.Ltd.. 

They will be looking for the right candidates for their requirement. The fair will be held at Assisi Vidyaniketan Public School, Chembumukku, Kakkanad, Kochi , from 10 a.m. to 4 p.m. on August 18 and 19.


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## Bushroda

*Challenging first quarter, managed well* 
http://imageshack.us
Srividhya Sivakumar 

Allaying market fears of a reversal in fortunes, India Inc has put out a robust earnings card for the June quarter. Despite last year&#8217;s bigger base, Corporate India scored a 17 per cent increase in revenues, while earnings grew about 36 per cent, year-on-year (inclusive of the &#8216;other income&#8217; component, which was up a substantial 39 per cent). 

While there has been a perceptible slowdown in sales growth, largely due to base effect, growth in earnings has remained stable, thanks to the improving operating efficiencies of India Inc. On a sector-wise break-up, while usual high-performers &#8212; construction, telecom and banks &#8212; continued their winning streak, sectors such as automobiles and engineering and technology recorded a slowdown in earnings&#8217; growth (because of the rupee effect). 

Among other sectors, while power companies posted firm numbers, sugar companies slipped into the red. The findings in this article are based on the numbers reported by about 1,400 companies for the June 2007 quarter. Here is a brief overview of sector-wise performance for April-June.

*Double-digit growth for banks:* Banks had a good quarter, with public sector banks (PSB)faring better than their private counterparts. While PSBs reported a near 48 per cent growth in earnings, private banks witnessed a 35 per cent incr ease. Given the robust loan growth over the year, it was no surprise to see the interest income component of most banks swell. 

While interest income grew 50 per cent for private banks, public banks, on an average, recorded a growth of about 34 per cent. Among the private banks, Yes Bank and South Indian Bank more than doubled their profits. Interestingly, while all the banks recorded double-digit growth in earnings, IDBI reported flat earnings growth. 

State Bank of India, the country&#8217;s largest bank, reported 78 per cent earnings growth, backed by a 28 per cent increase in total income. While the impressive performance could be due to last year&#8217;s low base, the overall earnings card was marked by stable net interest margins and an improvement in asset quality. The write-back of provisions in the AFS (Available for Sale) category also spurred earnings.

ICICI Bank, on the other hand, reported a modest 16 per cent increase in net interest income, a result of the contraction in net interest margins. While the bank&#8217;s earnings were up 25 per cent, the increase in non-performing loans rekindled concerns on asset quality. 

*Margin pressures in engineering:* Engineering and capital goods companies continued to chip in with firm revenue numbers on the back of buoyant demand trends from user industries, but margin pressures remained. The sector reported a 25 per cent growth in revenues, but higher input costs and the subsequent contraction in operating margins led to a slowdown in earnings growth. Future performance, however, may rest on the timely commissioning of capacity expansion plans by companies in this sector. 

L&T reported 140 per cent growth in earnings (helped by forex gains on overseas loans) on the back of a 30 per cent growth in revenues. Among other companies that put up a laudable performance were Praj Industries, Bharat Bijlee, HEG and Texmaco. 

Construction and realty companies, despite slower growth in revenues, almost doubled their earnings. The lower revenue growth could be attributed to a sharp increase in interest rates (for real estate companies). Most real estate companies recognise revenues on a percentage completion basis of their projects. Earnings, therefore, got a boost from the booking of revenues from projects sold in earlier quarters at higher prices. Earnings volatility for companies in this industry is inevitable given the accounting system followed. Positive signals from telecom: Led by strong subscriber growth, telecom companies yet again notched up a good score, despite pressure on realisations. 

The last quarter was marked by cuts in international call rates and roaming charges, reduction in cost of pre-paid lifetime schemes and introduction of low-cost handsets; as mobile operators stepped up efforts to deepen the market. 

These efforts translated into healthy monthly additions in customers. For June 2007 monthly additions reached a high of 7.6 million, with key players gaining significant market share.

Bharti Airtel, driven by 54 per cent increase in revenues, saw earnings surge by about 71 per cent. Reliance Communication, backed by a 33 per cent growth in revenue, more than doubled its profits. 

Subscriber churn and declining average revenue per user (ARPU) marred the growth picture for MTNL.

*Mixed bag from cement:* Cement companies reported a lower level of earnings growth, at 50 per cent, on the back of a 25 per cent rise in revenues. On a sequential basis, however, earnings grew by about 30 per cent, with improved realis ations leading to a rise in growth percentage. 

Mysore Cements, helped by a high &#8216;other income&#8217; component and zero debt status, reported a seven-fold increase in earnings. India Cements and Ambuja Cements reported healthy growth in profits, while ACC witnessed a slowdown in earnings growth. 

Going forward, while the short-term scenario appears promising, given the firming prices and buoyant demand, the outlook for the sector over a two-year time-frame is uncertain. 

Incremental capacities being installed in the next three years create concerns about pricing power. This apart, with the MRTPC (Monopolies and Restrictive Trade Practices Commission) probing the sector for price collusion and cartelisation, regulatory risk may remain a key concern for the sector.

*Tough quarter for software:* Software companies disappointed as a sharp appreciation in the rupee trimmed revenues as well as margins. Contraction in operating margins dented earnings growth, which was up just about 30 per cent. This is almost half the growth rates of the industry last year.

Top-tier companies such as Infosys, TCS and Wipro saw their operating margins come down by about 2-4 percentage points, quarter-on-quarter. However, given that most companies are now actively hedging their forex exposures, other margin levers such as billing and utilisation rates could offset the rupee effect. 

This apart, strength in demand, improving offshore revenue contribution and subsidiaries&#8217; profitability may cushion the firms, to some extent, against any further impact from rupee appreciation. While profitability for Tier 2 companies was under pressure, companies such as KPIT Cummins, 3i Infotech and Rolta India registered impressive numbers.

*Headwinds put brakes on automobiles:* A hardening interest rate scenario trimmed sales for auto companies &#8212; the commercial vehicles and passenger vehicles segment witnessed a modest growth in domestic sales while three-wheeler sal es reported lower growth. 

Maruti Udyog scored high, with about 26 per cent rise in revenues and 35 per cent growth in earnings, backed by higher realisations and stable margins. Tata Motors reported just about 5 per cent rise in revenues. 

The two-wheeler industry, however, seemed to be hit hard by interest rate headwinds. Lower motorcycle volumes led to a decline in revenues of TVS Motor and Bajaj Auto. 

Hero Honda, however, managed a revenue growth of about 4 per cent backed by higher realisation and improvement in its product mix. 

*Powering ahead:* Companies in power generation and supply had an impressive first quarter, driven partly by higher tariffs, partly by an increase in power generation and consumption and to some extent by &#8220;other income&#8221;. 

This apart, growth in earnings may also have been driven by increased load factors in the quarter, resulting in a higher contribution to earnings. The sector recorded 44 per cent increase in earnings on the back of a 20 per cent rise in revenues and a 39 per cent increase in other income.

Reliance Energy recorded a 41 per cent rise in revenues on the back of higher electricity tariffs. Earnings, however, got a lift from the 103 per cent rise in &#8216;other income&#8217; component. Other companies, such as Tata Power, NTPC and CESC, also reported firm numbers.

*The big picture *

Despite areas of concern surrounding the rupee&#8217;s effect on technology companies and the impact of interest rate hikes on asset purchases, India Inc largely managed to better consensus expectations on earnings this quarter. 

Import-intensive businesses received help on their margins from a rising rupee; but the three-month period also brought to light the ability of large and the emerging large-cap companies to build on a high base and actively manage challenges to their margins from firm input prices and interest costs. 

The quarter was however, not without its grey areas. One, with a significant proportion of companies registering a surge in &#8220;other income&#8221; (in many cases, from forex gains), the quality of earnings witnessed some deterioration. Further, mid-cap companies witnessed a stark divergence in performance, even within the same sector. 

All this underscores the increasing role that stock selection will play in the performance of individual portfolios in the days ahead.


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## Bushroda

*Tata Motors set to drive in world's largest bus plant*
4 Aug, 2007, 0122 hrs IST,Chanchal Pal Chauhan, TNN

NEW DELHI: Tata Motors is setting up the largest fully-built bus plant in the world, which will make it one of the leading global bus manufacturers. The company is currently scouting for a location in southern India. 

Tata Motors managing director Ravi Kant said, We are in the process of setting up an integrated bus-making facility, which will perhaps be the largest of its kind in the world. The proposed plant will come up somewhere in south India shortly. 

According to a source in the automobile industry, Tata Motors has identified Karnataka and Goa as possible locations for the proposed facility, but is yet to finalise the location. The proposed plant is likely to come up in 2008. 

The company will initially have an annual capacity of 7,000 fully-built buses and luxury coaches, for which the Tatas have entered into a joint venture with Brazil-based Marcopolothe largest mass manufacturer of fully-built buses in the world. The joint-venture controlled by Tata Motors will entail an initial investment of Rs 200 crore. 

The second phase of expansion will see the entry of Europes largest super-luxury bus manufacturing companyHispano Carrocera of Spainwhere Tata Motors will hold 21% stake with an option to acquire 100% in future. Tata Motors will use Hispano Carroceras expertise to manufacture ultra-luxury buses targeting Europe, the US and other developed markets. 

Both ventures will tap the growing demand of fully-built luxury buses and coaches in the domestic as well as global markets. The scaleable facility will complement the current bus-making capacity of Tata Motors, which sold around 28,000 units in the last fiscal year. 

We will be offering a complete range of fully-built passenger vehicles, right from the 7-seater Magic to the 54-seater fully-built buses. Marcopolo is a mass-volume maker of fully-built buses while Hispano Carrocera is Europes best luxury bus maker. This strategic alliance (with Marcopolo and Hispano Carrocera) will give us access to their design and technological capabilities to fully tap the growing potential of this segment in domestic and export markets, said the Tata Motors spokesperson. 

The company is chasing a sales target of 50,000-60,000 passenger carriers in the next few years to emerge the largest player in terms of units, ahead of leading bus manufacturers like DailmerChrysler and Volvo. 
Tata Motors has already launched fully-built small passenger vehiclesMagic and Wingerbased on the one-tonne Ace platform in June this year. 

It also has a 10% stake in Automobile Corporation of Goa, which manufactures bus bodies. Tata Motors, with a 49% marketshare, is a leader in the 54,000-unit domestic bus market.


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## Bushroda

*'Seeds of India's rise as IT giant were sown in 1947'* 
S Ramadorai 

The seeds of India's rise as a global powerhouse in information technology were sown way back in 1947, as Independence nudged education into the spotlight and led to the establishment of new universities, engineering colleges and research and higher education institutions. 

These initiatives resulted in the availability of skilled technology and engineering professionals, many of whom went overseas in search of green pastures and some of whom came back to clear the forest to create new and greener pastures within the country.

In the global arena, the IT sector has been a catalyst to re-engineer India's image from one built on past clich&#65533;s like palaces and poverty. It has been the ambassador of emerging India and helped create a new brand image for the country associated with skilled and hard-working professionals.

With hindsight, looking back at the early days of the IT industry in the late 1960s and early 1970s, it seems a near miracle that the industry even took root, given the complete absence of demand for technology in India and strong foreign currency regulations that forbade import of computers and software.

Indeed, our economic past, characterised by scarcity, has been the driver for today's success. It forced us to be more efficient and do more with less. Not only did we get free lessons in optimising our resources, but it also challenged us to find creative solutions, and then test these in a tough operating environment. It was virtually like getting a free MBA!

What started with small programming jobs in the US, moved to larger projects being done out of India, until an entire ecosystem of talent, academia, training developed into a $30 billion industry. One of many engineers who left California for India and then came back to sell an idea was yours truly. I set up TCS's [Get Quote] US operations in 1979, having returned after my masters at UCLA in 1972.

Now, 'Made in India' has become the benchmark for software and services in the 21st century, just like 'Made in Japan' was the success story in manufacturing, automobiles and consumer electronics in the late 20th century. It is now a brand that epitomises efficiency and innovation that not only our manufacturing sector hopes to emulate but also has attributes that our dominant agriculture sector can ride on as it begins to supply flowers, fruit and grains to global kitchens.

If Indian IT learnt to walk in the West, it is now learning to run in India. Technology is helping bridge the rich-poor divide; distance education, telemedicine and micro-finance are helping achieve this.

Less surprising, perhaps, is that India is creating innovative products aimed at the bottom of the economic pyramid. So products like a Rs 10,000 PC, a refrigerator built to survive voltage fluctuations and, of course, the Rs 100,000 car are all unique, indigenous, cost-effective solutions that could be exported.

We are also deploying technology to ensure that citizens can avail of government services remotely without having to deal with India's mammoth bureaucracy; the current government's new employment initiative for families living below the poverty line uses TCS technology to ensure that the poor get the benefits of public spending rather than corrupt middlemen, and for one of India's leading children's NGOs we have devised and set up a nationwide database and communication system that allows help to get to children in need, in the quickest time possible.

Innovation in technology is helping India. It boasts of the cheapest mobile phones and call rates of just Re 1 a minute and public transportation that runs on non-polluting gas. To top it all, it has a young population bursting with energy and aspirations - probably the only big market where first-time telephone users are cellular phone users that have bypassed landlines.

All this has given Indian IT a seat on the global head table, with intellectual competencies to serve an array of offerings in several domains, technologies, with processes to deliver complex solutions, and to sell and support these in all parts of the world. We are transitioning from simple outsourcing to global sourcing - driving the next phase of evolution in process quality frameworks and practices.

We have a headstart on competing countries in terms of process, track record, relationship management, and technology management. We are building our domain abilities and expressing our value to customers visibly. We have played a globally significant role in the information technology and knowledge based services area.

The fact that our multinational competitors are setting up shop in India is proof of India's competitiveness and the success of our business model. Another proof-point of this success is that Indian IT companies like TCS are being requested to establish operations in countries like Uruguay, Mexico, Brazil, China and Morocco.

At 60, India is at a new inflection point. In the years after Independence, it was the government that invested in capacity building for education and research. Today, industry has to come forward to rebuild the capacity to suit the needs of the future.

Our industry has the responsibility to find ways to collaborate with academic and research institutions in India and abroad so that we can stay at the leading edge of the technology domain and process innovation. Technology as an enabler to address all fields continues to be a critical challenge.

While the increasing numbers of universities and educational institutions in India is heartening, the emphasis on examinations (rather than on understanding, learning or knowledge) falls short of inculcating the intellectual leaning required to prosper.

We need to emphasise the need to innovate, to build intellectual property and maintain the pace of transition, whether it is domain consulting, domain products, shrink-wrapped products, high-quality software services or business process outsourcing.

Our ability to anticipate and, indeed, create successive "waves of innovation" will be crucial as we straddle technologies, domains and processes - and create a self-sustaining process to do so continually.

For many critics, India remains a late bloomer. But it must be remembered that nations are not individuals, and while individuals may look to take the foot off the gas pedal at 60, India remains a young nation, which, at 60, is ready to take its place on the global stage on an equal footing with developed economies.

For the IT-ITeS industry, this means a transition from the technical software services of today to knowledge domain based services enabled by IT tomorrow.

But I am confident that IT will not remain the only global leader in the coming years and decades. If we can continue to build our knowledge skills, the manufacturing and agro sectors will soon be up on the global podium alongside the software giants.


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## Bushroda

*Maruti offers discounts to boost car sales*
August 5, 2007

MUMBAI (Reuters) - India's top car maker, Maruti Udyog Ltd., is offering discounts of up to 30,000 rupees on many of its vehicles to shore up sales, newspaper advertisements at the weekend showed.

Maruti, which has nearly half of India's market for mostly small cars, has said it would be hard to match its record domestic sales of 2006/07 because of firm interest rates that have slowed demand for vehicles.

Maruti, in which Suzuki Motor Corp. owns 54.2 percent, has said it would limit the impact of high interest rates with dealer incentives and customer discounts. It ran a discount offer in June.

The "Smile India Smile" offer, which runs from Aug. 1-15, offers discounts ranging from 7,000-30,000 rupees on several models, including its best-selling Alto and the Esteem sedan, the advertisements showed.

The scheme was being offered countrywide, a spokesman said.

Other vehicle makers, including No. 2 car maker Tata Motors Ltd., have scaled back production on the softer demand. A senior banker said on Friday the slowdown would persist until interest rates fell by at least 100-150 basis points.

Maruti, which is seeking shareholder approval to change its name to Maruti Suzuki India Ltd., is trying to shift consumers to bigger, more high-margin cars and launched the SX4 sedan in May and the Grand Vitara sport utility in July.

Maruti has sold 227,578 units in the four months to end-July, up 19 percent from the same period a year earlier.


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## Bushroda

*Avoid India, UK tells patients*
Mumbai, August 03, 2007
4/8/2007

More than two lakh foreigners visited India for treatment last year. But not everybody is pleased.

Medical organisations in the UK and the US have cautioned their citizens against this growing trend of health tourism to countries like India, Malaysia and Thailand. Long flights, they have said, can cause more harm than good to a patient.

A study by the Confederation of Indian Industry and McKinsey estimates that the industry will be Rs 100 billion in India by 2012.If you heed the UK Department of Healths advice, for instance, you would not look at any country that takes more than a three-hour flight to reach for those bypass and hip surgeries, breast implants and liposuctions.

Certain Asian countries have started offering world-class treatment far cheaper than the West, seriously challenging the old-world notion of going to the friendly neighbourhood doctor.

*A study by the Confederation of Indian Industry and McKinsey estimates that the industry will be Rs 100 billion in India by 2012. With its wealth of talented doctors, Indias healthcare industry may soon rival its software sector.*

But with growth has come resistance. Flying can place a great deal of stress on the body and patients travelling to distant nations for medical attention should check their fitness to fly and factor in appropriate recuperation time before flying home, a British Medical Association spokesperson told HT.

The US Department of Health raised concerns that seeking treatment abroad can add to health risks. There are destination-associated risks to medical tourists like heat-related illnesses or malaria, said Christie Reed of the Center for Disease Control. This may be complicated if a patient travels in ill health.

The British National Health Service did consider a tie-up with Wockhardt in 2004. However, concerns over the safety of patients flying to India, combined with falling waiting times for operations in the UK, caused them to cancel the plan.

We send patients to European countries with a maximum flight time of three hours but not beyond that, a UK Department of Health spokesperson said.

The Indian Healthcare Federation (IHF) has reacted saying that patients are coming here because they are not being given appropriate healthcare in their own countries.

Patients are not coming here because they are enamoured by Indias tigers, said IHF President Dr Naresh Trehan. They are here to seek the best healthcare treatment they can afford.


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## Bushroda

*Docs in demand *
31 Jul 2007, 0000 hrs IST
SUMANTHA RATHORE,TNN

Destination India has enticed filmmakers and culture lovers for decades. But now, with India excelling in medical facilities, it has become a paradise for the foreign patients who are either tired of the long queues at the hospitals or wish to receive quality treatment without having to shell out lots of money. Because of its medical infrastructure, Pune is rapidly becoming a preferred destination for such individuals. 

The city is cashing on its increased popularity for its outstanding quality of service. Rajiv Yerawadekar, Director, Symbiosis Health Sciences, says, "There are many hospitals in the city that are catering to the nationals of other countries. They are coming here for treatment, since we have better quality manpower and are affordable as well. Moreover, there is no waiting list, unlike the West, where one has to wait for months to get a surgery done." 

Pune's proximity to Mumbai has been working in its favour. "Since Pune is very close to Mumbai, we have an edge over other cities. In the last two years, we have grown tremendously as far as health tourism is concerned. We have a dedicated reception cell to look after these patients so that they have a pleasant stay here. Moreover, instead of just focusing on their ailment, we offer a package deal and make sure that they enjoy the nature in and around the city," says Dr Pandurang Vinayak Bokil, medical administrator of a city-based hospital. 

Many feel that our country has an advantage over Thailand that pioneered the concept of health tourism. "We have four S's - sunshine (scenery), stethoscope (skilled doctors), surgery (medical facilities ) and sambhar (Indian cuisine) - that give us an edge over other countries. India has always been famous for its hospitality and we just need to capitalise on it. With support from health and tourism ministries , we can go places," adds Dr Rajiv. 

Specialised treatments like transplantation of vital organs, cancer treatment, neurosurgery, cardiac surgery, urology and orthopedics are most sought after by foreigners. With health spas coming up, the process of recuperation has acquired a more inviting feel as well. 

When it comes to health tourism, there appears to be a win-win situation for both tourists and us. Indeed, here is a blessing in disguise.


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## Bushroda

*Air India to lease planes for international routes* 
New Delhi, PTI: 

With shortage of aircraft affecting its services on long haul routes, Air India has charted out plans to induct leased planes to maintain its international schedules and launch new routes. 

The current fleet was short by one aircraft and the airline was operating without a standby plane, severely affecting its punctuality and schedule integrity, official sources said.

To handle the situation, Air India has recently held negotiations to lease planes after it received offers for wet- lease of two Boeing 747-400s and two Airbus A340-300s.

The two Boeing jets would replace similar planes to maintain the present daily Mumbai-Chicago flight, while the Airbus aircraft would be deployed on Dhaka-Kolkata-London and Mumbai-London routes.

Two A330s are also being leased for deployment on the new India-Hong Kong route from November one and on India-Mauritius -Johannesburg route from December 15.

The aircraft - Boeing-767 and A-310s - would be released due to the deployment of the leased planes. These jets would be utilised for enhancing operations to the Middle East, Saudi Arabia and Hong Kong, for which the carrier has got new bilateral entitlements.

As the national carrier starts inducting aircraft from Boeing, it has started the non-stop Mumbai-New York flight on August 1 and will launch the direct Delhi-New York (JFK Airport) flight from January 7 next year. A direct thrice-a- week Bangalore-San Fransisco flight will start in May next year. 

From this winter schedule, Air India plans to start a Delhi-Frankfurt-San Fransisco flight from October 27, besides the existing one to Los Angeles, the sources said.

It would also have a flight from Mumbai to these two American cities via Frankfurt, thereby delinking the earlier service to Los Angeles touching both Mumbai and Delhi.

With the induction of its fifth B 777-200 (Long Range), the airline would launch a non-stop flight between Bangalore and San Fransisco would be launched by May next year.

For long-haul international routes, AI would receive three new Boeing 777-300 (Extended Range) planes by the end of this month and four more in September, October, November and January.

For its short and medium haul network, the airline would receive six Airbus A-321s and five A-319s up to March next year. Of these, three would be used for replacement and eight for expanding its domestic and global routes, they said.

These planes would be utilised to enhance operations to Dubai, Kathmandu, Singapore, Muscat, Sharjah and Bangkok on the international sector.

Its low-cost arm, AI Express, would operate three additional B 737-800s of which, one would be deployed on international routes and two on the domestic sector.


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## Bushroda

*Egypt seeks Indian help to develop IT*
*CALLING NEW DEHLI: Cairo sent a delegation to India to convince companies there to sub-outsource contracts. It also hopes to learn to avoid problems facing Indian firms* 

AFP, CAIRO 
Monday, Aug 06, 2007
Taipei Times

Egypt has set its sights on grabbing a share of the multi billion dollar Indian-dominated call center market and is looking to an unexpected corner for a helping hand -- India.

As it makes its pitch to the world, touting a multilingual workforce over India's English-speakers, a time zone shared with Europe and proximity to the US, Egypt is marketing its edge over India to India itself.

The government has sent a high-level delegation to India to convince the IT behemoth to sub-outsource its outsourcing to Egypt.

Several cooperation agreements and memoranda of understanding were signed between the two countries, and Indian giants such as Wipro and Satyam have also signed agreements to set up support centers in Egypt.

According to the Yankee Group, a US-based technology research and consulting firm in IT outsourcing, Egypt is 15 to 20 years behind India, which has boomed to dominate 60 percent of the overall offshore market.

But the south Asian giant struggles to maintain an adequate supply of skilled workers, and handing some of the pie to Egypt could be mutually beneficial, Egypt says.

The Information Technology Industry Development Agency (ITIDA) was set up by the government of technocrat Prime Minister Ahmed Nazif in 2004 to guide Egypt's burgeoning IT industry and propel it onto the world stage.

The government hopes to entice major IT players to set up their call centers, accounting and payroll management -- known as business process outsourcing (BPO) -- in Egypt, pumping resources into an industry it hopes will elevate the national economy.

"This sector will lead to a renaissance in Egypt," ITIDA CEO Mohamed Omran said.

So will Egypt become the new India?

"Absolutely not," Omran said. "We cannot compete with India, we don't want to compete with India, we want to cooperate with India."

"It's what makes the most sense," said Mai Farouk, an independent IT analyst researching Egypt's outsourcing industry.

"It would help the industry grow and elevate its standard," said Farouk, but she fears that the lack of a formal analysis of Egypt's IT experience so far could send the country down the wrong path.

"There has been no thorough analysis of the Egyptian experience," she said. "In Egypt, if a type of business is successful, everyone jumps into it. It is an individual and business trend here.

"We need to study and learn from other's mistakes," she said.

One problem facing India is the country's poorly planned roads making it difficult for staff to reach some of the outsourcing centers, something Egypt has picked up on.

Far from the clutter of Cairo, the government has allocated a vast expanse of desert to the highly marketed "Smart Village," a gated compound built with state-of-the-art technological services.

The lush techno park already houses Microsoft, Vodafone, Ericsson and Alcatel, among others.

At the high-tech Vodafone Egypt offices, employees have already tasted some of that renaissance -- they have access to their own restaurant, cafe and gym.

Sherif Bakir, head of retail at Vodafone Egypt, says the Smart Village has been very enticing for investors as well as new recruits.

"Young graduates in Egypt are attracted by so many factors in the IT industry: the prospects of a career, the salaries [four times that of an average starting salary] and the opportunity to work somewhere like Smart Village with all its benefits," he said.

"And in Egypt, being a call center agent is not seen like being a telephone operator. It's not a dead end job, it's seen as a stepping stone to a career in the IT industry," he said.

But critics say Egypt's outsourcing "boom" won't develop into more than a boutique industry, with the much-touted multilingual and skilled human resource pool amounting to a tiny percentage of Egypt's 76 million population.

A high level of illiteracy, dire poverty and a very large rural population mean that most won't touch the benefits of a booming IT industry.

Omran said the figures speak for themselves.

"A tiny percentage of a huge population is a lot of people," he said. "We're talking millions. And IT is like blood, it gets into the veins of all industries and sectors."

He is eager to showcase his agency's pride and joy: Xceed, one of the largest contact centers in North Africa and the IT arm of the government-owned Telecom Egypt.

At the 16,000m2 space equipped with "cutting edge fault tolerant IT infrastructure," 1,200 agents offer customer and technical support to General Motors, Microsoft and Oracle among others, in eight languages including English, French, German and Hebrew.

According to Xceed, in 2005, nearly 70 percent of total outsourced Egyptian workstations were supporting local customers.

"However, by 2010 this will be nearly completely reversed with 65 percent of Egyptian outsourced workstations servicing foreign end-users," Xceed said.


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## Bushroda

*Welfare centre for Gulf Indians* 
By SOMAN BABY
MANAMA, Bahrain

A WELFARE centre for Indians working in Bahrain and other Gulf countries is to be opened in Dubai later this year. The centre will provide financial, legal and medical help for Indians who fall into difficult times, a Ministry of Overseas Indian Affairs spokesman (MOIA) said in New Delhi yesterday.

"Initially, there will be three such centres in Dubai, Washington and Kuala Lumpur and these will come into operation by October this year," he said.

The spokesman said that the Cabinet approval had been granted for the centre in Dubai, which would be a full-fledged one under the jurisdiction of the Indian ambassador to the UAE. The centre will serve Indians living in the UAE, Bahrain, Oman, Qatar, Kuwait and Saudi Arabia. 

There are around five million Indians in the region, and many of them work as contract workers, said the official.

A Washington centre will cover the US and Canada, and one in Kuala Lampur will cater to Southeast Asia.

Each of these centres would be headed by a consular level officer under the jurisdiction of the Indian envoy in that country. 

However, the officer would report to MOIA. 

Legal, financial and medical counsellors will assist the officers.

"These counsellors will be taken preferably from Indians settled in that country but we are not averse to taking local citizens of the country concerned," said the spokesman.

"The Dubai centre will have all the three counsellors.

"The legal counsellor will basically work on workers' rights. The medical or health counsellor will render psychiatric help to traumatised workers, especially domestic maids.

"The financial counsellor will help workers make investments from their small savings instead of sending all their earnings as remittances to India."

At the Washington centre, the legal counsellor's work will be mainly concentrated on resolving problems arising out of marriages between Indian citizens and overseas Indians. 

There have been numerous reports of Indian brides being abandoned, abused or betrayed after getting married to Indians in those countries and the MOIA has been taking several steps to stop this trend. 

The MOIA spokesman said the role of the financial counsellor would be to primarily aid Indians there who are interested in investing in the booming Indian economy.

"In the Kuala Lumpur centre, which will cover Southeast Asia, the role of the legal and medical counsellors will be similar to those in Dubai," he added.


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## Bushroda

*Expatriates to launch International Business School in Kerala* 
8/6/2007
The Peninsula, Qatar

Doha  The Indian expatriates from the Southern state of Kerala will launch a state-of-the-art facility B-School in the state's commercial capital Kochi. 

The NRI joint venture, is promoted by Dr Mohan Thomas, Chairman of Birla Public School and Professor Jay Kandampully. 

The establishment of the International Business School (IBS- Kochi) is in partnership with the Management Center Inssbruck (MCI), University of Applied Sciences, Innsbruck, Austria, will mould future business leaders of India. IBS-Kochi, in conjunction with MCI, will offer an 18 month International MBA programme, especially designed to produce graduates who are commercially astute, socially responsible and international in outlook, said Dr Thomas. 

"The vision of IBS-Kochi is to serve as the international school for excellence in providing future business leaders with world class business and management education. The mission is to promote excellence in learning and research in an effort to develop globally competitive and insightful leaders who will have a conscientious understanding of the relationship between the economy, society and the environment", he said. 

IBS-Kochi will nurture management education and research in India by providing students with a unique opportunity to undertake innovative business education and research in India by providing students with a unique opportunity to undertake innovative business education and research that is the equal of international business schools anywhere in the world, Dr Thomas said. 

IBS-Kochi have attracted top professors from the key business disciplines to its faculty. 

All of them are recruited from highly reputed business schools in Europe, the US, Canada and Australia. Foundation Dean, Professor David Lamond, was a long-time faculty member of the top-ranking Macquire Graduate School Management and dean of Sydney Graduate School of Management, he added.


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## Bushroda

*Foreign students put India on global education map*
Monday, 6 August, 2007, 02:03 AM Doha Time 
Gulf Times, Qatar 
By Prashant Nanda 

In the years from 5th-13th century AD, eastern Indias ancient university of Nalanda was home to foreign students from as far away as China.

Thousands of years later, history spills over to the modern-day Indian nation that continues the tradition of being a centre of educational excellence and a lodestone for students from all over the world.

Sixty years after it attained independence, India boasts of 310 universities and 16,000 colleges offering the widest spectrum of courses. Its centres of higher learning like the Indian Institutes of Management (IIMs) and the Indian Institutes of Technology (IITs) are global brandnames.

Adding to the quality of education is the fact that English is the generally accepted mode of teaching and living standards are economical - attracting thousands of students from at least 100 countries.

A large number of students come to India from countries like Afghanistan, Bangladesh, Bhutan, Ethiopia, Fiji, Iran, Iraq, Japan, Jordan, Kenya, Ghana, Lebanon, Madagascar, Malaysia, Mauritius, Myanmar, Nepal, Somalia, Sri Lanka, Suriname, Syria and even the US.

They (the global populace) look at the Indian education system with trust, said Educational Consultants India Limited (Ed. CIL), a body under the Human Resource Development (HRD) ministry.

India is today recognised as a world centre for education. Indian entrepreneurs are making waves throughout the world. Their ideas, technical knowledge and entrepreneurship have yielded unprecedented growth in income, employment and wealth. The credit goes to the sound and practical educational foundation they have received in India, they said.
Its a rapidly increasing phenomenon.

A case in point is southern Karnatakas Mysore University where at least 1,200 foreign students study, up from only 150 four years ago.

Vice Chancellor Shashidhara Prasad attributes the spurt to the IT revolution and Indias economy that is growing at over 9%.

The quality education provided by many universities in our country is increasingly getting noticed. When I became the vice chancellor, there were around 150 foreign students. The trend is growing.

Of course, its a lot to do with the arithmetic of education as well.

The Mysore University, for instance, offers an MBA degree for Rs150,000 (approx $3,750) as against $12,000 to $15,000 in Europe, Australia or in the US.

Director of the prestigious IIM-Ahmedabad Bakul Dholakia disclosed that his institute had student exchange programmes with 50 others in the world.

Yes, India is becoming a global destination of education. Our education is at par with any major institute of the world. Our students are increasingly getting global attention and job offers and this is a good yardstick of our quality.

Currently, IIM-A has student exchange programmes with exactly 50 institutes across the continents. Some students stay in our campus to pursue a fulltime one-year MBA programme. India is progressing and there is no full stop, Dholakia said.

Tyler William Walker from the US perhaps best represents the trend of students from a developed country opting for India.

Walker, who is doing his M Phil in Hindi from New Delhis Jawaharlal Nehru University (JNU), said: I came to India first as an exchange student during my stint at California University and then joined JNU for a full time course in Hindi. While students from developing countries come to India to get quality education because it costs less, students from developed nations come for variety.

The culture, the languages and even the social set up of India attract students here, he said, adding that there were only two students from the US three years ago.

The global recognition of Indian education is helping the cause of students as well. The courses and professionals trained in Indian educational institutes are recognised the world over - 200 of the Fortune 500 companies regularly participate in campus placements in Indian institutions, the body said.  IANS


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## Bushroda

*Apollo eyes acquisition in US*
6 Aug 2007, 0430 hrs IST,Sidhartha,TNN

Prathap C Reddy, the 74-year-old chairman of Apollo group, seems to have his hands full. He is just back from Mauritius where Apollo is setting up a 250-bed hospital. His health insurance joint venture with German insurer DKV is set to begin operations this week. He is also planning to acquire hospitals in America. Reddy, who ushered in corporate healthcare in India, spoke of all this and more even as architects waited in the adjoining room to work out a blueprint to expand the hospitals in Delhi, Chennai and Hyderabad. Excerpts. 

*Q: You are about to complete a quarter century in the hospital business. You have gone overseas. What should we expect now? *
We have finished phase-I and we have some 7,500 hospital beds. We have brought quality healthcare and broken myths about India. Now, patients from across the world are coming to India because we offer services which are at par with the US at one-tenth the cost. 

Our revenue is rising and we are building hospitals in Vizag, Bhubaneswar, Dehradun, Kota, Bhilai and there are two major projects in Chennai and Hyderabad. Everyone is doing a medicity, which are just hospitals. We have health city since health for us is a 360-degree issue. We have invested Rs 20 crore in Delhi and will be investing another 32 crore this year. We do not have sufficient number of beds in Delhi, Hyderabad and Chennai and we are going to address that issue. 

*Q: What about hospitals abroad? *
A 250-bed hospital in Mauritius will be ready by 2008-end and we will have another hospital of the same size in Fiji by December 2008. We had set up a hospital in Sri Lanka but decided to exit as we were getting good value for our stake. We are still running the hospital and it continues to be Apollo. The contract is for three years and we will decide what we have do after that. 

*Q: Do tax concessions have a role to play in your overseas investment plans? *
We looked at the Middle-East but decided against investing because we can at best have 49% ownership. The board has said that we should have majority control. 

In Mauritius we had asked for land, exemption from customs duty and VAT and tax holiday and we got all that. So we decided to invest. There is a tax holiday for doctors too till 2010. In Bangladesh, we got a five-year tax holiday and in Sri Lanka it's a 15-year tax holiday. 

*Q: What about plans to enter the US? *
We have a BPO and are trying to expand it. We are also looking at acquisitions. We hope to make profit this year and through an acquisition reach double digit profit next year. There are a number of hospitals which are living on the edge. 

We will do acquisition in US at the right time. It's not a one-day game. As time goes on, as prices rise, more hospitals will find it tough to survive. 

*Q: What about succession plan? *
I have four daughters and each one has a clearly defined role in the group. The eldest (Preetha) is the MD of the group. The second (Suneetha) is director finance and is the one who works with the CFO and the president finance. My third daughter (Shobhna Kamineni who was also Apollo's third employee) is the one in-charge of the insurance venture, pharmacy and research. The fourth (Sangita who is director operations) handles the medical BPO and is in-charge of the Hyderabad region. But we have a very strong team of professionals who are responsible for building the organisation and have ideas to take it further.


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## Bushroda

*Premium flying: A taste of luxury on air*
6 Aug 2007, 0428 hrs IST,Anshul Dhamija,TNN

BANGALORE: Travelling first class or business class on international flights is today akin to checking into a five-star hotel. International carriers are pampering their premium passengers with a host of value adds that make flying a luxurious experience. From super comfortable beds and in-flight TV on 23-inch screens to buffet dinners and limousine transfers  a host of goodies have been thrown in to ensure the worth of a Rs 4,00,000 ticket. 

"Luxury on air is a lifestyle issue from a customer's point of view since he's used to such comforts," says Gaurang Shetty, VP in Jet Airways. 

Air India, which has started its Mumbai-New York non-stop daily fights, is offering limousine services at the JFK airport and a shower facility at 'The Lounge' on arrival. The seats in the aircraft have been designed to offer a soft massage to combat the stress levels. Passengers are entitled to $75 and $50 worth gift vouchers for in-flight shopping. 

Jet Air, which started its Mumbai-New York flight via Brussels has provided suites that give passengers privacy. 

"Such value-addition will only feature on the first and business class as both combined account for only 10% of seat capacity on a long haul flight," says Y S Shashidhar, VP at Frost & Sullivan. 

Singapore Airlines' premium customers now receive an amenities kit containing Salvatore Ferragamo toiletries and perfumes as well as Givenchy sleeper suits and suede slippers to lounge onboard. Emirates in-flight entertainment system 'ICE digital widescreen' allows passengers to view their holiday photos onscreen during the flight by connecting to a USB port. 

The airline offers free transfers in luxury cars like Mercedes E or V Class, Audi A6, BMW 5 series or Chrysler on arrival in Europe. Their passengers arriving in Venice enjoy transfers in speed boats. 

First class travel in India had seen a drop of around 90% five years ago, which saw many airlines changing from a three-class to a two-class configuration. "Now there's increasing demand for luxury travel from foreign business travellers coming to India," says an industry official. Over 65% of first and business class passengers are foreign business travellers, while rest are Indians. 

Fares in first and business classes have been going up by around 8% annually. 

At present a return fare on first class to the US would be between Rs 3 and Rs 4 lakh and on business class between Rs 1 and Rs 2 lakh.


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## Bushroda

*Infrastructural Boon*
6 Aug 2007, 0201 hrs IST,Manash Pratim Gohain,TNN

The very foundation of economic, industrial and social development lies in the infrastructure of an economy. The multiplier effect of infrastructure development on the economy is, thus, significant. Road transport, telecom, housing, railways, power, steel, cement, bridges, townships, shopping malls, food parks, aviation and shipping among others, all fall under the infrastructure sector. And if industry experts are to be believed, this is one sector, in India, which will be witnessing a remarkable growth in the next 10 years. 

Just a decade ago, it was almost a tenet of faith that infrastructure services were best provided by the state. 

However, with liberalisation and technological upgradation, private sector participation in infrastructure services has gained momentum. An expert committee on infrastructure, under Rakesh Mohan of Confederation of Indian Industries (CII), has projected a total fund requirement of about US$ 346 billion during 1996-2006. And with the government giving a nod to foreign direct investment (FDI) in infrastructure, this is the sector where most of our skilled workforce is likely to find a suitable career option. 

Be it technical or non-technical, the infrastructure sector has thrown open various job opportunities in the Indian market, which till now lie unexplored. To mention a few: 

Technical 
On the technical front, engineers would be the prime beneficiaries because of the boom in infrastructure. According to a Federation of Indian Chambers of Commerce and Industry (Ficci) survey, there would be a manifold increase in demand for engineers specialising in civil, water, transport, architecture, electrical, industrial, structural and environment for the infrastructure sector. With food parks, IT parks and townships mushrooming, graduates in town planning and landscape designers would be another sought-after career option. 

Among the core industries in this sector, crude oil, petroleum refinery and mining would require large number of chemical, electrical, mechanical, civil, instrumentation, mining, metallurgical and drilling engineers. Geologists and mine analysts would also have lucrative options in these sectors. 

Aviation is another sector, which would benefit from the growth of both tourism and hospitality business and infrastructure industries. With modernisation and privatisation of airports, pilots, air traffic controllers and aeronautical engineers would find the going easy in this sector. 

With a large number of upcoming projects, the telecom industry is going for high scale recruitments. There is a huge demand for software engineers, mobile analysts and hardware engineers for mobile handsets. Besides, there are ample opportunities for marketing people whose services are required to capture more and more customer base. 

Shipping jobs have their own charm and a unique lifestyle. Shipping jobs in India are primarily located at various port cities and even at non-port cities like New Delhi and Bangalore. These shipping jobs include merchant navy, cruise ship jobs, freight jobs, jobs in bulk carrier companies and oil tanker jobs. 

India has a lot of cruise ship companies and many international cruise ship companies are connected to India, thus offering numerous cruise job vacancies such as chef cruise ship jobs, freight agent jobs, air freight jobs, freight forwarding agent jobs, marine nursing jobs, cruise ship nurse jobs, cargo ship jobs, marine medical jobs and cruise ship summer jobs in India. 

Non-technical 
Although, it seems as if the skilled manpower with technical knowledge would walk away with the best job opportunities in infrastructure, those on the non-technical side too have equally lucrative and diverse options. 

If the aviation sector grows, so would be the demand for ground handling staff, cabin crew and other verticals like travel planners and ticketing, offering several options. 

Similarly with the development of townships, IT parks and malls, demand for facilities management personnel would also grow. Pervin Malhotra, career counsellor, Caring, said: "Big complexes and facilities outsource their management with facility managers acting as the backbone for maintenance and smooth running of these infrastructure." 

In the management arena itself, project management would be the most lucrative assignment a manager can have in his kitty, with designing and managing a complete project right from concept. "And obviously the sales and marketing personnel would be there as the vanguard of the project," added Malhotra.


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## Bushroda

*Dollar doldrums*
Ila Patnaik
Monday, August 06

*RBIs avoiding the big monetary issue: cost of keeping rupee weak. So government must step in *

The credit policy statement last week didnt address the difficult choice facing India today. Can RBI deliver the impossible trinity  an open capital account, a weak rupee and low inflation  in the coming year? In recent months RBI has used a variety of monetary policy instruments, yet the outcome has been undesirable: sharp appreciation of the rupee, high inflation and sharply rising interest rates. 

Instruments that used to work in the 1990s are now failing to deliver. Until January 2004, while keeping the rupee weak by buying dollars, RBI was simultaneously able to sterilise its foreign exchange intervention by selling government bonds from the stock it held. In this way it kept control over the rupee in the system and prevented inflationary pressure from building up. There was little conflict with the increasing openness of the economy, and RBI could continue to liberalise the capital account. 

The problem started when RBI ran out of its stock of government bonds. It then turned to the government to issue Market Stabilisation Scheme (MSS) bonds that were meant solely to sterilise its foreign exchange intervention. The pace of sterilisation slowed down as its cost became transparent. For example, in 2006-07, the government paid Rs 2,600 crore as interest on these bonds. The last nine months have seen large-scale unsterilised intervention by RBI. As a consequence, money supply increased sharply as new money created grew at 29 per cent compared to 17 per cent last year. 

High money growth was accompanied by high inflation. To counter inflationary pressure, RBI stepped down its intervention in foreign exchange markets in March and the rupee appreciated sharply. Cash Reserve Ratio (CRR) and interest rates hikes were deployed to reduce liquidity. But these led to sharp interest rate shocks. Higher interest rates began attracting more capital and also raised concerns about investment slowing down. Subsequently these were countered by lack of sterilisation, which resulted in zero interest rates in the overnight inter-bank market. There was complete confusion on monetary policy as RBI struggled to tackle one problem after another. 

At every stage the fire-fighting caused fresh problems and more instability. As a policy framework this is ultimately futile, because it is rooted in inconsistency. The central bank is being asked to deliver conflicting objectives that cannot be all obtained at the same time. To put it in a somewhat simplistic fashion, the picture looks like this: one month politicians scream about rising prices and so RBI keeps away from the foreign exchange markets and brings down the inflation rate; the next month exporters scream about losses due to rupee appreciation, and RBI steps back in and buys dollars to keep the rupee weak. This time it sterilises its intervention to prevent inflation and raises the Cash Reserve Ratio. But now interest rates go up. Households and firms scream about higher interest rates and RBI stops intervening and liquidity hits the economy. The cycle starts all over again. 

One way to manage both the exchange rate and inflation is to go back to being a closed economy. However, as the Prime Ministers Economic Advisory Council report notes, any restriction on foreign investment  FDI or FII  will be ad hoc and most unwise. Policy continuity is an essential element to initiate and maintain such flows. 

Can restrictions on debt flows such as external commercial borrowings (ECB), which are allowed up to a gross limit of $22 billion, help? In 2006-07, $473 billion entered India. Of this, $21 billion was on account of ECB. The impact of blocking ECB can only be marginal. Today if India opts to restrict dollar inflows on a serious scale, it can be done only through very drastic restrictions on investment and trade, with drastic implications for Indias economic growth. 

In addition to growth, globalisation has also meant a much larger flow of foreign exchange in and out of the country. Indias annual foreign exchange market turnover has grown to a gross of $6.5 trillion in 2006-07 from $1.4 trillion six years earlier. There has been a sharp increase in the average daily turnover in the foreign exchange market from $24 billion last year to $38 billion this year. This means it has become increasingly difficult to manipulate the rupee. The amount of dollar purchases required to make an impact on the price of the dollar is higher when larger volumes are involved. 

In end-October 2006 the rupee stood at Rs 45.47 per dollar. From November 2006 to July 2007, RBI purchased about $28 billion in the foreign exchange market, an average of $3 billion per month. Despite this, the rupee moved to Rs 40.77 per dollar by end-July. If the rupee is to be kept weak, increasing amounts of dollar purchase will be required. If this is unsterilised, it will result in inflation. If it is sterilised, it will result in higher interest rates and lower investment. Considering that investment (not exports) is the biggest engine of growth in the Indian economy today, intervention, whether sterilised or not, is a very costly option. Instead of helping GDP growth through higher exports, it could reduce investment and growth through higher macroeconomic instability. 

The government must recognise that it cannot have it all. It must decide where it wants to be two years from now and take steps to get there with the least pain. If investment and low inflation are to take precedence, it must move towards greater currency flexibility. A road map towards a consistent monetary policy framework needs to be created. RBI would have done the government a favour by laying it out in the credit policy. However, the responsibility lies with the government. These are after all political choices. The government must now act.


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## Bushroda

*India is now waking up to tackle the big bucks* 
By Andy Mukherjee 

Excess liquidity may disappear, reappear, or turn into a drought. Banks will simply have to live with not knowing which of the three it might be tomorrow. 

The Indian authorities may have finally become serious about mopping up unwarranted liquidity in the banking system. With RBIs announcement of a 50-basis-point increase in the ratio of deposits that lenders have to keep with it as unremunerated reserves, the call-money rate may now rise from the 0.17 per cent level it fell in the week to July 28, 2007.

Overnight rates hovering near zero in an economy thats growing at a nine per cent annual pace, and where inflation may be simmering just beneath the surface? That wasnt just ridiculous; it was plain dangerous. 

Had it gone on for some more time, bankers would have judged the excess liquidity to have become permanent. Part of it would have then been funnelled into the overheated property market, jeopardising the central banks efforts to slow down mortgage demand.

Banks are itching to cut home-loan rates, which have risen two percentage points this year because of monetary tightening. Already, high borrowing costs are pushing up delinquencies in unsecured personal loans that are usually the first ones to witness defaults by households with stretched mortgages.

If banks cut lending rates prematurely, credit growth may pick up speed again. Inflation, which accelerated to a six-week high in the week to July 14, may not be tamed without raising interest rates. Although an eighth quarter-point increase in the policy rate since October 2005 may not derail corporate investment growth, it would still be entirely unnecessary. The liquidity glut has been caused by foreign inflows that havent been sterilised, or absorbed by the central bank.

*Lower absorption*

U.S. dollars brought into the country by foreign investors and local corporate borrowers have been bought by the central bank to keep the local currency from rising. In the first five months of the year, such purchases amounted to $23.5 billion. But the rupee funds released into the banking system in the process havent been neutralised by bond sales.

In a July 16, 2007 note to investors, Peter Redward and Puay Yeong Goh, economists at Barclays Capital in Singapore, estimated that less than a third of the foreign inflow into India in the second quarter was sterilised. Since June 8, 2007, the figure has plunged to just nine percent, the Barclays economists said.

Every hedge-fund manager investing in India knows the near- zero rates will have to rise. And they are betting that they will rise through an appreciation of the exchange rate: The central bank will simply have to stop buying dollars, so that it has less domestic money to mop up.

The sloshing liquidity has thus become a lightning rod for currency speculators, who are emboldened by a renewed interest among investors to allocate capital to India funds.

*Budget Deficit*

More overseas money heading into Indian equities will push the Reserve Bank to choose between keeping the exchange rate steady (by buying dollars), or controlling inflation (by not buying dollars).

The only way the Reserve Bank can control both inflation and the exchange rate for any length of time is if the government is willing to take a hit on its budget. Even on that count, there seems to be a lack of urgency. 

The Finance Ministry has imposed a limit of Rs 1.1 trillion ($27 billion) on the total stock of bonds and bills, the central bank can sell. This is inadequate and must be increased to at least Rs1.5 trillion, say Redward and Goh. 

Since the government will have to pay interest on these bonds, it is hesitant. But without the central bank possessing the ammunition to sterilise every rupee of liquidity released by every dollar purchased, it can never make the currency speculators go away.

*Many Constraints*

The authorities want high growth, low inflation and a stable, preferably undervalued, currency. And they dont want to pay for it explicitly. Into the bargain, what has been allowed to drift is liquidity. 

The overnight index swap, which has a floating interest rate tied to call-money levels, fell more than two percentage points between April 27, 2007 and July 23, 2007.

The increase announced on July 31, 2007 by the Reserve Bank in the cash-reserve ratio (CRR) will help mop up liquidity in the short term. 

It is, however, neither a permanent fix, nor a free lunch: Preemption of bank deposits by the central bank acts as a tax on the banking system and erodes its competitiveness.

*No end to volatility*

Overnight adjustment of banking-system liquidity doesnt quite work in India. When money is loose, just like now, the central bank is loath to drain the lot overnight because of the obligation to pay six per cent on these funds. So it decided in March, 2007 to limit its daily borrowings to Rs 30 billion. That ceiling on absorption will now be scrapped, the Reserve Bank said on July 31, 2007.

When liquidity in the system becomes tight, a different limitation kicks in: Banks arent able to borrow from the Reserve Bank even if they are willing to pay the asking rate of 7.75 per cent because of a shortage of collateral. 

Thats because they have to set aside 25 per cent of their deposits in statutory liquidity, or government securities that dont qualify as collateral. With all these constraints, an end to the volatility in the overnight rates isnt in sight. Excess liquidity may disappear, reappear, or turn into a drought. Banks will simply have to live with not knowing which of the three it might be tomorrow.


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## Bushroda

*Will Egypt become the new India?*
7DAYS, United Arab Emirates
Monday 06 Aug, 2007

Egypt has set its sights on grabbing a share of the multi-billion dollar Indian-dominated call centre market and is looking to an unexpected corner for a helping hand  India. As it makes its pitch to the world, touting a multilingual workforce over Indias English-speakers, a time zone shared with Europe and proximity to the US, Egypt is marketing its edge over India to India itself.

The government has sent a high-level delegation to India to convince the IT behemoth to sub-outsource its outsourcing to Egypt. Several co-operation agreements and memoranda of understanding were signed between the two countries, and Indian industry giants such as Wipro and Satyam have signed agreements to set up support centres in the Middle-East nation.

According to industry experts, Egypt is 15 to 20 years behind India, which has boomed to dominate 60 per cent of the overall offshore market. But the south Asian giant struggles to maintain an adequate supply of skilled workers, and handing some of the pie to Egypt could be mutually beneficial, Egypt says.

The Information Technology Industry Development Agency (ITIDA) was set up by the government of technocrat Prime Minister Ahmed Nazif in 2004 to guide Egypts burgeoning IT industry and propel it onto the world stage. The government hopes to entice major IT players to set up their call centres, accounting and payroll management  known as business process outsourcing (BPO)  in Egypt, pumping resources into an industry it hopes will elevate the national economy.

This sector will lead to a renaissance in Egypt, ITIDA CEO Mohamed Omran said. So will Egypt become the new India?

Absolutely not, said Omran. We cannot compete with India, we dont want to compete with India, we want to cooperate with India. Its what makes the most sense, said Mai Farouk, an IT analyst. It would help the industry grow and elevate its standard, said Farouk, but she fears that the lack of a formal analysis of Egypts IT experience so far could send the country down the wrong path. There has been no thorough analysis of the Egyptian experience, she said.

Far from the clutter of Cairo, the government has allocated a vast expanse of desert to the highly marketed Smart Village, a gated compound built with state-of-the-art technological services. The lush techno park already houses industry giants Microsoft, Vodafone, Ericsson and Alcatel among others.

Sherif Bakir, head of retail at Vodafone Egypt, says the Smart Village has been very enticing for investors as well as new recruits. Young graduates in Egypt are attracted by so many factors in the IT industry: the prospects of a career, the salaries (which are four times that of the average starting salary in this country) and the opportunity to work somewhere like Smart Village with all its benefits, he said.

Nevertheless, critics say Egypts outsourcing boom wont develop into more than a boutique industry, with the much-touted multilingual and skilled human resource pool amounting to a tiny percentage of Egypts 76 million population.

The ministry of communication and information technology is, however, trying to attract foreign companies with a special focus on call centres, by offering five to ten-year tax exemptions, branding Egypt as a safe oasis in a troubled region.


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## Bushroda

*Impact of social changes on financial behaviour* 
By Rajesh Sud 

*The changing face of the Indian society is bringing with it new challenges and opportunities.* 

India has come to be known, around the globe, as a nation producing value-enhanced superior, trained human power. Indians have made their mark in the field of information technology, biotechnology, pure sciences and economics.

The globalisation of the job market, demand and acceptance of Indian skills worldwide has opened up opportunities for creation of new jobs within the country, particularly back office operations of multinational corporations. 

Furthermore, the service sector in India is also witnessing robust growth. This flat world is bringing a confluence of culture and new lifestyles across India. Emerging lifestyle trends have altered the fabric of the Indian society and have also modified the social and financial behaviour. 

To identify the reasons for shift in tastes and preferences of Indian consumers from traditional and conservative looking product lines to more varied, modern and liberal assortment of commodities; a few critical trends are enumerated and some may be appreciated:

*Households making way for nuclear families

*Increased mobility especially for career 

*Increase in number of working women and they want a career while managing a family.

*Increasing tendency to spend on fashion, health, fitness, education, etc, attributed to increased incomes, 

societal factors and independence from parental pressures.

*Changing values* 

These emerging trends are more pronounced in Metropolitan cities because of availability of a broader range and better quality of products and services. Overridden by guilt over protracted absence, fatigue or work pressures, the parent-centered family has changed its orbit and become child-centered. For most families cultural values were imparted to children by grandparents, but with increased urbanisation, values are now self-acquired. Technology has filled the void of grandparents. 

With joint families disintegrating, the social and financial responsibilities have to be shared by the husband and wife. The joint family used to act as a protection against the impact of any untoward incidence in the family. That natural protection now needs to be replaced by financial planning to protect against economic shock and steady inflow of finances to manage old age needs and any unplanned expenditure.

The India Financial Protection Survey- an all India survey conducted in 2006 across 63,000 households, confirms the change in financial behaviour. It is seen that 82 per cent households save for emergencies and 69 per cent of the households save for old age.

Parallely, a trend is seen in increasing literacy and education levels. There is increasing inclination to provide quality education for children. The survey also revealed that 81 per cent of Indian households save for children education, a reason second only to emergencies. Seventy nine per cent of rural households also save for children education which clearly points towards the growing awareness of providing quality education to children. 

*Gender bender*

Career opportunities and better education has provided women greater financial and emotional freedom; this has leveled the playing field on the domestic front. However, this change in social standing of women is more evident in urban India especially in upper income groups. Conversely, gender discrimination is still rampant in major sections of the society, which acts as a major impediment in acquiring basic education and social skills. 

Uneducated women are increasingly vulnerable to poverty and exploitation. On one hand this brings the need for change in the outlook of the society, on the other there is an increasing need to make women financially independent to have the status of equality in society. Financial services sector including life insurance can play an important role by developing products specifically designed to meet the requirements of women. 

Life insurance is also helping women in urban India through micro entrepreneurship initiative where women can have the flexibility of managing their time and still earn to be financially independent by being distributors of insurance. Further, as employees in the same sector, great opportunities especially in sales, training and servicing are on offer for women. The initiative needs to gather momentum both in rural and urban India to bring a lasting change in the social structure of Indian society.

*Info on demand*

Technology has also made a significant impact on the lives of consumers. With television and internet reaching to rural India also, people are more informed and their aspirations have changed. The urban-rural divide is fast fading and the aspirations of rural India are almost similar to their urban counterparts.

But this does not mean, what will work in urban India can be replicated in rural India also, there is a need to understand the consumer behaviour, needs of rural India and develop products, distribution channels and communication media specially to address those needs.

In rural India lies a massive potential waiting to be tapped, what urban India makes up in value, rural India will substitute in volume. With almost 70 per cent of India residing in rural India and almost 50 per cent of our Gross Domestic Products (GDP) contributed by rural economy, it is time that corporate India work overtime to develop and provide products and services better suited to the needs of rural India. 

The changing face of the Indian society is bringing with it new challenges and opportunities. It brings to forefront a new India, where women and children will gain more importance, where rural India will have the purchasing power, be more demanding and where products and service offerings would be tailored to suit this new set of consumers.


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## Bushroda

*Spreading the net wide*
6 Aug, 2007, 0114 hrs IST,Pramugdha Mamgain, TNN

The Net casted its net on him, and he became an ally in casting it on others. "I had a dream of connecting my country to the outside world", says Dinesh Agarwal, 37, the founder CEO of India's one of the biggest B2B portals Indiamart.com. 

Born in New Delhi, Agarwal showed little interest in his traditional family business of fertiliser trading and operating petrol pumps. The Internet revolution had just started gaining momentum in the US, and after completing his B.Tech from Kanpur's Harcourt Butler Technological Institute, he left for the US in 1992. 

For the next three years, Agarwal worked with companies such as HCL America, Bank of America, and Centre for Development of Telematics (CDoT), in the field of development and testing of system software for networking, database and telecommunication. But, deep down, something was missing, he says: "Though I was doing well, I was not satisfied internally. I wanted to do something for my own people." So, in 1995, he came back to India to chase his dream of connecting Indians to the world. 

In 1996, armed with Rs 40,000, Agarwal began Indiamart, a B2B portal from his home in Delhi with a team of just three people. It was an online marketplace, for buyers and sellers to communicate and transact with each other, and the objective was "to open the doors of the global economy for our small exporters and importers". 

Starting the business and choosing people with sound technical knowledge was a major challenge as the Internet hadn't gained widespread acceptance. To address this, Agarwal launched a training portal 'Intrauniv' to familiarize more people with the Internet and its potential. Since during that time, Indian small and medium enterprises (SMEs) were not fully exposed to the business benefits of the Internet, Agarwal also offered free listing and query forwarding through his online marketplace. Clients were charged an annual subscription fee only for the product catalogue that the company made for them. And this is how Indiamart's business model still works. 

But there was another roadblock  many exporters and manufacturers did not have access to a computer. So Agarwal created a service, where his team gathered overseas trade enquiries, got them printed and distributed to the respective suppliers across India. "That was the first time we started promoting the Indiamart.com brand," says Agarwal. 

By the end of the first year of business, Indiamart was a Rs 6 lakh company. Almost 100 paid clients and 5,000 free clients had registered on the portal. With an efficient distribution network in place, Agarwal hit the first million in 1997-98 itself. And he celebrated it in style with a rain dance party, for his employees. "We had lot many parties after that but that party is still cherished and remembered. I also took my family out to Nainital for a week." 

With the dotcom boom happening, Agarwal looked at expansion avenues. For two years, he ran Auto.india.mart, which was targeted at consumers and had information about the latest products available in the auto sector. But that venture didn't work out. "Since it was not doing well, we started focusing on our original business," he says. 

By 2001 Indiamart was going strong and was featured as the only profitable online portal in a leading national magazine. But then the portal hit another big bump. The day after the foundation of Indiamart's new corporate office in Noida was laid on September 10, 2001, the World Trade Centre in New York was attacked. 

"We lost touch with the US economy for almost an year. But that didn't stop us from growing. We continued to grow, though slowly, thanks to my family and colleagues. And that was the year when my company witnessed lowest attrition," says a beaming Agarwal. 

Now, Indiamart employs over 800 employees in 24 locations across the country and has also forayed into online gifts and shopping with Indiangiftsportal.com . The journey to make Indiamart a 30-crore company was fraught with its own challenges, but as Agarwal puts it, "One should have the courage to fight and fulfill one's dream."


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## Bushroda

*Educational reforms a must* 

We have done exceptionally badly in the area of developing skills in the past and this will prove to be a constraint towards achieving growth rate of 9 per cent. 
To become a world economic power, should talent building be the new mantra for India? Yes, but present systems need to change. Reform in the educational system is a must. Be it is schools, colleges or technical institutions. 

According to top corporate bodies and experts, India is woefully short of workforce in spite of us being a nation of over a billion people. Though the Confederation of Indian Industry (CII) estimates a booming economy with about nine per cent GDP growth annually, it suggests that the country will require a two-fold increase in the present skilled workforce. A recent study reveals that of the existing 8.5 million work force, about 30 per cent will retire in the next five years. 

It is feared that inequity in the demand-supply of manpower will present itself in diverse industry verticals such as IT, retail banking, manufacturing, logistics, infrastructure and management due to lack of quality workforce, absence of vocational training and job hopping. 

The mismatch between demand and supply of the manpower in industry is due to shortage of employable graduates, say statistics. As the Indian GDP is estimated to double to $ 3.6 trillion from present 8 billion current capacity, the capacity building to create talented workforce and meet the targets is a challenge faced by all stakeholders, especially in industry, academia, government and civil society. 

"Talent creation and management have become the most critical business process for India," is the CIIs forecast. This is dittoed by a NASSCOM/Mc Kinsey estimate, which states that in the next decade, shortage of skilled workers will be staring the Indian industry in the face. 

Its report on talent supply said that India would need a 2.5 million strong IT and BPO workforce by 2010 to maintain its current market share. It projected a potential shortfall of nearly 9.5 million qualified employees, nearly 70 per cent of which would be concentrated in the BPO industry. 

Most telling views in this regard have been aired by the Planning Commission Deputy Chairman Montek Singh Ahluwalia, who had inter alia warned that this shortage could prove a "major bottleneck" in achieving higher growth targets in the coming years. "We have done exceptionally badly in the area of developing skills in the past and this will prove to be a constraint towards achieving growth rate of 9 per cent", he confessed at an Employment Summit. 

"Current skill development is inadequate and we need employment-linked degrees. We will scale up the programme to upgrade and modernise the Industrial Training Institutes (ITIs) to improve both their quality and quantity of training. Private sector has a major role to play in delivering job-related training because private colleges are more flexible in curriculum development than government institutions." 

According to NRI industrial tycoon, Swaraj Paul, "If India is to maintain the momentum of its economic miracle and ensure that benefits reach all Indians then change and reform in the overall education system is a must" Delivering a lecture at an Indian University he was firm that the country was poised to become a world economic power. However, to achieve this goal, change was necessary; and that "without reforms in education, reforms in economic field will be incomplete."

Indeed, for long there has been a clamour for transforming the present 'static' education system into a dynamic and creative regime. Different perceptions have been advanced touching different aspects of development of students in this regard. 

Looking at the problem from an economic angle, Paul recommends: Reforms in education must recognize the reality of globalization. India must respond to the needs of the economy and the demands of the students for modern and relevant educational programmes that will equip them for employment and the challenges of New India and a globalised world economy. 

Besides, there is need for access to higher education for more students and teaching of new subjects. Indian Universities, according to him must emulate the U.K. experience, take courage to develop new subjects and challenge traditional ideas. 

So far so good, viz the economic development of India. But there is another basic angle to education reforms. It concerns the environment in which the talent and personality of students can be best developed to cope with the future challenges in any sphere of work. 

Recent media reports point out that the National Council of Education Research and Training (NCERT) is preparing a revolutionary concept viz "dynamic time schemes." It aims at using the school time more creatively. 

Time table in schools across the country is set to change beyond recognition. Students will no longer have to sit through a succession of 35-minute periods mugging lessons from the blackboard. The NCERT is said to be set to replace the "time table" system with concept of "time packaging"--- a flexible schedule involving students' activities, time for self-study and even trips beyond the school bounds. 

NCERT had already begun collecting feedback from schools on the time management system and hopes to introduce it from 2008-2009. "The rigidity in the education system is best portrayed in the school time table. Our aim is to make time management an essential aspect of academic planning and bring flexibility and variation in practices." 

The dynamic time scheme will allow kids to choose the subject they would like to study on a particular day. If they wanted to learn about water the topic would be included in discussions on subjects like math, science, social science, health and hygiene. The system plans to use school time more creatively. So, instead of students just sitting in class and listening to instructors, time could be set aside for them to clean, sing together, listen to a guest talk, put up display boards in classrooms or enjoy the weather outside the school premises. Let's start at the very beginning.


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## Bushroda

*More than two crore jobs are on the way*
5/8/2007

The resurgence of Indias manufacturing sector in the past last few years has been quite magical. Not only have profits been soaring, but the sector is also witnessing increased employment opportunities and is fast spreading its roots abroad. Many Indian manufacturing firms are today close to becoming true-blue multinationals.

It was only after 2003 that the sector started seeing strong development, with technology revolutions, liberalisation and globalisation. This was the time when Indian manufacturing displayed a sturdy rise of more than 9 per cent, thus ensuring more employment opportunities.

Elixir identifies the following four segments to be the major ones in the Indian manufacturing industry for contribution to overall sectoral growth and employment generation rate. 

1) The auto components market, which is growing at 15 per cent a year. Exports have grown at a compounded rate of 19 per cent.

2) The textiles and garments segment, which is one of the largest employers and thus important for the Indian economy. 

3) Pharmaceuticals, with growth rate of 6-8 per cent over the last two years, continues its sturdy progress.

4) Engineering goods, too, have emerged as a dynamic segment in the countrys industrial economy.

Based on the rate at which foreign investments are proceeding, industry specialists have noted that nearly 10 million people will join the manufacturing sector work-force annually and about 25 million new jobs are to arise in the segment by 2015.

India has a big advantage when it comes to cost-effective labour and highly skilled manpower, and this has led to foreign majors either announcing plans to set up large production units here, or outsourcing of manufacturing to the country. 

Our rich domestic raw material base adds to the potential. Our estimates say the country will have 25 per cent of its population in the 25-30 age group by 2020. Also, the high percentage of our English speaking population, managerial excellence and existence of strong technological capabilities have their own major contribution to make.

With the hiring intentions of companies being lot more open now, the sector has recorded a net employment outlook of 40 per cent, which is a rise of 15 per cent over the previous year.

However, there are big challenges facing Indian manufacturing. To address these, the government and the industry need to put in efforts, preferably through a well-designed public-private partnership mode on increasing competitiveness.


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## Bushroda

*Starbucks may take 2 yrs to enter India*
3 Aug 2007, 0250 hrs IST,PTI

NEW YORK: Coffee lovers in India may have to wait up to two years to savour the Starbucks brand, with the Nasdaq-listed world's biggest coffee retail chain revising its plan to open its first store in the country. 

Starbucks, which was earlier eyeing its India foray by the end of 2007, withdrew a application on July 19 to operate single brand retail stores and said it was postponing its India plans without giving a time-frame for future plans. 
However, the company's COO and international business head Martin Coles said Starbucks now planned to open its India stores in "the next year or two". 

"We recently withdrew our application to enter India as we refocus our efforts in Asia Pacific, which is a key region for our company, but we remain excited about the potential of this country (India) and plan to open that market in the next year or two," Coles said. 

Starbucks reported a 20% jump in quarterly revenue to $2.36 billion. It also announced plans to open 2,600 new stores in FY08, an increase of 200 from this fiscal's target. Its international revenue rose 28% to $432 million in the quarter. 

International store openings will accelerate while the US store openings will stabilize at 2007 levels, Coles said. "Our International business is still in the very early stages of expansion and represents a tremendous source of growth for the company," Coles added. 

Starbucks has 4,000 stores overseas, still very far from the long-term target of at least 20,000 stores outside US, he said. After withdrawing its application last month, Starbucks said it was reviewing all options and evaluating how it will foray into one of the fastest growing economies in the world. 

When asked what was the time-frame Starbucks was looking at regarding its revised plan for India, a company official had earlier said it was premature to announce any new dates. 

There have been reports that the decision was due to expectations of a change in regulations concerning FDI in single-brand retail, but the company did not comment on this. 

At present, India allows up to 51% FDI in single-brand retail. The company had first announced its plans to enter India in 2006 and sought approval from government authorities for its proposed venture through the FDI route. 

It had filed a revised application later on April 13, 2007 with a restructured equity structure nearly three months after its previous application was rejected, apparently due to foreign holding exceeding the 51% cap. 

Late last month, Indian authorities told Starbucks to file a fresh application due to lack of clarity over the proposed equity structure and subsequently the company asked them to hold back its application for the time being.


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## Bushroda

*Manufacturing registers 10% growth in Apr-June*
6 Aug 2007, 0423 hrs IST,PTI

NEW DELHI: Resting fears of slow down in Indian manufacturing sector, a recent survey by industry chamber CII finds out that most companies in the segment recorded a double digit 10% growth in the April to June quarter. 

In its quarterly industry survey CII said, out of a total of 101 manufacturing sectors 23 have recorded an excellent growth of more than 20% while as many as 27 sectors recorded a high growth rate of 10-20%. 

Nearly 36 sectors registered moderate growth rate in between 0-10%. However, 14 manufacturing sectors reported a negative growth in the quarter. 

The percentage of sectors in each category remained almost constant during the period, which reaffirms that Indian manufacturing is on track. "It is good to see that 50% of the manufacturing sectors have shown above moderate growth despite various pressures in terms of the appreciating rupee and hardening interest rates," CII industry council chairman Satish Kaura said. 

The industry body said sectors like cold rolled steel strips, pig iron, textile machinery, industrial gases, electric fans and microwave ovens were amongst a few, which reported excellent growth during the quarter. 

The electric two wheelers segment was the latest entrant to the list of sectors, which reported exponentially growth. The sector grew over 100% during April-June. The survey said three wheelers and motorcycles sectors have also shown a good growth on the export front.


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## Bushroda

*'Rural FMCG market to grow faster than urban'*
6 Aug 2007, 0424 hrs IST,PTI

NEW DELHI: Fuelled by growing fascination of youth towards the fast moving consumer goods (FMCG) and rising income levels, the FMCG market in rural and semi-urban parts is likely to grow at a faster pace in the next three years while the urban areas may register a drop in growth. 

"The rural market contributes 52% to the total FMCG market in India, which is expected to grow by 10% by 2010, driven by 180 million young population," an Assocham statement said. 

The semi-urban market is expected to grow by 6% in the next three years and contribute 21% to the country's total market, up from 19%. In chamber's view, in urban India the market size is estimated at 29% which is likely to come down to 22% by 2010 as consumers are becoming more health conscious and shift away towards adoption of organic products. 

The study says that growth in rural and semi-urban market will be mainly due to rising population of youngsters, which has already touched 180 million, and has special attraction for FMCG products. 

As per estimates, the size of domestic FMCG market in volume terms is $15 billion, of which $7.9 billion come from rural areas and $2.85 billion from semi-urban markets while metros and other cities contribute $4.2 billion. "The government's permission to 100% FDI in FMCG will further fuel the growth in rural and semi-urban India," Assocham president VN Dhoot said.


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## Bushroda

*Turning the wheels again*
August 05, 2007

Software is great and business process outsourcing is wonderful. But the trouble is that you cant eat software or wear a BPO product. 

Indias economic buzz in the past decade or so has been about knowledge-based service industries. But it is important to remember that the nation of 100 crore people whose economy is growing at 9 per cent needs things that people wear, ride, use or eat. So the manufacturing industry may have lagged behind the glamorous white-collar service industry in recent years, but it is central to an economy.

What this means is that jobs and careers can be sought, if you are technically inclined or believe more in work connected with touching and feeling things. The industry consists of establishments engaged in the mechanical, physical, or chemical transformation of materials, substances, or components into new products.

According to skills measurement agency MeritTrac, the percentage of people employed in manufacturing is expected to increase to 21 per cent by 2020 from the current 19 per cent. The industrial sector as a whole contributes a little over 27 per cent to Indias gross domestic product, and of this, the manufacturing industries contribute around 15.5 per cent.

While China is emerging as a global leader in the industry, India has its own manufacturing story. Indias manufacturing sector recorded a growth of around 12.3 per cent in 2006-07, steadily rising from 6.6 per cent in 2003-04. Industry was sputtering for about eight years since the mid-1990s. Manufacturing, too, began to suffer. 

But many of its segments have bounced back since then. Cheaper finance, more liberalisation, a growing population, newer technologies and focused management have helped many of these turnaround stories.

According to a study by HR consulting firm Elixir Web Solutions, the rate at which foreign investments are proceeding nearly 10 million people would be joining the manufacturing sector workforce annually till 2015.

"This will follow the pattern of more and more people moving into the manufacturing and service sector activities from agriculture and farm activities. This will further have a direct impact, as salaries and incomes will see a definite rise, hence augmenting the standards of living," the study says.

The flip side is that Indias vaunted demographic dividend can become a demographic deficit due to a shortage of skills.

"The challenge lies in harnessing the productivity and nurturing the potential talent pool to avoid turning the dividend into a liability. Skilled Indian manpower will be the countrys legal tender of the world," Lt Gen (retd) SS Mehta, director-general of the Confederation of Indian Industry, told Hindustan Times.

A Federation of Indian Chambers of Commerce and Industry survey said that shortage of skilled, semi-skilled and unskilled workers have emerged as a critical factor impacting the competitiveness of Indian industry.

Experts say the segments that would require the maximum number of jobs would also see the largest shortages. Those that are expected to hire the most include food processing, oil and gas, textiles, mining, heavy engineering, automotives, plastics, chemicals and petro-chemicals, paper and glass.

The emergence of special economic zones (SEZ) is also expected to drive growth in manufacturing employment. In the next five years, investments by SEZ developers are expected to be over $60 billion (Rs 2,40,000 crore). According to estimates of the Union commerce ministry, the over-350 SEZs are expected to provide direct employment to over 4 million people.

During 2006-07, FDI (foreign direct investment) equity inflow reached a level of $16 billion  a 185 per cent increase over the previous year. Such investments will also directly or indirectly create manufacturing jobs.

Manufacturing can be suitable to those who enjoy working in factories, dealing with machines or designing or dealing with assembly lines. Building skills for that would be at the heart of a career in manufacturing.


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## Bushroda

*Booming India creating jobs in US* 
Sandeep Phukan
Sunday, August 5, 2007 (Seattle):

In recent times a rapidly growing Indian economy has actually meant job opportunities for many in the US.

In the past outsourcing has been a big political debate in the US.

Those who opposed it argued that countries like India, a preferred outsourcing destination for US companies, were eating into the American job market. But that's changing now. 

The President of Boeing commercial Scott Carson hosted a private party on a luxury yacht in Seattles lake Washington. A gesture for a very special guest of honour Air India. 
After ordering 68 planes estimated to be around $7 billion, Air India is now Boeing's most valued customer.

This is the biggest ever order by any airline to Boeing in the past few years," said V Thulasidas, Air India CMD.

Air India is a special customer also because it will be one of the first to use the 787 Dreamliner, the most modern plane from the Boeings table.

*Reviving fortunes*

For the plane manufacturer, it means a ready customer for a product that's only going to be launched in September. Just the sort of deal Boeing needed to revive its fortunes.

Each of these planes cost $260 million. That's a lot of money to Boeing and United States and the jobs it creates," said Dinesh Keskar, Vice-President, Air India.

Boeing and United States both have reasons to celebrate. After 9/11, airlines like United Airlines collapsed. There was an aviation meltdown the world over.

Boeing's fortunes dipped too. The 220,000-strong workforce came down to 140,000 retrenchments and job cuts were the order of the day.

But all that's changing now. Boeing's on an upswing hiring more people and their order book is full for the next five years.

And quite clearly India has a role to play. Air India, Jet Airways and Spicejet are all lining up in Seattle.

In India in the next five days we will be delivering six news planes to Indian carriers. It will be a historic thing for us," said Dinesh Keskar.

Seattle is at the center of interesting employment debate. Seattle is home to IT giant Microsoft. 

Now when you think of Microsoft you think of IT, you think of outsourcing. 

The picture that you have of India is not very positive one. But then there is the other side of the story at the Boeing factory. 

Thanks to the aviation boom in India, more and more Indian carriers are ordering planes. Now that simply more jobs for America.

Many argue outsourcing has worked for both India and US.

Here's how this year India's IT industry earned a revenue of $ 39 billion and a majority of this came by exporting services to US-based companies.

*New found wealth*

This new found wealth has thrown up a new Indian middle class who loves to travel by air, hangs out at American fast food chains and does not mind splurging money on branded products, many of which are imported from the US.

Globalisation is not a one way traffic. India is a big consumer. Our purchasing power is increasing. We will be buying more equipment," said Jayanta Bhuyan, Deputy Director General, CII.

Companies like Boeing, whose military wing is only too keen to sell its F-18 fighters to the Indian Air Force, argue the Indo-US nuclear deal will only help business ties.

The challenge is to understand two biggest democracies who are culturally very different. How to bring them together," said Scott Carson, President Boeing Commercial Planes.

So far, Seattle's India connection has been Microsoft and Boeing. But now after the Indo-US nuclear deal finally sealed many new opportunities are likely to open up.


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## Bushroda

*Dabur eyes Pak's drug market*
6 Aug 2007, 0418 hrs IST,PTI

NEW DELHI: Stepping up its overseas expansion, Dabur Pharma has made a foray into the anti-cancer drug market in Pakistan and Turkmenistan. 

"Increasingly, our focus is to expand not only in the developed markets but also in emerging ones. Recently we have started exporting our anti-cancer drugs to Pakistan," Dabur Pharma additional director and non-executive chairman Mohit Burman said. 

The move follows the Pakistan government allowing imports of anti-cancer drugs from India since last month. The country's health ministry has already granted permission to two companies  Atco Pharma and AJ Mirza Pharma to import from Dabur Pharma. 

Besides Pakistan, in the first quarter of the fiscal Dabur Pharma had also started dispatches to Turkmenistan from its dosage form manufacturing unit at Baddi in Himachal Pradesh. With the next generation of Burmans being given more responsibility of running the Dabur empire, its pharma division is also on the prowl for acquisitions abroad. 

"Similar acquisitions like the one we did in Thailand are a possibility in key markets, which we have identified," Burman said. Dabur Pharma had acquired sales and distribution network of Biosciences and the company's drug Intaxel became the first ever generic oncology drug to cross 100 million Baht sales mark in the country.


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## Bushroda

*Online retail spreads its net*
6 Aug 2007, 0416 hrs IST,Kavita Kukday,TNN

Here's no secret about selling online. It's a simple three-step formula: lure more users to your website, hook them on to your site and see profits soar. It's all about being able to drive more traffic by creating better user experience. Then when these new users finally show up, you retain their interest and finally convert their interest into a sale. 

But how do you get the traffic in the first place? 

Interestingly, online retailers are looking beyond traditional online advertising methods like search engines, banner ads and email marketing to lure online consumers. Many online entrepreneurs these days are finding gold elsewhereoffline marketing is what's helping them boost their online sales! 

*Real world doorway to online shop *
If you happened to notice the huddle around this tiny kiosk right in front of Big Bazaar at Lower Parel, Mumbai on January 26 this year, you'd know exactly what we are talking about. This was one of the first few offline experiments that Future Bazaar, the online arm of the Future Group, tried. And it was a runaway success. 

What they did was set up tiny kiosks in some key areas in various towns including Mumbai, Delhi and Hyderabad. These kiosks had catalogues of the merchandise that sell on their website. One had to simply walk into the kiosk, look at these catalogues and approach the sales people to place an order. These sales people in turn would log on to the Future Bazaar site and place an order for the items which would be delivered to the customer at home. 

What worked with the kiosks is the fact that although the sale was happening online, the consumer never had to log on to the web. This made them more comfortable while placing an online order. 

Although these kiosks were temporary initiatives, there is no denying their success. A normal retail outlet such as Big Bazaar has an annualised sale ratio of Rs 8,000 per square foot, while on sale days their annualised sale ratio can touch Rs 20,000 - Rs 25,000 per square foot. "But the kiosk did about 20 times more sales per unit of area as compared to the sale a normal retail outlet does even on sale days!" says Sankarson Banerjee, CEO Future Bazaar. 

Thanks to this success, Future Group is planning to make these kiosks a permanent fixture at various locations in suburbs of metros and tire-2 cities. 

*Wooing customers from smaller cities *
What prompted Future Bazaar to try this experiment? There are many facets to this, say analysts. The biggest factor is about location. As with brick-and-mortar retail, finding the right location is the most important factor for online sale too. Metros are important of course, but the real test comes when you are trying to attract non-metro customers. These customers are neither as tech-savvy as their metro counterparts nor do they have easy access to the internet. 

Take for instance a city like Asansol which is a three hour drive away from Kolkata. Here the population is rich enough to be able to buy expensive brands, but they don't want to drive all the way to Kolkata to buy it. Nor are they comfortable about logging on to the internet on their own to buy products. This is the kind of population these offline marketing plans target. And these strategically placed kiosks do exactly this. 

"Interestingly these kiosks helped us attract a very different kind of customer," says Banerjee. "For instance, a much larger percentage of women came to the kiosk than come online. We also saw people from different walks of lifefrom senior professionals to daily wage earnerswanting to take advantage of the offers available through this format," he adds. 

Ironically, these offline initiatives have been very successful in the metros too. Future Bazaar's experiment at the Lower Parel Big Bazaar for instance, saw large number of customers who had just finished shopping in the store come and pick up more products at the kiosk. "This is because the same customer will buy different things at different times inside a Big Bazaar and for home delivery," said Banerjee 

*Partners in the game *
Players like eBay have given a slightly different twist to the kiosk strategy. They are tapping internet cafes around India. 

"We have partnered with Reliance Web World in 100 Web Worlds in 16 cities with plans of scaling up this quarter to 140 Web Worlds in 24 cities," says Rathin Lahiri, CMO, eBay India. 

It works almost similar to the kiosks, the only difference being that the consumer goes to an internet cafe instead, where the cafe owner handholds her though the entire process of buying online. 

There is no denying the fact that even today, the most widely used window to the internet is still cyber cafes. According to IAMAI (Internet and Mobile Association of India) 24% of India's 50 million-odd internet users still accesses the net via pay-and-surf cyber cafes. So it makes superb business sense to have these cafe owners bring in newbies to your website. The strategy has worked for eBay India at least. 

"Reliance Web Worlds were among our top three new user acquisition channels for the year, says Lahiri. 

*Campaigning for more *
Then of course there is the good old print media that online players are reaping benefits from that. Like the Indiatimes ad campaign called 'Readers offers'. Here, Indiatimes would select a product each day and place print ads with a special price in frontline publications such as TOI or the Mumbai Mirror. These offers would also run parallel on the Indiatimes site (www.indiatimes.com). 

"The response so far has been brilliant. With this we managed to capture the entire readership of the print dailies which runs into lakhs of Indians," said an Indiatimes spokesperson. 

*Celebrity charm* 
Then of course there is the old trick of using celebrities to charm users into buying your product. eBay India has been running campaigns like 'Green House' that were heavily publicised in multiple channels such as radio and print ads. The campaign spoke about sports anchor Mandira Bedi decorating her house in Bandra with items bought only from the eBay India site. This worked wonders for the site, as people would log in to buy just the same products as Bedi. The number of hits soared for sections such as home décor and furnishings. 

The same went for the apparel section which now ranks among the top accessed sections on eBay thanks to the 'Style Diva' campaign. This saw thousands of users voting for Kareena Kapoor, Priyanka Chopra or Bipasha Basu as their best dressed style icon.


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## Bushroda

*P&G to enter Indian skin care market*
4 Aug 2007, 1740 hrs IST,PTI

NEW DELHI: US-based FMCG firm Proctor and Gamble (P&G) on Saturday announced its foray into the Rs 2,100- skincare market in India with the launch of a range of products including an anti-ageing cream. 

The skincare market in India has been growing at 16 per cent annually and is currently valued at Rs 2,100 crore. 

"With the launch of four new 'Olay' brand skincare products, we are want to establish a strong presence in the country," P&G India Marketing Head Sumeet Vohra said in New Delhi. 

The anti-ageing cream, Olay Total Effects, has been launched in six metros in the first phase and has been endorsed by former Miss Universe and actor Sushmita Sen. 

Vohra said the anti-ageing products market in India is currently at Rs 60 crore. It has doubled in the last three years and would continue to grow at a faster pace, he added. 

Globally P&G's personal care market is to the tune of 20 billion dollars, of which two billion dollars are contributed by 'Olay Total Effects'. 

Asked about the kind of market share the company is looking at in India with the launch of the new product, Vohra said the anti-ageing products market was still nascent in the country, so there was ample scope for the company to grow. 

"Initially 'Olay Total Effects' would be available at around 2,000 outlets including hyper retail stores, chemists, beauty advisors and the existing distributors in Delhi, Mumbai, Kolkata, Chennai, Hyderabad and Bangalore," Vohra said. 

The company has planned huge investment on electronic and print media including online promotion for publicity and marketing of the product.


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## Bushroda

*India Incs import intensity of exports slides as rupee rises* 
6 Aug, 2007, 0537 hrs IST,Tushar K Mahanti, TNN

Indian policymakers are facing a new dilemma. The rupee has been appreciating sharply against the dollar  it has appreciated by 11% since August last year  something they did not experience often in the past. A huge current account deficit in the US and steady capital inflows are expected to strengthen the rupee further in the coming months. 

The appreciation of rupee, of course, has come as no surprise. The mounting foreign exchange reserves over the years always had the potential for a stronger rupee and it was the intervention of the central bank that kept it from a dramatic rise. But even the central bank now finds it difficult to restrict the forward march of rupee. 

The question is: How will the appreciation of the rupee affect our economy? The immediate impact will be on our exports, economists argue. And if in terms of volume, exports do not suffer significantly in the short run, earnings will decline due to lower realisation in rupee terms. This is reflected in the fall in export growth in the current year. Exports have grown 18.1% in the first quarter against 28% targeted for the whole year. 

Exporters attribute the dip in growth rate to the appreciating rupee and have warned that the poor realisations due to appreciation of rupee is impacting their competitiveness, forcing them to cut down on their order bookings.The strengthening of rupee, however, has a brighter side too. As imported goods become cheaper and global competition gets intensified, corporate India will be pressurised to raise productivity. This will benefit the domestic consumers as not only the imported goods will be cheaper but the domestic manufacturers too will be compelled to cut prices to retain their market shares. 

But that will be in the future. For the present, Indian companies seem to suffer heavily from rupee appreciation as import intensity of exports is falling. An ET survey of 150 large companies finds that their import intensity of exports, measured as number of times imports as percentage of sales over exports as percentage of sales, has declined from an already low 0.87 in 2005-06 to 0.83 in 2006-07. 

What is significant is that the fall in import intensity of exports during this period was largely due to higher shares of exports in sales and not because of rise in the share of imports in sales. That is, although the companies will lose in export earnings due to appreciation of rupee, they will not benefit the same way from imports. 

The share of imports in sales has nearly stagnated at around 24%  up by only 0.6 percentage points from 23.7% in 2005-06 to 24.3% in 2006-07. The share of exports in sales at the other end has increased by more than two percentage points during this period from 27.4% to 29.5%. A stronger rupee is now feared to change the equation. 

The worst affected has been the engineering industry. The average import intensity of exports of 11 engineering companies in the list has declined from 1.31 times in 2005-06 to 0.90 last year. This was because of the sharp rise in exports  up by 80% against 24% rise in imports. 

The import intensity of exports of the drug and pharmaceutical industry, which was already very low, has declined further from 0.53 times in 2006-07 to 0.43 in 2006-07. But more than the fall in import intensity, what will probably affect the drug and pharmaceutical industry more is its dependence on the export market. Appreciation of the rupee will reduce its export earnings proportionately.


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## Bushroda

*Wanna attrition-proof your co? Go for expats*
6 Aug, 2007, 0105 hrs IST,Vivek Sinha & Chaitali Chakravarty, TNN

NEW DELHI: Want to attrition-proof your company? Start recruiting expatriates. They are anonymous, focused and not part of any old boy network. Indian employers are discovering that expats, apart from bringing capabilities scarce in the country, are also more reliable and seldom jump employment contracts. 

While many Indian professionals would dismiss this and say it is merely to fill gaps in the talent crunch economy, Indian firms in private agree that expats in key positions bring stability in operations. In the past two years, expats have come in large numbers, especially in sectors like oil and gas, energy, construction, training, aviation design and retail. 

Hindustan Construction alone has 80 expats, Reliance Retail has about 100, AV Birla Retails top operation team comprises mostly expats (it has around eight) and Daburs health and wellness retail project is headed by an expat who will be assisted by two more. 

Managing partner of head-hunting firm Transearch, Uday Chawla, says unlike senior Indian managers, expats are unknown faces, both for head-hunters as well as companies. They are not part of an alumni or any other old boy network. So, the chances of them being poached are that much less. 

For instance, the new expat head of Daburs retail venture, Peter Baker, feels that hopping jobs may not be possible as he is in India on a purpose. Also, he is unfamiliar with the market and its people. Besides, I am well taken care of, he says. 

However, the global head of Lee Cooper, whos also had a stint with AS Watson in Hong Kong, feels that expats have just started coming to India in large numbers and it may be too early to draw conclusions. 

But at the moment, the main reason for expats stickiness to jobs is related to work permits. When an expat is hired on a contract, the work permit is sponsored by the employer. While it is technically possible for the employee to cancel the current work permit and get a fresh one to be sponsored by the new employer, it almost never happens. 

Getting a new work permit in itself is a disincentive for switching jobs, says a head-hunter. This apart, the expatriate employee also sticks to the job for the project bonus  an effective tool to retain them. 

As Mumbai-based HR consultancy firm Cerebrus Consultants CEO Anita Ramachandran explains, While retention bonuses are there for Indian employees as well, they are compensated with a joining bonus by the new employer in case they leave before term. The big-packet joining bonuses are not common abroad because there are more people to do the same job. Also, Indias growth story allows the employer to pay huge sums as sign-on bonus. 

While this may be the case, HR heads agree that expats are quite conscious of their reputation. They know they are in India on a mission and any snafu would make the next assignment difficult to come by. But this is not to say they are more loyal than Indian professionals, says the HR head of AV Birla group, Santrupt Mishra. 

There is also the factor of market knowledge. Says BPO service provider OfficeTigers vice-president, HR (APAC), Vishal Mehra, Our experience has been that expatriates tend to stick to their jobs in India for any or all of the following reasons: theyre new to the country and therefore anxious about moving jobs, theyre not sure about the Indian job market to look elsewhere and theyve come to India on stringent contracts drafted in the US. 

By contrast, the average Indian employee knows the job market well, is familiar with the head-hunters and possesses greater brand awareness. So he is likely to get more offers and move, he adds. OfficeTiger, which was acquired by US-based RR Donnelley, has expatriates working across mid-senior levels. 

But there is also a flip side to hiring expats. They may not like the culture of the work place and since most of them are located in Mumbai and Delhi, they often complain of the harsh climates. Head-hunters say the phenomenon of getting expats with a specific strategy to ensure that he or she does not leave is observed in areas such as oil and gas, design and R&D.


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## Bushroda

*The Wild One machismo seems to be surrendering*
6 Aug, 2007, 0346 hrs IST,Moinak Mitra & John Sarkar, TNN

NEW DELHI: When a girl taunts a beret-capped, leather-strapped, Hog-hogging Marlon Brando in the 1953 Hollywood classic, The Wild One , with a What-are-you-rebelling-against? query, Brando shot back with darting eyes and a terse Whaddya got? That was attitude with a capital A, peppered generously with cynicism, that bikers over the years have imbibed and reflected. True, sales of motorcycles are down 14.5% in the first quarter and the roar is beginning to sputter with rising interest rates. 

But inflated interest and the exit of financiers from certain high-volume but risky markets alone dont quite justify the bumpy ride down south. Perhaps, the Brando-like attitude is changing and new riders would rather be safe than sorry. Or, is it more affordable four-wheelers with CNG and all? Maybe, more women in the workforce whod rather prefer to scoot to work than thunder in on a bike. ET pulls up by nosediving motorcycle volumes to get one up on the phenomenon. 

The 100-125cc commuter segment (Rs 30,000-Rs 45,000), the mainstay of the motorcycle industry until now, is the worst affected as manufacturers in the quest for better margins are focusing largely on high-powered bikes. 

From 1996 to 2006, motorcycle volumes grew from 0.8 million to 7 million, as the two-wheeler market (which also includes scooters) boomed from 3 million units to 8.4 million units in the same time frame. Clearly, motorcycles were the mainstay of the volume-driven two-wheeler market. But somehow the wheels are not clicking anymore. 

In the April 2006-07 period, scooters have registered 10.2% growth, whereas bikes are down 9.7%, although in sheer volume terms, motorcycles score over scooters, with 84% share of the 8.4-million odd units market. 

But its not only the stagnation thats cause for concern. An NCAER-Maruti Suzuki study conducted last year showed that there is a potential of nearly 1.14 lakh two-wheeler owning households switching to cars within three months from the date of the survey. Taking into consideration Indias bullish economy, that number would have increased manifold. 

An EMI checklist at this juncture between high-end motorbikes and basic cars reveals a narrowing gap too. Blame it, maybe, on growing per capita income and consumerism. So, the Bajaj Pulsar 180-cc bike costs Rs 63,621 in Delhi, and at 12% interest, over three years, the EMI works out to Rs 1,622 after a down-payment of Rs 22,000. 

The on-road price of a non-AC Maruti 800 in Delhi sits at Rs 2,13,856. This works out to an EMI of Rs 3,126 over seven years at 12% interest. Now consider the deal from Maruti True Value refurbished second-hand non-AC Maruti 800, which sports a Rs 1,25,000 tag. Interest rates are higher for second-hand cars. Given the 17% interest charged by True Value, on a three-year run, the EMI tots up to Rs 3,500, which over five years, sits at a paltry Rs 2,400. Bottomline, for many buyers, the difference between Rs 1,622 and Rs 2,400 is fading, and fast. 

Even a look at the rural-urban split of the motorcycle market is unfavourable to volumes. Almost 51% of the motorcycle sales in the country come from rural India, which largely comprises the commuter segment. However, financing options in rural areas is low and the industry figure sits at a paltry 30%, which was just 12% three years back. 

For the village folk, their purchasing power depends on rural prosperity, which is cyclical in nature. Moreover, RBIs Know Your Customer criteria is very stringent and hinders credit offtake. So financiers in rural areas have upped the ante as default rates have touched 3.5-4%, which is unacceptably high, says S Sridhar, CEO of Bajaj Auto. 

The tightening of liquidity alone hasnt hit motorcycle volumes. Apart from the growing second-hand car market, there is an anticipation of a Rs 1-lakh car in the horizon. Besides, the ownership of a car is a sign of arrival and four-wheelers enhance image and safety, says author-sociologist Ramachandra Guha. There are also more women in the workforce today resulting in a sharp offtake of scooterettes, which is seen as a sign of convenience for women. They can even wear a sari and ride a scooter, observes Mr Guha. 

For Honda Motorcycles & Scooters India (HMSI), its scooter offtake over the last one year has been encouraging. Since scooters are a means of comfort and convenience, the market is shifting toward scooters. Furthermore, the growth really is in automatic gearless scooters, which are unisex in orientation, says Sanjay Gupta, senior manager, marketing, HMSI. An in-house study by the company shows that 60% men buy its fastest-selling Activa scooters for co-use (both spouses ride). 

Add the scooter cannibalisation to the threat from the tube, and its a recipe for disaster for the commuter bikes. As per a Delhi Metro Rail Corporation (DMRC) urban study, since cars provide safe door-to-door service, car users are not likely to shift to the Delhi Metro. Therefore, typically, bus and two-wheeler users will make the switch. 

Delhi Metro carries 6.5-lakh passengers each day and around 70% of them are literate, says Anuj Dayal of DMRC. According to a recently conducted survey by the Central Road Research Institution (CRRI), Quantification of Benefits from Implementation of Phase-I of Delhi Metro, owing to the Metro in the Capital for the last five years, as many as 34,985 motorcycles have come off the roads as against 17,403 scooters. On average, 2.5 lakh bikes are sold in Delhi every year. 

A recently conducted Upgrader Survey by Maruti Suzuki points out two interesting observations  the youngsters who bought bikes now prefer cars since it is not good to take girls out in the open. Secondly, a car is much safer than a bike. About 70% of True Value buyers switch from the two-wheeler category, of which 28% are first-time vehicle buyers, claims a Maruti executive. Industry figures for the pre-owned car market stands at one million cars today, which is growing at a scorching 30% each year.  

But this figure is only 40% of the total market, since 60% of the market is still unorganised and transactions happen at a personal level from customer to customer, says a Maruti executive. At the same time, sales at Maruti True Value, already accounting for around a fifth of companys total cars sold, is doubling every year. 

Even Hyundai Motors India is aggressively looking to tap the pre-owned car market. Arvind Saxena, V-P, sales and marketing, says, We want to expand the Hyundai Advantage to 50 dealers from 23 dealers this year. Last year (July to December), with seven dealers we saw a sale of 210 cars. 

This year (from January to July) we sold 1,542 cars. Hyundai Advantage dealers have a sales target of 15% of the total retail done through their showrooms. With big car makers aggressively pushing their new cars sales through upgrades of either existing old-car or two-wheeler owners, obviously the throughput velocity in the old car market has increased many-fold, and obviously some people who may have gone for a bike are now straight away graduating to old cars, and many of these in smaller cities and towns across the country. 

Though its hard to determine the countrys second-hand motorcycle market for want of an organised structure, it is substantial. More second-hand bikes sell in rural India than second-hand cars in the sub-Rs 20,000 bracket, claims Yezdi Nagpurwalla, auto analyst at KPMG. At rock-bottom prices, many in Indias villages dont even care to register their bikes. But clearly, the village-bound motorcycles are utility vehicles owing to joint families and the nature of work from farm to farm. The (second-hand) commuter segment bikes die a natural death in cities since their offtake is minuscule, with ready finance options and spoilt-for-choice consumers, he adds. 

But bike makers arent ready to declare war yet. A senior official from one of biggest two-wheeler manufacturers in the country dismisses the threat from four wheels as being as temporary as a popped clutch. It is improbable that car sales are eating into bike sales. Maintaining the car is a big issue for a first-time buyer, he says. Taking into consideration the fuel charges and parking problems (parking charges are more too), its going to be difficult for him. If the user wants CNG, the price of the kit will be an additional expense too. Sales in the two-wheeler industry have been hit in the entry segment, where a bike would cost around Rs 35,000. So, its a tall claim that car sales are eating into bike sales, he adds. 

Conflicting views apart, the real folks wagon today seems to be the four-wheeler. Plummeting car prices, scooting women, the convenience of the metro and surging affluence are perhaps applying the brakes on motorcycle volumes. Alas, machismo seems to be surrendering to the girls taunt in The Wild Oneits the rebel without a cause.


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## Bushroda

*Served Right*
6 Aug 2007, 0256 hrs IST,TNN

As the economy continues to evolve and people have more disposable income in hand, the travel, tourism and hospitality sector has witnessed a phenomenal accretion. Where 10 years ago, the industry was not yet fully developed, the advent of multinational hotels and the boom in Indian tourism has resulted in the emergence of a streamlined, efficient and focussed segment. The demand for professionals in the hospitality industry too is at an all-time high. 

The careers in this field are manifold, ranging from high flying managers, directors and chefs to the more subdued receptionists, housekeepers and stewards. If you have the right aptitude and personality, the hospitality industry provides ample opportunities to leave your mark. 

*Current scenario *

Going by the recent growth rate, it is anticipated that the hospitality sector will continue to grow rapidly in the country. Hence, it is not surprising to see that today, hospitality graduates have a wider range of options to choose from, as compared to a few years ago. Explains Ruchita Verma, principal, ITM Institute of Hotel Management, "The market for hospitality is growing by leaps and bounds due to shifts in society and a surge in tourism. There is a huge gap between the demand and supply of trained hospitality workforce along with the challenges of attrition which the service sector faces. This has resulted in an increased demand for trained hospitality professionals. To fulfil the growing human resource demands of the industry, numerous schools of hospitality have sprung up. 

No longer limited to five-star hotels, the hotel industry includes fine dining restaurants, travel agencies, luxury resorts, high-end casinos, sports venues, cruise lines, health spas, theme parks, etc. Points out Tanmay Arurkar, a chef management graduate, working with the Taj group of hotels, "The industry holds great promise since it draws a large amount of money and talent. Jobs in the hospitality industry are lucrative wherein professionals get to meet high profile guests and attend to them. This makes it attractive for many people and also improves their confidence and grooming style." According to Rattan Keswani, executive vice president, Oberoi Hotels and Resorts, the growth of a number of hotels in various categories is responsible for the upswing in the hospitality industry. 

Also, employers around the world are looking towards qualified graduates who are expected to possess a superior level of training over a person who does not have a specialised hospitality degree. Keeping this in mind, a number of institutes in India are offering specific courses in hospitality, with the result that a prospective student need no longer look towards an international education as a stepping-stone to a career in the hospitality industry. 

*Getting in *

A class XII pass grade in science, commerce or arts is sufficient to make one eligible to a hospitality course. However, most schools require students to perform satisfactorily at the entrance exam, whether it is the all-India entrance exam or a separate examination conducted by a private institute. At the all-India exam, students have to prove their proficiency in subjects such as English, general knowledge, reasoning and logical deduction, numerical ability and scientific aptitude. Besides this, questions are also asked on the service sector. Ranks are allotted to students and admissions are given. There are 4000 seats available all over the country, and most states have an institute that is affiliated to the national exam. The advertisements for the centralised admissions are published in leading newspapers in the months of January and February and the exam is generally scheduled for April. 

Private institutes that conduct separate examinations have their own set of subjects and grading criteria to judge the students they take in. In certain cases, group discussions or personal interviews are also conducted. Explains Ruchita, "The hospitality industry is all about 'handling people'. No matter how clichéd it sounds, it is about pampering people and making them feel at home. Qualifications add operational value and make you aware of the processes." Besides, many institutes offer campus placements to top- level companies such as the Taj group of hotels, ITC, Mc Donalds, Pizza Hut, etc, making the recruitment process simpler for students. 

*Career options *

The hospitality field offers a wide range of career options in hotels, restaurants, resorts, spas, ships, airlines, clubs and any other place where people go to relax. Says A D Bagul, UDC at the Institute of Hotel Management, Catering Technology and Applied Nutrition, "In a basic hospitality course, one can specialise in either of four options, ie food production, front office, food and beverage service and housekeeping. Besides these, as one moves up the hierarchy, one can also become a manager, administrator or vice president of either of the four options." 

(a) Food production: This involves working in the kitchen of the organisation. Job options include that of a chef, sous chef, commis and chef de cuisine. One could also establish positions such as an F&B manager. 

(b) Front office: The front office involves welcoming guests and attending to their problems and concerns. This includes jobs of a receptionist, lobby manager, cashier, captain, travel desk manager, and so on. One can move up to managerial positions including a duty manager, guest relations executive, customer care executive etc. 

(c) Food and beverage service: This involves service of any kind of food or beverages to the customer. Typical jobs are those of a steward, butler, bartender, or host/ hostess. Managerial jobs include the head, vice president or general manager of food and beverage. 

(d) Housekeeping: It involves taking care of the requirements of guests in their rooms. Housekeeping includes two positions- the housekeeping executive/ assistant and housekeeping manager. The assistant is in charge of manually doing the work, while the manager is responsible for supervision. 

*The right personality *

Says Ruchita, "You need to be a people's person and strive to make your customer feel at ease. You must have a pleasing personality and gifted communication skills." Since the industry is all about providing service to customers and making them feel spoilt and at home, one needs to have dedication, tolerance as well as the ability to work flexible hours. According to Keswani, "The right attitude and listening skills contribute a great deal towards one's success." Also, the person must have an avid interest in travel, tourism, and entertainment. 

*Overseas - a better option? *

For many people, the study of hospitality management is synonymous with a fancy school in Switzerland. However, over the years, India and other countries have proved to be equally good options. Affirms Keswani, "We do not particularly prefer to hire students with a foreign degree. Ultimately, it boils down to the content taught and the candidate's ability to learn, not the location of the school." 

Elucidates Ruchita, "Although Swiss schools are very skill- focussed, a Swiss diploma may have a slightly limited acceptability across the globe for continual education. Also, the skills imparted by Swiss schools are similar to those taught in Indian institutes. However, Swiss schools do not impart research, which adds more value to your professional life and helps you analyse and synthesise information to make better decisions." 

Conversely, Arurkar believes that employers do give preference to students having an international degree. "However, unfortunately for them, most students who go abroad do not return to work in India, which leaves employers with no choice but to hire candidates with degrees from Indian institutes," he explains. Agrees Prathamesh Kakirde, a hospitality graduate, who has worked with hotels such as the Taj President and Hotel Intercontinental, "In my experience, I have found that employers prefer students with international degrees. This does not mean that an Indian degree isn't good. The Indian education system has evolved to provide quality education at reasonable rates, leading to the inception of a number of good hospitality institutes in the country." 

*Remuneration* 

The salaries offered differ by virtue of the individual's personality and the institute from where they complete their education. The bigger the organisation, the fatter the pay cheque. 

Generally, fresh graduates are hired as management trainees with an average salary of Rs 7,500 to Rs 12,000 per month. As they gain experience, salaries can even go up to Rs 50,000 per month.


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## Bushroda

*Stronger rupee: End of India`s export boom?* 
Kalpana Kochhar & Andrea Richter Hume / New Delhi August 06, 2007 

*The high profitability of India's corporate sector should buffer the costs of rupee appreciation. * 

Since March, the rupee has risen sharply, by roughly 9 per cent against the US dollar, to a nine-year high. The rise has also been significant in what economists call real effective terms, meaning appreciation that is adjusted based on inflation, and measured against the currencies of a range of Indias trading partners. This trend has brought a chorus of concerns that the strong rupee is eroding Indias competitiveness, and that it represents a threat to the countrys buoyant export growth. These concerns are overstated. 

All else being equal, exchange rate appreciation will, of course, make Indias exports more expensive, and hence less competitive. But all else is not always equal. For starters, the rupees appreciation has lagged behind the regional trend. For example, between July 2005when the Chinese renminbi was revaluedand December 2006, most regional currencies appreciated by about 10 to 20 per cent in real effective terms. At the same time, the rupee actually depreciated by about 4 per cent. 

Moreover, the exchange rate is only one of many factors that determine an economys ability to compete. Since India is becoming more competitive along other frontsfor example by boosting productivity and improving business conditionsexport growth can remain buoyant despite a stronger rupee. Finally, and equally important there are benefits to a strong rupee. Corporations benefit from cheaper imported inputs, and households benefit from increased buying power. 

In any case, a weaker rupee would provide no guarantee that exports would grow faster. Indias experience during the 1970s and 1980 makes this clear. Even though the rupee lost more than half its value in real terms against the U.S. dollar, exports grew slowly, and Indias share in world trade fell by a third. 

A survey of Asia illustrates how strong export performance can go hand-in-hand with a strengthening currency. In Korea, for instance, export growth averaged 20 per cent per year between 2003 and 2006even as the won appreciated about 23 per cent in real effective terms. Exports in Indonesia and Thailand have also grown rapidly despite stronger currencies. Even Indias 30 per cent export growththe fastest export growth in 33 yearswas achieved in 2005, when the rupee appreciated by over 4 per cent. 

Rapid productivity growth plays an especially important role in explaining why a countrys export performance can remain robust even when its currency strengthens. Again, the experience of the fastest-growing Asian economies is instructive. In Korea, industrial productivity growth averaged over 6 per cent between 1972 and 2004. This was significantly higher than in the United States and Japan, where industrial productivity grew by a mere 2 per cent and 2½ per cent, respectively, during the same period. 

In India, strong productivity growth, robust corporate profits, and corporate pricing power augur well for continued competitiveness in the medium term. Over the last 15 years, total factor productivity growththe productivity of capital and labour taken togetherhas averaged about 2 per cent per year, more than double that in the U.S. for the same period. With total factor productivity growth expected to rise to 2¼ per cent in the coming years, India should continue to gain competitiveness. In addition, service exporters may have some scope to raise prices, especially in industries that focus on customer-specific services. Finally, the high profitability of Indias corporate sector should buffer the costs of rupee appreciation. 

Where does this leave monetary policy? The Reserve Bank of India remains under pressure to resist the strengthening of the rupee by buying foreign currency. But the liquidity that such intervention would create could stoke inflation. And to mop up the impact of this liquidity, the Reserve Bank of India would have to issue bonds, possibly at higher interest rates. This could encourage further capital inflows and further appreciation pressure. Moreover, given the productivity-driven momentum of the rupees appreciation, intervention is unlikely to be successful in the long run, since financial markets expect the rupee to appreciate eventually. 

The best policy response would be to push ahead with reforms to boost competitiveness. The list is well-known. It includes investing to address the very serious problems in infrastructure, which cost an estimated 1 per cent per year in foregone growth. It also includes reducing import duties on capital goods to stimulate investment. Other possible measures include making labour markets more flexible to encourage job growth and a more efficient allocation of workers, and scrapping small-scale reservations to promote competition and innovation. Reforms in education are also vital to address the critical shortage of skilled labour. Finally, continuing to rein in fiscal deficits will make room to fund infrastructure investment. Implementing these measures on an aggressive footing will give India the best chance of realising its full export potential, and it will make currency appreciation less worrisome.


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## Bushroda

*THE DE-BUG UNIT*
Heidi Benson, Chronicle Staff Writer
San Francisco Chronicle
Sunday, August 5, 2007

The vice principal of his San Jose high school looked him right in the eye. 

"Raj," he said, "you'll never be anything but a high school dropout." 

At the time, "it was just like an after-school special," Raj Jayadev recalls. "I thought, 'Are you kidding me?' " Such an ego-punch could have been flattening. Instead, he took it as a challenge. 

"After that, I was motivated to prove that other people weren't better than me." A decade after his teacher's taunt, Jayadev had earned a political science degree from UCLA, won a Rockefeller Foundation fellowship, founded a nonprofit in Silicon Valley called De-Bug and been named by Utne Reader one of "Thirty Visionaries Under Thirty." 

In bestowing the title, Utne Reader described De-Bug - Jayadev's magazine and its offshoots - as a "combination zine and collective of workers, writers and artists that educates temp workers on their rights as employees," and "aims to inspire a rage to take action." 

The glass door doesn't quite fit the frame at De-Bug's bare-bones office, which is inside the labyrinth of the Koll Circle industrial park in San Jose. 

With a jostle, it opens to a kind of lobby, where Jayadev, 32, perches on the arm of a couch, his feet on the coffee table. Wearing a blue-gray T-shirt, jeans and Converse All-Stars, his head sleekly shaved and a tiny gold hoop in each ear, Jayadev has striking good looks and a low-key manner. 

Just now, he is in the middle of an on-camera interview with a student from Santa Clara University, part of an oral history project for her multicultural journalism class. This is history to the 20-year-old blonde behind the Canon videocam. Founded in 1999, De-Bug is pre-millennial. 

Jayadev squirms when people ask how the magazine's doing. "I don't really care how the magazine's doing," he says. 

"I care how the people are doing. They could outlaw magazines in San Jose, they could kick us out of our office, unplug our electricity and take our computers, but we would still come back to that same Vietnamese restaurant and ask each other 'What do you want to do now?' " 

After his video interview wraps up, Jayadev heads for that restaurant, Chez Croissant on First Street, where the group that became De-Bug first started meeting after work. He orders beef Pho and, using chopsticks to spiral noodles into a white ceramic spoon, begins to talk about his life. 

Born in Milwaukee in 1975, he is the youngest of Leela and Tumkur Jayadev's two children. The Jayadevs had emigrated to Wisconsin from southern India after his father won an engineering scholarship - the beneficiary of affirmative- action programs launched after the nation won independence from Britain. "They came before 'the wave,' " he says, alluding to a swell in emigration from India to the United States 20 years ago. 

In 1990, the family moved to San Jose; Jayadev was in junior high. By the time he entered Lynbrook High School, he had become a problem kid. He was skipping class and getting into trouble. When he dropped out during his junior year, his parents were stunned. 

It didn't take long for him to regret it. That's when he went to the vice principal. And, after that snub, he took his high school equivalency tests and went on to junior college. 

"That's when I started really getting into school," he says, and then he set his sights high, on UCLA, "the biggest-name school I knew." He got in, entering as a sophomore and a spring transfer student. The first time he ever set foot in Los Angeles was the day he moved into the dorms. 

"I was this random guy who just showed up," he says, laughing. "But I felt so lucky. I remember thinking someone was going to come up to me and say, 'It was a mistake, and you have to go.' " He majored in philosophy, switching to political science after being electrified by a course in globalization taught by a woman from India. 

"Until then, I hadn't met many role models," he says. She gave him what he calls "permission to be creative." Until then, he had never seen himself as a part of any group. But soon he became politically active, founding a South Asian student group focused on political identity. 

"I was all about being South Asian," he says with a laugh, then grows thoughtful. "A weird thing happens with children of immigrants. You distance yourself from your background. But sometime in your late teens, the pendulum swings, and as dismissive as you've been about your ethnicity, it becomes the source of pride and identity." 

When his parents asked what he wanted to do when he graduated, he said he planned to organize workers in India. "You think you can do what 100 Indians couldn't do?" his father asked. "You don't even speak the language." 

College exposed Jayadev to the notion that the way to get ahead is to fill out an application. 

When he found himself in the counseling center just days before commencement, he studied an array of glossy brochures. A leaflet caught his eye: "In five lines," it said, "tell the Oakland-based LeFetre Fellowship for Youth of Color why you should receive one of seven annual traveling scholarships." He filled it out and won a monthlong summer fellowship to India. 

"I was totally fired up, I was at the peak of my rhetoric," he says. "I had all these romantic ideas about Gandhi and spirituality. I had researched all these 'social movement groups' I wanted to meet," he said. In such a state, he found his initial assignment - teaching basketball - deflating. But eventually, he was able to meet with these groups, traveling with tape recorder in hand while en route to his father's village in the south. 

"On the train down, everything's collective," he says. "You're with people for a week. There are fewer social barriers than on the Greyhound here. If you've got a bunch of bananas, someone will just walk by and pull one off. I had a toy for my nephew that I was really pleased with, so I was playing with it. I passed it to the guy next to me, so he could play with it, and then he passed it to the guy next to him." It went all around the car before he got it back. 

In his father's village, he stayed with his grandmother. He learned about his people, the Veershivaites (devotees of Shiva), and heard the language ( Kannada) that he had resisted learning. 

"It was wild to visit where my father walked," he says, noting that his father didn't own shoes until he was in his teens. "They don't have concrete. There's one room for the people and one room for the cow." Jayadev learned that the history of the Veershivaites, a monotheistic branch of Hinduism, hinges on a mixed-caste revolt that was ultimately unsuccessful. "It was the story of a people who believed that everyone was equal," he says. "That's how our people started. It was there the whole time, but I'd never thought about it or cared." 

He was riding a bus when he had another epiphany. "I looked up, and for a split second I tripped out, because all the guys look like me. All the older guys look like my dad. All the women look like my mother and sister," he says. "It seems superficial, but it meant a lot to know that I physically fit in. That I come from a place. There's a reason for me." 

Once Jayadev got home, his only ambition was to return to India. "Here, everything seemed an indulgence," he explains. "In India, life is so precious, so fought-for. I wanted to live the principles I'd learned there." 

To earn money for the trip, he got a temp job at Hewlett-Packard. It was 1998, and the dot-com boom was in full flower. "Silicon Valley was a rock star," he recalls. But he wasn't rubbing elbows with digital zillionaires. He was working on the assembly line, boxing laser-jet printers alongside the folks who keep the new economy humming - for $8 an hour. By his side were people of all ages and many ethnicities, from single mothers to grandfathers. 

"You get to know people well when you're working these jobs," Jayadev says. "When you start work at 6 a.m., you're pretty raw. There's no pretense. You just woke up." His co-workers warned him to keep an eye out - the plant's temp workers' paychecks were being shorted. Repeated complaints had been made. The human resources department of the temp agency was looking into it. But nothing had been resolved and the shortings continued. 

Inspired, Jayadev wrote a petition demanding that paycheck issues be resolved immediately and that all lost wages be reinstated. Co-workers passed around the petition, even translated it. Their enthusiasm took him by surprise. They were supporting their families on temp jobs - "they had the most risk and the least hope of change," he explains - and still, they wanted to sign their names. As one woman said, "I want them to know it's me." 

Amazed by their courage, Jayedev asked one co-worker, an African American man in his late 50s, why he signed. "Because I know this stuff works," he told him. "My brother and I were involved in the civil rights movement back in the '60s." He remembered that as a time of dignity. 

Another co-worker - a Hispanic woman in her mid-40s, born in the Central Valley and now putting her daughter through college - told him she signed because she remembered her mother taking her to the fields during Cesar Chavez's farmworkers' strikes. 

"These people had a point of reference in their lived experience," Jayadev says. "They knew collective action works." When the petition was presented to the temp agency, it was just the leveraging tool they needed. "Every pay issue was resolved in two weeks, and it never came up again," he says. The lost wages were reinstated. It was a huge victory. 

"The raw virtues - including courage and compassion for fellow workers - trumped all the other reasoning," he says. "That stuck with me, even now." 

During this period, Jayadev began keeping a journal. He recorded the wisdom passed along by those working beside him in the shadow of the dot-com boom. Many were older Indian immigrants, who considered themselves his "automatic aunties and uncles." "They'd look out for me, give me advice - and ask when I was going to get married," Jayadev recalls. (He is in a long-term relationship with a woman who is also an activist.) 

They told him their stories - how they came to this country, what they hoped for their childrens' futures, the sacrifices they had made. "Some were engineers or professors in their home countries - India, Somalia, Ethiopia, Central America," he says. "They were well-educated and successful, but it didn't transfer. Their supervisors were in their mid-20s, making at least a dollar more an hour, but they treated them as inferiors. 

"People weren't really talking about that side of Silicon Valley," he says. But now, he was writing about it. 

When a fight broke out on the line, one of his colleagues - an older Indian man from Goa - had a powerful reaction. "This wouldn't happen in India, because there, workers are united," the man said. "You wouldn't pick a fight with your brother." Other workers wouldn't stand and watch, he insisted. They'd intervene and stop it. "After that I picked his brain - he knew so much about organizing," Jayadev says. "All that knowledge was right beside me, and offering me chapati at the break!" 

He wrote the story and posted it on a South Asian Web site. Suddenly, he was on the radar. Sandy Close picked up his signal. A long-time champion of ethnic and youth media, Close is executive editor of San Francisco's New American Media, a national coalition of news groups. After reading Jayadev's work online, Close invited him to be part of a television panel discussion on the "digital divide." 

"Raj is a dazzler," Close says. "He has literary gifts but an organizer's instincts. That's a rare combination, and he's been very true to it." 

Over coffee after the broadcast, she asked Jayadev if he knew others who could write about working in entry-level Silicon Valley jobs. He promptly enlisted a small band of co-workers from HP, explaining that New American Media was looking for stories from their lives. 

Meeting to share ideas once a week at Chez Croissant, they soon had enough stories for a two-page spread - called "Voices of the Young and Temporary" - in a weekly publication of New American Media called Youth Outlook. 

They delivered it by hand to lunch trucks all over Silicon Valley, and the publication was snapped up enthusiastically. "For a lot of people, it was the first time their reality was reflected," Jayadev says. Encouraged by their success, the group was determined to stick together. They found a name for their enterprise on the assembly line, where "the de-bug unit inspects a malfunctioning product, finds the root cause and corrects it," Jayadev explains. "That's what we wanted to do with the magazine." 

The focus wasn't on learning skills, but on answering questions: Who do we want to become? What do we need to get there? 

"The better we got to know each other, the closer we got. And the more we found that people wanted to talk about everything that mattered to them, not just work," Raj says. "They wanted to talk about their neighborhood, home life, relationships, even God." 

With the help of a grant from New American Media, Jayadev and his band of young lower-wage Silicon Valley workers created a grassroots media group: They launched Silicon Valley De-Bug, a bilingual magazine of writing and art. It comes out in print form every other month or so; an online version is updated more often. They launched a radio talk-show and, with just one video camera and a computer editing program, produce a television show that can be viewed on the Web site (www.siliconvalleydebug.com). De-Bug staffers consider themselves activists as well as citizen journalists. 

"All the media stuff is just an excuse for us to build community in a really intimate way," Jayadev tells the Chronicle. "De-Bug is a tool for peoples' transformations. We've seen people break drug addictions, bad family cycles. We've seen people start expecting the world from themselves, when the world expected nothing from them," he says. 


"Young people's facility with multimedia puts them ahead of the game," Close says. And they know it, if a recent New American Media survey of Californians, age 18-25, is an indication. The results took Close by surprise. "Where does this extraordinary optimism come from in this generation," she wondered, "especially at a time when it would appear that there is very little to be optimistic about" - including family dysfunction, neighborhood violence, high drop-out rates and rising tuition. 

Then she understood: It's the Internet. "You have undocumented kids, kids with no particular support at home - but they're very optimistic," Close says. "They will hand you a business card that says, 'I'm a media content provider.' The Internet has allowed these kids to imagine being part of a global media culture." 

The group's latest contribution to the culture is "De-Bug: The Underside of Silicon Valley," an anthology of the best work from the magazine. "Kinko's, that's our publisher," Jayadev says, with his easy laugh as staffers arrive for a meeting one recent afternoon. 

They trickle in, in pairs or solo, as they have every week for seven years, meeting at the San Jose Peace Center, founded in a bungalow on South Seventh Street by anti-nuclear activists in the 1950s. This was De-Bug's first home, but staffers hold their weekly meeting here for more than sentimental reasons. The downtown location is handier for people to drop by after work. 

Today, in the Peace Center's front parlor, beneath a black-and-white poster of a smiling Cesar Chavez, 10 people take seats around a conference table. The first order of business is "check-ins." As each talks about how they're doing and what they've been up to, story ideas percolate. 

"One of my cousins just got out of jail," writer Shana White says. "I asked him about his job search and he said it's not easy, since he has a rap sheet. So he's living with a girl who supports him." He doesn't love her, but he calls the living situation his "program" for staying out of jail. After some discussion, the group agrees he's an in-house gigolo, and not an honest one. 

Jayadev is more interested in a larger question: Does the story hint at a social trend? 

"There are some people who think they've found a way to beat the matrix by living off others," he suggests. It's a way to survive when you're not part of the economy. 

"Maybe it's working temporarily," Jayadev says, "but how do people break that kind of dependency on other people? Has anyone seen examples of people who broke the dependency?" 

He isn't running the meeting. He's steering it. And he ends it like a sports coach: "You have something to write, write it." 

Even natural leaders have moments of doubt, and while imagining De-Bug's future, Jayadev has had his share. "We're always told we do things wrong, that everything's *** backwards," he says. De-Buggers don't fill particular jobs; their job titles evolve from their interests. "We don't think about the product - how many magazines we can get out. We think about the transformative power of the process." 

His confidence in the De-Bug approach got a boost when he got a chance to test it in an academic setting. Jayadev was the youngest of 25 leaders tapped by the Rockefeller Foundation for a 2004 Next Generation Fellowship. The group met in four cities over the course of the year to discuss the "future of democracy." 

"When I went to these fancy Rockefeller forums - with these eloquent, well-resumed people - they'd have us discuss race and racial dynamics and they'd bring in an author of a famous book," he recalls. "But when I sat in those circles, it felt like the discussions were 10 strides behind the conversations we were having at De-Bug." After all, De-Bug was engaged from the start in drawing larger themes from everyday experience. 

"Asking a group of people in San Jose - 'How do you define yourself if you have to tell someone on MySpace who you are?' - is a way of getting at identity in a more nuanced, and much more real, way than talking to a professor." 

One of the Rockefeller fellows, a former White House aide, asked about De-Bug's potential for growth. "Can you scale it?" he asked Jayadev, who laughed and explained that De-Bug can't be franchised, since it takes its shape from the individuals within it. 

Still, because of the success of the model, Jayadev soon had to face the fact that De-Bug was growing. Could they do so and stay true to their community values? His concern became a preoccupation. "Discouragement is infectious, just like courage is," Jayadev says. So he kept his worries to himself. Still, his mother sensed that he had something on his mind. Finally, visiting his parents' home one evening, he confided in her. 

"She drinks this thing at night - warm milk, sugar and saffron - it helps her sleep," he says. As he was talking, she pulled a saffron stem to the lip of the cup. "Look at how pretty this is," she said. "This is the stem of a really beautiful flower. Imagine the flower." Jayadev thought, "Man, are you even listening?" 

Then she tilted the cup so he could see the surface of her drink, covered with saffron stems. "Imagine all those flowers," she said. Jayadev realized she was telling him something about the power of imagination. "She could see all these flowers," he says. "It really put me at peace." 

He thought of the positive influence De-Bug could have if it did grow. He thought of the lives that had already been transformed - and how many more could benefit - through De-Bug. 

"It's like pulling one of the saffron stems to the edge of the cup," Jayadev says. 

"Imagine the flower."


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## Bushroda

*Reinvent government to make India liveable*
6 Aug, 2007, 0428 hrs IST,ARUN FIRODIA, 

Six decades of central planning has not made India particularly liveable. We all know that rural India (Bharat) wallows in extreme poverty but even urban India is not exactly a Garden of Eden. All the basic amenities of life  water supply, public health, functioning of schools, sewerage and traffic condition  are in a state of disrepair. Those who can afford opt for expensive private alternatives, for example in education or health. And where private services are not possible we just fret and fume. 

Who is supposed to fix all that? Way back in 1993 our Constitution was amended (73rd and 74th Amendment). The task of providing basic amenities, viz., roads, water supply, public health, sanitation, waste management, environment, culture, education, slum improvement, gardens, street lights, etc., is now assigned to urban and rural local bodies like municipal corporations and gram panchayats, which form the third tier of government, the first two being central and state governments. 

Although it is mandatory, the state governments are extremely reluctant to devolve functions, finances and functionaries to local bodies. Not only that, they have created overlapping authorities like metropolitan development boards, water boards, slum rehabilitation authorities, housing boards, electricity boards, school boards, state road development corporations, etc., leaving only garbage removal as possibly the sole exclusive responsibility of local bodies! Naturally, they are unable to carry out their constitutionally assigned duties of providing basic civic amenities and make India liveable. 

The combined budgets of central and state governments are Rs 13 lakh crore. Half this amount is required in the hands of local bodies to make India liveable (presently only 7% is available). But how can central and state governments transfer such vast sums of money to local bodies when they are running huge fiscal deficits themselves? The answer lies in trimming these governments to their core responsibilities. Our central government has 46 ministries, (thanks to coalition politics), whereas Japan has only 10 and the United States has only 15. 

Even state governments (e.g., Maharashtra) have 40-odd ministries. The time has come when the central government should confine itself to the tasks that Constitution of India has assigned to it, viz., defence, foreign affairs, etc, and providing viability gap funding for mega infrastructural projects like international airports, nuclear power plants, etc. 

Similarly, state governments should confine themselves to what the Constitution of India has assigned to them, viz., law and order, university education, ecology, etc, and viability gap funding of infrastructure projects like roads, irrigation, electric power and special economic zones. What local bodies can do, central or state government should not do. Would you believe that cattle fodder is one of the items on the concurrent list (i.e., both central and state governments could legislate on that subject)? 

When central and state governments shed their non-core responsibilities, they will need just Rs 250,000 crore to carry out their core functions (defence, foreign affairs, law and order, administration, etc). Another Rs 300,000 crore can be earmarked for viability gap funding for infrastructure (power, roads, airports, etc). After providing for interest on government borrowings a whopping Rs 500,000 crore can be transferred to local bodies. 

Local bodies should raise at least Rs 100,000 crore through local taxes and user charges so that they have a total of Rs 600,000 crore to spend. And they should spend it to make India liveable. 

Urban local bodies should use these funds for urban renewal (mass transit, roads, flyovers, parking, water supply, garbage collection, slum improvement, playgrounds, street lights, etc). Rural local bodies should use these funds for rural renewal (watershed development, irrigation, sanitation, bio-energy and solar energy, primary and secondary education, primary health centres, food processing, food storage, etc). These functions are detailed out in the 11th an 12th schedule of our Constitution. 

But many urban local bodies do not have the wherewithal to speedily execute such activities. So we should focus on private-public partnership. A number of cities have shown us the way. Indore has introduced a 50:50 scheme where citizens in a locality get their roads revamped from a private contractor and municipal corporation foots 50% of the bill. Ahmednagar has privatised bus transport and octroi collection. Surat, once afflicted by plague, has become khoobsoorat (beautiful) and so the local citizens dont mind paying high property taxes. Ralegan Siddhi, a village in Maharashtra has blazed a new trail in rainwater harvesting . And so on. 
Most of the rural local bodies possess neither the skills, nor the resources, nor the manpower to execute such activities. Yet they ought to be involved in deciding the scope of rural renewal. Top down approach would fail because it would not value local knowledge and initiative .So the following model may be adopted: 

Rural local bodies should appoint consulting firms to discuss with the stakeholders to prepare detailed project reports. This report should be forwarded to the district planning board having experts from various fields. Once approved by the board it would be given to a CEO for execution. 

The CEO would be a bright young government officer (or a civic minded MBA or an experienced NGO organiser) who would be posted to a cluster of 10 villages. He will be empowered to spend the budget on the approved project. His remuneration/promotion will depend on completion of the project successfully. He will be provided with good living accommodation and his children will be admitted to good schools with hostel facility. 

But he would be required to stay in the village and work from there. Out of his tenure of, say, 35 years, he will spend the first 10 years in the rural area and then move up to cities. He will be assisted by 10 officers having skills in different areas relevant to rural needs. We would not need to recruit any extra manpower. The required 600,000 officers could be easily found from among the government and public sector undertakings which employ 1.90 crore people 

This way both India and Bharat could become liveable. We may then go on to catch up with China and even surpass it in economic prosperity  in a true democratic fashion.


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## Bushroda

*Roads that change destiny*
6 Aug, 2007, 0550 hrs IST,Dipal Gala, TNN

For a city that has seen a flood of FDI and employment opportunities opening up to thousands of people, Hyderabad is understandably getting congested and her roads are permanently busy. 

The colossal ORR (outer ring road) project conceived by the Hyderabad Urban Development Authority is the answer to all this as it is the orbital linkage to decongest the traffic flow on the existing major arterials. 

Aimed at the development of well-planned and well-connected urban settlements around the current Hyderabad metropolitan area, it is perceived tobe the growth corridor which will lead to a balanced spread of townships and commercial areas. It is a fine example of how governments can plan a city piece by piece in a manner that its citizens do feel truly cared for and get to live by global standards. 

*Thinking Tomorrow *

What is refreshing about Andhra Pradesh is the approach to infrastructure projects in the state. Both funding and execution are now in the public private partnership mode and that has brought in a high level of vigilance and international standards. It is said of India that with infrastructure projects it is the requirement of yesterday that is being executed, not even the requirement of today. 

But when HUDA (Hyderabad Urban Development Authority) drew up plans in 2004 to create infrastructure that would pave the path for the growth and development of the city, it was looking at the requirements of the next couple of decades. The vision and the sheer willpower of the present government to implement the plans at a pace that can rival other comparable projects in other countries are noteworthy. 

*Pied Piper Effect *

Instead of a piecemeal approach to development, the proposed Outer Ring Road (ORR) in one stroke extends the canvas of Hyderabad city three times. Given its geography, the city can grow on all sides. It is easy to see why the ORR is likely to be the growth engine of the city. 

Umpteen real estate developers in the city have taken cue and today Hyderabad is dotted with property projects, many of which are corporate campuses, private integrated townships, row houses, exclusive office and retail space and so on. Villages the ORR plan touches or bypasses are now being viewed as prime land. It is difficult to imagine the absolute interest of the umpteen MNCs setting up campuses in Hyderabad without the promise of the ORR and the private initiatives that have followed. 

*Creating Value, Long Term *

While the national highway development project costs Rs 10-11 crore per km, the ORR costs approximately Rs 28-30 crores. Anywhere in the world, ring roads that surround a city are not easy to construct, and tend to landlock a city. 

London, for example, has an elevated ORR. Given Hyderabads rocky terrain, innovative designs needed to be conceptualised with the best city planning expertise available in the world (India does not have homegrown expertise at present). 

While Rs 4000 crores will be spent on the project, it is estimated that the economic benefits it will bring in will be to the tune of Rs 1,35,000 crores in the first five years itself. 

*Walking The Talk *

The ORR that began in mid 2004 is close to completion of the first 22-km phase. Inspite of the very high international standards, the ORR will be effectively completed in five years. Comparatively, an ORR in France began in 1983 and was completed in 2003.Roads planned in the 60s and 70s made America and parts of Europe what they are today. Hyderabad looks geared to repeat the story, with its unique twist.Just like the bend of a road.


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## Bushroda

*Unleashing hidden gems*
6 Aug, 2007, 0554 hrs IST,Dipal Gala, TNN

The domestic traveller loves Andhra Pradesh. It has recorded the highest leap in numbers for travel, according to Incredible India findings. Hyderabads composite and cosmopolitan culture, its good weather and modern feel make it a naturally attractive destination. 

The city still retains its old world charm and has a freshness that cannot be seen in done-to-death touristy places. Research shows that it is not just Hyderabad the travellers visit, they now tend to go to various places in the heartland of the state, from Srikalulam to East Godavari. 

Whether it is the spanking new Balayogi Paryatak Bhavan, the National Institute of Tourism and Hospitality Management, 

the renovation of breathtaking and historical Taramati Baradari, or even the plans to dot the city with budget hotels, efforts are afoot to give the state its due place on the tourism map. 

Worldwide, tourism accounts for 10.4 per cent of the global GDP and 8.1 per cent of the global employment. Andhra Pradesh is seriously looking at tourism as an industry and a major employment provider. We are finally set to harness the direct and multiplier effect for employment generation, economic growth and poverty alleviation with tourism projects in the state, avers tourism secretary Chitra Ramachandran. 

Enhancing private sector participation in the tourism sector with the government working as the facilitator and the catalyst is a key part of the programme. Developing major centres of historic stature and natural beauty such as Vishakapatnam, Warangal and Tirupati with unique concepts such as beach tourism, rural tourism, eco-tourism, medical tourism, and developing the Buddhist and Jain travel circuits is top priority now. 

Looking back Chitra says, Attracting the domestic traveller starts with infrastructure, and the general feeling of well being in India right now just adds to it. The migration of the IT worker to Hyderabad has led to travel tales all over the country describing the city and its beneficence. For once, the attitude towards tourism is in step with the times  one is likely to see a sea cruise, river cruise in coastal Andhra and an entire temple circuit develop in parts of Warangal. Statewide, spas, entertainment centres, star hotels and budget hotels are in various stages of completion. 

Interestingly, it is the bright new ideas era now. Ideas like the Southern Splendour Express train, the Sri Ram Sagar dam project called the The river country getaway are a sharp shift from the tried and tested ideas. Why, there is even a plane called Andhra Pradesh now! 

A lot of the corporate good will is actually because Hyderabad is now a leading MICE destination and international conventions happen here as a routine. Hyderabad International Convention Centre (HICC) is South Asias first truly world class convention centre. The Shilpa Kala Vedika and Ramoji Film City come a close second, and both are exceptionally impressive . 

There is something about Hyderabad that gets people to say wow. Like we said, the world is Hyderabads oyster now!


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## Bushroda

*Israel proposes FTA with India, to open second trade office*

Jerusalem, Aug. 6 (PTI): Israel has proposed a Free Trade Agreement (FTA) with India to boost burgeoning economic and bilateral ties. 

Israel's Deputy Prime Minister and Minister for Trade and Industry, Ellie Yishai, conveyed this during a meeting with Indian Minister of State for Trade and Industry, Ashwani Kumar, who is leading a high-level FICCI business delegation to Israel. 

"The wish to renew and deepen bilateral ties were re-iterated during the meeting, outlining major areas of cooperation for comprehensive economic development," Kumar said adding, India will also actively consider Israeli proposal for an FTA. 

Israel also plans to open its second trade office in the country, which is likely to come up in Bangalore where several of its hi-tech companies have been active for almost a decade. 

High-tech, genomics, nanotechnology, water technology, security systems, agriculture etc were mentioned as some of the areas where existing cooperation could be enhanced and new areas explored. 

"The focus on multi-dimensional, multi-faceted comprehensive economic development can give a new dimension to Indo-Israel bilateral ties," the minister said. 

The two countries had agreed to consider a Preferential Trade Agreement (PTA), proposed by a Joint Study Group (JIGS), during Yishai's visit to India in December last year. 

The two leaders also agreed on the necessity to exchange ideas on creation of jobs with economic growth, something that both Israel and India have been working to achieve. 

Several leading Israeli companies have shown interest in investing in India during the minister's visit, with more than a hundred companies registering to participate in a India-Israel Joint Business Council meeting. 

The Israeli Deputy Prime Minister has also invited Kumar to attend a water technology conference in October. 

Yishai has also shown interest in the participation of Israeli companies in building the infrastructure for the 2010 Commonwealth Games. 

The Indian minister will be meeting Israeli President Shimon Peres, Transportation Minister Shaul Mofaz, and several leading Israeli company heads during his two day visit. 

The Indo-Israel bilateral trade has registered impressive gains during the recent past with India's export increasing by 10.77 per cent and Israel's by 4.1 per cent, reaching the US$2.7 billion mark.


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## Bushroda

*No end to growth story* 

New Delhi, Aug. 5 (PTI): Emerging economies, including India, will overtake the developed countries in growth by 2050. This is because the popularity of India and China as investment destinations is rising while that of Europe and North America is declining.

This was revealed in the Ernst and Young European Attractiveness Survey, 2007. Brazil, Russia, India and China, together with Indonesia, Mexico and Turkey, will be the seven new global powers by 2050 which will comprise the so-called Bric economies, the study said.

These emerging countries will overtake the economies of the G7 countries  Britain, Canada, France, Germany, Italy, Japan, United States  in terms of gross domestic product. However, it remains to be seen whether Indias infrastructure development can keep pace with that of global investments, the survey added.

The developing economies will outdo the G7 if they manage to mend the loopholes in transparency, fairness and infrastructure development. 

Indias popularity is rising as 26 per cent of the respondents have said the country is among their top three preferences in 2007 against just 11 per cent in 2004. 

The survey highlighted that with rising competitive cost pressure, companies across the world would outsource services and manufacturing to low-cost and high-growth economies such as China and India.

One company in five planned to relocate all or part of its European activities outside the region and for this they looked forward to the Asian countries.


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## Bushroda

*The bigger the better for this boiler man* 
6 Aug, 2007, 0135 hrs IST,Maheswaran Parameswaran, TNN

It all started in 1985 when Apjinder Singh Cheema, a native of Punjab, went to Bazpur in the Nainital district of Uttar Pradesh to start a business of his own. Punjabis were known for their entrepreneurship and it was this entrepreneurial streak that made Cheema to quit his job in Hyco Products, to start the Himalayan Packaging Industry making corrugated boxes. 

"I wanted to start something of my own, and decided that if I didn't succeed, there's always the option of going back to a job. So we took a chance - after all, you cannot be big in life if you are not willing to take risks," says Cheema. 

The business did really well and Cheema managed to pre-pay the Rs 7 lakh loan he had taken from the Uttar Pradesh Financial Corporation. But the business of corrugated box was proving too small for Cheema and he wanted to go for something bigger. So he decided to wind up this business and started another company called Cheema Engineering Services manufacturing boiler parts and undertaking upgradation of boilers. His elder brother HS Cheema, who was with Thermax at the time, also joined him. 

The business took off, but the location of the unit did not have connectivity and infrastructure. In 1999 the brothers returned home and decided to start afresh with a boiler manufacturing company at Mohali called Cheema Boilers Ltd (CBL). 

The Mohali-based company, which was launched with an investment of Rs 2 crore, has now become one of the largest manufacturers of process steams and power generation boilers in north India. It's also the sole manufacturer of utility boilers in Punjab and Himachal Pradesh, and is competing with big names like Thermax. CBL has now spread its wings and is all set to export to countries like Vietnam and Zambia. 

"We have export orders from Vietnam, Nepal and Zambia, and are looking at the overseas market in a big way. The future lies in exports and it will be a very important area, which will fuel our growth. We also have orders from Pakistan but we only supply the retrofitters as we are not allowed to export boilers to Pakistan," says Cheema. 

The company, which has some of the India's biggest corporate houses as customers, such as Pepsi, the Tata Group, Bombay Dyeing and Dabur, is now awaiting certification from the American Society of Mechanical Engineering (ASME), which will allow the company to export to Europe as well. 

The next step is to move up the product ladder, says Cheema: "We concentrate on making fuel-efficient high-pressure utility boilers. Now we are ready to make even bigger boilers." CBL also does capacity and efficiency enhancements of existing boilers through modifications and retrofitting, and also converts existing fuel usage into multi-fuel adaptability. 

The company has registered a turnover of Rs 135 crore this fiscal and expects to double that next year. The company is also expanding its production capacity and has taken around 15 acres of land adjacent to its existing plant spread over 10 acres. With so much going for him, Cheema is preparing for even bigger plans and that's not very far away: "We have plans to go public and will be coming out with an IPO very soon," he says.


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## Bushroda

*India plans sports tourism spruce-up*
Bangkok Post

With the Commonwealth Games coming up in New Delhi in 2010, and cognizant of the huge economic and business potential of sports tourism, India has unveiled a policy initiative to upgrade the quality of its decrepit stadiums, attract more competitive events and boost the performance of its players and athletes. Designed to reap the financial, cultural and national-image advantages of a thriving ''sports industry,'' the first draft of Comprehensive Sports Policy 2007 has been placed on the website of the Ministry of Youth Affairs and Sports (www.yas.nic.in) to seek public comments by Aug 25 this year. 

Part of a wider effort to ''create a more global, inclusive economic power,'' the policy will lead to massive investments in both hardware and software, from production of equipment and apparel to trainers and managers. 

It is also part of the perennial competitive rivalry with China which is to host its first Olympics in 2008. Even South Africa, which only shook off apartheid in 1992, is to host the next soccer World Cup in 2010, arguably the world's most-watched sports event. 

Targeted at all stakeholders in both the public and private sectors at the state and federal levels, the new policy is intended to make sports a part of the educational and recreational culture nationwide (boost quantity), improve the performance of teams and individuals (quality), and institute the ''constitutional, legal and institutional measures'' to implement it. 

Once approved and funded, the policy will help provide universal access to sports and physical education for all classes of citizens, in all segments of society and across all age groups, including people with disabilities and senior citizens. 

It will open opportunities for budding sportspersons to tap financial and other forms of support, boost indigenous games as well as paralympic events, help develop new high-end facilities, and create a new cadre of instructors, scientists/doctors and nutrionists. 

It will raise the quality of sports facilities in rural and urban areas, attract public investments in sports infrastructure, and upgrade training centres and sports event management institutions. 

The policy will encourage sports tourism, including adventure sports, and develop a strategy on bidding for major events in a planned and professional manner. It will also strive to ensure adequate support for talented sportspersons for gainful employment opportunities after their careers are over. 

However, like most things in India, sports is a highly political issue. 

On the positive side, the policy is designed to foster national cohesion by ensuring fair opportunities to all talented young sportspersons, irrespective of economic background, social origin, gender or regional location, to fully realise their potential. 

On the other, the selection and other processes, which are in the hands of the local sports federations, can be hugely divisive among representatives of the various groups. 

To resolve these issues at the local levels, rather than refer them to the central government, the policy proposes establishing a Sports Regulatory Authority. The policy says: ''It is neither feasible nor desirable that Government should take upon itself the burden of intervention when disputes arise within national sports federations (as they do disturbingly often) or when complaints are received about inefficient or inappropriate deployment of funds, mistakes in management, non-accountability for results achieved or not achieved, prejudice or bias in the selection of national teams/athletes, undemocratic or unethical electoral practices, and lack of openness and transparency in functioning''. 

A key driver of the initiative is the need to bolster national pride. In spite of having a population of one billion people, Team India does not excel in any sport, rarely produces a world-class sportsman beyond cricket, nor does it have any world-class sports events. 

However, with India now developing world-class airports, hotels, highways and convention centres, it is felt to be long overdue for sports facilities to follow suit. Already, the benefits of hosting international sports events are becoming apparent. New Delhi, where most of the 2010 Commonwealth Games sporting events will be held, is undergoing a major revamp. 

But there will be downsides. India's massive illegal betting rackets, especially in cricket, have well-known links with organised crime. These, too, will grow in tandem with the sporting industry as a whole. 

Imtiaz Muqbil is executive editor of Travel Impact Newswire, an e-mailed feature and analysis service focusing on the Asia-Pacific travel industry.


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## Bushroda

*Great ability to spot sector trends* 
FUND ANALYSIS/ Tata Infrastructure 
BS Research / Mumbai August 05, 2007 

Another fire cracker from the infrastructure theme, Tata Infrastructure returned an awesome 60.32 per cent through 2006 to emerge as the third best performing diversified equity fund. For the NFO investors, the fund has delivered an absolute return of 196 per cent in two and a half years. 

The fund achieved this essentially on the back of a large-cap growth-oriented focus, with some help from the mid caps. One can attribute this stellar performance also to the broad infrastructure theme. But the real clincher has been the fund managers ability to spot sector trends which have buffered the returns of the fund. 

For instance, before the markets tanked in May 2006, the fund manager had cut back his exposure to financial services. The move was profitable, because the sector was amongst the biggest losers in the bear phase that ensued. 

By February 2007 the fund manager re-entered the sector, timing the entry rather well, because through the June 2007 quarter (April-June) this sector delivered phenomenal returns. Similarly, the funds timing in the metal sector was flawless. These two significant calls have translated into a 23.3 per cent return in the June 2007 quarter compared to the categorys 16.88 per cent return. 

The strategy has its share of pitfalls too. The March 2007 quarter was disastrous, for the fund lost (-) 8.26 per cent compared to the category loss of (-) 5.93 per cent. 

The fund is definitely not for the faint hearted. Unlike most other core funds, Tata Infrastructure clearly has no sector loyalty and it takes aggressive positions.


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## Bushroda

*Afghans fly Pune varsity for studies*
6 Aug, 2007, 0141 hrs IST,SAKET AMBARKHANE, TNN

PUNE: While the whole world is helping Afghanistan to rebuild the country with generous donations and grants, Pune is helping the war torn country in its own unique way. 

While the city is called the Oxford of the East, a large number of Afghan students are coming to the University of Pune (UoP) for higher studies. The varsity too, happy with the response, is also planning to start short-term courses for in-service personnel from Afghanistan. 

Last year, UoP was rated as the university with largest number of foreign students by the association of Indian universities. Over the last five years, the university has admitted close to 14,000 foreign students. 

According to the International Students Centre (ISC) of the UoP, which is the nodal agency for foreign students admission in UoP, 100 Afghan students were granted admission in the varsity and affiliated colleges in the last academic year. This year, the number has already shot up to 400 Afghan students. 

This quantum leap has been primarily facilitated by Prime Minister Manmohan Singhs announcement of 1,000 new scholarships each year to Afghan students, during his visit to Afghanistan in August 2005. There is an acute shortage of educated and skilled people in the war ravaged country. 

It needs graduates as well as civil and mechanical engineers for rebuilding. We are working on introducing short-term courses for in-service personnel from Afghanistan next year. We are also looking at student as well as faculty exchange. We had discussed this idea during the visit of the vice chancellor of Kabul University, said UoP vice-chancellor Narendra Jadhav. 

More students from Afghanistan are expected to join considering that admissions to foreign students will continue till end of September. We are expecting over 500 students to join. Most of these students have been granted scholarships by the ministry of external affairs Indian Council of Cultural Research. These students prefer conventional streams such as arts, science, commerce and fine arts studies besides civil and mechanical engineering, said an official at UoPs International Students Centre. 

A large number of students were seen at the ISC office for final processing of their admission. However, most of them had not decided on which college to opt for. 

Most of us have got ICCR scholarship and will study BA or BCom here but we are yet to finalise the college. We are interested to join either Poona College, Ness Wadia College or Sinhgad College, said Wahidullah Rahman, 20, hailing from Nurestan province of Afghanistan. 

His friends, Mohamoud Sameem and Mohamoud Shoaib from Jalalabad, Anayatullah Nejrabi from Kabul and Ziaurahman Madany from Nurestan, were enthusiastic about the prospects of staying in Pune for next few years. We appreciate that India gave us a chance to pursue higher study through scholarships, said Madany. Most of these students sounded fairly conversant in Hindi, a trait that can be attributed to Indias close cultural proximity and historic trade links with their nation.


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## Bushroda

*Adobe to invest $100 million for expansion in India*

Noida, Aug 5 (UNI) Adobe Systems India Pvt Ltd has said it will invest 100 million dollars by the end of next year to expand its existing offices in Noida and Bangalore.

''We have approached the concerned authority for acquiring land in Noida and hopefully soon we will get the green signal,'' company Senior Vice President Naresh Chand Gupta told UNI. 

The company is also looking for land in Bangalore, he added.

This expenditure is part of 200 million dollars that the company planned for expanding its business in the country.

The company's global revenue was 2.56 billion dollars in 2006.

''We expect to touch three billion dollars in our global revenue by the end of this year,'' said Mr Gupta.


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## Bushroda

*The Great Indian CEO Hunt continues -- How the game changes* 
August 06, 07
Noor Fathima Warsia 

The hunt for an Indian media company CEO continues, and head hunters are of the opinion that while the disproportionate demand and supply of the talent has made the hunt difficult, and even tougher to get the right fit for a longer period, they believe that in the course of time, the right talent pool would be created. This would happen in much the same way that it was created, when the media and entertainment sector was just finding its footing in India. 

Abha Kapoor of K&J Search Consultants, a player that has been in the business of executive search for over 12 years, placing professionals at senior management and CEO/MD levels, explained, Finding the right fit from the existing space for a senior level is a problem on account of the limited talent pool, and the special requirements of each engagement in terms of the softer issues like cultural fit, etc. 

If we were to look at candidates from other categories, then with little or no domain knowledge they are, prima facie, not the perfect fit in the short term. However, we believe, high calibre talent can ramp up their domain expertise and transition their competencies fairly quickly into the media and entertainment space. Experience and emotional maturity are the key gaps in skills at the CXO level. These positions impact all aspects of the organisation and have to successfully interface with all stakeholders and manage multiple variables -- EQ is the key for successfully executing these roles, Kapoor further elaborated. 

Indiatimes Rajendra Mehta said, It is very difficult to find a 100 per cent fit for senior management role, since the pace of work and expectation is so high that subsequent to hirings, the weak links start becoming a hindrance to operational success. Finding the right person and ability to attract people from the same domain is extremely difficult, and its more on account of unavailability of exact resources. The challenge is to pin point the dominant competency requirements in CEO role. 

The head hunters identify that the challenge is also from the candidates perspective, which is not just to manage candidate expectations especially in terms of pricing, but also ensuring long-term commitment from the candidate, as invariably there are numerous options in the media space today, and also across other emerging categories. 

Media companies must change mindsets 

Looking at the situation more critically, Kapoor observed, In some ways this talent paucity is self-inflicted. Many organisations in the space are demanding talent with domain expertise and becoming risk averse to talent from other categories. When we started our search firm 12 years ago, specialising in the media and entertainment sector, we had no existing talent pool. We helped create that first talent pool as organisational heads gave us the flexibility, out of compulsion and not choice, to access other categories -- sectors where there were professionals who could transition their skills into the media and entertainment sector  so we found for them CEOs, General Managers, Functional Heads across HR, Finance, Distribution, Sales, Creative, Marketing, from FMCG and other traditional categories. 

Subsequently, over the years, however, as the talent pool grew their expertise in the media and entertainment sector, most clients imposed stringent restrictions on us. We were asked increasingly to source professionals only from the media and entertainment sector. So, in a way, our work became increasingly constrained as it was a very limited talent pool, and as huge demand was chasing a limited supply, Kapoor said. 

Mehta added here, With domains becoming very specific and very niche, its highly difficult to find and exact resources. Therefore, the only answer is to hire an individual for dominating competencies of the role and developing on the shadow competencies. 

The HR head of a leading international broadcast company in India explained, You would expect a CEOs function to be the most supported, given the pressure that it comes with. However, that is not the support that the companies in India are necessarily getting from international counterparts. The targets are unreasonable and the patience is limited. What would make any professional hold on to such a situation riddled with high-levelled pressures? 

Talent pool has to grow 

At one level, experts believe that the talent pool will in any case grow -- both organically and inorganically. Kapoor explained, Going forward, the middle management will need to be trained for broader roles in general management, which would lead to growth from the industry. Also, there would be talent acquisition from other sectors. 

The CEOs themselves should have the responsibility to ensure that the pool grows. 

Mehta observed, The CEO is a thought leader role and hence, getting strategic domain specific input to the organisation is a must for a long-term organisational growth. Finding a person from the global community is an answer to enlarging the pool of resources. The operational effectiveness should be left to the operational COO, CFO or the second line leadership team, and the CEO should build them for tomorrows leadership roles. 

Kapoor stated, One of the most critical KRAs of every CEO in the media sector should be the development of an extremely capable and second line of command. More importantly, investing and developing talent needs to be built into the DNA of the industry, and for that, the ownership would rest with the CEO and top management. The CEOs of media companies should put together a collective vision for creating and nurturing a substantial talent pool, as also invest time and money on employer branding. They also will need to be flexible and farsighted in terms of acquisition of talent from other sectors. 

In todays environment, the CEOs role is no longer limited to a specific domain or geography. In a rapidly growing economy, one of the fastest growing sectors is media, and the CEOs role will now require the ability to create a differentiated offering, the ability to identify and seize new business opportunities, all the while ensuring talent acquisition, training and retention.


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## Bushroda

*Indian Rupee May Gain to 39 as Intervention Fails, HSBC Says* 
By Sam Nagarajan

Aug. 6 (Bloomberg) -- India's rupee may strengthen to 39 by the end of the year, the strongest since February 1998, because the central bank will fail in its efforts to stem both currency gains and inflation, HSBC Holdings Plc said. 

The Reserve Bank of India is selling rupees so fast that it can't mop up the cash injected into the economy, causing overnight interest rates to fall to near zero, Robert Prior- Wandesforde, a Singapore-based economist, and Pieter Van Der Schaft, a Hong Kong-based strategist, wrote in a research note. That rate is too low for an economy growing at 9 percent a year, they wrote. 

``We suspect the authorities are fighting a losing battle,'' they wrote. ``They are grappling with the so-called `impossible trinity,' wishing to control both the currency and inflation without erecting new capital controls.'' 

The local currency, the best performer in Asia this year, has risen 9.7 percent this year to a nine-year high, according to data compiled by Bloomberg. It closed at 40.3525 against the dollar on Aug. 3, after touching 40.215 on July 24, the highest since May 1998. 

The local currency, which gained 0.4 percent to 40.3525 against the dollar last week, may strengthen to 40.27 this week, according to the median estimate of 10 traders surveyed by Bloomberg News. 

Foreign-currency reserves in the four weeks through July 27 grew by $12 billion, twice as fast as in June, suggesting the central bank increased dollar purchases. 

*Cheap Money, Inflation* 

Rupees injected as a result of intervention pushed the rate at which banks lend to each other overnight to an average 0.4 percent last month, from 6.2 percent in May, Bloomberg data show. Reserve Bank of India Governor Yaga Venugopal Reddy is also concerned such cheap money will stoke inflation. 

He told banks last week to set aside more cash to cover deposits, draining 160 billion rupees ($3.97 billion) from the banking system, which according to HSBC, is an amount too small given the pace of foreign-exchange intervention. 

Reddy refrained from raising the key interest rate for the second time at the last meeting on July 31, after increasing it seven times since October 2005, because higher rates may add to the pressure on the currency to appreciate, they said. 

Capital flows from abroad are likely to resume following a ``temporary interruption,'' the analysts said. Global funds turned net sellers of Indian stocks for four of five days through Aug. 2. 

Share purchases by overseas investors this year surpassed those in 2006, while borrowings by Indian companies abroad surged six-fold to $16.1 billion in the year through March 2007. The inflows fueled the rally in the rupee, hurting exporters including Wipro Ltd., the country's third-biggest software maker. 

``No doubt, egged on by the government, the RBI has drawn a metaphorical line in the sand at the current exchange rate,'' Prior-Wandesforde and Van Der Schaft said. ``Recent developments have again highlighted the difficulty to control both the rupee and inflation in an environment where capital is flooding in.''


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## Bushroda

*India Outsourcing Giant Battles Volatile Market*
By Jennifer Bosavage, CMP Channel 
CRN, NY

Despite a challenging environment marked by wage increases and the negative impact of an appreciating currency, India outsourcing giant Tata Consultancy Services, or TCS (No. 32 on the VARBusiness 500), delivered impressive results in what it called a volatile quarter. 
TCS, India's largest IT services organization, reported a 55 percent increase in earnings to $291 million on a 42 percent increase in sales to $1.3 billion for its first fiscal quarter ended June 30 compared with the similar quarter one year ago. TCS said it was able to maintain net margins through cost management, productivity increases and hedging gains. 

TCS' strong showing comes with outsourcing rivals like EDS and Computer Sciences Corp. (CSC) expected to post single-digit sales growth for the similar quarter. For example, EDS is expected to post a 4 percent increase in sales to $5.41 billion compared with $5.19 billion, according to a survey of analysts by Thomson First Call. CSC, meanwhile, is expected to post a 5 percent increase in sales to $3.76 billion compared with $3.55 billion in the year-ago quarter, according to a survey of analysts by Thomson First Call. 

At least at this point, TCS is not seeing a sales fall-off in the wake of concerns that outsourcing is becoming more costly and difficult to sustain. 

"Over the last two to three years, there has been a tendency among U.S. corporations to see the value of outsourcing, especially to destinations like India," says Pradipta Bagchi, spokesman for TCS. 

In fact, seven out of 10 companies on the Fortune 100 use TCS for some type of outsourced service, whether that's for business process outsourcing (BPO), infrastructure services or consulting. The reasons for the integrator's popularity, Bagchi explains, is threefold: global expansion, increasing Indian labor force and cost. 

In the last quarter, the company opened its Mexico Global Development Center; TCS has more than 150 clients and in excess of 5,000 professionals in 14 Latin American countries. The center is strategic for furthering its success in the United States as well as for forging new markets in Mexico and Latin America. 

"Our centers in Latin America speak Spanish and Portuguese," Bagchi says, "and our new center in Mexico serves not only that country but also U.S. businesses that have a need for Spanish-language services. It can also serve as a 'near-shore' center for U.S. companies because of its English capabilities, and it is in a more favorable time zone than our centers in India." Companies have made it clear that while it is advantageous to have work done overnight in the United States (the Indian workday), it's even more desirable to be able to speak to offshore employees in as close to real- time as possible. Sites in Mexico and Latin America, therefore, are briskly gaining popularity. 

That high demand continues to fuel the attractiveness of engineering degrees in India. "[India] will have 400,000 engineering graduates this year," Bagchi says. 

As a result, Tata has had its choice of hires. In the first fiscal quarter, 8,706 employees joined the company, bringing the total employee count to 94,902. Engineering is one of the most lucrative fields for Indians, and the challenge for both Tata and its customers now is containing salary costs, which have been growing rapidly. 

Bagchi acknowledges that, on average, Indian wages have increased 15 percent in the past year, compared with 3 percent in the United States. But, he adds, in Latin America and Brazil, the workers are still 15 percent more expensive to hire than in India. And, he notes, Indian engineers are one-third the cost of U.S. engineers. 

For Tata, the challenge for the future will be in continuing to attract talent while keeping the value proposition attractive to customers. That may take a bit of globetrotting for Tata and other outsourcing firms, as they continue to seek low-cost labor to meet high-tech needs.


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## Bushroda

*Mumbai-Pune in just 19 mins* 
*With Lohegaon airport runway to be closed, air taxis could be the next mode of travel for high-flying crowd * 
Sunanda Mehta 

Pune, August 5: Trains are passé, the e-way has been tried and tested and the four flights in a day ferrying nearly 800 passengers grossly inadequate. For the Mumbai-Pune jet-setting crowd, heres the latest travel option  chopper service. 

With the Lohegaon airport runway going to be closed for re-carpeting in September and flight services likely to be affected, private helicopter charter service firms are eyeing the Mumbai-Pune sector. Among the players are Vectra Aviation, Ventura Aviation and United Helicharters Private Ltd (UHPL). 

We are waiting for the monsoon to get over to start a Mumbai-Pune chopper service, said Goa-based Ventura Aviations chief operating officer Ajay Sareen. Ventura has already readied a four-seater that they plan to lease out to companies or individuals at the rate of Rs 60,000 per hour. 

Companies have approached us for the service. Frequency of the flights will depend upon demand, added Sareen. The Mumbai-Pune flight will last 19 minutes. The trend has been confirmed by Vectra Aviation that leases and sells choppers. 

The potential is very high. We are working on moving into the Mumbai-Pune sector with a dedicated service, said Marketing Manager Severine Rodosavljevic, adding that a construction company in Pune has already placed an order for the purchase of a chopper that will be delivered in early 2008. With Pune getting to be a global business and IT centre, time is of essence for most professionals and we plan to deploy some choppers to cater to this demand, she said. 

UHPL has already catered to a few requests for a one-day trip between Pune and Mumbai. A Pune-Mumbai service is the next logical move. But we have not decided to put a dedicated chopper on the sector as yet. We are going to make choppers available as per the demand. An air taxi service will happen only after studying the scenario, said Managing Director Uday Gelli. 

UHPL owns seven, 10-seater copters that cater to oil and gas companies like the ONGC. 

According to Gelli, affordability will play a huge role. A single seat on the chopper for a one-way trip would cost Rs 10,000 while the full chopper could well be Rs 90,000, he said. 

In April, Kingfisher chairman Vijay Mallya had announced their intentions to start a chopper service between Mumbai and Pune using the race courses of the two cities as landing pads. On agenda were six daily flights on a 15-seater chopper that would take 19 minutes. 

According to airport Director Deepak Shastri, there is a huge demand for flights between Mumbai and Pune because of the business and international passenger traffic. The closure of the runway will definitely affect flights, said Shastri, adding that no private party had approached them for starting the service. We are open to the proposal, subject to the approval of the Indian Air Force, he added.


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## Bushroda

*India, Slovenia to develop R&D unit*
6 Aug, 2007, 0507 hrs IST, TNN

KOLKATA: In a bid to enhance economic cooperation between the two nations, India and Slovenia are keen to sign a memorandum of understanding to create a joint forum for promoting R&D in various fields, relating to the manufacturing sector. 

This was disclosed by Miklavz Borstnik, charge daffaires, embassy of the republic of Slovenia, 
in New Delhi at an interactive session on Bilateral Trade And Investment Opportunities, organised by Merchants Chamber of Commerce. 

Slovenia has submitted its proposals for the proposed MoU to Indias ministry of science 
and technology, which are now being examined by the ministry. 

Once the MoU is signed, it would pave the way for mutual collaboration in R&D not only among the scientific communities and educational institutions of the two states, but also between companies of the respective states. 

In addition, there would be provisions under the MoU for marketing of products, emanating from joint R&D efforts, said Mr Borstnik. Inviting Indian investment in his country, Mr Borstnik said Slovenia as a gateway to central Europe, is an ideal investment destination. Having a port of a global scale on the Adriatic sea, called as the port of Koper, the country offers links to the entire centre and south Europe. 

MCC president Atul Churiwal informed Mr Borstnik that West Bengal offers substantial incentives for investment in thrust areas like food processing, leather goods, garments and IT industries. If Slovenian companies are interested in making investment in these areas, MCC would help them getting Indian partners in these areas, Mr Churiwal said. 

At present, Slovenia is interested in having foreign investment, including India in logistics, tourism, retail trade and industries. Slovenian companies are looking for more business opportunities in India which is emerging as a global economic power, added Mr Borstnik. 

India is one of Slovenias most important trading partners in Asia. However, the bilateral trade between the two states is still at a nascent stage. In 2006, the total trade in goods between the two countries amounted to euro 84.7 million, representing only 0.2% of the total Slovenian international trade in goods worth euro 40 billion. 

The reason for such a low volume is that the trade relations between the two countries was established just about five to six years ago. Trade between the countries started picking up since 2005.


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## Bushroda

*Ambani brothers ride Mumbai's makeover*
Ranju Sarkar in Mumbai 
August 06, 2007 09:17 IST

Today, if you travel by road from the central suburb of Ghatkopar to the western suburb of Versova, it could take you an hour if you are not caught in a bad traffic jam. Come 2009 and you could cover the same distance by the Mumbai metro in 21 minutes and, since the metro will have air-conditioned coaches, you can hope to arrive in good shape. Besides, the maximum fare of Rs 10 will not pinch most pockets.

Similarly, if you are a businessman or a senior executive tired of coping with the city's crumbling infrastructure, you could think of buying an apartment in the Navi Mumbai special economic zone, which promises to offer living conditions on a par with the world's most sophisticated cities. The city will come up next to the Navi Mumbai airport from where you could catch a flight to anywhere in the world.

And in case you are worrying about visiting Mumbai, a new 22.5 km, six-lane highway across the harbour will get you to central Mumbai in just 30 minutes.

Sounds too good? Well, that's a glimpse of the future of Mumbai. And what's common in these dream infrastructure projects is that the Ambani brothers, Mukesh and Anil, are either involved or pitching for them.

The brothers already have a finger in many infrastructure projects in the city. Anil Ambani's Reliance Energy-led consortium has bagged the Rs 2,356-crore (Rs 23.56 billion) first phase of the metro project and will definitely bid for the next few phases.

Mukesh Ambani, with other partners, is building two SEZs (Navi Mumbai and Maha Mumbai) and setting up a world-class convention centre in the Bandra-Kurla complex for which the land alone costs Rs 1,104 crore (RS 11.04 billion). While Anil plans to expand Reliance Energy's [Get Quote] Dahanu plant by 1,000 Mw, Mukesh will set up a 1,000-Mw captive power plant in the Navi Mumbai SEZ.

Both brothers have bid for the Rs 4,000-crore (Rs 40 billion) trans-harbour link that will connect the island city with Navi Mumbai and Mukesh's two SEZs.

Anil is also likely to bid for the new international airport at Navi Mumbai even as a non-compete clause in the family split will ensure that Mukesh can't bid for airports. But given its strategic location (the airport will be next to the Navi Mumbai SEZs), experts feel that Mukesh may bid indirectly through an associate like Anand Jain.

"The brothers have emerged as serious players in infrastructure projects in and around Mumbai," said a high-ranking state government official who requested anonymity.

To be fair, it's not that the brothers are bidding only for projects in Maharashtra. Anil just won a road project in Tamil Nadu and the 4,000-Mw Sasan ultra mega power project, while Mukesh is setting up an SEZ in Haryana too. Both brothers are keen on city gas distribution projects, including in Mumbai.

Unlike the product-market economy (which was liberalised in the early 1990s) and the financial markets deregulation (of late 1990s, when foreign and private banks were allowed), the infrastructure business is yet to be liberalised.

"It still involves government licensing, award of concessions or build-operate-transfer schemes. These require extensive networking skills, which the Ambanis are good at," said a Delhi-based expert on infrastructure.

"Today, manufacturing has far higher risks with the threat of Chinese dumping or reducing import duties while if you have an infrastructure project in your bag, it can offer you a steady stream of income," he added. That explains why the brothers are betting big on infrastructure.

"As a promoter, I would be unhappy if an infrastructure project does not offer 18 per cent return on equity over a 15-year period," said Nikhil Gandhi, chairman, Skill Infrastructure, which roped in Mukesh and Anand Jain in the Navi Mumbai SEZ.

"I see no reason why Anil or Mukesh should not be interested in infrastructure projects in the city. It's a very good opportunity. In a city with high disposable incomes and crumbling infrastructure, if you build railways and road bridges, people are bound to travel by them," added an expert.

--------------------------------------------------------------------------------
*Pitching for Mumbai's infrastructure Mukesh Ambani*

- Will invest Rs 25,000 crore in setting up an SEZ in Navi Mumbai 
- Bidding for the 22.5 km, Rs 4,000-crore trans-harbour expressway 
- Building a world-class convention centre in the Bandra-Kurla complex 
- A non-compete clause in the family settlement debars him from airport projects for five years.

But an associate like Anand Jain could bid for the Navi Mumbai airport 

*Anil Ambani*

- Will build Mumbai metro's first phase at a cost of Rs 2,356 crore 

- Reliance Energy will expand capacity of the 500-Mw Dahanu plant that supplies power to Mumbai by 1,000 Mw 

- Expected to bid aggressively for the proposed Navi Mumbai Airport 

- Also keen on the sea link project. The Supreme Court will hear a petition from Reliance Energy that challenges its disqualification from the bidding process


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## Bushroda

*Give India a flying start*
2 Aug, 2007, 0357 hrs IST,Nirbhay Kumar, TNN

Building airport infrastructure at a rapid pace in quest for modernisation 

Sustained buoyancy in Indias aviation sector has been appreciated globally, but experts have not failed to notice that lack of adequate infrastructure could be a roadblock. That explains civil aviation minister Praful Patels emphasis on building the countrys airport infrastructure to lay the foundation for long-term growth in both passenger as well as cargo traffic. 

With an open investment regime and liberal policy on bilaterals, the civil aviation minister wants to take aviation to the masses. Among the plans in the pipeline are building airports within 50 km of every significantly large habitat in the country. May sound like a fairy tale to the people of rural India, but thats the shift away from metros which the civil aviation ministry seeks to achieve. 

The domestic aviation sector would grow at a compounded annual growth rate (CAGR) of 20% over the next five years. The growth would, however, stabilise later and over the next 20 years grow at the rate of 12%. There has been pressure on infrastructure in the last two years with air passenger traffic growing at over 25%. But in the long run, airport infrastructure would not be an issue. As the market matures, growth becomes steady and stabilised, said Boeings Dinesh A Keskar. 

The American company has revised its projection for Indias civil aircraft needs for the next 20 years  from 856 aircraft worth $72 billion predicted last year to 911 planes worth $86 billion by 2026. Arch rival Airbus has gone a step further by saying that the country would need 1,100 aircraft valued at about $105 billion over the next 20 years. 

While there is no doubt about the growth potential, the key question that needs to be addressed is building of airport infrastructure to sustain the boom in the long run. 

Combined with expansion of low-cost airlines, which are fuelling growth in the domestic circuit, the civil aviation ministrys plan for liberalisation of international rights is sure to queer the pitch. By not allowing more domestic flights in congested airports like Delhi and Mumbai, the ministry is trying to control the situation, but the policy on international rights may undo the damage control exercise. 

For instance, the ministry plans to allow private carriers to fly abroad even if they have not completed five years of service in the domestic market. This means more private players would be nominated to utilise Indias bilateral landing rights. Therefore, India may have to agree for similar nominations from other countries too, and this is sure to result in more flights landing at gateway airports like Delhi and Mumbai where congestion is already taking its toll. 

Apart from the apprehensions about the health of Air India due to increased competition, this factor is a cause for worry in the case of airport congestion too. However, the civil aviation ministry is confident of managing the situation and providing adequate support for growth. Providing requisite airport infrastructure is a challenge, agrees civil aviation secretary Ashok Chawla. 

To tackle the situation and ensure that infrastructure is not a constraint, the ministry is working on several models of development. We would offer over 300 airports and airstrips to private players for development on the public-private partnership (PPP) model. We would aggressively market the idea once the civil aviation policy is in place, said a senior government official. 

At present, Airports Authority of India (AAI) operates 127 airports including 13 international airports and 25 civil enclaves in the country. There are many airstrips in the country under various state governments which are unused. A number of aerodromes are under the military which could also be used for training purpose, but all this would happen only after the policy is cleared by the Cabinet, he added. 

At present, passenger traffic is concentrated at five major airports. About 70% traffic is confined to these metros with Delhi and Mumbai airports alone accounting for 45% of the countrys 96.4 million passengers. Government is planning to divert traffic to non-metros for distributing growth evenly and to reduce the pressure on metros. 

Cargo traffic is also growing at a fast pace at these airports. From the current volume of 1.6 million, cargo growth is expected to reach 9 million MT by 2020, growing at a CAGR of 14%. AAI along with private players would invest Rs 41,000 crore in non-metro airport infrastructure over the next 4 to 5 years. Out of 35 non-metro airports, expansion and modernisation work would be completed for 24 by 2009. Upgradation of the other 11 would be over by 2010, Mr Chawla explains. 

Non-metro airports would be developed partly through the PPP model. AAI would develop airside facilities and terminal buildings of these airports while city-side development work would be carried out on PPP basis. The government has already awarded contracts for terminal building at 15 airports. For airside development, contracts have been awarded at 24 airports. 

For city-side development at five airports  Ahmedabad, Lucknow, Bhubaneshwar, Jaipur and Indore  bids would be invited by the end of 2007. This includes operation and maintenance of terminal building, cargo and commercial spaces. 

The government is also drafting a policy paper for regional airlines. To spur the growth in smaller cities and towns, incentives in the form of lower landing and ground handling charges are on the cards. Lower capital base may also be fixed to encourage regional airlines. 

The government has also proposed to connect 11 international airports with city centres by metro rail. The airports would also be connected with national highways via six-lane high speed roads. The work on connecting the Delhi international airport with the city centre, Connaught Place, has already started. The first high-speed rail corridor is expected to be operational in 2010 before the Commonwealth Games. The standard gauge rail corridor would cost about Rs 3,200 crore. Delhi International Airport and Delhi Metro Rail Corporation would jointly develop this high-speed corridor. 

To expedite the development of the airport infrastructure, the civil aviation ministry has urged the local authorities to acquire land and remove encroachments. The authorities have also been urged to fast approve city-side development plans. 

Over and above 400 airports and airstrips in the country, there would be a requirement of additional airports. Speaking on the occasion to introduce five new airplanes to the fleet of Air India, Mr Patel said last week: The country would need 500 airports to handle increasing passenger and cargo growth. 

However, the number of infrastructure bottlenecks doesnt end here. According to estimates, there are only 141 usable airports that can handle large commercial aircraft. This means one airport for every 7.7 million people. While in China the population to airport ratio stands at 4.09:1. The same is 1.47:1 in Japan. In the US and Canada, the ratio stands at 0.16:1 and 0.18:1, respectively. 

As traffic moves up, the number of airport would also increase significantly in the years to come. The country is expected to have a good number of private airports, popularly described as merchant airports. Rules and regulations regarding private airports would be finalised by the end of 2007, a senior ministry official said. 

There would be seamless multi-model passenger and cargo traffic growth in the country in which air traffic is an important component. However, airport throughput times for cargo as also linkages with other transport modes need major improvements. Benchmarking against best international practice, there is a long way to go. We need to work on improving airport efficiencies as also establishing multi-modal linkages, IDFC head-PPP Initiative Shailesh Pathak said.


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## Bushroda

*Wal-Mart, Bharti Sign India Wholesale Venture Accord*
By Saikat Chatterjee

Aug. 6 (Bloomberg) -- Wal-Mart Stores Inc., the world's biggest retailer, and India's Bharti Group signed an agreement to set up wholesale stores in the second-most populous nation. 

The 50-50 venture will start ``cash and carry and wholesale'' stores, Rajan Mittal, joint managing director of Bharti Enterprises Ltd., said at a news conference today in New Delhi, where it's based. Wal-Mart had signed an initial accord with Bharti Group in November to start a wholesaling business. 

While barred from opening retail and self-branded stores in India, Wal-Mart is betting it can get a foothold before the government eases restrictions, allowing foreign retailers to expand. Indian sales through store chains may increase by more than eightfold to $97 billion by 2012, according to consultant Technopak Advisors Pvt. 

The venture, known as Bharti Wal-Mart Pvt., will seek to offer ``great prices under one roof,'' said Raj Jain, president of emerging markets at Wal-Mart's international unit. The first wholesale store, which will cater to small retailers, hotels and restaurants, will be opened by the end of 2008, the company said in an e-mailed statement. 

The venture plans to open 10 to 15 wholesale stores in seven years, located in so-called tier-2 cities, or cities other than New Delhi, Mumbai, Bangalore, Chennai and Kolkata, and employing as many as 5,000 people, the company said. 

*`Strong Partner' *

``Wal-Mart has got a strong partner in Bharti; this partnership will give Wal-Mart a lead over other foreign rivals once the government allows overseas companies in retail,'' said R.K. Gupta, who manages the equivalent of $86 million of stocks at Credit Capital Asset Management in New Delhi. ``The agreement will benefit both partners in the long run.'' 

The Bharti Group plans to spend $2.5 billion on a retail network to compete with local rivals, including Reliance Industries Ltd. and Pantaloon Retail India Ltd. That budget doesn't include money for the wholesale venture. 

Mittal said Wal-Mart will be a ``natural partner'' for Bharti when the rules are relaxed on overseas investment. 

Bharti Retail will set up supermarkets, hypermarkets and convenience stores and sell products ranging from food, electronics, clothing and furniture, Sunil Mittal, Rajan's older brother, said in an interview in New Delhi on July 21. The 49- year-old billionaire is starting a retail chain after building India's biggest mobile-phone services provider. 

*Reliance, Pantaloon* 

Reliance, owner of the world's third-largest oil refinery, plans to invest about $6 billion in retailing. The company has more than 200 convenience stores in India. Pantaloon plans to invest $1 billion to increase its stores to 4,000 by 2010. 

Shares of Bharti Airtel Ltd., the country's biggest mobile services provider and part of the Bharti Group, fell 1.3 percent to 861.15 on the Bombay Stock Exchange today. The stock has risen 37 percent this year compared with the benchmark index's 8.1 percent gain. 

The proposed Bharti venture seeks to serve the retail market by supplying it with goods directly from producers such as agriculturists, craftsmen and artisans, Rajan Mittal said. The venture plans to give ``the best of the yields to the farmer,'' he said. 

Bharti's move comes as the expansion of retail chains draws protests from political parties, street vendors and small shop owners affected by the low-prices offered by the chains. 

India's communist parties, key allies of the federal ruling coalition, have sought restrictions on the opening of retail stores by companies such as Reliance Industries. It also opposes foreign investment in Indian retail. 

*Traders, Vendors* 

Small traders and street vendors have led protests in Indian cities such as New Delhi, Ranchi in the east and Indore in the central province of Madhya Pradesh, accusing large chain- store owners, including Reliance, of undercutting them. 

India's Congress party, which leads the federal coalition, has sought safeguards from the government before it allows overseas investment in the nation's retail industry. 

India's economy expanded 9.4 percent in the year ended March 31, the most since 1989, and may grow 8.5 percent in this fiscal year, a pace surpassed only by China among the world's largest economies, according to the Organization for Economic Cooperation and Development.


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## Bushroda

*U.S. Faces Danger of Reverse Brain-Drain, Researchers Believe*
WRAL.com, NC
06 August 2007

_*Our conclusion was that the U.S. is setting the stage for a massive reverse brain-drain, he wrote If we wait 5 years for immigration reform, the illegal and unskilled will still be here, but those that contribute significantly to U.S. competitiveness will be long gone.  Vivek Wadhwa*_

If the United States doesnt make changes in its immigration policy soon, frustrated entrepreneurs, scientists and inventors just may say no to doing business here.

At least thats the opinion of Vivek Wadhwa and other researchers who have been mining data on the contributions and challenges foreign-born technologists make to the U.S. economy.

Our research has shown that things are moving faster than our ability to understand out whether outsourcing is good or bad, writes Wadhawa. Wadhwa, the executive in residence at Dukes Pratt School of Engineering, has accepted a fellowship to the Harvard Law School and will work with them as a non-resident scholar for the next year. He also is working with The Kauffman Foundation on the latest report.

Heres a portion of what they have to say:

While we debate the merits and impact of globalization the trend is gaining momentum. With breathtaking speed, India and its legions of well-trained, English-speaking technical talent are making impressive strides as a base of innovation for multinationals. From writing software and tweaking specs for auto parts just a few years ago, Indian engineers now are starting to design entire next-generation products for a whos who of multinationals, from Boeing and General Motors to Texas Instruments. Meanwhile, China swiftly is amassing the requirements of a technology superpower: Modern research facilities, immense manufacturing infrastructure, universities capable of pumping out hundreds of thousands of engineers and scientists each year, and the worlds biggest consumer market for cars, consumer appliances, and telecom equipment

Much of the work being done by Wadhwa and others has focused on the immigrants trying to get green cards for U.S. residence or those trying to enter the country through programs set aside for tech workers. Wadhwa said the green card wait list is much higher than his original estimates of 200,000 to 300,000. Many of them just may throw up their hands and leave to use their knowledge elsewhere.

What Wadhwa said next is very alarming.

Our conclusion was that the U.S. is setting the stage for a massive reverse brain-drain, he wrote If we wait 5 years for immigration reform, the illegal and unskilled will still be here, but those that contribute significantly to U.S. competitiveness will be long gone.


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## Bushroda

*Tata Consultancy targets finance clients in growth push*
BANGALORE, India 
Turkish Press, MI 
08-06-2007, 10h05

Top Indian software firm Tata Consultancy Services unveiled a new push Monday to get work from banks and finance firms outside the US to lessen its reliance on dollar billing.

Unveiling a new facility in Bangalore, to be staffed by 2,720 people who will increase to more than 3,200 by next March, company officials said they will focus on clients in the Asia-Pacific, the Middle East and Africa.

TCS, as the Mumbai-based software maker is known, and rivals are trying to reduce dependence on a US market that makes up two-thirds of the sales for India's 50-billion-dollar information-technology industry.

The rupee's 10 percent appreciation against the US currency this year is reducing the local-rupee equivalent of every dollar software makers earn, forcing them to look to alternative markets for future growth.

"The whole idea is to present ourselves across multiple geographies," said Subramaniam Ramadorai, chief executive officer.

"I dont think we have any mechanism to control what the government of India does or what the Reserve Bank of India does."

The rupee's surge has been fuelled partly by the central bank's hands-off approach towards foreign-exchange markets and investment flows into an economy expanding more than nine percent a year.

The central bank has been trying to soften the impact of inflation by allowing the rupee to rise, which makes imports such as crude and edible oils cheaper.

TCS is also trying to beat the rupee's appreciation by tapping new customers who pay more and by improving productivity gains, Ramadorai said.

The company has hedged about 2.5 billion dollars of anticipated revenue against the rupee in the financial markets, he said.

Finance firms provide about 40 percent of the revenues for TCS, part of the tea-to-trucks Tata conglomerate, which counts Deutsche Bank, Bank of China, ABN Amro and State Bank of India among its clients.

In the past year, TCS added 63 financial services clients to take the overall number to 225, competing with global giants including IBM and Accenture.

TCS and other Indian software makers have grown rapidly in the past decade by providing software services that help global clients lessen their business costs by leveraging on India's low-cost engineering talent.

That competitive edge however has been eroded by the surging rupee, forcing companies to explore options ranging from working an extra day a week to expanding in China and Vietnam.


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## Bushroda

*India's human resources can fill a global need*
MANIPUR, Aug. 6
M.D. NALAPAT

Not every teacher of the language would find that the numerous versions that pass for English in India have much in common with Shakespeare. For example, Mumbaikars (Bombayites, to the unwary) pronounce "snack" as "snake," terrifying friends from abroad who are offered one, while Punjabis call lawyers -- not entirely incorrectly -- "liars." 

However, to the tolerant, India has become the largest English-speaking country on the globe, with no fewer than 320 million people speaking their own forms of the language. Once an English-speaking tourist has managed to decipher local accents (a task no more difficult than in parts of the United States or Australia) it would be nearly impossible to find a corner of India where this international language is not understood. 

In six years, thanks to an expansion of English teaching in government schools, more than 500 million Indians are expected to speak the language, way ahead of that wannabe English-speaking nation, China. Add to this a Westminster-style legislative system, a British-inspired justice system and wide-open access to cable and the Internet, and it will be seen that the people of India are becoming acculturated into the globalized world at a clip almost as fast as the expansion of the economy. 

Sixty years after freedom from the British Raj, several parts of the country -- notably the south and west -- have internalized the moderate, law-respecting chemistry required to remain in sync with the needs of a modern economy. Given the size and population of India, it is not surprising that there remain regions within the country where the dynamics and chemistry more closely mimic the American Wild West than the present law-abiding climate in much of Europe. 

An analysis of India's 500-plus districts would match higher penetration of the English language (now the signature "chop" of the Indian middle class) with areas that are more stable in terms of law and order and have faster rates of development than others. This is not surprising, given the link between the effective use of English-style institutions and knowledge of the language. 

What does this increase in Indians conversant in the language and social imperatives of Western civilization mean to Europe, faced with declining populations? Rather than Romania, Albania or Bulgaria, it is from India that the continent can find human resources to fuel continued expansion in output and services. An immigrant from the southern Indian cities of Chennai, Hyderabad or Bangalore would be far more likely to make a high net contribution to the country of transfer than an individual who has been resident in Bucharest, Tirana or Sofia. 

This is not simply because of knowledge of English, but acclimatization in the institutions and practices of the Anglo-Saxon world, which has remained not simply the hub of economic progress, but the core of the knowledge economy. Rather than stick to a Mugabist policy of discriminating in favor of one's own ethnic group, countries within the European Union should trawl in India to meet their human resource needs for the coming decades. 

A start has already been made, with negotiations now on between the newly formed Ministry of Overseas Indians Affairs with the governments of France, Sweden, Poland and Belgium to facilitate procedures for the entry of trained personnel from India, a country that trains 1 million engineers and 200,000 doctors and nurses each year, almost entirely in the English language. 

Two countries outside the EU that could benefit from the rising numbers of trained professionals in India are Russia and Brazil, both of which have immense personnel needs. Were the two governments to set up clinics in India that could identify and train prospective migrants in Russian and Portuguese, they would get an economic boost, apart from doing away with hospitals without doctors and schools without teachers. Psychological tests could be given to ensure that those selected had the ability and willingness to adapt to the socio-cultural environment in their new homes. The countries of the Middle East have long used India as a base for sourcing personnel, and other regions could do worse than follow their example. 

Although the Bangalore brothers Kafeel and Sabeel Ahmed, by falling prey to the blandishments of those engaged in a jihad against the West, may -- if guilty -- have blotted the clean copybook of the Muslims of India, yet the difference between the world's largest democracy and the Middle East (or even Muslim enclaves in Europe) is that the action of the two has generated revulsion rather than admiration among their own people, including the Muslim community. Far from celebrating the "martyrs" -- as happens in the West Bank and Gaza -- the luckless parents of the two have publicly expressed their shock and shame at the incident, as has the community at large. 

What some have called their "timidity" or "lack of backbone" makes Indians far more likely to accept the constraints of law in an adopted home than many other nationalities. The absence of a breakdown of law and order following the country's natural catastrophes is another indication of this, an attitude of mind perhaps rooted in the ancient belief in "karma." 

Whatever the causes, the fact remains that India, with its young and professionally trained population, is ideally suited to filling a good share of the deficit in human resources is other corners of the globe.


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## Bushroda

*Wipro Technologies to Acquire Infocrossing*
*Acquisition of data center leader expected to position Wipro as the leader in global Remote Infrastructure Management Business*

CNNMoney.com
August 06, 2007: 09:35 AM EST

BANGALORE, India and LEONIA, N.J., Aug. 6 /PRNewswire-FirstCall/ -- Wipro Technologies, the global IT services business of Wipro Limited , and Infocrossing, Inc. , a US-based provider of IT infrastructure management, enterprise application and business process outsourcing services, today announced that the companies have signed a definitive agreement for Wipro to acquire Infocrossing for $18.70 per share in an all cash deal that will create one of the world leaders in end-to-end IT infrastructure management solutions. The acquisition will be conducted by means of a tender offer for all of the outstanding shares of Infocrossing, followed by a merger of Infocrossing with a Wipro subsidiary. The tender offer is subject to a number of customary closing conditions, including regulatory approvals, and is expected to close by the fourth quarter of 2007.

"Wipro Technologies has identified global infrastructure services as an important driver of growth for the company and is pleased to add Infocrossing, which provides integrated managed infrastructure services to premier global clients," said Suresh Vaswani, President, Global IT Service-lines, of Wipro. "Total Outsourcing Services, which include our IT infrastructure services, grew 75% in the past year proving global clients are increasingly realizing the value of these services. This acquisition of an acknowledged industry leader broadens the data center and mainframe capabilities of Wipro Technologies to uniquely position us in the remote infrastructure management space. Through Infocrossing we are deepening our presence in the United States with the addition of five data center locations and approximately nine hundred employees." Sudip Banerjee, President Enterprise Solutions of Wipro Technologies added, "With its unique Platform based solutions, Infocrossing also brings in significant expertise in Health plan & Payer Management segments. With its proven track record of processing over 175 million claims annually and providing contracted services to over 90 managed care organizations, Infocrossing will considerably enhance Wipro's ADM & BPO offerings to our Healthcare customers."

The global IT infrastructure market has been projected to be $150 billion and the global market opportunity for remote infrastructure management services has been predicted to reach $70 billion, according to industry association NASSCOM. Infocrossing's expertise in hosted and managed IT infrastructure services will enhance Wipro's current service offerings. The Company operates five state-of-the art data centers in the United States and provides a full portfolio of infrastructure management solutions, including server management, mainframe outsourcing, network management and security services. For the twelve months ended March 31, 2007, Infocrossing had revenues of $232.4 million and net income of $9.3 million.

"Infocrossing is pleased to be joining such a strong global organization such as Wipro Technologies," said Zach Lonstein, Chairman and Chief Executive Officer of Infocrossing. "We selected Wipro after conducting a full process and believe that by coupling our strong services and U.S.-based operations with the global delivery model of Wipro Technologies, we will be able to drive additional value for the shareholders and clients of both our companies."

Wipro was advised on the transaction by Citigroup and represented by the law firm of Wilson Sonsini Goodrich and Rosati, and Infocrossing was advised by Credit Suisse Securities (USA) LLC and represented by the law firm of Gibson, Dunn & Crutcher LLP.

Wipro and Infocrossing will hold a conference call with investors on Monday, August 6, 2007 at 2:30 p.m. ET to discuss the announcement. The call-in number for the live audio call beginning at 2:20 p.m. ET is 1-973-633-1010. A live web cast of the conference call will also be available on Infocrossing's website at http://www.infocrossing.com. The webcast may also be accessed at ViaVid's website at www.viavid.net. To access the webcast, you will need to have the Windows Media Player on your desktop. This event is optimized for Microsoft's Windows media player version 9. To download go to http://www.microsoft.com/windows/windowsmedia/download. Wipro and Infocrossing will also hold a conference call on Tuesday August 7, 2007 at 7.00 am Indian Standard Time (9.30 pm US Eastern Time on Monday, August 6, 2007) to discuss the acquisition and answer questions sent to email ID: rajesh.ramaiah@wipro.com. An audio broadcasting of the management discussions and the question and answer session will be available online and will be accessible in the Investor Relations section of the company website at www.wipro.com. The dial-in details of the call are +91 22 2781 3019 / +91 22 6776 3709. Replay numbers are +91 22 6776 3709 (Replay available till September 6, 2007).

Additional Information

The tender offer described in this press release has not yet commenced, and this press release is neither an offer to purchase nor a solicitation of an offer to sell Infocrossing, Inc.'s ("Infocrossing") common stock. Investors and security holders are urged to read both the tender offer statement and the solicitation/recommendation statement regarding the tender offer described in this press release when they become available because they will contain important information. The tender offer statement will be filed by Wipro Limited ("Wipro") with the Securities and Exchange Commission ("SEC"), and the solicitation/recommendation statement will be filed by Infocrossing with the SEC. Investors and security holders may obtain a free copy of these statements (when available) and other documents filed by Infocrossing or Wipro with the SEC at the website maintained by the SEC at www.sec.gov. The tender offer statement and related materials, solicitation/recommendation statement, and such other documents may be obtained for free by directing such requests to Infocrossing, Inc., Investor Relations, 2 Christie Heights Street, Leonia, New Jersey 07605, (201) 840- 4700.

Safe Harbor Statement

This release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. As such, final results could differ from estimates or expectations due to risks and uncertainties, including, but not limited to: completion of the tender offer and merger; incomplete or preliminary information; changes in government regulations and policies; continued acceptance of the Company's products and services in the marketplace; competitive factors; closing contracts with new customers and renewing contracts with existing customers on favorable terms; expanding services to existing customers; new products; technological changes; the Company's dependence upon third-party suppliers; intellectual property rights; difficulties with the identification, completion, and integration of acquisitions; and other risks. For any of these factors, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, as amended.


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## Bushroda

*GVK achieves financial closure for Uttarkhand electric project*
*Alakananda Hydro Power Company Limited (AHPCL), a GVK group company, Monday announced that it achieved financial closure for its 330 mw Shrinagar hydro electric project being set up in Uttarakhand at a cost of Rs.20.69 billion.*

Alakananda Hydro Power Company Limited (AHPCL), a GVK group company, Monday announced that it achieved financial closure for its 330 mw Shrinagar hydro electric project being set up in Uttarakhand at a cost of Rs.20.69 billion.

The project will be funded through a debt equity ratio of 80:20, said a company statement here.

The debt component of Rs.16.55 billion is funded in rupees (Rs.14.94 billion) and in US dollars (Rs.1.61 billion). The equity of the project will be Rs.4.14 billion, said A. Issac George, chief financial officer, GVK power and infrastructure Limited.

The debt has been syndicated by Axis Bank (formerly UTI Bank). Punjab National Bank is the lender's agent and Axis bank is the security trustee.

The banks/financial institutions participating in the consortium include Andhra Bank, Central Bank of India, Dena Bank, Indian Bank, India Infrastructure Finance Company Limited and Industrial Development Bank of India Limited.

AHPCL is implementing the project following an implementation agreement signed last year with the governments of Uttar Pradesh and Uttarakhand.

As per the power purchase agreement, Uttar Pradesh Power Corporation Limited (UPPCL) has agreed to purchase 88 percent of the energy generated by the Shrinagar Power Project. The other 12 percent shall be supplied free of cost to Uttarakhand. 

The electro-mechanical works have been awarded to Bharat Heavy Electrical Limited (BHEL). The plant will be ready for commercial operations by early 2011.

GVK is also developing a 600 mw thermal project in Punjab and two hydro projects totalling 700 mw in Uttarakhand.

The GVK-led consortium has been mandated to operate, manage and develop India's busiest airport, the Chhatrapati Shivaji International Airport in Mumbai.

GVK has so far invested over Rs.50 billion into infrastructure projects and has on hand projects in the pipeline of over Rs.130 billion.


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## Bushroda

*Jet Airways debuts in continental Europe*
6 Aug 2007, 1255 hrs IST,PTI

BRUSSELS: Jet Airways on Monday launched its debut flight from Brussels to India, becoming the first private Indian carrier to fly to and from continental Europe. 

The flight to Mumbai was flagged off by the Indian ambassador to Belgium and the European Union Dipak Chatterjee from the Brussels National Airport on Monday morning. 

On Sunday, Jet Airways launched its first flight from Mumbai to the US with a two-hour stopover in Brussels. 

The airline will fly from India through Brussels to Toronto on September five and to Johannesburg in November. Jet Airways established an operational hub in Brussels in May to provide enhanced connectivity between India, Europe, Africa and North America. 

The airline has also entered into a codeshare agreement with Brussels Airlines - Belgium's main carrier - for flights from Brussels to Delhi, Mumbai, Toronto, Stockholm, Oslo, Birmingham, Geneva and Madrid. 

The airline expects to expand the agreement to include 25 routes ex-Brussels, Bernard Guisset of Jet Airways Belgium said on Monday. 

Guisset, who heads the 35-people strong Europe office, added that the airline's future plans include 10 daily flights from Brussels to cities in India and the US, Canada and mainland Europe. 

"Jet Airways was looking for an opportunity to combine its expansion plan to USA and Canada with an efficient hub in Europe together with a stronger national carrier offering a wide network ... we have found it all at Brussels," the airline's chairman, Naresh Goyal said in a statement. 

Jet Airways has plans to operate flights from Bangalore, Ahmedabad and Chennai to Los Angeles, Chicago and New York (JFK) via its Brussels hub. 

Currently seven EU carriers fly to India, while two Indian carriers - Air India and Jet Airways - fly to Europe. 

Each week more than 130 flights operate between India and EU. According to the European Commission report on civil aviation relations with India, the number of seats available on scheduled nonstop flights between the EU and India has increased by 70 per cent to about 5 million since 1990. 

A total of 17 city-pair routes operate between India and the EU, where Germany holds the biggest share of the nonstop scheduled traffic, followed by the UK, France and the Netherlands. 

This is expected to change as the Brussels-hub becomes more important for Indian carriers. The city is a major cargo-hub for the European region. India's state-owned international carrier, Air India, is negotiating to create an operational hub in Brussels. 

International passenger traffic to India is expected to grow by 7.8 per cent annually according to the International Air Transport Association, while the Indian cargo market is expected to grow by 8.4 per cent annually. 

Presently, Indian airports handle about 2.5 million international passengers and 13,200 international flights during a peak travel month.


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## Bushroda

*HAL 34th among top 100 global defence firms*
6 Aug 2007, 1842 hrs IST,IANS

BANGALORE: Aerospace major Hindustan Aeronautics Limited (HAL) has climbed 11 places to reach the 34th position in the list of top 100 defence companies in the world. 

The list, released by US-based Defence News magazine, saw HAL improving its position from 45th with Lockheed Martin, Boeing, BAe Systems, Northrop Grumman and Raytheon occupying the top five slots in that order. 

The ratings are based on a company's sales and turnover, and HAL's leap forward is being attributed to a series of upgrade programmes and new projects. 

Reacting to the new rating, HAL chairperson Ashok K. Baweja said: "These are exciting days for us and the current ranking is a testimony to our renewed focus on all fronts. We are hopeful of breaking into the top 25 next year and our current order book position is just a pointer to that." 

HAL, now a Navratna company, recorded a sales turnover of Rs.77.84 billion (USD 1.82 billion) during the 2006-07 fiscal to March 31 and recorded a growth of 46 percent over the previous year. 

The company's profits before tax soared to Rs.17.44 billion, a jump of 55 percent over the last year, while exports registered a growth of 45 percent at Rs.2.71 billion.


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## Neo

*Guys,

This thread is getting flooded...30+ daily posts are way too many to read and I'm affraid members will lose interest ( I certainly have) if we don't cut the number and restrict ourselves to news thats really matters.

Anytime I want to post anything I have to go back atleast two or three pages to check if the news is already been covered and I simply don't have time to read it all, I wonder if anyone else does.

Therefor I regret to inform you that I won't be updating this thread anymore, its all yours.

Good luck!
Neo*


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## Bushroda

Got it Boss.

I'll scale down


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## Bushroda

*Land of success and 100-hour weeks* 
Peter Foster, South Asia correspondent
Telegraph.co.uk, United Kingdom
07/08/2007

It is only a year since two young Indian entrepreneurs founded their internet start-up business providing cut-price online maths tuition to British and American school students, but already they are surrounded by the sounds of success.

In the New Delhi basement that is home to Transwebtutors.com the builders are in, drilling and hammering to create more space to accommodate a business that is growing at a rate of 400 per cent per annum.

For Nishant Sinha, 24, and Aditya Singhal, 25, the business represents an investment of faith in the burgeoning Indian information technology sector whose exports, currently growing at 30 per cent a year, are projected to reach £15 billion by 2010.

The two young men are the wide-eyed representatives of a new generation of smart, hard-working young Indians who are enjoying opportunities that their parents could only have dreamed of a generation ago.

Both men gave up lucrative jobs with the American management consultancy firm, Kurt Salmon Associates, to strike out on their own, aspiring in their own small way to emulate the giants of Indian IT industry such as Wipro and Infosys.

Their personal stories reveal the giddy pace of the social and economic changes which the educated classes in India have experienced since the economic liberalisations introduced in 1991 began to bear fruit.

When Nishant, the son of a bank manager from Patna in Bihar, one of India's poorest and least developed states, landed his job at Kurt Salmon he earned double his father's salary at a single stroke.

"At 26, my father started work in a bank and was completely focused on his job," he says. "He had no other options in front of him and was providing financially for the rest of his family. The experience was very different for me."

Nishant says it was his father's aptitude in maths that helped him win a place at the Indian Institute of Technology (IIT) in New Delhi - for which 200,000 students compete annually for just 3,500 places.

"I studied until 2am or 3am every night for several years to pass the IIT entrance examinations and my father tutored me all the way," he says.

"He wanted better opportunities for his children than he had enjoyed himself."

Aditya, from Aligarh, a provincial town in Uttar Pradesh, 90 miles east of Delhi, passed the same IIT examination, opening an avenue of opportunity which his father had been denied as a young man 25 years ago.

"At that time things were very conservative," he says. "My father was the youngest child and he had to stay at home and look after his parents, which was the tradition in those days. 

"So after three years working for an engineering firm in Delhi he had to return home.

"In my case the situation was completely different and much more liberal. My parents have done everything to support me, including investing in the business. I'd say I live a life very similar to the average young guy in Britain or the US."

The difference, perhaps, is in the ambition and work ethic of young Indians such as Aditya and Nishant who work at least 100 hours a week trying to develop their business.

Talk of Europe's 35-hour week leaves them shaking their heads.

Both could have opted to remain in their safe, salaried positions at Kurt Salmon, but despite the deep misgivings of their parents, decided instead to bet their futures on the Indian economy which is expanding at a rate of more than eight per cent a year.

Their optimism for the future of India and their business is palpable. 

They have clients in Britain, Australia and Canada and already several American businesses are asking if they can take a financial stake in Transwebtutors.

"India has so much potential," says Aditya. "You can see it everywhere.

By 2025 we'll be one of the youngest countries on Earth and with GDP growth continuing at eight to 10 per cent the possibilities for development of all kinds are massive.

"We both had an instinct that we needed to do something that created value both for ourselves and this country and that wasn't going to be achieved by being a salaried employee.

"After all, we are the cream and if we can't create value, then who will?"


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## Bushroda

*Wal-Mart to roll out cash-and-carry network across India*
Sanjay Jha and Randeep Ramesh in New Delhi
Guardian Unlimited, UK 
Monday August 6, 2007

Wal-Mart, the world's largest retailer, today gave a vote of confidence in the booming Indian economy with plans to roll out a network of cash-and-carry superstores across the country.

The venture, with Indian conglomerate Bharti, will see 10 to 15 wholesale stores in the next seven years beginning in 2008. The companies will each have an equal stake in the venture, which will be branded Bharti Wal-Mart and will employ at least 5,000 people. 

Rather than targeting Delhi, Kolkata, Mumbai or Chennai - India's four main cities - the joint venture is placing its bets on fast-growing smaller urban centres. 

"India has 12m pop-and-mom stores and less than 1m are catered for at the moment," said Raj Jain, India country president of Wal-Mart. 

A company spokesman denied the venture would end up like Sam's Club, a successful US wholesale exercise by Wal-Mart that became virtually a retail operation. 

No foreign direct investment is allowed in the retail sector, except for single-brand stores such as Nike. By entering the wholesale market, Wal-Mart will gain a foothold ahead of its many competitors should the government allow foreign retailers to expand. But it is years behind German retailer Metro, which has a presence in five Indian states and last month offered to spend 6.5bn rupees (£82m) on a wholesale operation in north India. 

"The wholesale model is poised for big success in India," said Arvind Singhal of KSA Technopack, a retail consultancy. Mr Singhal said sales through store chains were projected to increase eightfold to £49bn in five years. 

Bharti, which owns India's largest mobile phone network and has a farm business, has the reach and distribution but not the technical know-how to run a large retail business. "I think by improving the cold-chain technology and getting the logistics right, Wal-Mart could help India become an agribusiness exporter," said Mr Singhal.


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## Bushroda

*In an ideal world, who can afford to get real?*
Sydney Morning Herald, Australia
August 7, 2007

Money might rule the world, but without ecology there is no economy; we need a new 'ism' - naturalism - Satish Kumar tells Dana Nekich.

The modern environmental movement is essentially selfish, says Satish Kumar. And efforts to save the planet will always be ineffectual if the only motivation is to save our own skins, the 71-year-old author, activist and philosopher believes.

Instead, Kumar believes we must recognise the divine in the natural world, seeing ourselves as part of nature, not superior to nature.

"We need a new 'ism' - naturalism," he says. "It means we belong to the land, not that the land belongs to us. We need to have humility. The Aboriginal community in Australia is already there, recognising themselves as passing trustees of the land. We need to remember we borrow the land from future generations; we don't inherit it from the past."

Indian-born Kumar, who visited Sydney recently to promote his ideas, has devoted his life to investigating links between ecology and spirituality, literally walking the talk. At the age of nine he became a child monk, going barefoot, begging for food and wearing a cloth over his mouth to avoid inadvertently killing an insect.

Then, in 1962, he became inspired and outraged by the incarceration of the English philosopher and peace campaigner Bertrand Russell and decided to walk to the four nuclear capitals of the world. Over 18 months, he trekked to Moscow, Paris, London and Washington in a protest against nuclear arms.

He has been called "a kind of international catalyst for unorthodox thinking" by The New York Times and an "eco-pioneer" by The Guardian. He continues to edit a British magazine, Resurgence, which calls on its readers to live a decentralised, simple life.

Kumar makes no apologies for his idealism, contrasting the record of idealists with the "realists".

"What has the realistic approach done to the world?" he said. "Realistic leaders have brought about global warming, a population explosion, the First World War, the Second World War, the Vietnam War and a war in Iraq. When you're a realist, you undergo a confusion of vision and values. You just do what is pragmatically necessary.

"The track record of the idealists is better. Jesus Christ, the Buddha, Mahatma Gandhi, Mother Teresa and Martin Luther King were idealists, and they have transformed the world.

"The two greatest failures of capitalism are global poverty and global warming. At the moment, the economy rules ecology but ecology should come first. In its right order, the economy is a wholly owned subsidiary of ecology. Without ecology, there is no economy."

Kumar says Westerners are trapped in what he calls a "moneyocracy".

"Money is ruling the world," he says. "What we need instead is a biocracy, a biological rule, a rule of life. The rule of money has led to waste, one of the greatest shames of civilisation. To maintain the market value of produce, we allow food to rot in warehouses, we burn crops and we throw food into landfills, while people are hungry. It's because we have confused money with real wealth. In the ecological system, wealth is forest, water, clean air, quality of life and human communities." And the answer to this paradox lies in grassroots sustainability.

"Start to eat organic food so we see less toxic chemicals, fertilisers and pesticides on the land," Kumar says. "Eat less meat, and eat organic meat, to eliminate battery farms.

"Install solar panels and windmills in your home and stop relying on fossil fuel energy sources. Harvest water supplies at the household level so we don't have to depend on the government for water.

"Stop pursuing GDP and start thinking about national happiness. Make more time for yourself. Work part-time if you can and let some of that time flow back to the community."

Kumar asked his Sydney audience: "Do you think you're educated? I don't care if you can speak French, you have an MBA, you've travelled the world, you've accumulated plenty of money and you run your own business - you're uneducated if you don't know how to make a compost heap."

You Are, Therefore I Am by Satish Kumar is published by Green Books ($35.95).

Kumar says Westerners are trapped in what he calls a "moneyocracy".

"Money is ruling the world," he says. "What we need instead is a biocracy, a biological rule, a rule of life. The rule of money has led to waste, one of the greatest shames of civilisation. To maintain the market value of produce, we allow food to rot in warehouses, we burn crops and we throw food into landfills, while people are hungry. It's because we have confused money with real wealth. In the ecological system, wealth is forest, water, clean air, quality of life and human communities." And the answer to this paradox lies in grassroots sustainability.

"Start to eat organic food so we see less toxic chemicals, fertilisers and pesticides on the land," Kumar says. "Eat less meat, and eat organic meat, to eliminate battery farms.

"Install solar panels and windmills in your home and stop relying on fossil fuel energy sources. Harvest water supplies at the household level so we don't have to depend on the government for water.

"Stop pursuing GDP and start thinking about national happiness. Make more time for yourself. Work part-time if you can and let some of that time flow back to the community."

Kumar asked his Sydney audience: "Do you think you're educated? I don't care if you can speak French, you have an MBA, you've travelled the world, you've accumulated plenty of money and you run your own business - you're uneducated if you don't know how to make a compost heap."


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## vips

I want to suggest all the friends to post only valuable post which shows only great achievements in business, technology by india INC. It would be great to cut indian author post as they sound too patriotic to me. 

Thanks bushroda and friends for posting such great articles.. of foreign authors..


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## Bushroda

Thanx Vips & sorry for this late reply. I took a little break from posting on this thread.


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## Bushroda

*India At 60*
Amartya Sen 08.13.07, 12:00 PM ET
FORBES, NY

It is 60 years now since I, like many other schoolchildren, stayed up till midnight, bleary-eyed, to hear Jawaharlal Nehru, soon to be prime minister of India, give his famous speech on India's "tryst with destiny." 

This was on the eve of India's independence from British rule on Aug. 15, 1947. India would not only be, we were told, a fully democratic and secular state but also a country that will fight for "the ending of poverty and ignorance and disease and inequality of opportunity." It is interesting to ask how far along we have gone in 60 years in fulfilling that momentous resolve.

On the democratic front, India's success was immediate and came with astonishing speed. India became overnight the first poor country in the world to be a full-scale democracy. And there was--and is--success enough here. There was a short-lived hiccup in the 1970s when there was a brief attempt to change the system, but when the government sought endorsement in a general election for those changes, it was driven out of office by the voters. 

There have been regular and orderly elections, and the ruling parties have vacated office when defeated in general elections, rather than calling in the army. India has also had other essential features of a democracy, in particular continued freedom and vigor of the media and independence of the judiciary, with the Supreme Court often disallowing decisions of those in governmental office on constitutional grounds.

So democracy has indeed flourished nicely in India, and that has been the case right from the time when India became independent after two centuries of authoritarian British colonial dominance. India's democratic success is sometimes seen only as a consequence of British rule, but that is comparatively recent history shared by a hundred or more other countries that also emerged from the empire, none of which has had quite the easy success that India has had with democracy.

In fact, as I have tried to argue elsewhere (in my book The Argumentative Indian, Piccador, 2005), India's long argumentative tradition and toleration of heterodoxy, going back thousands of years, has greatly helped in making democracy flourish with such ease. This would be remarkable enough for any poor country, but it was a much harder task in a land with a great many major languages, each with a long and proud history, and with a rich and old literature.

And there was, of course, the challenge of the multiplicity of religions in India, with nearly every religion well represented. Jews came to India in the first century; Christians in the fourth; Parsees immigrated as soon as persecution began in Persia in the late seventh century; and early Muslim traders started coming to the western coast of India from the eighth century, well before the later invasion of the north of India by Muslim conquerors in the late tenth century onwards.

Even though British India was partitioned into India and Pakistan in 1947 on religious lines, the vast majority of Muslims on the Indian side chose to stay on in India, and today India has nearly as many Muslims as Pakistan and many more Muslims than Bangladesh. India chose to have a solidly secular constitution, and it is as a secular democracy that India has flourished. Secularism has been threatened from time to time by actions of sectarian groups, but the massive support for secularism across India has asserted itself again and again, the last time in the Indian general elections in 2004. In the political field, India's success today is a firm vindication of what, 60 years ago, it breathlessly tried to achieve.

The story is very different on the economic side. The growth rate of the Indian economy remained stuck at its low traditional point of 3% a year for a very long time. The economic policies needed substantial reform. In the old days, some wise guys used to put forward the thesis that India's growth rate was low because of its democracy, which seemed to many of us rather ridiculous. But with continued low growth, that anti-democratic point of view gained some ground among high-octane commentators (never with the general public, though). When India changed its economic policies, the growth rate picked up as expected, without India becoming any less of a democracy to achieve this result.

The economic changes came amid much hesitation and huge resistance. To start with, India hastened slowly. The 1980s, which saw some moderate reforms, produced some quickening, with an economic growth rate of 5%, which may now seem sadly slow but was much faster than what had happened in the early decades of independence, not to mention a century of colonial semi-stagnation. But the economy was still full of problems connected with financial instability, trade imbalances and choking public administration. In general, what used to be called the "license Raj" made business initiatives extremely difficult and at the mercy of bureaucrats (large and small), thereby powerfully stifling enterprise while hugely nurturing corruption.

When Manmohan Singh came to office in the early 1990s as the newly appointed finance minister, in a government led by the Congress Party, he knew these problems well enough, as someone who had been strongly involved in government administration for a long time. (This was after his stint as a very successful university professor at Delhi University where I was privileged to have him as a colleague.) And Singh's response was sure-footed though cautious, given the complex politics of policy reorientation. While the going has been rough from time to time, the direction of policy change has been unmistakable from that point onwards, endorsed even by successor governments run by other political parties.

India is now getting used to its much higher rate of growth, first around 6% a year and now about 8%, occasionally touching 9%. It is also remarkable that India's main success has come not in traditional areas of exports but largely on newer industries, with a large component of high-tech, such as the information technology industry, which has rapidly grown to be a giant from a very modest beginning. Another area is that of pharmaceuticals. Even though in that field the Indian entry began with generic drugs (with a huge reduction--sometimes a cut of 80% or so in the price for many essential drugs, like AIDS medicines), it is now going much more into new research as well.

There is reason enough to celebrate many things happening in India right now. But there are failures as well, which need urgent attention. For example, there is still widespread undernourishment in general and child undernutrition in particular--at a shocking level. The failures include, quite notably, the astonishing neglect of elementary education in India, with a quarter of the population--and indeed half the women--still illiterate.

The average life expectancy in India is still low (below 64) and infant mortality very high (58 per 1,000 live births). It is certainly true that India has narrowed the shortfall behind China in these areas--that is, in life expectancy and infant mortality--but there is still some distance to go for the country as a whole. The problems are gigantic in some of the more "backward" states like Bihar and Uttar Pradesh. And yet there are other states in which the Indian numbers are similar to China's. 

There is also one state, Kerala, where the life expectancy is higher than China's (75 years at birth, as opposed to China's 72), and infant mortality lower (12, as opposed to China's 28). Kerala has had good state policies of supporting school education for all and making sure that it works, and has provided free health care to all for many decades now. Even though now many better-off families choose private medical care, everyone still has the option of having health care from the state.

If India has to overcome these failures, it has to spend much more money on expanding the social infrastructure, particularly school education and basic health care. It also needs to spend much more in building up a larger physical infrastructure, including more roads, more power supplies and more water. In some of these, the private sector can help. But a lot more has to be spent on public services themselves, in addition to improving the system of delivery of these services, with more attention paid to incentives and disciplines, and better cooperation with the unions, consumer groups and other involved parties. 

On the basis of some investigations that have been done by the Pratichi Trust (a trust I was privileged to set up in 1999 through the use of my 1998 Nobel money), it is clear how much needs to be done and can be done to change the organizational structure of school education and basic health care. (We studied only one part of India, but the results from other studies from elsewhere in India are often quite similar.)

However, aside from organizational change, more public funds, too, will be needed. Where will the money come from? Well, to start with, India can spend a much higher proportion of its public resources on school education and on basic health care, on both of which its percentage share of public spending is among the lowest in the world.

There is, furthermore, good news that has been discussed astonishingly little. If the total revenue, from taxes and other channels, of the central and state governments keeps pace with the rapid growth of the economy, when the economy is growing at 8% a year, that would be a big rate of increase of available funds for public services. As it happens, government revenue has persistently grown faster than the growth of gross domestic product: in 2003-04, the economic growth of 6.5% was exceeded by the revenue growth of 9.5%, and in 2004-05 to 2006-07, the growth rates of 7.5%, 9%, and 9.4% have been bettered, respectively, by the expansion rates of government revenue (in "real terms"--that is corrected for price change) of 12.5%, 9.7% and 11.2%. 

Money will continue to come very rapidly into the government's hands if the fast economic growth continues. What is critically important is to use these generated resources to remedy India's continuing deficiencies, in particular in basic health care, in school education and in rapidly expanding its physical infrastructure.

So, as we look back over the last 60 years, some things have happened well enough, and some, where the gaps were large, have started to catch up. However, there are other areas in which there are still huge shortfalls. These gaps would need to be urgently remedied. We know what to do, and there are resources to do it. What we need now is some determined action to do what we can do and must do.


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## Bushroda

*Sixty Years Of Progress*
Narayana N.R. Murthy 08.13.07, 12:00 PM ET
FORBES, NY

Bangalore, India - India completes her 60th year as a free nation on Aug. 15, 2007. However, 60 years is a short span in the life of a nation, and barely marks the first baby steps of a toddler. Hence, any assessment of India has to be generous and optimistic.

We have made decent progress in several areas during the last 60 years. We have produced world-class scientists, engineers, journalists, soldiers, bureaucrats, politicians and doctors. We have built complex bridges and dams. We have sent satellites and rockets into space. We have increased the number of doctors tenfold. 

We have increased life expectancy from 32 years to 65 years. We have built about 1.25 million miles of new roads; we have multiplied our steel production by over 50 times and cement production by almost 20 times. We have increased our exports from a few million dollars at the time of independence to more than $125 billion now, with about $150 billion of imports. 

There is an equally convincing set of data to show that we have a long way to go in certain other areas. A whopping 350 million are illiterate; 260 million people are still below the poverty line; 150 million people lack access to drinking water; 750 million people lack decent sanitation; 50% of children are below acceptable nutrition levels; and basic medicines are unavailable in 75% of villages. 

Be that as it may, today I want to focus on a few major achievements that have transformed the lives of our people in a way we never imagined would happen. 

*Green Revolution *
Perhaps, no other Indian initiative has enhanced the national confidence as the Green Revolution initiated by Dr. M.S. Swaminathan. This revolution, which started in 1965, not only transformed India into a food-surplus economy from a food-deficit economy but also triggered the expansion of the rural, non-farm economy. The lives of at least 400 million to 500 million Indians have been uplifted due to this initiative. From being a perennial importer of grains, India became a net exporter of food grains 10 years ago. 

*White Revolution* 
Coming from a generation that experienced an acute shortage of milk, it is unimaginable that, today, we have become the largest producer of milk in the world. The credit goes to the extraordinary vision of one person, Dr. Verghese Kurien. In a nation where children are malnourished, such abundance of milk has offered us the opportunity to fight malnutrition with the means produced in India.

*Economic Reforms Of 1991 *
The economic reforms of 1991--initiated by the late Narasimha Rao, Dr. Manmohan Singh, Shri P. Chidambaram and Dr. Montek Singh Ahluwalia--opened up the minds of Indian corporate leaders to the power of global markets, helped them accept competition at home and abroad, and raised the confidence of consumers. Our hard currency reserves have gone up from a mere $1.5 billion in 1991 to over $220 billion today. The reforms encouraged entrepreneurship and gave confidence to businessmen and entrepreneurs to dream big, create jobs, enhance exports, acquire companies abroad and follow the finest principles of corporate governance. 

*Independent Media, Brave Journalists *
The success of a democracy depends upon certain important values of governance: fairness, transparency and accountability. The freeing of media, particularly television, has laid the foundation for improving these values in our governments. The courage, enthusiasm and zeal to seek truth of scores of idealistic journalists like N. Ram, Arun Shourie, Sekhar Gupta, Sucheta Dalal, Barkha Dutt and Rajdeep Sardesai are what make us feel confident that the future of this country is safe.

*Telecom Revolution *
No other technology has brought India--the urban and the rural--together so effectively as the 500-line EPABX designed and implemented by the Center for Development of Telematics under the leadership of Sam Pitroda. This program brought fresh confidence to the people, as they could reach out, in a jiffy, to their loved ones, officials and doctors, just to name a few. People no longer feel that they live in isolation. 

*Space Technology* 
Yash Pal's Satellite Instructional Television Experiment blossomed into a full-scale television facility connecting millions of villages of India. Television has made our political masters realize that their actions and inactions will be seen and judged by every citizen--from the forgotten villages of Assam to the activist villages of Kerala. This technology has given voice to the opinions of a billion people--the rich and the poor, the educated and the uneducated, and the powerful and the disfranchised. 

*Atomic Energy *
Dr. Homi Bhabha conceptualized the Indian nuclear program and initiated nuclear science research in India. His program has made possible successful utilization of nuclear energy in defense, power generation, medicine and allied areas. Our peaceful use of nuclear energy has raised India's prestige as a mature and responsible player in this field. 

*Software Revolution *
N. Vittal's Software Technology Program, along with the economic reforms of 1991, laid the foundation for this industry's spectacular progress. India's information technology exports grew from a mere $150 million in 1991-92 to $31.4 billion in 2006-07, and is projected to reach $60 billion by 2010. The Indian IT industry is unique for several reasons. It focused on exports; benchmarked with the best global companies; followed the finest principles of corporate governance; created the largest number of jobs in the organized sector; and demonstrated that Indians, too, could succeed in the most competitive global markets. 

What do these eight programs have in common? They were all led by visionaries. These visionaries adopted and improved upon global benchmarks and settled for nothing less despite tremendous odds. In each of these initiatives the national government was a genuine catalyst whose extraordinary leaders helped fashion the India of today. They and so many others created an India where all Indians have the freedom to design, innovate, create and build their futures together. What a remarkable story of how the people and the government can work together to achieve what was once thought impossible.


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## Bushroda

*From Emerging To Surging*
Shanker Annaswamy 08.13.07, 12:00 PM ET
FORBES, NY

BANGALORE, India - As India celebrates 60 years of independence, it is appropriate to reflect upon our national direction, how business operates in a rapidly growing economy and some future challenges.

India is moving from the chrysalis of an "emerging" economy to a "surging" economy and becoming a center of innovation, the critical differentiator to ensure future growth for any nation today. India is working to transform its longstanding tradition of innovation into an engine of economic and social progress to create a better tomorrow for its citizens. 

In ancient days, India conceived of "zero" and the decimal system. In modern times, India is nurturing the world's largest democracy, one of the world's fastest-growing economies and a multicultural society with tens of religions and languages. 

Since its liberalization in 1991, the Indian economy has been on an exhilarating ride. The country is in the midst of a remarkable growth phase. Gross domestic product was 9.4% in 2006 after exceeding 8% annual growth for the previous three years. A growing middle class and a skilled young workforce with increased purchasing power are helping to drive hyper-growth rates. Several industries--including information technology, financial services and telecommunications--are posting double-digit increases. 

Growth is not limited to large enterprises. Small- and medium-sized businesses are flourishing in cities around the country, where more than 1.7 million companies employ fewer than 500 people. 

More than 60% of India's labor force works in the services sector, as in the U.S. and the U.K. Companies that originally turned to India for commodity-type outsourcing needs are now locating higher-level software development and managed services here, employing an estimated 1.6 million citizens. Now, India is perceived as not only a place to save labor costs but also as a place where innovation can take place. The combination gives India the formula for the growth it needs. 

Private enterprise, supported by sound governmental policies, has been the engine of growth. India's entrepreneurs are using their technology and business prowess to create extremely favorable conditions for investors. Venture capital firms invested $508 million in India during 2006, almost double the amount in 2005. Private equity firms invested a record $7.5 billion last year, almost three times the amount from a year earlier. 

Mergers and acquisition deals are reported to have increased by 73% in the first four months of 2007, to $37 billion from $21 billion in 2006, and India's leading stock exchange index, the Sensex, stands at nearly 15,000 even after the recent global pullback. 

Various think tanks are already working to understand and guide India's journey up the innovation path. Led by the Confederation of Indian Industry, a coalition of business, government and academic leaders prepared a National Innovation Agenda for India. The group's findings were released in May 2007. The " Innovate India" report suggests a strategy and action plan, including development of a framework to evaluate and monitor India's progress in several areas. 

The study found that innovation in India needs to extend from urban to rural businesses. In the area of human capital, the report suggests an examination of cultural values of creativity, risk taking, fear of failure and the empowerment of workers, as well as the encouragement of young people to walk the innovation route by aiming to become scientists. 

We're already taking steps to execute the innovation agenda and are finding creative ways to solve problems and transform organizations. Business growth in India has kicked off a race to modernize infrastructure and improve the way that industries operate. Technology is being aligned with business strategy to enhance efficiency and productivity on many fronts. 

India's Department of Telecommunications hopes to expand the country's telecommunications infrastructure to 500 million telephone lines by 2010, many of which will be mobile phones rather than fixed-line connections. India remains one of the most attractive countries for mobile telephone operators and wireless equipment makers. One company, Bharti Airtel, has more than 40 million mobile phone subscribers. 

Since a sizable number of India's residents do not have access to mainstream banking or financial services, there's a need for alternative approaches. A biometric, multifunction smart card has been developed especially for Janalakshim Social Services, a Bangalore-based micro-finance institution, to help its large group of clients with relatively small accounts conduct financial transactions. 

Health care providers of all sizes--ranging from primary care clinics and specialized hospitals to alternative-therapy and wellness-management centers--are springing up throughout India and demanding technology solutions. It's estimated, that by 2012, India's spending on health care could exceed $44.9 billion. The recently launched National Health Data Network, which caters to midsized hospitals of 50 to 200 hospital beds, uses a common set of software applications to share clinical and financial information to maximize patient care while holding down the cost of processing claims. 

The efforts are not limited to private industry. Many public sector organizations are reinventing themselves by promoting e-governance initiatives to help their citizens. India's highest tax body, the Central Board Direct Taxes is looking to enhance operational efficiencies by creating an integrated, standardized and scalable information technology infrastructure to support its vast network across India. This initiative is a critical part of the transformation project undertaken by CBDT to improve citizens' experience in managing their taxation requirements, while increasing the agency's tax base and revenues. 

These examples demonstrate how innovation doesn't just happen. It requires a process; investment from business, government, science and academia; and a passion for fostering an environment that leads to innovation. We need to continue to identify and execute changes that will benefit individual organizations and society at large and lay the foundations for a stronger India. 

_Shanker Annaswamy is managing director, IBM India/South Asia. He was co-chair of the Confederation of Indian Industry's Advisory Council for the National Innovation Mission for India, which published the "Innovate India" report in May. _


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## Bushroda

*Do You Have A 'Chindia' Strategy?*
Peter Sondergaard 08.13.07, 12:00 PM ET
FORBES, NY

STAMFORD, Conn. - There is no hotter topic in the high-tech industry than the impact of China and India on the industry and the world at large. If you are a strategist or a decision maker in almost any enterprise, anywhere in the world, you see the impact of India and China in new waves of technology products and services in events, decisions and strategies featured on corporate Web sites and in international news coverage. 

The bilateral economy of China and India is in its infancy. Yet new momentum suggests a powerful relationship is building. China-India--"Chindia"--enterprises will have access to complementary skills and resources, and, in turn, will have the potential to lead many global markets. 

New joint ventures between Indian information technology (IT) service firms and their Chinese counterparts are early illustrations of how a formidable Chindia economy could develop. Indian firms bring to the table world-class software expertise and leadership in global markets. Chinese partners have legions of capable, low-cost employees and greater know-how with clients in Japan, Korea and other Asian countries where English is less prevalent. 

We see Chindia today as an early work in progress, an entity still being formed. Outcomes are far from determined, but early signs indicate continued movement in a positive direction. Leaders in China and India remember a time, before the 1962 border war, when the two countries traded cries of Hindi Chini bhai bhai-- "Indians and Chinese as brothers." China's Premier Wen Jiabao repeated it in 2006 while visiting the Indian Institute of Technology in New Delhi. As the economic strength of China and India increases worldwide, business strategists and IT decision makers need a toolkit to monitor their bilateral commercial activities.

Much of the West's mainstream attention on China and India thus far has focused on the West's outsourcing of manufacturing and low-end service jobs. Optimistic observers believe the current flow of jobs across the Pacific is immaterial in the long run because innovation remains strong in Western countries, and innovation produces new jobs and economic growth. 

This view is absolutely correct on the surface, but it hides the underlying truth of what is happening in India and China today: Both countries are getting better at driving technological innovation. More and more, traditional Western high-tech firms are sourcing not just the assembly of their products from India and China but also the innovation that drives these products.

If you are in a business, you need a China strategy and you need an India strategy. You need to monitor how China and India create alliances in specific markets, alliances under what is coming to be known as the "Chindia bloc." The first signs are already clear in IT services, in automotive components and in a few other sectors.

China and India increasingly will be the dominant economic stories on the world stage, a trend that may well extend through most of the 21st century. Despite mounting stakes, however, the quality of information, research and advice on how to make key decisions related to China and India is uneven. Executives and managers need a comprehensive view not only for understanding China and India, separately as well as together, but also for gauging future threats to and opportunities for enterprise.

For effective decision making, business leaders need:

--Accurate information on the current state of global IT competitiveness in India and China for their internal markets. 

--A set of realistic scenarios that explores not only the possibility of continued rapid economic growth in India and China but also potential social, political or other disruptions to these economies. 

--A series of milestones that define pivotal issues in each scenario and of signposts that over time point to milestone outcomes to help determine when and where to invest, cooperate, compete, analyze or ignore these countries. 

What is the significance of the current level of China-to-India and India-to-China commercial interactions? Where do the two countries stand along a potential path toward a unified economy of Chindia? Modest steps recently under way provide only a hint of what India and China collectively could bring to the global economy and global balance of power in coming decades.

China and India hardly qualify today as trading partners by conventional standards for industrialized economies. Total bilateral trade amounted to $18.7 billion in 2005, more than twice the 2003 level. This is only a small fraction of each country's foreign trade. China's total foreign trade in 2005 was $1.4 trillion, rising 23% from 2004. India's foreign trade in the 2005-06 fiscal year amounted to $241 billion, up 28%. Yet the annual growth rate of internal Chindia trade is outpacing those high-stepping totals, at an estimated 30% to 40%. 

Patterns of a widening bilateral commercial partnership are visible in increasing high-level official visits and pronouncements, conference participation, cultural exchanges and, most of all, forecasts of accelerating goods, services and investment flows across the Himalayas.

There are many unanswered questions about the economic futures of China and India separately, of China and India together, and indeed of the two nations' future impact on the global economy. Can innovation be outsourced? Is it possible to compete in Asian markets without piracy of intellectual property draining away the opportunities? Will China's and India's mounting successes in world markets create a protectionist backlash among developed economies?

The answers you seek may well be among the most important for setting the long-term course and success of your enterprise. The methods by which you pursue them certainly will shape the quality and insight of what you find. As China and India increasingly redefine the future of technology and innovation, knowing how to map a course into that future will be a core competency of the most accomplished travelers.

_Peter Sondergaard is a senior vice president at Gartner, where he is the global head of Gartner Research, responsible for the management and direction of the global research organization. Gartner's recent book, IT and the East, examines how China and India are altering the future of technology and innovation. _


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## Bushroda

*A Second Chance At Independence*
Robyn Meredith, 08.13.07, 12:00 PM ET
FORBES, NY

Sixty years ago, India won her political freedom from Britain.

Today, India stands at another historic threshold of independence. But this time, the freedom at stake is economic, not political.

The runaway success of India's outsourcing industry has brought big gains to a tiny slice of India's 1.1 billion people and has put the nation on the map of the world's multinationals. After many decades of economic isolation and stagnation, India now has momentum in the global economy, and the chance to finally move a majority of its people out of poverty in the coming decades.

But India faces a huge challenge because it has a disproportionately young population that is soon to become a *working-*age behemoth in need of jobs. India must create the conditions now that stimulate job creation. If India fails to fully unleash its economy while it has the attention of investors from around the world, it will pay a heavy price if young workers go from school and college to joblessness.

By 2030, India is expected to become the most populous nation on Earth, overtaking China around the point when both reach 1.45 billion. Also in 2030, economists predict, India will surpass Japan to become the world's *third-*largest economy after the U.S. and China. In that year, India will have by far the largest workforce in the world, because a disproportionate 68% of its population will be of working age. Therein lies the challenge.

India will then be home to some 986 million *working-*age people, an increase of 270 million from 2006. Demographers call this a "demographic dividend phase, a kind of sweet-spot that normally helps a nation's economy grow faster because its economically active population tends to have a higher savings rate. All things being equal, economies boom when countries have larger labor forces--just as the American economy boomed after the big post-war generation of baby boomers entered the *workforce.

For India, however, the demographic dividend could prove a grave threat. Today, 31% of India's 1.1 billion people are under *age 16. When the demographic bubble begins to reach working age, India will need far more jobs than it now has to keep living standards from declining. Creating these jobs for India's poor--most of whom live on less than $2 a day--is literally a matter of life and death.

India is thus at a critical juncture. "A unique constellation of factors now objectively indicate that India is on the threshold of a golden age of growth," explains former Finance Secretary Vijay Kelkar. "If we seize this moment, India can transit out of poverty, and coming generations can enjoy an era of unprecedented prosperity and a decisive voice in shaping the global economic order and world politics." But he offers a warning too: "It is necessary that we choose wisely, because wrong choices now can mean all future generations would remain poor forever."

A crisis prompted isolationist India to embark on much-delayed economic reforms in 1991, and those reforms and the ones that followed have unleashed the nation's economy in several sectors. Indian outsourcing companies like Infosys, Wipro (nyse: WIT - news - people ) and TCS have led the charge, and during the past five years, multinational companies including IBM (nyse: IBM - news - people ), GE, Intel (nasdaq: INTC - news - people ), Accenture (nyse: ACN - news - people ), Philips and Microsoft (nasdaq: MSFT - news - people ) have hired thousands of white-collar workers in India, bringing big-wage gains to India's college-educated workers and helping the Indian economy.

But plenty of Indians remain locked in a prison of dollar-a-day poverty. They deserve freedom too.

Whether they--and the greater number of workers coming through the demographic pipeline--will escape poverty depends on whether the Indian government will continue to encourage economic growth. To do that, it needs new roads and highways, new factories and other projects that will create hundreds of millions of better-paying blue-collar and agricultural jobs. The more enduring economic lift will come from the creation of *private-*sector jobs.

So far, the signs are not all encouraging.

What has frustrated those who want to see India continue its economic gains is that the leftist parties in the current coalition government have, in the name of protecting the poor, held up the very economic development likely to create jobs for them. 

Populist politicians have delayed the building of airports and roads that could help attract new factory jobs. Sometimes their motive is to defend squatters who would be displaced. Sometimes they are defending local enterprises that object to infrastructure contracts being given to experienced foreign companies. Either way, much-needed economic growth is slowed.

In the summer of 2006, a modest plan to sell off minority stakes in *government-owned companies was scuttled when leftist parties threatened to pull out of the coalition and bring down the government. And the new special economic zones being championed by the Indian Commerce Ministry are at risk, too, as politicians maneuver for advantage. The Indian Finance Ministry has been grousing that lower tax rates in the zones will crimp government revenue, while Sonia Gandhi, the powerful leader of the Congress Party, complains that they are bad for *farmers.

The political strains come in part because of India's colonial history and in part because of the disparities between India's two worlds. Under billboards in Bombay touting the latest cellphones, credit cards and insurance policies marketed to India's new yuppies, the old India endures: stray dogs hover as men dig through piles of trash, vendors at ****** roadside stalls sell glasses of sugarcane juice for a penny, men working like oxen push *10-*foot-*long wooden carts stacked high with building materials through city streets.

What authoritarian China accomplishes by fiat, democratic India must accomplish through persuasion and logrolling. The Indian government thus must convince poor voters that the methods it uses to spur economic development will bring them gains--something that is sometimes easier to see from a distance.

India must move past the *on-*again, *off-*again reforms that slowed its economic rise until the 1990s, or the nation will risk missing a historic chance to propel hundreds of millions of people out of *poverty. Today, nothing is holding India back but the anti-outsider and anti-globalization reflexes left over from the Colonial period--an era that ended six decades ago.


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## Bushroda

*The Big Question: Sixty years after partition, why is India doing so much better than Pakistan?* 
By Andrew Buncombe, Asia Correspondent 
Independent, UK
Published: 14 August 2007 

*Why are we asking this now? *

Pakistan celebrates the 60th anniversary of its independence from Britain today (14 August) while India marks the occasion precisely 24 hours later. For much of the long campaign for independence - led by Mahatma Gandhi - the campaigners' demand was for the creation of a single independent nation in which the rights of Hindus and Muslims would be protected. The campaign for an independent Pakistan grew during the 1930s and 1940s, under the direction of Mohammed Ali Jinnah, the leader of the All India Muslim League and the man who served as Pakistan's first Governor General. In the years since Partition India has proudly and robustly championed its occasionally chaotic democracy while Pakistan has been ruled by military dictators for more than half its history (1958-71, 1977-88, 1999-present). Now, at the age of 60, India's image is that of a resurgent, confident regional power racing to compete with China and the West. Meanwhile, Pakistan's image - at least in the West - is as a broken, backward country that provides a safe haven for extremists.

*How correct are these perceptions?*

In recent years India has certainly been making rapid economic progress. Its economy is now the 10th biggest in the world and a new middle class of up to 200 million has been created. The economy is currently growing at about 9 per cent a year. Pakistan's is also growing. One government minister said recently it was the third fastest-growing economy is Asia. Over the next four years it is expected to grow at about 6 per cent. The UN Human Development Index - which measures a series of economic and lifestyle indicators - ranks Pakistan 134th out of 177 and India 126th. In India and Pakistan, life expectancy is 63.6 and 63.4 years respectively, the adult literacy rates are 61 per cent and 49 per cent and the GDP figures are $3,139 and $2,225. However, the Gini Co-efficient, which measures a country's economic equality, suggests there is a slightly greater disparity between the rich and the poor in India than in Pakistan.

*And what about politics?*

India never misses an opportunity to remind people that it is the world's largest democracy. There is a broad swath of mainstream political opinion represented. The left has a long history in India, particularly in places such as Bengal. Meanwhile 60 years after independence, Pakistan's leader, General Pervez Musharraf, who first seized power in a coup in 1999, is desperately seeking to hold on to his position ahead of elections, technically scheduled to take place before the end of the year. Of the many difficulties he faces is the increased threat from extremists, largely situated in the country's north-west where Islamabad's ability to exert influence - and also perhaps its desire to exert influence - is greatly reduced. In the aftermath of the Lal Masjid operation this summer which saw more than 100 people killed, there has been a backlash against police and troops. The US - which has been a crucial backer of General Musharraf both politically and financially - has grown increasingly unhappy with his record at confronting extremists. The public of Pakistan appear poorly served by their leaders and yet there appear few genuine alternatives to the roster currently seeking popular support - a roll-call which includes former prime ministers Benazir Bhutto and Nawaz Sharif, who both intend to return to Pakistan from exile to contest the election.

*Are Pakistan's military dictators to blame for all its problems?*

India's economic transformation dates to a series of reforms that were introduced in 1991 when the government removed many restrictions and opened up the country to foreign capital. Tariffs were reduced and financial markets were opened. One of the architects of the reforms was the current Prime Minister, Manmohan Singh. Pakistan's attractiveness to foreign investors, meanwhile, remains hobbled by the country's political uncertainty. At the weekend, General Musharraf claimed that the development of both Pakistan and Afghanistan was being held back by a "a small minority that preaches hate, violence and backwardness". Yet a number of commentators have pointed out that Pakistan's military leaders have paid little attention to developing the country's economy and have spend vast amounts of the nation's revenues on its military budget. Even when civilian leaders have been in power, the Pakistan military - a major owner of business, land and logistical operations - has retained crucial power.

*Is there another side to all of this?*

Yes. For all the confidence of its politicians and wealthy elite, India is a country that still faces huge problems. It remains riven by the caste system, especially in the rural areas, and the majority lives in abject poverty. A report published last week suggested that 77 per cent of Indians were living on 20 rupees (25p) a day. "For most of them, conditions of work are utterly deplorable and livelihood options extremely few," said the report by the state-run National Commission for Enterprises in the Unorganised Sector. And while India's middle class is frenziedly buying up consumer goods that for a long time were unavailable, the country's infrastructure remains utterly inadequate; roads are congested, ports and airports have insufficient logistical capacity and even the biggest cities are routinely struck by electricity cuts and water shortages. Many believe that India's head-long pursuit of consumerism is not the correct path for the country to take and that too many people are not being included in the country's progress.

*How do Pakistanis react to the portrayal of their country versus that of India?*

Since Partition the relationship between the two countries has been deeply competitive. There have been three full wars fought between them and several other conflicts, most recently in 1999 when Pakistani troops and fighters entered the Indian side of the Line of Control in Kashmir. The fighting threatened to escalate. There was huge worldwide concern because by that time, both India and Pakistan were nuclear powers. India carried out five nuclear tests in May 1998 and Pakistan responded in kind just days later. An earlier war in 1971 coincided with the eastern part of the country's own conflict with West Pakistan - a conflict that would result in East Pakistan securing its own independence as Bangladesh. India supported the separatists in their efforts. Anecdotally, one finds that the overwhelming majority of Pakistanis resent the portrayal of their country as a terrorist haven and go out of their way to show friendliness and hospitality to a visitor. They are also unfailingly inquisitive about the situation in India and whether the image of India's economic transformation is genuine.

*Is India successful because of its own efforts?*

*Yes...*

* Politicians took crucial decisions that helped transform the country's economy

* Indian politicians have proudly protected the country's democratic tradition

* India has insisted that foreign companies must work with Indian firms, thereby helping turn Indian companies into international players

*No...*

* India's large internal market has made it a hugely attractive option for foreign corporations

* India's large number of English speakers has helped it develop itself in industries such as the service sector

* India has not been entirely successful. There are still huge challenges facing the country


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## Bushroda

*Sunset, sunrise: The dramatic birth of modern India*
*At the cusp of Britain's exit and the rise of Indian independence there was unlikely leadership and untimely love*
By Yvonne Zipp
Christian Science Monitor, MA 
from the August 14, 2007 edition

Today, India is the world's most populous democracy, with a fast-growing economy that stamps Mohandas Gandhi's face on every 10 rupee note. Sixty years ago, it was unclear if the democracy would survive its first year. 

After the partition of India in 1947 to create Pakistan and what became Bangladesh, riots erupted as Sikhs, Hindus, and Muslims began slaughtering one another. The atrocities lasted for weeks, and while no one knows how many people died, the most commonly cited number is 1 million. The people who had fought for decades to win India's independence from Britain never really got a chance to celebrate the victory achieved on Aug. 15: They were too busy trying to stop the bloodshed. 

Indian Summer: The Secret History of the End of an Empire, Alex von Tunzelmann's first book, is a sweeping narrative history about the five historic figures at the heart of independence: Jawaharlal Nehru, India's first prime minister; Gandhi, the country's spiritual leader; Mohammed Jinnah, founder of the Muslim state of Pakistan; and Louis "Dickie" and Edwina Mountbatten, the glamorous but unlikely couple who had been sent to extricate Britain from its empire. 

Complicating matters, the widowed Nehru and Edwina were conducting an affair, von Tunzelmann writes. Had it become widely known, the scandal could have been disastrous for the three countries. 

Despite the book's subtitle, it's unclear what's "secret" about this history. Von Tunzelmann is witty, erudite, and thoughtful about her subject, but "Indian Summer" doesn't contain any revelatory discoveries. 

As for the dishier topics, while the book jacket goes on breathlessly about the romance between Edwina and Nehru, well, this isn't "The Jewel in the Crown." Von Tunzelmann is too serious a historian to make the affair a central focus of her book, and Edwina and Nehru themselves vowed their work would take precedence over their relationship. With the country ravaged by mobs that targeted women and children, they had other things on their minds than their next tryst. 

Von Tunzelmann is an opinionated and sardonic writer, and is perfectly willing to take on both saints and heroes. Neither Winston Churchill nor Gandhi fares well under her treatment, although they supply her with ample ammunition. When asked to send food during the Bengal famine of 1943 (after Britain had hoovered up the area's grain supplies to support the war), Churchill not only refused but sent a telegram asking, if millions of people were starving, "why Gandhi hadn't died yet." He is also quoted as saying, "I hate Indians. They are a beastly people with a beastly religion." 

Gandhi, meanwhile, is portrayed as a terrible father and a supporter of Adolf Hitler. Von Tunzelmann also argues that, had it not been for Gandhi's dithering, India could have been independent as early as the 1920s. "Gandhi's need for spotless moral perfection hamstrung his party's progress. His principal object was to make the Indian people worthy of freedom in the eyes of God. The object of actually achieving freedom ... was secondary." 

Nehru comes out of "Indian Summer" as the true hero. Von Tunzelmann's attitude toward the two leaders can best be summed up in the following statement: "Nehru saw social and economic hardship as a cause of suffering, and therefore wanted to end it. Gandhi saw hardship as noble and righteous, and therefore wanted to spread the blessings of poverty and humility to all people." 

Von Tunzelmann also seems rather fond of Edwina, who transformed herself from a promiscuous socialite in the 1920s to a tireless humanitarian during World War II and the unrest in India. The Mountbattens had an unusually fraught marriage: Dickie was devoted to Edwina, but it quickly became clear she would never be faithful to him. Pragmatically, he quietly supported her affairs with a series of men, including Nehru. (He also had a mistress of his own.) For her part, Edwina was ferociously jealous of Dickie's relationships with other women, including their own daughters. 

But von Tunzelmann argues that Nehru and Edwina were the great loves of each other's lives, and that in India Edwina found greater fulfillment than at any other time in her life. "The heiress to millions had never been happier than when she was working in the hot, rough, and ****** refugee camps that had been set up across the riot-scarred Punjab." 

India also seemed to bring out the best in her husband. Certainly, nothing in his earlier career would have indicated that he would have been a liberal champion of Asian self-rule or, frankly, anything but a feckless bumbler. 

During World War II, Mountbatten thoroughly earned his nickname as "master of disaster." He was prone to ramming his ship into other British vessels and his hare-brained schemes included an aircraft carrier molded from an iceberg. Von Tunzelmann makes the most of this rich material, which would be funny if so many young men weren't being killed. But she defends Mountbatten against charges that he deserved a court martial for the speed with which he conducted Britain's exit strategy from the subcontinent. 

"There is no reason to think that the slow-boiling of communal tempers under martial law for an extra nine months would have reconciled everybody to live happily ever after," she writes. And as for the charge that he should have beefed up British troop presence to stem the violence, well, "he could not magic soldiers out of thin air." 

Observers of modern international politics will see some obvious parallels to Iraq of today. Von Tunzelmann herself does not make this explicit. 

While the chapters on the partition of India and the subsequent riots are some of the strongest in the book, the narrative of "Indian Summer" does have a few hiccups. The beginning, as von Tunzelmann jumps between her characters in India and Britain, can seem a little disjointed. Nehru's early years are especially frustrating, since a reader doesn't get to see his rise to power or his first meetings with Gandhi, whom Nehru revered as a second father despite their differences about religion. 

But once World War II arrives, the book hits its stride in much the same way that the war helped Edwina discover a purpose for her abundant energy.


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## Bushroda

*Indias charging elephant tramples our stereotypes*
DOUGLAS FRASER, Scottish Political Editor 
The Herald, UK 
August 14 2007 

One flag, one president, one currency, its constitution the world's most complex, and one of the world's biggest market-places smothered in red tape. A babble of 22 official languages, racial and religious tensions, and the perpetual strains of regional exceptionalism. And all this resolved - messily and miraculously - by the common bond of a peaceful, democratic ideal.

It could be the Eurosceptic's nightmare, 50 years after the European ideal was set out. Instead, it is the Indian reality, 60 years tomorrow since Jawaharlal Nehru declared his country had made "a tryst with destiny", and was waking "to life and freedom".

Since then, some such anniversaries have focused on how much the British colonial legacy remains intact; railways, bureaucracy, the English language. More recently, a review of India's progress has been a head-scratching "isn't it doomed to fall apart?"

advertisementThis time, the anniversary provides a space to consider India's new status as fast-growing economic giant. That means it deserves a more complex and sophisticated understanding, requiring a long look back at a neglected history to see the way ahead.

A BBC documentary series, starting later this month, sets out to explain the country as a cradle of civilisation, older perhaps than language itself, and one in which its distant past and spirituality lives noisily alongside the cutting edge of software design.

It provides the perspective of 400 years ago, when India represented one-third of the world's economy. The great Mughal emperors are reckoned to have ruled over the country with the highest income level in their world. In 1770, it was the second biggest economy. By 1970, it hit a low point, with 3% of the world's economy.

Exasperating, astonishing, a cacophony of contradiction and utterly fascinating, India's billion people offer more diversity than Europe. More live in abject poverty than the whole of sub-Saharan Africa combined. Yet India has had nuclear weapons for 34 years, a space programme and is now defining the frontiers of the globalised economy.

Its challenges remain awesome: poverty, inequality, corruption and dismal governance. State education fails woefully. Its infrastructure is shocking: bone-jarring roads, slowing access to market, and poor irrigation to handle the monsoon.

Yet it has weathered so many challenges and internal tensions that it is hard to see what could pull it apart now, except, perhaps, the strain of inequality. Television newly offers the poor a window into the prosperity they lack, while the richer cities may prefer a future divorced from their backward country cousins.

Those with opportunity have it abundantly. Some 2.5 million Indians graduate from university annually, many in science and technology. A social revolution is putting young women into the workplace for the first time. The diaspora travels and settles round the world, using exceptional entrepreneurial drive and its own networks, while remaining plugged into Mother India.

Goldman Sachs is often quoted in India for projecting its economy past the US one, taking second place only to China within a generation. Income could have risen four-fold by 2020, with demand for cars up five times and four times more oil consumed.

And those comparisons with the emerging Chinese dragon are obviously inviting. They are lazily lumped together in the globalised world's mind, as two vast nations already shaping everyone's lives and doing so more in future.

What is less noted is that they are economic competitors - India doing well on services and China on manufacturing - as well as strategic rivals. They have fought one war, in 1962, over a disputed part of the Himalayas, and while China flexes its economic muscle by upgrading its military hardware, India provides a geopolitical counterweight to the south. To its north-west, Pakistan - also marking its 60th birthday, but with much less to celebrate, teeters on the edge. President Musharraf has supported western interests against radical Islamism on its Afghan and Iranian borders. If he falters, India is seen as the next best bastion. It is used to trouble on that border, having fought three wars with Pakistan.

The United States was suspicious of India through the Cold War, while it sought to be nonaligned, talked socialist values and bought arms from the Soviet Union. That has changed. Washington has agreed to share nuclear know-how with India - signalling that the dominant superpower can see the importance of having a big friend in a dangerous part of the world.

That is just one partner that is re-thinking its Indian stereotypes. The same is true of each of us whose on-screen jobs could be more efficiently done in Mumbai or Bangalore, reaching far beyond call centres. While the Indian economic elephant has been slow to get going, it carries a powerful momentum. It also remembers its proud past, and will shape its global friendships on its own terms.


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## Bushroda

*India: Moving Up The Food Chain*
Promod Haque 08.13.07, 12:00 PM ET
FORBES, NY

I lived in New Delhi until 1972, when I came to the United States to go to school. Looking back 35 years, I think the biggest changes to India have been to the economy. Back then, the country was a controlled economy. The country didn't quite gain independence until the late 1980s and early '90s, when the economy began to transition into a capitalistic free-enterprise market system. 

The initial growth of information technology in India was providing staff augmentation. You had companies in the U.S. that were looking to employ support staff and engineers at lower salaries. That built some confidence in India's technology expertise, and led to India becoming a resource for the Y2K problem. Then came the dot-com bust and the recession in the U.S., which led to even more IT work going to India. In the last few years, more of the work began shifting beyond outsourcing into product development. 

Someday, many U.S. companies will have more employees in India than in the U.S. IBM (nyse: IBM - news - people ) has around 57,000 employees in India and plans to get to 80,000. The company has 130,000 domestic workers. 

There is a lot of talk about the fact that salaries continue to rise in India and that retention is a big problem. People want to know if they should stop outsourcing to India and find a lower cost-center somewhere else.

I don't think that has to happen. There are some interesting parallels between what happened in the U.S. 20 years ago and what is happening in India right now. If you go back to the mid-1980s in the U.S., the cost of technology was dropping and the cost of human labor was starting to rise. And because of the rising wages, the country tried to increase productivity, and that led to the massive use of technology in the U.S. enterprise system. 

Cisco (nasdaq: CSCO - news - people ), Oracle (nasdaq: ORCL - news - people ) and SAP (nyse: SAP - news - people ) were all making products that were aimed at increasing productivity for a workforce that was becoming more and more expensive. That paid off, and eventually productivity gains went up faster than the wages. I think you will see the same thing in India; the economy will continue to grow, and the use of technology will continue to grow.

Another challenge India has had to face is that the country is too far away from most markets. The challenge is that the best leading-edge products and disruptive technologies are always built in collaboration with customers that are early adopters of technologies. Silicon Valley companies work very closely with companies such as Fed Ex, DHL, Morgan Stanley (nyse: MS - news - people ) and Goldman Sachs (nyse: GS - news - people ). 

When India starts using technology to increase the productivity of its own companies, innovation will happen on a more accelerated basis, and the early adopters will become corporations in Delhi, Chennai and Bangalore. 

Reliance Industries wants to revolutionize retail in India. No longer will there be hundreds of small merchants, but big malls and grocery stores like in the U.S. Reliance is now using technology aggressively to improve the supply chain. Wal-Mart (nyse: WMT - news - people ) wants to do the same thing and is partnering with Pharti, a very large enterprise in India that runs a large wireless operator called Airtel. Wal-Mart is bringing the latest and greatest technology from the U.S., and Reliance will have to do so as well. Whoever does not use the best technology will fall behind.

In 2009, the banking sector in India is going to be totally open for foreign banks to come in. Only Citicorp is there now. It is still highly regulated and very difficult for banks to enter. When Bank of America (nyse: BAC - news - people ), Barclays (nyse: BCS - news - people ) or ING (nyse: IND - news - people ) walks in there and starts buying local banks, they too will bring in their latest and greatest technologies.

Large Indian enterprises will be forced, for competitive reasons, to use technology very aggressively so that productivity gains outpace wage increases. 

We are also seeing Indian enterprises beginning to buy companies in the west. Tata Group just put in a bid to buy Jaguar from Ford. Another Indian company, Mahendra (the equivalent of Caterpillar (nyse: CAT - news - people ) in India), is also bidding for the business. A few weeks ago, the U.S. sold Yipes, a market leader in Ethernet services, to Reliance, a giant company in India.

This is similar to what happened with the Japanese in the 1980s. Fujitsu, Hitachi (nyse: HIT - news - people ) and Sumitomo were investors with us in a lot of our startups. Hitachi bought the IBM disk-drive division. 

As more and more technology develops and more talent becomes available in India, the world is starting to see India move up the food chain.


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## Bushroda

*Biofuel Must for India, Say Experts*
By ASHOK SHARMA 08.13.07, 12:20 PM ET
FORBES, NY

NEW DELHI - Energy-starved India should invest in spurring large-scale cultivation of jatropha, a plant with seeds that can be mixed with fuel to form biodiesel, experts said Monday.

India produces nearly 30 percent of its annual crude oil requirement of nearly 120 million metric tons (132.28 million US tons). It imports 70 percent of its requirements, and experts see jatropha as a potential wonder plant.

Two key issues restraining the growth of the Indian biofuel industry were lack of sufficient government encouragement and limited availability of feedstock like jatropha and pongamia, said a study released at a workshop by Frost and Sullivan, a global growth consultant company.

India's biodiesel production is currently a few thousand metric tons against a demand of 2.6 million metric tons, at a five percent blending level with normal diesel fuel, Mark Dougan, a company consultant said.

India needs to promote jatropha cultivation more aggressively, said Sandeep Chaturvedi, president of the Biodiesel Association of India. The plant grows in arid terrain and doesn't need regular irrigation.

The experts said that the Indian government's decision last year to spend 500 million rupees ($10.7 million) to boost jatropha cultivation was not enough.

The government should reduce excise duties to boost the country's biofuel industry, Doughan said, adding that it could also enact a law making it mandatory for oil companies to sell a certain percentage of biofuels.

With India's economy growing at more than 9 percent annually over the next few years, the country's energy demand is expected to grow exponentially.

India's Petroleum Ministry estimates that by 2009 India will have around 3.1 million hectares (7.7 million acres) of jatropha plantations, and will have identified another 40 million hectares (98.8 million acres) of wasteland to grow the plant. The ministry also aims to plant around 7.5 million jatropha saplings on vacant land along the country's extensive railroad tracks.


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## Bushroda

*Bottlenecks To Growth*
Robert Malone, 08.13.07, 12:00 PM ET
FORBES, NY

The accomplishments of India are matched by daunting infrastructure and logistics problems. 

The romance and mystery of India's past have transformed into a quest to overcome historically obsolete facilities by use of new services, technology, and information systems. Corporations and executives worldwide are focusing beyond China to India as a place where they might get things cheaper, and perhaps even better.

One of the key bottlenecks to this move, however, is the reality that India spends about 14% of its gross domestic product on its logistics system, versus 8% for developed nations. That does not spell cheap transportation, moving or storage. 

The nation has a way to go both in adopting modern logistics methodology and in repairing a largely sub-standard transportation infrastructure. It is no wonder that the majority of foreign companies doing business in India are using the nation for programming and call centers. Neither requires much more than a workable information technology infrastructure and little in the way of goods transfer. That's where the bottlenecks develop and costs escalate.

The hope, however, is to extend India's success with software into manufacturing. Divay Goel, a senior executive of Drewry Shipping Consultant's office in India, says India wants to repeat its software success. But he warns that unwieldy labor laws and bureaucratic red tape continue to delay progress.

Overlaying Goel's concerns are the need for managers to make good use of seasoned carriers like FedEx (nyse: FDX - news - people ), UPS (nyse: UPS - news - people ) and DHL, as well as long-standing and expert third-party logistics providers (3PLs) such as Menlo Worldwide or SEKO. The advantage of the big carriers and the 3PLs is they have an existing infrastructure (both physical and electronic). They offer services to those Indian companies that are prepared to reach out. 

Nevertheless, India has achieved an impressive 8.5% growth in GDP in 2006 and his heading toward 9% growth this year--this in a country that has democratic institutions and an independent judiciary in contrast to China.

The paradox of combining inefficiency and growth says a great deal about India today. The $113.1 billion of Indian imports in 2005 compares with its exports of $76.23 billion. This increased trade, even if it shows a substantial net deficit, is both a blessing and a curse. More money is chasing more business. Yet the nation still is saddled with terrible water problems, broken roads and inadequate transportation at all levels (trucks are often unlikely to have rear-view mirrors; drivers rarely have seat belts or communication systems). 

India's infrastructure of roads, rails, ports and airports is the most vulnerable part of its supply-chain presence. India's roads consist of 2.4 million kilometers of paved roads and more than a million kilometers of unpaved roadway. In both cases, much of this network is questionable as to reliability for modern transportation needs. While India's rail network exceeds 63,000 kilometers, the best two-thirds are broad-gauge and old. 

Randy Sinker, vice president of international operations for SEKO, a 3PL operating in India, suggests that, "while India may be the second choice after China, the transportation infrastructure is not keeping up with the growth of business in India. The biggest problem is getting goods from a seaport to truck or rail, and those are the only choices. Once on rail or truck, the second problem is getting goods inland. The rail system is very antiquated and has not been updated. It is slow and congested, while India's highway system is not what it needs to be. It is dilapidated." 

India's major ports are Haldia, Vishakhapatram, New Mangalore, Mumbai, Jawaharlal Nehru Port Trust and Kandla. (Mumbai appears to be gaining fast. The new government is planning on building new facilities in New Mangalore and Krishnaptnam.) But according to Sinker, Sri Lanka ports are serving India now for large container ships. Still, even these are very congested. This can mean many extra days, or weeks, to get goods to or from an importer or exporter in India. 

India's air service consists of 334 airports, 239 of which are equipped with paved runways. There are 17 major airports, but only New Delhi, Mumbai, Chennai and Kolkata are what might be considered fully developed airports by international standards. Again, there is delay.

Kamal Nath, the minister of commerce and industry for India, states that overall, India has to invest $450 billion between now and 2012 to keep up with growth.

Vineet Agarwal, executive director of Transport Corporation of India, says a host of logistics activities are already being outsourced to foreign contractors, including import/export management, out and inbound warehousing, labeling and packaging and inventory management. There is a big gap--electronic networking. India is still light on supply-chain management, warehouse management and logistics management.

The gap is, to a degree, being filled by foreign third-party logistics companies working throughout India. Menlo Worldwide, a Con-way (nyse: CNW - news - people ) company, is a big player in India. Another 3PL, SEKO, offers air, ocean, ground transport, warehousing, and customs services. This means being able to connect a local company to their complex global logistics network to accomplish freight-forwarding activity. 

"The country has the largest population of consumers in the world, which is significant because these customers are attracting an increasing quantity of consumer goods into the country that impacts not only the amount of international trade but global logistics requirements," says Bill Wascher, chief executive of SEKO.

Those who wish to become a part of this growth in India might listen to Randy Sinker's advice: "Do your homework and talk to other companies in a similar business that are already in India: go over, kick the tires, come to understand the culture, get up to date on the government and its regulations (or red tape)."

The three major international carriers have made large investments in India and play a vital role. UPS is investing in new UPS Stores in New Delhi, Mumbai, Pune and Bangladore. DHL has been a service provider in India for decades in rail, truck and sea logistics.

Michael Ducker, president of FedEx Express International, says, "India is known for being a growing information economy, but it is rapidly moving into manufacturing. FedEx connects over 4,000 cities in India with logistics services." FedEx deals with specialized shipments of high value goods where speed to market is critical--including precision tools, engineered goods, fashion apparel and jewelry. The presence of FedEx allows small and large companies in India to connect to the global marketplace. Ducker sees India's government making infrastructure (air, sea, land and telecommunications) investments a top priority. He also believes that leading Indian executives are looking beyond simple transportation and warehousing, toward the complexities of the advanced technology and management practices of the supply chain.

"Manufacturing is growing at double digits yearly. Small entrepreneurs in India are now looking toward the globe. India has very young workforce, and this will become a major advantage point for the development of its economy," Says Rajesh Subramaniam, senior vice president for international marketing of FedEx services. 

India may solve its logistics/supply chain and infrastructure paradox; even if it takes a decade to unravel the red tape and make the investments, the nation is on its way.


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## Bushroda

*Banking: An Engine Of India's Growth*
Ruth David, 08.13.07, 12:00 PM ET
FORBES, NY

Mumbai, India - Every year around August, scribes go scouting for people born in the historic year India became free, 1947. One such independence child is also known for spearheading a revolution at the nation's largest private sector bank, ICICI Bank.

Kundapur Vaman Kamath first joined Industrial Credit and Investment Corporation of India in 1971, when it was still under state control. As a young management graduate, he implemented the bank's computerization program and businesses like venture capital and credit rating. 

After a stint with the Asian Development Bank (ADB) in the 1990s, Kamath returned to ICICI in 1996 as its chief executive officer. Two years after ICICI set up its subsidiary ICICI Bank (nyse: IBN - news - people ), Kamath worked to expand its reach through a series of acquisitions of non-banking financial companies. 

He proceeded to lead the bank through several firsts, making an aggressive push into the untapped retail market and taking it online in 1997 despite skepticism that such a model would succeed in a country with abysmal rates of Internet penetration. The Mumbai-based bank started with an online customer base of 500,000 and now reaches out to about 2.5 million. It is in 18 countries, including the U.K. and Singapore, and 65% of its balance sheet is retail, while 20% is international banking.

Kamath, who often emphasizes that the bank's growth story is the story of India, made an early push into markets abroad. In 1997, ICICI became the first Indian entity to list on the NYSE; a year later ICICI Bank followed. And in 2002, Kamath merged parent company ICICI and other subsidiaries with ICICI Bank.

The last four years saw ICICI Bank double its profits. Its market capitalization touched 1 trillion rupees ($24.7 billion) last month, after a public offer in India and overseas raised a record $5 billion. The offering was oversubscribed about 11 times. 

Kamath's team is now looking at rural India as the next growth driver, reaching out to the villages in partnerships with local groups to set up kiosks and give customers biometric cards for credit.

In a conversation with Forbes, Kamath talked about how he put lessons learned from the Far East into practice in India, how the bank remains ahead of the curve and what makes him proud of India.

*Forbes: How has the banking sector changed in the last few decades? *

Kamath: The Indian economy was a closed system. Now, not just in the banking space, but if you look at the financial services space, there's been a tremendous degree of opening up that sometimes we don't give credit for--whether it's in investment banking, private equity or asset management. 

*You left ICICI in 1988 for a stint with the ADB. To what extent did your experiences there help when you came back to the organization? *

The time I spent in the Far East opened my eyes to a newly emerging Asia that had fully capitalized on "opening up" policies, whether it was countries like Malaysia, Thailand, Indonesia, the Philippines or China. What policy change could do to a country was very stark and gave me the ability to think through what we wanted to do in India, where I was sure policy change would happen. One driver of growth I saw in all the countries was the power of the consumer, and the momentum it gave the economy. I tried to build our own business models on those lines. Initially there was skepticism this would happen, but in the last six years the consumer has ruled.

*Has competition from foreign banks that are increasingly looking at India had any effect on ICICI's operations? Given the reach of state-run banks especially, are they a threat? *

When we started in early 2000, foreign banks had a lion's share of the market with most products. So they have ceded territory, and dramatically so, in the last six/seven years. 

Today, ICICI Bank and other Indian banks have captured 85% to 90% of the market, and this is a fairly mature market, so anybody now trying to compete starts with a major disadvantage. We'll watch out for foreign banks, but I don't think they're a threat in the medium term. As for state banks, they need to get their product and distribution equations right. Just having a branch everywhere doesn't work. If they get it right, they're potent competitors.

*As you compete with foreign banks in their traditional markets, what do you think attracts potential customers to ICICI Bank? *

If we have to succeed in any global territory, we have to have a value proposition the customer likes. For instance, remittances into India, one of the fastest-growing sides of any business here and one that's growing at 25% to 30%. We have succeeded in bringing down the costs of remittance and providing online remittance capabilities. We now have about 30% market share. We believe our technology costs are about one-tenth of what global financial institutions spend per transaction. We back-end everything from our global offices to India. When we translate those gains to the customer in terms of higher interest rates, they migrate to us.

*When ICICI introduced services like online banking and ATMs in a market that wasn't used to them, what was the initial response? How long did it take to catch on? *

We rolled out 1,000 ATMs in a year [2002] when there were about 100 ATMs in the India. There was a great deal of skepticism even within the bank. But we found out the customer seeks convenience above everything. We were pleasantly surprised at the way Indians embraced technology. 

The same thing happened with the Internet, which was initially seen as an elite feature. It now accounts for 20% of our transactions. We've come to a stage when whatever was done on the Internet can be done on a cellphone. The moment you do that and look at the fact that 7 million subscriptions are being added every month, think what sort of convenience we'll be able to put in the hands of the consumer. There's another revolution about to happen, you'll have a mass of customers transacting on cellphones in two years.

*ICICI has made a concerted effort to tap the rural population. What sort of growth do you see in the sector? And on a more broad scale, to what extent do you see rural demand, whether it's for consumer products or financing, driving India's growth in the next decade? *

Rural India will be the next big driver of economic activity. You start on a very low base, so there's a lot to do. Till whatever you have to do is fully done, the growth momentum is rapid. 

In agriculture, consider the fact that 35% of green produce goes to waste, and there's no proper price distribution because of intermediaries eating profits. But initiatives in organized retail are attempting to connect rural to urban markets without intermediaries, so there's new economic activity. They're bringing in value addition through activities like grading and storing for fresh produce. This not only adds to the farmers' wealth but to the entire rural wealth. The next stage will be when rural customers want what people in urban India wanted seven years back: televisions, cars, etc. 

[ICICI's rural business accounts for about 10% of its balance sheet and is doubling every year, but officials say the numbers are misleading because the base they're growing off is quite small.] 

*ICICI was a pioneer in the Indian American Depositary Receipt story. What made you take such an initiative at the time? Are you satisfied with the growth you've seen in markets there? *

Going to the NYSE was an exercise in discipline. It was a tough call because we were not sure if we'd measure up to U.S. GAAP and SEC standards. But we thought that the Indian markets were not broad enough to meet even our modest capital requirements. It was probably one of the best decisions we took, since our appetite for equity kept increasing as India grew, and we grew with it. 

*As someone who's seen the growth of this country since independence, what are its achievements you take most pride in? And as a doyen of the industry, what are your concerns for India's growth?* 

I take great pride in the fact that we could grow along with democracy. We have seen so many countries grow at very rapid rates, but you didn't see democracy in any of them. 

Another key takeaway I have is, when you look back in history, India will be seen as a nation that transformed itself using its knowledge, and that revolution provided momentum in the last 10 years. Going forward, the challenges I see are in terms of keeping the social fabric intact of the nation. If we don't bridge the gap between the haves and have-nots, this fabric could come under stress. But the growth path that we're on now is irreversible. There may be temporary speeding up or slowing down, but the foundation of knowledge that spurred the growth momentum will stay.


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## Bushroda

*Wipro's CEO Sees India's Global Future* 
Ruth David, 08.13.07, 12:00 PM ET
FORBES, NY

Bangalore, India - Entering the fortified, tree-lined grounds of software giant Wipro Technologies' sprawling headquarters campus here is a sharp reminder of how India's first global success story is still flourishing. The chaos and noise on the city's narrow roads outside is fast forgotten along the lush pathway. And this campus on the outskirts of the city is only a fraction of Wipro's main campus in Bangalore's tech hub, spread over 125 acres and home to 20,000 employees. 

India's third-largest software services firm increased profits by 44% last fiscal year, on revenues of $3.44 billion. The overall software services industry grew by 30.7%, with revenues of $39.6 billion. And even though other Indian industries, like retail, financial services and real estate, have become the talked-about growth stories, the software industry is quietly chugging along. It is moving away from its traditional stronghold in the U.S. into newer markets in Europe and Asia while sustaining double-digit growth and constantly adding more employees the world over. 

On a visit to what Indians call the air-conditioned city, Forbes sat down with Wipro (nyse: WIT - news - people ) head Azim Premji, the fourth wealthiest man in India and the 21st wealthiest in the world, with a fortune estimated by Forbes at $17.1 billion. We sought his views on how software has changed the face of India, how the industry is changing and the challenges that lie ahead as Indian industries attempt to sustain high growth.

*Forbes: When you first took over Wipro in 1966, did you think you'd be part of a technology revolution? At the time, what industry would you have put your money in as being the most likely to succeed on a global scale?* 

Premji: We went into information technology in end '79, early '80, and that was primarily to address the domestic market. At that time we were in consumer care products that had shifted from commodity-based goods to more branded products. We were looking for high-tech diversification in an area which was emerging and would give us sustainable, routine service revenues. Whether our vision was to go global at that point of time--quite frankly no. Neither was it not to go global.

We really started trying to address the global market in the late '80s, to offer a lab on hire for global services for global customers. Today we're the largest third-party R&D services company in the world. We zeroed in on IT because it was more affordable; we weren't a large company at that time. 

*What were the regulatory and other barriers you faced when starting up?* 

The biggest barrier we faced was that we were a joke being a consumer care company going into technology. That's why we changed our name from Western India Products Limited to Wipro. It was about the credibility.  But we invested a lot in R&D and talent. We put plenty of support money into building custom solutions and into building a strong after-sales service network that was not very prevalent in those days. We had no looking back because we were profitable from year two itself. 

We didn't have frameworks at that time that were adequately clear-cut or transparent. The country was in a huge foreign exchange crisis. Import duties were completely prohibitive; in many cases imports were banned. So we had to rely a lot on localization for what we manufactured. You couldn't import a simple operating system at the time, so we wrote our own operating system, we wrote our own compliance. The entry barriers were high, so you had to localize. 

*In what ways did the software services boom change the face of India?* 

With the success of the software and services industry, Indians realized for the first time that a company from India could be globally competitive and build a significant customer base outside the country. You're seeing the effects of this, particularly over the past two to three years, but even more so in the past 18 months. In terms of scale of acquisitions, scale of setting up marketing networks overseas, wanting to buy overseas brands. This industry was a flag-bearer for the ambition level and confidence level of many industries in India. It built a good reputation  because it didn't over-promise and under-deliver. It left a highly satisfied and supportive customer base.

I don't think you need to sell India or the global delivery model anymore; it's a question of how you get a potential customer to accelerate that decision and how do you continue to be competitive with competition from other emerging countries. 

*As elections draw nearer in the U.S., we're hearing a lot more anti-outsourcing rhetoric. As competition drives up attrition and wages in India, are companies like yours investing more in local talent in the foreign destinations you're located in?* 

We're doing recruitment from American, European campuses and are now starting Japanese campuses. We're setting up a center in Atlanta, where we'll be recruiting from universities, and would like to build up to 500 people. We'll probably have two more centers in the U.S., typically in low-cost areas, university towns. Community sensitivity and visa concerns make this essential, and it makes sense to have a local cadre, apart from employees gained through acquisitions.

The global-delivery model today requires roughly 25% to 30% of your teams to be working on customer sites, or in proximity to them. I think what will happen with this 25% is that if today 10% of them are locals, the proportion will go up significantly. Almost 40% of our employees in Europe are locals, excluding the local engineering company we acquired  In U.S. also the trend will increase and will not necessarily raise our costs, because as we depute Indians, we have to give transfer in, transfer outs for them and their families, we have to pay global salaries. If you're able to train locals to understand the global-delivery model, to understand Wipro, it's a viable proposition. 

*What sort of interest do you see abroad to work at an Indian software firm?* 

We're seeing a dramatic difference. For a young boy and girl in information technology, to get Indian experience is a real feather in the cap. It's no longer something looked down upon. The only country that seems to be having a problem with this is Latin America. We don't have too much experience there, just a center in Brazil and Mexico. But Latin Americans, if deputed to India, want to come here only for short stints, so most of their training is local. That's not the case with Europeans or Americans. I think it is the language unfamiliarity; they're not as familiar with English.

*Was there a defining moment when you first took Wipro on a global stage?* 

To be successful in the global marketplace in a highly service-oriented business you had to build a brand. I remember that to get admission to meet some associate assistant vice president in a $10 million company, you had to wait in corridors for hours. India had no credibility, the software industry from here had zero credibility and a software services company had sub-zero credibility. But eventually we got customers who became our reference points. Customers like Motorola, Intel and Nortel Networks, we did a good job for them and they became our early reference points.

*Globally, people can't stop talking about the India story. What do you think are the roadblocks to sustainable growth when it comes to your industry and the overall industry?* 

The IT industry is strong, so we're not seeing any short-term roadblocks. I see a strong domestic IT market, but the price points are low, so you have to resign yourself to lower margins. And it's significantly different than the global market, which is why the industry has never concentrated on India. We did because we do a lot of systems integration; we sell hardware, software and services. 

As far as India's growth is concerned, infrastructure is a serious problem, big cities are becoming chaotic. And God help us with the 100,000-rupee car [$2,500] coming on to the road. Bangalore will get choked, unless they do war action there. 

Cities aren't being developed on a planned basis. Companies are driving growth outside Bangalore now. We're driving 75% of our growth to other cities all over India. Next year, that number will be 90%. Commute times are very long here, people are spending up to three hours a day commuting. It's a huge national waste of productivity. Water management is a more serious problem than the government realizes. Water tables are falling, pollution levels are going up. There is little separation between sewages, lakes and drinking water.

*Tech companies like yours have been under sustained pressure since the year started because of the rupee's rapid appreciation against the dollar [it has risen close to 10% since January] and labor troubles. Do you think the worst is over?* 

The rupee will continue to appreciate. The economy is fundamentally strong, so a lot of money is coming in. The government has reconciled to the fact that it's not going to run this economy like China does. They will not regulate the rupee but will interfere when it suddenly over-firms up. Whatever happens to the currency, the more important criteria here is that it should happen in a phased manner, so the economy has a period to adjust. The days of the government giving crutches to the industry are gone. Such a rise has been a good sanity check, like the dot-com bust. A sense of reality is coming back into the IT sector, and you'll see more of this over the next six months.

*Forbes keeps adding to its list of Indian billionaires. But the richest recently came under criticism from the prime minister for not doing enough to spread the wealth. Your thoughts?*

I've found that to do scientific, effective social work is tougher than building a business. It takes a huge amount of time, effort and talent. But I think that, parallel with the growth of the industry, we need to invest in creating jobs in small towns and villages. Otherwise we'll see social problems. I don't think government subsidy schemes will serve the purpose. 

What is happening in retail, with the entry of organized players, will be a driver for higher productivity in agriculture and better logistics management. Large retail formats will want to procure agricultural produce at better rates and better quality, so they'll set up logistics channels, processing centers, cold storage. The net realization to the farmer will increase, so you will see rural spending going up significantly. 

But once wealth comes, you need to skill those people so they can be employed. We're contemplating introducing skills education from grade nine itself in our education programs. 

But the Indian is exceptionally tolerant of others' wealth, probably because of our Hindu culture. Today in Latin America, Pakistan and other parts of Asia, a wealthy man can't roam around without armed guards. Thankfully that's not the case here. People have a respect for wealth created honestly.


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## Bushroda

*Indian Students Flock To The U.S*
Andrew White 08.13.07, 12:00 PM ET
FORBES, NY

WASHINGTON, D.C. - Sixty years after gaining independence from Britain, India's students are flocking abroad for higher education. Today, India is the leader in sending its students overseas for international educational exchange, with over 123,000 students studying outside the country in 2006. More than 76,000 of them have chosen the United States as their academic destination.

The U.S. receives more international students from India than from any other country, a trend that continues to shape and impact the cultural, economic and diplomatic dialogue between the two countries. Vigorous efforts have been undertaken by such U.S. government leaders as Under Secretary of State Karen Hughes to persuade Indian students to study in the U.S. This past March, Hughes carried her campaign to Mumbai and New Delhi. 

It seems to have paid off. Six years ago, India surpassed China as the international community's leading exporter of students to America, and it seems likely to remain so for years to come.

With 10 times more college campuses than any other country in the world, the United States easily lends itself to the burgeoning international student population, which brought over $13 billion to the U.S. in 2006. While the U.K. may be a closer option, many Indian students seem eager to affirm their independence from their former ruler by choosing to study in the U.S., Australia and New Zealand.

Alan Goodman, president of the International Institute of Education (IIE) in New York City, believes this drift toward U.S.-based educational exchange can be viewed as a manifestation of Indian culture trying to distance itself from British influence.

"It's English," says Goodman. "It's the language of education in India, and with independence has come a desire to break away from Britain and to stop relying on British institutions, and the only other country that has the capacity to take on these students is the United States." 

The University of Southern California leads the pack of U.S. universities having the highest international student population, according to the IIE's annual "Open Doors" report, which compiles statistics on the number of students who choose each international destination.

USC's strong Indian population is represented by the university's Indian Student Alliance, led by Gaurav Kumar, originally from Bangalore, who for more than a year has been working toward a master's degree in engineering.

He says that the United States was the best-suited destination for him simply because it had the best programs for the career path he intended to pursue. "I think it's true that most Indian students are coming to the U.S. to study when they leave India. I know a lot of people who go to the U.K., Australia and New Zealand as well, but about 80% of the people I know came to the U.S." 

And while international students seem to be entering and exiting U.S. borders for academics with relative ease, since Sept. 11, 2001, the Department of Homeland Security and the U.S. Immigration and Customs Enforcement offices have enacted a number of new procedures for students entering the country, including compulsory in-person interviews at U.S. consulates, and registration in the ICE Student and Exchange Visitor Information System. SEVIS serves as an online database in which every international student in the U.S. must be registered.

IIE's Goodman says the visa procedure is not the most significant obstacle to studying in the U.S. "Probably the most difficult thing about being an international student here is the college application process," says Goodman. "Filling out the visa is probably easier than that."

Kumar, who applied to 14 schools across the globe, says that bureaucratic processes do not deter Indian students. "It's not really difficult," getting the student visa. "It's become a lot simpler for us to figure out the visa application process in past years due to the high number of Indian students coming to America. There is a lot of advising in India available for students trying to get to the U.S. to study."

Nikhil Rasiwas, an engineering Ph.D. student and vice president of the Association of Indian Graduate Students at the University of California San Diego, says the U.S. has been faster to accept international students than other countries, adding to its appeal. 

"There are so many more universities," says Rasiwas. "You know more people here, you have more direct contact here with the universities than with universities in other countries--it's kind of a legacy for Indian students to come to the U.S." Rasiwas adds that in India, there is simply more information about U.S. schools than those in other countries. "When I applied two years back, I didn't have as much information on the schools in the U.K."

Rasiwas noted that for his field, engineering, a popular academic and career path for many Indian students coming to the U.S., the research opportunities just weren't there in his homeland, saying, "India is in its nascent stage as far as research is concerned--the infrastructure there is not strong enough to support meaningful research."

Although India is seeing a large percentage of its students traveling abroad to study, most see themselves returning home once they finish their studies. Rasiwas says he plans to try and get work in the U.S. for a few years once he has earned his Ph.D. "Once a person gets this top-notch education," he says, "there may not be that standard in India for such a highly educated person--but it is getting better, and I plan on going back."

Rahul Chhabra, press minister for the Indian Embassy in Washington, D.C., notes that "in a globalized economy, young people tend to gravitate toward countries that offer the best opportunities for their talent. India is a growing economy in attracting both Indian and foreign talent." Chhabra anticipates a future when India can fully accommodate its own academic force, as well as develop into a draw for foreign students and professionals from around the world.


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## Bushroda

*India Has The Brains, But Where's The Beef?*
Prabhakar Raghavan 08.13.07, 12:00 PM ET
FORBES, NY

India is full of smart, highly-trained, English-speaking computer wizards, thanks to the legendary Indian Institutes of Technology. All it needs is decent "infrastructure"--code for airports, highways and the reliable supply of utilities--and its full potential is ready to be realized. 

Sound familiar? That's the shibboleth that many Western executives and journalists buy into, fed by quick fact-finding trips and endlessly repeated media myths.

In India, critics of this simplistic picture tend to attack the lack of access to primary education for hundreds of millions of children, and this has rightly been the focus of education policy. One level up, the voracious appetite of the information technology (IT) sector demands science and engineering graduates at a rate that's on par with the U.S., China and Russia.

Between the burgeoning private sector in IT training (the NIITs, a chain of vocational training schools, train over a hundred times as many IT workers annually as the Indian Institutes of Technology) and the untiring efforts of industry consortia such as the National Association of Software and Services Companies to elevate IT education as a policy priority, this shortage will also be addressed over time.

India's real infrastructure problem--with no solution in sight--is not airports or electricity; it is the virtual nonexistence of graduate education and research in information and other crucial technologies. Consider this for starters: The U.S. produces about 1,400 Ph.D.s in computer science annually and China about 3,000. By stark comparison, India's annual computer science Ph.D. production languishes at roughly 40. That number is about the same as that for Israel, a nation with roughly 5% of India's population size. 

Perhaps more significant, the quality of graduate research in India lags significantly behind the U.S. and Europe, with a few rare exceptions. This seems paradoxical, considering that American academia and industry thrive on Indian scientists. The reason is that graduates from the top Indian science and engineering schools tend to head abroad to do their graduate work, where they frequently excel and settle. 

The current economic boom in India further exacerbates this: The top graduates who remain in India have lucrative options ranging from IT giants to investment banks. According to news reports, all the top five graduates from one Institute of Technology last year had offers from Deutsche Bank (nyse: DB - news - people ).

What is the cost to the Indian economy and society from laggard graduate education and research? Most Indian IT jobs are in building outsourced solutions, quality control, software maintenance and support, and coding to designs created abroad--the IT workforce equivalent of C.K. Prahalad's "bottom of the pyramid." 

Sure, there's good sustenance in these jobs for the masses. But a disproportionately small fraction of them are focused on technology innovation or on new product conception, design or architecture. That's because these advanced jobs require advanced training in abstraction and experimentation.

Beyond the higher value and wages that these more advanced jobs command, they often have a "drag" effect--a typical software architect is backed by a team of engineers. This in turn leads to the creation of defensible product and intellectual property assets in the locale, rather than having the ideas hatched in Silicon Valley and then sent to India for the more routine stages of development. The lack of these advanced functions means there are virtually no instances of home-brewed IT innovation in India.

Overall, the U.S. remains virtually unchallenged in IT innovation--a direct result of its second-to-none graduate education and research system, whose genesis lay in the Cold War. The result is a steady stream of new businesses being created in America and driving sustained IT industry growth. Crucially, this system exerts an influence beyond the actual granting of degrees--witness that the founders of Google (nasdaq: GOOG - news - people ), Microsoft (nasdaq: MSFT - news - people ) and Yahoo! (nasdaq: YHOO - news - people ) all have yet to complete their degree programs.

The U.S. clearly has no cultural monopoly on such innovation and entrepreneurship. In fact, Indian immigrants in the U.S. have founded more start-ups than those who've arrived from China, Taiwan, Japan and Britain put together. But in India, it is too easy at the moment to focus education policy entirely on K-12 and undergraduate education. The price of thereby conceding the growth engine of innovation is one that India can ill afford. The hardest infrastructure challenge facing India is graduate education and research.

_Prabhakar Raghavan is the head of Yahoo! Research. He is a consulting professor of computer science at Stanford University and editor in chief of the Journal of the Association for Computing Machinery and serves on a number of policy and editorial boards. Raghavan received his Ph.D. from the University of California, Berkeley, and an undergraduate degree in electrical engineering from an Indian Institute of Technology in Madras, India._


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## Bushroda

*The Indian Media Mela* 
Vidya Ram, 08.13.07, 12:00 PM ET
FORBES, NY

If the words "print" and "media" conjure up images of plummeting profits, shrinking readership and editors tearing their hair out as they attempt to staunch the exodus to the online universe, you clearly aren't thinking of India.

As the country celebrates the 60th anniversary of its independence from Britain, newspapers are flourishing, with growth projections that would impress even the savviest of investors. And unlike rival market favorite China, the world's largest democracy can boast a free press that is truly able to speak its mind, and the largest English-language speaking audience in Asia. 

Fueled by rising consumer spending and literacy rates, the Indian print media is expected to grow by 13&#37; a year over the next five years, according to a study by PricewaterhouseCooper. Set against the average 2.5%growth rate internationally, this is quite a remarkable figure. The total entertainment and media industry, including film, broadcast, online and print media, will be worth an estimated 1 trillion rupees ($24 billion) by 2011. 

"The Indian media and entertainment industry, yet again, continues to out-perform the Indian economy and, yet again, is one of the fastest-growing sectors in India," said PwC. 

While foreign investors have had access to India's entertainment industry for over a decade, until 2002 they were only able to salivate at anything that had news or current affairs content. Thanks to laws introduced just after independence--purportedly to protect national sovereignty--foreign investors were strictly forbidden from owning even a small slice of the news-industry pie. 

However, the news industry has been swept up in the wave of liberalization that has washed over the country since the 1990s. For the past five years, foreign investors have been permitted to hold up to a 26% equity stake in news organizations and have full ownership of non-news media. 

With the gates to the mela (festival)* open, investors have been quick to move in. One of the first to go to print in India was the International Herald Tribune. Through a privately held subsidiary, Conde Nast publishes an Indian version of Vogue, while the Pearson Group's Financial Times has teamed up with the Business Standard newspaper. 

Rupert Murdoch's Star TV and India's Ananda Bazaar group jointly own the television channel Star News India, while Walt Disney (nyse: DIS - news - people ) owns its own kids television channel. Fortune and Newsweek are also publishing Indian editions through local tie-ups. Private equity players such as Blackstone, 3i, and Matrix Partners have also waded in, lured by the prospect of easy money in a burgeoning market. 

Given the restrictions on investing in news, you might have expected most investors to dive into the entertainment industry. But according to PwC, eight out of the 13 proposals for foreign direct investment that went before the government for approval in 2006 were for news ventures. 

While the entertainment industry is certainly attractive and growing, it is news that sparkles like the Kohinoor diamond. The numbers--Indian newspapers and magazines have a total readership of 222 million--are made all the more tantalizing by the tattered state of newspapers in the West, which have been losing customers, and those ever-so-crucial advertising revenues, to the Internet. 

No wonder Indian newspapers, such as the Hindi-language daily Dainik Jagran, with a circulation of over 22 million, look as tempting to investors as candy to a five-year-old. 

Even with India's higher-than-average rate of illiteracy, there is huge room for growth, particularly outside the cities. It is estimated that there are as many as 359 million literate Indians who currently do not read any publications. Just like the Indian software industry a decade ago, the print media is poised for exponential growth. 

Harbinder Singh-Heer, managing director of London-based media consultancy Heernet Ventures, believes that the greatest potential lies not so much in the top national dailies as in India's regional press and local language papers. In line with this assessment, The Independent of Britain has tied up with Dainik Jagran in the north, while Blackstone has put its money into the southern Telugu-language Eenadu Group, whose flagship newspaper has the third-largest readership among all Indian dailies. 

"Blackstone's investment is a vote of confidence in the excellent growth prospects for India's local language media," says Singh-Heer.

Other good opportunities lie in radio, which is just opening up to private investment, and the Internet, where advertising revenues are nearly doubling every year, albeit from a low base. 

But even private equity companies, which Singh-Heer expects will dominate the foreign-investor scene, have so far been ponying up only limited amounts of cash. Blackstone, which is one of the largest investors in the market so far, has invested just $275 million. Indeed, total foreign investment since 2000 adds up to approximately $2 billion, according to London-based media consultancy, Heernet. 


Shekhar Gupta, editor in chief of English-language daily The Indian Express, argues that tight government regulation is partly to blame for the hesitancy. In addition to limits on their equity stake, foreign companies are allowed virtually no management or editorial control over their Indian investment. "They have to rely on the good will and performance of the Indian editors and employees," says Gupta. 

Another concern for foreign investors is the rock-bottom cover price that newspapers are charging, a necessity in a market where there is strong competition. Top English-language dailies can sell for as little as 1.50 rupees (4 cents), for example. Additionally, there are likely to be concerns about the financial soundness of some groups, which have been in private or family hands for decades. A lack of competition, until recently, has meant that some publications have been able to take their market position for granted. 

As a result, foreign investors are testing the waters often only gingerly, argues Singh-Heer, who adds that most "have a long term perspective." He sees the radio market as a case in point. "There has been a tidal wave of new licenses in the past five years, but the challenge for any investor is to make sure he backs the right horse." 

But some of the wariness on the part of foreign investors is a product of the Indian media groups themselves. A bullish stock market has meant those that have chosen to go down the IPO route are getting higher valuations than even private equity would be willing to pay.

There is also a certain amount of concern within the government over the political influence that foreign investors could wield. It is this same concern that seems to drive the government's determination to keep the equity cap at 26%, at least for the moment. 

Aveek Sarkar, chairman of Ananda Bazaar Patrika group, which owns a major Bengali-language daily and the joint venture with Murdoch, views this as "ideological paranoia." 

"We are presuming that the world has nothing better to do than acquire the Indian print media and sabotage it," said Sarkar, pointing out that raising the foreign investment cap to 40% wouldn't destroy Indian control of the media, but would make things more attractive to overseas investors.

Both Gupta and Sarkar believe that eventually, most newspaper groups will recognize that they cannot afford to give up the coveted capital that foreign investment can bring. 

"By and large, there has been a broad acceptance that foreign investment has been beneficial," says Sarkar. 

T.N. Ninan, editor and publisher of the Business Standard, argues that in addition to the capital investment, the Financial Times' investment in the company has brought with it other advantages, including staff exchange programs and access to the newspaper group's professional expertise.

Even in its early stages, foreign investment seems to be changing the media landscape. 

Take the case of Henderson Global Investors, whose 1.2 billion rupees ($26.8 million) investment in the Hindustan Times enabled the paper to launch a Mumbai edition, and take on the granddaddy of all Indian newspapers, the Times of India. Currently, the Daily Mail of Britain is considering setting up a newspaper with Living Media, which owns the popular weekly magazine India Today. This new venture, which is expected to launch in October, will take on New Delhi's heavyweights, such as the Hindustan Times, which also has foreign investment, from the Henderson Group. 

The media industry is one place where India and China--so often lumped together--part company. It is one area where having a genuine democratic system and a press not structured by the state makes a huge difference to investors. 

"Money may go into the Chinese entertainment industry in the short-term, but if you look at the media businesses in the two countries, there should be no competition," said Gupta.


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## Bushroda

*CMIE ups 07/08 GDP forecast to 9 pct*
Mon Aug 13, 2007 4:30PM IST

MUMBAI (Reuters) - The Centre for Monitoring Indian Economy (CMIE), an independent think-tank, has revised upwards India's growth forecast to 9 percent in the 2007/08 fiscal year from 8.5 percent earlier, citing robust services and industry.

CMIE's forecast is higher than the Reserve Bank of India's estimate of 8.5 percent.

In its monthly review, CMIE said it expects industry to rise 9.6 percent and services sector to grow 10.7 percent in the fiscal year that began in April.

CMIE said the pace of expansion in industrial growth was sustainable as it was broadbased, covering not only capital goods and consumer durables but also intermediate goods.

CMIE said demand for capital goods continued to remain buoyant, with investments worth 47 trillion rupees on hand as at end June.

"The prevailing high interest rate has not hampered the implementation of these projects," it said.

CMIE also revised upwards its agriculture output growth estimate to 3.1 percent from 3 percent, as the area under cultivation has risen sharply and the progress of monsoon was satisfactory.

The think-tank said wholesale price inflation would remain steady or may even decline a tad in the coming months.

The appreciation of the rupee against the dollar could also offset the increase in global crude prices, CMIE said.

India's wholesale price inflation was at 4.45 percent on July 28, below the central bank's aim of containing it close to 5.0 percent in 2007/08.


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## Bushroda

*Behind the Miracle: India's Mighty Movers*
*This elite group of business, political, and cultural leaders is helping transform India into a 21st century economic power in Asia and beyond* 
by Nandini Lakshman 
BusinessWeek

As India approaches its 60th year of independence on Aug. 15, the world marvels at the country's rapid economic ascendancy. The emergence of India's globally ambitious business outsourcing companies such as Infosys (INFY) and Wipro (WIT) and high-profile cross-border mergers such as Tata Steel's $11.3 billion deal to buy British steelmaker Corus continue to make the country a fascinating business story. 

India is also evolving from foreign direct investment backwater to money magnet for global multinationals. Foreign executives across a swathe of industries, from autos to consumer goods, see a huge consumer economy emerging as years of high-speed growth in the 8% range enlarge India's middle class. 

By 2025, India is expected to emerge as the world's fifth-biggest consumer market as incomes and living standards improve, according to a study by the McKinsey Global Institute. Nearly 300 million Indians are expected to escape poverty, and the middle class will leapfrog by a factor of 10from 50 million today to roughly 583 million 18 years from now. 

*The Country's Top 50*
Often less noticed are the individual figuresthe politicians, business leaders, and cultural pathfindersinstrumental in India's remarkable rise on the world stage. Without the initiative, enlightened leadership, business smarts, and style of scores of notable Indian leaders, there would be no economic miracle. 

So who are the movers and shakers refashioning contemporary India? That's what a team of BusinessWeek editors sought to discover by compiling a list of the country's 50 most powerful leading lights in politics, the economy, and society. To take a look at the names we came up with in this by-no-means exhaustive list, check out the slide show we have assembled. 

Some of our choices aren't controversial. They include Tata Group Chairman Ratan Tata, whose conglomerate is in the midst of a dramatic expansion and is interested in the Jaguar luxury car business now controlled by Ford (F). (Tata is up against private equity player Ripplewood Holdings in that bidding contest.) 

*A Sporting Chance*
In the political sphere, Commerce Minister Kamal Nath, once considered a less-than-impressive member of the Congress Party, has emerged as one of the country's most reform-minded politicians. He has put in place a new patent act, deregulated the retail industry, and has been a fierce advocate for the developing world in the current contentious Doha round of global trade talks. 

Indian sporting and cultural figures are also inspiring Indians at home and gaining followings abroad. Sachin Tendulkar is still the star master batsman of the Indian cricket team, but he's getting competition from younger lads from the farthest corners of India. And tennis star Sania Mirza has wowed Indian sports fans in a country where cricket rules. 

Indian fashion designers are mixing traditional local fashion motifs with a contemporary feel, and some, such as Ritu Kumar and Tarun Tahiliani, are making their presence felt internationally. Celebrities and creative talent from the Bollywood film industrystill wildly popular from Jakarta to Jeddah, with its musical routines and family fareare also well-represented on the list. 

*Widening the Circle*
Of course, when it comes to India's robust economy, many heroes are to be found in the corporate world. With the IT industry no longer the sole face of a global India, this list draws special attention to rising industrialists such as B Muthuraman at Tata Steel and Kumar Mangalam at diversified Aditya Birla Group. 

That's not to say that Infosys' N R Narayana Murthy, Wipro's Azim Premji, and Tata Consultancy Services' (TCS) S Ramadorai are not interesting executives, but there's more to India than just outsourcing. Similarly, you won't find Arcelor Mittal's (MT) Lakshmi Mittal on the list, despite his fame in the global steel industry. He's a British citizen and has only recently started looking at investing in India. 

Make no mistake: India has plenty of challenges ahead. Its vibrant outsourcing sector faces the twin challenges of rising wages and stiffer competition at home from the likes of IBM (IBM) and Accenture (ACN). For every enlightened politician, there are others who stand in the way of economic progress. 

Yet the odds are good that India's economic and social dynamism (it is home to the youngest population in the world) will be worth watching closely in the years ahead. And the individuals that make up BusinessWeek's India's 50 Most Powerful People roster will be playing leading roles in this drama.


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## Bushroda

*Why I put my money on the elephant over the dragon*
*India may yet win the struggle for economic supremacy in the East*
Maria Misra 
From The Times
August 13, 2007

With the sixtieth anniversary of independence, enthusiasm for India in the West is at an all-time high. And though the Hindu nationalist slogan India Shining was decisively and derisively dismissed as overoptimistic in India itself at the 2004 general election, among Western commentators the sub-continents sparkle remains untarnished. India seems to be the nation of the future  a vibrant, democratic, multicultural and increasingly free-market alternative to the grimly uniform authoritarianism of China. India seems finally to have fulfilled the dream of its chief architect, Nehru, who predicted that, once freed from the British Raj, the new nation would become a free, democratic and developed state  the global embodiment of the spirit of the age. 

And yet journalistic optimism has not been reflected in the decisions of hardheaded Western businessmen, who continue to prefer Indias nominally communist neighbour, China. Despite a recent upturn in foreign investment, India still receives only a fraction of Chinas share. Business has good reason to be cautious. For while the rise of Indias high-tech and software industries strikes fear among the Wests white-collar workers, in reality a bare 3 per cent of the population speak good English and 30 per cent are illiterate. Indias electricity consumption is but one third of the world average; and only 2 per cent of its roads are four-lane highways. 

Western businessmen are not the only ones making unfavourable comparisons. Indians themselves are haunted by success of their Chinese neighbour. In the 1960s they fretted about not being as good at socialism, now they fear they arent as good at capitalism either. Indian commentators are rather divided on how to respond  unsure whether to beat them or join them. The ranks of Indian pop-economists urging the tiger to roar at the dragon, or the tortoise to sprint past the hare, are matched by those dreaming of a new global entity  Chindia. The partnership of Chinas awesome manufacturing power with Indias enviable IT and services sector would make Chindia the factory and back-office of the world. The problem with this scenario is that China is beating India in the services sector, too. 

For Indias more sober policymakers, emulation rather than partnership or head-on competition is the preferred response. In Nehrus time, teams of bureaucrats crossed the border to study collectivisation. Now it is a phalanx of CEOs who descend to analyse management style and productivity gains. The Government, too, is keen to copy the Chinese. But efforts to promote foreign investment are being obstructed by an unlikely coalition of Maoist peasants, neo-Gandhian middle-class eco-warriors and a finance minister fretful at the loss in tax revenues. So, despite the frothy headlines, Indias economy, in comparison with that of its dragon of a neighbour, remains a lumbering, if frisky, elephant. 

What lies behind Indias relatively disappointing performance? Some blame Gandhi and his Luddite ruralism; others castigate Nehru for the lost decades of planning, and everyone cites pervasive corruption. But none of these is convincing. Gandhi is the patron saint of India, not its chief economist; the legacy of Nehru was not all bad; and if corruption inhibited growth then China would still be in the Dark Ages. The truth is that Indias problems are not so much economic as political. 

This is not, as was once fashionably asserted, because India is a democracy, while China is authoritarian. Democracy is not necessarily an obstacle to rapid economic development, as the reconstruction of Japan and Germany testify. The problem is not democracy, but how it is practised. And here the British must take a bow. For along with railways and the English language, the British also left behind a legacy of profoundly politicised identity politics. And Indias multiple caste, linguistic and religious communities continue to see themselves as bitter competitors for the largesse of the State, not as collaborators. 

Sadly Indias politicians have often found themselves unable, and sometimes unwilling, to tackle this fractiousness. Caste divisions can become electoral constituencies and in consequence, Indian governments have found it difficult to establish any sense of common national purpose  and with it the willingness to pay the taxes necessary for education and infrastructural spending. 

Indeed, the corrupt and often violent recent history of Indian democracy, with its far-right Hindu nationalists, panoply of caste and regional parties and unstable coalitions, springs from the same source as its sluggish economic reform: deeply entrenched social and political fragmentation. 

But will India always remain the tortoise-elephant to China's dragon-hare? If India could transcend its fractious politics (and there are signs in recent elections that it might), then it certainly has the potential to excel economically. It has a demographic advantage over China  it will have a larger working-age population by 2050. Its diversity is also a source of creativity  something its dour northern neighbour fears it may lack. And while Chinas rulers have managed economic liberalisation masterfully, it remains to be seen whether they can achieve the same miracle in the political sphere. China has enjoyed the short-term bonus of authoritarianism  the power to impose restructuring regardless of popular opinion  but authoritarianism also brings a lack of transparency. Many commentators believe this has shrouded serious overinvestment, bad debts and potential asset bubbles. 

Moreover, China  unlike India  has not been effective at managing its gross regional inequalities. Few doubt that Chinas economic triumph will eventually bring political turmoil in its wake. 

India, unlike China, has had 60 years of experience in managing political turmoil. Though there are pockets of extreme radicalism, Maoist factions and Islamist extremism, mass revolutionary violence is highly unlikely; people accept the mediation of political conflict through elections. And so, paradoxically, though India's political life is chaotic, it is also curiously stable. Indias elephantine advantages may yet win out. 

*Maria Misra is a Fellow of Keble College, Oxford, and author of Vishnu's Crowded Temple: India Since the Great Rebellion *


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## Bushroda

*Keeping a tryst with destiny*
Last Updated : Monday 13 Aug, 2007 - 
7DAYS, United Arab Emirates 

Ashok Soota, who founded software maker Mindtree Consulting in 1999, calls himself a late-stage entrepreneur, much as India is a late convert to free-market philosophy. The entrepreneurial urge seized Soota when he was 57, an age when most people think of retiring, and after he spent 15 years building Wipro Infotech into a $500 million company.

The soft-spoken businessman exemplifies the pent-up entrepreneurial energy Prime Minister Manmohan Singh says was unleashed in 1991 when he freed private enterprise from the License Raj that shackled it for four decades after independence. We didnt have to send our software through government monopoly lines but could do so through our own digital communication links; to the extent that the software industry benefited from reforms, said Soota, now 64.

We escaped the tyranny of our government-owned infrastructure, which had held back the manufacturing sector, he said. Soota worked in manufacturing during 20 years at the DCM Group, where he won a reputation as a turnaround specialist, before joining Wipro in 1984.

He has set the bar high for Mindtree, which received investor demand for 100 times the modest $50 million it sought to raise in a share sale this year. Soota is targeting a five-fold jump in sales to one billion dollars by 2012. Such ambition would have been wishful-thinking during the four decades that Indias economy lay in a socialist cocoon, expanding at an annual pace of 3.5 per cent derisively referred to as the Hindu rate of growth.

The public sector was put at the commanding heights of the economy by first Prime Minister Jawaharlal Nehru and his daughter Indira Gandhi, who ruled India for more than three decades after the British flag was lowered on August 15, 1947. In promoting a socialistic pattern of society, they shunned foreign investment and imports and discouraged production for export.

Loss-making government companies, headed by bureaucrats, produced and sold everything from coal and steel to gas and electricity. Shortages were chronic. Governments dictated what private companies should produce, how much and at what price they could sell under an elaborate licensing system that made for multiple layers of red tape and promoted corruption.

Shock therapy was needed to trigger change and drive Indias economy towards keeping the tryst with destiny Nehru predicted in his classic Independence Day speech. Faced with a virtually empty treasury in 1991 and forced to sell gold reserves abroad to avoid defaulting on national debt, Manmohan Singh, then the new finance minister, bit the bullet.

An economist and unlikely politician, Singh ordered a double devaluation of the rupee to spur exports and hacked away at the License Raj. The doors were opened to private competition, foreign investment and trade. The year 1991 marks the dividing line in the history of the Indian economy, said Pai Panandiker. When you talk of the economy, its in terms of pre-1991 and post-1991.

The Indian economy has grown at above eight per cent in each of the past three years. Per capita income has doubled in ten years. Singhs government is sitting on $200 billion in foreign reserves, compared with $1 billion in May 1991 that wasnt then enough to pay for a fortnight of imports.

The countrys businessmen are now splurging billions of dollars to acquire firms abroad, from Ratan Tatas $13.7 billion for Anglo-Dutch steelmaker Corus to Vijay Mallyas $1.2 billion to snap up Scotch-whisky maker Whyte & Mackay. India is now the fastest growing wireless market, adding six million mobile-phone users monthly to the 157 million it had as of March 31.

Automobile sales, which reached one million in 2003 after growing 68 per cent in five years, will likely touch 20 million by 2030, making it the biggest car market after the US and China. Indian air carriers, which have 480 aircraft on order to be delivered by 2012, expect domestic traffic to double by 2010 to an annual 60 million passengers.

India has just one caste today  the consumer caste, said GR Gopinath, 56, who founded the countrys largest discount carrier Air Deccan in 2003. India is seen now as a country of one billion hungry consumers, not as one billion hungry mouths to be fed, he added. Indias consumer spending is set to quadruple to $1.5 trillion by 2025, overtaking Germany at the number five spot, as a youthful population earns more and millions climb out of poverty, according to McKinsey Global Institute.

But dire poverty remains a fact of daily life. The gap between the top and the bottom has widened even more inside the country, conceded entrepreneur Soota. Thats because the bottom never rises in the same proportion as the top. But there is so much optimism built in, he added. There are so many opportunities.


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## Bushroda

*India at 60: special report* 
*Since it cast off colonial rule in August 1947, India has become one of the most powerful nations on earth. But what has it sacrificed along the way? Andrew Buncombe goes in search of the Subcontinent's soul *
Published: 10 August 2007 
Independent, UK

Ten miles south of Delhi, where the dusty scrub has been cleared and replaced by an ocean of quick-setting concrete, India is road-testing a new vision of its future. Gurgaon is a satellite city with endless shopping malls, high-rise apartment blocks and more than one million people. It is also the laboratory for an experiment with global implications. 

Sixty years after gaining independence from Britain, the world's largest democracy is at a crossroads. A crucial struggle is taking place over which direction this economically resurgent nation should be taking. It may not be obvious to an outsider, but spend an hour or so in the consumer's dream that is Gurgaon and it becomes abundantly clear where the powerful and aspirational segment of the population has its collective eyes fixed as India stands poised to make the transformation from an impoverished, backward country into a superpower. And it is not on its former colonial master. 

Just come away from the heat and the noise of this vast building site and step into the air-conditioned Sahara Mall. By no means the grandest of the shopping emporiums on the chaotic, fume-filled highway known as MG Road, it is already an established magnet to India's newly wealthy middle class. There are fashion shops, department stores, jewellers, sports stores selling Nike, there is a cinema on the top level showing Bollywood and Hollywood hits. Most interesting is a fast-food restaurant that offers cleaned-up versions of Indian street food, with staff dressed in baseball caps and bowling shirts; an idealised Indian interpretation of an idealised American vision of itself. 

Whatever modern Britons may think of India, and despite our celebration of the fact that "curry" has become a national dish, it appears India no longer feels the same way about us. Its people are respectful, yes; polite, certainly. But whatever cultural lodestone Britain may once have represented to wealthy Indians, with their love of cricket and regard for English-style public schools, times have changed. Today, they buy into the American Dream instead. 

On the top floor, Sandeep Seth and a friend are sipping smoothies. Mr Seth is 28 and works in IT. He is wearing a college-style T-shirt of brushed yellow cotton. Though his job is in another satellite city, Noida, he lives in Gurgaon and makes the 90-mile daily commute. For all his Western looks and habits, Mr Seth appears to resent the suggestion that India is becoming Americanised. Yet asked about what is happening here on MG Road and what it represents for India, he says: "It's the culture changing. There is a change in the mindset. If people go to the US they will bring things back to India. Society cannot be stagnant." 

THE FORMAL return of Indian sovereignty took place at midnight on 15 August, 1947, precisely 24 hours after Pakistan, too, had become an independent nation. Two months previously, on 3 June, Viscount Lord Louis Mountbatten, the last British Governor-General of India, had announced the partition of the Indian Empire, under pressure not just to grant independence but to create both Muslim and Hindu nations. 

Hours before independence was returned to India, Jawaharlal Nehru, the man who would serve as the country's first Prime Minister, spoke to the country's Constituent Assembly about what he famously framed as India's " tryst with destiny". "At the stroke of the midnight hour, when the world sleeps, India will awake to life and freedom," he said. "A moment comes, which comes but rarely in history, when we step out from the old to the new, when an age ends, and when the soul of a nation, long suppressed, finds utterance." 

In the years following Partition, when countless thousands on either side of the religious divide were killed and when millions were forced from their homes and made to relocate to the other side of a line that for them existed only on a map, India's politics were dominated by Nehru and his quasi-socialist beliefs. In its foreign policy, India sought to remain neutral from the machinations of the Cold War and was a founding member of the Non-Aligned Movement. 

In economic terms India, in the post-independence period, operated under the so-called "licence raj", a complex system of regulations and bureaucracy established as part of the centrally planned economy. But, confronted with economic crisis at the beginning of the 1990s and the need to attract more foreign investment, the government of Pamulaparthi Rao liberalised the economy by removing many of the restrictions and opening up the country to foreign capital. It was those reforms  initiated in 1991 and which did everything from opening the financial markets to reducing tariffs  which are today credited as the catalyst for India's economic growth. 

Not surprisingly, it has been America that has made the most of this liberalisation and become India's dominant trading partner, creating an influence it was not able to lever politically in the previous decades. In both exports and imports, the US is now India's number-one trading partner. While Britain stands in third place, its total trade with India is considerably less than that of the US. Indeed, Britain's largest export to India is scrap metal. 

It is not just in terms of trade that the US is proving the dominant influence. In the field of higher education, America long ago eclipsed Britain as the most sought-after destination for undergraduates. Last year US colleges took in 88,000 students and academics, while Britain only managed to secure 20,000. Even Oxford and Cambridge are being forced to compete to attract India's best brains. 

At a book launch one recent sweltering evening at the British Council's offices south of Connaught Place, a documentary film-maker who had studied in Britain was bemoaning the fact that her daughter had no interest in following the same path. "She's only interested in going to America," she said. "I'd hoped that she'd want to do the same as me." 

The implications of such a shift in the ambitions of smart, young Indians go beyond simply losing the battle to attract the best students to Britain. Students travelling to the US to study, perhaps spending several years there, are inculcated with American culture while they are there. They absorb its politics, its fashions, its tastes, its clothes and music and, of course, its aspirations. They watch its news broadcasts, they listen to Fox News and to CNN. They go shopping at Wal-Mart, or spend time in shopping malls. When they leave they are likely to retain very strong bonds with the country. 

"In a nutshell, it's a loss with very long-term consequences," said Frances Cairncross, the rector of Exeter College, Oxford. " Students may stay for a while and contribute their skills and intelligence to our economy [and] when they go home, their cultural and economic links are with the country that educated them. So we will feel the repercussions for a generation to come." 

THERE is a new-found vigour about India that sometimes borders on the brash. You can positively sense the optimism and confidence that exists within the middle classes and political élite, a feeling that after all these years of waiting  and with the shackles of colonialism having been thrown off  India's time has finally arrived. 

You can detect this in numerous ways. You can see it in the world of publishing and television, in the expansion of India as a retail destination. You even sense it when the shop assistants laugh at you when you opt for a cheap mobile phone rather than the $400 model they had selected for you. "That's what the rickshawallahs have," they say. 

It is apparent in the swagger of politicians such as Kamal Nath, the country's Minister of Commerce and Industry, who declared earlier this year: "We no longer discuss the future of India. We say: 'The future is India.'" One can detect it in the sense of entitlement that imbued the reporting of the recent "123" nuclear technology deal between India and the US. 

One of the most powerful indicators of India's transformation is in the world of sport. Recently India learnt that it had been chosen as the latest Asian host for Formula One racing and as a site for the European Golf Tour. In India the move was welcomed as another indication of the country's emergence on to the world stage. "It's a matter of pride for the nation and a big step towards placing India as a true sporting destination," declared Suresh Kalmadi, head of the Indian Olympic Association. 

The same was true of the golf tournament. While there was some grumbling from rival organisations, most people involved in the sport were enthusiastic about hosting this event. One afternoon at the prestigious New Delhi Golf Club, where groups of women were preparing to tee off, in (American-style) golf visors, one woman official revealed that female membership had grown from 66 to 220 in two years. "Golf is more than crazy popular here," said Hanisha Daryani. "It's part of the economic boom, it's called the 'India Story'." 

All the while India is busily preparing to host the 2010 Commonwealth Games, frantically building new facilities and giving Delhi a facelift that has even extended to new hygiene laws for street vendors out of a fear that the country's international sporting visitors will fall foul of "Delhi belly ". When Mani Shankar Aiyar, the Minister of Youth Affairs and Sports, suggested that India's bid to host the Asian games of 2014 would do little to help the country's ordinary citizens, there was outcry. When India lost out to the South Korean city of Incheon, Aiyar was branded a traitor. " There is a segment of Indian society which is extremely rich and which wishes to see itself in the international league," Aiyar later told me. " I wish to see all the people of India benefit rather than just a segment of our people." 

Many Westerners, especially those whose view of India has been hazily shaped by holidays that have left an overwhelming impression of India's " spirituality", may be surprised by the readiness of large swathes of the public to adopt this new incarnation so readily. 

And yet Indians see no problem. In his seminal book Being Indian, The writer Pavan Varma devotes a chapter to the "myth of otherworldliness". " Indians have deliberately promoted an otherwordly image," he writes. " They've always had a down-to-earth relish for the materialistic world. Far from being disdainful of the temptations of money and wealth, they have consistently given value to these goals." 

It is an important lesson. Varma explains there is nothing in Hinduism that ideologically leads a follower to reject the material world for the spiritual. "Contrary to the notion that Indians are 'spiritual', they are really 'material-minded'," he adds. "They are materialists, believing in substance. There is a continuity, a constant flow of substance from context to context, from non-self to self  in eating, breathing, sex, sensation, perception, thought, art or religious experience." 

AND YET for all the swagger one encounters and for all the rapacious consumerism on display, the talk of India having transformed itself into a superpower is, at least for the time being, somewhat overdone. 

No one should doubt that the gains made by India's economy, currently growing at around 9 per cent a year, are not genuine and that they will not have an impact that changes the world order. Already India's place in the list of world economies is shifting. Two years ago its economy joined the world's top 10 and earlier this year a report by the investment bank Goldman Sachs predicted that within a decade it will surpass that of Italy, France and the UK to become the fifth largest. The report said that if current trends continue, the Indian economy will by mid-century have overtaken that of the US as well, leaving it second only to China. 

But alongside these achievements, India is facing considerable problems as it seeks to emulate the US or even eclipse its superpower status. From a purely logistical perspective, the most serious of these is a shortfall in the infrastructure required to support its vision for the future. 

This shortfall is apparent in many frustrating ways: in the water shortages and electrical power-cuts that befall even the biggest cities during the summer months, in the roads so clogged with traffic that it takes for ever to travel even a few miles and which become all but impassable during heavy rains. An investigation published by Business Week magazine included an assessment from Gajendra Haldea, an adviser to the federal planning commission, who has estimated that losses from congestion and poor roads cost India $6bn a year. 

All the international companies that have come to India have realised the only way to ensure they can operate is to establish private campuses in cities such as Bangalore and Gurgaon, away from the local infrastructure, and with their own power and water supplies. 

Others use planes to provide parts and materials to their factories or assembly plants, saying it is economically unviable to rely on the country's road haulage system. The same is said of the ports. And despite these provisions and despite the country's resource of a well-educated, English-speaking workforce, India's logistical capacity is so inadequate that many companies are opting for alternative countries in which to locate their plants. "We believe in manufacturing in India, but we don't believe in logistics in India  yet," said Wim Elfrink, Cisco Systems' chief globalisation officer. 

Anyone taking to the skies in India receives as powerful an insight that exists into the inability of India's infrastructure to keep up with the demands of its middle class. In recent years a flood of new, cheap airlines such as Kingfisher, Sahara and Jet have started flying, based on the low-frills operations that revolutionised air travel in Europe. Journeys that once took several days by train can now be made in a couple of hours and the operation of the airlines themselves is sleek and efficient. 

But recently flying has become increasingly less pleasant. Insufficient runway space, air-traffic controllers and more, mean that planes are often late taking off and are routinely required to circle before landing, wasting countless gallons of fuel and disrupting schedules. 

THERE is another side to all of this. Not everyone agrees upon the future India should be taking, with the consumerist-driven project taking place in Gurgaon, with its malls and the pastel-coloured apartment complexes that come with names such as Beverley Park and an unspoken promise to satisfy every resident's aspirational dreams. 

Many point out that while India's new middle-class may total two or three hundred million people, it is still only a portion of the country's population. Only a tiny percentage is employed by the much-celebrated technology sector. Most powerfully, while the statistics are hotly debated, there are clear indications that the gap between the new middle-class and the poor is getting bigger and that inequality has grown. The vigorous new India is only for some. Indeed, the reality is that hundreds of millions of Indians live in grindingly desperate poverty. 

In a nation of 1.1 billion people, at least 300 million live below the official poverty line of $2 a day. Many millions more live close to this line. The adult literacy rate is around 61 per cent. Life expectancy stands at 64, while the under-five child-mortality rate is 57 per 1,000, though in rural areas the figure is closer to 62 per thousand. There is a widespread problem of child labour. 

The Hindustan Times recently ran a series of articles which claimed that one in six Indians lived in an area of armed insurgency. Many of these struggles are decades old, but is it possible that some recruits to the cause are driven there as a result of the growing disparity within Indian society? 

"I think these are signs of a lack of inclusion, that people do not feel involved with what is happening," said M J Akbar, a veteran journalist and editor-in-chief of The Asian Age newspaper. 

Others have pointed out the environmental costs of the economic transformation. In many cities the roads, already desperately over-crowded, are becoming ludicrously clogged with new, affordable cars. In Delhi alone, the number of new vehicles being registered grows by 16 per cent every year. The implications in terms of C02 emissions and the battle for global resources are vast as India and its 1.1 billion people seek to emulate the lifestyle of the West  a lifestyle that on average consumes 26 times more energy. 

In a 2005 interview with Reuters, the writer and activist Arundhati Roy said while thousands of farmers were committing suicide because they couldn't feed their families, people were too distracted by the pursuit of economic growth to think about the impact of growing cash crops such as soya beans, peanuts and sugar cane which use up scarce water resources. 

"Even if you know what is going on, you can't help thinking India is this cool place now, Bollywood is 'in' and all of us have mobile phones," she said. "There is no understanding whatsoever of what price is being paid by the rivers and mountains and irrigation and ground water, there is no questioning of that because we are on a roll." 

She continued: "The idea of turning one billion people into consumers is a terrifying one. Are you going to starve to death dreaming of a mobile phone or are you going to have control of the resources that are available to you and have been for generations, but have been taken away so that someone else can have a mobile phone?" 

In the run-up to next Wednesday's anniversary, I sought out the wisdom of experience. Sir Mark Tully was the BBC's bureau chief in India for 22 years and has been honoured by the Indian state. Tully Sahib, as he is generally referred to, lives in a flat close to the site of a magnificent Mughal tomb that glowed in the early evening light. Though he resigned as a BBC correspondent a decade ago, he continues to work as a presenter for Radio 4 and is the author of many books about India, the country of his birth. 

In his most recent book, India's Unending Journey, Tully talks a lot about the issue of "growth". He concludes that while growth is important to help the poorest emerge from poverty, growth by itself is not enough. Furthermore, he argues the growth must be suited to India's needs and requirements rather than the pressures of the globalised economy. 

Tully, dressed in a long, mauve kurta, said that despite the creation of a consumer-orientated middle class, he was not persuaded that Indians had been entirely transformed. "Scratch below the surface and you will still find there is still [a lot] of spirituality  even among those going to the shopping malls," he said. 

Asked about India's future, Tully chose to recall a conversation  included in his latest book  with Ravi Venkatesan, the chairman of Microsoft India. Over lunch at the company's Gurgaon offices, Venkatesan showed Tully a computerised diagram that the industrialist believed represented India's options. 

The diagram showed a crossroads with arrows leading to three different elephants. The arrow leading to one elephant rose and then fell dramatically; this was the future if India continued on its current path of rapid growth that only helped a minority of people. Another arrow pointed downwards, with an elephant slipping in free fall; this was India's future if the entire global economy came to a halt. 

The third elephant  its tail up in sprightly fashion  was balancing the globe on its trunk; it represented "India First" . Tully was told that this could be the outcome if everyone put the nation first, " determined that the entire country should benefit from its development". 

*'AN EXAMPLE TO THE WORLD' *
By Simon Usborne 

"There can be no question of coercing any large areas in which one community has a majority to live against their will under a government in which another community has a majority. And the only alternative to coercion is Partition." 

Delivered on 3 June 1947, those were the words of the last Viceroy of India, Lord Mountbatten, as he announced the end of 163 years of British rule, and the cleaving of the subcontinent into two. 

A month later, Britain announced that Partition would take place at midnight on 14-15 August. By that time, trouble was already brewing along the arbitrary line designed to protect India's minority Muslim population by creating the northern dominion of Pakistan. Hurriedly drawn up by Cyril Radcliffe, a British lawyer who had little knowledge of India and using out-of-date maps and census materials, the line divided communities and left tens of millions of Hindus and Muslims in the "wrong" country. The states of Punjab and Bengal would be cut in half. 

On 13 August, just over 24 hours before Partition, the Associated Press reported from Punjab's capital Lahore on the state's "bloodiest orgy of violence in five months of communal rioting". On that day alone, one Lahore hospital reported the deaths of 99 Sikhs and Hindus in knife attacks and six Muslims killed by military and police. 

In Karachi the following morning, as Mountbatten and the new governor general of Pakistan, Mohammed Ali Jinnah, addressed the newly formed Pakistani Constituent Assembly in the first of two independence ceremonies, the mood was one of jubilation. Watched by millions on newsreels and thousands lining the streets outside Government House, Mountbatten read a message from King George VI: "I send you my greeting and warmest wishes on this great occasion... In thus achieving your independence by agreement, you have set an example to the freedom-loving peoples throughout the world." In reply, Jinnah assured the world that he would work to preserve peace. 

Immediately after the ceremony, Lord and Lady Mountbatten flew to Delhi, where the next day, 15 August, hundreds of thousands of Hindus thronged the streets awaiting their own hour of liberation. The ceremony began at 11pm in the State Council building, where the new Prime Minister, Pandit Jawaharlal Nehru, said: "At the stroke of the midnight hour, when the world sleeps, India will wake up to life and freedom." 

As the dignitaries left the ceremony in a horse-drawn carriage, carefully laid plans for celebrations were dashed as delirious crowds broke through police cordons in a near-riot. Elsewhere, thousands rejoiced as they filed out of radio shops, where they had listened to Nehru's independence speech. 

But, as many cheered, reports from other areas told of growing unrest. Learning of Partition just weeks earlier, many Indians were still on the move as some 10 million Hindus, Muslims and Sikhs fled their homes to cross the newly drawn border. Moving in caravans sometimes 70 miles long, entire columns of refugees were attacked and sometimes slaughtered, while trainloads of migrants were killed, their bodies sometimes horribly disfigured. The number of people killed in the exodus is still unknown, but many historians put it at about one million. 

Lord Mountbatten, who immediately became governor-general of the new Dominion of India, was rewarded with an earldom on his return to London for his part in "expertly managing" Britain's retreat from India. 

*VOICES OF INDIA* 

*Interviews by Peter Popham* 

*Patwant Singh, Sikh historian, based in Delhi:* 

I was 22 at the time of Partition. Our dreams were of a proud, free, republican India with a democracy, and the ghosts and demons left behind. But, 60 years on, the demons have taken the place of our dreams  religious bigotry, corruption, increasing polarisation in society. We say we are going to be a global power: it is now 6.20pm, and the electricity went off in the whole of Delhi at 4.10pm. We talk about a trip to the Moon, together with the Americans, but a poor man can't even afford to take a bicycle rickshaw to the hospital. 

My new book, just published, is called The Second Partition, which is the polarisation between the 200 million with money and the 800 million below that. And the people at the bottom don't have a thing. That is the Second Partition. The Maoist-inspired Naxalite movement began as a movement of protest 40 years ago in West Bengal, but it has resurfaced and is now present in 14 out of 28 Indian states  desperation is driving people to violence, even in states that were highly prosperous, like Punjab, where more and more desperate farmers are committing suicide. Out of 12.5 million people in Delhi, five million are homeless: this is the reality on the ground. 

*Urvashi Butalia, author and publisher, founder of Kali for Women publishing house:* 

India and Pakistan have continued to rehearse the rhetoric of enmity for so long, we are still in the shadow of Partition. Until 10 or 15 years ago there was a tremendous reluctance to talk about the subject, and about people's personal histories of Partition. We tried to pretend they weren't there, because it was the dark side of Independence. But in the past 10 years people have begun to talk about it, and the same thing has happened across the border. It is helping us to deal with the hurt and move on. Because it forces us to recognise that there weren't bad guys and victims, that all of us were complicit in what happened. 

I didn't realise until recently but my book, The Other Side of Silence , more than 70 interviews with survivors of Partition, acted as a catalyst for change and continues to do so. Both sides have convinced themselves that the violence came from the other side, but it's not so. It is most difficult to accept that it really came from you. You have to confront that so you can move on. It's easy for Hindus to say those Muslims killed our women but it's not that simple. 

My family was from Lahore, now in Pakistan. Some of us had already moved before Partition but my mother's brother, who was aged 20, decided to stay behind and he kept my grandmother back. We all left but we didn't get compensation because we still had the house in Lahore. My uncle converted to Islam  he was not religious so to him it didn't matter, but he also forced my grandmother to convert and she was a very strong Hindu. She eventually died in 1956 and none of us ever heard from her after Partition. There was no family contact of any kind for 40 years. 

Then in 1984 during the massacre of Sikhs that followed the assassination of Indira Gandhi I realised what Partition must have been like  I had known Delhi all my life but suddenly it became a different city and I was horrified. I took down the testimony of people who were applying for compensation and so many people said, 'It's like Partition,' and that was what made me want to find out more. 

So in 1987 I crossed the border into Pakistan and went to my uncle's house. He was very warm and welcoming. He said he had never been able to talk to anyone about what had happened. And being a convert and living in the same place he was marginalised. But things have improved a lot in the past few years; slowly we are putting it behind us. 

*Ranbir Vohra, Indian historian: *

I was working for All-India Radio just before Independence, based in Lahore. Most of the Hindu staff had already shifted to Delhi but the Muslim staff had yet to arrive, and for several days I and one or two others were running the station alone, getting it ready to prepare for Pakistan Day  the independence of Pakistan. One of our jobs was to go out and get some poems written, patriotically celebrating Pakistan Day  there were plenty of patriotic Indian poems but no Pakistan ones so we had to commission them, then they had to be set to music and sung for the radio. But all the Hindu and Sikh singers had already gone to Delhi so we had to go and find the professional singers, who were regarded more or less as courtesans to sing these new songs. 

That was my contribution to Pakistani independence. But there was such confusion, nobody knew what was going on. I went from my home to the radio station passing dead bodies on the street, burning houses, by the time I finally left, a couple of days before independence, much of old Lahore was on fire. But you had to carry on. 

*INDIA: THE TIMELINE *

1600: The British East India Company is granted a royal charter by Elizabeth I, giving it a trade monopoly. 

1639: The British East India Company gains permission from local rulers to create a trading post in Madras. 

1658: Aurangzeb becomes the ruler of the Mughal Empire. In his 49-year reign, he will conquer India as well as parts of what are now Afghanistan and Pakistan. 

1661: The group of islands known as Bombay is handed over to British rule as part of a dowry for Charles II's wife. 

1668: Bombay is leased to the British East India Company for £10 per annum.

1751: The capture and subsequent defence of Arcot in the Vellore district by Robert Clive and 500 men marks the turning point for the British Empire in its battle for control of India with the French. 

1756: The Nawab Siraj-ud-Daulah, of Bengal, captures Calcutta and imprisons the surviving British in a prison that became known as the "Black Hole of Calcutta". 

1757: The British East India Company defeat the French-supported Siraj-ud-Daulah of Bengal at the Battle of Plassey, giving the British control of the region. 

1773: The British Parliament passes an Act that stresses its ultimate control over the British East India Company. 

1803: Britain captures Delhi. 

1806: In what some see as the first example of a mutiny against the British, Indian sepoys attack the British East India Company's garrison in Vellore. 

1818: The British East India Company defeats the Maratha Empire. 

1853: The first passenger railway in India opens between Bombay and Thane. 

1858: The running of India is taken over by the British government after the failed Indian mutiny. It marks the end of the British East India Company's rule. 

1869: Mahatma Gandhi is born. 

1885: The Indian National Congress is created with the aim of gaining a larger role for Indians in the running of India. 

1911: New Delhi is founded by the British and chosen to replace Calcutta as India's capital city. 

1919: The Massacre of Amritsar occurs when British troops fire on unarmed Indian protesters. 

1920: As a result of the massacre, Gandhi launches the peaceful Non-Cooperation Movement by calling for Indians to stop supporting British rule without resorting to violence. 

1922: Gandhi is imprisoned by the British after he ends the Non-Cooperation Movement as it descends into violence. 

1942: The Indian National Congress launches the Quit India Movement, which threatens the British government with civil disobedience unless they grant India independence. 

1947: India gains independence as Britain withdraws and creates Pakistan as a separate state. 

1947: War breaks out between India and Pakistan over the disputed territory of Kashmir. 

1948: Mahatma Gandhi is assassinated in New Delhi by a Hindu fanatic. 

1952: India's first general elections are comprehensively won by the Congress Party of India. 

1962: Conflict between India and China over boundary disputes. 

1965: Kashmir is again the cause of conflict between India and Pakistan before the UN intervenes. 

1971: India and Pakistan go to war over the independence of Bangladesh. 

1971: India signs a pact with the Soviet Union. 

1974: India conducts its first nuclear test. 

1975: The Indian Prime Minister, Indira Gandhi, is found guilty of electoral corruption but refuses to resign. 

1984: The Gold Temple in Amritsar, being used as a refuge by Sikh separatists, is raided by the Indian army. 

1984: Indira Gandhi, in her second spell as prime minister, is assassinated in New Delhi by her Sikh bodyguards. 

1987: Indian troops are sent to Sri Lanka on a peacekeeping mission. 

1988: Millions of Indians are displaced by floods. 

1990: The Indian army withdraws from Sri Lanka. 

1998: The international community condemns India after it conducts nuclear tests without warning. 

2000: India's census commission announces that the population has reached one billion. 

2001: More than 20,000 people are killed by an earthquake in the Indian province of Gujarat. 

2001: America lifts sanctions on India and Pakistan put in place after nuclear testing. 

2002: War between India and Pakistan looms as Pakistan responds to India's testing of nuclear-capable missiles with tests of its own. 

2003: India and Pakistan agree a ceasefire in Kashmir. 

2004: The Asian tsunami kills thousands in coastal areas. 

2006: A bomb in Mumbai kills 187 train passengers; police blame Islamic militants based in Pakistan. 

2007: A train from New Delhi to Lahore in Pakistan is bombed, killing 68; many were Pakistanis.


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## Bushroda

*Consumerisms final frontier*
*Western-style malls are the most conspicuous signs of a retail revolution that many believe will turn India into one of the next global superpowers*

Ashling OConnor reports from Bombay 
From The Times

The Inorbit shopping centre in the northern suburbs of Bombay is like any you would find in the developed world. Teenagers in the latest fashions hang out on benches, swapping ring tones on their mobile phones and swigging soft drinks from cans. Parents nervously watch their children charge around in the play area while they sip frothy lattes before being dragged off to check out the latest must-have toy. 

Three floors, topped by a multiplex cinema, offer a range of familiar western brands Marks & Spencer, Guess, Wrangler, Mothercare mixed in with local names such as Crossword and Shoppers Stop. It is a bustling, air-conditioned bubble of commerce. The difference for these shoppers compared with their peers beyond the Third World, however, is the sheer novelty of the experience. Even five years ago, nothing like this existed in India. 

White-haired old ladies, wearing traditional saris, straddle the divide between this new retail world and the old one dominated by small family-owned shops often little more than a hole in the wall and open-air markets where goats and cattle wander between the stalls. Guzzling milkshakes in the modern food court alongside denim-clad grandchildren stuffing burgers into their mouths, Indias elder generation seems happy to have made the transition. 

All around them, the US mall culture is being embraced. The largest queue in the eating area is not for the traditional Indian fare of dhosas and vada pav, but for Pizza Hut. 

It is totally different from five or ten years ago when you had to go to shopping lanes or exclusive showrooms because there was no other option, Mukesh Agrawal, 25, a management student, says. 

Wearing a Reebok shirt and trainers, Agrawal says he visits a shopping centre once or twice a week to hang out with friends or buy the latest sports brands. Most of the western brands are affordable, he says. People are becoming more stylish and coming closer to the concept of marketing.
India is undergoing a retail revolution. Spurred by a new brand of consumerism, social classes are being invented with each glass-fronted shopping centre that opens. An unprecedented generation of wealth, spurred by annual economic growth of more than 9 per cent a year, is rapidly moving millions of people up the standard-of-living ladder. 

The result is an irreversible social and economic change that many believe will turn India, despite all its problems of poverty, religious friction and neglected infrastructure, into one of the next global superpowers. There is a tipping point when you reach a certain per-capita GDP like a hockey stick effect. We are not there yet. China is, says Anand Mahindra, one of Indias foremost industrialists. But were getting close. If we have two more years of 9 per cent growth, we are there. Untapped potential is the reason foreigners are itching to break into India, ranked for the past three years as the most attractive investment opportunity for mass-market and food retailers, according to the annual Global Retail Development Index from consultants A.T. Kearney. 

What is happening in retail in India is quite unprecedented in the world, Paul Merrifield, national shopping centre development manager for Aditya Birla, one of Indias top conglomerates, says. The huge population base, combined with heady economic growth, seemingly insatiable aspirations, youth and a lack of existing shopping centre in-frastructure, can only create a unique and enormous potential.

It is still a highly regulated environment, however, in an effort to protect the small shop owner and domestic players. Only single-brand foreign retailers are allowed to operate in India, which explains why Calvin Klein, Guess and Mothercare are common sights. For the moment at least, multibrand operators such as Tesco and Wal-Mart must partner an Indian company. 

Wal-Mart, the worlds biggest retailer, will enter the market next year through a joint venture with Bharti Enterprises, a conglomerate that owns Indias leading mobile phone network. The US giant, like all foreign companies, has been dazzled by Indias numbers. The most frequently quoted figure that sparks murmurs of excitement in the international investment community is the size of the countrys new middle class: 250 million more than four times the population of the UK. 

The consensus in India, which has a population of 1.1 billion, is that this is not an overstatement. There are clearly 50 million households which are truly to my mind middle-class and there are about five members per family, so its a reliable number, Sunil Bharti Mittal, Bharti chairman and a self-made multi-billionaire from Punjab, says. 

Id say 25 million people are as far in terms of wealth as Europe. And 25 million is a nation in Europe. So you have one big European nation here consuming Louis Vuitton and Chanel and certainly 250 million people consuming more than the basic staple goods. The range is big.

McKinsey, the consultants, predicts that by 2025 India will be the worlds fifth largest consuming nation, surpassing Germany, with consumption rising fourfold to 70 trillion Indian rupees. Average real household disposable income will grow from 113,744 rupees in 2005 to 318,896 rupees, according to the firm. 

Growth is driven by volume in India. On a per capita basis, it is still very modest by developed countries standards. But when you look at the fundamentals, we see dramatic changes ahead, Eric Beinhocker, senior fellow at the McKinsey Global Institute, says. 

Indias next spurt of growth will be driven by its deep pool of young talent. More than half the population is under 25. Its collection of 14 million young professionals twice the number in both China and the US is topped up each year by two and a half million graduates. 

With a severe talent supply crunch in a booming economy, the best have their pick of jobs. It is not unusual for young executives to have had five jobs in the three to four years since leaving university. And they are applying the same short-term thinking to their consuming habits. 

The Indian consumer is very young and evolving very fast, Prashant Desai, head of new ventures for Pantaloon Retail, Indias leading retailer, says. 
The trend is creating a new fast-living culture at odds with the staunchly conservative values of Indian society. Old Indians buried their rupees in watertight containers; new Indians are putting them into yachts. 

A lot of people have made money and they want the lifestyle, so they are spending. Its a statement, saying: I have arrived, says Gautam Singhania, managing director of Raymond, Indias best-known tailor, who himself is not averse to flashing the cash commuting in his helicopter and throwing parties on his tri-deck luxury yacht. The younger generation is standing on its own two feet, not just taking pocket money until they get married. They are earning their own. They travel, need clothes and can buy a house and a car against their income. They want to do better than their parents did.

Like many Indian industrialists, Singhania believes the real societal shifts in India over the next few years will happen in the second-and third-tier cities. The big metropolises such as Delhi and Bombay are already well advanced saturated some might say to the point where top-level salaries and living costs are on a par with the developed world. 

The small cities are where there will be the biggest changes, because the market has been neglected for so long. There is pent-up demand, he says. We recently opened a 10,000 sq ft store in Andheri (a Bombay surburb) and had sales of 150,000 rupees on day one. A 2,500 sq ft store in eastern India had opening day sales of 250,000 rupees. I know someone who went into a Rolls-Royce showroom and bought one on impulse on his way to buy a $250,000 stereo system. And he came from Indore [a city in central India famous for its forts, palaces and textiles].

Middle-income Indians in mid-sized cities have been unleashed not only by rising salaries and a strong rupee but the advent of consumer credit. If you were here in 2000, you would have seen very different consumer behaviour, V. Vaidyanathan, head of retail business at ICICI Bank, Indias largest loan provider, says. There was less willingness and propensity to consume. Loans were available only to the upper economic segment and the average consumer did not have the confidence to borrow. Things have changed. 

Now people can see their own cashflow and [borrowing] has become easy. Finance companies are rushing to give money. India is already Visas largest market for debit cards in Asia, with 34 million customers last year. Barclaycard this year launched three credit cards in India. 

There is an emerging middle class [who are borrowing] in a country where people have a stable income stream and want to buy big-ticket items and spread their payments, Anthony Jenkins, Barclaycard chief executive, says. Credit cards always start off as a high-end product. We are clearly past that stage in India. We are starting to see mass-market growth. The upside is huge. India, as a country, is still hugely underleveraged: borrowings account for only about 10 per cent of GDP, compared with 35 per cent in southeast Asian countries. The average loan value in India is just one seventh of that in the developed world. Most of Indias 600 million-strong rural population does not even have a bank account. 

But the changes afoot are tangible. India, traditionally a nation of savers, is becoming a nation of spenders. The best indicator is the mobile phone market, the fastest-growing in the world with six million new subscribers a month. There are estimated to be 165 million in the country today and this number is projected to grow to between 500 million and 600 million by 2011, as first-time phone owners skip the fixed-line step to communication. 

Mobile phones are not the preserve of the rich. Taxi drivers, maids, fruit-sellers and street hawkers all have them, lured by local tariffs of one rupee a minute and handsets costing as little as £20. 

We are seeing India transforming and it feels good to be part of it. The real take-off has happened in the last four or five years. India is creating more jobs and thats created a larger middle class, Uday Kotak, managing director of Kotak Mahindra, Indias third-largest commercial bank, says. 

By 2010, there will be 580 million consumers in the key 15 to 44 age bracket in India, according to CLSA, the brokers. China will have 665 million. The test for India, a messy democracy versus a neat, capitalist autocracy, is to make sure a large proportion of the 600 million people still dependent on agriculture for a living are also invited along for the ride. That is one of the biggest challenges for India to ensure more inclusive growth, Kotak says. If we can create jobs, it will be. 

The prosperity of mid-tier cities, which act as a bridge to rural India, is key. Without a fairer distribution of Indias new-found wealth, the rich will only get richer and an explosion of social tension lies ahead as the poor are left outside the doors of plush department stores, resentfully eyeing the goodies in the arms of their luckier compatriots. 

*A holiday paradise* 
Historian Michael Woods on his 20-year love affair with India
Experts choice of top hotels
Where to find the best curries
How to meet a maharajah
Ganges whitewater rafting
Dance like a Bollywood star


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## Bushroda

*Tomorrow's World Power Turns 60*
By Mathieu von Rohr
Spiegel Online, Germany 

*It's been 60 years since India won its independence and the country of Mahatma Gandhi is now on track to becoming a global power. But the country's new prosperity remains elusive for many, with millions of farmers still leading lives of abject misery. SPIEGEL visits five very different places to see what India's future holds.*

The Republic of India was only four hours old when an untouchable, a girl named Shyama, came into the world in Gurgaon, a village near Delhi. She was born at 4 a.m. on August 15, 1947, in a simple brick house, the third of seven children.

Shyama's mother later told her about the fireworks and the street celebrations that night, and about the historic words of India's first prime minister, Jawaharlal Nehru: "At the stroke of midnight hour, when the world sleeps, India will awake to life and freedom." But one man, Mahatma Gandhi, the father of the Indian nation, was not celebrating that night -- because millions of people were still starving and because independence also meant partition of the former British India into two countries, India and Pakistan. Instead, Gandhi stayed at home and fasted.

Find out how you can reprint this DER SPIEGEL article in your publication. The family that Shyama was born into that night was not among India's poorest. Her father was a low-ranking civil servant. But they were pariahs, members of the Jatav subcaste. Their ancestors had been leather workers, which made them unclean, placing them at society's lowest rung. Not even their shadows were permitted to touch a Brahmin.

An untouchable, a man named Dr. Bhimrao Ramji Ambedkar, had written much of the new country's constitution. It was designed to create a country in which all citizens would have equal opportunities. "If things go wrong under the new constitution, the reason will not be that we had a bad constitution ," said Ambedkar, "What we will have to say is that man was vile."

Over the course of the country's history since independence, it periodically seemed that things would indeed go wrong. But now that the Republic of India is turning 60 on Aug. 15, the world no longer mentions the country in the same breath as tales of poverty and hopelessness. Today's stories about India are tales of success.

The legacy of the 1947 partition can still be felt in India, especially in disputed Kashmir.

Shyama was a good student, one of six girls to attend the local college in Gurgaon. She loved to dance and wanted to become a film star. But the other students shunned her. Their families were from the affluent Jat caste of farmers, and they routinely disparaged her as an untouchable and called her even worse names, which she later did her best to forget. Shyama swore to herself that she would be a great success in life. When she was 16 she assumed a new last name so that people could longer tell what her caste was. Because she was born on the same day as India, she called herself Shyama Bharti -- Shyama, the Indian. "I abandoned my name to abandon my caste," she says.

Like the country, Shyama is now almost 60, but she looks younger. She sits in her office in downtown Delhi, wearing a pink sari. She has large, dark eyes and a narrow nose with wide nostrils that makes her look almost aristocratic. She wears her dyed black hair piled up on her head in a hairstyle similar to the one favored by her idol, Indira Gandhi, India's third prime minister.

As a general director of Delhi Transco Limited, the city's electric utility, Bharti is at the highest level she can be promoted to in her career as a civil servant. She has four telephones on her desk, and her business card reveals that she has four university degrees. "As far as education goes, I'm a Brahmin," she says, laughing.

She earns 42,000 rupees, or 760, a month. Her husband receives a government pension. The couple is provided with a driver and a car, a company mobile phone and a large house with servants. The Indian state treats its civil servants well.

Shyama Bharti managed to complete her ascent into the upper middle class long before today's new generation of social climbers, who make their money as call center agents and IT specialists, came on the scene. About 200 million of India's 1.1 billion people are already part of the middle class today, a number that is expected to increase to about 600 million by 2025 -- figures that are enough to make investors delirious.

Shyama Bharati, seen here in her Delhi office, was born on the day India got its independence.

The West has long realized that India is on its way to becoming a global power. The giant country is expected to be the world's third-largest economy within the next three decades. India and the United States signed a joint nuclear treaty only two weeks ago. India has been de facto accepted as a nuclear power, and its next goal is a permanent seat on the United Nations Security Council. The country's elites are literally bursting with self-confidence.

Indians who read newspapers can marvel at the daily stories of progress in their country, and of its rise to prominence. India launches an Israeli spy satellite into space. Indian automakers plan to acquire Jaguar. Free wireless Internet in all of Bangalore. Domestic flights doubled in the space of two years. Bank accounts opened for each and every resident of the state of Himachal Pradesh.

At the same time, India's infrastructure remains a problem. Its roads, buses and airports are in a woeful state of disrepair, and power outages are common.

A trip through India is a lesson in glaring contrasts. India is a land of the future, and yet parts of it are still a long way from the present. It is a country of the fabulously rich and the desperately poor, of Hindus and Muslims, wooden plows and nuclear power plants.

Shyama Bharti will go into retirement on Aug. 15, her 60th birthday. She and her husband will move to her old village, Gurgaon, which has since been engulfed by Delhi's southwestern suburbs. The land the couple bought there 20 years ago is worth at least 100 times what it cost them to buy.

*Part 2: A Land of Contrasts*

*GURGAON: 'It Will Be Singapore in Five Years'* 

Ashish Gupta sits in a glass booth on the second floor of a salmon-colored, semi-circular office tower in Sector 39 of Gurgaon, and says: "It will be Singapore out there in five years." Today there are still meadows out there, and cows still routinely stroll across the street, holding up traffic. But Gupta is quite serious.

The India of the future is emerging in Gurgaon. Where there was once nothing but brush, now glass and concrete towers are being built to house the offices of Western conglomerates like Siemens, Alcatel and Microsoft. The construction workers live in tents between the buildings. An eight-lane highway cuts through what is still a no man's land, with constant traffic jams lining up in front of half a dozen new shopping malls. A subway is being built to downtown Delhi.

Gupta wears black trousers, a blue shirt and a tie. He attended college in the United States and once worked for corporate consulting giant McKinsey. He is the Chief Operating Officer of a company called Evalueserve. His job is stressful and he is sweating profusely, despite the air-conditioning in his office. The company has 2,100 employees and has only been in business for the past six and a half years. It grew by 100 percent each year in the first four years, and another 75 percent in the interim. Evalueserve is in the process of expanding into China, Chile and Eastern Europe. Gupta's sentences are sober enough, and yet he sounds almost intoxicated: "The question is not how big we want to become, but how big we can become. Theoretically, there is no limit."

Evalueserve is a showpiece company in the new India. While China is growing through low-cost industrial products, India in growing through cheap services: call centers to serve customers in Ohio, IT specialists handling the programming for European clients and market research companies such as Evalueserve that perform tasks like analyzing the shampoo sales of their clients' competitors.

According to Gupta, there is absolutely no doubt that India is becoming a global power. "We need another 20 years, but they'll fly by."

The Indian economic miracle began in 1991, when Ashish Gupta was still a student. Manmohan Singh, the finance minister at the time and India's prime minister today, jettisoned the "democratic socialism" of the country's founding fathers. Until he came into office, large sectors of Indian industry were still state-owned. Singh began privatizing companies and liberalizing markets. The IT industry has been booming since the late 1990s, and the economy as a whole has grown by an average of 8 percent a year in the last five years.

At Evalueserve more than 100 people, most of them under 30, work in a single room, sitting at long rows of yellow desks and staring at computer screens. One of them is Senior Analyst Andrea Demsic, a 30-year-old blonde with cherubic cheeks and a contented smile, who works in the company's Business Research department. She comes from the southwestern German town of Schwäbisch-Gmünd and speaks the Swabian dialect. After earning a degree in economics from the University of Jena in eastern Germany, she says, it was relatively difficult to find a job in Germany. One day she saw a job posting at her local employment office: Seeking analyst for overseas position. She applied for the position and, a year and a half ago, ended up in Gurgaon.

Demsic's starting salary was 21,000 rupees, or about 380, plus a free apartment. She was promoted after the first year. She says that she could imagine staying in India for a while longer.

She is impressed by the ambition of her Indian coworkers, and by the city being built around her. "There is movement here. Everyone wants to achieve something. There are opportunities to climb up the corporate ladder in India. It's so different from Germany."

Thirty-six foreigners work at Evalueserve, and their numbers are also increasing in other Indian companies. Ashish Gupta, the COO, smiles. He needs people who know Europe and speak its languages perfectly, because his customers come from Europe. But he is also happy with the message he is sending to the world: Instead of hiring exclusively Indians to work for the West, Indian companies are now also creating jobs for Western workers.

*VIDARBHA: 'They Build Cities and Neglect the Villages' *

His wife and two sons were sound asleep when Punjaram Kubde, a farmer, got up in the night and went into the next room, where he kept sacks of seed, fertilizer and poison. He poured himself a cup of pesticide and drank it. His wife found him dead on the stone floor the next morning.

Now his body lies underneath a pile of wood that the men and women of Chondha have assembled on a green hill in front of the village. They have painted his face purple, brought him flowers, rice and coins for his journey into the next world, and wrapped his body in a white sheet.

About 200 people have come to attend his cremation. Their faces are serious. Kubde's is the first case of a farmer taking his life in their village. Some say that if it doesn't rain soon his suicide will not have been the last.

Chondha is in Vidarbha, in the middle of India and one of the country's poorest regions. This year alone, 521 farmers have already killed themselves in Vidarbha. Last year there were more than 1,200 suicides. Almost all of the men used pesticides, while a few set themselves on fire.

The wife of the dead farmer sobs quietly, her body trembling. Her name is Lalita and she is wearing the orange sari she reserves for special occasions. She is only 30, young and beautiful, but she will remain a widow for the rest of her life. Village rules forbid widows from remarrying. Sagar, the couple's eldest son, is 10. A man helps him hold a burning bundle of straw, which he must use to ignite the funeral pyre. Then the men and women of Chondha walk around the fire, throwing in sticks.

Punjaram Kubde was an important man. He owned 12 hectares (30 acres) of land, a large house and a motorcycle. He was 45, a powerful man with a mustache and, like most men here, he was a cotton farmer. He grew a strain known as "Bt cotton," developed by US agricultural chemicals giant Monsanto. According to the farmers in the village, conventional seeds are unavailable these days. No one knows why, but the dealers no longer sell it. Monsanto's genetically modified seed is expensive and a new supply has to be purchased every year. The seed makes up half of the farmers' production costs. Even worse, if Bt cotton gets too much or too little water, it reacts far more sensitively than normal cotton.

When last year's heavy rains ruined his harvest, Kubde was unable to repay his bank loans, and the banks refused to lend him more money. He went to private moneylenders, who lent him the money he needed for new seed, but this year brought more heavy rains and Kubde lost his crop once again. In the end he owed half a million rupees and no one was willing to lend him any more money.

Unable to liberate himself from his mountain of debt, he would have been forced to become an indentured servant to his creditors. He chose an easier way out.

The man who counts the region's dead is named Kishor Tiwari. A former engineer, Tiwari founded his own NGO in the small city of Pandharkawada, where he now has his office. He spends his days sending out e-mails filled with accusations and numbers. More than 6,000 farmers have already committed suicide in Vidarbha, he writes, and more than 2 million farmers are in debt. Tiwari reports the news from an India that has nothing to do with the country analysts are touting these days.

About two-thirds of Indians today are still farmers, a number that puts many things in perspective. They live in villages that consist of a handful of tiny mud huts, each containing a sleeping room, a second room for the kitchen and an outdoor latrine. The muddy paths between the huts are littered with cow dung.

More than 300 million Indians live in poverty and 400 million are illiterate. In many parts of India, dependent feudal relationships still exist, women and untouchables are oppressed, there are honor killings and the practice of setting widows on fire is still not entirely abolished.

Kishor Tiwari is a cantankerous man wearing polished shoes, black trousers and a white shirt. He has himself driven through the area in a car with a sign in the front window that reads: "God has sent this man to the poor."

He sits in the back of his car as it bumps across a street filled with potholes, blaming the liberalization of the agricultural market for the farmers' troubles. First, he says, the government almost stopped buying up cotton altogether, and then it permitted the importation of cotton and genetically modified seed. The end result was a plunge in the price of cotton.

He talks about Mahatma Gandhi, who founded his village commune Sevagram Ashram in 1936, not far from here. Tiwari says that Gandhi's successors have betrayed him. "They build cities and neglect the villages. For Gandhi the village, which is self-sufficient, was the pillar on which this country stands. Instead we now have the enslaved village."
According to Tiwari, the same liberalization that is driving India's growth is breaking the farmers' backs.

*Part 3: The Scars of Partition*

*MUMBAI: 'Within Half an Hour I Would Have Enough Muslims Here Ready to Fight'* 

The city of Mumbai, formerly known as Bombay, is home to some of the poorest of India's poor. More than half of its residents live in poor neighborhoods like Dharavi, Asia's second-largest slum, which investors have targeted to be converted into a modern residential development.

Mumbai is also home to India's wealthiest citizens. Most of the country's billionaires live here, such as the Ambani brothers, whose father, a former merchant, worked his way up the ladder to earn his billions. Another is Anand Mahindra, who dreams of dominating Europe with the SUVs his company makes.

Mumbai is also Bollywood. The city's film industry produces hundreds of movies each year, productions full of saccharine music and starring actors who are paid millions.

The careers of most Bollywood stars are short-lived, with only a handful becoming legends. The most unforgettable star of them all lives in a villa in the Cumballa Hill neighborhood in Bombay's Midtown district: Dilip Kumar, the first and probably greatest star Indian cinema has ever had.

He stands in the foyer of his villa, dressed entirely in white, holding up a palette and a paintbrush. Surrounded by a dozen photographers and jostling cameraman, Kuman remains unperturbed. Saira Banu, his wife, stands next to him and Jatin Das, a well-known artist. The trio is producing a charity painting for Bombay's street children.

Dilip Kumar is 84. Born in Peshawar in what is now Pakistan, he comes from a Pashtun family of 12 children. His real name is Mohammed Yusuf Khan, but it sounded too Muslim for him to become a star. He has trouble remembering the old days. When asked about 1947, the year of independence and partition, the first thing he remembers is playing football with the British. Then he recalls images of horror and death and the massacres that followed independence, and his three cousins who were killed in the unrest. The old man's eyes fill with tears. Then he says: "It was very eventful."

Partition brought horrific massacres. Already in 1946, the year before partition, militant Hindus, Muslims and Sikhs were fighting each other, and when the British announced the borders for the future countries of India and Pakistan, 10 million refugees left their homes, attempting to reach the right side. Many never made it. A Muslim mob butchered a train filled with refugees in the Punjab, Hindus destroyed hundreds of mosques and Sikhs murdered Muslims with axes. Millions died. India and Pakistan were born out of a bloodbath.

Dilip Kumar has spent much of his life campaigning for reconciliation between the two countries and has even been decorated for his efforts. But now, in his old age, it is all coming back to him. He says: "If it ever happened again, within half an hour I would have enough Muslims here who would be ready to fight."

Kumar sits in his armchair like some emperor in the waning days of his life, a glittering dome above his head. A painting on the opposite wall depicts him in his role as Bollywood's great romantic star, posing with his hand outstretched. The old man stares into space and says that he misses Peshawar and occasionally goes to the mosque.

*KASHMIR: 'I Am Afraid of Everything'* 

The wound of partition has never properly healed in India. Here, in Kashmir, it is still wide open.

Dal Lake sparkles in the sunlight against a backdrop of the green slopes of the Pir Pinjal Mountains. Srinagar, the capital of Kashmir, is a magnificent place -- but is also one of the world's most dangerous.

Two nuclear powers, India and Pakistan, are confronting each other up here, both laying claim to predominantly Muslim Kashmir. China also occupies part of the region. Kashmir is probably the world's most heavily militarized zone. There are 500,000 troops stationed on the Indian side, along with paramilitary forces, police and intelligence agents.

And all this is just because the Maharaja of Jammu and Kashmir, flirting with independence, hesitated to choose a side in the year of partition. Pakistan sent guerilla troops, the Maharaja called for help from India, and a cease-fire line has separated the armies of the two countries ever since.

Despite frictions, Kashmir was long a dream destination for tourists, until a guerilla war of independence, supported by Pakistan, erupted in 1990. Today the region is a war zone, devastated and lacking an economy or infrastructure. But things have quieted down in recent years, as the militants have scaled back their attacks. Is there reason for hope in Kashmir?

The Mirwaiz of Kashmir, Omar Farooq, is the religious leader of Kashmir's Muslims and one of the province's best-known politicians. He lives in a dusty pink house in downtown Srinagar, where a dozen bearded men with guns sit in the entranceway. Farooq, who is only 34, wears a beard and designer glasses, and is currently doing a PhD on Sufism at the University of Srinagar.

What is he afraid of? Farooq's answer can be summed up in one word: Everything. On the one hand, there are the militant groups that murdered his father 17 years ago, so that he was only a teenager when he became his successor. On the other hand, there are the Indians, who also cannot be trusted.

Farooq is a young, intelligent man, but he has already internalized this conflict so much that it seems as if he has been dealing with it for the past 60 years. He is considered a moderate, one of those who want to negotiate with the Indian government. The Indian prime minister recently proposed that the line of control be turned into a "line of peace" between the two countries. There is a proposition for some kind of joint administration of Kashmir by India and Pakistan.

The Mirwaiz is in favor of these efforts, but he is frustrated because there is, in fact, little progress. He believes that it is high time that Delhi do something to back up its declared intentions. Indian newspapers write that Kashmir is faring better than ever, and that its economy is booming. The Mirwaiz smiles sadly. Kashmir is a place that makes people melancholy.

*DELHI: 'We Aren't the Only Ones Doing Well' *

Shyama Bharti, who was born on Aug. 15, 1947, is sometimes astonished over how much her country has changed. "When I was a little girl India was dominated by the rural population, and the farmers couldn't read and were superstitious," she says, "but now even their standard of living is rising. People are educated and they know their rights and duties."

In those days, says Bharti, her family's house was furnished with only one bed, three blankets, a few chairs and a transistor radio. "Nowadays we have air-conditioning everywhere and everything is fully furnished, and we aren't the only ones who are doing well." Every morning and every evening, Bharti goes to the small altar room behind her kitchen to give thanks to Ganesha, the elephant god.

On weekends Bharti visits her poor relatives, where she is treated like a guest of honor. She tells them that women should fight for their rights and their careers. Sometimes she gives them money. She is thinking about going into politics after she retires. She says that the country gave her a lot, and that it's now her turn to give something back.

She is immensely proud of her sons. The older one has also chosen a career in the civil service, and was accepted into the prestigious Indian Administrative Service, which accepts no more than 300 applicants each year. When his appointment was announced in the newspaper, Bharti and her husband were inundated -- to her delight -- with offers of brides for him. But what about love? "Indians aren't fond of love marriages," says Bharti, "They prefer arranged marriages. It's safer." Her marriage was also arranged.

India's traditions are not disappearing with its economic boom. Indeed, newspapers are reporting a new trend: Middle class families going into financial ruin to come up with dowries for their daughters.

Did the family of her son's bride pay her a dowry? "We did not take one," she says. "Only greedy people do that."

Bharti and her husband selected a pretty girl for their son. She is a senior civil servant, an intelligent woman.

Is she from the same caste? "Of course!" says Shyama Bharti.

*SPIEGEL traveled to five different parts of India to get a glimpse of the country's future.*


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## Bushroda

*Sixty years on, independent India is booming* 
Easier, UK 
9 August 2007 

60 years of independence next week Sam Mahtani, manager of F&C's top performing Indian Investment Company, believes the structural story underpinning the country's growing prosperity will continue. 

India has delivered four successive years of above 8% growth, and is the world's second fastest growing economy after China. Mahtani says India's success story has been the result of a combination of changing perceptions and governmental reforms. Although growth is likely to moderate, the outlook for the Subcontinent is very strong led by growing domestic demand.

"In the decades following independence, growth remained at around 5%. But the government's decision in the 1990's to proactively target growth by aggressively cutting interest rates coupled with the introduction of several key reforms - including the privatisation of major industries such as telecoms and utilities, cutting red tape and improving the mechanisms for foreign direct investment - have improved efficiency in the economy and injected a large dose of liquidity into the Indian financial market. India is now seen on an equal footing to China," he said. 

The Indian stock market has grown by 51.8% on an annualised basis for the past three years in US dollar terms. Mahtani says that although earnings are likely to slow to around 15% by the end of 2007, the outlook remains healthy for the long term investor. 

"Although company valuations are quite high at 18 times forward earnings, the government's commitment to infrastructure spending and an increase in foreign direct investment should continue to support the economy and the markets. Equally, GDP growth remains healthy although the recent rises in interest rates should see economic growth moderate to 7-8% per annum over the next few years," he said. 

The Indian Investment Company  a SICAV fund - is top percentile in the India equity sector over three years. Mahtani, who retook management of the fund in May 2004, said his long-term thematic approach had lent itself well to the fund's robust performance. 

"With a governmental commitment of some $300bn to infrastructure spending over the next five years, we have found great opportunities among companies such as BHEL, the monopoly producer of power plants, which stands to benefit from its exposure to this theme. 

"Mobile telecoms is another area where we see an explosion of growth. With only a 14% national penetration rate in India, mobile operators such as Reliance Communications and Bharti Airtel have a great chance to grow their customer base," said Mahtani.

According to Mahtani, the industry estimates that some 6 million subscribers are added each month and rural areas, where the penetration rate is even lower at just 2% present the most potential.

"As India's rural populous becomes more affluent, past experience has proved that the one of first items a consumer is likely to purchase is a mobile phone." 

Other themes being played in the portfolio are cement, petrochemicals and refining. Demand for cement is likely to rise in line with the increase in infrastructure spending and India's strong growth is boosting demand for energy and petrochemicals as well.

"In the area of cement, we like the largest cement producer in the country, Grasim Industries, which has operations nationwide, and Reliance Industries, which is the largest private sector company in India and is a core holding in our fund and a bell weather for the petrochemicals and refining industry," concluded Mahtani.


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## Bushroda

*Gandhi's hand looms over India's surging economy*
By Alistair Scrutton
Reuters, UK
Fri Aug 10, 2007 2:45AM EDT

When Tata Steel bought an Anglo-Dutch competitor this year for $12 billion, the newspaper headline "Empire Strikes Back" symbolized how far India's economy had come in the 60 years since independence.

The aggressive foreign grab by a private Indian firm was a far cry from the image of a simple village handloom used by Mahatma Gandhi in India's fight against British imperialism and his campaign for economic self-sufficiency, or "Swadeshi".

Then, Indians felt self-rule was about economic survival as British competition sucked the life out of local industries. Life expectancy was around 30 years, famine an ever-present threat.

Now, India's capitalist kingpins are on a global buying spree, from snapping up Scottish whisky distillers to eyeing the purchase from Ford of the luxury Jaguar car brand.

Westerners fret about losing their jobs to India's cheap, educated professionals.

"These 60 years have been a trying period," said T.K. Bhaumik, chief economist at Reliance Industries Ltd., India's most valuable company.
"We have faced several calamities but we have created a middle class, a new entrepreneurial class and now young Indians are managing global firms."

But, despite the successes, the shadow of independence -- whether bucolic Swadeshi or the later Soviet-inspired socialist protectionism of India's first prime minister, Jawaharlal Nehru -- still hovers over "shining" India.

India's policy-makers, many born before 1947 and imbued with the ideals of the founding fathers, have been cautious about opening up the economy further, slow to build on market reforms that began in 1991.

For critics, they are still too often distrustful of foreign investment and continue to feed off a corrupt government apparatus that twisted the ideals of Nehru's state socialism and threatens modernizing reforms.

"Here, it is fashionable to be anti-reform," said Surjit Bhalla, head of Oxus Research and Investments.

India's fragile coalitions, often backed by powerful regional and caste-based parties, are often unable to push through big-bang reforms for fear of losing mass support.

*YOU CAN'T SELL THAT HERE*

For sure, foreign investors face challenges.

Take two global giants, the U.S. retailer Wal-Mart and British-based telecoms player Vodafone.

India's $350 billion retail sector is dominated by small neighborhood stores, and the ruling Congress party, which heads a fractious centre-left coalition, is grappling with how to ease the entry of corporates without throwing millions out of work.

Wal-Mart, which has signed a wholesale deal with India's Bharti Enterprises, has been caught in the middle and has faced street protests.

Vodafone Chief Executive Arun Sarin said this year his hopes that India's bureaucracy had changed were shaken by moves to derail his company's $11 billion takeover of telecoms firm Hutchison Essar.

"The billionaire losers' club was trying to unwind the deal," he said. "What I didn't count on was that the bureaucracy would kick in with this kind of evil spirit from our competitors who had lost." 

Sarin later said his remarks were aimed at "vested interests" who had tried to scupper the deal.

There is no doubting the successes of independence. According to one estimate, India has pulled a population equivalent to that of Western Europe out of poverty since 1947.

It now exports food, doctors and vaccines to the West.

Decades of "Hindu rates" of low single-digit growth have given way to record economic expansion. India's 50 million-strong middle class could expand ten-fold by 2025, consultancy firm McKinsey says.

"There were two spurts of reforms -- one from 1991-1993 and another from 1998 to 2004," said Arun Shourie, a former minister in a coalition led by Hindu nationalists, which was voted out in 2004 after running a stridently pro-reform campaign.

"These two reform periods created enough elbow room for the private enterprises and middle-class to grow," Shourie, a former World Bank economist and newspaper editor, said.

*NO TIME TO LOSE*

But if India is to truly free itself from the past, then it has to put its people first: education and health care in South Asia rank only above those of sub-Saharan Africa, a report by the Asian Development Bank said.

There are growing income gaps, especially between urban elites and the two-thirds of Indians who live in villages.

"This is an issue about which we started talking even before we acquired our independence," said former 1990s finance minister Yashwant Sinha.

"India is growing at 9 percent, 10 percent. On the other hand these basic necessities of life are not being adequately delivered and the old debate between growth and development has become very real."

For many, the government has a Jekyll and Hyde character, capable of firing rockets into space but incapable when bureaucrats halt social projects because they disagree on what color pen -- red or green -- must be used to sign memos.

That needs to change fast.

"You in the West have had the luxury of time and started off hundreds of years before us," said Sheila Dikshit, chief minister of New Delhi. "We haven't got the luxury of time."


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## Bushroda

*The story of India and me*
*From the high Himalayas to the Tamil south; our correspondent celebrates a 20-year love affair*

Michael Wood
From The Times
August 11, 2007

A conversation with a stranger on a slow train  36 hours through Ratlam and Indore up to Ajmer  started my love affair with India, one that has gone on for the past two decades. 

During a midnight stop, while sitting on the steps enjoying the cool night air, I began chatting to a travelling salesman from a chemicals firm. The giant fortress of Chittorgarh stood ghostly pale in the darkness, and my companion regaled me with terrible tales of its past: of Rajputs and Moguls, sieges and battles, heroic deaths and mass suicides  all the epic drama and romance of Indian history. 

But if you really want to see something, he said, you should go south, to Madurai. 

So I made my way down the west coast and took the old steamer to Goa, and on to Cochin. A few days later I took the train that winds over the wooded hills of the Western Ghats. It was night before we reached Madurai, where I made my way through darkened streets past sleeping rickshawmen. Soon the huge temple gateways soared above me, disappearing into the night, their crowded storeys teeming with sculptures of gods and goddesses, garish as a Hindu Disneyland. Inside, I entered a dark labyrinth: giant corridors whose granite pillars were carved into monstrous snapping demons and dragons. The architecture was different from anything I had ever seen. With a flurry of drums and squeal of trumpets, white-clad priests scurried past with a golden palanquin. It was as if the ancient world was still alive. 

I stayed a few days, watching the crowds pour in from dawn till dusk to celebrate the patron of the city, the fish-eyed goddess Meenakshi. Access to the inner shrine is restricted to Hindus. But the second night one of the priests came over and asked if I wanted to see the goddess. 

That night I experienced the ancient rituals of the Tamil world for the first time: the statue of the goddess, the music of nadeswaram (reedy Tamil trumpet) and drums, the scent of ghee, jasmine and incense, the tinkling temple bells, the sacred flame gilding the faces of the devotees who went into the womb chamber, as the goddess shrine is called. Coming from industrial Manchester, I had never seen such things. Those smells and images have stayed with me and sum up my fascination with this wonderful country. 

More than 20 years later, and after almost 30 visits, the magic has never failed. My wife, Rebecca, and I fell in love there, first travelled together there, were married there, and have taken our children back time and again to meet our friends. India has a special place in our hearts. 
The country has changed considerably. The economy, which after independence 60 years ago was all about nonalignment and self-sufficiency, is now booming. 

One of the great powers in history is returning  and not just in Delhi or Bombay, where shopping malls and condominiums are proliferating and property is more expensive than London. Even in smalltown Tamil Nadu, where we have stayed off the beaten track with our kids, you see the signs everywhere: the wide processional street around the temple has been surfaced, shiny retirement homes for devotees are going up, and there are new hotels with air-conditioning, satellite TV and internet. Its a far cry from my early days travelling in the country, when we would have to make a booking at the telegraph office to phone home at Christmas. 
The impact of tourism hasnt always been good, however. The biggest shock was returning recently to Jaisalmer, which I had first visited at new year 1987. The golden city that I remember rising out of a scrubby desert behind a nomad encampment now is completely surrounded by hotels, shops and tourist offices selling Rajasthani camel tours. The interior of the city, one of the jewels of northern India, is almost entirely given over to travellers with hotels, cafés and boutiques. Some of the buildings may be beautiful, but to my mind the development has blighted the magical setting of the city. 

Coming here recently to film The Story of India has made me appreciate the country even more. The wonderful variety of landscapes and cultures never fails to amaze me: the Buddhist sites of Leh and Ladakh, the Gonds of Orissa, near the magical lake at Chilika; Kerala, where you can rub shoulders with Syrian Christians, Indian Jews and Muslim boat-builders, who still ply the spice trade to the Gulf in their great wooden sailing boats. 

On the east coast I love the old French town of Pondicherry, where the boulangerie sells fresh baguettes and the policemen still wear the képi. Up north, we have journeyed to the Himalayas, with magnificent treks around Amarnath, Gangotri, and Badrinath, up to the mountain passes into Tibet. Down in the plains, I still find Varanasi inexhaustibly fascinating. 

Despite all the undoubted attractions of Rajasthan, Mogul Delhi and Agra, if I had to choose a favourite part of India, it would be the south: the worlds last classical civilisation. Here you can touch on Indias oldest living traditions in music, dance and literature. The giant temple cities take your breath away: Madurai, Trichy (Tiruchchirappalli), Thanjavur and Chidambaram. The Tamils are welcoming; they love their culture and live without the frenetic rush of the north; comfortable in the global age, yet still existing in sacred time. 

We travelled here when our children were young, and they loved the life and colour, and the friendliness. India is a great place to travel with youngsters: our younger daughter has never forgotten how, aged 5, she fed bananas to the temple elephant at a festival in Chidambaram, and the mahout sat her on the animal and walked her around the courtyard to the delight of the pilgrims. 

Many of my friends think you shouldnt travel around India with kids, but my experience is that you just need to follow certain basic health rules. 

Otherwise, the only problem can sometimes be the huge and rather sweet interest that foreign children generate. A few years ago, we took ours out of school and went with Indian friends to the Kumba Mela festival on the Ganges, where we stayed in a tent among millions of pilgrims. Wherever we went, people wanted to touch the girls and be photographed with them. 

When I returned to Chidambaram a few months ago with the film crew, staff at the hotel Saradha Ram still enthusiastically asked after my daughters. The girls have stayed there three times, and as you can imagine, two blonde North London youngsters caused great excitement among the well-mannered Tamil boys who do the small jobs around the hotel. 

There is so much to see in India that you would need several lifetimes  no wonder the Indians believe in rebirth. People tell me that I must be tired of the country after a dozen visits in the past 18 months, some of them long and gruelling journeys. But the opposite is true. I have come to love India and admire its people even more. *To paraphrase Dr Johnson, if one is tired of India, one is tired of life.*


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## Bushroda

*India comes of age, as it looks set to topple US*
*Patrick Collinson discovers rich pickings for canny fund investors as India's economic revolution continues* 
Saturday August 11, 2007
The Guardian, UK 

As India celebrates 60 years of independence on Wednesday, what of the investors who tip-toed into the fast-developing country's stock market? India funds run by Fidelity F&C, Aberdeen and JP Morgan Fleming have, over the past three years, produced annualised returns of around 35&#37;-50%, defying the sceptics who have long predicted a meltdown on the Mumbai market. 

Despite a series of interest rate hikes to head off rising inflation, economic growth in India has remained robust. In the current financial year, the economy is expected to expand by a frenetic 9.4%, the second highest in the world after China. 

Earlier this year, Goldman Sachs raised its forecast for India's sustainable rate of economic growth from 5.7% to 8% a year - and said it is likely to continue at this pace to 2020. 

By 2050 it says the US economy will have fallen to third place in the world pecking order - eclipsed first by China and then by India. 

A country once known as a byword for poverty, malnutrition and stagnation has a new set of icons; Bangalore's software industry, Hyderabad's "Cyberabad", Mumbai's skyscrapers and Bollywood's stars. 

In 2000 there were just 3m mobile phones in India. Today the country is adding 6m new subscribers every month - a rate of growth that beats even China. 

But behind the gleaming shopping malls and the surging middle-class, there remains colossal deprivation. Around 300 million Indians survive on less than 50p a day and nearly three million children die every year from malnutrition. 

Even the better-off can't insulate themselves from the country's growing pains; during 45&#176;c heatwaves, the Indian capital Delhi can be hit by power cuts lasting up to 12 hours a day. 

For fund manager Sam Mahtani, of F&C's Indian Investment Company, solving these problems is where his fund - minimum investment &#163;2,500 - is going to make money in the future. 

"There has been a marked change in government policy towards infrastructure spending. It says it is going to spend $300bn over the next five years, which compares with just $5bn-$6bn a year in the past few years." His favourite stock is Bharat Heavy Electricals (BHEL), an engineering giant which has just won a 29bn rupee (&#163;350m) contract to build three new power plants to supply the Delhi grid. 

"Under the Rajiv Ghandi programme, the government is planning to connect all India's rural areas to the grid, and BHEL will be one of the key beneficiaries," he adds. Since March, the stock has soared from 970 rupees a share to 1,730 rupees this week. 

Environmentalists may baulk, though, at the company's predominantly coal-fired power stations. 

Mr Mahtani also likes Grasim, a cement maker which will help cover the country in concrete over the next few decades. Since March its shares have leapt from 1,927 rupees to 3,008. 

No investor in India can ignore Reliance Industries, the conglomerate that is worth 15% of the entire Mumbai market. Mr Mahtani has 18% of his fund in Reliance, and is enthusiastic about its supermarket strategy in which it intends to become the Wal-Mart of India. 

What he's less keen on is the banking sector; he thinks operators such as ICICI Bank will be hurt as the credit splurge of recent years unwinds and households adjust to the recent rise in mortgage rates from 7% to 12%. 

Aberdeen Asset Management runs an Indian fund with the same sort of performance figures as F&C - but what's striking is how the manager of the Aberdeen fund, Adrian Lim, has views almost the polar opposite of Mr Mahtani's. 

Mr Lim has nothing in Reliance, while his biggest holding is ICICI Bank. He also remains a fan of India's software stocks, when many other investors have taken profits and sold out. 

"Reliance is not cheap, and although they've done well in petrochemicals, on the back of the commodity boom, they are now going into areas such as retailing and the Special Economic Zones where they don't have much experience." 

He reckons that over five years, interest rates will peg back and help ICICI grow its earnings at 20%-30% a year. This week it was trading at 900 rupees against its 1,010 high in May, but Mr Lim reckons it's a good long-term play. 

Among India's software stocks, he picks Satyam, which outsources for US and European companies. But forget call centres - they're yesterday's business, even in India. Its chief source of revenue is writing software code, which enjoys much higher margins. 

One worry is that Indian stocks trade on high price/earnings multiples, typically 17 times profits. But Fidelity India Focus manager, Arun Mehra, says: "The market reflects the underlying trend of earnings. From a valuation perspective, the market is trading at a high p/e ratio, but this is supported by double-digit growth, which is expected to continue."


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## Bushroda

*The rebirth of a nation*
*Maria Misra's Vishnu's Crowded Temple is a timely history after 60 years of Indian independence*
Sunday August 12, 2007
The Observer, UK

*Vishnu's Crowded Temple*
by Maria Misra 
Allen Lane £25, pp536 

Stereotypes about India not so much abound as keep multiplying. In popular imagination, India has gone, over time, from being the land of exoticism and mysticism to the back office of the world to - most recently - the rising economic superpower whose dizzying rate of growth is second only to China's and which will, along with China, redraw the geopolitical map of the world by the middle of the 21st century. 

These are all misleadingly reductive summations of a country that, days away from the 60th anniversary of its independence from British rule, is simply too various and too complex to lend itself to such shorthands. It is, as Ramachandra Guha persuasively argues in his recent book India After Gandhi: The History of the World's Largest Democracy (Macmillan, 2007), no small triumph that India, as well as its democracy, not merely exists at all but continues to thrive. 'India will go on,' Guha quotes novelist RK Narayan telling VS Naipaul in the Sixties, and exactly how it does and how it possibly will have become the subjects of a clutch of recent books, including Maria Misra's Vishnu's Crowded Temple. 

Misra, who teaches modern history at Oxford, has undertaken an ambitious project. She attempts to telescope more than 150 years of India's history into this book and tries to show, as she tells us in its closing pages, 'how India has developed its peculiar form of modernity, the most striking feature of which is its highly atomised, fragmented and diverse citizenry'. 

It seems clear that one of the things that underscores the idea of India as a nation is its tradition of pluralism and diversity. Misra is not the first to make a case for this. In his illuminating collection of essays, The Argumentative Indian: Writings on Indian History, Culture and Identity (Allen Lane, 2005), India's Nobel Prize-winning economist Amartya Sen has eloquently described how the country's long tradition of argument, public debate and intellectual pluralism is central to the notion of India and Indianness. 

This may not seem immediately obvious if one were to look at the long history of sectarian violence that has convulsed India. First, there was the bloodbath that accompanied the birth pangs of India or, more precisely, the birth pangs of the two nation states of India and Pakistan. At least 180,000 people died in what Lord Mountbatten, the last viceroy of India, called one of the 'greatest administrative operations in history'; train tracks were covered with corpses and whole trainloads of people butchered. Misra is good with the details of this chilling, pervasive violence and brings alive the scale of the carnage in those months. 

More recently, there have been anti-Sikh riots in Delhi after the assassination of Indira Gandhi in 1984; the communal riots in Mumbai in 1992 and 1993, which then triggered the serial bombings that killed 257 people in India's financial and entertainment nerve centre; Kashmir continues to be an unresolved battlefield; and right-wing Hindu nationalists presided over a pogrom in Gujarat in 2002. 

India's colonial history (the British had often encouraged sectarian conflicts, playing one community off against the other) and postcolonial experience both show how the country's democracy has repeatedly come under assault, how its secular fabric has been threatened time and again to be ripped apart. In spite of that, Misra reveals how India has drawn most sustenance from its diversity and plurality. 

At the heart of her book are the sections on the two men seen as central to the story of modern India: Mahatma Gandhi, the most prominent leader of the nationalist movement and known as the father of the nation, and his protege, Jawaharlal Nehru, who went on to become India's first Prime Minister. Misra is unfairly harsh on Gandhi, seeing him as idiosyncratic, traditionalist and with a gift for combining political shrewdness with a sense of self-promotion and opportunism. 

She has unmixed admiration for Nehru, who she sees as the opposite of Gandhi in many ways: 'He differed from Gandhi in the most important question of the age: modernity. While Gandhi romanticised the Indian past, both real and imagined, Nehru was in love with the future. Gandhi decried the Raj as the harbinger of modernity, while for Nehru it was the detested heart of the ancien regime. Nehru was a technophile, a religious agnostic, cosmopolitan in his tastes and an instinctive internationalist; the Mahatma was the opposite.' 

The template of pluralism that is the key to India's enduring democracy, Misra argues, was conceptualised and laid out by Nehru. And she sees that - and the foresight and vision that implies - as his biggest contribution. 'Nehru's goal was to make a virtue of India's variety by creating the world's first self-consciously multicultural modern nation state.' 

Misra is weak on two aspects of India's cultural life that have glued together for decades people from utterly different social classes and with different cultures, mother tongues and cuisines: mainstream Hindi cinema, or Bollywood, and cricket. Bollywood is the world's largest film industry and its popularity and reach are unrivalled by anything else in India bar cricket. Cricket is the only team game at which India is any good and it infuses as much of a sense of national identity and pride in the urban middle-class professional as the farmer living beneath the poverty line. 

These are the two things that the tiny metropolitan elite - the biggest beneficiary of India's economic boom - and the 70 per cent of the population that lives in grinding poverty in the country's rural hinterland have in common - they comprise their only shared language. The movies and cricket are strong, critical threads that make India the patchwork quilt that it is.


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## Bushroda

*India at 60: a remarkable success story*
Monsters and Critics.com, UK 
Aug 12, 2007, 2:45 GMT 

A sepia-coloured newspaper picture underlines, in retrospect, a central feature of India's success as a nation. It shows groups of men sitting in front of rickety wooden tables, counting tiny slips of paper obviously taken out of a steel box. The occasion was India's first general election in 1952 and the slips were the ballot papers cast for 18,000 candidates by an electorate of 176 million people. The mammoth exercise marked the first step in India's remarkable journey to become the world's largest and, in its pluralistic ethos, the most successful democracy.

Sixty years after India attained independence on Aug 15, 1947, it has all become routine - elections which resemble a carnival, boisterous parliamentary politics, an independent judiciary before which no one is too high, a thriving economy knitting together a nationwide market, an uninhibited public sphere where activists agitate for various causes, a vibrant media with its 24-hour news channels and sting operations with hidden cameras probing all aspects of life.

The world now expects India to be a major power of the 21st century. But no one knew at the time of independence in 1947 how it would all pan out. Would Winston Churchill's fear, reflecting an imperialist mindset, that the British were handing over power to 'men of straw' prove true? Would the dire prognosis by Neville Maxwell in the The Times of London that the 1967 general election would be India's fourth and last be fulfilled?

While the communists in India and elsewhere were expecting a proletarian revolution to start any time, sceptics in the West didn't believe that fledgling Asian democracies had a future. And they were right, at least in relation to countries in India's neighbourhood.

If it is different in India, the reason is the commonplace scene in that old black-and-white photograph of men from ordinary backgrounds counting ballot papers. It is the successful functioning of autonomous institutions such as the Election Commission, which ensured, first, the survival and then the blossoming of Indian democracy. While autocratic regimes elsewhere routinely subverted such institutions, favouring rigged polls and turning the legal system into one of kangaroo courts, the Indian political class had the wisdom to ensure that the scaffolding of the democratic structure was not disturbed.

Perhaps the most important consideration before the founding fathers of the republic - who drafted the constitution - and their contemporaries and successors who ran the government was to ensure that the country's multi-religious, multi-cultural and multi-lingual heritage was carefully preserved. Evidently, the long years of freedom struggle had instilled the value of this pluralist heritage in the men and women who were involved in the anti-colonial battle under Mahatma Gandhi.

The currency note in India describes its value in as many as 17 languages. Although English and Hindi are the first two, the presence of 15 other languages is an acknowledgment of the country's multi-lingual status.

India had leaders like Jawaharlal Nehru, a disciple of the Mahatma who announced in the wake of anti-Hindi agitations in the south that English would continue to be an official language as long as the non-Hindi speaking people wanted it.

It is the same broadminded attitude, which ruled out theocratic concepts like having an official religion. Drawing inspiration from the Mahatma's precept of having passages from all religious texts - the Bhagavad Gita, the Quran, the Bible, the Guru Granth Sahib and others - read out at his prayer meetings, India, although a predominantly Hindu country, embarked on the path of consolidating its multi-religious heritage, which can be traced to Mauryan emperor Asoka in the pre-Christian era and to Mughal emperor Akbar in the 16th century AD.

There is little doubt that the good fortune of having leaders of the stature of Mahatma Gandhi and Nehru ensured that India could avoid the perilous path of sectarianism, which has been the bane of other countries. But there was more good luck, for not only did India reject a narrow outlook on religion and language, it also ensured that its nascent democracy was not challenged by any adventurer - military or civilian.

Before 1947, the Indian independence movement was an inspiration for all the people living under colonial rule in Asia and Africa. Unfortunately, the history of most of the countries in these continents after their liberation has been one of betrayal of the ideals of freedom that initially guided their leaders. Only India has been an exception along with South Africa, although the latter's is a different case in that it was not under colonial rule but was under a white supremacist regime.

Six decades after independence, India is still an inspiration because of its success as a multi-cultural democracy, which made well-known musician Yehudi Menuhin compare India with the 'fabled and symbolic Garden of Eden'.


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## Bushroda

*Jawaharlal Nehru and the modernisation of India*
By David A Granger
Sunday, August 12th 2007
Stabroek News, Guyana

India became an independent state sixty years ago on August 15, 1947. The first seventeen years of India's statehood were dominated by the policy and personality of its Prime Minister, Jawaharlal Nehru (1889-1964). 

For the first few months after independence, Nehru still stood in the shadow of Mohandas K Gandhi (1869-1948) - the Mahatma - regarded as the father of India's independence. When Gandhi was killed on January 30, 1948, there was no longer a father-figure to whom Nehru could turn for advice and guidance. For the next two years, Nehru shared the spotlight of power with Vallabhbhai Patel (1875-1950), his deputy Prime Minister. Familiarly known as Sardar, Patel has also been justifiably called the father of Indian unification. But the Sardar, already seventy-two years old at the time of independence, died in December 1950. 

*Transition period 1947-1950* 

For the next fourteen years, Nehru was the single most important figure in India, both in the government and the Indian Congress Party. There was no major rival to his power up to his death on May 27, 1964 at the age of seventy-five years. For the greater part of the immediate post-independence period, therefore, it was Nehru who bore the burden of initiating and implementing measures for the modernisation of India. It is he who, consequently, must take the credit, or bear the blame, for its successes or failures. 

*Post-war situation* 

At the close of the colonial era, India was not yet a modern, developed country; this did not mean, however, that it was entirely backward or primitive. India had a long history of manufacture and commerce and the bulk of the people were peasants engaged in agriculture. During World Wars I and II, the British had permitted Indian industrialists to increase production and allowed the growth of indigenous capital. In fact, by that time, India was already among the ten biggest countries of the world in terms of population, industrial production, extent of railways, mineral resources and skilled engineers. 

The post-war situation in India, however, was one of social distress and economic depression and not a little bit of political disorder. There were shortages of raw materials and spare parts; inefficient use of industrial plant; chronic unemployment and under-employment, especially in the villages; a reluctance on the part of private entrepreneurs to invest; a decline in production and the decay of crafts; spiralling inflation; the spread of black marketing, profiteering and corruption; a shortage of skilled personnel; the uncontrolled increase of population; strikes and political protest and unrest. 

*Partition *

Bad became worse when partition rent the sub-continent asunder, splitting agrarian and industrial resources and the civil and security services, and spawning communal and sectarian strife. Nearly ten million, mainly Hindu, refugees poured into northern India from the west and east wings of the new Islamic state of Pakistan. 

The division of the civil service, army and police between the two states weakened the government's capacity to quell communal violence which erupted and spread, and hobbled its ability to provide food for millions of destitute refugees. The threat to peace was aggravated by incipient conflict with Pakistan over the accession of Jammu and Kashmir and the centrifugal forces of separatism inherent in the Indian polity, which at that time was divided into more than 550 states ruled by semi-autonomous princes. 

At the time of its independence, therefore, India faced pressing problems with which Prime Minister Nehru, Deputy Prime Minister Patel, and the unappointed 'guide' Gandhi, had to deal with right away. The first steps in statehood were therefore to safeguard the security, unity and stability of India itself. 

*Pacification *

The suppression of violence and the settlement of refugees was top priority. Communal disorder precipitated by partition involved hundreds of thousands of victims - murdered, injured or raped - and millions dispossessed and dislocated, in addition to widespread damage and destruction of property. Nehru's refusal to use the British troops provided by Lord Mountbatten (the last Viceroy and first Governor-General) as a boundary force, did not help matters. 

It was only the last fast by Gandhi, followed by his assassination in 1948, which restored some semblance of calm. The shock of this tragedy gave the new administration the leverage of popular indignation to repress the reactionary forces of Hindu communalism which had taken control of Delhi and some other large cities. The Rashtriya Swayamsevak Sangh (National Self Service Society) - a militant arm of the Hindu Maha Sabha - was outlawed and, paradoxically, as peace was restored, it seemed that the martyrdom of Gandhi had to some degree, served to facilitate Hindu-Moslem reconciliation. 

*Consolidation *

The second step was that of the consolidation of the union. At the end of the colonial era, India was not a unified polity. The sub-continent comprised several provinces which were part of British India under central government rule and nearly 550 principalities under the supposedly semi-autonomous rule of traditional princes. Largely under the direction of Patel, and with the able assistance of VP Mennon, the campaign for the unification of India was successfully completed. 

The campaign could be divided into three stages - accession, democratisation and integration. First, by a combination of Patel's coercion and persuasion on the one hand, and the princes' weakness and timidity on the other hand, all but three rulers agreed to accede to the Indian Union. They surrendered their rights and powers, such as they were, in return for the privilege of keeping their palaces, privy-purses, prestige and personal status as princes. 

Surgical military action had to be applied to incorporate the remaining three states - Junagadh (November 7, 1947), Hyderabad (September 13, 1948) and, most difficult of all, Jammu and Kashmir (October 26, 1947). In the case of Jammu and Kashmir where the population was largely Muslim and the ruler was Hindu, Pakistani-supported 'volunteers' launched an attack on October 22, 1947, probably with the purpose of seizing that territory from India. As a result, a virtual Indo-Pakistan war broke out between the two new states and lasted until a ceasefire was arranged from January 1,1949. This dispute has never been settled. 

Nevertheless, with this one exception, India had been able to achieve a sufficient degree of internal stability, and territorial solidarity for orderly national development to take place within its early years. Nehru's role in this exercise was, comparatively speaking, a negligible one; it was to a greater degree, Patel's achievement, more than anyone else's. 

*Constitution *

The third important step was the promulgation of a new constitution and the creation of a sovereign democratic republic on January 26, 1950. The drafters of the constitution apparently sought their inspiration and ideas for a democratic and federal state, more from among the Anglo-Saxon states of the western world such as Australia, Britain., Canada and the United States of America, than from traditional Indian sources. 

The constitution provided for a federal and parliamentary system; universal adult suffrage; a bicameral legislature made up of the Lok Sabha (Council of the People) and the Rajya Sabha (Council of the States); a head of state who was the President of the Republic elected jointly by the central and state legislatures; an executive headed by the Prime Minister and responsible to the Lok Sabha; state governments headed by Chief Ministers; and a central government which controlled the functions of defence, foreign affairs, railways, posts and currency, among other things. 

Certain other significant features of the constitution included the legal abolition of untouchability and the de-recognition of caste distinctions. Although they safeguarded the civil rights of a significant section of India's population, they were decidedly muted and were not rigorously enforced during the early years of the republic. 

After these three steps - the pacification of the disturbances, the consolidation of the state, and the promulgation of the constitution - India could be said to have possessed all the pre-conditions for taking its place as a full member of the international community of nations. Nehru now had the opportunity to continue his programme of modernisation into the second half of the 20th century, a period of construction and change. 

*Construction period 1951-1960* 

Nehru's general objective seemed to be to bring the country materially on to a level with the western world by radically raising the standard of living and by guaranteeing the personal and civil rights of the people. His policies in the fields of economic development, social reform, political affairs and foreign relations all testify to his intention to modernise India quickly, perhaps too quickly. 

First of all, Nehru turned his attention to the state of the economy. At the middle of the last century, the outstanding features of the Indian economy were a low standard of living, a high rate of population growth, a stagnant agricultural sector, insufficient heavy industries and a scarcity of capital. Nehru's strategy was to defeat underdevelopment by industrialisation. By this means, he expected both to provide more goods and to create more jobs. 

*Central planning *

A National Planning Commission was established in 1950 and this was followed by a National Development Council under his personal charge. Nehru's aim was to develop a mixed economy made up of a public and a private sector. In the main, the public sector engaged in the steel, petroleum, electrical, machine, aircraft and shipbuilding industries. The private sector engaged in the textile, cement and engineering industries, in addition to traditional small-scale manufacturing. 

There followed a series of five-year plans which were meant to harness the energies of the whole state and people towards achieving the targets of the plans and objectives of the policies. These plans, however, were at variance with the realities of the Indian economy itself in that they did not immediately establish a link with the existing financial, agrarian and rural structures and systems. To some degree, therefore, Nehru's industrial modernisation programme, impressive though these massive projects must have appeared in the rural landscape, were partially an irrelevant activity to the bulk of the peasants at that time. 

The bulk of the population was still immobilised in the countryside. More than 70 per cent of India's working population in the Nehru era still earned their livelihood from agriculture and seven out of eight villages were still wholly or partially dependent on agriculture. But there were few modern tractors or harvesters; planting and reaping were still done extensively by hand; in the dry season in many areas, water still had to be fetched by human or animal power onto the fields. The inescapable result was that at the end of the plans, India still could not feed itself and had to import grain. 

*Domestic policy *

Nehru's policies for the social modernisation of India were rooted in good intentions. The most noteworthy effort was in the field of education. During this period, there was a proliferation of universities, technical institutes and research centres concerned with every branch of science, from agricultural food grains to atomic energy. The aim might have been to provide the technically-trained manpower for the new industries; it did this and more, even supplying a surplus of graduates who could not readily find employment. On the other hand, elementary education, especially in the countryside, continued to lag. At the time of independence, the literacy rate of the country was estimated at about 15 per cent, but by the end of the Nehru era, nearly seventeen years later, it had not gone beyond 25 to 30 per cent. 

The most critical aspect of rural life, however, that of agrarian reform, was not an unmitigated success. Nehru's earlier promises to provide 'land to the tiller,' to revoke debts, and to replace money-lenders by formal state credit institutions did not materialise. It is true that rents were regulated and certain extra-economic powers exercised by unscrupulous landlords, such as the arbitrary eviction of tenants, were drastically curtailed and the parasitical zamindari (tax-farming) system was abolished in 1956. Despite these changes, the basic structure of land ownership was not placed in the hands of the peasantry. The rural rich who dominated the Congress Party apparatus, especially at the regional level, resisted reform. They were able to keep the peasantry in place amidst primitive techniques and practices, fixed at the bottom of the economic ladder and bound to the land. 

Nehru's policy for political modernisation faced two challenges. The first came from the ethno-religious communalism and the second from the forces of factionalism inside the party. Before independence, the Congress Party had pandered to particularistic pride and ethnic interests in order to win support against the British. Once in power, however, Nehru became lukewarm, if not hostile, to the demands of the polyglot groups of India's pluralistic society. As time went by, demands grew more insistent, especially as regional politicians exploited those grievances to build their own power bases and protect their interests against intrusion by the central government. After Andhra was created in 1953, it was impossible to quell the clamour from other groups making similar requests for special and separate treatment. 

Nehru's policy fell to pieces and a States Reorganization Commission had to be established to study the whole question and to forestall secession by allowing some degree of cultural autonomy among India's diverse peoples. Side by side with the call for separate states came a profusion of ideological, regional, political parties. In the course of time, disaffected and disillusioned members and factions from the Congress Party, separated and set up new parties to represent their own special interests, and to oppose Nehru as a person, or Congress policy as a whole. 

*Foreign policy *

India's foreign policy held Nehru's personal interest throughout his tenure of office. Nehru probably had a deep appreciation of the geopolitical and strategic importance of India with its large land-mass located at the head of the Indian Ocean. India's awareness of its own economic and strategic vulnerability was, perhaps, a powerful inducement to avoid hostile entanglements with super powers, to keep the doors open to foreign aid, to preserve peace on its borders and to suppress conflicts in the region. In the bitter global politics that characterised the Cold War which followed World War II, Nehru realised that Asia was becoming, once again, an arena of conflict. 

Nehru opposed the attempts by France and the Netherlands to repossess their Asian empires in Indochina and Indonesia, respectively. The establishing of the South East Asia Treaty Organization (1954) and the Central Treaty Organization also shut India out of the network of western alliances being woven in the region. The rapid rise of the communist People's Republic of China, indicated that India's claim to leadership in the Asian community would not go unchallenged. Fourthly, the outbreak of the Korean War (1950-1953), which was fought by the Asian surrogates of the two super-powers - the USSR and the USA - threatened to envelop East Asia in a wider war; and, finally, the development of the hydrogen bomb, exploded first at the Bikini atoll in 1956, raised the awesome spectre of the destructive power of modern thermo-nuclear warfare. 

These factors all influenced Nehru's world view. He conceived the Indian Ocean as a 'zone of peace,' free from super-power rivalry and free from the ravages of war. In this idealistic scenario, he saw India as a key, if not a leading, player in a group of states which would form a third force in world politics, joining neither the eastern nor western blocs but holding the balance of power between both. Nehru went further by trying to apply his policies to countries on India's borders, or at close reach in Asia. Nehru sought to influence the internal affairs of Burma, Ceylon and Nepal earning the dubious credit, in the last, of having encouraged the overthrow of the Rama regime (1951) and engineered the rise of the Nepali Congress Party. Hence, a wide gap started to develop between his noble principles and his actual practices and, as a result, some of his actions backfired. 

He successfully negotiated with France the surrender of the French enclaves at Pondicherry, MahÃ©, Chandernagore and Karikal on the sub-continent. When a similar diplomatic dÃ©marche failed to get Portugal to relinguish its enclaves at Goa, Daman and Diu, Nehru had no compunction about resorting to military force. In contravention of the inconvenient but undeniable precepts of international law, the Indian army forcibly evicted the Portuguese in 1961. The following year, perhaps in pursuit of inaccurate advice or of misguided objectives, Nehru allowed himself to be persuaded to order an advance of the Indian army on the 'McMahon Line' which was used as the colonial boundary demarcation with the People's Republic of China. The Chinese responded with force. There followed a brief Sino-Indian war which started with a massive Chinese attack on October 20, and ended abruptly a month later on November 21, 1962. During this short time, China's People's Liberation Army advanced at will, occupied over 36,260 km2 of India's territory, decisively defeated the Indian army and had withdrawn again. Nehru was humiliated by these strategic reverses. 

Nehru embarked on an active policy to advance India's role as a leader among the emergent states of Africa and Asia. At a conference in Bandung (Indonesia) in 1955, he was able to win acceptance of his doctrine of the panch shila. The concept of non-alignment was also advanced by Nehru at that conference and, thereafter, it was spread to other emergent states. Nehru's notion was that a third force, made up of politically weaker, but numerically stronger developing countries, standing somewhere between the two super-powers and their satellites but allied with neither should be non-aligned, maintaining relations with both the eastern and western blocs, but avoiding the entanglement of military alliances which would lead to international conflict. 

By 1956, however, Nehru's foreign policies were already under attack. His caustic criticism of Anglo-French aggression in Egypt (1956) in the Suez Crisis was compared unfavourably to his rather mild scolding of Soviet aggression in Hungary in the same year. This was regarded as bias by many western powers. China's rise as an Asian rival also had eclipsed India's position in the regional spotlight. India's humiliating defeat by China exposed its military weakness and undermined its claim to big power status. 

In foreign affairs, Nehru did have outstanding successes which helped to give India the responsibility and the respect of a modern state. It may be argued, however, that Nehru's moral positions and noble principles had little practical effect on world peace. But, by adhering to them, India was able to define its position in the world community and develop itself politically as a modern state. 

*Climacteric period 1961-1964 *

After ten years in office as Prime Minister, cracks had started to appear in the modern state which Nehru had been trying to construct. Serious criticisms were made of his handling of both domestic and foreign affairs; his programme for India's industrialisation and modernisation and his reputation declined. 

*Internal affairs *

In the domestic sphere during this period, political opposition built up on all sides. The socialistic pattern of development drove conservative and capitalist elements into the conservative Jan Sangh and Swatantra parties. On the other hand, Nehru's policies were considered too mild to alleviate the poverty of the masses and did not go far enough to satisfy the socialists and communists represented by the Kisan Mazdon Praja (Peasants, Workers and People's Party) and the Communist Party of India. 

At state level, Congress Party administrations were riddled with revelations of corruption, factionalism and defection (crossing-the-floor in the legislature). These resulted in the steadily declining support for Congress and were reflected in the reduced number of electoral votes from 47.78 per cent (1957) to 44.72 per cent (1962). The enormous growth in governmental power as a result of the enlargement of the public sector and of the passage of laws designed to curb excesses, permitted the government to regulate private industries. But they had the effect of placing enormous discretionary authority in the hands of poor public servants who, more often than not, were unable to resist the bribes and inducements offered by businessmen seeking favours and advantages. As a result, graft and corruption soared to astronomical levels. 

India's economy appeared to grow, at least in statistical terms. Gross national income, however, increased at a decreasing rate, and per capita income stood still. Large amounts of grain had to be imported, spare parts for machinery were difficult to acquire and there was a significant fall in foreign exchange reserves due to the starvation of capital from foreign countries and institutions. 

Several other factors helped to destabilise the economy and to hobble Nehru's drive towards modernisation. These included most of all unchecked population growth; the Sino-Indian frontier war; the escalation of military expenditure; the suspension of some foreign financial assistance; and the effect of famines caused by droughts, bad harvests and natural disasters. 

Nehru was seen as being personally responsible for most of these failures. He was considered an inept administrator who did not effectively delegate authority to his subordinates. He attempted to make all important administrative decisions himself and, as a result, when he was out of the country as he frequently was, little of importance was achieved by his ministerial colleagues. Even when he was present, he insisted on dealing with important matters personally, and the bureaucracy could move only as fast as Nehru was able to make decisions. 

*External affairs* 

Nehru's foreign policy, which aimed at catapulting India onto the world stage, also fell short of the mark. He wanted to make India the moral leader of the new Asian and African states but he was criticised for this increasingly, both inside and outside of India. Rapid changes were taking place year by year in world affairs and Nehru's policies which seemed to be progressive and forward-looking in the 1950s, started to appear effete and irrelevant by the 1960s. 

Nehru's death on May 27, 1964 at the age of 75 years seemed to coincide with the decline of his influence, the collapse of his plans for India's rapid modernisation and the eclipse of his idealised conception of foreign relations. 

In the final analysis, Jawaharlal Nehru's attempts at India's modernisation left an impression of only partial accomplishment. They set in motion, nevertheless, diverse domestic and foreign forces which contributed to India's long-term economic, social, political and strategic transformation.


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## Bushroda

*When Holly met Bolly*
*Hollywood takes the Indian musical to heart with a new film*

Anil Sinanan 
The Times
August 9, 2007

The American actress Ali Larter laughs, when I ask her if she is about to become the next Aishwarya Rai. My greatest challenge was to dance Bollywood style, as I have two left feet, she says. 

The film is Marigold, a cross-cultural romcom, in which the star of the hit US series Heroes teams up with the Bollywood superstar and heart-throb Salman Khan. It is the first significant Hollywood film to appropriate Bollywoods unique style of film-making, with plenty of knowing references for Bollywood buffs and with enough savvy to engage newcomers. 

Larter plays Marigold, a struggling American actress who arrives in Goa to start shooting on her latest film, Kama Sutra 3 . When funding for the film fails to materialise, the penniless foreigner is forced to become a dancer in a Bollywood musical to survive in India. Marigold falls in love with the films hunky choreographer Prem (Khan); but he has an intended arranged marriage with his childhood sweetheart. Complications ensue, but no prizes for guessing the outcome. The plot may be pure Richard Curtis, but Marigold is unique and even radical on several counts. 

It is an astute recognition by Hollywood of American audiences interest in Bollywood films. In 2006, five Bollywood films grossed more than $2 million in the US. But, as in Britain, Bollywood audiences in America are predominantly South Asian. Mainstream American audiences are hesitant to view subtitled films and the culture-specific subjects of many Bollywood films appear too alien. 

I hope this movie acts as a window into the Bollywood world, the American director Willard Carroll says. It certainly attempts to bridge the cultural cinematic gap. It is filmed in English, it is not three hours long, and the title is pronounceable. Basically, it is a romcom that unfolds in touristy India: major sequences take place in lush Goa, in majestic Rajasthani palaces and on the enchanting Elephanta Island, just off Bombay. 

It is not really a Bollywood movie; it is more of a romantic comedy that is set in India, Carroll explains. But the film acknowledges the traditions and the camp excesses of the Bollywood formula. Characters unashamedly break out into song and dance; respect for family elders is accentuated and everyone lives happily ever after. 

Other Hollywood films have featured Bollywood but only as songs on their soundtrack, most notably Baz Luhrmanns musical Moulin Rouge! (2001) and Spike Lees Inside Man (2006). However, they did not attempt homage to Bollywood itself. 

Marigold , though, is set entirely in and showcases modern India. India is not a land of snake charmers any more. Our economy and films are booming. It is hoped every NRI (non-resident Indian) will take their British or American friends to see this movie, Khan says. 

The casting is unique: Larter is hot property in Hollywood; Khan has been a Bollywood A-lister for more than a decade. Their pairing is likely to draw in a wide range of fans. Salmans natural charisma comes across beautifully on screen, Larter says. This film is a beautiful kiss to Bollywood that will appeal to all audiences. 

Cynics may argue that the film is cashing in on the trend for all things Bollywood. Why did Carroll decide to make an American Bolly-rom-com? I fell in love with India and with Bollywood when I visited India four years ago and wanted to make a film in this style, Carroll states. Hindi films have made some inroads into America but most Americans have not seen a Bollywood movie. The film gives a positive view of modern India; its theme of family is universal. It is hoped that all American audiences will warm to this as many of them feel family kinship is currently lacking. 

Whether or not Marigold succeeds in its aims remains to be seen, but it looks as if Hollywood has woken up to the box-office potential of cross-cultural comedy, especially in light of movies such as My Big Fat Greek Wedding (2002). Bollywood has now been embraced by Hollywood, but on its own terms.


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## Bushroda

*India's poor graduate as IT pros*
Contractor UK, UK

Take 89 students from Indias lowest caste and give them seven months training in IT-businesses, and 80 will get jobs at Infosys, WiPro, IBM and Hewlett Packard.

IT academic Prof S. Sadagopan has proved that being social excluded in the worlds leading offshore location for IT services is not a barrier to joining the business elite.

Last October, he opened the doors of his technical college in Bangalore to 89 disadvantaged youngsters, and offered them skills in leadership, communication and team-building.

As part of the 26-week course to work at a leading IT company, students got their own laptops to access the internet, and were even taught table manners to smooth interaction.

Graduates of the course, at the Indian Institute of Information Technology, now work in IT jobs that pay them 33 times more than what their parents earn, The Times reported yesterday.

We taught them fishing, instead of giving them fish, Prof Sadagopan told the paper. 

He added that the course was aimed at boosting their confidence and giving the youngsters, most of whom would normally work in menial jobs, something they couldnt get otherwise. 

Conceived by Infosys, the initial success of the IT-business programme has been seized upon as evidence that the new economy in India can break down the nations social barriers.

One student, Ramesh, who already had a computer science degree but couldnt find an IT job, now works at Bally Technologies, a Las Vegas-based gaming company in Bangalore. 

He is reported to earn 20,000 rupees a month, while his father, who owns no land and works for local farmers on tea estates, earns a monthly wage of 600 rupees  about £7. 

This course should be expanded but it should only help poor people, Ramesh reportedly said. Otherwise the well-off will always be going up and the poor will be always going down.


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## Bushroda

*Indian Economy Enters Sustained Boom Periods as Investors Rally *
Net4now, UK
Tuesday 14 August 2007, 05:22:48 

When it comes to giant markets that are expanding with almost reckless abandon, India has lately entered the same league as eastern neighbor China. With growth at almost 10% in 2006, India continues to surge forward with little sign of a slowdown, as expansion has averaged almost 9% the last half decade. The world has rarely seen such growth, with so much more potential to expand from such a large economy, as investors are still trying to understand China's colossal feats of economics.

Unsurprisingly, the currency markets have also following suit as the rupee gained 7% so far in 2007, establishing a decade-long high against the American dollar. Such staggering, large-scale growth has drawn hordes of businessmen who placed an impressive $15 billion in foreign direct investments (FDI) and yet another $12 billion sent into portfolio investments during early 2007, swelling India's foreign exchange reserve to around $200 billion. Now it appears India is well on the way to following their exploits.

Expansion in India is being helped by remarkable industrial production, which gained 14% in 2007, versus 10% over the previous year. This impressive sustained industrial growth has been bolstered by manufacturing, which is helping create the second best expansion rate in ten years. Many industries are also adding their part; such as biotech and technology, and it are well-known the English speaking Indians do well in the outsourcing of customer service, and the like.


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## Bushroda

*India's rise in medical tourism*
*India is cashing in on its reputation for quality care with surgery available for rock-bottom prices*

Simon Crompton 
From The Times
August 14, 2007

There was a time when doing a search for India and surgery on the internet simply came up with reports about knee operations on cricketers from the sub-continent. No longer. Now dozens of agencies and hospitals offering top-quality surgery at rock-bottom prices top the listings. 

In just five years health tourism to India has exploded, with hospitals currently estimated to treat 150,000 foreigners a year. A Confederation of Indian Industry report predicts that medical tourism will be worth $1 billion to the economy by 2012. 

Agencies that specialise in putting prospective patients in touch with Indian hospitals claim that the industry is growing at the rate of 30 per cent a year. That projection may not be as optimistic as it sounds, given that the Government is unashamedly encouraging foreigners to come to India for treatment ranging from heart surgery to breast enlargements, dental checkups and Ayurvedic medicine. 

Official figures indicate that visitors from 55 countries come to India for treatment but the biggest growth in business is from the UK and America. 

Four years ago the first trickle of British patients, frustrated by long NHS waiting lists and the high cost of private surgery, began to organise operations abroad. James Campbell, from Aberdeenshire, flew to Ahmedabad in 2003 for a double knee replacement at less than half the cost of private treatment in the UK, after organising the trip and treatment himself. 

Now an agency such as the Taj Medical Group receives 200 inquiries a day from around the world and arranges packages for 20-40 Britons a month to have operations in India. Taj also offers follow-up appointments with a consultant in the UK. 

Generally people dont see any difference in the care they receive in India from private care in the UK, says Dipa Jethwa, of the Taj group. 

Why is India so popular? Cost is the driving factor. Patients wanting prompt private treatment usually pay 20-50 per cent of the UK cost for surgery. A single knee replacement in the UK costs about £9,000 but a Madras clinic quotes the operation at £2,150. The agency Surgery Abroad International offers breast enlargement operations in India for £1,000, compared with about £3,500. 

The quality of medical facilities and staff in India is increasingly rated internationally. About £50 million has been invested by private healthcare companies in India in the past decade. 

In addition, about 75 per cent of healthcare services in India are now in the private sector and new private hospitals with state of the art equipment have been built in many of the big cities. The Indian Tourist Board lists dozens of recommended hospitals for cardiology, orthopaedics, keyhole surgery, oncology, cosmetic surgery and holistic healthcare on its website (www.incredibleindia.org). There is also a good supply of well-qualified doctors and experienced surgeons. 

With more Indian hospitals admitting foreign patients, it is easier for tourists to arrange their own surgery there but packages offered by agencies make organisation simpler. 

The Department of Health advises anybody considering surgery abroad to consider every angle first. Think about the standard of the facility, the qualifications and experience of the doctor and what you can do if something goes wrong, a spokesman says. 

David Hancock, author of The Complete Medical Tourist (John Blake Publishing, £9.99) advises prospective patients to consider the cost of taking a companion and to check post-operative support offered by the hospital. 

Ask for testimonials of patients who have undergone procedures at the medical facility, he says. Contact the people personally to make sure there were no later complications.


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## Bushroda

*India has changed the world*
Dmitry Kosyrev
RIA Novosti, Russia 
20:19 | 14/ 08/ 2007 

MOSCOW. (RIA Novosti political commentator Dmitry Kosyrev) - On August 15, India will celebrate 60 years of independence. Today, we are looking at this event with different eyes. In retrospect, we can see that it has first changed Britain and then the rest of the world. This process is still going on. 

On August 15, 1947 when Lord Mountbatten was hauling down the British flag in Delhi, many understood the significance of what was happening with a country, which some still considered the only superpower, even if it wasn't quite up to the mark in World War II. It is unclear when exactly America became the world's number one power. Was it after the Hiroshima bombing or after the white-green-saffron flag was raised over Delhi's Red Fort? At any rate, hardly anyone realized at that time that the British Empire was not simply undergoing change but was quickly melting into a regular European country. 

In was clear in the early 1930s that the empire's rule over India was coming to an end. The year 1947 did not come as a complete surprise. But nobody expected India to help British society to start a change from within and largely cure it of the syndrome of complacent racist supremacy over many nations that are far more ancient and civilized than the Brits themselves. Credit for this goes to Mohandas Karamchand Gandhi, commonly known as Mahatma Gandhi, who was probably the greatest figure of the 20th century. 

Gandhi was admired; all intellectuals (among them many British colonial administrators) were seeking an opportunity to meet this pivotal figure. He proved that subjugated nations were not second-rate, that they might be above the Europeans morally and culturally, primarily because they could reach their goals without resorting to violence. His lessons have not been learnt up to now because the return of ancient civilizations to the world's key positions is not yet over. But the British were the first to realize that this course of event was inevitable, or at least possible. 

The fact that India's independence engineered a change in Soviet foreign policy, among other things, may be a peripheral issue but the world's arrangement largely depended on it for half a century. 

In 1947, Stalin and his entourage could not fully grasp what was going on. India was one of the first countries to restore its independence. Many followed suit in the 1950s-1960s. China still had two years to go before the triumph of the revolution, and the Soviet bloc was not yet set up in Europe. The Soviet Union established diplomatic relations with the new India four months before it became free. But Moscow, on which it was starting to dawn that "foreign" was not necessarily a synonym for "hostile", primarily perceived India's freedom as an irritant for Britain. The big nation's potential road to socialism came second. Gandhi viewed the Stalinist regime as yet another revolutionary but a very bizarre one and totally alien. 

Changes took place almost a decade later and were associated with Nikita Khrushchev and Dmitry Shepilov (his second foreign minister after Vyacheslav Molotov). Being related to the late Shepilov, your correspondent learnt many details of how Moscow's mentality was changing in the post-Stalinist era. Conflicting reports and memos by Soviet diplomats were the main instrument of a change. 

It was under Shepilov that the Soviet leaders adopted the idea that the newly independent countries were natural allies, even if they were not going to enter the Soviet block and build socialism. This concept first emerged in the other fragments of the British Empire - Egypt and Syria - where Shepilov was using trial-and-error approach in a bid to find the right tone in talking with the new partners. Later on, India, Indonesia and many other countries became Soviet friends by the same token. Shepilov recalled that India had proved to Moscow that the newly-independent countries could be very big and potentially extremely powerful, that they could absolutely reject a client's dependency while being overtly friendly. Last but not the least, India made it obvious that in the future they would be of major importance for Soviet vital interests. 

Under Andrei Gromyko, who replaced Shepilov as foreign minister, Moscow's relations with the "developing nations" became an ideologically streamlined system but their gist was the same as in the middle 1950s. Soviet policy towards them remained intact for almost 40 years and contributed to Moscow's geopolitical might no less than its strategic arsenal. This applies, in particular, to the economic gains yielded by what was commonly called "assistance" to foreign countries. This "assistance" made Soviet export-oriented industries competitive. 

Will the Russian political class be able to exploit the success of its predecessors now that almost every sixth person in the world is an Indian, and that India is bound to be the world's second economy after China? This question is being decided these days.


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## Bushroda

*The making of a miracle*
*In 1947 it was a provincial outpost. Today it's the most globalised city in India. Ian Jack reports from the boom town of Bangalore* 

Ian Jack
The Guardian, UK 
Tuesday August 14, 2007

One early morning in Bangalore - at about six, before the traffic thickened and made the timing of any cross-town journey the subject of doubting speculation - an enterprising young man called Arun Pai took me in his car to the edge of the Karnataka Golf Association course, where he asked his driver to stop. On one side, greens and bunkers. On the other, big new buildings coated in glass and occupied by IBM, Microsoft, Goldman Sachs. "I always take my foreign clients here," Pai said, "and ask them to tell me which famous author stood almost in the same position."

Many people have no difficulty. The answer is Thomas Friedman, the New York Times columnist and author of The World is Flat, and this is the setting of his book's first sentence, when Friedman is about to swing from the first tee and his partner tells him: "Aim at either Microsoft or IBM." As a first sentence it hardly ranks with "The past is a foreign country ...", but Friedman's book, the world's most popular gospel of globalisation, has sold 3m copies. It takes its several heroes from the IT business; one of them is Nandan Nilekani, co-chairman of the Indian software company Infosys, who gets the credit for inspiring the title by insisting to Friedman in 2004: "Tom, the playing field is being levelled." But you might say that its real hero is Bangalore, or Bangalore as Friedman sees it: the leading example of how a city populated by clever, ambitious, English-speaking technicians in what is still known as the developing world can use the tools of the new information age to abolish geography - to undercut European and American costs so much, with no (or better) effect on quality, that it destroys the historic advantages of adjacency, when the counting house was best placed next to the warehouse and the warehouse next to the factory.
The 600 pages of Friedman's book radiate a gung-ho optimism, and perhaps for that reason it is more widely read in India, a country that for most of the 20th century suffered the pessimistic prognoses of the outside world, than in Britain. To look for a British equivalent you might have to go back to Samuel Smiles and his Victorian testaments to hard work and self-help and his glorification of the great engineers. As I went around Bangalore this month I often thought of Smiles and the first industrial revolution - of its ruthlessness and chaos, its model factories and choked sewers, its slums and philanthropists, yet running through its new kind of people, freshly urbanised and adapting to the factory clock, the thread of a belief that they were at the centre of a new kind of world.

Arun Pai, my guide that morning, is an example of this new kind of person, or new at least in India. Inspired by the walking tours of London, he created a small company, bangalorewalks.com, and every Sunday he leads groups of people through the history of the city as manifested in its monuments, churches, parks and barracks. At this, he is quite brilliant; from plain and obscure objects he can draw stories that take you to Napoleon and the conquest of Everest. To listen to him, Bangalore has been affecting the course of global history ever since Lord Cornwallis took it from Tipu Sultan in 1791.

But walking tours aren't how Pai makes his real money. That comes when a software company, usually American, asks him to introduce one of its newly arrived executives to India: the bewildering totality of it. Pai has a one-day course. He takes them in his car to the famous Friedman site, to the ancient Hindu temple behind the new Marks & Spencer's, to the new suburbs and shopping malls. He may recall a few recent cultural references, such as the American passive verb, to be "Bangalored", meaning to lose one's job to cheaper competition overseas. He can do Hinduism in five minutes. Most of the questions are about cows, but beggars and caste are also popular topics. He has persuasive answers for the innocent from Kansas, and to demonstrate and sharpen his skills he asked me to ask him any question at all about noticeable aspects of India. I asked why it was that Indian advertising never depicted any human being with a skin shade darker than olive, when so many of the population, especially in the south, were by no means so light. Pai said that it was just a local edition of a universal fact: the enduring appeal of whiteness. But he agreed that this answer might not satisfy an American executive who happened to be black, or indeed anyone from a society that has adjusted to multiculturalism in way that India, for all its divisions of religion, language and caste, has not.

Later that Sunday morning, Pai took a group of us along the city's main thoroughfare, MG (Mahatma Gandhi) Road, in search of bungalows. The Victorian bungalow and its shady garden were once the trademarks of Bangalore - "India's garden city". Only a few survive. Land is too valuable and its price increases every week. "Take pictures, take pictures," Pai said when we stood in front of one. "It may not be here when you next come." In 10 years, people say (and perhaps hope), the city will look like Dubai or Singapore. Some of it already does.

Go back 60 years. Does the story of Bangalore's rise symbolise the larger history of independent India? Yes and no. In 1947, Bangalore contained about 500,000 people and has about six million now; the fifth largest city in India. In the same period, India's population, now 1.12 billion, has multiplied by a factor of three rather than Bangalore's 12, but urban growth rates that are much higher than the national average aren't unusual. When I first came to Bangalore in 1976, I didn't feel I'd left India behind. The same restrictions on consumption, the same brakes to aspiration, applied as much here as anywhere else in the country. Under the regime of Indira Gandhi (and of her father, Jawaharlal Nehru, before her), the Indian middle class grew to a kind of noble austerity in the cause of national self-reliance. On the other hand, even then, Bangalore was clearly exceptional. It was tidier, neater, greener, English was more readily spoken, a striking number of church towers poked above the trees in a country where, outside the far south, Christianity had made very little impact. Above all, there was (and is) the climate. Bangalore is 3,000ft above sea level, protected by its height from the enervating heat; the British called it a "no-fan station". When I asked Nandan Nilekani of Infosys how he explained the IT industry's attraction to Bangalore he made all these points - "It's the most middle-class, Anglicised, cosmopolitan city in India, with a better quality of life" - and added another: that a scientific and technical tradition already existed in the city, thanks to the aircraft and electrical instruments businesses that the government of India located there in the 1950s and 60s, militarily strategic factories that were as far away as possible from the borders of Pakistan and China, India's potential enemies. During the 1980s, even before economic liberalisation, it became known as the fastest-growing city in Asia.

It is also, as the historian Ramachandra Guha says, a mongrel kind of town: the only place in India where you can watch films in six Indian languages. Partly, this is British doing. After Cornwallis dethroned Tipu Sultan and restored the kingdom of Mysore to its former Hindu rulers, the British built an army cantonment on the high ground outside the gates of Bengaluru, which in the local language, Kannada, was the name of the town they had captured. The cantonment grew in size to become a "civil and military station" which drew thousands of Tamil craftsmen, tradesmen and servants, as well as Persian horse traders and British civil servants and brewers. A large Anglo-Indian population became established. Missionaries opened schools, a great park was laid out, exotic trees imported, courts and administrative offices built. The lingua franca of this new town, Bangalore, was English; just down the road in the narrow lanes of Bengaluru they continued to speak in Kannada.

The two towns became one municipality in 1949, but the differences between them persist. In Bangalore, I met men in their early middle-age, raised in the old city, who said that until their late teens they had never travelled the mile to the cantonment; and who had been warned by their parents that, when they did, they had better avoid the temptations of bars and hotels.

Bangalore became the capital of the new state of Mysore (since 1973, Karnataka) when the Indian state boundaries were redrawn in 1956. The official language of Karnataka is Kannada. But thanks to the successive flows of migrants from other Indian states, only about 30% of Bangalore's inhabitants claim it as their first language. That means the city has no dominant majority, a welcoming absence as far as new migrants and businesses are concerned but a fretful one for the native Kannada speaker, who, if he lacks English, may feel excluded from the new consumer culture of his own capital city.

Consequently, in what some Bangaloreans consider a political sop to the natives, Bangalore will be renamed Bengaluru within the next year or two. When it appears in airline timetables and on departure boards, a stranger might imagine that the new, more Indian name reflects a new, more Indian reality on the ground. But the opposite will be the case.

A good way to understand what has happened to Bangalore is to look at a street map. In the old city, the Kannada names, many centuries old, come from castes and occupations and bazaars. In the cantonment, the source of the names is obvious enough: Brigade Road, Infantry Road, Church Street. Then, to judge from the parentheses, a burst of patriotic renaming took place - Sir Mirza Ismail Nagar (Richmond Town), Field Marshall Cariappa Road (Residency Road) - though to no effect on how people think and speak of these places. In the suburban spread of the 1960s and 70s, the streets renounce any claim to history or romance, as though Stalin was in charge of the naming department. In Indiranagar, named after Indira Gandhi, the main street is One Hundred Feet Road: that is its width. Many streets are simply numbered, as are localities: a visitor can spend many hours in an auto-rickshaw looking for 597, 15th Cross Road, JPNagar Phase Two. But now that anonymity, these plain square houses in their numbered streets, no longer satisfies new money. The names and architecture of the most recent settlements, high-rises and gated communities could be described as postmodern or pre-post-colonial: Buckingham Court, Windsor Residency, Palm Meadows, 10 Downing Street. Some quite small houses have castellated battlements. The word "Residency", the title the British gave to the homes of senior imperial administrators, is very popular.

"People here speak of 'get-up'," an architect told me as we had dinner in a hotel. "They say to each other, 'What kind of get-up is your new house going to have? Mediterranean? English Castle?' They think they can do anything - anything! - and they want to shove it in your face." In the hotel bar, young Bangalorean men were braying and drinking - the sound carried across the hotel gardens. They weren't poor; this was an expensive hotel. A phrase that the former Sunday Telegraph editor Peregrine Worsthorne coined in the red-braces 1980s came to me: bourgeois triumphalism.

I came to Bangalore a few times in the 1980s and stayed in the homes of my then father-in-law, first in Indiranagar and then in the old Anglo-Indian colony of Whitefield. The sights and sounds I associate with these places were, and in most places still are, common to all India. You would go to sleep to the sound of the chowkidar, the night watchman, tapping his stick and blowing his pea whistle. In the morning there would be the cawing of crows and the cries of an early street pedlar, selling vegetables from a stall on wheels. Sometimes an occasional car would honk. The Whitefield house is now a restaurant, the Eurochine, and in Indiranagar they are tearing down 30-year-old houses all the way down the Hundred Feet Road to make way for the stores of the global brands: Benetton, Nike, Levis. Cars queue impatiently down every street and turning.

It does no good to be wistful. A bright young science graduate can expect a starting salary of at least 270,000 rupees (about £3,400) a year as a software engineer, and within a year or two will be earning far more than the professor who taught him. Between 200,000 and 300,000 people work in Bangalore's IT industry and not all of them will be so prosperous; call-centres, now referred to dismissively as IT's "low-hanging fruit", pay far less. The great majority, however, will earn far more than their parents. Rent and property are expensive - at the top end, a Bangalore flat can cost £1m - but credit is cheap. This new middle class has cars and takes holidays abroad (eight days in Singapore for £150). The very rich have servants and a manager to manage them. A servant - a driver, a cook - can double his salary by learning English. If the new recruit joins Infosys, which has become India's most applauded company, he or she will travel each day to a "campus" at Electronic City, which has a putting green, an orchard, a swimming pool, free bikes to get around, and a canteen that serves 14 different cuisines (one of them Jain, which omits garlic and onions). In recent years, more foreign chief executives and heads of state have visited this campus than the Taj Mahal, or so it is said, and "the Infosys tour" has become a cliche of books and TV documentaries. And of course, after getting out of your golf buggy and ascending one of the taller buildings, you can look out through the plate glass and see the slums beyond the fence, where a small boy is defecating next to a stray dog and the ditch runs black. India: land of contrasts. But supposing this replica of Silicon Valley were to disappear? The slum, the stray dog, the black ditch, the defecating child - all these would still be there.

Philanthropy is popular. Infosys has a foundation devoted to good works. Quite separately, Nandan Nilekani's wife, Rohini, estimates she has spent about $40m (£20m) of their money on children's educational and water projects, mainly in village India, over the past few years. This is a lot. Then again, her husband is one of Infosys's seven founders. When the company went public in 1993, 100 shares cost 9,500 rupees. The same shares today would be worth 24,440,000 rupees, 3,000 times their flotation value. (Many more people have benefited than the founders; stock options were once given to all employees, who now number about 80,000.) "It's just no use being an island of prosperity in this country, it isn't going to work," Rohini Nilekani said when I went to see her in her charity's office, and in that statement hover two large black clouds.

The first is inadequate, sometimes collapsing, infrastructure: roads, railways, sewers, drinking water, schools, electricity. The second is the growing divide between urban and rural India. Despite increasing urbanisation, about 70% of the population still live in agricultural villages. The reverse side of the economic liberalisation that made India's software industry possible is the crisis of Indian agriculture. Poor crop prices, exhausted soil, expensive fertiliser, falling water tables, and land that needs to sustain too many livelihoods: so far this year 1,000 Karnataka farmers are said to have killed themselves. And yet the odd thing, the thing that a more curious American executive might ask their guide, Arun Pai, is: given that the price (80 rupees, about £1) of a six-minute local call from my grand hotel surpasses the daily wage of the sugar-cane cutter in a field a few miles away, how come there is so little anger and unrest in Bangalore? The best answer to this question came from another software entrepreneur, Subroto Bagchi, who runs MindTree Consulting (its clients include Avis and Royal Mail). I went to see him at his house. He offered tea and when I said yes, went away to make it and brought it on a tray himself - striking behaviour; never before, in 30 years' experience of India, have I ever seen any Indian man of above average wealth do anything so humbly domestic.

Bagchi, like many other Indian IT success stories, likes to stress his middle-class origins, a term that has a more egalitarian implication in India than in Britain. Indian businesses in the past tended to be run by caste-based dynasties, with money and trading (as well as political) know-how inherited by succeeding generations. Bagchi's father, on the other hand, worked as a government officer in a remote, un-electrified district of Orissa State; Nilekani's father managed a textile mill; village postmen, teachers and railway ticket-collectors appear proudly in the biographies of others. According to Bagchi, it demonstrates the truth of the saying that the Indian IT business succeeded "not because who we knew but because what we knew" and having to compete in a global market without political protection.

I asked about the prospects of discontent, given the disparities of wealth in Bangalore. Bagchi said: "Tell me, where is the angst, where is the senseless killing? They're not even restless. They're not just content, they're quite grateful. Most people, labourers, maidservants, are making a better living. It doesn't occur to my driver that he has every right to be as well-dressed as I am. Just doesn't occur to him. You have to understand, we don't have a sense of urgency, our civilisation is 3,600 years old. For most Indians, it's been an upgrade from coach to business class. They're grateful to be where they are".

*· Ian Jack began writing about India as a foreign correspondent in 1977 and lived for a time in Delhi and Calcutta. He edited the Independent on Sunday and then Granta magazine and now writes a Saturday column for the Guardian.*


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## Bushroda

*How did India do it?*
*The rise of a new global force* 

Aditya Chakrabortty
The Guardian, UK 
Tuesday August 14, 2007

Outsiders see India as a new power on the rise; Indians, on the other hand, talk about a revival, a restoration of fortunes. They point out that in the 18th century, India had the biggest economy in the world, larger than all of western Europe and the Americas put together. Even after independent India came to be stereotyped as a land of urban slums and rural poverty, there was a feeling that inside this poor country, there was a rich one struggling to get out. In the past two decades, it has finally emerged, thanks to growing industries (most notably IT) and government policies to cut regulation.

Much of this success can be traced back to Jawaharlal Nehru. As prime minister of India from its birth in 1947 until his death in 1964, he wanted it to be not only free of foreign rule, but self-sufficient economically. His answer? Heavy industry, state-directed investment, and five-year economic plans.
Historians have not been kind to Nehru. He cuts an unfashionable figure with quaint enthusiasms (Steel smelting! Hydro-electric dams!). Yet the inconvenient truth for today's free-market-loving India is that the foundations for its success were laid by Nehru's socialist economics.

Those booming subcontinental IT firms, and even the US's Silicon Valley (which recruits so many of the subcontinent's software engineers), prosper thanks to Nehru's creation of elite technological and business schools. Neither Pakistan nor Bangladesh made such far-sighted investment and that, along with political instability, largely accounts for their failure to take off.

All this state intervention had a downside: red tape that grew like bindweed. A carmaker wanting to make more vehicles in its own factory needed permission from a bureaucrat, which meant forms, permits and pleading. The Licence Raj, as it was known, nearly stifled the life out of India's private sector.

But in 1991 a cash-strapped Indian government was forced to ask other countries for a loan. Donors insisted that it open up its economy - both to its own private sector and to foreign competition. The Licence Raj was out: from now on the government would intervene less, regulate less - generally do less.

And India started to change. Take that staple of commercial life: the phone call. "In the old days," says Deepak Lalwani, an Indian-born stockbroker now based in London, "if a Bombay businessman wanted to phone Delhi he had to book a line and wait a few hours." The call would then be upgraded to urgent. A couple more hours would pass. Then, says Lalwani, "The booking would at last be given 'lightning' status." Another hour and at last the conversation could begin, having by now accrued all the ceremony of a state summit. Today, an exec making a call would not only not need to book; he or she would probably use a mobile instead. In 2000, Indians bought 3m mobiles; this June alone they bought 7.3m. That does still leave alomst 80&#37; of Indians with no phone at all, however. In villages, where the vast majority of the population lives, there are barely any cellular networks.

This sums up what is right and wrong with India's embrace of freer markets. It has been a boon for the educated, middle class, largely city-dwelling minority able to take advantage of it - and of little help to anyone else. The economy is growing at nearly double its historic rate, but this has been a jobless boom, creating better jobs, but not new jobs, and concentrated in services (all those software firms, back offices and call centres). By contrast, China, often put in the same bracket, has focused on employment-creating manufacturing and developing infrastructure. And while Delhi politicians see their job as merely getting out of the private sector's way, Beijing remains heavily involved in economic decisions.

How big is the boom in India's economy? About as big as the US. That's the size of India's new middle class, the main beneficiaries of the new regime. By 2010, there will be 300m of them: equal to the US in population size - and perhaps in taste. If you want evidence, drive an hour out of Delhi to Gurgaon, a town sometimes called the centre of the new India. The main drag is called Mall Road. A bit further along is a housing estate called Malibu Town. It has its own security guards, a golf club and roads with names such as Pine Drive. It is pleasant enough, but it bears little resemblance to the rest of the country. How to narrow that difference is India's new problem.


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## Bushroda

*How Pakistanis see India* 
Kamila Shamsie
The Guardian, UK 
Tuesday August 14, 2007

Earlier this year, while in Delhi for a writers' conference, I met one of my compatriots from across the border. "It's such a relief, isn't it?" he said. "Coming to India and discovering that, despite the hype of the past couple of years, it's still just another inefficient, dirty, third-world country like ours." The subtext was clear: a truly shining India would make Pakistan feel very dim by comparison.

But whatever the consolations of India's inefficiency, it's impossible to ignore the fact that Pakistan's position in the world centres around its murky role in the "War on Terror" while India's centres around economics.

'Twas not always thus. Pakistan has long been in the habit of feeling superior to India in economic terms. At the start of the 90s when I was, bafflingly, taking A-level economics in Karachi, our teacher taught us all we needed to know about India's protectionist economy with the sentence: "The only part of Indian cars which doesn't make a noise is the horn."

What, then, is the impact of the reversal of fortunes of the past decade? For the more thoughtful segments of Pakistani society it is reason to take a critical look at the failures of Pakistan's policies. Nayyara Rahman, a business student, told me she envies the Indians "because their growth is not frothy like ours; it's more sustainable, because it includes the wider spheres of the population, and not just the fringed elite". And Ameena Saiyid, the MD of Oxford University Press, Pakistan, also admits to envy - particularly over India's refusal to allow "its cows and elephants and other religious symbols and beliefs to impede their march to economic growth while we have got totally entangled in our burqas and beards".

But for a number of Pakistanis there remains doubt about whether the reversal of India's fortunes is real or just a giant bubble of hype. The Nation columnist Amina Jilani says: "Pakistan is loath to admit India even might be a growing power. In local idiom, we think we are both 'same to same'."

When I pushed another Pakistani for evidence that, deep down, Pakistan hasn't accepted its economically weaker position he responded: "The arms race. They test a missile, we test a missile." And it's true that Pakistan seems to have learned little from the collapse of the Soviet Union as it tried to keep up with America's defence spending. Perhaps it's apt, in a tragic-satirical way, that the arms race is one of the few areas in which Pakistan and India's economic muscles grapple with each other. In most other areas the approach is strictly hands-off: trade with India has always been severely restricted. Change is under way, but Pakistan continues to link economic progress to "forward movement on all fronts", which everyone recognises as a reference to Kashmir.

There are dissenters to this "keep India out" view. They include film-maker Hasan Zaidi. Given the might of Bollywood, one might assume that he would be the last person to call for an opening up of markets (at present, Pakistani cinemas are banned from showing Bollywood films, although they are readily available on pirated DVDs). But Zaidi points out that the Pakistan film industry is already in "a death spiral", that there's much to be gained by bringing across technically accomplished Indian films, and that India is a huge market that Pakistani film-makers can take advantage of.

Of course it's not just goods that have a hard time crossing borders. Visa restrictions mean that people, too, have a difficult time witnessing first hand life on the other side. That might change when - and if - India's economic growth allows it to make the one claim that remains elusive: that its poverty rates are lower than Pakistan's. That eventuality may well mark the point when Pakistan's labour force turns its eyes away from the Gulf and Europe to dream of earning a livelihood in a country where language and custom are not barriers. For the moment, though, India and Pakistan exist primarily in each other's imaginations, and our reactions to each other continue to be based on old psychological wounds. 

_*&#183; Kamila Shamsie grew up in Karachi, which is the setting of her most recent novel, Broken Verses (Bloomsbury)*_.


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## Bushroda

*How Bangladeshis see India* 
Tahmima Anam
The Guardian, UK 
Tuesday August 14, 2007

In December 1971, Indira Gandhi sent Indian troops to fight the Pakistan army in support of the Bangladesh war of independence. The intervention brought a conclusion to the war in nine short days, ending a nine-month campaign of genocide and ethnic cleansing that had left countless dead and many millions displaced. Thus, on the eve of independence, it seemed the road was gilded for a great love-affair between Bangladesh and India. This romance was even adumbrated by our geography: India surrounds Bangladesh on three sides, a great bear-hug of a border. But in the decades since Bangladesh's independence, the affair has gone sour.

The troubles began almost from the start. After intervening in the war, the Indian army did what armies do - they behaved like victorious soldiers. Pakistan did not surrender to Bangladesh - the treaty signed on December 16 1971 was between an Indian general and a Pakistani general. Suddenly the war that Bangladeshi freedom fighters had been waging became yet another skirmish between the two elder children of partition. And those same freedom fighters were forced to surrender their arms to the Indian troops. It was a symbolic wound that would fester. The bear-hug began to feel like a stranglehold.
Relations between India and Bangladesh were soon further strained: in 1975, the Indian government built the Farakka Barrage 10 miles from the Bangladesh border; it diverted Ganges water to the Hoogli river basin, raising salinity levels, contaminating fisheries, hindering navigation, and posing a threat to public health. Many Bangladeshi villages were plunged into drought, which kickstarted a sentiment of anti-Indianism that has gripped the popular imagination in Bangladesh ever since. None of these issues stop Bangladeshis from embracing our neighbour's prolific cultural exports. We buy Indian cars, Indian saris, and most importantly, we adore Bollywood.

But what happens to Bangladesh when India shines? Do we get a little bit of the sheen, too? Some of us certainly hope so. Our businessmen are eager to shake hands with the billionaires who are at the helm of India's burgeoning economy; our vocational schools are full of expectant students, their ears plugged into English-language tapes so that, someday, we may get one or two of those call-centres ourselves.

In the meantime, India has developed the peculiar paranoia of the strong towards the weak. Despite the low per-capita income of the average citizen, Bangladesh provides India with $1.5bn in trade every year. Yet India refuses to open its economic borders to Bangladesh. There is yet to be an implemented economic treaty that would allow our products to cross the border into India without heavy tariffs. This trade imbalance only serves to reinforce the feeling that we live in the shadow of a bully. India also sees Bangladesh as a nation of looming Muslim refugees - possibly an echo of the refugee crisis of 1971, but in this case poised to upset India's economic growth and religious equilibrium. This time, if we flee our flooded delta, India will not harbour us with the same enthusiasm as before.

We cannot love India. The relationship is too unequal for romance, and our neighbour is too aggressively self-interested to be embraced as a generous parent. We must either live with what we have, or take the initiative. For instance, we can wield our geographic advantage by negotiating between the two nuclear powers in the subcontinent, India and Pakistan. If we cannot have our own romance, at least we can become matchmakers. And instead of decrying the way India treats its minority Muslim population, we can be an example of a pluralistic society ourselves. But the uncomfortable truth is that our anxieties are displayed and articulated through the lens of religious prejudice. Since 1971, the Hindu population in Bangladesh has been steadily dwindling, as Hindus are systematically and institutionally discriminated against. Bullied, we bully in return.

Finally, instead of bemoaning our fate, we can strengthen our democracy, rid the political landscape of corruption, and capitalise on our economic growth - which, despite disasters both natural and self-inflicted, stands at a healthy 5%. By doing a better job of levelling the playing field, we may still never have a chance at romance with India, but we can at least work towards a relationship of mutual respect. 

*· Tahmima Anam's debut novel, A Golden Age, is set against the backdrop of the 1971 Bangladesh war of independence.*


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## Bushroda

*'I've witnessed the arrival of a golden age'*
*Randeep Ramesh, the Guardian's Delhi correspondent, spent his childhood apologising for having any connection with India. But how times change ... *

The Guardian, UK 
Tuesday August 14, 2007

A few years ago, I visited an Indian software millionaire at his headquarters in Bangalore for a story about the country's effervescent computer industry. Software is modern India's spice, a precious commodity craved by the rest of the world. The businessman took great pleasure in showing me around.

I marvelled at rows of programmers working in Japanese; I gawped at the basketball courts and pizza eateries imported to give the company an authentic Silicon Valley feel. After an hour or two, the conversation got personal. In the unselfconscious, no-nonsense manner of many educated Indians, the entrepreneur quizzed me on which university I had gone to (Cambridge) and the subject I had studied (physics), before triumphantly declaring that I had been "born in the wrong country". When I protested, he raised his palm.

"The British system has come to this - taking scientists and making them journalists," he said with a smile. "What a waste. Just imagine the opportunities you missed by not being born here."

In my youth I would have laughed that comment away as misplaced optimism in a country that could not even get its trains to run on time. I had grown up shuttling between my birthplace, London, and India, my parents' homeland.

My earliest memories revolved around the open sewers and the endless slumlands of my father's Mumbai, or Bombay as it was then known, and the tropical sloth of my mother's home in Kerala. It is fair to say that nothing worked in the India of yesterday. There were phones, but the lines were mostly dead. Frequent blackouts meant the inside of the fridge was invariably hotter than the air outside it. India appeared to be a place that, like my grandfather's battered Fiat, went faster backwards than forwards.

I spent my childhood apologising for having any connections with India, a country that in my lofty opinion needed major surgery. But a decade ago, while the rest of the world was looking the other way, India reached some kind of tipping point, and change began to happen - fast.

The signs were easy to spot. By the mid-90s, the Marks & Spencer underwear and ovenproof CorningWare dishes my parents had always brought as gifts for relatives were politely returned, or left unopened. "We can buy this here," sniffed my auntie in Bangalore.

My Indian cousins, who had diligently studied science subjects, began to leave India for jobs with management consultants and computer companies in places such as Singapore and California. Friends in Britain started to climb the social ladder by having arranged marriages with Indian women who were often smarter, more sophisticated and better-looking than they perhaps deserved.

Since I pitched up in 2003 to live and work in Delhi, I have witnessed firsthand the arrival of a golden age. The making and spending of money has become respected in a country where poverty was once revered. Middle-income westerners now feel poor in the upmarket postcodes of India's big cities.

Yet it would be wrong to think that India has become just like everywhere else. Yes, an economic miracle is under way. Yes, there is now an elite as capable as any in the west. The paradox is that this is a modernising nation, but one still steeped in myth and legend. Indians tend to ascribe the country's rise to its unique, ancient civilisation and in the process tend to be rather dismissive of anywhere else.

This does tend to blind Indians to the real problems faced by the country. Venality abounds, and the widespread acceptance of corruption tarnishes the pride that Indians take in their most tangible achievement - democracy - and saps the energy with which they express it.

The abuse of public office for private profit reaches comical proportions in India. Family connections, privileges of caste and a pathological willingness to break the law characterise many social relations. In the dirt-poor state of Bihar, I once visited a local politician, in jail awaiting trial for numerous murders; he was campaigning from behind bars for re-election. Mobile phones and lime juice were brought by the guards as we spoke; they bowed in deference to my thuggish interviewee.

Hanging in the air, too, is desperate poverty. To the naked eye, India appears not just an underdeveloped society, but an extremely unjust one. There are 260 million poor people in the country, and more than 1,000 children die of diarrhoea every day. The capital's streets are lined with ragged children and beggars waving handless stumps. Every day 22 farmers in India commit suicide.

Official poverty numbers are going down, but not fast enough for anyone to notice. Yet the flow of good news keeps on coming. A top news story here last week was about a Punjabi businessman spending 1.55m rupees (£20,000) on a bespoke mobile phone number.

Living in India sometimes feels like living in the midst of a cult, with hundreds of millions of souls convinced of the country's inevitable rise to global, nuclear-armed power. The nation's privileged classes and castes have been gripped by a psychology of ascendancy, anticipating the greatness that imperialism and the cold war denied them.

In fact, development for most Indians is a state of mind. Many simply sweep aside doubts by asserting the supremacy of the country's customs and traditions. I have heard my own family here in India discuss people with contempt just because of their background - be it class, caste, race or religion. When I protest, they simply tell me that I am not an Indian, so how could I understand?

During my time here, I have come to realise that Indians have little interest in the British now, or in a British Asian like me who has returned to his parents' land. My affinities with the country, too, have their limits. I have come to realise that despite a common heritage there is little I share in experience or beliefs with the millions here.

America, the first British colony to break free, is the model now. Long gone is the view that Britain is a country to be admired or emulated. Like the American people, Indians have become more confident and assertive, citing stories of those who triumph against the odds to balance their nation's shortcomings.

They see glasses half-full, not half-empty, here. India wakes up with a smile on its face each morning, because its people know that the past may have been yours, but the future belongs to them.


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## Bushroda

*Indian identity is forged in diversity. Every one of us is in a minority*
*The nation born 60 years ago today is built on a bold idea of difference - and an agreement that it's healthy to disagree* 

Shashi Tharoor
The Guardian, UK 
Wednesday August 15, 2007

When India celebrated the 49th anniversary of its independence from British rule in 1996, its then prime minister, HD Deve Gowda, stood at the ramparts of Delhi's Red Fort and delivered the traditional independence day address to the nation. Eight other prime ministers had done exactly the same thing 48 times before him, but what was unusual this time was that Deve Gowda, a southerner from the state of Karnataka, spoke to the country in a language of which he did not know a word. Tradition and politics required a speech in Hindi, so he gave one - the words having been written out for him in his native Kannada script, in which they made no sense.

Such an episode is almost inconceivable elsewhere, but it was a startling affirmation of Indian pluralism. For the simple fact is that we are all minorities in India. There has never been an archetypal Indian to stand alongside the archetypal German or Frenchman. A Hindi-speaking Hindu male from Uttar Pradesh may cherish the illusion he represents the "majority community". But he does not. As a Hindu, he belongs to the faith adhered to by four-fifths of the population. But a majority of the country does not speak Hindi. And, if he were visiting, say, my home state of Kerala, he may be surprised to realise that a majority there is not even male.

Worse, this stock Hindu male has only to mingle with the polyglot, multicoloured crowds - and I am referring not to the colours of their clothes but to the colours of their skins - thronging any of India's major railway stations to realise how much of a minority he really is. Even his Hinduism is no guarantee of his majorityhood, because caste divisions automatically put him in a minority. (If he is a Brahmin, for instance, 90% of his fellow Indians are not.)

If caste and language complicate the notion of Indian identity, ethnicity makes it worse. Most of the time, an Indian's name immediately reveals where he is from or what her mother-tongue is: when we introduce ourselves, we are advertising our origins. Despite some intermarriage at the elite levels in our cities, Indians are still largely endogamous, and a Bengali is easily distinguished from a Punjabi. The difference this reflects is often more apparent than the elements of commonality. A Karnataka Brahmin shares his Hindu faith with a Bihari Kurmi, but they share little identity with each other in respect of their dress, customs, appearance, taste, language or even, these days, their political objectives. At the same time, a Tamil Hindu would feel he has much more in common with a Tamil Christian or a Tamil Muslim than with, say, a Jat from the state of Haryana with whom he formally shares the Hindu religion.

What makes India, then, a nation? As the country celebrates the 60th anniversary of its independence today, we may well ask: What is an Indian's identity?

When an Italian nation was created in the second half of the 19th century out of a mosaic of principalities and statelets, one Italian nationalist wrote: "We have created Italy. Now all we need to do is to create Italians." It is striking that, a few decades later, no Indian nationalist succumbed to the temptation to express a similar thought. The prime exponent of modern Indian nationalism, Jawaharlal Nehru, would never have spoken of "creating Indians", because he believed that India and Indians had existed for millennia before he articulated their political aspirations in the 20th century.

None the less, the India that was born in 1947 was in a very real sense a new creation: a state that made fellow citizens of the Ladakhi and the Laccadivian, divided Punjabi from Punjabi and asked a Keralite peasant to feel allegiance to a Kashmiri Pandit ruling in Delhi, all for the first time.

So under Mahatma Gandhi and Prime Minister Nehru, Indian nationalism was not based on any of the conventional indices of national identity. Not language, since India's constitution now recognises 22 official languages, and as many as 35 languages spoken by more than a million people each. Not ethnicity, since the "Indian" accommodates a diversity of racial types in which many Indians (Punjabis and Bengalis, in particular) have more ethnically in common with foreigners than with their other compatriots. Not religion, since India is a secular pluralist state that is home to every religion known to mankind, with the possible exception of Shintoism. Not geography, since the natural geography of the subcontinent - framed by the mountains and the sea - was hacked by the partition of 1947. And not even territory, since, by law, anyone with one grandparent born in pre-partition India - outside the territorial boundaries of today's state - is eligible for citizenship. Indian nationalism has therefore always been the nationalism of an idea.

It is the idea of an ever-ever land - emerging from an ancient civilisation, united by a shared history, sustained by pluralist democracy. India's democracy imposes no narrow conformities on its citizens. The whole point of Indian pluralism is you can be many things and one thing: you can be a good Muslim, a good Keralite and a good Indian all at once. The Indian idea is the opposite of what Freudians call "the narcissism of minor differences"; in India we celebrate the commonality of major differences. If America is a melting-pot, then to me India is a thali, a selection of sumptuous dishes in different bowls. Each tastes different, and does not necessarily mix with the next, but they belong together on the same plate, and they complement each other in making the meal a satisfying repast.

So the idea of India is of one land embracing many. It is the idea that a nation may endure differences of caste, creed, colour, conviction, culture, cuisine, costume and custom, and still rally around a consensus. And that consensus is around the simple idea that in a democracy you don't really need to agree - except on the ground rules of how you will disagree.

Geography helps, because it accustoms Indians to the idea of difference. India's national identity has long been built on the slogan "unity in diversity". The "Indian" comes in such varieties that a woman who is fair-skinned, sari-wearing and Italian-speaking, as Sonia Gandhi is, is not more foreign to my grandmother in Kerala than one who is "wheatish-complexioned", wears a salwar kameez and speaks Urdu. Our nation absorbs both these types of people; both are equally "foreign" to some of us, equally Indian to us all.

For now, the sectarian Hindu chauvinists have lost the battle over India's identity. The sight in May 2004 of a Roman Catholic political leader (Sonia Gandhi) making way for a Sikh (Manmohan Singh) to be sworn in as prime minister by a Muslim (President Abdul Kalam) - in a country 81% Hindu - caught the world's imagination. India's founding fathers wrote a constitution for their dreams; we have given passports to their ideals. That one simple moment of political change put to rest many of the arguments over Indian identity. India was never truer to itself than when celebrating its own diversity.

*· Shashi Tharoor is the author of Nehru: The Invention of India, and former under secretary general of the United Nations*


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## Bushroda

*India: New voyage of enterprise and creativity*
Ceylon Daily News, Sri Lanka 

_India marks her 60th anniversary of Independence today. Here we reproduce excerpts from a speech by Indian Prime Minister Dr. Manmohan Singh at the India Economic Summit in November 2005. _

India has come a long way since 1985, when Prime Minister Rajiv Gandhi inaugurated the First India Economic Summit. These past two decades have been a period of great change in India, in my opinion, a change for the better. 

When Rajiv spoke here two decades ago he put forth a bold vision of a new India, a modern India, ready to burst into the world stage, full of energy, enterprise and dynamism. In many ways, Rajiv Gandhi was ahead of his times. 

His vision of a new wave of modernization captured the imagination of a new generation of entrepreneurs and professionals in all parts of our vast country. To be sure, it was not smooth sailing. 

He had to reckon with vested interests; he had to contend with old mindsets; he had to convince many sceptics. He did so valiantly, with his combination of gentleness and impatience. 

He in many ways, symbolized the hopes and aspirations of a new generation, a generation which is now leading Indias march into an exciting future, full of immense possibilities for our billion people. 

In 1991, when we were given the opportunity to carry forward the programme of change, there were many sceptics in our midst, and in the audience here. What was regarded as path breaking then, is now regarded as the norm. 

The Indian economy has become more open, more globally integrated and more competitive. The seekers of protection then line up now seeking greater openness. Truly, times have changed; mindsets have changed; attitudes have changed; aspirations have changed; and our hopes for the future have also changed. 

Our industry and enterprise are far more confident, competitive and ambitious about their future and they feel that they are second to none. This is very satisfying for all of us. Yet, we still have the sceptics, the worriers and the critics. Some have genuine concerns about change, others continue to be prisoners of the past. Today, when I look back, 

I am even more convinced that I was correct to observe in my first budget speech in 1991 that the idea of the emergence of India as a front ranking economic powerhouse of the world economy was an idea whose time had indeed come. 

I believe that there are no external constraints now to Indias growth and whatever constraints are there, are internal; constraints imposed by our polity, our social structures, our regional imbalances, our ability to handle inequity, and our ability to take hard, but essential decisions. The last two decades have seen many ups and downs. 

In our pursuit of economic growth, we have made mistakes, learnt from them, refined our approaches and corrected ourselves. We have realised that growth must translate into prosperity for all. It must provide hope and opportunity for all sections of society - hope for a better future; and an opportunity to participate and benefit from processes of growth. The durability of the policies introduced in the early 90s is no longer in doubt. 

There have been many changes in government, but policies have remained stable, moving inexorably in a particular direction, only making marginal course corrections. We have today, a broad-based national consensus that the process of economic development and growth must enhance both - equity and efficiency. 

Our government too, believes that processes of wealth creation are essential for us to meet our commitment to eradicating poverty. We are committed to creating an environment conducive to creativity and enterprise, an environment, which rewards risk-taking and innovation. 

It is only through this can we eradicate poverty and create jobs for millions of our youth. We need growth with equity and social justice. This is a political as well as a social imperative. Policies relating to investment, taxation, external trade, banking & finance, Foreign Direct Investment, capital markets and small scale industries have all evolved towards making our industry and enterprises more efficient, more globally competitive and as free from restrictions as possible. 

We have been fiscally prudent and macroeconomic stability has been maintained without sacrificing essential expenditures on social and physical infrastructure. We have a vision of an India, which we are determined to fashion - a vision of an inclusive, prosperous, democratic, equitable India - and we are making steady progress in that direction. 

The direction is clearly visible and I assure you that we will not falter in this regard. We are on the right track. 

In fact, we should be targeting a 10% growth rate in 2-3 years time. In my view, this is eminently feasible, if we have the expected increase in our savings rate and arising out of a young population, if we manage to make a quantum leap in the growth rate of our agriculture, if investment in infrastructure provides a fresh impetus to industry and if services continue with their impressive performance. 

The problem areas are known and we are determined to make concrete efforts to move forward on all these fronts. On the external front, we have become actively engaged with the world economy. 

I am certain that in the next few years, we may see the rise of a major free trade area in Asia covering all major Asian economies, including China, Japan and South Korea and possibly extending to Australia and New Zealand. 

This Pan-Asian Free Trade Area could be the third pole of the world economy after the European Union and North Atlantic Free Trade Area and will, I am certain, open up new growth avenues for our own economy. 

Internally, we are trying to systematically address the problem areas where we still need to eliminate bottlenecks and unlock their true potential. Take agriculture - this is a sector, which has been under-performing, in the recent past. Agriculture is the lifeblood of our country. 

The livelihood and economic well-being of the majority of our people depend on this sector. The key to their prosperity - and the prosperity of the entire nation depends critically on transforming and rejuvenating our agriculture. 

To my mind, given this centrality of agriculture to our economy and society, the key breakthroughs that we have to make in our country to spread the benefits of economic reform, lie in the area of agriculture. 

Closely linked to the fortunes of agriculture is the condition of our rural areas. It is essential that our rural areas have not only basic amenities, but also infrastructure, which can support more intensive economic activity. 

Rural infrastructure must become a facilitator for integrating our rural hinterland into our fast growing economy. We have announced a comprehensive programme for rural infrastructure development under the umbrella of Bharat Nirman. 

Through this time-bound programme, we will achieve a quantum jump in housing, road connectivity, water supply, electrification and telecom connectivity in our rural areas. 

We will bring in an additional 1 crore, 10 million hectares under irrigation. We also recognise that urban areas are focal centres for economic activity and their needs must be attended to on a priority basis. Urban areas are the nodes from which enterprise, creativity and prosperity radiate in all directions. 

They are the engines of sustained growth that can absorb the millions of people who need to be gainfully employed outside agriculture. They need infrastructure, which is world class, infrastructure, which can cater to the needs of a rising population, infrastructure that can propel industrial and economic growth. 

I am certain that we are now at the take-off point in infrastructure. All the elements of an essential institutional framework are now falling in place. If the private sector seizes the initiative, the sky is the limit to what we can achieve in this vital area of national endeavour. 

The telecom sector has anyway done us all proud and has revealed our intrinsic entrepreneurial strengths. The power sector continues to be plagued with complex problems, but we are determined that we will set many things right in the coming months. 

I have often heard complaints from many corners that we have not made progress in our FDI policy. In fact, my own assessment is that today, we have one of the most liberal FDI regimes in the world. We have unshackled FDI policies in telecom, publishing, real estate and in asset reconstruction firms in the last couple of months. 

We have to create close to ten million jobs every year for the next few years to meet the demand for jobs that new generations of the workforce will seek. Most of these jobs will be sought by unskilled labour. We have to therefore, create employment opportunities for them in infrastructure, in manufacturing, in trade and transport. 

When I read the debate in the media on our policies, I notice an incomplete appreciation of the steps being taken by our government to ensure that economic growth is firmly rooted in an equitable, just society. This is essential if growth is to be sustained and if society has to grow and prosper and exist in harmony. 

We have ambitions of being an economic superpower. This cannot be on a base where half our people are literate; where people do not have access to basic health facilities; where people do not have incomes in times of distress. In the long run, we must carry everyone along on this road to national prosperity. 

This is our vision for India. This must be your vision for India too. The new India that was stirred in the 1980s showed that it was ready to be different, once again. Indian enterprise has proved to the world that it is capable of taking on competition when it sets out to do so. 

In 1985, when your first Summit met, no one had even heard of Infosys or Wipro, no one had imagined that an Indian would become the Steel Czar of the world, no one had imagined that a Telco car would compete with Japanese cars. 

We now have a track record of success in some vital areas to feel confident that we can replicate these success stories in other sectors. Why should we then be gripped by diffidence? Why should we still live in fear of globalisation? The experience of the past two decades should give us ample confidence, it should give us courage, it should make us bolder, it should make us think big. 

That sense of confidence must reflect itself in bolder initiatives. It must encourage us to be more open and less controlled. It must give us confidence to pursue change in areas where we have shied away from change. Be it in urban governance, be it in rural marketing, be it about labour laws. 

We need growth, we need jobs, we need incomes, we need security. The India we dream of will provide for this. Our government is determined to fashion such an India. I am sure all of you will join in this new voyage of enterprise and creativity. If not, history will judge us harshly for not making bold to make it.


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## Bushroda

*Philippines can grow like India, says ABN Amro* 
By Doris Dumlao
INQ7.net, Philippines
Last updated 07:06am (Mla time) 08/14/2007

MANILA, Philippines -- Can the Philippines replicate Indias phenomenal growth? Its possible, says Dutch banking giant ABN Amro.

Irene Cheung, head for Asia local markets of ABN Amro, said in a recent research presentation that the Philippines was benefiting from a current account surplus and a positive balance of payments surplus due mainly to strong remittances from overseas Filipinos.

The Philippines hit a record surplus of $5 billion in the balance of payments as of July, as more foreign exchange came in than went out in the first seven months.

She said the favorable BoP position was reminiscent of Indias surplus primarily due to software service exports.

The current account, a major component of the BOP, includes the inflow from the export of goods and services.

Cheung also noted the Philippines improving capital account, fueled by foreign direct investments and portfolio inflow -- which were seen as analogous to Indias capital inflow.

Deputy Governor Diwa Guinigundo of the central bank, who had meetings with ABN Amro, said the Dutch bank had pledged to bring in more foreign investments.

India is a big, promising, emerging market. They see the Philippines in the same light, Guinigundo said.

Even on the business process outsourcing market, Guinigundo said the country was not far behind India.

In terms of volume, they are bigger, but on a person-to-person basis, were comparable, he said.

But ABN Amro said the strong BoP inflows to the region were a big challenge to Asian central banks.

The bank noted that foreign exchange intervention was not being fully sterilized in some countries, including China, India, the Philippines and Malaysia.

Sterilization refers to a central banks mopping up of excess funds pumped into the economy.


----------



## bhangra12345

http://siteresources.worldbank.org/DATASTATISTICS/Resources/GDP_PPP.pdf&#65279;Ranking 



Economy international dollars) 
1 United States 13,201,819 
2 China 10,043,780 a 
*3 India 4,247,361* b 
4 Japan 4,202,524 
5 Germany 2,570,810 
6 United Kingdom 2,118,130 
7 France 1,941,904 
8 Italy 1,753,663 
9 Brazil 1,707,712 
10 Russian Federation 1,704,036


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## Bushroda

Great news Bhangra!! so we are now the third largest economy.


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## Bushroda

*Indian economy to grow 9.4 percent: Merrill Lynch*
*"Projecting a robust 9.4 percent growth for the Indian economy in 2007, Merrill Lynch Tuesday said along with China the two countries had ensured that the US today cannot change the global outlook significantly."*

Projecting a robust 9.4 percent growth for the Indian economy in 2007, Merrill Lynch Tuesday said along with China the two countries had ensured that the US today cannot change the global outlook significantly.

'The impact of our lower US growth forecast is smaller than many investors realise. The 80 basis point cut in our US growth forecast brings 2008 global growth to 4.8 percent from 5 percent previously,' the consultancy's 'Global Economies' report said.

'This highlights the changes that have occurred to the global economy over the past five years - 75 percent of global growth comes from emerging markets, with China and India contributing the lion's share,' the report said.

'Barring a major recession, the US economy alone cannot significantly change the global growth outlook. This is a critical fact for an open, export-dependent region like Asia,' said the New York-based institution.

The report's economic growth forecast for 2007 is 10.9 percent for China, 1.8 percent for the US, 4.6 percent for South Korea, 7.9 percent for Singapore, 3.7 percent for Thailand, 2.7 percent for Germany and 2.8 percent for Britain.

The report said domestic demand has been strong in India for several years and that, unlike the US, the consumer in India was not credit driven to reflect that it is a high-savings economy with rising foreign exchange reserves.

'Several economies are boosting export in non-traditional areas such as services and labour. India's service sector has captured the most press,' it stated. 

'Exports of software and business services, such as call centres, accounted for nine percent of gross domestic product growth over past three years - a striking figure for such a large and domestically-oriented economy.'

Merrill Lynch said its view on Asian fundamentals was admittedly bullish even as it expected a lasting slowdown in the US economy, led by the housing sector and consumer behaviours.

'But the spill-over to the real economy in Asia is much less. And the positive cyclical and structural forces we see in Asia and the rest of the world provide some offset,' the report said.

'Although there may be downside risks to regional growth in 2008, we expect it to remain above 7-7.25 percent. As a comparison, Asia grew only 5.1 percent in the downturn of 2001.'

Terming it as its 'strongest views', the report said the growth risks in Asia were limited since its economies were less vulnerable to a financial sector shock, adding the focus would remain on infrastructure and urbanization.


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## Bushroda

*Sky Bus: A solution to transport problems*

http://imageshack.us

http://imageshack.us

http://imageshack.us

*New indigenously-developed technology awaits law maker's nod *
By Armstrong Vaz, Qatar

Doha August 20: On one hand the progress chart of India has been hailed but the benefits have not percolated to the lower strata of society. The Sky bus project which is path breaking indigenously-developed technology is one example of the slow pace things move in the Indian democracy. 

Indian infrastructure is facing the problems which any surging economy faces in its transitional phase. With rapid growth on the economic front, Indian transport system is trying to have grip over the situation, what with crammed roads, overcrowded trains and buses, being a usual scene in the metros and the major cities of the country. 

The Sky Bus transport was taunted as one of the solution to ease the load on the congested traffic lines of the Indian metros. That was almost three years back when the railway minister dedicated the modern rail transport system technology to the world when federal Railway Minister Lalu Prasad Yadav dedicated the Sky bus project to the nation on October 15 2004 in the western Indian state of Goa.

But in the intervening period, since October 2004 the project has been caught in a dilemma with the indigenously-developed Sky Bus technology awaiting a nod from federal law makers on whether it should be introduced in India. 

"My biggest problem is that the railway ministry has not been able to decide whether the skybus is a train or a bus. In fact, the skybus is ready for commercial use but for policy constraints," B Rajaram, the former managing director of Konkan Railway Corporation (KRC), had said before his retirement in Jan. 2005. 

Sky Bus transport- what is that - is that is the immediate question which shoots up. 

The Sky bus is essentially a fusion of a bus and a train. Its carriage looks like a bus, but it runs like a train, and instead of the compartments running on rails, they hang below the rails and slide 10 metres above the regular road traffic. 

The new technology innovation is Rajaram's baby and he holds patent rights for it in the US. 

A second, KRC Managing Director Dr K K Gokhale retired recently and he had these to say about the pending sky bus project which is awaiting the light of the day. 

"The Union Cabinet has informally cleared a proposal to bring in legislation. But, the Bill is yet to be placed before Parliament to make it a law," he has said last month. 

Contrary to the views of its managing directors, the Konkan railway website mentions that - Sky Bus metro falls under tramway category, under Art 366(20) of Constitution of India, since it operates along existing roadways and within municipal limits, hence excluded from Indian railway act. 

The former MD of KRC Rajaram has been vocal in propagating sky bus as the one of the solution to decongesting the cities. "At Rs.50 crore per kilometre, it will provide the same services at one-fourth the cost of the Delhi metro. Unlike the metro, the skybus follows existing roads, thus reaching into the very heart of the city while decongesting the roads. Moreover, it can be implemented and commissioned within two years," he says.

The two-coach Skybus has a capacity for 300 passengers on a single trip and depending on the number of coaches, it is expected to handle 18,000 to one lakh passengers per hour.

But concerns over safety issue have been the major fears of the railway ministry on this untested technology and not so keen attitude to push things and they fear a black lash from the public if something goes wrong. 

And the testing of the technology has come at the cost of human life and that's where the concerns of safety have been raised. On September 25, 2004 during a test run, the sky bus over sped and hit a pole- one died and two others were injured. 

"The accident most likely occurred because the bogey was heading at a higher speed than it should have. Also it oscillated to a higher degree than we had expected," KRC MD B Rajaram reported at that time. 

The Skybus does not really need a driver or an operator. When the Skybus approaches a station, it is supposed to slow down by itself and stop. The brake is only for emergency usage. In this case, the Skybus did not slow down, and the Control room threw the emergency brake which resulted in the accident. The accident happened on the 1.5 km test track in Goa. 

Each part of the Skybus was made in India by contractors and corporate's like the Tatas and Essar provided construction material free or at nominal rates to Konkan Railway for building the test track in Goa.

The KRC has spend Rs 50 crore on this project at the 1.5 km testing laboratory at the Margao railway station, in Goa, as the new technology awaits a nod for its commercial use. 

"Skybus is the story of Indian industry and entrepreneurs coming together to produce a unique thing," Rajaram had said.
Till then, the unique Indian innovation awaits the nod from the Indian law makers, on whether it will be best suited for commercial use or it will just rust out on the Goa tracks. 

*Why Sky Bus is an ideal solution according to KRC:* 


Follows the existing roads- but does not take road space- and be as flexible as a bus 

Have rail based mass transit capacity, same as existing rail metro 

Does not divide city while providing integration along its alignment 

Be derailment and collision proof- with NO CAPSIZING of coaches- so that there can never be loss of life 

Be free from vandalism 

Noise free and pollution-free 

Non-invasive -requiring the least amount of scarce land space- and not come in the way of development.

*Salient features of the Sky Bus*


Heavy 52/60 kilograms /metres rails placed at standard gauge floating in elastic medium and damped by inertia of measured mass held in a 8 metres X 2metres box enclosure, supported over a 1m diameter. columns spaced at 15 metres and located at 15 metres distance from each other, in the divider space in between lanes on a road- way, at a height of 8metre above road surface- provides the support and guidance for powered bogies which can run at 100 kmph, with the coach shells suspended below, carry passengers in air conditioned comfort, can follow existing road routes, while existing traffic on roads continue. 

Aesthetic and eco-friendly, the Sky Bus can never derail, capsize nor collide- by design as well as by construction, hence is safer than existing rail-based system. 

With no signaling and having no points and crossings, it is a unique mass-transit system, which can be put up within two years in any crowded & congested city. 

Sky Bus metro falls under tramway category, under Art 366(20) of Constitution of India, since it operates along existing roadways and within municipal limits, hence excluded from Indian railway act.


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## Bushroda

*Skilled Indian workers shunning Bahrain jobs* 
By MARK SUMMERS
Gulf Daily News, Bahrain

MANAMA: India's booming economy could have severe consequences for Bahraini firms as skilled Indian workers stay home for better wages, experts have told GDN.The former president of the Bahrain-based Kerala Engineers Forum and consultant at a top engineering firm T M Haridasan has already revealed shortages of engineers are leading many firms to increase their prices to customers in order to offer better salaries - a practice he said is becoming necessary in a number of fields including IT and healthcare.

"We are facing a lot of problems nowadays - not on the unskilled side where the payment is less but on the skilled side.

"I currently have a requirement for about 12 engineers in Bahrain in various fields. Also in the IT field, the payment is good back in India.

"Many Indians are simply not willing to come to the Gulf now - we went there and offered them (jobs) but the payment structure here is not attractive and expenses are rising very sharply. If companies are ready to pay more then they may opt for that," he explained.

Mr Haridasan said Bahrain's policy of pegging the dinar to the US dollar was not helping matters.

"The present situation is the dollar has devalued a lot but the Bahrain currency is still pegged with the dollar and that also affects us and means I am losing around 15 to 20pc of my income.

"In India it was 47 rupees for a dollar and now it is less than 40 - but here it is still pegged with the dollar and I don't get to take advantage of that benefit. Only Kuwait has been bold enough to come out and revalue their currency against the dollar - and the expatriates there are getting the benefit of that," he said.

He also revealed as the numbers of Indian workers coming to the region starts to dwindle shortages of skilled workers is forcing those currently in the Gulf to shuttle between locations as and when their expertise is needed.

"Those are in the Gulf are shuttling between. They are switching from Dubai to Bahrain and Bahrain back to Dubai. But new entrants in the Gulf are very limited in the promotional and technical fields because India is fast developing in these areas - even in the construction field people are getting good offers as well as other benefits and they have the advantage of working in their own country," he said.

Such shortages are starting to impact on the bottom line of many firms in Bahrain, he said.

"There is a knock on effect as workers raise wages to try and tempt workers - in our industry we have a situation we have an escalation in our tenders of 20pc compared to two years back," he said.

Labour Ministry assistant undersecretary for training Ahmed Al Banna also acknowledged attracting skilled Indian workers was proving more difficult - but said this situation would offer more opportunities for Bahrainis.

"We have difficulties in technical areas - accountants, IT technicians, engineering, quantity surveyors, and in the ministry we have a lot of problems providing civil engineers for companies," he admitted.

"In the coming period there are a couple of issues going to take place in the job market which are going to provide opportunities for Bahrainis.

"In India, they are trying to upgrade salaries and this could lead to a scarcity of Indian nationals in the fields of IT, healthcare, engineering, and accountancy.

"What is happening with regard to the work permits in Bahrain, with the new LMRA taking over will start a new trend. The Labour Fund is working hard in investing more money in the development of Bahrainis. All these issues plus the demand with the continued growth of the economy will make some of these jobs really attractive to Bahrainis and there will be more opportunities for Bahrainis to take over from Indian workers," he said.

However, he acknowledged that among some Bahrainis there was little understanding of the rewards that some technical disciplines could offer.

"If you look at the unemployed, if you break them down, there are not many university graduates and if there are they are in the humanities fields not engineers and accountants and so on.

Bahrainis have to be very aware - normally when we tell them about the technical programmes they just see the job of a technician. But if you start as a technician you might be a GM one day," he said.


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## Bushroda

*We can't afford to miss New Delhi express*
Greg Sheridan 
The Australian, Australia
August 20, 2007 

*AUSTRALIA'S turn towards India is as important and nationally defining as were the pioneering of a trade relationship with Japan in the 1950s and the opening towards China in the 1980s.*

It is the new frontier of Australia in Asia, and its potential is vast. Unlike Japan, India is not a former enemy. Unlike China, India is a parliamentary democracy. Then there's cricket. 

India lies at the heart of all the great issues of our time -- globalisation, the fight against entrenched poverty, global warming, the fight against Islamist extremism, nuclear weapons proliferation, democracy in Asia, democracy in poor countries. 

Geographically, India's surging economy, military strength and huge population -- it will in a few short years overtake China as the world's most populous nation and its age profile is substantially younger than China's -- makes it a strategic player in South and Central Asia. It is increasingly engaged in the Middle East and, of course, in East Asia. 

If India, already a global leader in IT, pulls off its peaceful nuclear co-operation deal with the US, it will leap ahead even further in technology transfer.
India has undergone a domestic and foreign policy revolution every bit as profound as that which China has undertaken since 1979. 

But there is less intellectual glamour in studying the open, accessible, necessarily untidy processes of Indian democracy than there are in apparently unlocking the gnostic secrets of Sinology, so the Australian foreign policy commentariat is way behind the curve on India and its growing economic and strategic importance. 

This is why one of the federal cabinet's most promising decisions is to fund a full-scale Indian studies centre at an Australian university. 

There are already some good university resources devoted to studying India but they need a massive infusion of resources if Australia is to have the intellectual firepower to match its national needs. 
Similarly, the Government has decided to increase consular resources in the southern Indian city of Chennai, and to increase diplomatic resources to India generally. This should be followed by an immediate decision to make Hindi a priority language in the Department of Foreign Affairs and Trade. 

All of this presents a serious dilemma for Labor. The most important part of our new engagement with India will be selling India uranium for its peaceful nuclear industry. 

Labor's anachronistic opposition to this, on the mistaken basis that it will weaken nuclear non-proliferation even though India has never engaged in any nuclear proliferation to a foreign nation, puts it against a fundamental interest of Australia in Asia. 

It is as though Labor has reversed what it believes are the historic positions of itself and the Coalition. Now Labor is standing against a fundamental new engagement in Asia which the Coalition is championing. 

This partly results from Labor being so long in Opposition, which breeds a reliance on ideology rather than being fully in touch with the world as it really is. It also tends towards opposition to any change to the status quo. 

But the Indian express is leaving the station. The only good place for us is on board.


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## alamgir

China BPO to overtake India: Nasscom 

PTI[ TUESDAY, AUGUST 21, 2007 04:59:32 PM]

Surf 'N' Earn -Sign innow 
NEW DELHI: China could overtake India as the most preferred outsourcing destination in the next 3-5 years on the back of an educated workforce coupled with strong government emphasis on IT-BPO sector, according to a study. 


"The IT-BPO industry in China is still in its early phase of evolution but it has the potential to develop a large IT-BPO industry," the study on 'Tracing China's IT Software Services Industry Evolution' by industry body Nasscom said. 

The software and services revenues in China is estimated to grow at 22 per cent to reach 28 billion dollar by 2010 including domestic market at over 20 billion dollar, the study said. China has recorded 12.3 billion dollar of revenues in this sector in 2006. 

India's IT software and services revenues are likely to reach $50 billion in 2007-08, according to Nasscom. The current industry landscape in China bears some resemblance to earlier years of Indian IT-BPO industry but systemic weaknesses and comparatively evolved demand and competitive environments are some of the challenges. 

Nasscom also suggested a collaborative partnership between Indian and Chinese companies. 

Nasscom President Kiran Karnik said that the Indian expertise in IT sector combined with manufacturing dominance of China could be one of the possibility for a partnership. 

Indian IT-BPO exports are mainly serving the US and the UK markets, which together account for over 80 per cent of the total exports. 

On the other hand, China's key export market areas are Japan and Korea, where it has certain inherent linguistic/cultural advantages, the survey noted. 



It&#8217;s Indiatime


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## Bushroda

*Indian Pharmaceutical Companies Have Demonstrated That They Possess the Ability to Engage in Commercially Viable Research and Development Activities* 
BUSINESS WIRE
DUBLIN, Ireland

Research and Markets (Indian Pharmaceutical Industry SWOT Framework Analysis - Market Research Reports - Research and Markets) has announced the addition of Indian Pharmaceutical Industry  SWOT Framework Analysis to their offering. 

The Indian pharmaceutical industry is one of the fast growing sectors of the Indian economy and has made rapid strides over the years. From being an import dependent industry in the 1950s, the industry has achieved self-sufficiency and gained global recognition as a producer of low cost high quality bulk drugs and formulations. Leading Indian companies have developed infrastructure in over 60 countries including developed markets like US and Europe. In the recent past, several pharmaceutical companies have demonstrated that they possess the ability to engage in commercially viable research and development activities and become significant players in the international market. 

SWOT Analysis, is a strategic planning tool used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favourable and unfavourable to achieving that objective. 

The aim of any SWOT analysis is to identify the key internal and external factors that are important to achieving the objective. SWOT analysis groups key pieces of information into two main categories: 

Internal factors  The strengths and weaknesses internal to the organization. 

External factors  The opportunities and threats presented by the external environment.


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## Bushroda

*India Software Trade Group Eyes Chinese Competition*
Ruth David
FORBES, NY
08.22.07, 5:17 AM ET

Amid a slew of global reports on Chinas growing attractiveness as an outsourcing destination, Indias top technology trade group has warned in a report that the country needs better infrastructure and educational facilities if it wants to stay ahead of China. 

"While India continues to be the most favored destination--by far  we need to ensure that we maintain this position in the years to come. This will require a favorable policy and tax environment, a huge thrust in education and human resources and vastly better infrastructure," said Kiran Karnik, president of the National Association of Software and Service Companies, known as Nasscom.

Software and services is still a fledgling sector of the Chinese economy, accounting for about 0.5% of the countrys GDP in 2006, with estimated sales of $12.3 billion. By contrast, the Indian industry racked up sales of $39.6 billion last fiscal year, accounting for 5.2% of GDP.

Chinas technology market is heavily tilted toward hardware, which accounts for 90% of business.

"The Chinese information technology sector is a matter of concern for India," acknowledged Karnik. "However, it cannot be considered a threat." Chinas industry is still in an early phase of evolution, and frequent comparisons with India and "commentary positioning China as a substitute destination is quite misplaced," said the report released by Nasscom.

"Chinas growth is being driven by its domestic market while India is a predominantly export led growth story. The scale of the overall sector in China is still less than a third of that in India," it said.

Theres tremendous potential in China, but it first needs to overcome challenges like lack of global recognition, complex tax and investment incentive systems across different provinces, highly restrictive financial systems and intensifying regional competition, Nasscom found.

Chinas domestic market accounts for more than 85% of sales, making its software and services exports less than a tenth of those from India. With both countries witnessing strong and continuing growth, it is unlikely that this differential will go away in the foreseeable future, the report suggested.

But India could take a leaf out of Chinas book. "Chinas systematic and planned approach to rapidly developing key sectors of its economy and especially its strong focus on education and infrastructure offer [lessons] that may be usefully adapted to the Indian context," Karnik said. 

Indian software majors predominantly do business in the U.S. and the U.K. markets, which together account for more than 80% of its total exports. By contrast, Chinas critical export markets are Japan and Korea, where it has certain inherent linguistic and cultural advantages, the report noted. "There is a strong case for increased partnership between the two countries as global corporations strive to strike a balance in their Sino-India co-sourcing models."


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## Bushroda

*Dedicated railway freight corridor enters crucial phase*
22 Aug 2007, 0939 hrs IST,PTI

NEW DELHI: The Indian Railways is trying to put the much-touted Rs 28,181 crore dedicated freight corridor (DFC) project on track amid roadblocks. 

The Japanese International Cooperation Agency (JBIC), which has agreed to provide about Rs 18,000 crore for the construction cost of the proposed 2,763-km freight corridor, has raised questions about the technology to be used and the cost of the project in its interim report submitted to the railway ministry. 

The DFC project aims to link Delhi, Mumbai and Kolkata with high speed connectivity for exclusive freight movement. The project consists of 1,483-km Delhi-Mumbai route, also known as western corridor and 1,280-km Delhi-Kolkata route, known as eastern corridor. While the construction of the western corridor is estimated to cost Rs 16,592 crore, the cost of building the eastern corridor is estimated to cost Rs 11,588 crore. 

While the railways want to run double stacked containers in Delhi-Mumbai corridor by diesel locomotive, the JBIC has suggested electric locomotives because it is environment-friendly. The JBIC has also estimated in its interim report, the total cost of the DFC at a whopping Rs 50,000 crore, almost double than the railway's estimate. 

"We have received the interim report of the JBIC in which they have raised certain issues. We are examining it and we would respond to it accordingly. Anyway it is only an interim report and the final report would be submitted in October only," RN Verma, Advisor, Railway Board (Infrastructure), said. 

The JBIC is also not in favour of double-stacked containers to run on the western sector while for Indian Railway it is a key component of the project. 

While the eastern corridor is to carry mostly iron ore and coal, the western corridor is meant to carry high value goods for which double stacked containers are the best medium. 

The Railway Ministry has already got the approval for the DFC from the Cabinet Committee of Economy Affairs. Railways aims to carry 785 million tons of revenue earning traffic this year and expects to carry more than 1,100 million tons of freight traffic by the end of the 11th Five-Year Plan. 

The railway has run the double stacked containers in the 800-km Mundra-Jaipur link on a trial basis and it wants to extend the operation in other sectors as well. 

"The project is definitely on as the government is committed to constructing dedicated freight corridor for speedier movement of goods trains between major cities," Verma said adding "we have already completed the final location survey for 600-km of the project." 

While the proposed eastern corridor is to connect Ludhiana with Sonanagar via Ambala, Saharanpur, Khurja and Allahabad in the first phase and later extend to Kolkata, the western corridor will start from Tughlakabad connecting Rewari, Jaipur, Palanpur, Ahmedabad, Vadodara and finally Jawarharlal Nehru Port in Mumbai. 

Development of exclusive freight corridor for carrying additional traffic is essential in view of high growth in demand. The high density network of Delhi-Mumbai and Delhi-Kolkata has got saturated at most locations. The dedicated corridor would increase the traffic and also the speed of goods trains. 

Industrial development particularly in the eastern sector is likely to generate enough transport demand. For example, production of steel is likely to go up from the present level of 33 million tons to 100 million tons in the next 15 years. The finished steel from eastern region is likely to flow to other regions.


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## Contrarian

Happy feet, Neo did not ask you to stop posting here man, why have you stopped??
We'r missing your posts here dude!


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## Bushroda

OK!! relax guys. I havn't abondoned the efforts to keep updating the section. Just that I have been caught up in some thick of things at the office. Still I've updated here as recently as 6 days back. Check the dates.


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## Bushroda

*SAP doubles India clients, reaffirms investment plan*
By Unni Krishnan 
Reuters, UK
Tue Aug 28, 2007 3:23 AM BST

NEW DELHI, Aug 28 (Reuters) - Software maker SAP AG (SAPG.DE: Quote, Profile, Research) said on Tuesday it has doubled its number of customers in India to 2,000 in the past year, and reaffirmed that it planned to invest $1 billion in the country by 2010 to boost growth. 

SAP, the world's biggest maker of business software, said India and China would play a central role in its drive to sign up 100,000 customers by the end of the decade. 


"Markets like India are at an inflexion point when it comes to the adoption of technology by businesses of all shapes and sizes," Henning Kagermann, chief executive officer, said in a statement. 

"For instance, it took us nine years in India to reach the 1,000 customer mark and only one to double it." 

The German group generated about 13 percent of total revenue in the Asia-Pacific region in the second quarter to the end of June, well behind Europe's 52 percent contribution and the 35 percent in received from the United States. 

In August last year, SAP, which competes against its United States-based arch-rival Oracle (ORCL.O: Quote, Profile, Research), had said it would invest $1 billion over the next five years in the fast-growing Indian market to expand operations and double its headcount. 

SAP's planned investment underscores the growing importance of Asia's third-largest economy as a global hub for technology outsourcing and research for multinational companies like IBM (IBM.N: Quote, Profile, Research), Microsoft Corp. (MSFT.O: Quote, Profile, Research) and Intel Corp. (INTC.O: Quote, Profile, Research). 

Companies like SAP and IBM also vie with Indian firms for a share of outsourcing deals from domestic banks, small- and medium-sized enterprises and government departments.


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## solid snake

That skybus transport option looks nice. If the saftey standards can be met, it would be a good choice to solve some of the traffic congestion problems.


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## Bushroda

SolidSnake, this is for you

At the moment a Skybus prototype is running in Goa on a 1.5km long testrail. Safety procedures are being developed.

This is a National Geographic documentary(dubbed in Hindi). If you are unable to understand Hindi it speaks about the principles on skybus works. It is similar to conventional rail but is upside down and hangs 10 metres above the ground thereby avoiding any bloackades. The designer speaks of the safety approach which is much safer than conventional rail. The average speed is 100km/hr and the lines can carry container and cargo cars aswell.

[YOUTUBE]





Here is the presentation by the Skybus designer himself
[YOUTUBE]




Another one. 
[YOUTUBE]


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## Contrarian

Do you know when Skybus will properly start running in Goa? I know why it was stopped, the accident during the test run, i went to Goa as well. But do you know when the safety tests will end and services actually start?

They eventually plan to connect north and south goa with it.


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## Contrarian

Bushroda said:


> OK!! relax guys. I havn't abondoned the efforts to keep updating the section. Just that I have been caught up in some thick of things at the office. Still I've updated here as recently as 6 days back. Check the dates.



6 days is a long time not seeing your updates here happy feet!

Anyway, i have a request for you. COuld you please post the actual day to day plans and business expansions about Indian economy, what you normally post are generic articles and analysis's. for example in TOI's website, they post the daily business news.


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## Bushroda

Malay, its hard to keep a tab of each & every news item. Also this being a Pakistani forum, I doubt if general readers would be too keen on knowing the daily rates of onions, potatoes in the local mandi. I only try to post articles that show the general direction of the Indian economy & cover the core economic disciplines primarily being IT, Biotech, large scale manufacturing, retail. Indian economy is so diverse that we would probably need a section for everything not to mention Infrastructure, finance, investment, banking. But then it would be too hard to maintain so many threads. But, if anybody is following the thread from the first post he'll get a basic idea about the developments happening. I remember I briefly posted every news development of Tata-Corus deal in the last Indian economy thread here. I have tried to do the same for all major developments but one has to dig in for the posts.


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## Bushroda

*Indian Tech firm to bring 500 jobs to Atlanta*
By MARIA SAPORTA, DAN CHAPMAN
The Atlanta Journal-Constitution, US
08/27/07

For critics of U.S. jobs outsourced to India, Azim Premji â oddly enough â may be your new hero.

Premji, who has spent most of his career building a leading technology conglomerate in India, came to town Monday to announce a reversal of fortune: his Bangalore, India-based company, Wipro Technologies, plans to locate 500 to 1,000 jobs in metro Atlanta within the next three years.

Better still, economic development officials say the kinds of jobs envisioned â software developers and engineers â are just what Georgia wants.

"These are exactly the right kind of jobs we've been working on for a number of years," said Hans Gant, a senior vice president for the Metro Atlanta Chamber of Commerce. "And Wipro is exactly the right kind of global company we have been trying to recruit. This could open the door to other companies from India."

The Wipro announcement is the latest globalization wave to hit U.S. shores â the so-called "in-sourcing" of jobs that the United States lost over the last decade and didn't expect to regain.

Blue-collar work was the first to go as the auto, steel and textile industries shifted jobs to China, Korea and India. A tsunami of white-collar, back-office jobs â information technology, software design, call center operations â have disappeared from the United States since the turn of the 21st century, again finding low-wage homes in Asia, primarily India.

Now, the Indians are repaying the favor. Altruism, though, plays no role.

Stung by wage inflation for engineers in Bangalore, and no longer beneficiaries of a cheap rupee, India is now acquiring U.S. firms and establishing manufacturing and research centers across the country.

Premji, Wipro's chairman, said the company chose Atlanta for its first new global software development center after considering 600 locations in the United States.

"We got a little carried away," he said. Wipro weighed the presence of colleges, airline access and retired military personnel with valued technological skills as key factors.

"For a center in the United States and Europe to build efficiencies, it must have a minimum critical mass of 500 people," Premji said, adding that Wipro already has other smaller centers working for individual customers in the United States.

"For the Georgia center, we want it to be broader," he said. "We are looking forward to getting this thing kicked-started as quickly as possible."

Wipro, which is working with Georgia's Board of Regents and its job training program, already has started collaborating with Kennesaw State University and Southern Polytechnic State University. But the company said it has not yet selected the metro location.

"We'll be doing that in the next two to three weeks," Premji said. Wipro also is considering Texas and Virginia for similar centers, and the intent is to have a total of three in the United States.

Wipro already holds a stake in the U.S. market. Earlier this month it bought New Jersey-based Infocrossing Inc. â itself an information technology outsourcing firm.

The Metro Atlanta Chamber and the Georgia Department of Economic Development have been courting Wipro for four years.

The company first came to the attention of economic development officials through Jagdish Sheth, a professor of marketing at Emory University's Goizueta Business School. Sheth serves on Wipro's board, and he has been an advisor to Premji since 1985.

"For the first time, this shows that it's not going to be sufficient to take the work to India," Sheth said. "We have to invest in the United States."

Premji said Wipro clients include about 600 of the Fortune 1000 companies. AGL is one of those clients as is Delta Air Lines, the Coca-Cola Co. and BellSouth, which has been acquired by AT&T.

Wipro has about 6,000 employees scattered around the United States and 80,000 worldwide. The company says its customers are primarily Fortune 1000 companies. Premji said Wipro will have revenue of about $4.5 billion this year.

But metro Atlanta will not become Wipro's U.S. headquarters, at least for now. Despite urging from Sheth, the company recently relocated its U.S. headquarters from California to New Jersey.

"Their North American headquarters ought to be in Atlanta," Sheth said. "It's going to start more Indian companies locating in Atlanta. As many as 10 to 11 large corporations will probably put their North American headquarters in Atlanta."

For example, Mahindra & Mahindra, an Indian manufacturing conglomerate, hopes to sell SUVs in this country by 2009. An Alpharetta auto distributor holds the rights to sell the vehicles.

"India's economy is now getting into the next phase," said Ash Thakker, chairman of the Georgia Indo-American Chamber of Commerce. "It is truly becoming a two-way type of trade. It's jobs, revenues, goods and services for both India and the United States."

Similar to Japanese and Korean automakers, Indian software companies need to be closer to U.S. markets. Korean automaker Kia, for example, broke ground last year on an assembly plant in LaGrange. Even China â a competitor to India's economic ascendancy â announced in May it would build an electronics factory in Barnesville.

Yet India's entry into the lucrative U.S. market takes a different turn than its fellow Asian tigers.

"Usually, from a historic perspective, manufacturing was the path followed by Japan, Korea and China," Thakker said. "However it was the information technology, and other service-oriented type of economy, that has been launched by India."

Georgia and India are no strangers. In 2005, the U.S. Census Bureau pegged the number of Indians in Georgia at 79,169. The Georgia Department of Economic Development is considering opening a trade office in India by 2009.

Wipro's foray into the United States, though, may ultimately harm the overall U.S. economy, according to the Economic Policy Institute. Last week, the think tank reported that 600,000 U.S. jobs disappeared at foreign-owned companies between 2000 and 2005.

"There's no doubt some jobs will be created, but who are they putting out of business with the products they're selling to the U.S. business community?" said institute economist Robert Scott. "For the first time we're seeing the process of in-sourcing eliminating domestic jobs."


----------



## Bushroda

malaymishra123 said:


> Do you know when Skybus will properly start running in Goa? I know why it was stopped, the accident during the test run, i went to Goa as well. But do you know when the safety tests will end and services actually start?
> 
> They eventually plan to connect north and south goa with it.



Malay, your answer is here in this post

http://www.defence.pk/forums/95219-post764.html

For everything that our engineers want, government is ready to show the middle finger be it Konkan Railways or DRDO.


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## Bushroda

*Germany's SAP to invest $1B in India* 
Agence France-Presse
08/28/2007

BANGALORE, India--German software giant SAP said Tuesday it was proceeding with plans to invest one billion dollars by 2010 in India, where it doubled its corporate customers in just one year.

The company has designated India a strategic hub and said a major portion of the investment would go towards expanding its global services and support centers in Bangalore and Gurgaon, a New Delhi suburb.

The Indian operation is the largest research and development hub and support center outside Germany for the Walldorf-based firm, which is adding clients at a record pace in the world's second-fastest growing economy.

"Markets like India are at an inflection point when it comes to the adoption of technology by businesses of all shapes and sizes," chief executive officer Henning Kagermann said in a statement.

"It took us nine years in India to reach the 1,000 customer mark, and only one to double it," added Kagermann, who has brought SAP's entire executive board on its first visit to the country.

The visit reflects the rising importance of the country to SAP "both as a vibrant market as well as a technology development and services-support delivery center," the company said.


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## Bushroda

*Those outsourced jobs are coming back, but now the boss is in Bangalore*
John Murrell
SiliconValley.com, CA

After years of watching U.S. jobs flow to the cheaper labor markets of Asia and India, were starting to see some backwash. Wipro Technologies, the global services arm of Indian outsourcing company Wipro Ltd., announced plans Monday to open a software development center in Atlanta that will employ 500 people within three years and may grow to double that. The positions will be for engineers and software developers, and Wipro and Georgia are working together to make sure that local talent gets hired.

Wipro, facing wage inflation for engineers and unfavorable currency conditions, picked Atlanta after looking at 600 sites in the U.S. (We got a little carried away, said Chairman Azim Premji), basing the choice on factors like the presence of colleges, airline access and retired military personnel with valued technological skills. Working with Georgias Board of Regents and its job training program, the company already has started collaborating with Kennesaw State University and Southern Polytechnic State University. Georgia had been courting Wipro for four years, largely thanks to the efforts of Jagdish Sheth, a longtime adviser to Premji who sits on Wipros board and is also a professor of marketing at Emory Universitys Goizueta Business School. Said Sheth, For the first time, this shows that its not going to be sufficient to take the work to India. We have to invest in the United States.

The work were doing requires more and more knowledge of the customers businesses, and you want local people to do that, said P.R Chandrasekar, president of Wipro Tech. The Atlanta center is an investment that will help Wipros existing customers as well as help address new business opportunities. On the drawing board are two more U.S. centers, possibly in Texas and Virginia. Indias economy is now getting into the next phase, said Ash Thakker, chairman of the Georgia Indo-American Chamber of Commerce. It is truly becoming a two-way type of trade. Its jobs, revenues, goods and services for both India and the United States.


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## Bushroda

*Business software maker SAP says customers in India doubled in past year*
International Herald Tribune, France
August 28, 2007

NEW DELHI: SAP AG, the world's largest business software maker, said Tuesday it has doubled its customers in India to 2,000 in the past year, driven by demand from small and medium enterprises.

The German company also announced a partnership with Indian outsourcing company Wipro Ltd. to jointly conduct sales promotion programs and implement SAP's software applications in mutually agreed regions and markets.

SAP aims to reach 100,000 customers worldwide by 2010, of which 15,000 would be in India.

"The unprecedented growth that we are seeing from India is one of the best examples of how our 2010 strategy translates into action," said Chief Executive Henning Kagermann.

Growth in countries like India and China will be crucial to SAP's long-term goals, Kagermann said.

"Markets like India are at an inflection point when it comes to the adoption of technology by businesses ... it took us nine years in India to reach 1,000 customers, and only one (year) to double it," he said.

India's economy is growing close to 9 percent annually and businesses here are increasingly adopting modern technologies.

SAP makes software for payroll, client orders and other business processes, competing against companies such as Oracle Corp.

In August last year, Kagermann announced an investment of about US$1 billion in India by 2010 to expand research facilities and tap more customers.

The Walldorf-based company has since designated India as its "strategic hub" in the Asia-Pacific region and built a new global service support center in Gurgaon, an industrial town adjoining New Delhi.

The company already operates a research center in Bangalore in southern India.

Under the partnership pact with Wipro, the Indian company will set up a new laboratory at SAP's existing research center. That laboratory will be used for testing SAP software and conduct joint innovations, a Wipro statement said.

Scores of companies in the United States and Europe are increasingly shifting software development and research work to India, where technical workers are available at much lower wages.


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## Bushroda

*Myanmar, India finalizing river transportation project *
People's Daily Online, China
August 28, 2007 

Myanmar and India are in the process of finalizing a river transportation project and once it is formally endorsed by both sides, the project will start implementation, local media reported Tuesday.

The Kaladam multi-modal river transportation project, which also involves the building of the Paletwa border road, was raised during Indian President APJ Abdul Kalam's state visit to Myanmar in March 2006 with the Indian side being committed to extend a 10 million U.S. dollars' line of credit for the project.

The Kaladam project will cover upgrading of waterways along the Kaladam River and Sittway port in Western Myanmar's Rakhine state, the Flower News said.

Besides, the project will also cover upgrading of both motor roads and waterways in those parts in northwestern Chin state to enable Indian cargo vessels along the Kaladam river in Sittway's eastern bank to berth at Paletwa where a high-standard port is to be built through which a highway will also be built to enable access to the border area of Myeikwa in the state for commodity flow to India's Mizoram state, the report added.

Meanwhile, proposed by India, Myanmar is also making feasibility study to build a deep-sea port in the country's southern coastal Tanintharyi division to facilitate maritime trade with neighboring countries.

The prospective Dawei deep-sea port project stands one of the priorities among future programs of the seven-member Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation ( BIMSTEC) which now comprises Bangladesh, India, Myanmar, Sri Lanka, Thailand, Bhutan and Nepal.

Moreover, Myanmar is also conducting survey to build still another deep-sea port on the Maday Island in Kyaukphyu, western coastal Rakhine state, to serve as a transit trade center for goods destined to port cities of Chittagong, Yangon and Calcutta.

Relations between Myanmar and India have been growing during the past few years with cooperation in all sectors, particularly in those of trade and economy. The Indian statistics show that Myanmar-India bilateral trade reached 650 million U.S. dollars in the fiscal year 2006-07 which ended in March, up from 557.68 million dollars in 2005-06.

India stands as Myanmar's 4th largest trading partner after Thailand, China and Singapore and also Myanmar's second largest export market after Thailand, absorbing 25 percent of its total exports.

Myanmar figures also show that India's investment in Myanmar had reached 82.57 million dollars in four projects as of the end of 2006, out of Myanmar's total foreign investment of 14.4 billion dollars since late 1988.


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## Bushroda

*Nissan agrees Indian vehicle deal *
BBC, UK

*The Indian motor company, Ashok Leyland, and Nissan of Japan have agreed to form a partnership to produce Light Commercial Vehicles (LCVs). *

They aim to make 100,000 vans a year in Indian factories for both the domestic market and export. 

Correspondents said the deal underlined Nissan's growing commercial interest in India, where demand for vehicles and trucks is rising fast. 

Much of that is because of the country's strong economic growth. 

"Our LCV business and overall expansion into India represent two of the biggest growth opportunities for Nissan in the medium and long term," Carlos Ghosn, Nissan's president, told the Reuters news agency. 

The Japanese firm is eager to increase its presence in India to benefit from relatively low labour costs and an economy growing at around 9% a year.


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## Bushroda

*India  The next superpower?*
Peter Leslie
The Vail Trail, CO
August 29, 2007

*World View*

One hundred and fifty years ago, Indian rebels were massacring British men, women and children in a vicious war of independence, with little mercy shown by combatants on either side. The rebellion was ruthlessly suppressed, the last Moghul Emperor forced into exile, and for the next 90 years the British government replaced the East India Company as rulers of India. 

This month marks the 60th anniversary of the Indian independence that was eventually achieved in August 1947. And since that time, India has been the worlds largest democracy.

Recently, India, the worlds second largest country, with a population of more than 1.1 billion (almost four times that of the United States), joined the trillion dollar club  a club with only 11 other members with economies exceeding this amount. This reflects an economy that has been growing very fast in recent years and is currently growing at an annual rate of more than 9 percent. 

Along with its economic strength, India has the worlds second-largest standing army with a total troop strength of around 2.5 million (1.3 million active and 1.2 million reserve), has nuclear weapons, and the worlds fifth-largest navy that includes one aircraft carrier (and a second under construction). 

The 90 years of direct British rule gave India an excellent network of roads, railways, canals and irrigation works, large-scale capital investments in shipping and mining and well-developed commercial agriculture. An education system in English, English law and a functioning civil service created suitable conditions for the growth of industry and enterprise; and the integration of India into the world economy. 

But Indias economic strength and status as a potential superpower is relatively recent. The first 40 or so years following independence were years of sluggish economic growth.

Following independence, Indias socialist leaders imposed strict government control over private-sector participation, foreign trade, and foreign direct investment. A cumbersome central bureaucracy developed a huge and inefficient public sector, with business regulation, and central planning, import substitution, inept industrialization and state intervention in financial and labor markets.

However, starting in the early 1990s, economic reforms that reduced government controls on foreign trade and investment gradually opened up Indias markets. And the availability of large numbers of English-speaking, highly educated people willing to work for one-quarter the hourly wage of equivalent U.S. workers made India a logical choice for international companies seeking to outsource workers, especially in such fields as call centers, data entry and software development. 

According to consulting firm Cap Gemini Ernst & Young, the average computer programmer in India costs $20 per hour in wages and benefits compared to $65 per hour for a comparably qualified and experience American. 

While large numbers of Indians still live on subsistence agriculture or on starvation wages in the slums of the big cities, there is a growing middle class  estimated at 250 million to 300 million  that shows an ever-increasing appetite for consumer goods. The Indian auto market reached one million cars in 2003-04 and this could easily treble by 2015. Indian manufacturers are going global with multi-billion dollar acquisitions that bring them into the league of Fortune 500 companies; and some are already world leaders in their sectors.

In recent months we have seen numerous cases of poor quality control by Chinese companies necessitating expensive recalls of defective or dangerous products and a ban on exports to the U.S. of certain human and pet foods. This may provide an opportunity for India to build on its large numbers of highly skilled and experienced managers and engineers and a vast pool of low cost, unemployed or under-employed workers. If India can be relied on to sell high-quality products, it could well take advantage of Chinas recent missteps. 

Investing much more in the manufacture of consumer goods for both local consumption and export could help sustain Indias economic growth and provide a major competitor for China. And because Indias population is growing faster than Chinas, we might soon see India as both the largest country in the world and one of the most powerful. 

This possibility has major implications for U.S. foreign policy in Asia and for the balance of power in the region. We are lucky that Indian-U.S. relations have never been better. This and future administrations should ensure that this continues. 

*Peter Leslie is the former CEO of the United Nations Development Office. He lives in Vail.*


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## khanbhai

China is next in line accept it 
i have been to india many times it is just like pakistan same kind of people same type of culture
the only difference is population


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## Bushroda

Amma Yaar, atleast look at who is the author. It ain't from an Indian source. Now, when half the world media speaks of India becoming the next Super-power then it can't be just a hogwash. I know most people out of their insecurity & jealosy would point to the weakest numbers with 300 million poors etc, etc... But still, it isn't that these facts and figures are hidden from the international press. They are just as much aware(or probably more) of India's situation as members here. There are more to this super-power thingy than just having a strong military and sound economics. The fact is even at half the China's GDP India can become a super-power along with China.


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## Bushroda

*Indian hotel industry sees sunny days ahead*
Aveena Lopes/Business & Economy News Bureau
Thursday August 30 2007 03:13 IST 

MUMBAI: : What was previously an industry that was overlooked and underestimated has now got everyone's attention glued to it.

Although surprising for a country that is blessed with natural beauty as well as historical treasures, tourism in India almost always took the back bench which also never gave enough market to hotel industry, but not so in the recent times which has seen quite the contrary.

This is why we see so many global names are scrambling to have their names imprinted on the Indian soil. "The hotel industry is doing extremely well currently and all the sectors of the hotel industry, be it the luxury segment, budget segment or leisure, are doing fine.

Moreover, the industry is doing well not only in the metro cities but also in Tier I and II cities. Since the growth is happening in all the sectors, this augurs well for the industry," says Delyse Braganza, VP, Sales and Marketing, The Orchid.

This growth has a lot to do with tourism, which portrays a bright future with the entire industry expected to grow at astonishing rates of 20-25 percent until 2017. Even reports by World Travel and Tourism Council (WTTC) state that India is expected to be the third fastest growing country in the world in the travel and tourism sphere.

Ashish Salian, Accommodation Manager, Kohinoor Continental Hotel attributes this growth to our growing economy saying, "India's economy is growing at a fast pace complimented by a sudden scope for a large potential of foreign direct investment pouring into the country. Also in terms of manpower, the Indian workforce is noted for their quality service."

The booming economy too has not only done well for the foreign names but even boosted the confidence of the local players as well. The recent positive growth of the Indian rupee against the dollar has the Indian big guns in the hotel industry daring to make notable changes in their ongoing systems.

The Taj Group of Hotels along with its counterpart the ITC Group have both chosen to shift their tariffs to domestic currency rather than their previous dollar tariffs.

This move would help the Indian players right from the luxury hotels, 5 star hotels as well as budget hotels to 'make hay while the sun shines' cashing in on the comparatively stronger position of the Indian rupee. "This a positive move for the industry that will help all the players even the guest house business.

Moreover this move would also see our foreign reserves going up which is obviously good not only for us but for the entire country as a whole," says Ashish. Surely the hotel industry is getting the much needed push. Contrary to sceptic this growth might be here to stay, at least for a long time to come as asserted by Asish.

"We're expecting a resounding performance from the industry for at least the next 10 years with growth rates as high as 10-15 percent every year. This growth would be in terms of the number of people going abroad and returning back as well."

With every indication pointing only towards growth, and a positive demandsupply relationship building up, Indian customers can look forward to a whole lot of pampering because our industry certainly looks geared up for it!


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## Bushroda

*India's GDP grows 9.3 pc in Q1*
31 Aug 2007, 1203 hrs IST,PTI

NEW DELHI: Continuing the upswing on the strength of the good showing by manufacturing sector, the economy grew by 9.3 per cent during the April-June quarter of the current financial year. 

Even though the growth in the first quarter is marginally less than 9.6 per cent recorded during comparable period last year, the economy has done commendably well as it comes on top of high 9.4 per cent growth recorded during 2006-07. 

As per the data released by the government on the performance of the economy, the manufacturing sector grew by 11.9 per cent which is lower than 12.3 per cent recorded during the first quarter of 2006-07. 



> *Indian economy grows 9.3 percent in Q1, beats forecasts*
> ABCmoney.co.uk, UK
> Published : Fri, 31 Aug 2007 08:23
> 
> NEW DELHI (Thomson Financial) - India's economy expanded by 9.3 percent in the first quarter, beating forecasts, underpinned by strong performances by industry and services, official data released Thursday showed.
> 
> The first-quarter growth topped analysts' expectations of 8.9 percent expansion and outstripped growth of 9.1 percent in the previous quarter.
> 
> India has the fastest-expanding major economy after China, fuelled by an increasingly high-spending middle class.
> 
> The drivers of the economy are 'consumption led -- rising incomes and a growing middle class,' said Deepak Lalwani, partner at London investment house Astaire and Partners.
> 
> The latest figures reflect robust industrial production, sustained growth in services and a solid farm performance, economists said.
> 
> The economy could be impacted from the next quarter onwards by monetary tightening, they said.
> 
> The central bank, which expects growth of 8.5 percent, began tightening monetary policy in 2004 to tame prices.
> 
> Inflation is currently at 4.1 percent, well below the central bank's 5.0 percent annual target and down sharply from a two-year peak of nearly seven percent in early 2007.
> 
> Some analysts have said the central bank could start cutting rates towards the end of the year as long as there is no flare-up in inflation.
> 
> Many said India's solid industrial and service sectors will protect the economy against a major hit from the global liquidity squeeze triggered by the US subprime credit crisis.
> 
> The exposure of the Indian banking sector to the subprime woes is limited, they said. But some warned that the subprime turmoil could cause a 'significant' slowdown if it persists for more than a few months.
> 
> They said the acceleration in Indian growth over the past few years has been primarily driven by a favorable sustained appetite for global risk and that if that dries up, the economy could lose out on investment capital.


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## Bull

9.3 &#37; is a damn good figure, infact anything about 8 is good.


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## Bushroda

GoI has set 10&#37; growth rate for the 10th Five-year plan & has a history of failing to meet targets. In that context 9.3% is still a moderate start. As the effect of rising interest rates takes place in the next quarter the annual growth rate would subside to around 9%. Unless we grow over 10% for the remaining four years, like everytime we are bound to miss the target this time aswell. Achieving 10% growth rate would be a steep hill to climb unless farm sector somehow miraculously achieves a 5% growth rate for the remaining years. So, pray the rain gods and hope for the best.


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## Bushroda

*Hot time to buy in Mumbai*
Assetz News, UK
4th September 2007

Those looking to invest in property in India as the country experiences a protracted economic boom will find plenty of great investment opportunities in Mumbai, the director of Property-Abroad.com, Les Calvert, has stated.

Mr Calvert said now was "definitely" a good time to invest in off-plan property, as the city was experiencing considerable growth. "We have a couple of developments in Mumbai that we've seen grow just in the last couple of months by about twenty or thirty per cent," Mr Calvert noted.

As Indian property booms, developers are getting more attuned to changing needs and requirements, Reuters reported this week. The news agency noted that across the country, domestic house prices surged over the last two years, pricing the middle classes out of the market. Now they have dropped by 20 per cent.

Explaining that prices had greatly outstripped increases in wages, Hari Krishna, of Kotak Mahindra Bank, said: "Many developers are rationalising prices across the country and certain sets of people are saying there's a need to focus more on either the luxury or the mass market."

As it is, the Mumbai market is increasingly focused on the tourist market, according to Mr Calvert, who stated that "the general environment surrounding Mumbai has always been of interest to the tourism market".

He added: "Certainly the culture of the city in general is attracting more and more tourism and there are more and more people jumping on the bandwagon [in terms of] investment and buying holiday homes there."

Of course, to get the tourists in there must be good access, which Mumbai can already provide with one international airport. But a second airport, the Navi Mumbai airport in the Kopra-Panvel area, is expected to be handling over ten million people by 2010. 

Mr Calvert said this will boost investment "tremendously", adding that new airports tend to act as catalysts for development in the surrounding vicinity, causing property prices to "shoot up" and improving infrastructure. 

Mumbai's existing airport is also undergoing change, with Mumbai Newsline reporting today that a new domestic terminal is to be built, which will open in December 2008, while a revamp of the airport may lead to another terminal being axed to create space for taxiways.

The city formerly known as Bombay is undoubtedly undergoing rapid change. As property needs change, new infrastructure emerges and new airport facilities are built on the back of a booming economy, the opportunities are there for shrewd investors to make significant returns.


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## Bushroda

*India's retail sector key for jobs growth - industry forum*
FORBES, NY
09.04.07, 7:46 AM ET

MUMBAI (Thomson Financial) - India's retail sector is expected to expand rapidly in the next decade and provide jobs to the country's staggeringly large young population, industry experts said on Tuesday.

'The biggest boon for India is that 890 million people are under 45,' said V. Vaidyanathan, executive director at India's second largest bank ICICI Bank, at the India Retail Forum 2007 in the financial hub of Mumbai.

India's retail sector is still largely closed to foreign investment and is dominated by millions of mom-and-pop stores that oppose the entry of firms like US-based Wal Mart or France's Carrefour.

Local grocery chain Reliance Fresh, owned by the Reliance Industries conglomerate, last month faced a backlash from smaller traders last month, which led the country's most populous state, Uttar Pradesh, to order them to shut stores.

But with a population of 1.1 billion and rising incomes in the fast-growing economy, retail has become a major focus.

'The story of India is still full of opportunities -- it is definitely a huge blue ocean,' said Vaidyanathan.

He said that over the next decade, 'projected growth for the retail industry is 12 trillion rupees and this is expected to triple in the future.'

The growth in retail will create three-and-a-half million job opportunities, he added.

But spiralling real estate prices, poor food processing and storage facilities and lack of training may slow growth, said Arun Nanda, executive director with automobile firm Mahindra & Mahindra.

Currently, India allows single brand retailers to open stores, but larger retail chains must give an Indian partner local control.

Indian telecom firm Bharti Enterprises and Wal-Mart have already agreed to a 50-50 joint venture for a new chain of wholesale stores in India to serve small retail shops.

Eight to 15 initial stores are planned, with the first expected in late 2008.

But most companies are focused on the fragmented market for everyday retail items.

'Food and groceries, clothing and accessories will lead growth in India's retail boom,' said Vinod Sawhny, president of Bharti Retail said at the conference.

'In coming years, India's retail growth areas will shift towards health, education and entertainment, indicating a better lifestyle.'


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## Bushroda

*Aviation policy to attract $150 bn projects*
8 Sep, 2007, 0235 hrs IST, TNN

KOLKATA: The proposed new civil aviation policy, being scrutinised by a group of ministers, is looking to attract $150 billion of investment in the aviation sector. 

"We hope to attract around $150 billion  both in terms of hardware and software. In terms of infrastructure, our target is to have at least 500 airports both big and small, with a total fleet of around 1,000 commercial aircraft in the next five years and around 1,500 aircraft by 2020," aviation minister Praful Patel said on Friday. 

The new policy will also actively encourage the setting up of merchant airports, Mr Patel said. These will essentially be private airports and we would like to see more such airports coming up. However, air traffic control will remain under the government, he added. 

Tata Steel has recently announced plans to set up such a merchant airport in Jamshedpur, he added. Dubbed Vision 2020, the civil aviation policy has outlined in detail the commercial and navigationsl requirements too. 

"By next year, India will be only the fourth country to have a satellite-based navigation system to manage its airspace. In terms of manpower upgradation too, the policy aims to spell out new skills and institutes needed to support aviation growth," Mr Patel said. 

Significantly, the ambit of the regulatory framework in the aviation sector, now under Airport Economy Regulatory Authority, is also slated to be expanded to include crucial issues like consumer grievances and a host of other issues, Mr Patel added. 

On the question of relaxation in the five years in operation and 20 aircraft fleet strength norm for domestic carriers to be able to fly abroad, Mr Patel said the ministry views that Indian carriers should command a 50% share of all in-bound and out-bound air traffic to and from the country. 

Currently, Indian carriers have a 30% share of air traffic which stands further diluted if long haul routes are taken into consideration.


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## Bushroda

*Railways High-Speed plan gets on track*
RAGHVENDRA RAO
Sunday September 9 2007 02:08 IST 

NEW DELHI: Even as serious doubts are being raised in the Rail Bhavan corridors over the feasibility and commercial viability of the ambitious High-Speed Passenger Corridor Project, the Indian Railways is buoyed over the fact that not only have nine state governments shown interest in it, they have even suggested as many as 16 routes, spread over 5,400 km, for constructing such corridors.

While Maharashtra, Karnataka, Tamil Nadu, Gujarat, Delhi, Haryana, Punjab, Andhra Pradesh and West Bengal are learnt to have formally expressed interest in the project, others like UP, Rajasthan, Gujarat, Kerala, Bihar and Jharkhand too are testing the waters. Some of the routes suggested by the states include Mumbai-Ahmedabad, Bangalore- Mysore, Chennai- Coimbatore, Delhi-Chandigarh, Hyderabad-Bangalore, Vijayawada-Vishakhapatnam and Howrah-Haldia.

What has the Railway Ministry excited is that all the states formally expressing interest have also accorded in principle approval for the pre-feasibility studies needed. From the beginning, the Railways was keen that state governments share the cost of pre-feasibility studies on the project, which is expected to take a minimum of two years.

The project, announced by Railway Minister Lalu Prasad In this years Rail Budget, essentially envisages constructing railway corridors where passenger trains can move at speeds between 300- 350 kmph.

By constructing these corridors, the Railways hopes to win back clientele that has migrated to low-cost airlines in recent times. Railway officials say that some rough surveys done on the Mumbai-Ahmedabad and Delhi-Amritsar routes indicate that a high-speed train would attract enough ridership.

Further, the Railways are keen to market the idea as an important instrument in the battle against carbon emissions. The Railwayss preliminary estimates suggest that a High-Speed Rail consumes 0.933 litres of fuel per 100 km travelled, in comparison to the 4.04 litres consumed by an airplane and 5.69 litres consumed by an economy car.

The estimates further indicate that if one were to commission a High-Speed Passenger Corridor in 2007, it would result in taking 2,36,000 cars and 74,000 buses off the roads by the year 2012.

However, the exorbitant costs involved in setting up the infrastructure for the project has many worried in the Ministry. Rough estimates prepared by Rail Bhavan mandarins suggest an expense of Rs 25,000 crore (excluding the cost of land) for every 500 km.

The Railways is mooting raising Rs 11,000 crore of it from debt, another Rs 5,000 crore through equity, Rs 5,000 crore through commercial exploitation of land and the remaining Rs 4,000 crore by viability gap funding. The bottomline, say officials, is to have zero net cost to the Government.


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## Bushroda

*Indian economy expected to continue growing at over 9 pct - PM's advisor*
FORBES, NY
09.12.07, 8:31 AM ET

MUMBAI (Thomson Financial) - The Indian economy is expected to continue growing at over 9 pct, said C Rangarajan, chairman of the Economic Advisory Council to the prime minister.

Speaking at a conference on global banking in Mumbai, he stressed that retail and consumer lending, which has grown exponentially over the past decade, needs newer methodologies and more stringent models of lending. Banking is resurgent in India, with deposits growing at 30 pct a year.

Rangarajan said the Indian banking sector must adopt better risk management approaches and evolve new models to assess credit risks for the services sector. He called for sector consolidation, citing Indian state-run banks accounting for three-fourths of all assets in the banking system.

Rangarajan added there was a real need to explore commercially-driven consolidation opportunities and the government must cut its stake in state-run banks below 51 pct, adding consolidation will drive growth in the sector, going forward.

He also said the government must decide on the approach it will take in de-regulating the sector further. He said the government must either bring additional stake, raise additional capital or have other quasi government companies like LIC take additional stake.


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## Bushroda

*47% job growth expected in Q3, says survey* 
New Delhi September 13, 2007 

A manpower consultancy firm today said, the employment prospects in India for the forthcoming Oct-Dec quarter are the strongest since mid-2005, with job growth expected at over 47 per cent growth, as against 39 per cent in the current quarter. 

Manpower India conducts a quarterly survey of Indian employers. Today it said that all industry sectors, barring manufacturing, expect an increase in hiring activity. 

The services sector has reported the most optimistic net employment outlook at over 54 per cent, as against 46 per cent in the previous quarter. The survey involved around 4,922 employers across sectors like services, manufacturing, transport and public administration among others. 

"With employers implementing business strategies and plans in full motion, hiring activity is projected to gain further momentum in the quarter. The optimism of Indian employers is reflective of the pace at which business is growing across India," Soumen Basu, executive chairman, Manpower India, said. 

Recent data showed that India's economy, as measured by the gross domestic product, grew 9.3 per cent in the first quarter of the current financial year. 

Hiring intentions in the finance, insurance and real estate sector are considerably stronger on a quarter-on-quarter basis with an increase of 17 percentage points and a net employment outlook of plus 51 per cent. 

The year-over-year comparison reveals an increase of five percentage points in the overall net employment possibility in the country.


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## Neo

*Reverse outsourcing takes off In Indian IT firms​*(AFP)

13 September 2007 

BANGALORE - Indian IT firms that thrived on the outsourcing boom in the West are themselves headed offshore, from Malaysia to Mexico, to escape the double sting of surging salaries and a rising rupee.

Tata Consultancy, Infosys, Wipro, Satyam and smaller companies are stepping up acquisitions and opening more facilities closer to US and European clients to cut costs  the reason why work was farmed out to India in the first place.

Salaries of software professionals rose 18.7 percent in 2007, a survey showed Tuesday, while the rupee has gained almost 10 percent this year to near 10-year highs against the dollar.

Thats eroding the cost advantage once enjoyed by the 50 billion dollar information technology industry, which bills two-thirds of sales in dollars but whose expenses are almost all incurred in rupees.

IT firms are off-shoring work to time zones and locations nearer their clients in a reversal of the trend that made Bangalore, Indias Silicon Valley, the favourite back-office of the worlds biggest companies.

Bangalore also gave the English language a new slang verb: being bangalored in the US meant a person had lost his job because it had been handed to an IT company in India that would do it for a fraction of the cost.

The term looks set to lose its pejorative punch as the same IT industry, which employs 1.63 million people at home, creates and sustains thousands of jobs abroad.

This week Wipro opened a facility in the Mexican city of Monterrey to service American and European clients and Satyam launched a software centre in MSC Malaysia, a government-designated high-tech zone.

In the past, we viewed off-shoring as India-centric, but we do not do it any more, said Satyam founder B. Ramalinga Raju, who on Monday opened the centre to support business in the US, Southeast Asia and the Middle East.

We look at off-shoring as delivering through high-quality workforce in lower-cost countries, he said.

Hyderabad-based Satyam has hired 300 mostly-Malaysian IT engineers to man the facility, whose workforce will rise to 2,000 in four years to cater to clients such as GlaxoSmithKline, one of its top 10 customers.

Malaysia was chosen because of its competitive cost environment, said Raju, whose company is distributing work to locations where it makes the most business sense.

Wipro will add to the 100 employees it hired in Mexico and invest in other lower-cost locations, said chairman Azim Premji, who in August paid 600 million dollars to buy US-based outsourcing firm Infocrossing to serve American clients.

Mumbai-based Tata Consultancy, Indias top software maker, opened a centre in the Mexican city of Guadalajara with 500 employees and said it will employ thousands more in the next five years.

Mexico shares a similar time zone with and is within five hours flying distance from anywhere in the US, enabling TCS to provide nearshore services to clients, the company said.

Infosys Technologies opened a 400-person facility in the Czech Republic to service European clients and purchased the service centres of Royal Philips in Poland and Thailand besides India. Its also weighing potential acquisitions.

At home, wage bills are rising as Indian firms compete with multinationals to hire and keep scarce software talent.

The IT industrys average annual salary rose 11 percent this year to 620,000 rupees (15,320 dollars), said a survey by the market-research firm IDC India for Dataquest magazine, a considerable amount in a country where the per capita income is less than 900 dollars.

Indian tech companies must find a way out of this ever increasing wage rise as rupee appreciation squeezes their margins further, said the industry survey.

The rupee is rising on inflows of billions of dollars into an economy growing nine percent a year.

But costs alone are not driving the dispersal of the IT industry around the globe, said Kiran Karnik, president of the industry grouping National Association of Software and Service Companies, or Nasscom.

Cost optimization is just one reason, he said. Proximity to clients is also important, both geographically and culturally. If you want to serve clients in the US or Spanish-speaking Latin America, it makes sense to be in Mexico.

Khaleej Times Online - Reverse outsourcing takes off In Indian IT firms


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## Neo

*Industrial production grows at slowest pace​*(Bloomberg)

13 September 2007 

NEW DELHI  Indias industrial production grew at the slowest pace in nine months in July, easing pressure on the central bank to raise interest rates from a five-year high.

Production at factories, utilities and mines rose 7.1 per cent from a year earlier after Junes revised 9 per cent gain, the statistics bureau said in a statement in New Delhi yesterday. Analysts were expecting a 9.6 per cent increase.

Reduced output may help keep inflation within the central banks 5 per cent target this financial year. It may also curb the pace of economic growth to the weakest in three years. A slowdown in economic growth is building, said Shuchita Mehta, an economist at Standard Chartered Bank in Mumbai. The short-term outlook does not make a strong case for a rate hike, but the central bank will ultimately resort to more tightening in the fiscal fourth quarter.

Industrial production in the four months ended July rose 9.6 per cent compared with an 11.1 per cent gain in the same period last year, todays report said. The central bank expects the economy to grow 8.5 per cent in the current financial year, the slowest expansion since March 2005.

The benchmark Sensitive index fell 0.3 per cent to 15,502.83 at 3 pm on the Bombay Stock Exchange. The yield on the benchmark 10-year note dropped 2 basis points to 7.88 per cent on optimism the central bank will soon end its policy of raising borrowing costs.

Interest rates

The central bank has raised its policy rates by 2.25 percentage points in the past three years, and since December has increased the proportion of deposits commercial banks must place with it as reserves by 2 percentage points to 7 per cent. As a result, loans to consumers and companies grew at the slowest pace in three years last month, helping the benchmark wholesale-price inflation cool to 3.79 per cent in the week ended August 25, the government said on September 6.

I expect inflation to pick up again next year, said Robert Prior-Wandesforde, an economist at HSBC Holdings Plc in Singapore.

The central bank last month said inflation concerns persist because of rising commodity prices and demand for goods exceeding their supply. Crude oil today traded close to a record in New York, while the price of wheat, which India has been importing in the past year, surpassed $9 a bushel today.

There has been a moderation in demand, but demand continues to be strong because of rising personal incomes, said D. H. Pai Panandiker, president of RPG Foundation, an economic policy group in New Delhi.

Price increases

Tata Steel Ltd., the worlds sixth-largest steelmaker, said it plans to raise prices of hot-rolled coils this month by as much as Rs500 ($12) a metric tonne because of rising demand. We are not able to meet the needs of all our customers, said T. Mukherjee, deputy managing director of Tata Steel.

Still, manufacturing output in July increased 7.2 per cent, slower than the 9.8 per cent gain in the previous month, yesterdays report said. Mining gained 4.9 per cent, while electricity rose 7.5 per cent, the report said. Higher interest rates are denting sales of cars, trucks and motorcycles, which dropped in three of the first four months of the current fiscal year.

Hero Honda Motors Ltd. and Baja Auto Ltd., Indias biggest motorcycle makers, continued with production cuts announced in June as consumer demand waned. Higher interest rates are impacting everyone, said Jagdish Khattar, managing director at Maruti Udyog Ltd., which is luring buyers with cash incentives to boost its sales. He said last week the company may fall short of the record 20 per cent sales growth it achieved in the last financial year.

Julys industrial production was also affected by a slump in output from Coal India Ltd. after a conveyor belt broke down. Coal India produces 87 per cent of the nations coal and supplies companies such as National Aluminium Co., which partially closed its factory at the end of July.

Khaleej Times Online - Industrial production grows at slowest pace


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## Bushroda

*Banking on India*
By KATHLEEN KINGSBURY
TIME
Thursday, Sep. 20, 2007 

Like most popular managers, L. Brooks Entwistle, head of Goldman Sachs India, maintains an open-door policy. Entwistle admits, however, that this accessibility hasn't always been by choice. "When your entire office is a hotel room packed with desks, you can't help getting to know your colleagues," he says.

He laughs at the memory now, but those cramped quarters served as the unlikely launching pad for the investment bank's billion-dollar bet on India. Entwistle's version of sightseeing in Mumbai (formerly Bombay) is a tour of the old Goldman outposts in India's financial hub. First stop, suite 1034 at the Hilton--down the hall from a group of Thai masseuses and rotating airline crews--where Goldman set up shop in late 2005, with Entwistle as employee No. 1. Next, a second temporary home in a worn-down office building abutting a sprawling slum. When rains flooded the streets, many employees chose to stay the night rather than wade through the ****** water. Entwistle points out the Dumpster that the firm donated to the block, as well as the spot where the generator truck running the trading floor used to park. "When you're working out of a dump, you know you've really got people's loyalty," Entwistle says. Another benefit, he notes wryly: "It's not hard to get them to go out and meet clients."

The Mumbai team, assembled from around the world in just 18 months, has already managed two record deals for India's banking industry: Vodafone's $11 billion purchase of mobile-phone provider Hutchison Essar, announced in February, and ICICI Bank's $4 billion secondary public offering in June.

With an economy growing at about 8% a year and corporate earnings a robust 25%, India has become a must-see for multinational investment banks looking for big, bold corporate mergers, acquisitions and financing deals outside the U.S. The country's total market cap reached $1 trillion earlier this year, up from just $280 billion five years ago. Companies in India's technology and financial sector are booming, and the world's investment bankers are paying court. Banks used to "come to India about once a decade, get spooked and pull out," says industry analyst Janmejaya Sinha of Boston Consulting Group. This time around, "it's going to take more than parachuting in."

Goldman Sachs cut ties in March 2006 with a halfhearted joint venture it had held for more than 10 years and pledged $1 billion in investment capital for India. Entwistle says he immediately got to work convincing Mumbai's business community that Goldman is in India full force. He told them, "We've brought the boats ashore, and we're burning them."

A company like Goldman has access to plenty of talent, but shaping a team in a hot market with a lousy infrastructure required a new strategy. As more foreign banks move in and local institutions grow, salaries in India's financial-services sector, like those in the even hotter technology sector, are skyrocketing, and turnover in many firms tops 35%. Goldman "took a different approach to hiring than most multinationals," says Luis Moniz, a Mumbai-based analyst for the human-resources consultancy Heidrick & Struggles. Most rivals tried a balanced approach, with half local hires for on-the-ground expertise and half expats to maintain a connection to the head office.

Entwistle threw that logic out with last night's room service. He initially recruited the majority of his investment-banking team from other Goldman offices. They had in common a commitment to make Goldman a player in India's boom. All but two employees are of Indian descent, but they're as likely to have come from New York City, London or Tokyo as Bangalore. Their boss can rely on "a team that knows Goldman's particular systems and culture inside and out," Moniz says. "They only have to get up to speed on the local market."

Nikhil Bahel, a Goldman vice president who arrived from the bank's New York City headquarters in May 2006, says he came to India "to chase the most entrepreneurial opportunity the bank has going on right now." Sandeep Patel, head of corporate finance, hoped to be part of "something historic." Rishi Maheshwari wanted the responsibility and client interaction of a smaller office. All of them say the chance to work for Entwistle sealed the deal. Built like an aging quarterback, the 39-year-old Colorado native is a charmer. His favorite stories usually involve one of his three daughters or some bit of subcontinental trivia picked up on one of the 50 trips he's made to India from Goldman's Hong Kong office since 1998. "Brooks has a limitless passion for being here," says analyst Debanshi Basu, who transferred from Bangalore. "You know he's committed to doing great things, and you want to be part of that."

The pristine space that Entwistle eventually secured for Goldman's Mumbai headquarters--three floors in a building in the eclectic Prabhadevi neighborhood--certainly looks like the office of a serious investment bank. But it feels more like the postcollegiate playground of a Silicon Valley start-up. Meetings seem to happen as often over cubicle walls as in boardrooms. Goldman employees come back from business trips abroad with a pound of Starbucks coffee for the office. On weekends, you'll find them building houses for the poor or taking the kids to the Entwistles' for Saturday brunch. Every Monday morning, Entwistle gathers the troops. "He calls on even the most junior people to talk," says associate Anjali Talera, "and everyone's contribution is treated as equally crucial." A local hire from Merrill Lynch, Talera says that feeling is "rare in investment banking."

Goldman vice president Sunil Sanghai, whom Entwistle lured from Morgan Stanley, says these strong personal bonds translate directly into stronger client relationships. Sanghai should know. He brokered Goldman's lucrative role in the ICICI offering. "You always hear how much teamwork means at Goldman, but it's true," Sanghai says. "If a client wants research overnight, I have 2,000 bankers worldwide willing to help."

That confidence may come in handy in the next few months. The U.S.'s subprime woes will have little effect on Indian investors, who have largely avoided leveraged buyouts, unlike their U.S. counterparts, who have been relying on the now shaky credit markets to finance those deals. But if global credit markets tighten, "India won't be immune," says Ernst & Young financial-services analyst Ashvin Parekh. Foreign investors sank $98 billion into India from 2003 to 2006, according to Morgan Stanley, and every major investment bank in the world is chasing that business. Less free-flowing credit will inevitably lead to Indian companies' eyeing fewer deals and therefore to even more competition for their business. In India, commissions and fees are often less than a quarter of what they are in the West, so if foreign banks want to make money, says Alok Aggrawal, chairman of market watcher Evalueserve, they will have to go after the biggest, most profitable deals. "That's a small pool with a lot of sharks."

Such talk will hardly dampen Entwistle's plans. He's adding personnel rapidly, sometimes an employee a day. Goldman Sachs has also built relationships with Indian universities and M.B.A. programs in an effort to nourish the Goldman culture in India from the ground up. The bank plans to hire most of its India staff locally within the next few years. Previously, the only way to recruit India's top students was by offering them the chance to go abroad. "Now they don't want to miss out on what's going on at home," Entwistle says, "and we can finally offer it to them."

Not that Entwistle doesn't have grand ambitions for the team he already has. Beyond more blockbuster deals, he wants to field a group of runners in Mumbai's annual marathon next January. "Participation isn't mandatory," he says, "but I think I can convince most people to join." You'll find him at the head of the Goldman pack.


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## Bushroda

*Indian rupee surges past 40 on Fed cut*
Gulf Times, Qatar
Friday, 21 September, 2007, 08:10 AM Doha Time 

MUMBAI: Indias rupee strengthened beyond 40 per dollar for the first time in nine years as a US interest-rate cut prompted investors to seek higher returns in the worlds second-fastest-growing major economy. 

The rupee is Asias best-performing currency this year, climbing 11%, as share purchases by overseas investors surpassed the total for 2006. 

The benchmark Mumbai Stock Exchange Sensitive Index, or Sensex, has climbed 4.3% to a record since the Federal Reserves Tuesday rate cut. 

The Feds rate-cut is the key reason for a rupee rally, said Richard Yetsenga, a strategist at HSBC Holdings in Hong Kong. The authorities in India will undertake policies periodically to slow the move, but there isn't much anybody can do about the ultimate direction. 

The rupee surged 0.8% to 39.8825 against the dollar, the highest close since May 13, 1998, according to data compiled by Bloomberg. Yetsenga expects the currency to rise to 39 by the end of the year and to 37.5 by December 2008. 

The currencys rally had slowed after it breached 41 to the dollar in April as the central bank sold the rupee and global investors shunned emerging market assets because of a deepening credit market slump. The currency has risen 1.5% since the Fed's decision to cut rates, which reduced investor concern that global economic growth will slow. 

Indian Trade Minister Kamal Nath said the gain in the rupee is a cause for concern and the government is considering a relief package for exporters. Export is the engine of growth and we have to ensure that growth is not affected, Nath told reporters in New Delhi yesterday. We are going to look at it immediately. Its a new situation and a new situation requires a new response. The Reserve Bank of India on September 14 arranged purchases or sales of foreign exchange to contain volatility. The central bank bought $11.4bn in July, the most since February, central bank data show.

The sensitive Index climbed to a second straight record yesterday. Raw-material producers rose, led by Hindalco Industries and Oil & Natural Gas Corp, after the prices of metals and oil climbed.

The Bombay Stock Exchanges Sensex added 25.20, or 0.2%, to a record 16,347.95, after yesterday exceeding 16,000 for the first time. 

The S&P/CNX Nifty Index on the National Stock Exchange climbed 15.20, or 0.3%, to 4,747.55. Nifty futures for September delivery rose 0.1%, to 4,748. 

Software exporters fell, led by Tata Consultancy Services, after the rupee climbed, reducing the local-currency value of their US sales.

Tata Consultancy, the country's largest software exporter, fell Rs21.65, or 2.1%, to Rs1,000.80.  Bloomberg


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## Bushroda

*Fortune Magazine Plans India Edition*
By RAJESH MAHAPATRA AP Business Writer 
© 2007 The Associated Press 

NEW DELHI  Time Inc. plans to start an Indian edition of its Fortune magazine under a license deal with a local media company, an editor at the U.S.-based business publication said Friday.

Under Indian laws, a foreign company has to form a joint venture with a local company or give a license to one to publish news in India.

Fortune plans to bring out an Indian edition through a licensed deal with a local publishing group, Robert Friedman, the magazine's international editor, told The Associated Press.

Friedman didn't name the Indian group. He said a formal announcement will be made closer to a business leaders' conference Fortune is hosting in New Delhi beginning Oct. 29.

That meeting _ the Fortune Global Forum _ will be attended by Indian and international business executives and government officials, including U.S. Treasury Secretary Henry Paulson.

"We would like to use the global forum to help expand Fortune's presence in India," Friedman said. "We think we are under-leveraged in India."

Currently, the magazine, published every two weeks, sells about 8,000 copies per issue in India. That number could increase 10 times with a local edition, Friedman said. Under a license deal, Fortune would get a royalty from the Indian partner.

Rapid globalization of the Indian economy and rising middle class incomes are driving demand for such products as Fortune, which caters to wealthier readers interested in international investments and personal finance. Several global media companies have entered India in recent years to seize the opportunity in this segment of readers with more money to spend on leisure and business reading.

New York-based Conde Nast Publications Inc. recently introduced a local edition of fashion and lifestyle magazine Vogue. Conde Nast also plans to bring Glamour, Vanity Fair and Traveler to India depending on the success of Vogue.

Magazines like Cosmopolitan, Marie Claire, Men's Health, and Maxim are already being published through joint ventures. A local edition helps these magazines compete with their Indian rivals.

A copy of Fortune currently sells for 80 rupees (US$2), four times the price of an Indian business magazine.


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## Bushroda

*"India After Gandhi" | The rise of a nation and the people behind it*
By John Freeman
Special to The Seattle Times

India, which last month marked the 60th anniversary of its independence, has a great deal to celebrate. It has become one of the most powerful economies in the world, has fought back a wave of organized crime as violent as that that plagued Chicago in the '20s and is building strong alliances regionally and internationally.

"India After Gandhi," a massive, illuminating and highly readable volume by economist and cricket historian Ramachandra Guha, however, makes a compelling argument that India's most profound success is not its economy but its nationhood.

"At no other time or place in human history have social conflicts been so richly diverse, so vigorously articulated, so eloquently manifest in art and literature," writes Guha, "or addressed with such directness by the political system and the media." Guha's book goes a long way toward explaining which founding men and women made this possible. The list includes the country's first prime minister, Jawaharlal Nehru, and his daughter, Indira Gandhi, who had the bravery to abolish parliament to save Indian democracy, as well as Bengali film giant Satyajit Ray, whose social realist films became a mirror of the new state.

Guha carefully tracks how the young country forged an idea of itself and used it to bind disparate groups. He takes a close look at the forming of the Indian Constitution, which at 395 articles and eight schedules is one of the largest in the world, and the amalgamation of the some 500 princely states as Gandhi gradually began to strip princes of their titles and purses in 1967.

In addition to his other hats, Guha is a biographer. If one criticism can be leveled at this impressive history, it is that it would have been helpful for Guha to apply more of his biographer's skills to the great number of characters an American reader will meet (probably for the first time) here. Guha is an elegant analyst of why India succeeds  and he brilliantly describes the permutations of India's complex government  but it would be terrific if he brought to life the people who believed in the project as well as he describes the ideas that kept them aloft.

The end of Britain's empire over the territory that became India and Pakistan gave birth to a powerful democracy; but first came the bloodshed. In the years leading to and after partition, over a million people died in a firestorm of killing that raged between Hindus, Muslims and Sikhs.

At the center of it all were five figures, from Mohammad Ali Jinnah to the towering Nehru, whom Alex von Tunzelmann reveals in all their human foibles in "Indian Summer." Even today's soap operas would have trouble rivaling the real-life dangerous liaisons going on behind the scenes among these powerful and important figures in 1947.

For starters, the wife of Louis "Dickie" Mountbatten, who the British had dispatched as viceroy, was probably conducting an open affair with the future prime minister Nehru. Von Tunzelmann is clearly fond of the cuckolded Dickie but is less smitten with Mohandas ("Mahatma") Gandhi, whom she paints as an eccentric counterpoint to this randy atmosphere, campaigning against sex and for a morally pure new state. Dickie's wife, Edwina  affairs aside  comes across as more human, helping out with refugees in a country far from home.

Bridging these dramatic personal details with the anguished cost of independence is a tough task, and von Tunzelmann, as good a writer as she is, does not prove entirely adept at juggling the two  especially as she has a mostly forgiving picture of Mountbatten and his wife.

One departs this guiltily enjoyable read with a lingering sense that the harder, more anguished drama  that of the million lives lost  has yet to be told.

*John Freeman is president of the National Book Critics Circle.*


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## Bushroda

*India's Inflation Rate Eases to Lowest Since 2002*
By Kartik Goyal and Cherian Thomas
Bloomberg

Sept. 21 (Bloomberg) -- India's inflation eased to the lowest since 2002, as interest rates at a five-year high began to tame consumer demand for cars and homes. 

Wholesale prices rose 3.32 percent in the first week of September from a year earlier, down from a 3.52 percent gain in the previous week, the Ministry of Commerce and Industry said in a statement in New Delhi today. 

Inflation is also slowing as adequate rains increase supplies of fruits, vegetables and wheat. Still, record foreign investment, and rupee sales by the central bank aimed at stemming currency gains, are flooding the Indian economy with cash and threaten to rekindle price gains. 

``If foreign investment flows continue at such elevated levels, then the central bank will have to resort to another increase in the cash reserve ratio,'' said Sujan Hajra, an economist at Anand Rathi Securities Ltd. in Mumbai. ``Excess liquidity in the system can stoke inflation.'' 

India's central bank has been relying on the cash reserve ratio, or the proportion of deposits lenders need to place with it as reserves, to curb bank lending. Governor Yaga Venugopal Reddy's next monetary policy statement is due Oct. 30. 

The yield on the benchmark 10-year government bond held at 7.83 percent after the release of the inflation data, which was more than analysts' estimate of 3.28 percent. 

*Stronger Currency* 

India's currency has strengthened beyond 40 per dollar for the first time in nine years amid unprecedented overseas investment in local shares. The central bank has injected rupees worth $43.1 billion in the nine months to July, almost three times the amount in the previous nine months, to prevent the currency from gaining more. 

Overseas investors bought a net 24.85 billion rupees ($608.6 million) of Indian shares on Sept. 19, nine times the average of the last six months. The Securities & Exchange Board of India will release data for yesterday's purchases later today. 

Foreign investors are buying shares and building factories in India to take advantage of the nation's record growth, which is second only to China among the world's biggest economies. 

Consumer prices in China surged 6.5 percent in August, the fastest rate in 10 years, led by food. Of 20,000 households surveyed in a central bank quarterly report released yesterday, a record 61.3 percent said they expect inflation to quicken in the fourth quarter. 

China's central bank last week raised interest rates for a fifth time this year. It has also ordered lenders to set aside larger reserves on seven occasions since January and sold bills to soak up cash from the financial system. 

India today revised the inflation rate for the week ended July 14 to 4.76 percent from 4.41 percent. The government revises the inflation rate after a delay of two months on additional price data.


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## Bushroda

*Air India Starts Talks With Boeing, Airbus; Eyes A380*
CNN Money 
September 21, 2007: 01:52 AM EST

NEW DELHI -(Dow Jones)- State-owned Air India has begun talks with Boeing Co. (BA) and Airbus to buy new planes including the A380 superjumbo, people familiar with the development said Friday.

In July, Air India said it plans to buy about 60 new passenger jetliners over the next few years and aims to start the selection and purchase process by mid- August.

"The airline is in touch with both Boeing and Airbus on the types of aircraft available and what will be required in the industry in future," said a senior airline executive, who didn't want to be named.

In March, the government approved the merger of Air India and Indian Airlines to take on rising competition from domestic and foreign rivals. The merged airline named Air India, which is run by the National Aviation Co. of India, has a fleet of more than 110 planes with an additional 111 on order.

"There is a committee in the airline which is discussing the ratio of planes to buy, how many small capacity and short haul and how many ultra-long range. It includes the A380 and the 747-800 model," the airline executive said.

In a move to modernize their aging fleets, Air India ordered 68 Boeing jets, worth over $11 billion at list prices in December 2005, while Indian Airlines placed a $2.2 billion order in February 2006 with European Aeronautic Defence & Space Co. (5730.FR) unit Airbus, for 43 planes.

"Air India has had preliminary discussions with Airbus and they have expressed interest in the A380," another person, who also didn't want to be identified, said.

Consultancy firm Ernst & Young India forecast in a recent report that the fleet size of Indian carriers will more than triple to 700 from 235 by 2012.

India's aviation industry is expected to grow by more than 25% annually over the next few years as a rapidly expanding economy boosts incomes, making it an attractive market for local and international carriers.


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## amunhotep

The rising rupee is seriously hurting exporters.

hoping for a correction in the rupee.


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## Bushroda

*Rupee expected to continue advance after hitting nine year high* 
By Sam Nagarajan
International Herald Tribune, France
Published: September 20, 2007

NEW DELHI: India's rupee climbed beyond 40 per dollar for the first time in nine years, as the U.S. Federal Reserve's interest-rate cut prompted investors to seek higher returns.

The rupee is the best-performing currency in Asia this year, climbing 11 percent, as share purchases by overseas investors surpassed the total for 2006. The benchmark Bombay Stock Exchange Sensitive index, or Sensex, rose to a record after climbing 35 percent in the past 12 months.

"The Fed's rate cut is the key reason for a rupee rally," said Richard Yetsenga, a strategist at HSBC. "The authorities in India will undertake policies periodically to slow the move, but there isn't much anybody can do about the ultimate direction."

The rupee surged as much as 0.8 percent to 39.8975 against the U.S. dollar, the highest since May 14, 1998, before trading at 39.925 at midday in Mumbai, according to data compiled by Bloomberg. Yetsenga expects the currency to rise to 39 by the end of the year and to 37.5 by December.

The Reserve Bank of India said on Sept. 14 that it intervenes in currency markets, arranging purchases or sales of foreign exchange to contain volatility. The central bank bought $11.4 billion in July, the most since February, central bank data show.

"The government's measures to curb the rupee have thus far been half-hearted," said Ganesh Kumar Gupta, the president of the Federation of Indian Exporters in New Delhi. "If the rise in the value of the rupee continues, 8 million people are likely to lose their jobs by the year-end."

The Indian trade minister, Kamal Nath, said in New Delhi that the gain in the rupee is a cause for concern and the government will consider granting some form of subsidy to exporters. The central bank will probably intervene as the currency rises to 39.50, said Y.M. Deosthalee, the chief financial officer of Larsen & Toubro, the biggest engineering company in India. N.R.K. Raman, chief executive officer of I-Flex Solutions, an Indian computer software company controlled by Oracle, is also worried. "We are taking steps, including improving efficiency and productivity, to counter the rise of the rupee."

The Sensex, which climbed above 16,000 for the first time Wednesday, rose as much as 0.3 percent Thursday as investors bought emerging market equities.

Overseas funds bought $9.5 billion more in Indian equities than they sold this year, compared with $8 billion in all of 2006, according to the Securities & Exchange Board of India. "Even in the event of a slowdown in the U.S., we think India is a good story," said Irene Cheung, a strategist at ABN Amro. "The appetite for risk is coming back."

The rupee may rise to 39 by the end of 2008, Cheung said. The median forecast of 19 strategists surveyed by Bloomberg is 40. The spread, or the yield difference, between a 10-year U.S. Treasury note and a similar-maturity Indian government bond has widened to 3.32 percentage points from 2.77 percentage points July 18, Bloomberg data show.

"The outperformer in Asia is the Indian rupee," said Tetsuo Yoshikoshi, a market analyst at the treasury unit of Sumitomo Mitsui Banking in Singapore. "We're seeing a lot of investor inflows into India."

Growth in the fourth-biggest economy in Asia unexpectedly accelerated in the quarter ended June 30 to 9.3 percent. Only the 11.9 percent growth of China in the period was faster among the 20 largest economies in the world.

The central bank governor, Yaga Vengupal Reddy, has increased the repurchase rate six times since the beginning of 2006 to 7.75 percent, a five-year high. The pace of the currency's rally may slow as the central bank buys dollars to prevent a stronger rupee from hurting exporters, said Indranil Pan, the chief economist at Kotak Mahindra Bank.

He said that rising demand for imports was also a threat to the rupee's advance. India's trade deficit widened to $38.2 billion in the seven months through July from $26.1 billion a year earlier, according to government data. Oil is trading close to a record high, which may widen the deficit as India depends on shipments from abroad to meet three-quarters of its energy needs.

The euro is more important to India than the dollar because the European Union accounts for 40 percent of the goods exports, said Sebastian Barbe, an economist and currency strategist at Calyon in Hong Kong. The rupee has weakened against the euro by 0.8 percent in the past month, Bloomberg data show.

"The Reserve Bank of India is also looking at the currency on a trade-weighted basis," Barbe said.


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## Bushroda

*India and China struggle over Latin oil*
*India follows in China's van in securing energy supplies in Latin America. Indian oil firm Reliance is closing on deal for two oil blocks in Peru. Indian interests also nosing around Colombia and elsewhere.*

by Alex Sanchez 
EnerPub, TX 
Friday, September 21, 2007

The Oil Race is on: China signs multi-billion dollar oil contract with Venezuela but India also wants Latin American Oil

It is no revelation to say that India, as it begins to bloom as a global power, is adopting a China-like posture in its search for new oil suppliers. New Delhis quest for energy supplies, as well as other extracted resources, has brought the Asian powerhouse to the Western Hemisphere, and to Washingtons attention. India is befriending potential oil suppliers, be it Mexico or Venezuela, Cuba or Canada. Even more interesting are New Delhis approaches to Cuba regarding the islands possible oil reserves. It seems clear that India is hungry for guaranteed oil sources in order to maintain its booming economys momentum and its growing geopolitical influence, and in Latin America it is finding these potential suppliers and new friends.

*Indian Oil Hunger*

On July 2nd, the Financial Express published an article predicting that the Indian government will send the Indian Navy to fly the flag throughout the hemisphere in oil-rich zones, especially locations where the state-owned oil company, ONGC Videsh Ltd (OVL), has invested in oil and gas exploration. Pranab Mukherjee, external affairs minister, said that maritime diplomacy has become an essential component of Indias overseas foreign policy and that it must fulfill its necessities outside the immediate geographical area. We have to look at the investments ONGC Videsh is making in energy rich areas such as Sakhalin, Sudan, Nigeria and Venezuela and extend our maritime interests through maritime diplomacy, Mukherjee said. 

Furthermore, a senior member of the Confederation of Indian Industry (CII) said the obvious when he noted that oil is the need of the hour and India has to focus on new markets to get the momentum going. We have to go beyond Europe and build economic cooperation. According to a report issued by the Indian news agency PTI, the growth of oil imports in the first four months of 2006-07 came to 43 percent, 32 percent in 2005-06 and 62 percent in 2004-05. India is importing crude oil not only to meet domestic demand of petroleum products, but also for export of value-added products. The report mentions that Indian oil imports, mostly comprised of crude oil, were valued at $19.87 billion between April 2007 and July 2008. India also has plans to have as much as 5 million tons of oil in reserve for emergency use. The country currently imports around 70% of the oil it consumes.

It is only natural that India will soon have to turn in a major way to areas with reliable sources of oil, like Latin America, which presently is the second-largest source of oil reserves after the Middle East.

*Venezuela*

Last September, as reported by the Caracas daily El Nacional, Venezuelas Hugo Chávez was quoted as saying: India needs more oil each day. Venezuela wants to become and will become Indias oil supplier. Not long after that, in January 2007, there were reports that Venezuelas state oil company, Petróleos de Venezuela SA, or PDVSA, was looking at the possibility of setting up a refinery in India and establishing a petroleum retailing venture there. An Associated Press article elaborated that the proposed refinery would process the Venezuelan crude from the San Cristobal block, where Indias ONGC Videsh Ltd., an arm of ONGC, has been offered a 30 percent stake. The block has the potential to produce 900,000 to 1 million barrels of oil daily. On February 16, AFX International Focus reported that President Chávez said he is ready to divert oil exports from their current markets to other countries like China and India, although his ability to find an immediate alternative market is complicated because most refineries capable of processing Venezuelas heavy crude are located in the United States. 

Recently, Chávez ran into trouble with foreign oil companies regarding the nationalization of oil production ventures in the South American country. As a result, oil companies like Exxon and Conoco operating in the country decided to liquidate their stakes in Venezuela and seek just compensation. It is unclear if this nationalization would also affect Indian companies, but it seems clear that, regardless of whatever decisions Chávez carries out, New Delhi intends to go well out of its way to obtain a share of Venezuelan oil rights. This is particularly true after the recent $10-billion deal signed between Beijing and Caracas. China already is Indias direct competitor in Asian energy markets, and New Delhi cannot afford to be left out of the race for dwindling global oil supplies.

As important as Venezuela is, due to its vast oil reserves, it is noteworthy that India is also looking for oil suppliers elsewhere in the region.

*Brazil*

A March 29 article by Business Times Singapore provides the example of Brazil as an untapped oil giant. The article explains that with almost 12 billion barrels, Brazil ranks third in proven oil reserves in the region, after Mexico and Venezuela; it also has much unexploited potential reserves. Sixteen per cent of Latin Americas oil supply in 2005 came from Brazil and the countrys market share is scheduled to expand to 21.5 per cent by end-2010, with 2.5 million barrels per day in production.

Brazils major oil reserves are certainly of interest to India. A June 4 AP Financial Wire article reported that Indias state-run Oil and Natural Gas Corporation (ONGC) and the Brazilian state-run oil leader Petróleo Brasileiro, or Petrobras, agreed to swap interests in oil exploration blocks, as part of efforts to boost economic cooperation between the two countries. The blocks are located in Maranhão, in the Sergipe-Alagoas Basin and in the Santos Basin. Last year, the Indian company bought a 15-percent stake in a Brazilian offshore oil field for about US$170 million from Royal Dutch Shell PLC, after Petrobras agreed to waive its first right to buy that stake once it became available. Under the latest agreement, Petrobras plans to offer 25- to 30-percent stakes to ONGC in three exploration blocks in Brazil.

*Mexico*

A September 10 Deutsche Presse-Agentur article explains that in 2006 crude oil accounted for 90 percent of Mexicos exports to India, which makes petroleum the cornerstone, at this time, of Indian-Mexican relations. In addition, the Mexican Energy Secretary has released a press statement announcing that four companiesthe Colombian state oil company Ecopetrol, Japans Itochu, Indias Reliance, and the U.S. company Valerohave shown interest in building a refinery in Central America. The members of the Plan Puebla Panama (PPP) co-operation scheme back the project, with four countries (Costa Rica, Guatemala, Honduras and Panama) interested in being considered as the location for the new refinery. 

The idea of building this type of oil facility was first announced by former Mexican president Vicente Fox at the Summit of the Americas, held at Mar del Plata in November 2005. According to a July 9 article which ran on the AP Financial Wire, Mexico has promised to supply the plant with 80,000 barrels of heavy crude daily from the state-owned oil company, Petróleos de Mexico. The company that wins the construction bid will also be committed to supplying 55,000 barrels a day of gasoline and diesel stock (36 percent of regional demand) at a preferential price.

The aforementioned Business Times article regarding Mexico mentions that the country is stepping up oil production, and is expected to produce 3.8 million barrels of oil per day by 2010, which adds up in total to about 33 percent of Latin Americas supply. Mexicos share of regional refining capacity, at almost 21 percent in 2005, is likely to expand to almost 23 percent. The country has six refineries with a total capacity of about 1.5 million barrels per day. 

It will be interesting to see how the recent bombings around a dozen oil and gas pipelines in the Gulf Coast state of Veracruz affect, it at all, Indian-Mexican relations and oil-related projects. The Peoples Revolutionary Army (ERP) has claimed responsibility for these attacks. President Felipe Calderon was actually on a visit to India when the incident occurred. He declared that there is no room for such criminal acts in a democratic Mexico.

*Cuba & the Caribbean*

In September 2006, Indias Oil & Natural Gas Corp. announced they will explore oil deposits in the N-34 and N-35 blocs of Cubas economic exclusion zone in the Gulf of Mexico. Cuban President Fidel Castro partly opened the oil sector to foreign investment in June 1999, in order to cut dependence on oil imports after years of power blackouts and fuel shortages. The blocs have an estimated size of about 1,660 square miles and are located in western Cuba. This is a six-year agreement through which the Indian oil giant will explore an area of 4,300 square kilometers (1,544 square miles) of Cuban waters. \

When the decision was announced, Floridas daily St. Petersburg Times published an article explaining that: exploring for oil ninety miles off the coast of Florida has set off a political debate over whether U.S. companies, sidelined by sanctions, should be allowed to explore there. Some Florida lawmakers say they are worried about environmental damage and the potential threat to Floridas tourism industry, and want companies exploring with Cuba punished. U.S. companies are barred from oil exploration in Cubas offshore due to executive-mandated trade sanctions enforced against Havana since 1962.

It is noteworthy that Cuba is not the only country that India is courting in the Caribbean, nor is it only oil on Indias mind. An April 24 article by Business Line explained how relations are improving between Trinidad and Tobago and India. The article explains that there have been on the Caribbean island, with its large Hindu population, a total of $3 billion in Indian investments. Mittal Steel has invested $1.8 billion, while Essar Steel is setting up another steel plant costing $1.2 billion. The island also possesses abundant oil reserves. Finally, the article notes that a delegation from Reliance Industries Ltd (RIL) was in Suriname last month looking at the possibility of oil exploration and production as well as mining projects.

*Colombia, Peru and Bolivia*

Meanwhile, with respect to Colombia, a key South American player, New Delhi is also making its presence felt. Last September, the Press Trust of India reported that the Indian Oil company paid about $425 million dollars to acquire 50 percent stake in the Colombian oil firm, Omimex de Colombia. The article explains that Indias state-owned ONGC Videsh Ltd, the overseas arm of ONGC, and the Chinese firm Sinopec are paying $850 million dollars to acquire Omimex de Colombia, which currently produces 20,000 barrels of oil per day.

With regards to Peru, the Indian company Reliance is at an advanced stage of closing contracts on two oil blocks in the Andean country. 

Finally, as a side note but of equal importance, even if it is not oil-related, is a recent deal between New Delhi and La Paz, regarding El Mutún in Bolivia, the worlds largest undeveloped iron deposit, which is estimated to contain more than 40 billion tons of ore. Jindal Steel & Power Limited (JSPL) along with its subsidiary Jindal Steel Bolivia (JSB), signed a contract with the Bolivian government, through which JSPL will invest US$2.1 billion over eight years to develop an integrated steel plant in the country. A JSPL press release explains that this is the largest investment by an Indian company in Latin America and the largest foreign investment in a single project so far in Bolivia.

*Oil and Friends for New Delhi*

Along with China, India is one of the worlds growing superpowers. With this new position comes a demand for energy to supply its accelerating economy and its increasingly diversified industries. By entering the Western Hemisphere, India is expressing interest in Washingtons backyard; even more interesting is New Delhis approach to Cuba. This must be of major concern for Washington as it refuses to loosen its trade barrier on the Caribbean island. Whats worse for the U.S., it is hardly in a position to exercise pressure on its vital newfound Asian ally. Washington seems to be caught between a rock and a hard place, while Indian influence, in its quest for oil, continues to expand throughout the Western Hemisphere, unencumbered by ideological considerations or historic political animosities. 

*This analysis was prepared by Research Fellow Alex Sánchez of the Council on Hemispheric Affairs.*


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## Bushroda

*Incredible India@60 Brings the Best of India to the Rest of the World*
Business Wire, NY

NEW YORK--(BUSINESS WIRE)--Saluting Indias 60th anniversary of independence and its resurgence, Incredible India@60 kicks off a week-long celebration in New York City on Sunday, September 23rd. The celebration brings Indian leaders from diverse fields to engage, inform and partner with global dignitaries. 

Incredible India@60 has been brought to New York by Indias apex Industry Association, Confederation of Indian Industry (CII) and the Ministry of Tourism, Government of India. The campaign promotes Indias vibrant democracy, diversity along with its remarkable development and impact on world business and culture. Various events will highlight Indias cultural fare, including fashion shows, musical performances, dance and culinary programs. In addition, separate sessions will cover a variety of business initiatives and feature prominent speakers and captains of industry to inspire debate and discussion. 

Sunil Bharti Mittal, president of the Confederation of Indian Industry (CII) and Chairman of Group MD Bharti Enterprises, is the lead of a 30 member strong CEO delegation, all of whom represent the voice of Indian industry. 

"India has come of age and today is the fastest growing free market economy, said Mittal. India has a 9.4 percent GDP growth, $475 million USD infrastructure investments, over 500 million young people driving the economy, and the fastest growing telecom market in the world. 

Mittal acknowledges that India is a work in progress but believes it has a good story to tell. We wish to present India to the world in New York through Incredible India@60. 

Agreeing with Mittal, CIIs Chief Mentor, Tarun Das, added "India is a continent of confidence. There are challenges to its growth, but we recognize the challenges. We feel good and want to shake hands with the world, and strongly believe that Incredible India@60 will show the world a new contemporary-facing India." 

India@60 is the largest initiative undertaken by CII outside India to showcase the plurality of Indias cultural, business, intellectual, and culinary delights. The program represents a unique collaborative effort of business and government comprising 41 Events, 13 Conferences and Panel Discussions, 9 Cultural performances, 3 Dinners and 7 Receptions by partners/sponsors in addition to ongoing events on all 4 days. 

Incredible India@60 is the largest brand India show held anywhere. The scale of the campaign is huge and the message simple, Experience India, said Nandan Nilekani, co-chairman of the board of Infosys Technologies, Ltd. and chairman of the Incredible India@60. "The top leadership of India from government, Indian industry and the cultural czars are coming together in New York to present vibrant India. Incredible India@60 will showcase the plurality and richness of India's cultural, business, intellectual and culinary delights.


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## Bushroda

*Vodafone brand becomes India-wide* 
BBC News, UK
Thursday, 20 September 2007

*The British mobile telephone company, Vodafone, has begun using its brand across India, officials say.* 

This follows the company's $11.1bn purchase five months ago of the Indian cellular firm, Hutchison Essar. 

The company says that the brand change is one of the biggest in the country, covering nearly 35 million customers and 400,000 shops across India. 

Officials say it will be one of the world's biggest rebranding campaigns and will cost several millions dollars. 

Correspondents say that Vodafone's purchase of a majority stake in Hutchison Essar India in March is vital to the British company's earnings growth, as it grapples with saturated cellular markets in the developing world. 

The company says that it wants to become the top mobile provider in India by 2010. 

The country is one of the world's fastest-growing cellular markets, with more than six million new customers a month. 

India's economy is growing fast and its burgeoning middle class means the market for mobile phones is rocketing.


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## Bushroda

*Latin America-Asia trade accelerates*
BY JANE BUSSEY
Posted on Thu, Sep. 20, 2007
MiamiHerald.com, USA

When it comes to Asia, ''more of the same'' is ruled out for Latin America as the countries scramble to find new markets and new investment, experts said Thursday.

Trade between a number of Latin American countries and China and India has been growing at double, triple or quadruple digits in the last decade, said Antonio de Aguiar Patriota, the Brazilian ambassador to the United States.

In the past five years, Brazil's total exports have jumped from $60 billion to $155 billion, the Brazilian diplomat told the attendees at the annual The Miami Herald Americas Conference, which this year focused on the theme ``Latin America and the Caribbean: More Competitiveness or More of the Same?''

''This would not have been possible if we had kept all our bets in traditional markets,'' Patriota said at the Biltmore Hotel in Coral Gables. Not only does Brazil supply increasing amounts of iron ore and soybeans to China's growing market, but the two countries have also launched three satellites together.

''The trade with China does not present the same type of challenge as it does for Mexico,'' he said.

While economic relations between China and Latin America are characterized by exports of raw materials from countries like Chile, Argentina and Brazil to China, Central America and Mexico have experienced strong competition from cheap Chinese imports and have lost some of their assembly industry as corporations move their businesses to Asia -- especially China, which has become the favored factory floor for much of the United States and other countries.

Economic relations between Latin America and the Caribbean and India are much smaller, but in some cases represent less competition since India's economy is strongly based in the services sector.

Pramit Pal Chaudhuri, an Asia Society fellow, said that India's economic reforms started about 15 years after China began its push to attract investment and start exporting to the world as part of its globalization efforts. Now the economy is growing by at least 8 percent annually, with the high-tech, software, pharmaceutical and biotech sectors expanding by rates of 22 percent to 25 percent annually. Even the manufacturing sector has recovered from a decade of reversals and is growing at 10 percent yearly, said Chaudhuri, who is also the foreign editor of the Hindustan Times.

''Companies have become globally active,'' he said, noting that Indian acquisitions of companies around the world were doubling every year and expected to top $35 billion this year. India now has the largest number of billionaires in Asia, he said.

Trade with Latin America is very small but growing, Chaudhuri said, noting that because of an aggressive marketing campaign by Chile, wine from that South American country was more readily available in India than Italian wine.

The Indian information technology and services company Tata Consulting Services decided to open its Latin American headquarters in Montevideo, Uruguay, in 2001 after deciding against going into Argentina because of economic turmoil there, said Mario Tucci, who is Tata's vice president of Iberoamerica. Uruguay is also one of the software centers of the region and its government is small enough that a company can gain the attention of the government and business sector, Tucci said.

Tata, which has worldwide headquarters in Mumbai, India, now has software development centers in Brazil, Chile and Mexico, serving customers in the United States, Latin America and Europe.

''We do believe that Latin America can help India enter into Europe,'' Tucci said, noting that the company can often find Latin Americans who speak European languages -- from Greek to Polish -- living in countries like Uruguay.


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## Bushroda

*Does Urban Development Drive Rural Growth in India?*
Knowledge@Wharton 
September 20, 2007

A topic that is often discussed in India across political corridors, corporate boardrooms and households is the rural-urban divide and how the country's two economies -- the rural and the urban -- are increasingly growing apart. The popular notion is that growth not only has been skewed towards urban India but also has been gained at the expense of the countryside. 

Some of this thinking can be traced back to economic decisions made soon after India won independence from Britain in 1947. At that time, policy makers emphasized capital-intensive industrialisation and urban infrastructure rather than agricultural investment and rural land reform, leading to the urban-rural imbalance. Often overlooked in discussions of this issue, however, is the fact that the rural economy is no longer limited to agriculture. During the past two decades, rural India has diversified significantly into non-farm activities -- and this has brought India's cities much closer to their hinterlands than people might imagine. 

Those insights into the changing relationship between rural and urban India come from Roopa Purushothaman, a U.S.-trained economist who first gained prominence as a co-author of the famed BRIC report published in 2003 by Goldman Sachs. (That report predicted that four economies -- Brazil, Russia, India and China, or "BRIC" -- would drive the growth of the world economy over the next 50 years.) Purushothaman has now moved to India and is the chief economist for Future Capital Research, part of Future Group, a fast-growing Indian retailer. 

Speaking at the recent Global Supply Chain Summit 2007, organized by the Indian School of Business in Hyderabad, Purushothaman maintained that despite the "near devotional status" of the rural-urban divide, fundamental misconceptions exist about how these two economies in India interact with one another. "Most of the discussions on the rural-urban divide are based on anecdotes about rural India, but if we look at the data, the story in rural India is a lot more dynamic that it gets credit for," she said. 

Purushothaman and two colleagues -- Saurabh Bandopadhyay and Anindya Roy -- have written a paper titled, "Is Urban Growth Good for Rural India?" which addresses these questions. "Our studies show that a 10% increase in urban expenditure is associated with a 4.8% increase in rural non-farm employment," Purushothaman says. "As supply chains strengthen across the country, growing urban demand could provide a significant boost to the rural economy." 

In their research, Purushothaman and her colleagues uncovered four links between rural and urban economies: Production relationships, consumption relationships, financial linkages and migration. Their study explores the consumption connection and highlights the impact of growing urban consumption expenditure on rural employment and incomes. The categories of consumption expenditure the researchers studied include food, housing, health, transport, education, clothing and footwear, consumer durables, automobiles, entertainment, household appliances, toiletries and cosmetics. Using an econometric approach spanning the past 26 years, their study shows that a Rs. 100 ($2.50) increase in urban consumption expenditure leads to an increase of Rs. 39 (just under $1) in rural household incomes. The channel through which this takes place is increased employment in the rural non-farm sector. "Our interpretation of the data suggests that a sustained urban household consumption growth rate, similar to that seen over the last decade, could lead to 6.3 million non-farm jobs in rural areas and $91 billion in real rural household incomes over the next decade," she notes. 

*Rural India: Myths and Reality*

Purushothaman emphasizes that rapid changes in the country's consumption and production patterns require a more nuanced understanding of the integration between urban and rural India rather than falling back on traditional myths about the rural-urban divide. She lists three urban myths about contemporary rural India. The first is that faster economic growth in urban India -- as compared to rural areas -- is driving rapid urbanization; second, that rural India is still an agricultural economy; and third, that rural-urban inequality is on the rise.

The reality, Purushothaman points out, is very different. During the past two decades, the rural economy in India has grown significantly faster than the urban economy. During the past decade alone, the rural economy is estimated to have grown on average by 7.3% as compared to 5.4% in the urban economy. The latest Central Statistical Organisation figures show that the rural economy accounted for 49% of India's GDP in 2000. This is a significant increase from 41% in 1981-82 and 46% in 1993-94. 

Purushothaman points out that with agriculture only growing at 3.2% on average, much of this growth is driven by the rural non-farm sector. As of 2000, agriculture accounted for 51.8% of rural economic activity. This represents a significant decline from 64% in the early 1980s and 72% in early 1970s. Moreover, services -- which accounted for 21% of rural activity in 1981 -- now account for 28%. In addition, manufacturing, utilities and construction have nearly doubled their share in the rural economy, from just under 10% in 1971 to 18% in 2000. "It is the growth in the non-farm sector that has been really crucial for rural India. A lot of the drivers for the rise in the non-farm sector have come from manufacturing, construction and trade, hotels and restaurants," she said. 

Purushothaman also debunked the popular notion that India's economic growth is driving rapid urbanization. According to Census data, while rural-urban migration as a share of total rural population was 6.5% in 1981, in 2001 it fell to 2.8%. The study points out that "the slow rates of rural-urban migration along with declining rates of natural increase in urban areas" indicate that the process of urbanization in India is actually slowing down as a result of economic growth. 

According to Purushothaman, policies that inhibit the growth of labor-intensive industries and a lack of urban infrastructure investment have slowed the process of urbanization. "There is a lot of demand to move into urban India, but the infrastructure and labor policy initiatives don't support it," she says. Purushothaman adds that the slow process of urbanization in India, despite the growing economy, is a different scenario than what exists in the rest of Asia. She claims urban growth in India has been too slow during the past 20 years and it needs to accelerate further. 

On the issue of rural-urban inequality, research by Purushothaman and her colleagues indicates that the urban-rural income gap (or the ratio of mean urban to rural incomes) has decreased since the early 1990s. "Though this [change] is not very dramatic, it is happening in a very different way from what we see in other economies. In China, for instance, rural and urban inequality has increased as a result of growth."

Rural employment figures also reveal interesting insights. Between 2000 and 2005, rural agricultural employment growth was as low as 1%. This indicates that growth in the agricultural sector has not really resulted in a significant increase in jobs in the countryside. In contrast, during the same period, non-farm jobs have gone up by 20%. 

Purushothaman emphasizes that agricultural growth will not sustain the rural economy. Her research shows that India's average yield per hectare today is roughly half that of China, although the agricultural sector in India employs roughly six million more people. In contrast, India employs just seven million people in the formal manufacturing sector compared with more than 100 million in China. "In a situation where agricultural capacity is limited and the urban economy is not fully able to absorb a growing labor force, the rural non-farm sector could act as an outlet for surplus semi-skilled labor. Urban demand, therefore, could be an important and largely overlooked engine helping to drive this shift from farm to non-farm employment in rural India," Purushothaman notes.

*Role of Retail*

Other Indian economists agree with Purushothaman's findings. N. Viswanadham, executive director of the Centre for Global Logistics and Manufacturing Strategies at the Indian School of Business, says it is true that "urbanization has slowed in India." He also believes, like Purushothaman, that for rural India to grow, urban spending must increase. "As supply chains strengthen, urban demand will definitely boost the rural economy," he says. He adds, however, that in addition to urban consumption, retail will be a major driver of growth in rural India. 

"Worldwide, retail is among the biggest drivers of growth and employment," Viswanadham notes. "In India, unfortunately, the retail revolution has come rather late in the day. But going forward, I believe that urban retailing will fuel rural growth in a very significant manner, and this will be both agricultural and non-agricultural growth." He argues that as urban retail expands, it will necessarily move a lot of action to the villages. As a result, rural and urban supply chains will be integrated. 

In his book titled, Achieving Rural and Global Supply Chain Excellence: The Indian Way, Viswanadham points out that rural supply chains lack sophisticated infrastructure, and they mostly deal with food and other agricultural products, handicrafts, toys and apparel. Though these supply chains are underdeveloped, they are still extremely important because they provide food and clothing to urban India. Moreover, 70% of India's population depends on the production and distribution activities of these networks for its livelihood, he adds. 

India's retail sector has a market size of some $300 billion, of which barely 2% to 4% is in the organized sector. The industry, however, is going through a massive transformation and the share of the organized sector is likely to increase to 20% to 25% by 2010. "India is all set for a retail revolution," says Viswanadham. "As rural supply chains are integrated with those of organized urban retailers, this will be a critical driver of rural growth."


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## Bushroda

*The malling of Bangalore*
*The rise of a new middle class in India's Silicon Valley has led to a demand for western-style shopping malls. Fortune's Sufia Tippu breaks ground. *

By Sufia Tippu, Fortune Magazine
May 16 2007: 12:15 PM EDT

In June an Indian developer based in Oman is expected to break ground on a two-million-square-foot shopping complex in downtown Bangalore that will be India's largest mall. Nine other malls are on the drawing board for the epicenter of India's tech revolution, including projects by liquor baron Vijay Mallya, retailer Pantaloon and the Tata Group, India's largest business conglomerate. 

What's driving the surge in mall projects in Bangalore is the rise of a new middle class. Many have been exposed to shopping malls in the West. "Disposable income is rising," says P.N.C. Menon, chairman of Sobha Developers, which is spending $250 million on Bangalore's biggest mall, scheduled to open in 2009. 

The Sobha Global Mall, as Menon's shopping paradise will be called, features stores built around a skylighted atrium on 16 acres, a 13-screen multiplex, food courts, a rooftop disco, a 300-room hotel tower and enough parking for 3,400 cars. It is being built not in Bangalore's newer, more upmarket neighborhoods but in the center of the city, a kilometer from the bustling train station. 

"I don't want this to be merely the largest shopping mall in India," says Menon, 59, who established his reputation for quality by building palaces in the Gulf and most of the California-style campus for Infosys (Charts), the Bangalore tech giant. "This should be a one-of-a-kind experience for the shopper - never to be forgotten, always to be relived and to come back to again and again." 

Although relatively small by global and even regional standards - the South China Mall in Dongguan, China, with 7.1 million square feet, is the largest in the world - the Sobha Global Mall promises to set new standards in a country that already has 100 malls of more than 200,000 square feet. That number is expected to increase to 350 in the next two years as retailers, both domestic and foreign, seek to bulk up their operations in India. 

Wal-Mart (Charts, Fortune 500) recently inked a deal with India's Bharti to open a chain of superstores, and Reliance Industries is spending $5 billion to expand into the retail sector. "There are so many global brands, such as Burger King (Charts) to Taco Bell to Chili's, waiting to enter India," says Bikash Kumar, managing director of Integrated Retail, an Indian retail and technology-services company. "To break even, stores have to see top-line sales of $1 a square foot a day. They believe they can achieve this here in India." 

Not everyone is so upbeat. "Building the largest mall doesn't necessarily mean it will be successful," says Atul Mahajan, principal consultant at Technopak, a management consultancy in Bangalore. "There are so many huge malls that are almost empty in China. You need a right mix of tenants for it to be successful." 

Menon won't reveal which, if any, retailers have committed to opening stores in his mall. All he will say is that they will include some of the world's best-known names in retail and perhaps his own branded chain of home stores, which he is launching soon. But judging from his previous work, he won't have any trouble attracting quality merchants. 

A native of Kerala, in southern India, Menon moved to Oman when he was 24 to redo the interior of a photographer's small studio. He went on to make a fortune building luxury hotels and resorts in Dubai, Oman, Egypt and France and started taking on projects in India only a decade ago. 

Sobha is the only company in India and possibly the world that makes almost everything that goes into its buildings - from concrete blocks to electrical and plumbing fittings to doors and windows and metalwork parts made at its Bangalore factory. "It is this backward integration," Menon says, "that gives us absolute control over quality at every level." 

That attention to quality impressed Narayana Murthy, chairman and chief mentor of Infosys. "Menon is the first builder with a world-class quality that I have come across in India," says Murthy, who hired him to construct a number of architecturally distinctive buildings on the company's Bangalore campus. "He is an artist." Menon has also built Hewlett-Packard's (Charts, Fortune 500) training center in Bangalore and is putting up a new factory for Dell (Charts, Fortune 500) in Chennai. 

Will he be able to translate his artistry to the world of retail? That depends, says N.G.N. Puranik, director of Enam Financial Consultants in Bangalore. "If India is able to sustain a GDP growth rate of 8 percent, the demand would definitely be there," Puranik says. "But they have to invest in the back-end infrastructure - supply chain, logistics and warehousing - not just the front end." 

Menon, whose quiet manner belies his obsession for perfection, doesn't seem the least bit worried. "India," he says, "will never have a deficit of shoppers."


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## Bushroda

*Displaying the hallmarks of a rapidly expanding economy*
Ashling OConnor
From The Times
September 22, 2007

The investment arm of LVMH, the French luxury goods maker, will spend up to 500 million (£348 million) acquiring and investing in brands in India, according to one of the companys regional executives. 

L Capital Partners will make the substantial investment in the sub-continent as part of a 1 billion private equity fund for emerging markets in Asia to be launched in the next 12 months. 

Mainstream investment projects include retail chains and jewellers and, in the alternative sector, Ayurvedic medicine producers and spas will be targeted. The group is already in talks with Hidesign, an Indian handbag and accessories designer, about taking a 20 per cent stake. 

Ravi Thakran, group president of LVMHs operations in South Asia, said: We are looking to invest in retail, and brands of Indian origin. He added that Group Arnault, LVMHs holding company, would also invest in Indian property. 

The move comes amid an explosion in the luxury goods sector fuelled by Indias increasing affluence and a foreign investment environment that allows single-brand retailers to own 51 per cent of the equity in an Indian operation. LVMH, which owns TAG Heuer and Moët & Chandon, has two shops, in Delhi and Bombay. 

This month it emerged that Louis Vuitton, its flagship brand, plans to build a shoe plant in India, the worlds largest manufacturer of shoes after China. The factory, near Pondicherry, would be LVMHs first in Asia and would only attach soles to the shoes, enabling the company to retain its Made in Italy kitemark.


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## Bushroda

*Ready to read - Vogue India goes after the wealthy woman*
Ashling OConnor in Bombay 
The Times
September 22, 2007

The affluent women of Asias third-largest economy have finally been given access to the latest fashion news and gossip with the launch of an Indian edition of Vogue. 

The launch marks Condé Nasts entry into India, where the publisher believes there is an underserved, cash-rich consumer base and significant revenue potential in one of the worlds fastest-growing advertising markets. The magazine has an initial print run of 50,000 copies and is anticipating a readership of about 250,000. 

The English-language edition bears a cover price of 100 rupees (£1.25) and will feature international and Indian fashion, travel, health, music, food, society and culture. 

Most of the content will be commissioned in India, although articles could be syndicated from across Condé Nasts stable of 120 titles. It will be edited by Priya Tanna. 

The first-edition cover was shot by Patrick Demarchelier, the French-born fashion photographer who also did the first China edition in 2005. 

Vogues launch on the sub-continent coincides with a growing international interest in Indian designers, but is late compared with its rivals. Elle, the largest-selling womens magazine with a monthly circulation of 20,000, entered the market a decade ago. Cosmopolitan, Marie Claire, Seventeen and OK! also have a presence. But many foreign magazines, including Elle, are published by local partners under licensing deals because of market restrictions that existed when they launched. Although Condé Nast has had its eye on India for many years - Nicholas Coleridge, its Old Etonian managing director, has strong personal connections with the country  it did not execute an entry strategy until the Governments decision in 2005 to allow foreign media groups to own 100 per cent of nonnews publications. Vogue India is a wholly owned subsidiary of Condé Nast International. 

It helps you invest more and you have control of the brand and its destiny, Alex Kuruvilla, Condé Nast Indias managing director, said. 

The company plans further magazine launches. The next in line are GQ and Glamour. Within three to four years, it will have five titles in India. 

A glitzy launch party today, attended by the worlds fashion elite and the best of Bollywood, will give Vogue India a high-profile inauguration. But it faces challenges in a fragmented market that has seen foreign magazines struggle to attain significant circulations relative to the countrys size. Condé Nast insists the market is there for the taking. Its research shows there are about one million homes in India with an annual income of more than $100,000 (£50,000), representing the same number of women with the potential to buy high-end clothes and accessories. 

With the law allowing foreign investors economic control of single-brand retailing operations, top-end fashion houses such as Dior, Chanel and LVMH are an increasingly common sight in big Indian cities. This is changing the perception that Indians need to travel abroad to buy the most desired labels. 

The first editions advertising space  costing up to $10,000 for a premium page  was a sell-out, Mr Kuruvilla said. Luxury brands see India as a long-term opportunity, he added. Jean Paul Gaultier was here recently ahead of his own launch and Gucci just opened. The timing could not have been more provident for us.


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## Bushroda

*Asia Economies To Overtake As Western World Is Unprepared*
by Stewart Douglas
Investment Markets, UK 

The more developed global economies are not doing enough to keep up with the rise of India and China as economic superpowers, which could lead to significant global economic problems, according to a speech made today by a former president of the World Bank.

The richer economies have not yet adapted to the fact that the global power shift is headed towards the emerging giants in the East, and this could bring significant problems, according to James Wolfensohn formerly of the World Bank.

He also added that China and India would succeed as the number one and two global economies in terms of wealth and size by as early as 2040, leaving traditional superpowers trailing in their wake.

China has seen significant economic growth over the last few years, strongly trumping the rate of any other global economy. With growth figures exceeding double digits for several consecutive years, analysts are forecasting that at present rate China will soon overtake the US at the top of the world economic leaderboard.

Likewise, India has seen massive growth, largely as a result of a developing services sector through outsourcing from currenty large economies like the US and Europe. 

Whilst the growth is set to continue in India for the foreseeable future, some analysts are predicting that it will require clever economic management to maintain India at its current level of growth, particularly with cheap labour being their most valuable commodity at present.

However both economies are currently contending with the problems of inflation, which has called for significant interest rate hikes which could affect growth in the medium term. 

Wolfensohn criticised the colonial attitudes of Western economies to the emerging Easter powers for leaving many established economies unprepared for the tectonic shift the global balance of power will see over the coming decades.


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## Neo

*Indian mobile phone subscribers pass 200m mark *​ 
Sunday, September 23, 2007

NEW DELHI: The number of Indian mobile phone subscribers has passed the 200 million mark after the country added another eight million customers last month, industry figures show.

Indias wireless market, the worlds fastest growing, attracted a further 8.31 million wireless subscribers in August to touch 201.29 million users, according to figures from the Telecom Regulatory Authority of India (Trai) on Saturday.

The latest mobile milestone comes just over a year after India crossed the 100-million subscriber mark in May 2006.

At the end of August, India had 241.02 million telephone subscribers in total, compared with 232.87 million at the end of July.

The countrys teledensity the number of people owning a telephone out of every 100 people rose slightly to 21.20 percent by August-end compared with 20.52 per cent by July-end, the data showed. Among the wireless operators, Indias top mobile company Bharti Airtel added 2.05 million users in August, taking its subscriber base to 46.8 million.

The fixed-line segment stood at 39.73 million subscribers at the end of August while broadband connections rose by 90,000 to reach 2.56 million. 

Indias mobile revolution is mainly confined to the cities, but the real prize for phone companies is the vast rural market, where nearly 70 per cent of Indias 1.1 billion population live, analysts say.

The government is aiming for more than half a billion mobile phone subscribers by 2010.

By the end of 2008, three-quarters of Indias population will be covered by a mobile network. Many of the people in these new areas to be covered by mobile networks live in poor, rural districts with scarce health and education facilities and high illiteracy rates.

Indian mobile phone subscribers pass 200m mark


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## Neo

*India's Davos economy​*By Shashi Tharoor 

21 September 2007 

15 years ago, India had to mortgage its gold in London because the foreign exchange coffers were dry. Today, it has $140 billion in foreign reserves.

I DIDN'T GO TO Davos this year, but I've seen a list of the Indian delegates who did. They're a "Who's Who" of our country's business and industry, with an impressive sprinkling of top politicians and bureaucrats alongside.

It was not quite the A to Z of the Indian economy, but the A to V - the list ran from "Adi" (Godrej) to "Vilasrao" (Deshmukh, the Chief Minister of Maharashtra). Amongst the 67 names on the list were enough movers and shakers to cause a small earthquake, and the number of zeroes in their collective net worth would probably fill the rest of this column.

But impressive though that is, it's not the whole story of the Indian numbers at the World Economic Forum. I asked a prominent NRI businessman I know why he didn't go this year. "Oh, I did," he said. "But since I'm based in London, I'm not included in the Indian list."

The Indian presence in Davos is emblematic of a larger transformation in India, and in the way India is perceived internationally. It reflects the discovery of India by the world's financial markets.

When I first went to Davos in the early 1990s Indians were present, of course, but they bore the faint whiff of the exotic minority, noticeable but hardly worth noticing. The annual Indian reception thrown by the CII in those days was a semi-forlorn affair, overpopulated by official desis in bulging bandhgalas wolfing down samosas and beverages.

Today it's the hottest ticket in the town of the Magic Mountain; the lines of well-heeled international businessmen queuing up to shake the hand of Finance Minister Chidambaram are reminiscent of those involving ticket-holders to the World Cup final. Indians are sought after because India, indubitably, matters to the world.

And why shouldn't it? India's gross domestic product will rise by 9.2% this financial year, which means that India is annually becoming richer by more than $200 billion, an increase in one year that exceeds the total GDP of Portugal or Norway.

The level of investment in 2006-07 crossed 40% of GDP; just five years ago, it stood at 25%. If McKinsey are to be believed, some nine million jobs may be moved to India from the developed West in the next eight years.

India's foreign reserves have exceeded $140 billion, enough to cover 15 months' worth of imports; fifteen years ago, the country had to mortgage its gold in London because the foreign exchange coffers were dry.

The speed of India's growth is so remarkable that the IMF this year even warned of the risks of the economy "overheating". In Forbes magazine's published list of the world's billionaires, 27 of the world's richest people are Indians, and even more surprising, only four of them live abroad: Indian wealth is staying in India, and it's growing. 

Of course, a rather large portion of the world's poorest people live in India too, and you don't need to go to Davos to meet them. Our country's poor live below a poverty line that seems to be drawn just this side of the funeral pyre.

And yet, for all the tragic news of farmers committing suicide and the undeniably sad sight of human beings reduced to begging on our city sidewalks, there have been positive developments here too.

In 1991, 36 per cent of India's population (in those days, 846 million people), lived on less than one dollar a day, the World Bank's classic measure of absolute poverty. That added up to nearly 305 million people, giving India the dubious distinction of being home to the largest collection of poor people in the world.

In 2001, our population had grown to 1.02 billion people, but after a decade of economic reforms, however fitful, the percentage of those living on less than a dollar a day had fallen to 26%, or some 267 million people.

In other words, even though India had added 156 million more people to its population in the decade between those two censuses, the number of poor Indians had actually fallen by 37 million. The liberalised and liberated Indian economy had, in effect, lifted 94 million people out of absolute poverty in 10 years - a feat on a scale that no country on earth, other than China, had ever accomplished.

TODAY, FIVE YEARS later, estimates of people below the poverty level stand at 22 per cent. Economic growth is steadily chipping away at poverty, and it is doing so far faster than in the first four decades of Independence, when statist economic policies ruled the commanding heights in Delhi.

None of this is grounds for complacency. We still have a long way to go; 22% is still 250 million people living in conditions that are a blot on our individual and collective consciences.

We must take the necessary steps to ensure that every Indian is given the means to live a decent life, to feed his or her family, and to acquire the education that will enable him or her to fulfil their creative potential.

As an Indian, I'm chuffed at India's prominence at Davos, but to me that's not the most important measure of the country's international standing. I'm much more proud of the fact that India has shown a willingness to use its new-found prosperity to benefit others: it's an article of pride, for instance, that the Government has written off the debt owed to it for years by African countries.

Let us celebrate, too, the fact that India was quick to respond to the devastation that followed the tsunami and helped lead international relief efforts in Sri Lanka even though Indian victims needed attention.

India must show the world that it can go to Davos and stay true to its soul as well.

Khaleej Times Online - India's Davos economy


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## Marathaman

BELGRADE: An Indian company looking to cash in on eastern European "near-sourcing" has signed a deal here to construct an IT park that Serbia hopes will become the biggest on the continent.

The deal with Bangalore-based property developer Embassy Group was potentially worth up to 600 million dollars (425 million euros) over five years, which would make it Serbia's biggest ever greenfield investment, said Economy and Regional Development Minister Mladan Dinkic.

Greenfield projects are implemented from the ground up by an investing company on sites where there had been no previous activity. "I'm very satisfied ... that today I signed a memorandum of understanding for the construction of the first IT park in Serbia and, I'd say, the future biggest technology park in the whole of Europe," Dinkic told a press conference.

Initially, the technology park would occupy 280 hectares (690 acres) of land in an industrial zone of the northern town of Indjija, where it would employ around 2,500 IT professionals, said Dinkic.

However, depending on client uptake, it could be expanded during the next five years to offer global IT companies 250,000 square metres (2.7 million square feet) of office space for up to 25,000 employees, he added.

Embassy Group chairman Jitu Virwani welcomed the agreement for the project, which he said had already attracted interest from some of its biggest clients, such as IBM and Hewlett-Packard.

"We've been looking for an east European country, mainly from the perspective of having some of our clients from the IT sector to be servicing the eastern European market," Virwani said at the end of the signing ceremony.

"After a lot of research, we found Belgrade to be highly suitable for the needs of our clients, more from the perspective of costs.


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## Bushroda

*Powerful dash of new spice*
Greg Sheridan, Foreign Editor
The Australian, Australia 
October 06, 2007 

IN India, as in China, it's sometimes the raw numbers that tell the story. There are more than 200 million mobile phones in India.

And seven or eight million new phones are sold each month. With more than 1.1 billion people, India is already the world's second largest nation and its largest democracy

By 2030, or thereabouts, India will overtake China as the world's most populous nation. And its population is so much younger than China's that it will keep expanding for many more decades than its giant neighbour. India's army is the second largest in the world.

India's trillion-dollar economy is growing at the breakneck speed of 9per cent a year. Measured by parity purchasing power, India's is already the world's fourth largest economy. Measured by existing exchange rates, India's is the 10th largest economy. Either way, it's very big and getting much bigger, fast. 

These figures could go on and on. They are not the whole story. They are a part of it, a large part, certainly. But there is much more to India's rise as likely one of the great superpowers of the 21st century. 

That rise is historic in ways that are not generally understood. It is the first we've seen of a democracy, especially a democracy with global cultural power, since the US 100 years ago. Japan is the nearest other case. It first rose as a democracy in the first part of the 20th century, but its democracy was quickly distorted by militarism. Japan emerged after World War II to become a huge economy, but it was a strategic client of the US, and its foreign and security policies, and its projection of itself, were anemic, in part due to the need to live down its war record. 

India, on the other hand, is nobody's strategic client and its projection of itself is by no means anemic. 

Like the US, India will eventually shape the world we live in. This will happen in terms of hard power and soft power. This can seem hard to believe, given the enormous contradictions of India. It's true nonetheless. 

But first, here are some of those contradictions, in four images that will long stay with me after two weeks in India. It is just after dawn and I am catching the Shatabdi express train from New Delhi to Amritsar, from where I will journey to the border with Pakistan. Inside the first-class carriage of the Shatabdi, things are a little scruffy but perfectly modern. The cabin is airconditioned. Friendly attendants serve tea and breakfast. Mobile phones are buzzing. Some people have laptops plugged into power sockets in the carriage wall. 

But at the edge of the station platform, just as we are pulling out and just after we've left the station, are piles, metres high, of undifferentiated rubbish. Amid all this rubbish, dozens of people are living. 

One of them strikes me particularly, a comely woman, in a brightly coloured sari, lying back on a pile of ***** as though it's the sofa in her living room, and it is. 

On another day I join a group on a walking tour of Old Delhi. 

I join the group at the Turkoman Gate. Outside the gate, still in New Delhi, is a modern city -- noisy, cacophonous, car and truck horns blaring ceaselessly. 

But step a few metres inside the Turkoman Gate and you seem to have stepped back 500 years. Donkeys are carrying loads of earthen brick, every other household has a goat tethered in the street. The streets and lanes narrow at points to the width of a single person. I go to see a mosque built in the 1300s, and find myself standing in the middle of someone's lounge room, so unimaginably crowded are the living spaces. 

On another occasion a friend gets me invited to a huge dinner at the New Delhi home of one of India's leading commercial families. The house and grounds are straight out of Bollywood. 

There is a long, low, white bungalow, a vast and perfect green lawn and a generous buffet dinner under a huge marquee. 

But it is image No4 that is most important, and it is here that I may have discovered the soul of the new India. I spend one day at the New Delhi suburb of Gurgaon. If the traffic is good, Gurgaon is about a 40-minute drive from the heart of New Delhi. Soon it will be an even easier commute, for a metro line is being built. 

Gurgaon is home to many of the overseas call centres that have moved so many jobs from the First World to India. These are mostly middle-class jobs, not the super hi-tech IT high-flyers, though Gurgaon has its share of those too, and a manufacturing base. 

All over Gurgaon, building is taking place at a frenetic pace. There is talk of a dozen new top-line hotels. Huge apartment blocks are going up all over the place. These are not the drab, concrete monoliths of India's Soviet-influenced past, but gaily decorated, stylish buildings with faux minarets and domes and decorative balconies. These buildings, with their spacious grounds, have names such as Belvedere and Woodlawn. 

Beyond the apartments, I drive into a slice of California, a gated community of attractive but by no means lavish suburban bungalows. The gardens are green, and lovingly tended, the sidewalks are neat, a school bus drops off little girls in crisp, neat uniforms, their day's lessons complete. 

Gurgaon's real glory lies along MG Road, which is home to a seemingly endless line of shopping malls. All glass and swagger, these could have been relocated from Sydney's Chatswood or Melbourne's Doncaster. Most telling of all, they have clean toilets. These shopping malls are the quintessence of bourgeois living. 

In Gurgaon I witness the emergence of an authentic Indian middle class. No one will find mystical India in Gurgaon's shopping malls. The only things you chant there are brand names or drinks orders at Ruby Tuesday. But Gurgaon is the vision splendid of the Indian soul, the promise of a decent life for millions upon millions of people. 

The world is taking notice of India at last, not for its mystical soul but its booming economy. But it is not just the economy. It is the combination of India's hard power and its soft power which at every point will make it so formidable, which makes its rise potentially comparable with that of the US. 

The obvious factors compelling the world to take notice are India's economy, its military power and its nuclear deal with the US. But it is India's soft power that is most distinctive and that acts as a vast force multiplier to its hard power. Soft power is the ability of a country to get others to do what it wants without the use of force or the direct expenditure of money. 

India has this in abundance. India is a democracy and its success as a society is immensely important to the prestige of democracy. But India is also diplomatically and politically far more powerful just because it is a democracy. It is inconceivable, for example, that the US would do for anyone else the nuclear deal it is doing for India, a deal in which the entire global nuclear governance regime is being revolutionised. 

For India, like the US, its political character is a central component of its soft power. But India's soft power does not end there. It has a worldwide diaspora of 20 million, many of whom are immensely rich and powerful in their own right, and who look on India with great political and cultural fondness. 

Indians form the most successful ethnic community in the US and their support has been critical to the nuclear deal. 

India also has a huge cultural presence in the Western imagination. The ethical inheritance of Mahatma Gandhi is incomparable, and nearly universally recognised. 

Culturally, India has colonised Britain. London is now a common cultural space with India. Former British foreign secretary Robin Cook nominated chicken tikka marsala as the English national dish. 

The England cricket team, though still not up to much, always has a few Indian members. David Beckham became a star in the US because he was mentioned in the title of a smash hit, the Anglo-Indian film Bend it Like Beckham. The Indian star of that film went on to star in the US television series ER. 

Increasingly, the Indian diaspora is centred on the US. This is showing up in exquisite recent films such as The Namesake. Indian writers such as Vikram Seth and Rohinton Mistry and countless others are part of the Western mainstream. The Indian film industry, intensely popular in many nations, is a force to rival Hollywood. Thus, through films and novels and much else, millions of Westerners experience Indian culture intimately and positively. 

If we are not yet living in a world made in India, we are increasingly inhabiting a world imagined by Indians. It can only get more interesting as new spices are added.


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## Flintlock

'Made in India' rising to challenge China: Report

NEW DELHI: "Made in India" could be the next big economic story with the country challenging China's position as the leading global manufacturing hub within five years, says a new report.

Right now China is the favourite choice for outsourcing manufacturing while India is preferred for information technology, finance and customer services, said Capgemini, Europe's largest computer consultancy.

But "there's a very keen interest in moving more manufacturing to India," said Roy Lenders, vice-president at Capgemini Consulting Services and the report's author.

In fact, "India could challenge the position of China as the manufacturing centre of the world in the next three to five years," Lenders said, citing a survey of 340 mainly Fortune 500 global manufacturing companies.

"What surprised us was when we asked about their plans for the next three or four years, they said outsourcing manufacturing (to India) was a higher priority than outsourcing back office work," he said in a telephone interview from Utrecht in the Netherlands.

"If we look at the respondents' plans for the coming years, manufacturing will become the number one activity to be off-shored to India," Lenders said, with lower costs the key factor driving the trend.

Right now, China's share of the world's manufacturing exports is more than eight percent while India stands at just under one percent.

But "the interest of global manufacturers in manufacturing in India is very high compared to China. In terms of trend there will definitely be a move. China has a reason to be worried," Lenders said.

However, India must improve its infrastructure with nearly half of the firms surveyed that had already outsourced manufacturing to India complaining about a lack of manufacturing and supply chain infrastructure.

India's ramshackle infrastructure of potholed roads, dilapidated ports, shabby airports and erratic power is regularly cited as an obstacle to economic growth along with the maze of red tape.

It has already taken some steps to promote an export-led manufacturing boom by setting up special economic zones or SEZs -- havens of economic freedom that drove China's industrialisation.

But even more "substantial investments" need to be made, Lenders said. The lead factor driving India's new manufacturing popularity is price, he said. Some of the main manufacturing sites in China are becoming too pricey.

Chinese manufacturing wages are 250 to 350 dollars a month whereas they average 100 to 200 dollars per month or lower in Thailand and other parts of Asia. In India factory jobs start at 60 dollars a month.

Analysts often point to South Korea's Hyundai Motor's one-billion-dollar car plant in the southern city of Chennai which opened in 1998 and turns out thousands of export-bound cars annually as an example of what could be the future for the Indian economy.

Hyundai has been moving production of its smallest cars to India to exploit lower costs. Now other firms have followed suit.

India's Auto Components Manufacturing Association expects global sourcing of parts from the country will double to 5.9 billion dollars next year and hit 20 billion dollars in seven years.

All the international players "are looking at India as the new sourcing hub," said association vice-president JC Chopra. Others setting up manufacturing facilities in India include Finnish telecom leader Nokia, South Korean steel heavyweight POSCO and US computer giant Dell.

And the companies don't only have their eyes on foreign markets. India's huge domestic market of 1.1 billion people is also a draw along with its push to boost infrastructure.

"India is building like hell, improving its infrastructure, so a lot of suppliers would like to be there," said Lenders.


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## solid snake

*Soaring Indian rupee in uneasy zone​*
NEW DELHI, Oct 13: Indias finance minister has said unprecedented foreign investment flows into the rapidly growing economy have pushed the rupee higher into an uncomfortable zone.

Finance Minister P. Chidambaram said the country was having problems in handling the rush of funds.

We must find ways to manage a competitive exchange rate without hurting investments, Chidambaram told a conference organised by the Hindustan Times newspaper late on Friday.

The rupee is in an uncomfortable zone, he said.

Lifted by a tide of overseas money into domestic shares following a cut in US interest rates last month, the currency strengthened beyond the psychologically key 40 rupees to the dollar barrier.

This is a new situation, Chidambaram said. But we are not alarmed by it.

We will gain mastery.

The rupee finished the week Friday flat against the dollar at 39.3, a nine-and-a-half year high.

Dealers say the central bank has been buying dollars to restrain the rupees rally and protect exports which have been slowing.

But analysts say there is relentless upward pressure on the rupee and expect it to gain further as foreign investors buy shares and pour money into plants and infrastructure projects to exploit the booming economy.

As of Fridays finish, the benchmark Bombay Stock Exchange Sensitive Index, or Sensex, had gained nearly 34 per cent this year, led by record net overseas fund inflows of $16.54 billion.

Some analysts say the rupee could be at 38 to the dollar by mid-next year or even lower. The rupee has already risen by over 11 per cent this year against the dollar, making it Asias best performing currency.

Chidambaram said as long as investors were getting good returns I dont believe they are waiting to take their money out.

The benchmark Sensex stock exchange index has risen over 15 per cent since the US Federal Reserve cut interest rates by 50 basis points on September 18.

The liquidity outlook for India equities remains positive... but the magnitude remains excessive by historic standards, said Bharat Iyer, head of equities at J.P. Morgan Chase.AFP

Soaring Indian rupee in uneasy zone -DAWN - Business; October 14, 2007


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## tyagi

Emission cut to cost India $2.5 trillion


GOA: It could cost India a whopping $2.53 trillion in investments to reduce greenhouse gas emissions by 9.7&#37; by 2036 if 1990 emissions levels are taken as the baseline. Worse still, undertaking technological changes that help increase efficiency in the way India uses its fossil fuels (like petroleum which emit GHGs) will become extremely exorbitant. 

This startling figure has been thrown up by studies being carried out and commissioned by the Indian government to understand the impact of climate change and its mitigation. The revelations were made by Dr Prodipto Ghosh, retired secretary of the environment and forests ministry, speaking at a conference organised by The Energy and Resources Institute and KAF, a Germany based think-tank and funding organisation. 

While there was some scepticism about the figure, the meeting saw an emerging consensus among the gathered experts that the toll such emission cuts and adoption of new technologies would take is huge. &#8220;If India undertakes any kind of commitments under the UN framework on climate change, it is bound to hit Indian economy,&#8221; said a key Indian negotiator on the sidelines of the meeting. Developed countries have begun a loud campaign demanding that India and China too undertake some kind of binding targets to cut emissions just like the developed countries do under the existing regime. 

TERI has been commissioned by the environment ministry to bring out a white paper on climate change ahead of the critical UN conference of all countries on climate change in December. Dr Ghosh, speaking at the meeting, said that the amount needed for abatement of climate change causing gases under existing technological innovations would be so massive that it would exceed the GDP of all countries except Japan and the US at 2004 levels. 

Also based on computations made at TERI, taking into account data and methods also used by the International Energy Agency, France, the cost of demanding high levels of efficiency from the manufacturing sector from India could hit Indian economic growth beyond a limit. The calculations show that India could achieve another 3% efficiency in its total energy consumption methods without pinching its growth but any further push to increase efficiency would hurt the economy and future growth.


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## tyagi

Whoosh! From 18K to 19K in just 4 sessions


MUMBAI: Four trading sessions &#8212; that's what it took the sensex to rally from 18k to 19k, making it the fastest 1,000-point run in the history of the 21-year-old index. If you think that's a milestone, consider this: Over the last month, the sensex has gained 3,500 points. And during this period, four of its five all-time highs were achieved. 

"Milestones are a stone's throw away," muttered a derivatives strategist at a domestic brokerage even as the sensex closed at 19059. 

The question is, what's feeding the frenzy? The answers at 19K remain what they were at 18K. Unabated buying interest by foreign fund managers because returns from India remain among the best in the world; and expectations that in the future, the Indian economy and corporates will continue to do well. 

In any case, these are variables that don't change over four trading sessions. Which is why, foreign institutional investors have pumped $7 billion into Indian stocks in less than a month. 

The rush for Indian paper started on September 19 after Ben Bernanke, chief of the US Federal Reserve, cut key interest rates in an attempt to save the world's largest economy from dipping into a recession. Call it the Ben(ji) effect if you will! 

He cut interest rates due to the sub-prime mortgage mess. Sub-prime loans are extended to people with low income and hold the potential for default. The gamble American lending institutions took was that with a certain degree of controls, they wouldn't default. But high interest rates in the US started pushing up the numbers of people who couldn't repay the loans. 

As it turned out, American banks had a huge exposure to this segment of borrowers and many started tottering under the weight of defaults. The problem had reached proportions that threatened to derail the American economy. Bernanke reckoned that if he cut interest rates, it would be easier for people to service their loans and the financial services sector could ride out the storm. 

But investors in the stockmarket saw it differently. It would be some time before the American financial system recovered from the mess it had gotten itself into. In any case, with lower interest rates, returns on their investments would go down. It made sense, therefore, to look at safer markets that offered better returns. Like India. 

"India is being looked at much differently today than a few months back," said a dealer at a foreign brokerage. To that extent, India has been re-rated. Going by FII inflows over the last couple of weeks, it is tempting to believe the India re-rating story is playing itself out well. 

In the days ahead, institutional players believe FIIs will become specific in their stock selection, but deal sizes will increase substantially. "FII buying is expected to be more stock- specific, driven by strong growth stories rather than broadbased buying," said Naresh Kothari of Edelweiss Securities.


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## tyagi

Global risks not to overwhelm Indian economy, says PM 

NEW DELHI: Risks emerging from slowdown in the global economy will not overwhelm the Indian economy and pose 'no great danger' for the country, the Prime Minister, Mr Manmohan Singh said on Friday. 

He said risks from the global slowdown are "acceptable ...and as of now I think there is no great danger that these will overwhelm us or derail our economy". 

However, he said if the global economy goes into downturn there are risks for the Indian economy as well. But these were acceptable risks, he said. 

"When you get integrated into the global economy what happens in the rest of the world does affect us, now that our foreign trade is a much larger proportion of our national income and now that capital inflows from abroad are significant part of the stor y of financing investment in the country," the Prime Minister said at the HT Leadership Summit here. 

He said India's relations have become more broad-based and wide-ranging with a large number of countries. 

"As our share of global trade and capital rises, as our economy becomes more globally integrated, we will become even more engaged with the global economy. India's voice will be heard, India's views will be sought," he said. 

In the past five years, the Indian economy has grown close to nine per cent achieving higher level of integration with the global economy. 

The world economy is estimated to slow down from 5.2 per cent in 2007 to 4.8 per cent this year. 

The US economy grew by 1.9 per cent in July this year, against 2.8 per cent a year ago. Euro zone is also expected to report slower growth of 2.1 per cent against 2.5 per cent. - PTI


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## tyagi

S&P says Indian economy to grow by 9 pct in 2007

MUMBAI (Reuters) - International ratings agency Standard and Poor's said on Tuesday it expects India's economy to grow by 9 percent in 2007 and 8.8 percent in 2008.

Indian interest rates were clearly peaking, and the rupee was likely to end the year at 40.5 per dollar, S&P said in a report released in Mumbai.

The Reserve Bank of India forecasts the Indian economy to grow by 8.5 percent in the fiscal year ending March 2008.


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## Neo

*Petroleum exports to touch $497b by 2012​* 
(IANS)

15 October 2007 

NEW DELHI Export of petroleum products from India is likely to reach $497.01 billion within the next five years, said a study by industry body Assocham. It said exports of petroleum products are growing at a faster rate than imports.

Petroleum products exported by India have been growing at an astonishing rate of 73 per cent for the past three years, according to "Petroleum Trade", a study done by Associated Chambers of Commerce and Industry of India (Assocham). 

"Petroleum exports were valued at $0.03 billion in 1999-2000, which increased to $18.53 billion in fiscal 2006-07, growing at a compound annual rate of 96.5 per cent. Imports on the other hand, increased from $12.6 billion in 1999-2000 to $57 billion in 2006-07," Venugopal Dhoot, president, Assocham said in a statement. 

"Even as energy requirements of Indian economy are rapidly increasing, capacity expansion of public- and private-sector refineries would help maintain the growth momentum of exports of petroleum products," he added. The study also indicated that the growth rate of petroleum imports had been declining over the past two years. It grew by 29.7 per cent in 2006-07 compared with a growth of 47 per cent the previous year.

The growth in imports, Assocham said, had been partly on account of the appreciating rupee, which increased by about 10 percent since March this year. 

The production of petroleum products increased by 50 per cent during the same period from 79,411,000 tonnes to 119,750,000 tonnes, Assocham said. 

Export of petroleum, oil and lubricants from Asia rose to $6.8 billion in 2006-07 from $4.3 billion in 2005-06. Within Asia, countries such as Sri Lanka, Indonesia and Japan are major oil products importing countries from India with exports worth $0.69 billion, $0.55 billion, $0.42 million, respectively, in fiscal 2006-07. 

Khaleej Times Online - Petroleum exports to touch $497b by 2012


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## Neo

*India needs reforms to lift growth: study ​* 
Friday, October 19, 2007

BANGALORE: Indias economy can expand at a sustained annual pace of 10 per cent over the next decade, but faster growth depends on deeper reforms, US-based investment bank Lehman Brothers says.

An economic boom marked by average annual growth of 8.5 per cent in the past four years, rising to 9.4 per cent in the 12 months to March 31, is no flash in the pan, the investment bank concluded in a report this week on the Indian economy.

The growth made Indias 900-billion-dollar economy the worlds 12th biggest last year, thanks in large part to policy reforms carried out in the past decade, said the 171-page report entitled Everything To Play For.

Impressive though its economic transition has been, we judge that India could grow sustainably even faster than at present, and faster than most other studies have suggested, at 10 per cent or so per annum over the coming decade, Lehman said. This judgement is contingent on India continuing to actively pursue structural reform, it said.

Illustrating the benefits of reform, Lehman said Indias investment-to-GDP ratio, at between 30 per cent and 40 per cent, was catching up with the rates regarded as intrinsic to the East Asian economic miracle. Foreign direct investment more than doubled to 19.4 billion dollars in the year to March 31 from the previous 12 months. From less than 6.5 billion dollars financed through the capital markets just five years ago, Indian companies raised about 30.7 billion dollars last year.

Indias economic resurgence goes back to the reforms that began in 1991 when the government, faced with a foreign exchange crisis, lifted socialist-style controls that had stifled private enterprise, trade and foreign investment for four decades. But progress in reforms has stuttered in the face of resistance from political parties and unions. Opposition from leftist allies has forced Prime Minister Manmmohan Singhs Congress party-led coalition to shelve key reforms such as privatisation of state-owned companies.

The government has also put in cold storage moves to raise the 26 per cent limit on foreign investment in insurance companies and open up the 300-billion-dollar retail market to giants such as Wal-Mart. The question is not whether 10 per cent economic growth is possible, but whether reforms are possible in the present political situation, said D H Pai Panandiker, economist at the private think tank RPG Foundation. Opposition from the allies is holding up reforms and that in turn is holding back faster growth, he added in a telephone interview from New Delhi.

Lehman said India needed to develop its financial markets, reduce public debt, ease restrictions for the banking, insurance and retail sectors and improve infrastructure and cut back its notoriously cumbersome bureaucracy. Public ownership of companies and banks remains excessive in India, which also needs more flexible labour laws for companies to increase employment in a country where half the 1.1 billion population is under 25 years old, it said.

India has learned a great deal from its structural policy reforms of the past decade and we suspect strongly that these lessons will be carried forward, and built upon, in the coming years, Lehmans India head Tarun Jotwani said.

Some economists argue that India has now developed a momentum where it can lift itself to 10 per cent growth even without reforms.

Reforms or no reforms, 10 per cent is possible, because the economy has become insulated from politics, said T K Bhaumik, chief economist at leading Indian conglomerate Reliance Industries. Going beyond that will require reforms, but whether further reforms are possible is a million-dollar question, he said in an interview from Mumbai.

India needs reforms to lift growth: study


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## Contrarian

*India has fifth largest forex reserves in world*


MUMBAI: India on Friday joined the elite group of world's five biggest holders of foreign exchange reserves as it added about $4.5 billion last week to take the kitty to $261 billion. The country surpassed South Korea, which had $257 billion in forex reserves as of September-end, to stand at the fifth spot. While India reports its reserve position every week, South Korea does so on a monthly basis.

China leads the pack with $1,434 billion, followed by Japan ($946 billion), Russia ($440 billion) and Taiwan ($263 billion). According to RBI's weekly bulletin released on Friday, India's foreign exchange reserves increased by about $4.5 billion during the week ended October 19.

The rate at which the country's foreign exchange kitty is growing, especially after the US housing mortgage crisis, the country will soon overtake Taiwan. Among the BRIC (Brazil, Russia, India and China) countries, Brazil has the lowest foreign exchange reserves of $164 billion, according to the latest IMF data.

The other major holders of foreign exchange reserves in the world include Singapore ($152 billion), Hong Kong ($141 billion) and Germany ($126 billion). Total foreign currency reserves of the members of the Eurosystem, including countries which have adopted Euro as their currency, have been estimated at $453 billion.

India's foreign exchange reserves have continued to grow despite the efforts of the government and Reserve Bank to moderate inflows and encourage outflows through various policy initiatives.

India has fifth largest forex reserves in world-India Business-Business-The Times of India


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## Contrarian

*Daimler plans to make heavy trucks in India*


TOKYO: Daimler, the world's largest truck-maker, has reached an agreement with a partner in India to jointly produce heavy trucks in the world's second-most populous nation.

"We have found a partner and we will make an announcement very soon," said Andreas Renschler, who heads the division, in an interview in Tokyo on Thursday. "If you move into these markets you have to locally produce things."

Navistar International, MAN AG and other truck-makers are entering India with local partners to meet demand in the world's second-fastest growing major economy.


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## Contrarian

Neo, keep posting here mate...you seem to have forgotten the existence of this thread!


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## Neo

*India to tap Africa for more crude ​* 
Friday, November 02, 2007

NEW DELHI: India will import about 38 per cent more crude oil from Africa within three years to feed growing domestic demand and fuel its development as an export hub, the petroleum secretary said.

Asias third-largest oil consumer is set to import 4.5 per cent more crude overall in the current financial year to end-March 2008, M S Srinivasan said late on Wednesday. Sixteen per cent of our crude imports, around 18 million tonnes, are imported from Africa. As requirement increases, imports will go up, Srinivasan said.

In the next two to three years, our imports from African countries are expected to be 20-21 per cent, around 24-25 million tonnes. Most of the crude would continue to come from Nigeria, but India also buys from Angola and Libya.

He said overall imports of crude will rise slightly next year. Last year, we imported 110 million tonnes, this year (2007/08) it is going to be around 115 million tonnes. We are trying to diversify our crude basket. We have been importing crude from well over 30 countries, he said.

India imports about 70 per cent of its crude needs and is adding export-oriented refining capacity, while Africa is fast emerging as an energy hotspot. India plans to expand its refining capacity by 62 per cent to 4.82 million bpd by 2012, to take advantage of its proximity to oil sources and emerging markets. 

India to tap Africa for more crude


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## Neo

*Indias trade gap narrows​*
NEW DELHI, Nov 1: Indias trade deficit narrowed by almost $2 billion in September from a year ago as exports surged despite strong rupee gains against the dollar, the government said on Thursday.

The trade gap for September was $4.42 billion, compared to 6.09 in the same month a year ago as exports rose 19.26 per cent to $12.79 billion while imports gained a modest 2.31 per cent to $17.21 billion, official data showed.

Indias rupee has climbed more than 12 per cent against the dollar.

Indias trade gap narrows -DAWN - Business; November 02, 2007


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## Neo

*Indian exports up 19 percent ​* 

NEW DELHI: Indias exports rose more than 19 percent in September from a year earlier, steady from the previous month, but analysts expect the rise in value of the rupee to stem the pace of growth in the months ahead. 

High global oil prices and robust demand for capital goods in a rapidly expanding economy are likely to maintain pressure on Indias import bill and widen the trade deficit, analysts said. 

The Indian rupee fell off 39.22 hit in early trade on suspected central bank intervention on Thursday. The level was its strongest since March 1998. But Septembers trade deficit narrowed 28 percent to $4.42 billion from $6.10 billion a year earlier, a government statement said. It stood at $36.92 billion in the first six months of the fiscal year that began in April. 

Analysts attributed the slowdown in imports to last years high base and were confident that they would pick up in the months ahead. 

High oil prices and a stronger rupee along with fast pace of economic activity would ensure that this dip in imports is a blip, said Siddharth Kapur, economist with ABN Amro Bank. Even the high base effect is at play in bringing down the year-on-year growth in imports in September. Non-oil import growth during the first half of the fiscal year has been strong at 34.13 percent. 

Exports rose to $12.80 billion in September from a year earlier  close to Augusts annual expansion of 18.9 percent to $12.69 billion  while imports grew a paltry 2.31 percent to $17.22 billion. 

During April-September, exports were up 18.52 percent to $72.28 billion from a year earlier, and imports rose 25.51 percent to $1.09 trillion. 

Exporters have been complaining about the sharp rise of the rupee against the dollar and the government has announced a series of measures to provide relief. But Trade Minister Kamal Nath said exports will pick up from October and the government hopes to meet its annual target of $160 billion. reuters

Daily Times - Leading News Resource of Pakistan


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## Neo

*India to get $944 mn loans from WB​*
NEW DELHI: India on Friday signed agreements for loans worth $944 million (Rs 3,400 crore) to help it revamp 400 industrial training institutes (ITIs), recapitalise rural cooperative banks and improve community-based water management banks. 

The biggest chunk of the loans is being earmarked for rural cooperative banks which would receive $600 million (Rs 2,160 crore). The package is part of a massive revamp planned by the government which also includes a $1 billion assistance from the Asian Development Bank. 

The restructuring which involves changes in regulation of cooperative banks is to be implemented through Nabard and will be spread over five years. 

The revamp of ITIs which is part of the multilateral agency&#8217;s India Vocational Training Improvement Project will include a $280 million (over Rs 1,000 crore) credit facility for the project that through a policy reform and also by making the design and delivery of training more demand responsive. Another 100 ITIs are being upgraded through central assistance, labour minister Oscar Fernandes said. The loan is spread over a four-year period. 

India to get $944 mn loans from WB-India Business-Business-The Times of India


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## Neo

*RIL inks $935 mn deal with Transocean​*
MUMBAI: Reliance Industries (RIL) is believed to have contracted drillships from worlds largest offshore drilling contractor, Transocean for $935 million. The contract has been awarded to a 50:50 JV company between Transoceans subsidiary and Pacific Drilling. 

The joint venture company will own two ultra-deepwater drillships, currently under construction at Samsung Heavy Industries shipyard in South Korea, of which one (Deepwater Pacific 1) has been awarded to RIL for a four year drilling contract, which may be converted on or prior to October 2008 to a five-year drilling contract. 
The drilling contract is expected to commence in the third quarter of 2009, following shipyard construction, sea trials, mobilization to location and customer acceptance. 

During the first six months of the contract, the contract dayrate charged by Transocean is $495,000, regardless of the duration of the remaining terms of the contract. The dayrate for the remaining three and a half years of the contract is $530,000. On or prior to October 31,2008, the contract may be extended to five years, in which case the dayrate would be reduced to $515,000 for the remaining four and one half years. 

Contract revenues which could be generated over the contract period are estimated to be $766 million for the four-year term. 

RIL inks $935 mn deal with Transocean-India Business-Business-The Times of India


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## Neo

*Jet eyes Brussels Air stake​*
MUMBAI: Last week, Jet Airways sent out invitations to the media to accompany its promoter Naresh Goyal on a trip to Brussels. The meet, the invitation read, was to showcase the airlines new VIP lounge at Brussels airport  the hub out of which Jet Airways runs its international operations. During the course of this visit, he also met the Belgian PM Guy Verhofstadt. 

The meeting with the PM has triggered intense speculation in Brussels that Jet Airways is interested in buying out a stake in Brussels Airlines. Highly placed sources in Belgium said, I cant believe he (Goyal) came here just to tell Verhofstadt that Jet Airways would expand in Brussels and open a new VIP lounge...A participation in Brussels Airlines, or maybe a takeover, was certainly on the agenda. 

Jet Airways recently chose Brussels as the hub for its international operations and is currently operating flights to the US and Europe via the city. The airline also has a code share agreement with Brussels Airlines to provide onward connections to various destinations in Europe and Africa. 

Brussels Airlines, held by SN Airholding  a consortium of Belgian corporate giants, reported revenues of nearly a Euro 1 billion in 2006. A stake, or a significant control in Brussels Airlines would mean a larger presence for Jet across 450 destinations in Europe. Sources at Jet Airways declined to comment. 

Sources in Brussels added, "SN Airholding was the outcome of a political pact to salvage some of the assets of the bankrupt Belgian national carrier Sadena. Although, the pact holds till 2009, a good bid could dissolve it earlier. Moreover, the group never had the intention to run the airline independently and would eventually sell out to a larger airline or forge an alliance." 

Some of the SN Airholdings shareholders are banks and pharmaceutical companies, which have been on the lookout to exit the airline since the last one year, as it is not their core business. In recent times, Brussels Airlines has been expanding its network and now operates flights to Africa, a sector monopoloised by Air France. "Owing to the Euro strengthening against the dollar, the airline is expected to post a profit for the current financial year." 
Jet has a debt gearing of three times and is looking to improve that through a rights issue of $400 million. 

Jet eyes Brussels Air stake-India Business-Business-The Times of India


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## Neo

*Inflation drops to five-year low of 3.02 per cent​* 
NEW DELHI: Inflation rate fell to 3.02 per cent, a new low in five years, closer to Reserve Bank's three per cent target for the medium term. 

The drop in inflation could be gauged from the fact that it was 5.61 per cent in the corresponding week a year ago. In the previous week, it stood at 3.07 per cent. 

This is the first official figure on wholesale prices- based inflation after the RBI announced its mid-term credit review on October 30, in which it asked banks to keep 0.5 per cent more cash with the central bank to tighten excess money supply in the system. 

During the week, prices of various items moved in a narrow range. In fact, in most groups, the price index moved up. This implies prices did move up, although at a slower pace. 

While food items like maize, arhar, masur and wheat turned expensive, some others like fish marine, bajra and urad turned cheaper. 

Among manufactured goods, prices of chemicals and chemical product prices declined while most other items rose. 

In energy segment, prices of bitumen, naphtha and furnace oil rose. 

Though inflation has been at sub-four per cent for quite some time, RBI has said rising international oil and food prices could push it upwards. 

The price of oil rocketed on Friday to a record 96.24 dollars per barrel on worries over tight supplies. 

On Thursday, Petroleum Minister Murli Deora had met Finance Minister P Chidambaram to weigh options to address the issue of impact of rising global petro prices on domestic oil companies. 

Inflation drops to five-year low of 3.02 per cent-India Business-Business-The Times of India


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## Bushroda

*India ready to get the world's money*
By John Zarocostas
Washington Times, DC
November 2, 2007 

GENEVA -- For many years, the world's largest democracy, India, watched frustrated from the sidelines as well-heeled foreign investors injected tens of billions of dollars of capital each year into communist China's economic miracle under way next-door  but not anymore.

Although China  with its powerhouse economy and double-digit growth rates  remains the top investment destination in Asia and in the developing world, its southern neighbor, India, is now seen with a more favorable eye in many boardrooms around the globe.

Last year, India attracted a nearly threefold increase in foreign direct investment to $16.8 billion, compared with $6.6 billion in 2005 and $5.7 billion in 2004, according to a new report by the U.N. Conference on Trade and Development (UNCTAD).

"Rapid economic growth has led to improved investor confidence in the country," says UNCTAD's world investment report for 2007.

A series of long overdue structural reforms are rapidly transforming India into a formidable player in many spheres of the world economy from traditional manufacturing to high-tech services.

The economy, which has in recent years posted growth rates of between 6 percent to 8 percent, is estimated by the Indian government to grow by 9.2 percent for fiscal 2006-07.

New Delhi is aiming for a growth rate of 10 percent by 2011, which Western economic think tanks, including the Paris-based Organization for Economic Cooperation and Development, say is achievable if the recent pace of reforms continues.

As in China, the big draw is India's massive and lucrative domestic market potential and its rapidly growing middle class, analysts say.

Moreover, India is also projected to overtake China to become the world's most populous nation by 2050.

According to the United Nations' 2007 world population report, India's population is forecast to reach 1.6 billion, up from today's 1.1 billion, and China's to increase to 1.4 billion, up from the 2007 level of 1.3 billion.

The UNCTAD report points out that U.S. multinational corporations such as Wal-Mart have entered the Indian market and that others such as General Motors and IBM "are rapidly expanding their presence."

Other global corporations are also lining up deals for a slice of the action.

Last year, POSCO, a South Korean steel producer, announced that it would invest $12 billion in a steel plant, and Japan's Suzuki Motor Corp. announced an expansion plan of $1.65 billion that will bring its annual automobile production capacity in India to 1 million, according to the UNCTAD report.

But investment specialists also emphasize that India still has a way to go before it can match China, which embarked on market-oriented reforms that included an overhaul of its command economy in the late 1970s.

Looking ahead, UNCTAD analysts expect the strong trend in foreign investment in India to continue the upward trend in the short term and surge in the long run.

Supachai Panitchpakdi, UNCTAD secretary-general, told The Washington Times that many Indian industries  from steel to automobiles and auto parts  are now "more geared to the global economy."

Mr. Supachai, a former deputy prime minister of Thailand, said that South Asia's largest emerging market was increasingly more integrated with the global economy and that Indian reforms under way are likely to increase the integration.

In 2006, India's merchandise exports grew 21 percent to $120 billion and its imports grew 25 percent to $174 billion, according to World Trade Organization data.

Seasoned investment bankers active in both of the world's biggest emerging economies say one attraction is India's large pool of English-speaking, skilled, price-competitive labor force.

On the downside, India still has a large rural poor population of subsistence farmers, many urban poor and millions who are severely hindered from breaking out of the cycle of mass poverty by deeply entrenched discriminatory social norms.

The country also has massive infrastructure needs and even greater social challenges, including high malnourishment  especially among children; low levels of adult literacy among women; and poor access to drugs and affordable health services.

The U.N. Food and Agriculture Organization estimates that from 2001 to 2003, about 212 million people  or about 20 percent of the Indian population at the time  were undernourished.

Still the UNCTAD report anticipates continued global foreign investment, which in 2006 was partly driven by increases in cross-border mergers and acquisitions, higher stock prices and re-invested earnings.

"Inflows in 2007 are forecast to reach $1.4 to $1.5 trillion, which would imply a new record level," it predicts.

UNCTAD's chief for investment analysis, Anne Miroux, said the agency projects an overall increase in foreign investment flows destined for developing countries, especially in Asia.

UNCTAD predicts that rapid growth in Asia is likely to continue, "underpinned by the strong performance of China and India." Ms. Miroux added that markets seeking investment to the region "should keep pace with rapid economic growth in the next few years."

In 2006, foreign investment to Asia increased by 19 percent to a new high of $200 billion and accounted for more than half of $379 billion in investment to developing countries and transition economies.

China was the biggest recipient, ahead of Hong Kong, Singapore, and India.

But inward investment to China fell for the first time in seven years by 4 percent to a still very respectable $69 billion. The decrease was mainly due to a drop in financial-services investments. Hong Kong reached $42.8 billion, up from $33.6 billion the year before, and Singapore attracted $24 billion, up from $15 billion.

In 2006, foreign investment inflows to rich industrialized countries rose by 45 percent to $857 billion, with the United States the world's top destination with $175 billion, up from $101 billion the previous year, followed by the United Kingdom, with $139.5 billion, and France, with $81 billion.


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## Neo

*IMF chief warns India about limiting capital flow​*
WASHINGTON, Nov 3: International Monetary Fund chief Dominique Strauss-Kahn on Friday cautioned India that curbing capital inflows too much could undermine confidence in the country, Asias booming, third-largest economy.

Strauss-Kahn, in his first news conference a day after starting his new post as IMF managing director, said it was important to enhance the transparency of the capital flowing into the country but limiting it may not always be good.

The problem of this kind of thing is it may undermine the confidence in the Indian economy, Strauss-Kahn, the former French finance minister, said. It will have an influence certainly on capital inflows but not always a good influence.

I think the Indian authorities should think over several times before implementing this kind of instrument, he said.

The Indian government has ratcheted up efforts to ensure that capital inflows dont push the rupee out of control.

Meanwhile, the countrys stock market regulator last month tightened investment rules by clamping down on issuance of indirect investment notes, known as participatory notes, which are used by foreign investors not registered in India.

Strauss-Kahn said the rupees appreciation to record highs this week reflected strong economic fundamentals and a keen interest by foreigners to invest in the country. The appreciation of the rupee is driven by a lot of international capital flow to India, and that is the good news, he said, adding that companies increasingly want to establish offices in the country.

So an inevitable consequence of that, an unavoidable consequence of that, you have an important inflow of capital to India with a consequence on the rupee, he added.

The rupee jumped to a nine-and-a-half-year high on Thursday as investors bet on capital inflows into Indian markets after the US Federal Reserve trimmed interest rates, but suspected central bank intervention capped gains.

Even if it is not always easy to deal with an appreciation of your currency, as a European I can tell you, nevertheless it reflects good fundamentals, Strauss-Kahn said. You do not have to do anything which will in one way or another undermine this good luck.

IMF chief warns India about limiting capital flow -DAWN - Business; November 04, 2007


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## Flintlock

*Employees turn around Maharashtra transport utility*

For the first time since 1995, the state-owned Maharashtra State Road Transport Corp (MSRTC) has come out of the red, posting a net profit of Rs.153.2 million, courtesy its more than 100,000 employees.

From correspondents in Maharashtra, India, 29 Oct 2007 - (Latest news from India - India eNews)

For the first time since 1995, the state-owned Maharashtra State Road Transport Corp (MSRTC) has come out of the red, posting a net profit of Rs.153.2 million, courtesy its more than 100,000 employees.

Hanumant Tate, general secretary of the State Transport Employees Federation, said faced with the spectre of privatisation or closure, the employees decided to get into the act and save their only means of livelihood.

For starters, three years ago, the employees 'donated' a mini-fleet of 22 deluxe buses costing Rs.20 million to MSRTC to improve the quality of its existing fleet of around 15,000 buses, Tate told IANS.

The money came from the employees' fund earmarked in the MSRTC Employees' Cooperative Bank to be disbursed during the bank's golden jubilee celebrations.

'Instead of taking the money for personal use, the employees' general body meeting decided to invest it in MSRTC from which they could get long-term benefits. It was an unprecedented move,' said Tate.

Realising that MSRTC was a lifeline servicing the poorest in the state's remotest corners, the employees decided to improve the quality of service to passengers.

'We regularly take coaching classes in our union office for the staff. We infuse into them that the passenger is a god and the bus is our temple. The 'god' must step into a clean 'temple', and the staff must be courteous, helpful and polite,' Tate said.

Employees on certain long routes voluntarily contributed to install music and television sets in 500 buses to entertain passengers.

These simple steps paid rich dividends. Qualitative changes in the service, the cleanliness of the buses and staff courtesy ensured that passengers could be weaned away from the private operators.

The employees also took to innovative marketing and branding techniques to lure more passengers. According to Tate, currently 22 different types of freebies or extra benefits are offered to the passengers.

After providing for various taxes, depreciation, provision for new buses and other statutory requirements, MSRTC posted a net profit of Rs.150.32 million for the financial year 2006-07. Tate is optimistic that MSRTC's profits will double in the current fiscal.

With a profitable year under its belt, MSRTC is looking ahead. It will increase the fleet by providing more comfortable buses, mini buses for short routes, semi-deluxe, air-conditioned ones and Volvos for different routes. It will also gradually convert to CNG to cut costs and become environment-friendly.

(Staff Writer, &#169; IANS)

Read more at: India eNews - Employees turn around Maharashtra transport utility

[YOUTUBE]


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## Neo

*Indian inflation declines​*
NEW DELHI, Nov 8: Indias inflation rate fell to its lowest level in more than five years as food staples such as fruits, vegetables and sugar declined, official data showed on Thursday.

Wholesale price inflation declined to a new low of 2.97 per cent for the year ended October 27, compared to 3.02 per cent in the previous week, according to Indias most watched cost-of-living index.

Annual inflation was 5.46 per cent a year ago but has gradually dropped from two-year highs of nearly seven per cent earlier this year.AFP

Indian inflation declines -DAWN - Business; November 09, 2007


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## Neo

*India sets 9pc growth rate in 11th plan​* 

NEW DELHI, Nov 8: While India achieved actual per annum income growth of 7.6 per cent, slightly below the target of 7.9 per cent in its Tenth Plan period, it has set overall growth rate of nine per cent in its 11th five-year plan.

According to the 11th plan draft documents, 7.6pc income growth rate each year has been fixed with an overall average economic growth of nine per cent.

During the ninth plan, India achieved the actual average growth of 5.52 per cent instead of 6.5 per cent fixed for the period.

Under the plan, an average growth rate of nine per cent, accelerating it from eight per cent in the first year of the plan (2007) to 10 per cent by the end of the plan period (2011-12) will be achieved.

If the target for the eleventh plan is achieved, it would mean that per capita GDP would grow at around 7.6 per cent per annum resulting in broad-based improvement in living standards, the plan document said.

Investment target has been fixed at six per cent higher in terms of proportion of GDP at 36.7 per cent against 30.8 per cent in the previous plan.

The savings rate of 34.8 per cent of GDP against 30.8 per cent in the tenth plan has been fixed.APP

India sets 9pc growth rate in 11th plan -DAWN - Business; November 09, 2007


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## Neo

*Indias forex reserves at $266.518bn on Nov 2​*
MUMBAI: Indias foreign exchange reserves rose to a record $266.518 billion on Nov 2, from $262.45 billion a week earlier, the Reserve Bank of India said in its weekly statistical supplement on Friday.

Analysts said a part of the increase in reserves was due to the heavy intervention by the central bank to check the rupees rise, which hit a near decade high of 39.16 on Wednesday.

The central bank said foreign currency assets expressed in US dollar terms included the effect of appreciation or depreciation of other currencies held in its reserves such as the euro, pound sterling and yen.

The foreign exchange reserves include Indias Reserve Tranche Position in the International Monetary Fund, the central bank said. 

Daily Times - Leading News Resource of Pakistan


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## Neo

*Indias industrial output​*
NEW DELHI, Nov 12: Indias industrial output rose 6.4 per cent in September, a sharp slowdown from 12 per cent in the same month a year ago as manufacturing and power production weakened, official data showed on Monday.

The slowdown came as the central bank held a key interest rate at a four-year high of 7.75 per cent and hiked the cash reserves banks need to set aside by 50 basis points to 7.5 per cent in its latest monetary policy review in October.

Indias industrial output -DAWN - Business; November 13, 2007


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## Bushroda

*Moving Up in Mumbai*
*Humble Jobs at the Mall Are Lifting Legions of Indians Out of Poverty*

By ERIC BELLMAN
Wall Street Journal
November 17, 2007

As an elevator operator in a dingy apartment building, Mohamed Shaikh used to ponder ways to get himself out of his mind-numbing job and his family out of the slums. Vishal Bhatade once worked 12 hours a day cutting cloth in a garment factory for less than $50 a month. Rakesh Gundeti used to worry his family wouldn't make it after his father was laid off and his mother developed cancer.

On a muggy Mumbai morning recently, the three young men left their cramped homes in slums around the city and headed to their work stations on the top floor of a mall housed in a former textile mill. There, in the men's denim section of a Pantaloon department store, they joined an economic drama sweeping across India.

For nine hours a day, six days a week, they folded jeans, stocked shelves and explained the different styles of pants to their middle-class customers. Their wage: roughly $1,600 a year, with the prospect of regular raises and promotions -- much more than any of their parents earned and double the annual average salary in India.

At Pantaloon, they were brushing up against a lifestyle they hope to be fully part of some day.

Equipped with new cellphones, the three men took to speaking to one other in English, a language they rarely used before. They also absorbed the latest Bollywood fashion trends, buying knock-off designer jeans from street markets rather than paying Pantaloon's prices of $20 to $70 a pair. On weekends after work, they would hang outside dance clubs, anxious to see the clubbers' outfits. "I will spend money like them someday," said Mr. Bhatade.

Such basic sales jobs, unremarkable and often derided in the West, are providing careers, confidence, and a shot at entering the consumer class to millions of impoverished young men and women across India. As their ranks swell, these children of slum dwellers, servants, sweepers and others low on the socioeconomic totem pole are forming a new stratum of workers. They are likely to play an important role in determining the future of the world's second-most-populous nation.

Until recently, much of the new wealth in India went to college-educated computer programmers, consultants and call-center workers. While they have made the country's technology industry a new pillar of global commerce, the total number employed by the software industry is still only about two million -- less than 0.2% of India's 1.1 billion population. At the other end of the spectrum, India still has more than 200 million people who live below the poverty line, mostly farmers.

Between the two are tens of millions of Indians, mostly city dwellers in their 20s and 30s, who are taking their first steps into the salaried class by selling goods and services to the increasingly free-spending upper crust. They represent a kind of swing vote in how far India can spread the fruits of its rapid expansion. Annual economic growth has averaged more than 8.5% for the past four years, but much of the benefits have accrued to the old industrial families and the tech-savvy few.

In the past, less-educated urbanites had few options beyond seeking a government job (often through family connections or bribes). They would go abroad or work for wealthy families who refer to them as "delivery boys," "tea boys" and "peons."

In contrast to China, where wealth spread as rural labor moved from farming to manufacturing, India's growth is being led by a sharp rise in domestic consumption. Stronger spending power is opening up opportunities concentrated in service sectors like retailing, banking and hospitality and telecommunications.

Firm data are hard to come by, but available statistics and anecdotal evidence suggest an explosion in service jobs. The unemployment rate for male high-school graduates in the cities, for example, fell from 8.5% in 1994 to 5.1% in 2005, according to government statistics. Over the next three years, says the Images Group, a research and consulting group in India, the retail sector will create more than 2.5 million new jobs in the country. India's Reliance Industries Ltd. says it will hire close to 500,000 people to staff its new chain of supermarkets. Pantaloon Retail Ltd., India's largest retailer with annual sales of around $1 billion, hires more than 500 people a month.

"People are not despondent anymore," says N.S. Sastry, former director of the National Sample Survey Organization, the government office that tracks employment trends. "They see better employment opportunities, better earning capacities and opportunities to improve their skills."

In the brightly lit, white-walled Pantaloon jeans department, the seven-foot-high shelves are filled with denim from international brands like Lee and Pepe. It could be any middling U.S. department store, except for the Hindi pop-music videos playing on huge television screens and the photos of Bollywood stars promoting the brands.

Still, it was a completely foreign environment when the three young men first arrived several years ago. "They are absolutely raw when they come in," says Mansur Khan, the 32-year-old who trained all the department's employees after working for Pantaloon for seven years. He teaches new recruits about confidence, sales, fashion and even hygiene. "They come from an altogether different background."

Mr. Shaikh, a lanky 25-year-old with wiry hair, grew up in the slums nearby. His father died when he was ten, forcing his mother to work different jobs to raise her two sons. After sending them off to school in the morning, she made plastic buckets and cut thread for shirts in small neighborhood factories. She didn't always make enough to feed her children. The only open space for the boys to play was a nearby graveyard. They stumbled over tombstones during games of cricket.

Along with his mother and brother, Mr. Shaikh today shares a 100-square-foot home on a dark alley in a Muslim ghetto. It has a bed, a tiny kitchen and a pile of suitcases for the moves his family makes almost every year.

After high school, Mr. Shaikh had put aside his interest in college to find a job. "Once you start looking for money, you stop thinking about education."

He worked for a while in a small doctor's clinic, handing out prescriptions. The elevator operator's job, he recalls, was the worst. So four years ago, when Phoenix Mills opened -- part of a massive urban development project -- he applied at Pantaloon without even knowing what it was.

Mr. Gundeti's family is from the southern state of Andhra Pradesh. But he grew up in Mumbai, where his father worked in a textile factory until his job was eliminated. Almost all of the $10,000 severance he received went toward treating his wife's stomach cancer. The family also sold its slum home to help pay for the treatment. Still, Mrs. Gundeti died last August.

The elder Mr. Gundeti now sweeps floors at a nearby television studio. He had great hopes for Rakesh, whom he named after the first Indian in space, Rakesh Sharma, who was part of a Soviet mission in 1984. But he's turned cautious about what he expects from life. "Every time we have a little hope, something bad happens," the father said as he brushed aside ants on the floor of his small corrugated-steel home.

Rakesh, 22 years old and a big fan of American pro wrestling, had a friend who worked at Pantaloon. So he applied, too.

Mr. Bhatade grew up in a small town about 60 miles north of Mumbai. For the past 15 years, his father has manned a machine that makes brown paper bags. The family lives in a 150-square-foot hut built against the wall of the factory. When Mr. Bhatade was a boy, he planted marigolds and a pomegranate tree outside their door and adopted neighborhood street cats to make the modest abode feel like a home. His parents insisted on a basic education.

"We didn't want them to suffer like we did," says his mother, Vanita Bhatade, 46 years old.

His first job after high school was at a garment factory, where he worked for more than a year. Mr. Bhatade's father told him to look for work in Mumbai, so he moved in with his uncle in a city slum. After a stint peddling credit cards door to door, a friend tipped him off that Pantaloon was hiring. He went for an interview in May of 2004 and got the job.

Immediately, Mr. Bhatade found the clientele to be a big challenge. It was the first time any of the young men had talked to people much richer than themselves. "When I came, I was very shy," Mr. Bhatade recalls. "I would watch them from afar. I couldn't even ask them what they were looking for."

The young men were often yelled at or accused of falling down on the job, as skeptical customers refused to believe their size was out of stock or got irate if the clothes they wanted didn't fit.

They'd shout, "'Who is handling this section?'" Mr. Bhatade recalls. "Who is the boss? Who is the store manager? Who is the department manager?" Mr. Bhatade would offer a simple "I am sorry."

As the longest-serving Pantaloon employee of the three, Mr. Shaikh became the unofficial assistant manager of the department, often staying late into the night to make sure his shelves and racks looked clean. "I never used to fold my clothes at home," he said with a grin.

For jeans advice, he turned to Mr. Bhatade, the department's resident expert on more than 50 types of jeans and denim. He can describe the difference between "monkey wash" and "tiger wash" to his English-speaking customers. (In monkey wash, the front of the pants is faded. In tiger wash, the fading is in horizontal stripes.)

And for light relief to break up the day, they'd pick on Mr. Gundeti, the department comic, making fun of his "funny" southern Indian accent. When he'd return late from a tea break or ask to go home early, his colleagues insisted that he must have had a date. The razzing often sent Mr. Gundeti into a faux fit of anger, making everyone laugh.

When not with customers, the three men would chat constantly about sales targets, cricket, family and movies. The managers discouraged them from bunching together on the floor, so they tried to stay at least five feet from each other as they folded pair after pair of jeans. One recent afternoon, Mr. Bhatade and Mr. Shaikh debated how their section compared to others in the store.

Formal men's wear has the highest sales every month, so employees there have a greater shot at sales-based bonuses. But denim is better than working in the women's wear departments, they agreed, because female customers are much more demanding. "They will try on each color in their size and still they are never happy," said Mr. Shaikh, laughing. "Is your girlfriend like that?" he asked Mr. Bhatade. Blushing, Mr. Bhatade walked away.

Their outside interests and social lives increasingly tilted toward Pantaloon and away from the slums. "I try to teach my friends to end their vulgar language and behavior," said Mr. Gundeti of his neighborhood friends. "They don't change, so I don't spend time with some of them anymore."

Instead, the men watch movies together or with other acquaintances from Pantaloon. Restaurant dinners are still beyond their reach, but on birthdays they pitch in for a cake and take it to the beach to eat. On a company team-building outing, they slid down water slides at a resort near Mumbai. It was the first time Mr. Bhatade had been in a swimming pool. "Most of my free time I spend with my Pantaloon friends," he said.

The store doubled as a place of worship. For a few weeks in September, a room near the denim department housed a statue of the elephant-headed Hindu god Ganesha that was decorated with streamers and flowers and lit with a purple spotlight. Mr. Gundeti went daily to give offerings and sing religious songs. Mr. Bhatade and 30 other Pantaloon employees later carried the idol to the ocean and left it in the Arabian Sea, the traditional end to the Ganesha festival.

During Ramadan, the Muslim holy month, Mr. Shaikh and his supervisor, Mr. Khan, joined the store's other Muslim employees on the roof of the store to break their fast at dusk rather than going to nearby mosques. Each night, they kneeled among piles of boxes full of clothes to pray and passed dates and slices of watermelon as the sun set over the new mall being built next door.

While Pantaloon isn't a quick route out of the slums, the jobs, and the pay, offered something else: the occasional luxury, some financial reassurance and a large dose of self-esteem.

Mr. Shaikh used to wear irregular pieces from the factory where his mother worked -- shirts where the pockets didn't match, for example. His store job allowed him to purchase his first "branded" pair of jeans, on sale for $20. In September, he bought a computer, picking one that can also be used as a television so his mother can watch soap operas. Some regular customers started asking him for his fashion advice. "People are going for the comfort fit, not the boot cut," he said.

Mr. Gundeti has supported his father with his Pantaloon salary and taken advantage of its afternoon shifts to study computer programming in the mornings. He just bought a laptop. It cost more than a desk top but his home has no desk. His family has noticed that he isn't as hot-tempered as he used to be and that he is more "gentlemanly." His Hindi is now peppered with English phrases like "you know," and "I mean." Over the next six years, he hopes to boost his salary significantly -- enough to buy an apartment for his father.

Mr. Bhatade, too, has matured since he started working at the store, according to his parents and sisters. While he used to be shy and withdrawn, he recently planned his sister's wedding -- a huge undertaking in even the poorest Indian homes. He says he is embarrassed by the clothes he used to wear and today tries to teach his friends and his sisters about Mumbai style. Meanwhile, he has become one of the most eligible bachelors in his community, says his father, who has turned down more than five offers of arranged marriage for his son already.

Over the past month, each team member has taken new steps up in the direction of the consumer class. Mr. Gundeti earned a promotion to cashier in Pantaloon's jeans department. Mr. Shaikh left his job to start his own small business, recruiting people to work on construction projects across the Middle East.

Mr. Bhatade was promoted to "team leader," which means he will manage a group similar to his old gang in the denim department, but on a different floor. It is now his turn to teach the job to a new batch of hires from the slums.


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## sajan

Pride of Delhi 

London Mayor Ken Livingstone with Delhi Metro Rail Corporation Managing Director E Sreedharan taking a Metro ride from Central Secretariat to Rajiv Chowk in New Delhi on Tuesday. 
Mr. Livingstone was very impressed with the Delhi Metro and said he would like to build several such systems in the city of London, Londoners should travel to Delhi if they want a preview of what Crossrail will be like, Ken Livingstone said. The Mayor believes the Indian capital's modern underground system is the perfect model for the £16 billion high-speed line that is due to open in 2017.


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## Neo

*13 Indian firms in Asia's 100 fastest-growing list​*21 Nov 2007

NEW DELHI: Thirteen Indian firms have been named in a list of 100 fastest-growing small and mid-size companies in Asia, with some emerging on top in terms of sales and capital returns. 

According to 'Asia's Hot Growth Companies' list, prepared by a US-based financial magazine, India is home to a higher number of such companies than China, whose presence is limited to just eight firms. Besides, India is next only to Taiwan and Japan, which have been represented by 24 and 18 firms respectively. 

There are 13 firms from Hong Kong, seven from Korea, four from Malaysia, nine from Singapore and two from Thailand. 

The single firm from Pakistan is Packages Limited, a manufacturer of paper products is ranked at the 84th position. 

Among the Indian firms, Lakshmi Machine Works is ranked 17th, followed by Kirloskar Brothers (18th) and Godrej Consumer Products (23rd). 

Other Indian companies named in the list are Marico (40), Colgate-Palmolive India (45), Hexaware Technologies (53), GlaxoSmithkline Pharmaceuticals (60) Panacea Biotec (68), Bajaj Hindustan (72), Motherson Sumi Systems (79), Cummins India (83), I-flex Solutions (93) and Titan Industries (98). 

Hong Kong-based Ajisen Holdings has been ranked at the top, followed by Raffles Education of Singapore. 

In terms of highest sales in 2006, three Indian firms - Cummins India, Titan Industries and I-flex Solutions - are ranked first, second and third, respectively. 

Cummins - which manufactures diesel, gas, and dual fuel engines for power generation and other industrial purposes - had sales of 498.8 million dollars, while Tata Group's Titan Industries recorded revenues of 491.2 million dollars. Information technology solutions provider I-flex raked in sales of 484.3 million dollars. 

In terms of three-year average return on capital, Godrej Consumer was ranked on top across Asia with 106.7 per cent. Godrej Consumer and Marico were named as the second and third biggest companies with a return of 57.7 per cent and 57.2 per cent respectively on the basis of capital return last year. 

Based on market value, I-Flex was ranked at second position with a value of about four billion dollars. 

The overall list took into consideration parameters like sales, profit, capital returns and market capitalisation. 

"They are in decidedly less sexy lines of business, everything from noodle shops to chemical fiber manufacturing. But these Asia stars do enjoy some big advantages, like relatively high barriers to entry and growing demand from Asia's newly affluent consumers," the magazine said. 

In an accompanying report, the magazine said that annual scorecard of top 100 small and midsize businesses in the region are not high-flying dot-coms. 

Tech leaders in India have been hammered by the appreciation of the rupee. "The rupee has gone up 12.6 per cent against the greenback over the past 12 months, making Indian companies catering to US customers less competitive with their foreign rivals," it noted. 

Outsourcing services specialist Hexaware Technologies recorded a 22 per cent decline in profits to 6.8 million dollars in the recent quarter on account of rupee appreciation. The firm is looking to open a development centre in China next year in addition to the existing one in Mexico, the magazine added. 

"Clients in the US want to de-risk" their exposure to the rupee, he says. Having employees in China would provide Hexaware "with an additional low-cost center," the company's Executive Chairman Atul Nishar was quoted as saying. 

13 Indian firms in Asia's 100 fastest-growing list-India Business-Business-The Times of India


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## Neo

*Delhi eighth expensive office space in the world​*22 Nov 2007 

NEW DELHI: Mumbai and Delhi are the second and eighth most expensive places respectively in the world for renting office spaces. In terns of cost, these places are ahead of New York, Los Angeles, Geneva, Rome and Shanghai. 

London West End continues to be costliest place in the world with a rental of Rs 1,080 per sq ft per month. As against this, the occupation cost in Mumbai's Nariman Point in November 2007 hovered at Rs 625 per sq ft per month and in Connaught Place in Delhi at Rs 415 per sq ft per month. 

In the last one year, rentals in Mumbai increased 55% and the city jumped three places from fifth in 2006 to second in the list of most expensive office markets in the world, prepared by global consultancy firm CB Richard Ellis (CBRE). 

Rentals in Delhi also went up by 34.3%. But still, it slipped by one place to 8th position in the ranking. 

However, CBRE CMD (Asia Pacific) Anshuman Magazine said this should not be treated as great news for an emerging economy like India. High rentals will act as a deterrent for investment in the country, he said, adding that the trend is a reflection of the great performance of the economy but at the same time it also shows shortage of prime office space in the country. 

This, he said, will affect the growth if government does not address the problem.

Delhi eighth expensive office space in the world-India Business-Business-The Times of India


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## Neo

*India world's best performing stock market​*21 Nov 2007 

NEW DELHI: India has emerged as the world's best performing stock market in the past three months, notwithstanding the five-day plunge that wiped off close to 85 billion dollars of investors' wealth from the bourses. 

The country's benchmark Sensex has lost over 1,300 points in five trading sessions pulling down the total market capitalisation of all the listed firms from about USD 1,650 billion to USD 1,565 billion during the same period. 

However, an analysis of three-month US dollar return data available with the global market intelligence service provider MSCI Barra for equity markets across the world shows that Indian bourses have delivered the highest gain of 33.64 per cent during this period, thus adding over USD 400 billion to the investors' kitty. 

The developed markets like the US, Japan, Austria, Sweden and Belgium have given negative returns in this period, while UK managed a modest return of 0.6 per cent. 

The best performing developed markets has been Spain (18 per cent) and Hong Kong (17 per cent). But, their returns is just about half of the same on Indian bourses since August 21. 

Worldwide, India is followed by Qatar, UAE and Egypt with a gain of about 28 per cent each. Among emerging markets, India is followed by Brazil with 31 per cent return, while Chinese stocks have managed to give about 17 per cent returns. But, there are others as well like Taiwan, Sri Lanka, Chile, Mexico and Venezuela who have registered a fall during this period. 

Since the beginning of this month, however, just a handful of markets have managed to register a positive return. Spain is the only developed market to have seen a modest gain in November (0.6 per cent), while Morocco, Egypt, Colombia and Jordan are the only emerging markets posting positive returns. 

India world's best performing stock market-India Business-Business-The Times of India


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## EagleEyes

I thought Pakistan stock market was doing well? Did it crash again?


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## Neo

WebMaster said:


> I thought Pakistan stock market was doing well? Did it crash again?



Won't call it a crash but business is slow due political instability...but don't worry, we'll catch up soon


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## Bushroda

*Gulf-based property developers to invest $50 billion in Indian realty market*
By Surojit Chatterjee
International Business Times 
22 November 2007 

New Delhi - With India's 1.1 billion population facing a shortage of 25 million housing units, according to government data, leading Gulf-based real estate companies are tapping the booming Indian realty market and, with an estimated investment plan of over $50 billion in the next two-three years, promise to transform the landscape of India forever. 

While Dubai's Emaar Properties, the largest Arab real estate company, has announced that it will invest $12 billion in its joint venture with India's MGF Development Ltd., Nakheel has inked a $20 billion deal to develop townships in the country. 

"We're actively pursuing a number of opportunities. I'm confident that in the next few months we'll launch our first major developments," Nakheel CEO Chris O'Donnell told Gulf News. 

Gulf Finance House is spending $2 billion with its partners to develop Energy City at Navi Mumbai. 

Gulf Finance House (GFH) is spending $2 billion in a greenfield site close to Navi Mumbai, near to the commercial capitals airport, with its partners to develop Energy City India. GFH has already raised $630 million towards the initial development and infrastructure requirements of the project. 

Earlier this month, the Al Futtaim Group announced that it hopes to clinch a deal in India this year to build a project similar to its $15 billion Dubai Festival City development. 

Futtaim, with businesses from autos to financial services, is building the 1300 acre (526 hectare) Festival City development with shops, offices, apartments and hotels, as well as a similar $4 billion Cairo Festival City in Egypt. 

The group is negotiating a similar deal in India where it will work with a local partner, Marwan Shehadeh, Managing Director of Al Futtaim Capital, told reporters. 

"Ideally India could happen as fast as the end of this year," he said, declining to give details. 

"The numbers of upper middle-class and rich populations are growing in India and with it the demand for quality housing is also increasing. We will tap this potential," said Hussain Sajwani, Chairman, Damac Holdings, the parent company of Damac Properties. 

The $30 billion Damac Properties is planning to invest $3-5 billion to develop high-end residences, office complexes, SEZs, among other things. 

"We would look to develop these properties ourselves but are also open to joint ventures with Indian companies and are presently in talks with a few of them," Sajwani said. 

Damac, which has developed retail, residential and office space in the Middle East and some parts of north Africa, is eyeing Mumbai, Chennai, Bangalore, Hyderabad and tier-II cities to start its projects and is confident of launching them in the next 12 months. 

"The Indian market has become very expensive in the last three years but there is still a large potential for growth. The existing laws are a bit difficult presently but if they become more developer-friendly in the future, we could look at scaling up our investment," Sajwani said. 

Tanmiyat Group, another multi-billion dollar company, is planning to launch composite property developments in Bangalore and other metros. Bharat Thakker, Managing Director, Tanmiyat Group, is confident of replicating its $3.8 billion Dubai Living Legends project in India. 

Dubai's Deyaar Real Estate said it expected to clinch a $5 billion deal this year to build a township near New Delhi with India's Ansal Properties & Infrastructure Ltd. 

Similarly, the Dubai Internet City has picked up Kochi to set up a Smart City project, and IT and media hub. The initial investment for the Smart City, being executed by the DIC management will be over $400 million. The Smart City would come up in a vast, 1,000 acres of land on the outskirts of Kochi. 

Dubai-government owned Limitless is working with Indian developer DLF Ltd to develop a $12 billion housing and commercial real estate project near the technology and outsourcing hub of Bangalore. 

ETA Star, which is developing 5 million sq ft of housing at Chennai and Bangalore, is looking at another 20-30 million sq ft of development in Kochi, Coimbatore and Madurai. 

Both ETA Star and Dubai Worlds Limitless are looking at middle and low-income housing to tap the demand-supply gap in the housing sector, which is pegged at 40 percent. 

"We are following the government's policy of investing globally and India is a phenomenal market for such an investment," said Sunil Gomes, Director of Development, Istithmar, UAE. Istithmar is a Dubai-based investment holding company for foreign and local investors. 

"We are looking at partnerships for residential and commercial projects. It is not just oil that is making us get cash but also we have easy access to funds from banks to make our various investments," said H. Danesh, General Manager, S.S. Lootah International. 

S.S. Lootah International is the international business arm of the S.S. Lootah Group which has successfully partnered with leading international companies in developing, managing, supporting and financing some of the most sophisticated projects in the construction, industrial, telecommunications, energy, environmental research and sustainable development sectors. 

"Several West Asian companies are closely looking at the Indian market due to closer geographies, traditional ties and huge potential for investments. They have all the capabilities and they will invest in the markets which will get them highest rate of returns," Anshuman Magazine, Managing Director of property consultancy firm CB Richard-Ellis, South Asia, said. 

Real estate prices in India have been sharply rising over the last few years, leading to concerns in some quarters that an asset bubble could be forming. However, India's booming economy promising to grow between 8-9 percent annually and the increasing demand for all types of property - residential, commercial, retail, hotels and mixed-use - have succeeded in drawing a large number of participants including private equity funds. 

The India Brand Equity Foundation estimates that by 2010, the information technology sector alone will need 150 million square feet of space across major cities, and further estimates that in the residential sector, there is a housing shortage of 19 million units across the country.


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## Neo

*Office rent in Mumbai 2nd highest in world ​* 
Sunday, November 25, 2007

MUMBAI: Indias financial capital Mumbai ranks second only to global commercial hub London in terms of office rentals, while the national capital is not far behind at eighth spot, an Indian financial Web site reported.

The cost of a square feet at Mumbais Nariman Point has risen 55 per cent over last year to $189.51 (occupation cost in US $/sq ft/annum).

However, it is a distant second to Londons West End, which topped the list with $328.91, according to a recent survey by global realty consultant CB Richard Ellis.

According to CBRE Researchs semi-annual Global Market Rents survey, which tracks the worlds most expensive markets as well as markets with the fastest growing rents over the past 12 months, Delhi ranks eighth in the most expensive office markets of the world (with rental of $126.73).

Londons West End, Mumbai, the City of London and Moscow are the top four most expensive office markets in the world, CBRE said in a statement.

In the category of fastest growing office rents, Mumbai ranked third with 55 per cent jump in last 12 months, as Singapore led the list with occupancy cost rising by 83 per cent during the past year.

Bangalore stood at sixth place with 49 per cent jump, while New Delhi is at 12th position with 34.3 per cent rise in office rental in the last one year.

Office rent in Mumbai 2nd highest in world


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## aryan2007

Neo said:


> *Office rent in Mumbai 2nd highest in world ​*
> Sunday, November 25, 2007
> 
> MUMBAI: Indias financial capital Mumbai ranks second only to global commercial hub London in terms of office rentals, while the national capital is not far behind at eighth spot, an Indian financial Web site reported.
> 
> The cost of a square feet at Mumbais Nariman Point has risen 55 per cent over last year to $189.51 (occupation cost in US $/sq ft/annum).
> 
> However, it is a distant second to Londons West End, which topped the list with $328.91, according to a recent survey by global realty consultant CB Richard Ellis.
> 
> According to CBRE Researchs semi-annual Global Market Rents survey, which tracks the worlds most expensive markets as well as markets with the fastest growing rents over the past 12 months, Delhi ranks eighth in the most expensive office markets of the world (with rental of $126.73).
> 
> Londons West End, Mumbai, the City of London and Moscow are the top four most expensive office markets in the world, CBRE said in a statement.
> 
> In the category of fastest growing office rents, Mumbai ranked third with 55 per cent jump in last 12 months, as Singapore led the list with occupancy cost rising by 83 per cent during the past year.
> 
> Bangalore stood at sixth place with 49 per cent jump, while New Delhi is at 12th position with 34.3 per cent rise in office rental in the last one year.
> 
> Office rent in Mumbai 2nd highest in world



Indian property market is at an all time boom.. the land rates even in teh $hitties localities in proper Delhi is touching 1000$ per sq yard.. and in industrial areas on teh outskirts are touching 300$ per sq yard.. 
I think the prices and rents are much higher if you add the paghri system and black money changing hands in addition to the prices which are filled in the stamp papers and registeries(taxable income)...


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## aryan2007

Trillion-dollar effect on India's stock markets
25 Nov, 2007, 0052 hrs IST,Apurv Gupta, TNN

A growth propelled largely by the services and manufacturing sector, coupled with an appreciating rupee, has catapulted India into an elite league  that of a trillion-dollar economy club, thereby making it only the 12th nation to reach this milestone. Even better, post-April 2007, the Indian market cap has crossed $1.5 trillion.

Whats interesting is that membership to the club comes with certain benefits for the nation as a whole. Data by research houses suggest that stockmarkets in eight out of 10 countries had risen in one year after their economies first crossed this mark. SundayET finds out its implications and whats required to keep the momentum going.

Says Ajay Bagga, CEO, Lotus India AMC: The expectations of a sustained economic growth, risk premium and interest rates decide the direction of the markets. In India, the trillion-dollar effect has added a halo to the markets, encouraging a record breaking $17 billion of inflows into the markets in this calendar year. The trillion-dollar twin statistics have lent a size and respectability to both the economy and the market, attracting both FDI and FII flows.
He feels that the economy as the source of wealth has contributed to and has, in turn, been catalysed by the stockmarkets that serve as the measure of wealth. The interplay of real and nominal GDP, inflation, earning per share (EPS) and price to earning ratio has meant that at first the markets rose due to an EPS expansion.

In a report, Credit Suisse, adding some history trivia, says that eight out of the 10 economies had their stockmarkets rise in the one-year period after they first crossed the $1trillion-mark in GDP. The United Kingdom is the only economy to stop being a trillion-dollar economy for a while after attaining the status the first time. In China and Germany, this led to the markets reversing directions from negative returns in the year of the $1 trillion-mark to positive returns in the following year. Experts though argue that these numbers are irrelevant for any fundamental analyst.

Says Sachchidanand Shukla, economist at Enam Securities: We must remember that markets discount these factors much in advance and expressing economic size in dollar terms may actually understate Indias economic size. As for economy (size and structure) driving the markets, empirical evidence has been mixed globally, and the opposite can also be argued  that markets drive economic growth. One has seen that in countries like China, despite higher economic growth and large size of economy, the markets remained moribund for a long period of time and have moved only lately.

He adds that the markets discount a myriad of factors and economic growth is one of them. For markets to go up, it is a necessary but not sufficient condition. Valuations, corporate fundamentals, conducive policies, polity and liquidity, etc, too are equally important conditions. Bagga adds that big deserves better pricing. This will attract investors of size and commitment. The Brazilian case is very comparable. We remain bullish on both the Indian economy and the fundamental re-rating story of the Indian markets which will lengthen this secular bull run, a la the US from 1982 to 1998. India as a nation of economic and capital markets magnitude has arrived.

He says that post-April 2007, the PE segment has witnessed a substantial expansion. Over the last 15 years, the 6% average real GDP growth has translated into a three times, 18%-plus EPS growth in India. The trillion-dollar effect will build on this EPS effect by adding the PE effect as well.

India joins trillion-dollar economy club- Special Report-The Sunday ET-ET Features-The Economic Times


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## Flintlock

*India 2.0: From service provider to innovator*
Adrian Bridgwater,
ZDNet.co.uk, UK
20 Nov 2007



In October, Yahoo ran an Open Hack Day event in Bangalore, hosted by one of the company's co-founders, David Filo. Two hundred local developers were invited to a 24-hour code-a-thon to combine their own ideas with mashed-up services from Yahoo's own library of APIs. The winning entry brought together Yahoo's mapping tool with a handwriting function to allow users to give travel directions to each other.

This kind of innovation-focused event is symptomatic of what some commentators are claiming is a fundamental shift in the focus of India's tech industry. "Innovation was always there, but the right conditions, ecosystem and critical mass did not exist from 1947 until the early 1990s. Now, venture capitalists are more willing to venture forth in emerging markets and back entrepreneurs &#8212; and India's universities have helped create critical mass in terms of skilled workers. So, as these factors start to coalesce, innovation and entrepreneurship are now much more evident in many different parts of India," said Kamla Bhatt, acclaimed Indian podcaster and presenter of The Kamla Bhatt Show.

To some observers it might appear that India came from nowhere to attain its current position as the dominant hub for technical skills and outsourcing. But the development of the country's technical skills base actually has its roots in the end of World War II. From 1947 until 1992, India followed a socialist path to development, with heavy emphasis on the public sector, in a somewhat misguided attempt to fuel growth. In 1992, when the country was on the brink of running out of hard currency (ie dollars), the prime minister at the time, Narasimha Rao, assisted by his finance minister, Dr Manmohan Singh, unshackled the Indian economy and freed it from its sluggish growth rate, which for years had hovered around the four to five percent mark.

PricewaterhouseCoopers estimates that India has roughly two thirds of the global business-process outsourcing (BPO) market, with a value in excess of $7bn (&#163;3.4bn) last year. However, it appears the country has ambitions beyond outsourcing; the Indian technology sector seems to be changing as it develops a new self-belief. Google's labs in Bangalore conceived the initial engineering for the company's Google Finance offering in less than 18 months. This type of development has created the momentum for venture capitalists to propel further developments and invest in an increasingly skilled workforce.

The Indian Institute of Technology is widely regarded as the sub-continent's premier technology school; its seven locations churn out many of the ultra-keen software engineers that are starting to make headlines. Commentators claim there are visible signs that a shift towards higher-value work is occurring.

As the foundations of a wider and more diverse Indian technology market continue to spread, both local and international firms are conscientiously taking a step back to look at the enterprise infrastructure they have in place, to gauge its suitability for supporting an expanding business base. Given this fact, Bangalore is just one of the locations in which global infrastructure layer, systems-integration (SI) and networking companies are setting up office.

"BEA has seen its training volumes in India rise from hundreds to thousands of students a year. Big systems-integration firms in many of India's industrialised cities now demand tailored courses and even train over the web, live linked to instructors in the US. The latest trend is for these SIs to become authorised trainers in their own right, so they can train in BEA's technologies to their own timetable in-house," said David Toso, senior vice president of BEA EMEA services.


If they are smart, Bangalore and other technology-rich regions of India &#8212; including Chennai, Mumbai and Delhi &#8212; can take advantage of the IT foundation laid down to service overseas BPO demands and use it to jump-start indigenous projects. Sunnyvale in California will always be a convenient 12 hours behind India's west coast, so BPO is highly unlikely to disappear, but what India does next may prove extremely interesting.

"Where India has suffered in the past was [in its] reliance upon our services heritage that was anchored in cost arbitrage," said Sharad Sharma, chief executive of Yahoo India Research and Development. "But things are changing; capital intensity for entrepreneurs is reducing and this will make a big difference here in India. You can now be a YouTube without owning your own data centre. Our Bangalore development centre is responsible for a large chunk of the global research that drives 500 million users to Yahoo each month, and we have a string of Indian-originated services that are being localised for other markets and rolled out globally."

Among the Indian team's development highlights is the internet portal Yahoo Our City. Conceived, designed, built and launched from Bangalore within six months, this dynamically updated service provides a perspective of a city as seen and experienced by its natives. Content is generated by users for users &#8212; and the site incorporates other Yahoo services, such as Answers, Groups and Maps. Also hailing from the Bangalore team is the Yahoo Kids learning and entertainment portal. Made in India in the English language, it has already been localised for both Japan and Korea. Yahoo India has also produced underlying technology developments such as Vertex, a cross-vertical information-extraction platform that scrapes websites and pulls in information from them so that the information is extracted according to a pre-specified schema and stored in a database. In short, it's a quantum leap forward from call-centre work.

How these innovations manifest themselves in reality is a different and harder question to answer. "There are signs of emerging niche technologies emanating from India, such as developments to provide persistent security and network access control, or design work on the next generation of microcontroller chips. However, this is at a relatively early stage and the scale of such exports is still small, but the growth is accelerating much faster than more mature services exports," said Brian Stones, executive vice president of Mumbai-headquartered Patni.

"We are starting to see the creation of technology as a direct revenue generator &#8212; not merely as an enabler for making some service delivery faster, better or cheaper. Much of this is still driven by global organisations that originally set up captives to exploit the cost advantages of the Indian skills market, but [which] have graduated to becoming a strategic part of the global technology-development capability of these organisations &#8212; truly contributing to the creation of their products and technologies, including product management. For example General Motors R&D in India is developing next-generation electronics and materials for cars of the future," added Stones.

Of course, growth creates growth and a virtuous circle of proliferating expansion for complementary and supporting technologies is emerging. With an explosive growth of mobile-phone users in India and other parts of Asia, Symbian &#8212; which has over 70 percent market share of the smartphone operating-systems market &#8212; is working to ensure new units are supported with foundation-level technology. The company's own Bangalore office was opened in 2006 with an initial remit to provide core Symbian OS application technologies and product development to meet customer and product requirements.

Now, with a more fully evolved role within the organisation, Symbian India fits into the company's international operating-system engineering base to provide a research and development unit with specific responsibility for multimedia, networking, messaging, user interfaces and graphics, including significant technical contributions to the company's Posix layer.

"India is certainly witnessing a secondary stage in the economic growth it derives from its technology sector, as it channels its workforce towards home-grown projects targeted at a global market," said Bruce Carney, head of developer programmes and services for Symbian. "In the past month, two leading Indian universities have joined our Academy programme and this type of knowledge-base expansion has created the momentum for venture capitalists to propel further developments and invest in an increasingly skilled workforce."

However, despite this optimistic attitude, the jury is still out on whether there really is a new dawn for Indian IT entrepreneurialism coming. Critics of the Indian technology sector's ability to be inventive and entrepreneurial have accused it of being an "instruction-led" society &#8212; that is, workers don't "do" until they're told to "do". Similar negativity has been voiced over the country's big but seemingly shallow labour pool. There are also still enormous divides within Indian society; according to estimates, more than a third of India's population of more than one billion people lives on less than $1 a day.

India wants to be seen as the perfect test bed for technologies suitable for emerging markets, as it is now a "veteran" emerging market itself. With this pedigree and the new streams of investment being channelled into the country's technology sector, it would appear that the rapidly expanding skilled labour pool will be scooped up and put to full use in the India 2.0 world. As to when the country will reach India 3.0, when Western workers migrate to the sub-continent as their location of choice for work, it is hard to say, but it will surely happen.

India 2.0: From service provider to innovator - ZDNet UK


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## bhangra12345

Annual inflation at 3.21 pc on November 17- Indicators-Economy-News-The Economic Times



> Annual inflation at 3.21 pc on November 17
> 30 Nov, 2007, 1247 hrs IST, REUTERS
> 
> Print
> 
> 
> Save
> 
> 
> EMail
> 
> 
> Write to Editor
> NEW DELHI: India's wholesale price index rose 3.21 per cent in the 12 months to Nov. 17, above the previous week's rise of 3.01 per cent, government data showed on Friday.
> 
> The rate was above a median forecast of 3.11 percent in a poll of analysts. The annual inflation rate was 5.56 per cent during the corresponding week of the previous year.
> 
> The wholesale price index is more closely watched than the consumer price index, which is published monthly, because it covers a higher number of products and is published weekly


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## bhangra12345

Economy slows down to 8.9 pc in second quarter- Indicators-Economy-News-The Economic Times



> Economy slows down to 8.9 pc in second quarter
> 30 Nov, 2007, 1137 hrs IST, AGENCIES
> 
> Print
> 
> 
> Save
> 
> 
> EMail
> 
> 
> Write to Editor
> NEW DELHI: The economy slowed down to register 8.9 per cent growth during the second quarter of current financial year, down from 10.2 per cent in the comparable period of last year.
> 
> The sluggish performance of the manufacturing sector accounted for the slow down, according to the data released by the government here on Friday.
> 
> Indian economy, which is Asia's third-largest economy, grew 9.4 per cent in the fiscal year that ended March 2007, its fastest rate in 18 years, and the Reserve Bank of India expects expansion to slow to 8.5 per cent this fiscal year.
> 
> But India is still among the fastest growing major economy after China with gross domestic product (GDP) growth underpinned by strong spending to improve the country's creaky infrastructure, they say.
> 
> Analysts expected that the growth for the three months ended September 30 would be around 8.7 per cent, down from the previous quarter's 9.3 per cent, according to a survey of seven leading economists, whose forecasts ranged from 8.3 to 9.0 per cent.
> 
> "The cumulative impact of monetary tightening in the last few quarters, along with the likely impact of rupee appreciation on exports, is expected to moderate the pace of economic growth over the rest of this fiscal year," said Rajeev Malik of JP Morgan Chase Bank in Singapore.
> 
> "The slowdown will be pronounced for consumer spending," said Malik, who expects second-quarter growth of 8.7 per cent.
> 
> But he said investment "should continue to be powered by higher spending on both private capital expenditure and infrastructure spending."
> 
> India's economy expanded by 9.4 per cent in the financial year to March 31, 2007. The economy has grown at an average annual rate of 8.6 per cent in the last four years.
> 
> But industrial production grew at its slowest pace in almost a year in September, expanding by an annual 6.4 per cent, dragged down by tighter monetary policy and a rising rupee.
> 
> "A softening in GDP growth is expected to have occurred primarily due to a decline in industry GDP growth," said Manika Premsingh, an economist at Mumbai's Edelweiss Capital, who estimates second-quarter growth at 8.3 per cent.
> 
> The central bank began tightening monetary policy in 2004 and has raised interest rates five times between mid-2006 and March to tame prices.
> 
> Inflation, now at 3.01 per cent, is well below the bank's 5.0 per cent annual target and down sharply from a two-year peak of nearly seven per cent early this year, spurring speculation that the interest rate hikes could be over.


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## Neo

*EU, India hope for FTA in 2008​*
NEW DELHI, Nov 29: The European Union and India hope to conclude a free trade agreement next year, officials of both sides said on Thursday.

The EU is Indias largest trading partner, accounting for a fifth of Indias total trade, and is also one of its most important sources of foreign investment.

We hope to conclude (the free trade talks) by the end of 2008, EU Trade Commissioner Peter Mandelson told reporters on the sidelines of an India-EU business meeting in New Delhi.

Business on both sides should throw its weight behind a deal that does justice to the ambition we brought to the table a year ago, Mandelson said.

The free trade pact would provide a big boost to both economies and shore up global demand if the world economy begins to cool, he added.

Indias Commerce and Industry Minister Kamal Nath also said that the free trade agreement should be concluded by next year. But Mandelson warned that the European bloc was looking for an agreement with content rather than a political accord.

While looking for speedy progress to conclude the deal, I... dont want to sacrifice... content, he said. Indian and EU leaders will meet on Friday in an attempt to push forward the proposed free trade deal.AFP

EU, India hope for FTA in 2008 -DAWN - Business; November 30, 2007


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## aryan2007

Reliance places India's biggest Telco order at 5.6bn$


New Delhi: Reliance Communications Ltd (RCom) is getting ready to place what will be, at 70 million lines and an estimated value of $5.6 billion (Rs22,288 crore), the biggest order ever by an Indian telco as the firm gets ready to offer services on the GSM technology platform and take on competitors such as Vodafone Essar Ltd and Bharti Airtel Ltd.
Although the firm hasnt put a date to the launch, analysts say it could be sometime next year. The full-fledged entry of RCom into the GSM arenaone of the companys units already offers mobile telephony services using the technology in parts of East and North-East Indiawill likely result in another price war similar to the one the firm set off when it launched its CDMA-based service in July 2002.
That could mean lower tariffs for customers in a market where the average rate for local calls is less than Re1 a minute, or 2.5 cents, among the lowest in the world. It could also mean lower profits for phone companies.
RCom has begun talks with telecom vendors such as LM Ericsson AB, Alcatel-Lucent SA and Motorola Inc. RComs discussions with suppliers comes in the wake of the permission granted by the government last month to telcos to use multiple technologies to deliver mobile services. RCom, already Indias second largest mobile telephony firm by customers including its GSM unit, has 38 million of them, the majority (33 million) on the CDMA technology platform.
GSM is a more popular technology in India and telcos using it serve around 75% of the countrys 210 million cellular subscribers. The GSM subscriber base is expanding by almost seven million a month compared with two-three million for CDMA.
We are already in discussions with equipment vendors for&#8202;the&#8202;GSM&#8202;roll-out, and in addition, we are also expanding our passive infrastructure of telecom towers that could be used for GSM services across the country, a senior RCom executive, who preferred anonymity, said. The roll-out will be quick, especially since we have our own tower network.
Vendors are gearing up for the contract and indicated that the pricing would be very competitive. State-run Bharat Sanchar Nigam Ltd, or BSNL, had, earlier this year, placed an order for around 12 million phone lines with Ericsson at a price of $107 per line. RCom is talking about a contract that could be for as many as 70 million lines and it is a tough customer, said a senior executive at a European vendor, who did not wish either himself or his firm to be identified.
At around $80 a line, the RCom GSM contract will be worth $5.6 billion. Setting up a nationwide network could take anywhere from 6-12 months, the executive added. An analyst said RCom is pushing hard to keep the per line cost at around $50. They (RCom officials)&#8195;have said the first investment they would be making would be Rs5,000 crore in a pan-India GSM network and would not like to exceed $50 per line, said Naveen Kulkarni, an analyst with Religare Securities Ltd.
RCom will also be looking to leverage its existing CDMA network to reduce expenses on network roll-out costs. They could minimize passive infrastructure costs of setting telecom towers (and enclosures housing radio control equipment), which account for 60% of the total roll-out cost, Amrish Kacker, Singapore-based Asia head at telecom consultant Analysys Consulting, said in a telephone interview.
Other analysts tracking RCom said the company could also look at a Bharti Airtel-like model where the network grows in tandem with the business. If RCom starts only with the four metros, or even looks at rolling out GSM services in phases across the country, the contract may start with, say, 10 million lines and hit 50 million in two to three years, said Yogesh Kirve, a telecom analyst at Mumbai-based Anand Rathi Securities Ltd.
RCom officials declined to comment on any projections regarding growth of the companys GSM business. According to Mumbai-based Macquarie Research, the company will launch GSM services across the country next year. We expect RCom to have a GSM subscriber base of 12.8 million by March 2009, 21.6 million by March 2010 and 28.6 million by March 2011, Shubham Majumder, an equity analyst at Macquarie, wrote in a note last month. RCom adds about 1.5 million CDMA customers a month currently.
The RCom executive said that the company plans to grow its existing GSM business (in states such as Orissa, Bihar, and West Bengal), which is managed by subsidiary Reliance Telecom Ltd, to 15 million lines this year.
Apart from setting up a core GSM network, RCom will also need to set up at least three to four times more telecom towers than it currently has. This is because radios used in GSM-based networks have a shorter range and more towers are required to cover the same area.
RCom aims to have 40,000 telecom towers by March 2008. These towers are managed by Reliance Telecom Infrastructure Ltd, which RCom spun off into a separate company earlier this year and has since sold a 5% equity stake in it for $337.5 million to seven unnamed private equity companies in July.

RCom set for $5.6 bn order - livemint


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## aryan2007

*India's GDP growth slows down to 8.9% in Q2*


The growth of financial, real estate and business services slowed down to 10.6% in second quarter as against 11.1% a year ago partially due to RBI measures

New Delhi: Indias blistering economic growth slowed to 8.9% in the second quarter ended September 2007, hit by a downturn in manufacturing, data released on 30 November showed.
But the growth figures in Asias third-largest economy was still slightly ahead of analysts expectations of around 8.7%, thanks to a buoyant services and healthy agriculture performance, the data showed.
The growth of financial, real estate and business services slowed down to 10.6% in second quarter as against 11.1% a year ago partially due to RBI measures.
Analysts, however, said India will still be the fastest expanding major economy after China with GDP growth underpinned by strong spending to improve the countrys creaky infrastructure.
The construction sector, on which government had earlier imposed various restrictions, has shown a marginal improvement by posting a growth of 10.9% in the first half this year as against 10.8% during the corresponding period last fiscal.
Meanwhile, the growth in transport, communication, trade and hotel sector slowed down to 11.4% in the second quarter from 14.2% a year ago.
The power sector, whose slow growth has impacted the GDP growth by 1.5 to 2% a year, also failed to show any signs of improvement. It posted a growth of 7.3% in Q2 in 2007-08 as against 8.1% a year ago. The sector had grown by 6.9% in the first quarter this fiscal.
Despite a rise in government spending on social sector through some of UPAs flagship programmes, it grew by 7.8% in the first quarter this fiscal as against 8.3% in the same period last year.

GDP growth slows down to 8.9% in Q2 - livemint


Slowing down to 8.9% is also phenomenal IMO


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## Bushroda

aryan2007 said:


> *India's GDP growth slows down to 8.9% in Q2*
> 
> GDP growth slows down to 8.9% in Q2 - livemint
> 
> 
> Slowing down to 8.9% is also phenomenal IMO



8.9% is still good but what worries is the loss of momentum. It doesn't help in achieving the ambitious 10% growth rate.


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## aryan2007

Bushroda said:


> 8.9% is still good but what worries is the loss of momentum. It doesn't help in achieving the ambitious 10% growth rate.



8.9% is just for a quarter.. and it was predicted that we will achieve 8.7%.. we performed better than expectations..

We are losing ~2% pa because of our infrastructure
and the report mentions RBI meausres also curbed the growth in certain sectors... I really don't see our govt playing any role in this boom...

See if we remove our farm sector our GDP growth rate is going to be double digit..


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## bhangra12345

aryan2007 said:


> 8.9% is just for a quarter.. and it was predicted that we will achieve 8.7%.. we performed better than expectations..
> 
> We are losing ~2% pa because of our infrastructure
> and the report mentions RBI meausres also curbed the growth in certain sectors... I really don't see our govt playing any role in this boom...
> 
> See if we remove our farm sector our GDP growth rate is going to be double digit..



One major worry is the impending loss of export momentum due to slowdown in US. The software sector will not be the scorchers as they were but only good. I am worried mostly about the textile sector investments which have gone in the previous years and are supposed to come to fruitition around this time. Where will the increased capacity be absorbed? I hope that these textile exporters have seen non-US regions too.


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## aryan2007

bhangra12345 said:


> One major worry is the impending loss of export momentum due to slowdown in US. The software sector will not be the scorchers as they were but only good. I am worried mostly about the textile sector investments which have gone in the previous years and are supposed to come to fruitition around this time. Where will the increased capacity be absorbed? I hope that these textile exporters have seen non-US regions too.



Absolutely spot on..

Software is under pressure because of strong Rupee and low demand... though big companies already have good amounts of hedge against Rise... but it will catch up... 

Textile sector is under pressure from Asean..though it is a very murky sector...


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## Neo

*India most attractive for Japanese firms​* 

TOKYO, Nov 30: India has surpassed China for the first time as most attractive long-term manufacturing base for Japanese companies, which are particularly keen on the auto sector, a survey said on Friday.

Asias largest economy has warming political and commercial ties with India, although its operations in South Asia are only a fraction of its investment in China, Japans largest commercial partner.

But a survey by the Japan Bank for International Cooperation said 70 per cent of companies believed India would be a desirable manufacturing base in 10 years, up from 67 per cent in the annual survey last year.

In particular, firms in the auto sector appear positive, the survey said.

Great attention has been paid to India, which has taken over from China as most desirable destination for long-term investment for the first time. The government-backed bank carried out the survey of 970 Japanese manufacturing firms.

China came a notch down, with 67 per cent, saying it would be a good place for investment in 10 years. The communist giant held the top spot last year at 74 per cent.

Russia ranked third this year at 37 per cent followed by 28 per cent for Vietnam and 21 per cent for Brazil.

However, when asked which countries were desirable in the short term, China remained at the top with 68 per cent followed by India at 50 per cent.

Japanese automakers have recently launched a series of new investments in India, mostly around the southern city of Chennai, earlier known as Madras.

But Japans investment in China was nearly 40 times as much as that in India in 2005, according to Tokyos official figures.

Many Japanese businesses have spoken of feeling more comfortable in China with its communist government and cultural linkages to Japan.

Japanese leaders have tried to move closer to India in recent years amid frequent diplomatic spats with China.

Last week the Japanese and Indian premiers agreed in a meeting in Singapore to try to conclude a free trade pact by mid-2008.AFP

India most attractive for Japanese firms -DAWN - Business; December 01, 2007


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## Neo

*India eyes role as wind superpower​*
As oil reaches $100 a barrel, and with India suffering shortages that see factories often relying on diesel generators, firms are increasingly looking at wind

INDIA might be painted as a pollution-spewing, global-warming economy of 1 billion people but it is also one of the worlds biggest wind power users, part of a focus on renewable energy mostly unnoticed in the West. 

Years of tax incentives have helped make India one of the fastest-growing markets for wind power, a major component of renewable energy that will be high on the agenda of the Dec 3-14 UN climate change meeting in Bali, Indonesia. The Bali conference comes as international pressure mounts on India to ensure its growth gets cleaner. The International Energy Agency (IEA) warned this month of the climatic dangers of unfettered energy demand growth in India. 

When it comes to renewable energy and wind power, India can look the West in the eye and say - look at our years of progressive policies, said Santosh Kamath, a wind power specialist and associate director at KPMG consultants. Wind power in India is still a minority sector compared with the Asian giants overall energy needs that are dependent on coal and oil. 

With its reliance on dirty fuels, India will become the worlds number three carbon emitter by 2015, the IEA says. But renewable energy, of which the vast majority is wind power, accounts for more than 7 percent of Indias installed generation capacity - a rate that compares favourably with much of the rest of the world. India is the worlds fourth largest wind-power market. 

Wind power is growing tremendously. If you want a wind plant youll have to book a year in advance, said Chandra Bhushan, associate director at the New Delhi-based Centre for Science and Environment. Theres been years of progressive policies and recognition for a long time that India will face a shortage of fossil fuels. India, with its thousands of miles of coastline, is suited to wind power. Its wind power potential is estimated at 45,000 megawatts (MW) - about a third of total energy consumption. 

There is also little of the concern in India seen in the West over wind turbines ruining scenic vistas - scores can be seen, for example, outside Jaisalmers ancient fort in Rajasthan, one of Indias most popular tourist sites. 

A wind superpower? 

The boom brings in profits, the kind of virtuous circle experts say is needed for renewable energy to really work. At Vestas RBB India Ltd, one of Indias largest wind-power firms, sales rose 30 percent in 2006 and the company forecasts growth of about 40 percent this year, company officials say. Indias rise to what supporters call a wind superpower is due to tax breaks in the 1990s and to Tulsi Tanti, chairman of Suzlon Energy, Indias biggest wind energy company. 

Troubled by power shortages in the 1990s for his textile business in western India, he bought some wind turbines and soon realised it could be a good business. His company quickly became the pioneer in the sector. Wind power has also been helped by some states setting targets that 10 percent of their power should come from renewable energy. 

High capital costs and the fact wind is intermittent - plants often run at a quarter of their capacity compared with 80 percent capacity for nuclear power - mean that it is expensive and the sector has needed tax incentives to survive. Rakesh Bakshi, managing director of Vestas RBB, said provisions were still needed until economies of scale mean we can give conventional energy a run for its money. 

But as oil reaches $100 a barrel, and with India suffering shortages that see factories often relying on diesel generators, firms are increasingly looking at wind. Sarvesh Kumar, deputy managing director of Vestas RBB, said many clients were large manufacturers, such as cement or textile firms, concerned about the long-term energy costs. KPMG estimates that wind power costs around 3.5 rupees a kilowatt hour, compared with 2.5-3 rupees for imported coal. 

Wind energy is almost price competitive in many places, T.L. Sankar, senior energy adviser at the Administrative Staff College of India, told a renewable energy conference. And global warming might only add to its attraction. It can only gain in importance because of concerns about climate change, added Kamath. reuters

Daily Times - Leading News Resource of Pakistan


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## Neo

*UAE group plans joint $5bn investment in India *​ 
Tuesday, December 04, 2007

NEW DELHI: A leading Gulf property developer said on Monday it would team up with a local partner to invest five billion dollars in Indias booming real estate sector over the next five years.

A flood of money, especially from the Gulf, has poured into the soaring property market in India, which experts say is among major nations where there is first-time real estate demand rather than only individuals trading.

RAKEEN, property arm of the Ras Al Khaimah government, said it would form a 50-50 joint venture with Indias Trimex mineral group to spend five billion dollars developing residential, commercial and office space in India.

The new company, RAKINDO Developers, will have a committed capital outlay of over five billion dollars over the next five years, said its managing director Prasad Koneru. Our entry into real estate estate cant be better timed. The last 10 years have seen India achieve a transformation process to create a booming economy, he told reporters at the India Economic Summit in New Delhi. Ras Al Khaimah is part of the United Arab Emirates federation, the worlds sixth largest oil exporter. RAKINDO will deliver truly world-class products, said Khatar Massad, advisor to the Emirates crown prince.

The announcement came as giant Dubai-based real estate developer Emaar MGF said it would launch its initial public offering (IPO) to raise 1.7 billion dollars early next year. Emaar MGF, a joint venture of Emaar Properties and Indias MGF Development, plans to spin off a 10 per cent stake and filed its draft prospectus for the share issue in September. 

UAE group plans joint $5bn investment in India


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## aryan2007

India can sustain rapid growth for 20 years: finance minister


NEW DELHI (AFP)  India can keep up its scorching economic growth for the next two decades, stoked by strong investment and capital inflows, the finance minister forecast.

But at the same time Finance Minister P. Chidambaram told an international conference on Sunday that Asia's third-largest economy was lagging in achieving financial reforms and would miss some key United Nations development targets.

Also, while India and China and the rest of the developing world are now the main global growth drivers, economic power "still resides with the developed world" that attracts the best brains and controls financial and energy resources, he said.

"The biggest challenge (for maintaining India's growth) is to keep investment growing," Chidambaram told the India Economic Summit organised by the World Economic Forum in New Delhi.

"We can keep this (high) growth continuing for the next 10, 15, 20 years" as long as investment remains robust which, he said, was "perfectly achievable."

India's economy has logged average annual 8.6 percent growth for the past four years and the government is targeting "close to nine percent" expansion this year.

India has been attracting huge foreign capital inflows, which have helped to expand its economy, and its investment-to-gross domestic product ratio, a key measure of growth potential, is running at a healthy 35 percent.

Chidambaram said he was targeting a rise in the ratio to 40 percent in the next five years.

"Indians are good savers. As long as I keep investment going, there will be more jobs" and that will translate into more savings and investment, he said, calling it a "virtuous circle."

His comments followed data late last week showing growth slowed to 8.9 percent in the second quarter, still second only to China's, from 9.3 percent in the first quarter.

At the same time, there are global risks over which India has no control, Chidambaram added, saying China needs a more flexible exchange rate and the United States must wrestle down its hefty budget and current account deficits.

Chidamabaram also acknowledged that crucial "financial sector reforms are lagging behind, in banking, insurance, pensions... there is an unfinished agenda."

"The financial sector is at the heart of the economy. We have not been able to push forward" with these reforms, he said.

"It's a disappointment," he said, but added the ruling Congress-led coalition had 16 months left before general elections in 2009 to "make some progress" in these areas.

The minority coalition depends for its survival in parliament on its communist allies, who vociferously oppose economic reforms.

Chidambaram also admitted India had fallen behind on some of the UN Millennium Development Goals that cover hunger, literacy and poverty reduction.

It might be possible to meet some goals, he said, without naming them. But others might need another three to four years beyond the UN target of 2015.

India's delivery of social security programmes also had not improved despite far higher outlays as "we still rely on tried and largely failed systems of delivery."

India's rigid bureaucracy is a major hurdle in achieving "more inclusive growth" that would encompass India's tens of millions who have not shared the benefits of the economic boom, he sad.

Also, while "India and China now contribute 60 percent of the world's economic growth... the key factors that drive economic power are knowledge, financial resources and material resources such as oil and gas.

"As long as the developed nations have control over these, they will have an edge over developing nations," he said.

"But with the hunger in our bellies and the drive in our younger population, we will continue to be drivers of world growth and add to our own growth and raise millions out of poverty."

AFP: India can sustain rapid growth for 20 years: finance minister


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## Neo

*Indian business confidence slumps as economy slows ​* 
Thursday, December 06, 2007

NEW DELHI: Indian business confidence has slumped to a five-year low on the back of flagging exports, aggressive monetary tightening and a rising rupee that has slowed the economy, a survey said on Wednesday.

The report by the Federation of Indian Chambers of Commerce and Industry (FICCI) was the latest sign firms are hurting from interest rates at five-year highs, a rupee up 12.5 per cent against the dollar this year and export woes.

India Incs business confidence is at a five-year low and the outlook for exports, investments, employment and profits has taken a severe hit, said the second-quarter survey of 321 companies in Asias third-largest economy. Companies are worried about a slowdown with oil prices high, the rupees rise, high rates and uncertainty about how the US subprime crisis will impact, federation economist Anshuman Khanna, who prepared the report, told AFP.

The Overall Business Confidence Index showed a 10.5 per cent decline to 61.2 points from 68.4 in the last survey. It was down 15 per cent from the July to September period a year earlier.

A lower reading on the zero to 100 scale means greater pessimism. The findings followed data last week showing economic growth slowed to 8.9 per cent in the second quarter to September, still second only to China, but analysts predicted a further weakening in months ahead.

Analysts have forecast between 8.3 per cent and nine per cent growth in this fiscal year to March 2008 after the economy expanded by 9.4 per cent last year, its fastest in nearly two decades. But some analysts say growth could slow to seven per cent next year.

Even growth of seven, 7.5 per cent is very good when you look at growth in the West of two or 2.5 per cent, said Khanna. But we need to take growth to double digits to make it more inclusive, he said, to embrace tens of millions of desperately poor Indians who have seen no impact from the nations economic boom.

The survey covered a wide range of sectors from cement, pharmaceuticals, textiles, heavy equipment and chemicals to Indias showcase information technology business. The proportion of companies projecting an increase in investments, vital to fuelling growth, fell to 33 per cent from nearly 50 per cent in the last survey. 

Indian business confidence slumps as economy slows


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## Neo

*Indias poor left behind by blistering growth: minister​*
NEW DELHI: Indias scorching growth is failing to filter down to its hundreds of millions of poor people, a ruling Congress party minister has warned, stoking fears of social conflict.

Indias economy grew by 9.4 percent last year and the government is targeting nearly nine percent expansion or higher this year for the country of 1.1 billion people.

Here we are kissing 10 percent growth and instead of living standards rising, they are falling (for many), minister for local governments Mani Shankar Aiyar told the India Economic Summit in New Delhi that winds up on Tuesday.

India is becoming prosperous but not Indians, Aiyar said.

The boom is disproportionately affecting a small percentage of the population, Aiyar said, noting despite strong growth, India sank in the Human Development Index to 128th place from 126 last year.

While summit speakers have been upbeat about business prospects, they have also reminded delegates that India has no room for complacency.

A quarter of Indians exist below the poverty line with most living off small subsistence farms, delegates were told at the summit, whose theme is how to reshape India in an inclusive and sustainable way. A report prepared by the summit, part of the World Economic Forum in Davos, listed a litany of challenges.

Indias crumbling infrastructure is stretched to its limits, it said. The country has 18 percent of the worlds population but only four percent of the planets water and demand for water will exceed supply by 2050. Eighty percent of Indians dont have access to proper sanitation, most dont have access to power, said Anand Mahindra, vice chairman of giant Indian truckmaker Mahindra amp; Mahindra.

India accounts for one-third of the worlds illiterates with just 64 percent of adults able to read.

Aiyar blamed a lazy, bumbling and sometimes corrupt bureaucracy for many social and infrastructure problems, citing estimates that only 15 percent of each rupee allocated to social spending reaches the needy.

Distribution of resources needed to be done by local councils, or panchyats, that would have better accountability, he said.

Finance Minister P. Chidambaram admitted on the weekend to the same meeting that India would fail to meet some UN Millennium Development Goals set for 2015 covering hunger, literacy and poverty reduction.

India also needs to stop the massive migration to the cities that are becoming unlivable, Aiyar warned.

We must take (job and education) opportunities to rural India using such tools as information technology, he said. afp

Daily Times - Leading News Resource of Pakistan


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## Neo

*India business friendly, but more needed: WB ​* 
Friday, December 07, 2007

BANGALORE, India: India is becoming more business-friendly but has a long way to go before it catches up with fellow fast-developer China, a World Bank report released on Thursday showed.

India jumped 12 places to 120th of 178 countries on the overall ease of doing business, said the report by the World Bank and its private-sector arm, the International Finance Corp. China improved by nine places to 83rd, said the report entitled Doing Business 2008. India ranked 177 out of 178 in enforcing contracts.

It takes almost four years to resolve a commercial dispute through the courts in Mumbai, compared with slightly over a year in Chinas Shanghai, said the report. It takes 10 years to go through bankruptcy in India, compared with less than two years in Shanghai.

There are also large discrepancies within India, with the time to obtain licences ranging from 159 days in Bhubaneshwar to 522 in Ranchi, both in eastern India. Meanwhile, the time to register property ranges from 35 days in Hyderabad and Bangalore in the south of India to 155 in Kolkata, eastern India.

We are working with the World Bank Group to initiate reforms in the cities of Mumbai, Hyderabad, Kolkata and Delhi in the first phase, said Gopal Krishna, a senior official in Indias department of industry policy. In a statement, he said the reforms would focus on the ease of starting a business, dealing with licences, registering property, trading across borders and paying taxes.

India business friendly, but more needed: WB


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## aryan2007

India will become hub for world manufacturing industry: Paul

London: Leading NRI industrialist Lord Swraj Paul foresees India becoming a hub for world manufacturing industry in the near future and says his $1.5 billion (Rs5,916 crore) Caparo Group remains &#8220;very bullish&#8221; about the country.
&#8220;We think India will become the hub for world manufacturing industry, which is why we are going in that direction,&#8221; Paul told a Cambridge Leadership seminar.
Paul, who is the chairman of the Caparo Group, said &#8220;at the moment, we are very bullish about India, which is changing very fast and has started enjoying globalization and the benefits from it.&#8221;
Recalling that his Group built the first factory in India in 1994, the leading NRI said &#8220;then, three years ago, we began investing in India in a big way. &#8220;We now have 16 facilities in operation, with another 16 being built which will be ready by 2008-09.&#8221;
The one-day seminar on &#8220;Entrepreneurship and Innovation in the 21st Century&#8221; was organised at the Judge Business School in Cambridge and attended among others by the Indian High Commissioner to the UK Kamalesh Sharma, who was chosen as the Commonwealth secretary general recently in Uganda.
Emphasising the need for entrepreneurs and innovators to work together, Paul, who is also Britain Ambassador for Overseas Business lamented that Britain was losing touch with its innovative base.
He said innovation and entrepreneurship were part of the fabric of modern universities and education institutions should provide the inspirational environment to encourage and develop the next generation of creative thinkers.
These are the people that will improve our standards of living and pay for the healthcare, education, defence and public services we require,&#8220; Paul said
&#8220;Innovations come from a multitude of sources. They may come from people in industry, from workers in the service sector, or public sector, or even the lone inventor,&#8221; he said adding a good manager recognizes and implements a good idea, irrespective of where it comes from.
&#8220;Managers have to be prepared to recognize talent and then adapt it accordingly.&#8221;
Paul observed that historically, Britain was always good at innovation because its economy was made up of a great many small and medium sized businesses whose strength was to come up with new products that were simple but more competitive than anyone else.
&#8220;Unfortunately, we are losing touch with this innovative base because there is more glamour these days in working for the big companies; and in the big company culture innovation becomes a casualty.
&#8220;There is a lot of research and a lot of development, but there are no new products that are user-friendly and different enough to entice the consumer.&#8221;
&#8220;At the two universities of which I am Chancellor - Westminster and Wolverhampton - we are working to create better links between universities and industry. We are providing ways for entrepreneurs and universities to work together to their mutual benefit.
Paul said &#8220;today, Caparo is a conglomerate of small and medium-sized businesses with total sales of $1.5 billion employing some 6,500 people in Europe, North America and India. And we continue to expand.&#8221; 

India will become hub for world manufacturing industry: Paul - livemint


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## aryan2007

10bn$ Expressway in UP

Mumbai: Twenty firms have submitted initial bids for building Indias longest and biggest expressway project yeta Rs40,000 crore, eight-laned, access controlled expressway linking Ballia in eastern Uttar Pradesh (UP) with Greater Noidalocated on the border of the Capital, New Delhi.
The 1047 km-long road project dubbed Ganga Expressway will, when operational, cut travel time between the backward eastern part of Uttar Pradesh and the more prosperous western part of the state, by 16 hours from the current 24 hours.
For a traveller, it would take just about eight hours to zip from the holy city of Varanasi to New Delhi when the project is completed.
The planned expressway will dwarf the 95km-long, six-laned, access controlled expressway connecting Indias financial capital Mumbai with Pune and the under construction and controversy-ridden 111km-long expressway linking Bangalore with the garden city of Mysore.
The firms that have applied for pre-qualification include Larsen & Toubro Ltd, Reliance Energy Ltd, DLF Ltd, IL&FS Ltd, Gammon Infrastructure Projects Ltd with Australias biggest investment bank Macquarie, GMR Group, the Omaxe Ltd-GVK Group-Nagarjuna Construction Co. Ltd consortium, the Bajaj Hindusthan Ltd-Apollo Group-D S Constructions Ltd consortium, Jaiprakash Associates Ltd, Canadian firm SNC Lavalin with Progressive Constructions Ltd, Unitech Ltd, Punj Lloyd Ltd, Omans Gulfar Engineering & Contracting Llc., Zoom Developers Pvt. Ltd, Australias Leighton Group with Oriental Construction Co. Ltd, and PLUS Expressways Berhad, a subsidiary of Malaysias UEM Group, according to an official with the UP government overseeing the bidding process who did not wish to be named.
UP has taken inspiration for building the Ganga Expressway from legendary Afghan leader Sher Shah Suri, who built the Grand Trunk Road connecting Delhi with Kabul in the 16th century after temporarily displacing Humayun from the Mughal throne.
Suris road ran alongside the right bank of the Ganga; the new expressway will be built on the left bank of the river.
The eight-laned expressway will be constructed on an embankment to be built by the states irrigation department for controlling floods on the left bank of the Ganga.
The proposed expressway will start at Ballia-Gazipur and pass through Varanasi, Mirzapur, Sant Ravidas Nagar, Allahabad, Pratapgarh, Rae Bareli, Unnao, Hardoi, Farrukhabad, Fatehgarh, Shahjahanpur, Badaun, Bulandshahr, Gautam Buddhanagar and terminate at Greater Noida.
The expressway project will make available around 5,000 acres of land for real estate development including residential and industrial units. This will make the project economically viable for the developers.
The work on the expressway project will begin next year.

20 cos bid for longest expressway in India - livemint


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## aryan2007

*India emerges Top 3 economy in the world*


NEW DELHI: India Inc holds far more within its folds than what meets the eye. In the knowledge-driven global marketplace, where intangible assets such as intellectual property, brand, customer relationship and talent hold much more value than tangible 'visible' assets such as capital, land, building, factories et al, India emerges at the top of the podium, head and shoulders above all developed countries and blocs, barring the US and Switzerland.

Move over European Union, G8, Organisation of Economic Co-operation & Development countries and yes, even the BRIC grouping. India Inc takes a bow, not just as most 'intangible' amongst Asian economies, but as the number three economy in the world with the highest intangible component as a percentage of the total enterprise value (TEV), value of disclosed and undisclosed tangible and intangible assets.

With an estimated intangible assets component of 74% (as proportion of TEV), India is just behind US (75%) and Switzerland (74%), according to Global Intangible Tracker 2007 (GIT), the most extensive global study ever on intangibles assets by the London-based Brand Finance Institute.

GIT 2007, exclusive global break with ET, covered over 5,000 companies in 32 countries. For India, GIT considered the top 50 companies (by market cap) on the Bombay Stock Exchange. Global intangibles to TEV average is around 65%.

This partly reflects the dominance of the software sector in the Indian stock market. And with rapid growth in healthcare, personal care, pharma and biotechnology, the country's intellectual capital is poised for a big leap. It also sets the stage for Indian brands and companies to attain critical mass and pursue global trajectories, says the study.

Today, India's TEV of $365-billion (2006) accounts for a measly 0.8% of the global figure ($ 47.7-trillion), and tangible assets make up a small $96-billion of that. The rest constitute a massive wealth of $269-billion of disclosed and undisclosed intangible assets ($3-billion and $266-billion, respectively).

And if the estimates for the first half of current year (HY 2007) are anything to go by, Indian economy with as high an intangible assets of $320.3-billion (up from $269-billion in 2006) could actually topple the top two economies on the intangible to TEV proportion parameter.

At the top of the heap amongst Asian economies, India leads China by far, with the latter's TEV showing 58% of intangible asset component. UAE comes third in Asia with 55% proportion of intangible assets in the economy. Other most intangible Asian economies include Japan (44%), Singapore (45%) and Taiwan (45%).

Malaysia (43%) and South Korea (25%) remains at the bottom of the intangibles heap. As Indian economy grows, it is likely to increase the lead. Interestingly, India Inc has in fact seen the proportion of its intangible assets soar since the beginning of this decade (2001) when it stood at just 56% of $75.1-billion TEV.

The GIT study assumes significance in the wake of changes in the accounting practices, which means that the valuation of intangible assets is now a boardroom issue and cannot be ignored. The ongoing GIT study has so far covered over 11,000 companies quoted in 32 countries over the last six year period. It demonstrates the importance of intangibles and highlights the significant rise in their value over a five-year period.

Even once commoditised sectors that were driven entirely by functional factors are moving rapidly up the intangible value curve. The companies had a TEV of $47.7 trillion at the end of 2006 of which $16.7 trillion represented tangible net assets and $5.9 trillion disclosed intangible assets. The remaining $25.1 trillion represents undisclosed value, quotes the GIT 2007 study.

GIT 2007 is extensive in the sense it captures dominance of intangible assets across 50 industry sectors. Advertising, internet, software, healthcare services and cosmetics/personal care remain the top five sectors with the proportion of intangible assets to the total assets ranging between 90-97%.

Biotechnology, healthcare products, media, computers and pharmaceuticals are the next big sectors rated high on intangibles. Forest products & paper and automobiles are the ones with lowest proportion of intangibles, under 30% of TEV.

India emerges Top 3 economy in the world- Indicators-Economy-News-The Economic Times


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## aryan2007

IBM sees India as its global hub by 2010

NEW YORK:: Betting big on the India advantage, IBM, one of the worlds biggest information technology (IT) companies, eyes India as its hub for global delivery, providing research software, besides contributing significantly to the companys revenue. Talking about its road map for 2010, IBM vice- president (financial management) Jesse Green said, We think of India as a support to IBM. The country will be a hub of global delivery which will help us improve margin components and growth initiatives.

The IT giant, which is already working with local telecom major Bharti Enterprises and has entered into pacts with some other Indian corporates, expects its revenue from the country to touch the $1 billion-mark by the end of the year. We expect our revenues to reach $1 billion by the end of this calendar year, up from $700 million in 2006, driven by strong factors. In the first three quarters of the current financial year, our revenue has grown by over 39 per cent, Green said. The recent deals with some of Indias big corporates are likely to contribute a good chunk to IBMs revenues. Besides Bharti Enterprises, the IT behemoth has also entered into agreements with BSNL and Idea. Other big names to have inked pacts with IBM include realty major DLF, Central Board of Direct Taxes, Delhi International Airport, Financial Information Network and Operations and Apollo.

The $1 billion would include revenues from services and solutions provided by IBM to local clients and other global corporates operating in India, along with total revenues of IBM Daksh  its business process outsourcing unit. Green said factors such as competitive offerings, effective sales force, strong brand name, and technology base along with the ability to offer hardware and software combination would contribute to the expected figure.

Last year the companys India revenue grew by 37 per cent against the same in 2005, while the CAGR from 2002 to 2006 is over 49 per cent. The company experienced broad-base growth during 2002-2006 in telecom, financial services and small and medium businesses, growing at 58 per cent, 34 per cent and 35 per cent respectively, Green said.

IBM brings worlds fastest chip to India

BANGALORE: IBM has launched the worlds fastest computer processor chip, called the dual-core POWER6, in India. With this launch, the companys System p570  which the company says is the worlds most powerful midrange consolidation machine  and bladeCenter JS22 servers, both powered by the new chip, would be available in the country, said IBM India and South Asia director (systems and technology group) Shashi B Mal. The POWER6 features virtualisation capabilities  a means of server consolidation  and is also the latest addition to IBMs Project Big Green initiative. It allows unparalleled power savings on mid-range servers, Mal said.

IndianExpress.com :: IBM sees India as its global hub by 2010


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## Neo

*India to auction 57 oil and gas blocks ​* 
Tuesday, December 11, 2007

NEW DELHI: India will launch the latest round of its auctions for nearly 60 oil and gas exploration acreages as it seeks to decrease dependence on foreign fuel sources, a government minister said on Monday.

The number of blocks on offer would be the largest so far. We will announce NELP-VII on December 13, Petroleum Minister Murli Deora said in the Indian capital. Of the 57 blocks to be offered under the long-awaited seventh round of auctions under the New Exploration Licensing Policy (NELP), nine are in shallow water, 19 in deep sea and 29 on land.

Bids in the auction, delayed by a dispute over pricing, are due on April 11, 2008 and the awards will be decided by June, Deora told reporters. Indian-born billionaire steel baron Lakshmi Mittal may take part in the bidding for the first time, Deora added. Mittal is keen on expanding fast in the oil and gas sector and has a joint venture with Indias state-run Oil and Natural Gas Corp (ONGC) for acquiring oil properties abroad.

He also is partnering Indias state-controlled Hindustan Petroleum Corp Ltd in the five-billion-dollar Bhatinda refinery in the northern Indian state of Punjab and a proposed refinery-petrochemical complex at Vizag in southern Andhra Pradesh state. 

India to auction 57 oil and gas blocks


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## Neo

*India to be regular wheat importer: Canadian body ​* 
Thursday, December 13, 2007

NEW DELHI: India will be a regular wheat importer in the future despite being the worlds second-biggest producer as demand from a growing population races ahead, a Canadian Wheat Board official said on Wednesday.

India imported 5.5 million tonnes of wheat in 2006, its first overseas buys in six years, and has tied up contracts for 1.8 million tonnes this year. I would suggest that India is going to be importing on a more regular basis, Dave Burrows, a wheat board director, told Reuters in an interview in New Delhi.

Perhaps not every year, but on a more regular basis than they have in the past. Burrows is in India as part of a delegation which aims to help the country set up food processing units. Analysts say India needs around 73 million tonnes of wheat annually to feed its more than one billion population. 

India to be regular wheat importer: Canadian body


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## Neo

*Nanotechnology the new frontier for IT power India​*(AFP)

13 December 2007 

BANGALORE - India is hoping nanotechnology could provide a new thrust to its booming economy and to become a world leader in a market expected to be worth one-trillion dollars by 2015, officials say.

Bangalore, Indias science and information-technology capital, is at the forefront of a five-year initiative designed to help India become a global nanotechnology hub, using the countrys vast scientific pool and low costs.

Nano is the boom science of the 21st century, said M.N. Vidyashankar, who oversees technology industries in Karnataka, of which Bangalore is the capital.

It will become the key emerging technology in the 21st century, he told AFP at a nanotechnology conference hosted by the state government earlier this month.

The government has said it plans to spend 10-billion rupees (254-million dollars) to engineer applications using nanotechnology, which scientists say will create lighter, stronger, cleaner and cheaper materials.

Nanotechnology stems from the Greek word nanos, meaning dwarf, and centres on control of matter on an atomic and molecular scale. It is the manipulation or use of materials and devices so minute that nothing can be built any smaller.

The talk of the day is nanotechnology with its wide applications, T.K. Bhaumik, chief economist at Indias biggest private company Reliance Industries, told AFP.

Were looking at it, he said. The company is interested in any upcoming opportunity and nanotech is one of them.

Scientists caution the development period could be prolonged.

Its easy to spot the commercial potential of a research finding in nanotechnology, but the time to market is very long, said Anthony K. Cheetham, an expert at the materials science department at Britains Cambridge University.

But angel investors  affluent individuals who fund start-ups  pledged capital to six promising business projects at the Bangalore conference, said Vidyashankar, declining to identify them on grounds of confidentiality.

The worldwide market for nanotech-engineered consumer goods  from cosmetics and sporting goods to consumer electronics  is forecast to grow to one-trillion dollars by 2015 from an annual 15-billion dollars now, he said.

Already, nanotechnology has given the world materials used to make tennis balls that last longer, rackets that are stronger, golf balls that fly straighter and car wax that gives greater shine, says the US-based National Nanotechnology Infrastructure Network (NNIN).

The Indian Institute of Science and the Jawaharlal Nehru Centre for Advanced Scientific Research in Bangalore are setting up the first of three national nanotechnology institutes on a sprawling campus.

And about 60 scientific institutions will help build nano clusters nationwide to develop applications for industrial products, agriculture, healthcare and drinking water, said Thirumalachari Ramasami, secretary in the federal department of science and technology.

What nanotechnology has done is to create a new excitement in the scientific world, said C.N.R. Rao, Indias foremost expert in the field.

It has captured the imagination of a generation of scientists.

Nanotechnology could lead to the creation of materials with 10 times the strength of steel and only a fraction in weight, or shrink all the information available in Indias libraries into a device the size of a sugar cube.

It can be used to treat diseases by sending tiny robots into human bodies, said Rao, who heads the Indian prime ministers scientific advisory panel and will guide the five-year nanotech mission.

Nanotechnology will have as much impact on our lives as transistors and chips, said the Karnataka governments Vidyashankar.

Its extremely important to the economy of our country and has the capacity to create new, affordable products that will dramatically improve performance.

Khaleej Times Online - Nanotechnology the new frontier for IT power India


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## Neo

*Employment outlook is buoyant in India​*(IANS)

12 December 2007 

NEW DELHI  The overall manpower employment outlook in the country in the first quarter of 2008 is expected to remain buoyant, according to a new survey.

Employers in the mining and construction sector have forecast the strongest hiring plans among the seven sectors covered under the "Manpower Employment Outlook Survey", conducted by Manpower India and released yesterday.

"The strong hiring indications in the mining and construction sector comes in the backdrop of heavy investment in infrastructure across the country," Manpower India managing director Naresh Malhan told IANS.

"There is large-scale construction of roads, airports, power plants, malls and SEZs (special economic zones) all across the country. The introduction of the public-private partnership approach in the construction sector may be adding strength to the growth of this sector."

Of the 5,163 employers surveyed, 43 per cent expect an increase in staffing levels in the first quarter of 2008, one per cent anticipate a decrease, and 45 percent are expect no change.

Of the 27 countries and territories surveyed globally this quarter, the hiring intentions continue to be robust in India.

Employers in all eight countries and territories surveyed across the Asia Pacific region anticipate positive hiring activity for the first quarter of 2008. 

Employers in the manufacturing and the public administration and education sectors report the least robust outlooks. 

Employers in services, finance, insurance and real estate sectors have reported a considerable decline of 9 percentage points each in their net employment outlook since the last quarter.

Regarding IT, which falls under the services sector in the survey, Malhan said, "The IT sector continues to be a promising sector but it is currently facing pressure because of the appreciation of the rupee."

The seven sectors across which the survey was conducted in India include finance, insurance and real estate; manufacturing; mining and construction; public administration and education; services; transportation and utilities, and wholesale and retail trade. 

Khaleej Times Online - Employment outlook is buoyant in India


----------



## aryan2007

India Inc profits to grow by 20% in next five years

MUMBAI: India Inc's profits are expected to grow more than 20 per cent over the next five years, a top in the financial sector official said. 

"Corporate profits may grow 20 per cent-plus in the next five years" from the present level, Motilal Oswal Securities' Managing Director, Raamdeo Agrawal, told reporters while releasing the 12th Annual Wealth Creation Study here on Friday. 

"India's net trillion dollar GDP journey in 2007 will see distinctly buoyant corporate profits and a boom in savings and investment. At current valuations, margin of safety in the market is low. However, very high liquidity can lift the market to rich levels of valuations for quite some time," Agrawal said, adding India will hit $2-trillion GDP by FY 12. 

The top 100 wealth creators created Rs 7,065-billion of wealth between FY-02 and FY-07. 

Agrawal said that Reliance Industries has climbed its way up the list of biggest wealth creators this year having created net wealth of Rs 1,856-billion, followed by ONGC at Rs 1,490-billion and Bharti Airtel by Rs 1,366-billion. 

The IT bellwether, Infosys, ranked fourth with net wealth of Rs 855-billion, ICICI Bank Rs 566-billion, BHEL Rs 512-billion, SAIL Rs 451-billion, L&T Rs 433-billion, State Bank of India Rs 407-billion and Wipro Rs 394-billion. 

During the study period 2002-07, MNCs mainly led by FMCG and pharma stocks underperformed the Indian companies both in terms of earnings CAGR and price CAGR. 

However, Indian markets still believe in the long-term potential of MNCs as indicated by their significant P/Es. 

Over the last ten years, MNCs have lost significant share, both in terms of number of companies and amount of wealth created. Within MNCs, there is a sharp change in composition with engineering and capital goods companies like ABB, Siemens and MICO, replacing FMCG companies like Hindustan Unilever and Golgate. 

Given India's capex boom, the financial and stock market performance of MNCs is still in line with Indian companies, the study said. 

The PSUs in aggregate also underperformed the Indian companies both in terms of earnings CAGR and price CAGR. The PSU laggards in price growth are Neyveli Lignite, Shipping Corporation, Indian Oil, NALCO and GAIL. 

A steady growth rate of 16 per cent between 2002 and 2007 has already led to exponential growth in businesses such as telecom and cement. "We believe the next five years will accentuate this exponentially, which will also spread to several more sectors of the economy," Agrawal said. 

India's forex reserves have bulged from close to zero in 1991 to a healthy USD 200-billion in 2007. 

"Huge forex capital flows do pose problems for the Reserve Bank of India (RBI), to manage the triad of exchange rate, interest rate and inflation. However, the overall impact of such flows has been positive for India," Agrawal said.
India Inc profits to grow by 20% in next five years- Earnings-News By Company-News-The Economic Times


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## Bushroda

*Forget China: India is the economic future* 
J. COLIN DODDS 
Halifax Daily News, Canada

Media attention has focused on the rise of China to be the workshop of the world, yet waiting in the wings is India - a member of the BRIC countries (Brazil, China, India and Russia), the world's largest democracy and an emerging economic powerhouse in its own right. It also possesses a nuclear capability.

With a population of more than 1.1 billion, 23 recognized languages and over 1,650 dialects (Hindi is the official language and English a functional subsidiary official language), a stereotyped view many have of India would be one of poverty, illiteracy, disease and bureaucracy.

While these factors still exist, the India of today is showing both an internal and external economic dynamism that will catapult the country into one of the major economies of the 21st century.

With a more free-market approach than has existed since independence from the U.K. in 1947, and an emerging middle class of over 300 million, the economic emergence of India is illustrative of the fact that models of development are not uniform.

Indeed, India's approach has by necessity and culture been very different to that of China's, both in terms of the role of government and in the sectors of development.

*Not exporting*

Despite a strong manufacturing base, it has not sought to compete in offshore manufacturing, so its growth has not been exported.

Rather, building on its strengths, it has developed a very successful outsourcing capability in the service sector using the English-language skills of its population.

Of particular note is India's role as a world-class leader in the IT sector. After decades of exporting people, India is now attracting back former residents and their children, including many from Canada, to work in this sector.

With a more modest growth rate of six to eight per cent, the Indian economy is the fourth-largest in the world as measured by purchasing power. The development model adopted by India has been more demand-driven and bottom-up, using indigenous funds as opposed to foreign direct investment (FDI).

The entrepreneurial drive found so much in India has now expanded into Indian multi-nationals across the globe.

For example, less than a decade ago, few would have heard of Tata.

Founded in the mid-19th century, domestically, its operations are well diversified, but it has recently emerged as a global brand name with 246,000 employees and operations in over 85 countries including Canada (with Tata Consultancy).

Visitors to Boston might be surprised to learn that Tata owns the Ritz Carlton hotel.

*Leading phone carrier*

Through its ownership of undersea cables bought from Tyco International, it is the largest carrier of international telephone calls in the world.

Through its acquisition of Corus, an Anglo Dutch steel maker, Tata is now one of the largest steel producers in the world.

Closer to home, fans of Tetley Tea may not realize this is a Tata company

Also, the famous icons of the U.K. automobile industry - Jaguar and Land Rover - may be bought from Ford. While they are the favoured bidder, if they are not successful, there is another Indian firm, Mahindra and Mahindra, in the wings.

The continued economic success of India is important to the vision of an Atlantic Gateway and the Port of Halifax.

With congested ports on the West Coast, the Suez Canal provides a closer trade route and we have spare port capacity.

With Nova Scotia Business Inc. playing a key role, Halifax has hosted business delegations from India eager to see the opportunities for developing these trade linkages.

To assist in furthering these and other trade and investment opportunities (including in education), executive MBA students from the Sobey School of Business will be in India again in February 2008.

India is on the ascendency and unlike Vietnam, it is not a direct economic competitor to China.

However, it will assume not only a key regional economic and political role, but through its rich history and culture, it will be a strong and stable force in the world for democracy, civil society and social justice.

*J. Colin Dodds is President of Saint Mary's University and a Professor of Finance in the Sobey School of Business. *


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## Neo

*Indias central bank bought $12.54bn in Oct​*
MUMBAI: Indias central bank bought a record $12.544 billion in intervention in October to slow down a rising rupee, which has gained about 12 percent this year, data on Friday showed. 

The Reserve Bank of India (RBI) has bought $64.3 billion in intervention during the first 10 months of 2007, including $11.867 billion in September that was the previous monthly record. 

The currency has been boosted by foreign portfolio flows this year of nearly $17 billion, which has propelled the main stock index to a series of record highs. 

The inflows have also swelled Indias currency reserves by $96.3 billion this year to $273.5 billion on Nov 30. reuters

Daily Times - Leading News Resource of Pakistan


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## Bushroda

*India, a Stirring Giant, Is the New Place to See and Be Seen* 
By HEATHER TIMMONS
NYTimes, New York
December 13, 2007

NEW DELHI  If its Monday, it must be Romania  and Finland and Minnesota. 

A soaring economy and crumbling trade barriers are making India a must visit destination for foreign politicians and executives. The crush of visitors, often first-timers but also companies seeking to expand their existing operations here, lands daily. They all hope to sign deals, find local partners, sell their wares or just soak up the contradictions that characterize the worlds largest democracy, a singular melding of chaos and opportunity.

Bald demographics make India impossible to ignore, and the slowdown in the United States economy adds to its appeal. About half of the countrys 1.1 billion people are under 25, and its rapidly expanding middle class is already estimated to be as large as the entire population of the United States. A rocketing stock market and a fast-growing class of the superrich add to its appeal.

Trade experts compare the rising tide of interest to the wave of outsiders who flooded China a few years ago. This year, Felipe Calderón Hinojosa became the first Mexican head of state to visit India in 22 years. Angela Merkel, the chancellor of Germany, President Luiz Inácio Lula da Silva of Brazil, and Henry M. Paulson Jr., the United States Treasury secretary, have all paid their respects. 

But official delegations are arriving from unexpected corners of the globe, too. On a recent typical Monday in New Delhi, the government played host to Minnesotan businessmen led by Gov. Tim Pawlenty, a Romanian delegation led by the senior counselor in the ministry of small and medium-size companies, and Finns led by the minister of trade and development. 

Privatization of major industries, a quickly Westernizing, youthful population and the prevalence of English draw a wildly diverse group of prospectors. 

On a recent visit to Mumbai, Donald Trump Jr. pledged to invest in real estate there, Jägermeister held parties in New Delhi to introduce consumers to its herbal liquor, Prudential Financial partnered with the Indian real estate giant DLF to create an asset management business and Fiat announced tentative plans to import the Alfa Romeo.

India is like the proverbial bus in todays business world, said Suhel Seth, managing partner with Counselage India, a New Delhi-based branding consultancy. No one knows where it is going, no one knows whether there is space on it for them  but no one wants to miss that bus. 

Given the vast and varied interest, Indian business leaders can sound overwhelmed. Iceland is suddenly on our radar screen, said Supriya Banerji, the deputy director general of the Confederation of Indian Industry, one of the countrys largest trade groups. Malta is coming in and Cyprus is clamoring for us. So are Trinidad and Tobago, Uganda, Vietnam, Kazakhstan and Mozambique, all of which have sent delegations. 

It is too soon to tell what impact the visits will have economically. They rarely yield immediate results, and sometimes they produce negative reactions. Indias mix of poverty and areas where vast, fetid slums edge newly refurbished international airports and barefoot children beg outside of $500-a-night hotels, has left more than one Western visitor aghast.

The realities of India often surprise even first-time visitors who have studied the country. Signs of social upheaval  strikes, dangerous roads and electricity that flickers off even in the most luxurious hotels  are common. One recent morning in a five-star New Delhi hotel, bleary-eyed Minnesota executives puzzled out a scene from the night before. As they had returned from a visit to the Taj Mahal, thousands of protesters blocked the road, police conspicuously absent. The Americans did not make it back to New Delhi until after midnight. 

We learned a lot, said Jonathan B. Farber, president of global underwriting for Travelers, the insurance company, picking his words. It was interesting to see how the logistics worked themselves out, he said, recalling that as protesters laid down in one lane of the highway, two-way traffic seemed to intuitively share the other lane.

In spite of such hiccups, most visitors are optimistic about Indias future and the opportunities it offers their companies. To date, trade has been rather modest, acknowledged Asko Numminen, the Finnish ambassador, tall and blue-eyed, in an understated gray suit that complemented his embassys clean Nordic lines. In a nod to his host country, his tie depicted a field of elephants.

In Finland, Mr. Numminen said, we are speaking about the India phenomena. He said companies, universities and research centers were looking toward India because it had the biggest pool of human resources in the world. Since the beginning of September, Mr. Numminen has traveled twice to Chennai to open factories for Finnish companies, and Finnair now has 12 direct flights a week from Helsinki to India.

Members of foreign royalty are also making official visits to India  even royalty whose ancestors were involved in colonization of the subcontinent centuries ago. Queen Beatrix of the Netherlands arrived in October, with eight of her countrys most important chief executives, on her second visit to India.

Warner Rootliep, general manager for the Air France-KLM Group in the region, said the trip allowed the executives a great opportunity to raise some questions directly to the prime minister and other ministers present. 

Showing off a knowledge of India is often de rigueur on the visits. When Gov. Jon Huntsman Jr. of Utah came in October with university administrators and biotechnology executives to pitch business opportunities with Utah, he boasted over lunch with Indian industrialists that he had celebrated Diwali, the most important Hindu festival, at the governors mansion back home. 

Grinning, he said the relationship between the United States and India had gone from being flat as a chapati to sweet as gulab jamun, referring to a flatbread and a local dessert.

Mr. Pawlenty of Minnesota started his speech in New Delhi with namaste, the Hindi greeting, though he was quick to address the obvious question: What could a group of Minnesotan and Indian businessmen have in common? 

He said Indians tended to like spicy food, while some Minnesotans considered milk spicy, and called the contrasting weather a clear divide. But Mr. Pawlenty noted similarities too: both Minnesota and India broke away from Great Britain, both play forms of hockey, and rural life and farming are a backbone of each. 

To be sure, India remains in Chinas shadow. Because of weak infrastructure, a fractious political climate and other hurdles, Indias foreign trade and investment figures are dwarfed by Chinas, where foreign direct investment was nearly $70 billion in 2006. But many foreign companies and governments increasingly equate the two when they talk about the growth markets of the future. 

The government here expects foreign direct investment to grow rapidly next year, to some $30 billion, from $19.5 billion, and the economy to grow at 9 percent for the third year in a row. 

And India definitely tops China on one front. Because of increasing business travel demand, American Express predicts, hotel room rates here will increase more than anywhere else in the world in 2008: 34 to 38 percent for midrange hotels and 38 to 41 percent for the best hotels.


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## Bushroda

*India's Peaceful Rise*
Lee Kuan Yew 
FORBES, NY
12.24.07, 12:00 AM ET

Even though the economy's annual growth rate has been 8% to 9% for the last five years, India's peaceful rise hasn't led to unease over the country's future. Instead, Americans, Japanese and western Europeans are keen to invest in India, ride on its growth and help develop another heavyweight country.

I recently had the opportunity to visit New Delhi twice. In November JPMorgan Chase (nyse: JPM - news - people ) brought its international advisory board, its European board and its principal officers from many parts of the world to the city for a two-day meeting. And earlier this month Citigroup (nyse: C - news - people ) invited me to speak along with the bank's top leaders at an Asia-Pacific Business Leaders' Summit there. Two of the largest U.S. banks consider India to be a growth story and are eager to service American and Indian companies. I did not detect any anxiety over India becoming a problem to the present world order.

Why has China's peaceful rise, however, raised apprehensions? Is it because India is a democracy in which numerous political forces are constantly at work, making for an internal system of checks and balances? Most probably, yes--especially as India's governments have tended to be made up of large coalitions of 10 to 20 parties.

One example of India's "checks and balances" at work was the suspension of its talks on a U.S. nuclear power deal. Although this deal is manifestly in India's interests, 60 communist MPs--part of the Congress Party-led coalition government--opposed the deal. Subsequently, the Communists allowed negotiations to resume, reserving their position on the outcome. India's development will, from time to time, run into domestic obstruction.

Contrast this with the singleness of purpose in policy and its execution displayed by China's Communist government.

India's navy has an aircraft-carrier force; its air force has the latest Sukhoi and MiG aircraft; its army is among the best trained and equipped in Asia. India can project power across its borders farther and better than China can, yet there is no fear that India has aggressive intentions.

Could this be because India is surrounded by states in turmoil? Pakistan is in crisis; a bad outcome there will increase the terrorist threat to India. As Pervez Musharraf is now an elected civilian president, he won't have the same command over the army he has had as army chief. And any other elected president will have even less sway over the military. Nepal is a deeply divided and troubled country. Sri Lanka is embroiled in an unending civil war, with the Tamil Tigers carrying out endless suicide bombings. India obviously has preoccupations enough to keep its focus fixed on its border regions.

*Different Impact *

Suppose China were also a democracy with multiple parties and political power bases? Would a multiparty China with a yearly economic growth rate of 9% to 12% be viewed with the same equanimity as India is? Such a China would probably continue to make big strides on the economic, social and military fronts, with more sophisticated capabilities on the ground and sea and in the air and space, and would eventually become a peer competitor, if not an adversary, of the U.S.

The speed of China's change and the thoroughness, energy and drive with which the Chinese have built up their infrastructure and pursued their goals spring from their culture, one that is shared by the Koreans, Japanese and Vietnamese, who adopted the Chinese written script and absorbed Confucian culture. The Chinese are determined to catch up with the U.S., the EU and Japan. Fast-forward 20 to 30 years and the world will have to accommodate a more technologically advanced and economically more sophisticated China, whether under a single- or multiparty system.

India does not pose such a challenge--and won't until it gets its social infrastructure up to First World standards and further liberalizes its economy. Indeed, the U.S., the EU and Japan root for India because they want a better-balanced world, in which India approximates China's weight.

The Indian elite also speak, write and publish in English. They hold a wide range of diverse views--and to the degree that Amartya Sen, a Nobel winner in economics, entitled one of his books The Argumentative Indian. Few Chinese, on the other hand, speak--let alone write in--English, and what they publish in Chinese doesn't always disclose their innermost thoughts.

What if India were well ahead of China? Would Americans and Europeans be rooting for China? I doubt it. They still have a phobia of the "yellow peril," one reinforced by memories of the outrages of the Cultural Revolution and the massacres in Tiananmen Square, not to mention their strong feelings against Chinese government censorship. China will have to live with these hang-ups. To reinforce the idea that theirs will be a peaceful path going forward, the Chinese have rephrased the term "peaceful rise" to "peaceful development." Greater openness and transparency in Chinese society would also help.

Singapore and Southeast Asia (Asean), sandwiched between these two behemoths, need China and India to achieve a balanced relationship, one that allows both to grow and prosper, pulling up the rest of Asia--East, Southeast and South--with them. 

*Lee Kuan Yew, minister mentor of Singapore; Paul Johnson, eminent British historian and author; Ernesto Zedillo, director, Yale Center for the Study of Globalization, and former president of Mexico, rotate in writing this column.*


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## Bushroda

*Doctors quit dirty NHS for India*
Dean Nelson in Delhi and Abul Taher
The Sunday Times, UK
December 16, 2007

THE influx of thousands of Indian doctors into the National Health Service is going into reverse. Hospitals in India are now said to be cleaner and better equipped than many in Britain and doctors are quitting the NHS to work there instead.

The director of one of Indias biggest private hospital chains said he was receiving five job applications a week from NHS doctors and that half his 3,000 consultants were from Britain.

Theres a feeling that Indias time has come and theres a huge need for these people to come back, Anupam Sibal, director of the Apollo hospital in Delhi, said yesterday.

Doctors say they are moving to India because of its economy, state of the art equipment, higher standards than the NHS and a better quality of life. In particular, they say hospitals in India, which many Britons still imagine to be impoverished and dirty, suffer less from hospital-acquired infections such as MRSA.

India has no equivalent of the NHS but there has been a boom in private hospitals that resemble luxury hotels, with marble foyers and corridors mopped by an army of liveried cleaners.

One of those who has made the transition is Mahesh Kul-karni, an orthopaedic surgeon, who left Bristol Royal Infirmary after 10 years in Britain. He is now a consultant at the Aditya Birla Memorial hospital in Pune.

The hospitals are better than in Britain, he said. This hospital is spotless and clean compared with the old hospitals in the UK, some of which are more than 100 years old. I started in January this year and I have not seen MRSA here yet.

Its had a lot of investment, and things I couldnt do in Britain I can do here. We have clean air operating theatres [that remove dust from the air], and our intensive care unit here is fully equipped with special monitoring instruments.

When I went to England 10 years ago, India was 10 years behind Britain. Now theres hardly any difference.

Bristol Royal Infirmary defended its record, saying there had been a 35% increase in spending on new equipment and that its latest inspection had found cleanliness was acceptable.

Ameet Kishore had worked as an ear, nose and throat consultant in Glasgow Royal Infirmary for 12 years when he moved to the Apollo hospital in Delhi two years ago. Although reluctant to criticise the NHS, which had taught him so much, he said that the new Indian hospitals were cleaner and better resourced.

He contrasted the number of cochlear implant operations that he could perform: at Crosshouse hospital, Kilmarnock, the main ENT centre for the west of Scotland, he was limited to 40 a year; in Delhi he had done 70 in the past six months.

Other doctors cite new European Union rules for their decision to move. Shailendra Magdum, a specialist registrar in neurosurgery at Radcliffe Infirmary in Oxford until he left for India in August last year, said that rules favouring EU doctors over Indians had played a part.

The EUs working time directive had also lowered NHS standards, he added, by restricting the amount of time that young doctors could spend on the wards.

For a neurosurgeon to be good you have to spend a lot of time on the wards, but in Britain the working time directive is running down training, he said.

Although salaries are usually lower in India, doctors are finding that their standard of living is better. Kishore said he lived in a bigger house with a driver, cleaner, cook, nanny and watchman to look after him, his wife and two young children.


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## Bushroda

*The Other Tiger*
*India is rising to economically rival China as a destination for inward investment, outsourcing and as a market in its own right. Exec UK investigates.
*
*By Ruari McCallion* 
Executive, UK

The Hitchhikers Guide to the Galaxy began with an observation about the Universe: that it is really big. That blinding glimpse of the fatuously obvious makes a kind of point thats relevant to India, too. The distances are vast, the changes dramatic, the contrasts are deep. 

The offshore energy fields of the south-east, off Tamil Nadu, and those off Gujarat and Mumbai differ from each other and are a world away from the tea plantations of the north. The chaos and bustle of Delhi and Calcutta contrast with the relative tranquillity of Goa. To talk of India as a single entity with a unified range of opportunity is to misunderstand the country. 

India is a democracy. China, its neighbour and economic rival, has centralised control over its economy and things happen because the Party wants it to. In India, everyone who has a voice uses it: agreement is necessary before progress happens. That potential weakness  the disparity, argument and need for consensus  can also be a strength. One person who has experienced this is Robert Berkeley, managing director of Express KCS, which provides outsourcing services to publishing houses in the UK, the US and other, primarily English-speaking markets. 

When you land at Beijing, it feels like a western airport. Its quiet and your progress is smooth. Land at Delhi and you emerge into chaos, he said. Its free-flowing. People leap into any holes they spot and start selling. Delhi airport reflects that [vibrant] culture. If you look, any centralised economic management system will ultimately fail. It cant govern effectively because it cant know everything. The Soviet Union tried and failed. 

The chaos that confronts the newcomer into Delhi, Calcutta or anywhere else in India is, then, a manifestation of opportunity. The same could be said of the poor power supplies and inadequate physical infrastructure but one could be forgiven for wishing for a degree of control, so that at least the lights would stay on without recourse to back-up generators and their expensive diesel fuel. Change is happening in India although not as fast as in China  it started later, has progressed more slowly but its increasing in pace. 

There were false starts and attempts at reform going back decades; some more successful than others. The country can now feed itself, for example. While poverty and hunger persist, the last great Indian famine was in 1967. 

*Institutions and infrastructure* 

Economic reform began to look promising in 1980, when Mrs Gandhi made clear her desire to tap into the huge potential represented by NRIs  non-resident investors, Indians and those of Indian descent resident overseas. Restrictions on non-residents investing in private Indian companies had, till then, been total: it simply wasnt allowed. 

The potential was enormous: NRIs accumulated savings amount to something over $700 billion. But the process was not smooth. When active outside investors came along, the established families, which had run things pretty much their own way for ages, didnt like it at all. The issue came to a head when 

To read the full article, click here


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## Bushroda

*Booming for business*
by Alex Dunnin 
Canberra City News, Australia

INDIA is on the move and its time we started taking it seriously as a global investment partner. But fuelled by its booming economy, stratospheric stock market, surging currency and growing workforce; its not just countries such as Australia looking to invest in India, but Indian companies looking to invest in Australia.

The economy is growing four times as fast as ours, the stock market three times, they have more foreign currency reserves and they have a much younger workforce willing to study and work much harder than ours. Little wonder their GDP already matches ours and their stock-market capitalisation is catching up fast.

Indias dramatic transformation is even more remarkable given its socialist past and how it was almost bankrupt just five years ago. 

Illustrating the turn-around, the Indian Tata group is odds on to buy the Borders Australia bookstore chain and Tata is joining with Indian private equity groups set to buy the Jaguar and Rover motoring groups from Ford. 

No wonder there is a waiting list of entrepreneurs, pension funds and investment managers queuing up to visit the country to do business. With 26 million Indian households earning more than $A55,000 a year, they have a middle class bigger than our entire population and, as their countrys wealth keeps increasing, this number will only grow and keep growing.

Add in India having one of the worlds most competitive education systems (annually producing 100,000 new scientists as well as thousands of other professionals), you can see why India has become such an economic force.

Even scarier for Australia is that India being fuelled by a savings rate approaching 30 per cent in contrast to ours which is less than five per cent.

Residents in major cities such as Mumbai and New Delhi now find their properties worth hundreds of thousands of dollars and, in turn, are pushing property prices skywards and promoting property development as residents become tempted to sell out to harvest the values of their appreciating real estate. 

Confidence is even so high that Indias affluent class now have enough confidence in their business and regulatory culture to keep much more of their capital in the country rather than always export it.

India nonetheless needs massive spending on national infrastructure and this is why they are targeting $US 500 billion over the next five years in national spending. Projects already earmarked are highways, railway, ports, aviation and energy. 

But with a stock market that has jumped six-fold in four years, the big question is whether its governance mechanisms can absorb the explosive growth and maintain market integrity. 

However, these fears may be ill-founded as the Bombay Stock Exchange (BSE) has implemented a range of operational and governance innovations that should make even the Australian Securities Exchange (ASX) take notice.

For example, the BSE was one of the first stock markets in the world to go fully electronic and set up a public-access, web database on company directors, while its "name and shame" policy for companies with significant unresolved complaints is beyond what most developed-world exchanges have introduced.

India is open for business providing massive opportunities for Australian investors to get in on the ground floor. 

*Alex Dunnin is the director research and editorial at the Rainmaker group. He recently visited India as part of the Australia India Financial Forum.*


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## Neo

*Indian Jet Airways to fly to BD *​ 
Sunday, December 16, 2007

DHAKA: Indian private airline Jet Airways will fly to the Bangladesh capital Dhaka from Sunday, a company official said on Saturday.

Dhaka will become the 11th international destination for the airline, K Datta, Executive Director of Jet Airways, told a news conference in Dhaka.

The airline will operate one daily flight between Dhaka and Kolkata in West Bengal, India and four flights a week between Dhaka and New Delhi, effective from Sunday, Datta said. 

The new generation Boeing 737-800 aircraft will be deployed for the new routes.

The airline currently operates a fleet of 75 aircraft, which includes eight Boeing 777-300 ER aircraft and six Airbus A300-200 aircraft.

It also plans to extend its international operations to other cities in North America, Europe, Africa and Asia in phases with the induction of additional wide-body aircraft into its fleet, Datta said.

Indian Jet Airways to fly to BD


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## Neo

*About 1 in 5 IBM employees now in India​*


IBM Corps expansion in developing countries shows no sign of relenting. The technology company revealed that it now has 73,000 employees in India, almost a 40 percent leap from last year. 

IBM did not provide updated figures for its work force in the US, which has held steady around 125,000 people in recent years. Nor did IBM project its total head count. It had 355,766 employees worldwide at the end of 2006.

If the total has risen by the same rate as in 2006, almost one in five IBM workers now is in India, its second-largest center. Like many other technology providers, IBM has rushed to take advantage of the lower labor costs India offers even for highly skilled workers. IBMs base in India numbered only 9,000 people in 2003, but it was about 53,000 last year.

IBM has been stressing not only the lower expense of working in India but the potential of the Indian market. IBM executives told visiting Indian journalists last week that the company expected to see revenue from the Indian market jump to nearly $1 billion this year, from $700 million in 2006.

Armonk, NY-based IBM is also ramping up in other key developing markets. Its chairman and chief executive, Sam Palmisano, recently formed a new organisation that will spur IBMs investment in emerging economies.

The plan is meant to capitalise on the higher growth rates in the so-called BRIC countries of Brazil, Russia, India and China. IBMs revenue from those countries rose 18 percent in the first three quarters of this year, even after discounting the benefit of currency fluctuations. IBMs total employee count in those countries now is nearly 100,000, up from 70,000 a year ago.

IBMs vice president of financial management, Jesse J. Greene Jr., would not forecast how much more hiring the company still might do in emerging markets. However, he said We see continuing good stability in the BRIC countries in general and good opportunity for growth in those countries as well. ap

Daily Times - Leading News Resource of Pakistan


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## Contrarian

IBM is indeed hiring a LOT in India. It has been consistently hiring from most universities in India for the last 2 years.


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## bd_wonder

i wonder IF ibm's quality will decline from such massive 'cheap' employment tactics.


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## Neo

bd_wonder said:


> i wonder IF ibm's quality will decline from such massive 'cheap' employment tactics.



What is your problem dude..???


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## Neo

Problem solved!


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## Neo

*India FDI jumps 65pc in H1; lags behind China *​ 
Wednesday, December 19, 2007

NEW DELHI: Foreign investment in India jumped 65 per cent in the first half of the fiscal year that began in April compared with a year earlier, the countrys commerce minister said on Tuesday.

Commerce Minister Kamal Nath said India saw 7.2 billion dollars in inflows, retaining its place as the second most attractive foreign investment destination after China, according to a Press Trust of India agency report.

FDI inflows continue with great momentum, said Nath. India received a total of 15.7 billion dollars in foreign investment in 2006-2007, more than a 100 per cent increase from a year earlier.

Indias services sector, dominated by the call centre business, saw the biggest investment followed by telecom services and real estate, the report said. Even with increasing investment however, India lags far behind China, which receives at least five times as much foreign investment. 

India FDI jumps 65pc in H1; lags behind China


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## Neo

*India seeks 10pc growth​*
NEW DELHI, Dec 19: India aims to achieve 10 per cent economic growth by 2012 but is not immune to a global credit crunch spreading from the United States, Prime Minister Manmohan Singh warned on Wednesday.

There are some clouds on global financial markets following the subprime lending crisis... We cannot be fully immune to international developments, Singh told top government policymakers.

The warning was the first by Singh about the fallout on India of the credit turmoil which stems from a default crisis in the US subprime mortgage sector.

The country of 1.1 billion people has been seen by many analysts as a safer investment play than other nations with its still relatively closed economy and fast-growing middle class against a backdrop of overall global weakening.

But Singh said he wanted to sound a note of caution. There are worries the growth of the US and other leading economies may slow down and some may even go into a recession. This may impact both our exports as well as capital flows, he said, as he sought approval of the governments new five-year plan -- an economic roadmap targeting 10 per cent growth by 2012.

Liberalisation means our economy is now increasingly integrated into the global economy with the external sector accounting for almost 40 per cent of the GDP, he said, referring to such items as external debt and trade.

Singh launched the process of opening up India to foreign investment and trade in the early 1990s when he was finance minister.

But it is possible with the correct set of policies... we will not only be able to maintain this momentum of high growth into the near future but may be able to raise it to 10 per cent by 2012, Singh emphasised.

The country needs to achieve double-digit growth to lift tens of millions out of deep poverty, Indian leaders say.

Indias economy has grown by nearly nine per cent annually for the last three years, second only to China, and the boom has drawn a tide of foreign funds that has accelerated since the credit turmoil erupted earlier this year.

Foreign investment in India jumped 65 per cent to $7.2 billion in the first half of the fiscal year to March 2008, figures this week showed, while the stock market has rocketed 45 per cent this year, boosted by overseas funds.

But economists have warned of an economic slowdown in the face of high interest rates, rapid currency appreciation, weakening global demand, rising commodity prices and high global oil costs.AFP

India seeks 10pc growth -DAWN - Business; December 20, 2007


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## Neo

*india: Economy seen growing 8.7% ​*
MUMBAI: Indias economy is expected to grow at a faster pace than previously expected in 2007/08, but growth is still seen slowing from an 18-year peak of 9.4 percent in 2006/07, a Reuters quarterly poll shows. The median forecast in the poll of 10 analysts was for growth of 8.7 percent in the fiscal year to March 31, 2008, stronger than the 8.5 percent forecast in a similar poll in September. 

It would also be slightly higher than the central banks forecast of 8.5 percent and in line with an average pace of 8.6 percent over the last four fiscal years. Growth was expected to moderate to 8.3 percent in 2008/09. We are beginning to see a lagged impact of monetary tightening and of course, slowing external demand. This is yet to play out fully, and an appreciating rupee could have an impact on export demand, said Abheek Barua, chief economist with HDFC Bank. The central bank has raised its main lending rate five times since June 2006, the last increase in March. It has also raised banks reserve requirements by 250 basis points over the past year to check price pressures. 

Annual inflation, based on wholesale prices, was at 3.75 percent in early December, after hitting a five-year low of 2.97 percent in late October. Inflation, which has moderated from a two-year high of nearly 6.7 percent in January, is forecast at 4.3 percent in 2007/08 and 4.7 percent in 2008/09.

Daily Times - Leading News Resource of Pakistan


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## Logic note

Indian Hotels demands apology from Orient Express
2007-12-20 09:19:10 Source : CNBC-TV18


Indian Hotels wants an apology from Orient Express. The search for a global alliance has been reduced to a war of words between the two companies and their managements. CNBC-TV18&#8217;s Menaka Doshi reports on the latest round of fighting!

A few months ago Indian hotels bought a 10&#37; stake in Orient Express and asked for an alliance, they were turned down by the Orient Express management. The Tata company bought another 1.5% and asked for an alliance again - this time they were rejected rudely.

Orient Hotels in an open letter said many things, but this one line may have hurt the most. Menaka Doshi quotes the letter sent by Orient Hotels - "We believe any association of our luxury brands and properties with your brands and properties would result in a reduction in the value of our brands and business."

According to Menaka, Indian Hotels found the letter to be pejorative, inaccurate and libelous.

Now Indian Hotels is asking for an apology for what it considers a 'pejorative, inaccurate and libelous' letter that Orient Hotels also issued as a press release, though it was meant to be confidential.

Here's the point-by-point rebuttal by the Taj chain to the issues raised by Orient Express -

* Taj Hotels insists it never suggested a merger. It does not need Orient's help to improve the performance of its non-Indian properties.
* That in fact, Orient has gaps in its network in New York and London that could have been filled by Taj.
* That, the association would not reduce the value of Orient's properties, because Taj enjoys a higher room occupancy rate compared to Orient and that it's trailing EBIDTA margin is 15% more than that of Orient's.
* That, contrary to Orient's allegation Taj does not re-brand all acquired hotels as 'Taj'. 

Taj believes Orient Hotels has not met it's shareholders needs, nor does it respect the basic tenets of corporate governance as it has refused to enter into any meaningful dialogue on an alliance with Taj.

Indian Hotels says many Orient shareholders have made advances to meet, but the company has honourably declined them. Now Taj wants an apology from Orient Express.

But here's the killer line at the end of the letter, she says - and it goes - "We believe that those with a fossilized frame of mind risk being marginalised"!


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## Logic note

*Tata set to drive away in Jaguar, Land Rover*

http://www.hindustantimes.com/Story...set+to+drive+away+in+Jaguar&#37;2c+Land+Rover

India Inc is shopping in style. Car makers Ford is set to announce the Tata Group as the preferred bidder for its iconic Jaguar and Land Rover within a fortnight, according to insiders in the deal. The deal is likely to be inked for &#163;1 billion.

The Sunday Times, UK, reported on December 16 that the Tatas are likely to be declared the winners within a fortnight.

Ford&#8217;s picking Tata would be historic because it would be the first time a major Western car group is bought by an Indian company.
Last week, three bidders &#8212; the Tatas, Mahindras and American buyout group One Equity &#8212; were left in the race. It was reported that the trade unions had favoured the Tatas with 46 per cent backing and that strengthened their chances of emerging as the most favoured. Jaguar and Land Rover operations in Britain are based in Wales, and so are some factories of steel giant Corus, which Tata recently bought.

A Welsh government spokesperson told HT that the news was most welcome. &#8220;We are very happy with the group here. We hope that more business will come as the Tatas are expected to set up more units for components of the cars. It will boost employment here.&#8221; She said the Corus trade unions were satisfied with the management.

The deal is said to be for about &#163;1 billion but the exact amount could change once Tata is declared the preferred bidder. Tata sources refused to comment. But Tatas may have to negotiate a settlement with the pension trustees and also ensure that Ford continues to maintain regular supply of components and engines.


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## Energon

As per this analysis  I read recently, the British labor unions were in favor of Tata.

It also says that Land Rover may be a profit making venture while Jaguar may prove to be a white elephant. Given that Tata has promised not to lay off a large number of British workers, I don't know how they can radically reduce costs. 

It'll be very interesting to see what Tata manages to do with these companies.


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## Logic note

> Given that Tata has promised not to lay off a large number of British workers, I don't know how they can radically reduce costs.



Given the Fact that these are Luxury brands there is no need to cut cost . price is never a factor when it comes to luxury brand . 
its the fall in economy in USA which can effect the sales of these brands .
the biggest chalange that TATA wil face is the racist perception of west about Asian nations and its ppl . 
I was reading some where that few dealers in US have objected to this take over by TATA because according to them , ppl in west can accpet a luxury brand made in India or China ..


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## con

Energon said:


> As per this analysis  I read recently, the British labor unions were in favor of Tata.
> 
> It also says that Land Rover may be a profit making venture while Jaguar may prove to be a white elephant. Given that Tata has promised not to lay off a large number of British workers, I don't know how they can radically reduce costs.
> 
> It'll be very interesting to see what Tata manages to do with these companies.



By expanding Jag's market. Currently it is too concentrated in US & UK market. With almost the same price as high end Mercs/BMW lot if business men in India would prefer Jags over merc,given than Jag is now Indian. 

Tata doesn't need to depend on UK/US market alone.


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## Neo

* Boeing signs 10-year deal with Indian firm ​* 
Friday, December 21, 2007

NEW DELHI: Boeing Co signed a 10-year agreement with Indias state-run Hindustan Aeronautics Ltd (HAL) for aerospace manufacturing in India worth more than $1 billion, a senior official said on Thursday.

Under the agreement, Boeing and HAL will explore business opportunities aimed at transferring work packages to India with an initial value of $10-$20 million annually, Jim Albaugh, president and CEO of Boeings Integrated Defence Systems said in a statement.

Boeing would also support Hindustan Aeronautics Ltd in developing manufacturing processes and capabilities needed for the production of hardware for Boeing and/or its subcontractors, he said. 

Boeing signs 10-year deal with Indian firm


----------



## Neo

*Indian inflation cools to 3.45pc​*
NEW DELHI, Dec 28: Indias inflation rate fell two-tenths of a percentage point to 3.45 per cent, official data showed on Friday, but analysts held out little hope of an early interest rate cut.

Annual inflation slowed to 3.45 per cent for the week ended Dec 15 from 3.65 per cent the previous week, according to the wholesale price index, Indias most watched cost-of-living monitor.

The fall was driven by lower prices of fruits, vegetables and textile products. However, poultry, spices and prices of some other goods rose.

Annual inflation stood at 5.73 per cent a year ago.

Inflation has fluctuated in recent weeks but is still well below the central banks target of close to five per cent for the fiscal year to March 31, 2008.

Analysts say they expect no swift cut in interest rates as the central bank fears high global oil prices could trigger a rise in state-set domestic fuel prices and is concerned about strong world commodity prices.

The central bank would prefer to see a meaningful correction in international oil and food prices before officially signing off on a loosening of monetary policy, said economist Chetan Ahya at Morgan Stanley in a research note.

Indias crude costs have shot up by nearly 150 per cent since April 2004 but retail petrol prices have risen by just 29 per cent. The price caps are costing state-run oil retailers around $50m a day.

There is little chance of interest rates coming down due to high inflationary expectations, HDFC Banks chief economist Abheek Barua said.

Growth for the first half of the fiscal year to March 31 was 9.1 per cent. But economists expect the economy to lose pace in coming months as effects of aggressive monetary tightening to curb prices take hold.

HONG KONG: Hong Kong exports growth rose 6.6 per cent in November, slowing from a 9.8 per cent increase in October, on declines in exports to the United States, official figures showed Friday.

A government spokesman said the Chinese market was vibrant although it expanded at a less rapid pace than in previous months.

Most major Asian markets performed well, off-setting the 3.4 per cent fall in exports to the US.In November, total exports stood at 244 billion Hong Kong dollars (31.30 billion US) with re-exports, or goods mostly produced in neighbouring China and exported from Hong Kong, up 6.9 percent to 234 billion dollars.

Domestic exports increased 0.8 per cent to 10 billion dollars in November, while imports grew 9.3 per cent to 260 billion dollars.

For the first 11 months of 2007, total exports rose 9.30pc with re-exports up 11.10pc, imports up 10.30 per cent but domestic exports down 20.60 per cent.AFP

Indian inflation cools to 3.45pc -DAWN - Business; December 29, 2007


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## Neo

*The surge in foreign portfolio investment​*
By Anand Kumar

FOR Indias capital markets, 2007 was indeed a remarkable year. The Sensex, the benchmark index on the Bombay Stock Exchange, saw record gains, with both international and domestic investors pouring billions of dollars into the stock markets.

The Sensex gained by nearly 50 per cent during the year, skyrocketing from levels of around 14,000 to 20,000 and above. Indias market capitalisation for the first time exceeded the countrys gross domestic product (GDP)  it touched a record $1.5 trillion, as against a GDP (in actual terms, not purchasing power parity) of nearly a trillion dollars.

Foreign institutional investors (FIIs) injected over $16 billion into the stock markets in 2007, as against $9 billion in the previous year. This was despite attempts by the government to cool down the inflows, by fiddling with laws relating to participatory notes (PN), an offshore derivative instrument, popular among several international investors keen on participating in the booming stock markets.

In October, the Securities and Exchange Board of India (Sebi), the capital market regulator, stunned investors by imposing curbs on FII investments through the PN route. While the markets crashed in the initial stage, they recovered as sentiments improved. Most foreign investors, who had opted for the PN route in the past, will be ploughing in their funds as FIIs over the next few months, so the curbs are unlikely to impact inflows.

Hefty returns from the Indian stock markets are luring international investors, many of who have been scarred by the sub-prime mortgage crisis in the US. They hope to recover the billions of dollars written-off in the crisis by investing in emerging markets like India.

The Indian economy, growing at a breezy nine-plus per cent, is expected to continue expanding at a brisk pace. Foreign direct investment (FDI) inflows are also growing. Last week, federal commerce minister Kamal Nath revealed that FDI in the first-half of the fiscal (April to October) added up to $7.2 billion, making India the second most attractive destination for foreign investments, after China. This was a 65 per cent jump over the figures for the corresponding period last year.

In financial year 2006-07, India received FDI of $15.7 billion. Nath wants to double this in the current fiscal. Analysts expect India to attract FDI of over $100 billion over the next five years.

The United Progressive Alliance (UPA) government, which has shelved several other key features of the economic reforms process  including privatisation, labour reforms and banking and pension funds reforms  under pressure from its leftist allies, has, however, been opening up several sectors to FDI.

The opening up of the real estate sector to 100 per cent FDI has triggered off a huge flow of investments from abroad in recent months.

While the secondary markets were buoyant during the year, the primary market too remained hyper-active. About $8.7 billion were raised by Indian corporates through initial public offers (IPOs) of shares in 2007, while another nearly $300 million were raised through follow-on public offers (FPOs).

There were over 100 IPOs that brought in a record $8.7 billion, a huge, 72 per cent jump over the figures for 2006. The two biggest IPOs were by ICICI Bank, the largest private sector bank in India (which raised $2.55 billion), and the largest real estate developer, DLF (about $2.35 billion).

Indias IPO market has ballooned phenomenally in recent years. In 1990, Indian companies raised a mere $250 million from the primary markets; even as recently as 2001, they could raise hardly $100 million through IPOs.

According to analysts, Indian companies are expected to raise about $7 billion over the next few months, with nearly 30 IPOs being planned.

But Indias IPO market pales when compared with those of China, where companies raised a whopping $90-plus billion dollars through public issues. Globally, firms raised over $255 billion through IPOs in 2007, according to international consultancy Ernst and Young. The four BRIC (Brazil, Russia, India, China) nations accounted for over $105 billion of IPO funds. With the $8.7 billion raised through IPOs, India was the seventh largest market in the world.

According to Prithvi Haldea, chairman and managing director, Prime Database  which tracks public issues in India  the real estate sector accounted for a third of funds raised through IPOs in 2007.

Improved regulation and transparency has transformed Indias primary markets. Over 99 per cent of the funds that were raised through IPOs were through the book-building route.

Of the 101 IPOs, 50 were over-subscribed by more than 10 times. Consequently, of the 93 IPOs that have been listed, 85 saw a premium on listing; in 38 issues, investors could exit on day one with a hefty profit of 50 per cent, whereas in 16 instances, their wealth doubled on listing. Not surprisingly, public issues have had an overwhelming response in India in recent months.

While foreign investors have been bringing in billions of dollars into India in 2007, it was also the year when domestic businesses began acquiring international companies on an aggressive note.

For the first time, there were more out-bound merger and acquisition deals than in-bound ones. M&A deals (both out-bound and in-bound) involving Indian firms added up to nearly $70 billion, according to Grant Thornton, a consultancy. This was nearly 150 per cent higher than in the previous year.

The most significant and high-profile acquisition was by the Tatas, which paid an eye-popping $13.65 billion for Anglo-Dutch steelmaker Corus. Encouraged by the deal, the Tatas went about eyeing many other firms.

The group, one of Indias largest private sector industrial houses, is currently in the race to acquire British luxury car brands Jaguar and Land Rover from Ford Motors of the US for a price of over $2 billion. Trade unions at the British factories are backing the Tatas bid, and even Ford Motors is eager to sell the two brands to the Indian group. Mahindra & Mahindra, the other Indian auto major, which also evinced serious interest in acquiring the two brands, is almost out of the race now.

But things have not been smooth sailing for the Tatas in their overseas acquisitions. Racist comments have been made in the west about the growing ambition of Indian groups like the Tatas for luxury brands. Some Jaguar dealers in the US felt it would be inappropriate for the luxury car-maker to be controlled by a group that plans to roll out the worlds cheapest car  the Rs1 lakh peoples car promised by Ratan Tata  this year.

The Tatas have also acquired a nearly 12 per cent stake in the Orient Express Hotels  which owns several luxury brands, including the eponymous and legendary train running in Europe. However, Orient Express Hotels has spurned the offer by the Tatas for a strategic tie-up, claiming that its brands would be diluted by associating with the Indian group.

The Tatas have threatened to launch legal action against, Orient Express Hotels, while Indian business bodies have lambasted the companys arrogance. R.K. Krishna Kumar, top executive at Indian Hotels Co  which runs the Taj brand of hotels  a Tata group company, demanded a formal apology from Paul White, the Orient Express Hotels chief, for his pejorative and libelous note regarding the Tata proposal.

Other Indian businessmen have also not allowed allegedly racist and discriminatory policies from affecting their overseas acquisitions. Despite stiff opposition from Scottish brewers, Vijay Mallya acquired the Whyte & Mackay brand of Scotch whisky for $1.2 billion.

For Indian billionaire-businessmen, 2007 was a year when they unveiled their global ambitions and gave warning that they were ready to put up a determined  even nasty  fight in pursuit of their goals.

The surge in foreign portfolio investment -DAWN - Business; December 31, 2007


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## Flintlock

Jamshedpur plant to be world's largest
1 Jan 2008, 1320 hrs IST,PTI

SMS NEWS to 58888 for latest updates
Jamshedpur plant will become world's single largest unit'
JAMSHEDPUR: When the 10-mtpa capacity expansion of Tata Steel completes in 2010, Jamshedpur plant will become the single largest unit and one of the most modern plants in the world, according to Tata Steel managing director B Muthuraman.

"With the completion of the 10-mtpa expansion project, we will be able to fulfil the promises made to our customers even better," B Muthuraman said in a company press release.

The following facilities will be developed as a part of the 10-mtpa expansion project - augmentation of mines, pellet plant of 6 mtpa, expansion of Hooghly Metcoke from 1.2 to 1.6 mtpa, raw material handling facilities, upgradation of existing A-E furnaces, new LD3 BOF shop with 2 x 160 t converters, two single strand thin slab caster of 1.2 mtpa capacity each with 2.4 mtpa hot rolling facilities.

It will also help augmentation of LD2 to 4.0 mtpa, new lime calcining plant, augmentation of utilities and water system, augmentation of power generation & power system, logistics and improvement of town roads, the release said.

H M Nerukar, chief operating officer (Steel) - Tata Steel, Raghunth Pandey, President - Tata Workers Union, were among other dignitaries present on the occasion.
About 

Jamshedpur plant to be world's largest-India Business-Business-The Times of India


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## Neo

*Indian IT market revenue set to grow 24pc: report ​* 
Wednesday, January 02, 2008

BANGALORE: Indias information technology market is poised to expand 24 percent in 2008 as it enters a new growth trajectory, an industry report said Tuesday. 

Revenue from the domestic IT and outsourcing market will touch 1.1 trillion rupees (27.9 billion dollars) this year, offsetting a slowdown in IT spending worldwide, according to the report by market research firm IDC.

The industry is now onto a new growth trajectory, IDC India country manager Kapil Dev Singh said in a statement. But the firm warned that global IT spending would drop, with the US market of particular concern.

IDC forecast that worldwide IT market growth will slow to between 5.5 percent and six percent from 2007s estimated 6.9 percent. Indias booming economy, growing annually by nine percent, is spurring domestic IT spending as companies upgrade computer systems to stay competitive and consumers log onto the Internet.

Indias software and services exports grew by 33 percent to 31.4 billion in the financial year to March 2007 while total revenue climbed by 31 percent to 40 billion dollars. The domestic market has largely been ignored by an industry that has boomed on work from Western firms trying to cut costs by taking advantage of Indias English-speaking, computer-savvy graduates who work for lower salaries.

As the rupee strengthened 12 percent last year against the dollar, eroding revenue from the US market that accounts for two-thirds of software exports, IT companies such as Tata Consultancy, Infosys and Wipro are looking at other countries and the home market to diversify risks. The India domestic IT market will transform significantly, propelled by a greater need for more sophisticated services, the report said. 

Indian IT market revenue set to grow 24pc: report


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## Neo

*Indian November imports faster than exports ​* 
Wednesday, January 02, 2008

NEW DELHI: Indian imports grew faster than exports in November, data showed on Tuesday, and analysts expect the trade deficit could widen further on a mix of record oil prices, a fast-growing economy and a strong rupee.

Exports in November rose 26.8 per cent from a year earlier to $12.4 billion in November, while imports rose an annual 29.3 per cent to $19.8 billion, government data showed on Tuesday.That left a trade deficit of $7.4 billion for November, larger than $5.5 billion a year earlier.

The rupee rose 12.3 per cent against the dollar last year, denting exporters competitiveness in foreign markets but offering some cushion against high oil prices. There could be some moderation in export growth in the coming months. The annual export target is difficult to meet, said D K Joshi, principal economist at rating agency Crisil.

Last April, the government set an export target of $160 billion for the fiscal year ending in March 2008. In Dec, Commerce Secretary G K Pillai said exports were likely to be $140 billion.

Indian November imports faster than exports


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## Bushroda

*Losing an Edge, Japanese Envy Indias Schools*
By MARTIN FACKLER
New York Times
January 2, 2008

MITAKA, Japan  Japan is suffering a crisis of confidence these days about its ability to compete with its emerging Asian rivals, China and India. But even in this fad-obsessed nation, one result was never expected: a growing craze for Indian education.

Despite an improved economy, many Japanese are feeling a sense of insecurity about the nations schools, which once turned out students who consistently ranked at the top of international tests. That is no longer true, which is why many people here are looking for lessons from India, the country the Japanese see as the worlds ascendant education superpower. 

Bookstores are filled with titles like Extreme Indian Arithmetic Drills and The Unknown Secrets of the Indians. Newspapers carry reports of Indian children memorizing multiplication tables far beyond nine times nine, the standard for young elementary students in Japan. 

And Japans few Indian international schools are reporting a surge in applications from Japanese families.

At the Little Angels English Academy & International Kindergarten, the textbooks are from India, most of the teachers are South Asian, and classroom posters depict animals out of Indian tales. The kindergarten students even color maps of India in the green and saffron of its flag. 

Little Angels is located in this Tokyo suburb, where only one of its 45 students is Indian. Most are Japanese. 

Viewing another Asian country as a model in education, or almost anything else, would have been unheard-of just a few years ago, say education experts and historians. 

Much of Japan has long looked down on the rest of Asia, priding itself on being the regions most advanced nation. Indeed, Japan has dominated the continent for more than a century, first as an imperial power and more recently as the first Asian economy to achieve Western levels of economic development. 

But in the last few years, Japan has grown increasingly insecure, gripped by fear that it is being overshadowed by India and China, which are rapidly gaining in economic weight and sophistication. The government here has tried to preserve Japans technological lead and strengthen its military. But the Japanese have been forced to shed their traditional indifference to the region. 

Grudgingly, Japan is starting to respect its neighbors.

Until now, Japanese saw China and India as backwards and poor, said Yoshinori Murai, a professor of Asian cultures at Sophia University in Tokyo. As Japan loses confidence in itself, its attitudes toward Asia are changing. It has started seeing India and China as nations with something to offer.

Last month, a national cry of alarm greeted the announcement by the Organization for Economic Cooperation and Development that in a survey of math skills, Japan had fallen from first place in 2000 to 10th place, behind Taiwan, Hong Kong and South Korea. From second in science in 2000, Japan dropped to sixth place.

While China has stirred more concern here as a political and economic challenger, India has emerged as the country to beat in a more benign rivalry over education. In part, this reflects Chinas image in Japan as a cheap manufacturer and technological imitator. But Indias success in software development, Internet businesses and knowledge-intensive industries in which Japan has failed to make inroads has set off more than a tinge of envy.

Most annoying for many Japanese is that the aspects of Indian education they now praise are similar to those that once made Japan famous for its work ethic and discipline: learning more at an earlier age, an emphasis on memorization and cramming, and a focus on the basics, particularly in math and science. 

Indias more demanding education standards are apparent at the Little Angels Kindergarten, and are its main selling point. Its 2-year-old pupils are taught to count to 20, 3-year-olds are introduced to computers, and 5-year-olds learn to multiply, solve math word problems and write one-page essays in English, tasks most Japanese schools do not teach until at least second grade.

Indeed, Japans anxieties about its declining competitiveness echo the angst of another nation two decades ago, when Japan was the economic upstart.

Japans interest in learning from Indian education is a lot like Americas interest in learning from Japanese education, said Kaoru Okamoto, a professor specializing in education policy at the National Graduate Institute for Policy Studies in Tokyo.

As with many new things here, the interest in Indian-style education quickly became a fad.

Indian education is a frequent topic in forums like talk shows. Popular books claim to reveal the Indian secrets for multiplying and dividing multiple-digit numbers. Even Japans conservative education ministry has begun discussing Indian methods, said Jun Takai of the ministrys international affairs division.

Eager parents try to send their children to Japans roughly half dozen Indian schools, hoping for an edge on the competitive college entrance exams. 

In Tokyo, the two largest Indian schools, which teach kindergarten through junior high, mainly to Indian expatriates, received a sudden increase in inquiries from Japanese parents starting last year.

The Global Indian International School says that 20 of its some 200 students are now Japanese, with demand so high from Indian and Japanese parents that it is building a second campus in the neighboring city of Yokohama.

The other, the India International School in Japan, just expanded to 170 students last year, including 10 Japanese. It already has plans to expand again. 

Japanese parents have expressed very, very high interest in Indian schools, said Nirmal Jain, principal of the India International School.

The boom has had the side effect of making many Japanese a little more tolerant toward other Asians. 

The founder of the Little Angels school, Jeevarani Angelina  a former oil company executive from Chennai, India, who accompanied her husband, Saraph Chandar Rao Sanku, to Japan in 1990  said she initially had difficulty persuading landlords to rent space to an Indian woman to start a school. But now, the fact that she and three of her four full-time teachers are non-Japanese Asians is a selling point.

When I started, it was a first to have an English-language school taught by Asians, not Caucasians, she said, referring to the long presence here of American and European international schools. 

Unlike other Indian schools, Ms. Angelina said, Little Angels was intended primarily for Japanese children, to meet the need she had found when she sent her sons to Japanese kindergarten. 

I was lucky because I started when the Indian-education boom started, said Ms. Angelina, 50, who goes by the name Rani Sanku here because it is easier for Japanese to pronounce. (Sanku is her husbands family name.) 

Ms. Angelina has adapted the curriculum to Japan with more group activities, less memorization and no Indian history. Encouraged by the kindergartens success, she said, she plans to open an Indian-style elementary school this year.

Parents are enthusiastic about the schools rigorous standards.

My sons level is higher than those of other Japanese children the same age, said Eiko Kikutake, whose son Hayato, 5, attends Little Angels. Indian education is really amazing! This wouldnt have been possible at a Japanese kindergarten.


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## Bushroda

*India produces big companies, top executives* 
*Nation has largest steelmaker. Emigrants at helm of U.S. firms* 

By Ellen Simon 
Associated Press
Published by: Ohio.com 
Wednesday, Jan 02, 2008 

NEW YORK: The ascension of Indian-born leaders like Vikram Pandit, the new CEO of Citigroup Inc., tracks the economic rise of their home country, once seen by U.S. business as a large market and a source of low-cost technology workers, now viewed as a business power that rivals the U.S. in some industries. 

The change is visible on the board of the U.S.-India Business Council, once comprised only of executives from U.S. companies doing business in India. Now, the board includes executives from global companies with business in India, Indian-Americans heading global
businesses and Indian companies with interest in the U.S. 

Board members include Arun Kumar, head partner at KPMG International, Indra Nooyi, CEO of PepsiCo Inc. and Lakshmi Narayanan, vice chairman of Cognizant Technology Solutions, an outsourcing company that bills itself as ''the best of both worlds.'' 

ArcelorMittal has grown into the world's largest steelmaker, recently offering $1.65 billion for the remaining shares of Chinese steelmaker China Oriental Group Co. it doesn't already own. The company is based in the Netherlands, but its Indian CEO and founder, Lakshmi Mittal, controls nearly half its shares. 

India's outsourcing companies have grown to take on more valuable contracts, pitting them against U.S.-based giants such as IBM Corp. and Accenture Ltd. 

For instance, India's Tata Consultancy Services Ltd. in October announced a $1.2 billion contract from American market research firm Nielsen, the largest outsourcing order ever won by an Indian company and one that includes services from information technology infrastructure management to payroll processing. 

And India's Tata Group has expressed its interest in buying troubled Ford Motor Co.'s Jaguar and Land Rover units. 

''It's harder to see the borders now,'' said Gregory Kalbaugh, director and counsel of the U.S.-India Business Council. 

As the Indian economy has been on a tear, clocking 6 percent to 8 percent annual growth, Indian and U.S. political leaders have viewed business ties as a way to bring the countries closer. President George Bush and Prime Minister Manmohan Singh handpicked members of the US-India CEO Forum, launched in 2005, to plan increased partnership and cooperation. 

Meanwhile, U.S. businesses, increasingly dependent on foreign trade, have intensified their interest in promoting an international group of executives. Nearly half of sales for 238 of the largest U.S. companies was from outside the U.S. for fiscal year 2006, up from one-third of sales in fiscal 2001, according to Standard & Poor's. 

At the same time, Indians who came to the U.S. to study 30 years ago have worked their way up the ranks of American companies. The latest round of promotions includes Shantanu Narayen, who joined Adobe Systems Inc. in 1998 and was appointed CEO this month. 

Others have been in their jobs far longer, such as Ramani Ayer, chairman and CEO of Hartford Financial Services Group Inc., who has led the company since 1997. 

Some of the rising stars: 

&#8201;K.S. ''Sonny'' Kalsi, managing director and global head of Morgan Stanley's real estate investing business, which has $88.3 billion in assets under management; 

&#8201;Meena Mutyala, vice president of engineering and product management for Westinghouse Electric Corp.'s nuclear fuel business worldwide; 

&#8201;Sheila Hooda, senior managing director, strategy at $437 billion investment company TIAA-CREF, who was previously a managing director in the investment banking division at Credit Suisse. 

The rise of Indian-born executives such as Pandit, recently named CEO of Citigroup, the world's largest bank, follows by more than a decade the advances of Indian business consultants. 

A handful of Indian-born academics, especially Ram Charan and C.K. Prahalad, long ago established themselves at the upper echelons of business consulting; consultant and author Charan was reportedly the first outsider Jeffrey Immelt turned to for advice when he became CEO of General Electric Co. 

Rajat Gupta, who joined McKinsey & Co. in 1973, was elected managing director of the management consulting firm in 1994, then re-elected to two more three-year terms in 1997 and 2000. Gupta is leaving McKinsey at the end of this year to concentrate on his board positions. 

One of Gupta's latest gigs: special adviser on management reform to the secretary-general of the United Nations. 

NEW YORK: The ascension of Indian-born leaders like Vikram Pandit, the new CEO of Citigroup Inc., tracks the economic rise of their home country, once seen by U.S. business as a large market and a source of low-cost technology workers, now viewed as a business power that rivals the U.S. in some industries.

The change is visible on the board of the U.S.-India Business Council, once comprised only of executives from U.S. companies doing business in India. Now, the board includes executives from global companies with business in India, Indian-Americans heading global
businesses and Indian companies with interest in the U.S.

Board members include Arun Kumar, head partner at KPMG International, Indra Nooyi, CEO of PepsiCo Inc. and Lakshmi Narayanan, vice chairman of Cognizant Technology Solutions, an outsourcing company that bills itself as ''the best of both worlds.''

ArcelorMittal has grown into the world's largest steelmaker, recently offering $1.65 billion for the remaining shares of Chinese steelmaker China Oriental Group Co. it doesn't already own. The company is based in the Netherlands, but its Indian CEO and founder, Lakshmi Mittal, controls nearly half its shares.

India's outsourcing companies have grown to take on more valuable contracts, pitting them against U.S.-based giants such as IBM Corp. and Accenture Ltd.

For instance, India's Tata Consultancy Services Ltd. in October announced a $1.2 billion contract from American market research firm Nielsen, the largest outsourcing order ever won by an Indian company and one that includes services from information technology infrastructure management to payroll processing.

And India's Tata Group has expressed its interest in buying troubled Ford Motor Co.'s Jaguar and Land Rover units.

''It's harder to see the borders now,'' said Gregory Kalbaugh, director and counsel of the U.S.-India Business Council.

As the Indian economy has been on a tear, clocking 6 percent to 8 percent annual growth, Indian and U.S. political leaders have viewed business ties as a way to bring the countries closer. President George Bush and Prime Minister Manmohan Singh handpicked members of the US-India CEO Forum, launched in 2005, to plan increased partnership and cooperation.

Meanwhile, U.S. businesses, increasingly dependent on foreign trade, have intensified their interest in promoting an international group of executives. Nearly half of sales for 238 of the largest U.S. companies was from outside the U.S. for fiscal year 2006, up from one-third of sales in fiscal 2001, according to Standard & Poor's.

At the same time, Indians who came to the U.S. to study 30 years ago have worked their way up the ranks of American companies. The latest round of promotions includes Shantanu Narayen, who joined Adobe Systems Inc. in 1998 and was appointed CEO this month.

Others have been in their jobs far longer, such as Ramani Ayer, chairman and CEO of Hartford Financial Services Group Inc., who has led the company since 1997.

Some of the rising stars:

&#8201;K.S. ''Sonny'' Kalsi, managing director and global head of Morgan Stanley's real estate investing business, which has $88.3 billion in assets under management;

&#8201;Meena Mutyala, vice president of engineering and product management for Westinghouse Electric Corp.'s nuclear fuel business worldwide;

&#8201;Sheila Hooda, senior managing director, strategy at $437 billion investment company TIAA-CREF, who was previously a managing director in the investment banking division at Credit Suisse.

The rise of Indian-born executives such as Pandit, recently named CEO of Citigroup, the world's largest bank, follows by more than a decade the advances of Indian business consultants.

A handful of Indian-born academics, especially Ram Charan and C.K. Prahalad, long ago established themselves at the upper echelons of business consulting; consultant and author Charan was reportedly the first outsider Jeffrey Immelt turned to for advice when he became CEO of General Electric Co.

Rajat Gupta, who joined McKinsey & Co. in 1973, was elected managing director of the management consulting firm in 1994, then re-elected to two more three-year terms in 1997 and 2000. Gupta is leaving McKinsey at the end of this year to concentrate on his board positions.

One of Gupta's latest gigs: special adviser on management reform to the secretary-general of the United Nations.


----------



## Bushroda

*India mulls investing $10b in Iran* 
Press TV, Iran
Thu, 03 Jan 2008 04:03:16 

Indian and Iranian officials are to meet on Thursday in New Delhi to discuss development of one of the world's largest gas fields in Iran. 

India's biggest explorers, Oil and Natural Gas Corp (ONGC) and the Hinduja Group have teamed up to secure a possible $10 billion contract on development of Phase 12 of South Pars, one of the world's largest gas fields, and Azadegan, Iran's largest oil find in the past three decades, ONGC's Chairman R.S. Sharma said ahead of meeting with Iranian officials. 

Sharma termed as positive the first round of talks, saying, "We are proceeding cautiously but steadily. The areas have huge potential." 

"They (Iranians) are very interested. They are very satisfied with ONGC's competence, technical and financial capabilities and project execution," he stated. 

ONGC Videsh Ltd, the overseas arm of ONGC, and Ashok Leyland Project Services Ltd, a subsidiary of Hinduja Group, will sign an agreement with Iran. 

Energy-hungry India is keen on investing in Iran oil and gas sectors in a bid to fuel its booming economy. Iran holds the world's second-largest oil and gas reserves.


----------



## Bushroda

*India manufacturing PMI reaches 33-month high, at 61.9* 
Reliable Plant, UK

The seasonally adjusted ABN AMRO India Purchasing Managers Index (PMI) posted 61.9 in December, rising from 60.9 in the previous month, to signal a marked improvement in the health of the Indian manufacturing sector. Moreover, the index reading was the highest in the 33-month survey history.

Indian manufacturers signaled a sharp rise in production at their plants in December, which anecdotal evidence linked to favorable market conditions and a sharp rise in volumes of new work received.

The level of new business placed with Indian manufacturers rose further in December, bolstered by strong demand, especially in domestic markets. Total new order growth was the fastest in the survey history in December, while new business from abroad rose markedly.

Firms continued to add to their workforces in December, with the rate of employment growth accelerating to a 17-month high. Nevertheless, staffing levels rose only moderately. Backlogs of work rose for the ninth consecutive month in December, albeit only weakly.

Firms reported a further solid rise in their average costs in December, which they attributed to higher prices for a number of inputs (including metals and oil). Input price inflation was broadly unchanged from the previous month.

Average charge inflation slowed further from Octobers high in December, although firms retained a solid degree of pricing power. The increase in factory gate prices was linked to rising average costs and strong market demand.

Commenting on the latest survey findings, Gaurav Kapur, senior economist, ABN AMRO Bank N.V, said: The rapid improvement witnessed in the manufacturing sector activity since October continues and is gaining traction. With the PMI printing at 61.9 for December, the index has reached a new peak in its 33-month history and betters the previous high of 61.7, seen just two months ago. For the quarter ended December, the PMI averaged at 61.5, making this the best quarter in the history of the survey. The most encouraging sign from survey results is the rising levels of new incoming business. The manufacturing sector has seen robust demand growth from both local, as well as external sources, in this quarter. In fact, in December the new orders index printed at its highest level since April 2005. It was, however, local demand which pushed up the new orders index and the PMI to record levels. That is a reflection of a pick-up in domestic consumption, after witnessing some moderation due to higher interest rates in the previous quarter and also corresponds with higher bank credit off-take since October. 

Export orders index, on the other hand, after registering its highest reading in October has subsequently declined in November and December. Thus, while manufacturers continue to get new export orders, the pace of growth is falling. This could be due to a slowdown in the key export markets. In the quarter ended December, on the whole, external demand improved significantly over the previous quarters this year. And this came about in spite of rupee appreciation. 

Higher levels of new business have also pushed up the pace of overall output growth. The Output Index rose to 65.3 in December from 64.9 in November. Robust activity levels in the manufacturing sector also signal that overall momentum in the other parts of the economy is quite strong.


----------



## Bushroda

*Luxury living rises from the slums*
Ashling OConnor in Bombay
The Times, UK
January 2, 2008

A flagrant style of luxury living is springing up above Bombays densely populated slums for a select few prosperous enough to spend up to £5 million on a designer apartment. 

Developers are targeting bankers, textile manufacturers, retailers and IT entrepreneurs made rich by a surging economy to sell them their urban residential projects where sky gardens, whirlpool spas, high-speed personal lifts, fingerprint entry and Philippe Starck bathrooms are the norm. 

During the next two years at least 16 luxury developments will open across the country as a standard of living once limited in Asia to financial hubs such as Hong Kong and Singapore comes to India. 

The countrys most expensive flat, costing £5.3 million, can be found in Bombay. Demand for quality housing in the city far outstrips supply, and Bombay is the seventh most expensive place in the world to buy an apartment, according to the Global Property Guide, despite half the 18 million population living in slums without a lavatory or running water. Thousands of construction workers bustle around the foundations of Lodha Bellissimo, a 48-storey tower overlooking the race-course. Despite being nine months from completion, nearly all the 300 homes have been sold. Abhisheck Lodha, the developer, said: Its important for people to feel exclusive. Their address is a status symbol in their social circles. Where you live defines who you are. 

Ranging from £630,000 for a three-bedroom flat to £2.5 million for a penthouse, the apartments have sun-decks, Italian marble floors, motion-sensor lighting, Poggenpohl kitchens and air conditioning that can be remotely controlled by mobile phone. The building further boasts a cricket pitch, valet parking, library, business centre, yoga pavilion, banquet hall and 18,000 sq metres of gardens. 

The amenities and open space are unique to Bombay, said Vijay Chandok, 39, a banker who has bought a flat in the complex. There is a clear aspiration for such properties and that is only going to increase. As Indias economy has grown at an average of 8 per cent during the past five years, so too has the pool of people able to afford a Western standard of designer living. There is not an expat in sight. 

Piyush Pandey, executive chairman of Ogilvy & Mather in India, has bought a three-bedroom flat in Bellissimo for himself, his wife and their dogs. The whole infrastructure takes you one level up in your quality of living. Its about comfortable living with like-minded people, he said. 

By far the most extravagant residence in postindependence times is being built by Mukesh Ambani, chairman of Reliance Industries and Indias richest man, who is spending $1 billion (£503 million) recreating the mythical island of Antilia in downtown Bombay. The 27-storey glass-fronted skyscraper will include three helipads, a ballroom, a 50-seat mini-theatre and four floors of gardens. It is expected to be ready in September. 

*Desirable residences*

 84,000 homes are needed in Bombay each year; only 55,000 are provided 

 India is the only country where house prices have risen by more than in the US 

 Flats in south Bombay cost about three times their equivalent in Shanghai 

 The worlds most expensive flats, at £84 million each, are being built overlooking Hyde Park in London


----------



## Neo

*India to provide subsidy for solar power plants ​* 
Thursday, January 03, 2008

NEW DELHI: India will subsidise the running of solar power plants to help develop a renewable energy infrastructure, where high costs can be prohibitive, the minister for renewable energy said on Wednesday.

Renewable energy accounts for about 7.5 percent of Indias installed generation capacity of 127,673MW, a rate that compares favourably with much of the rest of the world. Much of this capacity is wind based, and the share of solar power is small.

My ministry will provide financial assistance amounting to 12 rupees per kilowatt hour in case of solar photovoltaic and 10 rupees per kilowatt hour in case of solar thermal power fed to the electricity grid, Vilas Muttemwar said at a press conference.

The private sector is expected to invest about 10 billion rupees in solar plants eligible for aid under the scheme during the five years to 2012, Muttemwar said. A maximum capacity of 10 megawatt (MW) in each of the countrys states and a maximum of five MW per developer will be considered under the scheme. Capital investors will not be allowed to apply, a statement from the ministry said.

Developers will sell electricity to state-run utilities and the incentives will be paid to them based on the tariff the utilities provide, the statement said. The incentives, for a period of 10 years, will be over and above any financial assistance provided by the states, said V Subramanian, secretary to the ministry. 

India to provide subsidy for solar power plants


----------



## Bushroda

*Tata Pulls Ford Units Into Its Orbit* 
By HEATHER TIMMONS
New York Times
January 4, 2008

LONDON  When Ratan Tata visited the home of the designer Ralph Lauren last autumn, the two auto enthusiasts spent much of the time in the garage, admiring Mr. Laurens car collection, including the Batmobile-esque 1955 Jaguar XKD. 

Now Mr. Tata is poised to take over Jaguar. 

Tata Motors said Thursday that it was beginning detailed talks with the Ford Motor Company about buying the Jaguar and Land Rover brands, confirming what investors and analysts in India, Detroit and Britain have anticipated for months. Tata said it intended to reach an agreement over the next few weeks. 

For Mr. Tata, who is 70, the takeover will cap 16 years of transforming one of the worlds most diverse and unusual conglomerates, the Tata Group. Through 98 companies, Tata creates and sells products ranging from steel to tea to watches, making the companys name ubiquitous in India. Under Mr. Tata, the name has started to reverberate around the globe as well. 

A string of international deals has diversified Tata to the point where more than half its revenue this year will come from outside India. Tatas increasingly global outlook is also bolstering the overseas ambitions of other Indian companies. 

Going overseas was necessary, Mr. Tata said. In the late 1990s, the groups truck unit recorded a loss that was the biggest in Indian history, he said in a recent interview in Tatas headquarters in the leafy, historical Colaba district of Mumbai. We were so dependent on one economy, he said. I decided we needed a broader view. 

Since then, Tata has done dozens of deals, buying businesses as diverse as the Tyco Global Network; Daewoo Commercial Vehicles; the Moroccan chemical company Imacid; Tetley Teas; and, most audaciously, the $11.3 billion takeover of the British steel maker Corus last year, a company several times the size of Tata Steel. The groups 27 listed companies have a market cap of over $70 billion, and the group reported after-tax profit of $2.8 billion in the last fiscal year  a 33 percent increase from the year before, in part because of the Corus acquisition. 

The latter deal garnered Mr. Tata some rare criticism, with analysts wondering if he had taken on too much. Corus came to us, we didnt seek them out, Mr. Tata said, and it was a deal he could not pass up. In one swoop we were in Europe, where we werent before, he said. That opportunity was going to happen once, and it was not going to happen again. 

The Tata Group is an unusual corporate enterprise. Started in 1868 by Jamsetji Tata, one of Indias dwindling group of Parsis, the group has often seemed to value employees as much as profits (paying laid-off Tata Steel employees for the rest of their lives when the company made cuts, for example), and has prided itself on fair practices, rather than cut-throat maneuvering or paying bribes, a practice still prevalent in some of corporate India.

Indeed, Mr. Tata seems the most unlikely of corporate titans  almost preternaturally humble, unabashedly open about the companys mistakes and about the fact that he never really wanted to be an industrialist. He studied architecture at Cornell University. After decades of working for the family business, he says he is considering opening a small architecture firm when he retires. 

He is a distant relative of the founder  his father was adopted by the wife of one of Jamsetjis sons. Never married, he lavishes attention on his dogs, writes thank-you notes to employees who do him favors, and is often spied on Sundays driving alone on Marine Drive in Mumbai in one of the several cars he owns. 

None of us observers of the Tatas could have predicted that he would grow and blossom the way he has and be in total charge of the company the way he has, said R. M. Lala, the author of several books about the family and companies, and a onetime director of the Tata Trust, a charity that finances health care and education projects in India. Other executives and companies may have made more money in India, Mr. Lala said, but Tata is still the most respected name in Indian industry.

As company chairman, Mr. Tata has been instrumental in carrying on the family legacy, and turning what was a loosely aligned group of companies that shared one name into a group with seven business lines and centralized management. 

It is a business plan Mr. Tata developed in the most unlikely of settings  he spent three months at his mothers bedside at Memorial Sloan-Kettering Cancer Center in Manhattan in 1981. At the time he was chairman of Tata Industries, then a small part of the group responsible for new ventures. When he was named chairman in 1991, he started reining in some of the companys independently minded managers and giving the parent company sizable equity stakes in its offspring.

The process was not easy, Mr. Tata wrote with typical candor in a 2003 epilogue to The Creation of Wealth, a book about the Tatas. 

If I reflect on what these 10 years have been for me personally, they have been a mixed bag, he wrote. There is some satisfaction that Ive seen the group come together in many ways, he wrote, but at the same time there is a sense of frustration at the resistance to change from many of my colleagues that I have seen through this period of time. All in all, he wrote, it has been a hard and sometimes unrewarding experience.

Outsiders do not see it that way, though. The Tata family has been all about building businesses and being far-sighted about it, said Tarun Jotwani, the chief executive of Lehman Brothers in India. What Mr. Tata has done very well is be the strategic and ethical head, while providing a culture of integrity, Mr. Jotwani said.

Mr. Tatas reign may come to an end soon  he says he is considering retiring after one of his pet projects, the $2,500 Peoples Car, hits showrooms this year. Mr. Tata has no heirs, and there is no likely family member to take over his role, meaning the man who brought the Tata Group to the rest of the world may be the last Tata to run the company.


----------



## Neo

*Reliance Power to raise up to $2.9 billion​*
MUMBAI: Reliance Power, a unit of Reliance Energy, plans to raise up to $2.9 billion in what would be Indias biggest public offering, investment bankers said Friday.

The previous highest initial public offer (IPO) was by property giant DLF which raised 2.24 billion dollars last July.

Reliance Power will offer 260 million shares through the IPO or 10.1% of the companys capital.

Reliance Power aims to raise between 105 billion and 115 billion rupees ($2.6 to $2.9 billion) through the offering, which will open for subscription on Jan 15, investment bankers said. The shares will be offered in the 405 to 450 rupees price band, they said.

Shares of Reliance Energy, Indias second largest utility by market capitalisation, have surged more than 32% to 2,510.3 rupees in the past month ahead of the IPO from its Reliance Power subsidiary.

The company has said the issue proceeds will be used to fund construction and development costs of various power projects of its subsidiaries. 

Reliance Energy grew out of a split two years ago in the Reliance group that was sparked by a family feud. afp
Daily Times - Leading News Resource of Pakistan


----------



## Neo

*China gains as Indian rupee strengthens ​* 
Sunday, January 06, 2008

KOLKATA: Indian exporters negotiating for a rise in product pricing following the strengthening of the rupee have had little luck with overseas buyers, who were now turning to Chinese suppliers for their supply, the Business standard newspaper reported the other day.

According to the findings of a national survey on issues plaguing Indian engineering exporters, conducted by the Engineering Export Promotion Council, 90 per cent of exporters who demanded a price hike from overseas buyers had their request rejected. 

The main reason was the emergence of China as the alternative supplier for Indian engineering products globally.

In the survey, 58 per cent of respondents stated that they lost out to Chinese competitors on account of rupee appreciation.

Approximately 76 per cent of the respondents belonged to the ordinary category of EEPC members, with exports of over Rs60lakh per annum. The balance 24 per cent were associate members, with annual exports less than Rs60 lakh. A total of 13 questions were asked. 

USA remained the most important single export market for firms which responded to the survey. The appreciation of the rupee against the dollar affected them considerably.

Half of the respondents shifted focus from exports to domestic market sales. In all, 19 per cent of respondents believed that the rupee appreciation would lead to decline in exports of products in the current fiscal. 

As many as 81 per cent warned that the export growth rate in value terms would drop in the current year. 

Also, 22 per cent said that the growth rate could fall by over a quarter. In fact, 59 per cent said exports growth could fall to 10-25 per cent this fiscal.

The survey revealed that firms were using a combination of measures like internal cost control and investment in new technology to combat the problem and stay afloat. 

There was a shift to a more capital intensive and labour saving manufacturing process in the small and medium scale sector. This meant significant downsizing in labour force on account of rupee appreciation

The percentage of reduction in labour force was still less than 10 per cent in most cases as many exporters were still fulfilling long-term contracts and enjoying good domestic market sales.

China gains as Indian rupee strengthens


----------



## Neo

* Indias largest IPO offering next week ​* 
Sunday, January 06, 2008

NEW DELHI: Indias Reliance ainitial public offering of shares next week in what could be the countrys largest listing yet, the company said.

Reliance Power is a subsidiary of Reliance Energy Ltd. and a part of the Anil Dhirubhai Ambani Group, a business conglomerate with interests spanning telecommunications, finance and entertainment.

The planned sale of 260 million shares is expected to raise nearly US$3 billion (euro 2.5 billion), with shares offered in a price band of 405 rupees to 450 rupees, company chairman Anil Ambani told a news conference in Mumbai on Friday.

The sale would, if it meets expectations, make it Indias largest initial public offer, or IPO, of shares.

Indias booming economy has seen several billion-dollar plus IPOs recently. Real estate company DLF Ltd. raised nearly US$2.3 billion (euro 1.65 billion) in June last year, while Britains Cairn Energy listed its Indian subsidiary on local stock exchanges last December, raising 58 billion rupees (US$1.4 billion) in Dec. 2006.

According to Forbes Asia Magazine, Mittals net worth totalled US$51 billion as on Nov. 2, while that of the Ambani brothers stood at US$49 billion and US$45 billion respectively.

The company wants to invest the money raised in the IPO in gas, coal and hydroelectric power generation projects in various parts of the country, Ambani said.

Indias largest IPO offering next week


----------



## Neo

*Indias touted job welfare scheme struggling: report ​* 
Tuesday, January 08, 2008

NEW DELHI: Just three per cent of households signing up to a multi-billion-dollar Indian welfare drive promising 100 days of work to every rural family actually got such jobs, a report said on Monday.

Indias ruling Congress party had billed the drive as a landmark in its battle against poverty, but only 3.2 per cent of registered households had received employment for 100 days, the Indian Express newspaper said.

Most of those who signed up for the anti-poverty National Rural Employment Guarantee Scheme were employed for just over two weeks, the report said. The data came from a six-month internal audit of the programme, which was launched by the ruling Congress Party in 2006, the report said.

The audit cited widespread examples of corruption, inefficiency and misuse of funds for the poor performance of the programme. In one state, payments were made to deceased beneficiaries while another state claimed it had employed 600,000 people in an area with only 70,000 households.

The aim of the scheme was to employ one member of every rural household in areas such as water conservation, irrigation, flood prevention and road construction. Investment firm JP Morgan in a research report estimated the programme would cost India at least nine billion dollars. The Indian Express report put the plans current cost at about three billion dollars.

Prime Minister Manmohan Singh launched the plan in 2006, saying its aim was to remove poverty from the face of our nation, but there was no immediate comment from the government on the newspaper report. 

Indias touted job welfare scheme struggling: report


----------



## Neo

*French compressed air car set for take-off in India ​* 
Tuesday, January 08, 2008

CARROS, France: A car that runs on air? What seemed like a pipe dream may soon become a reality as Frenchman Guy Negre hopes versions of his compressed air car will be produced in India this year by Tata Motors Ltd after a 15 year quest for backers for his invention.

Negre believes the time is right for his design with oil prices at record highs and pressure on carmakers to improve the fuel efficiency of their vehicles. It is clear that with oil at $100 a barrel this will force people to change their use of fuel and pollute less, Negre told Reuters in an interview at his firm Motor Development International (MDI), based near Nice in the south of France.

My car is zero pollution in town and almost no pollution on the highways, he added, saying the vehicle could travel 100 kilometres at a cost of one euro in fuel. The former Formula One motor racing engineers invention depends on pressurised air to move the pistons, which in turn help to compress the air again in a reservoir. The engine also has an electric motor, which needs to be periodically recharged, to top up the air pressure. 

French compressed air car set for take-off in India


----------



## Neo

* India sees stable wheat output, rapeseed fall ​* 
Tuesday, January 08, 2008

NEW DELHI: India will produce 75 million tonnes of wheat in 2008 if temperatures are favourable in the run up to the start of the harvest in March, but rapeseed output may drop on lower acreage, a top farm official said on Monday.

Traders and analysts say wheat production at that level would trim the need for costly imports, helping global prices stabilise amid stretched supplies. But a fall in rapeseed production in the worlds second-biggest vegetable oil importer after China may lead to higher edible oil purchases and a spike in international prices.

We will be able to achieve the expected production level of wheat but this will be subject to the temperatures in February and March, Farm Secretary P K Mishra told Reuters in an interview. 

India sees stable wheat output, rapeseed fall


----------



## Neo

*After difficult year, Indian IT braces for US slowdown​*
BANGALORE: After weathering a tough 2007, Indias flagship IT companies face the spectre of a US economic slowdown squeezing profits as they start unveiling earnings this week, analysts say.

Software firms such as Tata Consultancy, Infosys and Wipro were last year roiled by the rupees steepest appreciation against the dollar in three decades, surging wages and real-estate values and the end of a tax holiday.

Now come possible cutbacks in the information-technology budgets of US clients preparing to tighten their belts as a housing slump, tighter credit and high energy costs take their toll on the worlds biggest economy.

The negative view is that US corporate budget growth will slow and we wont see as much demand for outsourcing and offshoring as we saw last year, said Suveer Chainani, technology analyst at Macquarie Capital Securities in Mumbai.

Most peoples perception is drastically negative.

Clues to the extent of the fallout may surface when Infosys, a Bangalore-based pioneer of the software industry, kicks off the corporate earnings season on Friday by announcing its fiscal third-quarter results.

Investors hammered the shares of IT companies last year as the bad news kept piling up. IT stocks trailed the benchmark Sensex by more than 40 percent in 2007 and analysts see no relief in 2008.

The rising risk of an IT spending slowdown raises the hurdles on a 12-month view and we remain underweight Indian tech, investment house CLSA said in report.

Barring periodic deviations, we see absolute long-term annual stock returns of 10 to 12 percent, down from the heady 30 to 40 percent of the past, CLSA analysts Bhavtosh Vajpayee and Nimish Joshi said in the report.

Sentiment remains negative although IT firms have remained profitable. TCS, Indias biggest software services exporter, reported a second-quarter net profit jump of nearly 23 percent to 12.51 billion rupees ($318 million).

Infosys saw its profit in the quarter ended September 30 rise 18.4 percent to 11 billion rupees. Wipros profit climbed 18 percent to 8.237 billion rupees.

The United States is the biggest market for Indian software and service exports, which jumped 33 percent to $31.4 billion in the year, ended March and are forecast by the industry grouping Nasscom to reach $60 billion by 2010.

The industry has been at the forefront of Indias strong economic growth, benefiting from work farmed out by cost-cutting global companies to take advantage of Indias vast engineering talent pool and low labour costs.

But last year took the sheen off the sector as it reeled from a 12 percent rise in the value of the rupee against the dollar, an 18 percent jump in wages and increasing rental costs and real-estate valuations.

The government also last year extended a 13.3 percent tax to export earnings. The tax previously only applied to local profits.

The rupees rise caused the biggest hit, reducing the local equivalent of every dollar earned by an industry whose expenses are almost all incurred in rupees.

The rupee is the biggest issue because currency movements are not in the hands of the industry, said Tejas Doshi, analyst at Sushil Finance.

According to Hiten Shah, an analyst at Angel Broking, every percentage point rise in the rupee shaves 30 to 50 basis points off the profit margin of Indian IT companies. In October, Infosys predicted the currencys gain would wipe 20 billion rupees off revenue and 2.5 billion rupees off profit in the financial year to March 31.

Higher fees and business expansion as clientele grew helped make up for the currency losses, but a US slowdown may force US corporations to curtail spending and investment, including IT outsourcing budgets.

There will be some ups and downs, said Kiran Karnik, who heads industry body Nasscom. But I get a sense the US has overcome the worst of its problems and will get back on track soon.

And the exchange rate will be reasonably steady  were not going to see the 12 percent rise we saw (last year) in the rupee, said Karnik.

In the long run, Indian IT firms could benefit from a US slowdown as clients farm out more computer services work to low-cost locations, said Chainani at Macquarie Capital.

When youre in troubled times, you fly budget carriers instead of business class in a top airline, he said. Instead of building in-house IT capabilities and local sub-contracting, theyll look more at offshoring and outsourcing to India. afp

Daily Times - Leading News Resource of Pakistan


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## Neo

*Tata Motors 1 lakh car to be launched tomorrow ​* 
Wednesday, January 09, 2008

MUMBAI: Only 10 years ago, Tata Motors Ltd unveiled its first car, a hatchback, that established the truck makers credentials as a car-maker.

On Thursday, the $7.8 billion company unveils its boldest initiative yet, a car that will sell for just $2,500, less than half the cheapest car on the market. Dubbed the Peoples Car, it will determine Tatas place in the global automotive arena, where the battle is increasingly being fought in emerging economies such as India, China and Russia.

The new model, using re-engineered plastics and modern adhesives, is a far cry from the premium Jaguar and Land Rover bands Tata is negotiating to acquire from Ford Motor Co. Tata Motors drive to produce a cheap, no-nonsense, small car was born from close observation of a local market where millions often ferry families of four, plus baggage, on motorbikes and scooters.

Critics initially derided Tatas 100,000 rupee, or 1 lakh, price target, more so as oil and steel prices rocketed. But global car makers have taken note and are scurrying for their own versions to meet growing environmental and cost concerns. 

Tata Motors 1 lakh car to be launched tomorrow


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## Logic note

India pips China to take top slot in Asia PE race- Finance-Banking/ Finance -News By Industry-News-The Economic Times



> India pips China to take top slot in Asia PE race
> 11 Jan, 2008, 1906 hrs IST,Thanuja B M , TNN
> 
> Print
> 
> 
> Save
> 
> 
> EMail
> 
> 
> Write to Editor
> BANGALORE: In a year which saw private equity (PE) investments in Asia decline by 21&#37; to $42.4 billion, the Elephant has pipped the Dragon to pole position. For the first time, India stood first on the Asian PE chart in terms of deal value aggregate, garnering $9.9 billion in PE investments from 290 deals in 2007. China was second with $9.5 billion, followed by Taiwan with $5.8 billion.
> 
> In Asia (including Japan), India has been fourth in investment volume for the 2004-2006 period when the country has seen huge strides in this segment. Incidentally , Japan which has been the numero uno since 2003, except for last year when Australia topped the charts, dropped to sixth place with $3.2 billion, according to Centre for Asia Private Equity Research data.
> 
> However, it must be mentioned here that Indian PE trackers have pegged the total investment into India in 2007 at a much higher figure &#8212; about $14 billion across 390 deals. Says Centre for Asia Private Equity Research MD Kathleen Ng, &#8220;For the first time in 2007, India led all other markets in recording the largest deal value aggregate as well as the number of deals, boasting $9.9 billion and 290 deals respectively. These two figures represent 23.5% and 42% of the overall deal value and number, respectively.&#8221;
> 
> She adds that foreign investors&#8217; level of confidence in India was reflected in the first $1-billion deal for the first time while no deals in China reached seven digits in dollar terms during 2007. This landmark transaction led by Temasek Holdings, Investment Corporation of Dubai, Goldman Sachs, Citigroup and Australia&#8217;s Macquarie Bank was with Bharti Infratel, an infrastructure services provider and subsidiary of Bharti Airtel.
> 
> In 2007, the Asian PE industry (including Australia and New Zealand) saw an additional $36.4 billion of fresh capital into the market. China led in recording the largest pool of new capital, at $6.9 billion, followed by India, which garnered $5.3 billion of fresh capital. For the first time, both China and India recorded their respective billion dollar fund.
> 
> However, PE investors encountered setbacks in deal making, as the 2007 deal value aggregate declined by 21% to $42.4 billion. Some 691 deals have been completed , an increase of 17.3% from 2006. The region saw deal value aggregate of $53.2 billion in 2006. But the industry witnessed a new high in divestment activities, with $17.3 billion of realised capital returned to investors&#8217; coffers during the year. Realised capital from China and India accounted for $3.8 billion and $2.24 billion, respectively.
> 
> INDIA $9.9b
> 
> For the first time, India stood first in terms of deal value aggregate, garnering $9.9 billion in PE investments from 290 deals in 2007
> 
> CHINA $9.5b
> 
> However, Indian PE trackers have pegged investment into India in 2007 at a much higher figure -- about $14 billion across 390 deals
> 
> TAIWAN $5.8b
> 
> Foreign investors&#8217; level of confidence is reflected in $1b deal for first time in India. No deal in China reached seven digits in dollar terms in &#8217;07
> 
> AUSTRALIA $5.7b
> 
> In 2007, the Asian PE industry (including Oz & New Zealand) saw an additional $36.4 billion of fresh capital into


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## solid snake

*Indian industrial growth slows sharply*​
NEW DELHI, Jan 11: Indias industrial output growth slowed to its lowest level in 13 months in November, according to data on Friday, but analysts forecast no swift cut in interest rates to spur the economy.

Industrial production in Asias third-largest economy expanded by 5.3 per cent, down from 12 per cent in October and 15.4 per cent in November 2006, the official figures showed.

The slowdown in mining, manufacturing and other industrial output surprised analysts who had forecast growth of more than seven per cent and was attributed mainly to aggressive monetary tightening to tame inflation.

Overall, the message is clear and that is the industrial sector is slowing, said HSBC economist Robert Prior-Wandesforde.

The data came after Premier Manmohan Singh set up a committee this week to map a plan for reviving industrial growth, which accounts for a fifth of GDP and has shown a steady decline in the current fiscal year to March 31, 2008.

Nine interest rate hikes since 2004 and steps by the central bank to force commercial lenders to put aside more reserve funds to brake lending growth have dampened industrial expansion -- slowing demand for consumer goods.

The economy grew by 9.4 per cent last year, sparking fears of overheating.

But economists said they expected no early easing of interest rates, even as other data Friday showed annual inflation remaining steady at 3.5 per cent.

The central bank may hold interest rates for some time due to concerns over rising international crude oil and food prices, HDFC chief economist Abheek Baruah said.

Inflation has fluctuated recently but has stayed well below the central banks five percent ceiling for this year and is down sharply from 5.89 per cent a year earlier.

However, the bank fears record global oil prices could trigger a rise in state-set domestic fuel prices to cut losses at state-run refiners and is concerned about strong world commodity prices.

With industrial production slowing, low inflation and upward pressure still on the rupee that is trading near decade highs against the dollar, clamour from industry for a rate cut would mount, analysts forecast.AFP

Indian industrial growth slows sharply -DAWN - Business; January 12, 2008


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## Neo

*Israels pharma major to invest in India ​* 
Saturday, January 12, 2008

MUMBAI: Israels Teva Pharmaceutical Industries, the worlds largest manufacturer of copycat patented drugs (generics), plans to invest over $1 billion in India to acquire Indian drug companies and set up greenfield manufacturing facilities, the Business Standard newspaper reported on Thursday. 

The investment is planned for the next 24 months. Around $250-$300 million will be utilised for manufacturing facilities and the rest to fund acquisitions in India. A few weeks ago, Teva had acquired over 100 acres of land near Gwalior, Madhya Pradesh, to set up active pharmaceutical ingredient manufacturing facilities that will match the production capacity of domestic generic majors such as Ranbaxy, Cipla, Dr Reddys, Sun Pharma and Wockhardt, sources told the Business Standard.

The sources said Teva would start civil works at the site after it obtains necessary government clearances. Teva considers India an interesting geographical region and is looking to broaden its activities in the country, Shir Altay, a company spokesperson said in an e-mail.

Teva is also likely to integrate Regent Drugs, which it acquired from JK Industries in 2003, with its API business. Regent Drugs, now a 100 per cent subsidiary of Teva, manufactures some APIs that Teva requires for its global business. The company also sources APIs from many Indian companies.

Israels pharma major to invest in India


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## Bushroda

*The boom in India now heard overseas*
*Foreigners sell to the new middle class and help build infrastructure, while domestic giants take a global view.*

Cherian Thomas, 
Los Angeles Times, US
January 14, 2008

Gordon Brown's plane will have barely departed New Delhi's Indira Gandhi International Airport this month before Nicolas Sarkozy arrives with another contingent of executives seeking opportunities in India's rapidly opening markets.

The British prime minister and the French president, separately visiting next week, are bringing along commercial delegations, including retailers Tesco and Carrefour, attracted by a burgeoning middle class and loosening curbs on foreign ownership in the nation of 1.1 billion people.

Foreign investment in India may double in 2008 for the second straight year to reach $30 billion, the government forecasts, as the world's second-fastest-growing major economy arrives at what Lehman Bros. calls its takeoff point. That's when consumer demand and business spending start feeding off each other and drive even more investment.

"India's growth acceleration is not a flash in the pan," said Robert Subbaraman, chief economist at Lehman Asia in Hong Kong. "A middle class is fast emerging, which is spurring demand as consumption and investment interact."

Like China and South Korea previously, India is benefiting from an increasingly open economy that has already stimulated enough growth to double per-capita income since 2000, according to Lehman.

The resulting surge in demand for consumer goods has tripled mobile-phone use in two years and fueled a 29% jump in sales of microwave ovens last year.

With the explosion of purchasing power, India's economy is poised to expand at a 9% pace for the third straight year, while the U.S., Europe and Japan slow to less than 3%.

McKinsey & Co., the consulting firm, estimates that India's middle class -- comprising those with annual disposable incomes of $4,380 to $21,890 in current dollars -- will increase more than tenfold to 583 million by 2025.

India's appeal is more than a matter of demographics. Prime Minister Manmohan Singh, who as finance minister in 1991 started dismantling barriers to foreign investment and other controls on industry, is preparing to permit overseas companies to build retail chains in the country.

That's prompting interest from companies including Tesco, Britain's largest retailer, and Paris-based Carrefour, which operates supermarkets on four continents.

Singh's government is also moving to raise the limit on foreign equity stakes in local insurers to 49% from 26% and has a road map to let foreign banks increase their holdings in India's private banks.

Brown's party will include representatives of Prudential, Britain's second-biggest insurer, and Barclays, the No. 3 bank, both based in London.

"India has long been noted for its superb 'micro' -- good companies, rule of law, democracy," said Stephen Roach, chairman of Morgan Stanley in Asia. "What has been missing is the 'macro' -- foreign direct investments, infrastructure. What's encouraging to me about India now is that the macro is starting to improve and is reinforcing the already positive micro."

Foreign ownership in telecommunications has helped India become the world's third-largest user of telecom services after China and the U.S. It's the world's fastest-growing wireless market.

"India is a country of enormous opportunity. It's the heart of globalization, in a way," said Ben Verwaayen, chief executive of London-based BT Group, Britain's largest phone company. "You see a growing base for companies from around the globe, being here not just for this region itself, but being here as a kind of base for what they can do in other parts of the world as well."

San Jose-based Cisco Systems Inc., the world's largest maker of computer-networking equipment, plans to triple its Indian workforce to 10,000 by 2010, CEO John Chambers said in October.

Automakers including General Motors Corp. and Suzuki Motor Corp. are spending more than $6.6 billion to build factories in the country. PricewaterhouseCoopers said India's vehicle output will grow about 17% annually until 2011, the fastest among the 20 largest car-making nations.

India's higher profile in the global economy makes it a magnet for foreign investment and gives its companies a bigger role on the world stage.

Indian companies led by Tata Steel and Hindalco Industries, both based in Mumbai, completed a record $39.2 billion of overseas acquisitions in 2007.

Tata's $12.9-billion purchase of Britain's Corus Group, the biggest overseas takeover by an Indian company, made it the world's fifth-biggest steelmaker. Buying Novelis Inc. of Atlanta provided Hindalco, India's biggest aluminum producer, access to customers such as GM and Coca-Cola Co.

The trend is continuing. Tata Motors of Mumbai, India's largest truck maker, was recently selected as the preferred bidder for Ford Motor Co.'s Jaguar and Land Rover units, the U.S. automaker announced.

Brown and Sarkozy are joining a parade of world leaders coming to India with agendas that include closer commercial ties. U.S. Treasury Secretary Henry M. Paulson Jr., visiting in October, said U.S. companies would participate in India's $500-billion program to modernize roads, ports and other infrastructure by 2012. The U.S. will help India transform its financial capital, Mumbai, the former Bombay, into an international financial center, he said.

During an August visit, then-Prime Minister Shinzo Abe of Japan said his nation would help plan a $90-billion infrastructure corridor between New Delhi and Mumbai, including freight lines and power stations.

Such projects may reduce one of the biggest remaining impediments to doing business in India -- poor infrastructure. For all the expansion in the Indian market, its foreign direct investment still pales in comparison to what China has received.

It takes 24 days for Indian exports to reach the U.S., compared with only 15 days from China and 12 from Hong Kong, according to Lehman Bros.

"If India doesn't get its act together on infrastructure urgently, then it can never realize its aim of accelerating growth," said Vineet Agarwal, executive director of Gurgaon-based Transport Corp. of India, the nation's biggest cargo transportation and logistics company.

Even as India's economy reaches takeoff speed, almost 300 million people continue to live on less than $1 a day, according to the World Bank.

The number of poor people in India fell from 1999 to 2004 for the first time, after the government's policies to boost foreign investment and reduce regulation on industry spurred growth, according to the Organization for Economic Cooperation and Development.

"The Chinese takeoff began in the 1980s and didn't show through in terms of increased living standards for the majority for quite some time," said Howard Davies, director of the London School of Economics and a former chairman of Britain's Financial Services Authority. "Just the same way, India has got the economic takeoff, but it needs to be sustained for a decade before you really see the place looking different."


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## Bushroda

*China and India are heading for the top of the world but along the way the climb will become treacherous*
*Their runaway growth stories will take some unwanted twists, but the moral for the rest of us remains how we can learn to raise our own game*

By Hamish McRae
Independent, UK
13 January 2008

Thanks to the Olympics, this is the year of China, but the week arguably belonged to India, with the launch of the Tata "one lakh car". Yet this  and the environmental issue raised by India moving to mass motoring pushes it to the forefront  does make one wonder about the sustainability of the great run of growth in both China and India. We know there will be bumps ahead for both countries  events that for a while derail their expansions  but what we cannot know is their timing or their scale.

Thinking about this, it seemed this would be a good time to revisit the the modelling work done by Goldman Sachs on the likely growth of Brazil, Russia, India and China  the "Brics". We have become so mesmerised by the growth of China and India that we find it quite hard to accept things might go wrong. Intellectually we can accept it but in immediate practical terms we can't see how it might happen. (In Russia and Brazil the story is a little different and the potential bumps are easier to envisage.)

The view that double-digit or near double-digit growth is normal has been reinforced by events. Since the original Bric report, both China and India have actually grown faster than initially projected, leading to modifications in the data. In the later versions, China passes the US to become the world's largest economy in the 2030s rather than the 2040s. You can see the projections for 2050 in the chart: China way ahead of the US and India snapping at its heels.

If that were indeed to happen, the world would feel utterly different from today  as different as the present world feels from the colonial era of a century ago. You might say 2050 is a long way off but even the 2025 projections show China's economy close to that of the US in size, and 17 years in the future is the same distance forward as John Major's premiership is in the past.

These are projections; they are not forecasts. But they are very useful in that they give us a yardstick against which we can calibrate our own judgements. We are forced to give specific reasons why this sort of general outcome might not happen.

The most obvious one is the environment. Put simply, are there enough energy resources and raw materials in the world to support a Chinese economy that is bigger than the US, allowing too for further US growth, and an Indian economy that is not far behind? There are other subsidiary questions. For example, is China following a more dangerous path than India? That India should be developing a genuine economy car, bridging the gap between the present mini-car and the motorcycle, could be taken to suggest it will follow a more sustainable route than China, where large and medium-sized cars dominate.

The starting point for any analysis is that the price mechanism is a powerful force for change. Take the use of oil. If the price stays close to or above $100 a barrel, that will force the whole world, not just China and India, to find ways of economising on its use. Where there are substitutes, these will be employed instead. Where there are not, for example in aviation, the world will adapt to the higher prices by travelling less. The legitimate criticism of China seems to be that it has gone for an old industrial model, with very heavy investment in infrastructure, rather than seeking to build a more lightweight economy. It has done that partly because of a lack of imagination but also because it has priced energy too low. India has chosen a different path and under-invested in infrastructure  an error it now has to correct. But ultimately its economic system may prove more durable.

The next point seems to me to concern education. On paper China has done better than India in that it has higher literacy rates and literacy is the key to economic development. However, Chinese education has flaws, particularly in the way it teaches people to pass exams rather than be creative. To oversimplify grossly, India has a grave problem now at primary and early secondary level, whereas China may increasingly have a problem at tertiary level. But I think that in both countries there is a growing awareness of education as a key competitive issue in the years ahead.

Social conflict? Anyone who spends some time in China or India (or indeed Russia and Brazil) will have observed the huge disparities in income, and we know this causes tensions. The question is whether, over the next 30 years, these will be so great as to demolish their economic growth. It would be tragic if the present performance of China and India, which is lifting tens of millions of people out of poverty every year, were derailed by social dissent. Maybe the growth path is sufficiently embedded as to ensure the momentum is maintained, but I don't think we can be completely confident of that. At least the authorities in both countries are aware and concerned but whether the centre holds is not certain. My instinct, for what it is worth, is that the social tensions can be contained for a while yet and that economic success will eventually defuse the ticking bombs. Let's hope I am right.

A further point here is that success in the Brics has a knock-on effect. The laggards find themselves asking: "If China can grow like this, why can't we? What are we doing wrong?"

As this message seeps out around the world, expect more and more countries with uneven performance records to take a hard look at themselves. Expect countries as diverse as Nigeria, Indonesia and Vietnam to raise their game. The Goldman Sachs team dubbed the new Brics the "Next 11". They are a pretty disparate group, linked only by the fact that they have reasonably large populations and seem likely to improve their economic performance over the next generation. But there are signs that several of them are increasingly aware of their potential and what is needed to unlock it.

And we will learn too. If there is one message from the Tata car, it is that we in the West will also need to lift our game. That, I suggest, is no bad thing.


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## Bushroda

*Indian economy to grow 9.1 pct in 2008-09 - CMIE*
Mon Jan 14, 2008 12:50pm IST 

MUMBAI (Reuters) - India's economy is expected to expand by 9.1 percent in the next fiscal year beginning April, fuelled by robust investments and buoyant consumer spending, an independent think-tank said on Monday.

"With fresh investment proposals continuing to pour in, we expect the current economic growth to be sustained in the near future," the Centre for Monitoring Indian Economy (CMIE) said in its monthly review.

CMIE expects the economy to grow by 9.1 percent in 2007/08 too, higher than the central bank's forecast of 8.5 percent.

The economy has grown an average of 8.6 percent in the last four fiscal years.

CMIE estimated investments to the tune of 26 trillion rupees were currently under implementation.

"While these investments would generate demand for capital goods and construction industry in the near term, their eventual commissioning would ensure sustained growth in the medium-term," it said.

CMIE said its growth prediction for the next fiscal year was dependent on adequate monsoon rains and a slight fall in interest rates in the early months of 2008.

The think-tank said it expected wholesale prices inflation to remain stable in coming months and sees it at 3.5 percent by the end of March 2008, way below the central bank's target of 5 percent.

Annual wholesale price index at December 29, 2007, rose 3.50 percent.

CMIE said it does not expect any spike in prices of any of the manufactured prices, which could help bringing down inflation.


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## Bushroda

*India's new claim to fame*
Jorge Heine, 
National Post, Canada 
Monday, January 14, 2008

In the West China is now considered "the world's factory" and India "the world's service centre." This may soon change. Success in India's IT and telecommunications industry and the outsourcing of call centres to India from North America has played to perceptions that India's wealth can be traced to an emerging service economy. Yet India has been on the march economically for years, and not simply on the basis of IT.

Both in the 1980s and 1990s India grew at a very healthy clip of slightly under 6% a year, while lately it has climbed to 9%. This could not be done on the basis of the IT industry alone. Truth is, India also has a strong manufacturing sector, in which the automotive industry, with sales of US$34-billion, accounts for 5% of GDP and provides 13 million direct and indirect jobs. In auto parts and components India has already become a global player, supplying many of the world's leading producers. And it is now in automobiles that India is staking its claim to fame with the recent launch of the Nano, Tata Motors' "people's car."

At a price of US$2,500 dollars (100,000 rupees, i.e. "one lakh," the Indian expression for that amount), the Nano is half the price of its nearest competitor and the cheapest car on the world market. It comes with a 632 cc engine, options such as four doors, five seats, and can reach speeds of 100 km/h.

One and a half million cars were sold in India in 2007, of which one million were manufactured domestically. Yet, what is at stake is also the market of the developing world as a whole. Tata Motors thinks it will be able to sell up to a million Nanos per year a few years down the road -- in Africa, Asia and Latin America. This should not be surprising. In Chile right now, the most affordable car on the market is another Indian car, the Maruti Suzuki.

If growth in India until now has meant switching from the bicycle to the ubiquitous scooter or more high-powered motorbikes, the arrival of the Nano will allow millions of Indians to drive their own cars. In a country in which car penetration is still minimal, this has curiously led to a big hue and cry as to what this will do to the environment. Some have even gone so far as to say that Tata Motors should have put its engineering skills into building better and more efficient trains and buses, rather than into non-environment-friendly cars.

Tata Motors already builds many buses. But to ask a car company to build trains instead is like asking Ava Gardner to be a bit more like Florence Nightingale -- somewhat beside the point.

The true significance of the Nano, lauded as feat of "Gandhian (meaning stripped-down) engineering," is that it reflects one of the best, yet least heralded virtues of Indian industry -- its ability to expand the market "downward" to the popular sectors hitherto excluded from the forces of supply and demand. Much as European and North American industry markets appeal to the upper-income sectors in developing societies, Indian companies, schooled in the hard business of making do in a low-income environment, do just the opposite.

In that sense, the launch of the Nano reaches way beyond the automotive industry. It signals that India's rise is not limited to call centres, but is built on a foundation of industrial ingenuity that many poorer people in the world will soon witness firsthand on their nations' street and in their own driveways. - Jorge Heine is a distinguished fellow at the Centre for International Governance Innovation (CIGI). He served as Chile's ambassador to India from 2003 to 2007.


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## Bushroda

*IT at the heart of India's development*
By REUBEN SCHWARZ 
The Dominion Post, New Zealand 
Monday, 14 January 2008

*BOOMTIMES: The phenomenal growth of India IT industry is just beginning.*

*One of the pillars of modern India, and one the country is relying on to complete its transformation from an economic backwater to a global superpower, is its IT industry.*

From humble beginnings the industry has grown beyond what anyone imagined 20 years ago. It is currently worth about US$47 billion, or about 5.4 per cent of India's gross domestic product, and is still growing at about 30 per cent per year. It employs 1.6 million people directly, and many more indirectly.

Its phenomenal growth has led India to take IT to heart as a national industry, and everyday Indians have a real sense of pride now that its large tech companies are rivalling the established IT giants like IBM. This is proof to them that India can play and win on the global stage.

India's first IT company was Tata Consultancy Services (TCS), which sprang into life in 1968 as an offshoot of the giant Tata group. The industry was virtually nonexistent until the 1980s, when India's low labour costs and many fluent English speakers made it an attractive place to set up call centres and perform routine software development.

The seeds were planted then, but the growth of the Indian IT industry really began to skyrocket in the past 10 years on the back of Y2K and the first Internet boom.

The country's IT exports grew eight-fold in seven years  from US$4 billion in 2000 to US$32 billion in 2007  while the size of its workforce has increased tenfold. It added 300,000 new employees in the past year alone.

In this period TCS's revenues have doubled every two years and it now makes more than US$4.3 billion each year, with close to US$1 billion in after-tax profit, with a market capitalisation of US$26 billion, making it one of the biggest IT firms in the world. It has more than 100,000 employees, one third of these being hired in the past year.

Satyam, another Indian IT giant, took 17 years to make US$1 billion in annual revenues, but only two years after that to reach US$2 billion. It should hit US$3 billion this year, one year later, while hiring another 10,000 to 12,000 more staff to add to its 56,000 employees. Revenue growth sits at about 45 per cent annually.

It is tempting in the West to end the story of India's IT boom there, but it's really just getting started. Both TCS and Satyam expect revenue growth to continue at the pace set by recent years for the short-term. The industry hopes to hit US$60 billion in exports by 2010, but there is every sign it will get there early.

According to Nasscom, India's national IT industry group, about 20 per cent of the world's estimated total IT spend of US$1 trillion is outsourced. About 45 per cent of this is sent offshore, and about 80 per cent of this offshored work goes to India. India's IT firms say there is still room for revenue growth in traditional outsourcing fields, but there are a lot of other IT tasks Indian companies are keen to do as well. The falling price of bandwidth makes this more and more attractive.

TCS is increasingly doing remote management of customers' infrastructure, for example managing 30,000 computers worldwide for German business software giant SAP, handling almost everything from India. "Other than plugging in a desktop, you can pretty much do everything from far away," says Pankaj Baliga, TCS's vice-president.

Today's Indian firms aren't just "body-shopping" organisations, content with call centre work, routine software development and IT support contracts, though there is still a good deal of that.

Firms like TCS and Satyam are now going after high level consulting deals  and winning them.

The consulting market in Western countries like New Zealand, long the domain of well paid locals either self-employed or belonging to multinationals, looks set to be increasingly outsourced to Indian companies using a mix of Indian and non-Indian staff, based both in India and on-site.

Only about 3.5 per cent of TCS's US$30 billion in annual revenues is currently from this sort of high- level consulting work, but the company expects it to grow to as much as 10 per cent within a few years.

"We're no longer just filling RFPs," says Virender Aggarwal, director of Satyam's operations in Asia Pacific, Africa, India and the Middle East. "More and more companies are expecting us to do high- end work. Now they're asking us where they need to go."

Another emerging revenue stream is knowledge process outsourcing, Mr Baliga says. This sees Western firms giving data from financial systems or clinical drug trials to Indian IT firms for analysis. They analyse it more cheaply and then send the results back.

Other Indian firms are filing and researching patents for Western firms at about one-third the cost.

The knowledge process outsourcing market is estimated to be worth about US$2.5 billion each year, and some pundits predict it will quadruple within five years.

"There's going to be a lot of work that today we are not even visualising that will have to be outsourced," Mr Baliga says.

Many companies also see huge growth ahead for the outsourcing of engineering services, such as the design, modelling, and testing of airplanes and cars.

Companies like Tata and Larsen and Toubro (India's biggest construction and engineering firm) have access to both the IT and engineering skills, which they say gives them an edge over the competition.

Indian IT firms are no longer the poor cousins of IBM and Accenture, using a low-wage economy to pick up the low-value scraps.

Companies like TCS, which operates in 45 countries with 67 nationalities on staff, are multinational IT firms that see themselves as the equals of any Western ones, that just happen to be based on the subcontinent.

As this new breed of multinational moves further up the value chain, existing IT giants will have to adapt and compete, or risk being overhauled.

_** Reuben Schwarz travelled to India as the recipient of the NZTE Qantas Media Award.*_


----------



## Bushroda

*Two Giants Try to Learn to Share Asia*





*Harish Tyagi/European Pressphoto Agency*
Prime Minister Manmohan Singh of India played host to the premier of Greece last week before leaving himself for China. 

By JIM YARDLEY and SOMINI SENGUPTA
New York Times
January 13, 2008

BEIJING &#8212; Prime Minister Manmohan Singh of India will arrive in Beijing on Sunday for a three-day visit to China, with each country eager to increase bilateral trade, promote mutual friendship and offer reassurances that Asia is big enough to accommodate the ambitions of both rising powers.

Mr. Singh is visiting China for the first time as prime minister, when his government also has drawn closer to Japan and the United States. But Indian officials insist that India is not a proxy for American interests and is not plotting to form alliances to counter China&#8217;s rise. India also wants Chinese cooperation on nuclear issues and managing the unrest in Pakistan.

&#8220;I have made it clear to the Chinese leadership that India is not part of any so-called contain China effort,&#8221; Mr. Singh said last week, the Press Trust of India news agency reported.

China sees the trip as the latest proof of its maturing relationship with India after decades of hostility and mistrust rooted in a brief border war in 1962. Neither side is expecting significant progress on lingering disputes, especially over their contested Himalayan border. But Chinese leaders consider warmer relations critical for avoiding the kind of regional instability that could threaten economic growth.

&#8220;The most important thing for the two countries is to create a favorable environment, a peaceful environment for development in the long term,&#8221; said Sun Shihai, a South Asia specialist at the Chinese Academy of Social Sciences. &#8220;So both sides are trying to make their policies more pragmatic toward each other.&#8221;

China and India are the world&#8217;s fastest-growing major economies, though China is easily the more dominant. Its annual trade with India remains only fraction of its trade with Europe, Japan and the United States. But China-India trade is growing rapidly. When President Hu Jintao of China visited India in 2006, the countries pledged to double trade to $40 billion by 2010 &#8212; a goal they nearly reached last year and are likely to surpass this year. 
Both sides are expected to continue the trade push this week. Mr. Singh is bringing a large business delegation and is keen to correct a trade imbalance tipping in China&#8217;s favor.

Mr. Singh will spend his entire trip in Beijing and is scheduled to address China&#8217;s leading government research institute. He will be honored at a private dinner given by Prime Minister Wen Jiabao and will meet with Mr. Hu. 

&#8220;China attaches great importance to Prime Minister Singh&#8217;s visit and hopes to deepen the traditional friendship between the two countries,&#8221; said Jiang Yu, a spokeswoman for the Chinese Foreign Ministry. 

In New Delhi, senior Indian officials lowered expectations for any breakthroughs. They said the agenda was loaded with items based on old grievances and new challenges. 

The border dispute includes competing land claims over the Indian state of Arunachal Pradesh. But a senior Indian official said Mr. Singh expected little progress because China is never inclined to use high-level visits to negotiate details. Officials in New Delhi offered a measured response to reports that China was rapidly building infrastructure near the disputed border.

&#8220;As of now, we are comfortable with our relations with China,&#8221; Shiv Shankar Menon, the Indian foreign secretary, said Friday. &#8220;We are both successful in maintaining peace and tranquillity along the border.&#8221;

Water is a growing bilateral concern, and the countries have established a joint committee to study the flow of rivers that originate in Tibet and flow into the Indian hills and plains. On issues of energy security, terrorism and climate change, the Indians see a confluence of interests, if not identical objectives.

Pakistan, India&#8217;s old rival and China&#8217;s equally old ally, is also on the agenda because both sides are concerned about political turmoil across that country. 

&#8220;Both of us want this entire area to be peaceful and stable so we can get on with our lives, whether it&#8217;s China&#8217;s periphery or our periphery,&#8221; a senior Indian official who was not authorized to speak on matters of strategic delicacy said last week,

One of India&#8217;s biggest concerns is whether China will, even reluctantly, support India&#8217;s bid to buy nuclear technology. The Bush administration has opened that door, but the request is subject to approval by the International Atomic Energy Agency and the Nuclear Suppliers Group. The Indian official said he did not expect China to actively block India&#8217;s ambitions. &#8220;I&#8217;m not saying they&#8217;re happy with it, not at all,&#8221; the official said. &#8220;They won&#8217;t be the ones to stand up.&#8221;

Meanwhile, China is expected to push India to further open itself to Chinese investment and business interests. China&#8217;s telecommunications giant, Huawei, has hit snags in India, while China has complained about Indian laws devised to protect domestic industries from competition. 

Economic competition is inevitable as India is rapidly expanding its manufacturing base &#8212; China&#8217;s strength &#8212; while China is trying to move its economy toward the service and high-tech industries at the center of India&#8217;s economic expansion. China&#8217;s rising military capacity has alarmed Washington, which entered into a strategic dialogue with Japan and Australia in 2002. Proposals that India join that group of Pacific Rim democracies instantly attracted concern in Beijing.

Last week, Mr. Singh told reporters in New Delhi that those proposals &#8220;never got going.&#8221; Last year, India and China had joint military exercises for the first time. Michael J. Green, former director of Asian affairs at the National Security Council, said the United States was not discouraging warmer relations between India and China, but noted that tensions remained. He said China was quietly trying to oppose the United States-India nuclear deal and objected to including India on the United Nations Security Council. &#8220;Beneath the surface, the Indians are very strategically wary of China,&#8221; said Mr. Green, who teaches at Georgetown University.

China and India are increasingly playing roles in what have been each other&#8217;s backyards. New Delhi has been courting Southeast Asian countries like Vietnam and Singapore, just as China&#8217;s role is growing in Bangladesh and Sri Lanka.

Han Hua, an associate professor of international studies at Peking University in Beijing, said those underlying tensions were why China and India wanted to establish a broader spirit of cooperation to carry the relationship beyond specific grievances. She said the countries want to defy an old Chinese proverb, which holds that two tigers cannot share the same mountain.

&#8220;The two countries want to show the world that they can get along,&#8221; she said.

_*Jim Yardley reported from Beijing, and Somini Sengupta from New Delhi.*_


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## Bushroda

*'IN' WITH INDIA*
*With Bobby Jindal at the helm, Louisiana hopes to gain an opening into the breakneck Indian economy.*

By Robert Travis Scott
Sunday, January 13, 2008

NEW DELHI -- As luck would have it, the first Indian-American to be elected governor in the United States will be inaugurated in Baton Rouge at the same time India is celebrating the major holiday Makar Sankrant, a Jan. 14 harvest festival representing a fresh start and the ascent of the sun in the celestial sphere.

While Bobby Jindal might not be paying much attention to his parents' home country and its traditions on the day he takes the oath of office, image-conscious India surely will have an eye on him, the highest-ranking political figure of Indian heritage in America. And that could be an advantage for Louisiana.

Led by an innovative breed of entrepreneurs and a loosening of government controls on business, the second-most-populated nation in the world is lurching into the global economy with new resources of capital, skilled labor and technology. Like never before in its history, India is home to a growing number of companies with the means to expand their operations and trade around the world.

"India is the next China," said Louisiana economic development secretary Mike Olivier, who met recently with an Indian trade delegation. With Jindal as governor, Olivier said, Louisiana "will have every red carpet open. . . . It's going to open up doors in a short period of time."

In the past 20 years, Louisiana has often sat on the sidelines while massive foreign investments have poured into other Southeastern states. Tennessee, Kentucky, the Carolinas, Alabama and Mississippi recruited big manufacturing facilities, including trophy auto plants from Japanese, German and Korean companies. Last year, a major German steel company opted for Alabama over Louisiana for one of the largest U.S. plant investments of the decade.

India has endured painful and exhilarating changes in its economic structure during the past 17 years to reach its current new age of increasing prosperity. These changes are leading to greater opportunities for Indian investment and trade.

"The possibilities in the United States are tremendous," said Vijay Kalantri, a leading Indian trade entrepreneur who has visited New Orleans twice. Kalantri said New Orleans' port is impressive and that he and others are circulating the good word in India.

Wooing a steel company

Robert Landry, director of marketing for the Port of New Orleans, said India has been a trading partner for about 10 years, mostly with imported steel, but the port recently has seen the shipment of more Indian manufactured goods.

Eventually, more Indian companies and products in the United States could lead to investments in new facilities and new jobs. 

Olivier said he got Jindal, in his role as congressman, to sign a recruitment letter to a major Indian steel company that was considering plant locations in several states. Jindal Steel, which is of no relation to the governor-elect, is one of the few Indian companies with major manufacturing facilities in the United States. It has two plants in Texas.

"We're always looking for an opportunity, if feasible," said V. Gujral, vice chairman and chief executive of New Delhi-based Jindal Steel & Power Limited, one of several Jindal Steel subsidiaries.

The company plans to spend $12 billion for expansions in the next five years, he said, and is "open to possibilities."

A democracy with a vibrant free press and English as a major language, India has much in common with the United States. But as a nation with a socialist past, historical ties to Russia and tenuous economic relations with the West, it has a long way to go before becoming a close friend of America.

With 1.1 billion people, India is the fourth-largest economy in the world. It and China are expanding so fast economically that they are in a league of their own for domestic product growth rates. A recent headline in India's Business Standard bemoaned a pace of quarterly growth that had slowed to 8.9 percent, three times faster than that of the United States.

Slow progress

India is both a rich and a poor country, with large classes of wealthy and educated middle-class families and a staggering number of people living in poverty. On Indian television on a recent evening, an advertisement for diamond jewelry was followed immediately by an ad for a charity working to improve living standards in desperately poor villages.

The country has an abundance of natural resources, agricultural goods and small and large industries, but it also has a shortage of good roads, health care, power plants and schools.

"India is headed in the right direction, but slowly," said V.K. Topa, adviser to the secretary-general of the Federation of Indian Chambers of Commerce and Industry in New Delhi. The phenomenal growth has affected a large cross-section of the population but has trickled down too gradually to the poor and the villages, he said.

When India won its independence from the British in 1947, the private sector was cash-poor and the country relied on the public sector to create an industrial base. Government jobs became important sources of power and patronage in a system that dominated for 45 years. "It will take a long, long time for it to be shed off," Topa said. 

A turning point was 1991, when India's fiscal deficit and low foreign cash reserves sunk it nearly into bankruptcy. Guided by then-Finance Minister Manmohan Singh, the government liberalized its crippling regulatory structure and currency exchange, cut red tape and changed the tax system to create a better business environment. The economy blossomed, the Indian stock market bulled upward, and Singh is now prime minister.

Sharing technology

A future turning point will be the decisions made in India and the United States about relations between the two countries, particularly about agreements to open the exchange of high-technology, weaponry and nuclear power expertise. Few Americans are preoccupied with the pending nuclear power treaty that would lift technology trade restrictions and allow close cooperation between the U.S. and Indian business and science communities. But educated Indians are closely following the regular front-page news of the treaty's progress, which is coursing through international regulatory channels.

That is because stronger relations could create a historic Indian shift from East to West, checking China's growing power and affecting regional stability and even the war against terrorism. After World War II, the Soviet Union supported the newly created nation of India by assisting it with weapons, nuclear power plants and trade. Over time, the public perception was that Russia was a good ally and the United States was not.

"So the Russians, they've been supporting us, giving us maybe lousy stuff, wrong stuff, low technology. But they're a friend," Topa said. It is a trust issue with billions of dollars in deals at stake.

For example, India is facing major decisions about defense purchases, including a multirole aircraft. If India chose a U.S.-made plane and then at some point decided to demonstrate another atomic explosion with its nuclear arsenal, would the United States halt the transfer of military equipment or supplies as a sign of disapproval? These are issues of real concern in India, Topa said.

Through their diplomatic efforts, Presidents Clinton and Bush have improved India's perception of the United States, Topa said. As a congressman, Jindal joined a diplomatic mission to India two years ago that helped lay the groundwork for a later visit by Bush to discuss the nuclear treaty.

Easing business rules

In recent years the Indian government has continued to peel off restrictions on corporate international activities, and so growing Indian companies started looking overseas for opportunities. Their impact is being felt in several ways on the international scene: traditional acquisitions of companies or plants; increased trade; building new plants abroad; and providing an incredible variety of outsourcing services made possible through modern phone and Internet links.

"These last three years . . . Indian companies have started looking outbound," said Vijay Iyer, a partner in international tax for Ernst & Young's affiliate in India. "The last three years have been a boom period." 

Among the examples, India's Tata conglomerate has purchased Tetley and Eight O'Clock Coffee and a Ritz-Carlton hotel.

One of the keys, Iyer said, is that Indian companies are able to put together financing packages drawing on capital resources from around the world, a type of deal that was rare for them even just a few years ago.

A recent Ernst & Young report says investments and acquisitions will increase as Indian companies "increasingly pitch for larger assets overseas." A logical destination is the United States, the world's biggest, most tested consumer market.

"It is the place to be," Iyer said. "If you are looking at expanding, you have to look at the U.S."

Indian businesses are globalizing at a time of new trends in Indian-American affairs. The brain drain from India is not as dramatic as it was during the days when Jindal's parents left their home country nearly 40 years ago for career opportunities in Louisiana.

Under the old scenario, highly educated people would leave India and for the most part end business relations with their old country, as the Jindals did. Nowadays, with better business links between the nations, an Indian businessperson or engineer who goes to the United States is more likely to keep contact with Indian companies and more likely to return home, Iyer said.

Paving way for business

At the same time, Indian-Americans are becoming deeply integrated as individuals and as a community in the United States, which is building a gateway for business relations. Indian-Americans have the highest median income of any group in the United States according to ethnicity or country of origin, including Caucasians. They hold high-ranking positions in business and academia across America, such as PepsiCo Chief Executive Indra Nooyi.

Bobby Jindal's rise to a top elected office is the ultimate expression of America's acceptance of Indian-Americans.

"India was greatly proud that one of its sons made it to that level," said Ron Somers, president of the U.S.-India Business Council. "This whole new generation that Bobby represents is the beginning of a wonderful force in the democratic process." 

Topa said the Indian-American community is a significant factor in improving Indian views of the United States.

That community, he said, "has now come of age of some meaning, so the Bobby Jindals of the world today have more meaning." Journalists are more prepared now to write about Jindal's impact on Indian relations, evidence of the change.

"Five years ago you wouldn't be wanting to write about him in the same manner," Topa said. "All that put together is creating a scenario so that India-U.S. relations can move forward. But it needs a lot more patience and a lot more building blocks."

Landry, the port's marketing director, said Jindal brings a global perspective to the economic development table, and in the end, when it comes down to getting deals for the state, his general approach to business will be more important than his roots.

"His ethnic background might play well in India, but his business perspective is going to be what's most important," Landry said. "It's a great entrée, but in the end it comes down to the bottom line."

Gene Schreiber, managing director of the World Trade Center of New Orleans, said Jindal's inauguration will be positive because it puts Louisiana on the map for Indian business.

"It creates awareness -- and awareness is the first step," he said.


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## Bushroda

*World class fits for new India school*
*Northwestern among foreign partners of MBA program*

By Laurie Goering 
Chicago Tribune
January 13, 2008

HYDERABAD, India - When Aarti Kothari decided she needed a top-quality MBA to further her career, her choices at first weren't encouraging.

In a country suffering a dramatic shortage of placements for college students, the nation's best business school, the Indian Institute of Management, had more than a hundred applicants for each seat. Lesser programs, strapped for resources, offered degrees of questionable value. Going overseas was an option but only if she could find the nearly $100,000 it would take to pay for a leading U.S. business school degree.

So Kothari, a 26-year-old New Delhi journalist and economics graduate, was thrilled to win a spot at the Indian School of Business, a venture backed by Northwestern University's Kellogg School of Management, the Wharton School at the University of Pennsylvania, the London Business School and McKinsey & Co., a management consulting group.

Today she and 424 other Indian students study for their master's in business administration under visiting professors from Kellogg and other top business schools at a state-of-the-art facility in this booming southern Indian city that is home to many technology ventures. Such foreign-supported campuses, many believe, may be one answer to an educational crisis that threatens to hold back India's ambitions to become a world economic power.

The Indian School of Business "is definitely not an Indian school," said Kothari, strolling past sleek classrooms full of students giving PowerPoint presentations. "I'm studying in world-class infrastructure with world-class professors."

India, with its booming service economy but lagging higher-education system, has one of the biggest gaps in the world between the number of skilled college graduates needed to fill jobs and the nation's ability to produce them. That threatens to put the brakes on the country's economic growth, now running at nearly 9 percent a year.

Helping to fill gap

The country's National Knowledge Commission says only about 7 percent of Indians age 18 to 24 enter college, half the average for Asia. To double enrollment, it says, India needs 1,500 new universities by 2015, something the country will be hard-pressed to achieve, particularly with a nationwide shortage of high-quality faculty.

The country's laws effectively prohibit foreign colleges from setting up campuses to fill the gap. But dozens of universities from the U.S., Europe and elsewhere are finding creative ways to get a foothold in a market that offers both enormous demand and, potentially, enormous profits in terms of tuition and number of students.

"It's very, very important to us," said Dipak Jain, Kellogg's dean, who played a key role in setting up the Indian School of Business and who travels there regularly to teach. "There are lots of eligible students all over the world, and not everyone can come to us. If the students can't come to us, we need to go where the students are."

In most cases, foreign colleges looking for a start in India have partnered with existing higher-education institutions, offering help with curriculum development and staff training or setting up exchange programs.

The Indian School of Business follows a slightly different model. Set up as a new Indian-owned and -managed school, it takes capital funding from Indian businesses and relies on a core group of 24 Indian professors supplemented by visiting faculty from top business schools abroad.

Each year, 8 to 10 professors from Kellogg make the trip to Hyderabad, spending three to six weeks each, and Kellogg faculty of Indian descent also serve as three of the institute's seven "area leaders," overseeing operations as well as entrepreneurship and accounting programs, said M. Rammohan Rao, dean of the institute.

"The quality of education is very high. Basically they're getting the same quality" as students at Kellogg, Jain said.

A key difference, however, is that for $40,000 -- the cost of the one-year program, including food and housing on the sprawling 250-acre campus -- students get no formal degree, just a certificate. That is widely recognized by Indian industries looking for workers but not by India's government when it hires civil servants.

Getting around law

By law, only schools or institutes affiliated with Indian universities can offer degree programs. But schools that affiliate must, like their partners, comply with complex affirmative-action laws that set aside many seats for lower castes and other classes of Indians.

"We don't want to give degrees and come under too many restrictions," Rao said.

Foreign education institutions looking to step into India's education gap face other hurdles, including opposition from professors at Indian universities who fear the defection of their best students and faculty.

McKinsey estimates that a quarter of India's engineers and 15 percent of its finance graduates are qualified to work in multinational companies, a legacy of what Prime Minister Manmohan Singh calls a "dysfunctional" education system mired in shortages, red tape and corruption.

"Foreign universities come for profit, not to fulfill the social agenda," warned Vijender Sharma, a Delhi University researcher on Indian higher education. "If they don't get a profit, they move away. That's the rule of foreign direct investment."

Others, however, argue that inviting in foreign colleges may be the only means of improving India's ailing higher-education system to meet the demand of both students and employers.

India's Commerce Ministry last year called for opening up the country's higher-education system to foreign investment.

India's restrictions on foreign higher-education institutes are aimed in large part at weeding out the legions of fly-by-night operators. India today has 1,800 MBA programs, Rao said, but only 30 or 40 that offer any sort of high-quality training.

If India manages to revamp its rules to allow foreign universities to set up satellite campuses, students will have more choices, though many may still find a high-quality "foreign" education beyond their means, skeptics warn.

U.S. universities say they are eagerly awaiting that opening.

"Northwestern is thinking of creating something in India," Jain said. "I am sure lots of people would like to do something if the regulatory environment existed."


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## Bushroda

*The people's car with a market of 1.8m*
*It may not meet Western standards, but with the arrival of the Tata Nano, India's motor industry has come of age.* 

By Richard Orange in Delhi
Published: 13 January 2008

Girish Wagh blinks and recoils slightly as he is guided by a smiling PR man back to his chair to face the heaving, bellowing mass of the Indian press.

The man who led the design of the world's cheapest car, the Tata Nano, is obviously not used to the spotlight. But today he is getting the kind of attention India usually lavishes on its Bollywood film stars.

Ratan Tata may have dreamt up India's first people's car, but it was Wagh and his team of 500 engineers who made it happen. As he leaves the conference, he is followed by a stampede of journalists so unruly that burly bodyguards are called in to rescue him.

The Tata Nano's launch on Thursday marked the day that India's skills in "frugal engineering"  once represented by clunky, garishly painted Tata trucks, antiquated Ambassador taxi cabs and Mahindra jeeps  finally came of age.

Mr Wagh and his team have designed a car at a fraction of the cost of anything the best minds in Japan, Detroit, Korea and China have achieved. The Rs100,000 (£1,300) price is about half that of both the Maruti 800, the cheapest car on Indian roads, and the Chery QQ, China's cheapest model.

Nobody really believed they could do it. And when Mr Tata confirmed on Thursday morning that "a promise is a promise" and the Tata Nano would indeed be on sale for "one lakh only, VAT and transport being extra", a gasp went up from the 1000-strong audience.

For the first time, a car has been placed in the same price bracket as a flat-screen TV, a London commuter's season ticket, or an upmarket mountain bike. Time will tell whether it will become an icon like previous "people's cars", the Volkswagen Beetle, the Citroë* 2CV and the Mini. But with its bulbous front bonnet, hooped roof arch and small tubeless wheels, it has enough character to be in with a chance.

Indeed, the Nano is arguably the most significant new car launch in a quarter of a century. Even Mr Tata  a self-confessed shy man  was up front about the significance of his brainchild. Arriving on stage to the theme from 2001: A Space Odyssey (Richard Strauss's Also Sprach Zarathustra), he compared it to the Wright Brothers' first flight, the 1969 moon-landing and the world's first super-computer.

A better comparison, though, is the Model T Ford and the VW Beetle  cars that transformed the motor industry by bringing car ownership to a new class of people. Research from PricewaterhouseCoopers suggests that by halving the cost of India's entry-level vehicle, Tata could create 1.8 million new car buyers, doubling the size of the market.

The excitement in India was clear on Friday morning. Every motorcycle rider stopped in Delhi already knew the Nano's name, and was interested in buying one.

Satish Kumar, a 42-year-old father of two, said: "Indian people are very, very happy with this one lakh car. For my next car, I will buy this Tata. All the Indian villages and cities will buy this Tata. They will see that one motorcycle costs 70,000 rupees and takes two people, and a car costs one lakh and can take four."

Abishek Singh, 33, who was driving a TVS motorcycle, said: "Today I have a plan to go to the Auto Expo and have a look. I'm proud of Tata  they've committed to something and they've been true to their promise. Because he [Ratan Tata] is from India, I'm proud of him."

All the signs, then, are that there will be little spare capacity at the West Bengal factory where Tata will be operating from October this year. It is designed to produce 200,000 cars a year, and can be upgraded to produce 350,000.

So how did Tata do it? Ratan Tata said the company had not scrimped on quality to bring the cost down: "Many said this dream couldn't be achieved  some scoffed at what we would produce. Let me assure you that the car we have designed will meet all the safety requirements of a modern car, and have a lower pollution level than even a two-wheeler."

He added: "We shrunk the package of the car  we used less steel, we used less material, we had a smaller engine."

The car has been stripped of all unnecessary parts  there is just one side mirror, one windscreen wiper, and no air conditioning, power steering, airbag or central locking.

In fact, Tata's claim that it hasn't made cuts around emissions and safety is a stretch. The door panel in the standard model lacks a bar to protect drivers from a sideways collision, as Mr Tata admitted. The car would fail international tests even if airbags were fitted.

And its carbon emissions  at around 120g/km  are double what you would expect from a two-wheeler. Moreover, the car released this year will meet only India's emissions norms  which, according to Vivek Chattodadhya at Delhi's Centre for Science and Technology, are 10 years behind Europe's.

The view from the streets of south Delhi, however, is that none of this matters. "This is a very nice and comfortable vehicle," says Mr Kumar when the safety failings are raised. As for the lack of air conditioning, he pointed out that "India's cars are already 70 per cent not AC".

Ratan Tata is right to boast that the Nano is far safer than two-wheelers, which have double the fatality rate of cars. As for the potential increase in congestion and pollution, he asks: "Should the masses be denied the right to have an individual form of transport?"

The launch of the Model T Ford and VW Beetle did more than change the industry; they turned their creators into global automotive giants. Ford, Volkswagon and Renault, along with India's Bajaj, will all now follow with their own ultra-budget cars.

But the Nano puts Tata years ahead. It also proves that  for a certain type of low-cost engineering, at least  Indian manufacturers can outdo anyone else in the world.

Tata is filing for 34 new patents on the back of the Nano. The best example is its 623cc rear-mounted engine. Made of lightweight aluminium, it is the first two-cylinder engine with a single balance shaft to be used in a car. It relies on a fuel injection system designed by Germany's Bosch to eliminate the "pfut-pfut" of normal two-cylinder engines. Its small size and positioning free up space in the car, keeping weight to a minimum and making it possible to reach a speed of 65mph despite the engine's tiny 33bhp.

Dr Arun Jaura, head of product development at Tata's rival Mahindra, argues that India's engineers think innovatively because they cut their teeth when the country was an impoverished and closed economy in the 1980s and early 1990s. "Indian engineers didn't have billions of dollars at their disposal," he says. "If you have so many resources, you tend to be laid back and not think differently. Indians do think very differently; it's our backbone and our DNA."

And many Indian automotive engineers, Dr Jaura included, had successful careers in Detroit before they were lured home.

Indian car manufacturers may have roared into the consciousness of consumers in the US and UK with the launch of the Nano. But we are set to hear more from them before the end of this year  and not just because of Tata's likely acquisition of the Land Rover and Jaguar brands.

Mahindra plans to launch its Mahindra Scorpio SUV in the UK in June at a bargain price of £13,000, and will enter the US next year. Tata has confirmed it is in talks with distributors about launching its new-look Indica in the UK at the end of this year, with the Nano perhaps following in about three years' time.

Just as Girish Wagh on Thursday emerged blinking after 30 months buried in Tata's development centres, so it may be time for India's car companies to come out on the world stage.


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## Neo

*India eyes more trade, investment with China​*
BEIJING: Indian Prime Minister Manmohan Singh pushed China on Monday to address their bilateral trade imbalance, as the worlds two fastest-growing economies seek to put aside a lingering border dispute and deepen economic ties. 

Singh said both sides wanted to work towards creating an environment for greater economic interaction, calling for a roadmap for trade that would factor in complementarities and competitive strengths. 

This has to include creating a level playing field by addressing such issues as non-tariff barriers, IPR (intellectual property rights) protection and market-related exchange rates, Singh told business officials. 

All countries had to compete in a global market, he said, adding that such competition is not inconsistent with cooperation, nor is it adversarial. 

Singh meets his Chinese counterpart, Wen Jiabao, later on Monday for formal talks, following a private dinner between the two on Sunday night. 

Bilateral trade in 2007 rose 56 percent from a year earlier to $38.6 billion, according to Chinas Commerce Ministry. 

But Indian Trade Minister Kamal Nath, accompanying the prime minister, drove home his countrys unhappiness that the trade balance was increasingly skewed in Chinas favour. 

Nath, who held talks talks with Chinese Commerce Minister Chen Deming, said he had called on Beijing to lower barriers on imports of fruits and vegetables from India. He had also voiced the hope that China would approve a proposal from Indias Jet Airways Ltd to fly from Mumbai to San Francisco via Shanghai. 

Nath also raised the issue of Chinas taking years to register pharmaceuticals as a typical non-tariff barrier hindering Indias exports. 

China, for its part, complains of barriers to direct investment on the Indian side but, in a statement on the Commerce Ministrys Web site, encouraged Chinese companies to increase imports from India and said that over time their two-way trade would become more balanced. 

Distrust: Singh began his visit on Sunday on a friendly note with visits to sites for the 2008 Olympics, which Beijing will host in August, including the Olympic Project Exhibition Centre, which displays models of the main venues. 

Beyond trade, China and India also face common challenges on issues such as climate change and energy security. 

But the neighbours must also break down historic wariness over Chinas traditional friendship with Indian archrival Pakistan, and a decades-long border dispute that flared into war in 1962. 

Analysts say Singhs visit is unlikely to bring any breakthrough on the border dispute, which centres on Chinas claims to much of Indias northeastern state of Arunachal Pradesh. Beijing says the land is rightly part of Tibet. 

The Tibet issue is at the core of the India-China divide, and without Beijing beginning a process of reconciliation in Tibet, there is little prospect of Sino-Indian differences being bridged, Khedroob Thondup, a member of the India-based Tibet government-in-exile, wrote in e-mail to Reuters. 

...Beijing values its claims on additional Indian territories as vital leverage to keep India under pressure. reuters

Daily Times - Leading News Resource of Pakistan


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## Neo

*SBI to raise $4.3 billion in rights issue*​
MUMBAI: State Bank of India (SBI) will raise 167.36 billion rupees ($4.3 billion) through a rights share issue, the government-run bank said in a statement on Monday. 

SBI, Indias biggest bank, will issue one share for every five shares held, it said. The issue will be priced at 1,590 each. Shares of SBI were up 1.3 percent at 2,468.20 rupees in a weak Mumbai market. reuters

Daily Times - Leading News Resource of Pakistan


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## Neo

*India may sell $10 billion stake in BSNL​*
NEW DELHI: India may sell about 10 percent of fully state-owned telecoms provider Bharat Sanchar Nigam Ltd, the telecoms minister and a company official said on Monday, in what could be one of Indias largest ever IPOs. 

BSNL is Indias top ranked telecoms firm by subscriber numbers, but in mobile services lags Bharti Airtel Ltd, Reliance Communications Ltd and Vodafone-controlled Vodafone Essar. 

It is being considered. We have to discuss that in the department, Minister Andimuthu Raja told reporters when asked about when any offer might be launched. BSNLs director of finance said the company could sell 10 percent of the governments holding for $10 billion. 

We value the company at $100 billion, S.D. Saxena said, adding the proposed issue could be hit the market in about a years time. Reliance Power is hoping to raise $3 billion in an initial public offer this week, which would be a record for India. 

Analysts would not give a valuation for BSNL but said it has infrastructure and assets across India apart from offering fixed-line, mobile and long-distance telecoms services. 

We havent yet valued their passive infrastructure, which should be huge. They have been talking about an IPO for some time, said a telecoms analyst with a local brokerage, who did not want to be named. 

Harit Shah, who covers the sector at analysts Angel Broking, said: It will be definitely good for the markets as there are very few quality telecom stocks available right now. And it could be one of the biggest IPOs of the time. 

BSNL mainly operates on the dominant GSM platform nationwide. During the 2006/07 financial year, its revenues were at 397.15 billion rupees ($10.1 billion) and its net profit stood at 78 billion rupees. The market values Bharti at about $46 billion, while Reliance Communications is valued at about $41 billion. 

Indias mobile market is the fastest growing in the world with 8 million new subscribers signing up a month recently, lured by some of the cheapest call rates anywhere. reuters

Daily Times - Leading News Resource of Pakistan


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## Neo

*GM must expand in India to compete with Tata*​
DETROIT: General Motors Corp. must expand its operations in India if it is to compete in emerging markets, GM chairman Rick Wagoner said Monday.

While it is still too early to tell how consumers will respond to Tata Motors $2,500 Nano, it is clear that there is strong demand for low-cost vehicles, Wagoner told reporters on the sidelines of the Detroit auto show. To some extent its what content youre willing to take off and what the consumer wants too, he said. Lower cost vehicles have failed in the United States because consumers there are unwilling to accept the trade-offs in terms of styling. Quality and strict regulations will block the introduction of truly low-cost vehicles in established markets like the US, Europe and Japan, he said.

But who are we to tell Indians and Chinese (consumers) that theyve got to buy 10,000 dollar cars as their first cars rather than something thats a lot better than a two wheeler even if it doesnt have air bags, he said.

GM already has a number of lower-cost vehicles it produces for emerging markets, including a car in China that sells for about 3,500 dollars. afp

Daily Times - Leading News Resource of Pakistan


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## Neo

*India must tackle oil, infrastructure woes: WB *​ 
Wednesday, January 16, 2008

NEW DELHI: India needs to alleviate infrastructure constraints if it wants to sustain economic growth of 9 per cent and should let the impact of record oil prices feed through to the economy, a senior World Bank official said.

Shanta Devarajan, South Asia Chief Economist at the World Bank, said India must tighten spending to cut its fiscal deficit. The bank estimates India grew at 9 per cent in the year ended December 2007 and expects it to slow to 8.4 per cent in 2008.

India is facing severe infrastructure constraints and those have to be addressed. The economy has been doing well despite the difficulties of high oil prices and infrastructure constraints, he told Reuters in an interview late on Monday. 

Obviously, I would say it could do even better if those constraints were relaxed. Nine per cent growth is achievable but it wont be easy.Indias economy grew 9.4 per cent in the fiscal year ended March 2007, the fastest pace in 18 years, and the central bank expects growth to moderate to 8.5 per cent in 2007/08.

The Planning Commission has projected average annual growth of 9 per cent between 2007/08 and 2011/12. Policy makers say India will need investment of about $500 billion to upgrade infrastructure in the worlds second-most populous country to meet the growth target.

High oil prices, which recently touched a record $100 a barrel in global markets, were a threat to the Indian economy, but this could be managed, Devarajan said. Indian policy makers have shown how to manage these constraints as a way of minimising the impact, he said. 

India must tackle oil, infrastructure woes: WB


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## Flintlock

Reshma Patil, Hindustan Times
Email Author
Mumbai, January 17, 2008
First Published: 00:38 IST(17/1/2008)
Last Updated: 04:01 IST(17/1/2008)*
Global eye on start-up converting garbage into fuel*

T Raghavendra Rao, director, Sustainable Technologies and Environmental Projects (STEPS) filed for a global patent last year for his technique of converting waste &#8212; think plastic, sewage, slaughterhouse waste, hospital waste, petroleum byproducts &#8212; into liquid fuel and gas. And it&#8217;s easy on the environment, for the process does not emit heat-trapping gases that contribute to global warming.

Rao, a former oil industry expert, thinks &#8216;waste is wonderful, it&#8217;s a resource.&#8217;

&#8220;Mumbai&#8217;s waste generated daily should be recycled daily too,&#8217;&#8217; Rao emphasised. &#8220;We aim to come to the market with a globally acceptable system to recycle plastic, electronic and organic waste in 24 hours.&#8217;&#8217;

The technology is winning rave reviews.

&#8220;We would like to see this powerful innovation commercialised around the world, not just Texas,&#8217;&#8217; James Vance, business development manager of the global commercialisation group, IC2 Institute, told HT from the University of Texas. &#8220;We believe it should be able to convert most, and perhaps all types of hydrocarbon-based waste to fuel.&#8221;

Vance added that IC2, which provides innovators from emerging economies commercialisation expertise, has received more interest in this technology than any innovation it has examined.

The technology yields 1.1 litres of fuel from one kilo of plastic bags, and 1.2 litres fuel from one kilo of polyethylene sacks used for packaging, all at a cost of Rs 11-12 per litre. One kilo of plastic coating on wires yields 600 ml of fuel.

Mumbai&#8217;s municipal corporation does aim to earn carbon credits from capping the Gorai dump and generating electricity from its methane emissions. But at Rao&#8217;s plant in Vasai, on Mumbai&#8217;s northern fringe, his staff is testing a quicker method.

Plastic is converted into vapour and passed through cartridges containing a catalyst or a chemical to breakdown the molecules into liquid fuel and gas. The plant is self-energised, on gas generated from the waste conversion process.
HindustanTimes-Print
&#169; Copyright 2007 Hindustan Times


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## Neo

*India to grow 8.5% in 2008-09: econ panel chief ​*
NEW DELHI: Indias economy is likely to grow 8.5 percent in the fiscal year from April, the chief of the prime ministers economic panel said, but the government should moderate taxes to spur demand for consumer durables. 

Asias third-largest economy has expanded at an average of 8.6 percent over the past four years, and is poised for another year at a similar pace in 2007/08. 

We discussed the likely trends for the economy. It will grow around 8.5 percent in the next year but there are some pressure points, like the manufacturing sector, C. Rangarajan, chairman of the Economic Advisory Council, told reporters after meeting the finance minister. We said there could be some adjustment in indirect taxes to stimulate growth in consumer durables, he said on Wednesday. 

Consumer durables output  ranging from television sets to motorbikes  fell an annual 4.1 percent in November, compared with a 10.1 percent growth in the same month a year earlier as a spate of interest rate increases ate into demand. India grew 9.4 percent in the 2006/07 fiscal year, its strongest in 18 years, and second only to China among major economies. 

But annual growth dipped to 8.9 percent in the September quarter, falling below 9 percent for the first time in three quarters, as industrial output slowed due to monetary tightening measures designed to trim inflation. 

Policy makers are confident of maintaining growth momentum despite a surge in the value of the rupee against the dollar, higher interest rates and record global crude oil prices. The ruling communist-backed federal coalition will present the budget for 2008/09 at the end of February. Rangarajan said his panel had asked the finance minister not to lower personal tax rates, but there could be some room for increases in exemption limits. 

On direct taxes, we should keep tax rates stable but there could be some adjustment in slabs, he said. Hopes for a cut in personal taxes rose after Finance Minister Palaniappan Chidambaram said that there could be a case for moderation of rates if voluntary compliance increased. 

Indias personal tax collections jumped 50 percent to 2.05 trillion rupees ($52 billion) between April and December from the year before, while corporate tax collections expanded 40 percent. 

Top economists cautioned Chidambaram last week that finances were likely to come under pressure, especially with a pay rise for over 3 million government workers looming. A pay panel is expected to submit its report in April. reuters

Daily Times - Leading News Resource of Pakistan


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## Neo

*What India must do to modernise​*
Daily Times Monitor

Historically, successful development has involved exporting labour-intensive manufactures. Despite opening up to the world economy in many respects, Indias policies continue to retard the expansion of labour-intensive sectors. Here is a discussion of how India could speed its transition to a modern economy. 

A key advantage claimed for the outward-oriented development strategy is that it allows poor, labour-abundant countries to specialise in labour-intensive products and, thus make efficient use of limited capital stocks. To quote Anne O. Kruger (1985), An export-oriented strategy permits countries to use the international market to exchange their own, relatively labour-intensive commodities for capital-intensive goods. 

They are thus able to take advantage of the division of labour and specialisation. This ability contrasts sharply with import-substitution policies under which labour-abundant developing countries produce the entire spectrum of manufacturing goods and experience high and rising capital/labour ratios. 

The experiences of South Korea, Taiwan, Brazil and most recently China offer broad support to this claim. Increasing shares of industry in GDP in general and of labour-intensive manufactures in particular accompanied the adoption of outward-oriented strategies in these countries. Exports of unskilled-labour-intensive products such as apparel, footwear, toys and numerous light manufactures expanded rapidly. 

Indias recent engagement with the world economy has produced a contrasting pattern, however. 

Contrary to the impression in many circles, Indias industrial and services sectors are almost as open as those of China. The simple average of industrial tariffs is 12% compared with 9% in China. The highest industrial tariff rate (with tariff peaks in several sectors) has been brought down to 10%. In fiscal year 2005-06, custom duty as a proportion of merchandise imports was just 4.9%. With some negative-list exceptionsmost notably multi-product retailthe goods and services sectors are quite open to foreign investment. Only in exceptional cases such as insurance and media the sectoral cap on foreign investment caps are below 51% and in most cases go up to 100%. While this opening-up has been accompanied by acceleration in growth to 6.3% during the last two decades and to almost 9% in the last four years, Indias experience differs from that of China in at least three important respects. First, while India has seen the share of agriculture in the GDP decline, it has not experienced perceptible rise in the share of manufactures. 

Second, exports out of and direct foreign investment (***) into India have not seen the same rapid expansion as that seen in the case of China. Finally, fast-growing exports from India have been either capital-intensive or skilled-labour intensive. The shift in favour of unskilled-labour-intensive products traditionally observed in response to the adoption of outward-oriented polices has not happened in India. 

Indian exceptions: The share of manufacturing in the GDP in India has been stagnant at 17% since the early 1990s. In China, this share stood at a hefty 41% in 2006. Indias leading and fast-growing exports, such as engineering goods, petroleum products, gems and jewelry, and software, are either capital-intensive or skilled-labour intensive. The share of textiles and textile products in total merchandise exports has declined to 15% in 2005-06 from 20% in 2003-04. Within this category, unskilled-labour-intensive ready-made garments account for only half of the exports. In contrast, the export pattern of China quickly adjusted to its factor endowments after it began opening up its economy in the late 1970s and early 1980s. 

First, exports of textiles, apparel, toys, sports goods and footwear surged. Then in the 2000s, with rising skill endowments, it moved into more sophisticated assembly operations such as office machinery, telecommunications and electrical machinery. 

The most dramatic difference between India and China lies in the magnitude of international economic engagement. One measure of this difference is that the annual expansion in Chinas trade has been larger than Indias total annual trade during last several years. For instance, Chinas merchandise exports expanded by $169 billion to $762 billion in 2005 in comparison to Indias total merchandise exports of $103 billion in 2005-06. Equally dramatic are Figures 1 and 2 with the former showing the evolution of China and Indias two largest merchandise exports and the latter depicting *** inflows. What holds back India?: How do we explain these differences in the response to trade openness of two economies with very similar factor endowments? The key to answering this question is the poor response of large-scale labour-intensive manufacturing including assembly and processing activities in India. As per the conventional wisdom, these activities have served as the magnet for *** and a conduit for rapid expansion of exports in China. But this has not happened in India. Large-scale labour-intensive manufacturing activities have been virtually absent from India. Apparel factories employing thousands of workers under a single roof found in China are non-existent in India. 

While high growth has helped India bring its poverty ratio (the proportion of the poor below the official poverty line) down from 36% in 1993-94 to 27% in 2004-05, its transition to a modern economy remains problematic: it must still move the vast majority of its workforce out of farming into non-farming activities. With the services leg doing all of the walking, the economy can only limp along towards this transition. For a more rapid transformation, India must walk on two legs. That means more rapid growth of the labour-intensive manufacturing.

Daily Times - Leading News Resource of Pakistan


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## Bushroda

*India posts strong growth in earnings from tourism*
14 Jan, 2008

NEW DELHI: India's foreign tourism revenues grew by a record 33.8 per cent in 2007 amid a big campaign by the country to draw more overseas visitors.

*Foreign exchange earned from tourism climbed to $11.96 billion last year from $8.93 billion the previous year.*

Foreign tourism revenues grew by 19.2 per cent year on year in 2006. "The year 2007 witnessed a remarkable growth in the tourism sector in terms of foreign exchange and foreign tourist arrivals," said a government official.

The number of foreign arrivals rose by more than 12 per cent to touch five million last year from the 4.45 million tourists who travelled to India in 2006.

Tourism industry officials, however, warn the government's drive to bolster the sector could suffer if it does not improve India's shabby airports and other infrastructure.


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## Bushroda

*The new Asian tiger poised to match China*
Randeep Ramesh in Delhi
The Guardian, UK
Saturday January 19, 2008

It took one minute to sell all $3bn (£1.53bn) worth of shares to the public in India's biggest share floatation. The buying frenzy of stock in Reliance Power will almost certainly see 48-year-old Anil Ambani overtake his older brother Mukesh to become the country's richest man with a fortune of more than $60bn when the shares debut on the Bombay stock exchange later this month.

What is remarkable is that Indians have been buying into a company that has little more than a famous name, Reliance, and big ambitions. The soaring stockmarket is a symptom of India's overflowing optimism. Little wonder that Gordon Brown, who arrives in the country tomorrow night, has decided to make India the second stop on his Asian tour. The prime minister will be accompanied by a big trade delegation attracted by a burgeoning middle class in the nation of 1.1 billion people. They are not alone in vying to cash in on India's wealth - Nicolas Sarkozy, the French president, will visit next week.

India is experiencing a rapid and sustained rise in living standards for the first time in centuries. The economy is poised to expand by 9%, a rate second only to China. Every day the newspapers produce a diet of good news obscuring the poverty. Tata, India's industrial powerhouse, produces the world's cheapest car, and will soon own the exclusive marques of Jaguar and Land Rover. In sport billionaire telecom magnate Sunil Mittal has set aside £25m to send India's football team to the world cup in 2018. Another billionaire, liquor baron Vijay Mallaya, has spent £100m buying a formula one team and aims to build a racetrack in Mumbai by 2010.

In the same way as commentators refer to the 1900s as the "American century", the 21st century is forecast to be Asian. If the scale and speed of growth can be maintained on both sides of the Himalayas by 2050 Beijing and Delhi will be the capitals of the world's two richest nations.

Some commentators say India will soon eclipse its larger northern neighbour. Surjit Bhalla, an economist, says its poorer, younger and larger workforce means India will catch up with China by 2010. "There are no growth miracles here," said Bhalla, author of the book Second Among Equals: the Rise of the Middle Class Kingdoms. "What we are seeing is the creation of a new middle class in these two countries that is driving growth globally. By middle class I mean people with eight dollars a day to spend in disposable income. Which means foreign companies can sell them watches, cars, computers."

The surge in demand for consumer goods has tripled mobile-phone use in two years. The Indian car market is forecast to become the fastest-growing in the world. The country's myriad social problems - illiteracy, hunger, caste violence and penury - still exist but policymakers now believe they can be overcome.


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## Bushroda

*Nano makes it to Times most important cars of all time*
AS THE DEBATE GOES ON
S. Muralidhar
Chennai, Jan. 17

One week after its unveiling, the worlds media is still agog with news and views about the Tata Nano. Many termed it a cute, ultra-cheap car that will revolutionise personal transportation in India and Asia and many others are calling it a glorified go-kart that will be unreliable and unsafe.

The debate is still raging in all sorts of media - print, TV and the Internet.

Online polls that ask Americans if they will buy one if and when the Nano is launched in that market, blogs that have postings, which swing from patriotic praise to outright hatred and discussion forums that are still witness to heated arguments about the promise and fallout of the car are keeping the Tata car in the thick of it all. The Nano has probably got more media attention than it bargained for. But, it was only to be expected with the Nanos much-publicised price tag making it the cheapest car of the world.

Competitors who have in the past sworn that it is an impossibility to develop a $2,500 car have reacted to the Nano as far away as Detroit  the home of the American automobile industry.

At the North American International Auto Show, which is currently on at Detroit, the hot car being discussed was the Nano, where it is not even on display.

Interestingly, the notoriously taciturn, Toyota Motor Corporation and its President, Mr Katsuaki Watanabe, also reacted to the Nano saying that the worlds number two car maker will need a little more time to develop vehicles at this kind of price point. It is reported that he also added that an early prototype of a Toyota small car that will be made specifically for markets such as India is close to getting a go sign.

In the midst of all this attention that the Nano is still getting, comes one of the first recognitions of its potential to create history.

In a presentation titled The dozen most important cars of all time starting from 1908 to the present, Time magazine lists the Tata Nano along with legendary cars like the Ford Model T, the Volkswagen Beetle, Chevy Belair, Toyota Corolla, the Mini and the Honda Civic.

Listing the 12 cars in chronological order, the Time magazine presentation says only these few automobiles have been able to fundamentally change the way we live and dream. As for the Nano, Time says Indias peoples car, as it is already dubbed, is intended to put motoring within reach of Asias masses.

At $2,500 its hard to see it how it wont sell, but even if it doesnt it will become the poster car for a new, stripped-back style of engineering  glue instead of welds!  that could change the world.


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## Bushroda

*India plans $500bn infrastructure push* 
David Rothnie
Financial News Online, US
21 Jan 2008

Government wants to use $5bn of foreign exchange reserves to boost transport and utilities

The Indian Government is close to launching an investment vehicle in London to use $5bn (3.4bn) of the countrys foreign exchange reserves as a contribution towards a $492bn investment plan over the next five years for Indias roads, railways and airports.

The special purpose vehicle, which will be a subsidiary of the Government-owned India Infrastructure Finance Company, has gained UK regulatory approval and is expected to open for business next month, according to S S Kohli, chairman and managing director of IIFC.

The company wants to hire advisers and has set a deadline of Friday for expressions of interest. Kohli used to work for the Punjab National Bank and said the subsidiary may take temporary offices in the City of London.

N K Madan, who will be managing director of the subsidiary, said: The subsidiary is likely to be incorporated in about a months time. Initial operations of the entity may start with a staff of between three and four officials.

The Indian Government estimates an investment of about $492bn will be needed by the end of 2012 to upgrade the countrys roads, ports and airports. In its annual policy statement for 2008, the Reserve Bank of India warned that infrastructure bottlenecks are emerging as the single most important constraint on the Indian economy.

Kohli said the London-based subsidiary will function by borrowing funds from the Reserve Bank, custodian of the countrys $272bn worth of foreign currency reserves, in the form of long-term securities.

The fund will then provide foreign currency funds to Indian companies engaged in the infrastructure sector and has set aside an initial investment of $5bn from the reserves to fund domestic projects.

The initiative will run in addition to the $5bn infrastructure fund the IIFC started raising in India last year with investments from the Blackstone Group and Citigroup. Kohli said: We have held negotiations with a number of other banks, including Deutsche Bank, regarding investments and have secured $2bn from Australias Macquarie Bank this month.

As a result of the Goverments investment plans, more foreign and domestic private investors are raising similar funds. Private equity group 3i raised $1bn last year. GE plans to create an infrastructure fund of between $300m and $500m, while ICICI Bank, Indias second largest bank, announced plans for a $2bn fund last September.

Investment banks are attracted to Indias booming economy, which is expected to grow at 8% a year until 2020, according to projections by Jim ONeil, head of global economic research at Goldman Sachs. He said Indias equity market has risen 499% since Goldman categorised it as one of the Bric economies in 2001.

Its growth has led to a surplus in foreign exchange reserves, but unlike its fellow Bric countries Russia and China, India has no dedicated sovereign wealth fund.


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## Bushroda

*RMC cashes in on Indian retail boom*
By Colin Donald, Business Correspondent
Scotsman, UK

STIRLING-BASED specialist recruitment firm, Retail Management Consultants (RMC), is targeting a three-fold turnover increase over three years as it spearheads the UK sector's expansion into Asia.
The £1 million-turnover family firm, which was established in Stirling in 1986 and has outposts in London and Manchester, has opened an office in Mumbai in India, building on a long association with the leaders in the high-growth Indian retail sector.

Joseph Leftwich, senior consultant for RMC and son of the founders Julia and Alex Leftwich, told The Scotsman: "We are now incorporated as an Indian business, but our interest in the subcontinent started eight or nine years ago.

"Our first involvement was with the chain Shoppers' Stop, who really invented modern retail in India.

"Hundreds more opportunities have since sprung up and we are working with the other top Indian retailers, Future Group, better known as Pantaloon, and another called Spinach."

Leftwich, whose brother Daniel also helps run the business, continued: "The UK and other western European retail markets are relatively mature. While they still offer opportunities for growth, the greatest challenges today and in the future, lie in Asia  China and India in particular.

"India's economy is growing at a phenomenal rate. GDP growth has exceeded 9 per cent for the last four years. India's retail sector experienced growth last year in excess of 40 per cent and is still gathering speed."

RMC, which recruits executives for the retail, property and logistics sectors, has received the support of Scottish Enterprise Forth Valley, allowing the firm to boost its overseas marketing capacity.

The company's client portfolio spans Europe, the Middle East and Asia, but its founders insist that it "remains a family-run business with a strong desire to retain its HQ in Scotland".

Stuart Ogg, head of Scottish Enterprise Forth Valley, called RMC "an excellent example of globalisat
ion by a small, growing company in the forefront of its field".

Ogg added: "RMC has realised the tremendous opportunities for companies who take the time and effort to research and implement a strategy for new markets."

India's post-liberalisation boom, which has famously benefited IT, business process outsourcing and financial services, has created an increasingly affluent middle class, creating what RMC calls "an unprecedented demand for a modern shopping experience".

Leftwich said there were "significant costs involved" in establishing an Indian office as "accommodation and commercial property costs are as high in Mumbai as they are in London or Manhattan".

But he said that, as well as riding on the growth of Indian retail, the move would present RMC with an outpost from which to explore further Asian expansion, possibly in the promising Malaysian and Vietnamese markets.


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## Bushroda

*India trade ties offer a cushion*
Jason Koutsoukis
The Age, Australia
January 20, 2008

FEDERAL Treasurer Wayne Swan has signalled a major shift in Australia's international focus towards India, with hopes the world's fifth-largest economy may cushion Australia from a global economic downturn.

With the local sharemarket in freefall for 10 consecutive days and more bad economic news out of the US clouding Australia's economic future, Mr Swan told The Sunday Age that India presented a massive economic opportunity.

"Australia has a golden opportunity to work more closely with India to pursue our common economic interests," Mr Swan said.

"I want to explore ways to institute closer ties between the Indian Ministry of Finance and the Commonwealth Treasury."

According to most credible projections, India will be the world's second largest economy, behind China, by 2050, with developments there to have a major impact on Australia's economic prospects.

Already Australia's fastest growing export market over the past five years and now the fourth-largest export destination for goods, Mr Swan revealed that he has moved to establish contact with Indian Finance Minister Palaniappan Chidambaram to institute closer economic ties.

This will include working closely with India in international forums such as the G20 forum of finance ministers and central bank governors.

"Part of the Rudd Government's mission is to modernise the economy, so modernising our relationships with key economies is a vital component of that," Mr Swan said.

"My cabinet colleagues and I know how crucial the Indian economic relationship is to the prosperity we build for families into the future."

Mr Swan's focus on India follows Trade Minister Simon Crean's first official visit to India last week, where he held meetings with Indian officials and business leaders.

India is Australia's fastest growing major market for both goods and services, increasing at a rate of more than 30% a year.

Foreign Minister Stephen Smith also highlighted Australia's keen interest in India when appointed late last year.

With the Indian market now at 1.13 billion people, bilateral trade in goods between India and Australia reached $11.4 billion last year, of which $10.1 billion were exports to India including goods such as gold, coal, copper and wool.

Australia also exported about $1.7 billion in services, the bulk of which was related to the education sector.

But with the Rudd Government already signalling it would not sell uranium to India while it was not a signatory to the Nuclear Non-Proliferation Treaty, some analysts tip this tough stance could jeopardise closer economic relations between the two countries.

"That's all the Indians want out of Australia," a well-placed source with the Department of Foreign Affairs and Trade said. "And until we agree to sell them uranium and support them through the Nuclear Suppliers Group, they won't be doing much to help us."

Mr Swan's focus on India was welcomed by the Australia-India Business Council. The council president Brian Hayes, QC, said there was enormous potential to harness the cultural symmetry between the two countries.

"We have put behind us the political inertia, which developed in 1986 when India was having serious problems with Pakistan," Mr Hayes said.

"The obvious common features such as democratic government and rule of law are very conducive to doing business and contrasted with China where there are some obvious hurdles."


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## Bushroda

*Rupee climbs against dollar*
22 Jan 2008, 2000 hrs IST,REUTERS

MUMBAI: The rupee rebounded from a two month low on Tuesday after local shares pared losses from an early slump, and traders suspected the central bank pumped in dollars to calm jitters.

The partially convertible rupee ended at $39.48/49, up 0.2 per cent from Monday's close of 39.555/565 and well off an intraday low of 39.78, which was the weakest since November 29.

It had hit a near decade high of 39.16 in early November. Shares plunged nearly 13 per cent in early trade on a global rout, but bounced back to limit losses to 5 per cent at close after state insurance firms led buyers back.

"Recovery in shares in the afternoon helped sentiment. But sustained dollar selling by a few public sector banks, which I strongly feel was on behalf of RBI was the real sentiment booster," a senior dealer with a foreign bank said, referring to the Reserve Bank of India.

Traders said the dollar supplies encouraged exporters to sell the US unit, on expectations the rupee was likely to rise in the coming months. Foreigners sold $1.4 billion worth of Indian shares in the last three days of last week.

In 2007, foreign funds bought a record $17.4 billion of stocks, and this was a key driver for the rupee's rise of more than 12 per cent. Analysts expect the rupee to rise in the medium-term.

"*We look for dollar-rupee to reach 36 at end 2008 and 35 at end-2009, which is consistent with our optimistic medium term outlook for the Indian economy*," Sebastien Barbe at Calyon Bank said in a research note on Tuesday.


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## Bushroda

*Investors lose over $300 bn in six days*
Press Trust Of India
Mumbai, January 21, 2008
21/1/2008

Investors on Dalal Street have lost over 300 billion dollar (Rs 11,85,285 crore) in the last six days with more than half of the loss coming from Monday's fall of the benchmark index Sensex--its biggest ever.

The 30-share index Sensex today witnessed a fall of 1,400 points, tumbling below the 18,000-point to close at 17,605.35. The huge drop in the index was led by blue chip heavyweights - Reliance Energy, ACC, Bajaj Auto, DLF and Reliance Industries.

The Sensex has lost 3,222.1 points in last six trading sessions, while investors' wealth -- measured in terms of cumulative market capitalisation of all the listed companies -- has declined by Rs 11,85,285.46 crore.

The total market capitalisation stood at Rs 59,53,525.87 crore at the end of Monday's trading against Rs 71,38,810 crore before bourses began business last week on January 14.

While, the investors have lost a whopping Rs 6,63,975 crore in just one trading session from market cap of Rs 66,17,501.33 crore on Friday last week. The investors had lost over 5,21,310 crore in the five trading sessions last week.

According to market analysts, the major fall has been mainly due to the slowdown concerns in the US economy among other factors.

"The major factors behind today's market meltdown are US recession and margin call, besides panic selling has also crept in...All the major Asian markets are crackling like anything," Asika Stock Brokers' Paras Bodhra said.


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## Bushroda

*India's 3 largest IT firms earn US$4 bln so far this fiscal year*
Monday, January 21, 2008

NEW DELHI, Jan 22, 2008 (Asia In Focus via COMTEX) -- WIT | news | PowerRating | PR Charts -- Despite a significant rise in rupee and turmoil in the US economy hurting the Indian IT sector, the country's top three software firms have added over US$1 billion to their third-quarter turnover, taking their total to more than US$4 billion in the current fiscal year. The collective revenue of TATA CONSULTANCY SERVICE (BSE:532540), INFOSYS (BSE:500209) and WIPRO (BSE:507685) rose to Rs 15,903 crore (US$4.04 billion) in the third fiscal quarter ended December 2007, as against less than US$3 billion (Rs 12,679 crore) in the year-ago period, a 25.4 per cent year-on-year growth in their combined third quarter revenue.

* Wipro, the country's third-largest software exporter, on Friday reported a total income of Rs 5,433 crore - the highest third-quarter figure among the three, rising nearly 34 per cent from Rs 4,055 crore in the year-ago period.

* While TCS' Q3 revenue rose 23 per cent from Rs 4,910 crore, that of Infosys spurted nearly 20 per cent from Rs 3,714 crore in the third quarter of last fiscal year.


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## Bushroda

*China Should Be Afraid of India's New $2,500 Car*
William Pesek
Jan. 23 (Bloomberg) 

The West seems thoroughly unimpressed by India's $2,500 car.

The media focused on the environmental evils of millions of Indian households owning Tata Motors Ltd.'s Nano. A Washington Post headline said it all: "It Costs Just $2,500. It's Cute as a Bug. And It Could Mean Global Disaster.'' Others dismiss it as the Yugo of our times -- a lemon destined to fail.

Missed in all the incredulity is that Tata's new vehicle is an engineering marvel that speaks volumes about India's economy. China's too.

Sure, the "People's Car'' is cheap and tiny and probably wouldn't thrive in showrooms in Miami or Paris. Commentators in India have called it a feat of "Gandhian engineering,'' meaning unpretentious and stripped down. For many automobile enthusiasts, the two-cylinder, no-frills car will seem a bit too egalitarian.

Yet the Nano is an example of the reverse technology needed to reach the market that Paul Collier wrote about in his book "The Bottom Billion.'' Tata Chairman Ratan Tata is reminding the world that there's great potential in expanding markets to low- income consumers who don't much interest the West.

What's more, Tata's feat is a reminder that India's economy is far more than just service centers and information-technology companies. India boasts an engineering prowess that may continue to confound naysayers, create well-paid jobs and accelerate the growth of the middle class.

*'Rising Elephant'*

Officials in Beijing may want to take their gaze off the 2008 Olympics for a moment to ponder all this. While China gets most of the headlines and foreign investment, India is quietly raising its economic game.

It won't come as a surprise to fans of Ashutosh Sheshabalaya's 2004 book "Rising Elephant,'' which argued that India is doing with high-tech and engineering know-how what Japan did with cars. To him, Tata's Nano proves the point.

"This is not a tsunami in the making,'' Sheshabalaya wrote on TheGlobalist.com last week. "Rather, it underscores how India leverages its white-collar strengths in the knowledge economy to exert a powerful force on global blue-collar manufacturing. In doing so, it engages in a diametrically opposite direction from China. Along the way, India will spring some wholly new surprises.''

*Chindia*

China is the world's factory floor; India is its back office. This adage is looking dated as the Nano prepares to hit the roads of Asia's third-largest economy. It's likely that Tata, by "Bangaloring'' the global car market, will accelerate an innovative revolution among makers of everything from computers to motorbikes to air conditioners to microwaves to televisions.

The China-versus-India debates of a few years ago have largely given way to talk of "Chindia.'' Indian Prime Minister Manmohan Singh ended a recent trip to China amid talk of a "high-quality'' regional trade agreement and "shared vision for the 21st century.''

China can still learn from India, just as India can benefit from studying its neighbor's successes. China has a huge head start when it comes to the roads, bridges, ports and power systems needed to raise living standards. China also receives the bulk of Asia-bound investment.

Yet India has done better in creating a genuine economy that produces globally competitive companies and innovative products. Armed with more than $1.5 trillion of currency reserves, China seems more interested in buying overseas enterprises than building local ones that provide jobs and wealth.

*Macro Story*

India is far less reliant on exports, has better demographics and is making strides toward creating a consumer market. India's middle class -- those with annual disposable incomes of between $4,380 and $21,890 in current dollars -- will increase more than 10-fold to 583 million by 2025, estimates New York-based consulting firm McKinsey & Co.

Officials in New Delhi are getting their macro-economic act together. India has long been a good micro story thanks to the rule of law, good companies and the checks and balances that come with democracy. Its macro development -- stable growth, acceptable inflation, foreign-direct investment -- has been less impressive.

India's macro story is increasingly complementing the micro one. Efforts to raise the limit on foreign equity stakes in local insurers to 49 percent from 26 percent and letting overseas lenders increase holdings in India's private banks may reap important benefits. Foreign participation in telecommunications helped India become the world's third-largest user of telecom services and the fastest-growing wireless market.

*Environmental Concerns*

There are plenty of opportunities for India's notorious bureaucracy to muck things up. Tata's Nano offers a model that can be emulated in the private sector if the government does more to build good roads and ports, and train new generations of skilled managers.

Also, the Nano isn't all good news. Rajendra Pachauri, chairman of the UN climate-change panel that shared last year's Nobel Peace Prize with Al Gore, has said "I am having nightmares'' over the environmental risks posed by such a car.

This is still a Henry Ford moment of sorts for India, and investors who miss it may have regrets in the years to come. That goes for China's leaders, too.


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## Bushroda

*Halal Street: 7-month labour lost in 7 sessions*
January 22, 2008 18:29 IST

The slaughter in the stock market over the past seven trading sessions has wiped out what the Sensex had gained in more than seven months since July 2007.

In its seventh straight loss, the market benchmark Sensex on Tuesday lost as much as 2,273 points in intra-day trade and, despite a sharp recovery, settled 875.41 points below Monday's closing.

The 30-share index has lost 4,097.51 points in seven sessions since January 14. It was down as much as 5,874.35 points from its life-time high of 21,206.77 points, scaled on January 10, when it touched an intra-day low of 15,332.42 points on Tuesday. The Sensex had first touched this level on July 16, soon after it crossed the 15,000 level on July 6.

Incidentally, when the Sensex crossed 15,000, analysts were bullish on the Sensex crossing even the 50,000 level in the years to come. However, in the past eight days, ever since the downslide began, the Sensex has slipped from above 21,000 to below 16,000-point mark.

This plunge has also led to the mood turning bearish and some of the market players are predicting that some further "correction" might be in store.

"The downward spiralling in the market is likely to continue for the next three-four days. A lot depends on how the US market performs when it reopens today after a gap of three days," Taurus Asset Management Co's Managing Director R K Gupta said.


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## Bushroda

*Olympus and Contango explore India*
Ruth Liew
Financial Stadard, Australia
Thursday, 24 Jan 2008

Specialist fund managers Olympus Funds Management and Contango Capital Partners have joined forces to unlock the gates of Indias investment market to Australian investors.

Contango recently acquired a 64 per cent stake in Olympus, an Indian investment specialist fund manager.

Contangos mandate is to invest in emerging fund managers, and we fit into their criteria as a business. Were one of the few local fund managers focusing intently at emerging markets so this is a mutually beneficial partnership, said John Peirera, managing director Olympus.

In April 2007, Olympus launched the India Equities Fund, Australias first listed investment vehicle dedicated to Indian equities. After raising $75 million at its launch, the India Equities Fund now holds more than $110 million in assets, while its NTA has risen from 94.3c to $1.47 by the end of last year.

Olympus also possesses ties with Indian financial services conglomerate Kotak Mahindra, and together with Kotak plans to pave the way for Australian investors interested in capitalising on investment opportunities in India.

The Indian share market has performed extremely well and the Indian economy remains very strong. Although Australian investors are currently underinvested in emerging markets, we expect this situation to change as emerging markets, particularly in Asia, continue to outperform developed countries, said David Stevens, director of Contango.

For a small manager like us, [the partnership] is fantastic because we get a larger player coming in to provide stewardship and an injection of capital that we can use to expand our business, said Peirera.


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## Bushroda

*Renault-Nissan to Proceed With Rival to Tata's Nano*
By Michael McKee and Laurence Frost

Jan. 23 (Bloomberg) -- Renault SA and Japanese affiliate Nissan Motor Co. will proceed with building an ultra low-cost car to rival the Nano unveiled by India's Tata Motors Ltd., Chief Executive Officer Carlos Ghosn said.

"We'll go ahead with it,'' said Ghosn, who heads the second-largest French carmaker and Tokyo-based Nissan, in an interview with Bloomberg Television at the World Economic Forum in Davos, Switzerland.

Renault and Nissan are looking for sales growth in emerging markets to make up for stagnating demand in their home countries and the dollar's declines against the yen, which undermines the value of Nissan's North American earnings. The Nano, which Tata plans to price at about $2,500, may upstage Renault's no-frills Logan, which costs buyers about four times as much.

"You're going to see Renault and Nissan coming with a different car in the same price range for the Indian market,'' said Ghosn, adding that the model will go on sale "within a year and a half'' of the Nano's scheduled introduction in late 2008.

The 30-horsepower Nano, presented Jan. 10 at the Delhi motor show, will cut the entry price for aspiring car owners by more than half in India, one of the world's fastest-growing car markets. The Logan's price in Europe is 8,000 euros ($11,600).

Renault, Nissan and Bajaj Auto Ltd., India's second-largest motorcycle maker, have been conducting a feasibility study since late last year on possible joint production of a $3,000 car. Ghosn didn't give details on any factory site or partners.

*U.S. Forecast*

Mahindra & Mahindra Ltd., which builds the Logan with Renault, is studying ways to expand that partnership, Pawan Goenka, president of Mahindra's auto business, said at an industry conference today in Detroit, without elaborating, according to a report by the Wall Street Journal.

Nissan, Japan's third-biggest carmaker, foresees "moderate'' U.S. sales growth this year, even as the world's biggest economy suffers a slowdown, Ghosn also said. The company's U.S. sales in 2007 rose 4.8 percent to 1.07 million cars and light trucks, while its market share was 6.6 percent, placing it fifth in the U.S. and third among Japanese brands.

"We wanted to have more significant growth, but we have to adjust to take account of the fact that the economy is weakening,'' while a recession is less likely, Ghosn said. He reiterated a forecast that the U.S. market will shrink to 15.5 million vehicles this year from 16.1 million in 2007.

*Currency*

The Japanese company is 44 percent owned by Boulogne- Billancourt, France-based Renault, which doesn't sell vehicles in the U.S. Nissan accounted for almost two-thirds of the French carmaker's 2006 earnings.

The yen's increase against the dollar has hurt Nissan less than Japanese competitors because the company has more U.S.- based manufacturing, Ghosn said. The dollar fell 6.3 percent against the yen last year. That reduced the value of U.S. revenue converted into the Japanese currency.

"We're less affected than some of our competitors because we have the highest percentage of North American-built cars'' for the market, Ghosn said. "The percentage of cars exported from Japan to the U.S. for Nissan is relatively limited.''


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## Bushroda

*India Keeps Its Chin Up*
Ruth David, 
FORBES, NY
01.23.08, 9:50 AM ET

MUMBAI - You wouldnt be able to tell with share prices crashing down just about everywhere, but a survey has found that Indian investors are the most optimistic in the Asia Pacific region. An overwhelming 93% said they expected the overall investment sentiment to be better this year than it was in 2008.

The ING Investor Sentiment Index was released a day after the Indian markets halted trading because the benchmark Sensex index on the Bombay Stock Exchange hit a circuit filter when it fell over 10%.

The 30-stock Sensex has lost around 20% of its value in the last week of trading sessions, dragged down by global worries about a U.S. recession and selling by foreign institutional investors.

It recovered some value on Wednesday, ending up 4.8%, at 17,530.81, after the Fed rate cut. The Morgan Stanley India Investment Fund (nyse: IIF - news - people ), a closed-end fund, opened 4.7%, lower at $44.26, on Wednesday morning in New York.

Although the ING Investor Sentiment Index reveals that the subprime-led credit crunch and political uncertainties have made investors more cautious, core sentiment remained positive in the region as 2007 came to a close, said Eddy Belmans, INGs regional general manager, North Asia.

Indias economic boom will continue due to growth drivers like consumer spending touching new highs and a massive demand for products. The country's economy is expected to grow 8% this year, compared with 9.4% in 2007.

The ING survey, which didnt track the market collapses of the last few days, found that the overall sentiment going into 2008 was robust, with investors in India, Hong Kong, and the Philippines among the most optimistic, while those in Japan, Australia, New Zealand and Taiwan were the most pessimistic.

Notably, the previous quarters enthusiasm by Chinese investors has been dampened.

More than 70% of investors in Hong Kong, China, Korea and Singapore said the credit crunch had affected their investment decisions in the past three months, while in India, the figure was 14%.

A majority of the investors in 9 out of the 13 markets (not including India, Indonesia, Australia and New Zealand) think the credit crunch will affect investment in the next three months.

The number of respondents who expected the United States economy to deteriorate in the next three months far outweighed those who expected it to improve.


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## Bushroda

*Indian belly freight feeding DLC growth*
Air Cargo News, UK
23-Jan-2008 

DUBAI Logistics City, part of the worlds first truly integrated logistics and multi-modal transport platform within the giant Dubai World Central (DWC) urban aviation community being built in Jebel Ali, Dubai, will be looking at key prospects from Indias globalisation process, at Air Cargo India 2008 in Bombay, from 24-25 January.

India, which has been projected to be a world economic superpower by 2020 by analysts globally, as revealed that its exports will touch US$150 billion by 2008-09  a significant opportunity for Dubais trading hub proposition.

After the liberalisation of its economy in 1991, India followed with the opening up of its markets to global players and went on a fast track economic boom with an eight-nine per cent GDP growth per year, said Michael Proffitt (above), chief executive officer, Dubai Logistics City.

With 50 per cent of the worlds air cargo still being transported in the aircraft belly, Indias air cargo and aviation sector growth is linked to the Middle Easts economic boom, said Abdulla Al Falasi, DWCs director for marketing and corporate communications.

DLCs strategic geographical position and excellent infrastructure adds to Emirates push into India through connecting Dubai to most vital Indian cities. This will also enable Indian operators to use flights landing at the Al Maktoum International Airport, seamless transportation onward to other countries, added Falasi.


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## Bushroda

*Indian exports to reach $150 b this fiscal*
Wednesday, 23 January , 2008

New Delhi: India's exports will touch $150 billion in fiscal 2007-08 against the target of $160 billion due to a sluggish US economy and the rising rupee, said a senior official.

"Exports of $150 billion are certain this year. If there is a surge, they could even go up to $155 billion," Commerce Secretary G.K. Pillai told reporters on the sidelines of an event organised by the Confederation of Indian Industry (CII) here Wednesday.

Pillai also said that in the coming fiscal (2008-09), an export target of $200 billion could be achieved.

He indicated that certain promotional schemes targeted at exporters might be done away with due to their minimal benefit. He invited suggestions from the industry in this regard.

"Our trade policy is complicated. This discourages our exporters. The focus should shift from getting a number of approvals from various government agencies to self-certification. The majority should not suffer for misdeeds of a handful of unscrupulous exporters," he said.

"We should have only meaningful incentives to promote the competitiveness of our exporters."

Pillai urged India Inc to provide its inputs and feedback for the Krishnamurty Committee, which is expected to submit its report to Prime Minister Manmohan Singh by end of this month.

The prime minister set up the Krishnamurty Committee to evaluate and examine methods of providing relief to the rupee-hit exporters, especially in sectors such as textiles, leather and handicraft, which have been witnessing shrinking profits and job losses.

The ministry is likely to submit its first draft of the trade policy with the Department of Revenue within the next couple of weeks, Pillai said.


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## Bushroda

*India fastest growing partner*
VALERINA CHANGARATHIL
News, Australia
January 23, 2008 08:30pm

INDIA is now Australia's fastest-growing export market with energy and climate change solutions key opportunities for local businesses.
The nation buys more than $10 billion worth of our goods and resources, SA's senior trade commissioner (India and South Asia) Tareen Ayub said today.

An Indian trade delegation, here to coincide with the start of the fourth cricket Test between Australia and India tomorrow, was told energy and climate change solutions presented key opportunities for Australian businesses.

Mr Ayub, leading the 13-member delegation, said while much of the focus was on China, India should not be overlooked. "As our fastest growing exports market, feeding India's growth is essential," Mr Ayub said.

Consul General of India, Sujan Chinoy, told SA and Indian business leaders at a KPMG-hosted meeting trade relationships in Asia would drive the global economy. "Australia is in a unique position to interface between emerging and resurgent economies like China and India," he said.

With India needing about $580 billion in foreign investments to sustain growth momentum over the next five years, there was an opportunity for Australia to step in.

Atul Chandra, international operations president of India's largest private sector company Reliance Industries, which has committed $13 million to uranium exploration in SA and the Northern Territory, was part of the delegation.

While India was keen to buy Australian uranium, Federal Government policy precluded that as India was not a signatory to the nuclear non-proliferation treaty.

Konkan Railway Corporation's managing director Anurag Mishra said he saw a lot of "interesting possibilities". He had held talks with Robway Systems and others.

The University of Adelaide's Andrew Stoler said he was sceptical as Australia's trade ties with China had grown faster and it was difficult to make investments into India.


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## Bushroda

*The `Age of India' is upon us*
JOHN C. BERSIA
McClatchy-Tribune News Service
Wednesday, January 23, 2008

Hardly a breath passes in today's busy world without the mention of India. It is as if that emerging power's presence reaches in all directions, demanding a voice in every significant global conversation. Indeed, some have argued that the "Age of India" is upon us.

At the very least, the 21st century will witness New Delhi's continued rise as one of the principal centers of influence. As such, the community of nations should extend to India more of the benefits that its status warrants, including permanent membership in the United Nations Security Council.

Now, I am not bringing this up simply because British Prime Minister Gordon Brown made it an issue during his visit to India this week, although I was pleased to hear his comments. Both Brown and Indian Prime Minister Manmohan Singh called for India to have a permanent seat, largely because of the country's growing economic clout.

It is time.

I have long believed that the thinking behind the current U.N. Security Council configuration was appropriate for its moment in history, that is, the period following World War II. In the interim, however, several additional nations have climbed to prominence. The old order should change, even though that could dilute the power of the permanent five: the United States, Russia, China, Britain and France.

In considering candidates, India is a logical one, as are Japan, Brazil, Germany, Nigeria, Mexico, South Africa, Indonesia, Egypt and perhaps others. One appealing proposal would increase the total number of permanent seats to 10, while adding four more revolving positions. In the end, though, an acceptable modification of the U.N. Security Council could happen in several ways.

Brown also discussed the benefits of having New Delhi join an international group - the Paris-based Financial Action Task Force - that combats money laundering and terrorist financing. India's long experience with political violence, combined with its increasing role in the global economy, offers a compelling reason for its participation.

Finally, Brown shared words that no doubt resonated with many Indians when he stressed that Britain - the former colonial power in India until 1947 - was no longer the dominant partner in their relationship. Even though some might argue that he was stating the obvious, it was no small gesture to emphasize the new reality. A dose of humility goes a long way in building international ties - a lesson that President George W. Bush once advocated but appears to have essentially forgotten.

"Ours is a strategic partnership of equals. A confident, modern, 21st-century India and a confident, modern, 21st-century Britain," Brown said.

Such respectful dialogue creates the basis for mutually beneficial, enduring cooperation, whether the coming era is the "Age of India" or an environment where several heavyweights - including the United States, China, Europe and India - share the stage.


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## Bushroda

*A waking giant tugging hard at its chains*
By Martin Wolf
Financial Times, UK
January 25 2008

India is not China. Its development path has been very different and, so far at least, its global impact far smaller. But it is now more open to the world economy than at any time in its post-independence history and more economically dynamic than ever before.

The opening has been unambiguously beneficial to India, and it will be beneficial to most of the rest of the world. But it will also create substantial challenges for both sides.

The differences between the two giants' integration into the world economy are indeed large.

First, in 2006 China was the world's third largest exporter of merchandise products (after Germany and the US) and the eighth largest exporter of commercial services, while India's rankings were 28th and 10th respectively. Thus, even in the latter category, where India's success is noteworthy, its exports of $74bn lagged behind China's $91bn.

Second, in 2006 China generated 8 per cent of world exports of goods and 3.3 per cent of world exports of commercial services. India's shares were 1 per cent and 2.7 per cent respectively.

Third, both countries are growing more open to world trade. The ratio of merchandise trade to GDP for India jumped from 14 per cent in 1990 to a forecast level of 34 per cent in 2007. But China is far more open: the rise over the same period was from 24 per cent to an extraordinary 66 per cent. India's trade ratio last year was slightly higher than China's as recently as 1999.

Fourth, China is running vast trade and current account surpluses, while India is running modest deficits: in the World Economic Outlook published last September, the International Monetary Fund forecast China's current account surplus for 2007 at close to $380bn, or 12 per cent of gross domestic product, and India's at minus $23bn, or minus 2 per cent of GDP.

Fifth, both countries have accumulated substantial foreign currency reserves. But at the end of October 2007, China's reserves were worth $1,455bn (45 per cent of GDP), while India's were worth $265bn at the end of November (24 per cent of GDP).

Sixth, both countries have managed exchange rates, but given the scale of the reserve accumulations, China's is much more heavily managed than India's. Since July 2005, when the renminbi's exchange rate was made more flexible, the currency has appreciated by 14 per cent against the dollar.

Since a trough in July 2006, India's rupee has appreciated 20 per cent. Yet, over the past decade, real exchange rates have remained reasonably stable for both countries.

Seventh, both countries enjoy substantial inflows of foreign direct investment, though China's are far bigger. China started receiving significant inflows long before India and is forecast in 2007 to receive gross inflows of $96bn (3 per cent of GDP) against India's $19bn (1.7 per cent). But India's inflow is up from only $3.6bn in 2000 (0.8 per cent of GDP), when China's was already 3.2 per cent of GDP.

Finally, both countries are making substantial direct investment abroad, with China's outflow twice as big as India's last year. But India's direct investment abroad, estimated at $13bn last year, up from just $2.5bn in 2005, is already almost as large as its imports, estimated at $18.7bn. China's exports of FDI, estimated at $26bn last year, are far smaller than its imports of $96bn.

India's opening to the world then remains well behind China's. But since the foreign exchange crisis of June 1991, policy has moved decisively towards greater openness. This shift has helped transform economic performance.

A report by Goldman Sachs published a year ago (India's Rising Growth Potential, January 22 2007) argued that India's sustainable growth potential had reached 8 per cent a year. An important element in this higher sustainable growth rate has been the improved rate of growth of so-called "total factor productivity" (TFP) - a measure of the efficiency with which factors of production are used.

The growth of TFP has jumped from a rate of minus 1 per cent a year in the very early 1980s to 2 per cent a year in the 1990s and an estimated 3.5 per cent in the most recent years.

As Goldman Sachs noted, increased openness - in particular the decline in barriers to trade from the prohibitive tariffs as high as 200 per cent to below 15 per cent - has played a big role in generating the more rapid rate of improvement in productive efficiency.

The opening has improved Indian companies' access to ideas, inputs and technology, increased competition, allowed efficient companies to expand operations and encouraged a shift in employment to more productive sectors.

Yet this is not the end of the story, either for India or the rest of the world. Barriers to trade remain quite high. Integration into global capital markets is still to be completed. Further reform and sustained improvement in infrastructure will be essential.

As confidence grows, already demonstrated in Indian businesses making bold acquisitions abroad, the giant's role in the world economy is bound to rise. But it is also likely to remain very different from China's, with a far heavier concentration on commercial services, finance and sophisticated manufacturing.

Meanwhile, a rising India will have a big impact on the world, as a provider of cheaper products and services, as a destination for fixed investment and as a source of growing demand, particularly for resources.

Today, energy demand per head is a mere 10th of the high-income countries' level. But, according to the "reference scenario" in the International Energy Agency's latest World Energy Outlook, India's primary oil demand will rise from 2.6m barrels a day in 2006 to 6.5m by 2030. This would still be well behind China's 16.5m, although the forecast growth rate of 3.9 per cent a year is slightly higher than China's.

India's decision in the early 1990s to embrace the world economy, as part of a wider embrace of the market economy, has led to an accelerating opening up of its economy. While its impact on the world is still relatively modest, it will continue to grow.

The impact on India itself is less modest and growing fast. Both sides - India and the world - will need to get used to the experience: they will grow much closer together in the years ahead.


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## Bushroda

*Indian Automaker Buys British Icons, Hoping For Global Presence*
CNNMoney
Jan. 25, 2008 (Investor's Business Daily delivered by Newstex) --

The British lorded over India for years. Now one of India's biggest companies -- Tata Motors -- wants to play Indian Raj in Great Britain.

Tata Motors TTM is seeking control of two of Britain's most prestigious auto brands -- Jaguar and Land Rover. If a deal with owner Ford F is completed as expected, Tata would oversee 16,000 employees in plants and offices in five cities in the U.K.

Meanwhile, at home in India, Tata Motors is out to rule the mass market. It's gearing up to provide the auto equivalent of a chicken in every pot, at least for the millions who make do on two-wheelers.

Tata unveiled its natty, five-seat, 30-horsepower Tata Nano at the recent Auto Expo in New Delhi. Priced at $2,500, it will be the world's cheapest car. It's slated to go on sale in India later this year.

Tata might take over Ford's struggling premium brands in the UK even earlier. A deal valued at about $2 billion is expected to be announced sometime this quarter.

If anyone can pull off making a go of two polar opposite businesses, Tata can, observers say.

"Tata has a knack for being well-organized and planned," said Amer Kahn, analyst with Lusight Research. "These are necessary steps to becoming a global automotive powerhouse, and I think that's what they have in mind."

In a few years, Tata envisions exporting the Nano to select markets in Asia, Africa and Eastern Europe.

Tata already is a household name in India, where the Tata family business dynasty was founded in 1868. Tata Motors is part of the Tata Group, now a huge conglomerate with companies that deal in things ranging from tea to steel.

The parent Tata Group planted its first stake in Britain eight years ago when it bought the English icon Tetley Tea. Last year, it acquired the Anglo-Dutch steel giant Corus.

The big question for Tata's Nano is how soon it will become profitable. At $2,500 for the no-frills basic model, margins likely will be slim, especially considering the high price of raw materials, such as steel.

But Tata is working on line extensions with added amenities, which would push up prices. Also, fiscal incentives from the West Bengal government, where the Nano plant is located, "will materially alter the viability and expected financial returns from the project," wrote Deutsche Bank (NYSEB) analyst Srinivas Rao.

At the other end of the spectrum, cost savings will be key to making Ford's now-struggling luxury car business in England more profitable, analysts say.

"With (Jaguar and Land Rover) having combined revenue of $13 billion, a relatively small improvement in profitability would translate into significant benefits for Tata Motors," wrote analysts in a report for Mumbai-based IDFC-SSKI Securities.

While Land Rover is holding its own, Jaguar sales continue to plummet. Jaguar sales through most of 2007 fell almost 20% in Europe and 26% in the U.S. from 2006 levels.

"It'll take additional investment from Tata to have a turnaround," said Standard & Poor's (NYSE:MHP) analyst Efraim Levy. "Ford has been working on turning around Jaguar for a decade. The brand has a certain cache, but it also has been dinged by the lack of success."

"But sometimes it takes a fresh perspective and fresh cash," Levy added.

Tata dominates the commercial vehicle market in India. Tata-branded trucks, including the hit $5,000 Ace pickup, are ubiquitous.

In passenger cars, Tata is a distant second to market leader Maruti Suzuki. Tata Motors has said that a slowdown in its car sales over the past several months was due in large part to higher interest rates on auto loans. But analysts noted that unlike rivals, Tata also came up short on new products.

That's expected to change in the coming year with the rollout of new models and a make-over of its top selling Indica compact car.

The princely Nano will knock the $5,000 Maruti 800 from its throne as the smallest and lowest-priced car in India.

"I wouldn't be surprised if Tata is completely swamped with orders for this car," said Khan.

Tata's light truck sales have been growing at double-digit rates the past five years. Large-truck sales have been spottier. With concerns about the global economy, sales in larger trucks have slowed.

Overall revenue in the quarter ending Sept. 30 still was able to grow 23% over last year to $2.1 billion. Earnings rose 17%, to 34 cents a share.

After jumping 45% last year, analysts polled by Thomson Financial estimate Tata Motors' earnings this fiscal year ending in March will grow only 10%, to $1.38 a share. They expect profit the next year to grow 20%.

Despite trauma in parts of the developed world, the Indian economy continues to steam ahead. It's now in its third year of 9% growth.

A couple of other automakers in India say they might try to develop a car as small as the Nano, but it likely would be several years before one hits the market. Meanwhile, foreign auto makers such as Honda are expanding their compact-car presence in India, though with sizes and prices that are still way above the Nano's. They would target India's rising middle class.

Tata expects to pull in first-time car buyers from a lower income pool, largely from the huge motor bike market, which overruns the car market by a ratio of 8 to 1. More than 8.4 million two wheelers were sold in India last year, compared with 1.2million cars.

Tata plans an initial annual production run of 250,000 Nanos, expandable to 350,000 with a third shift. Tata has said that it could sell 1 million Nanos by 2010. Tata sold fewer than 200,000 cars last year.


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## Bushroda

*Mahindra launches Scorpio and Pik-Up range in Brazil*
Trading Markets, CA
Thursday, January 24, 2008; Posted: 04:13 PM

Jan 24, 2008 (Datamonitor via COMTEX) -- MAHDY | news | PowerRating | PR Charts -- Indian automobile manufacturer Mahindra & Mahindra has launched its Scorpio SUV and its Pik-Up range in Brazil, in partnership with Bramont-Montadora Industrial e Comercial de Veiculos.

The models introduced in the Brazilian market are equipped with the 2.6-liter Mahindra common rail engine that delivers 110 horse power. The models are available with 4X2 and 4X4 electronic shift on the fly and the engine conforms to Euro III emission norms. From 2009, Mahindra vehicles will be offered with a Euro IV compliant engine.

Pravin Shah, executive vice president for international operations, said: "Mahindra has carved a distinct niche for itself in markets across the globe with its unique combination of rugged utility and style. The Brazilian economy and automotive industry is highly evolved and has strategic importance for Mahindra."


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## Bushroda

*Shifting the balance*
*Chinese and Indian capitalism*

The Economist, UK
Jan 24th 2008

FIVE years ago, Tarun Khanna, an Indian-born professor at Harvard Business School, grabbed attention with an article in Foreign Policy magazine speculating that India might eventually overtake China. Co-written with Yasheng Huang, a Chinese-American scholar at the Massachusetts Institute of Technology, the article argued that India's economic model offers more freedom to entrepreneurs which could help the country outpace its fellow Asian giant in the longer term.

From a macroeconomic viewpoint, this argument was rather implausible, except in the extremely long term, for China's economy is already three times the size of India's. At the corporate level, though, it made more sense: as its recent unveiling of the world's cheapest car showed, companies such as Tata Motors promise to make the global grade rather faster than their Chinese counterparts.

With his new book Mr Khanna has returned to the topic of entrepreneurship in Asia's emerging giants. But he has dropped the idea of India outpacing China and replaced it with thoughts about the potential for co-operation between the two countries. Their social and economic systems are vastly different, as he shows in admirably detailed but chatty studies of companies and cities in both places. But they have strengths that could be complementary, he thinks, and he argues that foreign multinationals need to start thinking about the countries together rather than separately.

Unfortunately, the book's enthusiasm for Sino-Indian co-operation is rather unconvincing. Trade between the two countries is rising fast, as Mr Khanna points out, but from a very low base: it is only a tenth as large as trade between China and Japan, and a fifth as large as that between China and South Korea. Chinese companies want to learn about Indian software and outsourcing, just as Indian companies want to learn about Chinese manufacturing prowess. But then companies in both countries are also eagerly studying practices and skills in Europe, America and Japan too: there is nothing particularly special about the flow of people and ideas between India and China.

Politics, too, plays a part. Mr Khanna makes much of the opening of a border crossing high in the Himalayas to trade in 2006, for the first time since the Sino-Indian border war of 1962. Yet that crossing does not connect any of the large areas that are still disputed between the two countries, and only a few categories of goods may be traded through the reopened area. Relations between China and India have indeed been getting warmer in recent years, but the pair still harbour strong and understandable suspicions about one another: they are natural rivals, whether in Asia as a whole or in the countries squeezed between them, as the book's excellent section on Myanmar demonstrates.

Nevertheless, although the book's overall thesis feels as implausible as that of Mr Khanna's 2003 Foreign Policy article, &#8220;Billions of Entrepreneurs&#8221; remains well worth reading. The eye of this business-school professor for interesting stories is sharp and he offers illuminating explanations of why India and China work in the ways that they do.


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## Bushroda

*Will India And China Destroy The Planet Through Global Warming--Or Save The Planet By Forcing The West To Reduce Carbon Emissions?
*
Businessweek
Bruce Nussbaum 
January 24

I went to a wonderful dinner on Wednesday night with the theme of Indias Intrernational Agenda. Late in the conversation, about 10:15PM someone asked the very astute Minister of Finance Palaniappan Chidambaran, about an article in the FT saying that if India and China continued to modernize along the lines of the West, with tens of millions of cars, the resulting carbon emissions would, in effect, cause global warming on a scale that would destroy most of the earth. India and China, in short, needed to find another, better way, of growing.

Wow, the reaction by the Minister of Finance was fierce. He said energy and economic growth are linked and India has the right to grow and the right to consume energy. He said it is unfair to ask developing countries not to use as much energy as the West. India is entitled to grow and to consume energy that emits carbons.

The Indian Finance Minister went on to say that India has agreed to keep its maximum per capita carbon emissions just below that of the West (I believe that is the metric he used. If it isnt, will folks in India let me know the precise measurement). If the West lowers its emissions, so will India. Indias per capita carbon emissions are currently way below that of the US or Europe so they will be growing strongly as India grows economically.

Of course, the Indian Finance Minister is completely correctIndia and all emerging economies have the right to grow and must grow. The challenge ahead for all countries, the US, India, China, Europe, is to change the way we all grow to cut back on carbon emissions. There are huge economic opportunities ahead in this. We can grow our way out of our carbon conundrum. Who will build the first 100 mpg car? The first mass-produced all electric car? The electric jet plane? The newest public transportation system? The lowest priced video-conferencing system that cuts back on travel?

The hybrid Prius outsold the old Ford Explorer last year in the US, a sign that people are waking up (at least waking up to $3 a gallon oil). Transforming the US carbon economy which is sending its wealth and ownership overseas to non-democratic nations is both an economic and foreign policy priority.

And dont bother asking India and China to do what the West wont. They wont. Pressuring them to cut back can only lead to trouble.


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## Bushroda

*Modern India a new center of economic power*
*NATION READY FOR NEW ROLE IN GLOBAL AFFAIRS*
John C. Bersia
01/24/2008 03:34:11 AM PST

Hardly a breath passes in today's busy world without the mention of India. It is as if that emerging power's presence reaches in all directions, demanding a voice in every significant global conversation. Indeed, some have argued that the "Age of India" is upon us.

At the very least, the 21st century will witness New Delhi's continued rise as one of the principal centers of influence. As such, the community of nations should extend to India more of the benefits that its status warrants, including permanent membership in the United Nations Security Council.

Now, I am not bringing this up simply because British Prime Minister Gordon Brown made it an issue during his visit to India this week, although I was pleased to hear his comments. Both Brown and Indian Prime Minister Manmohan Singh called for India to have a permanent seat, largely because of the country's growing economic clout.

It is time.

I have long believed that the thinking behind the current U.N. Security Council configuration was appropriate for its moment in history, that is, the period following World War II. In the interim, however, several additional nations have climbed to prominence. The old order should change, even though that could dilute the power of the permanent five: the United States, Russia, China, Britain and France.

In considering candidates, India is a logical one, as are Japan, Brazil, Germany, Nigeria, Mexico, South Africa, Indonesia, Egypt and perhaps others. One appealing proposal would increase the total number of permanent seats to 10, while adding four more revolving positions. In the end, though, an acceptable modification of the U.N. Security Council could happen in several ways.

Brown also discussed the benefits of having New Delhi join an international group - the Paris-based Financial Action Task Force - that combats money laundering and terrorist financing. India's long experience with political violence and its increasing role in the global economy offer a compelling reason for its participation.

Finally, Brown shared words that no doubt resonated with many Indians when he stressed that Britain - the former colonial power in India until 1947 - was no longer the dominant partner in their relationship. Even though some might argue that he was stating the obvious, it was no small gesture to emphasize the new reality. A dose of humility goes a long way in building international ties - a lesson that President George W. Bush once advocated but appears to have essentially forgotten.

"Ours is a strategic partnership of equals. A confident, modern, 21st-century India and a confident, modern, 21st-century Britain," Brown said.

Such respectful dialogue creates the basis for mutually beneficial, enduring cooperation, whether the coming era is the "Age of India" or an environment where several heavyweights - including the United States, China, Europe and India - share the stage.


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## Bushroda

*Mumbai showcased at Davos as future global financial centre*
Thursday, 24 January , 2008, 18:15

Davos: Transacting 95 per cent of the stocks of an economy projected to become the world's third largest, the city of Mumbai was Thursday showcased before businessmen and investors gathered in Davos as a future world financial centre to rival London and New York.

"With $60 billion earmarked to develop the Mumbai Metropolitan Region, and if all other things fall into place, then a world financial centre has to come to Mumbai," said Maharashtra Chief Minister Vilasrao Deshmukh told investors at a meeting held on the sidelines of the World Economic Forum (WEF).

He was backed up Aviation Minister and Maharashtra politician Praful Patel and Sunil Bharti Mittal, CEO of Bharti Enterprises and head of the Confederation of Indian Industries.

*"From a size of $1 trillion today, the Indian economy is projected to grow $30 trillion by 2040," Mittal said.*

"There is no reason why Mumbai cannot stand alongside New York, London and Singapore as a world financial centre in the future," he pointed out.

"India deserves a global financial centre," Mittal said, adding that the economy was backed by "regulation, framework and institutional mechanisms".

Patel, Deshmukh and Mittal are in an 80-strong Indian delegation to the WEF, the largest team at the annual business event that has drawn some 2,500 business and political leaders from 88 countries this year.

Mittal contrasted India's private sector fuelled growth with that of China.

He said Shanghai was being developed as a world financial centre by China "which as a state was determined to make acquisitions outside China".

Although aware of the challenges of poor infrastructure the Indian team has highlighted progress made in telecommunications and information technology, as well as urban development plans involving tens of billions of dollars, to push Mumbai's case before foreign investors here.

"The strength of the Indian economy is its future potential," said Praful Patel but he acknowledged that the infrastructure sector could be further opened up to foreign investors.

"With as many as 46 major international companies having opened their offices in Mumbai in the last year alone, he said: "We certainly deserve to be in the same league as London, New York and Singapore".

Indian households had spent $13 billion on foreign financial products in 2007 and the figure is set to grow to $48 billion in 2015 and $80 billion if the economy grows at 9 per cent, said Sanjay Nayar, CEO of Citi India.


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## Bushroda

*Michigan looks to India to attract businesses*
TOM WATKINS
Northville Record, MI 

Like the trick card game three-card Monte, while the world has kept its eye on China, India has grown up and may be the economy to watch as the 21st century unfolds.

India is the most populous democracy in the world with more than 1.2 billion people. This is only slightly fewer people than the communist Peoples Republic of China. India is growing economically along with many Asian nations and becoming a global player in the 21st century. India has a long and rich cultural and entrepreneurial history. Today it is the world's 12th largest economy due to economic reforms put into place in the early 90's.

After the fall of the Berlin Wall, many Asian countries opened up their economies and brain power to the world. With the end of a quasi-socialist government, with tight controls over foreign trade and investment and private sector business activities, India's economy began to take off. Today, its economy is among the fastest-growing in the world with a GDP growth of nearly 10 percent in 2006-07.

India's growth has been in the shadows of China's ascending economy, which grew by a blistering double-digit rate in the past 20 years. Being in the shadow of China, whose economy seems to be on steroids, makes India's growth seem anemic in comparison.

Yet India has two advantages over China. It has many English speakers and a democratic government.

While they have made great strides since gaining independence from British rule in 1947, many Indian people still suffer from poverty, illiteracy, hunger, religious strife, environmental degradation and the hangover from a harsh and discriminatory caste system.

It seemed not that long ago that the only time you heard of India was when you were seeking help with a computer problem. Today the country is bursting with knowledgeable workers that are seeking their equivalent of the American Dream. As Thomas Friedman points out in his often-quoted book, The World Is Flat, India has capitalized on its educated, English-speaking people and technologically-prepared professionals to become the English-speaking world's outsourcing capitol and a ripe destination that is bearing fruit for global corporations.

*State to cash in on India*

The Detroit Regional Chamber and Automation Alley have led trade missions to India to continue attracting new businesses to Michigan, as well as to continue giving Detroit businesses an opportunity to expand into India's fast-growing market. Another trade mission will be in taking place this month.

"The vision of both, Indian companies doing business here and Detroit companies doing business there, is the basis for the Partnership's trip," said Detroit Regional Economic Partnership Executive Director John Carroll. "We are looking to build on the successes of the Partnership's 2006 mission to India that produced new business for the Detroit Region." The results included multiple new strategic alliances between Indian and U.S. companies.

The Center for Automotive Research is teaming up with Automation Alley and the Detroit Regional Chamber to lead this month's trade mission to the India Auto Expo 2008. It is for automotive suppliers and communities interested in developing business opportunities in India.

An Indian car company that many here in the Motor City have never heard of, Tata Motors, is about to break onto the world scene. Ford Motor Co. could complete the sale of its Jaguar and Land Rover units to Tata early in 2008, giving them a global brand and dealer network.

India continues to gain momentum as it struggles to educate more of its rural population and increase the standard of living that is mere subsistence for hundreds of millions of its people. They have come far - but have a long way to go.

Like the con game three-card Monte, while the world watches China, India could drive away with the economic consolation prize as the century unfolds. It would behoove us to make sure Michigan finds ways to cash in, as well.


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## Bushroda

*India takes sourcing to new heights*
By Vivian Yeo, ZDNet Asia
Thursday, January 24 2008 06:03 PM

The number of outsourcing contracts in the Asia-Pacific region as well as contract values have risen for a second consecutive year, according to a report by consulting agency TPI.

The TPI Index, released Wednesday, revealed that the region's outsourcing contracts contributed US$12.8 billion to the global outsourcing market in 2007, a 30 percent increase over 2006. The quarterly index analyzes global outsourcing contracts valued over US$25 million.

Annual contract values also rose by 13 percent year-on-year--nearly double that of the global average.

Indian companies were the main engine behind the growth, accounting for US$4.9 billion, up from US$2.7 billion in 2006. Outsourcing contracts out of Australia contributed a stable US$3.5 billion, while those from China registered a US$1.4 billion increase over 2006 to US$1.9 billion.

Arno Franz, partner and managing director for TPI Asia-Pacific, noted that the growth from China had been largely due to a single telecommunications mega deal; on the other hand, India's growth was championed by its bolstering economy.

"The Indian industry in particular has found outsourcing to be a viable tool to improve performance and drive growth in market share," said Franz. "With increased competition among Indian corporations and the potential privatization of public sector organizations in the next few years, we expect to see this level of activity continue through 2008 and beyond."

At a time when mega outsourcing contracts are far and few between, the Asia-Pacific region witnessed nine deals in 2007--four alone in the last quarter. TPI cited the tie-up between India's third largest wireless operator Vodafone Essar and IBM, as one of the mega deals signed last year.

Indian IT service providers also gained on their global rivals.

Their share of global contracts increased from 6 percent in 2006 to 9 percent in 2007. In the Asia-Pacific region, they held a market share of 16 percent last year, up from 11 percent in 2006.

*Asia's BPO market going strong*

According to TPI, the Asia-Pacific region recorded the highest growth (101 percent) in business processing outsourcing (BPO) contracts last year. In comparison, the BPO of that scale in the Americas fell by 28 percent, while that in the EMEA (Europe, Middle East and Africa) region increased by 24 percent.

In absolute dollar terms however, the BPO market in EMEA outweighed the other two with a total worth of US$12.45 billion; the BPO markets in the Americas and Asia-Pacific were worth US$8.62 billion and US$2.09 billion, respectively.


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## Bushroda

*Is Booming India Immune to a U.S. Downturn?*
By MADHUR SINGH/NEW DELHI
TIME
Thursday, Jan. 24, 2008 

Until last week, there was at least some evidence to back a belief that India's stock markets would continue to defy gravity even as fears of a U.S. recession sent indexes plummeting across Europe and Asia. As recently as January 8, India's benchmark Sensex crossed the 21,000 mark, up 1,000 points from a previous record of 20,000 in just 49 days. Investors elsewhere may have been bracing for a fall, but in India their optimism was at a dizzying peak. That much was evident when a much-anticipated initial public offering by Reliance Power  India's largest ever at $2.9 billion  was oversubscribed within 60 seconds of opening on January 15, and oversubscribed 73 times by January 18. It looked like there was only one way for the bourses to go, and equity trading had risen to the top of the list of lucrative career choices.

The market's fall, like its rise, was sudden and steep. The Sensex lost 13% in a week starting last Wednesday, which, as the daily Hindustan Times reported, amounted to $375 billion  or 2.2 times the country's budget. "Brokers were left gasping for breath," says Jyoti P. Sharma, a New Delhi-based day trader. "It gave us no time to recover, or even think of cutting our losses." As retail traders across the country got a severe fright, the Times of India reported on its front page that a stock broker had attempted suicide on Tuesday, and "doctors reported a sudden spurt of patients complaining about cardiac problems in Mumbai and elsewhere."

It wasn't as if traders and analysts could claim to have been caught unawares. Even though Indian markets had continued to perform well despite the global downturn, there was good reason to doubt that India could remain immune. "India is just 2 percent of the world's economy," says Ramdev Agrawal, Director, Motilal Oswal Financial Services. "If everyone else is experiencing a meltdown, you will too." Dhirendra Kumar, CEO of Value Research, a mutual-fund research company, adds, "In today's world of digital connectedness, we all talk the same language and watch CNBC. Not only are Indian and U.S. equity markets interconnected, the key drivers of our emotions and psychology are also the same."

Analysts also agree that India's market correction is driven more by domestic factors than by the U.S. credit crisis. India's equity markets were already short of cash with huge amounts locked into the giant Reliance Power IPO, and margin calls worsened the situation. Many also believe that a correction was overdue as the market's hasty rise was unsustainable. Finance Minister P. Chidambaram told traders on Monday: "There is no reason to allow the worries of the western world to overwhelm us. Our economy is very different from the economies of some developed countries which are facing some stress. Our economy is a strong economy, our corporate sector is very strong. If the economy will grow this year at 8.9% and is expected to grow at 8.5% next year, the market sentiment should be a very positive sentiment."

Nevertheless, it was only after the Federal Reserve cut interest rate by 75 basis points to 3.5 per cent on Tuesday that the Sensex recovered some of its losses, rising 864.13 points on Wednesday to end the day at 17,594.07. While a U.S. slowdown may not affect India's 8%-plus growth, Indian equity markets may not be able to curtail their exposure. "The [Indian] markets remain vulnerable to the extent that FIIs [Foreign Institutional Investors] with exposure in the U.S. as well could pull out to consolidate and compensate for their losses in the U.S.," says Sharma, adding, "Fed rate cuts won't help. Unless employment and demand picks up in the U.S., things will remain gloomy."

But not everyone is as pessimistic. "The Indian corporate sector is strong and buoyant," says Agrawal. "The Indian market alone can give a 20-22% return on equity. Things are bound to improve, the question is: How soon?"


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## Bushroda

*India Regional Hub for Korean Firms*
By Nagesh R. Parthasarathi, Indian Ambassador to Korea
Korean Times, South Korea

India and the Republic of Korea enjoy age old and time tested friendly relations. The legend of a Princess of Ayodhya who traveled to Korea in the 1st century A.D. to marry King Kim Suro perhaps laid the foundation of cultural and spiritual values that we share today.

The enduring philosophy of Lord Buddha, which has influenced the lives and thoughts of the peoples of our two countries, has also provided a strong link. India was the chairman of the nine-member U.N. Commission set up to hold elections in Korea in 1947.

The work by the 60th Indian Field Ambulance Unit of the Army Medical Corps during the Korean War symbolized our friendship. India was also chosen as the chairman and executive agent of the Neutral Nations Repatriation Commission and was entrusted with the responsibility of organizing an Indian Custodial Force to resolve the difficult issues concerning the prisoners of war and their repatriation.

India and Korea established consular relations in 1962. In 1973, the relations were upgraded to ambassador-level. Prime Minister of India P.V. Narasimha Rao paid the first-ever visit by an Indian prime minister to Seoul in September 1993.

The visit paved the way for Korean conglomerates such as Samsung, Hyundai and LG to enter the Indian market.

The state visit of President Roh Moo-hyun to India in October 2004 proved to be a milestone in enhancing bilateral relations.

During his visit, the two countries decided to establish a ``Long-term Cooperative Partnership for Peace and Prosperity.'' Following the state visit of President A.P.J. Abdul Kalam to Seoul in February 2006, India-Korea relations entered a new vibrant phase.

The year 2007 has been successful year for India-Korea relations.

Economic complementarities and political convergences have further elevated this close relationship to a higher pedestal.

There were a number of important bilateral visits including the visits of Song Min-soon, foreign minister, to India to attend the South Asian Association of Regional Cooperation meeting held in New Delhi in April 2007 and Indian External Affairs Minister Pranab Mukherjee's visit to Korea in September 2007 to co-chair the fifth Joint Commission Meeting.

There is a growing desire to strengthen the defense and security cooperation which is reflected by the first ever visit of Kim Jang-soo, minister of national defense, to India in June 2007.

Both India and Korea have constituted their Parliamentarians' Friendship Associations. Visits of a number of other political and business delegations during the year contributed to further strengthening of relations.

President-elect Lee Myung-bak visited India in April 2007.

During his visit, he had a very fruitful meeting with the Indian President. The two leaders agreed on the need to launch a ``World Knowledge Platform'' to optimize core competencies of participating members.

Lee addressed an interactive luncheon meeting with the business leaders, hosted by the Confederation of Indian Industries, visited a premier engineering institute, the Indian Institute of Technology in New Delhi, and visited the IT city of Bengaluru.

Bilateral trade has more than quadrupled over the last five years and has crossed the $10 billion mark, well ahead of the target date of 2008.

Negotiations on the Comprehensive Economic Partnership Agreement, which is an FTA plus agreement, are proceeding smoothly and only a few outstanding issues remain before finalizing the draft agreement.

Similarly, Korea is among the important investors in India. With the investment of POSCO ($12 billion), Korea is likely to emerge among the top investors in India.

However, compared to the potential that exists, India-Korea trade and investment are still miniscule. Tremendous potential exists for Korean investment in sectors like energy, automobile, food processing, pharmaceuticals and major infrastructure projects.

To facilitate investment, the Department of Industrial Policy and Promotion in the Ministry of Commerce and Industry in India has set up a Korea desk to help investors from Korea.

India would not only provide a large market, but would serve as a regional hub for Korean companies to access markets in neighboring countries and in the Middle East.

India's rapidly expanding economy and our big market makes India an attractive destination for Korean investors. The government of India is pursuing reforms and liberalization not out of any compulsion but out of conviction and consensus.


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## Bushroda

*India to be amongst top three generic makers in the world*
Hitesh Gajaria 
Express Pharma

By 2020, global integration of most sectors in the world economy would be much more pronounced, and the pharma industry will not be an exception. In fact the Indian pharma industry, which currently has strong linkages with the global pharma market, will become even more strongly integrated. Globally the pharma market is undergoing a transformation led by change in demand patterns, realignment of supply chains, and global regulatory shifts. In order to predict the state of the Indian pharma market in 2020, it is useful to understand the current global environment of the pharma market and its key trends and analyse the implications that these factors will have on the global as well as on the domestic pharma market.

*Global pharma industrycurrent scenario*

The global pharma industry, valued at $ 607.9 billion in 2006, has been growing at a CAGR of around six-seven percent over the last three-four years. In 2006, the top three regionsNorth America, Europe and Japan accounted for approximately 87 percent of the total pharma market. In terms of growth, the Latin American market, which constitutes approximately five percent of the total market, grew by 13 percent. Asia, Africa and Australia collectively account for 8.5 percent of the market and achieved the second highest growth rate of 9.8 percent. Approximately 31 new molecules were launched in key global markets in 2006 and with over 2,075 molecules under development; the global R&D pipeline has grown by over 35 percent since 2003.

*Global pharma industrykey trends*

* Declining R&D productivity

Even though the global R&D pipeline has grown at an attractive rate, the industry is facing severe pressure on account of reducing number of blockbuster drugs coming into the market coupled with declining R&D productivity on the back of steeply rising drug discovery and development costs, as well as increasing sales and marketing expenses.

* Increasing spread of generics

There is global shift towards use of generics as governments worldwide are under tremendous pressure to curtail steeply escalating healthcare budgets. The global generics market was valued at $ 77 billion in 2006, split 60:40 between emerging and regulated markets. The US market has a share of over 28 percent of the world's generics market and is still by far the largest generics market. In Europe, Germany and UK have the highest generics penetration rate by value, of around 23 and 20 percent respectively, whereas in Japan, generics accounts for only five percent of the total market by value

* Increasing outsourcing

Multinationals are increasingly outsourcing activities such as drug development and manufacturing to low cost destinations and are increasing their focus on core functions of drug discovery, sales and marketing and brand management.

*The changing paradigms*

Driven largely by the increasing and ageing population globally, prospering economies, increased life expectancy and significant demographic shifts, the global pharma industry is expected to record a healthy growth of around seven to eight percent over the next decade or so. This period will also witness a major shift from the developed markets to emerging markets, from primary care classes to niche therapies and from chemistry to biotech.

Until now, a major share of the demand for drugs has been coming from North American and European regions, the two largest pharma markets of the world. However, these markets have now maturing and with the economic shifts, rapidly changing demographics as well as the significant reforms in the Asian regulatory regimes, this region is set to surpass North America and Europe to become the most lucrative drug market in the world by 2020.

According to the Economist Intelligence Unit, Asia's share in world GDP will increase from 35 percent in 2005 to 43 percent in 2020. A significant portion of this will be contributed by the two fastest growing economiesIndia and China. The expected economic prosperity in Asia will trigger many positive factors for the healthcare industry such as higher standards of living, increasing per capita disposable income and the improving healthcare infrastructure directly contributing to the increased affordability and access-ibility of drugs.

*Current industry scenario*

According to Crisil Research, the Indian pharmaceutical industry was valued at $13 billion in 2006-07. Of this, the domestic formulation segment accounted for almost 48 percent, the formulation export market accounted for about 25 percent, while the bulk drug exports segment constituted for the balance 27 percent. Currently, India ranks 13th in value terms and fourth in terms of volume.

*Indian pharmaceutical industryin a sweet spot*

India is one of the fastest growing pharma markets in the world and has grown at a CAGR of almost 20 percent over the last five years. The introduction of the product patents regime in India has put the industry on a new growth trajectory. Indian pharma is making big strides in the global industry. No global company can any longer ignore India either as a competitive sourcing base for its global supply chain requirements or as a destination to capitalise on the rapidly growing domestic demand for drugs. Whether it is the potential in terms of capturing increasing generic market opportunity in the international markets, seizing a substantial share of the global outsourcing pie or building strong R&D pipelines, Indian pharma has already made its presence felt all the way and is increasingly spanning across the entire pharma value chain. Strengthening intellectual property laws and regulatory reforms are encouraging multi-nationals to take increased interest in this market and significantly increase scale of investments.

*Crystal ball gazing*

Each sub sector of Indian pharma market is witnessing strong tailwinds and has varying degrees of growth potential. Focusing on each sub sector will enable us to have a consolidated view of Indian pharma market in 2020.

India's per capita GDP is expected to nearly quadruple by 2020, leading to higher standards of living and increased disposable income supported by a strong middle class population and rising urbanisation (nearly 130 million additional people are expected to shift to the cities). This will also translate into increased demand for high quality healthcare and improved affordability and accessibility of medicines. While tier I cities will remain the primary markets, tier II cities and towns as well as the rural areas will also substantially contribute to the growth.

The growth in domestic drug market will be further spurred by allocation of a larger share of GDP to healthcare sector, rising levels of investments in healthcare in both private and public sectors and improving healthcare infrastructure and distribution networks. By 2020, healthcare spending as a percentage of the GDP is expected to increase from the current five percent to around eight percent. Healthcare penetration is also expected to increase considerably from the current levels.

India has achieved a strong foothold in the global generics market. While in 2002 Indian companies accounted for less than seven percent of all generic drugs approved for marketing by the US FDA, they accounted for over 20 percent in 2006. India's share in the total DMF filings has increased from a mere 14 percent in 2000 to about 50 percent in 2007 (Jan-Jun). In terms of ANDA approvals as well, India's share has gone up from a mere 15 percent in 2005 to about 25 percent in 2007 (Jan-Jun).

The increasing spread of generics is opening up a stupendous opportunity globally. Most generics markets worldwide are set to report double-digit growth and going forward generics are expected to constitute a much larger share of the total pharma market. The focus on semi-regulated markets is also increasing gradually as these markets offer attractive opportunity with favourable demographics, strengthening healthcare infrastructure supported by a regulatory environment favouring generics. Indian companies have been one of the major participants in the consolidation process of the global generics market and have spread their wings across regulated and semi-regulated markets either through buy-outs or strategic alliances. It can be predicted that by 2020, India will become one of the top three generics drug makers in the world.

The Contract Research and Manufacturing Services (CRAMS) segment is gaining traction worldwide and Indian CRAMS industry has witnessed commen-dable growth in the last few years. Given strong growth prospects, inherent competencies and conducive regulatory environment India has, by 2020, India will have successfully managed to capture a principal slice of global demand for outsourcing and the number of international companies off-shoring their global R&D and manufacturing operations to India and setting up low cost facilities here will increase substantially. India will become one of the most important constituents of the drug discovery and manufacturing value chain of the global pharma industry. This segment will be driven by India's ability to compete and preserve its inherent competencies supported by the expected improvement in IP infrastructure and the compliance with international standards.

From no where in late nineties to approximately 50 molecules under various stages of development, at present, Indian pharma industry is rapidly scaling up its presence in the innovative R&D space. Though there is a long way to go for Indian pharma companies to achieve a vital position in the global R&D landscape, companies are adopting collaborative research strategies such as in-licensing, out-licensing and joint development with international companies to ramp up their NCE/NDDS pipelines. By 2020 Indian Pharma would have gained substantial experience and expertise in the area of new drug discovery and development and certainly would have launched some of its molecules globally.

*Conclusion*

While growth oriented and inclusive policy regime will help sustain strong underlying growth drivers, the further strengthening of IP regime by policy makers and a forward looking regulatory regime will play a very important role in determining the success of Indian pharma industry.

2020 will definitely witness India's rightful place under the sunbeing that of an important producer and consumer in the global pharma sweepstakes.


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## Contrarian

You know, call me whatever you want. But it does give you a kind of satisfaction when Indian companies buy British ones...


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## Bushroda

*India's economic boom fuels investment in art by new rich*

BANGALORE, India (AFP)  India's economic boom has fuelled demand for condos, cars and company stocks but some of the new wealth created in Asia's third-biggest economy is finding its way into art.

Entrepreneurs and young professionals, the biggest beneficiaries of India's financial prosperity, are buying works of art both to signal they have arrived in life and as a safe-haven investment, auctioneers and gallery owners say.

The trend was on show last week at a Bangalore sale to snap up works by modern Indian artists such as Maqbool Fida Husain, Jamini Roy, Vasudeo Gaitonde and F.N. Souza.

"The interest in art is part of the lifestyle change we are witnessing," said Maher Dadha, 54, chairman of Bid and Hammer Auctioneers, who estimated the minimum value of the combined collection at 100 million rupees.

"Wealth has percolated down and people are buying art just like they are buying penthouses," he said.

The hammer went down on a 1971 Husain watercolour on paper, entitled Shiva, at 3.4 million rupees (86,374 dollars), the top price paid at the auction. At the start of this decade, Husain's works fetched less than 600,000 rupees.

Auctions of modern and contemporary Indian art have raised millions of dollars overseas in recent years, with Christie's selling a Tyeb Mehta painting for 1.6 million dollars in 2005.

"Now it's an internal trend, where Indian art is getting recognition in India itself," said Dadha, adding that India's rich "don't blink for a moment over cost."

Economic growth running at an annual nine percent, a stock market that rose a record 47 percent last year and surging salaries for finance and technology professionals have created a middle-class clientele for art.

Collecting Indian art has been traditionally a pursuit of former maharajahs, industrial houses, overseas collectors and rich expatriates.

The local art market -- both gallery sales and auctions -- is worth between 400 and 450 million dollars and expanding as prices jump, said Arun Vadehra, owner of Vadehra Art Gallery in New Delhi and a consultant to Christie's.

Gallery sales have jumped from barely two million dollars in 2000 to 150 million dollars, said Vadehra.

"The art market is very hot," said prominent Indian art critic Ella Datta.

"The collector base is growing with lots of of people like doctors, lawyers and IT professionals who can afford art coming into the market," she said. "The vaster base should sustain the market's growth -- I don't see it crumbling."

According to Bid and Hammer, the most renowned Indian art currently delivers solid annual returns of 35 percent.

"Eight years ago, I bought a Jaya Jhaveri for a small throwaway price and today it is worth at least 100,000 rupees," said Bangalore entrepreneur Sudhir Udayakanth, 34. "Today art has become an investment," he said.

In 2006, auction house Osian's raised 1.02 billion rupees for a fund dedicated to art, luring investors with the promise of converting the country's cultural wealth into capital assets.

The fund was open to those capable of depositing at least one million rupees for three years. Osian's paid a dividend last year, becoming the world's first art fund to share income with investors before the lock-in period ends.

Indians also have access to purchasing art online, with Internet auction sites such as Saffronart opening up.

The online market is worth between 30 and 40 million dollars a year, said Dinesh Vazirani, a co-founder of Mumbai-based Saffronart.


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## Bushroda

*Testing times ahead for surging India*
By Trevor Royle, Diplomatic Editor
Sunday Herald, UK

A CONFESSION. When it comes to cricket, I fail the infamous nationality test proposed some years ago by Lord Tebbit. In a curious contribution to multi-culturalism, the Tory grandee suggested that incomers could never be counted as truly British unless they supported England at cricket. Well, count me out: whenever England play India I find myself supporting the latter because I was born there 63 years ago yesterday, which just happens to be India's Republic Day. (All right, it's also Australia Day, but only an Aussie would support Australia at anything.) Besides - as European leaders such as Gordon Brown and Nicolas Sarkozy found out during their state visits last week - India is a country well worth supporting. Yesterday, the French president was the principal guest at the Republic Day parade in Delhi, where he will have seen more military pipes and drums on show than he would ever see in Scotland. India takes the celebrations extremely seriously and it's quite something to witness the serried ranks of turbaned Sikhs and slouch-hatted Gurkhas strutting their stuff along the Rajpath ahead of the caparisoned camels of the Border Security Force.

But there's more to India than ceremony. Some 15 years have passed since India seriously embraced the free market economy and in that time the country has been transformed. Inflation has been brought under control and the economy is booming, especially in the lucrative IT sector.

From being a sickly patient dependent on state aid and dogged by massively inefficient industrial practices, India looks set fair to emerge as an economic Asian superpower second only to China. One statistic says it all: on Friday the country's largest bank, the State Bank of India, reported a 70% rise in third-quarter profits due to a huge expansion in consumer and corporate lending.
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No wonder Brown and Sarkozy were accompanied by delegations of leading business people anxious to get a slice of the action. Just as Britain and France were locked in economic rivalry in the 18th century as both countries attempted to take advantage of the collapse of the Moghul empire, so too do they see riches galore in co-operating with India's burgeoning defence, aerospace and nuclear industries today.

History has given Britain a narrow advantage, but Sarkozy is anxious to make up for lost time and ahead of his visit he let it be known that he wants France to double its trade to India within the next five years. For starters, he was keen to sign a $2 billion deal to refurbish the Indian Air Force's fleet of ageing Mirage strike aircraft, and he had good words to say about the need for a big increase in the size and complexity of India's nuclear industries as a means of solving the country's chronic energy problems.

And why not? India is a big player on the world economic scene and it can only get better for them. Every prediction points to the country overtaking Britain, Italy and France within the next 10 years to become the world's fifth-largest economy, and then it will be well placed to overtake the US by the middle of century. Its prosperity is there for all to see - new, middle-class housing, shopping malls, streets choked with modern luxury cars and airports as packed as in Europe. Young people too are feeling the benefit, especially young professional women.

Of course, there is a price to be paid for all those rapid advances. Streets choked with cars add to pollution; manufacturing industries working round the clock are not always friendly to the environment; there is still a fair bit of exploitation of the workforce; and much of the infrastructure is well past its sell-by date. Even age-old industries such as agriculture are in trouble, with falling water tables damaging crop cultivation in Andhra Pradesh and Maharashtra and driving farmers to the edge of ruin. As the novelist Arundhati Roy put it recently, it's almost as if the lights are shining so brightly that no-one notices the growing darkness.

That's both a worry and a challenge. India has made great strides and wants to continue its upward trajectory, but it needs to ensure that the new wealth trickles down to the villages and country places where people are lucky if they make the equivalent of £1 a day.

Still, optimism runs eternal in this beautiful and strangely familiar country. Who knows, India might just get the better of Australia in the fourth test at Adelaide. Come on, India!


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## Bushroda

*Developing tastes*
By Jenny Wiggins
Financial Times, UK
January 26 2008

A few months ago in Punjab, as grain farmers set fire to harvested rice fields to clear their land, Jagroop Singh spent the afternoon reflecting on his good fortune farming cows. Singh, a tall Sikh who tends his herd in a white tunic and pale pink turban on a farm near the north Indian village of Aliwal, owns 60 somewhat bony brown animals, which he keeps in an open-air shed on the edge of the fields behind his house.

Keeping cows, like farming wheat, has been an immensely profitable business during the past year, because Singh gets paid a lot more for his milk than he used to. He receives about Rs15 a litre - a third more than two years ago - from Nestle India, which collects the milk and blasts it through machines at a nearby factory, evaporating the water and creating a fine white powder.

''The prices are very good, we are very happy,'' says Singh as he looks over his herd. He's planning to build a new shed soon, as he's running out of room to house his cows. By this time next year, he aims to have 150, which would be exactly 148 more than he owned a decade ago.

Not far away, another Sikh farmer, Jatinder Singh, is equally optimistic about the future. He started his farm a decade ago with just one cow but today has 65, which are kept outdoors in concrete-paved yards and dirt paddocks. Over the next few years, he plans to breed cows and double his milk production.

But what's good for the farmers is hard on consumers. In India, where milk has traditionally been bought fresh every day and boiled to make tea and curd (this stops it going bad in a country where electricity is intermittent and many people do not have refrigerators), people are now paying around Rs24 a litre - Rs3 more than six months ago.

And milk is not the only basic foodstuff rising rapidly in price, nor India the only country in which people are spending more money on food. Bread, pasta, eggs, coffee, chicken, pork and beef - it is difficult to find a staple food that has not become more expensive over the past year, or a country in which food prices have not gone up.

British food producers increased prices by 7.4 per cent last year - the biggest annual increase since the country's National Statistics office began tracking them 15 years ago - due to big jumps in the cost of producing bread, butter, eggs, milk and meat. In Russia, prices went up so sharply - milk rose by some 30 per cent and bread went up 22 per cent - that the government froze prices towards the end of the year. This month, China warned it may take similar action after food prices soared 18 per cent last year.

The speed at which food prices rose in 2007 has shocked not just farmers and consumers, but also governments. ''Rarely has the world witnessed such a widespread and commonly shared concern on food price inflation,'' the United Nations' Food and Agriculture Organisation says.

Why are food prices going up so fast all over the world? For a start, the world's stocks of grain have been falling, partly thanks to droughts in Australia and Ukraine (both countries are among the world's-biggest wheat exporters). This has helped push up prices. Higher grain prices make food derived from animals - such as poultry, pork, eggs and milk - more expensive, because farmers who buy grain to feed their animals pass on the extra costs.

Meanwhile, biofuels are also having an effect. As global demand for non-oil-based sources of energy rises, some farmers are choosing to turn their crops into biofuels rather than food.

But the biggest cause of higher food prices is not biofuels or the fall in grain stocks: it is the remarkable changes occurring in the kinds of foods people eat, particularly in the fast-developing nations of India, China, Russia and Brazil. These changes are so big - and so swift - that their impact is being felt all over the world.

This is particularly acute in India, as is clear at New Delhi's Khan Market branch of Cafe Coffee Day. Khan Market is a dusty group of shops, boutiques and restaurants on the south side of the city that attracts affluent locals and foreigners, and Cafe Coffee Day is one of the most popular places to meet.

On a Thursday morning in October, a group of men and women in their early twenties sit outside on the cafe's balcony smoking, while inside, an older couple ignore the flat-screened television on the wall and talk over a glass-topped table. Other customers sit on cane lounge sets and read the paper or talk on their mobile phones. As the Cafe Coffee Day chain has expanded (there are now almost 500 in India), it has developed an extensive food menu. Along with a cappuccino, patrons can now order a chicken burger, a teriyaki chicken ciabatta, nachos with salsa, fish and chips, Greek salad, pasta in Alfredo sauce, apple pie, a blueberry muffin or dozens of other savoury and sweet snacks.

A few years ago, such a diverse menu would have been rare. But as Indians have become wealthier, they are travelling abroad and eating out more often, which exposes them to a wider variety of food.

''People have a lot more money to spend and people are a lot more adventurous,'' says Naresh Fernandes, editor of Time Out Mumbai. ''Until 20 years ago, we had rationing and food shortages. Going out to enjoy yourself didn't exist until recently.''

Every fortnight, two or three new independent restaurants open in Mumbai, charging between Rs500 and Rs1,000 per person for a meal; Indians can increasingly afford these prices because incomes are rising quickly. About a third of India's population live in cities. During the next 15 years, three-quarters of these are expected to earn enough money to join the country's middle class, each earning between Rs200,000 (£2,600) and Rs1m per year, according to the McKinsey Global Institute, the economic research group. Only 10 per cent of urban Indians earn this much today.

This means that by 2025, India's consumption of food and other products will quadruple to $1,500bn, creating the world's fifth-biggest consumer economy after the US, Japan, China and the UK (India now ranks 16th, trailing Spain, Canada and Italy).

The new shopping mall Select Citywalk, a concoction of steel and glass in south Delhi, shows how closely the consumption habits of Indians are starting to mirror those of people in more developed countries. Inside the mall, which is so vast that it is impossible to see from one end to the other, most of the shops are expensive international brands such as Tissot, Esprit, Lancome, Mac, Mango and L'Occitane.

Familiarity with fashionable clothing brands and restaurants is being encouraged by new magazines such as Vogue India, which declared India's ''arrival'' on the global fashion scene when it launched its first issue in September, and Time Out, which has a Delhi edition as well as a Mumbai one and shortly plans to start publishing in Bangalore.

Meanwhile, restaurants are now doing so well that many are opening up branches in different cities. Some are fast-food chains that have emulated McDonald's, which has been in India for more than a decade and is one of its most established foreign restaurants. It remains a popular destination: in the evenings its restaurants are full of families queuing for Chicken Maharaja Macs, McAloo Tikki burgers and Paneer Salsa wraps - now made with ''multi-cereal'' bread for the health-conscious diner.

But these days McDonald's is facing more competition. Newcomers include Jumbo King, which has taken a popular street food called vada pav, a spiced potato patty topped with chutney and served in a bun, and created a fast food chain around it, and Yo! China, which markets itself as ''Chinese food, Chinese prices''.

Rachna Singh, a 34-year-old doctor who lives in Delhi, is one of the new generation of Indians who eat out regularly. She and her husband, who works in IT, go to restaurants three or four times a week and prefer non-Indian food when dining out, particularly Thai, Chinese, Middle Eastern and Italian. On weekends, Singh gladly drives for an hour to eat at her favourite Thai restaurant. But she restricts her three-year-old daughter, Avaka, to once-weekly sessions of junk food such as chips.

New food that was unheard of until recently has also found its way into Singh's home. ''We didn't know what a kiwi was two or three years ago,'' she says. She has also taken to buying foods that her mother would have made when she was growing up. Indian families traditionally make roti (round flat bread) by hand with a small rolling pin. But Singh buys frozen roti and parantha, another type of bread. She swears they taste like homemade ones. ''They are excellent! You can't tell the difference.'' But she admits: ''My parents think I am crazy.''

Singh often dines with her parents, Dipak and Anju Khannee, in their home in the south Delhi neighbourhood called Greater Kailash I. On a recent evening, they sat at a long dining table laden with typical Indian dishes. Big bowls were filled with kali dhal (black lentils), paneer (Indian cheese in sauce), rasala (a salad of cucumbers, red onions and coriander); chicken, raita (a type of yogurt) and roti.

The meal is traditional, but there are some new twists. Singh's parents spoon pickle on to their plates from a store-bought jar. Singh's mother used to make this tangy condiment of peppers herself but now finds it is easier to buy it.

Does Singh ever make pickle? ''Me? No!'' she shakes her head. ''In our generation, no one would know how to make pickle. I'd rather buy 10 different kinds. It's impossible to make a small amount.''

A glass dish of butter slices sits on the table, and Singh spreads some on her roti. A generation ago her mother would have made butter at home, but these days the family buys it too. ''No one has got time or inclination to do so much stuff,'' she says, even though both she and her parents employ housekeeping staff.

Indians have typically bought their fruits and vegetables in outdoor markets, and packaged foods in small stores with limited selections of products. But supermarkets, where young professionals such as Singh can find rare fruits like kiwis and chilled foods like butter, are now popping up around the country. In Gurgaon, the booming business district on the outskirts of Delhi, where cows wander along dusty streets between newly built office blocks, shoppers walking into a Spencer's supermarket will find a pizza stand, Chinese food ''X-press'' and shelves filled with many of the same brands that they would see in London or Paris.

Lurpak butter, Red Bull energy drinks, and Tropicana orange juice are just some of the foreign brands available, and there is an entire aisle dedicated to foods such as peanut butter, pancake syrup and cranberry sauce beneath a sign saying ''Taste America at Spencer's''. Every month, 40 new Spencer's supermarkets open around the country.

India, which is still trying to lift millions of people out of poverty, is having problems satisfying its appetites. One of the reasons the Punjabi dairy farmers are doing so well is that demand for milk, and milk-derived products, is increasing so quickly that farmers can't keep up. India, despite being the world's largest producer of milk, temporarily halted exports of milk powder last summer to try and stop domestic milk prices from rising too fast after some dairy farmers were tempted by record high global prices and sold their product to exporters rather than local food producers.

Milk isn't the only hot commodity. After restarting wheat imports in 2006, for the first time since the late 1990s, India banned wheat exports last year. The country can, of course, try and produce more food. But Ajay Shankar, a government secretary in the ministry of commerce and industry, says that while India wants to increase its agricultural yields (which are low compared with the rest of the world), expanding the amount of land farmed is difficult in a country already struggling to support more than one billion people. In Punjab, the state that produces a hefty chunk of India's wheat, rice and milk, decades of intensive farming and heavy fertiliser use have taken a heavy toll on the land, and water tables are falling sharply.

Although India's economy is expanding at about 9 per cent a year, its agricultural sector is slowing, with growth declining from 4.7 per cent between 1992-1997 to just 1.5 per cent between 2002-2006.

If India can't produce enough of its own food, it will have to import more. Shankar says it is unclear how much more food India will need, but acknowledges that significant increases in imports would affect the global economy. ''If we become a major importer of food grains as some fear, clearly it will have an impact on global prices,'' he says over tea in his Delhi office.

And India is not the only country expected to import more food in coming years. Over the next decade, per capita income in China is expected to triple, which means the Chinese will be eating more - and better. They are already each eating twice as much meat as they were in 1990 and the country now accounts for one third of all meat eaten in the world, according to research by Goldman Sachs.

Even in India, with its large vegetarian population, people are eating 40 per cent more meat. In Brazil, the amount of meat eaten by each person has risen by more than one third over the past 15 years. Brazil is better placed than most countries to meet its own needs due to its fertile soils and vast land mass, but many other countries will need to find more arable land if they are to satisfy the appetites of their citizens.

For dairy farmers such as the two Singhs, the implications of these global shifts are good news: after a decade of poor returns, farming appears to have a bright future. For everybody else, it's a different story: get used to paying more for what you eat.

*Jenny Wiggins is the FT's consumer industries correspondent. Additional reporting by Amy Yee.*


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## Bushroda

*The Tata Invasion*
by James Surowiecki 
The New Yorker
January 28, 2008

Americans are used to foreign carsnearly half of us, after all, drive onebut no American has yet seen a vehicle bearing the brand name Tata Motors tooling along the highway. So when, a few weeks ago, news broke that this same Tata Motors, an Indian auto company, was close to buying Jaguar and Land Rover, the first reaction of many was Who? The implausibility of the bid was magnified when Tata rolled out its newest product, a tiny, stripped-down car that will sell for a mere twenty-five hundred dollars. The spectacle of a low-end specialist trying to buy a couple of established luxury brands looked to some like a cubic-zirconium peddler making a play for Tiffany.

Theres no denying the audacity of Tatas bidthe company has never sold a car in the U.S.but theres also no denying Tatas distinguished pedigree: the parent company of Tata Motors (called the Tata Group) started in the nineteenth century, and, in the years since, its divisions have created Indias first steel mill, provided electricity to Mumbai, started the countrys first airline, and built its first locally made trains and automobiles. Today, Tata is a huge conglomerateninety-eight companies producing everything from tea to steel and solar powerwith annual revenues of around thirty billion dollars and a chairman whom Fortune recently named one of the twenty-five most powerful people in business.

If Tata is so powerful, why have so few Americans heard of it? In large part, because so much of its fortune has been made selling to its home market and to other developing countries, rather than to the U.S. and Europe. Historically, developing-country firms that have become global powerhouseslike Japanese companies decades ago or, more recently, Korean companies like Samsungwere companies that, in addition to dominating their domestic markets, were heavily oriented toward exports to the West. Tatawith some exceptions, such as its steel and consulting businesseshas taken a very different approach, becoming tremendously rich while selling to people who are still pretty poor.

Tata has been able to do this because of the way the global economy has changed. Even three decades ago, selling to the U.S. and Europe made sense, because thats where all the money was. Most developing countries had only a minuscule upper class and a tiny middle class, and business conditions in these countries were difficult at best. Today, the economies of developing countries are still only a fraction of the size of Western economies, but many nonetheless have growing middle and upper classes with disposable income. And, as the business professor C. K. Prahalad argues in his book The Fortune at the Bottom of the Pyramid, even the poor in these countries constitute a market worth trillions of dollars. Twenty years ago, few people in India could have afforded even a twenty-five-hundred-dollar car. Today, tens of millions can.

Making money in developing countries remains challenging, of course, but meeting those challenges can actually help a company like Tata become a formidable global competitor, since figuring out how to earn a profit in markets where your selling prices are necessarily low forces a company to be innovative in thinking about how products are made and sold. That may be why a huge wave of what you might call developing-country multinationalscompanies like Mittal Steel, Lenovo, Chery Automobile, and Cemexhave recently begun to move aggressively into Western markets. These are the advance guard of whats been called the emerging-markets century.

The distinctive thing about this trend is that the companies involved arent simply making stuff abroad and then shipping it here. Instead, theyre now using their wealth to take a shortcut, by buying up Western companies. In 2005, the Chinese computer company Lenovo bought I.B.M.s P.C. division, and the Mexican cement company Cemex acquired the British cement giant RMC. Last year, Indias Mittal Steel paid thirty-three billion for the Belgian company Arcelor, and Tatas steel company bought the British-Dutch steel producer Corus for more than eleven billion. The acquisitions help companies avoid potential export restrictions, bring them closer to customers in the developed world, and provide a kind of instant credibilityat least, when the acquisitions are done well. (Lenovos ThinkPads, for instance, seem to be as well regarded as I.B.M.s once were.) These deals are often also a way to acquire managerial and technological expertise. It may very well be true, as many have suggested, that knowing how to build a twenty-five-hundred-dollar car doesnt mean that Tata will be able to build a seventy-thousand-dollar car. But the people at Jaguar can, and buying Jaguar will give Tata quick access to that knowledge.

This buying spree could, of course, end badly. When some Japanese companies in the nineteen-eighties went on a buying binge in the U.S., they often ended up overspending. But such an outcome wouldnt change the fact that developing countries are now producing genuine global contenders. Globalization, it once seemed, was mainly going to give companies in the U.S., Europe, and Japan billions of new customers and plenty of cheap labor. But it has also meant that these companies have had to face many more real competitors than they once imagined. When we persuaded developing countries to open their doors to us, we also opened our doors to them. Now theyre walking through.


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## Bushroda

*Can India grow greener?*
*Western leaders pressurise India on climate change, but they had the luxury of getting rich first, then clean*
Randeep Ramesh
Guardian Unlimited, UK

Sans Carla Bruni, President Sarkozy's trip to India should be a "grip and grin" affair. Turning up as guest at India's Republic Day - where the country's military parades through the heart of Delhi - will ensure warm hugs and big smiles on Saturday. No doubt, there will be business deals to be struck and arms to be sold.

However, underneath the bonhomie, and close to Sarkozy's heart, lies an issue raised by Britain's environment minister, Phil Woolas, last week before Gordon Brown's visit: climate change and the role of big, poor polluters like India. In Woolas's words, the Indian government was not "putting its shoulder to the wheel" in the fight against climate change.

Sarkozy may be blunter. During his trip to China last year, he issued a not-so-veiled threat to tax imports from high carbon-emitting countries (read China), so that EU companies obliged to meet strict environmental standards could be protected. If the mercurial French leader sticks to his guns, his Delhi visit may be loveless in more ways than one.

There's no doubt India is being difficult about climate change. Delhi argues it should be able to grow its economy unhindered by the burden of sins committed by countries that industrialised centuries earlier. Indian ministers point out today that it takes 18 Indians to pollute as much as one American.

But there's no ducking the facts. India is home to a billion people and the world's fourth largest polluter. Its economic rise has seen its carbon dioxide emissions almost double since 1990.

The current globe's experiment with the environment is fraught with dramatically dangerous outcomes. The North Pole is disappearing. Glaciers are receding. Weather systems are changing, perhaps irrevocably.

The re-emergence on the world stage of China and India makes the point that climate change is linked to growth. The west got rich first and then got clean. The question is can the world re-invent ways in which countries become wealthy?

In terms of development, China is a rung above India. Beijing has dashed ahead in terms of industrialisation. Manufacturing, the dark satanic commerce that emits atmosphere-altering gases, makes up just a quarter of the Indian economy. In contrast, China is the workshop of the world - and its carbon footprint is three times that of its smaller southern neighbour.

But neither country can afford to continue their high-carbon, high-growth rise. China and India are linked in this goal: to raise billions out of poverty without destroying the earth. To achieve this aim both countries need technology and money.

The only nations on earth that have the know-how and the cash are the already industrialised countries in Europe, North America and Japan.

Will nations such as the United States invest in, create and then affordably spread technologies across the world? Given that no one has built a low-carbon economy, India and China are hedging their bets on this question.

Both nations are suspicious of entering a new age where the west has a monopoly on key technologies. They remember how bitter the fight was to get anti-retroviral drugs to fight Aids out of the hands of western multinationals and into the mouths of poor Africans. Deaths in the third world did not move governments then.

That explains to some degree the reluctance of both countries to accept binding commitments to cut carbon dioxide emissions.

Both Beijing and Delhi are unlikely to be cowed by threats. These two countries, linked by the Himalayas, understand that global inequities cannot be frozen. They are aware that neither rich nor poor can survive calamitous climate change. Both are waiting to see what the west offers up.

Trade should be part of the solution, not part of the problem. But it will have fair, not necessarily free, trade that will ensure that wealthy nations' carbon debt to the poorer parts of the world gets paid. In return China and India should accept pollution limits. Arranging this grand bargain is not going to be easy, but then making history never is.


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## Bushroda

*Trip to India offers lessons in politics, life*
By Adriana Garza 
Corpus Christi Caller Times, TX
January 25, 2008

The bustling, jam-packed streets of New Dehli, the capital of India, are a far cry from Kingsville.

But for political science students, studying one of the world's fastest-growing economies is best done in person.

Five Texas A&M; University-Kingsville students spent more than two weeks of their winter break discovering the political past, present and future of India as part of a course in Asian politics through Texas A&M; University.

The course, India's Political Economy, is taught as a joint venture between A&M-Kingsville;, the Bush School of Government and Public Service at A&M; in College Station and Jawaharlal Nehru University in New Delhi.

Through the university course, the students were exposed to lectures by Indian professors and met with political and military officials. Students also kept a blog about their India experiences as part of the course. The majority of the trip was paid through an A&M-Kingsville; scholarship and other donations.

A&M-Kingsville; professor of political science Nirmal Goswami, a native of India, accompanied the Kingsville students -- all political science undergraduates.

Goswami, who has taught the course twice, encourages his students to spend some part of the college experience learning abroad. India, with its growing economy, diverse relationship with the United States and population of more than 1.1 billion, is a good place to start.

"Studying abroad provides our students with a global perspective," Goswami said, adding that because of the size and diversity of the U.S. economy, it is particularly important for Americans to familiarize themselves with the rest of the world.

It is a perspective shared by A&M-Kingsville; senior Helamán Berrios.

Reading texts about international organizations such as the United Nations, listening to lectures about urban planning in Asia and Europe and lively class discussions on comparative international politics is one thing -- visiting one of the most politically significant nations in the world and learning about its politics is quite another.

"I have learned more in this experience than in anything I'd heard or read about India," said Berrios, a senior at A&M-Kingsville.;

Berrios, a native of El Salvador whose family fled the country during political and civil upheaval when he was a child, also looked at the India trip as a means of better understanding how to fulfill his goal of one day returning to El Salvador to help that country out of economic dependence.

Berrios grew to admire the nation's economic progress, political autonomy and role in international relations and believes there are lessons to learn in India's progress for other nations who share India's poverty issues.

Other elements of life in India were unexpected, Berrios said, including the traffic-clogged streets with masses of people, cows sharing the roadways with cars and large, elaborate homes adjacent to homes made of tents.

"A lot of things about India one couldn't expect or imagine and if you could you'd still be surprised," Berrios said.

*Former staff reporter and Corpus Christi native Adriana Garza is pursuing a master's degree in political science at Texas A&M; University-Kingsville.*


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## Bushroda

*India upbeat on growth, global mkts crisis a concern*
By Unni Krishnan
Fri Jan 25, 2008 2:05pm IST

NEW DELHI (Reuters) - India is confident it can sustain growth of 9-9.5 percent in Asia's third-largest economy but a global financial crisis could dent expansion, Prime Minister Manmohan Singh said on Friday.

Slowing of the U.S. economy has worried investors and policymakers and concerns have also surfaced that the U.S. downturn was spreading to the 15-nation euro zone economy.

India, one of the fastest growing major economies after China, has expanded at an average 8.6 percent over the past four years.

"We are living in an increasingly inter-dependent world and the crisis in international markets can have impact on growth of emerging economies, including India," Singh told a joint news conference with visiting French President Nicolas Sarkozy.

"The economic fundamentals of India are sound and as of now we are convinced we can sustain 9-9.5 percent growth."

Singh's economic advisory panel feels a slowdown among developed economies may not have a major impact on India but pressures from high oil and food prices will make managing inflation a challenge in 2008/09.

The panel in its review of the economy said the Indian economy is much less dependent on external markets than China's, and a slowdown in exports is unlikely to be large enough to depress growth.

India's economy is largely driven by domestic demand with exports playing a relatively minor role. It grew 9.4 percent in the 2006/07 fiscal year, its strongest in 18 years and second only to China among major economies. 

But annual growth dipped to 8.9 percent in the September quarter, falling below 9 percent for the first time in three quarters, as industrial output slowed due to monetary tightening designed to trim inflation.

Most forecasts peg India's growth at around 8.5 percent for the fiscal year ending March 2009, slower than the scorching 9.4 percent in 2006/07 and a unit of ratings agency Moody's forecast growth at 8.0 percent for 2008.


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## Bushroda

*'People's Car' sign of times for automakers*
By D'Arcy Jenish
Business Edge, Canada
01/25/2008

It's auto show season again - that time of year when vehicle manufacturers from around the world fill acres and acres of exhibition space in big-city convention centres with their brightest and best new products.

More than 50 concept cars and production vehicles were slated to make their world debuts at the North American International Auto Show Jan. 19 to 27 at the Cobo Center in downtown Detroit. Not only that, five Chinese manufacturers were booked to display their products.

Next month, more than 1,000 new cars and trucks will be on display at the Canadian International AutoShow at the Metro Convention Centre and the adjacent Rogers Centre in Toronto. Promoters promised that green technologies would be prominently featured, which is undoubtedly a worthy objective, but won't generate much buzz among the masses. In fact, the most exciting recent announcement came from India of all places.

Tata Motors Ltd., the sub-continent's largest automaker with 2006-07 sales of US$7.2 billion, upstaged the big car shows and the manufacturers themselves in mid-January by unveiling the Nano, or what it is calling the People's Car.

It is compact (3.1 metres long and 1.5 wide), fuel efficient, powered by an all-aluminum, two-cylinder 623 cc engine and it's inexpensive. The Nano is slated to hit the Indian market later this year with a pricetag of $2,500 and Tata has plans to launch it in Africa as well as South America.

There's no chance the vehicle will be making its debut on Canadian or U.S. roads in the near future - it wouldn't meet the safety and emissions standards of either country - but the Nano does send an important message.

"It's a signal that the automobile is becoming a product that many, many countries can build and want to build," says Peter Frise, an automotive engineer at the University of Windsor and scientific director of AUTO21, a research network of 110 Canadian industrial, government and institutional partners. "The automobile is a great product for creating jobs and many countries need car manufacturing to further their development."

In this country, the auto sector directly employs 130,000 people and many thousands more work in related industries. And we need to keep those jobs, but that is becoming more difficult all the time.

"We want a high standard of living, with a secure economy, good health care and good education for our children," Frise says. "Our economy has to generate high-value jobs and we have to compete for those jobs because every other country wants them."

He adds Canada will remain an auto-producing nation in an era of global competition only if it can stay at the forefront of research and development and that's what AUTO21 is all about.

The federal government is funding the initiative to the tune of $5.8 million annually and private-sector partners, including several automakers, parts companies and materials manufacturers like Stelco, DuPont and Alcan, are providing matching funds. That supports a network of 265 researchers at 42 academic institutions, government research facilities and private-sector labs. They are working on dozens of projects. Many are confidential for competitive reasons - manufacturers do not want to give away what could become significant competitive advantages.

Some involve manufacturing processes. Others are looking for improved materials that will deliver enhanced safety and fuel efficiency. Many are looking for ways to get more mileage out of a litre of gasoline while reducing emissions. "All aspects of the auto industry are changing," Frise says. "The status quo is not an option."

He adds that a number of AUTO21 projects have produced tangible commercial results. Canadian Auto Parts Toyota, Inc. manufactures aluminum wheels in Delta, B.C., based on AUTO21 research. In the fall of 2006, Canadian Tire stores across the country began selling the Clek Booster Seat, which enhances the safety of children in automobiles. Scientists funded by the network developed the product and a division of Magna International makes it.

"We have to concentrate our efforts at the high end of the technological scale so our workers can compete," Frise concludes.

Otherwise, Canada's automobile sector could be marginalized or greatly reduced by ferocious competition from Asia and other low-cost manufacturing centres like so many other industries.


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## Bushroda

*Cairn hopeful on India deal*
By Ed Crooks
Financial Times, UK
January 28 2008

Cairn India, which is 69 per cent owned by London-listed Cairn Energy, is close to securing approval to begin work on the pipeline to transport oil from its vast Rajasthan fields, the Indian government has said.

A senior official in India's petroleum ministry expected a deal to be signed by February 15, giving ample time for the pipeline to be completed on schedule for deliveries to begin by June next year.

His comments are encouraging for the most important asset of Cairn Energy, which releases its 2007 trading update on Thursday. The company was cautious about the news at the weekend; a pipeline deal was first reported a year ago.

But if the delays that have dogged the approval have been resolved, it will remove an uncertainty that has been hanging over the group.

Cairn's shares re-entered the FTSE 100 index in the autumn, helped by the rise in the oil price.

The company has become more positive about the production potential in Rajasthan, and Credit Suisse has suggested that peak output could be 190,000 barrels a day, up from an estimate of 150,000.

However, analysts have seen the lack of clarity over the timetable and commercial terms for building the pipeline from the field to a coastal terminal as a threat to the group's prospects.

India had been stalling over whether to allow Cairn to recover its share of the $800m cost of building the pipeline under the production sharing contract for the Rajasthan fields.

However, M. S. Srinivasan, secretary to Murli Deora, the petroleum minister, said he was "very confident we can resolve [the pipeline issue] by mid-February".

Sir Bill Gammell and Rahul Dhir, Cairn India's chairman and chief executive, lunched in London on Friday with Mr Deora, and were said by Mr Srinivasan to have come away "feeling extremely reassured".

Cairn had been close to the point where it would have had to decide whether to proceed without cost recovery for the pipeline, at an estimated cost of $150m, or to delay the date for first oil from Rajasthan, at a cost of $700m-plus a year.

Gordon Brown, the UK prime minister, is said to have intervened personally on Cairn's behalf during his recent visit to India.

Touring the world looking for foreign investment

The fact that after months of delay, the Indian government now appears to be keen to expedite a deal with Cairn India may have something to do with the fact that Murli Deora, the petroleum minister, is touring the world looking for foreign investment, writes Ed Crooks.

He was in London last week, and is in Houston today, on the road show for the seventh round of licences under India's New Exploration Licensing Policy, trying to attract investors up to and including the likes of ExxonMobil, BP and Royal Dutch Shell.

India has vast unexplored areas, but for anyone drawn by thoughts of the oil and gas that they might hold, Cairn has been a cautionary tale. After making India's biggest onshore oil find for two decades, with an estimated 3.6bn barrels of oil equivalent in place, Cairn Energy pressed ahead with its development plan to bring much-needed oil to fuel India's fast-growing economy. It took the decision to spin off its Indian business to give it local investors and a local listing. Yet it still found it very hard to secure all the approvals it needed as fast as it had hoped. The crucial "right of use" for the land to build the pipeline was given last September, but the question of cost recovery remained unresolved.

If the issue were to continue to drag on, it would leave a question in foreign oil companies' plans over whether they would receive similar treatment should they achieve similar exploration success.


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## Bushroda

*World tour sparks rush for deal*
By Ed Crooks
Financial Times, UK
January 28 2008

The fact that after months of delay, the Indian government now appears to be keen to expedite an agreement with Cairn India may have something to do with the fact that Murli Deora, the petroleum minister, and his officials are touring the world looking for foreign investment.

They were in London last week and are in Houston today, on the road show for the seventh round of licences under India's new exploration licensing policy, trying to attract investors up to and including the super-majors such as ExxonMobil, BP and Royal Dutch Shell.

India has vast unexplored areas, but for anyone drawn by thoughts of the oil and gas that they might hold, Cairn has been a cautionary tale.

After making India's biggest onshore oil find for two decades, with an estimated 3.6bn barrels of oil equivalent in place, Cairn Energy pressed ahead with its development plan to bring much-needed oil to fuel India's fast expanding economy.

It took the decision to spin off its Indian business to give it local investors and a local listing. Yet it still found it very hard to secure all the approvals it needed as fast as it had hoped. The crucial "right of use" for the land to build the pipeline was given last September, but the question of cost recovery remained unresolved.

If the issue were to continue to drag on, it would leave a question in foreign oil companies' plans over whether they would receive similar treatment should they achieve similar exploration success.


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## Bushroda

*India sits on human capital goldmine, says Parekh*
By The Editors 
Financial Asia, Hong Kong
29 January 2008 

*Deepak Parekh, chairman of India's first housing finance company, HDFC, was the recipient of FinanceAsia's first Lifetime Achievement Award at our awards dinner on January 24. This is his keynote address.*

Global markets have been fraught with uncertainty as the world ponders the fate of the US economy. A slowdown of the US economy was inevitable but the prolonged credit crunch, oil at over $100 per barrel and collapsing house prices have sent fresh fears as economists debate the dreaded R-word - will the US economy slip into a recession or manage to skid over?

Clearly, there are tough times ahead and amidst pandemonium in the global markets, India demonstrated resilience in its ability to meet new global challenges. To my mind, three key events of last week best demonstrate this:
- the overwhelming response to a mega IPO that re-affirmed investor confidence,
- Indias successful testimony of its manufacturing prowess as it unveiled the worlds cheapest car at $2,500 and
- the Indian prime ministers visit to China, which re-emphasised to the world that the 21st century belongs to the two Asian giants as they seek greater economic co-operation.

But that was last week and this week came with a fresh set of shocks, collapses and rebounds. Markets are now so volatile that one has to learn to expect the unexpected. The Indian stock markets were no exception in the global meltdown earlier this week but like most markets, managed to clamour back up as sentiments improved following the Fed rate cut.

The Indian market had been enjoying a bull run over the last four years. An analyst aptly summarised the current market scenario and I quote, India is now in a corrective phase in a bull market.

Though market sentiment may keep shifting, it is important to note that in the Indian context, the real economy is driven by its own investment and domestic consumption and this continues to remain robust. The long-term fundamentals of the India story remain intact.

So setting aside the recent frenzy let me return to the core of the India story which dates back to over 60 years ago when, on the eve of Indias Independence, our first prime minister, Jawaharlal Nehru said: India has made a tryst with destiny.

It has really been over the past few years that India has begun to see that destiny come true.

From a country that was once considered a weak nation and had to convince investors of its growth prospects, India has now become a force to reckon with. Over the past four years, GDP growth has averaged 8.6% and over the last two years, growth rates have crossed the 9% mark.

Financial year 2007 was a remarkably good year with GDP clocking 9.4%. In line with expectations, the industry and services sector grew at 10.9% and 11% respectively, though agricultural growth continued to remain slack at 2.7%.

The oft-posed question for this trillion-dollar economy is whether the growth rate will slow down in line with global trends or whether India will be able to attain the much-targeted 10% growth rate?

Conservative estimates have trimmed Indias GDP forecast to 8.5%, citing the overall slowdown in global GDP growth. In the first half of the current financial year, Indias growth rate stood at 9.1%, giving little indication of an impending slowdown. The key issue is that the economy is on firm ground and the growth rate is sustainable and well-calibrated.

The breed of India optimists continues to multiply. Today, there are over 1,250 foreign institutional investors with a cumulative investment of $67 billion. Contrary to some opinions, the restrictions on P-Notes by the regulator did not have a significant impact on FIIs investing in the Indian stock markets. Long term India players understand that it is the prerogative of a regulator to know the source and identity of money flowing into the country. The Indian stock markets have been greatly influenced by FIIs and the markets have benefited by their presence, especially in terms of improving governance standards, investor relations and valuation processes.

However, what is gratifying to note is that the Indian stock markets are no longer dominated by or heavily dependent on FIIs. Last year, FIIs pumped in an estimated $17 billion while domestic insurance companies, mutual funds and retail investors collectively invested close to $30 billion. Domestic money from insurance companies and pension funds is expected to pick up further.

Markets tend to work well when there is a diversified investor base and investors have different investment objectives and perspectives. With the mix of FIIs and domestic investors which is increasingly gaining ground, the investor base in India is becoming broadbased.

Admittedly, with the Sensex trading at a price to earnings ratio of around 20 times 2009 earnings, valuations of certain stocks may appear high, but this is a reflection of the strong growth potential. India Incs performance has been impressive. According to the RBI, corporate India continues to show an impressive performance with over 2,300 non-government, non-financial companies posting a growth in net profits of 34% in the first half of financial year 2008.

India has now become a magnet for foreign direct investment  a sea change from the time when FDI would only come in trickles. FDI flows have tripled from $6 billion in 2005 to $19 billion in 2007. The government has now confidently set a target of $25-$30 billion for next year. According to the World Investment Report of UNCTAD, India has emerged as the second most attractive location after China for FDI.

For India to remain a conducive FDI destination, the government will need to focus on reducing the number of sectors that require government approval, provide a level playing field in sectors with public sector dominance, open up more sectors for FDI and ensure long-term, consistent policies.

In terms of foreign investment flows, the year 2007 belonged to private equity as it emerged as the most preferred route for raising funds, with over $17 billion being invested in India Inc. These were mainly in sectors like real estate, infrastructure, financial services and information technology/IT enabled services.

With over 500 private equity firms investing or preparing to invest in India, there are concerns of overcrowding, but what this also means is that the funds will need to look at diverse sectors and new investment strategies.

While the India story is on a roll, it is imperative to prioritise certain issues that will help the country attain its growth potential.

Agricultural growth in India has been a laggard. An increase in agricultural growth will guarantee India a 10% GDP growth rate. The agricultural sector has been plagued with low investment, vagaries of weather, imbalance in fertilizer use and a distorted incentive system.

Lack of focus on the agriculture sector has serious implications  we cannot talk about inclusive growth when more than 50% of India still derives their livelihood from this sector. Further, poor and volatile performance of the agricultural sector has repercussions on the maintenance of price stability owing to supply side constraints of primary commodities. Clearly, the way forward is increased investments in food processing technologies and improving integration of the supply chain from the farm gate to the consumers plate.

Secondly, and an issue that is rather evident is the need to improve the countrys infrastructure. Many of you may have been witnesses to the inadequacies of infrastructure: cities bursting at their seams, power shortages, delayed flights and potholed roads/traffic jams.

The good news is that things are changing, the bad news is that it is probably not changing as fast as it should.

Over the next five years, the government has envisaged that investment in infrastructure needs to rise from 5% of GDP to at least 9%. This translates to an investment requirement of $492 billion. For instance, investment requirements in power is $161 billion, railways is $82 billion and national highways is $61 billion and telecom, state highways, rural roads require a combined amount of $150 billion.

These amounts appear intimidating owing to the sheer vastness, but to quote Indias finance minister, P. Chidambaram who said, I can say with confidence that no country than India needs and no country than India can absorb so much funds for the infrastructure sector.

It is ironic that a country that has a strong institutional infrastructure is grappling with physical infrastructure. The bulk of investment for infrastructure needs to be channeled into power, roads and urban infrastructure and the challenge in these sectors particularly, is that the levy and collection of adequate user charges has proved difficult. But given fiscal constraints, it is apparent that going forward, infrastructure will have to be increasingly financed through user charges and by the private sector.

The crucial issue is that the private sector will step in to fund infrastructure only if it is sufficiently incentivised. So how can this best be done? At a policy level, there needs to be an overhaul in the way some of these sectors are governed. Take the example of power  a sector that continues to be mired in regulatory turmoil. The country currently faces a 15% peak power deficit. There is a need for full-fledged reforms in distribution of power but realistically, before that happens, the state governments need to be more amenable to the privatisation process. With the governments goal of providing Power to All by 2012 and with more IPOs lined up, the power sector is expected to receive large amounts of investments.

On the flip side, market-oriented reforms in the telecom sector have paid off with India now adding 7 -8 million mobile subscribers each month. Tariffs are also among the lowest in the world. Total telephone subscribers have reached over 250 million and most of this growth has happened over the last 2-3 years. Tele-density has risen from 3% in 2002 to 13% in 2006 and currently stands at 23%.

Private investments in national highways, ports, airports and railways have begun to flow, but this flow has to be a deluge, not a trickle.

But then there are the soft infrastructure issues that also pose a challenge there is a need to increase investments in primary education and health care. Currently less than 3% of GDP is spent on education and 1% on health care. There are investment opportunities in these sectors as well but to improve soft infrastructure across the country, the government will need to undertake systemic reforms.

So far, the Indian economy has withstood the test of political coalitions, rising oil prices, spikes in inflation, appreciation in the currency and stock market corrections  still the economy has enough steam left to catapult it into the big league. This is ample testimony that Indias economic fundamentals are well entrenched.

Today, action has decisively shifted towards emerging markets with the BRIC economies alone accounting for over 10% of world GDP. For India, the change in the business environment is not entirely captured in macroeconomic numbers.

The mood of Indian business has been anything but sombre  it is almost defiant. The ambition and confidence of corporate India has grown dramatically. Indian M&A has been swelling, both inbound and outbound. Last year, M&A activity in India stood at over $50 billion with over 660 deals. Seven of these deals were over $1 billion in size.

This growth momentum is expected to continue in 2008. Besides wanting to be a part of the India story, the more pertinent question today is whether your business can afford not to be in India?

India is sitting on a human capital goldmine. It has one of the worlds youngest skilled work force. India generates over 11 million jobs annually, higher than any other emerging country. It is no wonder that India accounts for 65% of the global industry in offshore IT and 46% of the global BPO industry.

One of Indias greatest strengths is that it holds the dual advantage of a low cost, English speaking and highly skilled workforce. Every year, India produces around 2.5 million university graduates, including 400,000 engineers and 200,000 IT professionals.

Unfortunately, not all of them are directly employable. A recent study revealed that only 25% of engineering graduates and 10 to 15% of general college graduates are suitable for direct employment in the outsourcing industry. This means that the need for additional training is imperative. It is, however, ironic that in a country of over 1.1 billion people, we are increasingly struggling with skills shortage. The shortage of the talent pool gets further skewed when wage wars spiral just to attract or retain talent. So how India manages and effectively trains its human resources will determine its course of competitiveness in the global markets.

The opportunities in India are aplenty and the returns are there for all to see. Yes, investing in India requires patience and time. The reform process is irreversible, though the pace needs to increase. As the worlds largest and possibly noisiest and most opinionated democracy, consensus building is a must for change. This has its own trials and tribulations but it is a small price to pay for a free market. Nonetheless, with Indias need and capacity to absorb investments, newer opportunities will keep emerging and we are confident that global investors will continue to view India favourably in the years to come.


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## Bushroda

*Nano is the right car at the right time*
By Hamish McRae
The Independent, London
January 28, 2008

India's "one-lakh car" is an idea whose time is come. It is great step forward for the burgeoning Indian middle class, bringing safe, affordable personal transport to families.

It is also a triumph for Indian engineering, demonstrating that it is able to achieve something that the established manufacturers of the developed world have conspicuously failed to do.

And while more cars on the planet will mean more fuel consumed, this small, efficient vehicle represents a more sustainable environmental path than that chosen by the other growing economic power, China.

The new car fills the gap between a standard mini-car and a scooter or motorcycle, a gap only partly filled by a tuk-tuk, those little three-wheelers that serve as taxis not just in India but in much of south-east Asia

India's economic take-off  growth was close to nine percent last year  is lifting millions of people of out poverty into a new middle class but it is a middle class that is by Western standards still poor.

For these people, the only way of having mobility is either the scooter option, terrifying and dangerous, or scratching together enough money to buy a patched-up second-hand car.

It's the the same transition as in 1930s Britain, when the Austin 7 began to supplant the motorcycle and sidecar, or in the impoverished post-war years when the Fiat 500 and 2CV Citroen brought motoring to the masses on the Continent.

The "one-lakh car", at 100,000 rupees or about R17 500, is aimed at a similar market to that of the Austin 7 but it is much better engineered

European and Japanese manufacturers build small cars but they do not try to build really cheap ones because they can't make money out of them.

Our smallest cars, such as the Smart, are cute little jewels designed to make owners feel good rather than meeting basic motoring needs.

China has followed the West, producing relatively large cars, often rip-off copies of Western designs, so it has a less fuel-efficient car fleet than France and probably the UK.

Which leads to the environmental issue. It's easy for people in the comfortable West to voice concern at the prospect of a billion Indian people owning cars, for we are aware of the social and other costs of mass motoring. But that is also arrogant and economically illiterate.

It is arrogant to hold that hard-working Indians should not be bright enough to chose how they should spend their salaries. It is illiterate for a host of reasons.

*Middle-class lifestyle*

One is that it won't be a billion people because car use in India will remain far below developed-country levels for generations. Another is that if India is to retain its middle class, essential for transforming the lives of the whole society, it has to be able to offer it a middle-class lifestyle.

Another is that a more modern car fleet will be, safer, more efficient and less polluting. Still another is that when, in a decade or so, India becomes a larger economy than the UK, the energy consumption of its vehicle fleet will still in all probability be lower than ours. That is not true of China.


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## Bushroda

*Indian BPO industry eyes $50 bn revenue*
30 Jan, 2008, 0320 hrs IST, TNN

BANGALORE: The Indian BPO industry has set an aspirational target of touching $50 billion in revenue by 2012. This would be a five-fold growth over the next five years. The sector will also see an addition of 2 million people in the same period.

However, the Nasscom and Everest Groups report  Nasscom-Everest India BPO Study, Roadmap 2012: Capitalizing on the Expanding BPO Landscape  added that there were a few challenges in achieving the goal including shortage of employable talent, lack of physical and social infrastructure especially in tier II and III cities and rising wages.

Nasscom president Som Mittal said, the Indian BPO sector has evolved tremendously since its inception, not only in size but also in maturity - service lines, service delivery capability and footprint. This $11-billion industry today employs more that 7 lakh people across 25 countries and accounts for 40% of the global BPO offshore market. The future potential is even larger.

The Nasscom-Everest study covered over 60% of the Indian BPO market including buyers, suppliers and captive BPO organizations. Everest Group Country Head Gaurav Gupta said, If the sector just continues on its CAGR growth of over 35%, it will touch about $30 billion but we are aiming for $50 billion. This aspirational target can be achieved if the challenges inlcuding skills shortage and infrastructure can be overcome.

There is headroom for further growth since the addressable market opportunity is pegged at $220-280 billion. Added Raman Roy, CMD of Quatrro, the right choices by stakeholders of the Indian BPO industry will decide and impact this potential five-fold growth. While the aspired target is aggressive  it is definitely achievable, and will bring huge payoffs to Indias economy, employment and development, he added.

The report has identified eight action themes to act on to reach the potential. They include protecting Indias cost advantage; creating BPO hubs with enabling physical and social eco-system to drive BPO-led growth broader and deeper within India and increasing employability and access untapped talent pools by creating greater linkages between the current education system and the needs of the BPO industry, and facilitating the development of BPO-specific education models.

The study said, while the United States would continue to be the largest BPO opportunity for India up to 2012, there were significant untapped opportunities in Britain, Europe and Asia Pacific. It added that India would also have to gear up to face increased competition from emerging back-office services destinations like China, the Philippines and Vietnam.

The domestic BPO market with a growth rate of about 50% over the last five years has grown faster than the overall Indian BPO market to reach nearly $1.6 billion by FY08. Tapping significant opportunities for domestic businesses, such as banking, retail, insurance, media, telecom and government provides an additional $15-20 billion opportunity for the industry.


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## Neo

*Indias outsourcing industry sets $50bn revenue target*​
BANGALORE: Indias outsourcing industry on Tuesday set itself the goal of lifting revenue almost five-fold to 50 billion dollars by the end of 2012 by tapping new markets and a booming local economy. The target set by the National Association of Software and Service Companies (Nasscom) was based on a study that said the industry could accelerate growth by an annual 50 percent in the next five years from 35 percent in the last five. The study sponsored by Nasscom and conducted by consulting company Everest Group estimated the size of the untapped outsourcing market at about $280 billion. Accelerated growth to capture the addressable spend in the international and domestic market could take the industry to $50 billion by 2012, the study added. 

The targeted growth can create two million direct jobs in India and add up to 2.5 percent to the nations economic output, said the study. Indias outsourcing industry, excluding large software makers, has grown to $11 billion in annual revenue and 700,000 people by head count by doing work for global companies at a fifth of the cost in the US or Europe. We have barely scratched the surface so far, Nasscom president Som Mittal told a news conference in this southern Indian city where he released the findings of the study. The industry is now at an inflection point, ready to take off. afp

Daily Times - Leading News Resource of Pakistan


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## Bushroda

*Engaging India: Road to progress*
By Jo Johnson, South Asia bureau chief
Financial Times, UK
January 31 2008 01:43

*Engaging India is an online column analysing the issues, trends and forces behind the business and politics shaping India and its impact on the world. Engaging India appears Thursday mornings exclusively on FT.com India, a dedicated online section on India, and is written by Jo Johnson, the Financial Times South Asia bureau chief; Amy Yee, New Delhi correspondent; and Joe Leahy, Mumbai correspondent.*

Many had come to believe that they would never see this day. More than two years behind schedule, the expressway linking New Delhi to its airport and to Gurgaon, a fast-growing satellite city teeming with malls and call centres, has opened at last. The 27.7km highway, the busiest inter-city route in India, will halve the journey time to the airport and slash perhaps 40 minutes off the nightmarish ride out to Gurgaon. A modest achievement by east Asian standards, it is real progress for India.

For years, the failure to attend to the chronic congestion on this critical artery suggested a disregard for the negative first impression that the road, like the dismal airport itself, left in the minds of overseas visitors.

Many first-timers to India, finding themselves trapped in truck-choked traffic on their way into town, would rub their heads in bemusement at the suggested coupling of India with China and fight off an urge to head straight back to the airport. The new road, which completes a crucial part of the New Delhi-Mumbai leg of the Golden Quadrilateral highway, is far from perfect. There are no pedestrian footbridges or underpasses, for example, an oversight that has prompted a hunger strike by locals; and teething problems with the concessionaires tollgates have this week been causing self-defeating 40-minute tailbacks. But it remains the best thing to have happened to the capitals infrastructure since the opening of the Delhi metro in 2002.

The airport itself will also soon be transformed. A consortium led by GMR Group, an Indian infrastructure company, and Fraport, owner-operator of Frankfurt airport, is overhauling a structure that has become a national embarrassment. Indira Gandhi Internationals leaky ceilings, flickering neon lights and worn-out linoleum will soon fade from memory. GMR is promising a state-of-the-art new terminal by 2010, by which time the airport should have its own metro line to the city centre.

The buzz surrounding these incremental improvements to the capitals infrastructure is part of a bigger change now under way as India starts to make up for decades of under-investment. It is becoming possible to see snatches of a future in which Indias infrastructure is not wholly dysfunctional, a day when visiting Chinese businessmen do not split their sides laughing at the idea that a country many still write off as a large, exotic basket-case might soon emerge as a potent manufacturing rival.

The government is alive to the urgency of the infrastructure challenge. Its latest five-year plan, which calls for infrastructure spending of $492bn by 2012, up from $200bn in the prior 60-month period, is ambitious. But it remains more of an aspiration than a promise. The government plans to contribute just 30 per cent of the total, some $149bn, leaving the rest to the private sector, a tall order in the absence of a developed corporate bond market and a stable regulatory environment.

The electoral cycle is unlikely to help the government harness its available resources for infrastructure. In the run-up to a general election that must be held by May 2009, technocrats in the government will come under intense pressure to prioritise populist projects with an immediate pay-off, a trend already evident in the policymaking paralysis over whether to pass on rising fuel prices to heavily subsidised consumers, rather than ones with distant  but more lasting  returns to the economy.

The Congress party, which leads the United Progressive Alliance coalition, is showing signs of electoral nerves. It performed poorly in all five state assembly elections held last year. It lost power in two states (Punjab and Uttarakhand), clung on in one small state (Goa), was humiliated in Indias most populous and politically most important state (Uttar Pradesh) and failed to oust the Bharatiya Janata party from power in Decembers closely watched two-way fight in Gujarat.

There is mounting pressure on Palaniappan Chidambaram, who as finance minister has made progress in reducing the fiscal deficit, to deliver an electioneering peoples budget on February 29. Combined with a looming public sector pay review, this could unravel much of his good work. Some Congress leaders see the budget as a last chance to buy votes with handouts aimed at softening the sting of widening inequalities between rich and poor, urban and rural areas and upper and lower castes.

The government is aware that even though overall poverty levels are falling, in a country in which up to 800m still survive on under $2 a day, there are large numbers who, in relative terms, feel poorer and angrier than ever. Manmohan Singh, Indias thoughtful prime minister, warned in a speech to a business group last year that if the wealthy did not behave in a more socially responsible manner, the countrys growth process could be at risk. Our polity may become anarchic and our society may get further divided, he said.

While Mr Singh knows that investment in physical and social infrastructure would be the best way to promote inclusive growth, it is unlikely that he will be able to stop the Congress party  hardly immune to the appeal of a return to the politics of envy  from squandering resources on redistributive measures with more immediate political payoffs ahead of the election. New Delhi, then, will not be built in a day. But the changes afoot in the capital may herald the beginning of the end of Indias long infrastructural nightmare.


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## Bushroda

*Economy to expand 9.1% in FY08: NCAER*
Reuters
January 30, 2008

New Delhi, January 30: The Indian Economy is expected to grow 9.1 percent during 2007/08, slightly slower than 9.4 percent last year, mainly due to a moderation in industrial growth, an economic think-tank said on Wednesday.

The growth projection is higher than the 8.9 percent that the National Council for Applied Economic Research (NCAER) forecast in October, and also from the 8.5 percent pegged by the central bank.

The NCAER said industry is expected to expand by 9.1 percent during 2007/08, compared with 11 percent a year earlier, while services sector will grow by 10.9 percent, compared with 11 percent last year.

High capital inflows supported investment, while a favourable monsoon boosted farm output, the NCAER said. Farm output will be higher by 3.8 percent during 2007/08, compared with 2.7 percent in the previous year, it said.

NCAER expects inflation to be around 4.5 percent by the end of this fiscal year, lower than central bank's forecast of 5 percent.

It also retained its forecast of fiscal deficit at 3.3 percent of gross domestic product for 2007/08.


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## Bushroda

*India to spend US$800mn on rail network expansion*
India Infoline News Service / Mumbai Jan 30, 2008 14:59

*The investment will include plans to double the existing rail tracks in cities on critical routes, traversing Maharashtra, Karnataka, AP, Orissa, and Chhattisgarh*

India's railway network, already one of the world's largest, is expected to become even larger with the South Asian nation considering an ambitious project that could cost more than US$800mn and include the doubling of existing rail tracks along some of the country's busiest transport corridors.

To combat inadequate infrastructure that has constrained economic growth, the Government of India and the Asian Development Bank (ADB) are preparing an investment program designed to increase the capacity and enhance the efficiency of India's railway sector.

The Japan Special Fund is providing a grant of up to US$1mn for the preparation of the Railway Sector Investment Program, and India will provide US$250,000 in logistical support. The Government of India asked the Asian Development Bank (ADB) to prepare the Railway Sector Investment Program for possible ADB financing of the railway expansion project, which could involve an ADB loan of US$500mn and a total project cost of more than US$800mn.

The Investment Program will include plans to double the existing rail tracks in cities on critical routes traversing the states of Maharashtra, Karnataka, Andhra Pradesh, Orissa, and Chhattisgarh, and to enhance the capacity and efficiency of state-owned Indian Railways, which operates the nation's rail network. The Program also will include electrifying other lines passing through the states of Maharashtra, Karnataka, and Andhra Pradesh.

Railways are a significant component of India's transport sector. In 2006, railways carried 5.73bn passengers and 666.51mn metric tons of freight, up 6.5% and 10.7%, respectively, from a year earlier.

"Doubling rail tracks on critical routes would increase the physical infrastructure, while the use of modern signaling systems that can raise the capacity of the existing tracks would improve efficiency," said Prodyut Dutt, Senior Transport Specialist of ADB's India Resident Mission.

The Indian economy has become a leading global performer in recent years. However, poverty remains high, and faster economic development to promote broad-based economic growth and reduce poverty is needed. Transport infrastructure development programs are high priorities for the government, making ADB's strategy of reducing poverty through infrastructure-led growth especially relevant.


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## Neo

*Economy to expand 9.1% in FY08: NCAER​*
January 30, 2008 

New Delhi, January 30: The Indian Economy is expected to grow 9.1 percent during 2007/08, slightly slower than 9.4 percent last year, mainly due to a moderation in industrial growth, an economic think-tank said on Wednesday. 

The growth projection is higher than the 8.9 percent that the National Council for Applied Economic Research (NCAER) forecast in October, and also from the 8.5 percent pegged by the central bank. 

The NCAER said industry is expected to expand by 9.1 percent during 2007/08, compared with 11 percent a year earlier, while services sector will grow by 10.9 percent, compared with 11 percent last year. 

High capital inflows supported investment, while a favourable monsoon boosted farm output, the NCAER said. Farm output will be higher by 3.8 percent during 2007/08, compared with 2.7 percent in the previous year, it said. 

NCAER expects inflation to be around 4.5 percent by the end of this fiscal year, lower than central bank's forecast of 5 percent. 

It also retained its forecast of fiscal deficit at 3.3 percent of gross domestic product for 2007/08. 

Economy to expand 9.1% in FY08: NCAER


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## Neo

Thread to be continued here: 

http://www.defence.pk/forums/economy-development/9557-indian-economy-news-updates.html


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## Bushroda

> Continued from the old thread
> *http://www.defence.pk/forums/economy-development/1418-indian-economy-watch.html*



*GDP records 18-year-high growth rate of 9.6 per cent in 2006-07*
31 January 2008

Mumbai: The Indian economy grew 9.6 per cent during fiscal 2006-07, up from 9.4 per cent in the previous year, the highest in 18 years, according to revised estimates released by the finance ministry.

"Gross domestic product (GDP) at factor costs at constant prices in 2006-07 is estimated at Rs28,64,309 crore as against Rs26,12,847 crore in 2005-06 registering a growth of 9.6 per cent during the year as against the growth rate of 9.4 per cent during the previous year," an official statement said today.

This prompted comments from finance minister P Chidambaram that the economy is poised to grow at around 9 per cent in the current fiscal as well.

"I still maintain that in the fiscal year '07-08 growth will be close to 9 per cent," he said.

Per capita income at current prices grew to an estimated 14.2 per cent to Rs29,642 in 2006-07 from Rs25,956 in the previous year.

The 9.6 per cent GDP growth during 2006-07 has been achieved due to high growth in mining and quarrying (5.7 per cent), manufacturing (12 per cent), electricity, gas and water supply (6 per cent) and construction (12 per cent), according to quick estimates released by the Central Statistical Organisation (CSO).

The all around improvement in the mining, manufacturing and services sectors also helped offset the slower growth in agriculture sector, the release said.

While the agriculture sector grew at 3.8 per cent, down from 6.1 per cent, manufacturing sector recorded 12 per cent growth against the 9 per cent growth recorded in the previous year.

At constant prices (1999-00), the share of agriculture, forestry and fishing in the GDP stood at 18.5 per cent in 2006-07, down from 19.6 per cent in the previous year.

The share of manufacturing sector in GDP rose to 15.4 per cent from 15.1 per cent during the previous year. Likewise, mining and quarrying sector growth also improved from 4.9 per cent to 5.7 per cent.

Construction sector growth has been revised upward to 12 per cent, against 10.7 per cent estimated earlier.

The share of financing, insurance and real estate in the GDP also increased to 14.3 per cent in 2006-07, against 13.8 per cent in the previous year.

The share of food items in final consumption expenditure at current prices stood at 36.4 per cent in 2006-07, marginally up from 36.3 per cent in 2005-06.

The share of transport and communication went up to 17.5 per cent from 17.3 per cent during the previous year, while the share of gross rent, fuel and power consumption declined from 12.6 per cent in 2005-06 to 12 per cent in 2006-07.

In the current financial year (2007-08), the economy grew at 9.3 per cent in the first quarter and at 8.9 per cent in the second quarter.


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## Bushroda

*Economic growth will top 9%: Chidambaram*
Thursday, 31 January , 2008

New Delhi: Riding on an investment boom and swift policy action, the Indian economy will grow at 9 per cent during the current fiscal despite the global financial turbulence, Finance Minister P. Chidambaram said here Friday.

"We are confident that if we keep firm hands on the wheel, the Indian economy will sail through turbulent waters," the finance minister told reporters here, even as the estimate of India's growth last fiscal was raised to 9.6 per cent.

"I will still maintain that in the fiscal year 2007-08, growth will be close to 9 per cent," he said, adding that his government would also make quick decisions as the global situation may evolve and warrant.

"We are not making policies and we are not taking our administrative steps in a vacuum. We are doing so where there is heightened uncertainty and we are making rapid adjustments," the finance minister added.

Asked if he saw the current turmoil in the global financial system, especially the situation in the US, impacting the Indian economy, Chidambaram said: "It is too early. Let us wait for a day or two."

The finance minister's remarks came soon after the state-run Central Statistical Organisation (CSO) revised the growth estimate in India's gross domestic product (GDP) for 2006-07 to 9.6 per cent from 9.4 per cent earlier.

"It is a matter of considerable satisfaction that despite the turbulences and heightened global uncertainties, our economy grew by 9.6 per cent and estimated to grow close to 9 per cent this year," Chidambaram said.


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## Bushroda

*Economy to grow 9% on investment boom*
1 Feb, 2008, 0305 hrs IST

NEW DELHI: Buoyed by revision in growth estimates for 2006-07, finance minister P Chidambaram on Thursday exuded confidence that the country would grow close to 9% this fiscal on the back of an investment boom.

The economy grew faster in 2006-07 than previously estimated and clocked 9.6%, highest in 18 years. Earlier estimates had pegged the growth rate in 2006-07 at 9.4%. Mr Chidambaram emphasised the government could make rapid policy adjustments to sustain the high growth in the wake of heightened global uncertainties.

It is a matter of considerable satisfaction that despite turbulence and heightened global uncertainties, our economy grew 9.6% in 2006-07 and is estimated to grow close to 9% this year. It is difficult to say which side of 9% it would be. However, if it falls on the right side, Ill be doubly happy, he said. He added that economic think-tank NCAER had forecast a GDP growth rate of 9.1% for 2007-08.

The new revisions put the countrys average growth over the past three years at 8.8%. This shows that since the United Progressive Alliance came to power, there has been an investment boom, people are investing and they have confidence in future, Mr Chidambaram said.

According to the revised figures released by the Central Statistical Organisation (CSO) on Thursday, the countrys per capita income growth rate stood at 8.1% in the last fiscal. It also revised upwards economic growth rate in 2005-06 to 9.4% from the earlier 9.0%.

My goal is to maintain the same level of growth but, at the same time, the government reserves the right to make rapid adjustments depending upon evolving global economic situation. Despite turbulence and heightened uncertainty, our economy is growing at 9.4% (2005-06), 9.6% (2006-07) and is estimated to grow at close to 9% (2007-08), Mr Chidambaram said.

We are not making policies and we are not taking administrative steps in a vacuum. We are doing so where there is heightened uncertainty and we are making rapid adjustments. We are confident that if we keep firm hands on the wheel, the Indian economy will sail through turbulent waters. We are maintaining a balance between growth and inflation, he said, adding that inflation is still below 4% and growth is well above 8%.

In response to a question, Mr Chidambaram said that it is too early to draw any clear conclusion on the impact of the recent US federal reserves interest rate cut by 75 basis points. Let us wait for a day or two, he said.

The improved growth in the GDP during 2006-07 has been achieved due to all-round improvement in mining, manufacturing and services sectors, which helped to offset the slower growth in agriculture sector.

While agriculture sector grew by 3.8%, down from 6.1%, manufacturing sector recorded 12% growth, which is substantially higher than 9.0% growth recorded in the previous year. The economy expanded by 9.3% in the first quarter and 8.9% in the second quarter of this fiscal.

The rising interest rates have apparently taken a toll on industrial production which nose-dived to 5.3% in November 2007 against a whopping 15.8% a year ago. During the first eight months of this fiscal, the index of industrial production slid to 9.2% from 10.9% during the corresponding period a year ago.


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## Bushroda

*Business Books: Weaving parallels between China and India*
By Tom Miles
Guardian, UK
Thursday January 31 2008

HONG KONG, Jan 31 (Reuters) - Whoever first thought of boiling investment decisions down to a simple trade-off between "risk and reward" should try fathoming the world's two most populous markets.

Many an investor has been lured by the the siren songs of a billion consumers in China or the world's largest democracy in India, only to drown in oceans of bureaucracy or be stranded by an unreliable partner.

In "Billions of Entrepreneurs" (Harvard Business School Press, $29.95), Tarun Khanna seek to reassure potential investors with tales of how others have steered their businesses in these difficult waters.

Khanna, a Harvard Business School professor, writes that colleagues and friends frequently ask "Can I really make money in China and India?" The answer is a resounding "yes," qualified by the need to know what you are getting into and to prepare for the long haul.

"Landing on foreign soil to make a quick buck virtually never works," he writes. Khanna, a Harvard Business School professor, contrasts the two countries in areas as diverse as technology, healthcare, movie-making, oil, banking and agriculture, but rarely, if ever, pronouncing one to be better than the other.

*SO MUCH TO BE DONE*

Khanna chides such black-and-white thinking. "The pundit's favourite issue, of 'who wins,' China or India, misses the point."

Aside from size and rapid economic growth, the two countries are very different: communist versus democratic, an planned economy with an iron will versus a muddled and arbitrary bureaucracy, a unitary state versus the most diverse nation on earth.

To illustrate the pitfalls of comparisons, he unpicks data on foreign direct investment. At first, it seems heavily in China's favour, but after he strips out anomalies, a more balanced picture emerges.

The temptation to take such data at face value is not confined to foreigners.

"Even managers of the Asian companies I visited were sure that their Indian operations outperformed their Chinese operations but were convinced that the Chinese operations mattered more to headquarters," he writes.

He suggests that businesses should recognise the depth and complexity of both markets -- and the opportunities within.

"My thesis is that entrepreneurship in developing countries occurs in far more encompassing and far-reaching ways than in more developed settings -- for the simple reason that there is so much more to be done."

Khanna's optimism leads him to glass-half-full assessments, such as an appreciative view of the Chinese Communist Party.

"Competition and factionalism within the party in fact propel a meritocracy in which the best and the brightest people percolate to the top," he writes.
Khanna highlights one multinational that he says has successfully put a foot in both India and China: General Electric Co .

Unlike Unilever and Procter & Gamble , which focused on India and China respectively, GE neglected neither.

"General Electric is one of the few multinationals that has understood the value of getting its Chinese and Indian operations tightly aligned, with each other and with the rest of the global corporation," he says.

To replicate this rare success, a company needs humility, adaptability and "largesse," which he describes as "giving back handsomely to the countries in which it operates."

"The crucial lesson of companies like General Electric," he concludes, "is that enlightened self-interest need not be a zero sum game."


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## Bushroda

*Indian Asset Management Industry has Tremendous Expansion Opportunities*
FoxBusinessWire
Thursday, Jan. 31 2008

PALO ALTO, Calif., Jan 31, 2008 (BUSINESS WIRE) -- Mutual funds have become the preferred investment option for Indian investors as improved regulations lead to better transparency in stock markets and asset management companies. An expanding range of products catering to different needs as well as emerging opportunities such as global and real estate funds will keep the industry buoyant in the coming years.

New analysis from Frost & Sullivan (Frost & Sullivan's global team of industry experts, consultants, market analysts, and research executives offer business consulting, market analysis, market research.), Indian Asset Management Industry - Investment Analysis, expects the Indian asset management industry to grow at more than 20.0 percent for the period 2006-2013.

If you are interested in a virtual brochure, which provides manufacturers, end users, and other industry participants an overview of the latest analysis of the Indian Asset Management Industry - Investment Analysis, then send an e-mail to Sara Villarruel - Corporate Communications at sara.villarruel@frost.com with the following information: your full name, company name, title, telephone number, e-mail address, city, state, and country. We will send you the information via e-mail upon receipt of the above information.

"The Indian asset management industry is witnessing rapid growth as a result of an economic boom, increase in personal financial assets, entry of foreign asset management companies, favorable stock markets and aggressive marketing by mutual funds," notes Frost & Sullivan Research Manager Kirti Timmanagoudar. "Even though the value of assets under management (AUM) has risen by 48.22 percent between June 2006 and June 2007, the relatively low penetration rate of mutual funds greatly contributes to industry opportunities."

The Indian asset management industry is still in the nascent stages of growth when compared to developed countries. For example, in the United States, assets managed by mutual funds represented 78.6 percent of GDP at the end of 2006, whereas in India they accounted for a meager 6.6 percent. This notable difference indicates the enormous market potential in India.

Furthermore, retail investors continue to deposit household savings in banks. The huge amount of bank deposits strengthens growth potential, given that they present the opportunity to convert cash and deposits into mutual funds. In the United States, mutual funds manage about 20 percent of total household financial assets whereas Indian mutual funds only managed 3.6 percent between 2005 and 2006.

Despite the huge potential, the rural sector's limited participation greatly restrains the industry's growth. Mutual funds remain out of reach for a majority of the rural population due to poor distribution, lack of investor awareness and limited banking facilities. Moreover, asset management companies reluctantly invest in infrastructure for smaller towns due to the lower margins from rural businesses.

"The technological innovations and conveniences offered by the asset management industry cater largely to the urban investors," says Timmanagoudar. "Due to the poor penetration of the Internet, mobile phones and ATMs in rural areas, mutual fund investments are not within the easy reach of the rural investor."

Considering these restraints, banks and asset management companies should share the responsibility of reaching out to the rural economy. The introduction of Systematic Investment Plans (SIPs), which allow investments as low as Rs. 100 ($2.5) per month, represent one of the first steps toward tapping the rural economy.

Indian Asset Management Industry - Investment Analysis is part of the Financial Services Asset Management Growth Partnership Services. It provides an analysis of the key market drivers, market restraints, investment themes, merger and acquisition history, potential initial public offerings, and the Frost & Sullivan Growth Monitor. In this research, Frost & Sullivan's expert analysts thoroughly examine the following segments: debt, equity, Equity Linked Savings Schemes (ELSS), liquid/money market, and GILT funds. Interviews with the press are available.

Frost & Sullivan, the Global Growth Consulting Company, partners with clients to accelerate their growth. The company's Growth Partnership Services, Growth Consulting and Career Best Practices empower clients to create a growth focused culture that generates, evaluates and implements effective growth strategies. Frost & Sullivan employs over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 30 offices on six continents.


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## Bushroda

*12 Indian firms join $1bn profit club*
Asian Age

Hyderabad, Jan. 31: Riding on a resurgent economy and a stronger rupee, ranks of billion dollar Indian companies  those which have a net profit of over $1 billion  are set to swell, if the third quarter numbers are anything to go by.

A few short years back, only a handful of Indian companies, largely from the public sector had a net profit of over a billion dollars. This included three oil companies  ONGC, Indian Oil and Reliance along with the State Bank of India.

Public sector majors SAIL and NTPC had also crossed a $1 billion a year in profit in the interim. With the exception of Reliance, it was an exclusive public sector affair. After five years of Indias biggest bull market and near double digit GDP growth, they are now getting company.

Going by the results of the third quarter, a number of new entrants from the IT, telecom, real estate and commodity sectors will take up the total to a dozen. Some of these, such as DLF and NTPC are newly listed companies.

Tata Steel, which had acquired British company Corus has recently reported its consolidated results  a net profit of Rs 9,703 crore  a little under $2.5 billion for the first six months of FY08. DLF, which came out with its initial public offering in 2007, will also make the grade.

Bharti Airtel, which came out with its numbers on Wednesday has recorded a profit of Rs 4,848 crore over the last nine months, which translates to a profit of $1.23 billion for the period.

Anil Ambanis Reliance Communication, which declared Q3 numbers on Thursday, has recorded a profit of $977 million for the first three quarters.

Despite their woes stemming from the combined weakness of the dollar and the US economy, IT companies too are moving up. Infosys and TCS have clocked profits of $820 million and $957 million respectively for the first three quarters.

Unless the fourth quarter goes drastically wrong, these too should see a net of over a billion dollars.


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## Bushroda

*RENT ON THE RISE*
*Indian cities part of increasing property prices in Asian market*

BY CHRIS NELSON

India may be a developing economy, yet it is home to some of the most expensive cities in the world, according to a pair of surveys issued in recent months by Employment Conditions Abroad Ltd., an international human-resources membership organization.

The group, which has corporate offices in London, New York, Sydney and Hong Kong, ranked Mumbai the seventh-costliest city for rental accommodations in a survey released last May. The findings mirror a general upward trend in the cost of living in Asian cities, as the continent accounts for five of the world&#8217;s top-10 most expensive municipalities. Employment Conditions Abroad &#8211; better known as ECA International &#8211; ranked Hong Kong and Tokyo at the top of the list, Seoul at five, Mumbai in the seventh spot, and Shanghai at eight. New York City (three), Moscow (four), London (six), Caracas (nine) and Paris (10) make up the rest of the list.

&#8220;Comparing the cost of renting an unfurnished three bedroom apartment, ECA&#8217;s data shows that Hong Kong is by far the most expensive city, with an apartment in a popular expatriate area costing approximately $8,592 per month on average," Lee Quane, general manager of ECA in Hong Kong, said. &#8220;That&#8217;s 17 percent more expensive than the average rental price in Tokyo, which ranked second in the survey, and 150 percent more expensive than 15th-placed Singapore."

Quane attributed the runaway cost of renting an apartment or home in Asia to a number of factors, such as the lack of developable land, which has put a premium on open space and necessitated government intervention in many cities; as well as rising demand for high-end developments, as many global financial firms are strengthening their presence in Asia&#8217;s largest cities.

Undertaken annually, ECA International&#8217;s Accommodation Survey compares rental costs in 92 cities around the world. The data is incorporated into the organization&#8217;s Accommodation Reports, which ECA International member companies use to calculate housing policy and allowances for their internationally mobile staff.

Separately, Jones Lang LaSalle Meghraj &#8211; the Indian operation of Chicago-based real-estate and money-management-services firm Jones Lang LaSalle &#8211; identified five major obstacles that threaten the long-term growth of the Indian real-estate sector. Those bottlenecks, published in a report in early January, are:

* An absence of title insurance against defective titles
* Difficulty for foreign investors in finding suitable Indian partners for foreign direct investment
* Varying rules regarding land in different states
* Difficulty in executing projects due to a shortage of skilled workers
* Overheated land prices and inflated land valuations

The Associated Chambers of Commerce and Industry of India predicts that foreign direct investment in India&#8217;s real-estate market will reach $30 billion within a decade, pushing the sector&#8217;s total value to $102 billion.

Over the last decade, rental prices have increased an average of 22 percent in 57 cities, according to ECA International. Yet in other large Asian cities, such as Hong Kong, average rental prices for a three-bedroom apartment actually declined some 10 percent between 1996 and 2006. Quane attributes this trend to the Hong Kong government&#8217;s attempts to cool the local housing market during its height in the late 1990s by increasing the supply of dwellings.

This is not the case in India, where torrid economic growth has pushed up the cost of many goods and services. When coupled with the appreciation of the rupee against most major currencies, Indian cities have become substantially more expensive in recent years for expatriates, according to ECA International. The organization issued its Cost of Living 2007 survey of 300 locations worldwide last November, ranking four Indian cities in the top-200 most expensive places to live. In the rankings, Mumbai came in at number 177, up 14 spots from the year before; New Delhi rose 16 places to 178, Chennai settled at the 186th spot, followed by Hyderabad, which climbed 21 spots to number 189 on the survey. The survey ranked Bangalore the 205th most expensive city in the world &#8211; an increase of 15 places and the first time the city has fallen out of the bottom five spots in the survey.

Despite the higher cost of living for expatriate workers in Asia, ECA International projects that salaries continent-wide will outpace the global average by several percentage points, with India and Vietnam leading the way. According to ECA International&#8217;s Salary Trends Survey for 2007 and 2008, average salaries across Asia will rise approximately 7.5 percent &#8211; well above the expected global average of 5.9 percent.

India and Vietnam are expected to register the largest increases over 2006-2007 figures. ECA International projects that Indian workers will take home an average 14 percent more pay this year than in 2007, when salaries rose 12.6 percent, while in Vietnam, salaries should climb a solid 10 percent between 2007 and 2008. By contrast, salary creep among Vietnamese workers was 8.5 percent last year.

&#8220;These high increments are mainly the result of fast economic growth and widespread skills shortages, which are prompting companies to pay more for talent while keeping pace with the inevitable inflation that comes with economic development,&#8221; Quane said in the report.


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## Bushroda

*India manufacturing solid, but PMI dips 1.2 points to 60.7*
NTC Economics, UK

The seasonally adjusted ABN AMRO India Purchasing Managers Index (PMI) for the India manufacturing sector posted 60.7 in January, edging down from Decembers high of 61.9, but nonetheless remaining at a level indicative of a marked improvement in operating conditions.

The January PMI reading of 60.7 points toward continuation of elevated levels of activity in the manufacturing sector now seen since October 2007, said ABN AMRO Bank senior economist Gaurav Kapur. New incoming business continues to grow, though the pace of expansion was the slowest in January over the last four-month period. While domestic demand remains strong, external demand has been slowing. Export orders index has been sliding, after registering its highest reading in the 34-month survey history in October last year. This is related to a slowdown in the economy of one of Indias biggest exports market, the U.S. Overall, a strong order book position suggests that output levels could continue to witness marked expansion going forward. Operating profitability, however, could be squeezed, as the sector seems to be facing some margin pressures. Though both input as well as output price indices have been declining for the last three months now, signaling lower inflation, the output price index is coming off faster than the input price index.

Marked output growth was maintained in January, although the rate of increase eased to a four-month low. Strong market demand, mainly from the domestic market, and the successful acquisition of new customers bolstered levels of incoming new business in January.

Staffing levels in the Indian manufacturing economy rose at the fastest rate for twenty-five months in January, as firms recruited additional staff in anticipation of further growth of incoming new business.

Backlogs of work rose for the 10th consecutive month in January, albeit only weakly. Those firms that reported a rise in unfinished work linked the increase to sharp growth of incoming new business.

Indian manufacturers continued to increase their purchasing activity at a marked rate in January. Increased quantities of purchases contributed to higher pre-production inventory levels. Stocks of finished goods also increased, albeit only modestly.

Average charge inflation was the slowest for five months in January, with firms indicating that competition had restricted their ability to raise factory gate prices.

Input price inflation eased to a six-month low in January and was only moderate.


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## Bushroda

*India : GDP figures reveal strong performance in all sectors*
February 1, 2008

The latest CSO figure, raising GDP growth estimates to 9.6% during 2006-07, reflected the remarkable resilience and robustness the Indian economy has acquired over the years, said Mr Habil Khorakiwala, President, FICCI.

The detailed GDP figures reveal strong performance in all sectors of economy from manufacturing to construction, logistics and insurance and financial sector.

We are hopeful that this trend will continue during the current fiscal year as well, Mr Khorakiwala added.

It is important to notice that during the current year the economy is facing multiple challenges from rising oil prices, global credit crisis to threat of impending recession in the US economy.

Careful fine tuning of policy parameters  like interest rates - may be needed from time to time, Mr Khorakiwala believed.

*Federation of Indian Chambers of Commerce and Industry*


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## Bushroda

*Exports up 16% in Dec'07; meagre 2% growth* 
1 Feb, 2008, 1548 hrs IST, PTI

NEW DELHI: India's exports grew by a healthy 16.04% in December 2007 in dollar terms but managed a paltry improvement of 2.54% in rupee terms, impacted by a strong domestic currency against the US dollar.

Exports went up to $12.31 billion in December 2007 amid exporters' concerns over slowdown in the US economy and appreciation in rupee against the dollar.

In rupee terms, exports were valued at Rs 48,569.64 crore, growing by just 2.54% in December 2007.

Imports during the month were valued at $17.68 billion, up 18.06%, from $14.97 billion in December 2006. In rupee terms, imports increased by 4.31% to Rs 69,731.56 crore in December.

For the April-December period of 2007-08, India's exports stood at $111.04 billion, registering an encouraging growth of 21.76% from $91.2 billion in the corresponding period of the previous fiscal.

India's trade deficit for April-December period of the current fiscal widened by about 35% to $57.82 billion from $42.85 billion in the year-ago period.

"The export figures are encouraging. The next three months - peak period for exporters - are likely to see exports in the range of $40 billion," Federation of Indian Export Organisations Director General said.

He said at the current rate, exports would be in the range of $145-150 billion for 2007-08, falling short of the $160 billion target set by the government.

Commerce Secretary Gopal Pillai maintained that India will be able to achieve exports worth $150 billion despite the US slowdown and rupee impact.

Sahai, however, said cut in the US interest rates would lead to further appreciation of the rupee which would impact exporters' margins.

The rupee has appreciated by about 15% against the dollar in the last one year impacting export growth, particularly of labour intensive sectors such as textiles, leather, marine products and handicrafts.

Imports for the April-December period of current fiscal grew 25.97% to $168.87 billion, compared to 134.05 billion in the year-ago period, according to official data released on Friday.

In rupee terms, exports grew by 7.74% in April-December 2007, while imports were up by 11.54%.

Oil imports during December 2007 were valued at $5.96 billion, up 23.78% from $4.81 billion in 2006. For the nine-month period of the current fiscal, oil imports were to the tune of $49.31 billion, 11.68% higher than $44.15 billion in the corresponding period of previous fiscal.

Non-oil imports during December 2007 were $11.71 billion, up 15.34% from $10.15 billion in December 2006. During April-December 2007, non-oil imports grew 32.99% to $119.55 billion as compared to $89.89 billion in the same period of previous fiscal.


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## Bushroda

*Konkan Railway: 10 years of successful journey*
By Manish Desai

It was mid 90s. Ratnakar Shetty ran a successful Udipi restaurant in sub-urban Mumbai. He was a busy man for most part of the year.

But when his childrens school closed for summer vacations, Shetty yearned to visit his hometown near Mangalore and spend time with his parents. His family too looked forward for a break in the lush green surroundings of their native place. But journey wasnt any easy. He and his family had to perform an arduous road journey via Pune, Belgaum, often in cramped buses, lasting over 30 hours.

Reason  there was no direct rail link between Mumbai and the port town of Mangalore. This was the plight of all South Canara people, who had made Mumbai their home. But all that changed on January 26, 1998, when the through line operations from Mumbai to Mangalore began.

The Republic Day, ten years ago, was a red letter day for the Indian Railways. The day marked the dream come true of the Indian Railways most ambitious and most difficult project after Independence. It took seven years and almost $1 billion to complete the missing rail link between Mumbai and Mangalore, winding through the tough terrain of Western Ghats and crossing the rapid flowing coastal rivers in Maharashtra, Goa and Karnataka. It also marked the successful completion of the countrys first ever BOT (build, operate, transfer) project.

The Konkan Railway Corporation (KR) was formed on July 19, 1990 with participation of four states viz : Maharashtra, Goa, Karnataka and Kerala with the Indian Railways. Its mandate - raise your own funds and construct with speed and economy a railway connecting Mumbai with Mangalore and pay off the loans in the promised time. It was a sweeping challenge and it met its hero in Dr. E. Sreedharan, a veteran railway man known for brisk efficiency. He was persuaded out of his retirement and made the Chairman and Managing Director of the Corporation.

The largest railway project in this part of the world, threw up a whole range of difficulties - technical, financial, emotional and psychological. The rocky Sahyadris had to be bored through, 1,500 rivers had to be forded, a railway line had to be built out of nowhere. And once in a while, a poisonous snake, or a tiger, decided to take a close look at goings-on! In the face of collapsing embankments and unrelenting mountains, the engineers had to be tough. Family life took a backseat during those arduous years. Many engineers stayed away from their families during this period, not even returning home for festivals like Diwali. At the very least, working conditions were uncomfortable; in June 1994, Mahad had floods 10 to 12 feet above the road level, and when they receded, Konkan Railway jeeps had six-inch layers of silt on the seats.

Dr. Sreedharan had divided the length of 760kms into 7 sectors of approximately 100kms each. Each sector had a Chief Engineer with full freedom of decision making. And with the freedom came, a definite time target. Four concrete sleeper plants were set up to manufacture the 1.3 million sleepers required for the project. Besides this, cement, steel, explosives, rails and a hundred other things had to be delivered through harsh terrain. Depots were created for these. Wherever possible design was standardized to be built with pre-stressed parts cast elsewhere. International norms were followed in evaluating and short listing contractors. Their bids were decided upon within 72 hours of opening. Independent quality assurance inspectors were appointed.

The Government of India, recognizing Dr.E Sreedharans contributions in building the Konkan Railway and the Delhi Metro, has honoured him with Padma Vibhushan, the second highest civilian award in the country.

When the railway was opened to the public on Jan 26, 1998, it had scored many firsts. For the first time in India funds for the project were raised without touching the government coffers. The authorized capital of Rs.800 crore was pooled together by the railways and the four beneficiary states. This was leveraged by means of public bonds to the extent of Rs.2,250 crore. These bonds carried attractive rates of return, tax breaks and guaranteed repayment. The project also employed the least number of people in its management at its peak a mere 2400, in all.

Ten years hence, KR portrays the picture of an efficient and surging public sector enterprise. It posted an operating surplus of Rs 107.18 crore for the first nine months of the current fiscal, while the total earnings have touched Rs 326.76 crore for the same period. The total earnings for the entire year are expected to be Rs 468 crore. We expect to achieve a financial turn around within a year  says Anurag Mishra, Managing Director of Konkan Railways.

With two Special Economic Zones coming up near Navi Mumbai, a massive petrochemical SEZ near Mangalore and a new international airport at Navi Mumbai, the Konkan region is expected to see some hectic action on the economic front. To cater to the growing needs of people, Konkan Railway is planning to build more stations on its route. It is already served by 60 stations.

Beyond number crunching, KR is special in many other ways too. It has a worthy safety record and is credited with inventing the Anti-Collission Devise (ACD), which can prevent midsection head-on collisions, side collisions, and rear-end collisions of trains, in addition to having many other safety features. No other technology in the world offers these features for which the KR holds patent. The first pilot project of the ACD on Northeast Frontier Railway covering 1,736 kilometres was commissioned this financial year. Following this and the live demonstration of ACD to the delegates of International Railway Safety Conference held at Madgaon recently, KRCL has started receiving enquiries from various countries for implementation of ACD. Konkan Railway is also credited with the development of a full-scale proto-type of sky bus service for intra-city transport.

Konkan Railway has completed nine years of operation of RORO (Roll on Roll off) truck-on-train service on January 26. This innovative service has established that railways and roadways can exist in a symbiotic relationship. K R has earned more than Rs 90 crore from RORO service in nine years.

A journey along the Konkan Railway - through its bridges, viaducts and tunnels are a feast to the eye. It is an engineering marvel that has blended so harmoniously with the nature. The tenth anniversary is a time to celebrate and salute all those who rendered their dedicated service to complete the project in a record time of seven years. Had they executed it as a job, it could have perhaps taken 25 years. But K R was not an ordinary project. It was a mission.


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## Bushroda

*India's popularity as preferred edu destination growing:Hopp*

Chennai, Feb 01 :US Consul General David Hopper today said India was growing in popularity as a preferred destination for Education among American students.

Inaugurating the decennial celebrations of city-based Alpha College of Arts and Science at Porur, near here, Mr Hopper said educational exchange brings international understanding and there was a pressing need to encourage American institutions to link with Indian institutions.

More than two lakh American students study abroad each year and the number has grown by about 10 per cent annually over the past decade. ''I am pleased to note that India is growing in popularity as a destination for American students,'' Mr Hopper said.

Last year, India entered the list of top ten destinations, and this year the number grew by another 20 per cent. ''While this is good, the actual number of 2,115 students is too small. We need to do more to encourage American institutions to link with Indian institutions and to inspire Americans to come here to study,'' Mr Hopper added. ''During my more than 32 years as an American diplomat, I have had the first hand chance to see the value of international education and educational exchange,'' he said.

Of the 583,000 foreign students from over 200 countries, who were studying in US colleges and universities, 83,833 were Indians, he said adding the Indians form the largest single foreign group, even larger than China.

Prof S Ramachandran, Vice-Chancellor, University of Madras said education shaped not just individuals but the entire nation.

In today's knowledge-based economy, barely nine per cent of eligible candidates go in for higher education. - Bureau Report


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## Bushroda

*Free land in Mumbai from slums in prime areas*
Saturday , February 02, 2008 at 2251 hrs IST

Mumbai has long been the hub of industrial, commercial and business activities. As the commercial capital of India, the city contr ibutes significantly by generating over 50% of the direct and indirect taxes collected by the Union. The city plays home to most of the large Indian corporate houses and international ones as well, and determines the movement of the equity market in the country. Apart from playing a significant role in the overall Economy of the country, Mumbai has also emerged as a formidable force in the Asian region as an IFC (international financial centre). Economic growth is poised to jump by 2.4% quarter on quarter, and the GDP is growing close to double digits. The impact of this on job creation, net disposable income, livelihood and lifestyle uplift is tremendous. With more than 0.5 million additional jobs being created in the recent past, the direct impact on real estate, retail, and customer aspirations is being experienced today.

Upon examining the other side of the coin, however, indiscriminate growth and unplanned explosion of commercial activities has taken its toll on the city. Rapid economic growth has put tremendous pressure on the citys infrastructure, drastically affecting the overall quality of life. Housing, transportation, and other city infrastructure are under-provisioned and over-stressed. Drastic steps needs to be taken if the rate of economic growth and progress is to be sustained.

Many policy makers and the general public have serious reservations that this crumbling city cannot be turned around to a world-class city. However, the various initiatives undertaken by the state government as well as the private sector in the face of adversity, are commendable.

*Transforming Mumbai into a world city*

A lot of talk about transforming Mumbai into a Shanghai has been going on lately. We see one part of Shanghai completely transformed into a new, beautiful, well planned well-engineered, well-designed city.

But that is less likely to happen to our own Mumbai city. What Mumbai lacks is star Attractions and an identity of city for tourists, for citizens, for children, for business visitors, for all of Mumbaikars to be proud about. We have our very old beautiful heritage structures in southern Mumbai, a small hanging garden and a museum but its less likely to attract the people as well as of any interest to our own residents. Lots of land is available with the state and the central government, which is mostly under-utilised and is in bad shape but having lot of prime potential.

When we see any country all around world, they have developed a few star attractions in the city and it becomes the most pride of place to visit and creates a photogenic identity for city.

We need to create brilliant architectural masterpieces in these places, for which there is no dearth of resources nor vision nor creates in this great country. A lot can be achieved by Public Private Partnership in this. What is needed is a strong political and public fire power driving this dream to make this most vibrant city of India, as pride of India.

Infrastructure is sad and needs to be improved, for which we are seeing the government is trying to do a lot, of late now. If only we had a world-class infrastructure, even far away could be developed for this purpose, as is done by cities around the world. Because Greater Mumbais maximum population is settled in much smaller radius of city; there is potential to use all areas around Mumbai.

We need to create roads all over main artery road to make a free way access across city. We need to make High rises compulsory to free up the land of low clustered houses leaving no open spaces. A radically vibrant, out of box thinking is the need of hour.

A comprehensive master plan of all slum pockets need to be developed by dividing city into six zones. This will free very prime pockets of land in Mumbai city and massive infrastructure developments and star attractions for city can be created at Prime locations. All these can be at no cost to city, rather the city can earn thousands of crore from this master planning.

India is poised to be the worlds centre of admiration. Because this country has very great people. Any country can be great only with the support of its people, and we have superb assets in here. The need is to canalise this vibrant, hard working people to transform dream to reality and Mumbai can take lead to give shape to their vision....


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## Bushroda

*Finally, Some Helpful Passages on India*
02/02/08 - 10:17 AM EST

If you're an investor, you need to know about India. Unfortunately, before Riding the Indian Tiger came out, snappy, all-in-one primers on India's past, present and future had been hard to come by.

The list of companies that do business with India includes the likes of Sony (SNE - Cramer's Take - Stockpickr), Gap (GPS - Cramer's Take - Stockpickr), Microsoft (MSFT - Cramer's Take - Stockpickr), General Electric (GE - Cramer's Take - Stockpickr) and Wal-Mart(WMT - Cramer's Take - Stockpickr).

But the list of investors with experience in India, who know its regions, tendencies and opportunities, is short. And much of what is written about the country falls into one of two unhelpful categories: political bombast declaring that India is ever-powerful and will sink America, and the business hype jobs that call India a source of evergreen profit for the average investor.

What has seemed lacking, until now, is a balanced and digestible overview that tells a bit about India's history, a bit about its regions, a bit about how it compares with China and thoughts on its future.

Riding the Indian Tiger: Understanding India -- The World's Fastest Growing Market, (Wiley) by William Nobrega and Ashish Sinha is a must-read and earns a coveted Business Press Maven "Help" label, granted with great ceremony to books that help advance investor understanding. It is not a thrilling read, but the prose isn't wooden, and it's less than 250 pages. That means no excuses.

And here's the beautiful part: Place your finger down at random at almost any point in this book, and you'll learn something important, thought-provoking or, at the very least, interesting about a country that stands as a contradiction in a myriad of ways.

Where to start? Well, anywhere. How about page 12, part of the opening section that gives an economic tour of India's different regions? Haryana, close to New Delhi, is an agrarian state with a dairy bent, a fast-growing economy and an essential long-term challenge: With an underdeveloped supply chain and little of the milk pasteurized, potential lost revenue abounds.

Or, read any of the pages between 67 and 92, where the authors compare India and China, point to any number of examples of the free press in India leading to better oversight and less corruption or the overwhelming demographic advantages enjoyed by India.

The authors also argue that fashion apparel will thrive in the near future in India because of the nation's cotton production, technological advances of its textile industry, and increasing disposable income. National fashion producers are not sufficiently up to the task; the authors smell big opportunity. For some similar reasons and others quite separate, the hotel industry also is ripe for growth, according to the authors.

Skip to page 203, in a section on understanding Indian business culture, and you'll learn about the Indian businessman's disinclination to say "no," which often causes disappointment when deadlines pass. This, the authors say, is changing. The introduction, an overview of India's history, which has lurched between colonialism, socialism and now capitalism, is a bit less subjective but probably just as important for anyone who needs a quick sense of this emerging economic behemoth. Don't skip it.

As for the authors, Nobrega is the president of the Conrad Group, an emerging market consulting firm, and Sinha is the COO of RocSearch, a research firm. Together, they haven't put together a perfect book. It's a quibble, but you will read "when I first visited the country," without an indication of which author "I" is. I have no problem with that, but to start the comparative chapter on China and India, there is an anecdote about dinner party chatter, with this line: "Recently I (William) attended ..."

No matter. The book, while not a scintillating read in terms of structure or prose, is filled with insight and factoids that will help you emerge, after less than 250 pages, far more knowledgeable about India than you'd be from reading what else is available on the topic.


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## Bushroda

*Look to India As the New Powerhouse*
By Mark Dampier
The Independent; London (UK)
2008-02-02

Of all the emerging markets, it is China that hogs the headlines. Its massive population and huge urbanisation plans continually break new records. The capital Beijing is hosting this year's summer Olympic Games, which will attract the attention of the world.

However, there is another major country which I think deserves as much (if not more) attention: India. Jupiter Asset Management, one of my favourite investment groups, has also recognised this potential. The result is the launch of the Jupiter India Fund, which represents the group's latest foray into the world of emerging market investing.

So why India? Although its population is slightly smaller than China's, I believe it is far more dynamic. This is because more than 650 million of its citizens are under 30 years of age. Indeed, India is home to a quarter of the world's youth. This is extremely important, because economic development tends to be driven by younger people.

The demographics of China, for example, aren't nearly as good. In 2020, the average age in India will be 29, compared with 37 in China and 45 in Western Europe. It therefore looks as if India will have a far more dynamic workforce than anywhere else in the world.

India's reliance on a good monsoon season to sustain its agriculture, although still an important factor, has been reducing year by year as its economy develops. The services sector now accounts for more than 50 per cent of its GDP.

India's stock market is far more mature than many people would expect. There are 7,000 quoted companies, with arguably far higher levels of corporate governance than elsewhere in the emerging markets.

And, most interestingly, India's growth has been driven by domestic demand, with exports making up only about 18 per cent of GDP. While clearly the Indian market cannot be insulated completely from what is going on in the global economy, it seems unlikely that it will be derailed by a slowdown in the West. Once the urbanisation process has started, it is almost impossible to stop.

Infrastructure spending is extremely important; without it, the wheels of industry will not be able to turn. It is estimated that India needs to spend almost $500bn (251bn) between now and 2012 on roads, railways, ports and power. Those of you who are regular readers of this column will know that this is a recurring theme in many of the funds I have featured.

The Jupiter India Fund is managed by Avinash Vazirani. He joined Jupiter in July 2007, but has been investing in the Indian market for more than 13 years. He describes himself as a pragmatic stock- picker who searches for companies with high growth potential, but who isn't prepared to pay the earth for them.

He is also a high conviction investor, which means that he is happy to build quite large positions in individual stocks where he has strong faith in the potential of the company.

Typically, he will invest in large and medium-sized companies, because this is where he can find the best growth rates. It should be noted that many emerging markets are dominated by a small number of huge companies (for example, Gazprom in Russia). India is not as skewed in this way as many other emerging markets, although the energy sector does make up 25 per cent of the market. It is therefore not always helpful to compare the performance of a fund to the market's index.

Avinash won't generally invest in a company unless he has met the management team. He regularly visits India in order to better understand a company's vision and its ability to execute the business plan. He is a trained accountant and therefore has a keen eye for spotting potential problems in company accounts.

It is my belief that emerging markets, particularly China and India, will dominate world economic thinking for decades to come. The Indian market has had an excellent run over the past few years, but earnings growth remains strong so there could be more growth in the short term.

The long-term story remains extremely compelling; it seems speculative now, but in 10 years' time India could be considered a prime investment area, in the way that Europe, the UK and the US are today. In the meantime, its volatility should be treated as a friend - a regular savings plan is a great way to smooth out returns from these higher-risk areas.

_Mark Dampier is the head of research at Hargreaves Lansdown, the asset manager, financial adviser and stockbroker. For more information about the funds included in this column, visit www.h- l.co.uk/independent_

*(c) 2008 Independent, The; London (UK). Provided by ProQuest Information and Learning. All rights Reserved.*


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## Bushroda

*India as an investment destination*
3 Feb, 2008, 0412 hrs IST,Sukumar Rajah,

A Significant development over the last couple of years has been the renewed optimism about India as an investment destination amongst global investors. This is reflected in the strong foreign portfolio inflows ($51.2 bn between 2003-07). In addition,

India-dedicated country funds across the world manage over $42 billion in assets. Given its size and expected growth over the next few decades, an India-strategy has become a must for companies across the world with global aspirations. At the same time, inflows from domestic investors through mutual funds, insurance (ULIPs) and direct investment have moved up sharply. All these factors pushed the major Indian indices to historic highs.

Hence, the recent fall needs to be seen in the context of the sharp run up witnessed in the last quarter of 2007 and increasing volatility in the global markets amidst concerns about future economic growth. Apart from India, other markets in the region have also moved down sharply. In recent times, investors have been ignoring fundamentals and focusing on momentum stocks, which was overdone. The declines in India can also be attributed to technical factors such as unwinding of positions by speculators and the triggering of margin calls, leading to a cascading effect, especially on stocks with low liquidity. While markets have bounced back after the correction, it is too early to rule out further volatility.

*Outlook*

Volatility is an inherent part of stock market investing and investors need to keep in mind that market gyrations tend to be more pronounced over the short term. Increased volatility over the near term could be due to a plethora of factors  liquidity, earnings expectations, speculation ...etc. However, over the long term, equity markets tend to reflect the economic and corporate fundamentals, which continue to remain healthy for India relative to most emerging markets. The flip side of the strong FII inflows is that unlike in the past, Indian markets are now more integrated with global trends and will be impacted by any contagion, at least over the near term. We expect momentum stocks to lose ground and fundamentally sound companies will attract flows.

Net exports account for a minimal portion of the economy and domestic drivers (investment & consumption) account for a majority of GDP growth. Hence, India is well positioned to withstand any sharp slowdown in the global economy, compared to other Asian and emerging market countries. Keeping in mind the expected earnings growth for the coming years, valuations at these levels appear to be attractive. Further volatility over the near term cant be ruled out given the global situation, but the broad direction remains positive over the years to come.

*What should one do ?*

Typically in volatile periods such as these, often-repeated questions are  Where should I invest...Should I book profits...Should I shift my investments? While the answers vary from individual to individual, our advice continues to be  there is no right time to invest and it is the time you give to your investments that matters. Draw up a clear asset allocation plan based on your financial situation, attitudes to risk and goals in life. Once the plan is put in place, stick to it and do not get perturbed by temporary market movements. The focus should be on products providing exposure to quality companies with strong fundamentals.

Markets go through cycles over time and a well-crafted financial plan helps you to weather this volatility over the long term. Research has shown that the probability of attaining financial goals is much higher by following this approach, rather than by trying to juggle around with investments, and time market cycles. Successful investing depends as much on the quality of the investment as on the discipline one exhibits. After all, we invest to achieve peace of mind through realisation of our financial goals and we should not allow the investments themselves to disturb that!

*The writer is CIO, Equity, Franklin Templeton Investments, and India*


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## Bushroda

*Intel lines up $1 b for India*
Press Trust of India

MUMBAI, Feb. 3: Global chip maker Intel will invest more than one billion dollar in India over the next three years as it seeks to prepare light-weight personal computers in partnership with Indian and foreign hardware firms.

We have committed to spend over a billion dollars spread over next three years plus. We are focusing on a number of new initiatives for enabling easy availability of personal computers (PCs) and broadband Internet in India, Intel Technology India director, marketing and operations, Mr John A McClure said here.

The company is partnering with foreign and Indian computer hardware brands like ASUS Technologies, HCL, Wipro and Zenith for preparing light weight easy-to-use Internet platforms.

From our India experience, we have learnt that mobility is particularly what even a first time PC buyer is looking for. They want lightweight products, that could run on battery for three to four hours, is easy to store and doesn't take too much space, Mr McClure said.

The company is working on different designs for specific market segments. It is also preparing to introduce Wimax technology in India, the fastest wireless BB technology available at lower cost.

The Intel executive said that low broadband Internet penetration in India could lead towards the country lagging behind in overall development.

Today India is seventh or eighth largest PC market, poised to become third or fourth largest by 2012. But it is well behind in Internet penetration. This has already started to become a growth limiter not only for the PC market but for the economy as a whole, Mr McClure said.

According to him, only the BPO industry had benefited from flattening of the world. The rest did not benefit as they did not have access to broadband Internet.

Once you have the infrastructure in place, new ideas and business will take shape and drive India's success as the country has great entrepreneurial skills, he said.

Intel's biggest role in India would be to continue to develop affordable Internet platforms with latest technology, Mr McClure said.

The industry and government have to work together. Like, we are developing Wimax technology for India. But its success depends on how much spectrum is allocated. So the government must come out with its spectrum policy fast, Mr McClure said.


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## solid snake

Seems like nothing but good news for India. Or perhaps the bad news never gets posted here? At any rate, it's nice to see growth in our neighbor


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## Bushroda

*Indian economy to grow at 8.75% this fiscal: IMF* 
Press Trust of India 
Monday, February 04, 2008 (Washington) 

The International Monetary Fund has projected the Indian economy to grow at a rate 8.75 per cent this fiscal on the back of rising productivity and investment.

Though the country's favourable outlook attracts huge capital flows which help finance investment, it also poses a challenge to find a balance between exchange rate stability and financial openness, IMF Executive Directors said in their summary note.

The IMF estimate comes in the wake of India revising upwards its growth estimates for the last fiscal to 9.6 per cent from earlier calculation of 9.4 per cent a few days ago and Finance Minister P Chidambaram exuding the confidence that the economy will grow close to nine per cent for the current fiscal.

On the other hand, the Reserve Bank of India in its quarterly review of monetary policy has retained its estimate of at 8.5 per cent this fiscal, true to the conservative style of most central banks. The apex bank also maintained a status quo policy rates against market expectation of a reduction in key rates.

*NCAER too revised its projection to 9.1%*

An economic think-tank in India, NCAER too has revised its projection to 9.1 per cent against its earlier forecast of 8.9 per cent.

The IMF directors, however, differed on their view on whether India should go for temporary controls to moderate capital inflows or not. 

While a number of directors supported the Reserve Bank's cautious and pragmatic approach towards managing the capital flows, including through "temporary capital controls", some others cautioned against the step.

"India's economy has been resilient in the face of heightened global uncertainties, slowing US growth, and high world oil prices, and is expected to expand by 8.75 per cent this fiscal year as a result of rising productivity and investment," the Executive Directors said.


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## Bushroda

*Playing our ace*
*Lady Blackstone on why Britain and India can work wonders together* 

Lady Blackstone
Guardian, UK 
Tuesday February 5, 2008

India has become the focus of a great deal of attention in UK universities, even before last month's visit by the prime minister and a group of vice-chancellors.

We recognise that to build strong knowledge economies we will need to work together, across international borders, in both teaching and research. This creates new challenges to our higher education institutions: how to work abroad and deliver excellence; how to work with international partners and retain a unique identity.

Partnership is the answer - at national, institutional and individual levels. That is why our two governments have launched the £23m UK India Education and Research Initiative to become each other's partner of choice in education.

The export of knowledge, of course, is not new. Throughout human history, civilisations have learned from each other, fascinated by ideas and innovation.

In fact, India has a longer history of higher education than the UK. Scholars have looked to it for more than two millennia.

Alexander the Great sent envoys to Taxila, the centre of Vedic and Buddhist learning on the trade route between Kashmir and Central Asia, in fourth century BC. They spoke of a university greater than any they had seen in Greece. The famous Chinese diarist Xuanzang wrote in 636 AD that more than 10,000 monks lived and studied at Nalanda in Bihar, said to be the world's first residential university. Intellectuals from Korea, Japan, Tibet, Indonesia, Persia and Turkey also studied there, learning science, astronomy, medicine, logic, metaphysics, philosophy and religion.

The UK is a relative latecomer. Oxford and Cambridge, our first universities, only got going in the 12th and 13th centuries. British universities have developed rapidly in the last 150 years and, particularly since the second world war, have welcomed a growing number of students from India.

Our two countries have good reasons to choose each other as partners. Language is one reason, but English speakers have many options: the US has always been a major player, but today Australia and New Zealand are investing heavily to attract overseas students, particularly from the far east and south-east Asia. Other European countries are targeting those students too - by delivering courses in English. English language teaching is on offer in universities in Sweden, Germany and the Netherlands.

Despite this, the number of Indian students choosing the UK continues to grow. They are attracted by the country's unique combination of shared history, high academic standards and its safe, open, multicultural society. An Indian student said to me the other day: "I love being here; it is like meeting the world in one place." The UK is already home to a large Indian-British community.

Now, for the first time, students are moving from the UK to India. The numbers are still small - they measure in the hundreds - but they too are growing. As India's educational capacity develops, it will open its doors to the world.

Already, exchanges, work placements and visits are increasing. Our young people know that India will be a major force in the future, as its economy blossoms, and they want to be at the heart of this exciting development.

The huge demand for higher education in India has led to a rapid development in private provision. This can be hard to regulate to keep standards high. Partnerships with UK institutions can help. The UK has an international reputation for excellence in higher education, with long experience of developing policy and practice in teaching and research, backed by a national system of quality assurance. Our institutions can share this expertise, working in partnership with colleges and universities.

We can also work together to tackle another problem: how to equip students with the practical skills needed by employers. Despite economic growth, 30% of graduates in India are unemployed. One of the reasons that international students choose the UK is its track record of running programmes with a large practical component. Courses are developed in consultation with local employers and use a mixture of real case studies, supervised work experience and visiting lecturers and mentors from the profession or area of study.

One of the areas of collaboration supported by the UK India initiative is the development of courses with a stronger practical base.

Within the next four years, the initiative expects to fund about 40 such courses, serving 2,000 students. I am delighted that the University of Greenwich has won funding to offer masters courses in business and IT subjects in partnership with ITM Universe in Gwalior. These are designed to equip Indian graduates with the skills needed to work in the global job market. On the research side, there will also be more Indian students completing research degrees in the UK, and more UK researchers undertaking work in India, along with joint research projects.

This is international collaboration at its best: colleagues working together to develop the most relevant courses to the highest standards and the most useful research. In this way, we can avoid the potential pitfalls of very rapid university expansion: shoddy education, motivated by profit in an unregulated marketplace.

Together, Britain and India can call on the best minds, organisations and facilities, to build prosperity for both our countries. Partners of choice in higher education: that is our ace card in the game of global success.

*· Lady Blackstone is vice-chancellor of the University of Greenwich*


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## Bushroda

*Golf's glamour attracts India's rich* 
Shilpa Kannan 
Business reporter, BBC News, Mumbai 

Walking hand in hand Rakesh and Anju Mehra are scouting for their dream home. 

Being passionate golfers, they want to spend more time closer to the greens. 

The premium golf villa they are hoping to buy has five lavish bedrooms, a private pool and a Jacuzzi with a view. 

This is what the couple always wanted. 

JP Greens in Greater Noida just outside Delhi is spread over 450 acres of greenery. 

Located around an 18-hole Greg Norman signature course, houses here start at $1.2m (£600,000) and go up to $3m. 

Indian real estate developers are eager to sell these luxury villas to cash in on the increasing interest in the sport. 

*Playing better *

Mr Mehra says he loves the place. 

"With security, excusive club and gymnasium, and a sprawling sports complex, my children will have access to the best things in life," he says. 

"What better quality of life I can ever dream of giving them." 

In addition, he hopes living here would mean spending more time improving his handicap. 

The Mehras are not alone. 

Indian people are increasingly taking to the greens, in spite of the expensive equipment and high cost of membership in clubs, which means that it is restricted only to the elite. 

Designer golf courses, spread over acres of greenery with artificial lakes, waterfalls and white-sand bunkers, are emerging in all the major cities where an increasing number of young professionals can afford club memberships, costing $1,000 a year or more. 

Golf has witnessed a 35-40% growth over the last four years and become a lifestyle rather than merely a sport for many. 

*Big spenders* 

In one of Delhi's jewellery houses an artisan is carefully knocking little dimples into a smooth ball made of pure gold and studded with diamonds. 

The golden ball is being prepared for the forthcoming Nicholas Piramal Ambassador Cup. 

With more than $200,000 being spent on the event, this corporate tournament will feature diplomats from across Asia. 

Companies are increasingly using sporting events to facilitate networking with corporate customers, many of whom are avid golfers. 

The Ambassador cup is sponsored by pharmaceutical company Nicholas Piramal. 

Harinder Sikka, director of the company, attributes the rapid emergence of golf in India to the economy's steady growth. 

Once international players start making regular visits here, it will open the door and the country could become a major player in the international circuits, he predicts. 

*Golf tourism *

Not to be left behind the Indian Ministry of tourism also is keen to promote the country as a golfing destination. 

Its Incredible India campaign aims to move the country away from generic tourism towards niche areas such as medical tourism and golf tourism. 

Leena Nandan, joint secretary, Ministry of Tourism, says though it is a relatively new sport, golfing here is a unique experience. 

Many tourists from countries like Korea, Japan, Australia and the USA are coming here on package holidays that revolve around golf. 

"We have world class facilities and luxurious golf resorts in India, but what is special her is that little bit extra which people don't anticipate; you could be putting in the Delhi golf course and peacock could cross your path. It's unique! No country can match that," she says. 

But golf is attracting more than just tourists. 

Several events are planned in the days to come. 

Celebrity Fijian player Vijay Singh, Ernie Els and Colin Montgomerie are expected at the upcoming tournaments. 

With more and more of the country's elite taking up the sport, India is ready to tee off. 

_*India Business Report is broadcast repeatedly every Sunday on BBC World. *_


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## Bushroda

*IT cos to step in Japanese market*
Mini Joseph Tejaswi,TNN
5 Feb 2008, 0044 hrs IST

BANGALORE: English sells across the world, but not in Japan. Culturally and linguistically, Japan is an extremely tough market to penetrate. This kept Indian workforce and the Indian technology industry away from the worlds second largest economy. 

But things have changed in recent times. Domestic enterprises are busy preparing themselves to expand their footprint in Japan, which is seen to have an IT services outsourcing opportunity worth $100 billion a year. 

The preparedness includes roping in those who speak and understand the Japanese language, induct local talent in Japan and also impart training in language, culture and other etiquette to employees. 

Japan is a sensitive and demanding market. The one-size-fits-all strategy will not work here. It needs specialised attention, says an industry analyst with long years of exposure to Japanese markets. 

But several Indian tech providers are willing to go the extra mile to tap business here. Indians generally pick up new languages quickly. But Japanese is not so easy. Today, a large number of technology professionals are learning Japanese. They are also trying to familiarize themselves with its culture and etiquette, says Maayumi Suzuki, a Japanese language trainer-based in Chennai. 

Nasscom president Som Mittal says the Japanese are culturally and linguistically risk-conscious. That means trust and relationship are extremely critical. The sales cycles are longer here compared to other markets. Therefore, foray into this market demands huge investments in terms of training and learning for Indian enterprises. 

Japan has a population of 124 million, of which barely three million are bilingual. And English need not be the second language they speak or understand.


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## Bushroda

*Global financial crisis unlikely to affect India greatly: IMF*
4 Feb 2008, 2306 hrs IST,PTI

WASHINGTON: A senior IMF official on Monday said India, given the structure of its economy, its exports and financial markets, is going to figure a "bit further down" in the spectrum of countries which are likely to be affected by the global financial crisis. 

"India is increasingly a part of the global economy and so it cannot be de-coupled and it does move in sync with rest of the world... In our view, there are a few things going on in India that will likely insulate it from the worst of the effects that would be felt in other countries," IMF Senior Adviser and Mission Chief for India Kalpana Kochar said. 

"Domestic demand in India is very very strong, where you still have investments that is growing very strongly. Consumption, especially of durables, has come off a little bit as interest rate has increased from last year and are beginning to bite, Kochar said in a teleconference. 

"But we do think that overall domestic demand growth is strong and that is going to keep growth going," she added. 

"India is plugged into the world trading system but Indian exports have been diversified both in terms of goods and markets... On service exports... we don't have a whole lot of strong evidence but we do believe that impact could go either way, Kochar noted. 

"If in fact US companies are looking to cut costs, it could mean they outsource more. So, India could benefit from that," Kochar maintained. "Overall in the spectrum of countries that are likely to be affected by this crisis, India is probably a bit further down," she added. 

That said...it's early yet. Given the structure of India's economy and its exports and financial markets at this point we don't anticipate having huge effects," she said.


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## blain2

Having visited Japan in connection with technology related stuff, I would say the need is for the Japanese to realize that they simply cannot do without learning English. We have had dealings where every single word, presentation etc. had to be translated or we really experienced "Lost in translation" in person.

Indians and others learning Japanese is a minor thing, the need is for the Japanese to pick up the most prominent lingua franca, I.E. Angraizi..there is no other way around it.


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## Bushroda

*Cisco Plan Will Create 360,000 Network Engineers In India* 
*The five-year strategy builds on Cisco's $1.1 billion investments in Indian ventures in recent years. *

By Mary Hayes Weier 
InformationWeek, NY 
February 4, 2008 11:31 AM 

Cisco (NSDQ: CSCO) released on Monday its plan to help India increase its number of networking engineers from about 60,000 today to 360,000 in five years. The plan entails, of course, training and certifying those engineers on Cisco technologies. 

Cisco says it has established partnerships and is opening testing facilities to meet that workforce goal. Two of India's largest tech training organizations, IIHT (Indian Institute of Hardware Technology) and NIIT (National Institute of Information Technology), have become certified for training on Cisco technologies. Those organizations and another, Global Knowledge and Training Partner Ltd., have begun Cisco training and certification from 200 locations in India. 

Another Cisco partner in India, Pearson VUE, says it will add 150 testing facilities for Cisco certification by the end of the year, including several mobile testing centers to reach engineers in rural areas. Pearson VUE is requiring centers to adopt "increased security measures in order to safeguard the value of IT certifications." 

"With these initiatives in place, we are able to ensure that our customers and partners have the resources available to train and equip the thousands of motivated students in India with the knowledge and skills necessary to shape the country's burgeoning information economy," said Leo Scrivner, VP of human resources for Cisco Services & Globalisation Centre East, in a prepared statement. 

Cisco inaugurated a new development center in Bangalore last October, and has spent more than $1.1 billion in Indian ventures in recent years, said a Cisco spokesman. A year ago, Cisco announced plans to triple its India-based workforce from 2,000 to 6,000 employees within several years. To support that growth, the company's chief globalization officer, Wim Elfrink, who reports to CEO John Chambers, relocated from the United States to Bangalore last year.


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## Bushroda

blain2 said:


> Having visited Japan in connection with technology related stuff, I would say the need is for the Japanese to realize that they simply cannot do without learning English. We have had dealings where every single word, presentation etc. had to be translated or we really experienced "Lost in translation" in person.
> 
> Indians and others learning Japanese is a minor thing, the need is for the Japanese to pick up the most prominent lingua franca, I.E. Angraizi..there is no other way around it.



Lack of english is the only reason why there isn't any major migration happening into Japan considering that people are willing to migrate even to Australia with an economy 1/7th the size of Japan.


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## Bushroda

*Surgeon: Indian ophthalmology is poised for global leadership*

BANGALORE, India  With knowledge, expertise and technology, in addition to a growing economy, India is poised to become a global leader in the elimination of needless blindness, said the guest of honor here at the All India Ophthalmological Society meeting.

"I believe Indian ophthalmology is poised very well to become a global leader," said G.N. Rao, MD. "But like everything else in life, if we are going to lead ... it takes certain fundamental changes and a lot of effort to accomplish those tasks." 

The opportunity comes in eliminating needless blindness within India, he explained. In order to achieve this goal, Dr. Rao laid out three necessary steps. 

First, he said every qualified ophthalmologist should commit to providing quality eye care in a comprehensive manner to the general public. 

"That means anybody that actually comes to us seeking our care should get the right kind of attention without compromising quality," Dr. Rao said. 

Second, he said there must be major changes in residency and postgraduate education to improve overall education and remove short-term fellowship programs and cataract surgery and laser training programs. 

"Whether we like it or not, the truth is the quality of our postgraduate education today is grossly suboptimal," Dr. Rao said. "If our residency training is up to quality, all these short-term training programs will not be necessary." 

Lastly, he said members must work to strengthen the All India Ophthalmological Society. 

"All of us as members of the All India Ophthalmological Society have a responsibility to make sure this society becomes stronger, that this society actually represents us well and that this society will provide us adequate educational experiences," Dr. Rao said. 

He asked all the members attending the meeting to realize their own power to make a difference and to make a personal commitment to change. 

"I hope that we choose the path of shifting the paradigm instead of shifting the responsibility to the next generation," Dr. Rao said. "I think that is in our hands."


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## Bushroda

*India's Glittering Jewellery Market *
By Commodity Online
04 Feb 2008 at 09:47 AM GMT-05:00

MUMBAI (CommodityOnline.com) -- With exports of $17.1 billion in 2006-07, India's gem and jewellery industry has been second only to textiles in earning foreign exchange for the country.

As per the Gem and Jewellery Export Promotion Council (GJEPC), the Mumbai-based apex body of the trade, exports of diamond merchandise alone touched $9.77 billion last year. 

According to Tehmasp Printer, MD of the fast growing India branch of the Antwerp-based diamond certification authority of the International Gemological Institute, no country can match India in the cutting of gemstones and crafting of fine jewellery. 

According to the World Gold Council (WGC), India&#8217;s gold consumption this year could in fact cross the 1,000-tonne mark for the first time. 

The booming domestic market along with export advantage of the industry and the Government's decision to allow foreign direct investment of up to 51&#37; in single brand retail stores has attracted a large number of players to the sector. 


Swarovski, the global crystal goods manufacturer and marketer, is on an expansion spree in India and hopes to achieve 5% to 10% of its global turnover from the country in the next 10 years. The company plans to set up 30 stores by 2009, from the current 13. 


Damas India, part of one of the largest jewellery retail outlets in the world, is adding 16 new stores to its present dozen stores in India. 


Morgan Stanley, Citigroup, Goldman Sachs and BSMA Ltd. collectively purchased a 7% stake in Gitanjali Gems for around $27.8 million. 


Goldman Sachs and UBS Securities have acquired 6.28% in Shrenuj & Co at around $2.07 million and $2 million, respectively. 


Gemology Headquarters International (GHI), a U.S.-based gemological grading and research laboratory, has opened its first Indian branch at Opera House, Mumbai. 


Reliance Retail is planning an aggressive entry into the jewellery retail market through its about 400 to 500 jewellery retail outlets across the country. 

*Government Initiatives*

In the New Annual Supplement to Foreign Trade Policy (2004-2009) announced on April 19, 2007, the government has extended the following facilities to this sector: 


Service Tax on services (related to exports), which are rendered abroad have been exempted. 


Re-import of Diamonds & Jewellery (either in complete or partial lot) exported on consignment basis have been allowed. 


In the light of increase in global prices of precious metal, duty free entitlement for consumables for export of rhodium plated silver jewellery has been increased to 3%. 


To reduce the transaction cost for the diamond sector, testing facility at International Diamond Laboratory (IDL), Dubai, has been incorporated in the list of laboratory/certifying agencies. 


Duty free import entitlement of tools, machinery & equipment has been allowed. For metals other than gold, platinum, it will be 2% and for gold and platinum, it will be 1% of FOB value of exports during the previous financial year. 


Categorisation of exporters as One to Five Star Export Houses has been changed to Export Houses and Trading Houses with rationalisation and change in export performance parameters.

*Hallmarking*

In addition, the government has decided to make gold hallmarking mandatory from January 1, 2008. 

Hallmarking of jewellery is yet to gather momentum in India as proper laws are yet to be implemented in right spirit. According to World Gold Council (India) Managing Director Ajay Mitra, the pace is slow as the amendment to the law is still pending in the Parliament. 

The WGC is in talks with the Bureau of Indian Standards and jewellery associations to try and address concerns that they have put forward to the ministry of consumer affairs. 

Mitra was speaking on the at a D&#8217;damas&#8217; function in Mumbai. Across the country, there are over 70,000 gems and jewellery traders, who had threatened to shut shops if the government does not amend the BIS Hallmarking Act before it is made mandatory in the four metros from January 1. 

The government&#8217;s move to introduce licensing of jewellery as part of the BIS Hallmarking Act has led traders to fear that the law could be similar to the Gold Control Act, which hampered gold trade for 20 years. 

Jewellers&#8217; organizations also asked the Central government to provide them with proper infrastructure before implementing the act across the nation. 

There are only 25 hallmarking centres in the four metros against an estimated requirement of 500 centres. 

*Mining Policy*

The Government is also set to unveil the new mining policy to make it easier for foreign and domestic firms to invest in the exploration and mining of diamonds, gold and other metals. Currently, India produces merely 0.4% of its gold consumption despite having 9% of global gold reserves. 

It has also made the import of polished diamonds completely duty free. Also, special economic zones dedicated to gems and jewellery are to come up in Surat, Kolkata, Goregaon, Dhulia and Hyderabad. 

*Looking Ahead *

The booming economy along with the rapid increase in income levels is estimated to further accelerate the growth of this industry.

*According to a KPMG study, India&#8217;s growing importance in the global jewellery market is only expected to increase in the future with total estimated jewellery sales of $21 billion by 2010 and $37 billion by 2015. Diamond jewellery consumption in India is also estimated to jump by 78% in 2010.*


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## Bushroda

*A Tale of Two Economies *
Rajan Chandras
Intelligent Enterprise, CA
Monday, February 4, 2008

The signs are familiar and worrying: a US economy that cannot seem to rebound, job losses on the rise, and consumers getting increasingly jittery. Will US companies, in a desperate bid to cut costs, intensify their push to send work offshore? Not so fast.

As I land in India's economic capital Mumbai (erstwhile Bombay) on a work and personal trip, headlines in The Economic Times  India's answer to The Wall Street Journal  present a contradictory picture about the opportunities for the Indian offshore industry. Here are some representative news items.

 *US recession could be good news for Indian IT firms:* Narayan Murthy, Infosys Founder and Chief Mentor says, "The fact that there may be a slowdown in the US means people will become much more concerned over better value for money... we could look at it as an opportunity."

 *TCS cuts salaries:* India's largest software exporter TCS plans a 1.5 percent cut in salaries of its over one lakh [100,000] employees in the fourth quarter, as it fell short of certain financial targets. Not coincidentally, the Indian Rupee has appreciated about 14 percent against the US Dollar in the last one year.

 *Wipro to hire more freshers:* Continuing with its focus on recruiting more new graduates, Wipro has given out job offer letters to 14,000 rookies from engineering colleges for FY09.

 *IBM dismisses 700 freshers in India.* 700 entry-level trainee programmers across major IBM offices in India were asked to go based on their performance in aptitude tests.

There is no doubt that US businesses will be under great pressure to cut cost and send more work offshore. Unfortunately, the weak US dollar is not cooperative;it is buying less services than ever and, in turn, the weak dollar and resulting strong local currencies are squeezing profit margins  and hence pricing flexibility  for offshore vendors. 

US business and offshore vendors will both survive these rough times, but I think America's domestic outsourcers and IT workers stand to gain the most, with a real opportunity to narrow the gap with offshore competition. It's a little too early to celebrate, but perhaps there's a trend in the making.


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## Bushroda

*A stake in India's new economy*
*Indo-Canadian business owners trickle back to India to serve a growing middle-class*

Peter Diekmeyer
Financial Post, Canada 
Published: Monday, February 04, 2008

NEW DELHI -Ravi Gupta studies a hunk of metal pulled from a rack adjoining a blast furnace at a supplier's aluminum-parts plant. "Quality is one of our major concerns," says Mr. Gupta, vice-president of Powercast Manufacturing, based in St-Eustache, Que.

"The equipment here is similar to what we have in Quebec, yet Indian labour costs are lower. That means we can save customers a lot of money if we do business here. But the payoff will only come if the quality measures up," he says.

Mr. Gupta's father, Chris, bought Powercast Manufacturing in 1994. The company produces custom-made parts for the electricity, construction and housing-fixtures industries. But in recent years, strong competition from China-based producers has forced Powercast to lower costs.

"These orders are just tests," says Mr. Gupta, regarding the work done at the plant located a short drive from India's capital.

"But, if we can do marketing, product design, storage and distribution in Canada, as well as manufacture selected products here, it would make our supply chain far more efficient."

Mr. Gupta, like many Indo-Canadians, closely follows his father's home country's staggering economic progress. Economic reforms are opening up India to increased trade and investment, making it possible for more foreigners like Mr. Gupta to do business here. His family maintains close ties with relatives back home and, three years ago, they bought a three-bedroom condominium in the burgeoning New Delhi suburb of Gurgaon, which they use as a base.

Mr. Gupta's case is not unique, says Kenny Zhang, a senior research analyst at the Asia Pacific Foundation of Canada. "Canada has a very strong and vibrant Indo-Canadian community. There is a very positive link between diaspora communities and increased business relationships between the countries involved."

Newly arrived Canadians and their families don't forget about their roots. Like many of the 900,000-or-so Indo-Canadians, Mr. Gupta returns to India every year. He closely follows differences in the two economies, and for an entrepreneur, differences often signal opportunities.

One key difference between Canada and India is their growth rates. India's GDP grew by 8.9% during the most recent quarter, more than three times as fast as Canada's. Furthermore, at the World Economic Forum's India summit, which was held in New Delhi in early December, Indian government officials expressed confidence the country can maintain that pace during the coming years.

If India continues to grow at its current pace, income levels there will almost triple and, by 2025, the country will become the world's fifth largest consumer market. The strong Indian growth has rubbed off on Canadian companies whose exports there have been rising in the double digits the past several years to $1.7-billion in 2007.

However, industry experts say the Indo-Canadian community has not yet been as active in strengthening business relationships with its mother country as the U.S.-Indian or the Chinese-Canadian communities. Part of the reason is due to a simple time lag. China began opening up its economy more than decade before India did, a period many economists use as a yardstick to measures the two countries' respective economic progress.

According to Maneesh Nanda, a consultant who specializes in India-Canada issues and whose work is increasingly bringing him back in touch with his motherland, things are starting to change. "The composition of Indian immigrants into the United States has been far more centred on their educational and business qualifications than in Canada. So naturally the American-Indian community has had a bit of a head start," Mr. Nanda said. "But India's economy is now becoming so strong that it is lifting all boats."

Ravi Singh, president of Apparel Sourcing, an Indian national who has lived in Canada for 20 years, agrees. Mr. Singh recently signed a contract to help a European retailer scout opportunities to set up shop in India and will be meeting with several Canadian firms in the coming months to share his experiences. "Many retailers think that India is too poor to support an expansion there, but they are underestimating the size and strength of the country's growing middle class," he said.

Demand for retail space in India is so strong, many companies simply cannot get space, despite that there are malls popping up everywhere. According to Mr. Singh, rents in many prime Indian malls are now $40 a square foot per month, which is what some Canadian malls are charging in a year.

Mr. Gupta is also dazzled by the opportunities. "You know it's funny. We are sitting here in what will probably be one day the world's largest economy and we are thinking of importing aluminum parts into Canada. But domestic demand here will make opportunities back home pale in comparison," he said.

Later in the day, from the balcony of his family's Gurgeon condominium, he surveys the highrises and malls rising as far as the eye can see. "I have a feeling that the really smart Indo-Canadian entrepreneurs are the ones who will come back from Canada to invest here."


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## Bushroda

*India's Capital Inflows Complicating Monetary Policy, IMF Says* 
By Shamim Adam
Bloomberg

Feb. 4 (Bloomberg) -- India will attract "large capital inflows'' as the economy expands, complicating efforts by the central bank to curb the rupee's accelerated gains, the International Monetary Fund said. 

The inflows are helping to boost investment in Asia's third- largest economy, which may expand 8.7 percent this fiscal year, the Washington-based lender said in a report released today. The growth may slow to 8.3 percent the next fiscal period, IMF said. 

"Given India's vibrant growth outlook and sizeable capital demands, inflows will likely remain strong,'' the IMF said. "Large capital inflows are complicating the conduct of monetary policy, creating excess liquidity and pressuring the rupee.'' 

India expanded at more than 9 percent since April 2005 as Ford Motor Co., Tata Steel Ltd. and other companies increase output at the quickest pace in a decade to meet soaring demand from a growing middle class. Rising prices prompted the Reserve Bank of India to keep its benchmark interest rate unchanged near a six-year high last week. 

Wholesale prices unexpectedly accelerated to a five-month high in the week ended Jan. 19 from a year earlier, vindicating the central bank's decision to refrain from cutting rates. 

"Inflation risks are to the upside due to rising international food and fuel prices, ample domestic liquidity, tight capacity utilizations, and rising skill premia,'' the IMF said. Wholesale prices are projected to rise between 3.5 percent and 4 percent in the "near term,'' the report said. 

*Fuel Subsidy *

India needs to prioritize spending, the IMF said, pointing to the government's fuel subsidy bill that is growing as oil prices rise. 

There is a need "to adapt to higher international oil prices through a phased reduction in subsidies for most fuel products, while ensuring that adequate and well-targeted safety nets are in place to protect the poor,'' the report said. "A tighter fiscal stance could help offset the liquidity impact of buoyant capital flows and thus relieve appreciation pressures.'' 

The Indian rupee gained 12.3 percent against the U.S. dollar last year. 

The "rupee appreciation reflected strong fundamentals and increasing productivity, and the policy of a managed float'' remains appropriate, the IMF said. Still, there is some concern "that rupee appreciation has adversely affected India's external competitiveness in certain labor-intensive sectors.'' 

Rising imports will probably lead to a widening of the country's trade deficit and boost the current account deficit to 1.5 percent of gross domestic product this fiscal year, the report said. 

"Nevertheless, with low levels of external debt, ample reserves and limits on the amount and end-use of foreign debt financing, India's external position is sustainable and robust to significant shocks,'' the lender said.


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## Bushroda

*Bollywood: The musical* 
Edward Tsumele
Sowetan, South Africa
04 February 2008

It was a couple of years ago and the venue for the party was a friends flat in suburban Killarney, in northern Johannesburg. The hostess was Indian. The food was delicious curry. 

While some of us were waiting for late guests, we indulged in everything culturally Indian, first trying our luck at dancing. 

Then, thank goodness, the clever hostess played a Bollywood movie. 

This really saved the situation as it meant that some of us would not continue to embarrass ourselves trying out those tricky dance moves. 

Indians have really made big strides when it comes to reviving their country in cultural terms  as well as their economy  and Bollywood, the high-flying Indian film industry, is a good example of this rebirth. 

This week I was reminded of that Killarney party and how Bollywood has become a successful part of the worlds global film market with the news that a theatrical dance spectacular, The Merchants of Bollywood, direct from Mumbai, will hit South African stages in May.

Brought out by 94.7 Highveld Stereo and East Coast Radio, the all-singing, all-dancing Bollywood-type musical extravaganza has already been hailed as a success by audiences and critics in Australia, Germany, Switzerland and the UK.

The performances are scheduled for the Indoor Arena at the International Convention Centre in Durban on May 19 and 20  and at Montecasinos Teatro on May 24 and 25  with matinee shows on both days in Johannesburg. 

The Merchants of Bollywood, according to its advance publicity, is a dynamic, vibrant and energetic spectacle, based on the real life story of the shows choreographer. 

It is a potent mixture of dreams and sacrifices, family rebellion and romance, and is set to some of the most memorable songs and dance routines drawn from the Indian film industry.

Written and directed by Toby Gough, the show features music by Salim and Sulaiman Merchant and is choreographed by leading film choreographer, Vaibhavi Merchant. 

With a cast of 40 dancers and singers from the film industy, the musical follows the story of Ayesha Merchant, her grandfather Shantilal, and dramatises the inevitable clash of values between generations representing the old and new India.

It sounds like a must see.


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## Bushroda

*Facing skills shortage, Indian cos recruit Sri Lankans* 
Monday, 04 February , 2008, 11:49 

Colombo: Faced with a labour and skills shortage in India, some Indian companies have started recruiting from Sri Lanka. 

"I have recently received three enquiries from south India for engineers and unskilled workers," said Anwar Ulumudeen, proprietor of a leading Colombo-based recruiting agency, Hamad International Pvt Ltd. 

"A construction company in Bangalore has asked for engineers, and a garment factory in Tirupur (Tamil Nadu) has asked for unskilled workers," Ulumudeen told IANS. 

"They say they are not able to get workers locally, and are offering Dubai-type salaries to attract foreign workers!" said Ulumudeen, former president of the Association of Licensed Foreign Employment Agents.

Clearly, the domestic labour force is unable to meet the mounting demands of a booming Indian economy. The shortage exists despite the fact that Indians are finding it increasingly difficult to get jobs in the Middle East and Malaysia. 

In the Middle East as well Malaysia, restrictions on the intake of Indians have been put in place because the governments want to restore the ethnic balance in the work force, the Sri Lankan recruiter said. 

Currently, Indians are the predominant group among foreign workers in the Middle East. So much so that Hindi is the lingua franca of the expatriate workers from South Asia. 

In place of Indians, Sri Lankans and Bangladeshis are getting jobs in Middle Eastern firms and openings for these nationalities had increased in Qatar, Saudi Arabia and the United Arab Emirates (UAE), Ulumudeen said. 

The Sri Lankan government has itself reported an eight per cent increase in foreign employment over the past year. But the new vacancies in the Middle East have mostly been in the skilled sector, Ulumudeen pointed out. 

This means that Sri Lankans will have to acquire the necessary skills if they are to exploit the new opportunities. "We are not able to cater to the demand because of a lack of skills among our workers," Ulumudeen said. 

Sri Lankan recruiting agencies have been finding it difficult to get applications in the engineering, accountancy, hospitality and construction sectors, though the IT sector had had no problem, he pointed out. 

According to the Sri Lankan ministry of skills development, about 40,000 workers are being trained in various skills. But Ulumudeen would like the training to suit the requirements of overseas employers also.


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## Bushroda

*Korean students learn Hindi for jobs in India*
February 04, 2008

New Delhi: Hindi is becoming more popular among foreign students who want to get huge employment opportunities at various professional sectors in India. The recent instance came from young Korean students who are opting for Hindi and other Indian regional languages during educational exchange programs with colleges in India. 

Students from Pusan University foreign studies department have come to Delhi University last month to learn Hindi, English and cultural trends to explore opportunities in Indian markets in future. 

The group of 14 Korean students including ten girls and four boys, completed their one month long course under the Memorandum of Understanding between Pusan University and Motilal Nehru College (MLNC) of Delhi University. 

A senior professor at MLNC said, "The young Korean students were immensely impressed by the bright Indian pool of professionals and the growing Indian economy. They wanted to absorb the prevailing culture in the country."

The students also expressed their views about this exchange program. They said in order to work in Korean and Indian establishments it would be ideal to be well versed with the prevailing culture. 

"The objective of the programme is to be aware about Indian system and people. It is great to be here and exchange ideas with each other, said a first year student," Seo In Suk.


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## Bushroda

*Nano-manufacturing : The next big thing*
4 Feb, 2008, 1011 hrs IST, TNN

Small is the new big. As is evident from reducing size of all the equipments and accessories that we are using. And helping produce smaller objects is the new technology called nanotechnology. It is the science of controlling matter on a scale smaller than one micrometer. 

The fabrication of devices on this nano-scale has given rise to the birth of nano-manufacturing. It is a highly sophisticated field, as every modification to the atomic layer changes the properties of the material and the manufacturing process has to be highly precise in order to make controlled changes to the materials. 

The prime impact of using such technology is in the reduced size of the appliances. For example, it is the reduction in the size of the various technology elements that has led to producing flat display panels that occupy very less space. This leads to many benefits, as the devices produced from such technology not only save space, but are also aesthetically appealing. 

However, ironically, the machinery that supports nano-manufacturing is not small; they are much like the traditional manufacturing assembly parts. The demand for nanomanufacturing is the result of the drive towards miniaturization of the various consumer appliances. 

In fact, one of the prime drivers is also the fact that the appliances are being used for multiple uses. For instance, earlier, when the cell phone was invented, it used to be a bulky device with only phone features. Now, it is also your camera, radio, and even miniature television and internet browsingdevice. 

This means in the same limited space, all these devices have been integrated. This is possible only as a result of manufacturing miniature devices. Same can be seen in the case of data carrying devices as well. There used to be a time when the maximum data that could be carried on a computerhard disk was in Mega Bytes. 

With new technologies coming in, now there are hard disks with a capacity that easily goes into Tera bytes! Not only that, this has led to the gradual decrease in the production costs as well. The cost of hi-tech consumer devices has steadily seen a downward trend thanks to innovation on the technology side. 

The industry especially would have to take risks as the initial investment in the nano-manufacturing facilities might be very high. This industry is highly cost-intensive , but considering the current economic boom which is leading to high profits, the profit making companies can consider investing in these technologies. The government, on its part, needs to incentivise this industry as well, just as it has supported the IT and manufacturing industry with its industry friendly policies. 

However, the key to fuel real growth in nano-manufacturing is creating and tapping the talent pool that is aware of nanotechnology and is excited to work in the field. People must be convinced of the enormous opportunities in the nano-technology area and they should look it as a rising industry. Also entrepreneurs must be encouraged to invest in this area. Once people know the potential of nanotechnology , they will come ahead to invest and venture in this sector. 

The education pattern and curriculum must include the relevant subjects and skill sets that will make students equipped for a career in nano-technology. Nanotechnology applications in the medical, pharma, food, and electronics sectors hold a very promising potential. The hype of nano technology is essential to some extent but it should not be over-hyped. 

Nano technology has wide applications in nano manufacturing and other sectors and being a high tech, high cost industry the payout period may differ depending on the application. Usually, pay-out periods in the nano manufacturing are longer than industries like software. 

The Indian economy is witnessing a boom and the time is ripe to make big leaps ahead in the area of nano manufacturing. The growth will come fast and so will the revenue. Thus the core of nano technology is small, but it holds the key to big revolution.


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## Bushroda

*Budget 09: Rs31,000 cr mission to develop skills*
*Expected to be operational in the next fiscal year, the skill development plan is to extend training facilities to 10 mn people a month, up from 2.5 mn a year at present*

Sangeeta Singh
New Delhi font size 

To address Indias growing skills shortage, the Union government is setting up a Rs31,000 crore skill development mission, a measure that is likely to be announced in the Union Budget for 2008-09.

Expected to be operational in the next fiscal year, the programme is to extend training facilities to 10 million people a month, up from 2.5 million a year at present. 

The mission, accorded top priority by Prime Minister Manmohan Singh, is expected to oversee and facilitate the entire process, which the government will run in collaboration with the private sector.

While the mission will be headed by the Prime Minister, Planning Commission deputy chairman Montek Singh Ahluwalia will be its vice-chairman. Heads of industry associations are expected be part of the missions general body. 
Planning Commission has been given directions by the Prime Minister to expedite implementation of the mission and seek immediate cabinet approval, so that the mission could be announced in Budget 2008-09, said a senior government official who did not want to be identified.

The impetus for the initiative stems from the concern that the 9%-plus growth recorded in the past three years has not witnessed a commensurate jump in employment. At the same time, several sectors, especially in services such as information technology, growth is beginning to be curbed due to lack of skilled personnel. 

The mission will be anchored in the Planning Commission, even as it could end up being set up as an autonomous body, a society or a special purpose vehicle. 

Besides, 17 Union ministries, which are already associated with skill development projects of some sort, will help implement the programmes. 
Mint had earlier reported that a cabinet note on giving concrete shape to the skills development mission was ready on 9 January.

The finance ministry has worked out a tentative allocation of Rs1,700 crore in the coming Budget, also the first year of the mission. The government has projected that 70 million jobs will be created during the 11th Plan (2007-12) and proposes to spend Rs31,000 crore during that period. 

The mission will oversee short-term vocational courses ranging from six months to two years, which will be provided by both government and private sector institutions as also certification of such courses. More than 8,000 vocational training institutes run by the government together with those run by the private sector are expected to facilitate the mission and will play the role of sub-missions. 

According to the latest National Sample Survey, which is conducted at a micro level through extensive field work, in 2004-05, only 2% of the population in the age group 15-29 was reported to have received formal vocational training. An additional 8% received non-formal vocational training, the report said. 

The government has identified 20 growth areas for skill development in manufacturing and services. These include automobile and auto component, transportation, logistics, warehousing and packaging, travel and tourism, media and entertainment and health care services, all of which are perceived as high-growth sectors. 

Amir Ullah Khan, economist with the India Development Foundation, a think tank that has done considerable work in this sector, said, According to estimates made by the Confederation of Indian Industry and McKinsey and Co., currently the shortage in skilled labour is anywhere between five million and 10 million. With the economy growing at 9-10%, this may shoot up to 50 million in five years. And since growth is largely service-sector-driven,&#8202;requirement of skilled labour is going to be a serious problem.

He added that a skill development mission has to focus on employability, since in the past, several graduates from these vocational institutions did not have the desired skills to be employed. 

To promote job-oriented education, he also suggests reforms in the All India Council for Technical Education, the body which plans and coordinates technical education.


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## Bushroda

*Don't wallow in mayoral scandal*
By TOM WALSH
Detroit Free Press, United States
February 3, 2008

When Gov. Jennifer Granholm spoke Thursday to a breakfast crowd of businesspeople at the MGM Grand hotel in Detroit, the room was abuzz with chatter about Mayor Kwame Kilpatrick's televised apology the night before.

But Dick Blouse couldn't stop talking about India.

"It's incredible," said Blouse, president and CEO of the Detroit Regional Chamber, who returned Wednesday from a five-city, 11-day trip to scout business opportunities for Michigan companies to profit from India's explosive growth.

"There are many, many companies there that are flush with cash," he told me, "and they want to do business here in the States. They speak English. They're from a democracy. They have similar ethical beliefs about the importance of intellectual property."

Blouse said plans are afoot to set up an incubator for Indian entrepreneurs to grow companies in Detroit's TechTown development near Wayne State University.

A couple of Indian companies have already staked out turf in Michigan via acquisition: Bharat Forge bought Lansing-based Federal Forge out of bankruptcy in 2005 and has been expanding output of auto parts. Wipro Technologies purchased mechanical engineering and design firm Quantech Global Services LLC of Okemos in mid-2006 and plans to boost employment.

India, of course, isn't the only growth hotbed abroad. China's economy has been surging at a 10% annual clip for 15 years. Russia is hot. Vietnam is on the rise.

Thankfully, Michigan business and political leaders -- after decades of whining and blaming the rest of the world for our problems -- are actively engaging with the dynamic growing regions of the world.

Automation Alley, the consortium to promote the region's high-technology prowess, leads missions to numerous spots around the globe.

Wayne County Executive Robert Ficano has led three visits to China and plans another in November. Blouse's just-completed trip was his third to India in three years; this time his group included Oakland County Executive L. Brooks Patterson.

Detroit City Council President Ken Cockrel Jr. and two council colleagues just visited Taiwan.

All this exploration makes it doubly sad to see Detroit wallowing in the text message scandal.

The rest of the world, folks, is moving at warp speed into a dynamic new high-tech era, while Detroiters are stuck in leadership limbo, not knowing whether Kilpatrick can survive the storm clouds he has brought upon himself.

So be it. Kilpatrick's problems will run their course, as the rest of us step up to deal with threats and opportunities of a new world order.

"India and China," Patterson told me Friday, "are going to be economic powerhouses. We clearly are going to have to do business with them." And that's not a bad thing. Oakland County currently has 700 foreign-owned companies that provide 125,000 jobs.

"We were fat, dumb and happy around here for so long," Patterson added. "Now we've got to focus and kick it in gear."

With eyes wide open around the world, I would add, and precious little time to wallow in the sordid swamp of the text message mess.


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## Bushroda

*We'd buy it in a Nano second*
By JULIAN BELTRAME
Toronto Sun, Canada
Sun, February 3, 2008

It may not be available in Canada for years, if ever, but Canadians have already fallen in love with Tata Nano, the world's cheapest car. 

With 105 km/h top speed, a 33-horsepower engine and the looks of a snub-nosed beagle, the Tata Nano from India is hardly a "babe magnet." 

But the expected $2,500 price tag and the Nano's fuel economy -- 20 km per litre -- is drawing plenty of attention, a poll of Canadians suggests. 

The Canadian Press Harris/Decima survey suggests the Nano would be a hit in here. 

The most likely to say they'd buy one were young Canadians in the 18-34 age group. 

More than one in three (36%) said that someone in their household was either certain or likely to buy one if they could. It will be manufactured strictly for the Indian market for the next two years.


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## Bushroda

*Program to bring students from India to PSU* 
By JILL WHALEN
Staff Writer
Sunday, 03 February 2008 

As early as next year, Penn State Hazleton will begin welcoming students from India as part of a new exchange student program.

Through the India Initiative, up to 25 students annually will study Information and Sciences Technology at Penn State. Theyll attend college in their native India for their freshman and sophomore years, then finish their degrees at Penn State.

Gary Lawler, chancellor of the local campus, said York will be the first Penn State campus to welcome the students, but Hazleton is next. In time, eight campuses will host students through the program.

The India Initiative is the idea of Samir Shah, who instructs Information and Sciences Technology at the York campus.

Its similar to an articulation program, said Lawler, who recently visited India with Shah to put the finishing touches on the program. The idea is to help diversify the Penn State student body.

Its also hoped that through the program, students will be prepared to work in a global economy.

Shah, who is still in India, said the idea for the project came after he introduced a global software development project to his students in 2006.

As part of this project, IST stidents from Penn State York and University of Baroda, India, successfully worked on designing and developing two software products for a multinational company, he said. After the project, I arranged an optional field trip to India for Penn State York students where they met their counterparts in India.

The first students will be from the Vidyalankar School of Information Technology, Mumbai, India, which is affiliated with The University of Mumbai.

According to Lawler, the Indian students enroll in courses that parallel Penn States curriculum so that theyre working on the same levels as students here when they transfer. Upon completion of studies, a student will be awarded a bachelors degree.

While the Mumbai college will be the first to send students to the United States, other colleges are on the horizon.

We met with officials from several colleges during the January trip, Lawler said. Two additional colleges have expressed interest in the program. 

Students from one of those colleges will likely begin studies at Penn State Hazleton in 2009.

Indian colleges are very different than colleges in the United States, Lawler discovered. Its not uncommon for one to have to take off his shoes before entering a classroom building. Many buildings dont have air conditioning despite the hot climate. Men and women dont live in the same residence halls and dormitory rooms are very spartan, Lawler explained.

Its bed, desk, bed, he said, illustrating the arrangment of rooms. Students do not have televisions or radios in their rooms because complete focus is on education, he said.

Lawler guessed that American students would not want to  or be able to  tolerate the differences.

It wasnt just the education system that was different, Lawler said. The 9,000 miles he traveled really was half a world away.

The whole lack of infrastructure is huge, Lawler said. You recognize the tremendous level of poverty, and the difference between those who are destitute and those who are successful is phenomenal.

In his travels, Lawler saw people living in shacks. He saw beggars and young men carrying pick axes going to work to support their families.

The sad part is that there is public education, but families cant afford to send their children  they need them to go to work, he noted, and explained that India has no welfare, public health system or anything similar to Social Security. You either survive or you die.

On the flip side, he said, cities like Delhi were modern yet still steeped in tradition. Residents place much emphasis on their religion and spend the greater part of their mornings practicing it.

The country is very friendly toward Americans, he said. There were no negative concerns.

Lawler said is hoping that the welcome reception continues so that the India Initiative will continue to grow.


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## Bushroda

*Tourist arrivals peak at 5 million in 2007*
13 Jan, 2008, 0143 hrs IST,Raja Awasthi, TNN

NEW DELHI: It could never have been better than this for the travel and tourism industry. In 2007 the tourist arrivals have touched 5 million as against 4.45 million in the same period last year. According to ministry of tourism (MOT) Foreign exchange earnings from this sector also showed a growth of 33% more at $12 billion as against $9 billion registered for the corresponding period in 2006. 

According to a senior MOT official: The tourism sector is one of the fastest growing sector. The reason for such a growth is that marketing of our campaigns have been direct and very much fouussed. Better connectivity has also helped in a larger way. In fact effort should be made to take advantage of the awe and curiosity India inspired among people all over the world with its ancient and diversified culture, world heritage sites and the great variety offered to visitors. 

The industrys growth could be gauged from the fact that the forex earnings from tourism has shown a phenomenal growth of 14.6% in one year from $5.73 billion in 2005 to $ 9 billion in 2006.Though the foreign tourist arrival has recorded a double-digit growth, domestic travel is the backbone of Indian tourism industry, with 460 million Indians traveling last year. 

The shortage of rooms in major metro cities is adversely affecting the flow of tourists to the metros as well as to other destinations. The accommodation constraints in Delhi will have serious implications on the arrangements for the 2010 Commonwealth Games. It is estimated there will be a requirement of about 40,000 to 50,000 rooms in the budget category for the tourists visiting Delhi and surrounding areas during the games. 

Says Rajji Rai vice president Travel Agent Association of India (TAAI):It appears that in three to five years India will be number three economy in the world. The tourism sector has shown much faster growth as compared to other sectors. Now there is a need to push the tourism sector and 2010 Common Wealth games should bring in the required infrastructure to the country.


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## solid snake

Bushroda said:


> Lack of english is the only reason why there isn't any major migration happening into Japan considering that people are willing to migrate even to Australia with an economy 1/7th the size of Japan.



People migrate to Australia because it has a very high standard of living. Higher than the US and Japan.


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## Neo

*IMF warns India over capital controls​*
WASHINGTON, Feb 4: The IMF warned rapidly growing India Monday against using capital controls to curb swelling financial investment inflows.

The Securities and Exchange Board of India tightened offshore investment norms last year to help stem a tide of foreign money that has driven the rupee to near decade highs against the dollar.

Large capital inflows are exacerbating tensions in the monetary policy framework among exchange rate management, monetary independence, and financial openness, the IMF said in an annual review of Asia's fourth-largest economy.

Resolving these tensions will require an evolution of monetary policy, further exchange rate flexibility, and deeper and broader capital markets,said the Washington-based International Monetary Fund warned.

Capital controls, it warned, could dampen investment, raise doubts about the government's commitment to fuller capital account convertibility, and pose questions about the exit strategy from new controls. Capital inflows reached a record $45 billion in the fiscal year ending March 2007 and continue accelerating, putting upward pressure on the Indian rupee currency.

The rupee gained 12.3 per cent against the dollar last year, as funds abroad snapped up local shares and bonds amid buoyant economic growth.

The rapid currency appreciation raised concerns about competitiveness and prompted the authorities to intervene in the foreign exchange market.

The IMF suggested strengthened monetary operations and communications along with greater exchange rate flexibility as a better way to increase monetary policy effectiveness and deal with uncertainty in global financial markets.

The Fund also called for broader and deeper financial markets to channel capital to its most productive use, accommodate higher exchange rate volatility, and support financial stability.

In a bid to limit any inflationary impact of the capital inflows, the IMF proposed tightening the country's fiscal policy.

India's economy expanded by a higher than expected 9.6 per cent in the last fiscal year, the fastest pace since 1989 and second only to China, according to Indian data released last week.

India's dream run of strong growth and macroeconomic stability is a tribute to its sound macroeconomic policies and past structural reforms, the IMF said.  AFP

IMF warns India over capital controls -DAWN - Business; February 05, 2008


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## Bushroda

*Tata Motors Thinks Big With Its Nano*
By Heide B. Malhotra
Epoch Times Washington D.C. Staff 
Feb 06, 2008 

WASHINGTONWith a population of 1.1 billion, an expanding economy, and a rapidly growing middle class, India seems to be the perfect market to introduce an inexpensive automobile. 

With much media coverage, Indian automaker Tata Motors Ltd. rolled out the Tata Nano at the New Delhi Auto Expo 2008. The Nano will become the world's cheapest and smallest car with a sticker price of around $2,500, which is more than $1,000 less than the next cheapest car, the Maruti 800. Tata said that the model will be sold only in India for the first few years, and shipments to emerging markets such as China, South America, and Africa may follow soon after. 

Tata's competitors quickly jumped into the fray. Baja Auto Ltd.considered to be the second largest motorcycle producer in Indiaannounced that it will build its own small car in partnership with Renault S.A. and Nissan Motor Co. in about three to four years. Ford Motor Co., with an investment of $500 million, also promised a small car in India within two years. 

Tata Motors is a member of the Tata Group, the largest conglomerate in India. The group consists of 98 companies that operate in seven business sectors, including information systems and communication, professional services, consumer products, metal products, chemicals, and energy. Tata Steel Co. Ltd. and Tata Motors are the largest companies within the group. 

*Keeping Costs Down* 

The Nano is meant to replace rickshaws, motorcycles, and scooters, according to remarks by Ratan Tata, Tata Group Chairman, in a report published on the Tata Motors Web site. 

The company projects to build and sell at least 1 million cars a year. To achieve this goal without investing billions of dollars, Tata looked for an unconventional way of building the car. It hit upon a concept from the insurance industry, where outside contractors are "trained and certified" to build the Nano. The independent contractors receive the technology and the know-howsimilar to franchisingbut must bear all costs, including building and maintaining the manufacturing facility. 

"We looked at a new kind of distributed manufacturing, creating a low-cost, low-break-even point manufacturing unit that we design and give to entrepreneurs who might like to establish a manufacturing facility," said Tata. Cheapest Car Comes With a Price 

The Indian media hasn't bought into the cheap price of the Nano yet. "In fact, the figure is an introductory offer excluding taxes and local duties; on the road, the car will actually cost between $3,310 to $3,819," claimed Dinesh Mohan, a transportation expert and professor of biomedical engineering at the Indian Institute of Technology in New Delhi. His speech appeared in the Asia Times article titled, "India's 'Cheapest Car' Comes at a Cost." 

To consumers looking for a cheap car that can be easily parked, the Nano might seem like a godsend, and the downsides may be overlooked. The car is made of relatively low-grade aluminum, has a small dashboard, no airbags, no anti-lock braking system, no spare tire, and the engine is situated in the back of the car behind the passengers. With the engine in the rear, there is little protection during a front-end collision. 

*Safety and Environmental Concerns?* 

While there are many benefits to owning the Nano, it may be the least safe car in the world, according to InfoDB Mag, an online-based Indian magazine. Considering urban India's nightmarish traffic and driving patterns, accidents could be fatal. 

This car "already fails the current Western emission and safety standards and will soon fail Indian standards too as India adopts the 'Euro-IV' emission norms," said Mohan. The Euro-IV, which will come into effect in 2010, sets limits on the amount of pollutants emitted by automobiles. For now, the Nano meets current Indian regulatory requirements and exceeds Indian emission requirements. 

Currently, India's infrastructure is underdeveloped, and few funds have been earmarked toward building and improving roads. There is little room for additional vehicles on India's already overcrowded and congested road system, according to a recent University of Pennsylvania study. 

*Global Ambitions *

The Tata Group has been on an acquisition spree since 2000, buying up 39 companies in the process, according to its Web site. In 2000, Tata bought beverage company Tetley Group Ltd. of the United Kingdom. Over the years, Tata has acquired companies in many countries across different industries. 

In addition to becoming a recognized global player, Tata's rapid expansion allows it to take greater risks, understand different market conditions, and improve living conditions for people in third-world countries. 

"India has people with skills. And it has people with considerable intellectual capabilities who have been leaving India because the opportunities were not there. We have to create these opportunities," said Ratan Tata in a 2005 interview with McKinsey & Co. 

Struggling U.S. automaker Ford Motor Co., is divesting Jaguar Cars Ltd. and Land Rover Group Ltd. Analysts believe the brands can fetch around $2 billion, and Ford is currently in exclusive negotiations with Tata Motors. The potential acquisition allows Tata to gain valuable insight into the latest manufacturing, marketing, and quality control processes. 

"We do not know whether it is Ratan Tata's personal ambition that is driving the [Jaguar and Land Rover acquisition] or whether it is a strategy that has been thought out for the good of the company," said Nandan Chakraborty, head of research at Enam Financial, in a recent Knowledge at Wharton interview. 

At this point however, there are more questions than answers. How many Nanos can Tata sell? Will the luxurious marques of Jaguar and Land Rover be affected as a result of Indian ownership? Regardless, the emergence of Tata as a global industrial heavyweight may finally signal the arrival of India as an economic superpower.


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## Bushroda

*Shifting the balance*
Chinese and Indian capitalism

Jan 24th 2008
The Economist, UK

FIVE years ago, Tarun Khanna, an Indian-born professor at Harvard Business School, grabbed attention with an article in Foreign Policy magazine speculating that India might eventually overtake China. Co-written with Yasheng Huang, a Chinese-American scholar at the Massachusetts Institute of Technology, the article argued that India's economic model offers more freedom to entrepreneurs which could help the country outpace its fellow Asian giant in the longer term. 

From a macroeconomic viewpoint, this argument was rather implausible, except in the extremely long term, for China's economy is already three times the size of India's. At the corporate level, though, it made more sense: as its recent unveiling of the world's cheapest car showed, companies such as Tata Motors promise to make the global grade rather faster than their Chinese counterparts.

With his new book Mr Khanna has returned to the topic of entrepreneurship in Asia's emerging giants. But he has dropped the idea of India outpacing China and replaced it with thoughts about the potential for co-operation between the two countries. Their social and economic systems are vastly different, as he shows in admirably detailed but chatty studies of companies and cities in both places. But they have strengths that could be complementary, he thinks, and he argues that foreign multinationals need to start thinking about the countries together rather than separately.

Unfortunately, the book's enthusiasm for Sino-Indian co-operation is rather unconvincing. Trade between the two countries is rising fast, as Mr Khanna points out, but from a very low base: it is only a tenth as large as trade between China and Japan, and a fifth as large as that between China and South Korea. Chinese companies want to learn about Indian software and outsourcing, just as Indian companies want to learn about Chinese manufacturing prowess. But then companies in both countries are also eagerly studying practices and skills in Europe, America and Japan too: there is nothing particularly special about the flow of people and ideas between India and China.

Politics, too, plays a part. Mr Khanna makes much of the opening of a border crossing high in the Himalayas to trade in 2006, for the first time since the Sino-Indian border war of 1962. Yet that crossing does not connect any of the large areas that are still disputed between the two countries, and only a few categories of goods may be traded through the reopened area. Relations between China and India have indeed been getting warmer in recent years, but the pair still harbour strong and understandable suspicions about one another: they are natural rivals, whether in Asia as a whole or in the countries squeezed between them, as the book's excellent section on Myanmar demonstrates.

Nevertheless, although the book's overall thesis feels as implausible as that of Mr Khanna's 2003 Foreign Policy article, Billions of Entrepreneurs remains well worth reading. The eye of this business-school professor for interesting stories is sharp and he offers illuminating explanations of why India and China work in the ways that they do.


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## Bushroda

*Boon for job seekers* 
Daily News, Sri Lanka
06 Feb 2008

Prospective Lankan overseas job seekers are in luck's way as India has opened its employment market to Sri Lankans. It is offering Dubai type salaries to the would be recruits. 

Faced with an acute shortage of skilled labour, our giant neighbour is increasingly turning to Sri Lankans to fill the void. This certainly is a recognition of Sri Lankan skills and workmanship in the employment market. 

It is also a repudiation of the oft repeated claim that Sri Lanka is a merely an exporter of housemaids to the Middle East. Our men and women have come a long way since those early days of the Middle East job boom. 

Recently even upmarket destinations such as California have asked for Lankan nurses to fill the shortage in the State's hospitals. It is hoped that India's invitation would open the floodgates for Lankan job seekers similar to the early Middle East job boom. 

The employment avenues opened for Lankans in India come even amidst job restrictions placed on Indians in the Middle East due to the dominance of Indians in the Middle Eastern job market - which goes to show the regard the recognition shown by India for Sri Lankan skills. 

We ran a story in our inside pages on Tuesday quoting a proprietor of a local Foreign recruiting agency saying that he has been receiving inquiries from South India for engineers and even unskilled workers. He also says a garment factory in Tirupur had asked for unskilled workers while a construction company in Bangalore has asked for Lankan engineers. 

According to him the mounting demands of a booming Indian economy has resulted in a shortfall in skilled manpower and India is increasingly turning towards Sri Lanka to off set the crisis. This certainly is a welcome development and would obviate the need for Lankans clamouring for Middle East jobs, if as reported the salary scales would be matched by India. 

The proximity factor too would lure more Sri Lankans to avail themselves of the opportunities offered in the vast Indian labour market. The close links between the two countries would also remove any fears and misgivings among prospective female recruits which they may otherwise entertain with regard to Middle East countries. 

In addition the close cultural ties between the two SAARC neighbours too would be an added impetus for Lankans turning towards India. 

According to the report the Government has reported an eight per cent increase in Foreign employment over the past year. But the new vacancies in the Middle East have mostly been in the skilled sector. With restrictions imposed on Indian labour in the Middle East there are vast openings in the Middle East job market for Lankans. 

This means that Lankans will have to acquire skills if they are to exploit the new opportunities. There is a huge demand for jobs in engineering, accountancy, hospitality and construction sectors. India which is among our largest foreign investors would no doubt wish to see economic prosperity in her Southern neighbour and would be only too willing to help her in whatever possible way. 

The opening of employment avenues to Sri Lankans should therefore be viewed in a positive frame and as an opportunity to be cherished. 

The Government on its part should undertake speedy measures to tap this potential to the fullest. Another encouraging development is that India has become one of the biggest investors in Sri Lanka. 

The upcoming SAARC summit where President Mahinda Rajapaksa would be conferred the Chairmanship of the regional body should be made use of to promote this aspect on a firm footing. Such mutual agreements between the two neighbours would ensure that the economic benefits too would accrue to our common interests and help further strengthen ties between the two countries. 

The new development would also go a long way to allay ingrained suspicions between Sri Lankans towards its giant neighbour and help build bridges that would go beyond the economic realm. 

The Government should wake up to the prospect of the potential of the new avenue opened by India for the economic empowerment of Sri Lankans and take every possible measure to bring this to fruition.


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## Bushroda

*Hardware boom: PC sales up 11%*
6 Feb 2008, 0021 hrs IST,TNN 

NEW DELHI: A rising rupee and slowdown in US economy may have affected sentiments in the Indian software sector, but the mood in the hardware sector is upbeat. What's adding to their smile is a rise in the overall PC sales, which shot up 11% to cross 32.8 lakh in the first half of 2007-08. What's more, its projected to cross 72.5 lakh units by end of 2007-08. 

Interestingly, while sales of desktop PCs have gone up marginally, it is expected to reach 55.5 lakh units by 2008-end. But it's notebook category that's really pushing the market. Sales grew at 59% to cross 6.8 lakh units in first half of 2007-08. These are some of the findings of a MAIT (Manufacturers' Association for Information Technology) study on the IT hardware industry. 

The bi-annual industry performance review reveals most PC consumption now is being driven by the household sector. In fact, consumption in the business sector declined by almost 17% while that of the household sector went up by 72%. So far, businesses had accounted for 62% desktop sales. 

"The slowing down of business category consumption could be because this may not be their buying cycle or no new vertical of business may have emerged. However, sectors like telecom, ITeS, education, continue to remain buoyant. And as e-governance programmes get finalised, sales may pick-up," says Vinnie Mehta, executive director, MAIT. 

The report shows larger businesses which contribute 55% of PC market share, saw a decline in sales by 31%. The SMB section grew from 4% to 16%. This is one of the reason why overall sales in desktop PCs moved southwards. Also, sale of MNC brands improved by 33% while Indian brands declined 24% and assembled ones went down 10%. 

Most of the consumption has come from the smaller cities as they now account for two-thirds or around 66% of the market. 

The printer market has not been so buoyant. While 6.8 lakh units were sold, there was a 10% decline in sales due to poor offtake in enterprise market. Internet penetration in the top 22 cities was 48% among businesses and 18% among households. 

Business segment now accounts for 32% of active Internet entities while household account for 68%.


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## Bushroda

*Employment increases in unorganised sector*
5 Feb, 2008, 2204 hrs IST, PTI

MUMBAI: The population below poverty line has come down with the rise in workers in unorganised sector, a report submitted by National Commission for Enterprises in the Unorganised Sector said. 

In January 2005, the total employment in Indian economy was 457 million, of which the unorganised sector accounted for 395 million, or 86 per cent of total workers, the report submitted by the committee headed by MP Arjun Sen Gupta said. 

The total employment increased from 397 million to 457 million between 1999-2000 and 2004-2005. The Commission has estimated that in the organised sector, employment increased by 8.5 million while in the unorganised sector it increased by 8.6 million. 

The increased employment in unorganised sector has brought down the percentage of population below poverty line, increasing informalisation of employment in the formal sector, indicated the report. 

The report also mentioned about socio-economic plight of workers from unorganised sectors. 

Low level of education and poor access to land denies workers access to good jobs in organised sectors. 

Commission also found that 40 to 50 per cent of men and 81 to 87 per cent of women workers get wages below the standard minimum wages. 

Maharashtra government has organised a workshop at Pune on February 8 based on this report. 

"Action programme suggested by the report will be discussed by the state planning board, trade unions and social activists", Executive Chairman of Planning Board Ratnakar Mahajan said.


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## Bushroda

*IMF Cautions India On Further Capital Restrictions*
Ruth David, 
02.05.08, 5:45 AM ET

MUMBAI - The International Monetary Fund has cautioned India against tightening capital restrictions to deal with a surge of foreign inflows into the country that is fueling inflation.

The rupee appreciated around 12% against the dollar last year as overseas investors pumped money into the capital markets, optimistic about Indias economic potential and industrial growth. That created difficulties for Indian exporters in sectors ranging from software services to ready-made garments.

Some restrictions on capital inflows have recently been introduced, primarily on corporate borrowing. International experience suggests that these restrictions are unlikely to have much impact on capital inflows because investors and borrowers find ways to evade them, the IMF said. The new curbs "raise concerns about the potential impact on financing for infrastructure projects, which tend to require the longer-term financing that may be more readily available from foreign lenders."

In October, the nations market regulator, the Securities and Exchange Board of India, tightened overseas investment rules to help stem foreign inflows. (See:  Indian Crackdown Likely To Hurt Hedge Funds) And, last month, the central bank, the Reserve Bank of India, asked lenders to review their high foreign currency exposure.

Though capital inflows are supplying much-needed financing to Indian companies and banks, they come at a considerable price. "India is facing the policy challenges of the 'impossible trinity': when there is free movement of capital, it is impossible to both target the exchange rate and maintain an independent monetary policy," the IMF observed in its annual country review.

India has for long had capital controls on the rupee, but policymakers have promised to ease them gradually. The IMF pointed out that while the Reserve Bank of India allowed exchange rate flexibility last year, it also intervened heavily in the foreign exchange market, causing reserves to rise by nearly $100 billion to about $275 billion. The bank "has also actively withdrawn liquidity from the system."

Inflation is a key concern for Indian lawmakers. The IMF said, "inflation risks are to the upside due to rising international food and fuel prices, ample domestic liquidity, tight capacity utilizations, and rising skill premia." It projected that wholesale prices would increase between 3.5% and 4% in the near term. Wholesale inflation quickened to a five-month high of 3.93% for the week ended Jan. 19.

The "temporary space provided by existing controls should be used to prepare for a more open capital account," the IMF emphasized. It called for increased exchange rate flexibility as a way to increase the effectiveness of Indias monetary policy. It urged the "broadening and deepening" of the countrys financial markets so that capital can readily be deployed most productively.

The IMF projected that Indias economy will grow at 8.75% for the fiscal year ending in March 2008. Policymakers within the country expect that number to come in at 9%, compared to 9.4% last year.

The fund also stressed that India needs to engage in fiscal tighening and implement structural reforms to sustain the high growth rates of around 8.5% it has averaged in the past four years.


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## Bushroda

*Dream a dreamless dream*
*Builders blame the government and the government blames the builders. But ordinary folk can only look at enticing billboards and luxurious ads and wonder if their dream of owning a modest house will ever come true. Surely, this is one possibility that can never happen*

Akash Bisht 
Delhi 

Rohit Handa's eyes lit up when he saw world's cheapest car, Nano, at the recently held Auto Expo 2008 in New Delhi. His dream of owning a car and house no longer looked like a dream. An engineer with the Municipal Corporation of Delhi for more than 15 years, Rohit has been saving money all this while to fulfil his dream of owning a car and a house. He has decided to buy the car when it will be available. After fixing an appointment with a real estate broker, he told the broker about his need of a decent apartment in the range of Rs 30-35 lakh in Delhi. This broker just looked with pity, laughed and said it is impossible to get a two-bedroom apartment in this range. He told me that to own such a house I would need at least Rs 60-80 lakhs. My hopes were dashed to smithereens. I just couldn't imagine that for a two bedroom apartment I would have to pay this much, says Handa. And from where can I get this much money. 

This middle-class engineer is not the only one who is feeling the heat of rapidly shooting real estate prices. He, like thousands of others, has been running from pillar to post in search of affordable houses, but in vain. Owning a house in Delhi or any other metro has become an impossibility for the so-called rising, upwardly mobile classes. Even if I decide to go for a loan of Rs 60 lakh, me and my wife will have to part away with 60 per cent of our salary every month on EMIs and I just can't afford that. So the only option left is to live in a rented house and shift to some other smaller town after our retirement, rues Handa. 

Vikram Ahuja, owner of Ahuja Realty in Saket, says, "A lot of people come to me and enquire about flats in the range of Rs 30-40 lakh and I have to tell them that there are no flats available in Delhi at such rates. Forget about Delhi, no such flats are available in Gurgaon as well." This story is not confined only to Delhi. Several other metros (see box) have also witnessed a quantum leap in real estate prices of late. Housing has become a nightmarish phenomenon for urban residents with modest salaries. 

While several new small townships are mushrooming near 'Tier-I Cities' (Delhi, Bangalore, Mumbai etc), they lack infrastructure. The ones which do, they come with a hefty price tag. Many speculators have invested money in real estate and have blocked houses which they sell after the prices shoot up. More than 50 per cent of houses and flats in Dwarka and NCR region are being used for speculative purposes. Delhi still has genuine buyers and sellers but I cant predict the future as a lot of NRIs and rich businessmen from India and abroad are eyeing Delhi as their next destination. If these 50 per cent houses are released the prices of property will definetely fall, informs Harpreet Singh of Property Vertical in New Delhi.

Hence, the only option available for burgeoning middle and lower income groups is to move to 'Tier-2 and Tier-3 Cities' (smaller towns like Pune, Chandigarh, Lucknow, Nagpur, etc), which have lesser job and career options. 

Sarabjeet Kaur is a school teacher and a single mother and has been living in a one-room flat for past nine years. She says,I have been saving money for two reasons: primarily for my daughters marriage and secondly to buy a house where I can spend my old age. When she enquired about flats in Delhi, she got a shock of her life. No flat in Delhi or even NCR costed below Rs 50 lakhs and hence she decided to dump the idea and is uncertain about her old-age.

The Indian economy is witnessing a nine per cent growth which is evident with the Sensex soaring to new heights, rising per capita income and capital being pumped into the economy by foreign investors in different sectors. This has led to a housing bubble, especially in the cities where prices have been rising every other day. A two-bedroom apartment that would cost around Rs 30 lakh five years ago is going for Rs 80-90 lakh today, says Rakesh Ranjan of Perfect Homes, a real estate agency. Land prices have gone up from 30 to 100 per cent in the past one year and real state stocks have risen by an astounding 2,000 per cent. 

Kumar Gera, Chairman, Confederation of Real Estate Developers Association of India (CREDAI), said, Though the real estate sector in the country is growing at a fast rate, it is not benefiting everyone. The sum total of direct and indirect taxes, duties and levies, amounts to a significant figure, almost in excess of 25 per cent, for a housing unit that has a pan India average cost of Rs 2,700 per sq ft. It negates the impact of this boom and widens the gap between what one can afford and what is available. Which is why, there is an urgent need to find ways to reduce these costs in order to deflate the price of the end product. 

The ASSOCHAM, in its recent report, stated that in 2007, real estate ended with a growth rate of 35-38 per cent. Merrill Lynch has predicted that the Indian realty sector is poised to grow from $12 billion in 2005 to $90 billion by 2015. This has fuelled the speculations: will this rapid growth balance itself out, or is it a bubble which will inevitably burst? 

I won't say it's a bubble, but yes, a lot of builders are focusing on luxury apartments. There is a huge demand and supply gap which in the future might lead to a fall in prices. Every builder wants to build luxury homes while no one's really looking towards building affordable houses for the rising middle class. These kind of homes have huge potential in the future but builders shy away from such projects as they do not offer huge incentives, says Nainesh K Shah, Executive Director, Everest Developers. 

Excess supply of luxury homes in Delhi and especially NCR region has left most middle-class families in despair. Whenever I go and ask for a descent apartment, brokers show me luxury apar-tments and I am fed up of telling them that since I cant afford them, I cant buy them. Their answer is that they have only such flats and for low-cost flats I should go to smaller cities, says Rajinder Singh, a retired postmaster. He has lost hope and says that he just doesnt have the courage to do house searching anymore. He now prefers to stay in a rented house.

With rapid urbanisation, one of the biggest challenges the government will be facing would be providing affordable housing to people who don't have huge incomes, especially the low middle class and the poor. According to National Urban Housing and Habitat Policy 2007, India's urban population in 2001 was 286.1 million  27.8 per cent of the total population. Over the past five decades, the annual growth rate of urban population ranged between 2.7 to 3.8 per cent. During the past decade of 1991-2001, the urban population of India increased at an annual growth rate of 2.7 per cent  0.4 per cent lower than that registered during the preceding decade. 

The process of urbanisation is marked by increasing concentration in larger cities. In 2001, 68.7 per cent of the total urban population was living in Tier-I Cities (with population of over 1,00,000). The share of medium and small towns in the total population stood at 21.9 per cent and 9.4 per cent respectively. However, the urban population is expected to become 576 million in 2030 from the current 328 million. 

Kumari Selja, Minister of State, Housing and Poverty Alleviation, in a recent conference organised by CREDAI in Delhi said, The urban housing backlog with increased urbanisation in India assumes alarming proportions, especially for the Economically Weaker Sections (EWS) and Low-Income Groups (LIG), which constitute more than 99 per cent share of total housing shortage of 24.71 million in urban areas. This magnitude of backlog is evident by the fact that 21 per cent of our total urban population live in slums or slum-like conditions, while 35 per cent of the households live in one-room tenements. 

The National Sample Survey Organisation (NSSO) (61st round) reports that urban poor have grown by 4.4 million between 1993-94 and 2004-05. It is, therefore, of vital importance that a new carefully caliberated National Urban Housing and Habitat Policy finds ways and means of providing 'Affordable Housing to All' with special emphasis on the EWS and LIG sectors. 

Most builders at the CREDAI conference felt that affordable housing is possible only with the support of state and central governments. They said that the housing problem would be the biggest problem in next five years and the only way to address it is that the government must incentivise builders and give tax rebates, as high as 40 per cent of the total cost. Amit Bagaria, CEO of Asipac Group, a pioneer in low-cost housing, complains, The government should sanction a 

particular plan in 30 days and it should have a single window clearance instead of a prolonged and byzantine process. In Bangalore, it takes 33 months for a project to get clearance; by the time it gets the okay, land prices shoot up. Thus a builder is forced to make luxury apartments instead of affordable houses. 

Most builders agree that the only way affordable housing can be built is with public-private participation. They argue that for low cost housing they will have to be innovative and use low-cost construction material that is as good as any other material. As Gera puts it, Affordable housing can be made by setting up 'special residential zones (SRZs)' with various exemptions, as in the case of SEZs. These SRZs should have small residential units below 60-70 sq. mtrs that can make large-scale affordable housing for the masses. 

When a common man buys a house it costs him more than his hand and leg and he believes in God and good luck before investing his hard earned money. We need to have licensed brokers and more transparency to eliminate this suspicion. Anybody and everybody shouldn't be allowed to join the profession as I know of many crooks who have become brokers to earn extra bucks and fool innocent people. They are neither civil engineer nor do they possess any knowledge of land laws, said Deepak Parekh, Executive Chairman, HDFC.

There have been numerous conferences and debates on affordable housing, but nothing concrete is happening on the ground. Builders blame the government and the government blames the builders; but ordinary folk can only look at the huge, enticing billboards and luxurious advertisements in newspapers and wonder if their dream of owning a modest house will ever come true. By all evidence available, it seems a case of possibility which can never happen.


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## Bushroda

*Rising rupee reflects strong economy: IMF*
Arun Kumar, 
Indo-Asian News Service
Washington, February 05, 2008
12:07 IST(5/2/2008)

The International Monetary Fund (IMF) views the rising rupee as reflecting the strength in the Indian economy, amongst the world's fastest growing economies with one of the highest rates of productivity growth in the region.

"The basic question one has to ask is: why is it that the rupee is appreciating?" a senior IMF official said Monday in a conference call on India's bilateral annual consultations.

"We look at the rupee in what's called real effective terms, which is adjusted for the difference in inflation between India and its partner countries, and that's up seven to eight percent over the last year or so, which is a significant figure," he said.

"It has very excellent prospects in terms of growth, a very strong corporate sector. It's shown a significant degree of resilience." 

However, IMF has one concern over Reserve Bank of India's (RBI) policy response.

The RBI "intervention is basically aimed at smoothing adjustment in the exchange rate. That is, India maintains a managed float regime", Charles Kramer, division chief in the Asia and Pacific department, noted.

"One concern with the intervention is its cost. When the RBI intervenes or when central banks intervene, generally, they accumulate foreign exchange assets. Carrying those assets has a cost.

"While the cost isn't very high right now, eventually the cost could increase. In an environment where the authorities are trying to make progress in making space on the fiscal side, that could be undesirable," he said.

On the issue of capital inflows, Kalpana Kochar, senior advisor and mission chief for India in the Asia and Pacific department, said India was not unique in facing capital inflows, but it was something that they are having difficulty coping with. "The fact is that India has been enjoying large capital inflows, which we believe to be at least partly the result of the fact that there's a strong growth story in India and investors are looking to take advantage of this, of the returns that they see coming from India," she said.

Another part is due to interest rate differentials between India and the rest of the world - certainly the advanced countries. In any event, capital inflows are large, Kochar noted.

IMF had discussed with India whether or not there were any adjustments to the policy framework that would allow them to cope better with this situation while recognising that it is, in fact, a challenging situation.

It had also discussed ways in which the financial sector could be strengthened to prepare better for these larger capital inflows, "of which we believe much of it is here to stay, reflecting the strength of India's economy", she said.

Asked how critical the problem was, Kochar said: "India is plugged into the world trade system, but India's exports have been diversified both in terms of goods as well as markets with far less reliance on the US than for many other countries.

"On service exports, for which of course the biggest destination is in fact the US, we don't have a whole lot of strong evidence but we do believe that the impact could go either way," she said.

"If, in fact, US corporates are looking to cut costs, it could be that they outsource more, and so India could benefit from that. If not, you could see a bit of a slowing in service exports. So, overall, on the spectrum of countries that are likely to be affected by this crisis, India is probably a bit further down. It is just our views on given the structure of India's economy and its exports and financial markets, at this point, we don't anticipate having huge effects," Kochar said.


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## Bushroda

*The new Indian market*
iAfrica.com, South Africa
Tue, 05 Feb 2008

Golf is among the fastest growing sports in India and the movers and shakers of the Asian and European Tours see huge potential to cash in. 

This week, the country becomes the 37th destination visited by the European Tour, which has spread its wings to co-sanction the Indian Masters with the Asian Tour. 

It is the richest golf event ever staged in the emerging economic powerhouse at $2.5-million, and heralds a month that will see three tournaments in a country that hosted just one last year. 

While China has been the target market over the past few years, India is seen as the new frontier. 

With local golfers tasting success overseas  sparking a surge in interest at the same time that incomes are rising  the European and Asian Tours considered it the right moment to dive in. 

"The growth of the Indian economy has coincided with the emergence of golf as a major sport in the country," European Tour chief executive George O'Grady said when he announced the tournament. 

"We are always keen to expand our tournament portfolio into new territories and we believe that the Indian Masters offers huge potential on that front. 

"Thanks to Indian pioneers such as Jeev Milkha Singh and Arjun Atwal, along with Jyoti Randhawa and Shiv Kapur, professional golf in India has taken a massive step forward over the past decade." 

The Asian Tour has a much longer history with India, and chief executive Kyi Hla Han told AFP it was thrilling to see how fast it was developing. 

"It is exciting to see golf in India booming the way that it is now," he said. 

"To have three major international events in February on the Asian Tour schedule is certainly a strong signal that the game in the sub-continent has come of age. 

"Corporate India sees the value of golf sponsorship with the successes of players" like Singh, Atwal, Gaurav Ghei, Kapur and Randhawa, he added. 

Indian golf has come a long way since amateur Biloo Sethi's Indian Open win in 1965 which remained the country's lone success in its home event till 1991 when caddie-turned-pro Ali Sher wrested the title. 

But the game remains an expensive hobby. It is cheaper to buy cricket bats and balls than a golf set which costs around 7000 rupees ($155) at a minimum. 

Despite this, the rise of Indian professionals abroad has inspired youngsters to believe there is life beyond cricket. 

Cricket legend Kapil Dev, who is now a keen golfer, believes India is capable of producing world-class players to breathe more life into the sport. 

"I feel this is one more sport where Indians are capable of achieving world-class standards," the former India cricket captain said. 

"Our boys are already playing some of the biggest events in the world and it is only a matter of time before they bring more trophies." 

JJ Singh, president of the Indian Golf Union, called this week's Indian Masters "an historic event". 

"The event is a result of the growing status of the game of golf in India, augmented by the Indian performances across the golfing globe," he said. 

"Indian golf will surely get a boost when the best talent from over seven continents will be on display and also will showcase the infrastructural development needed to host an event of this stature."


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## Bushroda

*India's 10 fastest growing cities*
*Rediff*
February 06, 2008 

A lot has been said about India's robust economic growth with economists predicting a bright future for the country. But few know of the booming Indian cities that are adding to the nation's growth. So which are the country's fastest growing cities? 

*1. SURAT* 
*Growth rate: 11.5%* 






Surat is Gujarat's second largest city with a population of 4 million. It is the fastest growing Indian city in terms of economic prosperity. The city has registered an annualised GDP growth rate of 11.5 per cent over the past seven fiscal years, according to the data compiled by economic research firm Indicus Analytics. 

Known for its thriving diamond and textile industry, Surat is situated on the banks of the Tapti river. More than 90 per cent of world's diamonds are cut and polished here. 

These two industries have largely contributed to the city's growth as the economic powerhouse of India. Though often affected by floods and earthquakes, the city has always come out on top. 

Improved infrastructure has been key to Surat's rapid rise. A number of elevated roads and flyovers have facilitated the thriving diamond and textile business of the city. The city's Varachcha flyover is claimed to be India's longest. Surat with its low unemployment rates, high job rates and one of the highest per capita small business credit is the top destination for jobs and business. It is said that if you want to make money, Surat is the place to be in.

*2. BANGALORE* 
*Growth rate: 10.3%*





What was knows as the Pensioners' Paradise 10 years back, has grown 10-fold today and a study reveals that the rupee millionaire club in Karnataka's capital is the most crowded in India. Bangalore also boasts of having the largest number of households with an annual income of Rs 10 lakhs (Rs 1 million) or more. 

With an estimated population of 6.5 million, Bangalore is one of India's most populous cities. 

How has this city which was more famous for its gardens and laidback lifestyle changed so much in character? The two reasons that come to every Bangalorean's mind are: the advent of the IT industry, and subsequently the boom in real estate prices. 

Unlike other cities in India, Bangalore's main activity is information technology and information technology-enabled services. Being the leading contributor to India's IT industry, the city is often referred to as the Silicon Valley of India. Software majors Infosys and Wipro being headquartered in the city, Bangalore contributed 33 per cent of India's Rs 144,214 crore ($ 32 billion) IT exports in 2006-07. 

Businesses involving large corporates that are either multinational companies or Indian firms dealing with or catering to MNCs employ a very large workforce in Bangalore. And although the city's infrastructure has been unable to keep pace with the rapid growth of the city, Bangalore still remains one of India's boom towns.

*3. AHMEDABAD* 
*Growth rate: 10.1%* 





The Ahmedabad region, including Gandhinagar, of Gujarat is the largest inland industrial centre in western India and has been an important base of commerce, trade and industry. With a population of 56 lakh (5.6 million) Ahmedabad has seen great prosperity because of its proximity to Surat and its access to the hinterland of Gujarat. 

Though dusty roads and bungalows used to dot the city once, Ahmedabad is now witnessing a major construction boom and an increase in population. In recent years, the city has seen a significant rise in information technology and scientific industries. 

Apart from these, chemicals and pharmaceutical industries contribute to the state's economic growth, with two of the biggest pharmaceutical companies of India -- Zydus Cadila and Torrent Pharmaceuticals being based here. 
Ahmedabad also forms the corporate headquarter of the Nirma group of industries and Adani group. Of late, many foreign companies have set up their units here. Among them, Bosch Rexroth of Germany, Stork and Rollepaal of Netherlands deserve special mention.

*4. MUMBAI* 
*Growth rate: 8.5%* 





The commercial capital of India is one of the world's top ten trade centres. The city contributes 25 per cent of industrial output and 70 per cent of capital transactions to India's economy. 

The city accounts for about 1 per cent of the total population in India but has a per capita income which is almost three times that of India. Mumbai accounts for 14 per cent of India's income tax collections and 37 per cent of the corporate tax collections in the country. 

The city is the berth of significant financial institutions like the Reserve Bank of India, Bombay Stock Exchange and the National Stock Exchange of India. 

One of the largest special economic zones in India is being set up in Navi Mumbai, to be spread over an area of around 50 square kilometers. 

Numerous corporates and multinational companies have their headquarters in the city that attracts migrants from all over India. The city offers countless employment opportunities and is known for its interesting and high standard of living.

The city, with a population of 19 million, is also known as the Indian seat of entertainment as it is the home to the Hindi film industry, the largest in the world.

Most of the city's inhabitants rely on public transport to commute. Transport systems in Mumbai include the Mumbai suburban railway, also known as the lifeline of Mumbai, BEST buses, taxis and auto rickshaws.

*5. NEW DELHI* 
*Growth rate: 8.4%* 





Though it can't rival Mumbai in terms of contribution to the growth of the Indian economy, the capital of India, is no pushover. 

Delhi's, (including its nine districts and adjoining Noida, Ghaziabad, Faridabad and Gurgaon) total GDP stood at Rs 1,60,739 crore (Rs 1,607.39 billion). It contributes 4.94 per cent to all-India GDP. 

Connaught Place, one of northern India's largest financial centres, is located in the heart of Delhi. 

Being an important commercial centre in South Asia, Delhi has a per capita income of Rs 53,976, which is more than double the national average. 

Delhi's key service industries, backed by as strong and well laid out infrastructure, include IT, telecommunications, hotels, banking, media and tourism. In recent times, Delhi's manufacturing industry has grown considerably and consumer goods industries have established manufacturing units and headquarters in and around the capital. 

Construction, power, telecommunications, health and community services, and real estate form the backbone of Delhi's economy. The capital's retail industry is one of the fastest growing industries in India. 

Public transport in Delhi consists of buses, auto rickshaws, taxis, suburban railways and metro rail.


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## Bushroda

*6. HYDERABAD* 
*Growth rate: 7.8%* 





Hyderabad, the financial capital of Andhra Pradesh, is also known as the city of pearls. With an estimated population of 7 million, the city is the biggest contributor to Andhra Pradesh's gross domestic product, state tax and excise revenues. 

As per 2006 statistics, the per capita income of Andhra Pradesh was at Rs 25,625 (less than Rs 200 of national average). The city, which used to be primarily a service city, is now the seat of many businesses, including trade, transport, commerce, storage, communication and lately IT. 

Like Bangalore, Hyderabad too has witnessed a real estate boom in recent times, mainly because of the growth of IT and retail business in the city. 

Major pharmaceutical companies like Dr Reddy's Laboratories, Matrix Laboratories, Aurobindo Pharma Limited and Vimta Labs are located here. 

Hyderabad has also made considerable progress in the field of bio-technology through initiatives like Genome Valley and Nanotechnology Park. For the advancement of infrastructure in the city, the Andhra Pradesh government is building a skyscraper business district at Manchirevula.

*7. PUNE* 
*Growth rate: 7.4%* 





The growth of this major industrial city, located roughly 150 km east of Mumbai, has become the topic of discussion these days. 

Starting from automobile majors like Tata Motors, DaimlerChrysler, Pune will soon house units of global biggies like General Motors, Volkswagen, Fiat, et cetera. A number of important engineering goods industries like Cummins Engines Co Ltd and Bharat Forge Ltd, electronic goods companies like LG, Whirlpool, food companies like Frito Lay and Coca Cola are also located here.

Of late, Pune's software industry has grown by leaps and bounds. IT parks like Rajiv Gandhi IT Park at Hinjewadi, Magarpatta Cybercity, MIDC Software Technology Park at Talawade, Marisoft IT Park at Kalyani Nagar are seats of technology that the city can boast of. To meet the demands of this explosive economic growth in Pune, the state of Maharashtra is planning a 1,000 MW power plant to exclusively cater to the need of Pune. MIDC is the lead agency for the project.

*8. BARDHAMAN* 
*Growth rate: 6.6%* 





Situated nearly 100 km north-west of Kolkata, Bardhaman is the headquarter of the district of the same name. With nearly 58 per cent of the population earning their livelihood from agriculture, Bardhaman has earned the name of 'granary of West Bengal'. 

Rice grown in the area is supplied to various parts of India and also exported to the neighbouring countries. Though predominantly an agricultural area, Bardhaman also houses a number of industries backed mainly by rich mineral sources available in the area and also imported from the neighbouring Indian states of Bihar, Orissa and Assam. 

The industrial belt of Bardhaman has mainly developed embracing the Asansol and Durgapur sub-division. Two most prominent industrial units of the area are Durgapur Steel Plant and Durgapur Alloy Steel Plant. 

Other industries that thrive in the area include coal-based industries, chemicals and power plants. The Damodar Valley Project has gone a long away in meeting the irrigational need of the region. Indian Iron and Steel Industry (IISCO) forms the economic backbone of Asansol area. It is the oldest pig iron and iron casting unit in India. Chittranjan Locomotive, a government undertaking, supplies locomotive parts all over India. Several cottage industries have also developed in the area that support the area's rural economy.

*9. KOLKATA* 
*Growth rate: 6.3%* 





Often termed fondly as the cultural headquarter of India, the capital of West Bengal has a population of 5 million. 

Like its many other metropolitan cousins, Kolkata suffered from economic stagnation in post-independence India. However, since 2000, the city has witnessed an economic rejuvenation, thanks to the development of IT industry in Rajarhat in Greater Kolkata. The city's IT sector is growing at 70 per cent yearly -- twice that of the national average. 

The city has seen a surge of investments in the housing infrastructure sector. Several new projects have come up in recent times. 

Some reputed companies are headquartered here. Of them, Bata India, ITC Limited, Birla Corporation, Domodar Valley Corporation deserve special mention. Opening of the Nathu La in Sikkim as a trade route has put Kolkata in an advantageous position. Like other metropolitan cities of India, Kolkata continues to struggle with problems like poverty, pollution and traffic congestion.

*10. CHENNAI* 
*Growth rate: 6.2%* 





The capital of Tamil Nadu, the fourth largest metropolitan city in India, has an estimated population of 7.5 million. 

The economy of the city is supported by industries like automobile, technology, hardware manufacturing, and healthcare. According to a recent report in _The Hindu_, economists have predicted that Chennai's per capita income would increase from $468 in 2000 to $1149 in 2015 and $17,366 in 2050. 

The city houses India's major automobile companies and happens to be India's second-largest exporter of information technology and information-technology-enabled services, behind Bangalore. 

Buses, trains, and auto rickshaws are the most common form of transport within the city. To counter traffic congestion, the state government of Tamil Nadu is building a number of flyovers at important intersections.


----------



## Neo

*Doha deal gives only modest gains to India​*
GENEVA: Indias output would grow by only an additional one half of a percent under a successful Doha round deal to open up world trade, according to a study by the Carnegie Endowment for International Peace published on Tuesday. 

However this would be better than the potential gains from the most favourable bilateral trade agreements under consideration, the study said. A Doha agreement along the lines of the studys simulation would be positive, albeit quite modest, for India, it said. 

Economic simulations by the US think-tank suggest a deal would boost domestic production in the worlds second most populous country by only $4.5 billion, or 0.52 percent, the study said. 

Exports would increase by $2.4 billion or 3.8 percent, with the strongest gains seen in apparel, textiles, leather and footwear, it said. Imports would rise by $2.2 billion or 2.9 percent. Indias vibrant industry and flourishing services sector mean it is well placed to benefit from any trade deal. The economy, Asias third largest, is expected to grow by 8.75 percent in the year ending in March, the IMF said on Monday. 

But with almost two thirds of Indias 1.1 billion people living in rural areas and over half working in agriculture, India is vulnerable to fluctuations in food prices. 

The study warns that the potential gains from a deal could be wiped out by falls in the price of agricultural commodities, if India binds its agricultural tariffs under the deal at levels preventing it from offsetting global price shocks. A 50 percent fall in the world rice price would have a negative impact on Indias real income as large as the positive impact of the entire Doha deal, with poorest households suffering most, the study said. 

These results suggest that the Indian governments concern over the potential negative effects of a Doha agreement on poverty and rural development is well founded, it said. Trade ministers plan to meet at the World Trade Organisation (WTO) in Geneva in March or April to agree the outlines of a Doha deal, including the size of tariff and subsidy cuts. 
The chairman of the agriculture negotiations at the WTO, New Zealand ambassador Crawford Falconer, is due to issue a revised negotiating text this week. Trade diplomats expect that to leave the size of tariff and subsidy cuts open, but to focus on issues such as the extent to which rich and poor countries can shield sensitive products from price fluctuations and import surges, and how they do that.

Daily Times - Leading News Resource of Pakistan


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## Bushroda

*India May Attract More Global Investment Due To US Slowdown*
RTT News, NY

2/6/2008 5:03:17 AM Global investments in India will likely surge if the anticipated US slowdown materializes, the Indian Commerce and Industry Minister Kamal Nath said Wednesday. This is mainly due to a shift in preference of global funds to a rapidly growing Indian economy, he said.

India's Plan Panel said last December, that the country needs a total investment of about US$500 billion in its infrastructure sector during 2007-2012. Bulk of this is expected from foreign direct investment.

Nath said his ministry is currently evaluating the impact of a US slowdown on the Indian economy. "We must ensure we do not get psyched into the sentimentality of the US downturn. It should not psyche India into pessimism or into an economic impact here," Nath said.

According to the Minister, India's GDP would grow by more than 9% in 2007-08. Finance Minister P Chidambaram said last week, that the economy would grow 9.6% in the current fiscal. 

On Monday, IMF's Senior Adviser and Mission Chief for India, Kalpana Kochar said in Washington, that the Indian economy will expand 8.5% this fiscal. According to her, India may remain relatively unaffected by the ongoing global financial crisis, given the structure of its economy, exports and financial markets.


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## Bushroda

*Germany's SAP sees India growth on robust economy*
Sumeet Chatterjee, Mark Williams
Wed Feb 6, 2008 

Feb 6 (Reuters) - German software firm SAP AG (SAPG.DE: Quote, Profile, Research) sees better growth in India, as small and medium-sized firms and public sector companies spend more on technology in a booming economy, its India business unit head said on Wednesday.

"In the next three years, we will be one of the top five revenue producing regions in the world. We expect to have a very large growth rate going forward," Ranjan Das, president and chief executive of SAP's Indian subcontinent business told reporters.

"Lot of the growth in India has come from expansion of the Indian economy itself."

The Indian economy, Asia's third-largest, has grown at an average 8.8 percent in the past four years and is poised to grow at a similar pace in the current financial year that ends in March.

India is the fastest growing geographic location for SAP worldwide. The company does not disclose the revenue contribution of India to its global sales.

SAP and other multinationals such as IBM (IBM.N: Quote, Profile, Research), Microsoft (MSFT.O: Quote, Profile, Research) and Oracle (ORCL.O: Quote, Profile, Research) compete with India's export-driven software services firms for local contracts.

SAP, the world's biggest maker of business software, started India operations in 1996. In the local market, the company has over 3,000 customers including Tata Motors (TAMO.BO: Quote, Profile, Research), HCL Technologies (HCLT.BO: Quote, Profile, Research), ACC Ltd (ACC.BO: Quote, Profile, Research) and Mahindra & Mahindra (MAHM.BO: Quote, Profile, Research).

Das said SAP saw huge business opportunities in the public sector, retail, engineering and construction and utility sectors in India, as companies expand rapidly and step up investment in technology to boost profitability and efficiency.

SAP will launch Business By Design, software aimed at smaller companies, in the Indian market in April to further boost its market presence, he said.

SAP announced in 2006 it would spend $1 billion by 2011 in the fast-growing Indian market to grow its operations and double its headcount.


----------



## Bushroda

*The right questions on India and China* 
By Tunku Varadarajan 
Financial Times, UK
February 6 2008 

*Billions of Entrepreneurs: How China and India are reshaping their future and yours

By Tarun Khanna

Harvard Business School Press, $29.95, £16.99*

On finishing this earnest and entertaining book (yes, its possible to be both), my first reaction was to slap the author  metaphorically  on the back for refusing to deploy the word Chindia in his text.

That ghastly neologism  China plus India, rendered as a portmanteau word  is seldom absent from any discussion of the two huge Asian countries and their impact on the world order. In fact, ever since it was coined by a BusinessWeek writer, Chindia has come to represent an object of both paranoia for those in the US who fear economic eclipse, and pride for Asian dreamers who long for the day when the US gets its comeuppance. But in reality China and India, far from being in strategic wedlock, remain cool and wary neighbours.

Tarun Khanna, a professor at Harvard Business School, has written extensively on the comparative economic growth of China and India, and this book draws on his academic research. That is not to say it is a wholly original book. The Chinese and Indian economic success stories have been with us for so many years now that there is little eye-catchingly new to be said.

What Khanna does do, and does well, is cover vast sociopolitical and economic ground, and provide meaty information derived from conversations with people who have done business in India and China.

His other gift is to frame the right questions, and to go beyond the standard question of why China attracts so much more foreign direct investment than India. Why can China build cities overnight while Indians have trouble building roads? he asks; and yet Why are there so few world-class indigenous private companies from mainland China in spite of the creation of a juggernaut of an economy?

Khanna also subverts the usual authoritarian-versus-democratic dialectic that hovers over comparisons of China and India by asking: Why does China prohibit free elections while Indians, in free and fair elections, vote in officials with criminal records? 

But his most fascinating question, for those of us inclined to discern cultural factors in any story of economic success or failure, is: Why do the Chinese like their brethren overseas, while Indians apparently do not?

This is an economic question because, as Khanna explains, Chinas excellent diaspora management and Indias embarrassing diaspora mismanagement arguably made all the difference in terms of FDI at the start of each countrys economic liberalisation. As much as 80 per cent of Chinas FDI in the early years of reform came from Chinese living overseas. 

While China embraced a principle by which citizenship (or its practical equivalent) was conferred by blood, independent India mandated that place of birth dictated citizenship. For years, millions of overseas Indians were thus unable to put their money to work in India. It was only in 2002 that the Indian government began to court overseas Indians in earnest and to grant them legal standing in their home country as Persons of Indian Origin.

This points to a broader message, one that Khanna makes in various forms throughout his book  any transition of the two economies to developed status will be powered by entrepreneurism  not just by Infosys or Huawei and the like, but by people such as politicians behaving entrepreneurially.

Intriguing, too, is Khannas discussion of the distinctive ways in which China and India have projected their power beyond their borders. Borrowing conceptually from Joseph Nye, the political scientist, he characterises China as a country adept at putting hard power to use. This explains the countrys ascent in Africa and elsewhere, and its hard-power global expansion has been the result of premeditated and orchestrated state policy.

Indias influence, by contrast, has largely been achieved through soft power and, just as Prof Nye located Hollywood as a centre of American soft power, Khanna finds that the force is with Bollywood, Indias film industry. Other sources of Indias soft power, he avers, are its software industry, spiritual gurus and broader intellectual tradition.

Khanna is Indian but is unfailingly neutral in this China-versus-India conspectus, and that is a blessing. Too often, such discussions fall victim to nationalist hot air. We can do without yet more of that.

*The author, a professor at New York Universitys Stern Business School, is a contributing editor to the Financial Times *


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## Bushroda

*New Paths Into India Offer Alternative Indexing Strategies* 
By Murray Coleman 
Index Universe, NY
Wednesday, 06 February 2008 

With stocks in India's major indexes compounding at an annualized rate topping more than 20% in the past decade, it's not surprising that the exchange-traded funds (ETFs) market focusing on that country is about to expand threefold. 

But do long-term-minded investors really need so much of a still-emerging marketplace? 

"People ask why they need more exposure to India," said Luciano Siracusano, research director at WisdomTree Investments. "The Indian economy is growing faster than the rest of the world. And it's an excellent diversifier for U.S.-stock focused portfolios." 

But other broader emerging markets ETFs already offer exposure to India. For example, the Vanguard Emerging Markets ETF (AMEX: VWO) had about 8.3% of its holdings invested in that market heading into 2008. 

India is becoming a bigger part of cap-weighted indexes, points out Siracusano and Ranga Nathan, managing director at Indus Advisors in Chicago. Both WisdomTree and PowerShares are racing to join an existing exchange-traded note (ETN) that focuses on India. The PowerShares ETF will follow an index developed by Indus. 

*Race Is On To Capture Country's Growth* 

The country's market cap size is trading around $1.1 trillion now. That would equate to about 2.5% of the world's total. By contrast, India's market cap represented some 0.2% of the world in 1989. 

"So it has increased in size 12-fold," said Siracusano. "And most of that growth has come in the past five years." 

The country's gross domestic product rose from being a fraction of the world's total to 6.3% in 2006. India's share is expected to keep rising and reach 6.6% in 2008. 

Emerging markets has been the fastest-growing part of the equity markets worldwide not only in the past five years but also the past 10 years, says Siracusano. 

"The question is whether you're comfortable with the weightings of India in the market-cap-weighted emerging markets ETFs out there," he added. "Some people want to make their own country allocations and this is an easy way to do it." 

The WisdomTree Emerging Markets High-Yielding Equities ETF (NYSE: DEM) doesn't give India a large weighting since the country's tax policies tend to work against companies offering higher dividends, Siracusano says. 

But emerging markets as a whole are paying roughly 10% of the global dividend stream, according to WisdomTree research. Although he doesn't give specific recommendations on asset allocation issues, Siracusano adds: "We think that 10% range is a good starting place for diversification purposes in emerging markets." 

*New Ways To Slice And Dice India *

For those interested in juicing up their exposure more to India, later this month some definite alternatives should be available. 

Currently on the market is the iPath MSCI India ETN (NYSE Arca: INP). But it uses offshore derivate instruments, or ODIs. The Indian government has clamped down on use of ODIs in recent months to slow the flow of "hot money" coming into the economy. 

With regulators restricting trade in derivates contracts by outside investors, critics argue that the net result is that INP now isn't acting like an open-end vehicle. At one point late last year, the ETN's price was trading at around a 20% premium to its net asset value. 

As a result, the iPaths ETN now acts more like a closed-end fund, says Theodore Feight, president of Creative Financial Design in Lansing, Mich. 

But he doesn't necessarily see that as a bad development. "I see a lot of the emerging markets ETFs trading like closed-end funds," Feight said. "So the iPaths ETN for India isn't out of the ordinary." 

He's using INP as more of a trading vehicle, however, in clients' portfolios. "We don't mean to use it that way, but our strategy is to protect on the downside and get as much on the upside as possible," Feight said. "That means we put strict stop-loss orders on each ETF. In the case of our more-volatile funds, that can cause them to act more like trading vehicles." 

Feight warns that INP has averaged daily swings of 2-3% since his advisors started using it. That was in December of 2006, just after the ETN launched. 

"We use three different ETFs to gain emerging markets exposure," Feight said. "We like to create our own separate emerging markets allocations for some clients rather than using a broader benchmark. It lets us control volatility to a greater extent." 

He says the firm will keep INP as part of its longer-term allocation plan for more aggressive investors. "Over the next 10 years, we think that India along with several other key emerging markets will provide important diversification benefits for U.S. investors," Feight said. "That's where we see more of the world's profits coming from in the future." 

He adds that he likes some of the concepts behind the new India-focused ETFs. But he plans to monitor issues such as tracking error and performance over time before making any concrete decisions. "I'd like to see even more choices become available in emerging markets," Feight said. "The more tools you have to control volatility and deal with changing diversification issues over time, the better." 

*How WisdomTree Compares *

The soon-to-debut ETFs specializing in India figure to introduce several new wrinkles. 

The benchmark for WisdomTree's India Earnings ETF won't use derivates. It also will be broader in scope with some 150 local companies included rather than INP's total of around 62. And unlike the ETN, which is strictly market-cap weighted, WisdomTree's version will use a fundamentally weighted methodology. Names will be ranked chiefly by profitability measures. 

As such, sector weightings should be much different in some areas. INP, for example, has more than a quarter of its assets in financials. WisdomTree's benchmark holds about half that much. Conversely, energy is a much smaller part of the ETN's portfolio than that of the new one. WisdomTree's index holds about 25% in that sector. Tech exposure is about the same in each. 

"India's one of the most expensive markets in the world right now," said Siracusano. "With our focus on profitability rather than market-cap sizes, we're going to be able to give people an opportunity to gain exposure to the Indian market at more reasonable prices." 

He estimates that the trailing price-earnings ratio of the underlying index for the new ETF is trading around 40% lower than that of the soon-to-be rival ETN's benchmark. By WisdomTree's figures, their ETF is trading at around 15 times trailing PE multiples compared to current market-cap-weighted indexes' 25 times. 

*PowerShares Using Indus Benchmark *

The PowerShares India-focused ETF will provide a third alternative indexing methodology. While it'll come with a traditional market-cap-sized weighting overlay, the PowerShares India Portfolio will adjust individual names according to foreign investment flows. 

The government imposes an average limit of 24% on foreign holdings in the country. But with its sheer size, Indus Advisors' Nathan says that still leaves room for around $250 billion in outside capital to flow into markets. 

"But some industries are restricted more than others," he said. "Many banks, for example, can only accept about 20% in foreign investments. Media outlets are restricted to about 10%." 

Such regulation varies not only by sectors but in many cases by companies, Nathan says. Figuring those sorts of nuisances into an index is important to truly capturing proper exposure to Indian stocks, he added. 

"We've built a passive index that takes into account foreign holding limits, company by company. It also includes how much of those limits have been used," said Nathan. 

Allocations are based on IndusCap. That's a measure of the capitalization available for each company to foreign investors each day. It takes into account not only current foreign holdings but also so-called "locked-in" shares. Those are shares not available in secondary markets. These are typically owned by groups such as promoters and government agencies. 

The benchmark includes 50 stocks with the highest IndusCap measures. It's rebalanced quarterly. Nathan says that he expects turnover to be more than other India benchmarks. 

No company will represent more than 10% of the index's total assets. And no single name in the bottom half of the weightings will be more than 5% of the total index. The top 10 names accounted for nearly half of the index's total entering February. 

Indus also breaks sectors into broader categories than most benchmarks. Those are: Energy (25%); Tech and Telecom (28%); Financials (14%); Industrials (16%) and Consumers (10%). The latter includes Health care. Another 7% is scattered among other smaller categories. 

WisdomTree says foreign investment levels are among the fundamental factors its new benchmark for India will consider as well. 

"The investible universe an index measures is critical in markets like India where there are very defined limits on how much foreigners can invest," Nathan said.


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## Bushroda

*SAP says India is its fastest-growing market, sees no slowdown*
AFP

BANGALORE, India (AFP)  The world's biggest business management software maker SAP said Wednesday that India is now its fastest growing market as competition forces companies to use technology to cut costs.

For the first time, India is among the German giant's top 10 markets, leapfrogging a "whole bunch of countries," Ranjan Das, head of SAP India, told a news conference.

The company's Indian unit had a record-breaking year in 2007 by more than doubling its number of customers to 3,000 from 1,350 at the end of 2006,

The company's license revenue in the country also more than doubled in the year while sales to small and medium companies jumped 2.3 times.

Overall revenue grew 68 percent -- the fastest pace for SAP worldwide, Das said, declining to provide precise figures.

"It's incredible," Das said. "Growth has become the name of the game for Indian companies, which are looking for operational efficiencies and are rapidly adopting technology solutions."

SAP has been focusing on emerging markets as it chases its goal of more than doubling customers worldwide to 100,000 by 2010. SAP announced in 2006 it would invest one billion dollars in India by 2010.

Das added he did not expect a reduction in spending by US technology firms as a result of a US economic slowdown to have a fallout on the Indian market because the South Asian country is a "self-sustaining economy."


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## Bushroda

*Indian Software Firms Need To Debug U.S. Slow Growth Problem*
Ruth David, 
FORBES, NY
02.06.08

MUMBAI - Their quarterly numbers may have met consensus expectations, but India&#8217;s software service companies face slowing growth in their key U.S. market, according to a Goldman Sachs note.

Revenue growth for the top five companies appears to be on a slowing trajectory, with the exception of Satyam Computer Services, whose net profits climbed 29&#37;. Satyam Computer reported volume growth above its larger peers for the most recent quarter. &#8220;We forecast a further slowing over the next three quarters, as IT budgets are expected to come under pressure on slower GDP growth in the U.S., and lower capital spending and business investments,&#8221; analysts including Julio C. Quinteros said in a note to clients.

The U.S. economy grew 0.6% for the three months ending in December, making 2007 the most sluggish year for the nation since 2002. For all of last year, GDP growth stood at 2.2%.

India&#8217;s main software service companies are Tata Consultancy Services, Infosys Technologies, Wipro, Cognizant Technology Solutions (nasdaq: CTSH - news - people ) and Satyam Computer Services. Goldman retained its neutral view on the sector.

Because in a climate of steady rupee appreciation their dollar-denominated results yield a faster growth profile, Goldman is weighted toward U.S.-listed American depositary receipts and away from the counterpart shares listed on the Indian stock exchanges. Among information technology ADRs, the investment bank favors Cognizant and Satyam, both rated as &#8220;buy.&#8221; Within India&#8217;s domestic market, Goldman has a &#8220;buy&#8221; on Tata Consultancy Services, whose profits rose 19% in the December quarter. 

&#8220;Technology and IT services spending tend to lag GDP growth &#8230; therefore we believe that any potential spillover impact from the U.S. economy has yet to materialize in reported results,&#8221; said the note. &#8220;We continue to anticipate a downward bias to current consensus expectations.&#8221; 

Last year, technology stocks were among the worst performers on the Indian exchanges as investors sold off on concerns about the appreciation of the rupee against the dollar and slowing growth in the West. They continue to lag this year. Goldman analysts said the IT stocks under coverage collectively declined 13% year-to-date versus a decline of 10% for the benchmark Sensex. On the U.S.-listed side, stocks under its ADR coverage have declined an average of 9% since January versus a 5% decline for the S&P 500.

Last month, Tata Consultancy Services cut the variable portion of an employee&#8217;s pay that is linked to company performance for the first time in two years, after reportedly failing to meet internal revenue growth targets. And in the past week alone, reports have emerged of both TCS and IBM (nyse: IBM - news - people ) firing a combined 1,200 or more employees who failed to meet performance reviews. (See: " Tata Consultancy, IBM Dismissing Workers In India")

In a bearish market Wednesday, Wipro (nyse: WIT - news - people ) was down 6.5%, at 425 rupees ($10.78), on the Bombay Stock Exchange, while Infosys (nasdaq: INFY - news - people ) fell 6.3%, to 1,510.60 rupees ($38.32). Satyam Computer Services (nyse: SAY - news - people ) was down 6.7%, at 408.65 rupees ($10.36). Tata Consultancy Services fell 5.2%, to 900.55 rupees ($22.84). The Sensex lost 2.8% by the end of day.

Also Wednesday, the consultancy Gartner said technology budgets worldwide are expected to increase 3.3% this year, slightly higher than in 2007. For firms in India, the average increase will be around 13.3%. Increased spending by Indian chief information officers is directed mainly toward building up new lines of businesses. The information and communications technology market in India is expected to grow at a compounded average of 20.3% annually to reach $24.3 billion by 2011, Gartner said. 

With the U.S. recession in mind, Gartner is asking clients to work on two technology budgets, the official one that assumes continuous growth and a "shadow budget" that prioritizes projects.


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## Bushroda

*India has jump on China in golf, says Els*
AFP

NEW DELHI (AFP)  India and China are both emerging economic powerhouses, but Ernie Els says the giant South Asian country has the jump on its communist neighbour when it comes to golf.

The world number four, one of the sport's most prolific travellers who is a regular in Asia, based his assessment on India having developed players more quickly than China.

But he suggested India, which this week hosts its first European Tour event, needs to build more courses and fix up its infrastructure to truly make the teeming nation a golfing power.

"I think they've got a couple more tournaments in China, more golf courses at the moment, but India is obviously right on its heels and is growing at a rapid pace," said the South African.

"I feel that Indian golfers at the moment are at a better level.

"I might get shot for saying this, but you look at Jeev Milkha Singh and he's won on the European Tour, in Japan, and then there's Shiv Kapur, Jyoto Randhawa, and Arjun Atwal.

"So Indian players have already broken through and I think that's really going to help in the future."

China plays host to six Asian or European Tour events this year while India will hold four, up from just one last year.

Els said India still had its work cut out, but sees a bright future.

"You need to start building more courses and better infrastructure for your future golfers," he said

"But it will grow. There's a lot of talent here, Indians play a lot of ball sports like cricket, hockey, there are good tennis players, so the ball sense is there with the youngsters.

"Picking up golf will be easier here than in China."

And, like Asian Tour chief Kyi Hla Han, Els expects more big golf tournaments to head to India.

"With the economy going the way it is over here, there's a lot of huge property development, a huge growing middle class, so I can see a lot more golf events being played here and I'm sure big players will follow."


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## Bushroda

*Cisco in drive to train 360,000 Indian engineers*
*The move by the Silicon Valley giant is a vote of confidence in the midst of uncertainty around the Indian IT sector*

Rhys Blakely, Bombay 
Times Online, UK
February 6, 2008

Cisco, Silicon Valley's largest company, has massively accelerated its Indian expansion drive, planning to train to 360,000 engineers in the country to deploy its technologies by 2013. It would be a sixfold increase. 

The IT hardware giant, which last year opened a new campus in Bangalore as part of a $1 billion Indian investment strategy, makes the lion's share of its profits from routers and switches, the hardware that forms the backbone of the internet and of corporate computer systems. 

Cisco predicts that increased use of the web, especially for video applications, will require a multi-billion-dollar scheme of upgrades to the world's current online infrastructure - plus a vastly expanded pool of trained labour to install them. 

A series of new ventures designed to dramatically boost the number of Indians certified to roll-out Cisco products will include a new fleet of mobile training and testing centres that will patrol India's rural outreaches. The company also plans to increase its direct workforce in the county more than threefold, to 10,000, by 2010. 

The investments look to be a vote of confidence in the Indian IT sector at a time of mounting uncertainty. 

India's IT cost advantages, in particular, have come under scrutiny in the wake of the rupee's sharp appreciation. The currency has gained about 12 per cent against the dollar in the past year, piling pressure on the margins of India's outsourcing companies. 

In the past week, two of India's largest IT employers have let hundreds of underperforming staff go in the latest sign that sentiment has softened. Tata Consultancy Services, which had already cut its bonus pay rates for the first time this month, axed about 500 workers while IBM is thought to have culled about 700. 

Against this background, Cisco's plans to train a new generation of Indian engineers yesterday drew fire from their prospective Western peers, who suggested the drive to train Indian graduates would ultimately lead to a flood of labour into developed economies. 

One person wrote on a comments board on an online industry publication. "360,000 Indian Network specialists soon to deluge the US market." 

"I can see the lobbying  'America isn't producing enough network specialists, so we need these folks to keep the economy going'." 

To match its training targets, Cisco said it would add 150 new exam centres across India in conjunction with Pearson VUE, the testing group. 

Cisco also recuited two of India's largest technology training organisations  the National Institute of Information Technology(NIIT) and Indian Institute of Hardware Technology (IIHT)  as accredited partners, to help feed the demand for engineers. 

According to IDC, the researchers, India's economic growth will fuel demand for 130,000 extra network engineers in the next three years.


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## Bushroda

*India set to get its first wafer chip plant; Breakthrough will boost New Delhi's bid to be a manufacturing destination*
Ravi Velloor, India Bureau Chief
The Straits Times (Singapore) 
February 6, 2008 Wednesday

NEW DELHI - INDIA is poised to announce a breakthrough in its attempt to woo wafer chip manufacturers, with a multibillion-dollar facility likely to be built in the western part of the country.

The plant is expected to give a boost to India's efforts to position itself as a manufacturing destination, and help Indian officials convince the world that it is closing the gap with China in industry competitiveness.

According to those familiar with the plans, the first of the mega-projects, which complement India's fast-expanding services economy, has already drawn interest.

One of the country's biggest industrial groups is set to announce a $6US billion ($8S.5 billion) assembly, test and manufacturing plant. Two more investment proposals for plants, running into billions of dollars, are also being prepared.

The latest breakthrough is the result of efforts by India to woo wafer fabrication plants to the country. 

Taking a leaf from Singapore's book, India started last year on this concerted attempt, seeing it as a strategic necessity to serve a domestic electronics market that is projected to hit sales of $363US billion by 2015.

Semiconductors, which are an integral part of most electronic products, account for 10 per cent of those sales.

However, while India had drawn investment proposals for everything from flat-panel displays to solar cells, it had difficulty attracting leaders of the wafer chip industry, such as Taiwan Semiconductor Manufacturing, Intel and Texas Instruments.

Even though many of these companies designed chips in Indian laboratories - Texas Instruments, for instance, filed some 225 patents from India over the past decade - manufacturing seemed a no-go.

'We asked Intel to put up a half-billion-dollar plant here and they demanded a 25 per cent subsidy, and finally decided to locate the plant in Vietnam,' a senior official told The Straits Times.

The new electronics policy, details of which were unveiled last September, offered investors incentives such as tax breaks, interest-free loans and subsidies that could amount to as much as a quarter of the project cost of a semiconductor plant.

This has succeeded in drawing investor interest, said the official, adding: 'The Taiwanese also are beginning to show interest in an Indian plant after initial reluctance.'

The progress is a boon to India, which is increasingly looking to build its own strengths in fields increasingly dominated by China.

Officials claim, for instance, that the cost of manufacturing cellphones in India is 8 per cent to 10 per cent cheaper than elsewhere.

'The government's electronics ecosystem policy seems to be one policy that looks set to be a tremendous success,' said Ms Poornima Shenoy, president of the Indian Semiconductor Association.

'The semiconductor industry is not one that takes quick decisions, but the interest has nevertheless been tremendous. We are aware because the new groups poised to enter the market have been hiring aggressively from established companies and these experts don't come cheap,' she added.


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## Flintlock

^^Wow, finally, Fab industry is coming!! Thats the best news I've heard in a long time!


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## Bushroda

*Take heart, jobs are coming to India!*
MSN India

Bangalore: When Tata Consultance Services (TCS) tells 500 people to leave and when there is talk of a squeeze in salary in the IT industry, you know it is time to worry about jobs. Or is it?

The US may be about to sneeze, and the IT industry in India may be paying a heavy price due to a rising rupee. But in such trying times, all you need to have is just the patience of Job. Because for every job lost, there are thousands of opportunities opening up  in IT majors Cisco and Capgemini, no less.

Cisco System India Pvt Ltd recently announced that it intends to up its networking workforce in India to 360,000 engineers in the next five years  a six-fold increase.

Also, to give a fillip to its training-development initiative, the company has made National Institute of Information Technology (NIIT) and Indian Institute of Hardware Technology (IIHT)  two of India's largest technology training organisations  Cisco Certified Learning Solutions Partners. 

IIHT and NIIT can now offer training materials and certifications authorised by Cisco to students and professionals in more than 200 locations in India.

Leo Scrivner, vice-president of human resources at Cisco Services, said, Globalisation will continue to transform India's economy and require its young workforce to develop skills that are market-driven.

"With these initiatives in place, we are able to ensure that our customers and partners have the resources available to train and equip thousands of motivated students in India with the knowledge and skills necessary to shape the country's burgeoning information economy," he added. 

French consulting giant Capgemini, for its part, plans to become a 40,000-strong team in India. It has also decided to use India as one of its global training bases. 

The company, which trains over 10,000 people globally every year, has tied up with the Indian School of Business in Hyderabad to start two courses in India. 

The company trains around 5,500 people in global courses and another 5,000 in local courses. India would become the consulting major's global training centre.

Steven Smith, Capgemini vice-president and director of the training arm, Capgemini University, said, We want to have at least 40 per cent people from across the world in the courses that are run in India, while the remaining people will be our Indian employees.

Now, that surely is good news. But what will come as a sweetener is the fact that MNCs adding more jobs in India is not confined to the IT sector alone. 

Novo Nordisk, the $18.5-billion global leader in diabetes care, is also planning to expand its Indian operations. According to media reports, the company, which employs over 600 people in India currently, is to triple its staff strength in four years in its drug discovery and manufacturing processes.

It is also firming up long-term partnerships with Indian firms in the key areas of drug discovery, financial management and sales, according to Melvin Oscar DSouza, managing director, Novo Nordisk India.

"India will become the biggest market for diabetes care. Being the leaders in insulin business within the country and internationally, we have a lot of India specific growth plans," he said.

Whats more, the parent company is also looking at outsourcing its data management requirements and financial services from Indian companies in near future.

It surely is raining jobs in India!


----------



## Neo

*India, Malaysia free-trade deal set for March 2009​*
KUALA LUMPUR: Malaysia and India have agreed to try to finalise a free-trade agreement by March 2009, Indian officials said Wednesday after the first round of talks.

The two-day negotiations in the Malaysian capital established a roadmap for the deal which is aimed at forging a long-term, comprehensive and dynamic economic partnership between the two countries, they said.

Both sides will endeavour to complete the negotiations by March 2009, the Indian High Commission (embassy) said in a statement.

Malaysia has said that a bilateral pact, which will cover trade in goods and services, investment and economic cooperation, could boost its exports to India by 1.3 times, or $12 billion, by 2012.

In 2006, India was Malaysias ninth largest trading partner, ninth largest export destination and 17th largest import source.

The next round of talks will be held in New Delhi on April 10-12.

Daily Times - Leading News Resource of Pakistan


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## Bushroda

*India has used trade for rapid growth: WTO chief*
7 Feb, 2008, 1534 hrs IST, PTI

NEW DELHI: Citing India and other emerging economies as success stories in attracting investments and achieving rapid industrialisation through liberal policies, WTO chief Pascal Lamy has asked major economic powers to use the Doha Round to boost confidence of world business. 

"At a time when clouds are darkening over the world economy, the Doha Round is the one global initiative that may boost confidence of world businesses, workers and consumers," Lamy said in his lecture on Global Economic Governance. 

He said the open policies have considerably changed the face of emerging economies, which need capital for growth and development programmes. 

"China, India, Mexico, Korea, Thailand, Indonesia, Argentina, South Africa and Chile... have done extremely well in a range of manufacturing sectors. Trade is one important factor for their rapid industrialisation," Lamy said in the lecture posted on the WTO website. 

The Indian economy has grown by an average of 8.5 per cent for the past four years on the back of double digit growth in industrial production and a sharp rise in international trade, which is likely to touch 400 billion dollars this fiscal. 

He said the developing countries need capital which they can either attract as foreign investment, borrow or import through international trade. "The safest, cheapest and most sustainable way is to import it," the WTO chief said. 

Lamy said countries like India, China and Mexico have used the WTO as an anchor for their integration in the international division of labour.


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## Bushroda

*India Strong Despite Recession Threat*
*Economists are optimistic that India can weather a U.S. downturn, policy tightening in China, and slower growth in Japan* 

by Rosie Slater 
Businessweek

Despite an impending US recession, policy tightening in China, and downward revisions of Japanese growth, Goldman Sachs's economists are confident that India's economy will weather the storm, albeit lose momentum. 

Higher savings and investment, favourable demographics, rapid urbanisation and productivity gains all remain in place. The economy also has the advantage of weaker global linkages compared to other Asian countries: India's exports are approximately 17% of GDP compared to a non-Japan Asia average of over 40%, with domestic demand playing a more important role, says the report. 

Urgent infrastructure, construction and retail needs will continue to drive investment and growth. Meanwhile, financial conditions are still not excessively tight. "The booming stockmarket, which has increased more than 45% in 2007, and has increased five-fold since 2003, will continue to support demand through its beneficial impact on investment by lowering the cost of capital and increasing capital through wealth effects," says the report. 

However, Goldman Sachs has revised GDP growth forecasts to 7.8% from 8% for 2009 due to a decrease in external demand, and expects export growth to halve to 9.8% as a result of rupee appreciation and a global slowdown. Software, textiles and apparel, gems and jewellery, which are key export sectors, are likely to be the most affected. 

As growth slows and global rates decline, Goldman Sachs predicts the Reserve Bank of India to ease monetary policy in 2009 and 2010. The reserve bank has said that inflationary pressures from capital inflows are its top priority, a stance which Goldman Sachs believes will continue until the end of the 2008 financial year. However, the reserve bank will likely begin to lower rates in mid-2009, when core inflation remains under control and the economy moderates, with a possible 25bp cut and a further 50bp cut in 2010. 

Goldman Sachs also expects the rupee to continue to appreciate against the US dollar, with its forecast as much a function of the rupee's strength as of additional dollar weakness. "We believe India's structural growth story, positive interest rate differential and large financing needs, especially for infrastructure, will continue to suck in capital in excess of its current account deficit."


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## Neo

*ArcelorMittal to invest $20bn in India ​* 
Friday, February 08, 2008

NEW DELHI: ArcelorMittal, the worlds top steelmaker, will invest $20 billion over the next 10 years to build two steel plants in India and is in talks for iron ore mines, a senior official said on Thursday.

The plants will each have a capacity to produce 12 million tonnes of steel, and will be located in the eastern states of Jharkhand and Orissa. We have identified the sites and are in the process of acquiring the land, Sudhir Maheshwari, executive director for finance, told reporters on the sidelines of a conference.

He said the company was negotiating with local governments for mining rights as each of the plants, work on which would start by end-2008, would require 600 million tonnes of iron ore annually.

The biggest problem is iron ore sourcing for these projects. I cant say (the talks) are fairly advanced, he said. India has iron ore reserves of 25 billion tonnes, and has a target to produce 200 million tonnes of steel by 2020.

Maheshwari said India had allotted some coal blocks for then plants, and expected to get more blocks in the coming months. He declined to give the number of blocks or their reserves. He also said a joint venture between Mittal Investments Sarl and Indias state-run Oil and Natural Gas Corp was looking for opportunities in exploration and production of oil in Iraq.

Yes, we are interested, he said, but declined to say whether ONGC Mittal Energy Ltd would seek to register with the Iraqi government. ArcelorMittal on Thursday agreed to form an equal joint venture with Germanys Auerhammer Metallwerk and Indias Shivalik Bimetal Controls Ltd to build a 10,000 tonne metal plant in India to make products used in automobile parts, heat exchangers and bearings.

The three partners will together initially invest Rs500 million ($12.7 million) in the venture that will be located in a special economic zone in the central Indian city of Indore, Shivalik Chairman S S Sandhu said. The factory is expected to start operations by April 2009, and the output will mainly feed exports markets, officials said. 

ArcelorMittal to invest $20bn in India


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## Bushroda

*Indian Government Targets 4% Growth For Farm Sector*
RTT News, NY

2/8/2008 5:30:43 AM The Indian government will take all measures to strengthen the farm sector, and expects the sector to grow 4% for next 10-20 years, the Finance Minister P. Chidambaram said Friday.

"Everything can wait except agriculture," he said. The Minister said the government was ready to set up a technology fund for the farm sector.

Referring to the Central Statistics Office's advance estimates, he said the government is confident that agricultural growth would be higher than the advance estimates. 

The statistics office said Thursday, that farm output would grow 2.6% this year, compared to 3.8% growth last year. Meanwhile, the Centre for Monitoring Indian Economy or CMIE projected the farm sector to grow 3.9%, while the National Council of Applied Economic Research or NCAER forecast 3.8% growth and CRISIL 3.4%.


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## Bushroda

*Manufacturing: The Next Trump Card for India* 
By Anil Bhasin
CXOToday 
Mumbai, Feb 8, 2008 

Manufacturing is slowly but surely sweeping back in the national economic space. India is witnessing a wave of growth in manufacturing after its decline in the late nineties. With this new manufacturing opportunity slated to be more skills intensive, the industry leaders foresee India as well poised to take advantage of this shift. 

Over and above, the feel good factor of being given a second chance, there are graver reasons that necessitate the country's success in manufacturing this time round. Manufacturing has linkages with the all other sectors of the economy. The progress of manufacturing still sets the tone for the overall business cycle and the health of this sector is very much at the core of India's socio-economic fabric. 

Inspite of the boom in the services sector, 75% of India's working population is educated only to middle school or below. This staggering figure of approximately 600 million people is not even equipped to benefit from the opportunities in the flourishing knowledge sector. It's only the labor-intensive manufacturing sector that has the capability to generate employment in adequate numbers to absorb the larger labor pool. 


Manufacturing has large stakes involved, not just because the sector employs 30% of the non-agricultural workforce in India, but also because of its contribution to the overall economy/GDP. According to FICCI, even though agriculture supports 60% of the working population, it contributes only 22% of the country's gross domestic product. 

This mismatch between distribution of workforce and value added in agriculture is one of the main reasons for the large number of poor, and this trend is expected to further widen in the coming decades. Against this background, only a sharp increase in the Indian manufacturing sector workforce will increase overall income levels of the country. 

The economic benefits of playing the manufacturing card are quite clear -- if India is to sustain overall GDP growth of 8% per annum, it's essential that both manufacturing and services grow at more than 11% even when agriculture growth picks up from its current 2.3%. 

So let's take stock of India's manufacturing sector as it's poised today. The country is increasingly getting recognized for high value goods requiring a fair amount of engineering precision and quality. No wonder then that the export opportunity of industries such as auto components (USD 25 billion by 2015), and textile (USD 50 billion by 2010) is mind boggling to say the least. 

However, to get a realistic picture of the achievements of the manufacturing sector, one only has to compare its performance to that of India's sunrise industry -- software services. The Indian IT services industry which is only about 2 decades old has already notched up exports in excess of USD15 billion. This is in comparison to the age old industries of textile and auto components which are today at USD 13.4 billion and USD 1.4, respectively. 

*Challenges Facing the Manufacturing Industry* 

What then needs to be explored are the reasons for the manufacturing industry's chequered performance. In a scenario wherein skilled Indian labor is as inexpensive as China's in absolute terms, wherein lies the Indian manufacturing industry's Achilles heel? 

FICCI estimates that the higher input costs for the Indian manufacturing sector as a result of cascading effect of indirect taxes on selling prices of commodities, higher cost of utilities like power, railway transport, water, higher cost of finance, and high transactions costs puts the sector at a severe disadvantage as compared to its Asian counterparts. 

In a 10-point agenda that encompasses factors such as entry of more private sector investors in important infrastructure sectors like electricity distribution, aviation, roads, railways, ports, and a new bill for improving India's labor laws including encouraging contract labor, FICCI has laid down guidelines to the government to accelerate growth and improve competitiveness of Indian manufacturing. 

However, over and above more conducive government regulation, what the Indian manufacturing sector needs is a productivity boost. CEOs of some of India's leading export firms on visits to China have come away impressed at the efficiency per employee and the dawning realization that current productivity of their factories is half to one third levels of what might otherwise be achievable. 

*IT to Increase Productivity on the Shop Floor* 

Today when most exporters are looking forward to unshackled growth, their first step has been to completely overhaul existing machinery, putting in place imported machines that offer productivity levels that are 6 or 7 times higher than those of Indian machines. This however is but a small step in the larger scheme of things. 

In today's business environment, manufacturers must increase productivity through the entire supply chain -- this necessitates that real-time data from the plant floor be made available to their ERP, SCM, and Manufacturing Execution Systems (MES) systems. However, due to disparate networks, that data is often hidden. 

Manufacturers till now have built various control networks that are often separate from their business networks. These legacy control networks use proprietary interfaces that can prohibit the control and business networks from communicating, creating silos of information. 

Enter the need for an Intelligent Networked Manufacturing (INM) vision. What this entails is an Ethernet to the Factory (EttF) solution that allows for the integration of plant floor data with business systems, providing employees with access to the information as and when they need it. While this improves business efficiencies and decision-making abilities on one hand, more importantly it enables manufacturers to obtain visibility to the factory floor without disrupting the production line. 

EttF empowers manufacturers to add new services to the existing control network at any time and at any location in the network, while maintaining the existing control scheme. Manufacturers can add wireless applications and improve plant personnel mobility. They can add IP-based phones, which eliminate the need to add separate Time-Division Multiplexing (TDM) phone lines. They can add security and intrusion detection to existing network services, all without interrupting critical manufacturing processes. 

The end result is the provision of repeatable, deterministic data from real-time devices, helping to ensure the continued efficient operation of the manufacturing plant and the emergence of each and every employee into a strategic business asset. 

*IT to Manage the Supply Chain* 

The role of IT to manage the manufacturer's supply chain has been long documented; however in the past, companies measured the success of their supply chains -- product development, production and supply, and sales and service -- by whether they produced a good product at a good price. 

An effective, profitable supply chain today is driven by customer demand. According to AMR Research, in the next-generation supply chain, end-user demand will drive all supply chain activities among trading partners. This is virtually impossible with the traditional supply chain, where people and processes are often isolated not just from the customer but also from each other. 

The new supply chains will need to respond quickly to demand and command a better price without having to discount excess inventory, meet evolving and more rigorous external and internal compliance mandates, such as Radio Frequency Identification (RFID) and Enterprise Resource Planning (ERP) extensions -- not to mention outsource functions without losing control, visibility, speed, quality, or other requirements. 

The need of the hour is a Demand Driven Supply Chain (DDSC) solution that enables visibility into the entire supply chain, allowing manufacturers to make informed decisions based on the most up to date information and flexibility to make decisions based on current inventory levels. 

Additionally, a DDSC solution contrary to traditional supply chain constraints can re-route goods in transit, manage network security across many different connected locations -- both internal and external -- and also allow for collaboration with the factory floor, suppliers, distribution centers, and even customers. 

The result is improved decision making by feeding real-time data about customer demand into a partner's production and distribution process, improved sales and order forecasting, manufacturing and distribution planning, and matching customer demand to available supply. It also allows for easy adaptability to changing market conditions, including changes in the supply of raw materials and improving the movement of goods to deliver the right amount of inventory to the right place at the right time. This helps to keep costs down and ensure prompt and accurate order fulfillment. 

*IT to Better Manage New Product Introductions* 

Faced with increasingly demanding customers and intensifying global competition, manufacturers must find ways to achieve greater efficiency and speed in the product development process. It follows that today shorter product lifecycles are putting more pressure on development organizations to bring products to market more quickly. Lack of access to the same information set can result in costly engineering change orders, unanticipated problems with regulatory compliance, and higher support costs after product introduction. 

Companies lack the flexibility to expand their labor pools or reduce development costs with contractors and off-shore development teams because of concern about loss of control and safeguarding intellectual property. 

Collaborative Product Development (CPD) solution that focuses on establishing a collaborative environment during the product development phase of new product introductions is what's required. The CPD solution enables all stakeholders, including key suppliers, logistics providers, production control, and engineers, to collaborate with each other with one common set of information. This results into reduced costs, greater flexibility in choosing development resources, rapid time to market, and faster safety and environmental compliance. As a result, manufacturers gain greater agility so they can be more responsive to changing customer demands and can stay ahead of the competition. 

*IT to Build and Manage Customer Intimacy* 

Manufacturers today are focusing on customer intimacy as the way to stay lean and profitable by delivering what customers want, when they want it, with the high-quality, personalized service and support they expect. The prevailing wisdom that manufacturers could become leaner, more profitable organizations by reducing production and transaction costs is now pass. 

A major barrier to achieving customer intimacy is the limited ability of sales, service, and support to exchange information for better understanding and anticipation of customer requirements. Without a foundation for optimizing interactions across these crucial customer-facing functions, manufacturers faced challenges such as customer retention, inability to anticipate customer needs leading to waste in production, impairing profitability and competitiveness, lack of a unified view of the customer, and concerns over control and security that makes it more difficult to outsource non-strategic support functions to reduce costs. 

There is a need for a Customer Interaction Network (CIN) solution that helps enhance interactions across all customer touch points, including sales, service, outsourcing vendors, and channel partners, to work together more effectively and efficiently to achieve greater customer intimacy. By anticipating and responding to customer needs, companies not only improve customer loyalty, but also optimize the entire production process to deliver what sells. 

The CIN solution helps enable manufacturers to improve their customer interaction process, specifically anticipating and responding to customer needs, maintaining higher customer satisfaction scores, reduced time to problem resolution, lower cost of acquiring and servicing customers, and tighter channel partner integration. 

In conclusion, to compete and succeed in a price-driven market, manufacturers must create a business edge by offering something that their competitors don't. Shorter lead times, faster turnaround times, and better service are key "customer-centric" competitive advantages that can make the difference in attracting new business and retaining existing business. 

*The author is the vice president (Enterprise) of Cisco India & SAARC*


----------



## Bushroda

*Force India team launch 2008 car with confidence*
By Sanjay Rajan/Sonia Oxley
Guardian, UK

MUMBAI, India, Feb 7 (Reuters) - Force India launched their 2008 Formula One car on Thursday and co-owner Vijay Mallya was confident it would mark the start of better performances.

The Ferrari-powered VJM01, unveiled in front of a large crowd against the backdrop of the Gateway of India, is the same basic chassis as used by the team's predecessor Spyker last year but there are changes to the aerodynamic package.

Force India, who raced as Spyker last season before being bought and renamed by a group headed by Indian billionaire Mallya, have already confirmed Italian Giancarlo Fisichella and German Adrian Sutil as their drivers.

Spyker scored just one point and finished 10th overall in the 11-team championship after McLaren were stripped of all their points for a spying controversy.

Force India, in their new livery of gold, tungsten and white, are looking to improve their performance.

"We -- myself and the Mol family (co-owner) -- have given the team financial resources, technical resources and human resources as well. We can confidently state that Force India will move up steadily in progress," Mallya said.

The budget for the season has been set at $120 million, an increase of $50 million from last year.

The drivers were present but there was no demonstration lap. The new car's first test run is scheduled for Spain's Barcelona circuit on Feb. 25. The season starts in Australia on March 16.

Cricket-crazy India, with 1.1 billion people and the fastest growing major economy after China, is seen as a potential market for other sports.

When Narain Karthikeyan became India's first Formula One driver in 2005 when he raced for the now defunct Jordan team, interest in motor racing picked up in the country.

India will host its first Formula One grand prix in 2010.

"This is the new platform for the face of new India -- Indian-inspired team on the Formula One grid," Mallya said.


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## Contrarian

Heyy happy feet,
post some negative posts as well.the ups n downs as well m8...


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## Bushroda

OK Malay, This ones for you on your special request
___________________________________________________________
*Millions living in darkness as Indian economy booms*

UJJAINI, India (AFP)  Just an hour's drive from the bright lights of India's financial and film capital of Mumbai, Vimal Madhkar, 28, spends her evenings in the dark coaxing fire from twigs so she can cook dinner.

Madhkar is one of an estimated 400 million Indians who live in a world outside electricity and on this night -- as every night -- it is painstakingly gathered kindling that provides her family with light and cooking fuel.

Her children sit with her around the fire as she roasts seeds outside her hut in a village 40 kilometres (25 miles) from Mumbai.

"I'm used to cooking in the open," Madhkar said on a chilly winter evening. "I get some light from the skies above and some from the fire below."

As India has grown, power generation has badly lagged with the gap between electricity supply and demand nationwide averaging up to 14 percent at peak times. And that's in spite of the fact not everybody gets power.

Large swathes of rural India are plunged into darkness at night with only the stars for light.

Ujjaini -- population 4,000 -- is no exception. Although a few of the residents might be able to afford diesel-fueled generators, most here, and in a nearby cluster of nearby villages, get by with kerosene, candles and kindling.

"Beyond my village there are 13 hamlets and three villages that never get electricity," says Rajendra Khokhde, an activist from Ujjaini who works with a nonprofit group called Vidhayak Sansad or Organisation for Progress.

"Children are born in homes that never have had electricity."

Although Indian parents often recount to their children tales of leaders who succeeded despite having to study by candlelight, the children here say it's a tough example to follow.

"I can't study at night because there's no light," said third-grader Balu Hanumant Ghatal. 

With their children making poor progress in school, villagers say it makes more sense to put them to work.

As they grow up, many will end up as hired farm labourers earning pittances. And thus the cycle of poverty continues.

"Our situation forces us to remove our children from school," said Yogita Padga, 18, a fourth-grade dropout who married a few years ago and now works around the house and in the fields.

"Our children are kept from progress and development," she said.

Indeed, most residents of Ujjaini have never switched on a light or used a fan in the sweltering summers.

Mumbai's Bollywood tinseltown may be nearby but those who live here don't often get to watch the films that have made the city world famous -- or much else.

"I've never watched a cricket match on television," said eight-year-old Neelam Ghatal, as she recounted a recent visit to a a doctor in a town not far away.

"I was thrilled to see a lightbulb at a shop. I also felt the wind under the fan at the clinic for the first time. Our school has no light or fan."

A few have cellphones but must trek to nearby towns to recharge them. 

And it is on these trip that they glimpse a more prosperous world, the economic miracle that the headlines say in taking place across India but which is passing places like Ujjaini by.

Maharashtra state, where Ujjaini is located, wants to quickly implement four new power projects, which would generate an extra 2,000 megawatts of power -- about half the current shortfall.

But that will not help Ujjaini, whose pleas to get connected to the national grid have been held up while officials evaluate whether the village falls in a forest reserve area.

Meanwhile, one enterprising person has brought a taste of electricity to the village.

"Last year I bought a generator," said 42-year-old schoolteacher Nana Bhoye. "I use it at night for light and to watch TV if there are cricket matches on."

Bhoye wouldn't reveal how much the generator cost but said villagers are helping him recoup his investment by paying to watch the odd cricket match.

"I don't always charge the villagers the 10 rupees," said Bhoye sheepishly. "But they give it to me."


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## Bushroda

*Forget the storm clouds - investors look set to enjoy an Indian summer*
*In the face of stockmarket turmoil, why has one of Britain's top companies just launched an India fund? Patrick Collinson reports*

Patrick Collinson
The Guardian, UK
Saturday February 9 2008






*Despite recent turmoil, UK firms are looking towards India. Photograph: EPA*

When turmoil engulfed stockmarkets in London and Wall Street in January, it turned to panic outside Jeejebhoy Towers, India's stock exchange. The Mumbai market fell faster than at any time in its history, dropping 10% in a matter of hours and prompting fury among thousands of small investors who bought shares in recent months.

Yet Jupiter Asset Management, one of Britain's most respected investment companies, chose this week to launch its first India fund aimed at small investors. For a lump sum of as little as £500, or a regular saving of £50 a month, it will buy a basket of Indian shares which it reckons will achieve long-term growth. 

Some will regard the timing as curious. The Indian stockmarket is up 200% over the past three years with, at times, frenzied buying leading to eye-watering valuations for some of the fizziest stocks.

A correction was virtually inevitable after a 70% run-up in the index during 2007, say the pessimists. They believe the market will continue to suffer over the coming months as the US economy weakens and demand for Indian goods and services drops.

The optimists say yes, a correction was indeed inevitable, but will only be temporary. The Indian economy grew by 9% in 2006-2007, and similar rates are forecast for the next two years.

India's teeming population of 1.13bn represents a vast new market for consumer goods (there are 7 million new mobile phone subscribers every month) as a free-spending middle-class emerges. Even the country's famously creaking infrastructure is to be overhauled, with the government committed to spending £235bn between now and 2012.

Jupiter's Avinash Vazirani is very much the optimist. India, he says, remains an "excellent long-term investment opportunity," and the recent sell-off has resulted in "real bargains among quality companies". 

He adds: "India is already the fourth largest economy in the world in terms of purchasing power parity, and is projected to be around 60% of the size of the US economy by 2025." 

Jupiter's entry comes three years after the trailblazing launch of an India fund by Fidelity, Britain's biggest investment management company.

Fidelity India Focus is up 180% over the past three years and its manager, Arun Mehra, thinks the boom is far from over. He talks of a "polarised" stockmarket that developed in 2007, with a few sectors (particularly property) driven to unsustainably high levels, while others remained cheap.

Like many emerging-markets' fund managers, he believes investors should shun export-oriented stocks that are dependent on US and European consumer spending. Instead, he prefers domestic consumption stocks that reflect the spending patterns of the emerging Indian consumer. "As soon as disposable household incomes rise above £500 a year, there is a huge expansion in spending on things such as mobile phones, property, cars and eating out," says Mr Mehra.Among Fidelity's investments is Tata Motors, which stunned the world last month when it unveiled the new Nano model at the Delhi car show.

The car will sell for just £1,250, bringing motoring to the masses of India - and prompting horror among environmentalists at the potential climatic impact.


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## Bushroda

*Britons rush to India for the boom*
*More than 60 years after the Raj ended, a fresh wave of bold British settlers are heading east to booming, thriving India to make their fortunes and forge new lives there. We report on the great rupee rush*


*William Dalrymple and his family in their Delhi home*

Ashling OConnor 
The Times, UK
February 9, 2008

For centuries, Britons have been knocking on Indias door. The would-be nabobs of the East India Company, the ambitious younger sons seeking to make their own way in the Indian Army, Latin tutors for Rajput princes, not to mention the unmarried girls of the fishing fleet setting sail in search of husbands... The colonial relationship ended with independence in 1947, but then later generations of Brits headed out  and maybe dropped out  in search of spiritual enlightenment (or to party in Goa). These days, however, as the heart of the global economy travels ever East, Britons are much more likely to be pitching up for a job once again. 

India is fast becoming a magnet for Western professionals seeking a unique opportunity in an economy growing at more than 9 per cent a year  or three times the rate of the UKs. Forget about the outsourcing of British jobs to India. This is a wholesale migration of intellectual capital, with Indian companies recruiting Britons at undergraduate level and hiring managerial talent from around the world. There are thousands of Britons living and working full-time in India, and there are few crystal-gazing pilgrims to be found among them. The new generation of British immigrants is made up of investment bankers, venture capitalists, retailers, engineers, executives, pharmacists, actors and academics. 

Solid numbers are hard to come by, but one study estimates that the British population in India is more than 32,000. The British High Commission in Delhi confirms that, anecdotally at least, the facts on the ground back up the idea of a growing number of migrants, from the trebling of flights from Britain to India, to the growing waiting lists at international schools. Bangalore is a case in point: more and more schools are opening to cater for the growing number of British and American families based in the IT hub, which, even as far back as 2004, was characterised by the local press as being full of foreigners. 

Among those foreigners are the children of the Indian diaspora who have quit the lives their parents forged in Silicon Valley or Solihull to return to Mother India. Reverse migration aside, India is considered a good career move for many Brits with no family link to the sub-continent. As one Delhi-based specialist in relocation puts it: Expats find the country exciting and want to have a two to three-year India stint on their CV. 

For an ambitious young banker, the posting would be a plum one compared to dull old Singapore. For a private equity player, India is an invitation to get rich, with the Bombay Stock Exchange (Asias oldest) offering huge returns. The reason why foreigners come here now is either they have a skill that is not available in India, for example managing certain types of technology, or they are coming to put their own money in, says Roddy Sale, a former investment banker who has lived in Bombay for 15 years. 

India is also a nation of new and voracious consumers. Its middle class will balloon to 580 million by 2025, according to a recent study by management consultancy McKinsey. They will want shopping centres, gyms, doctors surgeries, cars, mobile phones and all the material trappings of affluence they know to exist in the West. Foreign suppliers are sending people over by the planeload to find out how they can satisfy this new demand. 

For the expatriate executive, who can get by perfectly well just speaking English, life in India is good, with most of the luxuries of the West available, and a few besides. I can afford to have people working for me, which I could not have in England, says Clemy Sheffield, an art consultant from Reading who lives in Delhi. It helps that I dont have to waste time ironing my clothes. Edward Oakley, 66, a carpet exporter who has lived in the eastern city of Mirzapur, near Varanasi, for 40 years, says: When my father came to India [during the Raj], he would tell me it was a playground for the European middle classes. I think it is very similar now. 

*Roddy Sale, 48, financier, Bombay*

Sale, a former Welsh Guardsman who served in the Falkands, arrived in India as an investment banker in the early Nineties, when the Indian market first opened up. He was involved in the first big flotation of an Indian company  a debut that was so successful he was instructed to stay to win more mandates. After raising more than $3 billion for Indian companies through foreign listings, he is now adviser to a number of investment projects, including a proposed ski resort in the Himalayas. 

I discovered it was possible to create a business model here. As the appetite for India has grown, the need for advice on the ground has only been increasing. There are many entrepreneurs in India  with tremendous opportunities  but they do not necessarily have the creativity or the access to capital. Thats what keeps me interested, he says. 

An Old Etonian with passions for art, antiquities and horse racing, India offers Sale a chance for an eclectic life in interesting company. He also has a personal connection with Bombay, where his grandfather was an official in the colonial administration. His fathers cousin, Sir George Able, was private secretary to Lord Wavell and Lord Mountbatten, the last Viceroy. I had an awareness of India, brought up with piles of black and white photos of hunting parties, but I had only been for a week. One reason I have stayed is the people, who are exceedingly welcoming. Englishmen have a huge amount in common with a great many Indians. When I first came here there were elements of life that were closer to the description of a hardship posting  the quality of hotels, restaurants  but over the past ten years that has changed remarkably. 

*Caroline Young, 45, fashion consultant, Delhi*

Youngs India experience started with the 1996 Cricket World Cup, for which she produced the opening ceremony. Having lived in Italy and France, she was used to being out of the UK and found India impossible to resist as a hotbed of creative energy. She gradually spent more time there, whether sourcing design talent for European clients, arranging a Bollywood-themed window for Selfridges or setting up fashion shoots on location in India. Whenever people wanted a creative Indian consultant, I would step in, she says. People heard I was doing projects in India, so it made more sense to stay here than go back and forth. I feel that  from a creative standpoint  its a lot more inspirational living here, nurturing new talent, than in the West. 

The demand for her services is growing, particularly since Vogue launched an Indian edition in September and Indian designers are beginning to attract international recognition. So Young, who attended school in Oxfordshire, does not see herself moving back to Europe any time soon. 

Since the moment I moved here, I have laughed and smiled every day. 

Losing ones temper doesnt work, because there is no logic to the way things are done. I read a lot more because I always bring a book to fill in time  no one is ever on time. You have to be like a piece of elastic. She says that she has learnt humility because the lot of a Westerner in India is one of automatic privilege. I was reluctant when people said you need a cook, but its a lovely privilege, so you can achieve a lot more. I have an amazing maid called Manisha who now makes a mean espresso, she says. 

Most of her friends are Indian because she has made a concerted effort to integrate into local life  working with Indian crews has helped. Paris is very beautiful, but I do not miss the Parisian attitude. I miss the chocolate, elderflower juice and certain beauty products, but I have so many friends coming who stop off at duty free. 

*William Dalrymple, 42, writer and historian, Delhi*

Dalrymple first visited India in 1984 on a year off and admits he had no interest in the country before arriving. I actually wanted to go on a dig in Iraq but Saddam Hussein closed the country, he says. India was like a lightning bolt. After a five-year stint between 1989 and 1994, he returned in 2004 and now he and his wife, Olivia, a painter, and their three young children divide their time between Delhi and London, spending about eight months in India and four in the UK, during the school holidays. He has written several books on India, most recently The Last Mughal: the Eclipse of a Dynasty, Delhi 1857, which is about the Indian rebellion. 

I have no plans to move back at all. My material is here, he says. It got more and more absurd writing about India from the Chiswick roundabout. 

We miss family and friends, but they visit. It used to be that you also missed treats such as chocolate, decent wine and salami. Now you can get chocolate and decent wine  and friends bring salami. There are very few things in terms of desire that you cannot satisfy here. Compared to the Nineties, not only are the pleasures available, but the phones work and the roads are OK. There are still power cuts, but we have a generator. 

Being an expatriate allows for a standard of living that Dalrymple, who was raised on the shores of the Firth of Forth, would struggle to achieve in the UK. The style in which we live is like being in an Edwardian country house. We have six gardeners, he says. Its not the cheaper living that were here for, though, but the fact that on a weekend you can find yourself in a gorgeous palace in Rajasthan when you could be in a cold cottage in Wiltshire. I love England and going back for a few months and indulging in culture like the theatre and exhibitions, but it is a more exciting life here. Although his children are happy in their schools, he says, the only reason to come back would be, If we decided the education here wasnt good enough and we ended up missing our kids if we sent them to boarding school. But we would still keep a place here. 

*Ben Merton, 28, turnaround specialist, Bangalore*

After working as a venture capitalist in San Francisco, Merton found his way to India nearly five years ago via South Korea, where he was helping to float a company that sold DVD players. He opened an Indian subsidiary in 2003 and has never looked back. I was originally going to come for two weeks, he says. Now I am here probably for the rest of my life. I cannot imagine myself living anywhere else, although eventually I would like to spend half the time here and the balance in the US. A physics graduate from Imperial College, London, where he grew up, Merton is putting roots down by buying a flat in Bangalore, Indias IT hub, where he rescues distressed companies in the high-tech and engineering sectors. In the next three to four years, he hopes to have raised a $100 million fund from channelling foreign capital into Indias nascent but booming manufacturing industry. 

For a 28-year-old to do what Im doing in England would be difficult, but India is teeming with young industrial entrepreneurs, he says. The main reason not to go back is economic. But I have also got a great group of friends here and a good life. Bangalore is home now. There are things he says he misses about Blighty, though. The outdoors  to be able to walk outside and not feel like youre going to get lung cancer, he said. And there are things about India, the worlds largest democracy, that are frustrating. For every positive like being able to have a cook, there is a negative such as the pollution or the bureaucracy and inefficiency. 

*Clemy Sheffield, 31, art consultant, Delhi*

Sheffield first came to Bombay ten years ago to accompany a boyfriend on a business trip. I woke up to the Gateway of India and the sea and simply could not get over the noise and the smell  which sounds clichéd. 

Id had the impression of India being a harsh, difficult, faraway country, where everything was about disease and famine. I could not believe the beautiful buildings and the lushness. I just loved it, she says. After missing a flight home from Delhi on one trip, she stayed with friends for a further week, during which she acquired a taste for life in India. I thought, I could do this, she says. I gave myself two months and just moved. That was September 2005. I told my parents that I would give it a go for three months, but that was just to placate them. 

Having worked for a private dealer in London, she originally had the idea to launch an art database, but the project proved too monumental to do properly, so she began doing printing jobs and taking people on tours to earn cash. Last year, she started an art consultancy business, sourcing for Western clients and developing relationships with emerging artists in India, Pakistan, Nepal, Bangladesh and Afghanistan. Her clients spend anywhere from £500 to £50,000 on a single piece, with international interest in Indian art growing fast. I have a business that is working and 
I could do well here. Im really enjoying it, she says. Never being in India would be like taking half my heart. I would hate to be in England all the time. I would miss the noise. When I went back recently, I found Hyde Park Corner totally silent. The only thing is family. They look after their parents here and that is to be learnt from. If anything, I am starting to feel I am a long way away from my parents. My mother has been here, but the thought of India would send my dad straight to the loo. 

*BRITS IN INDIA: The facts*

 Indian companies are keen to grab the talent first. The interest in India is being generated at the undergrad level, one analyst told the Indian Express. IT companies like Infosys operate a global intern programme and are actively recruiting at British and American universities. 

 Expats find the country exciting and want to have a three-year stint there on their CV, says an industry commentator, while the International Herald Tribune reports that Indian companies are scouting internationally for senior executives  at internationally competitive rates. 

 The IT hub of Bangalore has more than 12,000 registered expats, and a rapid growth in international schools. 

 The expat phenomenon is now expected to move beyond the Delhi-Bombay-Bangalore-Hyderabad axis to Calcutta. 

*HOW TO MOVE TO INDIA*

 According to India relocation/immigration specialist Ikan, Britons moving to work in India need an employment visa (E-type) from the Indian High Commission here. Tourist visas cant be converted into employment visas in India; applicants must have a copy of their work contract with an Indian employer. 

 Foreigners must register with local authorities within 14 days of arrival and obtain a residence permit (for which employers must commit to repatriating you and your family, should your conduct make you no longer welcome in India). 

 Visas are at the discretion of the Indian government and generally take about two weeks to get. Indian nationality can be applied for after 12 years in India. A different, easier set of rules apply to PIOs (Persons of Indian Origin).


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## Bushroda

*Upbeat Nath sure of meeting export targets this FY*
Financial Express, Economy Bureau
Saturday , February 09, 2008

*Bangalore, Feb 8* Indias exports are estimated to grow by 20% in the current financial year, ending March 31, in spite of a slowdown in the US Economy and a sharp rise in rupee against the greenback, minister of commerce and industry Kamal Nath said here on Friday. 

Nath said he was also hopeful of achieving the $160-billion export target for this fiscal. We are trying and we are hopeful of doing it ($160-billion export), he said and added that even if they missed the target, there would still be a substantial growth in exports. 

Despite all the challenges that we had during the current year, if we miss it a little bit, it doesnt matter. We will still have a 20% growth. Its still a substantial growth, he said on the sidelines of an open house meet with exporters here. 

*The country has achieved exports of $111 billion in the April-December period, while for the financial year 2006-07, Indias exports stood at $125 billion.* 

Nath also said the commerce ministry has initiated a study to find out the feasibility of setting up a Chennai-Bangalore-Mumbai industrial corridor. The government has already embarked on $90-billion Delhi-Mumbai industrial corridor project. The corridors are aimed to propel industrial development in the states and increase investment and employment opportunities. 

Later at a separate function, India Sourcing Summit, Nath tried to evade questions on opening up the retail sector and allow more foreign direct investment (FDI) into the sector. Retail in India is very complex. About 2.5-3% of retail is in organised sector. It is not a question of FDI. We have to ensure that FDI in retail does not dislocate our small retailers, he added.


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## Bushroda

*Destination India: Foreign tourist arrivals up 13%*
10 Feb, 2008, 0000 hrs IST,Raja Awasthi, TNN

NEW DELHI: It seems that 2008 has started with a bang for the tourism industry. Just look at the figures: In the first month of the year, the tourism arrivals have seen a jump of 13%, at 6 lakh, against 5.32 lakh in the corresponding period in 2007. 

According to the ministry of tourism (MoT), foreign exchange earnings from this sector also showed a growth of 40%, at $1,433 million, as against $1,081 million registered in the same period in 2007. 

The tourism sector is one of the fastest growing sectors in the country. It offers immense opportunities to entrepreneurs in various segments. What was detrimental to our tourism growth is the lack of basic facilities at our monuments, pilgrimage places and tourist sites. We need to have a higher involvement in improving the basic facilities by adopting such centres for improvement of facilities as the government cannot do this job alone. The Asian region is as important for us as any other region and we are going to aggressively market here, said Leena Nandan, joint secretary, ministry of tourism. 

The industrys growth can be gauged from the fact that the forex earnings from tourism have shown a phenomenal growth of 57% in one year, from $5.73 billion in 2005 to $9 billion in 2006. 

Though foreign tourist arrivals have recorded a double-digit growth, domestic travel is the backbone of Indian tourism industry, with 460 million Indians travelling last year. The sector has seen a phenomenal growth between 2002 and 2007 and there has been an increase in traffic to the tune of 75% with employment generation up by more than 43%. 

The tourism sector has shown a much faster growth as compared to other sectors. Now there is a need to push the tourism sector and 2010 Commonwealth Games should bring in the required infrastructure to the country, said Bharat Sidheshwar Rai, ED, Swift Travel.


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## Bushroda

*Flawed job scheme*
SWAPAN DASGUPTA
10 Feb 2008, 0000 hrs IST

When the Communist states of Eastern Europe collapsed in the early-1990s, there were anxious debates in Marxist circles over what had gone wrong. The common sense explanation was pretty simple: the dictatorship of the party was tyrannical, opaque, excessively bureaucratic and plain inefficient. The system violated human nature. For those who felt history was on their side, the collapse lent itself to a curious explanation. The socialist bloc, they argued, had crumbled because it had deviated from the true path. 

Dogmatists and ideologues hate admitting they were ever wrong. Disaster is never attributed to a bad idea but to human foibles. The remedy is never to abandon flawed beliefs but to cling to it more tenaciously. 

As Budget Day approaches, the dogmatists have mounted a campaign to elevate a failed idea into a national catastrophe. There is pressure on the government to widen the scope of the National Rural Employment Guarantee Act, now operational in 330 districts, nationally. Last year, the NREG Programme devoured Rs 12,000 crore of taxpayers' money; this year, its drum-beaters want double that amount. 

There is nothing wrong per se in the idea that all citizens should be able to get a guaranteed 100 days of paid work. It has more self-respect than queuing up for a dole. A spurt in rural employment can contribute to greater liquidity and increased consumption which, in turn, is good for the economy. 

The problem arises in how work is defined. By getting people to dig a great big pit one day and filling it up the next, a lot of man hours will be generated. The job cards will be dutifully ticked. However, manual work that does not have a productive outcome - in this case, creating assets - is a national drain. It's also a crime when you consider the opportunity costs. 

The NREGA deems that 60% of any approved project must comprise labour costs. The other 40% can include material and skilled labour. It's an absurd stipulation that virtually rules out the meaningful use of bricks and mortar. It has meant that a huge amount of manpower has been expended in the creation of non-tangible assets such as kuccha roads which will be washed away during the rains. True, the first year has also witnessed the cleaning of many village ponds and the creation of other water bodies. But you can't keep doing this year after year. 

Secondly, as those with a stake in India would have predicted, an incompetent state machinery, riddled with corruption, is incapable of implementing a programme of this magnitude with sincerity. A draft report by the Comptroller and Auditor General reveals that only 3.2% of the registered households could avail of 100 days 'guaranteed' work. The average employment under NREGP was just 18 days. Rahul Gandhi says that only five per cent of the money reaches the beneficiaries. Yet, the Centre persists with the fiction that nearly all the 2.73 crore households seeking work have got it. 

A report on the NREGA website says that in the six chosen districts of Karnataka only 13 households were provided 50 mandays employment in seven months. This 'achievement' cost Rs 1.47 crore in wages, Rs 1.65 crore on material and Rs 2.84 crore on 'contingencies'! 

To correct the follies, the fanatics want a dedicated babudom to run NREGP - a remedy worse than the ailment. 

A normal world is impatient with dogmatic adventurism. In the Indian Wonderland where nothing succeeds like failure, ideological loonies have acquired the right to blow up public money. They were clever: they just gifted the copyright of a bad idea to Sonia Gandhi.


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## Contrarian

Mate, its not that i enjoy reading negative posts about India's economy, its just that when some one browses this thread, he should have a genuine idea(including ourselvse), of the ups and downs of the Indian economy. It shouldnt appear as though Indian economy is the ONLY place to be! All shouldnt appear ideal. It should be realistic.


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## Bushroda

*2 top managers see top returns from India*
By Christopher Condon
Seattle Times, United States 

Federated Kaufmann Fund's Lawrence Auriana and Hans Utsch, whose bets on the fastest-growing U.S. companies made them top-ranked managers over the past two decades, say India is the future.

They have 15 percent of the $11.5 billion mutual fund invested in Indian companies, including mortgage lender Housing Development Finance and wireless operator Bharti Airtel. That compares with a 1 percent allocation in Asia's emerging markets for the fund's competitors, according to data compiled by Chicago-based research firm Morningstar.

"We're always looking for growth, and the growth right now is going on in India and China," Auriana said in an interview in his New York office. "The valuations aren't as extreme in India as they are in China."

Kaufmann Fund rose 21 percent in 2007, better than 87 percent of its peers that concentrate assets in midsize companies with above-average sales or earnings growth, according to data compiled by Bloomberg. The fund has gained at annual rate of 15 percent since 1987, their first full year, ranking it No. 1 of 34 rival funds, according to Denver-based research firm Lipper.

Among the fund's bets in India in 2007 were Mumbai-based Housing Development Finance, the country's second-biggest mortgage lender, and New Delhi-based Bharti Airtel, its largest wireless-network company.

Housing Development, partly owned by Citigroup, advanced 77 percent last year on demand for loans in an economy that's grown at an average pace of 8.6 percent over four years. The company was Kaufmann Fund's No. 3 holding as of Dec. 31.

Bharti Airtel, the fund's fifth-biggest position, gained 58 percent in 2007. The company, controlled by billionaire Sunil Mittal, agreed in December to sell a $1 billion stake in a unit to investors, including Citigroup and Goldman Sachs Group.

The same month, Standard & Poor's raised Bharti Airtel's debt rating to investment grade for the first time after the company reported a total of 48.9 million users as of Sept. 30.

Rising wages in India have increased wealth, fueling booms in real estate, banking services and consumption. The Bombay Stock Exchange Sensitive Index rose 49 percent, including reinvested dividends, in 2007. The U.S. benchmark Standard & Poor's 500 Index returned 5.5 percent in the same period.

Morningstar gives the Kaufmann Fund four of a possible five stars. Its one-year Sharpe ratio is 0.72, compared with 0.11 for the peer group, according to Bloomberg data. A higher Sharpe ratio means better risk-adjusted returns.

Morningstar recommends against investing in the fund because its 1.95 percent expense ratio is higher than 90 percent of similar funds and Utsch invests only $10,000 of his own money in the fund. Utsch declined to comment.

Auriana, in response, said the fund rose an average of 20 percent over five years. The S&P 500 climbed 11 percent.

"You can't argue with the results," Auriana said. "Success is our revenge" on Morningstar.

The Kaufmann Fund seeks growth companies that are "leaders in their area of expertise," Auriana said. Turnover is 49 percent, meaning the fund's holdings change once every two years, compared with 118 percent for the average mid-cap growth fund, according to Morningstar.

The biggest gainers for the fund in 2007 included Phoenix-based solar-module maker First Solar, which rose almost ninefold, and silicon-wafer producer MEMC Electronic Materials of St. Peters, Mo., which more than doubled.


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## Bushroda

*Indian Computer-Services Exports May Increase 28%*
By Harichandan Arakali

Feb. 11 (Bloomberg) -- India's computer-services exports may gain 28 percent this fiscal year as companies including International Business Machines Corp. manage networks and call centers for clients such as Citigroup Inc. from the nation. 

Exports will rise to $40.8 billion for the year ending March 31, the National Association of Software and Service Companies said in an e-mailed statement today. The home market will likely generate $23.2 billion in revenue, boosting total growth by 33 percent to $64 billion, the industry's lobbying group forecast. 

The South Asian nation may exceed its target of $60 billion in computer services exports for the 12 months ending March 2010, Nasscom President Som Mittal said. Tata Consultancy Services Ltd. and Infosys Technologies Ltd., India's largest providers of software services, compete with IBM to write software and maintain networks from India for overseas clients. 

The industry accounts for 5.5 percent of India's gross domestic product for the current year, up from 1.2 percent for fiscal 1998, Nasscom said. 

Tata Consultancy, based in Mumbai, gained 1 percent on the Bombay Stock Exchange today at 1:15 p.m. Bangalore-based Infosys climbed 1.5 percent. 

U.S. information-technology buyers, concerned that the economy is slumping, may spend less than projected this year, reducing worldwide demand for computers, software and services, Forrester Research Inc. said today in a report. U.S. spending will climb 2.8 percent to $552 billion, missing an earlier forecast for 4.6 percent growth, the researcher said today. 

Global spending will rise 6 percent to $1.7 trillion, instead of the 9 percent originally predicted, Cambridge, Massachusetts-Forrester said.


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## Bushroda

*Rethinking the India Back Office*
*Some Western Firms Weigh Selling 
Their Units as Costs Rise, Dollar Weakens*

By JACKIE RANGE
Wall Street Journal, US
February 11, 2008

NEW DELHI -- Many of India's back-office businesses -- the industry that propelled this nation onto the front lines of global commerce -- may soon be changing hands.

Some of the largest outsourcing units are still those belonging to Western companies, including Wall Street's biggest banks, which set them up here in recent years to take advantage of India's low-cost, educated labor force. Now, many of the big companies could soon be looking to get out of part or all of the business by selling either to Indian companies that specialize in outsourcing services, to private-equity firms or through initial public offerings.

The reason: The costs for big companies of having their own Indian units are rising sharply -- India's skilled-labor wages are shooting up -- and many, particularly financial-service companies, are looking to cut their overhead as the U.S. economy slows and the credit crunch takes its toll. The dollar's weakness, which makes doing business in India comparatively more expensive, is another incentive for Western companies to leave the sector.

Moreover, a study by consultants McKinsey & Co. and Nasscom, the Indian tech and outsourcing industry group, found that, on average, company back offices -- or "captives," as they are referred to in the tech and outsourcing industry -- were less efficient than companies run by outsourcing firms that specialize in the business. For some types of back-office work, captives' costs are 30% higher. The survey found that the higher costs didn't lead to lower staff turnover or better-quality work.

The scale of many of these individual deals is expected to be small, mostly in the range of $50 million to $100 million. But together they could total sizable numbers at a time when deals elsewhere are expected to become scarce because of the economic slowdown in the U.S. and elsewhere.

"As U.S. companies come under pressure, in a recessionary environment, I think this will be a good way to cut their costs -- and also get some money," said Amitabh Chaudry, CEO of Infosys Technologies Ltd.'s fully owned business-process outsourcing arm, Infosys BPO Ltd.

India's tech and business-process outsourcing industry is growing fast and has been a big factor in boosting economic development here. Nasscom says sales for the industry totaled more than $47.8 billion in the year to March 31, 2007, up almost 10 times over the past decade. The Indian tech sector was 5.4% of the nation's gross domestic product in fiscal 2007, up from 1.2% in fiscal 1998.

Four or five years ago, setting up a unit in India made sense: Shift the accounts, tech department or customer-care center to India and cut costs by 45%. Many American and European companies rushed to do it. Swiss bank UBS AG has a back office employing about 2,000 in tech hub Hyderabad. Goldman Sachs Group Inc., J.P. Morgan Chase & Co. and HSBC Holdings PLC have their own, too.

For some companies, such offices have now become a headache. Once the initial benefit was felt, companies found it hard to keep on top of their costs. Salaries and the cost of office space jumped. Staff turnover has been high, and companies are having to spend on headhunting fees and training.

India, however, remains a low-cost destination that offers a large quantity of people with the often-special skills required to make such businesses work, says Pankaj Kapoor, an analyst at ABN Amro Asia Equities in Mumbai. Although costs have risen, they remain substantially lower than in the U.S. or Europe. While some companies have begun to move their back-office operations to lower-cost countries such as Vietnam, Mr. Kapoor says he thinks many -- particularly the more complex back-office functions -- will remain in India. But at the same time, Western companies are still likely to look for ways of getting those functions off their balance sheets, he adds.

Not all back-office operations are suitable for sale or for operation by another company. Functions that are very central to a business or are too sensitive to be outsourced are likely to stay owned by the parent company, says Viju George, an analyst at Edelweiss Securities, a financial-services firm in Mumbai. Companies that market themselves as having an India presence, often as a low-cost benefit to clients, are also unlikely to sell, Mr. George says.

But already, sales are happening. Genpact Ltd., a business-process outsourcing concern, was spun out of General Electric Co. and listed on the New York Stock Exchange in August. GE and private-equity concerns General Atlantic LLC and Oak Hill Capital Partners remain big shareholders.

Travelport Group, a U.K. travel-services company that is owned by private-equity concern Blackstone Group LP, in December sold Travelport ISO, its Indian back-office operation, to Mumbai-based Intelenet Global Services Pvt. Ltd., a company 80%-owned by Blackstone. At the same time, Intelenet unveiled a deal to buy Upstream, an international outsourcing company, from its major shareholders based in Fargo, N.D. Together, the deals were valued at $75 million.

Back offices also have changed hands as part of bigger outsourcing deals. As part of a $250 million outsourcing contract last July, Infosys bought three back offices in India, Thailand and Poland from its client Philips Electronics NV of Amsterdam for $28 million.

Citigroup Inc. has eyed a sale of its Indian back-office unit, Citigroup Global Services Ltd., people familiar with the matter say. Citigroup declined to comment. And United Kingdom insurance giant Aviva PLC said a strategic review of its Indian offshore business, Aviva Global Shared Services Pvt. Ltd., had come to the early conclusion that partnership, in a variety of forms, could be a better alternative to its current back-office set up. Aviva is now in talks with "a very small number of parties before reaching a final conclusion," the company said in a statement.


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## solid snake

I gotta admit, India is starting to make me jealous


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## Bushroda

*For India's 'Brand Freaks,' Gucci Trumps Gandhi*






*"I'll spend my whole salary for a really swank brand" and eat rice cakes the rest of the month, says Anuga Shah, 26, shopping in a boutique. *

By Emily Wax
Washington Post Foreign Service 
Monday, February 11, 2008

AHMADABAD, India -- Amid buttery leather handbags and $200 torn jeans, Anuga Shah and her friends were shopping in this boomtown's newest mall recently, proudly humming that they were "spendy." 

"This week, it's all about Tommy," Shah, 26, cooed as she petted hooded sweaters inside a glitzy Tommy Hilfiger boutique. "In India today, we love to be branded. I'll spend my whole salary for a really swank brand and eat idli [steamed rice cakes] for the rest of the month."

This country's growing middle and upper-middle classes have recently given rise to self-described "brand freaks," who crave the latest luxury goods. In this city -- where the father of the nation, Mohandas Gandhi, once located his austere ashram and rejected foreign textiles -- it's Chanel, not homespun cloth, that generates excitement these days. 

India's elite have long enjoyed luxury goods imported from the West. In recent months, though, Indians who can't afford $600 sunglasses -- but who still have some disposable income -- have been splurging. Designers including Prada, Jimmy Choo, Gucci and Louis Vuitton, as well as brands such as Rolls-Royce and Mont Blanc, have either set up shop or beefed up operations here. 

Last month marked the opening of two of the country's highest-end malls. At New Delhi's Select City Walk, women nearly caused a stampede as they crowded into a MAC cosmetics store, many of them in search of a popular brand of eye shadow. Women said they were thrilled that their husbands didn't have to go abroad to shop for them anymore. 

"This year, India really unleashed the brand beast," said Saloni Nangia, associate vice president of Technopak, an India-based marketing research firm that estimates the middle and upper-middle classes at 8 million to 9 million people and growing, albeit in a country whose population is 1.1 billion. 

"It used to be just five-star hotels that had the high-end shops," Nangia said. "But now India is actually getting upgraded with both premium brands and very high-end luxury. The right real estate is here now and the brand-freaks market is only going to get bigger." 

In the fall, Vogue magazine, the bible of high-end fashion, launched its thick Indian edition, the most glamorous in a long line of magazines from Elle to Marie Claire that now have editions here. A recent article in Vogue headlined "The rise of ME culture" chronicled how much the Indian paradigm has changed, with women finding more disposable income and freedom to spend on their own needs rather than on the traditional extended family. 

"This is the year of the Indian woman as a confident brand-buyer not abroad, but finally at home," said Bandana Tewari, fashion features editor at Vogue's Indian edition. "I find it refreshing that we have choices and a better lifestyle riding the optimism of the economy." 

In a country with a rich tradition of textiles, Indian haute couture is flourishing, too. 

"India still loves its colorful silk saris. We haven't gone to wearing black and white like the rest of Asia," Tewari said. "We refuse to change our intrinsic personality. We are remembering that India has always had superbly expensive jewelry, and insanely luxurious hand-woven seven-yard saris that are 800 years old. It's a good reminder to us that it shouldn't just be about importing. We were sprinkling very expensive saffron on our dessert before we got caviar." 

Such enthusiasm is not shared by everyone. For many, the rising popularity of Western brands has served only to highlight the stark gulf between the rich and poor in a country where the majority of people still live in abject poverty. Along a main highway here, Tag Heuer billboards jockey for space with towering posters of Mont Blanc pens; below, barefoot children in ragged clothes tap on car windows, begging bowls in hand.

Meanwhile, a new Gucci store in New Delhi sells fancy dog bowls, as well as dog beds priced from $300 to $500 -- all in a country that has more stray dogs roaming the streets than almost any other in the world, according to animal rights activists. 

"We are changing a lot and too quickly as a nation," lamented Vijay Bhai, 81, the caretaker of Gandhi ashram here, who likes to joke that he represents India's endearingly cranky and thrifty grandfather. "Everyone should remember that some jobs are good when the malls go up. But we shouldn't forget the poor and what's important in Indian life. Gandhi was a humble man who wore a loincloth when he went to shatter the British Empire, not some glitzy brand-name clothes." 

Bhai and others at Gandhi's quiet ashram marked the 60th anniversary of Gandhi's death last month, but there was little fanfare. They said they worried that the country was abandoning Gandhi's visions. 

"If Gandhi were alive today, he would be shocked at how materialistic India is," Bhai said. 

He said he had written school principals to encourage them to bring their classes to the ashram and view the simple cases that hold Gandhi's sparse possessions: a bowl and a few spoons, his famous circular glasses, a few books -- all symbols of his austere lifestyle and respect for the poor. 

Some of those walking the grassy paths of the ashram said the emergence of the middle class is something that Gandhi might have appreciated, because more people are being lifted out of poverty. It's a matter of development, they contended. 

"You can't go for a job interview with a global company in loincloth," said Rutaunshi Patel, 23, who is finishing her master's degree in English literature and was visiting the ashram with a friend. "You have to try to find a balance. In the new India, of course, that's hard." 

Gandhi has not been completely forgotten. A group of friends in their 20s visiting the ashram mentioned a recent Bollywood comedy about a gangster who adopts Gandhian ways. The show has been among the most popular DVDs here. 

Ritu Shah, 24, who was among those touring the ashram, said she recently told her parents that she wanted to visit there on her birthday. 

"They said, 'Why? Don't you want to go shopping?' " she said with a laugh as she lugged a designer handbag through the ashram's museum. "I said, 'No, no more shopping. I want to see what Gandhi was all about.' "


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## Bushroda

*Integrate rural economy with the national one: Sunil Mittal*
11 Feb, 2008, 0343 hrs IST,Sunil Mittal, 

Through the past four years, Indias Gross Domestic Product (GDP) has grown at a phenomenal rate of 8.6%. The momentum has continued through the current fiscal as well. 

The challenge today, however, lies as much in sustaining this momentum as ensuring an inclusive pattern of growth. I expect two distinct thrust areas in the coming Budget: a focus on social and physical infrastructure, and initiatives to integrate the rural economy with the national economy. 

Since shortage of skilled manpower constitutes a serious long-term challenge to the economy today, Indian industry would expect a concerted effort from the finance minister on the education and skill development platform. 

In line with the 11th Plan Approach paper, which prescribes allocation towards education be raised from the current 2.9% to 6% of GDP, I expect enhanced allocation towards creation of a robust education and skill development infrastructure in the country. 

We look forward to initiatives towards development of an institutional framework to devise and implement national, sectoral strategies to develop and improve the skills of Indian workforce. Such a move would help us graduate from a labour to a knowledge arbitrage economy. 

Given that over-stretched physical infrastructure is going to be a major concern area, Indian industry would expect significant initiatives in the area of resource mobilisation for infrastructure projects. 

The country has by and large developed a consensus around accelerated inclusion of the rural economy in the wider growth process. 

We expect added thrust on two critical components of the rural economy: strengthening of irrigation infrastructure and a larger role for the private sector to improve agricultural productivity and rural income. The government needs to attract more private companies towards agricultural R&D through appropriate tax and financial incentives. 

On the tax front, Indian industry would expect some reduction in overall tax burden and removal of tax-related anomalies to stimulate manufacturing. 

In the service sector, telecom would expect dilution in the overall incidence of various levies, which cumulatively stand at a staggering 30% of operator revenues. Such an initiative would help operators penetrate further into the rural hinterland and enable telecom to play a key role in the integration of the rural to the national economy. 

On the whole, Corporate India expects a Budget that not only drives economic growth but ushers in the key instruments for equitable growth. 

*(The author is chairman & group CEO, Bharti Enterprises; and president, CII)*


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## Flintlock

solid snake said:


> I gotta admit, India is starting to make me jealous



Itni jaldi nahin yaar...


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## Bushroda

*Mad Mumbai money*
*Big bank from Toronto makes a pit stop at Abbotsford's University College of the Fraser Valley before making the giant leap overseas*

Joanne Lee-Young, 
Vancouver Sun, Canada
Published: Monday, February 11, 2008

Canada's largest bank has landed in India, bucking a homebody reputation for mostly sticking close to North America.

Last week, RBC Royal Bank announced that its new Mumbai office will help Canadian companies do more business in India by offering capital market products, trade financing and private banking services.

But this far-reaching leap by the bank from Toronto to Mumbai is one that makes an interesting first pit stop in Abbotsford, of all places.

The surrounding area is not only home to one of the largest Indo-Canadian populations, but also to one D.J. Sandhu, a professor at the University College of the Fraser Valley and a part-time business consultant.

Last year, UCFV and its unique Centre for Indo-Canadian Studies appointed Sandhu to a research chair position, tasking him to supply "effective, appropriate and practical research to local businesses, helping them to capitalize on opportunities between British Columbia and India."

Since then, he has become a full-fledged road warrior, flying to India about every six to eight weeks and basically spending about half his time there. Last week, he returned to Vancouver after a longer-than-usual stint of three months in Delhi, Bangalore, Mumbai and Chandigarh.

RBC, for one, is keen to back Sandhu he as logs these kilometres. The bank is planning to officially announce its sponsorship of Sandhu's chair at UCFV, a move that is part of its Mumbai strategy and an understanding that Indo-Canadians in B.C. (and in Ontario) are increasingly eager and well-positioned to take part in the booming Indian economy.

In opening the Mumbai office, Toronto-based RBC president and CEO Gordon Nixon noted that people from India comprise the second-highest Asian immigrant population in Canada after China.

"Indo-Canadians have made and continue to make a huge contribution to the fabric of Canadian life. Their presence and cosmopolitan imprint on our cities, especially Toronto and Vancouver, have been profound. They form an important, indeed critical link between India and Canada," he said in a statement.

Sandhu said that "based on commonly cited statistics, the estimated number of people of Indian origin living in foreign countries is close to 25 million. And those 25 million are remitting or investing back to India some $26 billion US a year."

In B.C., that diaspora market is definitely watching India more closely than ever. "They are looking at the enormous gains," said Hemendra Vora, a Vancouver-based investment adviser with Keybase Financial Group who caters mainly to Indo-Canadian clientele.

For them, India is at once a tantalizing and yet inhospitable business environment, as it is for all foreign investors, regardless of family or cultural ties.

Now, Sandhu said, "if you have a legitimate Canadian bank providing a channel, the pipeline can grow even in a market with so many uncertainties."

Sandhu describes the RBC interest as one of "trying to link communities from here to there. If someone here wants to build a hotel there, they can talk to any bank, but if they know RBC from home, it makes it easier for them."

"For example, there is a B.C. mining company that is first in line to mine for diamonds in south India. Now, if that mining group needs financial backing, they could look to RBC," said Sandhu.

Sandhu declined to name any of these deals that he is brewing, but, of course, his job will be to feed RBC with as many such leads as possible.

Meanwhile, as RBC ramps up its India products and services, it will find both a competitor and perhaps a partner in Hari Panday, president and CEO of ICICI Bank Canada.

ICICI is a well-established Indian bank that has been eking out a footprint in Canada for the past few years. Currently, it runs seven branches, including a downtown Vancouver location. "Our diasporic business is very active. There is a very steady flow of newcomers from India to Canada, plus a number of Canadian corporates and individuals who travel often there for business or pleasure," said Panday.

"The European banks and insurance companies, the Australian, the American banks are all in India with very stabilized platforms where they are doing significant transactions," said Panday. "We are delighted about RBC. It's finally a large Canadian endorsement of what is happening in the Indian economy at large."

Else, Panday said that as another example of the rising interest in India (and what RBC might offer in the future), ICICI Canada recently launched two India-focused private equity funds aimed at pension funds and high net worth individuals in Canada.

So far, individual investors in these funds have mostly been from Ontario, but "we are getting more queries from B.C. I am meeting with fund managers in B.C. and from there, we will get to the high net worth individuals."

Panday explained that "we are based in Toronto, but we are planning to place a manager in Vancouver who would constantly feed information [about the funds] to increasingly interested circles in B.C."

*The Road to Mumbai*

India is the second-fastest growing major economy in the world. Much of that growth is happening in Mumbai, India's financial and high-tech powerhouse. As a result, Mumbai is attracting more than just Canada's biggest bank. Scotiabank, the second-largest Canadian bank, earlier opened offices there. U.S. beer giant Anheuser-Busch chose Mumbai as the Indian launch site for its Budweiser brand last year, and even aging heavy metal icons Iron Maiden have found a market in the former Bombay, starting their world tour there earlier this month.


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## Bushroda

*Software and services export to cross $40bn: NASSCOM *
UNI 
Monday, February 11, 2008

MUMBAI: The melting US economy and the appreciating rupee is in no way stopping the growth of the Indian IT industry poised to a 33 per cent growth in fiscal 2008 and bang on target to emerge a 75 billion US dollar sector by 2010, NASSCOM announced on Monday.

Releasing the strategic review for 2008 at a press conference here, NASSCOM Chairman Lakshmi Narayanan said ''Despite heavy winds, we continue to do very well and are meeting year after year, stretched growth targets.''

NASSCOM said software and services export would cross $40 billion in fiscal 2008 with the domestic market estimated at $23 billion.

''Positive market indications and strong records strongly support the optimism of the industry in achieving its aspired target of $60 billion in software and services exports and USD 73-75 billion in overall software and services revenue by fiscal 2010. Direct employment was expected to reach two million,'' Mr Lakshmi Narayanan said.

He said, ''The robust growth of the Indian IT BPO industry by over 33 per cent in the current fiscal reinforces the confidence of global corporations in India. As we move, 2010 trend indicates that the industry is firmly poised for broad growth across industry and service lines. It strengthen India's leadership position as the primary sourcing location for software IT experimentation and business process related services'', he added.

The new NASSCOM President Som Mittal said the Indian IT industry has been rapidly evolving and growth was on track to achieve, if not exceed the targets for 2010. ''The trends are interesting and findings indicate that domestic market is poised for growth with IT spends trending upwards, particularly by the government'' he added.


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## Bushroda

*Indian Cities Compete*
Oxford Analytica 
FORBES, NY
02.06.08, 6:00 AM ET

IBM announced that it has launched an outsourcing center in Noida.

The location is one of several smaller cities that are increasingly attracting the business process outsourcing sector as it comes under pressure from rising costs in established centers such as Bangalore. 

Despite predictions of a slowdown in growth, the business process outsourcing industry (BPO) is expanding rapidly:

--Exports reached $8.4 billion in fiscal year 2006-07 (ending March), up 35% from the previous year. 

--The National Association of Software and Service Companies (NASSCOM) expects exports to reach $10.5 billion to $11.0 billion this year. 

--The sector employed 553,000 people last year, up from 415,000 the previous year. 

However, the sector faces competition from countries in South-east Asia and Latin America, and the appreciating rupee has made exports less competitive. In addition, the continued growth of the software industry--with which the BPO sector competes for facilities and inputs--has strained infrastructure and made real estate and labor costs soar. Critically, the competition for skilled labor has resulted in the highest attrition levels in Asia, estimated by NASSCOM at 30% a year.

On the move. As a result, BPO companies are beginning to establish operations in smaller cities and to be less reliant on the "Tier I" cities of Bangalore, Mumbai, Delhi, Hyderabad and Chennai. Over the last few months, industry heavyweights such as MphasiS, Satyam, Wipro (nyse: WIT - news - people ), Tata Consultancy Services (other-otc: TACSF.PK - news - people ) and Infosys have set up BPO facilities in relatively unknown "Tier II" cities such as:

--Mangalore and Trivandrum in the south; 

--Chandigarh in the north; and 

--Vishakapatnam in the east. 

Many of these investors are also setting up multiple facilities in smaller locations. For example, Wipro, which has more than 50,000 employees, is setting up facilities in Kochi and Trivandrum in Kerala, Coimbatore and Trichy in Tamil Nadu, as well as others further north. This movement is not limited to local operations. International investors are also setting up facilities outside Tier I locations:

--Honeywell (nyse: HON - news - people ) set up operations in Madurai, Tamil Nadu. 

--General Electric (nyse: GE - news - people ) has facilities in Jaipur, Rajasthan. 

--IBM (nyse: IBM - news - people ) and Dell (nasdaq: DELL - news - people ) have set up operations in Coimbatore in Tamil Nadu. 

--U.S. retail company Target (nyse: TGT - news - people ) is setting up in Mysore, 150 kilometers from Bangalore. 

Cost advantages. Tier I cities will continue to be prime locations for BPO operations due to the presence of well-developed labor markets, established lobby groups and developed supporting industries. They will remain particularly attractive to first-time investors in India seeking to minimize risk. However, alternative locations offer distinct advantages:

--Prices. Relatively untapped real estate markets mean lower costs and less waiting time for permits. Many smaller cities have good local colleges, meaning that graduates are cheaper, easier to find and--due to the proximity of their families-- easier to retain. The Associated Chambers of Commerce and Industry estimates that Tier II cities offer an average cost advantage of 15% over Tier I cities. 

--Support. The move to spread the software and BPO industries around the country has central and state government support. Software Technology Parks of India, the agency that offers export-oriented firms dedicated infrastructure and facilities, is setting up parks in second-tier cities. Recent liberalization measures will also permit the establishment of smaller information technology parks appropriate to smaller cities. 

--Incentives. States that have yet to enjoy the benefits of these new industries are eager to attract investors. Those such as Karnataka, Maharashtra and Andhra Pradesh that have established industries are keen to decongest their cities and spread growth to secondary centers. 

To read an extended version of this article, log on to Oxford Analytica's Web site. 

*Oxford Analytica is an independent strategic-consulting firm drawing on a network of more than 1,000 scholar experts at Oxford and other leading universities and research institutions around the world.*


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## Bushroda

*India's Reliance Power sinks on debut*
By Joe Leahy in Mumbai
Financial Times, UK
11/2/2008 11:00 London Time 

India's Reliance Power, which staged the country's biggest initial public offering last month, fell as much as 21 per cent on its trading debut on Monday, on weakness in the broader market amid concerns over the global economy.

Shares of Reliance Power, whose $3bn listing was sold out within a minute of opening in mid-January, closed 17 per cent lower at Rs372.30 per share on Monday compared with an IPO price of Rs450. Earlier they fell as low as Rs355.30 after touching an opening high of Rs530.

R Venkataram, executive director with Mumbai-based brokerage India Infoline, said the near-term picture for Indian stocks was clouded by uncertainty over the global economy and the release of the national budget later this month.

"The market is looking like it will be weak for some time. Investors will wait for cues from the budget. Then March is the end of the financial year, when we will get to see corporate earnings," Mr Venkataram said. 

Bombay's benchmark Sensex Index closed down 4.78 per cent to 16,630.91 points, extending a near 16 per cent fall from record highs in mid-January.

A plunge in the index since Reliance Power listed has stalled India's once-thriving market for IPOs. Last week two high-profile offerings were scrapped because of a lack of demand.

Critics said the IPO of Reliance Power, which is backed by billionaire industrialist Anil Ambani, was heavily over-valued even before the recent falls in the market.

It was priced at a premium despite having no operating assets and little prospect of generating substantial cashflow for a number of years. 

"I think it was grossly over-valued so I don't think anyone should be surprised it has fallen today," said one analyst in Mumbai who declined to be identified. 

However, supporters of the company argued that the IPO was a rare chance to gain exposure to India's growing infrastructure sector, with Reliance Power planning to build a national network of power stations. 

The offering attracted record demand, with investors placing bids for 73 times the number of shares on offer, and institutional investors in particular swarming to the stock.

Some analysts had speculated there would be some support for the IPO from the banks that arranged the deal.

But India Infoline, in an investor note, said: "With the Reliance Power issue getting a record oversubscription, Anil Ambani is [under] no obligation to please anyone today."

It said Mr Ambani expected investors to put their money into the stock for the long-term and weather short-term market weakness.


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## Bushroda

*Mahindra Appalachian diesel pickup arrives in US next year, diesel hybrid version by 2010*
by John Neff
Posted Feb 11th 2008 7:02AM





Indian automaker Mahindra & Mahindra Ltd. will shake up the U.S. truck market next year when it introduces a new midsize pickup called the Appalachian sporting a 2.2L four-cylinder diesel engine producing around 150 horsepower and 300 pound feet of torque. Speaking with Mike Levine from Pickuptruck.com, John Perez, the CEO of Atlanta-based importer Global Vehicles U.S.A. that's aiding Mahindra's entry into the U.S. market, revealed that the truck will deliver 30 to 35 miles per gallon and cost in the mid-$20,000 range. It will be paired with a six-speed automatic that's controlled via a floor-mounted shifter or paddle shifters(!), have a class-leading payload of 2,600 lbs. and feature a 60,000-mile, four year bumper-to-bumper warranty.

If that's not enough to strike fear in domestic and import truck makers alike, Mahindra has also revealed plans to sell a diesel hybrid version of its pickup by 2010. If it happens, the diesel hybrid Appalachian will be, as far as we know, the only diesel hybrid on sale in the U.S. market and achieve fuel economy figures even higher than its diesel-only counterpart. Imagine a midsize pickup in the low-$30,000 price range capable of 40+ mpg. 

The Appalachian has yet to go through U.S. certification for emissions and safety, but the company is spending $80 million to ensure its truck passes with no issues. After that, production will begin in India on March 15, 2009, but the trucks will finish assembly at a plant in Ohio to avoid high import taxes. After that, customers can visit a 300-strong dealer network with 24 standalone dealerships, one of which is already under construction.


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## Neo

*Multi-billion dollar telecom deals​*
THERES been frenzied growth in Indias telecommunications sector in recent years, as millions of Indians  including the less affluent and the poor  discover the joys of connecting to their relatives and friends through mobile phones.

Not surprising then that international telecoms giants and private equity funds are also discovering the joys of connecting to a nation that has emerged as the worlds fastest growing telecommunications market. Many of them have been announcing multi-billion-dollar deals in recent weeks, acquiring stakes in companies.

Every month, eight million new cell phone subscribers sign up for services. There are about 250 million cell phone users in India at present. This is expected to double to 500 million in just over two years. By 2012, one in every second Indian will be sporting a mobile phone, as the cell phone market is expected to expand to 600 million subscribers.

The sector got a boost recently with the government granting licences to over half a dozen players to operate services in multiple circles. They include two existing telecom giants, Reliance and Tatas, both of whom have been granted GSM (global system for mobile phone) licences. The two companies have been operating the CDMA (Code division multiple access) network, and are now planning to unfold their GSM systems across the country.

The entry of new players will mean a further fall in telecom tariffs. Some analysts expect a 25 per cent cut in tariffs, as the new players come out with attractive packages to lure customers. The savage price war that is expected over the coming months will also witness a major shake-up in the industry, and many of the new entrants are likely to be taken over by the bigger fish.

According to industry estimates, the next two years will see investments of about $25 billion, as telecom service providers rush to capture a large chunk of the market, comprising 250 million to 350 million new subscribers. This will be the single largest investment in the telecommunications sector anywhere in the world.

The new players who have been awarded licences recently are expected to invest about $15 billion, while the existing half a dozen operators  with nationwide services  are likely to plough in another $12 billion.

The telecommunications firms will be raising funds through borrowings, equity (by going in for public offers) and tapping private equity players. With interest rates in the US heading southwards, many funds are eager to invest in the Indian telecommunication sector, where returns have been substantial.

* * * * *

THE past few days have seen several major deals being announced between Indian telecom majors and global financiers. Last week, Kohlberg Kravis Roberts & Co (KKR), a leading private equity fund, paid $250 million for a 2.5 per cent stake in Bharti Infratel, a subsidiary of one of the largest private Indian telecom player, Bharti Airtel.

A few days earlier Morgan Stanley picked up a stake in independent telecom infrastructure firm TowerVision for about $300 million. TowerVision plans to utilise the funds to raise the number of telecom towers in its portfolio to 6,000 over the next one year. The company was promoted by British and Israeli partners.

The Anil Dhirubhai Ambani Group (ADAG), which owns Reliance Communications, also announced plans to launch an initial public offer (IPO), hoping to raise about $1.5 billion by selling a 10 per cent stake in its subsidiary, Reliance Infratel. Reliance Communications will offer nearly 90 million shares in its subsidiary to investors.

ADAG is on a fund-raising spree to finance the ambitious projects that it plans to take on hand. It recently floated Reliance Power, attracting investments worth a whopping $200 billion. The group also plans to float Reliance Entertainment, the media and entertainment unit, shortly.

The Reliance Power scrip will be listing on the Bombay Stock Exchange today. Though a new company  with virtually no assets on its books  it managed to break all previous records and create stock market history by attracting over five million bids from investors. The issue attracted over $3 billion in the very first minute that it opened. The company will also be having over four million shareholders on listing, again a record in the Indian capital markets.

Reliance Communications also plans to invest about $2 billion in its telecom infrastructure subsidiary, besides another $1.3 billion for the nationwide roll-out of its GSM network. Reliance Infratel will have about 60,000 telecom towers by next March, more than doubling its present strength of 25,000 towers.

Earlier, the company had sold a five per cent stake in Reliance Infratel for nearly $350 million to international investors including HSBC Principal Investments, George Soros Quantum Fund, Fortress Capital and the Galleon group among others.

The booming telecommunications infrastructure sector has attracted other international lenders, besides KKR. In December, Bharti Airtel had sold a nine per cent stake in Bharti Infratel for a billion dollars to over half a dozen international investors, including Singapores Temasek, Goldman Sachs, Citigroup, the Investment Corporation of Dubai, Macquarie and AIF Capital. On the basis of these deals, Bharti Infratels enterprise value has been placed at over $10 billion. The company owns 20,000 mobile towers and has a 42 per cent stake in Indus Towers, a joint venture with international telecom major Vodafone and Indias Idea Cellular.

* * * * *

INDIAS mobile tower business is expected to witness remarkable growth, as several new players enter the fray, and existing companies expand their services to semi-urban and rural areas.

There are about 125,000 mobile towers in India today. This is expected to touch nearly 300,000 in a little over two years, as the number of mobile phone subscribers doubles to 500 million.

While in the past most of the mobile phone service providers installed their own towers, there is an increasing trend today of several firms sharing the infrastructure. It costs an average of about Rs2.5 million to set up a mobile phone tower. A cell phone company with an all-India licence would need about 10,000 towers, which would cost about Rs25 billion.

Many companies are now establishing towers that they share with multiple service providers. Both Bharti Airtel and Reliance Communications  who have spun out their subsidiaries  provide a common platform to others, including rivals. Average rents works out to about Rs25,000 a month for a tower.

The lucrative telecom towers business has also attracted many international players. American Tower Corporation, a US-based firm, is making a foray into India. TowerVision is owned by Ashmore Investment of the UK, and has won contracts from players like Spice Communications, to build and lease about 1,000 towers.

Another US-based investor, Q Investment, is backing Xcel Telecom with $500 million in funding; the company plans to install about 2,000 towers, besides acquiring smaller players. Europes Rambolls Telecom Towers has also a significant presence in India. Smaller players include Aster Tower, which has obtained funding of about $35 million from US-based funds.

GTL, an Indian telecom major, has also got international funding of over $250 million from private equity investors. GTL last week entered into an alliance with Ericsson, which has outsourced its network infrastructure services in the UK to the Indian firm.

A special purpose vehicle  GTL M&A Services  has been set up to provide services in the UK. According to Manoj Tirodkar, chairman and managing director, GTL, the company will provide passive site maintenance, engineering and remote management services to network operators and service providers in the UK. Ericsson will look after sales and marketing.

Tirodkar believes other international majors will also consider outsourcing such services to Indian companies. We see a trend as other operators are also looking for cost arbitrage and economies of scale, he notes.

With the Indian telecommunication sector on a roll, domestic firms are now looking at offering their services to countries around the world.

Multi-billion dollar telecom deals -DAWN - Business; February 11, 2008


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## Bushroda

*Indian software industry forecast to grow 33 percent; Europe to offset any US slowdown*
The Age, Australia
February 11, 2008 - 11:16PM

India's software service and outsourcing industries are likely to grow 33 percent in fiscal year 2008, with new business in Europe to offset any slowdown in the U.S. economy, according to a new study released Monday.

Diversifying the services beyond the American market would help the industry earn total revenue of US$64 billion (euro53 billion) from April 2007 to March 2008, said Som Mittal, president of the National Association of Software and Services Companies, or NASSCOM, while releasing the study.

NASSCOM is the trade body of technology companies operating in India.

The United States remains the Indian software industry's biggest market with a share of 61 percent, said the "Strategic Review 2008" by NASSCOM.

Exports to Europe, however, have grown more than 55 percent since 2004, it said. The United Kingdom now accounts for 18 percent of India's software services and continental Europe for 12 percent, it said.

The study also said that exports of software and services are likely to cross US$40.8 billion (euro33 billion) for the fiscal year ending March 31, while domestic revenues will touch US$23.2 billion (euro19 billion).

"We are expanding our base and this shows in the diversification of industry from English-speaking countries to Europe and other nations," said Mittal. "The industry is managing to grow and diversify geographically."

The NASSCOM study said companies that earlier provided services to traditionally recession prone industries such as banking and telecommunication are expanding to sectors such as retail, health care and entertainment, which are less likely to be hit in a slowdown.


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## Bushroda

*Could the India growth train be slowing?*
By Heather Timmons
International Herald Tribune
February 11, 2008


*Anil Ambani at a ceremony Monday for the listing of Reliance Power shares on the Bombay Stock Exchange. The stock tumbled in its debut.*

NEW DELHI: Could the fast-moving India growth train finally be slowing?

The country's largest public offering, Reliance Power, had a dismal first trading day of trading Monday, with its shares falling 17 percent below its price at offer last month when investors bought all available stock in less than a minute.

Meanwhile, the Bombay Stock Exchange's Sensex closed down 4.78 percent Monday, the worst major performer in depressed Asian markets.

Reliance Power's disappointing market debut followed a steady drip of slower growth projections, higher than expected inflation figures and falling export data released in recent days. Several initial public offerings have been pulled in India in the past few weeks as once-resilient investors rethink their commitment to India's volatile stock markets.

In a sign that consumer spending may need a lift, the country's largest bank, State Bank of India, cut its main lending rate a quarter of a point Monday, following recent moves by other big local banks.

"People are becoming more realistic" about India's growth prospects, said Gurunath Mudlapur, managing director of Atherstone Institute of Research in Mumbai.

The rise of the rupee is slowing exports, some foreign investment is draining out of the stock markets and consumer confidence in India, which tops sentiment in most of the rest of the world, is being shaken by fears of a global downturn. India's economy has been the second-fastest growing major economy in the world, after China.

Slower growth projections that are a disappointment in India still far outstrip expectations for most economies in the developed world.

Thanks to a heavy reliance on the domestic market, India's economy will probably not slow significantly unless a United States recession is lengthy and severe, most analysts and economists say.

But an era of breakneck growth may be over.

"Momentum is still fairly strong, but there is some slowdown from elevated levels", said Vikas Agarwal, an analyst with JPMorgan in Mumbai. The bank is predicting a moderation in growth, "not falling off the cliff," Agarwal said.

India's gross domestic product growth will slow this fiscal year for the first time in three years, the government said on Feb. 7. GDP growth for the fiscal year ending March 31 will be 8.7 percent, down from 9.6 percent a year ago.

JPMorgan is predicting even more of a slowdown, and has pegged India's GDP growth at 8.6 percent in the current fiscal year, falling to 7.5 percent in the following one.

Meanwhile, recent price data show that India policy makers need to watch inflation as well. Wholesale prices rose more than expected in figures released Feb. 8, to 4.11 percent, as demand for staples like produce and spices rose.

"Right now inflation is creeping up," leaving India's central bank in a bind, said Chakri Lokapriya, head of Indian equities at BNP Asset Management U.K.

The central bank would "rather sacrifice growth than have inflation, so that they can sustain longer growth over time," he said.

Merrill Lynch told investors Monday to "expect monetary easing in India" this year, predicting that the Reserve Bank of India would cut its key lending rate by 50 basis points.

Economists predict that industrial production numbers, due out on Tuesday, will show a drop because consumer demand is slowing thanks to high prices and high loan rates.

"Consumers are becoming more discerning" about buying highly valued real estate, taking out auto loans and snapping up new home products, Mudlapur said.

Reliance Power ended the day at 372.50 rupees a share, after pricing last month at 450 rupees. The company, which is half owned by the billionaire Anil Ambani's Reliance Energy, plans to open power stations throughout India.

"A number of local brokers had a lot of expectations for the stock," said BNP's Lokapriya. "It priced at time when the market was stronger, worldwide, but now sentiment is dour," he said.

Last week the real estate company Emaar MGF Land and Wockhardt Hospitals withdrew initial public offerings from the Indian exchanges after tepid response from investors.

Turmoil in global markets is partially to blame, said Lokaypria, who notes that Indian stocks trade at much lower price to earnings ratios than their Chinese counterparts.

It's a case of "really bad timing," he said.


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## Bushroda

*Indo-UK bilateral trade may reach $60 bn by 2020*
11 Feb, 2008, 2001 hrs IST, PTI

KOLKATA: The bilateral trade between India and UK might reach a staggering figure of $60 billion by 2020, British High Commissioner in India Sir Richard Stagg said on Monday. 

"There has been considerable degree of progress in bilateral trade between the two countries which will grow in the next 12 years," he said. 

He said that in the recent past, the Indian economy grew a considerable degree and UK would like to establish a strong business relation. 

"Great Britain is likely to invest in certain priority areas like automotive industry, service sector, banking, insurance, retail, agriculture and logistics," Stagg said. 

These were growing sectors and Britain would like to invest in them because these areas were not explored properly and have great business potentiality, Stagg added. 

He said, "We would like India to invest in fields like information technology, automotive and energy."


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## Bushroda

*Indian IT services sector strengthens*
By Joe Leahy in Mumbai 
Financial Times, UK
February 12 2008

India's computer services sector defied growing cost pressures at home and a slower US economy to increase full-year revenues by an estimated 33 per cent, the industry's representative body said yesterday.

The National Association of Software Services Companies said total IT sector revenue, excluding hardware, would be $52bn for the year to March, of which $40.3bn would be from outsourcing services to other countries.

"While we are optimistic for the future, we need to be vigilant about how things are progressing," said Som Mittal, Nasscom president.

India's IT outsourcing sector, one of the pillars of its recent economic boom, is coming under increasing pressure from domestic wage inflation, higher real estate costs and a stronger rupee.

The industry, which provides services from managing a client's computer systems to processing a foreign bank's mortgage applications, is bracing for a slowdown in its main customer base, the US financial sector.

But Mr Mittal said India's outsourcing industry was holding up well and was on track to meet its forecasts of $60bn in software and services export revenue by 2010.


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## Flintlock

Bushroda said:


> *Indian IT services sector strengthens*
> By Joe Leahy in Mumbai
> Financial Times, UK
> February 12 2008
> 
> India's computer services sector defied growing cost pressures at home and a slower US economy to increase full-year revenues by an estimated 33 per cent, the industry's representative body said yesterday.
> 
> The National Association of Software Services Companies said total IT sector revenue, excluding hardware, would be $52bn for the year to March, of which $40.3bn would be from outsourcing services to other countries.
> 
> "While we are optimistic for the future, we need to be vigilant about how things are progressing," said Som Mittal, Nasscom president.
> 
> India's IT outsourcing sector, one of the pillars of its recent economic boom, is coming under increasing pressure from domestic wage inflation, higher real estate costs and a stronger rupee.
> 
> The industry, which provides services from managing a client's computer systems to processing a foreign bank's mortgage applications, is bracing for a slowdown in its main customer base, the US financial sector.
> 
> But Mr Mittal said India's outsourcing industry was holding up well and was on track to meet its forecasts of $60bn in software and services export revenue by 2010.



Are you sure?? Cool man....IT is proving to be more resilient than I expected!


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## Bushroda

*India's new status symbol: a nation hits the bottle*
*As India's economy grows, the middle class is hunting for the latest ways to flaunt its affluence. Andrew Buncombe reports from Delhi on the growing popularity of the grape in a nation more famous for its tea*


*A guest sips wine at the Chateau Indage Chantilli wine festival in Mumbai in 2005*

Andrew Buncombe 
Independent, UK
Tuesday, 12 February 2008

By the flickering light of the restaurant's candles, suspicious particles seemed to be floating in the wine the waiter had just poured. It was hardly an auspicious start to the evening. 

But in an instant came the explanation. There was nothing wrong with the wine; these were pure flakes of 24-carat gold added to the Californian chardonnay by the manufacturer simply for additional "wow factor". And it worked. The group of well-dressed men and women laughed and smiled and lifted their glasses towards the light, better to see the wine sparkle.

In India, wine is being drunk as never before. This year, as for the past half-dozen years, sales are expected to increase by at least 35 per cent and perhaps even more. Partly fuelled by India's newly buoyant consumerism and partly by the increasing numbers of people travelling abroad for business or holidays, wine has rapidly become the latest symbol of affluence and supposed sophistication for the country's newly wealthy middle-classes. Like carrying the right handbag or driving an elegant car, nothing says "I've arrived" better than to be seen swirling a glass of wine.

Of course, there are plenty of people who actually enjoy the stuff. Across the country, wine clubs are being set up, tastings are being organised by some of the world's leading producers and India's own wine industry is starting to make a handful of vintages that can compete with international competition. In the past decade, the number of Indian vineyards has grown from no more than half a dozen to about 50, concentrated mainly in the Nashik region of Maharastra, 120 miles from Mumbai. 

"The wine market is booming," said Kapil Grover, owner of Grover Vineyards, one India's oldest and most respected producers, whose French-imported vines grow at elevation at Nandi Hills near Bangalore in southern India. "I'm 52 and think we're going to see 30 to 35 per cent growth for the rest of my lifetime."

In India, the history of wine can be traced to the culture's oldest religious writings. The Yarjuveda &#8211; one of the four Indian Vedas or "knowledges" written in Sanskrit and believed to date from several centuries BC &#8211; tells how the Hindu gods Indra and Varuna drank a mixture of wine and herbs known as Somrasa. One line of the Yarjuveda reads: "Oh plants, it was Indra and Varuna who first drank the Somrasa. Having gratified him, now I partake of the oblational food with Somrasa." Yet despite the support of the gods, those promoting the spread of a genuine wine culture in India today face many hurdles. In a country where an estimated 77 per cent of India's population of 1.15 billion people survive on perhaps as little as 25p a day and where the gap between the rich and poor is increasing, the market for wine operates at the top of the economic pyramid. 

High taxes mean the cheapest bottle of ordinary or indifferent Indian wine costs 400 rupees (&#163;5). An imported bottle is considerably more. A poor labourer wishing for an instant anaesthetic to the rigours of his daily life can buy a small bottle of industrially made rum or whisky for a handful of coins. And he doesn't have to worry about flakes of gold.

That well-heeled group enjoying the so-called "gold wine" on a recent evening at a peaceful restaurant in the south of Delhi were typical of the people behind the surge in the growth of wine sales and for whom importers are furiously stepping up efforts to market their products. Middle-aged professionals at the higher levels of their jobs, many had first tasted wine when travelling abroad. Returning to India they had joined the Delhi Wine Circle to learn more about this discovery.

"We like to travel," said Shravani Dang, head of corporate communications for a leading Indian industrial conglomerate and a member of the circle for the past three years. "We were in Rome and we learnt a bit about wine. It's good to learn things such as pairing food and wines," "We had drunk wine before ... a few years ago we had a case of South American wine and we had a cheese and wine party. Nobody knew anything about it. People would ask, 'When are you bringing out the real drinks?'"

Another member, a woman who described herself as "mid-level management professional" in her 30s but declined to give her name, said she had been in the club for two years. She enjoyed trying the different wines and meeting people who furnished interesting conversation. "I joined because it seemed like the club had interesting events," she said.

Anil and Reena Khana, said they had joined the club after their children sent them to France to celebrate their 30th wedding anniversary. They had found themselves touring the vineyards of Bordeaux and were instantly hooked. When they returned to India they signed up. "We wanted to learn more about wine and different wines. We just started to learn," said Mr Khana, a friendly business manager for a large Indian group. "It's really like a hobby."

The evening's dinner and tasting had started with the gold wines from the 100 Acres label in the Napa Valley, a chardonnay and viognier blend and a ros&#233;, and rapidly progressed to several wines from the Australian producer Buller. There were two different chardonnays, a shiraz, a merlot and finally a 2005 cabernet merlot blend.

Members munched their way through mozzarella salad, a vegetable risotto, a series of main courses which included the rare delight &#8211; in Hindu-majority India &#8211; of seared beef tenderloin, and finished off with an apple tart. The evening concluded with a mulled red wine that did not appear to be the toast of the night. 

Even among the country's wealthy set, wine still encounters opposition from those who prefer India's drink of choice - Scotch whisky. Tusha Gupta, an interior designer, said it was taking time to break down prejudice against wine. "You go to a party and people still don't like to have wine," she said. "People believe it's women who will have a glass. They'll have a cocktail or a whisky."

Indeed, despite the headline figure of 35 per cent year on year growth, India's wine consumption remains tiny. The country's sales of about 1.2 million cases of wine equates to just a teaspoon per person. At the other end of the scale, the thirsty French drink 55 litres per person every year. But a more telling comparison may be with China, so often listed with India as a superpower of the future. There the annual per capita consumption of wine is a glass. In terms of sales, China may also be ahead of its rival and neighbour.

Robert Joseph, the British wine writer and founder of the International Wine Challenge, said to be the world's biggest competition, said India was not progressing as quickly as some people might like to think. He said: "I've been running wine competitions in the emerging markets &#8211; Singapore, China, Japan, Thailand, Russia, Vietnam, etc &#8211; since 1997. Over that time, I've been watching India with great interest, and a certain degree of impatience. Compared to China, the development of a wine-drinking culture has been slow and India remains way behind in consumption."

Mr Joseph said improvements in India's wine production had also been made in the past five years, largely as a result of efforts by the Grover and Sula vineyards. But Indian wine producers retained a reverence to French labels when the new techniques they ought to be utilising were being developed by New World producers, in particular the Australians.

"Grover and Sula ... have produced world-class wines," he added. "But the best of these wineries' efforts are the exceptions to the rule. No other Indian winery is yet making wine that would stand comparison with successful efforts from Europe or the New World, though many Indian examples are far better than plenty of unsuccessful efforts from Europe."

But those in the trade in India are adamant that the tide is turning. Three years ago, publisher Reva Singh started a wine newsletter that was sent out to a small group of subscribers. Now Sommelier India, the country's only magazine devoted to wine, is a grown-up, bi-monthly glossy on sale at selected stores. Subscriptions for the magazine, which contains news and features on both Indian and imported wine, she says, are up by 25 per cent on last year. "Things are changing. People are becoming increasingly sophisticated with wine and want to learn more about it. When we started, people perceived drinking wine as being trendy. Many men preferred to drink Scotch. Now it has got to where people are asking questions."

Another optimist is Subash Arora, the irrepressibly enthusiastic president of the Delhi Wine Circle and publisher of an online newsletter. He is responsible for the 20 or so wine dinners and tastings held by the club every year. Mr Arora is more than aware of the challenge he faces. He knows the sale of whisky and beer outstrip that of wine more than a hundred-fold; he knows too that wine is a product only a tiny fraction of Indians could ever hope to afford.

And yet he is convinced that the momentum is on his side. At the recent tasting in Delhi, as people began to wander away, Mr Arora lingered to explain more about his enthusiasm. Standing with a half-glass of ruby-coloured Australian wine, he said: "This is more than just my hobby, it's my passion."


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## Bushroda

Stealth Assassin said:


> Are you sure?? Cool man....IT is proving to be more resilient than I expected!



The Nasscom-McKinsey Report 2005 stated that Indian IT export would garner $60 bln by 2010. There is absolutely no reason why IT exports cannot grow by 22&#37; in dollar terms although the cash earnings have taken a beating due to rise in rupee value but that would have no effect on dollar earnings.

Here is the link

*NASSCOM-Mckinsey Report 2005*



> "Our research suggests that the total addressable market for global offshoring is approximately $300 billion, of which $110 billion will be offshored by 2010. India has the potential to capture more than 50 per cent of this opportunity and generate export revenues of approximately $60 billion by growing at 25 per cent year-on-year till 2010."


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## Bushroda

*With strong Rupee, exporters see a win-win situation*
Tuesday February 12 2008 00:10 IST 
K S NARAYANAN

NEW DELHI: Assocham had revealed that strong rupee will bring in rich dividends for India Inc in the long run. In a study titled `Impact of rupee appreciation of India's exports vis-à-vis economy', Assocham pointed out that profit margins would be between 12-15 per cent in the long run as exporters are bringing in new technologies with cheaper imports for expanding their existing capacities.

The balanced view of rupee getting stronger is that it has already reduced costs of imports and encouraged domestic manufacturing with technological upgradation. As a result, capacity expansions of India Inc are moving on faster speed which will make exports much more competitive for developing economies, said Assocham President Venugopal N Dhoot.

The sectors that are likely to gain with rupee becoming stronger include petro and petro products by 77.18 per cent, engineering goods (21.55 pc), gems and jewellery (92.44 pc), drugs and pharmaceuticals (19.41 pc) as these have imported inputs, Dhoot observed.

Dhoot said the major impact of rupee appreciation so far has been on agro and food processing (11.73 pc), auto and auto components (13.54 pc), leather and leather products (15.66 pc), cotton textiles (3 pc), and apparel sector (10.11 pc). 

The other sectors on which rupee appreciation so far had moderate impact included drugs & pharmaceuticals with 91.4 per cent imported inputs and engineering goods that had 21.55 per cent imported inputs.

The Assocham paper holds the view that if companies are able to expand, their capacities in the rupee appreciating scenario, they would in the long run, definitely be in a win-win situation because demand or Indian products in developed countries is not going to slow down. India Inc would be able to export more at very competitive prices as a result of capacity building through technological advancement and increase its margins by 10-15 per cent.


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## Bushroda

*Would you buy a $22,000 diesel pickup from India's Mahindra?*
Feb 12 12:24 PM 
by Rory Jurnecka







Indian automaker Mahindra & Mahindra Ltd has big plans to break the U.S. market, and plans to introduce a two- and four-door pickup stateside by summer 2009. We've reported on Mahindra's goals before, but recent reports from pickuptruck.com and Automotive News fill in a few details we didn't have previously.

The pickup, dubbed Appalachian and said to be comparable in size to a Toyota Tacoma, will be powered by a Bosch-developed 2.2-liter four-cylinder diesel engine making around 145 horsepower and 300 lb-ft of torque, although final performance numbers have not been released. We're a little concerned about using this engine stateside, as it is based on Bosch diesel technology that is untested in the U.S., and it has yet to pass Bin 5 diesel emissions standards and therefore cannot be sold in eight states (inlcuding California and New York).

Mahindra says the truck will be available in two- or four-wheel drive, come standard with a paddle-shift six-speed automatic transmission, and feature a U.S.-designed interior. Fuel economy is said to be in the 30 to 35 mpg range, while the Appalachian's 7.5-foot cargo box will have a payload capacity of about 1.3 tons (2,600 lbs). It will be based on the Scorpio SUV, a vehicle that currently sells in India and is similar to a Ford Explorer dimension-wise. 

Mahindra has also announced that a diesel hybrid powertrain is also slated for the same pickup truck in 2010. Should the truck proceed according to schedule, it could be the first diesel-hybrid pickup to be sold in the U.S. The diesel-hybrid version is likely to cost "several thousand more" than the diesel-only Appalachian. Plans are also underway to bring the Scorpio SUV and potentially a crossover to the global market as well.

Approximately 300 dealers have reportedly been enlisted to sell Mahindra Appalachians if they get to our shores, and an initial production date of March 15, 2009 has reportedly been set -- though with no emissions or crash testing underway, that seems a little optimistic. Final assembly of the Appalachian will be conducted in Ohio to avoid 25-percent federal import tariffs, but despite that cost-saving measure, the base price of the Appalachian will reside around $22,000 according to Global Vehicles, the U.S. importer for Mahindra. 

Global says that the Appalachian represents a truck costing twice as much, but that remains to be seen. In any case, will an Indian-built pickup truck ever crack the U.S. market? From where we stand, the Appalachian may offer a multi-thousand dollar savings in the mid-size truck segment, but will serious buyers care? Just how much of a value does Mahindra have to offer the Appalachian at for buyers to care?


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## Bushroda

*India Feeling Growing Pains*
Oxford Analytica 
FORBES, NY
02.12.08, 6:00 AM ET

Indian power producer Reliance Power's $3 billion initial public offering last month was India's largest, but market sentiment has since fallen. The Bombay Stock Exchange closed down around 5% Monday to its lowest level in weeks. Volatile market conditions have coincided with a slowdown in growth, as questions are raised about the effect of global economic problems. 

Prior to the annual budget, to be read Feb. 29, the government last week estimated that gross domestic product growth in fiscal 2007-08 (ending in March) will slow to 8.7%. The decline, from 9.6% in 2006-07, was particularly sharp in the second half. Growth was 9.2% in the first quarter and 8.9% in the second. 

Credit conditions. The main brunt of the slowdown has been borne by consumer goods manufacturing, where growth has halved to 5.2% in the last few months. Certain industries, especially in durables, have posted negative growth. The consumer-goods manufacturing problems reflect an awkward combination of inflationary and currency pressures, which have led to higher interest rates and weakening international competitiveness. 

Despite government efforts to cushion them, food and energy prices have been on an upward spiral. Also, greatly increased foreign currency inflows have threatened to leak into the domestic economy. As a result, the Reserve Bank of India has been steadily tightening credit markets since July, with noticeable effects on interest rates and consumption.

A second difficulty has come from the depreciation of the dollar against the rupee. The latter has risen in value by 14% over the last year, squeezing export earnings. The dollar volume of Indian exports has kept up reasonably well, posting a 16% increase in the third quarter of 2007-08. However, in rupee terms, this represents growth of just 2%.

*Slowdown impact.* The decline in performance from the consumer goods sector poses problems in two other respects: 

--In the last three years, it has played a key role expanding employment and reversing a situation--characteristic of the early phases of "liberalization"--marked by "jobless growth." 

--Its expansion has helped boost revenues by promoting collections of indirect taxes. 

*Brighter spots.* Nonetheless, the broad outlook for the economy remains reasonably optimistic:

--The industrial sector provides only 25% of total GDP, and, within it, consumer goods manufacturing is responsible for barely half of output. 

--Capital goods and core sector industries have been enjoying a boom led by a rapidly rising rate of investment. 

--Since 2003-04, the rate of investment has risen from 28% to 36.3% of GDP--with the development of expansive infrastructure programs in transport, power and telecommunications. 

--A number of capital goods industries are expected to post growth rates of 20% in 2007-08--helping sustain the overall industrial growth rate at a respectable 9.7%, compared with 10.9% in 2006-07.


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## Bushroda

*Indian industry solid but strong rupee risk for exports - Moody's Economy.com*
02.12.08, 5:33 AM ET

MUMBAI (Thomson Financial) - Moody's Economy.com said while a rebound in India's production growth suggests that the industrial sector remains in a solid shape despite recent slowdown in trade, the strong rupee remains a risk to the country's export sector.

The ratings agency said India's industrial output was up 7.6 pct year-on-year in December, following a growth of 5.1 pct in the previous month, adding manufacturing growth in the final month of 2007 came in stronger than what the ratings agency had expected.

Moody's (nyse: MCO - news - people ) Economy.com noted that solid production activity will continue to fuel economic expansion in India. For the nine months to December, India's industrial production rose 9 pct compared to the same period last year. 

However, a further slowdown in trade will have a downside impact on the emerging economy's industrial production, the ratings agency cautioned. Weaker US consumption will lead to a fall in external demand for Indian products which will subsequently weigh on manufacturing growth, Moody's Economy.com noted. 

If trade between India and China improves, the countries will better withstand a potential US-led global economic downturn, the release added.


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## Bushroda

*Real Estate Spearheads Indian Economy*
*Developments in the Indian real estate sector symbolize the changing face of nation.* 

George Gonigal
Feb 12, 2008 05:49:51 

(PRLog.Org)  Feb 12, 2008  Developments in the Indian real estate sector symbolize the changing face of nation and it is a reflection of the growth in the Indian economy brought about by high rates of GDP and also by India's integration with the global economy, said Kamal Nath, Union Minister of Commerce and Industry. He was speaking at the "National Convention 'NATCON 2008': Real Estate for All" organised by the Confederation of Real Estate Developer's Association of India (CREDAI). He also stated that in the recent years, services sector, real estate sector in particular, has been the main driving engine of Indian economy's growth. 

"With the economy on an upswing, the emphasis and requirement today is on creating international standard infrastructure and residential real estate to sustain the growth rate projected in the 11th Five Year Plan. The real estate sector in India has the capacity to manage growth by itself without straining Government resources," he stated. The Minister further stated that we have already opened construction development sector for FDI and the policy permits wholly owned subsidiary in this sector in India by a foreign company. "Of course, there are conditions regarding minimum area for real estate development and minimum capitalization to be brought in by the foreign investor. A number of global players have entered the Indian market and many more have shown interest. Growth and investment have also created opportunities for investment in real estate sector, he said. 

"While the role of the Government is expected to be primarily as a facilitator to the development process, the private sector participation is aimed at bringing technical and managerial expertise in delivering good quality mass housing projects. It is a good sign that many State governments are joining hands with private entrepreneurs in resolving the acute scarcity of residential real estate in urban areas. The private sector and Government has to work in tandem towards a common goal. It is equally important to address the institutional and regulatory aspects as well as strengthen and expand the capacity of financing institutions for further growth of the sector," Nath said.


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## Bushroda

*Memo from India*
by Roger Cranville, Pittsburgh Regional Alliance
Pittsburgh Business Times
Tuesday, February 12, 2008

A delegation from the Pittsburgh regional business, civic and economic development community has embarked on a weeklong business trade mission to India organized by the Pittsburgh Regional Alliance, an affiliate of the Allegheny Conference on Community Development. While in India, PRA Senior Vice President of Global Marketing Roger Cranville is writing this mission diary for the Pittsburgh Business Times.

*This dispatch was filed Monday, February 11, 2008.*

Today was the delegation's first day of business. Four hours of meetings were surrounded by five hours of travel to cover about 50 miles. The congestion and chaos on Bangalore's overcrowded roads, which are too narrow for the high volume of bicycle, motorbike, car and truck traffic, is amazing. 

Both meetings today confirmed that the infrastructure was creaking under the vibrancy of the economic boom in India. From the layman's point of view, old and young, rich and poor, and others seem to have a sense of urgency about them. The roads and the people are immensely busy. The vibrancy is contagious. More than half - about 60 percent of the 1.1 million Indian population - is under 30. Eight million motorcycles hit the Indian highways each year; 1.7 million of those are Honda Heroes made in India. 

From the economist's perspective, there's no wonder it's so vibrant. From 1950 to 1991, the Indian economy grew at 3 percent per year on average. Since then, it has been zooming along at plus 8 percent to 10 percent every year. 

In the mid-1990s, Kennametal India Limited (KIL) acquired WIDIA and took advantage of the 1991 foreign investment liberalization in India. Slogan wise, KIL reckons to be "making the tools that shape the world" or "engineering your competitive edge." It's been a good day for slogans! 

We received a very warm welcome from KIL's senior management team after the first 100-minute journey of the day. KIL is very successful in India and reaping the benefits of establishing early and riding the crest of the economic boom for their cutting tools. The auto market is strong for KIL and strong for India with a balance of homegrown and foreign auto manufacturers supplying the newly wealthy 300 million Indians (give or take 50 million). India is now the fifth-largest automaker in the world. In India, you start walking, and then you take the bus. Next you ride a bike without an engine, then a bike with an engine. After that, it's a modest car and then a less-modest car. There's not a Hummer in sight and very few gas-guzzlers, too. 

KIL is looking forward to a boom in the aeronautics, construction (all that infrastructure) and mining sectors as the economy keeps on roaring. Pollution is nowhere near as bad as in China; legislation, regulation and enforcement are working in India, the largest democracy in the world. 

The rule of law has been established over a century or two and India is a relatively safe place to work, live and play, said our KIL host. A publicly traded company in India, KIL has a beautiful campus in Bangalore and nine regional sales offices and service centers across the country, taking good care of clients. 

Nearly 1,000 Indian employees contribute to KIL's $87 million in annual revenue, predicted to grow in this fiscal year to around $100 million. With 50 percent of that revenue from automotive alone and new markets for KIL's products also revving up, the atmosphere on the KIL campus is almost as vibrant as the road outside. 

Nearly two hours later, after hitting the road, we reach iGate and the iGate campus, with more than 3,000 employees, all of whom look way too young to be driving one of the most successful IT service companies in India. We heard a similarly optimistic view of India from two of iGate's senior executives. 

"iGate Global Solutions enables clients to optimize their business through a combination of process investment strategies, technology leverage and business process outsourcing and provisioning," according to iGATE Corporation. The most impressive sight is the hustle and bustle on the university-style campus, of course, which seems to fit with the youthfulness of the iGate staff. And motivation does not seem to be a challenge 

We missed by just a few minutes the Monday morning iGate band that played to welcome the new iGate recruits for the week. Veteran employees also enjoy the free music between their stints of software development or maintenance, remote management of IT services, or process outsourcing. Camp(us) iGate is one heck of a place! 

An insightful day concluded with the obligatory one-hour journey to cover 10 miles. 

Consensus on the day was that India's assets include its highly skilled and professional, English-speaking work force. Smaller companies are flourishing, professional services abound and intellectual property is well protected by the established legal structure. 

What's more, India enjoys vibrant capital markets. The country's strengths include its large manufacturing capacity, a market of 300 million (and growing) consumers, and excellent communications and media availability. Among the challenges, India has some concerns that include infrastructure, regional imbalances of wealth, education and healthcare. 

So what are the opportunities for Pittsburgh? Well, 300 million consumers for one thing; massive investment in infrastructure; and all the energy, environmental and green building technologies we can muster. And don't forget, India is now in the trillion-dollar GDP club. The pretenders to the U.S. economic prowess of the 1900s are not pretending anymore! Engage or watch?


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## Neo

*Sistema to invest in India real estate, tech sectors ​* 
Wednesday, February 13, 2008

NEW DELHI: Russian services conglomerate Sistema is looking to invest in Indias telecoms, real estate, microelectronics, tourism and mass media sectors, the firms chief executive said on Tuesday.

It also plans to invest between $4 billion and $7 billion to expand its Indian telecoms unit Shyam Telelink, and will raise its stake in the firm within two years, Alexander Goncharuk told reporters at a conference in the Indian capital.

Sistema, whose key asset is Russias top mobile phone operator Mobile TeleSystems, purchased a 51 per cent stake in Shyam for $58.1 million in 2007. It has an option to raise that to 74 per cent, the maximum allowed under Indian law.

Shyam Telelink currently provided CDMA services in the western Indian state of Rajasthan, and in January received licences to offer services in the remaining 21 zones of the worlds fastest-growing telecoms market.

India is a strategic market for Sistema. Besides telecoms and real estate, the next direction is high-tech, Goncharuk said, referring to its microelectronics firm Sitronics. The firm will bring its real-estate business Sistema-Hals to India, and will look at opportunities around the national capital of New Delhi, Goncharuk said.

We might have partners (for real estate), but we have not decided, he said, adding that Sistema was open to acquiring firms to grow once it began operations. Goncharuk declined to say when Sistema would introduce to India the rest of its diversified portfolio, including Sitronics, saying the details would be announced later.

To fund its investments worldwide, the firm will borrow $10 billion, Chairman Vladimir Evtushenkov said. It (the investment) will be in different fields, he said, but declined to provide a breakdown.

Goncharuk said he was confident Sistema would be able to raise the amount despite turmoil in financial markets. The Sistema group, which has a market capitalisation of about $16 billion, includes Sitronics, Sistema-Hals, Moscow Bank for Reconstruction and Development, former Soviet travel agency Intourist and childrens goods retailer Detsky Mir.

But close to three-quarters of the $9.6 billion of revenue it earned in the first nine months of fiscal 2007 came from its telecoms units, which comprise MTS and fixed-line operators Comstar and MGTS. 

Sistema to invest in India real estate, tech sectors


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## Neo

*Indias industry output falls​*
1NEW DELHI, Feb 12: Indias industrial output grew by 7.6 per cent in December, far below last years double-digit expansion, data showed on Tuesday, as the finance minister called for easier credit to spur the economy.

The industrial growth in Asias third-largest economy was up from Novembers revised figure of 5.1 per cent but sharply down from the 13.4 per cent expansion logged in December 2006, the official figures showed.Nine interest rate hikes since 2004 to tame inflation have slowed demand for consumer goods and dampened industrial growth.

There has been a slowing down of credit growth that has to some extent affected the flow of credit in the housing and consumer durables sector, Finance Minister P. Chidambaram said after meeting heads of state-run banks.

Chidambaram said he pressed state-run banks to focus on credit delivery to ensure enough loan funds for home-buyers and people who want to purchase consumer goods.

At the same time, he said banks should not ignore credit quality, mindful of the subprime debt crisis that has engulfed the United States.

Indias industry output falls -DAWN - Business; February 13, 2008


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## Bushroda

*Booming Indian tech sector expects further growth* 
Tim Ferguson 
ZDNet, UK
14 Feb 2008

The Indian technology industry is expected to generate around $64bn (£32bn) in revenues in 2008  33 percent growth  making a significant impact on the country's economy.

Services and software exports are expected to contribute around $41bn, with the domestic market generating more than $23bn, according to Indian technology industry body, Nasscom.

*The Indian technology industry is aiming to hit total revenues for software and services of $75bn by 2010.*

But Nasscom's 2008 Strategic Review shows the growth of the industry has had other benefits besides lining the pockets of India's mega-corporations.

As a proportion of national GDP the Indian technology sector will hit 5.5 percent in 2008, up from just 1.2 percent in 1998. It is also expected to contribute a net value to the economy of up to 3.9 percent.

The Nasscom study found the industry has also fuelled a 36 percent increase in direct exports and boosted direct employment by a compound annual growth rate of 26 percent over the past decade.

And, by the end of the 2008 financial year, almost two million Indian workers will be employed in the technology industry.

The industry has also contributed to an increase in consumer spending  for every rupee earned by the Indian technology-business process outsourcing (BPO) industry, an additional rupee is spent in the economy.

The influence of the sector on other parts of Indian life is also felt through contributions to community initiatives, human-resource development, education, health and empowerment in business.

The technology industry has also fuelled the growth of private-equity and venture-capitalism funding and spurred entrepreneurship.

Som Mittal, Nasscom's president, said the industry is on track to exceed its 2010 targets but still needs to resolve issues around talent, manpower and infrastructure.

Nasscom chairman Lakshmi Narayanan said the increase in revenues "reinforces the confidence of global corporations in India".

Narayanan, also vice-chairman of Cognizant, said the Indian IT-BPO industry is poised for broad-based growth, strengthening its position as "the primary sourcing location" for software, IT infrastructure and business process-related services.


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## Bushroda

*Cyprus running the risk of missing out on Indias expected economic boom* 
By Stefanos Evripidou
Cyprus Mail
15 Feb 2008

A PENDING tax agreement between India and Cyprus could have an adverse affect on the islands status as an international financial centre, jeopardising the investment of millions of euros in the fast emerging Indian economy, industry sources warned yesterday.

The two countries are currently in the process of signing a new double taxation treaty to replace the old one. As the saying goes, the devil is in the detail, and in this case foreign investors sitting on millions of dollars are keen to hear what the devil has to say.

The treaty has yet to be signed though reports in the Indian press suggest the agreement will favour the Indian tax authorities who wish to see capital gains tax levied against a Cypriot-based company or individual selling its shares in an Indian company.

The Finance Ministry yesterday was quick to point out that nothing had been signed yet.

The whole agreement is under examination by the Legal Service. We didnt sign anything yet, which means the 1994 tax agreement is still in place said a ministry source. 

The same official noted that India wanted to renegotiate its double taxation agreements with all countries, not just Cyprus. It is equally important for Cyprus as a financial centre to see what India does with countries competing with Cyprus for foreign investment, like the Netherlands and Mauritius.

Financial analysts warn that the treaty has the potential to derail Cyprus as a launching pad for investment in one of the worlds most booming economies. 

India, China, Russia and Brazil are the four major emerging economies, what we call brick economies. They are the up and coming superpowers of the world, said one source in the auditing industry.

According to the financial analyst, Brazil is too far away historically and geographically for Cyprus to have a meaningful input in the country. Russia already plays a great role in the islands economy through the many Cyprus-based companies investing in the ex-Soviet state, making Cyprus the third biggest investor in Russia. China has yet to attract a lot of foreign direct investment (FDI) as investors are still concerned about its controlled economy.

The country thats really hot in international structuring and attracting FDI right now is India. The current tax treaty we have with them is brilliant. Lots of people are saying India can become a second Russia for Cyprus, he said.

According to another industry source, there is over one billion dollars currently either being invested through Cyprus into India or in the pipeline for investment. This investment could hang in the balance if the terms of the new tax treaty are seen as unfavourable to Cyprus-based investors.

A recent article in Indian paper The Economic Times reported that the deal was almost done and that the exemption on capital gains tax would be done away with. The news was met with great concern within the finance industry. 

At the same time, a report in the Mauritius LExpress on Tuesday stated that the Indian and Mauritius governments had decided not to amend their current tax treaty for the time being.

The objective is to be a destination for investment in this emerging economy. People with investments in the pipeline are holding them back right now and waiting. If the Mauritius keeps its old tax treaty, I do not believe our government will accept that we would have to change ours. This would simply mean a shifting of investment into India through Mauritius rather than Cyprus. I believe the authorities will seek to negotiate more on this, said the source.

The auditing analyst said that the preliminary agreement yet to be signed with India went against the model provisions of the Organisation for Economic Co-operation and Development (OECD).

The OECD issued a model for double taxation agreements as a starting point. India wants Cyprus to deviate from the model in many areas, making provisions that are negative for Cyprus, said the source.

For example, having the right to charge capital gains tax goes against the OECD model. This means all gains in disposable shares can and will be taxed by India. Foreign investors setting up in Cyprus will be taxed when buying and selling shares in India. A lot of money could be channelled through Cyprus for these activities. Companies are already rethinking investments. Its the potential that were missing out on. 

The source referred to other dealings with third countries that resulted in a more negative framework for investment abroad.

We could have negotiated much better terms in the new tax agreement with Ukraine, like the Netherlands did. And what about being put on the Russian tax black list last year. We got it wrong big time there. If it continues like this, government action will slowly but surely destroy Cyprus as an international financial centre.


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## Bushroda

*India not ready to slow down* 
Malaysia Sun
Friday 15th February, 2008 

Indian Planning Commission Deputy Chairman Montek Singh Ahluwalia, has said that any slowdown in the world economy would not have much impact on India.

At the annual general meeting of the Federation of Indian Chambers of Commerce and Industry, he said that any slowdown in the world economy would not slow the growth rate of India's economy by more than half a percent. 

In the worst case, he said, the percentage could be one percent.

With a growth rate of 8-9 percent, Ahluwalia said, the Indian economy was on a stronger footing, but underlined the need of institutional development in the finance and agriculture sectors.

Ahluwalia said that agriculture would have an important role in the country's overall economic growth with the focus on multiple products.

Given the scope for the private sector role in agriculture, Ahluwalia said, the government should actively involve itself in managing perishable agro-products.

He said India should diversify agriculture on a large scale and consider contract farming.


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## Bushroda

*Memo from India - Day 3*
by Roger Cranville, Pittsburgh Regional Alliance
Pittsburgh Business Times

_*A delegation from the Pittsburgh regional business, civic and economic development community has embarked on a weeklong business trade mission to India organized by the Pittsburgh Regional Alliance, an affiliate of the Allegheny Conference on Community Development. While in India, PRA Senior Vice President of Global Marketing Roger Cranville is writing this mission diary for the Pittsburgh Business Times.*_

This dispatch was filed Thursday, Feb. 14 

Summarizing the view of the group thus far, the Indian economy is booming (9 percent growth per annum), business is profitable (one person told us today that businesses in India are returning on average 20 percent profit margins), and the infrastructure is creaking. All of this adds up to opportunity, opportunity, and opportunity for companies in the Pittsburgh region. 

It is hard to get your arms around what is happening in India -- the growth is so phenomenal you can almost taste and feel it. As someone said today -- "companies must have an India and a China strategy these days or they are going to miss out on a great business opportunity." Indian companies are ready to team up with U.S. companies if it gives them some advantage in the market. And with 350 million "customers," India is a viable and growing market for quality U.S. goods and services. 

Bangalore has returned to its normal low humidity and perfect temperature of low- to mid-70s today. The traffic was also kinder than yesterday, helped by the road being finished as we went south, so to speak. Slogans yesterday, statistics today -- lots of statistics. Here are a few to make you think: 

_ 260 million mobile phones in India growing by 8 million per month
_ 14 million houses being built by 2010
_ India will be the fourth-largest global economy by 2025
_ 350,000 technical graduates per year
_ 1.6 million jobs in IT/Business Process Outsourcing (BPO)
_ IBM and Accenture are the largest two IT/BPO companies in India
_ IBM makes one new hire every eight minutes in India
_ Per capita income is approximately $850 per year
_ 2 percent of the population pays income tax (34 percent)
_ $450 billion being spent on infrastructure by 2012


The day was spent with KPMG, Infosys (quite a campus experience), a hospital visit, and with Feedback Consulting (a group that knows Pittsburgh and stands by to assist Pittsburgh companies with their India strategies). 

KPMG Bangalore fielded a team of three to brief the Pittsburgh group and focused in on our region's opportunity with India. Here are a few highlights: 

_ By 2035, demand in India is expected to exceed the United States.
_ New foreign direct investment and homegrown companies are powerful allies expanding the India economy.
_ Special Economic Zone's are fueling growth in telecom, financial services and IT. _ The Indian government plans to spend $250 billion (of the $450 billion infrastructure spend) on energy by 2012.


This represents a good opportunity for the Pittsburgh region. State electricity boards are still wrestling with 32 percent "leakage" or, in other words, illegal tapping of kilowatt hours by those who feel electricity should be free. 

_ India is building 10 new cities, where public private partnerships will be core to the final product.
_ A global economic slowdown will have 1-2 percent impact on this economic ship going at full speed ahead. 

And five major global risks for India were identified as: Global Weather Change, HIV/TB, contaminated water resources, oil price shocks, and terrorism. 

While most of us were at KPMG, Girish Godbole of UBICS Inc. and TiE Pittsburgh (our region's chapter of a global not-for-profit network dedicated to the advancement of entrepreneurship) and John Denny of The Hillman Co. ventured out to explore India's healthcare sector. They visited a new, 1,000-bed private hospital specializing in cardiac care -- Narayana Hrudayalaya (which means House of Heart). The hospital performs 30 open-heart surgeries a day, with an emphasis on children. 

The brainstorm of Dr. Devi Shetty, a pioneer in India's thriving telemedicine market, Narayana Hrudayalaya is only one of what will eventually be five specialty hospital campuses dubbed 'Health City' in Bangalore. The campuses will provide up to 5,000 beds. According to Dr. Shetty, "we need to build the healthcare delivery infrastructure first in India, then all else will fall into place." He has already built an eye hospital and will soon complete the cancer hospital. 

Of particular interest to Pittsburgh should be Dr. Shetty's next hospital, dedicated to women and children. This 500-bed hospital will be led by Dr. Ashley D'Cruz, with whom Girish and John met during their visit. In a country that has 29 million births a year, a woman and children's hospital is desperately needed. 

Committing to a high-growth, long-term investing partnership with India, Pittsburgh hospitals could gain a strong foothold in a large and fast growing market. 

Later in the day, the group moved on to campus Infosys, a company that is sustaining 30 percent growth per annum. Future sustained growth is hampered by the availability of talent (Or is it the growing competition for talent?) despite 75 million graduates per year. Touring the campus -- one of 14 that Infosys has in nine Indian cities -- by deluxe, eight-seater golf cart is more like a drive through a futuristic movie set than a modern day workplace. 

Like iGate, the band strikes up weekly and these high-energy employees are given every reason to stay put and not go home. The 44 hour minimum work week and all modern conveniences, from shopping to banking, a hotel and entertainment (the convention center is under construction) see to it that going home is almost unnecessary. 

It's been an enlightening week so far with so much to take in and so many opportunities to take back home and share with businesses in the Pittsburgh region. 

Enough for one day, more to come tomorrow ...


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## Bushroda

*A centipede morphs into a fast car*
S Gangadharan 
Saturday, February 16, 2008 04:46 IST 

_Thanks to the reforms, the economy continues to grow in leaps and bounds_

The Indian economy, which resembled a centipede with arthritis till the advent of reforms  slow-moving, underperforming and swearing by the public sector as the panacea for all the ills plaguing the country  is now a star performer.

Signs of dynamism are everywhere, the essence of which is mirrored in the sustained high rate of economic growth. Indeed, when the advance estimates for 2007-08 indicated a real GDP growth of 8.7%, critics flayed the government for this poor showing. So much for a nation that was once derisively condemned to experience what Prof Raj Krishna has called the Hindu rate of growth. 

Clearly, we have arrived at a stage of development when what is good is not deemed good enough and like Oliver Twist, we want something more.

Under the reforms, a totally radical set of policies was set in motion. The revolution of rising expectations, which four decades of planning had promised but did not quite deliver, now seems to be on track to bettering the lot of the masses, unleashing the springs of enterprise and to greater integration with the rest of the world.

Since the reform era set in motion, after a good 40 years of missed opportunities, the nations balance sheet has more credits than debit entries.

There are various strands to this saga of transformation. The first shot was fired at the dawn of the nineties.

The economy was opened up. The public sector was effectively dethroned and the private sector was to be in the vanguard of development. The regime of controls and the plethora of strangulating rules and regulations was progressively loosened. Death knell sounded for licence raj.

Thus, the economic crisis of mid-1991 galvanised the government and the old shibboleths were abandoned in favour of a more free order. The officialdom existed under the new dispensation to provide a facilitating environment and for enactment and enforcement of a broad regulatory framework under which the economy could work and function with a high degree of freedom and initiative. In retrospect, the economic reforms did much to usher in positive changes in the country.

At the financial sector, reforms matched those at the government level. The Reserve Bank of India went about in a no-nonsense fashion to implement the report of the first Narasimham Committee and later its second report. Public sector banks were made to conform to international norms and new banks in the private sector were allowed. Now, we have Universal banks rendering a multiplicity of functions. Indian banking truly underwent a second revolution, the first being when 14 banks were nationalised in 1969.

Indian stock markets were once described as those created by the brokers, for the brokers and of the brokers. This is no longer true. Trading volumes are enormous and online trading has become the norm. At the global level, economy was thrown open to foreign investment and the dominant hold of FERA was loosened so that overseas entities can set up shop here and even the sectors which were exclusively marked for the government were opened for private investment. 

True, there are problem areas like the moribund agriculture and the worrying fiscal situation. They need attention if reforms have to make a positive impact on the economy. In both, though, a strategy is in place and one hopes the results would soon ensue. 

In Industry, dynamism is the name of the game and competition the buzzword.

Of course, vestiges of control exist in sugar and petroleum, despite the promised transition to a deregulated regime in both.

Reforms have their plusses and minuses, but taking a holistic view, they have been a great success. They have helped shape a new vision of India the journey to which has begun. But, as always, we have miles to go. Every journey begins with the first step, goes a saying. This first step, as we have seen, is not tentative, though there is no denying that an arduous road lies ahead.


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## Bushroda

*India's average growth to continue at 9 pc: Ahluwalia*

New Delhi (PTI): The Planning Commission on Friday said the country's average growth during the current Eleventh Plan will continue to be around 9 per cent, but made it clear that Indian economy will not remain untouched by the global economic slowdown. 

"The Planning Commission's target is average 9 per cent growth during the 11th Plan period. Nothing that has been said so far takes this away from the realm of growth," Commission Deputy Chairman Montek Singh Ahluwalia said during an interactive meeting at FICCI here. 

Reacting to an assessment by the International Monetary Fund that the country's growth would hover around 8.2 per cent, he argued that IMF usually links global economy with the domestic one. "I don't think that 9 per cent growth suggested by the Planning Commission is altered." 

Ahluwalia reasoned that it would be utterly illogical to believe that Indian economy would remain insular if there was a meltdown in global economy saying "If global economy slowed down, then Indian economy will also slow down." 

Delving on the issue of slowdown in interest rate, he said it was the characteristic of a well managed economy that it should coast along at relatively stable interest rate. 

"It is not unusual for interest rate to be high in the short term. Our concern is not overnight rate, but what happens at longer term interest rates." 

He argued that it was important to develop a healthy financial system. "There is a clear sense of direction that we want development of bonds market on a priority basis," he said adding the Raghuraman Rajan Committee set up to suggest road-map for financial sector reforms is likely to submit its report within the next few months. 

Ahluwalia said agriculture sector grew by 4 per cent during the past three years in sharp contrast of less than 2 per cent during the past 7-8 years.


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## Bushroda

*Indian IT outsourcers look ahead*
*But Nasscom still can't escape the present*

By Richard Sykes
Silicon.com, UK
Thursday 14 February 2008

Indian outsourcing industry association Nasscom says it is focusing on the future. But that does not mean it can afford to ignore today's business issues, says Richard Sykes.

The Nasscom Leadership Forum is India's major annual gathering of the IT industry. This is my second visit - in February 2007 I learned that in this context leadership means Indian leadership of the wider world IT industry.

The event opened formally today, with a series of presentations by leading figures from the industry.

Already there is an underlying tension between the longer term, which is the focus of the day, and the shorter term - for a start the impact of a potential US recession that keeps creeping in.

2009 is Nasscom's 20th birthday. The young turks whose vision created Nasscom two decades ago are now the leaders of the businesses they built, including Infosys, TCS and HCL - all now global majors.

Ahead of the Leadership Forum, Nasscom released figures showing an expected 33 per cent growth in IT sector sales for the Indian industry to the end of March, to a total of $52bn - $40bn from exports of software and outsourcing services - and indicated all is on track for Nasscom's 2010 target of $60bn for exports of software and outsourcing services.

By 2010 the IT software and services sector will deliver 10 per cent of India's GDP. But that success emphasises how much of the Indian population still remains at the margin, barely registering on the conventional measures of GDP.

Still, Nandan Nilekani, co-chairman of Infosys, listed the impressive ways that technology has already transformed contemporary India. For example voting in elections is fully electronic throughout the country, financial services and capital markets are of a high quality and there is a nationwide railway reservations system in place that works.

He went on to set out an agenda for the coming decade that included a national facility for registering land, a unified system for identifying each Indian citizen electronically, and distribution channels that would reach every citizen, even in the most remote rural areas.

And APJ Abdul Kalam, the former president of India, set a vision of India's transformation from a global software powerhouse to a global knowledge systems powerhouse, at the heart of a global knowledge network devoted to driving the non-linear economic growth required to end global poverty within a generation.

And yet. A panel of three business leaders, Accenture COO Steve Rohleder, Satyam founder Ramalinga Raju and Cisco chief globalisation officer Wim Elfrink, were far more focused on the issues of today: performance delivery in turbulent markets, tackling issues of talent shortage and development and working with a genuinely global mindset.

The strong positioning of India in the global economy was articulated endlessly - but so was the reality of working with today's very real business challenges.


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## Bushroda

*A 'Little Japan' on 100 sq km in Gujarat*
14 Feb 2008, 0128 hrs IST,Rajiv Shah,TNN

GANDHINAGAR: A 'mini-Japan' may take shape in Gujarat soon. A high-level business delegation from the Japanese External Trade Organisation (JETRO), which visited Gujarat last week, has asked the state government to provide a vast area of 100 square kilometres, where the Japanese could build their own township. 

The land has been sought along the ambitious Delhi-Mumbai Industrial Corridor which the Japanese government is helping to build. 

"We have given them maps of the areas we can offer, so that they can have a closer look," a senior government official said after a meeting with nearly 40 top business executives who formed part of the delegation looking for opportunities along the DMIC. 

The request to provide land for an exclusive Japanese industrial township came from JETRO vice-executive chairman Sunichi Yamamoto. The idea first cropped up during Chief Minister Narendra Modi's visit to Japan in April 2007. 

Now, it has been left to the Gujarat Industrial Development Corporation (GIDC) to work out details of the township with JETRO. The Japanese will return soon with a finalised location. Major industries keen to set up their offices in the township include Toshiba, Sumitomo, Chisso, Fujitrans. 

The township will be primarily industrial and complete with residential complexes, medical, health and recreation facilities, restaurants, educational institutions. "Japanese companies will set up base here and will build the required infrastructure as per Japanese standards and requirements," the official said. 

The official further said there is a tendency among Japanese to live in a cluster and feel at home wherever they are in the world. A similar project had been taken up in Thailand which has proved to be a successful model. The aim would be to give families of Japanese executives and workers a distinct flavour so that they dont miss the environment back home. 

The township will come up in any of the special investment regions' (SIRs) corridors proposed for development in the DMIC - Ahmedabad-Dholera, Ankleshwar-Vadodara, Dahej-Bharuch and Mehsana-Palanpur.


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## Bushroda

*Tata: Master of the Gentle Approach*
*The Indian giant has found a way to acquire companies across the globeand still tread lightly *

by Manjeet Kripalani
Businessweek






*Tata¹s managers at the Tata Daewoo truck facility in Gunsan, South Korea Sungsu Cho / Atlas Press*

Ravi Kant was shocked. As head of commercial vehicles at India's Tata Motors (TTM), Kant had traveled to the Korean port city of Gunsan to examine the failing Daewoo conglomerate's truck division, which was being auctioned. When Kant asked a midlevel Daewoo manager which bidder he preferred, the Korean replied that a European suitor would best secure his company's future. "I realized we had to change our entire strategy," Kant recalls, "and tell the Koreans what Tata was about." 

Kant quickly put together a massive public-relations effort: Tata executives were enrolled in Korean language classes, company brochures were translated into Korean, and Tata began making presentations to employees, the local auto association chief, the mayor of Gunsan, officials in Seoul, even Korea's Prime Minister. If Tata were chosen, Kant's team explained, it would preserve jobs, build Daewoo into a major exporter, and blend the outfit seamlessly with the parent company. "Tata had done its homework in everything needed to do business here," says Chae Kwang Ok, chief executive of Tata Daewoo. The Indians won the auction, paying $102 million. 
Americans often associate takeovers with layoffs and factory closings. Tata, India's premier industrial group, with an expected $50 billion in sales this year, has a different way to mergemore strategic partner than vulture capitalist. 

It has applied this approach to $18 billion in overseas deals since 2000, when it acquired Tetley Tea for $400 million. After buying British and Italian engineering and design houses, tony American hotels, Asian and European steelmakers, and software companies around the globe, Tata now has 333,000 employees worldwide, 26% of them outside India. In the latest move, Tata Chemicals on Jan. 31 bought Wyoming's General Chemical Industrial Products, a leading producer of soda ash. And Tata is the front-runner in the bidding to buy Ford Motor's (F) Jaguar-Rover (F) operations for an estimated $1 billion. 

In all its deals, Tata has been careful to signal its respect for workers. While it chooses its targets carefully and doesn't do a lot of bottom-fishing, Tata is nonetheless unusual in that it hasn't laid off any workers or shuttered any facilities following its overseas acquisitions (though it has had layoffs at home in the past decade). "Tata buys companies overseas not to reduce costs but to improve [its own] capabilities," says Arun Maira, Boston Consulting Group's chairman in India. And Tata's Indian background has given it plenty of experience in managing a diverse workforce. Its employees in India come from various castes, religions, and ethnic origins and speak any of dozens of languages or dialects. 

With its overseas acquisitions, Tata typically leaves executives in place. Instead of dispatching legions of Indians to the new company, Tata sets up a joint management board, which decides on issues ranging from growth targets to the development of new talent. Working groups find common goals, and managers of the acquired company are asked to help smooth out any cultural differences. This approach takes time, says Philippe Varin, chief executive of Corus, which Tata Steel bought for $12 billion last year. But it allows Tata to stay focused on bigger strategic issues "without sweating the small stuff," Varin says. 

At Daewoo, Tata knew not to act like an occupation force. The company formed a joint board of directors, and Daewoo CEO Chae was given the freedom to keep running the business his way. Kant wanted two Tata executives to act as advisers. Chae welcomed them but insisted on incorporating them into his management team, with one caveat for the Indians: They had to shave their mustaches, as Koreans preferred a "clean" look. 

The Indians helped devise a strategy to expand Daewoo's product line and boost exports. "It's turned out to be a win-win situation," says Choi Jai Choon, a union leader there. While the company had been largely focused on its domestic market, the new Tata Daewoo accounts for two-thirds of Korea's heavy truck exports, up from 20% three years ago. Sales are expected to hit $670 million for the year ending in Marchmore than double their level before the takeover. That success, says Kim Ki Chan, an auto industry specialist at the Catholic University of Korea, can be attributed to Tata's capital injection of $176 million, as well as its hands-off approach to the company. "It would have been difficult to find a better suitor than Tata," says Kim. 

Tata's unique shareholder structure makes it easier for the group to tread lightly. Since its founding in 1868, Tata has been controlled by charitable trusts. Today, they own 66% of parent Tata Sons' shares and aren't as focused on short-term gains as most investors. The trusts, says R.K. Krishna Kumar, a director with Tata Sons, have long insulated employees "from the greed that is sweeping the corporate world." As the company gets more deeply enmeshed in the global economy, that gentility will be put to the test. Says Harvard Business School professor Tarun Khanna: "There's a different kind of rough-and-tumble to competitive pressures outside of India." 

*With Moon Ihlwan in Gunsan*


----------



## Neo

*India aims to sustain 9 percent economic growth​*
NEW DELHI: India can sustain economic growth of 9 percent despite a possible global slowdown and keep inflation under control, the prime minister said on Friday, as data showed a marginal slowdown in wholesale price inflation. 

Asias third-largest economy is estimated to expand 8.7 percent this fiscal year, moderating from 9.6 percent in 2006-07, as authorities keep interest rates firm to stem price pressures. 

An important policy stance we have adopted to ensure that growth is more inclusive has been to keep inflation under check, Manmohan Singh told a business conference on Friday, adding the economy was likely to expand by close to 9 percent this fiscal. 

Inflation has been inching up in recent weeks and has now breached 4 percent, much to the discomfort of the central bank, which wants the rate to head lower. 

Data released on Friday showed Indias wholesale price index rose 4.07 percent in the 12 months to Feb. 2, a shade below the previous weeks rise of 4.11 percent. The central bank aims to keep it fewer than 5 percent. 

The central banks deputy governor, Rakesh Mohan, said on Thursday inflation was still high compared to global levels and needed to be reduced further, but authorities have their work cut out with high food and energy prices exerting pressure. On Thursday, the government raised auto fuel prices by a modest 4 percent, enough analysts said to nudge up inflation and almost certainly rule out a cut in interest rates before the next review in April. 

We are concerned about core inflation, which bounced back above 4 percent after bottoming out over the last few weeks, said Anubhuti Sahay, economist at Standard Chartered Bank in Mumbai. 

We see inflation inching up over the coming weeks as the oil price increases announced yesterday have a 10 basis-point direct and a 10 basis-point indirect impact on the inflation number. 

Singh said India would ensure the benefits of high growth trickled down to the poor, who must be protected from rising prices. 

Inflation is an iniquitous tax. It hurts the poor more than the rich, the prime minister said. 

He warned, however, there was a distinct possibility of a global economic slowdown as the effects of market turmoil and a downturn in the United States spread. 

We must be aware that we cannot be completely insulated from chilly global winds that may blow in our direction, Singh said. 

IMF chief Dominique Strauss-Kahn said in India this week that emerging economies were not immune to the crisis in financial markets and would feel its impact sooner rather than later. 

While assuring industrialists of steps to help them offset the impact of slowing world growth, Singh said boosting farming was vital if overall expansion was to remain strong, and the government would rise spending to help farmers. 

Daily Times - Leading News Resource of Pakistan


----------



## Bushroda

*India, an emerging giant*
Thanh Nien Daily, Vietnam
Saturday, February 16, 2008 14:10:37 Vietnam (GMT+07) 

*Despite a continuing rich-poor gap, Indias economy continues to boom led by large domestic firms. * 


*Preparing for their roles in Indias quest to become a global power? Students at Lotus Valley school in a New Delhi suburb* 

Thanh Nien set out on a visit to India to find out what makes the South Asian giant tick.

In this effort, Thanh Nien was advised by a Vietnamese IT firm that has extensive ties with Indian partners.

The delegation, also comprising several IT executives, left in late January.

Unlike Thomas L. Friedman, who in his bestselling The World Is Flat seeks to find out why Indians are apparently depriving many Americans of their jobs, we were hoping merely to learn from the secrets of Indias success.

Our enthusiasm was, however, tested as soon as we landed in the Indian capital at midnight after a 10-hour journey.

New Delhi Airport turned out to be dilapidated and under renovation.

The cold weather  the temperature was 3 degrees Celsius  and the indifferent attitude of the airport personnel too came as a dampener.

Customs demanded a US$200 duty on a carton of food that only cost $500.

But they hastily let us go after we kicked up a ruckus.

En route to the hotel, we were again thinking about some dizzying statistics Friedman quotes in his book  the number of tax returns the Americans outsourced for processing to India jumped to 400,000 in 2005 from a mere 25,000 in 2003.

Our meeting with the Vietnamese ambassador, Vu Quang Diem, the day we landed too played a part in rejuvenating our eagerness to explore India.

*Two Indias*

India comprises two distinct parts.

There is the dark side with its rampant corruption and stark poverty; the bright side is the spectacular economic growth rate which has thrown up a 300 million-strong middle-class, despite a plethora of problems.

Indias economic growth rate of 9 percent last year was one of the worlds highest for a major economy.

The World Bank ranks India as one of the worlds 10 leading economies.

The country is also soon forecast to outpace China in terms of GDP growth, and overtake Japan in terms of economic size in 2032 and the US in 2050.

*IT-oriented education, high teacher benchmarks*

IT spearheads Indias education strategy and is the key to producing hundreds of thousands of global citizens every year.

Visiting Lotus Valley school, 20 km south of New Delhi, we realized that student-based teaching methods have played a vital role in developing childrens creativeness.

In addition to IT, the eclectic curriculum also has subjects like painting, music, dancing, yoga, and tennis.

When we expressed our surprise that a Masters graduate was in charge of the fifth grade  something most Vietnamese postgraduates will sniff at  principal Madhu Chandra said her school only hired postgraduates up.

Such high benchmarks are, however, understandable.

*Every year*

India produces around three million university graduates, second only to China and the US Besides, 80,000 Indian students are studying in the US compared to only 60,000 from China.

Computer education got a big boost in the country after four formidable names, NIIT, Intel India, Microsoft, and State Bank of India, formed a strategic partnership to assist private sector schools with IT education.

NIIT, a global IT training giant, leads the way with its NIIT K-12 (Kindergarten to 12th standard) program that has content for major subjects like English, math, sciences, and social sciences.

NIIT says it has already developed 4,000 hours of content based on the school curriculum and plans to develop on it by training teachers and then students in IT-assisted education practices.

Vijay K Thadani, co-founder and CEO of NIIT, says, The solution for software for IT-assisted computer education includes all basic subjects in the curriculum in four areas of computer-aided education - teaching, learning, experimentation, and examination.

The K-12 program has been exported to China and other Asian countries.

*The Home and The World*

Ambassador Diem told us that Indias younger generations followed the philosophy espoused by writerpainter-philosopher Rabindranath Tagore in his acclaimed book Ghare-Baire (The Home and the World) and were always willing to share the secrets of success.

Not surprisingly, companies treated our delegation with hospitality and cordiality during the trip.

While visiting NIITs headquarters, we were surprised that all top executives came to meet us, receiving the delegation with great friendliness.

We discovered that Indian businesses do not do beer or wine or any other form of entertainment for guests during working hours.

They instead make the most of the time to discuss business.

But what made the biggest impression on us was the relentless quest by Indian firms to forge ahead in the face of massive difficulties.

An Indian IT firm told us that US giants like Microsoft and IBM were unable to conquer the Indian market because of the emergence of strong domestic firms.

In the private sector, a clutch of major companies have emerged to strut their stuff on the world stage.

Infosys, Tata, Birla, Essar, Jindal, Ranbaxy, and JK have all grown to become major investors abroad.

They have invested in the rail sector in Malaysia and explore for oil in Russia and Vietnam.

Recently, the Tata Group made headlines after acquiring the UK-based Corus steel firm at over $12 billion.

The government has set a target of becoming the worlds software hub by 2010 by attracting IT majors to Bangalore and other cities.

Rubbing shoulders with the IT sector are others like the nuclear and biotechnology industries, which too are thriving.

The government subsidizes education and agriculture and offers protection for farmers against cheap imports.

The aviation industry has opened its doors to the private sector, including foreign.

The country has 126 airports, including 11 international.

Private firms are pouring money into building new airports in Bangalore and Hyderabad.

Ambassador Diem attributed Indias achievements to the across-the-board economic reform it had launched in 1991 that envisaged developing an open economy focused mainly on the IT and service sectors.

On the flight back to Vietnam, we kept thinking about Vietnamese businesses who are also keen to make a mark globally.

The question is, is the government truly rolling out the red carpet for them? Lessons drawn from newly-emerged countries like India can be handy in assessing this.

*VIETNAM, INDIA DRAW CLOSER*

&#9632; *India and Vietnam are hopeful of achieving bilateral trade of US$2 billion by 2010, even as New Delhi wishes to join hands with Vietnam in the hydrocarbon and power sectors.*

&#9632; *During a visit to India last July, Vietnamese Prime Minister Nguyen Tan Dung called for expanding bilateral trade and economic ties, pledging Vietnam would create a conducive investment environment for Indian businesses.*

&#9632; *He added that Vietnam was seeking to elevate the traditional relationship with India to a comprehensive strategic partnership in science, technology and education.*


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## Spring Onion

Terrorists manipulating stock markets, suspects BJPAds By Google Press Trust Of India
New Delhi, February 17, 2008
First Published: 18:28 IST(17/2/2008)
Last Updated: 18:31 IST(17/2/2008) 


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Viewing the recent fluctuations in the Sensex with concern, BJP suspects that some anti-national elements, including terrorists, may be manipulating the stock markets and wants a probe to ascertain the antecedents of investors.

Party President Rajnath Singh said his concern stems from the fact that up to 40 per cent of investments in the stock markets were by the Foreign Institutional Investors (FIIs) through PN (Participatory Notes) system.

"What kind of money, whose money, what colour is it? There is no information," Singh told PTI in an interview while referring to the recent crash in the stock market leading to losses worth crores of rupees to small investors.

"This has been happening for several years. There should be some system to identify whose money is being invested," he said, favouring a "tough law" to monitor these investments.

His views echo the apprehensions expressed by National Security Advisor M K Narayanan about a year ago that terrorists might be pumping money with a design to manipulate the stock markets.

Senior BJP leader L K Advani had also last week noted that there can be no place for "manipulation, malpractices and misuse" of the system by any of the players of the capital market and demanded that offenders must be punished.

Terrorists manipulating stock markets, suspects BJP- Hindustan Times'


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## Neo

*Indias IT sector says it can ride out global slowdown​*
MUMBAI: Indias top technology and outsourcing body said it is confident it can ride out the challenge of a stronger rupee and a global economic slowdown as it wrapped up its annual meeting here.

Indias flagship outsourcing industry is grappling with a rupee that rose 12 percent last year, lowering the local equivalent of every dollar earned, and a potential recession in its main market, the United States.

The demand we still feel is strong, NASSCOM president Som Mittal said Friday in the nations financial capital Mumbai, where the three-day meeting drew IT players from India and around the world.

The sector expects to meet or even exceed its software export target of $60 billion and overall software and services revenue goal of $73 to $75 billion by 2010, Mittal said in an interview.

Indias IT sector with its skilled, low-cost work force that has planted the country on the global business map, is keeping its fingers crossed that the international slowdown will turn out to be a blessing.

It is hoping the financial turmoil in the US and elsewhere could drive businesses to farm out more work to cheaper Indian firms even as they pare overall technology budgets.

Mittal said past slowdowns had led companies to outsource more due to cost pressures.

He said the rupees rapid appreciation against the dollar and pressure on talent availability, a fierce war for talent has driven up wages and staff turnover, had opt pressure on margins.

However, Indias ITs sector, which accounts for 5.5 percent of gross domestic product, up from just 1.2 a decade ago, has shown sustained ability to take out costs, Mittal said. And an ageing population in the West is creating new demands for outsourcing services, which will continue to drive demand even in a slowdown, he added. The industry has been seeking to diversify its markets to offset its reliance on the US, which remains the largest outlet for Indias software, sector taking 61 percent of its exports. Europe-bound exports, however, have climbed 55 percent since 2004.

Britain now accounts for 18 percent of Indias software services market and continental Europe takes 12 percent.

The IT sector is also looking at Indias burgeoning domestic market fuelled by economic growth of around nine percent.

Revenues from the domestic IT market, including hardware, are estimated to reach $23.2 billion in the year ending March 31, 2008, up 43 percent from the previous year.

Indian IT and business process outsourcing (BPO) revenues are seen growing by over 33 percent to reach 64 billion dollars in the current financial year.

We always looked outward  now there are also many domestic opportunities, said Mittal.

Daily Times - Leading News Resource of Pakistan


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## Bushroda

*India shows how ICT can help economy*
Kumar Parakala
Australian IT, Australia
February 19, 2008 

IF Australia is serious about taking advantage of technology to drive economic growth, we need to take a serious look at India, which offers a great model of how the ICT sector can be an economic powerhouse.

India currently boasts the fastest growing technology market in the world, according to a recent study by Gartner. The research firm predicts that India's ICT industry will swell by 25-30 per cent during 2008, thanks to "unabated growth in the IT services market in the export sector coupled with significant IT services growth in the domestic market". 

India's position as the leading global business process outsourcer and the strong growth in domestic infrastructure offer significant opportunities for Australian ICT firms interested in developing international relationships. 

Last week's NASSCOM India Leadership Forum attracted over a dozen Australian organisations to Mumbai to showcase their offerings and network with potential partners. 

I had the privilege of addressing the India and Australia session, which was designed to introduce the Australian delegation and facilitate opportunities for networking and international co-operation. 

I believe India has been so successful because of its outward looking, global focus, strategic planning and large-scale collaboration between government and the ICT sector to galvanise the growth of specific industry sectors. 

Australian ICT companies wanting to emulate India's success must also start thinking globally when putting together business plans, designing products and services, and looking for business partners, suppliers and clients. 

Not just because the opportunities and rewards are great, but also because without taking this step, we risk being left behind. 

But it's not just companies that must broaden their outlook. 

ICT professionals must take a global approach when it comes to planning their career. 

Increasingly, companies operating in the global arena want professionals with international experience, particularly people who are familiar with the markets and cultures with which they want to do business. 

There is already a large movement of qualified ICT workers between Australia and India, with the ACS playing a key role in enabling this exchange. 

We already count many Indian ICT professionals among our members and this number is increasing at a steady rate as collaboration and trade between India and Australia continues to grow. As globalisation gathers pace and encompasses more and more nations, there is a pressing need for an internationally relevant set of benchmark criteria for trusted technology and trustworthy ICT. 

The ACS has accepted this challenge and is working with other international ICT professional associations to establish global professional standards for ICT professionals. 

This will result in an accreditation process with recognition of qualifications, professionalism and ethical standards for ICT professionals across the globe. 

It is designed to facilitate the mobility of skills, enable professionals to gain international experience, and encourage greater flexibility and diversity in the global ICT workforce. 

While this is a lofty goal, it's crucial for the growth and development of our industry. 

Global accreditation of ICT professionals will help deliver the professional workforce needed to deliver the productivity and other benefits that India and other countries will be looking for in coming years. 

India is already a key partner for Australia, accounting for around 50 per cent of our services exports and delivering more ICT-enabled services than any other nation. 

Clearly, this is a partnership that offers enormous benefits for both countries, and one that we are keen to see flourish in coming years. 

With the Australian Government's strong commitment to innovation, we are encouraging Indian companies to consider establishing innovation or R&D centres in Australia, which will improve access to in-demand skills and provide employment for Australian professionals. 

We are hoping that the Prime Minister Kevin Rudd's upcoming 20/20 vision summit will establish ICT as an integral part of the Government's economic strategy and a key driver of Australia's future prosperity, opening the way for closer alliances and more lucrative opportunities in South-East Asia and further abroad. 

*Kumar Parakala is ACS national president and global chief operating officer of KPMG's IT advisory practice. *


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## Bushroda

*Railways to earmark Rs9,000 cr*
*Bracing for the imminent recommendations of the Sixth Pay Commission, the Indian Railways is setting aside Rs9,000 crore*

Sangeeta Singh, Utpal Bhaskar and K.P. Narayana Kumar
Livemint

New Delhi: Bracing for the imminent recommendations of the Sixth Pay Commission, the Indian Railways, the largest employer in India, is setting aside a little more than one-third of its annual wage bill of Rs25,000 crore in the 2008-09 Railway Budget.

Officials close to the development, who did not wish to be identified, said the railways is setting aside Rs9,000 crore. This includes payments towards arrears, since the recommendations will come into effect from 1 April 2007. It has made this assessment based on internal calculations that have been put together in consultations with the finance ministry. 

This was disclosed by officials, who have viewed internal communication between the railway ministry, finance ministry and the Planning Commission, but did not wish to be identified. 

We can make a clear assessment on the burden only after the pay commission makes an announcement, said V.N. Mathur, member (traffic) of the Railway Board, while declining to comment on the specific numbers. 

Finance commissioner Sudha Chaube could not be reached for comments.

The Sixth Pay Commission was set up to overhaul the salaries of all government officials and bring them in line with the demands of the emerging global economic scenario. 

According to the same railway ministry officials, the annual increase in wage bill would be around Rs3,000 crore. The railways has some 1.4 million employees, down from around 1.6 million in the early 1990s. 

Last year, the railways cash surplus after deducting for costs, including dividends, worked out to Rs16,000 crore. 

This year, with freight performance on target, the railways is projecting that the surplus would be higher at Rs21,000 crore in 2008-09. 

Therefore officials argue that the railways would be in a position to absorb the additional burden resulting out of the recommendations of the pay commission.

Peeyush Naidu, principal consultant, PricewaterhouseCoopers, said, Railways has been enjoying a buoyant economy. In future also it will make more money on account of (the proposed) dedicated freight corridor. And income accruals on account of this project will help it offset expenditure arising out of additional wage burden.

The railways had demanded Rs13,250 crore as gross budgetary support for 2008-09. The likely allocation, however, is going to be Rs7,100 crore, a 3% increase over 2007-08.

A planning commission officer said the railways can finance its needs through more borrowings. 

The railways does face some strain whenever the pay commission revision happens. But right now the finances of the railways is better off and therefore it is in a better position to absorb the burden, said Akhileshwar Sahai, president, government and multilateral advisory services, Feedback Ventures.


----------



## Bushroda

*India's Fab City investment to top $7 billion as focus moves to solar*
Sufia Tippu 
EE Times Europe 
02/18/2008 9:49 AM EST

BENGALURU, India  The Indian government has approved an additional five companies to take part in projects in Fab City, a proposed semiconductor manufacturing location near Hyderabad. This would take the total investment in Fab City to $7 billion, Minister of State for Commerce, Jairam Ramesh said here Monday (Feb. 18), speaking at the two-day India Semiconductor Association summit. 

The focus of the latest investments is on solar energy conversion he said but added that the Indian government has many further projects either with in-principle approval or under considerations which could bring further investments to Fab City. 

Fab City, set up in 2006 to encourage the genesis of chip manufacturing in India, is now betting big on photovoltaic products. The five latest projects are all focused on the solar energy business and about half of the proposed projects for Fab City are now in the photovoltaic area. 

The five projects are the India-based Titan Energy Systems Ltd. proposing an investment of $50 million in solar photovoltaic cells; NanoTech Silicon India with an investment of $2.1 billion to manufacture thin film solar cell fab; India-based XL Telecom & Energy Ltd., which is investing $76.25 million to set up a unit for solar cells and solar modules; KSK Energy Ventures Ltd. (Hyderabad, India) a venture capital fund that plans to set up a unit for solar photovoltaic panels with an investment of $70.25 million; and the Indian subsidiary of the Canada-based Embedded IT Solutions is planning to set up a PCB manufacturing project with an investment of $5 million. 

Two earlier Fab City announcements were the $3 billion SemIndia project to create a world-class wafer fab and the Hyderabad-based Solar Semiconductor Ltd. which said it would be investing $1.1 billion over a 10-year period. The first phase is set to cover manufacture of solar cells and solar panels. The second phase is set to focus on solar thin film technology while the third would scale up manufacturing capacity to one gigawatt per annum. 

The Indian government has also given an in-principle approval to five other projects worth a further investment of $7 billion. Yet another five proposals, also worth between $6 billion and $7 billion are under active consideration, Ramesh said during the opening of the ISA summit. 

In-principle allotments have been given to five other Indian companies: Chandradeep Solar for an R&D unit, Neotech Solutions, Photon Energy Systems, Surana Ventures and RamTerra Solar Pvt. Ltd. for several photovoltaic modules unit. 
Among other companies that are under consideration but which are yet to finalize their location are the Indian consumer electronics giant, Videocon which is looking at an investment of $250 million and Hindustan Semiconductor Manufacturing Company (HSMC), which has partnered with Infineon Technologies AG (Munich, Germany) to set up a semiconductor manufacturing plant. 

The proposed investment of $1 billion for the HSMC unit would focus on chipsets for mobile phones, direct to home TV set top boxes, automotive and smart cards, The company has yet to finalize the location where it will build a wafer fab. 

Among other companies with an interest in Fab City is Moser Baer, a maker of optical storage devices that has joined forces with Allied Materials Inc. for photovoltaic cells and has set up a manufacturing unit at Sriperumbudur on the outskirts of the southern port city of Chennai. Given the momentum behind semiconductor manufacturing Air Liquide of France has proposed a facility for the supply of gases and chemicals while BOC announced plans to set up a chemical plant in Hyderabad last year. 

"Setting up a plant for a wrong reason, say just because the money is available, will not work," said Malcolm Penn, CEO of analysis firm Future Horizons (Sevenoaks, England). He said some of the proposals would work out and some would not. "You have to set up a plant for the right reasons  have a workable business plan in place and check out all the challenges in terms of manpower, infrastructure and the market. It should not be merely a sweatshop  set here today because it is cheaper to do it here and then move on  but a plant fully integrated into your system." he added.


----------



## Neo

*India eases tax burden on exporters​*
NEW DELHI, Feb 19: India on Tuesday extended tax breaks to exporters to cover the transport and storage of goods, the finance ministry said, in a bid to offset losses incurred due to a rise in the value of the rupee.

The move comes a week ahead of the annual budget and after export growth slowed to 16 per cent in December from a year ago, sharply lower than annual expansion of 27pc in November.

On Tuesday, the finance ministry said it would refund exporters taxes paid on moving goods from inland depots to sea ports and airports, and those incurred in storing goods at warehouses.

Taxes will also be refunded when exporters use courier services to send documents abroad, it said in a statement.Reuters

India eases tax burden on exporters -DAWN - Business; February 20, 2008


----------



## Neo

*India may top in salary hikes this year​*
NEW DELHI, Feb 19: India is likely to top salary hikes in Asia for a fifth year in 2008, but companies in India are finding it hard to retain talent, a new survey said on Tuesday.

Indian salaries are expected to rise by an average 15.2 per cent in 2008 after rising 15.1 per cent last year, according to an annual survey conducted by global human resource company Hewitt Associates. Real estate and energy companies were seen offering the biggest hikes of 25 per cent and 17.5 per cent respectively.

China is expected to come in second with projected raises of about 8.5 per cent, followed by the Philippines with 8.3 per cent, the survey said.

However, the high salary growth is fuelled by a talent demand and supply mismatch, it said.

Employees are increasingly looking for great career opportunities and are actively being pursued by other organisations, said Sandeep Choudhury, a Hewitt executive. Organisations are using compensation as a strategic lever.

But the salary increases in India were expected to stabilise in the 9-10 per cent range by 2012, Hewitt Associates said.

The survey measured actual and projected increases in salaries of individuals in the private sector.

It examined compensation practices in five specific job categories executives, managers, midlevel staff, clerks and manual workers.

The survey covered 2,000 Asian companies, 540 of which are in India. The survey did not provide a margin of error.

The companies surveyed in India included foreign-owned, locally owned and joint venture companies across 19 industries.

The survey also showed that the traditional gap between salary hikes offered by locally owned and multinational companies had closed with Indian private sector companies projected to raise salaries by 15.5 per cent in 2008 compared with 14.9 per cent offered by multinationals, the survey added.

Indias booming economy has averaged nearly 8.5 per cent growth in the past five years, but more than 300 million of its nearly 1.1 billion people still live on less than a dollar a day and nearly twice that number struggle for access to basic facilities such as drinking water, education and health care.

Junior managers and midlevel staff received the biggest pay hikes in 2007, a trend likely to continue in 2008, the survey said.

The survey included companies in Australia, China, Hong Kong, India, Japan, South Korea, Malaysia, the Philippines, Singapore, Taiwan, and Thailand.AP

India may top in salary hikes this year -DAWN - Business; February 20, 2008


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## Bushroda

*Surging Indian economy puts bat to ball, and hits six after six*
Daniel Flitton
The Age, Australia
February 21, 2008

IMAGINE being an umpire on the next cricket tour in India. Think of the intense pressure the moment before raising your finger, hearing the crowd bay in the stands, knowing  perhaps even fearing  there will be a challenge by India's powerful cricket board to any controversial decision.

India is now the superpower of world cricket. In market terms, India has a hat-trick: a huge population of eager supporters, cashed-up corporations to pay out big sponsorship dollars, and a rapidly growing media industry. All this brings enormous influence.

The country's new Twenty20 Premier League has already generated a billion-dollar TV deal and attracted the world's best players  all without a ball being bowled.

It's clear that India can afford to set its own terms and is willing to push other countries around to get its way. This assertive cricket diplomacy points to a wider story about Delhi's approach to international politics and trade, a telling example of a country ginned up and ready to take on the world.

India's economy is surging. Only China is posting a faster growth rate. The odds are shortening in financial circles for bets that India will soon overtake its neighbour.

Regardless, the signs of India's wealth are already obvious. Take the booming high-technology industry  Microsoft has one of its largest factories in Hyderabad  and an expanding middle class that already dwarfs the entire population of the United States. Slow and bumpy train rides once dominated transport across the country, but now people are flying on a clutch of new airlines, with domestic air travel up 25% in a year.

Improvements at home give India a new confidence abroad. Only a few years ago, it would have been hard to imagine India not being dragged into the current woes in rival Pakistan. Yet after 60 years of bitter suspicion, India's attention is elsewhere.

Delhi is determined to be seen as a responsible member of the global community. Even a series of deadly terrorist attacks linked to Pakistani militants in recent years has not swayed India from a policy of restraint.

In international negotiations, Delhi has set out to raise its voice above the din. Until recently, the 151-member World Trade Organisation was directed, almost exclusively, by Europe and North America. But now, India has pushed into the fabled "Green Room", the closed-door meetings held in the back office, where an exclusive group of nations bargain together on the tough issues. Delhi's support is seen as crucial to any future free trade proposal, along with that of the US, European Union and Brazil.

India is also chasing a permanent seat on the United Nations Security Council, a talisman for the world's great powers, and is seeking support, especially in multilateral forums such as the G20 grouping, which is where Australia comes in.

Foreign Minister Stephen Smith has made closer ties with India a priority  a shift begun by the Howard government, but one that he appears especially keen to accelerate.

India is a fast-growing market for Australian goods and services, increasing at more than 30% a year. But there is a political imperative too. India offers Smith the chance to cultivate an important bilateral relationship without constantly checking back with his boss. Kevin Rudd's passion for international relations is well known  and so are his favourites.

Rudd has already described preserving Australia's close ties with the US as core business for the Prime Minister; Indonesia is another special case; while the Mandarin-speaking former diplomat is also expected to keep a careful watch over relations with Beijing.

Not that Rudd will ignore India. Again, there is a political reason at play. Rudd needs to pre-empt any accusations he is too obsessed with China, especially with continued concern over Beijing's human rights record and corrupt business practices.

Earlier this week, Rudd was asked about his plans to visit China. He said he hoped to go in the next few months. But either Rudd was distracted, or he deliberately threw in an otherwise off-topic reference to India. "China, and India, are core parts of Australia's economic future," he said.

It's safe to expect both these Asian giants will continue to be paired up in Labor's future foreign policy declarations.

But the new Government has stumbled in its early bid to build stronger ties with India, tripping up on the difficult question of uranium exports.

Despite Delhi's new-found confidence, the country is still beset by myriad problems. Not least is the need for a reliable energy supply to fuel its economic growth.

Smith decided to reverse a Howard era agreement to export Australian uranium to fire India's nuclear reactors, saying that unless India joins the Non-Proliferation Treaty, which would mean surrendering its prized nuclear weapons, it can forget access to Australian uranium.

But Smith has left himself open to accusations of a double-standard. If the Government truly objected on principle to India accessing uranium, Australia could block international sales by other countries  an option open to Canberra as a member of the Nuclear Suppliers Group, which sets global export controls for nuclear materials.

So far, Smith has left open the question of allowing international exports. But the time could soon come for a decision.

India and Russia are edging closer to a multibillion-dollar nuclear deal. If Australia, as one of the international umpires, judges that one out, India will appeal  and loudly.

*Daniel Flitton is diplomatic editor.*


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## Bushroda

*Memo from India - Day 4*
Roger Cranville
Pittsburgh Business Times
Tuesday, February 19, 2008 - 9:07 AM EST

_*A delegation from the Pittsburgh regional business, civic and economic development community has embarked on a weeklong business trade mission to India organized by the Pittsburgh Regional Alliance, an affiliate of the Allegheny Conference on Community Development. While in India, PRA Senior Vice President of Global Marketing Roger Cranville is writing this mission diary for the Pittsburgh Business Times.*_

*This dispatch was filed Friday, Feb. 15 *

"So," we asked the concierge, "how long to the Bangalore Club?" Just around the corner, he said. Better leave half an hour, we thought. One lasting memory of this (and previous trips) is the traffic. It is without doubt, in urban areas, tumultuous. On to the Bangalore Club to meet up with Feedback Consulting, a market research-based strategy team that works with companies, regions, and countries to provide market data to guide strategic market entry decisions. 

We arrived at the club's entrance through its manicured gardens, neatly trimmed foliage and well-lit walls. The club's white, colonial-style buildings seemed like turning the clock back by a century. It is, indeed, a walled estate with many buildings dating back to the colonial era. A tropical garden version of the Duquesne Club, methinks! 

By now many of the messages we are hearing are being repeated at most meetings. Feedback's insights into the India of today and the India of the future are no less optimistic than those of Kennametal, iGate, KPMG and Infosys. Like all of our meetings, we were greeted graciously by five senior staff of Feedback. Our host reminded us that India and China are going to be 33 percent of the world's gross domestic product within the next 20 (plus or minus 10) years. Since 1985, Feedback has been engaged 1,800 times in deals amounting to about $5 billion. They project more public private partnerships (PPPs), especially in the massive infrastructure market of the future. 

If your company wants to "do India," they recommend the following guidelines: 


you must have top management support;

prepare for a long sales cycle; 

price must be market-appropriate; 

product or service may need local content; and 

in all dealings, use a "trust and verify" model with strategic partners or business deals.

We were reminded that there is a "global war for talent" and a "human capital challenge." I believe they were relating this to India's need, as the country delivers 10 million people per year into the work force. They then mentioned that India's graduates are in demand worldwide, often leaving India and then returning -- with global experience -- some years later to enjoy the fruits of the burgeoning Indian economy. But not all of the jobs being created in India are in the IT and software engineering fields; India needs people across the job spectrum. 

Discussions with Feedback ended with a final comment from our hosts, who said that, "the Pittsburgh region must make its case to Indian companies seeking to enter the U.S. market before other U.S. regions; competition is hot. "There are many Indian companies looking at the United States," they said. "Indian companies looking at the U.S. are mostly looking to do business with the U.S. government. Target Indian companies with the Pittsburgh proposition," they recommended. 

"How do we find them?" we asked. "Hire Feedback Consulting," was the ready response. 

Up to Mumbai in the morning to register for the Nasscom India Leadership Forum 2008 at the Grand (it is!) Hyatt Hotel. Leaving at 7 a.m., one of our delegates was sick and left in wretched condition in Bangalore. The group flew with Kingfisher (same company as the beer brewer) Airlines who, along with Jet Airways, provide absolutely excellent domestic some international air service. Full meals are provided on all flights, and service is exceptional. (It's also exceptional in aspiring China and Vietnam, too!) 

The conference (this is the 16th year) overview states the theme clearly: "Thinking Big, Going Global." India is embracing the world, and the world is coming to India. Even as Indian organizations expand their business to all parts of the globe, the largest of international players are establishing an "offshore" presence in India to tap the great outsourcing opportunity. At the same time, the IT-BPO (Business Process Outsourcing) industry has emerged as a strong force and growth catalyst of the global economy. 

Sessions at the forum included: India at 60 - Building a knowledge economy for growth; Building ICT trade in Asia Pacific; and Changing Focus - Shifting sights from America to Europe. For more on the conference and published papers and presentations check out nasscom.in. 

It's been an incredible trip so far, and hard to believe it is coming to an end. We'll have much to discuss with our partners back home in the weeks, months and - yes, indeed - the years ahead.


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## Bushroda

*Memo from India - Day 5*
Roger Cranville, Pittsburgh Business Times
Pittsburgh Regional Alliance

*A delegation from the Pittsburgh regional business, civic and economic development community took part in a weeklong business trade mission to India organized by the Pittsburgh Regional Alliance, an affiliate of the Allegheny Conference on Community Development. While in India, PRA Senior Vice President of Global Marketing Roger Cranville is writing this mission diary for the Pittsburgh Business Times.*

*This dispatch was filed Saturday, Feb. 16 *

The conference, based at the Grand Hyatt and not far from the domestic and international airport, is in the middle of a fairly desperate part of Mumbai (formerly Bombay). Slums and makeshift housing abound, buildings are derelict or in an incredible state of disrepair, and people live under road flyovers or beside the road. The people are destitute. Children play cricket and soccer, dogs roam the streets, three-wheel taxis are repaired by turning them over manually, and stores are ramshackle but open an apparent 24/7. I am sure these communities (and they are communities) are not members of the 2 percent that pay income tax. But they probably do contribute to the electrical leakage equation. 

The conference continues to fuel insights and aspirations for delegates with three tracks: The Thought Leaders Conclave, The Global CIO Conclave and the Insights Conclave. Sessions include Global Leadership - IT as a competitive advantage; The innovation imperative; innovations for strategic outreach, and managing an increasingly diverse work force. The sessions, the speakers and the delegates are all about India in the future. It's interesting to see the groups from around the world attending the conference, including Pittsburgh, Nova Scotia, London, Egypt and Costa Rica. The sponsors list is a who's who of world corporate players. 

Speakers are thought leaders from around the world and fully cognizant of India's future position in the world economic rankings. Toyota, Siemens, Barclays and Sony have provided their brightest and best to join panels or deliberate key topics that affect India and the world. The United States is represented by speakers from Cummins, Allstate Insurance, Wells Fargo, Fidelity and others. 

While at the conference, we also met with Edelweiss, India Value Fund, Atherstone and KPMG. The first three are fund managers that invested their time in informing us of what they see as the major opportunities for the Pittsburgh region: infrastructure (no longer a surprise), with real estate development, road and rail development projected to be $110 billion; airports - $17 billion; sea ports - $18 billion; energy - $250 billion; and telecom - $25 billion, all by 2012. 

KPMG has developed an India-U.S. corridor in part to respond to the investment needs of Indian client companies investing in the United States and the weak dollar, which is providing increased opportunities for U.S. investment by cash-rich Indian clients. KPMG sees major opportunities from mid-cap Indian companies seeking merger or acquisition opportunities in the United States. 

The purpose of our trip was to introduce regional leaders from the Pittsburgh region to India and to explore the immense opportunity that exists here for companies back home. Following a visit to China by regional leaders from Pittsburgh last spring, the Pittsburgh Regional Alliance convened a private sector China Strategy Group. And as this Pittsburgh group in India met to discuss next steps, we concluded that the Pittsburgh region must have an India Strategy that includes business, health care and academia. Just some of the factors to consider as we develop that strategy include: 


valuable partners in India and in the Pittsburgh region (e.g. Feedback and KPMG); 

local actions to inform (and in some case change opinions of) Pittsburgh organizations on Opportunity India; 

actions to make Pittsburgh more open to diversity and overseas people and investments; 

activities in India to promote the Pittsburgh region and its value proposition to potential Indian investors; and 

mechanisms that enable more regional business leaders from southwestern Pennsylvania to visit India and do business there. 

Participants from this trip plan to meet with the China Strategy Group leadership to discuss synergies.

During the trip, the group has been gripped by a debate on how to engage the region with India and a debate over the U.S. immigration H1b visa cap of 65,000, which is preventing U.S. companies from hiring talent from abroad, thus severely handicapping their global competitiveness. 

Global companies need global talent to be competitive. Consider the positive impact of Indians on the information revolution since the early '90s. Indians were involved in 40 percent of the growth experienced in Silicon Valley. 

It became very apparent to this group that restricting the amount of highly qualified and talented Indians (or talent from other countries) coming to the United States, when the demand is for far more, is a significant competitive disadvantage. Why 65,000? 

A final thought on our India trip and a word to wise business leaders across the Pittsburgh region comes from mission participant Girish Godbole of CEO Ally, which is based in Pittsburgh. 

"If India were closer or if a U.S. state showed such economic vitality, we would be looking seriously at how we would engage. Engage in one of the world's greatest economic opportunities now - your competitors are!"


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## Bushroda

*For want of a hotel room, a booming Mumbai stagnates*
MARCUS GEE 
Globe and Mail, Canada
February 20, 2008

MUMBAI -- Arriving in Mumbai at midnight after a 20-hour journey, I find my hotel has never heard of me. A night clerk flips through a stack of reservation slips. No such person. Producing an e-mail confirming the reservation leaves him unmoved. I can stay for one night, that's it.

The next day a travel agent searches every known hotel in the city for a room. All booked - except the Maharaja Suite at the Leela Kempinski for $2,000 (U.S.). I try to imagine explaining that item on my expense report.

Finally, a second travel agent finds me a $500 room at the Grand Hyatt, a walled oasis of luxury in neo-Dickensian Mumbai; but again, only for one night.

As I steel myself to join the millions of people living on the city's pavement, a distant cousin living in the city with her Indian husband invites me to stay at their place. Saved.

But why is it that the financial capital of the world's second most populous country has no hotel rooms to spare? And what does it means for the booming Indian economy?

To find out, I went to see Adarsh Jatia, director of the Indian group that put up Mumbai's new Four Seasons hotel, which opens next month. A gorgeous glass tower with rooms panelled in blond wood, it stands in splendid isolation amid a collection of shacks in a developing, but hardly glamorous, district.

Mr. Jatia tells me it cost $100-million to build. Rooms will go for $500 a night, about what an Indian farm labourer earns in a year. Filling those room will be a piece of cake. With India's can-do economy growing at around 9 per cent a year, outsiders are thronging to India to get in on the action - government delegations, corporate titans, business owners, inquisitive tourists. The government expects 10 million visitors a year by 2010, twice the current figure.

If I can't find a single room for the night, where are they all going to stay? India has only about 100,000 hotel rooms in the whole country. To put that in perspective, New York City alone has 74,000. In the four- and five-star category suited to business travellers, it has just 40,000 rooms. Mr. Jatia says it needs 100,000 more.

Things are so tight that in the information technology hub of Bangalore some business travellers have been forced to commute there from Hyderabad, an hour away by air. "Not many people are going to want to come to a country where you have to fly to another city to sleep," said Mr. Jatia, a suave 28-year-old in a pink shirt whose family partnered with Canada's Isadore Sharp to put up the Four Seasons. "India's reputation is at stake."

He's right. The hotel room shortage is a sign both of India's success and its failure. Its economic success makes everyone want to come here; yet in many ways it is failing to cope properly with the boom.

To fill the gap, big Indian and international hotel firms are rolling out ambitious plans for expansion.

An arm of the Hyatt group plans to open hotels with a total of 3,000 rooms over the next decade. Citymax Hotels India, a branch of Dubai-based Landmark Group, expects to open 30 mid-market hotels in the next decade.

It's not nearly enough. In the hottest market, Mumbai, Mr. Jatia says, just two major five-star hotels are under construction. Red tape discourages some potential entrants. Mr. Jatia had to get 150 government permissions for the project: permission to excavate, permission to build a basement, permission to build above ground level. He even needed permission to have music broadcast in the hotel, considered a public space.

Real estate prices are another barrier. Sky-high prices in Mumbai mean that it doesn't make sense to buy land just for a hotel. Since work began on the Four Seasons, the plot it sits on has increased in value by a factor of 10, to $200-million.

As demand for hotel rooms exceeds supply, the inevitable happens: prices soar. Average room rates are up 40 per cent in the past year alone, hardly an incentive to visit. American Express predicts that high-end Indian hotels will see another 38- to 41-per-cent rise in 2008, 34 to 38 per cent for mid-range hotels.

"The hotel bill is the first bill you have to pay," Mr. Jatia notes. "It makes you think: This is an expensive city to be in."

The hotel room crisis is a rather typical one for India. As the country charges into the 21st century after decades in the doldrums, everything is under stress: roads, ports, airports. Hotels, too, are an essential part of any modern country's infrastructure.

You can't do business without moving around and you can't move around unless you have somewhere to sleep.

India needs more hotels, and fast.


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## Bushroda

*Bollywood backers bid for cricket's million-dollar men*
Mario Xuereb
The Age, Australia
February 21, 2008

IT WAS the moment cricket joined the free market or sold out  depending on your point of view.

The game's centre shifted violently from the green of Lord's and the MCG to the Indian subcontinent, riding on the ready millions of India's business tycoons and Bollywood stars.

An expensive auction for players has decided the composition of the Indian Premier League, the brash, upstart Twenty20 competition that will pit international players in an eight-team tournament over 44 days from April 18.

Andrew Symonds, who has had a problematic relationship with Indian crowds and players, topped the foreign player bids. The Hyderabad side claimed him for $1.47 million, his price propped up not only by his all-round talents, but his decision not to tour Pakistan, which could have conflicted with his IPL commitments.

Symonds' price was second only to the $1.65 million for Indian Twenty20 captain Mahendra Dhoni.

The attention of the cricket world was fixed on the Mumbai Hilton's ballroom as each of the franchises spent up to $5 million and 78 cricketers went under the hammer.

The money goes directly to the players involved in the 44-day tournament, which has set new standards for the commercialisation of the game. The television rights were reportedly sold to Sony Television for $1.08 billion for 10 years, while Channel Ten is showing the series in Australia, having shelled out more than $10 million over five years.

The league's co-founder, Inderjit Singh Bindra, did not spare the hyperbole when he said the sight of all the money in display was more arresting than even the game itself.

"The market is determining the price. That's how a free market economy should flow," he said. "I have never seen anything so riveting and so absorbing and so exciting, even on the field. It's amazing drama."

While India players were heavily favoured, Australians were in high demand. Joining Symonds in Hyderabad is Adam Gilchrist, who fetched $765,000.

He was being chased by IPL glamour side Kolkata, owned by the biggest star in Bollywood, Shah Rukh Khan, who turned up in trademark bangs, dark aviators and with leopard-skinned wife in tow. Instead, Khan picked up Ricky Ponting for a relatively modest $436,000.

More popular was fast bowler and sometime Indian pop star Brett Lee, who went to the other Bollywood-backed side, Mohali, for $981,000.

The team's part-owner, Preity Zinta, caused a mini stampede among photographers when she emerged from the closed auction to announce some of the winning bids. She ended up pleading for the 200 journalists crammed into a tiny media centre to calm down.

Like the entire Twenty20 concept, there was little room for subtlety. Big hitter David Hussey, who normally plays in front of a handful of spectators in Australian dometic cricket, has the chance to make his name on the world stage, having fetched $738,000 to play with Kolkata. His brother Michael, a more traditional strokemaker, was passed over in the first round of bidding.

Shane Warne turned out to be a first-round bargain, snapped up by Jaipur at his reserve price of $492,000.

Despite the massive bidding prices, the highest-paid players were not those whose services were purchased last night. Each of the teams has a so-called "icon" player  all Indians  who will earn 15% more than the player who attracts the highest bid in their team.

"We are taking domestic cricket to an altogether new plane," said Bindra. "This is a milestone in the history of Indian cricket."


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## Bushroda

*Indian SMEs among the most upbeat in Asia - HSBC*
Wed Feb 20, 2008 6:59pm IST

MUMBAI (Reuters) - India's small and medium enterprises are the most optimistic among their Asian peers after Vietnam while South Koreans have turned cautious, HSBC said on Wednesday, citing a survey.

The survey was conducted in the last quarter of 2007 and covered 2,736 SMEs in nine Asian countries, Puneet Chaddha, HSBC's country head, commercial banking, (India) told reporters.

Around 58 percent of the 333 respondents in India expected the economy to grow, second only to Vietnam, where 90 percent of the respondents expected the same for their economy, he said.

In contrast, more than 80 percent of SMEs surveyed in South Korea expected their GDP growth to stay unchanged or decrease.

A majority of Indian SMEs surveyed plan to undertake capital expenditure in the next six months while 43 percent plan to increase their staff count, the survey said.

The SMEs expecting faster economic growth far outnumbered those expecting a slowdown, Chaddha said. "SMEs are not competing on price, they are picking up niches," he said adding the companies expect cross-border trade to grow further.


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## Bushroda

*India's H1 consumer confidence at all-time high - MasterCard Worldwide survey*
CNN Money
February 20, 2008: 08:01 AM EST

MUMBAI, Feb. 20, 2008 (Thomson Financial delivered by Newstex) -- MasterCard Worldwide said its index of consumer confidence for India came in at 86.6 on a scale of 100 during the first half of this year -- the highest-ever score for India since the survey commenced in 2004 -- showing increasing optimism amongst surveyed consumers.

Nitin Gupta, who manages the South Asia operations of MasterCard Wordlwide said the results show a significant jump in consumer confidence compared to the corresponding period last year, when the index stood at 65.1, and the 63.6 seen in the second half of 2007. The score was higher across all five components - employment, economy, regular income, stock market and quality of life, showing the opinion is both 'deep-rooted and all-pervasive', MasterCard said in a release.

Suman Bery, director-general of independent economic think-tank National Council for Applied Economic Research (NCAER), said the survey results were quite 'unexpectedly buoyant' and reveals the increased optimism among middle-class consumers living in major Indian cities.

The findings are taken from a broad survey conducted across the South Asia, Middle East and Africa (SAMEA) region on a bi-annual basis, with a sample of urban individuals within the age group of 16-64 who own a bank account, the unit of MasterCard Inc (NYSE:MA) said.

Egypt's performance on the index dropped significantly to 65.9 from 78.2 for the first half of 2007, while the indices for the United Arab Emirates showed a smaller decline. Other countries surveyed showed no drastic changes, it said.


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## Bushroda

*Is India's oil-to-retail giant setting up a fab?*
Sufia Tippu 
EE Times Europe 
02/20/2008 5:48 AM EST

BENGALURU, India  An Indian government minister has announced that Indias largest corporate house, Reliance Industries Ltd., might consider investing in semiconductor activity. 
Reliance Industries (Mumbai, India) is an oil company that has expanded into chemicals, textiles, clothes and retail activity and in 2007 made a $2 billion profit on annual sales of about $28 billion. Reliance doesn't have any paperwork or semiconductor business plan, but the announcement by the Minister of State for Commerce, Jairam Ramesh at the Indian Semiconductor Association summit here on Monday (Feb. 18) grabbed attention. 

A RIL spokesperson declined to comment on the minister's announcement. Industry observers attending the ISA said it is unlikely that Reliance would opt for a sand-to-silicon manufacturing model. 

"If they could invest the money in petrochemicals the returns they would get would be much more than what they would get in the semiconductor industry. The fundamental mantra of the Reliance group is to get 20 per cent returns year on year. I doubt whether they would go in for such a huge investment in the semiconductor sector at this point in time where tangible returns would come only after seven to 10 years," said one observer. 

But some venture capitalists tracking the semiconductor segment said a government-backed venture by Reliance could be part of a bigger sand-to-consumer strategy that could fit with the government's national development strategy. 

"I think it [the semiconductor plant] is a subset of a much bigger, comprehensive electronics manufacturing strategy that RIL is drawing up. You see the PC, laptop and cell phone market in India is exploding. For instance, India is adding 8 million phones a month and about 30 to 40 percent are being manufactured locally. If RIL is looking at the bigger picture which spans manufacturing across these two verticals, then setting up a manufacturing plant makes much more business sense," said Bob Kondamoori, managing partner of Sandalwood Partners (Santa Clara, Calif.), a venture capital firm that invests in India. 

"Today, at the current value, setting up a fab with a $5 billion to $7 billion investment is not possible. It would need to be more because the investment that went in from Chartered Semiconductor for its Singapore plant was close to $15 billion. If you were talking about this kind of a plant three years ago, it could be in that range (of $5 billion to $7 billion) but in todays scenario you would need $15 billion. And, it is not like an oil company blueprint  here you need a world class team and technologies put together to come up with a successful business venture," he noted.


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## Bushroda

*India to launch prototyping fab*
K.C. Krishnadas 
EE Times 
04/12/2007 3:54 PM 

BENGALURU, India  Construction will begin within the next 12 months on a prototype fab which will be part of the India Design Center in Kolkata. The fab is being established by the information technology ministry of West Bengal, with support likely from federal agencies. 

The prototype fab will be part of the approximately $120 million design center which also houses incubation centers, chip design and EDA tool development companies. Once the facility is ready, it will serve as the first domestic fab for chip prototyping. 

Debesh Das, West Bengal's minister for information technology, said the prototype fab is intended for emerging Indian companies. 

Das, a former professor of test technologies, said the state government will also look at offering venture capital to design startups. 

According to Pradip Dutta, managing director of Synopsys (India), "The prototype fab will help fabless startups in India who can try out their chips here instead of committing to a foundry elsewhere." He added that the fab will have facilities for characterization and "could even provide 45-nanometer process technologies for prototype purposes." 

The fab will be located near prestigious engineering institutes such as the Indian Institute of Technology, Kharagpur (IITK) and Jadavpur University. The former will be the technical partner for the prototype fab. 

Most Indian chip designers are located here or in Noida (near New Delhi), Hyderabad and Pune. Synopsys said it is not now considering a tool development center in the proposed facility since it has facilities around the country, Dutta said. 

Anand Anandkumar, managing director of Magma Design Automation's Indian operations, also said it has no current plans to launch an additional design center in Kolkata. 

Poornima Shenoy, president, India Semiconductor Association, predicted the project will push the Indian semiconductor design ecosystem to a higher level. "Given that the industry is battling a shortage of talent, the emergence of a new center is always welcome," Sheny said. 

Others noted that the Kolkatta fab will compete with the existing infrastructure in Bengaluru. "A lot of factors will have to play together" for the new fab to attract customers, said chip industry consultant P.V.G. Menon. 

Still, Das said several companies have indicated an interest in setting up operations at the new center. In response, the West Bengal government is planning another facility near IITK to house chip design companies.


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## Bushroda

*Indian Employees Enjoying Swiftest Pay Hikes*
Ruth David, 
FORBES, NY
02.20.08, 4:22 AM ET

MUMBAI - Indian employees were at the top of the heap worldwide when it came to salary hikes in 2007, averaging increases of 15.1%, with the highest pay raises in real estate, a new study from Hewitt Associates revealed.

As the fight for talent intensified last year, salary hikes rose from the previous years average of 14.4%, according to the study. In 2008, compensation is expected to increase by an average of 15.2%, making it the fifth consecutive year that salaries have risen in excess of 10%.

"The struggle for talent and sustainability is large and rapidly growing in India. Organizations are using compensation as a strategic lever in attracting, retaining and motivating talent," said Sandeep Chaudhary, head of Hewitt's India rewards consulting practice. Hewitt said it had surveyed 540 companies in the country between November and January. The global average increase is estimated at 6%.

Real estate salaries grew by an average of 25.2%, compared with 17.6% in retail and 16.4% in banking and finance. Technology companies have been reporting average wage hikes of about 15%. At an industry summit last month, management executives at a host of companies said finding talent was a key industry challenge. (See: " Indian IT Firms Facing Employee Wage, Quality Pressures")

Staff turnover rates have reached an all-time high in India, Hewitt found, with the insurance industry reporting the highest rate at 35.2%. This was followed by information technology services at 28.9% and the hospitality/restaurants industry at 27.1%. But, as cost pressures rise, companies will have to look beyond compensation and find other ways to retain talent, Hewitt said.

The two fastest-growing cost components in the Indian business environment are real estate and talent. Information technology and outsourcing companies, which are dependent on the U.S. economy for absorbing more than 75% of their production, are now concerned about how to manage these resources, Hewitt found. The rupee appreciated about 12% against the dollar last year, eating into revenue gains for export industries.

Increasingly, middle-management salary increases have also started climbing, accelerating to 15.7% last year. This is largely as a result of a shortage of managerial and technical talent in India, said Hewitt, which estimates that India faces a shortage of leadership talent of 26%.


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## Bushroda

*India way ahead of China in economic transformation*
Tehran Times, Iran
Wednesday, February 20, 2008 

*India has been ranked 25th in terms of economic transformation, way ahead of worlds fastest growing economy China, which has been placed at the 85th position by a German foundation. *

India ranks just behind Singapore (23), Brazil (20) and South Africa (18) in the transformation index prepared by German Bertelsmann Foundation and published in Berlin. 

The transformation index is a study of market economics and democracy in 125 transformation states. 

In terms of management performance, India has attained the 19th position for its political decision making, equivalent to an improvement of 13 rankings on the previous comparative investigation conducted two years ago and 24 rankings higher than five years ago, the report said. 

The plans of the Indian government to shape the country to become a developed economy and a key player in international politics are now bearing fruit, Josef Janning of the Bertelsmann Foundation said. 

India should also exploit this favorable situation to increase efforts to tackle its greatest problem: the continuously pronounced inequalities in the society, particularly in terms of education, health, social security and earnings, Janning added. 

The creation of a greater equilibrium between the regions and enabling as many people as possible to share in economic success should be central objectives of future policy, he said. 

The report recommended that India should continue to pursue economic reforms rigorously to sustain the growth rate of eight percent. 

The Transformation Index 2008 in terms of economic transformation has been topped by Czech Republic, followed by Slovenia. In terms of the management index, Chile lead the pack, followed by Estonia. However, Myanmar (124) and Somalia (125) are the tail-enders in the index. 

India appears for the first time in the group of stable democracies. 

The country has one of the most dynamic national economies in the world is beyond doubt, but deficiencies in the area of reform have threatened to block this development, the report stated. 

The country is well placed in terms of the management index ranking ahead of Singapore (32rd) and China (67th). 

The appraisal primarily lauds Indias efforts to achieve peaceful integration of ethnic minorities and its international cooperation with its regional partners, particularly Pakistan. However, continuing weaknesses include a cumbersome justice system and inadequate protection of civil rights in conflict regions, the report said. 

The evaluation of India in the appraisal is embedded in the analysis of overall development in Asia. This has seen economies in the northern Asian landscape achieving the fastest international growth rates in recent decades. 

India, has rapidly developed in about a decade to become a global economic power, the report said, adding that excellent economic performance has also been witnessed in China and Singapore. 

A negative aspect is also the fact that the population in only nine of the 21 countries investigated is able to freely elect their rulers.


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## Bushroda

*BULGING FOREX RESERVES, STRONG RUPEE POSE CHALLENGES FOR INDIA*
Trading Markets, CA
Tuesday, February 19, 2008


MUMBAI, Feb 20, 2008 (AsiaPulse via COMTEX) -- IBN | news | PowerRating | PR Charts -- The growing Indian economy will have to learn to deal with the challenges of burgeoning forex reserves and a sharply appreciating rupee in the coming years, a top banker said today. 

"Given the growth in the economy, the rupee is going to strengthen further in the coming years. How to utilise the rising (forex) balances is another issue," ICICI Bank (BSE:532174) Managing Director and CEO K V Kamath told a CII-seminar here. 

The country's foreign exchange reserves stood at nearly US$291 billion for the week ended February 8 and the domestic currency has appreciated by over 10 per cent against the dollar in calendar 2007. 

Citing the creation of Sovereign Wealth Funds (SWF), in countries like China, Mr Kamath said, "the SWF is going to play an important part in the economic growth of emerging markets." 

"SWFs provided a bailout of nearly US$70 billion to companies affected by the US sub-prime crisis," Mr Kamath said. 

"Of the US$700 billion of estimated spend in the country's development, US$500 billion is likely to come from Indian companies or foreign companies operating in India," he said. 

"This shows the growth is possible internally," he said. 

He pointed out that India's growth is mainly driven by the booming services industries unlike China, Japan, Taiwan and South Korea, whose growth is driven by their manufacturing sectors. 

"Services contribute around 60 per cent to the national GDP, while the share of manufacturing is only 25 per cent." 

The CEO of the India's largest private sector lender said that around 600 million people in the country are yet to be brought under the banking system and this provides a great opportunity to the domestic banking sector.


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## Bushroda

*India, France, Japan May Join Sovereign-Wealth Arms Race*
Gregory Corcoran 
Wall Street Journal

*Is the world beset by dangerous proliferation? 

Sovereign-wealth fund proliferation, that is.*

Last weekend, the Economic Times reported India was considering setting up a sovereign-wealth fund to invest a small portion of the countrys foreign-exchange reserves, a report echoed today by Reuters. (Indias foreign-exchange reserves were $291 billion as at Feb.8, up 57% from a year earlier.)

Today, AFP reports that Japans ruling Liberal Democratic Party will set up a task force this week to study the creation of a sovereign-wealth fund, citing a party official, using that countrys forex reserves. (Those reserves hit $996.04 billion last month, the worlds second-largest behind China.)

Is it getting crowded in the government-investment fund arena, or is it just us? Already there is, by some estimates, $2.5 trillion to $3 trillion held by government investment funds in 15 countries. Total assets are expected to increase to $15 trillion to $20 trillion in the next five years, equivalent to 10% of the worlds capital. 

Governments say these are but passive investment vehicles for squeezing a few extra percentage points out of cash reserves. But the envious reactions from rival governments show that this is quickly become a strategic, political arms race.

Perhaps thats why there is no shortage of alarmism sparked by the increasing buying activity of such funds. Vehicles from Asia and the Middle East have pumped roughly $69 billion into ailing U.S. financial institutions since the credit crunch hit in June. And fund officials have found themselves on the the defensive as politicians from Australia to the U.S. and Europe have threatened closer scrutiny of such investments at least and have rattled the protectionist cages at most.

Certainly the Indian and Japanese proposals are couched in good investing vernacular. Witness an official quoted in the Economic Times article: The country has piled up large forex reserves for sucking liquidity.The reserves have associated costs. Up to a certain level, the costs are justified in minimising[sic] risk of fluctuations and any kind of shocks. Beyond a point, however, costs cannot be justified and therefore we need to find other ways to earn revenue, the official said. 

Interesting is Indias preferred investing targets: energy assets abroadjust the thing to secure the continued growth of Indias sizzling economy.

Thank goodness, then, for plain-speaking French folks like Finance Minister Christine Lagarde, who in a recent television debate more nakedly said she is seduced by idea of a French government investment fund to counter the rising power of the state-owned funds from the developed world. In time maybe we might be able to look up that French fund at the Web site Les-etats-cest-moi.com.


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## Bushroda

*India and China complementary economies: Zheng Xinli*
19 February 2008 

New Delhi: The Chinese and Indian economies are highly complementary and have great potential for bilateral trade and investment relations, with trade worth $40 billion between the two countries being reached two years ahead of target, Zheng Xinli, deputy chief of the Policy Research Office, central committee of the Communist Party of China has said. 

Zheng was speaking at a conference on 'The Chinese economy and society in transition: policies, prospects and challenges', organised by the Confederation of Indian Industry (CII) and the Institute of Chinese Studies. 

One of the architects of policy directions taken in China, Zheng was present at the conference along with Zhang Yan, ambassador of the People's Republic of China to India, Dr Patricia Uberoi, director, Institute of Chinese Studies, and Dr Lu Wei.

Speaking at length about the economic and social changes in China over the last 25 years, Zheng asserted that China was on an economic path where it aimed to "quadruple the per-capita GDP of the year 2000 by 2020." 

Since 1978, China's GDP had fluctuated for the first 25 years, but has witnessed steady growth since 2000. While per capita GDP was a mere US$250 in 1978, in 2007, it had increased to US$2500. 

China's priority, Zheng said, was development 'for the people, by the people and with the people sharing its fruits." He also emphasised the importance of sustainable development. 

Zheng mentioned that India and China had common challenges in agriculture, rural industry and social security. China, he said, could learn from India in the services sector, and the slowing down of the US economy provides opportunities for both countries to sustain economic growth through increase in demand and consumption.

Zhang Yan, China's ambassador to India, spoke of the shared vision signed by the prime ministers of China and India recently during Prime Minister Manmohan Singh's visit to China. He said, "Learning from each other and through strategic cooperation, China and India will walk shoulder to shoulder to make the 'Asian Century' and the hope of a more harmonious world would come true."


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## Bushroda

*Microsoft India opens Tech Lab at IIT Madras* 
By CXOtoday Staff 
Mumbai, Feb 19, 2008 

Microsoft India has inaugurated a technology laboratory at the Indian Institute of Technology, Madras (IITM). The IITM Microsoft Windows Technologies Lab has been envisaged as a hub that will harness innovations through research, and provide a platform for faculty and students to leverage the platform for a variety of research and trainings. T.A Gonsalves, head of CSE, and Will Poole, vice president of Microsoft, inaugurated the laboratory. 

Microsoft Unlimited Potential focuses on transforming education, fostering local innovation and enabling jobs & opportunities through relevant, accessible, and affordable technology solutions. The laboratory is part of the same initiative. 

Latif Nathani, general manager, (Unlimited Potential Group), Microsoft India, said, "Education and enhancement of technological skills remains crucial for India's continued growth. The investments made in it over the years have propelled India's growth in the knowledge economy; and if India has to continue to exert an even greater influence across the globe, it will have to foster innovation. We at Microsoft believe that it is critical to continue the focus on education and this laboratory at one of the country's premier institutions is a step towards harnessing the potential of our youth". 

The laboratory will offer MS technology for the faculty and students to work with. In addition to helping students with their B Tech and M Tech projects, as well as MS and PhD research, the laboratory will have experts from Microsoft visit the institution regularly to conduct seminars and workshops. The company envisages that an integration of research and innovation will in the long term enable incubations from the Institute and beyond. 

V Kamakoti, of department of CSE, said, "With the advent of multicore architectures, deep understanding of the internals of operating systems is crucial to ensure efficient utilization of the underlying hardware. This IIT M-Microsoft interaction shall enable this." 

The initial focus in the Lab will be on Windows terminal services, device drivers, Windows Embedded, networking protocols, Windows Kernel, Windows Mobile, and Multi-modal localization.


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## Energon

^^ This is great news. The one thing I've noticed about India is the absence of a strong relationship between the private sector, educational institutions and the government. Dr. Kalam has come up with many novel ideas to establish this "golden triangle" and I'm glad to see that progress is being made on this front. It's just too bad that the initiatives are coming from foreign companies and not local conglomerates.

However, a true golden triangle cannot be complete unless India first establishes intellectual property rights systems.


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## Bushroda

*More Ways to Invest in India*
*Two exchange-traded funds focusing on this fast-growing nation debut this month.*

By Amy Bickers
February 21, 2008

India is one of the great economic growth stories of the 21st century. The nation has undergone an astonishing transformation over the past 17 years, as the government has shifted away from socialism and opened and reformed its economy. Today, India (along with China) is one of the fastest-growing countries in the developing world. 

India's powerful economic growth, coming from expansion in both services and manufacturing, is a strong indicator of its burgeoning economic clout. According to the government, gross domestic product in India expanded by 9.6% in 2007 and 9.4% in 2006, helping to make the economy the world's 12th largest. 

Fueling the expansion has been rapid growth in services, including call centers, software design and back-office out-sourcing. The ability of Indian companies to design and produce well-made goods at a fraction of U.S. costs has also helped India become a major exporter.

The booming economy, hefty corporate profits and an unprecedented flow of foreign investment have propelled a spectacular surge in Indian share prices. Over the past five years through February 20, the Bombay Stock Exchange's 30-stock Sensitive Index, or Sensex, returned an annualized 40%. Real estate, banking and information-technology stocks have been at the forefront of the boom. 

The outlook for the Indian economy remains bright, but the picture for Indian stocks is murkier. Volatility has increased amid concerns about the global credit crunch and the rupee's strength against the dollar, which hurts Indian exporters. Year-to-date through February 20 the Sensex has lost 13%. 

Meanwhile, the fund industry is supplying U.S. investors with an expanding range of choices for investing in India. The first of two exchange-traded funds that focus on India is due to launch on February 22, and the second one is expected to follow quickly. 

ETFs, which trade just like stocks, are funds that hold pools of securities and are designed to follow a specific index. They include mechanisms designed to keep the funds' share prices close to the value of their underlying assets.

Emerging from the gate first is WisdomTree India Earnings. Relative stock weightings in this ETF, like others from WisdomTree, will be based on a company's earnings rather than market capitalization. The ETF (symbol EPI) will draw from a universe of 150 profitable Indian companies that WisdomTree will reviewed annually.

WidsomTree's research director, Luciano Siracusano, says it's important for investors to consider the fund in the context of their overall investment plan. "People need diversity by having exposure around the world," he says. "But investing in India and other emerging markets should be done in the context of a larger global asset allocation model."

Also due out soon is PowerShares India Portfolio (PIN). This ETF, which is scheduled to start trading before March 1, will track an index of 50 stocks developed by Indus Advisors. The index is designed to represent the overall Indian stock market. 

Exchange-traded notes are similar to ETFs. But instead of owning a basket of stocks, as ETFs do, ETNs are a type of debt instrument that's linked to the performance of an underlying index. 

The iPath MSCI India ETN (INP), tracks a group of 62 Indian stocks. But because of a decision by Indian securities regulators, this ETN's sponsor, Barclays Bank, cannot issue more shares. As a result, the ETN now trades like a closed-end fund (see more on closed-ends below). 

The ETN had a great run in 2007, but '08 has been a stinker. The stock, which closed at $76.38 on Feburary 21, is 35% off the $118 intra-day high it hit on January 14.

For investors who want a traditional open-end fund, all but one of the five choices are unattractive because they levy sales charges. The exception is the no-load Matthews India fund (MINDX). In 2006, its first full year, the fund returned 36%, compared with a 47% gain by the SENSEX index. However, in 2007, Matthews India soared 64%, outrunning the benchmark index by 17 percentage points. 

So far, 2008 has been difficult. The fund has lost 17% year-to-date through February 21. Co-manager Sharat Shroff attributes the drop to the fund's heavy weighting in consumer stocks, which have performed poorly recently. "People in India are buying cars and cell phones and taking out mortgages for the first time and we are focused on that domestic consumption," says Shroff. 

Key holdings include Infosys Technologies (INFY), a technology outsourcing company; Dabur India, a healthcare company; and wireless-phone service provider. Matthews India requires $2,500 to start. It carries a reasonable annual expense ratio of 1.41%, and charges a 2% redemption fee on shares sold within 90 days of purchase.

The only other open-end fund with a track record of at least a year is Eaton Vance Greater India. Its class A shares (ETGIX), which levy a front-end sales charge of 5.75%, have returned an annualized 45% over the past five years through February 20. Top holdings include industrial materials giant Reliance Industries and HDFC Bank.

Investors can also buy into India through two closed-end funds. Closed-ends issue a set number of shares and then trade just like stocks. Supply and demand determine the price of closed-end shares, which typically trade above or below the underlying value of the funds' assets. 

Both India closed-ends earned astronomical returns in 2007. On the basis of its net asset value (NAV) per share, Morgan Stanley India Investment fund (IIF) soared 70% in 2007, while its share price jumped 50%. Over the past five years through February 15, the fund gained 48% annualized on assets and 51% annualized on the basis of its share price. 

But the fund's NAV has dropped 16% so far this year, and its share price has fallen 20%. As of February 20, the fund, which closed that day at $43.40, sold at a 5.9% discount to NAV. The fund's annual expense ratio is 1.35%. 

The performance of India fund (IFN) has been similar. Over the past five years through February 15, it returned 44% annualized on assets and 46% annualized on its shares. Year-to-date, the fund has dropped 15% and 16% on NAV and share price, respectively. 

The fund, which carries an expense ratio if 1.41%, recently sold for a 5% discount to NAV. The shares closed at $52.47 on February 20.


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## Bushroda

*U.S workers fear for their jobs as Indian salaries boom*
Nic Paton
Management Issues, UK
22 Feb 2008

A third of American firms are considering freezing their hiring or even cutting staff as the financial turmoil following the sub-prime mortgage-led credit crunch starts to bite ever more deeply.

Yet at the same time across the globe their counterparts in India are revelling in record pay rises.

Figures from the U.S. Labor Department have shown a slowdown in hiring activity in December, although this is traditionally one of the slower months for hiring anyway.

There were 4.6 million new hires hired during the month, down from a peak of 5.1 million in July 2006, and 4.04 million job openings, down from 4.4 million at the same point a year ago.

The employment consultancy Mercer has also warned that firms are starting to take "a harder line on adding staff", with job-seekers finding it harder to switch jobs too.

A study by consultancy Spherion has concluded that overall worker job confidence fell for the sixth consecutive month in a row in January, and was now at its lowest level since the survey started in 2004.

The survey of 3,137 employed adults showed that 16 per cent of workers believed there were more jobs available, down from 19 per cent in December.

Just nine per cent of workers believed the economy was getting stronger in January, down from 12 per cent in December.

But while American workers are suffering, their counterparts in India are laughing all the way to the bank.

Fuelled by a booming economy, growing at between 8-9 per cent, Indians are now enjoying some of the highest salary hikes in the world.

Salaries were expected to rise by 15.2 per cent this year, against 15.1 per cent last year, according to a survey by consultancy Hewitt Associates.

The pace of economic growth rate was giving employees greater career opportunities than ever before, while employers were increasingly using compensation as way to attract and retain key workers, said Sandeep Chaudhary, leader of Hewitt's rewards consulting practice in India.

But he also predicted the annual increase in salary might come down and stabilise to between 9-10 per cent by 2012.

And, in perhaps the quirkiest survey of the week, fewer than a tenth of U.S. workers, meanwhile, have said that if their job was a person they would love it enough to marry it.

While four out of 10 of the 1,215 workers surveyed by research firm Taleo said their relationship with their job was "OK", a third, perhaps worryingly, said they liked their job enough to date it.

A total of five per cent hated their job and would break up with it immediately if it were a person, the survey added.


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## Bushroda

*Englishman's wealth of ideas helping India to milk its latest cash cow*
Mark Souster
The Times, UK
February 22, 2008

It began with a gentlemanly chat over a cup of tea at Wimbledon eight months ago and this week turned into the most valuable start-up event in sporting history and a tournament worth possibly $3.5billion (about £1.8 billion) over the next decade. When Andrew Wildblood, a senior vice-president and corporate director for India at IMG, sat down at the All England Club last July with Lalit Modi, the vice-president of the BCCI, both men shared a vision. They wanted to re-energise Indian domestic cricket and to tap into the apparently insatiable demand for the sport in the country. 

The constraints of the domestic calendar mean that there will not be any Englishmen actively involved in the inaugural DFL Indian Premier League that starts in April, but Wildblood will be there to see the fruition of his IMG team's work. 

It is a concept that has gripped the imagination of the cricketing world, one that before a ball has been bowled appears to have brought together sport, showbiz and big business, with Bollywood stars and mega-rich tycoons and conglomerates vying for the prestige of owning a team. 

The financial figures are mind- boggling, akin to a modern-day gold rush, not least for the players. Mukesh Ambani, one of India's richest men, paid more for the Bombay franchise than Randy Lerner did to buy Aston Villa, who came complete with £30million of Birmingham real estate. Mahendra Singh Dhoni is, temporarily at least, earning more per week than Cristiano Ronaldo. Television rights went for more than $1billion. 

So how did it come about? Initially, we kicked around a few ideas, Wildblood said yesterday from India, which over the past months has become a second home as he and his team work ceaselessly to overcome the hurdles inherent in establishing such a tournament from scratch. It has been a huge undertaking with an array of processes that all had to be rigorously tested. 

For some time, Lalit had had a vision of what he wanted and in order to do that we agreed it had to be based upon a city to city format rather than state to state, Wildblood said. It was a broad vision with no meat on the bone. We also concurred that the model should be based on US-style franchises whereby the owners of the teams would also benefit from the properties that were sold as a consequence of the creation of the product, ie, television and sponsorship. 

Within a month the concept had taken shape. Eight city teams will play home and away, with 59 matches over 44 days taking place almost exclusively during prime-time television hours, using the Twenty20 format. A commercial structure was developed to wrap around the sporting model to create an investment vehicle that would prove attractive to owners. 

I knew it would be huge, Wildblood, 50, who is married with two children and lives in London, said. There is nothing else that has been launched as a start-up that comes anywhere near to it in sport. We got a little lucky when India won the inaugural Twenty20 World Cup, which transformed the perception of that type of cricket into the format which 76 per cent of the population now say is their favourite. 

It has been the project of a lifetime, one of the biggest single things that IMG has ever done. From a business context, it has been life-fulfilling. 

It has comes as a result of an incredible convergence of a number of things: the advent of Twenty20, the development of the Indian economy, the desire to regenerate the stadium infrastructure before the 2011 cricket World Cup that India will co-host and the demand for more entertainment opportunities in a maturing economy. 

IMG has done a pretty amazing job, he said. There have been bear traps all the way down the line, but we have managed to avoid them because we have been incredibly rigorous and determined that what we constructed was totally robust. 

Modi agreed. At the culmination of the auction of the world's best players on Tuesday, he paid the ultimate compliment to the company without which Modi said the IPL would have been stillborn. When the first ball is bowled on April 18, in the match between Bangalore and Kolkata, Wildblood will be entitled to feel satisfied at a job well done.


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## Bushroda

*India ranks high among transformation States* 
V. Jayanth 

*Social disparities represent a serious burden: study *

CHENNAI: India has climbed up in the rankings in a study of market economics and democracy in 125 transformation States published by an independent German foundation earlier this week.

The study places India at the 25th position in terms of development, just behind Singapore, Brazil and South Africa. 

India has reached the 19th spot in an evaluation of the management performance of its political decision-makers, equivalent to an improvement of 13 places on the previous study in 2006.

The study was conducted by the Bertelsmann Foundation, and lauds Indias efforts to achieve peaceful integration of ethnic minorities and its international cooperation with its regional partners, particularly Pakistan. However, continuing weaknesses include a cumbersome justice system and inadequate protection of civil rights in conflict regions.

Josef Janning of the Bertelsmann Foundation said in a release: The plans of the Indian government to shape the country to become a developed economy and a key player in international politics are now bearing fruit. India should also exploit this favourable situation to increase efforts to tackle its greatest problem: the continuingly pronounced inequalities in society, particularly in terms of education, health, social security, and earnings.

The creation of a greater equilibrium between the regions and enabling as many people as possible to share in economic success should be central objectives of future policy.

The foundations study has seen the national economies in the northern Asian landscape achieving the fastest international growth rates in recent decades. 

The peer group distinguished by excellent economic performance consists of China, Singapore, and most importantly, India, which has rapidly developed in about a decade to become a global economic power. With regard to social market economics, only Singapore has managed to reach the peak in a regional comparison with this trio, closely followed by South Korea and Taiwan. These are faced by large areas of southern Asia and important regions in South East Asia, which are dislocated from this dynamic economic growth.

Another feature of the study relates to the democratic aspect of these economies, with the conclusion: On the whole, no important successes in democratization can be determined for the investigation period. The stagnation already detected in 2006 continues to prevail. 

Concerns have been raised about the developments in Indonesia, Sri Lanka, Papua New Guinea, the Philippines, and Thailand. The German foundation is a non-profit organisation established in 1977 and this study, carried out every two years, analyses and evaluates the quality of democracy, market economics and political management in 125 developing and transformation countries.


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## Bushroda

*As Venture Money Floods India, Two New England Firms Are Among Top Investors*
Wade Roush
Xconomy, MA 
2/21/08 

A report from Dow Jones VentureSource shows that venture capital investment collected by entrepreneurs in India nearly tripled in 2007, totaling $928 million across 80 separate deals, as compared to just $349 million for 36 deals in 2006. It was easily the highest total on record for the region, according to the Dow Jones report, which was released today. Some 48 percent of the funding went to information technology companies, and two IT-focused New England firms, Waltham, MA-based Matrix Partners and Westport, CT-based Canaan Partners, were among the top 10 venture firms sending money to India, closing five deals between them.

Within Indias IT sector, Web-based information services companies captured the biggest chunk of venture cash, accounting for 22 deals worth almost $141 million. ItzCash, the Mumbai-based company behind a new form of pre-paid cash card, is a prime example. With a $10 million investment from Matrix Partners and Intel Capital, ItzCash has created a system that allows Indian consumers to load their cards with 100 to 10,000 rupees (about $2.50 to $250) and use the cards to pay in person, online, or via text messages for things like Internet access, online shopping, utility bills, railway tickets, insurance, and even donations to Hindu temples.

Service-oriented companies in India.continue to attract investment and this is likely due to their low capital requirements as well as to the rapidly emerging nature of the broader Indian economy, Jessica Canning, Dow Jones VentureSources director of global research, said in the companys release today. It takes relatively little money and little time for these kinds of companies to begin generating revenues and, because of this, Web-related and consumer and business services companies accounted for more than half of all the venture capital deals done in India in 2007.

While U.S.-based venture firms still lead the way when it comes to investing in Indian entrepreneurs, investors from other countries are gaining interest. U.S.-headquartered VC firms led 52.5 percent of the Indian venture deals in 2007, compared to 64 percent in 2006 and 60 percent in 2005, Dow Jones reported.


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## Bushroda

*Indian Banks Feeling Pressure To Cut Rates*
Ruth David, 
FORBES, NY
02.21.08, 11:49 AM ET

MUMBAI - As Indias government attempts to spur consumption with the help of reduced interest rates, the banking sector is feeling the heat. State-run banks led by Indias largest, the State Bank of India, cut interest rates this week, putting pressure on private sector lenders to follow suit. 

On Wednesday the State Bank of India (other-otc: SBKFF - news - people ) and Canara Bank cut rates by 25 basis points each, while Union Bank of India and Bank of India reduced their rates by 50 basis points each. This is the State Bank's second 25-basis-point cut in its prime lending rate in less than 10 days. Some state-run banks said they were reviewing rates and could announce a cut after the union budget later this month. Larger private lenders like ICICI Bank (nyse: IBN - news - people ) and HDFC Bank (nyse: HDB - news - people ) haven't yet followed suit.

Earlier this month, Finance Minister Palaniappan Chidambaram said there was a feeling "adequate credit" was not being provided to the housing and consumer goods sectors, and he had asked banks to ensure credit to both sectors, which are drivers of the economy. Banks raised interest rates last year in response to the central banks policy of monetary tightening. The resultant high lending rates dampened demand in sectors like housing and automobiles, which are financed primarily by loans.

Loan growth for 2007 stood at about 22%, against 28% in the previous year.

Indias economic growth is forecast to be 8.7% for the financial year ending March 31, its lowest level in three years, as a slowdown in consumption hits industry. Last year, the economy grew 9.6%. As the country goes to polls next year, the pressure on banks to keep rates low is unlikely to end soon.

"The cost of borrowing hasnt come down, so such cuts will result in pressure on margins. The banking sector will see a 10 to 15 basis point impact on net profitability margins this year [ending in March]," said Tarun Bhatia, head of corporate and finance ratings at Crisil, the Indian arm of Standard and Poor's. He said most banks are now at least re-evaluating whether they should reduce prime lending rates, which were hiked by an average of 150 basis points over the past 18 months. "This market is very competitive, and if the bigger banks reduce rates, others are likely to follow suit," Bhatia remarked. 

Commercial lenders are also more comfortable with lowering rates now because they don't expect another rate hike from the central bank. The bank held rates steady at its last meeting in January.


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## Bushroda

*Venture Capital Investment in India Reaches a Record $928 Million in 2007*
*Dow Jones VentureSource Shows Annual VC Investment Skyrockets 166%; Consumer/Business Services & Web-Related Companies Account for More than Half of All Deals*

BANGALORE, Mumbai and NEW DELHI, Feb. 21 /PRNewswire/ -- Venture capitalists invested some $928 million in 80 deals for entrepreneurial companies in India during 2007, according to the Quarterly India Venture Capital Report published today by Dow Jones VentureSource. This was a whopping 166% increase over the $349 million invested in 36 deals in 2006 and easily the highest total on record for the region.

The report found nearly 48% of all venture financing deals in India were for Information Technology (IT) companies, as 38 rounds were completed, accounting for $384 million, more than India's entire 2006 venture investment total. The most popular recipients of venture capital in the IT industry were companies in the Web-heavy "information services" sector, which accounted for 22 deals and nearly $141 million in investment. Among the deals in this area was the $10 million second round for Bangalore-based Four Interactive, an online provider of local information on food, events, lifestyle, shopping and more.

"Service-oriented companies in India -- both in the technology fields and the non-technology areas of hotels, taxis and similar services -- continue to attract investment and this is likely due to their low capital requirements as well as to the rapidly emerging nature of the broader Indian economy," said Jessica Canning, Director of Global Research for Dow Jones VentureSource, "It takes relatively little money and little time for these kinds of companies to begin generating revenues and, because of this, Web-related and consumer and business services companies accounted for more than half of all the venture capital deals done in India in 2007."

According to the data, the overall business/consumer/retail industry saw 30 deals completed in 2007 and more than $346 million invested, a 92% jump over the $180 million invested in 16 deals in the industry in 2006. As said, the business/consumer service area accounted for the bulk of the interest in this industry, with 22 deals and $254 million invested.

India's health care industry, while still in its infancy, also saw increased investor interest in 2007 with seven completed deals and nearly $100 million invested, more than double the $41 million invested in the prior year.

"This is only the beginning for the venture capital market in India," said Ms. Canning. "In 2007, 79% of all deals in India were for seed and first rounds and a lot of these companies will continue raising venture capital as they progress toward profitability and liquidity. And because the majority of investment is going to early-stage companies, we aren't seeing ballooning deal sizes like those in the U.S. and Europe where investors are focused more on later-stage companies."

In fact, the median size of a venture capital round for companies India was $9 million in 2007, up slightly from $8.7 million in 2006 but well below the $18.8 million median seen in 2005. Of all the companies in India that received venture funding in 2007, nearly 73% were already generating revenues or profitable.

The Quarterly India Venture Capital Report covers venture capital investment specifically, which Dow Jones VentureSource defines as growth capital made available to entrepreneurial companies in exchange for ownership in the form of private securities. These investments are often seen as shorter-term and do not include private equity investments such as leveraged buyouts or mezzanine and debt financing.

The investment figures included in this release are based on aggregate findings of VentureSource's proprietary Indian research and are contained in VentureSource. This data was collected by surveying professional venture capital firms, through in-depth interviews with company CEOs and CFOs, and from secondary sources. These venture capital statistics are for equity investments into early-stage, innovative companies and do not include companies receiving funding solely from corporate, individual, and/or government investors. No statement herein is to be construed as a recommendation to buy or sell securities or to provide investment advice.


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## Neo

*India to invest $2.5bn in SBI rights shares ​*
NEW DELHI: The Indian cabinet on Thursday approved a government proposal to invest Rs 99.96 billion ($2.5 billion) in the rights share offering by State Bank of India , the countrys biggest lender, a spokeswoman said. SBI, 59.7 percent owned by the government, launched the rights share sale on February 18, hoping to raise $4.2 billion. 

The spokeswoman said the government would issue special marketable securities, instead of an earlier commitment to issue bonds that would qualify for statutory liquidity reserves (SLR) of commercial banks. The cabinet also modified an earlier proposal to invest 100 billion rupees in the rights issue. Banks in India are required to hold at least 25 percent of their deposits in government securities under the SLR norm. SBI is offering one rights share at 1,590 rupees for every five held. 

The sale is open for one month. On receipt of the approval of cabinet, the transaction will be completed within this financial year, the spokeswoman said. The funds will be used to meet rising loan demand in a fast-growing economy. Shares in the bank fell 1.2 percent on Thursday to 2,179.30 rupees in a Mumbai market that closed 0.7 percent higher. The government is estimated to receive 14.5 billion rupees in dividend and taxes from SBI in the fiscal year ending in March, the spokeswoman said. State-run firms in India that make profits are required to pay 20-30 percent dividend annually to the government. reuters

Daily Times - Leading News Resource of Pakistan


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## Neo

*India okays $125m interest subsidy for exporters ​*
NEW DELHI: The Indian cabinet on Thursday approved an extra spending of Rs 5 billion ($125 million) to subsidise interest rates on loans for exporters, a government spokeswoman said, to help soften the blow from a firmer rupee. 

The measure will ensure mitigation of the effect of rupee appreciation across the export sectors and will ... enable them to achieve export targets, she said. 

The move comes two days after India extended tax breaks to exporters to cover their transport and storage of goods. 

The rupee had climbed more than 12 percent in 2007 against the dollar, squeezing the profit margins of export-led companies such textiles and marine products. Last year, India set aside 3 billion rupees for a scheme where government shared the burden of exporters by paying 2 percent of the interest on their bank loans. reuters

Daily Times - Leading News Resource of Pakistan


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## Bushroda

*Renault and Nissan roar ahead with $1bn Indian plant after signing MoU*
Gulf Times, Qatar
Saturday, 23 February, 2008, 01:27 AM Doha Time 

PARIS/CHENNAI: France's Renault and Japan's Nissan yesterday signed an agreement for a $1bn car plant in southern India, forging ahead in the growing economy despite a local partner dropping out.

Renault has a 44% stake in Nissan and their alliance is the number three car grouping in the world after General Motors and Toyota Motor.

They signed a memorandum of understanding with the government of Tamil Nadu for a plant near Chennai.

Originally it was to be set up with local car maker Mahindra & Mahindra, but the latter withdrew from the project after the alliance's decision to make a car costing less than $3,000 with motorbike maker Bajaj in Pune.

Mahindra & Mahindra has been a partner for the no-frills Logan in India since May 2007, but the firm had more global and upmarket plans than the Chennai plans of the alliance.

Mahindra & Mahindra had been a bidder for the Ford Motor Co, Land Rover and Jaguar brands until Tata was picked as preferred buyer.

Tata also launched the Nano, a $2,500 car expected to roll out in October, which will take the concept of a no-frills car to a new level of low cost from the Logan.

The Tamil Nadu deal is for a 50/50 joint venture between the state and the two companies, which are committed to investing 780mn euros for an installed capacity of 400,000 vehicles a year within seven years, the statement said.

Production at the integrated greenfield automotive facility located in Oragadam, near Chennai, is due to start at the beginning of 2010.

The integrated facility will also include an engine and powertrain plant, also with a capacity of 400,000 units.

The 400,000-unit vehicle capacity will be divided almost equally between the two companies.

Nissan has four models in the pipeline for the plant and is developing an A-segment entry-level car, said Colin Dodge, senior vice president, general overseas market operations.

'Obviously, if you want to be in India you have to have a compact car,' Dodge said.

Small cars make up more than two-thirds of sales of passenger vehicles in India, which are expected to nearly double to 2mn units by 2010.

The unexpected pullout of Mahindra & Mahindra had led to a delay, said Patrick Pelata, executive vice president of Renault, but they were confident of making up for lost time.

'We expect that when the powertrain facility becomes operational, we will have about 80% of localisation. I won't be satisfied until we reach 90%,'* Pelata said.

Renault plans to make a range of vehicles at the Tamil Nadu plant for India and for export.

At the end of January, the Logan had a 12% market share in the so-called C segment, or medium-sized cars, with more than 20,000 vehicles sold.

On Monday, Carlos Ghosn, chief executive of both Nissan and Renault, said a deal between Renault and India's Bajaj to make a small car may materialise this year. This came amid speculation a decision was due in the coming weeks.


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## Bushroda

*Online Education Takes Off in India*
*The business of distance learning on the subcontinent is becoming so big that foreign universities and venture capitalists are taking note *

by Nandini Lakshman 
Businessweek

It's a Sunday afternoon and class time for 39-year-old IT worker Seema Shetty. Her feet curled under her in a swivel chair, she sits in front of a computer monitor, adjusts a set of headphones, and scribbles in a notebook. Shetty, who works for consulting firm Mastek in Mumbai, is in a virtual classroom in the Vile Parle suburb, where a dozen computers link students to some of India's elite management institutions. Today's class is a three-hour general management lecture, part of the online education course conducted by the Xavier Labor Relations Institute in Jamshedpur, in the remote northern Indian state of Jharkhand. 

A consultant for various industries from insurance to banking, Shetty signed up for an online certificate course to "learn more about my clients' business requirements," she says. By enrolling in the 14-month, six-hour-per-weekend online course, at a cost of $4,600, she can further her education without having to take a two-year career break to get an MBA. Learning online, says Shetty hopefully, "will definitely boost my job prospects." 

Shetty is part of a growing tribe of working professionals and students in India who have enrolled for online education certification. While it's difficult to determine numbers of students, the online education market in India today generates about $200 million in revenue, and industry experts expect it to touch $1 billion by the end of the decade. The winning proposition: Getting knowledge from top-notch professionals without disrupting fast-track careers. 

*Slaking a Thirst for Knowledge*

Mostly it's courses in engineering, management, finance, human resources, and mass communications available to individuals who feel they need some polish and a deeper understanding of their chosen subjects. Institutions, too, are big usersmost are short of staff and overwhelmed by the demand from students who want to be equipped with the best possible education to further their job prospects in India's rapidly expanding economy. 

Online education addresses some of India's shortcomings: a dismal education system, limited reach, and a severe paucity of faculty. "Even students from smaller engineering colleges feel they can now access the same courses our top students are exposed to," says Kanan Moudgaliya, head of the distance learning initiative at the Indian Institute of Technology (IIT) in Mumbai. 

The efforts to boost graduate education have begun right at the top. India is booming, and as new industries such as retail, real estate, and infrastructure grow, the talent crunch grows, too. In 2003, New Delhi made education a priority, boosting spending from 3% of gross domestic product to 5%. Upgrading the quality of higher education was key to its agenda. That's when the IITs and the leading business schools went online with their courses. There's both Web-based education, which puts course material online for students to download, and there's virtual learningthe kind that Shetty is undertaking. 

*Foreign Universities Heed the Call*

The biggest and most popular providers of online education are the IITs, leading business schools like the Indian Institutes of Management (IIMs), and private schools such as Sikkim Manipal University in northern India. In addition there are private online education services such as Educomp Solutions, Everonn Systems, and TutorVista. Last year, Rubin Das, 29, a midlevel restaurant manager at Mumbai's Grand Hyatt hotel, was one of the 120 students who enrolled for the online general management course for young managers at IIM-Calcutta. 

The 52-week course, which will end later this month, has taught Das "revenue and marketing management, which I had no clue about." "It enhances my chances to be a department head sooner," he says. 

This demand for online education in a hot market like India has also sparked the interest of foreign universities. In 2007, Carnegie Mellon University tied up with Shri Sivasubramaniya Nadar College of Engineering in Chennai, in southern India, to offer IT courses. The Massachusetts Institute of Technology is negotiating with the IITs. And Cornell University has struck a deal with South Indian service provider Easy Educate to offer courses in finance, management, and human resource to Indian students. 

Here's how it works. Each IIT has 500 courses in all, but its distance-learning offering is 50 courses: a combination of Webcasts, live lectures, and prerecorded lectures. Courses range from the study of nanoelectronics to an introduction to biochemical engineering for both college and individual students. All the IITs are negotiating with Google (GOOG) video, which will help students download lectures for free. 

*Funding from Venture Capitalists*

The IIT courses are also distributed to India's 1,500 state-run engineering colleges to spruce up their standards. This year, for instance, the College of Engineering in Pune, 200km from Mumbai, will host nine courses from IIT Mumbai, ranging from process instrumentation and control to software engineering, for 120 students. They are hugely popular. "These courses provide a quantum jump in the quality of our education for both staff and faculty," says Anil Sahasrabudhe, director of the college, who is on deputation from one of the IITs to boost education standards in the Pune institute. For instance, instead of developing many new courses, the institute can now pick and choose the courses taught by IIT professors. 

The opportunity is so enormous that venture capitalists have begun to fund online education companies. In 2007, they invested more than $74 million in Indian education companies and say the sector will be among the hottest in 2008. Think about it: Although India has a large, young population, it is not the most productive. Boosting basic education with a current online education certificate helps make Indians more employable. 

*Education Companies' Shares Soaring*

A 2005 McKinsey study on the Indian workforce concluded that just one-quarter of India's engineers and 15% of finance and accounting professionals had the skill sets to be able to work productively for multinational companies. K P Balaraj, a managing director at U.S. venture capital firm Sequoia Capital, has invested $2 million in TutorVista, an online tutorial company. "Employability is a big issue in India, and the immediate need is to cater to a very large job market that is not being met by school and college grads," he says. 

Investors like Balaraj will do well. Despite the recent fall of the market, the share prices of some of the listed education companies have continued to soar. Shares of Educomp, India's largest education company, are up 340% over the past 12 months, while the Everonn scrip increased 61% since its listing in August, 2007. Brokerage firms Credit Suisse (CS) and First Global have also bestowed "outperform" ratings on three out of the four listed education companies.


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## Bushroda

*Job creation set to continue in India*
Vedior, Netherlands

The deputy chairman of India's Planning Commission, Dr Montek Singh Ahluwalia, has predicted that even in the absence of labour reforms the Indian economy is likely to generate increasing numbers of jobs in the coming years.

Dr Ahluwalia attributed this to the country's high economic growth, which has reached nine per cent over the past three years, the Statesman reported.

He also pointed to India's fast-improving infrastructure and the government's realisation that the labour force needs to be equipped with better skills through simple training programmes. 

The chairman predicted that the country could sustain its growth rate, which - coupled with improved infrastructure and skills training - should translate into more and better job opportunities for the nation.

However, with employment currently estimated at eight per cent but the poverty level standing at 28 per cent, it is clear that employment generation alone will not be enough to dent poverty levels in India.

Australian newspaper the Age reported recently that India's economy is "surging" and may soon overtake China's as the fastest-growing in the world. 

The services sector is widely seen as the being primary driver of the country's rapid economic growth over the past decade.


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## Bushroda

*India rides growth wave into new age of tech globalization* 
Richard Wallace 
EE Times 
(02/22/2008 12:37 PM EST) 

No longer simply an epicenter of outsourcing, India is riding a new wave of globalization as the economics of the technology business turn it into a regional design and development hub. The subcontinent is seeing an explosion of business and forging IT partnerships with neighbors as diverse and disparate as China, Egypt, Pakistan, Australia and Dubai, as these and other would-be technology players strive to usher in a new phase of tech-driven development to the region, which includes North Africa, the Middle East and the Gulf states.

This new geotechnology axis is destined to have a profound impact on the global IT and technology sectors, and its arrival marks a turning point in the shift of the industry's balance of power from West to East. "We are seeing a whole new age of globalization today," according to analysts at Bengaluru-based Prayag Consulting. "Three countries that are taking full advantage of this paradigm shift are Israel, China and India." 

As India extends its connections throughout Asia, Australia, the Middle East and Africa, it will emerge not just as the region's business and technology leader, but as a more powerful player in the global IT sector. That will have a ripple effect on the entire market as next-generation semiconductor and system development--including embedded-systems design--follows trends that arise from the burgeoning domestic and regional economies. 

This factor was topmost in the minds of the India Semiconductor Association as ISA convened its 2008 Vision Summit in Bengaluru recently. The organization expects that India will evolve from a design-oriented industry into a major electronics manufacturing hub before the end of the decade. 

It was also the underlying theme at another recent event in Mumbai, as would-be regional tech players like Egypt, Australia and China vied for notice from India-based IT service and technology development companies at the India Leadership Forum.

Among the most revealing sessions at the Mumbai event were the "focused country sessions." These informational and networking meetings underscored the spillover effect of India's IT success, pointing to bright prospects for smaller regional players eager to ride India's coattails and become part of the new regional development axis.

Tiny Pakistan is already enjoying the knock-on effect of India's steady rise as a regional and global IT superstar. With a population of 160 million, Pakistan will be the first in the world to complete a nationwide deployment of WiMax wireless communications technology. This boost in infrastructure will help make its technical talent pool more competitive and will serve as another catalyst for regional economic development.

"It's a case of petrodollars at work," noted Shahid Azim, the Harvard-educated CEO of Braintree Group (Islamabad, Pakistan).

Like India, Pakistan has a large pool of well-educated engineering and IT professionals eager to participate in the global IT sector. With the Pakistan economy enjoying robust growth, Western companies are looking to India's neighbor as another source of technical IT talent.

"The idea is to set up R&D centers. It's just beginning," Azim said, projecting optimism that Pakistan will follow India's well-worn path to global significance.

With the aim of unlocking the technology potential of the Middle East, the Gulf and Africa, Egypt's General Authority for Investment (GAFI) also came to Mumbai in search of potential partnerships. Marshaling a 55-person delegation of Egyptian corporate executives and government officials, GAFI mounted an aggressive diplomatic and commercial initiative at the Leadership Forum designed to foster long-term relationships with its historic trading partner, India, and to position Egypt as a player in the evolving regional development hub.

With a GDP growing at 7.2 percent per year and a mobile-phone growth rate of 50 percent per year, Egypt also boasts one of the region's lowest IT outsourcing cost structures--lower than Eastern Europe's--including the world's lowest telecom costs. The nation is undergoing tax, customs and financial-sector reform, and has a talent pool consisting of 300,000 graduates with strong commercial, engineering and science backgrounds. Its unique multilingual heritage with English, French, German, Italian and Spanish language skills also works in Egypt's favor. Multinational investors active there include Mentor Graphics, Oracle, Vodaphone, IBM, Microsoft and Sun Microsystems.

Egypt is also poised to be a leader of regional infrastructure development, having pioneered its own "smart village" technology deployment concept, a model being copied throughout Africa for bringing connectivity, communications and economic prosperity to remote villages. One Indian executive, who recently completed a joint project with a team of Indian and Egyptian engineers, described the country as full of "energy and excitement and a receptivity to new ideas and change." 

At the other end of the spectrum, China--already an electronics powerhouse in its own right--also came courting in Mumbai. In pitches to Indian and global IT players at the India Leadership Forum, Guan Rong Rong, secretary general of the Beijing Software Imports and Exports Committee, acknowledged that while "China leads in hardware and infrastructure, India is the global leader in software." That's why China's own software industry is seeking "equity partnerships" with India, she said, and hopes to form what she called "a hub of virtual collaborative networks" to serve the regional and global market.

Partnership feelers also came from the city of Wuxi, where the local government has made a massive investment in a new software park. "We are seeing the beginnings of cooperation and hope for great success with India," said Weize Yang, secretary of the Wuxi Committee of the Communist Party of China. 

"We don't see it as China vs. India or either/or, but rather as a partnership," Yang noted, adding that as IT outsourcing becomes increasingly institutionalized in the United States, "it's only natural that companies will begin looking for a second source and a backup to spread the risk to two or three countries."

China needs India because by itself, it lacks the high-end domain expertise in information technology to serve external markets like Japan. "China has an army of programmers, but they do not have project-management experience," one industry observer said.

Then, too, India has a language advantage. Being a nation of English speakers gives it a huge edge over rival China in international markets.

"India sees that it has about 10 years more in the language advantage over China," John Studzinski, senior managing director for The Blackstone Group, said during a private meeting with business executives in Mumbai last week. After that, observers predict, China will begin to close the language gap as well as acquire its own IT skills, and the two countries will be more equally matched competitors.

India and China are two of the three countries poised to take the lead in the global electronics marketplace, according to analysts at Prayag Consulting, who cited Israel as the other.

"With the explosion of technologies, knowledge pools and people are connected as never before, and the rules of the game have changed irreversibly," Prayag analysts said in a research bulletin titled "21st Century Innovation Hubs" that was distributed at the India Leadership Forum. "The death of distance, a result of the wired world we now live in, has opened up possibilities for individuals, enterprises and nations."

Indians, many observers have noted, look to Israel's success in technology innovation with great respect, bordering on awe. Some theorize they may see in that beleaguered nation's success many of the same elements of adversity, and diversity, required for the unique alchemy that creates the necessary catalyst for successful innovation. 

*Smart city *

From its new headquarters operation in Bengaluru, Cisco Systems Inc. is developing the network architecture for an $8 billion high-tech "smart city" project in Saudi Arabia as part of a contract it signed in January. According to Cisco, there are at least nine to 12 such smart-city deals in the pipeline. The flight from Bengaluru to Dubai takes just three hours, making India the ideal hub to serve this region.

Following in the footsteps of India pioneers such as Texas Instruments and Motorola, multinational companies like Cisco and IBM Corp. are finding India an ideal location not just as a source of low-cost labor, but as a place to drive their regional and global business and technology development plans. IBM alone employs 76,000 people in India, its second-largest employee base in the world. 

Indeed, IBM has put India at the apex of its global IT strategy, Virginia Rometty, senior vice president of IBM Global Business Services, said during her keynote speech at the India Leadership Forum. As the business world moves to greater global integration, IBM's value proposition to its clients increasingly relies on the ability to deliver the best ideas and capabilities from anywhere to anywhere, she said.

"We achieve this by building globally integrated centers of excellence and networking them together," she said. "We do a great deal of asset development for our industry solutions in Bengaluru, jointly with IBM colleagues from software and research." 

Industry watchers believe this trend will help propel India from a services-only model to an innovation, or intellectual property-driven, business model. 

It doesn't hurt that India is feeling its own pressure from the appreciation of the rupee and a growing crunch of available talent to serve new outsource customers--factors conducive to a new wave of regional business and technology partnerships. 

The Asian-Oceanian Computing In- dustry Organization (ASOCIO) IT trade association was formed in 1984 to represent this new, emerging Asian geographical region. Headed by Ashank Desai, ASOCIO has 20 members representing Japan, Australia, Bangladesh, Hong Kong, India, Indonesia, Korea, Laos, Malaysia, Mongolia, Myanmar, Nepal, New Zealand, Pakistan, Philippines, Singapore, Sri Lanka, Taiwan, Thailand, Vietnam. Seven guest members hail from the United States, the U.K., Canada, Spain, France, Russia and Kenya. 

But India and its emerging network of regional partners are no longer just focused on serving overseas customers. For the first time, the domestic market is becoming a promising new source of business growth and development.

The spin-off from this new global technology axis is far-reaching. Hard-pressed to meet the surge in local and offshore demand, Wipro has begun setting up its own offshore centers, including a new Atlanta operation, while Infosys, TCS and Satyam already have development centers outside of India in places such as Hungary, Romania, China and Canada.

*'Third wave' *

With its eye on growing its IT industry from its current $30 billion into the $100 billion range over the next 10 years, India today reminds some observers of the historic three-wave model of the "Asian miracle," in which Japan, South Korea, Southeast Asia and now China have successfully moved up the value chain from basic component makers to system builders, to suppliers of locally branded, global brands. 

It's this last step--or third wave--that is currently on the minds of India's business leaders. To get there, India's IT sector will have to concentrate on delivering "complete solutions," not just business process services, to its business partners, said Sudhakar Ram, chairman and managing director of Mastek Ltd., one of India's largest IT service providers. They will have to move beyond so-called "cost arbitrage" to "delivering strategic impact to their customers." And they will have to become providers and developers of intellectual property, he said. 

To make this value-added leap, India's IT sector will have to concentrate not just on providing process services, but on developing and differentiating its customer solutions with its own intellectual property in the form of methodologies, frameworks, tools, platforms and packages--in other words, products, not just services. To do this, it will have to "build a cadre of domain experts in their target industries or develop strong partnerships with firms that can bring in that expertise," Ram said.

Finally, domestic IT companies will have to "make a move away from an India-centric approach to a truly global approach," meaning they will have to operate as a network across countries and by harnessing the full power of the global capabilities in serving every local customer better," he said.

It's an ambitious goal, and with China still focused on semiconductor and basic electronics manufacturing and mired in the first and second waves of technology development, it just might be the one that puts India ahead of its neighbor to the north in today's intensely competitive global market.

Nasscom, the premier trade body of the IT industry in India and organizer of the India Leadership Forum, recently announced the key findings of its "Strategic Review 2008."

The organization said that software and services exports are expected to exceed $40 billion and that the domestic market is expected to touch $23 billion in fiscal 2008. Positive market indicators and a strong track record support a target forecast of $60 billion in software and services exports and $73 billion to $75 billion in overall software and services revenue by fiscal 2010.

"The Indian IT industry has been rapidly evolving; growth is on track to achieve, if not exceed, the targets for 2010," said Nasscom president Som Mittal. "The trends are interesting, and findings indicate that the domestic market is poised for growth, with IT spending trending upward, particularly by the government. We also see an increasing level of specialization within the industry both in IT services and BPO [business process outsourcing] exhibiting signs of a rapidly maturing industry." 

However, he said, "there are global macroeconomic challenges; talent, manpower and infrastructure issues will need to be addressed and resolved, collectively. The industry has shown resilience and has taken several steps to mitigate the impact."


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## Bushroda

*Indian business empire eyes global role*
By RAJESH MAHAPATRA
The Associated Press

MUMBAI, India - A dozen years ago, many believed that India's Tata Group - the country's oldest and largest conglomerate - was a bloated behemoth that would eventually go under.

Instead, it has become a powerhouse in the 21st century, focusing on core businesses like steel and automobiles and seizing opportunities, including the hugely profitable outsourcing business, that came with India's dramatic economic transformation.

A slew of recent acquisitions, including for Britain's Tetley Tea and Boston's Ritz Carlton Hotel, have thrust the Tata conglomerate - which comprises 98 companies and was largely unknown outside India until recently - into the global spotlight.

A year ago, Tata Steel Ltd. became the world's sixth-biggest steelmaker when it bought Britain-based Corus Group for $13 billion. Then in January, Tata Motors Ltd. grabbed the world's attention when it unveiled the planet's cheapest car: a $2,500 four-seater that could change the global auto industry.

Surprising naysayers, the company has also been named the preferred bidder for Ford Motor's Jaguar and Land Rover businesses.

"We have been thinking bigger than we have done in the past," said Chairman Ratan N. Tata, 70, in a rare interview at Bombay House, the group's headquarters since 1926. "We have been bolder ... and we have been more aggressive in the marketplace."

In five years through March 2007, annual group sales more than doubled to $29 billion, while market capitalization of its 27 listed companies increased six-fold, to $78 billion. The numbers do not include Corus, whose sales totaled $19 billion in 2006.

While recent rapid earnings growth at Tata Steel and Tata Motors has slowed, net profit at Tata Consultancy, India's biggest outsourcing company, continues to rise, climbing 21 percent in the October-December quarter.

The globalization strategy will only get bigger, said the barrel-chested Tata.

"We are at an early stage," he said. "We are still feeling our way."

The resurgence of the 140-year-old Tata brand is as much a story of the country's economic rise as it is about the success of the chairman, whose ascent to the top job in 1991 coincided with the beginning of India's shift from a socialist-style state to a market economy.

For decades after India's independence from Britain in 1947, the government fixed prices, imposed curbs on foreign goods and capital, brought draconian tax laws and set limits to what a company could produce. The restrictive regime stifled growth and bred corruption.

The Tata Group was hit harder than others because it strove to create a business culture that emphasized transparency and integrity. Tata executives are known for refusing to pay bribes, a widespread Indian practice, and their lifestyles are mostly modest.

Ratan Tata, a bachelor, lives in a beachfront Mumbai apartment and is driven to work in an inexpensive Tata sedan.

When Ratan took over the company from his gregarious uncle, J.R.D. Tata, India's economy was starting to open up, but the Tata group was almost falling apart. Sales were sluggish and government controls had limited new investments.

J.R.D.'s hands-off approach had led to inflated egos and squabbling among top executives at the group's many companies. All of the 1980s was marred with speculation about who would succeed the ailing J.R.D.

Author Gita Piramal describes the conglomerate that Rata inherited "a tangled legacy."

"India was changing, and changing rapidly, and outsiders had begun to describe the House of Tatas as a dinosaur," Piramal wrote in her best-seller Business Maharajas.

The company was founded in 1868 when Jamsetji N. Tata, a young trader from India's Parsi minority, set out to bring technology and money from around the world to establish India's first textile mill. The company went on to build the first steel plant, overcoming resistance of British colonial rulers, and later built the airline that eventually became the nation's flagship carrier - Air India - which is no longer part of the Tata group.

When Ratan became chairman, many heads of group companies had scant respect for him. He was a loner who had graduated from Cornell University with a bachelor's degree in architecture and had led a variety of Tata businesses far from the limelight.

Unlike his uncle, Ratan took charge from the start. It took him years to clean up the mess from the power struggles, pushing out a generation of executives and jettisoning several peripheral businesses.

At Tata Steel, tens of thousands of jobs were cut. Tata Motors built the first fully Indian-designed car, the Indica - a roomy hatchback rolled out in 1998.

Tata Consultancy Services meanwhile hired thousands to become a global power in outsourcing, doing back office work and software engineering for Western firms.

Just as the group's fortunes were reviving the Indian economy hit a slump, a slowdown aggravated in 2002 by new tensions with Pakistan. That's when it became compelling for Tata to look overseas.

The big change came five years ago at a company annual meeting, where the chairman "exhorted us to go treat the world as the market," recalls R. Gopalakrishnan, an executive director at Tata Sons, the group's holding company.

What followed was a massive push to acquire businesses abroad. Nearly 30 overseas buyouts have since helped the group's international revenues grow fourfold to $11 billion and contributed more than a third to its total sales last year.

Takeovers include the truck unit of South Korea's Daewoo Motors, Singapore's Natsteel and Thailand's Millennium Steel. The Indian giant is also snapping up mining rights in Africa and Asia.

For all that, Ratan Tata insists he hasn't traded off the group's long cherished values.

No Tata family members are among the country's growing list of billionaires because the family business is owned mostly by Tata-funded charitable trusts.

A substantial portion of the group's income is channeled into various philanthropies that have helped build some of the country's finest institutions, including India's first cancer hospital.

Tata companies are also known for offering worker benefits that are rare in India, including pension and child care allowances. Tata Steel hasn't seen a strike in the past 50 years.

"The one thing I had always felt is that I wanted to go to bed at night saying I had not succumbed to the temptation of giving up the values and the ethics, that the group had been built on, just for short-term gains," Tata said.

Some experts believe the group is still too bloated. Tata concedes that he has "not been very successful" at pruning the number of companies and downsizing staff, which currently totals about 290,000.

The big issue, however, is who will succeed Tata after he steps down.

"The Tatas have been producing many things successfully except children," said Dwijendra Tripathy, a business historian who predicts Ratan Tata may stay on at least five more years.

"It is only in the past two years that he has come into global limelight. It is human for him to be wanting to stay on for some more time, achieve some more milestones," he said.

Tata won't say when he plans to retire, but insists he is looking for a successor.

That person "doesn't have to be a Tata, doesn't have to be from within the organization."

Has he set his eyes on anyone?

"If that were so I assure you I would not be here today," Tata said, clearly irritated at the question. "If I had a successor I would have been gone."


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## Bushroda

*India and China: Conflict, Competition, and Cooperation in the Age of Globalization* 
Dr. Aqueil Ahmad 
STWR Contributing Writer 
21st February 08 

India and China are two of the worlds most ancient civilizations. For centuries they shared advanced ideas, inventions, religious and philosophical traditions. But their economies and societies stagnated during the colonial period. In the post-colonial era mutual relations suffered a setback due to political and boundary disputes. In contemporary times they have reemerged as leading techno-economic nations. It is high time for them to move beyond conflicts and start cooperating politically, economically, and technologically for mutual benefits. 

Recent developments and exchanges indicate that the ball is already rolling in that direction. Globalization for common good requires coming together rather than falling apart, sharing resources and assets rather than wasting them in endless conflicts. In the context of currently shifting global political and economic power, no two nations are better equipped than India and China to show the world how the common concerns of humanity can be addressed through mutual respect, friendship, healthy competition, and sharing of resources. 

*Background* 

India and China are two of the worlds most ancient surviving civilizations. The Chinese built the 4000-mile Great Wall some 2000 years ago, about the time of the birth of Jesus Christ. As an awesome marvel of engineering, most of the wall still stands intact, the only man-made object visible from the outer space. They invented bureaucracy even earlier, thousands of years before Max Weber brought it eloquently to the attention of the western world (Gerth and Mills, 1958). There is not a single country anywhere that bureaucracies do not govern, manage or mismanage, corrupt and plunder, redeem or reform. The Terracotta Army built by Emperor Qin in the 3rd century BC is in almost perfect state of preservation to this day. Some of the greatest inventions that we live by even today came from China, including the gun powder  the most infamous of them all, the paper, paper money, printing, viaducts, dams, clocks, the compass, astronomical observatories, and countless other inventions (Needham, 1954). 

As for India, R. K. Narayan, the famous Indian novelist tells the interesting story of his meeting with British philosopher and iconoclast, Sir Bertrand Russell. While extolling the contributions of ancient Chinese thinkers, Russell said to Narayan, but you Indians created nothing. Narayan vigorously protested this insulting remark. But Sir Russell kept on repeating, You Indians created nothing, nothing, nothing. Exasperated, Narayan got up and was about to walk out when Russell drew him near, looked him in the eye and said, You Indians gave us the zero, which stands as the greatest contribution to the development of mathematics, and consequently, that of modern science. Thereupon they embraced each other with delightful twinkle in their eyes. 

Indian contributions to algebra, textile, chemistry, medicine, metallurgy, and astronomy in the Ancient and Medieval periods are legion. Sophisticated agricultural practices, architecture, and sewage systems were developed by the engineers in the Indus Valley civilizations of Harrappa and Mohanjadaro (Rahman, 1984; Habib, 1988). The wisdom of the Buddha flowed from India to China, while Confucius precepts of compassion, humility, and right conduct by merciful rulers influenced the behavior of emperor Ashoka in the 3 rd century B.C. who inscribed on his commemorative pillars, Satya amar jayte (Truth alone shall triumph). 

India and China, along with the rest of the non-western world, lost their edge somewhere during the 16th and 17th centuries when the center of scientific and technological activity shifted to Europe, and later to North America for a set of complex cultural, political, and economic reasons (Needham, 1986). Contacts between these two great civilizations almost ceased during the colonial period because the new rulers of the world did not encourage such contacts. When the contacts were revived in more recent times between a democratic IndiaChina, they turned into conflict and hostility over rival territorial claims in the Himalayan region, the Chinese annexation of Tibet, and the Exile of Dalai Lama into (Dharamsala) India . 

*Recent Development History* 

India became a free country through peaceful transition of sovereignty from Britain in 1947. China had a proletarian revolution in 1949 led by Mao Zedong. Both democratic India and Communist China embarked upon ambitious science, technology, and economic development programs through centralized planning. Both emphasized self-reliance through local initiatives, restricting the flow of foreign capital and technology for nearly three decades. During this time, the Peoples Republic of China (PRC) controlled its economy and protected it from outside influences far more than did India. For at least 10-15 years since the revolution in 1949, the only source of foreign capital and technology for China was its ideological partner, the Soviet Union. That relationship began to crack in 1962 because of the USSRs reluctance to transfer nuclear technology to the Peoples Republic. China continued its isolation and suffered serious stagnation for 20 or so more years, until after Maos death in 1976 (Ahmad, 1991). 

During this period India also strictly regulated its economy, allowing only partial and highly restricted entry of foreign capital and technology. The Indian economy began to open its door a bit more widely by the middle of the 1980s, at about the same time as did China. By this time, the global economy had already taken hold of the national economies in North America, Europe, and the Pacific Rim. Post-Independence era regulations proved a mixed blessing for India. It missed 20 years of the information technology revolution that was sweeping the world and driving the global economy  remember how the IBM and Coca-Cola were kicked out of India in the middle of 1970s. The private sector stagnated under those regulations. The protected government sector thrived despite its magnificent mismanagement. Indias industrial development suffered. While these negative trends were the legacy of regulations, government policy of self-reliance helped built robust networks of techno-economic institutions and individuals that were ready to march forward when the global economy did finally reach India. Through regulations India was also able to protect its local industries and markets from unbridled speculation and exploitation by multinational corporations (Ahmad, 1998). Let me return to China for a minute. 

Deng Xiaoping took command of China in 1979, three years after Maos death. With a massive shift of public policy, Deng opened the Chinese economy to foreign capital, technology, and competition. The scene that I witnessed in China when I went there for the first time in 1980 was a totally different scene than what is going on there today. Despite the open door policy, economic modernization remained laggard during the entire decade of the 1980s. Things began to change rapidly in the next decade. Since then, the Chinese economy has been growing at about 9-10% per year, surpassing any other country for a sustained growth at such a high rate. In terms of GDP per capita, modern China is the worlds 4th largest economy, and is likely to overtake Japan within the next 5-10 years. It is one of the worlds largest exporters of consumer items through retailers like Wal-Mart, Carrefour, Target, and Tesco. Even garlic in the United States is being imported from China. The American Wal-Mart is probably the biggest buyer of consumer goods made in China. It bought $19 billion worth of Chinese goods in 2004, amounting to some 15% of Chinas total exports to America in that year. (The Economist, September 23rd, 2006, p. 43) 

_Since 2000, Chinas contribution to global GDP growth (in purchasing-power-parity terms) has been bigger than Americas, and more than half as big again as the combined contribution of India, Brazil and Russia, the three next largest emerging economies. Chinas massive build-up of American Treasury bonds affects American interest rates and thus Americans willingness to spend. Its low-priced manufactures give western consumers more buying power. Its thirst for energy has helped push oil prices to record highs. Its entry to the World Trade Organization in 2001 has speeded up the opening of the worlds biggest market. (A Survey of China, The Economist, March 25th, 2006, p. 3) _

India has finally left behind its Hindu growth rate of 3% to hit an annual growth rate of 8+%. Its technological capability is strong. It is the most preferred destination of IT outsourcing, now moving away from being the worlds call center to being a vital feeder to the global knowledge industry. Indias economic base is vast  4th largest in the world in terms of purchasing power parity and 12th largest in terms of per capita GDP. It is projected to become one of the five largest economies in the world by 2050 along with China and Brazil. Its markets are huge, with the current consumer class estimated to be around 350 million, about the size of the entire European Community (Bhagwati, 2004). 

The combined economies of India and China are already bigger than that of the EU countries put together. At the present rate of growth, the consumer class in the two countries will reach about a billion people within the next decade. But per capita incomes remain low and income disparities are wide in both countries in international comparisons. These developments have far-reaching implications for the two countries themselves and the world at large in the 21st century (Engardio, 2007). 

*Science, Technology, and Economy in India and China: Conflict, Competition, and/or Cooperation: *

The West is becoming alarmist about what is happening in the worlds two most populous nations. In the United States, JapanChina bashing. Chinas military machine is one of the most formidable in the world. But it is the Chinese economy that scares both the Indians and the Americans. Many Americans see both India and China stealing American jobs  China stealing manufacturing jobs (textile, shoes, furniture, hand tools, consumer electronics, Christmas ornaments, etc.); while India taking away IT jobs. Some in America have gone to the extent of suggesting that China is about to take over the United States economy by next year; as it was used to be said abut Japan in the 1980s and the 1990s. Of course, there is some truth in these morbid fears as Americans look back to the disappearance of their steel and consumer electronics industries through competition with Japan. And now here comes China, closely followed by India. Not to be left behind in IT outsourcing, China is rapidly developing its English and software development skills to compete with India in the American high-tech industry. Listen to what Tony Blair, the ex-British Prime Minister said in a major policy speech in Oxford, England: 

_But the international competition is intense and getting more so. Chinese R&D has been rising by 20% a year over the past five years. South Korean R&D has increased ten-fold since 1971. Indian R&D is even more astonishing - it has trebled in a decade. Indian engineers are flooding into the world's markets - 350,000 a year, forecast to 1.4m a year by 2015. It is a warning to us that we have to remain world-leaders and that knowledge also needs to be transferred from the academy to the marketplace. (Speech at the Royal Society in Oxford, Nov. 3, 2006)_ 

There is intense competition globally for R&D dollars. Technology and industry leaders understand that research and innovation are absolutely necessary for maintaining competitive advantage in their core competencies. Finding and hiring qualified scientists and engineers in the western countries is difficult and prohibitively expensive. The truth is, China and India are increasingly attractive places for companies to do research and development. (Can Anyone Steer this Economy, Cover Story, Business Week, Nov. 20, 2006, p. 62) India has an edge over China in attracting R&D investments due to the availability of more well-trained, English speaking scientists and engineers than in China. A high-tech company can hire an engineer in India at one-fourth the cost for a similar hire in North America, for example. Such investments will be growing rapidly in the coming years in both India and China, perhaps more so in India than in China. 

Population in the western countries, excluding the USA, is declining. It is already below replacement levels in Russia and the Scandinavian countries. The current demographic balance between the West and the rest favors the latter: West = 1 billion; rest = 5.5 billion. It will continue to move in this direction. The same is true for the S&T human resources balance of power. Per capita production of scientists and engineers in the West (particularly the US) is still well ahead of the world average; but the total annual production in China and India surpass the US in about 4 to 1 ratio: US = 84,898; India = 103,000; China = 292,569 (India-China combined total = 395,569). 

The American magazine Business Week organized its 10th annual CEO Forum in Beijing in early November (1-3) 2006. More than 700 global executives and government officials from many countries participated. Much of the discussion focused on competitiveness in ChinaIndia and the competition between them for world resources and markets. Is China with its command economy or India as worlds largest and most boisterous democracy better poised to utilize foreign domestic investment for sustained social and economic development, was one of the hotly debated topics. The experience so far suggests that without much public debate or dissension about its national plans and priorities, China has done much better than India in that respect. From the Indian point of view, the issue is that the values of individual freedoms, self reliance, and social development must not be sacrificed at the altar of economic development. These are indeed fine values to uphold in a democratic society, but the Indian policy planners need to look hard and fast how much they have or have not achieved by way of all-round social and economic progress and what needs to be done to correct the remaining gaps and imbalances. 

The fact is both of these Asian giants have their own strengths and weaknesses, their own unique cultural traditions and political histories. They both are only half way home and a long way to go, as the saying goes, toward becoming advanced industrial societies. They have serious social and environmental problems to encounter  problems of poverty and disparity, the problem of rapidly deteriorating environments due to rapid industrialization, and a host of other problems like rural-urban disparity, and inadequate education, housing, health-care, and employment for their large populations. These are the areas where they can cooperate and learn from each other while they compete for world markets and resources. The CEO Forum in Beijing spent considerable time on the issue of global competition and rivalry between the two Asian superstars. 

_With the likes of China Mobile (with 300 million subscribers and a $177 billion market capitalization), telecom gear maker Huawei Technologies, and Indias Tata Steel on the prowl for acquisitions overseas, China and India are reshaping the global economy. Can these giants get along? Their rivalry is bound to intensify as India moves more into low-wage manufacturing, a Chinese specialty. Both must create 15 million new jobs every year just to keep their young people employed. (The Dragons Way or the Tigers? Business Week, Nov. 20, 2006, p. 55) _

Increasing energy use in India and China due to industrialization and rising automobile ownership is also a source of worldwide concern as is the intense competition between them for global energy resources. The issue is how to satisfy their voracious appetite for oil. With 17% of the worlds population, only 0.8% oil reserves, and an economy growing at breakneck speed, China is naturally frantic about meeting its energy needs through imports. It is actively courting African leaders and investing in African development and oil exploration. During a recent (Nov. 3-5, 06) summit of top African leaders in Beijing, the latter were lavishly treated by the Chinese President, Hue JinTao. Despite some setbacks, the Chinese push for African raw materials and markets has been quite successful: 

_Chinese companies have been sucking up oil from Sudan, cutting down timber in Guinea and mining copper and zinc from the Congo. Beijing recently bought a major stake in South Africas Standard Bank to fund infrastructure projects throughout the continent. And the Chinese are far outpacing their Western rivalsLast years trade between Africa and China topped $50 billion. By 2010 its expected to reach $100 billion. (Newsweek, December 3, 2007, p. 46) _

The huge Chinese oil conglomerate, CNOOC, is actively seeking to buy oil companies overseas, including a failed bid to buy American UNOCAL. It has since invested in oil interests in Russia and the Middle East. India is faced with a similar energy crunch having only meager oil resources of its own. It is competing with China for oil in world markets. But that is also an area where the two countries can effectively cooperate. Discussions on these lines have already taken place between CNOOC and Indias Oil and Natural Gas Commission. Indias ex-energy Minister Iyar came up with an interesting idea while discussing cooperative energy exploration and acquisition strategy with his Chinese counterpart sometime ago. He suggested that there should be a Consortium of Oil Importing Countries to negotiate the supply and price of crude oil for the benefit of heavy developing country oil importers. Such cooperative strategies have been mooted from time to time in other areas as well but their implementation remains problematic, perhaps due to unresolved boundary issues and suspicions about their geopolitical intentions. 

The history of border disputes between India and China going back to the war of 1962 is well-known. That dispute is yet to be resolved and continues to be a source of friction and mistrust between them. The friction is exacerbated by Chinas military and nuclear cooperation with archrival Pakistan. In its economic expansionist mode, China does want to increase its investment in India but feels resistance by the Indian government. It claims double standards by India in the matter of economic cooperation. For examples, the Indian government requires four bureaucratic levels of approval for Chinese FDI instead of only the Reserve Bank of India clearance for others. Prospective Chinese workers in Indian enterprises face similar bureaucratic hassles. One of the cases in point was visa problems faced by 1,800 engineers from the Chinese Petroleum hired by Reliance India to lay a gas pipeline sometimes ago. I wonder why Reliance could not find Indian engineers to do the job; and whether the visas were finally issued. 

Despite these problems, cooperative science, technology, and trade have been steadily increasing between the two countries. Late Prime Minister Rajiv Gandhi of India signed an Indo-China inter-governmental science and technology agreement during his visit to Beijing in 1988. This led to a Joint S&T Committee to initiate broad-based cooperative programs. Specific joint projects are mooted at inter-agency levels in such diverse fields as meteorology, ocean science and technology, space science and technology, and biotechnology. As recently as September 2006, Indias Minister for Science and Technology, Kapil Sibal and his Chinese counterpart signed a Memorandum of Understanding (MoU) to further cement S&T cooperation between the two countries as part of the India-China Friendship Year 2006. 

India-China trade is currently running at $20 billion from only $1.8 billion in 1989-90. A substantial share of Indias mobile-phone market is run by Hutchison Telecommunications of China. Huawei Technologies has a software center in Bangalore that employs 1,150 Indian and 50 Chinese engineers. I understand that most of the Diwali lanterns for 2006 celebrations came from China. The Chinese computer giant Lenovo has recently established its global marketing hub in Bangalore to be run and managed by Indians. China imports iron ore and other minerals from India. From the Indian side, an estimated 150 companies are currently doing business in China, although India claims these business ventures are with other foreign firms operating in China, not with the Chinese companies. (The Economist, October 28th, 2006, pp. 50-51; and Nov. 18th, 2006, pp.43-44) The trend, nonetheless, is definitely pointing in the direction of increasing bilateral trade and technology agreements. 

*Concluding Remarks* 

This brief discussion of India and China in the context of globalization suggests several things. Nobel Laureate Amartya Sen, reports his teacher Joan Robinson at Cambridge University once telling him, The frustrating thing about India is that whatever you can rightly say about it, the opposite is also true. Interestingly enough, you can say exactly the same thing about China. It combines capitalism with communism, poverty and disparity with fast economic growth, impressive industrial development with neglect of its environment, and a massive rural-urban divide. These contradictions exist in India as well, with the exception of the first one. But they are due largely to long-standing historical and social factors, not exclusively to globalization, as some tend to suggest. 

Theoretically, globalization is about worldwide systemic interdependence, integration, mobilization, and redistribution of global resources that should lead to partial if not complete economic parity and equilibrium among the system members in due course of time. Generally speaking, all modern economies today are global in character. As Robert Reich (1991) said in his well-known book, The Work of Nations, there are no truly national economies any more. India and China are no exceptions. Economic globalization is driving and shaping national politics, economies, histories, social structures, environments, and international relations, and connecting them through interdependent networks as never before. A global power shift is indeed occurring that is still unseen and unrecognized by many among us. There are two major implications of this power shift. Ideology and politics are becoming the handmaidens of global economic forces, rather than the other way round, as the case used to be. The other development is unraveling of erstwhile hegemonies. The United States of America and Europe are no longer in the drivers seats. The balance of power is shifting from West to East, from North to South (Meredith, 2007). The recent demographic, economic, and political developments in China, India, Russia, Latin America, and the Middle East (barring some temporary setbacks here and there) all point in that direction (see endnotes). This shifting landscape strongly suggests that this century is poised to be an Asian century. And India and China, along with the Pacific Rim countries and Russia with her enormous natural resources, will be its biggest winners  unless the trend is reversed by unimaginative political and economic leadership in these countries, which is unlikely. 

As mentioned above, perhaps the strongest factor causing this power shift is the worldwide distribution of qualified manpower that overwhelmingly favors both China and India. For example, there is intense competition globally for R&D dollars. China and India are increasingly attractive places for multinational corporations to conduct their R&D operations. India has an edge over China in R&D capacity due to the availability of more well-trained, English speaking scientists and engineers than in China. With increasing difficulty to recruit qualified scientists and engineers at affordable prices in the West, or at any price, for that matter, joint R&D projects involving Indian, Chinese, and third country scientists should soon be emerging within India, China, and some other more developed developing countries in such fields as biotechnology, alternative energy systems, pharmaceuticals, healthcare, environmental technologies, and perhaps even in space explorations. A recent report from Control Engineering, a free-lance think-tank, observes: 

_The vast majority of U.S. manufacturers are experiencing a serious shortage of qualified employees, which in turn is causing significant impact on business and the ability of the country as a whole to compete in a global economy. This is the key finding of the "2005 Skills Gap Survey". by the National Association of Manufacturers. The problem for U.S.India, China, and Russia, are graduating millions more students each yearthan the United States. Theseindividuals are actively participating in the development of innovative new products without regard for historical barriers, such as geography thanks to technologies such as broadband, inexpensive Internet-ready laptops, and collaborative tools. With such international talent readily available and significant shortages existing at home, it is clear that the future of U.S. manufacturers is that this challenge is not universal. Countries with rich educational heritages, such as manufacturing may now be at stake, the report suggests. Details behind the talent shortage reveal a stark reality. More than 80% of respondents indicated that they are experiencing a shortage of qualified workers overallwith 13% reporting severe shortages. _

The surfeit of qualified manpower out of China and India is yet to be fully and gainfully employed in the global production of knowledge, goods, and public services. In addition to being the knowledge factory for the world, these large numbers, if tapped properly, can be a source of enormous mutual benefit to the two countries themselves in their quest for excellence and a rightful place in the community of nations. 

_In 2002 (precisely 40 years after the{1962}war, the then Chinese premier, Zhu Rongji, visited India and told his hosts: You are the first in software, and we are the first in hardware. When we put these two together, we can become the worlds number one (The Economist, The World in 2005, p. 49) _

This forecast may not be too far off to come true. 

*Aqueil Ahmad is currently a full-time faculty in the School of Management at Walden University, Minneapolis, Minnesota.

Courtesy of Globalization, second special issue, December 2007 *


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## Neo

*India awards $2.7bn road projects ​* 
Saturday, February 23, 2008

NEW DELHI: India awarded five road projects for Rs109.12 billion ($2.7 billion) on Friday to private companies, including Larsen & Toubro and aconsortia of Deutsche Bank and Malaysias IJM Corp Berhad, a senior government official said.

The projects are part of Indias Rs2.42 trillion national highway development programme, Bhram Dutt, a secretary at transport ministry told a news conference. India is seeking active private participation to build roads, airports and power plants as the government is unable to raise the funds needed to finance them on its own.

The National Highway Authority of India has awarded Larsen & Toubro, the countrys largest construction firm, a highway widening project in southern India for 4.19 billion rupees, Dutt said.

A joint venture in which Spanish firm Isolux Corsan owns 51 per cent, with Indias Soma Enterprise holding the remaining 49 per cent, won a road project in northern India for Rs27.5 billion, he said. Another joint venture that is 90 per cent owned by Indias IRB Infrastructure Developers, and 10 per cent held by Deutsche Bank got the contract to widen a highway in western India for Rs16.94 billion, Dutt said. 

India awards $2.7bn road projects


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## solid snake

Bushroda said:


> Tiny Pakistan is already enjoying the knock-on effect of India's steady rise as a regional and global IT superstar. With a population of 160 million, Pakistan will be the first in the world to complete a nationwide deployment of WiMax wireless communications technology. This boost in infrastructure will help make its technical talent pool more competitive and will serve as another catalyst for regional economic development.



Tiny Pakistan? Who is this guy?

Pakistan has the sixth highest population in the world and is the size of the UK and France put together in terms of area. Never heard anyone call France tiny 

Pakistan is also larger than Spain, Italy, Germany, Turkey etc. By no means are we tiny.


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## Bushroda

He would've meant it in comparitive sense. Compared to leviathans like China & India in its neighbourhood Pak does appear small.


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## Neo

*India may face food shortage in 2009​*
NEW DELHI: Indian Union Agriculture Minister Sharad Pawar has told Indian Prime Minister Dr Manmohan Singh that the country could face a food shortage in 2009 as its reserves were low. 

According to government sources, Pawar met the prime minister on Friday and briefed him on food security for more than two hours. They said he had told Singh that his ministry was monitoring the situation closely. 

Pawar had made a five-minute power-point presentation before the prime minister, they said, depicting food scarcity in 85 to 100 countries and the measures they had taken to control food riots. Pawar had said the situation in India was comparatively safer, they added. 

They also discussed a status paper on food security made by Dr C Rangaranjan, chairman of the economic advisory council. Food Secretary T Nandakumar briefed the prime minister on the measures the Agriculture Ministry was taking to deal with the situation. The prime minister has already formed a group of ministers to study food security issues India might face 2010 onwards. iftikhar gilani

Daily Times - Leading News Resource of Pakistan


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## Bushroda

*Indian firms put in a hot performance*
By Nick Clark
The Independent, UK
Monday, 25 February 2008 

Indian companies have outperformed on the Alternative Investment Market in the past year, with more set to arrive in London in 2008 as they look for international investment and recognition.

Seymour Pierce, the brokerage house, released a report last week into whether Indian stocks on Aim deliver value. Nicholas Linington, an analyst at the group, wrote: "There has been a steady addition of Indian companies listing on Aim in the last two years. We expect a greater number of small and medium-sized Indian companies to seek international investors as the economy opens up." 

Stand-out companies on the growth market include KSK Power Venture, the largestIndian group on AIM by market capitalisation, and the media and entertainment group ErosInternational. 

KSK listed in November 2006 at 107p, raising £30.9m in the process. The group has enjoyed life on the growth market, quadrupling by the end of last year to 463.5p. KSK, which now has a market cap of £597.4m, has developed power plants in India for the past eight years. Its growth has, in part, been boosted by several prestigious strategic alliances, including an Indian power sector investment venture with Lehman Brothers. It also announced a strategic relationship with General Electric three months ago. 

Eros has also performed strongly since it listed in July 2006. The group, which releases up to 40 films a year and has a distribution network in the UK and US, has seen its shares more than double to 377.5p since floating. The last bit of good news emerged in November:it announced a strong set ofinterim results, with pre-tax profits jumping 75.9 per centto $13.6m. 

Seymour Pierce found that Indian companies on AIM had delivered 21 per cent absolute performance over the past year, compared with flat results for the rest of the market. Over the same period, the FTSE Small Cap index fell 21 per cent.

Seymour Pierce tracks the Indian companies on AIM with its own index and said these companies have grown from a market value of £250m to £3.3bn since January 2006. The Seymour Pierce India Index comprises 22 Indian companies and funds. They are predominantly financial  almost half  followed by media and utility companies, which each account for a fifth. The index concentrates solely on AIM, as there are a further 27 Indian companies listed on the main market or onPlus markets.

The rise of Indian groups in London has not been halted by the credit crunch. In a market that has seen the brakes slam on for new listings, three Indian companies have floated on AIM in the past three months, and all are trading at a premium to their listing price. 

These comprise the clean energy group Greenko, which raised £30m when it listed in November and has risen 17 per cent higher since. This was followed by DQ Entertainment and Origo Sino-India the following month, which were also welcomed by the market. 

That said, the investment-related groups have not faredso well. Out of the broker's index nine companies are trading ata discount, with seven of those either fund or investmentcompanies.

Despite the huge increase, Indian companies fail to match AIM listings from another emerging dominant player in the world economy, China, which has about 50 companies on AIM. 

Mr Linington said Seymour Pierce expects Indian companies to increase as the economy opens up to match the representation by China in the medium term. "In our view, India's growth drivers are, arguably, more favourable than China." 

He added: "This stems principally from the ability of companies to raise funds in their domestic markets, and the desire of those companies to bring on board international investors and gain an international stock market presence."


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## Bushroda

*Japan open for India's lessons*
Martin Fackler
The Age, Australia
February 25, 2008

JAPAN is suffering a crisis of confidence these days about its ability to compete with its emerging Asian rivals, China and India. But even in this fad-obsessed nation, one result was never expected: a growing craze for Indian education.

Despite an improved economy, many Japanese are feeling insecure about the nation's schools, which once turned out students who consistently ranked at the top of international tests. That is no longer true, which is why many Japanese are looking for lessons from India, the country they see as the world's ascendant education superpower.

Bookstores are filled with titles such as Extreme Indian Arithmetic Drills and The Unknown Secrets of the Indians. Newspapers carry reports of Indian children memorising multiplication tables far beyond nine times nine, the standard for young elementary students in Japan.

Japan's few Indian international schools are reporting a surge in applications from Japanese families.

At the Little Angels English Academy & International Kindergarten, the textbooks are from India, most of the teachers are South Asian, and classroom posters depict animals out of Indian tales. The pupils even colour maps of India in the green and saffron of its flag. Little Angels is in the Tokyo suburb of Mitaka, where only one of its 45 students is Indian. Most are Japanese.

Viewing another Asian country as a model in education, or almost anything else, would have been unheard-of just a few years ago, say education experts and historians. Much of Japan has long looked down on the rest of Asia, priding itself on being the region's most advanced nation. Indeed, Japan has dominated the continent for more than a century, first as an imperial power and more recently as the first Asian economy to achieve Western levels of economic development.

But in the past few years Japan has grown increasingly insecure, gripped by fear that it is being overshadowed by India and China, which are rapidly gaining in economic weight and sophistication. The government has tried to preserve Japan's technological lead and strengthen its military. But the Japanese have been forced to shed their traditional indifference to the region.

Grudgingly, Japan is starting to respect its neighbours. "Until now, Japanese saw China and India as backwards and poor," says Yoshinori Murai, a professor of Asian cultures at Sophia University in Tokyo. "As Japan loses confidence in itself, its attitudes towards Asia are changing. It has started seeing India and China as nations with something to offer."

Last month a national cry of alarm greeted the announcement by the Organisation for Economic Co-operation and Development that in a survey of maths skills, Japan had fallen from first place in 2000 to 10th place, behind Taiwan, Hong Kong and South Korea. From second in science in 2000, Japan dropped to sixth place.

China has stirred more concern in Japan as a political and economic challenger but India has emerged as the country to beat in a more benign rivalry over education. In part, this reflects China's image in Japan as a cheap manufacturer and technological imitator. But India's success in software development, internet businesses and knowledge-intensive industries in which Japan has failed to make inroads has set off more than a tinge of envy.

Most annoying for many Japanese is that the aspects of Indian education they now praise are similar to those that once made Japan famous for its work ethic and discipline: learning more at an earlier age, an emphasis on memorisation and cramming, and a focus on the basics, particularly in maths and science.

India's more demanding education standards are apparent at the Little Angels Kindergarten and are its main selling point. Its two-year-old pupils are taught to count to 20, three-year-olds are introduced to computers, and five-year-olds learn to multiply, solve maths word problems and write one-page essays in English, tasks most Japanese schools do not teach until at least year 2.

Japan's anxieties about its declining competitiveness echo the the angst of the US decades ago, when Japan was the economic upstart.

As with many new things in Japan, the interest in Indian-style education quickly became a fad. Indian education is a frequent topic in forums such as talk shows. Popular books claim to reveal the Indian secrets for multiplying and dividing multiple-digit numbers. Even Japan's conservative education ministry has begun discussing Indian methods, says Jun Takai of the ministry's international affairs division.

Eager parents try to send their children to Japan's roughly half-dozen Indian schools, hoping for an edge on the competitive college entrance exams. In Tokyo, the two largest Indian schools, which teach kindergarten through to year 8, mainly to Indian expatriates, received a sudden increase in inquiries from Japanese parents starting last year.

The Global Indian International School says 20 of its about 200 students are now Japanese, with demand so high from Indian and Japanese parents that it is building a second campus in the neighbouring city of Yokohama.

The other, the India International School in Japan, just expanded to 170 students last year, including 10 Japanese. It already has plans to expand again.

Japanese parents have expressed very high interest in Indian schools, says Nirmal Jain, principal of the India International School.

The boom has had the side effect of making many Japanese a little more tolerant towards other Asians. The founder of the Little Angels school, Jeevarani Angelina says she initially had difficulty persuading landlords to rent space to an Indian woman to start a school. But now, it's a selling point that she and three of her four full-time teachers are non-Japanese Asians.

"When I started, it was a first to have an English-language school taught by Asians, not Caucasians," she says, referring to the long presence here of American and European international schools.

Unlike other Indian schools, Ms Angelina says, Little Angels was intended primarily for Japanese children, to meet the need she had found when she sent her sons to Japanese kindergarten.

"I was lucky because I started when the Indian-education boom started," Ms Angelina says.

She has adapted the curriculum to Japan with more group activities, less memorisation and no Indian history. She plans to open an Indian-style primary school this year. Parents are enthusiastic about the school's rigorous standards.

"My son's level is higher than those of other Japanese children the same age," says Eiko Kikutake, whose son Hayato, 5, attends Little Angels. "Indian education is really amazing! This wouldn't have been possible at a Japanese kindergarten."

-- NEW YORK TIMES


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## Bushroda

*India's billion-dollar baby causes worldwide frenzy*
20 hours ago

NEW DELHI (AFP)  Cricket is poised for a revolution like never before as the lucrative Indian Premier League takes shape, but there are fears it could change what was once a leisurely afternoon sport for ever.

It is not about nations playing traditional Test cricket, the soul of the game for more than a century, or even one-day internationals or World Cups. The IPL is essentially an Indian Twenty20 domestic competition between eight city teams owned by corporate giants and movie stars who have hired the world's best cricketers at mind-boggling prices.

It is the nearest thing to Fantasy Cricket and cricketers are rubbing their eyes -- and wallets -- in disbelief at the huge paypackets offered to them to take part in the inaugural 44-day, 59-match extravaganza starting across cricket-mad India from April 18.

In a sport where only a handful of top stars net more than a million dollars a year in fees and endorsements for their respective countries, the IPL has showered riches like never before.

In an unprecedented auction of players in Mumbai last week, bids ranged from a whopping 1.5 million dollars for India's Twenty20 captain Mahendra Singh Dhoni to the lowest of 100,000 dollars for Sri Lankan youngster Chamara Silva.

Young batsman Manoj Tewari, who has played a solitary one-dayer for India, was picked up by Delhi for 675,000 dollars even as world-beating Australian captain Ricky Ponting went for a surprisingly low 400,000 dollars to Kolkata.

"The market is determining the players' price. That is how a free economy market flows," said Inderjit Bindra, a former Indian cricket board president and an influential member of the IPL's governing council.

Pundits regard the IPL as a revolution that will change the way cricket is played and governed, similar to Australian tycoon Kerry Packer's rebel World Series Cricket 33 years ago.

Packer, denied TV rights to Australian cricket, bought the world's best players in 1975 for a private series, introducing colour clothing and day-night matches for maximum television exposure.

The players were banned from official cricket before a compromise with the Australian Cricket Board three years later saw Packer's Channel Nine win the home rights for all Tests and one-day internationals.

There is no threat of a ban on IPL players because it is run by the official Indian body and has the blessings of the International Cricket Council (ICC) and boards around the world.

"The IPL will make the Packer years look like a storm in a teacup," said noted cricket writer Peter Roebuck. "Now, for a second time, authority totters under assault from players aware of their market value."

With dollars jingling in their pockets, cricketers will put aside fears of burnout from the already overcrowded international schedule to strut their stuff in the unbearable heat of the Indian summer.

But Ponting fears the IPL could lure cricketers away from the traditional Test and one-day games.

"With the amount of money being freely paid... there is a real danger that some guys will find the IPL more attractive than playing for their countries," Ponting wrote in The Australian newspaper.

"And if there are potential stars of Test or one-day cricket who might have any sort of thoughts like that, I think it is really dangerous for the game."

A consortium of Singapore-based World Sports Group and India's Sony Television Network paid 1.026 billion dollars for media rights of the IPL over the next 10 years.

The amount matches what Pan-Asian ESPN-Star Sports bid last year to win the rights for all ICC events till 2015, which includes two World Cups, three Champions Trophy events and the first two world Twenty20 tournaments.

IPL chairman Lalit Modi is confident franchise owners, who include top Indian businessmen Mukesh Ambani and Vijay Mallya and movie stars Shahrukh Khan and Preity Zinta, will get handsome returns for their combined investments of around 800 million dollars.

"When you go out to set up a business, it takes you a few years to plan the same," said Modi. "The franchisees have bought a team, which is an asset for life. If they build it correctly, the sky's the limit."

But critics remain sceptical.

"If the IPL is about money first, it will fail," wrote Simon Barnes in The Times. "We watch sport for the passion, for the real thing, for the love.

"Whoring simply doesn't make the Earth move."


----------



## Neo

*India sidelines Brazil in Gulf sugar market*​
GLOBAL sugar prices are likely to drop as Brazil and India, the worlds two largest producers, expand land under cane cultivation, jack up production, and also flood the international markets with the sweetener.

Sugar prices touched an 18-month high in mid-January, climbing by nearly 15 per cent over the past few weeks  raw sugar prices have flared by 30 per cent this year  but are likely to witness declines over the coming months, as exports from India are expected to surge.

Prices fell sharply by 20 per cent in 2006 and nearly eight per cent last year. With both Brazil and India reporting good production, prices are likely to decline sharply in 2008.

According to analysts, global sugar production will top demand by over 10 million tons in the sugar year ending September 30. Attracted by the recent high in sugar prices, Indian producers are looking at aggressive forays in the international markets.

While the Indian government estimates that sugar production might fall to 26 million tons for sugar year October 2007 to September 2008, the industry is bullish on the production and exports front. Sharad Pawar, the federal agriculture minister, had portrayed a gloomy scenario last month, scaling down industry forecasts of 31 million tons of production to 26 million tons.

According to Pawar, low yields in some states will adversely affect production during the year. Likewise, many farmers in states like Maharashtra were disenchanted with low sugar prices last year, and had shifted to other crops.

The sugar industry is confident that sugar production will not fall so low, though it is unlikely to touch the 2006-07 level this year. The Indian Sugar Mills Association (ISMA) has scaled down earlier projections of 31 million tons, bringing it down to between 27 and 27.5 million tons. According to Shanti Lal Jain, director-general, ISMA, production is likely to touch 27.5 million for the year ending September 2008.

Production in the October-December quarter saw a sharp fall to six million tons, as against 7.3 million tons in the same quarter in the previous sugar year.

Last year, the industry had seen a record production of 28.4 million, leading to a virtual glut, and a sharp fall in prices, in the domestic market. But this discouraged farmers, many of who have switched over to wheat and oilseeds.

Jain, however, does not buy the story of farmers moving over to other crops. He points out that with the commodity fetching a good price, farmers are unlikely to cut planting cane this year.

Other analysts though worry that while production might cross 27 million this year, in 2009 there could be a fall of nearly five million tons, leading once again to a spurt in prices.

SUGAR is one of the most politically sensitive crops in India  along with onions and potatoes  and the central government is leery of allowing any sharp fluctuation in prices. If production dips dramatically in 2009, a crucial election year, the United Progressive Alliance (UPA) government may be in deep trouble.

It is also a highly controlled commodity, with the government having a major say in matters relating to production, exports, pricing and other crucial aspects. When sugar production is low, the government imposes a ban on exports, as happened last year. The ban was revoked only in January 2007, but it impacted exports.

As against 1.7 million tons of exports last year, the industry has already contracted to export about three million tons. This may rise to 3.5 million tons by the end of the season, but only if there is a narrowing down in the difference in the domestic and international price of the commodity.

The International Sugar Organization estimates that India will continue exporting three million tons of sugar every year for the next two to three years.

Sugar mills are keen on selling in the domestic market, where prices are at about $350 a ton, as against $300 to $320 internationally. Exporters have already shipped over a million tons of sugar in the current crop year  mainly to the Gulf  and with the crushing season on in full swing, expect to wrap up another two to 2.5 million tons of exports before the onset of the monsoon.

Indias annual domestic consumption is around 20 million tons. Last years record production saw inventories climb to 14 million tons in October last year; and could touch 17 million tons over the next six months, despite a spurt in exports.

Production and supply of sugar  both to the domestic and international markets  is highly regulated by the government, which decides on the quantity of sugar that a mill can sell in the market. About 100,000 tons are released every month for sale through the public distribution system.

With the end of winter and the onset of the festive season, the Food and Civil Supplies ministry has raised the supply quota by a hundred thousand tons in February to 1.4 million tons. This has brought down prices significantly.

In March, about 1.6 million tons will be available for sale in the open market, but an additional 200,000 tons carried over from the previous months will add to the glut in the market, resulting in another sharp fall in prices.

THE two biggest producers of sugar in India are Maharashtra and Uttar Pradesh, which together account for 60 per cent of the production. In Maharashtra, where politicians from the ruling Congress and the Nationalist Congress Party (NCP)  whose chief, Sharad Pawar, is the federal agriculture minister  control the industry.

Maharashtra is expecting a fall in sugar production this year  from 9.2 million tons last year to around 8.5 million tons  because of delay in the onset of the crushing season. But worse is in store for the ailing industry next year. According to Rajagopal Devara, the states sugar commissioner, next year production is likely to dip drastically to six million tons.

Devara attributes the likely fall to the reduction in the area under cane cultivation and diversion of cane to ethanol production. The Indian government last year made it mandatory for oil companies to go in for five per cent blending of ethanol with petrol, primarily to encourage cane consumption and help farmers, and incidentally also to encourage green fuel.

State governments have also been given the freedom to raise this to 10 per cent. With ethanol prices fixed for three years, irrespective of the fluctuation in production and demand, sugar mills are expected to expand ethanol production.

The government now allows sugar factories to produce ethanol from sugarcane directly, instead of just from molasses. Thanks to the fixed returns on ethanol, many of the factories in Maharashtra controlled by politicians  are planning to shift in a big way to ethanol production.

This, combined with the expected decline in sugar production, could lead to a sharp spurt in the price of the sweetener in the run-up to election year 2009.

The likely shortfall in sugar production has already led to a spurt in sugar prices in Maharashtra. They shot up by about 10 per cent last month, and export contracts are also dwindling, as mills are more interested in the lucrative domestic market.

The Indian government has also been subsidising sugar exports, which has come in for sharp criticism from Brazilians. Top Brazilian industry officials confronted counterparts from India at a sugar conference in Dubai this month, accusing the government of providing subsidies worth $170 million to exporters.

The Indian government claims that subsidies are a temporary measure and will be discontinued over the long run. Exporters from India have captured a large chunk of the Gulf market, pushing Brazilian sugar exporters to the sidelines in recent years.

India sidelines Brazil in Gulf sugar market -DAWN - Business; February 25, 2008


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## Bushroda

*Geothermal energy gains momentum in India*
WEBWIRE  Monday, February 25, 2008

With its expertise in renewable energy, Nordic bank Glitnir has teamed up with Bhilwara Group to develop geothermal energy projects in India and Nepal. 

Drawing on its experience in financing and advising on geothermal energy projects around the world, Glitnir has secured a 60:40 partnership with Indian energy development company LNJ Bhilwara Group. 

Glitnir will be responsible for raising capital and supplying specialist consultants for projects to build geothermal power plants in India and Nepal. LNJ Bhilwara will bring its large-scale infrastructure and local experience to its 60 per cent share of the partnership. 

Geothermal energy harnesses heat generated by the earth and is considered virtually inexhaustible, making it a sustainable and clean energy source. Unlike wind and solar installations, geothermal energy can run 24 hours a day, providing a higher and more reliable power yield. 

India has planned for $475 billion of energy investments in the next five years in anticipation of the large energy demands created by Indias fast-growing economy. 

"India is a very exciting market for Glitnir, particularly in the seafood and energy field, says Bala Kamallakharan, Executive Director of Strategic Growth at Glitnir. Given the projected growth of energy demand in India, the country needs to utilise all sources of energy possible, particularly renewable and green sources of energy like geothermal. 

By establishing an office in India, Glitnir bank will also be playing a key role in supporting the seafood and offshore service vessels industry and utilising the vast service industry in India to further improve the efficiency of Glitnir operations worldwide" he added. 

Glitnir focuses on geothermal energy as one of three global market niches (the other two are the seafood and offshore supply industries). The investment and corporate bank has formed teams of specialist bankers which operate in 11 countries around the world including China, Scandinavia, the US and the UK.


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## Bushroda

*India shows cricket the money*
MARCUS GEE 
Globe and Mail, Canada
February 25, 2008 at 12:43 PM EST

MUMBAI  Teams with names like the Delhi Daredevils. Tycoons and Bollywood stars bidding against each other for "icon" players. Teenaged bowlers turned into millionaires overnight. Television contracts worth hundreds of millions.

Suddenly awash in new money, Corporate India is shaking up the tradition-bound gentleman's game of cricket.

The new Indian Premier League has raised more than $1.7-billion (U.S.) before a single googly has been bowled. And the new league - its first season opens April 18 - bears all the corporate hallmarks of professional sports in the West.

For television rights, the Sony Entertainment Television-World Sports Group spent $918-million on a 10-year deal for league games, lured by a cricket-watching TV audience that has sometimes equalled the combined populations of North America and Western Europe. Bidding for the eight franchises brought in another $723-million.

"It's the biggest reality show," said Lalit Modi, the boyish American-educated millionaire who is the league's chairman and driving force, in an interview on Indian television. "It has the power of Bollywood and cricket combined."

With the country's economy booming, Indian tycoons have been snapping up steel, car and mining companies around the world, putting the country on the map of international business.

Now, many are spending their newfound wealth on that favourite tycoon's bauble: a sport team.

Industrialist Mukesh Ambani, India's richest man, paid $111-million for the Mumbai franchise.

"What's happening in cricket is reflecting the sweeping change that is coming over India," said Ayaz Memon, sports editor of the business daily DNA. 

"India is a powerhouse. It really shows our growing economic clout."

Traditionally, cricket has been dominated by nation-to-nation competitions featuring five-day test matches or one-day bouts.

The brash new league plans to add a little Indian spice, shortening the games to about three hours for busy modern Indians and persuading them to root for local as well as national teams in the same way Canadians back the Canucks or Canadiens.

Players will take part in a six-week season of Twenty20 cricket, a compressed version of the game started in Britain in 2003 that restricts teams to 20 overs, or series of legal deliveries by the bowler.

Promoters of the new league promise "high-octane" play in an "adrenalin packed LIVE family entertainment format."

That includes new or improved stadiums featuring corporate boxes, big-screen entertainment and even cheerleaders.

It's a far cry from the days of languid youths in white trousers and sleeveless sweaters playing on a simple oval of green grass.

The league hopes to create a uniquely Indian fusion of first-class cricket and Bollywood glamour, capitalizing on the blanket coverage that cricket gets from the scores of newspaper, TV stations and websites in India's thriving media.

That pairing was on view at the league's first player auction last week.

Players, tycoons and movie actors crowded into a five-star hotel for nine hours of frenzied haggling over some of the world's top players.

When they emerged, they had spent about $40-million on 77 Indian and international players. 

India national team captain Mahendra Dhoni will get $1.5-million for a 44-day season. Ishant Sharma, the long-haired 19-year-old fast bowler who is the emerging star of the Indian team, fetched $950,000, not including product endorsements. Australia's Brett Lee got $900,000.

The bidders were a who's who of the new Indian plutocracy, from flamboyant airline magnate Vijay Mallay to ubiquitous Bollywood star Shah Rukh Khan.

"This is an incredible opportunity," Mr. Khan said. 

"The economics of this country has changed. India is no longer on the threshold, it has walked through the door," he said.

The Indian economy has been growing at 8 per cent to 9 per cent a year, creating scores of new billionaires and a thriving middle class.

Government economic reforms have opened up once-closed industries to investment and competition, creating a host of new airlines, cellphone providers, banks and insurance companies that battle fiercely for business in a potential market of 1.1 billion people.

"You've privatized airlines and look where that's gone; you've privatized telecoms and look where that's gone," bubbled actress Preity Zinta, who showed up at the player auction in a blaze of TV lights to help bid on players for her Mohali franchise.

Purists are appalled.

Opposition politician Sharad Yadav denounced the player auction as a "vulgar display of wealth," and Bal Thackeray, chief of the nationalist Shiv Sena, said that "the game of cricket is being corrupted by industrialists who are going berserk."

Just as discomfited is the international cricket brass. 

The Dubai-based International Cricket Council sat meekly by as the new league grabbed some of the leading players in international competition at last week's auction.

"The International Cricket Council has become a poor cousin," commented the Business Standard, a Chennai daily.

"Something extraordinary has just happened in and to the world of cricket: The game's centre of gravity has shifted, unequivocally, to India."


----------



## Bushroda

*India gold futures seen conquering new highs*
By Ruchira Singh
Mon Feb 25, 2008

MUMBAI (Reuters) - The bullish wave in gold will create new highs on the Indian futures market this week as funds pour into the metal seen as a bulwark against inflation and uncertain equity markets, analysts said on Monday.

"There are both profit takers and buyers in the market at present, but the overall sentiment is bullish," said Amar Singh, head of commodity research at Angel Commodities Broking Pvt Ltd.

Singh said the record high prices could dip on profit taking, upon which, a fresh surge of investors could push it higher.

The benchmark April gold futures on the Multi Commodity Exchange of India touched its highest level at 12,186 rupees per 10 grams on Monday, as the rupee weakened against the dollar, making the metal more expensive in the local market.

In the overseas market, gold had made its record high at $953.60 an ounce on Thursday.

Expectations of the U.S. economy slipping into a recession and the current rally in crude oil on geopolitical tensions were supporting gold, said analyst Sugandha Sachdeva of Religare Commodities.

"The market will focus on the positive factors," Sachdeva said, referring to the slew of economic indicators in the U.S. expected this week.

Analysts said the market will watch housing data and the testimony by Federal Reserve Chairman Ben Bernanke for clues on the future direction of the economy.

Another analyst warned of a downside risks in the metal.

"There would be a fear of heights for everybody," said Kishore Narne, vice president -- commodities, at Anand Rathi Commodities. "The markets will remain volatile with a bullish bias."

Narne advised taking intraday positions to minimize risks from large falls until prices stabilised.


----------



## Bushroda

*The New Face of the Silicon Age* 
*How India became the world's computer capital.* 
By: Daniel H Pink 

Meet the pissed-off programmer. If you've picked up a newspaper in the last six months, watched CNN, or even glanced at Slashdot, you've already heard his anguished cry.

He's the guy - and, yeah, he's usually a guy - launching Web sites like yourjobisgoingtoindia.com and programmers nojobsforindia.com. He's the guy telling tales - many of them true, a few of them urban legends - about American being forced to train their Indian replacements. 

Because of him, India's commerce and industry minister flew to Washington in June to assure the Bush administration that Indian coders were not bent on destroying American livelihoods.

And for the past year, he's the guy who's been picketing corporate outsourcing conferences, holding placards that read WILL CODE FOR FOOD will code for food and chanting, "Shame, shame, shame!"

Now meet the cause of all this fear and loathing: Aparna Jairam of Mumbai. She's 33 years old. Her long black hair is clasped with a barrette. Her dark eyes are deep-set and unusually calm.

She has the air of the smartest girl in class - not the one always raising her hand and shouting out answers, but the one who sits in back, taking it all in and responding only when called upon, yet delivering answers that make the whole class turn around and listen.

In 1992, Jairam graduated from India's University of Pune with a degree in engineering. She has since worked in a variety of jobs in the software industry and is now a project manager at Hexaware Technologies in Mumbai, the city formerly known as Bombay. Jairam specializes in embedded systems software for handheld devices. She leaves her two children with a babysitter each morning, commutes an hour to the office, and spends her days attending meetings, perfecting her team's code, and emailing her main client, a utility company in the western US. Jairam's annual salary is about $11,000 - more than 22 times the per capita annual income in India.

Aparna Jairam isn't trying to steal your job. That's what she tells me, and I believe her. But if Jairam does end up taking it - and, let's face facts, she could do your $70,000-a-year job for the wages of a Taco Bell counter jockey - she won't lose any sleep over your plight. When I ask what her advice is for a beleaguered American programmer afraid of being pulled under by the global tide that she represents, Jairam takes the high road, neither dismissing the concern nor offering soothing happy talk. Instead, she recites a portion of the 2,000-year-old epic poem and Hindu holy book the Bhagavad Gita: "Do what you're supposed to do. And don't worry about the fruits. They'll come on their own." 

This is a story about the global economy. It's about two countries and one profession - and how weirdly upside down the future has begun to look from opposite sides of the globe. It's about code and the people who write it. But it's also about free markets, new politics, and ancient wisdom - which means it's ultimately about faith.

Our story begins beside the murky waters of the Arabian Sea. I've come to Mumbai to see what software programmers in India make of the anti-outsourcing hubbub in the US. 

Mumbai may not have as many coders per square foot as glossier tech havens like Bangalore and Hyderabad, but there's a lot more real life here.

Mumbai is India's largest city - with an official population of 18 million and an actual population incalculably higher. 

It's a sweltering, magnificent, teeming megalopolis in which every human triumph and affliction shouts at the top of its lungs 24 hours a day.

Jairam's firm, Hexaware, is located in the exurbs of Mumbai in a district fittingly called Navi Mumbai, or New Mumbai. To get there, you fight traffic thicker and more chaotic than rush hour in hell as you pass a staggering stretch of shantytowns. But once inside the Millennium Business Park, which houses Hexaware and several other high tech companies, you've tumbled through a wormhole and landed in northern Virginia or Silicon Valley. The streets are immaculate. The buildings fairly gleam. The lawns are fit for putting. And in the center is an outdoor café bustling with twentysomethings so picture-perfect I look around to see if a film crew is shooting a commercial.

Hexaware's headquarters, the workplace of some 500 programmers (another 800 work at a development center in the southern city of Chennai, and 200 more are in Bangalore), is a silvery four-story glass building chock-full of blond-wood cubicles and black Dell computers. In one area, 30 new recruits sit through programming boot camp; down the hall, 25 even newer hires are filling out HR forms. Meanwhile, other young people - the average age here is 27 - tap keyboards and skitter in and out of conference rooms outfitted with whiteboards and enclosed in frosted glass. If you pulled the shades and ignored the accents, you could be in Santa Clara. But it's the talent - coupled with the ridiculously low salaries, of course - that's luring big clients from Europe and North America. The coders here work for the likes of Citibank, Deutsche Leasing, Alliance Capital, Air Canada, HSBC, BP, Princeton University, and several other institutions that won't permit Hexaware to reveal their names. 

Jairam works in a first-floor cubicle that's unadorned except for a company policy statement, a charcoal sketch, and a small statue of Ganesh, the elephant-headed Hindu god of knowledge and obstacle removal. Like most employees, Jairam rides to work aboard a private bus, one in a fleet the company dispatches throughout Mumbai to shuttle its workers to the office. Many days she eats lunch in the firm's colorful fourth-floor canteen. While Hexaware's culinary offerings don't measure up to Google's celebrity chef and gourmet fare, the food's not bad - chana saag, aloo gobi, rice, chapatis - and the price is right. A meal costs 22 rupees, about 50 cents.

After lunch one Tuesday, I meet in a conference room with Jairam and five colleagues to hear their reactions to the complaints of the Pissed-Off Programmer. I cite the usual statistics: 1 in 10 US technology jobs will go overseas by the end of 2004, according to the research firm Gartner. In the next 15 years, more than 3 million US white-collar jobs, representing $136 billion in wages, will depart to places like India, with the IT industry leading the migration, according to Forrester Research. I relate stories of American programmers collecting unemployment, declaring bankruptcy, even contemplating suicide - because they can't compete with people willing to work for one-sixth of their wages.

The six Hexawarians are sympathetic but unmoved. They disagree with the very premise that cheap labor is hurting the US. And they think it's somewhat laughable that, because things aren't going exactly our way, ordinarily change-infatuated Americans are suddenly decrying change. "Back in the US, it's all about cheap, cheap, cheap. It's not only about India being cheap. It's quality services," says Jairam's colleague Kavita Samudra, who works on applications for the airline industry. "The fact that they're getting a quality product is why people are coming to us."

Ritesh Maniar reminds me that Hexaware has scored a Level 5 rating from Carnegie Mellon's Software Engineering Institute, the highest international standard a software company can achieve. The others are quick to note that, of the 70 or so companies in the world that have earned this designation, half are from India. Over several days, here and at other companies, I hear this factoid repeated like a campaign talking point.

Translation: We're not just cheaper, we're better. 

And that, they say, is good for everyone. Maniar, a senior technical architect, describes one American client: "We helped them become process-oriented, which they were not before. They were spending again and again on the same thing. We explained the process that we follow, because we would like to bring them up to our standards." 
"Don't you think we're helping the US economy by doing the work here?" asks an exasperated Lalit Suryawanshi. It frees up Americans to do other things so the economy can grow, adds Jairam.

What begins to seep through their well-tiled arguments about quality, efficiency, and optimization is a view that Americans, who have long celebrated the sweetness of dynamic capitalism, must get used to the concept that it works for non-Americans, too. Programming jobs have delivered a nice upper-middle-class lifestyle to the people in this room. They own apartments. They drive new cars. They surf the Internet and watch American television and sip cappuccinos. Isn't the emergence of a vibrant middle class in an otherwise poor country a spectacular achievement, the very confirmation of the wonders of globalization - not to mention a new market for American goods and services? And if this transition pinches a little, aren't Americans being a tad hypocritical by whining about it? After all, where is it written that IT jobs somehow belong to Americans - and that any non-American who does such work is stealing the job from its rightful owner?

Maybe these US programmers should simply adjust. That's what Indian textile workers did when their country's government opened its quasi-socialistic economy in 1991, says Jairam. Some people lost jobs. They complained, but they found something else to do. Maniar uncorks an aphorism that he doesn't realize I've heard 8,000 times before (in part because American white-collar workers have long said it to their blue-collar compadres) - and that I don't realize I'll hear several times again during my stay: "There's nothing permanent except change."

Back in the US, you can feel the rage. Application developer Mike Emmons of Longwood, Florida, for example, is running for Congress on a platform that calls for the end of outsourcing. Emmons also wants to curtail temporary work visas for immigrant programmers, such as the always controversial H1-B and its stealthier counterpart, the L-1, which he says have cost him and other American programmers their jobs. "These cats will lie through their teeth," Emmons says, hreferring to incumbent members of Congress like the one he's trying to oust. "They're using immigration to reduce the wages of Americans." Other programmers, once resolutely go-it-alone apolitical types, have formed advocacy groups with righteous names like the Rescue American Jobs Foundation, the Coalition for National Sovereignty and Economic Patriotism, and the Organization for the Rights of American Workers. 

One such group has adopted a friendlier title, the Information Technology Professional Association of America. But its founder, 37-year-old Scott Kirwin, voices the same indignation. "I'm very pissed off," he tells me over lunch in Wilmington, Delaware, where he lives. "I want to make people aware of what's going on with outsourcing."

Kirwin was a latecomer to the IT world. After college, he lived in Japan for five years, then returned to the States hoping to join the US Foreign Service. 

He didn't get in. In 1997, he and his wife moved to Wilmington, her hometown, and he took a job at a tech support company outside Philadelphia, where he learned Visual Basic.

Kirwin discovered that he loved programming and did it well. By 2000, he was working at J.P. Morgan in Newark, Delaware, providing back-office database services for the firm's bankers around the world. But after Morgan merged with Chase, and the bloom left the boom, the combined firm decided to outsource the responsibilities of Kirwin's department to an Indian company. For nine months, he worked alongside three Indian programmers, all on temporary visas, teaching them his job but expecting to stick around as a manager when the work moved to India. Last March, Kirwin got his pink slip.

The experience did more than capsize his work life. It battered his belief system. He's long espoused the virtues of free trade. He says that he supported Nafta and that for 12 years he's subscribed to The Economist, a hymnal in the free trade church. But now he's questioning core beliefs. "These are theories that have really not been tested and proven," he says. "We're using people's lives to do this experiment - to find out what happens."

"I'm not religious," he tells me. "But I believe that everyone has to have faith in one thing. And my faith has been in the American system." That conviction is weakening. "Politicians are not aware of the problem that information workers are facing here. And it's not just the IT people. It's going to be anybody. That really worries me. Where does it stop?"

Seventy miles up the Northeast Corridor is a politician who is asking that very question - and who, in the process, has become something of a folk hero to programmers like Kirwin. Shirley Turner represents the 15th District in the New Jersey State Senate. In 2002, Turner learned that eFunds, the company that administers electronic benefits cards for the state's welfare recipients, had moved its customer service jobs from the US to a call center in Mumbai. She was stunned that the jobs were going overseas - and that taxpayer dollars were funding the migration. So Turner introduced legislation to ban the outsourcing of any state contracts to foreign countries.

Word of Turner's actions rippled across the Internet. Over the last year, she says, she's received more than 2,000 letters and emails from around the country - mostly from programmers. "I had no idea what these people were going through with outsourcing in the private sector," Turner told me at her district office in Ewing, New Jersey, just outside Trenton. 

Turner's bill passed the state senate by a 40-to-0 vote. But it got bottled up in the assembly, thanks to the efforts of Indian IT firms and their powerhouse Washington, DC, lobbying firm, Hill & Knowlton. However, eFunds, chastened by the bad publicity and eager for more state contracts, moved its call center from Mumbai to Camden, New Jersey. And this former small-time civil servant found herself articulating what might be the political philosophy of the Pissed-Off Programmer. 

Turner's office is decorated in early politico. Framed pieces of legislation hang on the wall. Large New Jersey and US flags stand behind her imposing desk. Her credenzas are crammed with photos of herself rubbing shoulders with various dignitaries, including three shots of her clasping hands with Bill Clinton. She's good at what she does - so smart and likable that she can make what many would consider retrograde views sound eminently reasonable. After talking to her for 10 minutes, I think, if Ross Perot had picked her as his running mate, he might have had a shot.

"We can't stop globalization," Turner says. But outsourcing, especially now, amounts to "contributing to our own demise." When jobs go overseas, governments lose income tax revenue - and that makes it even harder to assist those who need a hand. Losing IT jobs has particularly frightful consequences. In a jittery world, "it's really foolish for us to become so dependent on any foreign country for those kinds of jobs," she says. What's more, she continues, it imperils the US middle class. "If we keep going in this direction, we'll have just two classes in our society - the very, very rich and the very, very poor. We're going to look like some of the countries we're outsourcing to."

Her solution is simple: America first. Support American firms. Put Americans back to work. And only then, after we reach full employment, will outsourcing be an acceptable option. "If we can't take care of our own first, we shouldn't be looking to take care of other people around the world," she says. "If you're a parent, you don't take care of everybody on the block before you make sure your own children have their basic needs met."

It all sounds so 20 years ago - when the threat to economic prosperity and national sovereignty was not Indian coders but Japanese autoworkers. Back then, the predictions were equally alarmist - the "hollowing out" of America, people called it. And the prescriptions were equally blunt - trade sanctions and "Buy America" campaigns. 

So I toss a slur across her desk. I call her a protectionist.

"Oh, and I'm proud of it," she responds. "I wear that badge with honor. I am a protectionist. I want to protect America. I want to protect jobs for Americans."

"But isn't part of this country's vitality its ability to make these kinds of changes?" I counter. "We've done it before - going from farm to factory, from factory to knowledge work, and from knowledge work to whatever's next."

She looks at me. Then she says, "I'd like to know where you go from knowledge." 

Another day, another global menace. Today I'm at Patni, the software company where Aparna Jairam worked for two years in the late '90s. Patni's headquarters sits in another section of Mumbai - and as at Hexaware, the contrast between inside and outside is stark. Its interior is Silicon Valley circa 1999 - curvy door handles, funky chairs, a rooftop patio, and a pool table. But when I glance out an office window, just beyond the sidewalk I see a family living in a makeshift dwelling of plywood and tattered plastic. 

Patni differs from Hexaware in a few important ways. For starters, it's bigger. Patni is India's sixth-largest software and services exporter; Hexaware ranks 18th. Patni employs about 6,500 people in offices all over the world and has a long-standing relationship with GE and a $100 million investment from the venture capital firm General Atlantic Partners. It also has a more secretive atmosphere. I'm not allowed to ask certain questions (including how much money the workers earn). When I set up my tape recorder for interviews, my ever present Patni minder pulls out his own tape recorder. Although security cameras abound, I'm not allowed on certain floors unless Patni's director of security accompanies me. 

Yet for all this muscle-flexing, Patni remains a relative pipsqueak. Its 2002 revenue was about $188 million. That same year, the American IT firm EDS hauled in revenue of $21.5 billion. There's something adolescent about Patni - indeed, about many Indian IT firms. They're growing quickly, but they still don't quite seem like full-fledged adults. From an Indian perspective, though, this moment is understandably invigorating. The country now has the second-fastest-growing economy in the world. Within four years, IT outsourcing will be a $57 billion annual industry - responsible for 7 percent of India's GDP and employing some 4 million people.

But from an American perspective, the threat this poses seems pretty meager. A $57 billion market represents about 0.5 percent of US GDP. And for added perspective, it's important to continue looking out those windows. India has a long way to go. Nearly a quarter of the country lives in poverty.

The telecommunications infrastructure is subpar. And modernity stands just steps away from ancient animosities. 

The week I was in Mumbai, global business guru and former MIT dean Lester Thurow was in town trumpeting the possibilities of "Brand India" - as militants planted bombs in taxis and killed 53 people.

Nonetheless, as with all adolescents, through the gangliness and overconfidence you can glimpse the contours of the future. Patni's hallways are filled with the air of inevitability. Project manager Aditya Deshmukh worked in Baltimore and New Jersey for three years but has no desire to return to the States; India's where the action is. 

More than half of the Fortune 500 companies are already outsourcing work to India.One reason: Nearly every educated person here speaks English. For India - especially in its competition with China, where few have mastered Western languages - English is the killer app. This company and this industry will undoubtedly grow bigger, stronger, and smarter. That represents a threat to the status quo in the US. But such threats are an established pattern in our history. As Deshmukh reminds me before I have a chance to cover my ears and flee, "Change is the only constant." 

A century ago, 40 percent of Americans worked on farms. Today, the farm sector employs about 3 percent of our workforce. But our agriculture economy still outproduces all but two countries. Fifty years ago, most of the US labor force worked in factories. Today, only about 14 percent is in manufacturing. But we've still got the largest manufacturing economy in the world - worth about $1.9 trillion in 2002. We've seen this movie before - and it's always had a happy ending. The only difference this time is that the protagonists are forging pixels instead of steel. And accountants, financial analysts, and other number crunchers, prepare for your close-up. Your jobs are next. After all, to export sneakers or sweatshirts, companies need an intercontinental supply chain. To export software or spreadsheets, somebody just needs to hit Return.

What makes this latest upheaval so disorienting for Americans is its speed. Agriculture jobs provided decent livelihoods for at least 80 years before the rules changed and working in the factory became the norm. Those industrial jobs endured for some 40 years before the twin pressures of cheap competition overseas and labor-saving automation at home rewrote the rules again. IT jobs - the kind of high-skill knowledge work that was supposed to be our future - are facing the same sort of realignment after only 20 years or so. The upheaval is occurring not across generations, but within individual careers. The rules are being rewritten while people are still playing the game. And that seems unjust.

Couple those changed rules with the ham-fisted public relations of the American companies doing the outsourcing and it's understandable why programmers are so pissed. It makes sense that they're lashing out at the H1-B and L-1 visas. US immigration policies are a proxy for forces that are harder to identify and combat. It's easier to attack visible laws than it is to restrain the invisible hand. To be sure, many of these policies, especially the L-1, have been abused. American programmers have done an effective job of highlighting these abuses - and during an election year, Congress will likely enact some hreforms. But even if these visa programs were eliminated altogether, not much would change in the long run.

Patni's head of human resources, Miland Jadhav, compares the Pissed-Off Programmers' efforts to the protests that greeted Pizza Hut's arrival in India. When the chain opened, some people "went around smashing windows and doing all kinds of things," but their cause ultimately did not prevail. Why? Demand. "You cannot tell Indian people to stop eating at Pizza Hut," he says. "It won't happen." Likewise, if some kinds of work can be done just as well for a lot cheaper somewhere other than the US, that's where US companies will send the work. The reason: demand. And if we don't like it, then it's time to return our iPods (assembled in Taiwan), our cell phones (manufactured in Korea), and our J. Crew shirts (sewn in Indonesia). We can't have it both ways.

Still, if you're 61 years old, it makes sense to borrow a page from Charlie Chaplin and try to throw a wrench into the machine. John Bauman is 61 years old. More than a year ago, Northeast Utilities fired Bauman and 200 other IT consultants. From his home in Meriden, Connecticut, he created the Organization for the Rights of American Workers. The mission: to protest H1-B and L-1 visas. He feels that if he can slow things down, he stands a chance. When I speak to him by phone one afternoon, I offer the standard defense of globalization and free trade - that they disrupt in the short term but enrich over time. But it's hard to make this argument with much gusto to a man who, faced with his unemployment benefits running out, had to take a temporary job delivering boxes for FedEx. The invisible hand is giving him the finger. A compassionate society must somehow help its John Baumans. 

But the rest of us, like it or not, will have to adjust. The hints about how to make this adjustment are evident at Patni. As I meet programmers and executives, I hear lots of talk about quality and focus and ISO and CMM certifications and getting the details right. But never - not once - does anybody mention innovation, creativity, or changing the world. Again, it reminds me of Japan in the '80s - dedicated to continuous improvement but often at the expense of bolder leaps of possibility. 

And therein lies the opportunity for Americans. It's inevitable that certain things - fabrication, maintenance, testing, upgrades, and other routine knowledge work - will be done overseas. But that leaves plenty for us to do. 

After all, before these Indian programmers have something to fabricate, maintain, test, or upgrade, that something first must be imagined and invented. 

And these creations must be explained to customers and marketed to suppliers and entered into the swirl of commerce in a fashion that people notice, all of which require aptitudes that are more difficult to outsource - imagination, empathy, and the ability to forge relationships.

After a week in India, it seems clear that the white-collar jobs with any lasting potential in the US won't be classically high tech. Instead, they'll be high concept and high touch.

Indeed, Kirwin, the programmer in Delaware, partly confirms my suspicion. After he lost his job at J.P. Morgan, he collected unemployment for three months before he found a new job at a financial services company he prefers not to name. He's now an IT designer, not a programmer. The job is more complex than merely cranking code. He must understand the broader imperatives of the business and relate to a range of people. "It's more of a synthesis of skills," he says, rather than a commodity that can be replicated in India. 

Kirwin still believes the job is "offshorable," though I'm less certain. And he's earning less than he did at J.P. Morgan, though the downturn is much to blame for that, as it is for at least part of the broader anxiety that programmers are feeling.

But Kirwin does begin to address Senator Turner's question. Back in New Jersey, she introduced what appeared to be an unanswerable riddle: What comes after knowledge? The answer, perhaps, is an update of the slogan that appears in giant steel-and-neon letters on the Trenton Bridge, just a few miles from Turner's office. That slogan, affixed to the bridge in 1935 to proclaim the region's manufacturing strength, reads TRENTON MAKES - THE WORLD TAKES. Now that the rest of the world is acquiring knowledge, and we're moving to work that is high concept and high touch, where innovation is essential but the path from breakthrough to commodity is swift, the more appropriate slogan - of both admonition and possibility - might be this: AMERICA DISCOVERS. THE WORLD DELIVERS.

It's a soggy, breezy Saturday afternoon - and I'm hanging out with Aparna Jairam and her husband, Janish, in their comfortable sixth-floor flat in suburban Mumbai. Janish, who also works in the IT industry, is a genial fellow whose laid-back friendliness nicely complements his wife's quiet intensity. We're drinking tea, eating vadas, and discussing the future.

"Someday," Janish says, "another nation will take business from India." Perhaps China or the Philippines, which are already competing for IT work.

"When that happens, how will you respond?" I ask.

"I think you must have read Who Moved My Cheese?" Aparna says to my surprise. 

Janish gets up from the couch, and to my still greater surprise, pulls a copy from the bookshelf. Who Moved My Cheese? is, of course, one of the best-selling books of the past decade. It's a simpleminded - and, yes, cheesy - parable about the inevitability of change. The book (booklet is more like it - the $20 hardcover is roughly the length of this article) is a fable about two mouselike critters, Hem and Haw, who live in a maze and love cheese. After years of finding their cheese in the same place every day, they arrive one morning to discover that it's gone. Hem, feeling victimized, wants to wait until somebody puts the cheese back. Haw, anxious but realistic, wants to find new cheese. The moral: Be like Haw. 

Janish gave Aparna a copy of the book for their wedding anniversary last year. (He inscribed it, "I am one cheese which won't move.") She read it on a Hexaware commuter bus one morning and calls it "superb." 

The lesson for Aparna was clear: The good times for Indian IT workers won't last forever. And when those darker days arrive, "We should just keep moving with the times and not be cocooned in our little world. That's the way life is." Or as Haw more chirpily explains to his partner, "Sometimes, Hem, things change and they are never the same. This looks like one of those times. That's life! Life moves on. And so should we."

If you're among the pissed off, such advice - especially coming from talking rodents chasing cheddar around a maze - may sound annoying. But it's not entirely wrong. So if Hem and Haw make you hurl, return to where Aparna began when I met her that first day - the sacred text of Hinduism, the Bhagavad Gita, whose 700 verses many Indians know by heart. 

The Gita opens with two armies facing each other across a field of battle. One of the warriors is Prince Arjuna, who discovers that his charioteer is the Hindu god Krishna. The book relates the dialog between the god and the warrior - about how to survive and, more important, how to live. One stanza seems apt in this moment of fear and discontent. "Your very nature will drive you to fight," Lord Krishna tells Arjuna. "The only choice is what to fight against."


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## Bushroda

*Tata's On A Tear*
Mira Kamdar 
FORBES, NY
02.25.08, 6:00 AM ET

Tata is on a tear to transform itself from an Indian corporate giant into a global business powerhouse.

Founded 140 years ago, as a family-run business dedicated to the nationalist cause of building up the industrial and knowledge base of an independent India, the $29 billion Tata Group now comprises 27 publicly listed enterprises with operations in 80 different countries employing 289,500 people.

Leading a pack of Indian companies eager to take their business overseas, Tata has dug into its deep pockets over the last couple of years to acquire companies and brands needed to fuel global expansion. It's an eclectic list, ranging from the beverage business with Tetley Tea, to the steel business with Corus, to emerging as the likely high bidder for Ford's prestigious Jaguar and Range Rover automobile brands. Now Tata is looking to connect the dots.

As the Romans well knew, a good highway system is essential to the maintenance of empire. Having acquired outposts flung across the globe, Tata Group's latest project is building a digital highway designed to work synergistically with the group's information technology services company, Tata Consultancy Services.

It comes as no surprise, given the series of submarine cable cuts that disrupted Internet service to the Middle East and India recently, that a core part of Tata Communications' expansion in 2008 will be building new Eurasia and Intra-Asia cable systems. Clearly, connectivity to these regions is increasingly important to the global economy.

Using a page taken from sister company Tata Motors' (nyse: TTM - news - people ) playbook, the parent company is looking to derive competitive advantage from its deep knowledge of the broad emerging market environment. 

The unveiling in January of the Nano--at $2,500 the world's cheapest car; designed by Indian engineers, financed with Indian capital and destined for an Indian market of less affluent buyers ignored by other established automobile manufacturers--demonstrated Tata's stature as the emerging-market king of the automobile industry.

Similarly, the Tata Communications announcement trumpets the company's ability to broker traffic into, out of and within emerging markets across Asia, the Middle East and Africa. As Tata Communications' North America CEO Dave Ryan put it: "India, south China, South Africa--there's a view that these emerging markets are going to be the explosive growth areas for us and our clients."

Tata's strategy is as much a revolution as it is a bid for empire, and that's of paramount significance. It is one more sign of the shift of global business' center of gravity away from the developed world to the emerging markets of the developing world. Tata is turning the old imperial paradigm on its head, effectively setting itself up to move the seat of commercial empire from Europe and North America by doing what companies in developed markets are ill- prepared to do--leverage hard-won experience and established networks in emerging markets.

Advancing globalization means, among other things, that traffic--and profits--no longer flow one way out of emerging markets toward developed markets. Tata is positioning itself as much to serve prospering Indian and other emerging-market clients seeking to expand their reach into Europe and North America as it is wooing clients in developed markets who need connectivity into emerging markets. Tata Communications is looking at an "entire vision of creating a new world of communications" anchored in "our strength in emerging markets," says the firm's senior vice president for corporate strategy Srinivasa Addepalli.

Tata's ambition appears boundless. "It's always been our objective to circle the globe in terms of our assets," Ryan says. He's talking about Tata Communications' submarine cable system, but he might as well be talking about the Tata Group's overall global strategy.

It remains to be seen, however, how successful Tata will be in a global business environment teetering on the fragile fulcrum of a U.S. economy headed for recession. There was a fleeting moment when emerging markets looked like they were robust enough and self-sufficient enough to replace at least some significant portion of the great American consumption machine that drives global economic growth. It is now clear, however, that in an increasingly interconnected world, emerging markets are no more immune to a U.S. recession touched off by the subprime lending debacle than are the world's advanced economies. As a direct result, growth in China, India and elsewhere across the developing world will be lower in 2008 than it was in 2007.

Moreover, the limits of high growth are beginning to be reached in emerging markets; where critical investment in education, health and infrastructure have lagged; where an over-stretched environment is reaching the breaking point; and where the gap between the rich and poor is growing rather than shrinking. These factors are contributing as much to pushing Indian and other emerging-market companies to seek new opportunities beyond their borders as are the profits they've piled up during the recent boom years. These companies simply cannot find enough qualified workers or enough market growth at home to continue to fuel the spectacular growth that has put them on the global map.

Still, Tata is banking on the fact that companies around the world will continue to seek new markets, even if those new markets are someone else's old ones. And in a world where the easy times may be as much behind us as in front of us, Tata's argument that the hard lessons it learned figuring out how to prosper in a tough emerging-market environment give it skills other companies simply cant match may yet prove convincing. 

If so, Tata will need to guard against the menace all successful empire builders in history have faced sooner or later--going soft and growing overly confident after the empire has been won. 

*Mira Kamdar is a Bernard Schwartz fellow at the Asia Society and the author of Planet India: The Turbulent Rise of the Largest Democracy and the Future of Our World (Scribner 2008). *


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## Neo

*Honda sees India sales at 90,000 cars by 2008-09 ​*
NEW DELHI: Japans Honda Motor Co aims to raise sales in India by a third to 90,000 cars in the year beginning in April, and raise output to 160,000 by 2010 as it focuses on the fast-growing market, senior officials said. 

Honda, which makes premium sedans Honda City, Civic and Accord in India, on Monday opened a new facility at its existing factory near Delhi that would double the capacity to 100,000 units a year. 

India is the most exciting auto market in Asia. It has great potential for growth, Tatsuhiro Oyama, chief executive of Bangkok-based Asian Honda Motor Co, said at the new plant in Greater Noida. 

It is building a new plant in the western state of Rajasthan that will add 60,000 units by the last quarter of 2009, officials said. 

Honda expects to sell 68,000 cars in India during the current fiscal year ending in March. 

The Society of Indian Automobile Manufacturers (SIAM) expects a 14 percent growth in sales of passenger vehicles in 2007/08, from about 1.4 million sold in the previous year, Ranojoy Mukherji, deputy director at the industry body, said. 

Passenger vehicles comprise cars, utility vehicles and multi-purpose vehicles. SIAM does not have projections for car sales, but Mukherji said nearly 1.1 million were sold last year. 

We forecast the passenger car market to grow 16 percent in 2008/09, with the premium car segment to grow more or less at the same pace, said Jnaneswar Sen, senior general manager, marketing at Hondas Indian unit. 

In January, Honda had said it would bring to India a hybrid version of the Civic in 2008, and launch the compact Jazz car by end-2009. 

Honda has invested 16.2 billion rupees ($405 million) in the Greater Noida plant since it was launched in 1997. It will initially invest 10 billion rupees in the Rajasthan plant, Masahiro Takedagawa, chief executive of Honda Siel Cars India, said. 

The Rajasthan plant will ultimately produce 240,000 cars a year, but the ramp-up in capacity will depend upon the demand and a further investment of 20 billion rupees, he said. reuters

Daily Times - Leading News Resource of Pakistan


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## Neo

*India aims to sustain growth, control prices ​*
NEW DELHI: Indias Congress-party led government will work to sustain high rates of economic growth while keeping prices under control, the countrys president told lawmakers ahead of Fridays federal budget. 

Asias third-largest economy is forecast to expand 8.7 percent in the fiscal year to end-March, near a four-year average but moderating from blistering growth of 9.6 percent the year before. 

Firm interest rates designed to stem price pressures and trim credit growth have curbed domestic demand, which largely drives the trillion-dollar economy. 

This performance is all the more creditable against the background of high international oil prices and rising commodity prices including food, Pratibha Patil said as she flagged off the budget session of parliament. It will continue to be the endeavour of my government to sustain growth while keeping prices under check. 

Much to the central banks discomfort, inflation has been inching up in recent weeks, led higher by rising food and commodity prices at home and in global markets. 

Data released on Friday showed wholesale price inflation running at a six-month high of 4.35 percent in early February. A marginal increase in prices of widely consumed fuels earlier this month is yet to feed through to the inflation reading, and analysts expect it to tick up to near 5 percent in the weeks ahead. 

The budget on Feb. 29 will be the centre-left governments last full one with general elections due by May next year and is expected to extend tax breaks on personal income and cut duties on consumer goods to boost spending and revive growth ahead of the polls. 

Patil said historically high investment rates of over 35 percent of gross domestic product and savings rates of over 34 percent symbolised a new dynamism in the economy. I am confident that the creativity, enterprise and hard work of our young people will be able to sustain these high rates in the years to come, she said. 

Some analysts say they see a possible US recession and comparatively high Indian interest rates creating headwinds for the economy, particularly if the rupee , which gained more than 12 percent against the dollar in 2007, continued to rise. 

The central bank raised interest rates five times in 10 months from June 2006 and tightened banks reserve requirements repeatedly last year. Patil, who outlined the achievements of the communist-backed coalition, said the National Rural Employment Guarantee Act, which offers 100 days of paid work a year to rural households, would be expanded to all rural districts from April. Critics say much of the work carried out under the act, Indias most ambitious effort to tackle rural poverty, is pointless, much of the money stolen and the entire scheme misguided in a country plagued by fractious, weak and often corrupt governance. 

Daily Times - Leading News Resource of Pakistan


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## Bushroda

*Tata near deal with Ford on Jaguar/Land Rover*
By Joe Leahy in Mumbai 
Financial Times, UK
February 26 2008

Indias Tata Motors could sign a deal with Ford to buy the US carmakers Jaguar and Land Rover marques as early as next Wednesday or Thursday, people familiar with the deal said on Tuesday. 

They said the negotiations on the deal, which would be the first major acquisition of globally renowned brand names by an Indian automotive manufacturer, are ongoing and have been complicated by long-term supply contracts covering areas such as engines. 

It might still slip but everyones working towards that [March 5 or 6], said a person familiar with the talks.

Progress was made after a meeting between Tata last Friday and Unite, the main union representing employees at Jaguar and Land Rover.

Valued at about $2bn, the deal would be Tatas first big foray into the international luxury automotive manufacturing industry, and a further step by Ford towards restructuring to focus on its North American businesses. 

Ford, the worlds third-largest automaker, lost $2.67bn last year and a record $12.6bn in 2006. Mumbai-based Tata is Indias largest truck maker and second largest passenger vehicle manufacturer by sales, specialising in lower-cost small cars.

Ford declined to comment on the timing of any deal on Tuesday, saying only: The discussions are ongoing and made good progress.

Tata Motors also declined to comment. We are in negotiations and are happy with the progress, the Indian automotive manufacturer said.

But people familiar with the deal said Ford and Tata Motors were working hard towards signing a preliminary agreement next week as part of pledges to conclude arrangements by the first quarter of this year. 

Everyone is aiming for next week but whether or not that will be achieved, there is still a bit of an issue there, another person familiar with the negotiations said on Tuesday night.

The deal centres on thousands of pages of agreements on intricate vendor and supplier agreements between the Ford group and the two marques.

These cover areas ranging from engine supply, information technology, intellectual property and the two brands financial services.

One person familiar with the talks on Tuesday said Tata is expected to agree to engine supply agreements that could span the next five to 10 years. 

But even if it clinches the deal, Tata is expected to face significant challenges with Jaguar and Land Rover. 

Land Rover is profitable, with worldwide sales rising 18 per cent last year to 226,395 units but Jaguar is loss-making, with its sales falling 19 per cent to 60,485.

Jaguar is planning to launch new models that may resurrect its fortunes but the deal comes at a difficult time for luxury vehicle sales, with a slowdown in the US economy expected to hit sales.


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## Bushroda

*Indian Railways as a global player*
Rajiv Kumar
Financial Express
Tuesday , February 26, 2008

Indian Railways is on a roll. The minister justifiably started his budget speech with the announcement of a cash surplus before dividends of Rs 25,000 crore in 2007-08, compared to Rs 20,000 crore in 2006-07. Over the last five years, a total surplus of more than Rs 65,000 crore has been generated. This is quite a turnaround from a situation not long ago where it was unable to even declare a dividend. Not surprisingly, the railways and its minister have become case study in international management schools. Without wishing to take anything away from this splendid achievement, I do wish to point out that the growth in earnings in 2007-08 of both goods and passenger segments were 14%, just in line with the Economys nominal growth rate. This is not, then, an exceptional performance. Merely that it is started keeping up with the rest of the Economy at last. Good, but hardly anything to be complacent about. This implies that despite its good showing, the Railways has perhaps been unable to increase its share in total goods and passenger traffic. It would have, therefore, been better if the railway minister had given us an indication of performance vis-à-vis other means of transport (like road and civil aviation). It is important both from an economic and ecological standpoint to ensure that rail traffic increases its share of overall traffic in India. 

Given that passenger traffic continues to be cross-subsidised from revenue generated by goods traffic, there seems to be little justification for the reduction in passenger fares that has been undertaken annually. We cannot quarrel very much with a reduction of Re 1 per passenger for fares upto Rs 50. However, the reduction in AC First Class and AC Second Class fares and a 5% discount across-the-board for Second Class passenger fares above Rs 50 can hardly be justified. The objective of attracting more passengers from low-cost airlines could have been achieved by speeding up trains further, as time is the crucial element for weaning passengers away from air travel. This has become amply clear from the European experience, where the French TGV and the Franco-British/Eurostar have eaten into the airline traffic primarily by reducing travel time. 

The reduction in freight charges, nominally by 5% in case of petrol and diesel and higher for fly ash and incremental traffic booked from good sheds and private sidings, is welcome, however. This will reduce industry costs and make Indian producers more competitive. The 6% concession on traffic booked for stations in northeast India is a symbolic gesture that nonetheless is welcome. 

This is indeed a popular (populist?) budget, but even here, the tenfold increase in the per capita contribution to the railways staff benefit fund is a real surprise. A number of concessions were announced perhaps to enhance the ministers electoral appeal. These include free monthly season tickets for girl students upto graduation and boy students upto 12th standard; 50% concession for lady senior citizens, increased from 30%; concession to Ashok Chakra awardees along with the existing winners of military valour awards; 50% concession to Aids-affected persons; and the running of a Mother-Child Health Express in collaboration with Rajiv Gandhi Foundation! 

While one cannot question the ministers right to award these handouts, in light of the surpluses being generated, it may have surely been better to allocate greater funds to capital investment for modernising and upgrading railway infrastructure. This is necessary because the Indian Railways, though a matter of pride, lags badly behind its counterparts in several parts of the world. 

In this context, it is reassuring to hear that construction work on both the western and eastern dedicated freight corridors will commence in 2008-09. It is my hope that similar high-speed corridors both for passenger and freight traffic will be considered for other regions as well. The investment of about Rs 75,000 crore over the next seven years to augment line capacity on high-density traffic lanes is commendable. However, I am a bit disappointed at the inclusion of both the eastern and western corridors within this allocation. This would actually imply that only an additional Rs 15,000 crore will be spent on other projects over seven years. This is not going to be enough to upgrade and modernise capacities on these high-density routes. 

Indian Railways represents one of the countrys greatest competitive strengths. The combined network of goods and passenger services, production facilities for locomotives and rolling stock, and all the other related services constitute a system which is perhaps unique in the world. Given its present size and its expected double-digit growth for the foreseeable future, Indian Railways and its allied sectors can emerge as a globally leading sector for India. 

It is, therefore, important that the government focuses more attention on technological development and modernisation so that the benefits can be fully exploited It is time now to set our sights on the global railway market! 

*The author is director & chief executive of Icrier, a Delhi-based thinktank, and member of Indias National Security Advisory Board*


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## Bushroda

*Indian Railways posts record 6.3-billion-dollar surplus*

NEW DELHI (AFP)  Giant state-run Indian Railways, once on track for bankruptcy, posted a record 6.3-billion-dollar surplus on Tuesday, announced new lines and cut fares in a populist budget with elections looming.

"The world today acknowledges I've done a tremendous job," said the wisecracking Railways Minister Lalu Prasad Yadav, presenting his fifth railway budget since the Congress-led coalition government took office in 2004.

The railway budget for the fiscal year to March 2009 is seen as a harbinger of the national budget, which comes on Friday and is the last expected to be presented before the next general elections due within 12 to 15 months.

The charismatic minister, known for his self-congratulatory style, said the railway would post a record cash surplus of 250 billion rupees or 6.3 billion dollars this year, up from a 4.4 billion dollar surplus the previous year.

The surplus, helped by higher freight traffic in a booming economy, came after experts warned in 2001 the Victorian-era railway was mired in a "terminal debt trap" and faced bankruptcy.

Yadav presented what the media dubbed a "please-all" budget with steps to boost freight operations, cut freight and passenger fares and improve services such as reservations and toilets -- both often an ordeal on Indian trains.

The budget contained planned record spending of 370 billion rupees (9.27 billion dollars), up 21 percent from the previous year, on new dedicated high density freight routes, network expansion, safety and other improvements.

Priority "has been given to modernisation," Yadav said. Easing transport bottlenecks are regarded as vital to spurring economic growth.

The fare cuts were seen as aimed at curbing inflation, running at a six-month high of 4.35 percent, that has hit hardest India's poor masses credited with giving the government its 2004 upset win.

"This is a good and strong, anti-inflationary measure," said Rajeev Chandrasekhar, president of the Federation of Indian Chambers of Commerce and Industry.

When the minister took over the railway, one of the world's largest which carries 18.5 million people daily, it was burdened with huge losses.

But Yadav transformed its finances by expanding freight capacity and building new lines, leasing out ad spaces, introducing competitive bidding and other innovations. It now is one of the public sector's best cash generators.

"If you do not milk the cow fully, it falls sick," Yadav, son of an illiterate cowherd, once said to explain the railways' transformation.

He compared Tuesday the "historic" turnaround of the railway, still India's main form of long-distance travel despite fierce competition from new private airlines, to the latest Bollywood hit movie "Chak De India" or "Go India."

"Every child in the country will now say 'Chak De Railway,'" Yadav told parliament. "We're scoring goal after goal."

Indian Railways forecast gross traffic earnings would grow by over 12 percent next year despite the fare cuts.

Yadav, head of the Rashtriya Janata Dal, the second biggest party in the coalition, is now invited by business schools to pass on his management tricks.

"The sapling we planted will grow into a mighty tree and bear fruit," said Yadav.

The railway's upturn has given an image makeover to Yadav, whose 15-year-rule of poverty-hit, crime-ridden eastern Bihar state was dubbed by critics as "jungle raj."


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## Bushroda

*Medical tourists from around world flock to India*
Julie Hutchinson
Rocky Mountain News, CO 
Tuesday, February 26, 2008 

Ryan McLean has been accepted for experimental therapy involving human embryonic stem cells at a clinic in Delhi, India, where the treatment is legal.

People with irreversible injuries can voluntarily undergo experimental treatment at clinics like the one where McLean will go this summer.

McLean applied to the Delhi clinic of Dr. Geeta Shroff after learning of the experience of 40-year-old Basalt resident Amanda Boxtel, who has lived in a wheelchair since a 1992 skiing accident at Snowmass left her a paraplegic.

On the Web site McLean established to help raise money for her trip to India, the Cherry Creek High School biology teacher describes Boxtel as a "mentor" who helped her following the 1997 car crash that left her paralyzed from the rib cage down.

Boxtel reports she is experiencing significant ongoing improvement, including increased bladder and muscle control, since she completed her second round of therapy at Shroff's Nutech Mediworld clinic early this year. 

Boxtel traveled to Delhi for her first treatment in June 2007. If progress continues, Boxtel expects to undergo up to six more treatments over the next two years.

Boxtel said on her Web site that each regimen costs about $15,000, plus travel, meals and medicine, and requires rigorous daily physical therapy - a further expense. 

In an article in The Aspen Times, Boxtel said she was one of the first Americans to visit Shroff's clinic last June.

The Indian Journal of Medical Ethics said the country's growing medical tourism market contributed more than $300 million to the economy in 2005. More than 1 million foreigners from 55 countries visited India for medical care in 2005. The Journal estimates visitors from the U.S. and United Kingdom represented the biggest increases.


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## Bushroda

*India on the brink of property boom*
by Robert Carry
Asia Property Report, Thailand

Market analysts are predicting a seven fold growth in Indian real estate value  from US$12 billion to $90 billion by 2015  in the wake of the governments decision to implement a 100 per cent relaxation of foreign direct investment regulations last year. 

Martin Bowen, UK Sales Director of Profile Europe (UK) Ltd said, The residential property market is experiencing exponential growth right across India, but especially in urban areas and those close to the governments new specialised industrial zones. 

Recent figures cited by the Bank of Barodas Chief Economist show properties have appreciated by as much as 60 per cent to 100 per cent over the last 12 months in most towns.

The ratio of supply and demand is believed to be a key factor in the massive growth. Bowen continues, There is a shortfall of some 20 million units, this is largely due to 55 per cent of Indias population being under 25 and the fact that the economy is booming and has resulted in a growing middle class, looking for quality accommodation because of growing disposable incomes.

Add to this the growing mortgage market and declining interest rates which have made property more affordable despite actual property price increases.

Profile Europe (UK) Ltd comes under the umbrella of the Profile Group, which was established in the UAE in early 2003 with interests in capital, investments, consulting, real estate developments, project management and real estate sales.


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## Bushroda

*Indias Model T*
By JAMES A. MCFADDEN
Harvard Crimson, MA
Monday, February 25, 2008 10:37 PM

The ownership of an automobile in the United States has become nothing short of a divine birthright. Its a universally accepted fact: Americans love their cars and would sooner sacrifice their firstborn than relinquish their entitlement to the family sedan. And naturally, many have lambasted for years the environmental destruction brought upon by this auto-centric culture. Yet as the U.S. continues to look for a balance between going green and the American dream, India has found its place amidst the controversy with its new initiative, the Tata Corporations Nano, also known as the worlds cheapest car. Rather than criticize the environmental impact of this car, people around the world should praise these Indian innovators for their contribution to a developing economy. 

The subcompact vehicle introduced last month costs $2,500 and Tatas self-proclaimed goal is to make automotive transport accessible to every Indian family, calling it The Peoples Car. Proponents laud the Nano as a giant egalitarian step for India that will help to break down class barriers and bring transport to the masses. Such praise has been drowned out, however, by critics who claim that the car will mark the beginning of the environmental apocalypse. 

This argument is ridiculous considering that the United States overwhelmingly dominates global vehicle production and accounts for more than 20 percent of global gas consumption, although America accounts for only 4.6 percent of global population. Its laughable that India should be criticized for attempting to enter the auto era as Americas love affair with cars enters its second century. The double standard of Western environmentalists smacks of a do as I say, not as I do attitude toward the Indian innovators. Not only should Indias government more actively facilitate such accessible transport, but also the rest of the world should applaud Tatas step in a positive direction. 

Economics professor Lawrence H. Summers has said that current levels of gross domestic product per capita in Indiaessentially, standards of livingare roughly equivalent to those in America pre-Civil War. As such, the closest automobile comparison to the Nano would be the Ford Model T. The Model T first rolled off the assembly line in 1908, its production reaching 15 million within 20 years. That is three times the rate at which Tata plans to introduce its no-frills vehicle. Furthermore, Model T fuel consumption averaged 15 miles per gallonbetter than a Hummerwhile the Nano can boast 50 miles per gallon. And when it comes to the bottom line, theres no contest: the affordable Model T ran the typical turn-of-the-century buyer under $20,000 in 2007 dollars, almost 10 times as much as the Nano costs. 

This begs the question: if the Nano was being released in the U.S., would it be considered the same hazard to the environment? The champions of sustainability salivate at the thought of a Toyota Prius roaming the interstate highways, and yet the Nano has been dubbed an eco-disaster. Nobel Laureate and chairman of the United Nations Intergovernmental Panel on Climate Change Rajendra Pachauri goes so far as to say that the new Nano is giving me nightmares, and worries about the effects upon traffic and confusion on Indias roadways. 

What Pachauri should be worried about is the improvement of infrastructure and bringing smarter technology to Indias masses, rather than simply avoiding the problem by posturing against the Nano. In a country with such a rapidly growing middle class, on the verge of becoming the worlds largest nation, the Nano is an exceptionally smart innovation. It is compact, it is safe, it is cheap, and above all it is more fuel efficient and produces fewer emissions than the vast majority of cars youll find on the Mass Pike or any other American expressway. In short, the development of Indias economy is more important right now than a relatively small environmental threat like the Nano. Tata has reached its goal in terms of supplying accessible and emissions-compliant transportation; the Indian government should now step up to the plate as well to implement strategies to increase the viability of accessible transport. 

It is true that many Americans consider themselves incapable of living without the cherished automobile, and correspondingly, traffic and pollution in the U.S. has become a big problem. This, however, does not mean the same thing will happen in India as a result of cars like the Nano. Transportation regulation standards have traditionally lagged in India, which is something that should be a governmental, not entrepreneurial, concern. India deserves the right to be able to responsibly grow its automotive culture and learn from the western worlds mistakes. While the goal of improved mass transit and other alternatives should be actively pursued, it is not Indias sole responsibility to do so at the expense of convenient, low-cost, environmentally compliant transportation. 

Tata has raised the bar. Compared to the more common forms of transport such as crowded buses and packed motorbikes, the Nano is like a dream come true to the average Indian traveler. Furthermore, this car is emissions-compliant and poses a small environmental threat, unlike the sport utility vehicles driven by soccer moms on Massachusetts Avenue. As such, its decidedly hypocritical and perhaps even ethnocentric for western environmental activists to lecture Indians against driving cars. 

*James A. McFadden 10, a Crimson editorial editor, is a government concentrator in Mather House. *


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## Bushroda

*Indian cos raise millions in UK market*
26 Feb 2008, 0847 hrs IST,PTI

LONDON: Indian companies raised hundreds of millions of pounds on London's Alternative Investment Market (AIM) during the last year, and more companies are expected to be listed this year. 

Seymour Pierce, a leading brokerage firm that tracks Indian companies on AIM with its own index, said the Indian companies had grown from a market value of 250 million pounds to 3.3 billion pounds since January 2006. 

The Seymour Pierce India Index comprises 22 Indian companies and funds. They are predominantly financial - almost half - followed by media and utility companies. 

Two Indian companies that have performed particularly well are KSK Power Venture, which has developed power plants in India, and entertainment giant Eros International. 

Nicholas Linington, an analyst at Seymour Pierce, wrote in a report last week: "There has been a steady addition of Indian companies listing on Aim in the last two years. We expect a greater number of small and medium-sized Indian companies to seek international investors as the economy opens up." 

Seymour Pierce found that Indian companies on AIM had delivered 21 per cent absolute performance over the past year, compared with flat results for the rest of the market, according to the report quoted in The Independent.


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## Bushroda

*New Bangalore airport exposes India's infrastructure challenge*

BANGALORE, India (AFP)  In southern India the much-awaited Bangalore international airport is almost ready, but getting there could prove a nightmare for travellers facing more chaos on clogged roads.

The 630-million-dollar facility is 95 percent complete, and will open for flights as scheduled on March 30, Bangalore International Airport Ltd. (BIAL) chief executive officer Albert Brunner said.

Brunner has met his deadline to complete the airport, located 36 kilometres (22.5 miles) north of the choked city centre, in three years.

That feat alone is remarkable in a country where such large infrastructure projects routinely run into major delays.

But the government has not delivered on promises to widen access roads or build a dedicated rail link to and from the city -- meaning the commute could take much longer than a short-haul flight.

The railway is still only a proposal on paper, while a four-kilometre road from the nearest highway to the airport is still to be completed. The airport itself has taken over construction of the link in a bid to open it on time.

"It's a pity the government didn't do anything about connectivity to the airport," lamented Marcel Hungerbuehler, chief operations officer at BIAL, a consortium that includes Unique Zurich Airport, Siemens of Germany and Larsen and Toubro of India.

The Bangalore project well illustrates the problems India faces in fixing its creaky infrastructure to match an economy expanding at an annual rate of nine percent.

Growing personal incomes have fuelled a surge in air traffic and car sales, straining aviation and road infrastructure in a country that needs to invest tens of billions of dollars in public works.

Domestic air traffic is forecast to double to 60 million passengers by 2010 from last year, while car sales are projected to reach two million units from 1.4 million in the same period.

"BIAL has done its job," said Kapil Kaul, the India head of the Centre for Asia-Pacific Civil Aviation.

"The other stakeholders, mainly the state government, have almost totally ignored their responsibility of providing logistics.

"I find it shocking that an airport is ready, but there may be no way of getting there."

From Electronic City in south Bangalore -- the hub of India's information technology industry -- it could take a four-hour drive to reach the airport when it opens.

Flying time to the nearby southern city of Chennai is just 40 minutes.

"It will be a nightmare driving to the airport," said N. Reghuraj, the head of the local chapter of the Confederation of Indian Industry, who flies out of Bangalore's old airport twice a week.

"The passengers are not happy, the cargo guys are not happy."

India's traffic problem is particularly acute in Bangalore, and seemingly set to worsen. The city of six million people adds 1,000 vehicles to the roads a day and traffic crawls at an average speed of 13 kilometres an hour.

Bangalore also recorded growth of 38 percent in air traffic in the year to August 2007, the highest for any Indian city.

The new airport is one of several from Hyderabad to Mumbai and Delhi where old terminals are bursting at the seams, and had to be redesigned to handle 11 million passengers a year over earlier estimates of five million.

Under an agreement between the government and BIAL, the existing airport in east Bangalore, a modest 10 kilometres from the city centre, will be closed to commercial traffic when the new facility is open.

But calls to keep the old airport open are becoming louder as airlines and passengers prepare for a painful transition.

"People don't want to spend four hours on the roads commuting from the south to the north of Bangalore," said G.R. Gopinath, head of Deccan, India's biggest budget carrier.

"Multiple airports add competitive pressure for better pricing and better service quality -- there shouldn't be a monopoly."

Meanwhile, he plans to start a helicopter shuttle from the city to the new airport for passengers who can afford to cough up 4,000 rupees (100 dollars) for the ride.


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## Neo

* Indian Railways posts record $6.3bn surplus ​* 
Wednesday, February 27, 2008

NEW DELHI: Giant state-run Indian Railways, once on track for bankruptcy, posted a record 6.3-billion-dollar surplus on Tuesday, announced new lines and cut fares in a populist budget with elections looming. 

The world today acknowledges Ive done a tremendous job, said the wisecracking Railways Minister Lalu Prasad Yadav, presenting his fifth railway budget since the Congress-led coalition government took office in 2004.

The railway budget for the fiscal year to March 2009 is seen as a harbinger of the national budget, which comes on Friday and is the last expected to be presented before the next general elections due within 12 to 15 months.

The charismatic minister, known for his self-congratulatory style, said the railway would post a record cash surplus of 250 billion rupees or 6.3 billion dollars this year, up from a 4.4 billion dollar surplus the previous year.

The surplus, helped by higher freight traffic in a booming economy, came after experts warned in 2001 the Victorian-era railway was mired in a terminal debt trap and faced bankruptcy. Yadav presented what the media dubbed a please-all budget with steps to boost freight operations, cut freight and passenger fares and improve services such as reservations and toilets, both often an ordeal on Indian trains. 

Indian Railways posts record $6.3bn surplus


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## Bushroda

*India still Asia's reluctant tiger* 
By Zareer Masani 
Presenter, BBC Radio 4's Analysis 






*Bangalore's hi-tech enclaves are an oasis of excellence*

*With its economy growing at more than triple the speed of Britain's, India has become a global leader in information technology and other hi-tech products. *

But how has this been possible in a country where poverty is so widespread and where more than a third of people are still illiterate? 

In the words of Nobel laureate economist Amartya Sen, "the danger of India moving in the direction of being half California and half sub-Saharan Africa is a real one." 

The contrast between hi-tech, silicon enclaves such as Bangalore and the primitive conditions of many Indian villages and urban slums strikes even the most casual tourist. 

So is the dramatic rise of Indian IT firms just a Californian bubble in the sub-Saharan deserts of Indian poverty? Not according to Anand Mahindra, managing director of a family business, Mahindra and Mahindra, that has grown into one of India's largest conglomerates, producing everything from tractors to telecommunications. 

"The IT sector was a kicker to growth," he says. "Its impact was psychological. It signalled to the world that India was much more than its old historical stereotypes. 

"It suddenly in an exaggerated manner, if you ask me, made the world think that every Indian was smart and could fix their computers. 

"But that helped entrepreneurs in India from all industry segments, because it gave them a more receptive environment in which to do business." 

The number of Indian IT professionals has leapt from 56,000 in 1991 to a million today. That's still tiny relative to a population of over a billion, but a rare achievement in a global market where IT has traditionally been the preserve of advanced industrial economies. 

*Reliability costs* 

But how do hi-tech Indian companies survive and prosper in an environment where even basic infrastructure like transport, power and water is so notoriously unreliable? 

Phiroz Vandrevala, executive director of Tata Consultancy Services, India's oldest and largest IT firm, says: "What we've actually done is within our own environments created global circles, oases of excellence. 






"So if we build any facility, we create a 24-hour power back-up," he says,"or if you employ x number of people, you actually transport everybody from their home to their place of work." 

"But it certainly is a cost to doing business." 

While IT firms are cocooned within their oases of excellence, poor infrastructure can be a crippling cost for other sectors, such as large-scale manufacturing. 

Anand Mahindra, whom many consider the sub-continent's most thoughtful businessman, warns that India cannot live by IT alone. 

"Even Bill Gates when he came to India said, 'IT is not the answer for employment. You're going to have to emulate China and its manufacturing sector, because that's where the jobs are and that's where the multiplier effect is the highest,'" says Mr Mahindra. 

"So it was a nice, sobering thought to come from the Messiah of IT himself. 
"If you want to make a million Barbie dolls, this is not the place to come. Then you go to China. This is not a widget-making manufacturing economy, and that is largely and possibly only due to our poor infrastructure. 

"We simply don't have the power in terms of energy to meet such high capacities. We don't have the port infrastructure and the transportation infrastructure to ship out such a high volume of goods in a reliable and timely manner." 

*Education, education* 

So instead of making widgets, Indian manufacturing is currently building on its comparative advantages in engineering-intensive goods, which require versatility, flexibility and innovation. 

One example is carmaking, with domestic and foreign firms now investing an estimated $6.6bn in new Indian factories. 





*Manufacturing is the backbone of India's strong economic growth*

But growth in these high-value sectors is also running up against a skills shortage fuelled by lack of what's called social infrastructure - primarily good education. 

Although Indian universities churn out three million graduates a year, only 15% of them are suitable employees for blue-chip companies. 
That's nowhere near enough for Phiroz Vandrevala of Tata Consultancy Services. 

"We have a tremendous amount of availability, but the suitability quotient is slightly low. If you look at about a hundred engineers from different educational institutions, in a company like ours about 20% make the cut," says Mr Vandrevala. 

"Every industry is going to have to make significant investments in training for their own skills." 

Despite growing investment in education, India still lags way behind its Western competitors. Thirty-five per cent of its population is still illiterate; only 15% of Indian students reach high school, and just 7% graduate. 

*Change is messy* 

Privatisations, or at least public-private partnerships, are now widely seen as the way to open up essential infrastructure like education, transport, power and even water to competition and new investment. 

But local delivery depends on the quality of local leadership and its willingness to cut back its own powers. 

Indian democracy undoubtedly makes structural change a lot slower and more messy than in China, but there is genuine optimism among Indian economists that the system will eventually deliver. 

"Our confidence in rapid growth is quite recent, because rapid growth itself is recent, and so for the state to gear up to provide the infrastructure that's appropriate for 8 to 9% growth is taking a while," says Suman Bery, head of a leading Delhi think-tank called the National Council for Advanced Economic Research. 

"We're not one of these countries like France or China which does things in advance and pre-emptively. "The shoe has to pinch before we get round to it. "Infrastructure strikes me as an issue that will solve itself. It may hold growth back a little bit, but I don't think it's fatal."


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## Bushroda

*School stake a passage to India while students go to Europe and US*
*Steve Coomber finds that despite closer ties, students will still travel to gain MBAs*

Steve Coomber
The Times, UK
February 28, 2008

AN ECONOMIC superpower in the making, India is the worlds second most populous nation, home to 1.1 billion people, as well as emerging multi-national corporations such as Tata, Infosys and Wipro. With Indias star in the ascent it is no surprise that business schools in the US and Europe are forging links with one of Asias most promising success stories. 

Tarun Ramadorai, lead academic on the India Business Centre initiative at Saïd Business School at Oxford University, says: India is at a unique moment in its history, it has moved from an annual growth rate of 3 per cent to 9 per cent, and done so with a model led by services rather than manufacturing, using human rather than physical capital. 

Such success merits study, and Saïd recently announced it is establishing an India Business Centre. The intention is to learn from the countrys successes but also to study some of the challenges it faces, with research themes driven by issues relevant to business and management. 

In turn the centres research will inform the MBA curriculum. Colin Mayer, dean of Saïd, says: There is a great deal of interest in the Indian economy from our students. We will develop MBA electives based on the work of the India research centre. We also expect components of courses will be delivered in India, in association with institutions there. Other schools are also focusing attention on India. For example, Judge Business School at Cambridge University is setting up the Cambridge Centre for Indian Business, while London Business School (LBS) has already opened its Aditya V. Birla India Centre. 

MBA students wishing to experience the challenges of Indian business life as part of their studies should consider programmes at schools that have developed strategic partnerships with Indian business and management schools. 

Essec Business School, near Paris, for example, recently celebrated the 25th year of its relationship with the Indian Institute of Management of Ahmedabad (IIM Ahmedabad). 

Pierre Tapie, dean of Essec, says: We were convinced that Indian students would be interested in gaining exposure to our education system, and our students would gain an advantage from having experience of India. The school introduced MBA and PhD student exchange programmes, and invited visiting faculty. Tapie adds: Gradually, we became more involved in Indian affairs, created a permanent office in India, appointed prominent Indian business figures to our advisory board, and created a double degree programme with IIM Ahmedabad. Historically, many of Indias brightest students have travelled to Europe and North America to take an MBA. But, as Indias economic prowess grows, might this trend reverse, with international students coming to India to study for their MBA? 

At present there are few signs of a permanent influx of international students. One of a wave of new business schools setting up in India, the Indian School of Business (ISB) in Hyderbad launched its first post graduate programme in 2001, with close support from three leading business schools  Wharton, Kellogg and LBS. 

Rammohan Rao, dean of the Indian School of Business, says: So far we have not been as successful as we should in attracting foreign students to India although a lot of exchange students come for a six to twelve-week period. But, as more schools set up, and educational quality improves, the number of foreign students wanting to come here may increase. Nor is the trend for Indian students travelling abroad to take an MBA likely to change in the near future, says Anant Sundaram, faculty director of executive education at Tuck School of Business at Dartmouth College in America. He says: There are only four or five world-class schools in India, but hundreds of thousands of high-quality applicants. As Indians become better off, they are more able to afford an education in top schools in the US and Europe. Also, in terms of the global career opportunities that top US and European schools can offer, Indian schools have a way to go. 

For the time being it seems that despite Indias tremendous economic success, and with business schools in North America and Europe strengthening ties with India, and businesses looking to enter Indian markets, many of the best Indian MBA students and business academics will continue to take a passage from India, heading in the opposite direction. 

*MORE INDIANS ARE RETURNING AFTER STUDYING ABROAD*

ALTHOUGH the lure of business schools in Europe and the US remains strong for Indian students, says Siddharth Nambiar, 24, a full-time MBA student at Saïd Business School at Oxford University, the difference is that many of those students are returning to India after graduation. 

With a first degree in business, and still in his early twenties, Nambiar launched what is today one of Indias leading business magazines. So why take an MBA? 

He says: After building an organisation employing about 250 people, I found it difficult to add value, My skill set tapered off. I needed a better understanding of the financial aspects of running a business to take it to the next level of investment. 

Nambiar decided not to apply to an Indian business school, though. Beyond the top five or six business schools, the quality of education drops off dramatically and more than 100,000 students chase 1,250 places available at the leading Indian business schools. 

Then there is the salary factor. Average starting salaries for Saïd MBAs are still a multiple of the salaries of MBAs from the top Indian schools, although the gap is reducing, he says. 

But while the trend is still to leave India and study abroad, postgraduates are more willing to return to pursue their careers. 

Getting an MBA overseas was seen as the ticket to getting a job and creating a better life overseas. But the recent growth has made it more possible for people like me to return to India, says Nambiar. 

I would say 80 per cent of my Indian colleagues at Saïd are looking to go back to India in the next few years, to have their family and to work there. I will definitely return to India. STEVE COOMBER


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## Bushroda

*Chinese cos to pump in Rs 8,735 cr in Karnataka*
28 Feb 2008, 0055 hrs IST,PTI

BANGALORE: Chinese conglomerate Xinxing group and China National Metal products, which have forged a joint venture with three Indian partners, on Wednesday announced an investment of Rs 8,735 crore to set up iron ore pellet plant in Karnataka in two phases. 

The JV, Xindia Steels is being promoted by the Xinxing Group, China National Metals products, a part of China Minmetals Corp, along with Manasara Investments, Kelachandra Group and Sigma Minmet. 

Under the JV, a two million tonne iron ore pellet plant will be set up at Koppal in the phase I and expanded to six million tonnes with the setting up of a five million tonne steel plant in the phase II, Liu Mingzhong, Chairman Xinxing group told reporters here. 

The Indian partners hold 45 per cent stake in Xindia and the Chinese companies, 55 per cent. 

The new facility would use Xinxing's leading edge elletization and steel making technology and be fully equipped with best-in-class safety, health and environment compliance systems. 

The project is expected to provide direct and indirect jobs to over 16,000 people in the local community in both phases. 

Mingzhong said the facility would meet the growing local demand of the Indian steel industry. Its design allows for additional capacity expansion to accommodate growth in future. The investment is in line with the company strategy to be an active contributor to the emerging Indian steel industry. 

He said Indian infrastructure has seen rapid growth in recent years resulting from investments in all sectors of the economy. 

"Our Indian team has demonstrated that Xinxing has the products and capability locally to bring these to the Indian market in a way that provides better value for customers." : Chinese conglomerate Xinxing group and China National Metal products, which have forged a joint venture with three Indian partners, on Wednesday announced an investment of Rs 8,735 crore to set up iron ore pellet plant in Karnataka in two phases. 

The JV, Xindia Steels is being promoted by the Xinxing Group, China National Metals products, a part of China Minmetals Corp, along with Manasara Investments, Kelachandra Group and Sigma Minmet. 

Under the JV, a two million tonne iron ore pellet plant will be set up at Koppal in the phase I and expanded to six million tonnes with the setting up of a five million tonne steel plant in the phase II, Liu Mingzhong, Chairman Xinxing group told reporters here. 

The Indian partners hold 45 per cent stake in Xindia and the Chinese companies, 55 per cent. 

The new facility would use Xinxing's leading edge elletization and steel making technology and be fully equipped with best-in-class safety, health and environment compliance systems. 

The project is expected to provide direct and indirect jobs to over 16,000 people in the local community in both phases. 

Mingzhong said the facility would meet the growing local demand of the Indian steel industry. Its design allows for additional capacity expansion to accommodate growth in future. The investment is in line with the company strategy to be an active contributor to the emerging Indian steel industry. 

He said Indian infrastructure has seen rapid growth in recent years resulting from investments in all sectors of the economy. 

"Our Indian team has demonstrated that Xinxing has the products and capability locally to bring these to the Indian market in a way that provides better value for customers."


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## Bushroda

*Indian PC sales soar: survey*

BANGALORE, India (AFP)  Indian computer sales jumped 20 percent last year, led by laptops, as falling prices prompted more consumers to log in and companies accelerated automation, a survey said Wednesday.

Personal computer sales rose to 6.5 million in the year ended December, from 5.4 million in 2006, according to the survey by the market-research firm IDC India.

Notebook PC sales surged to 1.8 million, from 980,000, as prices that fell below 20,000 rupees (500 dollars) made laptops the favoured choice of young first-time buyers.

"Notebooks are reaching out to more people because of the falling price point, portability and the power back-up option they offer," Piyush Pushkal, manager of PC Research at IDC India, said in an interview.

"Usage of computers in the education space is increasing," he said. "You can see young students carrying computers to college these days, which is a new trend."

An economy that has expanded at an average annual rate of 8.6 percent in the past four years has put more money in the pockets of urban Indian consumers, who are splurging on consumer durables including mobile phones and computers.

Businesses from large banks to small groceries are upgrading computer systems to cut costs and stay competitive while the government is contributing to PC sales by stepping up the automation of its departments.

The world's biggest business management software maker, Germany's SAP, said earlier this month that India is its fastest growing market after more than doubling customers to 3,000 in 2007, from 1,350 at the end of 2006.

"There is a lot of expansion happening in the information technology sector; banks are opening new branches and organised retail is coming up," Pushkal said. "That's because of the overall economic growth."

But to accelerate PC penetration, India needs more affordable Internet infrastructure, local applications and Indian language content, e-commerce and education, he added.


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## Bushroda

*India To Upgrade Rail Infrastructure With Public-private Partnership*
RTT News
2/26/2008 10:26:29 PM 

Indian Railways has drawn out a five-year expansion plan of 2.5 trillion rupees or US$63 billion for upgrading rail infrastructure. 

Unveiling this year's railway budget, the Railways Minister Lalu Prasad Yadav told parliament on Tuesday, that the government will invite public-private partnership in most of its expansion works. These include projects to upgrade facilities at railway stations, rail equipment manufacturing, multi-modal logistics parks and running of container trains.

The Minister said that the feasibility study on the dedicated freight corridors, which were announced in the 2007-08 Railway Budget, will be expedited to facilitate their construction in 2008-09 fiscal.

According to the Minister, the dedicated freight corridors, will likely to reduce the pressure on about 20,000 km of the railways' high density network, coal and iron ore routes and port connectivity railway lines that have become saturated and have a capacity utilization is in excess of 100%. These routes carry 75% of the railway goods traffic, he said.

Indian Railways, running more than 14,000 trains a day, also plans commercial use of its vast land across the country to boost revenues, the Minister said.


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## Bushroda

*Engaging India: Farming focus*
By Amy Yee, New Delhi correspondent 
February 28 2008 01:09

*Engaging India is an online column analysing the issues, trends and forces behind the business and politics shaping India and its impact on the world. Engaging India appears on Thursday mornings exclusively on FT.com India, a dedicated online section on India, and is written by Jo Johnson, the Financial Times South Asia bureau chief; Amy Yee, New Delhi correspondent; and Joe Leahy, Mumbai correspondent.*

With its new budget on Friday, Indias current administration will have its last crack at pushing an agenda geared toward aam admi  the common man  in the critical run-up to general elections in 2009.

In general, finance minister Palaniappan Chidambaram has reason to be optimistic. Revenues from corporate taxes have swelled on the back of unprecedented growth and more effective tax systems. The savings rate is nearly 35 per cent of gross domestic product and the investment rate is more than 36 per cent of GDP. Foreign direct investment exceeded $20bn last year, a level unimaginable a few years ago.

Yet India also faces testing times for its economy including gathering clouds over the US. The reasons for fiscal caution lies ahead of us, not behind, wrote Ajit Ranade, chief economist at Indian conglomerate Aditya Birla Group, in the Hindustan Times this week.

Growth for this fiscal year was expected to top 9 per cent, as in the previous two years. Recent projections, however, are that the pace will slow to 8.7 per cent this year with interest rates high and a rising rupee denting exports. 

Mr Chidambaram has encouraged banks to lower interest rates to spur consumer spending. Yet Indias central bank has kept rates relatively high as it strives to check inflation in the face of soaring global food and commodity prices.

Taking a populist approach ahead of elections to appeal to the countrys voting masses, the new budget will likely feature measures such as a reduction in indirect taxes to soften the blow of rising expenses. The Congress-led United Progressive Alliance government is expected to continue spending heavily to strengthen Indias weak public education and healthcare systems. 

But most prominent will be a big push to revive the flagging agriculture sector. An $8bn debt-relief package for farmers and other provisions for the rural sector are reportedly in the works.

Finally, a looming crisis in agriculture and food security is gaining urgency. India is waking to the consequences of neglecting agriculture for industrialisation.

The challenge today is to recast agriculture in the new environment of globalisation, rising prices, growing domestic demand and greater private sector involvement, said Isabel Guerrero, World Bank country director in India. But this will require greater investments to increase farmer yields and profitability and in rural infrastructure such as irrigation, roads, power and markets.

Food grain production in India increased a paltry 0.9 per cent last year, according to statistics from Indias ministry of agriculture. Average rice yield of 2.9 metric tonnes per hectare barely exceeds that of Burma, and is far below the USs 7.83 metric tonnes.

This reflects a steady deceleration in agriculture. Indias food grain output declined at an average rate of 0.1 per cent over the past five years, compared with 1.3 per cent growth in the five years ended March 2002 and 3.4 per cent in the five years ended March 1997, wrote Chetan Ahya, economist at Morgan Stanley, in a recent report.

Most worrying is that food demand in India is outpacing supply. Indias population of 1.1bn is growing at about 1.4 per cent. And on the back of unprecedented economic growth, middle-class Indians are eating more and better food. 

On top of that, arable land is diminishing as Indian farmers sell land to property developers willing to pay sky-high prices.

To make up for the imbalance, India increased food imports 54 per cent year-on-year as of last September, said Morgan Stanley. This is a startling development considering the country once prided itself on self-sufficiency for staple foods. 

The World Bank, after scaling back spending on agriculture in India in the 1980s and 1990s, recently pledged to refocus on the sector and has committed $2.6bn so far.

Manmohan Singh, prime minister, this month said about $8.75bn will be allocated over the next five years to two major agriculture programmes which, combined with complementary initiatives, could boost agricultural growth to 4 per cent in coming years, from around 2 per cent.

Yet while India has awakened to the importance of agriculture, reaping the fruits of investment  if implemented effectively  would take years.

Some also question the wisdom of the large debt relief package for farmers. Forgiving bad loans is only a feel-good factor, said R.S. Seshadri, director of Tilda Riceland, Indias largest basmati rice producer. Its great for election speeches but will not solve any problems. 

In the long run it would be better to let food prices rise for Indias growing middle class so farmers can earn more, suggests Mr Seshadri. 

There may be a grain of truth in that, but you wont hear it in tomorrows populist budget. Heading into an election, it would make the government decidedly unpopular.


----------



## Bushroda

*Official survey says Indian economy will keep growing, but calls for key reforms*
International Herald Tribune, France
February 28, 2008

NEW DELHI: India's booming economy is likely to keep growing at a fast pace in the coming five years, the government said Thursday, but that poor infrastructure and outdated regulations will keep it from achieving an even higher rate of growth.

The economy is expected to grow by 8.7 percent this fiscal year, which ends March 31, slowing from 9.6 percent growth rate it achieved in the 2006-2007 fiscal year, its fastest expansion in nearly two decades, according to the government's annual Economic Survey, released Thursday.

The survey said it was forecasting a slowdown because of tighter monetary policy and a weakening global economy.

After presenting the survey  delivered to Parliament a day ahead of the annual budget presentation  Finance Minister P. Chidambaram told reporters he thought India's next fiscal year looked promising, despite slowing growth.

"I am optimistic about growth and containment of inflation in the coming year," he told lawmakers. "If you wish me to sum up in one phrase the outlook for next financial year, I would say 'optimism,' but with caution as the watchword."

The report called for allowing foreign companies to own 100 percent stakes in single-brand retailers, up from the 51 percent stakes that overseas owners are currently allowed to hold.

The move would not affect the likes of American's Wal-Mart Inc. or France's Carrefour SA, multi-brand retailers that are currently prohibited from opening their own stores by laws designed to protect India's millions of mom-and-pop shops.

Other suggested reforms included raising the foreign investment ceiling in insurance to 49 percent from 26 percent and opening coal mining to private companies.

The report said there was "heightened urgency" to upgrade the country's infrastructure, an investment that could top US$500 billion (330 billion).

Chidambaram echoed the report in calling the curbing of inflation a high priority for the government.

"Given the high level of food, oil and other commodity prices in international markets, the risks to inflation remain," Chidambaram said. "Thus keeping inflation under control in an uncertain global environment will be one of the major challenges in 2008-09."

The survey said the inflation rate, measured by the wholesale price index, would likely be roughly 4.4 percent in the current fiscal year, lower than an average of 5.4 percent recorded in the previous fiscal year.

India has gradually opened its markets to foreign competition and capital since the country switched from a socialist-style economy in the early 1990s, and the country's economic growth has averaged about 9 percent a year over the past four years.


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## Bushroda

*Spend 6 percent of GDP on education - Economic Survey*
February 28, 2008

New Delhi: India needs to double its spending on education to six percent of its gross domestic product (GDP) to make primary education universal, the Economic Survey 2007-08 said Thursday.

"It's imperative to give good quality elementary education to all children in the age group of 6 to 14 years," the survey said.

"Policies and programmes in this direction are also necessary for honouring country's commitment to... 'Education for All' as well as commitment under the National Common Minimum Programme (of the United Progressive Alliance government) for increasing public expenditure to 6 percent of GDP."

Praising government programmes in boosting secondary education, the survey said the number of secondary and higher secondary schools have increased from 7,416 in 1951 to 152,049 in 2005.

"Total enrolment in higher secondary has increased correspondingly from 1.5 million in 1951 to 37.1 million in 2005."

However, the survey said that with the rapid growth of the Indian economy, coupled with the need to improve quality of life and reduced poverty, skill development is essential in schools.

"It's essential that a student at the end of the secondary education acquires a level of knowledge and skills."

There has been significant growth in higher education during 2005-06. According to the University Grants Commission, enrolment in various courses was 11.34 million in 2005-06 as against 10.50 million the previous year.

Of the total, 4.58 million were women students (40.39 percent).

"With the increased demand for higher quality of education, training of teachers has become even more important and out of the box thinking is required to ensure adequate supply of quality teachers."

The survey has also lauded Sarva Shikha Abhiyan (SSA), saying 170,320 school buildings have been constructed under the programme till September 2007.

It added that SSA has done some good work in reducing school dropouts and improving learning conditions. 

The programme aims to enable elementary schoolchildren to enrol in higher schools by 2010. IANS


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## Bushroda

*Indian consumption rising; but savings still higher: Survey* 

New Delhi (PTI): The rising per capita income is proving to be a bonanza both for individuals and the economy as an average Indian is showing an uptrend in savings in spite of increasing consumption expenditure. 

According to the Economic Survey 2007-08, tabled in the Parliament today, the per capita consumption in the current fiscal would be 57.56 per cent of the income, a drop from the average 61 per cent and 64 per cent witnessed during the Tenth and Ninth Five Year Plans. 

With a per capita income of Rs 29,786 and consumption of Rs 17,145, Indians on an average would be left with a surplus of Rs 12,641 -- an amount nearly double of what they retained during the Ninth Plan period. 

During the Ninth Plan (1997-2002), the gap between the per capita income and consumption stood at Rs 6,853, just half of the projections for the current fiscal. 

While, during the Tenth Plan (2002-2007) period, the per capita income stood at Rs 24,156 and the consumption was Rs 14,677, leaving a surplus of Rs 9,479. 

As per the Survey, the average growth of consumption is slower than that of income, primarily because of rising saving rates, though rising tax collection rates can also widen the gap. 

The consumption growth rate on per capita basis has increased to 5.1 per cent per year during five years from 2003-04 to 2007-08, with the current year's growth expected to be 5.3 per cent, marginally higher than the five year average. 

Year-to-year changes also suggest that rise in consumption is a more gradual and steady process, as any sharp changes in income tend to get adjusted in the saving rate. 

Gross domestic savings as a proportion of GDP rose to 34.8 per cent in FY'07 from 26.4 per cent in FY'03, with an average of 31.4 per cent during Tenth Plan.


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## Bushroda

*India at risk of missing economic goals*
By Jo Johnson in New Delhi 
Financial Times, UK
February 28 2008

Palaniappan Chidambaram, Indias finance minister, on Thursday admitted that the Indian economy was coming off the boil in a pre-Budget Day speech that highlighted the downside risks to growth from a possible recession in the global economy. 

The finance minister predicted growth of 8.7 per cent in the financial year ending on March 31, down from 9.6 per cent the previous year, and warned of a possible resurgence of inflation.

Keeping inflation under control will be one of the major challenges in 2008/9, Mr Chidambaram said, after releasing the governments annual Economic Survey, a report card that sets the backdrop to Fridays budget. 

The slowdown means that India is falling behind in its goal of sustaining an average growth rate of 9 per cent in the Eleventh Plan, which covers the five years from 2007-08 to 2011-12. The plan predicts Chinese-style double-digit growth in its final year. 

Mr Chidambaram said he remained confident of meeting the 9 per cent target, but warned that India needed to invest more in its infrastructure if it were to grow without triggering a return of the high rates of inflation seen in late 2006-7. 

Fridays budget is expected to be populist in tone. It is likely to be the last full budget before the Congress Party-led coalition government  the United Progressive Alliance  faces voters in a general election due to be held by early next year. 

The Congress Party is showing signs of electoral nerves. Its poor performance in all five state assembly elections held last year has increased pressure on Mr Chidambaram to deliver an electioneering peoples budget. 

Some Congress leaders see the budget as a last chance to buy votes with handouts aimed at softening the sting of widening inequalities between rich and poor, urban and rural areas and upper and lower castes. 

Combined with a looming public sector pay review, this could set back the limited progress India has made in reducing its fiscal deficit and public debt over the last five years, during which growth has averaged a record 8.7 per cent. 

The public finances would be vulnerable to the cyclical slowdown now underway in the economy, as well as the outcome of the Sixth Pay Commission, noted Robert Prior-Wandesforde, an HSBC economist. 

As such, there doesnt appear to be a strong economic case for an aggressive easing of the fiscal stance in the budget, he said. Nevertheless, with the general election fast approaching, it would probably be naïve to expect an entirely neutral fiscal package.

Economists expect Mr Chidambaram to announce an upward revision in income tax exemption thresholds that remove many people on low incomes from the tax net altogether, as well as further tax rebates for exporters hit by the rise in the rupee. 

Including off-balance sheet expenditures on oil, food, and fertilizer subsidies, Morgan Stanley estimates the underlying central government fiscal deficit in 2007-8 will be 5.4 per cent of GDP, rather than the governments headline estimate of 3.2 per cent. 

Weak coalition governments have contributed to a decline in the quality of government spending. Expenditure on development is declining as a percentage of total spending in line with the share of seats in parliament held by the largest political party, according to Morgan Stanleys Chetan Ahya.


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## Bushroda

*Getting India's Railroads On Track*
By SIMON ROBINSON/ON THE MANGALA LAKSHADWEEP EXPRESS
TIME
Thursday, Feb. 28, 2008 

There's a moment late in the afternoon on many long Indian train journeys when the world seems to slow down and rest for a while. As the fading light filters through half-closed shutters and the swaying of the carriages nudges passengers into an irresistible slumber, air-conditioner mechanic T.J. Mathai takes a break from checking that his machinery is working properly and that the vents are open just so. During a recent three-day trip from New Delhi, in India's north, to Kerala, at its southern tip, he hoisted himself up into his tiny nook opposite the toilets in the second-class carriage to rest and read a few pages of Tales from Shakespeare in his native Malayalam. "Wonderful stories," he told me, his body rocking with the movement of the train. A passenger appeared, nodded hello and leaned against the metal frame of the open carriage door so as to watch the countryside lazily scrolling by while he smoked a cigarette. "I enjoy the quiet, slow moments," Mathai said, as we snaked our way up a scrubby pass. "Sleeping people are quiet people." 

Until the past few years, Indian Railways (IR) itself was sunk in a languorous snore. The state-owned company, the monopoly owner-operator of the country's rail system, runs 12,000 trains a day over 39,000 miles (62,750 km) of routes, making it the world's largest railroad under a single administration. It was also notorious for being slow, inefficient and requiring constant government bailouts. But over the past six years, India's most important form of transport  "the lifeline of the nation" as it is often called  has undergone a remarkable turnaround. In its fiscal year ending March 2007, Indian Railways made more than $5 billion. Services are improving and rail bosses have announced plans to spend billions on new rolling stock, faster lines and new stations. Though it still gets government funding, IR is now India's second most profitable state-owned company. "Earlier we were dragging the economy down," says Sudhir Kumar, whose official title is officer on special duty to the Railway Minister, and who has helped oversee the revitalization. "Now we are leading the economy from the front." 

The resurrection of India's railroads was a three-step process that has been so successful it is studied by visiting business students from places such as Harvard, Wharton and INSEAD. The first step: speed things up  not the trains themselves but the turnaround time between the end and beginning of each new trip. In 2001 the average time to unload, repair, refuel and reload a freight train in India was 7.1 days. Now it is just five days, which means that 800 trains leave on a new journey each day, rather than just 550. Given that an additional trip can earn up to $15 million, the improvement made an important contribution to IR's bottom line. IR also made sure each freight locomotive carries more cars, hence more cargo. That brings in an extra $1.5 billion a year, according to Kumar, who compares the railroads under old management practices to "a Jersey cow that we forgot to milk fully." 

Finally, passenger trains have also been increased in length. Until a few years ago a typical train had about 15 carriages. IR officials discovered that a passenger-train journey could earn a profit with 24 carriages, which became the target length. By pushing the "quicker, heavier, longer" mantra, rail bosses have also been able to improve services. For example, in 2006 IR began offering special express trains on certain routes such as the run between New Delhi and Agra, home of the Taj Mahal. Tourists making day trips to India's most popular tourist attraction now can book online and sit in comfortable seats during a trip that takes less than two hours instead of almost three. Even on longer, slower trips the catering, which is now outsourced, has improved. 

The man many people credit with rail's comeback is Minister Lalu Prasad Yadav. Known only as Lalu to his energetic supporters in the poor northern state of Bihar, Yadav is a controversial figure. He is adored by millions as a man of the people because he is of a lower caste  a rarity among politicians. Yet he is routinely vilified by his many detractors who claim his term as Chief Minister of Bihar was characterized by mismanagement and corruption. When he became Rail Minister in 2004, Yadav asked Kumar and his team to run the system on sounder business principles, even as it stuck to what Kumar calls IR's "social obligations" to its passengers, its 1.4 million employees and 1.1 million pensioners. Yadav's standing has soared as a result. "A person who was considered a clown of Indian politics is now being seen as a professor of Harvard graduates," says Kumar. 

Yadav is certainly lucky that he's heading Indian Railways during a period of tremendous growth in India. The company is minting money hauling freight for mines thanks to the massive demand for iron ore in China, to cite just one example. But you also have to be clever enough to cash in. Contracts with mining firms are now linked to the price of ore rather than "set in concrete like in the old socialist fashion," says Kumar. "You have to make the best use of the opportunities the global market throws up. Before, we were operating like some Mother Teresa charity home." 

No more charity. IR wants to compete. Hoping to grab more of the long-haul freight business lost to truckers in recent years, rail bosses plan to borrow at least $15 billion to build a dedicated fast-freight corridor between Mumbai, New Delhi and Kolkata (formerly Calcutta). They also have big plans for some of the 1 million acres (420,000 hectares) of land that IR owns along rail lines and around stations and shunt yards. Real estate developers are currently bidding to overhaul the first of 16 major stations. At New Delhi's central station, which is likely worth billions of dollars, developers plan hotels, wireless Internet services and food courts. 

Still, IR has miles to go before it can be called a first-class operation. Train travel in India remains infuriatingly slow. A 1,378-mile (2,217 km) trip from New Delhi to Goa just before Christmas, for instance, took me 35 hours, almost a day longer than a train trip over a similar distance in Europe would take. Because of a lack of equipment and tiny station platforms, freight is sometimes thrown from trains in heaps. The heavier loading, critics charge, has caused more breakdowns. (Kumar denies this.) Older carriages can be dirty, shabby and full of cockroaches  and that's in upper class. "If our carriage, which is the best on the train, is not up to the world standard, what is the scenario of the poor man?" asks A. Ravindran, an officer in the Indian Air Force and one of the 18 million Indians riding a train on the day I met him in the air-conditioned carriage we shared. "There is still scope for improvement." Some policymakers would like to privatize the train system  though given India's political sensitivities that could take years. Yadav and Kumar argue that you don't need to sell India's railways, that things are improving even under government control. "Railways were in a denial mode, living on past glories from when we were a natural monopoly," Kumar says. "Now we have to compete  and we are."


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## Neo

*India proposes to waive $15bn of farm loans ​* 
Saturday, March 01, 2008

NEW DELHI: India proposes to waive 600 billion rupees ($15 billion) of bank loans to farmers, the finance minister said on Friday in his annual budget for the fiscal year that begins in April.

Palaniappan Chidambaram said the write-off would be completed by June 30, with 500 billion rupees going towards farmers holding up to two hectares of land. For bigger farmers, the budget proposed a waiver of 100 billion rupees as one-time settlement, provided the farmers repaid 75 per cent of their loan that was overdue on Dec 31, 2007.

All agricultural loans disbursed by scheduled commercial banks... up to March 31, 2007 and overdue as on Dec 31, 2007, will be covered in the scheme, he said. Shares in Indian banks initially fell sharply on the announcement, but later trimmed losses as there was uncertainty about how much the government would compensate the banks. 

India proposes to waive $15bn of farm loans


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## Neo

*India says keeping growth at 9 percent a challenge​*
NEW DELHI: Keeping Indias economic growth at about 9 percent a year will be a challenge due to inflation and infrastructure constraints, and lifting it higher will be even harder, a finance ministry report said on Thursday. 

But inflation was likely to remain moderate in coming months and capital inflows, which have pushed the rupee up and complicated monetary policy, should ease in 2008, the economic survey for fiscal year 2007-08 said. 

Released a day before the annual budget, it said more reforms were needed to raise economic expansion above 8 to 9 percent but also warned that a shortage of skilled workers was pushing up wages and could erode Indias price advantage. 

The new challenge is to maintain growth at these levels, not to speak of raising it further to double-digit levels, the report, prepared by the finance ministry, said. 

The yield on the benchmark 10-year bond eased 1 basis point to 7.58 percent after the survey and the partially convertible rupee slipped to 39.815/825 per dollar from 39.795/805 beforehand. 

Indian policymakers have repeatedly talked of stepping up growth to 10 percent a year to reduce mass poverty and Finance Minister Palaniappan Chidambaram said after the report was released he was confident of achieving an average 9 percent up to 2012 while still keeping a grip on inflation. 

I am optimistic about growth and containment of inflation in the coming year, he told reporters. 

It will be my priority to provide a conducive investment climate and manage the macro economy to facilitate non-inflationary growth. 

Chidambaram presents his fifth and final budget of this administration on Friday and is widely expected to offer some tax giveaways while spending more on farms, health, education and infrastructure to spread the benefits of high growth. 

Price pressures: The economic survey contains policy prescriptions which may not necessarily translate into actual policy or form part of the budget but it does provide clues to medium-term direction. 

Analysts said the surveys acknowledgement that 9 percent and above was going to be tough without reforms highlighted the budget challenge facing Chidambaram of balancing growth with price pressures ahead of national elections due in 2009. 

This underscores the point that under the current environment any growth faster than 9 percent could turn out to be inflationary, said A. Prasanna, economist at ICICI Securities. 

Growth is estimated at 8.7 percent this fiscal year to March 31, after an 18-year high of 9.6 percent in 2006/07. 

Annual inflation, based on wholesale prices, hit a six-month high of 4.35 percent in early February but consumer price inflation is closer to 6 percent. 

The survey said inflation would be about 4.4 percent this fiscal year but the behaviour of farm prices would be a key determinant in the coming year. Commodity price inflation should be tackled with trade and fiscal policies. 

A surge in capital inflows, including foreign direct investment, would continue in the medium term, although in the short run inflows might moderate due to slightly slower growth, easing pressure on the exchange rate, it said. 

Any reduction in excess capital flows from the high levels of 2007 may affect the equity markets in the short term but will make the task of monetary management easier. 

Eroding advantage: India serves as a back office for global banking and financial services firms, which have taken advantage of a low-cost English-speaking labour force. 

But a lack of quality education means white-collar workers are in increasingly short supply in areas such as software and finance, creating wage inflation of 10-15 percent and high attrition rates. 

Wage costs are rising which not only contributes to cost-push inflation, but may also end up eroding price advantage in some of the tradable sectors of the economy, the survey warned. 

India is gradually opening up its current account, although the high capital inflows last year prompted it to clamp down on some sources of external funding. 

The survey said opening the current account must continue despite short-term reversals, as that would increase competition and improve the deployment of funds for asset creation. 

Other necessary reforms included greater foreign participation in insurance and retail as well as deregulation of the sugar, fertiliser and drug industries. reuters

Daily Times - Leading News Resource of Pakistan


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## Bushroda

*Waterfront reflections on India* 
By Nils Blythe 
Business correspondent, BBC News, Mumbai 

A short journey along Mumbai's waterfront can tell you a lot about modern India. 

In the harbour opposite the famous Taj Palace Hotel, a boat show is getting under way. 

Lined up along the floating walkways are vessels ranging from relatively modest speed boats to luxury motor yachts costing over $2m (£1m). 

Moored further offshore is a so-called 300-ft "super-yacht" belonging to one of India's billionaires. 

This is a country which has about 50 families reckoned to be worth more than $1bn. 

According to Malav Schroff, founder of the Mumbai boat show, owning a big boat is the "new craze" for the super-rich in India. 

And many of the world's leading boatmakers agree with him, sending more vessels and larger sales teams to the show than to last year's inaugural event. 

Brands including Princess, Azimut and Larson all have large vessels on show. 

It is not just the billionaires who are being targeted. India also has a rapidly rising number of multi-millionaires who have made fortunes in an economy which has been growing at more than 8% per year. 

Vishal Chaudry, director of sales in India for the British-based Princess Yachts, candidly admits that some boat buyers in India are not keen sailors. 

Many yachts are primarily used for entertaining or commuting from cities such as Mumbai to nearby beach houses. 

He says that a motor yacht is becoming an increasingly important status symbol for rich Indians. 

But if you take a 10-minute journey from the Taj hotel and the boat show, you can see a very different kind of waterfront. 

This is Colaba, named after the Koli fisherfolk who originally inhabited the area. And there are fishermen here still. 

The fishing boats are drawn up along a rubbish-strewn beach. 

Behind the beach is a collection of small houses and shacks where the fishing families live. 

And here, the preoccupations are very different to those of the boat show customers. 

The fishermen gather round to complain that diesel is becoming so expensive that it is becoming very difficult to run their boats. 

And among the tiny shops, the women are angry about the rising costs of basic foods. 

Inflation in food prices is running at an annual rate of about 10%. 

And as one woman explained, "When prices go up, we have to eat less." 

It is a stark reminder that for all its booming economy, India has more than 800 million people living on less than $2 a day. 

And for those on low incomes, even small prices in the cost of food make a huge difference. 

With wholesale prices on world commodity markets setting new records, the cost of living - or surviving - for India's poor is likely to rise further. 

*'Ghettoes of luxury' *

This is leading to increased social tensions, according to Naresh Fernandes, the editor of Mumbai's Time Out magazine, which investigates the big issues facing the city as well as providing a guide to events. 

He argues that Mumbai has developed "ghettoes of luxury" in which the wealthy spend their time. 

And that rather than being discreet about their wealth, India's super-rich are ever more eager to show it off. 

That is why the world's luxury boatmakers have turned up in force for the Mumbai boat show. 

But they admit there is one - typically Indian - problem. And that is infrastructure. 

Luxury yachts need big purpose-built marinas. 

No millionaire wants to moor his boat next to the rubbish-strewn fishermen's beach of Colaba, for example. 

The boat makers say that there are ambitious plans to build marinas around India's coastline. 

And these will be seen by some as a way of helping the wealth of the super-rich to trickle out into India's economy. 

Others will see them as yet more "ghettoes of luxury".


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## Bushroda

*India spends more on poor in budget 2008-09*
Daily Times, Pakistan

** $15.05bn debt relief for farmers, economic growth slows, cuts excise duty on autos, inflation at 4.89 percent*

NEW DELHI: Indias Congress-led government announced Friday huge debt relief for farmers as it reached out to its traditional rural support base in possibly its last budget before the next polls.

Finance Minister Palaniappan Chidambaram offered a debt relief package for farmers of 600 billion rupees ($15.05 billion) in the budget for the year starting April 1, even as Indias economic growth began to slow.

He told parliament 30 million indebted farmers would have their loans fully waived by the end of June and another 10 million would receive aid.

Through the loan waiver scheme, the country is discharging a deep debt and sense of gratitude to farmers, he said.

The government intends to make growth more inclusive, the minister said. We are raising our sights and doing more.

The farm sector is crucial as it provides a living for two-thirds of Indias 1.1 billion populations. T.N. Ninan, publisher of leading financial daily Business Standard told Indias NDTV news that the debt relief programme was the single biggest giveaway in Indias fiscal and banking history.

But he questioned how it would be applied, noting many farmers debts were to moneylenders. Farm growth is forecast to slow to 2.6 percent this fiscal year from 3.8 percent the previous year.

Analysts attributed the markets unhappiness to a knee-jerk investor response to an increase in the short-term capital gains tax to 15 percent from 10 percent. Chidambaram said he was confident the economy would grow nearly nine percent in the current fiscal year to March 2008, down from 9.6 percent the previous year due to aggressive monetary tightening to curb inflation. But the Indian economy would still be the second fastest-growing in the world after Chinas.

Data released Friday showed economic growth slowed to 8.4 percent for the third quarter ended December 31, 2007, compared with 9.1 percent in the same period the previous year as a slew of interest rates hikes hit consumer and infrastructure spending and industrial production.

Indias economy under the communist-backed United Progressive Alliance coalition government, which took office in 2004, had grown by over eight percent during 12 successive quarters since 2005.

We need an ambitious scheme... to revive agriculture, he said.

Economic growth slows to 8.4 percent in Q3: Indias economy grew by 8.4 percent in the third quarter, its slowest pace in two years, on lower farm and industrial output from the same period a year ago. The data showed that the economy expanded almost in line with a forecast of 8.7 percent for the year ending March. But the pace is well off the 9.6 percent growth reported in the previous year.

The slowdown for the quarter ended December has been attributed to aggressive monetary tightening to tame prices and a 12 percent gain for the rupee against the dollar in the past year. The rupees rise has dented export earnings for Asias third biggest economy. Farm growth rose 3.2 percent in the third quarter, down from 3.4 percent a year earlier, while manufacturing gained 9.3 percent from 11.3 percent.

JP Morgan estimates the economy will slow down further in the next financial year and expand at 7.5 percent.

Indias central bank has increased interest rates nine times since October 2004 to check inflation, which jumped to 4.89 percent for the week ended February 16  the highest since June 2007.

Growth stability with reasonable price stability is the main objective of our government, Prime Minister Manmohan Singh said after the annual budget was presented Friday. Finance Minister Palaniappan Chidambaram said that he was confident the economy will grow nearly nine percent in the current financial year.

Automakers cheer tax cut plans: Shares in Indian vehicle makers rose on Friday after the government proposed to cut excise duties in the fiscal year 2008-09, which analysts say will encourage demand, particularly for small cars. 

The finance minister proposed to cut excise duties on buses and chassis, as well as small cars, to 12 percent from 16 percent in his annual budget. He also cut duty on hybrid cars to 14 percent from 24 percent and on two- and three-wheelers to 16 percent from 24 percent. 

Indian inflation rises to highest level since June 2007: Indias annual inflation rate spiked to its highest level since June 2007 on higher food and fuel prices, data showed on Friday.

Inflation climbed to 4.89 percent for the week ended February 16 from 4.35 percent the previous week, according to the wholesale price index, Indias most watched cost-of-living monitor.

Wholesale prices stood at a then two-year peak of 6.73 percent in the same period a year ago.

Inflation in Asias third largest economy has fluctuated in recent months but has been inching closer to the central banks ceiling of five percent for the fiscal year to March 31, 2008. agencies


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## Bushroda

*Hot Indian economy cools slightly* 
CBCNews, Canada
Friday, February 29, 2008 | 10:44 AM ET 

India's economic growth slowed slightly in the October-December quarter, expanding at a still strong 8.4 per cent from the same period a year earlier, driven by manufacturing and construction.

That was down from the 8.9 per cent growth in the fiscal second quarter and 9.1 per cent in the same quarter last year, the data issued by the government-run Central Statistical Organization showed.

The data comes as Finance Minister P. Chidambaram presents the annual budget Friday.

Manufacturing grew 9.3 per cent and construction gained 8.4 per cent in the fiscal third quarter, but agriculture continued to lag behind, growing only 3.2 per cent, figures showed.

On Thursday, the government's annual Economic Survey said that the economy is expected to grow by 8.7 per cent this fiscal year, slowing from 9.6 per cent growth rate it achieved in the 2006-2007 fiscal year, its fastest expansion in nearly two decades.

The survey said it was forecasting a slowdown because of tighter monetary policy and a weakening global economy.


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## Bushroda

*FM kept his word: Personal tax collections grown to 40%*
1 Mar, 2008, 0124 hrs IST,Shaji Vikraman, TNN

Or the past year or two, finance minister had provided enough hints that he would prune tax rates if compliance by taxpayers improved. Undoubtedly, personal tax collections have grown at close to 40% over the last fiscal  possibly the highest ever  reflecting greater compliance, especially among the self-employed. The finance minister kept his word. But it was the extent of the cuts that took most people by surprise. 

The FM doled out several lollies: from increasing exemption limits to a higher deduction for medical insurance premium, and a tax exemption for those senior citizens availing of loans under the reverse mortgage scheme. All these will ensure that people will have more money to save and of course spend over the next one year. This clearly augurs well for the economy, which is showing signs of slowing down a bit this fiscal. 

Also, the FM has pushed perhaps the biggest restructuring of tax slabs, benefiting all three categories of taxpayers  individuals, women and senior citizens. For male taxpayers, the tax threshold begins only after Rs 1.5 lakh, while for women it is Rs 1.80 lakh and for senior citizens, it is Rs 2.25 lakh. 

The lowest rate of 10% will now stretch all the way up to Rs 3 lakh, after which 20% tax will apply. Earlier, the 20% tax rate was levied on those in the income bracket of Rs 1.5 lakh to Rs 2.5 lakh. That rate will now apply to those in the Rs 3 lakh to Rs 5 lakh bracket. 

Tax at the highest bracket (30%) will kick in only for incomes above Rs 5 lakh  twice the earlier limit of Rs 2.5 lakh. What remains unchanged, however, is the surcharge of 10% levied on those with incomes in excess of Rs 10 lakh. The widening of the slab means that while earlier having an income of say Rs 2.9 lakh put an individual in the 30% tax bracket, that level of income will now attract a rate of just 10% this year. 

The tax slab restructuring may have been done with an eye on the upcoming polls. But Chidambaram has always maintained that it pays to keep tax rates moderate. Dinesh Kanabar, head of PricewaterhouseCooperss tax practice, says reasonable tax rates will help boost consumer spending. The clarity offered by the minister on reverse mortgage will help popularise a product that was launched last year but failed to take off owing to uncertainty on the tax front. 

Over the past few years, the government has increased its reliance on digital tracking measures, including the annual income returns (AIR). The applicability of permanent account number (PAN) will be now be extended to several additional areas in the financial segment. While the FM did not spell out the new additions, experts say that he may bring the purchase of insurance products under the preview of PAN. 

For long, Indian taxpayers have sought a responsive and friendly tax administration. An improved tax regime may be a while in the making. But theres more to reflect on. In 2006-07, the number of taxpayers with an income of over Rs 10 lakh in the salaried category was estimated at just 1.35 lakh. The widening of the tax slab makes one wonder whether the government wants to address this issue. 

Such a large largesse to taxpayers will surely result in the government foregoing substantial revenues. Yet the FM insists that the exercise would be revenue-neutral. Much of it will depend on whether the tax breaks result in higher spending and investments, resulting in higher revenues for the government through indirect taxes.


----------



## Bushroda

*India Budget Seeks To Expand Social Mobility*
Ruth David, 02.29.08, 12:57 PM ET

MUMBAI - With an eye on upcoming elections India's Finance Minister Palaniappan Chidambaram Friday waived farm debts and cut personal taxes, in an attempt to boost consumption amid slowing economic growth.

In his fifth annual budget presentation, the minister increased exemption limits for personal taxes to 150,000 rupees ($3,755.16), from 110,000 ($2,753.79) rupees, in a nation where only a third of the population pays taxes. He left corporate tax rates and surcharges unchanged.

Chidambaram increased the reach of the service tax, by including services companies like stock and commodity exchanges, asset management firms, clearinghouses and customized software makers.

He also increased budget outlays for the health sector by 15% and for the education sector by 20% and proposed setting up 16 new universities. Defense spending got a 10% increase. 

He also cut excise duties on pharmaceutical goods--exempting AIDS drugs entirely--and small and hybrid cars and abolished duties on wireless data cards. Jewelry exports, which suffered last year as the rupee appreciated against the dollar, also got duty relief on select gems.

In the pharmaceuticals sector, Chidambaram gave tax concessions for outsourced research and development. "The budget is very positive in terms of expanding the scope of outsourced R&D, while excise reduction will benefit customers," said Ranbaxy (other-otc: RBXZF - news - people ) Chief Executive Malvinder Singh. As to whether consumers should expect rate cuts on drugs soon, Chidambaram said, "market forces will determine that," adding that Indian drugs were already among the lowest priced in the world.

Indian automakers were expecting some budget relief after their sales suffered last year because of tightening interest rates. Loans finance a preponderance of the passenger vehicles purchased in India.

"The budget was about populist measures, but the finance minister has shown some commitment to financial reforms" said D. K. Joshi, chief economist at Crisil, the Indian arm of ratings agency Standard and Poor's. "He's given a fillip to growth by reducing excise duties on key sectors like autos, and has put more money to spend into the hands of consumers."

Chidambaram forecast that the revenue deficit will be 1% of the GDP for the fiscal year 2009, while the fiscal deficit is expected at 2.5%, down from an estimated 3.3% in this year.

Economic growth for the quarter ended Dec. 31 stood at 8.4%, compared to 8.9% in the previous quarter, the government said Friday. Last fiscal year, GDP growth was 9.6%.

Agriculture has "struck a disappointing note," Chidambaram said in Parliament. Growth rates in the primary sector are expected to be about 2.8% for the year ending March 31. Agriculture accounts for the livelihoods of about two-thirds of India's population, and consequentially has a powerful voting base.

Farmers don't pay taxes in India. And on Friday, Chidambaram attempted to ensure that those in need also don't have to repay loans. He announced a debt relief package that is expected to cost the exchequer 600 billion rupees ($15 billion), putting additional pressure on government finances.

In defense of the spending, the Harvard-educated Chidambaram pointed out that growth in India was still not all-inclusive, and this would be one way to correct the imbalance. "If we can find a way of writing off these loans and providing money to the banks, the banking system strengthens. The banks will have more money to lend and that will stimulate the economy," he told journalists in New Delhi.

Last year, Prime Minister Manmohan Singh estimated the government's food, fertilizer and oil subsidies were likely to exceed $25 billion. But, as the ruling coalition faces elections in five states this year and general elections that must be held before May 2009, it wants to ensure the voters are happy.

The markets, however, were none too happy with the budget, after Chidambaram hiked taxes on short-term capital gains, to 15%, from 10%. The benchmark Sensex on the Bombay Stock Exchange ended the day down 1.4%, to 17,578.72. The National Stock Exchange's Nifty closed 1.2% to the down side, at 5,223.50.

"The measures are likely to have a short-term impact on the markets, but there's no immediate cause for concern," said Samiran Chakraborty, chief economist at ICICI Bank. "Though the government is indicating there could be further measures to tackle capital flows if they don't moderate on their own." Last year, a surge of capital inflows increased inflationary pressures, prompting the central bank to tighten interest rates. Inflation for the week ended Feb. 16 stood at a high of 4.89%, an eight-month high.

For the commodity markets, Chidambaram added a 12% service tax charge, prompting complaints from the managing director of the Multi-Commodity Exchange, Jignesh Shah. The software services industry wasnt particularly pleased, either, with the finance ministers refusal to extend a tax holiday. But Infosys (nasdaq: INFY - news - people ) Chief Financial Officer V. Balakrishnan qualified his criticism, noting that personal tax breaks would take the pressure off technology companies on wage hikes. And the governments increases on education should help resolve a glaring talent shortage in India.


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## Bushroda

*India going from strength to strength*
Cherry Reynard
Independent, UK 
01/03/2008

*Country's domestic strength offers rewards for investors. Cherry Reynard reports*

With all eyes on the elections in its volatile neighbour Pakistan, it is easy to overlook the quieter investment success story of India.

Last year, burgeoning consumer spending and much-needed infrastructure growth helped the Morgan Stanley Countries' Index (MSCI) India deliver a 71pc return, the highest of any major Asian market.

This year, the economic news has remained buoyant, supporting claims that India's domestic strength insulates it against world economic turmoil. 

But investors' waning appetite for risk has sliced 14pc off the Indian stock market since January 1. 

Does the Indian growth story still hold strong? And if so, does recent weakness represent a buying opportunity for investors?

Perhaps the most important factor India has on its side is demographics. 

According to Avinash Vazirani, manager of the Jupiter India fund, India has the ideal demographic, with lots of young people supporting relatively few older ones. 

He said that India is home to around quarter of the world's under-25s, with 60pc of India's population aged under 30.

Much of the booming service sector has been built on this young, well-educated, English-speaking population. 

The service sector now accounts for around 50pc of gross domestic product (GDP) and, despite the irritation of some British consumers, the trend for outsourcing to India shows no signs of slowing.

Mr Vazirani said: "A recent McKinsey report suggests that the middle class of around 13m will rise to 140m by 2025. This is a consuming population, who are buying domestic goods and services and creating more jobs. It's a virtuous circle."

Some consumer goods sectors have seen spectacular levels of growth. The most obvious is in mobile telephony, where subscribers are growing at a rate of around 7.5m per month. In general, it is domestic companies supplying these services. 

Sam Mahtani, director of emerging market equity at F&C, said that at the higher end, strong growth is being seen in branded goods, consumer electronics and cars, while at the lower end, it is simpler things like toothpaste.

Despite these positive trends, penetration of consumer goods is still small, leaving room for expansion. 

Vijay Tohani, manager of the First State India Sub-Continent fund, said: "There are only around 16 credit cards, eight cars and four internet connections per 1,000 of population."

The other big driver has been infrastructure growth. Mr Tohani said: "Historically, infrastructure has always been the Achilles' heel of India, now it is being seen as an investment opportunity. The government has earmarked between $400bn and $450bn to spend on infrastructure."

The strength of this internal demand also means that the economy is not as reliant on exports - and therefore the world economic climate - as some other major emerging markets. 

Mr Tohani said: "Only a small percentage of GDP - about 13pc - is export-driven. This means that India will keep growing even if the world economy falters."

All these factors have helped generate India's robust GDP growth of around 9pc per year, marginally below China, but above that of Russia and Brazil. If that could be maintained, India would be on course to become the world's second largest economy after China within 30 years. 

While that may seem improbable, Arun Mehra, manager of Fidelity's India Focus fund, said he is confident that the Indian economy can continue to grow at between 7pc and 8pc a year for at least the next five years.

The stock market has also broadened out. Mr Mehra said that 15 years ago there were only 40 companies, which were large and liquid enough for investment. 

Now the relevant universe is 900 stocks, with plenty of new sectors such as media, infrastructure and property. This has been expanded by government privatisations and other flotations. Not all of these have gone to plan, however, and shares in Reliance Power dropped sharply after its $3bn flotation early last month.

But it is difficult to ignore the fact that the Indian market now trades at a substantial premium to other emerging markets.

Vinay Gairola, portfolio adviser for the Atlantis India Opportunities fund, said that much of the growth has been confined to six or seven stocks: "If you have a helicopter view, the market can look expensive, but the Indian market is not just six stocks and there is plenty of value if you look on an opportunistic basis. 

"Investors need to take a five-year perspective."

Mr Mehra agrees that there remains a spread of opportunities in the India market and points to the IT sector as one that has suffered in the setbacks and now looks attractive.

Pinakin Patel, client portfolio manager at JP Morgan, said: "Emerging markets have provided a safe haven, despite their 'risky' perception. The levels of risk within Asian companies are not as high as some of those in developed markets."

Philippa Gee, investment director at independent financial adviser (IFA) Torquil Clark, is more cautious. 

She said: "For a lot of people it isn't right to hold something as specific as an India fund, as it can be hard to monitor and the decision about when to sell is a challenge. 

"There are some excellent global funds available which provide an allocation to India, but also other regions around the world and are actively monitored and managed to change the percentages held to suit market conditions."

Nick Sketch, senior investment director at wealth managers Rensburg Sheppards, said: "Lots of money has gone in and experienced managers in Asia are now moving money to other areas like Korea and Singapore. 

"We are positive on India as a long-term story, but less positive than we were when it was half the price." He likes the Fidelity India Focus fund.

The growth story in India is sound. Well-run companies continue to deliver good earnings, fuelled by massive infrastructure development and a growing consumer economy. These factors are unlikely to reverse.

India is also lightly exposed to the fortunes of the global economy and could therefore outperform if the US turns down. However, valuations are relatively high even after the recent falls in price and other emerging markets may offer better short-term value. 

Investors can either leave the decision on which countries look the best value to an expert via a global emerging market fund, or if they are tempted to dip their toe in India directly, select a good active manager and invest for the long term.

*Case study: 'I wanted some diversity in my portfolio'*

Mohammed Sakendar has been investing in the Fidelity India Focus fund since its launch in 2004, so has already seen some good returns from the region.

He invests monthly to ensure he can ride out the ups and downs of the market. He has been to India a couple of times and seen how the country is changing at first hand. 

Mr Sakendar, of Wolverhampton, West Midlands, said: "I have some investments in the UK with both Fidelity and Aberdeen and wanted some diversity in my portfolio. I now have around £29,000 in Asia.

"It's a growing region and I have done well out of my holding in China as well. I also hold the Fidelity Global Special Situations fund. These are all long-term holdings for me." 

Mr Sakendar's wife, Rajinder, also invests because the couple hope to retire at 55 and they don't believe they will get much from the Government. 

Their daughter, Jasmine, is now 12, so they may also have university fees to pay in a few years' time.

He is hoping that exposure to the higher growth economies of Asia will help him achieve his long-term goals.


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## Bushroda

*India Cuts Taxes on Automobiles; Maruti, Bajaj Gain* 
By Cherian Thomas
Bloomberg

Feb. 29 (Bloomberg) -- India's government cut taxes on small cars and motorcycles to accelerate demand in the world's second- fastest growing major economy. Maruti Suzuki India Ltd., the nation's biggest carmaker, led gains among auto shares. 

The excise tax on small cars, buses, motorcycles and scooters was lowered to 12 percent from 16 percent, Finance Minister Palaniappan Chidambaram said in New Delhi today while unveiling his budget proposals for the fiscal year starting April 1. The new taxes take effect immediately. 

Cutting tax on automobiles may help Maruti, Hyundai Motor Co. and other automakers to lower prices and boost sales in the nation of 1.1 billion people. India's car sales have doubled in the past three years and may triple to 3 million units by 2015, the government had earlier forecast. 

"These measures will support growth," said Amit Kasat, a Mumbai-based analyst at Motilal Oswal Securities Ltd. Kasat rates the shares of Maruti a "buy." 

Maruti Suzuki, maker of half the cars sold in the country, cut prices for all six models that qualify for the lower excise benefit. Reductions range from 6,500 rupees for the Maruti 800 model to 18,030 rupees for the diesel-powered Swift hatchbacks, the company said in an e-mailed statement. 

The stock advanced 3.9 percent, the biggest gainer on the Sensitive Index. The benchmark fell 1.4 percent. 

New Delhi-based Hero Honda Motors Ltd., the nation's biggest motorcycle maker, gained 2.3 percent. Second-ranked Bajaj Auto Ltd., also the largest maker of three-wheeled auto rickshaws, rose 2.7 percent. 

*Reducing Prices* 

Hyundai pared prices for Santro, Getz and i10 minicars and by as much as 19,419 rupees. The company said its range of cars now start at 261,631 rupees. 

Hero Honda, 26 percent owned by Japan's Honda Motor Co., the world's largest motorcycle producer, will consider cutting prices and "pass on some benefits," Managing Director Pawan Munjal said in a phone interview. 

"The market had been wanting this to arrest the slide in demand in recent months," Munjal said. "The tax proposals unveiled in the budget will put more money into the hands of people and that will definitely kick-start demand again." 

India's motorcycle and scooter sales declined 8 percent between April and January to 6.1 million units, according to the Society of Indian Automobile Manufacturers. India is the world's second-largest market for two-wheeled vehicles. 

*Global Hub *

This is the second time Chidambaram is reducing taxes in three years. In 2006, the government cut the tax to 16 percent from 24 percent on cars that were shorter than 4 meters to make India a global hub for small-car production. 

"The budget didn't fully meet expectations," Karl Slym, managing director of General Motors Corp.'s India unit, said in an e-mailed statement. "The industry expected a reduction in excise duties for all cars, which hasn't happened." 

Tata Motors Ltd., India's biggest truckmaker, said it will cut prices of small cars and commercial vehicles in a few days. 

The excise tax, levied at the time of shipping from the factory, was as high as 32 percent in 2003. 

Passenger vehicle sales climbed 13 percent to 1.26 million units between April and January, slower than the 21 percent pace of growth for the fiscal year ended March 31. 

Chidambaram also cut the tax on hybrid cars to 14 percent from 24 percent and scrapped the tax on electric cars.


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## Bushroda

*India's difficult balancing act*
Aditi Charanji
New Statesman, UK
29 February 2008

*How do you maintain India's impressive growth while ensuring that the country's rural poor get a share of the new wealth?*

When Indian Finance Minister, P. Chidambaram, stood up in Parliament on 29 February to read out India's annual Union budget he did so in the knowledge it could be his last chance to address a fundamental problem.

For this is the Congress-led coalition United Progressive Alliance (UPA) government's last budget ahead of the 2009 general election. It is crucially important for Chidambaram to be able to pull off the tricky balancing act of maintaining high-level growth on the one hand, and attempting to gain electoral support through populist give-aways on the other. 

It's people like Ramesh Prasad whom the minister has to appease. Ramesh is a labourer in New Delhi. He makes between 100  150 rupees (£1.25  1.85) a day and is struggling to cope. His two biggest problems are rising prices of essential goods like food and fuel, and the competition caused by the influx of people like him who have moved from rural areas into the city to seek employment. There's nothing for them in the villages. And when they come here, they can't even afford food, he says sadly. 

For the last three years, India's economy has been growing at over nine percent a year and the urban middle class has been reaping the benefits. At the same time, almost 80 per cent of the billion-plus population survives on 20 rupees (25p) or less a day. 

Most of the economy's growth has come from the booming services sector, while agriculture is barely expanding with growth between two or three per cent.

About two-thirds of India's population depends on agriculture either directly or indirectly, and the government has been repeatedly criticised for not taking enough measures to tackle the what is being called an agrarian crisis. The Economic Survey on February 28 has warned the government that any slowdown in the already fluctuating agricultural sector is not only detrimental for the people that depend on it, but will also hurt the economy's growth. 

This is why the budget is widely seen as the last chance for the Congress Party to redeem itself in the eyes of rural voters after being defeated in a number of provincial elections last year  including Uttar Pradesh, the country's largest and most politically important state. I didn't vote for the Congress, says Pappu, a landless tiller whose income depends completely on agriculture. They have done nothing for me. 

Chidambaram is expected to announce higher budgetary allocations for sensitive areas like agriculture, education and health. And, following a spate of farmer suicides across the country last year thanks to an inability to repay loans, sources say the chances of a loan waiver for small farmers is almost a certainty.

Both Ramesh and Pappu are sceptical. They say that the government announces new plans for them every year, but nothing changes. Prices keep rising, and we can't keep up anymore,  says Ramesh. Every government promises us that life will get better  it never does.


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## Neo

*Indias economic growth slows in Q3​*
NEW DELHI, Feb 29: Indias economy grew by 8.4 per cent in the third quarter, its slowest pace in two years, on lower farm and industrial output from the same period a year ago, official data showed on Friday.

The data showed that the economy expanded almost in line with a forecast of 8.7 per cent for the year ending March. But the pace is well off the 9.6 per cent growth reported in the previous year.The slowdown for the quarter ended December has been attributed to aggressive monetary tightening to tame prices and a 12 per cent gain for the rupee against the dollar in the past year.

The rupees rise has dented export earnings for Asias third biggest economy.

Farm growth rose 3.2 per cent in the third quarter, down from 3.4 per cent a year earlier, while manufacturing gained 9.3 per cent from 11.3 per cent.AFP

Indias economic growth slows in Q3 -DAWN - Business; March 01, 2008


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## dotaplayer

it sucks man!!8.8&#37; for 2007-08 sucks!!

india really needs to pump in agriculture!!

Instead of solving the real probem our politician are simply waiving off 15 billion $

its lke giving a beggar 15000 rs for 1 year!!next year again he wll cme 2 beg!!

they are only putting 2.5 billion $ for irrigation!!if they would have invested 15 billion $ in states like bihar,orissa and bengal who faces floods and famine in a single year ,we could have been able to develop the most backward states of our country!!


Half bihar gets flooded from nepal!!it has the best alluvial land bt coz of lack of lrrigation and water management,state has to face floods..and later GOI will have to give funds 4 flood!! what a bunch of foolst poliricians!!Appeasers!!

Orissa:faces worst famine!!they could have spent sme mney on irrigation..its most backward and that supports naxalixm,!

AP:famine+floods!!coastal areas faces floods and interior have the worst famines!!


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## ashfaque

dotaplayer said:


> it sucks man!!8.8% for 2007-08 sucks!!
> 
> india really needs to pump in agriculture!!
> 
> Instead of solving the real probem our politician are simply waiving off 15 billion $
> 
> its lke giving a beggar 15000 rs for 1 year!!next year again he wll cme 2 beg!!
> 
> they are only putting 2.5 billion $ for irrigation!!if they would have invested 15 billion $ in states like bihar,orissa and bengal who faces floods and famine in a single year ,we could have been able to develop the most backward states of our country!!
> 
> 
> Half bihar gets flooded from nepal!!it has the best alluvial land bt coz of lack of lrrigation and water management,state has to face floods..and later GOI will have to give funds 4 flood!! what a bunch of foolst poliricians!!Appeasers!!
> 
> Orissa:faces worst famine!!they could have spent sme mney on irrigation..its most backward and that supports naxalixm,!
> 
> AP:famine+floods!!coastal areas faces floods and interior have the worst famines!!



Dont get excited man. This is election budget, some populist measures was expected. 
Though before June 08 all forming debt will be waived off, but it does not mean that all money will be given in financial year 08-9. Rather some government bonds will be given to banks for next three years.


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## Bushroda

*Cox & Kings' Bombay delight*
James Hall
Telegraph, UK
Last Updated: 12:09am GMT 02/03/2008

Cox & Kings, the upmarket British travel company that was founded in 1758 as a bank for army officers serving in the Raj, will float next month on the Bombay Stock Exchange.

The company's decision to conduct an IPO in India rather than the UK was made following a massive boom in middle class Indians taking foreign holidays. The move also highlights the attractiveness and growth prospects of the Indian economy to UK companies.

To coincide with the IPO, Cox & Kings has signed a ground-breaking public-private partnership (PPP) with Indian Railways, India's state-owned railway, to build a luxury Orient Express-style train that will take tourists to historic sites across India. The train will travel from Mumbai and Rajasthan in the west of India across to Varanasi and Kolkata - formerly Calcutta - in the east. India currently has only two such luxury trains, but they are confined to travel within single states.

Cox & Kings, which sells long-haul luxury tour packages as well as upmarket weekend trips to Europe, plans to raise $130m in the IPO through the issue of new shares. The flotation will give the company a total value of $500m. The proceeds will be used to write off the company's $11m of debt and make acquisitions, including in the UK and the Far East.

The company will also plan to increase its franchised branches in India from 15 to 300 by the end of 2008. The company's head office will transfer from London to India.

Peter Kerkar, chief executive, said that there had been a boom in the number of Indian families taking holidays. "Suddenly people in India are taking more than one holiday a year. It is becoming a lifestyle event, not a luxury one," he said.

Seven years ago, Cox & Kings' UK business shipped 15,000 passengers out of Britain on long-haul holidays while its Indian business sent 4,000 passengers on holidays out of India. Last year these figures had reversed to 16,500 and 287,000 respectively.

Kerkar said that the public-private partnership with Indian Railways would create a train "more luxury" than the Orient Express. "You come on board asking for a glass of champagne and you are given the bottle. It will be that kind of thing," he said.

Earnings before interest, tax, depreciation and amortisation (Ebitda) at Cox & Kings, which is majority-owned by Kerkar's family and other shareholders, including Anthony Good, the founder of PR company Good Relations, are expected to be 738m rupees this year. This is expected to rise to 2.1bn rupees by 2010, according to analysts' forecasts.

In order for the Indian IPO to be made possible, the UK parent company of Cox & Kings reversed into its Indian subsidiary. "The Indian child took over the UK parent," said Kerkar.


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## mujahideen

Chidambaram doesn't see sharp rupee rise in 2008

_By Surojit Gupta and Charlotte Cooper_

*NEW DELHI *(_Reuters_) - The rupee is unlikely to appreciate as sharply this year as last year, when its gains were "extraordinary", and the economy will grow close to 9 percent, the finance minister told Reuters on Sunday.

Palaniappan Chidambaram, speaking in an interview two days after unveiling his 2008/09 budget, said he aimed to contain inflation at about 4 percent but this would depend on how world food and commodity prices panned out in the coming year.

The rupee gained more than 12 percent against the dollar in 2007, largely driven by huge capital inflows, rising interest rates and a weakening dollar, hurting some labour-intensive export sectors and complicating management of monetary policy.

"I don't know whether the rupee will appreciate but even if it does I don't think it will appreciate as sharply as it did in 2007," Chidambaram said at his residence in the capital.

"2007 was an extraordinary appreciation of the rupee."

The partially convertible rupee closed at 40.01/02 per dollar on Friday. It hit a near-decade high of 39.16 last November, driven up by portfolio inflows into the stock market, but last month slipped to a five-month low of 40.25.

The $1-trillion-dollar Indian economy is the third largest in Asia and the fastest growing major one in the world after China. Gross domestic product grew at 9.6 percent in the fiscal year 2006/07 and is on course to slow slightly to an estimated 8.7 percent in the year which ends on March 31.

The pace has been accompanied by rising inflation.

Wholesale price inflation, the most widely watched price measure in India, hit a two-year high of 6.7 percent in early 2007 and is again on the rise, with a mid-February 2008 reading of 4.89 percent, its highest in eight months.

"We would like a real GDP growth of 9-plus, which means we must contain inflation at 4 percent or below. That is the ideal situation," Chidambaram said.

"But the ideal is an aspiration. What we will achieve is, I hope, pretty close to the ideal."

A finance ministry survey published on Thursday has said however that keeping expansion at 9 percent a year would be a challenge due to inflation and infrastructure constraints. It warned raising growth to double digits, which has been a mantra of this government, would be even harder.


*FARMERS' DEBT PLAN*

Chidambaram announced a controversial plan in the budget to write off $15 billion of small farmers' debts to banks in a move analysts say is aimed at wooing voters ahead of elections due by May 2009.

He has declined to say exactly how the write-off will work and parried the question again on Sunday when asked if he would use some of form of bond issue to fund the waiver.

"Whenever we firm up our plans we will disclose it at the appropriate forum."

Chidambaram, a Harvard-educated lawyer turned politician, has been gradually tidying up India's messy public finances.

By law the government has to bring the federal fiscal deficit down to 3.0 percent of GDP in 2008/09 and Chidambaram has a more aggressive target of 2.5 percent for the coming year from an estimated 3.1 percent for this fiscal year.

But off-budget items, such as oil bonds issued to state-run retail fuel companies, have been creeping up as the price of oil worldwide has soared. India, which puts a ceiling on retail fuel prices, has kept them down by issuing special bonds to partially compensate state oil firms obliged to sell fuel at a discount.

Analysts have flagged the off-budget items as a potential fiscal concern, alongside a potentially substantial increase in salaries for more than 3 million government employees expected after a pay review is submitted at the end of the month.

Chidambaram said off-balance sheet items for 2007/08 totalled about 180-190 billion rupees ($4.5-4.8 billion), which represented about 0.3 percent of GDP.

"Even if you add 3.1 to 0.3 that comes to 3.4. As we incur an off-budget liability we will certainly show it in the documents that are published from time to time," he said.

As for the government workers' pay round, the budget already contained provisions for the ordinary pay round, so he only had to provide for the increment over the normal increase.

"For that I think I will get additional revenues through better tax administration and tax buoyancy" he said.

"Failing which, I have got enough headroom in the fiscal deficit."

$1=40 rupees


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## Bushroda

*Virgin Mobile launches in India, targets youth market*
International Herald Tribune, France
March 2, 2008

MUMBAI, India: Virgin Mobile launched new services in India Sunday, targeting the youth market in one of the world's fastest growing regions, the company said.

Virgin Group Chairman Richard Branson said the British company would offer music, entertainment and news on India's film industry, sports and stock markets to about 400 million young Indians in the 15 to 30-year-old age group.

The British billionaire said his company would launch Virgin Mobile handset services through Tata Teleservices Ltd, a top Indian mobile operator, in 50 cities initially, expanding to more than 1,000 cities by December.

"India looks very, very promising. We need only a small percentage of the market to do well," Branson told reporters at a news conference.

Branson said the size of India's youth market was staggering.

"It's six times the size of the U.K.'s population and we are bound to have lots of fun here," he said.

Branson did not divulge financial details, but said he hoped to attract a customer base of 5 million subscribers and become profitable within three years, offering special value-added Virgin Mobile branded services and handsets ranging from US$50-US$125 (42-104).

India is a key mobile phone market, adding more than 6 million new connections every month with its economy growing at more than 8 percent annually.

Tata's mobile network operates in 5,000 Indian cities and towns.

Tata Teleservices, a subsidiary of one of India's most famous conglomerates, the Tata Group, has operations ranging from software, automobiles, hotels and retail.

Ratan Tata, the group chairman, said his company decided on a franchise operation with Virgin Mobile as part of an initiative to bring freshness and innovation to young subscribers in India.

"Richard is known for his vigor, youthful approach and fresh approach to marketing," Tata said in a televised message.

Branson's other interests in India include Virgin Atlantic Airways Ltd., which operates daily flights connecting London with Mumbai and New Delhi.


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## Bushroda

*'Chindia's' industrial power on fast track*
Morris Beschloss 
 Special to The Desert Sun 
 March 2, 2008

It's common knowledge that Chindia (the combination of Asian giants China and India) are the world's fastest growing industrial powers.

Both have distinguished themselves not only as the world's leading converts to industrialization, but have risen to the top of the heap in technological know-how. Their combined engineering graduates eclipse that of the U.S. by a six times multiple.

Comprising more than one-third of the world's population, they have also converted top-heavy agrarian societies into massive consumer sectors. This has been accomplished in a single generation, and it's a process that is only beginning.

But when it comes to a confrontation between these two behemoths, it's no contest. China practically wins it by default.

Sino-Indian trade last year soared 56 percent to $38.7 billion and could come close to doubling by 2010. But such binational trade is heavily tilted in China's favor, with India's deficit of $9.17 billion last year more than twice that of 2004 and 2005.

The big difference between the two potential economic superpowers is commercial and industrial infrastructure.

Also contributing to the gap is the cultural and political makeup of the world's only billion-plus population centers.

Whereas the Chinese have an authoritarian super-structure, it is amazingly capitalistic and singularly reactive to a market-driven economy.

India still suffers from a rigid cultural apartheid, consistent with traditional social brackets reflecting the huge subcontinent's long history.

Despite the 300 years of British occupation, India's major legacy from that period is bureaucratization.

India's President and former Finance Minister Manmohan Singh is most anxious to create greater synergies with his Chinese neighbors.

*India's trade deficit growing*

Despite Mr. Singh's wishes for a balance of trade, India's deficit with China is about to get far worse.

The Indians, recognizing the deplorable state of their electric power industry, are about to embark on a multi-billion-dollar generator expansion.

In order to make this happen, they must tap into China's equipment and expertise to leapfrog the abysmal lack of power existing throughout the Indian subcontinent, especially as a support for the nation's rapidly developing industrial sector.

The deficit with China has previously been confined to commodities such as electrical components, pipe and machinery parts, but is now transcending into heavy equipment that is bound to add billions onto Indian's runaway deficit.

With India's internal manufacturing growth hamstrung by the political roadblocks put up by the ruling Congress Party, which is part of a socialist parliamentary block, the channel for accelerated internal growth is impeded by internal bickering.

Be that as it may, be assured that "Chindia" will maintain its rapid growth, dwarfing the attempt by any other nation to leapfrog to the top of the world's industrial pinnacle.


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## Bushroda

*Indian manufacturing slips in February, but still robust* 
Reliable Plant, UK

The seasonally adjusted ABN AMRO India Purchasing Managers Index (PMI) posted 59.5 in February, edging down from the previous months 60.7, but nevertheless remaining at a level indicative of a considerable improvement in manufacturing business conditions.

Commenting on the latest survey findings, Gaurav Kapur, senior economist, ABN AMRO Bank N.V, said: A dip in the headline PMI reading to 59.5 in February from 60.7 in the previous month suggests that the pace of activity growth in the sector eased. That is consistent with the trend seen over last three months now. That said, a headline reading well above the threshold level of 50 implies that the sector continues to see fairly strong expansion in activity levels. The details of the survey show that the output index registered its lowest reading in last six months. It came down to 62.2 in February. The order book position of the sector remains strong, however. The new orders index printed at 68.4, though lower than previous month, but still a particularly strong reading compared to the most of the survey history. Otherwise, output and input price indices printing at their highest in the last four and six months respectively, points toward strong inflationary pressures in the economy. And, the fact that a larger section of the survey respondents passed on the increase in input prices to their final output price, points towards reasonable degree of pricing power.

Indian manufacturers expanded production at a marked rate in February, although growth was the weakest for six months. Volumes of total new business increased markedly in February, bolstered by favourable market conditions and increased marketing activities.

Unfinished work continued to accumulate in February, albeit only marginally. Firms linked the increase in backlogs of work to strong sales. Rising production requirements led companies to add to their workforces in February, although employment growth was the weakest for three months. Nevertheless, staffing levels rose modestly.

Higher quantities of purchases led to a further rise in pre-production inventory levels, albeit at a weaker rate than in the previous month. Stocks of finished goods also increased, and at a rate broadly unchanged from January.

Input price inflation accelerated sharply in February and was the strongest for six months. Indian manufacturers raised factory gate prices again in February, with average charge inflation picking up from the previous month.


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## Bushroda

*January exports post 20.47% growth*
_*April-Jan trade deficit zooms; oil imports rise 60% in Jan*_

_Non-oil imports during January 2008 are estimated at $14.79 billion, showing a growth of 65%._
_Trade deficit during the first 10 months of current fiscal zoomed to $67.41 billion._
 

_Hindu News Bureau_ 
New Delhi, March 3

Even as exporters complain about the adverse impact of the appreciating rupee and lack of supportive measures in the Union Budget 2008-09, the countrys exports for January 2008 clocked a growth of 20.47 per cent and cumulative export growth during the first 10 months of the fiscal at 21.62 per cent in dollar terms.

But in rupee terms, export growth in January 2008 was seven per cent and cumulatively it was 7.66 per cent which is the real crunch confronting exporters in general and in labour-intensive sectors in particular. 

Provisional figures of foreign trade data released by the Department of Commerce shows that the countrys exports, in January 2008 valued at $13.14 billion, was 20.47 per cent higher than the level of $10.9 billion during January 2007. 

Cumulatively, value of exports for April 2007 to January 2008 at $124.19 billion was 21.62 per cent higher than $102.11 billion during the corresponding months of the previous fiscal.

*Imports* 

Imports, on the other hand, during January at $22.5 billion were 63.57 per cent higher than the level of such imports valued at $13.75 billion in January 2007. Cumulatively too, Indias imports during the first 10 months of the current fiscal at $191.60 billion showed a growth of 29.63 per cent over the level of $147.81 billion during the corresponding period of the previous fiscal.

Oil imports during January 2008 at $7.7 billion were 60.81 per cent higher than oil imports of $4.79 billion in January 2007. Cumulatively, oil imports during the first 10 months of the current fiscal at $57 billion were 16.49 per cent higher than the oil imports of $48.9 billion in the corresponding period of the previous fiscal. 

Non-oil imports during January 2008 were estimated at $14.79 billion, against $8.96 billion in January 2007, showing a hefty growth of 65 per cent. Cumulatively too, non-oil imports during the first 10 months of the current fiscal amounted to $134.58 billion which were 376.13 per cent higher than the level of such imports at $98.86n billion in April-January 2007.

As a result of high export growth and a higher import growth the countrys trade deficit during the first 10 months of the current fiscal zoomed to $67.41 billion which was higher than the deficit of $45.70 billion during April- January 2007.


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## Bushroda

*Exploring new mode of cooperation*
Ren Yan 
People's Daily, China
March 03, 2008 

Indian External Affairs Minister Pranab Mjkherjee and his South African counterpart Dr. Nkosazana Damini-Zuma in late February held a two-day seventh session of the South Africa-India Joint Ministerial Meeting in Pretoria. The two sides inked a couple of cooperation memoranda in the fields of agriculture, science and technology, tourism, tariffs and visa granting. Moreover, the two sides decided to institute some new cooperation committees.

In appraising the outcome of the meeting, media reports from both nations note that the two developing nations have stepped up their contact in their socio-economic realm and cite it as a new strategic height for their ties of strategic cooperation.

Strengthening bilateral cooperation to seek the common development represents a starting point to tighten their bilateral relations. India-South African business recorded new highs in recent years. Relevant statistics show their bilateral trade has increased from 26 million US dollars in 1995 to 2.3 billion dollars last year, posing a 90-fold rise in 12 years. As the two major economies, acknowledge scholars or economists in both India and South Africa, they are highly mutually complementary to each other with a wide, promising future. India has invested in such sectors as auto-making, iron and steel, and mining industries in South Africa, whereas the latter input much in India's infrastructure development.

The in-depth growth of economic ties between India and South Africa should be viewed in a much larger backdrop, that is, it constitutes an organic part of the India-Brazil-South Africa strategic partnership. Following announcements made at the United Nations General Assembly in September 2003, the governments of India, Brazil and South Africa decided to forge closer political and economic ties among them.

Back in June 2003, the three major developing nations commenced the India-Brazil-South Africa (IBSA) Dialogue Forum, a trans-regional strategic alliance with an aim of coordinating and adopting their shared stances with regard to the UN Security Council reform and a number of political-economic issues including the multilateral trade talks in the World Trade Organization (WTO).

To date, the forum has been turned into a highly-functional alliance to discuss and pinpoint solutions to common issues negatively affecting the growth of developing nations as well as a vital mechanism to expand the trade and investment between these three nations from a merely lax organ at beginning solely to give heed to macro-political issues.

With rapid advances made in recent years at the spur of the three developing nations, the IBSA Dialogue Forum has become a breach or breakthrough point unit to seek a more involvement with a greater decisive say on the global political and economical development. Indian economy has grown fast with its science and technology reaching the advanced world levels. Brazil is the largest South American nation bestowed with rich natural resources, and South Africa poses the biggest economy on the Africa Continent.

India-Brazil-South Africa Dialogue Forum is, in fact, a crystallization of what we often talk about "south-south cooperation". In other words, the three nations can do a lot together to improve the livelihoods of their people. Some analysts refer to it as a new mode of "south-south-south" cooperation or the "axis" of the south-south cooperation, which is far more viable and influential than groups consisting of more developing nations, such as the group - 77 and the non-alliance movement.

At present, the three nations are mulling the formation of forging the largest free trade zone on earth. The main agenda of the India's External Affairs Minister Pranab Mukherjee's trip to South Africa was focused on first forming the India-South Africa Free Trade Zone. The tentative trade zone under consideration can not only promote the tripartite trade but link it to the regional economic organizations with three nations located in their respective regions. Namely, these organizations refer to the South Asian Association of Regional Cooperation (SAARC), which India belongs to, the South American Common Market that Brazil belongs to, and the South African Development Community with South Africa as a member of it. In view of the present circumstances, the establishment of the mega free trade zone has been restricted to some extent, as the three giant nations are far apart from one another and the transport costs of freight are far too costly.

Meanwhile, the institution of the mega trade zone has been faced with much restriction on imports as these three nations are somehow governed by ideologies with serious trade protection mentalities. On top of this, they have also been confronted with some thorny, headache problems detrimental to cooperation in the political sphere..

Consequently, most cooperation has not won any substantial results; and the tripartite cooperation has covered a lot of fields. If they truly institute a closer alliance, India, Brazil and South Africa should readily give up some of their respective interests and undertake more obligations, and this is of course by no means an easy thing to accomplish.


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## Neo

*Indias trade deficit widens to $9.36bn ​* 
Tuesday, March 04, 2008

NEW DELHI: Indias imports surged 64 per cent to $22.5 billion in January from a year earlier, as state-run oil firms stacked up crude ahead of an increase in local fuel prices and firms shipped in capital goods to raise capacity.

Government data released on Monday showed Indias trade deficit widened in January to $9.36 billion as exports grew by a slower 20.5 per cent to $13.14 billion in the fast-growing economy.

Analysts said the figures suggested it would now be impossible for India to meet its annual export target of $160 billion during the 2007/08 fiscal year. Januarys trade deficit was more than three times bigger than that in the same month in 2007.

It was at $67.41 billion during the April-Jan period this fiscal, from $45.7 billion during the same period in 2006/07. Exports could see some slowdown because of the lower demand from developed markets. Trade deficit could widen to $75 billion this fiscal year, said T K Bhaumik, chief economist with Indias largest private firm, Reliance Industries Ltd.

Oil imports jumped an annual 61 per cent in January as oil firms imported 2.37 million barrels of oil a day to meet demand from dealers before the government raised retail fuel prices on Feb 14.

Non-oil imports were higher as there is a rise in investment demand, said D K Joshi, principal economist with domestic rating agency Crisil. The current account deficit is widening and this will put a pressure on the rupee to depreciate.Indias rupee appreciated more than 12 per cent in 2007, squeezing profit margins of exporters and prompting the government to offer relief to some sectors. 

Indias trade deficit widens to $9.36bn


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## Bushroda

*India introduces its extra-cheap, compact car*
James A. McFadden, 
The Harvard Crimson
Published On: 03/ 4/2008 

The ownership of an automobile in the United States has become nothing short of a divine birthright. Its a universally accepted fact: Americans love their cars and would sooner sacrifice their firstborn than relinquish their entitlement to the family sedan. And naturally, many have lambasted for years the environmental destruction brought upon by this auto-centric culture.

Yet as the U.S. continues to look for a balance between going green and the American dream, India has found its place amidst the controversy with its new initiative, the Tata Corporations Nano, also known as the worlds cheapest car. 

Rather than criticize the environmental impact of this car, people around the world should praise these Indian innovators for their contribution to a developing economy.

The subcompact vehicle introduced last month costs $2,500 and Tatas self-proclaimed goal is to make automotive transport accessible to every Indian family, calling it The Peoples Car. 

Proponents laud the Nano as a giant egalitarian step for India that will help to break down class barriers and bring transport to the masses. Such praise has been drowned out, however, by critics who claim that the car will mark the beginning of the environmental apocalypse.

This argument is ridiculous considering that the United States overwhelmingly dominates global vehicle production and accounts for more than 20 percent of global gas consumption, although America accounts for only 4.6 percent of global population.

Not only should Indias government more actively facilitate such accessible transport, but also the rest of the world should applaud Tatas step in a positive direction.


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## Bushroda

*India makes $39.6B in petroleum trade*
United Press International
Published: March 4, 2008 at 10:50 AM

NEW DELHI, March 4 (UPI) -- India made $39.6 billion from petroleum products in 2006-07 and spent $48.4 billion on crude oil imports, said the junior petroleum and natural gas minister.

"As (part of) efforts to supplement the consumption of petroleum products, particularly for vehicular application and also to curb emissions, research has been carried out by the Ministry of New and Renewable Energy to explore the possibility of utilizing alternatives for supplementing petrol and diesel," the minister, Dinsha Patel, told Indian Parliament Tuesday.

He said biofuels, namely bioethanol and biodiesel, hydrogen and battery-operated vehicles have been identified as potential future alternatives to supplement petrol and diesel.

He said 5 percent blended ethanol was being used in 20 states.

"But vehicle manufacturers are asking for more time so as to study the effects of ethanol on material compatibility of in use vehicles," Patel said.


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## Bushroda

*India's Tata Group Looks To Go Global, One Buy At A Time*
Dow Jones Newswire 
March 04, 2008: 05:27 AM EST


HONG KONG (Dow Jones) -- Tata is an odd mixture of very large, and very, very little. 

India's oldest and best-known industrial house is the biggest software exporter via its Tata Consultancy Services, the largest private-sector steelmaker thanks to Tata Steel and the leading hotelier with its Indian Hotels Co. 

Tata Motors (TTM), meanwhile, is turning heads with the Nano, a three-meter long, four-seater minicar that'll have a top speed of 65 miles per hour and sell for about $2,500 when it hits the home market later this year. 

But such size belies the conglomerate's global ambitions, with Tata Motors widely expected to soon acquire Ford Motor Co.'s (F) luxury Jaguar and Land Rover brands. The Wall Street Journal reported last week that a deal was imminent. 

An acquisition of such scale and prominence would be the latest in a string of global deals, part of the industrial behemoth's strategy to look well beyond its domestic successes. 

"They (the Tatas) have become far more outgoing and aggressive in their approach," said Ajit Surana, managing director at brokerage Dimensional Securities in Mumbai. 

"Ten years ago, they were seen as a staid, conservative group. That perception has changed completely... If there is a (merger-and-acquisition) deal out there, and if it makes sense, they'll go for it, even pay a premium," added Surana. 

The nearly 100 companies to fall under the Tata Group umbrella raked in $28.8 billion in revenue in the financial year ended March 31. Its 27 listed companies, including Tata Motors, Tata Steel (TATIFM) and Tata Consultancy Services (TACSF), had a market value of more than $65 billion. 

Outside India, Tata is becoming known for these bold and often surprising acquisitions. 

In some cases, the target has well exceeded the suitor in terms of revenue. This was the case with Tata Tea's $540 million acquisition of U.K.-based beverage major Tetley in 2000 and Tata Steel's $11.3 billion takeover of Anglo- Dutch steelmaker Corus Group Plc. last year. 

The Tetley acquisition was the largest-ever cross-border takeover by any Indian company in 2000, while the Corus buy is the largest-ever overseas acquisition by an Indian company to date. 

The Corus deal gave Tata a meaningful presence outside India. It also stirred up emotions at a national level, as Corus was several times bigger than Tata Steel. That acquisition almost overnight lifted the Indian company nearly 50 places in the rankings, making it the world's sixth-largest steelmaker. 

"Their acquisition of Corus last year made every Indian proud and that, in my view, is a very significant milestone in the march of the Indian industry from a closed economy," said Rahul Bajaj, chairman of India's second-largest motorcycle and scooter maker, Bajaj Auto (BJJAF). Bajaj was referring to the economy prior to 1991, when India ended state controls over industry and opened the doors to foreign direct investment. 

*Turning global *

As a result of these cross-border acquisitions, Tata Group will earn nearly 60% of its total revenue from overseas markets during the current financial year ending March 31. That compares with a contribution of less than 10% in the financial year 2000-01. 

And for the first time in its 140-year history, India is set to become the second-largest area of geographic importance for Tata, with Europe seizing that No. 1 spot, said Alan Rosling, executive director at the Mumbai-based Tata Group holding company, Tata Sons. 

That shift looks set to continue, given the rising exports of its various group companies, new projects being started overseas and the continued pace of acquisitions. 

"Exports are the bedrock of our overseas sales, and we are now also investing in greenfield assets," said Rosling, who was member of the policy unit and a special advisor to John Major when he was the British prime minister. 

"Many of these overseas expansions are in joint venture with local partners ... mergers and acquisitions have attracted more media interest than (our) organic growth, but M&A is only part of our strategy," added Rosling. 

Though Rosling wouldn't detail growth targets, he said projects under way include a ferro-chrome manufacturing plant in South Africa, a steel plant in Vietnam, a joint venture with the South African government for long-distance telephone services and a joint venture to assemble pickup trucks in Thailand. 

Meanwhile, Tata Consultancy Services, the group's software major that earns half its total revenue from exports to the U.S., is looking to expand its software-development activities outside India, and has its eye on China, Brazil, Uruguay and Hungary. 

*Short-term pain; long-term gain? *

As the Ford deal reportedly nears, the acquisition spree continues apace. 

In February, chemicals and fertilizers company Tata Chemicals acquired New Jersey-based soda ash producer General Chemical Industrial Products for $1 billion. The acquisition will consolidate Tata Chemicals' position as the world's second-largest producer of soda ash, a commodity used to make glass and detergents, while expanding its global footprint. 

Tata's aggressive acquisition strategy may deliver the group the desired benefits of scale and reach in the long run, but it also presents short-term challenges. These include integrating operations in different countries and cultures, and managing the high amounts of debt Tata group firms typically raise to fund these deals. 

"As long as the group's acquisitions are made a reasonable price and there are new markets which get added, I think it is a positive sign," said I.V. Subramaniam, chief investment officer at Quantum Advisors in Mumbai. 

"My worry is less on the financial part and more on the people-management aspect," Subramaniam added, referring to differences in culture and management style that often crop up following an overseas acquisition. 

Tata's management skills will likely be put to the test if it successfully completes the Land Rover-Jaguar brand acquisition, given that Tata's low-cost, value-for-money products stand in sharp contrast to products sold under the two luxury, marquee brands. 

Subramaniam Ramnath, an analyst with IDFC-SSKI Research in Mumbai, said a successful deal could potentially stretch the Indian company's financial resources and lead to earnings downgrades, unless the move is carefully managed. 

Also, there are "no apparent synergies in terms of shared product platforms or distribution networks, given the stark contrast in pricing as well as position of Jaguar-Land Rover and Tata Motors' products," he said. 

Ramnath, however, expects "significant cost savings at the two units over a longer term, stemming from higher component sourcing out of (low-cost) India." Even if Tata Motors can manage a small improvement in their profitability, it would translate into significant benefits for the Indian company, given Land Rover-Jaguar's estimated revenue of $13 billion is much larger than Tata Motors' consolidated revenue of $8.2 billion in the previous financial year. 

Dimensional's Surana says Tata's bid for Jaguar and Land Rover underscores confidence that it will be able to trim manufacturing costs. 

"They are leveraging on the growth that is expected in Asia over the next several years. Most of the sales for these premium cars will take place in India and China," said Surana. "If they can bring down the costs, selling the iconic brands won't be a problem."


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## Bushroda

*Low-cost production: World industrys attention riveted on India*
By John Reed 
Financial Times, UK
March 4 2008 08:23

In January, while Detroit was lifting the wraps on its latest crop of big pick-up trucks and sports utility vehicles, a chunky, oblong little hatchback premiered on the other side of the world. The Nano, developed by Tata Motors and unveiled in Delhi, stole the Americans thunder by dominating much of the debate at north Americas biggest auto show.

Tatas one-lakh or $2,500 car showcased the ability of Tata  and, more broadly, Indias emerging carmakers  to develop, engineer, launch, and sell a car at rock-bottom cost, allowing for entry-level costs affordable to the developing worlds legions of new carbuyers. Tatas website for the car had 4m hits the day it launched. The kind of responses we get across the world is quite astounding, according to Ravi Kant, the carmakers managing director. It has struck a chord with a whole lot of people who couldnt imagine they would come within reach of a normal car.

Bosch, the German automotive and industrial group, estimates low-cost vehicles priced at less than 7,000 ($10,600) could reach a 13 per cent share of the world market  or about 10m vehicles  in 2010. Toyota, Renault/Nissan, and other big carmakers are developing cars for the segment. India has riveted the global industrys attention on the low-cost market recently for three reasons.

First is the Indian market itself, which generates hundreds of thousands of first-time car buyers every year. Carmakers such as Suzuki and General Motors have for years produced cheap and cheerful models for the market, but the growth of Indias economy  and its domestic supplier base  have accelerated the low-cost push. Hyundai uses the country as a base for exports.

Second is the subcontinents vaunted strength as a global back office for cut-price, world-class research and development. An engineer whose services might cost $100,000 or more in the US will work for about $40,000 in India. Daimler, GM, and Bosch all have R&D centres in Bangalore.

Third, or so some Indians claim, is a culture of frugality that pervades the national mindset, and lends itself well to the cost-paring trends in the global car business. In India nothing is ever thrown in the waste basket  everything is recycled, says Pawan Goenka, head of Mumbai-based Mahindra & Mahindras automotive business. Before the western world understood what recycling was, we were doing it.

Tata, when designing the Nano, used a design to cost approach, challenging its vendors to step up with supplies under pre-set price caps. A more conservative approach to model proliferation also helps the Indians to build cheaper vehicle platforms: Mahindras Scorpio SUV is offered in just five options.

We have kept our systems and processes simple, says Mr Goenka. We are not paying a price of complexity. The company developed its Scorpio for $120m, split evenly between tooling and design, and perhaps a quarter of what an established western carmaker such as Ford would have spent. It now has its sights on the US, where it will begin exporting SUVs and pick-up trucks next year in the $25,000 range, about 10 to 15 per cent below the price of other, similar vehicles.

Mahindra, like Indias other emerging carmakers, also spends less on marketing its cars than its developed-country competitors. Renault spent four or five times less on marketing its low-cost Logan in India than it would for a vehicle in a developed market, says Vigneshwaran Chandran, a low-cost cars expert with consultancy Frost & Sullivan.

Much of Indias low-cost production edge comes not from hazy cultural values, but cheap labour  the oldest trump card in the global car industry. In low-cost assembly, you have much more manual operations, says Mr Chandran. This factor never comes up when people talk about low-cost production.
 
Mahindras Mr Goenka acknowledges Indias low-wage advantage  but notes that it is being eroded. When the company was developing the Scorpio about a decade ago, it enjoyed a cost advantage over western competitors in man-hours that he estimates at about $200m.

Since then, he says, the companys cost base has risen two or three times. Our labour costs are lower than in western countries, but there are other countries with lower costs, he says. India is not the lowest-cost country any more.


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## Bushroda

*Destination Europe for Indian works*
4 Mar, 2008, 0230 hrs IST,Ashoke Nag , TNN

KOLKATA: Indian art is gaining increased acceptability in Europe.Renowned Paris-based Indian painter Sakti Burman sees a buoyant future for Indian art in these regions. Of course, artists who have been living in Paris for long are obviously enjoying greater visibility and a bigger slice of the European market for Indian art. Pricewise, on an average, Indian artists have found a rise of 300-400% in the European circuit over the past 4-5 years. 

Earlier, around 10-15 years back, Indian painters residing in Paris used to be shown from time to time in that city or in some other place in Europe. This applied to a few of us there like Raza, Viswanadhan, Anju Chowdhury, myself and some of the others. Initially, the French audiences became exposed to Indian art in this manner, Sakti Burman told ET. 

But, now, Mr Burman said with the growth of the Indian economy, art has also achieved more prominence in the international world. In step, the visible rise in interest of the Indian public in acquiring art has also encouraged the foreign public to go for this genre of global art. 

One must also add that the Indian art auctions by top auctioneers like Sothebys, Christies, Bonhams and other houses is also drawing foreigners to give Indian art a serious look. And, Indian artists have been scaling tall prices in these auctions. In the same breath, Indians living abroad have also been concertedly buying Indian artworks. This is also influencing their mainstream counterparts So, its a lot of factors put together which are driving the European or foreign viewers to weigh purchasing Indian art, Mr Burman said. 

The prices of high-end artists like Raza or Burman have also climbed significantly in the European market. A Raza, which is selling for 3-4 lakh euros now or a Burman which is going at 50,000 euros were one-tenth that level in the European market even 5-6 years back. Auctioneers in France are also sometimes including Indian artists with legendary international names. Recently, for instance, Sakti Burman was featured in a Paris sale which also fielded artists like Picasso, Jacometti and Calder. Lately, the Unesco also unfurled a show of Burman in Paris. 

Off and on, Europeans of various categories acquire Indian art. This covers the French, Belgian, Germans and the Swiss. Some may be buying for the love of it and others as an investment proposition. There are also 4-5 Indian solo shows every year. Galleries in France also come up with proposals to acquire Indian art. Interestingly, some French collectors and dealers are travelling to India to interact with galleries and artists here and explore buying possibilities. This is just the beginning. If the French and the European economies in general grow, Indian art could gain a stronger foothold in these locales, Mr Burman said.


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## Neo

*Indian finance minister urges industry to help curb inflation ​* 
Thursday, March 06, 2008

NEW DELHI: Indian Finance Minister Palaniappan Chidambaram on Wednesday urged manufacturers to cut prices so that inflation could be kept in-check.

The manufacturing sector will have to become more competitive, efficient and hold the price line, Chidambaram told a gathering of industry leaders. The minister said that manufacturing contributed more than 50 per cent to inflation, which rose to its highest level since June last year at 4.89 per cent for the week ended February 16.

The government has said that curbing prices remains its priority over concerns that money tightening measures by the central bank were slowing the economy. The government last week reported economic growth of 8.4 per cent in the third quarter, the slowest in two years.

But Chidambaram said he remained confident about Indias growth story. I am extremely bullish about the economy in 2008-09, the minister said. I intend to keep a batting average of 8.8 percent plus.

The government has forecast growth of 8.7 per cent for the year ending March, following 9.6 per cent in the previous year. Chidambaram said that the farm sector, which expanded by 3.2 per cent in the quarter ended December, was slowing growth.

The sector that is hurting is agriculture. The government last week announced a massive $15-billion farm loan bailout for 40 million small farmers in a populist budget aimed at gaining support ahead of the 2009 general elections. 

Indian finance minister urges industry to help curb inflation


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## Neo

*India to export 450,000 tonnes rice to BD *​ 
Thursday, March 06, 2008

MUMBAI: India allowed export of 450,000 tonnes of non-basmati rice to Bangladesh, waiving a ban on the export of the commodity, the director-general of foreign trade said in a statement late on Tuesday.

India currently prohibits export of any rice priced below $500 per tonne. The notification said state-run companies State Trading Corporation, MMTC Ltd, PEC Ltd, and National Agricultural Cooperative Marketing Federation of India Ltd will export 100,000 tonnes each.

The West Bengal Essential Commodities Supply Corporation Ltd will export 50,000 tonnes. The notification did not give any reason for allowing the exports, despite a ban. Bangladesh had urged the international community to provide rice to feed its calamity affected population. 

India to export 450,000 tonnes rice to BD


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## Neo

*Indias finance minister bullish on 2008/09 growth​*
NEW DELHI: Indias finance minister said on Wednesday he expects the economy to grow by at least 8.8 percent in the next fiscal year while promising to revisit overseas borrowing rules for corporates later. 

The economy is estimated to grow 8.7 percent in the financial year that ends in March, moderating from a blistering 9.6 percent in 2006-07, an 18-year high, as a stronger rupee and higher interest rates trim expansion. 

I dont have any doubt in my mind that there will be an upturn in growth ... Demand will rise in 2008/09. I am bullish on growth and we hope to maintain 8.8 percent-plus growth, Palaniappan Chidambaram told a meeting of leading businessmen. 

He said higher public spending and more money in the hands of consumers from tax relief announced in last Fridays budget for the next fiscal year would boost Asias third-largest economy, which is largely driven by domestic demand. 

India tightened rules on foreign borrowing by local firms last year in a move aimed at checking surging capital flows that had pushed the rupee higher, hurting labour-intensive export sectors and complicating monetary policy. 

Companies can now raise up to $500 million abroad without seeking approval from the central bank, but can only invest in India up to $20 million of the sum raised. 

We have not closed the external commercial borrowings window, Chidambaram said. 

These restrictions are indeed intended to be only temporary. When things get better we shall certainly revisit these restrictions. 

The finance minister also expressed concern over a stagnating farm sector which he said was hurting overall growth. 

The farm sector, which supports nearly 60 percent of Indias population and accounts for 17.5 percent of the countrys gross domestic product, has been treading water in the past few years. 

Indias food output has failed to keep pace with the demands of its 1.1 billion population, most of whom rely on the land for their livelihoods, widening an already yawning wealth gap between city and village. 

A jump in global prices of farm commodities has made importing staples a costly and politically damaging exercise and contributed to a spike in local food prices. 

Indias farm growth is expected to slump to 2.6 percent this financial year, as lower investment and stagnating yields cut output

Daily Times - Leading News Resource of Pakistan


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## Neo

*India 07-08 cotton crop revised up, 24.4m bales ​* 
Friday, March 07, 2008

WASHINGTON: Indian cotton production should reach 24.4 million bales during the 2007/2008 marketing year, up from a previous estimate of 23.9 million bales, a US Agriculture Department attache report said on Wednesday.

Strong international cotton prices also pushed the export forecast for Indian cotton up to a record 5.9 million bales from an earlier prediction of 5.1 million bales for the 2007/2008 marketing year (MY).

The domestic consumption forecast for Indian cotton in 2007/2008 was lowered to 18.1 million bales from 19 million bales due to strong cotton prices and weaker cotton textile demand, the report said. Attache reports are not official USDA data.

Following are highlights of the report. 

The post-MY 2007/08 cotton production estimate is raised marginally higher to a record 24.4 million bales, which is 2.6 million bales higher than last year. This revision is based on strong market arrivals, which provides evidence to support a higher than anticipated crop estimate in the central and southern states. Market arrivals through February 23, 2008 reached 18.4 million bales (4.0 million tons) compared with 16.4 million bales (3.6 million tons) for the corresponding period last year. The Cotton Advisory Board is currently estimating the MY 2007/08 crop at 24.2 million bales, while estimates from various industry sources range 22 to 25 million bales (28.0 to 32.0 million Indian bales of 170 kg).

Exports revised higher on strong international prices: Posts MY 2007/08 export forecast has been raised to 5.9 million bales due to strong international cotton prices, up one million bales from last years record level. Due to the record crop and weak domestic off take, Indian cotton continues to be very competitively priced vis-a-vis comparable cotton from other origins.

Market sources report that about 4.7 to 5.1 million bales have been contracted for exports for shipment through March 2008. Of this amount about 3.9 to 4.3 million bales have been shipped through the third week of February, mainly for China, Pakistan, Turkey, Bangladesh and South Asian countries. Industry sources report that cotton exporters, including international merchants, are currently holding about 1.1 to 1.2 million bales in stocks for future sales. Although the pace of exports has slowed down since February, export prospects during the remaining season will depend on international cotton prices.

Assuming no change in the current price parity between local and international cotton, Indias cotton exports are expected to reach 5.9 million bales, over 20 per cent higher than last year.

India 07-08 cotton crop revised up, 24.4m bales


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## Neo

*Indian inflation hits 5pc ​* 
Saturday, March 08, 2008

NEW DELHI: Indian ianflation hit 5 percent in late February for the first time in nearly nine months, and analysts said building price pressures would stop the central bank from loosening policy even though growth is slowing.

The wholesale price index rose 5.02 percent in the 12 months to Feb 23, higher than the previous weeks 4.89 percent and well above a market forecast of 4.78 percent, data showed on Friday.

It was the first time since June 2, 2007, that inflation had reached 5 percent, the level the Reserve Bank of India wanted to contain it near in the 2007/08 fiscal year that ends this month,

Inflation has risen above 5 percent much faster than we had expected, said Sonal Varma, an economist at Lehman Brothers. We expect inflation to remain high in 2008/09 and add to the rising policy dilemma of the RBI of slowing growth and rising inflation, she said.

At the end of 2007, inflation was running at 3.8 percent. Record prices of crude oil and rising costs of food and other commodities are expected to push inflation higher in coming weeks. The rise in inflation comes as earlier rate rises start to hit consumer demand. Indias economy grew an annual 8.4 percent in the December, slowing from 8.9 percent the quarter before.

Indian inflation hits 5pc


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## Bushroda

*Labour pact with India on the way* 
By SOMAN BABY
Gulf Daily News, Bahrain

BAHRAIN is to sign a memorandum of understanding (MoU) with India on labour and manpower co-operation next month. 

Labour Minister Dr Majeed Al Alawi has accepted an invitation from Overseas Indian Affairs Minister Vayalar Ravi to visit India to sign the MoU.

Dr Al Alawi met Indian Ambassador Balkrishna Shetty yesterday and confirmed his plans to visit India later next month.

"I shall make use of the opportunity to sign the MoU, which will help further strengthen the ties between Bahrain and India in labour and manpower areas," he said.

"However, I believe that the relations between the two countries go beyond just labour matters.

"Historically and culturally we are strong partners. Every effort should be made to take this relationship to new heights."

Dr Al Alawi met Mr Ravi in Abu Dhabi earlier this year during a meeting of labour exporting and receiving countries.

Mr Ravi then stressed the need for Bahrain to sign the MoU, as other Gulf countries including the UAE, Kuwait and Oman had already signed similar agreements.

Mr Shetty said the MoU would further protect the welfare of Indian workers in Bahrain.

"It also helps ensure the smooth flow of workers from India to Bahrain as per the requirements of the kingdom," he said.

"The MoU will cover a clause to ensure that the right person is recruited for the right job with proper salary.

"Workers thus recruited should add value to the labour market and the Bahraini economy. It also helps enhance productivity in all sectors."

Another highlight of the MoU will be provision for joint recruitment and training of workers by both countries, said Mr Shetty.

"The MoU will go a long way in reducing the number of exploitations of the workers by unscrupulous recruiting agents," he added.

"The MoU will also stress the need to protect female workers, especially housemaids, who are not covered under the labour laws of the Gulf countries."

Mr Shetty said the signing of such an MoU is significant at a time when both Bahrain and India are implementing major labour reforms.

"When Bahrain is implementing the reforms through the Labour Market Regulatory Authority (LMRA), India has initiated labour reforms as part of its e-Governance," he revealed.

"Plans are under way to issue smart cards to all workers leaving India for jobs abroad, starting on April 1.

"The cards which will have all details of the employees as well as their prospective employers will be distributed through the immigration offices in India."

The meeting was attended by Indian Embassy second secretary R Raghunathan and Labour Ministry international and public relations director Sabah Al Dossary.


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## Bushroda

*The new Modern*
Georgina Maddox
March 10, 2008 at 01:33:56

When we saw Atul Dodiya fetch Rs 1 crore shortly after a stalwart like Tyeb Mehta had just bagged his first crore at the Christies action in 2004, a few eyebrows were raised. A Contemporary drawing parallel with a Modern guru was contrary to the mantra that runs the auctions. However within four years, this became not just an exception but a rule where several zeroes have been added on to the price tag of artists who sell at Rs 1 or Rs 2 lakhs only three to four years ago. The current asking price for a Dodiya or Jitish Kallat is anything from Rs 28 lakh to Rs 1 crore, while even a newly introduced artist like Farhad Hussain commands Rs 10 lakh. 

Picking up on the international trend that favours the Contemporaries, 140 works of Indian Contemporary artists have just returned from rave reviews in New York, and Dinesh and Minal Vazirani of Saffronart.com are proud. Contemporary art is doing exceedingly well internationally. This is because its about the here and now, the genre cuts across geographical boundaries in a way that perhaps Modern art does not, explains Dinesh, adding, After China, India was the next Asian country to come into the spotlight. 

In fact, this auction, kicking off on March 13, could not have been timed better. Three other auctions are slotted for MarchSothebys, Christies and Osiansand their bastion is Modern art. Saffron seems to be the best place to look for the Contemporaries. 

The upward curve is reflected not just at the auction houses but three mega shows dedicated to Contemporaries that are slotted to premier in Manchester, New York and China. Art aficionado Frank Cohen is showcasing Passage to India, a group exhibition from his private collection featuring biggies like Dodiya, Subodh Gupta, Bharati Kher and Sudarshan Shetty to name a few. Charles Saatchi is hosting an exhibition titled, The Empire Strikes Back that features the above mentioned artists as well as others like Chitra Ganesh and Shez Dawood. Swiss collector Uli Sigg, one of the biggest in the business, is taking his collection to China. 

While works by artists like Shilpa Gupta, Riyas Komu, Kallat, Rashid Rana and T V Santosh reflect the explosion of mass media and the opening up of the Indian economy, Dodiya, Navjot and Surendran Nair mark the transition period between Modern and Contemporary concerns. Their works address the anxiety that arises from a loss of the local and indigenous to the global. 

Shireen Gandhy, whose Chemould Art Gallery was one of the first spaces to host shows by the likes of Kher and Dodiya when they were just starting out, says the reason is innovation. Contemporary artists have caught the interest of collectors nationally and globally because they are willing to reinvent themselves the way the Moderns cannot, says Gandhy. 

In the end though, as collector and emerging artist Cyrus Oshidar puts it, it is about being in the right place at the right time and branding oneself as avant-garde.


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## Bushroda

*Exports growth to continue in 09*
Press Trust of India 

NEW DELHI, March 9: Notwithstanding an economic slowdown in the USA, India is likely to maintain 20 per cent growth in exports in the financial year 2008-09 but the basket may undergo a change, a finance ministry official said. 

USA is one of the major destinations for India. We said that in the coming year, it may not be as good as it was earlier. But that does not mean that we are not performing well. We are having 20 per cent plus growth and possibly we can continue with 20 per cent plus, Mr HAC Prasad, senior economic advisor in the finance ministry, said. 

In the US market, many of India's export items, particularly textiles, handicraft, have fallen. Same is the case with EU, but for Asian nations and other economies, Indian exports have not fallen to that extent, he said. 

India has set export target of $160 billion for the current fiscal, up by 28 per cent over $125 billion in the previous year. Exports have already been pegged at $124 billion till January and are likely to be close to $160 billion in the full financial year, with March usually expected to record higher figures, Mr Prasad said. 

Another two months are left and we have to attain $160 billion, which I think we may attain. We might be short by a few billion (dollars), Mr Prasad, one of the key team members who authored the external sector part of the Economic Survey 2007-08, said. 

He said that Economic Survey has pointed towards the areas of weakness for the coming year. We have to work on the higher base of exports. On this base, we have to have higher exports. There is a recession in the world economy, including USA. 

A slowdown in the USA affected the textile sector first, and then spilled over to other sectors, hampering India's exports to the USA, European Union and other countries. 

While some sectors like textiles and handicraft have not performed well, others have done well. As such, total exports would be high in 2008-09. But there would be a compositional change in exports, Mr Prasad said. 

The Economic Survey has said that the outlook for exports in 2008-09 may not be as bright as in the past few years, forecasting lower world GDP, world imports and exchange rate developments. 

What we have implied (in Economic Survey) is that exports may not do well in case of some items like textiles and handicraft, Mr Prasad said.


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## Bushroda

*In Booming India Retirement Homes Spread*
By SAM DOLNICK 
Associated Press

PUNE, India (AP)  She grew up listening to her grandparents' stories over dinner, three generations gathered in the house they shared, like nearly every Indian family she knew.

But now that Uma Paranjpe is a grandmother, she finds herself living alone in a small apartment, her children abroad, her grandchildren far from her cooking and her stories.

And she's thrilled.

"Grandparents also want their own independence," said the 62-year-old widow, who lives in a bustling retirement community in this southwestern Indian city. "We want freedom. We would like to travel, to pursue our hobbies."

A cultural revolution is under way in India, led by an unlikely gray-haired vanguard that is dramatically changing what it means to be old here, and what it means to be a family. In a country where family is society's strongest cultural anchor, the thought of the elderly living alone has long been anathema, but many old people today are embracing the notion.

With the economy booming, children are moving away for jobs, leaving elderly parents on their own. While some lament the breakdown in family as a sign of cultural decline, others  especially the well-off  are happy to devote their old age to themselves instead of their grandchildren.

The new retirement communities are so far available only for the rich. There's nothing between the high end faux Florida facilities and bleak government-run homes for those with nowhere else to go.

Roughly a dozen development companies across the country offer sparkling facilities complete with badminton courts, lap pools and game rooms to the wealthiest sliver of the country's 80 million people over 60.

"I don't think my son or my daughter will look after me  and I'm damn happy about it," said Minoo Shroff, 72, who lives in a housing complex for seniors in Pune, a pleasant city popular with retirees because it's more temperate than much of the rest of India. "I'm independent, they're independent."

Seniors in India traditionally occupy a role somewhere between family pillar and dependent hanger-on, with more than 71 percent of the elderly living with their children or grandchildren, according to the 2001 national census.

Grandparents can be revered keepers of family lore or ghostly presences cooking nearly forgotten recipes. But from teeming cities to sleepy villages, caring for one's parents is to most Indians a duty as important as caring for one's children, and home after home across the country is crowded with the same mix of generations.

The arrangement is one borne out of custom and financial necessity  the Indian government provides no Social Security type benefits and less than 10 percent of the population receives even a small pension.

Experts say the new prosperity flooding into India is weakening the "joint family" system, where the next generation lived with the last, because the pace of life is speeding up and getting Westernized.

"The younger generation is very busy. They don't have time to spend with older people," said Harvinder Bakshi of HelpAge India, an activist group for the elderly. "The joint family system is disintegrating."

Newspapers frequently carry lurid stories of children abandoning their parents to the street, and activists have called on the government to open more affordable old-age homes.

Bakshi says his group, a major one, gets a half-dozen calls a month about abandoned seniors.

Even the expensive retirement homes can't make up for the joy of growing old among family.

"I miss that bonding, that security, that comfort, the love, the shelter. We don't feel that here," said Madhukar Gokarn, 73. She and her husband live in an exclusive retirement community called Golden Nest in Pune, but her afternoon walks on the building's roof are small consolation for what she has lost. "Who wouldn't want to be with their own children as long as possible?"

Shashank Paranjape, the real-estate developer generally credited with introducing retirement homes to India, opened his first project, Athashri, in 2003 in Pune as a complex explicitly modeled on Western retirement homes. With roughly 1,000 residents in four branches, Athashri is a thriving community that looks as though it were plucked straight from Florida, right down to the early-bird specials  spicy lentils and rice.

Paranjape plans retirement homes in five more Indian cities, but he and other developers face major hurdles.

To most Indians, communities exclusively of old people seem as impractical as neighborhoods of children would be. Also, the buy-in prices of $75,000 to $125,000 rule out the vast majority of the population, although with the economy growing every year, developers are betting the market will increase.

The communities buzz with card games, book clubs and music lessons  activities all but unthinkable in generations past, when old age was spent helping with grandkids and household chores.

"My mother used to love the violin, but she never had time to play," said Pushpa Salem, 67, who has become an avid butterfly collector since moving to Athashri nearly five years ago. "She would have loved it here."

"When we stay with our children we feel very old," she said. "Here, we feel young."


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## Bushroda

*Tata Communications Expands Global VPN Services to China Through Partnership with China Entercom* 
Michael Schwartz 
News, Markets, VPN Integration, China
Mar 09, 2008 at 11:44AM 

Tata Communications leading provider of a new world of communications, announced today the expansion of its Global VPN service to China through an NNI (Network to Network Interface) agreement with China Enterprise Netcom Corporation Limited (China Entercom/CEC), a value-added telecommunication services and integrated IT solutions provider and subsidiary of CITIC (China International Trust and Investment Corporation). 

Through this NNI, Tata Communications and China Entercom have interconnected their respective MPLS (Multi-Protocol Label Switching) infrastructures, allowing Tata Communications' multi-national corporation (MNC) customers VPN connectivity reach beyond the existing 120 cities in India and 19 major business centers across North America, Asia, and Europe to now also include 347 cities throughout China. Additionally customers can connect with dual PoP locations in tier-one cities including Beijing, Shanghai, Guangzhou and Shenzhen. 

"Tata Communications' agreement with China Entercom allows us to serve our many global and India MNC customers who require a single scalable and reliable global VPN with deep reach into both India and China, and broad reach around the world," said Vinod Kumar, President, Global Data & Mobility Services, Tata Communications. "China and India are the engines driving the globalizing information economy, and, it is critical for MNC's to establish reliable infrastructure in these markets. Tata Communications' unmatched depth and reach throughout India coupled with our new, extended reach into China allows us to support the needs of our customers seeking to achieve seamless coverage in these markets and to major cities throughout the world." 

Mr. Kumar added, "Carrier partnerships are critical to provide the deep global reach our customers' networks require. Our agreement with China Entercom is part of a larger MPLS expansion plan that will include other NNI agreements, as well as the expansion of Tata Communications' international on-net in key strategic regions and emerging markets that are of high value to our customers, including the Middle East, South Africa, Philippines, and Malaysia." 

Zhu Jian Hua, President and CEO, China Entercom commented, "We are pleased to partner with Tata Communications to provide customers with high quality IP VPN solutions throughout China. The seamless integration of Tata Communications' high performance IP network with China Entercom's extensive IPVPN coverage in greater China will provide superior connectivity in the Asia region and to the world." 

Tata Communications is the leading service provider, offering a Global VPN on-net solution with four classes of service options which provides a deep and broad reach across India as well as to major cities across the world. This partnership with CEC will offer customers additional reach into and across China allowing international and Indian MNCs to be seamlessly served with a single VPN that covers India, China, and major metropolitan areas worldwide. The service is available with both managed and unmanaged options, supported by 24/7 end-to-end network management, and tied to a stringent and unified Service Level Agreement (SLA). 

David Kennedy, Senior Analyst, Ovum, states, "With an estimated annual communications spend of $25B, the Asia Pacific Region, including China and India, is the fastest growing economic zone in the world and MNCs are investing heavily in its markets. Revenue from IP-based communications is growing at double-digit rates, and both domestic businesses and MNCs are benefiting from this growth and require sophisticated telecommunications to support their businesses. Network coverage is the first filter that prospective customers apply to suppliers...and coverage in these growing markets is currently the main point of differentiation between networks." 

Tata Communications' global IP network touts 570Gbps of high speed OC48/192 MPLS Backbone Capacity and 500G of customer connectivity throughout North America, Europe and Asia. It reaches over land, sea and sky, in 5 continents and over 195 countries, carrying more then 300 petabits of traffic globally per month.


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## Bushroda

*India likely to maintain close to 20% exports growth in '09*
9 Mar, 2008, 1232 hrs IST, PTI

NEW DELHI: An economic slowdown in the US notwithstanding, India is likely to maintain the 20 per cent growth in exports in 2008-09 but the basket may undergo a change, said a Finance Ministry official. 

"US is one of the major destinations for India. We said that in the coming year, it may not be as good as it was earlier. But that does not mean we are not performing well. We are having 20 per cent plus growth and possibly we can continue with 20 per cent plus," H A C Prasad, Senior Economic Advisor in the Finance Ministry, told PTI. 

In the US market, many of India's export items, particularly textiles, handicraft, have fallen. Same is the case with EU, but Asian nations and other economies, Indian exports have not fallen to that extent, he said. 

India has set export target of 160 billion dollars for the current fiscal, up 28 per cent over 125 billion dollars in the previous year. Exports have already grown to 124 billion dollars till January and are likely to be close to 160 billion dollars in the full fiscal, with March usually expected to record higher figures, Prasad said. 

"Another two months are left and we have to attain 160 billion dollars, which I think we may attain. Almost near to that. May be short by a few billion (dollars)," Prasad, one of the key team members who authored the External Sector part of the Economic Survey 2007-08, said. 

Prasad said Economic Survey has pointed towards the areas of weakness for the coming year. "We have to work on the higher base of exports. On this base, we have to have higher exports. There is a recession in the world economy, including US". 

A slowdown in the US affected the textile sector first, and then spilled over to other sectors, hampering India's exports to the US, European Union and elsewhere.


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## Bushroda

*India's Movie Mecca Goes Global*
*Riding a Boom, Bollywood Evolves Into a Magnet for Investment and Talent*

By Emily Wax
Washington Post Foreign Service 
Sunday, March 9, 2008;






*Students at the Actor Prepares school in Mumbai prepare to film a music video. The school is one of many in the city that are training young Indian actors for a maturing film industry, but it also attracts foreign students. (By Emily Wax -- The Washington Post)*

MUMBAI -- When Amit Shah, a budding young actor born in Chicago, auditioned for a role in the upcoming Hollywood comedy "Fraternity House," the directors picked him to play an Indian exchange student. He was told to wear glasses and sport a thick Indian accent like Apu, the convenience store owner in television's "The Simpsons." 

The 27-year-old of Asian Indian origin did his best. But he quickly realized that if he was going to be pigeonholed as the token Indian immigrant, he had better visit the country of his parents' birth and attend one of the growing number of acting schools in Mumbai, a sprawling metropolis of 17 million. 

But once here, he wanted to stay. Mumbai, the Big Apple and Tinseltown rolled into one city, is experiencing an economic boom that is fueling its fast-evolving film industry, the world's largest, with twice the movie output of Hollywood. 

"Initially, I came here to learn the culture. I never had any intentions of staying. I don't even speak Hindi," Shah said at the Actor Prepares school, surrounded by others of Indian descent from the United States, Britain and Canada. "But Bollywood has so much opportunity these days. I have just fallen in love with the Indian film industry." 

More than ever before, Bollywood is being flooded with cash from Indian investors who see the country's film industry as a money machine. The rise of the multiplex theater has led to a wider variety of films, with more socially relevant scripts that discard the overused Bollywood formula: a rambling, four-hour hodgepodge of twins separated at birth, rare blood diseases, wet sari scenes and lots and lots of singing and dancing in alpine meadows. More linear and socially conscious storylines are becoming popular, as are shorter movies. 

"The new trend in Bollywood is the death of the cliche," said Anupam Kher, an award-winning Bollywood actor who has been in more than 300 films. Three years ago, Kher opened Actor Prepares, one of many acting schools trying to improve the skills of young Indian actors. He also has announced plans to open a school in London that will teach foreigners, as well as those of Indian descent, thick Hindi dialects, yoga and the infamous Bollywood style of dancing (think petting a dog with one hand and screwing in a little bulb with the other, as described in the film "Bride and Prejudice"). 

"We used to have very few trained actors. We were a young country. Entertainment was the last thing on our agenda," Kher said between takes on a film set. But now, "the Indian economy is booming, and Bollywood is booming right along with it. There is a huge middle class who have traveled and watched foreign movies on cable or at an upscale multiplex. The consumer has awakened, and the quality is soaring." 

The result has been two unlikely Bollywood hits: "Taare Zameen Par," the story of a boy's struggle with dyslexia, and "Chak De! India," about a women's hockey team that overcomes sexism and ethnic adversity. 

The potential for profit has attracted Hollywood executives and foreign investors. Last month, financier George Soros paid $100 million for a stake in Reliance Entertainment, an Indian film production house. Last year, Sony Pictures Entertainment cut a multimillion-dollar investment deal with Indian entertainment conglomerate Eros International, which last year released "Saawariya," the first big-budget Hindi movie financed by Hollywood. 

The Walt Disney Co. recently increased its stake in India's UTV Software Communications, maker of last year's hit "The Namesake." 

Later this year, Johnny Depp is expected to star in the movie "Shantaram," directed by Mira Nair of "The Namesake" fame. Depp's presence in an Indian movie is widely perceived as a sign that Bollywood has gone global, and his expected visit to Mumbai in coming weeks has been a top story in newspapers. 

"It's just a fantastic moment to be in movies here, and the content is changing profoundly," said Ashim Ahluwalia, director of a new critically acclaimed documentary called "John & Jane," which depicts the surreal world of Indians who work in Mumbai call centers under American identities. "I'm not sure that was true even five or six years ago." 

Bollywood actors can learn the skills needed today at Kher's acting school, which is almost like walking onto the set of the 1980s American TV show "Fame." Young Indian actresses sport leg warmers and practice their lines while stretching, while handsome boys walk around in sunglasses, tank tops and jeans. 

"Learning good acting is hard work. We are focusing hard on teaching realism now. It's a big change," said Yashraj Jadhav, dean of Actor Prepares, who said he loves teaching method acting and noted that the days are gone when Bollywood filmed movies without scripts. 

Still, the school includes the classic Bollywood staples: singing, dancing and fighting. "We sing and dance in our daily lives, in our festivals and in our weddings. We will never completely lose our song and dance," Jadhav said, "even if our golden age is coming."


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## Bushroda

*Global luxury brands eyes Indian flavour*
9 Mar, 2008, 0039 hrs IST,Neha Dewan, TNN

NEW DELHI: The fascination with Brand India continues. This time its the leading international luxury brands such as, Pal Zileri, Lladro, Alberta Ferretti, Jean Paul Gaultier, Salvatore Ferragamo and Zegna that are making use of age-old mystical Indian elements to add glitter to their latest collections of haute couture. 

These big names in fashion have come up with stunning designs that feature stylish inspirations from India. Whats more inspiring is that these elements are creating a furore not just here but across the seven seas! 

While French fashion designer Jean Paul Gaultiers last haute couture line drew inspiration from the princes of Rajasthan, the design patterns on Hermes scarves also show off a visible Indian influence. Spanish luxury porcelain brand, Lladro, recently introduced its Spirit of India collection and Italian menswear luxury brand Pal Zileri created sherwanis and a bandhgala Guru to appeal to its clientele. 

Similarly, Italian fashion designer Alberta Ferretti has touched base with India by using tiny, dark patterns, mirror embroidery and built-in jewellery in her apparel and accessory designs. On the other hand, Italian luxury fashion maker Salvatore Ferragamo can design customised footwear using traditional jewellery elements! 

Most of these brands are not aiming only at the domestic market as their target clientele. Their approach is more wide-ranging, often one that takes the global market into its strategy. We are targeting the global market at large, in an attempt to meet our customers expectations to fulfil both their intellectual and cultural passions. 

Interestingly, figurines are not just restricted to Indian markets but are released world over. The response has been tremendous, says Sachin Jain, senior brand manager, Lladro India. The brands recent Spirit of India collection captures the luxurious attributes of Indian art and reflects the beauty of Indias most revered Gods and Goddesses like Goddess Lakshmi, Radha Krishna, and Lord Ganesha. 

Iconic fashion designer Alberta Ferretti confesses to the strong influence that Indian fashion has in the West. Fashion in India is a continuous source of impulses for my job too! Thats hardly surprising considering that India has already become one of the largest and progressive Asian nations known. 

Adarsh Amin, general manager, Pal Zileri India & new business development feels that there is an emerging demand for Indian cuts and designs not only among the Indian customers but also from other parts of the globe. India is a prestige market for us. The India inspired collection is integral to the Pal Zileri international collection as foreign trends are also influenced by the Indian fashion industry. 

Thats also a reason why the Indian collection is very well received by the customers in other parts of the globe, including London as they love the imperial British look, he says. That explains why the Italian menswear luxury brand has integrated elements inspired from Indian customs like Sherwanis in its Ceremonia Collection. 

Bandh Gala as an important element of Zegnas Ceremonial collection won a favourable response. Besides this, the lightness of fabric, their made-to-measure service and novelty in style and fabrics are other elements that show an inherent ability of the brand adapting to local needs perfectly. But its not just the local market that reaps the benefits, these Indian design elements hit off well globally too! 

Explains Shantanu Mukerji, country head, Zegna India, As India gains credence in the world economy, the designs and the inspiration for designs become all the more attractive. So as India becomes bigger, the interest in the economy will just become more and more visible. 

Luxury and India sure share a strong connection... the latest line-ups from luxury makers definitely bears testimony to that!


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## Bushroda

*Bligh is courting Bollywood*
News.com, Australia
March 09, 2008 12:00am

*PREMIER Anna Bligh will meet moviemakers in India next month in a bid to boost the number of Bollywood films shot on the Gold Coast.*

Ms Bligh, who on March 31 leaves on a 13-day trade mission to Japan, China and India, will hold talks at the Whistling Woods School of Film, Radio and Television in Mumbai. 

The international film school was created by renowned Indian director and producer Subhash Ghai in 2006, with the aim of producing a new generation of Asian film and television leaders.

Queensland's incentive scheme under the Pacific Film and Television Commission to encourage international moviemakers to come here will be high on on Ms Bligh's agenda.

This follows claims that two Bollywood films were lost to the Coast last year because of problems associated with the scheme.

Gold Coast Tourism spokesman Ben Pole confirmed talks had been conducted on two Bollywood productions last year but would not reveal more details because it might impact on future negotiations with the Indian producer.

"Late last year we hosted an Indian producer out here on the Gold Coast who was interested in using this as a location for one if not two films," Mr Pole said.

"We received feedback earlier this year they weren't bringing the first film. It was a low-budget film and they couldn't get the finances right for the Gold Coast. They may shoot it in India."

There is still a slight chance the second film will be shot here and tourism leaders are hopeful of holding further talks with the movie's producers this year.

Coast tourism leaders are prepared to offer accommodation and transport concessions to overseas film crews because of the exposure and benefits to the local economy from the productions.

Mr Pole expects the Coast to get major international exposure when the $10 million Indian film Singh Is King is released in August.

"It's the biggest Indian film shot on the Gold Coast. They used Q1 and a number of places in Broadbeach," he said.

The Government is unlikely to change its incentive scheme in the short term but tourism leaders believe Ms Bligh's overseas visit will be the first step in improving relations.


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## Bushroda

*Guess Who's Getting the Most Work Visas*
*Indian outsourcers top the list of companies bringing foreign workers to the U.S. on the H-1B program* 

by Moira Herbst 
Businessweek
This Issue March 17, 2008

Some critics are pushing to tighten the criteria for these visas Andrew Popper

The controversy over visas for high-skilled workers from abroad looks like it's about to get even hotter. 

The program for what are known as H-1B visas was originally set up to allow companies in the U.S. to import the best and brightest in technology, engineering, and other fields when such workers are in short supply in America. But data just released by the federal government show that offshore outsourcing firms, particularly from India, dominate the list of companies awarded H-1B visas in 2007. Indian outsourcers accounted for nearly 80% of the visa petitions approved last year for the top 10 participants in the program. The new data are sure to fuel criticism of the visa program from detractors such as Senators Chuck Grassley (R-Iowa) and Richard J. Durbin (D-Ill.). "These numbers should send a red flag to every lawmaker that the H-1B visa program is not working as it was intended," said Grassley in an e-mail. 

*REVOLVING DOOR?*

Infosys Technologies (INFY) and Wipro (WIT), both based in Bangalore, top the list of visa beneficiaries in 2007, with 4,559 and 2,567 approved visa petitions, respectively, according to data from the U.S. Citizenship & Immigration Services. Each visa allows the companies to bring one worker to the U.S., where they have substantial operations providing tech support and other services to corporations, complementing services provided from India. Overall, six of the top 10 visa recipients in 2007 are based in India; two others among the top 10, Cognizant Technology Solutions (CTSH) and UST Global, are headquartered in the U.S. but have most of their operations in India. 

Microsoft (MSFT) and Intel (INTC) are the only two traditional U.S. tech companies among the top 10. Microsoft received 959 visa petition approvals, or one fifth as many as Infosys, while Intel got 369. 

Critics such as Grassley and Durbin charge that the outsourcers are abusing the U.S. program. The work visas, they say, are supposed to be used to bolster the U.S. economy. The idea is that companies like Microsoft, Google (GOOG), or IBM (IBM) can use them to hire software programmers or computer scientists with rare skills, fostering innovation and improving competitiveness. Instead, critics say, companies such as Infosys and Wipro are undermining the American economy by wiping out jobs. The companies bring low-cost workers to the U.S., train them in the offices of U.S. clients, and then rotate them back home after a year or two so they can provide tech support and other services from abroad. "Valuable high-tech jobs are on a one-way superhighway overseas," said Durbin in an e-mail. 

A clash is likely in the coming months. Durbin and Grassley are pushing for more restrictions in the program, even as tech companies are advocating for a sharp increase in the number of visas handed out each year. The senators want to tighten the program's criteria, by requiring participating companies to try to hire American workers first and to pledge that visa workers will not displace American workers. U.S. tech companies, meanwhile, want Congress to increase the visa cap from 65,000 a year to at least 115,000. 

The offshore outsourcers deny they're abusing the program. The visa program is open to any company with U.S. operations, no matter where its headquarters. More important, the outsourcers say they're helping U.S. companies stay competitive, allowing them to reduce costs and concentrate on their core competencies. "The Indian IT industry has helped improve the competitiveness of our customers in the U.S.," said Som Mittal, president of Nasscom, the trade group that represents the Indian companies. He added that Nasscom's members are "strong upholders" of regulations in client countries. 

Infosys and Wipro declined to respond to criticisms they are misusing the program. In the past, they've said the jobs they fill in the U.S. are higher skilled than those in India, involving sales and custom software development. Infosys has about 9,000 workers in the U.S., including 7,500 on H-1B visas. (It has 88,000 workers worldwide.) 

*GROWING DIFFERENCES*

Tech companies say more visas are necessary so the U.S. can attract top talent. Bill Gates is scheduled to testify on Capitol Hill on Mar. 12 about how to keep the country competitive. He is expected to repeat the points he made a year ago in Congress, when he argued for more H-1Bs and green cards. "It makes no sense," he said, "to tell well-trained, highly skilled individualsmany of whom are educated at our top colleges and universitiesthat the U.S. does not welcome or value them." 

Differences are growing between the U.S. tech companies and the outsourcing outfits. U.S. companies often try to keep visa workers in the country and help them become American citizens, while the outsourcers typically employ visa workers in the U.S. on a temporary basis. Some American tech companies say they may support reforms in the visa program to crack down on any abuse. "If Congress decides the visas are being used in ways that don't benefit the economy, there should be additional enforcement provisions or measures," said Jack Krumholtz, Microsoft's chief lobbyist. 

Many U.S. workers oppose any expansion of the program. They say H-1Bs let companies hire cheap workers from abroad, rather than Americans. They say the timing for expansion couldn't be worse, with the economy faltering. "Foreign workers are coming into the U.S., even though Americans need jobs," says Kim Berry, president of the worker advocacy group Programmers Guild. "It turns the intent of the H-1B program upside down."


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## Bushroda

*India&#8217;s TCS Introduces Hybrid SaaS Model *
*A winning balance of in-house, outsourced and services-based resources*

by Ann All 
IT Business Edge, KY
March 7, 2008 at 11:13 am

Back in January, I blogged about the impact that software-as-a-service could have on outsourcing. Some folks, including Gartner, contend that SaaS gives companies &#8220;a viable alternative&#8221; to relationships with traditional outsourcing providers.

Indeed, Indian blogger Sramana Mitra wrote about an Indian company whose 150 employees were laid off after it was purchased by a Silicon Valley company that provided the same lead generation and marketing research services via a SaaS model.

Similarly, THINKStrategies&#8217; Jeff Kaplan notes that SaaS could boost the efficiency of outsourcing providers by reducing their reliance on manual labor.

So it&#8217;s less than a huge surprise that Tata Consultancy Services, India&#8217;s largest &#8212; and one of its smartest &#8212; service providers, is introducing a hybrid SaaS/services model that it calls IT-as-a-service.

The product, which combines hardware, software and underlying network infrastructure, is aimed at local SMBs, an &#8220;underserved&#8221; market segment that could be worth up to $9 billion a year, reports The Economic Times.

TCS has been tweaking the business model for about a year and expects to move it to other geographies should it prove successful in India. It hopes to find new clients in industries not typically targeted by services providers, such as real estate. Says the company&#8217;s COO:

_The business won&#8217;t be people-intensive because the solutions and process are standardized. This will break the linearity of revenues&#8230; The opportunity size is very large but the problem is it is very fragmented. In the first year, our focus will be to get the right customers and the delivery model. We will go to other countries but not in a hurry.​_TCS has already signed 10 clients for ITaaS, which is expected to go live in April, according to the article. It will form partnerships with other vendors for hardware, connectivity and other areas outside of its core expertise.

TCS is rolling out the new business unit just as it begins to feel some clear financial repercussions from the slowing U.S. economy. Two of its 10 largest clents,i both Wall Street banks, canceled projects that had been slated to begin this quarter, reports Times Online. The article also quotes Infosys&#8217; CEO as saying some of its U.S. and European bank clients are freezing budgets and/or looking to move work to lower-cost countries.

Though TCS did not say how much the canceled projects would affect its bottom line, the company&#8217;s 10 largest clients account for nearly a third of its revenues and more than half of its earnings result from its contracts with U.S. companies.


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## Bushroda

*Jet-pace growth for Indian tourism*
By Raja M 

MUMBAI - India's recent federal budget offered little to the country's US$12 billion tourism industry, but its practitioners could take comfort from the immediately preceding annual Economic Survey for 2007-08, which predicted continued bright prospects after more than 25% growth over the previous year. 

Last year's record earnings could be merely scratching the surface of a gold mine if India backs up its "Incredible India!" promotional campaign - which won the Pacific Asia Travel Association (PATA) Gold Award last year - with better tourist infrastructure and if the government capitalizes on the country earning the coveted world number one top travel destination ranking in the latest Conde Nast Traveller UK awards. 

India jumped ahead of Italy, Thailand, Australia and New Zealand in the world's top five most-preferred tourist destinations from 

fourth a year earlier and 10th in 2004. A Lonely Planet survey of 167 countries also ranks India among the world's top five most popular destinations. 

Last financial year, when more than 5 million tourists arrived, was the fourth running that India's growth in arrivals picked up pace, with an increase of 13% from 2005-06, according to governmental data. India expects to host 6 million tourists in 2007 and 10 million by 2010. 

"Tourism has high potential for generating both income and employment across the country," President Pratibha Devsingh Patil told Parliament on February 25. "The 'Incredible India' campaign has given a thrust to tourism in India, with foreign tourist arrivals touching 5 million for the first time. Foreign exchange earnings from tourism touched US$12 billion in 2007." 

Businesses at the tourism frontline are seeing more than just an increase in numbers. 

"Compared with five years ago, we are seeing more arrivals of higher-spending tourists," says Suresh Pundir, a hotelier in the north Indian tourist hot-spot state of Uttarakhand, at present host to an international yoga conference in the Himalayan town of Rishikesh. His guests are also coming from an increasingly diverse range of countries. 

"Earlier we primarily had tourists from the USA, UK and Israel, but now there is a sudden huge increase in visitors from Russia, Brazil, South Korea and France," he said. At the same time, they are seeing a greater variety of experience, looking for adventure such as white-water rafting, trekking and mountaineering. 

India is also this month (March 21-24) hosting the second international conference on "responsible tourism", in Cochin, in the southern state of Kerala, with 400 delegates and speakers from 20 countries expected to attend. The first conference was held in Cape Town, South Africa, in 2002. The conference aims to create greater involvement in making the industry sustainable in terms of local economies. 

India is sharing in a broader travel boom, with the region expected to lead world tourism growth this year, according to the World Travel Trends Report last month from the ITB Berlin travel fair and researcher IPK International. China, with the Beijing Summer Olympic Games, and India are touted to lead the way. 

The World Travel Trends Report says Asia-Pacific continues to lead expansion of the world's tourism trade, with international arrivals in the region increasing by over 10% in 2007, following an 8% growth in 2006. 

Outbound tourism is also buoyant, according to Asian Travel Monitor, with China, South Korea, Taiwan, Singapore, India, Malaysia and Thailand scoring over 70 million outbound trips combined, with a total annual spending of over $147 billion. 

The MasterCard Worldwide Index of Travel confirms that Asian-Pacific outbound traffic will continue soaring, with an estimated 79.5 million outbound tourists in the next six months. More than 25% of the region's outbound tourists will be from the Chinese mainland, according to MasterCard, which estimates a 12.4% year-on-year increase to 21.6 million outbound Chinese tourists from January to June 2008. 

A stronger rupee, which has appreciated more than 10% against the US dollar in the past year, is having an impact, making travel abroad cheaper for Indians while inbound tourist operators are reporting a drop in business as the country becomes a more expensive destination for overseas visitors. 

India led growth in visitor numbers to the US in 2006-7, with a 45% increase on a year earlier, ahead of China (26%), Mexico (18%) and the Middle East (18%). 

India's growing economy and increased affluence are also encouraging domestic tourism, which is growing 25% annually. Combined with the growing number of overseas visitors, that is adding to the strain on the country's infrastructure. Industry sources, for example, estimate that India has a shortage of 100,000 hotel rooms. 

Neither did the federal budget grant the demand for the hospitality industry to be given infrastructure status that would enable easier flow of investments. 

Even so, Finance Minister Palaniappan Chidambaram disappointed tourism-related businesses when his February 29 budget largely ignored the industry while offering exporters government sops to offset the impact on them of the strengthening rupee. 

The industry, according to the India's Tourism Ministry, employs over 42 million people and contributes 6.11% of India's gross domestic product.


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## Bushroda

*Indian economy on track for higher growth * 
By Joseph George 
Emirates Business 24/7, United Arab Emirates
Thursday, March 6 , 2008 

The Indian economy seems poised to take off on a higher growth path supported by rising foreign exchange reserves, a booming capital market and a rapid rise in foreign direct investment, according to a report by the research and consultancy firm Deloitte Haskins and Sells.

With parliamentary elections lined up next year, Indias Finance Minister P Chidambaram unveiled on February 29 what is being termed a populist budget that provided for a loan waiver of Rs500 billion (Dh46bn) to small farmers and Rs100bn debt settlement scheme for other farmers.

The budget has raised education spending by 20 per cent to Rs344bn and health spending by 15 per cent. Defence expenditure continued to squeeze spending elsewhere, with the militarys budget expanding by 10 per cent to Rs1.056 trillion from Rs960bn last year. The budget has earmarked a total planned spending for 2008-2009 at Rs2.4trn and non-planned spending at Rs5.07trn.

While many have praised the budgets focus on outcomes instead of outlays, several economists and industry leaders have expressed disappointment their hopes for attention to be paid to Indias dilapidated physical infrastructure were not adequately addressed and have criticised the loan waiver as setting a bad precedent.

The proposal for a tax on commodities future transactions has been slammed as it would make the system globally uncompetitive and would make it difficult to use the transactions for risk management.

The Indian economys growth has been impressive. It has joined the elite club of 12 countries with $1trn (Dh3.67trn) economy. 

FDI inflows have jumped by almost three times to $15.7bn in 2006-2007 as compared to $5.5bn in 2005-2006. Indias National Stock Exchange (NSE) ranks first in the stock futures trade in the world. The number of companies with a market capitalisation of $1bn or more has increased 40 per cent to a total of 209 at the end of November 2007 compared to 148 at end of 2006.

The fiscal deficit in 2008-2009 is being projected at 2.5 per cent of GDP along with a revenue deficit of one per cent of GDP. The government, however, seems confident of GDP growth of 8.8 per cent in 2007-2008.

According to the Deloitte analysis, in the recently released Budget 2008: Analysis and Commentary, the GDP growth for 2007-2008 represents a deceleration from the high growth of 9.4 per cent and 9.6 per cent during the past two years. Last year saw growth slowing across most sectors, including manufacturing and agriculture.

The reports authors expressed concern that with the Indian economy globalising rapidly, it can no longer remain totally immune to the cyclical nature of the world economy, especially the slowing down of the US economy and the upheavals in the global financial markets. The appreciation of the rupee, inflationary pressures caused by rising prices and the large capital inflows in excess of the current account deficit are also worrying. 

International developments continue to have a direct impact on several key sectors of the Indian economy. There has been a robust increase in foreign exchange reserves, moderate levels of current account deficit, changing composition of capital inflows and sustainable external debt with long-term maturity profile. 

All of these collectively indicate a strong, stable and vibrant state of the external sector. The impact of external events on the Indian economy can also be gauged from the impact of such events on the countrys financial markets, said the Deloitte report.

There has also been a slight decline in production in the manufacturing sector in 2007-2008.

The appreciation of the rupee against the US dollar has affected the production of the textiles industry and the export performance of Indian textiles continue to lag substantially behind China in the post-quota era in terms of rate of growth of exports and share in world textile exports. 

Growth rates in the agricultural sector fell sharply during 2007-2008 (at 2.6 per cent) while industry and services maintained their moderate growth momentum.


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## Bushroda

Beating Indias downside
By Nick Ferguson
Finance Asia, Hong Kong
7 March 2008 

*A new fund from ICICI Prudential offers equity upside on the Nifty index as well as downside protection.* 

ICICI Prudential Asset Management launched a first-of-its-kind equity-linked fund in January that offers Indian investors significant upside participation and very little downside risk.

The Fixed Maturity Plan  Series 33 is linked to the National Stock Exchanges Nifty index, which comprises 50 leading stocks traded on the exchange, and is the first fixed-maturity fund to provide exposure to equity markets.

The idea is to provide the low risk of a typical fixed income-style product, but with the juiced-up returns that equity investors want. In the long run investors are probably better off buying the index directly, but, with a three-year maturity and downside protection, this product is aimed at investors who are dabbling in stocks for the first time  an attempt to tease Indian savings away from gold and property. 

The Niftys history suggests why nervous investors might worry. Looking back at hypothetical three-year investments in the index since its launch in July 1990 shows that one-in-four ended with negative returns. The potential upside, however, helps to balance those fears  when the three-year period ended in positive territory it averaged a 17.4% yearly rate of return.

Corporate earnings are forecast to grow at up to 20%, which should mean that even a US economic slowdown will not be catastrophic for Indian companies profits  particularly as the economy does not rely heavily on exports. Falling interest rates also help to make equities more attractive and some big-ticket offerings scheduled for 2008 could also attract more local investors to the market, which should create greater stability. Reliance Power has already completed a record IPO and UTI, State Bank of India and Oil India are all slated to issue new shares as well.



Downside risks do exist, say analysts. Most worry about the effect of a possible recession in the US, although the January rate cuts have tempered these fears and are generally thought to be positive for emerging markets. A populist budget could be expensive and hinder the governments attempts to solve its finances, threatening another sovereign downgrade that would be bad news for the market in general.

Back-tested data for the funds performance, using the indexs full 17-year history, shows how the strategy offers the opportunity to capitalise if the bullish view prevails, but also protects against a bearish outcome. During bull markets since 1990 the fund did a good job of tracking the Nifty  for three-year periods when the index has returned between 15% and 25% a year, the fund has averaged 19.5% compared to 19.9% for the index. And when Nifty has given negative returns the fund has never given negative returns  for funds that closed during the bearish three-year period starting in May 2004, the indexs worst loss was 16.4%, compared to a 1% gain for the fund.

The indicative coupon is calculated based on the initial value (the average of the Nifty value at the start of the first three months) against the closing value (the average of the Nifty value at the end of the last three months). The maximum upside is capped at 200% of the start level.

To achieve the equity upside the fund is invested mostly in equity-linked notes. Up to 80% can be invested in these products, but the manager says that it expects to limit the allocation to 65%. The manager is restricted to investing no more than 50% in derivatives or securitised debt. Although the product aims to deliver at least 100% at maturity, there is no assurance that investors will get all of their capital back.

The minimum investment amount is just Rs5,000 ($127) and there is a 5% fee for early redemption. Investors can sell the fund through a repurchase facility provided at six-monthly intervals.


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## Bushroda

*India Dominates Billionaires List*
Wall Street Journal
March 6, 2008, 12:21 pm

The most surprising news in Forbess latest Global Billionaire list isnt that Bill Gates has been toppled as the worlds richest man. We knew that was going to happen months ago.

No, the biggest surprise is the rise of the Indian rich  four of the top eight billionaires in the world are from India. Topping the ranks is steel tycoon Lakshmi Mittal, whose worth Forbes puts at $45 billion. Next up are the Ambani brothers, Mukesh and Anil, with $43 billion and $42 billion repsectively, largely from petrochemicals. Rounding out the list is KP Singh, the real-estate magnate, at $30 billion.

This is an encouraging sign for the Indian economy. It shows that a country long known for brutal poverty can now compete with the U.S. and others in creating personal wealth. The Merrill Lynch/Cap Gemini report says that Indias population of millionaires grew 20% last year, to about 100,000. That rate of growth was more than twice the growth of millionaires in the U.S.

This proves a point Ive made before about the future of global wealth  that a greater and greater share of the worlds millionaires and billionaires will come from India, China, Brazil, and Russia. Thats not to say the U.S. wont keep producing rich people of its own. Rather, its that the most rapid growth, and the billionaire market share, will move to emerging markets.

Clearly, Indian wealth has a different flavor than American wealth. All four of the Indian billionaires inherited substantial fortunes, suggesting that in India, wealth is still determined more by your parents than by your career or your ideas. While thats changing, the number of large fortunes made by purely self-made entrepreneurs still lags far behind the U.S. And many of the biggest fortunes in India come from old-fashioned industries such as oil, steel and real estate.

Yet over time, I wouldnt be surprised if an Indian  or a Russian or a Mexican  takes over Warren Buffetts spot atop the list.


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## Neo

* Power outages paralysed Delhi for hours over weekend ​* 
Tuesday, March 11, 2008

NEW DELHI: Two 12-hour-long power blackouts shut factories and businesses, disrupted trains and left millions of people without power in and around Indias capital over the weekend.

The outages on Friday and Sunday in New Delhi and several neighbouring states were blamed on heavy fog and pollution that settled on transmission lines, tripping them when their insulation proved insufficient to handle the conditions, said Shailendra Dubey, chief engineer of the state-run Uttar Pradesh Power Corporation.

Dozens of trains came to a standstill or ran behind schedule, said Amrish Saxena, a railroad official in Lucknow, the capital of Uttar Pradesh state. Federal Power Secretary Anil Razdan ordered replacement of conventional insulators with polymer insulators in transmission lines to prevent collapse of the power supply in the region, the Hindustan Times newspaper reported.

India faces regular power shortages, particularly in the hot summers when demand rises, sometimes outstripping supply by 25 per cent. Despite more than a decade of rapid economic growth, Indias infrastructure still lags far behind, particularly the energy sector needed to fuel the economy, raising concerns it could slow further development.

India needs to build hundreds of new power plants over the next five years to end the massive electricity shortages that threaten the countrys rapid economic growth rate. The government has set a target of generating at least 200,000 megawatts of power by 2012. Currently, the country has a total capacity to produce 130,000 megawatts.

The power sector in the country is mostly run by state governments, which have been slow in adding new capacities because of lack of funds. Although the sector was opened to private capital more than a decade ago, few companies have invested in building new plants because of regulatory bottlenecks.

Power outages paralysed Delhi for hours over weekend


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## Neo

*Indias car sales slow sharply ahead of budget ​*
NEW DELHI: Indias domestic car sales grew a sluggish 2.3 percent in February from a year earlier, far slower than in previous months, as customers put off purchases expecting a cut in taxes in the federal budget. 

In the month, 94,756 cars were sold, up from 92,618 in February 2007, data released by the Society of Indian Automobile Manufacturers (SIAM) on Monday showed. 

The industry had witnessed muted growth in January and February, primarily due to postponement of purchases by consumers in anticipation of sops extended for the industry, brokerage Prabhudas Lilladher wrote in a note to investors. In both December and January, annual growth stood at about 9 percent. 

On Feb. 29, Finance Minister Palaniappan Chidambaram reduced the excise duty on small cars, two-wheelers and buses to 12 percent from 16 percent in his budget speech. That prompted automakers to cut prices on some models. 
 
Small cars less than 4 metres in length make up nearly three-quarters of all cars sold in India. 

Top carmaker Maruti Suzuki India Ltd, which is 54.2 percent owned by Japans Suzuki Motor Ltd, saw domestic car sales expand 2.2 percent on the year to 51,762 units. 

We expect strong volume growth March 2008 onwards (for Maruti), boosted by the excise duty reduction, brokerage Kotak Securities wrote in a note. 

Analysts added that a further budget proposal to raise the income tax threshold, and an expected salary increase for government staff by March-end would leave people with more disposible income and spur demand, especially for small cars. 

The local unit of South Koreas Hyundai Motor Co, the second-largest carmaker in India, saw sales dip 5.5 percent to 14,591 units, while those at No. 3 Tata Motors Ltd fell 16 percent to 13,451 units. Sales at Tata Motors continued to be hurt by a lack of new models to replace its Indica compact car and Indigo sedan. The fall in February follows a 13.6 percent decline seen in January. Motorcyle sales continued to sag in the worlds largest market after China, as tight financing weighed. Firms sold 425,089 bikes in February, 17.7 percent less than in the same month a year ago. reuters

Daily Times - Leading News Resource of Pakistan


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## Neo

*Indias economic miracle losing its lustre: analysts​*
NEW DELHI: Booming India is reeling from a flurry of bad financial headlines, suggesting the outlook for the worlds second fastest-growing major economy is not as rosy as it was, analysts say.

Economic growth is losing pace and inflation is on the rise, meaning Indias central bank  which has hiked interest rates nine times since 2004 to tame prices  has little room to loosen monetary policy to spur activity, they say.

The picture of very strong growth and low inflation in India is starting to give way to one of slowing growth and rising inflation, said Robert Prior-Wandesforde, an economist at HSBC in Singapore.

Last Friday, inflation in Asias third-largest economy hit a nearly 10-month high of 5.02 percent, pushing through the central banks ceiling of five percent for this fiscal year.

Adding to the gloom has been a 25 percent slide since January 10 in Indias benchmark Sensex share index  whose 47 percent jump last year made it one of the worlds top performers  as foreign investors have bailed out.

With the (global) economic turbulence, youre seeing a lot of risk aversion, said Amitabh Chakraborty, equities president of Mumbais Religare Securities.

Also, the Congress-led government, which faces general elections in little over a year, is storing up fiscal trouble with its 15-billion-dollar loan bailout for farmers, big civil service pay hikes and tax cuts announced late last month in its populist, poll-geared budget, economists say.

We think the fiscal deficit will increase due to the spending pressures, said Goldman Sachs economist Tushar Poddar.

Economic growth is forecast by the government to slow to 8.8 percent in this fiscal year to March 31, 2008 from 9.6 percent last year  the first deceleration in three years.

Some economists project growth could fall to as low as seven percent next year due to the US-led global slowdown, aggressive monetary tightening and a sharp rise in the rupees value against the dollar, which has hit exports.

Seven percent growth would still be enviable by anemic Western levels but is too low for India, where analysts say double-digit expansion is needed to help hundreds of millions escape a grim poverty trap.

The stock markets slide has also cast a cloud over plans by firms to raise a projected 15 billion dollars in IPOs this year  nearly double the record 8.3 billion raised in 2007.

Already, two high-profile firms have pulled their IPOs, including Emaar MGF  a joint venture of Dubais Emaar, the worlds biggest property developer - which abandoned its bid to raise 1.6 billion dollars, citing indications of a US recession and global meltdown.

The IPOs are key to expansion as much of the funds raised would be invested in plant and machinery, and improvements in Indias dilapidated infrastructure such as its potholed roads, shabby ports and unreliable power.

Economists as major growth constraints routinely cite lengthy blackouts even in big metropolitan centres such as New Delhi.

While Indias economy is better insulated than many other Asian nations from the global slowdown because it is not so heavily dependent on exports, it is not immune to the chill financial headwinds, analysts say.

A lot of economic growth has been driven by risk capital, especially from the United States, which is slowing as foreign investors repatriate funds amid fears of a US recession, said Religares Chakraborty.

For the time being, the government and central bank are making checking inflation their priority.

The central bank and the government are signalling the risk to inflation is a bigger worry than the risk to growth, said JP Morgan analyst Rajeev Malik.

Soaring world commodity and crude oil prices have alarmed the central bank while the government sees cutting inflation as crucial to its political fate, analysts say.

Inflation has been blamed as a key factor in several state poll drubbings for Congress, which owes its 2004 general election win to support from Indias poor masses  hardest hit by price rises.

Prime Minister Manmohan Singh last month called inflation the cruellest tax as it hits the poor the hardest. afp

Daily Times - Leading News Resource of Pakistan


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## Bushroda

*Examining India*
By Peter Walker for CNN
March 7, 2008 -- Updated 0310 GMT (1110 HKT)

*LONDON, England (CNN)* -- Amid all the talk about China's recent transformation, it's sometimes easy to forget that Asia is home to another fast-emerging economic superpower -- India.


*India has a strong business education tradition*

The country's rapid development has been matched by an explosion in top quality business education, marked most recently by the appearance of the Hyderabad-based Indian Business School in the top 20 of the Financial Times ranking of leading global MBAs.

A key part of India's development of business education has been close ties with Britain, the country's former colonial ruler and home to more than a million people of Indian origin, not to mention a partner in bilateral trade worth nearly $15 billion last year.

Many UK schools, having long ed out student exchanges and the like with India, are now taking links a step further with special business centers dedicated to researching and furthering economic ties with India.

The latest of these involve the UK's most venerable universities, Oxford and Cambridge, both of which have historic ties to India.

Oxford has just announced a new India Business Center and professorship in Indian Business Studies, based at its highly-rated Saïd Business School and funded by a $15 million donation from Indian tycoon Ajit Gulabchand, chairman of the Hindustan Construction company.

Oxford University's vice chancellor -- a position equivalent to dean -- Dr John Hood, said India had a lot of valuable lessons for the world.

"The primary objective of this research center is to learn from India's business success," he said in New Delhi, where the new center was announced.

"A clear understanding of the issues faced by India and their innovative solutions, as India transitions from poverty to prosperity, will form a guide to future generations of countries attempting similar transitions."

Oxford, he noted, had a long tradition of links with India, with the first students from that country coming to study at the university in 1871.

Professor Colin Mayer, Dean of the Saïd school, said the new center would also be about teaching as well as research, and aimed to develop a series of executive education programs to be taught in India.

Also just announced is a new professorship of Indian business and enterprise to be established at Judge Business School, part of Cambridge University.

This is being financed with a $6 million bequest by the Indian government to mark the centenary of the arrival at Cambridge of Pandit Jawaharlal Nehru, later India's first post-independence prime minister, who studied for a degree in natural sciences.

The professorship -- the first incumbent is still being chosen -- is intended to assist closer links between India and other international economies, and to promote understanding of the country.

"India and the UK are on the path to a healthy bilateral economic and commercial relationship, arising from a common democratic outlook in both the countries," said Professor Arnoud De Meyer, director of the judge school.


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## Bushroda

*Where is the focus in IT education?*
Roger B Silberberg 
MyADSL, South Africa
11 March, 2008 

*Good IT education is essential if a country is to create jobs, be internationally competitive, and prosper.*

I would like to question the focus in South Africa on skills training and education in the field of information and knowledge management.

Strongly developed capacity in these technologies is clearly essential if a country is to create jobs, be internationally competitive, and prosper. A clear example is given by industry in India, where its considerable success and growth over the past years is attributed, according to Business Report, to their ability to "leverage white collar skills in the knowledge economy to have a global impact on blue collar manufacturing". 

This has been achieved chiefly through mastery of the global knowledge economy and the combination of value and volume, skills and scale that characterises their industrial operations. Information technology, engineering, design and manufacturing are integrated as close cousins to produce, for example, the new Tata Nano car at under R20 000.

Clearly this is a winning formula.

A recent survey conducted by Isett Seta of some 700 organisations in the IT sector provides illuminating insight. These companies identified some 1450 candidates requiring end user computing-type training. The organisations also identified some 1200 candidates at CEO, CIO, programme and project manager, business development manager and business analyst level that required educational intervention. 

These latter candidates are all in highly skilled and senior management roles. In other words, the perceived need for educational intervention at senior management level is numerically almost as high as it is at more junior levels, and is proportionally far higher, given the much smaller population at that level. In contrast, the survey identified 80 candidates in the "software engineering" category.

Other interesting figures derive from an IBM survey. This revealed that fully 84% of CIOs internationally believed that information technology was significantly and profoundly transforming their industries, yet only 16% believed that their company was taking full advantage of its potential. No survey has been conducted locally, but it is doubtful that the results would be very different.

Taken together, these figures suggest that while the need for adopting transformational information technologies is recognised and is accepted at senior management level, it is not happening in practice. Also, while it is the decisions made at senior management level that will ultimately determine if the organisation takes full advantage of the potential of information management technology, there is a substantial and quantified need for management education at that level. Can optimal decisions be made in this environment?

Yet, when the weaknesses of our knowledge economy are reported, most publications and media stress the need for specific technical computer skills and computer literacy. While it cannot be denied that these skills are essential in a modern economy, and that the population at large needs to be comfortable with interacting with information devices, it is clear that growth and the ability to compete internationally and boost productivity will come from organisations that have the managerial capacity to embrace fully 21st century information technologies. 

This is a management issue. What educational paths are open to management that will provide them with the understanding and knowledge to direct an organisation that is critically dependent on its information resources? If the Indian example described above is representative, this cannot be achieved through short courses and seminars by visiting experts and consultants. Rather, a radical revision of management educational programmes is overdue, much as a radical revision of business processes is required to keep business competitive.

The conclusion is inescapable; much more focus must be given to upgrading senior management with regard to understanding, accepting and internalising the opportunities offered by emerging information management technologies.

Newly-designed international qualifications are coming on stream to address this need, and the writer would value readers input and comment.


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## Bushroda

*Leisure Boating Business Set for a Boom in India* 
*Construction of marinas to give boost to big-spending tourists *

Armstrong Vaz (armie)
OhmyNews International, South Korea
2008-03-12 11:20 (KST) 

Queen Mary 2 set sail on its 23-night cruising journey from Sydney to Dubai, on Feb. 26 and will be visiting Yokohama, Hong Kong, Bangkok, Singapore and Goa with a night's stay in Dubai. 

The fare pegged at US$7,899 per person twin-share is a figure well above the reach of the rich Indian a few years ago. But things are changing in India, with a booming economy, Indians keen in splurging their extra fads of cash have varied options in the holiday market and cruising is one of them.

For many Indians, owning a luxury yacht is one dream they cherish. Jeriton Dias, an Indian from western state of Goa is one of them. He is sailing on Queen Mary 2. He has not bought a cruising holiday but he is one of the 1,200 odd staff. For him the cruising holiday does not entice him and his family anymore. He is looking to own a yacht, both for leisure and business option and park it in Goa and explore more of the rural Goa.

Owning a luxury yacht and parking it in a designated marina in Indian waters is a dream most Indians look forward to. Now question arises whether India has sufficient marinas? Optimistic Indians have dreams for leisure boating in India.

But is India ready for a leisure boating boom? Can a country, which does not have any marinas along its coast, rival to overtake up market destinations like French Riviera?

In the absence of marinas, parking can be a nightmare for yacht owners in India and Goa is one of them.

But, the leisure boating industry is set to change if entrepreneur's plans to set up marinas in Goa and on the Konkan coast get the mandatory environmental green signals from the government.

One of them is a business tycoon from Goa and a keen water sports lover, Umaji V Chowgule, MD, Goa Yacht Haven Pvt Ltd. Chowgule, whose family business interests range from mining to brewing the popular Arlem beer in Goa, is planning to build a 300-boat marina in Sancoale village, in Mormugao Taluka, at the mouth of the Zuari river in Goa with an investment of Rs 100 crore (US$2.5 million). 

The construction of the marina is set to give Goa's aim to get high-spending foreign tourists a shot in the arm, which the tourism authorities and ministers have trying to push albeit unsuccessfully over the last few years. Goa, as of now, as a tourist destination, has been a favourite haunt for back packers and low and middle budget foreign tourists.

The berthing facility for marinas is also likely to create around 1,000 to 2,000 jobs directly or indirectly related to industry.

A marina is a berth's facility where boats are anchored and are safe from mischief mongers and from the uncertainties of the weather. The marina can also provide facilities like fuel stations, boat servicing, restaurants, bars and other recreational activities.

"If you need to protect the leisure boat in the sea along Mumbai's coast, you need to construct a marina. We need to construct amenities like marinas so that people can sail and even stay away from the coast for a weekend," says Robin Walters, chairman of Walcon Marine Ltd, a worldwide expert in marina building, in a report in the Times of India. And he also allays the fears of environmental degradation due to the dredging operations.

"The concrete piles erected for a marina have adequate gaps for the water to flow beneath. In fact, in the UK, we have an award for the best marina every year," said Walters.

The Dubai International Boat Show (DIBS), which is into its sixteenth year and will be staged this year from March 11 to 15, at Dubai International Marine Club (DIMC), Mina Seyahi and is a place where rich Indians buy their yacht. 

"Dubai is a leading marine hub in the Middle East for the rich Arabs from the region to buy yachts. Market analysts in the leisure yachts industry point out that the GCC Arabs are the biggest buyers of the yachts in the world. And all the yachts are not parked in their home countries, but in holiday destinations in the Mediterranean countries. But new buyers are emerging from India and Russia," says Helen Wyand, project director, DIBS.

"Indians buying yachts at the DIBS are increasing. Those buying are the rich Indians based in Dubai and also from India who fly in especially for the show with a range of choices available for placing orders in Dubai for the luxury yachts," she said. 

A luxury yacht, which is made according to customer specifications, takes eight months to one year to be delivered and the most expensive one costs five million euros.

In the next five years, the leisure boating industry will be worth at least US$1 billion (around Rs4,000 crore) in India, says a report in the livemint.com of The Wall Street journal.

"Elsewhere, entrepreneur Andrew Farkas, founder and CEO of Island global Yachting, is keen on developing a worldwide network of luxury marinas that will change the way yachtsmen and their crew experience the world's most sough-after yachting destinations from the Caribbean to the Middle East," says a report in Yachts Emirates.

How India with its 7,600 km of virgin coastline fits into his plans remains to be seen, but one thing is sure with the projected sales figures of Rs150 crore (US$3.75 million) this year - development of marina, along the coastline, is an urgent necessity to give the industry a kick start it is looking for.


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## Bushroda

*IIM-A grad gets Rs1.44 cr job offer, sets new record*
Jumana Shah 
Wednesday, March 12, 2008 03:32 IST 

AHMEDABAD: Overriding speculation about the sub-prime crisis trickling into the hiring pattern of MNCs in India, a student at the Indian Institute of Management, Ahmedabad, has been offered a record salary of Rs1.44 crore by an international finance corporate for a location abroad. This beats the Rs1.36 crore offer posted by IIM, Calcutta, early this week. 

The highest domestic package has gone up to Rs70 lakh  up by 17% from Rs60 lakh last year and the average salaries have increased by a whopping 30% from Rs13.7 lakh to Rs17.85 lakhs. 

The average international salary is $119,000  again a significant jump from the previous year. 

The most striking trend in what students opted for this year reiterates the fact that the future is in the emerging economies of Asia and Europe. Of the post-graduate programme batch of 255 students, 87% have taken up offers in India and other Asian countries. 

The increase in the number of students preferring placements in the Asia Pacific region as compared to Europe and the US is indicative of the balance of economic power shifting from the West to the East. Despite the subprime crisis and slowdown in the US economy, the placement at IIM-A has not been impacted, said IIM-A director Samir Barua. 

At a time when the economic crisis in the US is fuelled by the realty sector, real estate players made a high-profile entry into the recruiting list at IIM-A. Lodha Group, DLF and JLL group recruited three students each for domestic positions. 

While the director and professors maintained there was no discernible impact of the US meltdown, students conceded that the number of students picked up by international investment banks has decreased and they are indeed being cautious. 

*Going up, up, up* 

The highest salary of Rs1.44 crore ($360,000) has been offered to only one student by an international finance company

Several students were offered between $280,000 and $300,000 for international positions

Highest domestic salary is Rs70 lakh

Consulting remains the top draw for students with over 30 of the batch placed in the sector

11 students opted out of the placement process to start their own ventures

112 students participated in the lateral placements; average salary offered increased by 13% from Rs16.2 lakh to Rs 8.3 lakh


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## Bushroda

*Cool and green in an Indian architectural desert*
By Dominic Whiting, Asia property correspondent
Guardian, UK
Tuesday March 11 2008 

HONG KONG, March 11 (Reuters) - In a sizzling property market, architect Manit Rastogi at MD Morphogenesis has created some of India's coolest buildings, using recycled water, wells, wind tunnels and sun screens to chill work places and slash energy costs.

Thanks to his designs, students in a Jaipur fashion school mill around classrooms cooled to around 25 degrees Celsius (77 F) without air conditioners, while the desert bakes at nearly double that temperature outside.

And guests at the Swabhumi Hotel in Kolkata feel a breeze as they step out of a building resembling sliced mushrooms fused together, and inspired by the way trees trap wind.

But although developers and investors are coming under the environmental spotlight because buildings account for half the world's carbon dioxide emissions, Rastogi says few in India are going green.

"In India's booming real estate market, there are not enough professionals. And because mediocrity sells, it's easier to do that," Rastogi said in an interview in Hong Kong.

"Architects are just doing what developers want. If you start taking them down the sustainable route, people start getting nervous," he said. "They see it as wasted expense."

Building sites have churned up India's dusty cities since 2005, when rules on inward investment in construction were eased, sparking huge land speculation and a near quadrupling in prices.

An economy growing at more than 8 percent annually has drawn over $12 billion from global property investors, including funds run by Morgan Stanley and Citigroup, and enriched Indian developers such as DLF Ltd.

Morphogenesis, co-founded by Rastogi a decade ago "in a garage", has grown into a conglomerate of 100 architects and interior designers. With land prices soaring, it sells its designs as cost-saving, rather than green.

"When they move away from the standard box, we have to tell them it's more efficient," Rastogi said. "Many say fine, you've convinced us, but how do we convince the market?"

RE-INVENTING THE OLD WAYS

The sales pitch has worked on auditors Ernst and Young. Morphogenesis designed an office block for the company in the New Delhi suburb of Gurgaon, with a ship's hull design cutting direct sunlight on the sides of the eight-storey glass building.

Computers, gauging temperature and the presence of staff, control air conditioning, and natural light and ventilation dominate. The block costs about 20 percent less to build than a conventional office and saves about a quarter of running costs.

Rastogi said it was the hardest job yet for his company, which has worked on about 40 projects, partly because of the unique nature of the workplace.

"The biggest challenge was to be able to achieve a sustainable yet iconic building," he said.

Studies show going green can pay off quickly.

Spending $264,000 on energy-saving for a 30,000 sq m Sydney office block worth $145 million would be paid back in cost savings in three years, say consultants Jones Lang LaSalle.

Some Asian countries, including Japan, Singapore, Hong Kong and India have introduced green building ratings along the lines of systems operating in Britain and the United States, but they are catching on slowly.

According to a Jones Lang LaSalle survey of 414 companies, 12 percent in Asia said they were willing to pay premiums of over 10 percent for "sustainable" buildings, compared to 3 percent in North America and Europe.

Rastogi, who learnt his architecture in New Delhi and London, said he is most influenced by how the average Asian has dealt with searing temperatures over the centuries.

"It might be more fashionable today, with reports on global warming and climate change, but it's always been part of Asian architecture," Rastogi says of energy saving cooling techniques.

"It's only in the last 50 to 100 years that the approach seems to have gone off core values."

The Jaipur fashion school, for example, is built around step wells, inspired by 1,500-year-old works by masons in Gujurat and Rajastan villages who wanted to store ground water and monsoon rains for the parched nine months of each year.

Toilet water is recycled, cleansed by reed beds, and dripped on to external walls for an evaporative cooling effect.

Rastogi also mimics old village roofs, pocked with vents that channel air onto clay pots holding plants inside the rafters.

"We take basic principles plagiarised from thousands of years of human building," Rastogi said.

"We're not looking at great works, but human settlements, communities -- not a great king doing great palaces, but the strategies of the common man." (Editing by Kim Coghill)


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## Bushroda

*Where the Glitterati Go to Listen, Hip-Hop Meets Indian Classical*
*Time Zones: Friday Night at a Mumbai Hot Spot *

By Emily Wax
Washington Post Foreign Service 
Tuesday, March 11, 2008






*A series of occasional stories and pictures looking at life in foreign countries through the prism of time.* 

MUMBAI It's 10:30 on a Friday night and already a big, breathless crowd is trying to get into a former warehouse here. Inside is the Blue Frog, one of this city's few live music venues, which six nights a week hosts a stream of international rock and hip-hop acts that often fuse their sounds with Indian classical music. 

People who make it through the door squeeze up to the bar. Apple martinis, cranberry flirtinis, cosmos and mojitos are all on offer, the usual libation lineup on the globalized lounge scene. 

Nearby there's bright white pod seating, surrounded with glowing blue lights. Positioned around the stage, each pod looks something like a giant lily pad tinged in blue. Patrons are left to imagine the blue frog that might be resting on it. 

Those lucky enough to score a pod -- heroes and heroines from Bollywood films, models and modelizers, plus a few literati -- settle in for the evening. They eye the crowd. But this is not a place where people come just to see and be seen. They come to listen. 

Around them beats one of India's most powerful sound systems. Concert-size speakers are bolted to the rafters. The off-white walls are bubbled, as if beach balls were trying to squeeze through, the contours cutting the acoustic bounce that can muddy the music. 

A sound engineer from Los Angeles designed the system, and high fidelity extends from the nightclub to the recording studios next door, which produce some of the up-and-coming acts that take the stage here. 

Pushing through the crowd at 10:46 is Mahesh Mathai, a popular Bollywood filmmaker who co-founded the three-month-old club, along with a few musicians, a restaurateur and an MBA. 

Mathai, who sports a sleek Caesar haircut, delivers a quick double-kiss hello to a pretty female friend. Then, raising his voice to be heard above the din, he explains that the club is "every boy's dream. . . . We wanted music to be the soul of the club. Everyone in Bombay thought it was time for a place that broke all the cliches of listening to classical Indian music in a conference hall. We wanted our sound to be fresh, to break down global boundaries." 

As India's economy rises, it seems, so does the quality of its music scene. 

The Blue Frog provides visual stimulation, too. On giant video screens suspended above the stage are streaming psychedelic montages of animated dancing babies, 1960s-style light-show shapes pulsating to the beat and cartoon-like figures rocking out with air guitars. 

Since this is India, where people love to eat when they drink, there's a full kitchen with an award-winning chef, dishing up plate after plate of chi-chi foods -- ricotta and tangerine tortellini pot stickers with saffron aioli, perhaps, or duck breast with maple, mustard and coffee marinade. 

Sucking down a cold beer and biting into some sweet chicken wings, Shiram Misra, 32, sits in one of the pods, which hold five to 10 people and are positioned so that the stage is always visible over the heads of others.

"The place is stunning and the food is a hit. But this place has music at its heart," said Misra, who does marketing for a liquor company. "We were so desperate for this in India, to find a place that really centers around the acoustics. It's a gift to India and anyone who appreciates sound." 

At 11:15, the evening's live band explodes onto the stage. It's a six-man Austrian hip-hop group called Bauchklang, which might be translated as "tummy tones." They have no instruments. 

They do bass with ultra-fast roars from the gut, they whistle, they blow out puffs of air -- all the time holding microphones close to their lips. They make keyboard sounds with blips and burps and mouth clicks. The group's latest CD describes one member as "mouth percussion," another as "human beatbox." 

All of the sounds are amplified; the bass makes the whole room tremble. Clubgoers, in awe, pour onto the dance floor. Everyone is grooving and moving. 

But the highlight of the night comes at 11:45, when classical Indian crooner Shilpa Rao, who sings for Bollywood movies, joins the band onstage. The resulting blend of hip-hop sounds and her velvety voice is smooth and magical. 

Soon another Indian artist joins the Austrians to imitate the Indian tabla drum with his mouth. Tak, dada, tak, tak. The Austrians add their own beats. The crowd cheers, camera phones click, cocktails are polished off. 

"We are in Bombay, the new India. Why not have this kind of club?" exclaimed Sarah Jane, one of the country's several Miss Indias. "When we hear the music of young India we feel more alive." 

Outside, just after midnight, the line is growing longer, with the young Indians bobbing their heads to the beat filtering out.


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## Bushroda

*India, US to double trade to $60 bn by 2008 end*

India and the US have set the goal of doubling their trade to about $60 billion by the end of 2008 while agreeing to begin exploratory talks on a possible bilateral investment treaty. Budget 2008-09. The goal is set out in the Bush administration's 2008 Trade Policy Agenda and the 2007 Annual Trade Report to the US Congress released here Tuesday.

Though trade has expanded rapidly, the current total amount of bilateral trade is not consistent with the size and potential of both the US and Indian economies, and both governments agree that trade and investment flows should be greater, the report said. Noteworthy developments in 2007 included finalising arrangements for Indian mangoes to enter the US market for the first time, and agreement to initiate exploratory discussions in early 2008 on a possible bilateral investment treaty.

Another development in 2007 in the bilateral US-India trade relationship was the creation of a Private Sector Advisory Group (PSAG). The group's key purpose is to provide strategic recommendations and insights to the India Trade Policy Forum (TPF). The discussions under the TPF, which is part of the overall economic dialogue between India and the US, cover bilateral trade and related issues and also address multilateral issues such as the ongoing World Trade Organization (WTO) Doha Development Round negotiations. The membership of the PSAG includes trade experts and representatives of private sector organizations in the US and India with in-depth knowledge of international economic and trade policy.

The group will provide US Trade Representative (USTR) Susan C. Schwab and Indian Minister of Commerce and Industry Kamal Nath with analyses and recommendations for potential building blocks for bilateral economic relationship. Commensurate with India's dynamic and growing economy, the bilateral agenda continued to expand with respect to the significant opportunities for bilateral trade that US and Indian companies are aggressively pursuing, as well as the challenges US investors continue to face as India gradually opens its markets. However, India continues to limit market access in various sectors, including through high taxes and tariffs, non-transparent procedures, discriminatory treatment of imports, and non-tariff barriers, said the report.

Noting the two countries completed another year of active dialogue on trade policy in 2007, the report said India is working to improve its protection and enforcement of intellectual property rights. "We continue to work with the government of India to address issues related to India's copyright law and patent law, protection of undisclosed pharmaceutical test or other data, as well as high levels of piracy, including book piracy, and counterfeiting", it said. The USTR's efforts included the identification of new areas for cooperation, including with regard to India's tariff and tax regime, intellectual property rights, investment climate and regulatory hurdles.

As part of their trade dialogue, Schwab and Kamal Nath convened the fourth ministerial-level meeting of the TPF in April 2007. Through regular dialogue under the TPF, the US and India seek to remove impediments to bilateral trade by anticipating potential trade problems and jointly resolving concerns early.

The TPF serves as the umbrella for five focus groups: Agriculture, Tariff and Non-Tariff Barriers, Services, Investment, and Innovation and Creativity (in particular intellectual property rights issues). Deputy USTR Karan Bhatia and Indian Commerce Secretary Gopal Pillai oversaw ongoing focus group discussions throughout 2007 to address priority issues such as foreign direct investment caps, intellectual property rights protection, telecommunications policy and market access for a wide range of manufactured and agricultural products and services.

Schwab and Kamal Nath met on several other occasions in 2007. They participated in the US-India Economic Dialogue and US-India CEO Forum events held in New York City in September. These events included discussions among US and Indian Cabinet-level and other senior government officials focused on trade and economic affairs. Top government officials from both countries also met with CEOs from major US and Indian corporations with the goal of reviewing progress, and building momentum for our bilateral trade and investment relationship.

Schwab and Kamal Nath also met a number of times in the context of the Doha Development Round negotiations in an effort to find common ground in the pursuit of an ambitious outcome. Multilaterally too, the US continues to lead efforts towards concluding an ambitious Doha Development Round, the report said. Concluding an ambitious Doha Round is President George Bush's top trade negotiating priority and will generate economic growth through new trade flows in agriculture, industrial goods and services, helping to lift millions of people in developing countries out of poverty, it said.

"The administration realises that a window of opportunity exists to conclude the Doha Round this year and looks forward to working with our trading partners to achieve the ambitious and balanced outcome that will be necessary for a successful agreement," the report said.


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## Neo

*JPMorgan cuts India growth forecast to 7% *​
MUMBAI: JPMorgan has cut its forecast for Indias economic growth in the fiscal year starting April 1 to 7 percent from 7.5 percent, which would be the countrys slowest pace of expansion in six years. 

Asias third-largest economy grew an average of 8.75 percent in the past four fiscal years and the government estimates growth of 8.7 percent in 2007-08, which runs to the end of March. Indias GDP revision owes to expectation of moderation in growth in industry and service sectors that will likely be greater than what was reflected in the prior forecast, JPMorgan economists Rajeev Malik and Gunjan Gulati said in a report. Growth is poised to pick up to 8 percent in 2009-10, and the medium-term favourable structural dynamics remain in place, the economists said. Their forecast for 2008/09 is much lower than the expectations of the government and the central bank. In January, central bank governor Yaga Venugopal Reddy said India should aim for a growth of at least 8.5 percent in 2008-09, and Finance Minister Palaniappan Chidambaram said this month he expected the economy to grow by at least 8.8 percent. 

JP Morgan said India was better insulated against a downturn in the global economy than other emerging Asia economies because it was relatively less open. Admittedly, some sectors such as information technology services are more heavily dependent on the US, and will likely suffer more, the report said. The economists did not change their forecast on official interest rates. They expect the central bank to cut its repurchase rate by 25 basis point at a policy review in July. The repo rate, the central banks short-term lending rate through which it injects cash into the banking system, has been at 7.75 percent for almost a year.

Daily Times - Leading News Resource of Pakistan


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## Bushroda

*Lankan pilots eye growing Indian market*
Peninsula Online, Qatar 
3/17/2008

Colombo  With the opening up of Indian aviation to foreigners, pilots from Sri Lanka have been eyeing the expanding Indian job market. 

At least 15 of them, including three or four expatriates, have joined one Indian airline or the other in recent months, a spokesman of the Sri Lankan Pilots Association said. 

"Jet Airways and Kingfisher are offering high salaries to get recruits from Sri Lanka. Kingfisher is planning to go international in its operations and is desperately looking for experienced pilots," he said. 

Middle East airlines like Emirates, Qatar and Etihad are also attracting Sri Lankan pilots. 

"So far Sri Lanka has lost 25 pilots. But we have also had four or five joining us from overseas. There is a global churning in the aviation industry in which airlines everywhere are gaining and losing personnel," the spokesman said. 

India is facing a shortfall of over 600 pilots. In 2007, for instance, India needed 4,540 pilots but had only about 3,900. Not all the vacancies could be filled with local recruits. 

The prospect of getting pilots from abroad to fill the gap has improved immeasurably because of a significant change in New Delhi's policy on the recruitment of foreign nationals. 

"India is now giving work visas without a fuss to personnel of the executive cadre if the companies make a request for them," said an Indian official who did not want to be identified. 

India has not waited for the signing of the Comprehensive Economic Partnership Agreement (CEPA) with Sri Lanka to throw open its services sector to Sri Lankan executives. 

Sri Lankan companies that operate in India like Brandix Textiles (based in Visakhapatnam) and Aitken Spence (with resort hotels in Kerala) have been allowed to employ their own nationals in executive positions. 

But when the CEPA is signed, recruitment of foreign personnel will get legitimised and opportunities will naturally increase. 

Indian Minister of State for Commerce Jairam Ramesh said in Colombo recently that India would not insist on reciprocity when opening up its services sector to Sri Lankans once the CEPA was signed. 

Ramesh's statement is partly founded on a shortage of personnel at the highest levels in Indian industry thanks to the booming economy. The supply of trained and experienced personnel does not match the growing demand. 

A survey conducted by the Federation of Indian Chambers of Commerce and Industry (FICCI) showed high-level personnel shortages in a variety of industries and economic sectors. 

"Shortages were seen at the shop floor level," an Indian official said. 

Partly because of the shortage, executive salaries have been hiked to very competitive levels in India. It is said that in recent times, salary increases have been the highest in India and China because of their growing economies. 

The CEPA, marked by liberalisation of the trade in services, will benefit Sri Lankans more than Indians because there will be a movement from Sri Lanka to India and not the other way round, Indian officials said. 

Sri Lanka has been wary about liberalization in the trade in services because of the fear that Indian professionals will swamp the Sri Lankan market and squeeze the locals out. 

But Indian officials said this is unlikely to happen, given the economic conditions in India and Sri Lanka. The Indian economy is booming with an expanding industrial base while the Sri Lankan economy is stagnant with a dormant industrial base. This difference will influence the movement of service personnel. 

If today Sri Lankan pilots are seeking work in India and not the other way round, it is because of a boom in Indian aviation and deterioration in the condition of Sri Lankan aviation. Sri Lankan aviation received a major blow when Sri Lankan Airlines, the state-run national carrier, did not renew the management contract with Emirates. And the Tamil ethnic conflict continues to hamper domestic aviation.


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## Bushroda

*The smart money's riding on India* 
by Patrick Frater
Variety Asia, Hong Kong 
Monday, 17 March 2008 

China Film Group, the production-distribution combine that bestrides the Chinese movie industry in a fashion unlike that of any other company in any other major movie economy, is ramping itself up for a stock market listing sometime this year. 

The flotation, if it goes ahead -- CFG's previous attempt in 2005 was canceled -- will be a fascinating test of investor sentiment toward the Chinese entertainment sector. And it may give some further clue as to how far the Chinese industry is to be free to evolve. 

One crucial question is whether foreign companies will be allowed to buy a stake of any significant size. Some might be happy with just a tiny parcel if that allows them a decent look at CFG's books and a better insight into the highly opaque finances of the Chinese industry. 

It is not just Rupert Murdoch and News Corp. who have come to the conclusion that trying to build an entertainment business in China is simply too hard. 

Warner Bros. last year walked away from its investments in China's hardtop sector, having found the regulatory environment too rigid for its liking. 

Although China is too big and growing too fast to ignore, it's India that comes out on top when attracting coin from financial investors and industry alike. 

Compare the Indian case with Korea, where local movie performance and exports have wilted lately, and with China, which offers poor returns and the constant threat of soverign intervention. Japan's stability and established brands mean investors may now be reassessing their previously cool attitudes to the world's second-largest entertainment economy. 

Ashok Amritraj, an Indian-born Hollywood insider who is in the process of setting up shingle Hyde Park Asia, says he is close to launching local production deals in India, Korea and Japan. But, he admits, "I cannot figure how to do this in China yet." 

Similarly, Continental Entertainment Capital, which is looking to replicate in Asia the project- and structured-financing activities it has in the U.S. and Europe, is steering a careful line on China. 

Managing director D. Jeffrey Andrick says, "We are not excluding mainland China," and he suggests that budgets are often too low to justify sophisticated product like gap- or super-gap funding. But he is excited by growing global demand for the Weinstein Co., which successfully raised a $285 million fund to back Asian movies, and has a piece of big-budget Jackie Chan/Jet Li starrer "Forbidden Kingdom." 

However, TWC was recently denied a permit to shoot "Shanghai," which would have been the first pic originated and bankrolled through the fund. If China's current crackdown on co-productions continues, company will have a harder job disbursing all the coin it raised. 

Contrast that with the overseas cash flowing into Indian film and TV. Four Indian content companies have successfully raised money on the AIM section of the London Stock Exchange. In the last 12 months, Hollywood studio congloms Viacom, NBC Universal and DreamWorks (through Thomson) made their first content investments in India. Disney paid $230 million to raise its stake in UTV from 14% to 32%. Meanwhile, Sony and Singapore's WSG committed themselves to spending $1 billion for Indian sports rights. 

Investors in India and Korea are well aware of the boom-and-bust cycles those countries' movie sectors have weathered over the past 10 years, and both could turn again. But without any meaningful foreign participation in CFG, China will miss an opportunity to lay to rest accusations that in the content biz it is isolationist, protectionist and a difficult place to do business.


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## Bushroda

*Industrial sector to grow at 10.4 per cent in 2008-09: CMIE news* 
15 March 2008 

Mumbai: Industrial sector in the country is expected to grow at 10.4 per cent, economic think-tank Centre for Monitoring Indian Economy said in its projection for the Indian Economy.

CMIE has pegged industrial expansion in the country at 10.4 per cent for fiscal 2009, despite a gloomy picture painted by the latest government data on industrial growth

"We expect the industrial production to grow by 10.4 per cent in FY09. The current investment boom is expected to correct the slowdown problem," CMIE said in its monthly report.

CMIE attributed the current slowdown in industrial production to supply problems faced by sectors like cement, aluminium, electricity and steel.

Industrial production growth in India slipped to 5.3 per cent in January against a 11.6 per cent growth achieved in the same month last year as growth in all major sectors, including manufacturing, electricity and mining, declined.

"We expect interest rates to start easing in the first quarter, thus, reviving demand for consumer durables," the report added.

Gross capital formation in the country is expected to increase by 15.5 per cent in FY09 while the country's gross domestic product (GDP) was expected to grow by 8.9 per cent in FY 08 and 9.1 per cent in FY 09, CMIE said.

India's real GDP grew by 7.5 per cent in FY 05, nine per cent in FY 06 and 9.6 per cent in FY 07.

CMIE based its projection of a 9.1 per cent growth in real GDP in FY09 on the assumption of an adequate monsoon as also the proposed sharp cuts in tax rates


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## Bushroda

*Booming India discovers a luxury: retirement homes for seniors*
St. Catharines Standard, Canada
15 Mar 2008

She grew up listening to her grandparents' stories over dinner, three generations gathered in the house they shared, like nearly every Indian family she knew. 

But now that Uma Paranjpe is a grandmother, she finds herself living alone in a small apartment, her children abroad, her grandchildren far from her cooking and her stories. 

And she's thrilled. 

"Grandparents also want their own independence," said the 62-year-old widow, who lives in a bustling retirement community in this southwestern Indian city. "We want freedom. We would like to travel, to pursue our hobbies." 

A cultural revolution is underway in India, led by an unlikely grey-haired vanguard that is dramatically changing what it means to be old here, and what it means to be a family. In a country where family is society's strongest cultural anchor, the thought of the elderly living alone has long been anathema, but many old people today are embracing the notion. 

With the economy booming, children are moving away for jobs, leaving elderly parents on their own. While some lament the breakdown in family as a sign of cultural decline, others - especially the well-off - are happy to devote their old age to themselves instead of their grandchildren. 

The new retirement communities are so far available only for the rich. There's nothing between the high-end faux Florida facilities and bleak government-run homes for those with nowhere else to go. 

Roughly a dozen development companies across the country offer sparkling facilities complete with badminton courts, lap pools and game rooms to the wealthiest sliver of the country's 80 million people over 60. 

Seniors in India traditionally occupy a role somewhere between family pillar and dependent hanger-on, with more than 71 per cent of the elderly living with their children or grandchildren, according to the 2001 national census. 

Grandparents can be revered keepers of family lore or ghostly presences cooking nearly-forgotten recipes. But from teeming cities to sleepy villages, caring for one's parents is to most Indians a duty as important as caring for one's children, and home after home across the country is crowded with the same mix of generations.


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## Bushroda

*Entertainment biz to double Indias overall growth*
BY CHRIS NELSON 

MUMBAI, India  The development of new technology, digitization of content and new distribution systems will fuel the Indian media and entertainment industrys growth rate to double that of the countrys overall economy through 2011, according to a new report conducted jointly by audit and consultancy firm Ernst & Young Pvt. Ltd. and the Associated Chambers of Commerce and Industry of India.

The groundbreaking study, issued last December, predicts that digitization will influence substantial change in the industry, which according to Ernst & Young, is worth approximately $11 billion. 

Film and television account for over 50 percent of the entire media and entertainment industry and, with digitization, which is largely driven by change in media consumption habits of consumers and regulatory pressures, half the business will completely change over the next three years, Farokh T. Balsara, a partner at Ernst & Young India in Mumbai and the head of the companys media and entertainment division, stated in the report.

Titled Indias Digital Revolution: Impact on Film and Television Sectors, the 28-page study predicts that by 2010, more than one-quarter of the 100 million or so Indian households that pay for television service will have switched over to digital pay-television service, with direct-to-home, or DTH, trumping digital cable and Internet protocol television as the most popular means of delivering the service.

Balsara credits DTHs stability, the lower cost of delivering digital pay television via the technology, particularly in rural markets; and the relatively quick pace which DTH has been brought to the masses as reasons why it will emerge as the victor over digital cable and IPTV in the years ahead.

Consumers would benefit significantly through improved service quality, increases in content variety, interactive offerings and differential pricing, Balsara wrote.

Ernst & Young India and the Associated Chambers of Commerce and Industry in India conducted the study over a three-month period by interviewing officials from the Indian entertainment and media industry and related groups in Mumbai, New Delhi and Chennai. The South Asian nation is the worlds third-largest cable- and satellite-television market, with approximately 70 million households; over the last 17 years, the Indian media market has grown by more than 38 percent on an annual basis.

According to Balsara, government regulations and the industrys own disorganization have limited the growth of the countrys pay-television market, but that should change with the advancement of digitization.

The pay-TV market in India has not been able to maximize its revenues due to restrictive regulations, an organized value chain and lack of addressability in the analogue platform, he said. However, with digitization of the platforms, more value will be created for each player across the value chain.

He added that local cable providers comprise about 78 percent of the overall market, but by 2010, their reach is expected to decline to 24 percent. 

The report also predicts that changing consumer preferences will have a major impact on advertising revenues of various media platforms. For example, online advertising in India currently stands at approximately $87 million, while overall media spending is roughly $5.5 billion. But in the next three years, online advertising should increase significantly, according to Balsara, though he noted that any increase in online advertising expenditures wont affect television advertising, which currently accounts for 43 percent of the Indian entertainment and media industrys advertising revenues.

Over the next three years, the television-advertising market is expected to grow at the rate of 14 percent on year [sic] and will continue to maintain its 43-percent market share in the advertising pie, Balsara said. We expect that with any increase in the overall advertising spending, the share of television will also increase proportionately.

However, the greatest impact of digitization may be felt by Indias massive film industry, which produces over 1,000 movies annually in more than 10 regional languages. According to the study, a confluence of factors including rising incomes, increasing content choices, digitization of film distribution and digitization of pay-television will collectively change the face of the countrys film industry.

While investment in exhibition software is increasing theatrical capacity, digitization of distribution is helping film makers maximize theatrical revenues as well, Balsara wrote. In addition, the higher penetration of television sets, [video compact discs] and DVDs and the digitization of pay-television is opening up avenues for new revenue streams and business models.

The study predicts that revenues generated by sales and rentals of DVD and digital compact disc movies will soar by 500 percent over the next two years, mainly because digitization of films will expand access of movies to Indians living in smaller cities and semi-urban areas.


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## Neo

*GM to launch second small car in India ​*
NEW DELHI: General Motors Corp wants to launch a second small car in India in the next two years as it looks to capitalise on growth in emerging markets to offset any sluggishness in US sales, a senior company official said. 

The model will not compete directly with Tata Motors low-cost Nano but will be cheaper than GMs current lowest priced car in India, David Reilly, GM group vice-president, told a news conference on Monday. 

Small cars less than 4 metres in length make up nearly three-quarters of Indias market. General Motors offers the Chevrolet Spark in the sector for about 300,000 rupees ($7,350). 

We need some thing lower than what we have got now. I think if we could find a vehicle less than that, it would not only benefit India but could benefit other places also, Reilly said, without detailing how much the new model would cost. 

But I would not call it an equivalent of Nano. 

Tata Motors unveiled the $2,500 Nano, the worlds cheapest car, in January and said the new four-seater would roll out later in the year from its West Bengal factory. 

Reilly said sales growth in emerging markets would outpace any softening in established markets like the United States and would help maintain the firms total global sales expansion. 

I dont predict a slowdown, but this year US would be tough, he said. 

General Motors, which has a 3 percent share of the Indian vehicle market, has a manufacturing plant in the western state of Gujarat and is building a second facility near Pune in neighbouring Maharashtra state. 

Reilly said the first trial car from the Pune plant, which will begin commercial production in the last quarter of 2008 with an initial production capacity of 140,000 vehicles, would be rolled out on Wednesday. 

The company also plans to build an engine plant in India, but Reilly would not share details. 

We are still in some negotiations ... We absolutely intend to go ahead with it, he said, adding that the company would be give further information within the next two months. reuters

Daily Times - Leading News Resource of Pakistan


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## Neo

*Indian inflation leaps to nearly 6pc​*
NEW DELHI, March 20: Indias inflation rate jumped by almost a full percentage point to hit a more than 10-month high this month, data showed on Thursday, dashing hopes of a swift interest rate cut to spur a slowing economy.

Annual inflation accelerated by 0.81 percentage points to 5.92 per cent for the week ended March 8 from 5.11 per cent the previous week, according to the wholesale price index, Indias most watched cost-of-living monitor.

The leap was driven by increases in prices of essential goods such as cooking oils, pulses, fruit, vegetables and spices and was bad tidings for the Congress-led government, which largely owes its 2004 national election win to support from Indias poor masses, who have been hardest hit by inflation.

The latest figure completely rules out the chances of a near-term rate reduction from the central bank despite the slowing economy, said HSBC economist Robert Prior-Wandesforde.

The governments focus now would be fixed on battling inflation given the huge political sensitivity to rising prices in India, he said.

The new rate came despite aggressive monetary tightening and far exceeded market forecasts of around 5.20 per cent. The level was the highest since late April 2007 when inflation stood at 6.01 per cent and is way above the central banks five per cent tolerance level.

The data came a day after the government imposed a ban on the export of cooking oils to curb rising prices. Commerce Minister Kamal Nath said the government might soon cut duties on palm oil imports to help in the inflation fight.AFP

Indian inflation leaps to nearly 6pc -DAWN - Business; March 21, 2008


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## Neo

*Moneylenders only hope for India's poor farmers ​* 
ARTICLE (March 21 2008): Almost every farmer across India's arid cotton-bearing central plateau is a hostage, in one way or another, to a profitable mega-business of illegal moneylending. Families have lost land, farmers have been asked to prostitute their wives to pay off debts and, when all else has failed, borrowers have killed themselves to end their misery.

An inescapable cycle of debt is fuelling one of the worst agrarian crises facing India, a crisis that has seen some 150,000 farmers commit suicide since 1997. Yet the public image of menacing debt collectors does not entirely reflect the views of the region's three million farmers. The rapacious moneylender, who plugs the gaps in rural financial services, is also the man they can turn to in times of need.

Last month, India's government announced a $15-billion loan waiver for small farmers borrowing from banks, but experts say the efficacy of the scheme is badly diluted because it leaves out those borrowing from moneylenders.

"Moneylenders are now an inextricable part of the rural economy," said S. Parasuraman of the Tata Institute of Social Sciences. "So much so the bank has become secondary, or even redundant, for a small farmer."

Moneylenders have been around for generations, but their business has boomed ever since India's economic priorities shifted, with globalisation, from agriculture to industry. The arrival of high-cost seeds and pesticides has added to the debts.

Indeed, one or two crop failures, a sudden health expense or a marriage in the family have become that much more perilous in a livelihood where the risks are already high.

Officially, almost half of India's nearly 100 million farming families are in debt. Of these borrowings, almost 30 percent are said to be in debt to private moneylenders, although farmers' lobby groups say the ratio is many times higher.

Prakash Uike grows soybeans and works as a labourer in a nearby town two days a week to pay moneylenders who gave him $200 two years ago. At $25 every two months Uike's loan should have been covered, but by some wily calculations of the loan-shark he continues to be in debt.

"I have had to mortgage my land to him," said Uike, an emaciated man who looked older than his 47 years. "But at least he has given me a loan." Virtually every cotton farmer in these parts, for instance, needs the assistance of someone like Yakub, a veteran moneylender who gave only one name. Typically, he charges 30-40 percent interest on a four-month loan.

He collects his dues at harvest time, but exacts an extra premium, compelling farmers to sell their cotton to him at a price lower than it fetches on the market, pocketing the profit. As collateral, the borrower signs away his land title that gives Yakub the right to collect the property at any time.

Most deals are illegal because the moneylenders don't have licences, a crime punishable with a $25 fine. Usurpation of property invites three months in jail, but convictions are rare.

Farming distress has attracted a new breed of moneylenders. Anyone with some disposable money - from shopkeepers, government officials and policemen to village teachers - lends in the hope of making a killing. In this dusty town, about an hour's flight from Mumbai, India's financial capital, almost every shopkeeper lends at a premium.

Their names are known to everyone in town, though few are willing to point them out for fear of reprisals. But rural credit and indebtedness is far from being a simplistic usurious lender-farmer spiral.

Even though farming supports 60 percent of India's 1.1 billion people, it contributes only a fifth of gross domestic product and accounts for only around 15 percent of bank credit. Marginal farmers hardly get formal credit because they almost never have any collateral. Other farmers are often underfinanced by banks, forcing them to turn to private lenders whose usurious interest rates bind them to a never-ending cycle of debt. "I have nothing left to mortgage to banks, so they will not give me credit," Uike said. "Where can I go then?"

In fact, bank interest rates are high as well, especially for rural borrowers. At interest rates ranging 13-14 percent for a crop loan, it is cheaper to borrow to buy a small car than to purchase seeds. Sometimes farmers have to bribe bank officials for a loan.

Predatory lenders are only part of the problem. Health-care and education costs have risen dramatically in the past few years, while income from cotton has slumped.

And then there is the growing obsession with the luxury goods that now consume much of the farmers' incomes. Television has given even the poorest a glimpse at the world outside. "People get upset if I tell them to curb the tendency to borrow unwisely," said Kishor Tiwari, a farming activist. "The propensity is to go with the flow, the pocket permitting or not."

Two years ago, a senior local government minister advised people to "skin alive" moneylenders. No one responded. If you hurt the sahukar (moneylender) you hurt the farmer, villagers said, and the clampdown on loan-sharks fizzled out. In every village, moneylenders are reviled, and their business seen as thriving on squeezing out the blood of poor farmers.

Yet, villagers know there is no life without the loan-shark. "We stay alive because the sahukar gives us some money," said Jyoti Sanjay Jiddewar, whose husband killed himself unable to pay moneylender. "I still have to deal with them otherwise we will starve."

Business Recorder [Pakistan's First Financial Daily]


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## Neo

*Foreign firms seek a bite of India's $90 billion food market ​* 
ARTICLE (March 20 2008): When Kellogg launched breakfast cereal in India 14 years ago, it underestimated the stranglehold of traditional cooked breakfasts. Cartons of cornflakes sat unsold on shop shelves. Those who ventured to buy cereal ate it with hot milk, another ritual as until recently milk was rarely pasteurised in India, and they were put off by the soggy consistency with none of the crackle and pop promised by the advertisements.

Kellogg fought back with a massive educational campaign and introduced products to suit local tastes such as Basmati rice flakes and mango-flavoured cereal for sweet-toothed Indians. It also made small packs for 10 rupees ($0.25) to encourage trial.

"It would be foolhardy for me to say Kellogg has replaced cooked breakfast ... I don't think we can ever hope for that," said Anupam Dutta, managing director of Kellogg India. "But we've become a part of the consideration set for breakfast in many Indian homes, and that's a tipping point," he said.

Getting a foothold in India's processed foods market, estimated to be worth $90 billion, requires persistence and a willingness to adapt products to suit culinary and cultural preferences, experts say. Rising incomes, more working women, modern stores and greater culinary adaptation are helping food giants such as Pepsico, Nestle, Unilever, McDonald's and Yum Brands get a piece of the market.

"Every company that wants a share has to invest heavily, localise extensively and be very patient," said Jayanta Roy, at consultancy Frost & Sullivan, which estimates that only a third of the processed foods market is in the hands of large Indian and multinational firms. The rest is controlled by regional firms.

Culinary adaptation appears to be key. Pepsi has had a big hit with ethnic salty snacks and also sells "aam panna", or green mango nectar, along with its colas.

Nestle pushed its Milkmaid condensed milk as being ideal for traditional Indian sweets. But it tasted more success with Maggi noodles, a bold step in a nation divided between eaters of rice and "roti" (flat wheat bread).

Maggi soon became a staple in school lunch boxes, helped by the ethnic "masala" (mixed spices) flavour. Nestle recently launched packaged yogurt, taking on another time-honoured tradition, while French rival Danone, along with Yakult Honsha, launched yogurt probiotic drinks.

A few years back, Indian and foreign firms struggled to push packaged foods. But these days it's much easier to break into the market thanks to a younger population, higher incomes, new technologies and a growing middle class, estimated at some 50 million households.

"We have a young population with higher disposable incomes, living away from the large joint families and seeking greater convenience," said Hemant Kalbag, head of consultancy AT Kearney's retail practice. He estimates processed foods will grow at about 15 percent annually over the next four years.

Large Indian firms are also muscling their way to the table. Top cigarette maker ITC Ltd is adding to its range of instant ethnic foods and pasta, cookies and salty snacks. "Increasingly, Indian consumption patterns are mirroring global trends such as a preference for protein and for functional foods," said Pankaj Gupta, head of consumer and retail practice at consultancy Tata Strategic Management Group.

"So companies can choose to go after the mass market or focus on niche segments which are also viable now," he said. Foreign fast-food chains McDonald's and Domino's Pizza are addding more vegetarian and ethnic options.

McDonald's, which is doubling its outlets in India to nearly 300 this year, does not sell beef products in keeping with the sensitivity of the dominant Hindu population. Half its menu is vegetarian, with best-sellers like the McAloo Tikki (potato patty) Burger. It also has more sit-down eateries for large Indian families and home delivery, a first. Domino's also has a dine-in option in several locations.

Nimble Indian firms are imitating these fast food giants to attract youngsters, who make up about half of India's billion-plus population. Jumbo King, a Mumbai-based eatery is mass producing "vada pav", a spiced potato patty in a bun, using modified cookie dough machines and temperature-controlled stoves, a far cry from the hand-assembled snack sold by street hawkers. "We wanted to give the vada pav a modern look," said Dheeraj Gupta, head of Jumbo King, which also has a whole-wheat option.

"Our inspiration is clearly McDonald's and Subway," he said. Despite the opportunity, challenges remain: cumbersome tax rules give smaller local firms an edge. An inadequate cold chain and storage facilities result in wastage of nearly 40 percent of all fresh produce.

"We need stronger legislation on food safety, more robust supply chains and improvements in the cold chain," Kalbag said. The government as well as modern retailers are addressing these issues, with new laws on packaging and labelling, as well as greater investments in the supply chain.

Changing lifestyles and rising prosperity are also driving the move to processed foods and Indian taste buds are becoming more adventurous. So products such as Unilever's 'Make a Meal' in a range of flavours including one with a Chinese bent are filling supermarket trolleys alongside traditional favourites such as packages of tender coconut water and spiced buttermilk. "The market's constantly evolving and creating demand for products that you never thought would have had a chance," said Kellogg's Dutta.

Business Recorder [Pakistan's First Financial Daily]


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## Neo

*Indian govt workers pay hike to cost Rs125.61bn ​* 
Tuesday, March 25, 2008

NEW DELHI: An Indian pay panel recommended on Monday an increase in pay and other benefits for federal government workers that would cost 125.61 billion rupees ($3.1 billion) in the fiscal year 2008/09 if taken up.

The panels report posted on a government Web site said pay back-dated to January 2006 would cost a one-time 180.60 billion rupees and it recommended a salary increase of 77 per cent for the lowest rung of central government workers.

It suggested the minimum wage for government workers should be 6,660 rupees ($165) a month, and the maximum salary should be 80,000 rupees a month. The report said in fixing the minimum salary it had taken into account the inflationary impact, the knock-on effect on state government pay scales and the governments ability to pay.

Analysts had been expecting the panel, which convenes about once a decade to assess civil servant salaries, to propose an average increase of 30 per cent for about 3 million central government employees. The numbers are broadly in line with our expectations for the 2008/09 fiscal year, said A Prasanna, economist at ICICI Securities in Mumbai.

Along with the farm loan debt waiver, this means higher market borrowing in the second half of 2008/09, though the first half numbers are likely to be on the lower side. The government is going to overshoot its fiscal deficit target of 2.5 per cent for (fiscal 2008/09) and we may even see it rising above 3 per cent.

In the previous pay round in 1997, state governments were forced to match the pay rise for their workers, blowing out the combined federal and state deficit to nearly 10 per cent of gross domestic product.

That pay round raised central and state government workers salaries to an annual cost of $13 billion. In Februarys budget, Chidambaram revised the federal fiscal deficit estimate to 3.1 per cent of gross domestic product for the 2007/08 financial year that ends in March, and said he aimed to bring it down to 2.5 per cent in 2008/09.

Analysts say a hefty pay rise for central and state government workers, along with other populist measures ahead of general elections due by May 2009, could push the deficit back up again. 

Indian govt workers pay hike to cost Rs125.61bn


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## Neo

*India adds 8.53m mobile users in Feb ​*
NEW DELHI: Indian telecoms firms added 8.53 million wireless subscribers in February, maintaining the worlds fastest pace of growth and putting the country on course to become the largest market after China by mid-April. 

India has been adding 8-9 million wireless users a month, compared with Chinas 6-7 million and 2-3 million monthly signings in the United States, thanks to call rates as low as 1 US cent a minute and cheaper handsets. 

The Telecom Regulatory Authority of India said on Monday the country had 250.93 million wireless users at end-February, against 256 million in the United States and an estimated 540.5 million in China. 

With only a quarter of Indias more than a billion people having access to a phone now, the potential for growth was huge. 

The regulator said India could topple the United States for the second spot by mid-April. 

Indias wireless subscriber base will surpass that of USA. and will become second largest wireless network in the world, it said in a statement. 

Top mobile operator Bharti Airtel led the subscriber growth, adding 2.26 million new customers in February, while No. 2 Reliance Communications added 1.61 million. 

Unlisted Vodafone Essar, controlled by Britains Vodafone Plc added 1.41 million mobile customers in February. 

As the total wireless subscribers in India surged by more than a half in February from a year earlier, fixed-line telephones continued to contract as more users shifted to mobile phones, the regulators data showed. reuters

Daily Times - Leading News Resource of Pakistan


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## Neo

*Tata buys Jaguar in &#163;1.15bn deal ​* 
Ford put Jaguar and Land Rover up for sale last June 







Car giant Ford has sold its luxury UK-based car brands Jaguar and Land Rover to Indian company Tata. 
Tata, India's biggest vehicle maker, is paying $2.3bn (&#163;1.15bn) for the British brands after months of negotiations over price and supply relationships. 

The negotiations started last June when Ford announced its intention to sell the companies as a package. 

Jaguar and Land Rover employ about 16,000 staff at UK plants in the West Midlands and Merseyside. 

Although Land Rover remains profitable, Ford has never managed to make money from its investment in Jaguar. 



> Now, it is time for Ford to concentrate on integrating the Ford brand globally
> 
> Alan Mulally, chief executive, Ford



Ford has been forced to sell the two companies, based at Solihull and Castle Bromwich in the West Midlands and Halewood on Merseyside, in order to concentrate on its loss-making core US car business, which it hopes to turn around in the next two years. 

The $2.3bn price tag is about half the amount Ford originally paid for the marques, leading some analysts to argue that the purchase was a mistake. 

"How can you call it anything else?" said Erich Merkle, an auto expert for US consulting company IRN. 

"You have to cut your losses at some point. It's been draining them of cash and resources." 

Ford sold its iconic Aston Martin marque to a UK-led investment consortium in a deal worth $955.2m last year. 

*No significant changes *

The companies said there would not be any "significant changes" to Jaguar or Land Rover employees' terms of employment on completion of the sale. 

They said that staff, trade unions and the UK government had been kept informed of developments and supported the move. 

Tata said the deal should be completed by the end of the summer, subject to applicable regulatory approvals. 

The purchase will give Tata the opportunity to expand its presence in the passenger car market beyond India and gives it the clout necessary to compete with international players. 







> TATA'S NANO
> 
> 3.1m long, 1.5m wide, 1.6m high
> Can seat four to five people
> Meets European emission standards
> Costs 1 lakh, or 100,000 rupees
> Tata hopes to eventually export the car
> Source: AFP



In January, Tata launched the world's cheapest car, the Nano, priced at $2,500 (&#163;1,250). 

By contrast, the starting price for Jaguar's latest sports car, the XF is more than &#163;32,000 ($64,000). 

"We are very pleased at the prospect of Jaguar and Land Rover being a significant part of our automotive business," Tata said. 

"We have enormous respect for the two brands and will endeavour to preserve and build on their heritage and competitiveness, keeping their identities intact. 

"We aim to support their growth, while holding true to our principles of allowing the management and employees to bring their experience and expertise to bear on the growth of the business." 

Alan Mulally, the president and chief executive of Ford, said he was "confident" that the brands would continue to thrive under Tata's stewardship. 

"Now, it is time for Ford to concentrate on integrating the Ford brand globally, as we implement our plan to create a strong Ford Motor Company that delivers profitable growth for all," he added. 

*Terms *

Under the terms of the deal, Ford will contribute about $600m to the Jaguar and Land Rover pension plans. 

Ford will continue to supply Jaguar and Land Rover for differing periods with engines, stampings and other car components, in addition to a variety of technologies. 

In addition, Ford Motor Credit Company will provide financing for Jaguar and Land Rover dealers and customers during a transitional period of up to 12 months. 

"It seems as though they have resolved some tricky supply issues," said Ernst & Young's automotive expert Eric Wallbank. 

"The deal will give Ford the cash to revive its fortunes in the US and focus on its core brand, while it adds an important plank to Tata's automotive ambitions," he added. 

BBC NEWS | Business | Tata buys Jaguar in &#163;1.15bn deal


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## Neo

*Indian inflation leaps ​* 
Saturday, March 29, 2008

NEW DELHI: Indian inflation raced towards 7 per cent in mid-March to its highest in nearly 14 months, and expectations of central bank action grew as the finance minister said he would accept lower growth to curb price rises.

Top policy makers said controlling inflation was a priority, and the central bank said its objective was to keep it below 5 per cent and bring it lower in the medium term. The rupee surged to a one-month high as traders factored in tighter policy settings, and the 10-year bond yield hit a four-month closing high of 7.91 per cent.

The wholesale price index rose 6.68 per cent in the 12 months to March 15, data showed, sharply higher than the previous weeks 5.92 per cent and a market forecast of 5.96 per cent. In Mumbai, Finance Minister Palaniappan Chidambaram told reporters he was prepared to give up bit of growth to control inflation, and said interest rates remained the most effective instrument to manage price pressures. 

Indian inflation leaps


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## Neo

*Indian inflation leaps, economy slowing​*
NEW DELHI: Indian inflation raced past 6 percent in mid-March to its highest in nearly 14 months, raising market expectations that the central bank may have to respond and sending the rupee to its highest in a month against the dollar. 

Indian federal bond yields hit a three-month high of 7.89 percent after Fridays price data, up from Thursdays close of 7.78 percent, and traders said the risk the central bank would have to act was growing. 

The widely watched wholesale price index rose 6.68 percent in the 12 months to March 15, sharply higher than the previous weeks 5.92 percent and well above a market forecast of 5.96 percent, government data showed. 

It was the highest since a reading of 6.69 percent on January 27, 2007, and the fourth consecutive week above 5 percent, below which the Reserve Bank of India (RBI) wants to keep inflation in the fiscal year ending March. 

Inflation number now looks ugly, said Shubhada Rao, chief economist at Yes Bank in Mumbai. 

Clearly, this headline number may prompt monetary measures as well. At first instance, we expect RBI to allow rupee appreciation for now. Some liquidity impounding measures are also likely. 

The partially convertible rupee initially showed little response to the data but then began to climb, breaking through 40.00 per dollar for the first time in a month and gaining to 39.8500. Wholesale inflation has shown a rising trend since early December 2007, driven largely by higher food prices, posing a major policy headache against the backdrop of slowing growth in the broader economy and general elections due by May 2009. 

A modest rise in retail fuel prices in mid-February has also contributed to higher inflation, but the latest data caught many off guard. 

This is surprisingly high and carries ominous implications for the magnitude of the problem that is likely to dominate policy making for much of 2008, said Saumitra Chaudhuri, economic adviser at domestic rating agency ICRA. 

At the moment, I expect rates to be steady, but if this high trend continues one doesnt know what will happen. 

Slowing growth: The central bank has kept its main lending rate unchanged at 7.75 percent for a year, after raising it five times between June 2006 and March 2007 to stem price pressures in a fast-growing economy. The RBIs next policy review is scheduled for April 29 and it has also used its cash reserve ratio, the proportion of cash banks have to keep with it on deposit, as a monetary tool to soak up inflation-fuelling excess cash in the past. 

Prospects for some policy easing surfaced briefly after the statistics office estimated Indias economy to expand 8.7 percent in the fiscal year ending March, slower than an 18-year high of 9.6 percent in the previous year. reuters

Daily Times - Leading News Resource of Pakistan


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## Malang

Videocon bid for Motorola biz

NEW DELHI, April 1: Consumer electronics major Videocon group today said that it had bid to acquire Motorola Inc's global mobile handset business.
Yes, we have sent them an expression of interest to acquire their global mobile handset business. It is in the initial stages and will take time but we are the only one from India to do so, Videocon group chairman, Mr Venugopal Dhoot said.
He said the company's move to acquire Motorola's mobile phone business was in line with its growing interests in the mobile telephony business. We have already got licences for offering GSM-based mobile services in all 22 circles in India and we see a synergy, Mr Dhoot added.
Asked what could be the value of the deal he said: It is too early to talk about numbers.
When contacted, a Motorola India spokesperson declined to confirm the development saying we do not comment on market speculation.
According to reports, Motorola's non-profitable handset business has been estimated to be worth about $3.8 billion as evaluated by Merrill Lynch.
While Videocon itself is on the prowl, US telecom giant AT&T is eyeing a stake in its subsidiary Datacom, which has been issued a licence recently for mobile services throughout India.
However, the deal is expected to take shape only after the government allocates spectrum for wireless telecom services to new players, as a mere licence may not fetch a good value.
Datacom is the first in the list to get spectrum, except in Delhi and Mumbai, as and when the government starts allocating the radio frequency.
Datacom has announced an investment of Rs 6,000 crore for a pan-India network expansion in the first phase. It has also been approached by another foreign player Telephonica of Spain.
Videocon in the past has been active in acquiring consumer durable firms across different geographies. It had acquired Thompson's colour tube business and AB Electrolux' Indian subsidiary, but failed to acquire Korea's ailing electronics firm Daewoo. 

The Statesman


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## Neo

*Indias sugar exports may top 4 million tonnes​*
MUMBAI: Sugar exports from India, the worlds second-biggest producer after Brazil, is likely to exceed four million tonnes in the current crop year to September, one of the worlds leading trader said on Wednesday. 

I believe India has all the reasons to export more than 4 million tonnes sugar this year, Adam Leetham, director of Czarnikow Sugar India Pvt Ltd, told Reuters. Indian trade officials have estimated the countrys exports in the current year at around 3 million tonnes. 

Daily Times - Leading News Resource of Pakistan


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## Neo

*Indian vehicle makers post record annual sales​*
MUMBAI: Two top Indian vehicle makers Maruti Suzuki and Tata Motors reported record annual sales on Tuesday in one of the worlds fastest growing motoring markets, driven by strong economic growth and fatter salaries. Tata Motors, which last week announced the 2.3-billion-dollar purchase of luxury British car icons Jaguar and Land Rover, said sales rose by one percent to 582,401 vehicles for the fiscal year to March 2008. 

These sales figures are the highest ever by the company, Tata Motors, part of the giant tea-to-steel conglomerate Tata Group, said in a statement. For the month of March, Tata, the countrys leading truckmaker, reported total sales, including exports, rose six percent to 66,495. The announcement by Tata came a day after the company and another leading Indian vehicle maker Mahindra and Mahindra separately announced they would invest a total of 75 billion rupees ($1.9 billion) to boost capacity. Tata said it would invest 60 billion rupees over the next four or five years while Mahindra plans to spend 15 billion rupees in addition to an earlier announced 25 billion rupees. 

The latest announcements come on top of plans by global automakers such as General Motors and Volkswagen to invest in excess of six billion dollars to construct plants or raise capacity to meet the demands of Indias increasingly affluent consumers. Meanwhile, Indias largest carmaker Maruti Suzuki said sales in the fiscal year through to March jumped 13 percent to 764,842 vehicles. Maruti, majority owned by Japans Suzuki Motor and which commands the lions share of the fast-growing Indian car market, said in a statement that its Indian sales were the highest ever in the history of the company. afp

Daily Times - Leading News Resource of Pakistan


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## Neo

*India, Myanmar sign multimillion-dollar deal ​* 
Friday, April 04, 2008

NEW DELHI: India has agreed to build a multimillion-dollar (euro) seaport and transportation system in Myanmar as it presses ahead with investment in its much-criticized neighbour.

The agreement was signed on Wednesday by officials during a meeting between the second-highest member of Myanmars ruling junta, Vice Senior Gen Maung Aye, and Indian Vice President Mohammad Hamid Ansari, Indias Foreign Ministry said.

India has been investing in Myanmar despite international calls for sanctions on the Southeast Asian countrys military government, which violently suppressed pro-democracy protests several months ago.

A ministry statement gave no details of the deal. Earlier, Indian officials said India would upgrade waterways and highways along Myanmars Kaladan River and develop the port of Sittway in the countrys northwest in the US$120 million (euro81 million) project.

This project will greatly enhance connectivity between Myanmar and India, in particular with Indias northeast states, the ministry statement said.

India has established deep economic and military ties with Myanmars ruling junta over the past decade and has said it believes talking quietly is a better approach than sanctions.

During his six-day trip to India, Maung Aye has also met Prime Minister Manmohan Singh, who reiterated New Delhis commitment to support Myanmar in telecommunications and information technology, the statement said.

The general, whose visit ends on Saturday, said he appreciated Indias assistance with infrastructure projects, road construction, lines of credit and setting up an information technology centre in Myanmar, it said.

The agreement was signed the same day as detained Myanmar democracy leader Aung San Suu Kyis opposition party urged voters to reject a military-backed draft constitution, saying it was undemocratic and written under the juntas direct control.

The charter will be voted on in a referendum next month. The junta has also announced general elections in 2010.

The Indian ministrys statement quoted Prime Minister Singh as saying Myanmar needs to speed up its promised democratization process.

India shifted its policy from supporting Suu Kyi to engaging the juntas generals in the early 1990s, partly because of a desire for access to Myanmars large natural gas reserves.

India, Myanmar sign multimillion-dollar deal


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## Neo

*India seen importing sugar by 2010/11: LMC​*
** India exported 1.7 million tonnes sugar last year​*
MUMBAI: India, a key supplier of raws, may have to import sugar by 2010/11, a leading global consultancy said on Thursday, while a domestic brokerage said imports would happen sooner as domestic output drops. 

Refineries around the world, especially in the Middle East started viewing India as a dependable supplier of raws as the country, saddled with huge domestic stocks, entered the raw sugar export market in June 2007, when it sold 500,000 tonnes. 

After a record output of 28.4 million tonnes in the crop year to September 2007, output in India is likely to fall in the next two to three years as farmers shift from sugarcane to more profitable grains, traders said. 

India may have to import sugar in 2010/11 after exporting less in the next two seasons, said Gareth Forber, head of sugar research at LMC International Ltd. He said Indias exports were expected to fall to about 2.5 million tonnes next crop year, one million tonnes lower than the estimated 3.5 million tonnes this year. 

India, the worlds biggest sugar producer after Brazil, country exported 1.7 million tonnes last year. India can manage to export some sugar in 2009/10 but may have to import in 2010/11, Forber said. 

Trade officials say Indias closing sugar stocks would be 9.8 million tonnes in September this year when the current season ends and will fall to 7.9 million tonnes next year. The government had allowed mills to import raw sugar between 2003 and 2004 but asked them to export refined sugar in the same quantity in lieu of duty-free imports of raws. 

Daily Times - Leading News Resource of Pakistan


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## Neo

*Indian annual inflation seen at 6.62 percent​*
MUMBAI: Indias annual inflation rate is expected to remain close to a 14-month-high hit in mid-March due to higher food and fuel prices, a Reuters poll of 11 analysts showed on Thursday. The wholesale price index is forecast to have risen 6.62 percent in the 12 months to March 22, just off the previous weeks 6.68 percent, which was the highest reading since Jan. 27, 2007. Annual inflation was unacceptably high, Reserve Bank of India Governor Yaga Venugopal Reddy said earlier this week, adding the central bank was ready to act if necessary. The federal government, under pressure to check prices ahead of state polls this year and national elections due by next year, has cut import duties on edible oil and banned rice exports to curb inflation pressures. 

The central bank had wanted to contain inflation near 5 percent at the end of the fiscal year that ended on March 31. The inflation data will be released around noon on Friday. The wholesale price index is more closely watched than the consumer price index (CPI) because it includes more products and is also published weekly.

Daily Times - Leading News Resource of Pakistan


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## Neo

*India tells Microsoft to pay $175m in tax​*
NEW DELHI: India has asked US software giant Microsoft to pay $175 million in back taxes and interest for revenue earned from licensing its software here, the Times of India reported Thursday.

An Indian tax authority ruled Wednesday that Microsofts India subsidiary Gracemac Corporation should have paid tax on the $560 million it showed as revenue for the six financial years up to March 31, 2004, the report said. The dispute revolves around whether the amount qualifies as royalties or sales. The amount should have been taxed as royalties, the Commissioner of Income Tax ruled in New Delhi, citing language in the end-user license agreement shipped with the companys software. India taxes royalties at 15 percent, but the tax appeals body appeared to be levying a similar amount in penalties and interest charges. 

Microsofts India subsidiary did not pay taxes on the income, citing a double tax-avoidance treaty between India and the United States and noting that an overseas subsidiary paid tax in the US on profits from the software sales. Microsoft believes it is in full compliance with Indian tax laws and the income tax treaty agreement between India and the US, a Microsoft statement said. Microsoft is reviewing the order and will determine its course of action accordingly. The technology giant is expected to appeal the decision.

Daily Times - Leading News Resource of Pakistan


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## Malang

India Plans to Spend $300 Billion on Oil Exploration

By Archana Chaudhary

April 5 (Bloomberg) -- India will spend $300 billion over the next five to seven years on oil exploration and production, said M.S. Srinivasan, the Oil Ministry's senior official.

``The exploration and production business will become a $5.2 trillion industry in the next five to seven years,'' Srinivasan told reporters today in Mumbai.

India, Asia's third-biggest oil consumer, is competing with countries such as Nigeria to attract exploration by global producers as domestic output falls. The South Asian nation, the world's fastest-growing major economy after China, depends on imports for 70 percent of its oil needs.

India plans to invest $450 million in oil exploration and production in Venezuela, the biggest crude oil exporting nation in the Americas, and will sign an agreement with state-run Petroleos de Venezuela SA next week, Oil Minister Murli Deora said today in Mumbai.

ONGC Videsh Ltd., the overseas exploration unit of Oil & Natural Gas Corp., India's largest producer, is planning a venture with Petroleos de Venezuela to operate the San Cristobal area. These fields may hold reserves of as much as 250 million metric tons.

India must also compete with China, among others, to buy oil assets abroad as energy demand increases.

China, the world's second-biggest energy consumer, boosted its spending on crude oil and natural gas exploration by 9.6 percent between January and November 2007 to meet rising demand.

Only the U.S. uses more energy than China. 

Bloomberg.com: Asia


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## Malang

India's forex reserves swell by $4.5 bn

MUMBAI: India's foreign exchange reserves increased by a whopping USD 4.504 billion to stand at USD 309.16 billion for the week ended March 28.

The forex reserves had dipped by USD 1.8 billion a week before to stand at USD 304.65 billion.

Foreign currency assets increased by USD 4.498 billion to USD 299.147 billion, against USD 294.649 billion in a week-ago period, the data release by the Reserve Bank here said.

The Foreign currency assets expressed in US Dollar terms include the effect of appreciation or depreciation of non-US currencies such as Euro, Sterling and Yen held in reserve, the RBI said.

India's reserve position in the International Monetary Fund increased by USD 5 million to stand at USD 437 million.

During the period, gold reserves remained static at USD 9.558 billion while the Special Drawing Rights (SDRs) increased by a million to USD 19 million, the RBI said.

India's forex reserves swell by $4.5 bn- Forex-Markets-The Economic Times


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## Malang

FDI inflows cross $20 billion in April-February 2007-08

New Delhi, Apr 4 Foreign direct investment (FDI) inflows in February 2008 jumped by a whopping 712% over the same month last year to $5.67 billion, surpassing such inflows received in any single year since 1991 barring 2006-07. The country also received foreign direct investment worth $20.13 billion in April-February 2007-08, an increase of 70% from $11.88 billion in the same period a year ago. "The $20.13 billion inflow is the highest FDI into equity in the country during any year", an official statement said.

"Over the last 3-4 years, India has been attracting higher FDI, which is positive for investment and growth scenario," DK Joshi, director and principal economist at credit rating agency Crisil, said. From August 1991 to December 2007, the total FDI received by the country was worth $67.32 billion. Mauritius has been the top source of FDI with it accounting for around 45% of the total FDI inflows and $20.1 billion worth FDI coming into India from that country from April 2000-December 2007 period. USA is next with $4 billion (9.12% of the total) during the same period and UK $3.4 billion (7.8% of the total). The services sector (both financial and non-financial) received the maximum FDI worth $8.9 billion (19.84% of the total) during April 2000-December 2007 period, followed by computer software and hardware sector with $7 billion (15.65% of the total) during the same period.

In February 2008, China received $6.928 billion worth FDI, an increase of 38.31% over the same month last year. In January and February 2008, FDI flows were worth $18.12 billion.

The actual FDI inflows into China on a year-on-year in January was $112 billion, an increase of 109.78%. In 2006-07, China got $63 billion worth FDI. 

http://www.financialexpress.com/news/FDI-inflows-cross--20-billion-in-April-February-2007-08/292596/


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## Malang

Indian chip policy nets $16 billion in manufacturing proposals

BENGALURU, India  Electronics and semiconductor manufacturers here are looking to work with the Indian government to pull together proposals for establishing a chip fab, an LCD plant and solar manufacturing facilities.

The Indian government has so far received seven investment proposals worth over $16 billion. The proposals come in response to an incentive package for semiconductor and electronics manufacturing announced last year. Thursday's (April 3) announcement makes it clear that the biggest IC manufacturing plan announced so far, SemIndia, has yet to submit a proposal.

Proposals received so far cover the manufacture of polysilicon, single- and multi-crystalline ingots, wafers, solar cells, photovoltaic modules, LCDs, systems-on-chip and IC assembly, testing and packaging.

Reliance Industries, one of India's largest industrial groups, has proposed two facilities. One is for wafer fabrication, testing and packaging. Investment would total $4.6 billion over 10 years. The plant would employ 4,000 workers. Reliance is seeking state subsidies totaling more than over $800 million.

The second is for a $2.9 billion plant in western India to manufacture polysilicon, ingots, wafers and photovoltaic modules. The plant would employ 11,000 workers, according to the federal ministry of communications and information technology. Reliance is seeking state subsidies totaling about $600 million.

Meanwhile, Videocon Industries Ltd. has proposed a $2 billion LCD/TFT manufacturing plant in western India with annual capacity of up to 9 million panels. Videocon wants $500 million in subsidies to set up the LCD plant.

MoserBaer PV Technologies India plans to make silicon cells, modules and thin-film concentrators with an investment totaling $1.5 billion near Chennai in southern India. It is seeking subsidies totaling about $600 million.

Titan Energy Systems and KSK Energy Ventures also submitted proposals to manufacture solar energy components.

Signet Solar, founded by EDA veteran Prabhu Goel, said it plans to invest nearly $2.5 billion to make photovoltaics and related products with an annual capacity of 1 gigawatt. Signet has requested subsidies of about $500 million.

Under its special incentive package scheme, the Indian government would provide 20 percent of capital expenditures during the first 10 years for technology projects located in special economic zones. It would provide 25 percent of capital expenditures for projects outside of these zones. Incentives include financial subsidies and equity participation.

EETimes.com - Indian chip policy nets $16 billion in manufacturing proposals


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## Malang

Vedanta Resources plans to invest $15 billion in Indian mining sector

JAIPUR: London-based Vedanta Resources is planning to invest $15 billion in the mining sector in India and Africa by 2010.

Vedanta Resources executive chairman Anil Agrawal told ET that the company is planning to become the largest producer of metals in the world. We are targeting at achieving the 1 million tonnes per annum production capacity in copper and zinc while in Aluminium, where we have already touched the magical 1 million figure, we are trying to scale it up to 3 million tonnes per annum, he said.

The mining major is also focussing on ramping up the silver production to 500 tonnes per annum to become the largest producer of silver in Asia. We are investing Rs 500 crore for enhancing the silver production from 200 tonnes per annum to 500 tonnes per annum at our Udaipur-based facility in Hindustan Zinc. We would not only restrict ourselves to upstream activities but also explore markets for local consumption, Mr Agrawal said.

Vedanta Resources is active in copper, aluminium, iron ore and zinc. Now, it wants to foray into gold mining also. We want to acquire gold mines like Bharat Gold mine or Hatti Gold mine to expand our canvas. In fact, we are interested in public sector companies which are on blockeven if its Nalco, Hindustan Copper Limited or IFCI. We have proved that we can transform sick PSUs into profit making companies, Mr Agrawal said.

The groups optic fibre cable manufacturing subsidiary, Sterlite Technologies, is also planning to invest Rs 500 crore to ramp up the optic fibre production capacity to 12 million km from existing 4 million km. The expansion would take place at the companys subsisting plants in Aurangabad and the commercial production is expected by June 2009, Mr Agrawal said. The company enjoys 45% optic fibres share in the domestic market, and 4% share internationally.

Vedanta Resources plans to invest $15 billion in Indian mining sector- Metals & Mining-Ind'l Goods / Svs-News By Industry-News-The Economic Times


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## Neo

*Shining India is losing its lustre​*
NEW DELHI: Booming India is reeling from a flurry of bad financial headlines, suggesting the outlook for the worlds second fastest-growing major economy is not as rosy as it was, analysts say. 

Economic growth is losing pace and inflation is on the rise, meaning Indias central bank which has hiked interest rates nine times since 2004 to tame prices has little room to loosen monetary policy to spur activity, they say. 

The picture of very strong growth and low inflation in India is starting to give way to one of slowing growth and rising inflation, said Robert Prior-Wandesforde, an economist at HSBC in Singapore. 

Last Friday, inflation in Asias third-largest economy hit a nearly 10-month high of 5.02 per cent, pushing through the central banks ceiling of five percent for this fiscal year. 

Adding to the gloom has been a 25 per cent slide since Jan 10 in Indias benchmark Sensex share index whose 47 per cent jump last year made it one of the worlds top performers as foreign investors have bailed out. 

With the (global) economic turbulence, youre seeing a lot of risk aversion, said Amitabh Chakraborty, equities president of Mumbais Religare Securities. 

Also, the Congress-led government, which faces general elections in little over a year, is storing up fiscal trouble with its $15-billion loan bailout for farmers, big civil service pay hikes and tax cuts announced late last month in its populist, poll-geared budget, economists say. 

We think the fiscal deficit will increase due to the spending pressures, said Goldman Sachs economist Tushar Poddar. 

Economic growth is forecast by the government to slow to 8.8 per cent in this fiscal year to March 31, 2008 from 9.6 per cent last year the first deceleration in three years. 

Some economists project growth could fall to as low as seven percent next year due to the US-led global slowdown, aggressive monetary tightening and a sharp rise in the rupees value against the dollar, which has hit exports. 

Seven per cent growth would still be enviable by anaemic Western levels but is too low for India, where analysts say double-digit expansion is needed to help hundreds of millions escape a grim poverty trap. The stock markets slide has also cast a cloud over plans by firms to raise a projected $15 billion in IPOs this year nearly double the record 8.3 billion raised in 2007. 

Already, two high-profile firms have pulled their IPOs, including Emaar MGF a joint venture of Dubais Emaar, the worlds biggest property developer which abandoned its bid to raise $1.6 billion, citing indications of a US recession and global meltdown. 

The IPOs are key to expansion as much of the funds raised would be invested in plant and machinery, and improvements in Indias dilapidated infrastructure such as its potholed roads, shabby ports and unreliable power. 

Economists as major growth constraints routinely cite lengthy blackouts even in big metropolitan centres such as New Delhi. 

While Indias economy is better insulated than many other Asian nations from the global slowdown because it is not so heavily dependent on exports, it is not immune to the chill financial headwinds, analysts say. 

A lot of economic growth has been driven by risk capital, especially from the United States, which is slowing as foreign investors repatriate funds amid fears of a US recession, said Religares Chakraborty. 

For the time being, the government and central bank are making checking inflation their priority. 

The central bank and the government are signalling the risk to inflation is a bigger worry than the risk to growth, said JP Morgan analyst Rajeev Malik. 

Soaring world commodity and crude oil prices have alarmed the central bank while the government sees cutting inflation as crucial to its political fate, analysts say. Inflation has been blamed as a key factor in several state poll drubbings for Congress, which owes its 2004 general election win to support from Indias poor masses hardest hit by price rises.Prime Minister Manmohan Singh last month called inflation the cruellest tax as it hits the poor the hardest. afp

Daily Times - Leading News Resource of Pakistan


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## Malang

India's exports may touch $500 bln by 2013 - CII

NEW DELHI (Reuters) - India's exports can touch $500 billion in five years with more incentives to textiles, gems and jewellery, leather and engineering firms, the Confederation of Indian Industry (CII) said on Tuesday.

"In these four sectors, India needs to be among the top three exporters in the globe, which accounts for more than 50 percent of India's current export basket," said a CII report, ahead of the trade policy due on Friday.

CII said the export strategy should also focus on fast growing markets -- Latin America and the Carribbean and Africa.

Currently, India's exports account for just 3.5 percent of Africa's total import demand and just 0.7 percent of import demand of Latin America and Carribbean countries.

"These shares can easily be doubled with minimum efforts in the next two to three years," CII said.

CII said it expects India's exports to reach $500 billion by 2013, if the past growth trend continues. India's exports for the fiscal year 2007-08 are expected to be between $155 billion and $160 billion.

On Sunday, the Federation of Indian Chambers of Commerce and Industry said the trade policy for 2008/09 should extend export incentive schemes until 2010 and announce steps to cut transaction costs and ease procedures.

India's exports may touch $500 bln by 2013 - CII | Business News | Reuters


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## Malang

Indian telcos may invest $4 billion in submarine cables

Major telecoms companies in India, Bharti Airtel, Reliance Communications, Tata Communications and BSNL are planning to invest $4 billion in undersea cables, The Economic Times has reported.

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Building of multiple cable systems will enable the telcos to offer high bandwidth triple-play services including IPTV and HDTV. Users will be able to enjoy better broadband speeds.

Bharti Airtel has partnered with five international companies, including Google, to construct the 'Unity' submarine cable system linking the US and Japan. It is also part of two other plans - the 20,000 km-long Asia-America Gateway project and the I-Me-We system - to connect India to France via the Middle East.

Tata Communications is part of both the 6,500-km Intra Asia undersea cable consortium that will cover Hong Kong, Japan, Singapore, Philippines and Vietnam and TGN Eurasia cable system, which will link Mumbai directly to Paris, London and Madrid via Egypt. Both the investments form part of Tata Communication's plan to spend $2 billion on additional submarine cable systems to connect Asia, Middle East and Africa to Europe over the next five to eight years.

Reliance Communications is building the undersea links on it own. The FLAG NGN project will invest $1.5-billion in undersea cable to cover 50,000 km across 60 countries. Millenium Telecom, a joint venture between BSNL and MTNL will soon award contracts for both the West Asia and Singapore undersea links. 

Indian telcos may invest $4 billion in submarine cables - Computer Business Review


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## Malang

India puts South Asia on growth path: World Bank

WASHINGTON: With India expected to contribute much to new global energy demand in the next two decades and rising savings, South Asia is on the path toward sustainable economic growth, according to a new World Bank-IMF report.

But most countries around the world will fall short on the Millennium Development Goals (MDGs), a set of eight globally agreed development goals with a due date of 2015, warns the report released Tuesday ahead of the World Bank- International Monetary Fund meetings this weekend.

Though much of the world is set to cut extreme poverty to half by then, prospects are gravest for the goals of reducing child and maternal mortality, with serious shortfalls also likely in primary school completion, nutrition, and sanitation goals, it said.

"In this Year of Action on the MDGs, I am particularly concerned about the risks of failing to meet the goal of reducing hunger and malnutrition, the 'forgotten MDG'," said Robert B Zoellick, president of the World Bank Group.



Noting that South Asia has positive adjusted net saving, a necessary condition for sustainable economic growth, the report said the region is likely to halve by 2015 the number of people without access to safe drinking water, but will not achieve the same target for improved basic sanitation.

'The Global Monitoring Report: MDGs and the Environment - Agenda for Inclusive and Sustainable Development' stresses the link between environment and development and calls for urgent action on climate change.

"This year's high level meetings in connection with the MDG halfway point provide an opportunity to agree on priorities for action and milestones for monitoring progress," said Zia Qureshi, lead author of the report.

While South Asia accounted for less than six percent of the world's greenhouse gas emissions in 2000, India today is third among the top 10 emitters of industrial water pollution, with emissions of over 1.5 million kg per day, Outdoor air pollution places both adults and children at risk in South Asia. This is an acute problem in urban areas of fast-growing economies like India.

Earlier snowmelt and the loss of glacial buffering in the Hindu Kush-Himalayas will affect the seasonality of water supply for large segments of India's population, the report said.

The report warns that developing countries stand to suffer the most from climate change and the degradation of natural resources. To build on hard-won gains, developing countries need support to address the links between growth, development and environmental sustainability.

"Developing countries need more foreign aid and domestic resources to reach the MDGs. High economic growth and a stable macroeconomic environment remain essential for reducing poverty and increasing investment in health and education," said Dominique Strauss-Kahn, IMF managing director.

Though the overall aid landscape is expanding, official development assistance (ODA) - estimated at $103.7 billion in 2007 - has stalled, the report said.

To meet the G8 promises to increase aid by $50 billion by 2010, ODA must expand, it said noting that new donors like China and India are growing in size and importance.

With stronger efforts by the countries themselves and their development partners, most MDGs remain achievable for most countries, the report says. With this in mind, the report lays out an integrated six-point agenda, with strong, inclusive growth at the top.

The agenda also calls for more effective aid, a successful outcome to the Doha round of trade talks, more emphasis on strengthening programmes in health, education and nutrition, and financing and technology transfers to support climate change mitigation and adaptation. 


India puts South Asia on growth path: World Bank- Indicators-Economy-News-The Economic Times


----------



## Malang

India to Have 500 Million Mobiles by 2010

Nokia India expects that the country will have 500 million mobile phone users by 2010 - with 60 million of them having mobile video capability and 100 million using mobile music services. Speaking at the Goafest conclave, vice-president and managing director Nokia India, D Shivakumar, also said that half the subscribers would be accessing the internet via their mobile phone.

He said, Mobile phones are not just about voice anymore. Services delivered through mobiles would open up a big opportunity for the advertisers in India with a huge untapped potential.

He broke the market down into three core sections. The top end of the market will be limited to some 50 million customers with mid-range but value oriented customers making up some 150 million subscribers. The third tier, he said is unique to India and would be dominated by low cost basic handsets with minimal functionality.

India to Have 500 Million Mobiles by 2010


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## Malang

48 Indian companies in Forbes 2,000 List

NEW YORK: After billionaire businessmen, it is the turn of companies from India to shine on Forbes radar with as many as 48 firms making it to a list of the world's biggest companies compiled by the US magazine.

Led by India's most valued firm Reliance Industries and PSU major ONGC, all these 48 Indian firms named in the 'Global 2000 List' have a billion-dollar size, both in terms of turnover and market value.

The rankings, topped by British banking behemoth HSBC, has been compiled on the basis of a composite score of sales, profit, assets and market capitalisation.

HSBC is followed by industrial conglomerate General Electric, Bank of America, JPMorgan Chase and ExxonMobil, all four from the US, in the top five positions.

Two Indian firms, Mukesh Ambani-promoted RIL and ONGC are among the top 200 companies at 193rd and 198th ranks.

Earlier in March, Forbes had released its list of world's richest billionaires that included 53 Indian businessmen, with four of them, Lakshmi Mittal, Mukesh Ambani, Anil Ambani and KP Singh, figuring among the world's ten wealthiest.

RIL and ONGC are followed by two PSU majors State Bank of India (219th) and Indian Oil (303rd), the country's biggest private sector lender ICICI Bank (374th) and state-run power generation major NTPC (411th).

The Indian presence is almost evenly divided among the private and state-run companies.

While none of the Indian companies have managed to find a place among top 100, it has two firms run by people of Indian origin. Vikram Pandit-run banking giant Citigroup and Lakshmi Mittal-headed steel behemoth ArcelorMittal are at 24th and 38th positions respectively. Indra Nooyi-run beverage major PepsiCo has been ranked at 131st position.

Other Indian companies on the list include SAIL (647th) and Tata Steel (738th), telecom giants Bharti Airtel (826th) and Reliance Communications (846th), software major TCS (927), housing finance giant HDFC (949th), engineering heavyweight Larsen and Toubro (961st) and state-run oil firm BPCL (967th).

While Mukesh Ambani-led RIL has topped the list of Indian companies, there are also three firms belonging to the group led by his estranged younger brother Anil Ambani, Reliance Comm, Reliance Power (1,597th) and Reliance Capital (1919th).

According to Forbes, the Global 2000 companies have a combined revenue of $30 trillion, $2.4 trillion of profit, $119 trillion in assets and $39 trillion in market capitalisation. Besides, these companies employ 72 million people across the world.

While the list is still dominated by the US companies, the number of American firms has dropped by 61 from previous year and 153 from 2004. "In contrast, China, India and Brazil are rapidly adding companies to the list. India, for example, has 48 companies this year versus 27 in 2004," report said.

In terms of sectors, banking has the largest presence with 315 firms in the global list. Even among the Indian companies, one-third or 16 of them belong to this sector.

Other Indian companies include BHEL (1012), Infosys (1040), HDFC Bank (1093), Wipro (1102), Tata Motors (1111), HPCL (1112), NMDC (1134), ITC (1159), PNB (1166), DLF (1185), Hindalco (1205), GAIL (1249), Canara Bank (1305), Axis Bank (1361), Bank of India (1375), PGCIL (1413), Bank of Baroda (1477), Nalco (1478) and Unitech (1484).

The list also has Grasim (1527), Indian Overseas Bank (1737), IDBI (1744), PFC (1753), Union Bank of India (1759), Satyam (1763), Central Bank of India (1803), Syndicate Bank (1833), M&M (1919), Uco Bank (1935), Oriental Bank (1952), Suzlon Energy (1954) and Allahabad Bank (1996th). 

RIL, ONGC in Forbes' top global firms list- Corporate Trends-News By Company-News-The Economic Times


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## Bushroda

*India Industrial Production Grows Most in Four Months*
By Kartik Goyal

April 11 (Bloomberg) -- India's industrial production grew at the fastest pace in four months in February as record investment in power plants and factories boosted demand for electricity and cement. 

Production at factories, utilities and mines rose 8.6 percent from a year earlier after gaining a revised 5.8 percent in January, the statistics office said in New Delhi today. Economists were expecting a 7.5 percent increase. 

Billionaire Chairman Anil Ambani's Reliance Power Ltd. is spending $28 billion over the next five years to build 13 generating plants in the world's second-fastest expanding major economy. Growth may weaken in coming months as the highest borrowing costs since 2002 damp consumer spending. 

"We are seeing a slowdown in sales of consumer goods due to higher interest rates and inflation,'' said Venugopal Dhoot, chairman of Videocon Group, India's largest consumer-electronics maker. "Higher rates make it difficult for consumers to afford monthly installments.'' 

Manufacturing, which accounts for about 80 percent of India's industrial production, gained 8.6 percent in February from a year ago, according to today's report. Electricity output rose 9.8 percent, the most in 17 months. Mining grew 7.5 percent. 

Reserve Bank of India Governor Yaga Venugopal Reddy has raised the central bank's key policy rates nine times since October 2004 and increased the cash reserve ratio five times since December 2006 to check prices. 

Higher Inflation 

India's inflation accelerated to 7.41 percent in the week ended March 29, the quickest in more than three years. Higher prices may prompt Reddy to again raise the cash reserve ratio, or the proportion of deposits that commercial banks must place with the central bank. 

The Reserve Bank kept the key repurchase rate unchanged at 7.75 percent at the last monetary policy announcement on Jan. 29. The next statement is scheduled for April 29. 

"We expect a 50-basis-point hike in the cash reserve ratio before or at the April 29 policy'' meeting, said Rajeev Malik, senior economist at JPMorgan Chase & Co. in Singapore. "The central bank will prefer tightening money over raising policy rates and rupee appreciation.'' 

India may settle for less growth in its fight against inflation, Finance Minister Palaniappan Chidambaram said March 28. He expects Asia's third-largest economy to expand about 8 percent in the fiscal year that commenced on April 1, the slowest since 2005. Growth has averaged 8.7 percent since 2003, the quickest after China among major economies. 

*Global Slowdown* 

Concern over the impact of a slowdown in global demand on the Indian economy has contributed to this year's 22 percent decline in the Bombay Stock Exchange's benchmark Sensitive Index. The gauge rose 0.8 percent or 112.54 points to 15,807.64 at the 3:30 p.m. close in Mumbai. 

Other Asian economies are also suffering from weaker demand for their products. China's output grew 15.4 percent in January and February, the slowest pace in more than a year. South Korea's production growth eased to 10.1 percent in February from 11.3 percent in the previous month. Singapore's output rose 10 percent, slower than 12.8 percent in January.


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## Bushroda

*Govt sets $200 billion export target*
12 Apr 2008, 0001 hrs IST,Prabhakar Sinha,TNN

NEW DELHI: Government on Friday announced an array of incentives in its annual review of the Foreign Trade Policy to achieve an export target of $200 billion in 2008-09 as against $155 billion in 2007-08. However, keeping in the mind the worrying factor of rising inflation, it has removed incentives on exports of cement and steel to boost supply of these commodities in the domestic market. 

In the last four years since 2003-04, India's export increased by 2.5 times to $ 155 billion in 2007-08 from $63 billion, registering an annual compounded growth of 23%. However, the country missed the target of $160 billion in 2007-08 due to a sharp 12% appreciation in rupee in this period. 

Encouraged by good performance of industry, commerce and industry minister Kamal Nath fixed an ambitious target of 5% share of world trade by 2020 as against 1.5% in 2008-09. Considering global trade is increasing, Nath said, India needs to increase its exports eight-fold in absolute terms to meet this target. In other words, exports should touch $1.25 trillion by 2020. an average growth rate of 25%. The target looks difficult but not impossible to achieve, Nath added. 

In 2008-09, Nath said country's total merchandise trade  exports plus imports  will be almost $ 400 billion. If the trade in services is added to this, India's commercial engagement with the world would be around $525 billion. India's total trade in goods and services is now equivalent to almost 50% of its GDP. Nath said during the last four years, increased trade activity has created 1.36 crore new jobs. 

To achieve $200 billion target, Nath announced a number of steps like extension of I-T benefit to the firms operating as export oriented units (EoUs) for one more year up to 2009-10, continuation of Duty Entitlement Passbook Scheme till May 2009 and reduction of import duty on capital goods under EPCG scheme to 3% from 5%, a move to promote the industry whose growth slowed down to 8.7% during first 11 months of 2007-08 from 11.2% a year-ago. 

Nath also announced the extension of availability of cheap loan at 6% to sectors like textiles and garments and SMEs, which are affected by rupee appreciation. This will cost government Rs 1,050 crore in 2008-09 as against Rs 600 crore in 2007-08. Benefits under the other schemes will cost Rs 1,000 crore. The minister also announced the formation of the Export Promotion Forum for telecom sector. He said the exports from the sector are likely to touch Rs 4,000 crore in 2008-09.


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## Bushroda

*India plugs in*
Matt Walker
Business Spectator, Australia

Several years ago, Asia gained a reputation as global broadbands petri dish, a bounded environment where operators were testing a variety of technologies, business models, and network architectures to see how the market would grow and evolve. 

Now India is verging towards this status for the emerging worlds telecom industry. Indias carriers are adopting new operating models, sharing network resources, and leapfrogging technology in pursuit of results rather than industrial policy, and the country is emerging as an anchor of global networks. 

Improved profitability at Indias increasingly ambitious private telcos, combined with the economys continued resilience, further support this notion. 

*Revenues, capex, and income jump in 2007* 

Indias big four private telcos continue to dominate. For 2007, total company (wireline and wireless) revenues for Reliance, Bharti, Idea, and Spice amounted to $12.05 billion, up 50 per cent from 2006. 

Capex jumped 63 per cent in the same period to $7.31 billion, pushing capital intensity further (and unsustainably) skyward to 61 per cent. 

Net income growth, though, exceeded revenues, resulting in an average net margin for the year of 25.0 per cent, up from 20.8 per cent a year earlier. 

Operating cash flow, defined here as revenues less opex less capex, was negative due to the high capex burden of build-outs: it sank from -$1.3 billion to -$2.31 billion. 

Looking beyond Indias big four private telcos and to South Asia as a whole (adding in MTNL, VSNL, Tata Teleservices Maharashtra, Sri Lanka Telecom, and PTCL of Pakistan), 2007 results were broadly consistent with those of the big four. 

Group revenues grew 34 per cent to $16.03 billion, net income grew 44 per cent (i.e. a bit faster than revenues) to $3.10 billion, capex grew 49 per cent to $8.24 billion, and operating cash flow dropped from -$1.00 billion to -$2.10 billion. 

Results for the subset and the group are consistent largely because Indias top four private telcos dominate the data set, accounting for 75 per cent of 2007 South Asia revenues and 89 per cent of capex. 

*Capex strategy* 

Looking at India, the picture is of large, ambitious carriers spending ahead of demand in hopes that revenue growth and operational efficiencies will allow them to meet their future debt burdens with ease. 

We have seen this before many times, most similarly in China during the first half of this decade. There, though, competition  despite the outside impression of vigor and chaos  is heavily controlled by the state, and key carriers are national in scope and centrally managed. 

India is much more of a free-for-all, with private carriers, state-owned, and formerly state-owned (e.g. VSNL) carriers competing under a patchwork of licensing and competitive regimes across the country. (Details can be found at the Telecom Regulatory Authority of India (TRAI) website; its quarterly Performance Indicators reports are especially useful.) 

If anything, the contrast with China may make investors jittery about Indias relative unpredictability. Much of Indias current capex relates to carriers race to blanket the countryside with cellular base stations. Given the size of the country and the large, scattered rural element, this is a huge task. On the plus side, though, this is a job which is about to be eased due to pending regulatory allowance of inter-operator sharing of the active elements of mobile networks: antennas, feeder cables, nodes, radio access network, and transmission. 

Leasing/sharing of passive infrastructure is already widespread: one carrier, Spice, booked 30 per cent of its 2007 revenues on passive infrastructure leasing/rentals. High capex also stems, though, from the global network expansion of Reliance (via its Fibre Linkup Around the Globe subsidiary, or Flag); capex incurred by Indias other global giant, Tata/VSNL, is not counted here since Tata does not publish the data, but it is similarly high. 

Some of these build-outs are huge: Reliances four-stage FLAG Next Generation Network (NGN) will cost $1.5 billion to complete. If you can make money here, you can make it anywhere. 

We all know Indias mobile sector has boomed over the last few years, with multibillion-dollar contracts almost becoming the norm. 

For vendors, though, unless they have immense scale in wireless infrastructure  able to match the sub-$100/line prices demanded by the market (in GSM, anyway)  India is sometimes viewed as a toss-up, a take it or leave it proposition. 

This is a mistake. Vendors cant afford to ignore India. The attraction is not simply in getting some small slice of carrier capex. It is true that Indias share of global telecom capex is under 5 per cent, Indian carriers are even more price-sensitive than others around Asia, and entry barriers can be high. 

However, India is in many ways a window to the vast untapped developing world. Those who thought China would provide this lesson should think again: China is a world unto itself, with a whole different set of rules and its own telecom infrastructure industry. 

For those who think theyve missed the boat in India, consider that 3G is not there yet, and the internet barely exists. The question of how to spread internet connectivity to the masses, given the countrys low income and PC penetration levels, is still unsolved. 

Nokia espouses its multimedia computers (i.e. the N-series mobile handsets) as a possible solution, but theyre too expensive and limited. Whether we like it or not, computer monitors remain an essential part of the internet experience. 

Low-cost computers such as the One Laptop Per Child (OLPC)-designed hardware, along with Intels Classmate PC, could help to bridge gaps and bring new revenues to operators able to think innovatively about services. But with fewer than 40 million fixed lines (a number thats shrinking each quarter) and a 2010 target to reach 10 million broadband subscribers, there is still much work to do in terms of connectivity, devices, and services. 

A major challenge is lowering the cost of building wireless infrastructure in suburban and rural areas. NSNs Village Connection (VC) program, which envisions using individual households to host miniaturized base stations and giving household owners a share of usage revenues, is one small step among many others being taken. The point is not whether NSNs VC program will work, as it very well may not, but the fact that innovation is needed from both a technology and business model perspective to economically serve Indias population, and the next billion after that. 

*Petri dish?* 

Because of its scale, openness, policy flexibility, and relatively small technology industry (thus avoiding the marriage between telecom and industrial policy seen in China), India is becoming a vital testing ground for how some telecom technologies and business models can perform in the developing world. 

Factors in support of an Indian role as a petri dish include the following: 

 WiMax

Very soon there will be multiple nationwide fixed WiMax rollouts aimed at bridging the copper gap, offering in many cases wireless DSL (equivalent) service. 

Among private players, Tata/ VSNL is most aggressive on this front, but BSNL has allocated up to $750 million for a build-out that includes a franchise option to accelerate deployment. 

Perhaps more than any other large market worldwide, India is well positioned to exploit the benefits of WiMax as an access technology. Given that many developing markets in Africa, Indonesia, CALA, and elsewhere lack strong copper infrastructure, India will be an important testing ground for the technology and its support infrastructure. 

For instance, many optical vendors (ZTE, ECI, Nortel, etc.) are positioning themselves to play into WiMax backhaul markets in India. 

 Leapfrogging

Other than WiMax, there are a fair number of cases across the technology spectrum where Indian carriers are positioned to be on the leading edge of new deployment. The baseline reality of low average return per user (ARPU) cannot be ignored, but Indian carriers are nonetheless often more flexible and innovative about technology deployment than others. For instance, PBT (provider backbone transport ethernet enhancement) is of high interest in India, and 40G network technology is also being considered. 

 Infrastructure sharing

As noted above, Indian carriers, with regulators facilitation, are about to engage in an infrastructure-sharing experiment unlike any tried to date elsewhere on a large scale. 

This sharing is both the only way to meet government rollout targets, and potentially a much more efficient way to run the networks, allowing carriers to focus on the user interface and all that it entails (billing, services, portals, etc.). 

Prior to this, private telcos had already been actively pursuing alternative internal operating models, with Bharti leveraging IBM and Wipro for services, and Tata securing its TCS sister companys assistance with activities usually done with direct staff. In a sense, Indian carriers have the opportunity to redefine what it means  from an operational perspective  to be a telco, and bring this experience elsewhere around the developing world. 

 Global connectivity

Reliance/Flag and Tata/VSNL have vast undersea cable assets and are building a strong case to compete directly with AT&T, Verizon Business, and BT on the global enterprise/ISP/wholesale services front. 

The fact that both have a large domestic market, highly valued by overseas enterprises for things like business process outsourcing services, is a big plus to them. 

Reliances purchase of Yipes and Tatas rumored rollout of national Ethernet services in India further both their cases to compete in the big leagues. As these carriers become larger players globally, vendors will benefit from having close relations with them. 

 Macroeconomic climate

Indias economy is less centrally managed than Chinas, yet as of late it is performing similarly. Real economic growth is in the neighborhood of 8-10 per cent, with the Finance Minister projecting 8.8 per cent for the fiscal year ending March 2009.

 Venture capital

Roughly $1 billion of international venture capital flowed into India last year. Beneficiaries include some telecom equipment/design firms such as Tejas and Telsima, but fortunately for foreign vendors, most of the funds targeted the services sector, with a heavy lingering slant towards outsourcing. 

*Matt Walker is a senior analyst with Telecommunications and software consulting firm Ovum*


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## Bushroda

The Global 2000
*Indian Summer*
Tim Kelly 
FORBES, NY
04.21.08

*For Japanese outfits like Seiko, it is better late than never to capitalize on a huge new consumer market.*

Atsushi Kaneko climbs the stairs to his second-floor office in the bustling southern Indian metropolis of Bangalore. Tilting his head at the elevator doors below, he pauses. The 50-year-old boss of Japanese watchmaker Seiko's new Indian unit is, he reveals, scared of using it since the landlord pasted a notice at the entrance limiting the number of passengers to four instead of the six it's supposed to be able to carry. "I asked why, but got no straight answer," he explains, continuing up the stairs.

Dispatched to India last year by Seiko Holdings to set up the local sales company to hawk watches to the burgeoning middle class, Kaneko is discovering India's hazards. Japan's auto executives were swift to tap its economy; others, however, wary of risks apart from the elevators, steered clear.

The sustained nature of this boom is now easing those jitters, and a Japanese scramble to set up shop is on. Many of the new arrivals are finding that rivals from Europe, America and elsewhere got there before them.

"There is a queue of foreign companies waiting to enter India, so the Japanese have to be aggressive; less analysis, just get on with it," advises Kushal Pal Singh, who as the billionaire head of one of India's biggest property developers, DLF, is one of the subcontinent's leading businessmen.

India is on a shopping spree, with consumer spending forecast to quadruple to $1.8 trillion by 2025. In the first half of the most recent business year TV sales jumped 15%, and in the first quarter sales of PCs rocketed 47%, according to IBEF, an Indian government research unit. A quarter of a billion Indians already own mobile phones, and 5 million new owners join them every month.

In 2005--06, the latest figures, India's imports from South Korea--an economy a fifth as big as Japan's--stood at $43 billion, exceeding the $36 billion from Japanese factories. Samsung and LG dominate sales of LCD televisions with a combined market share of 65%. Sony (nyse: SNE - news - people ) trails with 14%. "We brought our LCD TVs into India earlier than our competitors," Samsung spokeswoman Eunhee Lee explains. Last year sales volume almost quadrupled to 170,000 sets.

Back in Bangalore Kaneko is upbeat. "Had we come six months later, it may have been too late," he concedes. But he sees a growth path. Standing in his way is Switzerland's Swatch Group and its stable of luxury watch brands, including Omega, Tissot, Hamilton and Longines.

So far sales are only a blip for the $2 billion-in-revenue watchmaker and its sister company and movement supplier Seiko Epson with $12 billion in sales. Kaneko measures success by how many inches of watch-store display space he steals from Swatch. After all, he says, letting Seiko in means "they have to kick somebody out." Store owners have told the Japanese manager the Swiss have warned them of a pullout if they give shelf space to the Japanese timepieces. Though empty so far, the threat has nonetheless "slowed down our entry into the market a little," admits Kaneko.

Finishing his meeting with public relations officials hired to spread Seiko's name in India, Kaneko and his sales and marketing head, Niladri Mazumder, pile into the company's chauffeured Toyota (nyse: TM - news - people ) van and head out into the mayhem of Bangalore's midafternoon traffic to meet watch-storekeepers at malls thronged with weekday shoppers. Owners who free up the best display space get more than a pat on the back, the Japanese manager explains--they get a discount from the usual wholesale price. Kaneko also lavishes trophies on the bestselling stores and is mulling taking some of the owners on a trip to Japan. Those tactics have so far got Seiko into 81 outlets in India, way ahead of expectations, Kaneko boasts.

A rapid rollout of mall shopping space in the country has helped to entice consumer product lines like Seiko. But geopolitics also played a role. In 2005 Tokyo's interest surged as a worsening in Japan-China relations inspired then prime minister Junichiro Koizumi to begin wooing India with promises of money to build roads and rail lines, including billions of dollars to construct a freight corridor linking Delhi in the north to Mumbai, 720 miles south. A year later direct investment from Japan had doubled to $515 million. India is also the biggest recipient of Japanese development aid, including $100 million in low-interest loans to improve distribution in Bangalore.

The timing was a nice coincidence. Samir Sathe, founding director of Mumbai's Universal Consulting, which helps foreign companies enter India, says the luxury-product market was already expanding by 20% a year as Seiko finally entered the fray.

In the 1970s, he explains, when few Indians had the cash to buy luxury brands, owning a Seiko watch, either bought on a foreign trip or sent by overseas relatives, was all the rage. "When I was a kid, it was a big thing if your dad had one," he says. His father still owns the Seiko watch he bought back then. But the company then dropped the ball.

"The rise of India took Japan by surprise," says Kazumasa Kuboki, who runs the Bangalore branch of the Japan External Trade Organization (Jetro). Seiko is now one of 90 Japanese firms to make it to Bangalore, with Toyota--which has a plant there--the biggest. Already the best land for factories and offices is gone, and any new entrants will probably have to look 60 miles outside the city for a plant site, Kuboki says.

Meager domestic investment in roads means traffic in the metropolis of 6 million is gridlocked. The cacophony of honks and beeps from auto-rickshaws, cars, trucks and scooters vying for space is an unbroken accompaniment to life in the city. A metro line to ease the congestion won't be finished for six years. In the meantime, as families give up perching on scooters in favor of the comfort of cars, including Tata Motors (nyse: TTM - news - people )' new low-cost offering, the road mayhem will worsen.

But it isn't just traffic that might slow some of Seiko's deliveries. Bureaucracy and corruption, or both, remain a hang-up. Customs officials who check shipments of watches from Japan recently asked for "speed money," Kaneko observes. He didn't pay.

Life for the 330 Japanese living in Bangalore can be lonely. Though two Japanese restaurants serve the small community, none of the city's big markets sells the Japanese staples of sticky rice, soybean paste or fish stock, says Jetro's Kuboki. There are no direct flights back to Japan and no full-time Japanese schools for expats' children. Many, like Kaneko, leave their families in Japan.

Then there are the everyday hazards.

Over lunch Kaneko and his fast-talking sales manager Mazumder, a native of Kolkata, chat about the building's new elevator rules, after walking up two floors to an Italian eatery. Pointing to the road below, Mazumder tells the boss he chances the lift because he might just as easily be killed crossing the street. "Why take the extra risk?" Kaneko responds. Mazumder pauses. When doing business in India, he advises, "You have to jump into the water to see where the sharks are."


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## Bushroda

*A clean, green rail Metro... Melbourne? Sorry, try Delhi*
Matt Wade
The Age, Australia
March 29, 2008






*Shiny, punctual and praised by all, Delhi's new Metro system has revolutionised transport for the Indian capital's soaring population.
Photo: Matt Wade*

AS MELBOURNE tinkers with its largely pre-World War II public transport system and puts up with congested roads, commuters in the Indian capital, New Delhi, are revelling in a state-of-the-art Metro.

Although India's average income is only about one tenth Australia's, its rapidly growing cities are pouring money into new rail networks.

Delhi had no metropolitan rail system before part of its new Metro was opened in 2002. Now, authorities expect that, by 2020, it will be bigger than London's underground.

The rail system has changed the lives of commuters such as Vimal Chandra, a 55-year-old public servant. Mr Chandra used to spend 2½ hours on crowded buses getting to work. That has been cut to just over an hour.

"If you have ever used Delhi buses, you know how good the Metro is," he said. "It has made a big difference to the city and, at my age, it has come as a great relief."

Trains arrive every four minutes during peak times. The clean, air-conditioned carriages are a major attraction given Delhi's extreme summer heat. Every passenger is searched before entering a station and security staff patrol platforms and carriages.

Accounting student Sunil Kumar Maurya, 22, said it had become Delhi's "lifeline". "It costs more than the bus, but it has halved my commuting time. This city could not survive without it now."

At least nine Indian cities are building or planning rail metros including the booming IT centres of Bengaluru (formerly Bangalore) and Hyderabad.

The contrast with Australia's big cities is stark.

"Since the Second World War there has been very little expansion of urban public transport systems in Australia and the quality has declined," said Graham Currie, Professor of Public Transport at Monash University's Institute of Transport Studies.

"The answer for both Australian cities and Indian cities is to invest in mass transit systems."

And there are striking differences between Delhi's Metro and the fashions shaping the development of public transport in Australia. The Delhi Metro is not privately owned and funded like many public transport projects proposed in Australia. Delhi Metro Rail Corporation, the company building and operating the system, is a joint-venture by the Indian Government and the Delhi State Government.

Unlike Australia's Federal Government, which has left urban transport to the states, India's national Government has taken a big role in Delhi's rail project.

Delhi's population has ballooned from 5.7 million in 1981 to around 17 million and is projected to reach 19 million by 2011. Its roads are crammed with more than 5 million vehicles  more than in Mumbai, Kolkata and Chennai combined.

The Delhi Metro will be completed over the next 20 years. The first phase was finished in late 2005, ahead of schedule and below budget at a cost of $2.5 billion. It has three interconnecting lines, serviced by 59 stations, 13 of which are underground.

One line runs under old Delhi, which has buildings from the 17th century Mughal empire. At a station near Delhi's famous Red Fort, passengers emerge from spacious underground platforms into alleys crammed with small traders that are a hallmark of the old city.

This second phase is scheduled to open before Delhi hosts the 2010 Commonwealth Games.

"By 2010 the Delhi Metro will already rank among the largest metros in the world," said a spokesman for Delhi Metro Rail Corporation, Anuj Dayal.

The system turned an operational profit from the first day. What's more, the Delhi Metro's exceptional green credentials were underscored in January when it became the world's first rail project to be registered by the United Nations under the Clean Development Mechanism.

As a result, the Metro can claim carbon credits worth more than $3 million a year for the next 10 years, thanks to an energy saving mechanism in the braking system of its rolling stock. The company is also seeking carbon credits for reducing emissions by shifting commuters from buses and cars to rail.

"The 650,000 passengers we carry each day means 40,000 less vehicles on Delhi roads," Mr Dayal said.

The unassuming 72-year-old railway engineer who heads Delhi Metro, Elattuvalapil Sreedharan, has become a national hero. He was recently named Indian of the Year by the CNN-IBN news channel for achieving "the near-impossible, for breaking through bureaucratic red tape and defying the naysayers of modern infrastructure-building".

Indeed, it's hard to find anyone who has a bad word to say about it.


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## Bushroda

*India's African inroads* 
Nic Dawes
Mail & Guardian Online, South Africa 
10 April 2008

"We are not the Chinese." This was the message from India this week as Indian Prime Minister Manmohan Singh's government used the first India-Africa Forum Summit in Delhi to redefine the way in which its role in Africa is viewed.

The government went out of its way to pre-empt suggestions that the relatively low-key summit was an attempt to catch up, following last year's China-Africa jamboree in Shanghai, but it was even more concerned to distinguish India's conduct in Africa from what is seen as a rapacious approach by Chinese companies to minerals exploitation.

Minister of State for External Affairs Anand Sharma, one of the prime movers behind the summit, said of India's relationship with the African continent: "It is time tested, it is distinct, it cannot be compared to any other country."

Sceptics, he insisted, were not aware of the deep ties established by Mahatma Gandhi and India's first post-independence leader, Jawaralal Nehru, who both believed India's and Africa's freedoms were deeply entwined.

Speaking to a group of African journalists, Minister of State for Commerce Jairam Ramesh was more blunt: "The first principle of India's involvement in Africa [is] unlike that of China. China says go out and exploit the natural resources, our strategy is to go out there and add value."

Indian companies working on infrastructure projects in Africa, he said, would not bring the labour force with them, as the Chinese prefer to. Instead, Indian engineering teams will employ and train local staff.

But clearly, access to resources is a crucial policy concern for India, which requires massive quantities of raw materials to fuel its burgeoning economy. The distinction it is trying to draw with China concerns how it goes about securing that access.

Ramesh travelled ahead of the summit to Namibia and Angola where he worked on a package of deals to acquire direct access to west coast oilfields and rough diamonds.

India's vast diamond-processing industry consumes about $10-billion in rough stones annually, adding about $4-billion in value, according to commerce ministry figures.

Ramesh believes direct access to those rough stones will more readily be made available if India takes account of African desires to establish local cutting industries. He punted plans to help set up processing centres and train local workers.

"Nine out of 10 diamonds mined in Africa come to India for cutting and polishing ... how do we help these countries to move up the value chain?" he asked. "The Africanisation of the diamond industry is not a threat to India but a great opportunity."

Similarly in Angola, where state-owned ONGC-Videsh wants a slice of lucrative offshore oilfields, India is proposing to take a stake in the 200 000-barrel-a-day Lobito refinery, to set up a petrochemicals research and training facility and, perhaps, to build a 300MW gas-fired power station.

This combination of infrastructure investment, education and hard-nosed business is seen by Indian officials as a model for sustainable long-term engagement, which, they argue, will enable them to do business in Africa despite the fact that they lack both the resources and the centrally coordinated strategy that has driven the rapid expansion of Chinese activity on the continent.

The most substantial announcements at the summit, however, concerned trade and development finance. Singh announced a preferential trade scheme for the world's 50 least-developed countries, 34 of which are in Africa. 

The scheme will eliminate duties and quotas on a wide range of primary commodities and finished goods, including cotton, cocoa, aluminium ores, copper ores, cashew nuts, cane sugar, clothing, fish fillets and gem diamonds, improving access to India's still-protected markets for the poorest countries, but also helping reduce input costs for Indian manufacturers -- a crucial domestic issue as inflation brings increasing pressure on India's ruling coalition.

African leaders pressed for the preferences to be expanded to the whole of Africa, Tanzanian president and African Union chairperson Jakaya Kikwete told the summit, but it seems further trade liberalisation will be slow and probably bilateral. 

India will, however, double the lines of credit it offers African countries to fund investment with an Indian component to $5,4-billion, offer $500-million in aid grants and increase its array of educational scholarships and technical training programmes for African students.

The summit agreed on a broad cooperation framework in agriculture, trade, education, governance, the reform of global institutions and infrastructure, which is due for review at the second summit, planned to take place in Africa in 2011.

*Nic Dawes travelled to Delhi as a guest of the Indian government*


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## Bushroda

*India's formula for success*
By Gary Meenaghan 
Emirates Business 24/7, United Arab Emirates 
Thursday, April 10 , 2008



Formula Ones Force India may have yet to score any championship points this season, but when it comes to driving motor sports forward in the Subcontinent the competitions newest team is firmly on track with its business plan  a strategy that is sure to put India in pole position to benefit from the lucrative F1 industry.

Indias economy is already making more noise than the rickety auto-rickshaws that speed down its busy streets, but with a population of 1.2 billion and an expected economic growth rate of 8.5 per cent, it is little wonder F1 Chief Bernie Ecclestone is looking to take his Grand Prix circus to New Delhi. 

One person ahead of the pack is Dr Vijay Mallya (pictured above), the Indian business tycoon who paid £70.5 million (Dh528.7m) for Spyker F1 in October 2007, expeditiously re-branded them Force India and generated overnight awareness in his home country. 

In India, we are now seeing companies who are interested in sponsoring Formula One, he says. Already there have been several approaches from people who want to buy shares in the team.

Mallya is no stranger to leading from the front. Aside from his days driving Formula One cars for kicks, the CEO of Kingfisher Airlines also owns Kolkatas East Bengal football club and recently paid $111.6m (Dh409.5m) to acquire Bangalore Royal Challengers, one of the eight franchises in the inaugural Indian Premier League.

Marketing his cricket side in a country of cricket-lovers is unlikely to keep the flamboyant 52-year-old awake at night (leave that to the extravagant parties aboard his yacht, Indian Empress), but garnering interest in Formula One, a sport so far widely ignored by the majority of the Indian population, is sure to prove a far harder task.

Mallya, however, is confident that Force India can promote the sport adequately and, in time, create a fan base other countries can only dream of.

Cricket is cricket in India, but I think the popularity of Formula One is on the rise, says Mallya. The two sports are not mutually exclusive, they complement each other and there is a huge potential audience out there for F1.

We have such a huge population that even if we identify 300 million people out of 1.2 billion who might be potential followers of Formula One; that is the size of Europe. That is big enough.

So far, so good it would seem. Having invested $120m into the team during the close season, Mallya has witnessed more than 14,000 people register as members on the teams website in the past four months. Last year, in a similar scheme, Mallyas Kingfisher group, then-sponsors of Toyota, managed to entice just 80 registrants during the entire year. 

But nobody is under any illusions. F1 favourites Ferrari and McLaren can boast of several hundred thousand registered members  Colin Kolles, however, team principal of Force India and the man in charge of producing success on the track, says such is to be expected from teams with rich histories.

We are a small team trying to fight with the big teams and do the 
best we can, he says.

You must be realistic; McLaren are 40 years old during the past four years our objectives have been to basically rescue and stablilise the company, then develop. Now the team is stabilised, it is just the process of taking off, he says.

Taking off has gone according to plan thus far. Mallya demanded the team evolve from back of the grid also-rans to midfield contenders and during the first three Grands Prix of this year lead driver Giancarlo Fisichella has finished 12th on two occasions. 

But, it appears, the problem for Force India is that the Indians cannot feel the force. They cannot relate: Fisichella is Italian and the teams second driver, Adrian Sutil, was born in Starnberg, Germany. 

All parties  owners, team principles and drivers alike  recognise that a team titled Force India, marketed towards the Indian population and vying for a fan base in the Subcontinent would heavily benefit from having an Indian Formula One driver.

Enter 24-year-old Karun Chandhok.

Chandhok was born in Madras, is personal friends with Mallya and Ecclestone and currently competes in the GP2 Series, one level below F1.

Having successfully raced in the Indian National Championship and Formula Asia series, he moved to England in 2002 to compete in F3. Within six years, he was enrolled in the Red Bull Junior Development Programme and 11 months later was sharing a track with Michael Schumacher, Kimi Raikkonen and Fernando Alonso as he was invited to close season testing in Spain. He drove for the Red Bulls F1 outfit.

I was surprised how close a GP2 car is to a Formula One car, he says about his testing experience. It was not like I got in and was like, Wow, this is scary. Do not get me wrong, it is everything you dream of. It is everything I dreamt of and fully lived up to its expectations, but at the same time it was not something I did and thought, I am out of control here. That is when I thought, God willing, if I get to Formula One one day, I think I can do a good job.

His nationality and ties to Mallya have naturally sparked rumours he will defect from Red Bull and race for Force India next year.

Kolles says his team keep a keen eye on the driver and Fisichella says he has a good chance of joining Force India. 

But Chandhok himself is adamant he will not make his F1 fantasy a reality until he is ready  and insists patriotism will play no part in his decision.

I do not want to be in F1 just to be in F1, he says. I do not want to be a one-year wonder. I do not want to do a year at Force India, everyone gets their marketing kicks out of me then I disappear.

As a driver, I want to do as best as I can in races and if that means I have to drive for whoever, then I will do that. It would be nice if Force India can get competitive enough to get in that position soon, but I have to separate the emotional and the practical sides.

Chandhok is an articulate young man with a maturity that belies his tender years. When asked how important it is for Force India to have a native driver he smiles wryly and responds with confidence: I am sure their marketing department would love it.

It is not rocket science is it? For BMW to have a German driver makes sense, for Toyota or Honda to have a Japanese driver makes sense, for McLaren to have Lewis [Hamilton] makes sense. But it is two very different things to be beneficial and to be essential, adds Chandhok, who takes to the track at Dubai Autodrome this weekend in the GP2 Asia series. I do not think because they are called Force India they have to have an Indian driver. I think by being called Force India, what they should be able to do is to generate Indian sponsors, Indian commercial interests, and by having an Indian driver that should help them do that.

India is no longer a poor country. There is now a middle-class demographic of 400 million to 500 million who can afford to pay money to go watch a Formula One race. There is money there now and that is why it makes commercial sense to get into India. 

An Indian Grand Prix makes sense and, for me, it would be a dream come true to be on the grid in 2010. Whether that will be in the colours of Force India remains to be seen, but either way, come 2010, India look destined to be in the Formula One fast lane. 

Mallya certainly believes so. We will be on the podium by then for sure, says the 962nd richest man in the world. Would you be willing to bet against him?

The ever-changing face of an f1 team

1991 Businessman Eddie Jordan creates Jordan Grand Prix and signs Andrea de Cesaris and Bertrand Gachot as the teams drivers. Gachot is sent to prison mid-season and is  initially at least  replaced by Michael Schumacher.

2005 After years of financial instability, Jordan are sold to Midland Group for $60m (Dh220.2m). Indias first Formula One driver Narain Karthikeyan is named as the teams lead driver. 

2006 Less than two years after his purchase, Canadian businessman and CEO of Midland F1 Racing, Alex Shnaider, sells to Spyker for $106.6m.

2007 Spyker F1 team compete in 17 races and fail to score any points. At the seasons end they sell up to Vijay Mallya for $139m. The business tycoon renames the team Force India.

PROFILE: Karun Chandhok

2000 Races in the Indian National Championship. Starts all 10 races in pole and wins seven of them. The result is that he not only wins the INC title, but breaks the record for most wins in a season.

2001 Competes in Formula Asia, winning the first five races of the season on his way to the title. Tests in F3.

2002 Moves to Brackley, near Silverstone, and competes in F3, finishing sixth. Works as an instructor at Silverstone so he does not have to eat beans on toast come the end of each month.

2005 Takes part in the World Series and represents India in the A1GP, but leaves after two races. It got too political, he says.

2007 Wins his first GP2 race at Spa-Francorchamps. Tests for Red Bull F1 Racing in Barcelona.

2008 Decides to continue in GP2, racing for iSports International. Takes part in the Grand Racing at Dubai Autodrome today and tomorrow.


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## Bushroda

*Indian door open to Aussie firms*
Christian Kerr
The Australian, Australia
April 11, 2008 

*INDIA is being touted as the new land of opportunity for Australian infrastructure and resource companies, with business opportunities worth more than $50 billion available in the next 12 months.*

"The Australian Government is committed to raising the trade and economic relationship with India to a new level," Trade Minister Simon Crean said yesterday, launching a new Austrade report on business opportunities in India. 

"Australian business has the expertise and capacity to pursue the tremendous opportunities that India presents in the infrastructure and resources sectors." 

Mr Crean said trade between Australia and India had been growing by more than 30 per cent per year, and India was now Australia's fastest-growing export market. 

India has experienced rapid growth, averaging 7.6 per cent over the past five years and 9.4 per cent in 2006-07. 

Indian gross domestic product is projected to grow at 8.7 per cent in 2007-08, a growth rate that makes India the world's second-fastest-growing economy. 

"The Indian Government has identified that, to sustain a growth rate of 8 to 9 per cent over the long term, significant infrastructure development is required," Mr Crean said. 

"Investments in the order of $US500 billion ($536.6 billion) are expected to take place in coming years for developing ports, airports, roads, railways and real estate." 

The report, prepared for Austrade by KPMG India, says the Indian Government is creating an infrastructure policy framework increasingly conducive to private investment, with several opportunities for public-private partnerships. 

The paper says the minerals sector will experience significant growth, driven by overall industrial growth. 

"The size of the metals and mining sector in India has more than doubled to $US45 billion in 2007 from $US20.3 billion in 2001 and a similar pattern is expected to be maintained in the years to come. 

"This will demand increased efforts and investments in exploration and extraction activities," the report finds. 

But KPMG has warned that Australian companies must act swiftly. 

"Some of the larger Australian companies are working in India and some are in the process of entry, but others need to move fast to compete with companies from the UK, USA and Spain which have expertise in this area and are very keen to participate in the Indian market," said Kumar Parakala, KPMG Australia's India business practice national leader. 

Australian infrastructure and resources companies already working in India include Leighton, Hydro Tasmania, BHP Billiton, Rio Tinto, Thiess and BlueScope.


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## Bushroda

*Chavez promises oilfields to India*

Caracas (PTI): Venezuelan President Hugo Chavez on Wednesday promised to give India more oilfields in its heavy-oil belt, touted to hold the world's largest fossil fuel reserves, as he seeks to tap the world's second fastest growing economy to diversify energy trade beyond US. 

The 53-year-old leader, who proudly calls Venezuelans as Indians, indicated that the Latin America's only OPEC member- nation may set up a refinery-cum-petrochemical complex in India to process its crude oil. 

Receiving India's Petroleum Minister Murli Deora at his Presidential Palace Hugo Rafael Chavez Frias expressed intention to supply one million barrels per day of oil to India in the near future. He readily agreed to Deora's request for giving India's flagship ONGC Videsh Ltd a stake in one of the four oilfields in the Carabobo and a piece in the Junin Norte Block in the Orinoco heavy-oil basin. 

"The political answer is yes," he said, responding to Deora's request. "Now technical team (of Venezuelan national oil company PdVSA) will deal with technical aspects and I am certain even technical aspects will be positive," he told visiting Indian journalists after a 75-minute meeting with the Indian oil minister, the first to visit his country. 

The Junin area is believed to hold some 500 billion barrels of inplace oil reserves, of which Junin Norte may have about 7-8 billion barrels. The Carabobo heavy-oil field also in the Orinoco region may hold 213 billion barrels. About 10 to 20 per cent of these reserves can be recovered. 

These would be in addition to the 40 per cent share OVL has in the San Cristobal oilfield for which an agreement was signed on Tuesday. OVL and its 60 per cent partner Petroleos de Venezuela S.A (PdVSA) plan to produce 40,000 barrels per day of oil from the field over an 8-year plateau period after investing over 446 million dollars.


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## lexislichan

india economy is good.i wish that indian government also behave well abt 2008 beijing olympic torch relay in india.we chinese want peace and cooperation.


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## Neo

*India bans cement exports, restriction on steel likely ​* 
*To import more cement from Pakistan​*
Sunday, April 13, 2008

NEW DELHI: India has banned export of cement from Friday and was considering a similar move for steel, the trade minister confirmed on Saturday, as the government aims to calm inflation that leaped to a three year high level.

We have issued a notification last night banning export of cement, Kamal Nath told reporters after a business conference.

Indias cabinet ministers, scheduled to meet next week, will also debate on a proposal to ban steel exports, he said.

Nath had already said on Friday that the government would ban cement exports and also withdraw export incentives for steel and cement products.

Indias headline inflation raced to an annual 7.41 percent in late March, its highest since November 2004, due to higher prices of food and metals, government data showed on Friday.

Over the last few weeks, the government has cut duties on edible oils, banned export of non-basmati rice and withdrew export incentives for cement and steel to increase local supplies and tame inflation.

Policymakers also contemplate an upward pressure on cement prices, as demand outpaces supply in Asias third largest economy that is scaling up its creaky infrastructure at a cost of $500 billion to sustain an average annual growth of 9 per cent until 2012.

More cement imports from Pakistan: Trade Secretary G K Pillai said the country was aiming at doubling cement imports from neighbouring Pakistan to 4,000 tonnes a day, and the latest ban on exports could help meet the demand-supply gap.

When there is a shortage, why allow exports? We are going to double imports from May.

India allowed duty-free import of cement from Pakistan in 2007, as domestic firms like Grasim Industries Ltd, UltraTech Cement, ACC Ltd and Ambuja Cements Ltd are running almost at near full capacity and cannot match the growing demand in near future.

Indian firms plan to add another 100 million tonnes in capacity by 2010 at a cost of 400 billion rupees. This would ease the pressure on prices, Pillai added.

Indias cement output grew by 7.5 percent from a year earlier to 151.24 million tonnes during April-February in the 2007/08, of which exports were at 3.33 million tonnes, according to industry body Cement Association of India.

India bans cement exports, restriction on steel likely


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## Neo

*India says to take tough steps to tame inflation ​* 
Thursday, April 17, 2008

NEW DELHI: India on Wednesday warned of tough action against hoarders to tackle inflation, which has hit a three-year high thanks in part to fast-rising food prices, and said the central bank would take monetary steps soon.

Finance Minister Palaniappan Chidambaram said India was not totally insulated from turmoil in global markets, and added that a surge in food and oil prices was impacting Asias third-largest economy.

Indias headline inflation surged to 7.41 per cent in late March, its highest level since November 2004, following a jump in food and metals prices.

We can intervene through fiscal steps, monetary steps and supply-side measures (to check rising prices), Chidambaram told lawmakers in parliament.

We will not hesitate to take tough administrative measures, he added, urging state governments to impose stock limits on food items to check hoarding.

The government has already cut duties on edible oils, banned the export of non-basmati rice and withdrawn export incentives for cement and steel to increase local supplies and ease price pressures.

While federal and state governments could take more fiscal and administrative measures, Chidambaram said that the Reserve Bank of India would take appropriate monetary measures soon.

On Tuesday, central bank Governor Y V Reddy said in New York the level of inflation was unacceptable and was higher than the banks tolerance limit.

While this situation requires constant monitoring, any action, any time that is required will have to be taken, Reddy said.

The bank aimed to contain inflation at near 5 per cent in the 2007/08 fiscal year that ended in March, and analysts now say the RBI may raise the cash reserve ratio (CRR) of banks in its policy review on April 29.

India says to take tough steps to tame inflation


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## Bushroda

*The boom is over in Detroit. But now India has its own motor city *

*The car industry in the region around Pune, Maharashtra, is growing apace as manufacturers see the potential for the Indian market to overtake China.* 

By Richard Orange
The Independent, UK
Sunday, 20 April 2008 

The tiny Mahadev Temple is beginning to look out of place on its hill above the village of Chakan, 30km from the Indian city of Pune. Just a few years ago, its squat bulbous cupola looked down over an empty plateau of farm and grazing land. Now, more than 2,500 workers swarm over the 2.3sq km of land beneath it. By early next year, the steel and concrete hangars rising from the scrub will have become a Volkswagen plant able to churn out more than 110,000 cars a year. 

To the other side is another sprawling 4sq km plot tipped to house a factory for the ultra-low-cost car planned by Indian motorcycle giant Bajaj and France's Renault. And just 10km away in Talegaon, General Motors is putting the finishing touches to a factory which will produce 120,000 cars a year. The Mahadev Temple is now the centrepiece of one of the world's most rapidly industrialising regions. 

Dr Thomas Dalhem, who is in charge of setting up the plant for Volkswagen, says: "They speak about the Detroit of India, but I don't like it. If you think back to when the car industry in the US was booming, then you can compare it to Detroit." 

The plants announced so far add up to investments of more than &#163;2.5bn. Once they are up and running, this part of Maharashtra alone will be making 1.8 million cars a year &#8211; more than Britain. 

And these are just the biggest international projects. Next door to Bajaj and Renault, Daimler has an assembly plant for Mercedes. Indian jeep maker Mahindra & Mahindra is planning a &#163;500m plant in the village. The UK's JCB has built a heavy machinery factory in Talegaon. 

"We were not ready for this kind of boom," says Chetan Patil, the marketing manager for the Maharashtra Industrial Development Corporation (MIDC). "We lost 1,900 acres of land in two years to these car makers." 

The region will employ 25,000 people in car making in two years, he says. That still leaves it far from the 129,000 workers employed by the car industry in Detroit &#8211; the historic centre of US car manufacturing (down from 316,300 in 1999). 

But it is catching up fast: Every one of the 112 plots MIDC has created here has already been bought and the corporation is now trying to buy 12,500 acres for further expansion. Patil says he is in discussions with four or five other major international companies seeking land for new factories.

In 1998, when Sandesh Tamhane, one of the Bajaj plant's senior managers, first arrived here, there was nothing. "When we came here in 1998, not a single plant was here," he remembers. "The condition of the road was horrible."

Bajaj's 800 staff now produce 1.3 million of its Pulsar, Avenger and Discover motorcycle brands every year. And 35 of the company's suppliers have set up factories in the area. 

"This plant was basically created to change the culture at Bajaj Auto. In the 1980s, people weren't conscious about quality: whatever you produced, it used to get sold." 

The Chakan plant today is a collection of scrupulously clean white buildings surrounded by lush gardens and fountains, highly automated and steeped in Japanese lean production techniques. 

Every other month, Sueo Yamaguchi from the Japanese Institute of Plant Management visits the Bajaj site to assess its progress. "The way one used to work 20 years back and the way we work today has drastically changed," Tamhane says. "Maybe in five to 10 years we will be at par with anywhere abroad." 

The acquisition of Jaguar and Land Rover by India's Tata Motors last month has raised the status of Indian car making. And in January, the launch of its &#163;1,300 Tata Nano brought Indian engineers a new reputation for imaginative, frugal design. 

The change is already apparent in the settlements nearby. Traditional Maharashtrian village houses are giving way to garishly painted concrete villas. 

But Ganesh Yelwande, a local farmer, complains that he has gained little. "People don't like selling to the government, but people are under pressure. They were giving a very low rate for the land. The mediator is getting the benefit." 

Even Yelwande admits, though, that new training institutes and schools have come to the region. 

And Dalhem sees development every time he drives to work. "What will happen for sure &#8211; if you drive between Chakan and Pune you can see it &#8211; this will all be fully developed. Everywhere I see new signs saying, 'Here's your chance. Buy a new apartment here.' All of our staff will move here. Schools and supermarkets will come up." 

The immediate draw of India for the international car makers is the potential size of its market. Both Volkswagen and GM expect India to overtake China as the world's fastest-growing car market. Sales of passenger cars increased 12.17 per cent to 1.5 million in the year to March 2008. Volkswagen expects India to overtake the UK as the sixth largest world car market by 2010. 

Following the Nano, Volkswagen, Renault-Bajaj, GM, Honda and Toyota are all planning to launch small cars suited to Indian consumers' buying ability. Before the Nano, Maruti Suzuki's Maruti 800 had dominated the Indian market for cheap cars for over 20 years. 

Pune is well located between the major metropolises of Delhi, Mumbai, Bangalore and Chennai (Madras). It also has around 500,000 students, giving it a vast pool of educated labour. Tamhane says the labour shortages that had started to happen in Chakan are now lessening as new engineering colleges open. 

Every year, Bajaj takes on 120 new employees, most with engineering diplomas, to top up its 850-strong workforce, paying as little as &#163;150 a month. "We don't want to retain people," Tamhane explains. "We want them to leave after five to six years. Here we think enthusiasm is more valuable than experience." 

The cost of building a factory here is also cheaper than it would be almost anywhere else in the world. Volkswagen is spending &#163;470m setting up its new plant. Much of the machinery is still imported: Dalhem has three ships waiting at Mumbai loaded with equipment and he just received the first shipment of containers on site &#8211; treatment baths for the paint shop from Germany's D&#252;rr. 

But huge savings are made on manpower &#8211; workers on construction sites in India are paid about &#163;1.30 a day. As a result, major car makers are considering using their India plants for export, both for finished cars and components. 

GM has said it wants to make India an export hub for small and mid-sized cars destined to be sold in other emerging markets. Hyundai plans to make India the sole production centre for its new I20 model, even though it will not be sold domestically.

The Pune region is well-positioned for exporters &#8211; linked by the the six-lane Mumbai-Pune Expressway to the Jawaharlal Nehru Port, one of India's largest and most efficient.


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## Bushroda

*Tata offers free IT services to lure banks*
Rhys Blakely in Bombay 
The Times, UK
April 23, 2008

India's largest IT outsourcing company is to give away services as it fights to import more jobs to the subcontinent and to persuade its most important clients - the West's beleaguered banks - to sign new contracts. 

Shares in Tata Consultancy Services (TCS) fell by more than 10 per cent in Bombay yesterday - a record one-day fall for the stock - after India's largest private sector employer missed earnings targets and reported its first quarter-on-quarter decline in earnings in three years as a result of the slowdown in the United States. 

In response, TCS, which relies on the financial sector for more than 40per cent of sales, said that it would bear the cost of transition work on several big outsourcing contracts. 

Transition charges, which previously would have been paid by clients, cover preparations made before jobs are transferred to India from the City and Wall Street. 

The move is designed to buttress future earnings, TCS executives said, but the company is likely to forgo tens of millions of dollars in revenue in the short term. 

A big contract, such as the ten-year $1.2billion (£602million) deal that TCS agreed recently with Nielsen, the data provider, may require more than 100 staff carrying out transition work for up to six months at a cost of up to $25million, analysts said. 

A TCS spokesman said: This is an investment that will be recouped as contracts proceed. 

The company announced plans to win more contracts in emerging markets to reduce its exposure to the ailing US economy, the source of about half its revenues. 

Outsourcers are seeking the attention of Western banking executives shell-shocked by meltdown in their sector. 

Indian executives say that banks are delaying spending decisions, often after the exit of senior bankers in the wake of the sub-prime debacle. 

TCS's spokesman said: Banks have been too involved in their own problems so far to look at new contracts. 

Even before the global credit crunch, India's IT sector was under pressure from wage inflation and the rupee's sharp rise against the dollar.


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## Bushroda

*Chip design services to grow at 22% *
BS Reporter / Chennai/ Bangalore April 23, 2008 

The Indian semiconductor design services industry is projected to grow at a compounded annual growth rate (CAGR) of 21.7 per cent, to $10.96 billion by 2010, from the present level of $6 billion. The industry is expected to clock a revenue of $ 7.3 billion by 2008-end. 

These projections are part of the report `Indian Semiconductor and Embedded Design Service industry (2007-08)  compiled by the India Semiconductor Association (ISA) and International Data Corporation (IDC). 

The key factors that position India as a favoured destination for semiconductor and embedded designs are the growing expertise and capabilities in end-to-end design, intellectual property (IP) development, a strong pool of engineers, emergence of outsourced third party design services companies and cost-effective products. 

The report  which maps the market for very large scale system integration (VLSI), hardware/board design and embedded software industry and the market dynamics between the members of the eco-system  has presented a tremendous growth potential to the Indian semiconductor industry. 

While ISA president Poornima Shenoy said the Indian industry growth is three times more than the global growth rate of around 7 per cent, IDC (India) country manager Kapil Dev Singh said the industrys structure was changing as the proximity between the third party service providers and original equipment manufacturers (OEMs) for end-to-end product designs was increasing in the country. Companies are moving up the value chain from mere project execution to end-to-end development of products, the latter said. 

On the workforce, the report projected an increase in jobs from 129,900 in 2007 to 218,800 in 2010, a CAGR increase of 18.8 per cent. At present, the bulk of the jobs are in the embedded software (82 per cent) followed by VLSI design (11 per cent) and hardware/board (7 per cent). 

A large chunk of the industry product design space is occupied by general consumer electronics and the wireless handset area (mobile technology). 

In the VLSI design projects executed in 2007, 14 per cent was portable wireless products, 33 per cent pertained to consumers and 31 per cent was telecom networking products. 

Though the spectre of a slowing economy is high, the industry is quite optimistic of overcoming hurdles. 

In another couple of years, lot of designs will shift from the present 90 nanometre and 65 nanometre to 45 nanometres. Secondly, the growing domestic market would boost the industry as the consumption of electronic products in the country is estimated to increase, the report said. 

The industry has sought government help in scaling up business. ISA chairman S Janakiraman appealed to the government to extend the Software Technology Park of India (STPI) scheme which is supposed to end in March 2009. 

The industry is still nascent. Start-ups and early stage companies need a different hand-holding, tremendous support is needed from the government for nurturing technology output by smaller companies, he said. The industry will have to constantly evolve, upgrade and innovate while keeping the costs down in order to stay cost competitive in the global market, he added. 

--------------------------------------------------------------------------------
*SEMICONDUCTOR DESIGN* 


Total design services market is $6 billion 
Revenue contribution from embedded software market is $4.9 bn (81 per cent), hardware/board design services market is $386.1 mn (6 per cent) and VLSI $766.2 mn (13 per cent) 
People employed numbers 129,000. Of this, bulk of the jobs is in embedded software (82 per cent), VLSI (11 per cent) and hardware/board design (7 per cent) 
Per engineering man-month rates are estimated at $4,562 (VLSI), $3,415 (hardware/board design) and $3,854 (embedded software)


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## Bushroda

*Indian R&D to lead IBM's charge into mobile market* 
by Stuart Corner
ITwire, Australia 
Tuesday, 22 April 2008 

*!In the world of mobile software and services IBM hasn't figured prominently. That is about to change with the announcement of a major research program that IBM says will enable users to do on a mobile "everything you can with a PC and much more."*

The initiative was announced in India at a commemoration marking the 10th anniversary of IBM's Indian R&D labs. It will be lead by India but eight global labs in six countries will participate in a series of projects that will include:
- The Spoken Web - Voice-enabled mobile commerce;
- Instant Translation - Real-time communication between multiple languages through mobile devices; 
- SoulPad - Enabling "any portable device to carry computing applications in your pocket";
- Social networking on-the-go; 
- Good Samaritan - Mobile healthcare information made available in any emergency situation.

According to IBM the new program marks a significant expansion in the role of its Indian lab which has to date been focussed on the local market. "For the past 10 years, IBM's India Research Lab has worked with local clients and partners to shape India's innovation landscape, helping transform it into a significant contributor to the world economy. Now, the India research team will serve as IBM's catalyst for delivering new mobile web solutions to emerging markets around the world.... IBM is making major investments in mobile software and hardware platforms and has opened several worldwide telecom solutions labs focused on research and development."

India is an appropriate location for such research: mobile phone penetration is increasing rapidly among a largely literate population and recent research commissioned by Nokia shows mobile services as having a hugely transformative effect on India's economy.

Mobile devices far outstrip PCs in emerging economies such as India and are likely to become the main means of Internet access for much of the population. According to IBM, "much of the world's population is looking to mobile devices to tap into online resources to fulfil basic economic needs - in banking, e-commerce, education, transportation and government...Compared to PCs, the primary access mechanism to the world wide web, mobile phones have made a phenomenal penetration into this population segment. Low cost of ownership, the simple user interface consisting of a small keyboard, limited menu and voice-based access contribute to the success of mobile phones with the less literate. However, apart from basic voice communication, these people are not being able to exploit the benefits of information and services available to web users." 

IBM's Institute for Business Value predicts the number of mobile Web users will grow by 191 percent from 2006 to 2011 to reach one billion. "This proliferation of mobile devices and mobile Web users signals an incredibly lucrative growth opportunity for businesses," it says.

The study commissioned by Nokia in late 2006 and undertaken by The Centre for Knowledge Societies (CKS) showed that mobile communication was revolutionising economic and social life in rural India, spawning a wave of local entrepreneurs and creating greater access to social services.

It identified seven major service sectors including transport, finance and healthcare that could be radically transformed through mobile technologies. and called on national and international governments, the mobile industry and NGOs to work together to support the development of these services by increasing access to, and use of, mobile communications in rural communities.

According to Nokia, the research was based on detailed ethnography and participant observation among communities living in three rural areas - Badaun in Uttar Pradesh, Satara in Maharashtra and Chittradurga in Karnataka - and one urban area, Bengalooru.

Researchers meet with small business owners, farmers, home owners and others to understand how mobile communication had already transformed their daily lives and the further potential of mobile communications to enhance livelihoods.

The report includes 16 case studies of individuals interviewed for the report including small business people, entrepreneurs, home owners, farmers and many others. These case studies explored how mobile phone ownership had impacted their lives and businesses.


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## Neo

*India estimates record wheat output in 2008​*
NEW DELHI: India expects this years output of wheat and rice to each be about two million tonnes above previous estimates, reducing prospects of costly wheat imports and easing fears shortages could push inflation higher. 

Agriculture Secretary PK Mishra forecast wheat output in 2008 would be 76.78 million tonnes, against 74.81 million tonnes estimated earlier and 75.81 million tonnes harvested in 2007. 

The government also revised upwards the estimate for rice output in 2007/08 to 95.68 million tonnes from 94.08 million tonnes. This will be a record (wheat) production. Well-distributed rains, distribution of better seeds under national food security mission and good temperatures have contributed to this, Mishra said. India harvested a record 76.37 million tonnes of wheat in 2000. The country imported 1.8 million tonnes of wheat in 2007, down from 5.5 million tonnes the previous year when a poor crop forced it to go to international markets for the first time in six years. India grows only one wheat crop in a year. Sowing begins in October and the crop is ready for harvest by March-April. reuters

Daily Times - Leading News Resource of Pakistan


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## Neo

*India needs to catch China but gap is growing: FM​*
NEW DELHI: India needs to catch up economically with China but the gap now is growing rather than shrinking, Indian Finance Minister P. Chidambaram said in an interview published Tuesday.

We want to catch up with China but that requires greater political consensus on the needed (economic) reforms, he told the Wall Street Journal.

India is governed by an unruly minority Congress party-led coalition propped up in parliament by communist parties which strongly oppose liberalisation that economists say would boost growth.

Chinas one-party government can be quicker in spurring growth, Chidambaram said, adding the distance between India and China is in fact increasing, not reducing because Chinas growth rate is faster.

They are in the position to take some decisions which we are not, he said. We have to follow a process that is more consultative, more deliberative and more amenable to judicial scrutiny.

The divergence between the Indian and Chinese growth rates was an area of concern, he said.

China reported first-quarter economic growth of 10.6 percent while Chidambaram said anything between eight percent and nine percent growth in this fiscal year ending March 31, 2009, would be welcome and acceptable for India.

Some economists forecast Indias economy, after averaging growth close to nine percent for five years, may slow to about seven percent this year, partly because of the global economic slowdown and aggressive monetary tightening measures to control high domestic inflation. Chidambaram said it was too early to make a specific forecast because much depended on the looming monsoon season and the subsequent harvest.

But he added, We must aim at nine percent, as I will, and we must be happy if its between eight percent and nine percent.

Indias GDP rose by 9.6 percent in the year ended March 31, 2007, and is estimated by the government to have grown by around 8.7 percent in the most recent financial year.

Chidambaram also said soaring prices of rice and other basic foods is a matter of concern in a developing country and in a country where a large number of people are poor and the bulk of household expenditure is for food. afp

Daily Times - Leading News Resource of Pakistan


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## Bushroda

*Never mind the quantity, India shows, it is the quality of ideas that matters*
Stephen Manallack 
The Age, Australia
April 24, 2008 

AS WE look at the sheer volume of ideas in the 2020 Summit, perhaps we should consider that the Indian Government has supported an economic miracle simply by adopting two ideas  building the world's cheapest telecoms sector and backing public-private partnerships (PPPs) in aviation.

After the summit, can we, like India, identify the two or three big drivers of change and clear their path?

India took a big decision on telecommunications  realising that it could not afford the infrastructure for land lines  opting for the lowest-cost mobile telephones combined with the fastest internet in the world. In an instant, India was open for business.

The effect has already been huge, with about 8 million new mobiles sold each month, and with 300 million users.

Facing the need to help business travel and trade (and facing a growing host of overseas visitors), India realised that it could not afford to own and run its own infrastructure, so it turned to public-private partnerships (PPPs). The modernisation of the Delhi and Mumbai airports plus the new Hyderabad and Bengalooru airports are prime examples. India's first PPP airport was Cochin in the southern state of Kerala, and this has made profits since opening in 1999, with profits today at 35%.

In the past year 96 million passengers flew in India  just four years ago the number was only 48 million. By 2010 there will be 145 million passenger flights a year.

Both of these were big ideas  telecoms allowed India to leap across 50 years and become a leader in the field, while aviation meant a diverse and disorganised country could come together.

Foreign investors are racing into India, with the smart money moving into new areas. Early investors went for the technology sector, but new money is also going into real estate, infrastructure, media and health care.

This is where the 2020 Summit missed one big idea  while we trade with most of the world, could we benefit from a special focus on all aspects of our relationship with India? A bank of friendship already exists and it is time to build new forms of regular business leadership dialogue  perhaps, Indians being even more sports mad than we are, held in conjunction with major sporting events.

As India has shown, building the future can come down to two or three core ideas, and one of those could be to tie our future much more closely to South Asia.

*Stephen Manallack is director of the India Australia Financial Forum and secretary of the Australia India Business Council (Vic).*


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## Contrarian

*Editorial: Three cheers for UMPPs*
Business Standard / New Delhi April 28, 2008

The funding commitments which have been secured for the Rs 17,000 crore ($4.2 billion) *"ultra mega" power project (or UMPP)* at Mundra in *Gujarat* should silence the critics of the UMPP policy. 

When the idea was floated a couple of years ago, there were doubts about the ability and willingness of companies to come forward and build such large *(4,000 Mw) project*. And even if there were some brave companies who were to step forth, they were expected to have trouble finding financiers. 

Well, not only has there has been a long list of bidders for these projects, now the first such project to get off the block &#8212; backed by Tata Power &#8212; has also managed to secure long-tenor funding of up to 20 years despite the sub-prime crisis. 

A host of public sector banks, led by the State Bank of India, have committed Rs 5,550 crore to the project. The exclusion of the private sector banks can be explained by their aversion to such long-tenor funding as well as their higher cost of funds vis-&#224;-vis the public sector banks. About half of the non-rupee funding of $1.8 billion has been sourced from the International Finance Corporation and the Asian Development Bank for a 20-year period. 

There is also a funding commitment from the Export-Import Bank of Korea and the Korea Export Insurance Corporation, which can be linked to the fact that a Korean firm, Doosan Heavy Industries, has bagged the order for project equipment (boilers). Then there is the equity contribution of Rs 4,250 crore by the promoters of the project, which is to be based on imported coal. 

Equipment has already started arriving at the site and commissioning of the first unit of 800 Mw is expected in September 2011, while the whole 4,000 Mw is expected to come on stream by end-2012, more than a year ahead of the committed schedule.


> *In one wide sweep thus, the country will be adding more capacity than the city state of Delhi typically has access to.*


There are two key lessons that need to be drawn from this successful "ultra mega" experience. First, it helps to think big. The larger the project, the lower is the effort per Mw required to push it through. It is therefore better to work on a 4,000 Mw project rather than a 500 mw one, especially when the same 50-odd clearances will be needed for either project. In any case, with a huge demand-supply gap to be plugged in all key infrastructure sectors, no one can afford the indulgence of managing by tweaking policy at the corners. Instead, bold steps are required. Secondly, the government needs to work on "pre-cooking" more infrastructure projects, so that some basic work on greenfield projects is done before they are offered to private investors. 

The UMPPs, for instance, were housed in shell companies floated under the public sector umbrella. These special purpose vehicles piloted the preliminary work on clearances and supply linkages, and also signed provisional power purchase agreements with the buyers of power. This pre-cooking effort needs to be expanded in the power sector, as well as in other infrastructure sectors, so that a shelf of bankable projects is ready for picking. Otherwise, the $500 billion investment that is required to fix the country's infrastructure gap over the next five years may never materialise.

Business Standard


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## Flintlock

*India unveils policy on new airport projects*
April 25th, 2008 - 7:26 am ICT by admin - Email This Post Email This Post


New Delhi, April 24 (IANS) In an effort to promote new airports in the country, the Indian government Thursday did away with the compulsory approval clause for all new projects that come up beyond a 150-km radius of existing ventures. However, a meeting of the union cabinet also decided that no greenfield airport will be allowed within an aerial distance of 150-km from an existing civilian airport, Information and Broadcasting Minister P.R. Dasmunsi told reporters.

&#8220;In case a greenfield airport is proposed to be set up within 150 km of an existing civilian airport, the impact on the existing airport will be examined,&#8221; he added.

Dasmunsi said such projects would be decided by the government on a case-to-case basis. The new guidelines, the minster said, would be kept in view by the Director General of Civil Aviation (DGCA) while granting a license to operate a greenfield airport.

The policy, however, requires promoters of airports to get approval from all the government agencies that take care of various aspects such as air traffic management, security, customs and immigration.

&#8220;These agencies would notify their respective guidelines,&#8221; an official of the civil aviation ministry said, adding promoters would have to enter into a pact with them regarding the rights and obligations of each party.

The new airports policy was necessitated by the recent strikes by the employees of the existing airports in Bangalore and Hyderabad. They protested the closure of the two airports to make way for the two greenfield projects nearby.

The new policy is also expected to influence a decision on Uttar Pradesh Chief Minister Mayawati&#8217;s request for an early clearance for an airport hub at Jewar, within 150 km of the Indira Gandhi International Airport in the capital.

Called the Taj International Airport and Aviation Hub, the $1.25 billion project is proposed by infrastructure major GMR on an area of 1,000 hectares in Gautam Buddh Nagar, some 70 km from Delhi airport.

Officials said the new policy makes room for interested parties, including the state governments, to make recommendations in case some new airport projects within 150 km of existing ones are awaiting approvals.

&#8220;Airports for cargo or non-scheduled flights or heliports need not be submitted for approval of the civil aviation ministry and these cases may be considered and decided at the level of the directorate,&#8221; said the official.


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## Flintlock

_*In India, Infrastructure Falls Short as Economy Moves Forward*_
By Anjana Pasricha
New Delhi
01 May 2008


India is building new roads, airports and power plants to cater to the needs of an economy that is growing at a rapid pace. But, as Anjana Pasricha reports from New Delhi, infrastructure continues to be woefully inadequate. 

Sunway City Berhad Managing Director, Property Development Division, Ngiam Siew Siong poses with the model of the township during a press conference in Hyderabad, India, 25 April 2008
Sunway City Berhad Managing Director, Property Development Division, Ngiam Siew Siong poses with the model of the township during a press conference in Hyderabad, 25 April 2008
Later this month, a gleaming, new airport will open in India's famous information technology hub, Bangalore, meeting a long-standing demand of the I.T. industry. 

However, access roads to the new airport -- 36 kilometers north of the city center -- have not been widened to ease chronic traffic snarls. As a result, people fear the commute to the airport could take up to three hours -- longer than a short-haul flight. 

Inadequate transport networks in bursting cities is just one of the problems confronting a country where all infrastructure is in short supply -- whether it is reliable power, highways, ports or world-class airports. 

Bidisha Ganguly, a consultant at the Confederation of Indian Industry, says these shortages have intensified amid the recent economic boom.

*"India has been growing at a very fast rate," Ganguly said. "So, as a result, all infrastructure is strained, so there are huge gaps and bottlenecks everywhere. We don't build infrastructure ahead of demand. We typically build it once the bottlenecks are there and fairly apparent."*

The bottlenecks are becoming severe. Vehicles choke already crowded roads as car sales go up. Average loading and unloading time at busy sea ports is 85 hours -- 10 times longer than at Singapore or Hong Kong. Airports and ports often run short of warehouse space. * It takes manufacturers days to transport goods from one part of the country to the other -- partly because trucks are barred from congested cities during the day for fear they might bring traffic to a standstill.*

*Lack of adequate power is perhaps the most severe problem. Most industries and offices rely on massive power generators because electricity is often shut off for hours at a stretch, even in prime business and industrial areas. *

The head of the Indian Council of International Economic Relations, Rajiv Kumar, says lack of adequate infrastructure holds back growth and discourages investors -- both domestic and foreign.

"The industry has to provide all the infrastructure needs, itself, rather than these be available to it as it is in all other countries routinely as a part of the delivery of public services," Kumar said. "That means that even for those who can afford to do this, the costs become very high. But for a large number of medium and small enterprises it just means that they simply have to forego investment opportunities. So, infrastructure deficit in my view is probably costing India up to two percent growth in GDP (gross domestic product)."

The government acknowledges the country is grappling with a huge infrastructure deficit. It estimates India needs to invest $500 billion, in the next five years, to build roads, seaports, airports, high-speed expressways and power plants. The government is calling on the private sector to share the task. 

Some of that investment is already in the pipeline. *A project to link the country's four major cities with wide roads is to be completed this year. Modern airports are being built in several cities, under a new model under which private groups will build facilities, collect tolls and eventually hand the project back to the government.*

The government says the results of all these investments will be visible in five to 10 years. But many fear it may be longer, because many infrastructure projects often get delayed.

Ganguly says India needs to speed up the pace at which projects are implemented. 

"The feeling is that much more should be done," Ganguly said. "While the government has a broad plan, there are problems in implementation, getting clearances. Bureaucratic delays are there and it is not a straightforward issue, where you can just go and build a port or a airport."

But many acknowledge that it is not always easy to fast track projects in a democracy where issues like land acquisition are sensitive and time consuming.

Critics often compare India to the other Asian giant, China, which has built world-class infrastructure in record time. But others point out that although the Chinese central government's nod is enough to get a project off the ground, *the task is far more difficult in India, where consensus is needed before any project can go ahead.*


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## Flintlock

*India needs second 'green revolution', top farm scientist says
*
1 day ago

NEW DELHI (AFP) &#8212; India needs to produce a second "Green Revolution" to boost food supplies or the nation's 1.1 billion people will face huge social turmoil, the country's top farm scientist warned.

The government has identified agriculture as a key area for economic reform and called for changes to boost output of such staples as wheat, rice, lentils and vegetables and bring down soaring food prices.

But so far there has been "no sign of major steps to make that happen," said Monkombu Sambasivan Swaminathan, architect of the "Green Revolution" of the 1960s, which quadrupled food production and made India self-sufficient.

"What we need is political action -- we need politicians to 'walk the talk'," Swaminathan, 82, told AFP.

"If we don't succeed, we will face tremendous social problems," he said.

Swaminathan, a plant geneticist whose ideas helped transform India from a starving nation into a food exporter, runs the Chennai-based M.S. Swaminathan Research Foundation, which looks for ways to create new farm technologies.

Policymakers globally now are grappling with how to tackle fast-rising food prices and dwindling stocks, with food riots erupting in some countries.

Under the "Green Revolution" -- seen as one of the world's most successful agricultural turnarounds -- planting of high-yield varieties of wheat and rice resulted in a sharp output rise.

But India's agriculture has been in decline in recent years and growing at a far slower pace than the overall economy. In 2006, it was forced to import grain for the first time in years, ringing alarm bells about food security.

The country has updated its services and manufacturing sectors, which account for around 60 percent of economic output. But some two-thirds of its population still live off agriculture, which has growth of about three percent.

That is less than half the eight percent minimum overall economic expansion forecast by the government for the financial year to March 2009.

Swaminathan won his doctorate in genetics from Britain's Cambridge University but turned down a US professorship when he realised he had studied to "produce enough food" in post-independence India and "serve the nation."

Memories were still fresh of the Great Bengal Famine, the world's worst recorded food disaster, which occurred in 1943, when Britain governed India and an estimated four million people died of hunger.

Now a burgeoning population, a growing middle class with more purchasing power, and erratic weather are among factors creating food scarcity, thus pushing prices up and requiring a new agricultural leap forward, he said.

"We need to take advantage of the existing technology bank. There's a large amount of technology out there not being used -- in efficient water use, efficient fertiliser use, in extension of farmer-to-farmer knowledge," he said.

For instance, nearly 70 per cent of India's farmers still depend on rain because of a lack of proper irrigation.

"Storage of food supplies is (still) a big issue," he said in an interview, with many crops being devoured by rats before humans can eat them.

Analysts also say farming in India is not just about producing food but also about livelihoods. Thousands of debt-burdened small farmers have committed suicide after their crops failed.

Swaminathan said India faced a much tougher challenge in producing a second "Green Revolution" than it did in the 1960s, when too many hungry bellies forced it to live a "ship-to-mouth" existence, depending on US foodgrain imports to stave off famine.

"Politics are much more complicated these days," he said, referring to the unruly national coalition governments that are often at odds with state administrations.

"The prime minister, who was then Indira Gandhi, had authority over the entire country" to make sure decisions were implemented, he said.

Gandhi gave Swaminathan free rein to implement a new agricultural programme, believing it vital for India to be able to feed itself.

"I've been trying for a pan-political approach to produce a second Green Revolution -- after all we all have to eat first," he said, adding he was optimistic India could achieve the goal.

"We've got all the main ingredients -- a vast agricultural research network of colleges and universities," he said.

"Crisis is a mother of invention. We faced a crisis in the 1960s and we succeeded. We need a symphony of farmers, scientists and policymakers to make it happen again this time."


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## Flintlock

*Advani calls for rejuvenated focus on rural econom*y
From ANI

New Delhi, Apr.30: Leader of Opposition in the Lok Sabha and senior BJP leader L.K.Advani has called for a rejuvenated focus on rural India, and has said there is a need to *ensure redirection of investment into agriculture and rural economy, especially in irrigation, water management, soil enrichment and rural infrastructure.*

Speaking at the session on "Building People: Making Growth Inclusive and Sustainable" at CII National Conference and Annual Session - 2008 here today,* Advani said for inclusive growth there is simply no substitute to massive re-industrialisation and rejuvenation of India's countryside.*

Advani also talked about *enhancing the employability of India's youth and said mere increase in degree holders will not meet the needs of double digit growth,* quoting former RBI Governor Bimal Jalan's study that found that earnings of 20 richest Indians exceeds those of 30 crore Indians and said lopsided however high is never sustainable.

Offering three broad ideas to India Incorporated, he said good governance is the most important requirement for achieving inclusive growth and added that good governance will not only boost GDP but also make sure that money is well spent and reach intended beneficiaries.

Secondly he said some of the poorest states in the country suffer from threats to internal security such as terrorism and naxalism.

Finally he said with foreign exchange reserves now amounting close to US$ 300 billion there is no problem on resource front in achieving double digit GDP growth.

Advani quoted The Economists editorial of early 1990's titled 'India, The Caged Tiger' and said India was uncaged during the six year rule of NDA. He also talked of having the equivalent of golden quadrilateral in education and health.

On corruption, he said it is one of the biggest obstacles to inclusive and sustainable growth, and added that corruption leads to maligned growth and also to moral degradation. Further he said corruption is undermining India's development drive and its international reputation.

Talking about India - US nuclear agreement he said India's national security and international profile was strengthened after the nuclear tests at Pokhran in 1998 and emphasised that his party will not allow any bilateral treaty to neutralise this historic achievement.

Earlier, Sunil Bharti Mittal, President CII, praised Advani for his leadership and called him the tallest leader of all time.

K.V Kamath, Vice President CII, accepted Advani's manifesto to India Incorporated and expressed his willingness to implement them over next one year during his tenure as President of CII.


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## Flintlock

*'SEZs will drive India's infrastructure'*
15 Apr, 2008, 1134 hrs IST, IANS


NEW DELHI: The merits or otherwise of special economic zones (SEZs) are under a raging debate in India but the realty industry is upbeat about the prospect of such zones and says it will drive infrastructure development in the country.

"Establishing world-class industrial infrastructure is an expensive proposition. Encouraging special economic zones is the best solution to create these pockets of growth," says Rohtash Goel, chairperson of realty major Omaxe.

"To meet the demand for housing infrastructure, the government must also create special residential zones," says Goel, referring to the tax and duty sops given to SEZs in the country.

The incentives make development of SEZs a highly profitable proposition. Little wonder many developers are setting up projects under the special scheme not just in metropolitan cities but also in smaller towns.

Figures, in fact, suggest that 214 SEZs have so far been notified. In addition, formal and in-principle approvals have been given to 439 and 138 such zones, respectively.

According to Subir V. Gokarn, executive director and chief economist of credit rating agency CRISIL, "By offering incentives to developers, the government is attracting much required investment."

He feels this eased the financial burden for an important task that has traditionally been the responsibility of state governments - a view that finds support among realty developers.

"It was the government's incentives to developers that established the twin cities of Noida and Greater Noida as a symbol of industrial and realty growth in less than a decade," says Arvind Mohan, the general manager of Ansal API.

SN Sharma, the director for SEZs with another realty major, Parsvnath, has a similar view.

"Special economic zones are essential for rapid economic growth as it insulates industry from restrictive local laws, red tape and an army of various government inspectors."

According to industry chamber Confederation of Indian Industry (CII), SEZs have facilitated a rise of 200 percent in exports and attracted investment of $17.66 billion.

Exports from 214 of such special zones are likely to cross $25 billion by 2008-09, with 10,000 additional jobs, the industry lobby said in a study.
*
But the model adopted for SEZs in India has generated protests in areas where farmland was being acquired, which led those being displaced to feel that they were being deprived of their source of livelihood rather cheap.*

"I would say the fears expressed by farmers are largely based on lack of proper information about the compensatory benefits given to them," says Sharma. "They are getting a hefty amount. Many farmers in Gurgaon or Noida are millionaires."

Mohan feels those raising objections must look at the larger picture. "Since 70 per cent of India's available land is farmland, industrial projects may have to involve some parts of it."

Adding another dimension to the story, Sharma says the land acquired for these SEZs is just 0.12 perc ent of the available farmland and that some amount of realignment of land use pattern has to be accepted in India.
*
"For this, what is required is strong political will," says Gokran. "The government should lay down better policies so that the people whose land are acquired are properly relocated and get employment from these zones."*


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## Neo

* Indias trade deficit widens on soaring crude prices ​* 
Friday, May 02, 2008

NEW DELHI: Indias trade deficit widened by more than 35 per cent in the last financial year, hit by soaring global crude prices and an expensive rupee, official data showed on Thursday.

The trade deficit climbed by 35.5 per cent to 80.4 billion dollars in the financial year to March 31, 2008, the data showed. Policymakers said they were worried by the widening trade gap.We are not comfortable at all (with the trade deficit figures). We hope to boost our exports more. But at the moment with the high oil import prices, we have to live with it, Indias Commerce Secretary Gopal K Pillai said.

Exports, which account for about 15 per cent of the countrys gross domestic product, grew by 23 per cent to 155.5 billion dollars in the 12 months to March. The figure was just shy of the governments full-year target of 160 billion dollars, as a stronger rupee hurt Indias competitiveness.

Imports for the 2007-08 fiscal year climbed by 27 per cent in the full year to 235.9 billion on the back of strong domestic demand driven by robust economic growth and soaring oil prices. A breakdown of the figures showed that non-oil imports; a measure of economic activity, climbed by 23.36 per cent to 158.88 billion dollars in 

2007-08 from a year earlier. Oil imports climbed 35 per cent to 77.03 billion dollars. India imports 70 per cent of its crude oil needs. In March, imports rose 35.2 per cent to 23.2 billion dollars while exports rose 27 per cent to 16.3 billion dollars. 

Indias trade deficit widens on soaring crude prices


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## Neo

*Indias exports grow but miss target, bumpy road ahead​*
NEW DELHI: Indias exports grew by 23 percent to $155.5 billion in the fiscal year ended March, missing an annual target, and analysts said shipments would face headwinds in the current year due to a possible global slowdown. 

Data released by the government on Thursday showed exports grew a robust 26.6 percent in March to $16.28 billion, up from Februarys $14.24 billion, but it was not enough for India to attain the annual target of $160 billion. 

Firm oil prices and robust domestic demand boosted imports by 27 percent to $235.91 billion in 2007/08, and widened the trade deficit for the fiscal year by 35.5 percent to $80.4 billion, from $59.32 billion the year before. 

This trend shows that the rupee appreciation has not really affected the export performance and missing the target is a minor blip which one can ignore, said T.K. Bhaumik, chief economist at Reliance Industries Ltd. 

But 2008-09 would be the most difficult year for Indias exports because of the global slowdown and exports will have to face the challenge of falling global demand. 

Bhaumik said the trade gap could widen to $100 billion in 2008/09 but that should not be a cause for worry as India had comfortable foreign exchange reserves. Exports accounts for nearly 15 percent of Indias gross domestic product. 

The World Trade Organisation said last week global trade growth would slow to a six-year low in 2008 although financial market turbulence and slowdowns in some developed economies have so far had little effect. 

Last year, the Indian government raised tax refund rates and offered interest subsidies on bank loans to ease the pain of exporters hit by a rise of 12 percent in the value of the local currency against the dollar. 

Imports rose 35.24 percent to $23.17 billion in March while non-oil imports, a key gauge of domestic economic activity, was up 18.7 percent to $14.5 billion. Non-oil imports in 2007/08 was 23.4 percent to $158.9 billion while oil imports during the fiscal year was up 35.3 percent at $77 billion from a year ago. 

In a bid to reach a $200 billion export target for 2008/09, the government has announced tax refunds and interest subsidies for many exports would continue for another year, and there would be new incentives to promote exports of vegetables, sports goods, toys and computer hardware. India hopes to grab a five percent share of global trade by 2020. 

Daily Times - Leading News Resource of Pakistan


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## Flintlock

*India Gets $24.57 Billion of Overseas Investment (Update1)*

By Kartik Goyal

May 2 (Bloomberg) -- *India got a record $24.57 billion of foreign direct investment in the fiscal year to March 31*, helped by government policies that allowed foreign companies higher stakes in local units.

India received $15.7 billion of overseas investment in the year-ago period, Trade Minister Kamal Nath told reporters in New Delhi today. *India is aiming for $35 billion of overseas investment in the current fiscal year.*

Companies including *Vodafone Group Plc and Toyota Motor Corp.* have been raising investments in India to benefit from rising incomes, boosted by the fastest pace of economic growth after China, and the easing of rules to allow overseas companies in more industries.

Prime Minister Manmohan Singh is seeking to attract more foreign investment to sustain economic growth of more than 9 percent. The country is simplifying investment rules to attract more money to improve roads, airports and ports and spend more on other infrastructure projects.

Nath expects the investment momentum to remain strong. India has already received $9 billion of overseas investment commitments for the current fiscal year, he said.

The South Asian nation is also aiming to close the gap with China,* which began opening its economy in 1978, 13 years before India. China had $74.7 billion of foreign investment in 2007.*

India in January this year eased some limits on overseas investment in industries such as civil aviation, mining and petroleum to draw more foreign companies to the South Asian nation.


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## Neo

*India inflation hits 42-month high ​* 
Saturday, May 03, 2008

NEW DELHI: Indias inflation rate accelerated to a 42-month peak of 7.57 per cent, driven by higher food costs, according to official data on Friday, dealing a fresh blow to the government. 

Annual inflation quickened more than two-tenths of a percentage point to touch 7.57 per cent for the week ended April 19, up from 7.33 per cent a week earlier.

The prices of rice, milk, tea, and vegetables all rose as did some manufactured goods such as steel sheets used in construction.

High inflation has become a top political issue in India with taming prices the key goal of the Congress-led government, which faces general elections within a year and a clutch of state polls before then.

Indias hundreds of millions of poor whose support is vital at voting time have been hit hardest by the inflation surge.

The latest rise was reported after India tightened monetary policy for the second time in two weeks on Tuesday and announced a slew of fiscal steps to boost food and metal supplies as it struggles to ease runaway costs.

Inflation in Asias third-largest economy last hovered around these levels in late 2004 when the central bank embarked on an aggressive monetary tightening cycle.

The latest jump, measured by the Wholesale Price Index, Indias most closely watched cost monitor, comes amid escalating global commodity prices.

The government has banned export of certain basic staples like rice and lentils and cut customs duties on other items to try to rein in inflation.

On Tuesday, the central bank hiked the percentage of funds banks must set aside, upping the cash reserve ratio by 25 basis points to 8.25 per cent, to reduce money for loans and try to check inflation.

India inflation hits 42-month high


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## Neo

*India says close to clinching ASEAN free trade deal ​* 
Sunday, May 04, 2008

NUSA DUA, Indonesia: India is close to clinching a free trade deal with Southeast Asian nations, spurred on by a bleak global economic outlook and rising food prices, the countrys trade minister said on Saturday.

We are on the last mile and in the final stage of conclusion, Kamal Nath told Reuters after meeting his counterparts from the 10-member Association of Southeast Asian Nations (ASEAN) on the resort island of Bali.

We hope it could be concluded in the next three months there is no major obstacle, he said, adding that a dispute with Indonesia over palm oil would be resolved.

Indonesia, the worlds top palm oil producer, has been insisting on having wider access to Indias palm oil market as a condition of removing its opposition to a free trade agreement with India, according to media reports.

We are going to resolve that, because with the world food situation and the global economic outlook in the United States and Europe which is bleak, its therefore even more important for regional integration, Nath said.

The issue of rocketing rice prices and food security has overshadowed the meeting of ASEAN economic ministers, which aims to deepen regional economic integration and spur long-delayed world trade talks.

Nath said Indias bumper rice harvest this year would boost supply and he sought to defend the countrys move to curb rice exports, which has been blamed for contributing to soaring global rice prices.

We have a very large domestic population we have banned exports of the certain type of rice but we have allowed exports of other types, he said.

The regions rice-growing countries must look at increasing productivity and having better storage and less wastage.

Turning to the domestic economy, he conceded it would be a tough battle to tame inflation as food and energy costs soar.

We hope that we will be able to contain inflation, but inflation is a major challenge, he said, adding that the authorities have to curb money supply while treading carefully not to put a brake on economic growth.

India says close to clinching ASEAN free trade deal


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## Flintlock

* India plans electricity network in South Asia*

Aims to widen energy security; domestic firms cash in on opportunity

On the drive

3 new hydro projects identified in Bhutan

2 firms setting up hydroelectric stations in Nepal

Work on to put up undersea link with Sri Lanka

Anil Sasi

New Delhi, May 5 India is actively working on plans to build a pan-South Asia electricity ring.

Aimed at broad-basing India&#8217;s energy security by wheeling back the bulk of the power generated through the inter-country power projects on the anvil, the renewed &#8220;electricity diplomacy&#8221; plans also envisage a greater play for Indian firms in harnessing energy resources across the region.

While a transmission link with Bhutan is already in place, there are plans to develop two more projects in the Himalayan kingdom, besides sprucing up the existing power line, to enable up to 5,000 MW of electricity imports into India by 2020.

Plans are already underway for setting up an undersea link with Sri Lanka. In Nepal, two Indian firms &#8212; GMR Group and State-owned Satluj Jal Vidyut Nigam &#8212; are setting up hydroelectric stations, while power trading major PTC India Ltd has signed pacts to wheel power from two other projects. In Myanmar, joint development of a 1,200-MW hydro project, along with a power link, is being envisaged.

&#8220;We would like to use power as a tool to ensure greater regional engagements. It is going to be a very important element of our policy going forward&#8230; Besides, Indian firms stand to gain from these efforts,&#8221; the Minister of State for Power and Commerce, Mr Jairam Ramesh, told Business Line.
Nepal base

Among the neighbouring nations, Nepal, with a hydro-electric potential 83,000 MW, of which generating 45,000 MW has been estimated as techno-economically feasible, is the biggest draw. Indian firms have started making inroads, with the GMR Group having bagged the 300-MW Upper Karnali project and Sutlej Jal Vidyut Nigam the 402-MW Arun III project.

Separately, PTC India has committed to buy 750 MW from the West Seti project being developed by an Australian company and another 300 MW from the Lower Arun project being developed by a German firm. Meanwhile, over 10 Indian firms &#8212; including Tata Power, KSK Ventures, JSW Energy &#8212; are in the fray for developing the 600-MW Budi Gandaki project, for which tendering is underway.

Besides power developers, a host of Indian civil engineering firms, including Nagarjuna Construction Ltd, Continental Construction Ltd and Maytas Infra Ltd, are now in the running for contracts in Nepal.
More in line

In Bhutan, after the success of the 1,020-MW Tala project, from which power is already being wheeled into India, three new major hydro projects &#8212; the 1,080-MW Punatsangchhu-I, the 1,000-MW Punatsangchhu-II and the 600-MW Mengdechu hydro electric projects &#8212; have been identified for joint development, and the survey and investigation work has been initiated.

With Sri Lanka, India is already working on putting in place a $450-million mega undersea power transmission link.

The 200-km submarine cable is likely to be set up with a capacity to wheel around 1,000 MW of electricity and State-owned Power Grid Corporation is set to bag the mandate to execute the project.

NTPC, meanwhile, is already working on a 500-MW coal fired plant in Trincomalee. In the case of Burma, the Tamanthi hydroelectric project (1,200 MW) has been identified for joint development and a transmission link could be decided upon based on the progress on the project. An Indian delegation to Myanmar is expected to leave in the first week of June to discuss further action on the proposal. 

The Hindu Business Line : India plans electricity network in South Asia


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## Flintlock

*Special effects of outsourcing: Hollywood heads to India*


The Golden Compass

The Oscar-winning effects for The Golden Compass were put together at the Indian headquarters of Los Angeles studio Rhythm & Hues
Rhys Blakely

As outsourcing projects go it is rather fantastic: the Oscar-winning special effects for The Golden Compass, the Hollywood blockbuster that took $370 million (&#163;187.7 million) at the box office last Christmas were put together in a thatched village hut in India.

Well, almost.

The huts in question are replicas &#8212; stylised office cubicles made to look like rural Indian dwellings. Situated in Mind Space, a vast, grey commercial complex on the outskirts of Bombay, they form the Indian headquarters of Rhythm & Hues (R&H), the leading Los Angeles-based special effects studio.

The Times visits on a national holiday, but several of R&H's 250 India-based staff are hunched over their computers, working overtime on the visual pyrotechnics that will feature on the next outings of the Spider Man, Mummy and Incredible Hulk film franchises. The labour is painstaking. Each employee will struggle to produce the equivalent of five seconds of screen time in a month.
Related Links

* TCS lures clients with free outsourcing 

* Fans tired of special effects, says Pullman epic director 

The results are usually worth the wait. Babe, the talking pig who won an Academy Award and earned more than $250 million at the box office in 1995, was an R&H creation. Alvin and the Chipmunks, the recent surprise hit for which R&H created the eponymous rodents, has now grossed nearly $360 million &#8212; not bad for a film with a $60 million production budget.

For the past six years, part of the work on such projects has been completed in these Bombay offices, the design of which Prashant Babu Buyyala, the facility's managing director, seems especially proud. "We wanted something creative yet functional," he says of the faux village look. "Importantly, we didn't want to spend a lot of money."

The same maxims, it could be said, are directing Hollywood's passage to India.

Post-production movie work &#8212; everything from complex digital effects (such as the talking armoured polar bears that appeared in The Golden Compass, one of which sported a fur coat with seven million individually rendered hairs) to basic colour grading (making sure shades stay consistent throughout a film) &#8212; is steadily migrating from traditional centres such as LA to low-cost locations on the sub-continent.

Prime Focus, another post-production house, has grown its Indian visual effects group to 165 people, from 40, in the past year. Pixion Studios, a rival, is aiming to increase its workforce in India fourfold, to 1,000 people, by 2009.

Nasscom, the Indian IT industry lobby group, estimates that the global animation market will be worth about $80 billion by 2010, and is targeting it as a prime source of future outsourcing revenues as more film work is shifted to India from the US and Europe.

With emotions already running high over the loss of US jobs amid an economic downturn, Mr Buyyala is adamant that Rhythm & Hues is not running a cost-cutting operation in India. The Bombay office handles work as complex as that done in the US, he says. Moreover, despite India's size, a lack of art schools has translated into a relative dearth of talent. "I keep on having to tell people: 'this country just isn't that cheap any more'," he adds.

But it is hard to believe cost has no bearing. Starting salaries in R&H's Bombay offices are as low as 40,000 rupees (&#163;410) a month. Pay packets rise quickly and the highest earners in Bombay pull in similar sums to their US-based counterparts, Mr Buyyala says, but still the early discounts offered by young Indian animators are upsetting their American peers.

"My students will now have even a lesser chance of working in the industry," one animation teacher in the United States recently wrote on an industry website. "I understand why Rhythm & Hues must do what is necessary for the bottom line. It is just sad."

That comment may not be entirely correct &#8212; R&H has sharply expanded its US workforce while growing its Indian operations &#8212; but cost pressures are playing an ever greater role in Hollywood.

"Cost and speed" are paramount in the world of post production, says Simon Huhtala, of Prime Focus. "Scale and rationalization are the major driving forces."

In response, Mr Buyyala argues that there is a compelling reason to enter India beyond the opportunity to shave costs: the country's potential as a market. In particular R&H is waiting for the expected explosion in the use of special effects in Bollywood. The possibilities, of course, are massive: the world's biggest film industry is yet to fall for the charms of talking animals. 

Special effects of outsourcing: Hollywood heads to India - Times Online


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## Flintlock

*UPDATE 2-India's economy to grow about 8 pct - official*
Tue May 6, 2008 1:02pm BST

(Adds latest think-tank GDP estimate in paragraph 6)

By Rajkumar Ray

NEW DELHI, May 6 (Reuters) - India's economy is expected to grow around 8 percent in the current fiscal year, and annual inflation, now at its highest in more than three years, may moderate in a few weeks, a top official said on Tuesday.

The country's central bank and most other forecasts have pegged growth in Asia's third-largest economy at 8.0-8.5 percent in the 2008/09 financial year as the global economic slowdown and monetary tightening takes its toll.

The Indian economy is estimated to have grown at 8.7 percent in 2007/08, slower than the previous year as higher interest rates hurt consumer demand.

"My projection was 8.0-8.5 percent," Montek Singh Ahluwalia, deputy chairman of India's Planning Commission, which charts the country's five-year economic plans, told reporters.

"I will be happy at the lower end. A growth of around 8.0 percent is quite acceptable."

An independent New Delhi-based economic think-tank said the economy is expected to grow by 8.5-8.8 percent in 2008/09, if interest rates remains stable, while average annual inflation may be higher than last year.

The National Council for Applied Economic Research (NCAER) said an expansionary fiscal policy would help India weather the adverse effects of a global slowdown during 2008/09.

While still strong the economy has lost altitude from scorching 9.6 percent expansion in 2006/07, which was the highest in 18 years.

Finance Minister Palaniappan Chidambaram expects the economy to grow more than 8.0 percent in the current fiscal year. The government wants growth of 9 percent or above to reduce widespread poverty and create jobs.

The finance minister says 9-plus percent growth -- with 4 percent inflation -- is the ideal rate although a ministry report has said just sustaining 9 percent growth would be a challenge due to inflation pressures and infrastructure constraints.

Ahluwalia said he expects the inflation rate to moderate.

"I do hope that in the next few weeks inflation will moderate. The government can take more measures if prices are not contained," he said.

The government and the central bank have taken fiscal and monetary steps to calm price pressures ahead of key state elections later this year and federal polls next year. (Writing by Surojit Gupta, Editing by Mark Williams) 

UPDATE 2-India's economy to grow about 8 pct - official | Markets | Reuters


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## Neo

*India has 114,000 BlackBerry users, says minister ​*
NEW DELHI: India has about 114,000 mobile subscribers using Research In Motions (RIM) BlackBerry services, much lower than expected, the junior minister for telecommunications said on Monday. Media reports have said there were around 400,000 BlackBerry users in India, while an analyst had estimated the number to be more than half a million. As per the information received from service providers, there are around 114,000 subscribers as on date who are being provided BlackBerry services by various telecom companies, Jyotiraditya Scindia told the lower house of parliament in a written reply to a question. 

Four firms, Bharti Airtel, Reliance Communications, Vodafone-controlled Vodafone Essar and BPL Mobile provide BlackBerry services in India. RIM does not give country specific user numbers. A spokesman for India said the company had 14 million subscribers globally as of the quarter ended March 1. India had asked telecom firms not to provide certain BlackBerry services until monitoring systems are in place. It had also written to RIM asking it to install servers in India. The move came after security agencies raised concerns the service posed a risk as emails sent using it could not be traced or intercepted. 

Daily Times - Leading News Resource of Pakistan


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## Flintlock

*GMR takes over Istanbul airport for modernisation and operations news *
05 May 2008 


Turkey: The Government of Turkey has handed given a second airport in Istanbul for modernisation and operations for a 20-year period, to a consortium of led by Hyderabad-based GMR Infrastructure Limited. Turkey's state-owned Limak Holdings, and Malaysia Airports Holdings Berhad Ltd are GMR's consortium partners in the project.

The license to operate the Sabiha Gokcen International Airport was handed over to the consortium on Saturday. The consortium will now commence work for upgrading the airport, with an investment of Rs1,575 crore (&#8364;250 million).

The consortium won the bid in July 2007, having committed the highest operating rental of Rs11,978 crore (&#8364;1.93 billion) for 15 years. The project's revenues will come from duty free shops, ground handling and cargo handling, and a passenger fee that would be levied to the tune of &#8364;12 for an international passenger, and &#8364;3 for a domestic passenger. Aeronautical revenues, however, which accrue from charging airlines for landing and parking, will go to the Turkish government.

The consortium expects duty-free shopping to account for almost 25 per cent of the airport's revenues.

Turkish Prime Minister Recep Tayyip Erdogan on Saturday, asked the consortium to expedite their development and complete the upgrade of the airport in 18 months, against the original deadline of 30 months. This includes the construction of new terminal buildings, shopping complexes, car parking facilities and other additional infrastructure such as a 60-room hotel. The terminal and facilities will cover a total area of 320,000 square metres, and will have 96 check-in points, 30 online check-in points, a total of 32 x-ray units, and a 13,700 square metre, two-storey VIP terminal. 

Once the upgrade is complete, the airport will be able to handle 15 million passengers by 2010. Currently, it handles half that number. Traffic in Turkey is estimated to grow by 500 per cent by year 2028, when the concession period comes to an end. Over the 20 year period, traffic is estimated to grow to 45 million.

The consortium plans to raise funds from Turkish banks and the ABN Amro Bank through a combination of debt and equity in the ratio of 75:25, and plans to achieve financial closure after one year in operation.

GMR Infrastructure Ltd holds 40 per cent in the consortium, while partners Limak Holdings and Malaysia Airports Holdings Berhad hold 40 per cent and 20 per cent, respectively.

domain-b.com : GMR takes over Istanbul airport for modernisation and operations


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## Neo

*Indias economy to grow about 8 percent​*
NEW DELHI: India's economy is expected to grow around 8 percent in the current fiscal year, and annual inflation, now at its highest in more than three years, may moderate in a few weeks, a top official said on Tuesday. 

The country's central bank and most other forecasts have pegged growth in Asia's third-largest economy at 8.0-8.5 percent in the 2008/09 financial year as the global economic slowdown and monetary tightening takes its toll. The Indian economy is estimated to have grown at 8.7 percent in 2007/08, slower than the previous year as higher interest rates hurt consumer demand. 

"My projection was 8.0-8.5 percent," Montek Singh Ahluwalia, deputy chairman of India's Planning Commission, which charts the country's five-year economic plans, told reporters. "I will be happy at the lower end. A growth of around 8.0 percent is quite acceptable." 

An independent New Delhi-based economic think-tank said the economy is expected to grow by 8.5-8.8 percent in 2008/09, if interest rates remains stable, while average annual inflation may be higher than last year. The National Council for Applied Economic Research (NCAER) said an expansionary fiscal policy would help India weather the adverse effects of a global slowdown during 2008/09. 

While still strong the economy has lost altitude from scorching 9.6 percent expansion in 2006/07, which was the highest in 18 years. ap

Daily Times - Leading News Resource of Pakistan


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## Flintlock

*India's Bharti joins 700-million-dollar cable project linking Britain
*
18 hours ago

BANGALORE, India (AFP)  Bharti Airtel, India's top mobile-phone operator, said Wednesday it had joined a consortium to build a 700-million-dollar submarine cable system.

Bharti signed a construction and maintenance agreement in London for the Europe India Gateway (EIG), the first high-bandwidth, optical-fibre cable system from India to Britain, the company said.

Fifteen other firms are taking part in the 15,000-kilometre (9,000-mile) project linking 13 countries across three continents that will start carrying commercial traffic by the second quarter of 2010, it said in a statement.

Among the firms are AT&T, BT, C&W, Djibouti Telecom, Gibtelecom, Libyan Telecom, MTN Group, Omantel, Saudi Telecom Company, Telecom Egypt, Telkom SA and Verizon Business.

The EIG consortium has signed construction and supply agreements with Alcatel-Lucent and Tyco Telecommunications, the statement said.

Bharti will be operating the Mumbai landing station for the cable system that will support Internet, e-commerce, video, data and voice transmission.
*
The project will help meet a "tremendous rise in use of data and broadband applications among enterprises and consumers" in India, said David Nishball, head of enterprise services at Bharti Airtel.*

"Whether it is large enterprises leveraging communications technologies to compete in a truly global environment or consumers seeking real-time entertainment over the Internet, international connectivity has become a vital part of our lives," he said in the statement.

The EIG cable system will also provide interconnection with other major cable systems connecting Europe, Africa, Asia and North America.

Bharti, which controls 23.8 percent of the Indian phone market, has 64 million clients, 62 million of them mobile subscribers, and a market capitalisation of around 42 billion dollars.

The announcement came after the company said on Monday it had begun exploratory talks with South Africa's MTN on a possible takeover.

AFP: India&#39;s Bharti joins 700-million-dollar cable project linking Britain


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## Neo

*Toshiba to form India power venture with JSW ​* 
Thursday, May 08, 2008

TOKYO: Japans Toshiba Corp said on Wednesday that it had agreed to tie up with Indias JSW Group to manufacture and market steam turbines and generators for thermal power plants in India. 

Toshiba and JSW, which is part of O P Jindal Group, plan to invest about $250 million in plant and manufacturing equipment for the joint venture, which will be owned 75 per cent by Toshiba and 25 per cent by JSW. Manufacturing operations are expected to start in September 2009, the Japanese company said in a statement.

The deal will give Toshiba a firm foothold in the rapidly growing Indian market for thermal power generation, executive vice president Atsuhiko Izumi said in a statement.

We want to rapidly build up our presence in a fast growing market, he added.

Toshiba last year won a large contract to supply five large super-critical steam turbines and generators to Indias Tata Power.

The Japanese group has positioned energy as one of its core businesses. It bought US nuclear plant maker Westinghouse Electric from British Nuclear Fuels in 2006 in one of the largest Japanese overseas acquisitions in years.

Toshiba to form India power venture with JSW


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## Flintlock

*India bans futures trading in four more commodities*


India suspends trading in soybean oil, potatoes, rubber and chickpeas
By Polya Lesova, MarketWatch
Last update: 11:50 a.m. EDT May 8, 2008


NEW YORK (MarketWatch) -- India suspended futures trading in soybean oil, potatoes, rubber and chickpeas Thursday, as its government struggles to stem soaring inflation at a time when global food and energy prices are skyrocketing.
India's Forward Markets Commission, a regulatory authority, has banned trading in the four commodities for at least four months, according to media reports on Thursday.
Last year, India banned trading in rice and wheat futures.
The ban on futures trading comes as India confronts growing pressure at home to curb rising inflation. On Friday, official data showed that India's inflation hit a 42-month high of 7.57&#37; in the week ending April 19.
The ban also follows comments from India's finance minister Palaniappan Chidambaram Monday, who said that he was considering a blanket ban on trading in food futures, because of worries speculation in the commodity markets as well as the food crisis India is facing. 
*
Banning trading in food futures is unlikely to reduce inflation, according to Seema Desai, an analyst at the Eurasia Group.
"The key policy move that could genuinely reduce imported inflation would be to allow the currency to appreciate but there is little political appetite for that (as yet)," Desai said in a research note this week.**
Last week, an expert committee appointed by the government to look into whether commodities futures trading fans inflation concluded that there was no evidence suggesting such a link.*
Banning food futures trading is unlikely to reduce inflation, according to Seema Desai, an analyst at the Eurasia Group.
*"The key policy move that could genuinely reduce imported inflation would be to allow the currency to appreciate but there is little political appetite for that (as yet)," Desai said in a research note this week.*
The four commodities, which were suspended from trading Thursday, account for a daily turnover of about $288 million on the Multi Commodity Exchange of India (MCX) and the National Commodities and Derivatives Exchange (NCDEX), the International Herald Tribune reported Thursday.
Soaring prices for agricultural commodities, including rice, wheat, corn, and soybeans, have stirred popular discontent and demonstrations around the world. The United Nations World Food Program has said that high food prices are creating "a silent tsunami" threatening to plunge more than 100 million people on every continent into hunger.
India, which will hold parliamentary elections next year, has taken a number of measures in response to soaring food prices. Prime Minister Manmohan Singh's government has eliminated import tariffs on several commodities, including wheat, wheat flour and palm oil. It has also raised the minimum rice export tax in phases after initially banning all rice exports in October 2007. India has also tried to crack down on hoarding food.

India bans futures trading in four more commodities: reports - MarketWatch


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## Bushroda

*Indian economy to grow by 8.5-8.8 pct in FY09 - NCAER*
Tue May 6, 2008 5:31pm IST
NEW DELHI (Reuters) - The Indian economy is expected to grow by 8.5-8.8 percent in the 2008/09 fiscal year with stable interest rates but inflation may be higher than last year, an economic think-tank said on Tuesday.

The National Council for Applied Economic Research (NCAER) said an expansionary fiscal policy would help India weather the adverse effects of a global slowdown during 2008/09.

India's statistics office estimated gross domestic product growth at 8.7 percent growth in 2007/08 and the central bank forecast a 8-8.5 percent growth in 2008/09.

In February, the government cut tax rates on manufactured products and raised the income tax exemption limit to pump-prime Asia's third largest economy.

"The slowdown in growth on account of adverse global factors may be offset by the expansionary fiscal policy," NCAER said in a report.

NCAER expects farm output to grow by 2.5 percent on the back of a normal monsoon during 2008/09, slightly lower than 2.6 percent last year.

Industrial output is expected to expand by 8.9-9.4 percent, while services sector is likely to grow by 10.2-10.5 percent in the current fiscal year, it said.

Inflation is seen between 4.9 percent and 5.2 percent, NCAER said, higher than an average 4.5 percent last year.

Exports growth is expected to moderate to 16.6-17.9 percent during 2008/09 from 23 percent last year while imports growth is seen at 18.2-19.5 percent compared with 30.2 percent of last year, it said.

NCAER expects the fiscal deficit to be higher at 2.6-3.0 percent of GDP during 2008/09 on higher government spendings. The federal government is aiming at cutting the deficit to 2.5 percent this year from 3.1 percent in last year.


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## Bushroda

*Vrooom!! Ducati bikes set to scorch Indian roads*
By Surojit Chatterjee
International Business Times
08 May 2008 @ 11:30 pm GMT

Even as Harley Davidson continues to mull whether it should set its foot in India, Italian motorcycle maker Ducati Motor Holding SpA has taken the plunge, announcing, Wednesday, that it would be launching its entire range of premium bikes in multiple variants to satisfy the needs of the Indian racing enthusiasts.

"We will be launching different models in multiple variants. These bikes will be available starting at Rs.15 lakh ($37,500) and would go upto Rs.50 lakh ($1,25,000) in the Indian market," said Ashish Chordia, chairman and CEO, Precision Motor India Pvt Ltd, the sole importer and distributor of Ducati bikes in India.

The company aims to import around sixty completely built units (CBUs) this year from the Italian manufacturer, he said. Initially, the bikes will be sold through two exclusive showrooms in Mumbai and Delhi and subsequently, early next year, three more showrooms will be added in Hyderabad, Bangalore and Chennai.

"The passion that I have for this glorious marquee is both a source of pride and a stimulation to promote and develop Ducati's entry into the Indian market. I am honoured by this partnership and I am sure that Ducati will also have a great future in this country," Chordia said, on the sidelines of the launch of five Ducati models - Monster S4R S Testastreeta, the Superbike 1098, 1098R, Hypermotard 1100S, and the Superbike 848.

Precision Motor India Private Limited is a Mumbai-based distributor of luxury brands that includes Porsche, Audi, NetJets, Fendi and Dolce&&Gabbana.

Coinciding with the launch of the premium bikes, Gabriele Del Torchio , CEO, Ducati Motor Holding SpA, announced the 2007 Moto GP World Champion manufacturer's entry into the young and exponentially growing Indian market.

"We strongly believe that the fast growing Indian market is of a strategic importance to Ducati and we will do our best to consolidate our presence and to capitalize on the huge opportunities this country has to offer," Torchio said, adding, "India is no longer an emerging market. It is a reality worldwide. We feel it is the right time to enter the Indian market. The economy is booming and there is a huge number of rich Indians who aspire to buy premium bikes. With the technology to produce the world's fastest bikes, we see a great potential for superbikes in India." Ducati is a name synonymous with racing success, delivering cutting-edge motorbike technology and highest safety and emission standards.

Torchio also noted that a long-term strategy was needed for it to succeed in India. "A lot will depend on our ability to create a strong platform for our future revolution. The choice that we made to work with distributors that we have identified in India is very important because it will create this platform. They have a lot of experience in dealing with luxury products," he said.

Ducati is expected to compete with Yamaha and KTM which are also offering a premium range of bikes. In future, Suzuki and Honda are also expected to foray into India's motorbike market and heat up the competition.

According to Torchio, India has a great future with "vast improvements in infrastructure and the F1 circuit plans firming up."

"If all goes well, we shall have a full-fledged motorcycle racing season in India soon," he said, adding that he has asked MotoGP CEO Carmelo Ezpeleta to bring the Grand Prix event to India.

"If this event can happen in Qatar, China, Malaysia and Australia, I think India also has a great chance," he added.

Ducati is a small company compared to Honda, Yamaha and KTM but has won 14 of the last 17 World Superbike Championship titles and has picked up the maximum number of trophies in all global competitions. It won both the top Constructors' and Riders' world titles in MotoGP 2007.

The Italian bike company is also one of the biggest sponsors of motor racing championships.

"We want to promote motorsports in India and cultivate the sporting culture. To organize the MotoGP championship in India, we just need an F1 track. We have sought the help of all auto makers and Society of Indian Automobile Manufacturers (SIAM) to move the matter faster and get the infrastructure in place," Chordia said.

Jaiprakash Associates, a Delhi-based infrastructure firm has already announced its plans of developing a permanent F1 racing track in Greater Noida at a cost of Rs.1500 crore ($375 million).

The same track could be used for bike racing as well, Chordia said.


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## vish

Thought Ill add my two bits here one reason why the Indian economy is the toast of the world is that our, unlike other Tigers and PRC, is based on consumption 

For example, the IT Services in which India is considered a superpower currently account for less than a percentage of our GDP but these highly-paid IT professionals have masses of disposable income that percolates down to the economically not-so-well-off I work in a KPO but Im dying to work in a company that caters to the domestic market plus our rise isnt just based on export-manufacturing or export-services but rather on domestic consumption, which is healthy in the long run and India has genuinely succeeded in creating vibrant multinationals (Tata, Reliance, Bharti, etc.) moreover, the Indian banking system is world-class 

Also... I think I biggest advantage that India has a large media industry movies, televisions, print, radio 

The thing that worries me the most is the stagnation in agriculture and the lack/absence of infrastructure but still we have managed so much surprises me theres a joke in India we have done all this without a government imagine what we would do with one


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## Flintlock

*India honing edge in auto design, R&D software*
Danny Goodman & Kirtika Suneja / New Delhi May 11, 2008

The increasing use of high-end software in automobile design and R&D has made Indian auto majors leverage the country's software prowess and gain an edge over their European and American competitors.

Most are expanding their research and design services either organically or by acquisitions, which will enable them to launch newer models in the market quickly and efficiently in the coming years.
*
By June 2009, the $6 billion Mahindra & Mahindra group (M&M) will open its new $116 million automobile design and development facility called the Mahindra Research Valley (MRV) spread over 150 acres in Mahindra World City in Chennai.* Primarily, this R&D facility will cater to M&M's design needs, and later may consider doing similar high-end work for other OEMs.

Tata Motors has six R&D centres that span India, South Korea, Spain and the UK. In 2006, the Tatas acquired INCAT &#8211; now an arm of Tata Technologies &#8211; that conducts specialised R&D work for the Tata Group and others. Recently, Tata Motors bought a minority stake in Italian car design firm, Pininfarina, which has designed some landmark Ferraris.

*In April this year, French major Dassault Systemes tied up with Argentum Engineering Design's (AED) Centre for Excellence to train automobile engineers who would design, test, validate and manufacture new vehicle models for domestic and international OEMs.
*
According to a Nasscom report, the automobile and aerospace design industry is currently estimated at $ 144 billion, in which India's current share is valued between $3 billion and $5 billion annually.

This amount is estimated to increase to around $16 billion over the next two to three years. Global spending on engineering services is expected to touch $1.1 trillion by 2020.

Outsourcing to India will touch over $ 50 billion by then.

High-end software like 3D, PLM, and V5 provided by software majors like Dassault Systemes, Siemens and IBM have revolutionised the way new models of vehicles are designed, tested, and manufactured. The advantages of using Indian software talent are obviously in costs. Indian engineering talent is 45 per cent cheaper than an American counterpart.

The savings in time and money gained by using high-end software are also obvious. "We are aware of anything between 25 and 40 per cent savings in time achieved by auto majors when launching a &#8216;concept to manufacture' programme," said Vivek Marwah, country marketing head, Siemens PLM.

In high performance motorsport, where turnaround time is essential, applications like PLM have reduced design time. Toyota Motorsport uses Dassault Systemes' PLM solutions to reduce aerodynamics design time by 80 per cent and achieve the first-physical assembly of the car in only two days, compared to three weeks previously. For an F1 racing team, time saved off the track is crucial.

Costs saved in building and testing models are equally substantial. "Earlier, we used to build 50 vehicles for crash tests. Now after using virtual crash tests, we use only about 40 units," explains Dr Arun Jaura, chief technology officer, Mahindra & Mahindra.

The costs saved in tests like these vary depending upon the skill sets of engineers and the country's regulatory agency requirements. Another testing expert said most new car models launched in Europe now undergo only one physical crash test, while the rest are simulated. The costs of constructing test prototypes can be enormous.

Despite a significant amount of contribution from Indian engineers in the development of models like the Swift, Dzire and SX4, Maruti Suzuki still relies on Suzuki, Japan for training its engineers, though the automaker plans to increase its R&D strength to 1,000 by 2010.

And players like Argentum hope to offer the same in India through its tie-up with France's Dassault Systemes. "Through this tie-up, we hope to train engineers who will produce engineering solutions, and not software people to do the same," said S D Pradhan, CEO, Argentum Engineering Design.

Currently, India enjoys a reputation as a provider of low-end research work that revolve around small cars. The current challenge is to change that perception. "The country has had a reputation for low-end design work. In setting up the Mahindra Research Valley, we would demonstrate to become the epicentre of engineering design and development for high-end work. We have the potential," said Dr Jaura.

India's journey to becoming the world's hub for automobile design and development may not be easy. "Opportunities are plenty, but competition abounds. China, Latin America, East Europe... each one with certain natural advantages," said R Srinivasan, executive vice-president, Avtec, a Hindustan Motors subsidiary.

India honing edge in auto design, R&D software


----------



## Flintlock

vish said:


> Thought Ill add my two bits here one reason why the Indian economy is the toast of the world is that our, unlike other Tigers and PRC, is based on consumption
> 
> For example, the IT Services in which India is considered a superpower currently account for less than a percentage of our GDP but these highly-paid IT professionals have masses of disposable income that percolates down to the economically not-so-well-off I work in a KPO but Im dying to work in a company that caters to the domestic market plus our rise isnt just based on export-manufacturing or export-services but rather on domestic consumption, which is healthy in the long run and India has genuinely succeeded in creating vibrant multinationals (Tata, Reliance, Bharti, etc.) moreover, the Indian banking system is world-class
> 
> Also... I think I biggest advantage that India has a large media industry movies, televisions, print, radio
> 
> The thing that worries me the most is the stagnation in agriculture and the lack/absence of infrastructure but still we have managed so much surprises me theres a joke in India we have done all this without a government imagine what we would do with one



Vish, India's economy is still massively underdeveloped in absolute terms. 

The reasons why we are in the news so often is because we represent 1/5th of humanity, and therfore tend to generate the most news.

India's government has failed miserably so far, and whatever little Indian industry has achieved, has been against great odds. We should definitely be proud of that.

In any case, this is just the beginning. 
With just a fraction of our population gainfully employed, we are creating waves.

If we manage to increase the size of our middle class to half our population, and unlock the hidden talent which has been crushed due to centuries of caste-prejudice and elitist foreign rule, I am sure it that day will be a monumental one in the history of the world.


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## Bushroda

*Inside the Tata Nano Factory*
*The tale of the creation and design of the world's cheapest car is one of innovation and ingenuity, both inside and outside Ratan Tata's organization *

by Manjeet Kripalani
Businessweek
May 9, 2008, 12:41PM EST






*The Nano, nicknamed the "people's car", will cost $2,500 when it goes on sale later this year. Tata Motors*

At Tata's Engineering Research Centre, near the bucolic surroundings of the Tata Motors TTM factory in Pune, a suburb of Bombay, there are two cars on display. One is a complete prototype of the Nano, the $2,500 compact car Tata unveiled in January, which has all the essentials and safety features of India's higher priced automobiles along with a sticker price that will forever change the economics of low-cost cars. The other is a neat bisection, with the car's innards clearly visible. "Every day we invite people to come and examine the car and ask: 'How can we make more savings?'" says Tata Motors Chief Executive Ravi Kant

That quest to build the world's cheapest car hasn't ended. The Nano should be available this fall, but the mission began back in 2003, when Ratan Tata, chairman of Tata Motors and the $50 billion Tata conglomerate, set a challenge to build a "people's car." Tata gave an engineering team, led by 32-year-old star engineer Girish Wagh, three requirements for the new vehicle: It should be low-cost, adhere to regulatory requirements, and achieve performance targets such as fuel efficiency and acceleration capacity. The design team initially came up with a vehicle which had bars instead of doors and plastic flaps to keep out the monsoon rains. It was closer to a quadricycle than a car, and the first prototype, Wagh admits candidly, "lacked punch." Even a bigger engine, which boosted the power by nearly 20%, was still dismal. "It was an embarrassment," says Wagh. 

But the failure was also the catalyst for Tata's decision to build a proper car, not an upgraded scooter on four wheels or anything flimsy or cheap-looking. "We didn't want an apology for a car," says Ravi Kant. "We were conscious of the fact that whether it was a $2,500 car or not, it ought not to have looked like a $2,500 car." 

*Becoming a Part of History*

The tale of the creation and design of the Nano is one of innovation and ingenuity, both inside and outside Tata's own organization. First, Ratan Tata called a meeting of his top parts suppliers and, after showing them the early, earnest but flawed prototypes, asked them to help. Companies including Germany's Bosch, which makes the computer that is the heart of car's engine, were skeptical. So were local Indian players. 

But Tata persisted, pointing out that not only could a company's specific developments for the Nano help to make history but they could also improve their companies' businesses and bottom lines. Soon most of Tata's traditional suppliers were on board. Rane Group, for instance, makes a rack and pinion steering system. It focused on reducing the weight of the materials used, replacing the steel rod of the steering with a steel tubea major cost-reducer. Typically, the product is made of two pieces, but it was redesigned as one to save on machining and assembling costs. According to Harish Lakshman, director of the $317 million company: "The world has seen this sort of integration of two pieces into one, but applied differentlynot for a new car, and not to reduce costs." 

GKN Driveline India, a subsidiary of global auto parts leader GKN, made the driveshaftthe component that transfers power from the engine to the wheel.

The team spent a year developing 32 experimental variants to create the perfect driveshaft for the Nano. It roped in designers from the company's French and Italian operations and changed the design to make it lighter and easier to manufacture. For the Nano's rear-wheel drive system, GKN designed a smaller diameter of shaft, which made it lighter and saved on material costs. "We thought if we were successful in this, we could dictate terms to the market, and every other car manufacturer would want to work with us," says Rajendra Ojha, chief executive of GKN Driveline India. 

*Taking the Pulse of the Project*

All the suppliers have similar stories. And although none would disclose specific cost savings, most stuck to Tata's mandate to cut costs. That was, as Kant acknowledges, the biggest hurdle for the company"then, now, and in the future,"particularly as the price of raw materials like steel have more than doubled in the past four years, and the company has to follow new, tighter industry regulations. Kant, who recently led negotiations to acquire luxury auto brand Jaguar Land Rover, has little time to get involved in day-to-day details of Tata's many projects. However, with the Nano, "every cost, every component price, has to be run by me," he says. 

Coordinating the vendors with Tata Motors' team was a whole new exercise in logistics. Wagh quickly realized it was necessary to bring everyone on board, "else it leads to last-minute heartache and delays." Every morning, he would spend an hour or two on the floor of the Pune factory, insisting that everyone involveddesigners, manufacturing teams, vendor development peoplebe there to accelerate decision-making and problem-solving. "We had to have the pulse of the project and know exactly where the hurdles were," Wagh remembers. 

Over time, Wagh's team grew to comprise some 500 engineers, an impractically large group to gather on a daily basis. So instead, a core team of five engineers gathered every day at 3 p.m. to discuss the latest developments. Each engineer represented a different part of the car: engine and transmission, body, vehicle integration, safety and regulation, and industrial design. 

*Attention to Detail Pays Off*

Fitting the parts of the car together required lots of little, head-breaking details, recalls Wagh. The engine, for instance, was designed three times. Initially, Wagh thought they'd buy an off-the-shelf engine and so studied all the small-capacity engines available. They were unsuitable, so in early 2005 he decided to build his own. The first was a 540 CC engine that, when fitted on the prototype, lacked the necessary power. So its capacity was increased by 9%, then by another 9%, before Wagh finally settled on a 623 CC engine. Then the foot pedal had to be realigned to create more legroom. 

The body had to be changed because Ratan Tata, over six feet tall himself, wanted it to be easy for tall people to get in and out of the car. "Imagine the plight of the body designerhe went through hundreds of iterations, then at the last minute the car length was increased by 100 millimeters!" Wagh says. The attention to detail paid off: When the car rolled onto the dais at the Auto Show in New Delhi in January, and Ratan Tata stepped out of the driver's seat with ease, it made an immediate impact. 

What shook the automobile world most was the fact that the designers seem to have done the impossible: The sleek, sophisticated Nano doesn't look flimsy or inexpensive. If it had been an upgraded scooter on four wheels, Tata still would have been applauded for making a family of four safer on Indian roads. The Nano, however, affords both safety and status. "The innovation wasn't in technology," Kant recalls. "It was in a mindset change." The Nano, he adds, has put an end to all discussions of having variants of scooters or quadricycles as passenger vehicles on India's roads. 

*Organizational Innovation*

Still, the story of the Nano is not confined to its impact on the auto industry. It's a tale that illuminates the India of todayan eager, ambitious nation with a combination of engineering talent, a desire for low costs and value, and the hunger of young managers looking to break from a hidebound corporate environment. Indeed, the team that worked on the Nanoon average aged between 25 and 30has helped to flatten Tata Motors' stodgy, multilayered management structure, which has resulted in an unexpected side-benefit Wagh calls "organizational innovation". 

The factory in Singur, Bengal, is still being built, and machinery is being installed. Wagh now spends most of his time away from his Pune home, supervising the work at Singur leading up to the launch date in fall. Tata Motors is determined to succeed in its mission, Ravi Kant says. "We are hungry for growthand innovation is a by-product of that."


----------



## Flintlock

*India's Rupee Slides to 13-Month Low as Industrial Growth Slows*

By Anil Varma

May 12 (Bloomberg) -- India's rupee slid to the lowest in more than a year after a report showed industrial production expanded at the slowest pace in six years.

The currency weakened past 42 a dollar for the first time since April 2007 after the government said the annual pace of increase in output at factories, utilities and mines more than halved to 3 percent in March from 8.6 percent in the previous month. The gain was the smallest since February 2002. The rupee also fell on concern near-record oil prices are boosting demand for dollars from the nation's refiners.

``Those who were short on the dollar covered those positions after the industrial production report,'' said Paresh Nayar, head of foreign-exchange and debt trading at Development Credit Bank Ltd. in Mumbai. ``The concern is that an industrial slowdown can lead to a slowdown in investment inflows.''

The rupee weakened as much as 1.2 percent to 42.115 per dollar, the lowest since April 2007, before closing at 42.035 at 5 p.m. in Mumbai, according to data compiled by Bloomberg.

The currency declined 2.3 percent last week, the most since 1998. It slid 5.4 percent this year, the second worst among the 11 most-traded Asian currencies after the South Korean won.

Overseas investors have sold $2.7 billion more Indian shares than they bought this year, after making record net purchases of $17.2 billion in 2007, according to the Securities and Exchange Board of India.

Slowing Growth

Growth in Asia's third-largest economy may decelerate to about 8 percent, the slowest since 2005, in the fiscal year that started April 1, according to Finance Minister Palaniappan Chidambaram. The economy expanded 8.7 percent in the 12 months through March, compared with 9.6 percent in the previous year.

The rupee also fell on concern costlier oil is inflating India's import bill. The currency fell last week as crude oil in New York rallied 8.3 percent, the most since March 2007, to reach an all-time high of $126.27 a barrel on May 9.

``There's still a lot of uncertainty in the rupee market,'' said L.V. Prasad, chief currency trader at IndusInd Bank Ltd. in Mumbai. ``Oil has been a major concern, boosting dollar purchases by oil companies and prompting all who need foreign currency to buy it sooner than later.''

The value of India's oil imports rose to a record $8.6 billion in March as the commodity became more expensive, government data show. Asia's third-largest economy depends on shipments from abroad to meet three-quarters of its energy needs.

The South Asian nation's trade deficit widened to a record $25.4 billion in the three months through December, according to the central bank. The current-account shortfall, a measure of trade and investment flows, increased to $5.4 billion in the same quarter from $4.7 billion in the previous three months.

``Dollar supply from exporters too has dried up as they wait for more rupee losses,'' IndusInd's Prasad said. ``It's typical. Every time the rupee has had a sharp fall, dollar sellers tend to wait, expecting to earn more.''

Bloomberg.com: India & Pakistan


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## Flintlock

*India's inflation to ease in coming months-adviser*
Mon May 12, 2008 5:55am BST

NEW DELHI, May 12 (Reuters) - India's annual inflation rate is expected to moderate to 6.0 percent in the next three to four months from 3-½ year highs of 7.6 percent in late April, a top policy adviser said on Monday.

C. Rangarajan, chairman of Prime Minister Manmohan Singh's Economic Advisory Council, also told reporters the economy is expected to grow 8.0-8.5 percent in the fiscal year ending March 2009 as high global oil prices shave off some momentum.

"High oil prices will have its impact. It could slow down growth," Rangarajan said. (Reporting by Rajkumar Ray; Editing by John Mair) 

India's inflation to ease in coming months-adviser | Markets | Reuters


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## Bushroda

*The historical roots of Indias booming service economy*
Stephen Broadberry & Bishnupriya Gupta
Journal of Turkish Weekly, Turkey
Monday , 12 May 2008

India stands out from other emerging economies because its growth has been led by the service sector rather than labour-intensive manufactures. This column summarises recent research showing that India has a long history of strength in services, and its service-led development may play to historical strengths rather than hindering its progress. 

Indias recent spectacular rate of economic growth, combined with the sheer size of its population, means that it is beginning to take its place as one of the key players in the global economy.1 One way in which India stands out from other Asian economies is in the better performance of its service sector. Whereas other emerging Asian economies, such as China, have experienced growth led by dynamic manufacturing performance, Indias growth has been led by sectors such as business services.

This is sometimes used to portray Indias performance as fragile, focusing attention on shortcomings of the industrial sector.2 But as much of manufacturing becomes increasingly automated and de-skilled, it is not clear that manufacturing-led growth is such a good long-run bet on the road to development. It may be that a focus on services will prove to be a better long-run route to prosperity. Furthermore, this pattern of service-led development may be more in tune with the legacy of Indias past.

*Measuring long-run productivity performance*

Although we know a great deal about the long-run development of rich countries such as Britain, we know much less about the past performance of less developed countries such as India. In recent research, we seek to remedy this by drawing on quantitative information collected by the British during their period of colonial rule in India to compare sectoral productivity performance in Britain and India from 1870 to the present.3

Our research demonstrates that Indias recent service-led development has deep historical roots. During the colonial period, Indias comparative productivity performance was already better in services than in industry or agriculture. This emphasis on services is in line with much recent research on long-run growth among the developed economies, which finds services playing a key role in comparative economic performance in the late nineteenth and early twentieth centuries as well as during more recent times.4

India has long lagged behind Britain. Between 1870 and 1970, output per worker in India fell from around 15 per cent of the UK level in the economy as a whole to less than 10 per cent, as India fell further behind. Since the 1970s, India has begun to catch up on the United Kingdom, but by the end of the twentieth century it was still further behind than in the early 1870s. Even with the rapid growth achieved by India in recent years, it will take time for India to regain its relative position of the late nineteenth century.

*Productivity by sector*

Agriculture has an important part to play in explaining this disappointing overall Indian productivity performance. The sector remains Indias largest employer, accounting for three-quarters of Indian employment in the late nineteenth century and nearly two-thirds of employment today.

Furthermore, agriculture is the only sector where India has continued to fall further and further behind, with labour productivity dropping from around 10% of the UK level in the late nineteenth century to around 1% at the end of the twentieth. It is clear that India needs to increase productivity in agriculture if overall productivity performance is to improve substantially.

Much of the existing research on economic growth and development emphasises the role of industry. This is particularly so in the context of twentieth century Asia, where the high-profile cases of Japan, South Korea and China have all been seen as manufacturing-led development.5

The Indian case, however, does not conform to this pattern, and this shows up in the comparative productivity data. Indeed, although there have been fluctuations in comparative India/UK productivity in industry, there has been no trend, with India at around 15% of the UK level in the late nineteenth and late twentieth centuries.

Only in services has there been an improvement in comparative India/UK labour productivity, from around 15% in the late nineteenth century to around 30% by the end of the twentieth century. Services have thus played a positive role in Indias productivity performance throughout the period, limiting Indian relative decline before 1870 and leading the process of catching-up from the 1970s. The service sector productivity growth is not confined to modern services such as finance  it is also visible in trade and transport.

*Explaining Indias better performance in services*

The productivity gap between Britain and India has been smaller in services than in industry or agriculture since the First World War. The recent emergence of a dynamic service-led Indian economy thus has long historical roots. But why did the service sector perform better in India, even in colonial times? Our study suggests that the answer can be found at least in part in Indias education system.

This may at first sight seem surprising, since Indias record of investment in human capital, as well as in physical capital, has been less than impressive. Under-investment in education overall has clearly contributed to Indias disappointing productivity performance over the long run.

But there has been a longstanding bias in educational investment towards secondary and higher education, which has produced a small group of highly educated workers, who have worked largely in services. This is relatively straightforward to demonstrate empirically for the recent past, when data are available on educational attainments of workers by sector.

It can also be shown for the colonial period, where data on literacy are available by caste. A small group of high castes, including not only the priestly Brahmans and warrior castes but also trading casts, desired secondary and higher education as well as primary education. However, the majority of the population, working in agriculture and cottage industry, required little education to perform their jobs and had little scope for advancement because of the caste system, so demand for education was depressed.

*Conclusions*

The first message to take away from this research is that Indias service-led development may be a strength rather than a weakness. The emphasis on manufacturing as the key sector for growth and the neglect of services has now largely disappeared in the analysis of economic performance in the developed world, but continues to hold sway in the analysis of developing countries.

The second message is that history matters for long-run economic performance. A development strategy that is in tune with the legacy of the past has a better chance of success than one that requires the eradication of that legacy.

--------------------------------------------------------------------------------

*Footnotes*


1 See Bosworth, B., Collins, S. and Virmani, A. (2007), Sources of Growth in the Indian Economy, in Bery, S., Bosworth, B. and Panagariya, A. (eds.), India Policy Forum, 2006-07, Washington, DC: Brookings Institution Press.
2 See Bosworth, B. and Collins, S. (2007), Accounting for Growth: Comparing China and India, Brookings Institution, Washington DC.
3 Historical Roots of Indias Service-led Development: A Sectoral Analysis of Anglo-Indian Productivity Differences, 1870-2000 by Stephen Broadberry and Bishnupriya Gupta was presented at the Economic History Society's 2008 annual conference at the University of Nottingham, Friday 28 March to Sunday 30 March.
4 Broadberry, S. (2006), Market Services and the Productivity Race: British Performance in International Perspective, Cambridge: Cambridge University Press.
5 See Ohkawa, K. and Rosovsky, H. ((1973), Japanese Economic Growth: Trend Acceleration in the Twentieth Century, Stanford: Stanford University Press; Pilat, D. (1994), The Economics of Rapid Growth: The Experience of Japan and Korea, Aldershot: Elgar.


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## Neo

*France offers to help India modernise railways including fast trains ​*Tue May 13, 2088

MUMBAI (AFP) - France will sign an agreement with India to help modernise its massive railway system with a focus on safety, training and technology including fast trains, the French transport minister said Tuesday. 

"SociÃ©tÃ© Nationale des Chemins de fer FranÃ§ais - the French National Railway Company - and the Indian Railways will co-operate through companies to modernise the railways in India," Dominique Bussereau, French state transport minister said.

"Our focus will be to increase safety measures, prevent fires, introduction of high-speed trains and personnel training," the minister told reporters.

France currently holds the record for the world's fastest commercial passenger train service at 320 kilometres (200 miles) per hour, he said.

The agreements will be signed in New Delhi on Wednesday.

Bussereau arrived in India Monday, on a three day visit to boost partnership in railways, aviation and freight transport systems between the two countries.

French and Indian Railways will tackle issues like overcrowding, railway track repairs, signalling, information technology and training, officials from both services added.

The state-run Indian railways, started by India's former British colonial rulers, has around 1.6 million employees -- making it the world's biggest civilian employer -- and runs thousands of trains daily.

But the 150-year-old railway, which transports more than 15 million people daily in the country of 1.1 billion people, has been notorious for deadly accidents, antiquated equipment, financial losses, delays and red tape.

The Indian Railways have posted a record 6.3-billion-dollar surplus for the financial year 2007-08, Railways minister Lalu Prasad Yadav said in February this year.

The French transport minister and his team leaves for capital New Delhi later Tuesday to meet civil aviation minister Praful Patel to discuss issues like building airport infrastructure, control tower systems and pilot training.

France offers to help India modernise railways including fast trains - Yahoo! News


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## Neo

*India: Industrial Output Growth Slows ​*
Published: May 13, 2008

Indias industrial production in March grew at the slowest pace since 2002, as borrowing costs hit a six-year high and discouraged consumer spending. Production at factories, utilities and mines rose 3 percent from a year earlier after gaining 8.6 percent in February, the statistics office said. Industry is facing headwinds from tight monetary conditions, high raw material costs and weakening foreign demand, said Sonal Varma, an economist in Mumbai with Lehman Brothers. Manufacturing, which accounts for about 80 percent of Indias industrial production, gained 2.9 percent in March, compared with a 16 percent increase a year ago. Electricity output rose 3.7 percent, mining grew 3.8 percent and consumer goods production fell 0.1 percent

http://www.nytimes.com/2008/05/13/business/worldbusiness/13fobriefs-INDUSTRIALOU_BRF.html


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## Neo

*Report: Land dispute in India may delay Tata's $2500 car​* 
India's Supreme Court will examine the validity of the process by which land has been acquired for Tata Motors Ltd.'s Nano car project at Singur in the eastern state of West Bengal, following a petition challenging the venture, Bloomberg News reported today. 

The Supreme Court bench asked Tata Motors, the state-run West Bengal Industrial Development Corp. and the West Bengal government to file replies to a petition which said that fertile land had been forcibly acquired by the government. 

The challenge may delay the company's plans to start selling the car, pegged to cost around $2,500, this year in India. The delay would push up costs and allow rivals to catch up with Tata Motors with plans of their own to build and sell cars with a similar price tag. The company plans to start production in October. 

Report: Land dispute in India may delay Tata's $2500 car


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## Neo

*India to issue $3.6 bln bonds to state oil refiners​*
NEW DELHI, May 13 - India will issue bonds worth 150 billion rupees to state oil refiners for the quarter that ended on March, to compensate half the revenue loss incurred for selling fuel at state-set low prices, a government official said on Tuesday.

This would raise the total amount of bonds issued for 2007/08 to 353 billion rupees, of which about 203 billion had already been issued for April to December, he said.

"This decision is expected to provide a much needed relief to the oil marketing companies," the official, who did not want to be named, said after a meeting Finance Minister Palaniappan Chidambaram and Oil Minister Murli Deora.

India, which imports 70 percent of the fuel it consumes, caps retail prices to soften the blow of high global prices on domestic consumers.

State-run refiners like Indian Oil Corp , Bharat Petroleum Corp and Hindustan Petroleum Corp are incurring huge losses in revenue because of high global crude prices that hit a record $126.40 a barrel on Monday.

During 2006/07, the government had compensated 42.7 percent of the revenue losses of state oil refiners and issued bonds worth 21.21 billion rupees.

Crude oil prices are up more than three quarters since mid-2006, hitting a record above $126 a barrel this week but India has raised retail prices only once by just 3-4.6 percent in February.

India to issue &#36;3.6 bln bonds to state oil refiners - Yahoo! Philippines News


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## Neo

*Renault-Nissan, India's Bajaj announce cheap car project​*
MUMBAI (AFP) - Renault-Nissan and India's Bajaj group said Monday they planned to make a 2,500-dollar car by early 2011, the second effort to make a cheap car for the South Asian nation's rapidly growing middle class. 

The budget car, which would cost 100,000 rupees in India, is so far only known as "Codename ULC." The joint venture would be 50 percent owned by Bajaj Auto, 25 percent by Renault and 25 percent by Nissan, a statement said.

The ULC will be produced at a factory to be built at Chakan, Maharashtra, in western India. It will eventually produce 400,000 units a year, the two groups said.

"(The small car) will offer twice the fuel economy than the existing products in the market," Bajaj Auto managing director Rajiv Bajaj had said earlier, with the firm aiming for 34 kilometres (21 miles) on a litre of fuel.

Renault-Nissan president Carlos Ghosn had announced the joint venture in early November 2007 after preliminary talks in July. The main market for the car will be India but it may eventually be sold elsewhere.

Bajaj is India's second-biggest motorcycle maker, and Religare Securities automobile analyst Piyush Parag said the proposed vehicle's low price could be a boon for the firm.

"Bajaj will have a price-point advantage, with few cheap alternatives available in the car segment," the expert said.

One of the few rivals could be Tata Motor's Nano, unveiled earlier this year and billed at the time as the world's cheapest car. Tata said the car could be ready for sale by September and plans to sell it for around 2,500 dollars.

Domestic and international automakers are racing to corner India's small-car market, which accounts for over two-thirds of domestic sales in the country of 1.1 billion people.

Manufacturers will remain committed to the small passenger segment despite rising raw material costs and the likelihood of slower economic growth in India.

"The incremental demand for small-cars is strong," says Piyush, whose firm forecasts 13-percent growth in the passenger car segment for the year to March 2009.

Other experts point out India could serve as an Asian export base for small cars.

"There has been a steady move by automobile makers to make India an export hub for the Asian region," says Bhavesh Shah, vice-president with brokerage Asit C. Mehta.

"Lower costs and technological advance are to India's advantage at this stage of development," he said.

Japan's Toyota Motor Corp. and Honda Motor Corp., among other firms, have also said they are mulling manufacturing low-cost cars as India's population becomes more affluent and trades up from motorcycles.

Renault and Nissan are linked by cross shareholdings. The French carmaker is the biggest single shareholder in the Japanese company.

The Bajaj group is in the process of a demerger, with Bajaj Auto likely to be relisted on the stock market.

Renault-Nissan, India&#39;s Bajaj announce cheap car project - Yahoo! News


----------



## Bushroda

*Indian economy can withstand shocks: Moody's*
14 May 2008, 1614 hrs IST,PTI

NEW DELHI: Indian economy's external fundamentals are strong enough to withstand a wide range of potential shocks and support its foreign currency sovereign and local currency bond ratings, says Moody's. 

Global rating agency Moody's Investor Services in its latest report said the strong fundamentals, combined with upturn in savings and investment as well as rising rate of potential growth, supports the Indian government's foreign currency sovereign medium investment grade (Baa3) bond rating and local currency speculative grade (Ba2) bond rating. 

"The government's local currency bond rating of Ba2 balances a high level of indebtedness with a favourable debt structure," Moody's Vice-President and author of the latest annual update on India Aninda Mitra said. 

Meanwhile, the report notes that the Indian government's Baa3 rating further reflects the country's low external debt and strong external payments capacity. 

"At the same time, concerns about the size and servicing burden of the government debt is somewhat mitigated by the latter's high local currency content, long tenor, growing domestic savings and a stable creditor base dominated by domestic institutions," Mitra, who is also a Sr Analyst, said. 

However, a major challenge for the country's physical, financial and social infrastructure is the weak government finances, he added. 

Besides, the near-term macroeconomic challenges include maintaining monetary stability amid food and fuel price pressures, containing fiscal reversals and managing fiscal consequences after the implementation of hike in civil servants' pay by 40 per cent. 

It also includes ensuring more "inclusive growth" that raises incomes in the poorer and slower-growing farm sector in a sustainable fashion.


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## Bushroda

*Indian retail market to be 6th largest by 2012 *
14 May 2008, Wednesday 

INDIA WILL emerge as the sixth largest retail market by 2012 because of income, population growth and saving behaviour. 

This was stated by Vinod Sawhny, the president and chief operating officer (COO), Bharti Retail Pvt Ltd, while speaking at a conference on Transforming Retailing in India, organised by the Confederation of Indian Industry (CII) in New Delhi, on Tuesday (May 13). 

Sawhny stressed that the sector will grow on the strength of the rising purchasing power of the consumer, which will mainly come from the services sector.

The rising population of working women, the rising services sector, the growing middle class and easier access to credit are some of the factors that will fuel the growth of retail industry in India. The COO further added that private labels will constitute a big part of organised retail. 

He called on the industry to deal with supply chain constraints, wastage and poor storage and distribution. We need to address issues related with talent, policy, fragmented market and IT infrastructure and ensure affordable real estate, Sawhny added. 

Dr Ira Kalish, director, Deloitte Research, opined that the retail evolution in India is still in its nascent stage and said, While the Indian retail market is promising, it has a long way to go to make a mark on the global level. 

Speaking on the progression of retail across the world, he said, Though a number of retailers from emerging markets are doing well, no Indian player figures in the list of top 10 Asia-Pacific retailers. 

The retail industry is very dynamic and competitive. Many players, who were doing well in the past, are no more in the picture. Retailers can cash in on the growth in consumption in Asia, Kalish added. He warned that the US is going to witness a sustained period of financial turmoil, which may affect other markets. Talking about currency valuation, he said that considering the changing global economic scenario, the US dollar may depreciate further and China may revalue its currency.

Sounding optimistic about the growth of retail sector, Kalish said that organised retail is poised to grow at 30-40 per cent and the country will see one of the fastest growths in the retail sector. He further said, India will be an attractive market despite its complexities and marketers need to adapt to Indian realities. Ability to differentiate will determine the success of a retailer.

Rajeev Karwal, the founder and chief executive officer, Milagrow, said, Consumers are more prepared than retailers for organised retail. Retail is undergoing transformation, but we need to keep typical Indian buyer in mind while chalking out strategy.

Assuaging doubts on the future of mom and pop stores, he said, If organised retail can grow at 30 per cent, mom and pop stores should also expect a 20 per cent growth.


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## Flintlock

*India's Global M&A Boom**
Indian corporations, established at home and seeking new markets, are flush with cash and spending it abroad. But have they gone overboard?
*
by Nandini Lakshman

Bharti Airtel, India's largest telecom player, is in the midst of talks to acquire a 51% stake in South African telecom major MTN in a deal that could be worth $20 billion. It's unclear whether Bharti's bid will succeed, but plenty of other Indian companies have been on a global shopping spree. On May 1, Essar Steel Holdings announced its third overseas acquisition in a yearthe Nasdaq-listed Esmark (ESMK) for $1.1 billion. In March, Tata Motors (TTM) acquired Jaguar and Land Rover from Ford (F) (BusinessWeek.com, 3/26/08). And investment bankers say there are 10 more acquisitions by Indian companies in the pipeline over the next six months.

Why so much merger-and-acquisition activity from India? Thanks to a four-year bull run that yielded stock market returns of more than 40%, a strong rupee, and an easy availability of funds, the Indian corporate sector is flush with cash. In the last two years, corporate India spent over $40 billion on global M&As alone, according to research firm Grant Thornton, compared to $10.84 billion on domestic acquisitions. High interest rates and stock market valuations made local companies less attractive than international ones. In contrast, lower international interest rates made overseas acquisitions more appealing.

*The durability of the M&A trend will face a test now, as the fallout from the economic slowdown in the U.S. hits India. The benchmark Sensex index is down 16% this year and the Indian currency has fallen almost 8%, factors that would seemingly make overseas deals less attractive.* Still, many analysts and bankers in India say they're confident local companies will continue their global M&A march. The marginal weakening of the rupee will not impact outbound M&As, they say, as U.S. and European assets are still cheap, at one-to-two times multiples compared to three-to-four times multiples earlier.

Moreover, many of the acquisitions so far have fit in nicely with Indian companies' new global strategies. "The early deals have been well received, showing an overall increase in corporate confidence," says Amrit Singh, head of M&A at Deutsche Bank (DB) in India.
Tata Leads the Charge
*
The acquisitions have been both big and small, across different sectors, some bargains and some trophy deals. Most active has been the Tata Group, the $50 billion private-sector conglomerate. Since January, 2006, Tata has spent a total of $18.75 billion on acquisitions. In *keeping with the pattern, local buys were small, numbering just threea bottler of mineral water, a maker of processed foods, and an operator of pig-iron furnacesfor $225 million. The big bucks were saved for the global plays21 of them for $18.52 billion, including Tata Steel's Corus for $12.1 billion, and Tata Motors' $2.3 billion spend for Jaguar and Land Rover. Tata has also done smaller overseas deals, such as the acquisition of a coal project in Mozambique for $84 million.

Other Indian industrial groups have been active, too. The Aditya Birla Group's Hindalco paid $6 billion for Atlanta-based aluminium sheet maker Novelis in February, 2007, while Essar Steel forked out $3 billion for Canadian steel maker Algoma Steel, Minnesota Steel, and U.S.-based Esmark in one year. Indian information technology companies like Tata Consultancy (TCS.BO), Infosys Technologies (INFY), Wipro (WIT) and Satyam (SAY) have been buying smaller IT service outfits in Europe, Latin America, and Asia to gain global customers and reduce the reliance on their bread-and-butter U.S. market.

Indian companies are hungry for growth. Having demonstrated their ability to operate in a very competitive home market, Indian managers are looking for new markets that limit their dependence on domestic sales. "In today's markets, companies can't wait for years to build competencies and reach other markets. M&A helps them do all of this in the quickest possible way," says Kavita Thomas, vice-president research at Mumbai-based First Global Securities.
Not the Same as 1980s Japan

*But are Indian companies going overboard?* So far, analysts are confident that the Indians have avoided going after trophy acquisitions that don't make much strategic sense. *"It's not that the Indian companies splurged on outlandish assets, like the Japanese did in the 1980s," *says H.V. Harish, a partner at Grant Thornton. While flush-with-cash companies from Japan rushed to buy vital pieces of the American landscape like Rockefeller Center in New York and Pebble Beach in California, Indian corporate houses have been more restrained. Except for a couple of multibillion dollar deals like Corus and Novellis, the average ticket size of the global M&A is around $200 million, providing more value-for-money than vanity buys.

Some acquisitions can be duds, too. Videocon's (VEDI.BO) 2007 attempt to buy Daewoo Electronics came a cropper when it raised price issues with the Korean company's creditors. And some are bold to the point of being overly ambitious. Having failed to take Daewoo, Videocon showed interest in bidding for Motorola's (MOT) handset business "to become a global player," according to Videocon Chairman Venugopal Dhoot, when other heavyweights like Nokia (NOK) and Samsung had held back. Videocon's critics dismissed the move as a publicity stunt.

The acquisitions are adding some much needed froth to the valuations of some companies. By paying affordable "Western multiples to buy and consolidate," companies are getting a higher "Indian market valuation boost," according to Grant Thornton's Harish. The UB Group, with eight listed companies, had barely any standing in India's soaring stock market until two years ago. The stock's performance was way below the galloping local index. Now, with two international acquisitionsScottish whiskey maker Whyte & Mackay in October, 2006 for $1.2 billion, and French winery Bouvet Ladubay from Taittinger in July, 2006 for an undisclosed amountand an Indian budget airline (Air Deccan), the UB group's market capitalization has zoomed to $12 billion today, up from just $150 million in 2004. "I had to show the world that I was quite capable of standing on my own feet, making money and creating shareholder wealth," said UB Chief Vijay Mallya soon after the acquisitions.
Spending Gives Pause to Some Investors

All this gorging is bound to result in some indigestion. There are plenty of challenges for the many ambitious acquisitions made by the Indians. R*ajeev Gupta, managing director of Carlyle's buyout team in India, is concerned that many of the mid-cap companies making global acquisitions have no experience in plant operation, sales forces, or corporate offices outside their home regions within India. *"They will face the difficult challenge of leading the acquired business in a completely new economic, regulatory, and cultural environment," he says. Even the ones that ultimately succeed "will need time to develop a compatible leadership style and community linkages in the new geographies."

Some investors are concerned. In February, 2007, the Novellis acquisition saw Hindalco shares plunge 12% on concerns of profitability and the high price that Hindalco paid. Hindalco has since reported a $265 million quarterly cash profit based after a one-off tax refund. Profitability, however, is still a challenge, confides a senior Birla manager. Auto analysts continue to be skeptical about Tata Motors' Jaguar-Land Rover deal, at least in the short term. Says Ramnath Subramaniam, research head at IDFC-SSKI Securities, "Tata has the management capabilities and skills to handle the acquisitions. But where is the cost rationale of moving manufacturing to India?" To help pay for its acquisitions, Tata Steel recently raised $470 million in the local bond market. On May 15, Standard & Poor's (which, like BusinessWeek, is owned by The McGraw-Hill Companies (MHP)) said the debt offering had not affected the company's BB/stable credit rating but warned of risks ahead. "Medium-term pressure persists in relation to the incremental debt required for funding the company's ambitious expansion plans in India and potentially softening demand conditions in Europe and North America," S&P said in a statement, "which may result in overall weakening profitability and cash flows."

Still, some people argue that Tata-style ambitious M&A is just what India's struggling software-services providers need. When it comes to overseas deals, the country's vaunted IT players have still remained midgets, making bite-sized acquisitions to fill immediate needs for customers with specific needs. "I wish instead of HP, the Indian IT companies had bid for EDS," says Siddharth Pai, partner and managing director of TPI Advisory, referring to Hewlett-Packard's (HPQ) $13.9 billion deal for Electronic Data Systems (EDS), announced May 13 (BusinessWeek.com, 5/13/08). "They are so focused on profitability, that they missed the chance to catapult to the big league."

Lakshman is a reporter in BusinessWeek's Mumbai bureau.

India's Global M&A Boom


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## Bushroda

*UK offers tax breaks to woo Bollywood films*
Rhys Blakely in Bombay 
The Times, United Kingdom
May 17, 2008

The UK is to offer the Indian film industry tax breaks and grants in an effort to entice more Bollywood projects to British locations. 

The Highlands of Scotland have already been used as the conflict-ridden vale of Kashmir in scores of Indian productions, in which musical numbers set in the mountains and featuring star-crossed lovers are standard fare. In recent years, however, Indian producers have increasingly fallen for the charms of lower-cost locations in Eastern Europe. 

In a renewed effort to woo India's film-makers, British trade representatives had talks this week to pave the way for a new UK-India film co-production agreement. 

The treaty will enable UK and Indian film-makers to work together to co-produce films that will be eligible for national status in both countries. In the UK, that means that joint-production films will qualify for the same tax breaks and grants as their purely British peers. Films with a budget of less than £20 million will get 20 per cent tax relief, falling to 16 per cent for bigger projects. Producers will also get access to two funds run by the UK Film Council, worth £13 million.

Officials expect ten Anglo-Indian films to be produced under the treaty in its first two years as Bollywood increasingly broadens its horizons beyond Bombay. 

Siddharth Roy Kapur, the chief executive of UTV Motion Pictures, the London-listed group that is one of Bollywood's biggest production houses, said his company would be exploring the opportunities to carry out more work in the UK on the back of the treaty. He said: We will be looking at the economic case for doing more in the UK. 

Indian production houses are becoming increasingly active in overseas markets. UTV, which is partly owned by Disney, the US media giant, also announced this week that it has launched its first solo production in Hollywood, a small $2 million budget black comedy called Ex-terminators that will star Heather Graham. 

The latest film treaty with India is the seventh such deal that the UK has cut. More than 400 co-production films have been made under similar treaties over the past seven years, including more than 140 minority UK co-productions. 

On average, about a third of a co-production's budget has been spent in the UK, contributing more than £1 billion to the economy. 

The UK already represents a key market for Bollywood, an industry that sells more than 3 billion cinema tickets in India every year - but at rock-bottom prices that deliver slender returns. In the UK, more than 2.5 million people went to see a Hindi-language film in 2005 and Indian films accounted for about 16 per cent of all UK releases. 

Creon Butler, the British Deputy High Commissioner in Delhi, said: The UK is the world's number one market for Bollywood productions outside India. 

With the UK-India film co-production agreement, the opportunities for Indo-British partnerships in the film industry are sure to increase. 

John Woodward, the chief executive of the UK Film Council, said: Aside from the clear economic benefits to film-makers, the treaty also aims to increase the diversity of film making, giving film-makers the opportunity to tell new stories that reflect our shared history and culture.


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## Neo

*Indias rice export curbs may hit winter harvest ​* 
Saturday, May 17, 2008

NEW DELHI: Indias winter harvest of rice could shrink 5 per cent this year if some farmers switch to oilseeds for fear that export curbs on the grain could prompt shippers to pay lower prices, a leading trader said on Friday.

While the winter crop makes up only around an eighth of Indias 92 million tonnes of total rice output, any sign of falling production in the worlds second-largest exporter could help support Asian prices that have already more than trebled this year.

Farmers will get 15-20 per cent less from rice processors or exporters and they may switch to oilseeds, Prem Garg, managing director of the Lal Mahal group, told Reuters in an interview.

If we have to pay higher tax, we cannot pay farmers much to procure paddy, added Garg, who said his firm shipped a fifth of Indias rice exports in the last financial year.

India, the worlds biggest exporter of rice last year after Thailand, has slapped a tax on overseas sales of its aromatic basmati variety of rice, and banned exports of other types. 

I believe rice production can fall by 5 per cent due to the decisions of the government to ban non-basmati rice exports and restrict basmati exports, Garg added. Farmers will not be interested in rice anymore.

Indias rice export curbs may hit winter harvest


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## Neo

*Indias annual inflation heads towards 8pc ​* 
Saturday, May 17, 2008

NEW DELHI: Indias annual inflation rate headed towards 8 per cent in early May, clocking a 3-1/2-year high, but analysts said it was unlikely to provoke more monetary tightening for now as economic growth appeared to be slowing.

The wholesale price inflation rate, Indias most widely watched measure, rose 7.83 percent in the 12 months to May 3, its highest since November 2004 and above a median forecast of 7.50 per cent in a Reuters poll.

The government and central bank have taken steps in recent weeks to calm inflationary pressures in Asias third-largest economy, and the finance minister said he expected inflation to moderate once cuts in steel and cement prices flowed through.

The surprise jump, which stemmed from higher prices of industrial fuel, metal products and some food items, briefly sent the rupee to a 13-month low against the dollar and the 10-year bond yield to its highest in more than two weeks.

I think pressures will persist in coming weeks and (inflation) will prevail above 7 per cent for the next three to four months, said D K Joshi, principal economist at domestic rating agency Crisil in Mumbai.

Its a Catch-22 situation as they (the central bank) have to manage slowing growth and rising inflation. Its a tough task.

Industrial output growth slowed to an annual 3 per cent in March, its weakest in six years, according to data this week, sparking concerns about a wider slowdown in the economy.

The 10-year bond yield rose 7 basis points after the inflation data to close at 7.93 perc ent and the rupee fell to 42.92 before finishing at 42.53/54.

Many analysts expect inflation to remain high and say it could climb to 8 per cent in coming weeks.

In addition, previous weeks readings have consistently been revised higher. On Friday, the inflation rate for March 8 was revised up to 7.78 per cent from a provisional 5.92 per cent.

The particularly striking feature of todays release is the extraordinary upward revision. 

Its pretty clear that inflation is not 7.8 per cent, maybe 9 per cent at the moment and rising, said Robert Prior-Wandesforde, an economist at HSBC in Singapore.

He did not expect the Reserve Bank of India (RBI) to act just yet, but if inflation hit double digits, he expected it to raise rates and tighten cash conditions around July-September, although he doubted that would be very effective.

Against that background, it is going to be hard for the RBI to resist doing something more, he said.

Indias annual inflation heads towards 8pc


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## Neo

*Despite 6.2 percent growth, India's agro industry lags behind​*Calcutta News.Net
Sunday 18th May, 2008 (IANS)

India's agro-industry has miles to go before it catches up with the rest of the world. Its share in the agro-products of developing countries has gone up only marginally from 3.1 percent in 1995 to 3.8 percent in 2005, despite growing at 6.2 percent in the 10-year period.

China tops the list by accounting for 26.5 percent of the total agro-products in developing countries, says the UN Industrial Development Organisation (Unido) International Yearbook of Industrial Statistics 2007.

'Malaysia's and India's agro-industry grew on average by 8 and 6.2 percent respectively over 10 years (1995-2005), while the regional agro-industry growth performed at 5.7 percent,' the report states.

India's agro-industry employment share, says the Unido report, in total manufacturing formal employment is only 1.2 percent, while it is 9.5 percent in the Philippines, 8.8 percent in Malaysia and 7.6 percent in China.

'There is tremendous potential in India for the growth of the agro-industry. It is happening in other countries, but not in India. What is needed is proper coordination with farmers, and adequate processing infrastructure for agro-products,' P. Chengal Reddy, secretary general of the Consortium of Indian Farmers Associations (CIFA), told IANS.

According to an official estimate, the food-processing sector has the largest employment generation potential.

It generates employment for 54,000 people per Rs.10 billion investment, while in textiles the job potential is 45,000 and in paper it is 25,000.

The employment generation in medium, small, and micro enterprises in food processing increased from 3.8 million in 2002-03 to 4.5 million in 2006-07.

Reddy said the lack of infrastructure and technical know how was causing a huge loss of agro products, particularly perishable products like fruits and vegetables.

'India loses agro products worth Rs.1 trillion every year caused by transport loss, post-harvest poor storage facilities and the use of pesticides,' Reddy said.

'Though India is the second largest producer of fruits and vegetables in the world, the level of processing is only about 2.2 percent'.

Officials in the ministry of food processing industries (FPI), however, paint a rosy picture, claiming that the food-processing sector will generate over a million jobs in due course when different initiatives start bearing fruit.

'Foreign direct investment (FDI) in food processing sector has gone up from Rs.1.75 billion in 2004-05 to Rs.4.41 billion in 2006-07,' a senior ministry official said.

The government has permitted FDI up to 100 percent in the food processing sector.

The FPI ministry is proposing mega food parks in different parts of the country with strong backward and forward integration facility, and integrated cold chain at the farm gate level, collection and strategic distribution centres.
The ministry's Vision Document 2015 on food processing industries intends to increase the processing of perishables from six to 20 percent and share in global food trade from 1.5 to 3 percent by 2015.

'In order to meet the estimated investment of Rs.2 trillion to accelerate the growth in food processing industries, the government will chip in 10 percent, while the rest of funds will come from financial institutions and private investors or FDI,' the official said.

Despite 6.2 percent growth, India's agro industry lags behind


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## Neo

*Mumbai airport voted best in India​*Calcutta News.Net
Saturday 17th May, 2008 (IANS)

Mumbai airport has been voted the best airport in India in a survey conducted by the Airport International Council, a body of operators who collectively manage over 1,600 airports worldwide.

According to the survey, shorter check-in queues, cleaner toilets, trolleys that work and a great retail experience had put Mumbai on top of the list.
Passengers at 100 airports across the world were asked to rate airports, among other things, on the basis of service, ambience and navigational aids within the terminals.

Mumbai airport scored 3.57 out of 5 - just a little below the industry average of 3.83. While Mumbai came out on top, Delhi followed at a distant 2.6, the survey said.

In all, 21 Asian airports were surveyed. Among them, Kuala Lumpur came out the clear winner.

Mumbai's Chhatrapati Shivaji International Airport (CSIA) is being modernized and upgraded by Mumbai International Airport Pvt. Ltd. (MIAL), a joint venture between the GVK-SA consortium and the Airports Authority of India (AAI).

MIAL was awarded the mandate of modernizing and upgrading it in April 2006. CSIA is India's busiest airport and catered to 25.8 million passengers and 533,593 tonnes of cargo in 2007-08.

Mumbai airport voted best in India


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## Neo

*`Make India a trading hub for gem & jewellery'​*
Chennai, May 17 

Gem & Jewellery council wants India to become a trading hub. Undaunted by high interest rates, withdrawal of GSP benefits by the US and the general economic slowdown in some markets, India's Gem and Jewellery exports grew 22.27 per cent to touch $21 billion (Rs 95,000 crore) in 2007-08. 

Because India imports key raw materials - gold and diamonds - the exports are highly import-intensive. Last year, the industry imported $18.50 billion worth of raw materials, according to the Gem & Jewellery Export Promotion Council GJEPC). However, the value addition of $2.5 billion, plus the domestic market for jewellery sustains the livelihood of some 30 lakh people. 

According to Mr Sanjay Kothari, Chairman, GJEPC, India has about 10 per cent of world market and has a huge potential to export more. Towards this end, the Council has taken a few steps. One of them is to develop India into a trading hub. Today, Israel and Hong Kong are leading trading centres in the world. India can easily be another major trading centre, Mr Kothari said. 

Another step is to build Indian brands - to popularise `Made in India'. Today, leading brands such as Tiffany get their products made in India, but sell under their own brands. For a start, GJEPC wants to popularise `Made in India' brand in West Asia, Mr Kothari said. 

*FORECASTING TRENDS *

The Council has also called for forecasting fashion trends. A `Trend Cell' has been formed for this purpose. Alongside, the Council will work with the National Institute of Design and the National Institute of Fashion Technology for enhancing design capabilities of artisans. 

Mr Kothari said that exporters from the South frequently suffer from a want of gold supplies. Exporters are not allowed import directly - they have buy from institutions such MMTC and banks such as SBI, ABN Amro and Nova Scotia. Because the demand from the South is relatively small, these agencies do not operate there. 

The GJEPC has represented to the Government to allow exporters to import gold. 

*IIJS 2008 *

Meanwhile, the Council holding an international exhibition, India International Jewellery Show (IIJS) 2008 between August 7 and 11, Mumbai. 

Over 700 exhibitors with over 1,500 booths on an area 50,000 sq metres will showcase their products, Mr Kothari said. In a similar show last year, business worth Rs 3,000 crore was transacted, he said. 

The Hindu Business Line : `Make India a trading hub for gem & jewellery'


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## Neo

*Envisaging a dynamic India by 2020​*
Rajiv Mundhra, Director, Simplex Infrastructures 

India's Economy, post independence, in many ways looks like a success story. It has shaped up in quite an impressive way with rapid economic growth rate, bold policy reforms, major foreign investments, boom in the information technology sector and infrastructure developments across the nation. Of all these, the growth of infrastructure across all industries has been a key propellant in shaping the nations growth. 

On the very same note, it becomes significant to examine the countrys infrastructure development. However, an understanding of infrastructure is incomplete without an understanding of goals set in this direction. They are perhaps an insight into what Indias infrastructure would be like in lets say 2020, a picture utopian yet inspirational in nature  which not only requires expeditious plans but also quicker implementation of those plans, in order to bolster and keep pace with the requirements of our growing Economy. 

In the wake of globalisation, providing major impetus to the infrastructure sector in India has been the governments encouraging initiative of public-private partnership (PPP). This has been brought in for advanced technology, better management and financial resources in setting up new capacities and improvement of existing ones. 

The effect of PPPs in terms of garnering investments and bringing in increased efficiency is undisputed. Moreover, FDI flow has been instrumental in the sectors growth. However, simplifying the procedures and making them part of the governments ongoing efforts would further augment FDI. 

Measures to bring in both sectors to function together include a slew of incentives in the form of tax holidays, mergers and partnerships. Joint public-private models like BOT (Built, Operate and Transfer), BOOT (Built, Operate, Own and Transfer) and DBFO (Design, Built, Finance and Operate) with different levels of shared responsibility and contribution have been formulated to further dovetail operating procedures to accommodate each party. 

The private sectors response to these measures has been encouraging. Large amount of funds in the market, courtesy the economic boom and consequent increase in the private sectors risk-taking ability have also contributed to this response. There is an all round expansion being undertaken across the major infrastructure segments  power, energy, roads, railways, airways, shipping and telecom. This development is attributed to the many big and small infrastructure Companies that have marked their presence across all verticals. 

Giving globalisation a new face, Indian Companies are also exploring global opportunities, having realised the importance of acquiring overseas assets, projects, brand and goodwill to ensure their longevity. 

The burgeoning construction industry, however, has certain constraints too, which include high duties on construction equipment. The state governments should persuade the Union government to reduce duties on construction equipment. Moreover, infrastructure Companies are said to be facing manpower crunch. The Companies have dealt with this in their own ways. Some have responded by increasing their employee remuneration; while others have changed recruitment standards with a view to make greater number of people eligible. There is also a need to institutionalise training of construction workers, which is nearly absent at the present moment. 

Vision India 2020, simply put, entails major aspects of the final picture that would emerge as an outcome of resolving above-mentioned hurdles and moving towards exploring greater avenues for growth. When the country is witnessing a gaping demand for better infrastructure facilities in order to fulfil requirements that arise with such magnitude of development, an efficient network of infrastructure services is imperative as it enables cities and villages to become vehicles for economic and social prosperity of the nation. This would imply an India where infrastructure infuses new life into the Economy, thereby laying the foundation for future growth and expansion.... 

Envisaging a dynamic India by 2020


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## Flintlock

Neo said:


> *Mumbai airport voted best in India​*Calcutta News.Net
> Saturday 17th May, 2008 (IANS)
> 
> Mumbai airport has been voted the best airport in India in a survey conducted by the Airport International Council, a body of operators who collectively manage over 1,600 airports worldwide.
> 
> According to the survey, shorter check-in queues, cleaner toilets, trolleys that work and a great retail experience had put Mumbai on top of the list.
> Passengers at 100 airports across the world were asked to rate airports, among other things, on the basis of service, ambience and navigational aids within the terminals.
> 
> Mumbai airport scored 3.57 out of 5 - just a little below the industry average of 3.83. While Mumbai came out on top, Delhi followed at a distant 2.6, the survey said.
> 
> In all, 21 Asian airports were surveyed. Among them, Kuala Lumpur came out the clear winner.
> 
> Mumbai's Chhatrapati Shivaji International Airport (CSIA) is being modernized and upgraded by Mumbai International Airport Pvt. Ltd. (MIAL), a joint venture between the GVK-SA consortium and the Airports Authority of India (AAI).
> 
> MIAL was awarded the mandate of modernizing and upgrading it in April 2006. CSIA is India's busiest airport and catered to 25.8 million passengers and 533,593 tonnes of cargo in 2007-08.
> 
> Mumbai airport voted best in India



Wow...really? 

That's pretty unbelievable, since it was voted among the worst in the world a couple of months back...


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## Neo

Stealth Assassin said:


> Wow...really?
> 
> That's pretty unbelievable, since it was voted among the worst in the world a couple of months back...



Yep, surprised me aswell. I thought HYD or BLR would beat BOM anytime!


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## Flintlock

Neo said:


> Yep, surprised me aswell. I thought HYD or BLR would beat BOM anytime!



HYD isn't fully operational yet...its having teething problems and the management is getting settled in...besides, most flyers probably have never even heard of it..

BLR hasn't started operations as yet.


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## Flintlock

*India's Reliance Entertainment in Hollywood deal*
Mon May 19, 2008 3:09am EDT

MUMBAI, May 19 (Reuters) - A unit of India's diversified Reliance ADA group, controlled by billionaire Anil Ambani, said it has signed deals with eight Hollywood production houses, as it seeks a bigger global presence.

Reliance Big Entertainment will develop and co-finance some of the projects emanating from these deals, and secure the Indian rights, it said, without specifying financial details.

"They are part of (our) long-term strategy for media investments in Hollywood... to build a fully integrated movie company with substantial holdings in production, distribution and exhibition," it said in a statement at the weekend.

The deals are with production houses including George Clooney's Smokehouse Productions, Tom Hanks' Playtone Productions, Brad Pitt's Plan B Entertainment, Chris Columbus' 1492 Pictures and Nicolas Cage's Saturn Productions, it said.

Los Angeles-based Creative Artists Agency was "instrumental in brokering the deals", and is advising Reliance on its Hollywood strategy, it said.

The company expects to generate about 30 scripts from the deals, and would be a co-producer, a part producer or a distributor of the movies, the Economic Times said, citing Chairman Amit Khanna.

Reliance Entertainment, which controls Reliance Big Entertainment, aims to have a presence across content and distribution platforms including television and digital media.

It controls producer and exhibitor Adlabs Films Ltd (ADLF.BO: Quote, Profile, Research), a private FM network, as well as gaming portal Zapak.

Billionaire investor George Soros recently paid $100 million for a minority stake in Reliance Entertainment, which the company said valued it at $3 billion.

India's UTV Motion Pictures, a unit of UTV Software Communications (UTVS.BO: Quote, Profile, Research), has co-production deals with Hollywood studios including News Corp's (NWSa.N: Quote, Profile, Research) 20th Century Fox.

Walt Disney Studios (DIS.N: Quote, Profile, Research), Viacom Inc (VIAb.N: Quote, Profile, Research) and Sony Pictures (6758.T: Quote, Profile, Research) are doing co-production deals in India, home to the world's most prolific movie industry. (Reporting by Rina Chandran; Editing by Ranjit Gangadharan)


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## vish

Man, my dream pair is finally coming true... Katrina Kaif and Nicolas Cage...


----------



## Flintlock

*Future of BPOs lies in rural India: Karnik*

BS Reporter / Hyderabad May 18, 2008, 4:34 IST

The future of India's BPO sector lies in moving more of its operations to rural parts, according to Kiran Karnik, former Nasscom president and member of IDG's global advisory board. Rural India not only offers lower costs but also an abundant pool of highly-motivated talent. 

"Indian companies have been setting up BPOs in various countries including Sri Lanka, Vietnam, China, and Thailand. However, the biggest unexplored market is here. The future destination for the Indian BPO industry is within the country," he said. 

Delivering his keynote address at the first national rural BPO conference organised by Byrraju Foundation, the NGO arm of Satyam Computer Services, in Hyderabad, Karnik said Indian BPO companies are moving slowly towards rural areas. 

"We face competition as a result of the success we have achieved, coupled with the already-existing problems like lack of talent and the related issue of attrition. Clearly, there is a huge untapped talent in smaller towns and the industry should find ways and means to identify this." 

Saying that Indian IT and BPO facilities are being set up as world-class facilities, he said that companies should look at small and cheaper facilities for services like data entry to tide over infrastructure and hiring costs.

Future of BPOs lies in rural India: Karnik


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## Neo

*EU investment in India surges past China in 2007 ​* Tuesday, May 20, 2008 

BRUSSELS: The flow of European cash into Indian firms surged more than fourfold last year, far surpassing EU investments into Chinese companies, estimates from the blocs Eurostat data agency showed on Monday.

Foreign direct investment from the 27-nation European Union into India jumped to 10.9 billion euros (17.0 billion dollars) last year, up from 2.5 billion in 2006, Eurostat said. Meanwhile, the flow of EU foreign direct investment (FDI) into China excluding Hong Kong slumped last year to 1.8 billion euros from 6.0 billion euros in 2006 despite intense media interest in the country as an emerging Asian economic power.

The drop meant that China was the least popular destination for EU FDI last year among the four major emerging economies, with oil-rich Russia taking in 17.1 billion euros in European investment and Brazil 7.1 billion euros.

The United States, Europes biggest trade partner, remained by far the biggest destination for EU investors cash, taking in 112.6 billion euros, up from 79.0 billion euros. Overall, EU FDI into the rest of the world rose 53 per cent last year to 419.9 billion euros, up from 275.0 billion euros in 2006.

Meanwhile, non-European investors ratcheted up investments in the EU by 89 per cent last year to 319.2 billion euros from the 168.9 billion euros recorded in 2006. Britain took in the lions share of FDI into Europe last year, with 87.0 billion euros or 27 per cent of the total.

Despite its diminutive size, financial services hub Luxembourg was the second biggest recipient of FDI in Europe last year with 50.2 billion euros or 16 per cent of the total. The Grand Duchy was followed by France which attracted 23.4 billion euros of FDI last year or seven per cent of the total.

Eurostat defines FDI as a long-term investment by an investor in one country in a company in another country that gives the investor more than 10 per cent control over the voting rights on the target companys board of directors. 

http://www.thenews.com.pk/arc_news.asp?id=3


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## Neo

*Indias subsidy burden may touch Rs 3,000bn by March ​*
NEW DELHI: Indias subsidy burden is become unbearable touching Rs 2310 billion. Economists believe the subsidy basket may go over Rs 3000 billion by the time the country goes to polls in March next year as the Prime Minister Dr Manmohan Singh led United Progressive Alliance (UPA) government would try to be more liberal.

Sources in the Finance Ministry admit that the governments balance sheet would be still worse because of the farm loan waiver of Rs 6. 44 billion this year and hefty sums spent on the rural employment guarantee scheme.

But for parking most of the subsidy liability outside the budget, the deficit would have remained where it was last year and as such more subsidies that the government provides now for electoral gains would put a big hole in the Union Budget and much bigger deficit, the sources admit. A higher deficit means the government pumping in more money in the market than its earning and that is bound to push up the prices. 

The Finance Ministry officials are not ready to divulge as to where Chidambaram has hidden the subsidies and how much he has actually deferred for his successor to handle. A source, however, disclosed that the oil, FCI (Food Corporation of India) and fertilizer bonds that the government has issued are not shown in the budget except to the extent of interest paid on them.

The actual subsidy that the government will have to pay for is right now parked in the balance sheets of the state-owned oil and fertilizer companies and FCI as compensation paid to them from the taxpayers money to bear the losses. There bonds, however, will have to be ultimately paid by the government and it is the total cost of these bonds that reveals the actual subsidy bill that has piled up.

The oil bonds issued to compensate the state-owned oil companies alone total up to Rs 1350 billion. The oil companies are, however, losing heavily at the rate of Rs 3 billion a day from the steep rise in the crude oil prices in the international market and the government will not be able to allow any increase in prices of petrol and diesel or kerosene and cooking gas in an election year. Obviously, this means more oil bonds in the coming months to subsidise the oil companies.

Daily Times - Leading News Resource of Pakistan


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## Flintlock

*India Ranked Above China in Social Protection*

The Asian Development Bank ranks India 10th among 31 Asia-Pacific countries in providing social security like health care and education

India has fared better in providing social security like health care, education and child welfare to its people than China and Malaysia, as per a new index brought out by the Asian Development Bank. 

In a list of 31 Asia-Pacific countries, India ranked at 10th place, above China and Malaysia, but below Uzbekistan, Mongolia, South Korea and Japan, which topped the ADB's Social Protection Index (SPI). 

Apart from China and Malaysia, the countries which are ranked below India include Philippines, Nepal, Indonesia and Bangladesh. Pakistan was ranked at the bottom, next only to Papua New Guinea. 

The ADB, in the new Index, has established that providing social protection is not subject to the wealth of a nation. Even poor countries like India can afford to provide social cover in the form of health insurance, labour market, child protection, education among other things, if there is government will. 

On a scale between zero and 1, India has scored 0.46 points, with Japan topping the chart with 0.96 points. However, the ranking of India shows that although people are getting some level of social protection, the impact of social protection programs on the incomes of the poor is low. 

Social protection is basically a term coined for showing the extent to which Asia-Pacific countries provide for welfare, labour market, social security, health insurance, micro-credit, child protection, education, and health support programmes to their citizens, mainly to those living below the poverty line. 

The ranking is expected to have some effect on international donors who work for supporting social protection activities.

Japan to invest over Rs 8,500 cr in infrastructure projects in India- Infrastructure-Economy-News-The Economic Times


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## Flintlock

*Japan to invest over Rs 8,500 cr in infrastructure projects in India*
12 May, 2008, 0019 hrs IST, TNN

NEW DELHI: Japan has committed Rs 8,582 crore as assistance to develop nine infrastructure projects in India. The assistance will help in undertaking projects such as the* Kolkata metro, Hogennakal water supply project and Tamil Nadu urban infrastructure project,* an official release said. 

*The second phase of the Delhi metro project will also be funded by Japan. *This is the highest-ever official development assistance by the Japanese government to India. *Negotiations on infrastructure projects like dedicated freight corridor, Chennai metro and Delhi-Mumbai industrial corridor have already been initiated between the two governments. Both the governments are also negotiating to set up an IIT in India. *

The two have also agreed to have a bilateral currency swap agreement to meet any short-term liquidity crisis, which marks a major step in strengthening their bilateral economic relation. India and Japan have also set up forums like the High Level Policy Dialogue on Economic Development and the India-Japan Strategic Dialogue on Economic Issues that will hold discussions annually, the statement added. 

The other projects covered by the latest aid include *Hyderabad outer ring road project, Haryana transmission system project and UP forestry and poverty alleviation project*. Earlier in the year, Japan had committed to fund the Goa water supply and sewerage project as well as the Maharashtra transmission system project.

http://economictimes.indiatimes.com...ure_projects_in_India/articleshow/3030554.cms


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## Flintlock

*In a first, Gujarat to connect all villages via satellite*

Each panchayat will have its own e-mail address and more than 13,000 of them will be hosted on the state-owned data centre. The project will be connected through very small aperture terminals, which bounce data from one location to another via satellites

Regina Anthony
New Delhi, May19

Gujarat will be the first state in India to provide high-speed connectivity through satellite-based data connections to all its 13,693 gram panchayats, as village administrative councils are commonly called, by July this year, enabling video, voice and data offerings in the areas of e-governance, distance education, tele-medicine, agriculture and interactive advisory and counselling services.

Each panchayat will have its own e-mail address and more than 13,000 of them will be hosted on the state-owned data centre. The project will be connected through so-called very small aperture terminals or VSATs, which bounce data signals from one location to another via satellites, routing these signals through small dish antennas.

The project will cost Rs 200-300 crore, a senior Gujarat government official said. "While a majority of the funds come from the state government, some capacity of between Rs 20 crore to Rs 25 crore comes from the Central government," said Varesh Sinha, principal secretary of panchayats in the state.

The build-operate-transfer project, announced by the state government in September, has India's largest mobile phone services firm, Bharti Airtel Ltd, which also runs a broadband business, as the implementing agency. Bharti Airtel, which began work on the project in January, plans to connect the with panchayats broadband connectivity at speeds of 2mbps.

"One of the best things about Gujarat is that there is a lot of great digitisation that has happened in the state than anywhere else. This will be further fuelled by the panchayat connectivity," said T.R. Madan Mohan, managing partner at management consultancy firm Browne and Mohan.

*Chris Tobit, Bharti Airtel's director, sales and operations for enterprise services, said the project was on track for completion in July.* The New Delhi based firm won the contract in October.

Gujarat is moving fast in taking information technology or IT to the village level, said an expert overseeing the Centre's common services centres project that aims to roll out some 100,000 computer kiosks countrywide.


(Hindustan Times)


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## Bushroda

*The Rise of the Indian Traveller*
by Bryan Palmer
Global Visas, UK
22/05/2008 

The Indian economy is booming and the fact that Indians are becoming avid international travellers highlights this. Various countries are now wooing the Indian traveller in order to attract this lucrative Indian market.

For many years India has been an extremely popular destination for travel, particularly due to its affordability, ancient cultural heritage and tropical climate. However as more tourists go to India, so more Indians travel abroad seeking exciting and exotic travel opportunities.

Wealthy Indians have always been common travellers, however now more middle class Indian citizen also have the opportunity to go places. This is driven by disposable income, more affordable holiday packages and cheap air travel carriers such as SpiceJet and Go Air.

According to Euromonitor International, a marketing research company, the number of Indian tourists is bound to double in the next five years. They believe that by 2011 the United States will be the holiday destination of choice for Indians, particularly as more Indian citizens have family living in the US.

Global Visas in India deal with visa and permit applications for a variety of global destinations on a daily basis. "For most countries Indian citizens need a tourist visa in order to enter," says Ajay Hasija of US Visas, Australia Immigration, Canada, Visa UK, Work Permit UK, Immigration Services. "The amount of Indians looking for holiday visas has grown greatly in the past few years and there is no doubt that the Indian economy is the core reason for this," he adds.

Countries, like Britain, are trying hard to tap into this growing market through attractive and affordable campaigns such as the current UK tourism promotion entitled, "Britain, Be Inspired". Britain is a popular tourist destination, with thousands of foreigners visiting each year. Indians are believed to be the second highest spenders in the UK, spending over £300 million on holidays in 2006.

In the past few years India has become a financial powerhouse, particularly due to their international competitiveness in the technology and IT industry, as well as becoming a tourist destination of choice. This economic progress has put more money in the pockets of the working man, enabling them to travel abroad.

Indians are looking at exotic international locations such as Thailand and Malaysia, with overseas travel sometimes being more affordable than regions within India itself.


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## Bushroda

*For Indian Tech Entrepreneurs, Downturn Still Offers Opportunities* 
*The head of The Indus Entrepreneurs, a tech networking group that mentors immigrant talent, says now is a good time to start new companies. *

By Charles Babcock 
InformationWeek, NY 
May 22, 2008 08:50 AM 

Four companies are formed, each funded with an average $7.5 million, every day of the week in the Silicon Valley in California, according to Vish Mishra, a venture capitalist and president-elect of TiE, a group that mentors immigrant talent for startups. 

Mishra is president-elect of The Indus Entrepreneurs (TiE), a technology professional networking group that is sometimes cited by researchers, such as the University of California at Berkeley Professor AnnaLee Saxenian, as one of the secrets of the Silicon Valley's success. 

"I started as a hands-on entrepreneur," said Mishra, who came to the U.S. with a degree in electrical engineering from the Institute of Technology at Banaras Hindu University in India. He got a master's degree in engineering from North Dakota State University, founded Telera, a networking firm sold to Alcatel (NYSE: ALU), and was co-founder with Kanwal Rekhi of Excelan, a networking company acquired by Novell (NSDQ: NOVL) in 1989 for more than $100 million. 

Both Rekhi and Mishra, along with other successful Indian entrepreneurs, enjoyed good fortune and wanted to give back to the community. Together they helped found The Indus Entrepreneurs, the group that stages TiECon each year to bring would-be entrepreneurs into contact with potential staff and financiers and to coach members on how to succeed as an embryonic Silicon Valley firm. Rekhi, for example, has invested $17 million of his money in 53 startups. 

Peter Thiel, co-founder of PayPal, was the lead-off speaker at TieCon 2008 on May 16. 

TiE members help newcomers find executive jobs, move from one job to another, and lay plans for their own companies. TiECon 2008 was held May 16 and 17, with about 3,500 of Indian, Malaysian, Singaporean, and others of South Asian descent gathering at the Santa Clara Convention Center to talk about starting their own companies. 

Saxenian concluded in studies several years ago that TiE functioned as much as a social integrator of foreign talent into the Silicon Valley startup culture as it did as an economic force. It cuts across corporate boundaries and keeps talent moving around, including maintaining ties with firms and talent back home. 

TiE's inital purpose 16 years ago was to circumvent venture capitalists' bias against technically-skilled Indians starting and running their own companies. Indians were considered good at following instructions and writing software, Mishra explained. Now their talents are frequently sought in management roles in start-ups. 

Now is a good time to pursue a startup role, despite a shaky stock market and possible recession. "People don't become super smart just because the economy is good," he said. Likewise, "they don't become stupid when the economy is bad." By getting to work on a new product today, it will be ready when the upturn comes, he predicted. 

"If you have the talent and skills and good attitude, this country will reward you," he said in an interview just published in The Indian American, a Highland Park, N.J., magazine addressing U.S. residents of Indian descent. 

TiE keeps establishing new chapters around the world and casting a wider net. It now has 50 chapters in 11 countries, including India, Australia, Malaysia, and the U.K., instead of being just Silicon Valley based. It's established two chapters in Pakistan. Anyone who pays $100 in dues can join, Mishra said. 

But there's no question that the unique opportunities of the Silicon Valley are going to be hard to duplicate elsewhere, he said. "[The valley] is not just about place. It's about state of mind and ability to take risks. It's the most innovative place on the face of the earth," he said.


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## Flintlock

*ISRO pitching for commercial launches*
Press Trust of India / Kolkata May 22, 2008, 17:22 IST

Riding on the recent success of its PSLV-C9 launch, the Indian Space Research Organisation (ISRO) is now pitching to increase its commercial launches to earn revenue and is negotiating with countries that restrict use of Indian launch vehicles.

"Our domestic requirement is four to five launches per year and we are trying to increase commercial launches. Our costs are about 80 per cent of international launching costs. But some coutries have restrictions about launching their satellites with Indian launch vehicles," ISRO chairman G Madhavan Nair told reporters here after receiving the Ramomohan Puraskar, 2008.

Isro, which last month launched the PSLV C-9 with two satellites CARTOSAT-2A and IMS-1 with eight nanosatellites, has become the world's second country after Russia to launch multi-satellites with Polar Satellite Launch Vehicles.

According to Nair, some advanced countries were wary of using Indian launch vehicles on the plea that those were of 'dual use' nature. They were, therefore, not willing to provide information regarding payload and other related matters.

He said Isro was negotiating with various agencies and governments for removal of the restriction. "If this can be done it will certainly bring in more revenue."

To a question, he said preparations of Chandrayan-1, India's first unmanned mission to the Moon, was well proceeding on schedule and its launch was expected in the third quarter of this year.

Stating that the satellite would be in orbit for two years, Nair said that during its orbit it would take pictures in phases of the lunar surface and look for the possibility of the existence of water and special elements like Helium-3.

ISRO to launch moon mission by December - Sify.com


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## Flintlock

*Mizoram to set up northeast India's first SEZ*

Mizoram will set up northeast India's first Special Economic Zone (SEZ).

"We have already started the process to establish the SEZ at Khawnuam village in Champhai district bordering Myanmar," said Chief Minister Zoramthanga.

"We have urged the North Eastern Council (NEC) to sanction Rs.91.3 million to build the necessary infrastructure to set up the SEZ in the eastern part of the state, which shares borders with Bangladesh besides Myanmar," Zoramthanga told IANS.

He has discussed the matter with Minister for Development of the North Eastern Region (DoNER) Mani Shankar Aiyar.

"The DoNER minister gave us a positive response and he would take up the matter with the union finance and industry ministries too," he added.

He said: "The proposed SEZ, for which a detailed project report (DPR) has already been submitted to the NEC, would go a long way in boosting employment, trade and economy and to use the state's vast agricultural and horticultural resources effectively."

"The main purpose of setting up the SEZ is to attract foreign direct investment (FDI) and boost the economy. Moreover, it is expected to generate additional employment opportunities.

"We are extremely hopeful of investment from Thailand, Bangladesh, South Korea and Malaysia for industrial and commercial projects on this SEZ," the chief minister added.

"Although Mizoram's literacy rate is high (88.49 percent of the state's 900,000 population are literate according to the 2001 census), it was the lack of adequate finance and suitable opportunity that slowed down the economic growth," the militant leader turned politician said.

Bamboo-based industries are expected to play a big role in the proposed SEZ. The Confederation of Indian Industry (CII) has estimated that Mizoram, with an area of 21,090 sq. km, has 20 bamboo species in groves covering 1,254,400 ha, contributing 14 percent of all the bamboo produced in India.

The state government had earlier signed an agreement with a Bangladeshi paper manufacturer (Nitoy-Niloy paper and pulp industry near Dhaka) to supply bamboo chips for their factory. These bamboo chips would be exported through the Sutarkandhi areas of Karimganj in southern Assam.
HindustanTimes-Print
© Copyright 2007 Hindustan Times


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## Neo

*messy battle against inflation​*
By Anand Kumar

FOR months the Indian government has been battling the phantom of inflation, launching a series of measures  including trying to suck liquidity out of the system by raising the cash reserve ratio (CRR), jacking interest rates, curbing forward trading in several commodities and forcing steelmakers to cut-back on price hikes  moves that, however, failed to tame inflation.

Despite unveiling a series of measures, inflation has been rising steadily; Indias headline inflation rate  as measured by the wholesale price index (WPI)  rose to a record high of 7.83 per cent for the week ended May 3.

And now, in the midst of this messy battle, actual inflation (as against fears of inflation and scare mongering) is finally raising its ugly head, leaving the government bereft of crucial weapons, already spent fighting the phantom.

Last week, when international oil prices topped the $135-mark (for a barrel), saw one of the most formidable threats on the price front: the Indian rupee breached the 43 (to the dollar) mark for the first time in 13 months, plunging to 43.21. The currency has in recent weeks abruptly reversed its year-long northward journey, and started tumbling against the dollar.

The weakening Indian currency threatens to upset the governments plans and could trigger off a nasty round of sharp price hikes. Analysts worry that inflation will soon touch the eight per cent mark, and there could be the possibility of it touching double-digits later this year.

For the United Progressive Alliance (UPA) government, which has just completed four years in office, nothing could be more tragic. Elections to several important states  including Madhya Pradesh, Rajasthan, Delhi and Chhattisgarh  will he held over the coming weeks and general elections are less than a year away.

The Reserve Bank of India (RBI), the countrys central bank, under pressure from the government, has been raising interest rates over the past two years, tightening liquidity, though prices were ruling modestly. Now with wholesale and consumer prices heading northwards, the limitations of fiscal measures are becoming apparent.

The UPA government has also stubbornly refused to raise the retail price of petrol, diesel, kerosene and LPG (liquefied petroleum gas), for fear of alienating the electorate and triggering off inflation. But now with oil prices topping $135, the state-owned oil marketing companies are in dire straits.

If they are not allowed to raise the retail price over the next few months, the oil companies have warned the government, the country may have to go in for drastic measures, including rationing of petroleum products.

But with crucial elections staring it in the face, the last thing the government would want to do now is to raise petroleum prices. Bankers expect the RBI to further tighten liquidity, by going for a 25 to 50 basis points hike in the CRR.

* * * * *

WITH international oil prices showing no signs of cooling, the rupee will continue to remain under acute pressure. According to market analysts, if oil prices touch $150 a barrel, the rupee will fall to 44 against the dollar.

Combined with the spurt in international food and commodity prices, the currency is set to lose all the gains of the previous year. The Indian rupee gained 12 per cent against the dollar in 2007, hurting Indian exporters. But it has already lost nearly nine per cent against the dollar this year  it fell by six per cent in May  and has emerged as the second-worst performing currency in Asia after the South Korean won.

The Indian currency peaked in November, touching 39 to the dollar, as foreign institutional investors (FIIs) poured money into the stock markets. Last year, FIIs net investments into the stock markets added up to a record $17.4 billion. But this year, with hardening interest rates in the US, many FIIs have been pulling out funds from India. They have so far sold a net $3 billion this year, adding to the plight of the rupee.

The RBI has for over two years maintained a hands-off policy in the foreign exchange market; it has not intervened significantly by selling dollars to ease pressures on the rupee. Indias foreign exchange reserves add up to nearly $313 billion; more than $100 billion were added to the kitty in 2007 alone.

The biggest buyers of dollars in the market are oil companies, who use it to fund their crude acquisitions. India imported nearly $72 billion of oil last year, which was about 25 per cent more than in the previous year. The country imports 70 per cent of its oil requirements.

The escalating oil bill is widening the trade deficit, which has already jumped from $59 billion in 2006-07 to $80 billion in 2007-08. The current account deficit also widened to $5.4 billion for the October-December quarter, from $4.7 billion in the previous quarter. With oil prices having shot up by 40 per cent so far in 2008, the current account deficit will balloon further.

Soaring international prices for fuel, food and fertilisers means that the deficit will continue to grow. The government pays international market prices for fuel, food and fertiliser, but populist policies  and pressures from its Leftist supporters  prevent it from realising the same from consumers back home.

The result: the deficit keeps widening and threatens to upset the governments finances. According to estimates, a one per cent fall in the value of the rupee adds Rs70 billion (about 0.15 per cent of the GDP) to the governments fiscal deficit, as it is forced to sell expensive imported oil, food grains and fertilisers at ridiculously low prices to consumers and farmers.

Rising inflation and a weakening rupee will discourage FII inflows. The Indian economy is also expected to slow down this fiscal to around eight to 8.5 per cent. For the financial year ended March 31, 2008, gross domestic product (GDP) grew by 8.7 per cent, as against 9.6 per cent in the previous year.

* * * * *

THE RBI is expected to ease restrictions on overseas corporate borrowings, to lessen the burden on the rupee. These restrictions were imposed when the rupee was gaining strength against the dollar.

Companies that went in for overseas borrowings of more than $20 million could not repatriate it to India, while those borrowing less than that sum had to get the central banks permission.

With domestic interest rates on the rise last year, many companies were borrowing cheap abroad and repatriating the funds. This resulted in increased forex flows, adding to the kitty, but not helping the economy in any way.

But the sharp about-turn in the direction of the rupee has taken most exporters and corporates by surprise. Many companies had hedged their foreign exchange cash flows for periods ranging from 12 months to 18 months, and the falling rupee has caught them unawares.

Jewellery exporters had hedged raw materials such as diamonds and gold at Rs40-40.5 to the dollar, expecting the rupee to strengthen to 38. But with the weakening currency, they are having to book losses.

Some exporters had taken pre-shipment dollar-loans, attracted by the lower interest rates, and converted them into rupees. Now they will have to pay more for the dollars needed to repay their loans.

The RBI, in a bid to prevent corporates from shifting to other centres like the Dubai Gold and Commodities Exchange  which last year launched a rupee futures contract - plans to unveil rules for exchange-traded futures for currencies and interest rates, later this month. Trading could begin later this year.

Once the rules are in place, eligible exchanges will be allowed to deal in currency futures. Importers, exporters and companies with forex exposures can buy hedges through exchanges. The currency future will allow the participant to buy or sell a currency at a future date on the basis of an exchange rate fixed on the last trading day.

Exchange-traded currency futures will hopefully bring greater transparency in the pricing of hedges, and will also help in their price discovery. The Indian rupee is a partially convertible currency. The government is keen to go in for full convertibility, but opposition from its Left supporters has prevented it from exercising this option.

The messy battle against inflation -DAWN - Business; May 26, 2008


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## Bushroda

*Five mn tourists visited India in 2007* 
Press Trust of India / Puducherry 
May 27, 2008, 19:19 IST 

Around five million foreign tourists had visited India in 2007 which was a big jump from the 3.92 million tourists during the previous year, Union Tourism and Culture Minister Ambika Soni said today. 

Around 400 million domestic tourists had also travelled across different parts of the country during 2007, she said. 

She was speaking after declaring open the Rs 35 crore 'Zest Big Beach-Puducherry' a project of the Mahindra Holidays and Resorts India Limited (MHRIL) at Manapet coastal village near here. 

Puducherry will emerge in the near future as a major centre for cruise tourism and efforts to promote this project would be intensified in collaboration with the Union Shipping Ministry, she said. 

"We should work together to make Puducherry as a major destination as was done in respect of Sikkim and Goa and other destinations. In the near future Puducherry would emerge as a centre for cruise tourism", she said. Around 74 heritage sites had been identified in Puducherry and "we should look at the best of them for promotion and restoration for the benefit of the people here", she said. 

The Auroville International Project and Sri Aurobindo Ashram here were adding to richness, the legacy and also full-fledged projection of Puducherry as a destination. 

"There had been lot of questions and eager enquiries about Auroville in different parts of the world from information seekers as they want to visit Auroville to have a new experiment in India", she said.


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## Mohammed Azizuddin

*India top trade destination for Dubai*

India has emerged as Dubai's top trade partner, with the country heading the list of import and export destinations from the latter in the first quarter of 2008.

India had a share of 13.14 per cent of the total imports from the emirate worth AED 12.6 billion (1 AED = .272 USD) while 45.7 per cent of the total exports worth AED 4.7 billion 0during the period.

It also emerged as the top re-exports destination with 31.8 per cent (AED 11.9 billion) out of the total re-exports in the first four months of the year.

In list of top imports destination, China came second with a total figure of AED 10.7 billion, followed by Switzerland at AED 7.2 billion.

India, China and Switzerland together accounted for 31.8 per cent of Dubai's total imports.

Dubai's non-oil foreign trade jumped 46 per cent in the first quarter of 2008, reaching AED 214 billion, against AED 146.5 billion registered during the same period in 2007.

During the period under review, Dubai's exports recorded a phenomenal growth, soaring by 79 per cent, while re-exports went up by 73.5 per cent and imports grew by 49.7 per cent, said figures from Dubai World's Statistics Department.

"The figures underscore the buoyant commercial growth of the emirate, reinforcing Dubai's reputation as a major commercial hub, Sultan Ahmed Bin Sulayem, Chairman, Dubai World, said.

"The growth is fuelled by the government's relentless efforts to upgrade the existing modern infrastructure of ports, airports and land transportation network, connecting Dubai to the world," he added.


----------



## Mohammed Azizuddin

*Being global without India impossible: Airbus CEO*

Berlin, May 28: Acknowledging that it cannot be truly global without being present in India, French aircraft maker Airbus Industrie has drawn plans to expand market share and strengthen research capabilities in the country.

*"India is one of our strategic partners. You can't be global without being in India -- with its large number of highly skilled, motivated and knowledgeable people," Airbus CEO and President Tom Enders told reporters at air show in Berlin.*

Noting that Airbus Industrie would have to think beyond its "European Box" and become global, he said by increasing our global footprint "we can take advantage of the best the world can offer in terms of resources, people and skills.

*Referring to India, the head of the aviation major said: "We are capitalising on the incredible energy and entrepreneurial spirit in this country. We have initiated Research and Training cooperation with some of the most respected Indian universities and laboratories."
*
*While terming the opening of its Centre in Bangalore as a "small step", he, however, made it clear that the company had "big" plans in store. "Last year we opened our first Airbus engineering centre in Bangalore."
*
*At this high-tech centre, Indian engineers are responsible for developing advanced modeling and simulation, covering crucial factors in the design and production of high performance aircraft such as A380 and A350.*

**


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## Bushroda

*Indian economy grew 9.0 pct in year to March 2008*

NEW DELHI (AFP)  India's economy grew nine percent in the last fiscal year, second only to China among the world's major economies, helped by unexpectedly high fourth-quarter expansion, data showed Friday.

The annual gross domestic product (GDP) growth to March 2008 was down from the previous year's 9.6 percent but above a government projection in February of 8.7 percent.

The figure marked the third straight year that the economy grew nine percent or more. It came despite aggressive monetary tightening to tame inflation running at nearly eight percent.

Inflation is causing acute concern to the Congress-led government ahead of general elections due within a year.

Economic growth was 8.8 percent in the fourth quarter to March as interest rates at six-year highs hit consumer demand and investment. But the figure was still far better than analysts' forecasts of 8.1 percent.

"One Asian country where we didn't expect to see GDP surprise the consensus on the upside" in the final quarter was India, said JP Morgan analyst Rajeev Malik, who rated the performance was "not bad by any standards."

But he raised the possibility the economy's strength might prompt India's central bank to move sooner than expected to further tighten monetary policy.

"The risk is that it comes early and is more aggressive than we assumed," said Malik.

Most private analysts expect the economy to slow in the current financial year to around seven to eight percent growth.

They cite a central bank wrestling to contain inflation, climbing global commodity prices and mounting investor risk aversion amid worldwide financial turbulence.

India's growth is still turbo-charged by anaemic Western standards, but the figure is well shy of the double-digit levels economists say is needed to rescue hundreds of millions of Indians from crushing poverty.

Pessimism about growth this year was fed by data earlier showing annual industrial output in March grew by three percent -- its smallest rise in six years.


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## Bushroda

*Forex reserves of India crossed USD 341 billion in 2007-08* 

Mr Ashwani Kumar union minister of state for commerce & industry, while addressing at India Investors Summit, said that foreign direct investment inflow has risen to over SD 25 billion in 2007-08 and the foreign exchange reserve crossed USD 341 billion.

Around 500 of the worlds leading boardroom executives and steering industry professionals had gathered in London to map out the core areas of investment and discuss the opportunities and challenges presented by India at the investors summit.

Mr Kumar highlighted the union government initiatives that had made growth more inclusive. He added that the next wave would be in the skill based manufacturing sector. He gave a background to the reform process and explained the key drivers of economic growth.

He stressed that domestic demand and investment were the key drivers of growth and, therefore, they insulated the economy to a large extent from the sub prime crisis. He calculated the growth potential of the services sector to be USD 200 billion, that would offer employment to 40 million.

Mr Kumar was confident about the sustainability of growth, as no reform measure had been reversed so far. He said that "Despite an imported inflation arising from high oil and food prices, we have been able to handle the global pressure well. We have managed the political economy."


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## Flintlock

*India's food inflation lowest among 15 developing nations
*
New Delhi (PTI): India has been better off in managing food inflation compared to several other developing countries in 2007-08, even as the government faces public and political anguish over sharp rise in prices.

Prices of food articles rose by 5.8 per cent in India, the lowest increase among 15 developing countries for the period ending February 2007-08, a joint report of the Organisation for Economic Cooperation and Development (OECD) and Food and Agriculture Organisation (FAO) has said.

Food prices showed the highest increase at 25.6 per cent in Sri Lanka, followed by Kenya at 24.6 per cent and China 23.3 per cent, the report entitled 'Agriculture Outlook 2008' said.

A record foodgrain production estimates at 227.32 million tons during 2007-08, against 217.28 million tons last year has helped India keep food inflation under control, experts said.

However, recent negative yield shocks in key food commodities like pulses and oilseeds have contributed to the price increase, they said, adding that global price rise had a spill-over affect on domestic rates as well.

However, India's food inflation still remains higher than the developed countries like the US and Japan during the review period, the report said.

Rate of rise in food prices stood at 1.4 per cent in Japan, at 5.1 per cent in the US and at 5 per cent in France, it noted.

For developed countries, where the price rise in food items is moderate and the share of food in the total consumer basket is small, the contribution of food price inflation to overall inflation is correspondingly moderate.

But as would be expected, the impact of food price inflation on overall inflation in developing countries is much larger, the report added.

The Hindu News Update Service


----------



## Mohammed Azizuddin

Bushroda said:


> *Indian economy grew 9.0 pct in year to March 2008*
> 
> NEW DELHI (AFP)  India's economy grew nine percent in the last fiscal year, second only to China among the world's major economies, helped by unexpectedly high fourth-quarter expansion, data showed Friday.
> 
> The annual gross domestic product (GDP) growth to March 2008 was down from the previous year's 9.6 percent but above a government projection in February of 8.7 percent.
> 
> The figure marked the third straight year that the economy grew nine percent or more. It came despite aggressive monetary tightening to tame inflation running at nearly eight percent.
> 
> Inflation is causing acute concern to the Congress-led government ahead of general elections due within a year.
> 
> Economic growth was 8.8 percent in the fourth quarter to March as interest rates at six-year highs hit consumer demand and investment. But the figure was still far better than analysts' forecasts of 8.1 percent.
> 
> "One Asian country where we didn't expect to see GDP surprise the consensus on the upside" in the final quarter was India, said JP Morgan analyst Rajeev Malik, who rated the performance was "not bad by any standards."
> 
> But he raised the possibility the economy's strength might prompt India's central bank to move sooner than expected to further tighten monetary policy.
> 
> "The risk is that it comes early and is more aggressive than we assumed," said Malik.
> 
> Most private analysts expect the economy to slow in the current financial year to around seven to eight percent growth.
> 
> They cite a central bank wrestling to contain inflation, climbing global commodity prices and mounting investor risk aversion amid worldwide financial turbulence.
> 
> India's growth is still turbo-charged by anaemic Western standards, but the figure is well shy of the double-digit levels economists say is needed to rescue hundreds of millions of Indians from crushing poverty.
> 
> Pessimism about growth this year was fed by data earlier showing annual industrial output in March grew by three percent -- its smallest rise in six years.



Thats the greatest news....this had a resounding effect on the stock exchange as well...profits!!!

I really doubted if we could grow at 8% considering the massive credit crunch and slowdown in the US economy....now this should prove that we are indipendent of foreign factors.....great news really!!!


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## Bushroda

Mohammed Azizuddin said:


> Thats the greatest news....this had a resounding effect on the stock exchange as well...profits!!!
> 
> I really doubted if we could grow at 8% considering the massive credit crunch and slowdown in the US economy....now this should prove that we are indipendent of foreign factors.....great news really!!!



We just got lucky in the last quarter. There is no way that 9% growth would follow in this fiscal year. Even 8% would be accetable. The problem is once you slow down you lose momentum & then it becomes tough to gain it back. Say good bye to 10%+ growth rate. It is not hapenning atleast till 2012 (that too if the cost of oil moderates).


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## Mohammed Azizuddin

Bushroda said:


> We just got lucky in the last quarter. There is no way that 9% growth would follow in this fiscal year. Even 8% would be accetable. The problem is once you slow down you lose momentum & then it becomes tough to gain it back. Say good bye to 10%+ growth rate. It is not hapenning atleast till 2012 (that too if the cost of oil moderates).



At least take a look at the positive side of the story, the biggest economy in the world is slowing down, Britan's economy is slowing down, Spain,Frace all of them are feeling the heat of recession, the pirce of crude oil is hitting the roof, the food prices are hitting the roof, inflation is causing a headache for developing countries, and then you have our economy growing at 9%, which is the second highest growth rate in the world...maan...thats quite an achievement.

Get ready for more FDI into India and china.


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## Neo

*India eases overseas debt norms ​* 
Sunday, June 01, 2008

NEW DELHI: India allowed service sector firms on Saturday to agree overseas borrowings of up to $100 million in another attempt to shore up the rupee.

On Thursday, the government had eased overseas borrowing rules for firms, raising the limit on the amount that a company can borrow abroad and repatriate to $50 million from $20 million.

It also allowed firms in the infrastructure sector to borrow $100 million from abroad, and raised the foreign institutional investment limit in government and corporate bonds to $5 billion and $3 billion, respectively.

Economists had said the steps would deepen Indias debt markets and shore up the rupee. 

A finance ministry statement said hotels, hospitals and software companies could avail themselves of overseas borrowings of up to $100 million to import capital goods under the approval route.

It said the amendments to the External Commercial Borrowing policy would be effective after the Reserve Bank of India (RBI) approval.

The statement said the changes in policy were made after consultation with the RBI to keep it in tune with evolving macro economic situation, changing market conditions and sectoral requirements. The Indian rupee climbed to its highest level in more than two weeks on Friday, and closed at 42.45/46 per dollar.

India eases overseas debt norms


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## Flintlock

*Mega hubs to change face of industrial landscape*

30 May, 2008, 0428 hrs IST,Gireesh Chandra Prasad, TNN

With a focus on infrastructure, Andhra Pradesh, Gujarat, Karnataka, West Bengal, Orissa and Tamil Nadu are creating investment hubs that have the potential to collectively attract Rs 10 lakh crore in investments and create 43 lakh jobs in the next several years.

Each of these investment hubs that span several hundreds of square kilometres will have urban utilities like housing complexes, cinema halls, schools and hospitals and major industries in oil, chemicals, petrochemicals and several downstream industries in their heart. The investments into external infrastructure like roads, sea ports, airports and rail network would be made by the union government while power to these massive industries would be provided by the state government.

Besides their own investments into utilities like hospitals and schools, the state governments will also strike partnership deals with builders and other private players to set up housing complexes and other facilities.

Industrial investments would come from state-run and private firms  domestic as well as global. Chemicals and fertilisers minister Ram Vilas Paswan, whose ministry conceptualised these massive investment hubs, said that the first PCPIR is likely to come up in Andhra Pradesh, followed by one in Gujarat. Sources said the ambitious investment hub in Andhra Pradesh is likely to be notified in a couple of months.

In the 603.6 sq km petroleum, chemical and petrochemical investment region (PCPIR) traversing the Visakhapatnam-Kakinada region in Andhra Pradesh, the central government would pump in about Rs 5,974 crore to build roads, rail links, rail freight stations, airports and cargo complexes while the state would spend Rs 2,132 crore to provide mainly water and power supply, it is understood. A larger chunk of infrastructure investment of Rs 10,565 crore would come from private investors, as per the proposal the state government has prepared, it is learned.

Gujarat is expected to invest Rs 18,691 crore in infrastructure  including funds from central government and private players. Karnataka, which is creating a PCPIR in 250 sq km and anticipating an industrial investment of Rs 2.3 lakh crore, will spend Rs 10,147 crore in infrastructure. This includes contribution from the central government and private developers. Orissa, which will create a 284 sq km PCPIR, will get infrastructure investments of about Rs 15,273 crore from all the three sources. The Left-ruled West Bengal will have a total infrastructure investment of about Rs 25,750 crore, while Tamil Nadu will pump in Rs 6,189 crore.

The Andhra Pradesh PCPIR has the potential for industrial investments of Rs 3,43,000 crore while Gujarat has an investment commitment from private players as well as central and state governments of Rs 50,000 crore. The West Bengal PCPIR has the potential to attract industrial investment of about Rs 80,000 crore and the one proposed in Tamil Nadu has the potential for Rs 24,178 crore.

In Andhra Pradesh, global majors like Total SA of France, Mittal Energy Investments, GAIL India, Oil India and oil refining and marketing major Hindustan Petroleum Corp (HPCL) are expected to invest Rs 32,000 crore. This consortium will set up a 15 million tonnes a year (mtpa) refining-cum-petrochemical complex. Besides this, HPCL is expected invest another Rs 10,000 crore to double its existing 7.5 mtpa refining capacity in the region.


Public sector refining major Oil & Natural Gas Corp (ONGC) would invest Rs 31,000 crore to set up a refinery and polypropylene unit in Kakinada SEZ. The state government anticipates exports of Rs 58,000 crore a year and tax receipts of Rs 46,500 crore a year from this PCPIR, which is expected to account for 9% of the total value of goods and services produced in the state.

Creating sophisticated infrastructure across the country to facilitate industrial development may take time. The governments idea, therefore, is to select regions in the coastal area, where port connectivity could be provided easily to such industrial hubs in addition to upgradation of other modes of transport. Removing the need for multiple clearances and providing infrastructure would remove the two major hurdles for industrial development.

The states that have moved PCPIR proposals have to create bodies similar to Noida set up by the Uttar Pradesh government, the final administrative step before investments could come in. The ministry of environment and forests is also understood to be working with the pollution control boards in these six states to ensure that environmental disturbance because of large scale industrialisation is kept to a minimum.

To give a big boost to Indias $8.8-billion petrochem industry, the government also came out with a policy that aims at encouraging local production, consumption and export of petrochemicals and plastics. Neighbouring China has a strong presence in plastics and enjoys a substantial share of the global footwear and toys market.

The government intends to promote use of plastics in areas like agriculture storage and water conveyance, and facilitate research on waste management technologies. The policy envisages steps to attract more investments in the sector and to enable the country to capture a larger slice of the Asian demand for polymers. To achieve this goal, the government would strive to provide natural gas  the feedstock  at globally competitive prices, create infrastructure and further rationalise tariffs and taxes.

The government also intends to assist modernising the downstream plastic processing industry to enhance its capacity and competitiveness. By 2011, the per capita consumption of plastic products and synthetic fibre is expected go up three-fold from the current 4 kg and 1.6 kg, respectively. A petrochemical technology upgradation fund, a plastic development council and a task force on petrochemical feedstock to suggest measures to ensure the availability of petrochemical feedstock at internationally competitive prices are in the making.

Mega hubs to change face of industrial landscape- Infrastructure-Economy-News-The Economic Times


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## Neo

*India sees bumper wheat, rice crops​*
NEW DELHI, June 3: India expects its rice harvest to rise by two million tons and wheat output to increase by over one million tons next year spurred higher by the use of better seeds, a top farm ministry official said on Tuesday.

Agriculture Commissioner N B Singh told Reuters in an interview India already had more than adequate stocks of wheat, and is expected to meet its target to buy 27 million tons of rice this year, raising hopes curbs on exports will be eased.

We are hopeful of meeting a target of two million tons of extra rice next year as there is a huge scope to increase productivity by popularising hybrid seeds, Singh said.

In April, the government forecast a record wheat crop of 76.78 million tons and 95.68 million tons of rice this year.

India has fixed a floor price of $1,000 per ton and levied a $200 per ton export tax on basmati rice, and banned shipments of other grades, aiming to ensure smooth supplies and tame inflation, currently at a three-year high of 8.1 per cent.

India has retained controls on grain exports although Cambodia last month lifted its ban on rice exports, while Japan has pledged to release at least 300,000 tons of imported rice from storage onto the world market to help ease a global food crisis.Singh said India may broaden the definition of basmati rice to include the high-yielding aromatic Pusa 1121 variety, a long-pending demand of exporters who want to export premium non-basmati rice.

It is being considered. There will be a decision soon.

Singh said Indias food situation had improved since the country imported wheat two years ago after a gap of six years. Our efforts were to boost production and productivity.

Weather has been helpful. Supply of fertiliser has gone up and quality seeds have been made available to farmers, he said.

Farm officials have been trying to raise productivity in the country, where farmland is shrinking because of industrial growth and urbanisation.

Singh said the government was giving incentives to farmers and seed suppliers to make hybrid seeds, which can raise productivity significantly, more popular.

Last year, the area under hybrid rice was one million hectares. In the next four years, we should increase the area under hybrid to at least three million hectares, Singh said.

India sees bumper wheat, rice crops -DAWN - Business; June 04, 2008


----------



## Mohammed Azizuddin

NEW DELHI, JUL 19 : The government on Thursday approved 17 foreign direct investment (FDI) proposals worth Rs 589.85 crore. These include a Rs 313.33-crore proposal by Sweden-based Quinn Hotels to develop hotels in India.

The foreign investment promotion board (FIPB) in its July 13 meeting had recommended to the finance ministry the Quinns proposal to form a 100% subsidiary in India for investment in construction of properties and acquire existing companies engaged in hotels development. Flemingo Duty Free Shops Pvt Ltd also got clearance to invest Rs 100 crore to set up duty-free shops at airports and seaports.

The government also gave approval to Japan-based Orix Corporation, a major financial services group, which wants to pick up 5% stake in IL&FS Securities Services Ltd for an estimated investment of Rs 36 crore. It is planning to invest in the business of providing depository participant services.

Singapore-based Google Holdings proposal to pick up 30% units of Ventureast Denet Fund, a Sebi-registered venture capital fund, was also given a go-ahead.

The proposal of Bhilwara Energy to induct foreign equity of up to 8.26% has also been cleared. The company wants to set up another company, which will invest in firms engaged in power generation and transmission.


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## Flintlock

*India witnesses 12% growth in employment*
Press Trust of India / New Delhi June 04, 2008, 17:32 IST

Notwithstanding fears of talent shortage in the country, India witnessed a 12 per cent growth in employment by privately-held businesses last year, with Bangalore leading the cities' tally, a latest report says. 

According to the International Business Report (IBR) by global consultancy firm Grant Thornton International, Vietnam tops the employment growth index 2008 with a 14 per cent rise in employment by privately held businesses, followed by India and China at 12 per cent each. 

With double digit growth, Vietnam, India, mainland China and Armenia (11 per cent) top the employment growth table. Thailand (negative 4 per cent), Italy (0 per cent), France, Ireland and New Zealand (all one per cent) are at the bottom with a negative growth in employment. 

Among the cities in India, Bangalore topped the list by 16 per cent growth in employment, followed by Chennai, Pune and Ahmedabad at 14 per cent.

Country's financial hub Mumbai and National capital Delhi showed a growth of only nine per cent each this year, the report stated. 

"Developing Asia will account for two-thirds of rise in employment growth, with India alone making up 30 per cent of the net increase in global employment with 142 million new jobs by 2020," Grant Thornton India National Staff Partner Vinamra Shastri said. 

The employment growth in Bangalore, Chennai, Pune and Ahmedabad is due to the higher concentration of human-capital among the IT/ITES industries in these cities, Shastri added

India witnesses 12% growth in employment


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## Flintlock

*Nissan to build compact cars in India*

June 4, 2008 - 9:35AM

Japanese auto major Nissan said it has identified India as one of the five low-cost countries where it would manufacture its new-generation compact cars.

"Nissan will compete in the entry-car market with a dedicated new A platform that will be used for at least three models, including the next generation of Micra, and will be built in five leading competitive countries (LCCs)," the company said in a release.

It said production sites for the new compact cars would include the new plant in the southern Indian city of Chennai being constructed by the Renault-Nissan Alliance.

Nissan and Renault had announced earlier that they would invest 40 billion rupees ($A982.3 million) in setting up the Chennai plant which would roll out 400,000 vehicles a year under both brand names.

Nissan to build compact cars in India - Breaking News - Business - Breaking News


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## Bushroda

*New India refinery could squeeze margins globally*
Bloomberg News 
June 2, 2008, 1:18PM

Reliance Petroleum's new refinery in India may lead to lower margins on gasoline and diesel for refiners in Europe and the U.S. when it starts production this year, a report said.

The 580,000-barrel-a-day Jamnagar refinery, a unit of Reliance Industries, India's most valuable company, will increase global output of both gasoline and diesel by about 1 percent while adding 0.7 percent to global refining capacity, Bernstein Research said in a report today.

''Its massive scale and high complexity will mean it is likely to have a significant impact on global product markets,'' said Neil McMahon, an analyst, in the report e-mailed today. ''It will be a harbinger of the changes to come in the refining industry over the next five years as other greenfield export refineries are constructed in the Middle East and Asia.''

The $6-billion refinery, which Bernstein called the world's sixth-largest, is being built adjacent to a 660,000-barrel-a-day plant owned by Reliance Industries and is scheduled for completion by December this year. The combined facility will be the world's biggest refinery, according to the parent.

Over the next five years, new, export-led refineries in Asia and the Middle East will add 4 percent in capacity annually, outpacing a 1.9 percent growth in demand a year for light products, including gasoline and diesel, the report said.

Refining margins are currently ''unsustainably low'' and should rise in the short term into the peak of the driving season in summer, McMahon said, citing Valero Energy Corp., the largest U.S. refiner, as its ''top refining pick.''

Reliance's refinery, in which Chevron owns 5 percent, benefits from capacity additions because of its scale, complexity and flexibility to supply any market that offers the highest price, the report said.

The refinery is able to process lower cost, high sulfur, heavy crude grades, turn them into premium, low sulfur fuels and ship them at lower transport costs because of its location close to the Arabian Peninsula, the report said. At $10,300 a barrel of capacity, the venture costs about half as much to build as other projects in the Middle East and elsewhere, according to the report.

Reliance may export gasoline and alkylate to the U.S. West Coast in summer and to Asia in the winter, while supplying low sulfur, less polluting diesel to Europe, the report said. The refinery has a complexity of 14 on the Nelson scale and technology that enables it to produce high quality fuels and shift production among products based on market prices.

''This combination of scale and complexity will be unique in the refining industry,'' McMahon said. ''It will easily be the largest refinery for this level of complexity.''


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## Flintlock

* The Trillion Dollar Upgrade: The Unprecedented Scale of Infrastructure Investment in China and India Is Only Now Being Fully Understood*


NEW YORK, NY and LONDON -- 06/04/08 -- China and India are spending an unprecedented $1.5 trillion on infrastructure projects in the next five years, approaching the level of US infrastructure spending for the first time, according to investor reports published today which identify the full scale of expenditure for the first time.

The comparison with the US, which spends $400 billion on infrastructure annually, is particularly striking given the big difference in national wealth. US gross domestic product in 2007 was $46 trillion compared to China's $3.6 trillion and India's $1.05 trillion.

The scale of this spending in China and India, on everything from sea ports and railways to energy and water systems, is much larger than previously understood and opens up significant new opportunities for private investment and expertise from overseas. The surprise is that India is likely to offer better infrastructure investment opportunities than much-trumpeted, and still fast growing, China. 
*
India -- playing catch-up, fast*

India's infrastructure is largely underdeveloped but the government in New Delhi is now making up for lost time. Almost $500 billion is budgeted for infrastructure spending in the Five Year Plan covering 2007-12, almost double the proportion of GDP earmarked in the previous plan. One third of this investment is now expected from private firms, up from 18 percent previously. Converting this plan into reality will test both the country's political flexibility as well as the patience of potential private investment.

India leads the major emerging economies in attracting private investment in infrastructure. Our report "India Infrastructure: Playing Catch up" analyses how this sets it apart from those economies in which infrastructure investment, other than ports, is dominated by state firms. 

Full Article Here:
The Trillion Dollar Upgrade: The Unprecedented Scale of Infrastructure Investment in China and India Is Only Now Being Fully Understood


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## Flintlock

*Rail link between Jogbani and Nepal soon: Lalu*


FORBESGANJ(Bihar): Seeking closer economic ties between India and Nepal, Railway minister Lalu Prasad on Wednesday announced laying of a rail line between Jogbani in Bihar and Viratnagar, the commercial and industrial hub of Nepal.

"India has an age-old bond of friendship with Nepal and extension of the 108 km-long Katihar-Jogbani broad gauge line to Viratnagar will further strengthen our already close people to people contact and economic relations," Lalu said addressing a gathering after commissioning of the newly laid Katihar-Jogbani broad gauge line at Jogbani.

The minister flagged off 3160 down Jogbani-Kolkata Express and announced commissioning of four pairs of passenger trains between Jogbani and Katihar under Katihar division of North Frontier railway.

He also flagged off by remote control 5715 Kishanganj- Ajmer Garib Nawaz Express with increased frequency from once a week to thrice weekly.

The railways were in the process of executing a number of projects in Bihar which would create job opportunities for the Biharis, who were second to none in term of talent and skill, on a big scale, the minister said.

Deploring the violent attacks on Biharis in different states particularly Maharashtra and Assam, Lalu underscored the need for the state's NDA government to create jobs particularly through development of infrastructure so that Biharis do not have to migrate to other states in search of livelihood.

Rail link between Jogbani and Nepal soon: Lalu-India-The Times of India


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## Flintlock

*India needs to triple energy capacity to meet demand*

4 June 2008 - India needs to add the equivalent of about half the electricity generating capacity of the UK each year - or about 30 GW - if it is to maintain its present rapid rate of economic growth, a new report shows.

*Yet the country in the past decade has managed to build an average of only 4 GW of fresh capacity a year, a fraction of what the study by McKinsey & Co estimates will be required if the economy is to continue to expand at 8 per cent a year.*

The consultancy estimates that India will need power generation capacity of up to 440 GW by 2017, or triple its existing capacity, and about one-third more than most projections of what will be required.

"There's been a lot of acceleration of construction of new capacity but this sector is so complex that to achieve your targets, you have to transform the entire way you're doing things," Vipul Tuli, a partner with McKinsey and an author of the report, said.

*Power blackouts have become a common feature of life in India* as rapid economic growth has led to the development of energy-hungry industries and meant more people are able to afford air conditioners and other appliances.

But the sector is one of the most complex areas of Indian infrastructure to reform, requiring not only regulatory changes but also political will from state and central governments to deal with issues ranging from clearing land for plants to negotiating with foreign countries to secure fuel supplies.

The report estimates that India will require about $600bn in investment over 10 years, or around half of present gross domestic product, much of which will have to come from the private sector.


----------



## Bushroda

*India: Soaked by Oil Subsidies*
*Its state-controlled companies are losing a lot of money, and private rivals can't compete* 

by Manjeet Kripalani 
Businessweek

You'd think Sarthak Behuria, chairman of Indian Oil, would be one of the world's happiest executives. His state-controlled company, with $59 billion in revenues, is India's largest refiner of oil into such products as gasoline and diesel, which are eagerly bought by increasingly affluent consumers and expansion-minded companies. Its 17,800 gas stations are ubiquitous on Indian roads. 

Yet Behuria, far from raking in the profits, is struggling to save his company from imminent bankruptcy. Indian Oil is running losses of $76 million a day, and will run through its line of credit of $21.4 billion by July. That's because the government has insisted that Indian Oil subsidize all the gasoline, diesel, and cooking oil it sells, so much so that prices are a third cheaper at the pump in India than they are in the U.S. Since the oil it purchases abroad is so much more expensive than what it sells at home, Indian Oil basically loses money every time it makes a sale. So do the two other state-controlled oil companies, Bharat Petroleum and Hindustan Petroleum. 

To defuse the crisis, the government of Prime Minister Manmohan Singh raised fuel prices an average of 13% on June 4. That will not be enough to rescue Indian Oil, but it has already kicked off a political storm. The country's Communists and opposition groups are calling for nationwide strikes to protest the price hikes. 

*Political Backbone?*

India's dilemma reflects one of the big distortions in the energy industry today: the widespread use of state subsidies to soften the blow for consumers in Venezuela, China, Taiwan, India, and beyond. The soaring costs of these subsidies are hammering government budgets in many emerging markets. Indonesia was so squeezed that it just reduced its subsidies drastically. Malaysia is doing the same. 

In India, the political courage to terminate the subsidies is lacking. The country faces a slew of elections coming up this yearfive in important states before Decemberas well as national elections in 2009. Remove subsidies? Unlikely. "It's a huge dilemma from the political management perspective," explains Subir Gokarn, Standard & Poor's chief economist for Asia-Pacific. (BusinessWeek and S&P are both part of The McGraw-Hill Companies (MHP).) 

Meanwhile, the Indian market has suffered tremendously from the unexpected consequences of subsidies. Private players like Essar Oil and Reliance Petroleum had begun a major rollout of gas stations. But as oil prices began to soar, their higher, unsubsidized prices proved uncompetitive with the subsidized prices of such state-owned players as Indian Oil and Bharat. Unable to compete, Reliance Petroleum has shut down all 1,400 of its new gas stations, while Essar Oil has shuttered half its 1,250 pumps. Multinational Royal Dutch Shell (RDSA) has closed 40 out of 50 stations. 

*A Circular Road*

Many executives at Indian corporations believe the subsidies are bad policy. "Removing subsidies will have a serious impact on the economy, but so will a large public deficit," says Venu Srinivasan, chairman of TVS Motor, a popular motorcycle maker. Yet even a small hike in fuel pricesparticularly in the diesel oil widely used by commercial truckswill push inflation higher. That would cut consumer spending and, of course, stoke voter wrath. 

Delhi may keep cutting subsidies cent-by-cent over the next year to mitigate the political fallout. But those cuts might prove too little for India's oil companies, and way too much for Indians accustomed to cheap fuel.


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## Bushroda

*Manufacturing success: India prepares its road map for the next growth route*
*Some in private sector push for SEZs and the Chinese model; govt leaders think leveraging productivity is the key*

Daniel Altman
International Herald Tribune

For a few years now, a facile dichotomy has made the rounds in economic circles: Among developing countries, China means manufacturing and India means services. Yet, several leaders of the public and private sector in India see the country&#8217;s road to riches leading through manufacturing as well.

For Anand Mahindra, vice-chairman of Mahindra Group, the Indian detour into services was a matter of happenstance more than design. While the Indian government made rule after rule about manufacturing in the waning years of the 20th century, it largely left information technology (IT) companies alone.


*Core constraints: The Nokia factory at 
Sriperumbudur in Tamil Nadu. 
India&#8217;s physical infrastructure has 
been running behind its potential to grow, 
but the government is hopeful it will catch 
up within a few years. 
(Photo: Madhu Kapparath/Mint)*

&#8220;There were no regulations to impede them, because no one knew what kind of animal the industry was,&#8221; Mahindra said from his office in Mumbai. &#8220;We did not have large investments in infrastructure. We did not have large investments in manufacturing. The growth came from the IT boom, the services boom and large gains in agriculture, and then, of course, consumption.&#8221;

His company, which made its name in automobile manufacturing, now has one of the biggest information technology businesses in India, he said. But, he still sees manufacturing as the priority: &#8220;The second phase of India&#8217;s growth is now being investment-led. That first wave clearly provoked more reforms, more liberalization. The rise of China has not been lost on us, obviously.&#8221;

This time, the government is singing the same tune. &#8220;For India, manufacturing sector gro-wth is very important,&#8221; Kamal Nath, the Union commerce minister, said in an interview in New Delhi. &#8220;We did 12&#37; growth last year; we&#8217;re doing about 8.5% growth this year.&#8221;

Each job in manufacturing, Nath said, has the potential to add several jobs in services. But, where will all those people work, and where will they live? In China, perhaps hundreds of millions of people have moved from rural homes to cities crammed with factories and dense housing. The same thing may need to happen in India if labour is to be concentrated enough for a manufacturing push.

India cannot grow the same way as China, though, even if it does pursue low-cost manufacturing just as avidly. India is a functioning democracy, where local governments do battle with New Delhi and small constituencies make their voices heard. The Central government cannot rule by fiat, and officials are loath to follow a path that has not been tested as a precedent.

That is why India needs easy-to-follow templates for growth, Mahindra said. To him, the right template is one borrowed from China: the special economic zone, or SEZ, a place where taxes are low, power grids are new, licensing is relaxed and labour is freely hired and fired.

&#8220;You have an enclave from which you can work and ignore all the baggage of the old India,&#8221; he said, like rigid labour laws and lousy infrastructure. &#8220;Is that ideal? No, obviously you would want a pan-Indian rule. But you have the template.&#8221;

Nath agreed that SEZs were important, but he denied that they were sufficient to drive growth. &#8220;It is one of our greatest flagship employment-generation programmes,&#8221; he said, creating more than 200,000 jobs directly and about 400,000 more indirectly since February 2006. &#8220;But, for those who are not exporting, who are for the domestic market, why should they go for the SEZs?&#8221;

Another concern is that SEZs may be too small for the hundreds of millions of workers who could drive the Indian manufacturing sector.

&#8220;Scale economies don&#8217;t arise,&#8221; said Atanu Dey, chief economist of Netcore Solutions, an information technology company started by Rajesh Jain, a well-known serial entrepreneur. India needs to plan new megacities, he said, with far more capacity than what they may need today.

Nath said India could still distinguish itself by leveraging productivity instead of masses of unskilled labour.

&#8220;India is emerging as a manufacturing hub, as an efficient technological manufacturing hub, not a mass-production hub,&#8221; he said. &#8220;Mass production does not necessarily mean that it&#8217;s employment-heavy. All manufacturing today has an information technology backup.&#8221;

That kind of manufacturing requires different types of infrastructure: transportation, energy and telecommunications, for starters. Nath said India&#8217;s physical infrastructure was running behind its potential to grow, but he expected it to catch up within a few years. Energy, however, could be a tougher nut to crack.

&#8220;That is the biggest constraint in India&#8217;s future,&#8221; Dey said. &#8220;India&#8217;s economic growth rate could stall. I don&#8217;t know if it can compete with China in securing those energy resources,&#8221; he said.


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## Bushroda

*Exclusive look at the Tata Nano* 
By Chris Morris 
BBC News, UK

*Video: Designing the Tata Nano*

*India is fast becoming the centre of a revolution in motoring.* 

A new generation of ultra-cheap cars is about to hit the streets, allowing millions of would-be drivers to dream of personal mobility for themselves and their families. 

"A totally new market is opening up - the way we are receiving comments and inquiries is quite mind-boggling," said Ravi Kant, the managing director of Tata Motors. 

International car manufacturers are also scrambling to establish a firm foothold in India, which is set to become the fastest growing car market in the world. 

The Tata Nano was unveiled with great patriotic fanfare in January. Its basic price - about $2,500 - is about half of its nearest current rival. 

The BBC travelled to the huge Tata Motors complex in the western city of Pune to get an exclusive look at the Nano in action, and to talk to the team which created the ultimate no-frills car, cutting costs part by part. 

Everything from the number of wheel nuts to the number of parts in the door handle was re-examined. 

"The body was redesigned three or four times, and the engine three times," said Girish Arun Wagh, the head of Tata's small car project. "Simplicity was the key." 

And that means that when the Nano goes on sale towards the end of this year it will be in a position to overturn the economics of motoring. 

"We believe that more than goods transportation it is people transportation that is going to see a massive change, and we are prepared to tap into this opportunity, " said Ravi Kant. 

But Tata won't have it all its own way. 

*Rival car* 

Another Indian company Bajaj Auto, which makes auto-rickshaws and motorbikes, has announced plans - in partnership with Renault and Nissan - to produce a direct competitor to the Nano by 2011. The starting price will be the same. 

"Whoever wants to do it at least has to manufacture it in India," said Rahul Bajaj, the company's chairman. 

"If Tata motors can make money I can make money. My costs are lower than Tata Motors. But if General Motors or Volkswagen tries, I don't think they can make money." 

But even if they won't compete at the very cheapest end of the market, that hasn't stopped a host of global car companies investing in new factories on the outskirts of cities like Pune and Madras (Chennai). 

Soon the region around Pune alone will make more cars than Britain. 

Many of them will be sold to India's eager domestic market. And there's plenty of room for expansion out in the countryside, where 70% of Indians still live. 

But India's cities are already suffering from congestion and pollution, and millions of new cars will only make matters worse. 

"You want to give mobility to all," said Anumita Roychowdhury of the Centre for Science and Environment. "And cars can never give mobility to all in Indian cities." 

"You just do not have the space in Indian cities where you can motorise and meet the needs of everyone. There's a big equity issue here." 

The response from the motor industry is robust. 

"I'm all for a clean environment," declared Rahul Bajaj. "But if you want a real clean environment, go back to the cave age." 

The rapid increase in demand for cars is closely linked to soaring economic growth, and Indians are understandably sensitive to suggestions that they shouldn't be able to enjoy freedoms people in the West take for granted. 

But that still leaves India grappling with a familiar challenge on a massive scale: How to meet the demand for private cars and personal mobility in a way that works. 

For a billion people, and counting.


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## Bushroda

*Nissan, Renault Begin Building Car Factory in India*
By Vipin V. Nair

June 6 (Bloomberg) -- Nissan Motor Co., Japan's third- largest automaker, and affiliate Renault SA began building a factory in India to challenge Suzuki Motor Corp.'s dominance in the country. 

The $1.1 billion factory will begin production in 2010 and will have a capacity to make 400,000 cars annually for local and export markets, the automakers said in a statement in Chennai in south India, where the plant's being built. Nissan will make the Micra model and other cars at the factory while Renault will produce cars based on the Logan and other platforms. 

Renault, with 2.2 percent of the local market, and Nissan have lagged behind rivals in expanding into India, where Suzuki has 50 percent of the market. Automakers including General Motors Corp., Ford Motor Co. and Volkswagen AG have already announced a combined $6 billion in investments in the country, where car sales may double by 2013. 

``Those who have a foot in the door now can capitalize on it later,'' said Ashutosh Goel, an analyst at Mumbai-based brokerage Edelweiss Capital Ltd. ``There's a large domestic market for compact cars, and the cost of manufacturing is also lower.'' 

India's automobile market will double to about 4 million vehicles, according to Global Insight Inc., an industry consultant. Expansion in the world's fastest-growing major economy after China helped local car sales to double in the past five years to reach a record 1.2 million units in the year ended March 31, according to the Society of Indian Automobile Manufacturers. 

*Significant Part *

Nissan and other automakers are expanding in India as demand slows in Japan and credit market turmoil and surging oil prices damp sales in the U.S. Building local factories, as opposed to imports, will enable Nissan and Renault to sell cheaper cars. 

``India is a significant part of Nissan's global expansion plan,'' Senior Vice President Colin Dodge said at the plant site. 

Chennai, formerly known as Madras, is already home to factories of Ford, Mitsubishi Motors Corp., Bayerische Motoren Werke AG and Hyundai Motor Co. 

Tokyo-based Nissan said last month it will introduce eight new models in India by 2012 as it aims to sell 100,000 vehicles a year in the country. The models will include an entry-level car powered with an engine between 1 liter and 1.2 liters and a light commercial vehicle. 

The company will move production of the Micra to India from a factory in the U.K., Nissan said June 3. 

*Renault's Presence* 

Renault already sells the Logan sedan in India with partner Mahindra & Mahindra Ltd. The joint venture sold 25,891 cars in the year ended March 31 with 2.2 percent of the market, according to the Indian automobile grouping. 

Nissan and Renault have also teamed up with Bajaj Auto Ltd., India's second-largest motorcycle maker, to sell a car in the country by 2011. Priced at about $2,500 it will take on Tata Motors Ltd.'s Nano, which goes on sale this year. 

Nissan has also formed a joint venture with Chennai, India- based Ashok Leyland Ltd., India's second-largest truck maker, to make commercial vehicles. They will invest about $575 million.


----------



## Bushroda

*Riding the earning horse: Indian Railways*
INSEAD Knowledge - Best of business research, France 

Indian Railways is the worlds largest employer and one of the biggest and busiest rail networks in the world, carrying some 17 million people and more than one million tonnes of freight daily. It was, however, until very recently, a loss-making organisation, which was heading for bankruptcy. *Starting his term in 2004 with a budget of just $200 million with which to save the national institution, Indias Minister of Railways Lalu Prasad engineered a dramatic turnaround. Last year, Indian Railways revenue came to $6 billion.*

Indian Railways is one of INSEADs biggest executive education clients, and the Minister visited the schools Asia campus as part of his tour of Singapore and Malaysia. During his visit to INSEAD, he told a gathering of MBA participants, alumni and executives about his strategy for bringing the rail network into the 21st century.

*Flouting prescriptions to privatise Indian Railways, retrench staff, and increase passenger and freight fares by 20 per cent in every budget, Prasad instead chose to keep on board 1.4 million employees and 1.1 million pensioners, reduced fares by up to 45 per cent, and - while refusing to privatise the core business of Indian Railways - started public-private partnerships in some peripheral areas. *

We have broken the myth that whenever any government organisation runs into losses that you privatise it and retrench the manpower  My belief is that if we have honesty, vision and commitment to the organisation, there is no possibility of any institution and corporation running into losses. 

Its a strategy based on volume. While output has increased threefold, real operating costs have fallen over the last 25 years. *By increasing the capacity of a typical long-distance train to 2000 passengers from 800, unit costs fell by 45 per cent.* The practice of taking seven days to load or unload a freight train was reduced to five, and systematic changes have helped to rein in corruption. *Garib rath trains, also known as the poor mans chariot, now have air-conditioning with cushioned seats and suction toilets.*

*Bringing down freight fares has greatly benefited local industry, Prasad says. In a country where agriculture is the backbone of the economy, he says there is a huge role for Indian Railways in helping farmers directly connect with markets for their goods.*

There are no markets in the places where production happens and middle men buy the agricultural produce at cheap prices. We are going to open agricultural centres at stations so farmers dont have to search for markets. Through joint ventures, we will set up cold storage and purchase points in stations, as well as freezer containers, so they can send agricultural produce around the country and beyond. We will charge farmers appropriate and reasonable prices. This will enrich farmers, and this increase in income will mean they can buy the things that everyone else is buying.

With regard to private investment, Prasad says the turnaround has piqued interest in investing in the railways. While the private sector can play a role  in building engines and wheels, and world-class stations, for example  Prasad insists there is absolutely no chance of allowing privatisation of the core business, rail, running of trains, [and] control of all the trains. Indian Railways surplus earnings mean that the organisation does not have to depend on overseas development assistance from bodies such as the Japan International Cooperation Agency to expand. JICA or no JICA - we are self-sufficient.

In an exclusive interview with INSEAD Knowledge, Prasad said freight trains are Indian Railways earning horse, and he has extensive plans for expanding freight lines, increasing their efficiency, and capturing the 60 per cent of goods that are still transported by road. *A third line  a dedicated freight corridor  is also being constructed to connect even the most remote areas with all ports and industrial hubs.* 

Prasad is also keen to help in Indias water conservation efforts, by building siphons and canals, and  on the wasteland on either side of the 64,000 kilometres of track  pipes with water for drinking and irrigation. He also outlined efforts to reduce fuel consumption by building train carriages from aluminium to reduce their weight. With the increasing price of fuel, we have to keep an alternative in mind. Therefore, we are going to electrify the main routes in the entire country. The (proposed civil) nuclear deal (with the US which would allow India to develop nuclear technology to meet its growing energy demands)  which should be reached  is also likely to help. 

With an eye to the future, Prasad says that as Indias population continues to grow, there will be a need for more trains, more engines and wheels. Even now, we buy wheels from abroad. We have only two factories, and are building a third. Its fine that these things come from abroad but we have the skills, unemployment, and youth. Prasad also recommends learning from another country with a magnanimous population  China. China has gotten really far ahead. We will have to learn from them  Instead of jealousy, we should see what our neighbour is doing and copy that.

Indian Railways turnaround had required a fundamental shift in mindset. As Prasads adviser, Sudhir Kumar, notes: We are not in the business of railways; we are in the business of transportation  one of several modes of transportation, and the only way to survive and thrive in the marketplace is to offer superior and compelling value to your customers.


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## Bushroda

*India's Innovation Attracts SAP* 
By Pankaj Maru 
CXOToday, Mumbai
Jun 5, 2008 

In January 2006, the out-going CEO of SAP, Henning Kagermann said, "India is slowly getting expensive. So, we've decided to hire a certain number there, and then start looking at other locations." He was quoted in the German edition of Financial Times. 

It's over 2 years now since this statement was made, and today we see a total shift in SAP's business strategy. 

India has made phenomenal progress, particularly with the IT companies propelling the overall economy toward constant growth. This growth is being realized by many big companies. And SAP India is no exception. 

For SAP India, this progress was attractive enough and in the ongoing SAP Summit 08, the company has revealed its investment plans for India. By 2010, the company plans to invest around USD 1 billion through SAP Ventures. 

While referring to Kagermann's statement about Indian offshore development market getting expensive, Bill McDermott, president and CEO of SAP (Americas and Asia Pacific Japan) commented, "India is an attractive and expanding market and it's growing continuously." 

McDermott added, "We'll invest in IT sector, particularly enterprises and emerging companies. At present, we're looking at a dozen investments, and within next 2-3 months we'll close 3 investment deals." 

Ranjan Das, CEO and president of SAP India, stated, "SAP hasn't come to India to find cheap offshore development services. Instead, it has come for innovation and India offers that." 

SAP Ventures started its operations in 1997 and over the past 12 years it has been investing in IT companies in the US and Europe. Presently, it has invested in 38 companies globally. Red Hat, Virsa, and MySQL are some of the US companies it has invested in. 

However, this is the first time, SAP Ventures plans for direct investments in India. This is expected to boost emerging companies working in the field of innovation and technology. The investment size would be about USD 4-5 million and could go up to USD 8-10 million.


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## Bushroda

*India Sews Victoria's Secret Thongs for Singh's Blooming Zones* 
By Cherian Thomas

June 6 (Bloomberg) -- When Boston Red Sox co-owner Martin Trust first visited the southern Indian village of Achyutapuram three years ago, a pot-holed road ran through the stretch of bare land dotted with thatched huts. 

That didn't deter Trust from investing $12 million in a special economic zone being created there by Brandix Lanka Ltd., which makes lingerie for Victoria's Secret. His bet may now be paying off as workers finish constructing roads, a power plant and helipad, and companies including Quantum Clothing Group, a U.K. supplier to Marks & Spencer Group Plc, sign up to build factories in the 1,000-acre industrial site. 

The change is startling,'' said Trust, 73, who is also founder and president of Brandot International Ltd., a Salem, New Hampshire, investment firm with stakes in 18 textile and apparel companies in seven countries including China, Israel and Mexico. It's an inviting place for any investor.'' 

India's economic zones are finally taking root after more than four decades, laying the foundation for Prime Minister Manmohan Singh's plan to increase manufacturing to a quarter of the economy by 2012 from 17 percent now. That's vital for a nation that needs to find jobs for the 150 million people who will join its workforce in the next 10 years. 

There is real momentum'' behind the zones, said Alastair Newton, senior political analyst at Lehman Brothers International in London. Governments, both at the central and state level, realize they have the potential to create good, long-term employment.'' 

*Reducing Red Tape* 

Special economic zones are enclaves with uninterrupted power, water and other infrastructure support for manufacturers. The zones reduce red tape by offering a single window for environmental, tax and other government clearances. Companies in India's sites, as well as their developers, also get tax breaks for as long as 15 years. 

The zones are designed to make India more attractive for investors concerned about putting money into a nation that lacks water for industry and produces 10 percent less electricity than it needs. 

The incentives lured Chicago-based Boeing Co., which is building a $100 million aircraft-maintenance unit in the central Indian town of Nagpur, said Dinesh Keskar, a senior vice president at the world's second-largest commercial jet maker. 

The economic zone we are investing in has its own power station,'' he said. That's important for Boeing because you can't have our shop closed for a day.'' 

*Shifting Strategies* 

India was one of the first nations to set up a special economic zone, in 1965. It established another seven by the end of the decade before shifting to other strategies to spur exports, including industry-specific tax incentives, said Lalit Behari Singhal, director general of the Export Promotion Council of Export Oriented Units and Special Economic Zones. 

Meanwhile neighboring China, under former leader Deng Xiaoping, adopted the strategy in the early 1980s to stimulate` manufacturing. Shenzhen, the most successful Chinese zone, was a small fishing village 20 years ago. Today, it is home to more than 10 million people and some of China's largest companies, including Huawei Technologies Co., the nation's biggest maker of telephone-network equipment. 

The world's fastest-growing major economy now has seven economic zones and another 100 smaller state and high-tech industrial zones, which account for about 12 percent of gross domestic product. 

*`Manufacturing Boom'* 

The most conspicuous difference between growth in China and India is the absence of a manufacturing boom,'' said Mark Williams, Asia economist at Capital Economics Ltd. in London. Foreign direct investment in India has been less than a quarter of the $400 billion that has poured into China since 2002, keeping Indian manufacturing at half China's level as a proportion of GDP. 

To emulate China's success, India's then-commerce minister, Murasoli Maran, announced a policy in April 2000 to set up new zones. The fresh start wasn't without problems. The government was forced to suspend its plan in December 2006 after farmers protested what they considered the cheap prices paid to acquire of their land. Clashes in March 2007 left 14 dead in West Bengal state. 

The government restarted the program in April 2007 after prescribing a ceiling on size -- 5,000 hectares (12,355 acres) -- and forbidding state administrations to take land by force. 

*Farmer Resistance* 

While farmer resistance continues in some states, including West Bengal, Haryana and Goa, India now has 42 zones, including the original eight, creating an estimated 176,000 jobs in the past two years, the Commerce Ministry says. 

Another 229 zones are under construction and an additional 210 proposals await final government approval, according to the ministry, which forecasts the zones will attract $75 billion in investment by 2013 -- almost a third of India's industry. 

To convince local villagers that it's serious about creating employment in Achyutapuram, Sri Lanka-based Brandix set up a trial factory close to its zone that currently employs about 1,500 local women. Ladies who never had proper clothes are today making thongs for Victoria's Secret,'' said Reshan Wickramasinha, chief executive officer at Brandix India Apparel City Ltd. 

Kanak Mahalaxmi, 19, says her life has changed dramatically'' since she got a job as a sewing operator a year ago. We just finished building a brick house after living in a thatched one all our lives,'' said Mahalaxmi, who earns 2,500 rupees ($59) a month. We just bought our first television set as well.'' 

*$1 Billion Investment *

Brandix will set up another apparel factory in its zone and rent space to 19 other manufacturers, with investment reaching $1 billion in five years from $50 million currently and employment totaling 60,000, Wickramasinha said. 

Achyutapuram is the first economic zone Brandot has invested in, Trust said. Its other ventures are textile and apparel factories. 

This is more of a real-estate issue; our success will depend on attracting highly valuable clients and making sure our pricing is highly competitive,'' he said, adding that Brandot has a 26 percent stake in the project. If by the end of the tenth year, we are reaching an annual return of 10 percent, then we are doing fine and we can build on that.'' 

About 260 kilometers (161 miles) north, in the coastal town of Gopalpur, Tata Steel Ltd., India's largest steelmaker, is building a zone that will act as a catalyst for growth'' in the state of Orissa, one of the poorest provinces in India, said Bhagabata Patro, an economist at Orissa's Berhampur University. 

The economic zones provide the basis for factories to flourish,'' he said. There's no doubt it's an important part of India's strategy to create employment at the monumental scale that the country requires.''


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## Bushroda

*India's strong fundamentals support 'Baa3/Ba2' ratings - Moody's*
Thomson Financial News
05.14.08, 1:40 AM ET

MUMBAI (Thomson Financial) - Moody's Investors Service said India's strong fundamentals, a private-sector induced upturn in savings and investment and a rising rate of potential growth support its foreign currency sovereign bond rating of 'Baa3' and local currency bond rating of 'Ba2'.

The ratings agency said in a report the Indian economy's external fundamentals are strong enough to withstand a range of potential shocks, including sudden reversals in short-term capital flows, a sharp slowdown in global growth and weak government finances, or a slowing in structural reforms because of a fractious political landscape.

'The government's local currency bond rating of 'Ba2' balances a high level of indebtedness with a favourable debt structure,' Moody's (nyse: MCO - news - people ) said.

'At the same time, concerns about the size and servicing burden of government debt is somewhat mitigated by the latter's high local currency content, long tenor, growing domestic savings and a stable creditor base dominated by domestic institutions,' Moody's added.

The report noted the Indian government's 'Baa3' rating reflects India's low external debt and strong external payments capacity. But Moody's said weak government finances, though improving, are still a constraint on India's physical, financial and social infrastructure.

Moody's said the stable outlook on the foreign and local currency government ratings reflects its view that along with a large and well-diversified economy, a reasonably adequate policy framework should help to contain several near-term macroeconomic challenges.

Moody's said the main challenges include maintaining monetary stability amid food and fuel price pressures, large capital inflows and various supply-side rigidities, containing fiscal reversals in the run-up to elections, managing fiscal consequences after the implementation of a retroactive 40 percent rise in civil servants' pay and ensuring more 'inclusive growth' that raises incomes in the poorer and the slower-growing farm sector in a sustainable, prudent fashion.


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## Flintlock

*Mega expansion plan for higher education in 11th Plan*


Basant Kumar Mohanty
New Delhi, Jun 8 (PTI) Mega expansion of the education sector is in the offing with moves to establish 30 universities, including some with world-class standards, and enhance the infrastructure of existing institutions during the 11th Plan.

The action plan prepared by the University Grants Commission envisages to increase the gross enrolment ratio (GER), the percentage of youths in the age group of 18-23 in higher education, from 10 per cent now to 15 per cent by 2012.

"To achieve 15 per cent GER by 2012, we have to increase the facilities accordingly. Apart from the 30 new universities, there is plan to set up 370 colleges in districts where the GER is lower than the all India average," UGC chairman Prof Sukhadeo Thorat told PTI.

For the proposed 16 Central universities, concept paper and draft bill has been ready, he said. Similarly for the 14 world class universities, a committee has been set up to prepare concept paper and the draft bill.

Detailed project reports for the proposed 370 colleges are in the final stage. Special development grants will be provided to these institutions, he said.

The UGC has earmarked Rs 870 crore for expanding the infrastructure in the existing over 20 Central universities for implementing 27 per cent OBC quota, which has been given the go-ahead by the Supreme Court.

This initiate assumes significance in view of the Knowledge Commission saying that there is a need to set up 1500 universities to make India a knowledge society. PTI


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## Flintlock

*
Indias GDP growth may dip to 7%: World Bank
*
Special Correspondent


NEW DELHI: The World Bank has projected Indias GDP (gross domestic product) growth to slow further to seven per cent in 2008 on account of the tight monetary policy in place as a measure to rein in inflation leading to a consequent slowdown in demand for industrial goods.

In its report on Global Development Finance released on Tuesday, the World Bank said: GDP growth in India eased to a still strong 8.7 per cent in 2007, from 9.7 per cent in 2006, and is projected to slow further to 7 per cent in 2008. The Bank attributed the moderation in the countrys economic growth to the monetary tightening in 2007 [that] led to softening in domestic demand.

The report pointed out that although the restrictive monetary policy measures prevented a further surge in the inflationary spiral, the resultant strengthening of the rupee proved detrimental to the exporting community. With the countrys industrial production decelerating to three per cent in April this year, the report noted that there were growing signs of the economy cooling down. However, thanks mainly to the large remittance flows and robust growth in wage rates, the industrial slowdown has not led to a fall in the rate of consumption, it said.

Alongside, the report noted that owing to an overall slowdown affecting most economies, the global GDP growth is projected to slide from 3.7 per cent in 2007 to 2.7 per cent in 2008.
Surge in food prices

Aggravating the situation was the worldwide surge in food prices in 2008 and there was a sharp reduction in purchasing power of the poor, owing to the increasing gap between wages and food prices. However, the report pointed to the export restrictions imposed by countries such as India, China and Vietnam as the major reason for the soaring global prices of food commodities.

Among other factors, rice producers such as China, India and Vietnam have introduced export restrictions to keep stocks for domestic use and to prevent sharp domestic price increases; these policies have contributed to the increase in international grain prices, the Bank said, while noting that India is self-sufficient, but grain stocks are low and crop production has been on the decline.

The report pointed out that soaring food prices had become a serious concern in South Asia by early 2008, mainly because food insecurity in the region was relatively high and the rural population have to spend over 50 per cent of their total income on food. It noted that the rapidly rising gap between food prices and wages indicated a sharp reduction in the purchasing power of the poor and the situation had become increasingly acute across the region, especially in Bangladesh and Afghanistan.

Referring to the global turmoil in financial markets, the Bank noted that the turbulence had adversely affected the Indian stock market as well.

The turmoil in international financial markets...has affected the region primarily through fallouts and weakness in equity market. The latter has been most pronounced in India, particularly during the first quarter, the report said.

The Hindu : National : India&#8217;s GDP growth may dip to 7%: World Bank


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## Flintlock

*'India biggest hoarder, food crisis to worsen'
*
Aziz Haniffa in Washington, DC | June 11, 2008 | 12:18 IST

The food crisis will worsen following India's ban on rice exports, says Swaminathan S Aiyar, noted economist and longtime World Bank consultant, who is currently a Research Fellow at the Cato Institute in Washington for India and Asia. He said the rice export ban shows India "is the biggest hoarder."

Aiyar, who was the lead panelist on a discussion of trade and security at a Heritage Foundation-FICCI sponsored conference on US-India Synergy: Facing the Economic Challenges of the 21st Century, said, "The government of India wants to crack down on hoarders, but the biggest hoarder actually is India by refusing the rice to be exported."

Arguing that the current food shortage was directly the result of export curbs, he noted that the International Food Policy Research Institute "has estimated that a relaxation of trade curbs can cut world (food) prices by 30 percent and in the case of rice, it would cut world prices by more than 50 percent."

"The problem is not a shortage of rice; it's that wherever the rice is being produced, to protect the domestic consumer, it is not being allowed to be exported and therefore you are artificially shrinking the grain in the world market and artificially pushing up prices."

Aiyar said that the IFPRI "has rightly called this 'starve your neighbor' policy,' and argued that India by imposing these export controls had effectively cut the production of rice.

"India used to produce almost one-fifth to one-sixth of the total rice trade - it exported 5.5 million tons of rice in 2007," he said, but said that this year it would only be exporting 1-2 million tons. "So three million tons are off the market from India alone and it's like one-tenth of the world trade (in rice) has disappeared just because of India's action."

Aiyar said by doing so, India had "managed to keep our rice prices only up 10 percent, (but) in neighboring Bangladesh, it is up 60 percent. So, this is what you call, 'Starve your neighbor policies."

He asserted, "The world needs to get together and say, 'Look, there is panic going on here- panic, when one country bans it, another country bans it, and the result is the prices are going up far more than required."

Aiyar said, "We really do need a world meeting of the rice exporters to say, how do we provide another extra two million or three million tons to the world market. How do we apportion this extra rice quota to each country. I think just an announcement that you can do that, would bring prices of rice down by $200-300 a ton."

Aiyar said he is convinced that the food crisis would soon blow over "and we are going to be back very soon to the issues of over-production through subsidies - which was what the Doha Round was about. The whole point of the Doha Round was there is too much production because of excessive subsidies. I do believe that the current phase is a highly temporary one."

"For those who are not familiar with India," he explained, "when we had the sharp increase in domestic prices in the late 1990s, farmers responded and we got a mountain of food- at one point India alone had food stocks of 65 million tons in 2000 and at great loss we exported all this."

But Shenggen Fan, division director, Development Strategy and Governance, said that the protectionism by India by curbing exports may have been what had helped the kind of food riots seen in some other Asian countries.

He recalled that just a few years ago, food prices in India were about 20-30 percent higher than global food prices, but "today, it is opposite. The domestic (food) price in India is actually about 20-30 percent lower than the global prices."

"The Indian government used trade restrictions and so, that is why in India you have not heard of any food riots and lots of complaints," he added.

'India biggest hoarder, food crisis to worsen'


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## shrivatsa

Government protecting its people ,it seems that these guy wants food prices in india to go up


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## Bushroda

Stealth Assassin said:


> *
> Indias GDP growth may dip to 7%: World Bank
> *
> Special Correspondent
> 
> The Hindu : National : Indias GDP growth may dip to 7%: World Bank



Take a break.. party is not yet over.


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## Bushroda

*3 Indian cities in world's top centres of commerce*
Monday , June 09, 2008 at 06:29:06

New Delhi, June 9: Reflecting the growing global economic clout of the Asian region, three Indian cities -- Mumbai, New Delhi and Bangalore have been ranked among the 75 top centres of commerce in the world. 

According to a study titled 'Mastercard Worldwide Centres of Commerce Index', London has been ranked as the most influential city in the world in the 75 cities index. 

However, it stated that future appears to belong to Asia and Eastern Europe, whose cities represent the fastest rising regions within the index. 

The index is an annual research initiative designed to evaluate and rank how major cities compare in performing critical functions that connect markets and commerce around the world. 

"The booming Chinese and Indian economies have clearly continued the shift of economic power to Asia. The strong presence of Asia/Pacific, Middle East and Africa cities is further evidence of the growing influence of the region not just in manufacturing and services, but also in broadly based commercial strength," the report stated. 

In 2008, three Indian cities have been ranked in the index of 75 cities with *Mumbai at the 48th position, New Delhi at 61 and Bangalore at 66th place, the report revealed. *

*New Delhi and Bangalore are new additions to the index in 2008 which was extended from 50 cities in 2007 to 75 cities in 2008, while Mumbai, which had been ranked at the 45th place in 2007, has fallen three positions in 2008.* 

*In comparison, China has five cities in the index including Shanghai, a rapidly growing and massive city that ranks 24th this year, up from 32 in the 2007.* 

"It's fascinating to note that the city whose score increased the most compared with London since last year is Moscow, followed by Singapore, Tel Aviv and Bogota all cities in new or emerging markets while no North American city advanced significantly in the index this year," MasterCard Worldwide Centers of Commerce Program Director Michael Goldberg said. 

Besides, the top ten cities in the Worldwide Centres of Commerce include -- London, New York, Tokyo, Singapore, Chicago, Hong Kong, Paris, Frankfurt, Seoul and Amsterdam. 

The eight Asian cities which have been ranked in the top 25 centers of commerce, Tokyo, Singapore, Seoul, Sydney, Hong Kong, Osaka, Taipei and Shanghai rank among the top 25 Centers of Commerce, confirming Asia's prominent role in the global economy. 

The various dimensions on which the cities are ranked include -- legal and political framework, economic stability, ease of doing business, financial flow, business center, knowledge creation and information flow and livability.


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## Bushroda

*Pathak bides his time for practice in India*
Chris Merritt, Legal affairs editor 
The Australian
_June 13, 2008_ 

*IN India, where connections count, Freehills partner Neil Pathak has a surname that any lawyer would envy.*


*Neil Pathak, an Australian citizen from an *
*Indian family, who can't pratice in India. *
*Picture: Michael Potter*

His uncle, R.S. Pathak, was chief justice of India's Supreme Court in the 1980s until he resigned to join the bench of the International Court of Justice. 

His grandfather, G.S. Pathak, was a judge of the High Court of Allahabad and later became governor of the state of Mysore, federal minister for legal affairs and, in the early 1970s, vice-president of India. 

"It was a previous generation. It was a few years back," says the self-effacing Melbourne lawyer, although he did concede that the family name still opened doors whenever he visited India. 

With India's economic awakening, those trips are becoming more frequent. 

Pathak, who is co-head of Freehills' India practice, says there is so much legal work linked to India that he needs to visit the country two or three times a year. "The growth has been amazing," he says. 

The legal work associated with helping Australian companies to invest in India is growing rapidly, he says. 

In the past few years, though, more of the work of the firm's India practice has been generated by Indian clients investing in Australia. 

A number of Indian corporations, including a division of the giant Tata group, have included Freehills as one of their legal advisers. 

That link has given the firm access to transactions that extend beyond Australia. 

Last year, Freehills did the legal work when Tata Power Company paid $US1.1 billion for 30 per cent of Indonesia's PT Bumi Resources, a major coal producer. This transaction was later nominated by the India Business Law Journal as the merger and acquisition deal of the year. 

India's awakening has provided a strong flow of work, but the country's protectionist approach to legal services has prevented the latest member of the Pathak family from practising law there. 

Like all foreign lawyers, Pathak is affected by restrictions designed to protect India's lawyers from competition. 

Despite his heritage, Pathak's legal career is a product of Australia. He arrived in this country at the age of one, grew up here, qualified as a lawyer here and - apart from four years working for big firms in London - has built his career here. 

He says the ban has not yet affected Freehills' ability to do business with Indian clients but he worries that might change once India's relatively small firms develop the expertise to advise on major international transactions. 

"At this stage, it has not really affected us," he says. 

"You cannot practise domestic law, but a lot of transactions are in English, or New York law, and all law firms around the world do work on a fly-in, fly-out basis," he said. 

Those restrictions are strongly supported by the organisational wing of India's legal profession. Last month, Indian International Bar Association (IIBA) president Lalit Bhasin warned of the threat posed by foreign lawyers. 

According to Business Wire India, a news agency, Bhasin told a conference in New Delhi that India's legal profession "has a unique harmony based on a well-developed ethos, culture, tradition and a very noble heritage". 

"All these things are now threatened by a potential influx of foreign lawyers. 

"These are likely to alter the profession at its roots and create a much more commercial, even mercenary, approach to the business of law in India. 

"The finer, noble values of the profession in India will undoubtedly be compromised and diluted," Bhasin said. 

That might be the view of the profession's organisational wing, but India's leading firms and national government appear to see things differently. 

Commerce Minister Kamal Nath wants to include trade in services - such as legal services - in the proposed free trade agreement with Australia. 

Separately, India's Justice Ministry has a case before the Mumbai High Court in which it is seeking to "clarify" the ban on foreign lawyers. The ministry wants the court to rule that foreign lawyers can provide legal advice, consultancy and document drafting in India on matters relating to US or British law. 

One of India's leading firms, Amarchand Mangaldas, sees the impact of foreign firms more favourably than the IIBA. 

Amarchand managing partner Shardul Shroff told last month's conference in New Delhi: "there is already a great deal of mutual understanding with our foreign counterparts, which has always been mutually fulfilling".

Amarchand is developing a reputation in Australia as one of India's go-to firms. It is one of the two practices that Middletons uses for Indian domestic legal work. 

Amarchand alumni form a big part of Pathak's team. Senior associate Prashanth Sabeshan was a junior partner at Amarchand in Mumbai, who moved to Australia "to broaden his experience", Pathak says. 

Sabeshan works alongside solicitors Karthik Kumar, who also came from Amarchand in Mumbai, and Rohit Kumar, who was formerly at New Delhi firm J.Sagar Associates. 

The India desk consists of two partners - Pathak in Melbourne and John Nestel in Sydney - and three solicitors who have all practised in India. 

This relatively large investment in the India desk is more than justified by the rapid growth in two-way trade with India, Pathak says. Freehills nominates India as Australia's fastest growing major export market for goods and services. 

"The Indian economy is a giant that's just awakening," he says. "The need for resources will lead to more Indian companies coming here, looking for coal and other assets." 

China is currently the world's hot spot for legal services, Pathak says, but large numbers of leading Australian companies are seeking advice from his firm on doing business in India. 

Despite the attractions of doing business in China, Pathak says there is far more "common ground" between Australia and India. "There is greater cultural affinity - and it goes beyond cricket. We have similar legal and political systems." 

For the time being, Pathak says, Freehills is content to simply "get on with business". 

"I don't expect something like the free trade agreement to happen overnight, but there may come a time when we would be keen for liberalisation to happen," he says.


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## Bushroda

*Passages from India*
*The Times of India, the world's largest circulation newspaper group, has made its first foray into overseas markets. Will its recent purchase of Virgin Radio be its last?*
Randeep Ramesh in Delhi 
The Guardian, 
Monday June 9 2008 

When the Times of India broke the story that it had bought Virgin Radio for £53m last weekend, it marked the first foreign takeover by an Indian media company. The paper's headline read: "Voice of India will now be heard all over London."

The world's largest-circulation newspaper was founded to support the Raj's interest in western India 170 years ago, and the old lady of Boribunder has revelled in the role of reverse colonialist.

Bennett Coleman, India's biggest media company and proprietors of the Times of India, will now own one of Britain's three commercial radio licences and serve 2.7 million listeners and another 600,000 unique users through its website. The Virgin name will disappear, because Virgin Radio in India is a partner with a rival of Times of India's radio stations.

The rise and fall of Virgin Radio, bought in 2000 for £225m by Scottish Media Group and sold for less than a quarter of that sum, could be seen as a sign of things to come. Thanks to the internet, the traditional western media business model - selling news and entertainment to audiences, and then selling audiences to advertisers - is falling apart, just as the current economic slowdown is making things worse. 

*Cherry-pick assets*

All this comes at a time when media companies in the developing world, where internet penetration is low, are seeing bottom lines bulge as their audiences grow.

India is now the second largest newspaper market in the world with 99m copies sold daily - and newspaper sales grew by 11% last year. Not only "dead tree" media benefit from the rising tide of literacy and wealth. According to PricewaterhouseCoopers, TV and radio advertising in the country will grow by more than 20% for the next five years.

Sitting on top of this mountain of cash in India is Bennett Coleman, a family-owned company where the proprietors like profiles to be kept low and profits to be kept high. The group sells more than 6m newspapers a day - a figure that includes local language editions and the country's biggest business paper, the salmon-pink Economic Times. It has two television channels - including a rolling news network backed by £10m from Reuters. Times Group also owns 32 radio stations in India, a string of profitable websites, a PR company and an outdoor advertising company, which Goldman Sachs and Lehman brothers together paid $25m each for a 8% stake.

Indicating Bennett Coleman's global ambitions, its managing director, 41-year-old Vineet Jain, said last week it would "aggressively [grow] in India and cherry-pick assets and brands around the world".

Ravi Dhariwal, Bennett Coleman's chief executive, says he is an admirer of "the Financial Times and the Economist". "American newspapers have not innovated," he adds. "That is why they are losing readers. They just get heavier and lose relevance with younger people. The quality market in England is still healthy but newspapers have to be good value, a low price. You know the FT is a couple of bucks." When asked if Times Group might consider buying the Financial Times, he says he will say "nothing more".

Bennett Coleman's dominance can be attributed to one man: 53-year-old Samir, the vice chairman and Vineet's elder brother. Low-key and unassuming, Samir rarely gives interviews to the mainstream media. The Jain family are Marwaris, a community known for their business sense and spirituality. Samir and Vineet's mother Induja chairs the group. When Forbes magazine listed the family matriarch on its 2006 list of the wealthy as the 15th richest person in India, she sued the magazine on grounds of privacy. 

Samir Jain is a vegetarian who doesn't drink or smoke, and a fitness fanatic who has no interest in politics or Bollywood, often slipping out of newspaper parties unnoticed. 

Plucked from running the family's ailing jute division, he considers news a business. In the early 90s, Samir Jain began to market the Times aggressively, first by cutting the cover price and then once circulation ballooned by sharply raising advertising rates. He shut down venerable but unprofitable magazines, and introduced new supplements filled with celebrity gossip. Samir had little time for journalistic egos. The editor of the newspaper, once a grand figure, is now virtually anonymous.

While critics accused the Jains of "dumbing down" content, readers flocked to the new paper. The Times' circulation has shot past 2.5m, up from half a million a couple of decades ago. In the latest year for which figures are available, ending March 2007, Bennett Coleman's profit before tax was 6.45bn rupees (£80m) on revenues of 28.5bn rupees.

*Product placement*

"Times Group spent a lot of time building brands that capture the attention of the young reader. That's important when half the population is under 25," says Vanita Kohli-Khandekar, author of The Indian Media Business.

In its glossy supplements the paper's editorial space is sold to advertisers, leaving it unclear to an unfamiliar reader whether the content is paid-for advertorial or not. Bennett Coleman says there are no ethical issues as it is not "news editorial space" that is being filled. "It is not marked as an advert but it is clearly an advertising supplement only for lifestyle coverage," says chief executive Dhariwal.

In 2004, the paper took a step further when it began accepting payments for advertisements in the form of shares in the advertiser's firm. It now has 120 such "private treaties", which lock out rivals from seeking ad revenue.

The firm's executives insist that neither its own shareholdings nor its advertisers influence its coverage. But articles in Times publications rarely reveal the paper's shareholding interests. This practice, say critics, is a conflict of interest.

"With the price wars, papers are cheap. The Times of India, for example, costs just 2.50 rupees. So you are heavily dependent upon advertisers," says Pradyuman Maheshwari, a journalist who started a media blog but shut it down after receiving legal notices from Bennett Coleman.

However, Times executives dismiss such talk as motivated by "envy". Dariwal says that "editorial works hand in hand with the advertising department to understand readers. We have stakes in companies because we have a fundamental belief in India's success. The idea we would not write something because we owned a slice of a company is nonsense. As shareholders we would want to know if something is wrong and would encourage reporters to write about it."

About this articleClose This article appeared in the Guardian on Monday June 09 2008 on p6 of the News & features section. It was last updated at 16:00 on June 09 2008.


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## shrivatsa

domain-b.com : Reliance to sell gas in India at an 80-per cent discount to global prices

Reliance to sell gas in India at an 80-per cent discount to global prices news 
12 June 2008


Mumbai: Reliance Industries Ltd will start selling natural gas in the country this year at $25.20 per barrel equivalent of oil - an 80-per cent discount to global prices of over $135 - helping the country reduce imports at record prices.

The Krishna-Godaveri basin gas field will produce 80 million cubic metres of gas a day, saving the country over Rs1,14,000 crore ($27 billion) in annual import bill, chairman Mukesh Ambani told shareholders today.

Reliance will also commission a transmission system for natural gas from the KG basin, off the eastern coast. The soaring cost of exploration and a cap on gas prices may, however, cut Reliance's profit margins.

The government has ordered Reliance to sell natural gas from the KG field for $4.2 per million British thermal units, less than the $4.5 it had sought.

Reliance aims to produce 240-350 million cubic feet of gas a day from the MA-1 field from the second half of the 2008-09 fiscal year, when gas production from two other fields in the block, D1 and D3, will also begin.

Reliance Gas Transportation Infrastructure Limited is setting up an East-West gas pipeline system to connect the country's cities for distribution of gas from the KG basin. 

Reliance Industries, which is investing $5.2 billion to develop the KG basin oil and gas fields, the nation's largest, expects to more than double gas output in the country.

Reliance is also aiming to start oil production from its D-6 block in the KG basin in July-August, by the time it commissions its second refinery in Jamnagar, Gujarat.

Commissioning of the 580,000-barrel-a-day refinery will increase Reliance's crude processing capacity to 1.24 million barrels per day, equivalent to about 2 per cent of global capacity, Ambani said.

The new refinery is being built adjacent to Reliance's 660,000-barrel-a-day plant at Jamnagar and the combined facility will be the world's biggest.

Reliance would produce sweet oil with an API density of 43 degrees from two or three wells to meet initial targeted output of 20,000 bpd and has already started inviting bids for sale of the crude.
The country currently imports 70 per cent of its crude oil requirements and doesn't produce enough gas to meet local demand.

Reliance, meanwhile, reported over Rs15,000 crore in net profit for the year-ended March 2008.

Reliance, which enjoys a global market share of seven per cent in the polyester fibre and yarn business, plans to further consolidate its global leadership in polyester with the new 2.5 million tonnes per year Paraxylene manufacturing facility at Jamnagar.


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## Bushroda

*Now is the time to invest in India, says manager*
By Danielle Levy 
City Wire, UK
13 June 2008

Bhupinder Sethi, manager of the newly launched New Star India Equity fund, believes rising inflation in India will moderate over time and stresses that the region offers investors a multi-decade opportunity.

Indian inflation has just hit a seven year high, but Sethi says the investment case remains powerful. 

The global economic landscape is here to stay and will play out over the next five to 10 years. The key is to put money where growth is. In Asia India is the fastest growing economy, he says. 'The changes coming through in the economy mean there is a strong case to invest.

With an election on the cards, Sethi says it is likely that there is a possibility that the current government and a potential new government could sacrifice some GDP growth to contain inflation. However, he says that any falls in the market as a result should be seen more as a minor blip. Pointing to falling valuations, he stresses that now remains a good time for investors to enter the market for medium to long-term gains.

Sethi works for Tata Asset Management Mauritius, part of India's giant Tata Group, which has partnered with New Star Asset Management in a joint venture and is named as the investment manager on the fund. 

Lead manager Sethi believes Indian growth has been driven by changes in the developed world and believes the opportunities created by this change will lead to long-term benefits for the country.

Sethi pinpoints infrastructure as a key theme and believes the sector stands to benefit from an increase in public-private partnerships. In particular, he highlights the strain that Indias airports have come under as air travel has grown significantly on the back of increased budget airline flights into the region. He is positive on the governments decision to privatise airports and, more generally, the increased involvement of the private sector in infrastructure projects.

He describes what he sees as a healthy cycle, as increased infrastructure spending leads to economic progress which in turn leads to further infrastructure spending. 

He is also positive on the domestic consumer, particularly as the workforce grows. He believes that Indias 10% consumer credit/GDP ratio in comparison to Malaysias 59% and Koreas 41% represents huge opportunities in terms of consumption.

Sethi says the increased uptake of consumer loans by the younger population is a theme he intends to play, particularly as he sees financial services as under-penetrated.

Sethi and his team will use a GARP investment approach which provides specialist quantitative analysis of the market situation to reduce the investment universe of 5,000 companies to 400 companies. They then seek to sniff out companies which are fundamentally strong and undervalued. 

He uses India-based private bank Axis Bank and construction and engineering firm Larsen & Toubro as examples of the type of companies they are looking to invest in.


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## Bushroda

*India Inflation at 8.75%; Fastest Pace in Seven Years*
By Kartik Goyal

June 13 (Bloomberg) -- India's inflation accelerated to a seven-year high on soaring commodities and energy prices, stoking speculation the central bank will increase interest rates next month. 

Wholesale prices jumped 8.75 percent in the week to May 31, after gaining 8.24 percent in the previous week, the government said in a statement in New Delhi today. Economists surveyed by Bloomberg News predicted an 8.28 percent increase. 

The Reserve Bank of India raised the benchmark rate to 8 percent this week, joining central banks in Brazil, China and Russia in increasing borrowing costs to combat inflation even as economic growth slows. Jet Airways (India) Ltd., the nation's largest domestic carrier, and JSW Steel Ltd. said near-record oil prices and other costs are hurting profits. 

``Our profit margins have narrowed by as much as 10 percent in the past three months due to the relentless rise in input costs,'' said Sajjan Jindal, vice chairman and managing director of JSW Steel, India's third-biggest producer of the metal. ``Inflation is the biggest danger to the economy.'' 

India's central bank on June 4 raised its repurchase rate to a six-year high of 8 percent from 7.75 percent, after twice increasing its cash reserve ratio in April to contain inflation. 

Bonds fell as faster inflation spurred speculation the central bank will raise borrowing costs next month for a second time this year. The yield on the benchmark 8.24 percent note has increased 14 basis points this week. Governor Yaga Venugopal Reddy and his colleagues are due to meet on July 29. 

*Repurchase Rate* 

``We expect the Reserve Bank to raise the repurchase rate by a further 25 basis points in the next policy meeting,'' said Tushar Poddar, an economist at Goldman Sachs Group Inc. in Mumbai. ``We also expect a further 50 basis points increase in the cash reserve ratio in the remaining of 2008.'' 

Surging food costs and a doubling in the price of oil in a year limit the ability of the central bankers to cushion growth, the Organization for Economic Cooperation and Development said in its June 4 report, predicting the strongest worldwide inflation this year since 2001. 

India's inflation in the last week of May was the fastest since February 2001. Price gains in neighboring Pakistan accelerated to 19.3 percent in May, the highest in 30 years. Inflation in Vietnam was 25.2 percent in the same month, the fastest since 1992, and in Indonesia consumer prices jumped 10.4 percent from a year ago. 

*Indonesia, Vietnam* 

Central banks in Indonesia, the Philippines, Vietnam and Pakistan have increased borrowing costs over the last two months to tackle inflation. China, where retail sales grew in May at close to the fastest pace in nine years, raised its cash reserve requirements for lenders for the fifth time this year to 17.5 percent from June 25. 

India's inflation is likely to accelerate to more than 9 percent next week, the highest in 13 years, after the government raised retail fuel prices on June 4, according to economist Sonal Varma at Lehman Brothers Holdings Inc. The changes in fuel prices will be reflected in price data due on June 20. 

Crude oil prices touched an all-time high of more than $139.12 a barrel on June 6, raising concern India's import costs will jump. The South Asian nation relies on crude oil from overseas to meet three-quarters of its energy needs. 

``Higher oil prices look set to weaken growth by squeezing profit margins, widening the trade deficit and reducing consumer purchasing power,'' Varma of Lehman said. ``The rate hike increases the downside risk to growth because it will raise the cost of borrowing for companies and households.'' 

*Slower Growth *

India's industrial production, which accounts for a quarter of the $912 billion economy, increased 7 percent in the month of April, slower than the 11.3 percent gain in the same month a year ago, the government said yesterday. The economy is likely to grow by 8.5 percent this year, the slowest pace in four years. 

Concern that faster inflation and higher borrowing costs will slow growth, hurting profits, have led to a 25 percent decline in the Bombay Stock Exchange's Sensitive Index, or Sensex, this year. The stocks gauge was 0.4 percent or 56.4 points down at 15,193.76 at 2:31 p.m. 

Higher cost of funds may force lenders like State Bank of India, the nation's largest lender, and ICICI Bank Ltd., to raise loan rates for houses and automobiles, hurting consumer demand. State Bank is scheduled to decide on lending rates today. 

Record crude oil prices prompted Indian refiners to raise local jet-fuel costs by 53 percent this year, threatening profits at Jet Airways and its local rivals. SpiceJet Ltd., India's second-largest discount airline, yesterday said it will cut more routes as a surge in jet-fuel prices hurt profit. 

*Edible Oils* 

Inflation in India may accelerate further as the government may revise today's preliminary wholesale-price estimate in two months after receiving additional data. The commerce ministry today raised its inflation estimate for the week ended April 5 to 7.71 percent from 7.14 percent. 

To contain inflation, Prime Minister Manmohan Singh has cut import duties on edible oils, fuels and other food items and banned the export of pulses, wheat, rice and cement. Inflation is likely to ease in six to eight weeks time, according to the government.


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## Bushroda

*Asia's awesome threesome*
Rivals by Bill Emmott
Reviewed by Sreeram Chaulia 

For the first time in history, three great powers - China, India, and Japan - coexist uneasily in Asia. Lacking natural compatibility, all three are beefing up their militaries with consciousness of one another as a prime motive. Just as Pakistan is not the main concern for Indian strategists, China's rising defense expenditures can no longer be explained in the traditional straitjacket of Taiwan. 

While Asian sovereign wealth funds are attempting to acquire Western assets, financial capture of a Japanese or Indian company by a Chinese state-owned firm is inconceivable. This is because the three regional powers are prone to suspicions and jealousies in a highly competitive strategic environment. 

In his new book Rivals, Bill Emmott, a former editor of The Economist, argues that friendship among Asia's awesome threesome is "only skin-deep" and examines the consequences of their rivalry for the world. Emmott's thesis is that internal changes like the experience of economic growth, awareness of increased strength and pressures of public opinion will affect how India, China, and Japan size up each other and the West in a "new power game" (p 9). 

Sadly, this preoccupation with domestic issues leads to lengthy assessments of each country's internal affairs that are not fully relevant to the book's theme of inter-state rivalry. Trapped in the shopworn modernization paradigm of "disruptive transformation" inside each society, Emmott misses slices of the larger geopolitical canvas on which Asia's power struggles are being played out. 

The book begins with the accelerating commercial links that are integrating Asia like never before. In the immediate post-war and post-colonial decades, economic exchanges from Japan in the east to India in the west barely existed. Yet, today, the Asia that never had a single dominant culture has "a unifying religion: money and the ambition of economic development" (p 33). Multinational corporations now treat the region as a single economic space and as a "tightly connected pan-national supply chain" (p 42). In the security realm, though, Asia is not quite a collective entity, as shown by the absence of unifying regional institutions. 

Emmott's survey of China's strengths and weaknesses leads to the inference that it will be an "awkward neighbor" for India and Japan. Beijing's "smile diplomacy" to assure that its rise should not be feared has few takers in New Delhi due to the former's provocative behavior on the bilateral border dispute. Chinese naval encroachments in the Indian Ocean to secure the "safety of sea lanes" is seen by Indian strategic elites as a strategy of "concirclement". China's military spending is more than double that of India's and roughly the same as that of Japan, which is a far richer country. Emmott portrays China and India as participants in a "strategic insurance policy race" (p 256) that is based on enhancement of respective military capabilities. 

At present, the Chinese state does not tax farmers or urban households heavily. However, as expectations for a substantial social security system increase, the Communist Party will need to broaden the tax base and risk demands for democratic representation. Emmott predicts that a serious protracted economic downturn could cause a drop in corporate tax revenues and force the party to introduce "some form of electoral democracy, while ensuring that its substance remains suppressed" (p 85). 

The author does not tackle the matter of how domestic regime change in China might go on to impact relations with India and Japan. He assumes that a more open China will be less threatening to the other two Asian powerhouses, although the historical evidence suggests that even if the Kuomintang had won the Chinese civil war and established democracy in the mainland, China would have posed the same strategic threats to India and Japan. Emmott fails to properly evaluate Chinese hyper-nationalism, which shows no sign of abating, even if democracy arrived. 

Moving to Japan, Emmott warns against writing it off as a spent force. Five years of continuous economic growth and a new assertiveness in international relations have brought Japan back into the reckoning. The bottlenecks it faces are an aging and shrinking population and ensuing extra-budgetary burdens. Mounting labor costs will be a difficult proposition for the Japanese economy to cope with. Emmott is still hopeful that scarce labor will "provide a new source of discipline to Japanese companies to become more efficient and profitable" (p 115). 

Japanese willingness to face up to China underscores Tokyo's "anxiety to involve India in regional affairs" (p 96). A Japan in relative decline, with expected annual gross domestic product (GDP)growth rates of only 1.4% for the next five years, will have "little chance of standing tall and strong alongside China" (p 106). It is in this context that Tokyo and New Delhi are growing closer through "economic partnership agreements" and joint military exercises, which Emmott labels "sensible precautions" against Chinese ascent (p 120). 

On India, Emmott credits the momentum that has built up thanks to consistent public policy, regardless of which political party is in power. All Indian governments of the past 15 years have continued economic reforms, moved closer to the United States and deepened engagement in East and Southeast Asia. As India attains global standards of economic growth, it can no longer be overlooked or treated with contempt, as China did in the past. Emmott sees promise in the sharp rise in India's levels of savings (32% of GDP), investment (34% of GDP) and manufacturing sector performance. 

On infrastructure, India pales in comparison to China but is improving nevertheless. India ranks well below even its South Asian neighbors on the ease with which business can be transacted and contracts enforced. Except for English language proficiency and an advanced service sector, "India comes up short on almost every measure in comparison with China" (p 149). 

Yet, in spite of the frustrations with India's wobbly progress, "more is being done than in the past and things are still getting better" (p 145). For India to march ahead, Emmott advocates meaningful free trade agreements with ASEAN (Association of Southeast Asian Nations) or all members of the East Asia Summit, and faster cross-border trade liberalization with South Asian neighbors that is spearheaded by provincial governments rather than the central government in Delhi. 

Emmott devotes one chapter to the environmental degradation facing rapidly industrializing China and India. He presents Japan as a role model to emulate for cleaning up the smoggy and muddied Chinese and Indian skies and waters. A combination of popular protests and the "oil shock"-induced switch away from heavy industry to electronics and high-tech gadgetry helped Japan become a more salubrious country in the 1970s. 

China's lack of democracy and independent judiciary, however, leave environmental improvement entirely in the hands of a central government that is beholden to business interests. In a system where promotions and careers of local officials depend on economic growth quotas, environmental law enforcement has a dubious future. 

The only way local bureaucrats will change their priorities is if a post-Kyoto deal on global warming is signed by China and applied as external pressure on the mandarins. As to India, New Delhi could be persuaded to join a post-Kyoto treaty if Japan provides financial compensation and discounted technological assistance on pollution control. Such an offer would also present Tokyo "yet another way to balance China's rise" (p 182). 

The later chapters of Emmott's book highlight old animosities among China, Japan and India, which are worsening in spite of the continent's economic integration. Heavily politicized interpretations of history endlessly muddle Sino-Japanese relations. As Chinese and Japanese great power ambitions "well up all over the region", flashpoints that look resolvable on paper simmer on (p 213). The biggest risk lies in the East China Sea, where Chinese "gunboat diplomacy" over disputed islands and marine resources has raised Japanese hackles. Chinese claims over parts of North Korea (the "Koguryo Kingdom") ring alarms in Japan, which does not want a Chinese dagger pointing in its direction from the Korean Peninsula. 

Sino-Indian quarrels over Aksai Chin and Arunachal Pradesh have stabilized with time, but risk re-ignition should unrest break out in Tibet during a period of weak Chinese central government. The absence of strategic communication lines among China, India, and Japan holds prospects of misunderstandings and miscalculations in crises. Emmott recommends conversion of the East Asia Summit into "Asia's principal political and economic forum", through which regular dialogue among all three major powers is institutionalized (p 272). 

Emmott's final chapter is a hodgepodge of unsubstantiated remarks and scenarios. He argues against factual reality that a rapid rise in oil prices would not hurt economic growth in rich, consuming countries. He claims that terrorism and political tension have remained distant from the main arenas of Asian growth, trade and investment between 2003 and 2007, notwithstanding the massive economic costs India has endured from jihadi terrorism. Emmott seems to want readers to believe that India escaped terrorism and that this enabled it to grow economically. He could have done better by offering an explanation of how India managed to grow despite being buffeted with terrorism. 

Apart from the general deficiency of reading like a collection of Economist Intelligence Unit country reports, Emmott's book sits on the flawed premise that China, India and Japan are all "grinding up against each other and each is suspicious of the others' moves" (p 253). How can India and Japan be rivals in any sense? Asia is actually beset by two dyadic rivalries, that is, China versus India and China versus Japan. Emmott's concept of a triangular contest is imaginary and illogical. Occasionally, he does broach the possibility of Japan and India "ganging up together against China" (p 263), but fails to unravel the mystery of why such an alignment is taking so long to germinate. 

Emmott's yen for futurology yields interesting speculations on what might happen after the deaths of Kim Jong-il in North Korea or the exiled Tibetan spiritual leader, the Dalai Lama, but he bypasses the impact of Russian-American tensions on how Asia's "Big Three" relate to each other. 

The author's Western lenses, trained to accept the US as the sole stabilizer in Asia, are blind to the meaning of Russian renaissance for Asia's power balance. His faith in the US and the European Union to bring about peaceful change in Asia overlooks two vital puzzles: How will the emerging Russian-Chinese entente affect traditionally strong Russian-Indian ties and and how does the Moscow card impinge on the cagey Sino-Indian relationship? 

By the end of the book, one is left wondering whether geopolitics matters at all or if the "new Asian drama" can largely be explained by rating the economic growth prospects of its protagonists. A consultancy style comparative stocktaking of the Indian, Chinese and Japanese economies and polities differs from a study of the diplomatic maneuvering among the three states along with two other players - the United States and Russia. Emmott's disappointing fare tries to do a bit of both and falls short. 

*Rivals. How the Power Struggle Between China, India and Japan will Shape our Next Decade by Bill Emmott, Allen Lane, London, 2008. ISBN: 9781846140099. Price: US$26, 314 pages. *


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## Bushroda

*A world in which the US is no longer No. 1*
*Journalist Fareed Zakaria writes of the rise of new global powers.*

By Jonathan Rosenberg
Christian Science Monitor, MA
June 13, 2008 edition


*The Post-American World By Fareed Zakaria 
W.W. Norton, 292 pp., $25.95*

While the United States remains the world&#8217;s most powerful country &#8211; militarily and economically &#8211; its place on the international stage is changing. The wealthiest person on earth is Mexican, the tallest building is in Taipei (soon to be surpassed by one in Dubai), and the biggest factories are in China. India&#8217;s film industry, Bollywood, is now the world&#8217;s largest, producing more movies and selling more tickets than Hollywood. And when experts identify the multinational companies that will become leaders in the future, they point to firms in Latin America, India, South Korea, Taiwan, and Malaysia.

The US has even surrendered its supremacy in shopping malls. Only one of the world&#8217;s Top 10 malls is in the United States. And who&#8217;d have guessed that an American shopaholic with an urge to visit the biggest mall on earth would have to fly to Beijing?

These developments illustrate the central point of Fareed Zakaria&#8217;s illuminating and timely new book *The Post-American World*. Over the past couple of decades, a global transformation has seen countless countries experience remarkable economic growth. While the US will remain an economic power, the days of American economic preeminence, which characterized the 20th century, are over. According to Zakaria, this points not to the decline of the US, but to &#8220;the rise of the rest.&#8221;

Zakaria writes that the global economic explosion is a consequence of political change (the fall of the Soviet state discredited central planning); the free movement of capital around the world (the daily flow of trillions of dollars lubricates the global economy); and the communications revolution (the Internet and cellphones have transformed business by driving down costs and increasing efficiency).

*The rise of India and China*

In presenting this story, Zakaria, editor of Newsweek International and an astute analyst of US foreign policy, looks closely at economic developments in China and India, and assesses how the spread of global wealth will affect the US.

With annual economic growth averaging 9 percent for the past 30 years, China has emerged as a global economic powerhouse. In 1978, the country made 200 air conditioners; in 2005, it made 48 million. It produces two-thirds of the world&#8217;s photocopiers, microwave ovens, and shoes, and now exports as much each day as it did in all of 1978.

The average income for a Chinese person has increased sevenfold during that time, allowing 400 million people to escape poverty. While the country faces enormous challenges (how, for example, will the government reconcile its policy of economic liberalization with its refusal to democratize the political system?), China will prove a formidable competitor for the United States and a key concern for US policymakers.

Zakaria&#8217;s discussion of India is particularly incisive. Born and raised there (he left to attend Yale University and later Harvard University), he details the changes washing over the country, which, like China, is developing at warp speed. While there are key differences between them (India is a democracy), India&#8217;s remarkable growth, like China&#8217;s, has drastically reduced poverty. More Indians have risen from poverty in the past 10 years than in the previous 50.

Though the Indian economy is far smaller than China&#8217;s, experts predict that by 2020, its gross domestic product will equal Britain&#8217;s. Driven by a high rate of personal consumption, India&#8217;s economy, based mainly on services and industry, is unlike any in the developing world. To be sure, hundreds of millions of Indians remain unspeakably poor, but Zakaria claims that the economic expansion can be felt everywhere, &#8220;even in the slums.&#8221; And US policymakers and business leaders will be glad to know that the Indians are overwhelmingly pro-American.

*What role will America play?*

Zakaria concludes with an assessment of America&#8217;s place in this new era. The US should not be alarmed, he writes, for it will not be an anti-American age. Indeed, the American political and economic model is admired across the globe.

America can maintain its considerable economic power, Zakaria argues. Immigration and American higher education will help the economy remain vibrant and innovative. And America&#8217;s existing strength in nanotechnology and biotechnology, two cutting-edge industries, will catalyze American economic growth well into the 21st century.

Nevertheless, the US confronts real challenges. Zakaria sees the American political system &#8211; captured by &#8220;money, special interests, a sensationalist media, and ideological attack groups&#8221; &#8211; as the country&#8217;s &#8220;core weakness.&#8221; It serves partisan battles, he writes, but solves no real problems.

Zakaria is also concerned that in recent years American leaders have seemed &#8220;clueless about the world.&#8221; While the Middle East is important, it is time to stop worrying mainly about the ancient conflict between Sunnis and Shiites in Iraq. Instead, US policymakers should start thinking seriously about the 21st century. Forging constructive relationships with China, India, Russia, and Brazil will be essential, for it is there that the &#8220;future is being made.&#8221;

_Jonathan Rosenberg teaches US history at Hunter College and the CUNY Graduate Center._


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## Bushroda

*Investing in India's growth*
Written by: Malar Velaigam 
Investors Chronicle, UK
Created: 13 June 2008 

No one would have predicted that the largest float on the Alternative Investment Market (Aim) this year would be an Indian investment fund, but this week history was made and KSK Emerging India Energy Fund floated on Aim raising $200m (£101.2m) showing the rest of the world that India's growth remains very much on track. In fact, officials have recently announced growth forecasts of 8-8.5 per cent for India's economy in the 2008-09 financial year  which, although less than last year's astronomical 9.4 per cent growth, is still pretty spectacular considering that the rest of the world has gone into economic slowdown.

The Bombay Stock Exchange's Sensitive Index (BSE Sensex)  a value-weighted index consisting of India's 30 most actively traded stocks  has been increasing at an almost equally rapid pace. The Sensex has risen steadily over the past two years, hitting 14652.09 points last summer and powering on to hit 20873.33 points by January 2008.However, reverberations from the global financial crisis sent the Sensex down to 16748.2 points by the end of January 2008. The index has since fallen to lows of 14808 points, but has been showing encouraging signs of recovery. 

The Alternative Investment Market (Aim) All-Share Index has also suffered significantly, falling to a year low of 939.5 points on 20 March 2008. But one index has bucked the trend and remained resilient in spite of the performance of both Sensex and the Aim All-Share: the ic Aim India Index. In March 2007, following a steady inflow of Indian companies on to Aim, we created the ic Aim India Index. Since then, the index has grown to include another five companies, taking the total to 26 companies that have Indian-operations, or are based in India. So why have Indian companies on Aim had a stronger run than both their India-listed counterparts and UK companies on Aim?

First, it's because India's growth story is still being written. And young, high-growth businesses offer defensive qualities as they are not in tandem with the global economy at large. 

India's common law system is based on UK common law, making it easy to understand. Corporate governance is advanced and accounting standards do not vary across the country as they do in China.

Sam Tully, corporate banking director at Seymour Pierce  which has also established an India Index  says that there is also a growing understanding by Indian companies of the kind of reporting expected of companies on Aim. So while the Sensex undergoes its period of correction, and Aim shares go through a period of consolidation, investors have an opportunity to ride the high-growth company and India waves by investing in companies on the ic Aim India index.


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## nitesh

> On India, Emmott credits the momentum that has built up thanks to consistent public policy, regardless of which political party is in power. All Indian governments of the past 15 years have continued economic reforms, moved closer to the United States and deepened engagement in East and Southeast Asia. As India attains global standards of economic growth, it can no longer be overlooked or treated with contempt, as China did in the past. Emmott sees promise in the sharp rise in India's levels of savings (32% of GDP), investment (34% of GDP) and manufacturing sector performance.



But this will continue for how much time. The bloody commies heave already been successful (till now) in holding the nuke deal. The Indian progress is very much dependent on commies getting out of power whether direct or indirect. these are real traitors.


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## Bushroda

*The Next Frontier for India's Outsourcing Industry? The Domestic Market*
Published: June 12, 2008 in India 
Knowledge@Wharton 

Earlier this year, Genpact, the largest business process outsourcing (BPO) player in India, gave Harpreet Duggal a new role: responsibility for developing and executing the company's domestic BPO strategy. Duggal is already well into discussions with potential customers, and is finalizing operating locations. He's moving fast because Genpact isn't the only Indian company interested in this space. For many reasons, the domestic BPO market is one that no one can afford to ignore anymore.

Duggal primarily is targeting two sets of potential customers: existing global customers who are looking to increase their presence in India and require the same systems and processes they have elsewhere; and Indian companies with global aspirations, both by way of moving beyond Indian boundaries and by providing a global experience in the Indian market. These require world-class processes and systems. Says an upbeat Duggal: "We believe that India is a very exciting market to be in."

Having been on the periphery, the domestic BPO business is steadily moving onto everyone's radar. Companies including IBM Daksh, Firstsource Solutions, MphasiS BPO and Intelenet Global Services are looking to significantly increase their presence. Others, such as Wipro BPO and Infosys BPO, are waiting for the right time to enter the space as part of a total outsourcing solution along with their IT arms. And, firms such as 24/7 Customer have no immediate plans to enter but are watching the space keenly. 

What has brought about this growing interest in India's BPO market? Industry players and analysts cite multiple factors. These include reduced costs of connectivity, the scorching pace of the Indian economy, the phenomenal growth of companies in sectors including telecommunications and financial services, rising customer expectations, Indian firms' global aspirations, and global firms entering the Indian market. The changing rupee-dollar equation and the slowdown in the U.S. economy, which is forcing players to look at other markets, have added to the momentum. 

Wharton management professor Saikat Chaudhuri says the factors driving that trend are the "tremendous growth" of India's domestic markets, the slowdown in Western markets, and the dollar's weakness against the rupee. He notes that a whole new class of medium-sized companies outside of the well-established and large industrial houses like those of Tata, Birla, Ambani or Goenka is looking at farming out noncore activities to increase efficiencies and focus on core competencies. "These companies are becoming customers of Oracle, Cisco, SAP and so forth," says Chaudhuri. 

According to Ravi Bapna, assistant professor at the Indian School of Business, "It's now become profitable to address this market and the industry is set to take off."

A glance at the Indian BPO industry's growth helps put the dynamics of the domestic market in perspective. At a compound annual growth rate of around 37% over the last few years, BPO exports have been the fastest-growing segment of the Indian IT-BPO sector. They have grown from $3.1 billion in fiscal 2004 to $11 billion in 2008 and currently account for 37% of the global business process offshoring pie. They sustain an employee pool of more than 700,000.

Players have tried over the years to add quality and efficiency to their original labor arbitrage sales pitch. They have been moving from low-end, non-core activities to more complex processes. Now, in a move further up the value chain, they are looking at becoming transformational partners to their clients, making an impact on business metrics.

A recent study by the National Association of Software and Services Companies of India (Nasscom) and the Everest Group estimates that in a "business as usual" mode, India's BPO exports will grow to $28 billion to $30 billion over the next four to five years. With proactive measures, the report says, they have the potential to reach $50 billion by 2012, with a maximum addressable opportunity of $220 billion to $280 billion.

Traditionally, Indian BPO vendors have relied largely on English-speaking geographies as their markets. North America and the United Kingdom together account for about 87% of their export revenues. North America, primarily the United States, accounts for roughly two-thirds of the market alone. While this dependence on the U.S. market is expected to continue, players have been expanding their footprints in other markets, notably continental Europe and the Asia-Pacific region. With the slowdown in the U.S. economy, rupee-dollar fluctuations, and growth in other markets, this move to tap other geographies not only acts as a natural hedge against currency fluctuations, it's simply a good business strategy.

*India's Growth Beckons*

That's where the Indian market comes into play. India's economy is growing too fast for any industry not to want to share in its growth. From less than $100 million in 2002, BPO demand in the domestic market grew to $1.1 billion in 2007. In the last year, it is estimated to have grown to between $1.6 billion and $1.8 billion. The Nasscom-Everest study estimates the potential addressable market at around $15 billion to $20 billion over the next five years. Realizing even half of this potential would be significant.

In many ways it would change the nature of the industry. As it stands, close to 80% of the industry comprises captive shared service centers. The rest of the industry is highly fragmented. Estimates suggest that 400 to 500 firms constitute the unorganized sector. As the industry gains in size and stature, a fair bit of consolidation is expected. Third-party service providers, many whose revenues are growing around 100% a year, are expected to increase their market share significantly.

Telecommunications and financial services have been key verticals spurring domestic demand, followed by consumer goods and airlines. Going forward, government, travel and hospitality, retail, and media and entertainment are expected to attract significant demand for BPO services in India.

Ravi Aron, senior fellow at Wharton's Mack Center for Technological Innovation and an expert on outsourcing trends, points out how BPO firms in India will find the domestic market more challenging than those in developed countries. For starters, he says Indian companies in several services industries including those in the BFSI (banking and financial services industry) segments are wholly owned by the government. BFSI companies have tended to be the biggest opportunity for outsourcing services providers in Western markets, he adds.

"Although these companies present the right opportunity for BPO firms, state-owned banks and insurance companies like the State Bank of India and General Insurance Corp. of India are going to be very slow to start outsourcing on a large scale," says Aron. "That is because of the extraordinary pressure they will face from their unions, who don't want their jobs to go to the private sector."

The second challenge BPO firms will face in India stems from the fact that any company's decision to outsource its needs is "heavily embedded in its technological architecture," says Aron. "Indian services companies in either the public or the private sector are heavily underinvested in technology on a per-capita and per-sale basis compared to those in the U.S. and Europe. Indian services companies are far more labor intensive, and don't have the technology platforms that will facilitate outsourcing, excluding [financial services companies like] an ICICI or HDFC."

Aron talks of the "3 Ps" of information architecture -- platforms, processes and people -- "where Indian companies are not streamlined." He says internal processes at most Indian services companies are "idiosyncratic" and not standardized as in large retail companies like Wal-Mart or U.S. health care companies. 

Gaurav Gupta, country head of the Everest Group, points out that with the phenomenal growth in these industries, the name of the game for most companies is to gain market share and grow the top line. The competitive landscape is straining companies' operational models. So companies in these industries are turning to vendors who can help them overcome some of the challenges associated with fast growth, like managing huge volumes and providing a large network that can reach out to different corners of the country rapidly. Says Gupta: "The present systems and processes are nowhere near adequate, either by way of scale or expertise, to sustain the kind of growth that companies are seeing in India. These require tremendous ramping up. Otherwise they will become severe bottlenecks." Adds Susir Kumar, chief executive officer of Intelenet Global: "At this stage of growth, companies would rather use their capital in building their brands, acquiring customers, and focusing on their core competencies and outsource whatever is possible."

*'Productivity Arbitrage'*

Aron agrees that big opportunities lurk behind those shortcomings at Indian services companies. BPO firms could help standardize and automate processes at Indian companies and achieve "extraordinary productivity gains of up to 35% over 18 to 24 months," he adds. "That is why doing BPO in India for Indian companies makes a lot of sense. Instead of wage arbitrage, start thinking about productivity arbitrage."

Even as companies busily increase their customer base they realize that, with the Indian economy becoming more globally integrated, customers are ever more demanding. The "new" Indian customer is not satisfied with anything less than world-class levels of product and service quality. Take the Indian telecom industry. It is among the most complex in the world, with new products being introduced practically every day. It is becoming imperative for companies to get it right the first time. Customer service is seen as a key differentiator in the crowded marketplace. Customer service, in fact, accounts for two-thirds of revenue in the domestic BPO market, followed by finance and accounting and human resource outsourcing. As Nasscom vice president Rajdeep Sahrawat says: "There is very little to differentiate companies from the product point of view and therefore offering very high quality, personalized, 24/7 customer service is critical. This requires scale, flexibility and expertise."

Bharti Airtel, India's largest mobile services provider, is an often-cited example. Bharti was one of the first and biggest Indian companies to outsource on a large scale. In August 2005, the company signed a mega deal with four global BPO companies -- IBM Daksh, MphasiS, TeleTech and Hinduja TMT -- to outsource its call centers. Bharti had already outsourced its IT and cellular networking requirements to IBM and Ericsson, respectively. These strategic moves allowed Bharti to focus on its core areas of product innovation, marketing and brand building. Bharti has a mobile subscriber base of around 60 million and is adding around 2 million subscribers a month. It is a beacon for others targeting high growth. Says Ramesh Gudalur, president of MphasiS BPO: "Companies like Bharti who look at outsourcing as an integral part of their business strategy are completely changing the way Indian companies have traditionally run their businesses. This is putting pressure on others, both in their own industries and in other sectors, to follow suit." 

Opportunities await BPO firms also in providing specialized services to newly emerging industries like retail, fashion apparel or automobile components, such as customer relationship management (CRM), market research, accounting, and inventory and supply chain management, says Aron. "Many of these specialized services companies have the money, but not the managerial capacity or bandwidth to automate their processes and extract efficiencies," he adds. He sees a new trend emerging in the next two to three years of "platform-based BPO" that provide niche services in areas like credit card fulfillment, mortgage loan processing and loan refinancing, and property & casualty insurance.

*Delivering Value*

Increased capability in the supplier community is also encouraging Indian companies to move toward outsourcing. Having grown via the export market, many large suppliers have developed end-to-end capabilities that are large enough to attract the domestic players looking at huge volume growth. More important, the suppliers now have the capability to deliver value by way of technology platforms or process expertise that goes well beyond just cost.

This doesn't mean that the cost advantage that Indian companies enjoy by outsourcing their business processes is insignificant. Cost, as Sandeep Soni, chief executive officer of Spanco BPO, points out, remains an important driver by sheer virtue of the economies of scale that a vendor brings in. However, it is unlike the export market, where labor arbitrage was the key factor in the industry's early days and continues even today to play a dominant role. 

Chaudhuri argues that BPO services companies could still play the wage arbitrage card to a significant extent in India's domestic markets, but differently. "That is because there are many inefficiently run companies in India, and the BPO companies have not just the expertise but also the scale to perform functions across the board at a much lower price," he says. "While the wage arbitrage in India's domestic markets may not be as attractive as it is in the west, certainly the volume of activity can make up for it."

Sabyasachi Satyaprasad, senior director at advisory firm NeoIT, says the absence of a strong labor arbitrage in the domestic market will in fact compel vendors to offer a higher-value proposition, such as solving business problems for their domestic clients. This, he says, could well result in the domestic BPO industry leapfrogging some of the growth stages that vendors had to go through in the global market. Industry players agree. Says Pavan Vaish, chief executive officer of IBM Daksh: "When one is operating in a market where there is no arbitrage benefit, you have to innovate and add value to the customer. When we started out in 2005 we had thought that our international business would give us a lot of insights into our India business. But what we are finding is that it is our India business where a number of amazing innovations are happening."

BPO companies that have concentrated on serving Western markets may not feel the need to reorient themselves as they look to serve domestic Indian companies, says Chaudhuri. While these BPO companies developed their "global delivery model" for Fortune 500 companies, he notes, many of them were "born and bred" in India, including Wipro Spectramind and Genpact's predecessor company. "The outsourcing model has been designed keeping Indian constraints in mind from the very beginning, which allows for very healthy margins when they deal with foreign clients." 

The only significant difference BPO companies will encounter In India's domestic market is the need to offer simplified services, according to Chaudhuri. "The BPO companies targeting the Indian market are not going to sell $300 million or $1 billion contracts for five years," he says. "They will have a lot more projects that are in the $1 million, $5 million and $10 million range. They are well-positioned for that because they started small themselves." He says these BPO companies could also replicate the dedicated units they set up with some clients.

This presents its own challenges. While their global education is valuable, vendors must create a proposition that is relevant to their domestic clients' immediate needs. According to Sanjeev Sinha, senior vice president of operations at Firstsource Solutions: "In many cases the India market has requirements that are rather different from the global markets, so vendors need to adapt and customize the solutions to the local situation. A cut and paste of the global solution will not work."

Vendors also need to think ahead of the curve regarding their very business models. With India, an extremely price-sensitive market, pricing models need to be innovative. Vendors must build capabilities that allow them to adapt to the changing expectations of a fast-growing and competitive marketplace. As Anirudha Prabhakaran, chief operating officer of 3i Infotech, points out: "This is a market which not only negotiates very hard on the efficiency front but also constantly raises new demands."

One potential obstacle Aron sees is a "huge divide" that exists between managerial personnel and the clerical staff at Indian companies in the ability to efficiently use technology in processes. While Indian managers are able to use technology to access data, analyze it and create reports, for instance, clerical workers tend not to use computing capabilities to their fullest extent, he notes. "You don't see that sharp divide in the U.S.," says Aron.

*Variation in Margins*

There are other challenges, too. India, as it is well-known, is not a homogenous market. It has myriad regional languages, varied cultures and remote corners. For players who are looking at scale and who have national ambitions in the domestic BPO market, this means managing a range of complexities. Also, for the economics to be viable, players will have to move from larger cities and set up operations in Tier 2 and Tier 3 locations. It is true that the domestic market does not require that BPO agents be trained by way of voice, accent and culture; therefore it is less expensive and easier for service providers to move into the smaller cities. But the challenges posed by infrastructure and the availability of senior management must still be dealt with.

The biggest challenge, however, could be around profitability. Although the costs by way of infrastructure, wages and training are lower for the domestic market, so is the pricing. Pricing in the India BPO market is estimated to be anywhere between 30% and 60% less than in its global counterpart, though more experienced players insist that their domestic BPO margins are comparable to their global business or only marginally lower. With the outsourcing market in India still not mature, the readiness to pay for world-class services remains a challenge. But as Duggal of Genpact points out: "Even in the global markets the variation in margins is phenomenal." It all depends on how effectively vendors are able to deliver by way of cost structure, people management and value creation.

Chaudhuri says BPO companies focused on India's domestic market could continue to enjoy cost advantages because many of them are extending operations outside of the big cities to cheaper, second-tier cities. They could also use their Indian base to supply markets in other developing countries, he adds. "It's like the Tata Nano [the Tata group's newly launched small car], where the first foreign markets are in Africa, Southeast Asia and European countries that have road density problems, and some parts of Latin America," he says.

Chaudhuri sees other, longer term gains for BPO companies in all this. As service providers to India's new class of business houses that are expanding globally, they "could follow their clients to foreign markets," says Chaudhuri. "The Japanese banks followed the Japanese conglomerates, and U.S. telecommunications companies like Verizon did the same thing, following their financial services clients overseas."


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## Bushroda

nitesh said:


> But this will continue for how much time. The bloody commies heave already been successful (till now) in holding the nuke deal. The Indian progress is very much dependent on commies getting out of power whether direct or indirect. these are real traitors.



I share your sentiments but, more than commies you need to worry about rising cost of oil. Commies cannot impede India's growth. Neither is nuke deal undone. The agreement has been signed & it is merely the question of making it operational. In the meanwhile we can continue our negotiations with IAEA. Commies themselves are divided over several issues. The only man holding the fort against the nuke deal is Prakash Karat & most likely he would be sidelined in the future politics. Already Buddhadeb has come out against him.


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## Bushroda

*Is India 'banking' for a green future?*
Loughborough News, UK
Posted on June 13, 2008, 2:30 pm

Research in the Department of Geography at the University of Leicester is investigating the reasons why Indian banks have yet to commit to the Equator Principles; a set of environmental and social guidelines to which 62 banks and financial institutions worldwide have become signatories. 

As part of her doctoral studies, Sophie Hadfield-Hill conducted forty interviews with CEOs and senior management of Indian banks and leading companies to explore the extent to which Indias corporate sector is following the green agenda. 

Sophie said: There is certainly a lack of awareness of the Equator Principles in India. Leading banks are vaguely conscious of the guidelines, however, the public sector is waiting to be led by the Reserve Bank of India and the private sector banks seem to only want to commit if there is regulation or financial incentive. Current signatories such as Barclays and HSBC committed to the guidelines on a voluntary basis.. 

Sophie said: Indian banks are yet to declare their commitment to environmentally and socially responsible business, due to lack of interest from the Indian consumer.

Work needs to be done to make the guidelines more relevant to emerging economies. Firstly, however, Indian banks need to be made fully aware of the environmental and social guidelines to which banks worldwide are agreeing to. 

As a researcher who has now interviewed the senior management of the majority of Indias leading banks, I feel I have helped to raise awareness of environmental and social issues among the Indian banking sector.

If Indian banks do not become signatories, this will result in huge financial burden for banks committing to environmental and social guidelines. However, as Sophie added: If Indian banks are to penetrate western markets and participate more in the global economy, it is important that they recognise their responsibilities as global corporate citizens. 

Sophie concluded: Banks in India have significant influence over the safeguarding of fragile social groups and environments in Asia. At this time they must seriously consider their attitudes towards responsible lending both nationally and globally.

Sophie Hadfield-Hill is currently a PhD student at the University of Leicester, conducting research into the greening of leading companies and financial institutions in India. Her research stems from an interest into issues of environmental and social justice and the role that corporates can play in sustainable development.

The research is being presented to the public at the University of Leicester on Thursday 26th June. The Festival of Postgraduate Research introduces employers and the public to the next generation of innovators and cutting-edge researchers, and gives postgraduate researchers the opportunity to explain the real world implications of their research to a wide ranging audience.


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## Mohammed Azizuddin

'India created more jobs in US than US did here'

Taking on critics of outsourcing to India and the alleged loss of American jobs in the process, India's Minister of Commerce and Industry Kamal Nath asserted that Indian investments in the United States in the last two years had created more jobs in the US that American investment in India has.

In an interactive session with PBS television's talk show host Charlie Rose at the 33rd anniversary summit of the US-India Business Council, Nath said, "Indian investment in the United States in the last two years is more than the US investment in India in the last two years, and India has created more jobs in the US than the US has created in India."

"Now, the Democrats must hear this," he said, to which Rose quipped and asked if it were a campaign statement.

Nath said that "trade and investment is now a two-way street," and pointed out that American exports to India "went up by over 70 per cent last year. That's not a small thing."

"Why are they going up? Because India is a healthy economy and that's what I keep saying not only to the US, but to all developed countries," he said. "That you must ensure that there are healthy economies in developing countries and it's a great market for developed countries."

Nath said that the US needs to understand this "because healthy economies in developing countries mean greater markets. It's no use being a country of one billion people if you have no ability to buy anything."

Asked if India's remarkable growth rate would continue, Nath said there was no doubt about it and added, "We projected that we would be getting close to 10 per cent growth, but global economic outlook being what it is, we revised it downward to 8.5 per cent. Now, that itself is good."

Nath said this confidence and optimism were borne out of a notion that because of the "strong fundamentals," the Indian economy has "built up a momentum of its own and we are confident this momentum will continue whatever be the global economic outlook."

However, he acknowledged that the 3 F's -- fuel, food and finance -- were certainly cause for concern not just for India but for the whole world, and recalled that "they weren't there when I came to the USIBC last year."

Nath also said the sub-prime loan crisis that has devastated the US housing market and led to unprecedented foreclosures in the country and plunged the country into what many economists say is indeed a recession with worldwide implications, would not impact on India.

"We are quite decoupled from it," he said. "There has been no exposure by the Indian financial system to the sub-prime crisis, but of course if there is slowdown in the US, it does affect us."

But Nath said that "more important is the sentiment and that's what we need to guard against -- this sentiment of gloom. The sentiment of gloom is worse than the gloom itself, and that's what drives markets -- this sentiment and this frenzy that goes around. (But) It's not there in India."

He argued that the impact of this crisis is minimal "because our growth is not export-market driven -- it's domestic market driven. So, that keeps us in a little bit of a less vulnerable position," unlike other Asian countries whose economies are largely export-driven.

Nath also took exception to the allegations that India was responsible with its export ban for the worldwide shortage of rice, saying that "we banned the exports of only the cheap quality rice. If you want to buy rice from India, buy the good quality one. Why do you want to buy the cheap quality one."

He said, "Keep the cheap quality one for our 300 million people who earn less than $1 a day."

Nath also said the criticism that India was attempting to kill the Doha Round of global trade negotiations was "unfair and inaccurate."

He said that "India needs as much as the US, a rule-based multilateral trading system. So, for us, the Doha Round is as important as it is for the US."

But Nath asserted that "this round really needs to respect sensitivities. The United States has sensitivities on subsidies. Some countries have sensitivities on bananas. There is huge issue on coconuts. There are whole issues on tropical fruits. There are whole issues on subsistence. This round will close with each other respecting sensitivities. We need to harmonize these sensitivities."

"We are not going to get everything," he acknowledged. "No country is going to get everything, but no country is going to give away everything."

Nath said, "I don't criticize the US, I enlighten them. But we have moved forward since we were two years ago, where we were two months ago, and we continue to move forward."

The final question by Rose to the articulate and humorous Nath was that it used to be said that "every Senator in Washington used to look in the mirror in the morning and see a future president. When you look in the mirror in the morning do you see a future prime minister?"

The 600 plus audience cracked up and engaged in sustained applause, when Nath replied: "Well, I see myself. And, there's nothing better than seeing yourself."

Source:'India created more jobs in US than US did here'


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## Bushroda

*Cause and effects of film-making in India*
Rhys Blakely in Bombay 
The Times, UK
May 24, 2008

It is perhaps the ultimate special effects trick. Arrive at the Indian headquarters of Rhythm & Hues (R&H), the Los Angeles-based effects studio, and you could be mistaken for thinking that you were visiting a village in rural India. 

The thatched huts, however, are stylised cubicles that house the computer workstations at which R&H's staff weave their visual magic. Many of the Oscar-winning special effects for The Golden Compass, the Hollywood blockbuster that took $370 million (£187 million) at the box office last year, were put together in this thatched village. 

As in other effects studios around the world, the labour is painstaking. Each employee will produce the equivalent of five seconds of screen time in a month. The results, though, are usually worth the wait. Babe, the film about a talking pig that won an Academy Award and earned more than $250 million at the box office in 1995, was an R&H creation. Alvin and the Chipmunks, the recent surprise hit for which R&H created the eponymous rodents, has grossed $360 million - not bad for a film with a $60 million production budget. 

For the past six years, part of R&H's work on such projects has been completed in these Bombay offices, the design of which Prashant Babu Buyyala, the facility's managing director, seems especially proud. We wanted something creative yet functional, he says of the faux village look. Importantly, we didn't want to spend a lot of money. 

The same principles are directing Hollywood's passage to India. Post-production movie work - everything from complex digital effects (such as the shape-shifting animal daemons of The Golden Compass) to basic colour grading (making sure that shades stay consistent throughout a film) - is migrating from traditional centres such as LA to low-cost locations on the sub-continent. 

Nasscom, the Indian IT lobby group, estimates that the global animation market will be worth about $80 billion by 2010, and it is targeting it as a prime source of future outsourcing revenues as more film work is shifted to India. 

With emotions already running high over the loss of American jobs in an economic downturn, Mr Buyyala is adamant that Rhythm & Hues is not running a cost-cutting operation in India. The Bombay office handles work as complex as that done in the United States, he says. Moreover, despite India's size, a lack of art schools has translated into a relative dearth of talent. I keep on having to tell people: This country just isn't that cheap any more.' 

Yet it is hard to believe that cost has no bearing. Starting salaries in R&H's Bombay offices are as low as 40,000 rupees (£480) a month. Pay packets rise quickly and the highest earners in Bombay pull in similar sums to their American counterparts, Mr Buyyala says, but still the early discounts offered by young Indian animators are upsetting their peers in the US. 

Merzin Tavaria, of Prime Focus, an Indian post-production company that recently has acquired businesses in Los Angeles and London, is more upfront: You can't get away from the fact that we are cheaper than the West. 

The comments echo a recent report by Ernst & Young, which said that the global animation industry is offering a major chunk of business in animation to India to cut costs and increase profits. 

Simon Huhtala, who runs Prime Focus's operations in London, confirms that movie producers are looking to squeeze the pips out of post-production players. Cost and speed are paramount; scale and rationalisation are the industry's driving forces. 

There is another compelling reason to enter India: the country's potential as a market. Mr Tavaria is working on Love Story 2050. The film's producers are billing it as Bollywood's first true special effects-driven science fiction film. 

The biggest film released in 2007 was the mythological sequel Hanuman Returns. For R&H, already a specialist in making millions from anthropomorphisation, the possibilities are similarly mind-boggling if the world's biggest film industry does succumb to the charms of talking animals.


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## Bushroda

*Don't run away from the Indian tiger*
By Mark Dampier
Independent, UK 
Saturday, 14 June 2008 

India is the second-largest country in the world in terms of population (behind only China) and the seventh-largest in terms of land mass. It has 36 cities with populations of more than a million people in each, and is forecast to be the most populous country in the world by 2050.

It is becoming increasingly wealthy and has the largest English-speaking population in the world with a huge educated middle class. It is clearly a massive investment opportunity, so you might wonder why there are hardly any Indian funds available. 

But this is gradually being addressed, and one new launch is the New Star Indian Equity Fund. New Star has taken a slightly unusual route by in effect sub-contracting the management of the fund to Tata Asset Management. Tata is a huge Indian conglomerate &#8211; many of you will know it from its purchases of Corus (formerly British Steel) and more recently Jaguar and Land Rover. It has operations in 54 countries across six continents, and accounts for an amazing 3 per cent of the entire Indian economy and 5 per cent of its exports. As you might imagine from these statistics, Tata is the largest private employer in India.

The investment division, Tata Asset Management, is one of the fastest-growing investment houses in India, currently running approximately $7bn (&#163;3.6bn) for more than two million investors. The division already manages a number of funds for Indian nationals with, I must say, very impressive track records.

The managers believe they have an investment edge through the sheer depth of research they do within the Indian market. They look to exploit opportunities created by a fast-growing economy without losing sight of stock valuations. This discipline is important, because it is easy to get carried away in such situations, to overpay drastically and then suffer a big disappointment.

Tata's 18-strong investment team sift through some 4,000 stocks on the Indian market and bring this list down to a manageable universe of about 400 companies. From this, a focused portfolio of 35 to 40 shares will be selected. They tend to invest in larger companies (that is, those valued above $1bn). The New Star fund will be about 75 per cent-invested in this area.

When I visited Tata's offices in Mumbai, I was struck by the team's extremely high standards of professionalism and ethics. In my opinion, they would put most Western companies to shame. Risk management is high on the agenda, but this will not be a closet indexer of the Indian stock market; Tata will take calculated risks in an effort to outperform the market.

Without doubt, India has huge potential. It has a superb demographic profile &#8211; a large part of the population are young people &#8211; which over the long term means that it could be even more successful than China. However, there are problems &#8211; and infrastructure and power supplies are two very obvious ones.

Remarkably for such a large country, India should be self-sufficient in food. However, poor infrastructure means that 25 per cent of foodstuffs rot before they get to their final destination. A massive road-building programme is under way across the nation, with about 7,300 kilometres under construction and due for completion in the next year. Furthermore, power generation capacity needs to be increased &#8211; India is producing 9 per cent less electricity than current demand, and 78 million homes don't have electricity.

Finally, inflation is rearing its ugly head. Fortunately, the Reserve Bank of India has been far more proactive than most emerging-market banks and has raised interest rates in response. However, inflation could still present a significant risk in future.

It is vital that investors remember that India is neither a one-way bet, nor a short-term one. Volatility should be expected, and at times it will be extreme, but true long-term investors with cash to spare should probably view sharp falls as an opportunity to top up their investment. India also makes a good area for regular savings as, during periods when the market is low, you can gradually pick up units at a lower price.

In my opinion, New Star has scored an impressive coup by getting Tata to manage this fund. Not many people in the world have much experience of investing in the Indian stock market, but Tata are the kind of group you'd back to succeed. It is imperative that an Indian investment be held with at least a 10-year time horizon &#8211; short-term traders should beware. 

The New Star Indian Equity Fund is currently in an offer period; you can buy it for a fixed price of 500p per unit until 27 June.

*Mark Dampier is the head of research at Hargreaves Lansdown, the asset manager, financial adviser and stockbroker. For more information about the funds included in this column, visit Mark Dampier | Get Mark's latest fund and sector analysis.*


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## Bushroda

*Country at a crossroads*
Heather Connon 
Money Observer, UK
13.06.08 

Ved Chaturvedi, managing director of India's Tata Asset Management, likes to take visitors to Mumbai before showing them other areas of the country. That way, they can see the contrast between what he describes as a "decaying city" and the vibrant development occurring elsewhere.

Mumbai certainly has plenty of the hallmarks of old India: roads so congested it can take more than three hours to get from the airport to the city centre 30km away and endless shanty towns lining the route or propped up against the grand office buildings.

Travel 170km west to the business centre of Pune and you see a different India. The new expressway, which joined the two cities in 2002, continues through a rash of housing developments, business parks and shopping centres that have sprung up around the historic town. The contrast neatly encapsulates what has been happening across India in the past decade or so. The country is gradually shaking off a long history of heavy state control and emerging as one of the most vibrant economies in the region. It has been one of the fastest-growing Asian economies - of these economies last year's near 9% growth was beaten only by China, while in all but three years in the past decade it has exceeded 4%.

India's stockmarket, too, has been booming. In 2007, it topped the regional tables and was close to the top globally. Over the past five years, the Bombay Stock Exchange's Sensex index has risen more than five-fold. 

*Global fallout *

Some of that euphoria has evaporated recently, with the index plunging 23% in the first three months of 2008. There has been a small recovery in the meantime, but the index remains well below its peak. This reflects a growing concern that Asian countries will not be able to escape the fallout from the global credit crisis or the US recession that seems destined to follow it.

Last year, 'decoupling' was the buzzword, as investors hoped that the lack of debt among the region's banks and consumers - together with its decreasing reliance on trade with the US and Europe and increasing trade within the region - would allow growth to continue. Now the consensus is that growth will be hit, although few expect the impact to be severe.

"We Indians are far more thrifty than the Americans," says Ishaat Hussain, finance director of Tata Sons, part of one of India's largest conglomerates, whose interests stretch from ownership of our own Tetley tea and Corus Steel to Indian department stores and technology services companies. He thinks the ripples from any global economic downturn may cut 0.5% from India's growth rate, but with most experts still predicting at least 8% growth over the next few years, that hardly amounts to a slowdown.

This resilience reflects the fact that, as with China and other Asian economies, India's growth story is a domestic one. Its population of more than 1.1 billion is second only to China, but unlike the Chinese, Indians are relatively well educated - although more than a quarter of the population is still illiterate. 

India also produces almost 500,000 engineering graduates a year and has far more fluent English speakers than China. That has made it the outsourcing capital of the world, but it is now attracting foreign investment in other industries. Most of the big motor manufacturers, for example, have plants in the country.

That, in turn, is increasing the wealth of the population generally, particularly among the middle classes, who are so vital to driving up consumption. While there are still more than 110 million households that survive on less than 90,000 rupees (£1,100) a year, the number of what Bhupinder Sethi, a senior fund manager at Tata Asset Management, calls the "consuming class" (with an income of between 500,000 and one million rupees a year) will have risen from 3.9 million in 1998 to an estimated 22.2 million in 2009-10.

*Class action* 

"Never before across the world have so many people joined the middle class," says Sethi, remarking on the contrast with the ageing, shrinking populations in the West. "Ten years ago, the US was the world's growth engine and had its strongest currency. Now, it is the emerging economies and their currencies are strengthening against the dollar."

This increasingly affluent army is splashing out on phones, televisions, cars and all the other trappings of consumerism, helping to keep India's economy growing as the rest of the world declines. Exports account for only 13% of the Indian economy, so even a dramatic fall in external demand should not have that big an impact.

That low level of exports may reflect one of the country's biggest problems: its infrastructure. While the Mumbai to Pune expressway may be as good as any British motorway, there are too few roads like it in India. Analysts at CLSA estimate the country has just 200km of expressways compared with China's 40,000km, while its power systems are also overloaded - power cuts are a common occurrence in New Delhi - and water systems are inadequate.

The government is committed to remedying that: its latest spending plan envisages almost $500 billion (£256 billion) of investment, including $150 billion on power and $76 billion on roads. Previous plans have not been fully carried out because of lack of government funds, although Sherene Ban, Asia client portfolio manager at JPMorgan, says it is now seeking private sector investment to help fund major schemes.

Tata's infrastructure companies are involved in power and road building projects, for example, while other private sector companies are helping finance the airport modernisation programme taking place at Mumbai and in the recently upgraded Hyderabad. India is also setting up special economic zones in conjunction with private sector companies such as Reliance, one of the country's largest conglomerates.

*Key driver* 

Improving the infrastructure is key to driving India's economy, says Ban. She points out that more than 200 million people in China are employed in manufacturing; the support services industry in India employs just five million. That partly reflects the fact that it takes an estimated three days to get goods from factory to port in China; in India, it takes 15. China's investment in infrastructure is one of the key factors in accelerating its growth and Sethi thinks India's infrastructure programme may help it emulate its bigger neighbour.

But, as the stockmarket's wobbles illustrate, there are also short-term concerns. Already the global credit crisis is affecting information technology services businesses, while food price inflation is causing unrest among India's population, as it is around the world. The government is doing what it can to counteract the effects by, for example, banning exports of non-basmati rice and cooking oil. It is hampered by the fact that, like China, it is a net importer of commodities and therefore has little choice but to pay the higher prices. That has pushed inflation up to 7.3%, the highest level in three years, forcing the Reserve Bank of India to introduce some fiscal tightening to counteract that.

"That is significant as the India story is driven by increasing consumption," says Ban. "If that decreases consumption, it could have a significant impact on the economy and the market."

The Indian stockmarket is unusually diverse. Brazil and Russia are dominated by commodities and have fewer than 500 companies, and just 150 between them worth more than $1 billion. India has almost 5,000 companies, including 129 worth more than $1 billion. That diversity, coupled with their reliance on the domestic market, should make the economy more resilient to a downturn.


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## Bushroda

*The joint rise of China and India could benefit everyone*
By Joseph S. Nye 
Daily Star - Lebanon, Lebanon
Saturday, June 14, 2008

George W. Bush is approaching the end of his presidency mired in low popularity ratings, which partly reflects his policies in the Middle East. But Bush leaves behind a better legacy in Asia. American relations with Japan and China remain strong, and he has greatly enhanced the United States' ties with India, the world's second most populous country.

In 2005, Secretary of State Condoleezza Rice prepared a visit to New Delhi by Bush the following year in which he announced a major agreement on US-Indian civilian nuclear cooperation, as well as a variety of measures for commercial and defense cooperation. 

The nuclear cooperation agreement was criticized in the US Congress for not being strict enough on non-proliferation issues, but it looked likely to pass. In India, the Communist Party, a small (but important) member of Prime Minister Manmohan Singh's ruling coalition, has blocked the agreement. But, as one Indian friend explained to me, this is mainly symbolic politics for India's left.

Even if the nuclear agreement fails, the improvement in US-India relations is likely to continue. Some attribute this to the fact that India and the US are the world's two largest democracies. But that was true for much of the Cold War, when they frequently talked past each other.

More importantly, with the end of the Cold War, the Soviet Union was no longer available as an Indian ally, and the US began to assess India and Pakistan in terms of separate interests, rather than as a pair linked in a South Asia balance of power. As Evan Feigenbaum, the top State Department official for South Asia recently said: "[T]he world of 2008 is not the world of 1948. And so India really has the capacity, and, we think, the interest, to work with the United States and other partners on a variety of issues of global and regional scope." This change began under the Clinton administration and is likely to continue regardless of who is elected president in 2008. 

Personal contacts between Indians and Americans have increased greatly. There are more than 80,000 Indian students studying in the US. The Indian diaspora in the US constitutes roughly 3 million people, many of whom actively participate in politics. In addition, India's economy has begun to grow by 8 percent annually, making it more attractive for foreign investment. Trade between India and America reached $26 billion in 2006.

In addition to these practical reasons for the improvement in bilateral relations, the rise of China poses a strategic consideration. As Bill Emmott, the former editor of The Economist, argues in "The Rivals", his new book: "[W]here [former US President Richard] Nixon had used China to balance the Soviet Union, Bush was using India to balance China. Like Nixon's move, with hindsight Bush's approach to India made perfect sense." And the concern is reciprocated on the Indian side. As a senior Foreign Ministry official told Emmott in 2007, "the thing you have to understand is that both of us [India and China] think that the future belongs to us. We can't both be right."

Official pronouncements stress friendly relations between India and China, and some trade analysts argue that, given their rapid growth, the two giant markets will become an economic "Chindia." When Chinese Premier Wen Jiabao visited India in 2005, he signed 11 agreements, including a comprehensive five-year strategic cooperation pact. In addition, Wen announced that China would support India's inclusion as a permanent member of an expanded United Nations Security Council, and oppose Japan's inclusion, which the US supports. As Singh put it during Wen's visit, "India and China can together reshape the world order." 

The two countries' recent rapprochement marks a considerable change from the hostility that bedeviled their relations following their 1962 war over a disputed border in the Himalayas. Nevertheless, strategic anxiety lurks below the surface, particularly in India. China's GDP is three times that of India, its growth rate is higher, and its defense budget increased by nearly 18 percent last year. The border dispute remains unsettled, and both countries vie for influence in neighboring states such as Myanmar. 

China's rise has also created anxiety in Japan, again despite professions of good relations during Chinese President Hu Jintao's recent visit to Tokyo. Thus, Japan has increased its aid and trade with India. Last year, the US suggested quadrilateral defense exercises including American, Japanese, Indian, and Australian naval units, but the newly elected Australian Prime Minister Kevin Rudd has pulled his country out of such arrangements. 

Rudd wisely believes that the right response to China's rise is to incorporate it into international institutional arrangements. Or, as Robert Zoellick, currently the president of the World Bank, put it when he was a State Department official, the US should invite China to become a "responsible stakeholder" in the international system.

Improved relations between India and the US can structure the international situation in a manner that encourages such an evolution in Chinese policy, whereas trying to isolate China would be a mistake. Handled properly, the simultaneous rise of China and India could be good for all countries.

*Joseph S. Nye is a professor at Harvard and author, most recently, of "The Powers to Lead." THE DAILY STAR publishes this commentary in collaboration with Project Syndicate*


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## Bushroda

*Who Will Ride India's Next Wave?*
*Media and entertainment, private education, infrastructure, and renewable energy companies are poised to prosper as India's middle class expands* 
by William Nobrega 
Businessweek
June 13, 2008

Welcome to the "Next Wave." We are living in an unprecedented point in human history when the new consumer, technology, infrastructure, and environments begin to converge and create one of the world's greatest eras of economic growth and technological innovation. 

During the next 20 years, the Next Wave will create more new consumers than the previous millennium did. Investments in infrastructure will exceed the total investments in the reconstruction of post-war Europe. Technology and the Internet will be the great enabler, facilitating the development of multiple centers of innovation across a wide range of geographies. And the environment will be a critical thread within this new tapestry, as climate change and the need for resources push humankind to find new approaches to economic development and sustainable growth. Although China, Brazil, Russia, and other emerging markets will drive much of this, India stands at the forefront with its rapidly growing middle class, massive investments in infrastructure, a technology-based culture, and growing need for energy and other natural resources. 

Many companies will benefit from the Next Wave, but some verticals will capture the lion's share of the growth and profits. Among the most significant of these "Next-Wave Verticals" are media and entertainment groups. They are gaining importance in India because of the country's growing middle class, improving literacy rates and increasingly organized retail sector driving demand for print, radio, and TV content. Improvements in infrastructure and advances in technology are also rapidly increasing media penetration in rural areas of the country where more than two-thirds of the population resides. 

*Tapping into the "Teenager Effect"*

Advertising spending in India is roughly one-third of that in the U.S. and Europe, but that's rapidly changing as retailers find competition growing and consumers become more sophisticated and discerning in their buying decisions. There are now more Indian homes with television sets than homes with telephones. India's 119 million television households comprise about 60% of the total households in the country. About 50 million receive cable-television services, leading to a penetration of about 42%. The television-distribution market consists of revenues generated by companies that distribute television programming to viewers. This includes spending by consumers on subscriptions to basic and premium channels delivered by cable operators, satellite providers, or Internet protocol television (IPTV) services, as well as on video-on-demand (VOD). 

The Indian DVD market now exceeds 1.5 billion units per year. This figure is expected to grow to 4.5 billion units per year by 2010. The explosive growth in DVD sales also is attributed to the predominance of single-TV households. However, this is expected to change as rising incomes and a large pool of teenagers fuel mushrooming growth of multiple-TV households, commonly known as the "Teenager Effect." These factors will continue to drive high revenue growth and profitability for such media and entertainment companies as TV18, ENIL, and D.B. Corp., which are leaders in this space. 

Private education will also ride India's Next Wave as an aspiring population seeks to give its children and itself the greatest opportunity to succeed and prosper in the new economy. With the exception of the world-renowned Indian Institutes of Management & Technology, the Indian public school system has proved to be a dismal failure. As a result, Indian citizens of all socio-economic brackets have looked increasingly to the private sector for their education needs. 

*All Eyes on Manipal Education*

As with other Next Wave Verticals, technology and infrastructure have fostered the rapid expansion of private education as Internet-based learning programs create opportunities for distance-learning, and improvements in communications and roads have created new education institutions in rural areas of the country.

Private education in India is growing more than 30% per year, and the profitability of this sector exceeds that of most North American institutions. Companies like Manipal Education are at the forefront of this growth as they continue to develop innovative solutions to meet the increased demand. 

Environmental services is becoming one India's the fastest-growing Next Wave Verticals, as an increasingly industrialized economy and wealthy population elevates the need for clean air and water and the recycling of scarce natural resources. The Indian government is looking to the private sector to build and manage numerous aspects of environmental services to include waste-water treatment, hazardous waste disposal and air-quality control systems. Considering that approximately 70% of India's cities do not have adequate waste-water treatment, the financial opportunities in this area alone are significant. India's carbon-credit market is currently valued at $5 billion and is expected to double to $10 billion by 2009. This will create a significant opportunity for carbon-capture equipment and for environmental consulting services that focus on reducing greenhouse gases. 

Renewable energy is a global issue that could define India's long-term economic success. India has very little in the way of crude oil reserves and finding new fields will become a costly proposition. As India's economy continues to grow, so will its energy needs. Developing renewable sources of energy is a national priority. Renewable energy only accounts for about 5% of India's total energy consumption. The Indian government has set a goal of generating 50% of the country's energy needs by 2050. This will require massive investments in a wide range of renewable energy sources. 

*Moser Baer Photovoltaic Planning an IPO*

India is already developing technical and manufacturing leadership in several areas including wind, solar, and biomass. Suzlon Energy, a publicly traded Indian company, is now the world's fifth-largest wind energy provider, and its ranking is expected to climb in the near future. Moser Baer Photovoltaic, which is planning an initial public offering in 2009, is becoming a global leader in the development and manufacture of thin-film solar technology. And Bhoruka Power has become a leading player in the small hydro segment for power generation in India. 

But the largest manufacturer of agricultural vehicles in India, Mahindra & Mahindra, is taking the lead in biodiesel. In February, 2007, the company introduced versions of its two most successful sport-utility vehicles, Scorpio and Bolero, which run on biodiesel. Scorpio is the first Asian vehicle in its class running on 100% biodiesel. 

Mahindra also unveiled a biodiesel tractor for the first time in India. The company had set up its own biodiesel plant in 2001. It completed extensive studies and worked with IIT Kanpur, a leading Indian technology institute recognized globally, and the R&D center of Indian Oil Corp. Mahindra is also simultaneously working on its vehicles' fuel adaptability and trying to position itself for when India matures to the point of requiring better fuel sources. 

*Second Largest Producer of Sugar Cane*

That day may not be far off, as India is the world's second-largest producer of sugar cane, which is a preferred source for ethanol. Renewable energy will provide investors and joint venture partners with significant returns during the coming years. And with opportunities in solar, wind, ethanol, and biodiesel, numerous global synergies are emerging exist between homebuilders, power companies, and automotive firms. Savvy investors and corporations already recognize the significant potential of the Next Wave. They know another wave like this won't crest for another 20 years or 30 years, and they're eyeing opportunities to capitalize on this unique opportunity. 

*William Nobrega is president and founder of The Conrad Group, a global professional-services firm that focuses on emerging markets and technologies. It provides a complete spectrum of strategic planning and mergers-and-acquisitions facilitation services to Fortune 500 and leading regional companies worldwide. The firm is dedicated to maximizing the success of market leaders in international markets. Mr. Nobrega is the author of Riding the Indian Tiger: Understanding India the Worlds Fastest Growing Market, published by John Wiley & Sons. Mr. Nobrega is currently working on his next book, entitled The Next Wave: How Investors Can Ride an Era of Unprecedented Economic Growth and Innovation; it will be released in 2009. For more information, visit The Conrad Group.*


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## nitesh

Mohammed Azizuddin said:


> 'India created more jobs in US than US did here'
> "We are not going to get everything," he acknowledged. "No country is going to get everything, but no country is going to give away everything."
> Source:'India created more jobs in US than US did here'


Hmm that's quite smart and assertive statement. mr. kamalnath has put a very good statement


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## Neo

*Indias inflation hits seven-year high​*
NEW DELHI, June 13: Indias inflation hit its highest level in over seven years on Friday, stoking expectations of more interest rate hikes that could slow growth and piling pressure on the government as elections loom.

Annual inflation rose to 8.75 per cent for the week ended May 31 the highest since February 2001 from 8.24 per cent a week earlier, according to the Wholesale Price Index, Indias most watched cost-of-living measure.

The increase, driven by higher prices for food, vegetables and manufactured goods like textiles, fed expectations of further monetary tightening that could dampen economic growth in the worlds second fastest-expanding economy.

The central bank will try to anchor, reduce inflationary expectations, said Dharma Kriti Joshi, economist at Crisil credit rating agency.

The data came two days after the central bank hiked its leading lending rate, known as the repo rate, by a quarter percentage point to 8.00 per cent, a six-year high.

The latest inflation jump exceeded analysts forecasts of 8.28 per cent and was a blow to the government, which desperately wants to tame prices, fearing a voter backlash in national elections due by May 2009.

Inflation could reach double-digits as soon as next week when a sharp hike last week in state-set fuel prices starts being included in the data, analysts said.

The government dithered for weeks about hiking fuel prices, worried about losing voter support, but finally said state oil firms could no longer sustain huge losses caused by record global crude costs.AFP

Indias inflation hits seven-year high -DAWN - Business; June 14, 2008


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## Flintlock

*India to build 43 new IT cities in 10 yrs*
16 Jun 2008, 0004 hrs IST, Mahendra Kumar Singh,TNN


NEW DELHI: The IT industry's footprint looks set to expand beyond its existing homes.

Faced with a challenge from upstarts threatening to erode India's low-cost appeal, the government is planning to build 43 new information technology cities across the country to retain its top dog status in the business and to be in a position to tap the huge surge in demand for IT-enabled services over the next 10 years.

The move comes at a time when the rising infrastructure and employee costs in big cities is threatening to blunt India's crucial cost advantage.

While India has held on to its pre-eminent position, its IT and BPO companies are losing their global cost advantage with the emergence of countries like Vietnam and the Philippines, which offer similar services at cheaper rates and are threatening India's status as the world's back office.

As the allure of BPO jobs goes down and attrition rates go up, companies are increasingly finding it difficult to recruit quality employees in the big cities. Also of concern is infrastructure constraints in Bangalore, Gurgaon and elsewhere.

The plan to build brand new towns is designed to address some of these issues. It is felt that these new towns will provide a steady supply of workers besides being specifically geared towards the needs of the IT and BPO sectors.

The proposal, suggested by a high-level group on service sector, has been cleared by the Planning Commission. "The modalities for the ambitious plan will be finalized very soon," a source said.

According to the plan, each IT city will be set up in an area of more than 500 hectare. The cities will altogether generate employment for around 3.5 million people by 2018.

The proposal is to create self-contained satellite townships with commercial space for renting and a commensurate increase in residential accommodation, education, healthcare, retail and recreational facilities.

"Improvement in infrastructure is very important to ensure the continued competitiveness of IT and BPO industries," an official said while explaining the rationale behind the move.

At present, the major volume of IT-enabled services is concentrated in seven cities  Bangalore, Chennai, Mumbai, Hyderabad, Kolkata, Gurgaon and Noida. Government estimates point out that 95% of the IT and BPO service industry is in these cities, with around 36% of services concentrated in Bangalore alone.

According to officials, the IT and BPO business in the country is likely to grow by 2.5 times in the next 10 years. The growth cannot be absorbed in major cities.

As infrastructure in major cities is already under tremendous strain, the IT sector has started migrating to smaller cities. However, the volume of business in the IT sector likely to come to India is huge which even tier II & III towns are unlikely to handle, considering poor infrastructure.

Under the ambitious proposal, the government plans to shift 40% of the business to the upcoming 43 cities by 2018.

The new towns will be properly planned and laid out and endowed with modern infrastructure and good connectivity to the big cities and airports.

These townships will have residential and work areas with all essential services - water supply, power, civic amenities, health, education, transport and entertainment - to meet the civic and commercial needs of the workforce.

The Centre has sought the support of state governments in facilitating creation of these new towns. The proposal suggests that the towns will be developed by private players and state governments will ensure trunk services like electricity, water supply, sewage and drainage.

India to build 43 new IT cities in 10 yrs-India-The Times of India


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## nitesh

an article on mukesh BHAI

http://www.nytimes.com/2008/06/15/b....html?_r=1&partner=rssnyt&emc=rss&oref=slogin

quite lengthy, so I just posted the link


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## nitesh

The Hindu Business Line : Farm loan waiver: An ill-conceived package

Farm loan waiver: An ill-conceived package

While the damage caused by the ill-conceived loan waiver scheme cannot be undone now, the government should immediately initiate measures to rejuvenate agriculture.
S. D. Naik

The substantial expansion of farm waiver package by the UPA Government from Rs 60,314 crore announced in the Budget to Rs 71,680 crore reflects its growing loss of nerve with approaching elections. This announcement has come closely on the heels of bringing political pressure on the State Bank of India to withdraw its internal circular to branches to temporarily suspend new loans to tractors and power tilling equipment segment following mounting non-performing assets (NPAs ) in the segment.

The loan waiver scheme has now been enlarged to include plantations and horticulture, allied agricultural activities such as dairy and poultry farming, as well as investment credit for purchase of tractors and bullocks, deepening of wells etc. Moreover, as recommended by Mr Rahul Gandhi, the scheme will now include bigger farmers with more than five acres of land in dryland areas.

The Government has decided to create a Farmers Debt Relief Fund, with an initial corpus of Rs 10,000 crore. The Finance Minister has also stated that Rs 40,000 crore (instead of Rs 25,000 crore) will be provided this year towards the debt waiver scheme. The future installments will be in subsequent Budgets until 2011-12.

ILL-CONCEIVED
Clearly, the massive loan waiver scheme is ill-conceived from several angles. For one, it will impose a huge additional fiscal burden at a time when global crude prices have gone through the roof and the Centre will have to provide for hefty increases in salaries of its employees under the Sixth Pay Commission award.

Moreover, with the National Rural Employment Guarantee Scheme (NREGS) having now been extended to al the 600 districts of the country, the Centre will have to provide more funds for the scheme. Second, it is grossly iniquitous in that it leaves out nearly two-thirds of the farmers who have borrowed from private moneylenders.

Moreover, it will make the farmers who repaid their loans in time, feel betrayed and affect the carefully nurtured credit culture. Already, many banks are finding their farm sector NPAs rising because of non-repayment of loans.

Third, it is a one-time benefit to only a small section of farmers who borrowed from institutional sources and is no substitute for the substantially higher investments needed in agriculture and rural infrastructure on a sustained basis.

Even after the announcement of the expanded package, an overwhelming majority of affected farmers feel left out and new demands and suggestions have been coming from different States every day. In fact, the State government has now announced its own package to include some of the left-out farmers. Thus, as the Magasasay award winning journalist, Mr P. Sainath has aptly put it: The UPA Governments waiver is no solution to even the immediate crisis, let alone long-term agrarian problems.

PRAGMATIC ALTERNATIVE
A pragmatic alternative for the Government would have been to implement some of the recommendations made by the Radhakrishna Committee on Rural Indebtedness. The Committee had suggested several remedial measures to tackle the serious problem of rural indebtedness. However, loan waiver did not find a place in its report.

After noting that more than half of the farm households do not borrow from institutional sources and that they pay usurious rates of interest on borrowings from moneylenders, the Committee wanted the banks to grant a one-time term loan to such farmers to free them from the clutches of moneylenders. It had also mooted a Moneylenders Redemption Fund with an initial corpus of Rs 100 crore to operationalise the scheme.

Some of the other pragmatic suggestions of the Committee included the rescheduling of loans, making available fresh loans and waiving of interest liability of borrowers for the extended period of up to two years (both for short and long-term loans).

The financial burden of this was to be equally shared between the Central and State governments. More important, the Committee had suggested that those who repaid their dues promptly must be rewarded.

Thus, rescheduling of loans could have been for a much longer period of three-five years, interest waivers, making available fresh loans on government guarantee, and finding some way to provide the much-needed relief to those indebted to moneylenders on the lines suggested by the Radhakrishna Committee, would have been a much better alternative.

WAY FORWARD
While the damage caused by the ill-conceived loan waiver scheme cannot be undone now, the government should immediately initiate both short and long-term measures to rejuvenate agriculture. And, as the Expert Group on Agricultural Indebtedness has suggested, rejuvenation of the farm sector lies in addressing basic structural, institutional and technological factors as also the restructuring of public support systems.

First and foremost, there is an urgent need to reverse the long-term declining trend in public investment in agriculture since 1980-81. There has been a sharp decline in the share of public sector gross capital formation (GCF) to 17.23 per cent in 1999-2000 from 43.2 per cent in 1980-81. Contrary to expectations, private investment failed to compensate for the drastic decline in public sector investment in the sector.

To overcome the resource constraint, funds allocated under Bharat Nirman and National Rural Employment Guarantee Scheme could be used to boost the asset base of the farm sector.

Serious efforts are needed to ensure that not only the institutional credit to the sector increases significantly, but that it reaches more number of farmers, particularly the small and marginal farmers. Though farm credit has shown a robust growth over the past few years, the number of farmers covered has not increased proportionately.

In this context, the suggestion of the Expert Group to make Micro-Finance Institutions (MFIs) an integral part of mainstream banking deserves consideration.

The banks should be asked to provide resource support to MFIs on the condition that they moderate their interest rates and abide by ethical banking practices. This will immensely benefit the vast majority of small and marginal farmers who have no access to banking institutions at present.

The other areas requiring urgent attention are the strengthening of Research and Extension Services and risk mitigation measures such as crop insurance, weather insurance, price risk mitigation and expanding the livelihood opportunities for the rural population outside the farm sector.

Far-reaching changes are also needed in the land use pattern, water management, reclamation of waste-land and selection of crops to suit the environmental needs. Organic farming also needs a closer look to make agriculture sustainable.


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## nitesh

And some good news 

India's GDP to grow at 9.5% in FY'09: CMIE- Indicators-Economy-News-The Economic Times

India's GDP to grow at 9.5% in FY'09: CMIE
16 Jun, 2008, 2016 hrs IST, PTI

MUMBAI: India's real GDP is expected to grow at an impressive 9.5 per cent in FY'09, the Centre for Monitoring Indian Economy said in its monthly review here. 

The Indian economy is heading towards the fourth consecutive year of an over 9 per cent growth and like in the last five years, growth this year too was expected to be driven by capital investments happening in India, CMIE said. 

As per CMIE CapEx Service, projects worth Rs 3.4 lakh crore are scheduled for commissioning in FY'09. This would be the highest ever completion of investments in the Indian history, CMIE said. 

The current growth phase of the Indian economy is driven by the capital investment boom in the country. India's GDP started rising by over eight per cent since FY'04. And, the gross capital formation (GSF) grew in the range of 13-23 per cent during this period. 

CMIE expects growth in GSF to accelerate to 18.7 per cent in FY'09 from 13.4 per cent in FY'08. This robust growth in GSF is expected to more than offset the moderation in the growth in private final consumption expenditure (PFCE) and Government final consumption expenditure (GFCE). 

CMIE stated that the PFCE is expected to grow by five per cent in FY'09, after growing by 7-9 per cent in the preceding three years. While the slower growth in the PFCE would mainly be on account of the higher base last year, the prevailing high inflation would also affect the consumption demand to some extent. 

However, inflation is not expected to depress the PFCE dramatically as income levels in India have also gone up significantly in the last one year.


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## nitesh

something about modiji
Modi has a point-Right & Wrong-Swapan Dasgupta-Columnists-Opinion-The Times of India



> Last year, a prominent leader of Singapore gave Gujarat chief minister Narendra Modi some audacious advice: *"Keep aside your preoccupation with selling India. You will be better off marketing Gujarat."*
> 
> Contrary to what simple-minded nationalists may feel, this was not a coded signal for secession. * Why, the Singapore leader was asking, should Gujarat compromise its comparative advantage as a centre of entrepreneurship and prosperity for the sake of that India which doggedly refuses to enter the 21st century? Should the brightest student in a class be forced to dumb down to accommodate the dullard? *
> 
> The essence of democracy prevents Indian politicians from giving honest answers to such questions. Ever since "equitable growth" and "inclusive development" became consensual buzzwords, India's policy framework has been geared to target the last person in the last row. On paper this sounds noble but the reality is less appetising. In the guise of giving a leg up to the needy, we have punished enterprise, rewarded criminality, indulged mediocrity and brutalised the vulnerable. The Incredible India of smiling peasants and the Fab India-kitted woman prancing about on a Rural Employment Guarantee picnic  a la the ads during the IPL telecasts  exist entirely in the imagination of demented propagandists.
> 
> The mindless attachment to failed mantras has blunted the politicians' capacity for innovative thinking. This may be a reason why Modi's plea to the Centre to let Gujarat enjoy complete fiscal independence for one year has been met with incomprehension or drawn a hysterical response  including the silly assertion that he be charged with sedition.
> 
> The chief minister's demand that revenues from Gujarat be largely spent on Gujarat is a radical departure from existing federal norms. * At present, the Centre collects the lion's share of all major taxes, including income tax and customs and excise duties, leaving the states with the crumbs from stamp duties, irrigation cess, tax on liquor and VAT on consumer sales. * A percentage of the central revenues are ploughed back to the states under the Finance Commission's guidelines. But the returns are never proportionate. Additionally, the Planning Commission doles out the capital expenditure on approved schemes.
> 
> The present system was centred on two principles: * the government in New Delhi should be a redistributive Centre and development should be centrally planned and not left to the market. The system worked without major hiccups as long as the Centre played the role of a neutral arbiter and until the public sector occupied the "commanding heights" of the economy. *
> 
> Both assumptions are no longer valid. While the market economy has ushered rivalry between states for private investments, fiercely competitive politics has forced ruling dispensations to be more responsive to voters. * At the same time, the growing mismatch between those who pay taxes and those who benefit from government expenditure has produced strains in places as far removed as Darjeeling and Mumbai. There is a feeling that revenues generated in the region are inadequately ploughed back and that the present system favours the inefficient. Likewise, there is dismay over the culture of non-accountability that governs grandiose schemes such as the loan-waiver and the NREGS. Some people, it would seem, pay their hard-earned money in taxes while a small, privileged minority squanders and loots it recklessly. Most important, the system is not geared to apportioning accountability for expenditure. A politician in, say, Jharkhand doesn't give a damn for fiscal rectitude because he knows that the funds at his disposal have actually emanated from somewhere else.
> 
> In saying that Gujarat should have a greater say in the money it gives to the Centre, Modi is not seeking sops and handouts. Shorn off its polemical flourish, it is a call for a new mindset that treats those who pay for nation building with respect. *


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## nitesh

Quite Interesting read:

http://www.parsintl.com/15963.pdf


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## Bushroda

nitesh said:


> And some good news
> 
> India's GDP to grow at 9.5&#37; in FY'09: CMIE- Indicators-Economy-News-The Economic Times
> 
> India's GDP to grow at 9.5% in FY'09: CMIE
> 16 Jun, 2008, 2016 hrs IST, PTI



Thats more than what WB has forcasted even for China. 

It would be surprising to see how it can be managed with $150/barrel fuel cost. Even 8.5% would be fairly optimistic. The mean according to many analyst ranges from 7.9% - 8.2% GDP growth this year.


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## Bushroda

*D.light hopes to shine in India*
*BUSINESS FOCUSES ON REPLACING KEROSENE LANTERNS WITH LEDS*

By Matt Nauman
Mercury News, USA
Article Launched: 06/16/2008 04:04:01 AM PDT

With their Stanford MBAs stuffed in their back pockets, Ned Tozun and Sam Goldman are leaving Silicon Valley for China and India to make the world a better place.

And to make money doing it.

D.light Design has a mission that sounds both straightforward and challenging: replacing the kerosene lanterns used by one-quarter of the world's population, or 1.6 billion people, with cheap, portable LED sources.

Kerosene, which often is burned in a glass bottle with a wick, is a "terrible solution" for lighting, said Tozun, D.light Design's president. People get burned. The light itself is dim, making work and studying difficult. It emits carbon dioxide, and causes respiratory ailments.

Goldman and Tozun will be selling three designs of light-emitting diodes, from $12 to $25 a piece, that can be charged with small solar panels or via electricity. A fully charged product will emit 12 to 40 hours of light, depending on the brightness setting.

The pair's idea, developed while they were studying for their master's degrees at Stanford University's business school, won a design competition at the school. That led to entering, and winning, the $250,000 Draper Fisher Jurvetson Venture Challenge contest in 2007. That prompted a variety of venture capitalists - traditional ones, Indian ones, ones concerned with both profit and social benefits - to come aboard.

Getting money from VCs - Tozun won't say how much has been invested - is unusual for a company like D.light Design. "But our social mission is really well-aligned with our profit mission," he said.

When Bill Reichert, managing director at Palo Alto's Garage Technology Ventures, first heard about D.light he figured it was one of those "venture/philanthropy, double bottom line, not-for-us kind of deals." But Tozun and Goldman convinced him that the size of the project might spawn a large, profitable company.

The managing director of an Indian venture firm said he invested in D.light because of the "humongous" size of the market opportunity.

"The founders are very passionate and committed and the product is very differentiated at that price point," said Suvir Sujan of Nexus India Capital Advisors in Mumbai.

Tozun will head the company's manufacturing and international-sales office in Shenzhen, China. He's moving there this week. Goldman already heads the company's sales and marketing office in New Dehli, India.

Reichert said the idea of two company principals being so far apart and so far from Silicon Valley is "a little nerve-racking for us, but they seem to be handling it brilliantly."

Perhaps that's because they share an international point of view. Tozun, who previously headed several start-ups, emigrated with his parents from Cyprus. Goldman's parents worked for the U.S. Agency for International Development, and he grew up in India, Pakistan, Peru, Rwanda and elsewhere. He also served in the Peace Corps for four years in Benin in western Africa.

D.light's initial focus will be India, where 72 million households are without electricity. Its growing economy means that some of these families are now ready to move away from the basics of kerosene light.

An unusual component of D.light Design's business plan is its d.light | give the gift of light link. Here, people can donate $30 to provide a light for a family, and get a photo and a story in return.

Tozun admits it'll be good publicity for the company, but it also will provide lights to the poorest of the poor who can't afford them.

"We are very driven by our social mission," he said. "Everyone we hire is passionate about providing families with better quality of life by providing better light. But that mission, I don't think can be achieved, unless we build a very successful business."

That means selling millions and millions of lights.
 
Right now, he said, the company has thousands of its products in use in India, and hundreds in Africa, where it's likely to expand in the future.

In Tanzania, for instance, 90 percent of the population uses kerosene fuel for lighting.


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## Bushroda

*Indian companies see risk as advantage: Study*
Michael Bradford
Business Insurance, IL
Posted On: June 16, 2008 3:09 AM CST

LONDONBritish companies are far less comfortable than Indian businesses in finding ways to use risk to give them a competitive advantage, a new study reveals.

The study, Threatening Skies: Risk in the Global Economy, was conducted by Datamonitor on behalf of BT Global Services, a unit of London-based communications company BT Group P.L.C. It surveyed 2,000 senior executives in the United States, United Kingdom, France, Germany, Spain, Sweden, Brazil, China, India and South Africa.

Among its findings, the study revealed that 99% of Indian companies view risk as a means of increasing competitive advantage, compared with 44% of British companies that feel that way. Eighty-five percent of Indian companies see risk management as a tool to foster innovation and creativity, whereas 34% of U.K. companies share that view.

A commitment by Indian companies to treat risk management as a core to business growth has led 90% to appoint a manager with overall responsibility for risk, the study showed. Only 14% of the U.K. companies in the survey had taken that step.

There are some well-established FTSE 100 companies working in complex environments who have to manage huge levels of risk on a daily basis, said John Dovey, president of U.K. corporates at BT Global, in a statement. 

 But, in general, U.K. companies tend to see the kind of risks associated with aggressive economic growth as something to avoid, while competitors in India have had to see them as something to manage.


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## Bushroda

*Yorkshire outshines rival for Bollywood glamour*
By Bernard Ginns, Business Editor
Yorkshire Post, UK
Date: 16 June 2008 

The region's tourist chief returned from this year's Bollywood film awards and announced: "Everyone said Bangkok was not a patch on Yorkshire."

David Andrews, the chief executive of Yorkshire Tourist Board, attended the Indian film industry's version of the Oscars last weekend in the capital city of Thailand.

The International Indian Film Academy 2007 awards took place in Yorkshire, which organisers said generated £8m for the regional economy on an outlay of £2m and global media coverage worth £40m. And compared to this year's bash in the Far East, it was a much better show, said Mr Andrews.

He told the Yorkshire Post: "Everyone I spoke to had a fantastic time (in Yorkshire]. The message we came back with was that we put on the best one ever. We achieved that. Everyone said we set the benchmark for IIFA."

He said the region has "a huge number of fantastic ambassadors" among the film stars, producers and directors of the Indian film industry.

Last weekend, he was at a press conference in Bangkok attended by Amitabh Bachchan, one of Bollywood's biggest stars.

"He was walking in," said Mr Andrews, "and he saw me, and despite his minders, he came over and said 'it's fantastic to see you and I'm really glad you put on such a great show'. He's three times bigger than Tom Cruise  people's think he's a god."

Intrigued by the attention he got from such a big star, journalists at the conference later asked Mr Andrews who he was and where he had come from.

Mr Bachchan was one of the star turns at last year's IIFA in Yorkshire. He launched the awards at Leeds Town Hall and described Yorkshire as "a wonderful part of the world" with "unbelievable warmth and affection".

According to Mr Andrews, the programme in Bangkok was very different. All the events took place at one location in a big city, in contrast to Yorkshire where the action was spread out across the cities, culminating with a glitzy awards ceremony at Sheffield's Hallam Arena.

This year's occasion was lost in the hustle and bustle of Bangkok, said Mr Andrews. "No-one knew it was really happening. They did not have as many stars as we had even though it was closer to India. Shilpa Shetty was not there. The number of fans was nowhere near as well. The buzz was not nearly as good as we had."

However, there were many positives from the trip, said the executive. He attended business networking events organised for the IIFA weekend and met with businesspeople, diplomats and politicians.

These contacts could help bring benefits to the region, he said. He met with the directors of Wizcraft, the company that organises IIFA, who expressed an interest in asking Yorkshire to advise on future events.

He said they would "use Yorkshire as a good example" to make sure future hosts meet the standards set by the region.

He said delegates from Toronto, Miami, New York, Egypt, Turkey, Paris, Dublin, Sydney and Malaysia attended IIFA business summits during the weekend.

"They were all trying to learn how Yorkshire did it," said Mr Andrews. "Some of them  Toronto, Dublin and Sydney  indicated they would like to take it a bit further."

"I also talked to the minister of culture and sport from Thailand, the Indian ambassador and the minister for tourism and sport for India about the 2012 Olympics and potentially using Yorkshire for team camps. I got the message across."

The Leeds Metropolitan University sent 75 students and staff to work as volunteers in Bangkok.

Joy Kumar, a director at Leeds Met, said: "UK-based staff and students from a diverse background were joined by students from Hong Kong and India, who worked alongside colleagues from Wizcraft, the global events management company, responsible for delivering the IIFA weekend.

"Volunteers held key roles including assembling the sets, camera operation, security set-up, auto-cue operation, TV and media control and future delegate management.

"The IIFA celebrations in Bangkok had the slogan 'Amazing Thailand, Amazing IIFA'. By the end of the festivities, many were saying, 'Amazing Thailand, Amazing IIFA, Amazing Leeds Met'.

"The university's volunteers were outstanding ambassadors not only for Leeds Met but for Yorkshire."

Mr Andrews added: "There was a big contingent of Yorkshire people  there were Yorkshire accents everywhere."

Yorkshire Forward said it spent £2.5m putting together the region's bid for the awards and marketing campaign.


----------



## Bushroda

*Sky's the limit for Bangalore* 
*Small airports to pop up around Bangalore* 

By Harsha Pramod
16 June 2008 05:48 

An executive visiting Bangalore for the launch of a new project said, Ah, the airport! This echoes the feeling of most of the frequent fliers. Almost every visitor to Indias silicon city would complain about the distance from its new airport at Devanahalli. Its a good 35 kilometres from the city and takes at least two and a half hours and the passengers are annoyed, to put it mildly.

Captain Gopinath, managing director, Deccan Aviation, did not miss the opportunity. Gopinath is well known as someone who dared to take the road less traveled by and made all the difference. Gopinath was instrumental in bringing more people to airports by offering low-cost flight services with his motto Every Indian can fly. Many people travelled by Air Deccan by paying as low as Rs.99 ($2.30) to Rs.500 ($11.60) . Now he recognises the corporates concern about the distance and time. At the same time, they did not want to shift their base from Bangalore.

Currently, Deccan Aviation is in the process of offering the intracity helicopter shuttle service to connect three major centres in the city from the helipads located in UB City, Palace Grounds and Electronic City to the airport. The trip that takes nearly two and a half hours would take only about 15 minutes. The plan has generated considerable interest from the IT giants. Deccan Aviation had earlier announced that the service would start with the commencement of the new airport at Devanahalli. However, it has not taken off yet. According to sources at Deccan Aviation, the service is expected to take wings in a couple of weeks as it is still awaiting clearance from authorities.



Use of private jets and helicopters by major players in the industry has seen unprecedented increase recently. Mukesh Ambani, the worlds richest man, who surpassed Bill Gates to reach this position, was in the news for buying his wife a private jet for her birthday. The Airbus 319 corporate jet is believed to have cost Rs.242 crore ($56.4m) with entertainment cabins, a sky bar and fancy showers, reported the Business Standard.

Mukesh was also fined Rs. 2.43 lakh ($5,660) by the Municipal Corporation of Greater Mumbai (MCGM) for proceeding with the construction of a helipad at his Mumbai home without consent from the authorities. In contrast to this high-flying lifestyle, we also have Narayan Murthy, who used to travel by economy class and has also travelled by the low-cost carrier, Air Deccan. It can be attributed as being stingy or being principled or attempting to set an example to others.

Ministers are a group that uses helicopter services frequently and many got into trouble in this regard. Recently, Jharkhand Chief Minister, Madhu Koda, issued an advisory regarding this. The ministers in Jharkhand will now use helicopters only once a month to save fuel.

The rules and regulations regarding allow all ministers, including ministers of state and deputy ministers to use state-owned helicopters and aircrafts free of charge, subject to availability. The Deputy Chief Minister, Stephen Marandi, who is in charge of finance said that the decision was taken at the request of the finance department.

Since the helicopter shuttle service caters to only a very small minority, techies dont think much about it. This concept is a contrast to what the lower rung of the industry is going through now. The newspapers sure convey the message that the industry is on a cost cutting drive, with Times of India discussing the issue of toilet papers and face tissues disappearing from the dressing rooms or being replaced by cheaper ones. The software industry does have its eccentricities. While at one end, the corporate heads go for high-end services such as helicopter shuttle services, at the other end they cut down on toilet paper.

In spite of the shifting of the airport to Devanahalli, the road towards the Electronic city, where major IT companies are housed is still buzzing with traffic. The parallel road that leads to the city is comparatively empty. In the evening, the trend reverses. As usual, techies wait impatiently for the traffic to clear at the signals. They would as always hop into the company buses or bikes or cars. Those who wish to go green opt for bicycles or car pooling. Websites such as www.commuteeasy.com has been encouraging car pooling and even bike pooling to ease the traffic and also cope with the recent hike in fuel price.

While most of the software engineers, both seniors and new entrants, are not much worried about losing their jobs, they are bright enough to be cautious. The insurance industry reflects the situation as it feels the pinch from the uncertainty in the software industry. According to an executive with a leading multinational insurance firm, the software engineers are not actively into investment now. The senior engineers have seen many seasons and dont see imminent danger and prefer to stay where they are.

For inter-state travel, many software executives prefer to drive down to nearby cities or even take the train. A software engineer who travelled to Chennai by train for his visa interview said that his trip by rail was good and would not opt for flying in these routes. He said the air conditioned compartments are very comfortable and he wasnt tired at all. He said a trip to Devanahalli and back would have been very stressful as it would mean a lot of waiting for boarding the flight and time wasted commuting. By train he could get off at a railway station near his home and could simply take an auto rickshaw home. But then for the corporate heads and top officials, it is for each his own.

Come what may, the Bangaloreans are always willing to adapt and adopt. They have witnessed unprecedented growth and have watched with awe its growth from pensioners paradise, a calm city, to Indias silicon city, bustling with activity. The HAL airport saw huge air traffic and aircrafts waited for their turns to take off like any other vehicle on the roads. In the immediate future, it may not be too much to imagine helicopters and small chartered planes filling Bangalores sky. With Bangalores infrastructure struggling to cope with its growth, for Bangaloreans, it will not be surprising to see several small airports developing in and around Bangalore in the near future.


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## Bushroda

*Volex chief says success in India is 'tip of the iceberg'*
*Analyst fears downturn may force company into restructuring*

By Claire Shoesmith
Crain's Manchester Business, UK
June 16, 2008

Earlier this month Philip Sparks, an analyst at Evolution Securities, changed his recommendation on cable manufacturer Volex to sell from reduce, saying the Leigh-based company is in a tricky spot. 

The slowdown in consumer, telecoms and aerospace markets is pressurising revenues, commodity price volatility continues to disrupt Volex's ability to budget and restructuring demands suck in yet more cash, Sparks said, adding that there is little going on at Volex to find cheer about. He also cut his share price target from 80p to 60p, implying a 25 per cent decline from the current price.

*Overly optimistic*

Volex chief executive Heejae Chae begs to differ, however. He admits that the company, whose headquarters are in Leigh, may have been overly optimistic in its outlook  it was forced to issue two profit warnings ahead of last week's results. But he said there was still plenty of potential, particularly in India and China. In fact, he expects revenue from the Indian operations to double again in fiscal 2009 after doubling in the year ended March 2008. 

This is just the tip of the iceberg, he told Crain's last week after revealing a slump in full-year pre-tax profit to £1.7m thanks in most part to a £2.7m restructuring charge and production problems at the wiring harness division, which makes electrical systems for commercial vehicles and aerospace applications. We are excited about moving into other areas in India and developing a full supply chain in that area.

According to Chae, the margin achieved in India is 10 per cent higher than elsewhere in the world and as a result he is particularly keen to expand there. 

In the year ended March, Asia and South America accounted for 37 per cent of the group's total revenue, with 24 per cent coming from North America and 14 per cent from the UK. 

The growth in the current year is expected to come from India and China as problems in the global economy stall orders from electronics companies in the US. 

Volex, whose main power products business makes power cord cables used in products such as Dell laptops (about 90 per cent of all sold) and Apple iPhones (about 80 per cent), has undergone a three-year long restructuring programme which has seen significant job losses, manufacturing processes being moved overseas and a £16m fundraising.

*Restructuring*

It is still not in much better shape though and Sparks said that if revenue does not pick up soon  it increased just 4.4 per cent in fiscal 2008  the company could be forced into yet more restructuring. 

Chae refused to be drawn on this, but said that 13 facilities is too many for a company with revenue of £260m, implying that more sites  it is currently in the process of closing two  will be shut. 

Despite all this, Sue Cox, an analyst at ABN Amro, described Volex has an interesting longer-term opportunity, saying that following the aggressive and successful reduction of its cost base it has now repositioned itself into growth segments of the market.


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## Bushroda

*India's economy - reasons to be cheerful* 
By Kaushik Basu, Professor of economics, Cornell University 
BBC, UK 

*Oil and food shortages combined with rising inflation have created a sense of economic crisis in India and the mood is beginning to turn grim.* 

While the nation's growth rate even till last year has been a handsome 9% there is some indication that this will decline. 

Current inflation is not only the highest in the nation in the last eight years, but the rate at which the inflation itself is rising (the inflation of inflation) is extremely high. 

It is likely that within the next few months the inflation rate curve will cross the growth rate curve. This has not happened in a long time and adds to the concern. 

Is this just a passing cloud or a foretaste of the end of what has over the last four or five years been widely touted as India's economic take-off? 

*Persistent flaws* 

Predicting economic trends is always hazardous, but if one went beyond the headlines to the data, there would be reason to conclude that the long-run prognosis for India continues to be good. 

This will entail some skilful policy crafting and so, in making this forecast, I am keeping my fingers crossed that the government, no matter which one it is 2009, will be astute enough to do it right. 

The analysis is predicated on two broad "facts". 

First, while there are important and persistent flaws in India's policy regime, this particular crisis is not its own doing. It is a global phenomenon that has washed up on the nation's shores. 

This therefore compares with the downturns of 1997-1999 and 1972-1974, when there were major global crises and India was hit by them. 

The 1972-4 crisis is of particular relevance, since that was also caused by a steep rise in global oil prices. 

It was a classic case of stagflation. Prices rose rapidly and growth slowed down. India's inflation rate at that time had inched towards (but never reached) 20%, and that remains the record for independent India. 

The 1997-9 crisis, which started in East Asia, also caused a slow down in India's growth rate, which had reached 7% per annum for three years before that and dropped down to 4.5% in 1997. 

But these happened when India was a much more closed economy. 

There is reason to expect that we will be rocked much harder this time, since the nation is much more open now. 

I should hasten to add that this must not be construed to be a case for keeping the economy closed. 

The vastly higher growth that India has enjoyed since 1994 is largely because of the more open policies. 

To close the economy would amount to opting for perpetual poverty in order to avoid the crisis of occasional poverty. 

The second reason for optimism is that India is today one of the highest investment economies in the world. 

It saves and invests around 35% of its national income. This is a recent feature of the Indian economy and is comparable to the best-performing East Asian countries. 

*Judicious mix *

Arguably no other macroeconomic variable correlates with a nation's growth rate as well as the investment rate - this augurs extremely well for India's long run growth. 

The catch however is in the qualifier "long run". The next year is likely to be very tough on the nation since inflation in a poor country is a curse. 

So many Indians live so precariously close to subsistence that inflation can easily tip them over the edge. In the immediate run, the government has to use a judicious mix of market interventions to protect those who are the poorest. 

In the longer run much will depend on how well we can create jobs to absorb the surplus labour. 

This cannot be done by government alone through subsidies and public-sector jobs. 

We need to craft policies to encourage the private sector to expand and use more labour. 

This requires three critical changes: better infrastructure, less bureaucracy and more flexible labour laws, which allow for different kinds of contracts and permits firms to lay off workers when demand is slack. 

Research shows that policies that making it easier to lay off workers, somewhat surprisingly, create more net employment. 

What can destabilise growth is political instability and nothing fuels this more than when large segments of the population feeling left out of the mainstream. 

Hence, poverty and unemployment need combating urgently. 

A crisis can be an opportunity. 

It was the crisis of 1991 that set India on the path of reform. The present global crisis will mean that firms and corporations in industrial nations will look for ways to cut costs. 

If a poor country like India can put its house in order and be pro-active in the global market, it can be a critical player in helping corporations cut costs. At the same time it would improve its own economic prospects. 

So expect some belt tightening, but don't expect the trousers to fall down.


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## Bushroda

*Indian inflation likely to hover at 8 to 9%*
By Surojit Gupta and Charlotte Cooper
Business Spectator, Australia

NEW DELHI -- India's headline inflation rate is likely to hover at 8 to 9 per cent for some time and will hit double digits before declining in the last quarter of calendar 2008, its chief statistician said. 

India's most widely watched inflation measure, the wholesale price index (WPI), is already at a seven-year high of 8.75 per cent, and the central bank unexpectedly raised its key lending rate last week to 8.0 per cent in an effort to calm prices. 

Economists expect the impact of a hike in government-set fuel prices early in June will push the WPI to a 13-year peak above 9 per cent this month and possibly to 10 per cent. The early June data is due this Friday. 

Pronab Sen, secretary at the ministry of statistics and programme implementation, told Reuters in an interview primary price increases had been factored in but second-round increases were now coming through into the inflation numbers. 

"Numerically, I suspect it's going to hang around at somewhere between the 8 and 9 per cent mark for a while," Mr Sen said. 

Asked if inflation would reach double digits, Mr Sen replied: "It will touch it but it's not likely to stay there for very long." 

Rising costs of raw materials, food and energy worldwide have stoked prices in Asia's third-largest economy, prompting the government to ban some exports and slash some import duties to keep supplies up and prices down. Policy makers have not put a number on where they expect inflation to peak although some have said any significant decline was most likely months away. 

Mr Sen is the first to say it could touch double digits. 

It is well above the central bank's comfort zone of 5.5 per cent and is posing a major policy headache for the communist-backed ruling coalition in the run-up to key state and federal polls later this year and in 2009, as rising prices hit the poorer members of the population the hardest. 

*Back to trend* 

India's economy grew 9 per cent in the fiscal year which ended in March and Mr Sen said growth was moderating. 

"Now we are starting to taper down to the trend and the trend would be somewhere between 8 and 8.5 per cent. So I suspect we'll be there somewhere." 

But he added that with inflation and efforts to control it, as well as a global slowdown, growth might drop below trend. 

"We might actually overshoot on the downward trajectory a little bit, so we might dip slightly below 8 per cent but eventually we'll catch up." 

The economy has averaged 8.8 per cent in the past four years. The central bank expects it will expand at 8-8.5 per cent this fiscal year to March, while some economists and policymakers say it could be lower. 

On prices, Mr Sen said the peak would depend on how soon demand was compressed and when new industrial capacity came on stream. 

"So I'm really looking at the last quarter of the calendar for it to start coming down." 

Demand was hard to gauge because of lack of data but there was some evidence of moderation in fast-moving consumer goods and white goods, he said. 

Except for steel, capacity was being created across sectors, including pharmaceuticals, auto components, autos and cement, while capital goods, such as engineering plant and machinery, had gained in strength after a late start to capacity addition in 2006. 

Inflation eased quickly in late 2007, dropping to just above 3 per cent, and Mr Sen said that base effect would give the headline rate an artificial "push-up" at the same time this year. 

Where it ended the fiscal year next March would depend on the government's policy on domestic fuel prices, he said. 

"A lot depends on what is done on oil prices and that's a policy matter," he said.


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## Bushroda

*John Lamb: Birmingham would do well to follow India's dynamic lead*
By John Lamb 
Birmingham Post, UK
Jun 17 2008 

It was a bizarre experience.

We were in the heart of the West Indian state of Rajasthan protected from the sun by the wooded slopes of the Aravalli mountain range. In front of us was a scene of medieval vintage. 

Clay-coloured water was being drawn from the depths by an ox-driven contraption. A huge wheel with buckets attached by rope scooped up the water far below and delivered it into a channel irrigating the fields.

Nearby were straw huts. Young girls in brightly colour saris walked past on their way to market. They carried large wicker trays on their heads piled high with apple and custard fruit - so called because that is exactly how it tasted.

We were beckoned into one of the huts. I ducked through the cloth "door" to be greeted by a young man doing business - on his mobile telephone.

The sight assaulted the senses. You would have thought the only form of communication in these remote parts was by donkey. Not so. The mobile was functioning perfectly.

I was reminded of this scene when I received notification from Mike Loftus, manager of Locate in Birmingham, about an event which asked: India - the world's most dynamic country?

Today Birmingham will welcome a delegation from the Confederation of Indian Industry (CII), who are here to attend a seminar aimed at expanding the business opportunities provided by India's fast-growing economy. 

The CII is an employers' organisation and the Birmingham delegation are all senior figures within Indian business. 

Whether it's the world's most dynamic economy or not, India is still a country full of surprises and contrasts. You can walk along a village street with open sewers running on each side. Cows and goats roam freely while people in the nearby houses watch Sky television.

So is India the world's most dynamic country? If it is, it marks an amazing turnaround from the days when Mahatma Gandhi was leading the campaign for independence that was to lead India to world status. 

For Gandhi, simplicity was a way of life and he took to wearing his signature dress of a simple Indian villager. In 1930 he had caught the eye of Winston Churchill, who then vehemently opposed Indian independence and expressed his displeasure, saying: "It is alarming and also nauseating to see Mr Gandhi, a seditious middle temple lawyer, now posing as a fakir of a type well known in the east, striding half-naked up the steps of the vice-regal palace - while he is still organizing and conducting a defiant campaign of civil disobedience - to parley on equal terms with the representative of the king-emperor."

When the British invited him for talks in London in 1931, Gandhi saw no reason to change his attire. He told the immaculately-dressed viceroy Lord Irvin: "I have caused a great deal of trouble for your government. But as men, we can set aside our differences for the welfare of the nation." 

History shows that independence was granted in August, 1947, despite Churchill's strident opposition. What would he have made of events today?

An Indian company has taken over the great British marques Jaguar and Land Rover; immigrants from the sub-continent made a huge impact on the United Kingdom, changing forever our perceptions, our culture and our food; people of an Asian background will be largely responsible for Birmingham becoming the UK's first non-white majority city in a few years.

When I was last in New Delhi, a huge digital counter was clicking away every second. It was recording the number of births in the country as they happened and was designed to make people aware of the need to control the population in a country that is still an incongruous mixture of the medieval and the hi-tech. 

The number then was just short of a billion. It is now well past that.

I felt at the time that if this country could get its act together it could become one of the most powerful in the world. Today that eventuality does not appear far away. But is India the world's most dynamic economy? Maybe not yet. 

My friend in the straw hut is probably now tapping away on an Apple MacBook Air. And Sir Winston is certainly turning in his grave.


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## Bushroda

*India has "exciting growth potential" but must work harder: Goldman Sachs*
*Investment bank outlines 10 things for India to improve upon, in order to grow 40 times by 2050*

By Sanjay Kapoor
IBTimes India, CA
17 June 2008

Global investment bank Goldman Sachs has suggested that the Indian economy has the potential to grow 40 times bigger by 2050 but it has to work harder to achieve its potential.

According to Goldman Sachs' global research report on 'Ten Things for India to Achieve its 2050 Potential,' the world's second fastest growing economy has the potential to even outgrow the US economy by 2050 provided it pay attention to the following ten fields: [1] *improve governance *[2] *raise educational achievement *[3] *increase quality and quantity of universities* [4] *control inflation* [5] *introduce a credible fiscal policy* [6] *liberalize financial markets* [7] *increase trade with neighbors* [8] *increase agricultural productivity* [9] *improve infrastructure* and [10] *improve environmental quality*.

"Delivery of all these and more would ensure strong, persistent, medium-to-long-term growth, allowing India to reach its amazing potential," the report, written by Jim O'Neill, head (global research), Goldman Sachs, and Tushar Poddar, vice president (research), Asia Economic Research Team, Goldman Sachs India, said.

"Without better governance, delivery systems and effective implementation, India will find it difficult to educate its citizens, build its infrastructure, increase agricultural productivity and ensure that the fruits of economic growth are well established," the report said.

At the same time, "raising India's educational achievement is a major requirement to help achieve the nation's potential," the report continued, adding, "A major effort to boost basic education is needed."

However, India must not stop at that. Better quality of higher education is needed and India must also increase the number of universities, which are of world standard, it said.

In the wake of inflation hitting a 7-year high rate of 8.75 percent, Goldman Sachs said it is high time that "formal Inflation Targeting (IT) should become a centerpiece of a clearer, more defined and credible medium-term framework for macroeconomic stability."

"As part of this, greater independence for the Reserve Bank of India (RBI) and the abolishment of all FX (foreign exchange) controls are recommended," it said.

The report also warned that India's fiscal deficit is growing at an alarming rate and the overall government deficit which "stood at just under 6 percent in FY2008," may "accelerate to above 7 percent" in FY2009, "due to a large debt-waiver for farmers, a big wage hike for civil servants, increasing fertiliser and oil subsidies, and higher exemptions on income tax."

The report noted that the Indian government's expenditures are directed towards wages and subsidies instead of being directed towards productive investment like health, education and infrastructure, which could enhance growth. "A medium-term strategy for fiscal policy, which reduces the overall deficit to a sustainable level, is critical for India," the report said, before the "already high government debt...becomes a key source of macro vulnerability."

The report has also suggested that the financial markets in India be liberalized as they are still small and underdeveloped. "The state still dominates the sector, holding 70 percent of banking assets, a majority of insurance funds and the entire pension sector. Additionally, markets are lacking in corporate debt, currency and derivatives. This leads to a lack of credit and low financial savings," it said.

"Total credit, at 50 percent of GDP remains well below that of its Asian neighbors (an average of over 100 percent of GDP) and especially compared with China (111 percent of GDP)," it continued.

"Within this, consumer credit remains abysmally low (at 11 percent of GDP) compared with an Asian average of over 40 percent of GDP. Household savings tend to be in physical assets and gold, and risk diversification channels are not available," it added.

Financial reforms, the report said, is urgently needed for India to "meet its growth potential" and the nation should implement policies that "channel savings effectively into investment, meet funding requirements for infrastructure and enhance financial stability."

Goldman Sachs has also urged the Indian government to increase its global trade, especially with its neighbors. India currently accounts for no more than 1.5 percent of global trade and ranks below the average of all developing countries, the report noted.

For instance, though India's trade with the US and China have grown over the years (trade with the US stood at $42 billion in 2007 while with China, trade stood at $37 billion), yet, it is insignificant when compared with China's trade with the US ($405 billon in 2007).

India must think "increasingly 'global,'" in order to avail of the "benefits of trade with other emerging giants," the report said.

"India continues to be much less 'open' than many of its other large emerging nation colleagues, especially Chinawe would recommend that India target a major increase in trade with China, Pakistan and Bangladesh," it said.

Noting that nearly 1/3rd of the population are on the edge of poverty, the report said that increasing agricultural output could help millions of people shrug off poverty and help generate employment. Though 60 percent of India's labor force is employed in agriculture, the total contribution of agriculture to overall economic growth is less than 1 percent.

"India's agricultural yields are a fraction of those of its more dynamic Asian neighbors. For instance, rice yields are a third of China's and half of Vietnam's," the report said.

However, at a time when global food prices are rising, India should increase its agricultural productivity and take advantage of the situation.

According to the report, India should also improve its infrastructure, including airports, roadways, energy and ports. Poor infrastructure, the report said, hinders economic growth, as valuable work hours are lost.

"Indian companies on average lose 30 days in obtaining an electricity connection, 15 days in clearing exports through customs, and lose 7 percent of the value of their sales due to power outages," it said, adding India should develop its infrastructure to keep in step with "economic growth and urbanization."

And, last but not the least, "environmental sustainability" is critical for India's economic progress due to the nation's "high population density, extreme climate and economic dependence on its natural resource."

"Urbanization, industrialization and ongoing global climate change will take a heavy toll on India's environment, if not managed better," the report said.

Goldman Sachs' report is part of the investment bank's latest annual update to its Growth Environment Scores (GES), which shows that India has scored below the other three BRIC nations, Brazil, Russia and China, and is currently ranked 110 out of a set of 181 countries assigned GES.

According to the investment bank, if India works harder on the necessary reforms and implements the changes, it could raise its economic growth potential annually by as much as 2.8 percent and reach double digit economic growth, which China has been able to record.

GES, introduced by the investment bank in December 2005, aims to summarize the overall structural conditions and policy settings for countries globally. To arrive at a score on a scale of 10, Goldman Sachs looks at 13 variables including inflation, government deficit, external debt, investment rates, openness of the economy, penetration of personal computers, phones, internet, education, life expectancy, political stability, rule of law and corruption.

For the year 2007, Goldman Sachs has placed India's GEC at around 4.5, while China and Russia's were around 5.5, and Brazil's just over 5.


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## Bushroda

*Reliance to sell gas in India at an 80-per cent discount to global prices*
12 June 2008 

Mumbai: Reliance Industries Ltd will start selling natural gas in the country this year at $25.20 per barrel equivalent of oil - an 80-per cent discount to global prices of over $135 - helping the country reduce imports at record prices. 

The Krishna-Godaveri basin gas field will produce 80 million cubic metres of gas a day, saving the country over Rs1,14,000 crore ($27 billion) in annual import bill, chairman Mukesh Ambani told shareholders today. 

Reliance will also commission a transmission system for natural gas from the KG basin, off the eastern coast. The soaring cost of exploration and a cap on gas prices may, however, cut Reliance's profit margins. 

The government has ordered Reliance to sell natural gas from the KG field for $4.2 per million British thermal units, less than the $4.5 it had sought. 

Reliance aims to produce 240-350 million cubic feet of gas a day from the MA-1 field from the second half of the 2008-09 fiscal year, when gas production from two other fields in the block, D1 and D3, will also begin.

Reliance Gas Transportation Infrastructure Limited is setting up an East-West gas pipeline system to connect the country's cities for distribution of gas from the KG basin. 

Reliance Industries, which is investing $5.2 billion to develop the KG basin oil and gas fields, the nation's largest, expects to more than double gas output in the country. 

Reliance is also aiming to start oil production from its D-6 block in the KG basin in July-August, by the time it commissions its second refinery in Jamnagar, Gujarat.

Commissioning of the 580,000-barrel-a-day refinery will increase Reliance's crude processing capacity to 1.24 million barrels per day, equivalent to about 2 per cent of global capacity, Ambani said. 

The new refinery is being built adjacent to Reliance's 660,000-barrel-a-day plant at Jamnagar and the combined facility will be the world's biggest. 

Reliance would produce sweet oil with an API density of 43 degrees from two or three wells to meet initial targeted output of 20,000 bpd and has already started inviting bids for sale of the crude.
The country currently imports 70 per cent of its crude oil requirements and doesn't produce enough gas to meet local demand. 

Reliance, meanwhile, reported over Rs15,000 crore in net profit for the year-ended March 2008.

Reliance, which enjoys a global market share of seven per cent in the polyester fibre and yarn business, plans to further consolidate its global leadership in polyester with the new 2.5 million tonnes per year Paraxylene manufacturing facility at Jamnagar.


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## Bushroda

*India on the Maritime Map*
by Jeni Bone
Sail World, Australia
Tue 17 Jun 2008 GMT






[FONT=Verdana,Arial,Helvetica,sans-serif]*'Kerala has long been popular for boaties, who have moored in the backwaters.' Jeni Bone*[/FONT]

*India is booming and its population is gradually catching on to the marine lifestyle. At a rate of growth of 9.4% per annum, India's economy has now swelled to a trillion dollars, making it only the 12th nation to reach this milestone.* 

Statistics show that the luxury goods market in India is growing at 30-32% pa. 

Todays affluent Indian consumer is going overboard in his urge to splurge. 

Stats & Facts: 

* In 2007, there were an estimated 120,000 Indians with assets over US$ 1 million. 

* 13,000 new Indian US$ millionaires were added in the past year alone - a 15% p.a. increase over the previous year. 

* With a population in excess of 12 million, Mumbai is said to have more millionaires per square mile than Manhattan. 

For marine businesses, India is looking more like a potential boating hub every year. Mumbai is known as the Gateway to India and its commercial and business epicentre. Mumbai has a natural harbour with miles of sheltered coastline with great places to sail to. The city houses the diamond, finance, IT and film industries  Bollywood is the worlds largest film producing centre. 

India, Mumbai particularly, has a strong boating heritage with the third oldest yacht club in the world, the Royal Bombay Yacht Club, set up in 1846. 

Yet, the first marina development is only just underway  the Bolgatty Island marina in Cochin, Kerala. Awarded through a global bidding process undertaken by KITCO the project was won by Gulf Marinas, a leading marina manufacturer based in Sharjah whose Indian partners are Ocean Blue Marinas. 

Kochi (known in Colonial times as Cochin) is situated on the south-west coast of the Indian peninsula in the scenic and prosperous state of Kerala. 

Its strategic importance over the centuries gave shelter to Arabs, British, Chinese, Dutch, and Portuguese sailors, all of whom have left indelible marks on the regions development. 

Kochi has emerged as the commercial and industrial force and is perhaps the second most important city on the west coast of India (after Mumbai/Bombay). Cochin boasts a world class port and international airport that link it to many major cities worldwide. 

The entire 900km length of the Kerala coast is lined with sandy beaches, rocky promontories and coconut palms that definitely merit a visit in every tourist itinerary. Touring the beach sites of Kovalam can make any beach holiday a delightful one, as Kerala's beaches are renowned for the gentle surf and blue waters. 

On 1 March, the chief minister lay the foundation stone for Bolgatty Island. The Kerala Tourism Development Corporation (KTDC) Chairman, Cheriyan Philip, announced the marina, situated between Marine Drive and Bolgatty Island, will have facilities for 50 yachts, a Marina House with all modern facilities, a Marina Museum and recreation and convention centres. 

A golf course would eventually be developed adjoin it. 

The total cost is Rs 8 crore (Rupees 80 million or AUD$2 million). Around Rs 4 million is from central assistance and the remaining is from the state government and loans. 

The first phase will be completed this year and the second phase within two years. 

The Marina will occupy five acres of land owned by the KTDC near the Bolgatty Palace Hotel. Supporting facilities like petrol stations, a restaurant, health club and car parking are likely to be built on land reclaimed from the backwaters. 

Sailors  local and international  are said to be ecstatic over the project. 
'So far, for many years, India has missed the boat, so to speak,' Howard Moon, an Australian yacht owner, was quoted as saying. 

'Many yachts go to Sri Lanka because there is a small marina there. The Maldives has marinas. Malaysia, Thailand and every other country that I know has marinas. So, it is high time that India had a Marina.' 

Kochi has a buzzing shipyard, so in addition to bringing tourists to the region, the marina will provide job opportunities to hundreds of workmen in repairing boats and communication equipment. 

With the city already playing host to the Volvo Ocean Race in 2008, the government is sure the countrys first marina will attract significant global maritime attention. 

At present the yachters mostly comprising of aged couples need to berth their vessels in the backwaters and reach the shore in inflatable boats. Seafarers from all over the world have visited the area and relied on the Bolgatty Palace Hotel for food, swimming and other needs. 

It is estimated that yachters generally spend an average of two weeks in Kochi, sight seeing, relaxing and carrying out necessary maintenance.


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## Bushroda

*India urged to focus on farming* 
By Brajesh Upadhyay 
BBC News, Washington 

India must focus more on its agricultural sector in order to sustain long-term economic growth, a leading industrialist has said. 

Bharti Group boss Sunil Bharti Mittal called for "serious intervention". 

He said the government, private sector and foreign investors all needed to play their part if they wanted to see India's economy grow at the same rate. 

"Without agriculture, India cannot move forward," said Mr Mittal in an exclusive interview with the BBC. 

'Change needed' 

Mr Mittal said the biggest concern for the Indian economy today was not rising oil prices but the huge disparities that exist in India. 

Some reform in this sector has meant that the country has gone from being unable to feed itself to being the world's largest producer of milk and second largest producer of fruit and vegetables. 

Yet the average size of a farm is just four acres and at least 40% of the harvest is wasted. 

"A significant policy change is needed in terms of land reforms, cold-chains, farming techniques, alternate cropping and so on,'' said Mr Mittal, who is a former president of the Confederation of Indian Industries. 

PepsiCo boss Indira Nooyi echoed similar thoughts, saying one could not imagine a successful India unless its agricultural practices improved markedly with the application of new technologies and techniques. 

"India needs a second green revolution," Ms Nooyi told a gathering of US and Indian corporate executives and opinion makers in the US capital, Washington. 

But she said that, for all the importance of the high-tech revolution, India would not advance by new technology alone. 

"We need to recognise that the future of large segments of the Indian population will rest, for years to come, on improvements in agricultural processes,'' said Ms Nooyi, whose company has major agri-initiatives in Punjab, Maharashtra, Uttar Pradesh and West Bengal states. 

Mr Mittal's companies are also venturing into agriculture. 

Both he and Ms Nooyi said India needed to protect subsistence farmers in trade talks. 

"Any damage to the 700 million people tied with agriculture would mean India will have to pay a heavy price in the future," Mr Mittal said.


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## Bushroda

*Mahindra Suddenly The Talk of The Town*
David Kiley 
Businessweek
June 17, 2008






Indian pickup and SUV maker Mahindra & Mahindra has been quietly gearing up to launch its brand in the U.S. in early 2010. But the company has been anything but quiet this week.

First, just-auto.com reports that the company is in talks with General Motors about its Hummer brand. GM has said that it is exploring options on Hummer whose gas guzzling nature is suddenly very much out of fashion with American consumers. Too, GM is out to raise cash. The other news on Mahindra is that Wall Street investment bank Goldman Sachs reported that it bought a 3.72% stake in the Indian company last month for $172 million.

Mahindra had surfaced in the discussions with Ford about possibly buying Jaguar and Land Rover. But Mahindra rival Tata walked away with the two British brands.

Mahindra & Mahindra is planning on launching is diesel powered pickup and SUV in the U.S. in the first quarter of 2010. That scheme, of selling high fuel economy pickups and SUVs through more than 200 dealers who have signed up, is getting somewhat more complicated given the premium that oil companies are charging for diesel fuel relative to regular petrol.

The vehicles are being launched via Global Vehicles, an Alpharetta, Ga.-based company. Though Mahindra & Mahindra will be new to most vehicle buyers, it is a brand that is no stranger to tractor buyers. M&M tractors have been sold in the U.S. for about a decade, and they hold the no. 3 market share. Indeed, satisfied tractor owners are considered to be the likely first wave of buyers of Mahindra pickups and SUVs.

Buying Hummer may sounds like a bad idea. But Mahindra is a truck and SUV specialist, and could possibly manufacture them more cost effectively, and with diesel engines to make them more fuel efficient. And like Tata is going to find a lot of under developed markets for those two British brands in Asia, the Middle East, India and South America, so to might Mahindra make more out of Hummer than GM has been able to.


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## Bushroda

*Scotland rolling red carpet for skilled young Indians*
19 Jun, 2008, 0151 hrs IST,Ishani Duttagupta, ET Bureau 

England may be among the most favourite destinations for Indian immigrants, but now Scotland too is becoming popular. The Indian community is, in fact, one of the better established and largest ethnic communities - around 10,500 people of Indian origin - there. 

Scotland has been increasingly positioning itself as a hub for inward investing projects in the UK, and is attracting a large number of Indian companies that are setting up base there. This leads to a large number of highly skilled Indians migrating to Scotland. 

Says Michael Cannon, India country manager, Scottish Development International: There are leading Indian companies who have presence in Scotland such as Wipro, Hero ITeS, Usha Martin, Bharat Forge, Nicholas Pharma and Shasun to name a few. Our region has been named as the European Region of the future 2008, beating 38 other European Regions for the title. 

Scotland is perceived as a region with a large pool of highly skilled and specialised workforce. That, needless to say, gives companies a competitive edge. And now Indian immigrants are adding to Scotlands human resources pool in a big way. Says Cannon: We also have a very close and productive collaboration between government, business innovators, finance leaders and institutions of higher learning.


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## Bushroda

*Why India's Reliance Is Going Hollywood*
*Reliance Big Entertainment is in talks to help finance the departure of DreamWorks SKG from Viacom's Paramount Pictures* 

by Nandini Lakshman and Ron Grover 
Businessweek
June 18, 2008





*Anil Ambani of Reliance ADA, David Geffen, and Steven Spielberg 
(L to R) Getty Images*

Over the past 18 months, executives from Hollywood studios have been reaching out to their Indian counterparts in Bollywood, Mumbai's answer to Tinseltown. Studios such as Walt Disney (DIS), Sony Pictures (SNE), and Paramount have signed deals with ambitious Indian entertainment companies eager to take advantage of the booming Indian economy. 

The No. 2 movie in the U.S., The Happening, was co-produced by Fox Searchlight and Mumbai-based UTV Motion Pictures, which financed half of the film's $57 million budget. On May 18, a division of Reliance Big Entertainment, a unit of India's giant Reliance group of companies, signed deals (BusinessWeek, 5/12/08) to produce and develop movies with A-list actors Tom Hanks, George Clooney, Nicolas Cage, and Brad Pitt. "If you have global ambitions, then Hollywood is the right starting point," says Rajesh Sawhney, president of Reliance Big Entertainment. 

Now, comes possibly the biggest Indian move into Hollywood yet. Steven Spielberg and David Geffen's DreamWorks SKG is in talks with India's Reliance Big Entertainment, part of the Reliance ADA empire owned by Anil Ambani, to spin off a new movie joint enterprise. The $1.5 billion debt-equity deal, which Reliance is expected to partly finance, came after weeks of speculation that DreamWorks' team was looking for private equity after telling Viacom's (VIA) Paramount Pictures last year they intended to bolt from their three-year deal. 

*Soros Holds 3&#37; Reliance Stake*

Reliance insiders claim that the deal is "yet to be structured and too premature," but investment bankers in India believe the Reliance funding in DreamWorks could largely be private equity. In exchange, Reliance may pick up a stake in the new DreamWorks venture, and also sign a pact to make movies. 

If the deal goes through, it will be DreamWorks' second association with an Indian company. In January, DreamWorks Animation (DWA), an independent unit set up four years ago, tied up with Paprikaas Interactive Services, an animation house based in Bangalore, for creative and technical services. The first animation alliance by DreamWorks outside the U.S., the partnership is part of the studio's pact with Thomson (TMS), the $9.3 billion French media house, to have a dedicated studio in Bangalore. Thomson's entertainment business arm Technicolor holds a controlling stake in Paprikaas. 

DreamWorks' talks with Reliance come at a time when the Indian conglomerate, a fairly new entrant into the business, is firing on all the entertainment fronts. In February, George Soros invested $100 million for a 3% stake. The company said it would use the money for expansion. "We want more of every bit of the entertainment pie," says Reliance Entertainment Chairman Amit Khanna. "To be a significant global player, we believe that we need to raise the bar and aspire more." 

Soros already owns the rights to 59 of DreamWorks' older films, which his Soros Strategic Partners bought in 2006 from Paramount Pictures. (Paramount continues to distribute the films for Soros.) 

*Casting a Wide Entertainment Net*

Reliance scripted its Hollywood entry more than eight months ago. Last year, Reliance invested (BusinessWeek.com, 4/15/08) in Phoenix Theatres, a Knoxville (Tenn.)-based film management company. It bought Burbank (Calif.)-based Lowry Digital Images, a film imaging and restoration outfit, in April. Early this year, Reliance, which owns more than 170 cinemas in India, quietly acquired 250 cinemas from mom-and-pop operators in 28 cities in the U.S. including San Jose, Chicago, and Washington, D.C. 

The U.S. isn't the only country where Reliance is expanding. In May, it bought a chain of 25 cinemas in Malaysia. Like the purchases in the U.S., the Malaysian cinemas were targeting the large Indian diaspora and also other Asian communities such as the Chinese, Koreans, and Japanese. The plan is to exhibit Bollywood movies, as well as regional Indian films in languages like Telugu and other Asian languages. 

Reliance may be a newcomer, but it has already shown it can command attention from the film industry's elite. At the Cannes Film Festival last month, Khanna (an erstwhile Bollywood director and lyricist) announced that Reliance was spending $1 billion to develop films over the next two years. It struck deals with the production houses of eight Hollywood actors including Clooney, Pitt, Hanks, and Cage. The deal, brokered by Hollywood's Creative Artists Agency, allows Reliance to pay for the development of scripts and gives it the option to fund up to half the cost of making any film it develops&#8212;and thereby reap half the profits. The films would then likely be distributed by Hollywood studios, with Reliance retaining some foreign rights. 

Reliance's global aspirations cut across every business category, with interests in power, telecom, and financial services, as well as music, broadcasting, social networking, and gaming Web sites. Reliance, India's second-largest telecom player, is also currently in merger talks (BusinessWeek.com, 5/27/08) with South Africa's MTN to create a $63 billion telecom juggernaut with 116 million subscribers, larger than AT&T (T) and many European players. In its bid for MTN, Anil Ambani's company is fighting against a rival bid by Reliance Industries, controlled by his elder brother Mukesh Ambani, with whom he has had an ongoing feud. 

*Lakshman covers India business for BusinessWeek. Grover is Los Angeles bureau chief for BusinessWeek.*


----------



## Bushroda

*Indian confidence*
Assetz, UK
18th June 2008

Amid a world economy in which high inflation and the credit crunch have filled the financial headlines of late, many of those still keen to carry out some property investment will have been on the lookout for new opportunities, markets where the notion of economic slump is a distant one.

India certainly appears to be one of these. Although inflation is high at 8.24 per cent - prompting a recent interest rate rise from the central bank - economic confidence remains notably high. The Economic Times of India reported today that the country has come second in the Nielsen Global Online Consumer Survey table for consumer confidence, with only Norway ahead.

Explaining this, the survey concluded that optimisation and outsourcing are two key elements driving India's economy and enabling it and Norway to pursue economic policies that capitalise on decline elsewhere.

It stated: "Aside from consistently high consumer confidence, the two most optimistic nations in the world, Norway and India, share something in common: Their economies are benefiting from the by-products of economic slowdown."

So with India still booming, investors may be keen to see just how well the property market is doing out of all of this.

Andrew Fassnidge, managing director of independent property investment firm Navyroof.com, said the Indian property market can certainly offer something different and lucrative for investors.

He stated: "India is a great alternative for property investors looking to make substantial gains from their investments. With the UK market in decline and investors increasingly looking further abroad, India is an attractive proposition." For good measure he added the recent projection by Merrill Lynch of a 700 per cent rise in property values by 2015.

So who would be interested in investing in India? At the sort of figures Merrill Lynch is quoting, quite a few might. But British Indians in particular might want to "give back and profit by investing in their motherland", said Mr Fassnidge. This, he said, would be "emotional", but also "effective and profitable".

He concluded: "All the economic indicators project a bright, sustainable future for India. In the last two years alone, property prices in India increased by 70 per cent. Industry commentators are mooting that whilst the USA and Europe look to be involved in an economic downturn, emerging markets such as India, may be the 'crunch proof' economies."

If the talk of something being able to withstand the credit crunch might sound particularly attractive, it should be noted that there are, of course, problems in some sectors. For example, the Financial Times reports that Kishore Biyani, chief executive of India's biggest retailer Pantaloon, has warned that commercial rents in many large cities are making life very difficult for retailers. But Mr Biyani went on to say that a correction in this area was already happening. He suggested that this could mean some new shopping malls failing to be a success.

Those with ancestral connections to India may be able to make the most of close cultural, family and extended community ties to gain knowledge about the best way to proceed in Indian property investment, while avoiding any pitfalls. For those without these connections, in-depth research and the tapping of information from those who are in the know could be the key to success.


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## nitesh

Bushroda said:


> *Why India's Reliance Is Going Hollywood*
> *Reliance Big Entertainment is in talks to help finance the departure of DreamWorks SKG from Viacom's Paramount Pictures*
> [/I][/B]



So we will see lot of hollywood ishtyle movies soon


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## Bushroda

*Tata Motors eyes Hummer as it seeks £1.5bn war chest*
Rhys Blakely, Bombay
Times Online, UK
June 11, 2008

Tata Motors, the Indian group that owns Land Rover and Jaguar, has approached shareholders to ask for permission to raise a £1.5 billion war chest to use on further acquisitions. Potential targets include Hummer, the struggling off-road carmaker that General Motors has put up for sale. 

In a notice sent to shareholders, the company said it was scouting for further deals similar to the acquisition of the two British luxury marques, which it bought from Ford for $2.3 billion (£1.2 billion). "The company has major growth plans for expanding its product range and presence in the domestic and global markets in commercial and passenger vehicles, including through strategic alliances and acquisition opportunities," it said. 

Tata Motors outlined plans to raise as much $1 billion from overseas debt and stock markets  about $500 million of which will be through equity. It is also asking shareholders for permission to raise its borrowing limits by about £1 billion 

The new fundraising moves come on top of three rights issues launched last month, which will raise $1.7 billion to finance the Land Rover-Jaguar purchase. At that time it said it would raise up to £300 million more through an overseas float. 

At the time, analysts reacted negatively to the prospect of existing shareholders' stakes being diluted through the issue of new shares. Some suggested, however, that Tata, India's largest maker of heavy trucks, had little choice but to tap the stock market. Balaji Jayaraman, an analyst with Morgan Stanley, said: "Tight credit market conditions made raising debt an expensive proposition." 

Expensive financing risks rubbing the sheen from Tata's acquisition of Jaguar and Land Rover. The company has been forced to take out an expensive bridging loan to fund the purchase and its bankers have been working hard to limit the cost of capital as the Indian group moves into the bleakest market conditions seen in years. 

Tata, which has never before sold luxury cars, is under pressure from the higher cost of raw materials. 

Its full-year figures showed that net income fell to 5.36 billion rupees in the three months to the end of March, compared with 5.77 billion rupees for the same period a year earlier. The company this week gave warning of "challenging times ahead". 

Full-year profits rose at the slowest pace in at least five years, weighed down by factors including lacklustre demand in India amid high interest rates and worries over the economy's growth prospects.


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## Bushroda

*Spielberg, India Firm Near Deal to Ally With DreamWorks*
By LAUREN A.E. SCHUKER and MERISSA MARR
Wall Street Journal, US
June 18, 2008

The principals of DreamWorks SKG are close to a deal with one of India's biggest entertainment conglomerates to form a new movie venture, according to people familiar with the situation, a move that would give director Steven Spielberg the cash to finance his DreamWorks team's departure from Viacom Inc.'s Paramount Pictures later this year.





Associated Press 
*Movie moguls Jeffrey Katzenberg, left, and *
*Steven Spielberg watch the NBA finals last week. *
*Mr. Spielberg's DreamWorks SKG is in talks with *
*Reliance, a move that would give the director the *
*cash to regain his independence.*

Mumbai-based Reliance ADA Group would provide Mr. Spielberg and company with $500 million to $600 million in equity, moving them one step closer to ending one of Hollywood's most contentious and closely watched battles. In Reliance, the DreamWorks team also would have an unusual and ambitious partner in the film business: an Indian firm with interests in telecommunications, financial services and entertainment that wants to build a media empire by financing Hollywood pictures.

The deal amounts to a marriage of some of the biggest names in the Hollywood and Indian business worlds, with Reliance getting a large stake in the new company. DreamWorks, which makes live-action films that have included last year's "Blades of Glory" and "Dreamgirls" in 2006, would likely seek another $500 million or so in debt financing elsewhere to give its new venture enough money to make a slate of about six films a year. The company would then choose a studio to distribute the films, which is still an open question. General Electric Co.'s Universal Pictures, where Mr. Spielberg began his career, is thought to be the director's preference to release his future works, but News Corp.'s Twentieth Century Fox also is thought to be a serious contender. (News Corp. is the owner of Dow Jones & Co., publisher of The Wall Street Journal.)

A spokesman for DreamWorks declined to comment.

The film industry has been closely monitoring the fate of the 61-year-old Mr. Spielberg and partner David Geffen, co-founders of DreamWorks SKG. DreamWorks was sold to Viacom in 2006 after a decade-plus run as a private company. But a tense relationship soon developed between DreamWorks and Paramount, and last year DreamWorks began to signal publicly that they might leave the studio in 2008, when the contracts of Messrs. Spielberg and Geffen allow it. Another provision of their complex arrangement will likely allow them to keep using the DreamWorks SKG name, though Viacom would retain rights to the films they created during their short time at Paramount.

The fractured relations reached a boiling point last fall when, threatened by rumors that Mr. Spielberg might bolt, Viacom Chief Executive Philippe Dauman said that any such departure would be "completely immaterial" to the company's financial future. Mr. Dauman and executives at Paramount have since then scrambled to repair relations with Messrs. Spielberg and Geffen, to no avail.

When the dust settles, Mr. Spielberg is expected to be joined in the venture by current DreamWorks Chief Executive Stacey Snider, who has become a key ally and collaborator since joining Mr. Spielberg in 2006. The former head of Universal Pictures, Ms. Snider would give Reliance a tested Hollywood manager for its biggest foray into the global movie business.

Although the DreamWorks team's possible partnership with Reliance ADA Group seems like an unlikely meeting of the minds, it's actually in line with Hollywood's current landscape, where a dearth of Wall Street financing has opened up the door to foreign investors.

Reliance's entertainment division, Reliance Big Entertainment, already announced a slate of investments in Hollywood projects last month at the Cannes Film Festival. Those include providing financing to a handful of Hollywood top talent with production houses, like Jim Carrey, George Clooney, Tom Hanks and Brad Pitt. The company also said then it would spend more than $1 billion over the next 18 months building its entertainment empire in India and abroad.

Reliance would provide funding to allow talent like Messrs. Clooney and Pitt who have their own production houses to acquire film projects before taking them to major studios with which they have previous agreements. Reliance could then go into business with the Hollywood studios, as a partner financing up to 50% of the film's production. These agreements are commonly referred to as "development silos."

*Leading the Charge*

Rajesh Sawhney, president of Reliance Big Entertainment, is leading the charge into Hollywood. Before joining Reliance, Mr. Sawhney was chief operating officer at Times Internet Ltd., part of the Times Group, one of India's largest media and entertainment companies.

Reliance's plunge into Hollywood is part of a broader push among India's corporate titans to take their place on the global corporate stage. The country has now produced global players in software, steel, autos and is building a growing powerhouse in telecommunications.

India's rise was at first confined to software and outsourcing. But more recently, Indian firms, spurred by rapid growth in their home market, have expanded abroad aggressively. In some cases, they have scooped up storied Western brands. Earlier this year, for instance, Tata Motors Ltd., part of the Tata group of companies, agreed to buy Britain's Jaguar and Land Rover brands from Ford Motor Co. for $2.3 billion.

In recent years, the country's Mumbai-based film industry, known as Bollywood, has found a growing global appeal for its products. As it has expanded, it has drawn investment from Hollywood as well. For example, Walt Disney Co. has a large stake in UTV Software Communications, one of India's leading production houses. Other large American media firms have also invested in the Indian market.

In the Reliance parent company, the DreamWorks team will find another internal feud -- among the Ambani family owners, one of India's most prominent industrial dynasties. Anil Ambani, 49, controls Reliance Communications Ltd., one of the major mobile players in India. He has pushed to become a major player in the country's media world, is married to a former Bollywood actress and is eager to make the leap to Hollywood. He and his older brother Mukesh are currently engaged in a feud over a multibillion-dollar telecommunications deal with MTN Group Ltd. of South Africa. Mukesh Ambani's company, Reliance Industries Ltd., has sought to assert that it has the right of first refusal over Reliance Communications in the event of a sale.

In leaving Paramount, Messrs. Geffen and Spielberg will put behind them a painful period in their storied careers. The duo have made clear for the past year that they are eager to part ways with Paramount after a series of personal clashes with executives at the studio and its Viacom parent. In an interview last September, Mr. Geffen said: "We want to function independently and get credit for our successes and failures."






DreamWorks was founded with great fanfare in 1994 by Mr. Spielberg, Jeffrey Katzenberg and Mr. Geffen, who set out to build a vast multimedia enterprise. The trio, who form the SKG of the logo, found that success was not easy to come by, however. While they scored hits such as "Saving Private Ryan," they also made flops such as "The Island" and fared poorly in side businesses such as music.

In 2004, DreamWorks spun off the animation arm that Mr. Katzenberg was running into a stand-alone public company. DreamWorks Animation SKG, which also distributes its films through Paramount in a deal that runs for several more years, is the creator of hits like "Shrek" and "Kung Fu Panda."

*Bidding War*

The live-action arm of DreamWorks became the object of a fierce bidding war in 2005, with Viacom scooping up the studio and its venerable founders from under the nose of GE's NBC Universal. Viacom paid $1.6 billion -- at the time a healthy price for an 11-year-old studio with mixed returns.

The honeymoon period was brief, however. Not long after the deal was consummated, Messrs. Spielberg and Geffen were struggling with their loss of independence. They railed against their new master: Paramount chief Brad Grey. Mr. Spielberg privately complained about Paramount taking credit for DreamWorks movies. They also felt they were not being afforded the appropriate level of respect from Mr. Grey and his Viacom bosses.

Tensions between the two sides came to a head at the end of 2006 over "Dreamgirls." Mr. Geffen, who became a billionaire through the music industry, was heavily invested in the musical, having shepherded it from the stage to the big screen. He took enormous offense because he felt Mr. Grey seemed to take credit for the movie at several public events, according to people familiar with the situation.

Perhaps sensing that the DreamWorks camp was heading for the door, Viacom Chief Mr. Dauman dropped a bombshell last September. He told an investor conference that their departure would be "completely immaterial" to Viacom. While Paramount and DreamWorks are both small elements of Viacom's bottom line, the comment infuriated the DreamWorks team. Publicly defending Mr. Spielberg, fellow DreamWorks founder Mr. Katzenberg said: "To suggest that not having Steven Spielberg is completely immaterial just seems ill-advised." He added: "I think calmer heads need to prevail here."

Mr. Katzenberg finds himself in an awkward situation with the departure of his longtime colleagues. As part of the sale to Paramount, the studio landed a distribution deal with DreamWorks Animation. He and the animation company will be left behind at Paramount when Messrs. Geffen and Spielberg depart.

For Viacom and its Paramount studio, the departure of the DreamWorks camp will create a hole in its slate. But it will also remove a distraction that has taken up a lot of executives' time. Paramount is emerging from its revamp and finally has some hits to its name, including this summer's "Iron Man." A key advocate for the DreamWorks deal originally, Mr. Grey has taken the brunt of attacks from the DreamWorks crew, according to people familiar with the situation.

Still, Paramount may remain in business with DreamWorks for some time to come. The two share the rights to scores of projects, such as a sequel to last year's hit "Transformers," though people close to the situation say Mr. Spielberg's crew may bargain with Paramount to take certain projects with them. Aware of this, Mr. Dauman has made a special effort in recent months to smooth things with Mr. Spielberg, visiting him regularly in Los Angeles.


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## Energon

I propose that the format of this thread be changed. The reason being is that I just see links for articles being posted without any followup discussions. I would like to hear an analysis on the referenced material (particularly from Bushroda).

In reference to the Hummer Acquisition:
I don't know how good an idea this is given that the consumer base for the product itself is precipitously shrinking.


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## vish

Energon said:


> I propose that the format of this thread be changed. The reason being is that I just see links for articles being posted without any followup discussions. I would like to hear an analysis on the referenced material (particularly from Bushroda).
> 
> In reference to the Hummer Acquisition:
> I don't know how good an idea this is given that the consumer base for the product itself is precipitously shrinking.



I second that...

Won't Hummer be at odds with LR?

Further, Tata Motors is better-off expanding their passenger line in India...


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## Energon

vish said:


> I second that...
> 
> Won't Hummer be at odds with LR?
> 
> Further, Tata Motors is better-off expanding their passenger line in India...


 No, the Hummer and LR within the SUV market actually fall into two different sub classes. Even the smallest of the Hummers, the H3 sports a 3.5L engine, while the most popular still remains the 5.7L V8 version. The Land Rovers on the other hand top out at a 4.4L supercharged engine for the premium brand Range Rover Vogue SE. Majority of the Land Rover models are sold with engines at around 2.5- 3.2L range. LR has also entered the light/compact SUV market with their Freelander models. These trucks will actually have a growing consumer base as previous owners of larger SUVs trade them in for smaller ones.

In India, the LR brands will be initially considered Ultra Luxury and placed even higher than Tata's premier Safari brand. Again, the two will not compete directly. Tata will expect the upper middle class to trade their Tata SUVs in for the LRs as their wallets get fatter while the middle class will opt for Tata SUVs in lieu of their smaller sedans when they are in a position to do so.

The Hummer however will be left out in the cold since the only real market for these cars has been the USA where the disposable income used to be high, the culture promotes super-sizing and where gas used to be cheap. If the market share is dropping at a high rate here, then its going to be exponentially worse abroad. Land Rovers on the other hand given their better fuel efficiency have a much better demand worldwide (including Pakistan which assembles a version of these SUVs under license production).


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## Bushroda

Energon, 

This thread is basically a databank for collecting news articles on Indian economy. However unimportant it might be, it simply gives the reader a gist of happenings in the Indian economic scene. I do not hope for any followup discussion in this thread since it tends to get messy and then the corresponding news often gets buried and unnoticed. 

But I do believe that a discussion is important if it is deemed necessary by any poster. If any news article interests you simply open a new thread with the the particular news content.


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## Bushroda

*Bollywood romance in the air for Steven Spielberg*
Amanda Andrews, Media Business Correspondent 
The Times, UK
June 19, 2008

It is a union that the film industry has been waiting for, a marriage between two of the giants of Hollywood and Bollywood - and if it is successful, Steven Spielberg and Anil Ambani will embark on what promises to be a formidably powerful new venture. 

Mr Spielberg and senior executives at DreamWorks SKG, the film studio that he founded with David Geffen and Jeffrey Katzenberg, are understood to be in talks with Mr Ambani, the founder of Reliance ADA and India's second-richest man. 

A deal with Reliance would reportedly earn the DreamWorks founders up to $600 million (£306 million) in equity to launch the venture, in which Reliance, India's biggest entertainment conglomerate, would have a large stake. 

It is understood that the move could provide Mr Spielberg, whose film credits include the Indiana Jones series, Saving Private Ryan and Schindler's List, with sufficient financing to leave Viacom's Paramount Pictures by the end of the year. 

Viacom bought DreamWorks in 2006 for $1.6 billion, starting a relationship that is believed to have soured quickly. It has been widely speculated that Mr Spielberg and his team are looking to leave after a series of personal clashes with executives at Paramount Pictures and its Viacom parent. 

Many thought that a separation was likely after Philippe Dauman, Viacom's chief executive, said at an investor conference last September that the financial effect of Mr Spielberg's potential departure on the company and Paramount would be completely immaterial. Speaking at the Bear Stearns investor conference in March, Mr Dauman said of his relationship with Mr Spielberg: We both believe we'll be in business together in one form or another for a very, very long time. Whether it is in the current form or not remains to be seen. It's really up to Steven. 

It is understood that DreamWorks has been looking to raise about $1 billion to secure its independence from Viacom and its Paramount film studio. 

Reliance has vowed to invest more heavily in film in the next couple of years. At the Cannes Film Festival last month, Reliance's entertainment division - Reliance Big Entertainment - announced a number of investments in Hollywood projects. 

These included providing financing to the production houses of leading Hollywood figures such as the actors Jim Carrey, Tom Hanks and Brad Pitt. 

Reliance, which refused to comment yesterday, is understood to have spoken to other Hollywood studios. It is thought to be particularly keen to invest in Hollywood, which often struggles to raise cash. 

While the Bollywood film industry is buoyant, producing hundreds of films a year, budgets rarely run into the tens of millions. 

Mr Ambani, 49, has been an active dealmaker since he and his brother Mukesh divided Reliance Industries, the family business, in 2005. Anil, who is married to a former Bollywood actress, called his part of the business Reliance Anil Dhirubhai Ambani (ADA) Group and has created an empire that encompasses a range of sectors, including media, telecoms and industry. 

He is separately in talks with MTN, the South African telecoms group, in an effort to create one of the world's ten largest telecoms companies, worth an estimated $70 billion (£35.7 billion) and with 116 million subscribers worldwide. Reliance Communications is valued at about $30 billion and has 48 million subscribers 

No spokesmen for DreamWorks, were available for comment last night. 

The personal contracts that Mr Geffen and Mr Spielberg signed as part of Viacom's acquisition of DreamWorks expire at the end of this year. Mr Katzenberg now runs DreamWorks Animation SKG, a separate public company with a market capitalisation of $2.81 billion. 

*The DreamWorks story *

DreamWorks began in 1994 as an ambitious attempt by the media moguls Steven Spielberg, Jeffrey Katzenberg and David Geffen to create a new Hollywood studio 

In December 2005 the founders agreed to sell the studio to Viacom, the parent company of Paramount Pictures 

DreamWorks' animation unit was spun off as an independent studio in 2004, into DreamWorks Animation SKG. Its films are distributed by Paramount, but the animation studio is independent of Paramount/Viacom 

In 1998, DreamWorks released Antz, its first animated feature


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## Bushroda

*Indias growth rate can jump to 10 percent: Kamath*
By Dipankar De Sarkar
June 19th, 2008

London, June 19 (IANS) The Indian economy is on course to achieving a 10 percent growth rate over a sustained period, Indias most powerful private sector banker said here Thursday. The remarks by ICICI Bank CEO K.V. Kamath came after Commerce and Industry Minister Kamal Nath told a gathering Wednesday night that recent inflationary pressures had caused growth to dip by one percent to 8.5 percent. 

Kamal Nath, who was supposed to have addressed Thursdays meeting, cut short his visit to London to attend to urgent business back home.

Another absentee at the event was Planning Commission Deputy Chairman Montek Singh Ahluwalia, who was awarded an Oxford doctorate Wednesday and is scheduled to leave for India Friday.

Kamath told a meeting of prominent Indian and British businesspeople and entrepreneurs here that the biggest driver of the Indian economy was the service sector, which accounted for 60 percent of Indias gross domestic product (GDP) and was growing at the rate of 10 percent.

Neither the proportion of the service sector in the economy nor its rate of growth had shown any signs of dipping and were expected to remain roughly at the same levels in the future, said Kamath.

The CEO of Indias largest private sector bank was speaking as president of the Confederation of Indian Industry (CII) at an event where other speakers included Liam Byrne, Britains minister for the Midlands - home to 90 percent of the countrys Indian-origin population, Indian High Commissioner Shiv Shankar Mukherjee, economist Lord Kumar Bhattacharya, and several business leaders such as Karan Bilimoria, Analjit Singh, Malvinder Singh and Phiroze Vandrevala.

Kamath said another reason for basing his 10 percent projection was that the Indian manufacturing sector was poised to spring back very strongly after a period of deep pain from 1996 to 2002.

It is now an entity that is lean, financially well-structured and with a global mindset, he said.

However, he said some inflationary pressures and, what he called, environmental issues could slow down growth in the short term.

Mukherjee said a trajectory of 10 percent or more was not only achievable but could be sustained over a long period because Indias democratic process ensured that all the diverse sections of the country were part of a consensus on economic reforms.

Lets not stop at 10 percent. But Id rather have a 10 percent growth rate that everybody agreed with, Mukherjee added.


----------



## Neo

*Indias inflation rate shoots to 13-year peak of 11.05pc ​* 
Saturday, June 21, 2008

NEW DELHI: Indian inflation raced to its highest level in 13 years, accelerating to over 11 percent after a fuel price hike, according to data Friday that piled pressure on the government as general elections loom. 

Annual inflation in the worlds second fastest-growing economy jumped to 11.05 percent for the week ended June 7 from 8.75 percent a week earlier, stunning economists who forecast it would be around 9.8 percent.

It also pushed Indian shares down more than 500 points to their lowest close of the year on fears of more interest rate hikes.

The double-digit shocker, as one Indian TV news channel dubbed it, was driven by a sharp increase in state-set fuel and cooking gas prices and rises in such basic foods as cooking oil.

Nobody had expected an 11 percent out-turn, said HSBC economist Robert Prior-Wandesforde, adding we very much doubt inflation has peaked.

With the general elections fast approaching... the governments worst inflationary nightmares are coming true, he said.

The ruling Congress-led coalition desperately wants to tame prices, fearing a voter backlash in national elections due by May 2009. Indian political wisdom holds that when the prices go up, politicians weep.

The opposition Hindu nationalist Bharatiya Janata Party (BJP) signalled it would make rising prices, which have hit Indias teeming poor the hardest, a key poll issue and demanded Prime Minister Manmohan Singhs resignation on behalf of the nation.

Finance Minister Palaniappan Chidambaram blamed surging global fuel and other commodity prices, saying these are difficult times and promised to look at stronger measures.

But analysts said the government had little left in its fiscal arsenal, it has already banned exports of staple foods to boost supplies and check inflation.

The new numbers came as governments around the world battle rising prices. Malaysia Premier Abdullah Ahmad Badawi this week warned of a real disaster unless bold steps are taken to tackle the inflation crisis, forecasting a global recession as prices of food and fuel soar.

China is groaning under the worst inflation in a dozen years at 7.7 percent and a hefty fuel price hike Friday could push it higher.

The Indian data incorporated for the first time its fuel price rise announced earlier in June aimed at stemming huge oil company losses.

Inflation is the highest since May 6, 1995, when it stood at 11.11 percent.

Were getting into very dangerous territory, said HDFC economist Abheek Barua. Wandesforde said inflation could remain in double-digits for at least nine months. Some economists saw it rising to at least 12 or 13 percent.

There needs to be significant further tightening, said Goldman Sachs economist Tushar Poddar.

Indias inflation rate shoots to 13-year peak of 11.05pc


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## Bushroda

*India&#8217;s Growth Outstrips Crops *
*The Food Chain* 

By SOMINI SENGUPTA
New York Times
Published: June 22, 2008






*Ruth Fremson/The New York Times*
*Migrant workers thresh wheat in the Indian state of Punjab. 
The government raised the regulated price for wheat to reduce imports.* 

JALANDHAR, India &#8212; With the right technology and policies, India could help feed the world. Instead, it can barely feed itself. 





*Ruth Fremson/The New York Times
Wheat is harvested in Punjab, where water has become a top concern.*

India&#8217;s supply of arable land is second only to that of the United States, its economy is one of the fastest growing in the world, and its industrial innovation is legendary. But when it comes to agriculture, its output lags far behind potential. For some staples, India must turn to already stretched international markets, exacerbating a global food crisis.

It was not supposed to be this way.

Forty years ago, a giant development effort known as the Green Revolution drove hunger from an India synonymous with famine and want. Now, after a decade of neglect, this country is growing faster than its ability to produce more rice and wheat.

The problem has grown so dire that Prime Minister Manmohan Singh has called for a Second Green Revolution &#8220;so that the specter of food shortages is banished from the horizon once again.&#8221; 

And while Mr. Singh worries about feeding the poor, India&#8217;s growing affluent population demands not only more food but also a greater variety.

Today Indian agriculture is a double tragedy. &#8220;Both in rice and wheat, India has a large untapped reservoir. It can make a major contribution to the world food crisis,&#8221; said M. S. Swaminathan, a plant geneticist who helped bring the Green Revolution to India. 

India&#8217;s own people are paying as well. Farmers, most subsisting on small, rain-fed plots, are disproportionately poor, and inflation has soared past 11 percent, the highest in 13 years.

Experts blame the agriculture slowdown on a variety of factors. 

The Green Revolution introduced high-yielding varieties of rice and wheat, expanded the use of irrigation, pesticides and fertilizers, and transformed the northwestern plains into India&#8217;s breadbasket. Between 1968 and 1998, the production of cereals in India more than doubled. 

But since the 1980s, the government has not expanded irrigation and access to loans for farmers, or to advance agricultural research. Groundwater has been depleted at alarming rates. 

The Peterson Institute for International Economics in Washington says changes in temperature and rain patterns could diminish India&#8217;s agricultural output by 30 percent by the 2080s. 

Family farms have shrunk in size and quantity, and a few years ago mounting debt began to drive some farmers to suicide. Now many find it more profitable to sell their land to developers of industrial buildings. 

Among farmers who stay on their land, many are experimenting with growing high-value fruits and vegetables that prosperous Indians are craving, but there are few refrigerated trucks to transport their produce to modern supermarkets.

A long and inefficient supply chain means that the average farmer receives less than a fifth of the price the consumer pays, a World Bank study found, far less than farmers in, say, Thailand or the United States. 

Surinder Singh Chawla knows the system is broken. Mr. Chawla, 62, bore witness to the Green Revolution &#8212; and its demise. 

Once, his family grew wheat and potatoes on 20 acres. They looked to the sky for rains. They used cow manure for fertilizer. Then came the Mexican semi-dwarf wheat seedlings that the revolution helped introduce to India. Mr. Chawla&#8217;s wheat yields soared. A few years later, the same happened with new high-yield rice seeds.

Increasingly prosperous, Mr. Chawla finally bought his first tractor in 1980. 

But he has since witnessed with horror the ills the revolution wrought: in a common occurrence here, the water table under his land has sunk by 100 feet over three decades as he and other farmers irrigated their fields. 

By the 1980s, government investment in canals fed by rivers had tapered off, and wells became the principal source of irrigation, helped by a shortsighted government policy of free electricity to pump water. 

Here in Punjab, more than three-fourths of the districts extract more groundwater than is replenished by nature. 

Between 1980 and 2002, the government continued to heavily subsidize fertilizers and food grains for the poor, but reduced its total investment in agriculture. Public spending on farming shrank by roughly a third, according to an analysis of government data by the Center for Policy Alternatives in New Delhi. 

Today only 40 percent of Indian farms are irrigated. &#8220;When there is no water, there is nothing,&#8221; Mr. Chawla said.

And he sees more trouble on the way. The summers are hotter than he remembers. The rains are more fickle. Last summer, he wanted to ease out of growing rice, a water-intensive crop.

The gains of the Green Revolution have begun to ebb in other countries, too, like Indonesia and the Philippines, agriculture experts say. But the implications in India are greater because of its sheer size.

India raised a red flag two years ago about how heavily the appetites of its 1.1 billion people would weigh on world food prices. For the first time in many years, India had to import wheat for its grain stockpile. In two years it bought about 7 million tons. 

Today, two staples of the Indian diet are imported in ever-increasing quantities because farmers cannot keep up with growing demand &#8212; pulses, like lentils and peas, and vegetable oils, the main sources of protein and calories, respectively, for most Indians. 

&#8220;India could be a big actor in supplying food to the rest of the world if the existing agricultural productivity gap could be closed,&#8221; said Adolfo Brizzi, manager of the South Asia agriculture program at the World Bank in Washington. &#8220;When it goes to the market to import, it typically puts pressure on international market prices, and every time India goes for export, it increases the supply and therefore mitigates the price levels.&#8221; 

Recently, in a village called Udhopur, not far from here, Harmail Singh, 60, wondered aloud how farmers could possibly be expected to grow more grain.

&#8220;The cultivable land is shrinking and government policies are not farmer friendly,&#8221; he said as he supervised his wheat harvest. &#8220;Our next generation is not willing to work in agriculture. They say it is a losing proposition.&#8221; 

The luckiest farmers make more money selling out to land-hungry mall developers. 

Gurmeet Singh Bassi, 33, blessed with a farm on the edges of a booming Punjabi city called Ludhiana, sold off most of his ancestral land. Its value had grown more than fivefold in two years. He made enough to buy land in a more remote part of the state and hire laborers to till it. 

Meanwhile, Mr. Chawla&#8217;s neighbors migrated to North America. They were happy to lease their land to him, if he was foolish enough to stay and work it, he said. Today, he cultivates more than 100 acres. 

Last year, on a small patch of that land, he planted what no one in his village could imagine putting on their plate: baby corn, which he learned was being lapped up by upscale urban Indian restaurants and even sold abroad. 

At the time, baby corn brought a better profit than the government&#8217;s price for his wheat crop. 

This had been the Green Revolution&#8217;s other pillar &#8212; a fixed government price for grain. A farmer could sell his crop to a private trader, but for many small tillers, it was far easier to approach the nearest government granary, and accept their rate. 

For years, those prices remained miserably low, farmers and their advocates complained, and there was little incentive for farmers to invest in their crop. &#8220;For farmers,&#8221; said Mr. Swaminathan, the plant geneticist, &#8220;a remunerative price is the best fertilizer.&#8221;

Mr. Swaminathan&#8217;s adage proved true this year. After two years of having to import wheat, the government offered farmers a substantially higher price for their grain: farmers not only planted slightly more wheat but also sold much more of their harvest to the state. As a result, by May, the country&#8217;s buffer stocks were at record levels. 

Nanda Kumar, India&#8217;s most senior bureaucrat for food, said the country would not need to buy wheat on the world market this year. That is good news, for India and the world, but how long it will remain the case is unclear. 

Will greater demand for food and higher market prices enrich farmers, eventually, encouraging them to stay on their land? There is potential, but other conditions, like India&#8217;s inefficient transportation and supply chains, would have to improve too.

How to address these challenges is a matter of debate. 

From one quarter comes pressure to introduce genetically modified crops with greater yields; from another come lawsuits to stop it. And from yet another come pleas to mount a greener Green Revolution.

Alexander Evans, author of a recent paper on food prices published by Chatham House, a British research institution, said: &#8220;This time around, it needs to be more efficient in its use of water, in its use of energy, in its use of fertilizer and land.&#8221;

Mr. Swaminathan wants to dedicate villages to sowing lentils and oilseeds, to meet demand. The World Bank, meanwhile, favors high-value crops, like Mr. Chawla&#8217;s baby corn, because they allow farmers to maximize their income from small holdings. 

The market may yet help India. Mr. Chawla, for instance, has replaced baby corn with sunflowers, prompted by the high price of sunflower oil. For the same reason, he is also considering planting more wheat.


----------



## Bushroda

*INDIA: rising boat sales means a need for marinas*
by Jeni Bone
Sail World, Australia 
Sat 21 Jun 2008 GMT


*'Cochin Harbour' .* 

*India has 7,600km of coastline, warm weather, a booming economy and projections of a 50 per cent below-25 population by 2020. In the next five years, the leisure boating industry will be worth at least US$1 billion, but so far, demand outstrips supply as far as marinas go.* 

New Delhi: There&#8217;s a parking problem looming&#8212;on India&#8217;s seafront. 

In yet another sign of the rich getting richer, an increasing number of people are buying pleasure boats, and according to a yachting association official, have spent Rs400 crore (AUD$10 million) since Mumbai hosted India&#8217;s first international boat exhibition last year. 

The second boat exhibition was held 28 February to 2 March, and a slew of new boats hit Indian waters. If the trend continues, there likely wouldn&#8217;t be adequate space to berth the new acquisitions at the docks of Mumbai, or for that matter, Goa, Kochi (Cochin) or Chennai. 

The quayside off Mumbai&#8217;s Gateway of India is already clogged with boats of all sizes, uses and types, and people frequently jump from one vessel to another to reach their own. Prior to the boat show, there were around 20-30 pleasure boats here; post-event, there are more than 100. 

'It&#8217;s the typical Indian mentality&#8230;first they buy Porsches, then they think of roads,' says Malav Shroff, publisher of India&#8217;s first trade magazine India Boating, and chief executive of Mumbai-based Ocean Blue Marinas and Boat Haven Pvt. Ltd, which also organizes the boat show. 

'Now people are buying boats, they will think of building marinas later,' he adds. 

There are around 25 dealers today who are engaged in the pleasure-boat and water-sports trade, and companies such as Aquasail Distribution Co. Pvt. Ltd have begun gearing up for the boat show. 

'We have a strategy meeting soon, we&#8217;ll look at what boats to showcase, and what kind of projects we can handle,' says Aquasail founder-director Shakeel Kudrolli, who sold four yachts, costing between Rs25 lakh and Rs1.5 crore, and 50 dinghies at the inaugural boat show last year, and expects a repeat this year. 

Yachting association secretary general Ajay Narang says what was bound to pique further interest in sailing is the Volvo Ocean Race&#8212;the premier round-the-globe yachting event held every three years&#8212; that has now added India on its route for the next edition in 2009. 

'Pleasure sailing is on a growth path,' he says. 

Shroff senses a huge business opportunity in the anticipated shortage in docking facilities, and others agree; Kudrolli, for instance, has added building marinas to his service portfolio. To them, Goa, Chennai and Kochi provide the maximum &#173;opportunity. 

Marinas in Goa, with proper infrastructure, can take the load off Mumbai&#8217;s shores, says Kudrolli. Mumbai doesn&#8217;t have 'good water quality,' he says: the sea is choppy and the tide strong, and dredging can prove prohibitively expensive. Owners of yachts and smaller pleasure boats can dock their vessels in Goa, and plan their vacations around sailing. 

Feroze Contractor, managing director of Mumbai-based Ava Marine Services Pvt. Ltd, a 25-year-old company that maintains 35 yachts for clients, says there&#8217;s no space at the Gateway of India&#8217;s yacht area for the influx of new vessels. 

'All of a sudden, all these boats are being imported, we are overflowing, we have run out of space,' says Contractor, who also owns three boats. A proper marina will save space, more vessels can be accommodated, and docking made easier, reducing damage. 

He lists other advantages: owners will not have to invest in dinghies to reach their yachts moored in deeper waters, supplies of fuel and water for cleaning boats will be easier, and spillage of oil&#8212;now carried in jerry cans&#8212;will be history. 





*Entering Cochin Harbour by Yacht Aragorn - . .. *

Aquasail has completed a feasibility study for about six marina projects. The company, which has targeted Kochi, Chennai and Goa, is now waiting for official permission to build its first marina by the year end at any of the three centres. 

Ocean Blue Marinas, which has set up a modern marina for the Mumbai boat show, has 15 projects in Goa, Kochi, Chennai and along the coasts of Maharashtra and Gujarat. It&#8217;s already in the process of building one in Goa, where Shroff says permission is the easiest to acquire. 

Shroff is also looking at new business avenues through marinas; taking a cue from gated communities coming up around golf courses, he has signed a deal with a developer to build a marina in a real estate project in Goa. He declined to name the developer, saying a formal announcement would be made soon. 

Shroff says marinas will mushroom all along India&#8217;s shoreline, stretching across 7,000km, provided the government relaxes rules on marine environment protection. 'Permissions are the most difficult to get.' 

What could probably help is the global attention India is likely to attract during the Volvo Ocean Race. 

Kochi has been added as a stopover this year, and the Kerala government will build a 'racing village' across more than 2.5 acres, complete with accommodation for sailors, officials and more than 700 back-up personnel for the seven teams, a food court, theatre for cultural shows, and a nearby guest house complex for an expected 20,000 domestic and international tourists. 

About 2,500 diehard fans follow the racing yachts across the world, says yachting association&#8217;s Narang and local interest will be significant. 





*The west coast of India is a traditional seafaring region, and will soon welcome *
*a modern marina. - . . *

Goa is GO! 

Another shot in the arm for boating in the region is the interest of business people, including one tycoon from Goa and keen water sports lover, Umaji V Chowgule, MD at Goa Yacht Haven Pvt Ltd. 

Chowgule, whose family business interests range from mining to brewing the popular Arlem beer in Goa, is planning to build a 300-boat marina in Sancoale village, in Mormugao Taluka, at the mouth of the Zuari river in Goa with an investment of Rs 100 crore. 

Dredging can be prohibitively expensive affair and a controversial issue just like Hotel Leela discovered when the government planned to dredge the river Sal in south Goa. 

A sustained agitation by the surrounding villagers of Assolna, Cavelossim, Velim, Betul and Ambelim saw the casino ship, which was to operate on river Sal after the dredging of the river bed was finally towed away to the state capital, Panjim, and the government was forced to drop the controversial plan to dredge the river. 

Constructing a marina will involve dredging. And in the absence of marinas, parking can be a nightmare for yacht owners getting environmental and other related permission headaches. 

The construction of the marina is set to give Goa&#8217;s aim to get high-spending foreign tourists a shot in the arm, which the tourism authorities and ministers have trying to push albeit unsuccessfully over the last few years. 

Goa, as of now, as a tourist destination, has been a favourite haunt for back packers and low and middle budget foreign tourists. 

The berthing facility for marinas is also likely to create around 1,000 to 2,000 jobs directly or indirectly related to industry. 

A marina is a berth&#8217;s facility where boats are anchored and are safe from mischief mongers and from the uncertainties of the weather. The marina can also provide facilities like fuel stations, boat servicing, restaurants, bars and other recreational activities. 

'If you need to protect the leisure boat in the sea along Mumbai&#8217;s coast, you need to construct a marina. We need to construct amenities like marinas so that people can sail and even stay away from the coast for a weekend,' says Robin Walters, chairman of Walcon Marine Ltd, a worldwide expert in marina building, in a report in the Times of India. 

And he also allays the fears of environmental degradation due to the dredging operations. 'The concrete piles erected for a marina have adequate gaps for the water to flow beneath.'


----------



## Flintlock

*Indians fear repeat of 1990s as inflation soars*

4 hours ago

NEW DELHI (AFP)  With inflation shooting to a dizzying 13-year high, Indians are wondering whether they're watching a rerun of an old horror movie they'd rather not see again.

On Friday, inflation raced to 11.05 percent from 8.75 percent a week earlier, sending shares to a 2008 low as investors raced for cover fearing more interest rate hikes that would hit company profits and slow the economy.

The annual rate -- the highest since May 1995 when it stood at 11.11 percent -- also stunned economists as it was more than a full percentage point above market forecasts and spawned headlines like "Price quake hits Indian economy."

"We're getting into very dangerous territory," India's HDFC bank chief economist Abheek Barua told AFP.

The country's leading daily the Times of India noted the situation bore an eerie resemblance to 13 years ago when the current prime minister Manmohan Singh was finance minister in a previous Congress party-led government.

"Will history repeat itself?" the paper asked on the weekend, calling it "Unlucky 13 for Manmohan."

Back in 1995, foreign exchange coffers were brimming, the stock market was barrelling along and economic growth was strong. Companies had embarked on huge investment programmes to expand production capacity.

But the good times stopped when the government was faced with double-digit inflation and elections -- like now -- were less than a year away.

To contain inflation, the central bank jacked up interest rates. Stocks dived and economic growth fell as firms struggled to fund ambitious expansion plans with interest rates at 18 percent -- and Congress lost power.

The current Congress-led government has been desperate to tame inflation with elections due by May 2009, fearing a voter backlash from India's poor masses who have been hardest hit by price rises.

The latest inflation jump, which came after a sharp rise in state-set oil prices, has come on top of a slew of other indicators showing the trading deficit widening to record peaks, the fiscal deficit among the world's highest and economic growth slowing.

Is India headed for "the perfect storm" after five boom years? asked T.N. Ninan, editor of Business Standard in a weekend column.

The phrase comes from the title of a true story about three weather systems colliding, creating a furious storm, and is now used by economists to describe a situation where circumstances combine to produce a financial wipeout.

HSBC economist Robert Prior-Wandesforde said inflation could "remain in double-digits for at least nine months." Some economists, like Ashok Desai, former chief consultant to the finance ministry, see it rising to 15 percent.

"This horse -- inflation -- has bolted. However hard the government slams the door now, the damage is done," said veteran Indian columnist M.J. Akbar.

Several economists forecast a half-point rise in India's leading short-term lending rate, the repo, along with other aggressive credit-tightening measures -- possibly within a few days.

But industry has been warning against over-zealous tightening, especially since much of the inflation comes from forces beyond the government's control -- like global crude prices which have doubled in the past year.

"When we had a long period of economic recession beginning in 1996-97, the trigger was the preoccupation with inflation," noted T.K. Bhaumik, economic advisor to business lobby Assocham

For the moment, the government said it is sticking to its forecast of 8.5 percent growth for this financial year ending in March, down slightly from last year's red-hot 9.0 percent.

But economists have been coming up with forecasts as low as seven percent, still strong by Western standards, but not the double-digit growth economists say is needed to lift hundreds of millions from poverty.

"India's remarkable economic success of the last few years is fading somewhat," Prior-Wandesforde said in a recent client note.

Growth has softened at the same time as inflation has shot up, he said.

"This in turn has left policymakers scratching their heads and markets wondering what happened to India's supposed immunity to failure. Has miracle really turned to myth quite so quickly?" he asked.

AFP: Indians fear repeat of 1990s as inflation soars


----------



## Flintlock

*India gets its share of the Lions at Cannes*
22 Jun, 2008, 0000 hrs IST,N Shatrujeet, ET Bureau

CANNES: Cannes Lions 2008 is one show that the Indian ad fraternity isn't likely to forget in a hurry. *The festival started with a near-cosmic bang for the country when the Lead India campaign for The Times of India won the Direct Grand Prix on the first day itself.*

And after having been fed on a hearty diet of Lions all through the week, the Indian delegation awoke on Saturday to the news that the *country had claimed its first Integrated Lion in the Titanium & Integrated category  also for JWTs Lead India campaign. And a silver Lion in the hugely competitive Film category  for O&Ms Gas entry for Neo Sports  brought the curtains down on what was a superb streak for India. With the two Lions won on Saturday, the countrys going tally this year is 23, a full 11 Lions more than India managed in the last two editions of the festival.*

The Integrated Lion won by Lead India is clearly a crowning moment for JWT. *"The Grand Prix and the Integrated Lion evoke a sense of national pride; a historic milestone for the Indian ad industry. India has come of age on the global advertising stage," said JWT Indias chief Colvyn Harris.* He also singled out the agencys creative head Agnello Dias for praise: "For the very talented team at JWT that saw the campaign through, my heartfelt thanks. And especially to Aggie, the architect of the idea. Hes been relentlessly pursuing our dream and vision to improve our creative standards."

This particular Cannes outing has been a good one for the agency  its won seven Lions, including a Grand Prix, an Integrated Lion and a gold Lion. For the last couple of years we have been focused on improving our work and this is endorsement to that intent, said Harris. What makes JWTs Lead India achievement all the more admirable is the fact that it was one of the three campaigns from all over the world that ended up winning Integrated Lions  while the Integrated Grand Prix was won McCann San Francisco for its stunning Believe campaign for Xbox Halo 3, the other Integrated Lion winner is the redoubtable Crispin Porter + Bogusky (for Burger Kings Whopper Freakout).

The Titanium Grand Prix was awarded to Projector of Tokyo for its online entry Uniqlock. The Xbox Halo 3 campaign was also awarded the Film Grand Prix, with Fallon Londons Gorilla commercial for Cadbury Dairy Milk also winning the Grand Prix in the category  something unprecedented at Cannes.
*
The country has won in each and every award category  a feat India has never achieved before.
*

India gets its share of the Lions at Cannes- Advertising-Services-News By Industry-News-The Economic Times


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## Mohammed Azizuddin

^^^^Thats great.!!!.


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## Flintlock

Mohammed Azizuddin said:


> ^^^^Thats great.!!!.



Yeah. Indian media and advertising can be called world class without any exaggeration.


----------



## Flintlock

*Consultants blaze trail through India's red tape maze
*
20 hours ago

NEW DELHI (AFP) &#8212;* Consultancies say they are doing big business helping foreigners who want to set up shop in India find their way through its infamous bureaucratic maze.*

India's economy has been growing at a strong average nine percent over the past few years. Although that pace is slowing, it drew a record 20 billion dollars in foreign direct investment in the last fiscal year to March 2008, according to official figures.

But it's still a huge headache doing transactions in India and some consultants have spied a big opportunity here -- selling their expertise on how to wheedle and work their way around India's infamous red tape and infrastructure hurdles.

"Companies don't have the time or money for this. They need people like us to help them come to India," Cyrille Lepicier, a consultant who has lived in India for two years, said.

In fact, India's consulting sector has grown into a 2.4-billion-dollar business whose revenues have been rising by 25 percent annually, according to the Consultancy Development Centre, a research group promoted by the Indian government.

His New Delhi-based company LIS Enterprise offers a network of trusted lawyers, real estate brokers and software consultants to French businesses who want a piece of the action in India.

His own experience served as a whirlwind lesson on operating in India. It took him months get through a licensing process that should have just taken weeks.

"In India, anything can happen -- for good or bad," Lepicier said, laughing.

Despite his gruelling troubles getting started, he recommends India to his clients.

"I try not to go into great detail because then the company will say, 'India is not for us.' But I help them understand that there are drawbacks and benefits to India's growth," he said.

In recent years, foreign ownership laws have been sharply relaxed in this once protectionist market. Public-private partnerships are being encouraged to rapidly meet the new economy's transport and infrastructure needs.

And investors interested in certain sectors, including the attractive information technology field, are no longer burdened with cumbersome registration requirements.

Despite such strides, the government still offers a maze of paperwork that can leave investors wondering whether they will get in.

"There is no set procedure that says if you do a, b, and c, you'll get to d," said Rajiv Kumar, director of the Indian Council for Research on International Economic Relations.*

"You still need 17 clearances to set up shop in India. This may be well known to Indian entrepreneurs, but it's very difficult for a foreigner to decide that they would still like to come to India," he said.*
*
Paperwork aside, finer details like uninterrupted electricity also continue to dog investors.*

"We've seen a lot of clients who get frustrated and go away before things happen. If you understand the environment, you can turn the challenges into advantages," said Atul Dhawan, a partner at consulting firm Deloitte Haskins & Sells.*

Dhawan said investors have found innovative solutions to India's problems, such as generating their own electricity to get round frequent power outages and increasing inventories to address transportation hiccups.*

Local businesses and the government, too, are joining the consultancy bandwagon to offer services to foreign investors interested in India, particularly smaller enterprises that lack deep pockets to weather India's challenges.

"We'll help steer them to the right place and help them grow faster," said Harsh Pati Singhania, senior vice president of the Federation of Indian Chambers of Commerce and Industry.

AFP: Consultants blaze trail through India&#39;s red tape maze


----------



## Bushroda

*A passage back to India*
Assetz, UK
23rd June 2008

That India's economy has been booming is no longer news. The last few years have seen a country once thought of by some for its colonial past, temples and culture becoming a modern, thriving economy driven by high technology and a relentless enthusiasm for growth.

In the midst of this, as the retail sector has mushroomed and a middle class has emerged, the property market has boomed as well, particularly in the areas of greatest economic development in and around the huge cities. 

These are all closely linked, according to the Associated Chambers of Commerce and Industry of India, which predicted in January this year that the 2007 statistics for these two sectors would show 40 to 45 per cent growth through 2007 for each. The body also said this would carry on in 2008.

With this kind of growth, it is small wonder that India is attracting substantial overseas investments. Discussing this, Jaideep Singh, head of the India Desk at Knight Frank stated: "Bombay and Delhi are doing very well here. The places investors from the UK usually go for are Delhi, Bombay, Chandigarh, Bangalore  there are lots of places."

Mr Singh added that this is particularly true of Britain's Indian population. Where once India was a place people left to come to Britain looking for a better life, now those ex-pats and their children are looking back to the subcontinent and its many opportunities.

He stated: "Non-residents who are originally from India buy properties there. A lot of them are now buying in India because of the appreciation there. A lot of them have invested in places like Delhi, Bombay, Chandigarh, Jaipur  all the big cities."

Of course, there may be good - and obvious - reasons why this sector makes up a large part of Britain's investors in India. Shared culture, language, an understanding of ways of doing business and family links are all reasons which may pass by other Britons looking to India, although none of these are necessarily a reason for others to avoid the country. Good research may be needed, however, to close any gaps in knowledge.

In addition to the places mentioned by Mr Singh at Knight Frank, other locations have also been noted as popular with the Anglo-Indian buyers. The Press Trust of India has named other locations such as Gujarat, Gurgaon, Pune and Jaipur as also being centres of attention.

Reporting from its London base, the Press Trust of India said the UK capital was poised to host the "India Homes Fair", run by the Housing Development Finance Corporation, which will run for two days from June 28th and feature 18 major developers. Not only is the investment pouring into India from ex-pats, but the developers, it appears, are making every effort to bring in more.


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## Neo

*Top Indian airline posts $55m loss​*
MUMBAI, June 24: Indias largest private sector airline, Jet Airways, on Tuesday posted a fourth-quarter net loss of 2.21bn rupees ($55m) after being hit by high fuel costs, the company said.

The loss for the quarter ended March 31 was against a net profit of 880 million rupees the previous year. Total income for the quarter rose 37.1 per cent to 27.2 billion rupees.

For the full year ending March, the carrier announced a net loss of 2.53 billion rupees from a net profit of 279.4 million the previous year. Full-year revenues rose 28.1 per cent to 94.81 billion rupees.AFP

Top Indian airline posts $55m loss -DAWN - Business; June 25, 2008


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## Neo

*Tata Steel FY2007-8 net profit $2.9bn ​* 
Friday, June 27, 2008

MUMBAI: Tata Steel, the worlds sixth-largest steelmaker, on Thursday reported a tripling in consolidated net profit for the 2007/08 financial year largely due to its purchase of Corus Group.

Tata Steel, which completed a $13 billion deal to buy Corus in April 2007 in Indias biggest foreign takeover, said consolidated net profit rose to 123.22 billion rupees ($2.9 billion) for the year to March 31 from 41.66 billion in 2006/07, which did not include Corus.

Corus, which contributes the bulk of Tata Steels 28 million tonne annual capacity, is expected to drive earnings in coming quarters as it is able to raise prices to compensate for higher raw material costs of iron ore and coal, while the Indian government has pressed steelmakers to hold domestic prices.

Global steel prices have risen by almost a half this year and are expected to extend gains in the second half on 2008, boosting profits of steelmakers, as raw material costs continue to climb and demand shows little sign of abating, with Chinas focus to curb exports keeping supply tight.

Tata Steels consolidated net sales for the fiscal year rose more than five times to 1,315.4 billion rupees.

Tata Steel has just 5 million tonnes of its total capacity in India, and the consolidated results include Corus and its other operations in Southeast Asia.

On a standalone basis, net profit for the year rose to 46.87 billion rupees, from 42.22 billion in the year to March 2007.

Tata Steel said it produced 4.9 million tonnes of steel from its India plant during 2007/08 and sold 4.8 million tonnes.

Tata Steel FY2007-8 net profit $2.9bn


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## Flintlock

*India, Japan to sign currency swap deal on June 29*

29 Jun, 2008, 0127 hrs IST, ET Bureau
NEW DELHI: India and Japan will ink a blockbuster currency swap deal on Sunday. The bilateral swap arrangement (BSA), scheduled to be signed at Basel in Switzerland on June 29, would be effective immediately, sources told SundayET.

The BSA will be signed by Bank of Japans governor Masaaki Shirakawa and Reserve Bank of India governor Y V Reddy.

SundayET was the first to report on June 17, 2007, that India was eyeing its first-ever currency swap deal with Japan. Japan, however, has swap agreements with countries such as China, South Korea and Thailand.

The swap arrangement will enable both the countries to swap yen and rupees against US dollar up to $3 billion. That means, Japan will accept rupees and give US dollars to India if the need arises and India too will accept yen against dollars. However, drawing beyond 20% of the stipulated amount ($3 billion) would require India to have an IMF (International Monetary Fund)-support programme.

It was learnt that negotiations ran into rough weather once Japan insisted that such a swap arrangement could be possible only if both countries had IMF-support programmes. Significantly, IMF has no presence in India for several years now.

Finally, India prevailed upon Japan to agree on a relaxation on the matter and it was decided that up to 20% of the maximum amount of drawing could be disbursed even without having an IMF-support programme.

"As the arrangement is just for $3 billion and India has over $300 billion foreign exchange reserves, it is more a milestone in mutual co-operation between the two countries than a tool to address liquidity difficulties. However, such an arrangement will help concerned nations to have stability in financial market," sources said.

In fact, Japans then prime minister Shinzo Abe, during his visit to India in August 2007, announced that India and Japan would strike a currency swap agreement to address the short-term liquidity crunch.

India, Japan to sign currency swap deal on June 29- Economy-The Sunday ET-Features-The Economic Times


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## nitesh

*The real reason why stock markets are crashing*
The real reason why stock markets are crashing


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## Neo

*India's Exports Increase at Slowest Pace in 14 Months ​*
By Kartik Goyal

July 1 (Bloomberg) -- India's exports grew at the slowest pace in 14 months in May as weakening global expansion hurt shipments of clothes, steel and electronic goods. 

Overseas sales rose 13 percent from a year earlier to $13.8 billion, slower than April's 31.5 percent gain, the government said in a statement in New Delhi today. Imports increased 27 percent to $24.5 billion, widening the trade deficit to a record $10.76 billion. 

Shipments are likely to slow this year as the fastest price gains in more than 13 years prompted Prime Minister Manmohan Singh to ban shipments of some food products and other commodities to contain inflation. A slowdown in the U.S. and other developed countries is hurting exports across the region. 

``The biggest challenge to the external sector this year is slowing global demand and rising oil prices,'' said Sonal Varma, a Mumbai-based economist at Lehman Brothers Inc. ``We expect export growth to moderate.'' 

Global trade growth is likely to drop in 2008 after slowing to 5.5 percent in 2007 due to weaker demand in Europe and Japan, expectations of a recession in the U.S. and faster inflation, according to the World Trade Organization. 

South Korea's export growth cooled in June to 17 percent from a year earlier, less than the 26.7 percent gain in the previous month, according to figures released today. Hong Kong's overseas sales expanded at a slower pace of 10.3 percent in May. 

U.S. Slowdown 

The share of the U.S. in India's total exports declined to 13.3 percent in the ten months to January, compared with 15.1 percent in the year-ago period, according to the latest breakdown of overseas sales released by the central bank. India gives a more detailed analysis of exports five months after releasing initial data. 

Shipments to European Union and Asian developing countries accelerated while exports to OPEC and Latin American nations moderated, the central bank said. 

India has over the past three months banned the export of pulses, wheat, rice, cement and some steel products to contain inflation, that accelerated to 11.42 percent in the week ended June 14. 

Exports of steel items declined 2.1 percent in the ten months to January, compared with a 51.4 percent gain in the year-ago period, the central bank said in a report. Overseas sales of electronic goods grew at a slower pace of 6.4 percent, compared with 34.9 percent a year-ago. 

Cost Competitiveness 

Trade Minister Kamal Nath last week said he's confident of meeting the $200 billion exports target for the current fiscal year that started April 1. Better cost competitiveness and the rupee's depreciation are expected to help exporters, he said. 

India's rupee declined for a third day today on concern that rising oil prices will increase demand for dollars and losses in the benchmark stock index will keep global funds away from local shares. The rupee fell 9.2 percent this year to 43.405 a dollar as of 12:50 p.m. in Mumbai today, the third- worst performance among the 10 most-traded Asian currencies. 

``The rupee will remain under pressure in the near-term,'' said Shubhada M. Rao, chief economist at YES Bank Ltd. in Mumbai. ``The Reserve Bank may not like a depreciating trend and we expect the currency to start appreciating in the later part of the year.'' 

India plans to withdraw tax incentives it had announced last year to help exporters tide over the impact of a more than 10 percent gain in the rupee, the Financial Express reported today, citing India's Commerce Secretary G. K. Pillai. 

Export Promotion 

To help boost overseas sales, the government plans to focus on promoting exports to 10 countries including Mongolia, Bosnia- Herzegovina, Albania, Macedonia, Croatia, Honduras, Djibouti, Sudan, Ghana and Colombia, Nath said on April 11. 

Trade Minister Nath has set a target of more than tripling India's share of world trade to 5 percent by the year 2020 from the current 1.5 percent. 

India's oil imports in May rose 50.8 percent to $8.46 billion as Indian refiners paid more for import of crude oil imports. India relies on imports of overseas crude oil to meet its three-quarters of its energy needs. Non-oil imports gained 17.4 percent to $16.08 billion. 

To contact the reporter on this story: Kartik Goyal in New Delhi at kgoyal@bloomberg.net. 

Bloomberg.com: India & Pakistan


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## Neo

*Jet Airways India, Deccan Fall to Record Lows on Fuel ​*
By Vipin V. Nair

July 1 (Bloomberg) -- Jet Airways (India) Ltd., the nation's biggest domestic carrier, and Deccan Aviation Ltd. fell to record lows in Mumbai on concern higher jet fuel prices will widen losses from an estimated $1.5 billion this year. 

Jet Airways slumped 11.3 percent to 380.75 rupees, extending its decline for the year to 62 percent. Deccan, the biggest low- cost carrier, declined 5.1 percent to 56.85 rupees. 

Indian Oil Corp., the nation's largest refiner, raised prices today, bringing increases for jet fuel to 52 percent since January. Higher fuel costs, the biggest expense for airlines, led to Jet Airways posting its first loss in five years. 

``Jet Airways' shares have room to decline further as it's expected to post losses for the next two years,'' said Lokesh Garg, an analyst with Kotak Securities Ltd., who rates the stock `sell'. ``It may touch as low as 300 rupees.'' 

Jet Airways and its budget-carrier unit may post a combined loss of 20 billion rupees in the next two fiscal years, Citigroup Inc. said in a note to clients on June 26. 

The carrier today fell to the lowest since it sold shares for 1,100 rupees apiece in Feb. 2005. 

`Catch-22' 

``The airlines are facing a Catch-22 situation. They are under pressure to raise fares because of the rising fuel costs. But that may lead to lower demand and affect load factors,'' said Kapil Kaul, chief executive officer of the local unit of Centre for Asia Pacific Aviation, an industry consultant. ``Increase in oil prices is going to be a regular affair.'' 

India's carriers may double their combined losses to $1.5 billion this year on fuel and discounted tickets, the Centre predicted last month. 

SpiceJet Ltd. declined 11 percent to 22.15 rupees, the lowest since Dec. 10, 2004. 

To contact the reporter on this story: Vipin V. Nair in Mumbai at vnair12@bloomberg.net. 

Bloomberg.com: India & Pakistan


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## Neo

*India Stocks Drop to Lowest in More Than a Year on Rate Concern ​*
By Saikat Chatterjee

July 1 (Bloomberg) -- India's benchmark Sensitive Index fell for a third day to its lowest in more than a year on concern that rising interest rates will hurt profits of banks and property developers. 

ICICI Bank Ltd., the nation's second-largest lender, spiraled near a two-year low after raising the rate charged to its best borrowers. DLF Ltd., the nation's biggest developer, plunged to a level last seen 12 months ago. 

``The high interest rates are already hurting demand for loans and other consumer goods,'' said R.K. Gupta, who manages the equivalent of about $100 million of stocks at Taurus Asset Management Co. in New Delhi. 

The Bombay Stock Exchange's Sensitive Index, or Sensex, fell 499.92, or 3.7 percent, to 12,961.68 at the 3:30 p.m. local time close. This is the index's lowest level since April 5, 2007. The S&P CNX Nifty Index on the National Stock Exchange declined 143.80, or 3.6 percent, to 3,896.75. 

Property developers fell after mortgage lenders including Housing Development Finance Corp., the country's largest, and ICICI Bank said they will raise interest rates. ICICI Bank fell 6.5 percent to 589.10, its lowest since Aug. 28, 2006, after raising the rate it charges its best borrowers to 16.5 percent from 15.75 percent. State Bank of India, the nation's biggest, fell 7.8 percent to 1,025.30. 

DLF, Unitech 

DLF fell 6.9 percent to 369.1 rupees, its lowest since July 4, 2007. Unitech Ltd., India's second-biggest developer, declined 5.6 percent to 161.75 rupees, its lowest since Oct. 11, 2006. 

Stocks also fell after India's federal ruling coalition and its communist allies failed to resolve their differences over a nuclear accord with the U.S., threatening the survival of Prime Minister Manmohan Singh's government. The communist parties, whose support is necessary for the ruling coalition to maintain its majority in parliament, have threatened to withdraw their backing if the government proceeds with the accord. 

``A mid-term election in India looks quite possible and what is worse is that the country may have to deal with another hung parliament,'' said Taurus Asset Management's Gupta. In addition, ``expectations of quarterly earnings that are due next week do not look very good.'' 

Housing Development Finance will report on July 16. 

Fuel Prices 

India's government last month raised retail fuel prices to pare more than $50 billion of revenue losses at refiners, which are forced to sell fuel at below-market price. The fuel price increases contributed to the acceleration in India's inflation to the fastest pace in 13 years. 

Oil today rose, extending this year's 48 percent gain, after ABC News reported Israel is increasingly likely to attack Iran this year, starting a conflict that would threaten supplies from the Middle East. Crude oil for August delivery rose as much as 2 percent to $142.73 a barrel in electronic trading on the New York Mercantile Exchange. 

The following stocks rose or fell. Tickers are in brackets behind company names: 

Jet Airways (India) Ltd. (JETIN IN) dropped 48.40 rupees, or 11 percent, to 380.75, a record low. Indian Oil Corp. (IOCL IN), the nation's largest refiner, yesterday said it will raise the price of jet fuel by 4.4 percent starting today. 

JSW Steel Ltd. (JSTL IN) declined 124.7 rupees, or 14 percent, to 775.90. The country's third-biggest producer of the metal plans to spend 60 billion rupees in the year ending March 31 to expand and buy mines in India and overseas to increase raw material supply, the Financial Express reported. 

Tata Motors Ltd. (TTMT IN) fell 17.55 rupees, or 4.1 percent, to 408.5. The nation's largest maker of trucks and buses said it will increase the price of commercial vehicles by an average 3 percent to cover higher input costs. The prices will be raised from today, the Mumbai-based company said. 

To contact the reporters on this story: Saikat Chatterjee in New Delhi at schatterjee4@bloomberg.net 

Bloomberg.com: India & Pakistan


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## Neo

*Citigroup to Raise $400 Million for Indian Roads​*
By Sumit Sharma

July 1 (Bloomberg) -- Citigroup Inc., the biggest U.S. bank, plans to raise an additional $400 million for investments in India with Infrastructure Development Finance Co. Ltd., said Sanjay Nayar, chief executive for the firm's Indian operations. 

Citigroup and Infrastructure Development, a Mumbai-based financing company, have already raised $525 million for a fund that will invest in roads, ports, power plants and other utilities in India, Nayar told reporters in Mumbai. 

Prime Minister Manmohan Singh is wooing funds to build the airports and power stations needed to sustain the nation's economic growth. 3i Group, Europe's biggest publicly traded private equity firm, raised $1.2 billion in April for India, where infrastructure projects are estimated by the government to reach $450 billion by 2012. 

Blackstone Group LP, the world's biggest buyout firm, isn't part of this fund, Nayar said. Citigroup had agreed to start a $5 billion Indian infrastructure fund with Blackstone and two Indian finance companies in February 2007. 

Bloomberg.com: India & Pakistan


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## Flintlock

*Cuba seeks Indian help to set up 150,000 bpd refinery*
Tue Jul 1, 2008 12:30pm BST

NEW DELHI, July 1 (Reuters) - Cuba has invited Indian firms to invest in a planned 150,000 barrels a day refinery in the island nation, India's oil ministry said in a statement on Tuesday.

It also sought India's help in upgrading and expanding its existing refineries at a meeting in Madrid on Monday between Indian Oil Minister Murli Deora and his Cuban counterpart Yadira Garcia Vera, the statement added.

The two countries have finalised the India-Cuba Hydrocarbon Agreement for co-operation in the oil and gas sector, it added without elaborating.

ONGC Videsh Ltd, the overseas investment arm of state-run explorer Oil and Natural Gas Corp (ONGC.BO: Quote, Profile, Research), has stakes in nine exploration blocks in Cuba, and total ownership of two. (Reporting by Nidhi Verma, Editing by Mark Williams) 

Cuba seeks Indian help to set up 150,000 bpd refinery | Reuters.com


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## Neo

* Indias trade deficit widens to record ​* 
Wednesday, July 02, 2008

NEW DELHI: Indias trade deficit widened in May to a record $10.77 billion as the pace of export growth slowed and oil import costs surged, official data showed on Tuesday, helping the rupee fall to a 15-month low. 

Analysts said the surge in global oil prices would keep pressure on the deficit and rupee in months ahead with demand for oil products in Asias third-largest economy seen remaining robust despite a hike in fuel prices. 

The rise in the oil import bill was expected as global prices have surged. The market was anticipating a high trade deficit and current account deficit, said D K Joshi, principal economist at domestic ratings agency CRISIL. Data released by the Commerce and Industry Ministry showed Indias export growth slowed to a 14-month low of 12.9 per cent in May, sharply down from expansion of 36.6 per cent in April due in part to slowing sales in key markets like the United States. 

Exports in the month stood at $13.78 billion, up slightly from $12.21 billion a year ago, while imports grew by an annual 27.1 per cent to $24.55 billion, driven mainly by oil purchases, which surged by 50.8 per cent to $8.47 billion. 

Global crude oil prices rose almost 16 per cent in May to $130 a barrel at the end of the month. On Tuesday, oil was trading at just over $142 a barrel. 

The trade deficit in May widened from $7.1 billion in the same month a year ago, and was up from $9.87 in April 2008. The rupee eased to a 15-month low of 43.440/450 to a dollar at 1030 GMT, sharply lower from Mondays close of 43.0250/0300 as rising prices of crude intensified concerns over the trade deficit and the stock market fell sharply. 

The local unit has lost more than 9 per cent so far in 2008. For the first two months of the 2008/09 fiscal year, the deficit stood at $20.64 billion, higher than $13.92 billion in the same period of last year. 

In the first five months of the calendar year, Indias trade deficit has amounted to $41 billion, more than 60 per cent higher than $25.5 billion deficit for the same period of 2007, Robert Prior-Wandesforde, an economist with HSBC, said in a report. 

At this rate, the country is heading for a triple-digit trade deficit in calendar 2008, equivalent to about 10 per cent of GDP. But other analysts said the depreciating rupee would help revive export growth and improve profit margins of software exporting firms.

Indias trade deficit widens to record


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## Bushroda

*Exploring India's booming economy*
Morris R. Beschloss,
The Desert Sun, CA
July 3, 2008

Although India is acknowledged as one of the world's hottest growth areas, little is known of the components that are fast pushing this nation to the top among the world economies.

*Population*

India possesses the fastest growing population in the world, expanding at the rate of 16 million per year. India already is pressing China for the No. 1 spot and is due to pass its fellow Asian giant within the next generation, on its way to 1.5 million people.

This mega-nation's per-capita income is destined to eventually sextuple the per-capita income of its giant neighbor because of its much greater drive toward modern technology.

India's middle class numbers 330 million and is fast growing. Their newly earned money is spent on retail sales growth, averaging 13 percent or more for the next several years.

*Infrastructure*

The government's investment in the country's infrastructure is skyrocketing, rising 9.9 percent in 2007. Automotive sales are accelerating at a 17 percent growth rate; airline passenger traffic is expected to more than triple over the next five years from 14 million to about 50 million people per year.

India's government already has issued plans on spending $90 billion on industrial-related projects over the next three years.

This will include:

High-speed rail freight lines.

Power plants to supply an additional 4000 megawatts.

Three new seaports.

Six new airports.

12 new industrial clusters.

Over the next four years, by 2012, the Indian government plans on spending a total of $500 billion to build out and improve India's infrastructure.

*Manufacturing*

Manufacturing accounts for almost 30 percent of India's economy. India has lately become a world leader in the technology service industry. It now handles the outsourcing for hundreds of U.S.-based computer hardware and software manufacturers and telecoms.

The single largest employer in India is the manufacturing sector, which employs more than 100 million people. This sector is now growing at an annual clip in excess of nine percent.

*Corporate earnings*

Corporate earnings in India are growing at an astounding 35 percent annual rate. The 30 largest companies of that most populous nation have increased their earnings at 35 percent in this year's first quarter. It's far surpassed projected revenues by 20 percent.

Of 800 publicly-traded companies, average earnings growth has reached 17 percent.

Three companies have doubled their earnings over last year - Ambuja Cement and telecom giants Bharti Airtel and Reliance Communications.

Such world-class giants as Tata Steel and pharmaceutical company Ranbaxy Labs also have experienced major earnings growth, with 12 percent and 19 percent growth, respectively.

Tata Motors is expected to put thousands of cars on India's growing network of highways late this year. It's expected that millions of Indians will eventually own these incredibly cheap cars ($2,500 each).

*Investment*

Private equity investors are now putting more money into India than in China. Nearly $20 billion in private equity poured into India in 2007, a 156 percent jump over 2006, and 34 percent greater then invested in China in 2007. Infrastructure investments account for the lion's share of the private equity flows into India, followed by telecom, banking and financial services, and real estate.

*Natural resources*

To cap such a long list of advantages is India's quest for an increasing search for oil sources all over the world. Its steel industry expects growth of about 8 percent a year as demand nearly doubles from the current level of 36 million tons of steel per year to 65 million tons by 2012. This demands a huge consumption of iron ore.

India's copper consumption stands about 2.5 percent of the world consumption, still less than China's per capita consumption. With the stupendous growth that lies ahead, this subcontinent will be relying on an increasing amount of the world's dwindling supply of global natural resources.

*Morris R. Beschloss writes frequently for The Desert Sun. His blog on mydesert.com is updated as news happens. He can be heard on KPSI Radio 920 AM every Friday 8-9 a.m., KGAM Radio 1450 Saturday 9-10 a.m., seen on KESQ Channel 3, and on Time Warner Cable TV Channel 111.*


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## Flintlock

*End may be in sight for today's G8*
Mon Jul 7, 2008 4:29am BST

By Alan Wheatley, China Economics Editor

TOYAKO, Japan (Reuters) - As the Group of Eight rich nations get down to business at their annual summit, Asia finds itself confined to the fringes, asking how long it must wait for political power to flow east to match its economic muscle.

Japan, of course, is a founding member of the G8. But efforts to recognise the clout of the region's emerging economic dynamos are fumbling and piecemeal.

Some Asian states recently won a few more votes at the International Monetary Fund. India's finance minister is in the running to chair the Fund's main policy-setting panel, while Hong Kong publicly called last week for an Asian to be the next head of the influential Bank for International Settlements.

And China, India, South Korea, Indonesia and Australia are among 14 countries that will make a cameo appearance at this year's summit, which is taking place at a luxury hilltop resort on the northern Japanese island of Hokkaido.

But this is small beer considering the sea change in the world economy since the first "fireside chat" summit in 1975.

In that year, China was in the final spasms of Mao Zedong's Cultural Revolution and India plunged into a state of emergency. The two neighbours were economic dwarfs.

Today, though not yet giants, the pair leads a phalanx of developing countries whose rapid growth has driven energy and commodity prices to such dizzy heights that the fallout will be a major topic of this week's talks.

"If you think of the G8 as a club of the most influential countries in the global economy it's hard to see how you can keep China and India out," said Hal Hill, an economics professor at Australian National University in Canberra.

Indeed, President Nicolas Sarkozy of France said on Saturday it was "not reasonable" for the G8 -- which also includes the United States, Japan, Germany, Britain, Italy, Canada and Russia -- to keep meeting without emerging powers like China and India.

End may be in sight for today's G8 | Reuters.com


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## Flintlock

*India Inc hopes reforms will now get a push forward*
8 Jul, 2008, 1441 hrs IST, IANS

NEW DELHI: With Left parties withdrawing support to the United Progressive Alliance (UPA) government on Tuesday, India Inc hopes the slow-moving economic reforms programme will now be put on the fast track.

From key decisions pertaining to the financial sector to further opening up of the Indian economy to foreign investors, the Prime Minister Manmohan Singh government had its hands tied down by the crucial support from Left parties.

These, the corporate sector feels, can now see the light should the government survive following support from Samajwadi Party, which has been known to be supportive of the private sector when it was in power in Uttar Pradesh.

"The nuclear deal will now come to a logical conclusion. The economic reforms will re-commence," said D.S. Rawat, secretary general of the Associated Chambers of Commerce and Industry (ASSOCHAM).

"For long there has been a hide and seek game going on between the Left parties and the UPA government over the civilian nuclear deal with the US," Rawat told reporters in one of the first reactions from the corporate sector.

An immediate reaction also came from the stock market where equities staged a smart rally and made up for some of the lost ground minutes after Communist Party of India-Marxist (CPI-M) general secretary Prakash Karat announced the withdrawal of support.

The sensitive index (Sensex) of the Bombay Stock Exchange (BSE), which had lost 476.03 points in the morning, immediately cut its losses to 208.8 points, or 1.54 percent.

"Left leaders were creating hurdles in implementing some decisions like foreign direct investment in insurance sector," said D H Pai Panandikar, corporate analyst and former chief of the Federation of Indian Chambers of Commerce and Industry (FICCI).

"The government can now think of opening up the insurance sector," he said, adding one of the important issues, which the Left was consistently opposed to, was allowing 49 percent foreign investment in the insurance sector.

"The deal will also help India become energy-efficient," said the president of the RPG Foundation, a Delhi-based economic policy think-tank.

Senior functionaries of the Confederation of Indian Industry (CII), however, were unavailable for immediate comment, but some members hoped the realignment within the dynamics of the UPA government would result in reforms being put back on track.

"The Left leaders were never creative in their approach about issues of national importance. They were acting more as activists than responsible coalition partners," said Dalip Kumar, senior economist with the National Council of Applied Economic Research (NCAER).

"The pace of reforms, however, will depend upon the kind of support which the government now gets from its new allies like the Samajwadi Party," he added.

India Inc hopes reforms will now get a push forward- Indicators-Economy-News-The Economic Times


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## Bushroda

Stealth Assassin said:


> *India Inc hopes reforms will now get a push forward*
> 8 Jul, 2008, 1441 hrs IST, IANS
> 
> India Inc hopes reforms will now get a push forward- Indicators-Economy-News-The Economic Times



Good riddance of these commie jack@sses. Something that should've been done a longtime back.


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## muse

*Indian software exports cross $40 billion mark*

*NEW DELHI: Indian software exports grew 29% to cross the $40 billion mark in the fiscal year just ended despite global economic turmoil, the outsourcing industrys top body said.

I would request you to focus not just on the number but on the maturity and resilience the industry has shown, Som Mittal, the president of the National Association of Software and Services Companies told reporters Wednesday.

Never have there been so many uncertainties in the overall world. IT export growth for the fiscal year ended March 31 was down 4$ from the previous fiscal year, with earnings sharply reduced after the rupee gained more than 12% against the dollar in 2007, the body has said.

After what hit us last year, and I would say hit, we were very susceptible to the currency, said Mittal, saying last years slowdown was a wake-up call to the industry.

If the rupee would always depreciate, we would always make money. But we dont know which way the rupee will go. We need to weed out inefficiencies.

The United States is the biggest market for Indian software and service exports, which are forecast by the industry group NASSCOM to hit $60 billion by 2010. But the software services industry was able to weather a US economic slowdown down fuelled by a housing loan crisis by diversifying into new areas and growing the domestic Indian market, Mittal added.

Last year the domestic software services market grew by 26% to almost $12 billion, taking the industry as a whole past the $50 billion mark. Software and services revenue is supposed to grow between 21 and 24% in the current fiscal year, a decrease NASSCOMs Mittal attributed to the industrys larger base and ongoing global economic uncertainty. The first round of growth is always easier, said Mittal. The next 10 years is going be structurally very different. Mittal said the industry would need to compete harder by adopting automation and increasing services in other languages in order to continue to post high growth. Mittal also expressed concern about a talent crunch and said the industry would have to increase its training efforts.

The industry currently employees two million people but Dun and Bradstreet, the US-based provider of financial information, has estimated that the industry would face a shortage of half a million skilled workers by 2009.* afp

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## Bushroda

*India to register growth rate of 8.5 pc this year: Official*

Colombo (PTI): Indian economy is expected to grow by over 8.5 per cent during the current fiscal notwithstanding indications of a global slowdown, a top Indian government official said on Thursday.

"We are hopeful that India will continue to maintain high economic growth and the economy could grow by at least 8.5 per cent during 2008-09," Commerce Secretary Gopal K Pillai said here.

Pillai said the demand for infrastructure funding was estimated at 500 billion dollars and the present annual flow of 80 billion dollars investments in the core sectors was encouraging.

He said the fundamentals of the economy were satisfactory and augured well for high growth.

Pillai said if the current level of investments in the infrastructure was maintained there was no reason why India could not continue to register a GDP growth of between 8-10 per cent during the next few years.

As per the estimates released by the Central Statistical Organisation, real GDP at factor cost grew by 9 per cent in 2007-08 after recording a 9.6 per cent growth in 2006-07.

While services continued to grow robustly at 10.8 per cent during the last fiscal, the industry reported a slight slowdown in growth in 2007-08.

Industrial growth at 8.3 per cent in 2007-08 was considerably lower than the 11 per cent growth recorded in 2006-07.

The manufacturing sector grew at 8.8 per cent during the previous fiscal, however lower than the strong 12 per cent growth clocked in 2006-07.


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## Bushroda

*UAE affected by rising inflation in India*
By Subramani Dharmarajan, Senior Reporter
XPRESS, United Arab Emirates
July 10, 2008

With rates hitting a 13-year high of 11.42 per cent towards end of June in India, there is an overriding concern over a cascading effect on prices of food and other commodities imported by traders in the UAE.

These concerns have grown after Indian economists predicted that inflation would peak at 12.5 per cent to 13 per cent over the next two months in the wake of rising world oil prices.

Naturally with Indian inflation in double digits and no signs of stabilising anytime soon, imports from India are sure to cost more, said Saifee Rupawala, CEO of EMKE Group, the parent company of LuLu hypermarket chain. With the UAE economy already reeling under the global inflationary trends and prices of almost all consumer goods, both food and non-food, witnessing unprecedented rise, I think the rise in Indian inflation will only add to the woes. The Indian government has already put export restrictions in place on many commodities such as non-basmati rice and pulses, he noted.

Silver lining

Rupawala also saw a silver lining, We do maintain optimum stock levels and also import directly from other countries. We dont see any need to press the panic button yet since our dedicated international buying team is always exploring new sourcing centres.
More on Xpress: Homepage | Dubai's newest and truest tabloid newspaper, online

Veteran hotelier Lakhmichand Lulla, who founded the Ambassador Hotel, reckoned that
with cheaper vegetables coming from Jordan and Syria, the impact of the rise in prices of
Indian vegetables imported into the UAE would be somewhat blunted.

Kiran Sangani, chartered accountant and senior member of the India Business Professional Council, said that prices of rice, sugar and milk in India have shot up to 30
per cent, while the cost of living in the UAE has gone up to 12 per cent over the past two months, even as rise in rents, educational fees and transportation costs continue to
pummel families. If you want to get good quality vegetables and fruits, they come at Dh40 to Dh50 per kilogram, said Sangani.

The rising inflation is also affecting the workplace.

According to him, businessmen cant bring new people to the UAE without shelling out 20 to 30 per cent more in salaries, both to retain existing staff and recruit more personnel from India. Sangani said the comfort pay level for a family of four to live decently in rented flat is Dh20,000 to Dh25,000 a month.


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## Flintlock

*'SEZs driving forces of economic growth'*

13 Jul, 2008, 1235 hrs IST, IANS
NEW DELHI: India's booming economy will scale further heights if steps like special economic zones (SEZs) are executed effectively, says Rashid Alleem of Hamriyah Free Zone Authority (HFZA), Sharjah.

The energetic director general of HFZA, a free economic zone spread in an area of 25 million sq metres, does not believe that inflation and sluggish world economy could hamper India's medium and long-term growth process.
*
"Inflation is a global phenomenon. There is sluggishness in the world economy. Your economy is on the right track. Pace of economic process is quite satisfying,"* Alleem said in an interview.

Quite impressed by India's SEZ policy, Alleem said there was no scope for either complacency or short-sightedness to maintain a competitive edge in today's world economy.

"Economy is moving so fast. It is an era of free zones. If you sit with clarity and a focussed vision, there is no problem. India has to set business examples for others," he said.

Alleem, along with a delegation from the United Arab Emirates (UAE), was in the city to attend a global conclave on "Special Economic Zones: What Will Drive Them", organised by India's leading industry lobby Associated Chambers of Commerce and Industry of India (Assocham) July 9.

Referring to HFZA, Rashid said: "Around 3,000 companies have their set-ups in our free economic zone. Around 300 of them are Indian companies like Essar and Larsen & Toubro."

HFZA, which started operations in late 1995, has seven zones, namely, construction world, maritime city, steel city, timber land, oil and gas zone, perfume world, and petrochemical zone.

"There are 400,000 people employed in HFZA. One can just imagine the kind of job potential an SEZ possesses ," he said.

Assocham also conferred the best performing SEZ award on HFZA. Planning Commission member Anwarul Hoda gave the award to Rashid.

Asked if he had plans for collaboration with Indian firms for developing more free economic zones in his country or in India, Rashid said discussions were going on, but nothing tangible had yet come out.

"We are, of course, in touch with some Indian players, but I do not have anything tangible to share with you. It is perhaps too early to think of results," Rashid said.
*
In India, there are 462 formally approved SEZs at present, of which 222 have already been notified, and over 40 of them are fully operational.*

An official estimate says that 336,235 people were employed - directly and indirectly - in SEZs as on March 2008, while direct employment created in notified SEZs stood at 97,993 as on March 31, 2008.*

"It is heartening to learn that India has put in place dedicated mechanism to look into every proposal for SEZ, and for the subsequent clearance to be given," he said.*

'SEZs driving forces of economic growth'- Infrastructure-Economy-News-The Economic Times


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## Flintlock

*India's trade environment more favourable: World Bank*

New Delhi (PTI): India's trade environment is more favourable compared to its other South Asian neighbours with the trade tarriffs in the country substantially reduced since the nineties, a World Bank report said.

"India has achieved substantial reductions in tariffs since the nineties and the current external environment is relatively favourable compared to low-income and South Asian country group averages", Lead Economist and Trade Programe Leader at the World Bank Institute Gianni Zanini said, while releasing a report 'World Trade Indicators (WTI) 2008'.

Zanini, who was speaking at a the event jointly organised by FICCI and World Bank here, however, added that India's agriculture exports face high barriers and its share of trade with preferential partners is low.

The report said India's governance environment is relatively more favourable than the average South Asian or low -income country and is an improvement from the situation in the early 2000s.

Along with improvement in trade facilitation, real growth in trade and related jump on trade integration has been high, driven by high import requirements of a booming economy and services exports, it added.

It also said with severe power shortages, congested roads, and poor-quality railways and ports, deficient infrastructure is a major binding constraint to trade activity in the country.

Zanini, was hopeful that the trade growth in India would be maintained despite slowdown in the world economy.

"There is evidence of 'delinking' of the world economy with India's growth", he said. 

The Hindu News Update Service


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## Flintlock

*India's GMR Acquires 50% of InterGen for $1.1 Billion* (Update3)

By Archana Chaudhary and Vipin V. Nair

June 25 (Bloomberg) --* GMR Infrastructure Ltd. acquired 50 percent of Dutch power utility InterGen NV for $1.1 billion, the biggest overseas energy acquisition by an Indian company.*

GMR Infrastructure bought the stake from AIG Highstar Capital II L.P., a fund owned by American International Group Inc., according to a statement from the Bangalore-based company today. Ontario Teachers Pension Plan owns the remaining half of InterGen, the statement said.*

The stake will give GMR access to InterGen's 12 operating power plants in the U.K., the Netherlands, Mexico, Australia and the Philippines, which have total annual sales of $1.65 billion.* GMR Infrastructure reported sales of 22.95 billion rupees ($536 million) in the fiscal year ended March 31.

This is ``an integral part of our global strategy to be the world's leading energy and infrastructure company,'' G.M. Rao, chairman of the GMR Group, said in the statement. ``This acquisition will provide us a platform to expand in InterGen's existing geographies and new geographies.''

GMR Infrastructure has a $1.1 billion loan for two years to finance the stake, Chief Financial Officer Ashutosh Agarwala told reporters in Mumbai today. The loan may be replaced later with long-term debt, he said.

The purchase is expected to be completed by December, GMR Infrastructure said.*

InterGen has a total gross capacity of 12,766 megawatts, including 4,680 megawatts of projects under development.*

``We exit our investment leaving InterGen as a strong, well- capitalized company under the exceptional leadership of current Chief Executive Officer Neil H. Smith and his very capable team,'' AIG Highstar Managing Partner Christopher H. Lee said in a separate statement.

N.M. Rothschild & Sons advised GMR Infrastructure.

To contact the reporters on this story: Archana Chaudhary in Mumbai at achaudhary2@bloomberg.net; Vipin V. Nair in Mumbai at vnair12@bloomberg.net.
Last Updated: June 25, 2008 05:54 EDT


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## Neo

*Indias industrial output slows​*
MUMBAI, July 12: Indias industrial production slowed sharply in May to its slowest pace in six years, hit by rising inflation, high input costs and monetary tightening, official figures showed.

Industrial growth in Asias second largest economy was at 3.8 per cent in May, against 10.6 per cent in the same month last year.

Output growth, as measured by the Index of Industrial Production, declined in the manufacturing and electricity sectors.

Manufacturing output, which has an 80 per cent weighting in the industrial output index, rose 3.9 per cent in May against 11.3 per cent for the corresponding period a year earlier.

Industrial output rose 8.1 per cent in the financial year ending March 2008.AFP

Indias industrial output slows -DAWN - Business; July 13, 2008


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## Bushroda

*India sea bridge an engineering marvel*
By Prachi Pinglay
BBC News, Mumbai






*The sea link is an engineering feat*

*It is the first bridge to be built over the sea in India and it promises to change the skyline of its financial capital, the western city of Mumbai.* 

The cable-stayed eight-lane 5.6km(3.47 miles)-long $400m toll bridge linking the western suburbs of Bandra with Worli over the Arabian Sea in the southern part of Mumbai is expected to ease traffic congestion and, according to a state minister, become the city's leading engineering marvel.

Officials say more than 3000 people have worked to build the bridge, which will be fully thrown open to traffic by June next year.

Paying a $1 toll to travel one way, commuters can hopefully look forward to seeing their travelling time between the two suburbs cut by nearly an hour. At present, more than 120,000 vehicles pass through a narrow causeway on the same route every day.

Building the bridge has posed a number of challenges, say engineers who worked on the project. The main impediment can be rough weather.

*Traffic woes*

"Effectively, one can work only six to seven months in the open sea. Strong winds and tidal variations make it impossible to supply materials on both sides and it is risky too. We made a temporary pipe along the length for supplying material from one end to the other," says chief project engineer DK Sharma.

Authorities say the bridge is a way to ease Mumbai's traffic problems - the island city with a population of 18 million has more than 1.5 million vehicles.





*The sea link is expected to change the 
Mumbai skyline*

New railway links, flyovers, an underground railway, elevated walkways and sea transport have been planned.

But the bridge, first planned in the 1980s, is one project that is actually nearing completion.

Critics do not believe the bridge will help ease traffic congestion in a city which adds several hundred new vehicles to its roads every day.

And environmental activists also question the project's impact on the sea bed, marine ecology and livelihood of fishermen - the oldest residents of this island city.

"These deep pillars and unnecessary reclamation on both sides of the bridge will have terrible consequences," warns Girish Raut, an environmental activist who has worked with fishermen residing on two ends of the link.

"Several reports over the years say the coast, mangroves and creeks [in the area around the sea where the bridge is being built] have to be left untouched. The quantity of fish has gone down. At least three beaches have seen the impact with rising water levels but nothing is being done," he says.

Officials say some of these reservations have been addressed - the original plan to build it along the coastline was changed, and the bridge's design tweaked to make it run entirely over the sea.

But some citizens' groups are still not satisfied - they say public transport should be beefed up and the city's thriving railway network extended.

Still, Mumbai's harassed commuters can look forward to improved travelling when the overseas bridge is opened.


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## Bushroda

*Indian think tank sees 2008/09 growth at 9.5 pct*
Thu Jul 17, 2008 5:22pm IST

MUMBAI, July 17 (Reuters) - India's economy is expected to grow a robust 9.5 percent in the fiscal year 2008/09, boosted by the industry and services sectors, think tank Centre for Monitoring Indian Economy (CMIE) said in its monthly review.

The economy has reported a growth rate above 9 percent in the last three financial years and many analysts expect it to moderate this fiscal year, ending in March 2009, due to double- digit inflation and record high oil prices.

"The growth in the current year would be accompanied by high inflation and rising interest rates," CMIE said, adding it expects industry to grow 11.4 percent, services 10.6 percent and agriculture 3.2 percent.

CMIE expects the wholesale-price based inflation <INWPI=ECI> to average 9.6 percent in 2008/09, sharply above 4.7 percent in the previous year.

"The major sources of the increase in the wholesale price index are intermediate goods and thus, the increase in consumer price index is likely to remain about 7.5 percent," it said.


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## Bushroda

*IMF revises India`s GDP forecast to 8% in 2008*

New Delhi, July 17: Amid various disappointing indicators, India has received some solace with the International Monetary Fund marginally revising its projections for economic growth to 8 per cent in 2008 from its earlier estimates of 7.9 per cent.

IMF in its update of World economic Outlook released today, however, retained its earlier forecast of 8 per cent GDP growth for India during 2009.

Indian economy grew by 9.3 per cent in 2007.

Projections for Indian economy are not too dismal, if one takes IMF views on the world economy. The multi-lateral agency projected the global growth to moderate from five per cent in 2007 to 4.1 per cent in 2008 and 3.9 per cent in 2009.

"The slowdown in global growth is expected to continue through the second half of 2008, with only a gradual recovery during 2009," IMF said.

It said the global growth decelerated to 4.5 per cent in the first quarter of 2008, down from 5 per cent in the third quarter of 2007, with sluggish activities both in advanced and emerging economies.

In advanced economies, business and consumer sentiments have continued to retreat, while industrial production has weakened further. There has also been signs weakening in business activities in emerging economies.

The projections of the multilateral funding agency for India came a few days after Fitch downgraded the country's domestic credit outlook to negative from stable. Fitch also expected Indian economy to grow at 7.7 per cent in 2008-09 against nine per cent in the previous year.

Indian economy is widely expected to witness a moderation this year due to rise in borrowing costs as RBI continued to tighten monetary stance to tame inflation, which is inching towards 12 per cent mark.

The recent industrial production data have also shown that the industry continued to bear the brunt of rising costs as its growth plunged to 3.8 per cent in May compared to 10.6 per cent last year. Both manufacturing and electricity sectors showed a sharp decline in their growth. This may be pointer to the slow down in the Indian economy.

The Finance Ministry also expects moderation in India's growth this fiscal, though not much. It hopes that the economy would grow between 8-8.5 per cent in 2008-09.


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## Bushroda

*Americans help fuel the increase in executive tourism to India*
Canadian Press
18 July 2008

NEW DELHI  Keith Lotman went to New Delhi on a two-week business trip. But a quick day of sightseeing in India's capital city left him enthralled and ready to see more of the country.

"I have about a hundred different places that I'd like to visit," said Lotman, 31, a business executive from Philadelphia, as he checked out the world's largest Bahai temple in New Delhi. "A hundred different kinds of experiences."

He added: "It's very different from any place I've travelled to before. Culturally very different. I'd definitely like to go to Agra to see the Taj Mahal next."

Ever since the Beatles arrived on the banks of the Ganges river in the 1960s to study Transcendental Meditation, India has been on the life list of a certain type of traveller.

And while there are still are plenty of Westerners seeking low-budget Eastern spirituality, India has recently started attracting a different class of visitor - men and women like Lotman, who certainly wasn't spending his nights bunking in a dingy room with a bunch of backpackers.

New tourists like Lotman have helped feed a boom in travel to India, and the country is now nearly as popular a destination for Americans as Spain. Travel to India from the United States increased 10 per cent between 2006 and 2007, on top of an eight per cent rise the year before. More Americans visited India last year than went to Ireland or Thailand, according to the most recent data from U.S. Department of Commerce.

The upsurge in Americans visiting India is part of broader boom in India's tourism industry. In 2007, some five million travellers headed to India, nearly double from 2000, according to the Tourism Ministry. Visitors from the U.S. accounted for 15.7 per cent of the total.

These include a large number of business travellers, wealthy retirees out to explore India from the comfortable confines of an air-conditioned luxury bus or train and people of Indian origin eager to see their parents' - or grandparents' - homeland.

What has made India as attractive as Europe or South America for American travellers is a combination of a booming economy, an aggressive marketing campaign and what the Tourism Ministry describes as "the diversity of our product."

Most international airlines fly into New Delhi, making it a natural first destination for visitors.

The city is more than a sleepy administrative centre, and tourists can spend days gawking at the sprawling British colonial-era bungalows and exploring the crowded bylanes of Old Delhi, the capital of India's medieval Mogul rulers.

About 200 kilometres south - close enough for a day trip - is Agra, home to the Taj Mahal, the white-marble monument to love built by the Mogul Emperor Shah Jahan between 1632 and 1654 for his favourite wife, Mumtaz Mahal. The monument, a must-see for most tourists, hosts some three million visitors a year.

A bit farther afield is Rajasthan, a region in western India famous for its fabulous splash of colours, medieval forts, ancient temples and camel safaris. There, visitors can spend a night in one of the myriad palaces that have been converted to hotels, getting waited on hand and foot, much like the maharajas of bygone days.

But The New-Delhi-Agra-Rajasthan circuit known as the "Golden Triangle" is just one corner of the country.

What might make India daunting - a vast, complicated country of 1.1 billion people where dozens of languages are spoken across an area of almost 2.6 million square kilometres - is also its biggest draw.

"There's the history and the spirituality that everyone knows about and then there's more," says Leena Nandan, a joint secretary in the Tourism Ministry. "We now have business travellers, medical travellers, luxury travellers, adventure tourism."

There are the hippie haunts of Varanasi and Rishikesh on the banks of the Ganges, sacred to millions of devout Hindus; the all-night raves on the beaches of Goa, a slice of India once ruled by Portugal; the luxury resorts on the sparkling backwaters of the southern Kerala; the spartan yoga retreats and the bare-bones experience of Ayurvedic holistic healing in the Himalayas.

And then there are the myriad domestic airlines that have proliferated since India liberalized its economy. Even on the budget flights, meals are standard - and on the full-fare carriers, they are often accompanied by luxuriously embroidered cloth napkins, metal cutlery and friendly service.

Travellers may have to contend with the same kinds of flight delays seen in the United States, but, says Gary Goodlin, who travels frequently on business between Chicago and Mumbai, "you couldn't get that kind of service on a low cost airline in the U.S."


If You Go . . .

Getting there: Most international carriers fly in to the capital New Delhi. There are direct flights between New York and New Delhi and plenty of options between Los Angeles and New Delhi. Depending on when you fly (the peak season is November to early January) the price for an economy class roundtrip ticket should run between US$1,200-2,000.

Where to go and what to do:

-The Golden Triangle: For history buffs, New Delhi, Agra, and Rajasthan are a good start. There are several low-cost airlines connecting the Indian capital to Agra, as well Jaipur, Jodhpur, Jaisalmer and Udaipur in Rajasthan. The cities are also well-connected by train and bus services.

-Bodh Gaya: Buddhist pilgrims from all over the world flock to this town where the prince Siddhartha Gautama attained enlightenment after intense meditation and became the Buddha.

-Dharamsala: The Himalayan town is home to the Dalai Lama, the spiritual leader of millions of Tibetans Buddhists, and his government in exile. It's now also a major centre for the study of Buddhist and Tibetan culture.

-Goa: This former Portuguese colony is now a beach-lined tourist hotspot that attracts everyone from the hippie backpackers who come for the all-night beach parties to well-heeled travellers who come for the luxury hotels.

-Kerala: Sandwiched between the Arabian Sea and the tropical rain forests of the Western Ghats mountain range, Kerala is among India's most popular tourist spots. Millions of travellers head here each year for its Ayurvedic holistic resorts, beaches, tropical wildlife and a dance form called Kathakkali.


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## nitesh

http://economictimes.indiatimes.com..._survey_of_HP_project/articleshow/3250047.cms

Rly asks pvt company to conduct feasibility survey of HP project
18 Jul, 2008, 1454 hrs IST, PTI


PALAMPUR: Railways have asked a private company to carry out a feasibility survey of broad gauging Pathankot-Jogindernagar line upto Leh, Himachal Pradesh Chief Minister Prem Kumar Dhumal said on Friday. 

The development comes in the wake of Himachal Pradesh government's demand of broadgauging the route. 

"A private company has been entrusted by the Railways to survey the project," Dhumal told PTI after laying foundation of a road bridge here in Kangra district. 

Estimated at the cost of about Rs 65,000 crore, the project would be of great importance considering its implications on country's security and tourism, he said. 

With the centre reluctant to continue on the project earlier on the grounds that it was economically inviable, Dhumal had argued that it was strategically significant for India in view of China expanding its Railway line up to the borders. 

Dhumal said the state Finance Commissioner Arvind Mehta had met Railway authorities in Delhi on June 23 in which it was decided to assign the survey work to a private company. 

He recently pitched for the project with President Pratibha Patil during her Shimla tour and also to Prime Minister Manmohan Singh.


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## Flintlock

*Govt to accelerate economic reforms*
24 Jul 2008, 1929 hrs IST,IANS


NEW DELHI: With the Communists off their backs, Prime Minister Manmohan Singh's government exuded confidence about fast-tracking key reforms in the coming months - a signal that is bound to go down well with the global business community.

"We are now more confident of carrying forward our task," Information and Broadcasting Minister Priya Ranjan Dasmunsi told reporters after a cabinet meeting presided over by the prime minister.

"We will try to accelerate the unfinished tasks," he said.

Asked about the mood in the cabinet - the first after winning the trust vote in Lok Sabha, the lower house of parliament - Dasmunsi initially said it was a "normal" meeting.

But on being prodded further, he added: "It was very good. We are very happy."

The government on Tuesday won by 19 votes the trust vote that was forced by Left parties following their withdrawal of support to protest the United Progressive Alliance (UPA) government's moves to go ahead with the India-US civilian nuclear deal.

Dasmunsi's comments echoed the sentiments expressed a day earlier by Finance Minister P. Chidambaram, who said the government was ready to push forward some major reforms, especially in the financial sector that were so far blocked by Left parties.
Legislations to allow a hike in foreign equity in insurance firms, higher voting rights for foreign banks operating in the country and entry of private pension funds are some of the key areas of focus, he indicated.

"We will make all out efforts to take economic reform process forward by passing a number of bills pending in parliament," Chidambaram said.

"We have absolute majority. We have to build on that and we will reach out to the parties which are not opposed to the reforms."

One of the main legislations pending before a group of ministers is to increase the foreign investment limit in insurance sector from the present 26 to 49 percent.

Similarly, while foreign investors can acquire up to 74 percent in Indian banks, their voting rights - that translates into effective management control - has been limited to 10 percent.

Industry wants parity in voting rights.

"We expect that in the next three months some major bills pending in parliament will also be pushed," said Rajeev Chandrasekhar, president of the Federation of Indian Chambers of Commerce and Industry (FICCI).

"Once this flurry of reforms are undertaken, the confidence level which had been dropping over the last three quarters in the business confidence survey of FICCI will bottom out and will put the economy back into a growth trajectory."

Even stock market indices - often seen as an immediate reflection of the mood of the investing public - gave a thumbs up to the victory in trust vote, primarily sensing a major push to unfinished agenda for the corporate sector.

The sensitive index (Sensex) of the Bombay Stock Exchange (BSE) may have fallen Thursday. But a day after the trust vote, it had opened than 3 percent higher and ended the day with a gain of around six percent.

Govt to accelerate economic reforms-India Business-Business-The Times of India


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## Flintlock

*'Indian IT sector set to be 2nd largest'*
25 Jul 2008, 0004 hrs IST, Sujata Dutta Sachdeva,TNN


NEW DELHI: "Indian IT industry may be passing through a rough patch because of a slowdown in the US economy and high inflation rates, but this stage will pass. India will continue to drive the global IT market for the next few years. In fact, it will emerge as the second most important IT industry in the world after the US in terms of revenue and employment," says a study. "India will create the second largest IT services labour pool after the US within the next seven to eight years. That's not all, domestic IT industry's contribution to our GDP is likely to rise from 0.8% in 2006-07 to 2.65% by 2015-16."

This has been forecasted by a yet to be released white paper 'India's Role in the Globalization of the IT Industry' by Evalueserve, a KPO. It says, "by 2015-2016, the number of professionals working in the IT industry will grow ten-fold (from 2001-2002) and the total revenue will grow 22 times." This means, the IT industry is likely to employ 3,750,000 professionals and record $193.1 billion in revenue by 2015-16.

"Since India's GDP is growing at 8.5% per annum in real terms and 14% in nominal terms, by 2015-16 our GDP is likely to be $2,400 billion. Given this, the IT industry is likely to constitute 8.05% of India's GDP."

While in the last decade, IT services exports (including engineering services, R&D, and those related to creating and maintaining software products) have been growing at 32% annually. Evalueserve estimates this growth rate will taper off and become around 20% in the next seven to eight years. The reason: rising wages, lack of high quality talent, and IT jobs relocating to other low-cost destinations in Eastern Europe and Latin America.

The paper thus concludes: First, by 2016 India will have the second highest number of IT professionals in the world after the US. In fact, US will employ between 1.25 to 1.33 times more professionals than India.

Second, even in 2016, the US IT industry will generate approximately $810 billion in annual revenue, which would be almost five times the revenue of the Indian IT industry. And third, since the IT industries in both the US and India have become inextricably linked with one another, both countries will import and export more IT services and products for the next seven to eight years.


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## Flintlock




----------



## Bushroda

*Software offers gateway to India for WealthPoint*
Morris Kaplan 
The Australian
July 26, 2008 

*SELLING ice to the Eskimos. Carrying coals to Newcastle. Such idioms are used to describe activities that are useless, fruitless, or redundant. How then would one describe an Australian programmer turned entrepreneur wanting to sell software to India -- a nation with more than 1.2 million ambitious software professionals?*

"I don't see it a crazy," says Mike Giles, CEO of WealthPoint Australia, a company that develops software for the financial services industry. "It's not all that counter-intuitive. We have a very sophisticated financial services sector in Australia and India is a developing nation. 

"Besides (in a former business) I've actually sold software to Microsoft. And they hate buying software." 

Specialising in web platform development, Giles and his small team of 10 in Australia and 10 contractors in India have established a firm base in Australia with their suite of software products, boasting such customers as ING Asia, NAB and IAG. 

"Our products focus on the web-based applications that allow financial institutions to create more profitable interactions with their clients and third-party distribution partners -- mortgage brokers, insurance agents -- that sell their products." 

Giles, who has worked in both Britain and the US, says exporting to India is in some ways easier than growing in Australia. 

"We'd like to move the ball further in Australia but it seems easier to go over there. In India they're very keen to talk to you. They are very excited about where India is going." 

This is hardly surprising. Alongside China, India has emerged as one of the fastest growing economies in the world. 

Moreover, its consumers are quick adopters of new technologies and products. For example, 10 years ago mobile phones were almost unknown. The mobile phone market doubles every year, now numbering more than 250 million users. The economy has been growing at an average 8.6 per cent a year over the last three years; and the growth rate in the first quarter of 2007-08 was 9.3 per cent. India is the largest democracy and the fourth largest economy in the world in terms of purchasing power parity. Salaries are rising. US-based analyst Global Insight estimates that by 2020 India will have 583 million people classified as middle class. 

Hitech aside, the $3 trillion Indian economy is still very immature. In banking Australia is a mature player; India is emerging. In financial services the attractions of India are proving to be equally compelling. Mark Bouris, chairman of Wizard, another who has run the numbers over India, has been busy attempting to replicate the home loan revolution he and Aussie Home Loans' John Symond unleashed in Australia a decade ago. So far, Wizard International has branches in four Indian cities and estimates that the international addition would double Wizard's portfolio over the next three years. Giles says: "We see the opportunity in a mature market like Australia for web-based advice transactions to be around 2 million-plus transactions a year. 

"In India, we see the short-term opportunity to be around three times that. 

"However, over the next five years, while the Australian market will grow marginally, we see that the transaction market size will grow 10 times in the emerging Indian market." 

Just because India is growing and well trodden by huge multinationals, it doesn't mean that doing business there is as simple as plucking tasty morsels from the local tandoori buffet. While an export strategy today is an essential component of a business plan, it can be a daunting prospect for an entrepreneur. 

To do business successfully in India one must be aware of cultural differences. "Yes doesn't always mean yes," says Kumar Parakala, global chief operating officer of IT advisory and head of the India practice at KPMG. 

"India is a huge continent that many Australians will find challenging in its size and complexity. But there are great opportunities for those who persevere," he says. "India has a very complex framework. There is a large number of states, each with their own rules and regulations. On top of that there is the federal system with its rules. 

"But the Indian Government has moved to significantly reform the processes required to do business in India. 

"We at KPMG are seeing all our global clients moving into India. I don't believe any company in the foreseeable future is going to remain relevant if it doesn't have an India strategy." 

Giles says his decision to market to India was taken in full recognition of the needs to forge "appropriate" business relationships. "I had joined TiE (The Indus Entrepreneurs) some years ago." TiE is a non-profit, global organisation that provides entrepreneurs and world leaders with the networks, education and mentoring to turn ideas into big business. "They're in the business of helping entrepreneurs meet the right people. 

"That way you are welcomed with open arms over there." 

Both he and Parakal stress the importance of partnerships with Indian companies and entrepreneurs. "The challenge is to find the right partner to do business with. It can be difficult to set up on their own," Parakal says. "A credible partner lowers the risk." 

An effective partnership can produce attractive results for a growing business. It can speed up entry into a new geographic area or market segment, open additional channels of distribution, accelerate new product development, and reduce costs, making it easier to operate. "We (Australians) don't partner well," says Giles. "Everybody worries about their market share. In the US, on the other hand, they know the market is so large that an individual company can't get the whole market on its own. You need to find partners." 

Giles says that WealthPoint's entry into India arose from its relationship with the Netherlands-based ING Group. "They drew on their Australian experience and sought us out. They were effectively taking an established business model into India. They helped us localise a presence and were a big anchor for us." 

Anyone who has travelled through India will have experienced lumbering bureaucracy -- for example, the Indian railway system. Despite these anachronisms Giles asserts that speed to adoption is very rapid in India. He believes they are so good at technology they can bridge any gaps very quickly. 

"They're playing catch up," he says. "Australia has a very skilled, globally competitive workforce. We have great IP in the wealth management space. 

"Our entrepreneurs should be confident of their abilities on a global scale because in some ways we do things better. We have one of the deepest pools of superannuation funds in the world and we only represent 1 per cent of the world economy." 

This factor has no doubt helped the financial services sector spawn a lot of sophisticated software products. 

"In India there are 2 million insurance agents. You're still talking about a country without a debt market -- very few mortgages. It's a market that is going to need some innovation. 

"We're only in the early adopter part of the (product life-cycle) model."


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## Bushroda

*India will beat China  all in its own good time*
*Democracy will ensure that the tortoise overcomes the hare in the race for competitive advantage, argues William Nobrega*

William Nobrega
The Independent, UK
Sunday, 27 July 2008 

Authoritarian regimes often yield strong short-term economic results, as seen in Germany in the 1930s, the Soviet Union in the 1950s, Brazil in the 1960s and China in the 1990s. Unencumbered by such things as property rights, legal recourse and public debate, the authoritarian regime can harness significant economic and political resources to achieve impressive industrial and economic feats. 

Conversely, democratic regimes tend to be sloppy affairs with loud public discourse, a vocal press, stubborn land owners and a myriad of civil liberties. Far from being able to harness economic resources, the government often must act more as a regulator. The result is that there are very few grandiose government-sponsored projects. Instead, there are countless private-sector initiatives driven by the invisible hand of the market. 

But while the authoritarian regime is envied by some, the fact is that, longer term, this type of socio-economic model has typically led to economic and social distortions. 

That is the dilemma faced by China today. Since the 1980s, the government has focused on developing an export-driven economy supported by an artificially undervalued currency. Foreign direct investment was encouraged while domestic consumption was limited. Massive infrastructure projects were initiated, fuelled by a growing trade surplus, with cities sprouting up in the hinterlands like mythical phoenix. For years, the Chinese economy benefited from these policies with double-digit growth in gross domestic product, vast foreign currency reserves, and ever-increasing capital inflows. 

But now the economic and social distortions have begun to appear with rising inflation rates, numerous asset bubbles, looming overcapacity and rampant institutionalised corruption. China's rulers find themselves in a quandary. If the government allows its currency to appreciate rapidly to reduce inflation, it will drive down exports and fuel unemployment. If it fails to quell inflation, social unrest will quickly unfold. 

But while the hare runs into obstacles of its own design, the tortoise is looking well placed in the long endurance race for competitive advantage. In India there is an entrenched and vibrant democracy that will ultimately drive it to outperform China socially and economically. Messy, frustrating and more often than not agonisingly slow, India's democracy would seem chaotic at the surface. But if you look deeper, you will see why the tortoise will prevail. Let's take a look at two of the big advantages that India's democracy provides. 

*PROPERTY RIGHTS *

As India becomes urbanised, many families will choose to sell or borrow against their land so that they can start businesses, buy apartments or provide education opportunities for their children. India is at the start of a gradual migration driven by the development of high-end manufacturing and other "sunrise" industries that will require a vast pool of skilled and semi-skilled labour. This migration will create an increasingly urban India that is expected to attract more than 200 million rural inhabitants to "secondary cities" by 2025. 

This transition will facilitate the sale of land holdings by an estimated 30 million farmers and 170 million other individuals indirectly tied to the agricultural sector. These sales are expected to generate more than $1 trillion in capital by 2025. This capital will have a multiplier effect on the Indian economy that could exceed $3 trillion. 

The development of mortgage-backed security and asset-backed security markets, driven by financial institutions like Citigroup, will create the liquidity required to free up this capital.

China, by contrast, has no rural property rights. The 750 million rural residents who lease land are at the mercy of local and regional government as to what compensation they will receive, if any, when they are forced from the land as a result of development, infrastructure improvements etc. Additionally, they have no right to borrow against their lease, and as such they have no assets. In fact, the Chinese government's official figures state that more than 200,000 hectares of rural land are taken from rural residents every year with little or no compensation. Between 1992 and 2005, according to some estimates, 20 million farmers were evicted from agriculture due to land acquisition, and between 1996 and 2005 more than 21 per cent of arable land in China was put to non-agriculture use. 

The result has not been unexpected, with over 87,000 "mass incidents" (or riots) reported in 2005  a 50 per cent increase from 2003. Many provincial governments in China have begun to use plain-clothes policemen to beat, intimidate or otherwise subdue any peasant that dares to oppose these land grabs. And, also as would be expected, the beneficiaries from these policies have been developers and corrupt government officials. 

*RULE OF LAW*

This is a cornerstone of any modern society. India has a legal system that has been in place for well over 100 years. It is internationally respected and includes laws that protect intellectual as well as physical property. 

The rule of law creates predictability and stability, allowing entrepreneurial behaviour to flourish. This is clearly evident in India, with more than 6,000 companies listed on the stock exchanges, compared to approximately 2,000 in China. More telling is that of these 6,000 listed groups in India, only 100 or so are state-owned. This stands in stark contrast to China, where more than 1,200 belong to the state. 

Can there be any doubt where the next Microsoft or Intel will be created? Certainly not China. 

More than 100 Indian companies that completed initial public offerings as mid-cap firms now have a market capitalisation of over $1bn (£500m). Companies such as Jet Airways, Bharti Tele-Ventures, Infosys, Reliance Communications, Tata Motors (which just acquired Jaguar), Wipro and Hindalco are becoming multinational competitors with globally recognised brands. 

China also has numerous companies with a market capitalisation of more than $1bn, but most of these are state-owned behemoths recognised for their sheer size and not their nimbleness. 

When the rule of law is seen by investors and foreign companies as something that is beyond question, it serves to facilitate additional investments in research and development. For instance, 150 of the top global companies now have research and development bases in India. Additionally, the US Food and Drug Administration has certified more companies in India than in any other country outside the US, a testament to the innovation fostered by free markets and the rule of law. 

China, meanwhile, has a legal system that does little to protect intellectual and physical property rights; it has been ranked with Nigeria in this respect. Indeed, China's illegal copying of movies, music and software cost companies $2.2bn in sales in 2006, according to an estimate by lobby groups representing Microsoft, Walt Disney and Vivendi. This figure may in fact be understated as it does not include pirated products that have been shipped to overseas markets by government-controlled Chinese companies. 

The rule of law, when applied evenly and justly in a democratic society, also helps to ensure that wealth accumulation does not favour individuals in political office or people connected to those in political office. 

Democracy is a messy thing, especially when you have an electorate that exceeds 600 million motivated voters. However, it helps to ensure that individual liberties are respected and that the government is responsive and beholden to the will of the people  rich or poor. A democracy also ensures accountability through impartial courts that help enforce and protect such things as property rights, environmental rights, human rights and good governance. 

India's democracy is far from perfect but it is also quite young, and as incomes rise and the populace becomes more informed, we can expect that India's state institutions will become more responsive and transparent. 

And what about the hare? Consider this: a recent survey found that of the 20,000 richest men in China, more than 95 per cent were directly related to Communist Party officials. Where would you place your bet? 

_*William Nobrega is founder of the Conrad Group, an emerging-markets strategic planning and M&A firm based in Miami. He is co-author of 'Riding the Indian Tiger'*_

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## nitesh

http://timesofindia.indiatimes.com/...of_Turk_pipeline_plan/articleshow/3299314.cms

India keen to be part of Turk pipeline plan
29 Jul 2008, 0028 hrs IST, Indrani Bagchi,TNN

NEW DELHI: While the Iran-India gas pipeline remains mired in security and pricing issues, India has indicated its willingness to join the Mediterranean pipeline project Medstream, running from Turkey through Israel. 

After national security advisor M K Narayanan made a quiet trip to Ankara recently, India is likely to send a team of officials to Turkey for a tripartite meeting to firm up details of the feasibility study that is expected to be completed in 10 months. 

Energy ministers of the three countries will meet over the coming weeks to formalize the timelines and scope of the project. 

As earlier reported by TOI , India was formally invited to be part of the project when Turkish foreign minister Ali Babacan visited New Delhi in February. 

The project and its expected timelines were announced after last week's meeting between Turkish minister for energy Hilmi Guler and Israeli infrastructure minister Benjamin Ben-Eliezer. According to the Turking energy minister, the pipeline could be built in a little over three years and would carry 40 million tonnes of oil annually. 

What is not yet clear are the suppliers and buyers on either side. While Azerbaijan and Russia have said they would be willing to use the pipeline to transport oil and gas to India and China, Indian oil and gas companies are currently in the midst of talks to gauge their levels of interest and how far they would be able to go. But officials said this project has now seen strong interest from the sellers so it won't be difficult finding buyers from an energy-hungry India. 

The project will involve a cluster of five pipelines that will carry oil, natural gas, water, electricity and fibre optic cables. Naturally, India will only be interested in the energy pipelines. 

The route will travel from the Black Sea oil terminal Samsun to Ceyhan on Turkey's Mediterranean coast, thence through an undersea pipeline to Israel's Ashkelong port. From there, over land to Eilat in the Gulf of Aqaba. From there, supertankers will be deployed to carry the natural gas/oil to India over the high seas. 

This way, India avoids two important bottlenecks and prospective security hurdles  the overcrowded Suez Canal (that is for oil coming from further westward) and the tiny Strait of Hormuz which is a security hazard in the case of any future conflict in the Gulf. 

Besides, it opens the Indian market to Central Asian oil, particularly from Azerbaijan, and Russian gas. As a matter of fact, Gazprom has also announced its participation in the Medstream project. Turkey said it was in advanced negotiations with Russia over sourcing its gas for the project through the Blue Stream pipeline below the Black Sea.
The bigger plan is for the oil and gas sourced to also travel to China, Taiwan and South Korea, basically opening up eastern Asia's big markets to central Asian oil and gas. 

India's traditional friend Russia will be playing a big role in this project. Not only will it supply oil to the pipeline, Gazprom is also being tapped to build the terminals in Turkey. 

On a geopolitical level, the new project is one of the first concrete steps India is taking to look further afield for energy sources. The Iran pipeline was the first, which continues to be dogged by issues of supplies and security. The Turkmenistan-Afghanistan pipeline, apart from the regular security issues, became a little difficult after Turkmenistan virtually promised most of its gas resources to Russia.


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## Neo

*Indias economic indicators unlikely to improve soon​*
NEW DELHI: Indias central bank has released a report predicting an economic slowdown, rising inflation and dwindling corporate profit growth over the next nine months. 

Twenty forecasters surveyed by the bank expected that annual gross domestic product growth, now running at 9%, would slide to 7.9% over the next nine months, according to the report released late Thursday by the Reserve Bank of India. 

GDP growth driven by industry and services, the forecasters predicted, would total 7.5% and 9.5%, respectively, this year, down from last quarters predictions of 8.1% and 9.7%. Agricultural growth expectations remained flat, at 3 percent. 

They expected corporate profit after tax to grow at 16% in fiscal year 2008-09, down from 25% tallied in the banks last quarterly survey. Corporate profit after tax would then bounce to growth of 20% for fiscal year 2009-2010. 

The survey also revealed a consensus that the government would maintain its tight stance on money supply, predicting that the central bank would keep its key interest rate, or repurchase rate, at which the central bank makes short-term loans to commercial banks, near 9% through the current fiscal year ending March 31. The forecasters expected inflation to be 11.7% this quarter, before falling off to 11.4% and 9.2% in the subsequent two quarters. 

Inflation, driven largely by the high price of oil on global markets, hit a new high of 11.98% in the week to July 19. 

The bank said its quarterly forecasting survey, dated July 31, represents the views of the forecasters and not the bank itself. 

In a bid to tame rampant inflation, the central bank this week raised its key interest rate 50 basis points, more than expected, to 9%, the third such hike in two months. It also further tightened money supply by increasing the cash reserve ratio, the amount of cash banks must keep on hand, to 9%, up from 8.75 percent. 

Last week, the Federation of Indian Chambers of Commerce and Industry, or FICCI, which says it represents over 250,000 enterprises across the country, urged Prime Minister Manmohan Singh and other top government officials to create better conditions for growth and bolster waning business confidence. 

In its 100 Day Agenda for the Government the FICCI argued that the banks monetary policy has exacerbated the nations fiscal woes. Raising interest rates, it said, will do little to tamp down supply-side inflationary pressure, which must be attacked by rapid investment to boost capacity. reuters

Daily Times - Leading News Resource of Pakistan


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## Bushroda

*'Country's manufacturing sector to grow by 9.5 percent' *
3 Aug, 2008, 1130 hrs IST, IANS

NEW DELHI : Country's manufacturing sector is expected to grow by 9.5 per cent in 2008-09, up from 8.8 per cent last fiscal, according to a survey by an industry lobby. 

The survey on manufacturing industry, carried out by the Federation of Indian Chambers of Commerce and Industry (Ficci), among 25 core sectors, 21 capital goods, 15 intermediate goods, 26 consumers durables, and 13 consumer non-durable sectors, holds out this prognosis. 

"Of the 100 sectors surveyed, as many as 67 are poised to achieve 'excellent' to 'high' growth rates ranging from 10 to 20 per cent or more. While 12 sectors project excellent growth of more then 20 per cent, 55 foresee high growth of 10 to 20 per cent, 32 sectors expect moderate growth of up to 10 per cent and one sector has projected negative growth during 2008-09," the survey said. 

The study cited various reasons for the optimistic projection that include increased investment, increasing mergers and acquisitions, focus on high-end and superior technology products, higher demand for sophisticated lifestyle products, entry of foreign companies in various industry segments and higher export prospects. 

"While the present situation may continue for next two-three months, the manufacturing industry would be able to revive and achieve higher growth during the terminal period of the financial year 2008-09 provided the government takes some pro-active reform measures to redress the genuine grievances of the manufacturing industry", the survey said. 

"While the farm loan waiver scheme and the proposed salary hikes of government employees will help generate more demand for manufactured items, there is need for stimulating consumption reducing interest rates and no further cuts in custom duty on manufactured goods," the chamber said. 

"There is the need for ensuring relief package for exporters, increasing rate of depreciation, reducing corporate tax rate and correcting anomalies due to inverted duty structure existing in the tax structure," the study said. 

It also underlined the need for adopting appropriate raw material policies, improving regulatory environment, helping capacity building of small and medium enterprises (SMEs), skill development and improving infrastructure for helping the industry achieve lower cost, improved quality and better performance.


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## Bushroda

*Entrepreneurs shouldn't overlook India, Asia's other giant*
Adam Lewis 
The Australian
August 01, 2008 

*AMID uncertainties about the global economy, China and India keep forging ahead.*

In Australia it is not surprising there is more awareness of China than India, as China is one of our largest trading partners. 

India, however, presents opportunities that will be more important for some Australian companies. 

Many local boards and senior executives are assessing the benefits of doing business in India and the smart ones are learning from past experiences in other markets and from other successful operations in India. 

As the Indian economy is on a growth trajectory, optimism is understandable. 

Since the mid-1990s the country's economy has changed gears from an average 3 per cent annual growth to a robust average of 6-8 per cent. 

India's GDP has grown consistently and has become less volatile. Economic growth is set to continue on this trajectory due to a structural shift in favour of services. 

For example, business services have doubled every year in recent times, internet usage has grown by a whopping 95 per cent annually for the past five years, and the credit card market is expected to grow by 25-30 per cent annually over the next four years. 

These numbers become more attractive as companies dig deeper and discover a huge consumer pool. Over the next 20 years, India will become the world's fifth-largest consumer economy. Management consultancy McKinsey estimates that India's current growth rate will quadruple consumer spending from about 17 trillion Indian rupees ($400 billion) in 2005 to Rs70 trillion in 2025. 

The dramatic growth in India's middle class, from 50 million to 583 million people, will drive this surge. 

Australia has three advantages in the race to share in this growth. 

Firstly, we have a strong trade relationship with India. We export goods and services worth more than $12 billion to India each year, which makes it our sixth-biggest customer. 

We invest about $2.2 billion a year in India and $608 million of Indian investment finds its way to Australia. 

Australia's investment in India is currently much larger, but it is growing at only 2 per cent annually, which is not keeping pace with India's economic growth, so our relevance is declining. 

India's investment in Australia, on the other hand, has grown an average of 43 per cent each year since 2001. 

A second advantage is that some of India's needs coincide with Australia's expertise. If India is to reach its potential, the need for better infrastructure is evident. 

This includes hard infrastructure in the form of roads, railways, ports, electricity and urban planning. 

It also extends to soft infrastructure such as schools and hospitals. Australia has expertise in these areas, which we can use to the mutual advantage of both countries. 

The third advantage is a double-edged sword. We share some common heritage as a British colony and have a sizeable Indian diaspora in Australia. 

This provides a healthy connection between India and Australia, but this connection can be overstated. 

Compared with China's opaque structures and nuanced customs, India looks deceptively familiar. A lot of people there speak English, we share Westminster institutions and play cricket. 

Yet, while we have a growing pool of Sinophiles in Australia, the same depth of expertise and intensity is not evident concerning India. 

Take language as an example. A lot of Australian schools teach Mandarin, but only a handful teach Hindi. 

We need to remind ourselves that India is an exotic market, perhaps even more so than China. 

Companies that are successful there have learnt to be patient and to customise their product for the environment. Even for large multinational companies with global brands, it can take many years to make a profit. 

For example, it took L'Oreal 13 years to break even in India, while in China it took seven years. 

Successful vehicle makers build cars for the Indian market with low power, high fuel efficiency and high clearance for road bumps. 

Successful takeaway food retailers customise their menus to local tastes, cut their prices and even respond to expectations such as home delivery. 

India is not for the faint-hearted. In addition to infrastructure problems its regulatory environment can make business challenging. 

A World Bank report in 2005 shows that Indian managers spend 14 per cent of their time dealing with regulation, compared with a figure of 8 per cent in China. 

Many foreign companies have left India, particularly since the 2002-03 economic slowdown. These challenges should not put companies off. One of the indirect payoffs of doing business in India is access to innovation, which can assist Australian companies with competitiveness elsewhere. 

Indian companies are innovative in technology and outsourcing, and it is producing companies that could change the way business is conducted. 

ICICI Bank, for example, has initiated a rural banking strategy targeting India's rural poor in an economically viable way. 

Reducing the cost of transactions, harnessing technology to set up low-cost channels and reducing layers of management have already made ICICI the subject of business school case studies. 

It may soon be studied closely by our own financial services sector. 

There is no doubt India's economy is in an earlier phase of development than that of China, but the lessons of China include: get in early, be very patient and don't be blinded by the size of the market. 

Simple things such as market knowledge, relationships and competitive advantage are crucial to a sustainable business. 

In India the opportunities are vast, but taking advantage of them requires staying power and investment. 

*Adam Lewis is managing partner of McKinsey and Company, Australia and New Zealand.*


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## Bushroda

*The Death of the Indian Dream*
By ARAVIND ADIGA
TIME
Wednesday, Jul. 30, 2008






*An Indian vegetable vendor sorts chilies at a local market in Mumbai.*
*PAL PILLAI / AFP / Getty*

Inflation in India has hit a 13-year high, but you wouldn't know that as you walk around the Infiniti Mall in Andheri, a Mumbai suburb. The young men and women  many of whom are aspiring models and film stars (the Bollywood studios are not far from here)  are crowding in with their cell phones and laptops, and the place looks as busy as ever. 

Visiting a stall that serves bhelpuri  a mix of puffed rice, dough, tomato and coriander that is the quintessential Mumbai snack  I find that the price has gone up from 37 rupees a plate to 42 (about $1), in line with the current inflation rate of 12%. I ask the manager of the stall if sales have slowed down at the higher price. He thinks this is funny, and he shares my question with his workers; they think it's funny too. One of them explains: "If you were happy to pay 37 rupees for a plate of bhelpuri, do you think you'd even notice an increase?" The cost of the dish here is four times what you'd pay out on the street. For these workers, who cannot afford to buy a thing in this mall, not even a bottle of water, everything seems surreally expensive; the surreal getting inflated by 12% isn't an event at all. 

When I get to my apartment, I find Suman, the maid who does the cleaning in my building, waiting outside the door. The price of lentils, a key component of most Indian meals, has surged in the past few months. She hasn't been able to increase her rates yet, so she has had to take an additional cleaning job to make sure there is enough food at home. She will have to leave my apartment sooner every day; she hopes I will not dismiss her for this. 

Over the past decade, economists have been divided about the great Indian boom. For one party, the Indian economy's amazing growth rates indicate that the country is a nascent superpower  an America in the making. As evidence, they can point to the growing clout of Indian firms like Bennett, Coleman & Co., a privately owned Mumbai media conglomerate that recently bought Britain's Virgin Radio. For the other group of economists, the boom has been an illusion: the majority of Indians have been excluded from the growth, poverty has stayed stagnant, and India is still just a Sudan with a little icing on top. So who is right? As the current bout of inflation shows, they are both right. 

The Indian economy is slowing this year, but even if it grows at only 7% or 8%, it will be doing far better than the U.S. and most of Europe. The Indian multinationals that have grown out of the 10-year boom look as strong as ever, with outsourcing giants like Infosys and Tata Consulting Services growing very robustly. Their success has created a huge middle class for which 12% inflation is more of a nuisance than a worry. The long-term future of the Indian middle class is secure. The factors that have driven its success  a sure grasp of English, a facility with technology, a talent for innovation  will continue to be important in the global economy. 

But the 300 million or so Indians living in acute poverty are being crushed by inflation. If they thought washing the floors, driving the cars and cleaning the windows of the middle class would open the doors to a better life, they know now that they were wrong. With prices rising, their savings are being eaten away. Higher food and fuel prices are being driven by big changes in the global economy that look set to continue. Even the most cheerful optimist in the past decade has seen the huge divide between the haves and have-nots, but the hope has persisted that it would somehow go away. Inflation has set like cement into that divide, solidifying the gap between the two Indias. The future for the country is two futures: rosy and grim. Indian companies will buy more foreign businesses and more Indian children will starve. In economic terms, India has become neither the U.S. nor Sudan, but something in between  a Latin American republic with an entrenched class chasm. Higher levels of crime and social unrest are almost certain to follow. For years or decades to come, we will not be able to talk of one destiny for all the people of the country.

Aravind Adiga is the author of the novel _The White Tiger_


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## Bushroda

*Time to get over India's nuclear bomb*
*Ties have been strained since New Delhi tested weapon with plutonium from Canadian reactor*

Ryan Touhey 
The Star, Canada
Aug 01, 2008 04:30 AM 

Once labelled by some as the "sick man" of South Asia, India is now an emerging economic power set to become the world's fifth-ranking consumer economy. 

As a result, India faces no shortage of foreign suitors, and the governments of Australia, France, the U.K. and the United States are leading the charge. Canada? We've been among the slowest to recognize India's rise. 

The board of governors of the International Atomic Energy Agency (IAEA) will meet today and consider approving the U.S.-India Civil Nuclear Deal. Canada is represented on the board but it is uncertain how Ottawa will react to this significant event. 

New Delhi and Ottawa still appear unable to shake off the lethargy that stems from a tumultuous bilateral history that still lingers. In order to move forward, Canada and Canadians might have to radically rethink the major bilateral gap between us: India's nuclear program. 

There has been little government effort since the mid-1970s to address this issue. Equally, there has been scant public or academic debate on the merits of Canada's bilateral, and nuclear, relationship with India. But this is a difficult and delicate matter. A recent national survey by the Asia Pacific Foundation of Canada noted that only 34 per cent of Canadians polled agreed with the statement "Canada should accept India as a responsible nuclear power." 

To say that Canada and India have a controversial past largely due to differences on nuclear proliferation is an understatement. The story remains largely unknown to the Canadian public. With generous terms, we sold our Commonwealth partner two CANDU reactors in the 1960s after donating a reactor the decade before. By 1974, India had tested ts first "peaceful nuclear device" using plutonium from our donated reactor despite assurances to the contrary. Ottawa was furious and condemned India harshly on the world stage. 

This event coincided with a period of domestic turmoil under prime minister Indira Gandhi that included the suspension of civil liberties. Too many bureaucrats and politicians in Ottawa had had enough with a country once deemed by Canadian officials to be the most important in Asia. Their disdain was heightened by the fact that India's economy was anemic, it appeared democratically fragile, and neither government was willing to compromise on the nuclear question. It was then that Canadians opted to turn their backs on the subcontinent.

The 1980s were no better. Some elements in the Sikh diaspora sought to foment support in Canada for terrorist activities in the Punjab. 

Prime minister Brian Mulroney, as his recent Memoirs reveals, was advised not to host the 1987 Commonwealth Games in Vancouver as a result of terrorist fears and possible threats to India's prime minister. The Air India tragedy followed. India believed Ottawa did not take the threat of Sikh terrorists operating from Canada seriously enough.

In the 1990s, our government's efforts to begin expanding trade ties as India began to open up its economy were largely dashed when New Delhi chose to test two more nuclear weapons. 

Fast forward to today. What can we do?

A number of new drivers, particularly our provinces, the private sector and the growing Indo-Canadian community, are seeking to expand trade, education and people-to-people linkages. Ottawa is showing some interest in their efforts, even occasionally suggesting that Canada and India share similar values. 

First off, it is imperative for Canadians to realize that while India shares a Westminster-style parliamentary system and Commonwealth connection with Canada, much of the similarity ends there, particularly in foreign affairs.

While these are positive factors, we discovered they only count for so much as we learned decades ago when both countries served on the International Commission for Supervision and Control in Vietnam and differed as we naively expected India to see the Vietnam War as we did  through a Cold-War prism. Instead, India tended to sympathize with the North Vietnamese, viewing them through the eyes of a people who themselves had once been oppressed by colonial powers. Two generations of young Canadian diplomats served on the ICSC. Most returned to Ottawa far from enamoured with their Indian counterparts.

Recently, both countries have adopted different stances to the troubles plaguing Burma and Sudan. 

It is imperative for us to understand that democratic values alone will not ensure that Ottawa and New Delhi share a world view that will create common approaches to global issues, or even establish mutual linkages between us. If the Canadian government bases its approach to India on the assumption that both countries share similar values and concepts of democracy, Ottawa may well suffer from the disillusionment experienced in the past. In a globalized world economy, we can't afford to do that with a rising economic tiger and a country that provides the second-largest source of immigration to Canada. 

India's academics, policy-makers and politicians regard their country as a great power. The current strains of hyper-realism circulating in Indian foreign-policy circles make it more difficult, whatever our past, for Canada to search for a finely tuned Pearsonian, middle-power pathway with New Delhi.

India and the world have changed. 

So must we. 

We have to rethink our relationship with India and to seize the opportunities India now offers Canada. Overcoming our nuclear past might not be a bad place to start, particularly in light of the recent U.S.-India Civil Nuclear Deal. 

After the IAEA meeting, the deal will still need to be approved by the Nuclear Suppliers Group (NSG) and the U.S. Congress. Once completed, it will bring India's civilian nuclear power plants under the supervision of the IAEA. In turn, the agreement will allow India bilateral civilian nuclear co-operation with the Americans for the first time in more than 30 years. 

The international community gets a say in this deal through the NSG, of which Canada is a member. Any one NSG member, including Canada, can veto the agreement. 

The deal that only weeks ago appeared to be faltering due to splits within India's minority government has created a precedent and sparked debate among a number of Canada's allies, including Australia, France and Britain. But reaction in Canada has been remarkably muted. Debating the merits  and the faults  of the deal will show India that we are at least willing to consider this question in light of present circumstances. In doing, so we will be sending a strong and positive message to India. 

Our India policy has been non-existent for decades regardless of which party has been in power. 

It is time to look at India with fresh eyes and to move beyond a history characterized by disagreements.

*Ryan Touhey is a fellow at the Canadian International Council (CIC).*


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## Bushroda

*Innovative university sets the flavour of Indian town*
cleo Paskal, special to the star
The Star, Canada
Aug 02, 2008 04:30 AM 

Manipal, IndiaManipal is a typical college town. Which is what makes it so unusual. Here in India, most of the best universities are in the big cities. The rural colleges tend to be a bit parochial. But Manipal University, deep in the wooded hills of Southern India, is an excellent university, ranked in the top 10 in the country in several faculties. 

Like Cambridge, almost the entire economy of the town is built around the college. Pretty much everyone you meet on the paved and well-lit streets is associated with the school. 

The university has set the tone for the town, and it's an amazingly innovative tone. The campus is entirely non-smoking. In an attempt to keep the environment unpolluted, there is a policy to discourage motorbikes and cars, and students are given bikes to use when they arrive. 

Going one step further, climate change education is being integrated across the curriculum. 

All of this, combined with a very multicultural student body which uses English as a common language, makes Manipal an easy and fun place to visit. 

This being a college town there are, of course, plenty of coffee houses filled with the bustle of students (and even a Subway), but there are also historic temples and, a short ride down the hillside, the Arabian Sea (where the Manipal Surf Club catches waves). There is a floodlit, well-tended jogging route, which overlooks rice paddies and coconut groves. There are rickshaws and nuclear physicists. And it is all seamless, relaxed and friendly. This is a place where it is easy to make friends and to feel as though you belong, wherever you are from. 

This traditional, yet modern environment has been a big draw for Indians who have settled elsewhere but who want their kids to ``experience'' India. Students come from more than 30 countries, with a strong contingent from North America. Manipal also has agreements with universities in the U.S. and branch campuses in places such asDubai and Sikkim. 

About 30 per cent of Malaysian doctors graduate from Manipal, and the Communications Institute has close to a 100 per cent hiring rate for its budding journalists.

Founded more than 50 years ago, the university and town are hitting their stride and growing rapidly with new departments being added all the time  the two most recent being e-banking and geopolitics. 

It is unusual to come across a place that is settling in so firmly that you feel you are witnessing the beginning of a tradition. 

But just as India is refinding its geopolitical and economic place on the world stage, it is also reasserting its place in world education.


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## Bushroda

*Indian group has towering ambitions*
Marika Dobbin 
The Age, Australia
August 2, 2008 

INDIA'S economic ties with Victoria are deepening, with one of its largest real estate companies snapping up prime Melbourne sites and planning a $500 million apartment and luxury hotel tower at Southbank.

The Wadhawan Group has gone on a three-month buying spree, acquiring four sites in South Yarra, Brighton and Southbank, including paying $40 million for land in City Road.

Chairman Kapil Wadhawan said the company's investment was part of India's rapid economic expansion and indicative of a deepening financial relationship with Australia. Victoria's Industry and Trade Minister, Theo Theophanous, met Mr Wadhawan and other executives yesterday, following the Government's announcement in May that it would pursue trade and investment opportunities with India.

With a free trade agreement between the two countries under negotiation, Mr Wadhawan said his company would introduce other aspects of its Indian business to Australia, such as housing finance, educational interests and food, beverages and groceries.

"We see Australia strategically as an important destination for us, not just in realty development but also to pursue further trade relations," he said.

"India is already a strong trade partner with Australia. You've got Indians investing in the resource sector in Australia, a number of Indian IT firms are already present in Melbourne, so yes, looking at the overall potential, we see a great opportunity for us to set up a base in Australia."

The Wadhawan Group is seeking approval for more than 800 apartments at Southbank and is in talks with an American hotel chain for a 150-room hotel. It is also planning some luxury apartment buildings in Brighton and South Yarra.

Mr Wadhawan said he was not concerned about the slowing Australian economy or predictions of a downwards slide in housing prices.

"We believe whether it's 800 or 1000 apartments, it's going to get absorbed," Mr Wadhawan said.

"We've got a lot of international owner-investors and we get a sense that the domestic market needs an extremely good product of mid to higher-end."

Austrade organised the whirlwind tour by Wadhawan executives as part of its new responsibility for fostering inter-country investments under a Federal Government expansion of its role.


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## Bushroda

*India's new G-spots*
Shankkar Aiyar
August 1, 2008

For decades, the enduring aphorism that best condensed the economic theory of trickle-down benefits of high economic growth has been "A rising tide lifts all boats". The ultimate mantra of free market evangelists popularised by John F. Kennedy finds vindication across India too. 

As India migrated from a $500-per-capita income at the beginning of the decade to $1000 now, higher earnings fuelled consumption and created markets in new geographic landscapes, extending beyond the big metros and even Tier II submetros. Kolhapur, better known for its hand-made chappals; Kannur, famous for the export of communism; cotton town

Erode and Yamunanagar, best known for the manufacture of utensils, are now the destinations for companies seeking consumers and market share. 

If Future Group Chairman Kishore Biyani has chosen small town Jharkhand boy Mahendra Singh Dhoni as the brand ambassador for Big Bazaar, it is not just for cricket but market economics too. 

True, the stereotypical images of the unpaved economy growing haphazardly persist, but the picture has changed. In fact, the optimism of an 8-plus per cent GDP growth this year, despite the high inflation and the spectre of slowdown, is driven by the new width acquired by the economy. 

Thanks to the resurgence of manufacturing which led to the revival of small and medium enterprises, these small towns are now emerging as the fountainheads of entrepreneurship. 





*Kolhapur, Maharashtra: *
*Sambhaji Rangarao Patil, 47, **is a farmer *
*who uses his two tractors to grow over *
*50 tonne of sugarcane and generate an *
*annual income of Rs 15 lakh*

A study derived from the RKSWAMY/BBDO Guide reveals the emergence of new markets that are driving incremental growth in basic durables, automobiles, mobile phones and FMCG. Thanks to growth in both rural and urban incomes, district towns have emerged as hot spots. 

In fact, according to the RKSWAMY/BBDO study, 60 district towns of less than five lakh account for a tenth of national consumption. Indeed the top 13 district towns combined could match the consumption of Mumbai and Delhi markets.

You could say that the emergence of these new towns is the result of a serendipitous coming together of factors. 

The boom in manufacturing, the priming of the rural economy with a spend of over Rs 2,00,000 crore by the Government and investments in new industrial estates and IT enclaves all combined to generate employment and higher incomes in urban and rural economies. This fuelled consumption of goods, services and real estate triggering the virtuous cycle. 

Evidence of the coming together is reflected in the transformation of the towns: take Kolhapur, for instance. Nestled in a fertile valley fed by four rivers, it has always been an agri hub with higher-than-average income levels. 

But it is the revival of the textile industry coupled with the opening up of textile and IT parks that has created economic viability. Erode, a small town in west Tamil Nadu, is abuzz with activity every Monday evening as people from as far as Jammu in the north, Assam in the east and Gujarat in the west descend for the weekly Monday Market, which winds up only by Tuesday dawn. 

Yarn, processed and cotton fabric are sold and bought from this market. "Nearly 70 per cent of raw materials needed for the Indian textile market flow through Erode," says S. Sivananthan, secretary, Erode Textile and Garments Exporters' Association. 

Plastics and steel are the new areas of growth. In a sense, Erode has built on its traditional strengths to emerge as a multifaceted economy." To start with, plastic industries were set up to supply spares for textile companies. 





*Patiala, Punjab: *
*Gurjit Singh Mansahia, 62, cultivates *
*70 acres for horticulture and forestry, *
*netting an annual profit of Rs 15,000 *
*per acre. He has three cars, including a Skoda* 

Today we manufacture spares for the automobile sector too, for companies like Hyundai, Tata Motors and TVS Motors," says M.Venkatachalam, managing partner, Jayanthi Plastics. 

Evidence of a diversifying economy is visible in the north too. Yamunanagar is no longer a one-business town. Besides hosting biggies like Ballarpur Industries and Saraswati Sugar Mills, it is emerging as a major centre for plywood production. With new projects like the 600 MW Reliance Energy thermal power plant, this town is evolving into a commercial hub.

Ditto with Patiala. Located in Punjab's farm-rich Malwa region, it has been in the fast lane of development since 2000. While agriculture remains the mainstay of the economy, the emergence of the service sector and the presence of a mélange of institutions, including two universities, the Thapar Institute of Engineering and Technology, two medical colleges and two of Punjab's best known public schools, has delivered sustainability.

This, in turn, has fuelled across-the-board real-estate growth catapulting Patiala into the orbit of boom towns. It is hardly surprising then that, come November, it will be among the first to boast a Rs 60-crore wedding trousseau mall set up by Omaxe. 

Gowri Arun, who co-authored the RKSWAMY/BBDO study, says, "Growth has created a new wave of consumerism and created an appetite for lifestyles comparable to that in metros." 

Biyani, who is planning to set up shops in 110 towns, believes, "There is a big shift in aspiration levels in these small towns which translates into consumption and sales. Confirmation of this comes when we see reality show participants wearing clothes from Big Bazaar." 

Sameer Satpathy, marketing head of FMCG outfit Marico agrees: "Now aspiration is not restricted by geography. Rural consumers want the same products as urban ones as they have money and are exposed by media to a new mindset. In fact, today Mumbai and Delhi account for a smaller percentage of the sales than before." 

The story is repeated in telecom too. Harit Nagpal, director of marketing at Vodafone Essar, reveals that falling handset prices and tariffs are driving sales. "The bulk of subscriber addition is coming from outside the 20 major cities."

Quite naturally there is a rush to cash in. Banks are ramping up their sales forces to acquire depositors, mutual funds are going rural to attract investors as are automakers. In fact Tier III towns account for a fifth of Tata Motors sales. 





*Yamunanagar, Haryana: *
*J.K. Bihani, 48, is MD of Galaxy Plywood *
*Industries, with a turnover of Rs 10 crore. *
*Believes town will become a commercial hub*

Venugopal Dhoot, chairman of the Videocon Group, reveals that 60 per cent of his sales come, not from major metros, but from mini metros and Tier III towns. "The percolation effect of the high economic growth seen in the past five years can be seen clearly across many district towns." 

Ergo new methods are being used to penetrate these markets. Handset maker Nokia is using mobile vans to reach customers in district outposts while auto major Maruti-Suzuki holds 'car melas' two to three times a month in smaller towns. Not surprisingly, 30 per cent of its sales come from these towns and panchayats.

The rising tide has lifted the boats. By design or by default, the virtuous factors of economic growth have combined to deliver width and growth to the Indian economy. As marketing strategy consultant Rama Bijapurkar says, "Tier III towns have benefited from steady economic growth, improved road connectivity and aggressive marketers. 

Visible consumption increase has happened but there is more to come." It is early days as yet. Unless politics and politicians work to ruin the script, these towns could well provide the next chapters of the India story.

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## Flintlock

*Clinton Foundation mulls world's largest solar project in Gujarat*

Maulik Pathak & Ashish Amin / Ahmedabad August 8, 2008, 0:59 IST*

US-based foundation to set up Rs 20,000-crore Integrated SolarCity.*

This could well be the worlds largest solar power project at a single location if all goes as planned.

The US-based Clinton Foundation is in talks with the Gujarat government to set up an Integrated Solar City project with a capacity to generate a 5,000 Mw over a period of time.

The project, tagged as one of the largest foreign direct investment (FDI) into the state, will also be a landmark project as the cost of power generation is likely to be 70 per cent less  around Rs 20,000 crore  than the conventional cost of generation, say sources close to the development.

*The project envisages an integrated solar city* wherein all the raw materials including glass and panels will be produced by them, bringing down the cost substantially, said a senior government official.

The cost of generation for thermal energy is about Rs 10-11 per unit. However, according to estimates of Clinton Foundation, the power produced in the solar city will cost around Rs 4 per unit, going by the scale of the project and technology advancement they have on hand.
*
The Gujarat government has roped in US-based Nobel Laureate John Byrne for charting the states solar roadmap and is considering Kutch and Banaskantha as favourable locations for the mega project.*

The Foundation, supported by the likes of GE Energy and Microsoft, already has a war chest of $12 billion which it wants to utilise for green energy initiatives, sources said.

The worlds largest solar power plant is currently in Mojave Desert of California with a capacity that will go up to 900 Mw in few years.
*
The Clinton Foundation is also in talks with governments of Andhra Pradesh and Rajasthan for setting up solar power projects.
*
A number of corporates including Essar, Indiabulls, Reliance, ADAG, Tata Power, Suryachakra and Euro Group have also lined up solar projects in the state.

The Mukesh Ambani-controlled Reliance and Euro Solar have already been given letters of intent of 5 Mw each from the 10 Mw quota allotted by the Centre to each state.

(Business Standard)

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## Flintlock

*India's growth to be fuelled by 20 cities: Report*
7 Aug, 2008, 2104 hrs IST, IANS

NEW DELHI: India's growth will be driven by 20 cities, according to a report released here on Thursday.

These 20 cities together account for 10 percent of India's population, but generate 31 percent of disposable income and in 2007-08 fuelled consumption worth $100 billion, said the report titled *"Next Urban Frontier: 20 Cities to Watch".*
*
The report was jointly prepared by economic think-tank National Council of Applied Economic Research and the Future Group's research wing Future Capital Research.*

As 379 million people will be added to India's urban spaces over the next 40 years - which is the more than the current population of the US - these cities will be crucial for the economic development and will emerge as the major market for financial services and consumer goods.


The report says more than half the total urban income is generated by these 20 cities and they account for 60 percent of saving of the whole nation.

According to the report, these 20 cities are divided into three categories - mega cities, boom towns and niche cities.

The mega cities are the largest cities in terms of population and overall consumer market.

Boom towns are the next set of big population cities, with high expenditure per household.

Niche cities, which are smaller in terms of overall population but still hit well above weight in spending per household.*

The eight mega-cities are all the four metros, along with Bangalore, Hyderabad, Ahmedabad and Pune.

The seven boom towns are Surat, Kanpur, Jaipur, Lucknow, Nagpur, Bhopal and Coimbatore.

The five Niche cities are Faridabad, Amritsar, Ludhiana, Chandigarh And Jalandhar.*

The report also highlights some interesting findings such as boom towns registering the fastest economic growth.*

It also says more than half of the households in the country will be middle-class by 2016, while the high-income segment will triple by that year.
*
The report highlights that the mega cities households spend the least on an average on education and recreation, and 19 percent of households prefer to keep surplus income at home. 

India's growth to be fuelled by 20 cities: Report- Indicators-Economy-News-The Economic Times


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## Marshal

Two of Orissa's most controversial projects have got the green signal from the Supreme Court. The court cleared the Sterlite mining project and the Posco steel plant in Orissa which have been delayed by protests by tribals and villagers.

The Sterlite project worth $800 million was stuck for a long time over environmental concerns. Tribals in the region said the project to come up in Kalahandi district will severely damage the ecology of the region.

Now Sterilite, the promoters of the Vedanta group have been asked to pay for the welfare of the tribals.

Posco plans to build $12bn steel plant in India at the total project cost at Rs 51,000 crore. 

http://http://www.ndtvprofit.com/2008/08/08160127/Sterlite-Posco-projects-clear.html


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## Flintlock

*ASEAN, India to sign free trade pact in December: official*

8 hours ago

BANGKOK (AFP)  Southeast Asian nations expect trade with India will soar once the regional bloc ASEAN signs a just-concluded deal with New Delhi at a regional summit in December, officials said Friday.

Talks in Brunei Thursday removed the remaining obstacles to the pact, which will liberalise trade in goods between India and the 10-member Association of Southeast Asian Nations, said the group's secretary general Surin Pitsuwan.

The deal covering billions of dollars of trade in goods, but not services, is expected to be signed during the ASEAN-India Summit in December, officials said, though it was not immediately clear when it would take effect.

Talks were supposed to have wrapped up last year, but got bogged down over Indian tariffs on crude and palm oil from regional heavyweights Indonesia and Malaysia, as well as metals and textiles from Thailand, officials said.

"It's done. All final obstacles on palm oil tariffs have been resolved," the Indonesian trade ministry's Director General of International Trade Cooperation Gusmardi Bustami told AFP in Jakarta.

Total trade between ASEAN and India amounted to 28.7 billion dollars in 2006, putting India eighth on the list of the bloc's trading partners behind countries like Australia and South Korea, according to ASEAN figures.

A top Thai trade official predicted that number will rocket once the deal takes effect.

A more limited bilateral deal between Thailand and India was signed four years ago. Before the pact, two-way trade stood at one billion dollars a year, but now has jumped to four billion dollars a year, said Chana Kanaratanadilok, deputy director of Thailand's department of trade negotiations.

"Free trade between ASEAN and India will make a huge impact. Two-way trade between our country and India could average about 10 billion dollars a year," Chana told AFP.

The agreement with India is part of ASEAN's strategy of building trade pacts with major regional partners.

The bloc is pushing ahead with FTA negotiations with Australia, New Zealand and the European Union, and is hoping for the early implementation of a comprehensive economic partnership agreement with Japan.

ASEAN has also signed a landmark deal with Japan's economic rival, China, to create the world's biggest free trade zone by 2010.

Such bilateral deals could play an increasingly important role in future growth after the breakdown in global trade talks in Geneva earlier this week.

The attempt to break the seven-year deadlock in the so-called Doha Round of trade-opening talks hit deadlock between India and the United States over tariffs on agricultural goods in the event of an import surge or price fall.

For India, the ASEAN deal will help expand its influence in Southeast Asia at a time when the country is vying with China for trade ties and access to natural resources.

India adopted a free-market economy in the early 1990s and is keen to expand trade ties with ASEAN, but it is also keen to protect sensitive sectors such as agriculture and textiles, which provide livelihoods for millions.

Talks on the ASEAN deal had stalled over differences on products which India wanted excluded from tariff cuts.

New Delhi had submitted a list of 1,414 products, while ASEAN's target number was 400. The final list is reportedly about 560 goods, but officials would not give details on exactly how the differences were overcome.


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## Flintlock

*India must address problems concerning teachers: Tharoor*

New Delhi (PTI): Right to education will not be a reality in India unless problems concerning teachers are addressed, former United Nations Under Secretary General Shashi Tharoor said on Friday. Speaking at a function to launch 'Guruvar Awards' for teachers, Tharoor said there is a shortfall of about 25 lakh teachers in India at present. The pupil-teacher ratio in India is the worst in the world, he said.

"Under these circumstances, right education could only become reality only when we address the problem of teachers and make teaching an attractive profession," he said. He said nearly 40 per cent population of India are illiterates. In addition, 25 million children are out of schools now.

Tharoor's views assume significance as the draft *Right to Education Bill on Friday came up for discussion in the Cabinet whcih referred it to a Group of Ministers.* Dubai-based Varkey GEMS Foundation, a charitable trust working in education, launched the award for teachers for their contributions in the field.

"This is a novel initiative to felicitate teachers and encourage more people to join this profession," Tharoor said. The award would be given to four teachers selected from a pool of teachers from 3000 schools in India every year. Experience of teachers and their project work would be the main criteria for selection, GEMS's chairman Sunny Varkey said. The foundation would start giving awards from next year. 

The Hindu News Update Service


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## Neo

*India becoming major importer of sugar​*
NEW DELHI: India, a large exporter of sugar this year, will become a big importer of the sweetner after October 2009 as the crop shrinks and demand in the worlds top consumer rises, a leading producer said on Friday.

The country may import up to four million tonnes in the crop year from October 2009, Sanjay Taparia, finance director at Simbhaoli Sugars Ltd, told Reuters in an interview. He said Indias imports would have been even higher but the countrys choked ports would not be able to handle such a surge.

Sugar output in India, the worlds second largest producer after Brazil, is likely to be 26.5 million tonnes this year, down from a record 28.4 million tonnes last year. Exports in the current year are likely to be a record four million tonnes. Some expect production to fall further to 18-19 million tonnes in 2009/10 as deficient rainfall this summer has affected planting in some parts of the country.

Taparia said demand in the year that begins in October 2008 would be met from the new crop and stocks of 11 million tonnes. But in 2009/10, we will have to import for sure, Taparia said, adding that India would become a larger importer in years ahead as farmers turn to less risky and more lucrative crops. Domestic demand is steadily growing by 1-1.5 million tonnes annually in India, the worlds leading consumer of sugar, and could touch 24 million tonnes in 2009/10.

Traders say sugar prices have risen to 16.50 rupees (40 cents) per kilogram on forecasts of lower output in the next two years. The previous years all-time high production had hammered down prices to 14.50 rupees per kg. reuters

Daily Times - Leading News Resource of Pakistan


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## Neo

*ASEAN, India to sign free trade pact in December​*
BANGKOK: Southeast Asian nations expect trade with India will soar once the regional bloc ASEAN signs a just-concluded deal with New Delhi at a regional summit in December, officials said Friday.

Talks in Brunei Thursday removed the remaining obstacles to the pact, which will liberalise trade in goods between India and the 10-member Association of Southeast Asian Nations, said the groups secretary general Surin Pitsuwan.

The deal covering billions of dollars of trade in goods, but not services, is expected to be signed during the ASEAN-India Summit in December, officials said, though it was not immediately clear when it would take effect.

Talks were supposed to have wrapped up last year, but got bogged down over Indian tariffs on crude and palm oil from regional heavyweights Indonesia and Malaysia, as well as metals and textiles from Thailand, officials said.

Its done. All final obstacles on palm oil tariffs have been resolved, the Indonesian trade ministrys Director General of International Trade Cooperation Gusmardi Bustami told AFP in Jakarta.

Total trade between ASEAN and India amounted to $28.7 billion in 2006, putting India eighth on the list of the blocs trading partners behind countries like Australia and South Korea, according to ASEAN figures.

A top Thai trade official predicted that number would rocket once the deal takes effect.

A more limited bilateral deal between Thailand and India was signed 4 years ago. Before the pact, 2-way trade stood at $1 billion a year, but now has jumped to $4 billion a year, said Chana Kanaratanadilok, deputy director of Thailands department of trade negotiations.

Free trade between ASEAN and India will make a huge impact. Two-way trade between our country and India could average about $10 billion a year, Chana told AFP.

The agreement with India is part of ASEANs strategy of building trade pacts with major regional partners. The bloc is pushing ahead with FTA negotiations with Australia, New Zealand and the European Union, and is hoping for the early implementation of a comprehensive economic partnership agreement with Japan.

ASEAN has also signed a landmark deal with Japans economic rival, China, to create the worlds biggest free trade zone by 2010.

Such bilateral deals could play an increasingly important role in future growth after the breakdown in global trade talks in Geneva earlier this week. The attempt to break the seven-year deadlock in the so-called Doha Round of trade-opening talks hit deadlock between India and the United States over tariffs on agricultural goods in the event of an import surge or price fall.

For India, the ASEAN deal will help expand its influence in Southeast Asia at a time when the country is vying with China for trade ties and access to natural resources.

India adopted a free-market economy in the early 1990s and is keen to expand trade ties with ASEAN, but it is also keen to protect sensitive sectors such as agriculture and textiles, which provide livelihoods for millions.

Talks on the ASEAN deal had stalled over differences on products which India wanted excluded from tariff cuts.

New Delhi had submitted a list of 1,414 products, while ASEANs target number was 400. The final list is reportedly about 560 goods, but officials would not give details on exactly how the differences were overcome. afp

Daily Times - Leading News Resource of Pakistan


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## Neo

*India's top court clears Posco, Vedanta projects in key rulings​*By Penny MacRae 

NEW DELHI (AFP) - India's top court has cleared South Korean steel giant Posco's plan for a 12-billion-dollar plant in a controversial case seen pitting farmers' interests against growing industrial development.

In another key case viewed as a test of tribal rights, the court approved British mining company Vedanta Resources' proposal to mine bauxite on land held sacred by locals to feed a 900-million-dollar aluminium refinery.

The plant to be built by Posco, Asia's top steel producer, in the resource-rich eastern coastal state of Orissa would be the biggest foreign direct investment in India since it launched market reforms in 1991.

But the plant, which aims to create 18,000 jobs in a poverty-ridden part of the country over the next decade, has stirred violent protests by farmers objecting to loss of their land.

In both rulings Friday, the court imposed environmental and compensation conditions but the stipulations did not satisfy the projects' opponents.

"The ruling has no bearing on our struggle. We'll continue our fight against Posco. We'll never give up our land," said Abhoy Sahu, head of the group spearheading the protests against the steel project.

The government has been keen to draw foreign and domestic investment to create job-generating industries.

But the shift from agriculture has stirred big debate and often violent local opposition as many projects encroach on farm or tribal land.

Seoul-based Posco welcomed the court ruling and said it would proceed swiftly with the project, initially agreed in 2005, requiring 4,000 acres (1,600 hectares) of land.

POSCO plans a four-million tonne steel plant and a 400-megawatt power plant.

The company has a "firm commitment to the project" and is determined to move ahead "at full speed," said Posco India senior general manager Vikash Sharan.

Vedanta also said it was happy with the approval of its plan to carry out open caste bauxite mining on what tribals say is their holy mountain, also in Orissa state.

The company had sought permission to mine vast bauxite deposits in the fertile forested Niyamgiri Hills to supply the aluminium refinery it built nearby.

Vedanta has been feeding its refinery with bauxite purchased from other Indian states.

The case was seen as an important test of tribal and environmental rights against industrialisation.

London-based Survival International director Stephen Corry called the ruling "a devastating blow" to "all of India's tribal peoples."

In Orissa, Dongria Kondh tribal Jitu Jakaka, said: "We are deeply connected with the mountain... our sacred place. It is home to our god Niyamraja. We will not allow the company to mine our land."

Last November, Norway's state pension fund withdrew 13 million dollars in investments in Vedanta, accusing it of "causing serious damage to people and to the environment" in India.

India&#39;s top court clears Posco, Vedanta projects in key rulings - Yahoo! News


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## Neo

*India keen to share IT expertise in e-governance ​*
Press Trust Of India / Kuala Lumpur August 09, 2008

India is keen to share its expertise in Information and Technology with the Commonwealth countries to help them take up e-governance in a big way, Lok Sabha Speaker Somnath Chatterjee said today. 

Addressing the final plenary of the Commonwealth Parliamentary Conference here, he said that the world has witnessed a revolution in the field of information and communication technologies which has impacted it in a variety of ways. 

Chatterjee, who is heading the Indian parliamentarians delegation to the 54th Commonwealth parliamentarians meeting underway here, said that there was a need for making available authentic information to MPs to enable them function effectively. 

In this regard, he said generation of electronic data base and introduction of networking technologies has helps MPs in India to take "informed decisions". 

Chatterjee said that in India E-governance Plan is being implemented as the Central, State and local government levels at a cost of Rs 2,30,3000 million. 

He pointed out that the launch of the Lok Sabha Television has help in disseminating vital information about Parliament and its functioning to the people. 

Commonwealth Parliamentary Association's outgoing chairman, West Bengal Assembly Speaker Hashim Abdul Halim, was appointed the Treasurer of the CPA for a three-year term till 2011 by the General Assembly. 

It also elected Chatterjee, Bihar Speaker Uday Pratap Singh and Assam Speaker Tanka Bahadur Rai as Regional representatives from India Region on the Executive Committee of the CPA.

India keen to share IT expertise in e-governance


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## Neo

*Inflation will come down in 3-6 months, says FM ​*
Bangalore August 08, 2008

Finance Minister P Chidambaram today said the inflation rate will come down in the next 3-6 months with the tight monetary measures taken by the Reserve Bank of India. The country's rate of inflation crossed the 12 per cent mark on Thursday and the wholesale price index stood at 12.01 per cent.

"We have seen four years of good growth and this year is a difficult year due to things beyond our control. The rising crude oil prices in the international market has resulted in the rise in inflation. The internationally traded commodity prices have gone up over the last one year, on which we have no control," he said.

"What we are trying to do is, given the price effect we are trying to moderate aggregate demand by using tight monetary measures by sacrificing a bit of growth. That is the only way in which inflation can be tamed," he said addressing a discussion organised here today in connection with the launch of his book, "A view from the outside".

When the world economy slows down in 2008-09 and aggregate demand is contained, crude oil and commodity prices will also moderate, he said.

Inflation will come down in 3-6 months, says FM


----------



## Neo

*Inflation at 12.01% for first time in 13 years​*
The wholesale price index based annual rate of inflation rose to 12.01 per cent, prompting the Finance Ministry to say that inflation, on a week-on-week basis, has continued to remain stable. 

The WPI moved up from 239.3 in the week ending July 19, 2008, when it stood at 11.98 per cent, to 239.6 in the week ending July 26, 2008.

In the primary articles group, the annual point-to-point inflation increased to 10.32 per cent, as compared to 10.24 per cent reported last week, but lower than 10.84 per cent reported for the week ending June 28, 2008. The Finance Ministry said inflation at its current level was lower than its level of 10.47 per cent, a year back.

Out of a total of 98 articles, 18 articles have shown a decline in prices as compared to July 19, 2008. These included among others, arhar, gram, barley, wheat, rice, Bajra, urad, fresh coconut, cardamoms, groundnut seed and iron ore. Another 53 articles have shown no increase in prices.

Prices of 18 articles (out of a total of 19) in commodity group fuel and power have not shown any increase.

In the case of manufactured products, out of a total 318 commodities, a large number, 299 in all, have shown no increase in prices over the last week. In the case of 4 commodities there is a decline in prices. These commodities include cottonseed oil, groundnut oil, resins and acids of all kinds.

Only 15 products, particularly the cotton and woolen yarn, woolen cloth, groundnut cake, white printing paper, ball bearings, caustic soda, cement, newsprint and sugar witnessed an increase in prices.

The annual inflation rate for the group of 30 essential commodities at 6.66 per cent was marginally lower than the inflation of 6.67 per cent recorded in previous week.

Annual inflation of these commodities has continued to be range bound between 5.7 to 6.7 per cent in 17 weeks of the current fiscal year.

Increase in prices of essential commodities which include food grains, pulses, edible oils, vegetables, dairy products and some other commodities including kerosene, soap and safety matches have more or less stabilised.

<b>Inflation at 12.01% for first time in 13 years</b>


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## Neo

*Mumbaikars spend least on education ​*
Sunil Jain / New Delhi August 9, 2008

Spend 2.8% of income versus 6.7% for Delhi.

Due to the vastly different size of population (79 million in megacities versus 20 million in boom towns and 8 million in niche cities), the average size of various markets differs widely.

So, while Mumbaikars spend a smaller proportion of their incomes on food, beverages and tobacco (33.2 per cent) than Surat-ites (37.5 per cent), the total market for food, beverages and tobacco products in Mumbai in 2007-08 was Rs 28,590 crore as compared to a much smaller Rs 6,600 crore in Surat.

In education and recreation, similarly, Mumbaikars spent just 2.8 per cent of household expenditure versus 5.4 per cent in Surat  the size of this market, however, was Rs 2,420 crore in Mumbai in 2007-08 versus Rs 940 crore in Surat. Delhi had the largest market in this segment at Rs 4,480 crore.

On an average, niche city households spend around a fourth more than their megacity counterparts on housing, 18 per cent more on education, 23 per cent more on health and 27 per cent more on social spending.

WHAT DRIVES CONSUMPTION



As a result, 40 per cent of households in niche cities own a washing machine as compared to 33 per cent in megacities and 22 per cent in boom towns.

More than a quarter of niche city households own a car, marginally higher than that in megacities and much higher than the 15 per cent in boom towns.

Interestingly, niche cities fare the worse when it comes to the usage of financial products like credit cards (under five per cent of the population in towns like Amritsar, Ludhiana and Jalandhar have credit cards) and insurance policies (35 per cent for niche cities versus 47 per cent in boom towns).

As in all such cases, what drives consumption is a combination of rising income levels (reported yesterday) and changing consumption patterns across income groups as well as across cities for the same income groups.

While just 4.3 per cent of those with an annual household income of under $3,000 (Rs 1,20,000) own a car in the top 20 cities, this almost doubles as households reach the next group of aspirants (with maximum incomes doubling to Rs 2,40,000) and then again by almost seven times to 55 per cent in the case of the middle classes (where incomes range between Rs 2,40,000 and Rs 12,00,000).

In the case of mobile phones, around 16 per cent of low-income households own such modes of communication and this jumps to 53 per cent in the case of aspirant households and then to 77 per cent in the case of middle-class households. In the case of high-income households (who earn more than Rs 12,00,000 per year), this rises to nearly 90 per cent.

The combination of increasing income levels (more than half the population in niche cities is middle class as compared to 29 per cent in boom towns) and changing consumption patterns mean that the drivers of consumption are quite different across the cities.

Thus, over 70 per cent of car ownership in megacities like Delhi and Mumbai emanates from middle class households, it is just around 50 per cent in the case of the boom towns and almost as high as 80 per cent in niche cities.

In the case of mobile phones, while both aspirant and middle class households account for roughly the same proportion (45 per cent each) of ownership in megacities, the figure is 52 per cent and 33 per cent, respectively, in the case of boom towns.

In the case of air-conditioners, aspirants account for around seven per cent of ownership in megacities while this rises to nearly 30 per cent in the case of boom towns. In DVD players, similarly, the market is evenly divided among aspirant and middle class households (45 per cent each) in megacities; in the case of boom towns, however, aspirants account for around half the market while middle class households account for just around a fourth.

These are the findings of The Next Urban Frontier: Twenty Cities to Watch, an NCAER-Future Capital Research (of the Future Group) jointly written by Rajesh Shukla and Roopa Purushothaman.

Eight megacities like Delhi/Mumbai/Kolkata are the largest cities in terms of population and consumer markets, seven boom towns like Surat/Kanpur/Coimbatore represent the next set of large population cities with high expenditure levels; and five niche towns like Faridabad/Ludhiana/Jalandhar have smaller population but spend much more than cities of comparative size.

Mumbaikars spend least on education


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## Neo

*India least popular among expats for a long haul: Survey ​*
Press Trust Of India / New Delhi August 8, 2008

It offers the cheapest accommodation, the highest savings and a luxurious life across the world, but India is still the least desired place when it comes to attracting the expatriates for a longer stay, a new survey reveals.

According to a survey of expatriates across four continents, conducted by global banking major HSBC, Singapore, the US and the UAE have emerged as the three most popular destinations among expats.

The overall ranking, where India has been placed at ninth position, is based on four criteria  longevity of stay, earning and saving, luxury and accommodation.

In individual categories, India has been ranked as the country with the cheapest accommodation, while it comes on the top in terms of earnings and savings for the expats.

In terms of living a luxurious life also, India has been ranked as the third best after the UAE and Singapore.

However, when it comes to longevity, which measures the score of a country in terms of attracting expats and where expats settle down, India has been ranked at the bottom of the list.

The three countries scoring highest in terms of longevity are the Netherlands, Germany and the US.

Europe has emerged as the most popular destination in terms of the length of time expats stay there. More than three quarters (82 per cent) of expats now living in the Netherlands have been there for three or more years, followed by Germany (77 per cent) and Spain (76 per cent).

India least popular among expats for a long haul: Survey


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## Neo

* India cotton output seen at 24m bales ​* 
Sunday, August 10, 2008

WASHINGTON: India cotton output during 2008/09 is forecast at 24 million (480 lb) bales, a decline of 1 million bales from the prior year, due to a decline in area planted, a US Agriculture Department attache in New Delhi said in a report released on Friday.

In the report dated Aug 5, the attache said area planted was estimated at 9.1 million hectares (22.5 million acres), down from 9.55 million hectares (23.6 million acres) in 2007/08.

The attache also revised 2008/09 exports lower to 6.3 million bales compared with a record 7.2 million bales a year ago. Imports were increased to 800,000 bales from 390,000 bales due to relatively tight domestic supplies and removal of the import duty. The crop year for India cotton begins in August.

Separately, another attache said Pakistan cotton production during 2008/09 was estimated at 9.375 million bales on 2.8 million hectares (6.9 million acres).

India cotton output seen at 24m bales


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## Flintlock

* We are transforming rural India: PM*
Aug 14th, 2008 | By Sindh Today | Category: India

New Delhi, Aug 15 (IANS) Prime Minister Manmohan Singh Friday said his government was committed to transforming rural India and the results have already begun showing with a turnaround of the agricultural economy for the first time.

Addressing the nation from the ramparts of the Red Fort as India celebrated the 61st anniversary of its independence from British rule, Manmohan Singh said he had delivered his first Independence Day address from the same platform four years ago with the commitment to give a new deal to rural India.

And this was being achieved, he said.
*
Our effort at increasing investment in rural areas and reducing the debt burden of farmers has turned our agricultural economy around. After almost a decade of stagnation especially from 1998 to 2004, investment in agriculture is increasing and there has been a revival in this area.*
*
We have had record production of foodgrains, cotton and sugar in 2007-08, the prime minister said amid cheers from the thousands of people assembled on the rain-washed greens in front of the Red Fort in the old city.*
*
Our farms are once again green. Our godowns are once again filling up. Our farmers are once again hopeful about their future and their welfare.*

The prime minister said that through the Rashtriya Krishi Vikas Yojana (National Agricultural Development Plan), the government was investing Rs.25,000 crore (Rs250,000 million/$6 billion) in agriculture.

He said that to provide relief to debt-distressed farmers, banks loans to the tune of about Rs.71000 crore (Rs.710,000 million/$8 billion) had been waived.

In the past four years, he said, the government had increased bank credit for agricultural sector from Rs.81,000 crore to Rs.225,000 crore and reduced the interest rates for farm loans.

And in order to improve the economic conditions of farmers the government had increased the procurement prices for food grains - 50 percent for wheat and 30 percent for paddy. The National Food Security Mission had been set up to enhance production of rice, wheat and pulses.

Irrigation, watershed development, rain fed areas development, and flood management had received special attention.

The National Rural Health Mission had been expanding public health facilities and services in rural areas.*

He described the National Rural Employment Guarantee Programme as a historic initiative that is providing minimum livelihood support to the millions of needy rural poor and was aimed to soften the sharp edges of poverty.
*
*Saying that he had spent the first 10 years of his life in a village that had no electricity, no drinking water supply, no doctor, no roads and no phones, he said though after independence there had been considerable development in rural areas, yet many of our citizens still live a life that I lived in my childhood.*

That is why when our government took over, we launched Bharat Nirman - a project to build rural infrastructure.
*
Our government is committed to transforming rural India.* In these four years we have taken important initiatives. I am confident that a new and prosperous India will be built due to our efforts, he declared.


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## Flintlock

*India Inc's investment plans surge to Rs 10 trillion: Assocham*
17 Aug, 2008, 1236 hrs IST, PTI
NEW DELHI: India Inc seems unperturbed by signs of global recession, with their capacity expansion plans surging past Rs 10 trillion in the first six months of this year nearly double the figure for the previous five months, a study said.
Indian companies have announced capacity expansion investment worth Rs 10,50,950 crore in the first six months of 2008, against Rs 5,67,851 crore between July-December 2007, industry body Assocham said in a report on state-wise investments.
Out of the total 24 states tracked by the Chamber Research Bureau Andhra Pradesh, Maharashtra, Orissa, Rajasthan and West Bengal were the most preferred destination by the private players for making investments in the first half of 2008.
Maharashtra topped the chart with investment commitments worth Rs 1,20,065 crore in sectors like power, real estate, automobiles, ports and shipping, Assocham President Sajjan Jindal said.
The biggest of the announcements were made by Tata Power at Rs 25,000 crore, planning to raise power generation capacity to 12,861 MW for the next five years, Reliance Industries for setting up semi conductor plant and other micro -technology units, at an expenditure of Rs 21,666 crore for the next 10 years. 

India Inc's investment plans surge to Rs 10 trillion: Assocham - Indicators-Economy-News-The Economic Times


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## Flintlock

*'India Inc way ahead of Western companies'*

16 Aug, 2008, 1800 hrs IST,Deepshikha Monga, ET Bureau
NEW DELHI: Indian companies can teach the world, particularly the US, a lesson or two on workforce training and development. The former disciple that learned best corporate practices from the West has now become the guru, says a latest study.

The study, titled How the disciple became the guru , was released by Kauffman Foundation and conducted by Duke Universitys global engineering & entrepreneurship project team. It is based on interactions with leading Indian companies across sectors such as IT, BPO, banking and pharmaceuticals.

We were absolutely astonished by Indias capabilities in R&D that were as good as the West, despite a messed-up education system. Its not the universities which are training these R&D specialists but the surrogate education system created by Indian companies, the studys lead author and Duke Universitys Pratt School of Engineering executive-in-residence Vivek Wadhwa said.

The study notes innovative practices developed by Indian companies to tap the talent pool from an early stage. Companies are going to colleges much before they hire to help students become industry-ready.

For instance, 20 of Satyams 80 senior executives serve as mentors on campuses, and employees are encouraged to serve as guest lecturers. Infosys is piloting an initiative to hire and train final-year engineering students to do 3-4 month project. Genpact is hiring undergraduates to work for it three days a week for a salary in addition to paying half their tuition fees.

For recruitment, Indian companies are using retail kiosks and stores. While Genpact has about 22 such stores from where it hires 25% of its staff, ICICI Bank has recruitment kiosks inside its retail branches where candidates can submit resumes and appear for interviews.

The study notes that leading Indian firms recruit for general ability and attitude rather than specialised domain and technical skills. They rely on their own training and development efforts to impart the skills required. For instance, all IT-BPO companies hire non-engineering graduates . HCL Technologies goal is to have half its recruits from arts and science colleges.

Indian companies are doing way beyond the West. They are investing in their employees to make them more competent . American companies, who are worried about job loss and immigration loopholes , need to realise that you can only compete by making your workforce competitive , Prof Wadhwa said. Attrition remains the biggest challenge for Indian companies, but the study notes that their attrition rates are still lower than most American companies. Indian firms have been able to keep attrition rates constant or reduce them, Prof Wadhwa added. 

'India Inc way ahead of Western companies'- Corporate Trends-News By Company-News-The Economic Times


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## Flintlock

Every quarter the Centre for Monitoring Indian Economy (CMIE) tracks all investment projects presently under implementation. This is a useful resource for measuring inter-state variation in investment. Investment is the foundation of future income growth, so this data shows a sense of how different states will fare in the future. In addition, changes in the performance of states in this regard measure the success or failure of the political leadership in creating a business environment that is supportive of investment.

Measured in nominal rupees, the per capita investment under implementation in India rose from Rs.8,450 in December 1997 to Rs.22,669 in December 2007. This reflected a rise of 112% over the last five years and 168% over the last 10 years.

And Bihar still does not get it


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## Flintlock

*Chhattisgarh to get Rs.1.7 trillion investment in power
*
Fri, Aug 15 02:43 PM

Raipur, Aug 15 (IANS) Energy companies will invest Rs.1.7 trillion ($42.5 billion) in Chhattisgarh to set up coal-fired power plants having a total power generation capacity of 42,000 MW, Chief Minister Raman Singh said Friday.
*
'In a bid to become the power hub of the country, the state has signed separate agreements with a total of 51 companies that will pump in Rs.1.7 trillion to generate 42,000 MW electricity,' Raman Singh said* during his Independence Day speech at the Police Parade Ground here.

The highlights of the Independence Day function was a dashing cultural programme by students attired in colourful dresses and a show by sniffer dogs deployed in insurgency-hit areas to detect land mines.

He said the state had made all round progress in recent years, evident from the rising number of engineering and poly-technique colleges as well as expanding road networking even in the interiors.

'The number of engineering colleges has gone up to 31 from 14 four years back and poly-technique colleges to 13 from 10. They now have a combined enrolment strength of 10,000 engineering students,' Singh said in his 20-minute speech.

'In just the past one year, 7,361 km of roads have been constructed in addition to 300 km of road under projects funded by the Asian Development Bank (ADB),' the chief minister said.

Chhattisgarh to get Rs.1.7 trillion investment in power - Yahoo! India News


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## nitesh

guys check this:

Another telecom revolution in sight

Welcome


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## nitesh

FDI in Q1 FY 09 exceeds total inflows in 2005-06- Indicators-Economy-News-The Economic Times
MUMBAI: India is fast catching up with China in the flow of Foreign Direct Investment as it crossed 10 billion dollars in the first quarter of this fiscal. 

Foreign Direct Investment (FDI) in the first quarter of FY 09 has far exceeded the total FDIs flows received by the domestic economy in the financial year 2005-06, Reserve Bank data said. 

The total FDI inflows into the country in the April-June period amounted to USD 10.073 billion, nearly one billion more than the total FDI inflows--USD 8.961 billion, reached in the 2005-06 period, RBI said in its August report. 

The FDI flow into India was less than 10 billion dollars annually until 2005-06. It shot up to 22 billion dollars in 2006-07 and 32 billion dollars in 2007-08. China averaged 50 billion dollars annually in the past decade. 

If the first quarter trend continued, India could cross this fiscal 40 billion dollar mark in FDI annual inflow for the first time. 

FDI flows, during April-June, almost doubled when compared to the same quarter of FY 08, USD five billion. Of the total FDIs reached here in the April-June period this fiscal, around USD 2.253 billion was on account of the acquisition of shares of Indian companies by foreign entities, RBI said. 

While the momentum in the foreign direct investment is expected to continue in the remaing part of FY 09 on the back of a strong domestic demand, the pace of the growth may be a little lower compared to the preceeding months, RBI said. 

"The private corporate investment in 2008-09 is likely to increase, although it may grow at a slower pace... Corporate's incentives to invest are likely to remain strong in 2008-2009, namely high domestic demand and high capacity utilisation rates amidst improved profitability of last few years," RBI said. 

The country received a record USD 11.9 billion FDI in the final quarter of last financial year and has continued the momentum despite the choppy market conditions in some of the major economies in the first quarter on the back of a strong domestic demand for various projects. 

According to the Reserve Bank's estimates, total Foreign Direct Investment in the first six months of the current calender year aggregated to USD 21.948 billion, close to a USD 22.079 mark routed to domestic market by Foreign direct investors in 2006-07. 

Meanwhile, FIIs sold a total of USD 5.177 billion in the April-June period, much above as compared to a USD 4.1 billion in Q4 FY 09, RBI said. 

Total FII inflows in FY 08 stood at USD 20.328 billion while other investors including offshore funds put in USD 298 million during the period. However, in the current fiscal, except in January, FIIs sold nearly USD 15.811 billion, so far, RBI data showed. 

In January, the country received an FII inflow of 6.49 billion.
-----------------------------------------------------------
finally some good news, hope these inflows will help in Current Account. We should target for 80 billion FDI by 2010 or 2011.

some more good news

Foreign capital inflow hits $22 bn in first six months
Foreign capital inflow hits $22 bn by half time- Finance-Economy-News-The Economic Times
MUMBAI: Foreign investment in the country&#8217;s industrial and other firms has surged to nearly $22 billion during the first six months of the year, with the momentum of flows continuing in the first quarter of 2008-09. 

After record flows of $11 billion during the last quarter of 2007-08, foreign direct investment (FDI) during April-June 2008 has topped $10 billion &#8212; providing comfort to fiscal and policy managers considering that foreign portfolio investors have been major sellers since the beginning of the year. They have sold stocks worth $6.5 billion this year. 

What is most encouraging this time is that a bulk of the inflows have been channelised into greenfield projects. Indications are the FDI flows would be enhanced with an estimated investment of $5 billion by Dai-chi Sankyo in Delhi-based pharma company, Ranbaxy. Our policy makers have placed FDI on top of their preferred hierarchy of capital flows considering the benefits it provides in the form of job generation and technology transfer. 

According to the latest RBI data, at $10.1 billion, FDI inflows during April-June were double the amount of what the country received a year ago. However, according to the Prime Minister&#8217;s Economic Advisory Council, &#8220;it is possible this doubling in April-May is due to bunching of transactions and is unlikely to be sustained through the year&#8221;. 

FDI inflows have been on the rise in the past three years. In 2007-08, inflows touched $32 billion. However, a sizeable portion is reinvested earnings by companies, i.e., money invested in acquisition of existing shares or private equity inflows. However, the FDI figures for the latest quarter don&#8217;t include reinvested earnings. Also, of the $10.1-billion FDI, only $2.3 billion is towards share acquisition. Even private equity flows, also included in the FDI numbers, are believed to have slowed significantly in the wake of the turmoil in the global credit market. 

However, what could be adding to the discomfort of policy makers is the sectors that the money is flowing into. Nearly 15&#37; of the FDI inflows during April-May, for which the data is available, has gone to the real estate and housing sector. Services and infrastructure are the other sectors witness to huge inflows. 

*The FDI figures seem to indicate that the country&#8217;s long-term growth story is strong. In fact, in its report released earlier during the week, credit rating firm Standard and Poor&#8217;s has forecast that although the country&#8217;s growth projections have been lowered over the initial forecast twice this year, it would still be the second-fastest growing economy in Asia-Pacific after China. 

Rating agencies have been expressing concern about the country&#8217;s external finances in addition to their concerns about inflation and fiscal deterioration. However, rising FDI flows appear to have bolstered the balance of payments &#8212; a balance-sheet of the country&#8217;s financial transactions with the outside world &#8212; especially against the backdrop of an outflow of $5 billion of portfolio investments during the period. 
*
Notably, while FDI is seen as stable foreign money, portfolio investment is volatile and considered hot money that may be drawn down swiftly during a financial or an economic crisis. 

The report on the outlook for the economy in 2008-09 released by the Prime Minister&#8217;s Economic Advisory Council released earlier this week is bullish on FDI inflows, though it has scaled down the country&#8217;s growth projections. For the year as a whole, it has taken a 43% increase in in-bound FDI to $46.2 billion (including private equity).
-----------------------


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## jaison

i think india has lot of potential compared to china....even if we cant beat them in economy may be we can beat them technologically as we have a large talent pool and the avg age of indians is 29 which far lower than chinas....but we should have a more holistic approach to education,r&d........and we also have better access to western technology than china


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## Energon

jaison said:


> i think india has lot of potential compared to china....even if we cant beat them in economy may be we can beat them technologically as we have a large talent pool and the avg age of indians is 29 which far lower than chinas....but we should have a more holistic approach to education,r&d........and we also have better access to western technology than china


 Currently China is way, way ahead when it comes to technology specific R&D and production compared to India. In fact it is unlikely that India will able to "catch up" with their Chinese counterparts anytime soon (in our lifetime).


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## lovemess17

Energon said:


> Currently China is way, way ahead when it comes to technology specific R&D and production compared to India. In fact it is unlikely that India will able to "catch up" with their Chinese counterparts anytime soon (in our lifetime).



i dont know how u feel but i am confident and calling chinas technology specific R&D and production are far ahead is just baseless
work hard help people come up and i will try to do the same if does not work even after a long time (within our lifetime)then i will agree with your words.


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## Flintlock

*ASEAN concludes free trade deal with India: ministers*

5 hours ago

SINGAPORE (AFP)  Southeast Asian nations have concluded a deal for free trade in goods with India, ministers said Thursday, in a development hailed as a key regional milestone after hard negotiations.

The agreement between the Association of Southeast Asian Nations (ASEAN) and India, its seventh-largest trading partner, covers billions of dollars in trade and a market of 1.7 billion people.

Singapore's Minister for Trade and Industry Lim Hng Kiang and India's Minister for Commerce and Industry Kamal Nath announced the deal during an ASEAN meeting in the city-state.

Nath expressed India's "deep satisfaction" at the conclusion of the pact, which followed six years of talks.

"This is an important milestone for our region," he said.

ASEAN and India have set a target for total trade to reach 50 billion US dollars by 2010 from 38 billion dollars currently, Nath added.

The Southeast Asian bloc of about 550 million people is forging free trade pacts with key regional economies, including China and India, to ensure it does not become economically sidelined.

ASEAN itself aims to achieve a single market and manufacturing base by 2015.

Senior officials agreed on the ASEAN-India pact earlier this month during a meeting in Brunei, but it was only sealed this week at the Singapore meetings.

The deal is to be signed at ASEAN's Bangkok summit in December. It covers contentious products like crude and refined palm oil, coffee, pepper and tea, but also excludes 489 items from tariff cuts.

Lim said the excluded items represent five percent of annual trade value and are "not a very significant number."

The agreement was supposed to have been concluded last year, but talks became bogged down by differences over products that India wanted excluded from tariff cuts.

New Delhi had submitted a list of 1,414 products, while ASEAN's target number was 400.

India adopted a free-market economy in the early 1990s and was keen to expand trade ties with ASEAN, but it also wanted to protect sensitive sectors such as agriculture and textiles, which provide livelihoods for millions.

"It took a long time understanding the sensitivities of all the countries within the ASEAN and for the ASEAN countries to understand India's sensitivities," Nath said.

He added that India had already reduced tariffs unilaterally.

Its rate on crude palm oil has been cut to zero from 50 to 60 percent five years ago, while India's peak tariff rates now average 9.7 percent compared with 20 to 25 percent five years ago, he said.

Lim, the Singapore trade minister, said it was not easy for India to deal with ASEAN's 10 diverse states, but "respecting our sensitivities and exercising flexibility" sealed the deal.

Nath said India's trade with ASEAN is 9.6 percent of his country's global trade, while trade with India is only two percent of ASEAN's global trade.

"So the potential for enhanced economic engagement between ASEAN and India is profound," he said.

Indonesian Trade Minister Mari Pangestu said the agreement "will pave the way for greater and closer economic partnership and cooperation in the future" between ASEAN and India.

Ministers also agreed to start new negotiations to expand the trade pact to include services and investments. Those talks are to be completed by the end of 2009.

ASEAN, Australia and New Zealand also announced Thursday that they had concluded talks on comprehensive free trade deals.

The Southeast Asian bloc has now completed trade ties with all its key Asia-Pacific trading partners following the latest pacts.

ASEAN sought to strengthen regional trade links after the so-called Doha Round of global trade talks broke down in July because of a dispute between India and the United States over agricultural tariffs.

AFP: ASEAN concludes free trade deal with India: ministers


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## Flintlock

*Economic Terrorism threatens India's economy*
Font size: Decrease font Enlarge font
Raja Murthy 28 August, 2008 08:16:00
"Economic terrorism" threatens India with a staggering US$51 billion worth of counterfeit currency circulating in the country, according to India's Intelligence Bureau. The government, though, has expressed no serious hurry to tackle this menace, even as police say fake currency notes are also funding terrorist groups in India. The Reserve Bank of India (RBI), the regulator, estimates a lower figure of counterfeit money than $51 billion, but given a flurry of publicized recent police arrests across the country of suspects nabbed with huge amounts of fake currency, estimates could be on the higher rather than the lower side.

.......

Panda has reasons for anxiety. Over 25% of currency in public hands could be counterfeit, given RBI statistics that $140.95 billion worth of currency notes are in circulation as of August 15, 2008. Worryingly, police seizures of fake notes sensationally included a branch of the country's leading banker, the State Bank of India. An August 8 seizure of over $369,000 worth of fake notes from the State Bank of India branch in Domariaganj, a small town in the north Indian state of Uttar Pradesh, led to arrests of a bank cashier, Sudhakar Tripathi, alleged to be involved in mixing fake notes in the bank's currency chests. Tripathi was caught only after he began conspicuously splurging the money with which he allegedly had been bribed by counterfeiters.

MorungExpress.com > Latest breaking news on Nagaland,India & world - ?Economic Terrorism? threatens India&#039;s economy


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## Nafees

*Indian economy's biggest challenge ​*
*Source: By Kaushik Basu 
Professor of economics, Cornell University . BBC NEWS | South Asia | Indian economy's biggest challenge*

Seldom are parliamentary proceedings in India as exciting as they were last month when the Congress-led government survived a no-confidence motion against it, after its Communist allies pulled out support and a motley group of smaller parties stepped in. 

The nation watched the parliamentary debate and the vote with an attention that is usually reserved for cricket matches. 

At the heart of the controversy was the '123 Agreement' between India and the US, which requires India to open up its civilian nuclear facilities for international inspection and, in return, the US and other members of the Nuclear Suppliers Group (NSG) to lift the blockade that was placed on India in 1974, following India's testing of a nuclear device. 

The blockade prevents India from importing uranium and other 'dual-use' materials and machines that can be used for the production of nuclear weapons, even if India wishes to use them for peaceful purpose. 

Desirable agreement

This meant that India could not expand the production of nuclear energy. 

From India's point of view this agreement seems eminently desirable. 

Some argue that nuclear energy is not economically viable. But this misses the point that the 123 Agreement does not force India to produce nuclear energy. It simply grants India the right to do so. 

It is, therefore, not surprising, that the Indian parliament finally signalled its approval of the agreement by defeating the no-confidence motion. 

There are a few more steps to be taken by the international community before the agreement takes force. If and when that happens, it will figure as one of the most major breakthroughs of this government. 


It will be a de-facto recognition of India as a nuclear power but that is not what I am referring to (and it is not clear that that is a reason for celebration). 

To me what is more important is that the agreement can have a huge impact on the economy. 

Expectations have been raised in many quarters that, without the restraining effects of the Communists, the Congress-led government will now usher in important economic reforms. 

Domestic lobby

I do not think that one should expect much to happen on this front. 

Maybe some small banking and insurance reforms will go through but not much else can be expected in the short run. 

For one, it is foolish to think that all restraints to reform were coming from the left. 

There is still a large lobby of domestic firms that is against foreign corporations coming into India. And this force is not about to vanish. 

Second, with elections round the corner the government is unlikely to attempt any major reform just now. 

The main boost will come from the fact of India having the option to produce nuclear energy and also from the signal-value of the lifting of the blockade to the world of India being a recognised global player. 

If the price of oil climbs very high and our effort to produce solar energy continues to be frustrated, nuclear energy can jump to a major source of power. 

Once the big worry shadowing India's growth curve, namely, the possibility of power shortages, is somewhat allayed, the nation could see a sharp rise in foreign and domestic investment in the form of start-ups and industrial expansion, and be able to concentrate on other important reforms. 


One such second-generation reform that ought to get priority is the control of corruption and bureaucracy. 

For ordinary Indians, one of the most distressing features of the Indian economy is corruption. 

Rightly so. Corruption is morally degrading, eats into the fabric of society and hurts economic development. A government that can credibly promise to deliver on this will gain instant support. 

This is where the present government can leverage its recent victory in parliament and make a difference to the nation. 

The Indian Prime Minister, Manmohan Singh, is one of those rare politicians, whose power comes largely from his honesty and decency. He is in a position to spearhead a move to curb corruption. 

This will not be easy since large vested interests have developed in the present system and there will be resistance. 

There are some sectors, such as housing and real estate, where corruption is so endemic that a law to book all corrupt persons will cause an intolerable disruption of business. 

The design of corruption control is a subject on which a large literature has developed. 

The plan has to combine moral commitment with intelligent design. 

If this government can start on such a program now and deliver on it over the next five years, this will go down in independent India's history as a change as significant as the reforms of the early nineties and maybe more.


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## Neo

* India sees record rice buys, export hopes brighten ​* 
Thursday, August 28, 2008

NEW DELHI: India will buy record quantities of rice from its farmers after a good harvest, a top government official said, raising hopes it will join the ranks of top global producers easing export curbs. 

India will review its ban on non-basmati exports in November, and the possible return of what was the worlds second-biggest rice exporter last year will add further pressure to prices that have slid around a third from their May record high. 

Alok Sinha, chief of the Food Corp of India, told Reuters the state-run firm had already bought more than the targeted 27million tonnes, easing concerns of some trade and government officials that procurement would fall short of the mark. After procuring record quantities of wheat, we are going to repeat the feat in rice by procuring 28 million tonnesí surpassing 27.5 million tonnes procured two years ago, Sinhasaid. 

India joined other major producers earlier this year in banning exports on fears of dwindling supplies and rising prices, sending benchmark Thai prices THWHB-up three-fold to a record peak of $1,080 a tonne in March. 

But Egypt has said it will end its ban next month, Pakistan, the worlds fifth-largest exporter, has scrapped a minimum export price, and Vietnam lifted its ban in mid-June. Traders say Indias recent decision to allow exports of seeds of rice and corn as well and hopes of record purchases may spur the government to allow some exports. 

Farm Minister Sharad Pawar has said the government would review the ban on non-basmati rice exports after October, when the new crop is harvested. Sinha, the custodian of the countrys grain stocks, said wheat at warehouses stood at 23.5 million tonnes, up from 13.5million tonnes a year ago. 

Rice stocks were at 7.9 million tonnes, down 2 million tonnes on year. Higher food stocks in India, the worlds second-biggest grower of rice and wheat, ease concerns of a shortage in world markets and keep global grain prices in check, analysts say. While rice export curbs pushed Thai prices up, a number of wheat import tenders floated by India in 2006 and 2007 led to a spurt in prices on the Chicago Board of Trade.


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## Contrarian

You all have forgotten to mention that InfoSys just bought a UK based software solutions and consultancy firm. Its the biggest buy by an Indian Software major till now. It is the biggest buy and one of the biggest news...

Sheesh!


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## dr.umer

*'Only Nepal is worse than India in terms of poverty'​*


New Delhi, Aug 28: A day after the World Bank said that over 45 crore Indians live below 1.25 dollar a day, another multilateral agency ADB came up with a new indicator which said India ranks below even Bangladesh, Pakistan and Sri Lanka in terms of poverty among Asian countries.

Almost 54.8 per cent of the Indians were spending less than USD 1.35 a day in 2005, said that the ADB while releasing Key Indicators 2008, which provides a new methodology for measuring poverty.

According to World Bank's latest definition of poverty, persons spending less than USD 1.25 dollar a day are poor. Earlier, poverty line was fixed at USD 1 dollar a day.

ADB study also pointed out that the only Asian country which suffered from higher incidence of poverty than India was Nepal where more than 55 per cent people were living below the poverty line.

Among the other neighbouring countries, 42.9 per cent were poor in Bangladesh, 24.9 per cent in Pakistan and 5.9 per cent in Sri Lanka.

ADB study added that 62.19 crore people were poor in India in 2005, while according to World Bank's estimates the number of poor was 45.6 crore, which were more than poor living in sub-Sahara Africa.

Pointing out that sustained economic growth is imperative for poverty reduction, ADB said, "policies that can also make growth more inclusive (should) remain the gold standard that policy makers should pursue." According to the ADB report, pro-poor distribution policy can reduce poverty from 54.8 per cent to 20.4 per cent by 2020, while the pro-rich policies would bring down the poverty to 29.6 per cent.


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## dr.umer

*India growth at 3-½ yr low but rates to stay tight​*
Reuters UK
By Surojit Gupta

NEW DELHI, Aug 29 (Reuters) - India's economy grew at its slowest annual rate in 3-½ years in the June quarter, losing momentum as services slowed markedly, but high inflation meant the central bank was unlikely to relax its monetary stance soon.

Annual growth for India's April-June fiscal first quarter was 7.9 percent <INGDPQ=ECI>, data showed on Friday, lower than the median forecast in a Reuters poll of 8.1 percent and 8.8 percent in the March quarter.

Analysts said growth remained robust, but higher interest rates and oil and commodity prices were taking their toll and expansion for the fiscal year was likely to be about 7.5 percent, from rates of 9 percent or more in the previous three years.

"In the face of good growth and loose fiscal policy, I don't expect any relaxation in the central bank's tight policy stance even though inflation has moderated slightly," said Indranil Pan, chief economist at Kotak Mahindra Bank.

India, whose economy is less export-oriented that many of its Asian neighbours, is keen to see expansion of 8-10 percent to reduce poverty and create jobs.

China saw economic growth slowing in the first half but still in double digits, while Singapore and Hong Kong, Asia's most open economies, reported quarterly contractions in April-June.

Finance Minister Palaniappan Chidambaram said India was seeing a high degree of savings and investment which made him confident it would achieve its growth target.

This year also growth will be close to 8 percent, and close to 8 percent growth is not something to be scoffed at," he told reporters in Mumbai.

*SERVICE GROWTH SLOWS*

India's markets took the data calmly. The 10-year bond yield <IN082418G=CC> stood at 8.67 percent, after briefly dipping 1 basis point. The rupee <INR=IN> was a shade lower on the day at 43.78/79 per dollar while stocks were up 3 percent, helped by some moderation in inflation and gains in Asia.

Inflation in India has raced above 12 percent to its highest in the 13 years the current series has been available, largely due to surging oil and food prices, although data on Thursday showed the annual rise had moderated slightly in mid August.

The central bank raised interest rates three times in June and July, lifting its key lending rate to a seven-year high of 9.0 percent to dampen persistent demand pressures and discourage knock-on price increases from a hike in state-set fuel prices.

Economists said a loan waiver to farmers from the government and a steep hike in government employees' salaries this year would provide a boost to output.

"Consumption spending is going to get a boost from an expansionary fiscal policy in the second half of the year," said Gaurav Kapur, economist at ABN AMRO.

Manufacturing grew an annual 5.6 percent in the June quarter, slightly slower than 5.8 percent in the March quarter, while agriculture expanded 3.0 percent, a touch faster than previously.

Economists noted services, which form more than 50 percent of economic output, had braked faster than other sectors, slowing to 10.0 percent growth from 11.2 percent in the previous quarter, which they said was the weakest in three years, as global financial market turmoil took its toll on local markets.

"The prolonged slowdown in manufacturing does now finally look to be spreading to services, with financial services growth showing the biggest decline from 10.5 percent to 9.3 percent," said Robert Prior-Wandesforde at HSBC.


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## nitesh

Editorial: Over-estimating poverty?

Editorial: Over-estimating poverty?
Business Standard / New Delhi August 29, 2008, 4:35 IST

The World Bank recently published the results of a research project on global poverty. India, which has the largest absolute number of poor people however defined, is obviously a major focus of the project. The main innovation in the research methodology is the development of a new poverty benchmark, based on Purchasing Power Parity (PPP) exchange rates and domestic prices for 2005. The previous benchmark was based on 1993 numbers, which were clearly inadequate for capturing the dramatic changes in the Indian economy and, for that matter, emerging economies in general over the last decade.

From the Indian perspective, while the broad trends are indisputable, several questions arise from the numerical estimates of poverty. With the new poverty benchmark of $1.25 per capita per day, which translates into Rs 21.6 per day in urban areas and Rs 14.3 per day in rural areas at the 2005 prices, 42 per cent of Indians were estimated to be below the poverty line in 2005. This was substantially down from 60 per cent in 1981, but will still come as a shock to people, who are used to thinking of poverty incidence being in the low 20 per cent range. Very significantly, both from the perspective of the methodology for the study and the design of poverty alleviation programmes in India, the proportion of people who had less than a dollar a day, a popular benchmark, was estimated to be 24 per cent in 2005, down from 42 per cent in 1981, which brings it quite close to the official Indian estimates of poverty. This means that 18 per cent of Indians, about 200 million people, earn and spend between $1 and $1.25 a day. These are people who would not be considered poor by the system and therefore do not have access to various entitlements but have a standard of living not very different from the official poor. Two hundred million people falling through the cracks in this manner is, politically speaking, a ticking time-bomb.

This is where some concerns about the numbers are appropriate. In an article in this newspaper last week, Surjit Bhalla criticised the new PPP numbers and the benchmarks based on them as being completely inconsistent with other indicators of growth and development. His analysis suggests that, with the new numbers, emerging Asia as a region looks far worse off than with the old numbers. Virtually everybody who is doing business in emerging Asia today would dispute that fact; for most products and services, the last decade has unquestionably been a boom phase. The notion that a large number of first-time consumers for various goods and services can generate exponential rates of growth in demand for long periods of time has been validated for several products in all the countries in the region. Specifically in the Indian context, the recent record of penetration of products such as two-wheelers and mobile phones, not to mention a number of fast-moving consumer goods, challenges the estimate that there is such a large number of people on the fringes of the official poverty line. No one should dispute the fact that poverty in India is way too high and the quality of life of even the near-poor is unacceptable. However, the danger in over-estimating the problem is that it might evoke the wrong policy response, focusing on the immediate rather than the important.


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## nitesh

India clinches Asean FTA

The formal pact will be signed this December at the India-Asean summit at Bangkok, which is expected to be attended by Prime Minister Manmohan Singh.

The breakthrough comes after six years of negotiations for the trade pact, which is expected to add $12 billion by 2010 to trade between the participating nations.

A SNEAK-PEEK AT THE INDO-ASEAN FTA
* Reduces tariffs to zero in over 4,000 goods out of 5,000 that are traded. To be done in a phased manner over six years
* Partial reduction in import tariffs on highly sensitive farm goods. Tea, coffee &#8212; 45&#37;, pepper &#8212; 50%, crude palm oil &#8212; 37.5%, refined palm oil &#8212; 45%
* Sensitive list of goods with partial duty cuts &#8212; 606 items, (Agricultural &#8212; 16, Textile &#8212; 304, Machinery & auto &#8212; 60, chemicals & plastic &#8212; 226)
* Negative list with no duty cuts &#8212; 489 items. (Agricultural &#8212; 302, Textile &#8212; 81, Machinery & auto &#8212; 52, chemicals & plastic &#8212; 32, Others &#8212; 22)
* Operational from Jan 1, 2009, Deal to be signed in December, 2008 at Bangkok
TRADE SNAPSHOT
* Bilateral Trade (Apr-Feb 07-08) &#8212; $34.38 billion which is 9.59% of India&#8217;s global trade
* Exports &#8212; $14.02 billion, Imports &#8212; $20.36 billion 

The deal comes at a time when the Doha round of world trade talks are stalled.

The India-Asean FTA also comes at a time when China has already signed a similar pact with the economic bloc, as a result of which bilateral trade between them soared to over $171 billion last year.

Today, a joint statement issued after a meeting of trade ministers from India and key Asean members said the agreement will facilitate the creation of an open market for 1.7 billion people with a combined gross domestic product of $2.4 trillion.

During the course of the FTA talks, several issues had emerged as stumbling blocks, which included composition of the negative list (trade items that are outside the purview of duty cuts mandated by the pact) and tariff cuts on five highly sensitive farm products (see chart).

In fact, India had to compromise on several of these issues and accede to demands of nations like Vietnam, Indonesia and Malaysia. The sticking points included reducing the number of items in the negative list, reducing tariffs on highly sensitive farm products as well as Rules of Origin, norms that ensure that products from non-Asean countries like China are not routed to India at zero duty under the FTA.

Once the deal is operational &#8212; which is likely from January 2009 &#8212; the signatories to the pact will begin cutting import tariffs in a phased manner.

Normal goods will see import duties reduced to zero over six years, items in the sensitive list, will see partial tariff reductions over a longer period of time (see chart).

Talks for the India-Asean FTA began during the National Democratic Alliance government, with both sides initialling a framework agreement in late 2003. It is a measure of the importance that the current United Progressive Alliance (UPA) government has placed on expanding India&#8217;s role in trade with the Asean nations that the pact has been finalised.

The UPA had internal concerns over reducing tariffs on five highly sensitive farm products &#8212; tea, coffee, pepper crude, refine palm oil. In fact, UPA chairperson Sonia Gandhi and minister of state for commerce Jairam Ramesh had last year written to Prime Minister Singh expressing concern over the possible adverse impact of such a move.


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## nitesh

India's economy grows at 7.9% in Q1

India's Gross Domestic Product (GDP) growth for the April-June 2008 period 
has slowed down to 7.9 per cent, as against 9.2 per cent over the 
corresponding quarter of the previous year. The GDP has been showing an 
average growth of over 8 per cent over the last four years.

The economic activities which registered significant growth in Q1 of 2008-09 
over Q1 of 2007-08 are, 'manufacturing' at 5.6 per cent, 'construction' at 
11.4 percent, 'trade, hotels, transport and communication' at 11.2 per cent, 
'financing, insurance, real estate and business services' at 9.3 per cent, 
and 'community, social and personal services' at 8.4 per cent.

The growth rates in 'agriculture, forestry & fishing', 'mining & quarrying' and 
'electricity, gas & water supply' are estimated at 3.0 per cent, 4.8 per 
cent and 2.6 per cent, respectively during this period.

The production of crops rice, wheat, coarse cereals and pulses during the 
Rabi season (which ended in June, 2008) of 2007-08 recorded growth rates of 
3.3 per cent, 3.4 per cent, 8.6 per cent, and (-) 7.9 per cent, respectively 
over the production in the corresponding season of previous agriculture 
year. Among the commercial crops, the production of oilseeds declined by 
12.6 per cent during the rabi season of 2007-08, while the production of 
cotton and sugarcane recorded growth rates of 14.0 per cent and (-) 4.2 per 
cent, respectively during the agriculture year 2007-08.

The GDP data, released by the Central Statistical Organisation (CSO), 
Ministry of Statistics and Programme Implementation here today said that 
among the services sectors, the key indicators of railways, namely, the net 
tonne kilometers and passenger kilometers have shown growth rates of 9.3 per 
cent and 7.0 per cent, respectively during Q1 of 2008-09.

In the transport and communication sectors, the production of commercial vehicles
, cargo handled at major ports, cargo handled by the civil aviation, passengers 
handled by the civil aviation and the total stock of telephone connections 
(including WLL and cellular) registered growth rates of 9.1 per cent, 8.8 
per cent, 8.3 per cent, 4.4 per cent and 44.8 per cent, respectively during 
Q1 of 2008-09 over Q1 of 2007-08. The other key indicators, namely, 
aggregate bank deposits, and bank credits have shown growth rates of 21.1 
per cent, and 25.8 per cent, respectively during Q1 of 2008-09 over Q1 of 
2007-08.

The Index of Industrial Production (IIP), the index of mining, manufacturing 
and electricity, registered growth rates of 4.7 per cent, 5.6 per cent and 
2.0 per cent, respectively during Q1 of 2008-09, as compared to the growth 
rates of 2.7 per cent, 11.1 per cent and 8.3 per cent in these sectors 
during Q1 of 2007-08. The key indicators of construction sector, namely, 
cement and finished steel registered growth rates of 5.8 per cent and 4.5 
per cent, respectively during Q1 of 2008-09, as against the growth rates of 
7.2 per cent and 5.4 per cent, respectively in Q1 of 2007-08.


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## nitesh

India set to achieve $40 bn FDI in FY09 - Express India

India set to achieve $40 bn FDI in FY09

New Delhi, August 25: India is set to attract foreign direct investment of USD 40 billion in fiscal 2008-09 with overseas investors betting big on the manufacturing sector in world's second fastest growing economy.
The country received USD 20 billion foreign direct investment (FDI) between January and June in the calendar 2008 and USD 10 billion in the first quarter of the current fiscal.

"Going by this, achieving USD 40 billion in 2008-09 does not seem unrealistic," Secretary in the Department of Industrial Policy and Promotion Ajay Shankar said at a FICCI function in New Delhi. The target for the fiscal is set at USD 35 billion. The inflows in 2007-08 were USD 25 billion.

Shankar said, though seeing slight moderation in production growth, India has emerged among the preferred destinations for the overseas investors. Automobiles and construction equipment segments are attracting increased interest among investors.

The DIPP Secretary expressed hope that the growth outlook in the manufacturing sector would be "more positive" in the next few months.

"There was a slight moderation but the industry has undertaken cost-cutting and other productive measures," he said.

The Index for Industrial Production (IIP) growth had dropped to 5.4 per cent in June this fiscal from 8.9 per cent a year ago. For the April-June period as well, the IIP rose by 5.2 per cent against 10.3 per cent in the same period last year.

Within IIP, manufacturing expanded by 5.9 per cent in June against 9.7 per cent in the same month last year. For the first quarter, the segment grew by 5.6 per cent, compared to 11.1 per cent in the corresponding period in 2007-08.

Though the growth outlook for 2008-09 has been lowered to sub-eight per cent by different agencies, India remains among the fastest expanding economies.


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## Flintlock

USD is an inaccurate indicator of poverty. A dollar can buy more in India than in Pakistan or Bangladesh.


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## su-47

the US ofte makes estimation of poverty by the 'under $2 a day' method. but they have to realise that in many countries, $2 can buy a lot more than in the US. 

From personal experience: My father earns here in Pula (currency of Botswana) around the same as what he used to earn in India in Rs. And Rs: Pula exchange rate is roughly 6.5:1. so basically our standard of living should be 6.5 times better right? but its not. i would say that we are maybe at best twice as better off than in india, since cost of living here is very high. 1 Pula does not buy in Botswana what Rs 6.50 would buy in India.

Basically, what i'm getting at is that when measuring poverty, it shouldnt be on the basis of a universal currency, but on the basis of local currency, and on the standard of living.

That being said, there are A LOT of poor people in India, some who cant even afford three square meals a day. but the extent of poverty is not as bad as World projections.

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## Ravsta12

Hey guys i just read this article and i found the end bit interesting at the best but it just sounds scary to be honest. i wanna know wat u think about that. it says "In that light, Chinas task of improving its private sector seems easier to accomplish than Indias task of arresting institutional decline." Well know does this mean that china's communist government is a better bet than india's democracy??

Growth begets further growth, which is good news for both China and India. But this column argues that it is easier to create or improve a market than to build state capacity, which means that China, with its lagging private sector, is likely to fare better than India, which has deteriorating institutions.

Can China and India sustain their current growth rates? A traditional answer to this question is conditional: yes, provided they continue to implement policy reforms. But historical experience allows a less guarded answer. There are few examples of countries that have grown as strongly and for such long periods as India and China have  6% and 10%, respectively, for nearly three decades  and then suffered a sharp slowdown or collapse. If history is a reliable guide, then barring major upheavals, economic growth looks likely to continue in both countries until some threshold level of prosperity is attained.

But why does growth beget more growth? One mechanism is simply that growth signals the fact of profitable economic opportunities, which encourages investors to rush in, first in response to these opportunities but then in response to each other  this is growth as a confidence trick  creating a virtuous circle. If countries are relatively poor, if their markets are large, and if their policy framework is basically sensible  all of which are true of China and India  the chances of the growth-begetting-growth dynamic taking hold are high.

But in addition to the signalling effect, growth may itself cause changes which have in turn a growth-reinforcing effect  a kind of positive feedback loop. A good example is education. For long, development economists bemoaned the poor levels of educational attainment in India, directing their critique at the governments failure to supply better education. But economic growth changed the education picture dramatically. It increased the returns to, and hence the demand for, education. And if government supply remained weak, consumers simply turned to the private sector to meet their demand for education. Improvements in educational attainment over the last 15 years are attributable in part to more rapid growth.

An important question then is whether India and China can take the positive feedback loop for granted, especially in relation to two key determinants of long-run growth: state capacity or effectiveness and the private sectors entrepreneurial capacity. In other words, is it inevitable that over time growth will itself improve the quality of private entrepreneurship and public institutions? Consider each in turn.

Policy reforms have created the conditions for the private sectors in both countries to flourish. Yasheng Huang of MIT in his new book, Capitalism with Chinese Characteristics, argues that the Indian private sector, especially the indigenous part, is more efficient and entrepreneurial than its Chinese counterpart.

One crude measure of relative sophistication or entrepreneurial capability is how much direct investment (FDI) these countries are exporting, especially to the richer countries and especially in sophisticated sectors. Based on new data on mergers and acquisitions, Aaditya Mattoo of the World Bank and I calculated that Indias FDI exports to the OECD countries overall and even in the manufacturing sector were substantially greater than Chinas (measured as a share of GDP). China is rightly considered the worlds manufacturing powerhouse and export juggernaut, and yet in the manufacturing sector, Indian entrepreneurial and managerial capital (in the form of FDI) has been more successful than Chinas in taking control of and managing assets in the sophisticated markets of Europe and the US. So, while both private sectors have improved, India can claim today that it is ahead of China in fostering entrepreneurial capitalism.

Turn next to institutions. In the case of China, the focus of the world, and indeed the disappointment, has been the absence of the positive political feedback loop: growth and the attendant economic freedoms have not led to greater political development and openness. Implicitly, there has been less concern about the effect of growth on the states economic capacity. Over the last thirty years, the Chinese state has successfully created physical infrastructure and delivered essential services.

Contrast that with the Indian experience. While there are many exceptions, and at the considerable risk of over-generalising, the Indian state despite rapid economic growth has deteriorated over time. Whether it is providing basic law and order, or ensuring sanctity of contract, or delivering public services, the stench of decline is hard to ignore. For example, on a crude measure of government effectiveness on which I compiled data across time, Indias performance declined sharply: in the early 1960s, India was in the top fifth percentile of countries in the sample, slipping to the middle of the pack in recent years. The education example discussed earlier is an exception to the growth-institutions dynamic, made possible only because of private alternatives to state supply. For the core public sector functions, where such an alternative does not exist, the growth-institutions dynamic has been weak or non-existent.

So, growth in India has come with a more entrepreneurial private sector but accompanied by deteriorating state capacity. China has a vastly superior state capacity but an indigenous private sector that is still finding its feet. Which combination augurs better for the future?

There is a fundamental asymmetry between state and markets. It is easier to create markets than it is to create state capacity or to prevent its deterioration. Creating markets is a lot about letting go, establishing a reasonable policy framework, and allowing the natural hustling instinct to take over. In other words, hustling is the natural state. Building state capacity, on the other hand, is quite different. It involves overcoming collective action problems, mediating conflict, creating accountability mechanisms where outputs are multiple and fuzzy and links between inputs and outputs murky, and contending with the deep imprints of history. In Webers memorable words, building public institutions is like the slow boring of hard boards.

In that light, Chinas task of improving its private sector seems easier to accomplish than Indias task of arresting institutional decline. So, while China and India can probably both count on more years of high growth, the odds still favour China pulling off that feat than India. That, and not just the meagre medal tally, should be what India mulls over after the Beijing Olympics. 

voxeu.org/index.php?q=node/1585


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## Neo

*Still cant resume work at Indias Nano plant: Tata ​* 
Sunday, August 31, 2008

MUMBAI: Conditions are still not favourable to resume work at a plant in eastern India which will make the Nano, billed as the worlds cheapest car, Tata Motors said in a statement on Saturday.

Tata Motors which is building the plant to launch the Rs100,000 ($2272) car, has faced violent protests and political opposition over the acquisition of farmland in Singur, an hours drive from the city of Kolkata, the capital of West Bengal.

There has been no improvement in the ground situation so far, hence the conditions are still not conducive for resuming work today, a Tata spokesman said in an e-mailed statement. We continue to assess the situation closely.

Last week, Tata Motors Chairman Ratan Tata said he was prepared to move the plant from Singur if violence continued, despite having invested $350 million in the project. Trouble began after the government took over 1,000 acres of farmland for the factory. The government offered compensation but some farmers rejected it, demanding that at least 400 acres of land be given back to them.

The protests reflect a larger standoff between industry in India and farmers unwilling to part with land in a country where two-thirds of the billion-plus population depend on agriculture. Mamata Banerjee, leader of the opposition Trinamool Congress, which is spearheading the protests, has threatened to organise state-wide demonstrations.

On Friday, thousands of Trinamool supporters blocked roads and shouted slogans against the government, bringing traffic to a halt in the heart of Kolkata. West Bengal Chief Minister Buddhadeb Bhattacharjee said he was ready for talks with farmers but could not return 400 acres of land, earmarked for ancillary units, because it would make the project unviable.Tata Motors has since been flooded with offers from other states for the Nano plant.


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## Flintlock

*India may produce record rice this year*
Press Trust Of India / New Delhi August 31, 2008, 3:46 IST

Indias rice production in this agriculture year may breach the record output of 96.43 million tonnes last year on the back of increased acreage even as floods in some producing areas have hit the kharif crop, a top government official said today.

Rice production will surely touch record this year on the back of the areas sown and the overall crop condition as of now, even though floods in some producing regions have hit the crop, Secretary in the Department of Agricultural Research, Mangala Rai said.

Speaking on the sidelines of a seminar here, he, however, said sufficient rain in September and vigil against pest attacks are key to any further addition to the bumper output.

He did not mention the quantum of increase in output, saying it is difficult at this stage.

Rai also said floods in Bihar and Punjab, however, will create a congenial condition for rabi crops. Planting in the next season should be focused upon covering the losses caused during the kharif season, he added.

Areas under rice and soyabean have risen by over seven per cent in this period.

However, areas under ten major crops, including maize, sugarcane, arhar and cotton, have declined by up to 24 per cent during the ongoing kharif season as on August 22.

Rai said maize production deficit in Bihar, caused by the floods, can also be bridged if farmers use single-cross hybrid (high quality) seeds in a big way, thereby raising the productivity level by about 50 per cent.

Moreover, the sowing areas under rabi maize in the state are also large, he added.

The overall crop condition seems to be good even though some parts of the country have witnessed drought and some other regions faced flood-like situation, Rai said.

This apart, availability of edible oils would not be hampered though the crops have been affected in some areas. You are not going to have something (yield) which will be abruptly low or high, he said.

The country produces around 7.5 million tonnes of edible oil per annum but depends heavily on imports to bridge the gap between supply and consumption. The domestic demand of edible oils stands at about 12.5 million tonnes.

Speaking at the seminar on farm animals, Secretary in the Department of Animal Husbandry Pradeep Kumar stressed community participation along with government initiative and investment for significant progress in livestock management.

Former Minister of State for Agriculture Sompal emphasised factoring in economics in any attempt at raising the productivity level of the sector. Studying the cost of production is as important as raising the productivity level, he said.

India may produce record rice this year


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## Flintlock

*'Robust revival of economy next fiscal'*
31 Aug, 2008, 0923 hrs IST, IANS
NEW DELHI: The slowdown in the Indian economy has been on expected lines and a robust revival is seen next fiscal year thanks to the measures being taken by the government, Planning Commission Deputy Chairman Montek Singh Ahluwalia has said. "The slowdown was not unexpected," Ahluwalia said, referring to the sharp dip in the growth of India's gross domestic product (GDP) to 7.9 percent in the first quarter of this fiscal from 9.2 percent in the like period of last year.

"What I also want to say is a growth of almost eight percent is also healthy and impressive. We should expect revival to a higher level next fiscal," Ahluwalia told IANS in an interaction. He said the tight monetary policy of the Reserve Bank of India (RBI), in a bid to curb price rise, was one of the main reasons for the dip in manufacturing growth from 5.6 percent from 10.9 percent in the first quarter of last fiscal.

"So you can also expect the inflation rate to start moderating from the next few months," said the Oxford-educated economist, who had started his career with the Washington-based World Bank. "Inflation will begin softening within a few months time. The prices of crude oil appear to be softening in the global market. Good monsoon will make a big difference," said Ahluwalia.

India's central bank had also pruned the growth projection to 8 percent, from 8.5, percent because of global and domestic developments when it reviewed its monetary policy for the current fiscal late last month. Ahluwalia also expected reforms to get a big push forward, especially in the area of public-private partnerships in infrastructure projects, covering roads, ports, airports and energy.

"Lot of good things are happening in the states. Some of them are quite ahead in inking infrastructure projects through the public-private partnerships (PPPs)," he said. "Andhra Pradesh, Gujarat, and Maharashtra are doing very well in developing airports through the PPP model. Andhra Pradesh is getting metro train for Hyderabad through PPP. Even health facilities are being upgraded in collaboration with the private parties."

"Many states want to have metro trains. As a metro project is very expensive, the states should and are looking for private collaborators. The centre will certainly chip in with viability gap funding wherever necessary," he said. In the same vein, Ahluwalia said that there was a need to implement the projects at a faster pace to retain the growth momentum.

"Infrastructure projects intended for capacity building have to be implemented with a strong supportive policies and administrative support," he said. "Accelerating the pace of PPP contracts in infrastructure is extremely important. Policies have already been shaped, and the ministries are required to the projects fast. I think quite a lot has been done," said Ahluwalia. 

'Robust revival of economy next fiscal'- Indicators-Economy-News-The Economic Times


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## Ravsta12

hello ppl?? i asked a question plz read my last post if any1 will plz bother


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## nitesh

The Hindu Business Line : Exports up 31.2%, crude oil pushes import bill by 48.1%

Exports up 31.2&#37;, crude oil pushes import bill by 48.1%
NEW DELHI: India's exports increased by 31.2 per cent in July but the country's total import bill soared by 48.1 per cent on the back of huge rise in crude oil imports.

Exports grew to $16.34 billion while imports rose to $27.14 billion, leaving a trade deficit of $10.79 billion in July, according to official figures released here on Monday.

On the back of increase in global prices, the crude oil import bill in July shot up by 69.3 per cent to $9.48 billion from $5.6 billion a year ago.

For the April-July 2008 period, exports showed a growth of 24.6 per cent rising to $59.19 billion while imports crossed the $100 billion figure in first four months of the current fiscal.

Consequently, the deficit in this period ballooned to $41.22 billion. - PTI


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## Flintlock

Ravsta12 said:


> hello ppl?? i asked a question plz read my last post if any1 will plz bother



Its a very old discussion, whether the Indian way will work better or the Chinese. 

I usually take the stand that the Chinese system works better for the Chinese, and the Indian system works better for the Indians. If the Chinese seem to be doing better than the Indians, its because of the structure of Indian society itself and its numerous problems.

Most supporters of democracy agree that India will do better in the long run, and most supporters of the Chinese model contend that India can never catch up with China. 

In any case, both countries have had interesting histories, and have been influential and prosperous in the past, so there is no reason why it should not be so again.

I do not agree that there is institutional decline in India. Perhaps, it is true that institutions in India have not improved as much as the rest of the world, which probably explains why India has fallen behind in these rankings. However, there is an improvement in government services and facilities, even if it is small, and in pockets of the country.
As the middle-class grows larger, and more voters are concerned about the quality of life rather than just their next meal, the quality of government services will further improve.

Reactions: Like Like:
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## nitesh

Urjit R Patel: RBI as an oil spigot?

The RBI, between June 5 and August 8 in effect provided US$4.4 bn to government-owned oil companies in exchange for oil bonds (outright purchase or collateralised repo). The SMO from the perspective of the RBI is effectively a swap on the assets side of its balance sheet, specifically, rupee-denominated oil bonds for foreign currency reserves. Since the liabilities side of the RBI&#8217;s balance sheet is unchanged, the SMO is monetary neutral.

Notwithstanding the language reminiscent of central bank provision of market liquidity for financial intermediaries during times of crisis, the case for the SMO premised on &#8220;systemic implications for the smooth functioning of financial markets&#8221; is not entirely cut and dry. However, the SMO has everything to do with maintaining petroleum imports into the country. The SMO could have been more accurately christened as &#8220;RBI Swap Facility for Oil Companies Routed through Designated Banks&#8221;.

The fact of the matter is that the RBI has had to willy-nilly don the mantle of market maker of first (as opposed to last) resort for oil bonds because of scarce interest from banks to buy the bonds or hold them as collateral for the benefit of oil companies. Presumably, this is because the price on offer did not adequately internalise the unattractive caveats of the bonds. The coupon and the non-SLR eligible nature of these bonds (in combination) make them largely unattractive to scheduled commercial banks and other participants in the secondary market. The market would have discounted these bonds on account of the embedded characteristics.

The matter then arises regarding the valuation of oil bonds by the RBI in the absence of a credible market-determined price history for the bonds. It is reported that the oil bonds were priced at a spread of 25 basis points above the yield of G-Sec of the relevant maturity. Of course, this positive spread over G-Sec in itself does not mean that a quasi-fiscal subsidy is not operative. Outright purchases of these securities at prices above fair value (or even acceptance of collateral above fair value) would constitute a quasi-fiscal subsidy from the RBI. Without access to the valuation methodology that would have been deployed, it is difficult to gauge the fair value with accuracy.

It is estimated that oil bond issuance over the current fiscal could be about 2 per cent of GDP; therefore, the money due to the oil companies from the Union government is expected to be huge for the foreseeable future. Unless there is a sharp correction in oil prices or a policy combining adjustment in domestic retail prices and reduction in government duties, the oil companies will continue to require help to source the foreign exchange to import crude oil (although the SMO has been ascribed as a temporary facility). If demand does not adjust, supply will; reports of long lines at diesel pumps in several states show that the oil companies are responding in a manner that is feasible for them.

Several conclusions and observations can be made. First, the dire fiscal situation that the central government finds itself in has now sucked the RBI in its vortex, but it is to be hoped that a durable alternative mechanism will be put in place with alacrity to ensure that the SMO is not further resorted to; it can be argued that some of the hard work over the past decade to ensure that the RBI&#8217;s proximate objective for conducting monetary policy is not compromised &#8212; by getting stuffed with government paper &#8212; has been undone. Secondly, we would be hard-pressed to name another country (even among those that subsidise fuel) that has had to resort to the central bank in this manner. Thirdly, praying for international crude prices to adjust sharply downwards soon does not constitute government policy, sound or otherwise. Fourthly, the proceeds of the oil bonds upon maturity will be in rupees, hence the RBI, if it wants to rebuild official foreign currency assets to make up for the decline on account of the SMO, will have to intervene in the market at the time and buy foreign currency at the ruling market exchange rate (the central bank shoulders an exchange rate risk if rebuilding foreign currency reserves is an objective).


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## nitesh

Urjit R Patel: RBI as an oil spigot?

The RBI, between June 5 and August 8 in effect provided US$4.4 bn to government-owned oil companies in exchange for oil bonds (outright purchase or collateralised repo). The SMO from the perspective of the RBI is effectively a swap on the assets side of its balance sheet, specifically, rupee-denominated oil bonds for foreign currency reserves. Since the liabilities side of the RBIs balance sheet is unchanged, the SMO is monetary neutral.

Notwithstanding the language reminiscent of central bank provision of market liquidity for financial intermediaries during times of crisis, the case for the SMO premised on systemic implications for the smooth functioning of financial markets is not entirely cut and dry. However, the SMO has everything to do with maintaining petroleum imports into the country. The SMO could have been more accurately christened as RBI Swap Facility for Oil Companies Routed through Designated Banks.

The fact of the matter is that the RBI has had to willy-nilly don the mantle of market maker of first (as opposed to last) resort for oil bonds because of scarce interest from banks to buy the bonds or hold them as collateral for the benefit of oil companies. Presumably, this is because the price on offer did not adequately internalise the unattractive caveats of the bonds. The coupon and the non-SLR eligible nature of these bonds (in combination) make them largely unattractive to scheduled commercial banks and other participants in the secondary market. The market would have discounted these bonds on account of the embedded characteristics.

The matter then arises regarding the valuation of oil bonds by the RBI in the absence of a credible market-determined price history for the bonds. It is reported that the oil bonds were priced at a spread of 25 basis points above the yield of G-Sec of the relevant maturity. Of course, this positive spread over G-Sec in itself does not mean that a quasi-fiscal subsidy is not operative. Outright purchases of these securities at prices above fair value (or even acceptance of collateral above fair value) would constitute a quasi-fiscal subsidy from the RBI. Without access to the valuation methodology that would have been deployed, it is difficult to gauge the fair value with accuracy.

It is estimated that oil bond issuance over the current fiscal could be about 2 per cent of GDP; therefore, the money due to the oil companies from the Union government is expected to be huge for the foreseeable future. Unless there is a sharp correction in oil prices or a policy combining adjustment in domestic retail prices and reduction in government duties, the oil companies will continue to require help to source the foreign exchange to import crude oil (although the SMO has been ascribed as a temporary facility). If demand does not adjust, supply will; reports of long lines at diesel pumps in several states show that the oil companies are responding in a manner that is feasible for them.

Several conclusions and observations can be made. First, the dire fiscal situation that the central government finds itself in has now sucked the RBI in its vortex, but it is to be hoped that a durable alternative mechanism will be put in place with alacrity to ensure that the SMO is not further resorted to; it can be argued that some of the hard work over the past decade to ensure that the RBIs proximate objective for conducting monetary policy is not compromised  by getting stuffed with government paper  has been undone. Secondly, we would be hard-pressed to name another country (even among those that subsidise fuel) that has had to resort to the central bank in this manner. Thirdly, praying for international crude prices to adjust sharply downwards soon does not constitute government policy, sound or otherwise. Fourthly, the proceeds of the oil bonds upon maturity will be in rupees, hence the RBI, if it wants to rebuild official foreign currency assets to make up for the decline on account of the SMO, will have to intervene in the market at the time and buy foreign currency at the ruling market exchange rate (the central bank shoulders an exchange rate risk if rebuilding foreign currency reserves is an objective).


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## nitesh

Editorial: Change, with continuity

The general perception for some time has been that there are differences between the finance ministry and the Reserve Bank of India on key policy issues, including interest rates and exchange rate management. Observers will therefore read an extra significance into the fact that the serving finance secretary, D Subbarao, has been named to succeed Y V Reddy as RBI governor, in preference to the existing deputy governor. No one in the last three decades or more has made such a direct move from North Block to the top job in Mint Road. Whether Dr Subbarao&#8217;s positions on the critical issues differ significantly from his predecessor will be known soon enough. What is important is that the new dispensation at the RBI quickly comes to grips with the situation and responds effectively to both the structural needs of the financial sector and the immediate macro-economic challenges.

The first test will come with the quarterly monetary policy announcement, scheduled for end-October. Dr Reddy took an aggressive anti-inflationary stance in the past few months, with the stated intent of bringing inflation expectations firmly under control. Once embarked upon, such a stance must be followed through to its logical conclusion, which means that as long as the inflation rate is way above the comfort zone, policy rates must be raised. However, it has appeared on occasion that the finance ministry has not been persuaded about the merits of this approach and believes that maintaining a growth-friendly interest rate scenario is the priority. The question that the new governor must ask is whether a reversal of the current policy stance will hurt more by fuelling expectations than it will help by shoring up growth.

A second area of concern in the short term is the movement of the rupee, which has swung both ways over the past year and a half, leaving people confused about the nature, even existence, of exchange rate policy. With competing proposals for exchange rate management on the table, the RBI needs to make both the end-game and the transition path clear.

But just as his predecessor had to deal with the fall-out of the Asian financial crisis (successfully protecting India from the virus), Dr Reddy has had to deal with unprecedented macro-economic circumstances, from the surge in capital inflows to the recent supply-side inflationary pressures. He responded by sterilising the dollar inflows (which pushed up money supply, risking inflation), and then began moving aggressively on interest rates when the inflation surge of 2008-09 was not fully visible. In doing so, he ploughed a lonely furrough for a while, so it is ironic that his legacy should be an inflation rate that is way above what the RBI would like it to be. As often happens, therefore, his legacy is essentially an unfinished agenda. Dr Subbarao would be well advised to aim for a fine balance between continuity in fighting inflation and change on the structural side of the financial sector &#8212; for which two expert committees have laid out their road maps.


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## nitesh

Shyam Ponappa: Changing mindsets about food prices

There is a radical disconnect between reality, policies, and public opinion on a number of issues in India. This is not only disconcerting, it reflects a mindset that is not conducive to resolving these issues beneficially. Consider some examples:
# the state of our food grains production, pricing, supply and demand,
# supply constraints that are structural, but have triggered monetary responses leading to reduced consumer spending and dampened business investment, slowing GDP growth to 7.9 per cent in April-June 2008 (perhaps heading as low as 7 per cent for 2008-09?),
# the shoddy and worsening state of our roads and highways, despite considerable effort and vast expenditure, or
# the misrepresentation by naysayers of nuclear power as an adjunct to other methods of power generation.

Food supply & demand: One aspect of the problem has to do with supply not increasing as fast as demand. A study by Icrier estimates that given current trends, domestic demand for total cereals will exceed domestic supply after 2020. The implication is that with continuing high levels of anticipated world demand, if we do not increase domestic supply through better research and application, extension, and/or strategic investments abroad with supply contracts, high food prices could well get worse in the years ahead.

Repressed food prices: A second aspect of this issue relates to pricing. India&#8217;s food grains procurement prices have been repressed relative to the market and to world prices for many decades. Small farmers get the worst of it, because they have to sell as soon as they harvest, i.e. when prices are generally low. They cannot afford not to sell at procurement prices which are far below market, as shown by the Minimum Support Price. Yet, while the National Commission on Farmers chaired by Prof. M S Swaminathan recommended an increase in procurement prices, even this newspaper(!) ran an editorial that these recommendations were wrong because this would lead to higher prices and more inflation, without providing data and context, or further explication. While scepticism is healthy to the extent of seeking facts to arrive at conclusions, such statements without supporting data or reasoning appear rather arbitrary and uninformed.

Data & analysis: The need and collective responsibility is to help establish and address the relevant facts, as well as to make them widely accessible. For this, the data have to be continually aggregated and available, and studied. 

Perversely, many of the same pundits who argue for low food procurement prices make the opposite argument in the case of oil and petroleum products, i.e. that prices should be increased, despite our fuel costs being much higher than in many other countries &#8212; which will indeed increase inflation across the board. What justifies these contradictory positions: pass through fuel price hikes, which are an input cost to many products/services, while repressing food prices? Certainly not the simple inequity that makes farmers more expendable, one hopes?

Policies from a solutions mindset: There need to be long-term, concerted, well-coordinated efforts involving the Centre and the states to address the underlying supply deficiencies. This needs to be driven by analysis of the facts. Start with tracking realities and analysing the data. This country&#8217;s burgeoning population is finally becoming more able to afford the food they need and want. Keeping procurement prices low holds down incentives for production, apart from inflicting great hardship on small farmers who have to contend with rising input costs and general prices, while selling their produce for less.


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## nitesh

Merchandise exports likely to stay robust

Data released by the commerce ministry show that in the April-July period, Indian exports have already reached $59.2 billion, which is 28 per cent of the export target of $200 billion for the current financial year.

In the same period last fiscal, a much lesser percentage of the $160-billion exports target for FY08 was achieved, but the target was met by the end of the fiscal.

While experts are analysing the 31.2 per cent rise in exports during July (the segment-wise export data is not available at the moment), higher overseas sales of petroleum products, chemicals and engineering goods is seen as the possible reason for the healthy export growth.

Moreover, the near-10 per cent depreciation in the rupee against the dollar has also resulted in better realisation of export income.

Tushar Poddar, vice-president, Asia economic research, Goldman Sachs, says that despite concerns of a slowdown in developed markets like the US and EU, the downside to Indian exports is limited.

&#8220;First, exports to developed markets &#8212; the US and EU &#8212; are not as important as in the past. Nearly two-thirds of India&#8217;s exports now go to other regions, especially to China, West Asia and Africa. As these markets continue to grow, we believe demand for exports will sustain,&#8221; Poddar said in a report today.

Moreover, the recently finalised free trade agreement (FTA) with the 10-member Association of South-East Asian Nations (Asean) will also add pace to export growth as import duties will be brought down.

According to Poddar, high-skilled products from sectors like engineering goods as well as resource-intensive products have more potential in emerging economies like Brazil, Russia and China rather than traditional products like handicrafts and leather, which are exported to the US and EU.

The resource-intensive sector has seen high export growth rates owing to rise in prices of commodities.

&#8220;The large exports of refined petroleum, however, have more to do with refining capacity rather than any commodity endowment. Indeed, of the total value of about $25 billion of exports in 2007-08, only about 14 per cent represents value-added due to refining, the rest being oil imports. Be that as it may, volumes have also been rising. Further, in the near term, our commodities team does not expect commodity prices, especially oil, to decline substantially, which will continue to sustain export growth,&#8221; Poddar said.

While India exports more of petroleum products, light consumer goods, chemicals, as well as food products, other Asian countries like China, Korea, Taiwan and Japan have export interests in transport goods, machine and electronics. Thus, India&#8217;s export interests are mostly not in competition with these countries.


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## nitesh

Centre okays hiring private specialists for govt service

The gates have been opened for the hiring of outside specialists by government departments and agencies on a contractual basis with the government approving the Sixth Pay Commission recommendation to this effect.

The approval of the recommendation for allowing lateral entry into the government service implies that private sector specialists can be hired and appointed to government posts, including possibly cadre posts, with salaries that are market-linked.

Government officials said the scheme was aimed at bringing in outside expertise for specialised functions in technical, scientific or other streams. The terms of the contracts, including the emoluments to be paid, will be the responsibility of the nodal ministries.

The enhanced expenditure would have to be met by the ministry or department from its annual budgetary allocation.

The lateral entry scheme is expected to boost the availability of talent in government departments. Citing instances, officials said professionals like actuaries, harbour pilots or IT specialists could not be inducted into service at government pay levels.


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## nitesh

Direct tax kitty swells 38%

Riding on higher tax deducted at source (TDS) receipts, net direct tax collections rose by 38.31 per cent to Rs 84,409 crore in the first five months of fiscal 2008-09, as compared with Rs 61,030 crore in the corresponding period last fiscal.

This is a slight moderation compared with the over 42 per cent growth in net direct tax collection seen in the same period of the previous fiscal. Net direct collection refers to tax collections after refunds, but before transfer of states&#8217; share in central revenues.

Overall growth in TDS was more than 40 per cent, but growth in corporate TDS was even higher. Corporate TDS collections rose by over 55 per cent to Rs 26,445 crore in the April-August period this year against Rs 17,037 crore during the year-ago period.

The higher TDS compliance is attributed to several verifications and surveys carried out by the Income Tax Department, which resulted in detection of hundreds of crore of rupees not deducted or not paid to the government account after deduction.

Corporation tax collections were up 43.49 per cent to Rs 48,450 crore during the period as against Rs 33,766 crore in the same period last year.

Personal income-tax (including fringe benefit tax, securities transaction tax and banking cash transaction tax) collections grew at 31.79 per cent to Rs 35,840 crore in the period as against Rs 27,195 crore a year ago.


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## Marshal

India set to achieve $40 bn FDI in FY09 - The Financial Express
India is set to attract foreign direct investment of USD 40 billion in fiscal 2008-09 with overseas investors betting big on the manufacturing sector in world's second fastest growing economy. 

The country received USD 20 billion foreign direct investment (FDI) between January and June in the calendar 2008 and USD 10 billion in the first quarter of the current fiscal. 

"Going by this, achieving USD 40 billion in 2008-09 does not seem unrealistic," Secretary in the Department of Industrial Policy and Promotion Ajay Shankar said at a FICCI function in New Delhi. The target for the fiscal is set at USD 35 billion. The inflows in 2007-08 were USD 25 billion. 

Shankar said, though seeing slight moderation in production growth, India has emerged among the preferred destinations for the overseas investors. Automobiles and construction equipment segments are attracting increased interest among investors. 

The DIPP Secretary expressed hope that the growth outlook in the manufacturing sector would be "more positive" in the next few months. 

"There was a slight moderation but the industry has undertaken cost-cutting and other productive measures," he said. 

The Index for Industrial Production (IIP) growth had dropped to 5.4 per cent in June this fiscal from 8.9 per cent a year ago. For the April-June period as well, the IIP rose by 5.2 per cent against 10.3 per cent in the same period last year. 

Within IIP, manufacturing expanded by 5.9 per cent in June against 9.7 per cent in the same month last year. For the first quarter, the segment grew by 5.6 per cent, compared to 11.1 per cent in the corresponding period in 2007-08. 

Though the growth outlook for 2008-09 has been lowered to sub-eight per cent by different agencies, India remains among the fastest expanding economies.


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## nitesh

150,000 emergencies handled by Gujarat&#8217;s &#8216;108&#8242; project

150,000 emergencies handled by Gujarat&#8217;s &#8216;108&#8242; project

If you are in Gujarat and face an emergency, just dial the toll-free number `108&#8242; and experts will rush to your help. At least 150,000 emergencies have been handled by a project being run by the state government and the Hyderabad-based Emergency Management and Research Institute (EMRI) in the past one year since its launch.&#8221;I want to make the 108 Emergency Response Service (ERS) one of the eight wonders of the world,&#8221; said Venkat Changavalli, CEO of EMRI.

Changavalli was speaking Friday at the first anniversary here of Gujarat EMRI completing successful operations in the state.

He said EMRI was now operational in Andhra Pradesh, Gujarat and Uttarakhand. &#8220;Recently, I was in Europe and people there were surprised by the scale and scope of our achievement,&#8221; he said. 

In India there are two million emergencies every year. &#8220;Our mission is to save one million lives in a year,&#8221; said Changavalli.

Six more states that have signed MoUs with EMRI are Madhya Pradesh, Tamil Nadu, Rajasthan, Goa, Assam and Karnataka. Operations would begin in all the six states by Nov 1, Changavalli said.

On August 29 last year, Gujarat EMRI was inaugurated by Chief Minister Narendra Modi and former president A.P.J. Kalam with just 14 ambulances and a year later there are over 300 ambulances. 

The public private partnership (PPP) project between EMRI and the Gujarat government has become a model for other PPP projects. Today, within a span of just 12 months, it provides in all the 26 districts of the state, a world class emergency response service, said Gobind Lulla, Gujarat EMRI chief operating officer.

&#8220;Even as I am talking, three ambulances are being launched, taking the total to 303. It will be 320 by the end of next month,&#8221; Lulla said. 

&#8220;95 percent of the emergency calls are attended in one ring. Within two to three minutes the ambulance is on its way,&#8221; he added.

On July 26 when the serial blasts occurred here, within an hour our team took 62 people to the trauma ward. Only one person died after admission. 

Since its launch, 150,000 emergencies have been attended to. Currently, Gujarat EMRI is responding to 1,300 emergencies on a daily basis and saving 60 lives per day, Lulla said.

A common person thinks that 108 services means ambulance but it is more than just that. It has four aspects like medical, police, fire services and natural disasters all being attended to through the single toll-free number `108&#8242;, Lulla said.

EMRI has given special attention to pregnant women in rural areas. Of the 1,300 cases per day, 400 are related to pregnancies., and of these 366 deliveries are taking place in the EMRI ambulances, Lulla said. 

&#8220;Health is most basic. If good health prevails it helps other areas of progress. For the government EMRI is one aspect. More important is increasing the number of trauma centres so that critical patients can be taken directly by 108 service within the &#8216;golden hour&#8217; so that life can be saved,&#8221; said Health Minister Jaynarayan Vyas.

In seven-and-half minutes, one life should be saved is the target of EMRI. 

The need for such a service arose because the country lacked a systematic Emergency Response Service (ERS), prevalent in the developed countries of the world. It is appalling that despite progressing in other areas of medicine, India still lacks basic emergency services, said Changavalli. 

The project is the brainchild of B. Ramalinga Raju, founder and chairman of Satyam Computers and his brother B. Rama Raju. It was launched in Hyderabad on Aug 15, 2005.


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## Flintlock

nitesh said:


> Centre okays hiring private specialists for govt service
> 
> The gates have been opened for the hiring of outside specialists by government departments and agencies on a contractual basis with the government approving the Sixth Pay Commission recommendation to this effect.
> 
> The approval of the recommendation for allowing lateral entry into the government service implies that private sector specialists can be hired and appointed to government posts, including possibly cadre posts, with salaries that are market-linked.
> 
> Government officials said the scheme was aimed at bringing in outside expertise for specialised functions in technical, scientific or other streams. The terms of the contracts, including the emoluments to be paid, will be the responsibility of the nodal ministries.
> 
> The enhanced expenditure would have to be met by the ministry or department from its annual budgetary allocation.
> 
> The lateral entry scheme is expected to boost the availability of talent in government departments. Citing instances, officials said professionals like actuaries, harbour pilots or IT specialists could not be inducted into service at government pay levels.



That is a great step forward. I must say that I am surprised!

Its high time that the government took things away from the jack-of-all-trades bureaucrats.


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## nitesh

Flintlock said:


> That is a great step forward. I must say that I am surprised!
> 
> Its high time that the government took things away from the jack-of-all-trades bureaucrats.



No flint, this is already in practice, *although not published*, mainly in NAL and HAL especially


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## nitesh

PIB Press Release
Department of Economic Affairs, Ministry of Finance has been publishing &#8216;India&#8217;s External Debt: A Status Report&#8217; on a regular basis since 1993. The current volume of the Report, the fourteenth in the series, brings out developments in India&#8217;s external debt during 2007-08. It also provides time series data and an analytical presentation of India&#8217;s external debt statistics since 1990. A cross-country comparison presents India&#8217;s external debt position in an international perspective. 

India&#8217;s external debt stock at end-March 2008 amounted to US$ 221.2 billion (Rs. 884,516 crore), reflecting an increase of 30.4 per cent over the previous year. Valuation change due to weakening of the US dollar vis-&#224;-vis other major international currencies accounted for almost 20 per cent of the increment in total external debt during the year. In terms of rupees, the increase in India&#8217;s external debt during 2007-08 was lower at 19.6 per cent due to the appreciation of Indian rupee essentially against the US dollar. The escalation in external debt during the year could be ascribed mainly to rise in external commercial borrowings (39.5 per cent) and short-term debt (34.8 per cent). Between end-March 2007 and end-March 2008, Government debt as a proportion of total external debt declined from 28.4 per cent to 25.6 per cent and as a percentage of GDP, it dropped from 5.3 per cent to 4.8 per cent. 

All the major solvency and liquidity indicators of external debt continued to remain in the comfort zone: foreign exchange reserve cover of external debt continued to be at a high level, up from 117.4 per cent during 2006-07 to 140.0 per cent during 2007-08; debt service ratio remained low at 5.4 per cent during 2007-08, though this was marginally higher by 0.6 percentage points over the previous year; other indicators, such as the ratio of external debt to Gross Domestic Product which measures the burden of external debt, was 18.8 per cent during 2007-08; the ratio of short-term debt to foreign exchange reserves stood at 14.3 per cent; and the ratio of short-term debt to total external debt was 20 per cent at end-March 2008. 

*A cross-country comparison based on the data given in World Bank&#8217;s &#8216;Global Development Finance, 2008&#8217; shows that India&#8217;s position among the top ten debtor countries of the developing world was fifth in 2006 in terms of the stock of external debt. India&#8217;s debt service ratio was the second best after that of China. The element of concessionality in India&#8217;s external debt portfolio was the second highest after that of Indonesia. *

&#8220;India&#8217;s External Debt: A Status Report, 2007-2008&#8221; has endeavoured to improve the scope and reporting of the debt numbers (especially that of short-term external debt) to make the Report more comprehensive.


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## Marshal

nitesh said:


> 150,000 emergencies handled by Gujarats 108&#8242; project
> 
> 150,000 emergencies handled by Gujarats 108&#8242; project
> 
> If you are in Gujarat and face an emergency, just dial the toll-free number `108&#8242; and experts will rush to your help. At least 150,000 emergencies have been handled by a project being run by the state government and the Hyderabad-based Emergency Management and Research Institute (EMRI) in the past one year since its launch.I want to make the 108 Emergency Response Service (ERS) one of the eight wonders of the world, said Venkat Changavalli, CEO of EMRI.
> 
> Changavalli was speaking Friday at the first anniversary here of Gujarat EMRI completing successful operations in the state.
> 
> He said EMRI was now operational in Andhra Pradesh, Gujarat and Uttarakhand. Recently, I was in Europe and people there were surprised by the scale and scope of our achievement, he said.
> 
> In India there are two million emergencies every year. Our mission is to save one million lives in a year, said Changavalli.
> 
> Six more states that have signed MoUs with EMRI are Madhya Pradesh, Tamil Nadu, Rajasthan, Goa, Assam and Karnataka. Operations would begin in all the six states by Nov 1, Changavalli said.
> 
> On August 29 last year, Gujarat EMRI was inaugurated by Chief Minister Narendra Modi and former president A.P.J. Kalam with just 14 ambulances and a year later there are over 300 ambulances.
> 
> The public private partnership (PPP) project between EMRI and the Gujarat government has become a model for other PPP projects. Today, within a span of just 12 months, it provides in all the 26 districts of the state, a world class emergency response service, said Gobind Lulla, Gujarat EMRI chief operating officer.
> 
> Even as I am talking, three ambulances are being launched, taking the total to 303. It will be 320 by the end of next month, Lulla said.
> 
> 95 percent of the emergency calls are attended in one ring. Within two to three minutes the ambulance is on its way, he added.
> 
> On July 26 when the serial blasts occurred here, within an hour our team took 62 people to the trauma ward. Only one person died after admission.
> 
> Since its launch, 150,000 emergencies have been attended to. Currently, Gujarat EMRI is responding to 1,300 emergencies on a daily basis and saving 60 lives per day, Lulla said.
> 
> A common person thinks that 108 services means ambulance but it is more than just that. It has four aspects like medical, police, fire services and natural disasters all being attended to through the single toll-free number `108&#8242;, Lulla said.
> 
> EMRI has given special attention to pregnant women in rural areas. Of the 1,300 cases per day, 400 are related to pregnancies., and of these 366 deliveries are taking place in the EMRI ambulances, Lulla said.
> 
> Health is most basic. If good health prevails it helps other areas of progress. For the government EMRI is one aspect. More important is increasing the number of trauma centres so that critical patients can be taken directly by 108 service within the golden hour so that life can be saved, said Health Minister Jaynarayan Vyas.
> 
> In seven-and-half minutes, one life should be saved is the target of EMRI.
> 
> The need for such a service arose because the country lacked a systematic Emergency Response Service (ERS), prevalent in the developed countries of the world. It is appalling that despite progressing in other areas of medicine, India still lacks basic emergency services, said Changavalli.
> 
> The project is the brainchild of B. Ramalinga Raju, founder and chairman of Satyam Computers and his brother B. Rama Raju. It was launched in Hyderabad on Aug 15, 2005.





This 108 is a great project undertaken by the respective governments of the states as it has been providing really good services not only to cities but also to the remotest villages of the states and that for 24 hours........ specially in Gujarat where I have seen it through my eyes.


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## nitesh

Marshal said:


> This 108 is a great project undertaken by the respective governments of the states as it has been providing really good services not only to cities but also to the remotest villages of the states and that for 24 hours........ specially in Gujarat where I have seen it through my eyes.



u should have understood why i quoted this particular news.


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## Marshal

*Inflation continues downward trend, dips to 12.34%*
Inflation continues downward trend, dips to 12.34%

Inflation for the week ended August 23 edged down to 12.34 per cent, from 12.4 per cent a week earlier, led by a decline in food prices. The prices of food articles down were down 0.8 per cent.

The prices of fruits and vegetables were down 2 per cent, while that of tea decreased 3 per cent. 

The Commerce Secretary earlier said he expects single-digit inflation by December this year. 

Echoing the secretarys views, Daiwa Securities said it sees inflation to come down to 8 per cent by year end. Inflationary pressures would come down in near term, added Merrill Lynch. 

But the Daiwa still expects further monetary tightening going ahead, expecting another 50 bps rate hike by the Reserve Bank of India. 

Meanwhile, inflation for the week ended June 28 was revised to 12.03 per cent.


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## nitesh

ONGC eyeing Canadian oil co for $1.5 bn- Oil & Gas-Energy-News By Industry-News-The Economic Times
EW DELHI: Oil and Natural Gas Corp (ONGC) is in talks to acquire Canada's Tanganyika Oil Co Ltd for about $1.2-1.5 billion, a media report said on Friday quoting unidentified sources familiar with the deal. 

"The discussions are at an advanced stage," the report said citing a banker close to the deal. 

ONGC plans to buy 38.8 percent stake owned by Tanganyika's main shareholders, including the Lundin family and Iceland's Straumur Burdaras Investment Bank, it said, adding ONGC Chairman R S Sharma declined to comment. 

State-run ONGC's overseas investment arm, ONGC Videsh, recently submitted a $2.6 billion bid to buy Russia-focused Imperial Energy Plc and is awaiting Moscow's approval. 

Tanganyika is listed on the Stockholm bourse and has production and exploration assets in Egypt and Syria. 

ONGC Videsh plans to appoint the India arm of consultancy firm Ernst & Young to advise it on the acquisition, the report said. 

ONGC Videsh Managing Director R S Butola could not be immediately reached for comment.
-----------------


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## Flintlock

*City skyline set to change as SC okays clusters of towers*
5 Sep 2008, 0237 hrs IST, Dhananjay Mahapatra,TNN


NEW DELHI: The face of Mumbai will change forever as the Supreme Court on Thursday greenlighted the pulling down of all pre-1940 buildings, including chawls, to make way for highrises.

The highrises that would be constructed by the developers to replace over 16,000 old buildings, which are eligible for being pulled down and redeveloped, would have to accommodate the present tenants of the old buildings.

This means they would move from their dilapidated tenements and occupy flats with a minimum area of 225 sq ft in brand new buildings at no cost. However, in lieu of the free rehabilitation of tenants, the builder can make profits by exploiting a portion of the land to construct a tower which he can sell in the open market.

A bench comprising Justices Arijit Pasayat and P Sathasivam upheld the Development Control Rule 33(7) as amended in 1999 and set aside the limitations on FSI and other restrictions imposed by the Bombay high court. DCR 33(7) will have immediate applicability to 16,502 buildings, which are listed under category A' by the Maharashtra Housing and Area Development Authority (MHADA) since they were constructed prior to September 1, 1940.

These buildings, irrespective of whether they are dilapidated or not, can now be redeveloped whenever 70% of the tenants/occupants of such buildings came together along with their landlords for redevelopment of their properties''. They would also be entitled to extra FSI as an incentive.

The court accepted MHADA's stand that under the DC regulation, houses with an area of minimum 225 sq ft would be provided free of cost to all tenants in these pre-1940 buildings.

While validating DCR 33(7), the bench took into account a survey conducted by the civic corporation in 1980-81 which showed that 30,237 buildings would have crossed their lifespan by 1996''. The Kerkar Committee report also recorded that the vast majority of the buildings would have to be reconstructed, the SC noted. It also relied on a report on the Development Plan for Greater Bombay which showed that way back in 1981, 5,82,200 tenements were required to house the natural growth of population.

The SC, clearly relying on facts and figures, also recorded the fact that in 1991, nearly 73% of the population (living in such buildings) occupied one-room tenementsvertical slums; 18% lived in two-room flats. This meant that more than 90% lived in small areas''.

Those occupying large areas constitute only 2.7%. Between 1961 and 1991, the number of households increased to 20,88,000, most of which are only of 100 to 120 sq ft,'' the bench said.

It is thus clear that the policy is to enhance the quality of lives of those living in such poor conditions,'' said Justice Pasayat, writing the judgment for the bench.

The high court was not justified in reading additional requirements into DCR 33(7) after holding the same to be valid, the bench said.

The public spirited petitioners who had filed the original PIL before the Bombay high court in 2004 had been concerned with the problem of congestion of the population in the island city of Mumbai which covers the area from Colaba in the south to Mahim and Sion in the north.

The existing infrastructure in the island city, particularly with respect to roads, water supply, sewage system, open areas and gardens, is already overstretched and under extreme strain,'' the PIL had said adding that the island city has already reached saturation point with respect to the population that it could accommodate.

According to the Report on the Development Plan of Greater Bombay, 1966, the total acreage of the island city is 17,388.83 acres and the ultimate population, which it can accommodate, is 32.5 lakh. An estimated 33.4 lakh people were already residing in the island city two years ago.


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## shrivatsa

^^^^^^thats a good news


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## nitesh

domain-b.com : India may become manufacturing hub for Airbus 350 XWB jets 
India may become manufacturing hub for Airbus 350 XWB jets 

4 sept
Indian aviation may be in the dumps currently with airlines cutting down on operations and passengers gravitating towards trains, but aircraft manufacturer Airbus continues to remain upbeat about its future in India. Not only is the European major expecting the next wave of orders from India's airlines in three to four years' time, it is also considering the country as one of the key centres for design and development of its long-haul A350 plane, set to take on rival Boeing's much publicized 787 Dreamliner.

''As Air India, Jet Airways and Kingfisher Airlines look to compete in the international arena there is likely to be need for more aircraft. We expect that the next big wave of orders will come in 2011-12 by when these airlines will have completed the delivery of the aircraft already ordered. The airlines will need aircraft to continue on the growth path that they have embarked on. Besides, there will also be need for freighter aircraft,'' Dr Kiran Rao, Executive Vice- President, Sales and Marketing, Airbus, said.

Commenting on the current downturn in the sector, Dr Rao insisted that its Indian customers have not cancelled any order of the flagship A-380 planes and the merger of Kingfisher-Deccan led to a combined order of 200 aircraft, though the airline has asked for rescheduling of deliveries. (See: Kingfisher Airlines defers A320 deliveries)

"All other airlines will get planes on schedule as there is no request for deferred deliveries. We were in touch with Kingfisher-Deccan when the merger was on and felt that together the aircraft intake could not be as fast as for two different airlines. Airbus offers flexibility of schedule to customers and that's what happened with Kingfisher," Dr Rao, who was in India to attend Kingfisher's launch of global operation, said. (See: Deccan Aviation-Kingfisher Airlines cleared to commence international services)

As for the future, he was largely positive. Although there would be a slackening of the fervent pace as seen in recent years, he still felt that growth would by no means stop. "In 2008, all planes are being delivered as per schedule. In 2009 and 2010, instead of 50 planes, we will be delivering 40 planes every year - one every week," he said.

Without going into specifics, Dr Rao pointed out that both Boeing and Airbus had predicted that India would require about 1,000 aircraft over the next 20 years. ''Airbus and Boeing together have already delivered about 500 aircraft. My guess is that about 250 aircraft will be required in the next wave of deliveries while another wave of deliveries of about the same number will see the domestic airline industry touch 1,000 aircraft deliveries over the next 20 years,'' he said. (See: India's aviation sector needs 1,000 planes over 20 years: Airbus and India to be world's largest civil aviation market by 2025: Society of Indian Aerospace Technologies and Industries) 

Moreover, he announced plans to make India an Airbus hub. Designing work for the A350 is the next project for the Airbus Engineering Centre India, the company's high-tech aircraft component manufacturing facility in Bangalore, which started functioning in April last year.

"The A350 is the next big project for us. The engineers at the facility are currently working on the development of tools to design the aircraft. We will soon get the software for analyzing the stress and strain on aeroplanes. We are working on the structural analysis of the aircraft among other things,'' Dr Rao said.

He said that Airbus was recruiting engineers for the work every month. The centre has 35 engineers and the number is supposed to grow to 300 in the next four years.

The A350 XWB (Xtra Wide Body), the new and improved version of the A350, has been built to take on the Boeing 777 family and some of the models of the Boeing 787. The aircraft has a wider fuselage, which makes it possible for it to accommodate nine people in every row.

"We have already sold (which means received orders) 480 A350s, out of which 15 to 20 are being bought by Kingfisher," said Rao. The aircraft will be put into service from 2013.

Airbus has been looking at various ways to use India for both component manufacture, as well as leverage its research and development potential. The first manufacturing agreement was with Hindustan Aeronautics Ltd in 1998 to make doors for the A320.

"More than half the doors for the Airbus 320 are produced in Bangalore. And as we increase the production of A320s to 40 aircraft a month, which is the largest number of civil aircraft ever produced per month in the aviation industry history, more than 20 sets of doors will be produced in Bangalore every month," said Rao.


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## Neo

* Indias car sector in trouble: industry ​* 
Friday, September 05, 2008

NEW DELHI: Indias automobile industry is facing unprecedented challenges, hit by hefty interest rates and rising costs, said the head of the Society of Indian Automobile Manufacturers on Thursday.

The sector is reeling from a triple whammy of interest rates at seven-year highs, costly fuel and climbing steel and other raw material costs, said Ravi Kant, President of the Society of Indian Automobile Manufacturers (SIAM).

India is aiming for $145 billion in sales for the automotive sector by 2016, accounting for 10 per cent of its economy, from $34 billion in 2006, according to the governments 10-year Automotive Mission Plan. It is also aiming for 25 million indirect and direct auto sector jobs, up from 13 million, but Kant warned that the achievement of the plan was at risk.

The Indian automotive industry is facing unprecedented challenges, he told SIAMs annual meeting in New Delhi. Demand is shrinking because of the lack of availability of consumer finance, high interest rates and the high cost of fuel, he said, adding input materials have witnessed massive increases.

More than half the vehicles sold in India are financed through credit. In the past two years, steel prices have increased by nearly 40 per cent, copper prices are up by 45 per cent and natural rubber has risen by 40 per cent, Kant noted in a speech. 

These factors are having a catastrophic effect on the bottom line of the Indian automotive industry, he said.

These are (also) resulting in the withdrawal, scaling down or deferment of capital investment which would hurt the objectives of the Automotive Mission Plan, he said. Kant appealed to the government to take corrective measures so the automotive plans goals can be met, but did not elaborate.

In August, Japanese-owned Maruti Suzuki India, which manufactures half the cars in the country, reported sales fell 9.2 per cent, the first fall in five months. Further gloom was cast over the industry this week when Indias Tata Motors suspended work on a project to make its Nano car, due to fierce protests over land acquired for the plant.


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## Spring Onion

*Rupee falls to lowest since Dec 2006*
5 Sep 2008, 1820 hrs IST

MUMBAI: Rupee fell to its lowest since December 2006 on Friday, as a stock market slide triggered concerns of further foreign fund outflows. 

Rupee ended at 44.65/66 against dollar, from the previous close of 44.35/36. 

At 3:42 p.m. (1012 GMT), the partially convertible rupee was at 44.70/72 per dollar, its lowest since Dec. 21, 2006 and weaker than its previous close of 44.35/36. 

The Sensex fell 2.8 per cent, tracking losses in other regional stock markets weighed down by fears of a global economic slowdown. 

Foreigners have sold more than $7.3 billion in local shares so far in 2008 pushing the stock market down by more than a quarter. They bought a record $17.4 billion in 2007. 

A widening trade deficit added to funding concerns. The trade deficit in July was $10.8 billion, expanding from $9.8 billion in June. For April-July, the first four months of the fiscal year, the deficit widened to $41.23 billion between April-July from $27.35 billion a year earlier. 
Rupee falls to lowest since Dec 2006-India Business-Business-The Times of India


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## Spring Onion

*Sensex sheds 415 points*
5 Sep 2008, 1900 hrs IST, Mohammed Sabir,TNN

MUMBAI: Global cues, especially weak closing for the US markets on Thursday night, pulled the Indian markets down on Friday. After a lower opening the BSE sensex witnessed some recovery only to lose ground in late trades to close 415 points lower at 14,484. In the process, investors were poorer by Rs 94,000 crore with BSE's market capitalization now at Rs 47.3 lakh crore. 

On Thursday, spooked by high unemployment rate and weak retail sales data, the Dow Jones Index on New York Stock Exchange had lost about 350 points. As a result, Asian markets too showed weak trends which in turn affected investor sentiment on Dalal Street. 

After opening a little over 300 points lower, the sensex recovered some ground in early trades but then slid to end just a tad above its intra-day low of 14,438. Data showed it was the foreign institutional investors (FIIs) who were at the forefront of selling. Provisional institutional trading data on BSE showed FIIs had net sold stocks worth Rs 1,857 crore while domestic funds net bought Rs 485 crore. 

Market players feel with FIIs again turning sellers, there could be more pain left for investors. In early trades Friday, Dow Jones Index was again trading 80 points (0.7&#37 lower, which, if closes lower, could affect investor sentiment on Monday. 

The day's slide was led by sectors like real estate, IT and banking. Market players pointed out that it was rare that IT, and banking and realty sectors slid together. Usually any slide in banking and realty, which are highly sensitive to interest rate outlook, are cushioned by some buying interest in the technology sector stocks which are considered defensive sectors in a higher interest rate regime. 

Market players said while banking and real estate stocks slid on fears of higher interest rate in India, investors sold IT stocks due to fears of a recession in the US, the largest market for the Indian software companies. On Friday, on the BSE, there were 1,626 laggards compared to 1,011 stocks which ended higher. 

Sensex sheds 415 points-India Business-Business-The Times of India


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## Spring Onion

*India has only 1&#37; of global wealth market*
5 Sep 2008, 1946 hrs IST,PTI

NEW YORK: Names like Ambanis and Mittals making to global rich lists every now and then notwithstanding, India accounts for just about one per cent of the worldwide wealth market size of over $100 trillion. 

According to the latest wealth report by global consultancy major Boston Consulting Group, the global wealth market grew to $109.5 trillion in 2007, up 4.9 per cent over the previous year. 

While noting that the wealth market is growing rapidly in India, the report said that the country accounts for only a small fraction of the global market with a size of $ 1.4 trillion. 

BCG has calculated the wealth market size on the basis of Asset Under Management (AUM), which includes cash deposits, money market funds, listed securities held directly or indirectly through managed investments and onshore and offshore assets. It excludes wealth attributed to investors' own businesses, houses or luxury goods. 

BCG said India's wealth market, despite being underdeveloped and relatively small, is "attractive enough to be competitive". 

According to a list of the world's richest billionaires released by US business magazine "Forbes" earlier this year, the number of billionaires in India has gone up to 53, from 36 last year. 

Collectively, the 53 Indian billionaires command a net worth of over $ 340 billion. Besides, there are three resident Indians -- Mukesh Ambani, Anil Ambani and K P Singh -- among the 10 richest persons in the world, according to "Forbes". 

In another report by Merrill Lynch and Capgemini in June, India was identified as the fastest growing population of millionaires. The number of HNIs (high net worth individuals or those having net assets of at least one million dollar excluding own houses and consumables) in India grew by 22.3 per cent in 2007 to 1,23,000 last year. 

BCG report noted that low barriers to entry have resulted in increased competition and a broad range of offerings in Indian wealth market. Most of the wealth in the country is invested in property or gold and is self-managed, it added. 

The total wealth stood at $ 25.5 trillion in the Asia-Pacific region with Japan accounting for nearly half the total amount. Nonetheless, India and China clocked the fastest growth in AUM in the region. 

"Entrepreneurs represent the region's most prominent client segment. They tend to have a high appetite for risk and are quite speculative, and they trust cash more than any other type of asset," the report said. 

BCG, however, pointed out that several markets including India are facing acute shortage of Relationship Managers (RMs). 

"Owing to increased competition, India's shortage of seasoned RMs is acute. This situation has led to high attrition rates, increased compensation and hiring of young, inexperienced RMs," the report noted. 

Globally, North America (comprising the US and Canada) emerged as the wealthiest region, with AUM to the tune of $ 39.2 trillion, followed by Europe with $ 38.3-trillion AUM. 

Moreover, in the 2002-2007 period, the share of wealth invested in equities jumped to 40 per cent from 32 per cent, which in turn pushed the potential for higher growth and volatility, the report added. 

India has only 1% of global wealth market-Intl Business-Business-The Times of India


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## nitesh

The Asian Fab 50 - Forbes.com
China moved to the top in our fourth annual Asian Fab 50. Thirteen Chinese firms made our selection of the best of Asia-Pacific's biggest listed companies, out of a universe of 500. We look at long-term profitability, sales and earnings growth, stock price appreciation and projected earnings for every company in the region with revenues or market capitalization of at least $5 billion. 

Gome and Suning, two of China's fastest-growing retailers, make their appearance for the first time this year. Nearly all of our China entries are geared to the domestic market, such as China Mobile (nyse: CHL - news - people ) with its 422 million cellphone subscribers; China Construction Bank, one of the country's biggest mortgage lenders; and China Vanke, the property developer. 


*Indian companies once again had a strong showing, with 10 making our cut. Infosys and Wipro (nyse: WIT - news - people ), perennial top performers, are back for the fourth year. Reliance Industries, Bharat Heavy and Larsen & Toubro are back for the third year. Consumer-oriented companies such as Bharti Airtel, HDFC Bank (nyse: HDB - news - people ), Mahindra & Mahindra and ITC are growing with India's middle class.*

Most of the Taiwanese companies on our list share a similar story: They are anonymous gadget makers, run by entrepreneurs who made their fortunes building export-driven businesses in China. The biggest, Hon Hai Precision, is China's largest exporter and has factories all over the world. Some have created their own brands, such as Acer, Asustek and HTC. Tingyi, a new entry on our list this year, is an exception. It's the firm behind some of China's most popular drinks and noodles, started by a Taiwanese entrepreneur. 

A handful of other companies are making their fourth appearance this year, such as retailers Woolworths of Australia and Esprit of Hong Kong. So are Li & Fung, the Hong Kong logistics firm, and Yahoo! Japan (nasdaq: YHOO - news - people ). BHP Billiton (nyse: BBL - news - people ), Australia's mining giant, has also made the cut every year. That sort of staying power is worth noting. This has not been an easy year. Share prices for last year's Fab 50 are down an average of 30&#37; since January, and the earnings reports coming out now are full of angst. It's easy to pick winners when business is booming. Many on this list have shown they can outperform in good times and bad.

Over the past year, the market-cap weighted index of last year's Asian Fab 50, down 0.8%, outperformed the MSCI Barra All-Country Asia Pacific Index, down 15% (see chart below). Almost half of the last year's companies continued their consistent performance over the past year and returned to our list again this year. There were also 23 rookies making their first appearance as an Asian Fab 50 company. Most of the companies are based in China, led by Sinopec (China Petroleum & Chemical (nyse: SNP - news - people )), China's second-largest oil refiner. Japan and South Korea have both seen their presence on our list diminish each year since our inaugural list in 1995. This year's list has only three Japanese companies--Chiyoda, Nintendo (other-otc: NTDOY.PK - news - people ) and Yahoo! Japan, while South Korea checks in with two of its conglomerates--Doosan and LG.


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## nitesh

RIL makes it to world's 100 most respected cos list- Hindustan Times


RIL makes it to world's 100 most respected cos list
Press Trust Of India
New York, September 06, 2008
First Published: 19:49 IST(6/9/2008)
Last Updated: 22:26 IST(6/9/2008)

Billionaire Mukesh Ambani-led Reliance Industries has made it to the annual list of world's 100 most respected companies compiled by the Wall Street Journal, topped by US-based healthcare products major Johnson & Johnson.
*Ranked 83rd, RIL is the only Indian company on the list, although there are three more companies led by persons of Indian origin -- PepsiCo, ArcelorMittal and Citigroup.*

J&J is followed by FMCG giant Procter & Gamble, Japanese auto maker Toyota Motor, legendary investor Warren Buffett-led Berkshire Hathaway and technology giant Apple in the top five positions.

While Berkshire has slipped from its first position last year, J&J has moved up from its second place in 2007 list. Toyota has retained its third place, while Apple and P&G have improved on their previous year rankings.

Besides, Google (6th), Wal-Mart (7th), Coca-Cola (8th), PepsiCo (9th) and Nestle (10th) also figure among the top- ranked companies.

As part of the fourth annual survey, Wall Street Journal asked money managers to indicate the degree to which they respect or don't the 100 largest publicly traded companies, as measured by total market value.

According to the survey, 74 per cent respondents said they 'highly respect' J&J, 23 per cent said they 'respect', 3 per cent said 'respect somewhat' but none said they 'don't respect' the company making it top-ranked company.

*About RIL, 4 per cent considered the company as highly respected, 17 per cent said they 'respect' it, 46 per cent responded saying they 'respect somewhat', while 11 per cent said they 'don't respect' the firm.*


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## Neo

*TV channels attract foreign investment​*
THE Indian small screen is getting bigger and more crowded by the day as television broadcasters, both domestic titans and media moguls from around the globe are rushing in for a bigger share of the pie.

Rupert Murdoch, the Australian media tycoon, recently announced plans to invest $100 million in a slew of six regional television channels. We are happy to be in India, said Murdoch. Slower expansion of the economy may slow growth a bit, but in the long term, there is a lot of growth to be had.

While Indias GDP growth rate might decelerate this year to around seven to 7.5 per cent  as against over nine per cent every year over the past four years  the electronic media continues to expand at a frenzied pace.

Media Partners Asia, a top independent research company, estimates that the Indian television industry will surge by 16 per cent annually over the next few years. PricewaterhouseCoopers, an international consultancy, predicts an 18 per cent compound annual growth rate.

Television advertising is growing at an even faster pace; during the first six months of 2008, it is estimated to have grown by 26 per cent. Revenues from ad spends on television are expected to double to $11 billion by 2011 and top $16 billion by 2015. The direct-to-home satellite market is expected to jump to 38 million by 2015, up from a little over 2.5 million in 2006. The first-half of 2008 alone saw an additional 17 million viewers being added in India.

Not surprising then that media majors from Star TV to Turner Broadcasting and Reliance Big Entertainment to Zee TV are salivating at the thought of raking in the money. According to Steve Marcopoto, president and managing director, Asia-Pacific, Turner Broadcasting System, India accounts for 30 per cent of its Asia-Pacific revenues and is one of the highest priority markets for the company worldwide.

One of the fastest growing segments is regional television, with advertising revenues soaring by over 22 per cent last year (as against less than 15 per cent for national advertising). So it was not surprising that Murdoch announced plans to launch half a dozen regional channels in India.

Unlike the regional print media  where newspapers are starved of funds and lack modern printing presses and technology  language channels in India are thriving, both in terms of viewership and advertising. Star TV had a tie-up in the past with Balaji Telefilms for starting general entertainment channels (GECs) in south Indian languages, but that venture has turned sour.

Star TV is now entering into a fresh pact with leading Kerala-based broadcaster, Asianet, for launching GECs in the four south Indian languages. The Murdoch group broadcaster is also keen on launching GECs in Bengali and Gujarati. It recently launched Star Jolsha, a Bengali GEC.

*****

REGIONAL languages including Bengali, Telugu, Tamil, Kannada, Marathi and Gujarati are attracting a lot of television networks, wanting to start their own channels. The Zee TV group and the Eenadu group are at the forefront, having launched several such channels.

Star is now entering the fray and wants to expand its presence in the regional space. Political parties and top regional politicians are also launching their own channels in Andhra Pradesh, Tamil Nadu, Kerala, Maharashtra and other states.

The Sakaal group of Pune  which is controlled by a close relative of Sharad Pawar, the federal agriculture minister and the Nationalist Congress Party (NCP) supremo  recently launched a Marathi channel. Other parties have also drawn up plans for their own channels.

Not to be left behind, the new kid on the media block, Anil Ambani, has also announced plans for the launch of 20 television channels, including regional ones. Reliance Big TV Ltd, part of his Anil Dhirubhai Ambani Group (ADAG), has already got licences for 20 channels, says Sanjay Behl, a senior Reliance Communications executive. ADAG recently launched Reliance Big TV Ltd, a direct-to-home service, which is in direct competition with Tata Sky (a joint venture between Tatas and Star TVs British Sky Broadcasting), and Zee TVs Dish TV.

Arun Kapoor, CEO, Big TV DTH, says that three of the new channels would be launched later this year and about five early next year.

Another broadcaster with ambitious expansion plans is New Delhi Television (NDTV), which is coming up with two non-news channels and a local news channel in Chennai. NDTV already operates half a dozen channels  including NDTV 24x7, NDTV India and Imagine  in India and three overseas channels.

The network, founded by Prannoy Roy, its chairman, sold off a 26 per cent stake to NBC Universal last year for $150 million. It now plans to plough back the same amount for setting up studios and production facilities.

Other broadcasters are also planning major expansions. UTV, which has also emerged as a leading media and entertainment giant, has sold a 15 per cent stake in UTV Global Broadcasting Ltd to Walt Disney Co. The American media and entertainment giant now has invested almost $2 billion in the UTV group  including a 32 per cent stake in UTV Software Communications.

The group has television channels including Bindaas, Bindaas Movies, World Movies UTV Movies and UTV Business News.

*****

INDIAN television viewers have access to a mind-boggling range of nearly 450 channels. But broadcasters feel there is room for more channels. Applications for about 150 additional channels are awaiting approval from the government.

About 60 per cent of these 150 applications relate to news and current affairs channels, hunger for which appears insatiable. This year so far, the government has already given licences to 33 news and current affairs channels.

Many of the Indian news channels have degenerated into sordid, electronic tabloid versions, focusing on crime, sensationalism, bogus spirituality, superstition and voyeurism.

Even the Supreme Court recently lashed out at news channels, accusing them of sensationalising news. It directed the government to lay down guidelines for the electronic and print media while covering criminal cases under investigation. The immediate trigger for this was the shocking coverage of the murder of a school girl near Delhi, with television networks carpet-bombing viewers with saturation coverage of the crime and passing off wildly speculative stories as facts. 

Surprisingly, despite the channels obsession with perversity, superstition, celebrities and other inane subjects, their ratings keep climbing, indicating the popularity among viewers. This is driving other entrants to set up their own news channels, hoping to grab a share of the growing advertising market.

But some degree of churning is also happening in the Indian television business, as weaker players are swallowed by the bigger ones. Global Broadcast Network, which has promoted CNN-IBN, recently acquired Channel 7, while Sony TV bought SAB TV. There are many other pickings available, and analysts expect a lot more of consolidation to happen over the coming months.

Besides regional markets, many of the channels are also eyeing the overseas markets, especially countries with a significant expatriate Indian population, like the US, Canada, the UK, the Gulf, South East Asia and Australia. About 25 million overseas Indians or persons of Indian Origin live around the globe, many of who are hooked on to Bollywood and Indian entertainment programmes.

Channels like Star, Zee, NDTV, 9X and others are being distributed in many countries through cable and satellite or direct-to-home platforms. They have seen advertising revenues and even subscription fees soar in recent months.

For the Indian television industry, the news has never been better, as viewership continues to soar along with advertising revenues.


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## Marshal

*India Inc sets eyes on $40 bn nuclear energy market*
NEW DELHI: Eyeing the $50 billion (approximately Rs.2,000 billion) potential seen in India's nuclear energy sector over the next 10-15 years, apex industry chambers have begun to lobby with the government to permit private sector entry in the industry, two days after a historic global decision to end the country's decades-old nuclear isolation. 

"As many as 40 Indian companies have already started talks with the government to allow the private sector into nuclear power generation," Venugopal Dhoot, chairman of white goods to energy major Videocon Group, told reporters here Monday. 

"This is a huge business opportunity for India as power is a booming sector that requires maximum investment in the near future," said Dhoot, the past president of the Associated Chambers of Commerce and Industry (Assocham). 

He said Videocon, Tata Power and Jindal Power are among the 40 or so corporates negotiating joint ventures with their foreign counterparts for nuclear power generation. "We are already talking to the government to allow private players in this sector," Dhoot added. 

His comment came after the 45-member Nuclear Suppliers Group (NSG) met in Vienna last week and decided to end more than three decades of nuclear isolation of India, after three days of intense diplomacy by the US and Indian diplomatsIndia Inc sets eyes on $40 bn nuclear energy market- Indicators-Economy-News-The Economic Times


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## Marshal

*India tops list of Dubai's trading partners*
DUBAI: Pushing aside China to the second place, India has topped the list of Dubai's main trading partners during the first half of 2008. 

The bilateral trade volume of imports between India and Dubai has grown by 49.6 per cent, crossing USD 6.56 billion as against USD 4.38 billion, in the corresponding period last year, a report by Dubai World's Statistics Department has said. 

India also topped among trading partners in exports, which was put at USD 2.26 bn, a growth rate of 44.4 per cent as compared to the first six months last year, the report said. 
Also, the report added that China moved to second place as the Dubai's trading partners but showed a growth rate of 29.9 per cent which was USD 6.48 billion as against last year's USD 4.98 billion. 

The United States stood at third place with a growth rate of 76.4 percent. 

Meanwhile, Dubai's non-oil direct foreign trade jumped by 54.3 percent during the first half of 2008, as compared to the same period last year. 

"This growth reflects the position Dubai now enjoys in global trade. Excellent development of infrastructure and reinforcement of its competitive potentials have helped Dubai become an attractive economic hub for investments in diverse areas," said Saeed Al Qaizi, the director of procurement, contracts and statistics, at the Dubai World. 

Nassim Al Mehairi, the acting manager at statistics department of Dubai World said, "Dubai's overall imports during January-June, 2008 also saw a growth rate of 52.7 per cent." 





India tops list of Dubai's trading partners- Indicators-Economy-News-The Economic Times


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## Neo

*India, Germany launch 20m euro science and technology center ​*New Delhi, Sept 9, IRNA 

India and Germany on Tuesday launched a 20 million euro strategic partnership on innovation in skill development, industrial growth and life sciences. 

Both countries would start a Indo-German Science and Technology Center which will strengthen collaboration in the field and accelerate translation of research into new products, processes and services. 

India and Germany have already started a joint research project on infectious diseases since 2006. Systemic biology, drug development and clinical trials are the focus areas of the project. 

The new partnership in research and technology would see an investment of 10 million euro each from India and Germany. 

"The partnership would address the challenges faced by both the countries in various areas. It will look forward to technological solution to the local problems," Science and Technology Minister Kapil Sibal said. 

He said India is planning to set up 50,000 development centers where people would be provided skill-oriented training. 

Germany, which is much advanced in skill development, can be of help to India in this regard, he said. 

The centers will come up on public-private partnership basis with involvement of industry bodies like Federation of Indian Chamber of Commerce and Industry (FICCI), ASSOCHAM and Confederation of Indian Industry (CII). 

The major issues in India include energy security, climate change and health related problems, Sibal said the government has launched scheme under which scholarships are being provided to students to pursue further studies and research. 

The government is also bringing a bill which envisages a share for scientists in the wealth created by the technology developed by them. 

This would encourage them go for more research and innovation, Sibal said. 

Germany's Federal Minister of Education and Research Annette Schavan said the cooperation has potential for both sides.


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## Neo

*India-Malaysia bilateral trade to reach $16 bn by 2012​*Calcutta News.Net
Tuesday 9th September, 2008 (IANS)

Total bilateral trade between India and Malaysia stood at $4.09 billion from January to May this year against $2.94 billion in the same period last year. The amount is expected to go up to $16 billion by 2012, according to Malaysian High Commissioner to India Ten Seng Sung.

India now imports crude petroleum, palm oil, electrical and electronic products from Malaysia and exports chemicals and chemical products, live animals and refined petroleum products, Sung said after a meeting with West Bengal Chief Minister Buddhadeb Bhattacharjee.

The two countries have identified sectors like petroleum and gas, IT, healthcare, education, processed food, medicine, construction and engineering as major areas of collaboration.

On the other hand, major Malaysian companies have invested in sectors like construction, power generation, telecommunications and tourism in India, Sung said.

The high commissioner assured Bhattacharjee that he would look into the scope of resuming air connectivity between Kuala Lumpur and Kolkata.

The chief minister sought collaboration with Malaysia in the area of agro processing. He emphasised that West Bengal could export mangoes to Malyasia and provide opportunities to the companies from the East Asian nation to put up potato processing plants as the state had a huge surplus in potato production.

Sung and Bhattacharjee also discussed the possibilities for Malaysian investment in the state in the infrastructure sector and also for setting up downstream units in petrochemicals and steel sectors, according to a statement issued by the office of the Malaysian Consul in Kolkata Sanjay Budhia.


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## Neo

*FTA in hand, how far are India & ASEAN from a CEPA?​*10 Sep, 2008, 0314 hrs IST,Amiti Sen, ET Bureau

NEW DELHI: While the negotiations on a free trade agreement (FTA) in goods between India and the ASEAN have been successfully concluded, talks on liberalising services-the area which could generate the maximum benefits for India in terms of greater job opportunities and more services exports-is yet to begin. Negotiations on services and investment, which are expected to begin next month and be concluded by the end of next year, will eventually spell out the net gains made by India from the bilateral agreement. 

When talks started on a bilateral trade agreement between India and the ten ASEAN countries began way back in 2002, the two sides initially began work on a comprehensive economic partnership agreement (CEPA), including goods and services and investment-all to be negotiated under a single undertaking (meaning if you can't agree on any one of the three, you don't have a deal). However, as the negotiations progressed and came against several road-blocks, the ASEAN demanded that the goods agreement should be concluded first and the agreement on services and investment should follow. 

India, which was keen to forge an alliance with the ASEAN, especially because of China's growing economic ties with the region, agreed. As a result, India lost some bargaining power, which could have been utilised to wrench a few extra concessions, particularly in the area of movement of professionals against concessions given by India in the area of goods. 

Despite the obvious disadvantage of negotiating a purely services agreement, India could still manage to get a good bargain with some careful negotiations. Since Singapore-India's best friend in the ASEAN group-is the chair of the negotiating group on services, the chances of India getting a raw deal stand reduced. 

According to the framework agreement of the India-ASEAN CEPA the commitments on liberalising services between the two parties should go beyond the commitments which the two will make in the General Agreement on Trade in Services of the World Trade Organisation. India's main interest lies in easier temporary visas for its workers to go to any of the ASEAN countries to provide their services. 

India also wants mutual recognition agreements (MRAs) to be part of the treaty. This would enable Indian professionals like doctors, architects and chartered accountants to practice in the other country with a degree or diploma earned in the home country. India is working on similar MRAs with Singapore under the India-Singapore CEPA. In the area of investments, both sides have talked about strengthening cooperation in investment, facilitate investment, improve transparency of investment rules and regulations and provide for the protection of investments. In the financial services sector, like banking and insurance, this could provide opportunity to Indian entities to set up business in the ASEAN countries. 

The agreement on goods, which is likely to be implemented by the beginning of next year, is quite ambitious with all parties reducing or eliminating tariffs on more than 90% tariff lines corresponding to about 96% of total trade. While majority of the trade stands to be liberalised by 2012, depending on the country and the track, the process would go on till 2023. 

Special and differential treatment in terms of longer implementation period is being given to Cambodia, Laos, Myanmar and Vietnam. India and the remaining six ASEAN members including Malaysia, Singapore, Thailand, Indonesia, Philippines and Brunei will liberalise their markets for industrial and agricultural goods faster. India-ASEAN trade, which has been growing at a compounded annual growth rate of 27%, stood at $38.37 billion in 2007-08. It is projected to reach $ 48 billion in 2008-09.


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## Neo

*India's N-energy trade to touch USD 100 bn in 10 yrs: US​*9 Sep 2008

HYDERABAD: The nuclear energy business in India would be in the order of USD 100 billion in about ten years after nuclear deal comes through, the United States Assistant Commerce Secretary David Bohigian said on Tuesday. 

The Nuclear Suppliers Group's waiver for India was a positive move that would foster clean energy business in both the countries, he said. 

Bohigian, who is leading the US clean energy trade mission to India to explore the business opportunities, was interacting with the media here. 

Though a business plan for the post-deal period is not made yet, he said there were immense opportunities waiting to be tapped. 

India, he said, would witness nuclear renaissance once the deal is through. 

Some companies dealing in clean energy have been making enquiries with the Commerce Department about the possible trade opportunities and the scope of nuclear business, the visiting dignitary said. 

Asked why US did not set up new nuclear reactors in the past two decades, he said it was working on the second generation reactors which are more economical and reliable.


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## Neo

*India Top 10 Yearbook for 2008 Reveals Key Information on Almost All Socio-Economic Aspects Prevailing in India​*DUBLIN, Ireland  Research and Markets 
Tuesday, Sep. 09, 2008

(Indiastat India Top 10 Yearbook - 2008 - Market Research Reports - Research and Markets) has announced the addition of the "Indiastat India Top 10 Yearbook - 2008" report to their offering.

Indiastat India Top 10 Yearbook - 2008 is a complete guide that serves as an effective source of key information on almost all socio-economic aspects prevailing in India with the comparison of world. All parameters have been structured in descending/ascending order with India's rank in globe and form a unique source of knowledge for readers from all walks of life.

This book is a single source of information providing interesting statistics on various aspects of the geography, Demographics, agriculture, economy, industry, infrastructure, health & nutrition, travel & tourism, labour & workforce, education, market, sports, crime & law and media & lifestyle presented in over 1000 tables.

The work highlights amazing facts in a manner never laid before. A list of Top 10 has been conceived that includes ranking on certain specific parameters and its comparison with the countries ranking. Indiastat India Top 10 Yearbook- 2008 will satiate the urge of every reader to reach out to the most interesting pieces of information which otherwise would require browsing through many texts & websites of this nature. Access to such facts and figures had never been made so easy.

Indiastat India Top 10 Yearbook- 2008 makes available the most recent data on the present socio-economic aspects. The various facts will sweep many persisting notions among the common man with factual data piled up from the most authenticated sources.

The data of India comparing to world is its most unique feature. One such tabulation brings out India as a country with the second highest producer of rice in world with the production of 608367.82 thousand tones after China, which is producing 180522.60 thousand tones in the year 2004. Another list for the year 2007 indicates India's fourth internet user position in globe by having 60000000 users. The ranking by Forbes of world most powerful women quotes Sonia Gandhi on fourth place while Angela Morkel, chancellor of Germany, listed on top position. The sources reveal Switzerland as country with the highest briber payer index followed by Sweden & Australia while India is on thirteenth position in the year 2006. As on 2005, India is projected in top list of countries, which haves the highest population without electricity.

AdvertisementThe reader is bound to enjoy the available pool of data in this publication for India, its expanse and variety. Among the major oil refineries in India at the end of March 2007, Reliance Petroleum Ltd. at Jamnagar is the largest refining capacity. As per companies' sale figure of steel for the year end March 2007, SAIL (Steel Authority of India) is listed on the top position followed bt Tata steel. As on June 2007, BSNL records the highest number of internet subscribers in India followed by MTNL and Sify. Maharashtra for the highest power generating state in 2007 while Gujarat and Andhra Pradesh following it.

Indiastat India Top 10 Yearbook- 2008 is sure to become an indispensable collection of interesting information for every knowledge seeker.

Key Topics Covered:
- Geographical Facts
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For more information visit Indiastat India Top 10 Yearbook - 2008 - Market Research Reports - Research and Markets 

Research and Markets Laura Wood, Senior Manager U.S. Fax: 646-607-1907 Fax (outside U.S.): +353-1-481-1716 press@researchandmarkets.com


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## Marshal

*India, Canada FTA recommended*

Indo-Canadian CEOs "have concluded that Canada and India should enter into a new era of cooperation", which should result in their concluding a "comprehensive Free Trade Agreement."

The CEOs on both sides, headed by Thomas d'Aquino, chief executive and president of Canadian Council of Chief Executives, and Tarun Das, president of Confederation of Indian Industries, submitted a 14-page report on September 2 to the two trade ministers in Canada and India for their considerations and follow-up actions.

It was in June last year that India's Commerce Minister Kamal Nath and Canada's Minister for International Trade David Emersion asked the India-Canada CEO Roundtable participants for advice on the possibility of launching negotiations toward a free trade agreement between the two countries.

The draft report that they have now submitted is the result of that initiative by two ministers.

"It is time to elevate the trade and investment relationship between Canada and India to a new level," and the CEO Roundtable participants, in their draft report, "recommend the launch of discussions toward a comprehensive economic partnership agreement consistent with the principles outlined in the report."

"CEO Roundtable participants agreed that deepening bilateral trade relations should support rather than upstage or undermine the multilateral agenda," the report added.

The CEOs on both sides "believe that the scope to conduct business bilaterally is limitless and that the time to engage is now. The products and services that Canada and India produce and what each country needs are complementary. The strong linkages offered by a vibrant Indo-Canadian community represent further untapped potential in the relationship."

Some people have expressed apprehension that the proposed FTA agreement could not serve much purpose when the trade between the two countries is so low -- about $4-billion on two sides this year. According to some projections, within the next five years it could increase to $10 billion. 

CEOs on both sides disagree with this kind of pessimism. "A more aggressive but strategic approach to the bilateral relationship is needed to produce benefits for both India and Canada in the form of new markets for goods and services, opportunities for investment and stronger economic growth."

It is suggested in their draft report that "pursuit of deeper commercial relations would result in greater competitiveness and prosperity for Canada and India."

Dr Wendy Dobson, professor at Rotman School of Management, University of Toronto, said the report by the CEOs "has all the good principles and it is suggested that it should be comprehensive FTA, and agriculture should be included as far as possible."

Participating in a Canada-India business round table, sponsored jointly by Indo-Canada Chamber of Commerce and Ontario Chamber of Commerce, held on September 4, Dobson said, "It is a good time (for release of this document), something that needs to simmer and be considered and tackled, if possible."

"Official responses are positive as what we learnt during Canada-US Free trade negotiations and subsequently in the North American free trade agreement negotiations is that even the prospect of negotiations is an enormous catalyst and raised business interests as to how should we position ourselves if this (FTA) happens," she said.

"Given current global, regional, and country-specific economic conditions, further study will be needed in a number of sectors that are not yet ready for full bilateral liberalisations, including the agricultural and cultural sectors," the CEO Roundtable report said. 

Agriculture, it is known, is a very important and touchy sector in India as 50 pe rcent of the country's population still depends on agriculture for their sustenance.

As for the CEO Roundtable participants, "There are no major impediments to beginning bilateral negotiations immediately&#65533; (as) for agriculture, the negotiations should take into account the livelihood issues in India and develop areas of complementarity; non-tariff barriers should be eliminated between the two countries; and the FTA should include a binding dispute settlement mechanism."

In their report, the CEOs have recommended that the two prime ministers should move beyond the 2003 and 2005 joint declarations signed by leaders in two countries "and endorse the launch in 2008 of negotiations toward a Free Trade Agreement."

Such an agreement, CEO Roundtable participants suggested, "would enable closer bilateral cooperation in priority areas such as security, commercial exchanges, culture, science and technology, education, infrastructure and energy and the environment."

The report also discussed the potential of India as "a large and growing economy; one that is projected to become the world's third largest by 2050 and therefore, it is suggested that the Canadian businesses must engage more actively."

Thomas d'Aqino was the keynote speaker at Indo-Canada Chamber of Commerce Gala on June 14, when India's Minister of Science and Technology Kapil Sibbal was among the special guests present that evening.

D'Aquino explained how a group of Canadian CEOs, under his leadership, went to India in March last year, which was part of the Canada-India CEO Roundtable. It was followed by visit of Indian CEOs for their second CEO Roundtable in Montreal in June where Minister Kamal Nath, Canada's Minister for International Trade David Emersion and Quebec Premier Jean Charest were also present.

"At that meeting, both ministers asked the Canada-India CEO Roundtable participants for advice on the possibility of launching negotiations towards a free trade agreement between India and Canada," d'Aquino said.

This draft 14-page report has been submitted to the two ministers.

The CEOs on both sides believe that the FTA, once concluded, "would deepen economic engagement to the benefit of both countries" and it would also reinforce "existing agreements and understanding."

"While our bilateral trade and investment remains modest, significant benefits would accrue to both Canada and India if this (Free Trade) agreement was substantial and comprehensive, covering a broad range of trade-related areas," the CEOs said.

The CEOs have recommended that the two prime ministers "should meet at the earliest opportunity to consider the course of action recommended" by them in their draft report.

"India-Canada CEO Roundtable participants pledge to hold additional meetings to prepare for the launch of the negotiations," they said.
India, Canada FTA recommended


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## Marshal

*Top finance adviser sees single digit inflation by year-end*

NEW DELHI: Inflation rate will come down to single digit by the end of this fiscal if oil prices keep softening in the international markets, says a top adviser in the finance ministry. 

"If oil prices go below $100 per barrel, the wholesale price index inflation will even come down to five-six percent by the end of the current fiscal," Arvind Virmani, chief economic adviser in the finance ministry, told IANS in an interview. 

"I am reasonably confident that within a year, inflation will be back to normal. In the short-term, it depends on oil prices to a large extent and we have seen oil prices coming down." 

He also said food price inflation has not been that severe in India when compared with the global situation, as prices of primary food articles such as fruits, vegetables, tea and lentils had gone up by 6.04 percent during the 52-weeks ended Aug 23. 

"It is partly because of the nature of our economy, which is still isolated from the global situation except in one or two commodities like edible oils as we import some 60 percent-plus of our overall edible oil requirements," he said. 

"Nevertheless, our food price inflation has only been around seven percent for the primary food articles as compared to 45 percent for the index of food globally." 

The Prime Minister's Economic Advisory Council (EAC) in its recent "Economic Outlook Report for 2008" had said that a coordinated policy action could bring the inflation rate down to eight-nine percent by March 2009. 

"Given the global impulse, to a large extent, the short-term outlook will depend really on what happens globally," Virmani said. 

"Of course, in the medium to long term, various monetary policy actions have been taken. These will help in bringing down inflation in the next three to six months." 

To rein in inflation, the Reserve Bank of India (RBI) successively hiked the repo rate or the rate which the central bank lends to commercial banks and the cash reserve ratio or the minimum balance a bank has to keep against deposits. 

These measures helped in moderating the country's inflation rate to 12.34 percent for the week ended Aug 23 from close to 13 percent a few weeks ago, bringing some relief to policy makers. 

Virmani also projected a lower economic growth in India during the current fiscal, but higher then the projection of 7.7 percent growth predicted by the advisory council. The gross domestic product had expanded by nine percent last fiscal. 

"This year the economy will grow below the trend of nine percent. The growth will remain between 7.75 percent and 8.75 percent," he said. 

Indian economy grew at 7.9 percent during the first quarter of this fiscal compared to 9.2 percent during the corresponding period of last year. 



Top finance adviser sees single digit inflation by year-end- Indicators-Economy-News-The Economic Times


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## Marshal

*Japan: The 9th Round of Negotiations on the Japan-India Economic Partnership Agreement*
The 9th round of negotiations on the Japan-India Economic Partnership Agreement (EPA) will be held from September 8 (Mon) to 12(Fri), 2008 in New Delhi, India, at the Ministry of Commerce and Industry.

In this round, Mr. Masato Takaoka, Deputy Director-General of the Economic Affairs Bureau, Ministry of Foreign Affairs (Coordinator for the Japanese Co-chairs), other Director-General-level Co-chairs and officials from relevant ministries and agencies of Japan, and Mr. Dinesh Sharma, Joint Secretary of the Department of Commerce, Ministry of Commerce and Industry (Indian Co-chair) and officials from relevant ministries of India will respectively participate. 

In the round, both sides will discuss market access of trade in goods and such issues as rules of origin, general rules, customs procedures, trade in services, investment, intellectual property, and cooperation.

Japan: The 9th Round of Negotiations on the Japan-India Economic Partnership Agreement


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## Marshal

*End To India Nuclear Isolation Opens Huge Market*

September 08, 2008: 10:06 PM EST
NEW DELHI (AFP)--The end to India's nuclear pariah status paves the way for atomic fuel and technology sales worth tens of billions of dollars and companies are racing to exploit the market, officials say.

A host of companies - from Westinghouse Electric Co. and General Electric Co. (GE), and France's state-controlled Areva (CEI.FR) to Russia's atomic energy agency Rosatom - have been jockeying for a slice of India's lucrative civilian nuclear technology market and more are poised to join the fray.

"This is a huge business opportunity for India as power is a booming sector requiring maximum investment," Venugopal Dhoot, who heads consumer goods-to- energy firm Videocon Group, told reporters Monday.

Videocon is one of about 40 Indian companies seeking to negotiate nuclear power joint ventures with foreign firms, said Dhoot, past president of Indian business lobby Assocham.

The Nuclear Suppliers Group, or NSG, which controls the sale of nuclear technology, cleared civilian nuclear commerce with India Saturday -- a key step in sealing the India-U.S. atomic technology accord signed by President Bush and Indian Premier Manmohan Singh in 2005.

The decision - ending a 34-year embargo - gives India the right to buy nuclear reactors from abroad and access to nuclear fuel on the global market.

The U.S.-India Business Council, one of the champions of the nuclear pact between New Delhi and Washington, said the NSG's decision could unlock nuclear energy investment in India worth more than $100 billion.

"India's existing civilian nuclear power program generates only 3,500 megawatts of electricity due to lack of access to much-needed fuel," said the group's president, Ron Somers.

"India plans to increase this capacity to 30,000 to 60,000 megawatts over the next 20 years by acquiring fuel from Nuclear Suppliers Group countries for its civilian nuclear energy program - at a cost exceeding $100 billion," he said.

India state-owned Nuclear Power Corp. - the monopoly nuclear power generator - is readying to place orders that will form the first phase of the country's plan to build 40,000 megawatts of nuclear capacity by 2020, according to Indian media reports.

According to U.S. forecasts, India will import at least eight nuclear reactors by 2012.

Energy-hungry India, where many areas endure blackouts lasting 12 hours or more, has been denied access to foreign civilian nuclear technology since it tested a nuclear weapon in 1974 and refused to sign the Nuclear Non- Proliferation Treaty.

The ruling Congress party has been seeking to broaden India's energy sources as it seeks to keep the country's fast economic growth on track.

Thermal fuel provides 70% of India's energy while 20% comes from hydroelectricity. Nuclear energy accounts for just 2% to 3%, which India is aiming to boost to between 5% and 7% by 2030.

Technically, as a result of the NSG's decision, India now is free to trade on the world market. But India said late Monday it would seek to clinch international nuclear deals only after the India-U.S. atomic agreement is cleared by the U.S. Congress.

India will "enter into trade with supplying countries through bilateral agreements" after Congress ratifies it, Foreign Minister Pranab Mukherjee said in New Delhi.

The deal has been held up as a high-water mark of growing strategic ties between Washington and New Delhi.

Mukherjee's pledge came after U.S. Secretary of State Condoleezza Rice urged India not to "disadvantage American companies" should the deal hit a roadblock in this session of Congress, which winds up at the end of this month.

But in the meantime, India can hold informal talks for nuclear reactors. On Monday, a British nuclear power industries delegation arrived in India to explore the market.

"We've discussed lots of possibilities for nuclear trade between India and the U.K.," India's Minister of State for Industry Ashwani Kumar said after meeting the delegation
End To India Nuclear Isolation Opens Huge Market


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## nitesh

Tata Group | Tata Consultancy Services | Media releases | TCS partners with Saab to set up aerospace design and development centre in India

Tata Consultancy Services (TCS), (BSE: TCS.BO, NSE: TCS.NS), a leading global IT services, business solutions and outsourcing firm, today announced its partnership with Saab for the establishment of Saab&#8217;s Aeronautical Design and Development Centre (ADDC) in India. Saab serves the global market with world-leading products, services and solutions ranging from military defense to civil security.

The partnership to establish ADDC aims at addressing the global aeronautical market. ADDC will create a single source of design and development capabilities within India, addressing domestic and the global defense and civil aeronautical applications. ADDC capabilities across the product lifecycle include: design and development of structures / systems for new platforms, performance studies and virtual prototyping, aircraft sustenance engineering, manufacturing support, production and after market support, life extension / upgrade programs, avionics and mission critical software development.

&#8220;This co-operation is not limited to any specific product but is aimed towards building a joint capability to leverage collective strengths across the globe,&#8221; says Saab CEO Ake Svensson.

Commenting on the partnership, S Ramadorai, chief executive officer and managing director, TCS, commented: &#8220;This partnership has a strong blend of Saab&#8217;s technology solutions and TCS global engineering model to address the growing opportunities in the aerospace and defense sector.&#8221;

Tata Industrial Services (TISL), which oversees and monitors contracts, was instrumental in forging this co-operation. Uma Pillai, managing director of TISL, commented: &#8220;The formation of ADDC is the first step in harnessing the potential of the two global organisations in aerospace and defense sector.&#8221;


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## Neo

*Delays drive up Mittals project costs​*
NEW DELHI, Sept 10: Steel giant Arcelor Mittal said on Wednesday delays in obtaining approvals for its two Indian plants had pushed up costs by 50 per cent but the company was still committed to investing in the country.

Arcelor Mittal, the worlds largest steel firm, said its planned integrated steel plants in mineral-rich Orissa and Jharkhand states were facing big cost overruns due to delays in getting mining, land acquisition and other approvals.

When we started, we estimated they (the two plants) would cost about $20 billion, Arcelor Mittal chief executive officer Lakshmi Mittal told reporters in the Indian capital.

But there has been a delay for two years so costs have gone up by 50 per cent, he said. The more the delay, the more the cost overruns. The steel tycoons statements came as India slipped two notches to 122 out of 181 countries in the World Banks annual global ranking of the easiest places to do business.

At the same time, India-born Mittal, who was in New Delhi for a company meeting, said Arcelor Mittal was still very excited about our (eastern) Indian projects and added he was emotionally committed to the country. Analysts say Arcelor Mittal is keen on using low-cost facilities in emerging markets to cut production costs.

Neither Arcelor Mittals experience nor the bitter dispute over the building of a Tata Motors plant in West Bengal slated to produce the worlds cheapest car detracted from Indias appeal as an investment destination, Mittal said.

A slew of Indian business leaders have warned that violent demonstrations demanding return of farmland acquired for the Nano car plant in Marxist-ruled West Bengal will damage the countrys investment allure.

One can face this kind of problem in any other country, Mittal said. But the country as a whole is interested in growing. He said he had no idea when the plants, which would have total capacity of 25 million tons annually, would get the green light, but the company had set up an office in Kolkata and whenever we have approvals the projects can move fast. In the meantime, Arcelor Mittal was working with local communities to explain the training and job benefits of the projects, he said.

This is not a one-way process... this will reduce the anxiety of the people, he said.

India has never seen this kind of investment in the infrastructure, he added.

Large industrial projects, which Indian politicians say are vital to creating jobs in the country of over 1.1 billion people, have faced huge local opposition with farmers objecting to loss of their land.AFP


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## Neo

*Indias core infrastructure growth slumps​*
NEW DELHI, Sept 10: Growth of Indias core infrastructure industries, such as crude oil slumped in July, official data showed on Wednesday, stoking concern about an already slowing economy.

Growth of the six core infrastructure industries, which account for 26.7 per cent of industrial output, accelerated by 4.3 per cent in July, down from 7.2 per cent in the same month a year earlier, commerce ministry data showed.

The six sectors making up the core infrastructure index are crude oil, petroleum refinery products, coal, electricity, cement and finished steel.

Crude oil production shrank by three per cent in July compared with growth of 0.9 per cent in the same month a year earlier.

Indias economy has been expanding by at least nine per cent for the past three financial years but is expected to slow to 7.7 per cent in the year to March 2009, according to the governments Economic Advisory Council.

Recent data showed first-quarter to June economic growth eased to 7.9 per cent, the weakest pace in three-and-a-half years, as successive interest rate hikes to tackle double-digit inflation hit demand.

Hefty borrowing charges and a surge in prices  inflation has nearly tripled in the past year to 12.34 per cent  have discouraged purchases of consumer and other goods, economists say.


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## Neo

*End to India nuclear isolation opens huge market ​*
By Penny MacRae 

State-owned Nuclear Power Corp of India Ltd is getting ready to place orders that will form the first phase of the countrys plan to build 40,000 megawatts of nuclear capacity by 2020

THE end to Indias nuclear pariah status paves the way for atomic fuel and technology sales worth tens of billions of dollars and companies are racing to exploit the market, officials say.

A host of companies - from Westinghouse Electric Co and General Electric of the United States, Frances state-controlled Areva to Russias atomic energy agency Rosatom - have been jockeying for a slice of Indias lucrative civilian nuclear technology market and more are poised to join the fray.

This is a huge business opportunity for India as power is a booming sector requiring maximum investment, Venugopal Dhoot, who heads consumer goods-to-energy firm Videocon Group, told reporters on Monday. Videocon is one of some 40 Indian companies seeking to negotiate nuclear power joint ventures with foreign firms, said Dhoot, past president of Indian business lobby Assocham.

The Nuclear Suppliers Group (NSG), which controls the sale of nuclear technology, on Saturday cleared civilian nuclear commerce with India - a key step in sealing the India-US atomic technology accord signed by US President George W. Bush and Indian Premier Manmohan Singh in 2005. The decision - ending a 34-year embargo - gives India the right to buy nuclear reactors from abroad and access to nuclear fuel on the global market. The US-India Business Council, one of the champions of the nuclear pact between New Delhi and Washington, said the NSGs decision could unlock nuclear energy investment in India worth more than 100 billion dollars.

Indias existing civilian nuclear power programme generates only 3,500 megawatts of electricity due to lack of access to much-needed fuel, said the groups president, Ron Somers. India plans to increase this capacity to 30,000 to 60,000 megawatts over the next 20 years by acquiring fuel from the Nuclear Suppliers Group countries for its civilian nuclear energy programme - at a cost exceeding 100 billion dollars, he said.

State-owned Nuclear Power Corp of India Ltd - the monopoly nuclear power generator - is readying to place orders that will form the first phase of the countrys plan to build 40,000 megawatts of nuclear capacity by 2020, according to Indian media reports. According to US forecasts, India will import at least eight nuclear reactors by 2012.

Energy-hungry India, where many areas endure blackouts lasting 12 hours or more, has been denied access to foreign civilian nuclear technology since it tested a nuclear weapon in 1974 and refused to sign the Nuclear Non-proliferation Treaty. The ruling Congress party has been seeking to broaden Indias energy sources as it seeks to keep the countrys fast economic growth on track. Currently, thermal fuel provides 70 percent of Indias energy while 20 percent comes from hydro-electricity. Nuclear energy accounts for just two to three percent, which India is aiming to boost to five to seven percent by 2030. Technically, as a result of the NSGs decision, India now is free to trade on the world market. But India said late Monday it would seek to clinch international nuclear deals only after the India-US atomic agreement is cleared by the US Congress.

India will enter into trade with supplying countries through bilateral agreements after Congress ratifies it, Foreign Minister Pranab Mukherjee said in New Delhi. The deal has been held up as a high-water mark of growing strategic ties between Washington and New Delhi.

Mukherjees pledge came after US Secretary of State Condoleezza Rice urged India not to disadvantage American companies should the deal hit a roadblock in this session of Congress, which winds up at the end of this month. But in the meantime, India can hold informal talks for nuclear reactors. On Monday, a British nuclear power industries delegation arrived in India to explore the market. Weve discussed lots of possibilities for nuclear trade between India and UK, Indias Minister of State for Industry Ashwani Kumar said after meeting the delegation. afp


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## Neo

*Indias annual inflation seen at 11.96% on Aug 30 ​*
MUMBAI: Indias annual inflation rate is expected to have eased for the third consecutive week, with respite provided by softening of global crude prices, a Reuters poll showed on Wednesday.

The wholesale price index is forecast to have risen 11.96 percent in the 12 months to Aug. 30, lower than previous weeks rise of 12.34 percent, according to the median estimate of 13 economists.

In early August, the inflation rate was 12.63 percent, the highest reading since annual numbers in the current data series became available in April 1995.

Shubhada Rao, chief economist at Yes Bank, who forecast 11.96 percent said a relatively higher reading a year earlier would also limit the number.

Recent weeks have seen inflation stabilise. We expect it to peak in the third quarter and given the current trend it may peak around 13 percent, she said.

New central bank governor Duvvuri Subbarao said on Tuesday inflation was showing signs of moderating but it was too early to conclude whether this was a trend, signalling he would wait and see before taking any fresh steps.

This would be the 23rd consecutive week that inflation would be above the central banks 7 percent target by the end of March. The government has said the inflation rate would hit 13 percent and thereafter start moderating from December, before settling at 8-9 percent by the end of the fiscal year in March.

A slide in prices of oil, Indias biggest import, to around $104 a barrel from a record high above $147 in mid-July, is expected to ease the pressure on inflation. reuters


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## Neo

*Indias July industrial output seen up 6.5% y-o-y ​*
NEW DELHI: Indias industrial output in July probably rose 6.5 percent from a year earlier, more than in recent months but still consistent with a slowing economy, a Reuters poll showed. The median forecast in a poll of 10 analysts exceeded the 5.4 percent annual growth in June and Mays 4.1 percent, although the pace of industrial growth remains well below the double-digit rates of 2006 and early 2007. Industrial slowdown is here to stay and in our view it is yet to be bottomed out, said N.R. Bhanumurthy, economist at the New Delhi-based Institute of Economic Growth. We expect the present double-digit inflation rate and its associated high interest rates to continue at least until the end of this year. This would dampen investments. Reflecting some moderation in manufacturing, the ABN AMRO Bank purchasing managers index (PMI) eased to a seasonally adjusted 57.8 in July from a four-month peak of 58.6 in June.

Data on Wednesday showed the infrastructure sector, which accounts for 26.7 percent of industrial output, grew an annual 4.3 percent in July, up from 3.4 percent in June. After growing at or above 9 percent for the past three fiscal years, Indias economy is slowing. In the June quarter, Asias third-largest economy grew 7.9 percent from a year earlier, its slowest rate in 3-½ years. reuters


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## muse

*Sensex plunges by 772.62 points *


Mumbai (PTI): The BSE benchmark Sensex today plunged by 772.62 points at 1045 hrs following bankruptcy protection filed by US investment bank Lehman Brothers and weak Asian bourses. 

The Singapore's Strait Times and Taiwan Weighted Index were down by about 3 to 4 per cent in early trade while other major markets in Asia like as Hong Kong and Japan remained closed for a public holiday. 

The Bombay Stock Exchange 30-share barometer tumbled by 772.62 points or 5.5 per cent to rule at 13,228.19 from its last weekend's close after banking stocks led by ICICI and HDFC Bank slipped sharply. 

The broader 50-share Nifty of the National Stock Exchange also dipped below 4,000-mark by falling 242.40 points or 5.56 per cent to 3,986.05. 

A terror strike in the national capital over the weekend also had adverse impact on the market sentiment. Investors looked unwilling to make any transactions in the prevailing market situation. 

Brokers said the collapse of Lehman Brothers and worries of a severe economic recession in the United States virtually shook the global financial markets. 

Key stocks such as ICICI Bank, HDFC Bank, State Bank of India, BHEL, RIL, Bharti Airtel, DLF, HDFC, Infosys Technologies, ONGC and Reliance Infra dropped sharply due to heavy selling pressure. 


Perhaps some gentle Indian friends will explain what relationship SenSex has with Lehman Bros -- 

What relations is the US allowing Lehman to go under mean for the idea of "privatizing profits and socializing loss"


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## nitesh

Bangalore designs Intel Xeon 7400 - Hardware-News-Indiatimes - Infotech

Bangalore designs Intel Xeon 7400 
16 Sep, 2008, 1153 hrs IST,INDIATIMES NEWS NETWORK & AGENCIES

SAN FRANCISCO: Intel has rolled out its first chip with six brains, unveiling a "multi-core" microprocessor that boosts computing muscle while cutting back on electricity use. The new Xeon 7400 series microprocessor has been designed by none other than Intel engineers at Bangalore from scratch. 

The Bangalore design centre is the first Intel team outside the US to complete the design of a 45-nanometer processor. 

Post its inception in 2001, the Xeon 7400 series is the first chip to come out of Intel's Bangalore design centre. The centre had previously worked on another Xeon server chip called Whitefield. 

But that chip never made it to market. It was cancelled in 2005, when Intel revised its product road maps to better compete with Advanced Micro Devices, and the Indian design team soon put its focus on Dunnington. 

The Dunnington chip design marks a technical milestone for Intel, as it uses a monolithic die, the term engineers use to describe putting all of the cores on a single piece of silicon. 

Intel's existing quad-core processor lines use two pieces of silicon, each with two cores, packaged together. That approach made the older quad-core chips easier to produce and avoided the manufacturing difficulties that hampered the release of AMD's Barcelona chip, an x86 server chip with four cores on a single piece of silicon. Those difficulties were compounded by AMD's transition to a new 65-nanometer manufacturing process. 

With the introduction of Dunnington, and the upcoming Nehalem line of quad-core processors that also uses a monolithic design, Intel waited until its 45-nanometer process was in mass production, with any technical difficulties presumably ironed out, before making this transition. 

"When developers ask you for something you can pull it out of the air, literally," VeriSign engineering director John Bosco said of virtualisation made possible by multi-core chips. 

Multi-core chips basically allow computers to divvy up tasks to work on simultaneously instead of having a single powerful processor handle a job in a linear style from start to finish. 

"It helps keep things exciting. Our development community has embraced the multi-core era," Bosco said. 
Dell, Hewlett Packard, IBM, Unisys and Fujitsu are among the computer makers building the new Xeon 7400 chips into servers designed for business networks, according to Intel.


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## nitesh

Rupee posts biggest fall in a decade- Forex-Markets-The Economic Times
MUMBAI: The rupee posted its biggest fall in a decade on Tuesday, hit by risk aversion and banks arbitraging a weaker offshore rate, although suspected central bank intervention stopped the slide just short of 47 per dollar. 

The partially convertible rupee ended at 46.89/90 per dollar, off a trough of 46.99 which was its lowest since July 24, 2006. 

The rupee fell 1.8 percent from its close of 46.05/06 on Monday, its biggest fall since May 14, 1998, according to Reuters daya, when the currency fell 2 percent after sanctions were imposed on India for its nuclear testing. One-month offshore non-deliverable forward contracts were quoting at 47.15/25, weaker than the onshore rate, indicating a bearish near-term outlook for the rupee. 

That also created an arbitrage opportunity, where the dollar is bought against the rupee in the onshore market and sold in the offshore NDF market to exploit the price differential. "There are no (dollar) sellers in the market apart from the central bank. There is lot of oil, equity and NDF-related dollar demand, and even importers are covering near-term imports," said Madhusudan Somani, associate director of financial markets at Yes Bank. 

"The rupee may test 47.20-25 levels in the near term," he added. Dealers said the central bank was seen selling dollars to halt the rupee's sharp decline, but sales were offset by demand for the US currency. At its low on Tuesday, the rupee was down 6.5 percent in September and more than 16 percent in 2008. Dealers estimated the central bank had sold $1.5-$2 billion to put a floor under the rupee on Tuesday. 

Indian shares pulled out from a nosedive to end almost level on Tuesday after they had opened down 3.5 percent. Capital outflows from the local shares so far in 2008 total a net $8.4 billion, including $1 billion in September, a sharp turnaround from a record net inflows of $17.4 billion in 2007. 

Traders said broad strength in the dollar versus other currencies overseas was also hurting sentiment on the rupee. The dollar steadied near 4-month lows versus the yen on Tuesday, but held gains against high yielders as investors took refuge in safe-haven assets following the collapse of Lehman Brothers.


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## Marshal

*Iran to Seek Revision of Gas Tariff; IPI Pipeline All Set for Further Delays*

In a move that could lead to further delay in the USD 7.4 billion Iran-Pakistan-India (IPI) pipeline project, Tehran has demanded a revision in the gas tariff and the pricing formula agreed upon earlier. Iran has sought a change in the gas pricing formula and tariff citing a hike in international oil prices, a media report has said.

According to the draft of the Gas Sales Purchase Agreement (GSPA) agreed upon by Islamabad and Tehran, the two sides had decided to link the gas tariff with the Japan Crude Cocktail price. While the Pakistani government claims that a revision in the gas price would be possible only after four years, Iran has conveyed its intentions to revise the formula after three years, the Daily Times newspaper said quoting sources in the Petroleum Ministry.

The project has been marked by delays after India and Pakistan failed to resolve the issue of gas transit fee. A committee formed by the Iranian President to resolve the transit fee issue between Pakistan and India had failed to find a solution, sources said, adding, Pakistan had demanded 60 cents per MMBTU (Million British Thermal Units) transit fee during the talks here on April 25 between the petroleum ministers of the two nations.

They said New Delhi was unwilling to give over 15 cents per MMBTU transit fee to Islamabad on transmission to India. Pakistan and Iran will discuss the gas pricing formula in Tehran later this month during a meeting, which is also likely to discuss issue of transit fee between Pakistan and India.

Earlier, both Pakistan and India wanted a fixed price for the gas imported from Iran, but the caretaker government in Pakistan had agreed to a periodic revision of gas prices.
Iran to Seek Revision of Gas Tariff; IPI Pipeline All Set for Further Delays | India Defence


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## Marshal

*Iran to Seek Revision of Gas Tariff; IPI Pipeline All Set for Further Delays*

In a move that could lead to further delay in the USD 7.4 billion Iran-Pakistan-India (IPI) pipeline project, Tehran has demanded a revision in the gas tariff and the pricing formula agreed upon earlier. Iran has sought a change in the gas pricing formula and tariff citing a hike in international oil prices, a media report has said.

According to the draft of the Gas Sales Purchase Agreement (GSPA) agreed upon by Islamabad and Tehran, the two sides had decided to link the gas tariff with the Japan Crude Cocktail price. While the Pakistani government claims that a revision in the gas price would be possible only after four years, Iran has conveyed its intentions to revise the formula after three years, the Daily Times newspaper said quoting sources in the Petroleum Ministry.

The project has been marked by delays after India and Pakistan failed to resolve the issue of gas transit fee. A committee formed by the Iranian President to resolve the transit fee issue between Pakistan and India had failed to find a solution, sources said, adding, Pakistan had demanded 60 cents per MMBTU (Million British Thermal Units) transit fee during the talks here on April 25 between the petroleum ministers of the two nations.

They said New Delhi was unwilling to give over 15 cents per MMBTU transit fee to Islamabad on transmission to India. Pakistan and Iran will discuss the gas pricing formula in Tehran later this month during a meeting, which is also likely to discuss issue of transit fee between Pakistan and India.

Earlier, both Pakistan and India wanted a fixed price for the gas imported from Iran, but the caretaker government in Pakistan had agreed to a periodic revision of gas prices.
Iran to Seek Revision of Gas Tariff; IPI Pipeline All Set for Further Delays | India Defence


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## Flintlock

*India's hardware design prowess on the global map*
Bs Reporter / Bangalore September 17, 2008, 3:37 IST
*
A Bangalore-based team has developed the Intel Xeon 7400 series processor, which is Intels first six-core central processing unit.*

India's hardware design capabilities have got a shot in the arm with the launch of semiconductor giant Intel's next generation microprocessors, which were fully designed by the Intel India development team here. The project that was started almost two years ago with a team of around 300 design engineers was finished two months ahead of the schedule.

INTELS INDIA CONNECTION

# Intel started its India operations in Bangalore in 1988
# The Bangalore-based Intel India Development Centre (IIDC), Intels largest non-manufacturing site outside of the US, started operations in 1998
# Intel Indias workforce has grown from 100 employees in 2000 to about 2,500 in 2007
# Intels investments in India to date have been over $1.7 billion
# The product development teams at IIDC contribute significantly to most of Intels products and platforms

Smaller than the size of a matchbox, each microprocessor contains 1.9 billion transistors, which makes it suitable for companies that handle a heavy amount of data. Formerly codenamed Dunnigton, the Intel Xeon 7400 series processor is Intels first six-core central processing unit (CPU). Such servers can be deployed to handle data demanding workloads in sectors such as BFSI, telecom and the stock market, according to K Ananth Krishnan, CTO, Tata Consultancy Services, which helped in conducting the validation and testing of the microprocessors.

Internally, TCS is planning to use the servers that use Xeon 7400 series microprocessors. According to Intel, more than 50 system manufacturers including Dell, Fujitsu, Hitachi, HP, IBM and Sun are soon expected to launch servers based on the Xeon 7400 processor series.

The previous generation of microprocessors had four processing units (cores) in each chip. Three years back, for 96 CPUs you would have had to install 96 servers, which would have occupied a lot of space. "But now we can have the same computing power in one server, which will not only consume less area, but less power as well. Besides, when compared with the previous generation Intel processors, the power consumed by Xeon 7400 microprocessor will be at least 10 per cent less," explained R Ravichandran, director, sales, Intel South India.

The six-core microprocessor features six processing cores built into each chip with 16 MB of shared cache memory. This makes the servers that use such microprocessors suitable for handling intensive enterprise applications such as databases, business intelligence, enterprise resource planning and server planning.

Intel India started focussing on hardware design almost six years back. The design of Intel's first six-core Xeon microprocessor was completed on August 15, 2007, when India was celebrating its 60th year of independence. The Intel India team planned and executed the complete design activities including front-end design, pre-silicon logic validation and back-end design. The post-silicon validation, which test the market readiness and the product performance, was also undertaken at Intel's Bangalore facility.

"We are really enthralled to be a part of the team that worked with this complex project which earned us the distinction of designing India's first microprocessor productised for the global market. This is, in fact, a great day for semiconductor research and development in India," said Praveen Vishakantaiah, president, Intel India. "Going forward, India would continue to be a strategic location for high-end technology development for Intel globally," he added.

India&#39;s hardware design prowess on the global map

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## Flintlock

*

Small fry to build big canals under Vibrant Gujarat*
16 Sep 2008, 0519 hrs IST, Rajiv Shah ,TNN


GANDHINAGAR: Vibrant Gujarat wants to dot some of state's major canal networks, including the Narmada main canal, with mini-micro-hydro power projects. And imagine whom does it propose to choose for this - a company called Krishna Kanhaiya Hydro Power Pvt Ltd, owned by a UK-based NRI Riyen Ramani.

Already, it has earned a contract worth Rs 18 crore to start building mini-microhydro power projects on the canal coming out of Karjan dam, lying dormant for nearly three decades.

One of its directors has been an ex-Congress MLA from Mandvi, who even today takes rounds of Sachivalaya to pursue the case for Krishna Kanhaiya, admits that when the company was founded three or four years ago its worth was a mere Rs 1 lakh.

Yet, it signed up two memoranda of understanding (MoUs) with the state government at the Vibrant Gujarat summit in January 2005 - for micro hydropower plants on Narmada canal for Rs 146.1 crore and on Karjan canal for Rs 22 crore.

After the contract for Karjan canal was cleared early this year, the Gujarat Infrastructure Development Board (GIDB) began the process of clearing the file of the company for having micro-hydro powers on Narmada main canal in central Gujarat, Saurashtra and Kutch.

The file was sent to the GIDB by the Sardar Sarovar Narmada Nigam Ltd (SSNNL) after irrigation minister Nitin Patel personally intervened in the matter . Ex-MLA , Chhabilbhai Patel, who is close to Union textile minister Shankarsinh Vaghela, claims, "Today, the company's worth is Rs 10 crore."

Significantly, the company has been chosen not after floating open competitive bids. Sachivalaya sources said, the company was allowed to go ahead with the project to have mini-micro-hydro power plants after it put forward the proposal for what is called 'Swiss route' or the 'challenge route' .

Under this, the GIDB, chaired by Chief Minister Narendra Modi, allows a 'goahead ' to the companies that come up with 'unique projects' . They need not go through the tedious bidding process.

A senior official said, 'When Krishna Kanhaiya came up with its proposal exercising the Gujarat Infrastructure Development Act's Swiss route, it did not submit financial or technical parameters. Nor did it submit details of equity or bank balance. Even today, the state government has no such details. Yet, there is a possibility that it may be cleared. If it happens, it would be a Vibrant Gujarat miracle, of allowing a company founded on Rs 1 lakh equity to do Rs 200 crore business." 

Small fry to build big canals under Vibrant Gujarat -Ahmedabad-Cities-The Times of India


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## nitesh

Rupee rises by 62 paise against US dollar
17 Sep 2008, 1135 hrs IST,PTI 

MUMBAI: The Indian rupee rose by 62 paise to 46.27/28 against the US currency today as the Reserve Bank of India (RBI) announced measures to ease the liquidity crunch and bolster the sliding currency. 

In a bid to prevent any further adverse impact on the local markets of the turmoil in the global financial markets, the central bank on Tuesday decided to allow banks to borrow more by relaxing the statutory liquidity ratio (SLR). The apex bank also expanded the liquidity adjustment facility scheme. 

In response to a series of forex measures, the domestic currency resumed stronger at 46.38/40 a dollar from its last close of 46.89/90 and later jumped to 46.27/28 a dollar in late morning deals at the Interbank Foreign Exchange (forex) market. 

Forex dealers said the rupee bounced back with a vengeance as foreign banks sold dollars heavily after the RBI's steps to cool the financial markets. 

The rupee had fallen by a huge 84 paise or 1.82 per cent yesterday reacting negatively to fall-out of the on-going credit crisis in the US. 

The local unit had lost 229 paise or 5.13 per cent, in the last six days amid heavy capital outflows and heavy dollar demand. 


Rupee rises by 62 paise against US dollar-India Business-Business-The Times of India


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## nitesh

RTTNews - Economic News, Economic Reports, Global Economic News,Global Economic Reports, Economic Market Analysis...

Despite global woes, India's growth rate will exceed 8&#37; this fiscal year, the Prime Minister said on Wednesday at the two-day governors' conference in New Delhi. "The overall growth rate of the economy will still exceed 8%, making India the world's second fastest growing economy," he said. Earlier, the PM's Economic Advisory Council, in its mid-year review, had pegged economic growth to slow down to 7.7% this fiscal year, substantially lower than the 9% growth achieved in 2007-08. 

Manmohan Singh said there are signs of moderation in the high inflation and expressed confidence that the situation will improve further in the coming months because of the measures the government has taken. Prices in the domestic markets have been rising because of the steep increase in import prices of petroleum products and other commodity prices, he said. However, Singh warned that the world is entering a decade of rising commodity prices, particularly in the case of food grains. So India must pay adequate attention to self-sufficiency in food grains, he noted.


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## nitesh

Quiet Revolution | Print Article | Newsweek.com

Quiet Revolution
While Asia reels from a food crisis, India is benefiting from three years of investment in farming.

Jason Overdorf
NEWSWEEK WEB EXCLUSIVE
Sep 12, 2008 | Updated: 11:24 a.m. ET Sep 13, 2008
The food crisis earlier this year hit developing countries particularly hard, but India has fared surprisingly well. That's partly because India had already gone through a crisis of its own, three years ago, when surpluses were depleted; agricultural output was hardly growing; and farmers were committing suicide in record numbers. For this reason, agricultural productivity has been a hot-button issue for Prime Minister Manmohan Singh. To keep his party in power, Singh needed not only to increase food production, but also to increase farmer incomes and end a debt crisis. Despite these gains, India lags behind China and Vietnam in productivity. P.K. Joshi, director of the New Delhi-based National Centre for Agricultural Economics and Policy Research, spoke with NEWSWEEK's Jason Overdorf about the challenges India faces. Excerpts:

NEWSWEEK: India produces only about half as much rice per hectare as China, the world's largest producer, and just about a third less than Vietnam. Why are India's crop yields so low?
P.K. Joshi: We need not compare China's yield and India's yield, because of several reasons. The first reason is that India is a very heterogenous country, from irrigated area to rain-fed area and rice is also grown in very marginal areas. So the average productivity seems to be very low. If we look to our irrigated areas, the yields are very high compared to any part of the world, and in rain-fed areas they are low because of less water and other factors. In China, they are using more than two-and-a-half times [the fertilizer that] Indian farmers are [using]. And China is growing hybrid rice, which has very high potential, and because of their governance system, they distribute the seed, and the farmers have to produce that variety.

In India, we have a democratic society, and the farmer is free to choose any variety or any hybrid. If the farmer has enough money to buy good seed, he does. But if not, he uses his own seed (from the year before). Another reason is the length of growing season. You know, in China, they take one crop per year. If you see our farmers, in Punjab they are growing rice and wheat in one year. In Haryana, rice and wheat. In some parts of West Bengal, the entire Indo-Gangetic Plain, three rice crops are being taken up per year. So if you compare the double crops, it will be on par with the Chinese one crop per year.

Should India be doing more to encourage farmers to use hybrids? 
Yes, definitely. If we are speaking particularly about rice, then I would say that in rice, the hybrids have very high potential. There's a difference between high yielding varieties and hybrids. A hybrid is a cross between two different male and female plants, but the varieties are self-pollinating, so the hybrid has higher potential.

One issue for India's agricultural productivity appears to be water scarcity. Does India need more irrigation projects? 
We do not have a water scarcity. But the issue of water management is important. We need to harvest water; use it more appropriately, use it more judiciously.

Has India invested sufficiently in agriculture, or has it fallen behind China and other Asian nations?
These countries are investing huge in agricultural research and also in agricultural development programs. In India, we [used to have] a huge surplus--if you go only six years back we used to have a huge buffer stock [of food grains]. [Unfortunately] we wanted to get rid of that buffer stock, either by subsidizing food or through many different social safety net programs. We started reducing poverty through these distribution programs, so investment in agriculture was reduced. And I would tell you that right now, this government has started increasing investment in agriculture, but it's still lower than what it used to be in 1970, if we compare in terms of percentage of agricultural GDP.

Why hasn't India been able to boost agricultural investment further? Singh has talked about this as a big issue since he came into office.
During the last three years, a lot of investment has been done in the agriculture sector because there was a serious crisis in Indian agriculture three years ago. Everybody was talking about agrarian distress. Farmers were committing suicide. And agricultural growth was less than 2 percent, while the target was 4 percent and more. The government [made] agriculture [a top] priority. Investment started increasing. Programs were tuned to increase agricultural production. [Prices were controlled] so they didn't rise as quickly as they did in the global market. The result was that when there was a serious food crisis around the world this year, India was almost comfortable. We were importing wheat two years ago, but for the past two years we have not thought about importing wheat. We now have a surplus in rice as well as wheat.

For several years, the growth rate of India's agricultural output has been slow. Apart from more investment, what does India need to do to rejuvenate the green revolution?
We expect the same kind of green revolution, which we witnessed in the mid 60s and early 70s. But we have an unnoticed revolution in Indian agriculture. If you look at sugar production, if you look at cotton, or dairy milk production, poultry or fish, or horticulture--which is vegetables and fruits, even maize--you see that the production of these commodities has remarkably increased. Also, you will notice that this year we had record food grain production--230.5-million tons. We have not seen that kind of food production during the green-revolution days. At that time, the reason we realized it was a revolution was that we were hungry. There was a famine in 1966, and suddenly production increased. Now that kind of hunger is not there, so we are ignoring the increase in production.

The introduction of genetically modified crops has been a controversial topic in India. Why are Indian farmers and activists concerned about GM foods? 
Among activists, the apprehension is that [GM crops] may adversely affect [human] health. There's no evidence so far, globally, that it will. But activists [worry about] playing with nature and using genes from other organisms to change another species. The proponents feel that the future lies with these genetically modified crops, because the [cultivation] area is shrinking for crops, and you have to increase production. Production can be increased only by increasing productivity.

Even during the green revolution period, when high-yielding varieties came, there was a lot of apprehension. I still remember in 1967-1968 activists saying that it would create [stomach ulcers and that] the taste is not good. From the health point of view, the nutritional point of view, there was no negative effect during the green revolution. So may be the case with genetically modified commodities.

A lot of farmers seem to be shifting from essential grains to horticulture and cash crops to take advantage of the end consumer's higher spending power. Is it a concern from a food security standpoint that they're switching away from food grains?
As our incomes are increasing, as urbanization is taking place, as globalization is unfolding, the demand of the consumers is shifting away from cereal based diets to high-value commodities or processed commodities. Horticulture crops like fruits and vegetables have increased, milk products have increased. You now see lots of ice cream parlors--demand for processed dairy products [is rising]. Farmers are responding.

All these commodities are perishable in nature. If there is a sudden increase in production, there is a flood in the market and prices crash like anything because farmers cannot store these commodities. So what we need are good cold-storage facilities, we need the cold chains [to refrigerate products on the way to market]. And I feel that the government alone can't develop so many cold storage facilities or these cold chains. The participation of the private sector is very important, in this context, to integrate the markets.

Why does so much of India's agricultural production spoil on the way to market or in storage? I've read some estimates that peg the waste as high as 40 percent.
Largely, it is the perishable commodities. In the case of grains, it is only through rats and rodents and some storage problems. But in perishable commodities the waste is extreme. This is because the markets are not well integrated; there are missing markets; the roads are not good.


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## nitesh

India insulated from the US crisis: FM - Express India

New Delhi, September 18: Finance Minister P Chidambaram on Thursday said that there is no cause of concern for public sector banks as they have no exposure in US-based financial institutions, which are in deep credit crisis.
"Our banking institutions are insulated from the US crisis. PSU banks have virtually no exposure while ICICI Bank has some," he said in New Delhi.

Chidambaram was replying to queries on the fallout of global financial crisis precipitated by the collapse of Lehman Brothers and buyout of Merrill Lynch by the Bank of America.

The Finance Minister further said that there would be some credit tightening, but the Reserve Bank of India (RBI) is seized of the problem.

On the fate of Tata insurance venture with the American Insurance Group, which has been taken over by the US government, Chidambaram said the Tatas have assured insurance regulator IRDA that all Tata-AIG payment obligations will be met.

Country's largest private sector lender ICICI Bank has reported an exposure of Rs 375 crore in the senior bonds of Lehman Brothers Inc.

ICICI Bank has said its London subsidiary has 57 million euro (about Rs 375 crore) exposure in Lehman Brothers which has filed for bankruptcy protection.


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## Neo

*Indias inflation stubborn at 12pc​*
NEW DELHI, Sept 20: Indias inflation rate has held stubbornly above the 12 per cent mark, official data showed on Thursday.

Annual inflation was at 12.14 per cent for the week ended September 6 from 12.10 per cent a week earlier, according to the Wholesale Price Index, Indias most watched cost-of-living monitor.

The figure was roughly in line with analysts forecasts and still far above the central banks target of seven per cent for the fiscal year to March 31, 2009.

Analysts say they expect Indias central bank to tighten monetary policy at least one more time to get inflation under control before gradually starting to lower interest rates, most likely in 2009.

We are seeing rangebound inflation, but it may not be fully out.

We expect inflation to remain in double digits till the year end, said Siddhartha Sanyal, economist with brokerage Edelweiss Securities.

The next monetary policy announcement is scheduled for October 24.

Inflation, stoked by a rise in energy, food and other commodity prices, has nearly tripled from a year ago, and is now riding at its highest levels since the current inflation series began being compiled 13 years ago.AFP


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## Neo

*India aims for another record wheat crop in 2009 ​* 
Tuesday, September 23, 2008

NEW DELHI: India is aiming for a bigger wheat harvest in 2009 than this years record with help from better seeds and fertilisers, and trade officials say the target is achievable and would help keep global supplies steady.

A bumper harvest in the worlds second-largest grower should ease concerns of shortages after dry weather hurt the crop in Australia, and Argentina, the worlds No 4 exporter, estimated the area planted with wheat would shrink to a 16-year low.

In India, a record output of 78.4 million tonnes of wheat this year and prospects of a bumper rice crop have calmed fears of food scarcity and encouraged the government to ease some curbs on rice exports and allow shipments of seeds of wheat.

India, which imported 5.5 million tonnes of wheat in 2006 and over a million tonnes in the following year, has set a target to produce 78.5 million tonnes next year, a government statement said on Monday. 

The country aims to boost output to 80 million tonnes by 2011, but officials say more farmers need to use high-yielding varieties of seed, and have better access to irrigation facilities and fertilisers. In high productivity areas, wheat yields seem to be plateauing, the government statement said.

India grows only one wheat crop in a year. Farmers start sowing the main winter-planted crop in October and September and harvest the crop in March. Trade officials say if overall weather conditions remain good and temperatures do not rise in February, the country would be able to meet the production target.

It is a reasonable target, said M K Duttaraj, president of the Roller Flour Millers Federation of India. The main concern is weather and if that remains good, I do not think there will be a problem in achieving that. 

Duttaraj said good June-September monsoon rains had improved soil texture and moisture, helping farmers improve yields. Finance Minister Palaniappan Chidambaram said on Monday that he hoped India would soon remove some controls on rice exports. India banned exports of non-basmati rice earlier this year, but this month allowed shipments of Pusa-1121 variety.


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## nitesh

South Korea, India strike free trade deal -Seoul | Reuters

SEOUL, Sept 26 (Reuters) - South Korea and India have reached a free trade deal that could boost their $11 billion annual trade by as much as a third and sharply raise South Korean auto part makers' share of one of the world's fastest-growing markets.

South Korea's trade ministry said on Friday that the two countries had concluded 2-&#189; years of talks with an agreement to open up their markets and plan to put it into effect next year.

The deal has to be ratified by both countries' legislatures.

South Korea has free trade deals in place with Chile and Singapore and is awaiting ratification of a trade deal with the United States that it signed in June last year.

*"India is negotiating free trade deals with Japan, the EU and China, and by reaching a deal ahead of them, we expect to be effective in winning a greater market share,"* the ministry said in a statement.

*A study by the state-run Korea Institute for International Economic Policy said the pact could boost annual two-way trade by $3.3 billion and South Korea's GDP by 1.3 trillion won ($1.1 billion).*

*South Korea's main exports to India are automotive parts, petroleum products, synthetic resins and mobile phones. Its largest import from India is naphtha, representing more than half of imports from India in 2007. (Reporting by Jack Kim; editing by Jonathan Hopfner)*


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## Neo

* Indians lead world in millionaires growth​*
MUMBAI, Sept 26: India is minting new millionaires at a faster pace than anywhere else in the world, buoyed by a fast-growing economy, according to a new study.There were an estimated 123,000 millionaires in India at the end of 2007  22.7 per cent more than in the previous 12 months, said the Asia-Pacific Wealth Report, compiled by US investment bank Merrill Lynch and consultants Capgemini.

Despite dislocations in developed markets, the number of high net worth individuals in India grew at a faster rate than the global average, said Pradeep Dokania, head of Global Wealth Management for DSP Merrill Lynch.

Domestic demand and Asias appetite for commodities continue to drive wealth accumulation in India, he said.

China was the second in the millionaire stakes.

It had a millionaire population growth of 20.3 per cent in the same period followed by South Korea with 18.9 per cent.

The figures, released late on Thursday, assessed the wealth of so-called high net-worth individuals (HNWIs) as people with more than one million dollars in net assets  excluding primary residences.

In 2007, the standout markets in the Asia-Pacific region were China and India, with the number of wealthy individuals, and their overall level of wealth, growing at a faster rate than the global averages, the report said.

Indias economy grew by nine per cent in the financial year to March 2008 while Chinas economy expanded by 11.9pc last year, well ahead of other industrialised countries who are feeling the effects of global market turmoil.

But growth is expected to slow this year in both countries, albeit to still strong rates.

In India, the countrys economy, which has drawn billions of dollars in foreign investment, has been losing steam as the central bank has aggressively raised interest rates to curb inflation now at 13-year highs.

Economic growth for the first quarter ending June slowed to 7.9 per cent, the weakest in three-and-a-half years.

Indias stock markets grew by 47.1 per cent in 2007, but the benchmark Sensex is down more than 33 per cent this year.

China meanwhile has seen growth slow to 10.1 per cent in the second quarter of this year.

Still Indias millionaire wealth trails behind China and Japan, the study shows, despite Indian tycoons like Mukesh and Anil Ambani who regularly feature on the Forbes magazine billionaire list.

Indias millionaires have a combined wealth of 440 billion dollars, compared with 2.12 trillion dollars in China and 3.8 trillion dollars in Japan.

China and Japan account for 62.4 per cent of Asias millionaire wealth, while Indias share is just 4.6 per cent.

But the report added: Although the number of emerging-HNWIs in China and India is still relatively small, we expect that within 10 years it will surpass the mature markets. As the impact of the US economic slowdown resounds across Asia, most of todays millionaires are likely to turn from equities and towards fixed-income securities that offer less volatile returns, the report said in its 2009 outlook.AFP


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## Marshal

*India will be first in Asia to rebound*http://sify.com/finance/fullstory.php?id=14765810

Thursday, 25 September , 2008, 09:21

India's domestically driven economy will be among the first in Asia to rebound, in mid-2009, but the run-up to that will be a "white knuckle ride" during which it will be vulnerable to the 'liquidity destruction' induced by the global credit crunch, according to CLSA Asia-Pacific Markets economists. 

*Weak economy, strong currency* 

"India is currently in the midst of a cyclical downturn, which is being led by the consumer sector but is broad-based," observes economist Sharmila Whelan. 

That downturn will run its full course without any early relief, but India will be Asia's early mover in terms of moving into the next business cycle because unlike the other economies, it is not export-driven. "We believe the worst will be over by mid-2009." 
*
India can sustain over 8% growth rate *

While that's the good news, it's not all rosy. "The bad news," says head of economic research Eric Fishwick, "is that until that recovery starts, India will prove surprisingly vulnerable to continued credit crunch and risk-aversion because it runs a current account deficit and needs to continually attract savings." India, he adds, also has a weak fiscal position and fiscal implementation problems; it also has a "relatively overextended domestic credit cycle". Lending has run ahead of GDP for five consecutive years, so there is likely to be more "balance-sheet strain" there than anywhere else. 

*More India business stories*

In Whelan's estimation, inflation is unlikely to peak soon or start coming down rapidly. "I expect inflation to peak in the fourth quarter of this year; it will still be running at 12% at the end of this year, and at about 8.5% at the end of the fiscal year." Beyond that, she expects it to come off steadily, with help from declining global commodity prices, to about 5.6% next fiscal. 

This also means that interest rates won't fall off quickly. "I'm looking for the first rate cut in the second quarter of next year, and I won't be surprised to see another rate rise in the interim." 

Although the RBI had been aggressively raising interest rates since 2004 to combat inflation, it was actually "behind the curve," says Whelan. "All of last year, the RBI was struggling to mop up excess liquidity, and money supply (M3) accelerated." The problem, was that the RBI was overwhelmed by capital inflows. 

Had it not been for the money inflows in 2006-07, however, the Indian economy would have rolled over 18 months earlier than it did, agues Fishwick. Going forward, "I'm particularly worried about the Indian rupee, which will remain under pressure, and test Rs 49/dollar." That's because the RBI's balance balance-sheet has grown at 25-26% y-o-y, which points to "a very loose monetary stances" - notwithstanding all those rate hikes. 

India's economic rebound, when it does happen, will be investment-led, and consumption growth effect will kick in after a lag, says Whelan. "The initial recovery from a trough starts when profit margins and profit growth recovers. At this stage, companies start investing retained earnings to upgrade existing capacity." Indian corporate, she adds, are well-positioned to finance investments. 

In the second stage of the investment-led cycle, "what you need to see is the return of risk appetite." A more bullish outlook will lead companies to leverage up." 

*More India business stories*

An additional factor that will inspire the Indian recovery is the government's $500 billion infrastructure spending plan. Even factoring in delays and other hurdles, this spending will reinforce the investment cycle, reckons Whelan. She is projecting 7.3% GDP growth for FY 2008 and 6.5% next year.


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## Neo

*India seen as third largest rubber consumer by 2020 ​* 
Sunday, September 28, 2008

MUMBAI: India is likely to surpass Japan to become the worlds third largest rubber consumer by 2020 driven by rising demand from the auto sector, but steady

production may force more imports, said a senior industry official. At present, India is the fourth largest consumer with a global market share of 5 per cent.

Total consumption by 2020 is likely to be more than double to 2.2 million tonnes from about 900,000 tonnes estimated in 2008/09, said Hidde Smit, secretary general of International Rubber Study Group, an intergovernmental organisation.

However, production is expected to increase only 37 per cent to 1.2 million tonnes during the period, he said on the sidelines of an industry conference.

Non-availability of land and delay in re-plantation is likely to affect the production, Smit said.

In India, high rubber prices are enticing growers to milk ageing plants and delay replanting, threatening to reduce yields by half in the long run.

Prices of the most traded RSS-4 (ribbed smoked sheets) rose about 38 per cent to touch a record high of 142 rupees per kg during Apr-Aug period, according to the Rubber Board data.

The board plans to replant 33,500 hectares by 2012, but has been able to cover only 5,000 hectares in the last year.

Rubber plants generally take seven years to be ready for tapping and have a life of about 30 years after which the yield starts reducing, making replanting necessary.

More automakers are making India their export hub and demand from the tyre sector is likely to grow substantially, increasing the gap between supply and demand, Smit said.

Tyre makers consume about 60 per cent of the total output.

China and the US are likely to retain their positions as the largest and second largest consumers respectively, he said.


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## nitesh

IBM opens cloud-computing center in India - CIOL News Reports

IBM opens cloud-computing center in India
The center will help enterprises looking to transform their data center for service delivery as well as startup businesses
Thursday, September 25, 2008

BANGALORE, INDIA: *IBM unveiled a cloud-computing center in Bengaluru. The center will give enterprise customers including mid-market, universities and government bodies in India immediate access to the resources they need to pilot cloud infrastructures and applications.*


The center in Bengaluru joins other new *cloud computing centers in Korea, Vietnam and Brazil that have been announced recently. These centers will cater to an increasing demand in emerging markets such as India for Internet-based new computing models and skills.*

IBM cloud computing centers host computing activities for clients or provide access to expertise and infrastructures for clients to design and deploy their own cloud environments.

This computing model allows businesses and consumers alike to remotely access a vast computing resource that can be tapped *on-demand to deliver next-generation services that consumers demand, like online medical records or mobile stock portfolio management.*

It also improves energy efficiency because of its principle as a shared infrastructure, and allows organizations to better track information, pay for what they use and access more computing, storage, services or applications on demand.

IBM is already collaborating with partners, government and academia in other emerging countries to facilitate innovation supported by a cloud infrastructure. In India, clients such as mid-market vendors, academic institutions, telecommunications companies and government bodies will be able to access the center for the resources they need to pilot cloud infrastructures and applications, and deliver new services to their customers.

Said Prof Sanjay G Dhande, Director, IIT Kanpur, "Cloud computing enables server centric virtualization which helps IT ecosystem to achieve smaller footprint, efficient resource utilization and server consolidation. Enterprises are looking at alternate ways to support their dramatically increasing computing needs, one *that will allow for massive scalability while providing an energy efficient and resilient infrastructure. Technology collaboration between IIT Kanpur and IBM India will drive new developments in computing to support academic advancement and economic development in India."*

Dr Ponani Gopalakrishnan, VP, India Software Lab, said, "In emerging markets like India, hundreds of millions of people are opening their first bank accounts, getting their first cell phones, using their first credit cards and accessing e-government services for the first time. The convergence of personally empowering technologies into the hands of the consumer is fundamentally changing consumer behavior and expectations. Cloud computing offers an answer for many of these needs and allows an organization to further reduce costs through improved utilization, reduced administration and infrastructure costs, and faster deployment cycles."

One of the prime agendas for the center in India will be to help enterprises looking to transform their data center for service delivery as well as startup businesses or organizations that do not have&#8212;or cannot afford to build&#8212;an entirely new infrastructure.

There will be a special focus on the fast growing communications industry including content providers, Internet service providers and telecom companies. Clients in India will be able to leverage the cloud-computing infrastructure to run Proof of Concepts, get help to design their own cloud infrastructures and have access to experts who can help them deploy their own cloud infrastructures behind their firewalls.

Cloud computing also presents an intelligent deployment mechanism for governments to build services to help citizens and this center will closely work with the government agencies to develop frameworks to demonstrate use of cloud in e-governance projects


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## Neo

*Indian 2008-09 growth forecast edges lower​*
MUMBAI: Indias economy is expected to grow at is slowest pace in four years in the fiscal year to March 2009, as tighter monetary policy reins in inflation and global financial turmoil weigh, a quarterly Reuters poll shows. 

The median forecast of 10 analysts polled last week showed growth in the current fiscal year would be 7.5 percent, little changed from a forecast of 7.6 percent in the previous poll in July. But the forecast is lower than the central banks prediction of close to 8 percent. It would be the slowest growth since 2004/05, when Asias third-largest economy grew 7.5 percent. Growth has averaged 8.8 percent over the past five fiscal years, and has been at or above 9 percent for the past three. The accelerated pace of monetary tightening has clearly had some bearing on the pace of growth, said Shubhada Rao, chief economist at Yes Bank. 

The central bank raised its key lending rate three times in June and July, taking it to a seven-year high of 9 percent, as inflation surged into double digits. reuters


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## Neo

*India says stock market sound​*
NEW DELHI: India sought to reassure investors Tuesday its stock market was sound despite worries the US-led financial crisis could intensify following rejection of a massive bailout for Wall Street banks.

Indian shares were trading higher on Tuesday on bargain-hunting but the nations stock market has plunged by about 38 percent this year, led by risk-averse overseas funds selling Indian shares. There is nothing to worry about the Indian market, finance minister Palaniappan Chidambaram told reporters in New Delhi following the surprise defeat of a $700 billion rescue of the US financial system.

The Indian market is a sound, attractive and well regulated market, he said. Were suffering the consequences of turbulence around the world. The Congress-led government was monitoring events round-the-clock, the minister said, adding regulations in place are adequate. But if the regulations have to be tweaked, we will do so.

However he voiced concern about the rejection of the bailout package by the US House of Representatives and expressed hope that US legislators would still pass it within the next couple of days.

Its agreed by everyone a bailout is necessary. How the US Congress will reconcile the views of two major political parities, its not for me to comment.

However, we will be greatly helped if a bailout package is quickly approved by the US Congress, he said. afp


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## nitesh

Current account deficit widens to $10.72 bn

The country&#8217;s current account deficit widened to $10.72 billion during the first quarter of 2008-09 compared with $6.3 billion during April-June last year as higher oil prices pushed up the import bill and resulted in a higher trade deficit.

The current account deficit was estimated at $1.04 billion in January-March. In addition, the surplus on capital account shrunk to $12.96 billion in April-June this year from $17.50 billion in the corresponding period last year due to stock market volatility and lower capital inflows.

Net capital inflows fell 23.70 per cent to $13.2 billion during the first quarter this year as foreign institutional investors (FIIs) withdrew $5.18 billion from the country during the first quarter.

However, net foreign direct investment (FDI) inflows rose over three-and-a-half times to $10.12 billion compared with $2.66 billion during the first quarter of 2007-08.

As a result of higher current account deficit and a smaller capital account surplus, the balance of payments (BoP) surplus in the April-June quarter was estimated at $2.24 billion, compared to $11.20 billion during the corresponding period last year, according to the latest data released by the Reserve Bank of India on Tuesday.

During January-March 2007-08, it was estimated at $24.99 billion.

The current account deficit widened as the trade deficit, which rose from $20.70 billion during April-June 2007 to $31.54 billion during the first quarter this year, more than offset the gains made on invisibles comprising software export earnings, earnings from non-software services and private transfers including remittances.

The increase in invisible receipts was driven by private transfers along with the steady growth in software services exports, travel and transportation. The remittances from Indians working overseas rose nearly 54 per cent to $12 billion against $7.8 billion last year. Software exports rose 20.59 per cent to $10.66 billion during April-June this year, compared with $8.84 billion in the corresponding period last year.

Non-software services, however, saw a 6.87 per cent rise in receipts to $5.91 billion in April-June this year, as against $5.53 billion in the same period last year.

The invisible payments slowed down during the period due to moderation in payments relating to a number of business and professional services. Due to the surge in international crude oil prices followed by rising freight rates, transportation payments went up by 33.1 per cent against 24.8 per cent in the corresponding period last year.

India&#8217;s external debt at the end of June 2008 rose to $221.3 billion, up by $584 million from March 2008.

The net accretion to the foreign exchange reserves excluding valuation change stood at $2.2 billion on BoP basis in the first quarter on account of capital outflows. The forex reserves rose $2.4 billion during the first quarter of 2008-09 as against an increase of $14.2 billion in the corresponding period last year.

Analysts such as Rajeev Malik of Macquarie Securities expect the current deficit to widen this year. &#8220;The bigger challenge will be for capital inflows, especially in the current global backdrop, and we expect a significant shrinkage in the overall surplus on the balance of payments,&#8221; he said


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## nitesh

India`s exports up by 26.9&#37; in August: Report 

New Delhi, Oct 01: India's exports increased by 26.9 per cent in August, while the import bill soared by 51.2 per cent leaving a trade deficit of 13.94 billion dollar for the month. 

Exports grew to 16 billion dollar in August from 12.61 billion dollar, while imports rose to 29.94 billion dollar from 19.8 billion dollar in the same period last year. 

The trade deficit widened to 13.94 billion dollar in August from 7.19 billion dollar a year-ago, according to official figures released here today. 

India's crude oil import bill shot up by 76.7 per cent to 10.96 billion dollar from 6.2 billion dollar in August 2007. 

For the April-August 2008 period, exports showed a growth of 35.1 per cent to 81.22 billion dollar. Imports rose by 37.7 per cent to 130.36 billion dollar in the first five months of the fiscal. 

Consequently, the deficit in this period stood at 49.13 billion dollar. 

Bureau Report 

Zee News - Exports up by 26.9% in August


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## Flintlock

*India's Inflation Rate Slows to 11.99%, 13-Week Low (Update1)*

By Cherian Thomas

Oct. 3 (Bloomberg) -- India's inflation slowed more than expected to a 13-week low, giving the central bank room to keep interest rates unchanged when it meets at the end of the month.

Wholesale prices rose 11.99 percent in the week to Sept. 20 from a year earlier after gaining 12.14 percent in the previous week, the commerce ministry said in a statement in New Delhi today. Economists expected a 12.12 percent increase.

Reserve Bank of India Governor Duvvuri Subbarao is under pressure to boost money supply as a local stock sell-off triggered by the global credit crunch has drained funds from the banking system, increasing borrowing costs. Subbarao is unlikely to yield as inflation is still double the central bank's target.

``Inflation is still at elevated levels,'' said N. R. Bhanumurthy, an economist at Institute of Economic Growth in New Delhi. ``Cuts in interest rates will come, but just not yet.''

The wholesale price index fell because of a decline in the prices of farm products such as cereals, fruits and vegetables. The index of primary articles, that includes food items, dropped 0.2 percent, while the indices of manufactured and fuel were unchanged in the week to Sept. 20, today's report said.

The central bank has raised the cash reserve ratio, or the proportion of deposits that lenders maintain with it as reserves, by 400 basis points to 9 percent since December 2006 to contain inflation. The bank will release its next monetary policy statement in Mumbai on Oct. 24.

Financial Meltdown

The rate at which Indian banks lend to each other climbed to an 18-month high of 17.5 percent on Oct. 1 as investors hoarded cash amid concern the U.S. financial meltdown could tip the global economy into recession. Indian banks borrowed an average 413 billion rupees a day from the central bank in September, almost twice the amount in August, further indicating a shortage of funds in the banking system.

The rupee fell as the credit-market turmoil in the U.S. prompted overseas funds to pull out money from Indian stocks. Overseas investors have pulled out a record $9.22 billion since January, pushing the key stock index down by 37 percent.

The rupee declined 16 percent this year and is the second- worst performer among the ten most-active Asian currencies excluding the yen.

The yield on the benchmark 10-year bonds dropped 30 basis points this week to 8.3 percent in Mumbai. The rupee fell 1.5 percent this week to 47.085 per dollar, the lowest since June 2003. Inflation data came after the markets closed.

Credit Shortage

Indian companies including Alok Industries Ltd., Jaiprakash Associates Ltd. and Balrampur Chini Mills Ltd. had called for a cut in the cash reserve ratio to ease the credit shortage.

The Reserve Bank in September announced measures to boost the supply of dollars in the market and curb exchange-rate swings. The central bank said it will sell dollars and raise rates on locally-held foreign-currency deposits.

Central banks from Australia to Japan pumped cash into their money markets and promised to take more steps to alleviate a credit shortage after the collapse of some of the biggest banks on Wall Street, including Lehman Brothers Holdings Inc. The U.S. Senate this week approved a $700 billion financial- rescue package for the nation's lenders.

Asia's central banks have already started to cut interest rates to spur growth. Taiwan reduced borrowing costs on Sept. 25, joining China, Australia and New Zealand in easing borrowing costs this month.

To contact the reporter on this story: Cherian Thomas in New Delhi at cthomas1@bloomberg.net
Last Updated: October 3, 2008 09:00 EDT


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## Flintlock

*'India to overtake China as financial power after 2015'*
3 Oct, 2008, 1730 hrs IST, PTI
ZURICH: India will overtake China as a financial power after 2015 as its institutions can weather recession easily, a former union minister said
here.

Speaking at a seminar on 'The Indian Economy and the China Factor' at the Swiss-India Chamber of Commerce here, Former Union Commerce Minister and Janata Party chief Subrahmanian Swamy said that India will "overtake" China after 2015.

"India, because its institutions will weather the crisis more easily," he said referring to the "1977 East Asia crisis".

Swamy said that investing in an Indian business is a costly affair owing to poor infrastructure and corruption.

"But Indians now have demonstrated capacity to produce the highest quality products as proved by the global awards that it won for quality in IT software and automobile ancillary industry," he said.

Swamy noted that poor infrastructure and corruption are drawbacks that can be rectified by decisive government action.

For example, he said, Indians hold about Rs 6.5 lakh crores (USD 1.5 trillion) in Swiss banks alone which can be recovered by issuing an ordinance to nationalise all Indian citizens' accounts in Swiss banks.

"The Swiss government, by the new post-Marcos legislation would then be obliged to hand over the accounts to the Indian government," he added.

'India to overtake China as financial power after 2015'- Indicators-Economy-News-The Economic Times


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## nitesh

Flint isn't this number is less


> he said, Indians hold about Rs 6.5 lakh crores (USD 1.5 trillion)



it must be more. But right thing said


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## Marshal

nitesh said:


> Flint isn't this number is less
> 
> 
> it must be more. But right thing said



I think 6.5 lakh crore is = to $150bn USD 
the report says $1.5trillion USD which is clearly not possible......$1.5trillion is more than our GDP


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## nitesh

Marshal said:


> I think 6.5 lakh crore is = to $150bn USD
> the report says $1.5trillion USD which is clearly not possible......$1.5trillion is more than our GDP



Well not going to number crunching. But the point raised is good by mr. swamy


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## Neo

*Reliance Industries eyeing diesel exports to Pakistan​*Calcutta News.Net
Friday 3rd October, 2008 (IANS)

The Mukesh Ambani-headed Reliance Industries (RIL) is interested in exporting diesel to Pakistan if restrictions are removed, a senior company official said here Friday.

In his address at the India Energy conference, P. Raghavendran, RIL's president (refineries business), described Pakistan as a 'natural market' for its petroleum products from its refineries.

'We would like to go there once restrictions are removed,' he said, describing it as a 'win-win situation' for both India and Pakistan.

Later, when told diesel had recently been removed from the negative list by the Pakistan government, Raghavendran said: 'If it was so, we will certainly be interested in exporting our products.'

Pakistan imports about seven to eight million tonnes of diesel, most of it from Kuwait.

Indian Oil Corp had first mooted exports to Pakistan three years ago. RIL had also started talks with the Pakistan government, but it had not moved forward as Pakistan had continued with its ban on import of diesel from India.

In July, Pakistan introduced a more liberal trade policy for India, bringing 136 items, including diesel, into the positive list.


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## Neo

*Tata abandons cheapest car plant​*
KOLKATA, Oct 3: Indias Tata group announced on Friday it was abandoning a plant in eastern India, which was stated to turn out the worlds cheapest car after weeks of violent demonstrations triggered by a land dispute.

You cannot run a plant with police protection, you cannot run a plant when bombs are being thrown, you cannot run a plant when workers are being intimidated, Tata group chief Ratan Tata told a news conference in Kolkata.

Tata Motors, part of the sprawling Tata group conglomerate, began moving machinery from the nearly completed factory in Singur on the outskirts of Kolkata late last month after weeks of demonstrations triggered by a land row halted construction on the site.

Protesters spearheaded by Mamata Banerjee, the fiery leader of the regional Trinamool Congress, accused the state government of forcing farmers to give up their fertile land for a pittance so the plant could be built.

If someone had put the gun to my head I would not move away but I think Banerjee has pulled the trigger, Ratan Tata said, referring to Banerjees unyielding opposition.

The state government had appealed to the Tata group to remain and said it would be a big loss to industry-starved West Bengal if Tata pulled out of the state.

The firm had promised to roll out the car, to be sold for 100,000 rupees ($2,150), in the Oct to Dec financial quarter.AFP


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## Neo

*Tata plant move may affect India investments, growth ​* 
Sunday, October 05, 2008

MUMBAI: The decision by Indias Tata Motors Ltd to move a factory out of West Bengal state after violent protests may affect the broader investment climate in the country, detering foreign investors and denting economic growth. Violent protests by farmers whose land was taken by the state for the construction of the low-cost Nano car plant forced Tata Motors, the countrys top vehicle maker to pull out on Friday after a last ditch meeting with the states chief minister.

Analysts said though the immediate impact would be limited to the state of West Bengal as the Tatas move to a more industry-friendly state, it would have wider repercussions as more states may adopt a harder anti-industry tone for political gains.

Though West Bengal is different from other states in showing it can throw out established industrial houses for political mileage, it may be the start of a very dangerous broader trend which does not bode well for the economy, said

T K Bhaumik, chairman of the economic affairs committee at ASSOCHAM, an industry body.

In September, an Indian unit of Dow Chemical Co was asked to stop construction work in the Maharashtra state, home of the countrys financial capital and Reliance Industries, the countrys most valuable firm faced violent protests last year over its retail foray.

South Korean steel firm POSCO is facing protests to acquire forest land for a $12 billion plant in Orissa and Goa dropped plans to build special economic zones after protests from political parties.

Analysts said industrial activity which is already slowing due to tight monetary policy and weaker economic growth may be further affected by such protests.

A study in August by the central bank showed Indian private firms will invest 1.73 trillion rupees ($37 billion) in fresh projects in 2008/09, a 30 per cent decline from 2.45 trillion rupees in 2007/08.

Politicians in this country must choose over perpetuating poverty to gain votes or pursuing economic development and you cannot have 9-per cent plus growth if you bar your companies from making investments, Bhaumik said.

Industrial output is mostly for the domestic market and accounts for about a fifth of gross domestic product, helping the economy expand at an average 8.8 per cent in the last five fiscal years.

But economists said the scrapping of the Tata plant would be a severe setback to the economic prospects of the state of West Bengal which is already languishing behind other states in terms of investment.

West Bengal attracted 60 billion rupees in investments in 2007/08, less than a tenth of the investments attracted by the leading state, Gujarat, a study by the central bank showed.

An Indian Express editorial on Saturday said the withdrawal by the Tatas from Singur was a grave loss for West Bengal.

A door to its future has just closed, the daily said. The pull-out is also seen as a loss of face at a time when India is trying to attract foreign investors to help it sustain growth in the same week the US approved a landmark nuclear deal which is expected to lead to a spurt of interest from US firms in the local energy sector.

This creates a negative image about India, said Marut Sengupta, director of economic policy at the Confederation of Indian Industry representing around 90,000 firms.

It is very difficult to say what foreign companies would do on investment decisions but this certainly will not help, he said.

A Prasanna of ICICI Securities said the pull-out highlighted the troubles of land acquisition by the government for industrial activity, which would best left to individuals and private companies.

The bigger issue is of transparency in land acquisition and all stakeholders including the government and the industry must come together to find a solution.


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## ashfaque

Though TATA exit from WB is unfortunate, but this is also true, industries should not be built on farming land. There are massive land available which are not used for farming, but these companies only looking for prime land.


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## nitesh

Nano to be feather in the cap for ?investor-friendly? Gujarat- Automobiles-Auto-News By Industry-News-The Economic Times

Nano to be feather in the cap for &#8216;investor-friendly&#8217; Gujarat
7 Oct, 2008, 0348 hrs IST,Himanshu Darji, ET Bureau

AHMEDABAD: With the state government going all out to woo investors from across the country and abroad, the Tata Motors&#8217; Nano project coming to Gujarat at this juncture will be a triumph of the Modi government and a right start to its effort to bring in high-profile investment. 

As part of its Vibrant Gujarat Global Investors&#8217; Summit to be held early next year, the state government is expecting an investment of more than Rs 5 lakh crore, as compared to the Rs 4.61 lakh crore investment it invited in last investors&#8217; summit. 

These MoUs, however, are expected to be less glittering as compared to the last year&#8217;s summit. 

If Modi succeeds in getting the Nano project against stiff competition from other states, it will be yet another feather in his cap. He will be in a position to show to the world that Gujarat is the most investor-friendly state in the country. 

And, if the Tatas decide to set up their small car project in Gujarat before the forthcoming Vibrant Gujarat Global Investors&#8217; Summit 2009, Modi can rightly tell the world: &#8216;The proof of the pudding is in eat-ing&#8217;. This will also give him a political mileage and will establish the image of his party BJP as investor friendly as against to the Left Front or Congress. 

Political analysts believe that Modi&#8217;s claim for converting problems into opportunities, which he has been claiming in public speeches, will get boost if the Nano project comes in Gujarat.


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## nitesh

Tech, BPO sectors see hiring at steady pace- Jobs-News By Industry-News-The Economic Times

Tech, BPO sectors see hiring at steady pace
7 Oct, 2008, 0630 hrs IST, ET Bureau

NEW DELHI: Despite fears of a global economic slowdown, India&#8217;s IT and ITES sectors expect hiring to continue in the fourth quarter of the calendar year 2008. A majority of companies in a survey conducted by HR consulting firm Manpower said they will continue their hiring process in the fourth quarter. 

The survey was conducted among a total of 1,098 companies across the IT, ITES and BPO space. India had a net employment outlook of 57&#37; &#8212; about 58% of respondents anticipated an increase in employment, while 1% reported a decrease in hiring. Another 26% said they expect no change in their hiring intent, while the rest did not comment. 


According to Manpower, the ongoing hiring in the sector can be attributed to the upcoming IT & ITES special economic zones in the country. &#8220;The emergence of new pricing models, innovative business, global delivery networks and expanded BPO services (knowledge and legal process outsourcing) are also contributing to the growth of the industry,&#8221; said a release issued by the HR consulting firm. 

Besides, India is also leading in terms of creating employment in the services sector in the Asia-Pacific region. India&#8217;s employment outlook for the entire services sector, including IT and ITES, stood at 47% for the fourth quarter this year, while it was 15-21% for countries such as Australia, China, New Zealand, Taiwan and Singapore. Hong Kong followed India, with an employment outlook of 32% in the services sector.


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## nitesh

Mr. Modi all the way

rediff.com: Tata Nano to roll out from Gujarat!

Sanand farmers welcome the Nano

http://timesofindia.indiatimes.com/...and_transfer_for_Nano/articleshow/3567686.cms


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## nitesh

It's official now: 

It's official: Gujarat's Sanand is Nano's new home- Automobiles-Auto-News By Industry-News-The Economic Times

It's official: Gujarat's Sanand is Nano's new home
7 Oct, 2008, 0803 hrs IST, ECONOMICTIMES.COM

The Nano car has got a new home. *Tata Motors, on Tuesday, announced that the mother plant for the Nano will be relocated to Sanand in Gujarat.* 

The company had received overwhelming support from several states for relocating the plant. After examining various sites in these states and carefully evaluating offers from the respective governments, the company has concluded that the site at Sanand and the offer from the Gujarat Government is in the best interest of the project. 

*The integrated project, comprising the mother plant and the vendor park, will come up on an area of about 1100 acres. The plant, to begin with, will produce 250,000 cars per annum. The capacity is expandable up to 500,000 cars per annum. The project, including Tata Motors&#8217; plant, vendor facilities and service providers, will together generate over 10,000 direct and indirect jobs. *

Speaking at the announcement, Ratan N. Tata, Chairman of Tata Sons and Tata Motors, said, "The site in Gujarat, already under the possession of the state government, will help Tata Motors establish a new dedicated mother plant with the shortest possible time lag and least possible incremental project cost. This is Tata Motors&#8217; maiden venture in Gujarat, and will broad-base the company&#8217;s manufacturing footprint. We are happy to contribute to Gujarat&#8217;s strong industrial progress by creating an auto cluster, which will have a cascading impact on the state&#8217;s economy.&#8221; 

Mr Tata also added that it will be a while before Nano is rolled out from Gujarat but have made make-shift plan to meet the deadline. 

Tata said that after a sad experience with a small quarter of the residents of West Bengal and despite the state government&#8217;s efforts in this regard, the company was happy to have a new home for the Nano car. 

*While awaiting the Sanand plant&#8217;s completion, Tata Motors will explore the possibility of manufacturing the Nano at its existing facilities at Pune and Pantnagar, and launch the car in the last quarter of this financial year.*


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## Neo

*India remains upbeat on growth ​* 
Wednesday, October 08, 2008

NEW DELHI: Indias economy will grow 8 per cent this fiscal year and rebound to 9 per cent next, the finance minister has said, despite the rout in global markets which has triggered recession fears in industrialised nations.

There is a storm blowing across the world. India will be affected to some extent, although indirectly, but Indian business and industry have placed India in a situation where we can weather the storm, Palaniappan Chidambaram said.

The remarks made at an award ceremony for top businessmen late on Monday were released by the finance ministry on Tuesday.

Indian stocks have taken a battering in recent weeks and the rupee on Tuesday weakened beyond 48 to the dollar to its lowest since December 2002 as investors cut their exposure to riskier assets amid the financial turmoil.

Chidambaram cited robust revenues, exports and investment planned by Indian corporates as major positive factors which would help India through the global crisis.

Huge capacities are being added in power, steel, commercial vehicles, passenger cars and two wheelers, he said.

What is there to fear? There is nothing to fear but fear itself.

Economists have said Asias third-largest economy, which expanded at a rapid clip of 9 per cent or more in the previous three years, would likely grow about 7.5 per cent this fiscal.

Growth in the June quarter eased to an annual 7.9 per cent, the slowest pace in 3- years, losing momentum as services slowed sharply and higher oil prices and interest rates weighed.

A survey by a leading industry lobby group on Monday showed rising raw material costs, wages and interest rates hurting corporate profits and growth over the next six months.

The survey of 348 firms by the Federation of Indian Chambers of Commerce and Industry showed half were reconsidering or deferring investments and expected growth toremain the same or worsen over the next two quarters.

The $700 billion US rescue fund, ad hoc measures by European governments and massive injections of funds by central banks around the world have not been able to stop confidence in the financial system from evaporating or growing fears the

global economy is on the path to recession.

We will remain vigilant. Our regulators have shown great agility. Going forward, we can still end this year with a growth rate of 8.0 per cent. I am confident that in 2009/10, the growth rate will bounce back to 9.0 per cent, Chidambaram said.

Indias central bank on Monday cut the cash reserve ratio (CRR) for banks to alleviate a cash squeeze caused by the global financial crisis, while the capital-markets regulator removed curbs on indirect investment notes to help encourage inflows.


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## Neo

*Japan trade talks with India hit bottleneck ​* 
Friday, October 10, 2008

TOKYO: Prospects of Japan and India reaching a free-trade deal in time for a leaders summit this month have weakened, with a number of areas in dispute, a Japanese negotiator said on Thursday.

We did not reach an agreement on the deals outline in the latest round of talks, the Japanese official said on the customary condition of anonymity after four-day negotiations in Tokyo. Indian Prime Minister Manmohan Singh will visit Japan from October 21 to 23 and meet his new Japanese counterpart Taro Aso.

The two countries, which had failed to reach an outline of a free-trade deal by a deadline of mid-2008, hoped to make the progress during Singhs visit. But the Japanese official said the two countries would not hold further trade talks in the nearly two weeks before Singh arrives.

Its true that there are several particular areas which are more difficult than what we had expected, he said. We still keep the stance that we aim to sign a deal as soon as possible, he said, but added, It wont be easy.


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## Neo

*Controversial Baglihar dam commissioned: 'genuine concerns' of Pakistan addressed, says Manmohan​*
NEW DELHI (October 11 2008): Indian Prime Minister Manmohan Singh while commissioning the controversial Baglihar dam in occupied Jammu on Friday said Pakistan's concerns have been addressed on the project. Indian has built 450MW Baglihar hydel project on Chenab River despite serious objections raised by Pakistan on the design of the project which hindered the normal flow of water in the river.

Addressing a public meeting on the occasion at Chandrakote (occupied Jammu), Singh said while setting up the project, special care has been taken to ensure that "genuine concerns" of Pakistan were taken care of so that it has no complaints on the dam. Congress President Sonia Gandhi, IHK Governor N N Vohra and Union Ministers Lalu Prasad and Jairam Ramesh accompanied the Indian prime minister in inaugurating the first phase of 450MW project. "It is the duty of people of India and Pakistan to learn to lend a helping hand to each other," Singh said adding "I would like to invite Pakistan to work with India in achieving this objective."

Manmohan Singh, who landed in Chanderkote by helicopter from Udhampur in his seven minutes speech said by completing this project, the power generating capacity of occupied Kashmir had doubled from 309MW to 759MW. The total installed capacity of the dam will be 900MW. The Prime Minister commissioned the project under tight security as hundreds of security personnel were deployed on nearby hilltops, roads and the venue where he delivered speech.

Meanwhile, complete strike was observed in occupied Kashmir on the call of Kashmir Co-ordination Committee on the visit of the Indian Prime Minister. At least two people were killed during a protest demonstration. Mirwaiz Umer Farooq has said the economic packages announced by Prime Minister are not solution to the Kashmir Issue. He said Kashmiris should be included in Pak-India parleys on Kashmir. He vowed to continue struggle for right of self determination.


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## nitesh

Infosys, TCS see turnaround in six months- Software-Infotech-The Economic Times


Infosys, TCS see turnaround in six months
13 Oct, 2008, 0000 hrs IST,N Shivapriya, ET Bureau


MUMBAI: Despite the grim economic environment overseas, both Infosys Technologies and Tata Consultancy Services (TCS) have opted for strategies that anticipate a recovery after about two quarters. While TCS will add nearly 12,500 employees of Citigroup Global Services, Infosys said it would hire about 25,000 people in FY09 and honour all the commitments made at campuses. While 11,000 employees have already joined Infosys this year, another 18,700 are expected to join before the fiscal end, officials said in interviews following its results announcement on Friday. 

&#8220;The bench (the number of employees not working on billable projects) is going to remain large for some time.... The challenge is to keep them engaged,&#8221; Mohandas Pai, director, Infosys, said. The company admitted that utilisation would come down but that it would be able to maintain margins. Top management officials said the company had enough money to sustain them in such difficult times. 

&#8220;We don&#8217;t go back on any of our client contracts, why should we go back on our employment contracts? We have recruited the best and the brightest from colleges &#8212; we will need them when the market recovers. In any case, the training will take 4-5 months,&#8221; chief operating officer S D Shibulal told ET . 

Infosys&#8217; utilisation has already fallen to 74&#37; from 78% a year ago because of fewer projects. Normally, the second quarter is among the better quarters because there are more billable days and fewer increase in costs compared to the first and third quarters. 

The guidance given by Infosys also seems to suggest it expects a recovery in the fourth quarter of the fiscal. Based on the figures put out by the company, it expects flat sequential growth in revenues and marginally better growth in earnings in Q3 FY09. However, in Q4 FY09, the company expects a whopping 18% sequential growth in revenues and 14% growth in earnings. 

An analyst ET spoke to had a different view. &#8220;If you ask me, the bottom is yet to be reached. This is only the beginning. Infosys can maintain margins even if utilisation drops because it is so big. In any case, freshers are not paid much. So it won&#8217;t impact margins significantly,&#8221; he said. 

TCS has also come in for criticism for acquiring Citigroup Global Services and increasing its exposure to the troubled financial services sector. TCS COO N Chandrasekaran told ET , &#8220;It&#8217;s going to take 3-4 months to complete the acquisition. And to integrate the teams, another 6 months, which is a good time frame to be ready when the markets recover.&#8221; But others are not so optimistic. &#8220;Not only has the company increased its exposure to financial services, it has also increased its exposure to Citigroup, which was already among its top clients. Like General Electric, Citi is known to drive a hard bargain. So they are going to extract a lot of value for the money they pay,&#8221; said an analyst, terming it as move to &#8220;buy revenues&#8221;. 

(With inputs from Ranjit Shinde)


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## nitesh

Come, feel the vibrancy of Gujarat: Modi- Interviews-Opinion-The Economic Times

Come, feel the vibrancy of Gujarat: Modi
17 Oct, 2008, 0249 hrs IST,Ashwin Walunjkar & Mitul Thakkar, ET Bureau

He just got a new car, but he doesn&#8217;t see it as a vehicle to escort prospective investors to his state. Gujarat chief minister Narendra Modi will soon embark on ambitious roadshows, showcasing the state which is arguably the top destination for domestic investments (26&#37; as per an RBI report) to attract corporates. After bagging Tatas&#8217; Nano project last week, beating other states on the way, Mr Modi tells that Gujarat&#8217;s magnetism alone would drive investments 

Excerpts of an interview: 

*You wanted to turn Gujarat into Singapore. Now, Detroit seems closer....* 

Comparison with Singapore, Detroit or Hong Kong is necessary. It is for the common man to make his journey from the known to the unknown (levels of development) easy. It is purely symbolic. It is just to say that Gujarat is following the global parameters of development. If there is something good happening elsewhere, we should adopt it. 

Similarly, the world is too talking about Gujarat. The disaster management and rehabilitation policies framed after the earthquake in Kutch have become a model for the world. So, we are both learning from the world as well as contributing to it in our own way. 

*What was more exciting - victory at the assembly elections last year or getting the Nano project? *

The two are different. Election victory brought in a sense of responsibility. There was no time to rejoice. Nano, well, I don&#8217;t see it in Gujarat&#8217;s context. I don&#8217;t even see it as an achievement by Narendra Modi. It used to pain me when reports indicated that the project was facing problems in Singur. Then there were talks that other countries too are ready to host the world&#8217;s small car project. I was startled. 

I wanted the project to come up in West Bengal, but when it became clear that it would eventually move out of that state, I became proactive. I took this as a national responsibility and assured Ratan Tata while extending an invitation to set up the project in Gujarat 

*What was Tatas&#8217; reaction when you put forth a proposal? *

It never reached a level of preparing a proposal. It was not like when a girl and a boy meet and a marriage proposal comes up (laughs). Their officials were surveying land all over the country. They came here too and met my officials. I was in direct touch with Ratan Tata all along. Nano coming to Gujarat was a routine activity. The real effect came after we announced it. The effect was electrifying. 

*Gujarat would host the fourth Vibrant Gujarat Global Investors&#8217; Meet in January. What response do you see post Nano?* 

Vibrant Gujarat is a novel idea. We have been holding these biennial meets since 2003. There is competition between states for getting investments. 

Unfortunately, the competition is all about incentives. This had been happening since the &#8216;80s, and I wanted to change this. Thus came the idea of a global summit. My emphasis is &#8216;come, feel Gujarat&#8217;. Investments will come later. First, meet the people, know the government&#8217;s functioning and feel the vibrancy of the state. 

It was a strategy to showcase the state&#8217;s strengths. Instead of governments going to investors in other states, I wanted investors to come here. I was clear. There won&#8217;t be any incentives, but I would provide business environment, proactive governance, single-window clearances etc. 

I don&#8217;t think, incentives draw investors. It is the experience of a colleague in the industry that leads to an investment decision. Earlier, an investor would go around states expressing his wish to invest. In Gujarat, he just has to sign a paper (MoU) and it is the responsibility of the state government to approach him. 

*From an investment commitment of a few thousand crores in 2003 to Rs 4.6 lakh crore in 2007. What are your expectations now?* 

We have never set a target. Instead, we have created focus areas. If in 2003, it was human resource development, in 2007 it was SEZs. This year, our focus areas are special investment regions (SIRs), Delhi-Mumbai Investment Corridor (DMIC), Gujarat International Finance Tec City. What can we expect? Enhanced economic activity in the state, in the sense, more jobs. I am confident, it would be a success this year too. After all, it&#8217;s all about Brand Gujarat. 

*How would you showcase the state? *

These roadshows are not intended to impress investors. It is a great learning experience for me. I try and understand the needs of the corporates. For example, when I went to China, I studied the SEZ model there and came back to implement it. 

*You managed to get all biggies last time - Ratan Tata, Mukesh Ambani, Kumarmangalam Birla, K V Kamath. Who all are expected this time?* 

Vibrant Gujarat summit is like Davos (the venue of World Economic Forum annual meet). People make it a point to attend it. It is too early to say who all will come. Letters will be sent out...there is a procedure. 

*There are talks of auto majors lining up after the success of Nano. Who are the big players likely to invest?* 

I don&#8217;t comment on things before they happen. But I can tell you, DMIC has evoked a lot of interest. A lot of MNCs have been making inquiries. One thing I must say, Japanese companies are particularly interested in Gujarat. 

This has been going on since one year. Officials from various companies come here to survey the land and discuss the project. At this point, I cannot say, which particular company will come. In this competitive world, any comment from me would alert others and create competition. I don&#8217;t want to do that. But, things have been moving, even before Nano.

Reactions: Like Like:
1


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## Contrarian

Its Modi all the way in Gujarat!


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## Neo

*India says growth may slow due to global turmoil​* 
Tuesday, October 21, 2008

NEW DELHI: Prime Minister Manmohan Singh said on Monday India must brace for slower economic growth because of the global market turmoil, but the countrys banks were safe and there was no need to fear any collapse Singh told parliament the government and the central bank were monitoring the situation and would ensure that additional liquidity infused into the system translated into actual credit and would take more steps if needed.

He said some estimates projected GDP growth to decelerate to 7.5 per cent in the current fiscal year to March, with the most pessimistic estimate at 7 per cent lower than government projections of 8 per cent versus 9 per cent rise in 2007/08.

We must be prepared for a temporary slowdown in the Indian economy, Singh said, adding that the global market turmoil would have an indirect impact on the economy. The precise impact is difficult to estimate at this point since the depth and duration of the global slowdown remains uncertain.

Pressure on Singh to address the nation had mounted after investor confidence was rattled in recent weeks, with the stock market losing more than half its value this year, the rupee plumbing record lows and as banks grappled with a cash crunch.

Our first concern was to ensure stability of our banking system. Our banks, both in the public sector and in private sector, are financially sound, well capitalised and well regulated, Singh said.There should be no fear of a failure of any bank.

Policy makers have taken a slew of measures in recent weeks as foreign capital was pulled out of the stock market and as credit markets seized up as onshore liquidity evaporated in part because banks were wary of lending.

On Monday, the central bank unexpectedly slashed its main short-term lending rate for the first time in more than four years, lowering the repo rate 1 percentage point to 8 per cent, to shield the economy from the global crisis.

It will have a beneficial effect on the interest rate structure and, in combination with other steps to increase liquidity, will help support economic activity and investment, Singh said. The Reserve Bank of India has released liquidity of 1 trillion rupees ($20.4 billion) in recent weeks, by slashing the amount of money that banks much keep in reserve with the central bank, to enable more funds for loans.


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## Neo

*India bars Pakistani, Chinese, HK firms​*
KARACHI, Oct 20: India has banned investment in infrastructure projects of any company from Pakistan, China and Hong Kong.

According to World Cargo News, earlier there had been dormant restriction but now the Indian government has issued notification in August 2008 in this regard, thereby bringing to open their concealed and hidden policy of not allowing company of these countries to invest in infrastructure projects in India.

The World Cargo News pointed out that Hutchinson Whampoa, owners of Karachi International Container Terminal (KICT), won the bid in 2005 out of seven contenders for Bombay offshore deep water port of $400 million with J V Larson Turbo a big Indian group.

The Indian ministry of shipping delayed issuance of Letter of Intent (LoI) till end 2006 and cancelled the bids without assigning any reasons.

It further said that Larson Turbo being big Indian conglomerate threatened the ministry by legal notice then only it was revealed that Hutchinson Whampoa was a Hong Kong-based company with Chinese connection and also had terminal at Karachi thus security clearance couldnt be given.

This year Bombay offshore deep port has been awarded to Dragados of Spain with Indian partners.

This shows how Indians are patriotic and security concerned with Pakistan and China. What a paradox in our overtures to invite Indians. Indians delayed the project by three years causing congestion at its ports but did not compromise security concern.


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## Goodperson

Neo said:


> *India bars Pakistani, Chinese, HK firms​*



Yes I remember restrictions were imposed for Chinese companies around sensitive installations, But what has this to do with Pakistan. L&T JV did win the contract several contracts are canceled by GOI each year do not read too much into it.


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## Neo

Timing is bad, we've just reopened Kashmir trade route.


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## Neo

*Japan offers India record loan for railway ​* 
Thursday, October 23, 2008

TOKYO: Japan on Wednesday offered a record $4.5 billion in loans to India to build a major railway as the Asian powers agreed to step up both economic and military ties.

Indian Prime Minister Manmohan Singh and his Japanese counterpart Taro Aso hastened to deny that the cooperation was aimed at countering China, where both leaders head on Thursday for a summit of Asian and European leaders. Under the agreement signed in Tokyo, Japan will provide an initial 450 billion yen ($4.5 billion) in low-interest loans to build the freight railway between New Delhi and Mumbai.

The 1,468-kilometre (912-mile) railway between Indias two largest cities will also include economic sectors around the tracks. It is aimed at improving a creaky infrastructure seen as a key bottleneck holding back Indias economy.


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## nitesh

Rupee posts biggest single-day gain since 1998- Forex-Markets-The Economic Times

Rupee posts biggest single-day gain since 1998
4 Nov, 2008, 1813 hrs IST, REUTERS

MUMBAI: The rupee posted its biggest single-day gain in more than a decade on Tuesday, driven by another rise in shares, heavy dollar sales by a large corporate, and the unwinding of long dollar positions by banks.

The partially convertible rupee closed at 47.69/71 per dollar, 2 percent stronger than 48.64/65 at Monday's close. Last week, the rupee had dropped to a record low of 50.29. 

It was the biggest single-day gain for the rupee since Jan. 19, 1998, when the rupee had risen 3.6 percent after the central bank had taken a number of steps including a hikes in the cash reserve ratio, repo rate and bank rate. 

"There was a lot of dollar supply and no real demand in the market," said Agam Gupta, head of forex trading at Standard Chartered Bank. Dealers said dollar inflows from a large pharmaceutical company also helped the rupee rally. 

Shares rose 2.8 percent on Tuesday, a fifth straight gain that took them to their highest close in two weeks, on hopes that cuts in bank lending rates would help credit flow more freely and ease a cash squeeze. 

Foreign funds bought nearly $500 million of stocks over Friday and Monday. They have sold a net $12.6 billion worth of Indian shares so far in 2008, helping push the rupee down more than 17 percent. 

They bought a record $17.4 billion in 2007, when the rupee rose 12.3 percent. "The unwinding of long dollar positions based on the non-deliverable forward rates resulted in large stops being triggered, which led to the all-round dollar selling," the chief dealer with a state-run bank said. 

"Closing below 47.75 looks bullish for the rupee, it may strengthen beyond 47 per dollar if it holds near these levels tomorrow," he added. One-month offshore non-deliverable forward contracts were quoting at 48.02/22 per dollar, weaker than the onshore spot rate, but much stronger from 51-52 levels seen last week, indicating some improvement in rupee sentiment.


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## nitesh

http://timesofindia.indiatimes.com/...ion_wont_be_long-term/articleshow/3678981.cms

6 Nov 2008, 0115 hrs IST, Manash Pratim Gohain, TNN

NEW DELHI: &#8216;&#8216;In the US there is no doubt that *there is a recession.* But I can't predict whether it will stay there for two or three years. Yes, it will be there for six months. *Although it will have some impact on other markets, it won't affect as portrayed by the media or as reacted by other markets and the effect won't be long term,''* said Bill Gates, chairman, Microsoft Corporation on Wednesday.

Gates was addressing the students from IIT and other institutes during the launch of the Microsoft DreamSpark. On Barack Obama being elected as the US president he said: &#8216;&#8216;There is always a freshness that come along with an election and this won't be any different. The new administration would try out some new processes and tackle global problems like terrorism and global warming in a new way.'' Making a point on how to use technology in the health sector Gates said:&#8216;&#8216;These are exciting times for science. The challenge is to see how science can help the most needy people of the world. We should make sure that technology is available to everyone, more so for the poorest.''

Gates who also made PM on Wednesday added that: &#8216;&#8216;How to make poor people have access to technology? We have to expose them to these technologies." He also urged the undergraduate students to pursue higher studies saying that opportunities in academics are aplenty.


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## nitesh

India sees huge jump in FDI inflows despite global woes- Finance-Economy-News-The Economic Times


India sees huge jump in FDI inflows despite global woes
8 Oct, 2008, 1458 hrs IST, PTI

NEW DELHI: Amidst global financial crisis, *India's foreign direct investment saw an impressive jump of 124 per cent in the first five months of the current fiscal, while the FDI flows in August went up by huge 180 per cent.* 

The country received FDI of 14.6 bn dollar during April-August 2008 against 6.5 bn dollar a year ago. 

"This (increase in FDI) must be seen in the context of the global economic situation," Commerce and Industry Minister Kamal Nath told reporters while releasing the FDI data. 

He said that the target for the current fiscal would be met despite a difficult financial environment in the world. The FDI target for 2008-09 is 35 bn dollar, while the actual inflows during the previous year were 24.57 bn dollar. 

In August alone, India's FDI was 2.32 bn dollar, a rise of 180 per cent over the corresponding month last year. 

The manufacturing sector received 5 bn dollar during April-August period, showing a rise of 41 per cent over inflows in the year ago period.

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## Neo

* Goldman Sachs cuts India growth forecast to below 7pc ​* 
Tuesday, November 11, 2008

NEW DELHI: Goldman Sachs on Monday cut its growth forecast for India this financial year to below seven per cent and under six per cent next year, blaming the knock-on effects of the global financial crisis.

The investment bank said it was lowering its growth forecast for the current year to March 2009 to 6.7 per cent from 7.5 per cent and next year to 5.8 per cent from 7.0 per cent. 

Asias third-largest economy has grown by at least nine per cent for last few years. The larger-than-expected shock to the financial sector over the past couple of months, and its knock-on effects on both domestic and external demand are responsible for our lower growth projections, Goldman Sachs said.

The gathering financial crisis and credit crunch over the past several weeks has affected Indias financial sector significantly, with both domestic and external liquidity drying up, affecting the financing for corporates, loans for households, and trade credit for exporters, it said. The forecast came as India readied for the G-20 meeting of the biggest developed and emerging nations beginning on Saturday in Washington to map out strategy to tackle the financial crisis.

The Goldman Sachs estimate was below the Indian governments forecast of 7.0 to 7.5 per cent growth for the current year and comes as a host of industries from cars to textiles report lower sales. Last weekend, the International Monetary Fund reduced its growth forecast for India for calendar 2009 to 6.3 per cent, 0.6 percentage points lower than its earlier estimate of 6.9 per cent. It shaved its estimate for Indias growth for 2008 by 0.1 percentage point to 7.8 per cent.

We think the large negative global and domestic financial sector shock will continue to slow activity across the board, in capital expenditure plans, exports growth and consumption demand, Goldman Sachs said. Neighbouring Asian giant China on Sunday unveiled an economic stimulus plan and said it would adopt a more aggressive fiscal approach in a major policy shift amid a slowdown in economic growth.


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## Neo

*India eyes tourism to defy global credit crunch​*
LONDON, Nov 11: Indias tourism industry can overcome the global financial downturn by tapping into its unspoilt countryside, Indian Tourism Minister Sujit Banerjee said here on Tuesday.

By boosting infrastructure outside of Indias bustling cities, the country can maintain its strong growth as a tourist destination, he said at the World Travel Market, the global tourism industrys annual fair in London.

We are very optimistic and we are rebranding our tourism, Banerjee told AFP.

The number of international tourists visiting India has nearly doubled in the last five years, rising from 2.73 million in 2003 to 5.07 million in 2007, according to official figures.

His ministry expects it to slow due to the credit crunch, but is nonetheless hopeful that its plans to diversify the tourist market can keep visitors coming to India in the long-haul.

We are promoting what is called responsible tourism and this is a very innovative rural tourism project which positions Indias rural way of life as a unique visitor experience, said the minister.

We are going into wellness, cruise, rural, adventure and faith tourism and we are absolutely hopeful that well be able to overcome this problem and have a robust growth rate in tourism.

In its 2008 global report, the World Travel Market said countries and firms which embraced the consumer trend for sustainable, environmentally-responsible tourism would be best placed to survive the financial downturn.

Figures for the first nine months of 2008 show 3.87 million foreign arrivals in India, an increase of 10.4 per cent on the same period last year.

Leena Nandan, a junior tourism minister from Delhi also at the ExCeL, said the global downturn was being taken seriously.

But she added: While it would be reasonable to expect this growth may slow down, it is not likely to be completely stopped by the turbulence that is shaking the world economy.

Overall, there is every reason for the Indian tourism industry to be optimistic.AFP


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## nitesh

Sharp dip in inflation makes room for rate cuts- Indicators-Economy-News-The Economic Times

NEW DELHI: Inflation dropped sharply to its lowest in nearly six months in early November as prices of metals and fuels fell, and analysts said the unexpectedly low figure gave the Reserve Bank of India (RBI) room to cut rates.

The substantial easing in inflation comes at a time when Indian policy makers are struggling to protect growth and shield the economy from the impact of the global economic slowdown.

India's wholesale price index, the most widely watched inflation measure, rose 8.98 percent in the 12 months to Nov. 1, well below forecasts for a rise of 10.37 percent, data showed on Thursday.

It was the lowest reading since May 24, when the rate was 8.90 percent and well below early August's peak of 12.91 percent.

Analysts said a decline in global commodity prices, robust domestic agricultural output and a fall in demand in a slowing economy helped bring the rate to single-digits well ahead of earlier expectations.

"Taking comfort from the decline in inflation and responding to the worsening demand outlook, we expect the Reserve Bank of India to cut the reverse repo rate by 100 basis points and the repo rate by 150 points by March 2009," said A. Prasanna, an economist at ICICI Securities.

He said inflation was likely to ease to 4.5 percent by March 2009. The repo is the central bank's main lending rate while the reverse repo is the rate at which it absorbs excess cash from the banking system.

Strong evidence that India's $1 trillion economy, Asia's third largest, is slowing has emerged in recent weeks. Factory output has been sharply lower, manufacturers have trimmed output and put expansion plans on hold. Government excise receipts -- factory gate taxes -- contracted in October.

Economists and policy makers expect growth to slow to 7 percent in the current fiscal year to March, from the close to 9 percent seen in the previous three years.


SLEW OF MEASURES

Despite rebounding in September to a just respectable 4.8 percent, analysts have warned annual growth in industrial output, a key indicator, was set for a severe slowdown after the credit crisis paralysed India's money markets in October.

That pushed up firms' interest costs as they battled tough business conditions and shrinking export markets.

Authorities have taken a slew of measures in recent weeks including cutting the repo by 150 basis points to 7.5 percent and lowering banks' reserve requirements to improve liquidity and boost growth.

India's financial markets, which have borne the brunt of the financial crisis in recent months, were closed on Thursday for a national holiday.

The receding threat of inflation will cheer India's Congress Party-led ruling coalition as it gears up for a string of state elections in coming weeks and federal polls by early 2009.

Suresh Tendulkar, a top economic adviser to Prime Minister Manmohan Singh, told Reuters the latest inflation data provided room for the RBI to act on rates.

"My hunch is the Reserve Bank of India will wait for one or two weeks and then take a call," he said.


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## Neo

*India strikes free trade deal with S Korea ​* 
Thursday, November 13, 2008

NEW DELHI: India and South Korea have negotiated a free trade agreement that is likely to come into effect next year, a report said.

The agreement, concluded after two-and-a-half years of talks, comes as India has been aggressively courting its Asian neighbours to boost trade. The deal is done and the agreement will be signed by December, a senior Commerce Ministry official told reporters late Tuesday in New Delhi, according to the Press Trust of India. It will go to our cabinet (for approval) while the Koreans would need a nod from their National Assembly, the unnamed Indian official said, adding the deal was likely to come into effect next year.

South Korea has also been vigorously courting bilateral trade deals to spur its export-driven economy. The India-South Korea agreement would abolish duty barriers for 90pc of goods traded between the two countries, amounting to $11.2bn worth of bilateral commerce, the report said.


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## Neo

*Indias rich lose 60pc of their fortune as stocks dive: Forbes ​* 
Saturday, November 15, 2008

MUMBAI: The fortunes of Indias wealthiest have been slashed by more than 60 per cent due to the global financial crisis which has sharply pulled down stock markets, according to a new rich list.

Forbes magazine put Mukesh Ambani, chairman of Indias largest private sector firm Reliance Industries, as the countrys wealthiest man, with a net worth of $20.8 billion after losing $28.2 billion in the past year. He overtakes London-based steel tycoon Lakshmi Mittal who topped the list for the past four years. His net worth was $20.5 billion after dropping $30.5 billion on plunging steel prices. The combined net worth of all 40 individuals on the list fell 60.3 per cent to $139 billion from $351 billion, the magazine said.

Mukeshs younger brother Anil, who heads Reliances telecom, power utilities, and financial services businesses, was third on the list with a total wealth of $12.5 billion after losing $32.5 billion. 

These are painful times for Indias tycoons. The countrys once soaring stock markets fell 48 per cent in the 12 months and the rupee depreciated 24 per cent against the dollar, Forbes Asia said. All of this conspired to knock 60 per cent off the combined fortunes of the nations 40 wealthiest. Their total net worth fell $212 billion, to $139 billion, down from $351 billion a year ago.

The list includes two women. Savitri Jindal, who heads the industrial OP Jindal Group was 12th with a net worth of $2.9 billion, while Indu Jain, chairwoman of media group Bennett, Coleman & Co, was 17th with $1.8 billion. Six of last years members had fallen out of the top 40 this year. They include United Breweries chief Vijay Mallya, who also owns premium airline Kingfisher. The magazine gave no figures on Mallyas wealth. Others were nearly wiped out entirely, the magazine said. Indias wind power entrepreneur Tulsi Tanti and his brothers lost 91 per cent of their fortune, amid reports about problems with Suzlons wind blades.

Of the 34 who retained their position, only one increased his wealth. 

Malvinder Singh, the chairman of generic drug firm Ranbaxy, jumped from 28th to 13th after he sold his 34 per cent stake in the business to Japans pharmaceutical house Daiichi Sankyo. Malvinder and his brother Shivinder added $550 million to their combined wealth. Economists say some of these billionaires could continue to see tough business cycles in coming quarters. Auto, steel and finance companies have been among the hardest hit in the global financial turmoil.

Export-oriented firms, commodity-driven businesses and software firms with financial clients will face rough times, said Siddhartha Sanyal, economist with brokerage Edelweiss Securities. R Balakrishnan, executive director at Centrum Broking said paper wealth for these billionaires will continue to move sharply up or down, depending on what happens with the world economy.


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## Neo

*India takes steps to sustain growth​*
MUMBAI, Nov 15: The global slowdown is having a bigger than expected impact on Indias economy, the central bank said on Saturday as it took the latest in a series of steps to improve money market liquidity and help exporters.

As world leaders met in Washington to address the worst financial crisis in 80 years, the Reserve Bank of India (RBI) said more domestic steps, including export credit measures, were imperative to sustain growth momentum.

The central bank has already reduced its key lending rate, slashed banks cash reserve requirements and cut their bond reserve requirements in the past month to release funds into a banking system strained by the global financial crisis.

There are indications that the global slowdown is deepening with a larger than originally expected impact on the domestic economy, particularly for the demand conditions in the medium and small industry sector and export-oriented sectors, it said in a statement posted on its website.

Particular attention needs to be paid to maintaining the viability of sectors that contribute significantly to employment and exports. The global credit crisis paralysed Indias money markets last month, prompting the bank to cut its main lending rate by 150 basis points to 7.5 per cent and pump in cash. But firms interest costs have risen as they also battle slowing demand and shrinking export markets.

Factory output growth has fallen, manufacturers have put expansion plans on hold, and government receipts from factory gate taxes contracted in October.

There is definitely a liquidity problem which persists even now and needs to be addressed, Saugata Bhattacharya, an economist with Axis Bank, said.

The export sector of the economy is extremely vulnerable as supply of funds is squeezed, Bhattacharya said.

Indias $1 trillion economy grew at an annual rate of 9 per cent or above in the past three fiscal years, second only to China among major economies.

The central bank forecast last month it would grow 7.5 to 8.0 per cent this fiscal year, which ends in March, but economists say growth is more likely to be about 7 per cent.Reuters

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## Neo

*India faces 500,000 textile job losses in five months ​* 
Saturday, November 22, 2008

NEW DELHI: The Indian textile industry, the countrys second-largest foreign exchange earner, will lose half a million jobs by April 2009 due to the global financial crisis, a government official warned on Friday.

According to the estimates of the textile ministry, there will be job losses of about 500,000 in the next five months, Commerce Secretary G K Pillai told reporters in New Delhi. Pillai said the sector, estimated to employ around 38 million workers, was facing a severe crunch because of deepening international financial turmoil.

The sector is Indias single-largest foreign exchange earner and accounts for about eight per cent of its gross domestic product. The sector accounts for 20 per cent of Indias industrial production and more than 30 per cent of the countrys export earnings, according to government figures.


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## Neo

* Indias forex reserves dip by $5bn ​* 
*Indian rupee has depreciated 26.89 per cent against the US dollar during 2008​*
Sunday, November 23, 2008
MUMBAI: Indias foreign exchange reserve fell by $5.01 billion to $246.35 billion during the week-ended Nov 14 as the Reserve Bank of India intervened in the markets to check steep depreciation of the rupee, the Business Standard reported on Saturday. In addition, the dollar has strengthened against most international currencies in recent months. On Nov 14, the rupee had closed at 49.01 against the US dollar, 2.83 per cent lower than the closing level of 47.66 on November 7. During the week, foreign institutional investors were net sellers to the tune of $325 million in the equity markets thereby putting pressure on the rupee.

Repeated intervention by RBI in the foreign exchange market has meant that Indias foreign exchange reserves have dipped by $63.37 billion since the end of March 2008. The reserves are nearly $29 billion lower than the level at the end of December 2007. Forex reserves fell below the $250 billion mark after more than 13 months.

For the week-ended September 28, 2007, Indias foreign exchange reserves were at $247.76 billion. The rupee has depreciated 26.89 per cent against the US dollar during 2008 as foreign institutional investors have been pulling out their investment from India to meet the requirements in their home markets. The rupee closed at 50.02 against the dollar on Friday, compared with 50.15 on Thursday, according to data compiled by Bloomberg. According to the latest RBI Bulletin, the central bank sold $9.65 billion between April and September 2008 to check the Indian currency from weakening. The data comes with a lag of around two months. FIIs have intensified sell off from the second half of September after the financial turmoil became more pronounced. Since Sept 26, the countrys foreign exchange reserves have dropped by over $45 billion.

The heavy intervention by the central bank in the forex markets is also putting pressure on liquidity as RBI sells dollars in the market and sucks out rupee resources. It is cited as one of the major factors affecting domestic liquidity. Reflecting the weakening of the Indian currency against, in rupee terms, foreign exchange reserve rose by Rs10,66,944 crore (Rs10669.44 billion) to Rs12,18,263 crore (Rs12,182.63 billion) during the week-ended Nov 14.


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## Neo

Wrong thread


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## Neo

*'We want to promote trade ties with India and China': Zardari offers India to sign nuclear-free South Asia pact ​* 
ISLAMABAD (November 23 2008): President Asif Ali Zardari on Saturday offered India to sign nuclear-free South Asia treaty to remove the 'Sword of Damocles' hanging over the entire region saying that Pakistan was against use of nuclear weapons and India should also come forward to sign the treaty.

"I was against the nuclear warfare and don't appreciate it as we don't want to get into that position where we use nuclear weapons," he said in his video conference address to the Leadership Conference organised by Indian daily Hindustan Times at New Delhi.

Zardari said that Pakistan always advocated signing of nuclear-free South Asia treaty to give people of this region a complete peace of mind and sense of security. To a question, Zardari said he was sure that he can get parliament support on the nuclear free pact. He asked the audience whether India too can move forward in this direction?

He said despite differences, Pakistan and India have a great future together and no country should feel threatened from the other. "We have to take Pak-India relationship to a new level, where we can ensure a better future for our people," he added.

"I do not feel threatened by India and India should not feel threatened from us, he said, adding that the two countries should now learn to live with peace and enhance co-operation in trade, economy and other sectors. "We believe in trade not aid. We want to promote trade relations with our strong neighbours China and India," Zardari said.

Both Pakistan and India can together become trading powers like Europe and could also work together on the economic front, he said, adding that the two countries have huge potential in trade and economy and once it was utilised it will benefit both the countries and take them towards new heights. "In spite of our disputes, tussle and tension, we have a great future together," he maintained.

He said he would admit that the two countries have challenges but stressed that there was need for exploring the opportunities that exist between the two countries. Today we have a parliament which is already pre-agreed upon a friendly relationship with India, Zardari added.

Responding to a question regarding terrorism and extremism, he said he himself was a victim of terrorism as he lost his wife (Benazir Bhutto) at the hands of terrorists. "We are facing the challenge of terrorism and extremism and I am sure that with the help of the world we will get rid of this menace," he said.

The President said both Pakistan and India were facing more challenges from inside than outside and if both countries join hands these challenges will prove little. "In every Pakistani there is little Indian and in every Indian there is a little Pakistani," Zardari said.

To a question, Zardari said the bilateral ties remained strained during the cold war, but he hoped that the people of the two countries could now move together for a bright future. To another question regarding his offer to former President Pervez Musharraf to join the government, Zardari said: "It is the parliament which can decide."

In response to another question about the country's current economic situation and his plans to improve it, he said he wished to bring out the real strength of Pakistan. He said Pakistan also wants to explore India's huge market of over one billion people and another 1.2 billion in China, and take advantage of the region and take my country's development forward.

President Zardari said he has brought a message of peace and love from Pakistan, as he was also the bearer of the legacy of late Zulfiqar Ali Bhutto and Benazir Bhutto. Bhutto was the architect of the first Pakistan-India treaty - the Simla agreement, he said, adding that he also mentioned the treaty signed between late Benazir Bhutto and Indian Prime Minister Rajiv Gandhi.

Zardari stressed the need to change the current Pakistan-India mindset which has kept the two nations away from each other. When asked about joint Pakistan-India operation to fight sea-piracy, he said that if he was invited he will definitely join it and do whatever he and his country can.

He urged people of India and Pakistan to initiate a dialogue for resolving the long-standing issue of Kashmir. He said after the dialogue between the two people, the politicians should suggest a solution which can render justice to the people of Kashmir. Asked about the long delay in getting a visa, he proposed adopting a methodology that uses an e-card instead of a passport, to ease the way the two people cross into each other's territory.

He said he looked forward to interacting with US President-elect Barack Obama to discuss entire bilateral issues and not just terrorism. Asked whether he missed his late wife, Zardari said: "spiritually I feel her with me all the time. She is guiding us, not just me, but all the political forces in the country."


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## nitesh

Rs 5 cut in petrol price, Rs 3 in diesel by Dec-end- Oil & Gas-Energy-News By Industry-News-The Economic Times

Rs 5 cut in petrol price, Rs 3 in diesel by Dec-end
25 Nov 2008, 1751 hrs IST, PTI

NEW DELHI: The government is likely to cut petrol price by Rs 5 a litre and diesel by Rs 3 per litre after Assembly elections in six states are completed on December 24.

"Crude has fallen from all-time high of $147 per barrel to around $50 now. Naturally, there are expectations that petrol and diesel prices should be reduced and we will do that," Petroleum Minister Murli Deora told reporters in New Delhi.

The prices would be cut before December-end.

The government had in June raised petrol price by Rs 5 a litre, diesel by Rs 3 per litre and domestic LPG by Rs 50 per cylinder as crude oil prices
had climbed to record highs. The hike is now expected to be rolled back.

"We have to reduce prices but it will happen after assembly elections," he said.

As a result of fall in the international oil prices, state-run Indian Oil [Get Quote], Bharat Petroleum and Hindustan Petroleum started making profit on sale of petrol from November 1 and on diesel from November 15. 

Petroleum Secretary RS Pandey said though margins on petrol and diesel had turned positive, the companies were still losing money on domestic LPG and kerosene.

The three firms lose Rs 22.40 a litre on kerosene and Rs 343.49 per LPG cylinder, which together work out to Rs 80 crore (Rs 800 million) per day.

Pandey said the Cabinet Committee on Economic Affairs would be informed of the factual position and directions sought.

The three companies suffered a net loss of over Rs 14,000 crore (Rs 140 billion) in the first-half of the current fiscal and ways and means of making it up were to be worked on, he said.

"As per our calculations, the oil companies will end the fiscal with a revenue loss on fuel sales of Rs 110,000 crore (Rs 1,100 billion).

How to make up for this will also have to be decided by the CCEA," he added.


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## nitesh

Monorail in Mumbai from Nov 29-Mumbai-Cities-The Times of India

Monorail in Mumbai from Nov 29
25 Nov 2008, 1054 hrs IST, PTI


MUMBAI: Come November 29 Mumbaikars' dream of smooth commuting will get a major boost with the laying of the foundation stone for India's first Monorail project at the metropolis.

"Prime Minister Manmohan Signh is likely to lay the foundation stone on November 29. The venue will be Mahatma Gandhi Ground in Chembur," said Dilip Kawathkar, joint project director (PR) of Mumbai Metropolitan Regional Development Authority (MMRDA).

The 19.54-km-long monorail, which will connect south Mumbai to the eastern suburbs (Jacob Circle to Chembur via Wadala), is expected to be completed by May 2011, Kawathkar said.

Malaysian-based Scomi Engineering in collaboration with Larsen & Toubro will execute the Rs2,4600cr project.

"The route will have 18 stations and each train will have four bogies. During peak hours, around 10,000 to 15,000 passengers are expected to travel per hour. It will have an average speed of 80 km per hour.

"A car depot facility spread across eight hectares will come up at Wadala," Kawathkar said.

MMRDA has also cleared the proposal for a nine-km monorail connecting Banra-Kurla Complex and Bandra railway station in Central Mumbai in the second week of October.


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## Bushroda

*Automakers refuel on India's consumers*
By Geoff Hiscock
For CNN
November 14, 2008

(CNN) -- When Renault unleashed its Formula 1 race cars and drivers on the hallowed ground of New Delhi's Rajpath boulevard on November 9 for a display of Grand Prix razzle-dazzle, the car-loving fans in the Indian capital went wild.






*A Renault Formula 1 car performs during a roadshow 
in New Delhi, India, on November 9.*

For Renault, it was a branding exercise in what is quickly becoming one of the world's most important hubs for the production, sale and export of small cars.

As car sales slump globally -- down 24 percent in October year-on-year in the United States alone -- auto makers are shifting production to lower-cost locales where they can take advantage of what they hope eventually will be better times ahead.

Renault is just one of many global brands investing heavily in the Indian auto sector, building alliances with domestic manufacturers and setting up state-of-the-art plants that will see India triple its car production to 5 million units within five years.

Honda, Toyota, General Motors, Ford, Volkswagen and Nissan are among those with great expectations for their Indian operations, and between them have around US$6 billion earmarked for expansion.

South Korea's Hyundai has already taken a handy lead in this crowded market, launching its i10 and i20 small cars with India as its production base for exports to Europe.

It recently doubled its capacity at its Chennai plant to 600,000 units a year and is now India's biggest car exporter, shipping a record 26,000 units in October 2008. Hyundai also has about 18 percent of the domestic Indian car market.

Hyundai's great rival is the powerful combination of Japan's Suzuki and domestic partner Maruti, which kicked off the modernization of India's nascent car industry in late 1983 with the Maruti 800.

Until then, India's few car buyers were restricted to locally made clones of outdated European cars such as the Morris Oxford (the platform for Hindustan Motors' Ambassador) and the Fiat 1100 (platform for Premier Motors' Padmini), plus a handful of imports for the favored few.

There was no culture of technological innovation and little chance of car ownership for the masses until the Maruti 800 came along.

Based on an earlier Suzuki Alto model, the 0.8 liter-engine Maruti minicar revolutionized car ownership in India and has dominated the market ever since. Even today, with the advent of many new competitors, Maruti has 55 percent of the passenger car market, and has set itself the ambitious goal of 1 million domestic sales across its 11-model range by 2010-11, up from 712,000 in 2007-08.

Later in November it will launch its 1-liter global car, known in India as the A-Star, and will begin exports of the car to Europe in early 2009. Maruti's parent Suzuki, which now has 54 percent ownership of Maruti Suzuki India Ltd, has big plans for its Indian operations, given what it says is a global trend to small cars.

Even with the slowdown, by next year as much as a third of Suzuki's worldwide sales could come from India.

Other Japanese makers share Suzuki's enthusiasm for India's auto potential. "Our faith in India's growth story remains intact," Honda Motors CEO Takeo Fukui said when he opened a new plant in Rajasthan in September. This plant eventually will make the Honda Jazz, another small car destined for export to Europe by mid-2009.

Toyota, through its joint venture Toyota Kirloskar Motor, aims to lift its Indian sales from about 55,000 last year to 400,000 by 2015 for a 10 percent market share. To help meet that ambitious plan, it will open a new small-car plant by late 2010 near Bangalore in India's south.

General Motors has a new 140,000-unit car plant near the automotive production hub of Pune that lifts its annual capacity to 225,000 units, and is spending another US$200 million on a new engine plant.

Likewise, VW is spending $300 million on a new Pune plant that will begin production in 2009, with an eventual capacity of 300,000 small cars a year. Ford, too, is spending $500 million to increase its engine and vehicle production at Chennai to 200,000 units by 2010.

Nissan, in alliance with key shareholder Renault, has a joint venture with local producer Mahindra & Mahindra to make the Logan passenger car.

Nissan, which says it aims to sell 200,000 cars a year in India by 2012, also is investing US$1 billion with Renault in a plant at Chennai in India's south, which will turn out 400,000 cars a year when it hits full capacity. The first cars, for export and local sale, are due in 2010.

The Renault-Nissan alliance has a separate joint venture with India's two-wheel specialist Bajaj Auto to produce an ultra light car (ULC) at Chakan, near Pune. Renault spokesman Ashish Sinharoy told CNN.com that construction work on the 400,000-unit plant probably would start in the first quarter of 2009.

"We intend to have the first cars roll out in 2011, as per the schedule," he said. The ULC is designed to compete with other low-cost cars in India, including Tata Motor's long-awaited Nano "people's car." 

The Nano, due to go on sale by year's end as the world's cheapest car at about US$2,500, is pitched at a whole new car ownership market -- people who now aspire only to buy a two-wheel motor scooter or motor cycle. That prompted Bajaj to promise its own four-wheel challenge.

At the auto industry's annual convention in New Delhi recently, Commerce Minister Kamal Nath termed the current slowdown a "passing phase" and said auto exports should be worth $25 billion "in the next decade."

Despite Nath's optimism, India is still a small player globally. It produced just 1.76 million passenger cars and 545,000 commercial vehicles in the year to March 31, 2008, of which about 218,000 cars and 60,000 trucks were exported.

That puts it well behind Japan (11.6 million passenger and commercial vehicles in 2007), the U.S. (10.8 million), China (8.8 million), Germany (6.2 million) and South Korea (4.1 million). France, Brazil, Spain and Canada also are bigger producers than India.

But the momentum is with India. It is adding capacity faster than the developed markets, and by 2014-15 could produce 5 million cars, including a million for export

*Geoff Hiscock writes on Indian business and is the author of "India's Global Wealth Club" (2007) and "India's Store Wars" (2008), both published by John Wiley & Sons.*


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## Chanakya.10

ONGC acquisition of Imperial "well on track"
*ONGC acquisition of Imperial "well on-track"*
Press Trust of India
Wednesday, November 26, 2008 (New Delhi)

State-run Oil and Natural Gas Corp on Wednesday said its $2.1 billion acquisition of UK-listed Imperial Energy Corp Plc was "well on-track" and the fall in global oil prices would not be a constraint in the buyout.
"There is no need to get unduly concerned about the deal. It is on track and we are in the process (of acquiring Imperial)," ONGC Chairman and Managing Director R S Sharma told reporters at the Economic Editors' Conference in New Delhi.
He, however, did not say by when the acquisition would be completed. "The deal is in process and is on track." 
ONGC Videsh Ltd (OVL), the overseas arm of ONGC, is not revising the 12.50 pounds a share buyout price of Imperial, as it had valued the company's in place 2P (proven and probable) oil and gas reserves at $2.5-3 per barrel. '2P' tag means a 50 per cent likelihood of recovery of the reserves.
Imperial explores for oil in Russia's Siberia region and had the equivalent of 920 million barrels of proven and probable oil reserves as on December 2007, according to an audit by DeGolyer & MacNaughton.
Acquisition of Imperial will cost OVL about 1.4 billion pounds or $2.1 billion at current exchange rates. There have been speculations that OVL may revise its bid price as crude oil prices have fallen from $115-120 a barrel, when it made the offer in August to around $50 per barrel currently.
OVL has time till December 9 to make an offer to acquire all outstanding shares of Imperial. The offer would remain open for 28 days and OVL would take another 14 days thereafter to make payments to shareholders tendering their shares.
Sharma said all of the funding for the acquisition was in place. ONGC is lending most of the money to OVL at 6 per cent interest rate, while $one billion has been tied-up in bridge loan. 
ONGC Videsh Ltd plans to delist Imperial from the London Stock Exchange if 90 per cent of shareholders tender their shares. "OVL wants Imperial to be delisted. It may re-list the company if and when it needs money," a source said.
OVL, earlier this month won the Russian government's approval for taking over Imperial, which has assets in Tomsk region of western Siberia.
Russia's Federal Anti-Monopoly Service (FAS) granted approval for the takeover in respect of ownership of Russian entities by entities controlled by a foreign government. The Government of India holds 74 per cent stake in ONGC.
Prior to this, FAS had cleared the acquisition under anti-monopoly regulations and stated that Imperial's assets were non-strategic.
Since July, Imperial has been producing 11,000 barrels of oil per day (bpd). Output will reach 25,000 bpd by fiscal-end with 18 wells coming on stream. Production would rise to 35,000 bpd (about 1.75 million tons) by 2009-end.
The company also plans to start commercialising gas from 2010.
Imperial board, on August 26, had agreed to the takeover bid by OVL's wholly owned subsidiary, Jarpeno Ltd.


----------



## Neo

*India's economic growth slows to 7.6 percent​*
Fr, Nov 28th, 2008

NEW DELHI  India's economy grew at its slowest pace in four years in the third quarter as the global slump took a toll on exports and foreign investment.

Gross domestic product for the July-September period expanded 7.6 percent from a year earlier, down from 7.9 percent in the previous quarter and 9.3 percent in the third quarter of 2007, the government said Friday.

That was the slowest rate since 2004, but slightly above expectations, said Saumitra Chaudhuri, a member of the Prime Minister's Economic Advisory Council and chief economist at the credit rating agency ICRA Ltd., a Moody's affiliate.

"It is slowing, there's little doubt about it," Chaudhuri said.

The decline could ratchet up pressure on India to further cut interest rates in hopes of keeping growth from slipping too fast. Deadly attacks carried out this week by suspected Muslim militants in Mumbai, the country's financial capital, will likely add to the pressure.

The decline comes amid a softening of demand for Indian exports as economies around the world start to wither. Foreign investment, a key driver behind India's economic rise in recent years, has become more scarce, Chaudhuri said.

"If that slows down, the economy will slow down and that's exactly what's happening," Chaudhuri said.

Manufacturing growth continued to decline, falling to 5 percent in the most recent quarter from 9.2 percent a year earlier.

In trade, hotels, transport and communication industries, growth was stable at 10.8 percent .


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## Neo

*India stock market gains after terrorist attacks​*Friday November 28, 2008

*Indian stocks advance after trading resumes in wake of Mumbai terror attacks​*

MUMBAI, India (AP) -- India's stock market gained Friday, a day after trading was suspended due to deadly terrorist attacks in the country's financial capital.
The Sensex Index climbed 66 points, or 0.7 percent, to close at 9,092.72. The benchmark opened down more than 1 percent and then fluctuated in and out of positive territory before finishing higher.

Trading on the Bombay Stock Exchange was closed Thursday after suspected Muslim militants staged coordinated attacks across Mumbai, India's financial capital, killing at least 143 people. The exchange is located in Mumbai.


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## nitesh

Sensex firm; realty, metal stocks gain- Market News-Stocks-Markets-The Economic Times

Sensex firm; realty, metal stocks gain
1 Dec 2008, 1309 hrs IST, ECONOMICTIMES.COM

MUMBAI: Equities bounced back from day&#8217;s low on Monday as some short covering continued in realty and metal stocks. But auto scrips were laggards due to declining sales.

At 12:50 pm, Bombay Stock Exchange&#8217;s Sensex was at 9265.64, up 172.92 points or 1.90 per cent. The 30-share index touched a high of 9326.68 and a low of 9152.44.

National Stock Exchange&#8217;s Nifty was at 2814.65, up 59.55 points or 2.16 per cent. The broader index hit a high of 2832.85 and a low of 2748.90.

&#8220;Coming week may help "break out traders" as the trading range is narrowing down. The prudent ways to trade in such types of market are trade "patiently" according to the major range and trade "aggressively" on the break out or break down. We would like to continue with our analysis of the last week. We were of the view that the bearish consensus is at its peak. If we look at the trading pattern of the last week then one can clearly notice that at the lower boundary of the
trading range 2630/8600 there was not at all impatient behavior from bull traders that generally happens if long positions are deep out money (into big losses) on their positions. If our analysis stands true then we may expect decent up move in the market may be up to 2970/10100 with a minor resistance at 2865/9650 on the dismissal of 2795/9185 on closing basis. The supportings for the market to move higher are positive global cues and likely appreciation of Indian rupee,&#8221; said Kotak Securities report.

Sterlite Industries (7.20&#37, Jaiprakash Associates (6.96%), Reliance Communications (5.63%), TCS (5.06%) and ONGC (4.26%) were the top Sensex gainers.

Maruti Suzuki (-4.51%), Tata Power (-2.86%) and Mahindra & Mahindra (-2.82%) were the top losers.

Amongst the sectoral indices, BSE Realty Index was up 3.35 per cent, BSE Metal Index moved 3.26 per cent higher and BSE Oil&gas Index was up 3.21 per cent.

BSE Auto Index was down 2.35 per cent. The slack in demand has been hitting auto industry badly. Shares of auto major, Maruti Suzuki, took a beating Monday after the automaker posted dismal sales for the month of November.

Market breadth was positive on the BSE with 1124 advances and 601 declines.


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## Flintlock

What is this? defiance? Is it reflecting the mood of investors?

Or are they simply so unconcerned about these events that it simply failed to register?


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## nitesh

^^

Flint this is combination of all. But any way the sensex ended lower taking global queue.


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## Geromix

Flintlock said:


> What is this? defiance? Is it reflecting the mood of investors?
> 
> Or are they simply so unconcerned about these events that it simply failed to register?



Even in the past after attacks like these the markets have showed great resilience.

The fundamentals of the economy are more important in the long run so i suppose the India Growth Story is intact.


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## Neo

*Manmohan takes over economy hot seat​*
NEW DELHI (December 01 2008): India's economy will now be steered by the man who in 1991 protected it at its most vulnerable moment and then opened it up to the world - Prime Minister Manmohan Singh.

Seen by analysts as an honest but weak leader during his time in the top job, Singh takes over the economy as well as his job as premier, perhaps only temporarily, after choosing finance minister Palaniappan Chidambaram to lead a Home Ministry under fire after last week's Mumbai attacks.

Singh, accustomed to the economy having served as finance minister and central bank governor in the past, takes charge just as the global financial crisis is expected to cut impressive growth averaging 9 percent in the last three years.

"He has great experience in economic management in various capacities," said D.K. Joshi, principal economist at domestic ratings agency Crisil. "This will help in overall economic management in the current scenario." The three-day rampage by gunmen in the financial capital, Mumbai, and rising anger over a string of bomb attacks in other cities, forced the resignation of Home Minister Shivraj Patil, who has been attacked by his critics as ineffectual and aloof.

Singh had already started paying more attention to the economy as the global financial crisis made its presence felt on Asia's third-largest powerhouse, forcing key export markets into recession and freezing credit markets.

He appointed Duvvuri Subbarao, a former finance secretary, as the central bank governor and brought in Raghuram Rajan, a former IMF chief economist, as his adviser.

"I would like to assure each one of you that the government will take all necessary monetary and fiscal policy measures on the domestic front to protect our growth rates," Singh recently told top business leaders.

"On the international front, we are working closely with other countries to ensure co-ordinated policy action and increased development co-operation for the containment of this crisis."

HUMBLE BEGINNINGS: 

Born into a poor Sikh family in a part of British-ruled India now in Pakistan, Singh studied by candlelight to win scholarships to Cambridge and Oxford, earning a doctorate with a thesis on the role of exports and free trade in India's economy.

But he has never won an election and sits in the mostly nominated upper house of parliament. He became prime minister by default, when Congress leader Sonia Gandhi turned down the job after leading the party to victory in 2004 elections, fearing her Italian ancestry would be used by Hindu-nationalist opponents to attack the government.

During his stint as finance minister from 1991 to 1996, Singh saved an economy facing a balance of payments crisis and unveiled far-reaching reforms which began opening insular India to the world. As prime minister he has faced criticism for failing to push through more reforms, his government hobbled by opposition from communist allies opposed to greater liberalisation but whom Singh needed for a parliamentary majority. Singh and his party finally stood up to the left over a nuclear energy deal with the United States, mending fences with a regional party, securing an alternative majority and winning a tense vote of confidence last July.

Now the government's chances of re-election at a general election that has to be held by May next year have been undermined by the attacks in Mumbai and the faltering economy. Whether they have been fatally weakened may well depend on the performance of Singh and new Home Minister Chidambaram over the next few months.


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## nitesh

Petrol prices cut by Rs 5, diesel by Rs 2 per litre-India Business-Business-The Times of India

Petrol prices cut by Rs 5, diesel by Rs 2 per litre
5 Dec 2008, 1944 hrs IST, PTI


NEW DELHI: The government on Friday announced a Rs 5 and Rs 2 a litre interim cut in petrol and diesel prices, respectively, in a move that will help put the lid on inflation and foster economic growth.

Indicating that further cuts were in the offing, Petroleum Minister Murli Deora told reporters after a meeting of the Cabinet Committee on Political Affairs that today's reduction was an "interim measure" and that the government would continue to watch the global prices of crude oil.

Following the reduction that takes effect midnight tonight, petrol will cost Rs 45.62 a litre and diesel Rs 32.86 in the national capital. There is no change in the prices of LPG (cooking gas) and kerosene.

The government had in June raised the prices of petrol and diesel by Rs 5 and Rs 3 a litre, respectively, and that of LPG by Rs 50 a cylinder to protect oil marketing firms against losses on account of a rally in crude prices.

The hike had then propelled inflation to double digits and stayed so for five months. Inflation cooled to 8.40 per cent as of November 22, but is still above the RBI's tolerance level.

Crude oil subsequently climbed to a record high of USD 147 a barrel in July, but has now come to USD 43.5, a four- year low.

"This (price cut) will help in reducing inflation," Deora said, adding that Prime Minister Manmohan Singh and Congress President Sonia Gandhi were committed to protecting the interests of the poor and middle-class.

On Saturday, RBI is expected to ease its monetary policy stance and signal banks to lower interest rates, which will make borrowings cheaper, increase spending and push economic growth.

The government too will on Saturday announce a fiscal stimulus for the housing, auto and export sectors, as also support for infrastructure sector to prop up GDP growth that is threatened by the global slowdown as also poor investor confidence following last week's terror attacks in Mumbai.

Friday&#8217;s fuel cut decision will have a revenue implication of Rs 5,798 crore for oil marketing companies this fiscal.

Under-recoveries of OMCs as of today were calculated at Rs 98,512 crore and this will now increase to Rs 1,04,310 crore.

Prior to the reduction, state-run oil firms were earning a profit of Rs 14.89 a litre on petrol and Rs 3.03 on a litre of diesel. However, they continue to sell kerosene at a loss of Rs 17.26 a litre and Rs 148.89 on every LPG cylinder.

Despite the oil companies losing close to Rs 27 a litre on kerosene, its prices have not been raised, Deora pointed out.

"India is the only country in the world where kerosene is cheaper than mineral water," he said. Kerosene is retailed at Rs 9.09 a litre.


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## daredevil

^^^ Elections call ha...


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## Zaheerkhan

Business not deterred' by Mumbai attacks

MARCUS GEE

Globe and Mail Update
December 3, 2008 at 6:00 AM EST


If the group that masterminded the attack on Mumbai last week thought it was going to frighten away international business, they should listen to Joe Repovs.


Mr. Repovs is the founder of a Toronto roll-forming company, Samco Machinery Ltd. He and his executives travel often to India, helping Tata Motors produce the chassis for its much-anticipated, low-cost mini-car, the Nano. He has been several times to Mumbai and has even lunched at the famous Taj Mahal Palace & Tower Hotel, raided and seized by the terror squad that rampaged through Mumbai.


So is the attack making him hesitate to do more business in India? Not for a second. Hearing about the attacks, he said I was absolutely stunned and horrified. I was sad and angry. It's a terrible, terrible, terrible thing.


But we're not stopping. We're not deterred. I believe in the long-term future of India and our place there. The company, he said, is moving forward with a new plant in India and it has no intention of quitting.


Other Canadian businesses have similar things to say. Peter Sutherland, a former Canadian ambassador to India, advises clients on doing business there for the Toronto law firm Aird & Berlis. He says that none of them are telling him they're going to pull back from India because of what happened in Mumbai. Most of them have been doing business in India for a while and they know it's not always smooth sailing. They're not going to be deterred by something like this. A good prospect is worth pursuing.


India, from Canada's point of view, is much more than a good prospect. It's a golden opportunity. With its rising middle class, its bold, outward-looking companies, and its rich mining and commodity prospects, it is a place Canadian companies with global ambitions simply have to be. To walk away now would be to satisfy the fondest hopes of the Mumbai terrorists, who struck at its financial heart  and the two luxury hotels where foreign business people stay  with the obvious design of shattering international confidence.


One of the biggest Canadian companies in India, Sun Life Financial, says it has no thought of pulling back. Sun Life has been thriving in India for nearly a decade. Its Indian subsidiary, Birla Sun Life Financial Services, has 130,000 agents around the country. To the company's obvious relief, none of its Indian staff were hurt in the attack.


Spokesman Michel Leduc says that considering India's young, growing population and its tremendous growth rate, you've got demand that is going to keep on growing. We remain confident in India as a place to do business.


That must be music to Indian ears. Even before the Mumbai terror, the Indian economy was slowing as the effects of the global economic slowdown sank in. Growth decelerated to 7.6 per cent in the third quarter, the slowest since many years. The main index of Indian stocks, the Sensex, has lost more than half its value this year as foreign investors bailed out.


Mumbai, the financial and commercial capital, is especially vulnerable. Like any big, cosmopolitan world city, it is a tempting target for terrorists. Forty per cent of India's foreign trade moves through Mumbai, which accounts for a quarter of the country's industrial output. There were major attacks on the city in 1993 and 2006.


But Mumbai is also resilient, and in recent years it has been the symbol of the exuberant optimism that has infected India as it grows in wealth and confidence. Indians are determined not to let the Mumbai attack quench that spirit.


Joe Repovs watched on television the other day as Ratan Tata, the father of the Nano and one of India's leading business tycoons, talked about the attack. Mr. Tata's great-grandfather, Jamsetji Tata, commissioned the building of the Taj, a grand edifice on Mumbai's waterfront. The present Mr. Tata's company still owns the hotel and has vowed to rebuild.


We cannot replace the lives that have been lost and we will never forget the terrifying events of last night, but we must stand together, shoulder to shoulder, as citizens of India, and rebuild what has been destroyed, he said. We must show that we cannot be disabled or destroyed, but that such [a] heinous act will only make us stronger.


He has tremendous resolve that they will not be defeated, Mr. Repovs said. I think we can all take something from that.

Link:
http://business.theglobeandmail.com/...umnsBlogs/home


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## Flintlock

^Its business as usual - the stock market should be proof enough.


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## Nihat

> Govt pumps in Rs 20,000 crore to boost economy
> 
> CNN-IBN
> 
> 
> SHOT IN THE ARM: Planning Commission's Montek Singh Ahluwalia says if required, the Govt will take more steps.
> 
> 
> * Free Demat A/c From SBI: 1000+ Demat Branches. View Holdings & Statements Online. Register Now!
> 
> * Government: Lee Kuan Yew Sch of Public Policy Get the best Scholarships in Asia!
> 
> New Delhi: The Government on Sunday announced a Rs 20,000 crore fiscal stimulus package to boost the economy, but a dissatisfied India Inc said there isn't much to cheer about.
> 
> The measures proposed under the package include:
> 
> * A 4 per cent cut in Cenvat rate on non-petroleum products
> 
> * An additional Rs 350 crore for export incentives
> 
> * An additional Rs 1,400 crore for the textile sector
> 
> * Infrastructure Finance Company Ltd to raise Rs 10,000 crore through tax-free bonds by March
> 
> * PSU banks to announce package for home loans up to Rs 20 lakh
> 
> o
> 
> RBI cuts repo rates by 100 bps, banks play it safe
> o
> 
> Car costs to go down, makers welcome package
> * Import duty on naphtha to be eliminated to boost the power sector
> 
> * A refinance facility of Rs 7000 crore for SIDBI to facilitate credit flow to SMEs
> 
> * Export duty on iron ore fines to be eliminated
> 
> Dr Amit Mitra, Secretary General of FICCI, said The fiscal package is pointing in the right direction, but more could have been done to increase the growth trajectory."
> 
> The Government, however, defended its move.
> 
> "This is not necessarily the only thing that we are going to do, it has to be in case that we have to watch the situation closely and both on the monetary and on the other side all relevant authorities have taken the view that we won't hesitate to take additional action if necessary," said Planning Commission Deputy Chairman Montek Singh Ahluwalia.
> 
> The government appeared confident that the stimulus package would ensure an economic growth rate of 7 per cent, as the across-the-board 4 per cent excise duty cut, additional expenditure of Rs 20,000 crore and measures taken by the RBI would boost demand for industrial goods.
> 
> Indian economy grew by nine per cent in 2007-08 and, according to estimates of various think tanks and Reserve Bank, is estimated to slowdown in the current fiscal mainly on account of the fallout of the global financial meltdown which has pushed economies of several developed nations into recession.
> 
> Maruti chairman RC Bhargava told CNN-IBN that the company will pass on the 4 per cent cut in Cenvat to consumers. That also means that a cut in prices may be announced as early as midnight of Sunday, dawn of
> 
> Real estate developers are unhappy with the package. The sector has expressed that it's an eyewash and does not provide anything for the sector.
> 
> "I am completely disappointed from the fiscal package. We were expecting much more. The package gives only an eye wash. They are talking of only upto 15-20 lakh but what is available in this country? Input costs and taxes are too big at this point of time," said Chairman of Parsvnath Developers, Pradeep Jain.
> 
> Exporters are disappointed too. They say the package falls short of their expectations.
> 
> CNN IBN asked the Commerce Secretary, G K Pillai if a second installment was in store, especially for the exports sector.
> 
> "Yes, we would look at if there were any other sectors that are facing difficulties in the coming months because the slide in exports has begun technically in October and November. So we will look at whether there are any other, especially the labour employment sector that need help. we would definitely look at that too. But for the time being, in light of the global slowdown, this is really a basic sort of cushion that we are trying to give the exporters, so that they are not too adversely affected," said the Commerce Secretary.
> 
> The stimulus package, which was approved by Prime Minister Manmohan Singh, is aimed at boosting the growth by cutting taxes, increasing public expenditure and ensuring flow of credit to infrastructure, construction and housing sectors.



ibnlive.com


----------



## Nihat

> India's industrial output shows negative growth in Oct
> 
> Press Trust Of India
> 
> 
> New Delhi: India's industrial output shrunk for the first time in many years to record a negative growth of 0.4 per cent in October, stifled by manufacturing sector.
> 
> Output had grown by 5.45 per cent in September, and 12.2 per cent in October 2007.
> 
> The Index for Industrial Production numbers for the seven-month period ended October was 4.1 per cent against 9.9 per cent a year ago.
> 
> Manufacturing sector, which accounts for 80 per cent of he index, declined 1.2 per cent from 13.8 per cent in the year-ago period.
> 
> Only earlier this month, the government sought to rescue manufacturers by announcing an across-the-board (barring petroleum goods) four per cent cut in excise duty.



IIP is a really fluctuating benchmark , perhaps IIP data should be made public only Quarterly to induce a sense of Stability and actual growth rates.


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## Neo

*Indias industrial growth crashes into negative terrain ​* 
Saturday, December 13, 2008

NEW DELHI: Indias industrial growth unexpectedly shrank for the first time in 15 years, data showed on Friday, hit by the widening global recession that has weakened demand in Asias third-largest economy.

Industrial production contracted by 0.4 per cent in October after expanding by 12.2 per cent in the same month a year earlier, government figures showed. Output grew by a revised 5.45 per cent in September. Industrial production has been falling in Asias third-largest economy as a result of the worldwide economic downturn, but analysts had been expecting output growth in October of at least two per cent.

The industrial sector and indeed the economy as a whole has been softening for some time and the situation is deteriorating more rapidly now, said HSBC economist Robert Prior-Wandesforde.

Until recently India believed it would escape the brunt of the global financial turmoil thanks to its vast domestic market of more than 1.1 billion people and relatively small exposure to world trade. But a slew of data has shown its economy fast losing steam.

Output turned negative as Indian companies worked off inventories built up in anticipation of Octobers normally free-spending religious festival season that proved disappointing with lower sales of cars and other items. Steel, automobile and other sectors have been announcing production cuts in the face of weakening domestic and overseas demand.

The negative growth reflected a combination of factors including the developed world recession, the lagged effects of previous rate rises in India and the emergence of a credit crunch in the country, Prior-Wandesforde said.

Earlier this week, car sales posted their biggest annual fall in eight years, tumbling 19.38 per cent in November while sales of trucks and other commercial vehicles, a key signal of future economic activity, slumped by 49.52 per cent.

Reactions: Like Like:
1


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## rubyjackass

Very informative thread...
Thanks everyone.
Is there a similar thread in this forum about Pakistan's economy?


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## Imran Khan

A special report on India: An elephant, not a tiger 

Updated : Thursday December 18 , 2008 2:31:34 AM




James Astill 

For all its chaos, bureaucracy and occasional violence, India has had a remarkably successful past few years. James Astill asks how it will cope with an economic downturn

EARLY next year, perhaps in April, Indias coalition government will face the judgment of 700m voters. Being mostly poor, they will not be happy. Recent months, moreover, have brought particular hardships: high inflation, a patchy monsoon, a slowing economy and vanishing jobs. In a worrying time, the terrorist attacks in Mumbai on November 26th-29th came as a particularly harsh blow. They gave the world images of India that jarred with the shining message of its recent progress. For three days Indias most cosmopolitan city and aspirant international financial centre echoed with gunfire. Amid the slaughter wrought by just ten well-organised assassins many individual Indians acted heroically. Yet the institutional response, as so often, was poor. Properly trained troops took over nine hours to arrive at the scene. Most of the 170-plus victims died during that time.

The Congress party, which leads Indias ruling coalition and runs Maharashtra, the state of which Mumbai is the capital, is likely to suffer for this. To make amends, Congress sacked the interior minister, and Maharashtras chief minister. The government, led by Manmohan Singh (pictured above), has also raised a crythough not, thankfully, its fistsagainst Pakistan, whence the terrorists probably came. 

Yet for most poor Indians terrorism remains a small part of their troubles. To deal with those, Sonia Gandhi, Congresss leader, will reissue a lot of unkept promises when the election campaign begins: to bring everyone electricity, piped water, schools and jobs. She will say little about what this government has actually done: there hasnt been much.

At the same time Mrs Gandhi and her prime minister, Mr Singh, have presided over the biggest investment-led boom in Indias history. In the past five years the economy has grown at an average annual rate of 8.8%. Services, which contribute more than half of GDP, have grown fastest, above all Indias computer-services companies. Infosys, TCS and Wipro are now world-famous names. But Indian manufacturing has also done well. Its impressive run culminated in January with the launch by Tata Motors of an ultra-cheap family car, the Nano.

A world of fewer opportunities

India is now facing harder times. Its stockmarket has been sliding all year. As global credit has dried up, even Tata Motors, one of Indias best companies, has been struggling to lay its hand on capital. Indias economy is slowing rapidly and confidence is fragile. Previously soaring foreign investment in the country is expected to dip. Nobody yet knows how serious the slowdown will be, but in theory a recession in the rich world should hurt India less than other emerging markets: exports amount to only about 22% of Indias GDP, against 37% of Chinas. 

Diplomatically, India has also started to matter more. The US-India nuclear co-operation agreement, which was approved by Americas Congress in October, was the clearest sign of this: to let India in from the nuclear cold, the developed world has made an exception to the counter-proliferation regime. Mr Singh can take much credit for this. A courteous and scholarly former finance minister who launched reforms in 1991 that unshackled Indias mixed economy, he has been an effective envoy for India. 

That makes Indias main priority, reducing poverty through rapid economic growth, even more urgent. According to the World Bank, in 2005 some 456m Indians, or 42% of the population, lived below the poverty line. In 1981, by the same measure, the numbers were 420m and 60% respectively. The governments own estimates are lower. But everyone agrees that poverty in India is falling much too slowly. 

Pick another wretched statistic: there are plenty of them. India has 60m chronically malnourished children, 40% of the worlds total. In 2006 some 2.1m children died in India, more than five times the number in China.

To make a serious dent in poverty, India needs to keep up economic growth of around 8% a year. In the medium term that should not be too difficult. More impressive even than the success of Indias best companies is the zest for business shown by millions of Indians in dusty bazaars and slum-shack factories. They are truly entrepreneurs. It is no coincidence, as is often noted, that Indians have prospered everywhere outside India. 

But Indias task remains daunting. Some 65% of Indians live on agriculture, which accounts for less than 18% of GDP. Shifting them to more productive livelihoodsand so reducing povertywould be hard even if the number of people of working age was not growing so fast. Roughly 14m Indians are now being added to the labour market each year, and that number is rising. Half of Indias people are under 25 and 40% under 18 (see chart 2). They cannot all work for Infosys. Indeed, because of Indias historic underinvestment in education, many are not obviously skilled at anything. By one estimate, which may be optimistic, only 20% of job-seekers have had any sort of vocational training. If India cannot find employment for this lot, poverty will not be reduced and India may face serious instability. 

Its democracy will be no defence. India is already worryingly violent. A Maoist insurgency in eastern India, which Mr Singh has called the greatest internal security challenge we have ever faced, is an obvious ill omen. Where it is spreading, in poor, agrarian and broken places, the invisible threads that bind India, in the phrase of Nehru, its first prime minister, are almost non-existent.

In recent years India has been creating more jobs than the gloomier scenarios suggested. Between 2000 and 2005 its rate of employment growth doubled, to 2.6% a year. But that is still insufficient, and there are also fears about the quality of jobs being created. To escape throttling labour laws, Indian entrepreneurs tend to keep their operations small: 87% of manufacturing jobs are with companies that employ fewer than ten people. These tend to be both less productive than jobs in bigger companies and less protected by the law.

If India is to sustain a growth rate of 8% or higher, as it aims to do, it will need to manage four potential constraints. The most pressing, its rotten infrastructure and the dreadful quality of its education, are, alas, not new. But the governments response has long been inadequate, and with Indias burst of high growth these two problems have become more urgent than ever. Indias current rulers, the mahouts to an elephantine state, seem at least to understand this. But their efforts to end these troubles remain unconvincing. Indias other big constraints, its cumbersome labour and land laws, should be easier to fix. But there is depressingly little sign that this will happen soon.

India is getting stronger, but its problems are also growing. In the end, the pattern of its progress suggests, it will succeed. But it may be a long and painful grind. 
(Courtesy: The Economist) 


___________________________________________________________


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## nitesh

good news:

Inflation falls to 6.84%

Inflation falls to 6.84&#37;

December 18, 2008 12:07 IST

Inflation falls to 6.84 per cent for the week ended December 6 from 8.00 per cent in the previous week.

Last week, too, inflation rate fell mainly on account of declining prices of fruits and vegetables.

The wholesale price-based inflation fell by 0.4 per cent from 8.4 per cent in the previous week. The inflation was 3.89 per cent during the corresponding period a year-ago.

In primary articles group, the prices of fruits, vegetables, barley and grams declined during the week. As far as manufactured items were concerned, unrefined oil, gur, and rapeseed and mustard oil became cheaper.

The inflation rate has been declining after it touched a peak of 12.82 per cent in August.

&#169; Copyright 2008 PTI. All rights reserved. Republication or redistribution of PTI content, including by framing or similar means, is expressly prohibited without the prior written consent.


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## nitesh

Tata_First_On_Ferrari_F1!

Tata First On Ferrari F1!

Adil Jal Darukhanawala 17 Dec 2008


*Indian F1 Grand Prix aficionados rejoice! Word, from none other than Ferrari head honcho Luca di Montezemolo has made it known that Tata branding would appear for the first time on the scarlet Ferraris of Felippe Massa and Kimi Raikkonen fighting for world championship honours in 2009!*

"For the first time an Indian brand will appear on the Ferrari," president Luca di Montezemolo told Italian media. "It's historic." A Ferrari spokesman confirmed a deal had been reached and said the details and duration would be announced shortly.

*Montezemolo is absolutely correct for such a deal being of historic proportions and this holds true not just for Ferrari or for the Tata Group but also for F1 and India for a variety of reasons. Given the fact that F1 is in the midst of a major changeover - technical, sporting, economic and what have you, this deal assumes major importance for Ferrari which seems to be bucking the trend to add in more backers to its sporting efforts.*

While Reuters has reported that Luca di Montezemolo revealed that it was the Tata brand which would appear on the bodywork of the Ferraris next year, it wasn't exactly revealed whether it is the Tata Group (as we think it is) or is it to be Tata Motors as many are rampantly speculating. *The Tata Group would join such big names as Shell, Alice (an Italian internet company), Acer Computers, AMD microprocessors, drinks giant Martini and Dubai-based finance and investment firm Mubadala as the main backers of the Ferrari F1 team in 2009.*

*The Tata Group is no stranger to F1 and also to Ferrari because they first weighed in with financial support to Narain Karthikeyan when he drove for Jordan in 2005. A year later the Tata logo adorned the Williams F1 cars driven by Mark Webber and Nico Rosberg on the F1 circuits while Narain Karthikeyan was the test driver for the outfit.*

*Ferrari has benefited massively from the efforts of Tata Consultancy which has supplied major programmes and solutions in various technological areas to the design, manufacture and operation of not just the F1 cars but also the eclectic sports cars which are the pride and envy of many enthusiasts in equal measure.*

In fact, the relationship between Fiat SpA and the Tata Group has been predominantly in the automotive space and the duo have a joint venture in India for cars and drivetrains. *This year, however, did see Tata Motors back a Ferrari initiative in India which was said to be a precursor to the Prancing Horse making its debut on the Indian car market in 2009. With Tata Motors said to be in the reckoning to set up an all new exclusive sales channel for top end marques like Ferrari, a Tata association with the Scuderia's Grand Prix team does only seem natural.*

*From the Tata perspective, this is a bold move which signals its determined intent to soldier on in its bid to becoming a global automotive major.* With its truck and car manufacturing business in India already among the top echelons of the game and its global acquisitions like Jaguar - Land Rover and Daewoo Trucks giving it both a qualitative as well as an aspirational edge, a move into F1 is clearly an inspired move.

The timing of the deal has many guessing though, coming in the present economic downturn, with Honda having exited F1 and Suzuki and Subaru having pulled out from the World Rally Championship. However what everyone has to realize that all three Japanese OEMs have never achieved any worthwhile successes on the race tracks in this decade while Ferrari have kept on winning unabated with Michael Schumacher, Kimi Raikkonen and Felippe Massa for the last eight years.

Nothing succeeds like success according to Norbert Haug, boss of Mercedes-Benz Motorsport: "Mercedes-Benz's contribution (to F1) is cost-efficient, the resonance in the media and in the public which last season and Lewis Hamilton's win generated was worth many times our financial investment."Maybe this is one yardstick which the Tata Group would be comfortable relying on to go racing with Ferrari in a most cost-efficient and successful manner next year.


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## nitesh

Advance tax collections send early warning signals

Advance tax collections send early warning signals
Anindita Dey / Mumbai December 16, 2008, 0:58 IST

Most private firms see lower pay-outs; govt banks save the day.

Strong signs of the economic slowdown were evident in preliminary advance tax collections for Mumbai, which accounts for 35 to 40 per cent of income tax collections.

Barring mainly government-owned banks, private sector lenders and some of India&#8217;s largest companies headquartered in India&#8217;s financial capital have reported dips in advance tax payments for the October to December quarter.

Section 208 of the Indian Income Tax Act, 1961 makes it obligatory for all companies and individuals to pay advance tax in four quarters of a financial year when the annual advance income tax payable is Rs 5,000 or more.

Collections are still underway in some centres, but the list available with the income tax department till now shows that State Bank of India has emerged as the top tax payer for the third quarter.

Another government-owned bank, Central Bank of India, has recorded the highest growth in advance taxes at 123 per cent. Other state-owned banks &#8212; Bank of Baroda, Bank of India and Dena Bank &#8212; have also seen robust growth in advance tax payments.

The trend, however, is reversed for private lenders with both ICICI Bank and HDFC Bank recording a fall in payments.

Among companies in this early top 20 list, Larsen & Toubro and Tata Chemicals are the only two companies to have paid higher taxes. All the others, including Reliance Industries Ltd (RIL), India&#8217;s largest company by market capitalisation, and Mahindra & Mahindra, India's largest tractor maker, trail last year&#8217;s collections. In RIL&#8217;s case, the lower tax partly reflects the sale of shares in its new refinery Reliance Petroleum.

Among the Tata group companies, collections have fallen for Tata Steel, Tata Sons and Tata Power, while Indian Hotels and Tata Motors have not paid advance taxes.

Although Tata Steel has paid lower advance taxes for the quarter, cumulative payments for three quarters of the present financial year are higher at Rs 1,675 crore against Rs 1,418 crore last year, official sources said.

Among early birds in the public sector, Bharat Petroleum Corporation Ltd has also not paid any advance taxes for the quarter.

Housing companies &#8212; HDFC and LIC housing Finance Company &#8212; have paid higher taxes despite the slowdown in the real estate sector. Official sources said that the collection for other real estate companies appear to be not so encouraging.


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## nitesh

Govt plans more steps to boost economy

Govt plans more steps to boost economy
BS Reporter / New Delhi December 16, 2008, 0:58 IST


India may add to the interest rate and tax cuts announced early this month as declining output and exports indicate Asia&#8217;s third-biggest economy is headed for a deeper than expected slowdown, a government official said.

&#8220;The government is committed that whatever steps are required to be taken in the near future as the scenario further unfolds will be taken,&#8221; Economic Affairs Secretary Ashok Chawla said in an interview in Hong Kong today.

The country&#8217;s industrial production declined in October to -0.4 per cent, in the negative territory for the first time in more than 15 years, adding to the evidence that the $1.2 trillion economy may expand at the slowest pace in six years as weaker domestic demand and waning exports force companies to cut production. Investor sentiment has also been shaken by terror attacks in Mumbai last month, which killed nearly 200 people and left more than 300 injured.

&#8220;The present priority is to ensure that the economy doesn&#8217;t slow down very much and that growth is not hampered,&#8221; Chawla said. &#8220;That is the main objective at this point.&#8221;

Weaker production and exports may hurt the country&#8217;s economic expansion. India&#8217;s growth may fall to 7 per cent in the year to March 31 from 9 per cent or more annually in the previous three years, the government expects. The country&#8217;s exports fell for the first time in seven years in October.

The economy may slow more than initially estimated and the Reserve Bank of India (RBI) will revise downwards its earlier forecast of 7.5 per cent growth rate in its January 27 policy meeting, according to RBI Governor D Subbarao. The economy will face a period of &#8220;painful adjustment&#8221; as the world sinks into recession, the central bank said December 6.

Interest Rates:
India&#8217;s economy expanded 7.6 per cent in the three months to September 30 from a year earlier, the slowest pace since 2004.

To revive demand, the RBI on December 6 lowered its benchmark repo rate to 6.5 per cent from 7.5 per cent, the third cut since October. The next day the government announced a $4 billion stimulus package.

&#8220;The next budget is a couple of months away, so we have to wait and watch what happens and what steps are taken till then,&#8221; Chawla said.

Concern over companies cutting production and losing profits has seen the Bombay Stock Exchange&#8217;s (BSE&#8217;s) benchmark Sensex decline 51 per cent this year. Overseas investors have sold $13 billion of Indian shares this year, compared with $17.2 billion of share purchases in 2007.

To help counter a slowdown in the construction sector, the state-run banks decided to cap the interest rate for home loans of up to Rs 5 lakh at 8.5 per cent, State Bank of India Chairman OP Bhatt said in Mumbai today. Interest rates capped at 9.25 per cent will be offered for borrowers seeking loans of between Rs 5 lakh and Rs 20 lakh, he said.

India&#8217;s steel production fell 0.5 per cent in October, compared with a 4.7 per cent gain in September, according to the government. Cement production in October grew at 6.2 per cent, slower than 7.9 per cent in September.


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## nitesh

DLF to invest Rs 15,000 cr in affordable housing

DLF to invest Rs 15,000 cr in affordable housing
Press Trust Of India / New Delhi December 16, 2008, 0:32 IST

Buoyed by robust sales in mid-income housing, real estate giant DLF today said that it would invest Rs 15,000 crore over the next three years to develop various residential projects across the country in the range of Rs 15-40 lakh.

DLF, the country's biggest real estate developer, had last year announced its plan to enter into the mid-income housing segment, realising the huge untapped demand in this category. "We will be investing Rs 5,000 crore a year over the next three years on mid-income housing projects," DLF Home Developers Vice President A Harikesh said."Mid-income homes will be our focus area and will witness significant growth in the coming quarters," he added.

DLF's investment plans for affordable housing coincides with the announcement by public sector banks to boost the segment by cutting home-loan interest rates, putting caps of 9.25 per cent for Rs 5-20 lakh and 8.5 per cent for loans of up to Rs five lakh.

Harikesh said that internal accruals, advances against sales and capital raised through private equity would take care of the planned investment. DLF had raised Rs 1,675 crore as private equity in eight projects in November 2007.

DLF Home Developers, the wholly-owned subsidiary of DLF, would construct about 40,000 housing units in the mid-income category, sizes of which would vary between 1,000 square feet and 1,800 square feet, he added. The company has witnessed tremendous response for its mid-income housing projects and sold over 7,000 flats so far this year, despite slowdown in the housing demand for the last six months on account of high interest rate and capital value.

DLF has launched mid-income housing projects in Bangalore, Gurgaon, Hyderabad, Indore, Kochi, Kolkata and Pune. The company would launch similar projects in Chandigarh, Jalandhar, Ambala, Goa and Lucknow within the next six months. DLF Homes plans to launch such projects in all 31 cities where the company will have a presence by 2009-10, Harikesh said.

"The price would vary from city to city but majority of the units would be in the price range of Rs 2,000-3,000 per square feet," he said, adding that in the metros, the apartment prices would be higher compared to smaller cities because of high land costs.

He noted that the demand for its affordable housing is largely coming from end-users. As part of its strategy, DLF is discouraging speculation in its property by introducing a lock-in-period of one year for re-sale and selling only one flat to each family. DLF currently has a land bank of over 750 million square feet of saleable area.


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## nitesh

Bloomberg.com: India & Pakistan

India Central Bank May Extend Rate Cuts Amid Slowing Inflation 

By Kartik Goyal

Dec. 20 (Bloomberg) -- India's central bank has scope to extend the steepest set of interest-rate cuts since 2000 after inflation slowed to a nine-month low, economists said.

The country's benchmark 10-year bonds yesterday completed the biggest weekly gain in at least a decade as investors speculated the central bank will add to the three interest-rate cuts of the past two months. A report this week showed inflation slowed more than economists expected, to 6.84 percent in the first week of December.

Easing inflation may alleviate the central bank's concern earlier this week that faster than ``acceptable'' price gains have made monetary-policy management more complex amid slowing growth. The Reserve Bank of India's actions should have been ``more aggressive'' to counter the global recession, according to Arvind Virmani, the finance ministry's chief economic adviser.

``Inflation is no longer a concern now and that gives the central bank huge leeway to cut borrowing costs,'' said Sonal Varma, an economist at Nomura International Plc in Mumbai. ``Inflation has gone below the central bank's year-end target for the first time this year, softening its worries over prices.''

Bonds rallied after the Dec. 18 inflation report. The yield on the 8.24 percent note due April 2018 dropped 66 basis points this week to 5.56 percent in Mumbai, according to the central bank's trading system. The Reserve Bank hasn't commented on the latest inflation data.

`Aggressive Cuts'

Slowing inflation is prompting central banks from the U.S. to Malaysia to cut interest rates as global economies slump amid the worst financial crisis since the Great Depression.

The Philippine central bank on Dec. 18 cut its benchmark interest rate to 5.5 percent. The U.S. Federal Reserve lowered its main rate to as low as zero on Dec. 16, and the Bank of Japan reduced its benchmark to 0.1 percent yesterday.

``The key meaningful policy response to the worsening economic situation will be aggressive policy rate cuts,'' said Rajeev Malik, regional economist at Macquarie Group Ltd. in Singapore. ``The mother of all monetary easing will continue to play on in India.''

Growth in Asia's third-largest economy may slow to 7 percent in the year ending March 31 from 9 percent or more annually in the previous three years as the global slump hurts exports, according to the government. India's industrial production fell 0.4 percent in October, the first decline in 15 years, and exports plunged 12 percent.

'Difficult Year'

``This year is difficult,'' Palaniappan Chidambaram, who was India's finance minister until Dec. 1, said this week. The economy expanded at the slowest pace since 2004 in the three months to Sept. 30. Chidambaram is currently the home minister.

To revive consumer demand and lending, the Reserve Bank on Dec. 6 cut its benchmark repurchase rate to 6.5 percent from 7.5 percent, the third reduction since Oct. 20. The following day, the government announced a $4 billion stimulus package to bolster spending, including lower taxes on consumer goods like cars, television screens and motorbikes.

India is working on more measures to boost economic growth and may announce a second installment of the stimulus package soon, Trade Minister Kamal Nath said last week.

``The central bank is likely to continue with further monetary easing on an ongoing basis,'' said Siddhartha Sanyal, an economist with Edelweiss Capital Ltd. in Mumbai, who expects prices in India to fall next year on cheaper commodities.

Inflation eased in the week to Dec. 6 after a drop in crude oil costs led the government to cut retail fuel prices, helping cool price-gains further from a 16-year high of 12.91 percent in August. Crude oil has tumbled more than 70 percent from a record $147.27 on July 11.

The central bank will review its inflation forecast in the Jan. 27 monetary-policy meeting, Governor Subbarao said Dec. 11, signaling he may lower an earlier estimate of 7 percent for the current fiscal year.

To contact the reporter on this story: Kartik Goyal in New Delhi at kgoyal @bloomberg.net.
Last Updated: December 19, 2008 13:31 EST


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## nitesh

CORRECTED - UPDATE 2-Indian inflation slows, government ups spending | Reuters

CORRECTED - UPDATE 2-Indian inflation slows, government ups spending
Thu Dec 18, 2008 6:53pm IST

(Corrects spending in para 2 to 424.8 billion rupees from 424.4 billion rupees)

By Manoj Kumar and Rajkumar Ray

NEW DELHI, Dec 18 (Reuters) - India's government beefed up its plan for extra spending to stimulate the economy and counter the impact of the global slowdown, just as inflation fell more sharply than expected in a sign of faltering activity.

The Congress party-led coalition asked parliament for 424.8 billion rupees ($9 billion) in additional spending for the fiscal year ending in March, a move which initially sent bond yields higher on expectations of some further borrowing.

The amount was more than 200 billion rupees announced earlier in the month, but it included about 125 billion rupees for food and fertiliser subsidies in addition to spending for rural jobs, roads, housing and a textile industry hit by easing exports.

"We expect continual thrust on the fiscal spending as the government is relying more and more on the fiscal part," said Sachchidanand Shukla, economist at ENAM Securities in Mumbai.

"And this will be through market borrowing, which will crowd out private investments and put pressure on interest rates."

Authorities have been pulling out all the stops to shore up growth in Asia's third-largest economy, although India's scope for a fiscal booster falls far short of neighbouring China as its combined state and central deficit is expected to top 7 percent of gross domestic product this financial year.

N.R. Bhanumurthy, economist at the Institute of Economic Growth in New Delhi, said it was hard to judge how effective fiscal stimulus packages would prove to be and India's was no exception.

"Definitely, we may have to do much more that what they have done today," he said.

The central bank has made a slew of interest rate cuts since mid-October to lift growth, which is expected to slow to about 7 percent this year from 9 percent in 2007/08 as a result of high borrowing costs and the global financial crisis.

The government faces national elections by May next year and the head of the Congress party, Sonia Gandhi, said in terms of the economy, the next few months were not going to be easy even though inflation was falling.

"The stimulus package is important to keep growth going," she said.

INFLATION

The benchmark stock index .BSESN extended the day's gains above 2 percent after news of the additional fiscal stimulus and the data showing inflation falling below 7 percent, the central bank's goal for the fiscal year end in March.

The 10-year federal bond yield <IN082418G=CC> see-sawed as the inflation and spending numbers emerged, before settling at a new 4-&#189; year low of 5.52 percent after a finance ministry official predicted easing price pressures would lead to further interest rate cuts.

The wholesale price index <INWPI=ECI>, India's most widely watched inflation measure, rose 6.84 percent in the 12 months to Dec. 6, sharply below the previous week's 8 percent and lower than a Reuters estimate of 7.49 percent.

"I think the RBI will go for aggressive moves. I expect a rate cut either this month or early January," said D.K. Joshi, principal economist at rating agency CRISIL, referring to the Reserve Bank of India.

Annual inflation peaked at 12.91 percent in early August but the central bank has cut its main lending rate by 250 basis points to 6.5 percent since mid-October and reduced banks' cash reserve requirements to try to unfreeze India's credit markets.

The fuel component of the index showed a steep drop, helped by falling prices of oil globally and a cut in government-set retail prices of petrol and diesel from Dec. 6.

$1=47.3 rupees (Additional reporting by Boby Michael in MUMBAI and Nigam Prusty and C.J. Kuncheria in NEW DELHI, Editing by Mark Williams) (Writing by Saikat Chatterjee and Charlotte Cooper)


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## Neo

* Hyundais India unit sees exports down 25pc in 09​* 
Sunday, December 21, 2008

MUMBAI: South Korean car maker Hyundai Motor Cos India unit expects its exports to fall by a quarter next year due to shrinking overseas demand, a company spokesman said.

To cope with the decline in demand, Hyundai Motor India Ltd is cutting production shifts at its plants, he said. We have enough orders on hand till the end of this year, but order flow in November and December has not been good and this will reflect in sales from January onwards, the spokesman told Reuters late on Friday.

The lag effect will result in a near 25 per cent drop in exports from January onwards, he added. Globally auto makers are facing depressed demands due to the economic slowdown and expect the downturn could extend to 2010. South Korean automakers are expected to see exports and local sales fall 6 per cent in 2009, after declining 5.2 per cent in 2008. Earlier this month Hyundai Motor had said it was launching output cuts in most of its factories abroad due to falling sales.

In November, exports from the Hyundai unit, Indias second-largest carmaker, rose by 188pc, but the orders were placed about three months previously, when the meltdown had just started. In 2008, exports have risen by 170 per cent, the spokesman said.It exports to about 95 countries, with major chunk of the demand coming from Europe. Small-sized cars accounted for the largest proportion of the exports, data from industry body Society of Indian Automobile Manufacturers showed.


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## linkinpark

*How India Avoided a Crisis
*

By JOE NOCERA
MUMBAI

What has taken a number of us by surprise is the lack of adequate supervision and regulation, Rana Kapoor was saying the other day. This was despite the fact that Enron had happened and you passed Sarbanes-Oxley. We dont understand it. Maybe its because we sit in a more controlled economy but .... He smiled sweetly as his voice trailed off, as if to take the sting off his comments. But they stung nonetheless.

Mr. Kapoor is an Indian banker, a former longtime Bank of America executive with a Rutgers M.B.A. who, along with his business partner and brother-in-law, Ashok Kapur, was granted government permission four years ago to start a private bank, which they called Yes Bank. In the United States, Yes Bank is the kind of name a go-go banker might give to, say, a high-flying mortgage lender in the middle of a bubble. (You can even imagine the slogan: Yes is part of our name!) But Yes Bank is not exactly the Washington Mutual of India. One news release it hands out to reporters who come calling is an excerpt from a 2007 survey by The Financial Express: #1 on Credit Quality amongst 56 Banks in India, reads the headline.

I arrived in Mumbai three weeks after the terrorist attacks that killed 200 people  including, tragically, Yes Banks co-founder Mr. Kapur, who had served as the companys nonexecutive chairman and was gunned down while having dinner at the Oberoi Hotel. (His wife and two dinner companions miraculously escaped.)

My hope in traveling to Mumbai was to learn about the current state of Indian business in the wake of both the credit crisis and the attacks. But in my first few days in this grand, sprawling, chaotic city, what I mainly heard, especially talking to bankers, was about America, not India. How could we have brought so much trouble on ourselves, and the rest of the world, by acting in such an obviously foolhardy manner? Didnt we understand that you cant lend money to people who lack the means to pay it back? The questions were asked with a sense of bewilderment  and an occasional hint of scorn. Like most Americans, I didnt have any good answers. It was a bubble, I would respond with a sheepish shrug, as if that were an adequate explanation. It isnt, of course.

In India, we never had anything close to the subprime loan, said Chandra Kochhar, the chief financial officer of Indias largest private bank, Icici. (A few days after I spoke to her, Ms. Kochhar was named the banks new chief executive, in a move that had long been anticipated.) All lending to individuals is based on their income. That is a big difference between your banking system and ours. She continued: Indian banks are not levered like American banks. Capital ratios are 12 and 13 percent, instead of 7 or 8 percent. All those exotic structures like C.D.O. and securitizations are a very tiny part of our banking system. So a lot of the temptations didnt exist.

And when I went to see Deepak Parekh, the chief executive of HDFC, which was founded in 1977 as the countrys first specialized mortgage bank, practically the first words out of his mouth were these: We dont do interest-only or subprime loans. When the bubble was going on, we did not change any of our policies. We did not change any of our systems. We did not change our thought process. We never gave more money to a borrower because the value of the house had gone up. Citibank has a few home equity loans, but most banks in India dont make those kinds of loans. Our nonperforming loans are less than 1 percent.

Yet two years ago, the Indian real estate market  commercial and residential alike  was every bit as frothy as the American market. High-rises were being slapped up on spec. Housing developments were sprouting up everywhere. And there was plenty of money flowing into India, mainly from private equity and hedge funds, to fuel the commercial real estate bubble in particular. Goldman Sachs, Carlyle, Blackstone, Citibank  they were all here, throwing money at developers. So why did the Indian banks stay on the sidelines and avoid most of the pain that has been suffered by the big American banks?

*Part of the reason is cultural. Indians are simply not as comfortable with credit as Americans. A lot of Indians, when you push them, will say that if you spend more than you earn you will get in trouble, an Indian consultant told me. Americans spent more than they earned.*

Mr. Parekh said, Savings are important. Joint families exist. When one son moves out, the family helps them. So you dont borrow so much from the bank. Even mortgage loans tend to have down payments in India that are a third of the purchase price, a far cry from the United States, where 20 percent is the new norm. (Lets not even think about what they used to be.)

*But there was also another factor, perhaps the most important of all. India had a bank regulator who was the anti-Greenspan. His name was Dr. V. Y. Reddy, and he was the governor of the Reserve Bank of India. Seventy percent of the banking system in India is nationalized, so a strong regulator is critical, since any banking scandal amounts to a national political scandal as well. And in the irascible Mr. Reddy, who took office in 2003 and stepped down this past September, it had exactly the right man in the right job at the right time.

He basically believed that if bankers were given the opportunity to sin, they would sin, said one banker who asked not to be named because, well, theres not much percentage in getting on the wrong side of the Reserve Bank of India. For all the bankers talk about their higher lending standards, the truth is that Mr. Reddy made them even more stringent during the bubble.*

Unlike Alan Greenspan, who didnt believe it was his job to even point out bubbles, much less try to deflate them, *Mr. Reddy saw his job as making sure Indian banks did not get too caught up in the bubble mentality. About two years ago, he started sensing that real estate, in particular, had entered bubble territory. One of the first moves he made was to ban the use of bank loans for the purchase of raw land, which was skyrocketing. Only when the developer was about to commence building could the bank get involved  and then only to make construction loans. (Guess who wound up financing the land purchases? United States private equity and hedge funds, of course!)*

Then, as securitizations and derivatives gained increasing prominence in the worlds financial system, the Reserve Bank of India sharply curtailed their use in the country. When Mr. Reddy saw American banks setting up off-balance-sheet vehicles to hide debt, he essentially banned them in India. As a result, banks in India wound up holding onto the loans they made to customers. On the one hand, this meant they made fewer loans than their American counterparts because they couldnt sell off the loans to Wall Street in securitizations. On the other hand, it meant they still had the incentive  as American banks did not  to see those loans paid back.

Seeing inflation on the horizon, Mr. Reddy pushed interest rates up to more than 20 percent, which of course dampened the housing frenzy. He increased risk weightings on commercial buildings and shopping mall construction, doubling the amount of capital banks were required to hold in reserve in case things went awry. He made banks put aside extra capital for every loan they made. In effect, Mr. Reddy was creating liquidity even before there was a global liquidity crisis.

Did Indias bankers stand up to applaud Mr. Reddy as he was making these moves? Of course not. They were naturally furious, just as American bankers would have been if Mr. Greenspan had been more active. Their regulator was holding them back, constraining their growth! Mr. Parekh told me that while he had been saying for some time that Indian real estate was in bubble territory, he was still unhappy with the rules imposed by Mr. Reddy. We were critical of the central bank, he said. We thought these were harsh measures.

For a while we were wondering if we were missing out on something, said Ms. Kochhar of Icici. Banks in the United States seemed to have come up with some magical new formula for making money: make loans that required no down payment and little in the way of verification  and post instant, short-term, profits.

As Luis Miranda, who runs a private equity firm devoted to developing Indias infrastructure, put it: We kept wondering if they had figured out something that we were too dense to figure out. It looked like they were smart and we were stupid. Instead, India was the smart one, and we were the stupid ones.

Ms. Kochhar said that the underlying risks of having a majority of loans not owned by the people who originated them was not apparent during the bubble. Now that those risks have been made painfully clear, every banker in India realizes that Mr. Reddy did the right thing by limiting securitizations. At times like this, you tend to appreciate what he did more than we did at the time, said Mr. Kapoor. He saved us, added Mr. Parekh.

As the credit crisis has spread these past months, no Indian bank has come close to failing the way so many United States and European financial institutions have. None have required the kind of emergency injections of capital that Western banks have needed. None have had the huge write-downs that were par for the course in the West. As the bubble has burst, which lenders have taken the hit? Why, the private equity and hedge fund lenders who had been so eager to finance land development. Us, in others words, rather than them. Why is that not a surprise?

When I asked Mr. Kapoor for his take on what had happened in the United States, he replied: We recognize it as a problem of plenty. It was perpetuated by greedy bankers, whether investment bankers or commercial bankers. The greed to make money is the impression it has made here. Anytime they wanted a loan, people just dipped into their home A.T.M. It was like money was on call.

So it was. And our regulators, unlike theirs, just stood by and let it happen. The next time were moving into bubble territory, perhaps we can take a page from Mr. Reddys book  sometimes its better to apply the brakes too early than too late. Or, as was the case with Mr. Greenspan, not at all.



None of this is to say that the global credit crisis hasnt affected India. It certainly has. Ill be back after the holidays with more columns from India, including how Sept. 15  the day Lehman Brothers defaulted  changed everything, even here, on the other side of the world.


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## Neo

*India lifts ban on cement exports ​* 
Tuesday, December 23, 2008

NEW DELHI: India has lifted a ban on cement exports, the trade ministry said, as price pressures eased and domestic demand is depressed due to a slowdown in construction activity.

The Director General of Foreign Trade under the Commerce Ministry said in a notification on the weekend it had allowed cement exports with immediate effect. The government had banned cement exports in May as part of efforts to increase local supplies and check rising prices.

In the past few months, construction activity has slowed down as high interest rates trimmed demand for new homes while companies deferred expansion plans due to a credit crunch. Indias cement output was 14.34 million tonnes in November, less than 14.76 million tonnes produced in October, according to the Cement Manufacturers Association.

Annual inflation slowed to 6.84 per cent in the first week of December from a high of 12.9 per cent in early August, reflecting a slump in oil and other commodity prices. The Indian economy expanded by 7.6 per cent in the September quarter, and analysts expect Asias third-largest economy to end the 2008/09 fiscal year with less than 7 per cent growth compared to 9 per cent of last year. In December, the authorities announced a slew of steps including interest rate cuts, a massive spending plan and duty cuts including that for cement, to arrest the slowdown.


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## Disintegrater

Can someone plz tell me current marketcap of Sensex and Nifty.


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## nitesh

Nelp-VIII likely to offer 100 blocks- Oil & Gas-Energy-News By Industry-News-The Economic Times

Nelp-VIII likely to offer 100 blocks
23 Dec 2008, 0120 hrs IST, ET Bureau

NEW DELHI: The petroleum ministry is planning to auction over 100 prospective areas for oil and gas exploration by March 2009 under the eighth round of New Exploration Licensing Policy (Nelp-VIII).

&#8220;It would be our endeavour to launch Nelp-VIII in first quarter of 2009,&#8221; petroleum minister Murli Deora said. He was speaking at the production sharing contract (PSC) signing ceremony for 44 oil and gas exploration blocks under the Nelp-VII.

Mr Deora said the government has started interaction with all stakeholders for bid evaluation criteria for the next auction round for both oil and gas exploration blocks and coal bed methane (CBM) assets.

&#8220;Efforts under Nelp have resulted in 68 discoveries of oil and gas in 19 blocks, establishing &#8216;in place reserves&#8217; of 500 million tonnes of oil and oil equivalent of gas,&#8221; he said.

Discoveries have been made in Cambay onland, northern part of East Coast and Krishna-Godavari deepwater areas. Under Nelp, the committed investment on exploration is estimated at $8.3 billion, out of which about $4.5 billion has already been spent on exploration and about $1.5 billion on development of discoveries, he said.

The total committed investment for phase-I of exploration under Nelp-VII is about $1.5 billion. &#8220;Nelp-VII was our largest round so far with 150,000 sq km of area offered. Nelp-VIII would be even larger,&#8221; said director general of hydrocarbons (DGH) V K Sibal. He added 400,000 sq km of area roughly divided into more than 100 blocks would be offered in the next round.

The seventh round of auction that started in December last year attracted $1.5 billion in investment from oil companies. It offered 57 exploration blocks covering sedimentary basins in an area spread over 171,000 sq km. So far, 206 blocks have been awarded under seven rounds of Nelp bidding.

From these, 68 discoveries of oil and gas have been made in 19 blocks, establishing in-place reserves of 500 million tonnes of oil and oil equivalent gas.

Simultaneously, the fourth round of auction of coal bed methane (CBM) blocks would also be launched. In the previous three CBM rounds, 26 coal blocks have been awarded for exploiting gas lying below coal seams.


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## nitesh

GSPC's find in KG basin certified at $ 6 billion-India Business-Business-The Times of India

GSPC's find in KG basin certified at $ 6 billion
25 Dec 2008, 0124 hrs IST, Nimish Shukla, TNN

AHMEDABAD: Ambitious plans to make Gujarat the 'Gas Capital' of the country have been fired up further. The Director General of Hydrocarbons (DGH) has commercially certified a gas discovery of 1.26 trillion cubic feet (TCF) by Gujarat State Petroleum Corporation (GSPC) in the Krishna-Godavari basin.

That would put a value of upwards of $ six billion (Rs 30,000 crores) to a cluster of three wells (KG-8, KG-15 and KG-28). This would end a debate over the credibility of the Gujarat government's first proclaimation about the "huge discovery" made in July 2005, a year after drilling operations began.

The news of DGH certification late on Tuesday has caused jubilation in the government, which expects the announcement to fuel its confident attempt to project a 'Vibrant Gujarat' shining through a depressed global environment.

The state's third investment summit, to be held on January 12-13, is focussing majorly on energy and infrastructure to act as magnets for more investments in the future. In July 2008, Gujarat chief minister Narendra Modi declared during a visit to KG-22 well that the entire Deen Dayal block of GSPC was worth $ 100 billion (Rs five lakh crores) at today's rates.

So far, the GSPC has drilled 12 wells and is going ahead with drilling four more in the Deen Dayal block, which is spread over 100 sq kms. Most of the action is happening on the south-west of the block in an area of 15 sq kms.

GSPC had claimed a commercial potential of 5.6 TCF before the DGH, but the DGH has certified a minimum discovery of 1.26 TCF, which is subject to upward revision on a more detailed appraisal. If GSPC's claimed figure of 5.6 TCF is finally confirmed, KG-8, 15 and 28 together would be worth $ 28 billion (Rs 1.40 lakh crores).

In GSPC, which is still unlisted, the Gujarat government has a goldmine as its value is estimated many times more than all its other PSUs put together. So far, GSPC has invested $ 800 million (Rs 3,500 crores) in the KG basin. Now, GSPC plans to invest another $ 1.5 billion (Rs 7,500 crores) on bringing the gas to Gujarat, besides incurring further expenditure on exploration.

The GSPC will link up with the Reliance pipeline to bring it from Kankinada to Hazira, beyond which GSPC will use its own pipeline network which is already supplying gas worth Rs 15 crores a day in Gujarat. Plans are afoot that GSPC's gas from KG basin would land in Gujarat by Christmas of 2011 to meet the energy needs of a state.


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## nitesh

bad news:

'IT sector in India may lose 50,000 jobs' - Express India

*'IT sector in India may lose 50,000 jobs'*

Bangalore *Over 50,000 IT professionals in the country may lose their jobs over the next six months as the situation in the sector is expected to worsen due to the impact of global economic meltdown on the export-driven industry, a forecast by a union of IT Enabled Services warned.*

"...there would be 50,000 job losses (IT and BPO put together) over the next six months," Karthik Shekhar, general secretary of UNITES India, a politically neutral union of ITES professionals said.

The job loss in the IT and BPO sector in the country topped 10,000 in the September-December period, Shekar said.

While employees of medium-sized companies bore the brunt of job losses in the September-December period, it's going to be their counterparts in the big and small firms who would increasingly face the axe in the coming six months, he said.

UNITES India, affiliated to the global union United Network International, suggested that the companies in trouble could resort to salary and incentive cuts without trying to "squeeze" the staff, rather than adopting the "layoff path".

Employees are willing to take such cuts for 12-16 months till the demand picks up again, when such benefits should be restored to them.

Shekhar said senior officials of the industry had concurred with the figure of 10,000 job loses in September-December, stating that it accounted for "bottom five per cent of the performers".

Consultations with the union's counterparts in the US and UK suggested that slowdown would continue to hit the offshore sourcing space, he said.

He said factors like continued slowdown, likely "tax application" to companies outsourcing jobs under the new US regime and tightening in regard to H1B visas were among the key reasons cited for the acceleration in issue of pink slips.


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## nitesh

Reliance to set world's biggest refinery - Express India

Reliance to set world's biggest refinery

New Delhi Reliance Industries is set to double its capacity by starting up its new 580,000 barrels per day plant (bpd) this weekend, creating the world's biggest refinery just as global oil demand collapses.

The $6 billion project will make the oil complex in Jamnagar in Gujarat the world's single biggest supplier of fuels to the global market, pumping out 1.24 million bpd of ultra-clean fuels to Europe, Africa and the United States.

The project is a triumph for Chief Executive Mukesh Ambani, who helped break India's heavy reliance on imported fuel a decade ago with Reliance's first 660,000 bpd plant, a cash cow for the firm during a profit boom over the past four years.

Trade and industry sources said it appeared likely the company would announce the refinery's commissioning within the next week, just in time for its year-end target, although the announcement may be little more than a formality since it will take months to get the full plant running.

For tax reasons it is not expected to begin significant exports until April, when the new fiscal year begins in India.

"Pre-commissioning activities are almost over. We hope to announce start up of the refinery on Dec. 28," a company official said, declining to be identified because of company policy.

A company spokesman declined to comment on the issue on Wednesday.

This Sunday is also the birthday of the late Dhirubhai Hirachand Ambani, Ambani's father and founder of the Reliance group, who turned his textile firm into a petrochemical-to- telecom conglomerate and India's biggest private company.

While the new refinery's low cost, high sophistication and global reach mean it should turn a profit by crowding out less efficient export-oriented rivals in Europe or Asia, it enters a market utterly different than Ambani would have envisioned three and a half years ago when he unveiled the project.

Run by subsidiary Reliance Petroleum Ltd, in which Chevron Corp holds a 5 per cent stake, the refinery will at a stroke more than satisfy the world's additional oil product demand next year, if indeed the International Energy Agency's current forecast is not further cut by a deep global recession.

It is not a circumstance Ambani will relish, but it is also not one that will be unfamiliar.

"When in 1999 we started our first refinery at Jamnagar, we saw a recession globally and when we are about to start our second refinery, history is repeating itself," he said last month.

Reliance has already missed a series of ambitious internal targets to launch the new refinery as early as July, but seems to have accelerated efforts recently.

The Jamnagar local government this month issued a "no-objection certificate" for Reliance to enable it get a licence from Commissioner of Explosives, which is required to start the new refinery, District Collector V. P. Patel said.

EXPORT ONLY, FOR NOW

Unlike a decade ago, when Reliance built its refinery to tap into India's growing demand for refined fuels, the new plant is geared entirely to the export market for now, avoiding the domestic market where the government still controls prices.

But the global refining industry has also changed dramatically as a surge in oil prices to nearly $150 a barrel and the worst financial crisis in nearly a century reverses steadily rising oil demand in the United States, Europe and even China.

Analysts at Credit Suisse warn that the refining sector is exiting its golden age and entering the Dark Ages, as China builds new plants quickly enough to meet its own demand while India and the Middle East vie for shrinking export markets.

But Reliance is better-placed than most to ride out the downturn, with a strategic position near Middle East crude supplies and an unrivalled capacity and complexity.

"It is basically a US Gulf Coast refinery that was built in India," says Al Troner, managing director of Asia Pacific Energy Consulting. "It is capable of producing large volumes of top quality product suitable for any market in the world."

It will play a swing supply role that will redraw traditional trade flows, and has already embarked on a robust marketing campaign in Europe, Mexico, East Africa and Asia, capitalising on delays and cost overruns faced by other big refinery projects.

Reliance has already leased clean oil products storage tanks in Singapore, the Mediterranean and Caribbean, industry sources have said, to boost its trading operations.


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## ejaz007

*Stratfor warns on dangers of doing business in India *

* US-based intelligence service says new threats from terrorists likely in case of Indo-Pak war

By Iftikhar Gilani 

NEW DELHI: A US-based geopolitical security and intelligence service  which recently claimed that an Indian deadline for Pakistan to crack down on terrorists expires on Friday  on Thursday warned multinational corporations on the dangers of doing business in India. 

And if military confrontation between India and Pakistan erupts in the wake of the Mumbai attacks, multinational corporations quite possibly could face a number of new threats from terrorist groups, in addition to more traditional security problems, according to the latest weekly report of Stratfor in the wake of the Mumbai terror attacks. 

Highlighting that the exact nature and locations of potential Indian military action against Pakistan were not known to pinpoint specific problems multinationals might face, the report warns about disruption of their operations  irrespective of coming in the line of fire or not. 

In the event India chooses to carry out targeted airstrikes against Pakistan, the agency warns that all civilian aircraft could be grounded and Indian airspace frozen. In such a situation, executives and other travellers to India would be unable to leave the country until the ban is lifted. 

Pakistani retaliation to an Indian strike could take the form of traditional military action, but it also could well involve asymmetric warfare. In this scenario, Pakistan would act through its militant proxies  who could well target westerners associated with multinational corporations in a bid to damage the Indian economy, said the agency. 

Stratfor also points out that the Mumbai attacks have renewed fears that insiders could be used to carry out future attacks on multinational facilities. Highlighting its point, it claims the lone gunman arrested afater the Mumbai attacks has reportedly told police that at least five people in the Mumbai area aided them  providing information on various locations and police stations in the city, although they were not part of the actual attacks. 

While the investigation into how the attackers planned their mission is still ongoing, militants seeking to use the lessons from Mumbai might make renewed attempts to infiltrate multinational corporations to gain information that could be used to launch ... [further] attack, the agency warned. 

It says Indian military action against Pakistan could be the trigger needed to incite widespread public protests against the Mumbai attacks, and multinationals should therefore also take into account the possibility of Hindu-nationalist-led protests against the Mumbai attacks long after the attack itself, which could disrupt business operations. 

The agency says the Mumbai attacks showed that attacking locations where westerners are known to congregate  rather than attacks against marketplaces or cinemas that will primary kill Indian nationals  could well be a more efficient and effective way for terrorists to use their limited resources. 

And as hotels and other traditional soft targets harden their facilities and implement new security countermeasures to prevent further Mumbai-style attacks, terrorists will seek less-secure venues that will achieve the same result, says the report. 

It said such targets could include apartment complexes or neighbourhoods that primarily house Westerners, or other soft targets such as western-style marketplaces or restaurants. 

Though most multinational corporations operate in hardened facilities away from city centres, affording better access control and counter-surveillance, their employees cannot remain behind walls at all times. And even within multinational compounds, security cannot be fully guaranteed.

Given the high level of technical sophistication displayed in the way responsibility was claimed for the attack, and given that workers in the information technology industry were involved in previous attacks, the IT sector should be especially vigilant to the potential for terrorist attacks with inside assistance, the report said. 

In the long run, it says that corporate travellers in India (and elsewhere) would continue to face the threat of terrorist attacks.

Daily Times - Leading News Resource of Pakistan


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## nitesh

Business Today - Beta - India&#039;s leading business magazine

An inflexion point
December 11, 2008 

September 2008 is likely to be remembered as the month that saw the collapse of the financial world, as we knew it. Icons of Wall Street went belly-up, lost their identity by converting themselves into commercial banks, sliced themselves up into pieces or were forced by regulators to merge with other banks. A large number of marquee names are now owned by governments. Wall Street will never look the same again.

Amongst all this global turmoil, there is a positive outlook for India. As we analysed the audited results (2007-&#8217;08) of banks in India for the Best Banks Survey, we could not but compare the strength of the Indian banking system to the over-leveraged banks in the US and Europe.

In the previous year&#8217;s assessment (Business Today, February 24, 2008) we had decided to add more weight to the strength parameters vis-a-vis the growth and size parameters. Time has proven us right.

*The world order changeth?*

China and India have suffered&#8212; what can only be called&#8212;collateral damage. China, due to its direct linkage to diminishing demand in the West for its massive exports, and India, due to the consequential damage resulting from the significant pullout of investments by global investors from its capital markets. However, given the massive war-chest of China, the macroeconomic structure of India and the relatively insular nature of their large banks, the two seem to be relatively less damaged.






Yet, cracks are starting to appear in Indian banking, too. While Indian banks have limited or no exposure to the subprime crisis, they seem to be struggling to cope with the liquidity crisis. Tight liquidity has resulted in increased interest rates across the board, and a cutback on lending by the banks to the real estate sector. The Indian manufacturing sector and the economy as a whole are feeling the impact.

Additionally, the flight of foreign capital from the stock market has dramatically reduced the collateral value of promoter shares, further aggravating the problem of accessing capital. The RBI has acted swiftly to contain the damage by reducing the CRR, SLR and repo rates. It has also provided lines of credit (Liquidity Adjustment Facility) to provide liquidity to the tune of Rs 2.5 lakh crore.









However, the systemic damage is starting to tell. While most analysts have focussed on the shortterm impact of the financial crisis, a longer term view starts presenting some very interesting questions and possibilities. At a banking and financial services industry level: with the large global banks impaired for the foreseeable future, can consolidated banks from India and China take on a more global role? Could draconian risk assessment norms imposed by the G20 result in a tectonic shift in risklinked asset pricing and result in certain types of leveraged models completely disappearing? Given all these changes, will certain banking models and the very existence of some banks be questioned; with universal banking no longer fashionable&#8212; given that off-balance sheet transactions are likely to be brought into the ambit of regulatory supervision and investment norms tightened&#8212;the current models of investment banking and fund management are expected to undergo a fundamental structural change.Indian banks&#8217; finest hour?





The KPMG Annual Best Banks Survey is a check-point on the performance of the banking system in India. The past five years have seen the Indian banking industry gain significant strength. This strength is reflected in the high growth in credit and size of the balance sheets; well diversified portfolios across corporate, retail and SME; improved margins and spreads; healthy asset quality; reduction in non-performing assets with improving asset coverage ratio; and improvement in the implementation of the SARFAESI Act through effective use of debt recovery tribunals.

Not surprisingly, PSU banks, with low-risk appetites and being conservative followers of regulatory guidelines, have significantly improved their position. Driven by better technology and risk principles, they have seen considerable improvements in their asset quality, operational efficiency, spreads and margins.

However, crucial challenges lie ahead in the immediate future. Key amongst these is the need for managing capital for addressing the needs of a credit-hungry India, in the face of stricter adequacy norms under BASEL II guidelines and substitution of foreign currency borrowings.






For PSU banks, where government ownership has been reduced to just above 50 per cent, this poses a major structural and ownership challenge.

Consolidation ahoy!
Capital requirements and management is one of the most critical challenges Indian Banks are likely to face over the next few years. Most banks are adequately capitalised&#8212; the median capital adequacy ratio for large banks in 2007-08 was 12.34 per cent as against 12.02 per cent a year ago. The RBI estimates an additional requirement of Rs 10,000 crore over the next five years to support continued credit growth at 12 per cent capital adequacy.

This additional requirement for capital is arising due to three key factors: Incremental credit required for sustaining the current levels of economic growth; servicing of over $220 billion (Rs 11 lakh crore) of external debt over the next few years, constituted largely by external commercial borrowings (ECB). A large part of this borrowing is likely to be re-financed through domestic borrowing given the credit tightness in the international markets and higher credit spreads for emerging markets like India; and, third, higher capital requirement on account of implementation of the BASEL II norms and the anticipated impact from slippages in asset quality due to the ongoing credit crisis.

Given the state of the capital markets, the likelihood of Indian banks being able to raise such a staggering amount is remote. The implications for the Indian banking system are immense: banks with strong balance sheets and a focus on stakeholder rewards might still be able to access the capital markets, although at significantly depressed premiums. Banks also need to improve their efforts to efficiently collect low-cost deposits through their more modernised and extensive branch network.










The weaker and smaller banks may not have either of these options and may, therefore, need to either merge with larger and stronger banks, or seek infusion of capital from the government.

Low-cost borrowings are back
The collapse of global investment banks has an important lesson for financial markets. Investment banks based their &#8220;funding strategy&#8221; on high-cost bulk deposits for growing their balance sheets. The first consequence of the credit crunch was the flight of bulk deposits to perceived safer investment options, leading to a rapid erosion of the funding base. This has put the spotlight back on growth through the humble &#8220;low-cost deposit&#8221; as the more stable banking model.

Most Indian banks have established a strong franchise to raise low-cost deposits. The ability to grow that base is critical to their effective management of the balance sheet for maintaining adequate liquidity, lower their cost of borrowing and subsequently higher net interest margins and finally for establishing a diversified risk-based asset product portfolio.

Private and public sector banks in India have increasingly focussed on the growth of their low-cost deposit base. By leveraging technology, branding and through advertising and large branch networks, these banks have built impressive deposit-conducive franchises.

In the next few years, they may have to consider the value and productivity in their customer facing processes as their franchise size grows. Effective channel management, offering value-added services to attract customers, and brand recall and recognition are likely to be key imperatives to support the growth of low-cost deposits.

The weaker and smaller banks are likely to face significant challenges in attracting low-cost deposits in a tight liquidity scenario, impacting their ability to grow, as will banks that have a significant proportion of their funding through bulk deposits.

Operating costs
Here&#8217;s another positive view of the Indian banking system. Most banks have shown good growth while keeping their operating costs under control. The cost-to-income ratio, which reflects control over operating costs, has shown an improving trend and this is especially true of the large banks. The improved use of core technology, better operating controls, cost reductions due to optimised central processing models have resulted in improved returns to stakeholders.

However, most banks are also guilty of silo-based cost increases during the credit expansion phase in the last five years. While they have created valuable distribution franchise models to distribute capital market products and increase share of low-cost deposits, cost inefficiencies were generally hidden in the high-growth numbers. If, as predicted, the Indian economy does slow down for the next few years and retail credit off-take reduces significantly due to high interest rates, these inefficiencies could start showing up prominently.

Private and foreign banks have already started rationalising their business structures and may most likely shrink their fixed costs as a response to the slowdown. PSU banks, without as much flexibility to lower their fixed costs, may, therefore, need to improve their incomes through efficiency and productivity measures for controlling their cost-to-income ratios.

Indian banks need to respond rapidly to the market slowdown by lowering operating costs in response to potentially lower incomes. Banks that can continue to increase their market share, at either the same or lower costs, are the ones likely to emerge winners.

Wither asset quality?
The global crisis and the resultant slowdown in the Indian economy is a real test for Indian banks in terms of the asset quality of their existing portfolios and for any new business that they are willing to undertake. The asset quality of Indian banks has shown substantial improvement in recent years&#8212;median Net NPA improved 0.73 per cent as against 0.83 per cent in &#8217;07. However, 2008-09 has the potential to reverse this trend.

The rapidly changing business and economic scenario is likely to present significant challenges for the banking system, which could potentially see an escalation in their NPAs. The challenges include: rapid shrinkage in corporate balance sheets, specifically those exposed to commodities and metals; funding of expansion and acquisition plans by highly-leveraged corporates; export-oriented firms facing a slowdown in business due to weak global demand; and volatile currency movements impacting corporate cash flows.

The worst-case scenario for India, which assumes GDP growth will reduce to 6 per cent over the next few years, is likely to create a major challenge for Indian banks. Should they be focussing on growth or should they focus on keeping NPAs under control? Banks may then have to extensively rely on refurbished and dynamic credit scoring models, de-centralised decisionmaking based on ground level relationship assessment and increasing use of tracking MIS to control their portfolio in these uncertain times.

Indian banks, in contrast to their global peers, appear &#8220;strong&#8221; from an asset quality, diversified risk portfolio and &#8220;low-cost&#8221; deposit base perspective. This is partly due to their effective management of the business and partly due to the conservative nature of our bankers and the regulator. The key question now facing the industry is: can the Indian banking system maintain its position in a sustainable manner, even as dark clouds gather?


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## nitesh

India may miss $200 bn export target


India may miss $200 bn export target
Press Trust of India
Friday, December 26, 2008 (New Delhi)


India is likely to miss the export target of $200-billion by 5-10 per cent this fiscal as exporters face payment defaults, price cut and order cancellations with deepening of global financial crisis.

"Feedback from the apex chambers of commerce and different export promotion councils (EPCs) suggests that the target for the current year is unlikely to be achieved," a top official said.

He said with the worsening situation in the global markets, the number of exporters not realising the dues from buyers in the US and Europe would "increase substantially".

Several EPCs have informed the Commerce Ministry about the "noticeable decline" in export orders, cancellation of pro-forma invoices, re-negotiation of orders and prices by buyers and slowdown in export realisation.

The recession in the key markets, is likely to result in cash flow difficulties for exporters, delay in execution of orders in hand and high cost of insurance cover.

After showing a handsome growth of 30.9 per cent for the first half of the current fiscal, exports slipped into negative territory. Exports decelerated by over 12 per cent in October.

The government had set the $200-billion target after the exports grew by over 23 per cent to $162 billion in 2007-08.

So far, over 7,00,000 workers have been laid off in the textile industry, while 1,00,000 people have lost jobs in the gems and jewellery sector.

The second stimulus package under consideration of Prime Minister Manmohan Singh is likely to provide further relief to the exporting sector. The first package had extended the concessional loan from 90 days to 180 days.


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## nitesh

Forex reserves up $3.6 bn at $254.05 bn

Forex reserves up $3.6 bn at $254.05 bn

India's foreign exchange reserves swelled to $254.052 billion for the week ended December 19, up by $3.599 billion over the previous week.

Foreign exchange reserves stood at $250.453 billion in the previous week.

The foreign currency assets (FCA), during the week, went up to $245.308 billion, up $3.583 billion, from $241.725 billion in the week-ago period, the Reserve Bank of India's (RBI) weekly data showed here.

According to the RBI data, the country's gold reserves and Special Drawing Rights (SDR), during the week, stood unchanged at $7.861 billion and $3 million, respectively.

FCAs expressed in US dollar terms include the effect of appreciation or depreciation of non-US currencies such as euro, sterling and yen, the apex bank said.

India's reserve position in the international monetary fund further swelled by $16 million to $880 billion during the week from $864 million in the previous week, the RBI said.


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## nitesh

India Today - India&#039;s most widely read magazine.

Interest rates on loans finally start floating down
Malini Bhupta
Mumbai, December 31, 2008 

Interest rates are finally beginning to float downwards. India&#8217;s largest private sector bank, ICICI Bank, on Wednesday, reduced the rates by 0.50 per cent in its floating reference rate for loans, with effect from 31 December, 2008. The revised rate will be 13.75 p.a. per cent against 14.25 per cent p.a. at present. The beneficiaries of this will be auto and home loan borrowers who are on a floating loan rate.

The bank has also announced a cut of 0.50 per cent in its benchmark Advance Rate from the present 17.25 per cent p.a. to 16.75 per cent p.a. With loans getting cheaper, the interest rate on deposits, which had gone up sharply over the last one year will also start coming down as ICICI Bank has announced a cut in its deposit rates between 0.50 per cent to 0.75 per cent.

As the year comes to a close, banks are playing Santa Claus with their consumers and reducing benchmark lending rates to spur growth. Punjab National Bank earlier this week reduced its prime lending rate (PLR) by 50 basis points to 12 per cent which is the lowest in the industry. Evidently the lending rates are now aggressively being cut in the hope that it will revive domestic demand, but with salary cuts and pink slips doing the rounds, there isn&#8217;t enough money in the hands of consumers to splurge.

The bank has also cut deposit rates across all maturities. Now, the highest rate that the bank offers is 8.5 per cent for a period between one to three years compared to the 9.5 per cent the bank was offering a few months ago. The new lending and deposit rates will come into effect from tomorrow. In this game of cutting rates, the lead has been taken by the public sector banks. Dena Bank too recently cut its PLR from 13.5 per cent to 12.75 per cent.

With RBI cutting key rates, banks are taking a cue and cutting rates across the board in a hope that it will spur demand. But with pink slips and salary cuts building a pall of gloom the government will have to do more than cut rates to spur demand.


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## nitesh

DNA - Money - Reliance set to knock out Asia-West fuel arbitrage

The days may be numbered for Asian refiners and oil traders who have long profited from intermittent arbitrage for selling surplus regional motor fuel cargoes into Western markets &#8212; Reliance Petroleum has arrived.

India&#8217;s biggest private company formally commissioned its new 5,80,000 barrels per day (bpd) Jamnagar refinery last week, nearly doubling the company&#8217;s capacity and creating the world&#8217;s single-largest refining complex at 1.24 million bpd.

Once it hits full stride by the second quarter, when it is expected to begin exporting fuel to capitalise on an Indian fiscal-year tax break, it will add an enormous 8 million tonnes of gasoline and 12 million tonnes of diesel to the market every year, upsetting current supply flows, traders say.

Because of its location on India&#8217;s west coast, it&#8217;s in prime position to meet any unsatisfied demand that emerges from the mainstay European market or even the Middle East and Africa, where demand could continue to expand.

&#8220;When both its refineries are running... it looks likely that Reliance will offset or replace North Asian diesel barrels going West,&#8221; said a Singapore-based trader.

Already besieged by a demand slump on fears of a deep recession, that lost market has forced refiners such as top exporters Formosa Petrochemical Corp in Taiwan and SK Energy, South Korea&#8217;s biggest refiner, to sell at more competitive prices or even to cut runs in future.

And trading firms such as Vitol or Trafigura, which make much of their living on arbitrage, would need to overhaul their trading strategies to fit in Reliance&#8217;&#8217;s additional supplies through term contracts, for example.

Arbitrage under threat
The private Indian refiner, which commissioned the $6 billion plant last Thursday, may start large-scale exports only from April.

Having established a global trading network from Singapore to London to Houston, Reliance will be able to quickly reach the most profitable market for its ultra high-quality fuels, but distance and marketing networks will also be important.

Oil traders expect Reliance to export its gasoline mainly to Africa and the fast-growing Middle East &#8212; because of freight rate advantages &#8212; as opposed to United States, while low-sulphur diesel will be shipped mainly to Europe and the Mediterranean, where diesel is the preferred motor fuel.

Iran needs at least 4,50,000 tonnes of gasoline a month, while Singapore had moved about 45,000 tonnes of the auto fuel to the United Arab Emirates earlier this month, a timely relief for sellers which faced a tightly shut Asia-US arbitrage window.

&#8220;The new refinery will make it tough for sellers. Reliance will have to export one medium-range gasoline cargo a day when it&#8217;s at 100&#37; capacity,&#8221; said a Northeast Asian trader. It can ship out daily an MR cargo of diesel from the new plant, equivalent to 30,000 tonnes in volume, traders said.

Reliance has already sold up to seven cargoes of 0.005% sulphur diesel to trader Vitol, and secured term deals to supply up to a total of 26 cargoes of 0.05% sulphur diesel to Trafigura, Kuwait&#8217;s International Petroleum Group and Dubai-based trader Galana.

The supplies are a mix of 40,000-tonne, 60,000-tonne and 80,000-tonne shipments.
Formosa and SK Energy together export around 300,000 tonnes of gasoline and some 700,000 tonnes of diesel a month in spot and term deals, some shipments of which are usually bound for markets that will now be targeted by Reliance.

The East-West gas oil arbitrage window last swung open in late-November, with at least 300,000 tonnes of diesel seen moving from Asia to Europe, traders said.

Back then, the EastWest spread &#8212; a measure of arbitrage economics with a wider spread indicating higher profitability &#8212; was at discounts of up to $40 a tonne for the front month.

At discounts narrower than $10 a tonne now, the arbitrage window is firmly shut, traders said.

Other exporting plants include the large facilities in Japan and those in Singapore run by ExxonMobil and Royal Dutch Shell, although the two retain an advantage serving the Australian market.

Tough at home
Given its targeted markets on gasoline, some traders are hoping Reliance will not try to sell directly into the US West Coast, leaving traders to handle the Asia-US arbitrage.But with global oil demand contracting this year for the first time in a quarter century, Reliance may find itself competing on Asian refiners&#8217; home turf in the one region that economists are counting on to maintain some growth.

&#8220;If the regions (that Reliance is eyeing) fail to absorb the products, then you will see them coming to the East,&#8221; said another trader.

Yet, the Asian spot market may not be welcoming. Economic slowdown has hit demand in the region&#8217;s top motor fuel importers Indonesia and Vietnam, the latter of which will fire up its first oil refinery come February, relieving the country of 30% of its domestic needs.

China, the world&#8217;s number two oil consumer, saw oil demand retreat for the first time in three years in November and has more or less halted any motor fuel imports after a surge in pre-Olympic demand in the first half of the year.


----------



## nitesh

OVL to takeover Imperial as shareholders accept open offer- Oil & Gas-Energy-News By Industry-News-The Economic Times

OVL to takeover Imperial as shareholders accept open offer
31 Dec 2008, 1235 hrs IST, Rajeev Jayaswal, ET Bureau

NEW DELHI: ONGC Videsh (OVL), the overseas investment arm of India's largest oil exploration company Oil & Natural Gas Corp (ONGC), will formally takeover Imperial Energy soon as over 96.82&#37; sharesholders of the UK-based company has accepted its open offer, a source based in London told ET.

When contacted, a senior official in the government said: "The deal is through, but I' m not in a position to give any details." He didn't specify the timeline for the ownership transfer. "It is being worked out," he said, requesting anonymity.

ONGC chairman RS Sharma said that the company will soon issue a press statement. "You wait till a statement is issued later in the day," he told ET.

OVL's 1,250 pence per share offer values the entire deal at around &#163;1.4 billion or approximately $2.1 billion at the prevailing exchange rates.

OVL had firm offers for only 15.6% share capital of Imperial Energy. The directors of Imperial have already accepted OVL's offer with regard to their entire holdings, representing approximately 6.4% of the existing issued ordinary share capital including 6.1% share of Mr Peter Levine, Chairman Imperial Energy. Another shareholder, Baillie Gifford & Co, has also accepted the share offer for its 9.2% holding.

State-owned OVL had made an open offer to the shareholders of Imperial on December 9 after the 'Hearings Committee' of the takeover in the London Stock Exchange (LSE) panel rejected its request to extend the deadline.

OVL had to take a fresh Cabinet approval for the acquisition in light of the fall in crude oil prices that have changed the economics of the deal. Crude oil prices have fallen below $50 now from a peak of $147 in July when OVL made the offer to acquire Imperial Energy, which has hydrocarbon assets in Russia.

"The Cabinet considered both pros and cons of the deal and then decided in its favour," a source present in the meeting said on condition of anonymity. Experts involved in the deal told the government that the acquisition would be profitable due to future prospects of its assets.

"In future, the recoverable reserves of its assets may go up by 20-25% more that the declared reserves of the oil assets held by Imperial at 900 million barrels. It is an excellent opportunity for the country which imports about 75% of crude oil requirements," he said.


----------



## nitesh

The Pioneer > Online Edition : >> Indian economy Winner in global turmoil of 2008

Indian economy: Winner in global turmoil of 2008

PTI | New Delhi

Described as the elephant that didn't know its strength, India stood tall in 2008 as the global community battled this century's worst economic crisis, while easing prices and dissipation of energy turbulence offered the hope it would outperform the rest in the new year.

Arguably the most eventful year ahead of Lok Sabha polls, the high of the initial months gave in to despair by the middle, but the end appeared to be working in favour of the consumer with inflation halving from the year's high of close to 13 per cent.

The academic theories and manifestation of the Finance Ministry for strict fiscal discipline were, for once, given a backseat as the government worked to push agriculture by waiving farm loans, industry through a stimulus package and consumer by paving the way for low interest regime.

The best part of the economy was its resilience, of course with a little help in the form of fiscal actions from the government to reverse the slow down, at a time when Finance Minister P Chidambaram was asked to take charge of the law and order machinery as Home Minister in the face of Mumbai terror attacks.

Prime Minister Manmohan Singh took the finance portfolio under his fold.

It is the collectivism of RBI and the Government that possibly helped the government avert the blues of the global financial crisis on the domestic economy at a time when the world economies are falling prey to recession one by one.

However, India is expected to grow between six-seven per cent at the pessimistic and optimistic level for the current financial year, while it would be a tad lower - five-six per cent - in the next financial year.


----------



## nitesh

Job slump? Companies to hire 2,50,000 in next few months- Jobs-News By Industry-News-The Economic Times

Job slump? Companies to hire 2,50,000 in next few months
1 Jan 2009, 1650 hrs IST, PTI

NEW DELHI: *There is a good news for job seekers, with the companies planning to hire more than 2,50,000 new employees over the next months* -- making the new year a welcome change from the gloom of 2008 in the job market.

*While the proposed over 2.5 lakh hiring is mostly for the financial services industry,* the industry experts believe that the *overall job market scenario is also set for a recovery in the second half of the year.*

*Topping the list of the companies planning to hire big include public sector banking
giants like State Bank of India and Punjab National Bank as well as insurance firms such as Anil Ambani group's Reliance Life, SBI Life, Metlife, Max New York Life.*

Even some BPOs and healthcare firms like ACS and Accentia are planning to hire thousands of people in the coming days.

*The proposed hirings include more than one lakh of full- time employees and about 1.5 lakh in the part-time positions with the insurance companies*.

Among other sectors, manufacturing and export-oriented businesses are, however, likely to continue to witness some pressure in the next few months, after huge job losses seen during 2008.

HR consultancy major Hewitt Associates believes that sectors like insurance, telecom (where new licensees are entering), infrastructure and Special Economic Zones may look for fresh hirings in 2009, being the major beneficiaries of the government's stimulus plans.

However, the hiring outlook remains uncertain for sectors like real estate, textile and retail sectors, it believes.

Another global HR consultancy Mercer believes that hiring plans by the companies would depend on their business prospects in the coming year. 

Among the major companies planning to hire big time, SBI is planning to recruit 25,000 employees by March. Besides, its life insurance venture, SBI Life, is looking to hire 13,000 agents and 200 sales managers.

Besides, the country's second largest public sector lender PNB and Union Bank are also hiring 5,000 people each, while Indian Overseas Bank, South Indian Bank and IDBI Bank are bringing on board 1,000, 12,000 and 650 employees, respectively.

Among life insurance firms, Reliance Life is hiring 90,000 agents and 2,500 managers, Metlife has announced plans to hire 30,000 agents and 2,000 managers and Max New York Life is recruiting 30,000 agents and 14,000 managers.

Among other sectors, BPO major ACS is hiring 1,000 employees, while health care solutions provider Accentia plans to add 5,000 staff to its payrolls.

" Exponential growth had resulted in a culture where mediocrity flourished. 2009 is an opportunity for companies to bring the performance orientation back into how they manage their human capital," Mercer India Information Product Solution business leader Gangapriya Chakraverti said.

Global HR consultancy major Manpower believes that hiring outlook for the first quarter of 2009 was the weakest since 2005.

Expressing similar views, leading job portal Naukri.com's owner InfoEdge India CFO Ambarish Raghuvanshi told PTI that hiring was going to be slow in the first quarter of 2009 as recruitment trends are impacted by the slowdown in economic growth and decline in business confidence in the country.

He, however, added that some improvement was likely in the second half of calendar year 2009.


----------



## nitesh

Bloomberg.com: India & Pakistan

India Exports Fall a Second Month, Adding Pressure to Cut Rates 

Jan. 1 (Bloomberg) -- India&#8217;s exports fell for the second straight month, adding pressure on the central bank to cut interest rates and support growth in Asia&#8217;s third-largest economy.

The Reserve Bank of India, which has reversed four years of monetary tightening in the past three months, has room to slash rates further after a report today showed inflation slowed to a 10-month low.

Lower borrowing costs will spur consumer demand among the nation&#8217;s 1.2 billion people and compensate for falling orders from recession-hit U.S. and Europe, India&#8217;s biggest markets. India became vulnerable to slowdowns and financial crises in other countries after it started to open its economy in 1991.

&#8220;The negative news on the external side intensifies pressure on the Reserve Bank to cut rates to stoke domestic demand,&#8221; said Prasanna Ananthasubramaniam, an analyst at ICICI Securities Ltd. in Mumbai.

Overseas shipments dropped 9.9 percent to $11.5 billion from a year earlier after contracting 12.1 percent in October, the first decline in seven years, the government said in New Delhi today.

Demand for made-in-Asia goods has slumped amid the deepening global economic slowdown. China&#8217;s exports in November fell 2.2 percent, the first decline in seven years. Singapore&#8217;s exports posted the biggest contraction in more than six years in the same month.

&#8220;My difficulties are increasing as export orders are slowing due to the recession in Europe,&#8221; said Heung Soo Lheem, managing director of the Indian unit at Hyundai Motor Co., South Korea&#8217;s largest automaker. &#8220;We need strong support from the government to keep our plants in good shape.&#8221;

Spending Plan

The government, which unveiled excise duty cuts and a 200 billion-rupee ($4 billion) spending plan last month to boost consumption, will announce more steps to help exporters, Trade Minister Kamal Nath said Dec. 11.

The central bank in November extended the period for subsidized pre-shipment credit to nine months from six months and increased the export refinance limit for commercial banks.

Still, Palaniappan Chidambaram, who was moved to the home ministry from finance after the Mumbai terrorist attacks in November, says India will focus on boosting local consumer spending, accounting for 60 percent of the nation&#8217;s $1.2 trillion economy, to make up for waning global demand.

&#8220;Overseas demand for goods will remain muted as there are no signs of growth revival in the U.S. and Europe,&#8221; said Shubhada Rao, an economist with Yes Bank Ltd. in Mumbai. &#8220;Companies can turn to the domestic market to offset the loss from foreign sales.&#8221;

Borrowing Costs

Measures to spur the economy began on Oct. 6 when Reserve Bank of India Governor Duvvuri Subbarao cut the amount of money lenders need to set aside with the central bank. On Oct. 20, he presided over the first rate reduction in four years. India&#8217;s repurchase rate is 6.5 percent, down from 9 percent set in July.

There is &#8220;considerable scope&#8221; to reduce borrowing costs, the finance ministry said last week, after a drop in commodity prices cooled inflation from a 16-year-high of 12.91 percent in August.

Benchmark wholesale prices rose 6.38 percent in the week to Dec. 20 from a year earlier after gaining 6.61 percent the previous week, the commerce ministry said in New Delhi today. Economists expected an increase of 6.41 percent.

Inflation may slow to 5 percent by the end of March, Arvind Virmani, the finance ministry&#8217;s top economist, said last week.

&#8220;The decline in inflation gives the Reserve Bank comfort to lower borrowing costs,&#8221; said Indranil Pan, chief economist at Mumbai-based Kotak Mahindra Bank Ltd. &#8220;The economy needs to be nursed back into good health and, therefore, we need rate cuts.&#8221;

To contact the reporter on this story: Kartik Goyal in New Delhi at kgoyal@bloomberg.net.
Last Updated: January 1, 2009 06:13 EST


----------



## nitesh

India always does well in adversity: Nandan Nilekani- Corporate Dossier-Features-The Economic Times

India always does well in adversity: Nandan Nilekani
2 Jan 2009, 0528 hrs IST,

The end of this &#8212; quite eventful &#8212; year comes on a rather quiet and sombre note. The widespread expectations of a &#8216;global downturn&#8217; are becoming reality, as exports fall world-wide , and governments tamp down on growth forecasts . The fireworks for the New Year will be muted, and everyone is cutting costs.

The catch-word for the coming year, however, appears to be &#8216;hope&#8217; . An election that the world watched turned on it. Are there things India can hope to achieve, in the throes of a slowdown? Doing well in adversity after all, is what this country does best &#8212; Indian economists and policy makers alike often say to me that India is lethargic except in crisis.

Now, the kind of crisis that enables reform &#8212; as it did in 1991, 1997, and 2001 &#8212; is here. As our growth numbers come down, our national mood is shifting. Easy solutions are no longer possible for governments anxious about reelection &#8212; money is tighter, and giveaways are difficult when funds are scarce. As industry growth slows, the government is also finding that solutions for unemployment can no longer be addressed simply through job guarantees.

And as work becomes scarcer for new job seekers especially in rural and semi-urban India, migration will put more pressure on our cities and urban development . We will also not have the economic buoyancy that has so far, got us past massive inefficiencies (or the complete lack) of infrastructure.

The silver lining to the slowdown is thus the possibility that our policy makers and legislators will become more receptive to better ideas. This gives us an opportunity to push through more effective and long-term policies.

In fact, a slowdown makes such policies even more urgent. In a time of scarcity, the need for well-connected markets for example , cannot be over-emphasised , in order to make hard-tofind opportunities accessible across distances and state borders .

This means that spending on infrastructure has to be sped up rather than slowed down. Emphasising a well-regulated Public Private Partnership (PPP) model across our infrastructure projects can help the government drive road and rail-building and port upgrades in a time of budget constraints.

The state will also have to ease up on red tape restricting entry for new businesses, and convoluted taxes for companies already struggling with cash flows and revenue growth. Rather than bringing in new sops for specific industries, the government should use the opportunity to push through the remaining Tax reforms and the Goods and Services Tax (GST).

Efficiency will be the byword in a tough year. We will have to address the chaos of our cities, and implement the reforms to improve urban governance and responsiveness , and reduce the massive inefficiencies that urban citizens face when it comes to transportation, doing business, and in dealing with local bureaucracies.

The slowdown also puts a renewed emphasis on social security , which is an opportunity to push more effective policies forward. The Indian government has passed the NCEUS bill, but we will have to go further to ensure that our social security solutions remain viable and well-funded &#8212; bringing in some levels of contribution on the part of the employed.

As the dark clouds gather, we cannot ignore those who stand the most exposed &#8212; we have to look closer at the welfare of our unorganised workers, in a way that goes 
beyond providing token pension protections. These workers are our economy&#8217;s most exploited, without key protections when it comes to job security and health care.

Their ability to find and keep jobs will only worsen as the economy weakens. Across factories, textile firms, these workers &#8212; who are 90&#37; of our workforce &#8212; are the first to be laid off. We have to take a tough look at our labour laws in the coming year, which rigorously protect the few &#8212; the unionised workers &#8212; at the expense of the many.

The entrepreneur and venture capitalist Vinod Khosla likes to say that &#8216;a crisis is a terrible thing to waste&#8217; . As our conventional growth options see a lull, entrepreneurs and policy makers alike have a chance to innovate towards new sources of revenue and GDP growth. Alternative energy for instance, remains immensely promising.

While oil prices have come down, in part due to slowing global growth, this industry holds large rewards in coming years for first-movers and innovators in energy crops, solar technologies, and wind and hydroelectric power. The massive inefficiencies and losses in our energy distribution networks should also encourage us to look at radical new solutions &#8211; such as decentralising our energy grid and making it &#8216;smart&#8217; , while tapping into a variety of distributed, alternative energy sources.

The Indian government has been especially worried about the impact of the slowdown on an already weakened agricultural sector, and they&#8217;ve announced schemes such as subsidies towards short-term loans to tide farmers over.

But these are timid steps in the face of an agricultural crisis that is at its heart, an environmental problem. The dismal health of our agriculture sector is tied in water scarcities and the absence of irrigation that has deeply constrained our farmers, and soil depletion that is worsening crop yields.

But addressing this means that we will have to radically alter our environmental approach &#8211; by bringing our natural resources into our economy, and pricing them. Anyone using up these resources would have to pay a cost for it &#8211; whether that means dumping pollutants into rivers, or drawing water.

What ought to give us courage here is that the benefits from this would be massive, and would disproportionately go to the people closest to the environment, who now live in a state of exploitation &#8211; the tribals who live in our forests, and the farmers who have to bear the brunt of water pollution and soil losses.

Over the last half decade, we had an extended honeymoon in growth, exports and productivity. There were plenty of predictions this time last year that India might even touch ten percent growth rates. The disappointment now is palpable. These tough times will put India&#8217;s reputation as an emerging power to the test. But this offers us the ultimate upside: the chance to remove all doubt about the Indian economy&#8217;s resilience.


----------



## Neo

*India unveils second economic stimulus plan ​* 
Saturday, January 03, 2009

NEW DELHI: India on Friday eased foreign borrowing by domestic firms and permitted additional liquidity for the non-banking sector to boost flagging growth in Asias third-largest economy.

The second economic stimulus package in less than a month came as India forecast growth of seven per cent for the year to March 2009, but economists say it could be as low as 6.8 per cent this year and 5.5 per cent the following year.

The package also allowed state administrations to borrow up to 300 billion rupees ($6.2 billion) to meet additional expenditure and fund infrastructure projects.

The package raised the ceiling for foreign investments in India from six billion dollars to $15 billion, national planning official Montek Singh Aluwalia told a news conference. 

But he warned against expecting any immediate economic turnaround.

The latest assessment we have is that we should be willing to see growth rates decline in the coming year and an average growth rate of seven per cent would be quite a good performance, he said.

Indias industrial output shrank for the first time in 15 years by 0.4 per cent in October, after expanding by 12.2 per cent in the same month a year earlier. Indias central bank meanwhile slashed its two key short-term interest rates.

The Reserve Bank of India (RBI) reduced its repo rate, the short term rate at which it lends to commercial banks, by 100 basis points to 5.5 per cent. 

It also slashed the reverse repo rate, the rate at which it borrows overnight, to four per cent.

It also unveiled a cut in the cash reserve ratio, the proportion of deposits domestic banks have to keep with the RBI, by 50 basis points to five per cent from January 17.

These measures will make the new year happier, Aluwalia said. Experts said the easing of the rates was likely to inject around $4.1 billion into the domestic banking system. The rate cuts were the fourth by the bank in less than three months.

Indias economy has been hit by the global recession and confidence has been undermined further by attacks in the financial capital Mumbai that left 172 people dead, including nine gunmen, in November last year.


----------



## slugger

*India's inflation Eases For Eighth Consecutive Week*


> *India's inflation rate eased for the eighth straight week to 6.38%* for the week ended December 20, compared to 6.61% in the preceding week, according to data published by the Ministry of Commerce and Industry. *The inflation rate now more than halved from August's peak of 12.91%.* The figure was 3.74% during the corresponding week of the previous year.
> 
> Inflation, based on the wholesale price index, dropped mainly due to drop in the prices of fruits and vegetables, edible oils and some manufactured products, which will induce the Reserve Bank of India to announce further cuts in key rates to stimulate the country's flagging economy.
> 
> The final estimate of inflation for the week ended October 25 last year, remained unaltered at 10.72%.
> 
> The main index for primary articles declined by 0.2% due to lower prices of chromites, steatite, tea, gram, fruits and vegetables and cottonseed. However, the prices of barites, fire clay, jowar, asbestos, raw silk and raw rubber moved up.
> 
> The annual rate of inflation for 'Primary Articles' was 12.07% for the week ended December 20, compared to 12.15% in the previous week. It was 4.08% a year ago. On the other hand, the annual rate of inflation for 'Food Articles' was 10.52% for the week, compared to 10.46% in the preceding week. It was 2.14% as on December 1, last year.
> 
> The index representing fuel, power, light and lubricants, declined by 0.5% on account of a dip in the prices of aviation turbine fuel, bitumen, light diesel oil and furnace oil.
> 
> The index of Manufactured Products declined by 0.1%. Among the manufactured products, prices of plates and strips, basic pig iron and foundry pig iron, other iron steel and MS bars and rounds, zinc, zinc ingots, salt, imported edible oil and rice bran oil dropped, whereas those of gur, newspaper, caustic soda and oil cakes increased.
> 
> *Bankers said that with inflation on the decline, Reserve Bank of India might cut interest rates anytime.* Prime Minister Manmohan Singh, who met RBI Governor, D. Subbarao, on Monday, urged the apex bank to consider further cut in rates.
> 
> Presently, CRR is 5.5%, while repo and reserve repo rates are 6.5% and 5% respectively. A one-percentage point cut in CRR would bring this rate below 5% for the first time since September 2004. The RBI has been increasing its key rates since 2004. The first major rate cut, since then, was on October 11 last year, when the apex bank reduced the CRR by 250 basis points.
> 
> The government, including the finance ministry, favors another round of rate cuts, especially when *inflation is well within control*. Planning Commission deputy Chairman, Montek Singh Ahluwalia, earlier hinted that there was scope for monetary action in the changed circumstances.
> 
> Union Minister for Petroleum and Natural Gas, Murli Deora also hinted a further cut in petroleum prices this month to rein in inflation.
> 
> According to Ashish Parthasarathy, Deputy Head of treasury, HDFC Bank, a 0.5% to 1% cut in reverse repo rate is expected anytime. K.C. Kalia, Executive Director of Vijaya Bank, expressed a similar view, due to slowdown in different sectors.
> 
> The wholesale price index is watched more closely than the consumer price index (CPI), as it includes more products and is published weekly.



*Source*


----------



## slugger

*International - Weeks after Mumbai attacks, British MPs back Gujarat investments*


> Less than three weeks after the Mumbai terror attacks, the political establishment here is seeking to strengthen Britain&#8217;s business ties with Gujarat - the source of one the largest Indian-origin communities in the country.
> 
> *As many as 67 British MPs have signed an Early Day Motion (EDM) in a rare show of solidarity celebrating the Vibrant Gujarat campaign.*
> 
> The EDM was moved by Barry Gardiner, chairman of the all party parliamentary group on UK-India trade and investment relations, whose Brent North constituency in Northwest London comprises up to 50,000 Britons of Indian origin.
> 
> *The motion "celebrates Britain&#8217;s role as the largest foreign direct investor into the State of Gujarat*, birthplace of Mahatma Gandhi; and welcomes the Festival of Vibrant Gujarat linking commerce and culture as a focus of community harmony for all the people of Gujarat".
> 
> The motion not only *has strong cross-party support but also the backing of leading British politicians* such as Mike Gapes, chairman of the Parliamentary Select Committee for Foreign Affairs; Andrew Dismore, chairman of the Joint Committee on Human Rights; Stephen Pound, former chairman of Labour Friends of India; and Jeremy Corbyn, a prominent human rights campaigner in the British parliament.
> 
> The EDM has already drawn the support of 67 MPs since being moved Friday - a number larger than those garnered by motions of solidarity after the Mumbai blasts.
> 
> The Vibrant Gujarat Investors&#8217; Summit, slated to be held Jan 12-13, 2009, aims to attract further investments into a state that is already among the favourite emerging market destinations for foreign investors.
> 
> The event will showcase business opportunities in a range of sectors in Gujarat, including gas, oil, power, information technology, infrastructure, shipbuilding, tourism, chemicals and petrochemicals, biotechnology, food and agri-business, auto-engineering and urban development.


*Source*


----------



## slugger

*New Year brings 2.5L jobs*


> There is a good news for job seekers, with *the companies planning to hire more than 2,50,000 new employees over the next months* &#8212; making the new year a welcome change from the gloom of 2008 in the job market.
> 
> While the proposed over 2.5 lakh hiring is mostly for the financial services industry, the industry experts believe that the overall job market scenario is also set for a recovery in the second half of the year. Topping the list of the companies planning to hire big include public sector banking giants like State Bank of India and Punjab National Bank as well as insurance firms such as Anil Ambani group&#8217;s Reliance Life, SBI Life, Metlife, Max New York Life.
> 
> Even some BPOs and healthcare firms like ACS and Accentia are planning to hire thousands of people in the coming days. The proposed hirings include more than one lakh of full- time employees and about 1.5 lakh in the part-time positions with the insurance companies. Among other sectors, manufacturing and export-oriented businesses are, however, likely to continue to witness some pressure in the next few months, after huge job losses seen during 2008.



*Source*


----------



## slugger

*'Tea export to Pakistan remains steady despite strained ties'*


> Kolkata: Undeterred by the recent strained relationship with Pakistan, the Tea Board of India expects to export 11,000 tonnes of tea to that country this year, a top official said here Thursday.
> 
> "We expect that the export to Pakistan will be decent this fiscal. There is no problem yet with tea trading though official visits are stopped," Basudeb Banerjee, chairman of the board, told reporters.
> The total tea export to Pakistan last year was in the tune of 5,000 tonnes.
> 
> Ruling out any impact of the global economic meltdown on the tea industry, Banerjee said: "Demand for tea won't be affected due to the slowdown. Rather, tea consumption rises during recession as people shift from other costly beverages to tea."
> 
> Talking about the export in the current fiscal (2008-09), Banerjee said: "Our export this year will be more than what we did last fiscal."
> 
> Last fiscal, India exported 189,000 tonnes and this year it expects to achieve 195,000-200,000 tonnes against a target of 205,000 tonnes, he said.


*Source*


----------



## slugger

*PM announces stimulus package for science*


> Braving cold and fears of bomb blasts, over 3000 Indian and foreign scientists have gathered in picturesque town of Shillong for the annual session of the Indian Science Congress.
> 
> In the 96-year-old history of the annual event, this is the first time it is being held in a northeastern state.
> 
> Prime Minister Manmohan Singh, while inaugurating the event, *announced a new stimulus package for science that promises to triple the funding.*
> 
> Within days of the Guwahati bomb blasts and within weeks of the dastardly attacks on Mumbai, in show of immense resilience, *more than 3000 of the top Indian scientists gathered on a very chilly morning in Shillong to participate in the mega science event.*
> 
> The scientists were happy as the Prime Minister announced a new stimulus package for science by promising a tripling of the budget for science, not withstanding the economic slowdown.
> 
> "This marks a historic turning point for Indian science. I have promised and I stand by that promise that we double the investment in science from one per cent of national income to two per cent of national income," said Singh.
> 
> "We have widened the higher education base of the country by investing in the *creation of 30 new central universities, five new Indian Institutes of Science Education and Research, eight new Indian Institutes of Technology and 20 new Indian Institutes of Information Technology*. We have also _established the Indian Institute of Space Science and Technology at Thiruvananthapuram in Kerala. The Department of Atomic Energy has taken the initiative to set up the National Institute of Science Education and Research in Bhubaneshwar to nurture world-class scientists_," he added.
> 
> Other big announcements at the science meet included a new Rs 20 crore Security Technology Initiative to thwart terrorism. *A new institute to study and use stem cells is to come up at Bangalore*. The Prime Minister also urged the Indian scientists to do much more as the country needs to develop faster becoming a truly knowledge society.
> 
> "India lags behind not just developed western nations, but also the newly industrialised economies of Asia," said Singh.
> 
> Indian scientists have said they are ready to take up the challenge. Indian science seems to be having a dream run - a good past year with the highly successful maiden mission to the moon, Chandrayaan-1 and the culmination of the Indo-US nuclear deal. Now with this tripling of the science budget, the onus really is on Indian scientists to undertake quality research.


*Source

US documentary extols superiority of Indian education system*


----------



## slugger

*26/11: Buying opportunity, not economic disaster*


> Has the terrorist attack on Mumbai wrecked the economy and led to a flight of foreign institutional investors (FIIs), as was feared after 26/11? Not at all. Foreign portfolio investors have adopted Nathan Rothschild's maxim that the best time to buy shares is when blood runs in the streets.
> 
> On November 28, *in the middle of the Mumbai gunfight, they bought $159 million net of Indian stocks and bonds (their purchases of bonds greatly exceeded sales of equities)*. And, _in December, they bought a net $433.5 million of equities and $155.4 million of bonds, making a total dollar inflow of $589 million_. So, *FIIs are treating the Mumbai attack as a buying opportunity, not a tragedy that dents global business confidence.* They remember that the 9/11 attack was horrific, but that this very horror made it an excellent time to buy equities. They are following the same principle in India.
> 
> This is especially striking since in earlier months, from the start of 2008 to 26/11, FIIs had pulled a massive $13.5 billion out of Indian markets, sending the Sensex crashing from a peak of 21,000 to 9,027 on November 26, just before the terror attack. *Pessimists feared that the Mumbai attack would lead to further outflows. Surprise, surprise, dollars flowed in instead.*
> 
> Markets were closed next day, but re-opened on November 28. Most people feared disaster on that day, but after a bad start *the Sensex actually gained 66 points, ending up at 9093. By the end of December it climbed further to 9,647, and then crossed 10,000 a few days later*. _If indeed the attack aimed to hit stock markets and foreign confidence in India, *it failed dismally.*_
> 
> The attack had a short-term impact on tourism and hotels. But long-term flows of foreign direct and portfolio investment are unlikely to be affected. The long-term India story remains unchanged&#8212;*terrorism is part of that story, and investors understand the risks.*
> 
> India has been subject to Islamic terrorist attacks for two decades, and major Indian cities witnessed a series of bomb blasts in 2008. The Mumbai attack was notable for providing reality TV for 60 hours rather than for high casualties &#8212; 250 were killed in the Bombay serial blasts of 1993 and 174 on July 7, 2006. Indeed, 3,500 people die falling off Mumbai trains every year. Every death is a tragedy, but 26/11 was not exceptionally tragic in numbers.
> 
> Maoists have been waging insurrection in many states, and Maoist incidents have been reported from 157 of India's 600 districts. Many of these are in central India, which is rich in mineral ores. This has hobbled some mining and steel projects. Such risks are, however, already factored into the calculus of investors. Hong Kong-based Political & Economic Risk Consultancy Ltd had already assessed India as the riskiest of 14 Asian countries. The risk would have been seen as higher only if investors thought that India and Pakistan would go to war. That, however, is not going to happen.
> 
> The US has pressured Pakistan to crack down on militants, though not nearly as hard as India would like. After the UN strictures, the Pakistani establishment will rein in the wildest groups, not out of love for India but simply to avoid further diplomatic embarrassment. That is positive news for India's economy.
> 
> This does not mean, of course, that 26/11 has had no adverse impact at all on the Indian economy. Tourists galore have cancelled bookings and hotel occupancy is down. However, tourism is not among the top Indian industries. The global recession was already taking its toll before the Mumbai attack, and tourist cancellations will worsen the situation. But foreign exchange earnings from tourism, at around $10 billion per year, are barely 1% of India's GDP. They are less than a quarter of the $42 billion of remittances to India by overseas Indians.
> 
> While tourist hotspots will suffer, the Indian economy as a whole will shrug this aside. Indian economists are far more worried about the impact of the global recession than of the Mumbai attack. As the saying goes, when you are fighting the alligators in a swamp, you do not worry about the mosquitoes.


*Source*


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## nitesh

more to support the above post 

'Rates to fall by up to 5% in 6 months'- Indicators-Economy-News-The Economic Times

'Rates to fall by up to 5&#37; in 6 months'
5 Jan 2009, 0240 hrs IST, AGENCIES

MUMBAI: *Interest rates are set to fall by up to five percentage points in the next six months as inflation is moving towards zero level, a situation that will make India a low-cost economy and a winner globally, ICICI Bank CEO and MD KV Kamath said.*

&#8220;All I can say is that there will be four-to-five percentage points correction in interest rates from where it is today...This correction, I think, will be by July...This is where the rates are heading in six months from now,&#8221; he added.

Crystal-gazing the economy for 2009, ICICI Bank chief said, *&#8220;I think that interest rates would head towards single-digit levels from the quarter starting July.&#8221;* Mr Kamath, however, declined to comment on what the lending rate of ICICI Bank, in particular, would be by that time. ICICI Bank&#8217;s PLR currently stands at over 16%. Apart from the price line moving southward, the trend of declining rates for bank deposits and falling rates of bonds in the Indian market would help banks bring down the cost of credit to the industry.

&#8220;The speed with which, say for example, bulk (deposits) have repriced themselves at 2-2.5 percentage points in a span of just two weeks, gives me comfort to say what probably is going to happen,&#8221; he noted.

The bond prices have started correcting themselves and are going towards the 4% mark, he said, adding that these had already come to 5.5% from 8.5%.

&#8220;Secondly, banks are repricing their own deposits lower...Deposit rates are going down by 100-150 basis points or so...Inflation is also coming towards zero,&#8221; he said, *while forecasting that the bulk deposit rates in India would stabilise at 8-8.5% from a peak of 12.5% till recently.*

Currently, banks are offering up to 10% interest on fixed-deposits by retail customers while institutional and corporate customers&#8217; bulk deposits are higher in value and get a special higher rate from the competing banks.
&#8220;Interestingly, we are heading towards deflation that is very clear, or rather we are heading towards a very low level of inflation. Let me put it appropriately that this also means that bond prices have started correcting themselves.

&#8220;Along with the bond price correction, we are seeing very rapid correction starting to happen in banks&#8217; pricing of debt. On the deposit side, it has just started. So we are not seeing it fully passed on to the customers,&#8221; Mr Kamath said.

*&#8220;I would expect that 3-6 months from now, we will see banks&#8217; deposit books repriced downwards, translating into lower cost from customers...The full repricing is expected to be completed by November, but a significant impact of it would start surfacing by July,&#8221; *he added. 

Asked if banks would start the process of swapping the costlier debts taken by the industry till the middle of this fiscal when the credit was being given for rates of even over 20%, Mr Kamath said there was a comfort level for the corporate world, because the average debt-equity ratio was 1.5:1 as against 3:1 that was prevailing in the mid-1990s.

However, the underlying fear for the industry relates to payments getting delayed because of the slowdown and that is an issue that the banking industry should look at, he said. The banks would not be willing to stretch the working capital limit to that level as they are limited by the norms relating to a debt turning into non-performing assets if payments are delayed beyond permissible period.

&#8220;If the working capital issue is not resolved, we have a problem with corporates...The problem is going to be that banks may not be willing to lend if the company appears to be impaired,&#8221; he said.

Recalling that banks have been allowed by RBI to restructure corporate loans, he said banks should do it properly to give a helping hand to corporates. Asked about the kind of restructuring ICICI Bank was willing to take, he said, &#8220;In our case, because of our history, we are not a major working capital lender. So, this I would say, is not significant in our context...Public sector lenders are the major players.&#8221;

*However, the industry would reap major benefits from oil prices sliding from a peak of over $147 to $37 or so in a matter of months, while other commodities have also corrected by around 60%, Mr Kamath noted.*


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## nitesh

India Today - India&#039;s most widely read magazine.

Govt to inject Rs 100,000 cr to prevent recession: Cong
IANS
New Delhi, January 5, 2009 

The Congress party on Monday said the government has decided to inject Rs 100,000 crore in association with the private sector in the Indian economy to stimulate internal demand to insulate it from the effects of global recession.

"In the next 100 days, the United Progressive Alliance (UPA) government has decided to inject Rs. 1 trillion in the Indian economy to stimulate internal demand to keep it insulated from the world recession. This would be done in association with the private sector," Manish Tewari, Congress spokesperson, told reporters.

Tewari said the decision was taken on the advice of UPA chairperson Sonia Gandhi.

"UPA has taken the decision to provide stimulus to the Indian economy on the advice of Soniaji. This is to increase productivity, control inflation and increase employment opportunities," he said.

Tewari also said the UPA government has been successful in not letting the world recession impact the Indian economy.

"The UPA government has acted as a wall against the world economic recession and hasn't let it impact the Indian economy. We have been able to manage average growth rate of 8.9 per cent during the period of 2004-2009 against 5.8 per cent during the National Democratic Alliance regime (1999-2004)," Tewari said.


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## Neo

*India outsourcing giant hit by billion-dollar fraud ​* 
Thursday, January 08, 2009

MUMBAI: The head of one of Indias biggest outsourcing firms, Satyam Computer, resigned on Wednesday amid a scandal over a billion dollar fraud that sent the company stocks into freefall.

Company founder and chairman B Ramalinga Raju admitted the Hyderabad-based software services firm had falsified accounts and assets and inflated its profits over several years.

The company overstated its cash and bank balances to the tune of more than 50 billion rupees (more than a billion dollars) in its September-end balance sheet, purely on account of inflated profit over a period of several years, Raju said in a statement.

Satyam shares plummeted 77.69 per cent, or 139.15 rupees, to 39.95 rupees on the Mumbai Stock Exchange on Wednesday, as investors dumped the company. The broader benchmark 30-share Sensex plunged 7.25 per cent to 9,586.88.

Satyam had announced the $1.6 billion buyout of the Maytas infrastructure firm earlier this month, but abruptly reversed its decision after investors rejected the plan.

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## Neo

*Indian shares plunge 7.25% on Satyam scandal​*
MUMBAI: Indian stocks plunged 7.25 percent on Wednesday as investors were hit by a billion-dollar fraud scandal in major software firm Satyam Computer, dealers said. The benchmark 30 share Sensex index fell 749.05 points to 9,586.88, ending a run of four days of gains. Satyams founder and chairman B Ramalinga Raju admitted the Hyderabad-based software services firm had falsified accounts and assets and inflated its profits over several years. The company overstated its cash and bank balances to the tune of 50.4 billion rupees ($1.03 billion) in its September-end balance sheet, purely on account of inflated profit over a period of several years, Raju said in a statement. Satyam shares plummeted 77.69 percent, or 139.15 rupees, to 39.95 rupees on the Mumbai Stock Exchange on Wednesday, as investors dumped the company. Concerns of a broader long-term impact on other IT companies saw major software stocks fall. Indias earnings announcement season commences with top software exporter Infosys on Jan 13. In Wednesdays trade, losers led gainers 2,111 to 414 on turnover of 58.17 billion rupees ($1.19 million). The worlds sixth largest steel maker Tata Steel fell 13.1 rupees or 5.31 percent to 233.65, after the companys sales volume dipped by about 14 percent to 1.07 million tonnes in third quarter December-end, due to the global economic slowdown.


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## Neo

*Nissan slows project in India ​* 
Saturday, January 10, 2009

NEW DELHI: Japanese automaker Nissan said on Friday that it had been forced to apply the brakes to several projects in India, including a billion-dollar car plant, due to the current economic climate.

The Renault-Nissan alliance began construction of the plant near the southern city of Chennai in June last year. With an estimated cost of $1.14 billion, the facility was scheduled to begin operations in 2010, with two production lines boasting an eventual capacity of 400,000 cars a year.

Because of our economy, we will go only with one production line of 200,000 units per year from the first half of 2010, Shouhei Kimura, the CEO of Nissan Motor India Pvt Ltd, told reporters in New Delhi. If in one year the economy comes back, we will have 400,000 units by 2011 at full capacity, Kimura said.

Another project with Indias Bajaj group to produce an ultra-cheap car retailing at around $2,500 has also seen its original launch date of early 2011 delayed by at least one year.

The project is going on. It is (now) expected in 2012, Kimura said. After registering double digit growth for several years, car sales in India plunged 20 per cent year-on-year in November 2008.


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## Zaheerkhan

Fuel prices to be cut again

MUMBAI: Another reduction in fuel prices is round the corner. In the next few weeks, petrol will be cheaper by Rs 5 a litre, diesel by Rs 3 a
litre, and cooking gas (LPG) by Rs 20-25 a cylinder, Petroleum Minister Murli Deora said on Saturday.

The cuts would bring fuel prices on par with international rates, he added.

This is the second time in as many months that fuel prices have been cut after global crude oil prices began nosediving after reaching a high of $147.27 July 11. The price is currently around around $40 a barrel.

The Indian basket of crude is also currently hovering around the $40-mark per barrel, down from a peak of $132.47 a barrel in July.

LPG prices had not been cut the last time.

Indane, the cooking gas brand from oil marketing firm Indian Oil Corp (IOC), sells at Rs 304.70 in Delhi, Rs 339.60 in Chennai, Rs 349.50 in Mumbai, and Rs 352.05 in Kolkata.

Deora's announcement comes three days after he said the government might announce another cut in fuel prices soon.

The diesel price cut by Rs 3 a litre is unlikely to satisfy agitating truckers, who want a Rs 10 cut per litre.

However, S Venugopal, the general secretary of the All India Motor Transport Congress (AIMTC) that is spearheading the stir, declined to comment, saying AIMTC leaders arrested on Friday had to be released first before he went into issues like price cuts.

The last fuel price cut was Dec 5 after a gap of 22 months to boost the slowing economy, with the cushion coming from the price drop of $100 per barrel in global crude prices.

Oil marketing companies like IOC were allowed to cut prices by Rs 5 a litre for petrol and Rs 2 a litre for diesel.

Fuel prices to be cut again- Indicators-Economy-News-The Economic Times


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## Zaheerkhan

Inflation dips to 10-month low of 5.91 pct


New Delhi: Inflation fell for the ninth consecutive week on Friday to a 10-month low of 5.91 per cent for the week ended December 27, owing to cheaper food and manufactured items.

Inflation, measured by movement in the wholesale prices, dipped by 0.47 per centage points from 6.38 per cent in the previous week. It stood at 3.83 per cent a year ago.

The previous low was recorded at 5.69 per cent for the week ended February 23, 2008.

The index of food articles group declined by 0.7 per cent as prices of jowar fell by five per cent, fruits and vegetables by three per cent, eggs and bajra by one per cent each.

In case of manufactured goods, imported edible oil became cheaper by one per cent, polyester fibre by two per cent and newsprint by one per cent.

The index of fuel remained unchanged and also there was no movement in the prices of cement and iron and steel during the week.

However, the items which became expensive during the week were unrefined oil (up 14 per cent) and khandsari (2 percent), groundnut oil (2 per cent) and pulses (0.2 per cent).

The inflation has been declining after it touched a peak of 12.91 per cent in August last year

Inflation dips to 10-month low of 5.91 pct - The Financial Express


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## Zaheerkhan

Govt approves to 34 FDI proposals

New Delhi: The government has cleared 34 Foreign Direct Investment (FDI) proposals worth about Rs 1,615 crore of firms like Mahindra and Mahindra, Sumitomo Corporation, and Barwah International from Qatar.

The largest investment proposals are in urban development, by HBS Realtors Mumbai, which intends to invest Rs 300 crore to convert the operating company into a operating-cum-holding company and Qatar-based Barwa International, which would invest Rs 400 crore.

Besides, Sumitomo Corporation from Japan would invest Rs 160 crore, but its proposal would be subject to norms laid down in Press Note one, the government said.

Meanwhile, another proposal from Universal Biofuels for an investment of Rs 200 crore was cleared, and it would incorporate and make downstream investment in subsidiaries and also issue and allot equity.

Govt approves to 34 FDI proposals - The Financial Express

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## nitesh

Infosys Q3 net profit rises 14.5% QoQ- Earnings-News By Company-News-The Economic Times

Infosys Q3 net profit rises 14.5&#37; QoQ
13 Jan 2009, 0918 hrs IST, ECONOMICTIMES.COM

MUMBAI: IT bellwether Infosys Technologies declared a healthy performance in the October-December quarter, reporting 14.5 per cent rise in net Infosys profit to Rs 1641 crore as against Rs 1432 crore in the previous quarter. Income stood at Rs 5786 crore vs Rs 5418 crore (QoQ).

On Monday, the company's shares ended 3.22 per cent at Rs 1156.60 on BSE.

Infosys, the second-largest software services exporter in the country, kicked off the sector's earnings parade today, which would be followed by Tata Consultancy Services on Thursday.

After Satyam lost its credibility, Infosys Technologies is expected to gain the most among the top Indian IT players. Although there will be no shift towards one single provider, Infosys&#8217; reputation as a firm with high corporate governance standards as well as its US listing is expected to stand it in good stead when customers make a choice, said analysts.

On Wednesday, when Ramalinga Raju confessed to cooking Satyam&#8217;s books, Infosys was among the few IT stocks that ended higher. The stock was up 1.7% to Rs 1,187, as compared to Wipro and TCS that ended almost flat at Rs 243.30 and Rs 503.70, respectively. HCL Technologies, the other top player, was down 15%.

"The senior management of Infosys has come out quite aggressively in the media on maintaining high corporate governance standards," pointed out Ascendia Consulting principal analyst Alok Shende. However, the hitch to this could be Infosys&#8217; premium pricing, which some analysts said was 10-15% higher than Satyam&#8217;s rates. This, along with a substantial customer overlap, could work in the favour of the number one IT exporter, TCS.


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## MastanKhan

Hi,

The news about fraud amongst some of the indian companies is not good. There will be repercussions coming about in the next 30 to 60 days. It will be interesting to see how the indian govt acts.


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## nitesh

MastanKhan said:


> Hi,
> 
> The news about fraud amongst some of the indian companies is not good. There will be repercussions coming about in the next 30 to 60 days. It will be interesting to see how the indian govt acts.



The financial fraud has came in light in Satyam. It's CEO is already in custody and new board members are assigned who are looking for independent auditing. As of now no big customer has deserted them. World bank has issued a statement against Wipro that it will not be able to quote for it's tender till 2011. But Wipro has already said that they have revenue of less then 1 million dollars with them and this will not affect them. But yes we need to see how the situation unfolds


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## beetel

gujaraath attracts 7.5 lakh crore investment...

Gujarat vibrant as investment meet brings in Rs 7.5 lakh crore - Express India


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## Nihat

India's inflation falls further to 5.24 per cent


New Delhi: India's annual rate of inflation fell further to 5.24 per cent for the week ended January 3, from 5.91 per cent the week before, official data released on Thursday said.

The inflation rate was 4.26 per cent during the corresponding week the previous year.

The wholesale price index (WPI) for all commodities declined 0.2 per cent to 229 from 229.5 the previous week. Both figures are provisional.

The index for primary articles declined 0.5 per cent to 246.3 from 247.5 the previous week, while that for manufactured products fell 0.1 percent to 200.6 from 200.8.

The index for fuel, power, light and lubricants also declined by 0.2 percent to 329.8 from 330.5.


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## Nihat

TCS Q3 profit seen up 11% at Rs 1401 cr


Tata Consultancy Services (TCS) is to announce its third quarter results. The company's revenues are expected to go up by 5.7% to Rs 7347.7 crore versus Rs 6953.4 crore. Its EBIDTA is seen up 5.4% to Rs 1917 crore versus Rs 1819.7 crore.

The margins are seen flat at 26.1% versus 26.2%. The company's profit is expected to go up by 11% to Rs 1401 crore versus Rs 1261.5 crore.


TCS Q3 profit seen up 11% at Rs 1401 cr


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## LCA

beetel said:


> gujaraath attracts 7.5 lakh crore investment...
> 
> Gujarat vibrant as investment meet brings in Rs 7.5 lakh crore - Express India



May be this one better

Vibrant Gujarat nets Rs 12 lakh crore

Vibrant Gujarat nets Rs 12 lakh crore - ET Cetera-News By Industry-News-The Economic Times


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## nitesh

wow more then 200 billion dollar investment!!!!

Gr8 going


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## Incredible India

Narender modi should become the Prime Minister of India if BJP gets max seats for the next Parliament election.
Anil Ambani pushes Narendra Modi as next Prime Minister | Reliance Insider | Reliance News, Stock Market Updates, Ambani Brothers, RIL, RNRL, Retail, Communication, Power


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## ICBM

I sincerely hope that point never arrives. Even though he may be a great leader, I cannot accept a person with blood on his hand to be my primeminister ever.


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## shrivatsa

REVA introduces next generation electric cars news
New Delhi: India's first electric car maker Bangalore-based Reva Electric Car Company (RECC) has flagged off the advance technology next generation REVA cars to join the nationwide Indian Climate Solutions Road Tour in Bangalore.

These cars will be powered by the next generation lithium ion batteries. In addition they will have solar power panels to harness sun's energy and further increase the range. The proprietary energy management system manages the flow of energy efficiently increasing the range to 150km &#8211; 200km per charge.

''We take this opportunity to showcase our advanced technology as well as how EVs can be a viable transport option to battle environmental issues," said Chetan Maini, founder & chief technology officer, RECC. "REVA is happy to be associated with the Indian Youth Climate Network and hope that it succeeds in spreading awareness of going green as well as showcase the power of EVs.''

Indian Youth Climate Network, a group of dynamic individuals from across India and around the world have launched on a journey across the country to highlight India's local eco-solutions as well as empower the youth on one of the greatest challenges of our time: global climate change.


Equipped with three solar plug-in electric REVA vehicles and a solar powered music band called Solar Punch, these inspired youth powered by their passion for the future will depart from Bangalore to their other destinations today.

Reva Electric Car Companyis a joint venture between Maini Group of India and AEV LLC of California and venture-backed by US investors Global Environment Fund and Draper Fischer Jurveston.

A technology innovator from India, Reva was the first company worldwide to successfully commercialise electric carsand sells or test markets its range of electric cars in 18 countries across Europe and Asia and has the largest deployed fleet of electric cars in the market with over 2,500 EVs on the road that have logged in an estimated 50 million kilometes of user experience.

domain-b.com : REVA introduces next generation electric cars


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## ju87

Nihat said:


> India's inflation falls further to 5.24 per cent
> 
> 
> New Delhi: India's annual rate of inflation fell further to 5.24 per cent for the week ended January 3, from 5.91 per cent the week before, official data released on Thursday said.
> 
> The inflation rate was 4.26 per cent during the corresponding week the previous year.
> 
> The wholesale price index (WPI) for all commodities declined 0.2 per cent to 229 from 229.5 the previous week. Both figures are provisional.
> 
> The index for primary articles declined 0.5 per cent to 246.3 from 247.5 the previous week, while that for manufactured products fell 0.1 percent to 200.6 from 200.8.
> 
> The index for fuel, power, light and lubricants also declined by 0.2 percent to 329.8 from 330.5.



Hopefully this will lead to a further interest rate cut?


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## nitesh

India will have 85-90 mn jobs across sectors: HR experts- Jobs-News By Industry-News-The Economic Times

NEW DELHI: The "India Shining" story may be under stress by the ongoing economic crisis, but some sectors and career options still hold promise for job seekers this year, according to human resource experts.

Leading advisory Boston Consulting Group says India will have a demand for 85-90 million people across various sectors, and the majority of the demand will come from high-growth industries like IT, outsourcing, banking, retail and healthcare.

Similarly, a survey by HR consultancy Manpower projects hiring to rise steadily by around 18 per cent from this quarter in many sectors, signifying that jobs in India may not be entirely affected by the financial turmoil in rich nations.

"India poses a far more positive outlook as compared to what has been happening across the world," said Cherian Kuruvila, director operations, Manpower India, adding that seven per cent gross domestic product (GDP) growth for the country showed that the economy remained healthy.

"Employers in the mining and construction industries as also services sector are especially looking to scale up," Kuruvila said, but added that new jobs won't be distributed evenly through all regions and industries.

India has a work force of 484 million people, of which 273 million work in rural areas, 61 million in manufacturing and about 150 million in services, says the Boston Consulting Group that recently conducted a study on the country's services sector.

"Going forward, the Indian economy is likely to be overwhelmingly dependent on the growth of services. More than 70 per cent of India's incremental GDP and 60 per cent of new jobs over the next five years are expected to be generated by services." 

A survey across the Asia-Pacific region by TNS, a market research and business analysis firm, with Gallup International, a global human resource consulting firm, also threw up interesting findings.

Sixty-two per cent of the Indians polled felt they would be able to hold on to their jobs in 2009 and the 57 per cent who expected unemployment to rise did not not consider they would be the ones affected.

"It seems, despite the slowdowns and reports of downsizing, there is an overall confidence among the employed in India that 'My job is secure! Difficulties, if any, are for others, not me'," said TNS India executive director Chhavi Bhargava.

Experts concede that the present financial meltdown has raised doubts over the performance of some industries and its impact on salaries and perks, but hope Indian businesses will come out of the slump earlier than their counterparts overseas.

"The impact on salary was felt in 2008 and it may continue till some time. The payouts were significantly lower than the 15-200 per cent bonus payouts in 2007," said Absolute HR Services chief executive Kunal Banerji.

"Gone are the days of experimentation with jobs. I would advise employees not to be adventurous checking different jobs. Stability is the mantra," said Confiar Consultants managing director Vivek Ahuja.

Apart from advising employees to keep their jobs this year, HR consultants also feel these are also the times when people will turn to age old values and ethics and play by the book.

"The old adages like no substitute for hard work and no short-cuts to success are back in vogue," Banerji said. "Stay hungry for work or stay hungry is the mantra for corporate India."


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## Neo

*Indias textile sector faces life or death struggle amid downturn ​* 
Wednesday, January 21, 2009

NOIDA, India: Neeraj Bhasins basement factory outside New Delhi is dark and dingy, but theres just enough light to see the dust that has accumulated on the order catalogues sitting on his desk.

At one time Bhasins 22-year-old textile export company, Eastern Connexion Exports, received regular orders for home furnishings from France, Spain and Scandinavia.

But the economic meltdown in the major export markets of Europe and the US has led to a substantial fall in foreign orders and could be the final nail in the coffin for many of Indias small-and medium-sized textile houses.

Now the colourful organza curtains, floor cushions and quilt covers that were once produced in bulk sit in boxes and are piled high on tables as the companys profits have steadily shrunk.

The global financial crisis is more grim news for Indias second-largest industry, which has already seen 700,000 workers laid off and is set to shed another 500,000 jobs in the next five months, industry and government figures show.

The textile sector employs almost 38 million workers and accounts for eight percent of Indias GDP.

In 2007-08 it was worth 22 billion dollars, but even before demand in the US and Europe started falling, the high value of the rupee and a spike in the cost of raw materials left textile exports more vulnerable than other sectors.

Industry representatives responded coolly to a government stimulus package announced in December, which included a four percent cut in value-added tax aimed at bringing textile prices down.

They said such packages would do little to stem the decline in demand in major export markets caused by the economic slowdown.

This doesnt really get addressed by any new investment, said Subir Gokarn, chief economist of Standard and Poors Asia-Pacific division.

New economic packages help companies see through the recession by allowing them to hold on to cash they already have or by injecting short-term liquidity, said Gokarn.

Thats some relief but its not going to make up for the fact that markets are in very sluggish conditions, he said. 

Entire sector in danger: R K Dalmia, chairman of the Confederation of Indian Textile Industry, said the government should give textile companies some debt relief during this crisis or else there could be a sector-wide default on loan repayments.

We are not asking for any bailout package like the US and other countries. 

We are asking the government to give us certain benefits which are legitimate to our industry, Dalmia said.

Bhasin was less than enthusiastic about relief packages.

If I dont have the business why would I need the credit? he asked.

Bhasin said he has seen his business survive a few downturns in years in business but this is definitely the longest period.

At its peak, Eastern Connexion employed up to 700 people representing every socio-economic level, from shop floor workers to quality control specialists.

His four-storey factory in the New Delhi suburb of Noida once bustled with more than 150 workers, but hard times have forced him to rent out every floor except the basement, where only 15 employees remain. Inside, a lone worker, Babli, sits at one of the six sewing tables, snipping away at sheer white fabric.

He said he has worked in Bhasins factory for 14 years, and while he is aware of the problems in other countries that have affected his work, he is hopeful that he will still be able to support his wife and three children.

The company is still going, said Babli while fiddling with a tape measure around his neck. There are problems, but its in Gods hands.

He said he worries his friends working in the same sector will have to return to unemployment in their villages if work in the city dries up.

Much of Indias textile industry is still traditional, relying on manual work in rural areas in Punjab, Gujarat and southern India, but there is plenty of work in urban centres to employ villagers. 

Job losses on the horizon: If things keep going the way they are, Bhasin said he may have to call it a day and let go of loyal employees like Babli.

Im not going to be running myself into the ground just because Ive set up an industry, said Bhasin. Whether or not I want to do anything for them, I cant.

Bhasin said he had considered shifting his focus to the domestic textile market, which makes up 50 percent of all demand. But poor infrastructure and problems in collecting payment from Indian retail buyers leave little incentive for him to restructure.

And trying to look for new textile markets outside the US and Europe is also fruitless.

All of the other countries to whom you could think of exporting are also major exporters themselves, so this is a very unique problem for the textile sector, said Gokarn, referring to Bangladesh, Vietnam and China.

He said markets would have to improve within six months or so because beyond that its very difficult to keep unviable businesses up for very long.

Bhasin hasnt given himself a time-frame for waiting out the recession, but is pessimistic.

When you have to sustain yourself over a long period of time, there is a breaking point, he said.

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## Nihat

*3rd stimulus to bring sops for exporters*


New Delhi: The apex committee monitoring the health of economy, headed by Prime Minister Manmohan Singh and consisting of his senior cabinet colleagues, is meeting industry representatives in the Capital on Wednesday before finalising the third stimulus package expected early next month.

The government is considering an industry proposal to give exporters further concessions on borrowings, sources said. The government's concern about the plight of exporters  and its potential political fallout  was evident when, speaking at an economic conference in the Capital on Tuesday, commerce and industry minister Kamal Nath said the government is working on a comprehensive package for exporters as it fears at least 10 million job losses in the export sector by the end of this financial year alone.

Wednesday's meet is likely to take up industry's suggestion that the government provide an additional 2% interest rate subvention  the subsidy on the rate of interest  to help exporters access cheaper finances. Despite adequate liquidity in the system, many exporters are still paying an effective rate of 8-9% even after taking account of the 2% subvention already available, industry chambers have said. Even the floor rate on the interest charged has been fixed at 7% while industry has constantly been demanding that it be brought down to 5% to enusre global competitiveness.

The government should do away with the condition of a minimum interest rate of 7%, especially when competitor countries are making credit available at 5%,'' said Rafeeque Ahmed, one of India's largest leather exporters and an invitee to Wednesday's meet. He said an additional interest rate subvention in the next stimulus package would help the export-oriented units to save millions of jobs.

The PM's apex panel consists of commerce minister Kamal Nath, planning commission deputy chairman Montek Singh Ahluwalia, RBI governor D Subbarao and former FM P Chidambaram, now holding the Home portfolio. With manufacturing industry such as textiles, metal, capital goods, leather and chemicals already having announced a cut in production between 10% to 50% by March 2009, the government fears that any failure to revive these sectors would lead to millions of job losses.

A Ficci survey had earlier projected negative growth in textiles, leather and metal sectors. The metal products reported negative growth of 17% in August, textiles and leather segments had negative growth in September.


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## Nihat

*MAY BE ALLOWED TO ACQUIRE 25%*
Foreign airlines may buy into Indian ones
Saurabh Sinha | TNN

New Delhi: Cash-starved Indian carriers may soon get some fund infusion and management expertise from leading international airlines. On Friday, a meeting of committee of secretaries, headed by the cabinet secretary, will take up aviation ministry's proposal to allow foreign airlines to acquire 25% stake in domestic airlines, with limited management control and no representation on board.

The aviation ministry's proposal has backing from the commerce ministry, with department of industrial policy and promotion is pushing for a 49% stake to be offered to the foreign airlines in desi ones. The aviation ministry was opposed to the idea of FDI from foreign airlines. However, it changed mind to help domestic airlines survive the present downturn.

"In Friday's meet, the aviation ministry will push for a 25% cap and its views will get due importance since the matter concerns the airline sector. Some consensus on quantum of stake may emerge as the cabinet note has to be moved by the commerce ministry for final approval by the government," said sources.

A number of foreign airlines like Lufthansa, British Airways and Singapore Airlines are sitting on huge cash reserves and have in the past expressed interest in buying stakes in domestic airlines. At present, foreign players  except airlines  can hold up to 49% stake in Indian carriers. Allowing foreign airlines can see crucial fund infusion in the aviation sector.

"Allowing FDI by foreign airlines is the single most important thing that will determine the face of Indian aviation. Both Jet and Kingfisher are now keen on getting some foreign airline on board. If FDI is allowed, each of them will like to get best valuation from global biggies," said an airline owner.

Aviation sources said that FDI will also enable some players  who started airlines but have now found they are not able to run them properly  to make a face-saving exit. "There are at least two players who want to exit the aviation space," said an airline CEO.


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## LCA

Tele density in India crosses 33 per cent
10.81 million Wireless Subscribers added in December 2008, Wireline tele density drops further
Wednesday, January 21, 2009 
NEW DELHI, INDIA: The Telecom Regulatory Authority of India (TRAI) said on Wednesday that the total number of telephone connections (Wireline and Wireless) added in the country during December 2008 was 10.66 million, as compared to 10.18 million connections added in November 2008.

With this the total number of telephone connections in the country touched 384.79 million at the end of December 2008 and the overall tele-density has reached 33.23 per cent per cent, from 32.34 per cent in November 2008.

The total wireless subscribers (GSM, CDMA & WLL(F)) base stood at 346.89 million at the end of December 2008. A total of 10.81 million wireless subscribers have been added during the month of December 2008 as against 10.35 million wireless subscribers added during the month of November 2008, said a TRAI press release.

In the wireline segment, the subscriber base has decreased to 37.90 million in the month of December 2008 as against 38.05 million subscribers in November 2008 registering a drop of 0.15 million.

The total Broadband subscriber base has reached 5.45 million by the end of December 2008 as compared to 5.28 million by the end of November 2008, TRAI said.

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## Nihat

India to ban Chinese toys for six months

Anu Jogesh / CNN-IBN

New Delhi: A health concern or an economic compulsion? Following India's the ban on import of milk, milk products and chocolates from China, the Commerce ministry has announced the ban on some Chinese toys for a period of six months.

The commerce secretary has told CNN IBN that, " The reason for the ban is a concern for public health. Chinese toys are known to have high content of poisonous substances like lead."

International and Indian studies in the past have shown that Chinese toys contain high amounts of lead.

In fact, a CNN-IBN special investigation one year ago, tested a random sample of toys for lead.

The results revealed that Chinese toys contained higher levels lead than their Indian counterparts.

The study also showed that the highest content of this heavy metal was in products like teethers for newborn and toddlers.

However, a closer look at the categories that have been banned by the Indian government include items like tricycles, pedal cars, recreational models and puzzles.

These are not necessarily toys that lend themselves to being constantly chewed or ingested- the one way by which lead actually leaches out can cause lead poisoning in children. So it looks like the commerce ministry has other concerns. Many say this temporary ban is a means of providing protection to domestic manufacturers, against cheap competition.

After all, over 70 per cent of all toys sold in India come from China.

Perhaps this is the governments way of heeding distress calls of small scale toys manufactures in a tough economic market.


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## Nihat

*PM eco panel cuts FY09 growth forecast to 7.1% vs 7.7%*



The Prime Ministers Economic Panel has cut India's FY09 growth forecast to 7.1% versus 7.7%. This downward revision was expected because many of the agencies have actually revised it to even downwards of 7% and this in fact seems a trifle optimistic compared to the other forecast. Fiscal deficit would be the cause for concern; they predict the combined fiscal deficit to be upwards of 10% both for states and the centre. According to the Economic Advisory Council in a year of downturn, the fiscal deficit is something that perhaps our government should ignore. Current account deficit for FY09 will be at 1.9% of GDP, it said. The Economic Panel added that it sees the FY10 growth between 7% and 7.5%. 

The comforting factor would be inflation which the panel estimates would hover around the 4% mark at the end of this fiscal that is by the end of February.


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## keeninterest

LCA said:


> May be this one better
> 
> Vibrant Gujarat nets Rs 12 lakh crore
> 
> Vibrant Gujarat nets Rs 12 lakh crore - ET Cetera-News By Industry-News-The Economic Times



wow, modi is the man. $250billion investment with in two days speaks volumes about him, and then there is a meet every two years, and further he plans to make it better and bigger than davos. well thats kind of saying a lot but his credentials can never be suspected, may be in another 10-15 years time gujarat would look completely different to the rest of the country if the rest of the state governments were not to pull up their socks. this is a wake up call fo the whole country.



Nihat said:


> *PM eco panel cuts FY09 growth forecast to 7.1% vs 7.7%*
> 
> The Prime Ministers Economic Panel has cut India's FY09 growth forecast to 7.1% versus 7.7%. Fiscal deficit would be the cause for concern; they predict the combined fiscal deficit to be upwards of 10% both for states and the centre. According to the Economic Advisory Council in a year of downturn, the fiscal deficit is something that perhaps our government should ignore. Current account deficit for FY09 will be at 1.9% of GDP, it said. The Economic Panel added that it sees the FY10 growth between 7% and 7.5%.



not bad given the times this figure will be achieved but this does show some considerable downfall in the growth rate expected in the 3rd and 4th quarter, but if we can sustain the same figure the next fiscal as has been mentioned by the eco panel then that would be tremendous. 

when it comes to fiscal deficit, that for me is the real worrying sign. the major blame lies with the state governements, these fellows need to get their act together.


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## macintosh

World Bank pegs real GDP growth at 6.3&#37; 

Mumbai, Jan 26: The Reserve Bank on Monday said forecasts by select agencies have pegged real GDP growth for 2008-09 in the 6.3-8 per cent range. 

Related Stories
Economy to slowdown; steps to boost demand likely: RBI
While the World Bank has pegged overall growth at 6.3 per cent, the lowest, the Confederation of Indian Industries (CII) has pegged it above 8 per cent, the highest. 

The Prime Minister's Economic Advisory Council sees overall growth at 7.1 per cent, and other agencies have pegged it in the 7-8 per cent range. 

Similarly, while the Asian Development Bank and Assocham have pegged it at 7 and 7.6 per cent, respectively, Crisil has put it between 6.5 and 7 per cent. 

Merrill Lynch and Citigroup have pegged growth at 7.2 per cent, while the Centre for Monitoring Indian Economy (CMIE) has pegged it at 7.4 per cent. 

On same lines, the National Council of Applied Economic Research (NCAER) and UNCTAD have each put the figure at 7.6 per cent. 

The International Monetary Fund (for the calendar year 2008) has put growth at 7.8 per cent, while the Finance Ministry says it would be around 7 per cent


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## Nihat

Indian economy slowing down, admits RBI



REALTY BITES: In India the slowdown in the realty sector is affecting the financial sector.


New Delhi: The Reserve Bank of India on Monday said the economy after exhibiting strong growth in the second quarter this fiscal is now slowing down in the wake of the global meltdown.

&#8220;The global economic outlook has deteriorated sharply since September 2008 with several countries, notably the US, the UK, the Euro area and Japan experiencing recession. In India too, there is evidence of a slowing down of economic activity,&#8221; the apex bank said in its 'Macro Economic and Monetary Developments Third Quarter Review 2008-09'.

Unlike in the advanced countries where the contagion of crisis spread from the financial to the realty sector, in India the slowdown in the realty sector is affecting the financial sector, it added.

&#8220;Although agricultural outlook remains satisfactory, industrial growth has decelerated sharply and services sector is slowing,&#8221; the review said.

According to the bank, the slowdown was primarily driven by a moderation of consumption growth and widening of trade deficit.

The financial markets in India, which remained strong in the first half of the fiscal turned volatile following the collapse of several global financial institutions, the report said.

&#8220;This necessitated the Reserve Bank to undertake a series of measures to inject rupee and foreign exchange liquidity from mid-September 2008 onwards. Liquidity conditions turned around and became comfortable from mid-November 2008,&#8221; the review said.

However, the RBI said several factors like expected increase in consumption, debt waiver for farmers and implementation of Sixth Pay Commission's recommendations will have positive impacts on economy.

&#8220;The easing of international oil prices and commodity prices may help in softening the inflationary pressure,&#8221; it said.

Indian economy slowing down, admits RBI


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## macintosh

Suzlon to set up Rs 50,000 crore steel plant in Karnataka 

Bangalore, Jan 28: Wind energy major Suzlon plans to invest nearly Rs 50,000 crore to set up an integrated steel plant in Karnataka, state officials on Wednesday said. 

Suzlon's Rs 49,720-crore project, which would be set up at Bijapur district in the state, was among the 15 proposals with envisaged investment of Rs 75,541.25 crore, cleared by the State High Level Clearance Committee chaired by Chief Minister B S Yeddyurappa. 

Major and Medium Industries Minister Murugesh R Nirani said the company would take up the project in four phases and is likely to create 9,000 jobs. 

According to Karnataka's Commissioner for Industrial Development, Raj Kumar Khatri said Suzlon plans to manufacture steel on its own for wind turbines to meet its domestic and overseas demand. 

"Instead of taking steel from other companies, they (Suzlon) would like to make steel and then convert it into (wind) towers," he said. 

Hazira Steel Ltd's (Essar Steel Karnataka Ltd) proposed Rs 17,760-crore integrated steel plant with potential to give employment to 9,675 persons was also cleared. 

Meanwhile, Brooke Bond Real Estates Pvt Ltd, part of Hindustan Unilever, proposed to set up a Rs 1,602 crore IT/ITES special economic zone here, where they were holding land since 1982, officials said. 

Brooke Bond has projected an employment potential of 2.88 lakh in this venture. 

Yeddyurappa said out of the 15 projects cleared, eight are in north Karnataka with envisaged investment of Rs 72,025.25 crore. The projects are likely to provide employment to 65,932 persons. 


It's pretty good news in these times.


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## macintosh

apanese agency to lend in excess of $2.25 bn target to India	

Published: February 1,2009


New Delhi, Feb 1 Japan International Cooperation Agency, which lends for development projects in emerging economies, has said it would disburse more than its targeted 2.25 billion dollars loans to India in the remaining part of this fiscal.

Despite the economic downturn, the agency does not foresee any fall in its lending activities for India and rather expect the actual receivables by the projects in India in terms of US dollar to also benefit from the appreciation in the Japanese currency yen.
"We have planned to provide loan of around 2.25 billion dollars under various Officials Development Assistance (ODA) programmes in India. But we are expecting to disburse slightly more than this amount,"JICA&aposs Chief Representative in India Irigaki Hidetoshi told PTI.
Japan International Cooperation Agency (JICA) is an organisation established by the Japan government for implementing its Officials Development Assistance programmes. Under ODA programmes, JICA gives loans for various development projects to developing countries.
Hidetoshi said,"We do not have any plan to reduce our planned loan target for India. Since we are government agency, we are required to pump more money for various development projects in the developing countries to reduce the impact of recession."
He further added that" India would eventually get even more money than we disburse because of yen appreciation and weakening of dollar due to recession. A US dollar was available for 120 yen last year which is now trading near 90 yen."
JICA is to disburse 225.13 billion Yen during this financial year which comes to around 2.25 billion dollars at an exchange rate of one USD for 100 yen. But since a USD is selling at around 89 yen, India would be benefited from the Japanese currency appreciation.


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## macintosh

RIL regains Rs 2 tn market capitalization 

Mumbai, Feb 01: The country's 10 most valued firms witnessed an addition of over Rs 66,000 crore in their market capitalization last week, with Reliance Industries regaining the Rs two trillion valuation turf. 

Mukesh Ambani-led Reliance Industries remained the numero-uno in the elite club of 10 most valued firms by adding Rs 27,077 crore to its market capitalisation. 

Reliance Industries (RIL) regained the Rs two trillion mark after a gap of five weeks after its shares surged 15&#37; on the Bombay Stock Exchange during the week. 

At the end of trade on Friday, the market capitalization of RIL stood at Rs 2,08,559.98 crore, while it was at Rs 1,81,483 crore in the week-ago period. 

At the end of Friday's trade, the market-cap of top 10 firms, comprising six public sector units and four private sector companies, witnessed an addition of Rs 66,049.75 crore in their valuation to Rs 1,044,684 crore. 

Last week, the market capitalization of 10 elite companies was Rs 9,78,634 crore. 

Mining giant NMDC was the second biggest gainer in the top 10 club. It climbed up to the ninth spot from earlier 10th after adding Rs 8,504 crore to its valuation. 

Power utility NTPC remained the country's most valued PSU entity with a market capitalization of Rs 1,56,251 crore. It had added Rs 8,328 crore to its valuation in a week. 

Trading firm MMTC was the lone loser in terms of valuation in last week's market. The company, which saw its market cap erode by Rs 309 crore in the week, slipped to the seventh spot from the last week's fifth rank. 

IT bellwether Infosys Technologies moved up one place to the fifth spot after adding over Rs 5,800 crore to its valuation, and country's largest lender State Bank of India also moved up one notch to sixth place, adding Rs 7,012 crore in the week. 

Similarly, state-run ONGC and Sunil Mittal-led Bharti Airtel added Rs 2,652 crore and Rs 3,455 crore respectively to their valuation. Also diversified conglomerate ITC jumped up to the eight position, from earlier 10th, after adding Rs 3,508 crore to its valuation. 

In the coveted club of top 10, RIL is followed by NTPC (Rs 1,56,252 crore), ONGC (Rs 1,40,780 crore), Bharti Airtel (Rs 1,29,319 crore), Infosys (Rs 74,758 crore), SBI (Rs 73,151 crore), MMTC (Rs 72,412 crore), ITC (Rs 67,781 crore), NMDC (Rs 66,032 crore), BHEL (Rs 64,639 crore). 

Bureau Report


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## keeninterest

macintosh said:


> Suzlon to set up Rs 50,000 crore steel plant in Karnataka
> 
> *It's pretty good news in these times.*



i wont talk about the bad times and the importance of such investments or the confidence the corporate is showing, all those are more or less understood when such a report comes, but present a view on the changing attitude of the indian public and the politic alike on the issue of development. both these issues are interlinked and the reason i highlight this is because the attitude is the most important factor and only then the rest follows, which as a result we are seeing now. 

i recall a very good analysis that was presented by the ndtv when the results of last 6 assembly elections came. the analysis presented was on the wins of congress in delhi and bjp in mp and chattisgarh. a very significant point made was how the politics of development had evolved over the years and the very robust feed back people have been giving by way of retaining the incumbents. all 3 mentioned states had the incumbents winning who fought elections on the developmental work they had done over the last few years of their governance, which is not a usual sight in indian context, since hardly ever was development an election issue but times have changed significantly since some 5 odd years. the over all attitude of the general public is changing, and in all this development per se has started getting the importance it requires, those who are abreast on the issue of development, and make it happen have now a lesser chance of not making it again the next time post the elections. 

i think some very crucial lessons have been learnt and we see a sudden change which is a lot more aggressive when it comes to development, times are changing fast and it is good to see the politicians are learning their lessons, though some still are oblivious to the idea.

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## nitesh

Hey keen nice thing that you pointed out

Now winning elections is not only about cast politics there should be a development agenda as well.

Change is happening although slow but sure


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## macintosh

Definitely. Now a days even the laggard in development states like Bihar are ushering into development.And indeed Nitesh kumar was presented IBN Indian politician of the year for his role in developing Bihar.But I still believe that the man to beat is Narendra Modi-who is a model for all India irrespective of whether you like him or not.


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## macintosh

India's Reliance ships spot Jan fuel to Iran
Tue Feb 3, 2009 7:56pm 


NEW DEHLI, Feb 3 (Reuters) - India's Reliance Industries (RELI.BO: Quote, Profile, Research) exported more than 750,000 barrels of fuel to Tehran in January, trade sources said on Tuesday.

Reliance had stopped selling fuel to the Islamic Republic last year after French banks BNP Paribas (BNPP.PA: Quote, Profile, Research) and Calyon stopped offering credit on the deals, after pressure from Western nations that believe Tehran is trying to develop nuclear weapons.

"They sent one 36,000-tonne (306,684 barrels) gasoline cargo, and two 27,000-30,000 tonne (223,200 barrels) gas oil cargoes for Bandar Abbas port in January," said one of the traders. The company itself declined comment.

Tehran has not renewed its term supply deal with Reliance, said a Middle East-based source familiar with the Islamic Republic's fuel import supply programme, but the source declined to provide more details.

An Asian-based trader said Reliance continued to ship out refined oil products to Iran.

"How can they stop trade on one side? It is difficult to believe that they continue to buy significant quantity of Iranian crude and stop selling products," the trader said.

He said Reliance had exported two cargoes each of diesel and petrol to Iran in December, but in the following month two diesel cargoes and one petrol cargo were shipped out.

In January, India's Mangalore Refineries and Petrochemicals Ltd (MRPL.BO: Quote, Profile, Research) looked unlikely to renew its term deal to supply gas oil to Iran following a price dispute. 

The Business Standard newspaper early last month reported that Reliance had decided to stop gasoline supplies to Iran after fulfilling all contractual obligations.

The report said that decision came after eight U.S. congressmen wrote to the U.S. Export-Import Bank to suspend all financial assistance to Reliance until it agreed to halt sales to Iran.

Reliance operates a 660,000 barrels per day refinery at Jamnagar in western India and its subsidiary Reliance Petroleum Ltd (RPET.BO: Quote, Profile, Research) commissioned a new export-focused 580,000 bpd plant adjacent to the existing refinery.

After reaching full capacity, the $6 billion new refinery and the existing plant will make the Jamnagar complex the world's single-biggest supplier of fuels to the global market, pumping out 1.24 million bpd.

(Additional reporting by Luke Pachymuthu in DUBAI; Editing by Mark Williams)


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## Nihat

*China likely to drag India to WTO over toy ban: Report*


Beijing: China may ask the World Trade Organisation (WTO) to investigate a six-month import ban slapped on its toys last month by India, the official China Daily reported on Wednesday, citing a source close to the matter.

Worries about protectionism are rising as the impact of the global financial crisis spreads, increasing the temptation for governments to bring in measures that will help their firms in the short-term but worsen the overall economic pain.

India last month banned imports of several types of toys from China for six months "in the public interest," without giving any further details of why.

The Toy Association of India President, Raj Kumar, said India had likely taken the step in the interest of the economy and consumer safety.

The Chinese government will proably ask the global trade regulator to look into whether the move violates its laws, the state-owned paper said, quoting a source who asked not to be named.

China's manufacturing industry - a key supplier of toys, apparel and food to much of the world - has faced a wave of complaints in recent years, most recently as thousands of people have fallen ill as a result of consuming milk powder tainted with melamine, a chemical used to make plastics.

The world's leading toymaker Mattel recalled over 21 million Chinese-made toys worldwide in 2007 due to excessive levels of lead paint and other unsafe components.

But the Chinese report quoted a trade lawyer saying that the Indian policy was an illegal and protectionist.

"The ban cannot hold water. The Indian side is doomed to lose in the court if the Chinese government appealed to the WTO Dispute Settlement Body," said Fu Donghui, managing director of Allbright Law Firm Beijing, which deals with WTO-related cases.

Beijing had already said last month that it was "strongly dissatisfied" with the European Union's imposition of duties on its screws and fasteners, which it said had obvious protectionist intentions and harmed the rights of Chinese manufacturers.


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## LCA

Why isn't it easy to beat India in IT- Software-Infotech-The Economic Times

*Why isn't it easy to beat India in IT*
4 Feb 2009, 1004 hrs IST, IANS

WASHINGTON: China is unlikely to overtake India in outsourcing business anytime soon and it would take not one country but a lot of small ones to
knock it off the top, according to a US expert.

*"China is pretty far behind India and even places like the Philippines and Eastern Europe. It's largely due to a language problem,"* said Robert Kennedy, author of The Services Shift, a new book on offshoring in an interview with Forbes.com.

*"There are real challenges. Services exports from China will grow, but they won't overtake India anytime soon,"* he added. Only government policy could offset the growing trend of globalisation, said Kennedy, director of the Global Initiative at the University of Michigan's Ross School of Business.

"But there are about 200 countries in the world, and about 150 of those are developing countries. If you look out over the next five years, 90 percent will be open to the global economy."

"A decade ago, if you wanted to cut costs it was an India story. We identified 30 countries that have policies in place to promote service exports. All of the parking tickets in New York City are processed in Ghana, he said. "It won't be one country that will knock India off the top. It will be a lot of small countries."

Tremendous liberalisation on the policy side is a key driver of outsourcing on a macro level, he said noting "In the mid-to-late-1980s, the global economy consisted of the US, Europe and Japan."

"Places like India and China were behind Central and Eastern Europe and parts of Africa. They weren't really engaged in the global economy. That's completely changed. Roughly 3 billion people have entered the global economy."

The digitisation of business processes is another driver, he said noting, "Perot Systems has a huge claims processing operation in India... In the past it was done by middle-income Americans, but now it's done by middle- or high-income Indians."

The low cost and high speed of computing and telecom besides a global pool of talent around the world were the other drivers.

"There is a lot of engineering talent in India and China, which leads to the last trend -- the rise of a global business culture," Kennedy said.

*"It's much easier for someone at Citibank or AIG to do business in India if they've been to the same schools and they use the same software like PeopleSoft. That has made it much easier to go abroad, as well,"* he said.


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## macintosh

Cairn to invest $3.8 bn in Rajasthan
Press Trust of India
Wednesday, February 04, 2009 (Barmer)


Cairn India will invest $3.8 billion in three blocks out of its 25 discoveries in Rajasthan, more than double the previously approved cost of $1.5 billion.

The development cost of the Mangala, Bhagyam and Aishwariya fields is proposed at $2.9 billion, against previously approved $1.5 billion.

Another $940 million would be invested in laying a heated pipeline from Barmer to the Gujarat coast, said an official of ONGC, which has a 30 per cent stake in the Rajsthan fields.

When the $1.5 billion cost was approved in 2005, the peak production was estimated at 1,25,000 barrels a day, which in the revised figure has gone up to 1,75,000 barrels per day, he said, adding there has been an increase in the cost of equipment, facility, drilling and manpower.


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## LCA

Indian annual inflation at 5.07 pct on Jan. 24 | Markets | Reuters

*Indian annual inflation at 5.07 pct on Jan. 24*
Thu Feb 5, 2009 11:28am IST

NEW DELHI, Feb 5 (Reuters) - India's wholesale price index <INWPI=ECI> rose 5.07 percent in the 12 months to Jan. 24, below the previous week's annual rise of 5.64 percent, government data showed on Thursday.

It was also below a median forecast in a Reuters poll of analysts of 5.21 percent.

The annual inflation rate was 4.78 percent during the corresponding week of the previous year.

The wholesale price index is more closely watched than the consumer price index, which is published monthly, because it covers a higher number of products and is released weekly.


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## macintosh

Forex reserves up, stands at USD 248,611 mn
Email Print 
Forex reserves increased by USD 990 million to touch USD 248,611 million as on Jan. 30, 2009, mainly due to rise in foreign currency and assets collections on a weekly basis.

As per the weekly statistical supplement of the Reserve Bank of India (RBI) released on Feb 6, 2009, foreign currency assets increased by USD 589 million to stand at USD 238,894 million. 

During the same period, the reserve position in the International Monetary Fund (IMF) increased marginally by USD 2 million at USD 830 million. The gold reserves increased by USD 399 million to stand at USD 8,884 million. 

Foreign currency assets expressed in USD include the effect of appreciation or depreciation on non-US currencies (such as Euro, Sterling and Yen) held in reserves.


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## slugger

*ADB: India shows resilience amid economic downturn*


> *India has shown resilience amid the global economic downturn, the Asian Development Bank (ADB) said on Saturday.*
> 
> * The global economies have seen a downturn, which may become even deeper, and the recovery will take longer than earlier expected, but India's economy was expected to grow at around 7 percent in 2008,* the Manila-based bank said in a press release, quoting ADB president Haruhiko Kuroda.
> 
> "Although lower than last year's 9-percent growth, *this is nonetheless an impressive growth rate and a remarkable demonstration of India's resilience*," said Kuroda, who also called for a "global solution" for the global financial crisis.
> 
> Besides immediate short-term actions to stabilize finance, longer-term planning was also needed to reform the regulatory and institutional framework for the world's financial systems, he said.
> 
> An "Asian Financial Stability Dialogue", involving finance ministries, central banks and other financial regulators, could discuss and coordinate efforts to address the financial crisis, he added.
> 
> ADB is an international development finance institution whose mission is to help its developing members to reduce poverty and improve the quality of life of their people, according to the bank's own profile. Established in 1966, ADB is owned and financed by its 67 members, of which 48 are from the region and 19 are from other parts of the globe.
> 
> Since 1986, ADB has provided more than 19. 2 billion U.S. dollars of assistance through loans, grants, and technical assistance packages



*Source*


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## slugger

*Indian vice-president visits Myanmar to enhance bilateral economic co-op*



> Indian Vice-President Shri M. Hamid Ansari is due to arrive in Nay Pyi Taw later on Thursday to begin an official visit to Myanmar.
> 
> Ansari's Myanmar trip will be a reciprocal one to that to India made by Vice-Chairman of the Myanmar State Peace and Development Council Vice Senior-General Maung Aye in April last year.
> 
> During Maung Aye's April New Delhi visit, three documents between the two governments were signed, namely *a framework agreement on the construction and operation of a multi-modal transit and transport facility on the Kaladan River connecting the Sittway Port in Myanmar with the Indian state of Mizoram*, a memorandum of understanding on intelligence exchange to combat transnational crime including terrorism, and *an agreement on avoidance of double taxation for investors from the two countries and prevention of fiscal evasion with respect to taxes on income.*
> 
> The framework agreement includes *upgrading of Sittway Port of Myanmar, improvement tasks for running of vessels along the route of Kaladan from Sittway Port to Sitpyitpyin and construction of roads from Sitpyitpyin to the border region.*
> 
> In June last year, Indian Minister of State for Commerce and Power Shri Jairam Ramesh visited Nay Pyi Taw, during which four more economic cooperation agreements were inked. They were one on *bilateral investment promotion, a 20-million-U.S. dollar credit line between the Exim Bank of India and the Myanmar Foreign Trade Bank (MFTB)* for financing the *establishment of an aluminum conductor steel reinforced wire manufacturing facility, another 64-million-dollar credit line between the two banks for financing three 230-kilovolt transmission lines in Myanmar and the one for providing banking arrangement between the MFTB, Myanmar Investment and Trade Bank and the United Bank of India.*
> 
> In October of the year, Indian Minister of State for Commerce and Power Jairam Ramesh visited Myanmar, during which the 3rd meeting of Myanmar-India Joint Trade Committee was held in Mandalay touching on issues such as *bilateral cooperation in banking services, extension of export items and promotion of trade between the two countries, upgrading of border trade carried out at Reedkhoda (India) and Tamu-Moye (Myanmar) to normal trade, and bilateral cooperation in electric and energy sectors.*
> 
> Following the meeting, India granted 18 more items of goods for trading in border area with Myanmar, bringing the total to 40.
> 
> * An India-Myanmar information technology (IT) center was then opened in Yangon. *
> 
> In November the same year, Myanmar and India held its 9th round of consultations between foreign offices of the two countries at deputy minister level, *agreeing to cooperate in a wide range of areas of mutual interest and promptly implement the bilateral agreements inked during Maung Aye's India visit.*
> 
> * Relations between Myanmar and India, which share a border of over 1,600 kilometers, have been growing during the past few years with cooperation in all sectors, particularly in those of trade and economy.*
> 
> Myanmar official statistics showed that *Myanmar-India bilateral trade reached 995 million U.S. dollars in the 2007-08 fiscal year with Myanmar's exports to India accounting for 810 million U.S. dollars and its imports from India 185 million U.S. dollars.*
> 
> India stands as Myanmar's 4th largest trading partner after Thailand, China and Singapore and also Myanmar's second largest export market after Thailand, absorbing 25 percent of its total exports.
> 
> The Myanmar compiled figures also showed that *India's contracted investment in Myanmar reached 219.57 million U.S. dollars as of October 2008. India injected 137 million dollars into the oil and gas sector in 2007.*


----------



## Destructlord

India only has $248,611 billion USD in its reserves??!!!!!! :-S How do you want to confront the global financial crisis with that guys?! After all of these sanctions Iran has $500,010 billion USD and even though Majlis blaming Pres. Ahmadinejad thats he spends too much!!!


----------



## jeypore

Destructlord said:


> India only has $248,611 billion USD in its reserves??!!!!!! :-S How do you want to pass the global economy crisis with that guys?! After all of these sanctions Iran has *$500,010 billion USD and even though Majlis blaming Pres. Ahmadinejad thats he spends too much*!!!



Mr. destructlord,

You need to re-read your figures for Iran. Total GDP of Iran is 386 billion, how could you have foreign reserve of 500 billion. Look at your figures again and come back.

Thanks.

Reactions: Like Like:
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## tyagi

Destructlord said:


> India only has $248,611 billion USD in its reserves??!!!!!! :-S How do you want to pass the global economy crisis with that guys?! After all of these sanctions Iran has $500,010 billion USD and even though Majlis blaming Pres. Ahmadinejad thats he spends too much!!!



iran has 81 billion us $ in foreign exchange reserves.


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## macintosh

Destructlord said:


> India only has $248,611 billion USD in its reserves??!!!!!! :-S How do you want to pass the global economy crisis with that guys?! After all of these sanctions Iran has $500,010 billion USD and even though Majlis blaming Pres. Ahmadinejad thats he spends too much!!!



India has 248.611 billion USD and Iran has 80 billion USD.


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## slugger

*Forex reserves rise $990 m*



> Foreign exchange reserves rose [_by_] $990 million during the week ended January 30, largely on account of revaluation of gold in reserves and non-dollar currencies vis-a-vis the dollar.
> 
> According to the latest figures released by the Reserve Bank of India, total foreign exchange reserves, including gold and SDR, rose $990 million to touch $248.6 billion. While foreign currency assets rose $589 million, the value of gold in reserves rose $399 million during the week. *Reserve with the International Monetary Fund rose $2 million.*
> 
> Major international currencies such as the euro and the pound have been weakening against the dollar, which in turn, is impacting the valuation of foreign exchange reserves, expressed in dollar.


----------



## slugger

*India set to beat China in growth rate*



> All it the brighter side of the current downturn. *India may pip* export-dependent *China in the last quarter of FY09 and emerge as the fastest growing nation among all large economies.*
> 
> As China&#8217;s GDP growth rate dropped to 6.8% during the October-December quarter and is expected to go down further, the *Indian government has become hyper-active to achieve at least a 6.5% growth in Q4* to register a win over China.
> 
> If India achieves a better growth rate than China even for one quarter, the message will go across to the world and help India in wooing foreign capital, waiting to chase growth stories. Already, government officials in India have been highlighting reports of a few investment analysts who doubted China&#8217;s official GDP numbers and claimed that it could just be in the positive territory in the last quarter.
> 
> A secretary in the government of India confirmed to SundayET that *India has a brighter chance of overtaking China in the last quarter of FY09, or Q1 in case of China which follows the calendar year. *
> 
> &#8220;China is heavily dependent on exports and the way things are unfolding China&#8217;s GDP for January-March quarter would be quite low. We have so far achieved 7.9% and 7.6% growth in the first two quarters, according to the provisional numbers. Though our Q3 number, to be announced by month end, is expected to be less than the comparable number in China (6.8% in Oct-Dec, 08), *the softening of interest rates will stimulate demand and ensure a faster growth rate than China in Q4,&#8221;* he said.
> 
> Though the Chinese economy grew at 9% during 2008, down from the revised 13% growth rate in 2007, the last quarter number (6.8%) has made the Indian authorities hopeful that India might be able to pip China in GDP growth. As China&#8217;s export constitutes 37% of its economy against 13% in the case of India, the recession in the developed world will make China suffer the most.
> 
> PM&#8217;s economic advisory council (EAC) member Satish C Jha said he won&#8217;t be surprised if India grew faster than China. &#8220;The situation in China is worse than us. Exports are drastically coming down and China is hit hard. Our economy is driven more by domestic demand and *our rural economy is much more resilient than that of China. If our stimulus packages are implemented properly, I won&#8217;t be surprised if India pips China in GDP growth,*&#8221; Mr Jha said.



*Source....*


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## Dilli

*Warner Bros to outsource jobs to India *

In a move that could ruffle a few feathers in the Barack Obama administration, American entertainment giant Warner Bros has said it will be outsourcing jobs to India.

It is believed that about *200 positions are to be outsourced to India *and Poland by Warner Bros, which will slash as many as ten per cent of its 8,000-strong workforce in the coming days.

"While no final decision have been made internationally, the company expects the layoffs, elimination of open positions and outsourcing to affect nearly 800 positions worldwide, or approximately ten per cent of its 8,000 employees," a Warner Bros official told PTI in an e-mailed statement.

About 200 open positions and 300 outsourced jobs would be affected as part of the reduction, while another 300 employees would be laid off, the official said, adding that jobs would be outsourced to India.

While the spokesperson declined to comment on exact number of jobs being moved to India, the sources said that about 300 positions are being outsourced, out of which about 200 would go to India and Poland.

Open positions are referred to those, which are currently vacant, and for which, the company was hiring. 

In January, Warner Bros' Chairman and Chief Executive Barry Meyer along with president and chief operating officer Alan Horn had said the company would be reducing its staff strength.

"We have examined every aspect of our business in order to cut costs responsibly and to keep staff reductions to a minimum. 

One way to achieve these objectives is to outsource certain job functions to a third-party company," Meyer and Horn wrote in an e-mail to employees on January 20.

It noted that even though the decision to cut the workforce was "very difficult" to make, the move reflects changes necessary for stability and growth going forward. 

"We are very sad to announce that based on the global economic situation and current business forecasts, the studio will have to make staff reductions in the coming weeks in order to control costs," the e-mail said.

Meyers and Horn wrote in the e-mail that the changing entertainment business landscape, shifting consumer demand and the overall state of the economy have affected companies around the world, and "Warner Bros is not immune to these factors". 

Warner Bros to outsource jobs to India


----------



## Destructlord

jeypore said:


> Mr. destructlord,
> 
> You need to re-read your figures for Iran. Total GDP of Iran is 386 billion, how could you have foreign reserve of 500 billion. Look at your figures again and come back.
> 
> Thanks.



I was talking about national reserve not foreign reserve my friend! and last time i checked Iranian National Reserve it was around $500.010 billion USD!  Or at least thats what they say! 

And however thats still not much! Iran population is around 68 million but India population is more than 1 billion!!


----------



## tyagi

Destructlord said:


> I was talking about national reserve not foreign reserve my friend! and last time i checked Iranian National Reserve it was around $500.010 billion USD!  Or at least thats what they say!
> 
> And however thats still not much! Iran population is around 68 million but India population is more than 1 billion!!



dude can you plz explain what are National Reserve.


----------



## Destructlord

tyagi said:


> dude can you plz explain what are National Reserve.



I dont know what you guys call it in India! But we call it National Treasury Reserves!


----------



## slugger

*France looks to double trade with India*



> France and India have many opportunities for economic co-operation and there is a scope to double the trade between the two countries
> in the near future. This was expressed by Anne-Marie Idrac, French minister for foreign trade, who was in the city to visit the manufacturing facilities at Bharat Forge Limited.
> 
> Idrac told the media on the sidelines of her visit that India and France can work together in areas such as energy, infrastructure, technology and services such as hospitality, healthcare and personal care.
> 
> "About 3 per cent of France's external trade is with India, while India's trade with France is 20 per cent of its world trade. So we see good scope for stronger economic ties," Idrac noted. According to her, against the background of the India-US civil nuclear energy deal, newer avenues will open for India to benefit from France's strength in power generation and equipment. India's energy needs are huge and French companies can extend their capabilities to India for a strong growth in the energy and infrastructure, she added.
> 
> French power equipment major Alstom has a sizeable presence in India and has also recently signed an agreement with Bharat Forge to set up a joint venture for manufacturing super critical turbine island power plant equipment. Bharat Forge has recently signed a joint venture agreement with another French industry major Areva for manufacturing heavy forgings and components required for nuclear reactors.
> 
> Allaying concerns over media reports that troubled companies in France will not be comfortable selling their businesses to Indian owners, Idrac said France has put in place many investor-friendly policies, including taxation incentives and a flexible legal framework, especially in respect of labour legislation. "The French Agency for International Investment is very active in canvassing investments from Indian industries in our country," she added.


----------



## LCA

India FY09 GDP estimate at 7.1%

*India FY09 GDP estimate at 7.1%*

February 09, 2009 12:39 IST

Given the impact of the global financial meltdown, the government today projected Indian economic growth to slow down to 7.1 per cent in the current fiscal against 9 per cent in 2007-08.

Even though economic growth is slowing down, it is on expected lines and the rate projected has been as predicted by the Prime Minister's Economic Advisory Panel.

While manufacturing, agriculture, power, construction and financial services are likely to pull down growth, services including trade and hotels as well as mining are projected to give a push to the economy.

Agriculture is set to grow by 2.6 per cent in 2008-09 against 4.9 per cent in the previous fiscal, manufacturing is likely to expand by 4.1 per cent against 8.2 per cent, and construction by 6.5 per cent against 10.1 per cent.

Financial, insurance, real estate and business services are set to grow by 8.6 per cent against 11.7 per cent.

On the other hand, the category of trade, hotels, transport and communication is projected to grow by 10.3 per cent against 12.4 per cent and community, social and personal services by 9.3 per cent against 6.8 per cent.

These are advance estimates by the Central Statistical Organisation (CSO) and actual growth figures may not exactly be the same.


----------



## keeninterest

Destructlord said:


> I dont know what you guys call it in India! But we call it National Treasury Reserves!



interesting to know that, please give a little brief on this NTR, so that a better understanding can be developed.

thanks.


----------



## Destructlord

keeninterest said:


> interesting to know that, please give a little brief on this NTR, so that a better understanding can be developed.
> 
> thanks.



Sure Look mate we are under the sanctions for over 30 years, Thats help us to avoid the sanctions a little bit, Recently oil got very cheaper, The treasury help us to continue the development even by selling $42 oil. 

Regards


----------



## keeninterest

Destructlord said:


> Sure Look mate we are under the sanctions for over 30 years, Thats help us to avoid the sanctions a little bit, Recently oil got very cheaper, The treasury help us to continue the development even by selling $42 oil.
> 
> Regards



thanks for the reply, but what i was looking at was how dose this amount get collected, and what are the components of ntr.

thanks and regards.


----------



## Destructlord

They collect some amount of money every year!
$500.010 billion been collected during the 4 year! Sometimes when we need finance for construction and infrastructure, We take it from the treasury!  However we also have the National budget approved by Majlis from the export income and revenues.


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## ejaz007

*India plans extra borrowing of $9.45bn in 08/09*

NEW DELHI: India will borrow an extra $9.45 billion by late March from the market, an official said on Tuesday, sending bond yields higher and raising concerns about the state of public finances. The extra borrowings are largely aimed at supporting the economy, which is expected to expand at its slowest pace in six years in 2008/09 as the global economic crisis takes a toll. We had discussions with the Reserve Bank of India. The borrowing will be between Feb 20 and March 20 to the order of 46,000 crore (460 billion rupees), Economic Affairs Secretary Ashok Chawla told reporters. He said the extra borrowing would be done in four tranches. Indias fiscal year ends on March 31. The governments finances have deteriorated in 2008/09 due to increase in salaries of government employees, large subsidies on oil and fertilisers and waivers on loans for small farmers, prompting the government to borrow more from the market. A slowing economy has meant that the government receipts have remained sluggish while it had to forego a substantial amount in duty which were aimed at boosting demand. The central bank said it would conduct the market borrowings in a non-disruptive manner. Fitch Ratings affirmed Indias ratings on Monday but kept its negative outlook on the local currency rating, saying public finances will deteriorate due to a weakening economy and government stimulus measures. Fitch forecast Indias general government deficit will reach 9.5 percent of gross domestic product in 2008/09, up from 6.1 percent in the previous year. The agency includes oil and fertiliser bonds in its estimates. This is sharply higher than a central bank projection of around 7 percent of GDP and an estimate of 8 percent of GDP by an economic advisory council to the prime minister. reuters

Daily Times - Leading News Resource of Pakistan


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## Nihat

*Economy already showing signs of recovery: Kamath*





After a week of suffering very dismal news in Davos where the World Economic Forum (WEF) ,et, one came back with the sense that there was little hope that 2009 will bring any positive news to the global economy because of which India will continue to suffer.

However, that one voice that is always more optimist than those of others is that of KV Kamath, President of CII and MD and CEO of ICICI Bank. He believes that there are signs of a recovery already. India is not hurt as much as most of the economies around the world are, Kamath says.

Kamath says that the growth consensus is between 6 per cent and 7 per cent7.5per cent for a year ahead and believes that 7.5 per cent number is also doable.

Kamath is of the view that the impact of global factors on India will not be very significant. According to him, India is not in need of a fiscal stimulus package but textiles, export industries, particularly in the small and medium enterprise (SME) sector, are in need of a helping hand urgently.

"To me, that is more than a fiscal stimulus, it would be direct injection of support in whatever form, a subsidy or otherwise."

Here is a verbatim transcript of the exclusive interview with KV Kamath on CNBC-TV18. Also watch the accompanying video.

_CNBC TV18: I think that will be the one biggest statement anyone has heard this month that is you actually believe that there are signs of a soft landing for India or a recovery for India already in sight._

KV Kamath: Indeed; if you look at what others said: consensus is between growth of maybe 6% to 7%7.5% for looking a year ahead. I believe that 7.5% number is doable. So India is not hurt as much as most of the economies around the world are.

How do I say that we will be at the upper end of this number? I think it is based on a dipstick survey amongst the CII CEOs. This was at the last National Council Meeting when we had about 45 out of 50 CEOs present. These same CEOs in November had no confidence at all that we would be up and doing things that we are doing today.

Same was the story in October whereas the same set of CEOs in July was extremely bullish. I am not saying that their confidence level just now is what it was in July but it certainly is quite different from what it was in November and I can explain this in more details as we go ahead.

_CNBC TV18: You are saying 7.5% based on the positive comments that you are getting from CII manufacturers but the same industry leaders when we speak to them are asking for fiscal stimulus packages.

They are saying that earnings will continue to deteriorate, so on what basis do you believe that we are actually going to see a turnaround happened in the next two-three months?_

KV Kamath: The steel industry was seeing no pick-up of stocks from the yard at all during most part of the last quarter. Today, that industry is back to full capacity production.

I am taking that as one basic mother industry, which actually feeds other industries. The same is the story with cement, you then go on to motorcycles  back at almost full capacity; you go to commercial vehicles, which is hurting badly; cars somewhere in between, so you have a sketchy sort of situation.

Let us see what sectors are doing well. Rural India continues to do well and that is 45% of the economy; you then have FMCG still doing well growing at 15-20% not 20-25%; knowledge areas i.e. services sector not growing at 20-25% again growing at 15-20%.

So the areas which are truly hurting now could be commercial vehicles, textiles, auto ancillaries and some areas of downstream oil where adjustment process is going on.

So if you take weight of all these things that I have talked about, you probably see about 75-80% of India back on track. Nothing stops us from doing the infrastructure investment that we need to do  that will happen; inflationary numbers are now looked at as probably 0% to 2%; interest rates probably set to fall another 1-2%.

To me that is hugely positive along with opportunity in infrastructure and the fact that most of these sectors that I have talked about are coming back to normal except for maybe 20% and that is where I say you do a weighting of all these things and you are looking at numbers back to 7-7.5%.

I will possibly then try to pitch too my past record  I have had in this is always being more optimistic than the others and probably being right over the last 10 years or so.

_CNBC TV18: So you are saying that this the last quarter of pain  this January to March quarter  and that starting the next quarter in the beginning of the next fiscal earnings will start bouncing back?_

KV Kamath: Yes. If you look at corporate India, they have had quarter-on-quarter (QoQ) growth of more than 20% for almost 18 quarters and this is the first quarter where we are all probably looking at a 15% deceleration in that growth  and that was a quarter when oil corrected by 66%, most of the commodities corrected by 66%.

Every company which was right in it got all their raw materials, all their work in process and finished good re-priced. So to me probably the worst hit was the quarter ending December, maybe some more hit in this quarter and then we should be back into a clearer territory with inflation down to near 0%, all output prices redone as it were because of input cost going down and interest rates coming down.

_CNBC TV18: Do you believe that this is irrespective of what happens in the global economy because I know that the prognosis for the global economy in 2009? I am sure you have heard that as well while you were in Davos, was incredibly dismal. Everyone believed that 2009 would be if not as difficult an even more difficult year than 2008?_

KV Kamath: I entirely agree with you on that part. The global scenario as seen through the lens of global entrepreneurs, global bankers or global thought leaders is really dismal. How much would it impact us? Yes, it will impact us to the extent we export but to the extent we import, we are going to get things much cheaper than we did. So it will have an impact but that impact I am factoring into that 20% which is of our growth which is impacted, the rest 80% should do well.


Economy already showing signs of recovery: Kamath

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## Nihat

*India not moving in sync with US encouraging: JP Morgan*


The US government financial stability plan failed to cheer markets there with indices seeing 4% cuts. The plan consists of four main components. It envisages setting up of a public-private fund to mop up to USD 500 billion of spoiled bank assets. It will also set up a consumer-lending facility to support up to USD 1 trillion in new lending. The plan will devote up to USD 50 billion to help stem home foreclosures and provide new funding to banks after a stress test to determine if the bank is healthy.



Commenting on this development, Adrian Mowat, Chief Asian and Emerging Equity Strategist, JP Morgan, feels the market sell-off makes sense as it expected more clarity from the US bailout plan. "Hedge funds are shorting markets on disappointment from the bailout plan."



Mowat expects Asia to be impacted by the capital market correlation, not economic slowdown.* India, he said, is charting its own course away from US, which is an encouraging trend. *


India not moving in sync with US encouraging: JP Morgan

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## slugger

*Asia to play a major role in global revival: Montek Singh Ahluwalia*



> The next 20 years will be very different from the last 20 with regard to the global geo-economic scenario and the world&#8217;s financial system. Planning Commission Deputy Chairman, Dr Montek Singh Ahluwalia said this at the launch of the book &#8216;India&#8217;s Strategic Interests in Southeast Asia and Singapore&#8217; by Ambassador See Chak Mun in New Delhi , today.
> 
> The event was jointly organized by the Confederation of Indian Industry (CII) and Aspen Institute India and Institute of South Asian Studies (iSAS).
> 
> Pointing out that the book has come at a very significant time when the world is going through a financial crisis and Asia is likely to play a major part in the global revival, Dr Ahluwalia said, *&#8220;Global crisis is likely to strengthen ties between Asian nations.&#8221;*
> 
> He said that there is &#8220;going to be a restructuring of global financial system which was till the crisis operating from New York and Washington.&#8221; The global crisis, he added, has proved that the highly sophisticated global financial system too could fail. &#8220;There is going to be much greater decentralization of financial and economic resources in the world and more financial systems will come up in future,&#8221; Dr Ahluwalia said. *&#8220;There will be intensification of intra-regional flows and as Asian nations &#8211; China, India and East Asia as a bloc &#8211; will play a major role in the revival of global financial system, integration between these nations will increase*,&#8221; he observed.
> 
> Earlier, Ambassador See Chak Mun, Senior Fellow at iSAS, introduced his book to the gathering by saying that &#8220;four-and-a-half-years in India as High Commissioner fuelled my interest in India and inspired me to write the book.&#8221; He spoke in detail about the evolving interaction between India and Southeast Asia over the last six decades and said that following former Prime Minister Narasimha Rao&#8217;s Look East policy, India&#8217;s interests in the region have increased. &#8220;This is a good development,&#8221; he said.
> 
> The thought was echoed by Prof. Tommy Koh, Ambassador-at-large, Ministry of Foreign Affairs, Singapore. He agreed with Ambassador Chak Mun and said that *&#8220;re-emergence of India is a good thing and welcomed by us as India has a non-threatening presence.&#8221;* He quoted his Prime Minister saying, *&#8220;India should consider Singapore as its last outpost.&#8221;*
> 
> Mr N K Singh, Member of Parliament, Rajya Sabha, said that &#8220;Asian nations should play an important and catalytic role in global revival.&#8221; He pointed out that *Asian nations like China, Japan and India have huge foreign exchange reserves and thus &#8220;they should lead the charge in changing from export-led strategy to consumption-led strategy.&#8221;* This, according to him, would be a major step towards bringing about a revival in global financial system.
> 
> The session was moderated by Mr Tarun Das, Chief Mentor, CII, who welcomed the distinguished guests and introduced them to the audience.


----------



## macintosh

South Asia to expand regional trade by 25&#37; to stem global eco woes 

New Delhi, Feb 11: South Asian countries on Wednesday agreed to expand free trade within the region by 25 per cent in the next one year to make up for declining demand in the west for the merchandise produced in the Saarc economies. 

"We have adopted a report. We are basically looking at enhancing trade further. Sensitive list would be decreased by about 25 per cent, within another 12-months so that the trade is increased," Commerce Secretaries G K Pillai said after the two-day meeting of the commerce secretaries of the South Asian Association for Regional Cooperation (Saarc) here. 

Pillai, who presided over the meeting of the Committee on Economic Cooperation, said the members have agreed to prune the sensitive list by 25 per cent so that more goods produced in the region are traded within Saarc. 

While the eight countries have operationalised Safta, they maintain barriers on items listed in the sensitive lists, thus blocking the potential for increasing trade in the USD 26-billion intra-Saarc region. 

India's trade within South Asia was USD 11.72 billion in 2007-08. It was USD 5.91 billion in the first six months of the current fiscal.


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## Nihat

*Inflation at 4.39% vs 5.07%; experts see it at 0-3% soon*



Inflation for week-ended January 31 has come in at 4.39% versus 5.07% week-on-week (WoW). Earlier, a poll conducted by CNBC-TV18 saw inflation at 4.30%.

The inflation number made headlines last year after it hit double digits. Post August though, the number has been steadily declining. 

The WPI numbers for all commodities are down 0.7% at 228.4 (WoW) except for the fuel products group, which is down 3.1% (WoW). 


Also, inflation for the week-ended December 5 has been revised to 6.56% versus 6.84% (provisional).


In an interview with CNBC-TV18 earlier , Davesh Kumar of Centrum Broking had said that he sees inflation between 0% and 3% by June, and interest rates in single-digits by October next year. "In case this materializes, then we will find that the last two quarters of FY10 will be good for corporates and the mood will be different."


In another interview, KV Kamath, President of CII and MD and CEO of ICICI Bank said that 75-80% of India back on track as inflationary numbers are now looked at as probably falling to 0% to 2%. "Iinterest rates will also fall another 1-2%."

http://www.moneycontrol.com/india/n...-439-vs-507-experts-see-it-at-0-3-soon/385112


----------



## slugger

*GM says no job cuts in India: report*



> *US carmaker General Motors said Thursday it would not sack any of its 4,000 Indian employees* as part of its restructuring plan submitted to the US government in exchange for a huge loan, a report said.
> 
> "We don't have any plan to lay off employees in India," GM India President and Managing Director Karl Slym told reporters in western Maharashtra state, the Press Trust of India (PTI) news agency said.
> 
> Slym's statement came two days after GM said it would cut 10,000 white-collar jobs worldwide in 2009 in a bid to reduce its global salaried workforce to about 63,000.
> 
> GM, along with Ford Motors and Chrysler, has been battered by falling auto sales amid a deepening US recession.
> 
> The cash-strapped company has received 9.4 billion dollars from the US Treasury to avert collapse, including 5.4 billion dollars on January 21.
> 
> Under the bailout agreement with the government, GM must submit a preliminary viability plan to the US Treasury by February 17. The final plan is due March 31.
> 
> GM's two manufacturing plants in India are in Halol in western Gujarat state and in Talegaon in Maharashtra.



*Related - GM Trimming 10,000 Jobs, Reducing Pay as Much as 10% (Update5)*


----------



## slugger

*Indian Sugar Prices May Rally, Helping Mills Return to Profit*



> (Bloomberg) -- Sugar prices in India, the world&#8217;s second-biggest producer, may extend gains because of a supply deficit, likely helping Bajaj Hindusthan Ltd. and its rivals return to profit, Fitch Ratings said.
> 
> Production in the South Asian nation may drop to between 17 million tons and 18 million tons in the year to Sept. 30 from 26.3 million tons a year earlier, just short of meeting domestic demand, the rating agency said in a report e-mailed today.
> 
> &#8220;A tight demand and supply situation would result in an uptrend in sugar prices,&#8221; analysts Ashwini Picardo and Rakesh Valecha said in the report. Prices gained 43 percent to 20 rupees (41 cents) per kilogram in the first week of January from a year earlier amid forecasts of a lower output, Fitch said.
> 
> Raw sugar traded in New York is up 14 percent this year on forecasts for a deficit in India. Global production may be 4.55 million tons less than demand as the South Asian country becomes a net importer, Jonathan Drake, head of Cargill Inc.&#8217;s sugar business, forecast this week.
> 
> &#8220;On the back of rise in sugar prices, the agency expects the profitability of sugar companies to improve from the previous year when most companies posted losses,&#8221; Fitch said. Still, the improvement in earnings may be capped by higher sugar cane costs, interest and depreciation.
> 
> Shares of Bajaj Hindusthan, the nation&#8217;s biggest producer, advanced as much as 1.1 percent to 53 rupees in Mumbai trading, extending last week&#8217;s 8 percent gain. Balrampur Chini Mills Ltd., the second-biggest, rose as much as 2.2 percent to 59.7 rupees, while Shree Renuka Sugars Ltd. lost as much as 2.4 percent to 83 rupees. The stock rose 9 percent yesterday.


----------



## slugger

*Infosys among best firms for leaders: Survey*



> Software services firm Infosys Technologies has emerged as the only entity from India to secure a place in the list of top 20 global companies focused on grooming not just professionals but leaders.
> 
> The 2008 Best Companies for Leaders survey conducted by management consultancy Hay Group and Chief Executive Magazine has ranked the country's second largest software firm at the 14th place.
> 
> According to the survey, these are the companies that are focused on developing leaders who would not only survive and thrive in the current financial crisis but would be well positioned for growth once the economy improves.
> 
> The list is topped by 3M Company, followed by Procter & Gamble and General Electric on the second and the third position, respectively.
> 
> The other companies on the list include Coca-Cola (fourth), followed by HSBC Holdings, ABB, Southwest Airlines, IBM, Hewlett-Packard, PepsiCo, Nokia, Accenture, FedEx, McDonald's Corporation, Caterpillar, American Express, Cisco Systems, Oracle, Intel Corporation in the same order.
> 
> In ideal times, people value authoritative and democratic styles of leadership in comparison to the other styles like coercive, affiliating, pacesetting and coaching.


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## slugger

*L&T to recruit 10,000 in 3 yrs; to invest 4,500cr in Hazira*



> *Engineering and construction major Larsen & Toubro (L&T) would recruit nearly 10,000 people over the next three years* for executing its various projects, company sources said today.
> 
> The recruitment also assumes significance as *the company plans to invest Rs 4,500 crore in Hazira, where it has heavy an engineering manufacturing unit and is likely to absorb around 5,000 people there,* sources said.
> 
> Apart from this, the new workforce would also be deployed for projects like mono rail, power reactors and turbines, they added.
> 
> The $7-billion group expects to generate project export revenue of over Rs 2,000 crore in five years, the sources said.
> 
> *L&T is also ready to undertake execution of nuclear power projects on turnkey basis, they said, adding that the sites of two (of the four) 700 Mw plants have been selected.*
> 
> L&T Chairman A M Naik had earlier announced making Vadodara a hub of power, hydrocarbon and engineering activities of the company, a diversified entity whose operations range from ship building to software.


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## Nihat

*Software major Sapient has laid off 500 employees *


New Delhi: Software major Sapient has laid off 500 employees at offices in Bangalore, Noida and Gurgaon.

Sapient PR confirmed to CNN-IBN that employees have been laid off from Sapient's offices in Bangalore, Noida and Gurgaon.

No notice was given to the laid off employees.

Armed guards were deployed around the office on Friday and Saturday and employees were not allowed to enter the premises in Gurgaon.

A few months back the US-based IT company had laid off 160 employees. Sapient employs about 6,000 people in India.

Sources say Sapient India Managing Director Sandeep Dhar had sent an e-mail to employees a few months ago after 160 employees were laid off.

In the e-mail, Dhar had admitted that decision to lay-off employees was taken so that the company could respond better to current and future market opportunities.

Software giant Sapient lays off 500 employees in India


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## Nihat

*Infosys mentor to be Sri Lanka President's IT advisor*


New Delhi: Another feather in Infosys mentor Narayana Murthy's cap. Sri Lankan President Mahinda Rajapaksa has appointed Murthy as his international advisor on IT.

Rajapaksa made the appointment after inviting Murthy as the chief guest to the launch of '2009-Year of English and Information Technology in Colombo on Friday.

This is seen as a major initiative of the Sri Lankan government to meet the demands of the 21st century in skills and capacities.

Infosys is a global consulting and IT services company Murthy stepped down as Infosys CEO but continues as its chief mentor.

He has received numerous prestigious awards and honours, including the Padma Vibhushan, the second highest civilian award of the Indian government.

Speaking at the event, Rajapaksa said Sri Lanka was "greatly inspired by the dramatic success of India" in the field of IT in recent years


Infosys mentor to be Sri Lanka President's IT advisor


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## nitesh

India's 1st rural BPO set to hire 500 more youth-India-The Times of India

India's 1st rural BPO set to hire 500 more youth
16 Feb 2009, 0358 hrs IST, Radha Venkatesan, TNN


HOSUR: He was selling puppies till a year ago in the backward Krishnagiri district of Tamil Nadu. *But when India&#8217;s first rural BPO*, Fostera, set up shop on a narrow lane at Sanasandiram village in his district, R Muraliraj turned into a confident 'call centre guy.'

"I am a higher secondary graduate but could not speak English at all when I came here," he smiles, putting on his headphones to talk to ICICI customers in Guntur in Andhra Pradesh in fluent English.

It may be the hour of recession and lay-offs, but the government-run BPO is on a hiring spree. Multi-national telecom and banking companies are knocking on the doors of Fostera at Sanasandiram to outsource their help desk, loan collection, credit card processing, form-filling, insurance and editing work.

*Over the next three months, Fostera (short for fostering rural technology), floated by the Krishnagiri district administration over a year ago, will hire about 500 young people from Tamil Nadu's hinterlands for monthly salaries ranging from Rs 5,000 to Rs 8,000.* The BPO, which was working just one shift, is switching to three shifts a day to manage the tide of offers, says Fostera CEO MR Ashok Kumar.

Daughters and sons of agricultural and construction labourers, who have barely passed high school, will soon put on headphones and work the helplines for bank and insurance customers in English, Tamil, Telugu and Kannada. About 300 young people have already been put through voice and non-voice training. "We look for youth with the right attitude and high energy levels. Communication skills can be instilled, but attitude cannot be taught," he says.

*Fostera, which is presently a 25-seater facility, will soon start two more call centres in Uthangarai taluk in Krishnagiri district, each with a capacity of 75.* In Uthangarai taluk, which has high unemployment and illiteracy rates, marriage halls are being converted into BPOs, providing jobs for those above 18 who have finished school.

When IT major Microsoft recently undertook a pilot project on online electoral roll registration in Tamil Nadu, it chose to use Fostera's BPO employees. "Though from a rural background, their hunger for learning is amazing. They grasped the data entry applications within 10 to 15 minutes," says Govind Kanshi, architect advisor of Microsoft India.


----------



## Omar1984

Indias Rupee Little Changed Before Government Presents Budget 

By Anil Varma

Feb. 16 (Bloomberg) -- Indias rupee was little changed before the government presents its budget for the first four months of the year starting April 1. 

The currency may gain on speculation the government will announce more measures to counter the slump in industrial production and exports. The Reserve Bank of India may cut interest rates further after the budget, according to Suresh Tendulkar, chairman of the prime ministers Economic Advisory Council. The government unveiled two stimulus packages and the central bank cut its key rate four times since Oct. 20. 

The rupee is in a narrow range as the market awaits the budget, said Roy Paul, assistant manager of treasury at Federal Bank Ltd. in Mumbai. Some positive policy announcements are expected. 

The rupee traded at 48.67 per dollar as of 9:43 a.m. in Mumbai, compared with 48.685 on Feb. 13, according to data compiled by Bloomberg. The median estimate of 25 strategists and economists surveyed by Bloomberg is for the rupee to weaken to 49 by the end of March. 

Offshore contracts indicate traders bet the rupee will trade at 48.82 to the dollar in a month, compared with expectations of 48.83 on Feb. 13. Forwards are agreements in which assets are bought and sold at current prices for future delivery. Non-deliverable contracts are settled in dollars rather than the local currency. 

To contact the reporters on this story: Anil Varma in Mumbai at avarma3@bloomberg.net.

Bloomberg.com: India & Pakistan


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## Nihat

*Indias Growth and Key Economic Indicators*

Pranab Mukherjee, in his speech today, highlighted the performance of various economic indicators during the UPA regime. Here are the highlights:

- Indias economy grew at 9 per cent for three straight years. Even today, after the global financial crisis, India continues to grow at 7.1 per cent, making it the second fastest growing economy in the world

- The countrys per capital income grew at 7.4 per annum for four years

- The gross domestic savings rate stood at 37.7 per cent during 2007-08

- The investment as a percentage of GDP rose to 39 per cent in 2007-08

- The tax to GDP ratio stood at 12.5 per cent in 2007-08

- Revenue deficit as percentage of GDP fell to 1.1 per cent under the UPA regime.

- The fiscal deficit stood at 2.7 per cent in 2007-08 as compared to 4.5 per cent in FY04.

- Farm growth stood at 3.7 per cent in the last four years

- Foreign trade was at 35.5 per cent of GDP during 2007-08

- Capital inflows stood at 9 per cent of GDP during 2007-08


Indias Growth and Key Economic Indicators

Reactions: Like Like:
1


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## Nihat

Link to Pranab Mukherjee's entire Budget or Vote on Account Speech.



Government of India : Union Budget and Economic Survey (http://indiabudget.nic.in)


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## Omar1984

Indian Stocks Drop Most in Two Weeks, Led by Reliance, ICICI 


By Pooja Thakur

Feb. 16 (Bloomberg) -- Indian stocks fell, with the Sensitive Index dropping the most in two weeks, as the government failed to announce incentives to boost economic growth in its budget presentation today. 

Reliance Industries Ltd. dropped 5.2 percent and ICICI Bank Ltd. declined 5.9 percent, leading the largest companies lower. DLF Ltd., Indias largest developer, fell 2.4 percent after the government didnt propose new measures to revive housing demand. 

The government was expected to provide some sops for boosting the economy, especially in housing, said Jayesh Shroff, who helps manage $1.9 billion in equities at SBI Asset Management Co. in Mumbai. The budget didnt have any such announcements. 

The Bombay Stock Exchanges Sensitive Index, or Sensex, fell 329.29, or 3.4 percent, to 9,305.45, the biggest decline since Feb. 2. The S&P CNX Nifty Index on the National Stock Exchange dropped 3.4 percent to 2,848.50. The BSE 200 Index declined 3.3 percent to 1,095.87. S&P CNX Nifty futures for February delivery fell 4 percent to 2,828. 

Reliance, the nations most valuable company, fell 5.2 percent, the most since Jan. 21, to 1,320.20 rupees. ICICI, Indias second-biggest lender, declined 5.9 percent to 409 rupees. DLF slid 2.4 percent to 156.65 rupees. Indiabulls Real Estate Ltd. fell 9.4 percent to 98.85 rupees. Unitech Ltd. dropped 5 percent to 30.2 rupees. 

The government may spend as much as 800 billion rupees ($16.5 billion) to help build homes for urban poor, which may also help boost a slowing economy, Indian Express reported yesterday, without saying where it obtained the information. 

The real estate industry expected some tax concession for home buyers and the developers, said Ravi Ramu, head of finance at Indian developer Puravankara Projects Ltd. The interim budget proposal has been a damp squib. 

Lenders Decline 

State Bank of India led lenders lower after the central bank said loans declined in the two weeks ended Jan. 30. State Bank, the nations largest, retreated 4.9 percent to 1,136.85 rupees. HDFC Bank Ltd., the No. 3 lender, declined 3.2 percent to 913.95 rupees. 

Indian banks loans fell by 88.2 billion rupees ($1.8 billion) in the two weeks ended Jan. 30, reducing outstanding advances to 26.4 trillion rupees, according to central bank data. Loans to industry and consumers declined by 46.5 billion rupees during the period, while food credit dropped 41.8 billion rupees, the Reserve Bank of India said in an e-mailed statement after the close of markets on Feb. 13. 

Overseas investors bought a net 200 million rupees ($4.1 million) of Indian stocks on Feb. 13, according to the nations market regulator. 

The following were among the most active shares traded on the Bombay and National stock exchanges. Stock symbols are in parentheses after company names: 

Reliance Infrastructure Ltd. (RELI IN) dropped 6.4 percent to 533.25 rupees. Indias third-largest utility said its founder group pledged a 16.35 percent stake. AAA Project Ventures Pvt. pledged 37.2 million shares of the 83.5 million shares it holds in the company, Reliance said in a statement today. 

Satyam Computer Services Ltd. (SCS IN) added 6.9 percent to 49.55 rupees. The companys interim board plans to issue fresh shares to potential buyers to boost its cash, the Daily News & Analysis reported Feb. 14, without saying where it got the information. The board at Satyam has almost completed plans for the sale of 680 million shares that may double the companys equity from 1.35 billion rupees ($28 million), it said. 

Separately, Indias stock market regulator said it will amend takeover rules for companies where the government replaces the board as part of a rescue plan. 

Suzlon Energy Ltd. (SUEL IN) slid 4.5 percent to 44.75 rupees. The founders of Indias biggest maker of wind-turbine generators pledged 25.9 percent of the companys shares to raise about 8 billion rupees. The founders pledged 387.2 million shares, the company said in a statement to the National Stock Exchange on Feb. 13. 

Temptation Foods Ltd. (TFD IN) dropped by its 20 percent limit to 67.05 rupees, its biggest drop since November 1998. The Indian processor of fruits and vegetables fell to the lowest in almost two years after the market regulator ordered Managing Director Vinit Kumar not to comment on dealing in shares of rival Kohinoor Foods Ltd. (KFL IN). 

Kohinoor Foods fell by its 20 percent limit to 68.20 rupees, the most since October 1998. 

To contact the reporters on this story: Pooja Thakur in Mumbai at pthakur@bloomberg.net 

Last Updated: February 16, 2009 06:42 EST

Bloomberg.com: India & Pakistan


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## Omar1984

Global meltdown has hit IT sector hiring in India: Nilekani


16 Feb 2009

BANGALORE: Infosys Technologies vice-chairman Nandan M. Nilekani Monday admitted that the global economic meltdown has affected hiring in India's IT 
industry. 

"The IT sector is not seeing job buoyancy now compared to earlier years due to global economic slowdown," Nilekani said at a function in the Institute for Social and Economic Change (ISEC) in this tech hub. 

Delivering a lecture on 'India at the Crossroads: the Choices Before us', Nilekani said the IT industry was facing unprecedented crisis and it was difficult to predict how long the economic downturn would continue. 

"The recruitment was well-placed earlier when the growth rate was 30 percent in the IT sector. The crisis in the financial sector has automatically affected Indian IT firms," Nilekani said. 

Though software exports grew to a whopping $40 billion in FY 2008 from a mere $50 million in 1991, with a compounded growth rate of 30 percent over the last three-four years, the economic slowdown has reduced the growth to 20 percent. 

"The IT industry grew rapidly on the back of high global economy growth. But in the long-run the sector will do well. The need for technology the world over has not reduced and India too is a large consumer of the technology," Nilekani noted. 

Referring to the various challenges the country was facing, the IT bellwether's top executive said there was a need to create 270 million jobs by 2035 to reap benefits of the demographic change. 

"India has a large number of young people and jobs need to be created by integrating our economy with the global economy. The potential of the youth needs to be harnessed to accelerate the economic growth rate," he asserted. 

Recalling the growth witnessed by developed economies such as Britain, Japan and the US before and after the World War II, Nilekani said India was young when the rest of the world was ageing. 

Seeking devolution of more powers and funds to urban and rural local bodies, Nilekani lamented that the local bodies had been denied powers due to vested interests of some political leaders at the state and central levels. 

"The poor have not benefitted from food, power, farm, water and healthcare subsidies. Measures have to be taken to distribute entitlements directly to the targetted beneficiaries since the subsidies are regressive and not progressive," he added.

Global meltdown has hit IT sector hiring in India: Nilekani- Jobs-News By Industry-News-The Economic Times


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## Nihat

*Gold glitters, touches Rs 15,000/10 gm*

Gold is trading at a seven-month high above USD 950 per ounce. The yellow metal has hit record high above Rs 15,000 per 10 gram in India.

It is trading near record highs in currencies such as euro, pound, Canadian dollar and Swiss frank. In India, gold touched a high of Rs 11,500 per 10 gram on February 17, 2008 vs Rs 15,000 per 10 gram today. There are speculations that it may go up to a high of USD 965 per ounce and then, USD 1,165 per ounce. Gold has gained 30% over the last one-year.

Gold prices are moving up due to a lot of newsflows on the currency front. Yen is at a five-week low compared to the dollar. Pound has also declined and is at a 2-week low, ahead of UK inflation data today. Asian currencies have also declined, Korean won is trading at 2-month lows. There are also speculations that exports and regional economies will contract further.

Political scenario in Japan is further aiding the rise. Finance Minister of Japan has said that he will resign after budget bills are passed in Parliament. Other factors like an unstable global economic scenario, low interest rates, weak equity markets and depreciating rupee are also pushing the prices much higher.

Factors
- Unstable global economic scenario
- Low interest rates
- Weak equity markets
- Central bank buying
- Depreciating Rupee 

Gold glitters, touches Rs 15,000/10 gm


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## Nihat

* Indian entertainment industry worth $11.68 billion*


The Indian media and entertainment industry was a $11.68 billion (Rs 584 billion) business in 2008, growing at 15 percent annually since 2006, says the annual joint study of a leading chamber and a consultancy released on Tuesday.

But the growth projection for the industry for 2009-13 has been lowered to 12.5 percent per annum from 18 percent for 2008-12, says the joint study by the Federation of Indian Chambers of Commerce and Industry (FICCI) and KPMG.

Last year's report, also released during the annual FICCI-Frames exposition on media and entertainment industry, was prepared by the chamber in association with leading accountancy firm and consultancy PricewaterhouseCoopers.

"In many ways, the year 2008 was a testing time for the industry," says the study. "With the global economic slowdown affecting advertising spends, sectors like TV, print, radio and outdoor that depend on advertising revenues were affected."

The new study lowered the projections for the advertising industry during the two periods under review from 18 percent to 12.4 percent, adding that this segment had grown 20 percent during 2004-07 and 17.1 percent in 2006-08.

Among other segments, the study says the print media business, estimated to be a Rs 172.6-billion business, will grow at 9 percent between 2009 and 2013, while the television industry, now valued at Rs 240.5 billion, will expand by 14.5 percent.

The study bets high on gaming. Although it estimates this segment to be worth just Rs 6.5 billion, it sees gaming growing at 33.30 percent till 2013, while the Rs 6.2-billion Internet is seen growing at 27.9 percent.

Among the other findings of the study is the estimate on the number of direct-to-home subscribers in India, now estimated at 10 million households, but seen growing to 28 million by 2013.

The FICCI-KPMG study values the world-famous Indian film industry at Rs 109.3 billion and projects its growth at 9.1 percent till 2013, while the radio business is projected to grow at 14.2 percent, even though its present size is much smaller at Rs 8.4 billion.

Despite the gloom last year, the FICCI-KPMG study sees better days ahead and suggests how the various players should go about defining their businesses.

"Behind every adversity lies an opportunity. Media companies are under pressure to change, innovate and re-examine their existing business models. Players need to draw upon new capabilities to survive in this environment," it says.

"In the immediate future, media corporates are likely to focus more operating margins, and assessing opportunities for consolidation, while building on core strengths." 

Indian entertainment industry worth &#36;11.68 billion


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## nitesh

Why India's Economy Will Keep Growing | Newsweek Enterprise - Global Business | Newsweek.com

Isolated from world trends, India's aspiring middle will help it grow through the credit storm.

Though it may not look it on the ground at times, India is one of the few bright spots in a global economy with decidedly dim prospects in 2009. It is forecast to grow at 5 to 6 percent this year&#8212;which is more than it averaged in the 1990s. Yes, its stock market has crashed, unemployment is spiking, swaths of the real-estate market have more than a passing resemblance to Miami Beach and it now turns out that Satyam Computer Services&#8212;one of the country's top five IT companies&#8212;has been cooking its books. But a one-off incident of fraud in the flagship IT sector won't knock the country off the rails. India boasts an unlikely growth driver all its own: legions of poor whose incomes have risen just enough in recent years to create powerful demands for basic goods and services.

The rise of India's aspiring middle&#8212;a group that lives above the poverty line but hasn't yet attained true membership in modern consumer society&#8212;is hardly a new story. But what's surprising is the resilience of this cohort, and the extent to which it has counterbalanced the global credit crisis and the slump in the global export economy of which India is a key player. In part, this is a consequence of New Delhi's past failures; policymakers were never able to make India the export powerhouse that China has become over the past three decades, so now they don't rely nearly as heavily on growth driven by demand from foreign markets.

The idea that Indian backwardness is a plus may sound absurd. But it is always easier to grow from a poor base, so the fact that India is not yet a major economy is an advantage in a downturn. Such a large population subsisting at so low an economic base is a powerful economic driver if it can be mobilized&#8212;and for India this group is proving resilient to the prevailing headwinds in the global economy. "It's kind of a self-sustaining process," says Subir Gokarn, chief economist at Crisil, the Indian arm of Standard & Poor's. "There's a huge underpenetration of most commodities and services, and you have enough people at the bottom experiencing enough of an increase in income to sustain growth."
Quantcast

So even as middle-class consumption wanes in India&#8212;signified by a sharp drop in auto sales, airline travel and fine-restaurant dining since mid-2008&#8212;demand for basic goods and services remains strong thanks to aspiring consumers, many still tied to the farms, who spend their rupees on essentials like soap, medicine and the shoes and clothing that they wear to work. As Gokarn puts it: "If you go back to the economic textbooks, they will tell you that the poorer you are, the stronger your propensity to consume."

The contrast with China, Asia's other economic giant, is stark. Domestic demand makes up three quarters of the Indian economy, compared with less than half for China, which is "why, relative to East Asian economies, India is somewhat insulated from the global trade slowdown," says Shankar Acharya, a former chief economic adviser to the government. Another Indian mainstay&#8212;agricultural growth&#8212;should remain steady this year, and the services sector, which now accounts for about 55 percent of India's GDP, is expected to be "more resilient" than manufacturing, says Acharya. And despite the financial crisis, the nation's IT sector managed to grow some 20 percent in 2008, according to India's National Association of Software and Services Companies, and IT firms have already extended 100,000 job offers for 2009. "China has been highly focused on the export market, while Indian businesses have been highly focused on the domestic market, and their exports have been incidental," says Saumitra Chaudhuri, chief economist at ICRA, an Indian creditratings agency affiliated with Moody's. That makes India, more than China, a master of its own destiny.

The biggest risk to India in 2009 at this point may not be the global economy but domestic politics. Prime Minister Manmohan Singh's United Progressive Alliance will see its term expire in May, and India's election rules mean that he can no longer enact any significant policies&#8212;a measure adopted to prevent incumbents from stacking the deck with populist sops. That means as much as five months of paralysis, precisely when speedy, creative action is the order of the day. Moreover, though the nemesis of Singh's Congress party&#8212;the Bharatiya Janata Party&#8212;mostly favors similar policies, a change in government would likely result in some further slowing of infrastructure projects that are already running behind schedule. And elections in India can be tricky. In the last one, the BJP-led National Democratic Alliance lost despite rapid economic growth, because poor voters rejected the BJP's campaign claims of an "India Shining."

With the light bulb flickering, Singh's Congress may face an even bigger challenge winning them over. The poor don't care how much faster than other nations India is growing, only whether their lives are better than they were five years ago.


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## nitesh

Bangalore : Infosys Technologies has set up Infosys Science Foundation, a not-for-profit trust to promote research in sciences and honour 
outstanding contributions and achievements by Indians. 

The foundation will be funded by a corpus of Rs 21.5 crore and give out annual awards under different categories. The prize money under each will be Rs 50 lakh, one of the highest in the country for research. 

Speaking at a media conference here on Tuesday, N R Narayana Murthy, chief mentor of Infosys, said: "India needs bright minds across all areas of academics, government, business and society to strive for global excellence. We need to encourage research in the country to address our developmental problems. This award will honour outstanding researchers who will make a difference to our future.'' 

The jury panel for each area will consist of eminent international personalities and will be selected by the trustees of the foundation. 

Infosys had earlier instituted a global award for computing excellence with a cash prize of $ 150,000. The annual award, instituted through the Association for Computing Machinery (ACM), comes out of a corpus of $4 million given by Infosys. 

Awards in five categories: 

l Physical sciences (physics and chemistry) 

l Mathematical sciences (mathematics and statistics) 

l Engineering sciences (all branches of engineering) 

l Life sciences (biology and medicine) 

l Social sciences and economics (economics, history, sociology, political science and other social sciences) 


Infy to promote science research-Bangalore-Cities-The Times of India


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## johnpeter

According to article which posted on 15th Feb 2009 at "The Economic Times" 

The Indian economy will turn in the second-fastest growth rate in the world after China's 8% for 2008-09, according to the advance estimates of national income released by the Central Statistical Organisa-tion (CSO).

The Cabinet Committee on Economic Affairs (CCEA) on 11th Feb.2009 adopted new guidelines for computation of foreign equity holding in Indian companies. This opens up the scope for additional foreign equity inflow into Indian companies, and, in the process, dilutes the foreign investment ceiling that had earlier been imposed on sensitive sectors such as telecom, media, aviation, banking, defence and insurance.


----------



## Omar1984

India hit as foreign remittances dry up 

Wed, Feb 18 12:33 PM

Bangkok, Feb 18 (DPA) India would be among the hardest-hit nations as the remittances sent home by its people working in the Middle East begins to dry up following the economic downturn.

There are an estimated five million Indian migrant workers in six Gulf nations, transferring more than one-fifth of India's total overseas remittances.

While the Ministry of Overseas Indian Affairs insisted the situation is not alarming, there are reports of job losses and wage cuts in the United Arab Emirates and Bahrain during the slump in oil prices and in the construction, real estate and tourism sectors because of the financial crisis.

'Remittances are a catalyst in India's growth as they make up 3 percent of the country's GDP,' a ministry official said. 'A drop in the figures could act as a drag on the economy.'

The Indian consulate in Dubai has said construction firms there had bulk-booked planes next month to fly 20,000 to 30,000 workers home on long leave or to re-deploy them on projects in Gulf nations like Qatar.

An estimated $260 billion of real estate projects are reported to have been delayed or shelved in the Emirates alone. Dubai's construction boom has crashed, sending thousands of workers back home and causing thousands of them to leave cars at the airport that they have stopped payments on.

Over the past three to four years, one of Asia's fastest growing industries has been exporting workers, especially to the oil-driven, construction-crazed economies of the Middle East.

Remittances have become a major contributor to foreign exchange earnings and gross domestic products (GDPs), peaking at an estimated $116 billion in 2008.

This year, the money flows were expected to slow as construction projects are shelved and other jobs dry up in Gulf nations, such Abu Dhabi, Bahrain, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates, which have employed up to 13 million foreign workers, 11 million of whom hailed from Asia.

The remittances have saved millions of families from impoverishment and boosted the region's economies.

Last year, remittances to Asia amounted to $8.9 billion for Bangladesh, $27 billion for China, $30 billion for India, $6.5 billion for Indonesia, $2.2 billion for Nepal, $1.8 billion for Malaysia, $7 billion for Pakistan, $16.4 billion for the Philippines, $2.7 billion for Sri Lanka, $5.5 billion for Vietnam and $1.8 billion for Thailand, according to International Labour Organisation estimates.

The inflows accounted for 9.5 percent of Bangladesh's GDP, 2.4 percent of India's, 15.5 percent of Nepal's and 11.6 percent in the Philippines, the UN agency said.

But recession and plummeting oil prices were expected to take a deep bite out of the remittance flow in 2009.

The World Bank estimated remittances from South Asians in the Gulf could decline by nine percent in dollar terms in 2009, compared with a 38 percent increase in the previous year.

Pakistan - with 24 percent of its remittances coming from the US and 56 percent coming from the Gulf - was expecting to be hit in the second half of 2009.

In Nepal, where remittances sustained the economy during the recent years of civil war and political turbulence, fears abound that mass layoffs abroad this year would mean more than economic instability at home.

'If hundreds of thousands of people employed in foreign countries are sent home, it could lead to social problems,' Nepalese economist Shankar Sharma said.

In the Philippines, where remittances have been the lifeblood of the economy for decades, the government is looking for new, riskier markets for its chief export: English-speaking labour and managers.

The government is reviewing deployment bans to risky destinations such as Iraq, Lebanon and Nigeria to find alternative jobs for retrenched Filipino workers.

Remittances from Indonesian workers, who are more dependent on the export-driven economies of Malaysia and Singapore, were expected to slump to around $3 billion this year, said Fauzi Ichsan, an economist with Standard Chartered Bank.

The Indonesian government expected that at least 100,000 Indonesian workers in Malaysia would have to return home this year.

In more affluent Asian countries, there is mounting political pressure to send Asian migrant workers home.

Japan, with its exports falling, has been laying off Brazilian workers of Japanese ancestry. Since September, planes to Brazil have been fully booked with returning labourers.

South Korea has promised subsidies to companies that hire only South Korean labourers over foreigners.

Such trends bode ill not just for remittances but also for the employment conditions of the legions of Asian workers desperately seeking jobs in a shrinking market.

'The danger is that migrant workers who invested their meagre assets at home to find work abroad will be laid off first and will seek to stay at whatever cost to try to recoup their investments,' said Manolo Abella, chief technical adviser for the International Labour Organisation on labour migration. 'Many will become illegal and be vulnerable to abuse.'


India hit as foreign remittances dry up - Yahoo! India News


----------



## Nihat

*Slowdown not affecting India, pay to rise 8.2 pc: Survey*


New Delhi: After all the news of corporate frauds, economic slowdown and recession, finally there is some good news for Indian employees.

Salaries would continue to rise and lay-offs are not on employer's mind says the latest survey by Hewitt, an HR consultancy firm.

Salaries are projected to rise at an average of 8.2 per cent in 2009, down though from 13.3 per cent at which they grew in 2008 according to the Hewitt survey.

India could be the safest bet for employment as only 16 per cent Indian companies are considering lay-offs as an option against 55 per cent companies in the United States of America and 30.6 per cent Chinese companies.

In more good news, 60 per cent companies are still considering hiring new employees and nine out of 10 companies are still giving promotions to deserving candidates.

So how are these companies going to cope with the current economic slowdown?

"I think organisations are going to be far more strategic in the way they provide salary increases across levels of management and definitely more stringent in the way they evaluate performance to increase salaries," says Sandeep Chaudhary, Business Leader at Hewitt.

Junior managerial employees can expect a maximum salary growth with a projected increase of 8.8 per cent against 14.3 per cent which they achieved in 2008.

Top management can expect a relatively slower growth at 7.4 per cent against 12.4 per cent growth registered in 2008.

Sector wise, pharma is expected to see maximum salary growth with an average projected increase of 13 per cent followed by telecom services at a distant second with 11.3 per cent and FMCG coming third with 11 per cent.

Slowdown not affecting India, pay to rise 8.2 pc: Survey


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## Nihat

*Rush to India, PwC tells global companies*

TORONTO: Engineering and construction companies should rush to India as it offers huge opportunities for their future growth, says a new report
by professional services firm PricewaterhouseCoopers (PwC).

The report released here on Wednesday said India offered unlimited opportunities as it needed investment of $500 billion for infrastructure development in the next three years alone.

"Foreign companies who do not acknowledge the opportunity now may miss out on a critical opportunity to establish a long-term presence in one of the world's largest growth markets," said the report, adding that India will still post a growth of 7-7.5 percent this year despite the global meltdown.

Liberalisation of regulations and "a deliberate strategy on the part of the Indian government to develop infrastructure and promote foreign direct investment (FDI) spells opportunity for foreign engineering and construction companies", it added.

According to PwC, India will become the world's third largest economy by 2050.

Being its second largest economic activity after agriculture, construction in India is set to boom as the country plans to spend $167 billion on electricity, $92 billion on roads, and $65 billion on railway in the next three years.

"The developing services and manufacturing sectors, increasing consumer demand and government commitments to rejuvenate agriculture and rural areas have spurred increases in rail, road and port traffic, necessitating further infrastructure improvements," the report said.

Public private partnerships (PPPs) are also booming as investments worth $150 billion are in the pipeline, it said.

Simplified FDI approval process by India saw a surge in international interest in PPPs in 2008, the report said.

"Already a number of firms from Canada, Europe, Australia, China, Malaysia and Korea have made their presence felt in India. Toyo Engineering, Jacobs H&G, Uhde, Tecnimont, and Aker Kvaerner are already leading players in the region.

"An example of a Canadian company making the move into India is SNC-Lavalin, which has acquired Pipecon Consultants Pvt. Ltd, based in Mumbai, and Span Consultants Pvt. Ltd, an engineering firm headquartered in New Delhi with local offices in Bangalore, Mumbai and Kolkata," the report said.

Michael Clifford, PwC Canada's engineering and construction expert, said: "The opportunities to develop a significant business in India are extremely promising for construction companies with roads, ports and airports, railways and power standing out as particular bright spots."

Rush to India, PwC tells global companies-India Business-Business-The Times of India


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## macintosh

India likely to grow 7&#37; next fiscal: Montek
Press Trust of India
Saturday, February 21, 2009 (Mumbai)


The Indian economy is expected to grow at least 7 per cent in the next financial year on the back of stimulus measures taken by the Government, Planning Commission Deputy Chairman Montek Singh Ahluwalia said on Saturday.
"The world economy expects a recovery in the second half of the next fiscal... In the coming year, India's growth will be at least seven per cent," Ahluwalia told reporters here on the sidelines of a seminar.
"Compared to other countries, we are doing reasonably well... we are growing below our potential... many sectors are feeling the pain. Right now, the foremost challenge is to restore the growth momentum of the economy," he said.
In the second-half of the current fiscal, the economy would have grown at around 6.5 per cent and the growth is likely to be better next year, he added. 
"Compared to other countries, we are doing reasonably well (though) we are growing below our potential...many sectors are feeling the pain. Right now, the foremost challenge is to restore the growth momentum of the economy," Ahluwalia said.
The fiscal and monetary measures have enough flexibility to respond to the prevailing economic situation, he said.
On Reserve Bank Governor D Subbarao's observation that there is a room for policy rate cuts, Ahluwalia said that there is enough flexibility on the monetary side (to reduce policy rates).
The Deputy Chairman of the Planning Commission said that with some sectors affected by the economic slowdown, NPA levels of banks may witness a rise, though these would not be significant.
Banks have been unusually slow to respond to various signals from the Government and RBI to extend credit to needy segments, he said.
"Banks are sufficiently liquid...banks should extend credit to needy segments like SME," Ahluwalia said. 
On credit off-take, he said that banks' credit growth has been improving since January and is further expected to improve in the next one-two months. 
Globally, central banks have been infusing liquidity into the system to face the challenge of the economic slowdown, Ahluwalia said.
On another stimulus package to industry, Ahluwalia said this package, expected to be announced with the full budget, should be around 1 per cent of GDP or Rs 60,000 crore.
"The already-announced two stimulus packages are expected to show results in the coming two-three months. The benefits will come with a lag effect. Both SMEs and large-scale companies will benefit (from the packages)," he said.
Queried about the high fiscal deficit, Ahluwalia said this is only a feature of the current fiscal and that in the long-term, the outlook on economic growth remains positive.


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## macintosh

India invited for G20 meet on financial crisis
Press Trust of India
Saturday, February 21, 2009 (London)


Prime Minister Manmohan Singh is among the top world leaders who have been invited for the second G20 Summit to be held here in April, which will discuss ways and means to reinvigorate growth in the wake of the global economic crisis. 
British Prime Minister Gordon Brown, whose country will host the global economic summit, has sent formal invitations to the world leaders.
"The global economic challenges we face need to be met with decisive action if we are to secure jobs, restore confidence and reinvigorate growth," Brown said yesterday.
Besides leaders from G20 nations, Chair of the New Partnership for Africa's Development (NEPAD), the Chair of the Association of South East Asian Nations (ASEAN) and the President of the EU Commission have also been invited for the summit to be held here on April 2.
The Chairman of the African Union Commission will also attend. This is the second meeting of the grouping after the one in Washington on November 15 hosted by the then US President George W Bush.
"To be effective in addressing this global crisis we have to bring in partners from across the world. For that reason I have issued invitations to the leaders of G20 countries and the Chairs of NEPAD, ASEAN and the African Union will ensure their interests are not forgotten and their voices are heard," Brown said. 
"Having this mix of countries and international organisations present not only reflects the new reality of the global economy but will also make any action we take more effective," the British Prime Minister said.
Reflecting the participation at the Washington Summit, Brown has invited the Heads of State from India, United States, Argentina, Australia, Brazil, Canada, China, Czech Republic (EU Presidency), France, Germany, Indonesia, Italy, Japan, Mexico, The Netherlands, Republic of Korea, Russia,Saudi Arabia, South Africa, Spain and Turkey.
In addition, the Prime Minister is also inviting the heads of a number of global institutions to contribute to specific parts of the agenda.


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## Neo

*Half a million jobs lost in India ​* 
Sunday, February 22, 2009

NEW DELHI: Half a million jobs were lost in India from September to December last year in the sectors of textiles, automobiles and information technology, the private Indo-Asian News Service reported on Friday quoting government official sources, according to Xinhua on Saturday. 

A study by the Labor Ministry said total employment in the sectors of mines, metals, gems, jewelry, textiles, automobiles, transport and IT-outsourcing fell from 16.2 million in September to 15.7 million in December, due to the economic meltdown, said the report. 

Labor Minister Oscar Fernandes said earlier that the average earnings of Indians also declined by 3.45 per cent during the same period of time. Indian left-wing parties and labor unions put the number of jobs lost since September last year at 2 million.

Indias External Affairs Minister Pranab Mukherjee, who also holds the portfolio of finance minister, said on Friday Indians have to share the pain of economic crisis, while promising to protect Indian jobs even through lowering salaries. 

Jobs must be protected even if it means some reduction in compensation, said the minister. 

Indian Prime Minister Manmohan Singh, who holds the portfolio of finance minister, is recovering after a heart surgery.


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## macintosh

*What slowdown? Telecom adds 15 million telecom users in Jan*
21 Feb 2009, 0052 hrs IST, ET Bureau

NEW DELHI: Indian telecom companies added a record 15 million customers in January, indicating that the world&#8217;s fastest growing telecom market remains untouched by the economic slowdown. 

This is a global record for any telecom market. The number of phone connections in the country &#8212; mobile and landline &#8212; has crossed 400 million as of January-end, telecom regulator Trai said on Friday. Mobile phone users now account for close to 91&#37; of the country&#8217;s telephone base with 362.3 million connections, the regulator said. The robust growth has also helped push the country&#8217;s teledensity to 34.5%. This means, there are 35 phone connections for every 100 people in India. 

The industry maintained the growth momentum with operators expanding networks to smaller towns and villages. Besides, cheap call rates, which are among the lowest in the world, have also helped the record growth. 

January growth was led by Reliance Communications that added close to 5 million new subscribers, GSM and CDMA combined, taking its subscriber base to 66.2 million. RCom had launched GSM services in January with an aggressive pricing strategy that enabled the company to garner a third of the total customers added by the industry in the month. 

The wireline segment continued its declining trend, with the subscriber base going down to 37.75 million in January, registering a drop of 0.15 million from 37.90 million subscribers in December 2008. BSNL&#8217;s wireline subscriber base dipped by 0.2 million to reach 29.29 million in January 2009 compared to 29.50 million in December 2008. 

MTNL too registered a drop of over 10,000 customers in the wireline space to take its total subscriber base to 3.5 million. However, private telecom operators providing landline services like Bharti Airtel, Reliance Communications and Tata Teleservices recorded positive growth. 

The broadband sector also recorded positive growth. The country added 0.20 million new users in January, taking the total customers using high-speed internet services to 5.65 million. However, this is well below the target of 9 million users by 2007, laid out in the broadband policy.


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## LCA

macintosh said:


> The broadband sector also recorded positive growth. The country added 0.20 million new users in January, taking the total customers using high-speed internet services to 5.65 million. However, this is well below the target of 9 million users by 2007, laid out in the broadband policy.



I think Broadband situation will improve after 3G tech. come into play.


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## LCA

FY09 FDI to exceed last year's $25 bn

*FY09 FDI to exceed last year's $25 bn*
Press Trust of India / New Delhi February 23, 2009, 16:21 IST

The government today said despite the financial meltdown hitting the global economy, India will receive more foreign direct investment during the current fiscal, surpassing $25 billion that came in during 2007-08.
*
"Our FDI will be more than $25 billion. It is a very good sign... We are still doing very well," *Joint Secretary in the Ministry of Commerce and Industry N N Prasad told reporters here.

India has already received FDI totalling $25 billion, he said, adding the fiscal will end with higher inflows than what was received during 2007-08.

Answering questions on job losses in the aftermath of slowdown, Prasad said the government while replying to a question in Parliament stated that 5 lakh people have lost jobs in various sectors.

According to the report prepared by the Labour Ministry 5 lakh people lost their jobs on account of slowdown during the four-month period ending December.

On the affected sectors, Prasad said, those badly hit by the slowdown include automobiles, IT, textiles and exports.

Among the large companies, he added, Tata Motors has already taken steps to rationalise operations to combat slowdown.

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## tyagi

LCA said:


> I think Broadband situation will improve after 3G tech. come into play.



dude what does 3g has to do with broadband .


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## LCA

tyagi said:


> dude what does 3g has to do with broadband .



This article can help you...........

BSNL launches 3G pan India- Politics/Nation-News-The Economic Times

*BSNL launches 3G pan India*
22 Feb 2009, 1639 hrs IST, ET Bureau

Print EMail Discuss Share Save Comment Text:
CHENNAI: By the 27th of this month, mobile telephony will enter its third generation (3G) in 12 cities in India, courtesy the state owned telecom
service provider BSNL.

Union minister for communication and IT A Raja launched BSNL's 3G services pan India, from Chennai, on Sunday, by making the first video call to TN chief minister M Karunanidhi.

The PSU was awarded one block of 2*5 MHz 3G spectrum in all telecom circles in the country, six months before, without participating in the auction, at a price equal to the winning bids in the respective circles, in the auctions to be held before March 31st.

"Considering the need for faster penetration of 3G, and the need for telecom access to rual areas, the Government policy will allow telecom infrastructure sharing between commercial telcos as well as infrastructure providers," Mr.Raja said. DoT also plans enable mobile number portability (MNP) in major cities by August, and in other towns by end of this year. Bids have been invited of providing MNP switches.

On the occasion, BSNL also launched its India Golden 50 tariff scheme, where, by increasing the pulse duration for all calls to 120 s, the tariffs have been have been reduced by 50-80%. Presently, a pulse is calculated at 90 s for national calls to other networks and 60 s within network.

*"Besides upgrading mobile data speeds to 2 mbps from the present 144 kbps, we will also offer video screening of calls, video on demand, mobile surveillance, Live TV, movie downloads etc on our 3G platform," BSNL CMD Kuldeep Goyal said. For this, the company will scale up tie-ups with its existing content providers. However, the telco will not be providing its previously launched IPTV service, which has garnered 5000 subscribers, on 3G.*

"We plan to operate 5 million lines spanning all district headquarters and important towns by end of this year at an investment of Rs.2700 crore," Mr Goyal said. "We expect 5% of our 2G subscribers to migrate to 3G." The company expects a revenue addition of Rs 500-1000 crore by this customer addition, and a 20% revenue augmentation by infrastructure sharing.

BSNL has tied up with Nokia, Sony and Samsung for handset bundling, the cheapest of which is priced at Rs.7000. Voice tariff schemes begin from a fixed monthly charge of Rs.350 for prepaid, and Rs 500 for postpaid. Data subscriptions are available starting Rs 250. The company has tied up with Micromax and Huawei for offering laptop data cards at prices ranging form Rs 3800 to 6000. "Trials are on to launch mobile banking on our 2G and 3G platforms," Mr Goyal said.


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## Rajkumar

'Resilient' Indian economy will bounce back by October: Chidambaram-India-The Times of India


NEW DELHI: Complimenting the resilience displayed by Indian industry in dealing with the slowdown, home minister P Chidamabaram on Tuesday said
the country's economy is likely to find an upturn by October this year.

"By the beginning of the third quarter of 2009-10, by October, we will find an upturn in the economy," Chidamabaram, who was Finance Minister till November last year, said while presenting the National Tourism Awards here.

"The present downturn is temporary. Our growth rate is expected to be well over seven per cent," he said noting that despite a downturn in global scenario, India has managed to achieve seven per cent growth. He attributed this to domestic consumption and demand.

Commending the performance of Indian businesses and industry during the global downturn, the Minister said India stood out as a "shining example" of a resilient economy when the world was engulfed by economic gloom.

"We owe this resilience of Indian business and economy to its ability to quickly adjust to changing times. But in no other country, I have seen businessmen adjusting so rapidly (to the situation). That is why we were able to hold our head high," he said.

During difficult times, Chidambaram advised that one should take "hard decisions" like cutting prices as a "natural response" to the downturn.


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## Neo

*Indian budget 2009-2010 ​* 
ARTICLE (February 23 2009): The Indian budget announced by stand-in Finance Minister Pranab Mukherjee who is also External Affairs Minister, for the fiscal year 2009-10 would have many a developed country drooling over its state of the economy and growth forecasts for the forthcoming fiscal year.

Past Pakistani economic managers, if they are in the mood for introspection and an unbiased analysis of their own performance would, no doubt, feel not only envious of India's achievements; but also ashamed of how our rival left us far behind in the economic arena even at a time when the world was prospering and Pakistan registering high growth rates.

It is India's achievements in the field of economics that is considered by many an analyst as the main source of India's rising international clout - clout evident given the frequent mention of the potential of India's large middle class as a market for western products in the international media.

So what exactly are these statistics? First, GDP growth rate of 7.5 percent, 9.5 percent, 9.7 percent, and 9 percent from fiscal years 2004-05 to 2007-08. Comparable growth rates in Pakistan as per the Economic Survey were: 9 percent, 5.8 percent, 6.8 percent and provisional estimate of 5.8 percent in 2007-08. In other words Musharraf's economic managers mantra that during their tenure the country experienced high growth rates must be seen in the context of India's economic performance during the comparable period.

Musharraf's dwindling acolytes may well quote Bush from three years ago as the reason for Pakistan's poor performance even at a time when the floodgates of concessional aid were open to us post 9/11: "Pakistan and India are different countries with different needs and different histories." And this remark, though it angered the Pakistani public and media at the time, remains valid.

While both Pakistan and India have high corruption levels, though we have been able to beat India in terms of scoring higher on the Corruption Index compiled by international institutions yet the major difference is three fold: (i) India has remained a democracy since its independence excepting a brief period of emergency during which time the government remained under civilian control.

In contrast, the role of the Pakistan army has remained pervasive not only in Pakistani politics but also in our economy even during times of civilian rule. (ii) Indian judiciary has remained independent of the executive and has, as a consequence, strengthened its institutions. This has also spread the perception amongst businessmen, local and foreign, that justice is accessible - a fact that accounts for large foreign investment inflow into India.

Pakistan's military and civilian rulers, in contrast, continue to show a partiality for a judiciary subordinate to their dictates. And (iii) the Indian government's five year economic plans encapsulated a vision for the future from which politicians did not deviate. In Pakistan, in contrast, five-year plans were rarely followed which may well account for the appalling literacy rates, low outlay on education and health - trends that continue to this day.

Thus, during the last four years of Musharraf the Pakistan government failed to take advantage of a favourable international investment climate as well as to channel massive aid injections to this country to the deficient physical (read energy) and social infrastructure (education and health) sectors in marked contrast to India. The reason may be found in the fact that Musharraf did not want to rock the boat as far as the economy was concerned and more specifically in terms of (i) not changing expenditure priorities from the past which did not take account of the changing ground realities, for example the brewing energy crisis; and (ii) backing off from taxing those who were supporting his government.

In terms of fiscal policy the two countries took different decisions that accounts for Pakistan's current economic impasse. Tax to Gross Domestic Product (GDP) ratio for India was 9.2 percent in 2003-04 while in Pakistan it was comparable at around 9 percent in 2004-05. By 2007-08 India had upped the tax to GDP ratio to 12.5 percent which, according to the Finance Minister in his budget speech, brought India "within striking distance of the target for fiscal correction. This also enhanced our capacity to raise resources internally to finance our growth at the rate of 9 percent per annum during the eleventh five-year plan."

In contrast Pakistan's tax-GDP ratio was 9.6 percent in 2007-08. Shaukat Tarin, Advisor to PM on Finance has underlined the need for enhancing tax to GDP ratio to 18 to 20 percent to achieve 7 to 8 percent growth in the economy - considered to be a wish at this point as it does not reflect any policy announcement in this regard.

The current tax-GDP ratio is simply too low to finance Pakistan's desired spending levels as well as control the persistent budget deficit. Tarin has stated the government will request the International Monetary Fund (IMF) to increase its support for Pakistan by over 4 billion dollars, reflecting paucity of domestic tax and non-tax revenue collections for the current year, while no effort has yet been made to bring the sacred cows into the tax net.

Focus, as per the government's Letter of Intent (LoI), submitted to the IMF Board for formal approval of the 7.6 billion dollar standby arrangement, is on (i) eliminating subsidies (oil subsidies have already been eliminated and food subsidies have been dramatically reduced). This reduction, one would assume, would be much greater than the other condition in the LoI namely to place a comprehensive and well targeted social safety net, (ii) integration of income and sales tax administration with obvious implications for (iii) audit reintroduction and (iv) full VAT with minimal exceptions.

India in contrast used high growth of the 2000's to its long term economic stabilisation: Finance Minister Mukherjee in his budget speech added that "during this period the fiscal deficit came down from 4.5 percent in 2003-04 to 2.7 percent in 2007-08 and the revenue deficit declined from 3.6 percent to 1.1 percent." But with international oil and food prices rising in 2007-08 coupled with an impending election the government of Pakistan's subsidy erased all previous gains largely attributed to the heavy inflow of foreign assistance. True, but India, like the rest of the world, was also subject to the same prices.

Mukherjee in his budget speech stated that "the sharp rise in global inflation, even with a moderated passthrough, put pressure on domestic prices. The WPI headline inflation shot up to nearly 13 percent in the first week of August 2008. To ease supply side constraints, Government took a series of fiscal and administrative measures, in concert with monetary policy measures by the Reserve Bank of India.

RBI raised interest rates to mop up excess liquidity. This in turn had implications for the growth rate from the demand as well as the supply side. These, along with easing global price pressures, led to a decline in domestic prices with inflation rate falling to 4.4 percent on January 31 2009. We have weathered the crisis" but he added: "there is no room for complacency."

One must contrast this state of affairs with what happened in Pakistan. The State Bank of Pakistan, in spite of measures to combat inflation, failed to come up with a monetary policy formula that controlled the inflation rate and it requested IMF monitoring to force the Ministry of Finance to desist from borrowing irresponsibly from the SBP. In other words Pakistan remains far from the position where anyone can declare that have 'weathered the storm.'

(This is Part 1 of a two-part series contrasting India's economic performance and budgetary policies as contained in the budget speech of Mukherjee with Pakistan's experience.)

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## Neo

Oops...wrong thread.


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## Nihat

*Govt cuts excise, service tax to boost economy*

New Delhi: The Central Government has come out with the latest stimulus package to revive the economy. In the latest move on Tuesday, excise duties and service tax have been cut by two per cent each.

After leaving tax rates unchanged in the Interim Budget, the government has gone for cuts in excise and service tax, in what is being seen as a final measure to perk up the economy before the election code of conduct comes into effect next week.

Stand-in Finance Minister Pranab Mukherjee on Tuesday announced further cuts in indirect taxes while replying to the debate on the Interim Budget in Parliament.

The reductions do not require parliamentary approval or amendment to the Finance Bill, unlike changes in income tax.

"It is another stimulus. I do hope it will have its desired impact because we have given some concession for the export sectors," Pranab Mukherjee later said.


The cut in service tax is across the board and should benefit exporters and software companies.

As for excise duty, only the 10 per cent rate that applies to most products has been cut to eight per cent. The four, 12 and 20 per cent rates are unchanged.

Truck makers will gain, but not car makers or two wheeler manufacturers as they are already in the eight per cent bracket.

"The cut which has been announced today was some thing new which will have to be factored into the Budget estimates as we go along. That was not factored in. What was factored in was the fact that four per cent reduction made earlier would continue," said Economic Affairs Secretary Ashok Chawla.

Cement manufacturers said there could be a reduction of Rs 3.50 per bag of 50 kgs.

The government has also specifically given incentive for reduction in bulk cement prices, to boost the construction sector.

Steel maker JSW said it would cut prices.

"The reduction of two per cent in excise duty and two per cent in service tax, if it is passed to the consumer and I believe that it can be passed to the consumer, will stimulate demand," hoped Home Minister P Chidambaram.

There is unlikely to be an across the board cut in prices. Fast moving consumer goods companies, for instance, might prefer to retain some of the gain, as there is strong rural demand.

But the government message is clear - cut prices, stimulate demand, operate at higher capacity and save jobs.

Govt cuts excise, service tax to boost economy


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## Nihat

*Tata Nano to be launched on March 23*



Tata Motors has announced that the much-awaited Tata Nano will be launched at a function in Mumbai on March 23, 2009.

The cars will be on display at Tata Motors dealerships from the first week of April 2009 and bookings will commence from the second week of April 2009.

Journey from Singur to Gujrat

The Nano' was unveiled in January 2008 and was scheduled to go on sale last October, but problems with the main plant location at Singur delayed the launch.

*Nano exits Singur: What happens to Tata's WB land?*

After the much debated exit from Singur, Tata Motors entered the state of Gujarat and identified site at Charodi in Sanand, near Ahmedabad.

Nano finds new home in Gujarat; Ratan Tata, Guj CM ink pact

*Miracle on wheels*

Since its unveiling on January 10, 2008, the Tata Nano has evoked an unprecedented interest in the country, with its website having recorded over 30 million hits in the past one year and the creation of over 6,000 interest groups and communities.

Tata's Nano also made waves beyond Indian shores. It' was quite a rage in London, hogging the headlines in the British media, which has called it no less than a miracle.

Theres been few occasions when even swanky sports cars and sedans have been splashed on the front page of newspapers in the UK but it's a different story with Nano. Tata's small car is getting big publicity and it's being called a miracle on wheels, a car a generation ahead of its' predecessors which is a revolution in the small car market.

Tata Motors is making arrangements for the widest possible network to book the car, so that prospective customers can conveniently avail of booking facilities at their locations, across the length and breadth of India. The booking process and other details will be announced on March 23, 2009.


Tata Nano to be launched on March 23


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## Jihad

Neo said:


> Oops...wrong thread.



Interesting article, thanks!


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## Nihat

*Economy is hurting, nation may feel pain*

New Delhi: India's economy grew at its slowest annual pace in almost six years in the December quarter, throwing into doubt growth estimates for the full fiscal year and raising expectations the central bank would soon cut rates.

The slower-than-expected growth in Asia's third-largest economy saw a weak sharemarket extend losses to more than 2 percent, and analysts said the central bank could cut rates as early as Saturday.

The economy grew 5.3 percent in the December quarter from a year earlier, below forecasts of 6.2 percent and the previous quarter's 7.6 percent as the global economic crisis cut demand and exports. It was the slowest growth since the March quarter of 2003.

"We have been calling for significant rate cuts for a long time. We are looking for a 100 basis points cut as soon as probably tomorrow in the repo rate and reverse repo rate," said Sailesh Jha, senior regional economist at Barclays Capital.

"After seeing this number, I think the market is now pricing in a 100 basis points cut." The central bank cut its main lending rate, the repo rate, by 350 basis points to 5.50 percent in four moves between October 20 and January 2, but held rates steady at a review in late January, saying banks were yet to pass on its rate cuts.

The rupee, which hit a record low of 50.78 in morning trade, was supported by buying from state-run banks, which traders said was likely to have been on behalf of the central bank.

Losing altitude

India's economy has lost altitude from growth rates of 9.0 percent or higher in the past three fiscal years, and economists said the government's forecast of 7.1 percent growth in the 2008/09 fiscal year ending March 31 was now too optimistic.

Economy is hurting, nation may feel pain


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## rubyjackass

Rupee hits record low of 51.12 against dollar
27 Feb 2009, 2000 hrs IST, PTI
Print Email Discuss Share Save Comment Text:
MUMBAI: Sliding for the fifth day in a row, the Indian rupee on Friday breached the 51-mark for the first time ever against the greenback as the
local currency lost 66 paise on sustained strong demand for the US dollar from foreign banks and oil importers amid weak stock markets.

The US dollar ended sharply higher against the rupee at Rs.51.12/14 per dollar and the Pound Sterling also finished higher at Rs.72.49/51 per pound at the close of the Interbank Foreign Exchange (Forex) market on Friday.

Dealers in foreign exchange said that the stronger dollar abroad gave an opportunity to the foreign banks to buy American currency in the local market and sell it in offshore non-deliverable forward contracts for immediate profits.

In the overseas market, the dollar gained against its major rival euro but slipped against Asian competitor yen.

The rupee on Thursday only set a fresh low record of 50.46 on sudden surge in demand for dollar. The previous low record of the domestic currency was recorded on last December 2 when it touched the intra-day high of 50.60. Including today's fall of 66 paise, the rupee had slumped by a whopping 151 paise or 3.04 per cent in the straight past five sessions.

Continued selling by Foreign Institutional Investors (FIIs) in equity markets also weighed against the rupee. They have pulled out nearly USD 1.6 billion in the current calender year so far, dealers said. Weakness in equity markets also put pressure on domestic unit, they added.


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## rubyjackass

Slowdown pulls down India's growth to 5.3&#37;
27 Feb 2009, 1616 hrs IST, PTI
audio 
Print Email Discuss Share Save Comment Text:
NEW DELHI: Impacted by the global economic meltdown, the Indian economy has clocked slowest quarterly growth in over five years, at 5.3 per
cent, in October-December of this fiscal as agriculture and manufacturing contracted, despite a stimulus package.

Against the whopping 8.9 per cent growth in the same period a year ago, economists said it is now the Reserve Bank's turn to provide stimulus to the economy by cutting rates, as inflation is already down to 3.36 per cent.

While the fall in manufacturing, by 0.2 per cent, in the third quarter was expected, as was evident in negative industrial production numbers for October and December, contraction in farm output by 2.2 per cent was a bit surprising.

"What has come as a surprise is agriculture. There is a turnaround but we can be optimistic that the figures will improve," Chief Statistician Pronab Sen said.

For the nine months of this fiscal, the economy grew by 6.9 per cent against nine per cent a year ago, which may make it difficult to attain the 7.1 per cent growth this fiscal, as was pegged officially.

The Government put up a brave front, saying the third quarterly growth is not much off the mark.

"We had maintained seven per cent with a downward bias. That much has been said, but (there is) still a quarter to go. Even with 5.3 per cent, it still comes around seven per cent, maybe a shade below that," Minister of State for Finance P K Bansal said here.

However, others are not as sure about the possibility of attaining 7.1 per cent growth this fiscal. "It is unlikely that the growth is going to be 7.1 per cent (for the entire 2008-09)," Sen said.

In December, the Government provided the first stimulus package, cutting excise duty by four per cent across the board and increasing planned expenditure by Rs 20,000 crore among other things.

However, stimulus packages, also provided in January, and then the interim Budget, would take some time to work their way through the system, economists said.

"(The) Government will not be able to achieve over 7 per cent growth. The stimulus packages will take 6-8 months (to lift the economy) and (it will take) 8-9 months to get about 7 per cent (growth)," Crisil Principal Economist D K Joshi said.

It was only services that provided a sliver lining to the otherwise gloomy situation on the growth front.


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## gpit

India has also boycotted Chinese toys for no reason claimed, perhaps in an attempt to promote &#8220;buy Indian&#8221;, but it seems in vain.

BTW, 5+&#37; is not bad.


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## Nihat

*Tata Nano's European version to be unveiled at Geneva*

Geneva: Largest Indian auto maker Tata Motors, which is gearing up for the commercial launch of Nano in India this month, will be unveiling the European version of the small car -- touted as cheapest in the world in Geneva on Tuesday.

According to industry sources, the company would showcase the car at the Geneva Motor Show.

"The version for the European market will be more fuel efficient, better emission compliance and will be technologically superior," they added.

Further, the sources said the car, which would be showcased at the Geneva Auto Show, will comply with Euro-V emission norms.

However, Tata Motors spokesperson was unavailable for comment.

Last year, the auto maker had displayed the luxury version of the Indian Nano at the Geneva Motor Show. Following the event, many car makers across the world came up with plans for similar low-cost small cars.

Tata Motors would commercially launch Nano in India on March 23.

UK-daily The Times has reported that there is no confirmed launch date for Europe and Nano is likely to have to undergo a comprehensive redesign to meet European safety standards.

Tata Nano's European version to be unveiled at Geneva

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## Neo

*Indian manufacturing, exports data show grim outlook ​* 
Tuesday, March 03, 2009

MUMBAI: Indian manufacturing activity shrank for a fourth straight month in February and exports fell again in January, showing the economy remained under pressure in early 2009 and bolstering expectations of a rate cut.

The data followed figures last week showing economic growth at its slowest in nearly six years at the end of 2008, and analysts said that the worst may not have passed despite a number of government stimulus packages and Reserve Bank policy easings.

Essentially we dont think the economy has bottomed out yet, said Nomura economist Sonal Varma, who expects the economy to hit a trough of 4.5 per cent annual growth in the June quarter.

We clearly feel both room and need for further rate cuts with economic activity having deteriorated much faster than what was earlier expected, she said. Manufacturing, which accounts for about 16 per cent of Asias third-largest economy, showed some improvement in February from January, but still contracted and the fall in new orders from local and foreign clients picked up pace.

The ABN AMRO Bank purchasing managers index (PMI), based on a survey of 500 companies, rose to a seasonally adjusted 47.0 in February from Januarys 46.7. A reading below 50 signals economic contraction.

The series correlates reasonably well with exports and offers a crumb of comfort in what remains a generally depressing environment, said Rober Prior-Wandesforde, senior Asian economist at HSBC. Exports fell 15.9 per cent in January from year earlier, a fourth straight fall as the global downturn weakened demand, government data showed.

Still, the trade deficit narrowed to $6.1 billion in January from $7.6 billion in December as import values dropped 18.2 per cent, mainly due to the sharp fall in oil prices. For April to January, the first 10 months of the fiscal year, exports rose 13.2 per cent to $144.3 billion from a year earlier, but the trade deficit grew to $99.1 billion from $66.8 billion.

Indias economy grew an annual 5.3 per cent in the December quarter. Full-year growth in the 2008/09 fiscal year ending on March 31 is expected to be around 7 per cent, well below rates of 9 per cent or more in the previous three fiscal years.

In terms of domestic economic activity, I think we are probably going to see some downside on the private sector side, said Atsi Sheth, chief economist at Reliance Equities.I think what is going happen this quarter and the next quarter is that the government spending is going to be so strong, that it will partly compensate for it, but not fully, she said.

Policy makers have responded to the slowdown with a slew of steps aimed at shoring up faltering demand. The central bank has aggressively cut its policy rates since mid-October, and expectations of further cuts are growing. The government has cut factory gate taxes and stepped up spending to stimulate the economy.


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## Nihat

*Latest casualty of recession: IIM placements*

CNN-IBN


New Delhi: The latest casualty of the global economic gloom are IIM students who are struggling to get placements.

The IIM-Bangalore has extended its campus recruitment process till every student is placed. Placements had begun on February 27. Last year the process was over in two-and-a-half days.

IIM Ahmedabad however says the number of offers were adequate for the students, though there was a reduction in the participation of foreign companies. Out of 109 firms which came, most were domestic companies.

In tough times, however, IIM-A alumni are pitching in with help to keep the show going.

I think it is the economic slowdown which has created this problem that the compensation package has come down, says Sameer Barua from IIM A.

This is a much longer process than earlier which just reflects the current market condition. Many of the regular recruiter has refused to participate because they are undergoing recruitment freeze, says Sourav Mukherjee of IIMB.

Off record, IIMs say that they are advising graduates to take government jobs, which are seen to be secure. some nationalized banks have offered to create special posts for IIM students.

The faculty is also advising students to go for job security rather than chase fat pay packets and that's a reality which IIM grads will have to learn to deal with quickly.

The institute has a huge active alumni network with more than 32,000 members and a large number of them are actively associated with the institute through various programmes.

The flagship PGP programme alone has 8,000 alumni and a large chunk holds senior-level positions in both domestic and multinational firms.

Latest casualty of recession: IIM placements

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## Neo

*India seen nearing end of rate cut cycle: economists​*
MUMBAI: Indias central bank appears close to the end of a rate cut cycle, having slashed key short-term interest rates five times since September to boost growth in a weakening economy, economists say.

On Wednesday, the Reserve Bank of India (RBI) cut the repo  the rate at which it lends to commercial banks  by 50 basis points to five percent, its fifth in five months from a high of 9.0 percent. It also lowered the rate at which it borrows money from banks, the reverse repo, by 50 basis points to 3.5 percent.

Economists believe the RBI is near its end of a rate cut cycle, and a small 50 basis points cut in its scheduled April monetary policy review is expected to be the last for some time. The RBI has done enough... The response from the banking sector (to lower lending and deposit rates) is awaited, Rupa Rege Nitsure, an economist with state-run Bank of Baroda, told AFP.

To a great extent, the rate cut cycle appears to be near its end, said an analyst with a local brokerage firm, on condition of anonymity. Economists said the RBI would wait for the full effects from financial stimulus packages announced by the government this year, before deciding to cut rates again.

Last week, the Congress-led government cut factory levies and service taxes. In January, India eased foreign borrowing for real estate and certain other companies and allowed more liquidity for non-banking financial firms.

The package also allowed state administrations to borrow up to 300 billion rupees ($6.2 billion) to meet extra expenditure and fund infrastructure projects. But the decelerating growth scenario may not improve because of the easing of rates. Business confidence remains low and financial intermediaries are still not keen to lend, said Siddhartha Sanyal, an economist with brokerage Edelweiss Securities. The scenario is improving, but slowly. There is no timeframe, he said.

Indias exports slid nearly 16 percent in January, the steepest drop in more than a decade, figures showed Monday, adding to a grim stream of economic data as officials announced general elections in April. The country is beginning to feel the full impact of the global slump, as official data last week showed the economy grew at its slowest pace in six years at 5.3 percent in the third quarter to December, down from 8.9 percent in the same period a year earlier.

Indias economy is estimated to grow by 5.2 to 5.6 percent in the fourth quarter ending March, and near 6.5 percent for the full year, after expanding by a solid nine percent in previous years. Some of Indias carmakers have seen record sales in the first two months of the year and cement and steel prices are beginning to firm up, economists said. Demand for construction is picking up slowly, Rege said. afp

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## Neo

*Deflation worries India as growth slows ​* 
Thursday, March 12, 2009

NEW DELHI: It was less than a year ago that Indians watched inflation shoot to dizzying 13-year highs but now they are worried about deflation as growth slackens in Asias third-largest economy.

Deflation, in which falling prices prompt consumers to delay buying, deepening a downturn, has become a growing concern across the globe as demand for goods sinks.

Indias weakening inflation is the symptom of a deeper malaise with an adverse environment for jobs, salaries and business prompting a fall in prices, HDFC Bank Chief Economist Abheek Barua said. Inflation has tumbled from 12.91 per cent last August to 3.03 per cent, partly due to a precipitous slide in the global price of oil and other commodities. Now a slowing domestic economy is kicking in as the global financial crisis hammers exports.

Inflation will reach zero by the end of this fiscal year in March, according to Axis Bank economist Saugata Bhattacharya. Some economists forecast deflation could then set in and last until at least October. It would mark Indias first bout of deflation since March 1976, according to central bank records.

Wholesale price levels are showing absolute declines unprecedented since the start of the (inflation data) series in 1988, Goldman Sachs economist Tushar Poddar said. India uses the Wholesale Price Index to measure inflation because it has a broader basket of goods.

We think deflation will be a much bigger risk for the economy in the rest of 2009, due to ongoing demand destruction and commodity price collapses, Poddar said in a recent research note.


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## notsuperstitious

*India car sales beat global slump *
Sales of passenger cars in India have risen for the first time in five months, but analysts say it is too early to see recovery in the sector. 
Sales jumped 22 per cent in February, compared with the same month in 2008, the Society of Indian Automobile Manufacturers said. 
Experts said the spurt was driven by easing bank credit after lenders cut auto-loan rates from about 13 per cent to 10 per cent. 
However, sales of commercial vehicles fell by more than 50 per cent. 
Analysts said the two factors which had the most impact on February's figures - lower auto-loan rates and government tax cuts - would not necessarily lead to a long-term recovery. 
Ten out of 13 carmakers in India saw a rise in sales during February. 
Maruti Suzuki, the country's largest carmaker, said it had been a record month both for sales and exports. 
Vaishali Jajoo, auto analyst at Angel Broking in Mumbai, said Maruti Suzuki's exports were helped by a growing appetite in Europe for small, fuel-efficient cars. 
However, Ms Jajoo was cautious about how long the growth would last. 
"Turnaround is a strong word. Sequential spurt would be better," she said. 
The rise in vehicle sales in India contrasts with a slump in demand for cars in Europe, the US and Japan. 
But India's carmakers were keen to play down the significance of February's figures. 
Last week, Hyundai Motor India announced a 45 per cent rise in domestic sales in February, and an 18 per cent increase in exports. 
"The overall market situation continues to be challenging and not much should be read into the February growth," Hyundai spokesman Arvind Saxena said


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## Nihat

> *IMF sees India's growth rate slowing dramatically*
> 
> Reuters
> 
> 
> SLIPPING: IMF forecasts India's GDP grow by just to 6.3 per cent in 2008-09.
> 
> 
> 
> 
> Washington: India's economy is slowing dramatically and uncertainty surrounding the outlook is unusually large, the International Monetary Fund said on Tuesday.
> 
> The IMF forecast that India's gross domestic product growth would slow to 6.3 per cent in the 2008-2009 fiscal year, ending in March, and to 5.3 per cent the following year.
> 
> That would be well below the nine per cent growth rate in the 2007-2008 year.
> 
> "Policy measures to stimulate the economy and a good harvest should support domestic demand," the IMF said.
> 
> "The uncertainty surrounding the forecast is unusually large, with significant downside risks. The main upside risk stems from a larger-than-anticipated impact of the stimulus measures that the authorities have already implemented," it said.
> 
> The Fund cautioned that India's debt as a percentage of GDP was already high, so a big expansion of the deficit could raise concerns about fiscal sustainability.
> 
> Any additional stimulus should be focused on "high-quality infrastructure and poverty-related spending" or to recapitalise banks if needed.
> 
> The IMF said given the budget constraints, monetary and structural policies would have to do the heavy lifting.
> 
> But directors were split on whether there was scope for more interest rate reductions or if a wait-and-see approach was preferable.
> 
> They supported India's flexible exchange rate policy, and said currency market intervention "should be consistent with the goal of ensuring sufficient domestic liquidity."
> 
> IMF staff concluded that India's exchange rate appeared to be close to its equilibrium level.
> 
> IMF sees India's growth rate slowing dramatically






> *India fighting fit to battle economic crisis: IMF*
> 
> Washington: Commending India's strong economic performance in recent years, the International Monetary Fund (IMF) has said "India confronts the current global economic and financial crisis from a position of strength."
> 
> India's strong economic performance in recent years "reflected sound macroeconomic policies and continued progress with structural reform, the IMF Executive Directors said in their assessment after their annual Article IV Consultation with New Delhi.
> 
> Observing that there have been spillovers from the global crisis, they commended Indian authorities' "swift and comprehensive policy response, but underscored the downside risks and called for maintenance of a flexible, pragmatic, and proactive policy stance."
> 
> According to a summary of the IMF report released on Tuesday, directors agreed that a key short-run policy objective should be to sustain liquidity and credit flows.
> 
> "They believed that monetary and structural policies will have to continue to carry most of the burden of adjustment, given the high public debt-GDP ratio."
> 
> Directors welcomed the central bank's actions to ease monetary policy and stimulate bank lending.
> 
> A number of directors saw scope for further monetary easing, in light of the projected decline in inflationary pressures and the need to reinforce confidence and sustain bank credit.
> 
> However, a number of other directors saw merit in the authorities' wait-and-see approach, given the highly uncertain economic environment, it said.
> 
> IMF supported the authorities' flexible exchange rate policy, which will help the economy to adjust to the global downturn, while commending "the strength and resilience of India's financial system, reflected in favourable financial soundness indicators."
> 
> The directors however, "stressed that rising credit risk and liquidity pressures could put the financial system under strain, while negative feedback loops between the real and financial sectors could turn out to be strong."
> 
> They therefore encouraged the authorities to take additional preventive action, including identification of potential bank re-capitalization needs and measures to promote early loss recognition, full disclosure of bad assets, and filling of information gaps, the report said.
> 
> They underscored the importance of persevering with reforms to deepen and further strengthen the financial sector, develop the corporate bond market, and improve banking efficiency.
> 
> IMF Directors broadly supported the authorities' gradual and cautious approach to capital account liberalization. They encouraged further progress, observing that liberalisation could help to ease external financing constraints. Directors also welcomed the authorities' commitment to trade liberalization.
> 
> Directors acknowledged that the sizeable fiscal stimulus undertaken in 2008-09 should help to support economic growth. However, they stressed that, given the high ratio of public debt to GDP, significant further expansion of the deficit could raise concerns about fiscal sustainability.
> 
> They encouraged the authorities to use the limited available fiscal space only for high-quality infrastructure and poverty-related spending, and for bank recapitalisation if needed.
> 
> Directors stressed that medium-term fiscal consolidation remains a priority, and should continue to be anchored in a fiscal rules framework to be backed by comprehensive expenditure reforms and measures to broaden the tax base, the IMF said.
> 
> India fighting fit to battle economic crisis: IMF



Who knows what the IMF exactly wants to say.


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## Nihat

*Inflation at its lowest-ever level, down to 0.44 pc*




New Delhi: Inflation has fallen to its lowest-ever level in India with the figures at 0.44 per cent for the week ending March 7 as against 2.43 per cent in the previous week.

With inflation nearing the zero-per cent mark, India now faces the threat of deflation.


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## Omar1984

*Infrastructure deficit chokes India *

By James Lamont in New Delhi 

Published: March 17 2009 10:55 | Last updated: March 17 2009 16:49

India faces a shortfall of as much as $190bn in financing key infrastructure projects as the global crisis chokes off urgently needed capital, according to a study by McKinsey, the management consultants.






Hard road: cash constraints are slowing India&#8217;s transformation to a more modern economy 

Infrastructure development is one of the most important challenges facing New Delhi as it strives to sustain high levels of economic growth. The Indian government has identified the need for $500bn (&#8364;385bn, &#163;357bn) in infrastructure spending between 2007 and 2012. But a liquidity squeeze in the local banking system and the draining away of foreign investment has cast doubt on this goal.

Decades of underinvestment in roads, ports, airports and power has left the country crippled by a severe infrastructure deficit.

Roads in the main cities are frequently clogged with heavy traffic and 90 per cent are structurally unsuitable for loaded trucks. Ports are running close to capacity.

Financial constraints threaten to block a transformation to a more modern economy.

&#8220;Structural impediments in the financial system coupled with the global credit crisis will constrain capital flows to the sector, perpetuating the deficit in core public goods and persistent inefficiencies in the economy,&#8221; the study said.

Some economists claim that if India improved its physical infrastructure the country&#8217;s entrepreneurial drive would comfortably propel it to double-digit economic growth to rival China&#8217;s. Frequent comparisons are made between China&#8217;s focus on infrastructure development and India&#8217;s often Victorian-era systems.

According to a government blueprint, a quarter of new investment in core infrastructure is expected to come from the private sector. 

New projects include the $50bn Delhi-Mumbai industrial corridor, high-speed rail links between main cities and improved cargo handling at ports. The country also aims to have 500 airports operational in the next decade.

To avert a funding shortfall in infrastructure development &#8220;that India can ill afford&#8221;, McKinsey called for urgent reform of the financial system to free up capital, attract new investors &#8211; such as mutual and pension funds, and overseas infrastructure funds &#8211; and new mechanisms to facilitate investment.

Its study was critical of restrictions on insurance, pension and provident funds, a shallow bond market and constraints on external commercial borrowings.

A separate study by the Federation of Indian Chambers of Commerce and Industry and Deloitte, the audit firm, earlier this week highlighted similar concerns. It said the country&#8217;s task of mobilising $320bn for infrastructure over the next three years was severely hampered by a lack of policy clarity, cost escalations and limited long-term finance.



FT.com / Asia-Pacific / India - Infrastructure deficit chokes India


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## jetLi

Nihat said:


> *Software major Sapient has laid off 500 employees *
> 
> 
> New Delhi: Software major Sapient has laid off 500 employees at offices in Bangalore, Noida and Gurgaon.
> 
> Sapient PR confirmed to CNN-IBN that employees have been laid off from Sapient's offices in Bangalore, Noida and Gurgaon.
> 
> No notice was given to the laid off employees.
> 
> Armed guards were deployed around the office on Friday and Saturday and employees were not allowed to enter the premises in Gurgaon.
> 
> A few months back the US-based IT company had laid off 160 employees. Sapient employs about 6,000 people in India.
> 
> Sources say Sapient India Managing Director Sandeep Dhar had sent an e-mail to employees a few months ago after 160 employees were laid off.
> 
> In the e-mail, Dhar had admitted that decision to lay-off employees was taken so that the company could respond better to current and future market opportunities.
> 
> Software giant Sapient lays off 500 employees in India



good news, India coding job of none business


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## linkinpark

jetLi said:


> good news, India coding job of none business



What do you mean?. Can you be more clear.


----------



## Nihat

Indian financial system resilient, says former IMF chief Camdessus

http://economictimes.indiatimes.com/...ow/4297370.cms

Heres a big pat for the Indian financial system and it comes from none other than Michel Camdessus who was the chief of International Monetary Fund (IMF) for 13 years including 1997-98 when Asian currency crisis rocked the global economy. The Indian financial system seems to have absorbed much less toxic assets as compared to a number of other countries, he said on Saturday.

Mr Camdessus, who is now the special envoy of French President Nicholas Sarkozy for G20 deliberations on the global economic crisis, emphasised that the Indian financial system was resisting the global economic crisis well and he found no major concern.

The French financial expert is now on a visit to India and he has met Planning Commission deputy chairman Montek Singh Ahluwalia to co-ordinate the strategies of the two countries for the forthcoming meeting of the G 20 which includes finance ministers and central bank chiefs of the top economies of the world including the US, Japan, UK, France, Germany, Russia and China. Scheduled for April 2, the next meeting of G 20 is to discuss strategies for sustained recovery from the global economic slump through a multi-pronged approach.

Mr Camdessus appreciated the governments efforts to inject more capital into (public sector) banks and there was no particular are of concern. The situation is reasonably under control, he noted. That should sound like music to financial sector regulators and the government, apart from Indian finance sector players. The appreciation is significant in view of the weakness seen in the financial sector in many developed countries including the US, the UK, Germany and France.

Mr Camdessus, who was also the governor of Bank of France, said that India and France are planning to work together in brining more transparency into tax havens. India views tax havens like Cyprus, Isle of Man and British Virgin Islands as a potential source of threat in terms of tax evasion, money laundering and terror financing.

France feels that this is reforms time for the finance sector globally and this is a good window to infuse transparency on tax havens. Recently Switzerland has agreed to scrap its banking secrecy laws to bring them in line with G20 norms. Similar efforts are being pursued by the G20 in the case of Singapore too.

The former IMF chief measures to erect protectionist trade barriers should be resisted. There is a wave of populist pressure across the globe to bring in protectionist measures and France will work with India in ensuring that governments dont succumb to such demands.

Mr Camdessus said governments should return to fiscal discipline as soon as possible. Persisting with huge government borrowing and spending to counter economic slowdown would not be sustainable in the long term. The will either lead to major bankruptcies and spurt in inflation which could be damaging to everybody, he added.

Mr Camdessus said the IMF should work closely with the Forum for Financial Stability to provide early warning to prevent the kind of crisis which the world is suffering now. The G20 is planning to push for changes in IMF to ensure that the institution gears up to tackle modern challenges.


----------



## Nihat

Forex reserves at $249 bn on March 13

http://economictimes.indiatimes.com/...ow/4292968.cms

Quote:
Foreign exchange reserves rose $1.4bn during the week ended March 13, reversing the trend of the past five weeks, during which reserves dipped by close to $4bn. This was partly due to revaluation of non-dollar reserves in assets and partly due to dollar purchases by the central bank.

According to the latest figures released by the Reserve Bank of India, total foreign exchange reserves including gold and SDR (currency with the International Monetary Fund- IMF) rose $249m to touch $249.3 billion.

While foreign currency assets rose $1,432m, the value of gold in reserves rose $862m during the week largely on account of the sharp rise in global bullion prices. Reserves with the IMF dipped $5m. The value gold and SDR in reserves however remained unchanged during the week.


----------



## Nihat

Source - HT e paper.


----------



## jetLi

linkinpark said:


> What do you mean?. Can you be more clear.




I mean that, India 's software industry just carry on the america and euro contract, infact just doing the Coding job.

In the software industry , it is the end-level.


----------



## linkinpark

jetLi said:


> I mean that, India 's software industry just carry on the america and euro contract, infact just doing the Coding job.
> 
> In the software industry , it is the end-level.



Of course, software industry is a service industry and has clients and contracts from US and Europe since that is where a number of companies are there which require different software needs. Remember, India also has software clients in Japan, Brazil and even China. It is just a coding job but needs brains to do that coding job which is what is being done by Indian software companies.


----------



## LCA

Nano to debut today

*Nano to debut today*

Published on Mon, Mar 23, 2009 at 09:26 , Updated at Mon, Mar 23, 2009 at 11:41
Source : CNBC-TV18

The worlds cheapest car will make its commercial debut today. It has been a long journey for Tata Motorsfrom warding off critics who scoffed at the idea of the Nano, to being caught in a political battle at Singurthe small car has come a long way. Possibly, this is a car that had the most tumultuous journey to reach its market. Now, the launch of the Nano is perhaps the most watched event in the auto world.

There is quite a lot of excitement as all eyes are on the launch of the worlds cheapest carTata Nano. The car will be launched in Mumbai on Monday. The two most important things that everyone has been looking forward to is, the actual price of the car and the cost of the car on road. We have been telling you that it would range anywhere between Rs 1.3 to Rs 1.8 lakh or 1.9 lakh depending on the variants, since it will come in three variants. Of course, the actual price will be announced on Monday.

Other than this, the actual booking procedure of the car is going to be announced and that is critical, as millions of people are waiting to buy this car. But the hitch is its limited volumes currently; we understand that the wait could be quite long as there are production constraints. *The company plans to reach a 70,000 units target only by the end of April 2010. Currently, they have just managed to build 800-900 or 1,000 cars so far. There will also be a booking amount for the car and expected anywhere between Rs 50,000-60,000.* But even after the booking amount, the real question would be that how long would a customer have to wait to get the car in his hands. That is going to be crucial.

All this queries are expected to be answered on Monday by the Tata Motors management. *The real test would be whether this Rs 1 lakh car will be fuel efficient, even though the company says that it would give a fuel efficiency of about 23 km/liter, quality, fit, finish, features, along with the running and maintenance cost will also be critical.*


----------



## LCA

Cricinfo - IPL permitted to seek new broadcast deal

*IPL permitted to seek new broadcast deal*

Cricinfo staff

March 23, 2009

The Bombay High Court has cleared the way for the BCCI to seek a new broadcast deal by rejecting a plea from Sony TV, which had challenged the Indian cricket board's decision to terminate its five-year deal to televise the IPL.

The BCCI has, meanwhile, signed a fresh broadcast rights deal worth a reported US$1.2 billion with World Sports Group (WSG), which in turn has been engaged in discussions with various broadcasters for a new IPL deal. It has been reported that Sony is among those who are now trying to negotiate a new deal with WSG and sources have indicated that ESPN-Star Sports (ESS) and NDTV, the New Delhi-based media organisation, are also in discussions to telecast the IPL.

It is unclear, though, if Multi Screen Media Pvt Ltd, which held the IPL contract under the Sony umbrella, will approach the Supreme Court to appeal against Monday's decision.

Sony had sub-licensed the IPL's subcontinent broadcast rights last year from WSG, who had won an original ten-year bid for US$1.02 billion, but moved the court after receiving a notice of termination from the BCCI, which runs the IPL. The Indian board claimed that Sony had repeatedly violated the integrity of telecast by prematurely cutting to breaks and inserting commercials during a live match, replays and other on-field action.

The court placed a freeze on IPL signing another broadcast deal and in the meantime, attempts between Sony and the IPL to negotiate an out-of-court settlement failed after the broadcaster agreed to the Indian board's commercial terms but sought a "non-terminable contract".

IPL officials were unavailable for a reaction. Rohit Gupta, president of network sales at Multi Screen Media Pvt Ltd said he could not discuss "anything at all" regarding the issue.

The IPL's relationship with Sony had turned rocky last month after the IPL lost out on a US$31.16 million deal because of a dispute between Sony and Big TV, a direct-to-home provider. Ties between the two dipped further after the subsequent resignation of Kunal Dasgupta, the then Sony CEO, who was known to be close to Lalit Modi, the IPL chairman. Sony is also understood to have been keen on renegotiating the financial terms of its contract with the IPL and had concerns about the tournament's revised dates and some of the venues that were being considered.


----------



## Gabbar

*Airbus to set up manufacturing base in India in 3-4 yrs*

NEW DELHI: Major aircraft maker Airbus Industrie plans to have a manufacturing base in India in the next three-four years, a top company official 
said on Tuesday. 

"We don't want to copy what we have done in China (having an aircraft manufacturing base there). China started more on the manufacturing side, but the biggest development in India was on engineering and services sector. 

"... But we plan to develop manufacturing base in India in the next three to four years," Eric Zenin, Head of Airbus Business Development and International Cooperation, told reporters here. 

Airbus Director International Cooperation Swaminathan Dwarakanath said the company projected an expenditure of about USD 1 billion in India over the next 10 years if it found the "right partners and the right projects" as part of its globalisation plans. 

Maintaining that Airbus Industrie planned to shift part of its operations out of Europe, its Executive Vice President Christian Scherer said it planned to build up to 20 per cent of aero structures and 30 per cent of engineering sub- contracting offshore by 2020 and "India will get a large chunk of this business". 

He said Airbus Industrie already had five engineering centres outside Europe -- two in the US and one each in Bangalore, Beijing and Russia. 

The company currently has 347 aircraft of different make on order from India where it has a marketshare of 68 per cent. It predicts 992 aircraft orders till 2026 from India, including about 60 large sized ones like the jumbo A-380s. 

Asked whether any orders from India were cancelled due to the economic slowdown, Scherer said a few of Kingfisher Airlines order for A-340s were shifted to Nigeria. "We are carrying out some adjustments with some customers worldwide, redirecting and rebooking aircraft orders," he said. 

Referring to business in India, he said state-owned Hindustan Aeronautics Limited was building a large number of aircraft doors, mainly for A-320s. 

"In the next couple of years, 50 per cent of these doors will be produced by HAL," he added. 

Dwarakanath said the engineering centre at Bangalore was already developing advanced capabilities in modelling and simulation, including areas like flight management systems, aero dynamics and digital simulation. 

Indian IT firms were working on "high-end activities" like crash worthiness analysis of the A-380s, their wings and electronic harness design for the A-350, which is yet to come out of the production line, he said. 

Scherer said Airbus' parent company EADS had set up a joint venture with AI to establish a Maintenance, Repair and Overhaul (MRO) facility in India. 

"At present, it is going through regulatory approvals. It does not matter whether it is part of the offsets but is a small part of our overall comprehensive strategy in India," he added.


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## jetLi

LCA said:


> Nano to debut today
> 
> *Nano to debut today*
> 
> Published on Mon, Mar 23, 2009 at 09:26 , Updated at Mon, Mar 23, 2009 at 11:41
> Source : CNBC-TV18
> 
> The worlds cheapest car will make its commercial debut today. It has been a long journey for Tata Motorsfrom warding off critics who scoffed at the idea of the Nano, to being caught in a political battle at Singurthe small car has come a long way. Possibly, this is a car that had the most tumultuous journey to reach its market. Now, the launch of the Nano is perhaps the most watched event in the auto world.
> 
> There is quite a lot of excitement as all eyes are on the launch of the worlds cheapest carTata Nano. The car will be launched in Mumbai on Monday. The two most important things that everyone has been looking forward to is, the actual price of the car and the cost of the car on road. We have been telling you that it would range anywhere between Rs 1.3 to Rs 1.8 lakh or 1.9 lakh depending on the variants, since it will come in three variants. Of course, the actual price will be announced on Monday.
> 
> Other than this, the actual booking procedure of the car is going to be announced and that is critical, as millions of people are waiting to buy this car. But the hitch is its limited volumes currently; we understand that the wait could be quite long as there are production constraints. *The company plans to reach a 70,000 units target only by the end of April 2010. Currently, they have just managed to build 800-900 or 1,000 cars so far. There will also be a booking amount for the car and expected anywhere between Rs 50,000-60,000.* But even after the booking amount, the real question would be that how long would a customer have to wait to get the car in his hands. That is going to be crucial.
> 
> All this queries are expected to be answered on Monday by the Tata Motors management. *The real test would be whether this Rs 1 lakh car will be fuel efficient, even though the company says that it would give a fuel efficiency of about 23 km/liter, quality, fit, finish, features, along with the running and maintenance cost will also be critical.*



very good ,
It will be a good choice for the middle class


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## Neo

*India inflation to be near zero for 3 months ​* 
Wednesday, March 25, 2009

NEW DELHI: Monetary policy was key to reviving the Indian economy, with wholesale price inflation set to remain near zero for the next three months, Arvind Virmani, the finance ministrys chief economic adviser, said on Tuesday.

He said economic growth in the fiscal year ending March 31 was likely to be close to 7 per cent after farm data is updated.

Virmani said monetary policy had to work in tandem with fiscal stimulus to lift sagging demand and growth.

In a demand depression, monetary policy is the first line of defence. Whatever we said here (in the half-yearly review report), still applies, Virmani told Reuters in an interview.

Since October, the central bank has cut its key lending rate by 400 basis points. The government has cut factory gate duties and service tax rates to protect growth and jobs.

The government has forecast growth of 7.1 per cent in 2008/09, but private analysts expect it to be lower after some dismal factory output and export data in recent months.


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## Neo

*India may ease monetary policy​*
NEW DELHI: Indias growth is seen slowing to 6.5 percent in the fiscal year that ends on March 31, below official forecast of around seven percent, and there is room for more monetary easing, a senior government official said.

One of the advantages going into next year is that we have a lot of room in the area of monetary policy, Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters on the sidelines of a business function on Tuesday.

That is an area where we still have room, adding that many other countries dont have that headroom as they have lowered their interest rates to near zero.

Since last October, Indias central bank has cut its main short-term lending rate by 400 basis points to stimulate flagging growth. Still, after the latest half percentage point reduction this month, the repo rate stands at five percent leaving scope for cuts.

Ahluwalia said his growth estimate was arrived at after simulating the effect of the global recession, drop in investment, falling exports and lower oil prices, and reflects a sharp fall from nine percent or more rise in the past three years.

The net result of that is that growth will be somewhere around 6.5 percent or something this year, he said.

Economic expansion in Asias third-biggest economy is seen dropping below 6 percent to a seven-year low in 2009/10, a Reuters poll showed last week.

The global economy is expected to shrink as much as 1 percent this year  its first contraction since World War II  below a January projection of around 0.5 percent growth, the International Monetary Fund said last week.

In the rest of the world it is very clear 2009 will be worse than 2008 and those are calendar years. Our objective is for the fiscal year 2009/10, we should try to do at least as well as we did in 2008/09, he said. Ahluwalia said there may be a need for another fiscal stimulus package.

Indias fiscal deficit is expected to be around 10 percent of GDP, one of the highest in the world and analysts expect it to rise more as tax revenues fall due to the economic slowdown.

I would still argue that in spite of the high fiscal deficit there is a case for an additional fiscal stimulus in the present circumstances for the next year, he said.


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## Nihat

*Inflation for week-ended March 14 at 0.27% vs 0.44%*


The wholesale price index (WPI) is very close to the 0% mark. Inflation for week ended March 14 came in at 0.27%  still in positive terrain  compared with 0.44% week on week (WoW)

Inflation for week-ended March 14 at 0.27% vs 0.44%

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## Nihat

*IBM plans 5,000 lay offs, moves jobs to India*

Press Trust Of India



New York: International Business Machines Crop plans to lay off about 5,000 US employees, with many of the jobs being transferred to India, a media report said on Thursday.

The technology giant has been steadily building its work force in India and other locations while reducing the number of employees based in the US.

Foreign workers accounted for 71 per cent of Big Blue's nearly 4,00,000 employees at the start of the year, up from about 65 per cent in 2006, the Wall Street Journal said.

The latest round of cuts target the company's global business-services unit, which does everything from running corporate data centers to managing human resources for clients like Procter and Gamble, the paper reported.

Some of the jobs are being eliminated because customers have ended contracts or the company has automated tasks.

But employees were quoted as saying in many cases that they have been training IBM workers from India to do work that will now be moved overseas.

However, an IBM spokesman, the paper said, declined to comment.

The company has said it expects to spend about $300 million to $400 million on severance-related charges this year, with most of it in the first half. 

IBM plans 5,000 lay offs, moves jobs to India


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## shrivatsa

didnt find any technology thread so posting it here,

Indian Geek Develops 'Sixth Sense' Device

To briefly describe what this sixth sense is all about, we need to understand how the current dissemination of information from current electronic devices takes place. Most of the information from computers, mobile phones and other devices are confined to screen or paper - if we decide to take a print. However, the sixth sense, according to Mistry, bridges this gap "bringing intangible digital information out into the tangible world, and allowing us to interact with this information via natural hand gestures". The concept falls under "wearable computing" -- the same category under which the ubiquitous mobile phone falls as well.



The equipment list for the sixth sense might seem a tad crude, but it does its job quite well. It comprises a pocket projector; mirror and web camera bundled in a wearable pendant-like mobile. With the help of the projector, you can turn any material surface into a touchscreen. The camera is used to "see" the hand gestures. The user will however need to wear color-coded gloves on the index finger and the thumb so that the hand movements can be recorded and decrypted. 



Some of the interesting hand gestures include drawing a square frame which will trigger a command to take a picture, drawing the @ sign will let the user access his email. You can even write e-mails with the help of the projector, which projects an image of a virtual keyboard so that you can type. All this costs around $350 (Rs. 17,000) to build - which is not a bad for something as futuristic as this!



Mistry has been approached by a couple of Indian companies who seem to be interested in his project. However, he wants the technology to be a little cheaper before it comes to India

Techtree.com India > News > Gadgets > Indian Geek Develops 'Sixth Sense' Device

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## NSG_BlackCats

*India emerges 2nd in medical tourism race*

India spends 1.2% of its GDP on health, but takes care of foreign patients  the country ranks second in medical tourism. In 2007, Indian 
hospitals treated 4.5 lakh patients from other countries against topper Thailand's 12 lakh. 

A two-year study by healthcare researchers Deloitte revealed there's always been an inflow of patients from neighbouring countries and West Asia, but now there's a significant rise in patients from the US, UK and Europe. 

Cheaper treatment is a huge attraction and, during recession, that's a big fact. But other factors, too, have contributed to the growth of medical tourism in India. "Indian clinical and paramedical talent is globally appreciated and with JCI accreditation of some hospitals, international standard is proven. Third-party intervention through health insurance has also given it a boost," said Vishal Bali, CEO, Wockhardt Group of Hospitals. 

"Thailand, which revolutionized medical tourism, is more into cosmetic surgery; India focuses on cardiac, neurological or orthopaedic problems," Bali said. 

Another significant factor is long patient waiting list, especially in the UK and Europe. The per-capita healthcare expenditure in Korea is $720 against India's $94. Treatment cost is lowest in India  20% of the average cost incurred in US; in Singapore, Thailand and South Africa, it's 30% of the US cost. 

Medical tourism showcases the potential of Indian healthcare sector to the world which dreaded India for the incidence of AIDS, tuberculosis, cancer, malaria and diabetes. 

*Link*

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## duhastmish

NSG_BlackCats said:


> *India emerges 2nd in medical tourism race*
> 
> India spends 1.2% of its GDP on health, but takes care of foreign patients  the country ranks second in medical tourism. In 2007, Indian
> hospitals treated 4.5 lakh patients from other countries against topper Thailand's 12 lakh.
> 
> A two-year study by healthcare researchers Deloitte revealed there's always been an inflow of patients from neighbouring countries and West Asia, but now there's a significant rise in patients from the US, UK and Europe.
> 
> Cheaper treatment is a huge attraction and, during recession, that's a big fact. But other factors, too, have contributed to the growth of medical tourism in India. "Indian clinical and paramedical talent is globally appreciated and with JCI accreditation of some hospitals, international standard is proven. Third-party intervention through health insurance has also given it a boost," said Vishal Bali, CEO, Wockhardt Group of Hospitals.
> 
> "Thailand, which revolutionized medical tourism, is more into cosmetic surgery; India focuses on cardiac, neurological or orthopaedic problems," Bali said.
> 
> Another significant factor is long patient waiting list, especially in the UK and Europe. The per-capita healthcare expenditure in Korea is $720 against India's $94. Treatment cost is lowest in India  20% of the average cost incurred in US; in Singapore, Thailand and South Africa, it's 30% of the US cost.
> 
> Medical tourism showcases the potential of Indian healthcare sector to the world *which dreaded India for the incidence of AIDS, tuberculosis, cancer, malaria and diabetes.*



Ah enough alright - dude - health care is horrible here . we need to do something serious about it .
And yeh we lead in most of these diseases : AIDS, tuberculosis, cancer, malaria and diabetes. because we get most number of cases and people dying with these desease.
A few few private good healthcare center - dont prove a damn thing.
Reality is - health care is hopeless.
I went to indore - a few days back - and on the way - i was sitting in my car - 2 kids came all nangu pangu - they didnt have no cloth to wear. i asked the shop keeper - about them- he said they got aids in their family so nobody touches them.
I did my bit by calling up an NGO. but there are lacs of cases like this - Healthcare scene is horrible here.

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## NSG_BlackCats

duhastmish said:


> Ah enough alright - dude - health care is horrible here . we need to do something serious about it .
> And yeh we lead in most of these diseases : AIDS, tuberculosis, cancer, malaria and diabetes. because we get most number of cases and people dying with these desease.
> A few few private good healthcare center - dont prove a damn thing.
> Reality is - health care is hopeless.
> I went to indore - a few days back - and on the way - i was sitting in my car - 2 kids came all nangu pangu - they didnt have no cloth to wear. i asked the shop keeper - about them- he said they got aids in their family so nobody touches them.
> I did my bit by calling up an NGO. but there are lacs of cases like this - Healthcare scene is horrible here.



This is about foreigners coming to India for treatment. Everyone knows the amount of money our govt spends on heath care, it is pathetic. Please kindly read before posting your reply.


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## duhastmish

frenchise of foreign hospitals. Take most money back. and more over most infrastructure come from outside. i think generate less $ on helthcare than we spend rupees in importing -infrastructure and medicines!


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## Neo

*India plans borrowing to boost economy​*
NEW DELHI: India said Thursday it would borrow nearly $50 billion in the first half of the coming fiscal year  two-thirds of its total borrowing plan  to spur the economy, warning of tough times ahead.

The decision to frontload government borrowing in the first half of the financial year ending March 2010 comes as Asias third-largest economy is growing at its slowest pace in six years. Growth moderation might be steeper (in the coming financial year) than we had thought earlier. I believe 2009-10 is going to be a more challenging year than 2008-09, Reserve Bank Governor Duvvuri Subbarao said. The plan to sell bonds worth 2.41 trillion rupees ($47.4 billion) in the first half of the coming financial year is part of a record 3.6 trillion rupees of borrowing set for 2009-10, Economic Affairs Secretary Ashok Chawla said.

The announcement came after a meeting with central bank officials in New Delhi. If you want to inject stimulus into the economy, it makes sense to front-load it and do it in the first half of the year, Dharma Kirti Joshi, principal economist at Crisil ratings agency, told AFP.


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## duhastmish

Yeh polticiams need money for their elections . bloody rascals. why put us in debt. they promise rice 3 rupee kg and Atta 2 rs kg - this money wont come from their pocket it will go from our pockets.
This debt will be charged from our pocket. Are we goign back to dark ages of Indian economic history?


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## Proud2Indian

duhastmish said:


> Yeh polticiams need money for their elections . bloody rascals. why put us in debt. they promise rice 3 rupee kg and Atta 2 rs kg - this money wont come from their pocket it will go from our pockets.
> This debt will be charged from our pocket. Are we goign back to dark ages of Indian economic history?



There is nothing new in this...we are running the deficit based economy...as for the poll promise thats the state issue...nothing to do with govt borrowing which is part of central govt.....as for Indian economics ...don't worry now that Indian have tasted blood....it will be hard to turn back the clock even if left come to power they can stop\slow the reforms ...but nobody can turn the clock back


tx


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## Nihat

*Forex kitty swells $5.1 bn to $254 bn*
28 Mar 2009, 0006 hrs IST, ET Bureau


MUMBAI: A weakening of non-dollar assets, such as the euro, yen and the Great Britain pound, gave the countrys forex reserves a $5.1-billion
boost in the week ended March 20. These assets had to be revalued as the dollar gained sharply against these currencies.

According to the latest figures released by the Reserve Bank of India (RBI), total foreign exchange reserves, including gold and SDR, rose by $5.1 billion to $253.8 billion. While foreign-currency assets swelled by $5,081 million, the value of gold and SDR (special drawing rights)  notional currency with the IMF pegged to the dollar, euro, pound and the yen  remained unchanged during the week. The reserves with the IMF increased by $21 million during the week.

According to the updated money-supply figures, the total stock of money in the system amounted to Rs 46,55,831 crore as on March 13, increasing by Rs 13,299 crore over the previous fortnights level. While currency with the public and demand deposits grew by Rs 19,344 crore and Rs 1,398 crore, respectively, term deposits dipped by Rs 8,184 crore.

At current levels, the year-on-year growth in money supply works out to 19.7%, lower than the growth in the corresponding period a year ago. However, this is still higher than the enhanced target of 19% predicted during the
quarterly review of the monetary policy in January.

In other developments, both central and state governments have kept their ways and means advances (WMA) account vacant. Under this facility, the government resorts to temporary borrowings to meet its revenue mismatches.


Forex kitty swells $5.1 bn to $254 bn- Finance-Economy-News-The Economic Times


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## NSG_BlackCats

*Reliance's KG gas output to begin in 2 days*

MUMBAI: Reliance Industries Ltd is set to begin gas production from its deep-sea field off the country's east coast in the next 24 to 48 hours, the 
Economic Times reported on Monday, without citing a source. A company spokesman reached by Reuters declined to comment on the report. 

On Friday P.M.S. Prasad, the chief executive of Reliance's oil and gas business, told reporters the company plans to raise output from the deep-sea field in the Bay of Bengal by 10 mmscmd a month, reaching peak production of 80 mmscmd by the end of this year. 

At peak production, the gas from the D-6 block in the Krishna Godavari (KG) basin is expected to add nearly $2 billion to Reliance's profit, the Economic Times said, citing an unnamed source close to the development. 

Reliance signed deals on Friday with a dozen fertiliser firms to sell about 15 mmscmd of gas from the D6 block from the middle of April. 

*LINK*


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## Nihat

[
*India slumping? World Bank lowers growth rate*

QUOTE]Washington: As the global economy deteriorates sharply, the World Bank has projected a slower 4 percent growth for India in 2009, down from 5.5 percent in 2008, before picking up speed to reach 7 percent in 2010.

World Bank estimates released on Tuesday have reduced its November 2008 projection of 5.8 percent growth for India in 2009 rising to 7.7 percent in 2010.

GDP growth in the developing world as a whole will slow to a projected 2.1 percent in 2009 from 5.8 percent in 2008. But without India and China their growth would grind down from 4.6 percent last year to a complete halt in 2009 before slowly recovering to 2.67 percent in 2010 instead of growing at 2.9 percent and 4.7 percent respectively as predicted earlier.

The Bank has more than halved its November 2008 projection of 4.4 percent growth in developing countries in 2009, reflecting the rapid deterioration of global financial and economic conditions.

The new Global Economic Prospects update also notes that global growth is expected to contract by 1.7 percent this year. This would be the first decline in world output growth since World War II. GDP is projected to decline by 3 percent in OECD countries and by 2 percent in other high-income economies.

The World Bank's baseline forecast predicts growth momentum to turn weakly positive in 2010 as financial-sector consolidation, lost wealth and knock-on effects from the financial crisis continue to dampen economic activity. However, the pace and timing of the recovery is still highly uncertain.

South Asia has been marked down to 3.7 percent growth for 2009 from 5.4 percent anticipated earlier - and down from 5.6 percent registered in 2008. The region's growth projection for 2010 too has been reduced from 7.2 percent to 6.2 percent.

Though terms of trade have moved in favour of the region with the falloff in oil prices, weakening demand in export markets (including burgeoning India-China trade) is being felt sharply, as is a tempering of services exports from India's high-tech centres, as capital spending wanes globally, the update said.

Remittances are anticipated to ease as conditions in host countries falter, albeit with some lag. Capital inflows have diminished, contributing to falloff in investment growth, notably in India. Fiscal support for slowing economies may face constraints in already quite high budget deficits.

[/QUOTE]

India slumping? World Bank lowers growth rate


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## jarnee

Neo said:


> *India plans borrowing to boost economy​*
> The decision to frontload government borrowing in the first half of the financial year ending March 2010 comes as Asias third-largest economy is growing at its slowest pace in six years. Growth moderation might be steeper (in the coming financial year) than we had thought earlier. I believe 2009-10 is going to be a more challenging year than 2008-09, Reserve Bank Governor Duvvuri Subbarao said. The plan to sell bonds worth 2.41 trillion rupees ($47.4 billion) in the first half of the coming financial year is part of a record 3.6 trillion rupees of borrowing set for 2009-10, Economic Affairs Secretary Ashok Chawla said.
> 
> The announcement came after a meeting with central bank officials in New Delhi. If you want to inject stimulus into the economy, it makes sense to front-load it and do it in the first half of the year, Dharma Kirti Joshi, principal economist at Crisil ratings agency, told AFP.



From Macro economic standpoint it makes sense, they are not borrowing they are selling the Bonds.. its different. 

Let me explain - Stimulus to small and medium sectors, public or private makes sense as it injects liquidity to the market, The company's will not close , so jobs will stay safe, more importantly GOI will get funds to inject in infrastructure and other areas which will indirectly help economy $47 Billion is not a big deal, Indian railways revenue is much above that, close to $100 Billion.
If you compare it with US it is minute, they have given a stimulus of $700 Billion


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## Neo

*Indias growth to slow to 5%: ADB​*
HONG KONG: Indias economic growth will drop to five percent this year but the countrys stimulus measures should allow it to rebound to 6.5 percent in 2010, the Asian Development Bank said Tuesday.

The figure is sharply down from 2008, when Indias economy grew by 7.1 percent, the bank said in its annual flagship economic report. While India is not as reliant on exports as other nations in the region that have been battered by the global downturn, the ADBs acting chief economist Jong-Wha Lee, the country faced the problem of a huge deficit.

It is imperative that the central government bring down its deficit in the medium term to a manageable level in order to ensure long-term debt sustainability, he said. Expansionary fiscal policies could impair the confidence of investors unless clear signals are given that the present large deficits are truly temporary.

Indias budget deficit was estimated at 6 percent of GDP in the 2008 fiscal year, up from a target of 2.5 percent, the ADB said. But adding in extra items and the deficits run by individual state governments, the actual figure is estimated to bring the national deficit to 10 percent of GDP.

The ADB said the government should review its tax policy and take a close look at public spending to ensure it is focusing on infrastructure projects and social spending that will boost long-term stable growth. Indias economy grew at its slowest pace in nearly six years in the last quarter of 2008. The government has long said that the country needs double-digit growth to lift hundreds of millions of its people out of grinding poverty.

The ADB said that growth in Asias developing economies this year would fall to 3.4 percent, down from 6.3 percent last year and 9.5 percent in 2007. afp


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## Screaming Skull

Neo said:


> *India&#8217;s growth to slow to 5&#37;: ADB​*
> HONG KONG: India&#8217;s economic growth will drop to five percent this year but the country&#8217;s stimulus measures should allow it to rebound to 6.5 percent in 2010, the Asian Development Bank said Tuesday.
> 
> The ADB said that growth in Asia&#8217;s developing economies this year would fall to 3.4 percent, down from 6.3 percent last year and 9.5 percent in 2007. afp



Well the news in blue is definitely encouraging compared to that in red. Some strong steps have been taken by the present govt to quell the slowdown. This will bear fruit in the future. Just shows that due to our lesser dependence on exports and FDIs the economy will remain largely insulated to the global recessionary trends. 

Hope the Congress party can form a govt without left (CPI-M) support. Then definitely we will see double digit growth by 2012 at least.


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## kaafirslam

With election just round the corner,it might be just a stimulus package in it's own right as you have to purchase vehicles,mobiles,food ,liqour and other stuff so some smart guy should make some money


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## kaafirslam

KG BASIN is a good thing to happen as India can save $10b in forex and use that money for infrastructure educationetc.


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## Hasnain2009

India to fork out $20bn for crisis kitty - India Business - Business - The Times of India

NEW DELHI: India is open to the idea of contributing a total of around $20 billion &#8212; roughly Rs 100,000 crore &#8212; towards increasing the capital base 
of the IMF, the World Bank and the Asian Development Bank (ADB) as part of the global effort to enable these institutions to lend more. 

The contribution, which is likely to be spread out over the next two years, will be in proportion to the quotas or shareholding that India has in these multilateral bodies, sources said. In response to a question on why India had made no commitments of additional resources to the IMF at the G-20 summit in London, unlike its neighbour China, the sources said "we do not wish to make any grand announcements, but we would be willing to contribute to the extent of our shareholding". 

India's quotas in the IMF are currently 2&#37; and that would translate into roughly $10 billion for that institution alone. An equal amount might be needed for the World Bank and ADB when the exercise to enhance their capital base and rebalance shareholdings takes place, the sources said, adding that these were just preliminary estimates. 

The amounts involved could be larger if the reallocation of quotas happens before the contributions are to be made. The money given to the IMF will initially be part of the new arrangement for borrowing (NAB) that the body is now running on an ad hoc basis, but will eventually be transformed into an enhanced equity base. 

China announced at the G-20 that it would put in $40 billion as its contribution to the NAB. 

The reallocations of quotas in the IMF has been a vexed issue for long with Europe and the US having traditionally been reluctant to loosen their grip on these institutions, but the reallocation earlier expected to happen around 2013 has now been advanced to January 2011. 

While India has approached the World Bank for an extra $5.2 billion in lending over the next two years &#8212; the bulk of it, $3.2 billion, for recapitalization of public sector banks &#8212; there was no immediate plan to hike borrowing from the ADB, the sources said. India is already the largest borrower from the ADB and there was little headroom for any more till the bank's capital base is expanded, they said. 

The increase in the ADB's equity has more or less been accepted by the 64 member countries, but would need to be formally approved by the ADB's board, and also at the annual general meeting in May this year. Once that happens and the ADB has more resources, India could consider seeking more from it, the sources said. 

On another key decision at the G-20 summit, to "name and shame" countries that behave as tax havens and do not comply with transparency norms on tax matters, the sources 

said while the idea clearly was to take some sort of action against them if they refused to fall in line, "that stage has not yet come".


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## Hasnain2009

India to seek $5.2 billion from World Bank 

London (IANS): Assured a greater say into the affairs of multilateral lending institutions, India will seek additional assistance of $5.2 billion from the World Bank for its financial sector and infrastructure projects, officials said. 

The main component of this assistance is for recapitalisation of state-owned commercial banks over the next two to three years, Indian officials here said. 

The rest of the amount is for infrastructure finance companies and power grid corporations. 

India normally gets assistance worth $3 billion from the World Bank annually of which half is given in concessional form. 

At the G20 summit that concluded on Thursday, Prime Minister Manmohan Singh was assured that developing countries like India will have a higher voting right in institutions such as the International Monetary Fund and the World Bank. 

Leaders at the G20 on Thursday pledged a $1.1 trillion package alongside measures for a tighter regulation of the international financial system to help bring the world out of recession. 

The measures were also designed to prevent future shocks. 

The leaders agreed to negotiate a speedy conclusion of the Doha trade round and put some $250 billion more into trade finance &#8212; key demands from India, represented by Mr. Singh. 

Out of the $1.1 trillion pledged for various institutions, $250 billion will be given to the IMF to lend at cheaper rates to needy countries in the form of special drawing rights (SDRs). 

The leaders agreed to another major Indian demand by deciding to sell IMF gold reserves to raise $6 billion that will go toward helping out the world's poorest countries with cheap loans over the next two to three years. 

Besides India, Britain and the U.S., the G20 comprises Argentina, Australia, Brazil, Canada, China, France, Germany, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey and the EU.


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## Screaming Skull

*Hyderabad airport among the world's top 10*​
March 30, 2009

Though only a year old, the GMR-group promoted Rajiv Gandhi International Airport in Hyderabad has already etched its name along with some of the world's best.

According to the results of a survey conducted by the Airport Council International, RGIA was rated the second most service-oriented airport in the 5-15 million passenger per annum category.

It was also named as the fifth most service oriented amongst the world's top ten airports by scoring 4.41 on a 1-5 scale in overall passenger satisfaction.

The airport celebrated its first anniversary on March 23, 2009. 






*A view of the international check-in area.*​
The 105,300 sq.m. terminal has the capacity to handle 12 million passengers per annum. 





*A view of the arrival lounge.*





*ATC Tower with Technical Building.*





*Air India international lounge.*





*A view of the ticket counters. *





*Domestic baggage carousel.*





*Domestic check-in counters.*





*Duty Free Store at international departure - 1.*​


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## Screaming Skull

*A side view of the passenger terminal building from the Air Traffic Control.*





*Self check-in information kiosks.*





*Front view of the passenger terminal building.*





*IIFA bar at domestic departure area.*





*International departure area.*





*ARFF Building with fire fighting Panthers.*





*Hard Rock Cafe at international departure area.*​


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## Screaming Skull

*How Reliance can save India $9 billion!​*
April 2, 2009

India will save $9 billion in its oil import bill with the beginning of production from Reliance Industries' eastern offshore KG D-6 fields, said Petroleum Secretary R S Pandey.

"Yesterday (Wednesday) evening, as RIL has informed us, production has begun," he told reporters.

The initial output was at 2.5 million standard cubic metre and will gradually increase. "Tomorrow (Friday), it will become five million standard cubic metre per day," Pandey said. 





*Reliance Industries' KG-D6 floating production storage and offloading vessel is seen off the Bay of Bengal.*​
The first of the 15 fertiliser plants that will get all of the initial output is expected to get the gas in 3-4 days time, he said, adding, "The most distant plant will get the gas in about 15 days. In four months time, the production will be 40 mmscmd and in about a year's time it will be 80 mmscmd."

"It will reduce our oil import bill by about $9 billion annually during peak production at current prices," Pandey said, adding that gas sales over the 11 year-life of the field will generate $42 billion in revenue.

The government's share in the production would amount to a minimum $14 billion, he said. 





*Reliance Industries' KG-D6 control and raiser platform is seen off the Bay of Bengal.*​
Reliance Industries created history when natural gas from its deep-sea Krishna Godavari basin fields flowed to surface on Wednesday. This feat, which was achieved in just seven years, will transform India's energy landscape.

"Natural gas production from the wells started at 1700 hours Tuesday and it reached the onland receiving facility at Gadimoga in Kakinada district of Andhra Pradesh this (Wednesday) morning," a source in know of the development said.

It took 13-14 hours for the gas to travel from the sea-bed to the onshore facility. "The flare (at Gadimoga) lit up at 0920 hours," the source said.

A company spokesperson confirmed the start of gas production, but did not give details. "We will be issuing a statement shortly," he said. 





*The control room of Reliance Industries' KG-D6 facility located in Andhra Pradesh.*​
Reliance took just seven years from the date of discovery to begin gas production from the deep-sea KG-D6 block as against the global practice of a minimum nine years.

The gas would boost power supply from idle electricity generators starved of fuel and produce cheaper urea for agriculture.

"It is a landmark in the history of oil and gas production. World-over, this has created a new benchmark for deep-sea developers," said Director-General of Directorate General of Hydrocarbons V K Sibal. 





*Reliance Industries' KG-D6 facility located in Andhra Pradesh.*​
The $8.835-billion (Rs 441.75 billion) project will double domestic natural gas production when the field hits its peak output of 80 million cubic meters per day in 2010.

It will wipe out the fuel deficit at urea-making fertiliser plants and meet half of the 36 mmcmd gas shortfall in power plants. Reliance will produce enough gas to meet about a third of the UK demand.

"Whenever I have interacted with officials from global oil majors like Chevron and BP, they have been highly appreciative of the project management skills of Reliance," Sibal said. 





*Reliance Industries' KG-D6 facility located in Andhra Pradesh.*​
The gas output will start at 10 mmcmd and rise by the same volume every month to reach 40 mmcmd by July-end.

"Each well is capable of producing 5-6 mmcmd gas," Sibal said.

"Our endeavour is to quickly ramp it up to peak 80 mmcmd. We are targeting the peak-out by the year-end (2009 calendar year)," the company's head of oil and gas business, P M S Prasad, had stated last week. 





*Reliance Industries KG-D6's floating production storage and offloading vessel is seen off the Bay of Bengal.*​
If achieved by 2009-end, the peak output will come a year earlier than previously planned. Of the 18 wells drilled in the Phase-I of the project, six would be put on production initially and the remaining would be hooked up one by one.

Besides doubling the nation's domestic gas production, KG-D6 gas would displace costly naphtha or imported LNG as fuel at power and fertiliser plants. 





*RIL Chairman Mukesh Ambani holds a jar containing the first crude oil produced from the KG-D6 block.*​
At $4.2 per million British thermal unit, KG-D6 gas is 25 per cent cheaper than the fuel produced by UK's BG-operated Panna/Mukta and Tapti fields in western offshore and 20 per cent cheaper than liquefied natural gas imported on long-term contracts.

'KG-D6 gas will replace about seven per cent of India's oil consumption in 2009-10, rising to 14 per cent in the following three years,' Goldman Sachs said recently in a report. 





*Reliance Industries' petrochemical plant at Jamnagar, western India.*​
Besides, it would also reduce the Asia's third-largest oil consuming nation's current account and fiscal deficits and support economic growth.

'All else being equal, the current account deficit could improve by 0.2 per cent of GDP in 2009-10, and progressively go higher to an average improvement of 0.6 per cent of GDP in 2010-11 to 2013-14,' the report said.


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## Screaming Skull

*Inflation at 0.31%; deflation risk persists​*
April 2, 2009

Inflation rose marginally to 0.31 per cent for the week ended March 21 as prices of certain food items such as tea, gur, aerated water and imported edible oil went up.

Inflation as measured by movement in wholesale prices was 0.27 per cent for the week ended March 14 and 7.8 per cent in the corresponding period a year ago.

The price of blended tea went up by 48 per cent, while packaged tea and aerated water became expensive by 22 and 10 per cent, respectively.

Among other items which became dearer were soft drinks, oil cake, bajra, condiments and spices, while among non-food items cement, rubber, plastic products and PVC fittings became expensive.

Inflation is close to negative territory, something that was witnessed only in the 1977-78.

Soyabean, niger seed, raw rubber, groundnut, mustard seed and raw cotton too became dearer. On the other hand, fruit and vegetables, barley, jowar, raw silk, khandsari, salt, mustard and coconut oil became cheaper.

Similarly, prices of furnace oil, textile items, hair oil, steel ingots and bars went down.

Meanwhile, inflation for the week ended January 24 has been revised downwards from 5.07 per cent to 4.7 per cent.

Despite declining inflation, prices of commodities have not really dropped. Arvind Virmani, chief economic adviser to the finance ministry, said a week ago that the retail price-based inflation, which is ruling above the wholesale price index, will come down with a lag but would not fall as much as the rate of rise in wholesale prices is falling.

"I expect consumer price index also to come down with a lag but I don't think it will go down to a level we see in the WPI," Virmani said.

He said that he does not expect wholesale price index (WPI) in March 2010 to be lower than March this year. "We have been saying that industrial growth is weak and inflation is coming down. That has certain implications for the policy, which the Reserve Bank of India will take account for," Virmani added.

After a year of spiraling prices, rising inflation, India might be heading for deflation, say economists. Some economists insist that this is dis-inflation and not deflation. So what is deflation and why is it bad?

*What is deflation and why is it bad for the economy?*

Deflation is a fall in the price of goods and services. Deflation occurs when the inflation rate falls below zero per cent. This is the opposite of inflation.

When the inflation rate is negative, the economy is in said to be in a deflationary period.

*Why does deflation happen?*

A fall in spending -- it could be personal spending or a cut in government expenditure -- leads to deflation. The decline in the supply of money and credit thus leads to deflation.

So, if money-supply decreases; supply of other goods increases, demand for money rises, and the demand for other goods slips, it is deflation. 

*What are the consequences of deflation?*

Deflation leads to a lower level of demand in the economy. It increases the real value of money. It also increases unemployment.

In a deflationary environment, those sectors with a high proportion of variable costs are likely to benefit from falling input prices, according to Goldman Sachs.

*What could happen if India slips in deflation?*

India would see deflation or reduction in general price level from next month due to slackening demand, according to financial services firm Goldman Sachs said.

"We expect yearly headline WPI inflation to fall rapidly below 1 per cent in March. And enter a period of deflation beginning in April, which could last till end-2009 due to not only continuing demand destruction but also a sharp step-up in the base," it said in a research report.

"There will be negative inflation for a few weeks in the first quarter of next fiscal, driven largely by higher base effect but we do not expect a pronounced deflationary trend in the economy," Dun and Bradstreet chief operating officer Kaushal Sampat said recently. 

*Is deflation good for you as prices are falling?*

A fall in the prices may sound good for consumers. But it is not actually good. The lack in demand may push companies to further lower prices.

This can lead to a situation where the prices of product fall bellow the cost of manufacturing a product. This in turn forces the companies to cut production, slash jobs and shut down business till demand picks up. This worsens the situation.

*Is deflation here to stay?*

Deflation is not likely to last long. The monetary and fiscal stimulus measures of the government is likely to boost demand in the long run. In 2010, however, Goldman Sachs expects inflation to come back due to both a gradual pick-up in demand, and conversely, a low base from 2009.

It further said that the Reserve Bank could slash cash reserve ratio (CRR) for banks by 150 basis points by mid-2009 to provide liquidity into the system.


----------



## Nihat

World's freezing pay but Indians may get 11 pc hike


Bajaj claims to launch world's most fuel-efficient car


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## Screaming Skull

*India to see highest salary hikes in Asia Pacific region*​
April 07, 2009

India is expected to see the highest salary increases among nations in the Asia-Pacific region, of around 10.8 per cent this year, due to the huge demand for talent in the country, despite the global economic crisis severely impacting overall wage increments in the region, a study says.

According to the Salary Trends survey by global HR consultancy ECA International, pay hikes in the Asia-Pacific region are expected to average at 4.8 per cent in 2009, a drop of 30 per cent from last year's 6.9 per cent increases.

The declining overall trend in pay hikes notwithstanding, some Asian countries, including India, Vietnam and Indonesia, may still see big increases in 2009, the study revealed.

"Wage increases in India are expected to be the highest at 10.8 per cent, followed by Vietnam (10.6 per cent), the only location in the region where rises are still higher than last year, and Indonesia (9 per cent)," the global HR consultancy ECA survey stated.

ECA regional director Asia, Lee Quane said, "There is still a huge demand for talent in India (that) is keeping pay increases high despite (the) current economic situation. While, in Vietnam and Indonesia persistently high levels of inflation are keeping increases up."

The survey stated that pay rises across Asia-Pacific are down 40 per cent from hikes predicted prior to the global economic crisis and almost one-third of firms surveyed are planning to put salary increases on hold. Further, salaries in Japan, Taiwan, Hong Kong and Singapore have recorded the biggest downward adjustments in 2008.

"Asia Pacific has been severely affected by the economic downturn and this is reflected in their planned salary reviews for 2009," Quane said.

Just over six months ago, companies operating in Japan had forecast salaries increases by a relatively healthy 2.8 per cent, but now half the companies surveyed have stated they would be freezing pay, the report stated.

ECA Salary Trends survey is conducted annually for over 50 countries, but it was re-run to monitor how changing economic conditions have affected companies' business plans since the study was first conducted in September.

Salary increases worldwide are expected to fall to around 4.7 per cent from last year's 6.2 per cent average as firms look towards cost cutting in response to the economic crisis.

In 2008, a range of factors like rising inflation, the competition for talent in many markets and healthy level of economic growth meant high salary hikes by firms, Quane said.

However, the economic upheaval since last September has prompted many firms to revise salary hikes significantly from previous predictions. Globally, firms revised their forecasts downward by more than a third on an average, he added.

Globally South American countries, Venezuela and Argentina, top the charts for expected salary increases, while India is at the third place.


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## Screaming Skull

Wipro gets ESIC's Rs 1,182 crore E-governance deal​
MUMBAI: The Employees State Insurance Corporation (ESIC), has signed a Rs 1,182-crore contract with software major, Wipro Technologies, for
converting its paper-based administrative and operational system into a paperless E-governance system, a top ESIC official said.

"ESIC has signed a Rs 1,182-crore contract with Wipro Technologies for converting its paper-based administrative and operational system into a paperless E-governance system. The five-phase project would be implemented in the next five years," ESIC (Maharashtra) Additional Commissioner, S C Chakraborty, said at a meeting on 'Recent Developments in Employees State Insurance Scheme' organised by the Indian Merchants Chamber here.

"We expect this to vastly improve the ESIC's service delivery," Chakraborty said.

The ESIC was incorporated under Article 41, 42 and 47 of the Indian Constitution for extending social security to needy people. While social security was under the Concurrent list, medical care was under the State list.

"Hence, the ESI scheme is being operated jointly by both state and central governments, sharing the costs on a 1:7 ratio repectively," Chakraborty said.

There are over 5,000 ESI dispensaries in the country and about four crore employees and their dependents benefit from them.


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## Screaming Skull

Infy wins $100-mn Telstra contract​
NEW DELHI/HYDERABAD: Infosys Technologies has won an outsourcing contract worth about $80-100 million from Australian phone firm Telstra.


Telstra had undertaken a vendor consolidation exercise to reduce its IT service providers from four  EDS, IBM, Infosys and Satyam  to two.

The consolidation was aimed at bringing down the cost of managing its IT systems.

According to an outsourcing expert, vendor consolidation at Telstra is not over yet. Infosys and EDS are clear winners, but we will need to wait for few more weeks to get the entire picture, he said.

Infosys refused to comment on the Telstra deal as its in the silent period before the announcement of its quarterly earnings.


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## Screaming Skull

TCS bags $80 mn contract from UK's CMEC​
HYDERABAD: Indias biggest software exporter TCS has won a $80-million outsourcing contract from UKs Child Maintenance and Enforcement Commission (CMEC), the first in a series of almost $2-3 billion worth of contracts to be awarded by the UKs state-owned departments. The UKs state-owned departments are seeking help from the Indian offshoring industry for bringing troubled government technology systems
back on track and lowering the cost of managing government IT systems anywhere between 25% and 40%, according to several experts ET spoke with recently.

CMEC plans to have this system up and running smooth within next 1-2 years, a UK-based expert told ET on condition of anonymity. TCS will help CMEC implement and integrate various applications
, including Oracles Siebel customer relationship management software and TCS Bancs software.

The new system will integrate the processes of case management, automated scheduling of payments, arrears management and civil and legal enforcement. 

When contacted by ET on Tuesday, a TCS spokesman declined to comment as the company is in a silent period because of its upcoming financial results announcement. TCS was one of the three vendors shortlisted by the agency. ET could not identify other vendors who presented their bids for this contract. The UKs Child Support Agency (CSA) was replaced by CMEC last year, after different government audits revealed inefficiencies due to failure of IT systems at the agency.

The department of work and pension (DWP) has recently started seeking new outsourcing partners after not so pleasant experiences with older contracts worth over $650 million awarded to EDS, the expert added.

The government IT spending in the UK is estimated to be over $36 billion every year, Bob McDowall, research director at TowerGroup Europe told ET in a recent interview.

Apart from the troubled National Health Service (NHS) modernisation program, which needs restructuring, HM Revenue and Customs (HMRC) will also seek to outsource more work as the department plans to make it mandatory for firms employing more than 50 employees to file tax-related and other information online by 2011. The UK governments IT projects almost always suffer from scope creep, financial and time over-run of a significant dimension, Mr McDowall had said.

One of the reasons for UKs government departments to look for help is the scarcity of competent professionals for transforming the systems.

DWPs earlier project did not fetch expected dividends because the agency opted for a custom-built software application that required tremendous training and debugging efforts. By opting for packaged software from TCS and Oracle this time, the department is hoping to run applications
based on a standard platform.

As the internal IT development resources are not of the strongest quality, good people go to commercial organisations. Those that are outsourced to UK-based providers are not always delivered on a more efficient, timely and cost effective basis, Mr McDowall added.


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## Screaming Skull

TCS, Infosys, Wipro eye Woolworth's $100 mn deal​
BANGALORE: Top Indian tech firms TCS, Infosys and Wipro, along with multinational rivals IBM, Accenture and HP-EDS , are currently chasing an outsourcing contract worth over $100 million from Australias biggest retailer Woolworths, as the retailer plans to deploy a SAP-based solution for transforming its merchandising and supply chain platforms.

At a time when new business is increasingly becoming tough to come by, Australia has emerged as a great opportunity for the outsourcing vendors. Other recent outsourcing contracts awarded by Australian companies include the $100-million deal from Telstra and the over $50-million contract from mining firm Rio Tinto. Both were won by Indias second biggest software company, Infosys.

When contacted by ET on Tuesday , a Woolworths spokesman confirmed that the retailer is, indeed , evaluating vendors for its SAP project.

Woolworths is currently working with SAP on a project where, over time, we will replace our core merchandising systems. These systems are a very important piece of IT for a retailer, said Luke Schepen , a Woolworths spokesperson.

Woolworths will lead this project internally but we are currently going through the process of determining other technology vendors who will assist (Woolworths) with this project, he added. 

With over $18 billion in revenues during the half-year ended December 2008, Woolworths runs several supermarket chains, apart from consumer electronics and hotel businesses across Australia, New Zealand and the UK.

According to research firm Forrester , Australian companies will buy around $39 billion worth of software products and services this year, accounting for almost 4.6% of the countrys gross domestic product (GDP).

While Australian enterprises are not as severely impacted by the global economic recession when compared with their rivals in the US and Europe, the countrys leading corporates, including Rio Tinto and phone firm Telstra, have recently intensified their efforts to reduce their operational costs by working with Indian service providers.

In October last year, Wipro won a 10-year outsourcing contract from Origin Energy, Australias second biggest energy retailer for a SAP-based transformation. A few months ago, Infosys was awarded an over $50-million outsourcing contract by Rio Tinto for managing the global mining giants IT applications and some back-office procurement activities.

Experts such as Arno Franz of offshore advisory firm TPI say that Australian customers will continue to outsource because of obvious benefits. The business case for outsourcing, including offshoring, is compelling and, given current economic circumstances, even more so; organisations are increasing their focus on cost realignment, and outsourcing/offshoring offers the best and most risk mitigated and timely way of doing this, he said.

Many Satyam customers in Australia including Telstra, Qantas and the National Australia Bank have been criticised by local experts for their offshoring initiatives. However, these companies continue to outsource because business benefits far outweigh the risks involved . In fact, we have seen no curtailing of plans that companies have in train or are contemplating in relation to offshoring, Mr Franz added. Current Satyam clients seem to have taken an appropriate approach of wait and see, while at the same time putting in place risk mitigation approaches.


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## Screaming Skull

IT cos line up for $6 bn govt mission mode projects​
NEW DELHI: The countrys information technology industry is turning its gaze inwards, as a dearth of new contracts in its core western markets
exposes the soft underbelly of a sector long viewed as a habitual growth monster.

While there is a slump in demand from cash-strapped global customers for new technology services, the home market is increasingly looking good for these IT players, with contract sizes matching the ones available overseas.

And there seem to be quite a few big deals up for grabs, many of them from the government departments taking their baby-steps in embracing any form of technology.

The government departments have plans to spend $6 billion in 30 so-called mission mode projects, and theres promise of more to come, as the federal and state governments embrace e-governance and look to digitise everything from land records to tax filing. There are scores of the government projects that relate to the filing of income-tax, central excise, transport services, computerising municipalities and the police force and developing e-district and e-courts.

Companies such as TCS, HCL and Wipro have won significant government business in recent months, and industry officials speak of the government contracts on offer ranging from as small as Rs 100 crore to multiples of Rs 1,000 crore.

Infosys has recently bid for a railway project related to creating a Locomotive Management System and ERP implementation, a project to create a billing system for BSNL and another contract from the defence forces.

Yet, a lot of the government business appears good only on paper, and is often hamstrung by a tardy pace of decision making. In the government projects, theres a start date but no end date, said Tanmoy Chakrabarty, VP & head of government industry solutions unit of TCS, the largest software services company by revenues.

Nasscoms vice-president Rajdeep Sahrawat illustrates the time taken by the government to approve projects by citing the example of the Passport Seva project to digitise passport records, which took the ministry of external affairs almost three years to conclude. TCS eventually won the Rs 1,000-crore project.

Further, in most the government contracts, separate teams look at the technical aspects and the pricing aspects of a contract, which delays
decision making.

People on technical committee are not on price committee. And for larger contracts (say over Rs 1,000 crore) approvals can take much longer, added Mr Binod of Infosys Technologies
. But the government officials defend the decision-making process, arguing that many of these state-awarded contracts had complexities not normally associated with other contracts.

It involves complexities. Some projects require even legal changes. Then there is an extensive vendor selection process, said R Chadrasekhar, special secretary at the department of information technology, adding that in a few cases, an extensive selection process for vendors was required to ensure the smooth implementation of projects.

But for now, the sector has little choice to but to take it on the chin, as it braces for slower growth of less than 15% during the next few quarters.

Industry body Nasscom has already pegged the growth at under 17%, down from about 21-24% just a few quarters ago, making the prospect of business from any new quarter particularly alluring.

It takes longer to get the government business, but from a relative perspective India has been unaffected by the slowdown. PSUs (public sector undertakings) and the government spends are on track, deal sizes are on the upswing, said Kiran Bhagwanani, senior VP, India & Middle East at HCL Technologies, which recently won a seven-year, Rs 393-crore project from the National Insurance Company to roll out a new IT application across the companys operations. 

The domestic market is growing at 20%, thanks mainly to the large government contracts. But three years is the typical time frame for project approvals, said Mr Sahrawat of Nasscom.

Others like HR Binod, services VP & head of the India Business Unit at Infosys Technologies, noted that it normally took at least 12-18 months for the government contracts to be awarded compared with about 1-2 months for private sector contracts.

Many others complain about the T1, L1 rule for the government projects, which stipulate contracts only go to companies that offer the best technology solutions at the lowest price. This means that the lowest bidder gets the work.


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## Screaming Skull

HSMP case: UK compensation for Indian migrant professionals​
LONDON: In a major legal victory, nearly 10,000 Indian and other non-European Union professionals will be able to claim compensation for hardship caused by the 2006 changes to immigration rules that were struck down by the High Court
here.

The court last evening ruled that the changes to the rules, extending the number of years required for indefinite stay in the UK from four to five years under which they originally entered Britain, were unfair.

It is the second time in a year that the retrospective changes to the programme for the "brightest and best" migrants, including Indians doctors and other professionals, have been declared unfair and unlawful by the court.

In a strongly-worded ruling, Justice Cox declared that the five-year rule imposed by the Home Office on people already in the country was unlawful.

"It would be unlawful for the (Home Secretary) to withhold indefinite leave to remain from all those members of the highly skilled migrant programme who were already on the scheme before April 3, 2006, by reference to a qualifying period of five years' continuous residence," she said.

The judgment directs British government to honour its original commitments made to participants of Highly Skilled Migrant Programme (HSMP), which is no longer in operation. 

The ruling paves the way for the Indian and other non-EU professionals who entered the UK under the programme to claim compensation for the inconvenience and extra costs endured by having to wait an extra year before settlement.

The migrants suffered financial difficulties because of the inability to secure a competitive mortgage without indefinite leave to remain.

There was also a continuing lack of good employment or promotional opportunities, including an inability to travel potentially resulting in career setbacks, and the migrant's children's education would also have been more expensive.

In October 2008, HSMP Forum, a campaigning body, representing about 50,000 highly skilled migrants, mostly Indians, filed a Judicial Review application challenging the Home Office on changes to the terms of settlement.

Amit Kapadia of the Forum said instead of addressing the issue of illegal and burdensome immigration, government has been penalising the legal and desirable section of Highly Skilled Migrants, who are making a valuable contribution to UK economy by offering requisite skills, paying all the taxes and at the same time not availing public funds.

Accepting the ruling, a Home Office spokesman said: "This case was about an old set of rules that have been swept away by our new points-based system. We believed we had fully implemented the previous judge's findings relating to the changes we made to the HSMP in 2006.

"The High Court took a different view and we accept its findings. We will now carefully consider the judgment before publishing our remedies."


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## Screaming Skull

PE cos bet on India's domestic demand​
MUMBAI: Though the overall economic situation has dampened investor enthusiasm, the economys strong fundamentals, coupled with a
consumption-driven economy, will provide comfort to long-term investing in India, according to a survey by Deloitte.

The survey on private equity investments in the past six months has showed that sectors driven by domestic consumption and infrastructure are likely to see maximum deal activity.

The number of participants who expect that valuations would fall in coming months has increased from 66% in the first half of 2008, to 75% in the second half, the survey found out.

We have observed two key points, the competitive environment for investment opportunities for PE houses is expected to ease during 2009, as smaller PE firms and hedge funds exit the market. Second, the volume of PE deals in the market will be dependent on how quickly promoters are willing to accept lower valuations, Sandeep Gill, managing director of Deloitte corporate finance, says.

The survey shows that despite global economic crisis, the average respondents confidence level for the long-term prospects for growth fell only marginally from 8.5 out of 10, in the first half, to 8 in the second half. 

3I Asia head Anil Ahuja says, The overall scenario for private equity hasnt improved as there is still a disconnect between valuations expected in a private market compared to the existing valuations in a public market. Till the disconnect narrows, PE activity wont build up, he adds. Also, managing existing portfolios for most PE firms is becoming difficult as there are growing instances of differences between PE firms and managements.

The Deloitte survey, which covers 40 of Indias top PEs and venture capital investors, predicts that while PE investments will continue to be dominated by growth capital, buyout or control transition is expected to rise.

Growing differences with companies managements and tight finance availability could lead to a consolidation of PE firms and there will be lesser PE managers, says Mr Ahuja.

If you look around now, there are some 300 PE managers... that number could come down to about 150 in another three years once the current corpus of fund-raising is complete because there are fewer avenues to raise money from, Mr Ahuja adds.


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## Screaming Skull

Tata Motors sells over 51,000 Nano booking forms in three days​
MUMBAI: A nation can barely hold its excitement, as it waits to bring the baby home. Tata Motors dealers alone have sold over 51,000 forms for
NANO in just five days since they became available from April 1, given that the company is likely to manufacture just 50,000 cars in the first year. The booking amount too ranges from a heavy
Rs 95,000 to Rs 1,40,000.

Industry observers said this is no mean achievement, considering that it excludes forms sold through 30,000 other locations such as SBI, its subsidiaries and associates, other preferred financiers and outlets of Tata Finance, Westside, Croma, Titan and Tata Indicom.

The response has been quite good, even though customers have not been given a chance to test-drive the car, said an official at a Mumbai-based Tata Motors dealership, who asked not to be named. The forms are being sold for Rs 300, of which Tata Motors retains Rs 250 and the dealer, the remaining Rs 50.

The rush isnt just coming in from eager customers, with dealers across the country making a beeline for forms. Some are understood to have picked up as many as 20,000 forms each, with smaller dealers buying as many as 5,000 forms to cater to the rush for the worlds cheapest car.

According to people close to the development, Tata Motors is expected to earn around Rs 30 crore from the sale of around 10 lakh forms at Rs 300 per form, through 218 dealers.


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## Screaming Skull

India to grow by 5 pc in 2009: Goldman Sachs economist​
CHICAGO: India's economy is likely to grow at a slower pace of 5.2 per cent in 2009 before picking up speed again next year to clock an over 7
per cent growth, a top economist with Goldman Sachs said here.

The Indian economy, which had been growing at 9 per cent till a couple of years ago, is expected to grow by 5.2 per cent in 2009. The rate would improve in 2010 when the country is likely to register a 7.8 per cent growth, Head of Global Economic Research at Goldman Sachs Jim O'Neill said.

Speaking at a session on 'Outlook for Emerging Markets' organised by the Chicago Council on Global Affairs, O'Neill said Indian policy makers need to "drop the notion" of a double-digit growth and focus on increasing India's engagement with the world.

"There was a lot of talk of double-digit growth even before India got double-digit growth. Unless India's growth is supported by productivity performance, it will not be lasting growth," O'Neill said.

India needs to focus on opening its trade barriers with neighbours like Pakistan and China and raise the educational capability of half a million of its people, he said adding that about 500 million Indians virtually get no education.

"In the next 20 years, India could be the single most powerful economic story in the world. It all depends on Indian policy makers stop thinking about elections 18 months before they (elections) start and doing things to allow greater engagement between India and the rest of the world in not just outsourcing or retail, but many other industries," he said.

Even if India grew by 6 per cent for the next 40 years, "It is going to possibly become as big as the US", he said. Referring to India's "spectacular demographics", the economist said over the next 20 years India's working population could increase by the same size as the current working population in the US.

India's growth rate, following the global financial meltdown, is likely to dip from a high of 9 per cent in 2007 to 6.4 per cent in 2008, he said.

While the actual growth of the Indian economy between 2001-08 was 7.5 per cent, it is assumed that growth for India during 2001-15 would be 7 per cent and by the early part of the next decade, India could again grow by 8-9 per cent.

O'Neill, creator of the popular BRIC (Brazil, Russia, India and China) acronym, said the four economies are likely to clock a growth of 4.8 per cent this year. The growth rate would improve next year when the quartet is expected to grow by 6.9 per cent. "BRICs are very much a future of the world economy and there is drastic need to reform the global architecture," he said.


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## Screaming Skull

Economy should register 7-8% growth this fiscal: Kamath​
KOLKATA: Striking a positive note at a time when the overall economy is going through a downturn, ICICI Bank MD & CEO KV Kamath said on
Saturday that the credit offtake has improved in India and the corporate India will be pushing forward with its investment programmes. The worst is over and quarter-on-quarter growth should start looking up, he said.

"The government has taken good steps, and a large amount has been injected into the system. In my opinion, the Indian economy should register a 7-8% growth in this fiscal. Yes, there is pain in sectors like textiles and oil and gas, among others, but rural India, the knowledge and FMCG sectors are in good shape. I don't think deflation is possible since there is no chance of a collapse in demand," said Mr Kamath. He was speaking on the sidelines of the Indian Institute of Management, Calcutta's (IIM-C) 44th convocation in the city.

IIM-C director Shekhar Chaudhuri said that the institute would have 924 students in its two-year full-time programme by 2012. He also spoke of consolidation in the area of executive education and planning for a major growth thrust after the new executive guesthouse comes onsteam in 2010.

"We plan to continue our intense efforts to augment the faculty strength. We plan to strengthen the infrastructure for alumni networking substantially over the next few years," he said.

IIM-C board of governors chairman Ajit Balakrishnan stressed on the importance of research. "We have increased the amount for faculty research to Rs 2 crore from the current Rs 10 lakh," he said.


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## Screaming Skull

Indian stock market may regain 21,000 levels: Report​
NEW DELHI: The Indian stock market has been termed as a potential "baby bull" as the Sensex may continue to advance over next 15 years and is likely to breach its all-time high level of 21,000 during the period, a report says.

At a time when developed markets across the world are in a bearish phase, a technical research report by US-based Elliot Wave International has termed India, Taiwan and New Zealand as potential "baby bulls", while stock markets in Japan, Singapore, Hong Kong, China and Australia are going to be under the "bear" grip, the report stated.

The report has analysed that recent sharp reversal rally in Indian market, post the October 2008 lows, points at regaining earlier high levels.

It added that if the rally continues in the same proportion as between 2003 and 2008, "the Sensex may continue advancing for 15 years before reaching the end of wave".

"The potential baby bulls completed only three waves down from their respective highs, which makes them strong candidates to rally back to at least near their all-time highs -- if not beyond," the report stated.

Sensex had touched all-time high of 21,206.77 points on January 10, 2008, since then it plunged even below 8,000.

The report stated that Sensex would now embark on third wave which could see the index witnessing a multi-month rally, although share prices may come down for short periods.

"The decline since the 2008 high can be counted as three waves. A three-wave decline opens possibility of a rally back to near the 2008 highs. But there is reason to set our sights even higher," the research firm said in its Asia-Pacific Financial Forecast report.

The report said each high and low in the stock market is calculated on the basis of waves. The highs achieved by the Indian bourses between 2003 to January 2008 forms the first wave, while the bear market, till it saw the October lows, formed the second wave.

Since 2003, when the Sensex was quoting around 5,800 levels and had seen lows to the extent of 2,904.44 points, it had been on an upswing and reached the 21,000 level from where it started coming down to below 8,000 levels.

So far this year, Sensex had regained 9.20 per cent to 10,534.87 points.

Elaborating further the report said, "the Sensex declined in three waves to the October low, where it retraced approximately 50 per cent of its 2003-2008 rally on a percentage basis. The index has also just broken out of its downward trend channel.

"Even if the declines from their all-time highs later turn out to be only the first legs of a larger correction, the three wave corrections at present imply significant rally in the intermediate term. We should then be able to reassess the long term wave count from higher levels," the report said.


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## Hasnain2009

What is the trading volume of sensex these days??


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## NSG_BlackCats

Auto sales stay positive in FY'09, courtesy stimulus package​
The Indian auto industry, which was heading towards negative growth territory, managed to stay in the positive zone in the fiscal ended 
March 31, thanks to the government's stimulus packages, recording a 0.71% increase in total vehicle sales. 

With a late surge in the last quarter of the fiscal, total vehicle sales in the country stood at 97,23,391 units compared with 96,54,435 units in the last financial year, according to the figures released by the Society of Indian Automobile Manufacturers (SIAM) on Wednesday. 
"Had it not been for the stimulus packages, passenger vehicle sales would have been down three per cent or no growth, while commercial vehicles would have had a decline of 30-40%," SIAM Director General Dilip Chenoy said. 
The two-wheeler segment would also have registered a decline of three per cent or zero growth, he said, while forecasting a single digit growth for the three major segments in the ongoing fiscal. 

In the financial year 2008-09, the domestic passenger car sales rose by 1.31% to 12,19,473 units from 12,03,733 units in the April-March period of the earlier fiscal.


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## Screaming Skull

Hasnain2009 said:


> What is the trading volume of sensex these days??



Unfortunately I don't have recent figures but here are some stats from 2008.

* In 2008, the average volume of business conducted on the BSE (sensex) was approximately $40 billion each month.

* The number of shares traded each month on the BSE is in the range of 40 - 50 million.

* The total market capitalization for the companies traded on the BSE is in the area of $1.8 trillion. All of the above dollar values are stated in USD. 

Total volume as of 2006 was US$ 980 billion

Check out the following links for more info

Following are the other stock exchanges in India

* Bangalore Stock Exchange

* Bhubaneshwar Stock Exchange

* Bombay Stock Exchange (BSE)

* Calcutta Stock Exchange

* Cochin Stock Exchange

* Coimbatore Stock Exchange

* Delhi Stock Exchange Association

* Guwahati Stock Exchange

* Hyderabad Stock Exchange (HSE)

* Inter-connected Stock Exchange of India

* Jaipur Stock Exchange

* Ludhiana Stock Exchange Association

* Madhya Pradesh Stock Exchange

* Madras Stock Exchange (MSE)

* Mangalore Stock Exchange

* National Stock Exchange of India (NSE)

* Magadh Stock Exchange of India - In Patna, Bihar

* Over The Counter Stock Exchange of India (OTCEI)

* Pune Stock Exchange

* Uttar Pradesh Stock Association

* Vadodara Stock Exchange

* Meerut Stock Exchange

* United Stock Exchange (starting in June 09)

Out of these the National Stock Exchange of India (NSE) is comparable to BSE with a market cap close to US$ 1.6 trillion. 
Check out the following links for more info


BSE - Key statistics

Bombay Stock Exchange

General Information - National Stock Exchange (NSE) - India Finance & Investment Guide

Bombay Stock Exchange - Wikipedia, the free encyclopedia

National Stock Exchange of India - Wikipedia, the free encyclopedia

List of stock exchanges - Wikipedia, the free encyclopedia


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## Screaming Skull

HAL hands over first rear fuselage for Gulfstream (G-150) aircraft to IAI​

Hindustan Aeronautics Limited (HAL) on Tuesday strengthened its position as a leading aerospace export house when it handed over the first rear fuselage for the Gulfstream (G-150) aircraft to Israel Aircraft Industries (IAI).

HAL Chairman Mr Ashok Nayak handed over the documents of the HAL-built Aft (rear) fuselage for G-150 to Mr Shlomi Karako, General Manager, Business Jets Division, IAI, at a simple function at HALs Aircraft Division in Bangalore. Gulfstream (G-150) is a business executive aircraft built in Israel and transported to the United States for further furnishing. The G-150 is marketed the world over by the US-based Gulfstream Corporation.

Ready for more challenges, says Nayak: The Aircraft Division has made a mark on the international export map over the years by supplying several types of door assemblies to Boeing, Airbus and other global firms. With the G-150 fuselage delivery HAL has now entered a fairly advanced manufacturing level of building major structural assemblies for global players in the civil sector. The G-150 project augurs well not only for HAL, but also for the national objective of producing a civil aircraft of international standards, Mr Ashok Nayak said.

He also attributed the success of the project to the involvement of the private sector and expressed hope that the Company would bag more orders in the future. The G-150 programme has given us huge confidence in taking up bigger challenges. We are now looking forward to the G-250 programme and we have made our strong presence felt in the bidding process. HAL-IAI has a time-tested partnership and we are here to capitalize on the vast potential in the business jet market, Mr Nayak added.

Quality at its best, says Israel: HALs ability to deliver the G-150 fuselage on time came in for praise from the strong contingent of IAI officials. To us, this is a champion product. We have seen closely HALs capabilities in handling new technologies and new IT processes. For us the Gulfstream fuselage is a perfect example of synergy and quality, Mr Shlomi Karako of IAI said.

About the project: The IAI approached HAL with a request for quotation (RFQ) for building the fuselage in December 2006, since they required a partner to build the fuselage from digital data for the first time. (This process was against the legacy of paper drawings from which hundreds of aircraft were built in Israel.) The contract for producing 200 ship-sets of G-150 fuselages was signed in 2007, and a dedicated state-of-the-art hangar came up in Bangalore within nine months.

The programme also saw significant and close collaborative efforts between HAL and IAI in realizing the hardware through web-based design data transfer. It also brought together the Directorate of Civil Aviation (DGCA) and Civil Aviation Authority of Israel (CAAI). HAL has a seven-year schedule to deliver 200 fuselage ship-sets to Israel.

Hindustan Aeronautics Limited


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## Screaming Skull

India's excellent performance in Value Added Manufacturing​
NEW DELHI: The International Yearbook of Industrial Statistics 2009 of the United Nations Industrial Development Organisation (UNIDO) has ranked India as among the leading producers of automobiles, petroleum products, textiles, electrical machinery and apparatus, basic metals, chemicals and chemical products, leather products coke and nuclear fuel.

In its latest report, it has pointed out that the annual growth rate of manufacturing value added (MVA) in India rose from 6.9 per cent in 2000-05 to 12.3 per cent in 2005-07 while MVA per capita grew by 10.6 per cent and 5.2 per cent respectively in the period under review. The share of MVA in Indias gross domestic product (GDP) stood at 14.8 per cent in 2006 against 13.8 per cent in 2001.

It ranks India among the worlds leading 12 producers of textiles (ranked 4th after China, the U.S. and Italy); electrical machinery and apparatus (5th); basic metals (6th); chemicals and chemical products (7th); leather, leather products and footwear (10th); coke, refined petroleum products and nuclear fuel (10th); machinery and equipment (12th); and motor vehicles (12th), based on 2007 figures. Among the leading developing countries, India figures among the top five.

The report states that the share of developing countries in total world manufacturing value added is rising, even as industrialised nations play the dominant role in the manufacturing industry.

Recent estimates for 2008 indicate that developing countries now produce almost 30 per cent of world MVA compared to 16 per cent in 1990.

The increasing share of developing world vis-À-vis industrialised countries is also explained by the shift in location of manufacturing, especially assembling of final products, from industrialised countries to developing countries.

Japan remains the worlds most industrialised country in terms of MVA per capita, followed by Switzerland, Singapore, Ireland, Finland, Sweden, the U.S., Germany, Austria, Luxembourg, Republic of Korea, Denmark, Iceland, Canada, Belgium, the U.K., Norway, the Netherlands, Italy and France.


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## Screaming Skull

*Narcotics is big biz, not menace: Govt panel*​
April 08, 2009

A high-level inter-ministerial task force wants the business of narcotics to be simplified, something which, it said, would be an opportunity for the over $17-billion Indian pharmaceutical industry.

The narcotics formulations should be looked at "as an important opportunity and not just a menace", the task force said in its report on opportunities in the pharmaceutical sector submitted to the commerce ministry.

Narcotics are key ingredients in the intermediate formulations of $712 billion world pharmaceutical market.

The task force, comprising senior officials of the ministries of commerce, finance and external affairs, has said India is emerging as a significant supplier of finished 'active pharmaceutical ingredients' and formulations to the global market.

"It is, therefore, necessary to simplify the procedure and to capture the global narcotics business in certain classes of narcotics... the entire process of approvals from multiple agencies such as International Narcotics Control Board, Drug Controller General of India, Ministry of Finance and State Narcotics Boards, the quota systems and canalisations should be relooked at in promoting export production."

It said the genuine manufacture exporters may be permitted to directly import narcotic substances based on risk profiling and past records, doing away with Government Opium & Alkaloids Works and Ministry of Finance approvals.

"The quota system should be done away for export production as it is difficult to assess import requirements one year ahead, especially when the country desires to capture a bigger share," it said.

The task force, which also included officials from the Department of Chemicals and Pharmaceuticals, Planning Commission and CEOs of several pharmaceutical firms, said that currently the procedure for imports of narcotics is cumbersome creating avoidable hurdles to genuine manufacturers resulting in abandoning of this opportunity.

"Imports of narcotics material is permitted only through Government Opium and Alkaloids Works," it added.


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## Screaming Skull

*IIMs extend support to set up six new B-Schools
​*NEW DELHI: Ending a year-long tussle with the government, the IIMs on Wednesday agreed to provide "all types of support'' for setting up six new B-schools in the country which are expected to start functioning from the coming academic session.

At a meeting with Higher Education Secretary, Mr R P Agrawal, the IIM Directors on Wednesday came on board to extend their expertise in establishing new B-Schools. Earlier, the IIMs had expressed their reservation to the idea of mentoring the new IIMs af ter which the government set up a committee to evolve a suitable module to start the new IIMs.

The three-member committee, comprising director of IIM Ahmedabad, Prof. Sameer Barua, IIM Kolkata director, Prof. Sekhar Chaudhury and IIT Kanpur Director, Prof. S G Dhande, also did not favour the idea of mentoring.

"But in today's meeting, the IIM Directors gave positive indications to provide all types of support for setting up of the new IIMs. We expect the new IIMs would start functioning from the coming academic session,'' a top source, who was present at the m eeting, told PTI.

The government has decided to set up six IIMs in the states of Tamil Nadu, Jammu and Kashmir, Jharkhand, Chattisgarh, Uttarakhand and Haryana. - PTI


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## Screaming Skull

*Tobacco export surges 62% till February​*
NEW DELHI: Tobacco export from India, the third-largest exporter in the world, shot up by about 62 per cent to exceed Rs 2,900 crore till February of the 2008-09 fiscal, boosted by a surge in realisation and a weak rupee.

India exported tobacco worth Rs 2,912.29 crore between April 2008 and February this year against Rs 1,797.65 crore in a year earlier, a senior Tobacco Board official said.

In dollar terms, the export has shot up by 43 per cent to $640.77 million from a year earlier, he added.

However, tobacco export, comprising raw tobacco and its products, rose 10 per cent in volume terms to 2,02,174 tonnes between April 2008 and February 2009, compared with 1,82,238 tonnes in the same period the previous year, he said.

The export of tobacco in February rose in volume to 14,360 tonnes from 13,182 tonnes a year earlier. In value terms, the shipment more than doubled to Rs 243.30 crore, compared with Rs 121.60 crore in February 2008, he added.

Record prices of the Indian tobacco coupled with the depreciation of the rupee contributed immensely to the surge in the value of exports, the official said. The Indian tobacco prices hit records due to a shortfall in output in some of the major produ cing countries, including China, last fiscal. - PTI


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## Screaming Skull

*NTPC net rises 5.5% to Rs 7,827 cr ​*
New Delhi, April 8 NTPC Ltd on Wednesday announced a 5.56 per cent rise in provisional net profit at Rs 7,827.4 crore for 2008-09, after setting aside over Rs 1,400 crore to be paid to employees as revised wages during the fiscal.

Gross revenue was up 13.76 per cent at Rs 45,522 crore during the fiscal, its Chairman and Managing Director, Mr R.S. Sharma, said here.

The company had to make a provision of Rs 1,402 crore for wages, including an additional Rs 600 crore in the March quarter. Had it not been for the provision, our annual net profit would have crossed Rs 8,000-crore mark, NTPCs Director (Finance), Mr A.K. Singhal, said on the sidelines of a press conference held to announce its 2008-09 provisional financial numbers.

The total employee strength of NTPC as on March 31 was 24,698, which the company plans to raise by 1,000 in 2009-10.
Capital expenditure

The state-owned utility has a planned capital expenditure of Rs 17,700 crore during 2009-10. Mr Sharma outlined borrowings of about Rs 11,330 crore during this fiscal for enhancing its capacity by 3,300 MW. It plans a capacity addition of about 22,430 MW during the current Five-Year Plan period (2007-12).

The company plans to raise loan worth Rs 8,500 crore from a public sector bank for financing the capital expenditure of its projects for the next three years, he said. NTPC also plans to import 12.5 million tonnes of coal for bridging gap between domestic supplies and total requirement of 135 million tonnes during this fiscal.

NTPC contributed 28.6 per cent (206.94 billion units) of the total electricity generated in the country during 2008-09, despite accounting for only 18.79 per cent (27,850 MW) of the total installed capacity of the country. The power major aims to generate 217 billion units of electricity in 2009-10.

Its coal-based power plants recorded a plant load factor of 91.14 per cent against 92.24 per cent during 2007-08. Out of the companys existing installed capacity of 30,144 MW, 2,292 MW are under various joint ventures. Eighteen projects totalling 17,930 MW, including three hydel projects having a combined capacity of 1,920 MW, are currently under construction, a company release said. This also includes projects under joint ventures.

It is also targeting a solar power capacity of 10 MW at Anta in Rajasthan and 25 MW at Singrauli in Madhya Pradesh. Mr Sharma said the company has also got approval from the Uttarakhand government to explore geo-thermal projects in the State.

Overseas Coal blocks



Mr Sharma said the company is looking at acquiring coal blocks in Indonesia and Mozambique. We have proposals from four groups in Indonesia and two in Mozambique, he said. The company plans to import 12.5 million tonnes of coal in 2009-10. It imported 6.5 million tonnes in 2008-09. Its total requirement of coal is expected to touch 225 million tonnes by 2012 which will be met by 195 million tonnes of domestic supplies from Coal India Ltd and 15 million tonnes each from captive production and imports.


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## Screaming Skull

*Telecom sector may be hit as recession bites ​*
New Delhi, April 8 Indian telecom sector, which has so far remained untouched by the slump in the global economy, could see the growth rates slowing down by the end of the year. Thanks to households postponing spending, the growth rate of mobile handsets could fall by as much as 50 per cent and also see a decline in new subscriber additions compared with 10 million new subscribers a month at present.

According to Mr Prashant Singhal, telecom industry leader at Ernst & Young, the handset sales growth in 2009 is expected to be in the region of 13-15 per cent, down from 26 per cent last year.

Yes, the Indian telecom industry has been impacted to some extent by the current global slowdown. In the current economic environment, many corporates are re-negotiating the rates they pay to telecom operators. Though subscriber numbers are still growing at well over 10 million a month, revenues are not rising commensurately. Also, it will be a challenging market for mid- to high-end handset makers this year. In high-end phones, sales will be defined more by need rather than desire of the user.

While most operators claim that the telecom growth story is intact for another 3-4 years, they privately admit that the liquidity crunch may have an impact in 2010. Most of the growth in mobile usage is coming from non-urban areas driven by a large population of employed youngsters. However, if the liquidity crunch continues then these youngsters may not find employment easily, which in turn will impact their expenditure on communications services, says a Mumbai-based multinational GSM operator.
Cost-cutting measures

Though the industry is not losing sleep yet, they are undertaking cost-cutting measures such as infrastructure sharing and internal restructuring. Reflecting its proactive approach, Ericsson has had a cost reduction programme in place since 2008 which well exceeded set targets. The present economic condition is helping us drive better focus across the various teams and functions internally. Conscious decisions are being taken to curb costs by increasing the use of Web effectively - through webinars and Web conferences, thus seamlessly connecting across geographies and different time zones. However, we expect the telecom scenario in India to be in growth mode for the next few years, says Mr P. Balaji, Vice-President (Marketing & Strategy), Ericsson India.
Some rule out any impact

However, some of the players completely rule out any impact on telecom.

Look at it from the customers perspective  slowdown or not, they need a communication device under all circumstances; to share their thoughts, worries, good news or even for a general discussion. So, the demand for telecom services remains strong, and that is evident in the strong growth that the sector continues to enjoy. In fact, telecom usage in innovative ways is actually increasing through the long-drawn recession, as it becomes a cost-effective alternative to business expenses such as travel and lodging, etc, says a spokesperson for Tata Teleservices.

But Mr Singhal sounds cautious. This is a time for telecom operators to take a close look at their internal structure. In the last couple of years of sharp growth, large operators have added between 3,000 and 7,000 new employees. This is an opportunity for such operators to look to achieve a greater level of efficiency in their operations.

Market watchers point out that the onus will be on the new government to launch next generation reforms in the telecom sector to sustain the growth story. A large number of policy initiatives, which could have helped the industry to overcome the current economic crisis, are awaiting Government approval. There should not be any more regulatory uncertainties, says a Delhi-based telecom player.


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## Screaming Skull

*Imports dip faster than exports; down 32% in March 2009​*
9 Apr 2009,

NEW DELHI: Indian imports are declining faster than exports. By value, the imports in March 2009 are 30% less than the same month last year,
according to early estimates made by the commerce department
.

This will be the third consecutive month showing fall in imports. Analysts say the sharp dip could be attributed to a decline in the countrys oil bill, slowdown in industrial activity, fall in global prices for commodities and industrial intermediates as well as a drop in exports.

Quick estimates for March 2009, calculated by the directorate general of foreign trade (DGFT), show a 32% drop to $16.05 billion, compared to imports worth $23.57 billion in March 2008. Imports fell 16% in January 2009 and 23% the following month.

However, as import grew fast in the first three quarters of 2008-09, the final figure for the fiscal will be $288 billion, which is 14.5% higher than the previous years $251 billion.

Exports, which fell continuously in the second half of 2008-09, recorded an even lower growth of 4% at $169 billion.
While we do not have disaggregated figures at the moment, we can safely assume that like the previous two months, a part of the decline in imports would be due to a sharp fall in the oil bill. However, trends also suggest a substantial fall in the non-oil imports which could be due to a slowdown in industrial activity, a commerce ministry official handling trade data said, requesting anonymity.

Imports have fallen across sectors ranging from machinery and electronics to cotton and metals in January and February.
The fall in imports has not been unexpected mainly due to the fact that exports have been falling over the past six months and a substantial proportion of our imports are inputs for exports, said Nagesh Kumar, director general, Research and Information System (RIS) for developing countries.

Falling prices of commodities worldwide are also contributing to a lower value of imports, he said. Prices of a number of commodities have come down including steel, which is a major ingredient in machinery and auto products. As a result, the import value of the products would also decline, he added.

The government will officially come out with revised trade figures for March 2009 either at the end of the month or early next month.


----------



## Screaming Skull

*Exports growth at 3.6% in 08-09, but to improve post-Sept ​*
New Delhi, April 8 Unfazed by the poor export performance of 3.6 per cent growth in dollar terms for the fiscal 2008-09, the Commerce Ministry contends that the worst is now behind and things will appear better post-September 2009.

Talking to Business Line here, the Commerce Secretary Mr Gopal K. Pillai said that after clocking 35 per cent growth during the first half of last fiscal, exports began skidding since October till March 2009 to bring down the overall export growth to 3.6 per cent in dollar terms.

The breakdown in export juggernaut owed primarily to global meltdown and collapse of the financial system in the developed world, which dried up trade finance to the dismay of exporters, he said, citing that Rs 60-crore worth of Indian carpet exported to the US had not been settled by importers.

He said the way thousands of US companies seek bankruptcy clause, Indian exporters are unsure as to ship merchandise goods lest their export receipts should be doubtful.

Asked about the prospects of the current fiscal, which has barely begun, Mr Pillai said that the WTO itself has forecast that world trade would contract by 9 per cent and if I can hold on to what I have, it would be good. He said it all depends upon how fast the US banking system gets stabilised, following the G-20 initiatives and the Obama Governments own rescue operations.

On segments that showed up a better show in exports, Mr Pillai referred to the relatively positive performance of pharmaceuticals, engineering sector, plastics and agricultural exports, while textiles, gems and jewellery, leather, marine products had all fared below par due to the tepid growth in the US and Japan, the two major markets.

To a query as to how agricultural exports have fared better in the face of ban on export of wheat, non-basmati rice and edible oil, he said the ban on wheat export could be lifted if the domestic price situation improves couple of months down the line.

This would be done by the new Government after reviewing the stocks and evolving global scenario concerning wheat production in Argentina and the US.

On export of edible oil, Mr Pillai said when the country is dependent on 50 per cent of its supply from import and it is allowing such imports at zero duty now, export of edible oil is ruled out now except some coconut and non-edible oil. He said export of basmati rice, fruits and vegetables and some relaxation in the case of non-basmati rice would contribute to higher agricultural export growth.

About the new foreign trade policy (FTP) for 2009-14, Mr Pillai said that it would be unveiled after the new Government takes over and a call on export target would also be taken only at that time. He said the inputs the Commerce Ministry obtained in the run-up to the FTP confirmed that what exporters want is trust, a lot of autonomy to export and not getting tied down in too many transaction cost. This would be the cornerstone of the new five-year FTP, he said.

Mr Pillai also disclosed that even as merchandise exports growth was a single digit last fiscal, exports from SEZs have clocked a handsome 37 per cent growth. He said there is no proposal for fresh SEZ with nobody betting his money. However, the existing SEZs have been creating more jobs and contributing to export. He said in the Mahindra World City SEZ, Jaipur which he visited on Monday, Deustche Bank has set up a BPO call centre and Infosys also has a BPO call centre. He said that this ITSEZ is the largest one with 750 ha. Despite surrender of five SEZ approvals by DLF, as many as 42 SEZs await notification, he said.

To a query about the India-Asean Summit in Thailand on April 10-11, he said the Union Commerce and Industry Minister, Mr Kamal Nath, will represent the Prime Minister. But, the official level delegation is also holding parallel meetings to thrash out lingering issue of scheduling of tariff cuts so that the new government would take a final call about signing the India-Asean FTA.


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## Screaming Skull

*Exports in March seen at $12-14 b​*
New Delhi, April 4 The countrys merchandise exports may have achieved the scale-down target of $170 billion during the just-ended fiscal year 2008-09, a top commerce ministry official indicated here on Saturday.

I expect that in March 2009 exports would be about $12-14 billion, Mr G.K. Pillai, Commerce Secretary, told reporters on the sidelines of a meeting organised by the Indo American Chamber of Commerce (IACC).

This estimate was, however, lower than the $16.3 billion exports recorded in March 2008. It would be the sixth straight month of downslide in fiscal 2008-09.

With the merchandise exports during April-February 2009 touching $156.6 billion, the Commerce Secretarys expectation of $12-14 billion exports for March 2009 implies that the total exports would range between $168 billion and $170 billion during 2008-09.

The official data for March 2009 export performance is due on May 1.

India had earlier pegged the merchandise exports target at $200 billion for 2008-09, but later scaled it down to $170 billion in the wake of the global economic crisis.

The economic recession in the developed markets had led to slump in the demand for merchandise.

The first six months of 2008-09 had seen robust growth of over 30 per cent in exports, which has to a large extent ensured an increase, albeit a modest one of 3-4 per cent, for the entire fiscal year 2008-09.


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## Screaming Skull

*Rs 325-cr package unveiled for leather, textile export sectors​*
New Delhi, Feb. 26 A special package of Rs 325 crore for the employment-intensive leather and textiles export sector, fast settlement of duty credit scrips for duty paid in export production and extension of such scrips for import of even restricted items after payment of duty are the key features of the trade facilitation measures the UPA Government unveiled on Thursday.

The procedural simplifications would help prune high transaction costs to trade and industry.

Announcing the final stimulus to the slowdown-hit export sector, the Union Commerce and Industry Minister, Mr Kamal Nath, said the special package for the twin sectors would be given for exports to be undertaken from April 1.

The threshold slab for premier trading houses has been reduced to Rs 7,500 crore from the current Rs 10,000 crore. The Director General of Foreign Trade, Mr R.S. Gujral, clarified later that this would help seven to 10 companies by way of relief to boost their exports. He said under the DEPB/duty credit scrip, import of restricted items such as HR coil could be done after payment of duty.

Under the Export Promotion Capital Goods (EPCG) scheme, the obligation for all exporters where the decline of the export of the products was by more than 5 per cent, would be reduced proportionately. This has been done for 2009-10 for exports executed during 2008-09, while the export obligation period against advance authorisations has been extended up to 36 months from the current 24 months.

Electronic message and transfer facilities for advance authorisation and EPCG schemes would be available for shipments from Electronic Data Interchange (EDI) ports from April 1.

For import of precious metals, STCL, Diamond India, MSTC and Gem and Jewellery Export Promotion Council and Star Trading House (only for gem and jewellery sector) have been added to the list of designated agencies. Import restrictions on worked corals have been abolished. Authorised persons of gems and jewellery units in Export-Oriented Units would be allowed personal carriage of gold in primary form up to 10 kg in a financial year, subject to RBI and customs guidelines.

To boost agricultural and rural exports, a re-credit of 4 per cent special additional duty, in case of payment of duty by incentive scheme scrips such as Vishesh Krishi and Gram Udyog Yojana, Focus Product Scheme and Focus Market Scheme would now be allowed.

The Minister said Bhilwara for textiles and Surat for diamonds have been recognised as towns under export excellence so that all the benefits for such clusters of export activity would accrue to them. For advance licence issued prior to April 1, 2002 the requirements of modvat/cenvat certifications would be dispensed with in case of customs notification prescribed for payment of countervailing duty.

While the procedural formalities for claiming duty drawback refund and refund of terminal excise duty for deemed exports have been further simplified, Mr Kamal Nath said that reimbursement of additional excise duty levied on fuel would also be admissible for EOUs.


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## Screaming Skull

*Rupee recovers sharply, at 50.27 vs the dollar​*
MUMBAI: The rupee recovered sharply, late on Wednesday afternoon, trading at its day's high of 50.27 against the dollar at 3pm. Earlier in the
day it was trading lower on global dollar strength and sharp correction in Asian stocks. On Monday - the last trading session - the local unit had closed at 50.04 per dollar. The main share benchmark BSE Sensex staged a dramatic recovery to trade 1.7% higher at 10772 at 3 pm.

"The local unit is tracking the global recovery of the dollar against major currencies," says L Subramanian, chief dealer forex at ICICI Bank. "With 50.72 as the resistance, the rupee is likely to trade within that level," he said.
The dollar and yen rose on Wednesday as fall in share prices and worries about upcoming earnings results for large US companies prompted investors to make a beeline for the greenback.

The benchmark 10-year bond yield fell below 7%. It was at 6.92% at 3pm on Wednesday- ahead of a scheduled buy back of securities by the RBI. Dealers said the market sentiment had got a boost from the adequate cash supplies in the market and the central bank's Rs 6,000 crore Open Market Operation (OMO) later in the day.

Other data that will be watched by the market will be the underwriting commissions announced by the RBI for the Rs 12,000 crore auction to happen on Friday. Call money was trading at a weighted average of 3.47%, near the reverse repo rate of 3.5% at 2 30 pm, as per CCIL indicating good liquidity. Banks parked close to Rs 43,000 crore in RBI's morning money market operation.


----------



## Screaming Skull

*But who will be finance minister?​*
If it is true that prime ministerial hope is springing about like a playful kangaroo in at least eight hearts, it seems easy enough to infer that at least 24 hearts more may be harbouring secret and not-so-secret hopes of becoming the finance minister.

Allow me, after the fashion of economists, to enunciate a rule: For every prime ministerial candidate, there exist at least three finance ministerial choices and eight finance ministerial hopefuls.

But while there has been a great deal of speculation and analysis about the next prime minister, no one has talked about the job that is really going to matter. So, during one of those interminable and mind-numbingly drab TV shows, I thought I would pose an even more important question: who will be the next finance minister? (The anchor, I am happy to report, was rendered speechless for about five seconds).

It is important to point out that even the worst possible prime minister, being aware of the need for credibility, would initially tend to assign an almost equal probability to all 24 hopefuls until bad sense begins to prevail. This has been known to happen thrice in the last 11 years.

Historically, this ministry has always been allotted with a great deal of care, except when some big business house has batted for a hopeful. Then, of course, all bets are off.

​
Having sounded that warning, let us list the possibilities without further ado. Only 14 names are listed below because I cant think of all the 24 hearts which are beating anxiously. Readers are therefore invited to write to the editor if they have any suggestions. As stated earlier, at this stage, each name has an equal probability of getting the job. So the following list is not a ranking. It is merely a choice set for the potential prime ministers to select from.

*Bimal Jalan:* Vast experience in the Finance Ministry and the RBI. Highly respected. Light touch administrator. Understands money and finance as few others do. Saw India through Asian crisis fallout. Wants to live down the 1990-1991 crisis when he was finance secretary. All parties love him.

*Yaga Venugopal Reddy:* Seasoned Finance Ministry man. Highly successful RBI Governor during 2002-08. Kept Indian financial system stable and out of trouble. Cannot tolerate fools with a smile. Will need Andhra push to become FM.

*Montek Singh Ahluwalia:* Man for all seasons. Suave. Well connected internationally. Not known to be a great administrator. Indifferent innings at the Planning Commission, especially in infrastructure investment. Not a good judge of sidekicks. Too close to Manmohan Singh and Congress for others to accept him. If Congress comes back, he will be FM (I hope).

*Vijay Kelkar:* Former petroleum and finance secretary. Currently, Chairman of the 12th Finance Commission. If BJP forms the government, he could be their choice, if they are sensible. (Big if, that).

*Arun Shourie:* BJP lore is that he almost got the job in 2002, when party (or one element in it) got in the way, as did some corporates.

Clear-thinking man who gets frustrated easily. Indifferent innings as disinvestment minister but not because he did not try. Good reformist credentials. Bad point: writes books.

*Arun Jaitley:* Former commerce minister and law minister. Brilliant mind. Got the right antecedents, too. This could be a make-or-break time for him. He will not want to become home minister as he does not like waking up early.

*N. K. Singh:* Doer par excellence. Top-class administrator. Knows how to operate the system. Marvellously well connected, at home and abroad. Could be FM if Nitish Kumar has his way. May not be able to achieve much.

*C. Rangarajan:* Grand Old Man of economic administration. But a monetarist, which could be a problem during a phase of fiscal dominance. Almost became FM after P. Chidambaram was shifted. Manmohan Singhs first choice then. But after May?

*Satish Chandra Mishra:* Mayawatis Brahmin mascot. If she becomes PM, she may want him as FM. The civil service will be pleased. Acceptable face to all Manuwadis.

*Sitaram Yechury:* He could become FM if the Left plays a prominent part in the next government. Less harmful to business than his boss. Talks sense more often. Easily tameable by the civil servants.

*Amar Singh:* If Mulayam Singh has his way in the Yadav-Dalit group of UP-Bihar, he could be a contender. Good at handling money and finance, and an excellent negotiator.

*H. D. Kumaraswamy:* Former CM of Karnataka, Daddy Deve Gowda may want him as FM if he himself cant become PM.

*Naveen Patnaik:* He may need a job soon, and would be acceptable to all parties. Depends on whom he makes a deal with.

*Nandan Nilekani:* Dark horse. Corporate and middle-class India will be thrilled to have him. High credibility. Capacity for hard work. No baggage. Will do the right thing by the country.


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## Screaming Skull

*47 Indian cos among Forbes Global 2000 List​*
9 Apr 2009

NEW YORK: As many as 47 Indian companies, led by corporate behemoth Reliance Industries and the country's biggest lender, State Bank of India, have made it to the list of world's biggest 2,000 companies by US magazine Forbes.

However, five Indian companies -- scam-hit IT firm Satyam Computer, realty firm Unitech, Suzlon Energy and two Anil Ambani group firms Reliance Power and Reliance Capital -- have been dropped out of the Forbes 'Global 2000 List' this year.

Four Indian companies, Hero Honda Motors, Sun Pharma, Indian Bank and Jindal Steel and Power Ltd are the new entrants to the list.

Mukesh Ambani-promoted RIL, State Bank of India, and Oil and Natural Gas Corporation are among the top 200 companies ranked 121st, 150th and 152nd, respectively, on the list. 

All the three top Indian firms have improved their ranks considerably from their last year's positions, wherein RIL had been 193rd, SBI at 219th spot, while ONGC was ranked 198th.

Overall, the list is topped by industrial conglomerate General Electric, followed by Dutch oil and gas major Royal Dutch Shell, Japan's Toyota Motor, ExxonMobil and UK's BP in that order.

The rankings have been compiled on the basis of a composite score of sales, profit, assets and market capitalisation.

However, British banking giant HSBC Holdings has dropped to the sixth place this year from its numero uno position in the last year's list.

The other top Indian firms on the list include Indian Oil (207th), NTPC (317th), ICICI Bank (329th), Tata Steel (463rd) and Bharti Airtel (508th).

The Indian presence is almost evenly divided among the private and state-run companies. While none of the Indian companies has managed to find a place among the top 100 firms this year as well, the elite club includes a firm run by person of Indian origin.

Lakshmi Mittal-headed steel behemoth ArcelorMittal is at 41st position. However, Vikram Pandit-run banking giant Citigroup has dropped to 472nd rank this year.

Further, Indra Nooyi-run beverage major PepsiCo has been ranked 115th, India-origin Francisco D'Souza-headed Cognizant Technology Solutions at 1389th place. Motorola, headed by Sanjay Jha, is at 658th place.

According to Forbes, the Global 2,000 companies have combined revenue of 32 trillion dollars, 1.6 trillion dollars in profit, 125 trillion dollars in assets and 20 trillion dollars in market capitalisation.


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## Hasnain2009

Screaming Skull said:


> Unfortunately I don't have recent figures but here are some stats from 2008.
> 
> * In 2008, the average volume of business conducted on the BSE (sensex) was approximately $40 billion each month.
> 
> * The number of shares traded each month on the BSE is in the range of 40 - 50 million.
> 
> * The total market capitalization for the companies traded on the BSE is in the area of $1.8 trillion. All of the above dollar values are stated in USD.
> 
> Total volume as of 2006 was US$ 980 billion
> 
> Check out the following links for more info
> 
> Following are the other stock exchanges in India
> 
> * Bangalore Stock Exchange
> 
> * Bhubaneshwar Stock Exchange
> 
> * Bombay Stock Exchange (BSE)
> 
> * Calcutta Stock Exchange
> 
> * Cochin Stock Exchange
> 
> * Coimbatore Stock Exchange
> 
> * Delhi Stock Exchange Association
> 
> * Guwahati Stock Exchange
> 
> * Hyderabad Stock Exchange (HSE)
> 
> * Inter-connected Stock Exchange of India
> 
> * Jaipur Stock Exchange
> 
> * Ludhiana Stock Exchange Association
> 
> * Madhya Pradesh Stock Exchange
> 
> * Madras Stock Exchange (MSE)
> 
> * Mangalore Stock Exchange
> 
> * National Stock Exchange of India (NSE)
> 
> * Magadh Stock Exchange of India - In Patna, Bihar
> 
> * Over The Counter Stock Exchange of India (OTCEI)
> 
> * Pune Stock Exchange
> 
> * Uttar Pradesh Stock Association
> 
> * Vadodara Stock Exchange
> 
> * Meerut Stock Exchange
> 
> * United Stock Exchange (starting in June 09)
> 
> Out of these the National Stock Exchange of India (NSE) is comparable to BSE with a market cap close to US$ 1.6 trillion.
> Check out the following links for more info
> 
> 
> BSE - Key statistics
> 
> Bombay Stock Exchange
> 
> General Information - National Stock Exchange (NSE) - India Finance & Investment Guide
> 
> Bombay Stock Exchange - Wikipedia, the free encyclopedia
> 
> National Stock Exchange of India - Wikipedia, the free encyclopedia
> 
> List of stock exchanges - Wikipedia, the free encyclopedia



Thank u!!
And KSE market cap was only $80bn in 2008, and yesterday we saw trade of 480million+ shares!!


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## Screaming Skull

*Make calls from US to India at 1 cent per minute!​*
April 09, 2009

Telecom service provider Bharti Airtel on Thursday launched a 'never before' calling rate of 1 cent a minute on its online calling card service www.airtelcallhome.com.

This will enable Non-Resident Indians in the US to call friends and family back in India at the most competitive rates in the market, Airtel said.

"With our IndiaOne offer, we are delighted to take the lead in offering the best value for us to India calling. Our tariff at 1 cent per minute is a compelling customer proposition and is in line with Airtel's commitment to make calling to India more affordable." said Syed Safawi, executive director, Mobile Services, Bharti Airtel Ltd.

"Through this offer we are looking at delivering unmatched value to the 3 million strong NRI population in the US, who reach out to their friends and family in India," he said.

Airtel has also launched a host of exciting new features for the US consumers, including auto recharge, free SMS from the web and audio conferencing facilities.

Subscribers will be able to buy the online calling card for just $10 by logging into the Web site www.airtelcallhome.com or through phone by calling toll free 1-877-247-5150 from the United States.


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## Screaming Skull

*India yet to decide on $11-bn loan to IMF​*
April 09, 2009

If India takes part in $500-billion resource raising programme of International Monetary Fund, as decided at the G-20 summit in London last week, it will cost the country up to $11 billion (Rs 55,000 crore).

"If the government decides to participate in the new arrangements to borrow, then based on the quota, that ($11 billion) could be the amount which the country will have to commit in principle to IMF," Economic Affairs Secretary Ashok Chawla said on Thursday.

However, Chawla did not elaborate as to when the decision on the issue would be taken.

Leaders of 20 advanced and developing countries decided to treble the resources of IMF from $250 billion to $750 billion, so that the multilateral institution could help the poor and developing economies, which have been hit by the global credit crisis.

India has already said that it would not require any IMF support in the wake of comfortable foreign exchange reserves of about $250 billion.

However, New Delhi has not so far made any commitment towards contributing to the fresh resources of IMF, as was done by China, European Union and Japan.

On the issue of review of quota and increased representation in the multilateral agency, India still has time to decide on the strategy.

"The review of quotas or the rebalancing of quotas is not immediately on the table in the sense that no decision has yet been taken on that," said Chawla, who was part of the Indian team at G-20 summit.

An official communique issued at the end of the G-20 summit had recognised the importance of reforming international financial institutions to ensure they can assist members effectively and that emerging, developing and poor economies must have greater voice and representation.

"What we are looking for is going to be discussed and finalised over a period of time, which is, according to the communique, up to January 2011," the finance ministry official said.


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## Screaming Skull

*India launches its biggest auction of oil fields-Expects investment worth $3 billion​*
April 09, 2009

India on Thursday launched its biggest-ever auction of oil and gas blocks, expecting $3 billion investment in exploration of 70 areas on offer for bidding.

The 75 per cent import dependent nation also offered for bidding 10 areas for extraction of gas from below coal fields, known as coal bed methane (CBM), at a time when energy firms worldwide are cutting investments because of falling crude prices and economic recession.

"We are offering 24 deep-sea blocks, 28 shallow water blocks and 18 onland blocks for bidding in the eighth edition of New Exploration Licensing Policy (NELP)," Petroleum Secretary R S Pandey said. Bidding for CBM-IV and NELP-VIII rounds will close on August 10, he said.

Asia's third-largest energy consumer is aiming to cut oil imports and has till now awarded 203 in the previous seven rounds with over $11 billion committed in exploration

spend. Besides, 23 blocks have been awarded in the previous three CBM rounds. Over 6 Trillion cubic feet reserves have already been established in four CBM blocks.

"After seven rounds, the area under exploration has increased more than four times to 48 per cent of Indian sedimentary basin area from 11 per cent before implementation of NELP," he said.

Since its advent in 1999, NELP has given 68 oil and gas discoveries in Cambay onland, North East Coast and Krishna Godavari deep-water areas, leading to an accrual of over 600 million tonnes of reserves.

"Reliance (Industries) beginning production from its Krishna Godavari basin KG-D6 block will bring in more investors," Pandey said. "Besides, the start of crude oil production from Cairn India's Rajasthan fields, which is expected any day now, will augur well for the round."

Asked if economic slowdown would impact NELP-VIII, he said: "In our mind, the most effective antidote for meltdown is generation of economic activity."

The worldwide spending on oil and gas exploration may drop 12 per cent in 2009 to $400 billion, Barclays Capital Research has stated.

"Economic meltdown will not last for ever, may be six months or 12 months. The NELP-VIII bids will be finalised in 6-9 months by which time the world will enter a better phase," Pandey said.

Oil regulator V K Sibal said the KG-D6 field of Reliance in Krishna Godavari basin was just the tip of the iceberg and more surprises lie in store on the east coast. "This is the best time to get exploration assets. It will be available more easily. So, I think medium to aggressive bidding (will be) there."


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## Screaming Skull

*FDI dips in Feb but annual inflows show growth​*
9 Apr 2009,

NEW DELHI: Foreign direct investment to India dipped to $1.49 billion in February from $5.67 billion a year ago amid the global credit crunch,
but inflows in the 11-month period (April-February 2008-09) of the fiscal have already crossed the inflows in the entire preceding fiscal.

Despite over 73 per cent year-on-year drop in inflows in February, the FDI for the 11-month period of fiscal 2008-09 has aggregated to $25.38 billion against $24.57 billion in the previous fiscal, an official said.

Inflows remained robust in the first half of 2008-09 but with the deepening of international financial crisis, it slowed down.

Though the country would not achieve even the truncated FDI target of $30 billion in 2008-09, it has already seen an inflow expansion in the midst of difficult global environment.

India's cumulative FDI inflows from April 2000 to February 2009 stands close to $88 billion.


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## Screaming Skull

*FIIs buy shares worth Rs 171 crore​*
9 Apr 2009

MUMBAI: Foreign institutional investors on Thursday were the net buyer of shares worth Rs 170.92 crore amid a marginal gain of nearly 61.52
points or 0.57 per cent in the benchmark index of the Bombay Stock Exchange.

FIIs were the gross buyer of shares worth Rs 2,076.63 crore whereas they sold stocks worth Rs 1,905.71 crore, resulting in a net purchase of shares worth Rs 170.92 crore, the provisional data available with the BSE shows.

On Wednesday, FIIs were the net buyer of shares worth Rs 484.10 crore, the latest data available with the market regulator Securities and Exchange Board of India shows.

Similar trend was witnessed among the domestic institutional investors (DIIs). As per the BSE data, DIIs were the net purchaser of stocks worth Rs 308.39 crore.

However, two other market participants -- brokers on the behalf of their clients and non-resident Indians (NRIs) booked profit and were altogether seller of shares worth Rs 77.42 crore.

Proprietors, on the other hand, were optimistic about the market and invested a net Rs 24.90 crore in shares.

BSE's 30-scrip Sensex today closed at 10,803.86 points, up 0.57 per cent or 61.52 point.


----------



## Screaming Skull

*TCS, Wipro, Infosys among cos hiring people: Forbes​*
9 Apr 2009, 

NEW YORK: In these times of dwindling job opportunities, American magazine Forbes has named Indian IT majors, Tata Consultancy Services, Wipro and Infosys, among the companies which are either hiring or laying off lesser number of employees.

The three Indian entities along with the likes of UK retailer Tesco and Finnish mobile phone maker Nokia are part of the Forbes list titled 'Global 2000 Companies That Are Hiring'.

In addition to these five companies, UK's Compass Group, IT entity Accenture, Germany-based Metro AG, Mexico's Femsa and France-based Veolia Environment also feature in the list.

"Jobs openings are scarce, but these companies are either hiring or laying off relatively few workers," it said. The magazine noted that technology and service firms dominate the "list of job creators". 

These firms are among the world's 2000 biggest companies compiled by Forbes and the league is topped by American industrial conglomerate General Electric. It also includes 47 Indian entities.

Forbes said TCS has about 1,30,000 employees whereas Wipro has a total employee strength of 97,000 and Infosys' has nearly 1,03,000 employees.


----------



## Screaming Skull

*Bharti's $750-m IBM IT deal touches $2.5-b mark​*
9 Apr 2009

NEW DELHI: Indias largest private telecom company, Bharti Airtels 10-year $750 million outsourcing deal with IBM has touched the $2.5 billion
mark as of March-end 2009, a top executive familiar with the deal told ET. This week, Bharti and IBM are set to kick off celebrations in Delhi to mark the halfway tenure (five-year mark) of this first-of-its kind IT outsourcing deal.

Riding on the success of this deal with Bharti, IBM had also signed similar outsourcing deals with Vodafone and Idea Cellular last year, worth $1.2 billion and $900 million, respectively. In February this year, IBM also announced an IT outsourcing deal with Malaysias leading operator Maxis. Executive familiar with this partnership said that the Maxis deal was too, similar to the ones IBM has with the Indian operators.

The Maxis deal is estimated to be worth around $300 million and was largely handled by the IBMs Indian team that had handled similar projects here, explained an executive who tracked the development. Additionally, leveraging its partnership with Bharti, the US-based software major is in talks to extend this IT outsourcing model with Africas largest telco MTN in a deal that is estimated to be worth about $2 billion, this executive added.

In 2004, Bharti and IBM had expected that the IT outsourcing deal would yield revenues to the tune of $750 over the 10-year period. But, projections proved to be widely underestimated as Bharti experienced record growth over the last couple of years.

The growth is best understood if we consider the figures. Bharti had about 6 million mobile customers when the deal with IBM was signed in 2004, but the telcos subscriber base has reached over 94 million at present. Bharti is also adding close to 3 million new customers per month, equivalent to 50% of its subscriber base in 2004.

IBM has bagged and executed several telecom projects globally over the last two decades, but until recently, it was involved only in three end-to-end IT infrastructure transformation projects, all of which were in India. The Maxis-deal, the latest addition to the ITs majors kitty is a clone of its deals here.

Bharti, which recently launched mobile services in Sri Lanka, has outsourced all its IT requirements in the island nation to IBM. It also handles the IT operations for Jersey Airtel, a subsidiary of Bharti which offers mobile services in Channel islands in Europe.

Last year, IBMs BPO arm in India bagged a six-year contract to provide voice and back-office services including customer service, collections, and customer retention for Bhartis premium customers. After that Bharti and IBM also signed a $150-million deal under which the software major would handle all IT operations for the telcos direct to home (DTH) television and Internet protocol TV (IPTV) services.

Beyond IT outsourcing, Bharti and IBM have also put together an unique model and invested $100 million to build a service development platform (SDP ) to tap increased revenues from valueadded services. In fact, Bharti has already roped in over 200 companies including Infosys, Indiagames, Mobile2Win, Versa, Symbiotic, Pyro, Hungama and OnMobile amongst others on its service development platform (SDP ).

Bhartis SDP, which is the first-of-its-kind in India and perhaps even globally will allow these 200-plus companies to develop and offer services related to content, messaging and applications to all Airtel customers across services such as mobile, landline, broadband services or DTH service.

Bharti Airtels director, technology and customer service Jai Menon is of the view that over 1000 companies from India and abroad, which also includes individual developers, are likely to partner its SDP by 2010.


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## Screaming Skull

*BSNL may bid for telecom licence in Tunisia​*
9 Apr 2009,

NEW DELHI: State-run BSNL is planning to bid for telecom licence in Tunisia and get a footprint in the African market which has immense
potential.

"We are considering a proposal to bid for licence in Tunisia with Telecommunications Consultants of India Ltd," BSNL CMD Kuldeep Goyal told PTI. The management is still in the process of taking a decision, he said.

Goyal said poor tele-density of Africa and the growing mobile usage there are the key attractions to explore the region.

May 5 is the last date for submitting bid for the licence, which would be valid for 15 years, officials said, adding that the lincence is a composite one for fixed-line, 2G and 3G.

Analysts said the new operators trying to enter the Tunisian market have to face tough competition from the two existing operators.

They added that the minimum bid price may be a low $10 million.

The Tunisian market is well-penetrated with 80 per cent of the population owing mobile phones. Its total tele-density, including fixed lines, is 90 per cent.


----------



## Screaming Skull

*Rupee touches 50 per dollar as share rise​*
9 Apr 2009,

MUMBAI: The rupee rose to its strongest close in more than a month as the share market extended a winning streak into a sixth session on Thursday, raising expectations of sustained capital inflows that would support the currency.

The partially convertible rupee ended at 50.00/02 per dollar, its strongest close since Feb 25, having risen to 49.85 during trade, according to Thomson Reuters data

It had ended at 50.19/20 on Wednesday. The market will be closed on Friday for a holiday.

"With stocks remaining in positive territory at the close of trading, It was a sentiment-driven rise for the rupee," a trader with a state-run bank, said.

"But, there was dollar buying by a public sector bank, which could be for a defence-related payment. This cut the day's gains for the rupee," he added.

Indian shares rose 0.6 percent on Thursday to a six-month closing high. The benchmark 30-share BSE index has risen 12.9 percent in six sessions, and is up over 34 percent from its 2009 low hit on March 6.

Foreigners have been net buyers of more than $270 million of stocks in early April but are still net sellers of $1.4 billion so far in 2009.

Foreign fund flows have been a key factor for the rupee's fortunes. Last year foreigners were net sellers of more than $13 billion of stocks, and the rupee fell 19 percent.

Offshore one-month rates were quoting at 50.14/50.24 per dollar, slightly weaker than the onshore spot rate.


----------



## Neo

*Indias first shariah fund collects Rs50m ​* 
Thursday, April 09, 2009

MUMBAI: Indias Taurus Asset Management has collected about 50 million rupees in the countrys first actively managed Sharia-compliant equity mutual fund it launched in February, Chief Executive Waqar Naqvi said on Wednesday.

Around 5 crores, not bad given the fact that even very large fund houses collected some 2 crores or 3 crores, Naqvi said, referring to the mop-up. Taurus held average assets of about 2 billion rupees in March, making it one of the smallest players in Indias 35-member mutual fund industry.

While the enthusiasm was there, the market condition was really tough, he said, referring to a volatile Indian stock market that has led to a pause in inflows into the industry. New equity funds, not including Taurus, collected about 60 million rupees in the first two months of 2009, according to data from the Association of Mutual Funds in India.

Taurus fund joins the fast-growing Islamic investments industry estimated to be managing about $65 billion globally with nearly half of the money invested through mutual funds.


----------



## Gabbar

*India yet to decide on $11-billion lending to IMF*

New Delhi: 


If India takes part in USD 500- billion resource raising programme of International Monetary Fund, as decided at the G-20 summit in London last week, it will cost the country up to USD 11 billion (Rs 55,000 crore). 



"If the government decides to participate in the new arrangements to borrow, then based on the quota, that (USD 11 billion) could be the amount which the country will have to commit in principle to IMF," Economic Affairs Secretary Ashok Chawla said in New Delhi on Thursday. 



However, Chawla did not elaborate as to when the decision on the issue would be taken. 



Leaders of 20 advanced and developing countries decided to treble the resources of IMF from USD 250 billion to USD 750 billion, so that the multilateral institution could help the poor and developing economies, which have been hit by the global credit crisis. 



India has already said that it would not require any IMF support in the wake of comfortable foreign exchange reserves of about USD 250 billion.


----------



## DarkStar

I don't even know why Bharat is thinking about this. 

Of course it should invest in the IMF, World Bank, ADB, and all institutions. It will accrue good interest, and have political leverage over countries and institutions.

It would be extremely stupid to let this opportunity pass.


----------



## Screaming Skull

*India may see 75, 000 IT job cuts this year​*
10 Apr 2009,

MUMBAI: The Indian IT industry, already under pressure since the downturn began in the US financial, banking and insurance markets last year, is likely to see close to 75,000 job losses this year, according to senior executives of leading software companies.

US president Barrack Obamas policy on outsourcing had prompted some technocrats to estimate the extent of possible job losses in India at about 50,000 jobs in the first half of the new year itself. These job losses would be across sectors such as IT, ITeS and BPO, they added.

As on March 31, 2008 there were 550,000 direct jobs created by the IT industry in Bangalore, said Infosys board member TV Mohandas Pai. I would estimate close to 30,000 IT professionals, earning an average salary of Rs 5 lakh per annum, would have lost their jobs between April 2008 and March 2009 in Bangalore.

Mr Pai also said that for fiscal year 2009-2010, an additional 25,000-30, 000 jobs may be lost in Bangalore alone. These job losses are due to the fact that many companies have shed excess capacity as the growth rates of industries have decreased. It is possible that a fair number of these people would have found jobs in other industries too during this time at a lesser salary, he added. 

Mr Ravi Ramu, CFO of realty firm Puravankara and former CFO of Mphasis says about 50,000 jobs could be at risk next year. However, what worries him more is the spin off effect that will see a lot more losses. Every direct job in the BPO is supported by 6 indirect jobs. In reality, the spin-off will be even more negative. Even though, IT bigwigs are concerned about the high rate job loss, IT lobbying body Nasscom, doesnt think so.

According to Nasscom president Som Mittal, earlier the retrenchment was not on such a large scale as attrition was high. Companies are stressing more on performance issues in these times as they want to increase productivity. The coming times are uncertain and people are not hiring in large numbers as before. There is already a wage moderation that is happening across the industry and this will definitely reflect on the spending, he told ET.


----------



## Screaming Skull

*IBM bags another outsourcing deal from Bharti​*
10 Apr 2009,

CHENNAI: Global IT major IBM has bagged yet another outsourcing deal from Bharti Airtel, the countrys largest private telecom company. IBM will
manage the IT requirements of Bhartis hived-off tower arm, Bharti Infratel. The deal is estimated to be worth around Rs 250 crore, according to executives in the know of the development.

When asked on the IBM deal, the Bharti spokesman confirmed the development: Bharti Infratel has outsourced its IT platform to IBM to bring in a comprehensive architecture that provides benefits to its customers, suppliers and employees. This is a continuation of Bhartis strategic partnership with IBM across its various businesses, including
Bharti Airtel and Bharti Retail. But he refused to comment on the deal size and the duration.

Bharti Infratel is the second-largest telecom tower company after Indus Towers, which is a JV between Bharti, Vodafone and Idea Cellular. It has 42% in Indus and is estimated to have 65,000-70,000 towers across the country. In 2008, Bharti had offloaded up to 12.5% in Infratel to a clutch of PE players for about $1.25 billion, valuing the company at around $12.5 billion.

This is IBMs seventh deal with Bharti Airtel over the last five years. In 2004, the US-based IT major had bagged a $750-million outsourcing deal from Bharti and this deal has already touched the $2.5 billion mark as of March-end 2009. IBM also handles the IT operations for Bhartis recently launched operations in Sri Lanka and also for the telcos operations in Jersey where a Bharti subsidiary offers mobile services.

Last year, IBMs BPO arm in India, IBM Daksh, bagged a six-year contract to provide voice and back-office services, including customer service, collections, and customer retention, for Bhartis premium customers.

Bharti and IBM also signed a $150-million deal under which the software major would handle all IT operations for the telcos direct to home television and Internet Protocol TV services.

Beyond IT outsourcing, Bharti has also developed a $100-million service development platform in a tie-up with IBM for companies to develop and offer applications to Airtel customers across mobile, landline, broadband and DTH services.


----------



## Screaming Skull

*Plans on track, 1st car to roll-out before summer 2010: Nissan​*
10 Apr 2009,

MUMBAI: Japanese auto major Nissan, which is setting up a Rs 4,500-crore car-manufacturing facility with Renault in Chennai, said that the
project is on schedule and that its first car would roll out before summer 2010.

"There is no delay, our plans are on track and Nissan India will come out with its next-generation A-segment car- Micra, on schedule before summer 2010," Nissan Motor India's Managing Director and CEO Kiminobu Tokuyama said.

The 50:50 joint venture between Nissan and Renault at Oragadam near Chennai, will have a capacity to manufacture four lakh cars annually and Nissan will initially produce two lakh cars, which it then proposes to scale-up to manufacture up to three lakh cars in about four years time.

The Micra hatchback car is named March in Japan and the Indian version would be christened either Micra or March, he said.

As of now the joint venture stands, though Renault, which was to originally roll out its models by mid-2010, has not yet indicated when it would now launch its vehicles from the facility.

"As of now, we only know that their launch has been postponed," Tokuyama said.

Tokuyama said Nissan proposes to manufacture 4-5 models from its stable in the next 4-5 years.

The Micra would be available in both petrol and diesel engines, he said, adding that nearly two-third of its production would be exported.

The Ennore port in north Chennai would have a dedicated jetty for exports of Nissan cars and the company hopes to export 2-2.5 lakh cars annually in 3-4 years and sell 90,000-1,00,000 units in the domestic market.

Tokuyama made it clear that Nissan has no plans to manufacture a small car to take on the Tata's Nano at this facility, but Nissan-Renault would be collaborating with Bajaj Auto to manufacture a small car in the country.

He also said that Nissan's plans to manufacture light commercial vehicles with Ashok Leyland was on but its launch has been delayed because of the prevailing economic environment.

This would be at a different facility, which was coming up in Chennai, and the proposal is that Nissan India would market the vehicles, he said.


----------



## Screaming Skull

*Market may correct 15% post election: Merrill Lynch​*
7 Apr 2009

MUMBAI: Over the next 6-8 weeks, Merrill Lynch expects concerns of a hung Parliament post-election and expected slowing in corporate earnings will likely worry the market. We believe this could lead to a 15% correction in the markets, the investment bank says in a report.

On the elections, the brokerage believes (a) there will likely be a hung Parliament i.e. none of the three combinations - Congress-led UPA, BJP-led NDA and the Third Front - will be able to come to power (b) post-election results new alliances are likely -regional parties like BSP and AIADMK will be important (c) the probability of a Third Front government coming to power is still low but increasing in its view.

Our best case scenario would be a Congress government but with the Left being a key ally in it, it adds.

According to ML, most of the present alliances are fluid and many parties would be willing to reconsider their alliances post-elections. We think 2 regional parties - Mayawatis BSP and Jayalalitas AIADMK would play a crucial role in deciding the Government. The role of the Left parties, though weakened, should also be important, ML says.

Despite the break-down of seat sharing with Mulayam Singhs SP in Uttar Pradesh and Laloo Yadavs RJD in Bihar, ML thinks both will continue to be part of the Congress-led UPA. The investment bank thinks the UPA still has a slight edge since they can get Left support again. The BJP-led NDA, on the other hand, could need the support of BSP, Jayalalitas AIADMK, Naidus TDP as well as its old ally BJD. 

Commenting on the Third Front, Merrill Lynch says, We think it would be extremely implausible that a Third Front government is formed without the support of Congress or BJP, because Congress plus BJP should gain nearly 50% of the total seats. However, if the Congress/BJP cant form a stable Government, they may support a Third Front Government. While we think this is a lower probability event, the possibility has been increasing past few weeks.

The brokerage also expects that Third Front government will be negative for the Indian stock markets.

We think a positive scenario for the market is a BJP or Congress led government without the Left parties but has a low probability event in our view. Historically, markets have been edgy ahead of elections. We think concerns of a hung Parliament could lead to a 15% correction in markets this time, the report adds.

We would be defensive (Buy Hero Honda, Bharti) in the run-up to elections. We think infrastructure would be a priority for all Governments - Jaiprakash could be a gainer in the post-election scenario. We believe a Congress or BJP government without the Left could lead to reforms in (a) privatization and oil reforms (b) banking reforms (c) FDI in retail, aviation, insurance etc, ML said.


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## Screaming Skull

*BSE, United SE in talks for strategic alliance​*
8 Apr 2009,

MUMBAI: More Indian bourses are talking to each other to survive a long, fierce battle for business that's beginning to unfold in the local
financial markets. The country's oldest exchange, Bombay Stock Exchange, has had preliminary discussions with United Stock Exchange of India, the youngest of the bourse, for a strategic alliance.

A possible deal, that may take some time to consummate, could include equity participation, product sharing, marketing and distribution tie-ups and a common clearing house.

Senior officials of the two exchanges had first explored the idea a few months ago and had met more recently to discuss the possibility. But there's a string of tricky issues that have to be sorted out before the exchanges can move ahead with the deal. For instance, BSE, as a strategic player, would like to hold more than 5% in the new exchange. According to exchange officials, while United SE is now open to offering a higher stake to BSE, formal negotiations are yet to take place on the finer points.

"No final decision has been taken on the proposal," Jagdish Capoor, chairman of BSE, told ET.

United SE received SEBI approval to launch trading in rupee-dollar futures. A strategic alliance with BSE would help United SE market and distribute its products through BSE's existing member brokerages, while BSE's clearing house, set up with Bank of India, which is also a stakeholder in United SE, can be used to manage the margin requirements of currency derivatives brokers on a real-time basis. However, the two exchanges must arrive at a common risk management approach, technology platform and a management policy before a deal is signed.

United SE is the fourth currency futures bourse after National Stock Exchange, MCX-SX, promoted jointly by commodity bourse MCX and Financial Technologies, and BSE, which received SEBI's in-principle approval to offer rupee-dollar trading in the latter half of 2008. The new stock exchange has been promoted by key PSU lenders such as Bank of India, Bank of Baroda, Canara Bank, Andhra Bank, Allahabad Bank, Indian Overseas Bank and Oriental Bank of Commerce jointly with MMTC, that together will hold 48% in the bourse.

Other shareholders include Standard Chartered Bank, Federal Bank, Delhi-based brokerage Jaypee Capital and Tata Consultancy Services and, who will jointly own between 40 and 45% and national-level brokers and international exchanges with the remaining stake.

"For BSE," said Jaypee Capital managing director Gaurav Arora and an anchor investor of USEIL, "it would make sense to partner with USEIL since Jaypee is among the top three volumes contributors on NSE and MCX-SX currency segments. This apart, Jaypee also has a substantial share of volumes on NSE's equity derivatives segment, while BSE lags NSE by a wide margin in generating volumes on equity derivatives and both MCX-SX and NSE in the currency derivatives space."


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## Screaming Skull

*Wadias to raise debt for Danone buy​*
7 Apr 2009,

BANGALORE / MUMBAI: The Wadia family is raising debt from ICICI Bank for buying out Danone stake through a combination of corporate guarantees
and pledging of direct and indirect promoter holdings in Britannia Industries, people close to the situation said.

ICICI Banks $200 million five- year facility comes with a ballooning interest regime  425 bps for first two years and 675 bps for remaining three years. However, the Wadia group will explore ways of repaying the loan facility within two years, one source added.

The Wadia family is offering pledge the entire shareholding of the acquirer Leila Lands, a Mauritius-based entity, and another investment firm Naira Holdings, BVI.

It is believed that promoters have also gone for collateral pledging of their entire 50.96% stake in Britannia  routed through UK-based Associated Biscuits International Holdings  with an undertaking not to sell the stake without lender consent.

A Wadia group spokesperson declined to comment on financing details calling it speculative at this of time. Citibank is advising Danone on the transaction.

Sources said five Singapore-based investments vehicles of Wadias, which were used to mop up the shares of the late Rajan Pillai, have also given a non-disposal undertaking to the bank.

The loan covenant also stipulates that the value of shares in the custody of the lender and the investments portfolio of Naira Holdings  estimated at $70 million  should not be less than 1.7 times the outstanding facility at any given point of time.

And if the security created falls below the threshold value, the Wadia family will have the option to reduce the outstanding loan amount, or sell investments charged to the bank for prepaying the entire amount.
According to the loan schedule, Wadias will have to pay $40 million at the end of the first year, $20 million at the end of the second year and $140 million at end of the fifth year.


----------



## NSG_BlackCats

*India among top 5 developing nations: UN*​
New Delhi: India ranks among the top five developing countries in production of six major industrial items, including textiles, motor vehicles, chemicals and basic metals, according to a UN agency UNIDO. 

In four out of the six industrial products - textiles, chemicals and chemical products, basic metals and electrical machinery and apparatus - India figures at number two only behind China. 

India's annual growth rate of manufacturing value added (MVA) has risen from 6.9 per cent in the period 2000-2005 to 12.3 per cent between 2005 and 2007, according to the year book of the United Nations Industrial Development Organisation (UNIDO). 

It found that the share of MVA in India's gross domestic product (GDP) has risen to 14.8 per cent in 2006 from 13.8 per cent in 2001. 

UNIDO found that the developing countries now produced almost 30 per cent of the world MVA compared to 16 per cent in 1990. 

"The increasing share of developing world vis-à-vis industrialised countries is also explained by the shift of location of manufacturing, especially assembling of final products from industrialised countries to developing countries," the UNIDO said. 

LINK


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## Screaming Skull

*Duty-free white sugar imports allowed: Sources​*
10 Apr 2009,

NEW DELHI: India has agreed to allow duty-free imports of white sugar and exempt overseas purchases of raws from an export obligation, trade and
government sources said on Friday.

The government sought permission from the Election Commission to let three state-run trading firms and a farmers' cooperative import up to one million tonnes of tax-free white sugar and waive an export obligation on imports of raws at zero duty, officials said.

"It has been decided that both- white sugar imports and waiving the export obligation of imports of raw sugar- will remain in vogue till July 31," a senior trade official said.

The State Trading Corp of India Ltd, MMTC, PEC and National Agriculture Cooperative Marketing Federation of India (NAFED) would be asked to import white sugar totalling one million tonnes, a top government official said.


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## Screaming Skull

*Wheat buys may be higher than estimated to stop distress sales​*
10 Apr 2009

NEW DELHI: Two years of high priced imports in 2006 and 2007, one year of record output at 78.5 million tonnes and now, slam dunk into subsidised
exports of massive central stocks. The United States department of agriculture (USDAs) February prognosis on Indias wheat glut situation and the necessity to subsidise exports from overflowing central reserves in May or even earlier may be set to prove prophetic.

Persisting reluctance from traders and flour millers to make large buys from UP, the largest wheat producing state, despite plunging support prices (between Rs 70-130 per tonne) has begun to spell out just that. According to current estimates wheat production this season could be only 76 million tonnes compared to earlier projections of 78.5-80 million tonnes.

Despite that, trade projections are that central buys will be higher than the targetted 24 million tonnes by almost two million tonnes, thanks to few buyers and the clear possibility of distress sales by farmers at the crucial election time. Last year, wheat output was 78.5 million tonnes and procurement by the government was 22.6 million tonnes.

Interestingly, the latest USDA report has pegged Indian wheat output at 78.6 million tonnes for 2008-09, compared to the governments estimate of 77.78 million tonnes. That is some two lakh tonnes over its earlier estimate, a record output for the second consecutive year.

Untimely inclement weather will not impact the total output of wheat but will impact the quality of produce in Punjab and Haryana. That could lead to around two million tonnes of poor quality wheat from these states. We are unlikely to purchase from either state due to higher prices (ruling at MSP of Rs 1,080 per tonne) and poor quality. Even if taxes are reimbursed, poor quality wheat means a much shorter shelflife. Gujarat and UP have much better quality crop. So, there is increased pressure on the FCI to buy, emphasises D P Singh of the All India Grain Exporters Association.

That means that the government will have to pick up more wheat than earlier targeted from these states to prevent distress sales. State agencies will also have to buy heavily. It will lead to godowns that are bursting at the seams and hike up pressure manifold on the government to open up exports early, he adds. A recent EgoM decided in principle to revoke the two-year old export ban but no specific date has yet been set.

Ironically, for two years running, in both 2006 and 2007, the governments miscalculation on wheat output and procurement from UP led to high priced imports. What that could cost the exchequer is anybodys guess, at this juncture. According to one wheat trader who procures for bigger companies, the timing is still too premature to project the extent of subsidy per tonne on wheat exports that the government may be forced to give in order to force out the commodity. But, the fact that subsidy will have to be given is virtually a foregone conclusion, he said.

The Centres refusal to tap into market output intelligence to clarify its own estimates on wheat is threatening to be yet another marked example of delayed and over cautious government policy bringing farming gains to nought.

With global wheat prices plunging of late, traders see little possibility of prices firming up by May in time for massive Indian exports to gain. We see no chance of global wheat prices firming up by May, irrespective of what analysts said earlier.


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## Screaming Skull

*US downturn dents demand for H-1B visas​*
New Delhi, April 9 The US economic downturn has hit the demand for H-1B work visas. The US has announced that it is yet to receive enough H-1B petitions to reach the cap of 65,000, stipulated for fiscal 2010.

The window for filing the H-1B petitions has been open for since April 1 and the muted response  though on expected lines  is a grim reflection of the weak US economy and the job scenario.

The visa cap has not been met yet as there is not enough business in the US. The visa update also validates our argument that H-1Bs are not being used to replace American workers, because if that was so, companies would have flocked to file petitions amid lay-offs in the US. That has not happened, the Nasscom President, Mr Som Mittal, told Business Line.

He said that Indian companies which had cornered 11,000 visas last year would have filed far less applications this year, but did not comment on specific numbers.

In 2008, four of the top five H1-B recipients were Indian IT firms including Infosys Technologies, Wipro, Satyam and TCS, while the fifth was Microsoft.

Infosys topped the 2008 list with 4,559 visas followed by Wipro (2,678), Satyam (1,917) and TCS (1,539). When contacted spokespersons of both TCS and Infosys declined to comment on the applications filed this year citing a silent period ahead of the results. However, a top industry expert said that total applications by India Inc. could have fallen by as much as 70 per cent.

Ms Poorvi Chothani, a US immigration attorney based in Mumbai, admits her firm has seen a 50 per cent drop in H-1B filings this time. Besides the fact that the basic demand is less, other factors such as a possible fear of a backlash in employing foreign professionals, and Troubled Assets Relief Program (TARP) curbs are likely to have influenced the filings, she said.

For FY2010, USCIS has reportedly received just about half the applications it needs for the 65,000 general slots, but has nearly all of the applications it needs to fill the 20,000 slots (US masters degree or higher that are exempt from the cap).

Earlier this month, Software giant Microsoft too had stated that it is filing less petitions for work visas due to the economic downturn.

Given that the H-1B filing are below the stipulated cap, the USCIS said Wednesday that it will continue to accept petitions, although it has not yet affixed a date for closing the filing window. It said that once it receives the required number of petitions to meet the respective caps, it will issue an update.

US businesses use the H-1B program to employ foreign professionals in speciality occupations that require theoretical or technical expertise in fields, such as scientists, engineers, or computer programmers. There is an annual limit of 65,000 on H-1B workers. Additionally, another 20,000 H-1B petitions are set aside for those who have earned a US masters degree or higher.


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## Screaming Skull

*India Inc asks Obama to avoid protectionism​*
10 Apr 2009,

NEW DELHI: India Inc on Friday asked the Obamba administration not to yield to public pressure on protectionism, stating that the 'Buy American' restrictive policy would dent America's credibility among global trading nations.

Indian industry leaders were reacting to protests early this week in the US against use of India-made steel for an oil pipeline project in Illinois, the home state of President Barack Obama.

"It is disappointing. The US administration should not give in to such demands, as protectionist measures go against the spirit of global trade," FICCI President Harsh Pati Singhania said.

The protectionist tendency can spiral from one industry to another and be a deterrent to free trade, he added.

Assocham said it reflects the increasing internal pressure on developed economies against outsourcing. 

"...Those who are advocating free economy are more for adopting protectionist measures because they are under internal pressure," Assocham Secretary General D S Rawat said.

India's iron and steel export to the US more than doubled to $ 924 million in 2008 over the year-ago period.

It may be noted that within a week of the US joining the G-20 declaration to "name and shame" the countries resorting to protectionism, hundreds of steel workers in US protested the use of India-made steel for an oil pipeline project in Illinois, the home state of President Barack Obama.

Nearly 1,000 protesters joined a rally organised by the United Steel Workers yesterday demanding the 'Buy American' policy for the US ventures, including the 2,000-mile Canada-US oil pipeline project.


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## Screaming Skull

*Stimulus measures to have effect from April-May ​*
NEW DELHI: With stimulus packages failing to spur industrial production, Chief Statistician to the Government, Mr Pronab Sen on Friday said the fiscal measures will have start having an impact on industry from April-May onwards.

In an interview to PTI, Mr Sen also attributed the fall in industrial production in February largely to negative growth in consumer non-durable goods, particularly sugar.

Stimulus packages will start having an effect from April-May onwards,'' said Mr Sen, who is also Secretary to the Ministry of Statistics and Programme Implementation. Mr Sen said tax cuts will have much quicker effects, but expenditure measures take so me time to produce results.

The Government has so far announced three stimulus packages in which excise duty was cut by six per cent and service tax by two per cent, planned expenditure was raised, infrastructure re-finance company IIFCL was allowed to mobilise resources through ta x-free bonds, and so on. However, despite these measures, industrial production is not showing any perceptible improvement.

In February, industrial growth again turned negative as factory output declined to a 15-year low of 1.2 per cent. (The) main reason for (the) negative number in February IIP (Index of Industrial Production) is that ... we saw negative numbers for cons umer non-durables and this is coming largely from sugar,'' Mr Sen said. - PTI


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## Screaming Skull

*Govt invites bids for 70 oil blocks under Nelp-VIII​*
10 Apr 2009,

NEW DELHI: The government on Thursday invited bids for 70 exploration blocks under the eighth round of New Exploration Licensing Policy
(Nelp-VIII). Domestic and global oil & gas exploration firms can submit their bids by August 10, petroleum secretary RS Pandey said. We have offered 24 deepwater blocks, 28 shallow water blocks and 18 onland blocks under Nelp-VIII, he said.

The ministry may also consider offering another 40-50 blocks in this round, if it gets better investor response. Oil ministry also announced the launch of 10 blocks under the fourth round of coal bed methane (CBM-IV) for extraction of gas from below coal fields.

Mr Pandey said that the global meltdown or volatility in global oil prices should not stop economic activities like exploration of oil and gas resources. The most effective antidote for slowdown is generation of economic activities.

Besides, investors take a long-term view, while undertaking exploration activities, he said. Everyone knows that the current crisis will not last forever...By the time bids are finalised  which may take eight to nine months  things should improve, he said.

Discoveries of oil and gas from Barmer and Krishna-Godavari basin have put India in global hydrocarbon map, he said. Reliance Industries has recently started gas production from its KG-D6 block. This will also attract investors to Indian sedimentary basins, he added. India had offered 57 blocks in Nelp-VII last year and awarded 44 to companies, such as BHP Billiton and Oil and Natural Gas Corp (ONGC). In the first six rounds, 162 blocks were awarded with an investment commitment of over $8 billion.

The 70 blocks offered under Nelp-VIII covers a sedimentary area of about 164,000 sq km. The 18 onland blocks are in Assam, Gujarat, Haryana, Madhya Pradesh, Manipur and West Bengal. Out of the 24 deepwater blocks, only one block has been offered in the KG basin, while 18 are located in Andaman. There are four blocks in the Kerala-Konkan areas, while one block is offered in the Mumbai deepwater. The 10 CBM blocks are located in states of Jharkhand, Orissa, Madhya Pradesh, Chattisgarh, Assam, Maharastra and Tamil Nadu.


----------



## Screaming Skull

*OVL, Reliance, IOC in talks for $16-18 bn Venezuela project ​*
NEW DELHI: Oil and Natural Gas Corp (ONGC), Reliance Industries and Indian Oil Corp (IOC), are coming together for the first time, to bid jointly for a vast oilfield in Venezuela, which will require an investment of $16-18 billion.

ONGC Videsh Ltd, the overseas arm of the state explorer, is talking to Reliance, IOC and Oil India for jointly bidding for a 40 per cent stake in a field in the vast Orinoco heavy crude oil belt.

We are evaluating the three massive fields that are on offer and will decide on bidding shortly,'' a top OVL official said here. Fields in the Carabobo region of the Orinoco belt would produce tar-like oil, which would need to be upgraded to higher-qua lity synthetic crude.

Venezuelan state-run Petroleos de Venezuela SA (PdVSA) will retain the remaining 60 per cent. he investment required is massive. The crude upgrade facility alone will cost $6-8 billion and so we are looking at partnership with other companies,'' he sai d. IOC may take a 2.5-5 per cent stake while OIL has been assigned a 2.5 per cent stake. The remaining 32.5-35 per cent will be split almost equally between OVL and Reliance. Each of the three fields on offer can produce 2 lakh to 4 lakh barrels of oil per day.


----------



## NSG_BlackCats

*Car exports from India surge 57% in FY09*​
NEW DELHI: At a time when global auto majors are struggling, carmakers in India have been able to expand their overseas presence with exports from 
the country registering whopping 57.04% growth in the last fiscal. 
According to the figures released by the Society of Indian Automobile Manufacturers (SIAM), passenger car exports from India touched 3,31,539 units in FY09 as against 2,11,112 units in the previous financial year. 

The country's largest exporter, Hyundai Motor India, witnessed an export growth rate of 63% at 2,35,345 units compared with 1,44,440 units in the year-ago period. 

Domestic market leader Maruti Suzuki India was a distant second, registering 32.58% growth in overseas sales at 68,834 units in 2008-09 as against 51,916 units in the previous fiscal. 

Overall vehicle exports from India grew by 23.60% at 15,30,660 units in the last financial year, while the same stood at 12,38,333 units in the previous fiscal, SIAM said. 

Exports growth in the last financial year was robust also in the two-wheeler category, which registered 22.50% rise at 10,04,174 units as against 8,19,713 units in the previous financial year.


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## NSG_BlackCats

*Microsoft ties up with HCL to outsource jobs to India*​
HOUSTON: Computer giant Microsoft has signed a USD 170-million five-year contract with India's HCL for outsourcing work for its online business 
productivity suite. HCL will provide 600 employees to support the contract and nearly 250 workers have already begun work on the project. 
Microsoft has not said whether this contract is to replace any existing agreement it has in India, or if this deal is an expansion of its current outsourcing scope. 

Despite the recent job cuts, Microsoft has been expanding its online services business and has recently announced plans to make its Business Productivity Online Suite, a software-as-a-service offering, available for trial and purchase in 19 countries.


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## Nihat

Economy has bottomed out; see +ve IIP no in April: Expert


Guys , it's all very nice posting news about Indian Eco. but what might be even better is that only relatively Important news is posted , every single article on the net I can see over here , surely news about Wheat and Rice , Individual Company contracts etc etc does not need to be posted.

Lets keep this a MACRO thread which gives a broad based idea of were the Indian Economy is going and how it's taking shape vis-a-vis the global economy.

Sorry if I offend anyone.


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## Screaming Skull

*Tatas, RIL, Infosys among world's 50 most innovative cos​*
April 10, 2009

Three Indian entities -- Mukesh Ambani-led Reliance Industries, diversified conglomerate Tata Group and IT bellwether Infosys Technologies -- have entered BusinessWeek magazine's list of world's 50 most innovative companies, topped by iPhone maker Apple.

The league of innovative firms also features NRI Lakshmi Mittal-led world's largest steel producer ArcelorMittal.

Among the 50 companies, Tata Group ranks 13th, Reliance Industries 15th and Infosys 26th.

Tata Group and Reliance Industries have been ranked ahead of American industrial conglomerate General Electric (17), German car manufacturer BMW (20), Japanese auto firm Honda Motor (22) and telecom major AT&T (23), among others.

However, while the Tata Group slipped in ranking from the sixth place in 2008, Reliance Industries has improved on its previous year's 19th rank. Infosys was not in the list in 2008.

BusinessWeek has placed ArcelorMittal at the 35th spot.

Among the top five, Apple is followed by Internet search giant Google at the second position. Both companies have retained their respective ranks from last year.

Japanese auto maker Toyota Motor, software major Microsoft and Japan's Nintendo are at the third, fourth and fifth positions, respectively.

The rankings are based mostly on a Boston Consulting Group survey of about 2,700 senior executives worldwide.

'The final list weighted the survey results 80 per cent, stock returns 10 per cent, and three-year revenue and margin growth 5 per cent each. In the case of privately held companies, BusinessWeek used metrics equal to industry performance to compare financial data,' the magazine said.

About Tata Group, the magazine said, 'Tata can still dazzle, even if its takeovers since 2007 of steelmaker Corus and Jaguar Land Rover look ill-timed now. After making Asia's fastest supercomputer, the $85 billion company just launched a $2,000 minicar, the Nano.'

On Infosys, the report said of all of India's IT giants, Infosys 'has been the most conservative when it comes to acquisitions, giving it plenty of cash to spend now if it chooses.'

Writing about ArcelorMittal, the magazine said CEO Lakshmi Mittal blazed a trail as he assembled the first truly global steelmaker.

'But even a lean structure and low-cost mills aren't enough to offset a plunge in industrial output and steel prices,' it added.


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## shrivatsa

Report: India discovers huge oil and gas reserves 


English_Xinhua 2009-04-10 15:39:01 Print 

NEW DELHI, April 10 (Xinhua) -- Four new regions of north Indian state Haryana have been found to be abundant in gas and oil reserves, the local Hindi daily Danik Bhaskar reported on Friday. 

Sedimentary studies in the area have revealed that 15 billion metric tones of gas reserves are likely to be present in the area. The government is now inviting Indian and foreign firms to hunt for gas reserves in Ambala, Yamunanagar, Kurukshetra and Panchkula, said the report. 

The firms will be allowed to explore a 1,930 square-kilometer area for oil and gas exploration. The areas to be explored fall under the Himalayan foreland. 

The Government expects to find good results on digging the area. V.K. Sibal, director general, Directorate General of Hydrocarbons, told the paper that the department has been studying the area for the last 10 years. It looks like Haryana has the potential to become a major hub for oil exploration in the country. 

The tenders for exploration by new firms will be floated under the ongoing New Exploration and Licencing Policy, said the report.


Report: India discovers huge oil and gas reserves _English_Xinhua


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## kallu_be

shrivatsa said:


> Sedimentary studies in the area have revealed that *15 billion metric tones* of gas reserves are likely to be present in the area. The government is now inviting Indian and foreign firms to hunt for gas reserves in Ambala, Yamunanagar, Kurukshetra and Panchkula, said the report.



15 billion metric tones > 600TCF ... whole report sounds fishy. If its real whole media has gone gaga over it by now.


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## shrivatsa

kallu_be said:


> 15 billion metric tones > 600TCF ... whole report sounds fishy. If its real whole media has gone gaga over it by now.



That's what i thought, Xinhua says dhainik baskhar reported it but i couldn't find any other report


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## NSG_BlackCats

*NHAI infused Rs 20,000 cr in highways projects in FY'09*​
NEW DELHI: The highways regulator has infused a whopping Rs 20,000 crore in various highways projects under NHDP in fiscal 2008-09, up 20 per cent 
from the previous fiscal, at a time when the Indian economy reeled under the impact of the global economic slowdown. 

"The National Highways Authority of India (NHAI) has infused Rs 20,000 crore in the National Highways Development Project (NHDP) in the last fiscal (2008-09)," an official said. 

NHAI's expenditure during the fiscal 2007-08 had been about Rs 17,000 crore, he said. 

"What is significant is that 60 per cent of the expenditure has been made in the last two quarters of the financial year 2008-09 despite the global economic slowdown. The expenditure was made in NHDP phases II and III projects," the official added. 

The highways regulator is responsible for the development, maintenance and management of over 66,000 km of national highways in the country and is implementing NHDP. 

NHDP phase II covers 6,647 km highways while phase III covers 8,074 kms. 

The official said the expenditure was made in nearly 200 ongoing government-funded and PPP (public-private partnership) projects. 

*LINK*


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## NSG_BlackCats

*Tech Mahindra wins bid for Satyam Computers*​
HYDERBAD: IT services provider Tech Mahindra is the new owner of Satyam Computer Services. The company bid the highest at Rs 58 per share, pipping Satyam Saga: Rise, fall and resurrection 
rivals engineering firm Larsen & Toubro and billionaire investor Wilbur Ross to the post.

Engineering firm L&T bid at Rs 45.90 per Satyam share, Kiran Karnik, chairman of the govt constituted Satyam board told reporters. 

Karnik also said that the Cognizant-Wilbur Ross combine had put in their bid at Rs 20/share for the fraud hit IT co. 

Tech Mahindra will have to pay Rs 1,757 crore to buy a 31% stake in Satyam Computer Services. The IT co will have a market cap of Rs 5,666 crore on expanded equity. Tech Mahindra will have to pay a total of Rs 2890 crore for 51% stake in Satyam. 

The acquisition will help the company, an arm of the Mahindra & Mahindra Group, to diversify into new areas instead of just depending on the telecom sector. 

The Satyam acquisition will help Tech Mahindra diversify its software services business, and compete aggressively with bigger rivals such as TCS, IBM, Infosys and Wipro. 

Satyam, which serves customers such as GE, GM and Ford will also help Tech Mahindra build a better portfolio of customers. 

Satyam has a 46,600 strong work force, land assets of 450 crore, besides the order book position. Its liabilities include the legal liabilities arising out of the class action suits filed by shareholders in the US, besides any liability arising out of the tussle with UK based mobile payments services provider Upaid.


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## Screaming Skull

*RBI issues a new Rupees ten coin​*

Jingle, jingle! RBI issues a new Rupees ten coin

New Delhi: The Reserve Bank of India (RBI) has issued a new coin for the denomination of Rupees ten. The new coin has been based on the theme of 'Unity in Diversity'.

It has an outer ring metal composition. Its bi-metallic or simply put, made up two metals.

The face of the coin is divided into three portions. The central portion bears the "Lion Capitol" of Ashoka Pillar.

RBI says the new coin is a stylised representation of "Unity in Diversity", a defining characteristic of India.

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## LCA

Highest ever GSM additions in March

*Highest ever GSM additions in March*

BS Reporters / New Delhi April 14, 2009, 0:22 IST

*The telecom juggernaut continued unabated despite an economic slowdown, with GSM technology service providers setting a new record by crossing the 10-million subscriber mark in March.*


In January this year, GSM players had recorded a 9.69 million increase in subscriber numbers, which included Reliance Communications&#8217; figures.

According to figures released by the Cellular Operators Association of India (COAI) today, GSM players added 10.84 million new subscribers in March, taking total GSM subscriptions for the fiscal year to 288.3 million. GSM services account for around 75 per cent of mobile subscriptions.

The numbers exclude subscriptions for Reliance Communications, the CDMA service provider that recently launched GSM services, because the company does not reveal GSM numbers separately.

If the estimates of 2.5 million to 2.7 million GSM subscribers for Reliance Communications are added, the total monthly increase for GSM subscriptions will be 13.54 million.

At this rate,* India&#8217;s GSM subscriber base is growing at more than double the monthly growth rate of China, which is adding around 6 million customers every month.* With over 600 million mobile customers, however, China is far ahead of India in terms of the mobile subscriber base.

&#8220;Though March has more days and companies push sales at the end of the financial year, we expect to see monthly incremental growth of 14 to 15 million consumers in 2009-10. *Our estimate is that mobile penetration will go up from 35 per cent currently to 50 per cent by the end of this financial year,&#8221;* said TV Ramachandran, COAI secretary- general.

*The COAI has predicted that India will have around 500 million GSM subscribers by the end of 2009-10 and over 800 million by 2012 . The country would hit the one billion market in a few years after that, the COAI said*

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## Neo

*India March exports down 31pc ​* 
Tuesday, April 14, 2009

NEW DELHI: Indias exports fell for a sixth straight month according to the latest provisional estimate for March, and are likely to extend the fall till September before recovering, the trade secretary said on Monday.

Recession in developed economies crimped demand for Indian goods and export growth slowed to 7.3 percent in April-February to $156.6 billion from a year earlier, sharply lower from close to 20 percent seen in 2007/08.

March exports, we have only the provisional estimates...It is just under $12 billion, G K Pillai told reporters, adding it would be about 31 percent lower from the previous year. This negative growth will continue up till September. Then, you will find a positive growth.

The demand for Indian goods in Latin America and South-east Asia remains quite high, but it needs to pick up in U.S. and Europe, which consume about 35 percent of Indian exports, he said.

The final figures for 2008/09 exports is seen touching a lower revised annual target of $170 billion and may remain flat at that level in 2009/10, he said. While exports, which make about a fifth of Indias gross domestic product, have been contracting since October, imports started falling from January as slowing demand at home cut import of capital goods and lower global crude prices slashed the fuel bill.

Pillai said Indias imports may have fallen 37 per cent in March. On Monday, Prime Minister Manmohan Singh said Indian economy may have grown slightly below 7 per cent in 2008/09, its slowest pace in the last six years, with analysts forecasting a further contraction in the current fiscal.


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## Neo

*Indian economy grew less than 7% in FY09: PM​*
MUMBAI: Indias economic growth slowed to slightly less than seven percent in the 2008/09 fiscal year that ended in March due to the impact of the global downturn, Prime Minister Manmohan Singh said on Monday.

We have recorded a growth of nine percent in the first four years of our government. Last year, because of the impact of global recession, the growth rate will be slightly less than seven percent, Singh told a televised news conference.

High borrowing costs and followed by the global crisis slowed Asias third largest economy last year, and analysts forecast less than 6 percent expansion in the current year to March 2010. A contraction in demand at home and abroad has cut Indias factory output and exports sharply since October.

Indias industrial output contracted 1.2 percent in February from a year earlier and exports were down more than a fifth. The global economy is in deep trouble and we are affected by it. But because of the measures we have taken, we had anticipated something of this sort, the effect on our economy is not as great as the impact on many other countries, Singh said.

On Monday, the trade secretary said provisional data shows exports down by about 31 percent in March from a year earlier, and it was likely to remain subdued in the next six months as global trade flows are seen contracting in 2009. Indias central bank has cut interest rates by 400 basis points since October, while the government has slashed duties and increased public spending to stimulate a slowing economy.

Policy makers are now debating on the need for more rate cuts and fiscal stimulus to revive growth. Some analysts expect the central bank to cut rates further when it reviews its policy on April 21.

A decision on further fiscal stimulus could be expected only after the April/May elections are over and a new government assumes office. Last month, the care-taker government said it will sell 2.41 trillion rupees ($48.2 billion) of bonds in the first half of 2009/10, two-thirds of its full-year target, anticipating higher spending needs in the coming months to revive growth.

In February, India revised upwards its fiscal deficit target to 6 percent of gross domestic product for 2008/09, from 2.5 percent earlier, as market borrowings surged in March quarter. It is estimated at 5.5 percent of GDP for 2009/10 fiscal year.


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## Screaming Skull

*Russia offers India role in uranium centre project​*
New Delhi, April 14: Russia has offered India the option of participating in its International Uranium Enrichment Centre (IUEC) at Angarsk, Siberia as a means of securing guaranteed fuel supplies in the future.

This was communicated to a visiting Indian delegation to Russia, headed by the Atomic Energy Commission Chairman, Dr Anil Kakodkar, on April 9.

The offer, made during deliberations between the two sides, includes investment possibilities for India in the IUEC, which is being set up under International Atomic Energy Agency (IAEA) supervision, sources said. The investments could be considered in lieu of India paying for nuclear fuel to be supplied to the Russian-built Koodankulam Light Water Reactor units and to existing Indian pressurised heavy water reactor units that are to be fuelled by Russian firm TVEL under a bilateral pact.

The enrichment centre is being set up by Russia for supply of uranium to countries with nuclear energy programmes under the IAEA safeguards. Russia is establishing the project in collaboration with countries such as Kazakhstan under the supervision of the nuclear watchdog at the Angarsk Electrolysis Chemical Plant in Eastern Siberia.

The Indian delegation visited the Angarsk Plant, which hosts the IUEC, and nuclear fuel supplier TVELs JSC Novosibirsky Chemical Concentrates Plant. According to sources, the Director of Angarsk Electrolysis Chemical Plant, Mr Alexander Belousov, made a pitch for India to invest in the IUEC project. The participation by India in the project, he said, would tackle the problem of guaranteed nuclear fuel supply to ensure safe and reliable operation of the Indian nuclear sector, according to sources.

Proposals regarding joint fundamental research were also discussed during the talks. Dr S.K. Jain, Chairman and Managing Director of the Nuclear Power Corporation of India Ltd, and Mr R. Gupta, Uranium Corporation of India Ltd chief, were also part of the Indian delegation.

Earlier, at the delegation level talks between India and Russia during the Prime Minister, Dr Manmohan Singhs Moscow visit in 2007, the Russians had indicated at the possibility of India investing in the proposed centre. Subsequently, however, there were reports of a rethink within the Russian government on Nuclear Non-Proliferation Treaty membership being considered as a prerequisite for IUEC participation.

The Angarsk facility has traditionally been associated with Russian civilian nuclear programme and had been kept completely out of the erstwhile Soviet Unions atomic weapons plan, thereby, making it easier for the plant to be put under IAEA control.

The enrichment centre would produce only low-enriched uranium, which cannot be diverted for building nuclear weapons. Uranium enriched to low levels can be used as fuel for nuclear power plants, but higher levels of enrichment make it possible to divert the fuel for the construction of the core of a nuclear bomb.

The Hindu Business Line : Russia offers India role in uranium centre project


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## Screaming Skull

*L&T signs MoU with Russian co for nuclear reactors ​*
MUMBAI: Larsen & Toubro (L&T) has signed a Memorandum of Understanding (MoU) with Atomstroyexport (ASE) of Russia for co-operation for Russian design reactors VVER 1000. The MoU was signed by Mr. M V Kotwal, Member of the Board & Senior Executive Vice-Pr esident of L&T and Mr. Dan Belenkiy President ASE in Moscow.

The MoU would form the basis of co-operation between the companies and address needs for equipment and other services arising from the agreement signed between India and Russia on December 5, 2008, for four additional reactors KK3-6 at Kudankulam in Tami l Nadu and other Russian reactors at new sites in India, the company said in its BSE press release .

L&T has been playing a leading role in equipment manufacturing, construction and project management for pressurized heavy water reactors in domestic nuclear programme.


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## Screaming Skull

*RBI knows banking better than US Fed: Nobel laureate​*
April 15, 2009

New York: Nobel laureate Joseph Stiglitz complimented the Reserve Bank of India last week for resisting pressures to deregulate the banking sector.

Stiglitz, a professor at Columbia University, said one reason India is "one of the least dark spots" in the gloomy global economic scenario is that its central bank has resisted such moves.

Stiglitz said India had largely averted a crisis that felled the United States because India's central bank did not act like its counterpart in the United States.

*"The Indian central bank understands central banking and regulation much better [than the US Fed]. . . There were some political pressures to deregulate and RBI resisted some of those pressures,"* Stiglitz said.

"Now I think the financial markets are thankful that India's central bank did resist those pressures. The result is that India's financial markets are in better shape than they would have been if the RBI allowed wholesale deregulation [the way the] United States has done," he said, while keynoting the India Conference at the Columbia University. 

The 2009 conference was organized by the Columbia Business School's South Asian Business Association.

Noting that although developing countries, especially India and China, are doing much better than the rest of the world, including the US, Stiglitz said one should not believe the effect of the US economic downturn would not affect emerging economies worldwide. 

Stiglitz said that about an year ago people used to talk about de-coupling, meaning that emerging economies, especially that of India, are not linked to the global economy and so any downturn would not spread to countries like India and China.

"I always thought that that was a myth, and today it seems that the downturn in the world's largest economy has to have global implications and that is what is happening today. We are tied by a whole set of connections -- capital markets, export markets, labour, all that. . .," Stiglitz said, adding that India's economy is likely to continue growing but at a slower rate than before the crisis. 

Asked how long the global crisis would continue, he said there were actually two crises: "A financial crisis and a conventional economic crisis. When the origin of the crisis lies in the financial sector, typically, downturns are a deeper and longer and this is a very severe serious financial sector crisis. And we can expect a very long and difficult period of recovery," he said.

Stiglitz justified his pessimism, giving the example of the economic downturn that hit some Asian countries in 1997-98. They were able to recover quickly, partly because there was demand for their exports. But now, countries like the US cannot rely on exports because markets everywhere are weak, he said. 

Stiglitz said that today the US is not doing a good job of fixing its financial system.

"It is not likely to work. We are spending huge amounts of money that will put taxpayers in much worse shape. It is being done in a very non-transparent way that is undermining people's confidence in the government. Even after we fix the financial problem, the recovery is not going to be very robust," he said.


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## Screaming Skull

*India is less affected in global turmoil: Fidelity's Bolton​*
16 Apr 2009,

MUMBAI: Indias economy is largely domestic consumption-led and accordingly it has been less affected by the deceleration in global growth. As an economy that has continued to grow in spite of the unprecedented turmoil in the global economy, "I think India is well placed to benefit from an improving global environment," according to Anthony Bolton, President, Investments at Fidelity International, who was speaking in a press conference here on Thursday.

Commenting on next market bull run, Bolton said, the market is bottoming out. It is underlined by attractive valuations, market sentiment and by looking at current market conditions in relation to the historical bear and bull market cycles. I would be overweight consumer cyclicals, technology, financials and value stocks.

He further added, valuations of shares are particularly attractive and investor sentiment is so poor at the moment that I believe the long bear market is over.

Anthony Bolton managed the Fidelity Special Situations Fund, the best-performing UK retail investment fund for 28 years since 1979.


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## Screaming Skull

*Indian investors most optimistic in Asia in Q1: ING survey​*
NEW DELHI: Indian investors have emerged as the most optimistic lot in Asia and along with their Chinese counterparts have driven an increase in
the region's overall investor sentiment in the first quarter of this year, a latest survey says.

The quarterly Investor Dashboard Sentiment survey by global financial services group ING shows a significant increase of 75 per cent in investor sentiment in India in the first three months of 2009 as compared to the fourth quarter last year.

"Despite a slowdown in global economies and volatility in international financial markets, the ING Investor Dashboard Sentiment Index for India reflects the highest level of investor optimism across Asia," the survey stated.

The India investor index has jumped 75 per cent to 133 in Q1 this year from 76 in fourth quarter of 2008.

The survey indicated that Indian investors were confident about the economy, backed by assurances from the business community and the government.

"Compared with its neighbours in Asia, India's growth of recent years has been driven predominantly by domestic consumption as well as domestic investment. This pattern and growth insulates economy from set backs felt in both global & regional economies," ING Investment Management India acting CEO Navin Suri said.


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## LCA

http://economictimes.indiatimes.com...s-slowest-in-10-years/articleshow/4411952.cms

China's GDP grows slowest in 10 years
17 Apr 2009, 0019 hrs IST, Bloomberg

Print EMail Discuss Share Save Comment Text:
BEIJING: Chinas economy, battered by collapsing exports, grew at the slowest pace in almost 10 years, probably marking its low point. *Gross
domestic product expanded 6.1% in the first quarter from a year earlier, after a 6.8 % gain in the previous three months, the statistics bureau said in Beijing.
*
A 30% surge in urban fixed-asset investment in March and a jump in industrial output, both reported on Thursday, added to evidence that the governments 4 trillion yuan ($585 billion) stimulus plan is working. Premier Wen Jiabao cautioned that while the worlds third-biggest economy is in better-than- expected shape, China is yet to establish a solid foundation for a recovery.

Theyve stabilized the economy and now the challenge is to think about how to support consumption and how to support private investment, said Stephen Green, head of China research at Standard Chartered Plc in Shanghai.

Were still looking for stimulus measures to encourage consumption. The report follows a statement from US Treasury Secretary Timothy Geithner that China isnt a currency manipulator. His stance eases pressure on China to allow its currency to rise, which would hurt efforts to revive exports.

While stimulus measures have started to produce results, China faces faltering export demand, industrial overcapacity, unemployment and weak private investment sentiment, Wen said in a statement after a meeting of Chinas cabinet.
Industrial output expanded 8.3% in March from a year earlier, up from 3.8% in the first two months. Retail sales rose 14.7%. Consumer prices fell 1.2% in March from a year earlier, compared with a drop of 1.6% in February. Producer prices fell 6%, the most since Bloomberg data began in 1999.

Chinas expansion was the weakest since the fourth quarter of 1999, according to Bloomberg data, and less than the 6.2% median estimate of 13 economists.


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## LCA

The Statesman

*Will India overtake Chinas growth rate?*

Press Trust of India
NEW DELHI/BEIJING, April 16: China today said its economy in first three months of 2009 grew by 6.1 per cent, its lowest rate in over a decade, thus raising apprehensions about the communist nation losing its status as the world's fastest growing economy to India.
*While the official figures for growth in India's gross domestic product during the first three months of 2009 is not available as yet, the country's economy is estimated to have grown by 7.1 per cent in the fiscal ended 31 March.
Given a steeper decline than India in China's GDP growth rate, which stood at 13 per cent in 2007 and fell to nine per cent in 2008, some experts opined that it would be interesting to watch which of the two economies grow faster going ahead.*
Asked if China's GDP growth rate could fall below that of India's, Standard & Poor's chief economist for Asia Pacific, Mr Subir Gokarn said over telephone that it was quite likely in one particular quarter, but on a yearly basis it might not be the case at least this year.
In the long run, say five years, yes, opined Mr Nagesh Kumar, director general, Research and Information System for Developing Countries (RIS). 
In 2009 and 2010, India will roughly be at similar levels of economic growth rate... In the long run, we are sure to overtake China's growth rate as India has more headroom, he added.
In an official release, China's National Bureau of Statistics said its GDP grew by 6.1 per cent in the first quarter of 2009, from 10.6 per cent in year-ago period and 6.8 per cent in the previous quarter. The GDP growth rate for January-March quarter of this year is lowest since 1992.


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## Screaming Skull

*Indo-Canadian nuclear deal soon: Montek Ahluwalia​*
Toronto April 17, 2009,

After sealing nuclear fuel supply deals with Russia and France, India is "very close" to inking a similar agreement with Canada.

With New Delhi planning to import reactors upto 20,000 MW of capacity in next 10 years, it has laid down a road map for strategic partnership with Ottawa and is "very close" to signing a nuclear cooperation agreement, Montek Singh Ahluwalia, Deputy Chairman of Planning Commission said here.

"This offers a major market opportunity to Canadian firms to sell nuclear reactors, fuel and technology for safeguarded nuclear reactors but they have to compete with France, the US, Russia and Australia," Ahluwalia said at a three-day Indo-Canada Energy Conference.

"Both countries are very close to signing a bilateral nuclear cooperation agreement. A joint study group is working on Free Trade Agreement," Ahluwalia said.Commending Canada's efforts at the nuclear supply club, Ahluwalia said, India is committed to restart closer nuclear cooperation with the country.

He also invited Canadian help in providing clean coal technology, non-renewable energy sources like solar and wind energy to help improve India's energy security.

Canadian Minister for Natural Resources Lisa Raitt said Canada, which is the fifth largest producer of energy, was committed to strengthening energy relations with India and "both countries are working a bilateral nuclear cooperation agreement".

*"India's strategic plan is to import nuclear reactors that could generate 20,000 MW of power based on imported uranium," Ahluwalia said. "Plutonium generated from these reactors would be fed into fast breeder reactors that could end up generating more plutonium."Once India has sufficient plutonium that would put into thorium based reactors to generate power, India has large source of thorium that can only be used if the country has sufficient plutonium," he said, while outlining India's strategic plan for its energy security.*

Later, Ahluwalia told newsmen that India was actively involved in two working groups set up by G-20 countries, which would lay down global standards for international financial security.Top executives of over 100 Canadian companies and top policy makers and energy sector companies from India are participating in the three day conference.

Earlier, former President Abdul Kalam addressed the delegates through video conferencing and said India and Canada could work together and realign themselves in solar, wind, nuclear and bio-fuels, municipal waste management areas.S R Gavai, the Indian High Commissioner said alleviation of poverty was a major challenge for India and Canada could play an important role in strengthening its energy security.


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## Screaming Skull

I hope at least now people understand the importance of the Indo-US Nuke deal. This was very important not only for immediate energy requirements but also for future energy security.


----------



## Gabbar

*'India's GDP to fall to 3.4&#37; in 2009'*

New Delhi: 
India's economic growth rate is expected to fall drastically to 3.4 per cent this year, economic forecasting consultancy Oxford Economics has said. 
According to Oxford Economics' forecast, India is expected to report a GDP growth of 3.4 per cent in calendar year 2009, a drastic fall from the 9.2 per cent in 2007 and 7.4 per cent in 2008. 

"As we enter the second quarter of 2009, the first indication, that the rate of decline of global output may be slowing, is becoming apparent," Oxford Economics said in a report. 
Meanwhile, China, which reported a 13 per cent growth in 2007, is likely to grow 5.8 per cent in 2009. Though China is also expected to report a massive fall in GDP, it would not be as drastic as India's. 

China yesterday said its economy in the first three months of 2009 grew by 6.1 per cent, its lowest growth rate in over a decade. 
Emerging Asia is expected to grow by 1.5 per cent in 2009, the report said. 
India recorded a growth rate of 9 per cent in fiscal 2007-08, which as per the Central Statistical Organisation's advance estimate of national income, is likely to moderate to 7.1 per cent during 2008-09.


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## Gabbar

*India invests in infrastructure*

Growth in Indian air traffic over recent years has prompted capacity expansion and new-build airport projects.

One market forecast predicts that passenger traffic at Indian airports will grow at an annual rate of 15 per cent, from 102.73 million in 2008 to 290.19 million by 2014. In recent years the growth forecast by state-owned Airports Authority of India (AAI) has varied between 7 per cent and 9 per cent, but this has lately been toned down to 6 per cent as a reflection of the economic conditions.

Predicted growth in the cargo sector has also been revised downwards as the Indian aviation sector mirrors forecast slower GDP growth for 2008-10. Cargo volumes grew on average by 7.5 per cent annually between 2004 and 2008, with 1.71 million tonnes of freight being handled in 2007-08.

While a pessimistic outlook appears justifiable, some take a more balanced view of the Indian air traffic situation. "I don't think you should see that [traffic growth] as coming to a halt by any means," says Richard Chinn, New Delhi-based project director for aviation at management and engineering consultancy Mott MacDonald India. "We have to understand that we are now seeing an adjustment to a more normal growth pattern, after the abnormal growth caused by pent-up demand. But this does have consequences for new construction, since airport facilities have been planned with higher passenger traffic and cargo growth in mind."

India invests in infrastructure


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## Screaming Skull

*Nation's forex reserves dip by $2.183 bn​*
17 Apr 2009

MUMBAI: India's forex reserves dipped by $ 2.183 bn to $ 252.977 bn for the week ended April 10, as against 255.160 bn in the previous week.

During the week ended April 3, the country's total reserves had increased by $ 2.834 bn.

The foreign currency assets (FCAs) dropped by $ 2.174 bn to $ 242.423 bn as compared to $2 44.597 bn in the previous week, the Reserve Bank of India said in its weekly report.

FCAs, expressed in US dollar terms, include the effect of appreciation or depreciation of non-US currencies such as Euro, Sterling and Yen.

India's gold reserves and special drawing rights (SDRs) remained unchanged at $9.577 bn and $ one mn respectively during the week.

India's reserve position in the International Monetary Fund (IMF) decreased by USD nine million to USD 976 million in the week as compared to USD 985 million in the previous week.


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## Screaming Skull

*IPL-2 may rake in Rs 800 cr for all core, fringe hopefuls​*
18 Apr 2009,

NEW DELHI: Indias newest multinational, with projected revenues of Rs 800 crore in just five weeks, is all set to take wing in Cape Town on Saturday. Welcome to Lalit Modis India Premier League, Stage II, the Great Redeemer in these tough times, if you ask the entertainment, advertising and tourism industry.

And, if you believe Peter Roebuck, the famous Australian cricket columnist, everyone except Elvis has been slated to appear at the opening. And, some think he has half-a-chance of turning up, he wrote in Brisbane Times.

Even before the first match, between Sachin Tendulkars Mumbai Indians and MS Dhonis Chennai Super Kings, Multi Screen Media (MSM, previously Sony Entertainment TV), which plans to rake in close to Rs 400 crore, claims to have sold 85% of advertising space.


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## Screaming Skull

*IPL could give 2 bn rand to South African economy: Modi​*
17 Apr 2009

CAPE TOWN: The five-week long Indian Premier League Twenty20 cricket series that kicks off here on Saturday could give the South African economy
a cash injection of up to two billion rands, according to IPL chairman and commissioner Lalit Modi.

Speaking at a press conference here, Modi said he anticipated that the tournament will see between 1.5 bn rands and 2 bn rands spent, with 40,000 hotel rooms already booked in the eight host cities.

"In terms of Indian supporters wanting to come to South Africa, we hear reports of many fans being wait-listed. While we have confirmed 4,000 supporters, we are working with our partner airlines to arrange more international flights.

"We also expect more interest as the competition reaches its climax," said Modi.

This is good news for South Africa, where economists have expressed concern about the impact of the global economic downturn finally hitting home.


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## Screaming Skull

*Sensex hits 'Sixer', soars 32% in six weeks​*
Mumbai April 18, 2009

The Sensex posted gains for the sixth week in a row, amid continued volatility as certain section of markets opted to book profits. The index began the week on a strong note, surpassing the 11,000-mark with ease. However high volatility later in the week, saw the index slip to a low of 10,719, and then rallied to a high of 11,367 - a swing of 648 points.

he Sensex finally ended with a gain of 2% (219 points) at 11,023. In the process, the index has now gained a whopping 32.4% (2,697 points) in the last six trading weeks.

The NSE Nifty ended with a gain of 1.3% (42 points) at 3,384.

WEEKLY SENSEX GAINERS...

SBI zoomed nearly 15% to Rs 1,306. ICICI Bank soared 11% to Rs 398, and BHEL surged almost 10% to Rs 1,497.

Sun Pharma, HDFC, Tata Motors, Larsen & Toubro, ACC, Mahindra & Mahindra, DLF and Maruti gained 4-7% each.

...AND THE LOSERS

Hindalco plunged nearly 7% to Rs 59. TCS shed 5% at Rs 603.

ONGC, Infosys, Ranbaxy, Jaiprakash Associates, Sterlite and Tata Steel declined 1-2% each.


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## Screaming Skull

*Govt to raise Rs 12,000 cr through sale of bonds​*
NEW DELHI: The government announced that it will raise Rs 12,000 crore through sale of two bonds on April 24.

A sum of Rs 8,000 crore would be raised through auction of government paper bearing coupon rate of 6.05 per cent maturing in 2019 while another Rs 4,000 will be mopped up through government paper bearing 7.5 per cent coupon rate maturing in 2034.

Up to 5 per cent of the notified amount of the sale of both the stocks will be allotted to eligible individuals and institutions as per the Scheme for Non-Competitive Bidding Facility in the Auction of Government Securities,'' an official statement said .

Both the auctions will be conducted using uniform price method by the Reserve Bank of India on April 24.


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## Screaming Skull

*IT sector to regain growth momentum next year: Infosys chief​*
18 Apr 2009,

CHENNAI: Though the financial sector has started showing some signs of recovery from the global meltdown, the IT industry in the country will
take some more time to regain the growth momentum, a top industry official said here on Saturday.

"The crisis started in the financial sector and recovery also seems to be happening first in that sector," S Gopalakrishnan, deputy chairman, Confederation of Indian Industry (CII)-southern region, told reporters here on Saturday.

"IT growth will be near flat in the near future. Probably, there will be pick up early next year. When that happens, outsourcing should go up," Gopalakrishnan, also the chief executive of Infosys Technologies, added.

He said Infosys would hire around 18,000 employees this year.

"We are honouring our promise made to the campus recruits. Appointment letters with joining dates have been sent to the candidates," Gopalakrishnan said.


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## Screaming Skull

*Rural India: Glitter in times of gloom​*
No company can afford to ignore two third of the consumer population pie. However inaccessible they may be and whatever changes may be required in the company's strategy to attract them. No wonder, the growing power of the rural consumer (accounting for 64 per cent of country's total consumer base) is forcing Indian blue chips and MNCs to flock to rural markets. Not only FMCG companies but even banks, auto, telecom and retail companies are finding it difficult to keep themselves away from the lure.

Fathom this. Seventy per cent of India's and 12 per cent of global population lives in rural India and contributes 50 per cent of the country's GDP. Their population of 75 crore (750 million) is more than that of US, UK, France, Japan, Italy and Germany put together. In fact, as per Mckinsey, despite rising urbanisation, 63 per cent of India's population will continue to live in the rural areas even in 2025.

*Surging ahead in terms of growth*

As per National Council of Applied Economic Research, rural market accounts for 55 per cent of LIC policies, 70 per cent of toilet soap consumption, and 50 per cent of TV, fans, bicycles, tea and wrist watch consumption. So as a target market, it is attractive not only because of the size, but also because of impressive growth potential.

Rural GDP has been witnessing strong growth in the last four years (avg of 4 per cent) not only on the back of increase in minimum support prices for the agri-products but also due to availability of alternative employment opportunities. 







In 2008, the rural areas grew at a robust rate of 25 per cent as compared to 10 per cent growth in urban retail market According to a McKinsey, rural India, would become bigger than the total consumer market in countries such as South Korea or Canada in another twenty years. It would grow almost four times from estimated size of $577 bn in 2007. While the per capita income is lower than urban areas, the customer base is thrice that of urban areas.

*Resilient to slowdown*

On account of negligible tax liability and little or no burden of loan repayments, the Indian rural population has a higher propensity to save. The rural areas account for 33 per cent India's total savings. Being more conservative than their urban counterparts, the rural populace has not burnt their fingers in the real estate or stock market bust. Further, the rural income distribution pattern is also changing and the bottom is getting narrower.

While 18 per cent of rural India has earnings in the range Rs 45,000 to Rs 215,000 per annum, 58 per cent of urban population earns in this range. However, 27 m individuals form a part of this income bracket in rural areas while in urban areas it is about 29 m; of which large base is already tapped.

*No of households (m)*
Demographic classification Urban Rural Total
Rich ( income greater than Rs 1 m per annum) 4.8 1.3 6.1
Well off (income greater than Rs 0.5 m per annum) 29.5 27.4 56.9
Total 34.3 28.7 63.0
*% of total 54.4% 45.6%* 

As per the Associated Chambers of Commerce and Industry of India, the rural market is becoming increasingly attractive for FMCG, automobiles and organised retail businesses. Rural India accounts for more than 40 per cent consumption in major FMCG categories such as personal care, fabric care, and hot beverages.

FMCG sector in rural areas is expected to grow by 40 per cent as against 25 per cent in urban areas in the coming quarters. The size of retail market in India is estimated at US$ 280 bn of which the rural retail market works out to be $112 bn. This is expected to double in next 4 to 5 years because of the huge potential. Even auto companies in recent times are witnessing shift in trend as they are gearing to explore the huge market potential lying in the rural areas.

*% of households owning products (2008)*
 Top 20 cities	Other cities Rural
Car 23 5 3
Bicycle 37 61 69
Colour Tv 68 47 17
AC 5 3 0
Refrigerator 63 34 8
Computer 8 3 1

As rural India becomes more lucrative and the government becomes more committed to its development, schemes like the rural employment guarantee, Bharat Nirman, focus on rural education, debt waiver plan and higher support prices will aid the rural demand. Although the penetration levels are still very low, the scope is huge. And India Inc. is not letting go of this opportunity.


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## Screaming Skull

*Rs 50,000 Crore ($ 10 Billion) stimulus package waiting in the wings​*
19 Apr 2009,

NEW DELHI: A high-powered panel is thrashing out a mega economic stimulus package with a kitty of Rs 50,000 crore, which may be part of the first Budget of the next government at the Centre, said an official who didnt want to be named. Ajay Shankar, secretary, department of industrial policy and promotion (DIPP), who is a member of the panel headed by cabinet secretary KM Chandrasekhar, confirmed that another booster measure was in the works to kick-start the economy.

We have drawn the contours of this package. Its for the next government to finalise it, he told SundayET. We have to keep the stimulus going though we need to be fiscally responsible. Its aim will be to substitute the decline of private investment with public expenditure, he said.

Other members of the panel include secretaries of the finance and commerce departments, and a secretary of the Planning Commission.

SundayET had reported on January 25 quoting deputy chairman of Planning Commission Montek Singh Ahluwalia that the government had begun the process of preparing another fiscal stimulus package for FY09-10.

Though no one was willing to risk a guess on the size of the package, SundayET learns it will constitute 1% of GDP, or roughly Rs 50,000 crore. The package is likely to be a part of the budget to be presented before June 25, 2009, if not announced earlier on a stand-alone basis. 

According to Mr Shankar of DIPP, impacts of the two fiscal packages announced earlier were already visible. Some of the sectors have started recovering. Many expansion plans announced by private sector companies are actually taking place, Toyotas small car plant in Bangalore being an example, he said. Mr Shankar also said the country had clocked in foreign direct investment of over $25 billion till February, which is more than what was raked in the earlier fiscal.

The government had earlier announced two fiscal packages in addition to the Indian central bank RBIs monetary interventions to boost the economy. The earlier fiscal measures also liberalised various rules and regulations to increase liquidity and give a boost to spending. While announcing the earlier packages, Planning Commission deputy chairman Montek Singh Ahluwalia said the governments initiatives were mainly to ensure that the growth momentum was intact.


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## Screaming Skull

*Global troubles for India Inc​*
20 Apr 2009,

*Hindalco*

Soon after the Tata-Corus deal Hindalco acquired Novelis for around $6 billion. The acquisition has not been successful so far with Novelis continuing to make losses. Also, there is not much of integration synergy between two entities.

So far, the company has not been able to recover anything out its investment since Novelis generates negligible (or negative) cash even at operating level. Current impact of economic slowdown on its Indian operation would only add a pinch of salt to Hindalcos overseas pain.

*Punj Lloyd*

Punj Lloyds international acquisitions like Singapore-based SembCorp and Technodyne have not benefited much to the company. December quarter has been very bad for its overseas operation with a loss of around Rs 300 crore.

However, the results of previous quarters indicate that the contribution of these foreign operations to bottom line was reasonably good. It has taken higher debt on its standalone balance sheet rather than the consolidated one. One has to keep an eye on the performance of these acquisitions once global economy recovers.

*Ranbaxy*

Ranbaxy, the eighth largest generic company in the world, has made a spate of acquisitions starting from US based Ohm Laboratories to Romania-based Terapia and South African player Be-Tabs among others. In 2006, Ranbaxys foreign asset base of $1.1 billion formed 60% of its total assets.

While the companys foreign operations have been profitable, the forex losses in recent quarters have impacted the profitability of the companys standalone operations. Moreover, the recent setback received by the company in its US operations has adversely impacted the companys overseas business.

*Sun Pharma*

With six overseas acquisitions and one pending, Sun Pharma has been one of the fastest growing companies in the Indian pharma space. Acquisition of loss making US-based Caraco marked Suns first overseas acquisition in 1996. The company has since then acquired some loss making or under performing companies and managed to turn them around.

It is in the last leg of litigation with Taro, slated to be around $454 million acquisition. The companys foreign assets constitute 35-40 % of its total asset base. Suns foreign acquisitions, majority of them in US, have proved to be more profitable than its standalone Indian business.

*Suzlon*

Helped by foreign acquisitions - Belgium-based Hansen Transmission and Germany-based Repower - Suzlon Energy has grown to be the fifth largest wind power equipment manufacturer in the world. After an initial phase of generating poor profit margins post the acquisition of Hansen in FY07, Suzlon seems to have recovered and managed to witness higher sales realization.

However, the going again seems to have got tough with significant currency fluctuation leading to MTM and charges related to blade retrofitting. If the company manages to control these exceptional items in coming quarters, its acquisitions can certainly be termed as value accretive .

*Tata Chemicals*

Tata Chemicals $1 billion acquisition of US-based General Chemical Industrial Products Inc (GCIP) in March 2008 has enabled it to become the worlds second largest maker of soda ash. Earlier in 2006, the company had also acquired Brunner Mond, a UKbased chemical company.

These acquisitions have cut down its cost of soda ash and greatly increased its profitability. Moreover, the acquisitions have been earnings accretive right from their very first year of operations.


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## Screaming Skull

*PM sees return to 8-9 pc growth from Sep​*
19 Apr 2009, 

AMINGAON: The economy will return to growth rates of 8-9 per cent as the global economy begins to recover from September, Prime Minister
Manmohan Singh said on Sunday.

Asia's third-largest economy is expected to have grown slightly below 7 per cent in the fiscal year ending March 31, 2009 and some private economists have said growth could be slower in the current financial year.

This compares with growth of 9 per cent or more in the last three years, before the financial crisis slashed exports and moderated domestic demand.

"The world economy is expected to partially recover by September and if that happens we expect to go back to the growth rate of 8-9 per cent," Singh told reporters at a news conference in the northeastern state of Assam.

He did not say if the economy would grow at that pace in the year to March 2010.


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## Screaming Skull

*RBI survey lowers GDP growth forecast to 5.7%​*
Tuesday, Apr 21, 2009

Mumbai, April 20 The median forecast of real GDP growth, according to the Reserve Bank of Indias latest professional forecasters survey, for 2009-2010 has been revised downwards to 5.7 per cent from 6 per cent.

The central bank, in its report on the Macroeconomic and Monetary Developments in 2008-2009, said that the various surveys of economic activity point towards prevalence of less-than-optimistic sentiment for the outlook of the economy in the coming months.

Between the sixth round survey conducted in December 2008 and seventh round survey in March 2009, median forecast of real GDP growth for 2008-09 was revised downwards to 6.6 per cent from 6.8 per cent.

According to the report, for the April-June 2009 quarter, the overall net sentiment for all industries, except textiles, is positive. Moderate growth is expected across the various companies in the first quarter. However, the expectations are less optimistic for smaller companies compared with their bigger counterparts.

*Inflation*

On the inflation front, the report underscored the fact that unlike the wholesale price index based inflation, consumer price index based inflation in India remains high, with recent evidence of very slight moderation. The transmission process of lower inflation at the wholesale level to inflation at the retail level has emerged as an important issue in the conduct of RBIs monetary policy, the report said.

The WPI-based inflation eased to 0.18 per cent for the week ended April 4 from 0.26 per cent for the previous week. Various measures of consumer price inflation, though started declining, still remained high in the range of 9.6-10.8 per cent during January/ February 2009.

The higher level of consumer price inflation (CPI) as compared with WPI inflation , in recent months, could be attributed to higher prices of food articles, which have higher weight in CPI.

Scheduled commercial banks (SCBs) investment in statutory liquidity ratio (SLR) securities as a per cent of their net demand and time liabilities (NDTL) increased at end-March 2009 to 28.1 per cent, from 27.8 per cent a year ago.

However, adjusted for Liquidity Adjustment Facility collateral securities on an outstanding basis, SCBs holding of SLR securities amounted to Rs 11,10,156 crore or 26.7 per cent of NDTL at end-March 2009  implying an excess of Rs 1,13,817 crore or 2.7 per cent of NDTL over the prescribed SLR of 24 per cent of NDTL.

The lower expansion in credit relative to the expansion in deposits resulted in a decline in the incremental credit-deposit ratio (y-o-y) of SCBs to 64.4 per cent at March-end 2009 from 73.6 per cent a year ago.

*Personal loans*

Our Chennai Bureau reports: The latest confirmation of a slowdown in the personal loans segment comes from the Statement on Macroeconomic and Monetary Developments put out by the Reserve Bank of India. Personal loans (inclusive of housing, credit cards, educational loans, consumer durable loans etc.) at Rs 5,55,392 crore account for about 22 per cent of the total loans outstanding as of end February 2009. Personal loans grew at just 8.5 per cent in the last one year compared with 13 per cent growth registered in the previous year.

Loans for housing, which constitute about half the personal loan segment, were at Rs 272,376 crore. They grew at just 7.5 per cent last year compared with 13 per cent in the previous year (2007-08) and 26 per cent in the year 2006-07. Credit card outstandings also grew at a mere 8 per cent compared to about 51 per cent in 2007-08 and 46 per cent in 2006-07.

Despite oft-repeated complaints that the real estate sector was credit starved, statistics provided by the RBI show that real-estate loans grew 61.4 per cent last year to Rs 9,0765 crore compared with a 27 per cent growth in 2007-08.

Similarly, loans to NBFCs also grew by 42 per cent during the last year to Rs 90,521 crore.


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## Screaming Skull

*Forex reserves at $252 bn in end-March: RBI​*
20 Apr 2009, 

MUMBAI: India's foreign exchange reserves stood at USD 252 billion as of end-March, declining by USD 57.7 billion over the previous year, the Reserve Bank said on Monday.

The RBI said in its Macroeconomic and Monetary Developments in 2008-09 said, the overall approach to the management of India's foreign exchange reserves in recent years reflects the changing composition of the balance of payments and the 'liquidity risks' associated with different types of flows and other requirements.

"Taking these factors into account, India's foreign exchange reserves continued to be at a level consistent with the rate of growth, the size of the external sector in the economy and the size of risk-adjusted capital flows," RBI said.

Forex reserves, however, increased to USD 253 billion as of April 10, it added.


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## Nihat

Can you add links to some of the more important articles.


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## Screaming Skull

Nihat said:


> Can you add links to some of the more important articles.



All the articles that I have posted have embedded links in the titles. Just click the titles and you will be directed to the source.


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## NSG_BlackCats

*Loans to get cheaper as RBI cuts rates*​
MUMBAI: Banks on Tuesday said they would cut lending rates making home, consumer, corporate and personal loans cheaper after the Reserve Bank 
slashed short-term lending (repo) and borrowing (reverse repo) rates by 25 basis points each in its annual monetary policy for 2009-10. 

"The policy stance of RBI indicates further softening of the interest rates," Oriental Bank of Commerce Executive Director S C Sinha told media. 

Banks would bring down lending and deposit rates after reviewing their asset liability condition. It may not be immediate but would take some time to respond, he said. 

Indian Bank Executive Director A Subramanian said that deposit and lending rates would come down simultaneously. "That is the signal RBI is giving to all banks." The apex bank cutting down short-term borrowing rate would encourage banks to lend and earn interest income rather parking funds with RBI and earn reverse repo rate, he said. 

The Chennai-based bank would take a view on the interest rates in the next few days, Subramanian said. 

In its annual credit policy, RBI reduced repo rate to 4.75 per cent and reverse repo to 3.25 per cent with immediate effect, while retaining the other key ratios such as the Cash Reserve Ratio, the percentage of deposits that banks keep with the central bank. 

RBI rate cut would lead to softening of effective lending rate, Subramanian said, adding that deposit rates would also be cut simultaneously. 

UCO Bank Chairman and Managing Director S K Goel had said that the bank would take a view on the interest rates after the annual credit policy. 

The RBI has given enough indication to banks to ease rates, however, private sector banks have been laggard in the responding to the central bank's signals. 

While public sector banks have reduced their benchmark prime lending rates (BPLR) as much as 250 basis points post Lehman Brothers crisis in mid-October last year. 

RBI has reduced repo rate from 9 per cent in October 2008 to 4.75 per cent now, while it brought down reverse repo rate from 6 per cent in October last year to 3.25 per cent at present. 

Yes Bank Chief Economist Shubhada Rao said the complete pass-through of previous rate cuts is yet to fully transmit through lower lending and deposit rates in the banking sector. 

Although interest rates have dropped from their peak levels, there remains a scope for rates to decline further, she said. We expect this to happen within coming two quarters when the banking sector will be able to re-price their balance sheets on liabilities side followed by assets side," Rao added. 

Deutsche Bank Ananth Narayan said combination of high liquidity and forceful message from RBI will probably bring lending rates down. "On the govt bond side also this combination will work ... We should see bond prices holing up and going up from here," he said. 

LINK


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## NSG_BlackCats

IT export target of $50 bn will be delayed: NASSCOM​
NEW DELHI: IT industry association NASSCOM on Tuesday said the export revenue target of 50 billion dollar by 2010 will be delayed by 3-4 quarters 
due to the global economic downturn, and warned of uncertainties in the near future. 

The NASSCOM-McKinsey, however, presented an ambitious scenario for the Indian IT industry for the next 11 years saying the total revenue from export is expected to expand to 175 billion dollars by 2020 and revenues from the domestic market could achieve the 50 billion dollar mark. 

"This, however, needs a concerted effort by both the industry and the government to ensure swift and sustained reforms in critical areas of education and infrastructure," NASSCOM said. 

On the economic scenario, the organisation said the "global economic crisis will have far-reaching and as yet uncertain impact on the industry. Near term volumes and pricing is likely to come under pressure." 

Commenting on the opportunities for the industry, Som Mittal, President, Nasscom, said, "The Indian IT industry is in the midst of unprecedented times because of the current economic environment. We expect the next few quarters to be extremely challenging with companies doing everything required to effectively overcome the challenges." 

LINK


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## NSG_BlackCats

Air India surprises with a 70% fare cut​
MUMBAI: There is certainly something to cheer about for air travellers. The national carrier and state-owned Air India has decided to cut fares by as much as 70% on 35 sectors, starting Tuesday. The massive cut in fares will take place despite a 6.7% increase in aviation turbine fuel (ATF) prices last week. 

Air Indias direct competitors  Kingfisher Airlines and Jet Airways  have hiked fares by around 8% two days ago, while low-cost carrier SpiceJet said that it will increase fares in a few days. A senior Air India official confirmed the fare cuts to ET and said the company wants to increase its passenger load factor (PLF) to boost bottomlines. The load factor for domestic carriers dropped to around 65% in March from 73% in February. 

The reduced fares have no hidden conditions like being for a limited offer period. Passengers have to buy their tickets 10 days in advance through the website, travel agents or the companys sales offices. These reductions in fares are mainly on tier-II routes connecting Mumbai and it is over and above our offer on the summer fares, the 
senior official added. 

For example, on the Mumbai-Hyderabad sector, Air India has brought down the one-way fare to Rs 2,694  this is all inclusive except the User Development Fee (UDF), and is a drop of 70%. Similarly, the one-way Mumbai-Mangalore fare is now down to Rs 2,494, which is down by almost 60% from the earlier price of Rs 5,875. Mark Martin, senior advisor, KPMG, said: Airlines need to stimulate the market as load factors have been falling since August. Aggressive pricing is a gamble and it may hurt airlines in the long run. 

The plunging domestic air traffic has hit airlines hard which have been forced to hike fares. Ticket prices need to go down to attract more passengers. Passengers have actually opted for travelling by trains, said an analyst with domestic brokerage firm. A drastic cut in airfares would perhaps be able to prop up the balance sheet of the sagging airline industry, which is expected to post a combined loss of $2 billion for fiscal 2009, said industry trackers. 

On Sunday, the Kingfisher and Jet Airways combine increased fuel surcharge by Rs 200 for sectors less than 750 kms and by Rs 300 for sectors over 750 kms after oil companies raised ATF prices for the third consecutive time in a month. Jet fuel prices vary at airports depending on local taxes. The average ATF prices are now at Rs 2,066 per kl, which accounts for 40% of an airlines costs. 

*LINK*


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## NSG_BlackCats

Economy to grow by 6 percent, inflation to rise too: RBI​
MUMBAI: India's economy will grow by six percent this fiscal while inflation would rise to around four percent, the central bank said here Tuesday while announcing a 25 basis points cut in key rates in its annual economic policy review. 

"With the assumption of normal monsoon, real GDP growth for 2009-10 is placed at around 6.0 percent," said Reserve Bank of India Governor D. Subbarao. GDP growth for 2008-09 was 7.1 percent. 

The India Meteorological Department in its forecast of south-west monsoon had said last week it expects a normal rainfall at 96 percent of its long period average for the current year. 

The central bank also expects the annual rate of inflation to rise to four percent from the April 4 figure of 0.18 percent. It also said inflation would turn negative before it rises again. 

"Keeping in view the global trend in commodity prices and domestic demand-supply balance, WPI (wholesale price index) inflation is projected at around 4.0 percent by end-March 2010," the policy review added. 

"WPI inflation, however, is expected to be in the negative territory in the early part of 2009-10," said RBI. 

"This transitory WPI inflation in negative zone may not persist beyond the middle of 2009-10," the statement added. 

Consumer price inflation is expected to fall from its present high levels. 

Deposits with commercial banks is set to grow by 18 percent this fiscal, while liquidity is set to increase by 17 percent. 

RBI cut key rates Tuesday by 25 basis points in a move to infuse more liquidity into the system and stimulate lending growth. 

The RBI cut the repo rate by 25 basis points from the current 5 percent to 4.75 percent, while the reverse repo rate has been brought down to 3.25 percent from 3.5 percent earlier. 

The repo rate is the rate at which the RBI borrows from the banks, while the reverse repo rate is the interest rate paid to banks for RBI's borrowings from them. 

However, RBI kept the cash reserve ratio (CRR) unchanged at 5 percent. CRR is the minimum cash reserve balance banks must maintain against customer deposits. RBI had last cut key rates March 4. 

*LINK*


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## Screaming Skull

*India FY10 deficit seen at 6.5-7% of GDP​*
21 Apr 2009,

NEW DELHI: India's fiscal deficit is expected to be between 6.5 percent and 7 percent of gross domestic product (GDP) in 2009/10, a top policy adviser said on Tuesday. 

Chief Economic Adviser Arvind Virmani said fiscal stimulus already announced would amount to 3.5 percent to 4 percent of GDP in the year to March 2010. "As far as I can see, that is a reasonable stimulus," he said. 

In February, the government had estimated the fiscal gap at 5.5 percent of GDP for 2009/10. 

Virmani also said inflation was expected to decline in the first half of the fiscal year that began on April 1 and rise in the second half.


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## Screaming Skull

*India, China most attractive mkts for wealth mgmt: Barclays​*
Tuesday, Apr 21, 2009

India is the second most attractive market for wealth management after China, even as revenue growth in this sector in Asia is expected to fall significantly over the next two years, Barclays Capital says.

According to investment banking firm Barclays Capital survey of Asia's leading wealth managers, "China and India continue to be viewed as the most attractive markets in Asia, both in terms of potential for business expansion and expected revenue growth rate."

China has emerged as the most attractive market with a quarter still forecasting revenue growth of over 15 per cent per annum over the next two years.

While in case of India, a fifth of the respondents predicted over 15 per cent revenue growth in wealth management over the next two years, the survey said adding that Southeast Asia, including Singapore has been ranked third where 12 per cent of wealth managers believed there is a scope for revenue growth.

Meanwhile, Korea is viewed as the least attractive market in Asia, with 29 per cent of wealth managers forecasting negative revenue growth, Barclays Capital added.

The survey further highlighted that the revenue growth in wealth management industry in Asia is expected to drop significantly over the next two years, amid changing regulatory environment.

"It is evident that wealth managers share the view that the financial markets will operate under significantly different regulatory conditions in future," said Kevin Burke, Head of Distribution, Asia Pacific at Barclays Capital.

"Despite this (different regulatory conditions) and other challenges facing the industry, it is encouraging to see that around 40 per cent of the region's leading wealth managers anticipate very respectable growth in their non-Japan Asia revenues over the next two years," he added.

The Wealth Management survey, conducted by Barclays Capital involved 123 respondents from 53 key wealth management organisations in seven countries across non-Japan Asia including asset managers, insurance companies, local and global retail banks and private banks.

The survey also showed that equity and forex remain the most popular asset classes for both flow and structured products.

The use of equity has generally declined from last year as investors search for capital protection, and the use of structured products has declined across the board as investors search for simpler and more transparent products.

Commenting on the survey Peter Hu said, "The Barclays Asia Wealth Management Survey has gained real momentum with significantly more respondents every year, despite the market turmoil. I believe that this is testament to the credentials of the survey itself, as well as our commitment to servicing the wealth management industry in the region."


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## Screaming Skull

*India, China may see largest gains in IMF quotas​*
21 Apr 2009,

WASHINGTON: India, China, South Korea, Brazil and Mexico will see some of the largest gains in their quota shares in the International Monetary Fund to bring them closer to their evolving position in the world economy. 

The five nations are among 54 members which will receive an increase in their quotas once the 2008 reform for improving IMF governance is implemented, the Fund said ahead of a gathering of finance ministers and central bank governors from around the world here from April 24 to 26. 

While these 54 countries will get an increase in quota shares of 4.9 percentage points, 135 countries will see an increase in voting share of 5.4 percentage points due to the combined effects of the increase in quotas and basic votes. 

As world finance leaders meet here to assess the global response to the world financial crisis and attempts to recover from the deepest recession since the 1930s, IMF said a top priority for the Fund's legitimacy and effectiveness is the completion of outstanding governance reforms. 

The IMF will push to promptly ratify quota and voice reforms agreed in April 2008 and then launch the next phase, including further rebalancing of country representation by January 2011, it said. Quotas largely determine a country's voting power in the 185-member international institution. 

IMF managing director Dominique Strauss-Kahn has said that top priority now should be to clean up the banking sector, which lies at the heart of the crisis. 

"We all understand the stakes. 2009 will almost certainly be an awful year-we expect global growth to enter deeply negative territory," he said at a briefing last week on the Fund-World Bank Spring Meetings,. 

"This is a truly global crisis, and nobody is escaping. It originated in advanced economies, and spread like wildfire across the world. 

"Emerging markets are being hit hard, facing the double punch of a sharp drop in export demand and a sudden stop in capital inflows, and this threatens to undo the impressive gains in growth and convergence achieved over the past decade or so," Strauss-Kahn said. 

Meetings of both the Group of Seven industrialised countries and the G-20 will be convened on April 24, ahead of the Saturday session of the IMF's policy-setting guidance body, the International Monetary and Financial Committee (IMFC). 

Among other things, the committee is expected to be interested in measures being taken to prevent crises and to spot emerging ones earlier, IMF said. Steps are being taken by the IMF to enhance analysis of risks and linkages between the real economy and the financial sector. 

The IMF is also working on the development of an early-warning exercise - joint with the Financial Stability Board - and revamping the Financial Sector Assessment Programmes which look at country financial sectors.


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## Screaming Skull

*Worst in economy over, things beginning to improve: SBI Chairman*​
Mumbai April 21, 2009,

The worst in the economy is over with data indicating that the situation is improving, State Bank of IndiaChairman O P Bhatt said today.

"The worst in the economy is over. Economic data indicate things are better," SBI Chairman O P Bhatt told reporters after bankers met Reserve Bank Governor D Subbarao here.

On the RBI cutting both the repo and reverse repo rates by 0.25 percentage points each, Bhatt said that the apex bank had sent a clear signal that interest rates should ease.

"It (the RBI rate cuts) is a very clear-cut signal that interest rates should ease," he said.

Different banks would respond differently to the rate cuts, he said, when asked whether he expected an industry-wide reduction in lending rates.

State Bank would take a decision on rates only after a meeting of its asset-liability committee (ALCO) on the issue, he said.

According to Bhatt, the non-performing assets (NPA) position in the industry was not unmanageable.

The premier public sector lender expects both its credit and deposit growth to be 25 per cent during this fiscal.

"We will grow higher than the industry," Bhatt said.


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## Screaming Skull

*India likely to import 30 tonnes of gold in April​*
21 Apr 2009,

NEW DELHI: India, which did not import gold in last two months, is expected to purchase 30 tonnes in April as demand for the precious metals have risen following dip in the prices. 

"We expect India's gold import to be 30 tonnes during April as the sales have risen after the prices came down," state-run trading firm MMTC Chairman Sanjiv Batra on Tuesday said here. 

India, the largest importer of the precious metal, had bought 24 tonnes of gold in April last year. 

Out of 30 tonnes of gold import, Batra said MMTC is likely to import 10 tonnes of gold this month. 

Batra said the dip in prices will have a positive impact on the sales during Akshaya Tritiya, a festival considered auspicious for buying gold. Gold prices was today ruling at Rs 14,350 per 10 grams in the spot market, down 10.5 per cent from the peak of Rs 16,035 on February 20. 

According to the Bombay Bullion Association, India has resumed imports after a gap of two months. There was no import in February and March as traders stayed away from the market due to high prices, which was over Rs 15,000per 10 grams. 

As the prices have fallen, the country has imported about 10-15 tonnes of gold in the first fortnight of this month. 

Batra noted that better performance of equity markets will hopefully keep the prices steady and trigger demand for gold, which will gather momentum by Diwali this year.


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## Screaming Skull

*FIIs pull-out Rs 191-cr from equity market​*
21 Apr 2009,

MUMBAI: Foreign institutional investors on Tuesday pulled out a net Rs 191.01 crore from the stock market by selling their equities, amid a volatile market where BSE's benchmark index fell 81.39 points or 0.74 per cent.

In today's trade, FIIs were gross seller of shares worth Rs 1,658.72 crore, while they bought equities worth Rs 1,467.71 crore resulting in a net sale of Rs 191.01 crore, the provisional data available with Bombay Stock Exchange shows.

On Monday, FIIs were the net investor in shares worth Rs 332.6 crore, the latest data available with market regulator Securities and Exchange Board of India (SEBI) shows.

Domestic institutional investors also booked profit and were the net seller of shares worth Rs 187.69 crore. Non-resident Indian entities followed FII trend and sold shares worth Rs 0.45 crore.

However, brokers, on the behalf of their clients, and proprietors were enthusiastic about market and invested a net Rs 52.36 crore and Rs 36.38 crore respectively, as per BSE data.

The BSE benchmark Sensex closed at 10,898.11, down 0.74 per cent or 81.39 points.


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## Screaming Skull

*RBI projects WPI inflation at 4 pc by end of FY10​*
21 Apr 2009,

MUMBAI: RBI Governor D Subbarao on Tuesday projected that India's WPI inflation to be around 4 per cent by the end of this fiscal, taking into account global commodity prices and domestic demand-supply balance.

Inflation fell to 0.18 per cent, the lowest ever in the last three decades, even as prices of food articles like cereals and vegetable hardened during the week ended April 4.

"Keeping in view the global trend in commodity prices and domestic demand-supply balance, we project WPI inflation at around 4 per cent by end-March 2010," Subbarao told reporters here after the apex bank unveiled its annual credit policy statement.

"CPI (consumer price index) inflation continues to be at near double-digit level, but is expected to moderate in the coming months," he said.

Subbarao said headline WPI (wholesale price index) inflation decelerated sharply after August, reflecting the fall in global commodity prices.

The Governor said WPI inflation is expected to be in the negative zone in the early part of the current fiscal.

"This is only of statistical significance and is not a reflection of demand contraction as is the case in advanced economies," Subbarao said.


----------



## Screaming Skull

*Bollywood March collections nosedive​*
New Delhi April 22, 2009,

Box office collections for Bollywood films in March stood at about Rs 60 crore, the lowest in three years, said analysts. A further drop is expected in April.

So far, Bollywood films have been generating an average monthly collection of about Rs 110 crore. The leanest month before this was May 2008, when collections were Rs 90 crore. The reason for the low April figure is the launch of the Indian Premier League Twenty20 format cricket tournament.

Analysts expect April gross collections to further drop by 15-20 per cent compared with March. The 250-plus multiplexes across the country are expecting losses of about Rs 200 crore if the scenario continues till June.

The main factor is a drastic fall in theatre occupancy to below 20 per cent due to non-release of new films because of the stalemate between film producers and multiplex owners over a new revenue-sharing formula.

A typical multiplex has between 160 and 200 seats. Occupancy for a successful Bollywood film is 75-95 per cent. These are the worst times for the multiplex business. With no sign of availability of new films, chains are looking at facing losses for at least another two months, said Vishal Kapur, chief operating officer of Fun Cinemas, which operates 19 multiplexes.

Analysts say monthly fixed cost of operating a multiplex is Rs 40-50 lakh depending on size and location. A multiplex has to generate monthly gross collections of Rs 1-1.25 crore to cover fixed costs. The additional revenue comes from sale of food and beverages, said a senior executive of a leading chain.

For March, and now April, the average monthly collections from individual multiplexes have fallen to Rs 20-25 lakh, compared with the earlier Rs 80 lakh to Rs 1 crore-plus.

We are hoping for some big releases from May. There are 11 months to go in this fiscal and we hope to more than recover the current losses if we get good films for even eight months, said a top executive of a Mumbai-based chain, requesting anonymity.

The decline in box-office collections has also impacted online movie ticket bookings adversely. Says Roopesh Shah, head of marketing for bookmyshow.com, a specialised portal for online theatre bookings in big cities: Online bookings of movie tickets on our portal has gone down by over 40 per cent in March. It may further go down for the current and next months if no new films are released.


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## Screaming Skull

*Record number of mobile users added in March​*
New Delhi April 22, 2009,

Buoyed by the entry of new telecom players and entry of Reliance Communications in the GSM space, the Indian telecom industry clocked the highest subscriber-addition in a month, by adding 15.87 million subscribers in March 2009. According to the latest data released by the Telecom Regulatory Authority of India, (Trai), while the wireless (GSM, CDMA and WLL (Fixed)) segment witnessed addition of 15.64 million users, the wireline segment saw an increase for the first time in two years, by adding 230,000 to its subscriber base.

At the end of March, the wireless subscriber base stood at 391.76 million as compared to 376.12 million in the previous month of the year. The wireline subscriber base grew to 37.96 million as compared to 37.73 million in February 2009.

On a year-on-year basis, however, the wireline segment witnessed a decline of 3.7 per cent from 39.42 million in March 2008.

*This growth has lead to an increase in the total telecom teledensity (number of people having a telephone connection per 100 )to 36.98 per cent at the end of March 2009 from 35.65 per cent in February this year.* 

Broadband penetration in the country is also witnessing a steady increase. The total broadband subscriber base crossed the 6 million mark, to reach 6.22 million by the end of March 2009, as compared to 5.85 million by the end of February 2009. 

With its foray in the GSM space, Reliance Communications led the subscriber growth in the wireless segment with the addition of 3.02 million subscribers in March, to take its wireless subscriber base to 72.66 million.

In the wireless segment Bharti Airtel led the subscriber growth with addition of 2.73 million subscribers in December to take its wireless subscriber base to 82.9 million. State-owned Bharat Sanchar Nigam Ltd (BSNL) came in second with a total of 2.9 million subscribers resulting in a subscriber base of 52.14 million. Meanwhile Bharti Airtel and Vodafone Essar added 2.8 million customers each to take their subscriber base to 93.92 million and 68.76 million respectively. Tata TeleServices added about 1.25 million subscribers to about 35.12 million subscribers.


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## Screaming Skull

*6% growth in worst-case scenario: CEA​*
New Delhi April 22, 2009,

The countrys economy is expected to grow by around 6 per cent in the current fiscal, even in the worst-case scenario of global recession prevailing till March 2010, according to Arvind Virmani, chief economic adviser in the Ministry of Finance.

The growth projection matches with the Reserve Bank of Indias (RBI) estimate of 6 per cent expansion in Gross Domestic Product (GDP) in 2009-10. But it is higher than the median forecast of 5.7 per cent by professional forecasters, according to a survey done by the central bank.

*The worst-case scenario assumes that the global economy would be still in recession till March 2010. Even in that scenario, I expect the Indian economy to grow by 6 per cent, plus or minus 0.5 per cent,* Virmani told Business Standard.

*However, in the best-case scenario of the global economy recovering after September 2009, he predicts the growth rate of around 7 per cent in 2009-10.*

In this case, the growth rate in the current fiscal would be similar to the previous one that ended in March 2008, where growth was bouyant in the first half before the global economic crisis put a spanner on expansion. The implication (of best case scenario) is that the growth as a whole may average out to be the same as the previous year, he added.

Both the World Bank and International Monetary Fund have predicted the world economy to contract by 0.5 to 1.7 per cent for the first time in 60 years. Indias growth, according to the two global institutions, is also expected to fall below the 5 per cent mark.

Virmani, however, did not give up the sector-wise break-up of growth except to say that agricultural output, which has nearly 18 per cent weight in GDP, would post a normal growth rate of 2.5-3 per cent.

The government, along with the RBI, had implemented series of measures aimed at boosting economic demand. In particular, excise duty on most products has been reduced by 6 percentage points. The central bank too has reduced repo rates  the rate at which it lends to commercial banks  by 4.25 percentage points since September 2008. These measures are expected to cushion the impact of economic slowdown at a time when private investment, which drove economic growth, has slumped because of uncertainty.


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## NSG_BlackCats

Delhi Metro completes work on longest tunnel​
NEW DELHI: The Delhi Metro achieved another feat by completing the construction work of its longest ever underground tunnel at Khan Market. 
The tunnel, with a length of 1.775 kilometres, is part of the under construction corridor between Central Secretariat and Badarpur and is the longest ever constructed by single tunnel boring machine (TBM) in Delhi Metro, DMRC spokesman Anuj Dayal said. 

Till now, two 1.45 kilometre long tunnels constructed between Malviya Nagar and Hauz Khas were the longest tunnels. 

Another major achievement is that the construction was completed in just 152 days. Dayal said of the 1.775 kms, 37.5 metres of tunneling was completed in a day with the installation of 25 rings which is an Asian record. 
The tunneling work for this stretch was started on November 21st, 2008. The Central Secretariat  Khan Market stretch of 2.53 kilometres is actually the longest distance between any two Metro stations under Delhi Metro.


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## Screaming Skull

*RBI increases exposure to US govt bonds by 70%​*
23 Apr 2009

MUMBAI: Indian investorsessentially the Reserve Bank of Indiahave increased exposure to US government bonds by 70%among the highest by a major Asian economy after the collapse of investment bank Lehman Brothers in September 2008.

According to the data put out by the US treasury, India has increased its exposure to US government securities to $34.6 billion as on end February `09an increase of 70% over the $20.3 billion in September 2008. During the same period, China pumped in an additional $126 billion since September to take its total exposure to $744 billion.

Although some financial institutions and corporates also invest in US treasuries, RBIs purchases are expected to account for 99% of the overall investments. The Indian central banks behaviour is in keeping with its contemporaries with the exception of South Korea. Indeed, Asian central banks have been buying more of US treasuries despite a sharp fall in their foreign exchange reserves, indicating a shift in their portfolio.

However, while investments in US bonds have gone up, returns on US bonds have not. With the US Federal Reserve Board bringing down its key rates by 175 basis points since September, yields on 10-year US treasuries have fallen below 1%. The decline in rates has, however, not slowed the tide of central bank investments in US treasuries.

China has been the most aggressive among the investors and has replaced Japan as the largest foreign investor in US government bonds. Explaining the decision of Asian central banks to increase purchases despite a fall in returns, HDFC Bank economist Shivom Chakravarty said: It may be recalled that during this period, the concern was preservation of capital rather than return on capital as the financial crisis was at its peak.

The crisis caused investors to shun debt issued by even top-rated corporates, resulting in a scamper for US treasury bonds. The dollar was also seen strengthening against major global currencies, which further added to the investor confidence in US paper.During the period, Indias reserves dipped by $42 billion in US dollar terms.

A larger part of this reduction was because of revaluation of non-dollar assets in reserves. Even China and other Asian economies
have not seen their reserves grow by much during this period points out a recent report on emerging markets by ANZ Bank.


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## Screaming Skull

*India leads in IT export: World Bank​*
22 Apr 2009,

WASHINGTON: The World Bank on Wednesday said India leads all countries in exports of information communication technology (ICT) services.

In its latest report 'World Development Indicators 2009', World Bank said India's exports from the ICT sector increased from about USD 5 billion in 2000 to over USD 30 billion in 2006. This accounts for about 42 per cent of total service exports, it said.

At a time when there is a global recession and hundreds and thousands of people are being laid off, India's software industry employs about 1.6 million people, the report said.

China, though a distant second, is the next largest ICT services trader, with about USD 5.5 billion in ICT service exports, the report said.

The report said China and India were among the fastest-growing exporters. Export growth was led by manufactures in China and by services in India, it said.


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## Screaming Skull

*India, Spain sign trade pact ​*
Thursday, Apr 23, 2009

MADRID: India and Spain on Wednesday signed a trade agreement that is expected to boost bilateral ties in six crucial sectors. These are infrastructure development, renewable energy, agriculture, research and development, tourism, and cooperation in Latin America, where Spain has a sphere of influence. The focus is on technological exchange and tapping each others areas of expertise.

The agreement was sealed in the presence of President Pratibha Patil and Spanish Prime Minister Jose Luis Rodriguez Zapatero, and the respective government and trade representatives.

Addressing a business meeting, Ms. Patil noted with satisfaction that bilateral trade was growing, crossing $ 4.5 billion.

​
*ITS A DEAL: In the presence of President Pratibha Patil and Spanish Prime Minister Jose Luis Rodriguez Zapatero, Indian Ambassador Sujata Mehta exchanges a document with Secretary of State for Rural Affairs Joseph Jose Puseu, in Madrid on Wednesday.* 


Spanish enterprises are known for executing large-scale infrastructure projects, she said, and invited them to make use of the opportunities India presents, in particular through small and medium enterprises.

Addressing Indian mediapersons, Ashwani Kumaar, Minister of State for Industrial Policy and Promotion, described the presidential visit as highly successful. Three framework agreements were signed in the fields of renewable energy, agriculture and tourism on Wednesday.

He said Spains FDI globally was worth over 100 billion. Of this, India accounts for only 320 million, while Indias investment in Spain was almost twice that.

Nalin Surie, Secretary (West), Ministry of External Affairs, said the exchanges were free, frank and warm. There is genuine interest in the Indian elections, he said, adding that the fact that the President is a woman raised her profile considering the importance Spain accords to gender equality.

Terrorism was a leitmotif and Mr. Zapatero was quoted as having told Ms. Patil: Terrorism is a scourge which the 20th century has left [us], a legacy which has to be destroyed.


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## Screaming Skull

*$30 Billion FDI expected in 2009-10​*
Friday, April 24, 2009

NEW DELHI: Global investors are expected to remain positive on India and bring $30 billion foreign direct investment into the world's second-fastest growing economy in 2009-10 even when the world economy is facing a severe credit squeeze.

India is estimated to have received FDI of $27.5 billion in 2008-09, up from $24.57 billion in the previous year.

The overall outlook (for 2009-10) remains positive, Joint Secretary in the Department of Industrial Policy and Promotion, Mr Gopal Krishna said on the sidelines of a function organised by Booz & Company and AMCHAM here today.

However, inflows in March 2009 declined to $2.5 billion from $4.44 billion in the same month last year.

Though the cumulative increase for 2008-09 is small, it is considered a positive development, given the fact that the global financial crisis is the worst.

Mr Gopal Krishna said if reinvestment by foreign corporations is taken into account, FDI for 2008-09 was $37.5 billion. This is expected to go up to $40 billion in the current fiscal, he said.


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## Screaming Skull

*Recovery brings back Rs 10,00,000 cr ($20 b) of investors wealth​*
26 Apr 2009,

MUMBAI: The stock market
uptrend, which has brought back the benchmark Sensex above the 11,000-points level, has recovered as much as Rs 10,00,000 crore of investors wealth in less than two months.

However, the total recovery so far is less than one-fourth of close to Rs 45,00,000 crore lost in the sharp downturn that started in early 2008 and continued for more than a year till early-March this year.

At the end of the last trading session (April 24), the total investor wealth measured in terms of cumulative market capitalisation of all the listed companies in the country, stood at Rs 36,25,000 crore.

This marks an increase of about Rs 10,00,000 crore since March 9, when the Sensex was trading near its one-year low of 8,000 points and the total investor wealth had dipped to just above Rs 26,00,000 crore.

The benchmark Sensex has also gained more than 3,000 points since then and closed at 11,329.05 points in the last trading session. 

However, the index is still about 10,000 points below its record high level of 21,206.77 points scaled on January 10, 2008. At that time, the total investor wealth had soared to a high of nearly Rs 72,00,000 crore.

Incidentally, the recovery of Rs 10,00,000 crore since March 9 has been mostly led by the top large-caps in the country, with India's 25 most valued firms together accounting for nearly half of the total recovery.

In value terms, Mukesh Ambani-led Reliance Industries has alone added close to Rs 1,00,000 crore to investors' wealth, with its market capitalisation rising to about Rs 2,81,000 crore. PSU major ONGC has added about Rs 41,000 crore, while Sunil Mittal-run Bharti Airtel has gained over Rs 30,000 crore.

PSU majors SBI and NMDC have also added more than Rs 25,000 crore each, while Anil Ambani-led Reliance Communications, engineering major L&T, ICICI Bank and MMTC have gained close to Rs 20,000 crore each during this period.

NTPC, Infosys, BHEL, ITC, TCS, HDFC
, HDFC Bank, Reliance Petroleum, SAIL and Wipro have also added more than Rs 10,000 crore each to their market valuations.

While some analysts have cautioned that it could be a short-term rally and profit-booking at higher levels might again bring in a sharp downtrend, others have asserted that it could be the beginning of a long-running bullish phase.

Global equity research firm Elliott Wave International has gone to the extent of envisaging a milestone of as high as 1,00,000 points for the Sensex in the next 15 years. This would mean a rally of over 10-times from the level seen just a few days ago, when Sensex was toiling below 10,000-points.


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## Screaming Skull

*GoI on overdrive to implement solar power in country: 20,000 MW by 2020 & 2,00,000 MW by 2050 planned​*
Sunday, Apr 26, 2009

NEW DELHI: The Union Government has finalised the draft for the National Solar Mission. It aims to make India a global leader in solar energy and envisages an installed solar generation capacity of 20,000 MW by 2020, of 1,00,000 MW by 2030 and of 2,00,000 MW by 2050.

*The total expected funding from the government for the 30-year period will run to Rs. 85,000 crore to Rs. 105,000 crore.* The requirement during the current Five Year Plan is estimated to be Rs. 5,000 crore to Rs. 6,000 crore. It will rise to between Rs. 12,000 crore and Rs. 15,000 crore during the 12th Five Year Plan.

Implementation will be in three phases. The first phase of solar deployment (2009-2012) will aim to achieve rapid scaling-up to drive down costs. It will spur domestic manufacturing through the consolidation and expansion of on-going projects for urban, rural and off-grid applications. This will involve the promotion of commercial-scale solar utility plants, mandated installation of solar rooftop or on-site photo-voltaic applications in buildings and establishments of government and public sector undertakings. The target is 100 MW installed capacity here.

The Mission will encourage the use of solar applications to meet day-time peaking power requirement that is now met through diesel generation. Further expansion of solar lighting systems through market initiatives including micro-financing, in the rural and urban sectors, is expected to provide access to lighting for three million households by 2012.

In this phase, the Mission will make it mandatory for all functional buildings such as hospitals, hotels, guest houses and nursing homes to install solar water heaters. Residential complexes with a minimum plot area of 500 sq m will also be included.

In the second phase, to be implemented between 2012 and 2017, the Mission will focus on the commercial deployment of solar thermal power plants. This will involve storage options, and the promotion of solar lighting and heating systems on a large scale in market mode. This will be without subsidies but could include micro-financing options.

*Finally, between 2017 and 2020, the target is to achieve tariff parity with conventional grid power and achieve an installed capacity of 20 gigawatts (Gw) by 2020.* The installation of one million rooftop systems with an average capacity of 3 kilowatts (kW) by the same year is also envisaged.

The proposed strategy of the Mission should help achieve significant reduction in the cost of solar power and create a robust infrastructure for it.


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## Gabbar

*India willing to contribute to IMF $10bn: Ahluwalia*

WASHINGTON: Stating that it is ready to contribute about $10 billion (around Rs 50,000 crore) to the International Monetary Fund, India has proposed 
the world body should issue security bonds against the amount as New Delhi is not in favour of making direct contribution. 

Planning Commission deputy chairman Montek Singh Ahluwalia, while talking to Indian news agencies on the sidelines of the G20 ministerial level meeting here, said that the negotiations in this regard were still being carried out and nothing had been finalised yet. 

"But our Prime Minister had said in April, and this has been our position for some time, we will be willing to contribute in proportion of the quota. Our view is that the resources being given to the IMF, should be viewed as an interim measure, through the new arrangements to borrow (NAB)," Ahluwalia said. 

India's existing quota share is about two per cent. "So if for example the total NAB is $500 billion, which is what was agreed in the leaders summit then India's share would be $10 billion," he said. 

India's concern, he said, is that this contribution should be made through the purchase of IMF bonds by the Reserve bank of India and not from the government because then it becomes part of the fiscal deficit. 

"So our view is that the IMF should issue securities, which can then become eligible for the countries to invest their reserves. In that case no fiscal position is affected," Ahluwalia said. 

"It is just that the central bank, in our case the Reserve Bank of India will shift some of its money, which is currently holding US treasury bills or other government bonds, to IMF bonds, which obviously are backed by the same Governments," he argued. 

As the modalities of such a contribution through securities are being discussed, Ahluwalia said: "We have said that assuming this can be shorted out, we are willing to contribute in proportion to quota. If it is deployment of reserve, it does not require any government decision anyway." 

Asserting that India's importance in the world economy is more than two per cent, Ahluwalia said: "Quota reflects the amount of weight and vote we have and I do not see why we should be contributing more than the share they are giving us to vote." 

At the same time, India has said that it is willing to increase its contribution, if its shares were to increase. "If they were to increase our share, then obviously we would contribute more, otherwise this becomes the way of funding the IMF and leaving the quotas unchanged," he said, adding that India was not in the favour of that. 

"Our view has been that this is an interim measure," he said.


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## johsen

Thanks for the information.


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## Screaming Skull

*India-Russia trade to touch $10 bn by 2010: officials​*
Tuesday, Apr 28, 2009

Bilateral trade between India and Russia is expected to increase from $7 billion in 2008 to $10 billion by the end of next year and will grow further when the comprehensive trade pact is signed, according to officials.

"Judging the way trade has grown in the last 3-4 years, it ($10 billion target) will be certainly achieved by 2010," Trade Commissioner of the Russian Federation to India E A Korshunov told reporters at a CII function today.

Both the countries will be able to enhance bilateral trade to USD 10 billion despite delay in signing the Comprehensive Economic Cooperation Agreement (CECA).

The agreement, which will facilitate free trade in goods and services between the two countries, would be signed after Russia's membership in the World Trade Organisation is approved by the multilateral organistion, Commerce Ministry Joint Secretary Neeraj Kumar Gupta said.

"The issue is on the table. The moment they access the WTO, we can start our negotiations on the CECA," Gupta added.

On trade between the two countries, Korshunov said it has increased by 30 per cent in the first quarter of 2009 (calendar year) despite global economic downturn.


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## Screaming Skull

*Bandra-Worli sea link to open by May-end​*
April 25, 2009

Mumbai's transport system will get a major boost with the Rs 1,300-crore (Rs 13-billion) Bandra Worli Sea Link all set to start functioning by May end.

Brushing aside reports that the city's first sea link would be thrown open for vehicles only next year owing to differences between the project consultants and contractors, Maharashtra State Road Development Corporation vice chairman Satish Gavai said, "We are confident that the Sea link would be ready by May end. There are no differences among any one involved in the project."







*Bandra-Worli sea link.*​
The contractors involved in surfacing the road with a final layer of tar and illumination had allegedly threatened to pull out of the project after they were asked to give longer guarantee periods for their work than what has already been mentioned earlier in the tender.

However, Gavai said the project work is in final stage, 'surface work on the road, signages and illumination would be done simultaneously'.

The MSRDC officials want it to be opened for public before model code of conduct comes into force in the state for Assembly polls scheduled in mid October, if not by May end.






*Britain's PM Gordon Brown (3rd from right) walks with officials at the sea link construction site in Mumbai.*​

Work on installing the maintenance lift that will climb to the cable-stayed bridge is also yet to be carried out.

As the deadline for commissioning of the project has been set, the contractors have been asked to finish the work as early as possible.

The project work, which was started in 2001 by Hindustan Construction Company, was supposed to be completed by mid-2008, but it suffered many delays either because of petitions over environmental or payment issues to the contractors.

The landmark structure in the city, after the Gateway of India, will have eight lanes of traffic including two lanes reserved for the buses.


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## Screaming Skull

*India: A growing link in the global supply chain​*
*With more than 500,000 new engineering graduates each year, India is in a strong position to be an engineering powerhouse.*

But while India is one of the biggest players in the services and information technology sector, the same cannot be said of our supply chain and engineering capability.

India's manufacturing exports still amount to less than 10 per cent of gross domestic product, whereas more than one-third of China's GDP comes from manufacturing.

India still doesn't have the most congenial business environment. Bureaucratic hurdles and a tough approvals system for setting up new businesses are not as severe as in the past, but they continue to create bottlenecks.

Land acquisition is a major hindrance to setting up new plants, as the problems of Tata Motors in West Bengal last year demonstrated.

Illiteracy and unskilled labor are disincentives to modern organisations that thrive on high productivity. So, too, are infrastructure problems such as clogged ports and roads, power failures, and water shortages.

In spite of these many challenges, India is slowly but surely making a mark in the global supply chain.

We are still a long way behind China and Japan, but there has been definitive progress. 

*Automobiles*

The Indian triumph in the auto supply industry is well known. A small set of Indian manufacturing companies are vendors of choice for global automobile multinationals that purchase small parts.

These suppliers are valued for their reliable, high-quality products and on-time delivery. Four Indian auto parts companies have received the coveted Deming Prize for excellence in quality.

The next challenge for Indian component suppliers is to upgrade from supplying simple parts to complex assemblies and transmissions.

The transition to high-end manufacturing already is in progress. In the automobile sector, quality is crucial for the top players.

And in a vote of confidence for India, leading carmakers such as Hyundai, General Motors, Toyota, and Ford have either tied up with a local operator or opened their own manufacturing units and are supplying cars from India to the rest of the world.

With India's manufacturers combining engineering excellence and low costs, more companies are discovering the benefits of operating out of the country. In the coming years, India should continue to be a major manufacturing base for auto companies. Local demand for small and midsize cars is growing, thanks to increasing disposable income.

The current global recession has dampened automobile demand, but it should encourage more cost-conscious manufacturers to shift operations out of Europe and the US to India. 

*Oil exploration and petroleum refining*

India currently imports nearly two-thirds of its crude oil. With volatile oil and gas prices worldwide, self-sufficiency in energy is a national imperative.

The Indian government has come up with a National Exploration Licensing Policy, or NELP, under which exploration and production companies have acquired exploration blocks.

Aggressive implementation of NELP has resulted in quite a few new gas discoveries in the last few years. Oil refining companies in India have world-class capabilities.

But the government's oil subsidy policy and differential pricing has been hurting their bottom line. Future growth in the oil and gas sector depends on new discoveries.

To be more self-sufficient and globally competitive, India needs to shift from pricey crude imports to higher volumes of Indian crude.

India also is looking toward adapting cheaper, greener alternatives such as liquefied natural gas, biofuels, and hydrogen energy.

However, for this movement to pick up momentum, the government needs to offer more incentives for research and adoption of these fuels.

More state governments should follow the example of Delhi, where enforced use of compressed natural gas for commercial vehicles has led to cheaper transportation costs and a cleaner environment. 

*Power*

Power generation, transmission, and distribution have historically been dominated by central and state government electricity boards.

More than 86 per cent of India's total capacity is owned by the central or state governments, with the private sector contributing just 13.5 per cent.

Saddled by transmission and distribution losses and rampant power theft, the state electricity boards have not been very efficient organisations, but private players have been unable to make significant inroads primarily because pricing remains subject to government control.

Introduction of private power distribution players in Delhi and Mumbai has reduced theft and streamlined the distribution process. Kolkata's RP Goenka-owned Calcutta Electric Supply Corp, the city's sole electricity provider, has brought near self-sufficiency to Kolkata through a combination of adopting modern technology in power generation and an efficient distribution mechanism.

It is a strategy worthy of emulation.

Three factors are crucial for growth and self-sufficiency in Indian power: a concerted public-private partnership in generation, transmission, and distribution; a financially viable pricing structure that is not subject to state government controls; and assured supply of fuel.

Since a power plant and its fuel source could be in different states, a predefined, mutually acceptable agreement between the state governments to facilitate smooth supply is critical. 

*Steel*

India is one of the world's leading iron ore exporters, but Indian steel manufacturers have had trouble obtaining it.

Only a handful of manufacturers have their own captive iron ore mines; the rest depend on government-owned mines. Many states with high reserves have poor infrastructure.

So in recent times global steel manufacturers have set up steel plants in raw-material-rich states such as Orissa and Bihar.

To drive growth in the Indian steel industry, the government should encourage investment in fresh mining of iron ore, coal, and gas.

The government should also formulate a policy to encourage investors to buy (or lease) iron ore and coking coal deposits abroad.

In the short term, the government should narrow the supply gap by diverting some iron ore exports to domestic steel producers.

And since economy of scale is a proven success factor for growth in the steel industry, the government should encourage global manufacturers to tie up with Indian manufacturers. 

*Hardware and consumer electronics*

Electronics hardware is one of the largest and fastest-growing industries in the world.

The Indian government's special economic zone policy encourages duty-free imports and tax concessions.

Global manufacturers such as Samsung, Nokia, Motorola, and Texas Instruments have already established manufacturing operations in India. That's because the government allows 100 per cent foreign direct investment in this sector.

As per the investment commission's estimate, India is expected to attract a total of $6 billion to $10 billion in foreign direct investment by the end of 2010.

With the availability of cheap skilled manpower, incentives on exports and imports, and an ever-growing domestic market, this industry should see rapid and continued growth in the next few years.


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## Screaming Skull

*GoI to get over $ 2.6 bn in FY 2009 from telecom operators​*
29 Apr 2009,

NEW DELHI: The government's revenue from telecom operators in 2008-09 is expected to be more than Rs 13,000 crore ($ 2.6 bn), the biggest non-tax income for the exchequer.

The Department of Telecom is expecting to get about Rs 13,000 crore upwards from the service providers as licence fee and spectrum charges, a senior official told reporters on Wednesday.

The DoT's calculation is based on an estimate of telecom companies earning about Rs 1.25 lakh crore in the said period. Their adjusted gross revenue (exclusive of revenue from non-telecom operations) is put at Rs 95,000 crore and DoT hopes to get 12 per cent (Rs 13,000 crore) of AGR as license fee and spectrum charges.

DoT collects an average of 12 per cent of the total levy (6-10 per cent of license fee depending on circles plus 2-6 per cent spectrum charges depending on the quantum of radio waves).

The official said this is the highest non-tax revenue for the Government of India.

The government has so far earned Rs 55,000 crore ($11 bn) over the past five years as telecom licence fee and spectrum charges.

"Licence fees and spectrum charges of over Rs 55,000 crore have been collected since 2003 when the UASL regime came into effect. Every year telecom revenues are growing by about 15 per cent," Telecom Minister A Raja had said last year.


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## Screaming Skull

*&#8220;Choose our $13 trillion market or Iran's $ 250 billion&#8221;: US lawmakers threaten RIL​*
Wednesday, April 29, 2009

WASHINGTON: *Asking Reliance Industries Limited (RIL) and other energy firms doing trade with Iran to choose either Tehran or Washington, the US Senators have moved a Bill aimed at penalising such companies.*

&#8220;We know who these companies are - *Shell, Vitol, BP and Reliance - and we need to give them a choice: you can do business with Iran's $250 billion economy or our $13 trillion economy, but not both,&#8221;* said Senator Mr Jon Kyl, who was a part of the bipartis an coalition of 25 Senators that introduced the Bill.

The Senators have sought to strengthen President, Mr Barack Obama's authority for stopping Iran's pursuit of nuclear weapons through their proposed legislation, which targets foreign companies that sell gasoline or other refined petroleum products to Ira n.

The legislation also authorises the President to impose stronger penalties on these firms, including a ban on conducting business in the US.

The legislation, introduced in the US Senate yesterday, comes within days of another resolution introduced in the House of Representatives on April 21 to enhance the Obama administration's diplomatic efforts with respect to Iran by expanding economic san ctions against the country. -


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## Screaming Skull

*India Inc may hike salaries by 6-8 pc in 2009: HR survey​*
Wed, Apr 29, 2009

New Delhi: At a time when the global job scenario is gloomy, India Inc is expected to increase salaries up to eight per cent this year with infrastructure and FMCG sectors likely to see the maximum hikes, global HR consultancy Mercer says.

"Overall Indian companies are likely to increase salaries between six and eight per cent in 2009," Mercer India business leader (information product solutions) Gangapriya Chakraverti told PTI.

Despite the economic slowdown troubling the corporate world, the country's fast moving consumer goods (FMCG) and Infrastructure sectors are likely to see the highest increases in salaries this year.

"Sectors like FMCG and infrastructure are expected to get the highest hikes of 8-12 per cent this year," Chakraverti added.

Meanwhile, financial services and Information Technology sectors, which have been severely impacted by the global slowdown, are unlikely to see any considerable increases in wages this year.

"IT and financial services may be the worst hit ... IT sector may see an average salary increase of four per cent this year," Chakraverti added.

With the beginning of the new financial year, companies are now drawing up plans related to the salary increments. However, in the wake of the severe economic conditions firms are looking for ways to answer the HR challenges in a balanced manner.

Mercer, which provides HR consultancy services to companies, has launched a new product for its clients to provide quarterly information such as changes in HR budget, staff turnover, headcount growth and planning, changes to benefits and incentive plans.

The services also include first-hand market information on how companies plan to address a specific hot issue as well.

Interestingly, focus on performance has been enhanced substantially following cost-cutting initiatives introduced by companies amid the slowdown.

The trend is shifting towards a greater difference between salary increases for the high performing individuals and the average performers.


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## Screaming Skull

*Sensex jumps 17.45% in April; best in 10 years​*
29 Apr 2009,

MUMBAI: The BSE Sensex rallied 3.65 percent on Wednesday and propelled gains to more than 17 percent in April, its best monthly performance in 10 years, as a wave of improved investor confidence swept across the world.

Foreign funds led the buying, pumping in more than $1.4 billion in April 1-27, their biggest inflow since October 2007. The rally was also powered by expectations India's economy would pick up later this year.

The 30-share BSE index jumped 401.50 points to 11,403.25, its highest since Oct. 14 last year. It rose 0.65 percent in the holiday-shortened week, taking the weekly winning streak to eight and matching the run of gains in September to October 2007.

The benchmark rose 17.45 percent in April, making it the best-performing major Asian index this month.

Outsourcer Infosys Technologies, energy giant Reliance Industries and private-sector lender ICICI Bank were among the major gainers as the rally drew fence-sitters into the market.

"There was a lot of money sitting on the sidelines, and once momentum in a market picks up, the people sitting on the sidelines automatically jump into it," Ambareesh Baliga, vice president at Karvy Stock Broking, said.

Much of the early rise was led by short-covering on the last day of monthly derivatives and then the momentum swept the market higher despite a four-day weekend ahead and concerns of a possible flu pandemic in some countries. 

The market is closed on Thursday as Mumbai votes in national elections and for a local holiday on Friday.

All but one of the index components rose while in the broader market, advancers led losers 1,436 to 1,031 on above-average volume of 419.6 million shares.

The benchmark index, which has leapt 42 percent since hitting a 2009 low on March 6, could face resistance next week as political uncertainties come back to the fore ahead of election results due on May 16.

"I don't think this momentum can be sustained, because in May the election will start playing on the mind of investors," T.S. Harihar, senior vice president at ICICI Securities, said. "This could lead to a correction before the results are announced."

Added Karvy's Baliga: "No one knows who is going to come to power and all signs point to a very fractured coalition. Then how can one justify such a huge rally even if fundamentals may have slightly improved for the better. It has no logic."


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## Screaming Skull

*Indian economy to recover from mid-2009: Macquarie​*
29 Apr 2009,

NEW DELHI: Indian economy will begin to recover from the middle of this year, thanks to the fiscal and monetary measures taken up by the government, but the outcome of the ongoing general election remains a legitimate concern, global research firm Macquarie has said.

Macquarie said, "Our view remains that the largely domestically-driven Indian economy will begin to recover palpably from mid-year onwards."

The double-cylinder fiscal and monetary response has been aggressive and already paying dividend, the research firm said but added that "political uncertainty over the outcome for the ongoing general election remains a legitimate concern".

*The other factors likely to contribute include that India is relatively less dependent on exports, its export profile is not heavily dependent on electronic or automotive shipments and the domestic fiscal and policy response has been aggressive and effective.*

Macquarie further said the Reserve Bank of India appears to be approaching the end of the policy rate-cutting cycle, but banks have more room to cut their lending rates more aggressively, which in turn should boost economic activity.

"Indeed, the broader setting is evolving nicely to position the economy for a better second-half of FY'10. Currently, we forecast a full-year GDP growth of 5.5 per cent for FY'10 following an estimated 6.5 per cent in the last fiscal year," Macquarie said.


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## Gabbar

Mumbai sea-link bridge gets connected​
*VIDEO:* Mumbai sea-link bridge gets connected-News-Videos-The Times of India


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## Screaming Skull

*First eight days of IPL-2 record 88 m viewership​*
Thursday, Apr 30, 2009

Mumbai: The first 8 days of IPL-2 have recorded a cumulative viewership of 88 million with an average TVR of 4.61 at an all- India level, according to TAM.

Cumulative viewership is the total number of viewers who have watched the matches for at least a minute. With varying TVRs across the first 8 days, it was the single match played between Royal Challengers and Chennai Super Kings on April 20 which recorded the highest TVR at 5.56 (with 34 million viewers) while the lowest TVR was at 3.38 (20 million viewers) for the match played between Kings X1 Punjab and Knight Riders (the day the second match was rained out). The match on April 23 between Rajasthan Royals and Knight Riders, which had the super over, also recorded a relatively high TVR at 5.43 as reported by TAM.

Meanwhile, according to aMap, day 11 (28th April) brought with it a prime time clash between the Delhi Daredevils and reigning champs Rajasthan Royals with a TVR of 4.1. As Yusuf Pathan of Rajasthan Royals unleashed his batting on the unsuspecting Delhi team, the ratings (top 6 metros, C&S15+) of 4.1 per cent, stayed true to the trend that has been set by the prime time matches of IPL 2, over the past few days.

This figure was marginally lower than last years figure of 4.4 per cent for day 11.

However, net reach per cent (top 6 metros, C&S4+) was higher at 14.4 per cent as opposed to 13.6 per cent.

According to Mr Prasanth Kumar, Managing Partner, Group M, CTG (Central Trading Group), Clients who have invested behind IPL-2 have paid for an overall package and have made decisions taking into account the varying viewership during the tournament.


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## Screaming Skull

*Exports to US fell by 11.5 pc since Oct: FICCI​*
30 Apr 2009,

NEW DELHI: India's exports to the US, the single largest market for local exporters, dropped 11.5% during October'08-February'09, as per a study
by industry chamber FICCI. The study also revealed that India has lagged behind other competing countries such as China, South Korea and Brazil, that export to the US.

This has come about even as US-bound exports from Ireland, Indonesia and Vietnam have grown in the range of 3-12% during the same five month period. Although exports from China, Korea and Brazil have also dropped, India has fared the worst, as per FICCI. But India outperformed Malaysia, Taiwan, Thailand, Russia and Singapore for the period.

In the first two months of 2009, Indian exports to the US dropped 23%, much more than the fourth quarter of 2008, indicating a worsening situation. In the previous quarter (July-September 2008) exports actually grew 14%.

The sectors worst affected by the decline in exports to US include gems & jewellery, textiles & apparel, pharmaceuticals, auto & auto components, marine products and non-ferrous metals. In contrast, chemicals, machinery, iron & steel, instruments, leather, plastics, agro-items and processed food saw higher exports.

India's exports of machinery & parts grew 19% to $1.2 billion against a 15.4% decline in US global imports of this category. Similarly chemicals export increased over 14% to $974 million even as US chemical imports from all countries put together declined 1.5% for the period. Exports of iron & steel from India matched the 14% rise in US global imports of the products.

The FICCI study observed that in two categories India has lost some share of US imports to competitor countries. In textiles & apparel, Bangladesh and Vietnam have expanded their exports 18% and 9% respectively when Indian exports fell 6.5%. Similarly, India's pharmaceuticals exports declined 37% at a time when such exports from China, Israel and South Korea moved up 27-41%.


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## Screaming Skull

*OVL, IOC to invest $4 bn in Iran gas field​*
New Delhi May 1, 2009,

ONGC Videsh Ltd and its partners Indian Oil Corp and Oil India Ltd are likely to invest about $4 billion to start production from a massive gas field they discovered in offshore Iran, in the next 3-4 years.

"Iran had in September 2008 approved the commerciality of the discovery and the three partners are now in the process of preparing a development plan. Investments may be in the range of $4 billion," an ONGC official said. 

The discovery, which was subsequently named Farzad gas field, has in place reserves of up to 21.68 trillion cubic feet (Tcf), of which recoverable reserves may be 12.8 Tcf. 

The Indian firm want to liquefy the gas and ship it to India in the form of liquefied natural gas. "The oil and gas will belong to the National Iranian Oil Co (NIOC). They have the marketing rights and we have requested them to allocate the gas to us for converting it into LNG," he said. 

OVL, which holds 40% interest and is the operator of the block, has also submitted a feasibility report for the one billion barrel oil discovery it made in 2006. 

Oil was found in the BB structure in 2006, the discovery has been named Binaloud."Feasibility report of the oilfield has been submitted to the National Iranian Oil Company, Iran, on November 26, 2008," he said.


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## Screaming Skull

*India's exports grow by 3.4% to $169 bn last fiscal; miss target​*
1 May 2009,

NEW DELHI: India's merchandise exports fell short of the target set for the previous fiscal and were valued at $168.7 billion, up merely 3.4 per cent over $163.13 billion in the year before, latest trade data showed on Friday.

The government had set a target of $200 billion, which could not materialise due to the general downturn in the global economy and recession in some of the country's largest trading partners such as the US and Britain.

Even the revised export target of $175 billion proved elusive. The country had logged an export growth of 23 per cent during 2007-08 at $155.51 billion.

In fact, the exports during March this year were valued at $11.52 billion, which was 33.3 per cent lower than the $17.25 billion registered during the like month of the previous year, the commerce ministry data showed.

The cumulative value of imports for 2008-09 was $287.76 billion, up 14.3 per cent over $25.17 billion registered the year before. In March, imports declined 34 per cent to $15.56 billion from $23.57 billion.

Import of oil during 2008-09 was valued at $93.18 billion, up 16.9 per cent from $79.72 billion in the like period of the previous fiscal. In March, the imports totalled $3.81 billion, down 58.1 per cent from $9.08 billion in the corresponding month the previous year.

Accordingly, the country's trade deficit has been estimated at $119.06 billion, as against $88.52 billion during the fiscal year ended March 31, 2008.


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## Screaming Skull

*TATA to launch Jaguar & Land Rover in India by June​*
1 May 2009,

MUMBAI: Tata Motors-owned British luxury car maker Jaguar Land Rover (JLR) is set to launch its premium brands in the Indian market next month, the company said in a statement on Friday. 

"We are delighted to be formally entering the Indian market, an economy which is still growing appreciably, and able to offer our premium products to a whole new group of customers," a JLR statement said. 

"It is an important strategic move for Jaguar Land Rover and will enable us to realise our competitive potential in this significant market," JLR chief executive David Smith said in the statement. 

In India the JLR's first showroom will open at Mumbai's Ceejay House in Worli in June. The import and sales will be managed by Tata Motors' newly-formed luxury car division. 

Jaguar and Land Rover were acquired by India's Tata Motors from American carmaker Ford last March for 1.7 billion pounds (about $2.5 billion) 

The luxury cars will be imported by Tata Motors, which is also the manufacturer of the world's cheapest car - Nano, and will be sold through its sales and dealership network. 

The initial lineup will include the Jaguar XF, Discovery and Range Rover models. The moves comes as a logical step for the automaker to tap into India's growing luxury car market. 

"This is a natural move for both businesses and will allow Jaguar and Land Rover to establish a strong and deserved presence in India. We are very pleased to provide the opportunity for Indian customers to access the premium products for the first time," Tata Motors managing director Ravi Kant said in a statement. 

The India debut comes at a time when JLR, with production facilities at Halewood, Solihull and Castle Bromwich in Britain, has been hit by the recession in Europe and is seeking a 800 million pound rescue package from the British government. 

The company, which has a workforce of over 15,000, has retrenched 450 workers this year and is looking at 198 voluntary retirements in its managerial team to cut costs.


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## Screaming Skull

*PMEAC says India will grow at least 6.5 per cent in FY10​*
1 May 2009,

NEW DELHI: Counting on the general elections to spur the sagging economy, the Prime Minister's economic advisory panel has said it expects the country to grow at 6.5 to over 7 per cent in 2009-10. 

"I expect the economy to grow by 6.5 per cent to 7 plus per cent in the current fiscal year," the Prime Minister's Economic Advisory Council (PMEAC) Chairman, Suresh Tendulkar, told reporters. 

Earlier the Council's outlook was 7-7.5 per cent for the year. Even the revised forecast is yet quite optimistic compared to other agencies. 

"The election expenditure will act as a big stimulus by resulting in additional purchasing power," he said, adding that the lower interest rate regime has already kicked in, which will help growth. 

A equally optimistic projection has come from the Chief Economic Adviser to the Finance Ministry, Arvind Virmani, who expects the country's economy to grow 6.5-7.5 per cent. 

Others who gave high forecasts include economic think-tank National Council of Applied Economic Research (6.5 per cent) and credit rating agency ICRA (6.5-7.5 per cent).


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## sob

Exports down 33.3%, most in 14 years

Weak demand from developed nations aggravating woes; imports also fell for third month in a row

Indias merchandise exports in March declined for the sixth successive month on weak external demand from developed economies, denting hopes of an early economic revival.
Exports which contribute around 16% to Indias gross domestic product (GDP), fell by 33.3% in March to $11.5 billion (Rs57,730 crore today), the sharpest fall since April 1995. Exports for the fiscal year 2008-09 touched $168.7 billion, recording a 3.4% growth in dollar terms and falling short of the governments revised target of $170 billion, according to data released by the ministry of commerce and industry on Friday.
Imports in March also declined for the third successive month. The decline, by 34% to $15.6 billion, was led by lower crude oil prices and weakening domestic demand. In fiscal year 2008-09, imports grew 14.3% to touch $287.7 billion.

Exports down 33.3%, most in 14 years - Home - livemint.com

With all this news we are still going to register 5.5- 6% GDP growth. Looks like the domestic consumption is taking the slack from the exports.


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## sob

Indian stocks 2nd best performers among Bric in April

Indian stocks have provided a return of nearly 19.54% in April, while China and Brazilian markets have given 10.87% and 18.89% respectively

New Delhi: Following a sharp recovery in the equity markets, Indian stocks have emerged as the second best performers as compared to their peers in three other Bric nations - Brazil, Russia and China, giving close to 20% return in April.
According to an analysis of MSCI Barra indices, a measure of returns from various stock markets across the world for foreign investors, Indian stocks have given the second highest return after Russia among the four Bric countries during last month.

Indian stocks have provided a return of nearly 19.54% in April, while China and Brazilian markets have given 10.87% and 18.89% respectively.
Indian stocks have even outperformed the MSCI Barras emerging market index, which includes all the developing world markets, giving returns to foreign investors to the tune of 16.28% in the month.
After losing nearly 50% in the past one year, Indian stocks have gained close to 18% in the first four months.

Indian stocks 2nd best performers among Bric in April - Money Matters - livemint.com

We could see some sharp fall in case the election results do not give a clear picture.


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## Screaming Skull

*Indian pharma emerges big player in Japan​*
Mumbai May 2, 2009,

Leading Indian drug makers such as Ranbaxy, Lupin, Zydus Cadila and Dishman, which forayed into Japan in the past three years, have emerged as important players in the generic or copycat drug business of patented medicines in that market, the second largest in the world.

The Japanese drug market, second after the US with a size of $74 billion, has a small generic segment, worth 5 per cent of the total in value terms and 17 per cent in volume terms.

While only three of the worlds top 15 generic drug makers  Mylan Laboratories and Hospira of the US and Novartis generic arm Sandoz  could corner some share of this market, Indian companies have established a strong presence.

According to analysts, Indian players have already cornered about 10-15 per cent of the $3 billion generic market in Japan, which is estimated to grow manifold in the coming years due to health reforms.

The current size of the generic market in Japan is very small, but now the Japanese government is encouraging doctors to prescribe generics to cut healthcare costs. This will help Indian companies, which entered that market early to tap the opportunity, said Ranjit Kapadia, a senior industry analyst.

Most of the 50-plus generic drug makers in Japan are small-scale and medium-scale companies and about 10 are large-scale players.

Indias largest drug maker, Ranbaxy Laboratories, was the first Indian company to test the Japanese waters through a 50:50 joint venture with a local company, Nippon Chemiphar, in 2005. Ranbaxy has five products in the market, led by voglibose, clarithromycin and amlodipine, in therapeutic segments such as diabetes, anti-infectives, anti-allergics, anti-fungals and hypotensives. Of this, voglibose and clarithromycin are among the top-selling generic brands in Japan. Ranbaxy earned about $28 million revenue from that market in 2007.

However, the company severed its ties with Nippon last year following the acquisition of Ranbaxy by Japanese drug major Daiichi Sankyo.

In October 2007, Lupin acquired Kyowa Pharmaceuticals to enter Japan. Sales of Kyowa have grown over 21 per cent during the past year and it ranks as the eighth-largest generic player in Japan, according to Kamal K Sharma, managing director of Lupin.

It is very difficult to establish presence in the Japanese market, as manufacturing and other quality norms are very stringent. Therefore, it is necessary to have a manufacturing base in that country, he said in a recent interview with Business Standard.

Industry sources said the future for generic drugs in Japan looked promising. To reduce healthcare costs and increase generic penetration, the Japanese Ministry of Health had announced a programme two years ago to raise the share of generic drugs from 17 per cent to more than 30 per cent by 2012. The government has introduced a generic substitution system, in which pharmacists are allowed to substitute generic drugs if doctors do not specify that a brand name drug is to be dispensed.

Besides, since most pharmacists are currently reluctant to substitute generic drugs for branded ones because of lower profits in the generic segment, pharmacists are being offered incentives if they stock and dispense a certain volume of generic drugs.

Zydus Cadila entered the Japanese market in 2006 and followed by acquiring Tokyo-based, privately-held Nippon Universal Pharmaceutical, which reaches more than 4,000 hospitals and clinics across the country. Its plan in Japan is to feed at least five to six products every year to the portfolio and build a basket of 40-50 products over the next few years.

Another Ahmedabad-based company, Dishman Pharmaceuticals and Chemicals, floated a joint venture, Dishman Japan, in association with Azzurro Corporation, a 30-year-old marketing firm known well in the Japanese pharmaceutical market.

With generic margins eroding in the US and Europe, Indian drug makers are increasingly looking at the Japanese market. Many large and medium-level Indian companies are looking there in a big way. These include major players such as Dr Reddy's Laboratories and Biocon.


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## Screaming Skull

*Robust growth in auto sales for fifth straight month​*
2 May 2009,

NEW DELHI / MUMBAI: Car and two-wheeler sales saw the fifth straight month of growth in April, buttressing evidence that the recovery was no flash in the pan and providing increasingly rare good news for a sector reeling under the threat of global bankruptcies.

Last month saw market leaders such as Maruti Suzuki, Hyundai Motors, Mahindra & Mahindra and Honda Seil better their performance over the corresponding month of the previous year, helped by the governments stimulus packages, cuts in lending rates and as elections boosted demand for vehicles, especially jeeps and SUVs.

The sentiment has improved and the Nano is likely to give a fresh lease to auto sales. But demand in the coming months will be determined by the policies of the new government, said Abdul Majeed, analyst with PriceWaterhouse.

Maruti Suzuki, which makes every second car sold in India did particularly well, with a 9% year-on-year growth in April, while close competitor Hyundai Motors sold 4% more this year.

Mahindra & Mahindra (M&M), with its array of SUVs and mini-trucks, saw sales jump 36%, as elections boosted demand for its products tailor-made for the rough terrain of rural India.

Surging rural demand also helped two-wheeler maker Hero Honda post a 29% increase in sales. The company, Indias and also the worlds largest two-wheeler maker, sold 3.70 lakh units in April, up 29% year-on-year. Hero Hondas senior vice president for sales and marketing Anil Dua said he expected the trend to continue in the coming months.

Its competitor Yamaha Motors India sold posted a 48% increase in sales to 15,120 units, thanks to high demand for its 150-cc bikes, while TVS Motors sales rose 3% to 1.13 lakh units, with light scooters driving demand in small cities and towns.

Among car makers, Marutis success was mainly centered on its best-selling sedans SX4 and Dzire. The elections boosted demand for its utility vehicles Gypsy and Grand Vitara, with their sales jumping 10-fold to 905 vehicles in April.

According to Marutis executive officer for marketing & sales Mayank Pareek, the company, on an average, has gained 11% in sales in the past four months. Sales will rise further once Marutis premium hatchback Ritz is launched, he said.

Two auto analysts ET spoke to said new launches such as Ritz, Hondas premium hatchback Jazz and Fiats mid-sized hatchback Grande Punto will fuel auto growth further this year.

Honda Siel Cars India (HSCI) posted a 7.5% increase in sales to 3,656 cars during April.

M&M, which saw its sales double in April from the monthly average of 10,000 units in the past fiscal year, attributed it directly to the election demand. The companys chief of operations for automotive sector, Rajesh Jejurikar, said M&Ms recently-launched Xylo posted its highest monthly sales of 3,509 units in April. But its sedan Logan continued to perform poorly, with sales more than halving to 550 cars.


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## Screaming Skull

*Inflows hit $1.57 bn in April; beats traditional favorites Korea, Japan, Taiwan and Philippines​*
MUMBAI: After a 15-month hiatus, India once again seems to be showing up on the investment radar of foreign portfolio investors. The country has pocketed equity investments worth around Rs 7,000 crore in April, ahead of traditional favourites like Korea, Japan, Taiwan and Philippines.

Furthermore, market participants back home are not expecting any major reversal in these flows immediately, unless the risk perception about emerging market equities deteriorates.

Global liquidity is improving for sure. This is prompting FIIs to rebalance their portfolios; we expect capital inflows to continue for some time, said Sundaram BNP Paribas Mutual Fund equities head Satish Ramanathan.

Compared to India, which has pulled in $1.57 billion of foreign money, other emerging markets such as Indonesia, the Philippines, Taiwan and South Korea have bagged $18 million, $531 million, $632 million and $7 million, respectively. Japan, which is considered a defensive market in Asia, has seen a capital outflow worth $521 million.

Our recent wealth manager survey states that China and India will remain the most attractive investment destination in Asia. Respondents were not really favouring markets like South Korea, which is expected to yield negative returns, Barclays Capital managing director and investor solution head Peter Hu told ET.

According to Mr Hu, most overseas wealth managers who participated in the survey are expecting to increase equity investments in emerging Asia over the next six months.

Though numbers are not available, market experts hold the view that China has been the major beneficiary of increased global liquidity over the past two months. Popular estimates state that China would have drawn in twice the amount that India has attracted by way of portfolio inflows.

India is a very huge market when compared to Indonesia or Taiwan; therefore it leaves no scope for comparison. Very positively, India has been witnessing good inflows, but a good portion of it is quick money, said Ambit Capital CEO (equities) Andrew Holland.

For now, foreign institutional investors are hurriedly deploying money in emerging equities as they have been maintaining high cash levels for some time. All depends on global markets and the outcome of domestic elections for such a trend (of inflows) to continue, Mr Holland added.

A lot of hedge funds  who were underweight on local shares earlier  are now covering up their India positions. A few long-term investors are also buying select fair-value scrips. The lowering of interest rates has instilled confidence in foreign investors who feel the government will not compromise on growth at any cost, said Morgan Stanley Investment Management CEO Anthony Heredia.

According to experts, though foreign investors do not really consider foreign exchange rates while investing in equities, the gradual weakening of rupee against dollar has helped foreign investors to buy more Indian shares at lesser dollar value.


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## Screaming Skull

*India Incs profitability improves in March quarter​*
Saturday, May 02, 2009

Corporate Indias net profits in the fourth quarter were slightly better compared with the immediately preceding quarter.

A performance review of quarterly results of a large sample of 715 companies (excluding banks and financial institutions) in the listed universe reveals this.

​
For the quarter ended March 2009, sales declined by 1.4 per cent, while net profits were higher by 23 per cent, compared with the December 2008 quarter.

This may well be the early signs of a turnaround in corporate fortunes, although seasonal (year-on-year), rather than the sequential, comparisons are the norm.

Note that in the quarter ended December 2008, sales had declined by 7.7 per cent while adjusted net profits were lower by 14 per cent compared with the September quarter.

*Cost cutting*

Cost savings appear to have been a key factor that aided profit growth despite faltering sales.

Indian companies have managed to contain costs across various fronts. While the effect of falling commodity prices began to be visible in the raw material costs of December quarter itself, power and fuel costs have also seen a significant decline in the latest March quarter, even as material costs continued to trend down. Cement companies have been the major beneficiaries of this trend.

A good number of others, especially IT companies such as Wipro, Tech Mahindra and Polaris Software, witnessed a sharp decline in their employee expenses/selling and administrative expenses (S&A).

Overall, while raw material costs declined by a marginal 2.2 per cent and S&A expense dropped by 7.3 per cent, power and fuel dipped by a significant 19 per cent compared to December.

Lower costs propped up sequential operating profits by 23 per cent in the March quarter compared with a dip of 18 per cent witnessed last quarter. The expansion in operating profits as well as decline in interest costs helped net profit growth.

Net interest cost for the quarter was lower by 20 per cent compared with December on the back of a softening interest rate regime.

However, this picture could well change as the results of companies from sectors with high leverage are yet to be published.

It may be noted that on a year-on year basis, the March quarter numbers remained sedate with a 0.1 per cent decline in sales with net profits lower by 2.2 per cent.

*A caveat is in order.*

For a majority of listed companies, March 31 is also the last date for the close of the financial year and hence, the results season stretches until June 30 with companies preferring to disclose audited results a little later rather than unaudited ones. Also, a number of companies from sectors such as metals, engineering and real estate are yet to announce their results.


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## Screaming Skull

*CII projects 6.1-6.5% GDP growth this fiscal​*
Sunday, May 03, 2009

NEW DELHI: Even as the Indian economy witnessed a considerable slowdown in the second half of 2008-09 in the wake of the global meltdown coupled with a cyclical domestic downturn, the Confederation of Indian Industry (CII) expects a recovery in GDP (gross domestic product) growth to 6.1-6.5 per cent in the current fiscal.

According to a report on the State of the Economy released here, the apex chamber has factored in a base-case scenario GDP growth of 6.1 per cent in 2009-10 which is to be driven mainly by the decline in interest rates, moderation in the prices of essentials such as food and fuel and reduction in indirect tax rates.

Alongside, this scenario has factored in sectoral growth rates of 2.8-3 per cent in agriculture, 5-5.5 per cent in industry and 7.5-8 per in services. Rural demand has also remained strong in view of the good performance of the farm sector. The fact that rural demand remains unaffected by global developments is a source of strength for the Indian economy, CII Director General Chandrajit Banerjee said.

A more decisive recovery, the report said, would be possible through further monetary easing by cutting the repo and the reverse repo rates by at least 50 basis points, implementing large infrastructure projects and reviving confidence by ensuring a business-friendly environment. If these revival measures are implemented, the GDP growth during 2009-10 could be higher at 6.5 per cent. An analysis of the financial performance of 324 companies (173 in manufacturing and 151 in the services sector) for the quarter ended March 2009 revealed that there has been a slowdown in sales growth and contraction in net profits during the period. Net sales grew 8.7 per cent during the fourth quarter last fiscal as compared to a growth of 23.7 per cent in the previous quarter. The moderation in sales growth, the report said, has been accompanied by a similar moderation in raw material costs, reflecting the decline in global commodity prices. As a result, net profits of the sample companies contracted by one per cent during the last quarter of 2008-09, marking a slight improvement when compared to the contraction of 2.4 per cent in the previous quarter.

The chamber also pointed out that at a time when the global economy and global trade are projected to contract, it would be extremely important to maintain countercyclical fiscal and monetary policy measures. As the drivers of economic growth have to come from domestic sources, the Government has to maintain higher spending, especially in creation of public assets, while monetary policy should be supportive. Any pressure on interest rates to rise at this juncture will crowd out private spending, Mr. Banerjee said.

*Capital inflows*

The global financial turmoil, the report pointed out, also resulted in a sharp decline in capital inflows. During April-December 2008, while the balance of payments ran a deficit of $20.4 billion, the countrys foreign exchange reserves declined by $57.4 billion during the fiscal. This decline has been somewhat halted since March 2009, reflecting some revival in capital flows. To guard against possible downturns in future, policies need to be in place to ensure that India remains an attractive investment destination and particularly conducive to large FDI (foreign direct investment) inflows, it said.


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## Screaming Skull

*Vizag Port to double cargo handling capacity from 62 million tonnes to 125 million tonnes by 2012​*
Sunday, May 03, 2009

VISAKHAPATNAM: With the help of private investors, Visakhapatnam Port Trust (VPT) will enhance its cargo handling capacity from 62 million tonnes to 125 million tonnes by 2012.

The capacity increase through modernisation of existing facilities and creation of new berths would be done with a total investment of Rs. 2,600 crore, Port Chairman Ajeya Kallam told reporters here on Saturday.

Of the Rs. 2,600 crore, the port would invest Rs. 1,200 crore from internal accruals. To a question, he ruled out the possibility of raising a part of the investment from the market.

The port, which is hit along with other major ports due to global meltdown and the challenge posed by the launch of operations in its neighbourhood by Gangavaram Port, is in the process of developing two berths on BOT (build-operate-transfer) basis, mechanisation of coal handling at general cargo berth and mechanised fertilizer handling at EQ-7 berth, upgrading outer harbour to handle two lakh dwt ships and Phase-II deepening of inner harbour entrance channel to cater to 12.5 metre draft vessels.

Tenders are now under evaluation for strengthening five berths in the inner harbour.

Techno-economic study for developing the east docks is being entrusted to Indian Ports Association. Proposal for development of WQ-7 and 8 berths, including mechanisation, is under process.

Mr. Kallam said the port was taking up eight projects under public-private parnership (PPP) mode and expressed the hope that it could handle a throughput of at least 85 million tonnes by 2012 by creating world-class facilities.

*Performance*

On its performance during the just concluded financial year, he said it could finish second after Kandla Port by handling 63.90 million tonnes as against 64.59 million tonnes in the previous year.

The stagnation in growth is attributed to recession, shift in part of trans-shipment cargo to Paradip following commissioning of pipeline up to Haldia, fall in iron ore traffic to China and diversion of coking coal and other bulk traffic to Gangavaram Port on economic considerations.

To a question, he said the port was commissioning a study by the Kolkata-based institute on finances involved in the shifting of fishing harbour to another area and make use of the vacated space for creating additional facilities for the port. Even if found viable, its implementation will take a long time due to the requirement of about Rs. 600-800 crore, he said.


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## Screaming Skull

*Indian ADRs gain $14 bn in April; ICICI Bank accounts for one-fourth​*
Monday May 4, 2009

Indian companies listed on American bourses saw their cumulative market capitalisation increasing by nearly $14 billion in April, with ICICI Bank (ICICIBANK.NS : 529.9 +50.7) alone accounting for nearly one-fourth of the total gains. 

Led by ICICI Bank, which gained $ 3.45 billion in April, the total valuation of 16 Indian stocks trading on the New York Stock Exchange and the Nasdaq climbed by $13.52 billion last month. 

Private sector lender HDFC Bank saw its valuation rise by $1.78 billion. At the end of trading on Friday last week, the market capitalisation of ICICI Bank stood at $11.45 billion, while HDFC Bank's was at $11.62 billion. 

Besides, IT major Infosys (INFOSYS.BO : 1629.25 +121.95) and Wipro (WIPRO.NS : 365.55 +34.7) witnessed a combined addition of $5.29 billion to their market caps in April. 

IT bellwether Infosys' valuation increased $2.12 billion in April to $17.59 billion while Wipro's market cap stood at $13.79 billion at the end of Friday's trade. 

Among the Indian stocks, BPO company EXLService was the only one to witness a decline in valuation. EXL Service's market cap stood at $255 million on Friday last week, a loss of $4 million over previous month. US markets witnessed robust trading sessions last month, propeled by the financial sector. Ushering in hopes of a possible early recovery, financial services majors such as Citigroup and Bank of America reported better-than-expected quarterly results. Copper producer Sterlite Industries and auto maker Tata Motors (TATAMOTORS.BO : 257.2 +24.4) saw their valuations jump by $1 billion and $937 million, respectively over the previous month. 

BPO companies Genpact and WNS Holdings, IT major Patni Computer Systems (PATNI.NS : 170.95 +9.6) and pharma major Dr Reddy's Laboratories' valuation increased in the range of $81-275 million. During the week ended last Friday, 16 stocks witnessed a gain of $3.55 billion in their total valuation. 

Infosys' valuation increased by $1.42 billion during the week, while ICICI Bank gained $152 million over the previous week.


----------



## Screaming Skull

*Manufacturing expands for the first time in 5 months: PMI​*
4 May 2009,

MUMBAI: Activity in Indian factories expanded for the first time in five months in April as a swelling orders pipeline pointed to a tentative recovery, a survey showed on Monday. 

The ABN AMRO Bank purchasing managers' index (PMI) based on a survey of 500 companies, rose to 53.3 in April from March's 49.5, climbing above the threshold of 50 that separates expansion from contraction. 

The latest reading is the highest in seven months and it has steadily risen after hitting a trough of 44.4 in December. A 

The PMI survey, which is compiled by UK-based Markit Group, comes well ahead of official statistics. 

Several research notes in the past few days have pointed to improvement in economic activity in the months ahead. But the central bank remained cautious about the outlook at its policy review last week. 

Manufacturing makes up about 16 percent of India's gross domestic product. Government data shows India's factory output fell for the third time in five months in February as the global slowdown hit hard but analyst said they saw some signs of revival after a dismal March quarter. 

The boost in manufacturing index came from a surge in new orders. The new orders index rose to 54.9 from 49.5 in March. 

The Reserve Bank expects the economy to grow at around 6 percent in 2009/10, a seven-year low, after growing at an average rate of around 9 percent or more in three fiscal years to March 2008. 

In order to stimulate demand in Asia's third-largest economy, the central bank has aggressively cut rates since October, most recently last week and has flooded the banking system with cash to stoke bank lending. 

The key short-term lending rate has now been cut by 425 basis points in six moves to stand at 4.75 percent. 

The government has cut factory gate duties and announced stimulus packages including $4 billion in extra spending to protect growth in the face of the global slowdown.

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## Screaming Skull

*Indian drugmakers facing takeover threat, says Govt panel​*
Monday, May 4, 2009 

New Delhi (PTI) Warning of significant takeover threats for most Indian drugmakers by their large foreign peers, an inter-ministerial task force has suggested the Government act proactively to strengthen the pharma industry. 

"(The) Indian pharmaceutical industry being fragmented with small balance sheet sizes, takeover by global pharmaceutical companies would adversely affect the health interests of the nation," the task force has said in its recommendations to the Commerce Ministry. 

"India is exposed to the threat of takeovers from global big pharmaceutical companies under the new IPR regime," it noted. 

The task force was set up under the aegis of the Commerce Ministry for suggesting "Strategy for Increasing Exports of Pharmaceutical Products". 

According to industry experts, there are more than 10,000 drug manufacturers in the country and most of them are small-sector units operating in the generic segment. 

With a large number of drugs going off-patent in developed markets like the US and Europe, Indian companies are expected to garner a lion's share in the segment. 

According to the report, drugs worth 40 billion dollars in the US and 25 billion dollars in Europe are expected to go off-patent soon and this opens a vast opportunity for the domestic industry.


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## Screaming Skull

*Rupee trading at its highest levels​*
4 May 2009,

MUMBAI: The rupee rose to its highest levels in more than two weeks on Monday on back of gains in Asian currencies and strong upswing in the stock market. At 12 45 pm, the rupee traded at 49.67 against the dollar, stronger than Wednesday's close of 50.04. 
It climbed 1 percent from the previous close in the early hour deals on Monday to touch an intraday high of 49.55. This is the strongest level that the rupee has touched since April 16, before easing back in mid-morning trade. It had even fallen 50.61, the unit thus moved within a wide range of 100 paisa in the course of the day. 

Buoyed investor confidence pushed the yen and the dollar down against major global currencies as they were encouraged to buy of riskier emerging market assets on improved global outlook. 

"The rupee is mainly tracking the dollar's weakness against global major's," says a dealer at ICICI Bank. "Stocks are also bullish. The rupee had fallen earlier due to profit booking as traders sold once it moved beyond the 50 level," he added. 

Indian bonds fell to week lows on speculation that some investors sold securities ahead of a debt auction scheduled this week. Yields on notes due in 2019 climbed to the highest level in two weeks as the government prepares to offer Rs 12,000 crores of bonds this Friday. The yield on the 6.05 percent note due February 2019 rose seven basis points to 6.34 per cent at 12 45 pm.


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## Screaming Skull

*OVL to invest $1.45 bn in Iraq oil block​*
4 May 2009,

NEW DELHI: ONGC Videsh Ltd, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), is likely to invest $1.45 billion in an oil block in Iraq that was awarded to it by the erstwhile Saddam Hussein regime. 

"The service exploration and production contract for Block-8 have been concluded and the agreement is likely to be signed in the next couple of months," an official said. 

Block-8, located in the western desert in southern Iraq bordering Saudi Arabia, was awarded to OVL in November 2000 by the then Saddam Hussein government. However, the government formed after the US invasion of the oil-rich country, sought re-negotiation of the contract which has now been concluded. 

The block already has a discovery and is estimated to hold 645 million barrels of inplace reserves, of which 54 million are recoverable, he said adding OVL has committed investing USD 86 million in two phases of exploration and USD 1.45 billion in development of the reserves thereafter. 

The contract would be a service contract wherein OVL will be paid about 18 per cent rate of return on its investment. 

The official said OVL was also considering bidding for the six producing oilfields Iraq has put on offer in its first licensing auction. "It is talking to two international oil firms for a joint bidding." 

OVL wants 51 per cent and will give out 24 per cent to the partner. The remaining 25 per cent would be with Iraqi national oil company.


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## Screaming Skull

*RBI offers 600 bn rupees at special repo​*
4 May 2009,

MUMBAI: The Reserve Bank of India said it would conduct a special repo auction for 600 billion rupees on Monday. The reversal of the auction will be on May 18, it said in a statement. 

The special repo facility was introduced on Oct. 14, 2008 on a daily basis, offering 200 billion rupees to meet liquidity needs of mutual funds. 

The central bank later increased the facility to 600 billion rupees to include liquidity needs of non-banking financial companies and housing finance companies. At its policy review on April 21, the central bank said the auction will be conducted on a weekly basis every Monday till March 2010.


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## Screaming Skull

*Now, internet facilities for train passengers​*
May 04, 2009 09

Be it booking a ticket or keeping a tab on the stock market, select rail passengers will soon be able to work online while on the move as railway authorities are mulling a proposal to provide satellite-based internet facility on premier trains.

Besides checking the stock prices on real time basis, passengers of such trains can access bank accounts and also book air and rail tickets while travelling. A trial run was successfully carried out on the Mumbai-Ahmedabad Shatabdi Express and the report has been submitted to the railway ministry.

The report is being examined and the ministry is likely to appoint a committee to work out the modalities for introducing the internet on trains, a senior railway ministry official said.

Besides the Rajdhani and Shatabdi trains, saloon cars and accident relief trains are also to be equipped with the transmission technology for internet connectivity.

The proposal also envisages the provision of LCD screen on every seat of the first AC coach of the Shatabdi and the first and second AC coaches of the Rajdhani trains. The cost of this ambitious project has been estimated at about Rs 340 crore (Rs 3.4 billion) as it requires a VSAT terminal, Wi-fi set up and a dedicated VSAT hub among other equipment.

Termed as value addition to passenger amenities, railways are keen to establish a High Speed Internet Corridor along all routes to provide internet, IPTV and other entertainment and utility services in trains.

The plan envisages introduction of an onboard audio and video entertainment system for passengers during the journey. All these steps are being undertaken to provide better facilities to railway passengers, the official said.


----------



## Screaming Skull

*India Inc paying millions on lobbying in United States​*
Monday, May 04, 2009

WASHINGTON: On issues ranging from immigrant visas to bilateral trade and individual business ventures, Indian companies, including top corporate entity Reliance Industries Limited (RIL) and industry body Nasscom, are paying lawmakers and government departments thousands of dollars for lobbying.

As per the disclosure reports filed by lobbyist firms with the Senate and the House of Representatives, just four Indian entities  RIL, Nasscom, Sun Pharma and Orchid Chemicals  have together paid close to $2,75,000 (about Rs. 1.4 crore) during the first three months of 2009. Out of this, RIL has paid $1,90,000 to Barbour Griffith & Rogers (BGR) Holding, a high-profile lobbyist group that has many Fortune 500 firms and foreign governments as its clients, for providing strategic counsel on issues related to trade. 

Incidentally, the U.S. Congress and the House of Representatives are currently considering new legislation to penalise, including a ban from doing business in the U.S., companies that supply petroleum products to Iran. RIL is on the hit-list.

Besides, Nasscom (National Association of Software Companies) has paid $70,000 to the same lobbyist, in the first quarter of 2009 for lobbying on international technology and immigration issues. 

*Sharp reaction* 

Indian software industry has reacted sharply to the recent moves by the U.S. administration to put curbs on H1-B visas, a skilled foreign worker visa that have largely been given to Indian IT professionals in the past.

While the payment made by Sun Pharma in Q1 2009 is below $5,000, Orchid Chemicals has paid $10,000 for lobbying on issues related to the U.S. drug regulator FDAs policies. 

Sun Pharmas lobbying issues have been related to citizens petitions and FDA reforms. 

While there are no past disclosures about RILs lobbying attempts, Nasscom, Sun Pharma and Orchid are known to have been quite active on this front. Besides, there are also disclosures about lobbying by companies such as Larsen & Toubro and industry body CII in the past.

As per the disclosures, Nasscom made a total payment of $3,40,000 towards lobbying on issues such as technology and immigration during 2008, while the figures for the previous years are $2,80,000 each in 2007 and 2006, $1,00,000 in 2005, $1,80,000 in 2004 and $2,00,000 in the year 2003.

Orchid Chemicals has also been paying $10,000 every quarter since the second quarter of 2008, while Sun Pharma has paid about $75,000 since 2008.


----------



## Screaming Skull

*IPL biz worth $2 billion in two years​*
For all the controversies, twists and turns that have dogged the T20 cricket tournament since its inception last year, *as an enterprise, IPL is already worth more than $2 billion and counting, says UK based brand valuation consultancy Brand Finance. The IPL brand alone has a value of over $311.94 million*, according to a Brand Finance report available exclusively with ET.

With cricket-crazy Indians lapping up the slam-bang version of the gentlemans game, IPL has generated huge economic value for both its owner, the Board of Control for Cricket in India (BCCI), and the eight team franchisees.

And, it has set the stage for the franchisees to list their teams on the stock market. Following are the team valuations:

*Team Valuation* - *Mumbai Indians*

*Franchise Fees* - $111.9 million

*Brand Value 2009* - $41.6 million

*Brand Value percent of Franchise Fee*** - 37%


*Team Valuation* - *Royal Challengers*

*Franchise Fees* - $111.6 million

*Brand Value 2009* - $37.4 million

*Brand Value percent of Franchise Fee*** - 34%


*Team Valuation* - *Deccan Chargers*

*Franchise Fees* - $107 million

*Brand Value 2009* - $34.8 million

*Brand Value percent of Franchise Fee*** - 33%


*Team Valuation* - *Chennai Super Kings*

*Franchise Fees* - $91.9 million

*Brand Value 2009* - $39.4 million

*Brand Value percent of Franchise Fee*** - 43%


*Team Valuation* - *Delhi Daredevils*

*Franchise Fees* - $84 million

*Brand Value 2009* - $39.2 million

*Brand Value percent of Franchise Fee*** - 47%


*Team Valuation* - *Kings XI Punjab*

*Franchise Fees* - $76 million

*Brand Value 2009* - $36.3 million

*Brand Value percent of Franchise Fee*** - 48%


*Team Valuation* - *Kolkata Knight Riders*

*Franchise Fees* - $75.1 million

*Brand Value 2009* - $42.1 million

*Brand Value percent of Franchise Fee*** - 56%


*Team Valuation* - *Rajasthan Royals*

*Franchise Fees* - $67 million

*Brand Value 2009* - $39.5 million

*Brand Value percent of Franchise Fee*** - 59%



**The percent figures provide a view on how much value has already been created over just one year.

IPL biz worth $2 bn in two years - News in Pictures | Economic Times


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## Screaming Skull

*India to recover in second half of 2009-10: Goldman Sachs​*
Monday, May 4, 2009

New Delhi (IANS): The Indian economy will recover from the slowdown in the second half of 2009-10, thanks to the strong domestic market and improving financial sector, investment bank Goldman Sachs said on Monday.

We expect a recovery in activity in the second half of fiscal 2009-10, led by a pick-up in domestic demand amidst the loosening financial conditions, Tushar Poddar, an economist with Goldman Sachs, said on Monday.

The positive surprise coming from domestic activity data, excess liquidity in the system, a substantial easing of financial conditions, declines in some key interest rate spreads, and the removal of election uncertainty suggest that activity will pick up in the second half, he added.

According to him, the positive cues were reflected in the stock markets.

Markets seem to be driven by both domestic and global factors. The Sensex increased 21 per cent month over month, outperforming the S&P by 8 per cent, Mr. Poddar said.

Foreign institutional investment (FII) rose to $1.8 billion in April after falling $1.2 billion in March and the rupee appreciated 2.3 per cent against the dollar, he said.

According to Mr. Poddar, the key risk is the formation of an unstable coalition and the ratcheting up of long bond yields due to greater borrowing by the government to finance the post-election budget. 

The Hindu News Update Service


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## Screaming Skull

*Tata Motors rakes in Rs 2,500 cr ($500 million) from 203,000 Nano bookings in just 21 days!​*
4 May 2009,

NEW DELHI: Tata Motors on Monday said it has received over 2.03 lakh bookings for its Rs 1 lakh car Nano, garnering nearly Rs 2,500 crore ($500 mn). 

The bookings were double of allotted number of cars
for delivery. Fully paid bookings were nearly Rs 2,500 crore, the company said.

Out of the total bookings, 70 per cent were financed and the rest on application through cash payment. About 4,000 cash bookings were made online through Tata 'NANO' - The People's Car from Tata Motors, it said.

Out of the three variants of Nano, the base model Nano Standard accounted for 20 per cent, mid-range Nano Cx 30 per cent and the top end Nano Lx getting 50 percent of the booking.

The bookings for Nano started on April 9 and closed on April 29. 

At the time of launch of Nano on March 23, Tata Motors had said the booking amount would be Rs 95,000, Rs 1.2 lakh and Rs 1.4 lakh for the base model, mid-level and top-end variants respectively.

The company said the first 1,00,000 allottees from among the applicants will be chosen through a computerised random selection procedure, and the announcement will be made within 60 days of closure of booking.

Deliveries will start in July 2009, and are expected to be completed in the last quarter of 2010, while all efforts would be made to ramp up production and deliver earlier, it added.

Customers, who could not be allotted the vehicles but wishes to retain the booking with the company, would be paid interest at the rate of 8.5 per cent for the first year and 8.75 per cent for the second year.

The five-seater Tata Nano, powered by a 623 cc petrol engine, had received good response. Tata Motors claimed 6.10 lakh booking forms were sold and 14 lakh people thronged into Tata Motors' showrooms, Croma and Westside stores across the country to catch a glimpse of the car, while Nano's website recorded three crore hits during the period of bookings.

The company would use its Pantnagar facility, which has an annual capacity of 50,000 units, to roll-out the Nano until its Sanand unit in Gujarat with an annual capacity of 2.5 lakh units goes on stream.


----------



## Screaming Skull

*Nations may take a leaf out of Indian regulatory models for fin reforms: Accenture Report​*
5 May 2009,

CHICAGO: As nations across the world make reshaping the financial services industry a key priority in their efforts to put the global economy back on track, they are likely to take a leaf out of the regulatory models of countries like India, an Accenture report has said.

*"The regulatory models of Canada, India and Spain may become more widely adopted. Canada's banks largely escaped exposure to toxic assets, due to the higher liquidity reserves required by their charters. India and Spain which also require high levels of liquidity reserves, have also emerged strong,"* the global consulting firm said in a report.

*The Brazilian, Chinese and Indian banks are better capitalised than most banks in the developed nations of the US, the UK, Europe and Australia*, it said.

Looking ahead, Accenture said trends like "rethinking regulation" are likely to emerge as countries resort to recapitalise some institutions, organise mergers of stronger and weaker companies and step up regulatory oversight.

Referring to an increased role being played by emerging nations in the world economy, the report said advanced economies, like the Group of 7, recognise that involvement of developing countries in discussing the restructuring of the regulatory framework is vital to a successful effort in tackling the global meltdown.


----------



## Screaming Skull

*India's publishing BPO industry to cross USD 1.2 billion by 2012​*
Tue, May 5

Pune,May 5 (ANI): A recently released report by ValueNotes estimates that the Indian publishing BPO industry is expected to grow to a value of USD 1.2 billion by 2012.

This growth is expected to come from rise in the number of publishing companies that will outsource - which include traditional segments such as STM/Academic, Educational and Legal Publishing, as well as new segments such as magazines, corporate and B2B publishing.

India continues to remain the favored publishing BPO hub - with 35,550 people in direct employment, and revenues worth USD 660 million as of end-2008. While revenues are expected to cross USD 1.2 billion by 2012, the total employee strength is estimated to cross 55,000 by 2012.

Publishing outsourcing includes a wide range of services. The four broad heads include content, design, technology and 'other' services.

Content continues to drive the industry and contributes to 72 percent of the total industry revenues.

Over the last couple of years, services offshored have undergone a transition - from low value services such as tagging, editing existing designs, copy editing to high value services such as original designs, testing and assessment and e-learning tools.

There has been an influx of technology in the industry that has enhanced productivity, workflow management and most importantly reduced costs and turnaround time.

According to Arun Jethmalani, CEO, ValueNotes, "Most providers have access to similar technology, however the differentiator has really been the capabilities developed around workflow and innovation. Today's technology will become tomorrow's standard and constant innovation will differentiate the winners."

Aradhana Kolhatkar, lead analyst, Publishing Services, ValueNotes, said: "Indian players are shifting focus from the matured STM segment to the more lucrative segments in the publishing market. We believe that educational, magazines, corporate/B2B, trade and e-books will be attractive segments over the next 3-4 years. Indian service providers can extend their current capabilities to service these upcoming opportunities."

Based on exhaustive primary research and analysis of this sector, ValueNotes has identified and established that there are over 140 vendors in the publishing offshoring industry. Of these we have identified SPi, Aptara, Integra and Laserwords as frontrunners in the industry.

ValueNotes Database is a leading provider of business intelligence and research, with expertise across selected domains and types of customer needs. Working with clients across the globe, we have significant understanding of international markets.


----------



## Screaming Skull

*Sensex beats gold and silver with 46% returns​*
5 May 2009,

AHMEDABAD: Improvement in the global macroeconomic fundamentals, with a rising risk appetite, has seen infusion of money into stock markets in the last two months. As uncertainty over the global economic outlook subsides, with rising optimism of a speedy recovery, equity has outperformed all other options of investment.

During the last two months, the Sensex has appreciated over 45%, while investment in gold and silver has given negative return of around 7%.

As worries over the global economic outlook subside, equity markets across the world have rallied during this time, appreciating between 21-45 %. And leading the pack is Sensex, which has beaten indices in US, Europe and Asia with 45% gain since March 6, 2009.

Investors and punters, who made a beeline for gold as the safest bet during uncertainties earlier, have started liquidating their positions in the yellow metal and are switching funds towards equities across global markets.

Risk appetite of investors increases whenever uncertainty about global economic market subsides. Investors across the globe have started switching their funds from other asset class such gold to equities, said Amitabh Chakrabarty, head-equity, Religare Securities. 

Signs of continued improvement in the macro environment aided markets to surge past the 12,000-mark on Monday, its highest in the last seven months.

The rally has its legs on improved fundamentals as reflected by the improved offtake in some of the industries like auto, cement and steel. Further, attractive valuations also acted as a catalyst for liquidity to chase the emerging markets, which remain less vulnerable and expected to continue to log in growth higher than the their peers in the developed world, said Dinesh Thakkar, MD, Angel Broking.


----------



## Screaming Skull

*Rakesh Mohan quits as RBI deputy governor to join Stanford University​*
5 May 2009,

MUMBAI: In a surprise move, the deputy governor of the Reserve Bank of India and one of Indias senior-most economic policymakers, Rakesh Mohan, quit on Monday, a full year before his tenure comes to an end. Mr Mohan will take up a teaching assignment at Stanford University.

Although there was speculation about his departure ever since he lost out in the race for the top job at the RBI in September last year, it is the timing that has caught bankers and policymakers by surprise. Mr Mohan was once considered to be the frontrunner to succeed YV Reddy as the RBI governor, but the government eventually chose finance secretary D Subbarao.

Yet, Mr Mohan stayed on at a critical time when global financial markets were in turmoil and local credit markets were almost frozen. He helped Mr Subbarao fashion policy responses  something which the RBI governor acknowledged on Monday. Mr Subbarao said that over the past several months, as he traversed a steep learning curve, he had been increasingly depending on Mr Mohan for his advice and counsel.

When asked about the sudden decision, Mr Mohan told ET: Decisions are not taken hastily. I have received an offer from Stanford University. I will be guiding doctorate students and be associated with Stanfords Centre for International Development.

As a deputy governor, he handled monetary policy, financial markets, economic research and statistics. For a good part of his stint with the RBI, he had to grapple with a strengthening rupee and strong pile-up of foreign exchange reserves, a dilemma faced by many other central bankers across Asia. On the interest rate management front, Mr Mohan had to deal with the cycle turning both ways.

But, Mint Street watchers say that the then governor YV Reddy had a larger role in key policy decisions. Indeed, it was Mr Reddy who welcomed Mr Mohan back to the RBI after a short-lived stint as secretary of the department of economic affairs in the finance ministry.

Mr Mohan was appointed deputy governor in September 2002 and moved to North Block in October 2004 as secretary, department of economic affairs during P Chidambarams tenure as finance minister, only to return to the RBI after eight months.

Government officials reckon that he was quite uncomfortable during both his assignments in the finance ministry: first as an adviser to the finance minister during Yashwant Sinhas tenure as finance minister, and later, as secretary of economic affairs. On both the occasions, he quit office mid-way, which is seen as a blot on his copybook.

Some who worked with Mr Mohan in the government say that they were surprised to see the transformation  in someone who was seen as pushing for financial sector reforms during his finmin stint  after he moved to the RBI.

According to them, he changed tack to oppose reform moves, some of which originated during his time in the finance ministry. Indeed, there is a view among some senior officials that this may have gone against him when the government chose a successor to YV Reddy.


----------



## Screaming Skull

*Manufacturing to rebound in Q3 FY'10, low-end goods to lead​*
6 May 2009,

NEW DELHI: India will have to wait till the third quarter of this fiscal to witness the rebound in manufacturing, triggered by low-end consumer
durables growth in semi-urban areas, says research firm Deloitte.

"The upswing in manufacturing activity still has to be some months after the new Government is formed, that is by the third quarter of this fiscal, because a lot of policies and stimulus packages will have to find serious implementation," Deloitte India Senior Director Kumar Kandaswami told reporters.

It is demand from the semi-urban and rural economies, mostly for brown goods and low-end consumer durables, that will boost manufacturing activity in some sectors, he said.

Manufacturing production, which constitutes around 80 per cent in the Index Industrial Production, declined 1.4 per cent in February compared to 9.6 per cent growth a year ago.

In major categories, only capital goods posted positive growth, while all other segments like consumer goods, intermediate goods and basic goods production contracted.

Within consumer goods, durables registered a 5.7 per cent growth, while non-durables contracted by 5.5 per cent.

In terms of industries, as many as nine out of 17 have shown negative growth in their output in February year-on-year.

Some industries showed a substantial decline, like metal goods production plunging by 31.3 per cent, food products by 28.1 per cent, wood and wood products by 16.5 per cent. 

Manufacturing to rebound in Q3 FY'10, low-end goods to lead- Indicators-Economy-News-The Economic Times


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## Screaming Skull

*After Nano, Tatas offer flats for Rs 4 lakh ($8000)!​*
After Rs 1-lakh people's car Nano, the Tatas on Wednesday unveiled a low-cost realty project which offers a house for less than Rs 4 lakh.

Tata Housing, the real estate development arm of the Tatas, will build one-room-kitchen flats for just Rs 3.91 lakh in a township being developed at Boisar, 100 km from Mumbai.

The salt-to-software Tata conglomerate plans to develop the township within 24 months and allotment of flats would made through lottery, Brotin Banerjee, managing director, Tata Housing said.




*Tata Housing's Raisina Residency, Gurgaon​*
The company has plans to replicate the project, Subha Griha, in the National Capital Region (Delhi) and Bangalore in the current fiscal itself, he said. 

Tata Housing, Banerjee said, would also start such projects in Chennai and Kolkata and subsequently to other Tier-I and tier-II cities.

"We observed that since most of the people in the low-income bracket live away from their families to earn a livelihood in big cities, there is a large percentage of migrant population with people living in either rented or company provided accommodation," he said.



*Aquila Heights, Bangalore, Brotin Banerjee, MD, Tata Housing (inset)​*
"Our study shows that 48 per cent of the people in the lower segment are currently staying in rented accommodation.
As a real estate company, we are sensitive to the need of providing this segment with their own home along with community life," he said, however, adding that local people would also be eligible to own homes in these projects.



*Aquila Heights, Bangalore​*
Banerjee said in the Boisar project, a one BHK (bedroom, hall, kitchen) flat with a total saleable area of 465 sq ft would be available at Rs 6.7 lakh (Rs 670,000).

Out of the total 63.58 acres, there would be also space for "affordable housing" along with hospital, school and a community hall among others within the entire township project. 



*Aquila Heights, Bangalore​*
Affordable housing within the Shubh Griha project could cost anything between Rs 10-15 lakh (Rs 1-1.5 million), he said.

The project would offer a balanced mix of buildings and open spaces, best quality lighting and ventilations for all apartments.



*Xylem, Bangalore​*


----------



## Gabbar

Toyota to launch Lexus in India soon​
Toyota's Lexus  the dream for many luxury car aspirants in India  is finally coming to the country. Toyota Kirloskar Motor Co on Monday confirmed its plan, announced last year, to import fully-built Lexus cars. However, there is no word on when exactly they will be available to buyers.

A late starter, Toyota's Lexus will have to do some catching up with current luxury car market leader BMW and its closest rival Mercedes Benz. With a 22 per cent increase in luxury car sales reported for the domestic market for the financial year that ended in March, both the German manufacturers have announced expansion plans in India. 

Toyota Kirloskar managing director Hiroshi Nakagawa has also not specified which of the Lexus models will be imported. In India, the company is so far mostly known for its Qualis and Innova utility vehicles, which have both proved popular. However, many individually imported Lexus cars are on Indian roads.

Internationally, however, the company has a large range of products, from the HS 250h  which debuted at the 2009 Detroit Auto Show and will become the first Lexus dedicated hybrid luxury model  to the Lexus LX470 sport utility vehicle, which became the LX570 for the 2008 model year, and the luxury saloon Champaign Lexus LS 460.

Covering all bets
Toyota India is also set to launch a small car, which it plans to launch by late next year. The car would be powered with either 1.2-Litre or 1.3-Litre engine and be available in both petrol and diesel versions, with a further choice between sedan and hatchback.

The company had cut down its production to 3500 units per month last November; but encouraged by the recent upturn, it now intends to produce 3800 units in May 2009 and gradually increase this to 5000 units by July this year.

The company is also planning to double its dealership in India from the existing 82 dealers in next two years to push its small car, apart from a CNG variant of the Innova.


----------



## Gabbar

McNally Bharat to acquire German group's engineering, mineral technology businesses news​
McNally Bharat Engineering Company Ltd (MBE), one of India's leading engineering turnkey contracting companies working in various industry sectors, will acquire KHD Humboldt Wedag International GmbH's engineering workshop in Cologne, Germany, and its coal and mineral technology (CMT) business in Germany, India, South Africa, Russia and China, the company said in an announcement to the Bombay Stock Exchange today.

''With this acquisition we shall increase our presence considerably in coal and mineral processing space and have a global presence in this area of business,'' said Deepak Khaitan, chairman, MBE.

The terms and cost of acquisition will be announced later, Khaitan said.

MBE, a joint venture between the Williamson Magor Group and GP Birla Group, has a turnover of Rs1,100 crore.

KHD Humboldt is a world leader in supplying proprietary technologies, equipment and engineering/design services for cement, coal and minerals processing. 

KHD, through its subsidiaries, offers engineering services, machinery, plant and processes as well as process automation, installation and RR commissioning to its clients all over the world. The services include staff training as well as pre- and after-sales services.

India accounts for about 35 per cent of KHD's turnover of $700 million a year.

For the year ended 31 December 2008, KHD reported revenues of $638.4 million, with a net loss of $7 million or $0.23 per share (diluted). The loss was largely due to recognition of a non-cash fair value loss on the preferred shares of former subsidiaries of $55.1 million and a loss from contract terminations associated with the international financial crisis of $32 million. 

For the previous year ended 31 December 2007, KHD reported revenues of $580.4 million with a net income of $42.1 million or $1.39 per share on a diluted basis.

At the time of announcing the results last month, KHD's CEO Jim Busche said that as a result of the international financial crisis, the company's customers put off their capital expenditure plans which affected KHD's results, adding that the company plans to divest its coal and minerals group in Germany, India, China, South Africa and Australia, and close its manufacturing facility in Germany. 

McNally had targeted a turnover of Rs5,000 crore by 2015, but, with this acquisition, it would be achieved sooner, Khaitan said.

For the nine months ended 31 December 2008, MBE had net sales of Rs233.9 crore and net profit of 5.67 crore (unaudited). 

In 2008, MBE acquired Sayaji Iron and Engineering Co. McNally Sayaji has an existing facility in Gujarat and had decided on setting up another plant. 

MBE's other manufacturing facilities are located at Kumardhubi in Jharkhand, Asansol in West Bengal and Bangalore in Karnataka.

The MBE stock closed at Rs63.55 on the Bombay Stock Exchange, up 2.01 per cent, on Wednesday.


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## white_pawn

*Downside risks to India's industrial sector still evident: Moody's​*
MUMBAI: Manufacturers are experiencing a challenging time. Industrial output was down mildly in three of the latest five months for which data are 
available. This may imply that India's industrial sector is in better shape than those of its Asian peers, many of which have posted double-digit declines in recent months. 

However, the clear downward trend in India's output growth - which began early in 2007 - is still a worry. Production in India has been gradually losing steam, in contrast to the relatively sudden sharp plunges experienced by other Asian economies following the US subprime crisis and the subsequent global downturn. 

Next week, India will likely report yet another month of lackluster manufacturing performance, when the March industrial production numbers are released. However, the recent release of ABN Amro's PMI for India has sparked hopes that manufacturing is recovering, as the index for April returned to positive territory for the first time in six months. 

The positive figure may have prevented market sentiment from worsening for now, but strong optimism is certainly not warranted as downside risks to India's industrial sector are still evident, said Sherman Chan, economist at Moodys Economy.com. 

Chan added that external demand, which has slumped in recent months, will at best stabilise by year's end. A strong recovery in outbound shipments is not expected before 2010, meaning export-oriented manufacturers face sluggish business conditions for some time yet. Meanwhile, domestic support for the industrial sector is also far from solid, as funding for infrastructure projects has been limited. 

The government had planned to use public-private partnerships to fund infrastructure development. However, the turbulent global economic environment has created obstacles to this previously attractive model. Response from the private sector thus far has been reportedly muted. 

Although foreign firms may still relish the chance to tap India's lucrative market, action has likely been curbed by a general rise in risk aversion around the world. Moreover, the recession has cut into firms' capital, giving them less to invest. So long as the global downturn persists, India will face hurdles making much-needed improvement to its infrastructure, Chan concluded. 

Downside risks to India's industrial sector still evident: Moody's- Indicators-Economy-News-The Economic Times


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## white_pawn

*GDP to get 0.5% boost on back of poll spending​*
NEW DELHI: Here's a poll story that is bound to lift your spirits. Huge sums being spent by political parties and their candidates on campaigning 
and by the Election Commission on conducting the Lok Sabha elections is estimated to impart a spending stimulus of at least 0.5% of the country's GDP in the last quarter of 2008-09 fiscal and the first quarter of the present financial year. 

As parties and candidates jostle for voter mindspace, the large spendings on publicity, logistics and an assortment of related services reach grassroots levels to effectively support low-income households hurt by the downturn, an analysis by Kotak Institutional Equities Research chief economist Mridul Saggar and his colleague Amit Kumar says. 

Noting that except bills paid by the EC or state governments, not all spendings by the parties and candidates show up officially, the report says polltime splurging directly benefits small enterprises and entrepreneurs as well as cottage industries that are utilised by parties and candidates for various aspects of their campaigns. "Predictably, as a large part of election spending is in cash, it results in a surge in `currency' with the public," the report says. 

On February 18, TOI had first reported how election spendings will act as the third economic stimulus by pumping around Rs 6,000 crore or so into the system. The Kotak report sees the actual impact of elections on the GDP to be much higher at 2.2% than its empirical calculation of between 0.3% at the lower end and 0.7% at the higher. 

The report identifies transportation, services, food & beverages, materials & service providers and media & entertainment as the sectors that directly benefit from poll spending. It says the elections lead to a large demand for air service providers as leaders with their family and peripheral staff go rally-hopping across the country on choppers, private aircraft or service flights. 

Demand for surface transport too rises, along with fuel, as troops are moved around and candidates go campaigning in their constituencies. At the same time, party workers and supporters too have to be transported for party meetings and rallies from far-flung areas. 

GDP to get 0.5% boost on back of poll spending- Indicators-Economy-News-The Economic Times


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## white_pawn

*Sensex reclaims 12000; metals, banks lead​*
MUMBAI: Equities opened higher Thursday after last hour selling pressure in the previous session. Buoyant cues from global shores aided the positive sentiment. All sectoral indices posted decent gains. 

Bombay Stock Exchanges Sensex was up 111 points at 12064. National Stock Exchanges Nifty was trading at 3660, higher by 35.55 points. 

US stocks rose on Wednesday after a private sector reading on the labor market signaled unemployment may be receding and leaked bank stress test results suggested most banks are healthier than expected. 

The Dow Jones Industrial Average gained 101.63 points, or 1.21 per cent, to 8,512.28, the Standard & Poor's 500 Index gained 15.73 points, or 1.74 per cent, to 919.53 and the Nasdaq Composite Index gained 4.98 points, or 0.28 per cent, to 1,759.10. 

Asian markets are trading on a firm note ahead of the stress test results. The Nikkei 225 Stock Average climbed 4.5 percent to 9,379.02 after three-day holiday. Australias S&P/ASX 200 Index added 2.2 percent as a statistics bureau report said employers unexpectedly added workers in April, buoying investor optimism. Hong Kongs climbed 1.59 per cent, Singapores Straits Times advanced 1.57 per cent and South Koreas Kospi inched 0.8 per cent higher. 

Sensex reclaims 12000; metals, banks lead- Market News-Stocks-Markets-The Economic Times


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## kallu_be

Tata cracked big time- at 9th. Ahead of Matushita, FedEx, Honda, Walt disney, Google, Microsoft, Philips, Nokia, Pepsi, Sony etc. Also, our SBI is ahead than Microsoft and all after that. Indian companies in the list-

Tata- 9th
SBI- 29th
Infosys- 39
Larsen and Toubro- 47th
Maruti Udyog- 49th
Hindustan Unilever- 69th
ITC Limited- 95th
Canara Bank- 102nd
Hindustan Petroleum- 111th
Indian Oil- 112th
Wipro- 116th
Reliance Group- 132nd
Mahindra & Mahindra- 137th
Bharti Airtel .- 163rd
Bank of Baroda- 174th
Bharat Petroleum- 175th
Punjab National Bank- 177th

Whole list here-
World's Most Reputable Companies: The Rankings - Forbes.com

PS: Content sourced from other private forum.

Reactions: Like Like:

1


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## Screaming Skull

kallu_be said:


> Tata cracked big time- at 9th. Ahead of Matushita, FedEx, Honda, Walt disney, Google, Microsoft, Philips, Nokia, Pepsi, Sony etc. Also, our SBI is ahead than Microsoft and all after that. Indian companies in the list-
> 
> Tata- 9th
> SBI- 29th
> Infosys- 39
> Larsen and Toubro- 47th
> Maruti Udyog- 49th
> Hindustan Unilever- 69th
> ITC Limited- 95th
> Canara Bank- 102nd
> Hindustan Petroleum- 111th
> Indian Oil- 112th
> Wipro- 116th
> Reliance Group- 132nd
> Mahindra & Mahindra- 137th
> Bharti Airtel .- 163rd
> Bank of Baroda- 174th
> Bharat Petroleum- 175th
> Punjab National Bank- 177th
> 
> Whole list here-
> World's Most Reputable Companies: The Rankings - Forbes.com
> 
> PS: Content sourced from other private forum.



It s really heartening to see so many Indian companies on that list!


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## Screaming Skull

*Exports from Special Economic Zones (SEZs) set to reach Rs 1.25 lakh cr ($ 25 billion)​*
Friday, May 8, 2009

NEW DELHI: Exports from the Special Economic Zones are expected to reach the target of Rs 1,25,000 cr in the current fiscal, with Reliance Industries' Jamnagar refinery alone likely to contribute Rs 35,000 cr to the total shipments. While leading SEZs like Mahindra World, Nokia, Apache, Hyderabad Gems and Jewellery became operational in 2008-09, exports from these zones fell short of target of Rs 1,20,000 cr in the last fiscal.

Gems and jewellery, textiles, engineering and telecommunications SEZs, were the major contributors to the exports,'' said Mr L B Singhal, Councils Director-General. Mr Singhal was confident about meeting the target for the current fiscal with the commi ssioning of the big ticket SEZ Jamnagar refinery by the Reliance Industries in December last. We are hopeful of achieving the target as the exports from the Reliance Industries Jamnagar SEZ are likely to be worth Rs 35,000 crore,'' he added.


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## Screaming Skull

*India can comfortably grow 7-8 pc: Former RBI head​*
8 May 2009,

MUMBAI: India should emerge from its downturn ahead of developed economies, with recovery depending on an export revival as falling external demand was the main reason for slowing growth, the former head of the Reserve Bank of India (RBI) said.

Yaga Venugopal Reddy, who stepped down as governor of the Reserve Bank of India last September after a five-year term, said India could comfortably achieve a growth rate of 7-8 per cent, but growth faster than 9 per cent could stretch its infrastructure.

"Infrastructure as a simple bottleneck does impose some limits to the extent to which you can boost growth entirely through fiscal stimulus without any effect on the inflation side," he told Reuters in an interview.

Growth in India, Asia's third-biggest economy, is expected to hit a seven-year low of 6 per cent or less in the 2009/10 fiscal year that began on April 1, after growing at or above 9 per cent in the three years to 2007/08. Growth in 2008/09 is expected to have slowed to 7 per cent or less.

"The cause of the slowing down essentially is the export demand," Reddy said, adding even India's diversified export basket was of little help in a global downturn.

Reddy spoke ahead of the release of his book, "India and the Global Financial Crisis", a collection of 23 of his speeches as governor.

Merchandise exports, which account for about 15 per cent of gross domestic product, fell by a third in March from a year earlier, the sixth straight monthly fall. Exports account for a smaller proportion of India's economy than in many Asian countries.

The RBI has cut interest rates aggressively since last October to shore up growth, most recently at a review in April, and the goverment has also announced some stimulus measures but has been hampered by a large fiscal deficit.

The combined deficit of the federal and state governments has shot up to double digits as a per centage of gross domestic product on the stimulus spending and also a generous farm loan waiver scheme and pay hikes for federal workers announced when growth was stronger.

"The persisting high fiscal deficit reduces the scope for further reforms in the financial sector and also make it difficult for India to go on a higher growth path," Reddy said.

"Because in the final analysis, it has an effect on crowding out".


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## Screaming Skull

*Indian pharma cos upbeat on biogenerics​*
Bangalore May 8, 2009,

Even as the substitutability of biogeneric or biosimilar medicines with their original patented counterparts continues to be a matter of debate world over, Indian drug companies, which have introduced biogeneric products or copies of biotechnology drugs in the country, are bullish over the marketing prospects of biogenerics" after patents expire in developed markets. Companies such as Dr Reddys, Biocon, Reliance Life Sciences and Ranbaxy etc. are all in the process of strengthening their biogeneric portfolio to cater to future global demand.

The biogeneric market in India is pegged at Rs 600 crore, while the US and EU market for biosimilars is estimated to reach $ 21 billion by 2015, said KV Subramaniam, president and CEO, Reliance Life Sciences (RLS). RLS launched three biosimilars - ReliPoietin (Erythropoietin (EPO), ReliGrast (Granulocyte Colony Stimulating Factor (G-CSF), and ReliFeron (Interferon Alpha 2b) in the domestic market in 2008 and is working on a range of biosimilars, which are at different stages of development viz clinical trials, pre-clinical studies, process development and molecular biology.

We are concurrently conducting clinical trials for two biosimilars  Erythropoietin and GCSF  in Europe. RLS envisages its subsidiary Reliance GeneMedix Plc as a platform for participating in the European biosimilars market to begin with and eventually for introducing a wide range of biopharmaceuticals. Further, RLS has built significant manufacturing capacity for biopharmaceuticals and all these facilities are compliant with USFDA and EMEA standards, Subramaniam said.

Kiran Mazumdar Shaw, CEO, Biocon shares the enthusiiasm. Of the $70 billion global biopharmaceutical segment, $ 40 billion will genericise over the next 5 years, she said. EPO, Insulins and Monoclonal Antibodies are the key drivers of this biogeneric opportunity. Indian biopharmaceutical companies like Biocon, Dr Reddys, Intas and Wockhardt are positioning themselves for this emerging opportunity. Products like Insulin, EPO and GCSF are already there in Latin American, Asian and West Asian markets. All these products are also now being developed for registration in the US and European markets, Shaw added.

While Dr Reddys has announced generic biopharmaceuticals as an integral part of its mid-to-long term growth strategy, Ranbaxy has laid out its sourcing strategies with smaller biotech firms like Zenotech and Virchow Biotech to ensure supply of biopharmaceuticals.

We have made significant efforts have over the years succeeded in creating world class infrastructure and a highly capable team. Dr Reddys has developed and markets two biogenerics , Grafeel (filgrastim) and Reditux (rituximab). Both are sold in markets outside India also. We have a portfolio of nine products in our pipeline with two products at clinical development stage, an official with Dr Reddys said.

Experts say that Indian companies may not repeat the success they achieved in selling generic medicines in biogenerics. The cost of clinical trials and the absence of substitutability will ensure that only those with deep pockets to launch such products globally will succeed, they feel.

Two biologicals cannot be compared for efficacy and safety the way two chemical medicines are compared today. Regulators will think twice before allowing a biotech product to be substituted by a low-cost biogeneric. To prove these medicines are safe and effective as medicines, the companies will have to conduct extensive clinical trials, said Shrikumar Suryanarayan, director general, Association of Biotechnology Led Entrepreneurs.

Suryanarayan added that rules governing the marketing of biogenerics in the worlds largest drug market  United States were yet to be framed. Europe and the US are all in the process of finalising their views on biogenerics. The market was there, but it may not be accessible for all Indian biotech firms, he said.

Commenting on Dr Reddys plans for follow-on biologics, Goldman Sachs Global Investment Research, India Healthcare report, on March 19 ha dcautioned that though Dr Reddys maintained follow-on biologics as future growth driver and a key opportunity, it still has a gestation period of around two years before beginning to contribute meaningfully.

Abbreviated pathways will require an R&D investment of atleast $50 million per biogeneric. Most companies will try and generate atleast part of the clinical data in countries like India to defray costs, said Shaw.


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## Screaming Skull

*This news is especially for all the MAN U fans out there. (Btw I hope MAN U thrashes Barca in the Champions league finals!)*



*Bharti Airtel signs sponsorship deal with Manchester United; Might replace AIG as the shirt sponsor! ​*
8 May 2009,

MANCHESTER: Manchester United has signed a five-year sponsorship deal with Bharti Airtel in a further sign of the European champion's global commercial expansion.

The deal with telecom services provider Airtel was announced Friday at Old Trafford by chief executive David Gill.

Airtel customers across India and Sri Lanka will now have access to United content, including matches and interviews.

The Premier League champions are looking for a new shirt sponsor from the 2010-11 season to replace insurance company AIG.


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## white_pawn

*'Export revival will lead to recovery'​*
MUMBAI: It has been about seven months that Yaga Venugopal Raddy, popularly YV Reddy, retired as the governor of RBI. But Reddy, credited globally 
to have fenced the Indian economy from the financial meltdown despite severe criticism for his policy decisions, is very much into influencing the macro-economic policies and keeping a close tab of the Indian economy. 

Reddy feels that India should emerge from the current downturn ahead of developed economies and its recovery would depend on an export revival as falling external demand was the main reason for the economic slowdown. Reddy was speaking to the media at the launch of his book, India and the Global Financial Crisis: Managing Money and Finance'. 

D Subbrao, the man who succeeded Reddy at the central bank, paid rich tributes to the former RBI governor while releasing Reddy's book. Subbarao spelt out several reasons for one to read Reddy's book, among them the writer's clarity of thought and his ability to explain complex macroeconomic issues in a lucid manner. The book, published by Orient BlackSwan, is a collection of 23 of Reddy's articles and speeches during his stint at the RBI. 

It was a union of sorts for some of the top officials of RBI. Other than Subbarao, the book-release function was also attended by Ashok Ganguly, a member of RBI's board and SS Tarapore, a former deputy governor at the central bank whom Reddy had replaced in 1996, during the latter first stint at Mint Road. 

Earlier, speaking to reporters, Reddy said India could achieve a growth rate of 7-8%, but growth faster than 9% could stretch its infrastructure. "Infrastructure as a simple bottleneck does impose some limits to the extent to which you can boost growth entirely through fiscal stimulus without any effect on the inflation side," he said.


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## white_pawn

*Tatas, SBI, Infosys among world's top 50 reputed firms​*
WASHINGTON: The Tata Group, State Bank of India (SBI) and Infosys Technologies are among 17 Indian firms that figure among the top 50 in a list of 
the world's 200 most reputable companies. 

With a pulse score of 80.89 on a scale of 0-100, the US-based Reputation Institute ranked the Tata Group 11th above global giants like Google, Microsoft, General electric, Toyota, Coca-Cola, Intel and Unilever. 

Italy-based chocolate producer Ferrero was ranked as the most reputable company on the planet right now. With its pulse score moving from 83.52 last year up to 85.17, Ferrero came up from fourth place last year to first, more than a full point ahead of second ranked IKEA. 

"However it is the people of India who love their companies the best," noted US business magazine Forbes. "Of India's 27 corporations ranked by the institute, 24 (89 percent) placed above the average. Seventeen of them landed in the top third of the list." 

The Reputation Institute's global pulse of 600 companies is a measure of corporate reputation calculated by averaging perceptions of four indicators - trust, esteem, admiration and good feeling - obtained from a representative sample of at least 100 respondents in the companies' home countries. 

SBI, India's largest bank, is ranked 29th with a score of 78.11. India's second largest software exporter Infosys is at 39th, with a pulse score of 77.45. 

Larsen & Toubro comes next at 47th position with a pulse score of 76.58, while India's largest carmaker Maruti Suzki has been ranked 49th with a pulse score of of 76.26. 

Other Indian firms in the top 200 are: Hindustan Unilever (69 - 74.99); ITC Ltd (95 - 73.50); Canara Bank (102- 73.34); Hindustan Petroleum (111 - 73.08); Indian Oil (112 - 73.01); Wipro (116 - 72.77); Mahindra & Mahindra (137 - 71.61); Bharti Airtel (163 - 70.32); Bank of Baroda(174 -- 69.81); Bharat Petroleum(175 - 69.79) and Punjab National Bank (177- 69.67.) 

Johnson & Johnson, which placed first in the US for reputation, lands third globally. Kraft Foods places eighth, making the US one of only two countries with two businesses in the global top 10. Brazil is the other. Its Petrobras and Sadia landed fourth and fifth respectively. 

Brazil had the second highest percentage of its participating companies ranked above the global average at 76 percent, while 62 percent of American companies received pulse scores above the average. 

Tatas, SBI, Infosys among world's top 50 reputed firms - India Business - Business - The Times of India


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## white_pawn

*Car sales up 4.20%, bikes jump 12.11% in April​*
NEW DELHI: Domestic passenger-car sales increased by 4.20 per cent in April to 1,02,899 units from 98,752 units in the same month last year. 


According to figures released by the Society of Indian Automobile Manufacturers (SIAM), motorcycle sales in the country during the month was up 12.11 per cent at 5,62,357 units as against 5,01,592 units in the corresponding month a year ago. 

Total two-wheeler sales in April also surged by 13.71 per cent to 7,00,995 units compared to 6,16,468 units in the same period last year. 

Commercial vehicle sales, however, decreased last month to 29,842 units from 33,626 units in the year-ago period, a fall of 11.25 per cent, SIAM said. 

Car sales up 4.20%, bikes jump 12.11% in April- LATEST NEWS-The Economic Times


----------



## white_pawn

*Obama's tax will not impact BPOs: E&Y​*
Domestic business process outsourcing (BPO) units providing services to the American companies will not be affected by the proposed decision of US President Barack Obama to discourage outsourcing by imposing taxes, said global consultancy firm Ernst & young.

The companies which outsource business to third parties will not be impacted (by the proposed tax move)," said Ernst & Young Tax Director Rajendra Nayak. However, he added, the US companies which outsource services from their own arms including wholly-owned subsidiaries might face the heat of Obama's tax proposal, which is yet to be approved by the US Congress. 

According to the E&Y expert, the captive outsourcing units of Americans will be impacted by the proposal as it would be required to adhere to the regulations of the home country. On the other hand, the domestic Business Process Outsourcing units provide services to companies from different countries, including America, will primarily be governed by Indian laws and may escape the impact of changes in the US tax laws, Nayak said. 

The step, he said, is directed at encouraging the US companies to do business in the US. However, the success of this objective would depend on comparative advantage that locations like India provide over the loss of revenue because of taxes back home in the US, sources in the Central Board of Direct Taxes (CBDT) said. The US companies would stop giving business to their subsidiaries in India only after evaluating if the benefit they have in India based on lower production costs in the country is higher than the tax to be borne in the US itself, they said.

Obama's tax will not impact BPOs: E&Y- ITeS-Infotech-The Economic Times


----------



## sob

*IT firms looking for more domestic share*



> In March, when Employees State Insurance Corporation, a government of India agency that provides health insurance to 10 million workers, awarded a Rs1,182 crore information-technology (IT) project to Wipro Ltd, it dropped the curtain on a bitterly fought battle.
> Wipro, the countrys third largest information technology services exporter, won the order through a global tender that pitted it against both multinational firms and domestic peers such as Tata Consultancy Services Ltd, or TCS, and Infosys Technologies Ltd. The intensity of competition was an indication of the growing importance of the Indian IT market for both domestic and overseas firms.
> With recession in the US, Europe and Japan forcing overseas clients to pare technology budgets, Indian IT companies are scrambling to raise their share of the Indian software and IT services market, which industry body Nasscom values at around Rs57,200 crore.
> Mumbai-based TCS and Bangalore-based Infosys, Indias largest and second largest IT service exporters, respectively, have set themselves the target of earning $1 billion, or around Rs5,000 crore, in revenue from the domestic market in the next three to four years. Wipro wants to raise its India focus, as does mid-sized firm MindTree Ltd.
> With sectors such as government, energy and utilities, telecom, banking and finance stepping up their IT spending, the domestic market has become attractive for firms that have until now focused beyond Indian borders. Customers in the US and Europe have traditionally made up as much as 80% of revenue earned by Indian exporters of software and related services.
> According to a late 2008 report by research firm Gartner Inc., the Indian IT software and services segment, excluding business process outsourcing, is expected to grow at an annual pace of almost 20% to touch $13.2 billion by 2012.
> TCS earns around $500 million (Rs2,500 crore), or nearly 8% of its total revenue, from Indian clients.
> We have a base of key clients and solutions portfolio. We have made investments and have people, business and clients. We will accelerate all of this, a TCS spokesperson said in an emailed response.
> However, the worry at TCS is that India, like other emerging markets, is volatile and most business is project-based and not annuity basedhence there is a certain element of uncertainty, the spokesperson said.
> The volatility shows up in the India revenue fluctuations at TCS. While in the first quarter of the 2009 fiscal the company earned 8.7% of its revenue from India, the portion dipped to 6.8% by the third quarter, only to rise to 8.2% in the last quarter again.
> Infosys earns less than 2% of its revenue (or less than Rs400 crore) from the domestic market.
> The market is very large, and has matured over a period of time, said Binod H.R., head of the India business unit of Infosys, an initiative started just over a year ago to penetrate the domestic market more aggressively. He said a big challenge is that Indian customers are very price-sensitive.
> For companies such as Infosys that have been used to higher billing rates in the US and European markets, Indian projects raise the challenge of being able to offer competitive pricing to customers while still being able to maintain comfortable margins.
> We are working on reusable tools and replicable models to address the challenge of lower pricing that the Indian market poses, said Binod.
> Still, margins are getting increasingly closer to international levels, according to Anand Sankaran, chief executive officer of Wipro Infotech, the unit that oversees the domestic and West Asia IT business at Wipro.
> Unlike some of our Indian peers, who are now discovering the potential of the domestic IT market, Wipro has always had a significant presence here. While it is true that it is a value for money market, the margins here are comfortable and getting closer to international margins, he said.
> Wipro is one of the largest system integratorsIT companies that bring together component subsystems into a wholein India and, according to Springboard Research, has the second largest share of the domestic market after IBM Corp.
> Bangalore-based MindTree hired a Wipro veteran four months ago to spearhead its domestic market growth. P.K. Gopalkrishnan, senior vice-president and India business headIT services, said MindTree earns up to 5% of its revenue from India and aims to double it by 2014.
> Increasing the domestic market share would, however, not be easy.
> It entails competing with global technology firms such as IBM which, according to a late 2008 report by research firm IDC, commands a 10% share of the Indian market. IBM is the market leader and earns revenue of around Rs5,700 crore from the Indian market.
> Its only because of sheer neglect that the Indian companies lagged behind in the domestic market space, says Arup Roy, a senior research analyst at Gartner. Indian companies also used to take the domestic market deals very lightly and put freshers or inexperienced engineers on the projects.
> Industry observers say that estimations of the domestic market may not capture the real potential because a lot of demand is still latent. Service providers have to first help clients identify problem areas and then design solutions.
> There is no dearth of opportunities in the Indian market, but it takes a patient services provider who can work with the client to literally convert the latent demand into real demand, said Nasscom vice-president Rajdeep Sahrawat.



It is due to our domestic market that India is still insulated to a large extent from the Global Economic crisis.


----------



## Screaming Skull

*India, South Africa to bolster economic ties​*
Monday, May 11, 2009

JOHANNESBURG: Despite the shadow cast by the world global financial crises that has hit South Africa hard, India is continuing to expand its economic ties, said senior Foreign Ministry officials accompanying Vice-President Hamid Ansari for the presidential inauguration ceremony of Jacob Zuma.

The most significant relationship we have with South Africa. Through South Africa we will be reaching out to the rest of Africa. Indian companies are also using South Africa as the base to extend operations in the continent, said Secretary (West) in the Ministry of External Affairs Nalin Surie.

Mr. Ansari utilised the visit to consolidate ties with other African countries. He met Presidents of Seychelles, Congo, Gambia, Comoros and Tanzania besides the legendry African leader and former President of Zambia, Kenneth Kaunda.

Apart from the historical context that includes the Mahatma Gandhi factor and the presence of large number of people of Indian origin, the relationship is fuelled by the very active business being conducted by all of us. There is also sustained cultural interaction, said High Commissioner Rajiv Bhatia. Two-way investments are estimated at $2.5 to 3 billion covering a large number of sectors. Approximately 40 Indian companies are here including big names such as the Tatas, Mahindra & Mahindra and Ranbaxy.

Two-way trade in 2007-08 was at $6.2 billions and in the first six months of the current financial grew by 11 per cent. But the global meltdown is having its impact here. Indian exports during this period fell by 14 per cent due to contraction of the South African economy. As against growth of four per cent in the last fiscal, it is expected to contract by 0.5 per cent.

Mr. Bhatia said technical and economic cooperation formed a crucial fulcrum of South Africas interaction with India. With a mix of first and third world economies, South Africa has made considerable progress in the financial sector and mining but needs help in human resources development. The Indian government has increased the number of slots for South Africa to 110 and this is being supplemented at the corporate level with India Inc. helping South African companies to train people.

The two countries have broken new ground in the minerals and energy sectors with the formation of two working groups on hydrocarbons and coal sectors.

Mr. Bhatia denied there was any fear psychosis prevailing among the Indian diplomats and companies. It is open knowledge that in some parts of South Africa security is a problem. The government recognises it and is committed to tackling the issue. The flow of tourists from India is going up and Indian companies are steadily getting more involved, he said. From the South African side, Sam Miller has invested $1billion and Sason, a coal technology major, promises to become one of the biggest investors. Another company, ACSA, is involved in the modernisation of the Mumbai airport.

Asked about the blanking out of South African defence company Denel, Mr. Surie said defence procurement was open and transparent and there was no longer any preferred relationship.

All companies have to participate in the tendering process. This is what we have been telling some Central European countries. There is no favouritism.


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## Screaming Skull

*India's media, entertainment revenue to double in 3 years to cross $20 billion​*
New Delhi May 11, 2009,

The turnover of India's media and entertainment is expected to double to Rs 1 lakh crore ($20 bil) by 2011-12 because of a rise in consumerism and technological improvement, a study today said.

"The sector is expected to cross a turnover of Rs 1 lakh crore by 2011-12 (currently estimated at Rs 50,000 crore)," a study titled "Indias Digital RevolutionImpact on Film & Television Sector", released by Assocham, said.

It said that the turnover of the television industry is likely to grow by over Rs 52,000 crore in the next three years from the current estimated Rs 20,000 crore. "This will include both subscription and advertising revenue," the chamber said.

Currently, advertisements generate about 80 per cent of the revenue and subscriptions the rest.

"Subscription revenue is projected to be the key growth driver for the television industry as the number of homes subscribing to cable TV and DTH services will increase from over 72 million to over 100 million by 2011-12," it said.


----------



## white_pawn

*Japan's Daiichi says deep in red due to Ranbaxy deal​*
TOKYO: Japanese drugmaker Daiichi Sankyo said Tuesday it lost 335.8 billion yen (3.45 billion dollars) in the year to March because of a plunge in 
the value of its investment in India's Ranbaxy Laboratories. 

It booked a loss of 351.3 billion yen on the Ranbaxy shares, which have fallen more than two-thirds since June when Daiichi announced it would buy 64% of India's top generic drugmaker for up to 4.6 billion dollars. 

The previous year Daiichi, Japan's third largest drugmaker, had logged a net profit of 97.66 billion yen. 

Ranbaxy shares have slumped due to weak global markets, financial losses reported by the Indian company and regulatory setbacks in the United States, the world's biggest drug market. 

Ranbaxy, which derives 80% of its sales from abroad, has grown by selling cheap copies of branded drugs that have gone off-patent and through successful challenges to patents owned by Western companies. 

But the US Food and Drug Administration (FDA) last September banned imports of more than 30 generic drugs produced by Ranbaxy because of problems in their production at two plants in India. 

"If the resolution of this issue were to become protracted or the FDA imposed additional restrictions on Ranbaxy, this could have a severe impact on Ranbaxy's business prospects in the US market," Daiichi warned in a statement. 

The Japanese company expects to return to the black in the current business year to March with a net profit of 40 billion yen. 

But it said the global market environment would remain harsh due to the economic downturn and government restrictions on medical spending. 

Japan's Daiichi says deep in red due to Ranbaxy deal - India Business - Business - The Times of India


----------



## white_pawn

*Forex inflow cheers up tourism sector​*
NEW DELHI: Tourism in India may well be out of the woods if latest data is anything to go by. While the number of foreign tourist arrivals is still 
less than April last year, significantly, foreign exchange earnings have gone up. 

The number of foreign tourists who arrived in India -- excluding NRIs -- in April 2009 is 3.71 lakh as opposed to 3.84 lakh in April 2008, closing the gap substantially to 3.5%. Foreign exchange earnings, on the other hand, increased as compared to last year. FEEs were Rs 4,061 crore for April 2009, up from last year's Rs 3,773 crore. 

"The data is certainly encouraging. After a spell of negative growth, the fact that only 13,000 fewer visitors came to India in April this year as compared to last year could mean that tourist arrivals could show positive growth by October," Leena Nandan, tourism joint secretary said. 

The last quarter of 2008 spelt bad news for leisure travel and India suffered the combined impact of economic recession and Mumbai terror attacks. Growth rate dropped to 18% in January and the first three months of 2009 have been difficult for the industry. 

The tourism ministry, along with the industry, has incentivised travel under the Visit India 2009 programme promoting discounts on travel, stay and sightseeing. 

While growth of foreign tourist arrivals to India dropped from a high of 14% in 2007 to 5.6% in 2008, world tourism growth has come down from 6.6% in 2007 to 1.8 in 2008. According to UNWTO, world growth in 2009 is expected to be stagnant. 

Industry experts say that leisure travel may be picking up slowly and India could well be on its way to recovery by year-end. India has benefited from the fact that it has so far remained unscathed by the Influenza A (H1N1) virus that has gripped Mexico and parts of Europe, US and south Asia. 

Forex inflow cheers up tourism sector - India Business - Business - The Times of India


----------



## Neo

*India output shrinks by most in 16 years ​* 
Wednesday, May 13, 2009

NEW DELHI: Indias industrial output shrank by the most in 16 years in March, data showed on Tuesday, underscoring the economic challenges facing the winners of general elections ending this week.

Industrial production in Asias third-largest economy fell by a sharper-than-expected 2.3 per cent compared with a 5.5 per cent rise during the same month in 2008, according to government figures.

It was the worst drop in at least 16 years, said Nikhilesh Bhattacharyya, economist at Moodys Economy.com. Bhattacharyya blamed the poor performance on the manufacturing sector which has been bleeding jobs in recent months, with tight credit conditions and collapsing demand at home and abroad.

Analysts were widely expecting a 0.6 per cent year-on-year decline but the fall was nearly four times their estimates.

Indian industrial production remains in the doldrums, said HSBC economist Robert Prior-Wandesforde. Industrial output expanded by 2.4 per cent in the last fiscal year which ended in March, down from 8.5 per cent a year earlier.

The decline underlined the economic problems facing the new government which emerges from the elections, the results of which will be known next Saturday.

Whatever the party make-up of the new administration, the problems it will face are already clear and acute.

A raft of data has shown the economy cooling with Prime Minister Manmohan Singh forecasting growth for the fiscal year just ended in March of 6.5 per cent, the slowest in six years, after expansion of nine per cent the previous year.

The central bank expects the economy to lose more traction next year, slowing to around 5.5 per cent. Even that would be strong by world standards but its far below levels needed to raise the living standards of Indias impoverished millions.

Both investment and consumption need a big push if the (current) growth trajectory is to be altered, said Harsh Pati Singhania, president of the Federation of Indian Chambers of Commerce and Industry. The economy is yet to get out of the slowdown mode, he said.

But the new governments room to fix problems will be sharply curbed by previous lavish spending on a national jobs scheme, farm loan waivers, civil service wage hikes, tax cuts to spur growth and other steps.

Indias fiscal deficit for the last financial year was six per cent of GDP, more than double the target, and 11 per cent if the states deficits are included, making it among the worlds highest.

Still many analysts say the economy should start picking up in the second half of the financial year and a more solid recovery will take hold in 2010-11 thanks to aggressive interest rate cuts and government stimulus moves during recent months.

While April-June should see a bottoming out in industrial production, the economic recovery is unlikely to begin in earnest until the July-September quarter, said HSBCs Prior-Wandesforde.


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## white_pawn

*Poll effect: Air traffic picks up in April​*
NEW DELHI: Domestic air traffic marginally picked up in April, thanks to the increased travel during the poll season. April saw 33.6 lakh flyers, 
shed better than March's 32.21 lakh, though it was 11% down from last April's figure of 37.78 lakh, when air travel was booming. 

In changing market dynamics, budget carriers are emerging as market leaders in terms of passenger load factor. Low-cost carriers like IndiGo, SpiceJet and JetLite managed to fill about 70% of their seats, while full service ones ranged from 59.9% for AI (domestic) to Jet's 65%. Vijay Mallya's Kingfisher continued to remain the leader in terms of market share at 26% and the Jet-JetLite was second at 24.1%. 

Not having a domestic low cost carrier in its fold is costing Air India dear as its share was down to 17.6%. "As of now there's no plan to have a separate domestic LCC. Once all the Boeing 737s join the fleet by early next year, we may increase the number of domestic sectors covered by Air India Express as part of their international flights," said a senior official.


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## white_pawn

*TCS bags 5-yr Volkswagen deal​[/MUMBAI: Tata Consultancy Services has been awarded a five-year outsourcing contract by the Volkswagen group, UK, for IT transformation and support 
system across the company's commercial vehicles and passenger car brands. The auto major, an arm of Volkswagen AG, markets brands like Audi, Skoda, Seat and Volkswagen. 

TCS did not share any financial details of the deal. However, the contract comes at a time when India's largest software firm has seen fall in demand for outsourcing contracts from US auto players. 

Interestingly, this is the first time Volkswagen has opted for an on-shore and offshore model for its IT systems. Earlier, the UK company's entire IT work was done onsite. The move, according to analysts, is seen as Volkswagen's efforts to drive down costs. TCS's other auto clients are Italy's Ducati and Ferrari. Early this year, the $6-billion IT major got a multi-million dollar, multi-year project from Ducati. 

Volkswagen group confirmed TCS as its strategic IT partner after being impressed with the Indian company's work. TCS has been working with the group for some time and its capability was tested within the first week of the teaming up on the project, when a major power outage at its head office in Milton Keynes, UK, caused many of the group's systems to fail on a Friday evening. TCS, which was intimately acquainted with every corner of the system and piece of equipmen - mobilised a global team to work overnight--both onsite and from India - successfully recovering the entire group's IT services in time for Saturday's trading. 

We couldn't have better proof that were in safe hands with TCS,'' said Nick Gaines, Group IS director, Volkswagen Group.*


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## white_pawn

*Ban on wheat futures removed​*
NEW DELHI: With only hours left for the outcome of the 15th Lok Sabha elections to be known, politically sensitive issue of ban on trade in wheat 
futures has been lifted. "Suspension on futures trading in wheat has been lifted today," Forward Market Commission (FMC) member Rajeev Agarwal said. 

The ban was imposed in February 2007 on demand from the Left Parties and RJD leader Lalu Prasad Yadav. A senior government official said the ban on rice futures would, however, continue. 

The decision to ban futures trading in both rice and wheat was announced in Parliament by the then finance minister P Chidambaram, who simultaneously announced setting up of Abhijit Sen Committee to study the impact of forward trading on prices of essential commodities. 

Though Left parties and others had demanded a ban on futures trading in all essential commodities, the government decided to impose curbs only on only wheat and rice. Earlier, in January 2007, it had already banned futures trading in tur and urad, which is still in force. In the wake of high inflation last year, the government had also banned forward trading in potato, soya oil, chana and rubber. However, the restriction was removed six months later in November 2008. 

Sources said the decision to lift the ban was taken by the consumer affairs minister Sharad Pawar last month, but the FMC was directed to announce the decision only after expiry of the model code of conduct. Even as the ban has been lifted, trading in wheat futures would not automatically resume in the commodity exchange platforms. The bourses would have to send their proposal to launch wheat contract. Agarwal said FMC would approve or disapprove the proposal after vetting the contract specifications. 

Leading agri commodity exchange NCDEX said it would soon approach fmc for launch of contract. 

Ban on wheat futures removed - India Business - Business - The Times of India


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## white_pawn

*Indians' surge in Silicon Valley continues despite downturn​*16 May 2009, 0041 hrs IST, IANS

WASHINGTON: The numbers of Indians and other Asians and Latinos in America's Silicon Valley continued to surge from 2007 to 2008 even as the NRI Taxation
Forex Converter
Remittances made easy 
population growth of the two ethnic groups unexpectedly slowed nationwide. 

For years, Santa Clara County's diverse population - with more minorities than whites - has served as a pointer for the rest of the US, but the latest data released by the US Census Bureau Thursday is expected to push back the projected date that minorities will outnumber whites across the US by a decade. 

The souring economy and changes in immigration policy have curbed the growth in minority populations across the US, but Silicon Valley - with its high-tech economy, safe neighbourhoods and strong public schools - continues to be a magnet for Asians, the San Jose Mercury News reported. 

Despite predictions that Asian growth would slow as the worldwide economic slump slammed Silicon Valley, the new data shows Santa Clara County from 2007 to 2008 added more new Asian residents in the nation than any other region - nearly 18,000 people. 

Census estimates show the number of Asians in the county grew by 3.4 percent year to year. The number of Latinos in the county grew by 3.2 percent and the number of whites decreased by 0.2 percent, according to a computer analysis of the new data. 

Nationwide, the Asian population increase slowed from 3.7 percent in 2001 to about 2.5 percent. But Santa Clara County, which became a majority-minority county a decade ago, and much of the Bay Area are clearly an exception to the nationwide trend. 

Perhaps most surprising was the continued strong growth of the Asian population, even as some H-1B visa holders return to India, China and Taiwan and the Silicon Valley job magnet loses strength, said the Mercury News focusing on the Silicon Valley. 

The annual census estimate does not break down whether the growth in the Asian population is driven by immigration, birthrates or migration from other states. 

But Hans Johnson, a demographer with the Public Policy Institute of California, cited by the News, said an important reason for the valley's increased popularity for Asians was: "Critical mass." 

With such a high concentration of Asians, he said, the valley becomes more of an attraction for new immigrants looking for family, friends and networks in finding jobs, great Asian restaurants and a nice place to live. 

Indians' surge in Silicon Valley continues despite downturn- Visa Power-Travel-Services-News By Industry-News-The Economic Times


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## white_pawn

*Sensex seen at 14k by Budget​*
18 May 2009, 0701 hrs IST, ET Bureau

MUMBAI: The euphoria is palpable. A stunning mandate, absence of any Left interference, and the likely entry of young faces in the new government Pick stocks on fundamentals could not only liven up Dalal Street punters and local institutions, but also trigger buying by India-dedicated foreign funds that stayed away from the recent rally. 

But it may not be a one-way street for all. There are disturbing rumours that many traders and some big operators have been caught on the wrong foot following UPA&#8217;s convincing win. These are people, who, last week, went short on the market by writing call options, buying puts, and building naked futures positions. While some of these players are staring at massive losses, they are clearly in a minority. 

According to the average of an ET snap poll of 15 leading brokers and fund managers, the benchmark Sensex is expected to rise between 700 and 800 points on Monday in early trade. 

All the respondents expect the mood to be euphoric, and nine of the respondents were of the view that the Sensex could rise to 14,000 by the time of the Union Budget. Two of the respondents expect the Sensex to trade between 12,000 and 13,000 by Budget, while the remaining three declined to give any estimates. 

In terms of best-performing sectors, an overwhelming majority of the respondents have placed their bets on banking and infrastructure stocks, expecting them to gain from government spending. The consensus view is that sectors like FMCG, pharma and IT could underperform in the near term. 

There are still lot of short positions in the market. That, and the renewed wave of buying, could push the market up by 700-800 points at opening itself,&#8221; says A Balasubramanian, chief investment officer, Birla Sun Life Mutual Fund. 

Vikas Khemani, executive vice-president and co-head institutional equities, Edelweiss Capital, expects the Sensex to open with a gap of 8-10&#37; over Friday&#8217;s close. This view is also shared by Nirmal Jain, chairman and managing director of India Infoline. 

&#8220;The market will be in an uptrend for the next one week, with most of the gains coming in the first two days of the week,&#8221; says SA Narayan, managing director, Kotak Securities. He declined to comment on any specific projections for the index, other than saying that only the Budget would decide the medium-term trend for the market. 


Sensex seen at 14k by Budget- Analysis-Markets-The Economic Times


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## white_pawn

*NOW CHECK THIS OUT​*

*300 crorepati MPs as House gets richer​* 


NEW DELHI: Members of the 15th Lok Sabha may not be too bothered about salary hikes for themselves. Not with as many as 300 crorepatis getting the 
people's mandate this time; up 95% from 154 in the last Lok Sabha. 

According to assets declared before the Election Commission, the wealthiest MP in the new House is Namma Nageswara Rao of TDP, elected from Khammam in Andhra Pradesh. He is worth Rs 173 crore. Rao is followed by Congress's Naveen Jindal from Kurukshetra with assets of Rs 131 crore. 

Others at the top of the crorepati club are L Rajagopal (Congress), Praful Patel (NCP), Supriya Sule (NCP), Rajkumari Ratna Singh of Pratapgarh (Congress) and Andhra CM Y S R Reddy's son Y S Rajamohan Reddy. 

The list of crorepatis was compiled by National Election Watch (NEW), a nationwide body comprising more than 1,200 NGOs and other citizen led organizations working on electoral reforms. 

The maximum number of crorepatis were found to be from Congress (137), followed by BJP (58), SP (14) and BSP (13). These parties are followed by DMK and Shiv Sena. 

Interestingly, JD(U) was found to have the seventh biggest group of crorepatis in the House, ahead of 'richer' parties like NCP, BJD and TDP. 

Amongst states, maximum crorepatis are from UP (52), followed by Maharastra (37), Andhra Pradesh (31) and Karnataka (25), Bihar (17), Tamil Nadu (17) and MP (15). Gujarat, at number 10, has sent 12 crorepatis to the new House this time  less than the number from Punjab and Rajasthan. 

Anil Bairwal, coordinator, NEW, said, "The misuse of monetary incentives to buy votes has increased sharply since the last elections and continues to be a source of threat to real democracy." 

Bairwal doubts that development would be the priority of the new MPs who have spent huge sums to get themselves elected. "They are more likely to focus on recovering the funds they spent and on giving favours to those who supported their campaigns," he added. 

300 crorepati MPs as House gets richer- Politics/Nation-News-The Economic Times


----------



## white_pawn

*Govt will have to extend benefits of its stimulus packages​*
18 May 2009, 0322 hrs IST, Amiti Sen, ET Bureau

NEW DELHI: With a steady fall in industrial production and exports over the last few months, the new UPA government will have to extend many 
benefits of its previous two economic stimulus packages and weigh the need for a new one, as it looks to shepherd the economy out of its troubles. 

The outgoing government announced two stimulus packages in the last fiscal year to help industry deal with the global economic slowdown, and a number of measures in these are slated to lapse over the next few months. 

Industry is expected to push strongly for extending the 4% cut in excise duty that is valid until June 30. However, as the move will have revenue implications, the new government will have to decide on its importance. 

Another important measure ending on June 30 is removal of interest rate caps on external commercial borrowings. The government had given industry complete freedom to take dollar loans from foreign banks and export credit agencies, doing away with the earlier borrowing cap of Libor plus three percentage points. The relaxation helped industry in accessing dollar loans easily, especially when the dollar firmed against the rupee. 

The earlier stimulus package had allowed non-banking financial corporations, which play a major role in disbursing credit to industry as they do not seek collateral, the freedom to borrow from overseas multilateral agencies and development financial institutions. As industry continues to face a credit crunch, there will be pressure on the new government to continue with this policy. 

The new government will also have to decide whether the interest rate subvention or a discount of 2% given to exporters of identified labour-intensive sectors should continue beyond 2009. It has to also decide whether its full budget should include higher reimbursement rates for DEPB, a popular input duty reimbursement scheme for exporters. 

Another item on the industry wish list is an extension of tax sops for software technology parks (STPIs) and 100% export oriented units, which end on March 31 next year. 

Exporters are looking for the government to do much more than what it has already done. 

What the government has given us so far is peanuts and has proved to be a failure. We want constructive steps to give exports a boost, said Delhi Exporters Association (DEA) president SP Agarwal. 

According to Federation of Indian Exporters Organisation director-general Ajay Sahai, countries such as China, Vietnam as well as South Korea have given much more support to their industry and exporters compared to India. 

We are preparing a memorandum highlighting areas where the new government can help exporters, Mr Sahai said. 

There is also a lot of unfinished work in the area of trade agreements. The government will have to work with other countries to settle numerous contentious issues to conclude the ongoing Doha negotiations of the World Trade Organisation (WTO). The proposed Indo-Asean free trade agreement, which the UPA government missed signing by a whisker the last time around, also needs to be ironed out and implemented. 

A liberal grant under the market development assistance scheme, new schemes to incentivise exporters to explore alternate markets like South America, as well as providing export credit at nominal interest rates are proposals high up on the associations priority list. 

Govt will have to extend benefits of its stimulus packages- Policy-Economy-News-The Economic Times


----------



## white_pawn

* Spare some big thought for foodgrain glut​*
18 May 2009, 0327 hrs IST, Prabha Jagannathan, ET Bureau 

NEW DELHI: The new government will have to work out a foodgrain management policy focussed on clearing surplus stocks, especially those of wheat. 


As on April 1, the Food Corporation of India (FCI) held nearly three times the minimum wheat stock requirement of 4 million tonnes. The new government can explore a few options in this regard: subsidise exports, push stocks through the public distribution system (PDS) and work on norms to increase buffer stocking. 

While the PDS option is usually not favoured by governments in the first half of their stints in power as perceived gains dissipate by election time, the government could increase the capacity of the 2 million-tonne strategic long-term buffer. 

While granaries are bursting at the seams, prices are plummeting. Wheat stocks are currently pegged at 13.4 million tonne, and the output this season is pegged at around 78 million tonne. Prices have plunged to Rs 1,020 a quintal (0.1 tonne) in the Capital as against a minimum support price of Rs 1,080 a quintal and to Rs 930 a quintal in UP. 

Carrying cost per tonne of wheat is pegged at Rs 2,400 a tonne a year, going up every month by by Rs 200 a tonne. Wheat quality, already poor, will also deteriorate rapidly, making it fit only for fodder. With food subsidy already at around Rs 50,000 crore, no new government can afford to delay this decision. 

Globally too, there is a glut, with the International Grains Council (IGC) projecting an eight-year increase in stocks. Prices have dipped as a result, and exports are unviable. Against a free-on-board price of $280-$250/ tonne at Kandla or Mundra for Indian wheat, better quality wheat sells between $185 a tonne and $220 per tonne. 

Given the glut and exporters reluctance to pick up stocks, the commodities market regulator, the Forward Markets Commission on Friday approved the removal of the two-and-a-half-year-old ban on futures trading of wheat on Friday while leaving the ban on rice, urad and toor futures in place. 

While rice stocks are also surplus  at 21.6 million tonne on April 1 against a buffer norm of 11.2 million tonne  the government will have to play cautiously. For one, global trade in the commodity is only a fraction of wheat trade. Further, sending out signals of huge exports could send global prices down further. 

Spare some big thought for foodgrain glut- Agriculture-Economy-News-The Economic Times


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## Screaming Skull

*Sensex creates history; two upper circuits in one day; kisses 14K; trade halted for day​*
18 May 2009,

MUMBAI: *Markets have stopped trading for the day as the benchmarks hit another upper circuit Monday as soon as the trade resumed after 2 hour break. Investors are euphoric after the United Progressive Alliance emerged victorious in the 2009 general elections.* 

*Bombay Stock Exchanges Sensex was locked at 14272.62 up 2099.21 points or 17.24 per cent. National Stock Exchanges Nifty was locked at 4308.05, up 636.40 points or 17.33 per cent. According to media reports turnover including cash and F&O was less than Rs 1000 crore.*

Marketmen are upbeat given the fact that there will be no interference by the Left Parties and other regional parties in day-to-day functioning of the government and less number of allies will lead to a stable government which will run its course of five years.

BHEL (32.72%), Larsen & Toubro (29.53%), DLF (25.82%), ICICI Bank (25.30%) and HDFC (23.46%) were the top Sensex gainers.

Amongst the sectoral indices, BSE Realty Index was up 25.37 per cent, BSE Capital Goods Index gained 23.47 per cent, BSE Bankex moved 20.27 per cent higher and BSE Oil&gas Index advanced 19.57 per cent.

Market breadth was positinve on the BSE with 833 advances and 11 declines.

The new government which is likely to be sworn in by Friday is expected to come-out with full budget within 45 days of resuming office, according to media reports.

Reforms in the banking sector, divestment of public sector undertakings, infrastructure, retail sector and insurance sector is likely to top the priority list.

Sensex had opened 10.73 per cent or 1305.97 points higher at 13479.39 points to 12011.10. National Stock Exchanges Nifty was locked at 4203.30, higher by 14.48 per cent or 531.65 points.

*Market experts views:*

Markets had previously worried that gains by leftist and smaller regional parties would weigh on the reform agenda and lead to a further blow-out in the already large fiscal deficit. In previous elections, both BJP- and Congress-led alliances had been unable to push through reforms, held down by allies with their own agendas. The government's rural jobs program and strong private sector investment have highlighted the positive effects of economic reform and liberalisation, and voters' shunning of smaller parties imply a desire for greater action on the reform front, said a Moodys Economy.com report

The report added, Despite the strong endorsement from voters, the government is likely to have a tough job pushing through some much-needed reforms. Political constraints mean a scrapping of fuel subsidies are unlikely, nor reforms to outdated labour laws that constrain hiring and create high firing costs. Returning to the path of fiscal consolidation will also be challenging if the global recession becomes protracted, while the financial crisis will mean any steps to liberalise capital flows and foreign investment will be cautious.


----------



## Screaming Skull

*Investors' wealth swells by Rs 4 lakh cr ($80 billion) within seconds​*
Monday, May 18, 2009

MUMBAI: *Investor wealth soared by a whopping Rs four lakh crore ($80 billion) within seconds of opening of trade on the Bombay Stock Exchange, as the markets were elated at the decisive win of the ruling UPA Government in the general elections.*

The total investors' wealth, measured in terms of combined market capitalisation of all the listed companies, has increased by over Rs 4,08,410.60 crore in the opening trade to Rs 42,15,354.29 crore.

The 30-share Bombay Stock Exchange Sensex zoomed 1,305.97 points at 13,479.39, hitting the upper circuit within seconds of opening of trade, following which trading was halted for two hours.

Ashika Stock Brokers Research Head Mr Paras Bothra said the buying spree is likely to continue after the market reopens and may touch another circuit limit.'' He further said very low volumes were traded as most investors could not engage in any buyin g activity as the markets hit its upper circuit within seconds.''

Further, the 30 Sensex companies, which account for over 47 per cent of the total market capitalization of all the companies, saw their combined market valuation rise by nearly two lakh crore in the opening trade today.


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## duhastmish

This is well deserved - perk for investers. Thankgod with this rise there was little - raise in real estate and infrastructure sector too .

I see this rise to go 15,500 - 16,000 pts in next opening. If it goes above 16,000- points it will stay there for long. 
---------------
promise of economic reforms from kamal nath also a big issue ( although i dought mamta banerjee's stand on it ).
and more than upa its about absence of LEFT parties. which is giving boost to indian markets.
again congrats to all fellow investors. who were down n out for long.

I see a change in real estate sector too. it will go up again. 
----------------


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## white_pawn

*New govt to continue offshore wealth recovery​*
19 May 2009, 1007 hrs IST, M Padmakshan , ET Bureau

MUMBAI: In all likelihood, the new regime in power will follow up the work it has initiated in its last term to recover Indian wealth taken away to 
various offshore banking destinations. Quite a few reasons are there to presume so. 

First, the public interest litigation (PIL) being heard by the Supreme Court on this issue. Sources close to jurist Ram Jethmalani, who filed the PIL, said the legal pursuit will carry on irrespective of the governments. Also, more PILs on this issue may come up soon, as NGOs and other interested parties have decided to file PILs after the formation of the new government. 

The second reason for a continuance in the efforts will be the moral support from several international experts on Asian economies. Then, there is also the international consensus on the need to rein in tax havens, which can bolster Indias efforts to renegotiate tax treaties signed with other countries, including Switzerland and other offshore destinations. 

The UPA governments view on this matter could be inferred from the affidavit filed before the Supreme Court. It said it had secured from the German government, details of Indians having deposits with LGT Bank, Liechtenstein, a well-known tax haven bordering Germany. It said the government received this information from Germany after a systematic and sustained pursuit. 

This was a reply to the charges in the PIL in which it was alleged that the government was not committed to secure information offered by Germany. The affidavit also answered charges levelled by BJP and CPM that the ruling party was indifferent to the German governments offer. 

The Union governments affidavit in the PIL has given details of the steps initiated, including telephone calls and emails sent to the concerned authorities in Germany. 

The government also told the Supreme Court that it had approached the government of Switzerland for a relook into the Double Taxation Avoidance Agreement (DTAA) so that the Indian tax regime gets an easier access to information regarding Indian deposits in Swiss banks. 

Therefore, the government is under obligation to continue with the exercise of renegotiating the DTAA with Swiss authorities and also with several countries known to be having strict banking secrecy laws that prevent access to information on deposit holders, according to legal experts. 

Additionally, there is also moral support in favour of the government, coming from international experts and economists specialising in Asias economies. 

Joseph Tan, chief economist at Credit Suisse, the second largest Swiss bank, was quoted by international media recently as saying that India has to claw back every cent it can get. 

The prospect of revenue is the impetus to crack down on tax evasion and tax havens. The $85 billion stimulus package underway requires mobilisation of such resources, the report added. 

Indian initiative in this direction also coincides with international consensus on reining in on tax havens that reportedly conceal over $11 trillion stashed away from developing as well as developed countries. 

The G20 meet held in London last month too voiced its concern over continuing existence of banking secrecy laws that block any information on deposits held in these banks. 

New govt to continue offshore wealth recovery- Finance-Economy-News-The Economic Times


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## white_pawn

*In one minute, India best mkt in world with 48% gain in 09​*
CHENNAI: The 2111-point surge on 'Magnificent' Monday pushed the Indian stock market ahead of competition as the best performing market across the 
world, giving investors an astounding 48% gains in 2009. 

With factors like the government's stability and the Left's fate settled, investors furiously bought index constituents in the 30-share BSE sensex, keeping the 'India story' alive and kicking. 

From sub-10,000 point levels at the end of 2008, the Indian benchmark has gained over 4,600 points in less than six months  thanks to the rally that started from early March. 

Before Monday, sensex had gained 26% in 2009 but the two minute bull blitz leading to the unprecedented over 2,000-point gain turned out to be the game-changer for the open slot of the best performing market this year. Marketmen expect India to turn into one of the lowest risk, highest growth investment destination globally. 

India could outperform emerging markets (EMs) in the coming 12-months especially if the government delivers on the policy front, said Ridham Desai of Morgan Stanley. He has an year-end target of 15,300 for sensex. 

"Global investors will be chasing outperformance and Indian economy can offer them the best chance with 7-8% GDP growth in the next few years. While investors were earlier chasing value, now they will be chasing growth. The mindset has changed and there is lot of money waiting to come into India," said Seturam Iyer, chief investment officer at Shinsei AMC. 

With political risk less of an issue, Indian stock market  still under owned by FIIs  is being re-rated. With the re-rating process still unfinished, many expect India to continue to outperform other countries like China, Brazil, Taiwan, Russia and Vietnam. 

In terms of year-to-date performance, India's sensex is followed by China's Shanghai SE A-Share index with 45.6% gains, Taiwan's TAIEX (up 43.3%), Russia's RTS-2 (33.2% gain) and Indonesia's Jakarta Composite (up 31.2%), Bloomberg data shows. 

Even if equity markets head lower sharply later in the year, $10-15 billion of capital may be transferred from global financial investors to Indian corporates and their major shareholders before that, Credit Suisse analyst Nilesh Jasani said. 

While some experts feel that there could some consolidation before the market moves on, analysts at Credit Suisse believe that Indian stock market could overshoot considerably, global markets permitting, from pre-budget period to July. 

With investors in stock markets in developed nations such as Australia, France, the US, the UK and even Switzerland registering 1-6% losses or at best, flat gains in 2009, experts believe India's outperformance will bring in more FIIs, hedge funds and big institutional investors. 

In one minute, India best mkt in world with 48% gain in ?09 - India Business - Business - The Times of India


----------



## white_pawn

*GE Hitachi to develop nuclear power plants with L&T​*20 May 2009, 0102 hrs IST, PTI


NEW DELHI: GE Hitachi Nuclear Energy, advanced reactors and nuclear services provider, on Tuesday said it will develop nuclear plants in India in 
collaboration with Larsen & Toubro. 

GE Hitachi Nuclear Energy (GEH) has signed a nuclear power plant development agreement with Larsen & Toubro Ltd, GE Hitachi Nuclear Energy said in a statement. 

Under the agreement, GEH and L&T will plan for the construction and engineering management resources that will be needed to build the proposed Advanced Boiling Water Reactor (ABWR) for nuclear power station, it said. 

GEH will serve as the technology provider of certain ABWR nuclear island equipment and components, as well as related engineering and technical advisory services. 

"The agreement with L&T is an important step in gearing up to meet the country's power needs through nuclear energy," GE Energy (India, Srilanka & Bangladesh) CEO Kishore Jayaraman said . GEH is in discussions with NPCIL for selecting the site to set up the potential multi-unit ABWR plant. 

In March 2009, GEH announced an ABWR development agreement with the Nuclear Power Corporation of India (NPCIL), India's only nuclear utility, operating 17 reactors. 

GE Hitachi to develop nuclear power plants with L&T - India Business - Business - The Times of India


----------



## white_pawn

*Annual inflation seen at 0.61 pc on May 9​*
20 May 2009, 1415 hrs IST, REUTERS

MUMBAI: Annual inflation rate is expected to have risen in early May due to a rise in prices of some primary articles and manufactured goods, a 
poll of analysts showed on Wednesday. 

The median forecast of 12 analysts was for a 0.61 per cent rise in the wholesale price index in the 12 months to May 9, compared with a 0.48 per cent rise the previous week. 

"The price rise is more from non-food primary articles and manufactured goods," said Sujan Hajra, chief economist at Anand Rathi Securities. The inflation rate had fallen to 0.18 per cent in early April, the lowest since annual records started in 1977/78. It has trended up since then, although the annual rate dipped on May 2. 

The wholesale price index had been on a downward trend since September, after a fall in global commodity prices and cuts in fuel prices. It steadied in February before turning up in April. Analysts said the annual inflation rate could turn down again and be negative by late June or early July, reflecting sharper rises in the wholesale price index a year ago. 

"For both food and manufactured products, the week-on-week trends are actually up, but not up high enough for us to think there won't be a negative inflation in June-July," said Atsi Sheth, economist, Reliance Equities. The wholesale price index is more closely watched than the monthly consumer price index (CPI) because it includes more products and is published on a more frequent basis. 


Annual inflation seen at 0.61 pc on May 9- Indicators-Economy-News-The Economic Times


----------



## white_pawn

*J&K Budget likely to see reforms in recruitment rules​*
20 May 2009, 1331 hrs IST, PTI

SRINAGAR: Reforms in recruitment rules, tackling burgeoning unemployment and tapping power generation potential are some of the issues which may 
find a place in Jammu and Kashmir's upcoming budget. 

As part of his pre-budget discussions, Jammu and Kashmir Finance Minister Abdul Rahim Rather held a meeting with academicians, transport associations and representatives of the Kashmir Chamber of Commerce and Industry here. 

During the meeting, certain issues concerning the power situation of the state, agricultural productivity, implementation of e-governance among others were discussed. 

The minister said everything possible would be done to boost the economy and restore confidence of major stakeholders in the state. 

He said even though the government has many problems at hand on the economic front, everything would be done to fulfil the aspiration of the people. 

The government is committed to help vulnerable sections in coming out of the economic morass, while formulating budget "I would take every stakeholder on board and work out a strategy to accommodate genuine suggestions put up by them," Rather said. 

The state government deferred budget session in view of the general elections and the subsequent enforcement of model code of conduct. 

J&K Budget likely to see reforms in recruitment rules- Policy-Economy-News-The Economic Times


----------



## white_pawn

*India continues to be most favoured BPO destination​*
NEW DELHI: India continues to be the most favoured back-office of the world, but the West Asia and North Africa region is slowly emerging as a promising offshoring destination, global management consulting firm A T Kearney says. 

According to A T Kearneys Global Services Location Index (GSLI), India, China and Malaysia have retained the top three spots since the last five years. 

India, China and Malaysia continue to lead the index by a wide margin through a unique combination of high people skills, favorable business environment and low cost, the report said. 

In particular, India has remained at the forefront of the outsourcing industry and actually has become an enabler for industry growth through expansion of Indian offshoring firms into other countries, it added. 

The survey further said that West Asia and North Africa is emerging as a key offshoring region because of its large, well educated population and proximity to Europe. 

West Asia and Africa area has the potential to redraw the offshoring map and in the process bring much needed opportunities for its large, underemployed educated class, GSLI project manager Johan Gott said. 

These findings come amid US president Barack Obamas recent comment that Its a tax code that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York. 

The survey further said the global financial crisis has slowed recent offshoring moves, the percentage of companies staff offshore may very well increase as a result of the crisis. Layoffs at home are not translating to layoffs among offshore workers as companies seek to reduce costs. 

While cost remains a major driver in decisions about where to outsource, the quality of the labor pool is gaining importance as companies view the labor market through a global lens driven by talent shortages at home, particularly in higher, value-added functions, said Norbert Jorek, a partner with A T Kearney and managing director of the firms Global Business Policy Council. 

In addition to Egypt and Jordan, ranked at sixth and ninth, respectively, some other emerging offshoring destinations were Tunisia (17th), United Arab Emirates (29th) and Morocco (30th). 

Saharan Africa also showed strength. Ghana ranked 15th, Mauritius 25th, Senegal 26th and South Africa 39th. The dynamics of global offshoring are clearly shifting as companies re-evaluate the political risks, labor arbitrage and skill requirements in the context of the likely aftermath of the global economic crisis, A T Kearney chairman and managing officer Paul A Laudicina said. 

GSLI analyses and ranks the top 50 countries worldwide for locating outsourcing activities, including IT services and support, contact centers and back-office support.

India continues to be most favoured BPO destination- ITeS-Infotech-The Economic Times


----------



## white_pawn

*India buys $20-bn US treasury bills in just 6 months​*
21 May 2009, 0945 hrs IST, Gayatri Nayak, ET Bureau 

MUMBAI: It's not just hedge funds and battered institutions that have rushed to pick up US government bonds, long considered the safest investment World's top tax havens that hoard billions 
despite abysmal returns. These securities have also become irresistible to central banks of emerging markets such as India. 

India has lent close to $20 billion to the US government over six months since the collapse of iconic investment bank Lehman Brothers. 

According to the latest data shared by the US treasury department, Indias outstanding exposure to US government bonds rose from $18.3 billion in October 08 to $38.2 billion in March 09. The latest tranche of investment into treasuries has made India the fourth-largest creditor to the US after China, Japan and Russia during this period. 

While Indias outstanding debt exposure to the US government pales in comparison with the top three investors, the $20 billion incremental investment is significant considering the low base prior to Lehmans collapse. 

India has now emerged among the top 15 lenders to the US, moving up by at least five notches over the period under review. Though corporates, banks and other financial institutions can subscribe to US treasury bonds, in the case of India, RBI accounts for a large chunk of the investments. 

Essentially, its an indicator of flight to safety by central banks. The general view among central banks is that the dollar may not depreciate much in the medium to long term, Sailesh Jha, director, Asian Economic Research, Barclays Capital, told ET. 

India buys $20-bn US treasury bills in just 6 months- Finance-Economy-News-The Economic Times


----------



## white_pawn

*Indian, Brazilian industries target $10 billion trade by 2010 ​*
MUMBAI: The Indian and Brazilian industries on Wednesday said that trade between the two nations may reach $10 billion by 2010. 


"The bilateral trade between the two countries has grown from a mere USD 500 million in 2000 to USD 3.12 billion in 2007 and is targeted to reach USD 10 billion by 2010," CII International Trade Panel Chairperson Harshbeena Zaveri said. 

A delegation of Brazilian industrialists and officials of the CII today discussed steps to consolidate the existing trade between the countries besides exploring new business opportunities. 

Indian companies are increasingly setting up operations in Latin America in sectors like IT, steel, chemicals, autos and pharmaceuticals, Zaveri said. 

"In fact, with the western markets slowing, the time is ripe for Indian and Latin American companies to set up their engagements with each other," she said. 

India's major exports to Brazil include mineral fuel, chemicals, iron and steel while the imports include cereals and rubber. 

Indian, Brazilian industries target $10 billion trade by 2010 - Foreign Trade-Economy-News-The Economic Times


----------



## white_pawn

*Credit begins to flow to India Inc​*21 May 2009, 0332 hrs IST, ET Bureau

MUMBAI: Money has begun flowing to India Inc from banks, albeit in a small way. However, banks are seen still biased towards government bonds 
despite sustained growth in deposits. 

After reporting a Rs 25,266-crore dip in credit in the last fortnight of April, banks have lent Rs 5,881 crore to companies, individuals and other businesses during the fortnight ended May 8, according to the latest figures released by the Reserve Bank of India. 

Total loans amounted to Rs 27,52,056 crore as on May 8. Although banks have reported a better loan growth on a sequential basis, the loan growth in the comparable fortnight last year was much higher at Rs 17,500 crore. 

Similarly, in the same fortnight, investment in government and other approved securities (that qualify for statutory liquidity ratio or SLR) rose Rs 33,363 crore against a dip of Rs 12,359 crore in the previous fortnight. 

Bank treasury heads say that demand for loans was lacklustre, prompting them to invest idle cash in the government securities market. Banks have also been parking surplus funds in other non-SLR avenues such as mutual funds schemes. 

Though bank lending is still to pick up, deposits are steadily flowing in. Banks mobilised deposits worth Rs 29,259.6 crore during the fortnight ended May 8 to take outstanding deposits to Rs 39,23,004.5 crore as on May 8, 2009. 

With fears that banks may further cut interest rates on deposits, many banks have witnessed a sharp growth in deposits, as people rushed to invest in bank FDs. 

Credit begins to flow to India Inc- Finance-Economy-News-The Economic Times


----------



## white_pawn

*Tata Tech eyes $1b revenue in seven years: Patrick McGoldrick​*
22 May 2009, 0751 hrs IST

MUMBAI: Tata group company Tata Technologies is targeting revenues of $1 billion over the next five to seven years. According to Patrick Mc-Goldrick 
, the companys CEO and MD, profits have doubled on a year-on-year basis over the past three years. Today, we clock revenues of $300 million, he said. 

Tata Technologies is a player in engineering services outsourcing and product development IT services. Offshore revenues, said Mr McGoldrick, has doubled over the past three years and there is reason to be optimistic. There is a growing aerospace business. We are extremely bullish about the offshoring opportunities in this segment, he added. 

Today, Tata Technologies has a global presence with operations in North America, Europe and the Asia Pacific. The revenue from the offshoring business is a little under a fifth of the total business with onshore bringing in the other part. 

Our aspiration is to see 60% of our business coming from the offshore segment with onshore accounting for the balance 40%, said Tata Technologies president & COO, Warren Harris. From a staff of over 4,000, Tata Technologies expects to almost double that to 7,800 by the time it has a turnover of $500 million. 

Around 15% of Tata Technologies revenues come from Tata Motors. Overall, 60% of the companys revenues come from the automobile industry. In the next three to five years, we expect 80% of our revenues to come from the automobile industry with the rest being accounted for by manufacturing, said Mr Harris. 

Globally, the automobile industry is going through a tumultuous period with a large number of US companies under intense pressure. There are a lot of bankruptcies in the US market. Having said that, it needs to be understood that this is an industry that is cyclical, said Mr Mc-Goldrick , while maintaining that the current scenario also presented an opportunity . There is certainly a tremendous upside, he added. 

In 2005, Tata Technologies acquired INCAT, an engineering and design services company. The following year, it bought over iKS, a company specialising in engineering knowledge and enterprise. Elaborating on the gameplan for inorganic growth, Mr Mc-Goldrick said this would be clearly determined by two drivers. One will be that of capacity and scale. Apart from that, the geographic locations and the key capabilities will be a factor, he added. 


Tata Tech eyes $1b revenue in seven years: Patrick McGoldrick- Earnings-News By Company-News-The Economic Times


----------



## white_pawn

*Govt considering Rs 10,000-cr package for shipping industry​*
22 May 2009, 1128 hrs IST

NEW DELHI: The Centre is considering a Rs 10,000-crore package for the shipping industry to help it tide over the global economic crisis, a senior 
government official said. 

"We know that the shipping industry in the country is facing difficulties. We are actively considering a package of Rs 10,000-crore to help the industry," Shipping Joint Director-General C B S Venkataramana told reporters here. 

He was speaking at a seminar on logistics park organised by industry body CII here on Friday. 

Govt considering Rs 10,000-cr package for shipping industry- Policy-Economy-News-The Economic Times


----------



## white_pawn

*Seafood exports see 8% growth in 2008-09​*
22 May 2009, 0348 hrs IST,

KOCHI: Indian seafood exports have grown by 9.7% in rupee terms to touch Rs 7,617.97 crore in the April-February period of 2008-09 compared to the 
same period last year. In terms of quantity, the exports have increased by 7.9% to reach a level of 530,033 tonnes during the same period. 

However, in terms of dollar, the exports fell by 1.4% to $1,705.45 million during the same period. The unit value realisation fell to $3.22 per kg during April-February period from $3.52 per kg in the previous corresponding period. 

Among the products, shrimp continued to be the major export item accounting for 44% of the kitty. Among the major markets, EU  the largest market for Indian seafood with a share of 33%  recorded an increase of 4% in quantity, 3.7% in rupee value. 

But it, however, declined by 6.4% in the dollar earnings. 

Japan  the second largest market with a share of 14.9%  recorded a negative growth in quantity and dollar value but a marginal growth in rupee value. China  the third largest market with a share of 14%  recorded a growth of 20% in rupee value. 

The US, which stood at second place last year, fell to fourth place with a share of 12%. 

Seafood exports see 8% growth in 2008-09- Foreign Trade-Economy-News-The Economic Times


----------



## white_pawn

*Rupee down 16 paise against dollar in early trade​*26 May 2009, 0929 hrs IST, PTI

MUMBAI: The Indian rupee weakened 16 paise against the US dollar in early trade on Tuesday on capital outflow by foreign funds in anticipation that 
the domestic markets may open down, in tandem with other Asian bourses. 

At the Interbank Foreign Exchange (Forex) market, the local unit fell 16 paise to $47.44. 

On Monday, the domestic currency had ended 18 paise lower at 47.28/30 against the greenback. 

Forex dealers said the Bombay Stock Exchange benchmark Sensex is likely to open on a weak note in line with other Asian markets, which are down up to 0.5%, leading to capital outflow by foreign funds. 

Month-end dollar demand also put pressure on the rupee, they added. 

The 30-share barometer had closed with a moderate gain of 26 points at 13,913.22 points in a choppy trade yesterday. 

Rupee down 16 paise against dollar in early trade - India Business - Business - The Times of India


----------



## sob

INVESTOR CONCERNS - Rupee falls on fears North Korea N­test may spur out flow from Asia



> The rupee fell for the first time in seven days on con cerns overseas investors will pull money out of Asia after North Korea said it held a nuclear test on Monday.
> The currency declined the most in almost two weeks as the MSCI Emerging Markets Index of stocks dropped, adding to speculation global funds see increased risk.
> 
> However, a report by Goldman Sachs on Monday said the rupee is likely to rise to 46 to the dollar within 12 months in the backdrop of a stable government at the Centre and relatively resilient domestic demand.
> 
> Noting that there are significant pressures for rupee appreciation, the report said the currency gained around 5% against the dollar since the victory for the Congress-led United Progressive Alliance in the general election.
> 
> But on Monday, a gauge that tracks the dollar against six major currencies rose for the first time in six days, indicating investors are opting for the relative safety of the greenback.
> 
> The rupee is falling and its a reaction to the North Korean nuclear test, said Sudarshan Bhatt, chief currency trader at state-owned Corporation Bank in Mumbai. Banks are reversing dollar short positions to reduce risk. Stocks are expected to drop, and that could add to the rupees weakness.
> 
> The rupee weakened 0.4% to close at 47.29 to the dollar in Mumbai. The Indian currency had climbed 4.9% last week, the best performance since March 1996. A short position is a bet that an asset or currency will fall.
> 
> Offshore contracts indicate bets the rupee will trade at 47.46 to the dollar in a month, compared with expectations of 47.22 as on 22 May. Forwards are agreements in which assets are bought and sold at current prices for future delivery. Non-deliverable contracts are settled in dollars rather than the local currency.
> 
> North Korea conducted a nuclear test on Monday, the nations official Korean Central News Agency said. The underground test was successful, according to the report.
> 
> The ICEs Dollar Index, which tracks the greenback against the euro, the Japanese yen, the British pound, the Canadian dollar, the Swiss franc and Swedens krona, climbed 0.3%.


----------



## white_pawn

*India set to have 1bn mobile users by '14​*26 May 2009, 0404 hrs IST, Shalini Singh, 

NEW DELHI: One of the most important reasons for Bharti to emerge as a frontrunner for equity stake in MTN is its leadership position in India 
projected to be the worlds ranking telecom market in just a few years. 

DoT, in a first ever forecast of mobile penetration across India for the next six years, has projected a billion mobile phones by 2014. This forecast is part of a spectrum committee report prepared by the DoT that is expected to be made public after the new telecom minister takes office. 

It is well established that India has had one of the most remarkable growths in mobile phones since the sector was first opened to private investment in 1994. From two operators in each circle in 1995 the country now has 12 to 13 operators. Of these, about six to seven are fully functional, offering the Indian consumer unprecedented choice and low tariffs. 

India has also been breaking all types of records on new subscriber additions in the last two years by adding up to 8 to 10 million phones a month, sometimes more. The latest report of the DoT put together by its committee shows that India will reach the half a billion mobile mark by 2010 and within four years reach 1 billion mobile subscribers. 

In 2014, Indias population is expected to be 1.26 billion, with mobile penetration of 1.01 billion the mobile teledensity would be 80% above. It would mean 8 out of every 10 Indians will have access to a mobile device. 

This probably reflects the worlds largest new growth opportunity over the next five years, surpassing Chinas potential. China is already at nearly 700 million mobile phones as compared to Indias 400 million. The fact that India will add more than 600 million new subscribers must rate as the biggest subscriber adds for any country in the world. 

Some of the imperatives to reach this figure would include re-defining spectrum allocation and pricing policies, early 3G auctions, and reviewing the M&A norms. 

It is clear that no country in the world can sustain a fragmented telecom market of 12 to 13 players per circle. In the end, the market will have to consolidate to between three to four national players and two or three regional players with an average subscriber base of approximately 150 million each by 2014. 

India set to have 1bn mobile users by '14 - India Business - Business - The Times of India


----------



## white_pawn

*India now a player in M&A premier league​*26 May 2009, 0401 hrs IST, Rupali Mukherjee

NEW DELHI: India will enter the global pecking order of the largest M&A's done so far this year with the proposed Bharti Airtel-MTN deal. It 
will be the third largest deal so far in 2009 and if pharma is excluded, it will be the largest deal so far globally. 

The proposed $29 billion acquisition is the third largest M&A deal after pharma biggie Pfizer acquired Wyeth in January for nearly $64 billion, and Mercks acquisition of Schering-Plough for nearly $46 billion, also in the pharma space announced in March this year. So excluding the two top deals done in the pharma sector, this would be the largest deal done globally. Bhartis proposed acquisition of 49% stake in MTN worth up to $29 billion may become the largest cross border acquisition by a domestic company after the $12.7 billion Tata-Corus deal. 

It is also the largest acquisition in Indias telecom sector and in Africa by a domestic company. The deal will even surpass that of Chinas ICBC which acquired South African bank Standard Bank group worth $5.6 billion in October 2007  the biggest African cross border inbound deal on record so far. 

Till date, the largest acquisition on record in Africa by a domestic company is Ranbaxys acquisition of Be-Tabs Pharma for $70 million announced in 2006. 

In fact, quite a few domestic companies across sectors have shown an appetite for African companies. The second largest deal is Apollo Tyres buying South Africas Dunlop Tyres for $66 million. 

Last year Godrej Consumer Products bought Kinky brand of hair business for $33.2 million, while in January this year that of Tata Communications and Neotel for an undisclosed amount. 

India now a player in M&A premier league - India Business - Business - The Times of India


----------



## white_pawn

*India buys US debts worth $38 billion ​*25 May 2009, 0102 hrs IST, PTI

NEW YORK: As the recession-hit US economy is groping in the dark over uncertain financial position, India has increased its exposure to American 
debt securities by over three-fold to $38.2 billion till March compared to the year-ago period. 

The emerging nation's investment in the US debt stood at $11.8 billion in March 2008. According to the data from the US Treasury Department, India has bought American debt instruments worth $38.2 billion till March 2009. Interestingly, India's exposure to US debt has surged by about $20 billion since October 2008, when the ongoing financial turmoil turned for the worse. 

The world's largest economy was rattled by the then-famed Lehman Brothers filing for bankruptcy in mid-September. Considered to be one of the safest investment bets, India had invested $18.3 billion in October 2008 in the American securities, which soared to $38.2 billion in March. Among the foreign countries, neighbouring China has the highest investment of $767.9 billion. Japan, the world's second largest economy has invested $686.7 billion in US debts till March 2009. 

India buys US debts worth $38 billion - International Business - Business - The Times of India


----------



## white_pawn

*Watch out for more deals​*26 May 2009, 0357 hrs IST, Shalini Singh

Even as the fine print of Bharti's proposed share-swap deal with MTN is being finalised, it is bound to be watched by a lot of other Indian telecom 
companies with great interest. Indeed, it could prove to a path-breaker, prompting many other Indian telecom companies to use the same strategy to drive their consolidation plans. 

The global recession  and resultant crash crunch  has thus far caused large telcos to hold back on big investments in India. Even the speed at which Etisalat and Telenor will launch their services in India remains unclear due to large capital commitments in Swan and Etisalat. 

The Bharti-MTN deal, however, shows a new path for Indian companies which will now be under pressure to compete with a behemoth like Bharti, which will have nearly 200 million subscribers in India and around the world. This would make Bharti not only the third largest in-country mobile operator, but also place it amongst the top four global operators. This could force other Indian operators to look for similar deals, since large sums of cash for investment will be difficult to come by in the next 12 to 18 months. 

Many Indian telecom operators like Reliance, Idea, Aircel and even Tata could look for similar arrangements to gain global access to subscribers and markets, especially in Africa and the Middle East  two of the fastest growing markets in the world after India, with large unserved populations. 

If the deal does go through and if share markets respond positively, then other companies are also likely to structure similar deals, said Kunal Bajaj, MD of consulting firm BDA India. 

Clearly, Bharti Airtel is better placed to drive the bargain than MTN as Indias telecom market has displayed that it is recession-proof and Bharti has higher cash flows today than most global companies. Conversely, MTN is more vulnerable than a year ago as South Africa has been more severely hit by the global recession than India, said telecom analyst Mahesh Uppal. 

However, while Indias telecom market could give other Indian companies a strong negotiating position too, such deals are complicated and require immense trust and coordination to work successfully. 

In the Bharti-MTN case, for example, the decision on where the headquarters of the new joint company will be located becomes a key point. Would it continue to be New Delhi or will it move to Johannesburg? 

Still, the Bharti-MTN deal has opened up a whole new range of opportunities for Indian telecom operators to go global without the need to spend large amounts of cash, and for global operators to access India by parting with shares rather than cash. 

In any case, Bhartis proposed deal with MTN should come as no surprise to those who were reading between the lines of Bhartis announcements when it reached 100-million subscribers. Bharti had hinted at accessing another 100 million subscribers outside India. 

Watch out for more deals - India Business - Business - The Times of India


----------



## white_pawn

*The rise and rise of Bharti ​*26 May 2009, 0400 hrs IST

If there is one sector that exemplifies the success of Indias reforms, it is probably telecom. And within telecom, if there is one company that is 
a shining example of entrepreneurship in action, it is undoubtedly Bharti. Sunil Mittal certainly backed the right horse when he chose Indias fledgling, high-risk telecom sector. And under his stewardship, Bharti Airtel has galloped away to become Indias largest mobile company with a subscriber base of 100 million. 

The figures tell an incredible story. In the last seven years, the companys sales have risen 783 times to Rs 36,962 crore in 2008-09. In the same period, its net profit improved a whopping 65,492 times, from Rs 12 lakh to Rs 7,859 crore. 

A small company with an incredible passion for growth and innovation, thats how I would describe Bharti Airtels modest beginning in 1995. The passion has only grown bigger over the years, Sunil Mittal once said in the groups in-house magazine. Mittal had set up the company in 1985 and it collaborated with Siemens AG of Germany to make electronic push button phones. At that time, Mahanagar Telephone Nigam Ltd used to provide traditional rotary dial phone sets. Since telephone subscribers were usually affluent, Bhartis push button instrument was a big hit. 

Mittal also started selling cordless phones. From there to mobile telephony was a logical leap. In 1992, when the Narasimha Rao government announced the new telecom policy, the group bid for a mobile telephone services licence through a new company, Bharti Cellular. In 1994, it was awarded the licence for Delhi circle. The next year, it began its mobile phone service under the brand name, Airtel. 

Later, the company went into rapid expansion mode through a series of takeovers. In 1997, the holding company, Bharti Televenture, acquired a 74% stake in JT Mobile, which used to operate in Karnataka, Andhra Pradesh and Punjab. To expand operations in Chennai, the company acquired a 95.3% stake in Bharti Mobinet from Crompton Greaves and other partners. It also ventured into the submarine cable business through a joint venture with SingTeli2i, Bharti Aquanet, in which Bharti had a 51% stake. 

This rapid growth needed regular infusions of funds. In 1999, Bharti secured Rs 1,300 crore from Warburg Pincus. That proved to be a smart investment  Warburg earned Rs 8,500 crore  a return of around 550%  when it exited Bharti in 2005. In 2000, Bharti got a major boost when global telecom major Singapore Telecommunication (SingTel) joined as a strategic partner. At present, SingTels effective stake in Bharti Airtel is 31%. 

In 2002, Bharti Airtel raised Rs 8,300 crore from the stock market through an initial public offer. That provided the company a much-needed war chest at a time when the mobile telephony business had been shaken up by the entry of Reliance Industries. 

In the years since, Bharti has gone from strength to strength. In 2002-03, Bharti Airtel had an EBIDTA (earning before interest, depreciation, tax and amortisation) loss of Rs 54 crore. In 2003-04, it it earned a profit of Rs 815 crore, which rose to Rs 1,819 crore in 2004-05, Rs 4,360 crore in 2005-06 and Rs 7,451 crore in 2006-07. Its EBIDTA margin improved from 17% in 2003-04 to 40% in 2006-07 and to 42% in 2007-08. 

The rise and rise of Bharti - India Business - Business - The Times of India


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## white_pawn

*Mittal Mantra: The making of an Indian telecom MNC​*26 May 2009, 0145 hrs IST

On May 15, shortly after Bharti Airtel announced that its mobile and landline subscribers now cumulatively numbered over 100 million, TOI caught up 
with Bharti boss Sunil Mittal. "Does it seem you've ascended Mt Everest," we asked. "After all, where do you go from here?" 

Mittal was forthright. "Now, our challenge is to globalize," he said. "We are in some small island-countries (like Mauritius). We should be looking at entering big countries." 

Did that mean that Bharti would look at major acquisitions, we asked. Mittal didn't beat around the bush. "Yes," he said. 

"We are looking for acquisitions in emerging markets like South Africa and Middle East. We tried to acquire MTN but couldn't. It was a disappointment. But we will keep trying to do acquisitions to enter emerging economies." 

Mittal was as good as his word. Within a few days of that interview, Bharti has announced that it is in advanced talks for a mega deal. And Mittal has a chance to make up for all the disappointment he felt last time, when negotiations with MTN broke down. 

If the deal goes through this time, it will make Bharti the largest telecom entity in the world (by number of subscribers) outside China. 

Add MTN's 100 million subscribers to Bharti's 100 million, and the combined figure of 200 million will see Bharti comfortably leapfrog US giants Verizon (122m) and AT&T (108m), among others. 

Bharti will then emerge as the world's fourth largest telecom company, behind only China Mobile (472m), China Unicom (247m) and China Telecom (237m). 

Mittal Mantra: The making of an Indian telecom MNC - India Business - Business - The Times of India


----------



## Screaming Skull

*Govt to present budget in first week of July: Pranab​*
26 May 2009,

NEW DELHI: Finance Minister Pranab Mukherjee on Tuesday said that budget for 2009-10 that will spell out policies and priorities of the new UPA
government will be presented in the first week of July.

"I would not like to have a second batch of vote on account... the Budget will be presented in the first week of July," he told CNBC-TV18 in an interview.

The minister further said that the issues and concerns about the economy raised by him in the interim budget, especially with regard to the sectors which are hit badly by the global financial crisis, would be addressed in the budget.

The government is required to get the budget passed by July 31, the date when the vote on account approved by Parliament allowing government to withdraw money from the Consolidated Fund of India expires.

In case the budget is not approved before July 31, the government will have to seek another vote on account. MORE

The focus of the government policies and reforms, Mukherjee said, will be 'Aam Admi' as has been mentioned in the Congress manifesto.

"Aam Admi is to be at the focal point," he said, adding the manifesto proposed to increase the minimum wages under the NREGA scheme to Rs 100 per day.

Similarly, he added, the issue of providing food security would get top priority.

On the need of another stimulus package to boost the economy reeling under the impact of the global financial meltdown, Mukherjee said the government since December last had already announced three packages.

"Whatever is needed will be done," he said, pointing out the government could not take any policy decision since March in view of the general elections for the 15th Lok Sabha in which the Congress-led UPA was voted back to power with bigger mandate.

Noting that signs of economic recovery in Europe are not promising, the minister said, the problems of crisis-hit sectors like textiles, leather and gems and jewellery will be addressed in the budget.

When asked whether he would prefer growth to fiscal prudence, he said, "What is needed is stimulus to growth, we cannot indulge in fiscal profligacy."


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## Screaming Skull

*$23 billion Bharti-MTN largest global telecom deal this year​*
26 May 2009,

NEW DELHI: The Sunil Mittal-controlled Bharti Airtel and South Africa-based MTN group's proposed $23-billion mega deal is the largest global
telecommunications transaction and the fourth biggest global M&A deal this year.

The Bharti-MTN deal with a potential value of $23 billion is nearly half of the total telecommunication merger and acquisition transactions announced till mid of this month.

As per global deal tracking firm Dealogic, global telecom volumes in 2009 stood at $49.2 billion through 410 deals.

"Not only for sheer size, this deal would be a first of its kind, because it is a stock and cash deal. It will bring to centre stage the use of stock as a mechanism to settle purchase consideration," global consultancy firm PricewaterhouseCoopers Executive Director Sanjeev Krishnan told media.

Besides, the Bharti-MTN deal would be the fourth-largest deal so far this year after the Wyeth-Pfizer transaction amounting to $61.8 billion, Schering-Plough and Merck deal worth $45.9 billion and the US government hiking its stake in Citi to 36 per cent for $25 billion.

Experts believe the Bharti-MTN deal certainly give a fillip to the M&A market in India, which has been somewhat dormant for a bit, but the lull in the merger and acquisition space is far from over.

"Since this was a deal the two parties had negotiated last year too, it is not a new transaction, so it may be premature to say that the lull in the M&A market has lifted - there are still financing and other challenges for most Indian businesses...," Krishnan said.

The Bharti-MTN deal would involve a complex structure in which both the entities would pay cash and stock for stakes in each other. As per the exploring agreement, MTN would acquire around 36 per cent economic interest in Bharti Airtel. While, Bharti Airtel would acquire 49 per cent stake in MTN.

"This deal is unique as for the first time company stock is being monetised in this manner to make an acquisition and it may just spur alternative mechanism for financing acquisitions in times to come," Krishnan added.

After the $23 billion Bharti-MTN deal, the Directv Group's $14.7 billion acquisition of Liberty Entertainment announced at the start of this month is the second largest telecommunications deal so far this year.

Some other major global telecommunications deal include US-based Frontier Communications' $8.6 billion acquisition of Verizon Communications, Canada Pension Plan Investment Board's $4.8 billion investment in Macquarie Communications Infrastructure for 81.67 per cent stake in the company.

This would be the biggest M&A deal involving an Indian entity. Prior to this, Tata Steel's takeover of European steel major Corus for $12.2 billion was the largest, followed by UK telecom giant Vodafone's controlling stake buy in mobile service provider Hutch Essar for about $10 billion


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## Screaming Skull

*India set to have 1 billion mobile users by 2014​*
26 May 2009,

NEW DELHI: One of the most important reasons for Bharti to emerge as a frontrunner for equity stake in MTN is its leadership position in India projected to be the worlds ranking telecom market in just a few years.

DoT, in a first ever forecast of mobile penetration across India for the next six years, has projected a billion mobile phones by 2014. This forecast is part of a spectrum committee report prepared by the DoT that is expected to be made public after the new telecom minister takes office.





It is well established that India has had one of the most remarkable growths in mobile phones since the sector was first opened to private investment in 1994. From two operators in each circle in 1995 the country now has 12 to 13 operators. Of these, about six to seven are fully functional, offering the Indian consumer unprecedented choice and low tariffs.

India has also been breaking all types of records on new subscriber additions in the last two years by adding up to 8 to 10 million phones a month, sometimes more. The latest report of the DoT put together by its committee shows that India will reach the half a billion mobile mark by 2010 and within four years reach 1 billion mobile subscribers.

In 2014, Indias population is expected to be 1.26 billion, with mobile penetration of 1.01 billion the mobile teledensity would be 80% above. It would mean 8 out of every 10 Indians will have access to a mobile device.

This probably reflects the worlds largest new growth opportunity over the next five years, surpassing Chinas potential. China is already at nearly 700 million mobile phones as compared to Indias 400 million. The fact that India will add more than 600 million new subscribers must rate as the biggest subscriber adds for any country in the world.

Some of the imperatives to reach this figure would include redefining spectrum allocation and pricing policies, early 3G auctions, and reviewing the M&A norms.

It is clear that no country in the world can sustain a fragmented telecom market of 12 to 13 players per circle. In the end, the market will have to consolidate to between three to four national players and two or three regional players with an average subscriber base of approximately 150 million each by 2014.


----------



## white_pawn

*Steel PSUs to invest Rs 13k cr​*27 May 2009, 0100 hrs IST, PTI



NEW DELHI: SAIL, NMDC and RINL will infuse Rs 13,000 crore this fiscal as part of their programme to expand production capacities to 35 million tonnes in next two-three years. "SAIL, NMDC and RINL will spend Rs 13,000 crore in '09-10 on their expansion programmes with an aim to double their production capacities by 2011-12," steel secretary P K Rastogi said.


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## white_pawn

*'Sensex may touch 19,500'​*27 May 2009, 0054 hrs IST, PTI

NEW DELHI: Driven by the election outcome, the Sensex could catapult to 19,500 level this year, provided the government pushes through the reform agenda, analysts said. Experts believe that reforms expected to be carried out by the government may keep the sentiment upbeat and propel it to regain the levels, it had seen in 2007.


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## white_pawn

*Lamy banks on strong India to push Doha deal​*27 May 2009, 0121 hrs IST

KOLKATA: World Trade Organisation (WTO) director-general Pascal Lamy on Monday expressed confidence that the UPA government's return to power in 
India would help raise the momentum for pushing through the Doha deal. 

"The elections have given a clear vote of confidence to the Congress Party and its allies.... India is a key WTO member and has been actively engaged in the Doha Round since its launch in 2001. I am confident this will remain the Indian policy in the future," Lamy told TOI in an email interview on the WTO's expectations from the new dispensation in Delhi. 

"Given the current state of the world economy and the importance of greater global cooperation, I believe the WTO needs a strong India, and likewise, India needs a strengthened WTO," he added. 

Lamy said it was still premature to think of dates to convene a ministerial/mini-ministerial to conclude the Doha Round. "I remain of the view that it is a question of substance rather than timing. Obviously, the state of the world economy pleads for positive action on trade sooner rather than later. A Doha Round deal offers the lowest hanging global stimulus package. Every day which passes without a deal is a lost opportunity. But I also believe we need to get the substance right," he said. 

"I think its is important that negotiators roll up their sleeves and start re-engaging in earnest to solve the remaining issues. Ministers will meet in various configurations in the coming months in Indonesia, on the margins of the OECD meeting, on the margins of the G8 in Italy or in Singapore at the end of July. All these provide useful opportunities for political engagement," he added. 

Lamy said the WTO would come out with a fresh report next month to take stock of whether countries were taking steps to reduce protectionism. "G-20 leaders' meeting in London identified protectionism as one of the risks which could aggravate the crisis. The WTO is helping countries keep protectionist pressures at bay by monitoring measures taken by members," he said. "I believe countries should remain vigilant and avoid taking isolationist measures which could provoke a downward spiral and end up hurting all countries. As Mahatma Gandhi said, 'an eye for an makes the whole world blind'." 

Lamy banks on strong India to push Doha deal - India Business - Business - The Times of India


----------



## white_pawn

*Textile ministry draws up wishlist to boost ailing sector*​27 May 2009, 0112 hrs IST

NEW DELHI: The textiles ministry has drawn up a booster dose of fiscal and policy measures that will address specific needs of different types of 
fabrics and apparel manufacturers with the aim of reviving the sector that is second only to agriculture in terms of employment, top government sources told TOI. 

The textiles sector along with jewellery and infotech has emerged as a cause of worry for the government as the December stimulus package for clothesmakers has not yielded the desired result as the industry depends a great deal on exports to the US and Europe. Even finance minister Pranab Mukherjee on Tuesday acknowledged to a TV channel that more needed to be done for the sector, raising hopes that the measures could make it to the Budget. 

A draft package sent to the cabinet secretary suggests restoration of drawback rates, reinstitution of interest subvention on export credit, a two-year moratorium on term loan repayments, reduction in margin money requirement, exemptions from paying service tax/terminal excise duty and central sales tax. 

To give a fillip to items made by rural artisans, the draft also suggests bringing in more products such as hand-printed textiles under the purview of Vishesh Krishi and Gram Udyog Scheme that will get them more financial protection. 

In the December package for the industry, the government had reduced from 8% to 4% ad-valorem rates of central excise on textiles and accessories, additional funds of Rs 1,100 crore to ensure full refund of terminal excise duty/central excise and additional allocation of Rs 1,400 crore to clear the backlog of Technology Upgradation Fund Scheme (TUFS). 

"The above steps are not sufficient to improve the condition of the sector. For example, the reduction in central excise duty affects only man-made fibre industry; the additional allocation for TUFS (funds) in effect covers past dues only upto June 2008 and in reality is only payment of dues which was long overdue," the textiles ministry has told the cabinet secretary. 

In contrast, the ministry pointed out, competing countries such as China had been "incentivising their textiles and clothes industries" heavily to survive the global slowdown. China, for example, announced a 2-4% increase in VAT refund rates on textiles and clothes exports as early as July 2008 to take it to 13% and followed it up with more cuts to raise the refund level to 15% by February. 

Around the same period, Pakistan announced reintroduction of R&D assistance to garments exporters at 6%, 5% refund of interest paid on loans for machinery, 3% interest subvention for spinning industry and a two-year moratorium on repayment of principal and interest on term loans. 

Textile ministry draws up wishlist to boost ailing sector - India Business - Business - The Times of India


----------



## white_pawn

*Telecom M&As set to touch $50 billion​*27 May 2009, 0311 hrs IST

NEW DELHI: If Bharti Airtel's proposed $23 to $29 billion merger with South African operator MTN goes through, India's telecom M&A market will 
come of age either crossing or getting close to the $50 billion mark within a span of four years. 

The telecom sector has seen greater M&A deals than any other segment in the country. Since 2005, 15 M&A deals have been struck, crossing a value of $25 billion. If Bharti pulls off a marriage with MTN, this number can cross $50 billion. 

This also reveals that the size of Bharti-MTN deal will be roughly equal to or more than the last 15 telecom M&A deals in the country, though it is different since the transaction size is driven by share-swap rather than pure equity sale. 

M&As in the Indian telecom sector started in the late 90s with companies like Bharti, Hutchison (now Vodafone), and Birla-AT&T (now Idea) starting to buy out smaller cellular operators with one or two circle operations. The first large M&A deal began with Tata Cellular merging with Birla-AT&T. This was followed by their acquisition of Escotel and RPG. 

Bharti made multiple acquisitions in the late 90's to 2002. Hutchison first acquired Facel in Gujarat, and then BPL, to expand its footprint in Maharashtra, Tamil Nadu and Kerala. 

Of the 15 M&A deals struck since 2005, the largest was Vodafone's 67% acquisition of Hutchison Essar for $13.66 billion which placed the enterprise value of Hutchison's mobile footprint in India at $18.8 billion in 2007. 

The second largest deal in terms of valuation was more recently, in December 2008, when NTT DoCoMo bought 26% of Tata Tele for $2.7 billion, representing an enterprise value of $10.38 billion for Tata Tele. 

Many Indian companies have sold stakes on more than one occasion, and between 2005 and 2008 the valuations of these companies have steadily gone up. Tata Teleservices, which received a valuation of $10.38 billion from DoCoMo in 2008, was valued at a mere $1.27 billion by Temasec in August 2006 when it parted with 9.9% stake. 

Similarly, Providence and TA Associates valued Idea Cellular at approximately $3.9 billion at 2006-end. Subsequently, in mid-2008, Telecom Malaysia gave Idea an enterprise value of $7.6 billion and acquired 14.9% stake. 

Two of the most recent acquisitions include Telenor in Unitech and Etisalat in Swan neither of which had, at the time of the acquisition, any subscribers or operations in India. These deals were valued at $1.7 billion and $2 billion respectively. 

It is clear that India is one of the most attractive markets representing huge growth potential over the next five years. DoT, in its latest spectrum report, has forecast one billion mobile consumers by 2014. This would mean an average addition of 10 million subscribers per month for the next five years. 

It is also clear that no market in the world can sustain 12 to 13 operators per circle which is currently the case in India. It is expected that in line with the M&A deals over the last three years, further consolidation is on the cards in the near future. Most telecom experts forecast three to four national players with two or three regional operators over the next two to three years as average revenues per user decline, markets start to slowly saturate, and mobile telephony moves from the current land grab mentality to a fight for switching high-paying customers between competing mobile networks. 

It is, however critical that for India to move to an efficient number of market players from the present overcrowding, the government immediately start to review its April 2008 telecom M&A guidelines which place severe restrictions on inter-circle mergers within the first three years. 

Telecom M&As set to touch $50 billion - India Business - Business - The Times of India


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## white_pawn

*Investors richer by Rs 7L cr in 7 trading session​*27 May 2009, 0115 hrs IST 

MUMBAI: A unexpectedly clear mandate to the Congress-led UPA government has made Dalal Street investors richer by over Rs 7 lakh crore. 


Since the results of the Lok Sabha elections were announced on May 16, BSE's market capitalisation has increased by Rs 7.04 lakh crore to Rs 44.8 lakh crore now. In other words, in the last seven sessions, on an average, investor wealth has increased by Rs 1 lakh crore. And this is after BSE's market capitalisation declined by a little over Rs 1.1 lakh crore in Tuesday's sliding market. 

An analysis of prices of group A and B stocks on BSE also showed that in those seven sessions, four stocks Kaushalya Infra, UB (Holdings), Jindal Capital and Evernnon Systems have at least doubled from where they were on May 15, the day before the poll results were out. 

There are 1,410 stocks in BSE's A and B groups, of which 1,372 have given positive returns in the last seven sessions. Of these, 19 have given returns of 75% or more and 165 have returned of over 50%. On the other side of the spectrum, there are 38 stocks that gave negative returns, with three down over 10% in the last seven session. 

Among sensex stocks, Reliance Infrastructure, with a gain of 37.2% to Rs 1,123, tops the table. Among laggards were Bharti Airtel, TCS and Infosys. 

Investors richer by Rs 7L cr in 7 trading session - India Business - Business - The Times of India


----------



## white_pawn

*Drug exports up 31% on weak Re*

28 May 2009, 0205 hrs IST

NEW DELHI: Drug exports from India shot up 30.7% for the first 10 months of 2008-09 ended January 2009 compared with the previous year, backed by 
weak Indian currency and increased demand for low-cost generic medicines. 

Indian drugmakers exported medicines worth Rs 31,608 crore during April 2008-January 2009, which was even higher than exports worth Rs 29,139 crore for the fiscal 2007-08, as per figures compiled by Pharmaceutical Exports Promotion Council (Pharmexcil), a government body that oversees drug exports. 

In dollar terms, pharma exports touched $6.99 billion against $6.08 billion during the same period growing at 16.4%, said Pharmexcil executive director PV Appaji. 

The growth comes even as exports to the US market, the worlds largest market, has shown negative in the past two months. Exports to the US market dropped 13% in December and January, the past two months for which data is available, to Rs 1,263 crore. 

Mr Appaji explained, The US sales have been negatively affected by the US drug regulators decision to ban 30 drugs made by Ranbaxy, one of the largest exporters of Indian drugs to the country. 

Moreover, total exports also dipped in the dollar value for January. In January, exports grew 11.5% to Rs 2,917 crore compared with Rs 2,617 crore in the same month last year. But, in the dollar terms, exports during the month declined 10.1% to $597.38 million. This is because of the sharp appreciation in the value of dollar, which had risen almost 25% during the period. The rupee has since then strengthened investment flows into the country. 

Meanwhile, Russia has edged past Germany as the second-largest market for Indian drugmakers. Exports to Germany for the 10-month ended January 2009 stood at Rs 1,105 crore against Rs 1,197 crore for Russia. 

Indian companies export drugs to over 200 countries, but the top 25 markets, which includes the US, Germany, Russia, China and few European and African countries, account for about half of the total. Among the top 25 countries, exports for January declined for 18 countries in the dollar value, with the biggest drop in Germany (-34.92%), Spain (-35.21) and Brazil (-30.74%). 

Drug exports up 31% on weak Re- Foreign Trade-Economy-News-The Economic Times


----------



## white_pawn

*IFC to invest $1 bn in India next fiscal​*
NEW DELHI: International Finance Corporation (IFC), the World Bank's lending arm, on Tuesday said it plans to invest close to $1 billion (about Rs 
5,000 crore) in India in the next fiscal (July 2009-June 2010). 

"One billion dollar in India as a whole was done in the last year (July 2007-June 2008). This fiscal also we expect to do about the same amount...I think we would remain at the one billion dollar figure more or less for the next one or two years," IFC South Asia Manager-Infrastructure Advisory Vipul Bhagat said. 

He further said that IFC is focused on investing in the country's infrastructural projects and close to 50 per cent investment would be in this sector. 

"Infrastructure is a focus area for IFC especially because the Indian government has told IFC to do more in that sector," he added on the sidelines of a book release function organised by the CII and IFC. 

Besides investing in infrastructure, IFC also invest in agriculture and rural development among others. 

Bhagat further said that the economic slowdown has not impacted its investment plans and IFC faces no liquidity problem. 

IFC is a member of the World Bank Group which provides investments and advisory services to private sector in developing countries. 

IFC to invest $1 bn in India next fiscal- Finance-Economy-News-The Economic Times


----------



## white_pawn

*Govt to fast track Rs 20k cr road projects​*
NEW DELHI: With elections over, the government will soon consider clearing 21 infrastructure projects, at a total cost of about Rs 20,000 crore, to 
be implemented jointly by various state agencies and private sector developers. 

The model code of conduct for public servants during the national polls had forced central and state agencies to put on hold new public private partnership (PPP) projects. 

The PPP appraisal committee, chaired by finance secretary Ashok Chawla, will soon examine these projects, which are spread across the country. All of them are road projects, each at a cost of Rs 500-1,000 crore. About 13 projects have sought financial support from the government to achieve financial closure under the viability gap funding (VGF), said an official who asked not to be named. Under the VGF scheme, the government meets one-fifth of the total cost of the project, which could be doubled if the state agency feels so. 

The government feels spending on large infrastructure projects is crucial for protecting jobs and helping firms remain in business till the good times return. Besides making it easier for infrastructure project developers to access funds, the government had also decided to spend more on the sector last December. 

Of the Rs 20,000-crore extra Plan spending the government had announced last December to stimulate the economy, a significant part was allocated for building new roads. 

The official told ET that the government will also look into the grievances that infrastructure lenders may have. According to Hemant Kanoria, CMD of Srei Infrastructure Finance, it is difficult for such firms to borrow from multilateral agencies under the existing norms on overseas commercial borrowings. The private sector infrastructure lender wants the norms to be further eased. 

The PPPAC cleared two port and five highway projects in March with a spending of Rs 5,220 crore. Since January 2006, the panel has approved 101 projects, with an estimated cost of Rs 1,00,384 crore. These include 88 highways, nine ports, two airports, a tourism infrastructure project and a railway project. 

Govt to fast track Rs 20k cr road projects- Infrastructure-Economy-News-The Economic Times


----------



## Neo

*Siemens to invest Rs2.8bn in Gujarat plant ​* 
Friday, May 29, 2009

MUMBAI: Siemens Ltd said on Thursday it intends to invest 2.75 billion rupees for expansion of its steam turbine making unit in Gujarat.

The companys steam turbine unit at Vadodara currently makes industrial steam turbines of up to 45 MW. After the expansion, this would increase to 100 MW, it said in a release.

The expansion will strengthen companys exports markets in Asia, Europe and Africa, apart from catering to domestic market, the company said.

Siemens AG sources turbines of up to 15 MW from this plant to cater to its requirements in Asia and Africa and intends to do it for European markets in future, it said.

The expansion is expected to completed by 2010 and will provide additional employment to 200 people, it said.

The shares in the company closed up 3.21 per cent to 478.40 rupees, in a firm Mumbai market.


----------



## sob

New RIL gas find may put India among top 15- Oil & Gas-Energy-News By Industry-News-The Economic Times



> Reliance Industries (RIL) new gas finds in the Krishna Godavari (KG) basin, if validated by Indian regulators, may place India among the
> top 15 gas producers in the world.
> 
> RILs joint venture partner UK-based Hardy Oil and Gas on Wednesday had announced the discovery of 9.5 trillion cubic feet (tcf) of gas in the D-3 block of the KG basin and another find of 10.8 tcf in another block called D-9.
> 
> Neither of these finds has been certified yet by the Indian upstream regulator, but could potentially raise Indias proven reserves of natural gas to a significant extent. Blocks refer to areas, running into thousands of square kilometre, where companies have been allowed to search for oil and gas.
> 
> India had proven gas reserves of over 37 trillion cubic feet (tcf) at the end of 2007 according to British Petroleums 2008 Statistical review. If another 20 tcf of gas reserves is added, it will place India in the ranks of the top 15 gas producers in the world.
> 
> With 57 tcf, India will overtake countries like Azerbaijan, Netherlands and Libya. Indias gas reserves will, if these finds are endorsed by the regulator, then figure just below Canada.
> 
> Based upon the gas find, brokerage CLSA has upgraded RIL to outperform in the near future.
> 
> A technical evaluation report commissioned by Hardy Oil on the potential of the companys D3 and D9 exploration licences stated that the best estimate resources for the D3 Block was estimated at 9.5 trillion cubic feet of natural gas and the gross risked best estimate prospective resources in Block D9 is estimated at 10.8 tcf of natural gas and 143 million barrels of oil.
> 
> The technical evaluation of both the blocks were carried out by international consultants Gaffney, Cline & Associates (GCA). The report is on the companys website.
> 
> Commenting on the report, Sastry Karra, chief executive of Hardy in a statement said: The report confirms the significant hydrocarbon potential of our exploration assets in the emerging world class petroleum system of the KG basin in India. The two discoveries on D3 in conjunction with the acquisition of risk mitigating technologies and geotechnical studies have resulted in the upward revision of the perceived geological chance of success on both of our KG basin blocks. Hardy Oil has 10% in a special purpose vehicle (SPV) which is exploring these blocks. RIL has the remaining 90%.
> 
> When asked for comments a RIL spokesperson declined to do so as Indian upstream regulator the Directorate General of Hydrocarbons (DGH) has banned announcing any new find without its approval. V K Sibal, director general, DGH could not be reached for his comments.
> 
> Besides RILs latest discovery of 20 tcf, GSPC, a company owned by the Gujarat state government and ONGC have also claimed discoveries of 20 tcf of gas each in the same basin.
> 
> These were reported by the media in 2005 and 2006 but are also yet to be certified by the regulator. The DGH has asked both the firms to drill more wells before these claims are validated. Given this track record, it could be some time before Hardy Oils claims are confirmed, if indeed that happens.
> 
> 
> The KG basin, off Indias eastern seaboard, was relatively unexplored territory till the last years of the 20th century. It is now proving to be potentially Indias equivalent of North Sea or Gulf of Mexico.


----------



## sob

*Economy Grows Faster Than Expected*



> Economy grew faster than expected in the March quarter, helped by strength in farm and services sectors that suggested Asia's
> third-largest economy has already turned the corner and may be set for an early recovery.
> 
> "The economy has clearly performed better than expectations despite very challenging credit conditions," said Han-Sia Yeo, currency and rates strategist at Australia and New Zealand Banking Group in Singapore.
> 
> The economy grew 5.8 per cent from a year earlier in January-March, matching the upwardly revised rate in the previous quarter, data showed on Friday. That was still the lowest in four years, but above analysts' forecast of a 5.2 per cent annual expansion.
> 
> October-December growth was revised from 5.3 per cent. India does not publish seasonally-adjusted quarter-on-quarter growth figures, but analysts' estimates showed the economy grew 1.2 per cent in the quarter compared with a stagnant reading in September-December.
> 
> In the whole of the 2008/09 fiscal year to March 31, economy grew 6.7 per cent, its weakest in six years and well below rates of around 9 per cent of the previous three years, but still faster than predicted by economists in a Reuters poll.
> 
> The data fanned hopes that India was already on the mend, unlike other major economies that suffered a disastrous January-March quarter and have yet to show hard evidence of improvement.
> 
> Unlike most Asian economies, which heavily rely on exports to sustain economic growth, India is driven by domestic demand. But it still suffered a sharp slowdown in late 2008 as job cuts at exporters and outsourcing firms as well as the drying up of investment flows soured consumer and business sentiment.
> 
> Exports account for only about 15 per cent of India's GDP, less than half the levels in China and Japan.
> 
> "I think the GDP upgrade cycle has just started. We are past the eye of the storm," said Rajeev Malik, economist with Macquarie Capital in Singapore.
> 
> 
> MARKETS CHEER
> 
> Indian stocks jumped more than 3 per cent and the rupee and bond yields also rose as the numbers boosted investor confidence about India's outlook and suggested the central bank may be finished with interest rate cuts.
> 
> "I think policy rates have bottomed out so the next move for the policy rate is upwards," said A Prasanna, chief economist at ICICI Securities primary dealership in Mumbai, who predicted rates would stay on hold over the next 6-9 months.
> 
> *March quarter growth was only slightly below the 6.1 per cent expansion reported by China*, Asia's second-largest and the world's third-largest economy, which for years has served as the world's main growth engine.
> 
> Central bank expects growth of about 6 per cent for the whole of current 2009/2010 fiscal year.


Growth beats expectations, fuels recovery hopes- Indicators-Economy-News-The Economic Times


----------



## sob

*Indian Company unveils Rival to Blackberry*



> The little-known maker of Red Chery - a mobile application used for receiving mails from free and corporate email accounts - is dreaming
> big: eating into a market straddled by BlackBerry of Canada's Research In Motion and other similar service providers
> .
> 
> To make this happen, the Rs 15-crore software product company, AJ Square Consultancy, is banking on an aggressive pricing strategy, and hoping to rope in two million (20 lakh) subscribers by this fiscal-end.
> 
> "With an average revenue per subscriber of Rs 110 per annum, which is about a tenth of what existing players charge, we hope to earn around Rs 22 crore from 20 lakh subscribers by the end of this fiscal. We may even offer this service free at a later stage," AJ Square managing director Boaz Augustin said.
> 
> Like other similar products, Red Chery is a mobile application used for receiving mails from any of the free email accounts (Yahoo, Gmail, Hotmail and Rediffmail) and corporate email accounts (MS exchange and IBM Lotus servers) on a mobile handset.
> 
> "Red Chery is platform, telecom and mobile instrument independent. One can read emails like a short messaging services," Augustin added. AJ Square will be focussing on the corporate sector to push Red Chery.
> 
> According to Augustin, the company will offer services in Singapore and Europe once it stabilises its Indian operations and gets venture capital to the tune of $25 million. "We are open to dilute up to 45 per cent stake."
> 
> The 200-employee Madurai-based AJ Square is into development of e-commerce and gaming software for European companies.



BlackBerry gets an Indian rival- Telecom-News By Industry-News-The Economic Times


----------



## sob

*Oil Prices to be Deregulated*

he Government will consider deregulating petrol and diesel prices in six weeks, Petroleum Minister Murli Deora said on Friday.

"The issue of deregulation is being discussed and it will be put up to the cabinet for a decision," he said after taking charge of the Petroleum Ministry for the second time on Friday.

Asked about the time frame during which the decision is likely, he said: "In about six weeks." 

Govt may free fuel prices in 6 weeks: Deora - The Financial Express


----------



## King Julien

*First time in history, average Indian's income crosses Rs3000*
29 May 2009, 1639 hrs IST, PTI

NEW DELHI: The monthly income of an average Indian for the first time in the country's history has crossed Rs 3,000, thanks to economic reforms
and a high growth rate of above 9% achieved for three years since 2005-06.

The per capita income, a measure of average income of a citizen, went up 12.2% to Rs 37,490 per annum during 2008-09, said the advance estimate for national income released by the Central Statistical Organisation (CSO) on Friday.

During 2007-08, the per capita income was Rs 33,283 per annum.

The CSO data further reveals that the per capita income at constant (1999-2000) prices during the last fiscal rose to Rs 25,494 per annum from Rs 24,295 per annum in the previous year, recording a growth rate of 4.9 per cent.

The per capita income would have been higher but for the global economic crisis, which pulled down the country's economic growth
during 2008-09 to 6.7 per cent from 9 per cent in the previous fiscal.

The national income during the year went up to Rs 43.26 lakh crore, showing a rise of 14.2%, while the population of the country increased by 1.6 crore to 115.4 crore.

The CSO data further says that the national income at 1999-2000 prices increased by 6.4% to Rs 29.42 lakh crore during 2008-09.

First time in history, average Indian's income crosses Rs3000 - India - The Times of India


----------



## NSG_BlackCats

India's economic growth slows to 6.7% from 9% a year ago​
NEW DELHI: India's economy expanded by a stronger-than-expected 6.7 percent in the past fiscal year, giving a boost to the newly re-elected government, which aims to restore growth to scorching levels. 
The figure for the 12 months till the end of March 2009 was, however, still down from the nine percent posted a year earlier due to the global downturn but better than analysts' forecasts which were mostly in the range of 6.0 to 6.5 percent. 
Shares rose on the news with the benchmark Sensex index of 30 leading stocks was up 2.60 percent or 371.76 points at 14,667.77. 
Growth was lifted by an unexpectedly robust performance in the fourth quarter of 5.8 percent on the back of government spending and aggressive rate cuts by the central bank. The fourth quarter performance was, however, down compared to 8.6 percent in the same year-earlier period. The numbers were welcome news for the Congress-led government, which was swept back to power earlier this month on a poverty alleviation platform. 

"What you're seeing in these better-than-expected figures is essentially the effects of government spending, which is showing up in social and community services and construction," said D.K. Joshi, principal economist at leading Indian credit rating agency Crisil. 
Finance minister Pranab Mukherjee has said the government will make lifting growth its top priority to help India's "common man" -- even at the risk of ballooning the country's already large fiscal deficit. 
New Delhi is hoping to return growth back to levels around nine percent seen before the global financial crisis hit, and possibly push into double-digits. The government says it needs such growth levels to lift hundreds of millions of Indians out of poverty. 
Friday's full-year figures were also helped by an upward revision of third-quarter growth to 5.8 percent from 5.3 percent and a stronger performance in the farm sector. 
Agriculture accounts for nearly 20 percent of gross domestic product (GDP) and provides a living for two-thirds of the population. 
Analysts say the economy has been showing signs of a rebound, with car sales and cement output up due to interest rate cuts and a series of stimulus packages introduced by the previous administration. 
Eyes will now keenly be on the government's budget, expected in early July, to see how quickly it moves ahead on economic reforms such as disinvestment and opening up the financial sector to more foreign firms. 
India has weathered the international slump better than many nations because of its still relatively inward looking economy, which has only opened up slowly since 1991. 


* LINK*


----------



## Rajkumar

*Indian economy grows by 6.7 pc in 2008-09*



New Delhi: India's economy grew a faster than expected 5.8 per cent in the March quarter from a year earlier, as a still strong services sector offset a decline in manufacturing.

The manufacturing sector contracted 1.4 per cent in the January-March quarter from a year earlier, while farm output grew an annual 2.7 per cent, government data showed on Friday.

For the full year, India's economy grew 6.7 per cent in 2008/09, sharply slower than the 9.0 or more in the previous three years.

The annual growth for India's fiscal fourth quarter was above a median forecast of 5.2 per cent in a Reuters poll, but sharply lower than the year-ago quarter's 8.6 per cent expansion.

Key Points

*

Farm output in the March quarter grew 2.7 per cent from a year earlier vs a decline of 0.8 per cent in Oct-Dec quarter.

*

Manufacturing fell an annual 1.4 per cent in Jan-March vs a 0.9 per cent rise in the October-December period.

*

Construction grew an annual 6.8 per cent in Jan-March vs growth of 4.2 per cent in October-December.

*

Trade, hotels, transport and communication grew 6.3 per cent in Jan-March from a year earlier vs 5.9 per cent in October-December.

*

Financing, insurance, real estate and business services grew an annual 9.5 per cent in Jan-March vs 8.3 per cent in October-December.

Commentary:

ICICI Securities primary dealership Chief Economist A Prasanna: "This just confirms that after Q3 there was a sudden slowdown but things stabilised and improved in the fourth quarter. If this continues what we could see is in the first half probably the economy will continue to grow at a pace slightly below 6 per cent and in the second half it will grow closer to 7 per cent."

"There is a likelihood that the the second half growth could exceed 7 per cent so there is an upside to RBIs estimate of 6 per cent growth for the full year."

"I think policy rates have bottomed out so the next move for the policy rate is upwards, probably that will take some time. The central bank would prefer to pause and wait for concrete evidence of recovery before it starts hiking rates. We are looking at a 6-9 month period, where liquidity withdrawal will come first and possibly early next year rate hikes could start."

Macquarie Capital Economist Rajeev Mailk: "I think the GDP upgrade cycle has just started. We are past the eye of the storm. "There are two aspects. One is purely more stable political setting, along with improvement as far as capital markets and financing. Both mean that investment revival can come out earlier, with an additional push on infrastructure."

Bank of Baroda Chief Economist Rupa Rege Nitsure: "GDP growth of 6.7 per cent for 2008/09 is line with the RBI's projection, and way above the pessimistic forecasts given by the global think-tank. The GDP growth number for FY09 justifies the claim that India is dealing with the global crisis from a position of strength. "Fourth quarter is generally a better quarter than the earlier quarters, and 5.8 per cent in Q4 despite a severe industrial and export contraction shows that agriculture as well as certain components of the services sector are supportive of growth. This means that growth has bottomed out, or at least the deceleration has stopped. We may even see IIP (industrial output) in the positive territory from April onwards. But the only thing is that it will not be strongly positive to begin with, and we will see firmer signs of recovery only towards the end of the second quarter.


----------



## Neo

*Indias economic growth beats forecasts ​* 
Saturday, May 30, 2009

NEW DELHI: India reported unexpectedly robust economic growth on Friday, sending stocks to a near nine-month high, as analysts said the worst may be over for Asias third-largest economy.

Indias economy, which has weathered the global downturn better than many of its peers, expanded by 5.8 per cent in the last quarter of the fiscal year to March 2009, beating forecasts of 5.0 per cent, boosted by government spending.

Weve definitely turned the corner, Rajeev Malik, economist at Australias Macquarie Capital Securities, told AFP.

Growth for the full-year was 6.7 per cent, down from the nine per cent posted a year earlier, but outpacing predictions of as low as 6.0 per cent.

What youre seeing is essentially the effect of government spending, said D K Joshi, economist at Indian credit rating agency Crisil.

Government consumption grew 22 per cent year-on-year in the final quarter as authorities spent on social programmes and construction, helping to offset a sharp decline in private consumption and manufacturing.

Mumbais benchmark 30-share index jumped 2.3 per cent or 329.24 points to close at 14,625.25, its highest in nearly nine months, following the figures.

Analysts still expect the economy to slow more in the year to March 2010 due to fallout from the worldwide slump but said the deceleration may not be as severe as earlier forecast and the economy was on the mend.

Foreign capital now is pouring back into India amid signs of economic green shoots such as higher car sales and cement output following aggressive interest rate cuts and government stimulus packages.

A main reason (for the slowdown) was financing drying up as a result of the global crisis, said Malik. The revival in capital markets automatically means one of the negatives crippling investment is addressed.

Growth was seen at around six per cent in the first half and closer to seven per cent in the second. Next year, economists expect growth of eight per cent.

The economy still has significant pent-up demand for investment, especially in infrastructure and in affordable housing, said Goldman Sachs economist Tushar Poddar. The numbers gave cheer to the Congress-led government, which swept back to power earlier this month on a poverty alleviation platform. Its strong mandate is seen as a positive for investors, spelling political stability.

Finance Minister Pranab Mukherjee has said the government will make increasing growth its top priority to help Indias common man even at the risk of ballooning an already large fiscal deficit.

He said prophets of doom, referring to ratings agencies, were focusing on increased public spending without realising higher growth could help get India back on the path of fiscal rectitude through stronger tax revenues.

New Delhi hopes to return growth back to nine per cent and even into double-digits, saying it needs such expansion to lift hundreds of millions of Indians out of poverty.

Fridays figures were also helped by an upward revision of third-quarter growth to 5.8 per cent from 5.3 per cent and a stronger performance in agriculture, which accounts for nearly 20 per cent of gross domestic product.

Eyes will now be on the budget, due in early July, to see how quickly the government moves on reforms such as opening up the financial sector to more foreign firms and dis-investment, seen as boosters to growth and fiscal health.


----------



## white_pawn

*India economy headed higher, reforms in sight: analysts​*
31 May 2009, 0900 hrs IST, AGENCIES 

NEW DELHI: India's economy is on the upswing with eyes now keenly focused on July's planned budget for new market-opening moves by the freshly Financial crisis re-elected Congress government, analysts say. 

The country logged unexpectedly strong 5.8 percent growth in the final quarter to March 2009, against forecasts of 5.0 percent, figures late last week showed, prompting analysts to say the economy had turned the corner. 

"We see a new growth cycle taking shape with the first stop seven percent and then eight percent," said Rajeev Malik, economist at Macquarie Securities. 

India's economy expanded by 6.7 percent in the year to March 2009, down from nine percent a year earlier. 

But the country of nearly 1.2 billion people is performing far better than many others caught in the global slump, thanks to its vast, resilient domestic market, hefty government spending and aggressive rate cuts, analysts say. 

Foreign capital is pouring back into India with the benchmark Sensex share index near a nine-month high of 14,625 following a spurt in May after the Congress party was swept back to power with its biggest seat haul in 18 years. 

The strong mandate allows the Congress to govern without the support of the communists who propped up the government in parliament during its last term. 

Economists called the Congress win a "game changer" for the economy because it raises hopes of political stability for the next five years and the introduction of economic reforms that had been blocked by the Left. 

There has already been a flurry of announcements by new ministers promising such moves as loosening state-controlled fuel pump prices, which would help refinery profits, and cutting mobile call rates to propel India's explosively growing cellular sector. 

Economic growth is forecast at around six percent in the first half of the year and closer to seven percent in the second amid "green shoots" signs such as higher car sales and cement output. 

Next year, economists expect expansion of eight percent. 

"We expect a pick-up in economic activity from lower borrowing costs and higher government spending which is feeding through the system," said Shubhada Rao, economist at Yes Bank. 

In another positive sign, the Federation of Indian Chambers of Commerce and Industry (FICCI) announced Saturday a sharp upturn in business optimism. 

Some 57 percent of 300 firms polled in the final quarter to March declared economic conditions were "moderately to substantially" better -- up from the nine percent in the previous quarter who reported an improvement. 

"Companies are looking forward to a recovery on the basis of their order books and performance," FICCI economist Anjan Roy said.

Economists are now focused on the budget that Finance Minister Pranab Mukherjee has promised to present in the first week of July to see what steps he will take to open up India's still relatively inward-looking economy. 

Mukherjee said last week the government would press ahead with some long stymied reforms "in the financial sector and real economy" to make it more competitive and draw foreign investment. 

India economy headed higher, reforms in sight: analysts- Indicators-Economy-News-The Economic Times


----------



## white_pawn

*Exporters to get help in Budget, says Anand Sharma​*
NEW DELHI: The government will unveil measures in the Budget for helping exporters who are hit hard by recession in the developed economies, new 
Commerce and Industry Minister Anand Sharma said on Friday. 

"We shall look at the possibilities for more incentives. I will be discussing with the Finance Minister...some measures which will be announced in the next Budget," Sharma told reporters after taking charge of the twin portfolio of the commerce and industry. 

He would soon be interacting with the trade and industry bodies to assess the difficulties faced by them. "Whatever is required would be done in the coming weeks and months," he said. 

However, Sharma ruled out a "comprehensive review" of the controversial amendments in the Foreign Direct Investment (FDI) policy unveiled by his predecessor Kamal Nath in February. 

"I see no reason why a comprehensive review is required at this stage. Let's see how it functions," he said. 

Sharma, 56, who was the Minister of State for External Affairs in the previous government, said India would seek greater global economic engagement. 

Negotiations for the market-opening free trade agreements with ASEAN and South Korea along with a new India-Nepal treaty have been completed. "We shall be taking all this to Cabinet soon," he said. 

India's exports, which had clocked a healthy growth of over 30 per cent in the first half of 2008-09, entered into the negative zone in October 2008. 

The country's exports managed to show a meager growth of 3.4 per cent in 2008-09 aggregating $ 168 billion. 

The declining output of the manufacturing sector pulled down the economic growth rate in the fourth quarter of 2008-09 to 5.8 per cent and 6.7 per cent in the entire fiscal. 

Sharma said the government had announced stimulus packages which has has helped. "There are promising signs of revival of our industry." 

He said additional steps to facilitate exports, including reduction in transaction costs, would be announced in the forthcoming foreign trade policy, which will be unveiled in August. 

Expressing concern on the plantation sector, the minister said the government would soon announce a relief package for them. 

Exporters to get help in Budget, says Anand Sharma- Foreign Trade-Economy-News-The Economic Times


----------



## white_pawn

*Good news: At 6.7%, GDP grows more than expected​*
NEW DELHI: India's economy is estimated to have grown at 6.7% in 2008-09, the year of downturn and global financial meltdown. While this is only a 
bit higher than the 6.5% most in government were expecting, it is a lot better than the 5-5.5% that independent economists and analysts had projected. 

The reaction to the unexpectedly good news was immediate. The official data released on Friday morning saw stock markets rejoicing with the BSE sensex rising 329 points to cross 14,600 on a day when most market analysts had anticipated profit booking after a 700-point climb over the previous two trading sessions. 

Industry barons are now confident that 9% may be achieved in 2009-10 on the back of the expected rebound. 

The growth bucks all global projections that had estimated sub-6% growth of Asia's third largest economy. The RBI too in its monetary policy review earlier had projected GDP to grow at 6.5%, a view shared by many ministers and top officials. 

Given the growth and rise in the rupee's value against the dollar, India is again a trillion-dollar economy. It also means per capita income has crossed Rs 3,000 per month for the first time ever. 

The 5.8% growth in the fourth quarter, which rode on reasonably robust growth in some services sectors like construction (6.8%), indicates that the downturn may be less severe than earlier feared and the recovery may be closer at hand. 

It also appears that the over Rs 3 lakh crore injected into the system through three stimulus packages has started showing results. The Rs 70,000 crore loan waiver for farmers, high salaries to government employees and increased expenditure on the National Rural Employment Guarantee scheme after it was made nationwide have helped stemmed the downturn. 

A report by Goldman Sachs pointed out that government consumption, which grew by 22% in Q4, was the largest contributor to boosting growth. 

Good news: At 6.7%, GDP grows more than expected - India Business - Business - The Times of India


----------



## white_pawn

*Sensex at nine-month high, Nifty above 4500​*1 Jun 2009, 1035 hrs IST

MUMBAI: The Bombay Stock Exchange benchmark Sensex climbed to hit its nine-month high, rising over 281 points in early trade on Monday, with metal 
and realty stocks leading the rally, supported by firming global equity markets. 

The 30-share index, which had gained nearly 1,040 points in the last three sessions, jumped 281.56 points, or 1.65%, to 14,906.81, a level last seen in September 2008. 

Similarly, the wide-based National Stock Exchange index Nifty regained the 4,500-points level to quote 90.15 points higher at 4,539.10. 

Stock brokers said series of positive factors, such as firming global markets, good GDP numbers and flow of funds into the domestic markets, mainly buoyed on the trading sentiment. 

Reports that FIIs had invested over Rs 20,000 crore in the markets last month, also lifted spirits, they added. 

Major gainers, which extended support to the Sensex, were Reliance Industries up 1.01% at Rs 2,300.05, Reliance Infra by 3.07% to Rs 1,316.10, RCom by 5.79% at Rs 323.50, Infosys Technologies by 1.25% to Rs 1,621.95 and DLF Ltd by 4.51% to Rs 421.50. 

Besides, State Bank of India rose 1.28% to Rs 1,893, ICICI Bank 1.65% to Rs 752.90, HDFC Bank 1.11% to Rs 1,458.40, Sterlite Industries 1.98% to Rs 635 and Tata Steel 3.37% to Rs 420. 

Meanwhile, the Hong Kong's Hang Seng was up 2%, and Japan's Nikkei up 1.6% in early trade. 

Sensex at nine-month high, Nifty above 4500 - India Business - Business - The Times of India


----------



## white_pawn

*Indias syndicated loans up 9% in Jan-May​*1 Jun 2009, 0038 hrs IST

NEW DELHI: India's syndicated loans totalled $14.1 billion for the period January-May this year, highlighting one of the few nations to post a 9% 
year-on-year volume increase (in proceeds) over the corresponding period in 2008. 

In fact, India is the only country other than Spain to have registered an increase in borrowings till May this year. Experts say that this, along with a modest improvement in sectors like steel, cement and capital goods, is a positive sign for the economy. 

The domestic debt markets were bolstered by the recent $3-billion loan syndication for Indian Oil Corporation to finance its Paradip refinery. 

The majority of domestic borrowers this year have been energy and power companies, borrowing a combined $8 billion from seven issues, or 60% of the overall India's syndicated loan market, an analysis by Thomson Reuters shows. 

Says Rajagopal S, partner mergers and acquisitions Grant Thornton India: "There has definitely been an increase in debt market activities in the past few months. A general decline in interest rates (as evidenced by a sharp fall in Gilt yields) coupled with an increase in appetite for risk amongst financial institutions are seen as key reasons for heightened activity in debt capital markets. At a time when bank lending is yet to fully pick up this is being viewed by corporates as an alternate source of debt capital to address liquidity constraints and extend maturity of current debt obligations. However, we believe that corporates are yet to fully resume capex activity". 

Experts say that though this is a positive sign and will improve business sentiment, but cannot on its own be a sign of revival. 

Kaushal Sampat, COO, Dun & Bradstreet India says While a 9% y-o-y growth in syndicated loans for Indian companies is certainly a positive sign, on its own, one cannot conclude this to be a signal of revival. Nonetheless, this year-to-date growth is not without merit, as it does indicate improvement in business sentiment. 

This, along with other indications in the domestic economy, such as increase in rail freight loading during Mar-Apr 09, modest improvement in sectors such as cement, steel, consumer durables (auto) and capital goods could be considered as some incipient signs of stability entering the economy. Sustained revival in the economy will happen in H2, FY10 and all these factors will become the basis for that. 

Moreover, despite a recent downturn in equity capital markets, follow-on share offerings have surged to over $100 billion mark globally. India's follow-on share offerings have already surpassed full year 2008, raising almost $2 billion in proceeds from five issues. 

All Asian markets experienced an increase in follow-on offerings, except for Malaysia, with a decline of nearly 84%. 

India?s syndicated loans up 9% in Jan-May - India Business - Business - The Times of India


----------



## PeacefulIndian

I don't think it is required to post each & every news from Economic/Business Times here. Only important ones would suffice.


----------



## Nihat

PeacefulIndian said:


> I don't think it is required to post each & every news from Economic/Business Times here. Only important ones would suffice.



Which is is exactly what I had mentioned some pages back but some just cannot get over their obsession with posting every slight bit of +ve news instead of giving a proper reflection of Indian Economy as it stands today.


----------



## white_pawn

*Govt to consider 17 new SEZ proposals tomorrow​*
NEW DELHI: The government will tomorrow consider proposals for setting up 17 special economic zones (SEZs), including those of Larsen and Toubro, 
Emaar MGF and Gulf Oil Corporation. 

The Board of Approval (BoA), headed by Commerce Secretary G K Pillai, will also consider requests from realty major DLF for de-notification of its IT-ITeS SEZs in Gujarat, Haryana, West Bengal and Orissa. 

"The developer (DLF) has requested for de-notification ... due to slowdown in the economy and liquidity crunch in the overall industry," the agenda document of the meeting said. 

Scores of leading SEZ promoters, including Infosys Technologies, CMC Ltd, Hindalco Industries, NIIT Technologies, HCL Technologies, Orient Craft Infrastructure, L&T Phoenix Infoparks and K Raheja Corp, have sought time from the BoA, which is meeting here on June 2. 

Larsen and Toubro has proposed to set up an IT SEZ in Mumbai, while Gulf Oil Corporation has moved application for a similar tax-free zone in Bangalore. 

Other proposals for new SEZs include Emaar MGF's IT-related SEZ in Kerala. 

Since 2006, when the SEZ Act was notified, formal approvals have been granted for setting up 568 SEZs, of which 315 have been notified. 

Exports from SEZs grew 36 per cent to Rs 90,416 crore in 2008-09 from Rs 66,638 crore in the previous fiscal. 

Govt to consider 17 new SEZ proposals tomorrow- Infrastructure-Economy-News-The Economic Times


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## white_pawn

*Indian ADRs gain more than $20 bn in May​*
NEW YORK: Riding the wave of optimism over a stable Indian government and positive global cues, Indian companies trading on American bourses saw 
their total market value zoom by more than $ 20 billion in the month of May. 

The market capitalisation of 16 Indian firms listed as American Depository Receipts soared by $20.41 billion, with private sector lender ICICI Bank and IT major Wipro together accounting for nearly half of the total gains. 

With the general elections throwing a massive mandate for the Congress-led coalition in India, investors anticipate the reforms process to gain momentum. Moreover, in May, the US market was mostly in the positive territory amid a clutch of encouraging data including those from the stress tests. 

Among the 16 companies trading on the New York Stock Exchange and the Nasdaq, ICICI Bank's valuation jumped as much as $5.78 billion. 

The market value of Wipro climbed $3.72 billion in May. 

Another major gainer was leading copper producer Sterlite Industries whose valuation went up as much as $3.34 billion. 

The US benchmark index Dow Jones Industrial Average (DJIA) gained about four per cent in the last one month. 

Private sector lender HDFC Bank and IT bellwether Infosys Technologies too witnessed significant increase in their respective market capitalisation. 

HDFC Bank valuation went up by $3.1 billion, while the market capitalisation of Infosys surged $2.42 billion. 

In addition, auto maker Tata Motors' market capitalisation grew by $926 million in May, while that of telecom major Mahanagar Telephone Nigam Ltd rose by $465 million. 

However, during the month of May, telecom major Tata Communications Ltd ended as the lone loser. The company witnessed a value erosion of $541 million. 

Meanwhile, pharma major Dr Reddy's Laboratories, BPO firm Genpact and IT major Patni Computer System saw their respective valuations jump by $420 million, $281 million and $169 million dollars, respectively. 

Outsourcing firms- WNS and EXLServices, internet entities- Rediff.com and Sify Technologies and Satyam Computer Services witnessed their valuations rise in the range of $nine million to $111 million. 

Indian ADRs gain more than $20 bn in May- Market News-Stocks-Markets-The Economic Times


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## white_pawn

*India Inc tunes into FM to play those wishes​*
2 Jun 2009, 0233 hrs IST 

NEW DELHI: Captains of Indian industry met finance minister Pranab Mukherjee seeking interest rate cuts, simplifying tax structure, measures to 
stimulate investment across sectors, besides incentives for exporters and small and medium enterprises. 

Though the finance minister did not give any assurance, he conveyed to the industry that times are tough. The meeting that lasted for more than two hours was attended by the heads of industry associations CII, Ficci and Assocham besides industrialists like Bharti chairman Sunil Mittal, Videocon chairman Venugopal Dhoot, Raymond India CMD Gautam Singhania, Larsen & Toubro chairman AM Naik, Mahindra & Mahindra chairman Anand Mahindra and others. 

Indeed, Corporate India is seeking some bold measures from the forthcoming budget to revive demand and put the economy back on track. "More stimulus should be given to foreign direct investment into India with special focus on increasing spend on infrastructure," said Bharti Group chairman Sunil Mittal. 

Industry association CII has suggested that besides bringing down the fiscal deficit from the current 8% of GDP to 4%, the government should also increase the infrastructure spending from the current 4% of GDP to 11% by 2012. The chamber also said the forthcoming budget should be an investment-led budget. 

Says L&T chairman AM Naik, "Long-term interest rate on infrastructure projects should not be more than 7-8% and income from projects located abroad should be tax exempted. Depreciation should be brought up to 25% and multilevel dividend tax should removed." 

Ficci's recommendations too were focused on restoring the GDP to the 9% level, ensuring national security and improving governance. 

The chamber's president Harsh Pati Singhania said measures such as lowering lending interest rates to 8-10% and introducing a stabilised SEZ policy are imperative for growth. 

India Inc tunes into FM to play those wishes- Indicators-Economy-News-The Economic Times


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## sob

This is not a good news for the Indian economy. It will have an impact in the coming months. Stock markets have still not factored this in their euphoric rise.

*Exports fall for seventh consecutive month*

Indias merchandise exports declined for the seventh month in a row in April on weak demand from developed countries, where consumers and businesses are cutting spending in the midst of one of the worst recessions ever.
The ministry of commerce and industry said on Monday that exports in April fell by 33.2% on an annual basis to $10.7 billion (Rs50,290 crore today). They had dropped 33% in March as well.

Exports contribute to 16% of Indias gross domestic product, low in comparison with other regional economies such as China.

Such a low dependence on foreign demand is one reason why Indias economy could be stabilizing earlier than more export-oriented economies.

The government had said on Friday that output grew 5.8% in the fourth quarter of 2009-10 and 6.7% for the entire fiscal year, beating most estimates.

Imports fell faster than exports in April, by 36.6%, raising hopes that Indias trade deficit will be contained and add strength to the rupee.

Imports also declined for the sixth successive month in April by 36.6% to $15.7 billion.While oil imports fell by 58.5% to $3.6 billion due to lower crude oil prices, non-oil imports declined 24.6% to $12.1 billion as a slower economy lowered domestic demand for industrial inputs and machines for new factories.

Indias new commerce and industry minister Anand Sharma, after taking charge on Friday, had said he expects export growth to be flat this fiscal year, which he described as an achievement given that global trade is projected to contract by 9-11% in 2009.

Sharma also said more incentives for exporters will be announced in the Union budget that is expected in July and the foreign trade policy scheduled for August.

The decline in exports is likely to continue until September, Indias trade secretary Gopal K. Pillai had said on 13 April. Falling overseas sales may cost India about 10 million jobs, according to estimates from the Federation of Indian Export Organisations (Fieo), a lobby group.

The April foreign trade data serves as a painful reminder that the global turmoil is likely still hurting the Indian economy.

With major economic powers such as the US and Europe still deep in recession, international trade remains subdued.

It is difficult for India to find export markets, as only a handful of economies around the world manage to expand during the difficult times. An annual contraction in exports is inevitable for India, said Sherman Chan, economist with Moodys Economy.com.

The trade deficit in April increased to $5 billion compared with $4 billion in March, even though it is far lower than the peak of $13 billion in August.

Exports fall for seventh month on weak demand


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## PeacefulIndian

Nihat said:


> Which is is exactly what I had mentioned some pages back but some just cannot get over their obsession with posting every slight bit of +ve news instead of giving a proper reflection of Indian Economy as it stands today.



I agree. And strangely, it still has not stopped even after our discussion.


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## white_pawn

Govt approves 10 new SEZs; gives time to Ambani, Rahejas

NEW DELHI: The government on Tuesday approved 10 Special Economic Zones and allowed one-year extension to four projects, including Reliance 
Industries' Mukesh Ambani- promoted Rewas Ports for land acquisition. 

The Board of Approval (BoA) in the Commerce Ministry gave formal approvals to eight proposals, including those of Gulf Oil Corporation, Emmar MGF and Larsen and Toubro. Two other proposals were also given 'in-principle' approvals. 

The board also allowed DLF to withdraw four of its IT/ITeS tax-free enclaves, asking the realty major to refund Rs 6-7 crore worth of fiscal sops the company would have availed of. DLF had cited economic downturn as reasons for seeking withdrawal. 

Four developers, including Ambani-promoted Rewas Ports in Raigad, Maharashtra, and K Raheja group have been allowed extension of in-principle approval by one year. These projects have not been able to acquire the required land. 

However, the BoA outrightly rejected the proposals of Videocon Realty and Writers and Publishers for SEZs in Indore, on the ground that the promoters have not acquired "even an inch" of land. 

"We want serious players and don't (want) to spoil the SEZ policy," Additional Secretary in the Commerce Ministry D K Mittal said after the BoA meeting. 

Govt approves 10 new SEZs; gives time to Ambani, Rahejas- Infrastructure-Economy-News-The Economic Times


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## white_pawn

*Indian exports dive for seventh month​*
NEW DELHI: India's exports of jewelry, garments and other goods slid 33 per cent in April, shrinking for the seventh straight month, hit by a demand 
slump in major global markets, official data showed Monday. 

Exports slumped to 10.74 billion dollars in April from 16.08 billion dollars a year ago as the global appetite for made-in-India goods contracted. 

The figures came days after the newly re-elected Congress-led government promised more measures to help exporters hard-hit by the recession in developed economies. 

But exports account for just 15 per cent of gross domestic product in India, shielding the economy from the impact of the worst global downturn since the 1930s Great Depression. 

The country logged unexpectedly strong 5.8 per cent growth in the final quarter to March 2009, fuelled by aggressive rate cuts and fiscal stimulus measures, prompting analysts to say India's economy was on the upturn. 

Imports slumped in April for the third straight month, falling 36.6 per cent to 15.8 billion, reflecting a tumble in world oil prices and easing demand. 

The trade deficit for April was five billion dollars, down from 8.7 billion dollars a year ago. 

After posting blistering export growth of more than 30 per cent in the first six months of the financial year to March 2009, overseas sales began declining in October when the global financial crisis began to bite. 

The government has forecast more bad news in the months ahead for export demand for Indian goods like textiles, jewelry and handicrafts. 

It has forecast exports will keep falling until at least September and the turnaround will be only gradual as the world economy recovers. 

For the last fiscal year, exports grew by just 3.4 per cent to 168.70 billion dollars. The new trade minister, Anand Sharma, said last Friday the government aims to achieve the same target in this fiscal year. 

Sharma pledged the government, which has already raised subsidies for exporters, would announce more trade-boosting measures, including a reduction in transaction costs, in the coming months. 

Indian exports dive for seventh month- Foreign Trade-Economy-News-The Economic Times


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## white_pawn

*Core sector growth doubles to 4.3%*​3 Jun 2009, 0027 hrs IST

NEW DELHI: As a clear sign of economic recovery, the growth rate of core sectors like cement, finished steel, coal and electricity nearly doubled 
to 4.3% during April 2009 as against 2.3% in the same period last year, when the economy was booming and was not affected by the global slowdown. 

"April figures are very encouraging. But we are still in the recovery stage,'' said Saumitra Chaudhuri, member of the PM's Economic Advisory Council. 

The output of six core sectors has over 26% weight in the Index of Industrial Production. The recovery was noticed in coal, cement, electricity and steel sectors. This is certainly positive news," Chaudhuri said, adding that the performance of the cement sector indicates that construction sector is performing well. The output of cement in April went up by 11.7% compared to 6.9% during the corresponding month last fiscal. 

Commenting on the core sector's performance during April, planning commission member Anwarul Hoda said, We seem to be going out of economic slowdown.'' 

Regarding 1.6% growth in the finished output of steel as against a contraction by 0.6% in the same period last year, Chaudhuri said, Growth in steel compared to the second half of the last year is good. This is a passing phase and some improvement is still needed." 

Coal production registered a growth rate of 13.2% during the month as compared to 10.4% in the corresponding period last year. Similarly, electricity generation increased by 6% in April'09 against 1.4%. 

Crude oil production, however, continued to remain in the negative zone as it dipped by 3.1% in April from 1% a year ago. 

Core sector growth doubles to 4.3% - India Business - Business - The Times of India


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## white_pawn

*Govt plans big-bang divestment​*4 Jun 2009, 0049 hrs IST

NEW DELHI: With Left Flag out of sight, the government is planning a big-bang disinvestment in the state-owned PSUs. It plans to raise over Rs 
25,000 crore in 2009-10, not only to reduce fiscal deficit but also for expansion of public sector enterprises. 

The disinvestment department, which was out of action for some time due to strong opposition from the Left parties against any selloff of government stake in PSUs directly or indirectly, has again come under the limelight. Leading merchant bankers are approaching the department's officials to get business in near future. 

A senior merchant banker said the department is ready with a number of proposals of stake sales in the coming months. Draft prospectus of PSUs like Oil India, National Hydro Power, RITES and UTI Asset Management Company have already been cleared by Sebi. As the sentiment in the equity market is much better now, these companies may decide to go ahead with their public issues soon. 

A senior government official said when the Sensex was hovering around 6,000 points in 2003-04, the government could raise Rs 15,500 through divestments. With Sensex around 14,500 now, government can think of raising anything upwards of Rs 25,000 crore. 

The main chunk of fund, a source said, would come from the divestment of government stakes in blue chip companies like BSNL, MMTC, NMDC, Coal India, NTPC and NALCO. Disinvestment of up to 10% in BSNL alone could fetch around Rs 20,000 crore. 

Similarly, the market capitalisations of MMTC and NMDC are at present around Rs 1,60,000 crore and Rs 1,40,000 crore respectively, with government's holdings around 99%. Divestments in these companies can also raise substantial funds, the source added. 

According to a Religare report on disinvestment, a government committee had already recommended selloff of stakes in 25 companies. But, because of opposition from Left parties, the government could not proceed. As the scenario has changed now, government is likely to go ahead with disinvestment of its stakes in these companies. 

Besides these companies, government had also planned to do strategic sale in many other companies but could not proceed due to opposition from allies. In Bharat Aluminium, the government had sold 51% stake to Sterlite Industries, which is now called Vedanta. As per the original agreement with Vedanta, the government should sale the remaining stake also. As management has been already transferred to the private partner, the government is considering to exit the company. 

Govt plans big-bang divestment - India Business - Business - The Times of India


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## white_pawn

*Malaysian, Russian cos may bid for WiMAX​*4 Jun 2009, 0035 hrs IST

AMSTERDAM: Russian operator Yota and Malaysian operator Packet One are in serious talks with several Indian firms to enter India's Broadband 
Wireless Access (BWA) market and are also likely to emerge as bidders in the WiMAX auctions scheduled to be held later this year. 

The spread of mobile broadband is recognized by the government as being crucial to India's development objectives, especially in rural areas in the areas of M-care, M-commerce, M-learning and M-governance. 

"We are open to coming in as a consultant with a minority stake or as a majority player bringing in the financial investment, experience and team to the Indian market," Yegor Ivanov, Yota's director, business development, told TOI. 

According to Ivanov, Yota is already in talks with MTNL to launch its WiMAX rollout in Delhi and Mumbai in a franchisee role along with a local partner. The total project cost is estimated to be in the range of $200 to $250 million. 

These negotiations, which are being conducted with the help of Intel Capital are expected to conclude by the end of June, he confirmed. Yota also admitted to being in talks with the Sun group and the Tatas for a partnership to enter the WiMAX space though he said the talks are not concrete at this stage. 

Yota has set aside $0.5 billion for international expansion. "Depending on the business case, we will invest this money in either India or China. We have some intentions to bid for WiMAX spectrum when the auctions are announced, but these are not concrete. We are still planning our entry strategy," he said. 

Yota, which launched commercial Mobile WiMAX services in Moscow and St Petersburg on June 1 and Packet One Networks (P1) a Malaysian converged telecom, broadband and Wimax service provider are probably the only global operators to declare a serious investment appetite in India. 

"We will bid in India's WiMAX auctions along with a local partner," Michael Li, CEO, Packet One told ToI. According to him, the mobile broadband opportunity in India is immense. India, Pakistan and Bangladesh together serve a broadband population of a little over 2 million which shows the tremendous room for growth. 

However, US operator Clearwire, which was also reported to have interest in bidding for WiMAX spectrum in India clarified that it does not have the investment appetite. Clearwire's interest in international networks is only in helping other operators build networks. "We will not be investing our own money but are willing to offer our expertise to help governments and operators make the right technology choice," Barry West, president, Clearwire told ToI. 

Clearwire recently launched mobile WiMAX services in Atlanta and Georgia and expects to launch in a total of nine new cities this year. It also plans to convert major fixed-wireless markets like Chicago, Philadelphia, Honolulu and Charlotte to mobile WiMAX. 

WiMAX boasts of 475 deployments in 140 countries. According to Ron Resnick, WiMAX Forum president, the older HSPA technology available for mobile broadband is 2.5 times the cost of WiMAX with just one-third of its throughput. "The other potential competing technology which works on a GSM platform is LTE or Long Term Evolution but it is at least two years away from hitting the market," he said.


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## Rajkumar

Sensex closes above 15K for 1st time since Sept '08


The benchmark indices gained strength in the last hour of trade ahead of the government's much-awaited announcement on the budget date. The Union Budget would be held on July 3, 2009. The Rail Budget would be presented on July 1 while the Economic Survey would get announced on July 2.

This rally was led by infrastructure (capital goods + power), telecom, pharma, banking, realty and select cement stocks, which helped the Sensex to close above the 15,000 mark for the first time since September 2, 2008. The broader indices outperformed the benchmark indices and kept the market breadth strong.

The 30-share BSE Sensex closed 137.78 points or 0.93% higher at 15,008.68, after seeing an intraday high of 15,026.03 and low of 14,599.43. The 50-share NSE Nifty touched an intraday high of 4582.20 and low of 4453.45, before closing at 4572.65, up 0.93% or 41.95 points. Both indices had traded lower in the first half of the trade.

L&T, ICICI Bank, HDFC, Bharti, HUL, BHEL, Reliance Industries, Reliance Communication, Reliance Infrastructure, DLF and HDFC Bank were being supportive to the markets. However, the sell-off in metal and select technology stocks capped the gains.

President Pratibha Patil, in her first address to the joint session of both houses of Parliament, said that government's stake in public sector undertakings (PSUs) will not fall below 51%. She added that the government will prepare a roadmap to list public sector units.


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## Neo

*India keen on swift EU free trade deal ​* 
Thursday, June 04, 2009

NEW DELHI: India said on Wednesday it wanted the swift conclusion of a free trade agreement with the European Union and expected some progress when the next round of talks takes place here next month.

India is committed (to a) very fast and expeditious conclusion of this agreement we are making progress, Commerce Ministry Joint Secretary Neeraj Gupta told reporters.India and the EU have had a strategic partnership agreement since 2004 and talks on an free trade agreement began last year, but progress has been slow.

The two sides are due to hold another round of talks in New Delhi in July. After six rounds the two parties have not been able to arrive at a consensus on the level of trade to be covered under the deal that would eventually eliminate duties on goods.

The European Union is Indias largest commercial partner, ahead of China, with annual bilateral trade around 60 billion euros (85.4 billion dollars). But India ranks only ninth behind South Korea in the EUs list of major trading partners a position the French government described last year as abnormal.

Europe wants to boost ties with the emerging Asian economic giant, which is seen as a relative haven of stability in an often volatile region. The south Asian giants nearly 1.2-billion population and growing middle class represent a huge market for EU companies. The European Union is increasingly looking towards the massive growth potential of Asian markets.


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## Neo

To be continued here.


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